Property Crash

[dahamsta]

Shortage of houses my hole.

[OneRedArmy]

Hooke McDonald announced that there would be a shortage of houses in the need future because Builders had ceased development! mmm EA coming out with this let me think is there a hidden agenda in sight!!!:rolleyes:Snake oil salesmen have more credibility.

A) builders haven't ceased development

B) second hand market is falling over with supply

The estate agents don't seem to realise (or won't believe) that the Irish obsession with property has run its course.

[Sam_Heggy]

I have a letting agency/ property management company in Letterkenny. Basically the last 3/4 years have seen a steady drop in the price of rentals in the area, yet the sale of properties was growing stronger and stronger.
Now for the first time in 5 years the price of renting is increasing and the sales side has dropped. Value of houses are decreasing due to lack of investors coming in.
The balance was just not adding up, it will take a year or so at least to sort itself out.

[dahamsta]

Sam_Heggy, are you finding that people are paying the let prices asked, or haggling? The asking prices seem very high to me atm.

adam

[OneRedArmy]

I have a letting agency/ property management company in Letterkenny. Basically the last 3/4 years have seen a steady drop in the price of rentals in the area, yet the sale of properties was growing stronger and stronger.
Now for the first time in 5 years the price of renting is increasing and the sales side has dropped. Value of houses are decreasing due to lack of investors coming in.
The balance was just not adding up, it will take a year or so at least to sort itself out.In Dublin rents picked up about 2-3 years ago and are now falling again.

I'm paying 50% less in rent in Dublin than I did in London for an apartment thats valued at 50% more. I can't reconcile it at all. And I work in banking.

[strangeirish]

Story of what's going on in the Kildare Market. (http://www.kildare-nationalist.ie/news/story/?trs=cwqlauqlkf&cat=news)

[OneRedArmy]

Story of what's going on in the Kildare Market. (http://www.kildare-nationalist.ie/news/story/?trs=cwqlauqlkf&cat=news)The commuter belt market is very easy to explain. People moved out of Dublin to get a bit of space to start families and didn't take too long to realise that they didn't really like having no social life and sitting in their cars for 4 hours a day.

I'd be surprised if these areas stop falling at 20%, whereas anywhere near Dublin City Centre I would say should be relatively protected (ie shouldn't drop much beyond 20%).

[Saint Tom]

in my job we have seen a spat of properties being offered to us as security for long term mortgage which were due to be sold on completion. Developers cant shift what they have built and the numbers of new completions is way lower than even worse guesses. The credit crunch has also had the impact of lowering demand and common sense prevailing. There is certainly value to be had at the moment and I reckon things will hit bottom by september and then start to level. WIll all come down to location etc if houses are to keep some form of value.

[Sam_Heggy]

Sam_Heggy, are you finding that people are paying the let prices asked, or haggling? The asking prices seem very high to me atm.

adam

The majority of people are paying the rent asked.
Its extremely busy at the minute. I had 2 people work for me up until Christmas hols, I now have 4 to help cope with the extra demand.
The average time a house spent vacant in Letterkenny last year was roughly a month, its now around a week. (obviously depending on the property)
The prices are dropping rapidly of late for purchasers so when it stops to drop then is when I predict the market to level itself out. We're talking about people taking maybe €20k less for their property than they did this time last year.


In Dublin rents picked up about 2-3 years ago and are now falling again.

I'm paying 50% less in rent in Dublin than I did in London for an apartment thats valued at 50% more. I can't reconcile it at all. And I work in banking.

Oooohhh Derry fan AND a banker :eek: Must be tough to make friends.

[dahamsta]

I just got a cracker in east Cork, 4 bed for €850/month, but yerman was dying to shift it and they love us as tentants because we're a lovely stable couple. (Little do they know!) Should have gone for €950, which is what a lot of 3 beds in the same estate are listing for! I don't think people willl get that though. That being said, I reckon going by what you're saying the market is a lot different down here at the moment. Some lets - good lets - are sitting on DAFT for yonks.

