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 Post subject: First signs of prices hitting the ceiling in dublin?
PostPosted: Thu Jul 12, 2018 1:08 pm 
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Hi all,
Well, I know this is very much against everything I can read, or even what I would have expected in a time of growing economy, low unemployment, high rents, undersupply of new properties and very low interest rates, but anecdotally I have noticed asking prices being lower than sale prices agreed at the end of 2017 in my area of interest. (D6W)
Also, sale agree seems to take much longer and asking prices for some properties have been reduced by 5+% vs what was achieved 9 months ago for similar houses in same street /estate.
I am failing to understand why this is the case. I was expecting house prices to go up for another 2 years (in real terms). Has anyone else seen anything similar in other parts of Dublin?


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 Post subject: Re: First signs of prices hitting the ceiling in dublin?
PostPosted: Thu Jul 12, 2018 3:44 pm 
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Fab42 wrote:
Hi all,
Well, I know this is very much against everything I can read, or even what I would have expected in a time of growing economy, low unemployment, high rents, undersupply of new properties and very low interest rates, but anecdotally I have noticed asking prices being lower than sale prices agreed at the end of 2017 in my area of interest. (D6W)


The relationship between asking and selling prices tells you nothing about the direction of the market. It just tells you how good the EAs are at estimating the market. EAs may just have got ahead of themselves.

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 Post subject: Re: First signs of prices hitting the ceiling in dublin?
PostPosted: Thu Jul 12, 2018 7:46 pm 
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A friend is selling a house in Dublin 6 for around the €900k mark. She tells me that buyers are very slow to come forward with bids for anything prices at over €500k. A colleague selling a high end apartment in the docklands has had the same experience.


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 Post subject: Re: First signs of prices hitting the ceiling in dublin?
PostPosted: Thu Jul 12, 2018 7:49 pm 
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Real Estate Developer

Joined: Mar 17, 2008
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If you look at the graphs from the pretty charts thread for median prices in Dublin by quarter:

http://bl.ocks.org/pinsterdev/raw/98d5baa18a1bc6d603e0/

Last 4 quarters Dublin median price

Q3 2017 331k
Q4 2017 335k
Q1 2018 335k
Q2 2018 336k

It seems that prices are moving upwards pretty slowly and seem to have virtually stalled in the last 3 quarters. I commute through D6W and D6 most days of the week and I certainly get the feeling that things are slow to move - I'm not sure that they are any slower than they were this time last year though. I think expensive houses always take longer to sell. Last year I remember stuff in Castlewood Ave sitting there over the entire summer. Numbers of sales in Dublin are still rising compared to last year though.

The only anecdote I have is an acquaintance who was going to sell out his 1m+ house and buy a 400k apartment and retire early on the difference. Even the EA told him he wouldn't get more than 850k for the house and suggested putting on at 790k as 'people won't look at anything over 800k' but they might bid over it if pushed. This was back in January. He also found that you don't get much apartment for 400k in SCD, build quality is poor plus management charges are ridiculous (and the law surrounding apartment ownership appears to offer little protection against rapacious management companies), will rise with inflation and eat into the pension. So he has given up on the idea for now.


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 Post subject: Re: First signs of prices hitting the ceiling in dublin?
PostPosted: Thu Jul 12, 2018 10:20 pm 
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Single Home Owner

Joined: Nov 1, 2012
Posts: 166
As I continue to flounder in the 350-450k price range in south and central Dublin I have noticed several trends in the last three months:

  • lots of small drops in asking prices, usually <5%.
  • a small but noticeable minority of properties spending a lot longer on the market than has than the recent norm
  • smaller numbers at open viewings - I've even been on my own at one or two. Few are like music festivals which was the norm last year
  • a few houses going sale agreed below asking price (small sample size but very rare last year)

I suspect EAs/sellers were simply setting prices at last year + 10% during the first few months of the year and finding that buyers have not or cannot follow them most probably due to lending limits coming into play.


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 Post subject: Re: First signs of prices hitting the ceiling in dublin?
PostPosted: Fri Jul 13, 2018 11:21 am 
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Homeless

Joined: Jun 16, 2015
Posts: 12
Thanks for your replies. Median prices is an interesting one.
I checked ppr for sales achieved last year. In one particular estate, houses were sold around 450k. Another one was sold for same in 18. However, Similar houses in same estate went on sale q1 18, and had an asking price circa 450k. These houses have not been sold and asking prices are now in the 400k to 425k bracket. Might be a tactic to attract more potential buyers but I doubt it, we ll see when they are sold. I am wondering if there is a change of dynamic in the Dublin market with ftb being priced out of the market, moving further out in the commuter belt. I know few people who gave up buying in Dublin and went for cheaper new development west of the M50.


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 Post subject: Re: First signs of prices hitting the ceiling in dublin?
PostPosted: Fri Jul 13, 2018 11:46 am 
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On topic.

A few friends were saying the money seems to have "dried up".
Fewer potential investors at the viewings they go to.



Off topic.

metalmike wrote:
The only anecdote I have is an acquaintance who was going to sell out his 1m+ house and buy a 400k apartment and retire early on the difference. ... So he has given up on the idea for now.

I suggest converting the house into two apartments and living off the rent of one of them.


