Irish Property Market 2020 Part 2

beauf

So less supply, less ability to buy... complete agreement..

neutral guy

beauf wrote: »

Think of this way.

One guy has 100 dollars
One guy has 50 dollars
One quy has 10 dollars.

If everyone loses half their money who can buy the thing that's costs 50 dollars. If it falls to 25 dollars. At what point to you think the guy with 10 dollars is going to be able to out bid the other two.

All depends at how much people will have 100 Saved ! Because with today rents not much people even have money for food !

Nobody know when recession will happen how hard it will be and for how long.But personaly I think it will be Perfect Storm ! Because this time we are on very bad conditon boat badly damaged during previous recession from which country still did not recover.It will be something very different.

awec

OwlsZat wrote: »

He said it was the cost of the build. Which it is. The other costs can be reduced can be reduced easily if the Government actually wanted to.

The cost of the build was 371k, it's there in black and white.

His implication was that everything above 179k was profit, if you open the link it was very clear this was nonsense. You can't pick and choose which costs you want to include to make your point. Yes, if land gets cheaper then costs will reduce. Yes, if VAT reduces then cost will reduce, but the fact of the matter is it costs ~370k on average, or ~330k with zero profit, to build a gaff today, not 179.

hometruths

beauf wrote: »

So less supply, less ability to buy... complete agreement..

Yes completely agree.

Bad things happen in the economy.
Unemployment rises
Less ability to buy.
Supply falls.

Result is property prices fall.

The short answer every time is property prices will fall. Sure you can focus on how it means that less people will be able to buy but it does not change the fact that the end result is property prices will fall!

beauf

neutral guy wrote: »

All depends at how much people will have 100 Saved ! Because with today rents not much people even have money for food !

Nobody know when recession will happen how hard it will be and for how long.But personaly I think it will be Perfect Storm ! Because this time we are on very bad conditon boat badly damaged during previous recession from which country still did not recover.It will be something very different.

People say that every time. This time it will be different.

beauf

schmittel wrote: »

So you are agreeing prices will fall in a recession?
What are the associated symptoms?

I wasn't the person focused only on thing, or asking what other symptoms...

Then there's this...

https://www.irishtimes.com/business/economy/house-prices-rise-by-4-3-amid-lifting-of-covid-19-restrictions-report-says-1.4340523

Geuze

schmittel wrote: »

Seems like we are in agreement that if we have a recession property prices will fall.

Seems pretty likely that we will have a recession.

Technically, a recession is two consecutive quarters of falling GDP.

We had a very sharp fall in Q2.

We might have a rise in Q3???

However, 2020 GDP will be below 2019 GDP, no doubt about that.

As 2020 GDP will be so much below 2019 GDP, then I think we can fairly say that we are currently in a severe recession.

(Even if technically we see only one quarter of very sharp falls)

Geuze

schmittel wrote: »

Indeed. Rising unemployment = falling house prices.

It seems again we are in complete agreement.

Property prices will fall because bad things will happen to the economy.

If the rise in unemployment is mainly among people who weren't or aren't in the housing market, then the impact on demand may be limited.

Geuze

Note that we have been in recession since April, and no sign of much house price falls yet, six months later.................

neutral guy

The builders will continue build because there will be cheaper labor and cheaper sites
The buyers as government clerks and doctors will continue buy those houses.
There will be huge supply on second hand market
And many empty houses for sale which will be heavily taxed by property tax
But nobody will have money and jobs except named above.

Geuze

neutral guy wrote: »

The builders will continue build because there will be cheaper labor and cheaper sites
The buyers as government clerks and doctors will continue buy those houses.
There will be huge supply on second hand market
And many empty houses for sale which will be heavily taxed by property tax
But nobody will have money and jobs except named above.

Only "government clerks" and doctors will have jobs???

beauf

neutral guy wrote: »

The builders will continue build because there will be cheaper labor and cheaper sites
The buyers as government clerks and doctors will continue buy those houses.
There will be huge supply on second hand market
And many empty houses for sale which will be heavily taxed by property tax
But nobody will have money and jobs except named above.

That didn't happen the last time.

hometruths

beauf wrote: »

I wasn't the person focused only on thing, or asking what other symptoms...

Then there's this...

https://www.irishtimes.com/business/economy/house-prices-rise-by-4-3-amid-lifting-of-covid-19-restrictions-report-says-1.4340523

It was a leading question. I was getting at symptoms like rising unemployment which we agree has a negative impact on property prices.

I'm not sure what the point of the linked article is. I haven't disputed any of that.

My general view is that the impact of Covid will be a recession.

The impact of a recession will be a fall in property prices.

Nothing in that article changes that view. Indeed this reinforces it:

The Central Statistics Office’s (CSO)Residential Property Price Index for June indicated property prices nationally rose by 0.1 per cent in the 12 months to June, but were down 0.7 per cent in Dublin, where supply pressures are most acute.

hometruths

Geuze wrote: »

If the rise in unemployment is mainly among people who weren't or aren't in the housing market, then the impact on demand may be limited.

