Irish Property Market 2020 Part 2

fliball123

schmittel wrote: »

the rental market and the sales market are intrinsically linked. Apologies, but the idea that they are priced completely independently of each other is laughably ignorant.

They are decoupled by the fact that affordability once your renting and once you have a mortgage are treated differently as in one instance renting if you cant afford it your going to be kicked out and a property is added to supply this is not the same with a mortgage, Also there is no point in arguing just because rents are down during a a lockdown with no students and very few foreign visitors coming to our shores mean that even if the correlation exists the same conditions will not be there when covid is gone.

If they are priced the same then why have rents in the last 5 years sky rocketed above what you would pay for a mortgage? I don't doubt there is some commonalities between them but the game changer is the banks not being able to repossess that is the fly in the ointment to your theory.

AS for being ignorant I think you need to have a look in the mirror as you must have a crystal ball and can see the future as your trying and tell people what to do as you are the all knowing and all powerful one..Go to bed

fliball123

smurgen wrote: »

Losing your home and getting kicked out of rental property has nothing to do with correlation of the prices between the rental market and house prices. The value of the house and the rent yield are linked. The two have deviated for now but I out that down to the fact it takes longer to sell and buy houses on average than it does to let or rent a house. This lag will catch up soon.

Yes it does as I said if you get kicked out of your rental then that rental can be either added to the rental stock or the selling stock. The same cannot be said if someone decides not to pay their mortgage its back to the supply vs demand again so you agree that they have deviated for me they have been pretty much decoupled by the fact that banks are not allowed repossess the family home.

hometruths

fliball123 wrote: »

They are decoupled by the fact that affordability once your renting and once you have a mortgage are treated differently as in one instance renting if you cant afford it your going to be kicked out and a property is added to supply this is not the same with a mortgage, Also there is no point in arguing just because rents are down during a a lockdown with no students and very few foreign visitors coming to our shores mean that even if the correlation exists the same conditions will not be there when covid is gone.

If they are priced the same then why have rents in the last 5 years sky rocketed above what you would pay for a mortgage? I don't doubt there is some commonalities between them but the game changer is the banks not being able to repossess that is the fly in the ointment to your theory.

AS for being ignorant I think you need to have a look in the mirror as you must have a crystal ball and can see the future as your trying and tell people what to do as you are the all knowing and all powerful one..Go to bed will ye your talking sh1t again

I am not trying to tell anybody what to do, nor am I claiming to be able to see the future.

I am simply, once again, pointing out the flaws in your understanding of how the property market actually functions.

smurgen

Graham wrote: »

I pointed out their track record might be considered less than stellar.

Conclusions entirely your own.

What's the value in pointing out they've previously been wrong? Do you accept that they might have access to more data relevant to the pricing of housing in Ireland than those on this thread therefore in a greater position to judge accurately?

Graham

smurgen wrote: »

What's the value in pointing out they've previously been wrong?

Primarily because you're holding them up as some great predictors of markets despite their relatively recent track record.

Ursabear

fliball123 wrote: »

no its nothing to do with that the rental market is seperate to the buying and selling of property.

As I stated on here the biggest difference is if someone is paying a mortgage and losses their job there is a high likelihood that they will get to stay in their family home without losing it, the same cannot be said for those renting. So its to do with how the 2 are treated when affordability is in question

I'm going to write something that sounds harsh, but Im not sure public sentiment will stay predominantly in favour of keeping this status quo as it is. Theres a huge cohort of people in there late 20s up to late 30s early 40s who have been paying huge rents for years and would love a family but can't get onto the property ladder, and are maybe not feeling the same sentiment of support towards people who are not paying towards their mortgage staying in their homes - as it is it is preventing property being released to the market . ( When it is the case that the homes are high desirability and the people are choosing not to downsize etc and have the means too, there is more support for people genuinely struggling, I am thinking of some high profile cases last year)

hometruths

Ursabear wrote: »

I'm going to write something that sounds harsh, but Im not sure public sentiment will stay predominantly in favour of keeping this status quo as it is. Theres a huge cohort of people in there late 20s up to late 30s early 40s who have been paying huge rents for years and would love a family but can't get onto the property ladder, and are maybe not feeling the same sentiment of support towards people who are not paying towards their mortgage staying in their homes - as it is it is preventing property being released to the market . ( When it is the case that the homes are high desirability and the people are choosing not to downsize etc and have the means too, there is more support for people genuinely struggling, I am thinking of some high profile cases last year)

Not harsh at all, the sooner it happens the better.

