Irish Property Market 2020 Part 3

brisan

Idbatterim wrote: »

There are no foreclosure etc here. You won't he thrown out of you ppp, that is now clear as day...

Probate sales are the sales of property owned by now deceased people .
Properties which now lie idle and are being sold by the estate of the deceased.
totally different and unrelated to foreclosures

Marius34

brisan wrote: »

Only problem is like now no one will be selling as they will need somewhere to live
Unless a 100,000 probate sales hit in a 2 year period

There is no logic in this.
Price are dictated by demands and supplies.
If supplies collapse, but there are high real demands, be sure price won't collapse by 50%.

brisan

Marius34 wrote: »

There is no logic in this.
Price are dictated by demands and supplies.
If supplies collapse, but there are high real demands, be sure price won't collapse by 50%.

You are jumping in without knowing the full facts or the previous posts and posters (or their posting history ) in this thread
Read the thread from the beginning ie last January

TheSheriff

https://www.rte.ie/news/business/2020/1208/1183015-housing-supply-wont-meet-demand-for-at-least-3-years/

Figures for housing completions this year look better than I would have thought - 19k.

Next year not looking good, "The report cites figures for the first eight months of 2020 which show that commencement levels were at 13,314 units, a reduction of almost a quarter on the same period in 2019."

AlmightyCushion

TheSheriff wrote: »

https://www.rte.ie/news/business/2020/1208/1183015-housing-supply-wont-meet-demand-for-at-least-3-years/

Figures for housing completions this year look better than I would have thought - 19k.

Next year not looking good, "The report cites figures for the first eight months of 2020 which show that commencement levels were at 13,314 units, a reduction of almost a quarter on the same period in 2019."

Those figures are for 2020, they're not estimates for next year. Given all the shíte we had with Covid it is not surprising they were down so much. Considering we had 21,000 completions in 2019, 19,000 in 2020 with Covid and the lockdows is pretty good.

TheSheriff

AlmightyCushion wrote: »

Those figures are for 2020, they're not estimates for next year. Given all the shíte we had with Covid it is not surprising they were down so much. Considering we had 21,000 completions in 2019, 19,000 in 2020 with Covid and the lockdows is pretty good.

Yes I agree, this year looks good. Quite surprised it's been so good, and hopefully it continues.

I was getting at the fact that commencements this year are down, which surely does not bode well for completions next year.

Villa05

TheSheriff wrote:

Next year not looking good, "The report cites figures for the first eight months of 2020 which show that commencement levels were at 13,314 units, a reduction of almost a quarter on the same period in 2019."

Could the pandemic have stalled progress on new starts given the uncertainty, may well pick up later given the mortgage application figures

brisan

Villa05 wrote: »

Could the pandemic have stalled progress on new starts given the uncertainty, may well pick up later given the mortgage application figures

If builders think there is a glut of deposit rich mortgage approved buyers out there they will build

Idbatterim

brisan wrote: »

Probate sales are the sales of property owned by now deceased people .
Properties which now lie idle and are being sold by the estate of the deceased.
totally different and unrelated to foreclosures

I know. Someone mentioned a tonOf probate sales... I'm saying prices likely wont collapse to get like they might in other countries, because nobody is forced to sell here...

brisan

Idbatterim wrote: »

I know. Someone mentioned a tonOf probate sales... I'm saying prices likely wont collapse to get like they might in other countries, because nobody is forced to sell here...

A probate sale is not a forced sale
The owners are dead and the heirs decide to sell the house
What are they supposed to do with it
Leave it idle
Rent it
Sell it
Most choose to sell it

Geuze

brisan wrote: »

Schemes like Donaghmede where Gallagher built the houses and the councils guaranteed them sales from people off the housing list who where in the main given council mortgages
With the Governments ability to borrow at near zero rates cheap mortgages should be made available for state led building projects to those below a certain income threshold

This already happens.

