Irish Property Market 2020 Part 2

alias no.9

Marius34 wrote: »

Residential property prices rise by 0.1% in the year to June
In Dublin, residential property prices saw a decline of 0.7% in the year to June.
Residential property prices in Ireland excluding Dublin were 0.9% higher in the year to June.

If this doesn't tell about price stability, nothing will tell...

Even for CSO i believe it is well expected up to +/-1% margin of error, as it is impossible to get precise calculation on property price.

Why would there be a margin of error? It's a complete dataset, not a sample.

hometruths

GreeBo wrote: »

Why is it that all the doomsayers end their posts with "just wait!"?

Possibly because they are taking the opposite view of all the bulls who end their posts with "don't wait, buy now!"

brisan

schmittel wrote: »

When you say you see new players coming in, do you mean you have heard of new entrants to the market?

The Spainish bank Avant are supposedly entering the Irish Mortgage market in the Autumn.
They are promising low rates.
I can see them cherry picking their customers

fliball123

schmittel wrote: »

When you say you see new players coming in, do you mean you have heard of new entrants to the market?

https://extra.ie/2020/07/30/news/irish-news/mortgage-war-spanish-bank

fliball123

schmittel wrote: »

Possibly because they are taking the opposite view of all the bulls who end their posts with "don't wait, buy now!"

There has not been many of them on here Schmittel the advise on here has mainly been to wait as prices are going to drop anywhere from 2% to 50%. Has anyone on here actually said prices will rise?

hometruths

fliball123 wrote: »

There has not been many of them on here Schmittel the advise on here has mainly been to wait as prices are going to drop anywhere from 2% to 50%. Has anyone on here actually said prices will rise?

No, I can only recall a couple of posters saying under some circumstances prices might rise. My sense is the thread is divided into people who think prices won't fall meaningfully eg sub 2%, those who think there will be a fall but it will not be significant (these guys seem to range up to 10%), and those who think they'll fall greater than 10% (though haven't seen anyone say 50%).

My reply to Greebo on the just wait/don't wait thing was because to me that irrespective of exact size of any fall, the waiting thing seems to sum up the differences between attitudes of posters.

eg plenty such as myself who think given everything that is going on it would be sensible to wait a year or so to which way the wind is blowing. That is certainly what I would do if I was about to buy a cookie cutter family home in Dublin suburbs.

and there are equally plenty who respond don't wait, better off to buy now while you can, cheaper than renting, better off jobless homeowner etc

Early on in the discussion there was plenty of advice saying don't wait, buy now, prices will always rise in the long term.

fliball123

schmittel wrote: »

No, I can only recall a couple of posters saying under some circumstances prices might rise. My sense is the thread is divided into people who think prices won't fall meaningfully eg sub 2%, those who think there will be a fall but it will not be significant (these guys seem to range up to 10%), and those who think they'll fall greater than 10% (though haven't seen anyone say 50%).

My reply to Greebo on the just wait/don't wait thing was because to me that irrespective of exact size of any fall, the waiting thing seems to sum up the differences between attitudes of posters.

eg plenty such as myself who think given everything that is going on it would be sensible to wait a year or so to which way the wind is blowing. That is certainly what I would do if I was about to buy a cookie cutter family home in Dublin suburbs.

and there are equally plenty who respond don't wait, better off to buy now while you can, cheaper than renting, better off jobless homeowner etc

Early on in the discussion there was plenty of advice saying don't wait, buy now, prices will always rise in the long term.

Yeah probably a senseable approach but as I have said constantly everyone will be in a different situation with regards to finance, kids, work, renting, living at home and maybe the waiting and the lockdown has shifted perspective as well. I would never advise anyone to buy or sell , just do what you think is best for you and yours

JJJackal

fliball123 wrote: »

Yeah probably a senseable approach but as I have said constantly everyone will be in a different situation with regards to finance, kids, work, renting, living at home and maybe the waiting and the lockdown has shifted perspective as well. I would never advise anyone to buy or sell , just do what you think is best for you and yours

I consistently make the point that waiting is sensible if you believe there will be a meaningful drop ie >5%.

Its worth noting that a 5% drop across the board does not mean that the house that you want in the area that you like will drop at all.

This will be an average - so some proprieties where you get a couple of motivated buyers could rise. The greater the % drop obviously the less likely this is to happen e.g. if drop was 50%, no house no matter how nice the location will rise in value

Marius34

alias no.9 wrote: »

Why would there be a margin of error? It's a complete dataset, not a sample.

