Used to be very exclusive in the 70’s/80’s/90’s and commanded a serious premium.
Then the Celtic tiger arrived and hundreds of houses (maybe over a thousand) were built trying to command the Delgany premium. Other neighbouring areas started sprouting Delgany addresses. Asking prices still ridiculous.
if vendors dont need to sell then they are not compelled to reduce prices. Its frustrating for potential buyers (as can be felt from your post) but until vendors are put under pressure to sell it will remain
Also in some areas vendors may own the place outright and dont need to sell
Firstly, I don’t think most people would agree that Dublin house prices are still over priced.
I’d say the majority of people on this website do, but thats not the same thing by any stretch.
Second, with regard to some areas being way overpriced…
There’s only one price that matters in my book; thats the transaction price.
The EA guide price doesn’t really matter much, it didnt matter much on the way up and it doesnt matter much now. Its a guide, thats all. And if a house is for sale at a price ‘way up there’, ie at 2008/09/10 levels, then its not really for sale in my view.
So when you say that housing in certain areas is ‘way overpriced’ how exactly do you mean?
The areas you mention are basically all the plush areas of Dublin. You could equally have thrown in Clontarf or Sandymount. If you feel those areas are relatively overpriced, based an actual sale prices, compared to say Ballyfermot or Cabra or Crumlin…then that probably reflects the dynamics in Irish society at the moment. There are still a lot of people here on very high wages. Six years ago, a very high wage mightnt have bought you a house in Ranelagh, now it definitely does. People on mid to low wages have been hit relatively much harder by increased taxation (as in their disposable income has fallen by a much greater amount than that of high income earners). This probably has a relatively heavy affect on the low to mid end housing stock.
I presume incidentally, that you are a buyer not a seller?
Fair enough. One way of comparing value could be to say, take the average cost of a house in 1993 (pre house pricing boom) & add the CSO’s official inflation rate for every year from then to now.
Then compare it to the current average price per the CSO’s residential pricing index.
Any difference could be deemed the outstanding overpricing in the market as a result of the bubble.
Wonder if I should make this a separate thread so someone can work it out…
They are more plush areas alright and I know that even under normal market consitions only the higher waged person has ever been able to afford these.
But in saying that, there seems to be clusters of areas all trying to charge a higher premium, despite their neighbours, often in the same plush area or adjacent to it, setting more realistic and currently achievable prices.
I am the first to shout at overpriced house and there is some dross out there (400k in Lucan types).
People forget quickly that parts of Dublin were never cheap and back when you could get a house in Swords for £2,500 (1974) you would pay £20,000 in the nicer parts of Dublin. Those who can, buy, those who can’t rent. Different strokes for different folks but I am getting off the fence. You have at best 50 good years as an adult and I for one am not spending 20% of that time waiting with smelly fingers to pick the bottom.
I have noticed that there is a shortage of good stock emerging at the minute in Dulbin and some sales going through which is feeding a less interested mood on the pin.
Its an interesting idea…to take different parts of Dublin and see what the housing inflation has been since 1993.
On that point; take note that you’ve mentioned Ranelagh and Mount St Annes, two areas where values were helped considerably by the luas…which is a fantastic amenity…so make sure you are comparing apples with apples.
I actually do sometimes take a look at auction results from Dublin in the late '90s to get a sense of ‘where we are’.
Perhaps its the case that the credit explosion had a relatively greater affect on an area like say east wall than it did on ranelagh…in the sense that in the 1980s/early 1990s you couldnt get rid of a house in East Wall ‘at any price’…whereas in the 2000s prices firmed considerably…but there were always buyers for houses in Ranelagh (and still are today).
As a matter of interest…if you were take the ‘plush’ areas of Dublin…say Rathgar, Ranelagh, Sandymount, Mount St Annes, Clontarf, Glasnevin, Blackrock, Foxrock, Howth, Malahide, Dalkey, Glasthule, Castleknock…on a relative basis would you say that one of these is more attractively priced than the other…
In other words…you said Ranelagh is overpriced…where in the above list of places is it overpriced compared to…?
I dont get the sense that properties in ranelagh are, in general, failing to sell because the vendors are asking for too much.
I think you would then need to take incomes and look at what has happened to them over the same period. I’ll bet that income growth way outpaced inflation in that period. You also need to look at household incomes as well as individual incomes – there is still an effect from the entry of women entering the workforce, even since the 90s. And finally you’d need to look at income distribution, not just average incomes … that truism about the rich getting richer means that there are more people at the upper end of the housing market, so you’d expect the distribution of house prices to widen. (Needless to say, the last four years will have upset the apple cart somewhat – stagnating wages, increased taxes, women leaving the workforce, many high earners wiped out).
There was a lot of poo-poo-ing the Allsop auction price for the house on Iona Road over the summer.
There is a property not too far from there, which was mentioned on this site as being ridiculously overpriced, madness on the part of the EA, not worth half that and so on and so forth…with italics and underlines blaring.
Turns out the property has gone for just under (-10%) what the EA priced it at.
I spent ten years between 1997 and 2007 listening to people telling me with certainty (or 98% certainty) that property was the only way to go. The higher prices got, the more it became the only way to go.
I’ve spent the last four years listening to people saying with certainty (or 98% certainty) that property is screwed.
Unemployment hit 21.9% (averaging over 14% in the 20 years between 1975 and 1995)
Mortgage rates were approx. 10%
Female participation at 34% was a third below the EU average
New house prices in Dublin had fallen by approx. 20% in real terms over the previous 3-4 years. Prices (in real terms) took until 1996 to get back to 1990 levels
Despite the recent introduction of levies etc, tax rates in 1993 were considerably higher and bands considerably lower (in real terms).
Actually your first one point is a good one…when pricing is at an extreme, its relatively easy to make a call that a reversal is on the way…you are quite right that by 2006/07 a lot of people were saying property was over priced…(although a lot were saying it wasnt)…whereas say in 1998, when prices had begun to achieve some momentum, when interest rates were falling and when we are about to enter the single currency…there was a strong consensus that it would rise.
Yes, anyone who has said for the past four years that property will fall has been right…thats obvious…your sarchastic comment about hiding in a hole…? well somethings are so bloody obvious that they dont need to be said do they>?
My point to you is, that each year that prices drop another 20% it becomes harder and harder to say that they will continue to fall.
On balance of probability, I’d say that you are right and we will see one or two more years of decline, followed by a stabilisation.
6 reasons why they might not?
(i) Banco Santander buys AIB and commits to new lending in the Irish mortgage market
(ii) Irish employment levels begin to rise again, led by exporting companies
(iii) The Irish government is in a position to say that the budget deficit has stopped growing, is under control and that there will be no further/ incremental austerity measures in the next year/two years
(iv) irish govt is in a position to borrow money internationally again
(v) ECB commits to cutting interest rates and maintaining low interest rates for the next two years (as per what the Americans believe)
(vi) ECB increases money supply, boosting wage inflation across the EU.
There’s a hypothesis that required no mention of idiots or hiding in holes. There’s nothing above that you can factually say won’t happen.