Irish Property Market 2020 Part 2

JimmyVik

I wish I had bought a house in 2007.
Sure id have been in negative equity for many years but id be almost half way through the mortgage by now, not to mention paying far less mortgage than rent for most of that.

For most of the pandemic
I was going to rent forever ... then
Half of me is waiting for a 10% drop to buy ... then
The other half thinks back to "if only I had bought in 2007", and wants to buy straight away ...

So cut to today
I actually have an offer in on a house I like at the moment.
I tried 10% below, it was rejected, I tried asking price but that was rejected (That was 2 weeks ago). Now there is another bidder on the scene. I made my latest offer of 5% over asking yesterday morning. The wait goes on.

hometruths

JimmyVik wrote: »

I wish I had bought a house in 2007.
Sure id have been in negative equity for many years but id be almost half way through the mortgage by now, not to mention paying far less mortgage than rent for most of that.

For most of the pandemic
I was going to rent forever ... then
Half of me is waiting for a 10% drop to buy ... then
The other half thinks back to "if only I had bought in 2007", and wants to buy straight away ...

So cut to today
I actually have an offer in on a house I like at the moment.
I tried 10% below, it was rejected, I tried asking price but that was rejected (That was 2 weeks ago). Now there is another bidder on the scene. I made my latest offer of 5% over asking yesterday morning. The wait goes on.

Best of luck with it.

TheSheriff

JimmyVik wrote: »

I wish I had bought a house in 2007.
Sure id have been in negative equity for many years but id be almost half way through the mortgage by now, not to mention paying far less mortgage than rent for most of that.

For most of the pandemic
I was going to rent forever ... then
Half of me is waiting for a 10% drop to buy ... then
The other half thinks back to "if only I had bought in 2007", and wants to buy straight away ...

So cut to today
I actually have an offer in on a house I like at the moment.
I tried 10% below, it was rejected, I tried asking price but that was rejected (That was 2 weeks ago). Now there is another bidder on the scene. I made my latest offer of 5% over asking yesterday morning. The wait goes on.

Id be holding tight now at your offer, wouldn't increase any further. They may come back to you.

Good luck with it.

Leozord

This house got a good discount alright: https://www.daft.ie/dublin/houses-for-sale/dublin-8/1-coolevin-road-long-lane-dublin-8-dublin-2609839/

Vieira82

JimmyVik wrote: »

I wish I had bought a house in 2007.
Sure id have been in negative equity for many years but id be almost half way through the mortgage by now, not to mention paying far less mortgage than rent for most of that.

For most of the pandemic
I was going to rent forever ... then
Half of me is waiting for a 10% drop to buy ... then
The other half thinks back to "if only I had bought in 2007", and wants to buy straight away ...

So cut to today
I actually have an offer in on a house I like at the moment.
I tried 10% below, it was rejected, I tried asking price but that was rejected (That was 2 weeks ago). Now there is another bidder on the scene. I made my latest offer of 5% over asking yesterday morning. The wait goes on.

Good luck.

I was jobless in the last crash, got a job in Ireland in an American company and moved here in 2011. Saved for five years until my rent went up by 350€. Tried to get a mortgage on an apt. in Cobh but since I had stopped saving for two months (because of the rent increase) was denied mortgage, despite having a stable job, no debts and the mortgage monthly repayment being 500€ a month (rent was 1260€).

Rent was actually cheaper then the average in Cork so if I tried to move out I'd get hit by even higher rent. So started to see if I could have an extra income, started my own business and started working weekends. After 6 months working both jobs I realized I could make more money from my business than being employed so I left to dedicate full time to my business. To do so I divided my savings in half, half to pay rent for a year, the other half to invest in the business, any profits would be for living and saving.

Was tough but by the end of 2019 had the chance to move in with my partner and even better move to the countryside, so less cost of living and a stable business. 2020 started really good, Jan, Feb, and even the two first weeks of March I tripled what I made the previous two years but as you know with any business there is a small amount of debt, so tried to save and repay these debts at the same time until covid hit...

My business died completely so got into PuP and with that amount of money been trying to slowly pay all the debts and save as much as possible, last week they miscalculated the PuP for myself, they took into account 2018 tax instead of 2019 so I got slashed 100€ out of it. Been trying to get a work from home for the last few months (I have Serious Asthma since I was 6 months old so in theory I should be cocooning since March) but no luck so far.

