Irish Property Market 2020 Part 2

hometruths

Augeo wrote: »

That is essentially my point "Can't see how it would work really, 10% less if you go to Kildare, 20% if you go to Roscommon ......."

From the employers point of view one of the benefits of WFH is in it's simplicity. There is no chance they are going to start devising payscales based on location.

It will be very simple.

Do we need this job in the office 5 days a week? Yes, grand, pay is X so. No? Pay is Y so. Live where you like. As long as you're doing your job well, we don't care.

PropQueries

schmittel wrote: »

I think it's unlikely that the Irish SMEs who don't currently model their payscales on Facebook are going to start any time soon.

True and it will probably take time. But remember, in many big companies, the older staff members may be on defined benefit pension schemes while all the younger staff are on defined contribution pension schemes.

I reckon location based salaries will be implemented in a similar way.

Cyrus

schmittel wrote: »

From the employers point of view one of the benefits of WFH is in it's simplicity. There is no chance they are going to start devising payscales based on location.

It will be very simple.

Do we need this job in the office 5 days a week? Yes, grand, pay is X so. No? Pay is Y so. Live where you like. As long as you're doing your job well, we don't care.

either there will be payscales based on location, or more likely, office based jobs in cities will pay one salary, WFH based jobs, live where you like in ireland will pay another.

One thing is for sure, you wont get paid the same if WFH becomes as widescale as some of you are suggesting.

We agree on that.

Hubertj

schmittel wrote: »

According to the 2016 census (apologies to the census deniers!), over half a million people work in Dublin city and suburbs on a daily basis.



So 25% of people who work in Dublin have, for whatever reason, chosen to live outside Dublin. Many of those endure a fairly draining daily commute.

Surely if rising are numbers are choosing to live outside the city and commute, it stands to reason that numbers will only increase if WFH becomes an option, i.e live outside the city and work without the commute?

It baffles me that this could possibly be considered an illogical assumption.

its all about flexibility. However, if my current job allowed WFH fulltime, I wouldn't move outside commutable distance to Dublin. What if i moved job and it required me to be in the office 2 days per week etc.... Flexibility has to work both ways.

hometruths

Hubertj wrote: »

its all about flexibility. However, if my current job allowed WFH fulltime, I wouldn't move outside commutable distance to Dublin. What if i moved job and it required me to be in the office 2 days per week etc.... Flexibility has to work both ways.

I am not suggesting that somebody like you is going to leave Dublin if your job says crack on Hubertj, work from home.

You have bought yourself a nice home in Dublin, and from what I can gather from your posts, you are very happy and settled there, with no incllnation to leave notwithstanding your work situation.

The impact will come from FTBs who are currently renting in Dublin, or apartment owners who are looking at moving up the ladder to a long term family home.

WFH opens up many more options for them than have previously been available.

Hubertj

schmittel wrote: »

I am not suggesting that somebody like you is going to leave Dublin if your job says crack on Hubertj, work from home.

You have bought yourself a nice home in Dublin, and from what I can gather from your posts, you are very happy and settled there, with no incllnation to leave notwithstanding your work situation.

The impact will come from FTBs who are currently renting in Dublin, or apartment owners who are looking at moving up the ladder to a long term family home.

WFH opens up many more options for them than have previously been available.

i agree, the point i was making is i wouldn't move too far from a metropolitan area (trying not to be Dublin focused) as it could limit you job wise if your situation changed. I think you would need to live within a commutable distance.

Assetbacked

PropQueries wrote: »

Mark Zuckerberg has already said he expects to pay lower salaries to workers living in lower cost areas.

He said employees "should not expect to get Silicon Valley salary levels if they relocate to less-expensive areas.".

Link to RTE article here: https://www.rte.ie/brainstorm/2020/0527/1142847-lower-wages-no-promotions-working-from-home/

The reason for that is because Facebook are covering up for the fact their business (online advertisement) is going to be hit in a big way once the economy in the US is unfrozen. Marketing is always the first budget to be hit when cutting costs, for example, Airbnb have reduced head count by 25% and its advertising budget has been slashed. There is also an advertising boycott ongoing with Facebook the past couple of months

brisan

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 (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.

