Myself and my OH, as per my above post are renting in malahide in the hope of one day (it will be one day at this rate) buying a house there.
Alot of what you say is true - the house we are looking at in the areas you ve mentioned are 400k+ for a 3 bed semi, its just madness. I will not tie myself to taht level of debt for such a house. Prices seem to be very slow to fall if at all.
What i find more amazing is the amount of sale agreeds in the area in the last 6 months - what idiots are buying these houses at circa 400k. It is these people that are killing (driving) the market.
We will continue to rent for the forseeable future anyway.
On another note skerries seems to be much the same kellys bay excluded. If you actually look at the houses in skerries kelly’s bay excluded they are probably more overpriced than the ones in malahide.
I personally know one of these idiots, I tried my very best to convince him otherwise, sent him all of DMW’s article for the last few months, Morgan Kelly’s paper on the credit bubble, explained the fundamentals such as higher taxes, unemployment, emmigration, over supply, the end of the mortgage moratorium, real prices based on the CPI, the cycle of market emotions and examples of previous booms and busts but to no avail, he was having none of it, the guberment says that everything is on the up and that’s good enough for him, there’s great value out there. And the worst is he sees it as a starter home only and thinks he will be able to sell on in 5 years at a profit. There’s just no telling some people. He payed 385K for a semi-D in Seabury…
I don’t agree about driving the market, personally the quicker these people by up and get off the fence the quicker we’ll hit bottom. Right now sellers believe there is pent up demand (which there is), the sooner that goes the better and real supply & demand can take hold.
You all want to live in nice semi-ds or detached within walking distance of malahide and you are surprised at the prices even now being paid etc
its simple - there is decent demand for these from people like you and there is not unlimited supply even in hard times. Sellers will only sell these if they are deperate or if they are moving up the chain and banks will prefer to rent them out rather than dump them on the market.
This is all taking place against the background of a non existant banking system.
It probably all is in the asking price discount - if you can discount say a further 10% or 15% fall in prices to over 50% off peak then you are starting to get to a good deal.
once the banks fix themselves in ireland and see some improvement in economy globally and locally they will be more inclined to lend to property in malahide than almost anywhere else in the country. What will happen then is sellers will not be prepared to discount the asking price…prices may fall another 10% but the vendor will only accept the asking price.
I know we cannot see it now but rents will rise at some point in prime Dublin.
So it’d the Good neighborhoods will always have high demand argument, your right, they will, but let’s just focus on two of the fundamentals, increased taxes and increased interest rates, both of these WILL happen and will decrease the affordability of houses for EVERYONE in this country and that means prices WILL come down in these neighborhoods, in 2 or 3 years from now I know I will be less able to service a mortgage than I am now as will 99% of the populace. You’d have to be crazy to pay the current prices and base your payments on your current affordability.
You think rents will go up also, is that because of the influx of migrants, the 6000 people a month that are gaining employment, the increases in salaries and the under supply of properties available for rent? And if you think there is an over supply now, wait till the mortgage moratorium ends, and that won’t just effect new builds in the arsehole of nowhere, it will apply to property in all areas. How many architects, accountants, PS workers and Solicitors etc payed way over the odds to live in these areas and currently cannot service their mortgages due to job loss and pay cuts, enough to make a difference to the market I’m sure.
The only reason people are buying these now is because there is pent up demand, people who already have deposits and feel they MUST own a property and can no longer sit on the fence, with the banks stricter lending practices, I wouldn’t be surprised if we see 80% LTV only in the next few years, and for the reasons above regarding decreased affordability it will become more and more difficult to save deposits.
We are willing to pay a premium for nice areas like Malahide but that premium has it’s limits, I’m willing to pay 20-30% more or thereabouts which is the traditional valuation but certainly not willing to pay 2, 3 or 4 times more nor will I be able to with whats coming down the line.
The only thing that will raise rental rates is inflation but that’s not an increase in real terms.
Jesus, some people on here go on like the supply/demand fundamental has only just come into existence here in the last few years.
wakey wakey, there has always been a demand to live in places like malahide, south dublin etc, even before the bubble. Pre bubble prices reflected economic realities, and so too will post bubble prices, it is inevitable.
But hey, if someone wants to spend half a mill on a 3 bed semi that is their choice and they represent the market in its current dysfunctional state.
I know. For example I know someone that bought a house for 20% above the average in 1990, it was 20% above average because it was in a nice area in Clontarf. She concedes that average house price will most likely come down to it’s historical norm, about 120k (the precise figure is debatable) but when I say her house will fall to within 20% of the average house price she refuses point blank to accept it, she thinks 3 - 4 times the average house price, why?, because it’s in a nice area where there will always be limited supply and big demand to which I always reply, “Why, has your house moved location since you bought in in 1990?, it was a good area then and it still is, but no more so than in 1990”. Some people just don’t seem to get it. The other argument I get from these people is that the oversupply of new homes won’t affect the more mature areas, NONSENSE, of course it will, yes we’d all like to live in a nice mature area but we’re not going to pay through the nose to do it when we can pick up a property further out of town for next to nothing!!
