Irish Property Market 2020 Part 2

PropQueries

Timing belt wrote: »

What makes you think that credit will dry up anytime soon? Yes the banks have more Non performing loans and which will eat into capital reserves but there is no sign of any credit crunch coming (at least in residential property CRE may be different). In the short term all it will mean is mortgage rates will increase due to additional RWA’s

Didn't bank credit dry up fairly fast when they stopped approving mortgages to people on PUP payments?

hometruths

Timing belt wrote: »

What makes you think that credit will dry up anytime soon? Yes the banks have more Non performing loans and which will eat into capital reserves but there is no sign of any credit crunch coming (at least in residential property CRE may be different). In the short term all it will mean is mortgage rates will increase due to additional RWA’s

I suspect the impact of defaults/payment holidays/mortgage holidays will have a bigger impact on capital reserves than you may think.

I also think commercial property will be the stinking fish this time, just as 100% residential mortgages were last time.

But I am aware that EU/ECB may suddenly rewrite the capital reserve rules, and credit will not dry up any time soon.

The point of the article is more about the fact that it is the large supply of credit that is fuelling house prices not the tight supply of stock.

Hubertj

schmittel wrote: »

I thought some of the amateur economists might appreciate a different viewpoint of the dynamics at work in the market:



Irish house prices sky-high due to finance not scarcity

Article speaks a lot of sense even if tinged with bitter socialism. I was disappointed when I read the author was an advisor to Jeremy Corbyn. That worked out well. Must be very embarrassing to be associated with that era of Labour Party politics. As much to blame for Brexit as the rest of them.

hometruths

Hubertj wrote: »

Article speaks a lot of sense even if tinged with bitter socialism. I was disappointed when I read the author was an advisor to Jeremy Corbyn. That worked out well. Must be very embarrassing to be associated with that era of Labour Party politics. As much to blame for Brexit as the rest of them.

Me too.

Bits_n_Bobs

schmittel wrote: »

I thought some of the amateur economists might appreciate a different viewpoint of the dynamics at work in the market:



Irish house prices sky-high due to finance not scarcity

The argument that land is finite and inelastic is a bit bogus. Plenty of additional residential zoned land can be created within Dublin at the stroke of our planners pens. Otherwise interesting read.

cnocbui

Bits_n_Bobs wrote: »

The argument that land is finite and inelastic is a bit bogus. Plenty of additional residential zoned land can be created within Dublin at the stroke of our planners pens. Otherwise interesting read.

When I pointed out the size and number of golf courses in Dublin, a rope was purchased and a lynch mob formed.

Buy land, they aren’t making anymore of it. – Mark Twain

Tea drinker

Bits_n_Bobs wrote: »

The argument that land is finite and inelastic is a bit bogus. Plenty of additional residential zoned land can be created within Dublin at the stroke of our planners pens. Otherwise interesting read.

There's more spaces needed in Dublin not less - in most cases. The few open space amenities there are can become swamped as soon as there's a bit of sunshine. And besides that people need quality parks nearby (no driving or cycling required) they and their kids can avail of. Driving in Dublin is going to become increasingly difficult so best to have space nearby.

PropQueries

Tea drinker wrote: »

There's more spaces needed in Dublin not less - in most cases. The few open space amenities there are can become swamped as soon as there's a bit of sunshine. And besides that people need quality parks nearby (no driving or cycling required) they and their kids can avail of. Driving in Dublin is going to become increasingly difficult so best to have space nearby.

I think there's nothing but open space in Dublin. Plenty (too many in my opinion) of parks etc. I think the problem is that many parks are hidden behind estates, down a lane, out of view from the main roads etc.

virginmediapls

I check this thread every few months. Always the same. People with vested interest in property prices staying high saying "oooh the supply is too low, prices going up!". People with vested interest in prices dropping saying "oooh the economy is fecked, arse will fall out of it any day now!".