Local councils borrow from the HFA, and lend onto mortgage customers of the council.

enricoh

brisan wrote: »

If builders think there is a glut of deposit rich mortgage approved buyers out there they will build

Do a bit of farming business with a lad who's day job is with one of the housing charities/associations. he was saying this time last year they were struggling to get estate builders to sell to them.
He was saying the same builders are flocking to them now offering houses and they are acquiring huge numbers of them.
Maybe the housing market is still strong, just the numbers who want to pay for their own is weaker!

Mic 1972

Property went on the market 2 weeks ago with asking price 225K, it's now already at 240K
Prices are skyrocketing, and this Q4 when normally they slow down.
Not a chance to see a drop next year

https://www.myhome.ie/residential/brochure/114-erris-square-blanchardstown-dublin-15/4468393

Mic 1972

Hubertj wrote: »

according to some expert on this thread, prices will fall 50% within 2 years. It will be cheaper for the government to buy than build.

highly unlikely

dev_ire

Mic 1972 wrote: »

highly unlikely

Don't worry in 6 months it will still be a year or more out. Eventually they will drop and they will claim they knew it all along.

Pelezico

Lads ....can we have a new thread next year and simply repopulate the thread each day with this years comments of the same date.

It will save everyone time and effort.

Hubertj

Irish house prices may fall by up to 4% in 2021, Fitch says
via The Irish Times
https://www.irishtimes.com/business/economy/irish-house-prices-may-fall-by-up-to-4-in-2021-fitch-says-1.4431985

Some interesting stuff in here. Good points about mortgage arrears etc. 8% over 2 years would be a significant reduction I think. On top of the 1% over last 12 months?

Mic 1972

Hubertj wrote: »

Irish house prices may fall by up to 4% in 2021, Fitch says
via The Irish Times
https://www.irishtimes.com/business/economy/irish-house-prices-may-fall-by-up-to-4-in-2021-fitch-says-1.4431985

Some interesting stuff in here. Good points about mortgage arrears etc. 8% over 2 years would be a significant reduction I think. On top of the 1% over last 12 months?

Did prices drop in 2020 at all?
The latest Daft report was showing a significant increase

Browney7

Mic 1972 wrote: »

Property went on the market 2 weeks ago with asking price 225K, it's now already at 240K
Prices are skyrocketing, and this Q4 when normally they slow down.
Not a chance to see a drop next year

https://www.myhome.ie/residential/brochure/114-erris-square-blanchardstown-dublin-15/4468393

https://www.myhome.ie/residential/brochure/112-erris-square-waterville-blanchardstown-dublin-15/4285522 this one sold at the start of 2019 for 225k in arguably worse condition that the one you linked. They look similar sizes too

Interesting to see what it sells for in the end

Browney7

Hubertj wrote: »

Irish house prices may fall by up to 4% in 2021, Fitch says
via The Irish Times
https://www.irishtimes.com/business/economy/irish-house-prices-may-fall-by-up-to-4-in-2021-fitch-says-1.4431985

Some interesting stuff in here. Good points about mortgage arrears etc. 8% over 2 years would be a significant reduction I think. On top of the 1% over last 12 months?

It depends on the effects greater arrears have and how banks manage them. Greater arrears will feed into assumption setting for capital modelling leading to banks having to set aside greater levels of capital to run their loan books.

Very difficult to see vast swathes of respossessions but if people have to repay debt there's less money swashing around the economy to fuel growth and recovery.

I thought we'd have seen a 5-10% drop by now but market has been resilient at reduced sales volumes

Timing belt

Browney7 wrote: »

It depends on the effects greater arrears have and how banks manage them. Greater arrears will feed into assumption setting for capital modelling leading to banks having to set aside greater levels of capital to run their loan books.

The Banks have already taken out generous Provisions in Q2 and the relaxing of the Countercyclical Capital Buffers has compensated for the capital that needs to be put aside for their capital modelling. Their biggest issue will be that they will not be generating profit to rebuild capital needed due to the low interest rate environment unless they increase their lending as this is the only margin that is turning a profit at the moment.

Browney7 wrote: »

Very difficult to see vast swathes of respossessions but if people have to repay debt there's less money swashing around the economy to fuel growth and recovery.

