Property Market 2020

lawrencesummers

Wii776 wrote: »

Pointing out proximity to schools is a bit redundant... there is one bedroom

Maybe they are targeting the Numerous single teacher who Manufacture crack cocaine on the side

Wompa1

cnocbui wrote: »

So before the virus, houses were not over priced in Dublin then.

If you are going to make a statement like 'houses are overpriced', then there needs to be something to measure or compare the prices against. House prices in other European capital cities is a very appropriate yardstick. I understand why you would want to deny this, but it's not going away as a valid yardstick just because it doesn't suit your attempted narrative.

The banks are taking a defensive stance on the basis of expectations of peoples abilities to repay loans - they are in effect undervaluing so that should they have to repossess and sell because of a default, they will have an easy job of it because they undervalued in the first place.

I'd like to see some of the overvalued crowd walk into a car yard and try and argue down the price of a new BMW on the basis of a bank refusing to lend the full amount because the bank thought it overvalued. BMW would have no hesitation in telling the bank wher it could stick it's valuation.

Is there much demand for BMWs and houses right now? That will set the market value in the coming months.

mees2020

SozBbz wrote: »

Property rights are ingrained in our constitution - I wouldnt bank on this claim.

The govt are pressuring the banks for cheaper rates? Havent heard that one in a while. They were when they were north of 4%, but I havent heard that as being a topic in at least 18 months. My mortgage is at 2.25% so while obviously I'd like a lower rate, its hardly that problematic.

Euro area average is 1.35pc. Can you do the math for your mortgage how much you are paying extra to the banks? There will be further pressure to lower it.

https://www.bonkers.ie/blog/mortgages/heres-why-mortgage-rates-in-ireland-are-so-high/

Number 1? Arrears.

Are you happy to pay for other people to live for years in the houses they can't afford? Ultimately, you are now paying more because of this and you also can't buy a more expensive house, because your interest is higher than it could be, right?

I am not saying banks should be able to repossess fast, but if repossession doesn't happen at all (and this is the case in Ireland), this isn't good either.

SozBbz

Wompa1 wrote: »

Is there much demand for BMWs and houses right now? That will set the market value in the coming months.

This is what I've been saying all along. What we have now is paralysis. We won't be able to know the effects of this crisis until we start to open up again, September at the earliest.

Obviously I think everyone agrees that the whole economy is going to be impacted and the housing market is no different, but its too early to know by how much and what unintended and unforeseen consequences may occur as a result.

mees2020

awec wrote: »

It's not even a guide, it's a pretty worthless number. Not even banks do this when they figure out your ability to repay because it's just bad data.

Interest rates could be triple what they are now in 5 years. Or they could be half what they are now. In 20 years interest rates could be 20 times what they are now. This isn't even accounting for inflation.

I'm not talking about getting the best deal, I'm just talking in general. "This mortgage will cost me x euro over 30 years" is impossible. You may as well just put a random number in.

The total term cost should not be used as a major factor. The monthly cost, based around current interest rates for the relatively near future is the only reasonably accurate affordability indicator that exists. If you want to compare interest payable, then compare it over the next ~5 years, anything beyond that is total fluff.

1. If interest rates 20 times what they are now, this whole discussion doesn't have sense. Please do not bring into this discussion the element of "what if Elon Musk finally builds a rocket and half of Earth population will migrate to Mars".

2. "This mortgage will cost me x euro over 30 years" is impossible.
My example was if mortgage for x amount per month will be for 30 years or for 20 years.

"The total term cost should not be used as a major factor."

Basically, what you are saying, if I understood it correctly, that neither banks are considering, if they earn 174k or 85k from lending the money because it's a bad data, neither should be buyers considering how much the mortgage would cost them in 30 or 20 years because Elon can ruin Irish property market in 20 years from now.

So, if this is your advise for a long term buying people, right?

hometruths

SozBbz wrote: »

Fine - willing and able. The point I was making is theres no gold standard or absolute value/worth of a house. The market sets the price and it can be below or above land/construction costs depending on where the market is at that point in time.

I actually repeatedly made exactly the point bolded above about 3 days ago on this same thread and was rounded on by other posters. FFS. Don't get me wrong, I knew I was right, but this thread is just so draining at times.

In fairness, if I recall correctly, you were saying that banks would not let you pay more for the house than their valuation.

Posters rounded on you saying banks could not give a fig if you overpay, as long as you don't do it with their money.

Which is exactly what the point bolded above says too.

SozBbz

mees2020 wrote: »

Euro area average is 1.35pc. Can you do the math for your mortgage how much you are paying extra to the banks? There will be further pressure to lower it.

https://www.bonkers.ie/blog/mortgages/heres-why-mortgage-rates-in-ireland-are-so-high/

Number 1? Arrears.

