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

Dav010

https://www.boards.ie/discussion/comment/119368179#Comment_119368179

Which bid will a seller/developer accept, what you consider “fair value” or “market rate”?

Jonnyc135

https://www.boards.ie/discussion/comment/119368095#Comment_119368095

I wonder about this new fancy tool. Correct me if I am wrong but is this tool just a smaller scale money printing press that prints money to buy Italy's bonds in order to keep them from getting to an interest rate in which their are officially unable to pay their interest on their debt and therefore in default. Printing more money and increasing interest rates in order to control inflation it sounds like a completely broken system.

AdamD

https://www.boards.ie/discussion/comment/119368179#Comment_119368179

Fair value in any economic context is quite literally market rate

https://www.boards.ie/discussion/comment/119368013#Comment_119368013

Cool, yes I will keep you posted as I drive that road every second day. If they are bought at them prices then the buyers need there head examined. And that's not an exaggeration. My wife's family are from the area and are baffled why someone in their right mind would pay even 500k for a house in the area let alone 700k+. Oranmore is close to Galway city, Craughwell is not close. When paying them kind of prices for that kind of house (neighbours near, not much privacy etc) the furthest from the city you would want to be is Oranmore. I get people may want to live in the country but these are not country houses if you get me. A country house is when you have lots of space, loads of privacy etc. These are urban houses in a country village for urban prices......

timmyntc

https://www.boards.ie/discussion/comment/119368125#Comment_119368125

The value of that house is what someone is willing to pay for it. It’s that simple.

The value of any house is what someone is willing to pay for it - this is fairly basic stuff. To date, nobody has paid for those houses, that is just an asking price.

It is perfectly valid to criticise that asking price as at that price point there would be very little interest, given the same price point could buy similar standard house in a much more desirable area (Oranmore/Galway City suburbs).

Your devils advocate approach of "oh well its not a rip off because someone might pay for it" adds nothing to the debate at all.

PokeHerKing

https://www.boards.ie/discussion/comment/119368125#Comment_119368125

No I mean in general, every one of your posts on boards are contrary.

Anyway, if you've no idea about the location your opinion is useless.

Dav010

https://www.boards.ie/discussion/comment/119368527#Comment_119368527

Thats my point, as the houses are as yet unpaid for, how do you know whether there will be interest or if they are overpriced?

Jonnyc135

https://www.boards.ie/discussion/comment/119368539#Comment_119368539

Anyone in their right mind from that area know that that price is absolutely nuts, bar Mary Chivers pub there not much else in craughwell, as someone said in an earlier post most people that want to live there are from that surrounding area.

Dav010

https://www.boards.ie/discussion/comment/119368539#Comment_119368539

Do you think market rate economics apply only to one area?

Why do we all buy certain types and brands of cars even though we can get cheaper cars that will to the same thing? Personal choice, and we all view things differently. Few commodities have emotional attachments like property, we all look for different things and place different values on them. But one economic reality stands, your value may not be the same as everyone else’s and the one that matters most is what the buyer is willing to pay. That is the market value, that isnt contrary, it is reality. If you disagree with that, so be it, but the PPR reflects the selling price, not what you think it is worth.

Villa05

While we were enjoying the sunshine the taxpayer was raided again to feed the developers and correct their "mistakes"

https://www.businesspost.ie/news/state-to-sink-another-e450m-into-leasing-of-1000-social-housing-units/

http://www.rte.ie/news/ireland/2022/0715/1310364-defective-apartments/

Jonnyc135

https://www.boards.ie/discussion/comment/119368620#Comment_119368620

Taoiseach committed to phasing out this project and actively sink 450 million into it, they are jokers and still nothing of substance done about the cuckoo funds either.

mcsean2163

https://www.boards.ie/discussion/comment/119367972#Comment_119367972

I did not say what it's worth. I've been monitoring Kildare/ Wicklow for nearly three years with a view to buying.

A three bed bungalow in Naas with that garden would have been in the region of €500k pre covid19 I'd guess. This is a discussion forum and I'm noting the direction of travel, a direction which is far from ideal for me. Myhome now 14,728 and ECB on the rise, I'm personally hoping prices won't keep rising and a house matching our criteria appears.

Your observation that something is worth what people will pay for it, is not something of which I'm unaware. Indeed, I believe it is similar to what children learn in playschool at the pretend shop. There's no need to communicate that observation to me again.

