Current public sentiment towards the housing market?

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coinfused said:
Hi 2pack, much closer than Mullingar- a hop skip and jump from west Dublin, thats what has surprised us- if you're curious i can pm you the area. all this has only happened since Monday- makes me very suspicious
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The same thing is happening in Galway now .

This house wasas while it is now €485k

Thats a €35k drop in a very short time.

I take your word for 'very close' Coinfused. Not Bands 1 or 2 then :p

This guy shifted none of these properties between and 5th (today) and has not dropped his prices either.
 
2Pack said:
be warned that prices in your Mullingars will fall more than the prices in your Maynooths.
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I take issue with your dismissal of Mullingar as meerly a commuter town. Property prices here are'nt based solely on Dublin commuters - yes about 20% of householders could be classed as commuters - but that still leaves 80% working in the locality.

In recent years the town has been the second fastest growing in the country (after Letterkenny) and County Council forecasts expect the population to be 40,000 by 2010 (its about 33,000 presently). In addition the IDA are in the process of opening a major new business park and one of the largest retail developments outside Dublin is currently under construction in the town center. Not to mention, Mullingar has the highest percentage of "professionals" in the country. Oh - add in the decentralised Dept of Educaton. Mullingar has very strong underlying fudamentals that are'nt dependent solely on being a satellite town of Dublin. Also note that their has been a major shortage of supply of housing in the town in recent years; partly due to the lack of a new sewage scheme (until very recently).

I know you just took Mullingar as an example - but perhaps a town more dependent on commuting such as Navan, Rochfortbridge, Ballivor or Kinngegad might have been a better choice.
 
2Pack said:
The same thing is happening in Galway now .

This house wasas while it is now €485k

Thats a €35k drop in a very short time.

I take your word for 'very close' Coinfused. Not Bands 1 or 2 then :p

This guy shifted none of these properties between and 5th (today) and has not dropped his prices either.
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its hard to judge on single instances like this, I think you would have to compare to other houses in the area. Maybe they were just chancing their arm and the going price for houses there was €450k?
 
bearishbull said:
Anyone hear the "today" show on rte radio1 today? they had a trinity economist and the head of the auctioneers and valuers on debating a "soft landing " or "crash" ,you can listen again on rte website.
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here is the link [broken link removed]
it is about 27.30 minutes in. Real player lets you drag to progress bar so you don't have to wait for it all to download.
 
CGorman said:
I take issue with your dismissal of Mullingar as meerly a commuter town. Property prices here are'nt based solely on Dublin commuters - yes about 20% of householders could be classed as commuters - but that still leaves 80% working in the locality.
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If you are a Mullingarander I must apologise .

In recent years the town has been the second fastest growing in the country (after Letterkenny) and County Council forecasts expect the population to be 40,000 by 2010 (its about 33,000 presently). In addition the IDA are in the process of opening a major new business park and one of the largest retail developments outside Dublin is currently under construction in the town center. Not to mention, Mullingar has the highest percentage of "professionals" in the country. Oh - add in the decentralised Dept of Educaton. Mullingar has very strong underlying fudamentals that are'nt dependent solely on being a satellite town of Dublin. Also note that their has been a major shortage of supply of housing in the town in recent years; partly due to the lack of a new sewage scheme (until very recently).
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Taken straight out of the Chamber of Commerce handbook style , good man. Pitch noted with a warm glow . Mullingar is looking a lot better than it was 20 years ago when the FCA sentenced me there for 2 weeks :( .
I know you just took Mullingar as an example - but perhaps a town more dependent on commuting such as Navan, Rochfortbridge, Ballivor or Kinnegad might have been a better choice.
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I deliberately picked TOWNS and not VILLAGES in the OUTER Dublin Commuter belt between 40 and 50 miles. I feel villages have fewer estate agents to watch thru the Googlce Cache :p and fewer services that draw people ...a centra and no secondary schools ..... and that it is easier to prove my theory by reference to the towns.

My theory is that the Dublin commuter belt will collapse back in by at least 20 miles in the downturn as the punters realsise they can buy in Clonard for the same price as Castlepollard at the top of the boom.

If its any consolation I fear more for Gorey and Carlow than for Mullingar :D . 2packs 2Band prediction will come to pass
 
ubiquitous said:
In what way? I think you are missing the point that the PRTB are merely recording registrations of rented properties. Their figures make no reference to, or assessment of, the numbers of unregistered rented properties.