Are you happy to pay for other people to live for years in the houses they can't afford? Ultimately, you are now paying more because of this and you also can't buy a more expensive house, because your interest is higher than it could be, right?

I am not saying banks should be able to repossess fast, but if repossession doesn't happen at all (and this is the case in Ireland), this isn't good either.

Where did I say I don't want a lower rate? I actually said I'd like one very much.

Thats not the same as taking a look at the writing on the wall with Sinn Fein winning the % of the vote that they did just 3 months ago. Evictions are politically unpalatable and legally complex.

hometruths

mees2020 wrote: »

Affordability of the money is what mainly dictates the estate price in this country. No cheap money from the banks, price drops.

It seems to me that this is an inarguable fact.

And the poster is making a rational buying decision based on a number of factors he has weighed up, presumably the above included.

If prices are lower at year end 2020 than year end 2019, he will have been proved correct. And if not, he will suffer for his mistake by having to pay a higher price.

What's the problem?!

mees2020

SozBbz wrote: »

No it literally does not mean that.

Houses are worth what people will pay for them, the same as any asset. Prices of assets go up and down. That implies that there will be peaks and troughs. Markets are cyclical and just because banks are being cautious in light of the current exceptional challenges, doesnt mean they're overpriced. Overpriced is a nonsense concept, its all relative.

I am not saying there is a "golden" price for a house.
But since most people have to borrow from the bank to buy, CentralBank and Banks dictate the price by manipulating valuations.
If banks say its 10% lower, market will obey.

How it would be possible for someone to buy a house for 500K, if bank thinks its worth 450 and refuse to lend more in a normal scenario? Even if both the seller and buyer both happy with 500K pricetag.

hometruths

GreeBo wrote: »

What does "Banks cutting valuations by 10%" even mean, in reality?

In reality it means if the bank valued 22 Acacia Avenue at €500k in January, and are now asked to value the same property today, they will value it at €450k.

GreeBo

mees2020 wrote: »

I am not saying there is a "golden" price for a house.
But since most people have to borrow from the bank to buy, CentralBank and Banks dictate the price by manipulating valuations.
If banks say its 10% lower, market will obey.

How it would be possible for someone to buy a house for 500K, if bank thinks its worth 450 and refuse to lend more in a normal scenario? Even if both the seller and buyer both happy with 500K pricetag.

Banks are talking in terms of LTV not house values.
Them lowering their value basically just impacts your deposit rate.

It was raised before, but if you want to buy a house that the bank values @ 500K by using a 300K mortgage and 300K in cash the bank will not care.
The asset covers the loan, thats all they care about.

hometruths

cnocbui wrote: »

The banks are taking a defensive stance on the basis of expectations of peoples abilities to repay loans - they are in effect undervaluing so that should they have to repossess and sell because of a default, they will have an easy job of it because they undervalued in the first place.

As things stand, banks will never have an easy job repossessing a property, certainly not a PDH.

I suspect the conservative valuations are more about reducing the chances of a default in the first place, rather than maximising the chance of getting their money back from a repo.

Mic 1972

So far PPR prices have been slightly higher than last year in Dublin and in ireland, including April
I would have expected to see the start of a declining trend by now but it the opposite going by the stats below

https://bl.ocks.org/pinsterdev/raw/98d5baa18a1bc6d603e0/

mees2020

cnocbui wrote: »

So before the virus, houses were not over priced in Dublin then.

If you are going to make a statement like 'houses are overpriced', then there needs to be something to measure or compare the prices against. House prices in other European capital cities is a very appropriate yardstick. I understand why you would want to deny this, but it's not going away as a valid yardstick just because it doesn't suit your attempted narrative.

The banks are taking a defensive stance on the basis of expectations of peoples abilities to repay loans - they are in effect undervaluing so that should they have to repossess and sell because of a default, they will have an easy job of it because they undervalued in the first place.

I'd like to see some of the overvalued crowd walk into a car yard and try and argue down the price of a new BMW on the basis of a bank refusing to lend the full amount because the bank thought it overvalued. BMW would have no hesitation in telling the bank wher it could stick it's valuation.

If you read my post carefully...you will notice what I said was
The fact Irish banks lowered valuations by 10% means that banks in Ireland think houses are overpriced
We all can think differently, but let me tell this again, if we need to borrow and borrowers are decreasing the price, where the market will go? Up?

Re the example BMW. Have you seen this?
https://www.irishtimes.com/news/health/coronavirus/hyundai-calls-for-temporary-cut-in-vehicle-registration-tax-to-boost-car-sales-in-july-1.4252671
This is how price cuts for new cars are done.