Yes people/businesses that have taken out loans to get through this will need to repay which will reduce the money in circulation but this is offset by the massive increase in cash in circulation due to QE. you just need to look at the M2 money supply to see there is no shortage of cash in the economy.

Browney7 wrote: »

I thought we'd have seen a 5-10% drop by now but market has been resilient at reduced sales volumes

I thought the same but the fact that a lot of people have been able to save a deposit due to WFH has meant that the FTB market is even more competitive now which is helping keep the market afloat.

Browney7

Timing belt wrote: »

The Banks have already taken out generous Provisions in Q2 and the relaxing of the Countercyclical Capital Buffers has compensated for the capital that needs to be put aside for their capital modelling. Their biggest issue will be that they will not be generating profit to rebuild capital needed due to the low interest rate environment unless they increase their lending as this is the only margin that is turning a profit at the moment.



Yes people/businesses that have taken out loans to get through this will need to repay which will reduce the money in circulation but this is offset by the massive increase in cash in circulation due to QE. you just need to look at the M2 money supply to see there is no shortage of cash in the economy.



I thought the same but the fact that a lot of people have been able to save a deposit due to WFH has meant that the FTB market is even more competitive now which is helping keep the market afloat.

Fair points. I can't see how the extra money floating around will get to the people in arrears in the first place though. The money will be in peoples pockets who actually haven't suffered any job loss. Fitch's estimate of 14% in arrears is a crazy high number.

Yes no doubt the HTB being expanded to 10% instead of a 5% refund, brought people into the market who had kept their jobs and so were able to get approval and look at pulling the trigger which more than offset the portion who were removed from the market by way of job loss.

You could see the step change in early 2018 in the CSO index when the deposit rules changed to a flat 10% for first time buyers instead of the previous 10% up to 220k regime and 20% thereafter.

I'd now expect a busy Q1 for drawdowns and purchases but after that as the demand is satisfied it's hard to know what will happen. Very possible we get a rising market in the 0 to 5% and rising levels of arrears simultaneously.

Timing belt

Browney7 wrote: »

Fair points. I can't see how the extra money floating around will get to the people in arrears in the first place though. The money will be in peoples pockets who actually haven't suffered any job loss. Fitch's estimate of 14% in arrears is a crazy high number.

Yes no doubt the HTB being expanded to 10% instead of a 5% refund, brought people into the market who had kept their jobs and so were able to get approval and look at pulling the trigger which more than offset the portion who were removed from the market by way of job loss.

You could see the step change in early 2018 in the CSO index when the deposit rules changed to a flat 10% for first time buyers instead of the previous 10% up to 220k regime and 20% thereafter.

I'd now expect a busy Q1 for drawdowns and purchases but after that as the demand is satisfied it's hard to know what will happen. Very possible we get a rising market in the 0 to 5% and rising levels of arrears simultaneously.

The PUP payments are getting the cash out into the economy which is helping limit the damage. The increase in bank deposits will gradually get out into the economy once things open up a bit more and confidence returns.

Yes the arrears situation is a concern and I suspect that banks won't see the full impact of this on their capital till Q1 2021 as anyone on a payment break latter than the end of sept may not be 90 days overdue for the year end. So credit availability might tighten by the end of Q1 unless the economy swings back into life. But saying that the banks loan provisions used some wide sweeping assumptions that will probably not materialise by the end of the year.

The following is the assumptions used by AIB at Q2 and can be found on their investor relations page:

JimmyVik

Pelezico wrote: »

Lads ....can we have a new thread next year and simply repopulate the thread each day with this years comments of the same date.

It will save everyone time and effort.

No. Because I predicted prices will fall in 2020.
I want to change that to 2022, so at least i get an extra year out of it

Smouse156

Mic 1972 wrote: »

Did prices drop in 2020 at all?
The latest Daft report was showing a significant increase

Shows you how useless an asking price report is!

Real data (actual sales) from CSO show a 1% overall drop and 2% in Dublin. The market is fragmented though. Commuter towns saw rises, Dublin City centre fell 4%. The top bracket (950k plus) nationally fell 4%. First time buyer range with HTB probably rose. One bed apartments suffered while 4 bed homes with gardens held up well.