It is well-recognised (notably by the government itself) that the vast majority of landlords have failed to register with the PRTB. A special measure to force landlords to do so, on pain of losing tax relief on mortgage interest, was therefore included in the recent finance act.

On this basis, the following conclusions on your weblog are naive, to say the least. Hopefully the remainder of your blog is more rigorous...
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The PRTB's remit, which they themselves refer to in their website;

The PRTB was established in September 2004 to resolve disputes between landlords and tenants, operate a national tenancy registration system and provide information and policy advice on the private rented sector.


The PRTB are not, as you wrongly suggest, "merely recording registrations of rented properties"

Am I to suppose that every quango established by government in Ireland is an empty construct designed to give the appearance of efficient public administration?
The PRTB can hardly provide policy advice if they have sketchy or no data on the private rented sector. The government have created a body that has failed to fulfill its stated role. I think that any statement by government in relation to housing policy should be seen in the context of this failure.
 
its hard to judge on single instances like this, I think you would have to compare to other houses in the area. Maybe they were just chancing their arm and the going price for houses there was €450k?
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Spot on. Auctioneer chancing arm as similar properties realising €400k to €450k in same area. They wouldn't have stables, but would have garages. Half doors shouldn't add that much.
 
coinfused said:
Now we don't know whether to take advantage of the wobble (the higher priced houses would previously have gone for 381-400, the lower one around 350) or hold off and see them drop further
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You can only guess at what's going to happen.

The next window for an interest rate hike is in August. With the Euro strengthening against the Dollar (http://www.x-rates.com/d/USD/EUR/hist2006.html), a rate hike becomes even more likely. Given that house prices are stalling/falling at this rate, a further increase in interest rates will only ensure that this at very least continues.
Wether a rate hike happens or not is also uncertain. I suggest that you keep tabs on ECB rate increase market on betfair.com to see how likely the event is. It's not foolproof obviously, but the markets rarely get it wrong.

In short, I'd hold off until August before I make a decision.
 
The IPAV's spokesman provided the following analysis as to why the housing market in Ireland won't crash.

Wait for it.............and I quote

"IT WON'T HAPPEN HERE"

So there you have it, no need to worry about the American deficits or the actions of the Bank of Japan or the hedge funds, Chinese trade policy, the prospects for the dollar, stock market jitters, oil prices or the carry trade etc.

It won't happen here, says it all.
 
Duplex said:
The PRTB are not, as you wrongly suggest, "merely recording registrations of rented properties"
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Eh???

Your own weblog article states the following (which I have also quoted above)
At the end of 2005, the number of registrations with the PRTB was 83,983 and this was in respect of 53,070 landlords and 150,518 tenants. At 3 March 2006, the number of registrations with the PRTB was 88,593 and this was in respect of 55,685 landlords and 160,251 tenants.
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QED, I would have thought.

The PRTB can hardly provide policy advice if they have sketchy or no data on the private rented sector. The government have created a body that has failed to fulfill its stated role.
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Have you any evidence to back up this statement? Simply quoting (out of context) one particular set of statistics published by this body hardly proves your case. Especially when your blog includes such questionable statements as this example:

So, as far as the government is concerned, out of an Irish population of 4,200,000, only 160,000 are private sector tenants
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My point is that the PTRB are tasked with providing government with advice on policy formation with regard to the private sector. They (the PTRB) have thus far registered 160,000 odd tenants, this would seem to a conspicuously underestimate the true number of tenancies given the high participation rate in the rented sector by investors. I’m afraid I have no accurate figures as to the true size of the private sector, but neither do the government (my point). It may seem acceptable to you that our government formulates policy in a haze of ignorance, but I find this abysmal.
 
Duplex said:
My point is that the PTRB are tasked with providing government with advice on policy formation with regard to the private sector. They (the PTRB) have thus far registered 160,000 odd tenants, this would seem to a conspicuously underestimate the true number of tenancies given the high participation rate in the rented sector by investors. I’m afraid I have no accurate figures as to the true size of the private sector, but neither do the government (my point). It may seem acceptable to you that our government formulates policy in a haze of ignorance, but I find this abysmal.
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Wait a second, whats with all this hair splitting on data? Sure isnt data for the doom-mongers and begrudgers sitting around their bedsits? Arn't the bulls supposed to be saying that Irish property prices are going nowhere but up and buy now before you're priced out, rent-is-dead-money-enjoy-the-boom-soft-landing-boomed-for-15yrs-can't- fall-now-demographics-low-inflation-celtic-tiger-economics etc etc?

