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Cornona Effects on House Prices


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Looking for some advice. My brother has his house due to be built come July and the building contractor emailed out of the blue today to say he needs an immediate 10k further cash deposit or the deals off. Obviously this is related to the economy tanking with the impact of CV-19. Is anyone else in a similar position? Due to complete on a sale/purchase perhaps and now have a chance to walk away just before you complete on the edge of a massive economic downturn?

I would also like to say that this is the small picture stuff. We know the need is to protect the vulnerable and high risk individuals in any way. We will pick up the pieces. 

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Cash deposit for a builder 4 months before he/she even gets to site? I wouldn't pay that even if we weren't where we are with coronavirus. Says a lot about a builder's financial situation when they can afford to wait on the stage payments. I've had some fairly hefty work carried out and never once had to pay a deposit. That's what supplier accounts are for.

 

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On 3/25/2020 at 8:16 AM, Locke said:

How much has he already paid and what recourse does he have on that?

 

If your brother still has cash, he will have people lining up out the door for work in 6 months time.

Thanks. Yes he has cash, he's in for around 20k in furnishings and another deposit around the same (I think). Final price is in and around the 350k mark. So it's a substantial piece of work. 

We were of the opinion he shouldn't commit in these times and could have got away lightly if he acts wisely. 

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2 hours ago, RP.Doire said:

Thanks. Yes he has cash, he's in for around 20k in furnishings and another deposit around the same (I think). Final price is in and around the 350k mark. So it's a substantial piece of work. 

We were of the opinion he shouldn't commit in these times and could have got away lightly if he acts wisely. 

Your brother paid a builder 40k before the builder even started the groundwork? Have I got that right?

 

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26 minutes ago, 2buyornot2buy said:

I'm gonna put my neck out and say 30% drop from here in 6 months time. 

The government prevented the market finding true value last time with printing, bailouts and props.

This time it REALLY is different! 

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17 minutes ago, Belfast Boy said:

The government prevented the market finding true value last time with printing, bailouts and props.

This time it REALLY is different! 

They'll throw everything at it. This time it won't be enough. 

 

I wanted to get out a while ago. I've missed the boat. 

Edited by 2buyornot2buy
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On 26/03/2020 at 18:48, Belfast Boy said:

The government prevented the market finding true value last time with printing, bailouts and props.

This time it REALLY is different! 

You think ?.. IIRC in 2008 there were no props put in place to prevent drops in NI. It took about 36 - 48 months to find the bottom. Most places seen drops of between 30 - 50%.

I haven't visited here for quite a while please humour me...

Anyone know by what % the 'recovery' reclaimed ? as this would give a reasonable baseline for potential drops imo.

I reckon without any % figures we could see a retracement to 2005 prices.

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2 hours ago, headmelter said:

You think ?.. IIRC in 2008 there were no props put in place to prevent drops in NI. It took about 36 - 48 months to find the bottom. Most places seen drops of between 30 - 50%.

I haven't visited here for quite a while please humour me...

Anyone know by what % the 'recovery' reclaimed ? as this would give a reasonable baseline for potential drops imo.

I reckon without any % figures we could see a retracement to 2005 prices.

I think they are on average up 30%. I think it's a reasonably safe bet we'll get back to those levels. 

Plenty of props. It's just they weren't particularly effective here. Emergency interest rates, funding for lending, HTB... 

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1 hour ago, headmelter said:

Anyone know by what % the 'recovery' reclaimed ? as this would give a reasonable baseline for potential drops imo.

I reckon without any % figures we could see a retracement to 2005 prices.

It very much depends on area.

I heard a story on here earlier in the year of a street that has double in price since 2013 - the example of the house in Ravenhill.

Terrace in South Parade Ormeau sold for what £430K or something last year?

There's a flat on sale for £200K at the moment in Belfast. I know for a fact that a repo of an identical flat in the same building was on for £110K in 2013. Another identical flat was on for £175K a year or so ago and sold. The £200K one has not sold and been on for many months.

Semi's in East Belfast have seen a big jump - others will remember by how much, but I'd guess we're talking 30-50% depending on area, maybe more.

I think what will get destroyed the most is apartments as they fell the hardest but then bounced back hard as they were seen as a guaranteed ticket to riches via airbnb.

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But even though I know prices should drop in nominal terms with what's happened.....a part of me wonders if they will unless there's a lot of repos.

I think you will also have a real paralysis of the housing market if prices do drop as many people won't want to sell "for less than the house is worth".

I'll also be interested to see what happens in parts of BT9; are people still gonna shell out £300K for a 2.5 bed semi there.

