Irish Property Market 2020 Part 2

Mic 1972

neutral guy wrote: »

When rents will 3-5 times cheaper then pay mortgage nobody will take a mortgage
Dublin are flooded with property for rent and supply are/will continue rising
This just a start
The many land lords will avoid bring prices down because they are trapped with maximum of 4 per cent per year price increase
But when mortgage holiday will be ends for them they will have choice or reduce rent and get rent to pay mortgage or pay mortgage for house with empty rooms
There will be total mess in shared property were half rooms will be empty and land lord will have pay mortgage for full house
That is one from example how low paid workers which lost jobs in retail and hospitality will massively affect the property market

Asking Prices for apartments in city centre are still through the roof.

All this time from beginning of Covid asking prices have actually increased

Graham

thefridge2006 wrote: »

Yeah i read it but my point is that they were still operating and providing jobs....How many other companies are in the same position.

Even before covid arrived i had wondered how many companies (mainly cafes ) were just holding on.

Basically any company that was getting by is a goner i'd imagine

They are still operating and providing jobs.

PropQueries

Mic 1972 wrote: »

Asking Prices for apartments in city centre are still through the roof.

All this time from beginning of Covid asking prices have actually increased

They can "ask" all they want. They're not renting them and most are vacant and have been for the past 2-3 years.

Here's an article in the Sunday Business Post from last February titled: "Unoccupied units at upmarket rental apartment schemes in the capital are compared to boomtime ‘ghost estates’ by critics"

Link to Sunday Business Post article here: https://www.businesspost.ie/ireland/the-luxury-gap-hundreds-of-high-end-apartments-lying-empty-across-dublin-ac7da06c

Hubertj

PropQueries wrote: »

You're right. Census 2016: c. 180,000 vacant homes. GeoDirectory Q2 2020: c. 90,000 vacant homes. I really don't believe all those c. 90,000 vacant homes are in Co. Leitrim. The whole demand for housing in Ireland is based upon net migration remaining at c. 30,000 per annum indefinitely as per a recent Central Bank report.

With the hospitality industry on its knees etc. for the next 4 years and Cairn Homes stating recently they're back at 85% pre-covid building levels, it is most likely supply with significantly exceed demand for the next 5 years at a minimum.

I would predict 2011 prices come 2022/2023. Yes, I did say 2011. Everyone can attack at will, but the demand isn't there and the excess supply is.

And if anyone truly believes our population is growing naturally at such a rate to meet this excess supply, here is the breakdown of the 173,613 increase in the population in Ireland between 2011 and 2016 as per Census 2016:

0 - 34 Years: -72,493 (yes, minus)
35 - 64 Years: +143,932
65 - 85+ Years: +102,174

I’d be more inclined to go with CSO population statistics over the next 30 years instead of some lad in the internet making up numbers. Have you also factored into you “analysis” Irish people retiring to Ireland in the current recession? Doubt it. Annual % of accommodation that becomes obsolete?

JimmyVik

PropQueries wrote: »

They can "ask" all they want. They're not renting them and most are vacant and have been for the past 2-3 years.

Here's an article in the Sunday Business Post from last February titled: "Unoccupied units at upmarket rental apartment schemes in the capital are compared to boomtime ‘ghost estates’ by critics"

Link to Sunday Business Post article here: https://www.businesspost.ie/ireland/the-luxury-gap-hundreds-of-high-end-apartments-lying-empty-across-dublin-ac7da06c

I imagine they leave them empty because of rent control.

old_house

neutral guy wrote: »

I will not even look on house market without 50 per cent price drop.

I do fully expect prices to drop in the coming 24-36 months and I think the drop will be substantial. There is one thing however that might be different this time.

In the last financial crisis liquidity was a huge problem for nearly everybody and not many people/businesses sat on cash reserves that they decided to better get rid of. The few people lucky enough to have money in the bank left it well alone. Quite the opposite might happen now: the headline inflation is low and will probably remain low for many years, but asset price inflation might not. What if people start to doubt the longterm value of their money or at least see the buying power dwindle through negative interest? People who feel the need to get out of cash deposits might consider other assets, and I think (desirable) property, precious metals and crypto might well turn out to be the assets that profit from such a trend. We'll see.

pearcider

awec wrote: »

Genuine question, did you read the article?

Loss making since 2016. 14 million euro debt for a company that hasn't made a bean in 4 years is a bit whacky. This was not a healthy business killed by covid.

I would actually be curious how a pharmacy runs up that sort of debt.

