Property Market 2020

Mike3287

Mic 1972 wrote: »

Even without a vaccine the market doesn't seem too bothered with Covid
Yes less sales, less stock bla bla, but prices are still high with absolutely no signs of trend changes

It takes time

Prices took till 2012/13 to hit lowest from 08

Villa05

The_Conductor wrote:

The portion of the EU stimulus fund currently earmarked for Ireland is a little under 4 billion- and we've already had one of the more generous schemes to assist both individuals and businesses during the lock-down. Even if there is stimulus- you can be certain individuals are not going to benefit (based purely on the recognition that the Irish, as a people, saved the money that was doled out during the lock-down, rather than spending it. John Fitzgerald (of the ESRI) has already said as much. Any stimulus should be highly targeted and not feature disbursements to individuals in future.

Did John say where he was expecting people to spend it during a lock Down?

Viscount Aggro

Villa05 wrote: »

Did John say where he was expecting people to spend it during a lock Down?

Why am I reading about john Fitzgerald... Did he not retire from esri years ago?

brisan

Viscount Aggro wrote: »

Why am I reading about john Fitzgerald... Did he not retire from esri years ago?

SEEMINGLY NOT

https://www.esri.ie/people/john-fitzgerald
Although he is well into his 60s if my memory serves me right

Marius34

Mic 1972 wrote: »

Even without a vaccine the market doesn't seem too bothered with Covid
Yes less sales, less stock bla bla, but prices are still high with absolutely no signs of trend changes

Mike3287 wrote: »

It takes time

Prices took till 2012/13 to hit lowest from 08

It didn't take time last time, property prices was falling with the first signs of economical downturn.

brisan

Marius34 wrote: »

It didn't take time last time, property prices was falling with the first signs of economical downturn.

Yes but it took 4-5 years to hit bottom

Hubertj

Villa05 wrote: »

Did John say where he was expecting people to spend it during a lock Down?

I don’t think he was expecting people to spend during or after lockdown, that was his point about what type of stimulus is required.

Marius34

brisan wrote: »

Yes but it took 4-5 years to hit bottom

True, but the start of crisis itself shows that it's very different crisis in regards to Property market. Thus 2008 crisis taking 5 years for property market to hit bottom is not indicator for current crisis.
Each Crisis behaves differently when it comes to the Prices.

brisan

[PHP][/PHP]

Marius34 wrote: »

True, but the start of crisis itself shows that it's very different crisis in regards to Property market. Thus 2008 crisis taking 5 years for property market to hit bottom is not indicator for current crisis.
Each Crisis behaves differently when it comes to the Prices.

That is correct and since this is going to be a global recession the likes of which the world has never seen before we have no idea how it will play out
Every major financial institution the world over is predicting a major recession and as such we cannot expect house prices and rents to buck the trend and stay buoyant
People who buy now will more than likely end up in the same situation as those who bought in 2007 ie in negative equity for years
This is not an issue if its a forever home and you can continue to pay your mortgage but job losses may have a adverse effect on that ability

Marius34

brisan wrote: »

[PHP][/PHP]
That is correct and since this is going to be a global recession the likes of which the world has never seen before we have no idea how it will play out
Every major financial institution the world over is predicting a major recession and as such we cannot expect house prices and rents to buck the trend and stay buoyant
People who buy now will more than likely end up in the same situation as those who bought in 2007 ie in negative equity for years
This is not an issue if its a forever home and you can continue to pay your mortgage but job losses may have a adverse effect on that ability

Yes, it's clear, World currently is in the biggest Economic activity fall since Great Depression. I see you speak in the future tense, just a note that largest contraction is expected to be records for 2020 Q2, so it's not really the future anymore when we talk about economy.

Regarding your statement: "we cannot expect house prices and rents to buck the trend and stay buoyant "
yes it could well be the case, we don't know that, it's not 2008 with massive supply, and as it was discussed in previous comments there is no signs for the fall. Property prices might well be floating for years.