Part of the problem is we have created this culture around housing that people are afraid to say "Hang on a minute, if you cannot afford to live in that house, why should the rest of us have to pay for it."

Your home is at risk if you do not keep up repayments.

It's not harsh to point that out. It was first pointed out to you when you signed the contract.

smurgen

Graham wrote: »

Primarily because you're holding them up as some great predictors of markets despite their relatively recent track record.

Recent? What do you classify as recent?

Villa05

fliball123 wrote:

The only thing I will say is the state has a long long history of paying stupid money and your deluded if you think there is an alternative to the current government who are going to take support away if anything the opposition as it currently stands are far more left leaning and will be giving more support and money away. Unless you seen a party who have actively propositioned this in their manifestos during the elections. By the way I am not arguing with you I think you spot on with regards to the way government are handling things but I cannot see it changing if Sinn Fein get in they will be throwing money at the homeless or should I say those without their own house.

The state has a. Long history of being ruled by Ff and fg
I think you might be confusing the practice of recent governments paying stupid money for housing for people that can't afford them as a left leaning policy. In truth it is welfare for the wealthy

A left leaning policy would take 750k and provide 3 to 4 houses at affordable rates. Current government is taking the same money and leasing 1 House for the same purpose.
Who benefits from this property developers, vulture funds or people struggling to put a roof over there head

The Spider

Ursabear wrote: »

I'm going to write something that sounds harsh, but Im not sure public sentiment will stay predominantly in favour of keeping this status quo as it is. Theres a huge cohort of people in there late 20s up to late 30s early 40s who have been paying huge rents for years and would love a family but can't get onto the property ladder, and are maybe not feeling the same sentiment of support towards people who are not paying towards their mortgage staying in their homes - as it is it is preventing property being released to the market . ( When it is the case that the homes are high desirability and the people are choosing not to downsize etc and have the means too, there is more support for people genuinely struggling, I am thinking of some high profile cases last year)

None of that matters, under the constitution of Ireland citizens rights to own property are protected, irregardless of owing a bank money or not, if your name is on the deeds then it’s your house, if you’re renting you don’t own the property and aren’t protected under the constitution, simple.

PropQueries

FYI. Article in today's Irish Times "Claim that 47,000 new homes needed a year isn’t credible" for whoever may be interested.

Article link here: https://www.irishtimes.com/business/economy/claim-that-47-000-new-homes-needed-a-year-isn-t-credible-1.4333525

hometruths

PropQueries wrote: »

FYI. Article in today's Irish Times "Claim that 47,000 new homes needed a year isn’t credible" for whoever may be interested.

Article link here: https://www.irishtimes.com/business/economy/claim-that-47-000-new-homes-needed-a-year-isn-t-credible-1.4333525

A good point:

The objective, of course, is to talk up the market for investors while warning the Government off doing anything radical, or anything that might upset the current price dynamics.

brisan

fliball123 wrote: »

no its nothing to do with that the rental market is seperate to the buying and selling of property.

As I stated on here the biggest difference is if someone is paying a mortgage and losses their job there is a high likelihood that they will get to stay in their family home without losing it, the same cannot be said for those renting. So its to do with how the 2 are treated when affordability is in question

If the returns on a 300k rental property do not add up then the investors will not buy
Less demand means prices should fall until returns ie yield makes economic sense for the investor

Hubertj

schmittel wrote: »

A good point:

It is... i think they need to look at all the costs and not just lay all blame at the cost of land. What about costs associated with connecting utilities? While regulation is important I’ve read it adds considerably to construction costs - is there truth in this? Can regulations be improved to reduce costs while maintaining quality and safety?

We cant have a repeat of the last decade where there was virtually no construction for a period leading to some of the issues we have today

Bass Reeves

PropQueries wrote: »

FYI. Article in today's Irish Times "Claim that 47,000 new homes needed a year isn’t credible" for whoever may be interested.

