Irish Property Market 2020 Part 2

Cyrus

schmittel wrote: »

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

yes

Hubertj

schmittel wrote: »

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

when the say a surplus, i presume that means they are occupied by 1-2 people and not actually empty? This then relates to a shortage of apartments or suitable "smaller houses" to suit older people downsizing etc?
Whatever about the bias of the report there are some very interesting statistics around future planning for housing types.

hometruths

Cyrus wrote: »

yes

Fair enough, I guess if we're dealing in perceptions it comes down to what each individual perceives.

Out of interest do you have any links to reports on housing shortage/supply/demand you've seen in which you perceive the findings to be correct?

Cyrus

schmittel wrote: »

Fair enough, I guess if we're dealing in perceptions it comes down to what each individual perceives.

Out of interest do you have any links to reports on housing shortage/supply/demand you've seen in which you perceive the findings to be correct?

I made an observation on the report. they appear to be saying that because 1-2 people inhabit a family home that there is a surplus of them but that only holds if people act rationally, and my point is that irish people tend to prefer houses over apartments so the perceived surplus may not be an actual surplus.

do you disagree?

did i say the report was incorrect?

like any report its based on a set of assumptions, i was questioning the assumptions if thats ok with you.

hometruths

Cyrus wrote: »

I made an observation on the report. they appear to be saying that because 1-2 people inhabit a family home that there is a surplus of them but that only holds if people act rationally, and my point is that irish people tend to prefer houses over apartments so the perceived surplus may not be an actual surplus.

do you disagree?

I certainly agree that people cannot be presumed to act rationally in the Irish property market!

I agree with the idea that there is a surplus.

Part of this is that some people prefer to live in a house with plenty of space and spare bedrooms, and if they can afford to do that, good for them, that is a demand that needs to be catered for.

However the surplus cannot all be explained simply by this cohort.

My perception is that the surplus is part of what I mean by the inefficient allocation of existing housing stock.

Eventually this will wash through and if we are building thousands of new family homes whilst we wait for it to wash through then the oversupply problem will be far greater than necessary.

hometruths

Cyrus wrote: »

like any report its based on a set of assumptions, i was questioning the assumptions if thats ok with you.

Of course it's fine with me, I was just curious to read a report in which you agreed with the assumptions.

Since the report's figures are derived from "Calculations, based on Census of Ireland" I've no doubt you're not the only one who will question the assumptions given the skepticism of the census around these parts!

GreeBo

Cyrus wrote: »

I made an observation on the report. they appear to be saying that because 1-2 people inhabit a family home that there is a surplus of them but that only holds if people act rationally, and my point is that irish people tend to prefer houses over apartments so the perceived surplus may not be an actual surplus.

do you disagree?

did i say the report was incorrect?

like any report its based on a set of assumptions, i was questioning the assumptions if thats ok with you.

It would also ignore the number of people who buy a home prior to having a family.
It would be very strange if people only bought houses after they had a family IMO.

c.p.w.g.w

Cyrus wrote: »

I made an observation on the report. they appear to be saying that because 1-2 people inhabit a family home that there is a surplus of them but that only holds if people act rationally, and my point is that irish people tend to prefer houses over apartments so the perceived surplus may not be an actual surplus.

do you disagree?

did i say the report was incorrect?

like any report its based on a set of assumptions, i was questioning the assumptions if thats ok with you.

We actually have very few high quality apartments...

I've lived in 4 apartments, 3 of them had Damp, Mold, Poor Heating & High Rent

The 1 apartment that was free from all the above, was in a small block built in the mid 80's, it was better located, cheaper rent & always warm it was great, and only 2 minute walk to the pub

Cyrus

GreeBo wrote: »

It would also ignore the number of people who buy a home prior to having a family.
It would be very strange if people only bought houses after they had a family IMO.

indeed i thought of that afterwards

people, if they can, like to skip a step given how costly and laborious buying a home can be.

Cyrus

schmittel wrote: »

Of course it's fine with me, I was just curious to read a report in which you agreed with the assumptions.

i question most things i read so with any report there will always be assumptions i disagree with.

Bass Reeves

The problem is that people are behaving rationally. Why if you own your own house and are in your 60's/70's would you relocate. There is probably no profit in it only hassle. If you move any distance you will lose contact with friends and neighbors that you have know for 30-40 years. It would be impossible to find a 2 bed apartment or house nearby. Even if you did and it's an apartment 20-50% may be rental properties with all the hassle for you that entails.

The risk associated with living in an apartment block where maybe the lift goes out of order and if slightly infirm you could be stranded in the apartment for weeks while it gets repaired if it dose. No privacy outside your apartment. Listening and overhearing family squabbles you do not want to know about.

It very rational not be taking this option

Pelezico

GreeBo wrote: »

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

I believe that the market will favour buyers in the next year.