Graham

Billythekid19 wrote: »

I dont see where demand in the general housing market will come from when there is 10% + unemployment

I'd assume the other 90%

Graham

Graham wrote: »

I'd assume the other 90%

What % of those aren't homeowners already?

Augeo

Augeo wrote: »

What % of those aren't homeowners already?

What percent of the 10% aren't homeowners already?

cnocbui

Augeo wrote: »

What % of those aren't homeowners already?

Enough.

Deleted User

Deleted User wrote: »

What percent of the 10% aren't homeowners already?

I've no idea.

cnocbui wrote: »

Enough.

Time will tell.

fret_wimp2

Augeo wrote: »

Time will tell.

That's the answer to every single question and Argurment in this 600 page long thread.

Time will tell. Great, best close off the thread now.

richard D

Hi

I think the undersupply argument has been over used, in Ireland in 2007 there was a massive oversupply of houses but mainly houses not in key city areas. i.e Dublin, Cork.

In 2005-2007 where house building was 70k+ a year house prices were increasing about 10%+ year on year leading to a hudge bubble. Why with all the oversupply where houses increasing.

Take the UK, London, Bristol, Reading, there has been a chronic under supply of house in England for the last 20+ years. However during the peak of the GFC, house prices in London, Bristol, Reading, dropped about 35-40% from the peak.

The truth is that in all major urban cities where people want to live there is always an chronic under supply. If we were projected to build 22k house this year and we only build 15k, thats a 7k difference in housing output, in the large scheme of things this is a drop in the ocean.

it has been estimated that we need 30-35k house a year to keep up with population growth.

The key items that drives house prices, is a) Confidence b) Lending Credit c) Economy

Due to Covid 19 all three have taken a hit. The most interesting thing is, well know the true extent of the damage done to the economy in 6 months time. There will be an element of emotional scarring on the irish economy.

Will house prices go down? More than likely.

By how much? Prob 5%-15%

My guess is subjective and meaningless like a fart in the wind.

TheSheriff

richard D wrote: »

Hi

I think the undersupply argument has been over used, in Ireland in 2007 there was a massive oversupply of houses but mainly houses not in key city areas. i.e Dublin, Cork.

In 2005-2007 where house building was 70k+ a year house prices were increasing about 10%+ year on year leading to a hudge bubble. Why with all the oversupply where houses increasing.

Take the UK, London, Bristol, Reading, there has been a chronic under supply of house in England for the last 20+ years. However during the peak of the GFC, house prices in London, Bristol, Reading, dropped about 35-40% from the peak.

The truth is that in all major urban cities where people want to live there is always an chronic under supply. If we were projected to build 22k house this year and we only build 15k, thats a 7k difference in housing output, in the large scheme of things this is a drop in the ocean.

it has been estimated that we need 30-35k house a year to keep up with population growth.

The key items that drives house prices, is a) Confidence b) Lending Credit c) Economy

Due to Covid 19 all three have taken a hit. The most interesting thing is, well know the true extent of the damage done to the economy in 6 months time. There will be an element of emotional scarring on the irish economy.

Will house prices go down? More than likely.

By how much? Prob 5%-15%

My guess is subjective and meaningless like a fart in the wind.

All things considered, I think your 5-15% is likely realistic

guyfawkes5

1sttimebuyer20 wrote: »

I think my deposit will safeguard against negative equity, I do fully expect a slight drop in prices next year, my guess is circa 5% (don’t ask me for quotes from anywhere, I’m simply guesstimating) but I’m happy to take that on the chin.

Negative equity only effects you if you are selling or taking on a new mortgage rate. If you have a fixed term of four years I would say even in the pessimistic scenarios of estimates you shouldn't see your LTV go above 90% at the end of that.

