# Current public sentiment towards the housing market?



## miju

What do people here think the current attitude is towards property from joe public?

I've been talking to a few people and am kinda getting mixed results , so i decided to start a poll which is here which is kinda giving up some suprising results (though only 61 people have answered the question so far)

I own property and am bullish - 21.31%
I own a property and am bearish - 26.23%
I do not own property and am bullish - 13.11%
_I do not own property and am bearish -_ 39.34% (suppose this is the most interesting as IMHO it's FTB's who have the "power" in the property market as if they stop buying the whole thing practically stalls as people can't "trade up" )

what do you all think?


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## jammacjam

I think its changing; a few months ago you were a crackpot if you suggested a crash where now people are beginning to see it as a possibility. The age I am a few of my friends are FTB and I am increasingly hearing them thinking they will hold off or buying with a consideration of potential falls in value which wouldn’t have even been a consideration a year ago. There is a huge difference in the media coverage particularly the Independent and listening to Newstalk I have heard a good few commentators over the past few weeks suggesting the possibility of a crash.  I think there is an increasing amount of fear and uncertainty.


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## CGorman

I've just pushed the latter option up to 40%.

I know several people in their mid-40's (mostly relatives) who have owned their own home outright for the past few years and have steadily started buying second, third, fourth and in one case dozenth homes as investment properties since 1995/2000. They have done very well - but all of them have stopped investing any more in Irish property. IMHO they typify the sterotype of middle aged average married couples buying investment property; and the singular sentiment from them is very bearish. They are now putting money into Northern Rock, Rabodirect and Latvian commercial property rather than Irish property.

Now to be fair, that's only anecdotal evidence i've witnessed - but if it is happening on a national scale - and I am certain it is - then the days of rampant capital appreciation are finally over.


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## Guest107

CGorman said:
			
		

> I've just pushed the latter option up to 40%.
> 
> I know several people in their mid-40's (mostly relatives) who have owned their own home outright for the past few years and have steadily started buying second, third, fourth and in one case dozenth homes as investment properties since 1995/2000.


 and those who invested before 2000 will be fine, probably those who invested before 2002 even. No negative equity for them . 10 months rental income covers mortgage pretty much . Sensible investing in other words. 


> Now to be fair, that's only anecdotal evidence i've witnessed - but if it is happening on a national scale - and I am certain it is - then the days of rampant capital appreciation are finally over.


 The "ladder" and "investment" psychosis  had to stop some time. I hope its now rather than next year when the large flush of SSIA money comes in.

I must start me _How Many Irish Property Economists Does it Take  To _thread


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## soma

My mother (60s), would be someone who would have subscribed to the 'Irish property will go up forever and ever amen' school of thought.

However during a phone conversation on monday she came out with "oh did you hear that they are saying that the house prices arent going to go up anymore..". This was bascially her take-away point from those statements made by the auctioneers associations earlier this week.

So who knows, this could be the week we can look back at and pinpoint where public sentiment finally began to turn. Of course it could also be a false dawn for the (IMO) inevitable downturn/recession.

One more thing - I think the bulls are very lucky that the odds on an ECB interest rate hike tomorrow are very slim. The knock-on effect to public confidence caused by the EA comments plus an unexpected ECB rate hike *in the same week* would be very interesting to see indeed.


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## phoenix_n

Phoned up about a house across from me (victorian terrace northside). Price 600 and no offers yet. Earlier this year this would have sold for 650-700 . Could be something wrong with the house but was surprised that had no offers on it yet. Estate agent seemed to give the impression that the ruse is up.

High intensity apartment developments are probably at risk. 

As regards others- Those that made money and traded up are still paying the same mortgages as before. A price drop just means that on paper their gain has dropped but still paying the same in mortgages.


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## Duplex

The PRTB has even less of a clue of whats going on. The statistics they have on the private rented sector are laughable.

http://irish-property-bubble.blogspot.com/


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## gocall01

Agree that it appears there is finally a topping off actually happening.
Whether it will be a crash or soft landing is anyones guess.
I bought a house about 2 years ago in Co. Cork for ~ 300k.
There are 2 houses in the same estate going for ~490k now (stamp duty to be added).
They have been on the market for about 3 & 5 mths respectively.
These houses would have been snapped up this time last year so it does appear to be slowing.
FTBs, SSIAs and a budget from the government reducing stamp duty may soften a property crash but...


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## redo

This autumns' selling season will be very interesting.  There could be panic buying from Second Time Buyers (STB) when they start to hear the there is a slowdown in  the market.  Many of these people, like FTB of the last couple of years, will feel pressurised to trade up earlier as they think it will be harder for them to sell their house which FTB normally target.  Plus with interest rates on the way up, there will be further pressure to do it now rather than later.  Many of them now, I suspect, are gearing up to sell there houses at the start of September.  They know if they do not trade up now, they never will be able to in the near future.

Alas, I think it will be too late for them.  FTB's out there can really pick and choose now.  In some areas of Lucan there are around 15 houses for sale in the same estate.  Supply-wise, FTB's have never had it better.  The only thing wrong with the market fundamentals at this point in time is the price of them.  They are over priced.  There is too much supply and it has to drive the price down.  Again, evidence has been produced this week about vendors dropping their prices to stimulate demand.  What is very interesting about this evidence (thus far), is that it appears to be eminating from higher priced properties, which noted highest prices inflation in the last 12 months.  What we can extrapolate from this is that people wishing to trade up from the first rung of the property ladder cannot do so.  FTB's are looking for something different, dare I say, nicer, than the homogenuis high density housing developments that where slapped up over the last couple years.  With the supply levels out there now, If I was spending over 1/3 million on a property, I'd make sure I got the best I could.


[broken link removed]
[broken link removed]

PS
There is a significant increase of investment properties coming on to the market too.  One can easily spot them on myhome.ie.  They will have an empty look about them.  Beds with no linen, no decor to speak of, etc.


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## Guest107

redo said:
			
		

> One can easily spot them on myhome.ie.  They will have an empty look about them. No decor to speak of, etc.



Magnolia paint and no pictures = Rented


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## coinfused

we're FTB's and this week we've had 3 ea's calling US about properties in the 360-381 market- unheard of as we've been browsing for about 2 years and actively looking to buy since Feb. After losing 5 properties to the second stamp duty bracket we now have a choice of 3 more or less, there was another proprty with amv of 325 and it looks like we'll be getting it for 317 if we want it. We're in a large town just outside the Dublin limits, commuter belt, prices rose by 90k in 18 months on an average 3 bed. 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- but they're definitely dropping as is demand. We viewed last night and said we didnt like it and ea practically held us hostage trying to get us to look at other properties.


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## Howitzer

coinfused said:
			
		

> .... We viewed last night and said we didnt like it and ea practically held us hostage trying to get us to look at other properties.


 
Were you actively looking last Summer, specifically July/August? This could be just the natural Summer slow down.

I have no intention of buying till interest rates near their top point, no matter how long that takes or what state the market is in in the interim.


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## Remix

What awaits us towards the end of the year after the summer slowdown? - looks like a winter of discontent as far as higher interest rates are concerned.

Raises a question about 100% mortgages. Will the banks allow the volume of these products to continue accelerating ?

Anyone with one of these products starts in negative equity and quite possibly descends further into negative equity going forward.


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## SteelBlue05

miju said:
			
		

> What do people here think the current attitude is towards property from joe public?
> 
> I've been talking to a few people and am kinda getting mixed results , so i decided to start a poll which is here which is kinda giving up some suprising results (though only 61 people have answered the question so far)
> 
> I own property and am bullish - 21.31%
> I own a property and am bearish - 26.23%
> I do not own property and am bullish - 13.11%
> _I do not own property and am bearish -_ 39.34% (suppose this is the most interesting as IMHO it's FTB's who have the "power" in the property market as if they stop buying the whole thing practically stalls as people can't "trade up" )
> 
> what do you all think?


 
How about...
I own property and I dont care-ish....


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## ubiquitous

Duplex said:
			
		

> The PRTB has even less of a clue of whats going on. The statistics they have on the private rented sector are laughable.




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...



> http://irish-property-bubble.blogspot.com/
> 
> 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.
> 
> So, as far as the government is concerned, out of an Irish population of 4,200,000, only 160,000 are private sector tenants. Only 88,593 private sector rental properties exist in the state, about 7-8% of the housing stock.  When you consider that agents believe that investors purchase roughly 40% of new build output, (running at 80,000 units currently) the disparity between the PRTB’s figures and the probable actuality is remarkable.


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## Guest107

*My 2Band Theory.*



			
				coinfused said:
			
		

> we're FTB's and this week we've had 3 ea's calling US about properties in the 360-381 market- unheard of as we've been browsing for
> about 2 years and actively looking to buy since Feb.


 OOOOOH thats unheard in recent years . How long had they your number befoere they deigned to ring you ???? 


> We're in a large town just outside the Dublin limits, commuter belt, prices rose by 90k in 18 months on an average 3 bed. 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- but they're definitely dropping as is demand.


 be warned that prices in your Mullingars will fall more than the prices in your Maynooths , and they more than the prices in your Milltowns. The commuter belt will shrink perceptibly as people hold out for somewhere at the same price but closer to Dublin. 


> We viewed last night and said we didnt like it and ea practically held us hostage trying to get us to look at other properties.


 How far out of Dublin

Carlow/Gorey/Virginia (Band 1)
Mullingar/Dunleer/Kells/Ardee/Arklow (Band 2)

or closer.

Bands 1 and 2 will simply evaporate as a commutable proposition in any noticeable downturn . 

Nothing west of Kinnegad / North of Drogheda or Navan or South of Greystones  and Kildare will shift if its an FTB property. 

Thats _2packs 2Band prediction for ya _.


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## bearishbull

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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## ClubMan

Was the _TCD _bloke the one bemoaning the fact that people (individuals, developers, the state) are (shock horror!) making money out of the property market and basically encouraging interference in the market?


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## bearishbull

ClubMan said:
			
		

> Was the _TCD _bloke the one bemoaning the fact that people (individuals, developers, the state) are (shock horror!) making money out of the property market and basically encouraging interference in the market?


I think he was just saying that the cost of the land is over half the price and that like in other countries land hoarding and rezoning windfalls should be gotten rid of by regulation.


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## coinfused

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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## Guest107

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


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 

This guy shifted none of these properties between  and 5th  (today) and has not dropped his prices either.


