Irish Property Market 2020 Part 2

fliball123

dor843088 wrote: »

Reselling these homes will not qualify for help to sell
The house is no longer brand new
The property market is significantly weaker than when most of these properties were bought.

Negative Equity

Can you prove this? So by your calcs ..These houses have dropped by at least 10% (First time buyers deposit) + the 30k from the First time buyers scheme. Can you show me one property in this category?

fliball123

KennisWhale wrote: »

I do not think we can say that we have had the covid event as of yet considering the government and central banks are still supporting the economy and markets. Until restrictions are eased and accompanying economic supports are wound down, the covid shock will be delayed.

In the quarter that everything is unfrozen we will start to see the fallout in the economy, which will only then start to affect the housing market, then a couple quarters later we will see the property market data. At this stage, best guess is Q2 2021 (April, 2021, at the start of the new tourism season) when the economy is unfrozen which means people are getting back to their jobs and will find out if they can still be paid the same amount / given the same number of hours, if they are even still needed by their company. The covid impact on housing would start to show in the quarterly reports after this (so Q3 reports onwards).

We may not have had the fallout yet but the event is definitely here just try and go to for a pint and you will see .. You could be right but I still think it is 12 months away due to the budget keeping money in peoples pockets

donnaille

dor843088 wrote: »

Reselling these homes will not qualify for help to sell - True
The house is no longer brand new - True
The property market is significantly weaker than when most of these properties were bought. - too early to tell, some of these properties were bought today/yesterday/last week

Negative Equity

Responses in the quoted text, but main thing to highlight - this isn't negative equity. Negative equity is when the mortgage on the property is greater than the value of the property.

dor843088

fliball123 wrote: »

Can you prove this? So by your calcs ..These houses have dropped by at least 10% (First time buyers deposit) + the 30k from the First time buyers scheme. Can you show me one property in this category?

https://www.independent.ie/business/personal-finance/property-mortgages/glenveagh-cuts-prices-on-luxury-properties-in-dublin-and-wicklow-to-accelerate-sales-39513776.html

dor843088

donnaille wrote: »

Responses in the quoted text, but main thing to highlight - this isn't negative equity. Negative equity is when the mortgage on the property is greater than the value of the property.

I know all too well what negative equity is believe me. Buying a brand new home in a seriously weakening market with a help to sell grant that will not be there on resale ? This is basically how to get yourself into negative equity 101.

Hubertj

Shoden wrote: »

Here's an interesting video on the subject just posted by Shane Fleming: https://youtu.be/H_rSohgB6JU

watched this thank you. Very interesting insights provided in what i thought was an objective manner.

Marius34

dor843088 wrote: »

I know all too well what negative equity is believe me. Buying a brand new home in a seriously weakening market with a help to sell grant that will not be there on resale ? This is basically how to get yourself into negative equity 101.

FTB competes with STB and other buyers, who are not eligible for HTB grants.
It makes no sense that resale properties are 30K lower.
If new house cost 330K, and resale price is 300K, I'm confident non-HTB grant buyers would choose the second one, no point to compete for same quality more expensive ones.

dor843088

Marius34 wrote: »

FTB competes with STB and other buyers, who are not eligible for HTB grants.
It makes no sense that resale properties are 30K lower.
If new house cost 330K, and resale price is 300K, I'm confident non-HTB grant buyers would choose the second one, no point to compete for same quality more expensive ones.

First time buyers are the overwhelming majority of buyers in new developments. In fact they are the majority of mortgages drawn down full stop. Buildings do not remain static in value they depreciate over time. The land beneath it on the other hand is different. All other things being equal a second hand house is worth less than a brand new one . And that's before you remove a 30k grant to buy the new one.

poker--addict

Hubertj wrote: »

watched this thank you. Very interesting insights provided in what i thought was an objective manner.

I am not sure i see this the same way, and I am all for decreases.

Looking at price changes seems flawed - most people and agents start ambitious with their asking price, so surely the natural tendency is for asking price changes on the whole to average out as a downward trend, even in a solid marketplace? I read nothing into a -2% reduction in asking price changes.

The very fact that there are still loads of properties still increasing their asking price is a bigger indicator to me that upward pressure remains. I would imagine asking price increases would reduce to practically zero in a bear enviroment.

To be fair, he does explain it is flawed after showing loads of them

Hubertj

poker--addict wrote: »

I am not sure i see this the same way, and I am all for decreases.

Looking at price changes seems flawed - most people and agents start ambitious with their asking price, so surely the natural tendency is for asking price changes on the whole to average out as a downward trend, even in a solid marketplace? I read nothing into a -2% reduction in asking price changes.

The very fact that there are still loads of properties still increasing their asking price is a bigger indicator to me that upward pressure remains. I would imagine asking price increases would reduce to practically zero in a bear enviroment.

