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Irish Property Market 2020 Part 2
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TheSheriff wrote: »Your wrong here, I've several friends who have saved 15k plus ( couples) during lockdown, all were renting before, all are now looking to buy, all have been approved since lockdown.
Granted this is a small sample size, but your general arguments to suit your narrative are not true.
Property will fall no doubt. But people have more money and a stronger desire to own. What impact this will have remains to be seen.
Did they move out of their rental accommodation due to lockdown?0 -
Bass Reeves wrote: »In the last 6 months savings in Ireland have grown by 10billion. Just to put it in context that is 33k houses at 300k a pop. Now I am not saying everybody with savings will go out and buy a house.
However this is a vast amount to add to savings. It will mean there is more deposit money out there. As well people will be upgrading there own houses, extensions, sunrooms, revamping kitchens, bedrooms , bathrooms and living rooms. A good few paddies when they have a few point will spend a bit of it on there homes.
It likely over the next 6-12 months that another 10billion will be added to that savings. If even 10% of it goes on home improvements labour costs in building will stay stable or increase, if 10% of it is used on deposits it will see a demand for 40k houses in the short to medium terms.
Economics is fairly simple but that 10-20 billions in savings will effect the property market in different ways
When you say savings will increase in the next 6-12 months where are you getting this from? Mortgage breaks will end soon and government support will taper off. Job losses and pay cuts are all coming within that timeframe.0 -
Well the US actual housing market might also be a bellweather:
https://www.prnewswire.com/news-releases/the-housing-market-posts-more-strong-gainspending-sales-up-20-prices-up-11-301122201.html
And it's not bad in the UK, either:
https://www.express.co.uk/life-style/property/1323721/house-prices-uk-sales-july-latest-data-rightmove
But I'm sure Ireland's 'special'.
Sigh, obviously sales are up giving both countries were LOCKED DOWN for months.
Some people will do anything to try convince others that the property market won't fall, it's pathetic.0 -
edjkdkjdhjkd wrote: »Sigh, obviously sales are up giving both countries were LOCKED DOWN for months.
Some people will do anything to try convince others that the property market won't fall, it's pathetic.
Right back at you.0 -
For those who are 100% certain the market will fall significantly within the next year - do you plan on making investments to capitalise on this?0
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Springy Turf wrote: »For those who are 100% certain the market will fall significantly within the next year - do you plan on making investments to capitalise on this?
Asec Security AS6011 Underfloor Deposit Safe.
Best investment someone could make over the next 5 to 10 years in my opinion.
Link to unit here: https://www.safes.ie/product/asec-security-as6011-underfloor-deposit-safe/0 -
When you say savings will increase in the next 6-12 months where are you getting this from? Mortgage breaks will end soon and government support will taper off. Job losses and pay cuts are all coming within that timeframe.
With a semi lockdown still in place people will still continue to build up savings. Any vaccine will be another 9-12 months before general population are vaccinated and total lockdown ends.
From that savings will continue to climb. What posters are failing to accept is that while all the savings will not effect property prices some of it will. Not everyone is savings extra but some are. Not everyone is saving a deposit but some are. Savings are more likely to be spend on big ticket items rather than whittle away on weekends away. Some will spend this extra savings on cars or once in a lifetime holidays. But for other its will help them to reach there deposit sooner. It will also help breach( or maybe increase them) differences between house prices and mortgages.
If only a faction of those extra savings are directed at house purchases it will impact the market through higher labour and building costs and extra house buyersPropQueries wrote: »Asec Security AS6011 Underfloor Deposit Safe.
Best investment someone could make over the next 5 to 10 years in my opinion.
Link to unit here: https://www.safes.ie/product/asec-security-as6011-underfloor-deposit-safe/Slava Ukrainii
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Bass Reeves wrote: »With a semi lockdown still in place people will still continue to build up savings. Any vaccine will be another 9-12 months before general population are vaccinated and total lockdown ends.
