2021 Irish Property Market chat - *mod warnings post 1*

PommieBast

fliball123 wrote: »

Also where are you getting the idea that property is not affordable. If you take the average wage in Ireland is about 39k and the average house price in Ireland is 267k. Now do the math of a couple on the average wage buying a house at the average price. . The average house price in the country is 267k is affordable 3.5 times 78k (couple) is 273k and then add in 10% for your deposit. Also other countries like America, France, the UK and a lot of other EU countries allow 5 times your salary.

Trouble is where the houses are in relation to where jobs are.

Villa05

TheSheriff wrote: »

Did I read the news correct today, that private sites will be shut, but social sites will be kept going?

Madness if so

At a guess The social and affordable are gaurenteed to be be paid for by taxes from working people who try to meet their own housing need, but may not be able to afford to buy as the state is driving up price rather than addressing their own supply issue



Admission of affordabilty issues by the construction sector

Villa05

fliball123 wrote: »

.
And yet 10/12 years on without paying we are still not bankrupt. Have you any evidence of wealth leaving the country? and have you compared the wealth leaving with the wealth coming into the country ?? But back to the point we wont be going backrupt any time soon one of the biggest advantages of being in the EU is that there will always be a lender of last resort ... An addition 20/30 billion at near zero interest is not going to burst any bubbles anytime soon

Recent history would have thought us that cheap money is not a good reason to drive up property/rent prices beyond affordabilty range for most


Surely we have not forgotten that in 12 years

fliball123

Villa05 wrote: »

A. If housing was affordable we would not need to give up to 30,000 euro of taxpayers money to every first time buyer in the form of a grant.


B. following on from that we would not need to introduce a joint ownership scheme further enhancing the money available to buy property.


C we would not need to give publicly owned land to private developers at reduced market value to stimulate house building



D. In 2016, only 14.1% of households earned 100k or higher, therefore the private sector can roughly only cater for the housing needs of the top 30% of earning households. This 30% of course assumes that First time buyers are at the peak of their earning power when they buy.



E. Those that cant afford to buy are forced into a rental market that is more expensive than buying. This sucks more and more income out of the economy which would normally be spent on job/tax creating products and services



F. Government policy of sourcing social and affordable from the private market rather than sourcing their own given their natural advantages (0% rates, land ownership, planning owenership, availability of labour) over the private sector means that public housing is procurred at the highest cost. This leads to supply issues and a further spiralling of price



G. increased prices will mean that workers will have buy further and further away from there place of work. This means more commuting costs more public infrastructue requirements and maintenance plus added fines from the EU for Carbon emmissions plus the damage of those emmissions


H. Increased costs on employees puts pressure on salaries which may or may not be met. Either way it reduces our competititveness in an international market

A : The government are trying to give those who are starting on the property ladder a leg up. I think most will agree the hardest time for a property owner is when they first buy , things get easier as you learn to manage your money/mortgage and when your pay starts going up. This is the reason why it is targetted at FTB and not at the second hand market. If your conclusion that property was overpriced then they would/should of included the 2nd hand market for the grant as well.

B See A above

C: The government have not got the skill set or cop on to build houses at on a large scale or budget. A simple look at the recent clusterPhuck of the hospital they were involved in building would prove this point and they should be giving the land to people who can build housing. Unfortunately that is private sector builders but I do agree they should not be giving it at a reduced cost.

And in 2020/21 the average wage is 39k and the average house price sold in 2020 was 270k . If you do the simple arithmetic of 3.5 times the salary of a couple and 10% deposit. Housing is affordable and most expert groups agree with this take. As you point out some people are on under the AIW but we also have housing available under the Average house price. Just because people cant afford a certain location does not mean prices are unaffodable. It means you either get a better job or look in an area you can afford. This is not unique to Ireland and is essentially the same all over the globe. As most EAs will tell you the top 3 words in Property is location location location.

E: I thought that there had been an easing of rent over the last year. But once again if you cant afford to buy you must rent or look for a place that you can afford. This has always been the case in Ireland its nothing new ask you parents about it and this is the same everywhere in the Globe. It sounds like you want an A1 rated house just overlooking the sea there in Howth for less than 250k.