Does it actually matter? The recession was going to hit Covid or no Covid. The Federal Reserve reversed the taper of their balance sheet in September 2019 as they saw instability in the world banking system. Look it up if you don’t believe me.

The property market is like an oil tanker. It does not turn on a dime. It’s a lagging indicator since it’s illiquid. The drops will begin to accelerate now though you can bet on that.

PropQueries

Hubertj wrote: »

I’d be more inclined to go with CSO population statistics over the next 30 years instead of some lad in the internet making up numbers. Have you also factored into you “analysis” Irish people retiring to Ireland in the current recession? Doubt it. Annual % of accommodation that becomes obsolete?

If Glenveagh just reduced their asking prices for apartments in Greystones from €495,00 to €385,000, I doubt there's many Irish emigrants returning to retire in Ireland. Their apartments in Greystones were directly aimed at this market and downsizers.

I think you have a misconception about older emigrants. Most don't really want to return to and retire in Ireland. They've made their life in whatever country they emigrated to and they're most likely staying there.

Thespoofer

At the end of the day, people in this country are obsessed with property ownership, for obvious reasons.
We've had posters on here saying where can they invest their money etc etc, as far as I can see it all comes back to property and always will.
With cash held in banks losing money, more and more people will begin to realise that money needs to be used.
And it will, inevitably, come back down to property.

awec

pearcider wrote: »

Does it actually matter? The recession was going to hit Covid or no Covid. The Federal Reserve reversed the taper of their balance sheet in September 2019 as they saw instability in the world banking system. Look it up if you don’t believe me.

The property market is like an oil tanker. It does not turn on a dime. It’s a lagging indicator since it’s illiquid. The drops will begin to accelerate now though you can bet on that.

Of course it matters. A business that was doomed to failure going tits up is a completely different prospect to a viable, healthy business being killed off in the space of 6 months.

JimmyVik

Thespoofer wrote: »

At the end of the day, people in this country are obsessed with property ownership, for obvious reasons.
We've had posters on here saying where can they invest their money etc etc, as far as I can see it all comes back to property and always will.
With cash held in banks losing money, more and more people will begin to realise that money needs to be used.
And it will, inevitably, come back down to property.

No money to be made in property now. And with huge risk attached to it now who would invest in it.

PropQueries

Hubertj wrote: »

I’d be more inclined to go with CSO population statistics over the next 30 years instead of some lad in the internet making up numbers. Have you also factored into you “analysis” Irish people retiring to Ireland in the current recession? Doubt it. Annual % of accommodation that becomes obsolete?

Unfortunately no made up figures:

Link to Central Bank Net Migration Projections: https://centralbank.ie/news-media/press-releases/press-release-economic-letter-population-change-and-housing-demand-in-ireland-10-december-2019#:~:text=Today%20the%20Central%20Bank%20of,Thomas%20Conefrey%20and%20David%20Staunton.&text=Assuming%20a%20lower%20level%20of,per%20annum%20out%20to%202030

Link to GeoDirectory Report: https://www.geodirectory.ie/getattachment/Knowledge-Centre/Reports-Blogs/GeoView-Residential-Buildings-Report-Q2-2020/GeoDirectory-GeoView-Residential-Issue-13-2.pdf?lang=en-IE

Link to CSO changes to population of Ireland between 2011 and 2016: https://statbank.cso.ie/px/pxeirestat/Statire/SelectVarVal/Define.asp?maintable=E3006

Link to CSO vacant homes in Ireland: https://www.cso.ie/px/pxeirestat/Statire/SelectVarVal/Define.asp?maintable=E1071

brisan

Thespoofer wrote: »

At the end of the day, people in this country are obsessed with property ownership, for obvious reasons.
We've had posters on here saying where can they invest their money etc etc, as far as I can see it all comes back to property and always will.
With cash held in banks losing money, more and more people will begin to realise that money needs to be used.
And it will, inevitably, come back down to property.

And apart from the one property that they live in what will they do with the other properties that they buy ??

I already know your answer and it is one fraught with problems

Smouse156

Just noticing a few new builds selling for less than advertised asking price. This one Ashwood Hall, Malahide:

https://www.daft.ie/9128444

4 bed semis were asking 785k, now dropped to 775k but latest sale on PPR was for 756k (only sale this year for the semis).

The bigger detached houses (Normandy style) asking 1.05M have had 3 sales (all identical and in same row):

No 43: Sold 1.05M 6th Feb 2020
No 44: Sold 1.04M 19th June 2020
No 45: Sold 975k 17th July 2020

So it seems developers are definitely dropping prices at the higher end although not advertising the fact (still advertised 1.05M even though they’ll take 975k):

https://www.daft.ie/12553124

Has anyone else noticed this?