From that savings will continue to climb. What posters are failing to accept is that while all the savings will not effect property prices some of it will. Not everyone is savings extra but some are. Not everyone is saving a deposit but some are. Savings are more likely to be spend on big ticket items rather than whittle away on weekends away. Some will spend this extra savings on cars or once in a lifetime holidays. But for other its will help them to reach there deposit sooner. It will also help breach( or maybe increase them) differences between house prices and mortgages.
If only a faction of those extra savings are directed at house purchases it will impact the market through higher labour and building costs and extra house buyers
It will not protect against inflation
Property won't protect against inflation either. If inflation rises, interest rates rise. If interest rates rise by even a few percent, residential house prices in Ireland collapse.
I put some numbers into a mortgage repayment calculator. As you can see below, if a couple that is approved for a maximum €300,000 mortgage and buys today, a similar couple with a similar repayment capacity would only be approved for a mortgage of €200,000 in 5 years time if mortgage interest rates did increase by 3%. This doesn't impact the buyer today but it does impact them if they wish to sell in 5 years times as most similar potential buyers with a similar repayment capacity would be approved for a significantly lower value mortgage. If interest rates rise, it will have a a very very negative impact on Irish residential house prices.
Monthly repayments on a typical 30-year mortgage of €300,000 at 3% = €1,264.81
Monthly repayments on a typical 30-year mortgage of €200,000 at 6% = €1,199.10
So, basically, if inflation rises to 6% and interest rates rise by only 3% to keep it a bit under control (allowing for the ECB allowing inflation to exceed their target for a few years), the money in the safe loses 6% per annum, but I would lose c. 30% immediately on the investment property I bought. And, given that we aren't isolated in the world economy and are an extremely high-cost country relatively to our trading partners as is, I don't believe wages can rise over the next ten years, inflation or no inflation to offset the costs.0 -
Bass Reeves wrote: »With a semi lockdown still in place people will still continue to build up savings. Any vaccine will be another 9-12 months before general population are vaccinated and total lockdown ends. ...........
There won't be any vaccination of the general population over the coming 9 to 12 months. A phase 3 trail will take 12/24 months.
Semi lockdowns aren't good for the economy IMO.0 -
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Bass Reeves wrote: »With a semi lockdown still in place people will still continue to build up savings. Any vaccine will be another 9-12 months before general population are vaccinated and total lockdown ends.
From that savings will continue to climb. What posters are failing to accept is that while all the savings will not effect property prices some of it will. Not everyone is savings extra but some are. Not everyone is saving a deposit but some are. Savings are more likely to be spend on big ticket items rather than whittle away on weekends away. Some will spend this extra savings on cars or once in a lifetime holidays. But for other its will help them to reach there deposit sooner. It will also help breach( or maybe increase them) differences between house prices and mortgages.
If only a faction of those extra savings are directed at house purchases it will impact the market through higher labour and building costs and extra house buyers
It will not protect against inflation
Equally you could say that while all the increased unemployment will not effect property prices, some of it will.0 -
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PropQueries wrote: »Property won't protect against inflation either. If inflation rises, interest rates rise. If interest rates rise by even a few percent, residential house prices in Ireland collapse.
I put some numbers into a mortgage repayment calculator. As you can see below, if a couple that is approved for a maximum €300,000 mortgage and buys today, a similar couple with a similar repayment capacity would only be approved for a mortgage of €200,000 in 5 years time if mortgage interest rates did increase by 3%. This doesn't impact the buyer today but it does impact them if they wish to sell in 5 years times as most similar potential buyers with a similar repayment capacity would be approved for a significantly lower value mortgage. If interest rates rise, it will have a a very very negative impact on Irish residential house prices.
Monthly repayments on a typical 30-year mortgage of €300,000 at 3% = €1,264.81
Monthly repayments on a typical 30-year mortgage of €200,000 at 6% = €1,199.10
So, basically, if inflation rises to 6% and interest rates rise by only 3% to keep it a bit under control (allowing for the ECB allowing inflation to exceed their target for a few years), the money in the safe loses 6% per annum, but I would lose c. 30% immediately on the investment property I bought.
