Property Market 2020

Zenify

landofthetree wrote: »

Should the currently measures limiting economic and social activity remain in place for 12 weeks, it is likely the Irish economy would shrink by 7.1pc this year, according to the report.
https://amp.independent.ie/business/irish/ireland-to-fall-into-recession-this-year-ersi-report-39077726.html?__twitter_impression=true


If it goes on longer than 12 weeks we are looking at a great depression.

Probably going to last till we get a vaccine in 2021.

My heart sank when I saw that. I think property will be the least of our worries.

landofthetree

Zenify wrote: »

My heart sank when I saw that. I think property will be the least of our worries.

This is why governments shouldn't let house prices and rent rise so much. When a downturn happens ordinary people get badly hit.

Also public spending increased too much since 2016. (13 billion more per year). Now there may have to be austerity for years.

garhjw

landofthetree wrote: »

This is why governments shouldn't let house prices and rent rise so much. When a downturn happens ordinary people get badly hit.

Also public spending increased too much since 2016. (13 billion more per year). Now there may have to be austerity for years.

a lot will depend on how repayment of additional borrowing is structured/financed/refinanced.... as all EU has been hit hard payment term could be very very long at very low interest rates etc..... will have to be creative thinking around it to avoid a prolonged down turn. It not like 2008 where some countries failed to get their act together and implement proper reforms....

landofthetree

garhjw wrote: »

a lot will depend on how repayment of additional borrowing is structured/financed/refinanced.... as all EU has been hit hard payment term could be very very long at very low interest rates etc..... will have to be creative thinking around it to avoid a prolonged down turn. It not like 2008 where some countries failed to get their act together and implement proper reforms....

They are going to have to come up with a pretty good deal for the likes of Italy. They are on their knees and the EU cant be seen to kick them while they are down.

This is the perfect opportunity for the EU to show its a force for good.

chevra13i

We're in the middle of purchasing a new build (first-time buyers) - we've only paid the 5k deposit so far so we have the option of pulling out if need be but I'm starting to think that we'd be mad to continue with purchasing at a price that was agreed in early Feb before all the virus disruption.

Thankfully we don't have to pull the trigger until it comes to signing which is a while away yet but it's still stressing me out.

ittakestwo

landofthetree wrote: »

This is why governments shouldn't let house prices and rent rise so much. When a downturn happens ordinary people get badly hit.

If it was not for the CB rules of borrowing a maximum of 3.5 times annual income then the situation would be worse. A lot in the general public see those rules as restrictive but people who bought in the last few years should be thankful of them as they would have inevitably borrowed more to buy the same home if it were not for those rules holding prices back.

We have to hope if FF get in they dont destroy these rules as it goes against their fundemental belief of no regulation and that a buyers need to borrow above thier head to buy a home.

mcbert

chevra13i wrote: »

We're in the middle of purchasing a new build (first-time buyers) - we've only paid the 5k deposit so far so we have the option of pulling out if need be but I'm starting to think that we'd be mad to continue with purchasing at a price that was agreed in early Feb before all the virus disruption.

Thankfully we don't have to pull the trigger until it comes to signing which is a while away yet but it's still stressing me out.

We've been sale agreed in a new estate for months - had various concerns with what was going on and not going on in the estate. Then Covid-19 was the final straw, with the added worry the estate might remain half empty for long time, even a chance the builder declaring themselves bankrupt. Just asked for our deposit back. We are going to buy something else.

cnocbui

landofthetree wrote: »

This is why governments shouldn't let house prices and rent rise so much. When a downturn happens ordinary people get badly hit.

Also public spending increased too much since 2016. (13 billion more per year). Now there may have to be austerity for years.

Hell will freeze over first and we will be taxed 103% of our income before an Irish government will trim the public service numbers.

cnocbui

landofthetree wrote: »

Should the currently measures limiting economic and social activity remain in place for 12 weeks, it is likely the Irish economy would shrink by 7.1pc this year, according to the report.
https://amp.independent.ie/business/irish/ireland-to-fall-into-recession-this-year-ersi-report-39077726.html?__twitter_impression=true


If it goes on longer than 12 weeks we are looking at a great depression.

Probably going to last till we get a vaccine in 2021.

My reading leads me to think that is understating the decline by 100%. I hope I am wrong.

Reversal

landofthetree wrote: »

Should the currently measures limiting economic and social activity remain in place for 12 weeks, it is likely the Irish economy would shrink by 7.1pc this year, according to the report.
https://amp.independent.ie/business/irish/ireland-to-fall-into-recession-this-year-ersi-report-39077726.html?__twitter_impression=true


If it goes on longer than 12 weeks we are looking at a great depression.