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 Post subject: Re: First signs of prices hitting the ceiling in dublin?
PostPosted: Fri Jul 13, 2018 11:47 am 
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My take on is it we are hitting the oft dreamed of "soft landing", at least until building catches up with demand as it will in the next few years.
Most first time buyers are now priced out of Dublin, prices are currently at a level only a few can afford so there isn't any space for them to rise much, if any, further or fall for that matter.
Its all about supply, as it ever was.

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 Post subject: Re: First signs of prices hitting the ceiling in dublin?
PostPosted: Fri Jul 13, 2018 11:59 am 
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There's an election coming...don't be surprised if the strict loan limits are an issue that some politicians focus on, perhaps even a party such as FF.
The loan limits will be the next battle


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 Post subject: Re: First signs of prices hitting the ceiling in dublin?
PostPosted: Fri Jul 13, 2018 12:04 pm 
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Joined: Mar 30, 2016
Posts: 624
if they keep the loan limits and we are beginning to reach the affordability limits then prices should just rise with inflation right?


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 Post subject: Re: First signs of prices hitting the ceiling in dublin?
PostPosted: Fri Jul 13, 2018 12:49 pm 
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Single Home Owner

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Posts: 100
The relationship between asking and selling prices tells you nothing about the direction of the market. It just tells you how good the EAs are at estimating the market. EAs may just have got ahead of themselves.

I've watched a few "campaigns" - as I believe EAs like to call them, in the Drumcondra/Glasnevin area:

The vendor invites a few EAs in to value and quote fees etc. If the high-profile, double-barreled EA with an office in the area is among them, they are almost guaranteed to suggest the highest price. The vendor thinks: "Oooh I like the sound of that; yes please"
The property comes on at this top-of-the-market price and the vendor waits...and waits.

After many months of little interest, this EA comes back to the vendor and suggests a more realistic price; except of course they don't use that term!
Eventually, this may result in a sale.

But this technique/experiment means the EA is still a winner: They secured the initial contract, even though the house may now sell at a price closer to what one of the other EAs suggested in the first place - and which would almost certainly have resulted in a quicker sale.

So it would appear that while some EAs are serving their vendor, they are also happy to exploit the same vendor to test how far they can push a local market.


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 Post subject: Re: First signs of prices hitting the ceiling in dublin?
PostPosted: Fri Jul 13, 2018 7:24 pm 
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Braighni wrote:
On topic.
.... Off topic.

metalmike wrote:
The only anecdote I have is an acquaintance who was going to sell out his 1m+ house and buy a 400k apartment and retire early on the difference. ... So he has given up on the idea for now.

I suggest converting the house into two apartments and living off the rent of one of them.


One of the reasons he had for selling out is that too much of his wealth is tied up in property and it was better to sell out when property prices (and the differential between houses and apartments) was high. He also reckons the stock market is due a fall soon and he wants to have cash to dive in when it happens - I have warned him about the dangers of trying to time the stock market. :roll:


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 Post subject: Re: First signs of prices hitting the ceiling in dublin?
PostPosted: Sun Jul 15, 2018 1:47 am 
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mocame wrote:
A friend is selling a house in Dublin 6 for around the €900k mark. She tells me that buyers are very slow to come forward with bids for anything prices at over €500k. A colleague selling a high end apartment in the docklands has had the same experience.


I have noticed a flurry of activity by Galway EAs which is basically asking a standard €400k (395k) often in places where €400k properties have no business in existing like out beyond Lackagh and places of such ilk.

This tells me that EAs are acting as a cartel when it comes to asking prices and also that Galway EAs have lost the run of themselves. :)

Whether this results in a ceiling in Galway I dunno, there are enough punters on around €100k salaries or more and they appear not to be biting at some of these 'opportunities' .

If EAs in Galway and Dublin dial back some on the asking prices then properties may clear the market more as there is demand from what I can see, but not at crazy prices. Rising rents are the main culprit, 6-7% of the asking per annum is the rule of thumb on an annual return in the rental market but while a 400k gaff in the city (or Oranmore or Barna) might return €24-€28k rent a 400k gaff further out sure won't.

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 Post subject: Re: First signs of prices hitting the ceiling in dublin?
PostPosted: Sun Jul 15, 2018 2:53 pm 
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Posts: 962
Just did a quick survey on myHome for properties in the Ranelagh, Rathgar and Rathmines. I chose these areas because I think they are high demand areas where properties at all levels should clear pretty quickly

There are 145 properties for sale:

Code:
<=500k     26 (18%)
501k-700k  29 (20%)
701k-800k  16 (11%)
801k-999k  23 (16%)
1m+        51 (35%)


Looking at the PPR for the year so there are 173 properties sold (excluding those not sold at full value):

Code:
<=500k     56 (32%)
501k-700k  39 (23%)
701k-800k  12 (7%)
801k-999k  19 (11%)
1m+        45 (26%)


As a snapshot all these figures can reasonably tell you is that properties under 700k have been clearing off the market much more quickly (38% of for sales, 55% of sales) compared to the higher levels (62% of for sales , 45% of sales). This is kind of 'Bears shit in the woods' territory but it certainly doesn't contradict the narrative above. People buying a family home in those areas know there's a good chance they will pay over 700k so in theory the clearance rate shouldn't be that different - either there's not enough people interested at that price level in this area (which I doubt) or they can't get the funding very easily (probably more likely). It would be interesting to see if the number of high price houses is rising faster than sales over time - suggesting that stock is building at higher price levels.


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