Dublin property prices falling by €4,500 a month

[returning officer]

Excuse my ingorance here, but how is a 25% drop in the property market measured on each particular property?

Does it mean that every property bought in the last 5,3, 2,etc years will be worth 25% less than the purchasor paid for it then or does it mean that the "value" (inflated by 25%) which a property expert would have suggested no longer applies.

Has supply of Dublin city apartments now exceeded demand?
How does this affect the rental market of Dublin city apartments?
Would Joe Bloggs have been better off not buying his first property in the 6 months ago or would he have been better off if he had waited for the crash/soft landing/downturn/adjustment predicted for the Spring?
(even though he was given the same advice last year)


This is a lot to ask, but thankfully there are plenty of experts here...

[Sidewinder]

Excuse my ingorance here, but how is a 25% drop in the property market measured on each particular property?

Does it mean that every property bought in the last 5,3, 2,etc years will be worth 25% less than the purchasor paid for it then or does it mean that the "value" (inflated by 25%) which a property expert would have suggested no longer applies.

Has supply of Dublin city apartments now exceeded demand?
How does this affect the rental market of Dublin city apartments?
Would Joe Bloggs have been better off not buying his first property in the 6 months ago or would he have been better off if he had waited for the crash/soft landing/downturn/adjustment predicted for the Spring?
(even though he was given the same advice last year)

When people talk about a "25% drop in the property market" what that usually means is a 25% drop in average prices from the peak. The peak was around April/May 2006. Obviously, some areas will suffer more than others - some areas might hold their value quite well, badly-built commuter shoeboxes in Westmeath might plummet by 70%.

This also means that someone who bought 5 years ago might be fine in a crash, as even after prices tumble 30% from the 06 peak they are still above the 01 prices and this person won't be in negative equity.

Anyone who bought after 01 is in serious danger of ending up with a house they can't sell which is worth much less than the mortgage on it IMO. Any of these people who bought on a 40-year interest-only mortgage are royally screwed altogether. There's a reason why 40yr IO mortgages for private house buyers used to be illegal.

Someone who bought in the last 5 years on a capital repayment mortgage who is happy to live in that house for the next 20 years will be OK though, they can ride it out as they don't intend to sell anyway.

Supply of actual houses exceeded real demand a few years back. The problem is that 40% of all newbuilds are being bought by speculators and investors, and that at least 130,000 houses (NOT holiday homes) are actually lying empty as they were bought for capital appreciation by speculators. There is also enough zoned land to hold over 400,000 new houses, but developers are sitting on huge landbanks and not building on them in order to artificially constrict supply in certain areas.

Rents will probably increase in the short term as investors try to dump their BTL properties, restricting the supply of rental units as they all go on the market for sale, and as current renters sit out the crash before buying.

[Twin Towers]

Makes good sense as per/usual Sidewinder but:

Rents will probably increase in the short term as investors try to dump their BTL properties, restricting the supply of rental units as they all go on the market for sale, and as current renters sit out the crash before buying.

????????

[Ponzi]

Makes good sense as per/usual Sidewinder but:

Rents will probably increase in the short term as investors try to dump their BTL properties, restricting the supply of rental units as they all go on the market for sale, and as current renters sit out the crash before buying.

????????

This phenomenon was occurred in the US early this year as the inventory of unsold properties grew. Many investors sought to sell up when the market peaked, this lead to a shortage of supply of rental accommodation, as investors prefer to sell their investment properties with vacant possession. (don't ask me why : ) However the falling market in the US (new build prices down 10% nationally) has resulted in many owners removing their properties from the sales market and placing them up for rent, increasing the supply of rental accommodation once again. I thing the term is vicious circle

[Sidewinder]

Yeah, that tends to confuse people alright

OK, at the minute everyone and his dog has 2 properties, their PPR and a second "investment" property, which is usually rented out. We have tens of thousands of amateur landlords, and many more professional landlords who run multiple properties. There is no shortage of places to rent, which is why rents haven't really increased in 5 years.