I keep hearing this theory, but I don't get it.

What demographic are going to bear the brunt of the job losses and are not in the housing market?

beauf

schmittel wrote: »

It was a leading question. I was getting at symptoms like rising unemployment which we agree has a negative impact on property prices.

I'm not sure what the point of the linked article is. I haven't disputed any of that.

My general view is that the impact of Covid will be a recession.

The impact of a recession will be a fall in property prices.

Nothing in that article changes that view. Indeed this reinforces it:

9 months of those stats are before Covid. Logically Covid can't be the cause of something that was happening before it existed. Nationally it's still a rise even after Covid.

The other issue is how laggy are the stats from CSO.

beauf

schmittel wrote: »

I keep hearing this theory, but I don't get it.

What demographic are going to bear the brunt of the job losses and are not in the housing market?

Maybe this...

https://www.nber.org/digest/jul12/w17951.html#:~:text=Using%20population%20survey%20and%20national,more%20cyclical%20labor%20market%20outcomes

US based but there's a general pattern. Of course this time it will be different than all other times. Obviously.

hometruths

beauf wrote: »

9 months of those stats are before Covid. Logically Covid can't be the cause of something that was happening before it existed. Nationally it's still a rise even after Covid.

The other issue is how laggy are the stats from CSO.

So prices were falling pre covid.
Article states we have a short term demand shock and a supply shock thanks to covid.
I suspect long term impact of coved will accelerate pre coved trend.

It sounds like you don’t think we will have a recession?

hometruths

beauf wrote: »

Maybe this...

https://www.nber.org/digest/jul12/w17951.html#:~:text=Using%20population%20survey%20and%20national,more%20cyclical%20labor%20market%20outcomes

US based but there's a general pattern. Of course this time it will be different than all other times. Obviously.

Obviously.

beauf

schmittel wrote: »

So prices were falling pre covid.
Article states we have a short term demand shock and a supply shock thanks to covid.
I suspect long term impact of coved will accelerate pre coved trend.

It sounds like you don’t think we will have a recession?

It's never a question of will it rain. But when will it rain.

Covid can't cause a trend that existed before it. Which you claimed it did. You seem to be suggesting it's both temporarily reversed the trend but also accelerated it at the same time. Both can't be true at the same time.

The issue with Covid is that its paused everything. This is temporary. No doubt. Some places will go bust some places have never been busier. How do you predict that?

https://extra.ie/2020/08/05/news/irish-news/staycations-by-the-sea-prices

neutral guy

Geuze wrote: »

Only "government clerks" and doctors will have jobs???

Do you know how many friends/partners/helpers/family members bring to Dublin every newly elected member of parlament/government !? Who help them get the job with very good wages !? Do you know how many them stay in Dublin buying houses there !? Plenty ! The only people who has the money during the recession is the people who has acces to tax payers money !

Hubertj

neutral guy wrote: »

Do you know how many friends/partners/helpers/family members bring to Dublin every newly elected member of parlament/government !? Who help them get the job with very good wages !? Do you know how many them stay in Dublin buying houses there !? Plenty ! The only people who has the money during the recession is the people who has acces to tax payers money !

Why the big concern about tax and the taxpayer in your recent posts? Looking at your comments on other threads you work for cash only and don’t think you need to bother paying tax. That’s just for other people to pay is it?

Assetbacked

https://www-irishtimes-com.cdn.ampproject.org/c/s/www.irishtimes.com/business/transport-and-tourism/hoteliers-warn-75-of-tourism-jobs-may-be-lost-1.4347988?mode=amp

Now that the summer season is over and Irish people are back at work and school, revenues for hotels likely to be down 70% compared to September last year.

100,000 of the 270,000 jobs are gone apparently and another 100,000 at risk over the coming weeks. The lobby group for hotels is also calling for loan payment breaks to be extended from 6 to 12 months.

There were 99 hotels and other forms of guest accommodation at planning or development stage in Dublin alone at the start of this year. Around a third were intended to cater for longer term visitors like business people. Source: https://www.irishtimes.com/life-and-style/travel/ireland/what-will-happen-to-all-those-new-hotels-dublin-was-to-get-1.4259355

To me the pandemic has probably put all of this into question and maybe, just maybe, investors may divert their attentions to maybe building apartments for renting as there is of course demand for more professional landlords and more affordable, high quality rentals.

The_Conductor

Assetbacked wrote: »

To me the pandemic has probably put all of this into question and maybe, just maybe, investors may divert their attentions to maybe building apartments for renting as there is of course demand for more professional landlords and more affordable, high quality rentals.

Depends on a lot of different factors- including, but not limited to, the perception of the regulatory regime. Even now it is thought that there will be deluge of tenancy terminations come the 5th January- as the pandemic protections for those in receipt of emergency payments expire.

