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

3.8% rise in asking prices in Q2

sale price increase maybe not as much, but still sign of prices rising

https://www.businesspost.ie/news/house-prices-rise-by-3-8-per-cent-in-second-quarter-of-year/

Properties guiding at €320,000 are routinely selling for €350,000 simply because the buyer is under time pressure due to a notice to quit,” said managing director of REA McGee, Anthony McGee.

Yeh, renters paying nose-bleed rents are managing to find an extra 30k down the back of the couch 'cos they're getting evicted…🙄

If they bid 30k more than the asking price then thats the market price. We went more than that over. Every house that we didnt win on we were also bidding 50k or more over asking, yet they all went for more.

I love the way people write about the landlords selling up yet dont write about why and didnt write about the elephant in the room when rent controls were introduced, or even when they were "enhanced".

Its almost like the media are afraid to print facts and research.

They are serving their client well in that case, I suspect few properties have an actual/secretive price (I’m not sure what that is), at which vendors sell even if people are willing to bid more. Most, if not all sellers see advertised guide price as just that, a guide, the actual selling price will be whatever the highest bid is, usually.

I called into a friend at the weekend who lives in Westmeath.

They are paying €950 pm for a 4 bed house. Its a fantastic house. just outside the town and about half an acre of a garden surrounding it. I think it would probably sell for €450k. Twice that if it was in Dublin.

They have been in the house about 10 years. Their landlord recently asked them to do or pay for some of the garden maintenance themselves. cut the grass themselves basically because it was costing him too much to get someone in to do it as he always has.

They were clever and knowing he could only put up the rent 2% said to just add the cost of the grass to the rent instead.

They were surprised that their landlord has now issued them notice to move out as they are selling. They were raging about it so i sat down with them and did some quick beer mat very rough calculations to show them that the landlord would be stupid to hang on to that house. I believe they built it to live in but had to go abroad to work and havent come back yet, but plan to at some point.

So lets say the house is worth €450k (no idea if they have a mortgage or how much or how much tax they pay, but doesnt really matter).

They can continue to receive €950pm upping it by 2% per year. Or sell it and buy 2 apartments in Dublin (for either the cash or mortgages with the same value as the outstanding mortgage if they have one) and rent them out for €2000 (give or take) each pm.

€950pm against €4000pm for switching up the money tied up in that house. I know what I would be doing. Well actually I would be buying ETFs not rentals, but you get what i mean.

This couple still cannot see why their landlord is nuts not to sell. They think the landlord should be happy with what he has and leave them be. And they are already talking about overholding and not actually looking for somewhere to live for their family in the time they have to look, which is a long time to be honest.

The reality is that its a sh!t investment for their landlord and they should be looking at better options.

My own sister just sold an investment property and bought an apartment in Spain for similar reasons. Better use of the invested capital.

I don't see how you come to the underpricing conclusion, given prices are up double digits percentage wise in many markets in 12 months

Hilarious, your friends are so arrogant!! They were already getting it for next to nothing yet Karma came to bite them.

I hope the government will implement more stringent actions to deal with these chancers who overhold. If that will roll out, we will see a less toxic rental market out there which will work better for everyone.

there's over holding which is not acceptable and then some landlords are not giving the required legal valid notice with all that implies which is also unacceptable

I dont think you would get 2 apartments in Dublin for 450k though?

What would be the market rent in Westmeath for a 4 bed like that? I assume a fair bit more than 950pm?

But as you say, you cant blame the landlord for trying to make their assest work for them and the rent caps stop them doing that.

Of course, some will point to the fact that if the landlord sells, someone has the opportunity to buy the house. Thats a good thing; but it doesnt help your friends, who are now looking to rent a house at (potentially) a much higher cost in the same area.

I think people just get used to the way things are and think that the rent they are paying is expensive and their landlord is rich. I find a lot of people dont have the ability to look at situations from different perspectives than their own. I suppose its easier to do when you are outside the situation than if you are one of the parties.

But one thing i am sure of is that over holding has been normalized nowadays. That is ultimately very bad for society and is helping to make things even worse than they have already become.

It's actually gone completely mad. Honestly don't know how people are coping.

One of our neighbours houses just sold for 85k more than we paid for ours in 2022. And it's not even as nice as ours. There's a real sense of people desperately trying to get what they can while they can for fear of being locked out.

In the context of a highly distorted market, one could come to the conclusion as a result of these distortions the price paid is very high

The market price in 07 was also the market price but many argued it was overpriced

Yeah people are over-paying because of desperation alright. People expect the % increase on properties now.

For example if your budget is 400k and see a 3 bed listed at 350k, you're going to get involved. You have the wiggle room, and can 'afford' a bidding war right thought to 390k/400k ish. And many people will be in the same boat, which will ignite the bidding war, as they have become invested in the idea of living in that property and are willing to stretch their budget a bit more. If a 3 bed a few doors down is listed at 380k, how many of those same people will be interested at that price, when they factor in the same % increase fear. Not as many. Both properties are probably really worth 360k ish.

Under-valuing properties is creating a frenzy and increased competition which in turn is putting prices up as other EA's can see the multiple people bidding 360k/370k/380k etc on properties in that area and know that there are interested parties willing to pay that price range.

The whole bidding process is wide open to abuse and I have no doubt in my mind that the number of EAs that are crooked is at the very least a sizeable minority.

It may well be the 40% of 24 to 35 year olds in full time employment but living with parents.

FG' S election promise is to reduce inheritance tax as house prices are moving beyond the tax threshold. More fuel to throw at house prices

The kitchen sink is been thrown in to drive prices ever higher

Government as ever the greatest contributers to the problem of inflation and housing