What's happening to House prices since new year?

N

New Girl

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Hi,

I'm an FTB currently trying to purchase with my boyfriend in Swords. Prices in certain estates seem to be rising at an unbelieveable rate (one place in particular up 60k since last Oct!!!!) E.A's seem to be guiding new properties on the market at 5-10k above the price that the last similiar one has sold for. Factoring in the bidding process and similiar properties are selling for 25-30k above the previous one... Am i missing something here or are well all so desperate to get on the ladder that we are willing to pay anything???
 
Re: What's happening to prices since new year?

Yes I can confirm your observations. I started to look last August, but then ran out of steam and went on holidays and Winter came and I was in no mood. No I'm regretting that big time, because the kind of house I could have bought then is now well out of reach, and the market is going absolutely bananas. Two-bed ex-council house selling for 400K in Drimnagh. That is absolutely mad. And some Estate AGents definitely aren't helping by putting the house back on view over and over again and encouraging the bidding process....
 
Re: What's happening to prices since new year?

We sale agreed in Mid-Dec but have continued to look, just in case. Our target property was a two-bed terraced house in Dublin, inside the canals, and our budget was around €320,000.

Certain properties have sparked spectacular bidding wars while others have stayed quiet. The most bid upon properties seem to be the most under-valued by Estate Agents, especially those priced under €300,000. Anything guiding at close to or just over €317,500 seems quiet, especially if it needs work. The former often sale agree for more than the latter. It has struck me also, that certain estate agents have a monopoly on certain areas, and control the prices there accordingly (Stoneybatter would be a good example). So yes, I think that the pricing policies of some estate agents are partly to blame.

Ultimately though, I think that we buyers are our own worst enemies - by panicking and allowing the market to spiral out of control we're feeding the cycle. There seems to be a level of incredulity and skepticism among the estate agents themselves that even modest properties are fetching such prices, and it is quite possible that things are peaking (maybe!). But remember, if things do peak, and slow down to a manageable level, it will be because buyers have had enough - so it's in your hands, ultimately.
 
Re: What's happening to prices since new year?

simp said:
It has struck me also, that certain estate agents have a monopoly on certain areas, and control the prices there accordingly (Stoneybatter would be a good example). So yes, I think that the pricing policies of some estate agents are partly to blame.
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Definitely, the same applies to Drimnagh...
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Re: What's happening to prices since new year?

Wouldn't be anything due to changes in guidelines by IAVI, using "advised minimum values"? Anything to push the market up I suppose...
 
What's happening to prices since new year?

Well one experiment which is eminently 'do-able' (since you are all stymied and can't even purchase a waste-paper-basket in Dublin for quarter of a million euro) is for POTENTIAL PURCHASERS TO STOP! Just STOP DEAD. No enquiries at the E.A.'s office, no phone calls to E.A.'s, no 'offers'.

I'd give it six months. Then, properties with the 300K mark would be ever so quietly changing hands for 200 - 250K.

The Irish Times carries the news today that more than one third of the houses in the RoI have been built in the last 10 years, so where is the notion of 'shortage' coming from?
 
Re: What's happening to prices since new year?

Marie said:
I'd give it six months. Then, properties with the 300K mark would be ever so quietly changing hands for 200 - 250K.
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I doubt it.

Marie said:
The Irish Times carries the news today that more than one third of the houses in the RoI have been built in the last 10 years, so where is the notion of 'shortage' coming from?
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Increase in population, increase in disposable income, advent of 100% mortgages, increasing number of investors putting their money in bricks and mortar.
 
Re: What's happening to prices since new year?

New Girl said:
Hi,
I'm an FTB ... ....are we all so desperate to get on the ladder that we are willing to pay anything???
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You hit the nail on the head!!! FTB seems very desparate and are willing to buy "almost" anything at any price to get a roof, and completely ignore the rental market.

Consider €350k mortgage at 3.35% over 30 years.
The interest repayment alone for year1 is about €960 pm, year2 €950pm, year3 €950pm, year4 €920pm, year5 €900pm...
Uhmm, that's very similar to renting prices......
 
But at least you own it (eventually). And you're kids will have a good basis later in life. And also you can't be thrown out or the rent increased on you yearly and you can decoreate change and paint your house whichever way you want. I'm paying 1100 euro rent on a two bed flat in Rathmines, I absolutely hate the decor, the mattreces are so uncomfortable it's unreal and the couch is so old you get backpain. I was told I could bring in my own stuff if i stored the landlord's furniture at my cost somewhere... The lease is up soon and i bet they'll increase the rent.
And i think we've all realised that the way the prices are going, if we wait for another year none of us will be able to buy, which means that the rental market will get stronger again as noone can buy anywhere and is forced to rent, and I sure don't want to be a tenant when that time comes round!!
 
Friends of mine were looking at a two bed terraced house on the Northside of Dublin nearly two weeks ago. Starting off price 325,000, in less than 7 days the price went to 380,000.
 
Re: What's happening to prices since new year?

