Irish Property Market chat II - *read mod note post #1 before posting*

This is it

https://www.boards.ie/discussion/comment/117780091#Comment_117780091

Is that confirmed? I was looking earlier but couldn't see anything definitive.

Sierra Oscar

Interestingly I've been keeping an eye on the market in north Dublin and there is still frenzied activity in the 300 - 450'ish bracket, but then I've inquired with a few estage agents regarding properties in the 520'ish and above range and one in particular that caught my eye hasn't even had any bids despite being on the market a couple of weeks. Affordability ceiling being reached?

MacronvFrugals

Cant get over how much of a graveyard Boards has been since the update!

Interesting story in the IT today, DCC reject lease deal because of excessive rents

Council’s lease deal for Dublin apartments collapses over ‘excessive rents’

https://www.irishtimes.com/news/social-affairs/council-s-lease-deal-for-dublin-apartments-collapses-over-excessive-rents-1.4651302?auth-failed=1&mode=sample&pw-origin=https%3A%2F%2Fwww.irishtimes.com%2Fnews%2Fsocial-affairs%2Fcouncil-s-lease-deal-for-dublin-apartments-collapses-over-excessive-rents-1.4651302&utm_source=pocket_mylist

popeyed2

https://www.boards.ie/discussion/comment/117781220#Comment_117781220

Is anyone else having an issue with the app? I can only post replies on the browser version so don't post from my phone at all.

Amadan Dubh

https://www.boards.ie/discussion/comment/117781220#Comment_117781220

I would love to know what the "few hundred euro" extra per month involved that made it unaffordable to the council.

Sarn

https://www.boards.ie/discussion/comment/117781239#Comment_117781239

The app hasn’t been supported in years and doesn’t work with the new site.

The councils locking in near premium rents for 25 years needs to stop. I’d also like to know what their cut off is. No doubt this will be revisited in a few months and a deal at ‘not quite exorbitant’ rents will be agreed.

Marius34

https://www.boards.ie/discussion/comment/117780834#Comment_117780834

"However, the main point is that, if everything was so stable in the economy and the housing market?"

Irish Housing market wasn't really very stable for decades I'd say. It wasn't stable even 9 years ago when the prices were much lower, by this logic you can say that prices where always in Bubble, even in 2012.

timmyntc

https://www.boards.ie/discussion/comment/117781488#Comment_117781488

Stupid "creative accounting" is to blame - they cant afford capital costs to buy new homes, so just lease and spread the cost out. Only in the end they have nothing - and they are on the hook for rents for the length of the lease.

Such a monumentally stupid policy - very FGesque though. The public-private partnership exploited to its fullest.

MacronvFrugals

https://www.boards.ie/discussion/comment/117781553#Comment_117781553

Even Eurostat advised against it,

"Eurostat said the practice of leasing social homes, as opposed to buying them outright, has almost completely de-risked development costs and funds “enjoy most of the rewards” of the deals."

https://www.businesspost.ie/houses/bulk-leasing-of-social-homes-has-no-substantial-economic-benefit-08149a9f

PommieBast

https://www.boards.ie/discussion/comment/117781152#Comment_117781152

Assuming they have the minimum 20% deposit and the 3.5x salary limit of mortgages, a buy price of €450k means a couple on about €52k each. Pretty certain such salaries are about average for Dublin, and they will be above median..

popeyed2

https://www.boards.ie/discussion/comment/117781488#Comment_117781488

Thanks, new user here.

Amadan Dubh

https://www.boards.ie/discussion/comment/117781533#Comment_117781533

In 2012 house prices were the lowest they had been since 2000. Again, I think it is fair to see that the 00s Celtic Tiger prices were outrageous and caused by excessive and reckless credit in the housing market, which really took off in the 00s (obviously the 1990s was also quite explosive). Without the excessive leverage it is probable that we would have not had such a horrific crash from the highs of 2006/2007, but we did due to the leverage in the market. Fast forward to post-2012, prices today are nearly back to where they were in 2006/2007, yet it appears the underlying contributory factors to the bust are corrected (i.e. no excessive lending to individuals and no oversupply of property in the market), so something else has caused prices to rocket up once again. I look at salaries and credit available to individuals via mortgages and cannot see these things as a factor in the house price increases post-2012; demand looks solid therefore the market looks better insulated from a crash on the face of it.

