Irish Property Market 2020 Part 2

fliball123

donnaille wrote: »

Ok? I'm not disagreeing, the 90% efficacy figure could move in either direction as the trial continues, believe that is the rate at the first data read-out - so it is to be believed at this point of the trial. Point being, it's early to be calling that we are over the worst.

I said if reports are to believed so think of what I am trying to say if (and it is a big IF at the moment) if the vaccines are of that efficacy rate then Corona could be a thing of the past in a matter of months not years. But its all based on the trials holding up to a larger sample size already billions of these vaccines are being readied to be distributed throughout the globe so roll out will be a lot quicker than the norm as well.

omicron

I've noticed 2 factors where I live (Cork commuter town) from monitoring daft/my home, the PPR etc for the last 12 mths.

- Since covid, (i.e. sales since march) of all the properties I've been following (3 and 4 bed semis mostly), the average sale price recorded has been 4.8% over asking ( based on 18 properties I had an interest in).
Anecdotally, from being repeatedly outbid, I reckon sales in the last 2 months that have yet to appear on the PPR may exceed this.
Also larger detached properties have been going for a higher percentage over asking but I haven't followed enough of them to be worth including.

- looking at old threads on the property pin from 07/08, there were several people documenting ghost estates in the area. All of the surrounding villages and smaller towns had massive numbers of almost completed or completed properties for sale. Today, those same towns and villages have 3 bed semis or terraced houses renting for 1000-1200 a month, and any building going on has been sold off the plans in advance.

I do think if the economy continues to struggle and earnings drop there will be a drop as affordability falls, but there won't be a massive 20%+ crash as there isn't the oversupply there to provide it.

Also the demographics have changed. Lots of people were buying in their early to mid twenties last time for fear of never 'getting on the ladder' if they didn't, which resulted in a lot smaller pool of later twenties and thirties aged people needing to buy in the following 5 years. We don't have that now, first time buyers in 2019 were on average 5 years older than in 2006.

The share of new lending originated to
borrowers aged 30 and under has declined
from just under a third in 2006 to 14 per
cent in H1 2019.

Cantstandsya

omicron wrote: »

I've noticed 2 factors where I live (Cork commuter town) from monitoring daft/my home, the PPR etc for the last 12 mths.

- Since covid, (i.e. sales since march) of all the properties I've been following (3 and 4 bed semis mostly), the average sale price recorded has been 4.8% over asking ( based on 18 properties I had an interest in).
Anecdotally, from being repeatedly outbid, I reckon sales in the last 2 months that have yet to appear on the PPR may exceed this.
Also larger detached properties have been going for a higher percentage over asking but I haven't followed enough of them to be worth including.

- looking at old threads on the property pin from 07/08, there were several people documenting ghost estates in the area. All of the surrounding villages and smaller towns had massive numbers of almost completed or completed properties for sale. Today, those same towns and villages have 3 bed semis or terraced houses renting for 1000-1200 a month, and any building going on has been sold off the plans in advance.

I do think if the economy continues to struggle and earnings drop there will be a drop as affordability falls, but there won't be a massive 20%+ crash as there isn't the oversupply there to provide it.

Also the demographics have changed. Lots of people were buying in their early to mid twenties last time for fear of never 'getting on the ladder' if they didn't, which resulted in a lot smaller pool of later twenties and thirties aged people needing to buy in the following 5 years. We don't have that now, first time buyers in 2019 were on average 5 years older than in 2006.

Prices in Dublin crashed along with everywhere else in 07/08.

Can someone explain to me how ghost estates in Leitrim cause house prices to fall in Clontarf?

Browney7

fliball123 wrote: »

What am I trying to confirm? that 2020 is different to to 2008? of course it is and the liquidity dried up from banks after the crash in 07 we had drops at the tail end of 07 and in every quarter in 08. We are now 3 and a bit quarters in the Covid crash/recession/mess and this quarter we seen a rise in prices. So I agreed there was a lull and now prices are starting to rise. I have given proof that demand is still out there and liquidity from the banks has not gone away as mortgage approval is up over 27% on this time last year. I stated here months ago I expected prices to drop by 5% if you look back so I don't know what argument your talking about.