Bits_n_Bobs

Tea drinker wrote: »

There's more spaces needed in Dublin not less - in most cases. The few open space amenities there are can become swamped as soon as there's a bit of sunshine. And besides that people need quality parks nearby (no driving or cycling required) they and their kids can avail of. Driving in Dublin is going to become increasingly difficult so best to have space nearby.

I'm not talking about parks etc. There's plenty of land zoned industrial that could be rezo ed to residential. We have a giant factory in the middle of the city that could be CPO'd and rezoned (James Gate), freeing up a huge amount of space.

https://myplan.ie/zoning-map-viewer/ is a handy tool to see how Dublin is zoned.

BEdS_83

virginmediapls wrote: »

I check this thread every few months. Always the same. People with vested interest in property prices staying high saying "oooh the supply is too low, prices going up!". People with vested interest in prices dropping saying "oooh the economy is fecked, arse will fall out of it any day now!".

this is it, though they are both right and wrong at the same time

Schrödinger's cat, but Irish house market version ;0

neutral guy

virginmediapls wrote: »

oooh the economy is fecked, arse will fall out of it any day now!".

The problem is that bankers says that too,..Same as members of government and parlament of Ireland,.

Timing belt

neutral guy wrote: »

The problem is that bankers says that too,..Same as members of government and parlament of Ireland,.

Where have bankers, government said that arse is going to fall out of the property market as I have not seen that in any media reports.

neutral guy

Timing belt wrote: »

Where have bankers, government said that arse is going to fall out of the property market as I have not seen that in any media reports.

One of thousand


https://www.irishtimes.com/business/financial-services/property-price-drop-of-up-to-12-this-year-a-reasonable-assumption-mcdonagh-1.4269922?mode=amp

Timing belt

neutral guy wrote: »

One of thousand


https://www.irishtimes.com/business/financial-services/property-price-drop-of-up-to-12-this-year-a-reasonable-assumption-mcdonagh-1.4269922?mode=amp

A drop of 5-12% is not the arse falling out of the market. Plus that was in June and there have been no signs of such a drop yet

virginmediapls was correct in his statement.... Lol

Mic 1972

Timing belt wrote: »

A drop of 5-12% is not the arse falling out of the market. Plus that was in June and there have been no signs of such a drop yet

virginmediapls was correct in his statement.... Lol

that article if from June, it's now October and prices are still high

utmbuilder

flexcon wrote: »

Think I am being suckered into buying a new build in Cork.

Saved a good amount from the lockdown. First time buyer, combined income 100K mortgage 280K on a 365K house. The past few weeks have been stressful wondering to wait and save more, or just take the 30K goverment incentive before end of the year.

Mortgage advisors are meh. Maybe I am just asking too much or asking for the magic answer.

This thread has helped me awake at night to some extent!

As long as you know 100 out of 250 will be social tuath or Cluid happened everyone basically choose a house away from the affordable housing side.

PropQueries

Interesting advertorial in the Irish Independent today from the REA:

“At the moment, there’s huge take up on existing property so we will see ourselves running short of property in the near future,” Anthony states. “For example, new homes. The country’s developers delivered a 10-year high of 21,241 new homes in 2019, according to the latest figures from the Central Statistics Office. The number still falls short, though, of the proposed 34,000 units the Central Bank estimates will be required every year between now and 2030 to meet future demand.”

The recent ESRI report also referenced the same central bank report from December 2019 as the basis of a coming housing supply shortage.

However, neither the ESRI nor the REA advertorial draw much attention to the fact that the central bank report projections on future housing demand were based upon net inward migration remaining at c. 30,000 per annum between now and 2030.

That level of net inward migration is hardly likely given the current state of our hospitality and construction sectors which will most likely require less workers, or at the very least will not require many additional workers, for the foreseeable future.

Link to REA advertorial here: https://www.independent.ie/storyplus/people-want-to-move-faster-how-buying-a-home-has-changed-during-covid-19-39579412.html

theballz

Mic 1972 wrote: »

that article if from June, it's now October and prices are still high

Prices in Dublin will always be high, however, I have noticed a slight downturn in prices over the last month or so.

