Looking to buy 2018/19

[zamo]

So its coming to that time where I need to settle down.

Having moved back to NI 2 years ago and renting in south Belfast, Im starting to look at buying.

Im a big Advocate of the Harrison 18 year cycle and believe we will have a mini recession 2018-2019 and that will be my best chance to "pick up a bargain". It coincides nicely with the Brexit uncertainty.

 

I would like to live outside the city within a 10 mile radius and have Cultra/Helens Bay and Drumbeg/Drumbo/Hillsborough as preferred locations.

Things are a bit frothy in those areas and would appear about 20-30% over valued in most cases to me.

 

I will keep you updated on my search over the next 18 months and hopefully give you some insight into the current market.

[JoeDavola]

15 hours ago, zamo said:

I will keep you updated on my search over the next 18 months and hopefully give you some insight into the current market.

Please do - I'm in a similar situation. I'd like to own but prices are ridiculous at the moment with not much of quality available, and are due a dip.

Wish I bought 5 years ago, didn't expect the bounce back we had.

[zamo]

Does anyone have the stats on how much Belfast has risen since 2012?

[BelfastVI]

59 minutes ago, zamo said:

Does anyone have the stats on how much Belfast has risen since 2012?

about £30k or 30%

[BelfastVI]

4 hours ago, JoeDavola said:

Please do - I'm in a similar situation. I'd like to own but prices are ridiculous at the moment with not much of quality available, and are due a dip.

Wish I bought 5 years ago, didn't expect the bounce back we had.

you were talking people out of buying then. but it was not easy to buy at that stage and very few did.

[zamo]

12 minutes ago, BelfastVI said:

about £30k or 30%

Thank you.

Is this from the UUJ report?

[JoeDavola]

1 hour ago, BelfastVI said:

you were talking people out of buying then. but it was not easy to buy at that stage and very few did.

Yes, I admitted above I was wrong. Hey ho.

[carrick01]

This is a report for the whole of northern Ireland just publish today and also on the residential property price index thread at the top

https://www.finance-ni.gov.uk/sites/default/files/publications/dfp/NI HPI statistics report Quarter 2 2017.pdf

Uses Quarter 1 2015 as a baseline. Look at the table on page 7.

Lowest quarter was Q1 2013 according to these stats.  We would be around 28% above this figure.

 

[carrick01]

Had another look at the department of finance website (https://www.finance-ni.gov.uk/publications/ni-house-price-index-statistical-reports) and found a spreadsheet had further data which does have the breakdown off the various council areas

Table 5 has this data

https://www.finance-ni.gov.uk/sites/default/files/publications/dfp/NI HPI detailed statistics Q2 2017.XLSX

Edited August 15, 2017 by carrick01
spelling mistake

[Belfast Boy]

On ‎14‎/‎08‎/‎2017 at 9:43 PM, zamo said:

Im a big Advocate of the Harrison 18 year cycle and believe we will have a mini recession 2018-2019 and that will be my best chance to "pick up a bargain". It coincides nicely with the Brexit uncertainty.

http://www.theepochtimes.com/n3/2000510-economists-explain-why-our-economy-crashes-every-18-years/

"Harrison predicts the midcycle recession will hit in 2019, and the current property market will peak in 2026 with a severe financial crisis on its heels."

Later in the article Amar Manzoor said, "When the midcycle recession hits in 2019, he said, “the effects will be catastrophic as the recession bites as deep as the 2008 crisis."

And when the full 18-year cycle comes to an end in 2026, Manzoor said the “un-payable mortgages, catastrophically high house prices, and unsustainable land prices will lead to the greatest collapse in the history of mankind.”

Gulp!

I have also been reading that drinking is bad for my health. So I have decided to give up reading.

Edited August 16, 2017 by Belfast Boy

[BelfastVI]

15 hours ago, zamo said:

Thank you.

Is this from the UUJ report?

no the NIRPPI which records all sales. whilst it is most accurate I would say the lows were somewhat lower than they should as they included sales for partly built houses that needed say £30k spent to make them habitable. so the actual increase in prices to today may not be as much as shown.

