House Prices Back at 2014 Price Levels?


#305

Yep
Demand continues to outstrip supply by the looks of it
And more lockdowns ain’t going to increase supply, that’s for sure!


#310

We all have different styles - and opinions - I don’t insult or abuse those on this forum who I (clearly) disagree with.

What did Joyce say about the old Sow?..


#312

Thats also a bit ‘weird’ in fairness.

Zero transactions would suggest the greatest crash in history has already happened and that prices simply dont reflect that fact yet. But I doubt thats what youre trying to convey.

It seems likely that wider economic factors will impact upon both potential buyers’ ability to come up with deposits/repayments and the banks willingness to lend.

It doesnt appear to have happened as of yet but the likelihood has to be that it will happen sooner rather than later.


#315

Logically, one would expect future price drops. Whether or not they materialize, we will have to wait and see. The same could be said about broad financial markets (equity, fixed income, credit markets), but they continue to defy economic logic and gravity!

What we can say with certainty now, is that based on available data, property prices are not back to 2014 levels. In fact, they are up circa 5% since this thread was initiated.


#316

Supply v demand.

If supply stayed the same as pre Covid, prices should drop as people losing jobs, pay cuts, etc

But supply has dropped and demand still remains in certain locations, even if reduced, so prices aren’t dropping in those locations


#317

I reiterate some comments I made earlier on this thread - speaking with solicitors working in conveyancing and staff working in bank lending, they are saying they are dealing with unprecedented levels of mortgage applications. Completely anecdotal, but interesting. Suggests the demand is still there. But lockdowns will only dampen already low levels of supply.


#318

Glenveagh attracts growing hedge-fund interest


#319

Within the theme of the “madness of the crowd” i.e. panic, someone posted an insight on the forum that to my mind explains things reasonably well (maybe it was you @live_wire !), in terms of price dynamics and what is behind it.

That is, people are going for it, they forsee or sense, that in the not to distant future, they may not be in the same position to get or extend mortgage approval, even in more normal calmer times you will encounter this outlook (since it is time delimited approval, what is the norm 6 months?).

So what looks like confidence now, is most probably utter panic with a brave masked up face on and I’m not talking Warren Buffet brave.

Many may see this is their last chance to jump on the ladder before things get worse due to the cure being far more destructive than the disease. I never said it was logical, but it makes sense considering past performance and the kind of abusive relationship between the people and their successive governments on the island.

Since the island is utterly bereft of genuine leadership, a less homogeneous identity, generally fragmenting demographics and basically any kind of vision other than death, death, death, i.e. something other that the imposition of a wholesale outsid agenda, then naturally people react and scurry to make good and protect their interests (families) as best they can or have resource to in the moment, as they sense that absolutely total and utter lack of leadership and vision at the top, which eventually leads to a brutal bust, they can at least get a roof over their head and baton down for the oncoming storm.

There is a lot of talk about “herd immunity”, but here what we might be seeing is the herd’s self preservation instinct kicking in in the final stages manifesting as some positive activity in the market, a false positive no less.

In short, FOMO.


#320

I agree!


#323

To be fair, while we may be bickering and nitpicking, we seem to be in broad alignment

Agreed.

Agreed - very difficult to sell in this climate

You were right - we now know this is fact!


#324

Is that your best shot?


#325

As at the end of August Bank Balance sheets were holding steady. I.e. Any new lending is broadly offsetting the paydown of the Mortgage Books.

In net terms loan books are down Sept 2019 vs Sept 2020. So lots of applications maybe but it is all relative and how many of these turn into drawdowns is another matter with PUP payments sullying the record of a sizeable cohort in the eyes of the Lenders.


#326

I hope this isn’t too ‘weird’ for you lads


#327

From your article…

The underlying trend combined with the fall-off in economic activity and consumer demand arising from the pandemic will see prices here decline by 1.6 per cent this year and 1.1 per cent next year, S&P says.

