Anyone thinking home prices will fall in 2021

mjshravan

Hi,

As corona pandemic will not end anytime soon, and it will bound to have ripple effects in 2021 anyone thinking prices will fall next year

hometruths

I suspect there is reasonable chance.

El Gato De Negocios

Was speaking to a mortgage sales manager today. He doesn't work for one of the big retail banks but he was saying their new drawdowns year on year are down somewhere in the region of 75%. Recurring issues are peoples jobs being impacted by covid and house valuations that were done pre covid are not being accepted post covid by banks. Bank valuations are coming in lower and vendors are unwilling to adjust accordingly so the purchasers are not able to complete the sale at the agreed price.

TheSheriff

Nobody knows, people have been telling me on this forum since 2018 a housing collapse was imminent.

So rather than 2021, try 202x.

(where x is any random number that nobody will be able to tell you for certain until after a price drop has occurred)

Kia_Kaha

I suspect there may be an oversupply of apartments in Dublin / Cork entering the property market as the AirBNB and student rental market dries up.

sabat

TheSheriff wrote: »

Nobody knows, people have been telling me on this forum since 2018 a housing collapse was imminent.

So rather than 2021, try 202x.

(where x is any random number that nobody will be able to tell you for certain until after a price drop has occurred)

Yeah cos nothing has changed since 2018...

hometruths

TheSheriff wrote: »

Nobody knows, people have been telling me on this forum since 2018 a housing collapse was imminent.

So rather than 2021, try 202x.

(where x is any random number that nobody will be able to tell you for certain until after a price drop has occurred)

In some areas prices have fallen, albeit modestly, since 2018.

Meanwhile unemployment has sky rocketed.

TheSheriff

schmittel wrote: »

In some areas prices have fallen, albeit modestly, since 2018.

Meanwhile unemployment has sky rocketed.

Hello again!

In other areas, prices have increased, albeit modestly.

I am a FTB, I would really like prices to fall. I am also very realistic, and can see that there are large numbers of people completely unaffected by CV-19. There are also large numbers of people who want to buy a house, and I suspect CV-19 will drive more to buy a house and get out of apartment living. Most of those are in higher paid employment. Look at the income tax figures and it will tell you the true spread of those who are unemployed (i.e. down 8% in July, despite sky rocketing unemployment.)

Any house I have bid on since lockdown first happened has gone over asking, often (but not always) with multiple bidders.

bdmc5

mjshravan wrote: »

Hi,

As corona pandemic will not end anytime soon, and it will bound to have ripple effects in 2021 anyone thinking prices will fall next year

No one knows in short . Prices may be seen to drop on a small pool of sales of highly motivated sellers. Sellers like buyers are waiting for the uncertainty to clear up rather than accepting Covid discount offers. Supply is drying up drastically in cork already of quality homes both new and lived in.

Right now there are thousands weekly coming off Covid state payments and tens of thousands of people working away from home unimpacted financially , demand is very strong much to brothers dismay who keeps being outbid in cork surburbs.

The extra FTB buyers grant will incentivise FTB massively also so I new build staying strong. There may perhaps be glacial speed decline in the second hand market but there also the possibility of a economic recovery if Covid is beaten down with a vaccine that could quickly mitigate any declines. Either way there is so much we need to see play out in next few months before next year becomes any clearer.

ardinn

One major thing I see which may affect prices, certainly commercial prices - is the fact that thousands of businesses now see that they actually have a workforce they can trust to work at home. I would imagine it was seen as a huge risk before the pandemic but now not at all.

This could and most likely will lead to a number of businesses, who are paying high commercial rents scaling down to smaller offices outside the cities for much cheaper rents, leaving a stack of commercials vacant in the city. short term - developers may change these offices to apartments, increasing supply, students will study from home more, the accomodation supply in the cities may become plentiful, bringing down rents and house valuations along with it.

I could be way off but I was thinking about this the last while.

bluelamp

Kia_Kaha wrote: »

I suspect there may be an oversupply of apartments in Dublin / Cork entering the property market as the AirBNB and student rental market dries up.

Apartments will be interesting to watch, reduced student and Airbnb demand, the trend of landlords selling up, people working from home either wanting a bit more space or moving further out of the cities.