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3 minutes ago, JoeDavola said:

It very much depends on area.

I heard a story on here earlier in the year of a street that has double in price since 2013 - the example of the house in Ravenhill.

Terrace in South Parade Ormeau sold for what £430K or something last year?

There's a flat on sale for £200K at the moment in Belfast. I know for a fact that a repo of an identical flat in the same building was on for £110K in 2013. Another identical flat was on for £175K a year or so ago and sold. The £200K one has not sold and been on for many months.

Semi's in East Belfast have seen a big jump - others will remember by how much, but I'd guess we're talking 30-50% depending on area, maybe more.

I think what will get destroyed the most is apartments as they fell the hardest but then bounced back hard as they were seen as a guaranteed ticket to riches via airbnb.

It'll be big detached that see the biggest fall IMO. This is going to really hurt professionals. Grant Thornton have already cut pay by 40%. Expect others to follow. Accountants, solicitors, engineers are all going to feel the pain of this one. 

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Just now, 2buyornot2buy said:

I think they are on average up 30%. I think it's a reasonably safe bet we'll get back to those levels.

Actually taking two examples I know of people who bought direct from builders at the bottom, one in Larne and one in Belfast, and that were both re-listed last year, they've both gone up by 30%.

But neither were in the high-demand area like BT9 or Ballyhack.

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1 minute ago, JoeDavola said:

Actually taking two examples I know of people who bought direct from builders at the bottom, one in Larne and one in Belfast, and that were both re-listed last year, they've both gone up by 30%.

But neither were in the high-demand area like BT9 or Ballyhack.

Like you say, it's all about the area. Some new builds in Belfast probably haven't moved at all. Coopersmill, brackenhill probably haven't. 

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Just now, 2buyornot2buy said:

It'll be big detached that see the biggest fall IMO. This is going to really hurt professionals. Grant Thornton have already cut pay by 40%. Expect others to follow. Accountants, solicitors, engineers are all going to feel the pain of this one. 

I heard a rumor (I'm stressing it's a rumor) of an American tech company in Belfast that basically told it's people "take a 20% pay cut or quit".

I agree that if the economy does go down the toilet who will be able to service these £400K mortgages.

A friend of a friend bought a repo during the crash, they got it for £310K and it had originally been bought for £700K. That's how much some things fell last time.

I remember going to view an apartment in the Winter Garden block in town - 3 bed penthouse for £125K - I was told that it was bought for £250K and it along with the one next door had been repo-ed and I could have the pair of them for £200K if I wanted.

It doesn't seem that long ago to me but many people seem to have forgotten that the crash happened.

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3 hours ago, headmelter said:

You think ?.. IIRC in 2008 there were no props put in place to prevent drops in NI. It took about 36 - 48 months to find the bottom. Most places seen drops of between 30 - 50%.

You where on here, as I was, at the time. You don't remember ZIRP, QE, FLS and HTB? I'm certain prices would have fallen much more or still be stagnating without those props.

Edited by Belfast Boy
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1 minute ago, Belfast Boy said:

You where on here, as I was, at the time. You don't remember ZIRP, QE, FLS and HTB? I'm certain prices would have fallen much or still be stagnating without those props.

Forgot about the massive QE. We must be close to a Trillion now. 

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I might be wrong but I thought that one of the things that happened was that mortgage lending dried up for a while? And then started again around 2012/2013 or am I not remembering that right.

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5 minutes ago, JoeDavola said:

I heard a rumor (I'm stressing it's a rumor) of an American tech company in Belfast that basically told it's people "take a 20% pay cut or quit".

I agree that if the economy does go down the toilet who will be able to service these £400K mortgages.

A friend of a friend bought a repo during the crash, they got it for £310K and it had originally been bought for £700K. That's how much some things fell last time.

I remember going to view an apartment in the Winter Garden block in town - 3 bed penthouse for £125K - I was told that it was bought for £250K and it along with the one next door had been repo-ed and I could have the pair of them for £200K if I wanted.

It doesn't seem that long ago to me but many people seem to have forgotten that the crash happened.

400k? I know people with 800k mortgages who only put down a 10% deposit. 

 

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Just now, JoeDavola said:

I might be wrong but I thought that one of the things that happened was that mortgage lending dried up for a while? And then started again around 2012/2013 or am I not remembering that right.

Not so much it dried up as people couldn't raise a 15% deposit. Banks were willing to lend, transactions didn't stop but people couldn't save enough or didn't have savings. 

 

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  • 417 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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