"I'd give it six months. Then, properties with the 300K mark would be ever so quietly changing hands for 200 - 250K. "

I seriously doubt that prices will decrease. In my home country, they've been saying that for the last 5-10 years, and now I don't know how young couples like us can afford to get anything .My brother bought an apartment 5 years ago, when prices where still "reasonable" and if he were to sell now he will get more than double or even triple for it...so he is among the lucky ones, because he's renting it out, and the mortgage is paid with the rental income....
I was home for Xmas, and went to the bank, and just because I was curious I looked at one of the panflets the bank had on properties, (because they are also in the property sector). A 60-70 square metres apartment, in a not nice area at all for around 450K, they must be crazy.
But bidding wars are the worst here, and I reckon it's because of the greedy autioneers....Have you realized what cars most of the auctioneers drive? Haven't seen that many with something older than 2004 ( and I have met quite a few recently). FTB are desperate, but I prefer paying my own mortgage than paying my landlord's.
 
I'm feeling somewhat better to see that others are experiencing similiar problems but that only goes so far when you feel pretty much powerless in the whole process.... Can prices truly go any higher? A search on myhome.ie for anything under 317,500 yields pretty much 1 bed apartments. Under 350k the market opens up somewhat, but still a lot of homes are out of joe bloggs reach now....

oh to be an E.A. in these times - Just show up, smile and collect a cheque :)
 
Let's not forget that it was the Government's abolition of Stamp Duty for FTBs on 2nd hand properties under EUR317,500 which drove that end of the market ballistic in the first place. Sometimes taxation can have a calming effect on the market - hence the ESRI's recent (and unpopular) suggestion to reintroduce property taxes. The coalition seems to regard growth for its own sake as an inherent good - and this is making life difficult for many of us!

A good discussion of government policies in relation to the housing market can be found in the recent PJ Drudy & Michael Punch book "Out Of Reach: Inequalities in the Irish Housing System". Published by the Thinktank for Action on Social Change (TASC). I highly recommend it... Their essential premise is that housing is a right, not an investment, and that the government ought to do more to democratise access to quality housing, be it owned or rented.
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Also worth reading is the new Frank McDonald Book "Chaos At The Crossroads" - which focusses more on planning, but still emphasises the polical element of the current housing crisis.
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I feel that the real fuel for the house prices are the mortgages. I'll give you three real life snap shots....

8 years ago a friend of mine and his partner, who were both permanent Clerical Officers in the Civil Service were looking to buy a house. He described to me how they were literally laughed out of the EBS when they looked for a mortgage for a house (they were offered something like £80k (about €105k), which bought them nothing.

3 years ago my partner and I were looking for a mortgage, both in good paying jobs (she is/was an auditor and I was in the IFSC doing well money wise). We had to beg the bank to give us €230k and eventually push it up by a few thousand more when we got bonuses and raises etc (we thought it was mad money).

My little sister is looking at a house with her partner right now, she is a clerical officer (just started) and her partner works as a general helper in a car garage (low enough money), they were offered €250k from a bank - no hassles..... I expected them to be offered €170/€180k

I asked my sister to give my partner and I's details (from 3 years ago), and see what they would offer us as first time buyers now - (remember we pushed to get over €230k) - now they would offer us €310k, and discuss higher numbers after that, possible up to €340k.

House price inflation isn't just supply and demand, the banks have a big role to play....

Also, my sister doesn't have to worry about deposits etc. - 100% mortgages now....

Common sense logic -
3 years ago when we could get 230k - that bought us an okay 1 bed apartment in town.
now - when our old numbers are used we get 310k (ish). Probably close to the price of a 1 bed aprtment in town.

Would people agree with these real life perspectives?
 
Yes, the lenders have an incentive to keep the gravy train going by supporting the bottom end of the market with ever increasing lending ratios. Pyramid scheme? Musical chairs? Who knows... Some of this can be justified by lower interest rates -- repayments as a percentage of income have not increased as much as lending ratios.

Because there is limited supply, extra money in the hands of first-time buyers increases the cost of entry to the market. Which is why the recent stamp duty changes were so pointless.
 
Unfortunately, because demand is so high, and the supply remains limited, there has been no impetus for the builders to improve the quality of their houses........see the amount of complaints regarding the lack of sound insulation. I can foresee a time when a lot of apartment blocks will be slums and a lot of new houses will require huge structural alterations to make them sellable.....
 
Gordanus' point is an extremely important one! FTB's are acting in the expectation that the present extraordinary increases in the cost of a house will continue to build the kind of equity which is building for the past 2 - 3 years. However that equation does not hold for a number of reasons, one being the patently lower quality of a large proportion of the housing stock constructed during the past 10 years. When this comes to selling-on time, owners are more likely to make large discounts to compensate for the repairs and renovations which will loom large very shortly.
 
Property prices in Ireland will of course decline when interest rates goes increase, which is predicted for 2006
 
"so desperate to get on the property ladder that we're willing to pay anything."

I have a tip for you. Just wait until prices come down to what you can afford. Rent in the meantime, if you must. The prices will come down. They always do. If you just go out and "pay anything" you are contributing to the very phenomenon that is causing you such pain at the moment.

Be patient.
 
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