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

JimmyVik

Posted this in the wrong thread, so moving it here

I heard on the radio this morning that houses are going for on average €120K over asking.
This is a horrible situation for house buyers and is just taking advantage of the pandemic panic.
I think whats happening is that people buying houses in the €350k price range would have expected to get a half decent house for that.
But now people are bidding up in the fear that houses selling for €220k now will go to the €350k floor and they will have to settle for areas and houses that are total **** holes even above €300k.
There is definitely something wrong with the market here, and estate agents and media stirring panic buying is the cause.

It wont be too long at this rate before €350k only gets you a 2 bed duplex in Ballymun.
People in Dublin will hit the CB ceiling so wont get anything better.
Then you have houses being built all over the place by councils and bought by councils, and rented to councils. Squeezing the ftb and the trader upper out altogether, while costing the taxpayer a fortune.
Its just a total sh1t show out there. If I was looking right now I would hold off for a few years tbh. Something big has to give , and soon.

Graham

I'd want to confirm that €120k over average figure before setting the outrage-o-meter to full.

JimmyVik

Hubertj wrote: »

I don’t know about the price differential but the house needing renovation is right at the junction. That would put me off - noise from cars, trucks and buses starting and stopping, difficulty driving in and out of driveway etc.

I always loved hearing things like this when I was looking at houses
It puts so much of the competition off, but if you ever lived beside a road or a bus stop, or even train tracks, or talk to anyone who has you find that after a week of someone living there they actually dont hear that noise anymore.
So knowing a bit of human psychology, and having experience that others dont can save you hundreds of thousands


People stress about things that are actually trivial when buying a house. If you are bidding use that to your advantage.

JimmyVik

Graham wrote: »

I'd want to confirm that €120k over average figure before setting the outrage-o-meter to full.

Of course, but even reading this thread, its a very, very bloated market at the moment. If, when the pandemic panic is over, hings go back to normal in a year or two, that panic premium will be gone and anyone who has bought in the meantime is going to see the value of their houses fall.
Not a problem if they arent selling, but if it were me I would rather wait and see.

It was one thing last year, but this year is a whole new level.
Just ask anyone looking to buy at the moment.

SmokyMo

Graham wrote: »

I'd want to confirm that €120k over average figure before setting the outrage-o-meter to full.

Agree. Would have hard time believing bank would approve drawdown on a house that is over paid by 100k+

MacronvFrugals

HAP - expected to cost 1 billion this year

Leasing - units from funds = HAP on steroids (fool proof investment)

In 2019 developers left 5% new of stock vacant because they didn't think the market could take it


There is a very strong whiff of artificialness off everything here to the detriment of citizens

Graham

JimmyVik wrote: »

Of course, but even reading this thread, its a very, very bloated market at the moment. If, when the pandemic panic is over, hings go back to normal in a year or two, that panic premium will be gone and anyone who has bought in the meantime is going to see the value of their houses fall.
Not a problem if they arent selling, but if it were me I would rather wait and see.

It was one thing last year, but this year is a whole new level.
Just ask anyone looking to buy at the moment.

Supply has been curtailed, so has demand but anecdotally to a much lesser extent.

No doubt that's going to put upward pressure on prices although I don't for a minute buy the average €120k increase.

Buyers absolutely should keep that in mind when buying now and decide for themselves whether it works for their own financial/familial circumstance.

If someone is paying €20K + in rent each year an/or have struggled to find secure rental accommodation then buying now may suit some regardless of any perceived short term risk.

JimmyVik

Graham wrote: »

Supply has been curtailed, so has demand but anecdotally to a much lesser extent.

No doubt that's going to put upward pressure on prices although I don't for a minute buy the average €120k increase.

Buyers absolutely should keep that in mind when buying now and decide for themselves whether it works for their own financial/familial circumstance.

If someone is paying €20K + in rent each year an/or have struggled to find secure rental accommodation then buying now may suit some regardless of any perceived short term risk.

Looking in other threads on here there are people posting up for example that they are bidding on houses that they see on the PPR for €300k last year, now with asking of €350 and bids keep going up.


