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Cornona Effects on House Prices


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9 hours ago, 2buyornot2buy said:

Property Pal reckons we can expect a 3-5% fall short term followed by "strong rebound"... expected from a vested interest business where earnings will have been destroyed.

Things must be bad when PropertyPal are actually telling people that there's going to be a fall.

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I think everyone is hoping the impact is not too bad.  I am seeing a Good number of people employed in travel, aircraft manufacture, recruitment etc getting sacked with no furlough.  Another factor is the banks looking for big deposits. Also despite the hype a lot of self employed were left high and dry.  It just a case of how low prices go. Im thinking 20 percent in NI is realistic.  

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On 04/04/2020 at 19:41, JoeDavola said:

2012/2013 was the bottom.

I can't remember whether most of the falls happened in the first couple of years after the peak however - does anyone here with a better memory than me remember?

I was looking at propertypals Area Price Tracker - https://www.propertypal.com/price-tracker

It is interesting to see which areas had 'dead cat' bounces, when the low was reached and which areas were recovering. The graph below that also shows transaction levels.

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Corona will have zero affect on prices, it wont last long enough.

However if Corona causes a massive recession due to zillions of small business going to the wall - THAT will cause prices to fall.

Currently looking more likely in the USA than here thanks to their non-existent safety net.

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3 hours ago, Habeas Domus said:

Corona will have zero affect on prices, it wont last long enough.

However if Corona causes a massive recession due to zillions of small business going to the wall - THAT will cause prices to fall.

You are contradicting yourself.

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My parents are both in their 70s. I'd imagine, like most retired people, they like to travel and eat out. They are missing cafes and restaurants, but are adjusting. When the lockdown ends, they have no intention of going near cafes and restaurants until it is safe to do so. Think of all the garden centres, furniture stores and supermarkets that also have cafes. My wife and I often comment when we eat in these places that we bring the average age down. And, we are not young! My parents also enjoy taking advantage of hotel mid-week breaks. SKI-ing they call it - Spending the Kids Inheritance. They won't be SKI-ing until it is 100% safe to do so. Ending the lockdown will not end the fear. Until the fear is ended the economy has no chance of returning to normal.

Government support is going to last for 3 months? Then what? Will people still fear for their jobs? Fear means people will hoard money - not spend it. In my opinion, there is no chance the economy is going to rebound from this quickly.

Edited by Belfast Boy
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1 hour ago, astrid said:

https://www.belfastlive.co.uk/news/belfast-news/up-25000-people-facing-unemployment-18097617

It's official! "Stormont's economy minister Diane Dodds warned house prices are also set to be negatively affected while trade and investment are predicted to stall."

Aye but only by 3-5%, PropertyPal said so ;)

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A stagnant market will do little for house prices. The vast majority of buyers/sellers/speculators/BTL investors will avoid housing transactions given the uncertainty. Interest rates seem destined to be at or near zero in the medium to long-term. 

The only major downward pressure on house prices will be if a significant proportion of people suddenly need to sell. However, the most vulnerable to this current economic crisis are the young, low paid/gig economy workers who will be disproportionately renting in any case. 

Can't see a sudden glut of properties coming to market as we emerge from this crisis. 

 

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11 hours ago, fuzzy_bear said:

A stagnant market will do little for house prices. The vast majority of buyers/sellers/speculators/BTL investors will avoid housing transactions given the uncertainty. Interest rates seem destined to be at or near zero in the medium to long-term. 

The only major downward pressure on house prices will be if a significant proportion of people suddenly need to sell. However, the most vulnerable to this current economic crisis are the young, low paid/gig economy workers who will be disproportionately renting in any case. 

Can't see a sudden glut of properties coming to market as we emerge from this crisis. 

 

It does not take a 'glut' to move prices. Transaction levels will be low, it will take time, but the market will move eventually. In the second half of 2007 transaction levels dropped significantly. That was the start of the last crash.