Do apartments tend to drop substantially more than houses in a downturn scenario?

Hubertj

I think all the banks forecast prices decreases through the end of 2021. The question seems to be by how much they will fall.

Dav010

sabat wrote: »

Yeah cos nothing has changed since 2018...

Incredibly, nothing has changed with house prices, they continue to rise albeit at a much lower rate. There was a CSO report last week which showed that prices have dropped in only a relative small number of sales. Google is your friend, there was a lot of media coverage.

Main reason they haven’t dropped seems to be chronic under supply.

Ray Palmer

I think somepeople are hoping for a price drop and not fully considering the situations that existed before and what the recent changes will do.
1. we are massively undersupplied in the cities.

2. we have a huge waiting list for government provided housing

3. Students not needing accommodation is temporary

4. More people will lose their jobs and require government housing schemes

5. Construction has slowed further while it was already not meetibg demand

6. Airbnb was never a huge issue and not even 1% of housing stock

We are going to have a worse housing issue going forward. Very simply because demand is increasing either way due to the age of the population. Construction is not going to be able to meet demand. Part of the population will suffer more as they lose jobs and ask for government housing support. The students will come back and lots of the property they rented will now be government paid for. Not all businesses will keep working from home as an option. So those workers will return and try to find places to rent that will be also gone to government housing payments.

From an individuals point of view it seems like prices should drop now and for a few years. From an investors point of view it is temporary. If you currently own you would be mad to sell now at a reduced price because within 5 years there is a massive housing shortage coming. Rents and house prices will go up. Simple supply and demand. Supply is going down while demand will increase. I know from my contacts most businesses want their staff back in the offices and are dreading the resistance that is coming.

brisan

Ray Palmer wrote: »

I think somepeople are hoping for a price drop and not fully considering the situations that existed before and what the recent changes will do.
1. we are massively undersupplied in the cities.

2. we have a huge waiting list for government provided housing

3. Students not needing accommodation is temporary

4. More people will lose their jobs and require government housing schemes

5. Construction has slowed further while it was already not meetibg demand

6. Airbnb was never a huge issue and not even 1% of housing stock

We are going to have a worse housing issue going forward. Very simply because demand is increasing either way due to the age of the population. Construction is not going to be able to meet demand. Part of the population will suffer more as they lose jobs and ask for government housing support. The students will come back and lots of the property they rented will now be government paid for. Not all businesses will keep working from home as an option. So those workers will return and try to find places to rent that will be also gone to government housing payments.

From an individuals point of view it seems like prices should drop now and for a few years. From an investors point of view it is temporary. If you currently own you would be mad to sell now at a reduced price because within 5 years there is a massive housing shortage coming. Rents and house prices will go up. Simple supply and demand. Supply is going down while demand will increase. I know from my contacts most businesses want their staff back in the offices and are dreading the resistance that is coming.

As to WFH from what I can see all the big tech companies want WFH to continue until at least the middle of next year.
It’s proved it can work and save businesses money so I doubt it will cease any time soon.

Ray Palmer

brisan wrote: »

As to WFH from what I can see all the big tech companies want WFH to continue until at least the middle of next year.
It’s proved it can work and save businesses money so I doubt it will cease any time soon.

They are planning for that as the most likely situation. No matter what it is only temporary as in max 2 years. Anybody in property investment realises this along with the lack of building so know there is a bigger shortage of housing coming. The big tech companies are not the entire market and all the financial services companies want their staff back due to official stamps and documentation requirements.

This is all temporary but will have lasting effects. Mainly less hosuing than population. Houses on my road have sold in 2 weeks recently. Seems a lot of people realise there is a shortage coming. Prices about 5% less than boom prices. Not one of my tenants wants to move.

Look at what is likely over next 5 years not just next year

AngryLips

Statutory Ape wrote: »

Bank valuations are coming in lower and vendors are unwilling to adjust accordingly so the purchasers are not able to complete the sale at the agreed price.

If this is true, then such actions from the banks will - in itself - have an effect on the market.

Kia_Kaha wrote: »

I suspect there may be an oversupply of apartments in Dublin / Cork entering the property market as the AirBNB and student rental market dries up.

Honestly, just how many properties do people think Airbnb have on the holiday rental market? Everyone's predicting the downfall of the platform to deliver us from rental market supply constraints, property market shortages and what else? Will it unlock the third secret of fatima too?