Whilst your 27% stat figure is factually correct, it's a very disingenuous stat to use. The summer period in normal times is typically busy so previous September's see a lull. This year, Covid has played havoc with timings and activity was incredibly low in the months April to June and so it's only natural that there was a catch up evident in September as the country opened up to an extent. But you're right in that banks appear to not be turning off the liquidity taps so far although their underwriting practices seem to be at the sharp end at present.

If you look at July 2019 there was almost 5000 mortgages approved, in July 20 it was closer to 3500. If you compare Q3 20 to Q3 19 the drawdown volumes are down approx 30% which isn't actually bad in the circumstances.

Covid has played havoc with stats due to the sudden sharp shutdown it has caused and creates dubious statistics.

Browney7

Donald Trump wrote: »

The recession and the decline of property prices were, in Ireland, a case of chicken and egg. It was exacerbated by the global credit crisis of course. But also masked by that.

The thing this time around and indeed for the past half a decade is that the central bank printing presses have been in overdrive and the money supply has expanded hugely. All bets are off for how this plays out in the long term.

Timing belt

TheSheriff wrote: »

Are we at economic standstill tough ?

In terms of hospitality, yes. But for other industries I wouldn't have thought so.

Business is certainly booming from my work perspective (pharma), moreso than anytime I've previously seen in my career.

Pharma boosts GDP figures but doesn’t do a lot for the domestic economy with the exception of employment and that is limited as it’s not a sector that requires large no’s of staff.

What we are seeing is two very different economies at play. We have the pharma and IT that have grown and the domestic economy really struggling. If you think the economy has not been badly impacted then you probably work in pharmaceutical or IT and because you have not been directly impacted and don’t see the extent of the damage.

We haven’t seen a drop in house prices for a number of reasons the main one’s being
1)the payment breaks that were offered by the banks
2)the fact the government have been paying people higher rates than normal unemployment benefit so that the economy doesn’t totally grind to a total halt.
3) limited supply
4) WFH has increased disposable income
5) The QE undertaken by ECB leads to asset inflation


The reason that savings increased back in Q1/2 was because people save when they are unsure if they will have jobs in a few months time. This behaviour in itself is normally enough to put a country into recession.

Anyone that thinks that hotels, airlines, tourism etc will be back to what they were pre covid is just fooling themselves...yes people may travel more etc. But these companies now have greater debt to service so will not be as profitable and will look at cutting costs (redundancy).

This will not be the only sector impacted banks can no longer make big money with the negative rates and will need to cut costs. The finance industry will be impacted as they right off and restructure debt etc. This will ripple through the service industry etc. Auditors, consultants, solicitors etc. And not to mention the SME sector that employees the majority of workers in Ireland..a lot of those businesses will never come back.

At the end of the day things could have been a lot worse only for Intervention from governments and central banks as they acted fast and rather than bail out banks after the fall out stepped in before it got to that stage. Will house prices crash I don’t think so but likewise any increases will be short lived. My prediction is that we will see the market static or a fall of 5% next year unless the ECB undertake more stimulus.

Sweet.Science

I'm finding im not being outbid on houses but the sellers just aren't accepting the bids because it hasn't worked out like they had hoped

strmin

Sweet.Science wrote: »

I'm finding im not being outbid on houses but the sellers just aren't accepting the bids because it hasn't worked out like they had hoped

I noticed that too. Some sellers are late for the party, but they don't sell for asking price. Two properties I was bidding on reached asking and no bids over for more than two months. One seller pulled out, another seller started showing house again. So they don't accept asking.

brisan

strmin wrote: »

I noticed that too. Some sellers are late for the party, but they don't sell for asking price. Two properties I was bidding on reached asking and no bids over for more than two months. One seller pulled out, another seller started showing house again. So they don't accept asking.