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## CGorman

2Pack said:
			
		

> be warned that prices in your Mullingars will fall more than the prices in your Maynooths.



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.


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## whizzbang

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
> 
> This guy shifted none of these properties between  and 5th  (today) and has not dropped his prices either.



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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## whizzbang

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.


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.


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## Guest107

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.


 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).


 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.


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  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  . _2packs 2Band prediction _will come to pass


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## Duplex

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...


 
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.


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## SineWave

> 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?


 
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.


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## Raskolnikov

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


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.


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## whizzbang

Raskolnikov said:
			
		

> The next window for an interest rate hike is in August.



I'm afraid its actually tomorrow for the ECB! http://www.ecb.eu/home/html/index.en.html


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## Duplex

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.


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## whizzbang

Duplex said:
			
		

> _"IT WON'T HAPPEN HERE"_



St Patrick drove the property crashes from Ireland.


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## ubiquitous

Duplex said:
			
		

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



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.



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.


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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## Duplex

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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## walk2dewater

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.


 
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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## OilKing

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.


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## bearishbull

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.


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## thewatcher

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"


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## JohnBoy

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.


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## beattie

Is there a change in the governments stance....

http://www.rte.ie/business/2006/0706/ecb.html

If so this could reach a wider target audience than the warnings given by publications such as The Economist.


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## Duplex

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



Double ditto.


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## walk2dewater

JohnBoy said:
			
		

> Since then house price inflation has substantially moderated and the country is getting used to house price gwoth of inflation + 2%/4%.


 
UK is not experiencing a 'soft landing' (whatever that is). Actual achieved prices are all over the place, parts of London are holding up but it's mostly down year-on-year, and more telling, inventories are piling up.

The UK property market will wilt in the face of a mere further 0.25% BoE increase, which Mr Brown desparately wants to stall.

UK M3 expanded around 12% in last year, Eurozone about 8%. These are closer to the man-on-the-street price inflation rates. Hence house prices would have to grow at least this much to not fall in value. So the mythical soft landing of +1,2,3,4,5,%... pa. growth (take your pick from the Estate Agent Economists pronoucements) is just that, mythical.

The inescapable fact is property prices are finally unwinding everywhere from a period of exaggerated growth due to real-negative rates .


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## Guest107

beattie said:
			
		

> If so this could reach a wider target audience than the warnings given by publications such as The Economist.


Noted that Cowan is warning the investors to stay out from now on but not the FTB's .


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## Calina

My guess is he wants investors to look at alternative investments, possibly state enterprises being privatised, for example. That being said, if investors accounted for 40% or so of new property purchases last year, their absence could still have an impact on average prices.


----------



## walk2dewater

http://news.bbc.co.uk/2/hi/business/5153140.stm

But apparently "no crash" according the Economist employed by the biggest UK mortgage lender.


----------



## Duplex

2Pack said:
			
		

> Noted that Cowan is warning the investors to stay out from now on but not the FTB's .



Yes interesting that Biffo should single out speculators for his cautionary words, I wonder why?


----------



## jpd

While I agree that property is over-valued, I remember that my parents finally paid off their mortgage in 1987, having started in 1952 - ie they had a 35 year mortgage (I think the interest rate was 3.5%) so long term mortgages are not completely new but had just disappeared from the scheme for a long time - presumably the high inflation/high (nominal) interest rates of the 70s/80s did for them.


----------



## room305

Duplex said:
			
		

> Yes interesting that Biffo should single out speculators for his cautionary words, I wonder why?



Certainly is interesting. I think he is again trying to deflect responsibility for the coming crash from the government. Ask the man on the street why prices have skyrocketed and he will tell you that the speculators snapping up all the houses drove prices beyond realistic levels. When prices fall, Biffo & co. will say prices are returning to a reasonable level (the mythical "soft landing") now that the speculators are getting out.

If I was a FF'er I'd be very worried about how a crash might affect election results next year.


----------



## Guest107

room305 said:
			
		

> If I was a FF'er I'd be very worried about how a crash might affect election results next year.


They know its gone too far and are almost afraid to intervene. They cannot see how to gently talk it down. 

The Kildare by election scared the crap out of them. They realise that commuter belt Ireland is full of young FTBs with young kids forced ever further out of the main towns . The places they go have no schools and no facilities. They were tiny villages or small towns in 1995 , before the tiger. 

Furthermore  when the _2Pack 2Band theory_ is proven correct in the Dublin area they will find themsleves hammered in Meath and in Kildare and Carlow and Wexford and Louth and also in the western suburbs of Dublin where there ARE NO SCHOOLS  and even on the eastern fringes of Biffos power base in Edenderry. 

_You simply cannot be in power for 10 years while planning nothing and delivering nothing tangible and useful in all that time. _

No roads, no schools, no proper telecommunications bar mobiles , no hospitals , no decent primary healthcare , no  trains . Plenty of manana manana manana promises and National Development yokes and National Spatial  guff and launches and relaunches and speech after speech but NO  concrete in the ground lads .  Thats the lot of the outer bander in the Pale and in Cork and Limerick and Galway and elsewhere . 

Furthermore as the outer band demand collapses (as it will shortly) those poor FTBs are stranded in negative equity out there and cannot get back closer to the town they ALWAYS wanted to live in or near ....but were forced out . Yet their vote is in that outer band and they will use that vote. 

The Pale (in my example) is not PD territory but it IS FF territory , core 2 out of 3 seats in a three seater kind of territory and it always was . 

Until now.


----------



## SidTheDweeb

http://www.rte.ie/business/2006/0706/britain.html

[FONT=Arial, Verdana, Helvetica]UK house prices fall 1.2% in June - Halifax[/FONT]


----------



## robd

*ECB Rates unchanged*



> 6 July 2006 - Monetary policy decisions
> 
> At today’s meeting the Governing Council of the ECB decided that the minimum bid rate on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility will remain unchanged at 2.75%, 3.75% and 1.75% respectively.
> 
> The President of the ECB will comment on the considerations underlying these decisions at a press conference starting at 2.30 p.m. today.
> 
> European Central Bank
> Directorate Communications
> Press and Information Division
> Kaiserstrasse 29, D-60311 Frankfurt am Main
> Tel.: +49 69 1344 8304, Fax: +49 69 1344 7404
> Internet: http://www.ecb.int
> Reproduction is permitted provided that the source is acknowledged.



ECB Rates Unchanged


----------



## miju

*Re: ECB Rates unchanged*

and the party goes on


----------



## bogwarrior

most people contributing to this thread seem to be relishing the prospect of a severe correction in Irish property prices - what is the motivation behind this ??

1) to see the government get a serious black-eye?
2) to see their neighbour with the 2nd and 3rd house get a black eye?
3) to eventually be proved correct after 8 years of saying 'property prices can't keep rising' 
4) genuine empathy with first-time buyers being priced out of the market

I get the feeling that, human nature being what it is, we will all say (4) but options 1-3 are probably the primary motivations.......


----------



## miju

well in my case i'm a FTB priced out but then again I dont mind as I'm currently saving a fortune as my rent is much lower than my mortgage would be for the same place in Dublin

so after 4 it would be 3 (haven't been saying for 8 years though , only about 1 year) , 1 and 2


----------



## redo

bogwarrior said:
			
		

> most people contributing to this thread seem to be relishing the prospect of a severe correction in Irish property prices - what is the motivation behind this ??
> 
> 1) to see the government get a serious black-eye?
> 2) to see their neighbour with the 2nd and 3rd house get a black eye?
> 3) to eventually be proved correct after 8 years of saying 'property prices can't keep rising'
> 4) genuine empathy with first-time buyers being priced out of the market
> 
> I get the feeling that, human nature being what it is, we will all say (4) but options 1-3 are probably the primary motivations.......



5) Seeing property speculators being caught with their pants down when prices drop.  That would be nice.


----------



## Guest107

redo said:
			
		

> 5) Seeing property speculators being caught with their pants down when prices drop.  That would be nice.


All 5 actually   ( but not equally weighed) and as regards 2) Only the ones who keep annoying me with their constant  "you cannot ever lose on property" guffins . 

Some of do not believe that a large property bubble is a substitute for a real economy producing real goods and services  .

Some of us do not belive that national newspapers uniquely  full of colour property supplements constitutes a FREE PRESS 

Some of us do not believe that a tent full of yahoos  at the Galway Races is _government for the people and by the people and of the people _. 

Nor do some of us believe that a 35 year sentence to financial imperillment far beyond Dunboyne is a fair consequence of the incompetence of our government parties, PD and FF ,  in a country with scads and scads and scads of usable and serviceable land available .


----------



## ninsaga

redo said:
			
		

> 5) Seeing property speculators being caught with their pants down when prices drop.  That would be nice.



But why? What is actually wrong with speculating... thats what keeps the wheels turning in the economy.

Are you just peeved off that you did not get in on the act a few years back & now you've lost out on a few 100k of easy money?

..... a nation of begrudgers etc etc..


----------



## miju

to be honest if you own one house you've made little to no profit from 100k price rise (seeing as how you need to sell to get your profit and other houses will be in the same price realm) IMHO alot of people seem to forget this

secondly, if someone has made 100k by actually buying a 2nd property and then selling it on then fair balls to em


----------



## room305

I spoke to someone from Florida recently and he summed up my feelings towards this farce. He was priced out of the market originally by speculators (many Irish investors) and is currently watching property prices tumble.

He said that it is all very well being able to pick up the house of your dreams for a song but it's ultimately pointless if you lose your job at the same time.

It's not just jobs in construction that will go lads, it'll be a full scale recession. Nobody should be happy when this deck of cards comes tumbling down (no matter how softly it does so).


----------



## redo

ninsaga said:
			
		

> Are you just peeved off that you did not get in on the act a few years back & now you've lost out on a few 100k of easy money?



Not at all.  Have a nice house with wife and kid.  No investment properties.

Please note, I have no beef with property investors, whom after carefull analysis, will see it as a long term investment and know what they are getting into.


----------



## Duplex

What riles me is the sheepishness of people lead into debt slavery for the price of a humble piece of land and an assortment of p poor building materials.  The fact that this tardy charade has been foisted on people on so many occasions makes the farce only more exasperating.   The whole bubble adds not one whit to the advancement of society.


----------



## redo

It is only easy money if you're able to sell it.  If you have sold at this stage, *ninsaga, * and creamed of a couple 100k, well then good man.  A man with some financial 'savvy'.