However, house price growth is forecast to pick-up again to 4.6 per cent in 2022 and 4.2 per cent in 2023

‘Sell Sell Sell’ indeed.


#328

I’m going to have to say it again - you have to remember that asking prices are only an indicator of what people think they can sell their property for. The only real close-to-real-time figures that we have are the sales prices in the PPR. The CSO do a pretty good job in smoothing out these figures into one that has a stronger relevance to the house that most people end up buying - but that is a heavily retrospective figure.

Median asking prices don’t generally move in lock step with median selling prices achieved - since May last year the median Dublin asking price has not moved out of a band between 395 and 400k but the median selling price (smoothed over 6 months) has varied between 325 and 360 - it was 360 in January and it’s 360 now - it fell as low as 340 in between.

On stock and sales - this time last year there were around 5600 properties for sale in Dublin, there are now around 4400. There were around 370 to 380 sales per week then - in September this fell to about 220 a week but it’s now back up to about 250 per week. So the 5600 represented 15 weeks stock last year - the 4400 represents 18 weeks stock at current sales rates.

The high end of the market is tiny - over 700k is 5 or 6% of the market - you won’t see much there to indicate general market trends.

In a speculative market rents can be a driving force to people pulling out. I don’t think we are in a speculative market mainly because I don’t see the stock for sale rising dramatically. If you look at ‘The Pretty Charts Thread’ you’ll see that rents are only back down to 2016 levels. Many of those ‘investing’ in rental property probably did so based on 2016 or earlier figures. The last 4 years has just been gravy. That’s not to say that the Dublin market isn’t overpriced - it is - see here for examples in the UK (also an overpriced market by the way) - https://www.loveproperty.com/news/86696/this-is-what-you-can-rent-for-1000-pound-in-cities-across-the-uk.

House price crashes tend to be a slow burn - I went back to look at the UK crash when we were going though ours - I was surprised how slowly prices fell - they took 4 years to fall 20% in the 1990s. In the 2000’s crash Dublin took 6 years to fall 50% - there were a couple of big lurches but that crash was particularly focussed on property , and even more narrowly on speculative property investment backed by essentially ‘free’ money. Property is not a liquid market - even in the good times only around 5% of the stock moves per year - the last few years its been 3 or 4, this year looks like it will be around 2%.

Another factor is that many of the people in the market for a house are still working, and more importantly still getting paid. They may also be paying less rent, selling their cars, saving on transport, lunches and entertainment. A couple could easily be saving an extra 2k per month in this climate - with a 10% deposit that’s 20k more in their house budget every month.

I believe the realistic long term median price for a house in Dublin should be around 250k but psychology in relation to property prices and a political will to support it is always conspiring against that. The only thing that will change that are in an increase in stock and a substantial buffer of social housing which will reduce massive price fluctuation and FOMO.


#329

Very good point. Even if rents drop another 10% (which is probably unlikely in the short to medium term IMO) it will not cause many investors to sell up. From what I read on boards more are inclined to sell as they are sick of being a LL and many are now back above water so probably are in a better position to sell if they so wish.


#330

salaries in dublin would need to drop a lot for the median house price to drop by 30%


#331

Entirely possible given that the two sectors responsible for high wages in Dublin are currently under threat.

Multinational employment may be under threat from the new OECD tax reforms and the EU’s proposed CCCTB. Also, WFH may impact Dublin based multinational employment more severely as most are working in offices. Workers employed by multinationals based in other parts of the country may be less impacted as many of their workers are employed in manufacturing type activities.

The state is the other big sector responsible for high wages and probably can’t keep adding high paying jobs due to budget constraints from 2023 onwards.


#332

i dont share your pessimism nor do i agree the state are responsible for high wages.


#333

Very informative, thanks. My ongoing experience is in looking at houses in the >600k market in Dublin and when following up on houses viewed I am continually told they have gone SA above asking, in some cases substanitally so. Agreed that represents a small part of the overall Irish housing market but again based on what you say, it’s difficult to see a crash in the medium term in Dublin.