Me and my partners hope to save around 10k in two years at least to try and get something in the countryside. Even if it's not in good condition atm and we can work it up, maybe it's all fantasy but well at least we can dream...

Good luck again, I hope you get the house!

Otherwise, I'd tell you to wait as I think the crash will happen and you could get a better house for less.

If I had savings atm I would definitely wait until 2021 to see what will happen. However on the other hand I do believe the market prices are virtually inflated by big private vulture funds and that could mean prices will not go down at all as they'll prefer to leave these houses empty waiting for the economic recovery and at the same time buy any cheap property they can find...

wassie

JimmyVik wrote: »

I wish I had bought a house in 2007.
Sure id have been in negative equity for many years but id be almost half way through the mortgage by now, not to mention paying far less mortgage than rent for most of that.

For most of the pandemic
I was going to rent forever ... then
Half of me is waiting for a 10% drop to buy ... then
The other half thinks back to "if only I had bought in 2007", and wants to buy straight away ...

So cut to today
I actually have an offer in on a house I like at the moment.
I tried 10% below, it was rejected, I tried asking price but that was rejected (That was 2 weeks ago). Now there is another bidder on the scene. I made my latest offer of 5% over asking yesterday morning. The wait goes on.

You've posted a lot on your regret at not buying pre-GFC and that you would be better off now. I think it's a great example to make one consider if now is the right time for them to buy.

But have you considered what the stress is like having years of dealing with negative equity, not being able meet payments, engaging with banks who themselves were overwhelmed in dealing with non-performing loans.

You only need to trawl through some of the old threads from 2010-2015 on askaboutmoney.com to get an idea of how people's lives were turned upside down. Sure you may have ultimately somewhat financially better off, but at what cost to your health & well being?

There is freedom in being debt free and being able to walk away from your situation without financial consequence if circumstances dictated. You are now in a position to buy into a market financed by prudent lending that I would describe as being a hell of a lot more functional that in 2007.

fliball123

wassie wrote: »

You've posted a lot on your regret at not buying pre-GFC and that you would be better off now. I think it's a great example to make one consider if now is the right time for them to buy.

But have you considered what the stress is like having years of dealing with negative equity, not being able meet payments, engaging with banks who themselves were overwhelmed in dealing with non-performing loans.

You only need to trawl through some of the old threads from 2010-2015 on askaboutmoney.com to get an idea of how people's lives were turned upside down. Sure you may have ultimately somewhat financially better off, but at what cost to your health & well being?

There is freedom in being debt free and being able to walk away from your situation without financial consequence if circumstances dictated. You are now in a position to buy into a market financed by prudent lending that I would describe as being a hell of a lot more functional that in 2007.

On the flip side he had to pay rent just because he had no mortgage this does not mean the person had no debts or the freedom from debts. Having a mortgage would of meant they could of stopped paying the mortgage and lived for 10 years + with out a payment I know what decision I would of made but its only looking back in hindsight no one knew the lefties were going to force governments into crazy actions like protecting the family home no matter how much you are in debt and how long you have stopped paying your mortgage.

KnowingWind

Here is my latest thought process.
Everything is set up for significant property drops.

• People are losing jobs
• Massive reduction in tourism
• Reduction in immigration
• Big levels of debt worldwide
• Recessionary environment
• Cities no longer as desirable which usually are main culprits for inflating prices
• Less interest by investors
• Worldwide issues like Brexit and US unrest.

The one thing to keep property prices stable is lack of supply.
I just dont buy it. Does this mean all the government has to do to keep prices going up or stable forever is artificially suppress supply. Seems far fetched to me.

Browney7

JimmyVik wrote: »

I wish I had bought a house in 2007.
Sure id have been in negative equity for many years but id be almost half way through the mortgage by now, not to mention paying far less mortgage than rent for most of that.

For most of the pandemic
I was going to rent forever ... then
Half of me is waiting for a 10% drop to buy ... then
The other half thinks back to "if only I had bought in 2007", and wants to buy straight away ...

So cut to today
I actually have an offer in on a house I like at the moment.
I tried 10% below, it was rejected, I tried asking price but that was rejected (That was 2 weeks ago). Now there is another bidder on the scene. I made my latest offer of 5% over asking yesterday morning. The wait goes on.

Youve said a few times you wish you bought in 07. Is it not just as valid to say you wish you bought in 2012? Or was this option not open to you - ie you would have lost mortgage approval?