It is the more recent speculators bought in poorly serviced areas of Dublin, Kildare, Meath etc. not doing so with their eyes open.  They only see dollar signs (as in the cartoons) and can't afford to take a loss.  

The Eircon floatation should serve as a working example to these speculators.  Eircon shareholders took a massive hit at one stage, but, at least they were able to dump the shares back onto the market and realise a loss.  Some property speculators create an imaginary safety net by telling themselves, "Sure, if it doesn't work out, I can always sell it".  Property is one of the most illiquid assets out there and the property market will be a different beast when it becomes a sellers' market.  These novice speculators need their wings clipped.


----------



## ninsaga

Redo... 1st you say....



			
				redo said:
			
		

> Seeing property speculators being caught with their pants down when prices drop. That would be nice.



Then you say.....



			
				redo said:
			
		

> Please note, I have no beef with property investors, whom after carefull analysis, will see it as a long term investment and know what they are getting into.



and finally....



			
				redo said:
			
		

> These novice speculators need their wings clipped.



...does this mean so that if someone gets it right as far as you are concerned then good for them & also as far as you are concerned if they get it wrong that they had it coming anyway & deserved it? I'm just trying to understand your logic here?


----------



## Guest107

*Florida is about a year ahead of us*

The peak was c May 2005 around 1 year before the Irish peak . All sourced from Palm Beach Post 

The newly and happily renting 



> "It was the same price as an apartment, so we might as well get the house," Lewis, a registered nurse at Columbia Hospital, said of their decision.
> _Welcome to the flip side of the housing boom, where renters can afford brand-new dream homes while_
> _landlords struggle to meet their monthly mortgage payments._


The mega commute of 80 miles each way 



> T_his canyon between paychecks and home prices bars even well-paid middle-class workers from homeownership and seriously threatens the county's economic growth. _The housing crisis is so acute that business leaders now have joined housing advocates to demand that government do something about the affordability crunch.


and Flipper Flop



> If he doesn't sell the four-bedroom home, he'll have to walk away from contracts on two other investment homes — one in the new Port St. Lucie community where he lives and another in West Palm Beach. If he pulls out of those deals, he's down $80,000.
> _ "I was never much of an investor before this wild craze began, and somehow I backed into it," Passarelli said._
> So it has gone for many less-experienced flippers who bought heavily into pre-construction deals in large communities on the Treasure Coast. Instead of the quick riches they expected, many have encountered a slow market in which buyers are hard to come by.
> Some are stuck carrying mortgages longer than expected, cutting their asking prices or walking away from contracts altogether.


This will be our lot in 2007 / 2008 . 

The area is not in recession yet . Thats the good news.


----------



## Calina

ninsaga said:
			
		

> Redo... 1st you say....
> 
> 
> 
> Then you say.....
> 
> 
> 
> and finally....
> 
> 
> 
> ...does this mean so that if someone gets it right as far as you are concerned then good for them & also as far as you are concerned if they get it wrong that they had it coming anyway & deserved it? I'm just trying to understand your logic here?


Property investors and property speculators are actually not the same. Investors tend to be in it for the long haul, make decisions based on actual income derived from the asset (rent, in other words). Speculators expect to make money out capital appreciation, and so rent is of little importance to them. Currently, a lot of recent entrants to the rental market supply side are subsidising their tenants to the tune of a couple of hundred a month on the grounds that capital appreciation will make the difference for them. In property, because capital tends to be tied up, it's a very risky thing to do. If the market even flattens, without a corresponding increase in rent, people dependent on capital appreciation could be in deep trouble. 

The problem is a lot of new landlords are of the opinion that they can, of course, pass on increases to their tenants. The problem is they can only do that if the market allows them to. Currently, it's not happening. Rents are more or less flat, and dropping in real terms. There is already an over supply of rental accommodation, there is anecdotal evidence to suggest that a lot of "investment" properties were not let because capital appreciation was more than adequate to turn a profit. To my mind, there's a lot naiveté in that sector of the market. 

Me personally, I don't have a lot of time for people who assumed or continue to assume that they can make a killing on capital appreciation. They're not usually good landlords and they are not well up on their duties as landlords. On the other hand, investors who recognise that rent is the only guaranteed income, and make their decisions accordingly are likely to make better landlords and not make ill considered decisions based on "making a killing because property always goes up". Depending on capital appreciation is a gamble because until you sell the property, the profit is nothing other than notional.


----------



## redo

ninsaga said:
			
		

> ...does this mean so that if someone gets it right as far as you are concerned then good for them & also as far as you are concerned if they get it wrong that they had it coming anyway & deserved it? I'm just trying to understand your logic here?


 Yes in a nutshell.

Those who are already out, are no longer in the market and have cashed in.  They probably saw what was on the horizon and have done well.  Therefore we can assume they are no longer speculators and have acted wisely.  I don't think there many speculators in the market whom have cashed in to-date and have made a loss.  Also, note that I have distinguised between investors and those speculators who are gambling on capital appreciation.  Good Investors will have factored in potential losses, some speculators have not.

I would like to hear some speculators complaining down the local pub about the investment property they bought in West Dublin/Bulgaria/Dubai, and how the property brochure said it would increase in value. I would feign sympathy, and offer, "Sure, at least you can sell it !".


----------



## room305

redo said:
			
		

> Those who are already out, are no longer in the market and have cashed in.  They probably saw what was on the horizon and have done well.  Therefore we can assume they are no longer speculators and have acted wisely.



You might be giving them too much credit (as distinct from the banks who were probably giving them too much credit as well qwa qwa). I cannot think of a single person I know who has cleaned up selling an investment property who has not then piled the money back into more property. In many cases, the only reason they sold was to raise liquidity and so put deposits down on several more houses.


----------



## Guest107

room305 said:
			
		

> I cannot think of a single person I know who has cleaned up selling an investment property who has not then piled the money back into more property.


I must confess that all the specimens of the breed that I know _AND WHO ENTERED THE MARKET POST 911_ when the cheap money tap kicked in are the same as that , and I have advised them to cash in and WAIT before they pile in again.

Its the key difference between Long Term Investment and Mania . All the ones I know have erred on the side of Mania.

I give up , que sera sera  !


----------



## redo

room305 said:
			
		

> You might be giving them too much credit (as distinct from the banks who were probably giving them too much credit as well qwa qwa). I cannot think of a single person I know who has cleaned up selling an investment property who has not then piled the money back into more property. In many cases, the only reason they sold was to raise liquidity and so put deposits down on several more houses.


Quite.  Like people who plough back the "profit" back into pryamid schemes.


----------



## gearoidmm

ninsaga said:
			
		

> But why? What is actually wrong with speculating... thats what keeps the wheels turning in the economy.
> 
> Are you just peeved off that you did not get in on the act a few years back & now you've lost out on a few 100k of easy money?
> 
> ..... a nation of begrudgers etc etc..


 
Like others have said, there is a big difference between speculators and investors (it's just that most people in this country can't see the difference).

In the book 'The Undercover Economist', the author tells of the example of a wall street mutual fund manager who took all his funds out of stocks in 1997 because he thought that the market was seriously overvalued.  He was ridiculed by his peers and the business press and actually was fired as the fund manager in January 2000 (2 months before the market crash).  I feel a bit like him as I have been renting for the last 2 years, by choice, not because I cannot afford a house, despite the fact that everyone I know has bought in the interim and are 'making' piles of money.  Everyone from my mother to my next door neighbour is telling me to buy and I still get funny looks when I say that I rent.  

I don't begrudge my friends a penny of that money, I made my choice and that's that but the fundamentals are just not there in this boom and I fear that it is all going to end in tears.  The longer that it lasts, the harder it will be for the economy to recover.


----------



## Remix

I rent on a road of small semis in D6W which have been selling for just over a million from about 100k back in the 90's.

A couple of weeks ago my wife was walking past two neighbours chatting and one said to the other "we live on a road of millionaires now". 

The comment seemed to be timed for the moment she passed and they knew damn well that we rent on the road.

On top of all the other reasons for wanting a correction (potential buyers, more balanced economy long term etc) we are looking forward to welcoming those neighbours back to the middle class


----------



## bearishbull

SidTheDweeb said:
			
		

> http://www.rte.ie/business/2006/0706/britain.html
> 
> [FONT=Arial, Verdana, Helvetica]UK house prices fall 1.2% in June - Halifax[/FONT]


Prices in parts of england have been falling for months , check out the bbcs interactive price checker,prices in many parts of manchester are down 2-5% in the last quarter.
http://news.bbc.co.uk/1/shared/spl/hi/in_depth/uk_house_prices/regions/html/region2.stm


----------



## gearoidmm

Back to the original question of the thread - there were queues outside Sherry Fitzgerald new homes again this morning.  Still plenty of people believing in this property market


----------



## thewatcher

gearoidmm said:
			
		

> Back to the original question of the thread - there were queues outside Sherry Fitzgerald new homes again this morning. Still plenty of people believing in this property market


 
I don't doubt it,i've plenty of well educated friends with good jobs in the 25 - 35 bracket who rarely watch the news,read the papers etc. I used to try and suggest that maybe selling off that investment property and paying down the ppr wasn't the end of the world, but it didn't go down well with some so i kind of just said nothing after a while.
The first a lot of the new "rich" in this country are going to know about a property crash,is when it's already happened.


----------



## bearishbull

thewatcher said:
			
		

> I don't doubt it,i've plenty of well educated friends with good jobs in the 25 - 35 bracket who rarely watch the news,read the papers etc. I used to try and suggest that maybe selling off that investment property and paying down the ppr wasn't the end of the world, but it didn't go down well with some so i kind of just said nothing after a while.
> The first a lot of the new "rich" in this country are going to know about a property crash,is when it's already happened.


 
They've been brainwashed by the cult of property where mantra's such as "prices only ever rise" and "rent is dead money" are commonly heard.


----------



## CGorman

Try this - ask everyone you know with investment property what the ECB is.

I've asked a few well-educated and rather shrewd people; and so far two out of three did not know! Those two have a total of 4 large mortages - all taken out in the past 4 years!


----------



## joe sod

"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."