F: No bones about it your right with the exception of paying the highest price they are paying the going rate or outbidding others to buy, but what else can the government do. They have proven they cant build with out fecking it up. You dont want to let the private builders build on land that they own and now you dont want them buying up property at the going rate. So what do they do with our homeless and those on the housing waiting list?

G: This wont be as much of a problem going forward there will be a big switch to working from home over the next 5/10 years which should ease the commute and emissions. Also the electric car will be seen a lot more on the roads in the next decade as both petrol and diesel are being phased out.

H. If last year is anything to go by and more people work from home. It looks like people are actually saving a hell of a lot more money and with the way things are framed now most markets/services and commodities can be accessed or bought online. Ergo we still have a huge edge in competitiveness as Ireland is seen as a very tech savvy country.

fliball123

PommieBast wrote: »

Trouble is where the houses are in relation to where jobs are.

OK can you flesh that out a bit not sure what point your making?

fliball123

Villa05 wrote: »

Recent history would have thought us that cheap money is not a good reason to drive up property/rent prices beyond affordabilty range for most


Surely we have not forgotten that in 12 years

There are measures in place that mean that the same thing that happened 12 years ago will not happen again. Once again you say affordability. I reckon the vast majority of people would be able to afford rent in any county outside of the big cities. IE Dubllin, Galway, Cork, Limerick. If you want a location that is within say Dublin you have competition as a lot of people want to live there and as such with competition/Demand prices go up.

combat14

Villa05 wrote: »

We have not started paying back what we borrowed 10-12 years ago yet despite strong growth in that time



The wealth created in that strong growth has been absorbed by property and increasingly leaving the country untaxed.


The cycle shows no signs of stopping and is incentivised by the state



We are essentially spending our wealth on making life more difficult and expensive for our citizens for the benefit of foreign pension funds and investment trusts despite our own pensions crisis looming



This is neither smart or sustainable

certainly not sustainable ..

combat14

fliball123 wrote: »

.
And yet 10/12 years on without paying we are still not bankrupt. Have you any evidence of wealth leaving the country? and have you compared the wealth leaving with the wealth coming into the country ?? But back to the point we wont be going backrupt any time soon one of the biggest advantages of being in the EU is that there will always be a lender of last resort ... An addition 20/30 billion at near zero interest is not going to burst any bubbles anytime soon

its always great when avoiding bankruptcy is the metric of success

Smouse156

TheSheriff wrote: »

This is nuts.

It will delay FTBs keeping them in rentals longer. Spending money unnecessarily.

It will also further delay the delivery of private home, decreasing supply, increasing competition etc. If I was a conspiracy theorist.........

Can’t builders say they’re just gonna work on the social 10% of the estate etc for this month

fliball123

combat14 wrote: »

its always great when avoiding bankruptcy is the metric of success

Well how do you think it would of played out if the government did not borrow the money for PUP and to support businesses that were forced to close, how many extra companies would of hit the wall. Yes we may not of had to borrow money to pay for this but then what about the other consequences as in how many people would of lost the job. How much extra would we of had to pay in social welfare and redundancy payments. What about the loans those companies owe out to banks, could this have messed a couple of banks up?? This money we borrowed in the last year was not about stopping us going bankrupt it was to help out the workers of this country and businesses who through no fault of their own were told to close up shop. I think they took the better option we would of been on the hook for billions in welfare and redundancies if the government had not step in anyway.

combat14

fliball123 wrote: »

Well how do you think it would of played out if the government did not borrow the money for PUP and to support businesses that were forced to close, how many extra companies would of hit the wall. Yes we may not of had to borrow money to pay for this but then what about the other consequences as in how many people would of lost the job. How much extra would we of had to pay in social welfare and redundancy payments. What about the loans those companies owe out to banks, could this have messed a couple of banks up?? This money we borrowed in the last year was not about stopping us going bankrupt it was to help out the workers of this country and businesses who through no fault of their own were told to close up shop. I think they took the better option we would of been on the hook for billions in welfare and redundancies if the government had not step in anyway.

exactly you are dead right we rightly needed to borrow to keep the show once again on the road

unfortuntately the country is now up to its proverbial eye balls in debt - hundreds of billions of debt and still not out of the woods yet..