I closed a sale in the last year and before I even moved in or even made any changes to it, I got an offer i couldnt refuse to sell it on.
Just my opinion, bu i think there is definitely a panic on.

Smiley11

JimmyVik wrote: »

Posted this in the wrong thread, so moving it here

I heard on the radio this morning that houses are going for on average €120K over asking.
This is a horrible situation for house buyers and is just taking advantage of the pandemic panic.
I think whats happening is that people buying houses in the €350k price range would have expected to get a half decent house for that.
But now people are bidding up in the fear that houses selling for €220k now will go to the €350k floor and they will have to settle for areas and houses that are total **** holes even above €300k.
There is definitely something wrong with the market here, and estate agents and media stirring panic buying is the cause.

It wont be too long at this rate before €350k only gets you a 2 bed duplex in Ballymun.
People in Dublin will hit the CB ceiling so wont get anything better.
Then you have houses being built all over the place by councils and bought by councils, and rented to councils. Squeezing the ftb and the trader upper out altogether, while costing the taxpayer a fortune.
Its just a total sh1t show out there. If I was looking right now I would hold off for a few years tbh. Something big has to give , and soon.

I seriously doubt 120k over is the average but there are absolutely certain desirable homes/areas commanding the panic premium. I honestly can't fathom this market at all but I'd be very interested to know how many of those 120k+ bids transfer into actual sales. Are banks telling these lunatics to cop t.f. on or are they facilitating the frenzy?

Graham

JimmyVik wrote: »

Looking in other threads on here there are people posting up for example that they are bidding on houses that they see on the PPR for €300k last year, now with asking of €350 and bids keep going up.

Yup, I've seen a few examples over the last few months. No doubt there's some upward pressure as I mentioned.

Some of the recent examples including very strong sight-unseen offers I'd take with a large pinch of salt for now but you never know. When things reopen, supply will still be constrained for quite some time while I expect additional demand to appear fairly quickly.

Hubertj

Graham wrote: »

Supply has been curtailed, so has demand but anecdotally to a much lesser extent.

No doubt that's going to put upward pressure on prices although I don't for a minute buy the average €120k increase.

Buyers absolutely should keep that in mind when buying now and decide for themselves whether it works for their own financial/familial circumstance.

If someone is paying €20K + in rent each year an/or have struggled to find secure rental accommodation then buying now may suit some regardless of any perceived short term risk.

Was this now in relation to people bidding on property in Kerry - holiday homes etc? There was something in the examiner about people from overseas virtually viewing and bidding on homes

https://www.irishexaminer.com/property/residential/arid-40246703.html

awec

I think using an actual money figure is misleading. It would better to use the percentage over asking.

IMO using an all up figure is also a bit pointless. You need to be more granular and aknowledge that the market forces in the 1+ million range are different to the market forces in the 500k+ range, that are again different to the sub 500k range etc.

Graham

Hubertj wrote: »

Was this now in relation to people bidding on property in Kerry - holiday homes etc? There was something in the examiner about people from overseas virtually viewing and bidding on homes

https://www.irishexaminer.com/property/residential/arid-40246703.html

Not sure holiday homes in Kerry make for a particularly representative sample Hubertj, at the same time I'm not surprised to hear demand for holiday homes in Kerry has increased.

Cyrus

DataDude wrote: »

https://www.myhome.ie/residential/brochure/5-stradbrook-road-blackrock-co-dublin/4490118

https://www.myhome.ie/residential/brochure/greenbank-stradbrook-road-blackrock-co-dublin/4490119

Two identical sized houses, similar plots, same road, same estate agent, put up same day.

Seems a remarkably high premium of €400k for the refurbed one, especially given the C3 BER? The cheaper one is also a better location I think. Am I missing something?

i think you would have a better product if you put 4-500k in the cheaper one for sure, but it would cost all of that and some people just dont want the hassle or are better able to borrow that money than have it available for a renovation out of their own pocket.

fliball123

The_Conductor wrote: »

We paid a smidgeon under 8 billion in interest last year (2020) and are projected to pay over 7 billion in each year over the next 4 years.