Probably going to last till we get a vaccine in 2021.

A worrying forecast is that if things are back to normal by June, unemployment is still forecast to be 11% going in 2021.

This does not support the optimisation some have expressed for a quick bounce back. In terms of the property market, next year's spring market will be against the backdrop of ~10% unemployment. And that's the best case scenario.

beggars_bush

cnocbui wrote: »

Hell will freeze over first and we will be taxed 103% of our income before an Irish government will trim the public service numbers.

like doctors, nurses and other healthcare workers?

you need to get that chip off your shoulder

public workers are taxed the same as everyone, in fact more so.

Jizique

cnocbui wrote: »

Hell will freeze over first and we will be taxed 103% of our income before an Irish government will trim the public service numbers.

Correction:
Hell will freeze over first and we will be taxed 103% of our income before the unions allow an Irish government will trim the public service numbers.

voluntary

cnocbui wrote: »

My reading leads me to think that is understating the decline by 100%. I hope I am wrong.

WHO briefing says a lot:

WHO Press Briefing:

We understand that countries are trying to assess when and how they will be able to ease these measures.

The answer depends on what countries do while these population-wide measures are in place.

Asking people to stay at home and shutting down population movement is buying time and reducing the pressure on health systems, but on their own, these measures will not extinguish the epidemics.

The point of these actions is to enable the more precise and targeted measures that are needed to stop transmission and save lives. We call on all countries that have introduced so-called "lockdown" measures to use this time to attack the virus. You have created a second window of opportunity. The question is: how will you use it? There are 6 key actions that we recommend:

1. expand, train, and deploy your health care and public health workforce

2. implement a system to find every suspected case at the community level

3. rump up production capacity and availability of testing

4. identify, adapt, and equipt facilities you will use to treat patients

5. develop a clear plan and process to quarantine contacts

6. refocus the whole of government on suppressing and controlling COVID-19

These measures are the best way to suppress and stop transmission so that when restrictions are lifted, the virus doesn't resurge.

The last thing any country needs is to reopen schools and businesses only to be forced to close them again because of a resurgence"

Dr. Tedros Adhanom Ghebreyesus, Director-General of WHO, March 25, 2020

snoopboggybog

ittakestwo wrote: »

If it was not for the CB rules of borrowing a maximum of 3.5 times annual income then the situation would be worse. A lot in the general public see those rules as restrictive but people who bought in the last few years should be thankful of them as they would have inevitably borrowed more to buy the same home if it were not for those rules holding prices back.

We have to hope if FF get in they dont destroy these rules as it goes against their fundemental belief of no regulation and that a buyers need to borrow above thier head to buy a home.

There should really be more to it than 3.5 times the rule in my opinion including job security and job opportunists. I'm not in Dublin and work in I.T for a multinational getting 42K a year. I have a job for life and could probably get 65K in Dublin pretty easy.

Houses in my area going for 200K on average.

I need 53,000 deposit to get a house which is ridicolous.

At 42K my take home pay is 2750 euro a month and need a 53,000 deposit.
At 50K my take home pay would be 3066 a month and would need a 25K deposit.

If your job is secure and there is endless job oppertunities then the 3.5 rule needs to be revised.

I'm not going to commute four hours a day to Dublin.

Zenify

UK has put their housing market on hold. Aka no mortgages. Banks have been withdrawing mortgage offers unless the buyers had a 40% deposit. Now it's all to stop until the pandemic is over.

https://www.ft.com/content/c08ec3d9-079e-40ff-baae-11388c650f6c

Google the title to get around paywall

"UK puts its housing market on hold"

landofthetree

Zenify wrote: »

UK has put their housing market on hold. Aka no mortgages. Banks have been withdrawing mortgage offers unless the buyers had a 40% deposit. Now it's all to stop until the pandemic is over.

https://www.ft.com/content/c08ec3d9-079e-40ff-baae-11388c650f6c

Google the title to get around paywall

"UK puts its housing market on hold"

Expect a lot of Asian cash investors to keep buying in London and the other big cities.

Zenify

landofthetree wrote: »

Expect a lot of Asian cash investors to keep buying in London and the other big cities.

The article wasnt very clear about cash buyers. It says you should only go through with a purchase if it its necessary due to contract.

0gac3yjefb5sv7

snoopboggybog wrote: »

There should really be more to it than 3.5 times the rule in my opinion including job security and job opportunists. I'm not in Dublin and work in I.T for a multinational getting 42K a year. I have a job for life and could probably get 65K in Dublin pretty easy.