Purely out of curiousity because I'm in the (web) industry and working on a property-related project, how much of your business comes from the web these days? I get the impression that it's quite a large majority, am I mistaken in that?

adam

[osarusan]

I just got a cracker in east Cork, 4 bed for €850/month.... Should have gone for €950, which is what a lot of 3 beds in the same estate are listing for! I don't think people willl get that though.
East Cork city or countryside?

Sorry to kind of hijack the thread with this post, but I've been looking to leave Japan in the next few years (or even sooner, maybe this year), and Ireland is one of the places we're considering, obviously.

But some of the prices I've seen listed here, and on any other site I've checked, are shockingly expensive, more so even than a decent sized apartment in Tokyo.

Does the rent get much cheaper in rural areas, or is it uniformly expensive no matter where you are? I have to say that my plans of coming home have been dealt a real blow with all these prices.

EDIT : Can anybody point me in the direction of a website which will give me a decent idea of prices in Ireland?

[Block G Raptor]

www.daft.ie

[dahamsta]

East Cork city or countryside?County. It's a 30-45 minute commute, depending on time of day.

adam

[KevB76]

Sorry to kind of hijack the thread with this post, but I've been looking to leave Japan in the next few years (or even sooner, maybe this year), and Ireland is one of the places we're considering, obviously.

If you are intending to find a place through the usual official channels (i.e. letting agent) you will find that they cant do the usual background checks on you which may be an additional obstacle to finding a place. Landlords who use rent-guarantee insurance will not be able to get cover for your tenancy. To get around this, for example, you may be asked to pay 6 months rent in advance :eek:

[Sam_Heggy]

I just got a cracker in east Cork, 4 bed for €850/month, but yerman was dying to shift it and they love us as tentants because we're a lovely stable couple. (Little do they know!) Should have gone for €950, which is what a lot of 3 beds in the same estate are listing for! I don't think people willl get that though. That being said, I reckon going by what you're saying the market is a lot different down here at the moment. Some lets - good lets - are sitting on DAFT for yonks.

Purely out of curiousity because I'm in the (web) industry and working on a property-related project, how much of your business comes from the web these days? I get the impression that it's quite a large majority, am I mistaken in that?

adam

Yeah, I deal with a few investors from Cork who reckon its easier to let in Letterkenny but Cork is making much better money.
€850 per month would get you as real quality let up here at present. Average price is roughly €700 pcm.

Alot of my business comes from the net alright, mainly through Let.ie. Local paper adds still would bring in the majority of tenants.

[dahamsta]

Think I'll stick with east Cork tbh. Letterkenny'd be a bitch of a commute. :)

Why Let.ie I wonder? I would have ranked the property sites with Daft on top and MyHome a lagging second; wouldn't even have ranked Let.ie tbh.

If you don't mind answering of course!

adam

[Sam_Heggy]

Think I'll stick with east Cork tbh. Letterkenny'd be a bitch of a commute. :)

Why Let.ie I wonder? I would have ranked the property sites with Daft on top and MyHome a lagging second; wouldn't even have ranked Let.ie tbh.

If you don't mind answering of course!

adam

I got a pretty good deal ;) I know someone who knows someone :cool:

Sure if ya don't mind a 7 hour drive to and from work then Letterkenny would be ideal.

[dahamsta]

I got a pretty good deal ;) I know someone who knows someone :cool:Ah I see! That's how to do it alright!


Sure if ya don't mind a 7 hour drive to and from work then Letterkenny would be ideal.Well, I was talking to a guy yesterday who commutes from Wexford to Sublin every day, so there must be something in it. Not for me though!

Thanks for the info.

adam

[Sam_Heggy]

Well, I was talking to a guy yesterday who commutes from Wexford to Sublin every day, so there must be something in it. Not for me though!

:eek: Jebus he must be getting a euro per mile to make that journey worth it.