The_Conductor

theballz wrote: »

Prices in Dublin will always be high, however, I have noticed a slight downturn in prices over the last month or so.

What I've noticed- is nice 2-3 bed dwellings, are being marked down, and many of them are withdrawing from the market altogether.

The latest that I was personally looking at is a really nice 2 bed in Lucan that I was looking at for a retired couple

Link here: https://www.myhome.ie/residential/brochure/23-village-weir-lucan-dublin/4448151

Nice well maintained private development on Main Street Lucan
Under floor heating and A/C
Architecturally recovered oakbrick floor
Recently renovated to an exceptionally high standard
New kitchen, 2 new bathrooms, new carpentry throughout
Private garden at rear south and west facing with decking and a garden shed
2 parking spaces (unassigned)
80% of units in development are owner occupied
Asking was 275k

If spectacular units like that- are being withdrawn- I'd have to question what on earth is happening.........

PropQueries

The_Conductor wrote: »

What I've noticed- is nice 2-3 bed dwellings, are being marked down, and many of them are withdrawing from the market altogether.

The latest that I was personally looking at is a really nice 2 bed in Lucan that I was looking at for a retired couple

Link here: https://www.myhome.ie/residential/brochure/23-village-weir-lucan-dublin/4448151

Nice well maintained private development on Main Street Lucan
Under floor heating and A/C
Architecturally recovered oakbrick floor
Recently renovated to an exceptionally high standard
New kitchen, 2 new bathrooms, new carpentry throughout
Private garden at rear south and west facing with decking and a garden shed
2 parking spaces (unassigned)
80% of units in development are owner occupied
Asking was 275k

If spectacular units like that- are being withdrawn- I'd have to question what on earth is happening.........

Wouldn't many potential buyers (excl. investors) need to be employed either by the state or a multinational to receive mortgage approval at the moment.

As both these groups are already relatively well paid, they would most likely already own or be renting a proper apartment or house in Dublin.

If they buy, that just frees up their old apartment or house to the market for either rent or sale so the demand from these groups should have a relatively minor impact on the demand/supply dynamics for housing in Dublin.

In relation to sellers withdrawing properties from the market, maybe many sellers are waiting to see what incentives will be provided to home buyers in the budget.

If the expected budget incentives don't materialise in the way many sellers hope, there may be a significant increase in properties re-entering the market in the next few months. If the incentives aren't provided this year, there is little hope of better incentives in future years due to budget constraints.

The_Conductor

PropQueries wrote: »

Wouldn't many potential buyers (excl. investors) need to be employed either by the state or a multinational to receive mortgage approval at the moment.

As both these groups are already relatively well paid, they would most likely already own or be renting a proper apartment or house in Dublin.

And many potential buyers- haven't bought (for various reasons) and aren't constrained by mortgages.

The unit in particular that I was looking at- is for an Irish couple who have worked abroad for over 20 years, and want to retire in the Lucan area to be close to their grandchildren. They are not constrained by a mortgage. Similarly the seller- is an OAP who wants to move down the country to live with her daughter.

If a situation like that with a vested buyer and seller- can't be made work- what can be?

PropQueries wrote: »

If they buy, that just frees up their old apartment or house to the market for either rent or sale so the demand from these groups should have a relatively minor impact on the demand/supply dynamics for housing in Dublin.

So what if it frees up a rental unit? In the aforementioned case it wouldn't have done- however, that is a specific case.

PropQueries wrote: »

In relation to sellers withdrawing properties from the market, maybe many sellers are waiting to see what incentives will be provided to home buyers in the budget.

There is no suggestion of incentives to anyone to help them buy second-hand properties. All incentives thus far- have been to the new sector- and the soundbites from the Green Party have suggested that any incentives to the housing sector- other than new properties- will only be to upgrade and improve BER ratings- they will not be to support prices.

PropQueries wrote: »

If the expected budget incentives don't materialise in the way many sellers hope, there may be a significant increase in properties re-entering the market in the next few months. If the incentives aren't provided this year, there is little hope of better incentives in future years due to budget constraints.