The British may have stopped house prices from rising 2 years ago and have so far avoided a crash. But they are far from out of the woods yet. Thhis is a global issue caused by the FED and the Bank of Japan. If the FED in America and the Bank of Japan are forced to raise interest alot further than they have so far the Bank of England will be force to follow them along with the European Central Bank. They don't have an economy immune from globalisation either


----------



## JohnBoy

I am well aware of the problems facing the UK property market and even though I am a homeowner here I still think that the country has only postponed the correction - not avoided it. Obviously I did not make myself clear in my first poost. I fully subscribe to the liquidity driven / asset bubble hypotehsis that many posters here refer too.

My point was that the UK achieved a slowdown in property price inflation whilst the economy continued to perform well. The BoE base rate is still at a fairly modest level (by historical standards) so the financial screws have yet to be properly tightened - again I stress that the day of judgement has only been postponed.

I wonder if the Irish bias towards property is changing gradually and will this have an effect long before interest rate increases or falling employment make property unaffordable?


----------



## beattie

gearoidmm said:
			
		

> Back to the original question of the thread - there were queues outside Sherry Fitzgerald new homes again this morning. Still plenty of people believing in this property market


 
I wonder did any of them see George Lee's report about impending increases in interest rates when they got home? I thought it was pretty hard hitting for a piece of journalism in this country. I wonder are these queues smaller than say 6,12 months ago.


----------



## Duplex

I'm beginning to reach a conclusion that  housing supply may have met demand in Ireland.  That's demand from investors happy to yield 2-3% on their investments, demand from first time buyers happy to borrow at many multiples of their income (with parental support, or with the aid of doctored wage slips).  Rents are falling in real terms,  there are tens of thousands of empty homes and consumer debt is vast.  There is an ample supply of zoned land to  meet demand in the medium term.   It could be that the Irish Property Bubble has reached a demand/supply equilibrium before the liquidity squeeze begins in earnest.    

However as rates rise, capital growth dissipates, the ability to re-mortgage vanishes and  jobs bleed from the construction and dependent sectors; the market will be exposed to a test of fundamentals, and it will fail.


----------



## beattie

Duplex said:
			
		

> I'm beginning to reach a conclusion that housing supply may have met demand in Ireland. That's demand from investors happy to yield 2-3% on their investments, demand from first time buyers happy to borrow at many multiples of their income (with parental support, or with the aid of doctored wage slips). Rents are falling in real terms, there are tens of thousands of empty homes and consumer debt is vast. There is an ample supply of zoned land to meet demand in the medium term. It could be that the Irish Property Bubble has reached a demand/supply equilibrium before the liquidity squeeze begins in earnest.
> 
> However as rates rise, capital growth dissipates, the ability to re-mortgage vanishes and jobs bleed from the construction and dependent sectors; the market will be exposed to a test of fundamentals, and it will fail.


 
Yes it seems to me that there is an avalanche of development land/sites coming to market over the past 6 months (area of Ballsbridge for example). Unfortunately for the purchasers of this land it will takes years after planning is secured, building etc before these come to market so when they do it will not be in the crazy times like now. I feel that the boat may have been missed by those who are getting there hands on this land now


----------



## thewatcher

beattie said:
			
		

> Yes it seems to me that there is an avalanche of development land/sites coming to market over the past 6 months (area of Ballsbridge for example). Unfortunately for the purchasers of this land it will takes years after planning is secured, building etc before these come to market so when they do it will not be in the crazy times like now. I feel that the boat may have been missed by those who are getting there hands on this land now


 
According to daft alone there's 143 rental properties in ballsbridge at the moment,probably the highest concentration in the entire city that's hardly a shortage now.

http://www.daft.ie/searchrental.daft?s%5Bcc_id%5D=ct1&s%5Ba_id%5D%5B%5D=180&s%5Bmnp%5D=&s%5Bmxp%5D=&s%5Bbd_no%5D=&s%5Bpt_id%5D=&s%5Bmove_in_date%5D=0&s%5Blease%5D=&s%5Bfurn%5D=0&search=Search+%BB&more=&tab=1&s%5Bsearch_type%5D=area

Very interesting is the fact that there is nearly 200 properties for sale in just celbridge and maynooth area's alone,has the offloading begun ?

http://www.daft.ie/searchsale.daft?s%5Bcc_id%5D=ct1&s%5Ba_id%5D%5B%5D=199&s%5Ba_id%5D%5B%5D=2818&s%5Bmnb%5D=&s%5Bmxb%5D=&s%5Bmnp%5D=&s%5Bmxp%5D=&s%5Bpt_id%5D=&search=Search+%BB&more=&tab=1&s%5Bsearch_type%5D=area


----------



## bearishbull

Theres several factors coming toghether now that makes a correction much more likely.
-supply is at or coming close to meeting demand
-the boundaries of affordibility are close to being reached (once mortgage rates hit 5% next year the stress test will have to be done at 7% so amounts bank wll lend will drop),ya cant buy if ya cant borrow
-rates are rising and the markets think they will rise more than previously thought earlier this year
-inflation in irish economy is eating into peoples income after non housing living costs,whats the point in a 4% pay rise if inflation errodes all of it
-consumer confidence in ireland has been down considerably in last 6 months despite the ssia's etc
-large and increasing amount of bearish/negative/anxious sentiment in media about house prices ,debt etc


----------



## redo

bearishbull said:
			
		

> -supply is at or coming close to meeting demand


Considering that we always see the property market 1Q retrospectivly, I would think the supply has easly surpassed demand.  

40% (32,000) of all new builds in the first quarter bought by investors.  This is extremely dangerous.  These people don't need a home, most probably in it for capital appreciation.  At the drop of a hat the could simply decide that it is too risky to be in the property market, stampeding like wilderbeast in the opposite direction.


----------



## Duplex

bearishbull said:
			
		

> Theres several factors coming toghether now that makes a correction much more likely.
> -supply is at or coming close to meeting demand
> -the boundaries of affordibility are close to being reached (once mortgage rates hit 5% next year the stress test will have to be done at 7% so amounts bank wll lend will drop),ya cant buy if ya cant borrow
> -rates are rising and the markets think they will rise more than previously thought earlier this year
> -inflation in irish economy is eating into peoples income after non housing living costs,whats the point in a 4% pay rise if inflation errodes all of it
> -consumer confidence in ireland has been down considerably in last 6 months despite the ssia's etc
> -large and increasing amount of bearish/negative/anxious sentiment in media about house prices ,debt etc




Lets not forget the frail pricing power of Irish Labour in a globalised economy. When the US enters a downturn Chinese overcapacity and hyper cheap labour will seek out any and every opportunity to sustain itself.


----------



## bearishbull

Duplex said:
			
		

> Lets not forget the frail pricing power of Irish Labour in a globalised economy. When the US enters a downturn Chinese overcapacity and hyper cheap labour will seek out any and every opportunity to sustain itself.


im talking short term here,lets not go too far off topic or we'll be locked down very quickly!


----------



## Duplex

Locked down? ya make this place sound like a prison BB. Wooops off topic.


----------



## CCOVICH

If anyone doesn't like the moderation on AAM they are free to stick to their own sites.


----------



## Remix

Supply soars:

Bank of Ireland:



> _In the construction sector, 100,000 units to be completed in 2006 – a considerable upside on our previous forecast for the year of 85,000 completions and the actual 81,000 completions recorded in 2005_


----------



## ubiquitous

Duplex said:
			
		

> Lets not forget the frail pricing power of Irish Labour in a globalised economy.



One word: SIPTU


----------



## OilKing

I wish to congratulate WTTW on his predictions so far. I can remember WTTW predicting last december on another thread on AAM that once rates start going up we would have a "Race against Rates". So far this has been bang on as people rush to buy property due to the fact that rising rates reduces what home purchasers can borrow. This I think is exactly what is being witnessed in the Real Estate market today where we have the strongest borrowings recorded since 2000.

The big question is at what interest rate prospective buyers will be priced out at. Then we will have the stand off between homeowners wishing to sell but not drop prices and FTBs being unable to get loan approval despite 35 year terms and all the other schemes that the banks have to allow people borrow way beyond their means.

The next 6 months - 1 year is going to be very interesting indeed.


----------



## Guest107

OilKing said:
			
		

> The next 6 months - 1 year is going to be very interesting indeed.


May I posit _2Packs DAFT EFFECT _

As EAs are swamped with sell orders they will refuse to accept any more IN CERTAIN AREAS . Therefore the sellers who will have been refused by EAs will sell directly through the likes of Daft or Buy and Sell etc .

Keep an eye on whether certain areas fall victim to this Daft Effect as the market tanks and the truly desperate wish to offload quickly .  If there are no pics then assume a Magnolia painted ex rental horror awaits the viewer


----------



## soma

2Pack said:
			
		

> May I posit _2Packs DAFT EFFECT_


2Pack - The David "must give everything a funky label" McWilliams of AAM.


----------



## redo

soma said:
			
		

> 2Pack - The David "must give everything a funky label" McWilliams of AAM.


I can just see the pen in his hand right now.


----------



## Guest107

soma said:
			
		

> 2Pack - The David "must give everything a funky label" McWilliams of AAM.


Well speaking of _2Packs DAFT effect_ , thewatcher set me thinking scientifically  about it , thanks head .

Maynooth POP c.10000 Daft Properties for Sale 120 
Celbridge  POP c.15000 Daft Properties for sale 75 

Are EAs in Maynooth already saying their books are full  and will they refuse to accept more sales commissions until they clear them and are the sellers going to Daft to offload themselves . 

Is Maynooth rather than Celbridge an example of _2Packs DAFT Effect _???


----------



## CCOVICH

Re. Maynooth-there are quite a few properties still on DAFT that were sold some time ago, but are still 'renewed' on a daily basis.


----------



## redo

2Pack said:
			
		

> Well speaking of _2Packs DAFT effect_ , thewatcher set me thinking scientifically  about it , thanks head .
> 
> Maynooth POP c.10000 Daft Properties for Sale 120
> Celbridge  POP c.15000 Daft Properties for sale 50
> 
> Are EAs in Maynooth already saying their books are full  and will they refuse to accept more sales commissions until they clear them and are the sellers going to Daft to offload themselves .
> 
> Is Maynooth rather than Celbridge an example of _2Packs DAFT Effect _???



Maynooth will definatly have a higher proportion of investment properties as it is a university town.


----------



## bearishbull

Media covering the pricing out of FTB's again today http://www.unison.ie/irish_independent/stories.php3?ca=9&si=1647426&issue_id=14314 , every time rates rise less can be borrowed and with incomes not rising by much more than inflation even less can be borrowed. But mortgage broker has the answer! BUY with a friend ! Maybe they should reconsider the market fundamentals when the only way to buy for many FTB's is with a friend !