There is going to be a big gap between asking prices and what banks are prepared to lend. Sellers will hang on as long as they can. This will slow the initial falls.

As you point out yourself, young people who are renting, will struggle most. Some will have to move back with parents. Others will move in with friends to share costs where possible. What are landlords going to do if they can not get paying tenants? They become forced sellers or repossessions.

Then of course there are the 3Ds.

Edit: this is going to be a "buyers market". The price they can afford to pay will be set by the credit market.

Edited by Belfast Boy
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18 hours ago, 2buyornot2buy said:

Be interesting what 1: valuations look like and 2: lending multiples look like in the post corona world. 

People coming to the end of fixed or tracker rates rates & looking to remortgage my well be surprised with future valuations & the willingness of banks to lend based on these. Anyone who remains on the significantly higher  variable rate due to an 'out of whack' valuation will be another variable increasing the need to sell for some people & ultimately putting downward pressure on prices.

Anyone with any sense who has a sizeable mortgage & will potentially struggle with affordability may be the first to drop prices... The top end is worth watching first imo... The 'crash' will pick up pace in the next 6-12 months affecting the mid & lower priced properties...

I'm watching a few in the 'sticks' outside Belfast but am expecting them to be withdrawn before being put back on the market in 12-18 months after being revalued... because iirc this, along with the points mentioned earlier, is how things went in 2007.

All in my humble opinion

Edited by headmelter
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20 minutes ago, headmelter said:

People coming to the end of fixed or tracker rates rates & looking to remortgage my well be surprised with future valuations & the willingness of banks to lend based on these. Anyone who remains on the significantly higher  variable rate due to an 'out of whack' valuation will be another variable increasing the need to sell for some people & ultimately putting downward pressure on prices.

Anyone with any sense who has a sizeable mortgage & will potentially struggle with affordability may be the first to drop prices... The top end is worth watching first imo... The 'crash' will pick up pace in the next 6-12 months affecting the mid & lower priced properties...

I'm watching a few in the 'sticks' outside Belfast but am expecting them to be withdrawn before being put back on the market in 12-18 months after being revalued... because iirc this, along with the points mentioned earlier, is how things went in 2007.

All in my humble opinion

Lot of PR getting released from the EAs saying everything is going to be OK. Furlough means we can get back to normal quickly. I don't think this is going to be the case. I've already heard from several high paid professionals in my social circle, who have been told they'll be lucky to have a job in the next month. The fallout from this is going to be truly massive. I'm genuinely worried for some close friends. This is going to absolutely obliterate large sections of the "middle class", the money printing is going to be insane and I worry none of it will make a difference. 

The fingers in the ears stuff just won't cut it. 

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22 minutes ago, 2buyornot2buy said:

Lot of PR getting released from the EAs saying everything is going to be OK. Furlough means we can get back to normal quickly. I don't think this is going to be the case. I've already heard from several high paid professionals in my social circle, who have been told they'll be lucky to have a job in the next month. The fallout from this is going to be truly massive. I'm genuinely worried for some close friends. This is going to absolutely obliterate large sections of the "middle class", the money printing is going to be insane and I worry none of it will make a difference. 

The fingers in the ears stuff just won't cut it. 

The paradigm shift is underway. No amount of spin will alter the innevitable change to current societal norms & the impending devastation to our current lifestyles. I'm not a 'doomsdayer' but things ARE different this time imo. Prior to the pandemic there were a number of countries dealing with anti-government protests. The pre-existing social inequalities coupled with the oncoming problems in the aftermath of the pandemic are the ingredients for serious global unrest... How this might impact here is anyone's guess.... Interesting times...

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8 minutes ago, headmelter said:

The paradigm shift is underway. No amount of spin will alter the innevitable change to current societal norms & the impending devastation to our current lifestyles. I'm not a 'doomsdayer' but things ARE different this time imo. Prior to the pandemic there were a number of countries dealing with anti-government protests. The pre-existing social inequalities coupled with the oncoming problems in the aftermath of the pandemic are the ingredients for serious global unrest... How this might impact here is anyone's guess.... Interesting times...