[BelfastVI]

14 hours ago, JoeDavola said:

Yes, I admitted above I was wrong. Hey ho.

Its ok. I called the bottom in 2009 and was very wrong.

[BelfastVI]

11 hours ago, carrick01 said:

This is a report for the whole of northern Ireland just publish today and also on the residential property price index thread at the top

https://www.finance-ni.gov.uk/sites/default/files/publications/dfp/NI HPI statistics report Quarter 2 2017.pdf

Uses Quarter 1 2015 as a baseline. Look at the table on page 7.

Lowest quarter was Q1 2013 according to these stats.  We would be around 28% above this figure.

 

On Page 7 The Q1 2013 Standardised Price was £97,428. Q2 2017 the Price is £128,650, a difference of £31,224 or 32%

[BelfastVI]

50 minutes ago, Belfast Boy said:

http://www.theepochtimes.com/n3/2000510-economists-explain-why-our-economy-crashes-every-18-years/

"Harrison predicts the midcycle recession will hit in 2019, and the current property market will peak in 2026 with a severe financial crisis on its heels."

Later in the article Amar Manzoor said, "When the midcycle recession hits in 2019, he said, “the effects will be catastrophic as the recession bites as deep as the 2008 crisis."

And when the full 18-year cycle comes to an end in 2026, Manzoor said the “un-payable mortgages, catastrophically high house prices, and unsustainable land prices will lead to the greatest collapse in the history of mankind.”

Gulp!

I have also been reading that drinking is bad for my health. So I have decided to give up reading.

Certainly see signs from Dublin and certainly London that the madness is starting again.

[The_Equalizer]

35 minutes ago, BelfastVI said:

Certainly see signs from Dublin and certainly London that the madness is starting again.

Madness as in loopy price rises (which I presume) or crashing? I thought London had calmed down which certainly appears to be the case when I looked.

[darkmarket]

Dublin and London are very different markets at the moment. Prime London peaked some time ago and most of the city is in decline by now. Dublin is growing at an unsustainable rate: in a deflationary economy (-0.2% CPI), house prices rose 11.6% in the year to June. Ireland still has multiple government props and its credit conditions are determined by ECB policy, with all the cheap money you can see the excesses of 2007 all over the current market. Growth rates moving higher outside Dublin indicate the hunt for yield might be influencing the NI market again.

Ten years after the worst crash in its history and Dublin has learned absolutely nothing, all those destroyed families and middle-aged men killing themselves made zero difference. Trump cited Ireland as a target again yesterday in his plan to get US tax back into the US, and all they can do is watch GDP and tax revenue thinking everything's fine.

[Thorn]

On 8/16/2017 at 0:45 PM, darkmarket said:

Dublin and London are very different markets at the moment. Prime London peaked some time ago and most of the city is in decline by now. Dublin is growing at an unsustainable rate: in a deflationary economy (-0.2% CPI), house prices rose 11.6% in the year to June. Ireland still has multiple government props and its credit conditions are determined by ECB policy, with all the cheap money you can see the excesses of 2007 all over the current market. Growth rates moving higher outside Dublin indicate the hunt for yield might be influencing the NI market again.

Ten years after the worst crash in its history and Dublin has learned absolutely nothing, all those destroyed families and middle-aged men killing themselves made zero difference. Trump cited Ireland as a target again yesterday in his plan to get US tax back into the US, and all they can do is watch GDP and tax revenue thinking everything's fine.

I agree. The South is a tax haven- I think the multinationals save approximately 1 million in global tax for each Irish worker on their books- with each Irish worker receiving much less than 100k pa. 

Also, right now as house prices down South have been allowed to go up, I think this explains the latest wave of aggressive debt/chasing by the banks. If they can now evict a load of those distressed mortgage holders who have been paying up as much as they can ever since but in effect just holding on by their fingernails since the GFC, they can resell the houses for more money from the next buyer while still chasing the debts from the existing dwellers.  

[darkmarket]

13 hours ago, Thorn said:

I agree. The South is a tax haven- I think the multinationals save approximately 1 million in global tax for each Irish worker on their books- with each Irish worker receiving much less than 100k pa. 

