Property Market 2020

Tallback

My situation is that we are sale agreed on a property since Jan and likely to proceed. I'm fully aware of the macro economic situation etc but for the non economic factors i.e need to get on with life, need space with kids, jobs secure we'll prob proceed with our eyes open. If prices drop (an I think that's more likely than not) to my thinking they'll take a while to do so.

We've been looking for the last couple of years (South Dublin area houses circa €600-850k asking price) and in order to get my own sense of price trends in the market I've been keeping a database of pretty much every property that comes on in that search and then tracking through to when they sell and for how much.

Looking at that today, I see that there are 46 properties in that cohort that have SOLD in March/April/May i.e. these are properties that completed in full knowledge of Covid. This is not scientific but gives some sense of the trends

- 46 Properties sold. All came on the market in Jan or earlier
- 23 went for at or above asking. 23 went for below asking
- Average sold price vs asking was -1%, the range was 23% below asking to 16% above asking
- There was a slight trend (r2 0.28) between the length of time they were on the market (i.e. first seen to sold date) and the price change i.e. the longer they were on the market the more likely they sold below asking
- There was a very mild trend (r2 0.08) of the house condition ranked by me vs the price change. i.e. the better condition a house was in the more likely it would go for above asking
- No trend between changes in price and asking price of houses
- There are a further 75 houses in this search criteria that have gone "Sale Agreed" as marked by Daft/Myhome in March/April/May. 55 of these are since Mar 12 (first lockdown announcement) i.e. Sales activity is continuing at some reasonable level

As I said, this is not scientific but gives some sense of houses that have actually sold and market activity. To my mind - there doesn't seem to be much impact to date on sold prices from Covid but I wouldn't expect there to be at this stage either.

Auctioneera

Tallback wrote: »

My situation is that we are sale agreed on a property since Jan and likely to proceed. I'm fully aware of the macro economic situation etc but for the non economic factors i.e need to get on with life, need space with kids, jobs secure we'll prob proceed with our eyes open. If prices drop (an I think that's more likely than not) to my thinking they'll take a while to do so.

We've been looking for the last couple of years (South Dublin area houses circa €600-850k asking price) and in order to get my own sense of price trends in the market I've been keeping a database of pretty much every property that comes on in that search and then tracking through to when they sell and for how much.

Looking at that today, I see that there are 46 properties in that cohort that have SOLD in March/April/May i.e. these are properties that completed in full knowledge of Covid. This is not scientific but gives some sense of the trends

- 46 Properties sold. All came on the market in Jan or earlier
- 23 went for at or above asking. 23 went for below asking
- Average sold price vs asking was -1%, the range was 23% below asking to 16% above asking
- There was a slight trend (r2 0.28) between the length of time they were on the market (i.e. first seen to sold date) and the price change i.e. the longer they were on the market the more likely they sold below asking
- There was a very mild trend (r2 0.08) of the house condition ranked by me vs the price change. i.e. the better condition a house was in the more likely it would go for above asking
- No trend between changes in price and asking price of houses
- There are a further 75 houses in this search criteria that have gone "Sale Agreed" as marked by Daft/Myhome in March/April/May. 55 of these are since Mar 12 (first lockdown announcement) i.e. Sales activity is continuing at some reasonable level

As I said, this is not scientific but gives some sense of houses that have actually sold and market activity. To my mind - there doesn't seem to be much impact to date on sold prices from Covid but I wouldn't expect there to be at this stage either.

Very interesting post. This end of the market is probably less affected by Covid as tend to be "knowledge workers" who can work away from home. The famous investor Charlie Munger says: "the best time to buy a house is.....................when you need one."
As you intend to hold this property for the long run, it will likely turn out to be a solid investment. ESRI report this morning saying that lack of supply hitting market over next few months / years will exacerbate affordability issues in the medium term when the market eventually normalises.
Best of luck with your purchase!

Auctioneera

lawrencesummers wrote: »

I dont see the rationale behind peoples saying not to buy now. There is always a perfect time to buy a place, and its always with the benefit of hindsight, you have to make the call based on where you are, and where you want to be.

I bought one place in 2008 and while that was a bad idea down the road at the time I was renting and paying 200 more per month for an apartment than the house I bought.

