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Cornona Effects on House Prices


RP.Doire
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Another EA weighs in:

https://armaghi.com/news/armagh-news/cps-property-md-art-ohagan-i-have-never-witnessed-anything-like-this-before/107767

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The recessions of 1990 and 2008 were very different times as these were financially lead due to the property market overheating, simply the mathematics of “supply and demand”, high street lenders in the market place alongside employment rates are key factors of stability of the property market. I want to clarify they are still in favourable positions ie, lenders with liquidity will still be there without question at incredibly low interest rates, the levels on unemployment will remain low, government subsidies has shielded SME’s in a very protective manner and the demand for buying your home by far outweighs renting where possible.

There is unlikely to be an increase in Social Housing, therefore the “Buy To Let” market will remain strong.

Bringing all these factor into the equation the stability of the residential market will bounce back after this pregnant pause.

 

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1 hour ago, 2buyornot2buy said:

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

If the crash is quicker it'll flatline for longer imo.

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This is a really interesting debate, in the first instance a lot will depend on how long the virus lasts, if it’s short term things might return to normal pretty quick, if it’s long term there will be a huge amount of job losses which in turn will lead of price drops

Property here is still generally very cheap compared to the mainland, there is obviously exceptions in prime locations  but the average overall price is cheap, especially compared to the property boom of the past

i think the main thing that will suffer is travel, I don’t know of anyone who has any appetite to go on holidays at the moment, this might in turn might result in people moving home.

if holidays do suffer this will in turn have an effect on Airbnb which is one of my pet hates, a lot of the run down apartment blocks in Belfast May suffer places like bass buildings and margarita plaza may suffer price drops as people try to off load them but I feel normal housing stock will stay steady 

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13 minutes ago, stingray192 said:

This is a really interesting debate, in the first instance a lot will depend on how long the virus lasts, if it’s short term things might return to normal pretty quick, if it’s long term there will be a huge amount of job losses which in turn will lead of price drops

Property here is still generally very cheap compared to the mainland, there is obviously exceptions in prime locations  but the average overall price is cheap, especially compared to the property boom of the past

i think the main thing that will suffer is travel, I don’t know of anyone who has any appetite to go on holidays at the moment, this might in turn might result in people moving home.

if holidays do suffer this will in turn have an effect on Airbnb which is one of my pet hates, a lot of the run down apartment blocks in Belfast May suffer places like bass buildings and margarita plaza may suffer price drops as people try to off load them but I feel normal housing stock will stay steady 

Yes I think that's a real possibility - that city center apartments will see big price drops but houses in suburbia (as overpriced as I think they are), might not drop much.

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18 minutes ago, stingray192 said:

Property here is still generally very cheap compared to the mainland, there is obviously exceptions in prime locations  but the average overall price is cheap, especially compared to the property boom of the past

It's expensive here compared to Manila. 

If past events (boom, bust 65% crash and anemic recovery) has taught us anything, it's that what's happening in parts of GB has little effect on what happens here. Pointless comparing parts of Edinburgh, Surrey and say Newcastle to NI. 

 

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7 minutes ago, 2buyornot2buy said:

It's expensive here compared to Manila. 

If past events (boom, bust 65% crash and anemic recovery) has taught us anything, it's that what's happening in parts of GB has little effect on what happens here. Pointless comparing parts of Edinburgh, Surrey and say Newcastle to NI.

Well, to take the pessimistic (or should that be realistic?) view - it seems to me that a huge part of the NI 'recovery' since 2012 has been reliant on:

1. Tourism - hundreds and hundreds of new rooms via new hotels/airbnb's compared to 2012. The George Best hotel looked like it was dead even before this virus despite prime location.

2. Students/student accommodation - the expensive block on Botanic for overseas students, the new campus over by cathedral quarter.

3. Tech jobs heavily backed by invest NI money

....have I missed anything else?

It's not inconceivable that each of these could take a hit because of this virus.

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3 minutes ago, JoeDavola said:

Well, to take the pessimistic (or should that be realistic?) view - it seems to me that a huge part of the NI 'recovery' since 2012 has been reliant on:

1. Tourism - hundreds and hundreds of new rooms via new hotels/airbnb's compared to 2012. The George Best hotel looked like it was dead even before this virus despite prime location.