However I, of course (different to you Marius34 and other posters), don't really think it is better insulated from a crash and think it is due to something unstable and unsustainable. Others disagree; but I don't think it is absurd to think that prices could correct to something close to what they were in 2000 or 2012 (without salaries soaring).

Marius34

https://www.boards.ie/discussion/comment/117782068#Comment_117782068

Many things can happen, prices can crash, prices can double. But just because unknown things can happen, it's not argument to tell that we are in a bubble.

If you don't understand why prices went up from 2012, i would advice you to first look at the demand/supply. and as part of demand as well credit availability, unemployment and population increase.

Timing belt

https://www.boards.ie/discussion/comment/117780834#Comment_117780834

Inflation hasn’t hit its target of 2% for a sustained period yet so don’t see any rate rises in the short term.

QE is not being undertaken to prop up house prices and doesn’t look like it will go away any time soon...if anything it more will be undertaken to provide a green infrastructure just look at USA with the 1 trillion announcement last week.

ber84101

Can I ask some advice please?

I'm a first time buyer and I seen a new development in Dundalk. I'm not from the area, 30 mins commute, I have paid the booking deposit but I'm having my doubts about the area, im wondering if anyone knows the area and could recommend or avoid, the development is called Dundoogan dundalk.

Many thanks for taking the time to read, I just don't want to make the wrong decision.

Thanks

cnocbui

https://www.boards.ie/discussion/comment/117781220#Comment_117781220

My goodness, that means DCC employ at least one person who passed ordinary math in the leaving. Maybe they should have a scrounge and see if they can find a couple more.

cnocbui

https://www.boards.ie/discussion/comment/117782068#Comment_117782068

I think you are out of touch with reality. Prices in 2012 were not normal, they were utterly crazy, being well under the cost of supply. I valued my property purchased in 2000 in 2011 and it was 28% less than the basic cost of constructing the building alone, so adding in the cost of land and external infrastructure costs and improvements, it was more like 40% percent undervalued. Prices only recovered to parity with supply cost in around 2019.

I am hoping to sell that same house soonish. I doubt that even at current prices I will make any profit, factoring in inflation and opportunity costs of the capital, I suspect a loss is more likely after 22 years of 'investment'.

yagan

https://www.boards.ie/discussion/comment/117784768#Comment_117784768

You still will have had a habitat and security of tenure over that time, which is the primary value of the shelter.

I hated seeing an essential social requirement becoming primarily a speculation vehicle in the Bertie years and now again recently.

cnocbui

https://www.boards.ie/discussion/comment/117784948#Comment_117784948

I should blo​ody well hope so, I paid a considerable amount of money for those, they weren't freebies.

Amadan Dubh

https://www.boards.ie/discussion/comment/117783863#Comment_117783863

Inflation not hitting 2% is only due to the peculiar way it is measured. Housing is the biggest cost typically for people to pay from their salaries and it has soared well beyond 2% per year for nearly a decade. Yet it is excluded or altered when included in the inflation index. The central banks are fighting the last war, in my view, and it is either corruption or incompetence to claim the barometer used for measuring inflation is appropriate when it does not give a reading of more than 2% each year for the last few years. As a separate point, I do not have much faith in our own central bank and my experience with them and how they operate in one of the areas they regulate is that they are very much in the dark on a lot of the issues and end up trying to close the stable door after the horse has bolted. In particular, they are only very recently trying to gather more granular and holistic information on the shadow banking industry in Ireland and how it plays a part in the global financial system - this is despite the shadow banking industry in Ireland being around €5tn per annum,up from €1.3tn in 2013. The fact finding as to what is going on only began properly in the last couple of years, the regulator doesn't have much insight into who is investing in the sector and in what assets the money is ending up!

https://www.irishtimes.com/business/financial-services/state-s-5tn-shadow-banking-world-will-be-in-the-spotlight-after-covid-19-1.4440755

On the QE point, I feel it is directly correlated to the "everything bubble" being experienced in assets, which includes property. However, the Federal Reserve is directly purchasing mortgage backed securities, for example, as part of its QE programme. The Irish government is pouring money into the property market with its various supports (eg councils entering social housing leases, help-the-brickie scheme, funding to housing charities) so the ECB is indirectly printing money to fuel the fire of our property market as well when we "borrow" from them.

