Future price of Irish properties

[Loki]

higher density is required so existing houses is being knocked down and higher rise is being built and on new sites larger apartment blocks will be built.no one is saying existing houses wont be changed into multiple units just that this in its self wont add to prices of houses.etc...

First off I have a theory which has historical and factual evidence. It happened in London and I see it happening in Dublin Development within Dublin is limited on how high it will be. The undeveloped land around Dublin is mostly owned by a realitvely small group of developers. THe arial phots of dublin normally have it so clearly market what can be built on and what can't so I think I'll use a map to decide. I have not said that house price will go up as a result of splitting I have said this can allow prices to continue to rise. Some people will buy a large house they beleive they can split later in their life.
As for people being stupid I hate to break it to you they are. People are buying houses in areas that have no services and require 3-4 hour commutes and no schools for an expanding family. A fully decorated and finished property sells for a lot more than one not, the half house would be a finished property. THe split houses have the ability extend which appartmnets don't, Parking is more likely, and a personal garden is likely. Considering the NIMBYs in ireland I think you will find a lot of building won't get built in many areas. Commuting times in Dublin will increase one way ofr the other and old neighbourhoods have better public transport links. How do you know the number of "units" zoned? Land gets zoned property has planning granted for it. There is a limited supply of housing in Dublin and there always will be as it is a finite space. The large areas of dublin are housing estates which are not being knocked down to build high density housing. People downsizing may decide to live in and split their houses which I would guess is the case in the link I provided. Only half the house is for sale so it is a reality. The density in Dublin will increase we agree on that. You have hope that the planners will;1)plan it correctly 2)have their plan implemented correctly.
If you can point to a large scale planning that involved multiple developers and owners that has worked here you might have a point, know of any?
I think differently but unlike you I am not stating it as fact.
Can you tell me what houses are being knocked down that provide a large enough footprint to build an high density appartment block on? Are they destroying whole estates?
Do you think people are going to desire to live in small appartments that are being built to poor standrads?

 

[microsquid]

Re: AIB might be the straw that broke the camels back

Was anyone else horrified at the radio ad for interest only mortgages for FTB this morning?
Choose life, choose half-a-life, choose debt forever...

MS

 

[beattie]

Re: AIB might be the straw that broke the camels back

Was anyone else horrified at the radio ad for interest only mortgages for FTB this morning?
Choose life, choose half-a-life, choose debt forever...

MS

I have been horrified by the recent trends in mortgage advertising as well as I can see the effect it is having on the less financial saavy people out there. So many people have no idea that there repayments could take a serious hike if the German economy recovers and are in a rush to get on the ladder at any cost. Still I suppose bonuses will be good this year in the banking industry

 

[gearoid]

The undeveloped land around Dublin is mostly owned by a realitvely small group of developers.

On a relatively light-hearted note...

Looking at Google Earth. The majority of undeveloped land within a 3 mile radius of Dublin city centre is "owned" by the members of Elm Park, Milltown and Castle golf clubs.

As a member of a relatively large non-golf sports club in a prime location I have occasionally day-dreamed about someone offering me 100k to join a sports club in Naas so they can build a sky-scraper on our grounds!

I know that this will never be the case but I'd have to think about it for at least a second or two before making my mind up...

Finally, can we can stop the discussion of Loki's splitting theory? I among many just don't see it and it is beginning to clog up the thread. Loki, can we agree to differ with you and move on? One granny flat doesn't make a summer.

 

[Eurofan]

Finally, can we can stop the discussion of Loki's splitting theory? I among many just don't see it and it is beginning to clog up the thread.

I concur.

So then, is it just me or are we starting to see more and more articles pointing out the impossibility of future massive appreciation? (bar the usual vested interests who are continuing to sing happy tunes).

For reasons i've pointed out before i see a 'soft landing' as an impossiblity, i.e. the markets massive reliance on ftbs buyings 'starter homes'.

If house price rises stagnate alone then you'll find many ftbs finding it hard to justify buying those 'starter homes' when they realise they won't be able to sell on for a profit in a few years (why would they?).

 

[ivuernis]

So then, is it just me or are we starting to see more and more articles pointing out the impossibility of future massive appreciation? (bar the usual vested interests who are continuing to sing happy tunes).

Yes, there is a lot more bearish commentary now but a lot of people still believe prices won't ever drop.