You have waffeled about this before most mortgages are proofed for a 2-3% rise in interest rates. Mortages lending will not be effect until rates rise 4-6% above present rates. At present Mortgages repayments are 60-80% of rental costs.
If inflation happens labour costs go up and build costs go up eith house prices go up or supply drops.
As Bertie would said
Your wafflingSlava Ukrainii
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Bass Reeves wrote: »You have waffeled about this before most mortgages are proofed for a 2-3% rise in interest rates. Mortages lending will not be effect until rates rise 4-6% above present rates. At present Mortgages repayments are 60-80% of rental costs.
If inflation happens labour costs go up and build costs go up eith house prices go up or supply drops.
As Bertie would said
Your waffling
True, Mortgages are 'proofed' for a 2% - 3% interest rate rise. Based on current interest rates. If interest rates rise to 3%, they're further 'proofed' by an additional 2% - 3%. Hence the 6%.
Plus, there's little room for labour costs to increase further in Ireland. We're already vastly more expensive than most of our european trading partners.
As an example. Say Google does employ 8,000 workers in Ireland. I know that figure is debatable. Say they pay an average salary of €60,000 per worker per year. Google is not a young company anymore (it's 22). It's a mature company and will be looking for cost savings going forward. If they move to e.g. Poland and pay an avarage salary of €40,000 per annum, they will save €160,000,000 in annual wage costs per annum. They have €160 Million reasons, in savings per annum, to move if the international tax climate changes.
Will they move? I don't know, but the reasons for being here are under attack, tax wise. But, there's one thing for certain. Our wage costs are not rising any further, inflation or no inflation.0 -
Been reading a lot of vested interest ****e on this thread the last few months plus doing some real research and as a FTB working in FS, I see the following:
1) Sadly house prices will not fall much despite the job losses due to severe supply issues
2) Houses over 500k will fall, especially those over 1 million due to affordability and no HTB (Help the Brickie). Below 500k they’ll stay same/slight rise.
3) In an era of extreme money printing, money is flowing into assets that generate positive yield or protect against inflation (stocks, property, gold and even crypto). These money flows are the main drivers of the stock market bounce since the March crash. Given the lack of yield in the global bond markets, money will continue to flow into these assets so any big property discounts will be likely snapped up. Therefore forget the 50% fall of 2008-2013, it’s not going to happen!
4) The market topped in 2018 due to peek affordability and has remained relative flat since then. It will only start to tick down when we end up with an oversupply which is years away.
5) Given politicians sole goal is stay in power, the rise of Sinn Féin has opened FF/FG eyes to the housing/health crisis. If they do nothing they’ll be out next election. So I do expect some measures to make housing more attainable for the masses so they get to stay in.
6) Rents and rental yields will fall in Dublin! The worst effected areas of this crisis hospitality and retail are mainly renters. This coupled with the WFH and reduced office occupancy will lead to increased supply and landlords will either drop rents or be left with vacant properties. This however, only applies in Dublin. Given the total lack of supply outside Dublin, rent rises are likely. The Dublin picture will change if vaccine found and tourists return naturally.
Overall for a FTB it’s a pretty sad state of affairs I’m afraid for the next while!0 -
PropQueries wrote: »I put some numbers into a mortgage repayment calculator. As you can see below, if a couple that is approved for a maximum €300,000 mortgage and buys today, a similar couple with a similar repayment capacity would only be approved for a mortgage of €200,000 in 5 years time if mortgage interest rates did increase by 3%. This doesn't impact the buyer today but it does impact them if they wish to sell in 5 years times as most similar potential buyers with a similar repayment capacity would be approved for a significantly lower value mortgage. If interest rates rise, it will have a a very very negative impact on Irish residential house prices.
Monthly repayments on a typical 30-year mortgage of €300,000 at 3% = €1,264.81
Monthly repayments on a typical 30-year mortgage of €200,000 at 6% = €1,199.10
You’ve posted this multiple times in this thread and I can see the logic of it. However, you are talking about a hypothetical increase in mortgage interest rates of 3-3.75% in 5 years. It could happen, but you can’t put your life on hold worrying about rate changes in the medium term.
