Irish Property Market 2020 Part 3

Timing belt

PropQueries wrote: »

Thanks. What was interesting was the NTMA putting supply at “Housing Completions above 25,000 in 2019” when reconnections are included.

It’s a lot more than the c. 21k when only new builds are counted.

From their presentation, the number of reconnections appears to have been around 4K to 5k every year since 2015.

One year of these mightn’t make much difference but over 5 to 6 years, we have c. 25k more homes entering supply than are counted by just looking at new builds.

c. 25k extra residential units at an average of one couple and one child is housing for 75,000 people. Fairly significant given Ireland’s small population and may be overlooked IMO

More stats on esb connections
https://www.housing.gov.ie/housing/statistics/house-building-and-private-rented/construction-activity-esb-connections

Graham

Didn't the CSO stop using connections as a proxy for new builds a couple of years ago?

hometruths

Graham wrote: »

That there are vacant properties? I'm sure there are.

That's not the same as oversupply. That's not to say vacant properties are suddenly going to come back to the market. That's not to say the reasons these properties are vacant isn't going to remain.

Geodirectory tells the same story in that there excess vacancies over the norm - I.e oversupply.

The properties are not going to disappear. And things tend to revert to the norm over time.

Graham

I'd suggest the most reliable indicator of oversupply would be prices. If supply genuinely were greater than demand, prices would drop.

Pelezico

Graham wrote: »

I'd suggest the most reliable indicator of oversupply would be prices. If supply genuinely were greater than demand, prices would drop.

Not where the availability of capital is infinite. Price and demand are inelastic.

Graham

I've seen nothing to suggest that there's insufficient capital to meet mortgage demand.

If you're taking about construction finance that would restrict supply which would mean even less likelihood of oversupply

Timing belt

Graham wrote: »

Didn't the CSO stop using connections as a proxy for new builds a couple of years ago?

They still collect and publish the data. I just had a look and the most recent data is 2020 Q3.

hometruths

Graham wrote: »

I'd suggest the most reliable indicator of oversupply would be prices. If supply genuinely were greater than demand, prices would drop.

There is clearly Oversupply of housing stock.

There is clearly not oversupply of houses for sale.

This is not a complicated distinction.

Timing belt

Graham wrote: »

I'd suggest the most reliable indicator of oversupply would be prices. If supply genuinely were greater than demand, prices would drop.

Yes you are correct but the point that is being made is that this has not yet hit the market for a variety of reasons. Whether it is because of location or whether someone is sitting on it waiting for the price to increase. After the 2008 crisis there was obviously a lot of property unfinished and to make this liveable may cost more than to build a new house.

Pelezico

Graham wrote: »

I've seen nothing to suggest that there's insufficient capital to meet mortgage demand.

If you're taking about construction finance that would restrict supply which would mean even less likelihood of oversupply

Not sure who you are replying to. It would help if you quoted...I am not trying to be a mod so no thread ban please..

I am saying the availability of capital is infinite....ie there's no limit.

We have quantitative easing and that means limitless capital.

So supply and price are no longer inversely related to each other.

PropQueries

Graham wrote: »

Didn't the CSO stop using connections as a proxy for new builds a couple of years ago?

Yes. That’s what makes it interesting. Now, we only see new builds commented on in the press. But reconnections can add an additional 20% to that figure of supply of housing entering the market each year.

If c. 4,000 to 5,000 previously vacant residential units re-enter the market each year, after 5 or 6 years, we may be overcounting the number of new builds actually required today to meet demand as those previously vacant units are now housing a significant number of people that some may believe still need to be housed if just looking at new build figures.

It may explain the lack of media coverage of people queuing to rent or buy properties over the past number of years.

Graham

PropQueries wrote: »

reconnections can add an additional 20% to that figure of supply of housing entering the market each year

Even if that is accurate (and I don't agree that it is). Rising prices tell us demand is not being met.

Smouse156

Mic 1972 wrote: »

this report is based on sales prices from property register
it's evident that current prices are higher than last year



https://bl.ocks.org/pinsterdev/raw/98d5baa18a1bc6d603e0/

Interesting!

Pelezico

Graham wrote: »

Even if that is accurate (and I don't agree that it is). Rising prices tell us demand is not being met.

Rising prices tell us the consequence of QE is inflation.

Hulk Hands

Pelezico wrote: »

I hope PropQueries keeps posting. Without you this thread would be a very dreary place.

But the mid west must surely be the most dreary place in Irelnd to live. Only the desperate would live there.

The mid west extends from Longford to Castlebar and from Cavan to Birr.

There are no young people because the young leave.

The midwest region composes of Limerick and Clare. Mayo, Leitrim and Sligo would be west or North West? If you're including Galway then you're clearly talking rubbish

PropQueries

Graham wrote: »

Even if that is accurate (and I don't agree that it is). Rising prices tell us demand is not being met.

Well it’s all in the NTMA presentation from last month.

Rising prices only confirm my suspicion that the investment funds are sitting on all those vacant units I believe they purchased between 2012 and 2016.

And if they look to exit soon, as I believe, they will flood the market at low prices given that they bought them for a fraction of today’s supposed market prices.

All in my opinion of course, but a valid opinion IMO

Timing belt

PropQueries wrote: »

Yes. That’s what makes it interesting. Now, we only see new builds commented on in the press. But reconnections can add an additional 20% to that figure of supply of housing entering the market each year.

If c. 4,000 to 5,000 previously vacant residential units re-enter the market each year, after 5 or 6 years, we may be overcounting the number of new builds actually required today to meet demand as those previously vacant units are now housing a significant number of people that some may believe still need to be housed if just looking at new build figures.

It may explain the lack of media coverage of people queuing to rent or buy properties over the past number of years.