Agreed unless you are intending to sell it makes no difference
If your house falls in price the house you are buying will have fallen roughly the same
If you are trading up you have a smaller mortgage ,trading down slightly less cash in your pocket.
But a family home is not a disposable asset

PropQueries

Assetbacked wrote: »

The reason for that is because Facebook are covering up for the fact their business (online advertisement) is going to be hit in a big way once the economy in the US is unfrozen. Marketing is always the first budget to be hit when cutting costs, for example, Airbnb have reduced head count by 25% and its advertising budget has been slashed. There is also an advertising boycott ongoing with Facebook the past couple of months

You do have a valid point but according to CNBC: "Facebook reports 11% revenue growth even amid pandemic slowdown". Fortunately for Facebook, there's really only three options when advertising online i.e. Facebook, Google or Amazon.

But maybe the next quarter will show different results.

CNBC link is here: https://www.cnbc.com/2020/07/30/facebook-fb-earnings-q2-2020.html

Markitron

brisan wrote: »

Agreed unless you are intending to sell it makes no difference
If your house falls in price the house you are buying will have fallen roughly the same
If you are trading up you have a smaller mortgage ,trading down slightly less cash in your pocket.
But a family home is not a disposable asset

I'm not sure if it was in this thread, it may have been in the currently buying/selling thread, but a while back some spacer on here refused to pay asking on a house because the current owners had paid 100k less for it in 2005.

Some people get really obsessed with the value of their property.

Vikings

Can everyone agree that WFH will not have any impact on 2020 property prices, kick it to touch and discuss it elsewhere and get back to talking about the current property market?

Viewed a house today asking 450k commuter town just outside Dublin. Sold for 410k 3 years ago and received significant work. EA reckons it'll go for 500k. I think in the present market it'll certainly fetch over asking probably 475-480.

brisan

Cyrus wrote: »

Because we hit affordability limits in Dublin a few years ago at most levels from 500k to 1m. Stuff was/is still selling but more slowly as developers have been slow to reduce prices on new builds which are selling at decent premium to old stock.

I know of estates with houses ranging from 900k to 1.1m they all sold but it took 18 months.

i know 6 houses at 895k in a prime location and only 5 have sold in 18 months

cnocbui

For those anticipating a market decline: i hope to soon be putting a rural property with high amenity values on the market. I have already had two potential buyers who I informed of the upcoming sale, offer up to 13% above a valuation done only 2 or so months ago.

Now my only conundrum is whether to list through a REA and put it on the open market or go with the bird in hand.

brisan

Springy Turf wrote: »

And you still haven't addressed some of the reasons why buying now is right for some people.

Here's a scenario for you:

- A Couple with a 2 almost school age children and a deposit saved of 100,000.
- They are currently renting a 2 bedroom apartment at 1900 euros p/m outside their preferred schools catchment area
- They are both working from home for the foreseeable future due to CoViD
- There are currently no suitable rental properties inside the catchment area. If one comes up, they would be committed to a new 12 month lease, and likely have to pay additional rent.
- They have found a 3 bed house at €350,000 that suits them, with a mortgage of 1100 per month, near the school they want their kids to go to.
- They know that houses near this school in their price range come on the market 2-3 times a year.
- The house will suit their needs for at least 10 years.


So I can see 3 options:

1: Stay in the current place, deal with the stress of the lack of space and garden for a 12-15 months and risk missing out on getting their kids into their preferred school.
2: Hope that a rental comes up in their school area, and then commit to a 12 month lease at higher rent then they are currently paying.
3: Buy the house that suits them with the mortgage they can afford, accepting that the market will likely drop by some unknown amount, over some unknown timeframe

Which do they go for?

I'd be interested to see what other posters think as well.