If your thinking of buying then I would get a good broker and have them look over your situation, if you are looking to buy in 12 months then now is the time to get your application on the right track. They will tell you things that will make your application sail through when the time comes. Like having clean bank statements - no bookmakers or lottery charges on your statements, showing regular savings, having no other loans coming out of your account. No credit card debt. These small things make a big difference to the application.

Being able to show where your savings came from might be necessary. If you are getting a cash gift to help with a deposit it might be worth getting that soon and having it in savings.

Apparently banks are not approving people who are getting the covid payment, if you are getting it you might need to have 6 months of statements post last payment.

The permanency of your employment is another factor, changing jobs might be a bad idea if its not to a permanent position.

The other big decision is the commitment you are entering into with your partner, is the relationship in a sufficient place of commitment that can cope with a large financial venture.

Consider the possible scenarios then, if you buy and one person loses their job can you struggle through and pay for a while, if you have kids will the place your buying suffice to raise them for a while because moving might be difficult.

If i was you simply put i would get a broker, get to approval that you dont have to use, and then keep an eye on things over the next 6 months, track a few places to see how prices are going, maybe get involved in the bidding to see how it works, you never have to accept and can walk away anytime. If you see somewhere thats ideal for budget and location then go for it, its likely that the next while will be a buyers market and you can put in under asking price bids, and bid in smaller increments.

Great advice here particularly about the strength of the relationship. They say the best value in real estate is to be had from the three "D"'s

• Death
• Divorce
• Distress

You don't want to find yourself in a few years' time selling from a position of distress owing to a divorce! Also great advice about spending your money like somebody is watching because somebody is: the bank!

Villa05

The_Conductor wrote:

It sounds like Mr. Parlon is kite flying for massive inflation in delivering public projects- and someone seriously needs to shoot down his kite ASAP- his suggestions are shocking.

His claims were examined and broken down on radio yesterday and the conclusion was that social distancing was much easier to be achieved on large projects and should have little or no impact on cost.

Mr Parlon was invited on the show to debate his claim, but he declined

Mic 1972

OwlsZat wrote: »

https://www.myhome.ie/pricechanges

32 of the last 40 changes have been price declines. The information your basing your opinion on is factually incorrect. This is despite the fact that COVID19 payments are containing the problem - for now.

The price chance page from MyHome doesn't tell the whole story, it's been discussed here many times already. All properties that have no change in price will not sure on that page
You could see lots of negative arrows all the way in Q1, still prices went up at the end

lawrencesummers

Tallback wrote: »

My situation is that we are sale agreed on a property since Jan and likely to proceed. I'm fully aware of the macro economic situation etc but for the non economic factors i.e need to get on with life, need space with kids, jobs secure we'll prob proceed with our eyes open. If prices drop (an I think that's more likely than not) to my thinking they'll take a while to do so.

We've been looking for the last couple of years (South Dublin area houses circa €600-850k asking price) and in order to get my own sense of price trends in the market I've been keeping a database of pretty much every property that comes on in that search and then tracking through to when they sell and for how much.

Looking at that today, I see that there are 46 properties in that cohort that have SOLD in March/April/May i.e. these are properties that completed in full knowledge of Covid. This is not scientific but gives some sense of the trends

- 46 Properties sold. All came on the market in Jan or earlier
- 23 went for at or above asking. 23 went for below asking
- Average sold price vs asking was -1%, the range was 23% below asking to 16% above asking
- There was a slight trend (r2 0.28) between the length of time they were on the market (i.e. first seen to sold date) and the price change i.e. the longer they were on the market the more likely they sold below asking
- There was a very mild trend (r2 0.08) of the house condition ranked by me vs the price change. i.e. the better condition a house was in the more likely it would go for above asking
- No trend between changes in price and asking price of houses
- There are a further 75 houses in this search criteria that have gone "Sale Agreed" as marked by Daft/Myhome in March/April/May. 55 of these are since Mar 12 (first lockdown announcement) i.e. Sales activity is continuing at some reasonable level

As I said, this is not scientific but gives some sense of houses that have actually sold and market activity. To my mind - there doesn't seem to be much impact to date on sold prices from Covid but I wouldn't expect there to be at this stage either.

Have you considered chancing your arm and looking for a quick reduction on the price for some lame made up slightly plausible reason?

