I thought the first part of Beta2's post was very interesting.
I wonder if many developers are scaling back their plans for next year in the face of continuing interest rate rises.
- Status
I thought the first part of Beta2's post was very interesting.
I wonder if many developers are scaling back their plans for next year in the face of continuing interest rate rises.
I was thinking about the same thing - maybe commercial property: a cosmetic surgery clinic
That is very telling that sentiment inside the building firms has soured so quickly. If we see a slowdown in building next year will many of the immigrants from the EU-10 head to some of the other countries which have opened up their labour markets thus causing even more vacant properties to appear.
This could turn far quicker than even I (a huge property bear) would have seen it being played out. Anyone buying in the current climate needs the men with the butterfly nets to nab them before they sign on the line which is dotted..........
liteweight
Registered User
- Messages
- 1,678
A four bed semi detached house in D4 sold for 2.435 million a couple of months ago. It needs total refurbishment! Since the auction it has remained empty. The reason, I'm told, is that the buyer is awaiting planning permission.
900k empty house was perfect, had already been done with new extension etc. One of the reasons we were so keen was that it was immaculate. Vacant for six months now, no skips or building mods going on.
In the Bank of Ireland Quarterly review for August '06 it mentions that in 2005, 54,000 loans were for new houses but there were 81,000 new house completions.
[broken link removed]
Could 27,000 new properties really have been bought with no mortgage last year?
Builders hanging on to 1/3 of their completions?
I'm comparing it to the dotcom bubble, IT graduates in the mid nineties were paid much more than they are worth, I'm simply saying that paying these relatively large wages to an inexperienced graduate is indicative of a bubble.
I can't see graduates from his course earning that kind of money in Ireland when the market corrects itself.
I don't know the specifics, but I don't think they had plans for Tallaght
P
phoenix_n
Guest
Was the demand not there for the residential apartments ?
Do you know if the apts where the completion dates were brought forward are all sold (deposit taken) ?
Theres a story behind this one. They were built by the guy who owns the Beaumount House. He tried to sell them himself and cut off the agents. He sold none. They sat there for 6 months when completed. Then Sherry Fitz got involved. They still didn't sell. Then the guy went around putting Sold signs on most of the properties and put some up for rent. Were vacent for another 6 months. Now they're being sold one by one. Seems to have sold a few. Yes they're way over priced. Word was you could have got one for €490k if you made an over. The 2 beds were/are even more outragous at €750k. Incidently this area is prone to high tide flooding and did so about 3 years ago.
That's exactly my feeling. Demographics made it and demographics have broken it. In the case of property demographics too will break it. You don't see the 90k per year immigrants propping up the pub business.
All you have to do is look around somewhere like Blackrock for a snapshot of how the pubs are struggling these days. 2 pubs gone since I returned to work in this area. Other pubs like the Dollymount House in Clontarf have closed down to be (subject to pp) turned into appartments. It had a very viable food business but no more than 50 people on a Fri/Sat night. It was one of the superpubs when I was turning 18.
CelloPoint
Registered User
- Messages
- 75
My family home is in Raheny, and I can tell you that very same story has travelled from D3 to D5. It's hilarious really the fact that yer man had to put up 'sold' signs on his flats! You're right about the flooding too. Wouldn't go near that ground-floor, one bed with a barge pole.
Hilarious!
CelloPoint
Registered User
- Messages
- 75
I'd say you'd be damn glad to have a pub in the future. Selling out to build apartments in the hope the property market is still buoyant in 2 year's time is a risky endeavour.
G
Guest107
Guest
The peak pub every night demographic bulge has already gone through. The number of 18 year olds in ireland peaked in c.1999 and these guys are now 25. While many are about to buy (after they pay off Australia don't forget) it is MOST likely that they will reluctantly buy into a falling market.
The immigrants will have gone because there is no more building . Thast what brought most of them here. The flippers will be dumpers
It was said of the dot com boom that 10 years worth of infrastructure was built in 5 years and took 5 years to work out of the system. The same is true of Irish property. A sustainable level of building in this decade was some 50000 units a year but we have built 80000 a year for 4 years (including this) on average and now have an overhang of at least 2.4 years building (120000 units) to work through.
By that measure we would reach equilibrium again in 2 or 3 years but ONLY if we build nothing . As we will still build something every year it will take 4-5 years of slumpitude before this equilibrium is reached. Thats my opinion anyway.
P
phoenix_n
Guest
I was thinking about how much i would pay for this place. I put a figure of 80K. Max 100k (over 25 yrs at 4% would be 530 a month). Future rental yields would be about 700 max a month i think as it is a very old property.
But that is how, IMO, such property could crash substantially in price. From 380K to 80K/100K.
just to follow on from a earlier post regarding number of properties for sale within an estate, i have heard of a particular agent in Blanch putting for sale signs outside properties they are letting on behalf of clients to get the name out and about
this has led to a bit of a panic amongst some of my neighbours thinking everyone is doing a runner!
this has led to a bit of a panic amongst some of my neighbours thinking everyone is doing a runner!
G
Guest107
Guest
Unlikely.
In peripheral areas property will fall as much as 50% from now. In better areas as little as 25% . Outer commuter belt is what I call peripheral. 30-50 miles out from Dublin and 10-25 miles out from Galway . Those kinds of areas will be savaged. No modern houses will drop below €150k except out the back of Ballivor maybe .
Dodgy apartments in the cities where the management fees and structures are loaded against the occupiers will also get it in the neck. I can see standard purchase contracts for apartments becoming very very strict and lots of litigation between apartment 'owners' and their management companies and agents and legislation to clean the whole mess up .
That will take years to sort out though , affecting the prices in some complexes very badly as apartment purchasers migrate towards transparently and fairly managed complexes.
Thanks for the link... Interesting reading.
When that 275,000 vacancy number first materialized from the CSO report I was a bit dubious because it seemed so high. With this data showing that up to a 1/3 of new properties may not be sold and anecdotal evidence that some investors are willing to hold on to properties without renting them out, that figure may not be far out after all.
I really have to laugh at their methods for working out affordability in that same report though:
Our own model compares the annual cost of servicing an average new mortgage
(with an assumed 25-year term) with average gross earnings. The latter is
calculated by dividing the total wages paid to employees by the number of
employees. In 2005, for example, this delivers a figure of €38,240, a 5%
increase on the previous year. Using an average mortgage rate of 3.5% and a
€200,000 mortgage gives a monthly outlay of €1,000, or 31.4% of average
earnings.
I can't imagine that many mortgages this year were taken out over 25 years. An average earnings figure of 38,240 seems excessive (the median might be more useful) and the mortgage rate given at 3.5% is no longer a realistic figure. Also to top it all off, suggesting that an average mortgage of 200,000 is a useful guage on affordability is a joke!
Even with these heavily skewed figures they are unable to hide the complete loss of affordability.
P
phoenix_n
Guest
I would not be so general in your percentages because it will differ from house to house. For example with over-supply the whisper of car noise from outside will render many properties undesirable when you have choice.
So what would you pay for the linked apartment ?
G
Guest107
Guest
You are right in stating that there will be variations Phoenix but you are WRONG if you think that the €80k-€100k semi is making a comeback anytime in this decade unless its situated beside a hardstand or under a motorway or something like that
. I have my assumptions , as stated, on average variations to do with distances, time of commute , cost of petrol , overhangs of properties in more desirable areas, etc etc.Even if an apartment complex was run by scum from hell developers it still has some value ...but maybe not much. Once some of them are badly flooded (and uninsurable for eternity thereafter ) they will go as low as €50k in some cases but that does not mean I want to swim either.
- Status