No 3
I cannot see any other option if they want to move on with their lives and give their kids a headstart in life

Pelezico

Springy Turf wrote: »

And you still haven't addressed some of the reasons why buying now is right for some people.

Here's a scenario for you:

- A Couple with a 2 almost school age children and a deposit saved of 100,000.
- They are currently renting a 2 bedroom apartment at 1900 euros p/m outside their preferred schools catchment area
- They are both working from home for the foreseeable future due to CoViD
- There are currently no suitable rental properties inside the catchment area. If one comes up, they would be committed to a new 12 month lease, and likely have to pay additional rent.
- They have found a 3 bed house at €350,000 that suits them, with a mortgage of 1100 per month, near the school they want their kids to go to.
- They know that houses near this school in their price range come on the market 2-3 times a year.
- The house will suit their needs for at least 10 years.


So I can see 3 options:

1: Stay in the current place, deal with the stress of the lack of space and garden for a 12-15 months and risk missing out on getting their kids into their preferred school.
2: Hope that a rental comes up in their school area, and then commit to a 12 month lease at higher rent then they are currently paying.
3: Buy the house that suits them with the mortgage they can afford, accepting that the market will likely drop by some unknown amount, over some unknown timeframe

Which do they go for?

I'd be interested to see what other posters think as well.

I think you are in a great position.. to wait. I would advise you to rent a nice place and wait for one year.

Enjoy the house price falls and they will come. We are in the midst of the worst recession in 100 years.

The person selling tou the house which you want to live in will pay for your rent for the year. Any savings beyond that is a further bonus.

You will get credit with a deposit like that.

Good luck.

Cyrus

brisan wrote: »

i know 6 houses at 895k in a prime location and only 5 have sold in 18 months

5 out of the 6 or 5 out of 11?

depends on your definition of prime as well, some locations are more prime than others, whatever it is, houses at that price on the northside dont tend to shift as well as similar on the southside.

Pelezico

This thread is supposed to be about house prices not a WFH discussion.


WFH is a minor issue compared to the economic disaster we see every day.

The consequences of the economic disaster have not yet been felt. The government is supporting a dying edifice.

PropQueries

Vikings wrote: »

Can everyone agree that WFH will not have any impact on 2020 property prices, kick it to touch and discuss it elsewhere and get back to talking about the current property market?

Viewed a house today asking 450k commuter town just outside Dublin. Sold for 410k 3 years ago and received significant work. EA reckons it'll go for 500k. I think in the present market it'll certainly fetch over asking probably 475-480.

But all the Google employees are WFH until next July at the earliest. My understanding, from London anyway, is that they are looking at ways in the meantime to make many of these positions WFH permanently. But we will see.

In the meantime, I'd assume at least a percentage of the Google and similar company employees have returned to their home countries and their apartments etc. should become available as their leases expire in the next month or two and aren't renewed, for the next 12 months anyway.

Shouldn't that add significantly to supply? And, that doesn't include many of the ex-AirBnB and ex-student houses that should also re-enter the market in the next 6 weeks or so. Not counting the student accommodation units currently seeking planning permission to become residential. More supply should mean lower rents in the next few months as they re-enter the market.

brisan

Bass Reeves wrote: »

If Blackstone thinks that there equity is gone and cannot be recovered they will walk away. However it's just as likely they are trying to discount the existing loans. The pillar lenders will hold tough as GS is exposed. The questions do Blackstone believe that Blanchardtown is not capable of recovering any of there investment.

Like I said hardball with a balloon

Judging by the daily press releases of retail job losses in Britain,and my own experience of walking around Dublin city centre I would say commercial landlords of retail property are in for a rude awakening and major losses.
People have got used to online shopping and the retail experience as we know it is dead
Masks ,lack of changing rooms ,inability to browse at your leisure .all are a deathknell for high street retail

brisan

Cyrus wrote: »

ultimately builders build what people want, and most people want a house not an apartment and will stretch to get it.

also you refer to WFH pushing people to look outside dublin, if that all comes to pass prices in dublin will decrease but these cheap houses outside will start to get more expensive.

