Irish Property Market 2020 Part 2

hometruths

PropQueries wrote: »

Actually at every price level.

Here is the report from Goodbody's Stockbrokers last year where they "crunched the numbers and found that in the four quarters to the first three months of this year, there were 2,500 more units built than sold nationwide. Most of this occurred in Dublin"

Irish Times Article Here: https://www.irishtimes.com/business/construction/despite-shortage-houses-being-left-unsold-1.3928592

Oversupply eh? It seems the situation continued for the rest of 2019 as levels of unsold stock rose.

I'd be very interested to read the full Goodbody report, but cannot find it linked anywhere.

Pelezico

Pelezico wrote: »

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.

I bought in 2009, the price of my house went down I'm sure.
Not that I was looking at the property market, cos I was living in a house with no intention on selling.
Didn't matter to me how much the house went down.

smurgen

bubblypop wrote: »

I bought in 2009, the price of my house went down I'm sure.
Not that I was looking at the property market, cos I was living in a house with no intention on selling.
Didn't matter to me how much the house went down.

Didn't matter to you if you got good value for money or not? Why not pay 10,20% over asking so at any bidding since you're going to live in the house right?

awec

smurgen wrote: »

Didn't matter to you if you got good value for money or not? Why not pay 10,20% over asking so at any bidding since you're going to live in the house right?

What defines "good value for money"?

If you get a house that you really like at a monthly cost you can comfortably afford then you've played the property game and won. Move on with your life, enjoy your home.

If you're the sort of person who will always want to compare yourself to others then you'll never win, and buying a home probably isn't for you, because there will always be someone who gets a better deal than you do. Always. You'll just end up miserable. Stick to renting, and least then you can constantly move to the cheapest place and be content knowing you've got "value for money", whatever that is.

Pelezico

smurgen wrote: »

Didn't matter to you if you got good value for money or not? Why not pay 10,20% over asking so at any bidding since you're going to live in the house right?

That is a nonsense. Why bother expecting any value for money in any transaction?

What the poster is doing is rationalising a decision which went badly wrong.

That is ok too. We all rationalise every single day.

awec

Pelezico wrote: »

That is a nonsense. Why bother expecting any value for money in any transaction?

What the poster is doing is rationalising a decision which went badly wrong.

Did it?

If I buy stocks tomorrow that I intend to keep for 5 years before cashing out, and they drop in value on Friday, has it gone "badly wrong"?

What about if they're worth 200% of their value in 5 years time? When I sell them, will I lament the fact that for a few months after I bought them, they were in the red?

smurgen

awec wrote: »

What defines "good value for money"?

If you get a house that you really like at a monthly cost you can comfortably afford then you've played the property game and won. Move on with your life, enjoy your home.

If you're the sort of person who will always want to compare yourself to others then you'll never win, and buying a home probably isn't for you, because there will always be someone who gets a better deal than you do. Always. You'll just end up miserable. Stick to renting, and least then you can constantly move to the cheapest place and be content knowing you've got "value for money", whatever that is.

Bizarre logic.who mentioned comparing to others? I'm talking about ensuring you buy as cheaply as possible for the house you want to ensure your life isn't restricted after purchase.

hometruths

Conor Skehan, then Chairman of the Housing Agency writing in the Independent in 2015 raises some interesting points:

The Irish housing bubble that started to crash in 2008 was characterised by an over-supply of houses in areas with little or no demand.

A similar crash could be caused by an over-supply of the wrong types of houses - a type for which there is less requirement. In the very near future, Ireland will need a dramatically different range of house types, according to the 2014 Housing Agency Report on future Housing Need....

...If we continue the business-as-usual production of expensive semi-Ds, the house type favoured by traditional builder/developers, then we may be headed for trouble all over again...

...Unfortunately the conservative construction, property economics and planning sectors will unwittingly conspire to stick with the tried and tested formula of semi-detached housing estates.

Houses take a few years to plan and build. In the worst case scenario, we will discover that we have built the wrong kind of houses at exactly the same time as the need fully emerges for houses of a new and different type.

Fast forward 5 years and we have builders left with levels of unsold stock of expensive semi-ds in the suburbs, according to Goodbody stockbrokers.