And the figures I give above are using historical norms, they don’t even take into account the extraordinary situation we are in now with massive over supply and vast debt levels.
Her house was valued at 1M in 2006 so a drop of 80% - 85% is unfathomable to her, she was a millionaire in her eyes, even though it was for doing nothing. It’s understandable that people find it hard to accept this new reality.
I really believe we are seeing something of a false-bottom in the “premium” areas of Dublin at the moment.
I enquired about a house that has been on the market for some time - needs a lot of work - it now seems to have something of a bidding-war going on, and my guess is that it will sell at approx 5% below asking (when I might have been interested at 15-25% below). If the EA is to believed, there are 4 bidders at this level. I’m pretty staggered that there are still this many people interested in spending this kind of money, and then ploughing in another 100K or more after. I can’t believe this will continue for very long. I think there are a good few people on the fence (like myself) who have a bit of cash in the bank and are tired of renting. But once these people jump in (and they seem to be jumping in a big way lately) the market will tank again. So for that reason I think I’ll be sitting it out again until 2011. No sense in getting into bidding wars at this stage.
I think people really and truly don’t understand the catastrophic mess this country has gotten itself into, and they think it will all be OK. They are buying based on today’s affordability, not factoring in the invevitable interest rate rises and tax rises on the way. But “value” vs 2006 prices is not good enough for me - it’s still scary money for average houses. And at the rate things are going I would still like to stay in Ireland, but I’m not sure that’s going to be feasible either, as there are only so many bailouts this prudent saver is going to shell out for before hitting the road!
If I’m wrong… well I’ll take that chance. I can’t see any rational reason why prices would rise in the forseeable future, even in Malahide, Dalkey etc.
Yep, seems like it. I am in the middle of getting mortgage approval but I have been looking around some good areas and the poorly built, small houses are all available (for a big price) and anything decent is going sale agreed. I still hope to find somewhere nice this year, at the right price, but I am beginning to think more & more that I should hold off another year
The thing that I don’t understand is why people seem to think that these nice areas are so rare. Dublin is absolutely full of very nice, pleasant areas where anyone could feasibly have a lovely quality of life and safely raise a family. I got in a bit of an argument with someone about this a few years ago and off the top of my head could name over 20 areas in south Dublin that anyone could have a very content life in and I know I left plenty of places out.
Sure people will have preferences for certain areas based on proximity to their family, friends, jobs or particular schools/amenities. But all those things are personal and just as many people would prefer Templeogue over Malahide and vice versa for these reasons. Neither has a priority spot in the market just because of your personal preference.
Out of town might be going for nothing but most people will not want it. This is even more so now. What is going to happen is a strong risk aversion regarding property hence people will focus even more on good areas.
This will come both from the buyers and from their lenders - liquidity in better areas will be much higher and furthermore buyers will tend to skip a rung on the ladder
A first time buyer couple is probably far more likely to buy a starter home (3 bed semi with poor decor etc) in a good area now than some flash apartment out of town. They would be better off renting the flash apartment out of town for cheap rent and saving towards the starter home than buying one.
Irish people have never learned the rule of bidding - there comes a price when you have to keep your hand in your pocket even if it means the other person getting the house for only a small amount more. Bidders, know your limits! In particular with a rebuild/renovation, as costs have a nasty habit of escalating. I think this is a legacy of the “stretching yourself” myth in the bubble. I also think it will take some time to work out and isn’t really going to happen until the banks, or more likely the regulator, gets serious about what people can really afford.
'Course, if we get a bout of inflation big enough to increase competitiveness here (i.e. we stand still for a while, everyone else gets paid more) and then some, you might do well for stretching. That does, however, require a european-wide inflation.
The problem I have with Malahide - and I used to live in Portmarnock and drive through the place often enough - is that it’s not that great a place to live. the traffic is horrendous at rush hour, parking at the train station is awkward, shop wise it’s got some boutiques but grocery wise…meh. You’ll be going to Swords until the M&S opens (if).
In short, given the money to buy in Malahide I’d buy in Clontarf instead.
Its not just Malahide, so many places have a local psychological phenomenon aka the “I’m worth it” complex. It really is pulling the piss at this stage.
Considering the majority of people on this Island are financially illiterate it is not surprising they will use whatever value system in place of a sound financial or proven metric to asses value and price of intended purchase and area.
My advice is offer 40% off the value of anything rent or for sale. Make it a habit. Everyone make it a habit please hurry the correction along for all our sakes.
I think there are a number of things happening as far as the so called “good” areas are concerened. Someone has already mentioned a retreat from outlying boom developments to established mature locations. Another factor has to be down to the fact that 20-somethings and even 30-somethings are, either staying put due to unemplyment, longer spells in further education or moving back to the parents home - possibly from rented accomodation. I can think of at least three examples where this has happened, including one where a son and daughter - both in their early 30s appear to have moved back in with their widowed mother. Also don’t forget the Fair Deal Nursing Home Bill which means the family home doesn’t have to be sold to pay for care until the elderly parent dies.
All of the above mean less reason to sell - thus fewer houses on the market.