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

timmyntc

https://www.boards.ie/discussion/comment/117699645#Comment_117699645

How much of that will be held by would-be homebuyers though?

Typically the highest earning households are those who already have a home - so theres no guarantee that all those savings will be going towards more houses. Certainly some will, such as savings owned by FTBers, but I'd say 1/2 easily of that savings increase would have went to existing homeowners.

Timing belt

https://www.boards.ie/discussion/comment/117698390#Comment_117698390

Who knows what will happen...

• The Economic recovery that everyone is banking on may never materialize and we could see even more QE being undertaken in an effort to stimulate the economy and in the process lead to more investors competing for property driving prices higher.
• The new houses that will come online may be priced higher due to an increase in building costs and may be snapped up by investors.

The UK Market has cooled down due to the withdrawal of the stamp duty breaks but is still 10%+ higher than a year ago.

The higher prices goes the less affordable housing becomes for first time buyers who are eventually locked out of buying and forced to rent which in turn provides a long term income opportunity for investors. For this reason alone I don't see a drop in house prices in the short term.

Amadan Dubh

https://www.boards.ie/discussion/comment/117699645#Comment_117699645

Deposits can only get people so far with mortgages; being restricted to 3.5/4.5 times borrowing is where the affordability ceiling is met (as it appeared to be met pre-covid with 2019 data). An extra €5-10k in the bank account for a couple to go to their deposit probably got obliterated by the house prices increasing during 2020 and 2021. I'm responding to the article which outlines that in the US the covid frenzy may have past its peak and applying it to Ireland noting the level of savings is no longer increasing anywhere near what it was during lockdown, which to me could indicate we are again seeing the mortgage lending restrictions taking hold, with the number of buyers with deposits having peaked as well.

Amadan Dubh

The kite-flying has started for the Housing For All strategy, with this story in the IT yesterday. Given the total failure of the private sector to deliver sufficient housing to meet with demand, this is likely to be the first of several policies outlined in the Housing For All strategy for the State to take more of an involvement directly in the provision of housing. This is something which has been advocated for and is supported by SF, so I wonder if the best way to beat SF is to in fact just plagiarise their housing policy?

https://www.irishtimes.com/news/ireland/irish-news/state-to-take-half-of-increased-value-of-land-rezoned-for-housing-1.4636538

State to take half of increased value of land rezoned for housing

The Government is to compel property owners and developers to pay the State up to half of the increase in the value of land when it is rezoned for housing under radical moves to rein in speculation and cool the market.

The far-reaching measures from Minister for Housing Darragh O’Brien, to be unveiled within weeks, are part of a renewed effort to settle the housing crisis that is the Government’s top priority after the coronavirus pandemic.

The aim is to ensure the State makes a gain from the significant increase in the value of private land that arises from zoning and investment decisions by public authorities. Similar measures were proposed as far back as the early 1970s in the Kenny report, a landmark document on controlling property prices, but were never advanced.

“It is a transformative move,” said a senior Government source. “It means that private benefit will be shared with the State to pay for public goods such as infrastructure and social and affordable housing.”

This will curb constitutional property rights, an area that has perplexed policymakers for many years, but officials believe it can survive legal challenge.

“The preliminary legal advice from the Attorney General is that is constitutionally sound once it’s properly devised in underpinning legislation,” the source said.

Timing belt

https://www.boards.ie/discussion/comment/117699854#Comment_117699854

I never claimed that the savings were held by would-be homebuyers I was just pointing out that there is still a significant amount of savings compared to pre-covid and that although the rate of savings has slowed somewhat it is is still nearly double what it was pre-covid.

Timing belt

https://www.boards.ie/discussion/comment/117699944#Comment_117699944

We will see in time whether the US housing market is past it's peak or not. I think what you are seeing there at the moment is that builders are not building because they can't guarantee that they will be able to sell at a profit. If this is the case then it will lead to a shortage in supply similar to what happened in Ireland which will keep houses prices elevated and drive people into the rental market which in turn will see investors buying the properties.