The central bank also has mechanisms open to it to protect banks and indirectly influence mortgage lending. All it would take is relax the loan to income multiple to x4, or the banks could reduce their margin on the interest rates. These would minimise the impact of interest rate rises.
€300,000 at 6% over 30 years would cost €1,800. Many people are paying that in rent, if affordability criteria by the banks were relaxed, that would also counter rate rises. I am not advocating any of the above, as we really don’t want people taking on more debt, just pointing out that there are ways to counter against rate rises.0 -
You’ve posted this multiple times in this thread and I can see the logic of it. However, you are talking about a hypothetical increase in mortgage interest rates of 3-3.75% in 5 years. It could happen, but you can’t put your life on hold worrying about rate changes in the medium term.
The central bank also has mechanisms open to it to protect banks and indirectly influence mortgage lending. All it would take is relax the loan to income multiple to x4, or the banks could reduce their margin on the interest rates. These would minimise the impact of interest rate rises.
€300,000 at 6% over 30 years would cost €1,800. Many people are paying that in rent, if affordability criteria by the banks were relaxed, that would also counter rate rises. I am not advocating any of the above, as we really don’t want people taking on more debt, just pointing out that there are ways to counter against rate rises.
Your points are good. The main thrust of my argument was the very large impact on property values from what would appear to be relatively very small increases in interest rates. I don't think the younger generation fully understand this.
It obviously doesn't impact anybody buying today, especially if they fix their rates. But, as interest rates are already at zero, any value in a property that may be attributable to interest rates are now fully priced in.
Any future increases in property values are now reliant on the future direction of the economy, up or down and of course, as you mentioned, Government/ central bank interference. But I don't believe the Government has the financial capacity to interfere further and I don't believe the Irish central bank will put itself in a position where they will be blamed once more for causing a housing bubble.0 -
Developer to sell 14 apartments to Dublin City Council for social housing at an indicative cost of €9.18 million.
The developers have put an indicative price tag of €762,916 on each of the nine two-bedroom apartments it proposes to provide for social housing and €469,177 on each of the five one-bedroom apartments it is proposing to sell to the council.
The Irish Times article is here: https://www.irishtimes.com/business/construction/two-bed-donnybrook-social-housing-units-priced-at-762-916-each-1.43449600 -
sanfranbest wrote: »Greedy or clever?
Looks like there was only one cottage on this site,
Developer demolished the cottage and built two cottages on the site,
They are both 80sq m , but with bad natural light and not a great design,
They were first listed for 645k a few months ago, then with no buyers, they dropped the price to 627,500
Should the developer have gone with a really nice bigger house and not tried to squeeze two smaller cottages onto the site???
https://www.myhome.ie/residential/brochure/20-arbutus-place-2-bed-study-portobello-dublin-8/4409698
Your Thoughts???
Price now dropped to 610K
https://www.daft.ie/dublin/new-homes-for-sale/arbutus-place-arbutus-place-portobello-dublin-168514/
Still over priced??0 -
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Yara Rich Camouflage wrote: »Laughable.
It is Donnybrook- so it is plausible. You're paying for the area rather than the units. The bigger question is why the local authority are going out of their way to buy social housing units in probably the most expensive postal code in the country.0 -
The_Conductor wrote: »It is Donnybrook- so it is plausible. You're paying for the area rather than the units. The bigger question is why the local authority are going out of their way to buy social housing units in probably the most expensive postal code in the country.
Not even that. There's a massive site literally a 5 minute walk away owned by Dublin Bus (i.e. the taxpayer). The could have even kept the depot/ garage and built on top of it. Site values don't matter when the state owns the land already and they insist on having social housing in the area.0 -
4) The market topped in 2018 due to peek affordability and has remained relative flat since then. It will only start to tick down when we end up with an oversupply which is years away.
the market is back at 2018 price levels, trending up
https://bl.ocks.org/pinsterdev/raw/b52f2a466477d05576bc/?s=commuter0 -
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PropQueries wrote: »Not even that. There's a massive site literally a 5 minute walk away owned by Dublin Bus (i.e. the taxpayer). The could have even kept the depot/ garage and built on top of it. Site values don't matter when the state owns the land already and they insist on having social housing in the area.