With the availability of cheap plentiful building land they will never reach Dublin prices.
A new build in wexford costing 235k will cost 400k in Dublin
I do not see where the 165k difference comes from.
i have always believed builders will charge what they can get for a house not what its worth,and I believe their published margins are pure fantasy

MacronvFrugals

brisan wrote: »

With the availability of cheap plentiful building land they will never reach Dublin prices.
A new build in wexford costing 235k will cost 400k in Dublin
I do not see where the 165k difference comes from.
i have always believed builders will charge what they can get for a house not what its worth,and I believe their published margins are pure fantasy

If legit those margins are astonishing

brisan

PropQueries wrote: »

The government policy and they do seem to have a real intention to do it, is to hook up every existing house in the country to super-fast broadband.

While this is the short-term benefit for potential WFH opportunities, I think the next big impact, admittedly about 10 -15 years away, is the self-driving car. This is what will truly open up every rural home to a potential buyer. And, apparently, there's tens of thousands of them right there, already built and ready to go.

https://www.rte.ie/news/business/2020/0820/1160212-virgin-media-broadband/

cubatahavana

Back to topic, my property is already nearly a 10% over asking in the 2 1/2 weeks that it has been on the market. I’m not complaining. More viewings this weekend

Graham

brisan wrote: »

i have always believed builders will charge what they can get for a house not what its worth

If they're getting the asking price you can assume that's what it's worth. No?

That you might not think it's worth it is neither here nor there.

brisan

smurgen wrote: »

Rural Ireland isn't bustling,you drew that inference yourself. The point is that the main advantage of living in Dublin like the bustling lifestyle and the access to higher paying jobs has now changed dramatically. So is it still worth the premium on housing?

Having spent a week in killarney recently it was more bustling than Dublin city has been at any time over the last 5 months
Granted all the businesses know that come September that they are in the sh1t ,once the kids are back in school

brisan

Graham wrote: »

I don't think it will take huge number for it to be significant.

Exactly take 10,000 FTB out of the Dublin market over a 2 year period and watch the results

Cyrus

brisan wrote: »

With the availability of cheap plentiful building land they will never reach Dublin prices.
A new build in wexford costing 235k will cost 400k in Dublin
I do not see where the 165k difference comes from.
i have always believed builders will charge what they can get for a house not what its worth,and I believe their published margins are pure fantasy

you think cairn and glenveagh are publishing false accounts?

Springy Turf

Pelezico wrote: »

I think you are in a great position.. to wait. I would advise you to rent a nice place and wait for one year.

Enjoy the house price falls and they will come. We are in the midst of the worst recession in 100 years.

The person selling tou the house which you want to live in will pay for your rent for the year. Any savings beyond that is a further bonus.

You will get credit with a deposit like that.

Good luck.

This isn't my situation specifically to be clear. But in my view, the very obvious choice in this case is to go ahead and buy rather than spending 24000+ a year in rent to be in a precarious rental situation.

I think you will be very much in the minority if you think this couple shouldn't go ahead with their 350k deal.

brisan

awec wrote: »

I suggested ages ago that any movement of people out of Dublin to rural properties would drive up prices of properties in rural areas, as areas with traditional low demand see increased demand. Pretty much a carbon copy of what happened in the Dublin commuter belt the past 8 or 9 years, but not to the same scale.

Of course, this idea was rubbished and we were told it couldn't possibly happen, prices would totally collapse everywhere. There was no way increased demand in rural areas could have a positive affect on prices there. Anyone who suggested such a thing was a lunatic property bull or an EA.

Bigger availability of cheaper building land in rural areas.
Do you not think councils would fast track planning and builders build quickly if they thought there was a market

brisan

awec wrote: »

Huh?

That's not what is being suggested. The person in Wexford will get paid less than the person in Dublin.

If you live in Dublin, you get a Dublin salary. If you live in Wexford you get a Wexford salary.

So 2 people in the same company doing exactly the same job and one gets paid less
Good luck to the company if the one getting paid less is a woman