Eclectic Econometrics

https://www.boards.ie/discussion/comment/117784768#Comment_117784768

Hello cnocbui,

Are you taking into account the money you put into the mortgage payments, too, when you say you will make no profit. So let's say for example 1,000 a month for 22 years 264,000 is a figure you are also taking off the final sales price figure? If it is too personal no need to answer, it just seems wild that after 22 years there's no equity.

On Amadan's last point, is there anyone on here that thinks house prices would've risen, or recovered, without the various QE programs?

Marius34

https://www.boards.ie/discussion/comment/117788124#Comment_117788124

It's hard to predict, what could have happened, as there is always other solutions in place. Some better some worst.

But with less government spending, I think the prices would have fallen slightly in 2020/2021, and would start rise a year or 2 later. Construction sector probably would have a hit, thus the supply in coming years would have been lower that what is expected.

mcsean2163

Just back from 2 weeks in Kerry and the housing stock in Dublin is very depressing. Money doesn't go far in Dublin 😥

JimmyVik

https://www.boards.ie/discussion/comment/117795302#Comment_117795302

I remember looking at houses for €500k in Dublin.

Going away for a couple of weeks in Kerry.

And then cmparing what you get for half a million in Kerry to what you get in Dublin.

Nearly moved to Kerry :)

agoodpunt

https://www.daft.ie/for-sale/end-of-terrace-house-22-grace-park-heights-drumcondra-dublin-3/3448565

Tenants paying €850 a week no pics so i would imagine viewing will be difficult.

Its probably worth 400k socialising private LLs has gifted it away am sure the residences inside know they are worth 50k cash to consider leaving

MacronvFrugals

Lick of old paint and an increase of 200k in the space of 9 months

Bass Reeves

https://www.boards.ie/discussion/comment/117796233#Comment_117796233

You be better off burning the place than giving them 50k to leave. If you are really determined to you will get any tenant out legally. Rent is very low 850/ calender month. New owner will probably turf them out and do the place and Jack rental up to at least double. I say tenants are there decade's

fago

Obviously things not increasing at a fast enough rate for every vested interest.

Could also argue 3.5 -> 4.5 doesn't fall into the "tweaking" category

Home ownership being blocked by mortgage rules, industry group claims

IPAV says rules should be tweaked to allow people borrow 4.5 times their income

Via Irish Times

Jmc25

https://www.boards.ie/discussion/comment/117798224#Comment_117798224

Absolute mad stuff. Never waste a good crisis I suppose.

Scarily I'd be almost certain their are some in government and the senior civil service who believe this would be a good idea - "we just need to push prices a bit higher and developers will build" has been the thinking for a whole decade.

jc1001

https://www.boards.ie/discussion/comment/117798256#Comment_117798256

It's so disappointing that more people don't call this out for what it is. Makes my blood boil to hear people peddling this nonsense. Yes borrow more, that will fix everything. Extend mortgage repayments until maybe 85 now. Make roofing and walls optional for houses. Have a wall purchase-plan, where the buyer would start with one wall, where they could hang a picture, but eventually aspire to work up to 4 walls over an extended payment plan. Have we learned nothing over the last few cycles, or do the vested interests and their ever more subtle spin doctors frame things so effectively now that any dissenting voice is easily dismissed as outlandish or as having an unrealistic expectation that if housing is too expensive for people, that its price may need to be revised downwards. Is there not a bigger picture being missed here where younger generations simly decide they have had enough, and move away to countries where it is cheaper to live, leaving a pension fund hole for the current comfortable classes, or maybe said classes will have flipped enough cheaply bought properties for it to make no difference to them. I'd be happy enough to see my place drop by a significant double-digit percentage if it meant my kids could purchase in the same area when they want to settle.