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

Browney7

https://www.boards.ie/discussion/comment/121770990#Comment_121770990

Business post had an interesting read trying to delve into this a few weeks back actually https://www.businesspost.ie/news/colm-lauder-dublin-simply-too-expensive-as-hap-drives-rents-sky-high/

Roberto_gas

Thought of putting this here

Hi All,

Anyone have insights on the scale of this issue? This has come up in a pre purchase survey of my mate and fire safety is the main finding !

This property from a fire safety point of view requires that the corridor is constructed in 1⁄2 hour fire construction with self closing fire doors. This apartment has no protected corridors and no fire doors and is in clear breach.

What kind of work and costs are we looking here ? 

Also anyone who recently took the risk of buying a fire safety issue apartment how did it go ? Any tips/inputs from your journey?

The property is over 550k plus in value

Thanks a mill

Bass Reeves

https://www.boards.ie/discussion/comment/121786731#Comment_121786731

Unless you are a cash purchaser you will not be able to complete the purchase as a bank will not lend to you.

It's amazing the OMC are not rectifying the issue.not too many would be buying an apartment where the building is a fire risk

Roberto_gas

https://www.boards.ie/discussion/comment/121786825#Comment_121786825

Funny enough its not even mentioned by EA so assume they are chancing their luck....there are apartments on tullyvale which are relisted after fail in mortages and they still not say cash buyers only !

shoegirl

https://www.boards.ie/discussion/comment/121761785#Comment_121761785

Not so sure that's true - Zurich did have a fund some years back that was basically Hibernia & IRES, closed it when the sale happened, so recall the return being pretty good when we were forced to exit due to fund closure. Outside of that I'd agree with you though - unless you bought in 10 years ago its probably hard to assess the value.

shoegirl

https://www.boards.ie/discussion/comment/121771933#Comment_121771933

There are some people selling outside of this tho - but a lot of it would be people who are say, in a relationship, or moved and want to cash in.

Do know of people who are selling up, and pricing in a year or so of renting, who either have a lot of equity, or else have somewhere else to live (i.e. inherited a home or moved in with partner or spouse). Also some folk cutting deals with jobs to work from home so they no longer have to live in Dublin - know a few of these who had sufficient equity in their Dublin homes to get very good bigger homes down the country and come up a day a week.

shoegirl

https://www.boards.ie/discussion/comment/121763847#Comment_121763847

Very much so - you can expect a very difficult market for FTBs in particular if there is another credit crunch like the one from 2009-2014 again - this time without the falling rents & considerable vacancy levels in the PRS.

shoegirl

https://www.boards.ie/discussion/comment/121698935#Comment_121698935

Not really - there was a few thousand apartments built in my area between 1994 and 2014. Two developments had issues - one was resolved, and it really only impacted a small number build in an early phase. It got fixed, but it had the effect of creating suspicion around the rest of the development, for a while, depressing prices. But eventually the development picked up as its in a good location for commuting (last in, first out on the buses to city).

The second was a fair worse issue - another development, built around the same time by different developer - most apartments had issues, and because of when it was built they'd issues collecting cost of remediation. So unlike the other development, that didn't get fixed - so it became more run down, "cash buyer only" territory, prices got really low. Lots of the worst kind of cash buyers got in (not institutions but the kind of serial landlord who carpetbagged in the mid 00s so didn't get hit by the meltdown in 2008) who ransomed the OMCs. So some blocks in that development done and some not, their annual charges through the roofs - and those apartments look very scruffy. Others are just fine though. Ironically the best looking apartments locally are the ones built in the 90s, not the 00s. But the ones built in the 00s aside from the few hit by defects are bigger and better appointed - more insulation, larger, more parking & outdoor space etc. Some of them are enormous - there are 1 beds with 60m2 space, etc as per post 2008 and pre 2015 design standards.

shoegirl

https://www.boards.ie/discussion/comment/121700449#Comment_121700449

To be fair have also seen cases where initial ask was too high, so relisted at 20k less and eventually got a price a little over that. Its not uniform throughout the country.

Some crazy stuff though - a converted period house in Swords had a 1 bed townhouse listed a few weeks ago for 325k and went sale agreed, which seems absolutely insane to me as typically one bed apartments there go for anything from 195k to 260k for a very large space.

PommieBast

https://www.boards.ie/discussion/comment/121786847#Comment_121786847

This sort of behaviour is alarmingly common. Wait until the buyer has already burned a load of time and money on things like engineer checks and then bounce them into completing. I left Ireland because EAs seem to go out of their way to give their "profession" a bad name.

Roberto_gas

https://www.boards.ie/discussion/comment/121788589#Comment_121788589

I doubt people are that silly to spend thousands after spending a 500 bucks survey ! But i know what you mean :) !

PommieBast

https://www.boards.ie/discussion/comment/121789285#Comment_121789285

Different equation when it is half a year down the line while renting for a few grand a month. And it is not the first time round this cycle.

