Softening house market?

Padre_Pio · 15-09-2022 10:47am

https://www.boards.ie/discussion/comment/119620928#Comment_119620928

We've already had builders complaining they can't make a profit with increases in material and labour costs. Now I don't think that's true, but it seems that building will slow if the market falters and buyers can't access credit. So we could be stuck with low supply and high pent-up demand.

Maybe a recession will ease our record inflation, but it's hard to know. You would need a combination of factors all hitting at the same time for cost of housing to drop.

https://www.boards.ie/discussion/comment/119620933#Comment_119620933

I'd like to see a breakdown of immigration but there's a major skill shortage in Ireland, especially in tech and manufacturing. I see a lot of Indians and Iranians here on critical skills visas. You also have to factor in climate change, I work with a few Indians and they love the climate in Ireland.

15-09-2022 10:52am

https://www.boards.ie/discussion/comment/119620976#Comment_119620976

So you're saying headline number 1?

fliball123 · 15-09-2022 10:52am

https://www.boards.ie/discussion/comment/119620928#Comment_119620928

I think no 2 will be prevalent by the end of the year/early next year and property prices tend to react a lot slower and no: 2 will directly lead to no:1 no longer happening.

Padre_Pio · 15-09-2022 10:55am

https://www.boards.ie/discussion/comment/119621005#Comment_119621005

Flip a coin? People have predicted a recession or a crash for 5 years now. It's only gone one way. There are a lot of vested interests keeping property prices high. I honestly don't know. I'm buying now, it may be the worst time, but next year may also be worse.

I remember back in 2019 when I started looking there were posters here forecasting the end and warning people against buying property.

OEP · 15-09-2022 10:56am

https://www.boards.ie/discussion/comment/119620955#Comment_119620955

Yea. There's just always that annoying feeling that you're going to be paying for this for an extra 5 years vs the person who bought the same house last year or the year before and possibly the person who buys the same house next year or the year after. And I know that's not the way to be thinking and it's completely out of my control but it's hard not to have that pop into your head!

15-09-2022 10:58am

https://www.boards.ie/discussion/comment/119621014#Comment_119621014

Yep, very true, 2020 was the same. As I said you are right to buy if its in a location you like and see yourself there long term. Good luck with it.

fliball123 · 15-09-2022 10:58am

https://www.boards.ie/discussion/comment/119621023#Comment_119621023

Well surely the math of what your paying in rent to delay for what could be 12 maybe 24 months would help you? Its a gamble either way I would be more fixated on personal reasons, kids, school, work.

OEP · 15-09-2022 11:00am

https://www.boards.ie/discussion/comment/119621037#Comment_119621037

I'm fully set on buying, not saying that I'd be better off not. Just the annoyance of it being the wrong time in terms of where the market is at, but that's all what ifs etc and out of my control. It'd be great if we didn't have such a volatile property market.

MrMusician18 · 15-09-2022 11:09am

Some parts of the market are now mid-turn. Anything that is not in turn-key condition is struggling to shift, this being due to the inflationary risk in construction. I am watching one property 120sqm with good potential for refit and good location (C+ personal rating for area) that is about to close under 440, 50k under asking.

Good stuff, turn key or near turn key is still seeing strong interest.

fliball123 · 15-09-2022 11:10am

https://www.boards.ie/discussion/comment/119621048#Comment_119621048

yeah I hear you good luck with your purchase look if nothing else if you have a roof over your head and set your interest rates for a long peiod you have certainty of what your paying

JohnnyChimpo · 15-09-2022 11:10am

As Keynes famously said "Markets can stay irrational longer than you can stay solvent." (often referenced these days when people short Tesla stock because of its obvious deficiencies as a company). People who try to time the market without any privileged knowledge tend to get washed out to sea, and it's doubly sad when people apply this thinking to the property market. Buy a home, and live in it.

AySeeDoubleYeh · 15-09-2022 11:14am

https://www.boards.ie/discussion/comment/119616900#Comment_119616900

Have two first-hand examples of this in recent weeks in Dublin and Wicklow. It will be interesting to see how the 700k+ new builds in Shankill-announced the day after the ECB rate rises-fare!

Claw Hammer · 15-09-2022 12:19pm

https://www.boards.ie/discussion/comment/119613898#Comment_119613898

It is unlikely there will be significant tax rises in this budget. The impact of the recession won't hit the exchequer figures until Q2 next year. Post Christmas lay-offs and business failures will stress the exchequer in Q1. Taxes will be imposed or increased wherever politically acceptable. Today it is reported that Glenveagh, a large building concern, has noted that labour shortages have eased significantly in the building industry. That means there is less building activity and this means less employment in numerous dependant businesses.

Claw Hammer · 15-09-2022 12:19pm

https://www.boards.ie/discussion/comment/119616700#Comment_119616700

Those figures reflect what was going on in the market 6 months ago, not the current situation.

RichardAnd · 15-09-2022 12:48pm

https://www.boards.ie/discussion/comment/119621006#Comment_119621006

What about the possibility of "stagflation"? I've heard this mentioned by more than one economist, and it seems a possibility. It happened in the 1970s after the oil crisis, and interest rates went well into the double figures to fight the inflation. I wouldn't be enthused at the prospect of paying a mortgage in the hundreds of thousands with such high rates of interest.