Personally I think a lot of FTB managed to save a lot more that 5k-10k during the year as a lot of them moved back in with parents thanks to being able to work from home and didn't have rent to pay. The saving on Rent alone would equate to 22-25k and that is before any additional savings such as transport, lunches etc... Childcare would be another 12k or more and If I was to guess I would say that many couples managed to save 40-50k during the past year. Obviously not every couple would have benefited to the this extend but I think that there are enough people out there and this combined with a lack of supply means that their are still buyers out their to sustain the prices.

If you take into account parents being able to save during the period and the lack of return that they would get in a bank or any investment means that they are far more likely to be able to help out. This also contributes and means that the LTI limits become less irrelevant to the lucky few who are in such a position.

Marius34

https://www.boards.ie/discussion/comment/117698741#Comment_117698741

Ok, I think i know where is the problem. It's due to comparing deposits of 2020 vs 2018/2019 saving. Those are not the same thing.

As from Timing belt shared graph, we can see Covid deposit growth is over twice higher than pre-Covid.

Jmc25

https://www.boards.ie/discussion/comment/117699936#Comment_117699936

Investors definitely are playing a part but I think the fundamentals of the market are driven by owner occupiers. Obviously at the moment owner occupiers are competing with investors and prices are being driven higher. But I think when owner occupiers reach their affordability limit, it won't be a case that more and more investors will come in to replace them and keep driving prices.

There's been much discussion about investment funds here and obviously they're playing a part, but they can't sustain these price increases alone. I think FTBs/owner occupiers are the most important factor when it comes to house prices.

New build apartments though - that literally seems to be a market of funds competing against each other with almost zero FTB involvement.

Amadan Dubh

https://www.boards.ie/discussion/comment/117700303#Comment_117700303

I'm confused by my own links, so apologies. Cash deposits for households with banks did or did not increase substantially more from 2019 to 2020 compared to 2018 to 2019?

Marius34

https://www.boards.ie/discussion/comment/117700718#Comment_117700718

It increased substantially. From what I see it's around ~14.5 Billion in 2020, whereas the increase in 2019 was ~6.5B, and ~4.5B in 2018

Timmyr

https://www.boards.ie/discussion/comment/117699133#Comment_117699133

About time, its a joke here in NZ

I bought a house in June and the same house would now cost at least $100k extra

Amadan Dubh

https://www.boards.ie/discussion/comment/117701017#Comment_117701017

Ah okay, which then puts the June 2021 figure more in line with 2018/2019 once again (453m X 12 months). That obviously would make sense since things reopened.

Amadan Dubh

Fierce quiet these days in this thread.

Here is an update on the proposed alternative to the SHD set out in the Land Development Agency Bill, which was approved in July and takes power to remove "the so-called reserve function of councillors to have a veto or control over the disposal of local authority lands", which of course has irked the anti-progress politicians like Senator Victor Boyhan who, in what appears to be a total and complete lack of awareness of our local government system, made the following comments as part of his objection to the LDAB;

"the system has served the country and local councils well” and that councillors had "huge knowledge".

https://www.irishtimes.com/news/ireland/irish-news/minister-seeks-to-bypass-pre-legislative-scrutiny-on-draft-planning-laws-1.4638202?mode=amp

Minister for Housing Darragh O’Brien wants to bypass a key phase of parliamentary debate on draft planning laws to replace contentious fast-track planning laws.

His request for a waiver from pre-legislative scrutiny has met resistance within the Oireachtas housing committee, with members concerned about the effect the new laws to replace strategic housing developments (SHD) will have.

Mr O’Brien received Cabinet approval in July for large-scale residential development (LSRD) planning arrangements that will take the place of fast-track strategic housing development laws.

The strategic housing legislation has been heavily criticised for cutting local authorities out of the planning process for estates and apartment blocks with more than 100 units by allowing developers to seek consent directly from An Bord Pleanála. There was no third-party appeal mechanism at local level but many projects were challenged via judicial review in the High Court, often successfully.

In the LSRD proposal, the initial application would go the local authority with the possibility of an appeal later to An Bord Pleanála.

Pre-application consultations with planners would take eight weeks and planners would be required to decide on an application within eight weeks. There would be a 16-week deadline to determine appeals.