If house price rises stagnate alone then you'll find many ftbs finding it hard to justify buying those 'starter homes' when they realise they won't be able to sell on for a profit in a few years (why would they?).

Agreed, if prices stagnate what's the rush for FTBs any longer. The panic would then be over and all of a sudden the number of buyers about starts to decrease. And this isn't going to have any affect on prices!?!

Also, if prices stagnate it may also be a signal to many investors in the capital appreciation game to cash-in before prices fall. And why wouldn't they. If prices stagnate they ain't going to wait around in the hope they'll go up again. No, they'll bail before prices begin to drop.

Hmmm... soft-landing. I don't think so. Either up or down me thinks and it can't keep going up forever.

 

[Marie]

Hmmmm! Not so sure about that! First-time buyers here in the UK began to withdraw about two years ago though actual sale-prices for residential properties dropped by 10 - 15% in some areas as the market 'flattened'. Renting became prudent and economic in the circumstances. Soooooooo that clever-clogs financial sector has now "upped" the limit of its lending to investors (from 2million to 10 million) and "upped" the number of investment properties they will finance for any one investor (from 2 to 10). Though there is a subtext in this thread that 'someone, somewhere' will suffer badly and be left with egg on his face it certainly won't be the banks; it is unlikely to be the astute experienced investors with plenty of capital; it appears to be the 'ordinary' folk of low and middle income - families with young children, couples starting out, older adults needing to shift from a four-bedroom family home with large garden to a smaller more manageable retirement bungalow. What does suffer is the common good (remembering the posting of the young medic earlier in this thread, who will move abroad after training as he can't afford a home in Ireland).....and, of course, the 'sinking' of energy and money into this sector in preference to developing health, education and social amenity and a viable sustainable economic base fitted to the size and nature of the Republic.

 

[redo]

Hmmmm! Not so sure about that! First-time buyers here in the UK began to withdraw about two years ago though actual sale-prices for residential properties dropped by 10 - 15% in some areas as the market 'flattened'. Renting became prudent and economic in the circumstances. Soooooooo that clever-clogs financial sector has now "upped" the limit of its lending to investors (from 2million to 10 million) and "upped" the number of investment properties they will finance for any one investor (from 2 to 10). Though there is a subtext in this thread that 'someone, somewhere' will suffer badly and be left with egg on his face it certainly won't be the banks; it is unlikely to be the astute experienced investors with plenty of capital; it appears to be the 'ordinary' folk of low and middle income - families with young children, couples starting out, older adults needing to shift from a four-bedroom family home with large garden to a smaller more manageable retirement bungalow. What does suffer is the common good (remembering the posting of the young medic earlier in this thread, who will move abroad after training as he can't afford a home in Ireland).....and, of course, the 'sinking' of energy and money into this sector in preference to developing health, education and social amenity and a viable sustainable economic base fitted to the size and nature of the Republic.

Quite correct. The typical profile of a property investor 10-15 years ago was somebody who was mega rich with a lot of capital. Now we have STB's and any old joe soap becomming investors. It all smacks of a pryamid scheme now. The economists for the EA and banks doing the recruiting. "Invest now while you can and earn money for doing nothing (captial appreciation) "

 

[Petal]

Hi guys, just reading through this looong thread. I'm in the process of buying a house. Will cost me a good 380K or so. I'll pay mortgage for the next 35 years at around 1700 Euros per month given the current interest rates. At the moment I'm paying 1100 Euros rent.
One of the main reasons why I want to buy a house is that the rental market here is so unsecure. I can be thrown out of the house with one month notice, my rent can be increased on a yearly basis. I am not allowed to change anything in the house and I'm subject to dealing through the management company for any kind of repairs or replacements I need which is rather painful. So for the extra payment I will get my own four walls which I can paint whatever way I want, I can knock them down if I want. I'll sit on whatever couch I want, I can plant whatever plants I want and eventually my kids will have something to get them a good start in life. Now all that considered I don't think it's such a bad decision to go and buy?
I also remember what chore it was to find a place to rent, you always have plenty of people turning up and it's a nightmare getting a good place. And with this buying frenzy and the influx of people from the new EU accession countries I can't imagine that renting in Dublin will get any easier or any cheaper.
I think investors and builders should really be hit harder. Everytime I look at a house there is some investor turning up, pushing the prize beyond affordability and I actually know of some builder guy who buys up houses and then lets out the rooms for 200 Euro per week. And people are desperate enough to pay that. There should be legislation put in place to protect tenants' rights or make the whole rental market way more regulated. I think most people, like myself, just don't like the instability and uncertainty of rental property and if you have kids you just don't want to be subject to your landlords moods and mercy....
So that's my two cents here...