I've not seen any sellers express any opinion (at all) regarding incentives for the secondhand sector. What have you heard? The suggestion is the HTB scheme will have to unwind- probably in October 2021- as EU Commission budget rules look set to be reintroduced.

Ironically- it looks like Ireland is going to be in the group of fiscally prudent countries- and is regularly listed alongside the Northern group, whether this accolade continues to apply- will be telling.

I don't 'get' how/why people expect additional supports in the budget- we have borrowed, and will be constrained in our future borrowing capacity- and we have an unemployment rate of circa 15% - and will have to support those people (and hopefully assist them to achieve gainful employment as quickly as possible). We have competing priorities which are higher up the pecking order- than giving wedges of cash to prospective buyers- and if they genuinely expect this largess to continue- they're in for a rude awakening.

TheSheriff

PropQueries wrote: »

Wouldn't many potential buyers (excl. investors) need to be employed either by the state or a multinational to receive mortgage approval at the moment.

As both these groups are already relatively well paid, they would most likely already own or be renting a proper apartment or house in Dublin.

If they buy, that just frees up their old apartment or house to the market for either rent or sale so the demand from these groups should have a relatively minor impact on the demand/supply dynamics for housing in Dublin.

In relation to sellers withdrawing properties from the market, maybe many sellers are waiting to see what incentives will be provided to home buyers in the budget.

If the expected budget incentives don't materialise in the way many sellers hope, there may be a significant increase in properties re-entering the market in the next few months. If the incentives aren't provided this year, there is little hope of better incentives in future years due to budget constraints.

Have to hand it to you PropQueries, you are able to turn and twist any post here to suit the concept that any minute now the housing market will collapse.

There have been absolutely zero reports of any budget incentives except HTB, nobody is waiting on these in the budget.....

Edit; conductor did this much more thoroughly above....

beauf

virginmediapls wrote: »

I check this thread every few months. Always the same. People with vested interest in property prices staying high saying "oooh the supply is too low, prices going up!". People with vested interest in prices dropping saying "oooh the economy is fecked, arse will fall out of it any day now!".

The thread and indeed this forum used to be more balanced. At this point if you want a reasoned discussion or debate you'd be better on another forum site.

Since Covid and lockdown this thread and indeed most of the general threads in accommodation and property are overrun with mostly one sided dogma about the sky falling in. It's been going to hapen any day now for 6 months. Not that the sky won't fall in, eventually it will, markets being cyclical etc. At this point it's broken these threads.

Balluba

virginmediapls wrote: »

I check this thread every few months. Always the same. People with vested interest in property prices staying high saying "oooh the supply is too low, prices going up!". People with vested interest in prices dropping saying "oooh the economy is fecked, arse will fall out of it any day now!".

Do you mind me asking Virginmedia what is your interest in property?
and do you think prices will go up or down for the remainder of quarter 4, 2020.
I am hoping to buy a house in Dublin myself.

Smouse156

The_Conductor wrote: »

And many potential buyers- haven't bought (for various reasons) and aren't constrained by mortgages.

The unit in particular that I was looking at- is for an Irish couple who have worked abroad for over 20 years, and want to retire in the Lucan area to be close to their grandchildren. They are not constrained by a mortgage. Similarly the seller- is an OAP who wants to move down the country to live with her daughter.

If a situation like that with a vested buyer and seller- can't be made work- what can be?



So what if it frees up a rental unit? In the aforementioned case it wouldn't have done- however, that is a specific case.



There is no suggestion of incentives to anyone to help them buy second-hand properties. All incentives thus far- have been to the new sector- and the soundbites from the Green Party have suggested that any incentives to the housing sector- other than new properties- will only be to upgrade and improve BER ratings- they will not be to support prices.



I've not seen any sellers express any opinion (at all) regarding incentives for the secondhand sector. What have you heard? The suggestion is the HTB scheme will have to unwind- probably in October 2021- as EU Commission budget rules look set to be reintroduced.

