Current public sentiment towards the housing market?

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Sidewinder said:
It was the appearance of the (huge) Advertiser property supplement about a month ago that convinced me this bubble has hit bursting point. I seem to recall the same thing happening with the English newspapers just before the 89/90 crash...
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A friend of mine has just bought in the Knocknacara area of Galway (not sure for how much!). He told me though he had paid the asking price. I asked him was there anyone bidding against him and he said no. Obviously i then asked him why he didnt bid lower than the asking price and he told me that the EA told him that he knew the owner and he wouldnt accept any lower and that he was getting a good deal because the house's market value was €10K more!! I know what ye are thinking cos i thought exactly the same!! I didnt want to say too much to him as he has signed the contracts. I told him that i think a correction in property prices is on the way but he reckons they will only level off and wont go down! But just a few things to note from this. 1. The tricks that EA'a are pulling to get people to buy. 2. The fact that nobody was bidding against him suggests a serious slowdown. 3. How gullible people still are to the vested interests. 4. People have still a lot of faith in the property market!
 
Do people reading this forum consider the payment of rent as dead money? Just having a look at rental trends as reported on Daft and they are showing increases in rent of up to 10%.

[broken link removed]

It seems the average rental cost per month in Dublin is now in access of €1,250.

A 400K mortgage over 35 years at current UB tracker rate of 4.3% costs €1,843 to service. Take TRS and perhaps the rent-a-room scheme and the average joe soap is no worst off and have there own castle to relax in in the evenings.

Perhaps I am missing the point totally!
 
conor_mc said:
Investors doing up their properties prior to selling? Potential trader-uppers deciding to stay put? A big push from developers to finish their current developments (glass sector more so than paints/hardware)?
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I've always said that DIY firms do well in the early stages of a crash. Rather than drop their price by €50k, sellers will paint the house and re-tile the bathroom.

That was my original thinking (from looking at the US market, where some sellers decided to rent and hold out for the longterm rather than drop even $10k) but the willingness of sellers here to drop the asking prices indicates this phenomenon isn't as likely over here.

If I had to guess I would say it is people deciding to paint property that is going on the market.
 
Miles said:
A 400K mortgage over 35 years at current UB tracker rate of 4.3% costs €1,843 to service.
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This is the case for renting for some. 400k is a hell of a lot when the average industrial wage is 33k, and over a 35 year term a lot can happen to interest rates to push them well above the (still) historically low 4.3%.
 
34 Cabra Park Phibsboro
Was 950K now advertised for 895 on myhome or 890 on daft

16 Shandon Park, Phibsboro
was 750k (No006 in ) now is [broken link removed]
 
It seems the average rental cost per month in Dublin is now in access of €1,250.
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That figure is the average for rental properties as a whole, not the average paid by tenants. It includes 1,2,3,4 etc bed houses.

On average renters are probably paying less than half that figure. Plus they don’t have to pay a management fee, stamp duty, insurance, maintenance ……. and they also benefit from tax relief on the rental payments.
 
Arthur Daley said:
This is the case for renting for some. 400k is a hell of a lot when the average industrial wage is 33k, and over a 35 year term a lot can happen to interest rates to push them well above the (still) historically low 4.3%.
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Point taken Arthur, everything you say is on the button. In this climate you have to assume that a couple will pool there resources together.

35 years then at the mercy of the ECB!
 
Miles said:
Do people reading this forum consider the payment of rent as dead money? Just having a look at rental trends as reported on Daft and they are showing increases in rent of up to 10%.
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Is this Daft report the quoted rents or the actual rents? I've seen no evidence of rents rising on the ground, with the recent interest rate rises I've no doubt some landlords will be chancing their arms trying to get higher rents.
 
howstrange said:
he reckons they will only level off and wont go down!
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A lot of people seem to think houses retain some sort of "memory" of prices, which means they will hit a floor where the magic house price fairy will step in and buy. It's trite to say it but still true - an investment is only worth as much as a buyer is willing to pay for it.
 