To be fair, he does explain it is flawed after showing loads of them

yes thats what i meant. I thought he explained how "avergae prices" and "asking prices" are probably not the best metrics etc.
Good to get some clarity after trying to understand some of the stuff that gets posted in here.

Marius34

dor843088 wrote: »

First time buyers are the overwhelming majority of buyers in new developments. In fact they are the majority of mortgages drawn down full stop. Buildings do not remain static in value they depreciate over time. The land beneath it on the other hand is different. All other things being equal a second hand house is worth less than a brand new one . And that's before you remove a 30k grant to buy the new one.

No, it's only around half of New build sales goes to Help-to-Buy buyers
Don't forget cash buyers as well.
And I'm not talking about old houses, I'm talking about recent build's in new estates, as you spoke that it loose 30k in value after it is bought.

sanfranbest

Shoden wrote: »

Here's an interesting video on the subject just posted by Shane Fleming: https://youtu.be/H_rSohgB6JU

Shane Fleming is an experienced EA,
Watch his video, very informative.

Springy Turf

For those quoting statistics please quote your source (lots of posters). And advice for everyone else including myself - disregard any stats that are trotted out without a source.

combat14

the good news is that there wont be a vaccine for all in the eu till 2022 .. so we all can keep saving vast sums of money during lockdown to perpetuate the high rents and ever increasing irish property prices that never fall

I'm sure some here will be delighted ....

2022 before a Covid vaccine is available to all in EU

https://www.rte.ie/news/coronavirus/2020/1027/1174213-eu-covid-vaccine/

markjbloggs

There will not be sufficient doses of a coronavirus vaccine to cover the wider EU population before 2022, officials said today in an internal meeting.

First line of that RTE 2022 report, pathetic journalism. Awful stuff

cnocbui

markjbloggs wrote: »

There will not be sufficient doses of a coronavirus vaccine to cover the wider EU population before 2022, officials said today in an internal meeting.

First line of that RTE 2022 report, pathetic journalism. Awful stuff

That's perfectly fine, there don't need to be.

cubatahavana

cnocbui wrote: »

That's perfectly fine, there don't need to be.

Exactly, let the most vulnerable have it first. I’d say citizens over 65 first.

silver2020

dor843088 wrote: »

I know all too well what negative equity is believe me. Buying a brand new home in a seriously weakening market with a help to sell grant that will not be there on resale ? This is basically how to get yourself into negative equity 101.

Maybe because you have experienced negative equity, you have a one sided view

I bought a car in March - it was in negative equity the minute I drove it out the garage.

Homes are long term purchases.

Here's a fact.

If you bought in 2005/2006 and got a tracker mortgage of less than 1.25% and the extended interest tax relief, you will have spent substantially less over 30 years than someone buying the EXACT same property 30% lower in 2012 who did not get max tax relief and could not get a tracker.


A 300.000 mortgage will cost 1250 fixed for the next 10 years. At the end of 10 year the balance will be 225,000.

Or sit out and spend 20k a year rent?

I bought an investment property earlier this month, I'm looking for another couple over the next few months. I don't fear temporary ups and downs, but there is nothing suggesting any type of deep drop (I bought my first property 32 years ago, so seen many ups and downs)

cnocbui

cubatahavana wrote: »

Exactly, let the most vulnerable have it first. I’d say citizens over 65 first.

That wasn't quite what I meant. I meant you only really need enough to cover high urban density areas of Europe and enough people to get herd immunity, but if it's safe for the vulnerable, that approach would work too.

HopsAndJumps

cnocbui wrote: »

That wasn't quite what I meant. I meant you only really need enough to cover high urban density areas of Europe and enough people to get herd immunity, but if it's safe for the vulnerable, that approach would work too.

Most of the covid vaccines are targeting an efficacy of 50%-60%.

Even if the old and vulnerable are all vaccinated, 50%-40% of them can still catch the virus.

We won't be to a back to normal.situation for a while though things will get better. (I hope/need)

Graham

Mod Note

folks, there's a dedicated forum for the discussion of Coronavirus (COVID-19) if you'd like to continue that discussion.

dor843088

silver2020 wrote: »

Maybe because you have experienced negative equity, you have a one sided view

I bought a car in March - it was in negative equity the minute I drove it out the garage.

Homes are long term purchases.

Here's a fact.

If you bought in 2005/2006 and got a tracker mortgage of less than 1.25% and the extended interest tax relief, you will have spent substantially less over 30 years than someone buying the EXACT same property 30% lower in 2012 who did not get max tax relief and could not get a tracker.


A 300.000 mortgage will cost 1250 fixed for the next 10 years. At the end of 10 year the balance will be 225,000.

Or sit out and spend 20k a year rent?

