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

I dont know how their mind works at all but they paid 800k for a 4 bed house that was falling down near my Dads house about a year and a half ago. It was boarded up for a while. It will be over €1m spent on buying and doing up that house before they are finished. There were loads of other 4 beds for sale at the time in towns less than 10 mins drive away for half that price. I think they have a target amount to spend and they dont care about value or number of houses they get for it.

Can someone tell me why we are stilling building so many 3/4 bed semi-detached? Surely terraced housing is cheaper and quicker to build?

So I was just on the phone to the management company of the apartment im selling to make sure my management fees are up to date and get stuff like fobs and keys in order etc. Had a very interesting conversation when i told him i wanted to get the fees in order as I was selling. There are over 150 apartments in the development. He told me that the council have so far bought 22 apartments over the last few years. Every one of them are former landlords who were selling up. I asked him about the other 2 i saw for sale as well as my own. Landlords selling too he said. Then he told me that the council had at least another 18 apartments leased and he knows because he is the one who has to call the owners of those apartments about the anti social behaviour of those tenants and then gets told to talk to the council, who wont talk to him. He said that he doesnt know how many others are rented by the council, he only finds out the ones that are if there is trouble. But of the owners who he has had to contact about their tenants, they (all of them) said they are selling as soon as their leases are up with the council too.

So glad we decided to sell up already after that conversation.

Are you sure about that, 60 years would easily be the lifetime of the mortgage holders given the current ftb average age.

Mortgage holder/owner would also be more incentivised take care of it to maximise its life

Many pernament houses are stripped and renovated in a 60 year cycle, possibly more than once. Getting a new modular may be cheaper and quicker, whereas the old modular could be up/recycled

And you still have posters saying prices will go up. Banks will not lend as much with the rates doubling, it takes a while for rates to effect the market but it does.

No arguments here, but what about the sky-high demand? The state brought in about 90k refugees last years, in addition to whatever other immigration may have taken place. Probably, the same will happen this year. Granted, refugees will not be buying property themselves, but their presence here is still a demand for housing.

Rate rises reduce overall economic activity not just housing. Finance for start ups, less jobs lead to emigration.

Look at this, rates have an effect it just takes time.

I do not see many posters saying that prices will go up. Rather many of us cannot see a house price collapse. It's interesting to ask anyone saying there will be a collapse to quantify what they predict.

Early last year I was predicting a 10% reduction towards the end of '22 running into 2023. I see no reason to change that prediction.

However there is little advantage in waiting for such an increase. Take some o e buying a 450k house with a 400k mortgage. Great you say they will save 45k over the peak last year if it happens.

However last year they could have borrowed 400k at 2.2%, on a 5 year loan, by this summer the same loan will be over 3.5% at a guess so they could be paying 1.5% higher rate. Over 5years on 355k ( loan less the 10% savings) they will pay 26k in extra interest and then you can add another years plus in rental costs. You can also factor in human nature and if prices are falling people will hesitate to buy as they think prices will fall further. It's often hard to catch a falling knife

Ya over the lifetime of a loan they will pay less but the savings will be very marginal.

One would imagine there would be a rush In before the worst of the rate hikes to avail of still very low fixed rates. The rush would push up prices a little

Exactly so as time progresses the chance of anyone involved in getting a mortgage will be paying more for their mortgage as rates have increased. The clock is now Feb for the next rate rise and then March (I think) for the 2nd one in 2023 and the time difference to the bank actually upping their rates.. As I say I can see a lot of people who got mortgage approval in Q4 2022 being cut out of the market by interest rate rises.

Both true, but just to clarify. I’m saying the average value the bank approved FTBs for jumped in November. Not the number applying (although they jumped too).

Generally people just go for approval for max what bank will give them and then they look for the house.

My point being, banks knew well about rate increases in November. They had increased them already and knew they would increase them further. Yet they continued to increase the amount they would lend on average (3% mom, 6% YOY vs when rates were at all time lows).

This to me indicates the LTI limits are a bigger factor in what people can borrow than interest rates (also supported by the drawdown data which shows a huge percentage of people drawdown 3.4-3.5x their income). This makes it less certain that higher rates will equal lower lending than it would in a country without strict LTI limits.

I'm not expecting any collapse but 10% is a sizeable drop, wipes out house price growth over the last year. My only point is prices have to come down to balance rate increases.

You could get 2.15% up till a few weeks ago, wait till 4% happens by the summer.

Thus dropping demand. If demand isn't there prices only go one way