We are living through the worst recession in the last hundred years.

This will impact on disposable income, savings, tax rates and demand.

I cannot understand why people think they can get on with their lives, by owning property. Owning property is a mill stone around their necks.

The next year will tell a tale.

hometruths

The report also makes an interesting point in conclusion:

The current context is one of strong demand and, with the exception of owner-occupied housing for larger households, continuing weak supply

Cyrus

Pelezico wrote: »

Owning property is a mill stone around their necks.

Living with your parents is better ?

ill stick to owning my own house thanks all the same

Cyrus

Pelezico wrote: »

I believe that the market will favour buyers in the next year.

We are living through the worst recession in the last hundred years.

This will impact on disposable income, savings, tax rates and demand.

I cannot understand why people think they can get on with their lives, by owning property. Owning property is a mill stone around their necks.

The next year will tell a tale.

so you have moved forward from Q3 now i take it? no longer autumn rather the next year.

Bass Reeves

Pelezico wrote: »

I believe that the market will favour buyers in the next year.

We are living through the worst recession in the last hundred years.

This will impact on disposable income, savings, tax rates and demand.

I cannot understand why people think they can get on with their lives, by owning property. Owning property is a mill stone around their necks.

The next year will tell a tale.

If it a millstone tell you son he should not bother buying and just rent.

Pelezico

Bass Reeves wrote: »

If it a millstone tell you son he should not bother buying and just rent.

He should buy. He wants to buy but does not like the thought of negative equity.

The balance is in favour of waiting. Already, the queues, real and virtual, have gone from house viewings.

It is just a matter of time.

Pelezico

Cyrus wrote: »

so you have moved forward from Q3 now i take it? no longer autumn rather the next year.

Oh I think it is happening already.

Cyrus

Pelezico wrote: »

He should buy. He wants to buy but does not like the thought of negative equity.

The balance is in favour of waiting. Already, the queues, real and virtual, have gone from house viewings.

It is just a matter of time.

if he can wait, if he is happy living with his parents, if you are happy to have him and if he believes that there is a financial benefit in waiting then why wouldnt he.

I dont think anyone looked at that scenario and said he shouldnt wait.

he has no rent so can increase his deposit and he believes prices will fall, even if they only fall 3-5% its worth his while.

its not everyones circumstances though.

Pelezico

Cyrus wrote: »

if he can wait, if he is happy living with his parents, if you are happy to have him and if he believes that there is a financial benefit in waiting then why wouldnt he.

I dont think anyone looked at that scenario and said he shouldnt wait.

he has no rent so can increase his deposit and he believes prices will fall, even if they only fall 3-5% its worth his while.

its not everyones circumstances though.

I think they will fall 10%. We cant get through the worst recession of the last 100 years unscathed.

Pelezico

Pelezico wrote: »

He should buy. He wants to buy but does not like the thought of negative equity.

The balance is in favour of waiting. Already, the queues, real and virtual, have gone from house viewings.

It is just a matter of time.

why does negative equity matter so much to him?
It really only matters if he plans on selling the house, if he is buying fir the long term, negative equity doesn't matter

hometruths

If we're going to see meaningful drops I'd expect to see them in expensive Dublin suburb family homes first, which will follow down the price range.

A good example is Gilford Park, Sandymount - premium houses in premium location at premium prices.

Most recent sale on 29th July - 20 Gilford Park at €1,060,000.00 represents an approximate 15% drop from the 20/12/2018 sale of 32 Gilford Park for €1,250,000.00

The 2020 sale price of number 20 was exactly the same as the April 2017 price of 9 Gilford Park but number 20 is clearly in superior condition.

A more direct comparison would be the 2016 sale of 40 Gilford Park for €1,165,000.00 - about 10% higher than the 2020 price paid for Number 20.

What does this tell us? Not a lot in isolation. It could be that Sandymount homes have fallen 15% from their 2018 peak, or equally it could just be an anomaly in a covid disrupted market.

At the risk of winding up Greebo, we'll just have to wait and see!

The_Conductor

@schmittel at least you've picked very obvious like-for-like examples on which to base your comparisons.
I suspect that it represents a further stratification of the market- and cannot be equally applied in a similar manner at the different price points- lower priced homes will be more resilient to price drops- than higher priced units.

hometruths

The_Conductor wrote: »

@schmittel at least you've picked very obvious like-for-like examples on which to base your comparisons.
I suspect that it represents a further stratification of the market- and cannot be equally applied in a similar manner at the different price points- lower priced homes will be more resilient to price drops- than higher priced units.

For sure, if drops are to happen they'll happen at top end of market sooner and sharper.

But if we were to see widespread drops of approx €200k on €1.25m houses (15%), I think we would see approx 75k drops on €500k (15%) houses in time.

Cyrus

schmittel wrote: »

If we're going to see meaningful drops I'd expect to see them in expensive Dublin suburb family homes first, which will follow down the price range.