MacronvFrugals

Yara Rich Camouflage wrote: »

Surely that asking price was entered wrong? 500k for that? what planet are these EAs living on?

The poorly done roof really plays on my OCD

L1011

Its a big enough house in an in-demand area, but its a poor layout, the bathroom has no windows (roof light it seems), and the thing that looks like a side entrance is actually another house entirely as far as I can tell. The price is probably still delusional.

fliball123

KnowingWind wrote: »

Here is my latest thought process.
Everything is set up for significant property drops.

• People are losing jobs
• Massive reduction in tourism
• Reduction in immigration
• Big levels of debt worldwide
• Recessionary environment
• Cities no longer as desirable which usually are main culprits for inflating prices
• Less interest by investors
• Worldwide issues like Brexit and US unrest.

The one thing to keep property prices stable is lack of supply.
I just dont buy it. Does this mean all the government has to do to keep prices going up or stable forever is artificially suppress supply. Seems far fetched to me.

Far fetched or not this is what is currently happening.

KnowingWind

fliball123 wrote: »

Far fetched or not this is what is currently happening.

Yeah, Im more talking about in the next year or so.

Cyrus

KnowingWind wrote: »

Yeah, Im more talking about in the next year or so.

everyone projecting big price drops are talking about the future, because the ones they projected for right now havent happened yet

KnowingWind

Cyrus wrote: »

everyone projecting big price drops are talking about the future, because the ones they projected for right now havent happened yet

Exactly, only time will tell I guess.

JimmyVik

fliball123 wrote: »

On the flip side he had to pay rent just because he had no mortgage this does not mean the person had no debts or the freedom from debts. Having a mortgage would of meant they could of stopped paying the mortgage and lived for 10 years + with out a payment I know what decision I would of made but its only looking back in hindsight no one knew the lefties were going to force governments into crazy actions like protecting the family home no matter how much you are in debt and how long you have stopped paying your mortgage.

What happened with me was that I actually got a very cheap rent for about 3 years, but then as we all know it shot up.
Then of course family issues happened and I ended up single.
So i was paying half the rent on the wife and childs house and plus an apartment for myself.
Now I could afford it but it suck in me and I moved to a granny flat we built a good few years ago at my parents, just so that I could put more money away. So I had enough to buy outright or with a very small mortgage.

I was either going to emigrate for a while or buy, or invest (i knocked investing in property on the head too after I did my research. Just no way that will work in Ireland these days) . Then the pandemic happened and in truth i never really wanted to emigrate, so kept changing my mind. Rent, stay where i am, buy. Couldnt make up my mind.
So there is a house I really like that I put a bid on and we will see what happens. Its a big step, but im getting old and I have to do it some time
Or I could rent or stay in the granny flat

JimmyVik

Browney7 wrote: »

Youve said a few times you wish you bought in 07. Is it not just as valid to say you wish you bought in 2012? Or was this option not open to you - ie you would have lost mortgage approval?

Well it would be better to buy in 2012.
What i meant about 2007 is that all around me for years were saying dont buy, property will drop. It turned that they were right, but I still would have been better off buying ion 2007 even with the crash.


Basically im saying that I now see that if I had bought at the worst possible time in history to buy, I would be better off now than having not bought at that time.

Browney7

JimmyVik wrote: »

Well it would be better to buy in 2012.
What i meant about 2007 is that all around me for years were saying dont buy, property will drop. It turned that they were right, but I still would have been better off buying ion 2007 even with the crash.


Basically im saying that I now see that if I had bought at the worst possible time in history to buy, I would be better off now than having not bought at that time.

Fair enough and best of luck Jimmy!

thefridge2006

KnowingWind wrote: »

Here is my latest thought process.
Everything is set up for significant property drops.

• People are losing jobs
• Massive reduction in tourism
• Reduction in immigration
• Big levels of debt worldwide
• Recessionary environment
• Cities no longer as desirable which usually are main culprits for inflating prices
• Less interest by investors
• Worldwide issues like Brexit and US unrest.

The one thing to keep property prices stable is lack of supply.
I just dont buy it. Does this mean all the government has to do to keep prices going up or stable forever is artificially suppress supply. Seems far fetched to me.