[dahamsta]

He's the CEO of a brand name you'd all be aware of, the cost isn't an issue. :)

[onceahoop]

Yeah, I deal with a few investors from Cork who reckon its easier to let in Letterkenny but Cork is making much better money.
€850 per month would get you as real quality let up here at present. Average price is roughly €700 pcm.

Alot of my business comes from the net alright, mainly through Let.ie. Local paper adds still would bring in the majority of tenants.

Maybe it's easier to rent in Letterkenny because of the student population.

Would that be a factor Sam?

[Sam_Heggy]

Maybe it's easier to rent in Letterkenny because of the student population.

Would that be a factor Sam?

Tbh, I would only have maybe 5/6 properties (out of approx 130) rented to students. The area around the LYIT (Gortlee) would be popular for students but there rest of the town wouldn't really be convenient for most students.

Eastern Europeans (polish, Slovakians, Lithuanians, etc) would be in the high percentages in the local population, I would have around 20+ properties let to them. (I know it sounds bad to label "them" but its just easier to say "them")
There is other agencies in town that would except "undesirable" tenants, the council would pay the majority of their rent so it suits the agent better. Personally I'd prefer to have the place empty.

[OneRedArmy]

Just to come back to this thread in the light of todays ESRI findings that we are in recession.

The concept of a "Soft Landing" is the construct of bankers, estate agents and other "interested parties" whose predictions seek only to serve their own interests.

There has never been a soft landing before, anywhere. All economies go in cycles, where a downturn follows expansion. The amplitude and length of the cycle varies, but its still a cycle.

Of course the same people will blame the recession on the US and the credit crunch, when this is very much a secondary effect.

Expect interest rates to rise over the summer at least once and probably twice.

Very gloomy outlook.

[Reality Bites]

Shame to see Estate Agents Lisneys ask staff to take a 10% pay-cut, I guess the free drinks in Ron Blacks on a Friday night are a thing of the past!;)

[OneRedArmy]

Shame to see Estate Agents Lisneys ask staff to take a 10% pay-cut, I guess the free drinks in Ron Blacks on a Friday night are a thing of the past!;)Its an interesting approach, quite socialist.

If I worked there I'd prefer them to get rid of the bottom 10% as many US companies do (GE etc.).

At any rate, the sale of loud chalk-stripe suits, purple ties and Mini Coopers must have crashed.:D

[Lionel Ritchie]

Expect interest rates to rise over the summer at least once and probably twice.

Very gloomy outlook. I was in a bank on friday last discussing a mortgage and was told they're expecting 3 interest rate hikes and consequently they have already bumped their rates by .4% in anticipation.

[OneRedArmy]

I was in a bank on friday last discussing a mortgage and was told they're expecting 3 interest rate hikes and consequently they have already bumped their rates by .4% in anticipation.The recent mortgage rate rises were due to the dislocation of the interbank funding rate from the ECB rate (increasing risk premia due to credit crunch). This has particularly manifested itself in the tracker mortgage market which is now priced aboved the standard variable rate.

That doesn't mean they won't go up again when the ECB raise rates though!

[Poor Student]

I was in a bank on friday last discussing a mortgage and was told they're expecting 3 interest rate hikes and consequently they have already bumped their rates by .4% in anticipation.

Which bank told you that? As ORA just said, banks are increasing their own mortgage rates due to the increased cost of borrowing on the interbank market. Banks will only increase their rates again when the ECB rates go up and I'd say they will go up .25% in July and at least one more time before the end of the year.

Lending conditions have stiffened and there's now a lack of resources in the banks to lend out the cash. All this is going to shrink the supply of cash available for the Irish public to throw at properties and help force prices to decrease as they have been doing for some time now.

[Student Mullet]

The Crash is getting even crashier.

[seanfhear]

how does property crash,whos driving it,they must be very careless as it rarely moves.When i am out and about i rarely have to look out for carelessly driven properties

[OneRedArmy]

The Crash is getting even crashier.Didn't the estate agents say 3 months ago that we were plateau'ing and that prices would move up soon and the level of interest in new developments that had re-priced was unprecedented.........:)

[Lionel Ritchie]

Which bank told you that? Allied Irish Bank

[jebus]

:eek: Jebus he must be getting a euro per mile to make that journey worth it.