A good example is Gilford Park, Sandymount - premium houses in premium location at premium prices.

Most recent sale on 29th July - 20 Gilford Park at €1,060,000.00 represents an approximate 15% drop from the 20/12/2018 sale of 32 Gilford Park for €1,250,000.00

The 2020 sale price of number 20 was exactly the same as the April 2017 price of 9 Gilford Park but number 20 is clearly in superior condition.

A more direct comparison would be the 2016 sale of 40 Gilford Park for €1,165,000.00 - about 10% higher than the 2020 price paid for Number 20.

What does this tell us? Not a lot in isolation. It could be that Sandymount homes have fallen 15% from their 2018 peak, or equally it could just be an anomaly in a covid disrupted market.

At the risk of winding up Greebo, we'll just have to wait and see!

on the face of it even at the same price 20 seems more appealing than 32 (bit fresher inside etc)

there may be some other reason that supports the difference but nothing that springs to mind.

a few people have said, me included, that above 800k prices have been slowly decreasing for the past few years as this is the point where affordability has kicked in even for very well paid salaried folk. Effectively for a 1m house you need at least 200k plus circa 250k of income (if kids and childcare costs are involved). There are only so many buyers in that bracket.

32 came on at 1.1 but clearly had more than one interest party 20 was marketed at 10% less and achieved 15% less in reality.

also a little odd, the smaller house (32) was a 4 bed and the larger (20) was marketed as a 3 bed.

Hubertj

schmittel wrote: »

If we're going to see meaningful drops I'd expect to see them in expensive Dublin suburb family homes first, which will follow down the price range.

A good example is Gilford Park, Sandymount - premium houses in premium location at premium prices.

Most recent sale on 29th July - 20 Gilford Park at €1,060,000.00 represents an approximate 15% drop from the 20/12/2018 sale of 32 Gilford Park for €1,250,000.00

The 2020 sale price of number 20 was exactly the same as the April 2017 price of 9 Gilford Park but number 20 is clearly in superior condition.

A more direct comparison would be the 2016 sale of 40 Gilford Park for €1,165,000.00 - about 10% higher than the 2020 price paid for Number 20.

What does this tell us? Not a lot in isolation. It could be that Sandymount homes have fallen 15% from their 2018 peak, or equally it could just be an anomaly in a covid disrupted market.

At the risk of winding up Greebo, we'll just have to wait and see!

i wouldnt live in Sandymount for 1 simple reason - getting stuck at the DART tracks drives my crazy!

Cyrus

Hubertj wrote: »

i wouldnt live in Sandymount for 1 simple reason - getting stuck at the DART tracks drives my crazy!

the smell would put me off personally:o

hometruths

Cyrus wrote: »

on the face of it even at the same price 20 seems more appealing than 32 (bit fresher inside etc)

there may be some other reason that supports the difference but nothing that springs to mind.

a few people have said, me included, that above 800k prices have been slowly decreasing for the past few years as this is the point where affordability has kicked in even for very well paid salaried folk. Effectively for a 1m house you need at least 200k plus circa 250k of income (if kids and childcare costs are involved). There are only so many buyers in that bracket.

32 came on at 1.1 but clearly had more than one interest party 20 was marketed at 10% less and achieved 15% less in reality.

also a little odd, the smaller house (32) was a 4 bed and the larger (20) was marketed as a 3 bed.

I'd agree that number 20 seems to be a far nicer house.

The larger, cheaper house obviously had a scrupulous estate agent who did not want to market the very large attic bedroom as an official bedroom.

The 4th bedroom in no 32 is only 1.79m wide which is a bit rubbish really.

Cyrus

schmittel wrote: »

I'd agree that number 20 seems to be a far nicer house.

The larger, cheaper house obviously had a scrupulous estate agent who did not want to market the very large attic bedroom as an official bedroom.

The 4th bedroom in no 32 is only 1.79m wide which is a bit rubbish really.

i think it was that 20 was 3 bed but larger (the 4th bed being the attic room)

32 was 4 bed but smaller (didnt have or didnt include the space in the attic)

one assumes the box room in 20 became a bathroom.

they are the same house so the extra size is in the attic, im not sure if you are technically supposed to list it, or maybe you can but just not call it a bedroom.

Pelezico

bubblypop wrote: »

why does negative equity matter so much to him?
It really only matters if he plans on selling the house, if he is buying fir the long term, negative equity doesn't matter

Why should negative equity matter?

Is the Irish obsession with owning a home so great that they would happily buy, quite relaxed about being in an immediate loss?

It matters...lots. one bad mistake can mean years of heartache. Just ask those who bought at peak in 2006-8.

This time...we know about the economic catastrophe that is covid.

Why would anyone buy now? Pure madness....they will repent at their leisure.