Timing belt

"Fierce quiet these days in this thread."

yeah Boards.ie really messed up with this upgrade....

timmyntc

The very existence of fast-track planning is a policy failure in itself.

The planning process should be sufficiently well-resourced and fast to not need a fast-track lane. Especially so if the fast-tracked projects are to be large scale - as large scale developments are the ones needing the most scrutiny.

There are very real planning failures in this country that need fixed - but things like SHD and going straight to ABP is like paying for the express lane in disneyland - it gives an advantage to those with deep pockets, but also will run out of capacity. What then - a super SHD for the largest developments whereby they get an even faster expedited process?

Amadan Dubh

What have Ireland, Hong Kong, Singapore, Qatar, UAE and Kuwait got in common?

 

The cost of rent for Irish people as a percentage of their total monthly outgoings is the sixth highest in the world, according to a study by Money.co.uk.

Tenants in the Republic spend 37.2 per cent of their monthly outgoings on rent, a proportion that is higher only in Hong Kong, Singapore, Qatar, UAE and Kuwait, Money.co.uk said.

Its finding is based on statistics from cost of living database Numbeo and compares the average cost of rent for a three-bedroom property in more than 50 developed nations in the world as well as other costs of living for a family of four.

https://www.irishtimes.com/business/economy/irish-tenants-share-of-outgoings-on-rent-is-sixth-highest-in-world-study-1.4638702

There is a reason our quality of living and competitiveness for companies to establish and expand in is directly linked to the housing crisis and the only way out is material decreases in the cost of housing and substantial increase in supply of appropriate housing. This money.co.uk study won't of course come as a surprise that our cost of living is extremely poor value for workers but this is the kind of study that gets picked up internationally so it is not good to see.

fine_12345

https://www.boards.ie/discussion/comment/117690159#Comment_117690159

There is a report from 2019 from the department of finance “Risk Weighted Assets in Ireland - The Link to Mortgage Interest Rates” that outlines RWAs as the main reason our interest rates are higher, the main reason return in equity is lower, and the main reason competition is decreasing.

The reason RWAs are high here (from the report) is relatively prudent regulation that secures against another financial crash.

I don’t think I ever said interest rates aren’t effected by repossession. I said I haven’t seen any evidence that changing those laws would actually lower interest rate (as interest rates are more complicated than one thing). So you get rid of something that may protect you if you are unfortunate enough to get into financial difficulty and then interest rates don’t go down for some other reason anyway. It’s weird to accuse someone of being blinded by ideology when you don’t present any data to support your own position.

The level of critical thinking here lads is embarrassing. I didn’t know I was walking into the blame all the bad things on some minority circlejerk.

timmyntc

https://www.boards.ie/discussion/comment/117705691#Comment_117705691

Do you know what that "prudent regulation" entails?

That prudent regulation is exactly why mortgage arrears have such a big impact on bank profitability. If we had a timely repossessions program, then the banking regulations to prevent default would not hamstring Irish banks so much.

fine_12345

https://www.boards.ie/discussion/comment/117705709#Comment_117705709

It’s in the report. They are required to hold a much higher percentage of capital against every loan, than prior to 2007, to prevent insolvency in case of a financial crash or downturn.

The risk itself is based on total predicted loss, loss given default as a factor (ability to repossess). But it’s also a factor of how much a percentage security is decided to be sufficient to prevent insolvency of the bank. For instance banks hold as much as four to five times 2007 amounts, which makes them safer today.

There are more factors to a repossession than just throwing someone out on the street and being able to recover the loss. And these are also calculated in the risk. For example it’s less of a loss to have a default for a home in arrears for the last 3 years of a 35 year mortgage, than one 3 years into a 35 year. It’s a complicated topic, with many factors, and screwing over the little guys by removing laws that are designed to protect the little guys demand some serious scrutiny.

Timing belt

https://www.boards.ie/discussion/comment/117705691#Comment_117705691

You do know that when mortgages are in arrears the they attract higher RWA's and in turn the bank need to hold more capital and this is why they are willing to sell the bad book at such discounts just to get it off there balance sheet. If the banks were able to repossess properties in a timely manner like most other countries this additional cost would be avoided and the Cost of Capital attributed to Loans/Mortgages would be lower leading to lower interest rates.

