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

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/

Ozark707

https://www.boards.ie/discussion/comment/119371456#Comment_119371456

I don't think anyone is seriously factoring in continued economic growth in the US in the short to medium term. I agree that a recession will temper inflation somewhat. Will it be enough to stop the Fed from keeping rates (relatively) high or increasing is the interesting question for me.

Jonnyc135

https://www.boards.ie/discussion/comment/119371456#Comment_119371456

I would not leave tracker if I was on one, they will be lowering rates and big surge of QE by latest end 2023. I just think this constant central bank action has diminished a real free market. I think this system is broken

combat14

Taxpayers may have to foot bill of €2.8bn for defective Celtic Tiger apartments

https://m.independent.ie/irish-news/taxpayers-may-have-to-foot-bill-of-28bn-for-defective-celtic-tiger-apartments-41859281.html

between pyrite, mica and now 100,000 shite apartments not sure how anyone would be rushing to pay for over priced poorly constructed properties here with a flurry of interest rate rises now clearly on the cards..

drogon.

https://www.boards.ie/discussion/comment/119371456#Comment_119371456

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.

I guess to you your point, how long do you expect ECB to have negative or 0% interest rates ? Basically the last 8/9 years, it was cheaper to borrow money than to save money. This is not tenable and I think ECB should be look at a minimum of 1.5~2% interest rates by end of next year.

Easy credit has just distorted the market completely, sure it will cause panic in the economy but this is needed in my opinion. I still remember the interest rates were above 15% and you got decent returns on savings.

Also the reason we have the highest interest rate in Europe is cause there are over 5k people not paying their mortgages for over 10 years and yet living in their house rent free without paying a penny. Hence everyone has to contribute to their life style.

HartsHat

https://www.boards.ie/discussion/comment/119371575#Comment_119371575

There is no such thing as a real free market except in some economics 101 course.

Timing belt

https://www.boards.ie/discussion/comment/119371456#Comment_119371456

NTMA prediction is GNI -0.8% for the year

Timing belt

https://www.boards.ie/discussion/comment/119371456#Comment_119371456

The banks are saving 50bps on their excess deposits that they have with the ECB and are getting a greater yield on gov bonds so are able to absorb the rate hike on lending and not pass on. We should see deposit rates increase by 50bps but we won’t as banks will probably only pass on 25bps and pocket the rest as they will do for every future rate hike. They are laughing all the way to the bank and delighted with rates going up as they will finally make money and be able to invest in new systems or pay bigger dividends. Which will attract institutional investors. A recession won’t hurt them no where near as much as negative rates has for the past few years.

They are probably able to maintain fixed rates for a bit as probably done a few large clips of fixed rate funding when rates were low/negative which they haven’t filled yet. They were able to do it as their was little risk of rates going lower at the time.

wassie

I'd like to say the penny has dropped regarding HTB but I think not.

Yet another review of the scheme has be undertaken by external consultants (for a decent fee no doubt) to tell the Govt the HTB is supporting high prices.

https://www.independent.ie/business/personal-finance/property-mortgages/fewer-first-time-buyers-will-be-able-to-use-help-to-buy-under-new-government-plans-41864345.html

Senior government sources said previous reviews of Help to Buy, which was first introduced in 2016, showed its main issue is that it is not targeted.

But they did not act on that previous advice at the time and now, low and behold we have another review saying it is poorly targeted.

The scheme championed by the Government found that a third of recipients didn’t even need it to make up their deposit and instead, it “fuelled property inflation”.

We have seen posters on Boards claiming there are many borrowers on 6 figure salaries with 6 figure deposits wanting to avail of HTB buy because it 'saves' their deposits. I do not blame these people either - if the Govt is giving away free money why wouldnt you talke advantage of it.

The report said the scheme is “poorly targeted” towards helping first-time buyers make up their deposit, as the vast majority of them already have a deposit and instead use the support to buy a more expensive house.

“Increasing purchasing power for households, while housing supply is constrained, will very likely lead to higher house prices,” it said.

No doubt there will be the usual stream of lobbyists going through the doors of Govt to push to keep the status quo for the 'HELP TO SAVE BUY' scheme.....

Villa05

https://www.boards.ie/discussion/comment/119383652#Comment_119383652

Another expensive review, when leaving cert economics would tell you that demand side policies in a supply constrained market drives up price.