Roberto_gas

https://www.boards.ie/discussion/comment/121793246#Comment_121793246

understood...if there is a urgency its a good tactic have to say

Sierra Oscar

Residential Property Price Index figures for December are out. Price increases seem to be accelerating again after falling off from April 2022 - August 2023. How high will they go in 2024? Imagine the carnage if interest rates had remained at their record lows.

Key Findings Residential Property Price Index December 2023 - Central Statistics Office

The national Residential Property Price Index (RPPI) increased by 4.4% in the 12 months to December 2023, with prices in Dublin rising by 2.7% and prices outside Dublin up by 5.7%.

lordleitrim

Give taxpayer funded assistance grants to people who don't need them and watch prices go up by the same amount! Net effect: every buyer is worse off!

markodaly

https://www.boards.ie/discussion/comment/121797391#Comment_121797391

That is pretty stark.

Now imagine in the next 12-18 months interest rates start falling again.

combat14

How the First Home Scheme can help you buy your first house

https://www.rte.ie/lifestyle/living/2024/0220/1433300-how-the-first-home-scheme-can-help-you-buy-your-first-house/

hard to believe the government are propping up new property prices to the tune of 30% for new buyers

Padre_Pio

https://www.boards.ie/discussion/comment/121797981#Comment_121797981

I don't think interest rates will fall this year, maybe not even next year. Maybe the ECB will drop them if they prove inflation will remain stable, but Irish banks won't be eager to drop.

Roberto_gas

https://www.boards.ie/discussion/comment/121797981#Comment_121797981

We make a new high !

hometruths

https://www.boards.ie/discussion/comment/121798275#Comment_121798275

The First Home Scheme is the most disastrous intervention from a Dept with a history of disastrous interventions.

Property prices have rocketed thanks in no small part to the governments political interest in higher prices. Now the government has a vested financial interest in making sure property prices continue to rise as well as a political interest.

There are no good outcomes from this scheme, it's madness.

Villa05

Prices up 1.5% month over month. Biggest monthly rise in 2 years Commuter belt extending out to Longford and Leitrim with WFH

The rentals being built in Dublin are a waste of time as they are unaffordable coupled with reduction of 6k in IT workers over the last 12 months

Source CSO, Lorcan Sir

SharkMX

https://www.boards.ie/discussion/comment/121797391#Comment_121797391

Is that bubble about being the same as the 2007 peak adjusted for inflation?

Greyian

https://www.boards.ie/discussion/comment/121801942#Comment_121801942

According to the CSO CPI Calculator (https://visual.cso.ie/?body=entity/cpicalculator), €100 in December 2007 is the equivalent of €122.25 in December 2023, so if property prices had moved in sync with the CPI over the past 16 years, we'd expect the nominal price of a property to be 22.25% higher in December 2023 than in December 2007. According to the graphic in @Sierra Oscar's post #22665, property prices in 2023 were 3.9% higher than in 2007 (nominal figures). That would put property prices in 2023 15% lower than in 2007 in real terms (103.9 / 122.25 gives 84.989%).

SharkMX

https://www.boards.ie/discussion/comment/121802004#Comment_121802004

The usual Shock charts for clicks :) You cant trust anything you read in the news anymore, nor it seems from any supposedly competition organization.

Villa05

https://www.boards.ie/discussion/comment/121802004#Comment_121802004

2007 prices represented the most costly property bubble in the world ever.

Maybe not the best benchmark

SharkMX

https://www.boards.ie/discussion/comment/121802379#Comment_121802379

Its pure drama anchoring house price changes to 2007.

Only done for dramatic effect because it means nothing at all at the end of the day. Property prices rise and fall but mainly rise long term.

2007 was nearly 2 decades ago and we are no higher than prices were then.

Nearly 2 decades before 2007, say 1990 you could buy a 3 bed house in Dublin for the equivalent of €50,000. 2 decades before that less than €5,000.

Comparisons to peak or trough prices are just click bait. So is comparing the average salary now to the average salary 30 or 40 years ago, because things are different now. Couples with 2 salaries buy houses now. They didnt then. Then you have grants and stamp duty and other differences too between time periods that effect buying power.

Greyian

https://www.boards.ie/discussion/comment/121802379#Comment_121802379

I'd recommend you contact the CSO about that, as it is their graphic which is being discussed.

We had a huge bubble in 2007, but we also have only reached the same (nominal) property prices again 17 years later.