2. Students/student accommodation - the expensive block on Botanic for overseas students, the new campus over by cathedral quarter.

3. Tech jobs heavily backed by invest NI money

....have I missed anything else?

It's not inconceivable that each of these could take a hit because of this virus.

Basically debt fueled the "recovery". Ever more borrowing to paper over the crack and try to move on. You can argue we've had austerity here but we really haven't. Budgets have been cut, yes, but UK borrowing has increased exponentially. Private debt has increased exponentially. 

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4 minutes ago, 2buyornot2buy said:

Basically debt fueled the "recovery". Ever more borrowing to paper over the crack and try to move on. You can argue we've had austerity here but we really haven't. Budgets have been cut, yes, but UK borrowing has increased exponentially. Private debt has increased exponentially. 

So by extension, any crash or lack of hinges solely on the availability of cheap credit?

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Just now, JoeDavola said:

So by extension, any crash or lack of hinges solely on the availability of cheap credit?

I think it's probably too late for a debt injection now. So many businesses were so on the precipice, zombie companies, a nudge has knocked them off. They'll never recover. All the furlough and loans are doing is keeping them on life support. The decreased demand will finish them off for good. 

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1 minute ago, 2buyornot2buy said:

I think it's probably too late for a debt injection now. So many businesses were so on the precipice, zombie companies, a nudge has knocked them off. They'll never recover. All the furlough and loans are doing is keeping them on life support. The decreased demand will finish them off for good. 

Well I think it's true that there will be a longer period of reduced demand for certain things even after the lockdown is lifted.

I also agree that NI never saw anything remotely resembling 'austerity' considering how much public money NI gets.

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  • 1 month later...

Hi guys, first post here, but have been reading with interest! 

Was thinking of buying a house at the start of the year, but decided against it - thought things were looking far too toppy even pre-coronavirus (bidding wars for knackered, small 3 beds in East / South Belfast,  often up for 200k ish, with FTB couples getting carried away and sticking in bids near 250k, good luck to them...). I'm currently renting and would like a bigger space in the near future, but want to be sensible.

Market's reopened this week, and have seen plenty of 'Sales Agreed' on PropertyPal etc in the last few days. But also, seeing plenty of houses previously agreed coming back onto the market after falling through. Not much change on prices asked, but a few 5% drops here and there. 

Spotted here (https://builtplace.com/digging-deeper-first-time-buyers/) that over half of NI based FTBs are putting down a 10% deposit or less - and doesn't look like any of the banks are in a rush to come back to offering that (not seeing many mortgages for less than 80% LTV). 

Good to get people's thoughts on where the NI market is headed. Looks like plenty of people rushing in (bored through lockdown?), but not convinced the sales will ever actually happen if the banks won't lend, or the valuations push back.

I have a 20% deposit at the minute, and definitely minded to hold off until the winter at least, but do we reckon prices in NI will fall sharply this year, or see a slower decline over the next few years, or that sellers might just hold stubborn?

Market feels mad right now (basically trying to figure out if redundancies and limited credit availability will properly counter estate agent spin/ "pent-up demand" and mortgage holidays). I think they will, and hoping for some reality to kick in sooner rather than later, but good to get your thoughts for NI!

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23 minutes ago, NI_FTB said:

Hi guys, first post here, but have been reading with interest! 

Was thinking of buying a house at the start of the year, but decided against it - thought things were looking far too toppy even pre-coronavirus (bidding wars for knackered, small 3 beds in East / South Belfast,  often up for 200k ish, with FTB couples getting carried away and sticking in bids near 250k, good luck to them...). I'm currently renting and would like a bigger space in the near future, but want to be sensible.

Market's reopened this week, and have seen plenty of 'Sales Agreed' on PropertyPal etc in the last few days. But also, seeing plenty of houses previously agreed coming back onto the market after falling through. Not much change on prices asked, but a few 5% drops here and there. 

Spotted here (https://builtplace.com/digging-deeper-first-time-buyers/) that over half of NI based FTBs are putting down a 10% deposit or less - and doesn't look like any of the banks are in a rush to come back to offering that (not seeing many mortgages for less than 80% LTV). 

Good to get people's thoughts on where the NI market is headed. Looks like plenty of people rushing in (bored through lockdown?), but not convinced the sales will ever actually happen if the banks won't lend, or the valuations push back.

