House Prices Back at 2014 Price Levels?


#183

Never a truer word said.


#184

I think you might be on the money.


#185

Repeat from earlier in this thread: Comparing online price drops with increases as a way to prove market weakness is a fallacy, sellers don’t need to increase prices online … the house simply sells above asking. Asking price decreases will always outnumber increases by a huge margin - even in a strong market.


#186

I’m not so sure about that…


#187

Dublin asking prices on myhome.ie plateaued about two years ago, took a small dip, and are now back up to where they were. Median Dublin selling prices on the PPR are higher in 2020 than the corresponding month in any year back to the start of the price register, with the sole exception of July 2020. I’m simply not seeing any evidence for price drops in the data to date.


#188

Irish people have a track record of being irrational in relation to property. It didn’t end well before. It won’t end all this time round either.


#189

I’m referring to when the asking price for a particular property is reduced on myhome etc - reductions always outnumber increases because there’s usually no need in increase the advertised asking price.
Asking price trends for the overall market over time is different, of course these will fluctuate.


#190

Fair enough!


#191

Hardly any stock during the deepest trough of the last downturn. People didnt sell and the bank bailout saw to it that they didnt have to.


#192

sigh… this site has the potential to provide valueable insights on the market but is often hijacked by people with extreme agendas who cannot accept reality or factual data. i’m looking at threads on this site often lately and it is very obvious to me that there is one person using 3 different accounts to make posts under one account and then use the other 2 accounts to agree and reinforce the initial point or to disparage the sensible views put forward by other posters. if a perspective or opinion is worthwhile or logical it would not require some one to have 3 accounts to try and convince everyone their opinion is a good one. no prizes for guessing who the 3 accounts are. its embarrassing and nobody is falling for it… and i would also add ur wasting ur time this site is not capable of influencing the market trajectory u will not cause the price drops u are looking for by trying to talk down the markt on here. the market data and facts speak for themselves & rubbish theories are very easy to see thru… rant over :roll_eyes:


#193

Well, I can’t question your statistics as from what I can see they’re always second to none.

But, going forward, is there something happening that is somewhat similar to the argument 15 years ago that oil prices can only ever increase due to the world running out of oil. At that time, nobody seemed to factor in the shale gas revolution in the United States i.e. is there an unforeseen source of housing supply about to enter the market in Ireland?

For example:

  1. Census 2016: 180,000 vacant homes. Who really owns these properties? Will they flood the market shortly?

  2. GeoDirectory Report 2020: 90,000 vacant homes. Who really owns these properties? Will they flood the market shortly?

  3. To put the above two figures in context, England with 10 times our population only has c. 200,000 vacant homes.

  4. Student Accommodation: Thousands of additional purpose built units that nobody seems to be factoring in.

  5. If AirBnB was a significant factor in the “housing shortage”, why aren’t these units already in the market (sale or rent)?

  6. The universities are not bringing many of their students back this year. International students are not coming. What’s happening all these empty rental units, many of which are 3 bed semis in South Dublin?

  7. Executor sales: It seems to me that many commentators believe most of these homes just disappear the moment these people pass away.

  8. Population increase: It also seems that many commentators believe that an increase in the population automatically translates into equivalent additional housing demand. But, a significant percentage of the increase each year appears to be due to people living longer and who already own their own homes.

For example, population growth in Ireland in the year to April 2019 was 64,500. During 2019, we built c. 21,000 units which would be enough to house 42,000 people if each new built unit housed an average of two people (e.g. a regular couple excl. children). How many of this 64,500 increase was in the over 65s or under 10s, both groups who would most likely already be housed? The natural increase in the population was only 31,000 (CSO report link below). It might be sacrilege to state it, but did new build housing supply exceed housing demand in 2019? Does this explain all the unsold/ unrented new build units in Dublin?

I remember a comment by David McWilliams back in the 2000’s, where towards the end, he stated that we appear to be building houses for the people building the houses. Once the building stops, they leave and all these houses the builders lived in would become empty. He seemed to be eventually proved right. Is there something similar happening at the moment, but from a different angle?

As someone pointed out before, the population of Ireland increased by 173,000 between 2011 and 2016. But of this increase, 100,000 were atributable to the over 65s. A group already housed.

The data is the data. It’s needed and you do a truly amazing job of putting it together so a layman like me can understand it and it’s very much appreciated by many users here. But, it’s also in the past and I’m wondering if there are signals that are pointing to a different direction going forward.

The CSO report on 2019 population increase is here: https://www.cso.ie/en/csolatestnews/pressreleases/2019pressreleases/pressstatementpopulationandmigrationestimatesapril2019/#:~:text=Population%20growth%20of%2064%2C500%20in%20the%20year%20to%20April%202019&text=This%20annual%20increase%20brings%20the,period%20is%20estimated%20at%2054%2C900


#194

LTo whom do you refer? My own opinion stems from my experience as a buyer in Booterstown / Blackrock during 2012-13. No pretence. It was difficult because little for sale and what was on was trashed and needed renovation. No value to be hand if no stock on sale.


#195

Anyone who can’t spell “valuable” on this forum should be booted! :wink:


#196

You omit factors like decreasing average household size which increases demand, or the fact that 2% of the housing stock becomes unusable each year. Some of your points don’t make any sense – people living longer doesn’t increase the population, only births and immigration do that. And other points like the number of vacant homes or the number of elderly people would be more relevant in relative rather than absolute numbers. For instance, how is the number of vacant homes changing – unless it’s going up there’s no reason to suspect a significant effect on the housing market because it’s already factored in.