Claw Hammer · 15-09-2022 1:04pm

https://www.boards.ie/discussion/comment/119621477#Comment_119621477

Stasgflation isn't too bad for mortgage holders. Salaries and wages rise in accordance with inflation causing more of it but the loan remains constant so after a few years the mortgage repayment is a much smaller proportion of the borrowers earnings. If it wasn't for the rent cap the thing top do would be borrow as much as possible when stagflation starts and the rent would rise with inflation whilst the loan repayments remain constant.

SummerK · 15-09-2022 1:33pm

I recall this house was listed on Irishexaminer or independent a few weeks ago when the price was 449k, but seems it's back on the market again for 425k. Things are cooling down for sure.

https://www.myhome.ie/residential/brochure/1-lakelands-gardens-crawford-gate-blackrock-cork-t12-e98k-blackrock-cork/4642747

Edit: Found the link to Irishexaminer https://www.irishexaminer.com/property/residential/arid-40953230.html

Masch8933 · 15-09-2022 2:00pm

I am due to return to Ireland in the next 6/9 months and I am lucky enough to be a potential cash buyer.

My take is that house prices in the upper range will start to come down as the higher the mortgage the less affordable it will be become especially with inevitable next rise of 0.75% by end of year.

My opinion is that the market is not sustainable at the moment and need a correction, plus it need more competitiveness in the mortgage market place, where i currently am Insurance companies and Investment firms are required by law to provide a percentage of their cash holdings in mortgages, as it is a law requirement they are not interested too much in making a major profit and therefore provided very very low rates but are very selective with who they give mortgages to

nullzero · 15-09-2022 2:11pm

https://www.boards.ie/discussion/comment/119621650#Comment_119621650

I've seen a few houses come back onto the market at reduced asking prices recently after being sale agreed, what's happening is the estate agents are doing their best to ignite bidding wars and use the price drop as a means of attracting people in, before you know it the current bids are beyond 50k over asking and it's all driven by demand.

The real change will only begin when people stop bidding insane prices on properties, and there needs to be some type of regulation of the behavior that goes on with bidding as has been raised here on numerous occasions.

Sierra Oscar · 15-09-2022 2:23pm

https://www.boards.ie/discussion/comment/119621375#Comment_119621375

More like three to four months ago according to the CSO, but sure what would they know.

Regardless, the same response has been trotted out every time I have posted the returns over the last three months. The first time around the chorus was that inflation had only gotten underway six months prior, and the war in Ukraine had yet to even break out. Six months ago from today we were in March. Inflation was rampant, the war in Ukraine was well underway and businesses were on their knees dealing with the fallout from the pandemic.

The market is cooling in so far as the rate of property price increases has slowed, but they're still increasing nonetheless. I'd imagine they will continue to slow. When is the 20 - 30% drop in prices going to set in, though?

Keep in mind that when I referred to the Residential Property Price Index figures at the height of the pandemic I was told that I was a fool and that the figures were six months behind what was unfolding on the ground, and that a collapse in property prices was around the corner.

Just trying to provide a little perspective.

RichardAnd · 15-09-2022 3:02pm

https://www.boards.ie/discussion/comment/119621873#Comment_119621873

In fairness, the estate agents were doing that all along. The house in question would probably have gone for well over 500k regardless of the price it was put up for.

However, I do agree that agents have been engaging in some rather questionable tactics to accrue larger sales. Regulation is sorely needed in that area, but I don't see how it could be enforced.

MrMusician18 · 15-09-2022 3:13pm

https://www.boards.ie/discussion/comment/119621873#Comment_119621873

Not true in every case, the house I mentioned previously looks like is now going to close 5k under the revised asking.

Claw Hammer · 15-09-2022 5:20pm

https://www.boards.ie/discussion/comment/119621942#Comment_119621942

The CSo figures are for deeds stamped in July which reflect sales which closed in June which reflect contracts signed in April which reflect properties on the market in February -March. At that time inflation was being described as transitory, the rise in the cost of energy had not begun to impact,. the ECB hadn't raised interest rates and the talk was of small rises in interest rates. carry on looking backways, hindsight is always 20/20.

monkeybutter · 15-09-2022 5:20pm

https://www.boards.ie/discussion/comment/119621650#Comment_119621650

all that matters is sale price, looks like a very strong initial asking price

https://www.boards.ie/discussion/comment/119622248#Comment_119622248

where is this house? list it and we can see if its a good price or a bad one

Like a 4 bed at 440 that needs a refit doesn't sound that great

Burti16 · 15-09-2022 8:24pm

The 6-Month US Treasury now yields basically the same as Buying & Renting Out a House in America. I won't be suprised if large estate investors start selling housing portfolios at mass scale and move their cash to safer and low risk treasury bonds.

Littleredcar · 15-09-2022 10:35pm

Currently highest bidder just 10, 000 over asking price over a week. Radio silence from agent. I’m bidding my time and not going to contact him. Have had two calls from another agent we a house I viewed last week - 8 weeks ago couldn’t get to view properties . Demand is obviously slowing