John Hutton

I have my 10% deposit saved now (20k) and I have a budget of between 150 and 200k.



I had planned to buy at the end of this year, or the start of next. I am thinking of holding off, because even a small % decrease at my end of the market would make a massive difference in the type of property I could get.



For example, there are a lot of houses in the area I am looking at approx 200K which is a little high for me. I'm going to hold of until the second half of next year to see what the state of play is. Prices may stay the same, but at least they won't go up!


Some prices, from my observations on daft, have come down, particularly at the lower end of the market.



Luckily my job isn't effected by covid19.

Donald Trump

There will be less airbnbs and students.

There might be also people less willing to rent-a-room.

How will that manifest itself though? People who were renting a room deciding not to do it now or in potential purchasers now looking at the one-beds rather than the 2-3 beds??

People already locked into a mortgage might have to continue renting the room as long as they can get a "tenant".

Ompl

In my opinion, its anyone's guess.

I am currently sitting here dumbfounded!

I viewed a property last weekend which had a guide price of 58K. Its previous tenants were travelers and they trashed the place pretty well before leaving (pvc windows smashed, kitchen cabinets demolished, punched through drywall, kitchen ceiling bowed, flooded ground floor destroying laminate flooring, bathroom tiles broken etc etc.) So essentially buying the shell of a house. As electricity and water are also disconnected my guess is that it will take 30-40k minimum to bring the house back to a livable condition.

Personally, I thought the guide price of 58k was a little on the high side as the house 2 doors down sold for 57K in November '19. I know the owner of that house and it just needed painting and some minor touches before moving in.
I asked the auctioneer what he expected the house to fetch and he suggested mid 60s! I thought he was having me on.

Anyway, I joined the auction this morning .... 97k it sold for at auction. 39k over guide price and 32k over auctioneers prediction! I'm astonished! I'm clearly missing something, but I don't understand how people are comfortable pumping so much money into property at the moment with so much uncertainty laying ahead.

Pkiernan

Projected housing need is 36000per year for next 20 years.

Current build capacity is 17000 per year.

How are prices going to fall in the short term?

Ronin247

Ompl wrote: »

In my opinion, its anyone's guess.

I am currently sitting here dumbfounded!

I viewed a property last weekend which had a guide price of 58K. Its previous tenants were travelers and they trashed the place pretty well before leaving (pvc windows smashed, kitchen cabinets demolished, punched through drywall, kitchen ceiling bowed, flooded ground floor destroying laminate flooring, bathroom tiles broken etc etc.) So essentially buying the shell of a house. As electricity and water are also disconnected my guess is that it will take 30-40k minimum to bring the house back to a livable condition.

Personally, I thought the guide price of 58k was a little on the high side as the house 2 doors down sold for 57K in November '19. I know the owner of that house and it just needed painting and some minor touches before moving in.
I asked the auctioneer what he expected the house to fetch and he suggested mid 60s! I thought he was having me on.

Anyway, I joined the auction this morning .... 97k it sold for at auction. 39k over guide price and 32k over auctioneers prediction! I'm astonished! I'm clearly missing something, but I don't understand how people are comfortable pumping so much money into property at the moment with so much uncertainty laying ahead.

When the other house sold, there were sh1tty neighbours 2 doors down, the problem is now gone. People trying to say that social housing doesn't ruin the price of your property nearby are deluded.

Lux23

Ompl wrote: »

In my opinion, its anyone's guess.

I am currently sitting here dumbfounded!

I viewed a property last weekend which had a guide price of 58K. Its previous tenants were travelers and they trashed the place pretty well before leaving (pvc windows smashed, kitchen cabinets demolished, punched through drywall, kitchen ceiling bowed, flooded ground floor destroying laminate flooring, bathroom tiles broken etc etc.) So essentially buying the shell of a house. As electricity and water are also disconnected my guess is that it will take 30-40k minimum to bring the house back to a livable condition.

Personally, I thought the guide price of 58k was a little on the high side as the house 2 doors down sold for 57K in November '19. I know the owner of that house and it just needed painting and some minor touches before moving in.
I asked the auctioneer what he expected the house to fetch and he suggested mid 60s! I thought he was having me on.