10% of our tax revenue- is going on servicing debt (assuming revenue of circa 80 billion).

Rates may be low- but we're not in a good place if we are hemorrhaging this level of revenue purely on funding debt.

By the way- we got off a 750m bond at -0.58% this week- notwithstanding this- we will be spending circa 22 billion more than our income in 2021.

I know its Covid time and everything- but seriously, our finances are so far out of kilter that they're just not funny.

So its come down by 1 billion even do we have borrowed more

DataDude

Cyrus wrote: »

i think you would have a better product if you put 4-500k in the cheaper one for sure, but it would cost all of that and some people just dont want the hassle or are better able to borrow that money than have it available for a renovation out of their own pocket.

Are you factoring in an extension as well as retrofit for €500k? I always had approx. €1750 - €2000 per sqm for a very high end retrofit from RENOVA or someone similar.

A project actually kinda suits us to some degree, so that one might be runner. As only two of us currently we don't need the space currently and could borrow refurb money from family as we needed it.

Just noticed there is probably room for a second house on the site (and it's mentioned in the description). Assume that means it'll blow through asking price if a developer can put a €600k house in a postage stamp to the side of it.

Cyrus

DataDude wrote: »

Are you factoring in an extension as well as retrofit for €500k? I always had approx. €1750 - €2000 per sqm for a very high end retrofit from RENOVA or someone similar.

A project actually kinda suits us to some degree, so that one might be runner. As only two of us currently we don't need the space currently and could borrow refurb money from family as we needed it.

Just noticed there is probably room for a second house on the site (and it's mentioned in the description). Assume that means it'll blow through asking price if a developer can put a €600k house in a postage stamp to the side of it.

yes i was going with say 200 sqm for the finished house at 2.5k per sqm to include extension and retrofit of existing, id guess its not that far out.

you are in an ideal scenario in that regard, no kids, access to the funds to do it, and it will be a fun project (well as fun as it can be but the two of you should enjoy it!)

that said, if i was buying at 850k id prefer the sandycove house (location only) to stradbrook road personally.

Woshy

Graham wrote: »

I'd want to confirm that €120k over average figure before setting the outrage-o-meter to full.

It's from an article in The Journal https://www.thejournal.ie/impact-of-pandemic-on-house-prices-in-ireland-5384503-Mar2021/

It says one property went for 120K over asking and others are going over asking but for a lower amount.

We signed contracts on our house a few days after we went into lockdown in March 2020 (we went sale agreed in February). Plenty of people (including some on this forum) told us things were very uncertain (which is fair enough) and house prices would drop with people out of work due to the pandemic and we should pull out and look again at another stage. I'm so grateful we didn't.

fliball123

Woshy wrote: »

It's from an article in The Journal https://www.thejournal.ie/impact-of-pandemic-on-house-prices-in-ireland-5384503-Mar2021/

It says one property went for 120K over asking and others are going over asking but for a lower amount.

We signed contracts on our house a few days after we went into lockdown in March 2020 (we went sale agreed in February). Plenty of people (including some on this forum) told us things were very uncertain (which is fair enough) and house prices would drop with people out of work due to the pandemic and we should pull out and look again at another stage. I'm so grateful we didn't.

Anyone taking advice on property from here needs their head examined.

Woshy

fliball123 wrote: »

Anyone taking advice on property from here needs their head examined.

Definitely - take everything with a massive heaping of salt.

DataDude

Cyrus wrote: »

yes i was going with say 200 sqm for the finished house at 2.5k per sqm to include extension and retrofit of existing, id guess its not that far out.

you are in an ideal scenario in that regard, no kids, access to the funds to do it, and it will be a fun project (well as fun as it can be but the two of you should enjoy it!)

that said, if i was buying at 850k id prefer the sandycove house (location only) to stradbrook road personally.

Would also much prefer Sandycove location but given the additional amount that needs to be spent on the house, don’t like exterior of Sandycove house and the straight east garden aspect - there are pros&cons to both!

