With rent increasing is now the time to buy a 2nd property from the bank

Some interesting stats in that - the reality is no one really has any idea though because it’s so uncertain what the trajectory out of this is

Downward pressures on prices
Economy contraction impacting demand/affordability
Banks restricting lending
Fear factor

Upward pressure on prices
Pre-existing high demand
Reduced supply onto market
Monetary stimulation into banks
Continued low interest rates

My own guess is 10-15% reduction over 1-2 years but it’ll be very inconsistent with some area (and types of houses) worse hit and others more in demand. It’s a pure guess though

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I’d often find when I’d share little snippets of my content rural life on TFK that it rouses a sour flavour of nastiness in fellas who’ve financially handcuffed themselves to the concrete jungle.

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Could someone copy and paste this as it’s behind a paywall.

the golden cage

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Imagine not having an island to sit at with a cup of tea and look out over your garden while contemplating how lucky you are to live in the country.

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imagine living in a city?
fucking hell

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The immediate and devastating impact of Covid-19 on global economies is apparent. What’s harder to fathom is the longer term implications. Anyone hoping to buy or sell a house is currently stuck in a holding pattern at least until the lockdown ban on construction, viewings and house inspections eases. Buyers with bids already in must surely be wondering whether to put in a lower offer, while sellers wonder should they take what they can now for fear of what’s ahead.

In the absence of any reliable crystal ball all we have to work with is the information to hand, and that’s usually the price at which similar properties are selling for. The Residential Property Price Register may still be updating, but it will take months before the current impact on prices feeds through.

All we can go on currently is buyer and seller activity within the market. Following the lockdown in mid-March, the online property platform MyHome.ie saw an immediate 35-40 per cent drop off in visits to the website. But in recent weeks there has been renewed interest, says Angela Keegan, managing director of MyHome.ie, which is owned by The Irish Times. “We are now seeing in the region of 500,000 visits per week. That’s 15 per cent down on what we’d normally expect.” But new properties coming to market are down by 80 per cent compared with the same time last year.

Sales

MyHome research published this week found that even before Covid-19 struck, property sales nationwide were down by 4.6 per cent in the first quarter of 2020 compared to the same quarter the year before. The figure was 7.2 per cent in Dublin. These are the lowest first quarter sales figures since 2017. They most likely reflect the impact of Brexit uncertainty on sales towards the end of 2019 and any renewed optimism reflected in modest sales growth in the months prior to Covid-19 is likely to have been put paid to for the medium term at least.

Bringing properties on to the market is proving difficult with the current restrictions in place. Estate agents are doing everything they can to push ahead with “virtual” online offerings that allow potential buyers to view and bid on properties remotely, and for the most part they have been pleasantly surprised with the uptake.

Between mid-March and mid-April, Sherry FitzGerald had 1,000 parties engage in online viewings of 644 properties. In addition, of 1,162 transactions in train prior to lockdown 477 sales have completed and contracts were exchanged on a further 333 houses.

What about sales falling through following Covid-19? “There was a notable uplift in sales falling through particularly in the first few weeks, but it has levelled off since then. In 75 per cent of cases the fall throughs have gone back on the market for sale and many were re-agreed,” says Marian Finnegan, managing director of Sherry FitzGerald Residential. “Of the sales that were re-agreed, they achieved on average a price that was 1.45 per cent higher than the original listing price, showing the underlying strength of demand.”

Keith Lowe, managing director with DNG, says house sales have held up well. “We have completed around 70 per cent of our expected sales for this time period. Most unconditional contracts have completed with the assistance of the legal industry which has stepped up to the challenge.”

It’s likely to be months before we see the impact of Covid-19 on new sales, but a fall off is likely. In the first week of March there were 730 properties Sale Agreed on MyHome - a fairly typical figure. In the last week of April that number had fallen to 228.

Lowe says where sales haven’t gone ahead, the reasons vary. “Some buyers have lost their jobs, some have had pay cuts and can no longer meet the income conditions in their loan approvals, a number of banks have reneged on loan approvals and will not stand over loan to value exceptions for first time buyers which are now withdrawn from the market by the majority of financial institutions. Many of these properties are being re-agreed very quickly to under-bidders or other interested parties and the rest have been put back for sale to be re-sold.”

