Today, I am writing about trends in the property market against the background of moving house, and so this article will be a little bit of testimony as well as proper analysis.
For the record, we are also moving from one area of south Dublin to another. Therefore, trends in the south Dublin market have been of acute personal, rather than professional, interest.
Luckily, we don’t have to move quickly, because it seems to me that things are taking a long time – both to buy and sell. This is a good thing, because what gets people into trouble – in any decision – is feeling that you have to execute too quickly. Taking your time is essential in any purchase or sale, unless of course you are in the speculative game.
One of the fascinating aspects of the past year is the way in which the property market in richer south Dublin has stalled, while less expensive parts of the city are doing well.
This is largely down to demographics. The baby boomers – the Pope’s Children – now want affordable family homes without massive leverage and they are bidding against each other in areas closer to the city. Talk to any thirtysomething who is trying to buy a family house now, and you will hear tales of intense competition, with bidding wars not uncommon.
Out in the slightly more rarified suburbs, people tend to be older, and are either trading down a bit – or more likely sideways – and so the market is slow and people can afford to take things slower.
The exceptions, of course, are those who bought on leverage in 2015 just before the Central Bank rules changed when things were booming, hoping to sell quickly in 2016.
These guys must be fretting a bit because a comprehensive piece of analysis in this paper today supports the anecdotal evidence that the market in south Dublin has weakened substantially.
The data show that in some of the most expensive areas of the city, the average sales prices achieved in 2016 have been substantially lower than the average sales prices achieved in the same period last year.
For example, analysis shows a fall of well over 20 per cent in Killiney North and the South Docks area. These two areas would have been seen as among the most expensive in Dublin, the former because it has been traditionally a wealthy area and the latter because of its proximity to the wealth-creating hub that is Silicon Dock and the IFSC.
Digging a bit deeper, the data reveals that in the electoral district of Foxrock-Carrickmines, one of the city’s swankiest areas, the average sale price has fallen more than 18 per cent between the two periods. Parts of Blackrock and Dun Laoghaire show a fall of about 15 per cent on average sales prices achieved.
Meanwhile, the salubrious northside areas – such as Sutton and the village of Malahide – have also fallen.
Although estate agents would not agree, not least because they make money on each transaction, a slower, more chilled-out process for buying and selling houses is no bad thing. In fact, it is a good omen.
Ireland needs to avoid another property bubble at all costs. In commercial property, there may be signs of a bubble emerging as foreign buyers who drove prices up and yields down now want to get out quickly.
However, in residential, there’s no sign of that. From here underlying factors such as demographics and the supply and demand of property as well as income growth in the economy will determine prices and the speed at which deals will be done.
In contrast in early 2015 and in 2014, there was a real risk of a bubble. Property was moving too quickly, with buyers and sellers in a frenzy, all suggesting a bubble. One of the greatest signs of a bubble is the mania whereby people feel if they don’t trade now, prices will move yet higher and this brings forward demand, creating a herd-like panic on the upside, which is typically matched by herd-like behaviour on the downside.
There is no fear of that right now. In fact, the market is determined much more by supply and demand today than it has been at almost any time since 2000.
So what’s going on in the rugby areas of Dublin? What explains the slump in the Ross O’Carroll Kelly backyard? Remember, this is the “million euro” bracket and typically these houses are not highly leveraged – at least not since the crash. In contrast, football areas, such as Balgriffin in north Dublin, are booming.
Well, the key aspect is value. In areas where nothing has happened for a couple of years and prices have remained low, the past few months have been a hive of buying and selling.
Whereas in areas that ran ahead of themselves in 2014/15, buyers are much more cautious.
We are seeing this trend for value all over Dublin and it can be seen in the disparity between asking prices and prices achieved.
So sellers in north Co Dublin and in the city centre area on average seem to have achieved substantial premiums of about 30 per cent on top of their asking prices in the past year.
In both the north city and south city areas the average selling price was around 10 per cent higher than the average asking price. But in the country’s most valuable property market, south Co Dublin, eventual average selling prices were about 3 per cent below average asking prices.
So what’s the outlook?
First, there is no bubble. This should be a relief to everyone. As someone who is both selling and buying, this is a blessing because what you think you gain on the sale, you give back on the purchase.
Second, demographics will determine the intensity of the market in certain areas. This means that family houses closer to the action in every urban centre will be keenly fought over by young families creating conditions that seem like 2006, but are highly localised.
Third, general income will determine the pace of house price growth. This is again a blessing. Fourth, because of the three preceding points, areas which have seen their prices fall in the past 12 months are likely to see a rebound.