For comparison, here are a few countries comparing Q1 2000 and Q4 2007 to Q3 2023 (as per https://fred.stlouisfed.org/ because of accessibility of data)

Canada (Link)

Q1 2000 - 48.1785

Q4 2007 - 95.2009

Q3 2023 - 224.6664

Nominal Increase (2000 - 2023): 366.32%

Nominal Increase (2007 - 2023): 135.99%

Denmark (Link)

Q1 2000 - 58.5969

Q4 2007 - 115.3889

Q3 2023 - 151.2410

Nominal Increase (2000 - 2023): 158.10%

Nominal Increase (2007 - 2023): 31.07%

France (Link)

Q1 2000 - 47.8076

Q4 2007 - 102.8314

Q3 2023 - 132.5983

Nominal Increase (2000 - 2023): 177.35%

Nominal Increase (2007 - 2023): 28.9%

Germany (Link)

Q1 2000 - 101.1839

Q4 2007 - 97.3000

Q3 2023 - 173.8000

Nominal Increase (2000 - 2023): 71.76%

Nominal Increase (2007 - 2023): 78.62%

Ireland (Link)

Q1 2000 - 72.0106

Q4 2007 - 152.9123

Q3 2023 - 159.2771

Nominal Increase (2000 - 2023): 121.19%

Nominal Increase (2007 - 2023): 4.2%

Spain (Link)

Q1 2000 - 44.3366

Q4 2007 - 111.3469

Q3 2023 - 111.9860

Nominal Increase (2000 - 2023): 152.58%

Nominal Increase (2007 - 2023): 0.57%

United Kingdom (Link)

Q1 2000 - 50.5076

Q4 2007 - 111.1360

Q3 2023 - 169.5579

Nominal Increase (2000 - 2023): 235.70%

Nominal Increase (2007 - 2023): 52.5%

United States (Link)

Q1 2000 - 74.2481

Q4 2007 - 125.2371

Q3 2023 - 224.5659

Nominal Increase (2000 - 2023): 202.45%

Nominal Increase (2007 - 2023): 79.31%

In case you're wondering why I choose Q1 2000, it's because a lot of commentators would argue that the initial increase in our property prices from the early 90s to 2000/2001 were related to the increased prosperity in this country, the genuine economic growth we experienced. This would be borne out by the levelling off of property prices in 2001, before the introduction of the Euro and the easy access to cheap credit sent prices increasing again (2002 to 2007 being the bubble years for the Irish property market). This would also be supported by the trough of the crash (Q1 2013 for property prices) lining up very closely with Q1 2000 (if anything, there was an overshoot in the trough, so it's not representative of where the floor probably should have been).

It's interesting that between 2000 and 2023, the only country (from the selection) to experience lower total growth in nominal property values is Germany. Meanwhile, the only country to experience lower growth between 2007 and 2023 is Spain.

Even taking Numbeo (pinch of salt) figures, we are one of the most affordable countries in Europe to purchase property when considering price to income ratios. What we have is a shortage of accommodation (stock, not price) to purchase and a shortage of rental accommodation (both stock and price). Many people think we have an affordability crisis with purchasing property because of the limitations on what they can borrow, but increasing limits will do nothing to reduce the price of property (it would only increase it).

As a country, we have a real disconnect because of the crash in the late 2000s/early 2010s, where a lot of people just accept "Our property market is super expensive" without any critical thought, as if "because it was expensive in 2007, therefore it must be expensive now".

I think it was @DataDude in another thread who broke down how much a couple would need to earn to cover the mortgage on a €400000 property in Portlaoise (assuming they got 30% from First Home Scheme and Help to Buy). They would have a €280000 mortgage. Over 30 years @ 4% (Avant One Mortgage, 30 years at 60-70% LTV), that would have monthly repayments of €1336.76. If both members of the couple were in minimum wage, their household would take home ~ €3700/month. So the mortgage would be 36.13% of their take home pay. That hardly seems like an affordability crisis, when a minimum wage couple can cover the price on a new build house with just over 36% of their take home pay. The limiting factor for people purchasing is the number of properties available (because no matter what price properties are at, if they aren't enough for everyone, there just aren't enough) and the multiples of their income that they can borrow (as our minimum wage couple wouldn't be given a mortgage for €280000).

An Ri rua

https://www.boards.ie/discussion/comment/121803071#Comment_121803071

Thoroughly excellent post, thank you. A real public service when someone takes the time to deliver such fact and quality.

I also welcome your understanding and elucidation regarding nominal prices/purchasing power.

We had a huge bubble in 2007, but we also have only reached the same (nominal) property prices again 17 years later.

Your macro picture and awareness of timings (pre 2001, post 2002) is correct and excellent.

hometruths

https://www.boards.ie/discussion/comment/121803071#Comment_121803071

Fascinating figures on the comparitive rises from 2000 to 2023, thanks for posting.

Re whether or not 400k house for €1336.76 monthly constitutes an affordability crisis, it's only affordable because state is picking up the tab for 120k of the 400k.

If there was no affordability problem, the state wouldn't be offering to buy 30% of the house for you.

timmyntc

https://www.boards.ie/discussion/comment/121805058#Comment_121805058

What are the repayments owed for first home scheme or shared equity etc schemes?

No such thing as a free lunch, everything costs something