We also thanks to COVID have a clear trend towards accelerated implementation of WFH, giving many of the potential buyers of these houses now the option of looking far beyond the suburbs.

I get that everybody's circumstances are different, and I understand the argument about not putting one's life on hold, but if I was about to sign a 30 year mortgage contract for an expensive semi d in suburbia I'd being giving the point Conor Skehan raises some very serious consideration.

Pelezico

awec wrote: »

What defines "good value for money"?

If you get a house that you really like at a monthly cost you can comfortably afford then you've played the property game and won. Move on with your life, enjoy your home.

If you're the sort of person who will always want to compare yourself to others then you'll never win, and buying a home probably isn't for you, because there will always be someone who gets a better deal than you do. Always. You'll just end up miserable. Stick to renting, and least then you can constantly move to the cheapest place and be content knowing you've got "value for money", whatever that is.

Good value for money is when the house that went for x last year is x minus 15% this year. Boy, do you feel good knowing you got value for money and your neighbour overpaid.

Oh...and he is better at golf than you....but he overpaid.

Vikings

smurgen wrote: »

Didn't matter to you if you got good value for money or not? Why not pay 10,20% over asking so at any bidding since you're going to live in the house right?

I don't think you understand why some people buy a home.

Value for money is important to me when I'm buying a new television.

I'm looking at buying a house right now. Asking price is X. I consider it, how it would suit my life, consider my current finances and then decide I would pay Y for that house. If I get it for less than Y then I have got value for money. If I pay Y for it I am happy because I have bought the home I want.

It doesn't matter to me what another person would pay for it in 1 year, 2 years time. I won't be sitting at the kitchen table complaining about how I could have gotten better value by waiting.

awec

Pelezico wrote: »

Good value for money is when the house that went for x last year is x minus 15% this year. Boy, do you feel good knowing you got value for money and your neighbour overpaid.

Oh...and he is better at golf than you....but he overpaid.

But this is such a gross over simplification of the real world. Have you ever actually bought anything?

Value for money is when you buy it for less than someone else?

Vikings

smurgen wrote: »

Bizarre logic.who mentioned comparing to others? I'm talking about ensuring you buy as cheaply as possible for the house you want to ensure your life isn't restricted after purchase.

Restricted in what way exactly?

awec

smurgen wrote: »

Bizarre logic.who mentioned comparing to others? I'm talking about ensuring you buy as cheaply as possible for the house you want to ensure your life isn't restricted after purchase.

What has life being restricted got to do with anything? You are mixing up different things now.

You could buy your house at the absolute bottom of the market, and end up living off koka noodles because you end up unemployed, while I could buy mine at the top and suffer no financial consequence whatsoever, happily living my life.

Pelezico

awec wrote: »

Did it?

If I buy stocks tomorrow that I intend to keep for 5 years before cashing out, and they drop in value on Friday, has it gone "badly wrong"?

What about if they're worth 200% of their value in 5 years time? When I sell them, will I lament the fact that for a few months after I bought them, they were in the red?

Well if he bought in 2005, he is still under water. In my world, that is bad.

Rationalising the decision...he is still living there and deriving a utility value from the house but he has paid over the years.

He may still be paying if he does not have any equity and cannot avail of good mortgage deals.

awec

Pelezico wrote: »

Well if he bought in 2005, he is still under water. In my world, that is bad.

Rationalising the decision...he is still living there and deriving a utility value from the house but he has paid over the years.

He may still be paying if he does not have any equity and cannot avail of good mortgage deals.

It's only bad if he wants to move.

If he is very happy where he is living, and he is comfortably paying the mortgage, how is it bad?

It's not the perfect situation, far from it, but it's not bad either. There are much worse situations to be in than be in negative equity in a house you love that you can continue to service the mortgage on.

Of course, if we were talking about a property that he bought as an investment in 2005 that's a whole other ball game, and that would certainly be a bad decision that has proven costly, because in that scenario financial success is the only indicator that really matters.