I wouldn't have a clue to be honest, I'm a public transport kinda guy



:)

[pete]

I hear that economist guy Bacon is doing the whole "I told you so" routine. He must be the back seat driver...

[OneRedArmy]

I hear that economist guy Bacon is doing the whole "I told you so" routine. He must be the back seat driver...
Lots of people can now do the "I told you so" routine. McWilliams, the Economist magazine amongst others*. No reason why they shouldn't.





*Me also. But I have very little schadenfreude as I'll suffer financially like most people.

[Royal rover]

i was in cork about a month ago - this topic is something i don't alot about in recent times as i live in the uk - but basically i was talking to a developer - i asked him what was going on in terms of the housing market - he said basically that this day has been coming for a long time and he believed that "greed amongst builders/developers" was the prime cause ,any thoughts

[Angus]

"Crash" is a word I struggle with.

For example if the value of something is 100 and in 10 years it goes up to 600 but in year 11 it drops to 550, the word "crash" is a leap

There is clearly a drop off the the utter insanity of growth in house prices but while in isolation in the last 12 months there has been a signifcant drop, looked even in the medium term, crash is a leap

Having said that, if you bought 12 moinths ago, you have a negative return - if you bought 10 years ago you still have a massive profit

So my post really tells you nothing - I'll get me coat.......

[Sam_Heggy]

"Crash" is a word I struggle with.

For example if the value of something is 100 and in 10 years it goes up to 600 but in year 11 it drops to 550, the word "crash" is a leap

There is clearly a drop off the the utter insanity of growth in house prices but while in isolation in the last 12 months there has been a signifcant drop, looked even in the medium term, crash is a leap

Having said that, if you bought 12 moinths ago, you have a negative return - if you bought 10 years ago you still have a massive profit

So my post really tells you nothing - I'll get me coat.......

Problem is though, there is property up here for example that, when bought new a 3 bed semi in a good area was sold new 3 years ago for €210k the same property is advertised with estate agents for €195k as guide price.

[pete]

I love the way the media churn out the "E3m home now going for only E2m". Like who gives a...?

I presume some homes are selling or all the Estate Agents would have closed? My definition of crash is when cannot sell anything.

I wonder are investors buying now? Just like shares best to buy in the slump. Will prices increase again?

[KevB76]

I wonder are investors buying now? Just like shares best to buy in the slump. Will prices increase again?

Wouldnt have thought investors will buy now - obviously better to buy at the beginning of the rising cycle, not at the end of it.

Prices will rise again, but you'll have to wait 7 years, give or take, for the cycle to repeat again.

[Poor Student]

I presume some homes are selling or all the Estate Agents would have closed? My definition of crash is when cannot sell anything.

Of course some stuff will always sell. However, the amount of properties for sale has been increasing steadily over the past while indicating that stocks in general are not shifting.


I wonder are investors buying now? Just like shares best to buy in the slump. Will prices increase again?

Quite the opposite, specuvestors pulling out of the market are reducing the prices as they were helping fuel inflation. Beware of a dead cat bounce in a cycle. It's nowhere near the bottom yet.

[Lionel Ritchie]

I presume some homes are selling or all the Estate Agents would have closed? My definition of crash is when cannot sell anything.
I wonder are investors buying now? Just like shares best to buy in the slump. Will prices increase again?

I'm told we're approaching that situation with property ...or property in a particular price band at least. I visited a spanking new showhouse last weekend where they've cut the asking price from 360K to 315K.

Two of the houses I've looked at in recent times have been on the market for nearly 12 months. They're priced in the 350k region and I'm hearing that not only are the asking prices dropping but they're just not getting any offers at all. Peoples confidence is through the floor in terms of job security etc.