Remember, we can’t take out human nature in Irish house-buying and selling. We all get giddy together and become temperate together. As soon as a few homes in south Dublin get bid up again, by let’s say a few professionals coming back from London, the rumour mill starts up again and people, particularly those with equity, jump in again.
Unfortunately, that’s the nature of things. As long as there’s no massive leverage in the system, decelerations and accelerations in housing activity are just a fact of life – more like mood swings than economic truisms.
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Hi, I had a cold night in the poly tunnel last night but it seems Deutsche bank opened this morning. Not for long I’d say. Your analysis is incomplete. The soccer areas are doing well because first time house buyers who only have to put up a 10% deposit can buy in these areas. The 20% rule which I thought was rescinded but doesn’t seem to be has killed the market sector where the second time house buyer would trade up to areas such as the leafier south Dublin suburbs. Talk about garrotting the patient with surgery to cure his… Read more »
It is going to be interesting from here on to see on the one hand, the Central Bank and how rigidly it sticks to its rules on lending in the property market and on the other side we will have the big vulture funds who will be looking to offload property they bought at distressed levels. It will be interesting to see what puppets the vultures hire to lobby for them in the Dail. The ones shouting loudest to have lending criteria relaxed will be the one to watch out for! Any bets on who we think the puppets will… Read more »
How on earth you can say there is no bubble I do not know. It is world wide. And it is exponential. When the banks create money the way they do, on every revaluation of the property when it is sold, then that bubble is enlarged. I am am sure this bubble will be compared to the tulip bubble which we now just laugh at and wonder how on earth the people could have been so stupid.
People making a sideways move should be happy with a fast market, so long as they can find and purchase a desirable property, as they can off load their old property quickly. This ensures the purchase and sale are part of the same market. If one is in a slow market the longer it takes to sell the old place, the more money is wasted on that property, and depending upon one’s ability to own two properties that may prevent a new purchase. It can also result in one entering a different market and loosing money. A fast slightly upward… Read more »
On the idea of a property bubble being bad. It would seem that a big pop in prices would only make things more affordable, and that would be at the expense of property developers mostly; not those looking to purchase a property and live in it.
If one is going to live in a property for a decent period, then the effect of any bubble loss made currently should be made back in a decade easily; and undoubtedly in a couple of decades.
But….but….but…. Is the purpose of state policy not supposed to be look after dominant oligopolies, at cost to the wider public interest ? In other words, I thought the policy framework was designed to – restore AIB/BoI [ the two “pillar” banks ] to their previous “glory ( as in when they made ridiculous profits in the Trichet low interest rate era ). – enlarge the state’s impact on the economic activity, so as to ensure that all the insiders were looked after – higher house prices means more tax take which means more centralization, and more quangos, and more… Read more »
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One of the fascinating aspects of the past year is the way in which the property market in richer south Dublin has stalled, while less expensive parts of the city are doing well.
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The role of rules on the deposit requirement ? Effectively, with current tatxation rates, it is harder than ever to build up a deposit, to the levels required in SECD/The DART line.
There is no lack in demand for housing in SECD. It is just that people are opting for Wicklow instead, if their available deposit is not large enough.
The UK government are now going to progress Brexit. Ireland has vital interests, but it seems that these are not the priority. EK is still focussing on keeping himself as Taoiseach, and lining up Frances Fitzgerald as the Taoiseach in waiting. In other words, there are two careerists running the government. Michael Martin is focussing on building the FF vote in the state employment sector, with promises of more Bertonomics. MoFA Charlie Flanagan is finding his inner Gary Johnson, and is stuck on Allepo, even though Brexit is the big issue (and it has already proven beyond his brain ).… Read more »
The politicians in the current Dail, the amatuers in the Irish media, dishonest vested interest groups like ICTU/IBEC who like to extract money from the rest of society, and a fool of an Uachtaran, are presiding over a lethargy into monumental disaster. When they realise that the minimum wage is too high, and there are too many quangos, it will be too late. Because at that point in time, the public debt will be out of control, and the money will be flowing North. That will be boomtime for the Ruth Coppingers of this world, who will produce idiotic proposals… Read more »
Central bankers run the world . the politicians are all lackeys of money elites.
https://www.wholesaledirectmetals.com/the-election-has-already-been-decided/?cid=GOPUSAsponsored&st-t=GOPUSAsponsored
Latest update, from the country that is run, along lines that has been an inspriation, for many in the Irish bureacracy loving left.
https://mishtalk.com/2016/10/02/french-unemployment-soars-will-hollande-keep-his-word-or-will-he-humiliate-himself/
Guys, watch that 10 min parody of the Trump-CLinton debate – one of the funniest things I have ever seen:
https://www.youtube.com/watch?v=-nQGBZQrtT0
Particularly for Grzegorz, & Deco ;
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https://en.wikipedia.org/wiki/Rail_Users_Ireland
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http://www.railusers.ie/
“A run on the bank in the wholesale markets can generally be met from DB’s own liquidity. What cannot so easily be handled is a run on the bank from retail depositors, and this will almost certainly be triggered if the share price continues to fall”
https://wealth.goldmoney.com/research/market-updates/option-expiry-and-deutsche-bank
https://www.youtube.com/watch?v=VCr-qCFtdCI
Discussion and opinion on Deutsche Bank and the world economy and the Chinese Yuan being included in the SDR. The lack of rule by law.