Cyrus

DataDude wrote: »

Would also much prefer Sandycove location but given the additional amount that needs to be spent on the house, don’t like exterior of Sandycove house and the straight east garden aspect - there are pros&cons to both!

sorry i forgot about the aspect, good point, i think the exterior you could work with, if you were doing a full job you can remodel that, but aspect you cant change unfortunately.

Timing belt

Central bank saying that tax increases will be required...

https://m.independent.ie/business/budget/taxes-will-have-to-rise-to-fund-extra-services-warns-central-bank-40225896.html

cnocbui

The government increased taxes dramatically in response to the bank crisis and the GFC - VAT increased to 23%, USC which was supposed to be a temporary measure.

I can't wait to do my bit with this new lot of permanent temporary tax increases, while watching REITS get slugged with none.

beaufoy

Woshy wrote: »

Definitely - take everything with a massive heaping of salt.

I suggest most people giving advice either on purpose or by way of no knowledge give the wrong advice. Having said that I will now give my advice. Said advice comes from a person who I would suggest is the most qualified person in Ireland.
Prices will bounce around whilst lock down is on. Then straight after lock down prices will increase by way of people waiting till the end of lock-down before they buy. Then after said spike occurs prices will fall

Mic 1972

beaufoy wrote: »

I suggest most people giving advice either on purpose or by way of no knowledge give the wrong advice. Having said that I will now give my advice. Said advice comes from a person who I would suggest is the most qualified person in Ireland.
Prices will bounce around whilst lock down is on. Then straight after lock down prices will increase by way of people waiting till the end of lock-down before they buy. Then after said spike occurs prices will fall

I don't think anyone who wants to buy is holding back, as the market is pretty much open and very active
Prices have been sky rocketing for the last few months now. Viewings are taking place with due restrictions, the process is very fast. You have to be able to bid high right away because EAs gather initial offers, then arrange one viewing for each bidder, then they do a final round of offers and that's it.

Hubertj

Timing belt wrote: »

Central bank saying that tax increases will be required...

https://m.independent.ie/business/budget/taxes-will-have-to-rise-to-fund-extra-services-warns-central-bank-40225896.html

I think this is stating the obvious. I believe the only questions are the nature of the taxes that will be introduced, when and the type of phasing. I think any tax increases also need to consider a review of public expenditure. Why does the report only mention tax increases and not by delivering efficiencies in expenditure?

I think there is a couple of billion in savings on health alone - as In better use of funds, not cutbacks. There might even be a couple of euro to save in the provision of housing.

hometruths

Hubertj wrote: »

I think this is stating the obvious. I believe the only questions are the nature of the taxes that will be introduced, when and the type of phasing. I think any tax increases also need to consider a review of public expenditure. Why does the report only mention tax increases and not by delivering efficiencies in expenditure?

I think there is a couple of billion in savings on health alone - as In better use of funds, not cutbacks. There might even be a couple of euro to save in the provision of housing.

I agree with you that these are the two areas where the most fat can be cut off, but they're also the two most politically sensitive.

I can't see govt saying "We're going to cut health and housing budgets in aftermath of pandemic and midst of housing crisis." The opposition will have a field day.

Hubertj

schmittel wrote: »

I agree with you that these are the two areas where the most fat can be cut off, but they're also the two most politically sensitive.

I can't see govt saying "We're going to cut health and housing budgets in aftermath of pandemic and midst of housing crisis." The opposition will have a field day.

Agree 100% but I’m really referring to better procurement- renewing various contracts for sale or improved services but at better commercial terms. Imagine the good PR that would be?!?

Unfortunately public servants have consistently demonstrated they do not possess the competence or inclination to do so.

hometruths

Hubertj wrote: »

Agree 100% but I’m really referring to better procurement- renewing various contracts for sale or improved services but at better commercial terms. Imagine the good PR that would be?!?

Unfortunately public servants have consistently demonstrated they do not possess the competence or inclination to do so.

Fair point. Have a vague memory that this was the sort of drum Stephen Donnelly was banging way back when he was a Social Democrat, and before he started warning us about the dangers of trampolines.

I remember thinking he seemed like he might make a refreshing change and it was a shame he was not likely to become a minister.

I was wrong about that.