Mic 1972

Mike3287 wrote: »

It takes time

Prices took till 2012/13 to hit lowest from 08

The decline started in 2008 tho, while now nothing is happening

When are we expected to see signs of a trend change? it's July, most European countries are moving back to normal

Springy Turf

Mic 1972 wrote: »

The decline started in 2008 tho, while now nothing is happening

When are we expected to see signs of a trend change? it's July, most European countries are moving back to normal

Very little is moving back to "normal". The economic forecasts vary from bad to catastrophic. The government is still subsidising wage packets so when that ends there will likely be more job losses.

Also, remote working has become very common. I personally will not be returning to my office until 2021 - the office is opening but with 25% max capacity, and on-site essential roles only. This changes the accommodation needs of a lot of the kind of people who would be in the house buying income bracket

hometruths

guyfawkes5 wrote: »

Negative equity only effects you if you are selling or taking on a new mortgage rate. If you have a fixed term of four years I would say even in the pessimistic scenarios of estimates you shouldn't see your LTV go above 90% at the end of that.

Or if you can no longer afford your mortgage repayments.

tom_murphy112

I think when folks start posting their predication, be it doom and gloom or everything is awesome. Your really need to include your own self interest, as in Home Owner, Home owner with multiple rental property, On the market to buy property etc.

Having been lurking in this thread for a while and it is amazing how much bias there is, on both side !

combat14

looks like more pain for the economy next year with thousands being owed back to the taxman for covid 19 payments some serious belt tightening for many over the next 2 years..

https://www.irishtimes.com/business/personal-finance/no-free-lunch-on-coronavirus-cash-payments-1.4289771?mode=amp

PokeHerKing

Mic 1972 wrote: »

The decline started in 2008 tho, while now nothing is happening

When are we expected to see signs of a trend change? it's July, most European countries are moving back to normal

There's nothing normal about 2 hour queues to do a bit of shopping or 90 minute max table reservations in bars and restaurants.

You want it now now now. It'll take time for the rot to set in and filter through the whole economy.

Patience young grasshopper.

PokeHerKing

PokeHerKing wrote: »

There's nothing normal about 2 hour queues to do a bit of shopping or 90 minute max table reservations in bars and restaurants.

You want it now now now. It'll take time for the rot to set in and filter through the whole economy.

Patience young grasshopper.

Plenty of businesses have been surviving even through the peak of the pandemic. Online sales, click and collect, take aways. I know a shop owner and a restaurant owner, both have had booming trade.

Some haven't been able to adapt, pubs and hair dressers for example. Personally, there are some things about the old way of life that I'll happily see die away. Ram packed pubs and public transport to name a couple.

Struggling pubs and hair dressers is not something I'd imagine bringing down the housing market.

Villa05

tom_murphy112 wrote:

I think when folks start posting their predication, be it doom and gloom or everything is awesome. Your really need to include your own self interest, as in Home Owner, Home owner with multiple rental property, On the market to buy property etc.
Having been lurking in this thread for a while and it is amazing how much bias there is, on both side !

Would help alright. I miss the estate agent that was here earlier. If they did not answer your question or debate/deflect your points. This behaviour speaks volumes.

Iceman29

Hubertj wrote: »

I would have thought the mortgage applications/approvals would have been worse than this given what is going on. What would be more insightful is the number of applications vs approvals and % decrease (or increase ðŸ˜)

Why would you have thought that it would be more? you dont have to leave your house to apply for a mortgage and all the banks were working from home.... there was no barrier

WeeCuppaCha

Iceman29 wrote: »

Why would you have thought that it would be more? you dont have to leave your house to apply for a mortgage and all the banks were working from home.... there was no barrier

Because given the financial uncertainty many are facing, one would imagine seeking mortgages would be way down the list of priorities?

Yes, it would be interesting to see the percentage of applications vs approvals. It took a while for the message to filter through that those on subsidies were not being approved.

Claw Hammer

WeeCuppaCha wrote: »

Because given the financial uncertainty many are facing, one would imagine seeking mortgages would be way down the list of priorities?

.

What about those in secure employment who might have decided that the time to move is when there is uncertainty and the chance of a bargain?