this will have to be paid back through increased taxes and expenditure cuts .. which will directly impact mortgage payers at some point in time

meanwhile the irish property circus continues unabated as if it is party like its 2006

fliball123

combat14 wrote: »

exactly you are dead right we rightly needed to borrow to keep the show once again on the road

unfortuntately the country is now up to its proverbial eye balls in debt - hundreds of billions of debt and still not out of the woods yet..

this will have to be paid back through increased taxes and expenditure cuts .. which will directly impact mortgage payers at some point in time

meanwhile the irish property circus continues unabated as if it is party like its 2006

We were 210 billion in debt precovid and we seemed to manage just fine financially I believe we had turned the corner with out deficit going from a minus to a plus back in 2018/2019 and covid is estimated to add another 20/30bilion. Remember now the addition 20/30 billion is at a near zero interest rate. I think the government have learned the lesson that you cannot tax or cut your way out of debt/recession as was proven after the last crash. As for property if you want a decent property in a decent location there is competition for it and there is not a lot of choice to choose from out there..

PommieBast

fliball123 wrote: »

OK can you flesh that out a bit not sure what point your making?

Ireland's average house price is skewed by cheap houses located where there are basically no jobs, so the statistic is meaningless.

fliball123

PommieBast wrote: »

Ireland's average house price is skewed by cheap houses located where there are basically no jobs, so the statistic is meaningless.

Its not meaningless at all and it this day and age with WFH a lot more prevalent its actually quite easy to live in the back a$$ of Leitrim and work for a Google or Facebook and do your work remotely. If you want a nice sea view in a leafy area in Dublin you have to pay for it sorry but there will be a lot of other people who would want the same but why do people think Ireland should be any different to any other country in the world when it comes to buying property? Location is one of the prime drivers of the cost of a property. You could take a mansion there in say Howth or Dalkey and you would pay millions for it. Take that same gaff and slap it in Rosscommon and see how much you get for it.

PommieBast

fliball123 wrote: »

Its not meaningless at all and it this day and age with WFH a lot more prevalent its actually quite easy to live in the back a$$ of Leitrim and work for a Google or Facebook and do your work remotely.

OK for (I presume) you and me who work in that sector. Everyone else is stuffed.

fliball123

PommieBast wrote: »

OK for (I presume) you and me who work in that sector. Everyone else is stuffed.

Thats not the argument the argument you made was that you in someway see properties in places that would be seen as undesirable or too far away from viable work as they are too far from the major cities. I have just given you a reason why some people like you and me could buy one of these and set themselves up for work. Or long story short the average house price is no longer as meaningless as it once was as even in the most remote areas people can work from home

Marius34

Timing belt wrote: »

A lot will depend on how sever the lockdown is and how long it lasts.

I am hearing that it will mean everything closed with the exception of real essential this time and things like click and collect will no longer be allowed operate.

The problem I see that lockdown may reduce non-UK variant significantly, but not the UK one, as it's more contagious, thus UK variant becoming the dominant. And once it's dominant, Level 3 may not be sufficient to reduce number of cases, thus we may stuck on Level 5 for months.

Timing belt

Marius34 wrote: »

The problem I see that lockdown may reduce non-UK variant significantly, but not the UK one, as it's more contagious, thus UK variant becoming the dominant. And once it's dominant, Level 3 may not be sufficient to reduce number of cases, thus we may stuck on Level 5 for months.

If that is the case it will be European wide and will probably put all the European economies back into recession and kill off businesses that were only just keeping their head above the water.

Consumer confidence will fall with spending being curtailed and an increase in savings as people will be less certain about the future.

Government's will probably need to borrow more to fill the GAP in GDP. So will see an increase in QE and a further rise in the stock market increasing the bubble that already exists and threatening the financial stability and the likelihood of a new financial crisis.

Banks will be hit hard as NPL's increase at a significantly higher pace than the first lock down as people directly impacted will more than likely already used up any savings that they had prior to this. Its hard not to see this impacting the property market if it is a strict lock down for say 5-6 months

The big question is how quickly a vaccine can be rolled out and how long can the economy stay at Level 5 without permanent damage to the economy.

Hubertj

Villa05 wrote: »

We have not started paying back what we borrowed 10-12 years ago yet despite strong growth in that time



The wealth created in that strong growth has been absorbed by property and increasingly leaving the country untaxed.