----------



## redo

On myhome.ie there are 123 properties for sale in Lucan.  This is highest figure I've seen in a while.  I doubt many of them are leftovers from the auction season.


----------



## redo

114 in Clondalkin


----------



## redo

144 in Clonsilla/Mulhudard/Clonee.  I have almalgamated these as some properties in Mulhudard are said to be in Clonsilla, and also with Clonee


----------



## Guest107

redo said:
			
		

> 114 in Clondalkin



Since I first explained my  _2Pack Daft Effect _to yiz in here the number of properties for sale on Daft has risen from 14088 to 14096 , thats nationally_. 

and Thats in 30 mins 

_


----------



## bogwarrior

not being uptodate with the wonderful workings of the estate agent business, I don't understand the concept of estate agents refusing to sell houses in certain areas because they have too many already on their books (other than not having the staff to show them off).

Wouldn't they prefer to have at least the possibility of earning the commission on a sale rather than it going to another estate agent or the seller? or am i missing something really obvious here? (hey its a Friday afternoon!)


----------



## Howitzer

redo said:
			
		

> On myhome.ie there are 123 properties for sale in Lucan. This is highest figure I've seen in a while. I doubt many of them are leftovers from the auction season.


 


			
				2Pack said:
			
		

> Since I first explained my _2Pack Daft Effect _to yiz in here the number of properties for sale on Daft has risen from 14088 to 14096 , thats nationally_. _
> 
> _and Thats in 30 mins _


 
These are the worst attempts at manufacturing statistics I've seen in quite a while. I know some people are dying to see some sort of slowdown/crash but this is getting rediculous. This decending into silly season speculative nonsense.


----------



## redo

bogwarrior said:
			
		

> not being uptodate with the wonderful workings of the estate agent business, I don't understand the concept of estate agents refusing to sell houses in certain areas because they have too many already on their books (other than not having the staff to show them off).
> 
> Wouldn't they prefer to have at least the possibility of earning the commission on a sale rather than it going to another estate agent or the seller? or am i missing something really obvious here? (hey its a Friday afternoon!)


Most viewings are done in the evenings and weekend.  They simply would not have enough staff to give the viewings.


----------



## Guest107

Howitzer said:
			
		

> These are the worst attempts at manufacturing statistics I've seen in quite a while.


And its *14101* now. This is not manufactured , anybody can search it and can easily confirm my figures OR OTHERWISE . I manufactured nothing and am in a real sense only the messenger. Can you explain whey the figures continually rise as distinct from otherwise ...unlike houses for rent which bobble up and down a bit. 

The number of properties for sale is basically rising as we speak .


----------



## bearishbull

Wait untill theres significant and less anecdotal evidence, daft is getting more popular for selling,its users/sellers are increasing, your stats prove nothing tbh.


----------



## walk2dewater

Howitzer said:
			
		

> These are the worst attempts at manufacturing statistics I've seen in quite a while. I know some people are dying to see some sort of slowdown/crash but this is getting rediculous. This decending into silly season speculative nonsense.


 
Is it a speculative boom in statistics making or not?  The begrudgers and doom-mongers say the yield is tiny on these unaffordable stats while the optimists and blue-sky-positivists say, "sure we have to have stats somewhere" and "spending money without stats is just dead money" etc....


----------



## redo

Howitzer said:
			
		

> These are the worst attempts at manufacturing statistics I've seen in quite a while. I know some people are dying to see some sort of slowdown/crash but this is getting rediculous. This decending into silly season speculative nonsense.


20% of the posters here don't believe you.


----------



## redo

Howitzer said:
			
		

> These are the worst attempts at manufacturing statistics I've seen in quite a while. I know some people are dying to see some sort of slowdown/crash but this is getting rediculous. This decending into silly season speculative nonsense.


 However, I tend to agree with you.  There is no real way to find out.  EA's won't release sensitive information relating to how long a property is unsold for.  If they did, people would avoid using them


----------



## Calina

Howitzer said:
			
		

> These are the worst attempts at manufacturing statistics I've seen in quite a while. I know some people are dying to see some sort of slowdown/crash but this is getting rediculous. This decending into silly season speculative nonsense.



Mind you, the

"You can't lose on property" and "property prices always rise" and "sure it's different here" are all scarily familiar for some reason, and about as founded on reality as the wish for property price falls.


----------



## Guest107

Calina said:
			
		

> "You can't lose on property" and "property prices always rise" and "sure it's different here" are all scarily familiar for some reason, and about as founded on reality as the wish for property price falls.


I feel I'm on the stats ladder now. 

*14105

Up 16 in less than 1 hour. 

A 0.1% increase in properties available nationally in under  one hour . 


*


----------



## Howitzer

2Pack said:
			
		

> I feel I'm on the stats ladder now.
> 
> *14105*
> 
> *Up 16 in less than 1 hour. *
> 
> *A 0.1% increase in properties available nationally in under one hour . *


 
And what were the equivalent numbers at 14:11 7th July 2005, 2004, 2003?


----------



## Guest107

Howitzer said:
			
		

> And what were the equivalent numbers at 14:11 7th July 2005, 2004, 2003?


My indexing started less than an Hour ago.

No falls in property available were seen, the only trend  from reading to reading was up.

Its now *14107* .


----------



## bearishbull

Howitzer said:
			
		

> And what were the equivalent numbers at 14:11 7th July 2005, 2004, 2003?


Exactly, stop posting these things unless you have comparitive stats and control for all factors which could cause aberrations.


----------



## Howitzer

2Pack said:
			
		

> My indexing started less than an Hour ago.
> 
> No falls in property available were seen, the only trend from reading to reading was up.
> 
> Its now *14107* .


 
Are there any seasonal variables we should take into account while analysing these figures?


----------



## Guest107

Delighted to report a downtick for the first time in my survey . 
*
14106 *, but still up 0.1% nationally since I started an hour back


----------



## Duplex

bogwarrior said:
			
		

> not being uptodate with the wonderful workings of the estate agent business, I don't understand the concept of estate agents refusing to sell houses in certain areas because they have too many already on their books (other than not having the staff to show them off).
> 
> Wouldn't they prefer to have at least the possibility of earning the commission on a sale rather than it going to another estate agent or the seller? or am i missing something really obvious here? (hey its a Friday afternoon!)


 
The first thing an estate agent will ask a vendor when taking on an instruction is “_What price are you hoping to achieve?”_ They ask this question to gauge where to pitch their ‘marketing proposal’.  In a market with more vendors than buyers the agent will be reluctant to take on the marketing costs of a ‘no hoper’.  Agents want turnover not a listings book full of vendors trying to break price ceilings in their particular neighbourhood.  

The mad spurt that was seen at the beginning of the year, (when stellar prices were set); will no doubt be influencing many vendors’ expectations.   However we may have passed the peak in the late spring.  The good agents will now be busily attempting to alter vendor’s price ambitions.


----------



## southsideboy

I can't believe people actually think that this sort of anecdotal analysis is in any way useful. Daft is clearly becoming more popular and HOK which is a very big agent recently started adding its properties to Daft. Other big agents will probably follow suit so I would expect the amount of properties to rise. Also if you wanted to compare figures, you could look at Sherryfitzgerald's website. The amount of properties they have listed in South Dublin have dropped by about 70 in the last month which you would expect at this time of year. Perhaps there may be a slowdown in the outer suburbs but I live in Dublin 6 and can honestly say that properties prices are definitely still rising in the area and there have been some very strong auction results even in the last couple of weeks.


----------



## room305

OilKing said:
			
		

> I wish to congratulate WTTW on his predictions so far. I can remember WTTW predicting last december on another thread on AAM that once rates start going up we would have a "Race against Rates".



I think he called it correctly. www.itulip.com have made similar comments about the U.S. market where rising interest rates started to feed the housing bubble, however this was only temporary and soon the higher rates started to take their toll.


----------



## Guest107

southsideboy said:
			
		

> Also if you wanted to compare figures, you could look at Sherryfitzgerald's website.


 You have totally missed by Point. Sherryfitz _CONTROL _the entry of properties onto their website . 

MyHome deals with EAs too. The EAs _CONTROL_ the entries onto myhome, not the public.

DAFT allows _ANYBODY_ to sell A_NYTIME _and is a realistic simulation of what is FOR SALE and not of what do the EAs think the market will bear....with the rest stacked up waiting their turn on the sales ladder  ! 



> The amount of properties they have listed in South Dublin have dropped by about 70 in the last month which you would expect at this time of year. Perhaps there may be a slowdown in the outer suburbs but I live in Dublin 6 and can honestly say that properties prices are definitely still rising in the area and there have been some very strong auction results even in the last couple of weeks.


 I feel 'good' areas, mature suburbs with schools and shops and pubs with no skangers in them  , will only turn down after the marginal areas have and expect the slowdown to hit south dublin ...and sherryfitzers core demographic....6 months after its blatantly obvious elsewhere.  

You are correct. For now. 
*
14112* sez nobody is listening


----------



## elefantfresh

areas with no skangers? where?


----------



## Remix

I also live in D6.

We are tracking a number of properties in the 3/4 bed semi sector.

We are witnessing very quiet viewings and nobody is putting in bids.

There are several cases of bids below the asking price for extended periods of time.

In one case a house that went sale agreed was put back on the market for 45k less and now weeks later still has
no bids.

Again we are only monitoring a certain segment of the market in D6 (3/4 semi) but these are supposedly the houses in greatest demand!

Prices are high, rents are low and the investment risks are increasing in this area IMHO.

Could be a summer slowdown but the end of the summer season is likely going to be met with accelerating interest rate hikes from the ECB..


----------



## phoenix_n

I am following the market in D7 and D9. Properties are not selling at the moment but it is the quiet season. I have a booking deposit myself and am holding off on the contract until i do more research. The market could very well swing back into action in Sept/Oct but a house that is priced at 400,000 now is gonna look more expensive in sept/oct with the projected rate increases.

BTW, was talking to my german mate and told him the price of properties these days. He nearly had a heart attack.


----------



## SineWave

> I have a booking deposit myself and am holding off on the contract until i do more research.



Do you feel this is fair on the seller and/or other next best bidder. The seller may be suffering a bridging loan and/or possible purchase chain?