My thinking also. it's all set up to be smashed. We haven't even had winter yet and another national lockdown could be on the cards. This is already far worse that the 08 crash and we're nowhere near the end of it all.
No matter what is happening with house prices currently, this can't be maintained. Majority of companies are losing money hand over fist and big lay offs are on the cards. Sure some companies are doing well but they are few and far between. This will be massive and take years for the economy to recover. buckle up

enricoh

KnowingWind wrote: »

Here is my latest thought process.
Everything is set up for significant property drops.

• People are losing jobs
• Massive reduction in tourism
• Reduction in immigration
• Big levels of debt worldwide
• Recessionary environment
• Cities no longer as desirable which usually are main culprits for inflating prices
• Less interest by investors
• Worldwide issues like Brexit and US unrest.

The one thing to keep property prices stable is lack of supply.
I just dont buy it. Does this mean all the government has to do to keep prices going up or stable forever is artificially suppress supply. Seems far fetched to me.

Someone posted a week or two ago that government money bought every second new build in Dublin and 40% of new builds in the country in the last year, through various charities, local authorities etc.
Surely with a 30bn hole in the balance sheet and estimated 20bn next year those figures have to drop.
The government is keeping prices high , without them in the market, prices would be slashed already.

Vieira82

KnowingWind wrote: »

Here is my latest thought process.
Everything is set up for significant property drops.

• People are losing jobs
• Massive reduction in tourism
• Reduction in immigration
• Big levels of debt worldwide
• Recessionary environment
• Cities no longer as desirable which usually are main culprits for inflating prices
• Less interest by investors
• Worldwide issues like Brexit and US unrest.

The one thing to keep property prices stable is lack of supply.
I just dont buy it. Does this mean all the government has to do to keep prices going up or stable forever is artificially suppress supply. Seems far fetched to me.

There is no lack of supply, there's a hoarding of properties by companies like Blackstone. Just put yourself in their business mindset, you have loads and loads of cash trillions and trillions of dollars that will easily keep you going through the worse of this crash. You don't need to sell your assets because you got your bases covered, all you need to do is use your trillions to buy more cheap property as soon as it hits the market.

There will be people with genuine problems to maintain their houses that will sell at a lower price and these companies will fall on them like "vultures" to enlarge their stock. This is why we will see a crash for us the little guy but the bigger fish will get even more money and even richer. This is already happening and it's called a K recovery. Essentially those with money will be able to get richer and richer.

Those that don't have it, or have limited savings will get poorer and poorer. Though luck for them essentially.

I can't post links but you can read it here: Private equity eyes industries crippled by coronavirus: ‘They have been waiting for this’: cnbc.com/2020/03/25/private-equity-eyes-coronavirus-hit-industries-theyve-been-waiting.html

Also on youtube if you can find the video by Economics Explained called The K Recovery.

This could be avoided with government intervention but I don't see that happening at a national level or European level, so that unrest and instability will be reflected here too, we already have a homelessness crysis that is about to be thrown into overdrive. But all will be well as long as Blackstone et all continue to make their billions...

In all of this I really hope I'm wrong as it's a grim future for a lot of people and will have effects on everything if there isn't a government intervention which seems poised to not happen.

MacronvFrugals

Does anyone know recent figures on the amount of BTL mortgages vs FTBs

I know in 2007 BOI gave more BTLs than FTBs.

JimmyVik

JimmyVik wrote: »

What happened with me was that I actually got a very cheap rent for about 3 years, but then as we all know it shot up.
Then of course family issues happened and I ended up single.
So i was paying half the rent on the wife and childs house and plus an apartment for myself...............

JimmyVik wrote: »

.......... but I still would have been better off buying ion 2007 even with the crash.


Basically im saying that I now see that if I had bought at the worst possible time in history to buy, I would be better off now than having not bought at that time.

If you bought in 2007 then you'd have been paying half the mortgage as the family issues would likely still have happened.

You'd be paying a big mortgage on a home for your ex. Not sure what the positives are there tbh.

Cantstandsya

Augeo wrote: »

If you bought in 2007 then you'd have been paying half the mortgage as the family issues would likely still have happened.

You'd be paying a big mortgage on a home for your ex. Not sure what the positives are there tbh.

It's complete nonsense. You have people on here saying that buying your "forever home" at the worst possible time is a fine thing to do. And while I don't agree, I can at least see the logic in it.

This story, on the other hand, seems bonkers and I can only imagine it is being written/posted to convince the poster himself, rather than anyone else.

