Agree “capitulation” was getting a bit ahead of myself. There certainly is momentum in this category however with both a downward move in asking prices and as discussed above, significant stock coming on and adding to existing available properties. I suppose we are seeing downward pressure on asking prices and a realization among sellers that you’re not going to get away with doing previous sale price +10%. The stock build, one would imagine would be negative if we do not start to see movement. Very much a watch this space in order to get a feel for underlying market conditions.
You are 100% correct that sales prices are far more important than asking. That being said, asking prices are typically a lead indicator for sale prices. And so a drop in asking prices, even from “astronomical” to “pretty damn punchy” is a move in the right direction (for me).
Again, you are very correct that I do have an agenda. I’m looking to buy a PPR in North Dublin. I am however looking in a totally different segment to the Kincora/Mount Prospect 3-bed semi of Clontarf. That being said, movements in this EUR 450-800k does have an important knock on effect to my segment of interest so very interested in developments. I see my segment of interest as being 20-30% over valued, so keen to see the 3-bed semi market downward correct given the negative connotations. As a cash buyer, I’m happy to sit on the sidelines and wait until 2016 unless I see indications of upward price pressure. There appears to be anything but at the moment.
As discussed previously, I struggle to see how current property prices are being supported given the underlying economic distribution of Dublin. Price moves of - 10-15% are realistic for properties in the EUR450-800k range IMO. That means pricing around the EUR400 sq ft mark. 2012 pricing was driven by a number of (relatively) unique factors; inventory, credit availability, continued weak economic back drop. These contributing factors have softened.
The CB rules however explicitly link (and limit) credit to multiples of earnings. This is what will damage this segment. The c.EUR120k household income needed to support a mortgage on these properties does not typically match the buyer profile over the last decade of these properties. Yes people on those incomes are relatively plentiful, but they have not been the typical buyer (IMO) of these properties and have been looking elsewhere.
You look at what could support these properties:
FTB: No: due to cost and economics.
Rental: No: Rental yields do not support prices north of EUR500k.
Trader-upers: No: largely going to have limited equity if purchased property 2004-2011. Thin volumes 2011-2015 means pool of buyers limited.
Trader-downers: Currently no/limited market in North Dublin for properties over EUR750k. Also, would question motivation of trader downers (one would assume >60 year olds) to want to pay the premium for proximity to city and schools etc. that Clontarf trades on.
Investors: Less motivation than 2011-2014. Capital gains benefit gone. Market direction uncertain. No longer the same asymmetric risk profile of the trough. Poor performance of other mainstream asset classes may limit fire power. Valuations no longer a slam dunk.
Hell, I may be wrong but I’m sure we’ll get further evidence one way or the other over the next 6-months. Current indicators (asking prices), are pointing downward however in the absence of tangible sale prices.
Saw a house at weekend, first viewing, liked it a lot. Checked this morning, already a bid in 3.3% below asking. I intended to bid so bid 2% blow asking. 2 minutes later a counter offer 1% below asking comes in. All before 10am on a Monday morning. The heat is still out there
I am going to say no. I made an offer by email - literally 2 minutes later I got a call, either the inital bidders or a third bidder offered more. If it was the initial bidder they obviously really want it to counter bid straight away - I’m still sitting on it now, regardless of whether we decide to offer again and can afford it there’s something about bidding straight away on the back on a counter offer that gives me the heebie jeebies. If I was a rogue EA and wanted to make Mr P. Hantom bid I’d be concerned that a counter bid straight away looked suspect?!
I suspected I encountered Mr P in the past - on all occasions I was wrong
Maybe I used the wrong term- I just expected people to be more cautious with counter offers and take more than two minutes to consider it. It’s like Monopoly money.
That said, it’s a house i really like so it makes sense others saw it and felt the same. Do t want to get in a bidding war so I might leave it for a week and if there are more offers above that I have to walk, if the last offer is the same I may consider a final bid
Yeah, all it takes is for two people to really like it and you can legitimately get a very quick escalation until one drops out. I got my place that way – I aggressively bid up until the others dropped out. I was within the budget we’d set ourselves (including a renovation budget) so I didn’t waste much time between bids.
i was intentionally a quick counter bidder as a strategy.
Yes, you risk the phantom bidder. but you also stop other bidders getting emotionally attached to the property.its amazing how often people will get an extra 10k from daddy or the decoration fund to improve their “absolute limit”. its nearly always driven by getting too emotionally attached.