Article link here: https://www.irishtimes.com/business/economy/claim-that-47-000-new-homes-needed-a-year-isn-t-credible-1.4333525

The article put a fairly simple logical case regarding population increase, migration and reduction in household size( basically people wanting to move out of home) to come to the figures. While 47 K/year would be on the high side, we are only building 18.5k units/ year. At present demand outstrips supply it will continue to do so on these figures. Most of the pressure is in the Dublin area. Even if the 47k figure is high the figures suggest we need 30k+/ year for a substantial amount of time that 12k units above present building rate or a 66%increase. SF and FF plan pre election was based in about 12k social and affordable units (mostly houses) for 5+ years.

That the basis why I and other cannot see the price of houses collapse beyond 10% if they fall that far at all. Demand outstrips supply and will do for the next while anyway

Bass Reeves

brisan wrote: »

If the returns on a 300k rental property do not add up then the investors will not buy
Less demand means prices should fall until returns ie yield makes economic sense for the investor

Very few investors have been buying in Dublin over the last while anyway. Any research has shown a reduction in rental supply over the last few years. Reit's have started to up numbers through contacted build supply apartments mainly. However these units are.only coming on stream now.

The_Conductor

What are people's thoughts on the numbers of properties being actively taken out of the rental market and put up for sale instead?
I'm personally aware of over a dozen Irish who were working abroad and had rented out their family homes (all in the Dublin area) and who now are back- and as they can't immediately move back into their family homes- have served notice on tenants of their intents to buy- and while they're waiting for the 5th Jan or the timesales in the notice periods to run down- are window shopping for new properties themselves. The people I'm aware of- are people who were working in the medical sector in Australia, finance in ZA and teachers in the middle east, to number a few.

In the absence of the ability to get their family homes back in a fairly prompt manner- they are looking to buy elsewhere (often their situations have changed and they are looking at more appropriate property for their new circumstances)- and where they once had the intention of moving back to Dublin City- often they're now looking at areas that would not have featured in their vision before.

I imagine there are thousands in this position?

Bass Reeves

Hubertj wrote: »

It is... i think they need to look at all the costs and not just lay all blame at the cost of land. What about costs associated with connecting utilities? While regulation is important I’ve read it adds considerably to construction costs - is there truth in this? Can regulations be improved to reduce costs while maintaining quality and safety?

We cant have a repeat of the last decade where there was virtually no construction for a period leading to some of the issues we have today

Outside of direct build costs (180k) where can substantial savings be made.
Finance 16.7k
Sales Marketing&legal 8.4k
Professional fees 5.7k
Leavies 14k
Site 61k
Vat 44K
Margin 42k

Finance, professional, and SLM are all really construction costs and cannot really be reduced by much.

Leavies will not help much either and money must be replaced to LA's if removed and history tells us government's are reluctant to replace KA funding and when economic pressures come into play it hit hard.

It only as new prices have hit present levels that builders have started to up scale a reduction in margin will see a reduction in building scale. site costs the question is can they be reduced, building on government and LA owned land would help so S&A housing will reduce house costs. Finally you are left with VAT, the EU will not allow a zero vat rate we can reduce I cannot see that happening but if it did 3% would be the most

brisan

Bass Reeves wrote: »

The article put a fairly simple logical case regarding population increase, migration and reduction in household size( basically people wanting to move out of home) to come to the figures. While 47 K/year would be on the high side, we are only building 18.5k units/ year. At present demand outstrips supply it will continue to do so on these figures. Most of the pressure is in the Dublin area. Even if the 47k figure is high the figures suggest we need 30k+/ year for a substantial amount of time that 12k units above present building rate or a 66%increase. SF and FF plan pre election was based in about 12k social and affordable units (mostly houses) for 5+ years.

That the basis why I and other cannot see the price of houses collapse beyond 10% if they fall that far at all. Demand outstrips supply and will do for the next while anyway

Demand without available credit is not real demand.
The availability of credit is where it may fall down.
Seemingly the new EWSS will not be shown on payslips.
However I cannot see banks treating EWSS differently to TWSS ,so I expect them to look for written proof that a mortgage applicant is not receiving EWSS and will base approval on this .

hometruths

Bass Reeves wrote: »

The article put a fairly simple logical case regarding population increase, migration and reduction in household size( basically people wanting to move out of home) to come to the figures. While 47 K/year would be on the high side, we are only building 18.5k units/ year. At present demand outstrips supply it will continue to do so on these figures. Most of the pressure is in the Dublin area. Even if the 47k figure is high the figures suggest we need 30k+/ year for a substantial amount of time that 12k units above present building rate or a 66%increase. SF and FF plan pre election was based in about 12k social and affordable units (mostly houses) for 5+ years.