Houses in my area going for 200K on average.

I need 53,000 deposit to get a house which is ridicolous.

At 42K my take home pay is 2750 euro a month and need a 53,000 deposit.
At 50K my take home pay would be 3066 a month and would need a 25K deposit.

If your job is secure and there is endless job oppertunities then the 3.5 rule needs to be revised.

I'm not going to commute four hours a day to Dublin.

Why do you need a 53k deposit on a 200k house?

snoopboggybog

Pheonix10 wrote: »

Why do you need a 53k deposit on a 200k house?

Because my salary is 42K.

200K minus 3.5 rule leaves 53K.

Maybe I didn't word it right. If i went to Dublin i'd probably get 65k-70K but don't fancy a four hour commute!!

I should hit the 50K mark anyway in four or five years so will probably just wait till then. I'll be 33 then.

0gac3yjefb5sv7

What's the purpose of the bank valuation and how do they calculate it? Would be a useful metric or useless in judging if you're overpaying?

Logan Roy

Zenify wrote: »

UK has put their housing market on hold. Aka no mortgages. Banks have been withdrawing mortgage offers unless the buyers had a 40% deposit. Now it's all to stop until the pandemic is over.

https://www.ft.com/content/c08ec3d9-079e-40ff-baae-11388c650f6c

Google the title to get around paywall

"UK puts its housing market on hold"

Did you even read the article? The headline is pure click bait as usual. Basically it's primarily due the logistical issues of having people working from home and also trying to get valuations done.

Lloyds has stopped offering mortgages or remortgages through brokers unless the customer has a deposit of at least 40 per cent of the value of the property.

Mark Harris, chief executive of the mortgage broker SPF Private Clients, said: “This isn’t a funding crisis – the banks are awash with liquidity.

“There are two main issues. The first is a processing one – they are not all set up for staff to work from home. The big processing centres are closed and they are operating with a skeleton staff.


The industry is also seeking to extend the length of time borrowers have to complete a transaction after receiving a mortgage offer, in order to stop transactions that are already in train from failing, according to two people briefed on the discussions.

Mortgage offers are usually valid for at least three months, but lenders are looking to provide a three-month extension.

Zenify

Logan Roy wrote: »

Did you even read the article? .

What did I get wrong?

Padre_Pio

Pheonix10 wrote: »

What's the purpose of the bank valuation and how do they calculate it? Would be a useful metric or useless in judging if you're overpaying?

The bank needs to know what your house is worth of they need to sell it, not what the EA thinks, or what you paid for it.

Beebe

Does anyone have any thoughts on what this pandemic will do to mortgage interest rates over the next year? My fixed rate is up in another months time and I’m thinking of going fixed for a few years again.

0gac3yjefb5sv7

Padre_Pio wrote: »

The bank needs to know what your house is worth of they need to sell it, not what the EA thinks, or what you paid for it.

But how do they calculate this?

0gac3yjefb5sv7

Padre_Pio wrote: »

The bank needs to know what your house is worth of they need to sell it, not what the EA thinks, or what you paid for it.

But how do they calculate this?

cnocbui

Beebe wrote: »

Does anyone have any thoughts on what this pandemic will do to mortgage interest rates over the next year? My fixed rate is up in another months time and I’m thinking of going fixed for a few years again.

I would think the most likely scenario id down.

smurgen

Zenify wrote: »

My heart sank when I saw that. I think property will be the least of our worries.

And the U.S unemployment figures today almost 50% worse than what was estimated. Prepare for worst case scenario economy wise. This will have a lag effect that will hit us in a few months

https://www.theguardian.com/business/2020/mar/26/us-unemployment-rate-coronavirus-business

Padre_Pio

Pheonix10 wrote: »

But how do they calculate this?

By examining the property and looking at similar properties in the area.

Similar to the EA, but the EA works for the seller and may price up or down depending on what suits the sale. You may get in a bidding war, so the final sale price can be unreliable.

Also, no EA may be involved, say if I'm buying a house from a family member, the bank still needs to know what the property is worth should you default.

0gac3yjefb5sv7

Padre_Pio wrote: »

By examining the property and looking at similar properties in the area.

Similar to the EA, but the EA works for the seller and may price up or down depending on what suits the sale. You may get in a bidding war, so the final sale price can be unreliable.

Also, no EA may be involved, say if I'm buying a house from a family member, the bank still needs to know what the property is worth should you default.

Thank you! So if the valuation comes back lower than the sale price, then I can use it an indication that it is overpriced?