Miles said:
Do people reading this forum consider the payment of rent as dead money? Just having a look at rental trends as reported on Daft and they are showing increases in rent of up to 10%.

[broken link removed]

It seems the average rental cost per month in Dublin is now in access of €1,250.

A 400K mortgage over 35 years at current UB tracker rate of 4.3% costs €1,843 to service. Take TRS and perhaps the rent-a-room scheme and the average joe soap is no worst off and have there own castle to relax in in the evenings.

Perhaps I am missing the point totally!
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Well, I can rent a house for roughly 45% of the cost of the repayment mortgage on the same house and about 75% of the cost of an IO mortgage on the same house. And that's not because we scored a great deal on our property - most of the rental property we have seen was a comparable discount on the purchase cost. We signed for a another rental year two months ago at the same nominal rent as before - an effective drop in real terms.

Since I see little scope for capital appreciation in the next 2-3 years, I consider it more risky to pay the 9% stamp duty (now that really is dead money!) at the top of the market than to wait 2-3 years and see how things progress. Meanwhile I am saving a serious amount of cash every month so that I can be in the best possible position in 08/09.

Looking at the London market which I know well, I expect that there will be a rent rise here (rents are very cheap in Dublin compared with London) matched with a purchase price fall (purchase prices are very high relative to London) in the coming years. I still expect the greater shift to be in the buying prices rather than the rental prices, mind you.
 
Miles said:
Do people reading this forum consider the payment of rent as dead money? Just having a look at rental trends as reported on Daft and they are showing increases in rent of up to 10%.

[broken link removed]

It seems the average rental cost per month in Dublin is now in access of €1,250.
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Still below 2002 levels though
[broken link removed]
and looking at the trend probably below 2001 levels also.
 
Miles said:
Do people reading this forum consider the payment of rent as dead money? Just having a look at rental trends as reported on Daft and they are showing increases in rent of up to 10%.

[broken link removed]

It seems the average rental cost per month in Dublin is now in access of €1,250.

A 400K mortgage over 35 years at current UB tracker rate of 4.3% costs €1,843 to service. Take TRS and perhaps the rent-a-room scheme and the average joe soap is no worst off and have there own castle to relax in in the evenings.

Perhaps I am missing the point totally!
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It also depends where you're renting/buying. Lifestyle has to be taken into account - though its hard to put a monetary value on it.

i.e. If you're in the mind to buy a property in the area where you're currently renting, and rent v mortgage is e1250 v e1850, and you can cover the increase - well then rent is dead money.

If however, you're happily renting in (say) Ranelagh/Rathmines for e1250 and the best value property you can find is e1850 in poorly serviced commuterville and you only want a property because your friends and family are giving you the 'rent is dead money'/'safe as houses'/'get on the property ladder' routine you'd (IMHO) be foolish to listen to them.

There comes a time in most people life when they want to own their own home. But its up to each individual to make up their own mind as they'll be the person paying the mortgage every month - not their parents or friends.
 
Rents generally always track inflation, except in periods where there is a demand or supply imbalance.

The graph below relates to the US but shows the long term relationship.


[broken link removed]

The growth in the buy to let sector in the US has seen a fall in rental values recently by the way.
 
Duplex said:
Rents generally always track inflation, except in periods where there is a demand or supply imbalance.

The graph below relates to the US but shows the long term relationship.


[broken link removed]

The growth in the buy to let sector in the US has seen a fall in rental values recently by the way.
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Interesting chart. But I bet they track wage inflation even closer. If wages stagnate and supply continues to come on line, including currently vacant properties held for capital appreciation, we'll see rents falling.
 
walk2dewater said:
Interesting chart. But I bet they track wage inflation even closer. If wages stagnate and supply continues to come on line, including currently vacant properties held for capital appreciation, we'll see rents falling.
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Probably true thought I wouldn't be surprised if we saw a spike in rental inflation if investors start selling up large scale.
 
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