Read Charles Ortel re the Clinton Foundation. Less than 2% of donations went to Haiti.
This US Fed election is about who controls the money.
Well worth the 45 mins.
http://www.chicagotribune.com/business/ct-trump-ties-to-deutsche-bank-20160930-story.html?utm_source=October+2%2C+2016&utm_campaign=October+2%2C+2016&utm_medium=email
Can Trump Deutsche Bank!!
“The EU just imposed a €13 billion fine on Apple for back taxes over a deal with the Irish government.
In fact, Apple CEO Tim Cook called it, “total political crap.”
And yes, that’s precisely what it was.”
“Back to Deutsche Bank
After all of that, are you surprised that the US Department of Justice is now penalizing Germany’s Deutsche bank more than 10 times the amount they asked for from any of its US peers – or other peers for that matter?”
http://www.equedia.com/the-united-states-vs-germany-a-global-financial-war/
http://www.naturalnews.com/055514_Danney_Williams_Bill_Clinton_father.html
https://www.facebook.com/LetTheMadnessBegin/videos/1729052430692562/
Jill Stein logic
Posted 3 oct 16 on http://www.lemetropolecafe.com
*Bankers from Deutsche Bank, Paschi and Nomura have been charged for colluding to falsify accounts
October 1, 2016 —
Nomura, Paschi staff also charged for falsifying bank’s books
Judge schedules trial to begin in Milan on December 15
Six current and former managers of Deutsche Bank AG – – including ex-asset and wealth management head Michele Faissola — along with former executives at Nomura Holdings Inc. and Banca Monte dei Paschi di Siena SpA were charged in Milan for colluding to falsify the accounts of Italy’s third-biggest bank and manipulate the market…………..Bloomberg
Definitely one of the most important outcomes of electing Trump in this election is that he may be blessed with the opportunity of nominating the 4-Supreme Court vacancies likely to occur over the next 8 years.
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Currently, the make-up of the USA Supreme Court ==> it is pro-actively representing only 1-3 % of the populace.
Thus, perversely chosen edicts heretofore.
Abortion ; Part of so-called “Final Solution” by The Dreadful Few
Homosexualism of Society ; incl. impressionable young children, teenagers, etc.
Transgenderism of the XY Human Gender & the XX Human Gender
inter alia
Greg – I read your posts. All of your points are valid. And all are relevant.
Brexit is commencing. What are the muppets in charge in Kildare Street doing ? They are trying to position themselves as Santa Claus, with respect to a minor increase to the statutory old age pension. Given the level of mind altering substances consumed between 1990 and 2010, there is a substantial proporton of the middle aged wage earners, who will not live to get that pension. Alcohol, coke, ecstasy tablets etc.. all have chronic effects on key body organs. Maybe it might be better to focus that money on healthier living ? Oh…right…FF, the “publican” party will not agree to… Read more »
Everything (almost) you need to know about the lassies pro-choice march in Poland: 1. In order to mitigate the demographic crisis (due to World Bank advisers, nearly all previous govermnents and emigration, Poland has worse demograhics than Ireland, which will also hit demographic problems in 20 years), PiS (Law and Justice) government has introduced an anti-depopulation policy modelled, among other things, on Irish solutions. 2. This has hit the German, French, British and Portuguese supermarkets in Poland – young Polish mothers no longer have to work like robots with no breaks (including toilet breaks, limited to 3 a day) for… Read more »
“his has hit the German, French, British and Portuguese supermarkets in Poland – young Polish mothers no longer have to work like robots with no breaks (including toilet breaks, limited to 3 a day) for a minumum wage.”
or e m i g r a t e.