#197

Good points. I’ll try answer them from my, admittedly, layman perspective.

If 2% of housing stock is becoming unusable every year, that equals c. 40,000 units per annum or 200,000 every 5 years. I’m not sure that would be plausible. Maybe it is.

From looking at the CSO figures, below is the increase in the population between 2011 and 2016. I’ll admit it doesn’t make sense to me either, but it appears to show that the age groups most likely in need of a home fell significantly during these years. I would assume most people over the age of 40 already had a home (owned or renting). Is that a big assumption? Maybe it is.

Maybe you can make sense of them and I would genuinely appreciate a light shun on these figures and what you may make of them and their impact, if any, up, down or meaningless, on the future demand for housing in Ireland.

Total increase in population 2011 - 2016: 173,613

0 - 34 Years: -72,493

35 - 64 Years: +143,932

65 - 85+ Years: +102,174

In relation to vacant homes, whether it’s 180,000 in the 2016 Census or 90,000 in the latest GeoDirectory research, I think it’s fairly significant, given our relatively small population. Maybe it’s not.

I would be very interested in your thoughts on the breakdown of the population increase though. I’ll fully admit, you’re way way ahead of me on your ability to interpret such data.


#198

the comment was not in relation to you as you had only commented once. if you or anyone else re-reads this thread from the start it is very clear which three accounts i am referring to. anyway my point still stands people need to be careful of the rubbish spouted on here even if the stuff is being reinforced by ‘‘other’’ users agreeing… they are the same person.

i dont need to do anything more than remind people of this earlier post… enough said:

be careful of what you read and what peoples agendas are.


#199

It’s all Treadstone lads. Believe nothing. Lock your doors!


#200

On the contrary, no agenda outside of looking at signals in the marketplace that may indicate where prices may be in 5 to 10 years time. My assumption was based on the following:

  1. Interest rates are already at zero so any value in a property attributable to interest rates is most likely already fully priced into a property’s value.

  2. Given the probable changes to the international tax regime over the next 5 - 10 years, there’s every possibilty that the multinationals (especially in Dublin) will relocate to lower cost countries in the EU. We have already seen how easily and quickly they could relocate with the WFH over the past six months. If the location of the european headquarters are so integral to the likes of Google, Facebook etc., how come their CEOs hardly ever visit us? From my reading of the newspapers over the past 5 years, they seem to visit London etc. a lot more frequently. If the taxation benefits etc. to being located here are no longer available, will they stay?

  3. I believe interest rates will be (at the very least) 3% higher in 2030. If the low interest rates and money printing over the past 10 years hasn’t managed to get inflation off the ground, the ECB (with some gentle persuasion from the Germans etc.), may come to the conclusion that we’ve entered a different long-term trend and any attempts to get inflation off the ground will fail. They may then just decide to raise interest rates to at least solve one looming problem i.e. the pension crisis which is going to hit Germany many years ahead of most other eurozone economies.

This interest rate increase would result in an immediate fall of c. €150,000 in the value of a €500,000 property today, based on repayment capacity, all other things being equal.

Monthly repayments on a typical 30-year mortgage of €500,000 at 3% = €2,108.02

Monthly repayments on a typical 30-year mortgage of €350,000 at 6% = €2,098.43

Wouldn’t this relatively small increase in interest rates combined with lower wages and empty homes caused by a mass relocation of high wage IT jobs from Dublin to eastern europe result in such a fall or at the very least make it a very plausible scenario?

So, to sum up my assumption that a house in Dublin valued today at €500k may be valued at €150k in 2030 is based upon:

  1. €150k price fall due to a 3% increase in interest rates between 2020 and 2030.
  2. An additional €150k price fall due to the Dublin based multinationals relocating to eastern europe.

It’s an assumption. But, I think it’s based on very plausible scenarios. Maybe not. But no agenda, just interested in the signals.


#201

you are entitled to make any assumption you want but theories about house price levels in 10 years time are irrelevant to anyone who wants to or needs to buy a house in the near future. to say you believe that houses currently worth 500k will be down to just 150k is a huge assumption that can only be described as talking down the market for whatever your reasons are (you claim to have no agenda). there are no signals that can tell any of us what property prices will be in 10 years short of you having a time machine. any suggestion you make otherwise is just conjecture.

anyway to any one reading this thread -

  • if an opinion is not backed up with data or a verifiable fact then be weary of it.
  • any one who tells you they know what property prices will be in 10 years is not credible.
  • there are people using multiple accounts on here to try and reinforce or legitimise their convoluted opinions. no names named. this has happened multiple times over the years on the pin and the latest emergence is frustrating.
  • anyone who claims to have no agenda is not credible. everyone has an agenda. estate agents want a highly active market (not necessarily constantly higher prices). buyers always want lower prices. sellers generally want higher prices unless they are trading up and the higher prices would worsen their position re trading up. owners (who who are neither buying or selling) often want higher prices to validate their past decision of buying. etc. etc.

#202

Is it really a huge assumption that I believe the coming changes to the international tax regime may result in Dublin based multinationals relocating?

If they do leave, what Irish based companies do you believe will make up for the fall in employment numbers? What Irish based companies will be able to pay the wages that Google, Facebook etc. currently do?

If someone is making predictions about the future of the property market, they must make assumptions. If you believe multinationals will remain here forever and that interest rates will never ever increase, you’re entitled to that opinion.

However, I do believe I put forward some logical reasons as to why I believe interest rates will rise far sooner than many people believe and also on why I believe Dublin based multinationals may relocate sooner than many people believe.

Maybe I’m wrong. Entirely possible.