Hubertj

I bought my house about 5 years ago. I haven’t thought about it’s value since I bought it. I don’t give a toss If prices have increased x%. It’s a home to the family, not an asset that increases or decreases in value. Maybe I’m in a minority with this point of view.

Pelezico

awec wrote: »

It's only bad if he wants to move.

If he is very happy where he is living, and he is comfortably paying the mortgage, how is it bad?

It's not the perfect situation, far from it, but it's not bad either. There are much worse situations to be in than be in negative equity in a house you love that you can continue to service the mortgage on.

Of course, if we were talking about a property that he bought as an investment in 2005 that's a whole other ball game, and that would certainly be a bad decision that has proven costly, because in that scenario financial success is the only indicator that really matters.

No...it is bad if he wanted to remortgage during this time.

And..for those buying now, if they fall, don't post on boards.ie bemoaning lack of access to future mortgage deals.

You will probably not be eligible for quite some time.

awec

Pelezico wrote: »

No...it is bad if he wanted to remortgage during this time.

And..for those buying now, if they fall, don't post on boards.ie bemoaning lack of access to future mortgage deals.

You will probably not be eligible for quite some time.

Again, this will vary massively from individual to individual.

Some of those tracker deals that tiger buyers are on, you'd have people today donating arms and legs to get their deal.

Of course, the thing we're forgetting here is that with the removal of 100% mortgages, negative equity is not quite the same beast as it was, and getting back into positive equity is not the same mountain to climb.

smurgen

awec wrote: »

What has life being restricted got to do with anything? You are mixing up different things now.

You could buy your house at the absolute bottom of the market, and end up living off koka noodles because you end up unemployed, while I could buy mine at the top and suffer no financial consequence whatsoever, happily living my life.

You could or you could buy the house you want at a reasonable price at a discount to your neighbors. Fellas thing people are in the market for the Taj Mahal. Most people are buying generic semi d's. They're not that rare. Get the gaff your really want up to your neck in debt and end up unemployed. See how much you can happily live you life then.

Pelezico

Hubertj wrote: »

I bought my house about 5 years ago. I haven’t thought about it’s value since I bought it. I don’t give a toss If prices have increased x%. It’s a home to the family, not an asset that increases or decreases in value. Maybe I’m in a minority with this point of view.

Guys love their house going up un value. It it is the greatest rationalisation of all. You may be in the minority...but you are on this bb lots...so I guess you are just like all the other guys.

Cyrus

smurgen wrote: »

You could or you could buy the house you want at a reasonable price at a discount to your neighbors. Fellas thing people are in the market for the Taj Mahal. Most people are buying generic semi d's. They're not that rare. Get the gaff your really want up to your neck in debt and end up unemployed. See how much you can happily live you life then.

What’s a reasonable price and how do you derive it .

awec

smurgen wrote: »

You could or you could buy the house you want at a reasonable price at a discount to your neighbors. Fellas thing people are in the market for the Taj Mahal. Most people are buying generic semi d's. They're not that rare. Get the gaff your really want up to your neck in debt and end up unemployed. See how much you can happily live you life then.

Well if you end up unemployed, you'll not be living your life at all no matter if your house cost 100k or 500k. But anyway, again this will vary massively from person to person.

You could buy your house at 80% of the price your neighbour paid, and move in feeling all smug thinking you're an economic genius and that your neighbour is a loser. Then next year, someone could move in beside you at 80% of the price you paid. By your logic, you'd be a loser here. In reality, you wouldn't give two fcuks.

You will realise this when you actually buy a house.

If you can afford the monthly repayments, then the value or price of your house is of very little consequence until you want to sell it. Nobody is getting their house re-valued every year to figure out if their net worth on paper has increased (ok, maybe a few weirdos do). Nobody engages in this willy waving of comparing what you paid compared to someone else, because as I said, there will always be someone who got a better deal than you.

Cyrus

schmittel wrote: »

Conor Skehan, then Chairman of the Housing Agency writing in the Independent in 2015 raises some interesting points:



Fast forward 5 years and we have builders left with levels of unsold stock of expensive semi-ds in the suburbs, according to Goodbody stockbrokers.

We also thanks to COVID have a clear trend towards accelerated implementation of WFH, giving many of the potential buyers of these houses now the option of looking far beyond the suburbs.