They obviously set the asking price low ( compared to what they think the house is worth not what it actually is worth ) in the hope of starting a bidding war
When the bidding war did not happen they pulled out as they never received their perceived value of the house
The same people will then more than likely underbid on a property they are interested in buying
Some People have a weird attachment to their property and it’s perceived value

cnocbui

brisan wrote: »

...
Some People have a weird attachment to their property and it’s perceived value

I wonder why.

brisan

cnocbui wrote: »

I wonder why.

So do I
A house is like any other asset
It’s only worth what someone is prepared to pay for it
The fact that it is your home means little to any prospective buyer
If you value your home at 400k and the open market only offers you 375k what is your house worth ?

Cyrus

brisan wrote: »

A house is like any other asset

it's really not.

brisan

Cyrus wrote: »

it's really not.

It really is when you quote the whole post and not just bits of it

Cyrus

brisan wrote: »

It really is when you quote the whole post and not just bits of it

your response only focused on the asset value, you said people have a weird attachment to their property, given its their home i dont think its weird.

donnaille

Cyrus wrote: »

your response only focused on the asset value, you said people have a weird attachment to their property, given its their home i dont think its weird.

Did it? That's not my read of the two posts. My read is that owners struggle to be objective. This could be due to a number of factors (e.g. emotional attachment, intangibles a buyer might not see, price purchased etc.), but is hard to argue against.

brisan

Cyrus wrote: »

your response only focused on the asset value, you said people have a weird attachment to their property, given its their home i dont think its weird.

I said it’s perceived value not its actual value
Just because you think your home is worth 400k does not mean the market will value your house at 400k
It’s your home but to the market it’s a house
People need to realise this when selling

antiskeptic

fliball123 wrote: »

Where are you getting that people are emigrating? I have figures for 2 years 2018 and 2019 and in the last 2 years preceding Covid we had 65k more people coming in to the country than leaving which would suggest there is work here. so I am merely contesting your statement people will go where the work is.

There is no contesting the statement that people will go where the work is. You say people are coming here for the work afterall.

What you are doing again (quite why I do not know) is projecting past and recent happenings onto the future. Do you not know the value of your investment can go down as well as up?

Past immigration for work was preceded by past, past emmigration for work. The question is: what's next. Not 'whats past'

Also what we do know to date
Property has not dropped
Income tax has not dropped
Savings are up
We have to borrow 30billion between this year and next (worst case scenario)
We are borrowing this 30billion at near 0%
There will be a cure for Covid it will not be here indefinitely

When you think of how bad it has been over the last 10/11 months the above is actually not a bad situation to be in considering how bad it could of been.

I asked you why property has not dropped, suggesting that folk seeking to close for fear of lending restrictions may have something to do with that. Its a view shared by the estate agent I just used to sell a house. And a view shared by the people who bought the house and at least one other ftb-er viewer. A view shared by a mate whose wife works in mortgage lending whose instruction is to button up. This isn't rocket science: the banks were bitten badly on property recently. They will clam up like sphincters at the first sign of trouble

Anecdote is not data but..

Income tax has not dropped? You mean income tax receipts have not dropped? From whence this data?

Savings are up? Now why would that be do you think

What we project to borrow is irrelevant. What is the world economic situation going to be in a post-covid world. What damage is caused when a world economy shuts down.

Can I suggest there is no precedent (bar obvious ones like GFC or world war) and that any assertion of yours as to business as usual is built on wisful thinking.

I don't know either but surely the safest bet when an economy goes off the side of a cliff is to suspect the landing might not be soft?

brisan

antiskeptic wrote: »

There is no contesting the statement that people will go where the work is. You say people are coming here for the work afterall.

What you are doing again (quite why I do not know) is projecting past and recent happenings onto the future. Do you not know the value of your investment can go down as well as up?

Past immigration for work was preceded by past, past emmigration for work. The question is: what's next. Not 'whats past'




I asked you why property has not dropped, suggesting that folk seeking to close for fear of lending restrictions may have something to do with that. Its a view shared by the estate agent I just used to sell a house. And a view shared by the people who bought the house and at least one other ftb-er viewer. A view shared by a mate whose wife works in mortgage lending whose iThis isn't rocket science: the banks were bitten badly on property recently. They will clam up like sphincters at the first sign of trouble

Anecdote is not data but..