I'm a bit confused today with all this bearishness :)
 
I would like to attempt if I may to put to bed a commonly used statement that mortgage lenders and estate agents tout to justify the ridiculous house prices of today’s Ireland. Paul McNieve from HOK used this at the David McWilliams Leviathan debate on Houseprices, May 4th 2006.

"According to Bank of Ireland stats, in 2005, 31% of income is spent on a mortgage. The average since the 70s is 28%. What we're paying now is in line with what they were paying in the 70s"

Now its important to remember that when our parents were purchasing homes back in the 70s and 80s, a 20-year mortgage was the normal duration.

I think to come up with the figure, the BOI had to play with the numbers a little bit. To challenge their numbers I decided to do the math.

2-income household.
Joint income €70,000 (€35000 is about the average wage in the country)

Aftertax income = €50989 per annum or €4249 per month disposable income. (Using tax bands and tax credits from Revenue.ie. If I've made a mistake please let me know)

Dublin houseprice = €400,000
92% Loan = €368,000. (Here's where the fun starts)

Duration 20yrs 25yrs 30yrs 35yrs
APR 4.1% 4.1% 4.1% 4.1%
Monthly repayment €2228 €1940 €1755 €1627
% of income 52.4% 45.6% 41% 38%

So as can be seen it’s only when you stretch the term of the mortgage out to 35 years that the % of income spent on the mortgage is within the 30ish % bracket.

Also I've not included mandatory PRSI deductions, which would also decrease disposable income further.

With rising interest rates, the percentage of income spent on mortgage repayments will increase substantially.

Imagine what people on 100% loans must be paying.

It’s worth also noting that this is a 2-income family. The stats that the BOI have compiled from the 70s would have been from many 1-income families (something almost unheard of now for young homeowners) and the percentage of incomes spent on mortgages was still lower then that of todays.

Hopefully an example such as this could help expose the flaws in cocky bankers and EAs stories of affordability not being a problem.
 
Dan mclaughlin of BOI said in a radio interview that he allowed for different durations now versus the past but i didnt look at their report on affordability.the thing was even if affordability is similar now to then there was high inflation back then which erroded your mortgage very quicky.
 
The game's up folks,how many people taking out 35 year mortgages would have been told "are sure you can reduce the term when you get yourself up and running" .

Does anyone foresee double digit pay rises like we've been used to over the last few years,because i don't !.
The next pay deal is 10% over 27 months for those lucky enough to get it,a far cry from the days of 10%+ per annum.
There's a lot of young people in this country after been sold down a blind alley by the "vested interests"
 
I wonder if the Irish media will be able to talk the country into a property slowdown just like the UK media did about 3/4 years ago. Then the UK media began to run increasingly bearish articles on the state of the property market and this coincided with the BoE tightening the monetary screws (just as the ECB is doing now).

I was living in the UK then and the mainstream press had become obsessed with the upward trajectory of property prices. As with present day Ireland however, the property bears were moving from the fringe (the Economist & the FT) to the mainstream (the Daily Mail etc).

What appears to have happened then was a suddend realisation by both buyers and sellers that the go-go days may be drawing to a close and in turn this seems to have prompted some more realistic pricing by both parties. Consequently activity slowed and the balance of power shifted in favour of the buyers - the country did see some house price deflation but no crash as the economy was still ticking along nicely. Since then house price inflation has substantially moderated and the country is getting used to house price gwoth of inflation + 2%/4%.

I an just wondering if all this talk of a property crash in the Irish media may actually precipitate a slowdown before external factors (such as interest rates of a global economic slowdown) really begin to bite? Certainly anecdotal evidence (presented in earlier posts) seems to indicate that this indeed may be the case.
 
walk2dewater said:
Wait a second, whats with all this hair splitting on data? Sure isnt data for the doom-mongers and begrudgers sitting around their bedsits? Arn't the bulls supposed to be saying that Irish property prices are going nowhere but up and buy now before you're priced out, rent-is-dead-money-enjoy-the-boom-soft-landing-boomed-for-15yrs-can't- fall-now-demographics-low-inflation-celtic-tiger-economics etc etc?

I'm a bit confused today with all this bearishness :)
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Double ditto.;)
 
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