Really depends on what category you are trying to buy in.

Marius34

Reading BPFI Housing Market Report Q3.

It seems it is likely that there won't be downward price trends until 2023, due to supplies being major issue for the coming years.

"Housing supply won’t match demand until at least end of 2023"
"lower than expected commencement numbers in 2020 will put pressure on the
number of new dwellings to be completed in 2021 at a time when most
observers expected housing supply to catch up with both current and
pent-up demand, estimated to be around 35,000 units. It is now likely
that housing output will not reach these levels until the end of 2023"

https://www.bpfi.ie/wp-content/uploads/2020/12/BPFI-Housing-Market-Monitor-Q3-2020-FINAL.pdf

brisan

Marius34 wrote: »

Reading BPFI Housing Market Report Q3.

It seems it is likely that there won't be downward price trends until 2023, due to supplies being major issue for the coming years.

"Housing supply won’t match demand until at least end of 2023"
"lower than expected commencement numbers in 2020 will put pressure on the
number of new dwellings to be completed in 2021 at a time when most
observers expected housing supply to catch up with both current and
pent-up demand, estimated to be around 35,000 units. It is now likely
that housing output will not reach these levels until the end of 2023"

https://www.bpfi.ie/wp-content/uploads/2020/12/BPFI-Housing-Market-Monitor-Q3-2020-FINAL.pdf

Thats SF a shoe in in the next election so
I wonder will Paddy Power take a 50 euro bet on it

PropQueries

Marius34 wrote: »

Reading BPFI Housing Market Report Q3.

It seems it is likely that there won't be downward price trends until 2023, due to supplies being major issue for the coming years.

"Housing supply won’t match demand until at least end of 2023"
"lower than expected commencement numbers in 2020 will put pressure on the
number of new dwellings to be completed in 2021 at a time when most
observers expected housing supply to catch up with both current and
pent-up demand, estimated to be around 35,000 units. It is now likely
that housing output will not reach these levels until the end of 2023"

https://www.bpfi.ie/wp-content/uploads/2020/12/BPFI-Housing-Market-Monitor-Q3-2020-FINAL.pdf

That’s based on the central bank report from December 2019:

“The paper finds that around 34,000 dwellings would be required per year until the end of the next decade assuming unchanged household formation rates. This scenario is based on net inward migration of 30,000 per annum”

What they fail to mention is that the same report states that the demand for housing from natural population growth is 18,000 per year.

So, as we’re already building more than enough units to meet demand from natural population growth, where will this net inward migration of 30,000 per year come from to create such a shortage of housing?

1. Multinationals? Are they really going to create 30,000 additional new jobs next year and every year out to 2030?

2. Tourism sector? Really?

3. Construction sector? The BPFI in your quote said we won’t be building the same number of houses next year so we don’t need more construction workers.

Villa05

PropQueries wrote:

What they fail to mention is that the same report states that the demand for housing from natural population growth is 18,000 per year.

Sorry but Is natural population growth defined as
Births minus deaths

Marius34

PropQueries wrote: »

That’s based on the central bank report from December 2019:

“The paper finds that around 34,000 dwellings would be required per year until the end of the next decade assuming unchanged household formation rates. This scenario is based on net inward migration of 30,000 per annum”

What they fail to mention is that the same report states that the demand for housing from natural population growth is 18,000 per year.

So, as we’re already building more than enough units to meet demand from natural population growth, where will this net inward migration of 30,000 per year come from to create such a shortage of housing?

1. Multinationals? Are they really going to create 30,000 additional new jobs next year and every year out to 2030?

2. Tourism sector? Really?

3. Construction sector? The BPFI in your quote said we won’t be building the same number of houses next year so we don’t need more construction workers.

They didn't fail to mention what this mean. As 34K is expected demands for housing in the coming years.
18.000 is your weird estimates, which I explained already why you can not take single component from demands from their reports, as they separate obsolescence in their report, which is not included in Natural increase.