The only other thing to mention is the regulation on RWA's is consistent with other EU Countries as it is all mandated by a EU Directive (CRD IV)

fine_12345

https://www.boards.ie/discussion/comment/117705859#Comment_117705859

My point was RWAs are higher as a result of stricter regulations than pre-2007, which is a factor that affects mortgage interest rates and they are not solely relatively higher by just the inability to swiftly repossess every home. RWAs themselves are based on the risk of non-preforming loans. I am not denying that. Banks also must decide a figure for how much capital they secure based on that probability and that figure is a higher percentage than was used before we had the global financial crisis. The point is there are other factors that affect the interest rate. Repossession is a factor, another is how much exposer you have to a non-performing loan (e.g. what part of the lifetime it’s at). We are also living with a legacy of the 2007 crash still that dictates RWAs that will arguably be less an issue as each year passes, and because of our current higher RWAs, a future crash may be softer.

Some of you are quite eager to be right on this and for me to be completely wrong that the debate keeps shifting from where I started, tryna make me defend the idea that eviction laws have zero impact on interest rates, or how would I feel if someone decided not to pay me back on a loan. Where I started was roughly:

1. Making repossession easier does not conclusively mean lower interest rates. I was even willing to concede this if provided some solid evidence.
2. Making repossession easier has other significant costs to people affected and to taxpayers etc. that people don’t seem to want to acknowledge or care about.

Timing belt

https://www.boards.ie/discussion/comment/117706035#Comment_117706035

OK so please explain why Ireland has higher Mortgage rates than other EU Countries.

yer man!

https://www.boards.ie/discussion/comment/117703357#Comment_117703357

So is there any substantial threat to this not going ahead as per the bill that was approved? Could it be taken out at this point if the pressure is applied? Or is this all just a huff and puff from the councilors that are worried about losing some power?

I wish at this point they would just declare an emergency and go scorched earth on the process.

cruizer101

@fine_12345 No one is suggesting we should evict people after missing one payment. But there are people out there who havn't paid a cent in years and the banks still can't repossess, that is wrong.

Most people would agree there should be some leniency, there is a question on where exactly we draw the lines but at least if there were better more clearly defined rules that allowed banks to repossess easier it would result in them not having to have as much capital which should lead to a reduction in interest rates.

Do you agree with someone who hasn't paid a cent in 6 years still being able to live in their house and the bank losing money which they have to regain elsewhere?

Do you not think that when you sign an agreement with a bank for a mortgage that their is a responsibility on you to hold up your side of the deal?

Timing belt

https://www.boards.ie/discussion/comment/117709016#Comment_117709016

There are over 15k Mortgages in arears for more than 5 years according to the Central bank data which accounts for 30% of all arears.... And included in this are 5,400 mortgages in arears for more than 10 years.

As Cruizer said nobody is looking for repossession for someone that missed a few payments due to coming on hard times but to be in a house for 10+ years and refuse to pay and not expect to be evicted is a joke....

mcsean2163

https://www.boards.ie/discussion/comment/117709500#Comment_117709500

I suppose the problem at the moment is that if the property is their principal residence they can't be evicted into state housing only homelessness. That's the disgrace to me

IAmTheReign

https://www.boards.ie/discussion/comment/117706035#Comment_117706035

I'm not sure how you expect anyone to provide evidence that easier repossessions conclusively means lower interest rates. Most countries do not make repossession of a property difficult to begin with. Ireland is an outlier in terms of how few properties get repossessed.

https://www.irishexaminer.com/business/arid-30912414.html

We do have real world evidence that the lack of an effective repossession process will lead to higher interest rates though.

KBC, who were the cheapest mortgage provider in the market, are pulling out due to issues with profitability. The reason they can't make money is due to the high percentage of non performing loans on their books. They currently hold 10.3 billion in outstanding mortgages. 1.4 billion, or, 13.5% of their outstanding funds are non performing. Their performing loans will be sold to BofI, who have significantly higher mortgage rates. This is real world evidence that people who were paying their mortgage will have to pay higher interest rates to cover those not paying.

fine_12345

https://www.boards.ie/discussion/comment/117706096#Comment_117706096

It’s several factors. Being able to swiftly repossess any house in arrears is not the only significant one, as far as I understand it.