Because there is no way to identify exact properties with exact conditions what was sold previously.
There are various ways to calculate the price, there are no perfect formula for this, the more you work on this, the more you analyse individual properties, the more precise you can get, but you would not identify price change on 0.1% precision whole market level.
In addition i see how smooth is their graph, and I can tell quite confident, they are using some kind of moving average calculation. For example price average of the latest 6 month, or 50% weight of current month & another 50% of previous 3 months. Many different ways, I don't know their method, but there are no magic formula, and they are not checking condition of every property.

hometruths

JJJackal wrote: »

I consistently make the point that waiting is sensible if you believe there will be a meaningful drop ie >5%.

Its worth noting that a 5% drop across the board does not mean that the house that you want in the area that you like will drop at all.

This will be an average - so some proprieties where you get a couple of motivated buyers could rise. The greater the % drop obviously the less likely this is to happen e.g. if drop was 50%, no house no matter how nice the location will rise in value

Agreed, that's why I said if I was buying in a housing estate that are all pretty much standard, I would wait.

If I was buying a country house or a period redbrick in D6 I'd be less inclined to wait if a wow house came on the market.

But these buyers are holding stronger hands than those buying in housing estates. i.e if you're buying now in the €2m+ bracket you're less likely to be as sensitive to job security/credit supply concerns.

But the engine room of the market is lower down the food chain. If it it starts to stall, those with strong hands at the top of the market will benefit.

GreeBo

"just wait/ing" has been the mantra for many posters, yet I dont believe any of them have given guidelines for when one should stop waiting and actually make a purchase.
Its an excellent wait to avoid negative equity but its not a great method of moving on with your life.

Cyrus

schmittel wrote: »

But these buyers are holding stronger hands than those buying in housing estates. i.e if you're buying now in the €2m+ bracket you're less likely to be as sensitive to job security/credit supply concerns.

.

I don’t think that’s the necessarily the case plenty of executives whose pay is 50 percent discretionary will be nervous about this years comp

hometruths

Cyrus wrote: »

I don’t think that’s the necessarily the case plenty of executives whose pay is 50 percent discretionary will be nervous about this years comp

Agreed, hence why I said "if you're buying now" - if you're nervous about this years comp you're probably not buying now.

And if you were previously considering buying in that bracket chances are you are not currently renting a damp bedsit. i.e waiting is not a big deal, you're probably already living in a pretty nice house.

Cyrus

schmittel wrote: »

Agreed, hence why I said "if you're buying now" - if you're nervous about this years comp you're probably not buying now.

And if you were previously considering buying in that bracket chances are you are not currently renting a damp bedsit. i.e waiting is not a big deal, you're probably already living in a pretty nice house.

It’s all relative I suppose

alias no.9

Marius34 wrote: »

Because there is no way to identify exact properties with exact conditions what was sold previously.
There are various ways to calculate the price, there are no perfect formula for this, the more you work on this, the more you analyse individual properties, the more precise you can get, but you would not identify price change on 0.1% precision whole market level.
In addition i see how smooth is their graph, and I can tell quite confident, they are using some kind of moving average calculation. For example price average of the latest 6 month, or 50% weight of current month & another 50% of previous 3 months. Many different ways, I don't know their method, but there are no magic formula, and they are not checking condition of every property.

The data doesn't represent like for like houses and doesn't purport to. Its an aggregate for what has sold in areas / regions in a given time period, not an estimate of the value of the overall housing stock in the region.
The average they report is the actual average for the time period, not an estimate. The change in the average from one year to another is the actual change in the average, not an estimate. There is no margin of error in the reported figures.

Pelezico

alias no.9 wrote: »

The data doesn't represent like for like houses and doesn't purport to. Its an aggregate for what has sold in areas / regions in a given time period, not an estimate of the value of the overall housing stock in the region.
The average they report is the actual average for the time period, not an estimate. The change in the average from one year to another is the actual change in the average, not an estimate. There is no margin of error in the reported figures.

In my area property is going down...not fast but steadily.

I agree CSO may be inaccurate in specific areas.

Marius34

alias no.9 wrote: »

The data doesn't represent like for like houses and doesn't purport to. Its an aggregate for what has sold in areas / regions in a given time period, not an estimate of the value of the overall housing stock in the region.
The average they report is the actual average for the time period, not an estimate. The change in the average from one year to another is the actual change in the average, not an estimate. There is no margin of error in the reported figures.