Also, right now as house prices down South have been allowed to go up, I think this explains the latest wave of aggressive debt/chasing by the banks. If they can now evict a load of those distressed mortgage holders who have been paying up as much as they can ever since but in effect just holding on by their fingernails since the GFC, they can resell the houses for more money from the next buyer while still chasing the debts from the existing dwellers.  

I've linked to this before but the cross-generational transfer of junk debt in Ireland is unprecedented and just embarrassing:

Quote

 

The Great Irish (De)Leveraging 2005-14

...The property crash also substantially reduced wealth at the bottom end of the wealth distribution, driving the bottom 20% of households into negative net asset positions. The bulk of these negative equity households are found in the younger cohorts who bought around the peak of the property market.

The dramatic decline in aggregate debt since 2007 is often cited as an indicator that households have been deleveraging in recent years. However, once we take account of the falls in income over the same period and differences in amortisation profiles, a very different picture emerges. Younger households – those born after 1969 – saw large increases in their debt-to-income ratios from 2006 through to 2010 rising by around 75 percentage points, a result of both declining disposable income for these groups and rising debt levels. Furthermore, these households have only seen very small falls in leverage ratios since 2010, which we attribute to weak disposable income growth and the slow amortisation rates arising from long mortgage terms and very high debt levels. Our results suggest that deleveraging for these younger households still has some way to go, and relies heavily on both income growth and increases in property prices.

 

https://www.centralbank.ie/docs/default-source/publications/research-technical-papers/05rt17---the-great-irish-deleveraging.pdf

[Thorn]

On ‎21‎/‎08‎/‎2017 at 0:50 PM, darkmarket said:

I've linked to this before but the cross-generational transfer of junk debt in Ireland is unprecedented and just embarrassing:

https://www.centralbank.ie/docs/default-source/publications/research-technical-papers/05rt17---the-great-irish-deleveraging.pdf

Darkmarket this is an excellent article Many Thanks

[zamo]

Interesting Data on Q2 2017 lending in NI.

I assumed things would be slowing down with brexit fears.......

In the second quarter in Northern Ireland:

• Home buyers borrowed £420m, up 17% on the first quarter of 2017 and 24% compared to the second quarter last year. There were 3,800 loans taken out for house purchase, up 15% quarter-on-quarter and 15% compared to a year ago.
• First-time buyers borrowed £230m, up 15% on the first quarter and 21% on the second quarter last year. This totalled 2,400 loans, up 20% both quarter-on-quarter and year-on-year.
• Home movers borrowed £190m, up 19% quarter-on-quarter and 27% compared to a year ago. This totalled 1,500 loans, up 25% quarter-on-quarter and 15% compared to the same quarter in 2016.
• Remortgage activity totalled £210m, unchanged on the first quarter 2017 and on the same quarter last year. This came to 2,000 loans, down 5% quarter-on-quarter and unchanged compared to a year ago.

Derek Wilson, Chair, UK Finance Northern Ireland Mortgage Committee, commented: 

“House purchase lending in Northern Ireland reached its highest second quarter level since 2007. First-time buyers continue to drive that growth, out-borrowing home movers since 2010. Affordability conditions are better than in the UK overall, and are assisted by attractive rates being offered by lenders and a wide range of product choice available in the market.”

Affordability in Northern Ireland remains positive

First-time buyer affordability in Northern Ireland was higher in the second quarter than for the UK overall. First-time buyers typically borrowed £96,900 (£137,700 in the UK overall), up from £95,000 the previous quarter. The average household income was £32,200 (£40,800 in the UK overall), up from £32,000. The typical income multiple in Northern Ireland of 2.94 (compared to 2.92 the previous quarter) also compared favourably to the UK average of 3.58.

Home movers borrowed an average this quarter of £118,100 (£178,200 in the UK overall), up from £115,000 the previous quarter. The average household income of home movers was £45,500 (£55,100 in the UK overall), down from £46,000. This meant the typical home mover income multiple in Northern Ireland was 2.57, compared to 2.59 the previous quarter and the UK average of 3.37.

 

https://www.ukfinance.org.uk/home-buyer-lending-in-northern-ireland-up-17-in-q2-2017/

[whome_yesyou]

In this strange financial market, anything we think should happen, it's actually more the reverse that does.