Ozark707

Mic 1972 wrote: »

So far PPR prices have been slightly higher than last year in Dublin and in ireland, including April
I would have expected to see the start of a declining trend by now but it the opposite going by the stats below

https://bl.ocks.org/pinsterdev/raw/98d5baa18a1bc6d603e0/

Is there not a lag with PPR?

paulie13

Looking at https://www.myhome.ie/pricechanges/dublin, it's interesting to see some of the jiggery-pokery going on. Now, it could simply be down to bad data input, but the same house has had its price changed three different times today (down 30K, up 30K, down 30K). When you go the house page at https://www.myhome.ie/residential/brochure/4-strangford-gardens-east-wall-dublin-3/4383197, it says it's dropped €30,000, but has it really? You only see its history if you click the "Show 3 More" hyperlink to the right of it.

hometruths

Ozark707 wrote: »

Is there not a lag with PPR?

Yep. The equivalent rental charts on the other hand are bang up to date, and show a trend that will be very interesting to watch:

GreeBo

mees2020 wrote: »

If you read my post carefully...you will notice what I said was
The fact Irish banks lowered valuations by 10% means that banks in Ireland think houses are overpriced
We all can think differently, but let me tell this again, if we need to borrow and borrowers are decreasing the price, where the market will go? Up?

Re the example BMW. Have you seen this?
https://www.irishtimes.com/news/health/coronavirus/hyundai-calls-for-temporary-cut-in-vehicle-registration-tax-to-boost-car-sales-in-july-1.4252671
This is how price cuts for new cars are done.

The fact that banks effectively lowering what they are willing to loan will cause prices to drop does not mean that houses are overpriced.

If banks decided that they wanted 25% deposit it would have the same effect and wouldnt be a commentary on house prices.

cnocbui

Wompa1 wrote: »

Is there much demand for BMWs and houses right now? That will set the market value in the coming months.

The 'value' of manufactured goods is directly tied to the cost of production plus profit, not what the market 'wants' to pay.

If the market does not wish to pay the base cost of production plus profit, then the goods will cease to be produced and supplied, the market will not magically get the goods for half the cost of production/supply, just because it has unrealistic expectations.

Explain how the market will 'set' the price of a BMW or iPhone in the coming months? It might be able to temporarily set house prices below supply cost for a while, but the supply will be very constrained, being mostly distress forced sales. There certainly won't be any new construction happening until the market gets over itself.

hometruths

GreeBo wrote: »

The fact that banks effectively lowering what they are willing to loan will cause prices to drop does not mean that houses are overpriced.

If banks decided that they wanted 25% deposit it would have the same effect and wouldnt be a commentary on house prices.

Much more likely to be the banks expressing disappointment that Irish tennis players are struggling to break through at international level.

cnocbui

mees2020 wrote: »

If you read my post carefully...you will notice what I said was
The fact Irish banks lowered valuations by 10% means that banks in Ireland think houses are overpriced
We all can think differently, but let me tell this again, if we need to borrow and borrowers are decreasing the price, where the market will go? Up?

Re the example BMW. Have you seen this?
https://www.irishtimes.com/news/health/coronavirus/hyundai-calls-for-temporary-cut-in-vehicle-registration-tax-to-boost-car-sales-in-july-1.4252671
This is how price cuts for new cars are done.

Ha ha ha ha. And what do you think the chances are of Hyundai getting the government to do that? Let me know when you have actually managed to buy a car less VAT and VRT.

By the way, 1/3 of the cost of supplying a house, comprises government/council taxes and charges. You want cheaper houses, ask the government to stop taking such a large cut. Good luck.

hometruths

Wompa1 wrote: »

Is there much demand for BMWs and houses right now? That will set the market value in the coming months.

cnocbui wrote: »

Explain how the market will 'set' the price of a BMW or iPhone in the coming months?

That old canard of supply and demand again:

New car buyers hoping to get a discount on their next car are being advised to act quickly, because a backlog of pent-up demand is likely to quickly outstrip supply in the wake of factory closures caused by the Covid-19 crisis.

Analysis of the UK new car market by What Car?'s team of Target Price mystery shoppers has found that manufacturers are expected to react by reducing discounts on new cars as demand returns. In turn, because of factory closures, waiting times between ordering and receiving a new car could increase.

https://www.whatcar.com/news/buy-now-or-face-reduced-discounts-and-long-waiting-lists-car-buyers-warned/n21377

Hubertj

schmittel wrote: »

Yep. The equivalent rental charts on the other hand are bang up to date, and show a trend that will be very interesting to watch:

Where do they get the up to date price info? RTB or some other source?