I have a 20% deposit at the minute, and definitely minded to hold off until the winter at least, but do we reckon prices in NI will fall sharply this year, or see a slower decline over the next few years, or that sellers might just hold stubborn?

Market feels mad right now (basically trying to figure out if redundancies and limited credit availability will properly counter estate agent spin/ "pent-up demand" and mortgage holidays). I think they will, and hoping for some reality to kick in sooner rather than later, but good to get your thoughts for NI!

Honestly, I think it will be a year before we get a proper feel for the market. I do think for sellers, the next 3 months are the time to try, for buyers, I'd be comfortable enough saying you'll pay less in rent over the next 12 -18 than you'll save on dropping prices. How low they'll go is anyone's guess, but if a large percentage of furlough turns into redundancies, I can see us going back to the lows of 2013 at the very least. 

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1 hour ago, NI_FTB said:

Market feels mad right now (basically trying to figure out if redundancies and limited credit availability will properly counter estate agent spin/ "pent-up demand" and mortgage holidays). I think they will, and hoping for some reality to kick in sooner rather than later, but good to get your thoughts for NI!


I had similar experience to you when I last looked at a house several months before the lockdown started - total madness people fighting over 2.5 bed knackered semi's in the Four Winds getting bid up to 200K+ ect...

I honestly don't know what's gonna happen price wise. I think Belfast prices are ridiculous, but evidently plenty out there don't agree as the houses were selling.

But I think the earliest you'd want to be looking to buy would be spring of next year. IIRC the furlough money runs out in October, then give it a few months after that for the reality of what's actually happening to our economy to set in. Maybe it won't be so bad; maybe it'll be a bloodbath, maybe something in between but it'll take time to know either way so it's best just to wait a while. At the very least I don't see this being an economic environment that facilitates big price rises, so there's no harm waiting 6 months to a year.

I think any falls that will happen are gonna be slow as even before this started there was several houses I saw that were on sale for month after month and they weren't dropping the prices. I think you'll get a lot of people refusing to sell 'for less than it's worth' in the event that falls do happen.

 

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1 hour ago, 2buyornot2buy said:

Honestly, I think it will be a year before we get a proper feel for the market. I do think for sellers, the next 3 months are the time to try, for buyers, I'd be comfortable enough saying you'll pay less in rent over the next 12 -18 than you'll save on dropping prices. How low they'll go is anyone's guess, but if a large percentage of furlough turns into redundancies, I can see us going back to the lows of 2013 at the very least. 

I assume you aren't taking a punt and selling your place?

To be honest if I was in your position buying at the bottom and enjoyed were I was living I'd still just stay put. I'd value the security and quality of life.

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11 hours ago, JoeDavola said:

I assume you aren't taking a punt and selling your place?

To be honest if I was in your position buying at the bottom and enjoyed were I was living I'd still just stay put. I'd value the security and quality of life.

I've hemmed and hawed about doing just that for years now. I think unless the plunge is taken in the next few weeks/months that particular boat will be missed. I'll admit it's very tempting, possibly to bank a large amount of unearned cash and buy again when it's cheaper. Even someone who's purchased a modest enough semi could bank 80-100k, goes to show how silly prices have gone. 

It's all a gamble but I'd be reasonably confident someone holding off buying for the next 12+ months will be buying a significantly cheaper house than someone completing now or in the next 6 months. 

Edited by 2buyornot2buy
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Property pal  release the result of their sentiment survey. Key stats they are pushing 

52% expect falls of 1 to 10%

Drill down further and around 30% see falls of 20%+

Some 80% approx see falls are inevitable. 

 

http://www.businesseye.co.uk/property-market-reacts-covid-crisis/

The report findings see a significant variation in respondents characteristics in terms of age, gender, tenure and household income, providing a rounded and representative view of the housing market.

 

The full survey findings can be accessed via: www.propertypal.com/covid19survey

· Of those who planned to buy a house before Covid-19, 1 in 5 no longer plan on doing so.

· Of those who did not plan on buying a house before Covid-19, 1 in 4 now do plan on doing so.

· 54% of people think house prices will fall by 1-10% over the coming 12 months. 14% of people think there will be no change in prices and 3% think prices will rise by 1-10%.

· 22% of First Time Buyers and 14% of Home-Movers are looking at more affordable properties compared to 8% and 10% respectively looking at more expensive properties.