I get that everybody's circumstances are different, and I understand the argument about not putting one's life on hold, but if I was about to sign a 30 year mortgage contract for an expensive semi d in suburbia I'd being giving the point Conor Skehan raises some very serious consideration.

Correct me if I’m wrong but weren’t all of the ‘ghost estates ‘ outside Dublin ?

Cyrus

awec wrote: »

Well if you end up unemployed, you'll not be living your life at all no matter if your house cost 100k or 500k. But anyway, again this will vary massively from person to person.

You could buy your house at 80% of the price your neighbour paid, and move in feeling all smug thinking you're an economic genius and that your neighbour is a loser. Then next year, someone could move in beside you at 80% of the price you paid. By your logic, you'd be a loser here. In reality, you wouldn't give two fcuks.

You will realise this when you actually buy a house.

Exactly

It’s not a game.

If the whole thing is that transactional to you why bother at all , just rent away and be smug looking at all the suckers with mortgages .

smurgen

awec wrote: »

Well if you end up unemployed, you'll not be living your life at all no matter if your house cost 100k or 500k. But anyway, again this will vary massively from person to person.

You could buy your house at 80% of the price your neighbour paid, and move in feeling all smug thinking you're an economic genius and that your neighbour is a loser. Then next year, someone could move in beside you at 80% of the price you paid. By your logic, you'd be a loser here. In reality, you wouldn't give two fcuks.

You will realise this when you actually buy a house.

If you can afford the monthly repayments, then the value or price of your house is of very little consequence until you want to sell it. Nobody is getting their house re-valued every year to figure out if their net worth on paper has increased.

Wrong way of thinking. I'd be thinking the original neighbors was even more unlucky? You wouldn't think this? So given the choice in this scenario you're saying you wouldn't rather be the most recent neighbour?

Springy Turf

Pelezico wrote: »

They will when they try to remortgage. That is when a while new bunch of threads will start on boards.ie bemoaning risk based mortgages.

So your advice would be to not buy now if you plan on remortgaging in the near future? I'd agree with that - but that's a very peculiar position to be in. The interest rates don't have a much lower than 2.2/2.3% to go - particularly if banks are saddled with a load of bad debt.

You say its madness to buy, but you won't directly address any of the very valid reasons why it might be important for someone to buy now.

hometruths

Cyrus wrote: »

Correct me if I’m wrong but weren’t all of the ‘ghost estates ‘ outside Dublin ?

In 2008 yes. There won't be ghost estates in Dublin, nobody is suggesting that.

awec

smurgen wrote: »

Wrong way of thinking. I'd be thinking the original neighbors was even more unlucky? You wouldn't think this?

Nope, because everyone's circumstances are different.

The original neighbour could be living in their dream house, comfortably paying the mortgage off. Why would I feel sorry for them?

Personally, I would never suggest anyone buy a house if they are not comfortable on the mortgage (no stretching to pay it or forking out 40/50% of your income) and they do not want to live there for a long time, because this is when it genuinely becomes a real issue.

Mic 1972

nerrad01 wrote: »

well its not unrealistic that they could drop by 10%, the entire economy is being artificially propped up and we are realistically facing a major recession, the questions is will this effect the massive under supply of properties that we have. No one knows, i personally think a drop of between 10% is a fairly realistic outcome

I agree with the negative outlook on our economy, but all the signals have been out for long enough now. And still no signs of decline in house prices. Whatever it is that is driving the prices up it doesn't seem affected by any of these factors.
Bear in mind that in the last few months alone rents have dropped quite significantly and also there aren't many jobs out there left compared to last year. Why would this not impact the property market?

Hubertj

Pelezico wrote: »

Guys love their house going up un value. It it is the greatest rationalisation of all. You may be in the minority...but you are on this bb lots...so I guess you are just like all the other guys.

Why though? I’m never going to sell it. Why does it matter how much something I’m never going to sell is worth?
In your case I feel for your son. You seem to be advising home but you really don’t have a clue what you’re talking about. Perhaps let him be a grown up and find his own way. Or maybe he’s not capable of that.