Selling a few 100 houses a year is not a recovery really is it. However carefully releasing a few mortgages to those prepared to bid higher on properties can have a profound effect.
Lending is highly concentrated in Galway Cork and Dublin ONLY nowadays and the simple object is to cancel out dragging cash sales in Castleblaney and the like by targeting those areas. As the cash sale areas are static at low volumes and prices they are not really a downward drag any more than they are an uptick…nor will they uptick.
This is not a recovery, it is a manufactured arresting of a long decline off an extremely low transaction base. Cork and Galway cities ( along with Leixlip / Celbridge / Naas / Drogheda will ) account for a ‘recovery’ in the rest of Ireland …on their own…by christmas. Just you watch the ‘Rest of Ireland’ go positive and stay there.
But it is working for now, lets see if Joe punter will want to believe in a recovery and act according, what what !!!
2Pac, you’ve made some good calls on the property market over the past 12 months. What do you see happening if it is a manufactured recovery…will it run out of steam or will it get the ball rolling?
Whats your take?
Cash sales are a midlands thing, eg Ballinasloe or Longford or Thurles are cash sale areas. The holiday home areas along the west coast are cash sale areas too. They tend to be in the €30k-€70k range.
Volumes are pretty small as are the amounts. Cash sales will be with us for many many years in the midlands where very few ‘mortgageable’ prospects are to be found overall and where emigration is biting really hard. The holiday home coastal belt will likely recover sooner than the midlands.
Downsizers are paying cash in Dublin and I don’t think this is too insignificant. When it comes to purchasing the smaller property, they’re not going to quibble over a few tens of thousands either… and they’ll blow potential mortgage buyers out of the water. Been outbid by a few already.
Was talking to a colleague at lunch who used to work for the CSO. He stressed that it would be unheard of for a Minister to turn up at the offices and discuss upcoming publications. Never happened. Ever.
The number of sales in the ppr vs the number of mortgage draw downs suggests the volumes aren’t actually pretty small. Depending on which set of figures, they have been between 30 and 66% over the last 2 years (volume wise).
The positives for the holiday home market are that the 10 year tax relief period comes close to running out, so they don’t have to be available to rent. Probably good capital appreciation. And, some would work as family homes.
But, there are just so many negatives. Still massive supply versus demand, lousy as a rental investment, weak holiday home demand in anything but strong economy and very poor mortgage prospects.
By way of contrast; I spoke with an economist from the Office back in early 2012 and they confirmed that on occasion it has been known for official numbers to be made appear as positive as possible from the Government’s perspective … nothing to the extent of their Hellenic counterparts, but they will slightly massage data within reason.
I don’t buy into this working prices up - if they could control things to that extent they could have prevented the crash being as big as it was. Also if people believe banks are doing this then why do they then say wait for the repossessions to drive prices down.
Seems that when statistics that are released don’t fit into notion of what people want to happen then they get looked behind.