 

[redo]

Hi guys, just reading through this looong thread. I'm in the process of buying a house. Will cost me a good 380K or so. I'll pay mortgage for the next 35 years at around 1700 Euros per month given the current interest rates. At the moment I'm paying 1100 Euros rent.
One of the main reasons why I want to buy a house is that the rental market here is so unsecure. I can be thrown out of the house with one month notice, my rent can be increased on a yearly basis. I am not allowed to change anything in the house and I'm subject to dealing through the management company for any kind of repairs or replacements I need which is rather painful. So for the extra payment I will get my own four walls which I can paint whatever way I want, I can knock them down if I want. I'll sit on whatever couch I want, I can plant whatever plants I want and eventually my kids will have something to get them a good start in life. Now all that considered I don't think it's such a bad decision to go and buy?
I also remember what chore it was to find a place to rent, you always have plenty of people turning up and it's a nightmare getting a good place. And with this buying frenzy and the influx of people from the new EU accession countries I can't imagine that renting in Dublin will get any easier or any cheaper.
I think investors and builders should really be hit harder. Everytime I look at a house there is some investor turning up, pushing the prize beyond affordability and I actually know of some builder guy who buys up houses and then lets out the rooms for 200 Euro per week. And people are desperate enough to pay that. There should be legislation put in place to protect tenants' rights or make the whole rental market way more regulated. I think most people, like myself, just don't like the instability and uncertainty of rental property and if you have kids you just don't want to be subject to your landlords moods and mercy....
So that's my two cents here...

http://www.prtb.ie/

 

[beattie]

I also remember what chore it was to find a place to rent, you always have plenty of people turning up and it's a nightmare getting a good place. And with this buying frenzy and the influx of people from the new EU accession countries I can't imagine that renting in Dublin will get any easier or any cheaper.

I also remember that it was quite an ordeal but the pendulum has swung back in favour of the tenant in recent times. Many landlords are now not increasing rents on a yearly basis if they have good tenants which means in real terms your rent will decrease. Have a look around and see the amount of properties which will come on stream in the next 6-12 months which should further tip the balance in favour of the tenant IMO

 

[daveirl]

Trouble ahead in the US? http://bigpicture.typepad.com/comments/2006/03/coming_soon_mor.html

 

[Mininv]

I think most people, like myself, just don't like the instability and uncertainty of rental property and if you have kids you just don't want to be subject to your landlords moods and mercy....
So that's my two cents here...

As redo has pointed out with that link, that's no longer the case. The government have now legislated to give tenants security of tenure. If you've been in your property for six months, you're more than likely entitled to a four year lease.

Yes, FOUR YEARS. Automatically. The landlord is only allowed to kick you out for a set number of reasons (damage, bad behaviour, etc). Even if he claims he needs it for one of his family/renovations, etc, he has to specify who, for how long, etc - and when the period is up, you're entitled to rent it again. If he lies to you, and you've already found somewhere else, you're entitled to a hefty bit of compensation.

Not only that, but the relevant Act specifies the obligations of tenant and landlord so there's no room for a landlord to mess you about.

Have a look at the Residental Tenancies Act 2004 - it really is, from the tenant's point of view - a good piece of legislation which enough people dont seem to know about.

 

[bearishbull]

Quite correct. The typical profile of a property investor 10-15 years ago was somebody who was mega rich with a lot of capital. Now we have STB's and any old joe soap becomming investors. It all smacks of a pryamid scheme now. The economists for the EA and banks doing the recruiting. "Invest now while you can and earn money for doing nothing (captial appreciation) "

actually i know several men personally and have heard of many more in their 50's who bought property 15 years ago or more even thought they had ordinary jobs,one is an engineer in aer lingus and another two are gardai! one of these gardai lives in castlenock and has 9 properties around dublin! the aerlingus engineer also could afford to send all four of his kids to private schools and his wife could stay at home fulltime all on a semi state salary,try and do that nowadays! back then the rent actually covered the whole mortgage and even the dogs in the street knew that property could only go up. a friend of a friend works for one of the big mortgage lenders and was on an average salary throughout the 1990's but got mortgages through his job and now is sitting on several properties worth a few million in total! all these lucky accidental millionaires creates anger in young talented people nowadays struggling to get even their first home when if they had of been born ten years earlier they could have had a few properties no problem.