I bought an investment property earlier this month, I'm looking for another couple over the next few months. I don't fear temporary ups and downs, but there is nothing suggesting any type of deep drop (I bought my first property 32 years ago, so seen many ups and downs)

Or maybe because I have experienced negative and positive equity I have a balanced view and dont think that no matter what happens property prices never ever go down. From reading some poster in this forum you would think that property is just on a ratchet system to the moon.

Mad_maxx

silver2020 wrote: »

Maybe because you have experienced negative equity, you have a one sided view

I bought a car in March - it was in negative equity the minute I drove it out the garage.

Homes are long term purchases.

Here's a fact.

If you bought in 2005/2006 and got a tracker mortgage of less than 1.25% and the extended interest tax relief, you will have spent substantially less over 30 years than someone buying the EXACT same property 30% lower in 2012 who did not get max tax relief and could not get a tracker.


A 300.000 mortgage will cost 1250 fixed for the next 10 years. At the end of 10 year the balance will be 225,000.

Or sit out and spend 20k a year rent?

I bought an investment property earlier this month, I'm looking for another couple over the next few months. I don't fear temporary ups and downs, but there is nothing suggesting any type of deep drop (I bought my first property 32 years ago, so seen many ups and downs)

houses declined in price by more than 55% between 2006 and 2012

Donald Trump

jill_valentine wrote: »

You're also assuming they haven't lived anywhere, paid any bills, and worked in unbroken employment in that time. So I would say quite unrealistic, yes.

In the real world, someone who left college ten years ago will have almost certainly been let go or had their employer go bust at least once and worked at least one zero hours contract in that time, a period when they would have been glad to get 200 a week, never mind save it.

For perspective, ten years ago I was working in a video game shop sifting through CVs from engineers and chemists. I got a quote for car insurance around the same time for 7 grand a year, and we all spent quite a lot of time in the work kitchen when we were off because the tea and bread was free.

100k savings for a post 2007 thirty year old is fantasy land. Under present conditions most people in that age group will have their first shot at home ownership when their parents die.

The obvious question is then what was your choice regarding the car? Did you insure it for 7k?


People convince themselves that they *need* things that just make their life more comfortable. 7k on car insurance probably equates to well over 10k a year running costs on a car. Spending that to be able to drive a few minutes down the road to work on your off days to eat free bread seems the height of madness to me

Graham

Mod Note

folks, a friendly reminder this is the Accommodation & Property forum.

If you'd like to discuss the price of Avocado Toast, Phones, Car Insurance or Nikes, please start a new thread in the appropriate forum.

dor843088

https://www.irishexaminer.com/news/arid-40071143.html



Rebuilding Ireland loans drop 50% . Demand has fallen off a cliff

Thierry12

dor843088 wrote: »

https://www.irishexaminer.com/news/arid-40071143.html



Rebuilding Ireland loans drop 50% . Demand has fallen off a cliff

Not surprised

Most people using those schemes are doing jobs which don't exist anymore over this lockdown farce

dor843088

Thierry12 wrote: »

Not surprised

Most people using those schemes are doing jobs which don't exist anymore over this lockdown farce

Terrifying reading if you're a developer with a lot of units to shift.

JimmyVik

Donald Trump wrote: »

I observe that people tend to spend a sizeable amount on income on crap. If you think it's not realistic to save it then that is your opinion. I know that it is not impossible. A reasonable cross section of society in their 20's could save 200 quid a week. You wouldn't need to be on 80k a year to do so.

If you went to college then you probably survived on very little until you were say 22. If you stretched out that living like a student for say 2 years while working on a fairly low paid job, you would still be easily able to save 200 a week. No?

Not sure why you seem to think that prepay phones work out as cheaper than billpay btw.

New mortgage about to be drawn down in the next few weeks so that will be a necessary expense but

:eek:Reading through the threads here had me curious to know how much money I spend in a year that I dont actually need to spend. Basically booze, gadgets, fags, phone, clothes, eating out, nice car, and holidays, lots of holidays and weekends away.

It frightened the life out of me when I totaled it up.
Well over €30K. Of course it wont be near that in 2020 because most of those things are not even possible in 2020.
But i think if I took only one or two holidays a year, cut down on the booze and smokes and changed my car to a more sensible one I could get that to about a quarter of it and not really notice the cut back.

Then I added up all the necessary things I have to spend money on. Mortgage, electricity, car tax, insurance, property tax, etc and it came to just over €15k.

But I am going to have a major blowout when the virus is gone. Im going to eat out twice a week, go on a big foreign holiday and go to the pub every night. Just to get 2020 out of my system.

I should have bought a bigger house

TheSheriff

dor843088 wrote: »

https://www.irishexaminer.com/news/arid-40071143.html



Rebuilding Ireland loans drop 50% . Demand has fallen off a cliff

Demand from those on generally lower incomes has fallen off a cliff..........

I would have assumed this is the case since last March. To be expected.