Sierra Oscar

https://www.boards.ie/discussion/comment/119368121#Comment_119368121

The interest rate is usually subject to change right up until drawdown. Although it really depends what bank you are with regarding what will happen in reality. PTSB have signalled that they will absorb the initial two rounds of rate rises (which were expected to be .25% on each occasion). Most of the mainstream banks have indicated similar - i.e. trying to shield their 'green mortgages' from initial rate rises and so on in an attempt to make themselves competitive against new entrants.

The newer entrants to the markets like Avant will probably have less scope to absorb the initial round of rises given their initial low offerings. Higher interest rates also favour mainstream banks as Irish customers have massive deposits, negative interest rates have been damaging for their business. As rates rise it will alleviate the deposit conundrum.

You'll probably see the mainstream banks clawback mortgage business on the back of these rate rises.

PTSB committed today that will not pass on this rate hike to variable and fixed rate mortgage holders. I’m sure AIB and BOI will follow. Of course we are way above the average mortgage rate across the EU anyway, and so it’s right that they do not

wassie

https://www.boards.ie/discussion/comment/119368013#Comment_119368013

No it won't - thats why I posted it. The pricing is totally out of whack for the whole Craughwell area. The most expensive house @ €700k is asking nearly €200k (or 40%) above the highest sale price acheived in the area (€510k)

If you have €650-700k and want to be relatively close to Galway city your not going to spend it in Craughwell. Your going to look at Oranmore, Clarinbridge, Kilcolgan.

Its either pure greed (in which case expect a serious discount) or else someone got their numbers seriously wrong.

Tonesjones

https://www.boards.ie/discussion/comment/119369113#Comment_119369113

They won't pass on this one. But they might the next one and the one after that

Bass Reeves

https://www.boards.ie/discussion/comment/119369803#Comment_119369803

those are 0.3 acre sites. Normally these houses would be 6-10/acre. As well its a small development of four houses. Generally builders and auctioneers have a fair idea of what will wear price wise. There is a train station in craughwell.

Dav010

https://www.boards.ie/discussion/comment/119369803#Comment_119369803

If greed is asking the highest price someone will pay, negligence is asking below it. When you are selling your house, which would you prefer to be, greedy or negligent?

Before you answer, if you say who want the highest price you can get, people will understand, if you say you will sell for a fair price below that, I’m afraid people will think you are stupid as it less money than you can get for the largest, most important asset you will probably ever sell.

Now none of us know yet whether that pricing is realistic or stupid, the market will answer that, but you can answer which one you would accept.

ittakestwo

https://www.boards.ie/discussion/comment/119369113#Comment_119369113

Well they cant pass it on to fixed rate customers. Unless they mean they still wont change the current fixed rates for future customers.

But we are looking at 0.5% rises every 2 months untill inflation comes down. So they will eventually pass ot on.

AySeeDoubleYeh

https://www.boards.ie/discussion/comment/119370302#Comment_119370302

Dude, everyone understands the point you're making. repeating it ad infinitum isn't adding anything to the conversation.

Your hypothetical above is ridiculous anyway, as these homes are not being sold by home-owners who will then need to operate in the same market. If you (still) don't understand why people want to discuss the prices set for these properties, in the specific context of these properties, then you never will.

SummerK

https://www.boards.ie/discussion/comment/119370806#Comment_119370806

They will not pass the current hike of 0.5% as they're bunch of good people 😁 (although their rates are highest in EU combined with confusing cash back offers) but will pass on the subsequent increases.

timmyntc

https://www.boards.ie/discussion/comment/119370240#Comment_119370240

Craughwell is not on the main Dublin - Galway line so wont benefit from commuter trains into the city, instead its on the Limerick - Athenry line which has shockingly poor service. If the idea buying in Craughwell was commutting to Galway, the train is more con than pro (noisy train runs right past your back garden)

0.3 acre yet you still have neighbouring houses right on top of you, not great for 700k+

Its boomtime pricing, developer assumed they could make a mint on houses where there isnt actually much demand, similar mistake made when building ghost estates in Leitrim and the midlands. At least its only 4 units and not a whole estate

Dav010

https://www.boards.ie/discussion/comment/119371113#Comment_119371113

Posts like yours unfortunately indicate that there is still an understanding deficit, even though I have explained it many times.

It really does not matter if it is a developer, or a home owner selling the property, both look for the maximum amount that a buyer will pay. For simplicity I used the example of a homeowner, hoping to reach that part of you that would understand why you, like any developer, would want the max amount, and why that is not greed.