The cycle shows no signs of stopping and is incentivised by the state



We are essentially spending our wealth on making life more difficult and expensive for our citizens for the benefit of foreign pension funds and investment trusts despite our own pensions crisis looming



This is neither smart or sustainable

We have started paying back what we borrowed since 2008.

Hubertj

Are the conspiracy theorists going to suggest that government plans to shut down construction again are part of a grand scheme to further restrict supply and maintain prices at unsustainable levels?

Timing belt

Hubertj wrote: »

We have started paying back what we borrowed since 2008.

In fact all the debt of 2008 has been refinanced at a much lower rate so the servicing costs are a fraction of what they were.

Ireland is not longer classified along with Italy, Greece, Spain and Portugal but with the more conservative northern economies due to the way they have managed the public debt.

Timing belt

Hubertj wrote: »

Are the conspiracy theorists going to suggest that government plans to shut down construction again are part of a grand scheme to further restrict supply and maintain prices at unsustainable levels?

Not only will they do that but they will do more QE to ensure that interest rates are artificially low to prop up property market. The property market is the real driver behind QE not the economy.

Villa05

fliball123 wrote:

There are measures in place that mean that the same thing that happened 12 years ago will not happen again. Once again you say affordability. I reckon the vast majority of people would be able to afford rent in any county outside of the big cities. IE Dubllin, Galway, Cork, Limerick. If you want a location that is within say Dublin you have competition as a lot of people want to live there and as such with competition/Demand prices go up.

Those measures are being continually circumvented by Govt policy
Ftb grant
Shared ownership
If the isuue is confined to our cities, which for the most part I agree with. It shows how easy the problem is to solve

By increasing supply in those areas and it does not require huge amounts to restore supply/demand imbalance if freeing up air bnb's stabilised rents in Dublin

Instead we are spending billions annually tinkering around the edges propping up rents and prices

fliball123

Villa05 wrote: »

Those measures are being continually circumvented by Govt policy
Ftb grant
Shared ownership
If the isuue is confined to our cities, which for the most part I agree with. It shows how easy the problem is to solve

By increasing supply in those areas and it does not require huge amounts to restore supply/demand imbalance if freeing up air bnb's stabilised rents in Dublin

Instead we are spending billions annually tinkering around the edges propping up rents and prices

Yeah but in most other first world countries people can borrow up to 5 times their salary we are still not borrowing as much. I dont think increasing the supply is as easy as you think and who are you to tell a person who owns a property what to do with it? if people want to live, rent or airBnb the hell out of their property that is their business.

Also heard a few stats on Newstalk there we had an extra 10k people nett hired by multinationals last year so all the talk of them making masses redundant are unfounded and our saving rates up to November or last year ballooned up to 124k Billion in personal savings account and 72 billion in business savings accounts. Thats a lot of savings..Then on the same program a very sad discussion and interviews with 100s living on the street in inner city Dublin in around the gaiety theater who wont go into hostels as its full of drugs and prefer to stay on the street in this horrible freezing weather. So should the government stop snapping up property and just let these people die ?? 2 died over xmas in the cold in Dublin. This is where the government are in a catch 22 situation

Timing belt

Villa05 wrote: »

Those measures are being continually circumvented by Govt policy
Ftb grant
Shared ownership
If the isuue is confined to our cities, which for the most part I agree with. It shows how easy the problem is to solve

By increasing supply in those areas and it does not require huge amounts to restore supply/demand imbalance if freeing up air bnb's stabilised rents in Dublin

Instead we are spending billions annually tinkering around the edges propping up rents and prices

The central bank rules on LTI & LTV have allowances built in that allow the banks to break the rules for a small portion of new mortgages.
i.e

LTV limit
FTBs: 90% with 5% of new mortgages above the limit,
SSBs: 80% with 20% of new mortgages above the limit,
BTL: 70% with 10% of new mortgages above the limit

LTI limit
3.5 with the following share of new mortgages above this limit:
FTBs: 20%,
SSBs:10%

Source : page 103 of the Vulnerabilities in the residential real estate sectors of the EEA countries Report published September 2019

yes the government need to increase supply everyone knows this and it is also know that it is a slow process which is compounded by uncertainty and because of this decision are delayed as no-one wants to build at a loss. The government schemes of HTB and shared ownership are there to provide confidence that the properties will be built at a profit and thereby increasing the speed at which the supply comes to the market.