If you go to the thread on buying or selling a property people actually said they were buying now ahead of schedule because
A ) They we’re afraid their AIP would run out and not be renewed
They or their partner may lose their job next year or be otherwise financially impacted so they were buying now before it happened as it was harder for them to be thrown out of their own home than a rented property for not paying
Plus mortgage was cheaper than rent but that’s for another thread

fliball123

Browney7 wrote: »

Whilst your 27% stat figure is factually correct, it's a very disingenuous stat to use. The summer period in normal times is typically busy so previous September's see a lull. This year, Covid has played havoc with timings and activity was incredibly low in the months April to June and so it's only natural that there was a catch up evident in September as the country opened up to an extent. But you're right in that banks appear to not be turning off the liquidity taps so far although their underwriting practices seem to be at the sharp end at present.

If you look at July 2019 there was almost 5000 mortgages approved, in July 20 it was closer to 3500. If you compare Q3 20 to Q3 19 the drawdown volumes are down approx 30% which isn't actually bad in the circumstances.

Covid has played havoc with stats due to the sudden sharp shutdown it has caused and creates dubious statistics.

Well it isnt disingenuous as it a comparison on year on year. Mortgage approvals in Sept 2020 are up 27% on Sept 2019 . I use this date as its the last date that there are figures for. Where did you get the Drawdown volumes from?

cnocbui

brisan wrote: »

So do I
A house is like any other asset
It’s only worth what someone is prepared to pay for it
The fact that it is your home means little to any prospective buyer
If you value your home at 400k and the open market only offers you 375k what is your house worth ?

Here we go again. There is an economic concept of intrinsic value, which is roughly the cost of producing something. Most people on this thread believe market value is the sole determiner of value. It is not. You can have a market value fall below intrinsic value, but not for long.

This idea that market value is only determined by the buyer is a falacy. A market doesn't exist without two participants - sellers are every bit as important as buyers and they play a part in determining market value.

To me, the fair market valuee of my house is 2% less than it's replacement cost. Now buyers like you can disagree with me all you like about that, but you won't be buying it if that's the case.

brisan

fliball123 wrote: »

Well it isnt disingenuous as it a comparison on year on year. Mortgage approvals in Sept 2020 are up 27% on Sept 2019 . I use this date as its the last date that there are figures for. Where did you get the Drawdown volumes from?

What are the mortgage approvals for April May June July August 2020 compared to April May June July August 2019
Why not use those figures
What are the approval and drawdowns for the 10 months to end of October 2020 compared to the first 10 months of 2019
As was said Covid played havoc with normal routines
Any EA will tell you Jan/ Feb and June July August are busy months
November December much less so
Covid has changed all that for this year
It’s like saying car sales went up in a particular month when garages were shut for the previous 3/4 months
All stats can can used to suit an argument
Lies damm lies and statistics is a phrase that was coined for a reason
Quick example
100 people in hospital with Covid
That would lead you to think that Covid is in the community
However what if only 30 people went into hospital with Covid and the other 70 caught it in hospital
Stats on their own are at times pointless

antiskeptic

brisan wrote: »

I said it’s perceived value not its actual value
Just because you think your home is worth 400k does not mean the market will value your house at 400k
It’s your home but to the market it’s a house
People need to realise this when selling

True. Lady up the way with stick on fake stone (and every other.kind of gob on you can imagine) reckons her house is the pick of the bunch.

fliball123

antiskeptic wrote: »

There is no contesting the statement that people will go where the work is. You say people are coming here for the work afterall.

What you are doing again (quite why I do not know) is projecting past and recent happenings onto the future. Do you not know the value of your investment can go down as well as up?