. It would be good if it showed the actual number let as well as available to rent and price achieved. The price drops may not be as relevant medium term if it was based on a small number of short term letters needing income. I think the real impact will be once restrictions are lifted and people can view units. Also what about when tenants negotiate a reduction in their rent on where they currently reside - how will that get captured?

Then the further impact of students once/if that sh*t show gets sorted.

hometruths

Hubertj wrote: »

Where do they get the up to date price info? RTB or some other source?

. It would be good if it showed the actual number let as well as available to rent and price achieved. The price drops may not be as relevant medium term if it was based on a small number of short term letters needing income. I think the real impact will be once restrictions are lifted and people can view units. Also what about when tenants negotiate a reduction in their rent on where they currently reside - how will that get captured?

Then the further impact of students once/if that sh*t show gets sorted.

Pretty sure it's daft.ie listings. Volume and asking prices.

The short term let thing will have a big impact - if it goes back to as it was last year, rents will remain high. I suspect it is unlikely to return in anything like the same way and this put downward pressure on rents and prices.

In situ reductions can't be captured I think. But if they are happening in any significant way, we'll see it reflected in asking prices for rent - and so on and so forth.

For me the interesting thing about lockdown is the pause button. Normally you's see prices rise fast, rise slow, flatten for a while, turn downwards slowly, faster, flatten etc etc.

i.e there is always a point that can take a while to decide is the market going to turn or not.

But I wonder has that turning point been compressed into the lockdown period. Very rare that tenants and landlords, and buyers and sellers have such an extended period to reflect on all the options.

Ozark707

schmittel wrote: »

Pretty sure it's daft.ie listings. Volume and asking prices.

The short term let thing will have a big impact - if it goes back to as it was last year, rents will remain high. I suspect it is unlikely to return in anything like the same way and this put downward pressure on rents and prices.

In situ reductions can't be captured I think. But if they are happening in any significant way, we'll see it reflected in asking prices for rent - and so on and so forth.

For me the interesting thing about lockdown is the pause button. Normally you's see prices rise fast, rise slow, flatten for a while, turn downwards slowly, faster, flatten etc etc.

i.e there is always a point that can take a while to decide is the market going to turn or not.

But I wonder has that turning point been compressed into the lockdown period. Very rare that tenants and landlords, and buyers and sellers have such an extended period to reflect on all the options.

Even though viewings should not be happening in lockdown I think some are happening in the rental market. I have seen some examples. What is clear is that properties are clearing once the price is attractive enough so I think some people must be moving even now or will soon. I expect this to accelerate once viewings are (officially) allowed.

Mic 1972

Ozark707 wrote: »

Is there not a lag with PPR?

The volumes of sold houses is higher than 2019 in the first 3 months (Jan/Feb/Mar) so that looks up to date. And for those months the prices are higher than 2019. April looks incomplete. But there is no sign of price decline considering that we have been more than 2 months into Covid and rental market already took a hit

hometruths

Ozark707 wrote: »

Even though viewings should not be happening in lockdown I think some are happening in the rental market. I have seen some examples. What is clear is that properties are clearing once the price is attractive enough so I think some people must be moving even now or will soon. I expect this to accelerate once viewings are (officially) allowed.

Has there been any official statement on when viewings can restart? I haven't seen any. I'm quite surprised as I would have thought it was fairly essential - certainly for rentals.

Mic 1972

schmittel wrote: »

Has there been any official statement on when viewings can restart? I haven't seen any. I'm quite surprised as I would have thought it was fairly essential - certainly for rentals.

Viewings for sales are happening too, I meant to attend one last Sunday on Islandbridge but I didn't go. The Agent had it arranged so that 1 person would go in at a time

Donald Trump

Mic 1972 wrote: »

So far PPR prices have been slightly higher than last year in Dublin and in ireland, including April
I would have expected to see the start of a declining trend by now but it the opposite going by the stats below

https://bl.ocks.org/pinsterdev/raw/98d5baa18a1bc6d603e0/

There will be a survivorship bias in your April figures. The completed sales are probably ones which were completed at pre-corona agreed prices or at slight reductions to the pre-corona prices (which might still have been up YoY with previous Feb).

ittakestwo

Donald Trump wrote: »

There will be a survivorship bias in your April figures. The completed sales are probably ones which were completed at pre-corona agreed prices or at slight reductions to the pre-corona prices (which might still have been up YoY with previous Feb).

There is virtually no market at the moment. People aren't viewing places and not bidding.

Covid will probably not show up on figures until the end of the year. Buyers have to wait for lockdown to end. Then bid on a place and have offer accepted. Average conveyance time is then 3months and then there is another 40 days lag for stamp duty to go through which is how the CSO workout the figures.