Mic 1972

Tallback wrote: »

My situation is that we are sale agreed on a property since Jan and likely to proceed. I'm fully aware of the macro economic situation etc but for the non economic factors i.e need to get on with life, need space with kids, jobs secure we'll prob proceed with our eyes open. If prices drop (an I think that's more likely than not) to my thinking they'll take a while to do so.

We've been looking for the last couple of years (South Dublin area houses circa €600-850k asking price) and in order to get my own sense of price trends in the market I've been keeping a database of pretty much every property that comes on in that search and then tracking through to when they sell and for how much.

Looking at that today, I see that there are 46 properties in that cohort that have SOLD in March/April/May i.e. these are properties that completed in full knowledge of Covid. This is not scientific but gives some sense of the trends

- 46 Properties sold. All came on the market in Jan or earlier
- 23 went for at or above asking. 23 went for below asking
- Average sold price vs asking was -1%, the range was 23% below asking to 16% above asking
- There was a slight trend (r2 0.28) between the length of time they were on the market (i.e. first seen to sold date) and the price change i.e. the longer they were on the market the more likely they sold below asking
- There was a very mild trend (r2 0.08) of the house condition ranked by me vs the price change. i.e. the better condition a house was in the more likely it would go for above asking
- No trend between changes in price and asking price of houses
- There are a further 75 houses in this search criteria that have gone "Sale Agreed" as marked by Daft/Myhome in March/April/May. 55 of these are since Mar 12 (first lockdown announcement) i.e. Sales activity is continuing at some reasonable level

As I said, this is not scientific but gives some sense of houses that have actually sold and market activity. To my mind - there doesn't seem to be much impact to date on sold prices from Covid but I wouldn't expect there to be at this stage either.

That's what i'm seeing too. The market is operating in full knowledge of Covid and its consequences, but somehow it's stable

Auctioneera

Mic 1972 wrote: »

That's what i'm seeing too. The market is operating in full knowledge of Covid and its consequences, but somehow it's stable

The macro-prudential rules were introduced to dampen the swings in the economic cycle. In fairness, they are doing exactly that. They prevented prices going too high on the upside so less to fall on the downside. Many bemoaned these as acting as a barrier to many to getting on the property ladder. Good job the Central Bank held its ground!

Sunny Disposition

Auctioneera wrote: »

The macro-prudential rules were introduced to dampen the swings in the economic cycle. In fairness, they are doing exactly that. They prevented prices going too high on the upside so less to fall on the downside. Many bemoaned these as acting as a barrier to many to getting on the property ladder. Good job the Central Bank held its ground!

The most useful intervention we had in housing for years, of course it was criticised by the usual jackasses in the press.

Mic 1972

Mav11 wrote: »

That's interesting. Below is an email extract from the estate agent for the house that I am interested in!!

"We will be back the minute people are allowed to travel freely again.
That house at xxxxxxxx is unoccupied so a viewing wont be a problem".

So obviously if there is a functioning market, it is not a fully functioning one!!!

Seems like different EA's are taking different interpretations on the situation.

I got that reply too from Haden Property, but the agent called me back on a Saturday to arrange for viewing

Hubertj

Villa05 wrote: »

His claims were examined and broken down on radio yesterday and the conclusion was that social distancing was much easier to be achieved on large projects and should have little or no impact on cost.

Mr Parlon was invited on the show to debate his claim, but he declined

I'd like to listen to that - which station?

Auctioneera

Sunny Disposition wrote: »

The most useful intervention we had in housing for years, of course it was criticised by the usual jackasses in the press.

hear hear
Some well known developers were out against it claiming that it restricted first time buyers getting on the property ladder.
Translation: please allow young people mortgage away their lives by borrowing 5 and 6 times their annual salary to fuel my profits

lawrencesummers

Auctioneera wrote: »

hear hear
Some well known developers were out against it claiming that it restricted first time buyers getting on the property ladder.
Translation: please allow young people mortgage away their lives by borrowing 5 and 6 times their annual salary to fuel my profits

Those rules are not perfect, they can cause problems for some people, but they are well needed and have worked well to keep the prices from heating rapidly.

Tallback

lawrencesummers wrote: »

Have you considered chancing your arm and looking for a quick reduction on the price for some lame made up slightly plausible reason?