Again, why do you and others get so hung up on property prices? Daft research shows they mean little, a significant proportion of houses go for well above asking, some go for below. They are just an arbitrary price point that is initially unsubstantiated by the market. Raging at an advertised price, saying it is greed, that it will never be achieved is like shaking your fist at a cloud, the posters who do that either don’t understand that an advertised price is not a guarantee that the house will sell for that price, do not understand that ultimately the market sets the price not the seller (exception being where the seller sells for below market rate, few are that stupid unless it’s a cash sale) and most importantly, do not seem to understand that a house they would have absolutely no interest in, may be exactly what another buyer wants.

So, you have an opinion, I have an opinion, the market at the moment backs mine, that ad prices mean damn all.

Jonnyc135

https://www.boards.ie/discussion/comment/119371204#Comment_119371204

Just give it a rest

timmyntc

https://www.boards.ie/discussion/comment/119371204#Comment_119371204

So, you have an opinion, I have an opinion, the market at the moment backs mine, that ad prices mean damn all

How does "the market" back your opinion? In the last 5 years (maybe longer) no house in craughwell sold for more than 500k. There is 0 evidence that the market demand for 700k houses in craughwell exists.

AySeeDoubleYeh

Dave, mate, literally everyone understands what you're saying. It's not new and it's not like you came up with any of it yourself.

Dav010

https://www.boards.ie/discussion/comment/119371243#Comment_119371243

Because the developer can ask for 700k or 1.7m if he/she wants, it’s an arbitrary price point and you will have to wait and see if it actually sells for that. That is how the market works and there are enough examples of houses going for way above what some think any rational person would pay to support the fact that just because you wouldn’t pay, somebody else won’t. You could be back here in 6 months time telling us they sold for €400k and that would still prove that advertised prices mean nothing, the market set the price, and that though the developer was deluded, he still does what everyone else does and tries to get the max the market will bear for the property he/she was selling.

Is it greed to want to get the most you can for an asset? Only in your world.

jonnyc135, I know that for some posters on here, every developer/home seller/EA who advertises a property for more than the posters think it is worth is a big meany, cause they deserve to be able to buy where/when/what they want. But that just isn’t the way it works, and Boards allows for opposing opinions.

timmyntc

https://www.boards.ie/discussion/comment/119371305#Comment_119371305

A developers asking price for a new build signals approximately what they expect it to sell for - developers do not "highball" with a new build development as that is counter intuitive - they want to sell, and before they even break ground on the project will have an idea of what they want to sell for, and whether that price is actually realistiic - i.e. would someone pay this.

That the developer is listing a 700k house in craughwell is proof enough that this guy didnt do his homework. Its not greed so much as delusion. If the houses sold for 400k in 6 months time, that would prove the developer was completely out of touch as we have all been saying and you have been arguing against.

Developer built those houses on finance not cash more than likely, so they will need them to sell reasonably quickly to repay what they owe. Setting an unrealistic asking price will only drag out the selling process too, as a lack of buyers will mean they drop price, list again, drop price, list again etc until it sells. Any developer with an ounce of sense will not waste time trying to go above and beyond realistic asking price.

manniot2

Every house in barna must be touching the mill mark if those yokes in Craughwell are 700k.

Sierra Oscar

https://www.boards.ie/discussion/comment/119370009#Comment_119370009

How many rate rises do you reckon we will have? The US markets are betting that interest rate cuts will start in the US in early 2023 on the basis that economic activity is already slowing significantly.

People are predicting a significant recession, if and when that occurs then the basis for interest rate rises largely evaporates as deflationary pressure will set in and the objective of the interest rate rises will have been met. We shall see what we shall see I guess.

The scenario where we have regular interest rate rises over the next year or more is based on continued economic growth and inflation, which arguably will continue to put upward pressure on property prices.

Looking at the chorus from all the main retail banks this morning it's clear that they're using this as an opportunity to put pressure on their tracker mortgage customers to move to variable or fixed rates, something they've been trying to achieve unsuccessfully for years. None of them are passing on this round of rate rises which is pretty significant considering it's 0.5%. Plenty on here said they'd absorb a 0.25% rate rise at the very best. Yet here we are. They're also honouring their fixed rate offerings for the next few months at least.

https://www.irishtimes.com/business/financial-services/2022/07/21/irish-banks-hold-fire-on-non-tracker-mortgage-rates-after-ecb-hike/