I agree, with brexit, surely borrowing would then become more difficult, and we were also told interest rates would rise soon after the referendum - instead, money is now even cheaper and they've cut interest rates in half.

Loose lending is obviously a bad thing, but is a main contributor to rising HPI (lemmings will always be lemmings, they will borrow as much as they can get away with).

[zamo]

UPDATE.

Ive been doing viewings for the last few months.

Mainly around the Hillsborough and Malone areas.

First house on for 385K in Hillsborough. Retired Doctor selling it. Lovely in pictures but very dated inside. About 2 miles outside the village. He insisted that he is in no rush to sell, but I've now noticed it has been upgraded to "featured" on propertypal. Owner declared he had bought a flat in the village and would move when he sold this one.

Second viewing was in Hillhall. 2 houses beside each other around the 310-330k mark. Nice enough houses and pretty modern but they have the worst views onto a massive factory looming behind them.

Third viewing was a new build in Malone. Semi on market for 350k. Nice design but when I went to the half built site I was informed that the tiny patch of green space next to the house that I assumed was the garden will be used for another 2 semi's. I don't think I could handle 2 years worth of building next to my window.

Fourth was detached in Governers gate Hillsborough. 380k. Nice development. Husband wanted to do the viewing instead of agent. I asked him who did the valuation. He informed me its the price the wife wants and they won't budge on it. Goes to show how much input the estate agents really have. Deceptive photography made the place look massive. Very pokey when you get inside.

A lovely house came up in Dunmurry lane. 350k which I felt was very cheap for what it was. Simon Brien doing the selling. I call up and the girl informs me its group viewing only. ****** that. I called up today and there is 355k offer in with 20 more couples still to view. Im guessing this is a ploy to create mania/scarcity and get a bidding war going. It will be interesting to see what it actually sells for.

My thoughts so far are: You don't seem to get a really nice house unless you go above the 400k mark. That seems to knock 95% of the purchasers out of the game. Those above 400k seem to sit on the market for years without budging. Brexit is in the back of my mind as well and whether it would be better to hold off a year on pulling the trigger. I see the Rics report today is showing both Belfast and Lisburn dropping in the house price index. The agents are very particular about whether you are a FTB of in a chain. I don't think they are fussed about chain buyers and would focus their efforts on FTB or cash buyers.

Templeton Robinson have been the best agents to deal with so far.

 

[2buyornot2buy]

The dunmurry lane house is an auction flip. Sold for 265 last year. Could be difficult getting the valuation.  

 

TR were the worst agent I dealt with. 

[JoeDavola]

On 2/13/2018 at 10:24 AM, zamo said:

My thoughts so far are: You don't seem to get a really nice house unless you go above the 400k mark. That seems to knock 95% of the purchasers out of the game. 

Yep. Pretty much.

I see so many houses/flats around the £200K mark that feel pokey inside compared to my £500/month rental that it's just not worth buying any of them.

Interesting that the Dunmurry Lane house has increased in value by £100K in a year....was it renovated in that time i.e. has significant money been pumped into it?

[zamo]

I've decided to put the brakes on my purchase.

Brexit has put the jitters up me.

Best case scenario 2.5% GDP drop by the Governments own estimate in NI. https://news.sky.com/story/hit-to-northern-ireland-and-north-east-england-gdp-revealed-in-new-brexit-impact-papers-leak-11240254

In the depths of the GFC the GDP decreased around this figure in the Uk and that knocked 20% off prices there.

https://www.economicshelp.org/blog/7501/economics/the-great-recession/

With the Fed increasing interest rates, the Uk is likely to follow, even at a slow pace. I read last week that a 2% interest rate rise in the UK would lead to a 20% default on already stretched mortgage owners.

I feel the market i'm looking at around the 350-450k mark is a bit overpriced and id be happy to pay asking prices -20% for some of the properties.

The home owners and agents need a bit of pain first to get realistic in expectations.

I've also been keeping an eye on the London ripple and things have been dropping with activity slowing dramatically over the last 6-12 months.

I think its best to hold off until March 2019 and see what kind of deal these idiots come up with.