· 53% of First Time Buyers say their deposit has not been impacted by Covid-19, whilst 15% say it has increased and 15% say it has decreased.

· 30% of First Time Buyers intend to purchase a property in Belfast compared to only 20% of Home-Movers.

· 3 in 4 First Time Buyers intend to purchase a Detached or Semi-detached property and only 8% intend to purchase an Apartment or Terrace property.

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Back to living in interesting times.

I think we are not going to see the real outcome of this (in property price impact) until Q4 this year or Q1 next when we get a better idea on employment.

At the moment there is actually a 'rush' of demand. But then again thats after 8 weeks of nothing. The demand and bookings is one thing but backing it up with mortgage offers will be the real test.

 

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9 minutes ago, BelfastVI said:

Back to living in interesting times.

I think we are not going to see the real outcome of this (in property price impact) until Q4 this year or Q1 next when we get a better idea on employment.

At the moment there is actually a 'rush' of demand. But then again thats after 8 weeks of nothing. The demand and bookings is one thing but backing it up with mortgage offers will be the real test.

 

That's it.

Nationwide have massively increased their LTV requirements. If others follow, the FTB market is toast and by extension the rest of the market too. 

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On 19/06/2020 at 10:54, 2buyornot2buy said:

That's it.

Nationwide have massively increased their LTV requirements. If others follow, the FTB market is toast and by extension the rest of the market too. 

Most are requiring 15% to 20%. Thats ok in the rest of the UK as the Gov backed Help to Buy covers the market but NI is excluded (something I dont complain about as it inflates the market).

 

The FTB market will be impacted until the return of 90% products.

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On 22/06/2020 at 11:22, BelfastVI said:

Most are requiring 15% to 20%. Thats ok in the rest of the UK as the Gov backed Help to Buy covers the market but NI is excluded (something I dont complain about as it inflates the market).

 

The FTB market will be impacted until the return of 90% products.

Ask and you shall receive...

Co ownership reopening with another £10m pot


https://www.belfastlive.co.uk/news/minister-allocates-10m-reopen-co-18475700

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I always find the TR site interesting as it is the only one to display the latest offer. In South Belfast the 3 bed semi market still seems to be moving.


BT6
23 Haddington Gardens, asking 280k, current offer 275k
26 Ravenhill Park Gardens, asking 227k, current offer 235k
BT7
99 Rushfield Avenue, asking 198k, current offer 215k
BT9
46 Willesden Park, asking 297k, current offer 305k


Seems to be much less activity for the bigger, more expensive properties.
Work on the Carolan site beside Wellington College started again a few weeks ago but 575k-585k for a 4 bed detached looks very expensive.
It will be interesting to see what 47 Ravenhill Park goes for – always a very desirable street.

 

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On 27/06/2020 at 15:52, arkle said:

I always find the TR site interesting as it is the only one to display the latest offer. In South Belfast the 3 bed semi market still seems to be moving.


BT6
23 Haddington Gardens, asking 280k, current offer 275k
26 Ravenhill Park Gardens, asking 227k, current offer 235k
BT7
99 Rushfield Avenue, asking 198k, current offer 215k
BT9
46 Willesden Park, asking 297k, current offer 305k


Seems to be much less activity for the bigger, more expensive properties.
Work on the Carolan site beside Wellington College started again a few weeks ago but 575k-585k for a 4 bed detached looks very expensive.
It will be interesting to see what 47 Ravenhill Park goes for – always a very desirable street.

 

I'd take the current offers with a pinch of salt. I have a acquaintance who sale agreed on a house just before the crisis. The current offers were accurate at the time but a few issues popped up and they negotiated a reduction off. Pulled out during the madness and the seller went with the undebidder. What looked like a mad price for the house was ended up being just slightly mad. 40k off what the "current offers" went to. It's a bit of marketing for TR when prices are buoyant, watch the feature pulled when they aren't. 

 

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Just an update on things over the last 6 weeks since we came gradually back to life.

Without marketing or advertising-no Sunday openings etc. 

We have been swamped. I think thats an EA term.

I am the first to say that bookings, on their own, mean very little until purchasers have the mortgages, sell their own house, etc and are in a position to complete. 'Many a slip between sip and lip' etc.. But everything starts with bookings and we are certainly getting them.

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