 

[Howitzer]

Not necessarilly, I know if I'd been born 10 years earlier I'd have had to emigrate. That's IF I could afford the air fare.

The world doesn't just revolve buying and selling property. Some people in certain countries would do anything just for a job and in fact many rural people simply abandon their land in 3rd world countries and head to the cities in search of a new life. 20 years ago people may have considered doing the same here.

 

[JohnnyBoy]

I know it's "how long is a piece of rope",but anybody prepared to put any ballpark time frame on the bubble busting?.Only reason ,I ask is that 2 friends of mine are considering emigrating as they can't afford a shed in Cork city & I'm trying to reassure them/keep them in country!

 

[Neffa]

I know it's "how long is a piece of rope",but anybody prepared to put any ballpark time frame on the bubble busting?.Only reason ,I ask is that 2 friends of mine are considering emigrating as they can't afford a shed in Cork city & I'm trying to reassure them/keep them in country!

Very tough to call. I think the fundamentals look pretty bad now but the huge SSIA cash injection may sustain the optimism a little longer so I would say it will take until mid-to-late 2007 before you see market sentiment change.

However, it could happen more quickly if we have base rates of more than 3.5% by year-end or if there are crashes in overseas markets.

Tell your friends to rent in the meantime then look late next year.

 

[gearoidmm]

I know it's "how long is a piece of rope",but anybody prepared to put any ballpark time frame on the bubble busting?.Only reason ,I ask is that 2 friends of mine are considering emigrating as they can't afford a shed in Cork city & I'm trying to reassure them/keep them in country

I understand the arguments re houses being overvalued in this country and I agree. There are a lot of arguments being put forward for why house prices will drop and they make sense, I've been saying the same for a couple of years now.

Why then, did the prices not drop substantially in the UK over the last 18 months? There was no crash - just a stagnation which appears to be reversing itself. Similarly, the Netherlands had a house prices boom at the same time as us but they had a recession in 2002. Again, there was no drop in prices despite what many commentators saw as significant overvaluation. Are we going to see a similar defying of logic here?

 

[walk2dewater]

I know it's "how long is a piece of rope",but anybody prepared to put any ballpark time frame on the bubble busting?.Only reason ,I ask is that 2 friends of mine are considering emigrating as they can't afford a shed in Cork city & I'm trying to reassure them/keep them in country!

IMHO this is not just a "bubble" like we had in the nasdaq circa 2000. This is something fundamental to our economy and psyche, and we'll end up in outright recession when the market turns sour here. So your friends might not have jobs or even want to live here when it "bursts".

You'll know the worm has turned when buyers will be able, but more importantly WILLING, to wrangle discounts from sellers. You'll know the corner has turned when properties sit on the market for months one end, and only shift when the seller concedes a cut in price. I certainly dont see that happening in 2006, perhaps not even in 2007. Ireland is entering the truly manic spike portion of this... we're "going Japanese" if you like...

My advice to anyone unfortunate to be caught in the headlights of this massive run-up in prices is to stay renting, save and learn how and where to invest in alternate ways (gold, energy, commodities).

It angers me that older Irish people, the property lottery winners as I call them, cannot see the misery that this madness is inflicting on the younger generation

sorry, rant over!!

 

[Howitzer]

Why then, did the prices not drop substantially in the UK over the last 18 months? There was no crash - just a stagnation which appears to be reversing itself. Similarly, the Netherlands had a house prices boom at the same time as us but they had a recession in 2002. Again, there was no drop in prices despite what many commentators saw as significant overvaluation. Are we going to see a similar defying of logic here?

Interest rates.

In the UK they control their own rates and at the first sign of instability in the housing market they lobbed 1/4 of a point off.

In Holland they reached their point where prices couldn't go any higher in 2002 but interest rates weren't rising so the market was able to adjust and people simply pulled back their spending on everything else.