Ironically- it looks like Ireland is going to be in the group of fiscally prudent countries- and is regularly listed alongside the Northern group, whether this accolade continues to apply- will be telling.

I don't 'get' how/why people expect additional supports in the budget- we have borrowed, and will be constrained in our future borrowing capacity- and we have an unemployment rate of circa 15% - and will have to support those people (and hopefully assist them to achieve gainful employment as quickly as possible). We have competing priorities which are higher up the pecking order- than giving wedges of cash to prospective buyers- and if they genuinely expect this largess to continue- they're in for a rude awakening.

There is no way HTB will be withdrawn! That’s essentially handing 80+ seats to Sinn Fein in the next election. It will be the very last thing to go when they look for cuts

Idbatterim

Im starting to think, there wont be any meaningful fall, without economic collapse. Say 20,000 units built this year... how many re social housing bought by the state, to be given away free... as long as there are large numbers employed in very secure and mid to high paying jobs, and there are in ps, cs and loads of tech, finance, pharma jobs etc. Theyll be buying the relatively small number of units that come to the market...

Nothing happens quickly with the property market...

PropQueries

TheSheriff wrote: »

Have to hand it to you PropQueries, you are able to turn and twist any post here to suit the concept that any minute now the housing market will collapse.

There have been absolutely zero reports of any budget incentives except HTB, nobody is waiting on these in the budget.....

Edit; conductor did this much more thoroughly above....

He did ask "If spectacular units like that- are being withdrawn- I'd have to question what on earth is happening........."

I gave my opinion on a possible reason. What's your opinion on why sellers are withdrawing properties from the market?

The_Conductor

beauf wrote: »

The thread and indeed this forum used to be more balanced. At this point if you want a reasoned discussion or debate you'd be better on another forum site.

Since Covid and lockdown this thread and indeed most of the general threads in accommodation and property are overrun with mostly one sided dogma about the sky falling in. It's been going to hapen any day now for 6 months. Not that the sky won't fall in, eventually it will, markets being cyclical etc. At this point it's broken these threads.

Whether people like it or not- there is a supplyside constraint.
The extent of the supplyside constraint is open to discussion- however, the scarcity factor is providing support to the market, come what may.
Some people are leaving rental units and buying- however, they are being offset by landlords selling volumes of rental units- so there is not a commensurate increase in rental units as people buy.

There has been a vocal group with very obvious vested interests- shouting down anyone who disagrees with them. I'd strongly encourage anyone who feels that the charter governing posting in this forum is being breached- to use the report post function to bring it to the attention of moderators, and we can assess the specific posts as we're notified of them- and take appropriate action, as necessary.

The extent of some of the rather shrill dogma on display- can be quite startling at times- however, its by no means unique to this forum- have a look at other Irish property related forums, and there is similar behaviour on display. This doesn't make it right- and I am not trying to excuse it- it is however a reflection of the strange times we are in- and the manner in which some people seem to think that its fair and reasonable to use mediums such as boards to vent and let off steam.

Do please report any posts that you feel are above and beyond reasonableness. We're all volunteers, and are not online 24-7, so we do miss things- but if they're reported, they are highlighted to us.

Thankyou.

The_Conductor

Smouse156 wrote: »

There is no way HTB will be withdrawn! That’s essentially handing 80+ seats to Sinn Fein in the next election. It will be the very last thing to go when they look for cuts

If there was a proper restructuring of the sector- with local authorities forbidden to buy or rent from the private sector and forced to construct their own units- as they historically have done- and if it were managed in a logical manner with a detailed roadmap on a multi-year basis, it could very easily be sold to the public as in the public's best interests.

Even Eoin O'Broin is on the record supporting a ramp up of building public housing units- and moving away from the current model (which pushes out FTBs and inflates prices from the sector)- I don't see how Sinn Féin would not applaud such an approach.

It does require multi-year planning, alongside an orderly exit of the local authorities from their current private sector purchasing and rentals.