Don't forget that re-connections also take place where a new tenant takes over a rental property.

I think the stat that you are referring to is the unfinished category which includes all the ghost estates etc... which has been dropping since 2014 to less than under 100 in Q3 2020 as the 95% of these properties have already hit the market.

Marius34

schmittel wrote: »

There is clearly Oversupply of housing stock.

There is clearly not oversupply of houses for sale.

This is not a complicated distinction.

Definitely not at least in the case of Dublin co. and commuting counties, like Kildare, Wicklow, Meath.
And overly Ireland has lower housing stocks, comparing to the similar economies.

Timing belt

PropQueries wrote: »

Well it’s all in the NTMA presentation from last month.

Rising prices only confirm my suspicion that the investment funds are sitting on all those vacant units I believe they purchased between 2012 and 2016.

And if they look to exit soon, as I believe, they will flood the market at low prices given that they bought them for a fraction of today’s supposed market prices.

All in my opinion of course, but a valid opinion IMO

Don't start with that again.....

PropQueries

Timing belt wrote: »

Don't forget that re-connections also take place where a new tenant takes over a rental property.

I think the stat that you are referring to is the unfinished category which includes all the ghost estates etc... which has been dropping since 2014 to less than under 100 in Q3 2020 as the 95% of these properties have already hit the market.

No. Reconnections are only counted if the supply has been off for at least 2 years previously. So, it’s a good measure of long term vacant units re-entering supply.

According to the CSO:

“ A property which is reconnected to the ESB network, having been disconnected for more than two years”

Pelezico

Hulk Hands wrote: »

The midwest region composes of Limerick and Clare. Mayo, Leitrim and Sligo would be west or North West? If you're including Galway then you're clearly talking rubbish

Indeed I am talking about parts of Galway which are mid west. Tuam, Ballinasloe, Loughrea and Roscommon town are mid west culturally.

They have a dreary feel and all the young people leave.

Hubertj

schmittel wrote: »

Geodirectory tells the same story in that there excess vacancies over the norm - I.e oversupply.

The properties are not going to disappear. And things tend to revert to the norm over time.

Excess supply on matters in certain areas. Excess supply on the scale of may Donegal etc is pointless and contributes little to the market.

PropQueries

Hubertj wrote: »

Excess supply on matters in certain areas. Excess supply on the scale of may Donegal etc is pointless and contributes little to the market.

Pre-COVID, yes/maybe.

Post-COVID, no.

hometruths

Hubertj wrote: »

Excess supply on matters in certain areas. Excess supply on the scale of may Donegal etc is pointless and contributes little to the market.

Oversupply in Dublin city matters for example and in a number of other rent pressure zones.

I am not talking about donegal or Leitrim and never have been!

Pelezico

PropQueries wrote: »

Pre-COVID, yes/maybe.

Post-COVID, no.

There is no way anyone living in dublin will decamp to midwest, Donegal rtc.

They would be saying goodbye to children forever as soon as they are old enough to leave.

Timing belt

PropQueries wrote: »

No. Reconnections are only counted if the supply has been off for at least 2 years previously. So, it’s a good measure of long term vacant units re-entering supply.

According to the CSO:

“ A property which is reconnected to the ESB network, having been disconnected for more than two years”

Ok if they are all vacant and re-entering the market that tells us that 20k have done so over the past 10 years


** Note 2020 only includes Q1-Q3

Hulk Hands

Pelezico wrote: »

Indeed I am talking about parts of Galway which are mid west. Tuam, Ballinasloe, Loughrea and Roscommon town are mid west culturally.

They have a dreary feel and all the young people leave.

So Galway City is surely included if you're including those? You said the mid west had no redeeming features whatsoever? Galway city has no redeeming features?

What you're talking about in regards to rural towns is happening all over the country. Young people move to bigger cities. This happens the world over. The likes of Arklow, Athy and Kildare town are hardly known for vibrant youths. It's not unique to the west

PropQueries

Pelezico wrote: »

There is no way anyone living in dublin will decamp to midwest, Donegal rtc.

They would be saying goodbye to children forever as soon as they are old enough to leave.

But they don’t need to decamp. Rural people who used to move to Dublin for work now may not have to. Who’s then going to buy all those new built units and probate sales in Dublin?

Someone from Mullingar isn’t going to move to Lucan in order to be closer to work if they’re only in 2 or 3 days a week.

I think many people here must be living in Dalkey etc. and forget that most areas in Dublin are fairly miserable places to live in if you’re not actually born here.

As miserable to country folk as country areas are miserable to Dublin folk anyway.

Graham

PropQueries wrote: »

Well it’s all in the NTMA presentation from last month.

Rising prices only confirm my suspicion that the investment funds are sitting on all those vacant units I believe they purchased between 2012 and 2016.

And if they look to exit soon, as I believe, they will flood the market at low prices given that they bought them for a fraction of today’s supposed market prices.

All in my opinion of course, but a valid opinion IMO

Valid, as in you're entitled to hold it. Absolutely

Valid, as in likely. I don't think so. You've take a guess, added another guess, and multiplied it by a guess to come up with a guess.

I think the main reason your guesses suffer a credibility issue is you've started with your conclusion and worked back from there.

Timing belt

Hulk Hands wrote: »

So Galway City is surely included if you're including those? You said the mid west had no redeeming features whatsoever? Galway city has no redeeming features?

What you're talking about in regards to rural towns is happening all over the country. Young people move to bigger cities. This happens the world over. The likes of Arklow, Athy and Kildare town are hardly known for vibrant youths. It's not unique to the west

I would choose Galway over Dublin any day of the week. But that would be my personal choice if you are young and want to climb the corporate ladder it is easier to do so in Dublin as there is more opportunities