Hopefully for you they won't have the same standards should they get a higher offer.


----------



## phoenix_n

SineWave.....its a new build so no other parties involved. 

BTW even if it was a second-hand property i would not have any hestitation in cancelling if i thought the market was changing. Thats not low standards by the way but common financial sense.


----------



## walk2dewater

Remix said:
			
		

> Could be a summer slowdown but the end of the summer season is *likely* going to be met with accelerating interest rate hikes from the ECB..


 
Likely, is more like definitely.  How will the Estate Agent Economists spin "affordability" with rates at 4%, let alone the prospect of them going MUCH higher?

ECB rates are going MUCH higher and at a MUCH faster pace than STILL currently accepted.


----------



## Guest107

walk2dewater said:
			
		

> Likely, is more like definitely.  How will the Estate Agent Economists spin "affordability" with rates at 4%, let alone the prospect of them going MUCH higher?



And them properties are bucketing onto daft all afternoon

50 up in less than 3 hours, a 0.3% rise in properties for sale nationally and that in an afternoon during a seasonal lull. 

*14139 , sorry thats 14141 by the time I finished typing 
*


----------



## room305

walk2dewater said:
			
		

> ECB rates are going MUCH higher and at a MUCH faster pace than STILL currently accepted.



The existence of the ECB and the effect it has on peoples lives has not fully trickled down into consumer consciousness just yet. I think it is starting to however and more and more talk about interest rates on the news is ended with "and likely to continue to rise".

As hikes continue into early 2007 with no prospect of a slowdown, this will change. No longer will they think of it as "the odd hike" or some kind of temporary financial pain. People will find themselves with very little discretionary spending and looking at the prospect of a long year with interest rates heading ever upwards. 

Coupled with the usual post-Christmas debt burden I think it could be enough to bring about a really significant change in sentiment towards the housing market.

That said, who knows what goodies could be contained in the December give-away budget.


----------



## walk2dewater

2Pack said:
			
		

> And them properties are bucketing onto daft all afternoon
> 
> 50 up in less than 3 hours, a 0.3% rise in properties for sale nationally and that in an afternoon during a seasonal lull.
> 
> *14139 , sorry thats 14141 by the time I finished typing *


 
2Pack, might Friday afternoons be when they're uploading new data?  Or when new data appears for some IT system or marketing reason?  Still it's interesting, 15500 now...


----------



## Guest107

walk2dewater said:
			
		

> 2Pack, might Friday afternoons be when they're uploading new data?



It could be indeed , you see the odd downtick but the main movement  is upwards . 

14144  now  .


----------



## whizzbang

walk2dewater said:
			
		

> 2Pack, might Friday afternoons be when they're uploading new data?  Or when new data appears for some IT system or marketing reason?  Still it's interesting, 15500 now...


or it could be when people are all slacking off work and adding their house to daft for sale?


----------



## Guest107

whizzbang said:
			
		

> or it could be when people are all slacking off work and adding their house to daft for sale?



The word has gotten back to at least one EA about this thread and they are busy cleaning off their sold houses as we speak. 14130 and falling now 

Still up since lunchtime. 

This Daft Watching is good clean fun though


----------



## phoenix_n

Has anyone actually spoken to a respected EA and gotten his opinion on the current market?


----------



## southsideboy

2Pack said:
			
		

> You have totally missed by Point. Sherryfitz _CONTROL _the entry of properties onto their website .
> 
> MyHome deals with EAs too. The EAs _CONTROL_ the entries onto myhome, not the public.
> 
> DAFT allows _ANYBODY_ to sell A_NYTIME _and is a realistic simulation of what is FOR SALE and not of what do the EAs think the market will bear....with the rest stacked up waiting their turn on the sales ladder !
> 
> *14112* sez nobody is listening


 
But Daft have loads of estate agents using it too. So are they not controlling the properties as well by that logic?


----------



## Guest107

southsideboy said:
			
		

> But Daft have loads of estate agents using it too. So are they not controlling the properties as well by that logic?


Of course. However the unwashed are allowed in to party as well.  Yer man has cleared back to where I started at lunchtime now.

Dont worry , I'm still watching !


----------



## room305

phoenix_n said:
			
		

> Has anyone actually spoken to a *respected EA* and gotten his opinion on the current market?



Something of an oxymoron I should think.


----------



## southsideboy

Remix said:
			
		

> I also live in D6.
> We are tracking a number of properties in the 3/4 bed semi sector.


 
There are very few 3 and 4 bed semis in Dublin 6. The area is mainly period red bricks and they are still doing very well.

Also I think this year a lot of EA's got a bit carried away with AMVs and Asking Prices. For example a modern 4 bed mid terrace house that had an asking price of €1.2m last year in Sunbury Park in Dartry went to auction the other day with an AMV of €1.9m - not surprisingly it didn't sell. Sherryfitzgerald recently sold a house that is 600sqft bigger in the same development for €1.9m so I have no idea why they chose such a high AMV. So dropping asking prices isn't necessarily a sign of sale prices dropping. It is more an example of EA's thinking they can dictate prices. But I do agree that with interest rates rising prices will definitely slow and probably even fall in some areas. However, I'm yet to be convinced of a crash. I think that we'll all have to wait until Septemeber and October before we have a good idea of how the market stands.


----------



## phoenix_n

Yeah but there still is EA's out there who are not motivated by greed and have been in the business for years to know when a renovators dream means a damp invested hovel.

Just thinking that these guys must know as its their business to know.


----------



## whizzbang

phoenix_n said:
			
		

> Has anyone actually spoken to* a respected EA a*nd gotten his opinion on the current market?




could be hard to find..

(sorry, couldn't resist  )


----------



## SineWave

> BTW even if it was a second-hand property i would not have any hestitation in cancelling if i thought the market was changing. Thats not low standards by the way but common financial sense


. 

Phoenix_n, would you think it more ethical to at least get "off the bowl" while you wait for market changes.

 The seller may be interested in selling, another "buyer" may be interested in buying.


----------



## southsideboy

Wollie said:
			
		

> Nevertheless, I think my time has finally come, and possibly with a vengeance. I saw in yesterday's IT that the number of withdrawals was double the number of sales at auction.


 
Its July. What do you expect? This happens every year


----------



## southsideboy

Just wondering of all of those who are posting, who actually wants a crash in the property market? Maybe I'm wrong but it seems that some posters are actually hoping for a crash in the market which obviously will have very serious effects on the overall economy.


----------



## ninsaga

southsideboy said:
			
		

> Its July. What do you expect? This happens every year




..agree... the market is slower during the summer....it's not uncommen at this time of year for people to make viewing appointments but not bother showing up 'cause of 'the fine weather' or the world cup etc etc.

As regards predicting the doom 3 yrs ago..... a small bit off the mark there Wollie... but one day you will be right for sure!

ninsaga


----------



## SineWave

> As regards predicting the doom 3 yrs ago..... a small bit off the mark there Wollie... but one day you will be right for sure!



I folowed the doom predictors 3 years ago and sold a property for 379k. They are now selling at €600k (thanks Dundrum SC and Luas!).

I told my brother to follow the doom predictors last year and wait before purchase. They were ready to agree on the one they were renting at €400k. Last similar on estate sold at €500k.

Keeping zipped now!


----------



## Amygdala

> crash in the market which obviously will have very serious effects on the overall economy.


Is the economy so reliant on housing? What is wrong with FTBs ( who have also probably rented) wanting to get a basic human need at a fair price. Why is the market based on affordability spread over a full working career rather than actual value. When a price is set by squeezzing the last penny out of the buyer rather than the item purchased, it smacks of extorsion


----------



## Duplex

“Look at *market* fluctuations as your friend rather than your enemy; profit from folly rather than participate in it.” Warren Buffett quotes


----------



## walk2dewater

SineWave said:
			
		

> I folowed the doom predictors 3 years ago and sold a property for 379k. They are now selling at €600k (thanks Dundrum SC and Luas!).
> 
> I told my brother to follow the doom predictors last year and wait before purchase. They were ready to agree on the one they were renting at €400k. Last similar on estate sold at €500k.
> 
> Keeping zipped now!


 
So let me see if I've got this straight, cos I encounter this argument on regular basis in ireland. If the doctor says you've got to stop your 100 smokes/day habit, and he said that 3 years ago and nothings happened since, then, (a) he's a doom predictor/monger, and (b) you'll never die of lung cancer. 

So therefore he's wrong. So ignore this obvious nonsense advice and enjoy smoking even more. What the hell does he know anyway, right?

Well assuming that the doctor knows what he's talking about, wouldnt you think, despite the fact that you're not coughing blood and can breathe fine, that your risks of cancer are even HIGHER today?


----------



## southsideboy

Amygdala said:
			
		

> Is the economy so reliant on housing? What is wrong with FTBs ( who have also probably rented) wanting to get a basic human need at a fair price. Why is the market based on affordability spread over a full working career rather than actual value. When a price is set by squeezzing the last penny out of the buyer rather than the item purchased, it smacks of extorsion


 
I'm a FTB and I don't moan about prices all the time. I have had to buy out in Stepaside as opposed to Ranelagh or Milltown where I would prefer but I'm sure one day I'll be able to afford in those areas. Its not really extorsion. Nobody is being forced to buy. Prices are high because Irish people are obsessed with owning property. And yes the economy is very reliant on housing. I'm sure somebody else can come up with the figures but the construction trade accounts for a very large proportion of employment and GDP. Also if a crash occurs, many people will be left with negative equity.


----------



## southsideboy

walk2dewater said:
			
		

> So let me see if I've got this straight, cos I encounter this logic on regular basis in ireland. If the doctor says you've got to stop your 100 smokes/day habit, and he said that 3 years ago and nothings happened since, then, (a) he's a doom predictor/monger, and (b) you'll never die of lung cancer.
> 
> So therefore he wrong. The only logical thing to do is to ignore this obvious nonsense advice and enjoy smoking even more. What the hell does he know anyway, right?
> 
> Well assuming that the doctor knows what he's talking about, wouldnt you think, despite the fact that you're not coughing blood and can breathe fine, that your risks of cancer are even HIGHER today?


 
Nobody is going to suggest that there will never be a downturn in the property market but the question is when. The point is that for the past 6 or 7 years people have been predicting a crash and its never happened. You're analogy doesn't make any sense. How is smoking 100 cigarettes a day the same as buying property. Are you suggesting that nobody should ever buy property because of the risk element?