I've considered it but haven't tried yet. House is in a chain so we'd only get a reduction if party above got one too, I'm fairly confident no one will pay more at the moment.

Valuation is taking place today so that will be interesting too

cnocbui

lawrencesummers wrote: »

I dont see the rationale behind peoples saying not to buy now. There is always a perfect time to buy a place, and its always with the benefit of hindsight, you have to make the call based on where you are, and where you want to be.
....

Exactly. As my mother said to me: You regret the things you didn't do far more than those you did.'

As prices drop, the selection and quality does too. I have recently seen comments about this happening in Sydney; complaining of slim pickings.

Auctioneera

Thought this chart might be of interest.https://drive.google.com/file/d/1xlY6Xw7oCZ8yIVdq1g07-h854xb9rg0Z/view?usp=sharing
It's our daily website traffic during the pandemic. Yesterday was our best day since this all kicked off, with 832 users. This is down from a high of a high of 1280 users on February 18th but up from the bottom of just 331 on April 11th. We're trying to decide if it looks more like a U shape or a V shaped recovery! Definite uptick of late though - hopefully confidence slowly coming back into the market!

wassie

People entertaining themselves on a website doesn't constitute a recovery I would of thought. I do hope it works out that being said!

Auctioneera

wassie wrote: »

People entertaining themselves on a website doesn't constitute a recovery I would of thought. I do hope it works out that being said!

Fair point - could be a lot of tyre-kickers but there is a correlation between our website traffic and offers being made on properties so at lease traffic has stopped going down!

wassie

Yes - lets hope it is a good leading indicator.

Tallback wrote: »

My situation is that we are sale agreed on a property since Jan and likely to proceed. I'm fully aware of the macro economic situation etc but for the non economic factors i.e need to get on with life, need space with kids, jobs secure we'll prob proceed with our eyes open. If prices drop (an I think that's more likely than not) to my thinking they'll take a while to do so.

You are not purchasing an investment, but something that has utility as well as value. If you are in it for the long term, a secure income stream, is affordable and have a housing need, then a 10-15% price drop may well be immaterial to you.

Larger drops of 20% or more may be a concern in the sense that it may be reflective of a dire situation in the broader economy.

addaword

Sunny Disposition wrote: »

I hate to use economist type language but don’t buy, the ‘fundamentals’ are up in a heap. I know it is hard to resist when you have been looking for a while but hold on.
The problem is Covid 19 could be here for a few years yet. A massive amount of people are getting money from the State right now, these are all people who shouldn’t dream of buying.
Tourism is gone as an industry for quite a long time to come, hospitality very weak, no mass events potentially for a couple of years. This is the biggest economic shock in living memory and we have no idea when it will end.
Anyone who advises you to buy on the grounds that prices won’t fall is simply a bluffer. There are no grounds for confidence.

The people telling innocents to buy now are probably estate agents/ sellers, and the situation reminds me of people advising investors to buy property in 2007, or the people saying bank shares were cheap and good value when they started falling from their Celtic tiger peak.

New car sales have dropped 99%, yet you have people on this thread saying property is not affected. Yeah, right.

megabomberman

Sunny Disposition wrote: »

The most useful intervention we had in housing for years, of course it was criticised by the usual jackasses in the press.

Absolutely, there is no telling what average price the market would have achieved without tight lending restrictions on the banks, the market would be crashing down from that high ceiling if it had been allowed to happen.

Mic 1972

addaword wrote: »

The people telling innocents to buy now are probably estate agents/ sellers, and the situation reminds me of people advising investors to buy property in 2007, or the people saying bank shares were cheap and good value when they started falling from their Celtic tiger peak.

New car sales have dropped 99%, yet you have people on this thread saying property is not affected. Yeah, right.

I agree with this statement pretty much 100%, but on the other hand I do look at the market regularly because i'm planning to buy and since January I haven't seen any significant change. That's plenty of time with the knowledge of Covid and its consequences on the economic. The property market for some strange reason really does look unaffected

addaword

wassie wrote: »

Yes - lets hope it is a good leading indicator.



If you are in it for the long term, a secure income stream, is affordable and have a housing need, then a 10-15% price drop may well be immaterial to you.

In a recession, prices always drop 20% minimum.
I heard that in 2006 and like most people did not believe that fully then, I swolled the 10 to 15% soft landing theory advocated by all the vested interests. "Ah, but this time its different".