But. If lots of these amateur landlords decide to sell their investment property, then a lot of them will also decide to kick the tenants out hoping to sell it as a home to a FTB couple. Professional landlords will sell to other professional landlords usually leaving the tenants in situ - but the amateur brigade are different. Also, for years you've had a steady stream of renters who stop being renters and go buy somewhere - but if a crash looks likely no-one is going to buy. Put it all together and you have renters not moving on to be buyers, renters who have been kicked out of their homes which are now up for sale looking for somewhere to live....increased rental demand and reduced rental supply = increased rents.

In the short term. Depends how things pan out then. A lot of amateur BTLers might decide it's not worth selling the house after all in a falling market, and decide to rent it out again and dig in for the long haul, increasing supply again. Prices might drop to a level where current renters decide to buy, reducing demand. Or maybe not, it's hard to say what the long-term shakeout in the rental market will be - but in the short term, rents are likely to go up. If yer a renter, try and talk your landlord into a nice 2-year fixed-rent contract before Christmas.

[supamolli]

If yer a renter, try and talk your landlord into a nice 2-year fixed-rent contract before Christmas.

A little known fact of the Residential Tenancies Act 2004 is that you automatically have the right to stay 4 years after you have rented for six months, regardless of what your contract says.

It's called a par four tenancy.

The landlord can get you out is if he sells the property, you can take him to a tribunal if he doesn't, or if a member of his family is moving in.

[ibis]

If yer a renter, try and talk your landlord into a nice 2-year fixed-rent contract before Christmas. :D

A little known fact of the Residential Tenancies Act 2004 is that you automatically have the right to stay 4 years after you have rented for six months, regardless of what your contract says.

It's called a par four tenancy.

The landlord can get you out is if he sells the property, you can take him to a tribunal if he doesn't, or if a member of his family is moving in.

Although classically, you just claim that a member of your family is moving in, and then say they've changed their mind after redecorating the place.

[supamolli]

If yer a renter, try and talk your landlord into a nice 2-year fixed-rent contract before Christmas.

A little known fact of the Residential Tenancies Act 2004 is that you automatically have the right to stay 4 years after you have rented for six months, regardless of what your contract says.

It's called a par four tenancy.

The landlord can get you out is if he sells the property, you can take him to a tribunal if he doesn't, or if a member of his family is moving in.

Although classically, you just claim that a member of your family is moving in, and then say they've changed their mind after redecorating the place.

Then you just take them to the Tribunal and claim your damages as well as moving into a nicely decorated apartment.

[ibis]

If yer a renter, try and talk your landlord into a nice 2-year fixed-rent contract before Christmas. :D

A little known fact of the Residential Tenancies Act 2004 is that you automatically have the right to stay 4 years after you have rented for six months, regardless of what your contract says.

It's called a par four tenancy.

The landlord can get you out is if he sells the property, you can take him to a tribunal if he doesn't, or if a member of his family is moving in.

Although classically, you just claim that a member of your family is moving in, and then say they've changed their mind after redecorating the place.

Then you just take them to the Tribunal and claim your damages as well as moving into a nicely decorated apartment.

Hmm. How do you find out which of the landlord's family is supposed to be moving in? How do you find out whether they have moved in? Do you case the place every day? What if your new rented premises is miles away? How long do you hang around? How do you know that the person who has moved in is not a member of the landlord's family - harass them?

This has happened to me, you see. One usually has other things on one's mind. I only found out because I was friendly with one of the neighbours, and a client of mine happens to be around the corner from my old flat. However, by the time I found out, it was a year later, and I'd moved on. It's pretty much a get-out clause.

[Akrasia]

well, I suppose the easy way to avoid this would be to refuse to move out until the landlord told in writing you which particular relative was going to move in to replace you, and then all you have to do is check if the new resident is the person the landlord told you it would be. Of course, all of that requires foresight and dedication