I tried to give a few examples in my last few posts. Take another example; we know 15k+ mortgages are in arrears over 5 years. But that alone doesn’t prove not being able to reprocess every one of these is a loss for the bank. We haven’t looked at how mature those mortgages were, how many of them have already paid for more than the principal loan amount by the time the fell into arrears, etc.?

Is it fair to ask the hypothetical question if you had more than paid of the cost of your loan, had further paid 10-20% deposit, and then fell into arrears in the latter half of your mortgage, is it fair the bank easily repossesses your home?

Timing belt

https://www.boards.ie/discussion/comment/117714018#Comment_117714018

Is it fair to ask the hypothetical question if you had more than paid of the cost of your loan, had further paid 10-20% deposit, and then fell into arrears in the latter half of your mortgage, is it fair the bank easily repossesses your home?

Yes it is 100% fair as the bank will not just repossess without exploring other avenues first such as "Payment Breaks", "Interest Only Repayments", "Restructuring the Debt".

"I tried to give a few examples in my last few posts. Take another example; we know 15k+ mortgages are in arrears over 5 years. But that alone doesn’t prove not being able to reprocess every one of these is a loss for the bank.

I don't follow your logic here... If the mortgage is in arrears and not being paid it is a loss to the bank simple as.... If you are suggesting that the bank has received enough money to cover the principle lent and therefore is no longer at a loss then this is flawed logic as there are costs associated with the mortgage that the bank would need to recover... E.g. The bank still needs to pay for the cost of funds lent out regardless of whether this cost of funds is sourced from the customer deposits or from the wholesale markets.

We haven’t looked at how mature those mortgages were, how many of them have already paid for more than the principal loan amount by the time the fell into arrears, etc.?"

As with 99% of lending the Repayments that are made in the latter years of the loan are predominately related to the principal loan amount.

Lets also be clear no-one is saying that the lack of repossession is the only reason for higher mortgage rates but it is the most significant factor. And ever since the "Dunne Judgement" borrowers defaulted more on their mortgages because they were no longer afraid that their property would be repossessed.

bonkers

Ok so, leaving the usual no one has a clue where it's going

I'd feel that in the market I'm looking Dublin 9,11,3,5 that things are approx 70k overpriced (in the 500k area) since the start of the year. Do you think that its worth continuing to rent for a year(cost circa 20k) with a hope things go a bit back to normal (late 2020 figs). I know the old adage of if you find a good house go for it goes without saying, just want to get anyone and everyones take.

Amadan Dubh

Two hotels are due to open in the coming months on Camden St and George's St, a Premier Inn and a Wetherspoons. These properties replace derelict buildings so it's quite a boost for the area. That being said, they'll likely not see a whole lot of business until 2022.

The Wetherspoon's is quite nice, from the photos.

https://www.premierinn.com/gb/en/hotels/republic-of-ireland/dublin/dublin/dublin-city-centre-south-great-georges-st.html

https://www.jdwetherspoon.com/pubs/all-pubs/republic-of-ireland/county-dublin/keavans-port

Timing belt

https://www.boards.ie/discussion/comment/117714469#Comment_117714469

There is not guarantee that prices will return to late 2020 figs.

If you look at the assumptions that the banks have used in their half year financial reports you can see where they think property prices are going. Obviously you are looking at a specific market but if a 500k Property was to fall to 430k it would represent a 14% fall in value and this is greater that even the most pessimistic view by the banks (AIB) and even at that they have attributed a 5% weighting as they think this is a remote possibility.

AIB (Source: aib-group-plc-half-yearly-financial-report-2021.pdf Pages 37-40)

Bank of Ireland (Source: HoldCo-Interim-Report-2021-Web.pdf (bankofireland.com) Page 51)

I don't think anyone on here will give you advice on whether to buy or to rent for another year as it really is a personal decision based on what you think will happen to the property market.