The perception (rightly or wrongly) is that the regulatory regime in Ireland is such that it just doesn't make sense to try and expand property portfolios for large scale property investors in Ireland.

Plenty of large scale landlords have gotten nobbled by the same regulations that were brought in to try and banish the small scale landlords from the sector.

Its all well and good giving the REITs defacto tax-free status- however, if it is at a cost of trying to shoehorn a business model on them that they refuse to engage with- even the prospect of tax-free income, simply isn't going to work.

PropQueries

According to the Laois Nationalist, c. 43% of homes in Co. Laois are worth less than €100k based on the LPT figures for 2020.

“OVER four in ten private houses in Laois are worth less than €100,000, according to county council figures. About 29,500 householders in the county pay the local property tax (LPT). A total of 12,744 (43.3%) will pay the lowest rate of €99 next year, as their homes are valued at €100,000 or less.”

Article in Laois Nationalist is here: https://laois-nationalist.ie/2020/09/06/over-43-of-laois-homes-are-worth-less-than-e100k/#.X1XmNnlKjIU

old_house

PropQueries wrote: »

According to the Laois Nationalist, c. 43% of homes in Co. Laois are worth less than €100k based on the LPT figures for 2020.

“OVER four in ten private houses in Laois are worth less than €100,000, according to county council figures. About 29,500 householders in the county pay the local property tax (LPT). A total of 12,744 (43.3%) will pay the lowest rate of €99 next year, as their homes are valued at €100,000 or less.”

Article in Laois Nationalist is here: https://laois-nationalist.ie/2020/09/06/over-43-of-laois-homes-are-worth-less-than-e100k/#.X1XmNnlKjIU

No, of course they are not.

The actual charge you pay on the property is based on its value on the valuation date (1 May 2013).

Billythekid19

PropQueries wrote: »

According to the Laois Nationalist, c. 43% of homes in Co. Laois are worth less than €100k based on the LPT figures for 2020.

“OVER four in ten private houses in Laois are worth less than €100,000, according to county council figures. About 29,500 householders in the county pay the local property tax (LPT). A total of 12,744 (43.3%) will pay the lowest rate of €99 next year, as their homes are valued at €100,000 or less.”

Article in Laois Nationalist is here: https://laois-nationalist.ie/2020/09/06/over-43-of-laois-homes-are-worth-less-than-e100k/#.X1XmNnlKjIU

Laois sounds like a very affordable spot to live in. You'd be lucky to get a site alone for under 100k in any city in Ireland

PropQueries

old_house wrote: »

No, of course they are not.

Good spot. I thought the same but then the article stated "A total of 12,744 (43.3%) will pay the lowest rate of €99 next year". So, I wonder if it's based on the 2013 figure or have the council now updated the valuations and this is reflected in the article as the article didn't mention the 2013 valuations?

Anyone else know?

smurgen

The_Conductor wrote: »

Depends on a lot of different factors- including, but not limited to, the perception of the regulatory regime. Even now it is thought that there will be deluge of tenancy terminations come the 5th January- as the pandemic protections for those in receipt of emergency payments expire.

The perception (rightly or wrongly) is that the regulatory regime in Ireland is such that it just doesn't make sense to try and expand property portfolios for large scale property investors in Ireland.

Plenty of large scale landlords have gotten nobbled by the same regulations that were brought in to try and banish the small scale landlords from the sector.

Its all well and good giving the REITs defacto tax-free status- however, if it is at a cost of trying to shoehorn a business model on them that they refuse to engage with- even the prospect of tax-free income, simply isn't going to work.

The investment limited partnership bill of 2019 is about to be put to work. It should give renewed interest.

Marius34

schmittel wrote: »

Seems like we are in agreement that if we have a recession property prices will fall.

Seems pretty likely that we will have a recession.

Just a thought, discussed previously.
What is recession? why question towards the future?
If we take the definition of two consecutive quarters of negative economic growth, quarter-on-quarter, which is widely used by UK. Then likely Ireland will avoid recession at least for this year, and possibly next year.
By most other definitions Ireland is well into recession already, since April.

hometruths

Marius34 wrote: »

Just a thought, discussed previously.
What is recession? why question towards the future?
If we take the definition of two consecutive quarters of negative economic growth, quarter-on-quarter, which is widely used by UK. Then likely Ireland will avoid recession at least for this year, and possibly next year.
By most other definitions Ireland is well into recession already, since April.

From beauf's helpful wikipedia link:

In economics, a recession is a business cycle contraction when there is a general decline in economic activity.[1][2] Recessions generally occur when there is a widespread drop in spending (an adverse demand shock).

So I will put my previous point another way:

Seems pretty likely that in the short to medium term there will be a general decline in economic activity, and a widespread drop in spending.

Seems unlikely that property prices will be immune to this.