HAP is there to address what is meant to be a short term issue and provide housing assistance until sufficient supply comes on line. Somewhere along the way this has lost its purpose of being short term and has become a permanent fixture with the government guaranteeing rent for the foreseeable and contributing to high level of rents we see in the market. To further compound the impact of this policy if you try and increase social housing it impacts FTB by reducing the housing supply available whether it is less non-social houses being built or being out bid by the government/housing association that is on the open market.

On top of this that institutional investors are being forced into different asset classes as they chase yield (A consequence of QE) and you have a low risk investment that is providing a strong yield thanks to shortage of supply in a property market that is not elastic.

It is a perfect storm and you need to remember that total population is split with 2/3 being home owners and 1/3 renting so any government decision or policy will be influenced by this split.
e.g.
1/3 of population are house owners with no mortgage
1/3 of population are house owners with a mortgage
1/3 renting.


The final point on the topic is that this is not just a issue in Ireland it is happening right across the developed economies of the world. The report I linked to above highlights the risks in residential property in each of the European countries and Ireland fair much better than most. Maybe that is as the down to the fact that the report states that the Central Bank of Ireland’s own valuation metrics indicate that house prices are now in line with or just above values justified by economic fundamentals

HotDudeLife

Marius34 wrote: »

It's 10Billion of additional savings in short time of period. Whether it's additional 10K Euro for 1 million people, or 100K Euro for 100.000 people, it's a large increase what ever way you look.
You can expect that not all planning to buy property, but even if it's 10% of those people, that makes a significant difference.

Very marginal, like i said if a person were nowhere near in a position to buy 9 months ago and even if they saved every penny since, they would still not be in a position to make an impact on the market. Not everyone has the discipline to save like that and many are shortsighted and will just waste savings on clothes, gigs, travel etc when restrictions are lifted.

HotDudeLife

Mic 1972 wrote: »

The Daft report for Q4 sales is showing a significant increase in YOY prices.
Not only there was no price drop in 2020, prices went up a lot

https://ww1.daft.ie/report/2020-Q4-houseprice-daftreport.pdf?d_rd=1

Report metrics are based on asking prices which is thrash.



I've been monitoring the area i grew up in Dublin on PPR and since the end of 2019, sales prices have actually dropped roughly 6-7%. This of course does not apply for all of Dublin.

Timing belt

HotDudeLife wrote: »

Very marginal, like i said if a person were nowhere near in a position to buy 9 months ago and even if they saved every penny since, they would still not be in a position to make an impact on the market. Not everyone has the discipline to save like that and many are shortsighted and will just waste savings on clothes, gigs, travel etc when restrictions are lifted.

How can 10bn be called marginal if the government borrowed 10bn for social housing the country people will be on about the unsustainable debt. It’s not a marginal figure as you put it!!!

If they choose to spend savings on a big party good for them but then can they stop complaining how hard it is to get on the property ladder when as you put they will just waste savings.

HotDudeLife

Timing belt wrote: »

How can 10bn be called marginal if the government borrowed 10bn for social housing the country people will be on about the unsustainable debt. It’s not a marginal figure as you put it!!!

If they choose to spend savings on a big party good for them but then can they stop complaining how hard it is to get on the property ladder when as you put they will just waste savings.

It will be marginal when you break it down across the working population and what's left of it is actually used to get on the property ladder. It may help with deposit for a house sure, but only for those already in a position to buy already. Very little of it will transfer into huge cohorts of the population being nowhere near in a position to buy and then suddenly 9 months ready to make it rain on the property market.

Marius34

HotDudeLife wrote: »

Very marginal, like i said if a person were nowhere near in a position to buy 9 months ago and even if they saved every penny since, they would still not be in a position to make an impact on the market. Not everyone has the discipline to save like that and many are shortsighted and will just waste savings on clothes, gigs, travel etc when restrictions are lifted.

If Couple cancelling their 30K weddings and 10K honeymoon, they might be now in position to buy.
If single/couple on 100K were not able to save 10% deposit, now they might have.
If single/couple was increasing saving very slowly, they might do it much faster now.

There are so many different scenarios, that additional savings can make them from non-potential buyer to potential buyer, in a year, without change in their job/wage.