----------



## SineWave

> So let me see if I've got this straight, cos I encounter this logic on regular basis in ireland. If the doctor says you've got to stop your 100 smokes/day habit, and he said that 3 years ago and nothings happened since, then, (a) he's a doom predictor/monger, and (b) you'll never die of lung cancer.
> 
> So therefore he wrong. The only logical thing to do is to ignore this obvious nonsense advice and enjoy smoking even more. What the hell does he know anyway, right?
> 
> Well assuming that the doctor knows what he's talking about, wouldnt you think, despite the fact that you're not coughing blood and can breathe fine, that your risks of cancer are even HIGHER today?


 
Since you ask the question, no I don't think you've got it straight, as my post was in agreement with ninsaga. Why should there be a crash and not just a levelling off?

In summary of your post I believe that your cryptic comparison is saying that if I don't own a house I will not be subject to a crash? Brilliant and priceless!

Since having been a reader and sometimes contributor to AAM since early '03, I will also add that if there is a "crash" within the immediate future then to the best of my knowledge none of the AAM past predictions has been correct. Nobody foresaw the influx of Polish tenants, the banks extending mortgage lifetimes as well as 100% mortgages.


----------



## walk2dewater

southsideboy said:
			
		

> How is smoking 100 cigarettes a day the same as buying property


 
Well it's not, is it. It's an analogy. I used it to show the false logic of predicting an outcome based on recent history rather than the facts. The facts are that today the risk of price falls is HIGHER than ever (these facts discussed ad nausem above and elsewhere). That there hasn't been a crash only means our luck is running out.


----------



## walk2dewater

southsideboy said:
			
		

> I have had to buy out in Stepaside .


 


			
				southsideboy said:
			
		

> Nobody is being forced to buy.


 
Nobody except you then?



			
				southsideboy said:
			
		

> Also if a crash occurs, many people will be left with negative equity.


 
And many won't. We're not "all in this together".


----------



## walk2dewater

SineWave said:
			
		

> Why should there be a crash and not just a levelling off?


 
There can be no levelling off because when people EXPECT that prices have stopped going up there will be far more sellers than buyers. That's what sucks about asset bubbles.

I think we may have reached this point this Summer, will probably have to wait until Autumn though to confirm it for me


----------



## southsideboy

walk2dewater said:
			
		

> Nobody except you then?


 
I could rent in Milltown or Ranelagh if I wanted. I choose not to. If I want to buy then I have to buy further out but nobody is being forced to buy in the first place.


----------



## Amygdala

The probability off a "correction" is approaching unity in IMHO. It is evident by the argument " talking of a crash will precipitate one" and the vain attempt at causing "reasonable doubt" in public opinon by the "for years you have been forecasting a crash and it has not happened yet" argument.


----------



## walk2dewater

southsideboy said:
			
		

> I could rent in Milltown or Ranelagh if I wanted. I choose not to. If I want to buy then I have to buy further out but nobody is being forced to buy in the first place.


 
And good luck to you, genuinely, SSB


----------



## SineWave

> There can be no levelling off because when people EXPECT that prices have stopped going up there will be far more sellers than buyers. That's what sucks about asset bubbles.


 
But there were the same predictions in previous years and the same reactions leading to increased sales. Banks just moved goalposts along with the result of EU accession.

I remember pessimistically reporting on this board regards "nests" of auctioneers signs on Knocknacarra, Galway in 2003. One agent even had the €225k (now €325'ish) in stars similar to Lidl startegy.


----------



## walk2dewater

SineWave said:
			
		

> But there were the same predictions in previous years and the same reactions leading to increased sales.


 
As long as people BELIEVE that property prices will only ever go up they will continue buying property at ANY price.

My prediction is precisely the following: When people BELIEVE that prices have stopped going up there will be far more sellers than buyers.


----------



## SineWave

> As long as people BELIEVE that property prices will only ever go up they will continue buying property at ANY price.



I know of many who believe they will settle and/or go up and have no intention of buying.

I know of many who believe they will go down, but have no intention of selling.

I know of many who don't care what prices do but they do but just want to buy.

Hype will not persuade many and I would prefer if it had not persuaded me in the past.

Apologies for the simplistic level of the reply, but it's in keeping with the level of the quoted statement.


----------



## walk2dewater

SineWave said:
			
		

> I know of many who believe they will settle and/or go up and have no intention of buying.
> 
> I know of many who believe they will go down, but have no intention of selling.
> 
> I know of many who don't care what prices do but they do but just want to buy.
> 
> Hype will not persuade many and I would prefer if it had not persuaded me in the past.
> 
> Apologies for the simplistic level of the reply, but it's in keeping with the level of the quoted statement.


 
I was just trying explain as succintly as possible what the herd does when market sentiment turns at the top of a mania.  I guess it still wasn't clear enough.


----------



## Duplex

Read a little about how the housing market is faring in the US to understand how markets work. Its a market remember, a place free of sentiment. 



> "Price is everything and the prices are correcting and that's good for the market. Because the bigger the boom, the bigger the crash."


 
http://www.hometownannapolis.com/cgi-bin/read/2006/07_07-45/TOP


----------



## SineWave

"Herd" and "market" don't go together in my experience.

"Educated" or "experienced" might?

Not everyone has the lemming mentality and that might be the deciding factor on the ultimate direction and result.

To simplify, many of us did not buy into Eircom shares, irrelevant of us being led to BELEIVE by that we should.


----------



## OilKing

southsideboy said:
			
		

> Just wondering of all of those who are posting, who actually wants a crash in the property market? Maybe I'm wrong but it seems that some posters are actually hoping for a crash in the market which obviously will have very serious effects on the overall economy.


 
If a housing crash has a very serious negitive effect on the ecomomy than our ecomomy is flawed and just being propped up by borrowed money. If that is the case and I firmly believe it is than the sooner a crash happens the better so that we can finally begin to start dealing with the problem and try creating jobs that actually produce product that can be exported, not just selling houses to one another and paying more and more for the same houses each month.


----------



## thewatcher

All i know is that in the supposed "summer slowdown" there's 7 pages of properties for sale in my local paper,where normally it would be only 4 or 5


----------



## Duplex

SineWave said:
			
		

> "Herd" and "market" don't go together in my experience.
> 
> "Educated" or "experienced" might?
> 
> Not everyone has the lemming mentality and that might be the deciding factor on the ultimate direction and result.
> 
> To simplify, many of us did not buy into Eircom shares, irrelevant of us being led to BELEIVE by that we should.


 
Markets are human constructs driven by fear and greed. And while it may be unpalatable to accept this truism it has been proven countless times.
I've attached a short paper on market psychology that is worth a read.


[broken link removed]


----------



## SineWave

> Read a little about how the housing market is faring in the US to understand how markets work. Its a market remember, a place free of sentiment.



So to summarise  Mary Thompson, realtor with Long Foster Parole office.



> "The houses that are priced even at 5 percent (more than worth on the market) are being looked over,"she said. "Price is everything and the prices are correcting and that's good for the market. Because the bigger the boom, the bigger the crash."



Hobbs/McWilliams move over!


----------



## OilKing

As regards predicting the doom 3 yrs ago..... a small bit off the mark there Wollie... but one day you will be right for sure!

ninsaga[/quote]


Things have changed dramatically since 2003 Ninsaga. Since than lenders have extended the borrowing mania by using the following,
·    Interest rates at 2% for about 4 years giving the impression of permanently low rates. I've actually heard a mortgage broker telling potential customers over the phone that rates would be low for a very long time to come. 
·    Mortgage lenders pushing the terms of most loans to 35 years or more.
·    Interest only loans introduced.
·    100% mortgages.
Now however rates are going up and could go well beyond 4%. The lenders have little or nothing left in their arsenal to allow FTBs to enter the market except for maybe 60-year terms. Than we'll know we're really in Japanese territory.  

The real interesting thing for me is that when people attempt to compare the UK to the Irish market they seem to forget that when house prices began to slide in the UK in 2005 the BOE cut rates by 0.25% very quickly. We cannot do that and the ECB will not give a tinkers curse what kind of shape our economy or housing market takes on. They will say that we were well warned and hold the Irish housing market crash up as an example to the rest of the EU countries about what happens when governments allow credit institutions to lend dangerously.


----------



## Duplex

Never underestimate the stupidity of the general population.
People prey on mathematically challenged people.
The smart money makes the money that the dumb money lose.
A bubble wouldn't exist if there weren't plenty of persuasive theories to justify the high prices.
It absolutlely stuns me how so many otherwise intelligent people can be so stupid about real estate.
The general public is always on the wrong side of the market at important turning points.
The real estate bubble had to end with a bang, otherwise everyone would be able to get out with their profits - which is literally impossible.
Once again large segments of the population have come to believe that they have found the way to unending wealth by doing little or no real work.
"I can calculate the motions of heavily bodies, but not the madness of people" -- Issac Newton
90% of our population does no thinking of their own, they believe what they hear either from friends and family or the media.
What the wise do early, the foolish do late.
"Many in California have reached the dream of living in a million-dollar home without moving." -- Appleton-Young.
And many more quotes exist on the Madness of Crowds. My favorite is "a new boom sweeps clean" Groucho Marx in the film Coconauts (1929) a comedy dealing with the Florida real estate bust of 1926. Nothing new under the sun.

P.S.

SW I think you are pulling our bearish legs


----------



## SineWave

> The lenders have little or nothing left in their arsenal to allow FTBs to enter the market except for maybe 60-year terms.



Oh [broken link removed]?


----------



## SineWave

> SW I think you are pulling our bearish legs


 
No. probably just more firmly within the other 10% of;



> 90% of our population does no thinking of their own, they believe what they hear either from friends and family or the media.


----------



## beattie

OilKing said:
			
		

> If a housing crash has a very serious negitive effect on the ecomomy than our ecomomy is flawed and just being propped up by borrowed money. If that is the case and I firmly believe it is than the sooner a crash happens the better so that we can finally begin to start dealing with the problem and try creating jobs that actually produce product that can be exported, not just selling houses to one another and paying more and more for the same houses each month.


 
Couldn't agree more. The sooner that we face up to the over reliance on property in the economy the better. There are school kids making decisions on what courses to do in college etc so I am not sure Ireland Inc will benefit in the long run (15+ years) if they forego technical courses for the ones which can deliever the quick buck. If this forces people to get on the planes out of here so be it. We will only have ourselves to blame


----------



## Howitzer

SineWave said:
			
		

> Oh [broken link removed]?