Past immigration for work was preceded by past, past emmigration for work. The question is: what's next. Not 'whats past'




I asked you why property has not dropped, suggesting that folk seeking to close for fear of lending restrictions may have something to do with that. Its a view shared by the estate agent I just used to sell a house. And a view shared by the people who bought the house and at least one other ftb-er viewer. A view shared by a mate whose wife works in mortgage lending whose instruction is to button up. This isn't rocket science: the banks were bitten badly on property recently. They will clam up like sphincters at the first sign of trouble

Anecdote is not data but..

Income tax has not dropped? You mean income tax receipts have not dropped? From whence this data?

Savings are up? Now why would that be do you think

What we project to borrow is irrelevant. What is the world economic situation going to be in a post-covid world. What damage is caused when a world economy shuts down.

Can I suggest there is no precedent (bar obvious ones like GFC or world war) and that any assertion of yours as to business as usual is built on wisful thinking.

I don't know either but surely the safest bet when an economy goes off the side of a cliff is to suspect the landing might not be soft?

Hang on so now we cant look at the past to try and figure out things. So you reckon once we get back to normal the trend of people coming into this country for work will stop?? You were saying that people will leave the country to get work when the opposite has been happening up until Corona. So you cant have it both ways as in either we cant use past data or we can use it but only if it supports your theory that people will only be leaving Ireland to get work. So which is it?

The anecdotal evidence means feck all for every one of the people you are talking about there is someone who made on property recently. Prices have been going up. That is not anecdotal that is fact.

The banks will not close up as one of the main streams that is being used to pump money into Ireland via the ECB. This is giving the banks liquidity at a rate of near 0% interest. There is not one bank in this country who will be going oh we can borrow billions at near 0 and get 3/4% return on it. Do you really think the banks are going to miss out on that opportunity?

https://www.rte.ie/news/business/2020/0407/1129124-central-bank-says-ecb-moves-released-20bn-for-banks/

Income tax receipts were released during the budget

https://www.irishtimes.com/business/economy/why-income-tax-receipts-are-immune-to-covid-19-1.4374848

Savings are up as people who have medium to high paying jobs have stayed working and they couldn't spend on day to day luxuries like a pint or a meal. They also saved on Holidays, Petrol, toll bridge, the 10 Euro Sambo at lunch

The thing is the world economy has not closed down. People all over the globe are getting up and working. There are restrictions in place but the world still turns.

There is no precedent for this and this is what I have been arguing. People on here are comparing to the 07 crash which I think is wrong as there are completely different dynamics at play and you cant compare to a war either. Look I am not saying property will rise or property will fall. But I will say you cannot compare this to 07 there are too many differences with regard to Irish property prices.

brisan

cnocbui wrote: »

Here we go again. There is an economic concept of intrinsic value, which is roughly the cost of producing something. Most people on this thread believe market value is the sole determiner of value. It is not. You can have a market value fall below intrinsic value, but not for long.

This idea that market value is only determined by the buyer is a falacy. A market doesn't exist without two participants - sellers are every bit as important as buyers and they play a part in determining market value.

To me, the fair market valuee of my house is 2% less than it's replacement cost. Now buyers like you can disagree with me all you like about that, but you won't be buying it if that's the case.

I may not be buying but if I represent the market you will not be selling either
You can value your house at whatever level you like but if the market does not agree it won’t be sold
I am in my fourth home at this stage and hopefully my final one
I know what my house cost , what I had to add to it to make it our home
So let’s call that value X
We would not sell it for X plus 100k probably not even Xplus 150k because we are where we wanted to be when we bought our first house 38 years ago
Does not mean by any stretch of the imagination that someone would offer us X plus 100k if we put it on the market because while it’s that to us it’s not worth that to another buyer who has no attachment to it

fliball123

brisan wrote: »

What are the mortgage approvals for April May June July August 2020 compared to April May June July August 2019
Why not use those figures
What are the approval and drawdowns for the 10 months to end of October 2020 compared to the first 10 months of 2019
As was said Covid played havoc with normal routines
Any EA will tell you Jan/ Feb and June July August are busy months
November December much less so
Covid has changed all that for this year
It’s like saying car sales went up in a particular month when garages were shut for the previous 3/4 months
All stats can can used to suit an argument
Lies damm lies and statistics is a phrase that was coined for a reason
Quick example
100 people in hospital with Covid
That would lead you to think that Covid is in the community
However what if only 30 people went into hospital with Covid and the other 70 caught it in hospital
Stats on their own are at times pointless