Ray Palmer

https://www.boards.ie/discussion/comment/117714469#Comment_117714469

Got to love the statements like this where somebody claims a value of being overpriced but no logic to it. Why do feel this way? What calculations have you done to come to such a conclusion? Demand and supply drives prices not feelings.

timmyntc

https://www.boards.ie/discussion/comment/117714746#Comment_117714746

I guess it depends on affordability - if houses are priced above affordability for high earning couples then you have to think that maybe something else is inflating the prices, and the house (relative to a normal market) is overpriced.

Funds using property as a store of wealth is not 'normal' in the market, and is exacerbated by current record-low interest rates. So in that respect, yes, property can be overpriced.

Marius34

https://www.boards.ie/discussion/comment/117714832#Comment_117714832

Product can be not affordable, but yet this doesn't tell if it's overpriced. Not affordable and Overpriced is not the same thing.

fine_12345

https://www.boards.ie/discussion/comment/117714420#Comment_117714420

I don’t disagree with most of the points.

Except the last part where you claim lack of repossession is the most significant factor. I’ll agree to disagree, and sure I might be a fool. 🙂

Also, I not sure I agree more people are defaulting cause the “Dunne Judgement”, or at least the precedence it set. Sure maybe, but it’d be difficult to prove. You’d have to establish a significant amount of people defaulting did so because they were confident they wouldn’t lose their home and didn’t care about any other repercussions.

Timing belt

https://www.boards.ie/discussion/comment/117715085#Comment_117715085

According to a research paper published by the central bank in 2018 there is evidence of higher default rates after the Dunne case

"The results are similar to those obtained via asymptotic inference, and indicate statistically higher default rates in the treatment group only after the time point of the Dunne judgment"

Source: 1rt18-the-impact-of-repossession-risk-on-mortgage-default-(o'malley).pdf (centralbank.ie) (Page 2)

timmyntc

https://www.boards.ie/discussion/comment/117715073#Comment_117715073

They aren't the same thing - but if the asset (a home) is unaffordable to the vast majority of the intended buyers, it signals something wrong in the market and that the asset may be overpriced.

In this case, state interference (AHBs and councils buying) and private investors buying are both pushing prices up - this is neither normal or sustainable. Should interest rates go up, pension funds etc will not buy as much Irish property seeking rental yields, and should the state start building social homes again (which they will) councils will stop buying private property.

Just as stocks can be overpriced, so too can assets like property.

Timing belt

https://www.boards.ie/discussion/comment/117715527#Comment_117715527

You are right in saying property can be overpriced but unfortunately this is not just an Irish Phenomenon and as property prices become unaffordable for the general public the investors that are pushing up prices see an increase in demand for rental of their investment properties as people that are unable to afford a property are pushed into the rental Market. As long as their is strong demand for rental properties we will see investors buying more and more property as it is a viscous circle.

Marius34

https://www.boards.ie/discussion/comment/117715527#Comment_117715527

When we speak about overpriced stocks, in most cases we have specific measures as earning, in this case P/E. Many stocks like Tesla are seen overpriced 5 times and more.

Whereas there is no measure to tell if property prices are overpriced. The closest probably may be property price to rent ratio.

Timing belt

https://www.boards.ie/discussion/comment/117715927#Comment_117715927

You can use a P/E ratio as an indictor if a share price is overvalued in relation to current earnings but that doesn't mean that the share price is overvalued as many companies that have low earnings at the moment but potential for increased earnings in the future will have a high P/E Ratio but that is not to say that they are overvalued.

When you are unable to borrow to fund the pricing of a house due to macro prudential rules (3.5 x LTI) then this tells you that property prices are overvalued in relation to income but you can't assume that this overvaluation will lead to a correction as it does not take into account items like savings, wealth, Impact of investments or government on property prices.

Ray Palmer

https://www.boards.ie/discussion/comment/117714832#Comment_117714832

The point is how can somebody put a number randomly to say how much they are "overpriced" by. Price is always determined by how much somebody is willing to pay. I think Rolex watches are tacky looking and put little value on them but people pay a lot for them. As I will not buying one my opinion on value is mute. Everybody buying a house wants more than they can afford and has to compromise.