That the basis why I and other cannot see the price of houses collapse beyond 10% if they fall that far at all. Demand outstrips supply and will do for the next while anyway

For sure but the demand only counts if it is matched by ability to pay. Simply wanting to buy a house in Dublin does not constitute demand.

The article makes the good point:

Might it be that Ireland’s housing crisis has morphed from a supply crisis into an affordability crisis? People want to buy houses but can’t because their incomes don’t match up.

This is not sustainable in the long term. Either the government have to introduce policies that drive housing costs down to affordable levels or those who want to buy but cannot have to accept that they need to look further afield.

Cyrus

smurgen wrote: »

Recent? What do you classify as recent?

why are you so convinced that the banks have all the answers ? apart from confirmation bias that is.

GreeBo

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.

So whats your prediction for the bottom?
When will there be "plenty to pick from"?

hometruths

Interestingly the report that is the subject of the Irish Times article states that the Greater Dublin Area has a surplus of approximately 100k family homes.

Who'd have thought it?

PropQueries

PropQueries wrote: »

FYI. Article in today's Irish Times "Claim that 47,000 new homes needed a year isn’t credible" for whoever may be interested.

Article link here: https://www.irishtimes.com/business/economy/claim-that-47-000-new-homes-needed-a-year-isn-t-credible-1.4333525

It seems the 47,000 figure per year comes from:

1. Natural increase in population: 18,500
2. Reduction in household size: 12,500
3. Inward Migration: 8,000
4. Obsolescence: 8,000

So, it seems, even the builder lobby group admits we're building enough units to house the projected natural increase in population. The rest appears to be based on forecasts that the author states are probably unrealistic e.g. reduction in household size (household size increased in last Census) and obsolescence, which he also seems to debunk. Inward migration may actually reverse over the coming years due to the changes in the international tax regime.

One major omission from the industry backed report appears to be executor sales, which I can imagine are still significant each year and will probably continue to increase.

So, and I could be wrong and I'm open to correction, but even the builder lobby appears to state that we are building more than enough units (well, before covid-19 and the CSO statistics don't appear to show such a collapse in building level even during the lockdown) to meet the projected natural increases in the population?

PropQueries

schmittel wrote: »

Interestingly the report that is the subject of the Irish Times article states that the Greater Dublin Area has a surplus of approximately 100k family homes.

Who'd have thought it?

Thanks for sharing the report. It seems that the building lobby report published in an attempt (I assume) to scare/ encourage potential buyers into making a purchase may have inadvertently back fired.

Cyrus

schmittel wrote: »

Interestingly the report that is the subject of the Irish Times article states that the Greater Dublin Area has a surplus of approximately 100k family homes.

Who'd have thought it?

on the basis of perceived requirements, a shortage of apartments and a surplus of family houses, but irish people prefer to live in houses.

young couples will tend to buy a house not an apartment generally, even if they dont plan on having kids.

hometruths

schmittel wrote: »

Interestingly the report that is the subject of the Irish Times article states that the Greater Dublin Area has a surplus of approximately 100k family homes.

Who'd have thought it?

And despite the surplus of family homes the report indicates that we built over 3 times as many estate houses as apartments last year.

hometruths

Cyrus wrote: »

on the basis of perceived requirements, a shortage of apartments and a surplus of family houses, but irish people prefer to live in houses.

young couples will tend to buy a house not an apartment generally, even if they dont plan on having kids.

Sorry, I don't follow. Do you mean the report states this on basis of perceived requirements but the perception is wrong?

cnocbui

schmittel wrote: »

Interestingly the report that is the subject of the Irish Times article states that the Greater Dublin Area has a surplus of approximately 100k family homes.

Who'd have thought it?

Does this report give a reason as to why so few of this great abundance of surplus houses are available for sale?

hometruths

cnocbui wrote: »

Does this report give a reason as to why so few of this great abundance of surplus houses are available for sale?

https://irp-cdn.multiscreensite.com/4065c16c/files/uploaded/Identify%20Consulting%20Full%20Report%20FINAL.pdf