Hulk Hands

JimmyVik wrote: »

What happened with me was that I actually got a very cheap rent for about 3 years, but then as we all know it shot up.
Then of course family issues happened and I ended up single.
So i was paying half the rent on the wife and childs house and plus an apartment for myself.

Had you bought the house in 2007, and then had the family issues, would you not have been stuck with a house in 2010 that you needed to sell but couldn't, and with massive negative equity? You've mentioned a lot of times in the thread that you would've been better off buying in 2007. That's understandable for you but a lot of circumstances have to come together to make that desirable and the vast majority of people who didn't buy pre-crash are delighted they didn't.

If you want to go back to college or lose your job, both of which happened to people in droves 2007-2012, you'd be in a bad place with negative equity. If you had to move due to work, family, emigration etc, you'd again be in a very bad place with negative equity. The people who lost out by not buying were the people who were in full employment from 07-20, who stayed in one place, didnt pull the trigger at any stage and got caught in the 14-20 rent trap. I'd imagine that segment is quite small.

It's completely understandable that people want to make a somewhat educated guess, whether their own or from perceived 'experts', about getting into the market at a good time. It'll make a huge difference to your quality of life. Getting it right is another matter

Hubertj

KnowingWind wrote: »

Here is my latest thought process.
Everything is set up for significant property drops.

• People are losing jobs
• Massive reduction in tourism
• Reduction in immigration
• Big levels of debt worldwide
• Recessionary environment
• Cities no longer as desirable which usually are main culprits for inflating prices
• Less interest by investors
• Worldwide issues like Brexit and US unrest.

The one thing to keep property prices stable is lack of supply.
I just dont buy it. Does this mean all the government has to do to keep prices going up or stable forever is artificially suppress supply. Seems far fetched to me.

Good summary. Only other thing to consider is that while immigration will fall there will likely be an increase in returning emigrants due to a global recession, Brexit etc. Will be interesting to see where the net figure lands.

JimmyVik

Augeo wrote: »

If you bought in 2007 then you'd have been paying half the mortgage as the family issues would likely still have happened.

You'd be paying a big mortgage on a home for your ex. Not sure what the positives are there tbh.

For my child actually.

Fair enough, even with a separation where im paying half the rent at the moment, I would be paying half a mortgage on it which would be far less than im paying now for half the rent.

Not really sure where all the hate is coming from guys.
Its easy to work out for yourselves if someone is better off now having rented since 2007 or having bought a house in 2007.

Just take an average house price from 2007. Add up the mortgage payments so far to date. And then add up the rent on a similar property to date. And remember you would have 13 years equity in the property too.Now im only taking 2007 as the worst possible scenario. You could take any other year you want, but it would be even better off for someone who bought.

Paddigol

Getting away from the micro and looking at the macro... At this point is it fair to say that the projected big dip in property prices predicted in mid March never came around?

And people are now predicting a big dip in the next 12 months based on the unknown impact of Covid in the immediate short term?

Are there many seasoned posters on here that believe there will be minimal change in prices in the next couple of years?

JimmyVik

Paddigol wrote: »

Getting away from the micro and looking at the macro... At this point is it fair to say that the projected big dip in property prices predicted in mid March never came around?

And people are now predicting a big dip in the next 12 months based on the unknown impact of Covid in the immediate short term?

Are there many seasoned posters on here that believe there will be minimal change in prices in the next couple of years?

This is the same as always.
People constantly predicting a crash and adjusting forward as it doesnt happen in their timeline. Some people constantly predicting no crash.
But the real truth is, nobody actually knows the future.
You would think they would have learned that by now.
People need to just get on with their lives and not be listening to what comes out of peoples crystal balls one way or the other.

Marius34

Paddigol wrote: »

Getting away from the micro and looking at the macro... At this point is it fair to say that the projected big dip in property prices predicted in mid March never came around?

And people are now predicting a big dip in the next 12 months based on the unknown impact of Covid in the immediate short term?

Are there many seasoned posters on here that believe there will be minimal change in prices in the next couple of years?

One of them is me, and it's based on fundamental reasons discussed before, why the price won't fall significantly (it may crash in 5 years or so, to far to be able to predict, but unlikely in the next 2 years).
The ones who say price crash are coming, from what I see looking mainly at the previous 2008 credit crisis, and only at the inputs that negatively affects property price, avoiding/misinterpreting other side of equation.