People really have to understand their desires do not determine price and things they think have to change don't have to change as they want. Houses being split up is the most likely outcome going forward not reduced prices in the long term. There are already about 10% of the houses on my road are now 2 households for families it is inevitable this will continue as home size reduces and car costs go up. The generations coming are going to have very different lifestyles and there will no longer be the "normal" people expect. Very little has stayed the same since I was child and nobody predicted most of it. As a child in the 80s the idea I would work with Russians on computers wasn't even vaguely an idea

timmyntc

https://www.boards.ie/discussion/comment/117716385#Comment_117716385

I take your point with numbers - nobody can really say what the "true" price of a house is to any degree of accuracy, but you can make general statements when it goes way beyond affordability for the target market.

If somebody decided to buy up all the baby clothes in the world - despite not being the intended market - the price would rise far beyond families who need them. Then you could say it's "overpriced" in relation to the target market.

The target market for homes is by and large owner-occupiers - yet these people are priced out. That implies overpriced/affordability issue. The exact degree of "overpricing" is impossible to say, but once it goes beyond max affordability it is overpriced for sure.

Marius34

https://www.boards.ie/discussion/comment/117716240#Comment_117716240

I see P/E as the most common metric used to evaluate if the stocks are overvalued. I personal would not call any stocks overvalued if it's listed on open market, as that means it's regulated by market price. Overvalued is very subjective term, depending of which metrics we use our results would be very different.

In the same way in regards to property price, I don't see how 3.5 LTI determines what is overvalued. It may make more sense to say not affordable for ordinary people, but if there are buyers I would not call it overvalued. But again it's more of subjective term, that there would not be agreement on what is overvalued. Overvalued to me is something that there are no buyer for the price on the market.

Amadan Dubh

https://www.boards.ie/discussion/comment/117715665#Comment_117715665

I agree with all this but one dark cloud on the horizon (or silver lining depending on your position) is that demand for property in Ireland is predicted to stay strong due to the massive population growth expected over the coming decades. A lot of this growth is based on immigration as opposed to increases to the birth rate. Putting aside the "everything bubble" and assuming that it does not pop, our population numbers go up but it is not a guarantee that this demand will equal sustained pricing in the housing market.

There needs to be a good reason to come to Ireland for this demand to be sustained and one thing myself I see as a possible error in the calculation of sustained demand due to immigration is the quality of the immigration in terms of their own personal situation and how that might feed into demand for housing at the costs it is in Ireland. For example, central or south American students/low paid essential workers as well as Indians filling low paid tech jobs will feed into demand for property but at the current cost of housing there is little to no chance that the current prices would even be met by this type of immigrant to Ireland. The other point is just that, should the increased immigration not materialise anywhere near to the extent it is predicted to grow, then there will be a fairly steady flow of downward prices across the market as the tide of buyers/renters who can afford these elevated costs goes out.

Autorotator

Can any one tell me how estate agents calculate the sqm of a house. Looking at a new build, the plans submitted for planning permission show 106sqm at best but on the marketing material provided by the estate agent its advertising them at 113 sqm . Are they including the patio in that?

cruizer101

Internal vs external maybe, could easily have 20m of walls perimeter at 0.3m thick, 2 floors that is 12m2.

Might be best to just ask them.

markjbloggs

Just a quick question : why would a property display a real estate agents "For Sale" sign but not be advertised on that agents website or on Daft/Myhome? Sign went up a week ago but still no indication of asking price. I called the agent, who was very evasive and would not indicate the asking price, suggesting the sign guy "jumped the gun" ! The house is in flats and the tenants have had notice to leave but there is no indication that it will remain in flats or refurbed as a family home.

Is there something underhand going on with this house?

WhiteWalls

https://www.rte.ie/news/2021/0809/1239939-daft-report-rent/

The latest doom and gloom

Amadan Dubh

https://www.boards.ie/discussion/comment/117732203#Comment_117732203

Grim reading and really we can't get enough red flags on the social, political and economic instability that will emerge the longer rents and house prices do not materially decrease.