Housing market has become a white collar cash cow, rather than letting the blue collars get on with it and build/renovate houses

Villa05

Potential solutions from the USA whose market appears to be a mirror on our own

https://www.nytimes.com/2022/07/23/business/housing-market-crisis-supply.html

Villa05

Wfh and sky high rents sending work abroad

https://www.irishtimes.com/business/2022/07/20/housing-shortage-in-capital-driving-employment-abroad-warning/

The accommodation shortage in the capital coupled with remote working trends are “driving employment abroad”, Dublin Chamber has warned.........

An increase in the zoned land tax, where unused land zoned and serviced for housing is taxed, and the introduction of a vacant property tax could boost the provision of housing, the chamber said.

Meanwhile 50 to 80k sites lye idle

https://www.businesspost.ie/news-focus/best-laid-plans-how-developers-are-letting-sleeping-sites-lie/

Also noticing that the current economic environment appears to be flushing out homes that have been empty for decades onto the market. I'm talking about prime sites in high demand areas, anyone else seeing this in their areas

amacca

https://www.boards.ie/discussion/comment/119383881#Comment_119383881

I've seen some interesting properties come up near me but didn't realise this may be a more widespread trend

Some church lands in good areas and old houses on own grounds/large sites etc

Bass Reeves

https://www.boards.ie/discussion/comment/119383826#Comment_119383826

What solutions?. Builders stopping building. Building smaller houses. One thing it is showing is what a few of us are saying that if builders are losing money they will stop building.

https://www.boards.ie/discussion/comment/119383881#Comment_119383881

We are probably building the maximum amount of houses and apartments that we can at present. Labour is the main constraint. Commercial buildings have slowed and labour has moved to residential building.

It's not sites it workers is the constraint

markodaly

Covid cash seems to have dried up, leading to less money being available to purchase houses.

https://www.thejournal.ie/housing-mortgages-5825390-Jul2022/

Will this see a drop in prices? Hard to know, but possibly a little.

Villa05

https://www.boards.ie/discussion/comment/119387806#Comment_119387806

It's unlike you but you seem to have managed to get builders downing tools and not enough builders available into the same post.

The solution is in the middle of your 2 points

combat14

https://www.boards.ie/discussion/comment/119388973#Comment_119388973

"The report found that house hunters have an average of €304,000 to spend on a home, which is €27,000 (9%) less than it was a year ago.

Additionally, mortgage seekers have €11,000 (15%) less savings to put towards a deposit for a mortgage compared to the same time last year."

Surely the reduced amount to go towards the 10% deposit will have the biggest initial impact

e.g. rough numbers 30k deposit for 300k house vs reduced savings for deposit (less 11k on last year) 19k towards 190k house ..

this will have to a big impact on effective demand for property here and really shows cost of living increases without corresponding real pay increases from employers will soon have a major knock on effect ..

europe is also staring a major recession in the face with russian gas supplies down to 20% of capacity germany in particular but all of europe essentially is particularly vulnerable to economic shocks over the next 6 months or more..

Bass Reeves

https://www.boards.ie/discussion/comment/119389365#Comment_119389365

You posted a link to a projected US building slow down where US developers were slowing out down due to a people being unable to afford the houses because of rising interest rates

I made the point that this would only exasperate the present issue in Ireland of w stopped building due to builders stopping building if there is no margin for them.

You also posed a link to an article that was highlighting sites not being build on. I mearly point out that at present building labour is the most limiting issue in the production of houses. It will take a lot of ducks in a row to get beyond 30 k units per year and I am not sure if we will hit that.

There is no magic bullet to getting extra supply. I do not see a huge untapped supply of building workers around.

It's a matter of maximising the number of units build for the foreseeable future.

Jonnyc135

https://www.boards.ie/discussion/comment/119389455#Comment_119389455

There's a "Willie Big Bang" coming

drogon.

https://www.boards.ie/discussion/comment/119389459#Comment_119389459

Honestly I say lets stop incentivising builders to build, by giving them tax breaks and public land at discounted prices only for them to turn around and still whinge that they can't make enough money.

I think there is a fundamental issue if an average citizen can't afford to buy, it tells that the market is being manipulated to keep prices high by foreign funds and MNC. I am okay living in a country where we aren't constantly trying to attract global corporations to setup shop here, while the average person get screwed left and right.

MacronvFrugals

Theres a poster on here who has tracked the myhome.ie price changes on a graph, any chance they could cost the latest version?