Key Post Gone sale agreed , should I proceed with purchase?

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tonton said:
we have 2 distinct property markets. dublin, and the rest of the country. dublin will drop a bit but demand will stop it going too far.
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There are multiple markets within Dublin as well, and issues like this won't affect them all equally.

Certain sectors of the economy will be better isolated from impact than others, for example HSE staff in most functions aren't likely to be laid off or put on reduced hours any time soon, similarly, most of the large IT companies will continue to operate with staff working remotely for some time to come. On the flip side you have many in the retails and hospitality sectors already out of work. So the market for what were ~€400k homes in Dublin last month may be impacted more than what were €800k homes.

Supply will be another factor. We know that before this broke there was more demand than supply, and new house completions were expected to fall well short of demand. Will building slow down? Immigration & emigration numbers will be affected.

Trying to predict how this will all play out really is crystal ball stuff though.
 
Leo said:
So the market for what were ~€400k homes in Dublin last month may be impacted more than what were €800k homes.

Supply will be another factor. We know that before this broke there was more demand than supply, and new house completions were expected to fall well short of demand. Will building slow down? Immigration & emigration numbers will be affected.
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I agree, that different price points will be more / less impacted.

For reference, there are 4 houses being built outside my apartment building, and I have seen no slow down over the last week.
 
One change we might see is less demand for houses in Dublin, as prospective buyers that can work remotely will opt to buy outside Dublin instead of buying in Dublin.
Working remotely will be much more accepted by employers, even if the crisis recedes.
 
Fella said:
Do you believe that property is totally insulated from the rest of the economy ?
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I hear your point about the market having fallen we just don't know it yet, but I think you are just indulging in special pleading there.

I have always seen scope for a difference between what something is 'worth' and 'what someone is willing to pay for it'.

In my opinion the market is good at pricing things because it represents the collective wisdom of many many participants. I have never thought it was always right. Of course knowing when the market price is wrong, and knowing what the price should be is a big leap from just saying the market is not always right.

In your position I would certainly try to negotiate a discount, but I also think that a homeowner who loses their job is better off than a renter who loses their job.
 
cremeegg said:
I hear your point about the market having fallen we just don't know it yet, but I think you are just indulging in special pleading there.
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What does "special pleading" mean?

Are you saying that a house in an estate will get the same offer today as was got for an identical house on 18th February?

Are you saying that buyers will not be put off by CV worries?
That people who were about to buy but have since lost their jobs will buy anyway?

Banks should be tightening their lending policies, but they might do so.

Brendan
 
Brendan Burgess said:
Hi Gordon

Having dealt with so many people stuck for 10 years or more in negative equity, I can see what a terrible place it is.

Many of these also lost their jobs and were unable to keep up the mortgage repayments.

I think that it is perfectly reasonable to tell a would be seller that you cannot complete until the current crisis is over.

If you are buying an investment property for cash, it's different. You might pay €300k for a property which is now worth only €250k. So what, in the longer term?

Brendan
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Hi Brendan,

Firstly I hope that you and all of the contributors to the site are safe and well.

We are in agreement I believe. I am only suggesting that someone ploughs on if they are at the proverbial altar for a property that will be their “forever home”. i.e. where there’s a multi-decade time-horizon.

If I’ve found my dream home for the next 20-50 years, I get on with it. But if it’s some kind of interim stepping stone, it’s a different conversarion.

Regards,

Gordon
 
Brendan Burgess said:
What does "special pleading" mean?
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I think that Fella and yourself have previously supported the view that something is worth what the market will pay.

I have never thought this was adequate. I recently suggested that the stock market was misprinted. And it was suggested that I was holding myself out as an expert.

Here Fella doesn’t think the house in question is worth what the market will pay. In order to maintain consistency he is, in my opinion claiming this case is “special”.
 
This has dealt a massive short-term blow to the tourism business, and it will take a long time to recover. A lot of short-stay lets are empty, and are going to stay that way for quite a while.

It's also underlined that this is a fundamentally risky business.

Some of the more frothy valuations for apartments in Dublin were driven by airbnb letting potential. There is likely to be a correction there.
 
JSnowWinterfell said:
For reference, there are 4 houses being built outside my apartment building, and I have seen no slow down over the last week.
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Sorry ?? What , I'm not been funny but what do you expect to see that would indicate a slowdown , seems a baffling comment.

cremeegg said:
I hear your point about the market having fallen we just don't know it yet, but I think you are just indulging in special pleading there.

I have always seen scope for a difference between what something is 'worth' and 'what someone is willing to pay for it'.

In my opinion the market is good at pricing things because it represents the collective wisdom of many many participants. I have never thought it was always right. Of course knowing when the market price is wrong, and knowing what the price should be is a big leap from just saying the market is not always right.

In your position I would certainly try to negotiate a discount, but I also think that a homeowner who loses their job is better off than a renter who loses their job.
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Fair points , there is an argument in Ireland that your better off been a homeowner that can't pay the mortgage because it seem impossible to get a repossession.

My point is that the property market is not "live" we can't see a current price , what we are looking at and data from sales that have been completed recently have not been completed in the current economic enviroment. The economic enviroment has changed substantially since the price of the house was agreed.

Now if there was somehow a property price tracker that traded in real time on the stock market and it indicated that the average house price has not been impacted at all by this coronavirus , and this was freely traded and liquid I would 100% agree that the market is right and the house should be sold at agreed price.
 
Leo said:
Would be nice, but what's an average house? A rising or falling property tide doesn't affect all boats equally.
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Yes but i'm trying to stress the point that house prices more than likely have dropped but its not something that is visible like stock prices.
If you had an average house price index it would be down by a % but not all houses would be equally affected .

Similarly if you bought an S&P tracker you are buying the index and not all stocks are effected equally but an average price index for houses would be trending downwards in current market , I firmly believe.
 
PaddyBloggit said:
Are they really going to listen to you anyway?

What's their latest take on the situation?
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They didn't listen to me ! maybe I talk to much bull o_O but as it happens they know another couple who were due to buy in same development who have now pulled out and this seems to have swayed them to stay away also.
 
Fella said:
Similarly if you bought an S&P tracker you are buying the index and not all stocks are effected equally but an average price index for houses would be trending downwards in current market , I firmly believe.
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I doubt very much has been bought or sold over the last week or two, so probably not enough sales to move the needle at this point.
 
cremeegg said:
Here Fella doesn’t think the house in question is worth what the market will pay. In order to maintain consistency he is, in my opinion claiming this case is “special”.
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That is very odd reasoning.

The value of the house when they went sale agreed was what the market would pay for the house back then.

The value of the house in question today is what the market will pay for it today.

It is very likely that what the market will pay has dropped significantly since then.

Let's say I had agreed to buy Ryanair shares 2 weeks ago but had the option to pull out now. Well, of course, I would pull out now.

Brendan
 
Is this a self fulfilling prophecy? People believe house prices should fall and now will offer price
Brendan Burgess said:
That is very odd reasoning.

The value of the house when they went sale agreed was what the market would pay for the house back then.

The value of the house in question today is what the market will pay for it today.

It is very likely that what the market will pay has dropped significantly since then.

Let's say I had agreed to buy Ryanair shares 2 weeks ago but had the option to pull out now. Well, of course, I would pull out now.

Brendan
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In this example you can see that the Ryanair share price has fallen. It is less clear in the housing market this soon, and in this situation it is the buyer saying the house is no longer worth the price 3 months ago.
 
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