And RTE, also owned by the taxpayer- is across the road.........
Once upon a time Donnybrook was out in the countryside and land was plentiful. Why not banish RTE to somewhere in Meath- they'd be welcomed with open arms- and why does Dublin Bus need a depot in Donnybrook? Because they had one 50 years ago? Times change.
We need high density developments, a removal of height restrictions- and public bodies to stop hoarding improbably valuable sites in the manner in which Dublin Bus, RTE and others are doing.
Also- if/when RTE/Dublin Bus (and others) sell property in Donnybrook (or elsewhere) the funds should revert to the exchequer- and not into the black hole of the finances of the organisation- as has been tradition.0 -
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the market is back at 2018 price levels, trending up
https://bl.ocks.org/pinsterdev/raw/b52f2a466477d05576bc/?s=commuter
In all fairness- this is based on implausibly low volumes of sales- such that it is largely meaningless. Until there are normal volumes of property (insofar as anything is normal) hitting the market- its very hard to read anything into trends.
Everyone is predicting a significant number of BTL properties starting to hit the market from late Jan 21 onwards- as the current restrictions protecting covid payment recipients expires.
Also- the upward trend- can be explained by the first time buyer market rising to take account of enhanced grants for first time buyers being absorbed by developers (while they can get them).
There are a lot of artificial constructs offering artificial support to the housing market.0 -
fliball123 wrote: »I know that I am talking to a different poster and you need to follow what was said, some people are saying landlords are making a killing I am simply pointing out the fact that 51% goes straight back to the state + property tax and if the landlord has a mortgage then in a lot of cases they making little or nothing on the property
I agree that LLs pay tax, but you can't assume that 51% is what every LL is paying in tax.
A professional LL with 3 apartments rented out and no job will pay 20% on the first 39K and then 40% on the rest.
Once you have accounted for tax deduction, you are probably going to have an income that falls within the 20% tax band.
And if anything falls outside of the 20% you can invest it on a private pension tax free plan0 -
The_Conductor wrote: »And RTE, also owned by the taxpayer- is across the road.........
Once upon a time Donnybrook was out in the countryside and land was plentiful. Why not banish RTE to somewhere in Meath- they'd be welcomed with open arms- and why does Dublin Bus need a depot in Donnybrook? Because they had one 50 years ago? Times change.
We need high density developments, a removal of height restrictions- and public bodies to stop hoarding improbably valuable sites in the manner in which Dublin Bus, RTE and others are doing.
Also- if/when RTE/Dublin Bus (and others) sell property in Donnybrook (or elsewhere) the funds should revert to the exchequer- and not into the black hole of the finances of the organisation- as has been tradition.RTE are way way ahead of you. They sold a part of their Donneybrook site to Cairn Homes for €100 million back in 2017. The next year, they were back in deficit blaming the low cost of the licence fee.
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The_Conductor wrote: »In all fairness- this is based on implausibly low volumes of sales- such that it is largely meaningless. Until there are normal volumes of property (insofar as anything is normal) hitting the market- its very hard to read anything into trends.
Everyone is predicting a significant number of BTL properties starting to hit the market from late Jan 21 onwards- as the current restrictions protecting covid payment recipients expires.
Also- the upward trend- can be explained by the first time buyer market rising to take account of enhanced grants for first time buyers being absorbed by developers (while they can get them).
There are a lot of artificial constructs offering artificial support to the housing market.
I'm only reporting data, you can read whatever you read into them
I'm seeing a positive trend from beginning of the year that started before covid and is showing no signs of slowing down.
Volumes of sales where hit during lock down but they have picked up already0 -
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I agree that LLs paytax, but you can't assume that 51% is what every LL is paying in tax.
A professional LL with 3 apartments rented out and no job will pay 20% on the first 39K and then 40% on the rest.