Like any price index there are various formulas behind it, adjustments, weighting, smoothing, etc. If you would take just simply average or median, you would get a very big price monthly fluctuation, that would not present the actual situation on the property market.
If other than CSO organization would try to create another property price index, we would get a different price index changes for the same dataset, maybe less than 1% in difference from CSO, but I'm confident it would be well over 0.1%.
I don't want to go in to the math behind it, as it would be very very long discussion.
But here maybe something to read for the start:
https://en.wikipedia.org/wiki/Price_index
https://en.wikipedia.org/wiki/House_price_index

I have create sometime ago my own simple formula on the same dataset, which I would agree is not as good as CSO, but just another calculation, and doesn't have smoothing, so the less number of properties the bigger fluctuation visible:
https://datastudio.google.com/s/rk-PSHr2Qx4

Pelezico

Marius34 wrote: »

Like any price index there are various formulas behind it, adjustments, weighting, smoothing, etc. If you would take just simply average or median, you would get a very big price monthly fluctuation, that would not present the actual situation on the property market.
If other than CSO organization would try to create another property price index, we would get a different price index changes for the same dataset, maybe less than 1% in difference from CSO, but I'm confident it would be well over 0.1%.
I don't want to go in to the math behind it, as it would be very very long discussion.
But here maybe something to read for the start:
https://en.wikipedia.org/wiki/Price_index
https://en.wikipedia.org/wiki/House_price_index

I have create sometime ago my own simple formula on the same dataset, which is not as good as CSO, and doesn't have smoothing, so the less number of properties the bigger fluctuation visible:
https://datastudio.google.com/s/rk-PSHr2Qx4

Nah...I will stick with CSO.

Pelezico

The CSO numbers would not provide an impetus to buy. Plenty of time to wait and see.

Just bide your time and there will be plenty to pick from.

fliball123

Pelezico wrote: »

The CSO numbers would not provide an impetus to buy. Plenty of time to wait and see.

Just bide your time and there will be plenty to pick from.

You hope as we all know what your opinion is based on

Pelezico

fliball123 wrote: »

You hope as we all know what your opinion is based on

Interesting that the number of sale agreed properties continues to grow.

Many of these will come back to the market as mortgage approval lapses or is simply overturned by banks.

smurgen

GreeBo wrote: »

"just wait/ing" has been the mantra for many posters, yet I dont believe any of them have given guidelines for when one should stop waiting and actually make a purchase.
Its an excellent wait to avoid negative equity but its not a great method of moving on with your life.

Rents have fallen significantly. Waiting has gotten cheaper. What's the moving on with your life part about?does life begin when you get a big mortgage?

fliball123

Pelezico wrote: »

Interesting that the number of sale agreed properties continues to grow.

Many of these will come back to the market as mortgage approval lapses or is simply overturned by banks.

If your following the story more and more people are coming off the Covid wage subsidy this has been the main blocker for people so more people will be actually getting the go ahead to buy. where are you getting the sale agreed data from by the way

fliball123

smurgen wrote: »

Rents have fallen significantly. Waiting has gotten cheaper. What's the moving on with your life part about?does life begin when you get a big mortgage?

no but at least you know what your going to be paying for the next x amount of years of your life and at a certain point in time you no longer pay the mortgage as it has been paid and the house is yours.

TheSheriff

smurgen wrote: »

Rents have fallen significantly. Waiting has gotten cheaper. What's the moving on with your life part about?does life begin when you get a big mortgage?

We have been seriously trying to buy for a while now; some fallen through sales but mostly outbid.

I feel like our life is on hold tbh; saving, no very large expenditure, no wedding, constant feeling that the place I live is not home, most weekends spent viewing properties, every night looking at daft/myhome, tracking sale agreed prices, want to change job but nervous in case the bank want me to wait out another probation period and the house comes up etc etc. Its all very exhausting.

Many friends in the same position.

smurgen

fliball123 wrote: »

no but at least you know what your going to be paying for the next x amount of years of your life and at a certain point in time you no longer pay the mortgage as it has been paid and the house is yours.

But you might not know how much you'll be earning?

Cyrus

smurgen wrote: »

Rents have fallen significantly. Waiting has gotten cheaper. What's the moving on with your life part about?does life begin when you get a big mortgage?

Are you unable to contemplate a set of circumstances that aren’t your own ?

Cyrus

Pelezico wrote: »

Nah...I will stick with CSO.

If that’s your standard of response to a detailed post like that then I don’t think you are worth responding to again.

smurgen

TheSheriff wrote: »

We have been seriously trying to buy for a while now; some fallen through sales but mostly outbid.

I feel like our life is on hold tbh; saving, no very large expenditure, no wedding, constant feeling that the place I live is not home, most weekends spent viewing properties, every night looking at daft/myhome, tracking sale agreed prices, want to change job but nervous in case the bank want me to wait out another probation period and the house comes up etc etc. Its all very exhausting.

Many friends in the same position.

If you've been waiting years then buying now is the worst time. That'll mean you'll have absorbed all of the increases and gained from very little of the decreases.

fliball123

smurgen wrote: »

If you've been waiting years then buying now is the worst time. That'll mean you'll have absorbed all of the increases and gained from very little of the decreases.

How sure are you of what you just said as it has been said over and over about drops and they are yet to happen?