Good article by George Monbiot:
“Lies, fearmongering and fables: that’s our democracy”
https://www.theguardian.com/commentisfree/2016/oct/04/democracy-people-power-governments-policy
Hmm…mm ! . http://www.henrymakow.com tweet just now highlighted the following ; . . http://www.jpost.com/Arab-Israeli-Conflict/Bank-of-Ireland-shuts-down-anti-Israel-BDS-accounts-469346 . . Excerpt ; . . The Bank of Ireland, the country’s oldest financial institution, closed the accounts of the pro-Boycott, Divestment, Sanctions organization’s Ireland Palestine Solidarity Campaign (PSC) in late September. The group’s accounts were terminated in Ireland and Northern Ireland, according to a report Sunday in the Irish news outlet RTÉ. A spokesman for the Bank of Ireland wrote The Jerusalem Post on Monday saying that they “cannot comment in relation to customer accounts.” According to RTÉ, the PSC said the bank closed its… Read more »
What you guys are saying about the housing crisis regarding the cost of supply is so true.
The government’s take of 46% (new house) is the main culprit. So much for widening the tax base.
In essence the government is, in part, creating a problem it is responsible for solving – homelessness.
https://www.engadget.com/2016/10/04/guccifer2-dumps-a-bunch-of-clinton-foundation-donor-data/
http://spectator.org/mike-pence-a-big-reason-to-vote-trump/?utm_source=American+Spectator+Emails&utm_campaign=51be97ea10-vp_debate_email10_5_2016&utm_medium=email&utm_term=0_797a38d487-51be97ea10-104365713
“”Tonight was an obvious win for Pence but also for Trump. Trump made a good choice picking Pence. Pence illuminated the conservative values that voters hope Trump stands for but has not adequately articulated.””
Not on this blog.{:-)
“”Why is it that many, if not all, of us think twice before we say what we really think or believe? Have we been silenced by the popular hecklers? Are we afraid? Is there a cultural inquisitor who stalks us all? Then, why is it that so many of us who know better about so much that we see around us cower and speak in hushed, mousy voices?” … Justice Clarence Thomas
Our friend Ross O’Carroll Kelly IS so hilarious because of the sting in the tale…the truffles of truth in his smug South city self. Dublin probably feels a bit bubbleish again..because it’s an over populated city in an under populated country. It’s a great city but it’s not Ireland. It’s not London or Sydney or Toronto either. The Irish who’ve left have often spent years in Dublin, but go on to spend the rest of their lives somewhere else. Edged out. They buy properties in cities with better jobs or disposable incomes, or better value homes, or climates or schools… Read more »
“Third, general income will determine the pace of house price growth. ” This has always been standard housing finance logic. A sustainable mortgage payment as a portion of a couples household income(max 30% of net) should determine the cost of an affordable house for that couple. The Daft Trinity guy tells us that 45,000 gross is the median Irish family income. Thats 3000 euro net/mth or 1000 max to spend on shelter needs(mortgage, house insurance, house maintenance and house insurance). That means that the median household mortgage would be about 170,000 euro(900/mth @4% for 25 yrs) for 190,000 euro house.… Read more »
(Mortgage, house insurance, house maintenance and property tax)
Dear Senator Warren: On September 20, 2016, you appropriately excoriated CEO John Stumpf about the consumer fraud that took place at Wells Fargo Bank. Again and again, you used the word “scam” to characterize Wells Fargo’s actions, and this was the proper word for you to use. It was a scam, plain and simple. Over a period of several years, Wells Fargo created more than 2 million accounts to flatter its numbers and increase its stock value, thereby increasing the value of senior executives’ stock options. Many of the phony accounts were dormant and incurred no fees, but certain other… Read more »
http://www.marketslant.com/articles/exclusive-judge- rules-london-gold-fi…
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
CPowell@GATA.org
Judge’s decision in gold market-rigging case is an invitation to journalism
Submitted by cpowell on 06:30PM ET Wednesday, October 5, 2016. Section: Daily Dispatches
2:31p ET Wednesday, October 5, 2016
Grzegorz, . Ref. Passages [ slightly redacted by me ] from some of ur posts above . . I am conscious that ur time & energy is very valuable to u, & to this blog, inter alia ; Thus, ur very shortest answers should be apt. . . 1. “when Ms May hits the zero-lower bound, then the pound will REALLY PlUMMET, And with it, the cost of Irish food will really rocket” . . My Q.s . . 1.1 What “Zeor-lower bound” ? . 1.2 Why will “English Pound really plummet when Ms. …” 8-) … 1.2.1[ Do u… Read more »
http://www.gopusa.com/?p=15631?omhide=true
Will Illegal Foreign Voters Steal the Election?
But J. Christian Adams, a former Justice Department election lawyer in the Voting Rights Section, has exposed the systemic assault on the election process at every level by activist groups funded by liberal billionaire George Soros, including:
–Blocking citizenship verification.
–Automatic voter registration of welfare recipients without local verification checks.
–Massive foreign language ballot expansion.
–Obstruction of efforts to include state qualification instructions on voter registration forms.