Blueshoe

Mic 1972 wrote: »

I agree with this statement pretty much 100%, but on the other hand I do look at the market regularly because i'm planning to buy and since January I haven't seen any significant change. That's plenty of time with the knowledge of Covid and its consequences on the economic. The property market for some strange reason really does look unaffected

It's way way too soon to see the affect on property prices. Think 8 months from now

Marius34

addaword wrote: »

In a recession, prices always drop 20% minimum.
I heard that in 2006 and like most people did not believe that fully then, I swolled the 10 to 15% soft landing theory advocated by all the vested interests. "Ah, but this time its different".

What do you mean by "always"?

lawrencesummers

Tallback wrote: »

I've considered it but haven't tried yet. House is in a chain so we'd only get a reduction if party above got one too, I'm fairly confident no one will pay more at the moment.

Valuation is taking place today so that will be interesting too

Is the bank carrying out the valuation?
I would chance my arm and go back to the Vendors EA and say the bank valuation is down 20k but you will be happy to proceed by splitting that and reducing agreed price by 10k. The worst they will say is no.

eagle eye

Blueshoe wrote:

It's way way too soon to see the affect on property prices. Think 8 months from now

Mid July is where you'll see it. Looks like we'll all be back at work in Julyvor August so third quarter will be better than the second and a better quarter puts confidence in the market.

Villa05

Blueshoe wrote:

There will be stagnation but no deep recession. It won't be allowed happen. The Eu are keen to try and reintroduce much needed inflation. The best way to achieve this is to keep the money coming. Expect a massive low cost or no cost deal to be signed.

Blueshoe wrote:

Any dip will be temporary. Central Banks are filling government coffers with low cost cash which is then being handed out in the form of subsidies and grants in an effort to keep things ticking over until economies get back on track.

Mic 1972 wrote:

That's what i'm seeing too. The market is operating in full knowledge of Covid and its consequences, but somehow it's stable

I don't think anyone has full knowledge of the consequences of covid.
What we do know is that it is not good for all and horrendous for certain sectors, many of these sectors are huge employers/revenue gereators in Ireland
Tourism
Air travel
Sport/music festivals/concerts, horse racing meetings
Foreign students

Auctioneera wrote:

The macro-prudential rules were introduced to dampen the swings in the economic cycle. In fairness, they are doing exactly that. They prevented prices going too high on the upside so less to fall on the downside. Many bemoaned these as acting as a barrier to many to getting on the property ladder. Good job the Central Bank held its ground!

Do think that banks pulling exemptions will have significant impact?
Do you see trading up/down continuing as normal as price declines will be less of a consideration and may in fact aid the process?

Hubertj wrote:

I'd like to listen to that - which station?

It was either pat Kenny or the competition on rte, will have a look later

Mic 1972 wrote:

I agree with this statement pretty much 100%, but on the other hand I do look at the market regularly because i'm planning to buy and since January I haven't seen any significant change. That's plenty of time with the knowledge of Covid and its consequences on the economic. The property market for some strange reason really does look unaffected

I'm assuming the market is dead since lock down with little activity

eagle eye wrote:

Mid July is where you'll see it. Looks like we'll all be back at work in Julyvor August so third quarter will be better than the second and a better quarter puts confidence in the market.

A better quarter maybe but nowhere near 2019 activity and 2019 showed that property in Dublin had plateaued

eagle eye

Villa05 wrote:

A better quarter maybe but nowhere near 2019 activity and 2019 showed that property in Dublin had plateaued

I think you'll see acl drop in Dublin for sure just not sure if you'll see it anywhere within two hours of Dublin now. The work from home arrangements look set to continue so I think we'll see lots of people based in Dublin moving back to their home towns if they only have to work in Dublin two days a week or less.
That will lead to rising prices in rural areas and falling prices in Dublin.
If you get out quick enough you'll have a nice nest egg when you sell your semi-d in Dublin and buy your big house down home.

Villa05

Villa05 wrote:

It was either pat Kenny or the competition on rte, will have a look later

Hubertj wrote:

I'd like to listen to that - which station?

Sarah mcInenery rte radio 1 yesterday
2 sections
1 general construction
2 children's hospital

It was a developor that rubbished Tom parlon claims