Hubertj

PropQueries wrote: »

Unfortunately no made up figures:

Link to Central Bank Net Migration Projections: https://centralbank.ie/news-media/press-releases/press-release-economic-letter-population-change-and-housing-demand-in-ireland-10-december-2019#:~:text=Today%20the%20Central%20Bank%20of,Thomas%20Conefrey%20and%20David%20Staunton.&text=Assuming%20a%20lower%20level%20of,per%20annum%20out%20to%202030

Link to GeoDirectory Report: https://www.geodirectory.ie/getattachment/Knowledge-Centre/Reports-Blogs/GeoView-Residential-Buildings-Report-Q2-2020/GeoDirectory-GeoView-Residential-Issue-13-2.pdf?lang=en-IE

Link to CSO changes to population of Ireland between 2011 and 2016: https://statbank.cso.ie/px/pxeirestat/Statire/SelectVarVal/Define.asp?maintable=E3006

Link to CSO vacant homes in Ireland: https://www.cso.ie/px/pxeirestat/Statire/SelectVarVal/Define.asp?maintable=E1071

What about their population increases between now and 2050? Is it wrong? Or are you just leaving that out as it doesn’t suit whatever point you’re trying to make?

Hubertj

PropQueries wrote: »

If Glenveagh just reduced their asking prices for apartments in Greystones from €495,00 to €385,000, I doubt there's many Irish emigrants returning to retire in Ireland. Their apartments in Greystones were directly aimed at this market and downsizers.

I think you have a misconception about older emigrants. Most don't really want to return to and retire in Ireland. They've made their life in whatever country they emigrated to and they're most likely staying there.

Did I mention older emigrants returning? No I didn’t. I referred to Irish people.

jetfiremuck

brisan wrote: »

And apart from the one property that they live in what will they do with the other properties that they buy ??

I already know your answer and it is one fraught with problems

I certainly wont trust money in the bank as what happened to GREECE where peoples savings were taken. Without any recourse either. At least with a property you have some capital appreciation and rent opportunity

brisan

Smouse156 wrote: »

Just noticing a few new builds selling for less than advertised asking price. This one Ashwood Hall, Malahide:

https://www.daft.ie/9128444

4 bed semis were asking 785k, now dropped to 775k but latest sale on PPR was for 756k (only sale this year for the semis).

The bigger detached houses (Normandy style) asking 1.05M have had 3 sales (all identical and in same row):

No 43: Sold 1.05M 6th Feb 2020
No 44: Sold 1.04M 19th June 2020
No 45: Sold 975k 17th July 2020

So it seems developers are definitely dropping prices at the higher end although not advertising the fact (still advertised 1.05M even though they’ll take 975k):

https://www.daft.ie/12553124

Has anyone else noticed this?

I know of one small development OF 6 houses (just under the million ) where 3 sold quick and the other 3 dropped in price but the developer was open to offers

PPR shows prices ex VAT
What is the VAT rate on new builds

palmcut

awec wrote: »

Genuine question, did you read the article?

Loss making since 2016. 14 million euro debt for a company that hasn't made a bean in 4 years is a bit whacky. This was not a healthy business killed by covid.

I would actually be curious how a pharmacy runs up that sort of debt.

Their KPIs were woeful. They were grossly overstocked. Their rents were too high. Most of their properties were upward rent only. At least 7 of their pharmacies were loss making all the time. A number of their expansion efforts failed for different reasons including poor locations. (their pharmacy in Galway for example) Their expenses were way out of kilter because of the high rents and other reasons. They missed several payments on their loans. Basically poor business decisions and poor management led to their downfall.
Some of their pharmacies are excellent but the examiner will have to close the lemons.

Cyrus

Smouse156 wrote: »

Just noticing a few new builds selling for less than advertised asking price. This one Ashwood Hall, Malahide:

https://www.daft.ie/9128444

4 bed semis were asking 785k, now dropped to 775k but latest sale on PPR was for 756k (only sale this year for the semis).

The bigger detached houses (Normandy style) asking 1.05M have had 3 sales (all identical and in same row):

No 43: Sold 1.05M 6th Feb 2020
No 44: Sold 1.04M 19th June 2020
No 45: Sold 975k 17th July 2020

So it seems developers are definitely dropping prices at the higher end although not advertising the fact (still advertised 1.05M even though they’ll take 975k):

https://www.daft.ie/12553124

Has anyone else noticed this?

Often in developments with identical houses there will be different prices .

Aspect being on differentiation, is there’s a terrace end of terrace will be more expensive, if some ads have bigger gardens they will cost more.