The stat shows there is demand out there to buy regardless of even comparing year on year but I take the point and have said that 2020 is a complete anomaly when it comes to almost everything, but you can make use of the data so for example when crossed checked and drilled down to a degree like over 25k of mortgage approvals from the start of the year to Sept were for first time buyers and then checking against how many new properties have been built from the start of the year to Sept, which is 13.5k. It not hard to calculate that we are way short of housing just for this year alone.

So there you go I have made this comparison before but people shoot it down in different ways such as PropsQuery who will bring in 2021 property build projections and forget that there will be FTBs buying in 2021 as well. Or will bring up a link to show that there are over 200k houses not lived in from a census report back in 2016 and then not explaining the oxymoron that if there were so many houses in the country not being lived in why is every single political party in agreement that we need a sh1tload of new houses built for the foreseeable future.

cnocbui

brisan wrote: »

I may not be buying but if I represent the market you will not be selling either
You can value your house at whatever level you like but if the market does not agree it won’t be sold
I am in my fourth home at this stage and hopefully my final one
I know what my house cost , what I had to add to it to make it our home
So let’s call that value X
We would not sell it for X plus 100k probably not even Xplus 150k because we are where we wanted to be when we bought our first house 38 years ago
Does not mean by any stretch of the imagination that someone would offer us X plus 100k if we put it on the market because while it’s that to us it’s not worth that to another buyer who has no attachment to it

I'm in my 3rd house. So far, I have not sold a house at below cost, quite the opposite. So if you were to put your house on the market, would you accept less than X if that's what the market said it was worth, or would you take it off the market?

fliball123

cnocbui wrote: »

I'm in my 3rd house. So far, I have not sold a house at below cost, quite the opposite. So if you were to put your house on the market, would you accept less than X if that's what the market said it was worth, or would you take it off the market?

I think when a house is being sold and your looking at the price it will sell for I think the main 6 factors in play would be

What the seller wants for it - If they don't like the price they don't have to sell

What the buyer will pay for it - If they don't like the price they don't have to buy

The scarcity of property or properties that rival what is being sold - Property at the moment (quality in good areas) seems to be getting scarcer by the day.

The quality of the property vs rival properties - If there are 20 properties beside you all for sale you may have to battle them by dropping your price to make more attractive to buy

How many people will be competing to buy this property - Well with the amount of mortgage approvals and the supply of new houses draining away I reckon there will be a lot of competition.

Access to lending - billions being flooded into the bank at 0% do we think banks wont lend this on and make 3/4%

Every property will find its price point through the above 6 IMO

donnaille

cnocbui wrote: »

I'm in my 3rd house. So far, I have not sold a house at below cost, quite the opposite. So if you were to put your house on the market, would you accept less than X if that's what the market said it was worth, or would you take it off the market?

Your below cost, or intrinsic value argument is one you've introduced here, I can't see where this is relevant to the last few pages?

The scenario above is clear whataboutism.

antiskeptic

brisan wrote: »

Lies damm lies and statistics is a phrase that was coined for a reason
Quick example
100 people in hospital with Covid
That would lead you to think that Covid is in the community
However what if only 30 people went into hospital with Covid and the other 70 caught it in hospital
Stats on their own are at times pointless

Or as someone put it regarding Covid:

"Look on the bright side. Ain't nobody dying of old age anymore"

Claw Hammer

cnocbui wrote: »

e.

To me, the fair market valuee of my house is 2% less than it's replacement cost. Now buyers like you can disagree with me all you like about that, but you won't be buying it if that's the case.

You can't buy a house from yourself, nor sell one to yourself. You cannot put a market value on your own house. You can say you won't sell for less than a particular price, but unless someone would be willing to pay that price, then your figure is not the market value.