Can only hope there's some kind of rebalancing this time around but I expect it will be the same again. The have a lot's will convince the have a little's the best way to get over this is to punish the have nothing's. 

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On 24/04/2020 at 13:15, headmelter said:

I'm watching a few in the 'sticks' outside Belfast but am expecting them to be withdrawn before being put back on the market in 12-18 months after being revalued... because iirc this... is how things went in 2007.

It does feel like 2007 again.

In 2008, I remember trying to tell someone that the housing market stalled in 2007 and prices where not going to go up any more. Therefore, prices would go down. They just didn't want to know. That's why I spent so much time on here.

It will be interesting to see if people realise what is going to happen this time. Especially as a crash was experienced so recently.

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On 18/04/2020 at 22:05, fuzzy_bear said:

A stagnant market will do little for house prices. The vast majority of buyers/sellers/speculators/BTL investors will avoid housing transactions given the uncertainty. Interest rates seem destined to be at or near zero in the medium to long-term.

The only major downward pressure on house prices will be if a significant proportion of people suddenly need to sell. However, the most vulnerable to this current economic crisis are the young, low paid/gig economy workers who will be disproportionately renting in any case. 

Can't see a sudden glut of properties coming to market as we emerge from this crisis. 

 

I corrected your text.

 

A stagnant market will do little for house prices. The vast majority of buyers/sellers/speculators/BTL investors will avoid housing transactions given the uncertainty. Interest rates seem destined to stay as they are, not being lowered further to fight the crisis.

The only major upward pressure on house prices will be if a significant proportion of people suddenly need to buy. However, the most vulnerable to this current economic crisis are the young, low paid/gig economy workers who will be disproportionately renting in any case. They may not be able to pay rent, which pushes the landlord into distress.

Can't see a sudden spike in demand coming to market as we emerge from this crisis. 

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1 hour ago, Belfast Boy said:

It does feel like 2007 again.

In 2008, I remember trying to tell someone that the housing market stalled in 2007 and prices where not going to go up any more. Therefore, prices would go down. They just didn't want to know. That's why I spent so much time on here.

It will be interesting to see if people realise what is going to happen this time. Especially as a crash was experienced so recently.

Had a wee look through the Propnews running total that you resurfaced.... Crazy how much I seem to have forgotten in such a short space of time. We're probably in the 'stalling stage' which is likely to last 6-12 months & then the early reductions will start to come through.

You might recall I bought in 2012 which was close to the bottom so going by the previous time frame the market won't bottom for 5 years. If people who post here have forgotten the details of the last NI crash I can see things panning out on a very similar time scale. From a personal perspective I won't leave it just so long this time as my next move will hopefully be the last move I make. Therefore no matter how the market is 'performing' I'll buy in 3-4 yrs mostly dependant on location due to schooling.

 

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1 hour ago, headmelter said:

Had a wee look through the Propnews running total that you resurfaced.... Crazy how much I seem to have forgotten in such a short space of time. We're probably in the 'stalling stage' which is likely to last 6-12 months & then the early reductions will start to come through.

You might recall I bought in 2012 which was close to the bottom so going by the previous time frame the market won't bottom for 5 years. If people who post here have forgotten the details of the last NI crash I can see things panning out on a very similar time scale. From a personal perspective I won't leave it just so long this time as my next move will hopefully be the last move I make. Therefore no matter how the market is 'performing' I'll buy in 3-4 yrs mostly dependant on location due to schooling.

 

I think it will be quicker this time. The top middle of the market in Belfast will crash much quicker.

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On 24/04/2020 at 13:40, 2buyornot2buy said:

 I've already heard from several high paid professionals in my social circle, who have been told they'll be lucky to have a job in the next month. The fallout from this is going to be truly massive.

What industries are they working in and what is driving the job losses - is this specifically because of the short and medium term effects of the lockdown?

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  • 434 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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