Or they may have just dropped the prices although seems strange given how close the sales are together.

Looking at the site plan 43-45 all certainly look the same ( with 45 having less space out front ) . I don’t see where the other one for sale is

PropQueries

Hubertj wrote: »

What about their population increases between now and 2050? Is it wrong? Or are you just leaving that out as it doesn’t suit whatever point you’re trying to make?

As per the Central bank report, the whole future demand for housing in Ireland is based on continued net migration of 30,000 per annum indefinitely. As per the the Census 2016, the population of 0-34 year olds decreased by c. 72,000 between 2011 and 2016. This is the majority of the potential natural house buying group and it was down by c. 72,000.

Therefore, all future demand for housing is based on the c. 30,000 net migration figures from the Central Bank, and these figures are now out the window for the next 5 years at a minimum due to Covid.

There's no need for new workers in the hospitality sector. There's no need for more construction workers as the existing workers will just move from building offices and student accommodation to residential units (if they're needed). Google, Facebook etc. have probably reached near the maximum amount they will need to employ. There's not that many more Googles, Facebooks etc. left in the world.

pearcider

awec wrote: »

Of course it matters. A business that was doomed to failure going tits up is a completely different prospect to a viable, healthy business being killed off in the space of 6 months.

In the context of property prices it’s still just one more headwind.

brisan

jetfiremuck wrote: »

I certainly wont trust money in the bank as what happened to GREECE where peoples savings were taken. Without any recourse either. At least with a property you have some capital appreciation and rent opportunity

First part not guaranteed ,ask anybody who bought 04-07
Second fraught with difficulties and may give a negative yield

awec

pearcider wrote: »

In the context of property prices it’s still just one more headwind.

No it isn't. Non-viable, debt ridden businesses are wound up all the time. Boom time, bust time, it's always happening.

Hubertj

pearcider wrote: »

Does it actually matter? The recession was going to hit Covid or no Covid. The Federal Reserve reversed the taper of their balance sheet in September 2019 as they saw instability in the world banking system. Look it up if you don’t believe me.

The property market is like an oil tanker. It does not turn on a dime. It’s a lagging indicator since it’s illiquid. The drops will begin to accelerate now though you can bet on that.

What does reversed taper mean? They slowed quantitative easing but in September 2019 thought something was wrong so increased it again to provide additional support?

HotDudeLife

neutral guy wrote: »

When rents will 3-5 times cheaper then pay mortgage nobody will take a mortgage
Dublin are flooded with property for rent and supply are/will continue rising
This just a start
The many land lords will avoid bring prices down because they are trapped with maximum of 4 per cent per year price increase
But when mortgage holiday will be ends for them they will have choice or reduce rent and get rent to pay mortgage or pay mortgage for house with empty rooms
There will be total mess in shared property were half rooms will be empty and land lord will have pay mortgage for full house
That is one from example how low paid workers which lost jobs in retail and hospitality will massively affect the property market

Could be true, a relative of mine just got around 17% rent reduction on their new lease - Dublin City Center

Albeit, they are good tenants and have been there 4 years.

Bubbaclaus

People expecting large 50% drops will be kept waiting I'd say. The situation is very different to a decade ago.

People will still need places to live and the level of construction will slow a lot if prices start dropping by 10%. Low supply will mean there will be enough demand for that limited supply to prop prices up and keep the decreases minimal.

In our last crisis there was too many houses. People trying to compare just don't seem to be up to speed on the vastly different scenario this time around.

neutral guy

JimmyVik wrote: »

No money to be made in property now. And with huge risk attached to it now who would invest in it.

Me for example ! I will buy property for living not for renting and I was saving last 10 years for it.The only thing I will buy property with reduced price up to 50 per cent only and I not gona pay today price.So there is plenty place for market to fall ! Up to the level when people will start believe this is it/no more/bottom

neutral guy

Bubbaclaus wrote: »

People expecting large 50% drops will be kept waiting I'd say. The situation is very different to a decade ago.

People will still need places to live and the level of construction will slow a lot if prices start dropping by 10%. Low supply will mean there will be enough demand for that limited supply to prop prices up and keep the decreases minimal.

In our last crisis there was too many houses. People trying to compare just don't seem to be up to speed on the vastly different scenario this time around.

In 2007 I heard same songs ! In this crisis we will have even more houses ! Built up to 2007 and up to 2020 as well !

Bubbaclaus

neutral guy wrote: »

In 2007 I heard same songs !

Very good. As I said, there is no economic similarities between then and now. Yet I'm sure you will continue to compare anyway.