The area of valuations is certainly a vexed one. Where contracts have been signed on a house at one value, the concern is that the bank will revise downwards its loan approval to the buyer. Professional valuers, appointed by the bank, carry out valuations.

Valuations

These are typically valid for four months and current valuations have to be based on comparable sales in the months prior to coronavirus. The bodies representing valuers say that while they have begun adding a Covid-related clause to valuations, they are not altering values based on the virus. Meanwhile the banks are saying the matter is one for valuers, but there is concern an implicit Covid-19 discount will be factored in to new valuations.

“There is no certainty here but based on what I have seen so far I think there is a temporary downside risk of 5 to 7 per cent which could be reversed in 2021, providing we only have to deal with one wave of this pandemic,” Finnegan says.

Areas outside Dublin may be less affected in the short term because values have never recovered from the property crash

Areas outside Dublin may be less affected in the short term because values have never recovered from the property crash

In the UK, Savills has said it anticipates a fall in house prices there of between five and 10 per cent, with some recovery expected in 2021 and full recovery in 2022.

Lowe remains optimistic but concedes that there will be a “repositioning of property prices. It is likely to be temporary and will recover somewhat in 2021 with a full recovery anticipated in 2022.” Meanwhile he expects areas outside Dublin to be less affected in the short term because values there have never fully recovered following the 2006 property crash.

According to Keegan there is no indication yet that panic may be setting in among vendors, and to date there has been no discernible pattern in price drops on MyHome.ie.

“But the longer the lockdown is in place the more it will impact the market. We would predict transaction levels will be down 50 per cent on last year and that’s if we have a functioning market before the end of the second quarter. I would suggest it will be a buyer’s market for the rest of the year at least,” she says.

New homes

On the new homes front, developers will be extremely sensitive to any hit to consumer sentiment and earnings and will cut their cloth, ie build new units, accordingly.

Knight Frank Ireland has predicted that new homes completions in 2020 will be substantially down on the 21,241 units delivered last year, and the market could see a reduction of between 25 per cent and 40 per cent in output.

Sherry FitzGerald envisages 10,000 less residential units will be built this year. Given that there was a housing shortage prior to lockdown, and the stock of second hand homes has already been negatively impacted, we may be looking at a further strain on housing supply once lockdown restrictions lift.

Any fall off in demand on foot of unemployment and reduced earnings may well be offset by these supply side reductions, hedging any sharp decline in prices.

Looking to world markets there is much talk about a “v-shaped” recovery, ie a rapid return to normality, though this smacks slightly of the triumph of hope over expectation given the negative growth predictions for most economies for this year. And that’s before considering the global recessionary effect of subsequent surges of Covid-19 before a vaccine is finally released.

On the plus side, mortgage lending rates are low and are likely to remain so, banks just need keep making funds available to buyers at the right price.

The Government moved quickly to protect people’s jobs, but the sustainability of the current raft of support measures is a concern. A quick recovery in employment levels and the easing of lockdown will be critical to any soft landing for the residential property market.

cc @Smark

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and looking at cattle over the fields grazing,

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I done it for long enough.I was building a stone wall ( @ treatystones) out in the back garden yesterday thinking just how far away from Queens I am now.Thank god.

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I had a fox in the garden this morning and a pheasant knocking around the place too but I’m almost afraid to mention it at this stage.

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You’ll trigger the townies with a post like that

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@TreatyStones it’s not done yet,if I look over the wall I can see your favourite castle.

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Does anyone know can you put a shed anywhere without planning?

Wait a while till after the house is done and signed off and build it where ever you want.Although a steel tech shed would be classed as a temporary structure I think.

I’m in the process of buying a tiny bit of land on the bank of Lough corrib. I was wondering about putting a garden type shed on it.
The bit of farm I can fire up a 200sq metre shed without need for planning.
I was told I could use a shipping container as a “temporary” structure??

Ask for forgiveness not permission as they say.

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If it’s just a handy shed sure stick it up and all they can do is tell you take it away again

Mobile home or caravan would be ideal

I doubt if get away with that??

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