Asking Prices - Worrying developments


#1063

Exactly (see ‘or whatever it goes for as noted in my post’)

No I mean if they can achieve €690k for #15, then there’s still very little to cheer about given it’s still €155k higher than 2 years ago compared to #9 (not sure of exact state). Looking at bigger picture rather than winning small price fall battles.


#1064

No I mean if they can achieve €690k for #15, then there’s still very little to cheer about given it’s still €155k higher than 2 years ago compared to #9 (not sure of exact state). Looking at bigger picture rather than winning small price fall battles.

As has been discussed at length, the €500k+ band in Ireland is screwed. Is that going to play out over the space of 2-3 months? Over 24-months. Yes.

As is being pointed out, this has not sold, and as we saw 2007-2012, it’s not like prices instantly bottomed.

“Bigger picture” you’re looking at paying €550-700k for a 3-bed semi, in a city which has far from world class infrastructure or amenities and job prospects are average at best. The fact that this would be €200k+ cheaper in the capital city of a comparable European country seems to be lost - that’s the big picture, and that’s what is concerning.


#1065

The EURO area weakness is a fairly big component. If you assume the 2013 UN numbers are correct then in order of popularity as a destination, the price increases does need to be offset by:

UK (413k Irish): GBP 22% weaker
US (144k): 19% weaker
Australia (78k): 8% stronger
Canada (26k): 6% stronger

irishtimes.com/life-and-styl … -1.2089347

So for the bulk of emigrants looking at returning home, they’re looking at house prices being roughly flat to +10% in your local currency in a decreasing market.


#1066

According to the 2015 Q2 Daft Sales report, the average asking price of a 3-bed semi in Dublin was between 203k (Dublin 10) and 589k (D4).

So your “big picture” of “€550-700k for a 3-bed semi” is actually only accurate for D4, and even then it’s above average.

The cheapest 10 areas in the report (Dublin 10, 22, 24, 17, 11, 15, West Dublin, NCD, 12 and 20) all have average 3-bed asking prices under 300k.


#1067

I was doing like for like - those one’s under 300k would be more like 150-200k abroad. The point I’m making is that the value for money/quality is poor. Clontarf is a solid area, with reasonable amenities and half decent access to the center but when you’re making your list of “Best neighborhoods in the world” it’s going to struggle to make the list whereas it, along with much of Dublin is being priced as if it would.


#1068

But your proving my exact point? You’re the one concluding and getting excited that prices are under pressure based on shortish term asking movements. As we’ve both agreed wait for PPr and give it time.

Not this again, most people don’t see it as a simple choice whether they want to live in Paris, London or Berlin. They’ve limiting factors - ties to family, language barriers, job barriers, differing income levels & tax systems.

Unless you build me a model encompassing all the millions of factors that are different between cities I’m not going down this inter Europe city comparison. It’s a big blackhole that goes nowhere. I’m out on this one.


#1069

Which cities abroad are you referring to? It’s a notion at odds with the stats available: economist.com/blogs/dailycha … use-prices


#1070

But property isn’t ever priced like that. There are a bunch of people who want to live somewhere and they divvie up the available crap according to who has/can borrow/is prepared to spent the most money.

If your point is that the Dublin housing stock is crap, you’re absolutely right. Makes no difference to prices at all, except maybe at the very top of the market.


#1071

No, you’re ignoring the total cost of buying which includes refurb costs. If the available stock needs 10k on average put in to insulate/rewire/etc it will have to sell for cheaper than if it only needs 5k. Buyers have to ringfence the refurb costs out of their available budget.

Put another way, if the quality of stock is higher, buyers can use more cash to buy the gaff.


#1072

+1 and Dublin isn’t the only case of this.
To take a more extreme example, Mumbai is an enormously important city by south Asian standards, a very significant one one by pan-Asian standards and pretty important on a world scale, but it’s still in a country with pretty ropey institutions and infrastructure and it contains a lot of absolute desolation. Does it really deserve some of the most expensive residential property on the entire planet?


#1073

What? Houses don’t have needs, people have needs. Refurb for owner occupation is not a “need”, it’s a want, and it’s only relevant to relative value when comparing one Dublin property to another. Not a house somewhere else sunnier/cleaner/with hot chicks and samba music.


#1074

Houses do indeed have needs. Things need maintenance. Note that a reasonable amount of stock recently seems to be executor sales, some of which are hardly habitable. And the overall quality/age/condition of stock compared to other countries does of course impact on average prices.

The impact may be small in fairness, but it’s not correct to say that the overall condition of Irish stock vs other countries doesn’t matter.


#1075

I’m not so sure. A house has no needs beyond obeying the laws of thermodynamics, about which it has no choice. People have needs for their houses. I could live in a tumbledown shack or a mansion, according to my taste and the structure itself would neither know nor care. Whether I locally redistribute increasing entropy is my choice, not the house’s.


#1076

OK, let me rephrase: A house has needs if you don’t want it to fall down. Or depreciate. Also, a rental has needs, by law.

I can’t actually believe you guys are arguing the point. Do you really think a house that has not been maintained or upgraded will sell for the same price as one that has been upgraded and maintained?


#1077

They’d do for sure, even if some of them look suspiciously like overgrown sheds.
The problem (or not) is that German properties are something of an aberration in the EU. The Economist graph I posted highlights this clearly enough. German property is cheaper in real terms than it was twenty years ago, despite a sound economy, because there’s a national/municipal policy to keep property affordable. So yes, Dublin prices, along with most other European cities, are higher than those in German cities. In general however, Dublin prices are pretty nondescript compared to their equivalents in Europe.


#1078

That’s not the argument I made. My point was that the overall crappiness of the housing stock doesn’t act to suppress prices because crap is competing with crap in the same market. Of course a relatively less crappy house is going to be worth relatively more, up to a point.


#1079

Yes but if the stock is crappier than people are now willing to put up with, it suppresses prices. For example, if the introduction of BERs made people realise that most houses need added insulation, that suppresses prices. If new standards mean that investors need to put X into a place before they can rent it, that also suppresses prices.

As a current buyer, I price a house based on A (upfront purchase price) + B (cost to bring it up to a standard I’m happy with). If most houses have a high “B” value, it lowers what I’m willing to pay as “A”.

So the original build quality of houses, and the maintenance levels, affect what people will pay for them second-hand. Which is not really surprising.


#1080

I know of no evidence to support that assertion. People generally borrow the most they can afford and throw it at the best they can find. That’s why we have credit controls in a low-interest economy.

Yes, of course people prefer a well-built house to a crappy one, but they don’t hold decide to borrow a lower income multiple because Dublin housing is crappier than Berlin or Lisbon or whatever.

You’re not a buyer until you buy. And you’re not normal. :smiley:


#1081

Got me there.


#1082

Why exclude the UK?

That Economist graph I linked to also shows cost of property compared to to average national salaries. Ireland sits pretty much in the middle ranking of the EU states they list, not at the top.

We’re not talking about a ‘town of a million’ in any case. There’s a property price premium that comes with a national capital (even the small ones), and more so when a third of the population want to live there. The difference between property prices in Wroclaw and Warsaw runs to about 20% as far as I can see.

Stock quality is bad here? ‘Some’ is for sure, but I guess ‘some’ Polish properties could be found wanting too.