Anyway, I joined the auction this morning .... 97k it sold for at auction. 39k over guide price and 32k over auctioneers prediction! I'm astonished! I'm clearly missing something, but I don't understand how people are comfortable pumping so much money into property at the moment with so much uncertainty laying ahead.

This is exactly what happened in 2008; I remember there was a mad frenzy of people thinking the small drop was going to be a temporary thing and a few of my friends got stuck with ****ty apartments in locations they hate.

I have bid on two houses and they both went over the selling price, but then again they were both perfect - all you needed was furniture, a fridge and a washing machine.

Dav010

Lux23 wrote: »

This is exactly what happened in 2008; I remember there was a mad frenzy of people thinking the small drop was going to be a temporary thing and a few of my friends got stuck with ****ty apartments in locations they hate.

I have bid on two houses and they both went over the selling price, but then again they were both perfect - all you needed was furniture, a fridge and a washing machine.

This isn’t like 2008, there is a chronic shortage of houses now whereas in 2008 there was a surplus and banks were handing out money to everyone who wanted it.

Hawthorn Tree

Without a doubt. 2022 as well.

brisan

Dav010 wrote: »

This isn’t like 2008, there is a chronic shortage of houses now whereas in 2008 there was a surplus and banks were handing out money to everyone who wanted it.

There is also a shortage of credit soon to be chronic when TWSS and PUP stop and unemployment figures become clearer

FutureGuy

In my part of Limerick, houses are quickly going for asking and over asking. House went up for 60k more than we paid (similar standard) and went sale agreed in a month or so.

Ray Palmer

Lux23 wrote: »

This is exactly what happened in 2008; I remember there was a mad frenzy of people thinking the small drop was going to be a temporary thing and a few of my friends got stuck with ****ty apartments in locations they hate.

I have bid on two houses and they both went over the selling price, but then again they were both perfect - all you needed was furniture, a fridge and a washing machine.

That is such unbelievable twist on reality. 2008 was a crash after major construction with a huge oversupply with rising prices and easy mortgages. So the price crashed. We have a shortage and a decreased undersupply to keep the same level we are currently have.

Things are going to get worse. The only factor is more of the older generation circling dublin in the suburbs are dying and freeing up housing. Just a reality of life.

Ticking and Bashing

Don't think prices will fall. There's still a huge demand and am regularly seeing properties being taken down after 2-3 weeks on the market. A lot of demand in Kildare, common to see 20-30 bids on houses there (as per homebid.ie). I find it insane the prices of houses in Celbridge up at €400k+! Couples will always have higher purchasing power. With the restrictions over the last while, people have accumulated a lot of cash to add to their deposits. Interesting to see what will happen to mortgage exemption rules and if / when they might be relaxed again. I'm assuming they'll have to be eased again which will pick up demand further.

Rental costs haven't come down significantly either - the typical cost of a 2 bed apartment rental in south Dublin is still relatively the same to pre-covid times and haven't changed much around my location. We probably haven't seen the quick rent decreases people were anticipating a number of months ago. Maybe a lot of the people from abroad who worked in the MNCs here actually didn't go back home but stayed put to WFH. I don't think WFH is forever either, I think there will be an expectation for staff to slowly return (either full time in the office or a number of days). Another question is around if we see house prices fall - where will they fall and where could they potentially increase? Could they fall in Dublin and increase in the outskirts of the capital. Also what will the demand be - have people re-evaluated their current living set up and decided they need bigger homes - will we see an increase in the supply of smaller homes for sale on the market and greater demand for bigger houses with large gardens.

brisan

mjshravan wrote: »

Hi,

As corona pandemic will not end anytime soon, and it will bound to have ripple effects in 2021 anyone thinking prices will fall next year

Definitely but by how much is anyone's guess
AIB and KBC both predicted falls in the region of 10-12%

Dav010

brisan wrote: »

There is also a shortage of credit soon to be chronic when TWSS and PUP stop and unemployment figures become clearer

Without a doubt, and yet the prices seem to be confounding the economists and banks. It seems there are still a lot of cash buyers out there and the shortage of supply outweighs the effects of the pandemic when it comes to house sales. I read an article which said that there are fewer houses for sale now than at anytime over the past 20 years.