On the other hand my own house is on the market a little over a month for under 200K and with minimal marketing we've two offers of the asking price.

[pineapple stu]

There's a set of flats down the road from me that have been on offer for at least a year, and not one of them has gone yet.

[cheifo]

A year down the line there should be some good deals going, but will the Bank lend you the dough, and what kind of interest rates will you be paying?
Hard to see the Banks been so eager to lend to speculators in the near future particularly with the rental market in decline.

[Poor Student]

A year down the line there should be some good deals going, but will the Bank lend you the dough, and what kind of interest rates will you be paying?
Hard to see the Banks been so eager to lend to speculators in the near future particularly with the rental market in decline.

A good deal in the context of what though? 2006 overvalued prices?

On banks lending to speculators. PTSB, one of the major players in the mortgage market, have pulled their buy-to-let mortgages. http://www.rte.ie/news/2008/0620/mortgage.html

Also, on Pete's point about estate agents closing, Lisney have asked employees to take a 10% pay cut. http://www.rte.ie/business/2008/0620/lisney.html

[dcfcsteve]

Problem is though, there is property up here for example that, when bought new a 3 bed semi in a good area was sold new 3 years ago for €210k the same property is advertised with estate agents for €195k as guide price.

A 7% drop in three years....?!

That's some crash...... :eek:

You wouldn't even scratch your bumper with that sort of slow motion impact...

[dcfcsteve]

The difference between the property market in England and Ireland is very illuminating.

The decline in Ireland started earlier and has gone deeper. It appears primarily to have been triggered by a relatively quick change from under-supply to over-supply in the market.

On the the hand, Britain has been incapable of addressing its housing under-supply problem (more homes were built in the Republic in 2007, for example, than in all of Britain - despite a population almost 15 times bigger there) which, coupled with cheap credit, drove the last property boom. What is screwing the property market in Britain now is largely the latter of those two market drivers - the mortgage situation. There is still a lot of pent-up demand - it's mostly just struggling to borrow at rates it feels comfortable with, or waiting to see what happens.

American banks have a lot to answer for.

[OneRedArmy]

American banks have a lot to answer for.I'd widen that to banks in general have a lot to answer for.

They are now reaping what they sowed in terms of the CDOs, CDS' and a lot of the other financial sleight of hand that was supposed to distribute risk more effectively (reminds me of the saying that when you're playing poker and you can't work out who the mug at the table is, its probably you). One of the interesting stats is that whilst sub-prime mortgages were a US phenoma, European banks (the mugs at the poker table) bought most of the packaged stuff thats now defaulting.

BUT, in Ireland and UK we have the additional problem of mortgages that originated as prime, but are now sliding into sub-prime due to affordability issues. That is much, much more of a problem for our economy and we can't really blame America for that.

[monutdfc]

There's a set of flats down the road from me that have been on offer for at least a year, and not one of them has gone yet.
See, that's where they're going wrong. If they advertise them as apartments they'll flog them in no time :D

[Reality Bites]

DEVELOPERS START TO PANIC

Two of the country's leading property companies are offering home buyers interest-free loans in an attempt to stimulate activity in the housing market.

Glenkerrin Homes, run by developer Ray Grehan, and Radora, which is controlled by Bernard McNamara and associates, are offering packages to assist would-be buyers at key Dublin locations.

Builders step in where lenders fear to tread; a lack of money and a lack of confidence - that is how Ray Grehan of Glenkerrin Homes assessed the problems in the housing market.

AdvertisementFellow developer Mr McNamara's apartment development in Elm Park in Dublin 4 has already seen prices fall 20% to attract buyers.

Radora is now offering interest free loans of up to 30% of the selling price to be paid back within five years.

According to a statement, Glenkerrin is stepping in to help out those no longer able to secure loans of up to 95%.

Potential buyers of its properties Stillorgan, Ballinteer and Lucan will have to pay 5% of the asking price. They can then avail of an interest-free loan of 15% of the price to be repaid in seven years.