Once you have accounted for tax deduction, you are probably going to have an income that falls within the 20% tax band
+ USC on the gross rental income, + PRSI
Also- the vast majority of landlords do in fact have daytime jobs- so most, if not all, rental income is subject to the higher tax rate- less any allowable costs and deductions.
If a landlord had 3 units, without loading them up with debt- aka if they prudently pay down their debt- they could potentially end up paying anything up to 58% on the rental income (depending on what their USC goes to- thanks to whatever income they get from their day job).
Even people with 3 rental units- wouldn't be classified as employed in the property sector- its investment income- and treated in this manner by the Revenue Commissioners as 'unearned income'. This is despite the fact that over 75% of all the units in the Irish rental market being owned by landlords with 3 or fewer units (according to the RTB statistics).
Speaking of the RTB- what in gods name are they doing with the 2019 Annual Report? It was due in July. I accept there could very well be delays with Covid etc- however, surely they should be in a position to advise when it might be published at this stage?0 -
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PropQueries wrote: »RTE are way way ahead of you. They sold a part of their Donneybrook site to Cairn Homes for €100 million back in 2017. The next year, they were back in deficit blaming the low cost of the licence fee.
Just why are they allowed get away with this.
Its stealing from the taxpayers of the country.
Also, with respect of the license fee- if they managed to get it tagged onto property tax, so it was unavoidable, it might successfully assist with their collection of it (its sort of hard to argue with the Revenue Commissioners).
Dee Forbes really needs to cop on- she is getting a generous fee from people, given the fare that is produced and how its not exactly tailored towards most people other than limited programming). Other state broadcasters who get a state fee- do not pollute their programming with advertising in the manner RTE see fit to do.
Anyhow- my little rant about RTEs abuse of the Irish people- is far off the remit of this thread, so I'll shut up.0 -
The_Conductor wrote: »+ USC on the gross rental income, + PRSI
Also- the vast majority of landlords do in fact have daytime jobs- so most, if not all, rental income is subject to the higher tax rate- less any allowable costs and deductions.
If a landlord had 3 units, without loading them up with debt- aka if they prudently pay down their debt- they could potentially end up paying anything up to 58% on the rental income (depending on what their USC goes to- thanks to whatever income they get from their day job).
Even people with 3 rental units- wouldn't be classified as employed in the property sector- its investment income- and treated in this manner by the Revenue Commissioners as 'unearned income'. This is despite the fact that over 75% of all the units in the Irish rental market being owned by landlords with 3 or fewer units (according to the RTB statistics).
Speaking of the RTB- what in gods name are they doing with the 2019 Annual Report? It was due in July. I accept there could very well be delays with Covid etc- however, surely they should be in a position to advise when it might be published at this stage?0 -
The_Conductor wrote: »+ USC on the gross rental income, + PRSI
Also- the vast majority of landlords do in fact have daytime jobs- so most, if not all, rental income is subject to the higher tax rate- less any allowable costs and deductions.
If a landlord had 3 units, without loading them up with debt- aka if they prudently pay down their debt- they could potentially end up paying anything up to 58% on the rental income (depending on what their USC goes to- thanks to whatever income they get from their day job).
Even people with 3 rental units- wouldn't be classified as employed in the property sector- its investment income- and treated in this manner by the Revenue Commissioners as 'unearned income'. This is despite the fact that over 75% of all the units in the Irish rental market being owned by landlords with 3 or fewer units (according to the RTB statistics).
Speaking of the RTB- what in gods name are they doing with the 2019 Annual Report? It was due in July. I accept there could very well be delays with Covid etc- however, surely they should be in a position to advise when it might be published at this stage?
Lots of assumptions then.
If you stripped down all the assumptions you are left with the very possible scenario of paying 20% + UCS + PRSI
If i was renting 3 mortgage-free properties i might not even bother to have a daytime job0 -
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Lots of assumptions then.
If you stripped down all the assumptions you are left with the very possible scenario of paying 20% + UCS + PRSI
If i was renting 3 mortgage-free properties i might not even bother to have a daytime job
If..ah yes, that word ....if a cow had balls, it would be a bull.0
This discussion has been closed.
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