 
There seem to be a lot of this style .ie sites springing up of late. Very American looking, even down to the Mom and Pop pictures.


----------



## SineWave

> There are school kids making decisions on what courses to do in college etc so I am not sure Ireland Inc will benefit in the long run (15+ years) if they forego technical courses for the ones which can deliever the quick buck.


 
Bricklaying would then be the first choice on the CAO form?


----------



## bearishbull

SineWave said:
			
		

> I folowed the doom predictors 3 years ago and sold a property for 379k. They are now selling at €600k (thanks Dundrum SC and Luas!).
> 
> I told my brother to follow the doom predictors last year and wait before purchase. They were ready to agree on the one they were renting at €400k. Last similar on estate sold at €500k.
> 
> Keeping zipped now!


Why did you sell when rates were so low,houses were still growing in double digits etc, you were obviously worried about fundamentals of market when you sold ,what has made you change your mind? if things looked bad enough for you  to sell in 2003 things must look really bad now? no? maybe your just annoyed your missed out on more filthy loot? dont change your convictions due to fear or greed, only a very small few were predicting a crash in 99/01/03 ,you could have held on till price growth slowed to inflation ,the few "doomsters" may have got their timing wrong but they couldnt have predicted 9/11 and a 5 year zero/negative interest rate environment,maybe their predictions should be allowed to be postsponed untill next year or two due to the nature of 9-11/monetary union. You will be proved right if you really did sell in 2003 ,and if you didnt sell do you really think you would have sold now facing these conditions? 
Basically if you felt so strongly about the markets value in 2003 why nearly 3 years later when market values have further spiralled have you changed your view? you sound like sir isaac newton who sold out of speculative bubble but when the bubble got bigger and bigger he was tempted back in and lost all his money.


----------



## whizzbang

southsideboy said:
			
		

> Just wondering of all of those who are posting, who actually wants a crash in the property market? Maybe I'm wrong but it seems that some posters are actually hoping for a crash in the market which obviously will have very serious effects on the overall economy.



yes, it will effect the overall economy, but the sooner a turnaround happens the less of an impact it will have. Hence I would like to see it now rather than after another 5 years of 10% house price growth.


----------



## thewatcher

southsideboy said:
			
		

> Just wondering of all of those who are posting, who actually wants a crash in the property market? Maybe I'm wrong but it seems that some posters are actually hoping for a crash in the market which obviously will have very serious effects on the overall economy.


 
Anyone who thinks having all this capital tied up in an non-productive asset is good for the irish economy,is only fooling themselves in the long run.
The higher prices go,the more damage will be caused in the long term.
When people on this thread mention 60year mortgages i get very scared, because the banks in this country have a long and shady past of screwing the irish public,they do not operate in the national interest ever !.
     When you boil it all down this housing boom/bubble is for the benefit of the few (banks,developers,government) and the detriment of many (the people),i would rather see the irish economy on a sound footing going forward rather than the debt laden leaky vessel we are fast becoming.


----------



## liteweight

I think you should spare a thought for the_ people _involved in a crash. I lived in London when negative equity hit. There were marriage break ups, depression and even suicides. What about the FTB we all feel so sorry for, usually young and only starting out? What about older people who have sunk their pensions into property? What about the tax payer, who will probably be asked to foot the bill when many are made homeless or lose everything?

I realise when discussing the economy it's essential to remain detached but nevertheless, at the end of the day, it's _people's lives_ we're talking about. 

IMHO we should be hoping and praying for a soft landing! No one should be trying to precipitate it.


----------



## room305

liteweight said:
			
		

> I think you should spare a thought for the_ people _involved in a crash.


I do. This is why it is better for the whole country if we deal with this now. The market is overvalued and needs to correct. The longer it continues to grow the sharper and more severe the correction.



			
				liteweight said:
			
		

> I lived in London when negative equity hit. There were marriage break ups, depression and even suicides. What about the FTB we all feel so sorry for, usually young and only starting out? What about older people who have sunk their pensions into property?


Such tragedies are inevitable but there is little that can be done. Many FTBs (like SSB) could rent cheaply in the area in which they wish to live but instead buy somewhere they don't want to live. This action is driven by greed, they hope the price increases enough so they can eventually purchase where they want to live. It's the type of illogical fear (of missing out) psychology that drives most bubbles.

Again, nobody asked the older people to sink all their money into a property pension. They should have taken impartial advice and sought to invest in a diverse range of asset classes.

As I said, these situations are sad but nobody was forced at gunpoint to purchase a home and indeed most people had other options.



			
				liteweight said:
			
		

> What about the tax payer, who will probably be asked to foot the bill when many are made homeless or lose everything?


This who I feel most sorry for. Paying for everyone elses madness without ever being consulted. Personally, I won't stand for it. I'll simply emigrate. Why should my taxes increase to subsidise the greed of others?

Also, people don't become homeless because they don't _own_ a home. Most property bulls posting here seem to forget that.



			
				liteweight said:
			
		

> I realise when discussing the economy it's essential to remain detached but nevertheless, at the end of the day, it's _people's lives_ we're talking about.


Yes but it is precisely because of this  concern that I personally would prefer to see a correction sooner rather than later.



			
				liteweight said:
			
		

> IMHO we should be hoping and praying for a soft landing! No one should be trying to precipitate it.


Whether houses decrease quickly in both nominal and real terms (i.e. crash) or simply remain static in nominal terms and decrease in real terms (i.e. "soft landing") the effect is the same, it just takes a much longer period of time for the market to correct. However, I understand the psychological element of not seeing houses decrease in nominal value may be important.


----------



## Calina

A soft landing is nothing of the kind...it means that prices don't correct rationally, and it is only a conduit for suggesting to people that in fact, it will all be okay when they wonder about the wisdom of what they have done. 

The point is, property in this country is disproportionately costed vis a vis available salary income. That cannot continue, and unless it falls significantly or we suddenly have massive salary inflation, we are in an unhealthy position. 

Property market matching salary growth is highly unlikely. We're lucky to scrabble 3% a year out of IBEC in national wage discussions - the employers do not want to pay out any more money in salaries than they can get away with and if they could cut it, they would. So the only other mechanism for getting a more reasonable balance between average salaries and house prices is for the latter to fall. 

I have listened to a lot of people buying houses both to live in, to get their foot on the ladder and for investment purposes claiming "it'll be a great pension" and "property can't fall" and "things are different in Ireland". 

I don't see them, who by their profligacy with borrowed money pushed house prices into this position, thinking of those they priced out of the market now. I do see them making some patronising remarks to those who do consider this insanity and unviable in the long run. Why should I have any sympathy at all for them if they lose out because of their own actions? Apparently no one forced them to get into that position. 

The property market needs to come into some kind of balance. The idea that we can continually manufacture money out of nowhere to sell houses to each other despite not making money out of anything much else needs to be killed right now. As far as I'm concerned if we had a decent correction three years ago when it should have happened, we wouldn't now be in a position where it looks increasingly like an elastic band is about to snap. 

I don't get up in the morning hoping a property crash will happen so as to wipe the smiles off smug property owners. I get up knowing that every day those property prices don't correct, the closer we are to major economic problems, because the longer it goes on, the more they will correct by. People with vested interests know that a major correction will be very very serious. They have now reached the point where they are very afraid that the turn is coming. From what I can see, most of the talk of a "soft landing" is based on wishful thinking more than anything. From what I can see, they seem to predicate on inflation matching price growth. Unfortunately, that would be fine if average house prices didn't happen be over ten times average salaries. 

If and when the crash comes, it will hurt. If, however, any political party dares to suggest we dig people out of the mess they got into because they didn't have the cop on to understand that "what can go up can also come down", particularly would be speculator/investor types, I will actually make sure that the life of any of their representatives who knocks on my door is miserable for 15 minutes. Representatives of Fine Gael in particular, after their recent FTB policy announcement should start trying to find out where I live in order to avoid me. 

I am not sure what market sentiment is at the moment. I can only observe certain things. I observe, for example, that rents in parts of county Dublin now match rents in Dublin City. I can only observe that some properties in county Dubli match some in Dublin City purchase price wise. I can also only observe that some properties seem to be spending a fine amount of time on property websites which leads me to conclude that either 1) their estate agents are lazy about clearing sold property from the listings or 2) their estate agents are not managing to see the properties. I can also add that fewer and fewer people are telling me to buy property. 

People who have bought houses that they are willing to live in for quite a few years I think are unworried. Those that bought houses or apartments expecting to trade up are most at risk of the problems caused by negative equity.


----------



## walk2dewater

liteweight said:
			
		

> What about the FTB we all feel so sorry for, usually young and only starting out? .


 
Why didn't we think about them when they were signing up for jumbo mortgages?



			
				liteweight said:
			
		

> What about older people who have sunk their pensions into property? .


 
You mean the older generation who have been made zillionaires off the backs of the young?



			
				liteweight said:
			
		

> What about the tax payer, who will probably be asked to foot the bill .


 
I will not tolerate my taxes being spent this way. I can and will relocate.



			
				liteweight said:
			
		

> when many are made homeless or lose everything?.


 
Ireland is full of houses, how could anyone be homeless here?


----------



## liteweight

I don't believe that most FTBs can rent cheaply in an area they want to live in. Rents may be decreasing of late but they are still an expensive outlay especially in Dublin. What happens to all theses renters if an investor pulls out and decides to sell? Rent is dead money whether we like it or not and I think it is this perception that drives people to get on the property ladder and not greed as you suggest. There is also the fact that if you rent, by and large, you live with a landlord's colour schemes, facilities on offer etc. This becomes even more of an issue when one has children.

Having said that, the advice I would give my children is to rent in an area they like, rather than buy somewhere way outside Dublin. This advice is based on things like how their lifestyle would suffer, their mental state (spending 2 or perhaps more hours driving just to get to and from work) and their outlay i.e. motoring costs, fast food cos too tired to cook by the time they get home. It's not that I don't believe they should make sacrifices to get what they want.

Another point I would like to make is that a lot of people who put their money into property did so based on the advice of professional advisors. While in previous posts the big banks in Ireland are accused of shafting people in a recession, your attitude is exactly the same i.e. you feel sorry for people in negative equity but what can be done...it's inevitable.

Anyway, the point I would like to make is, that not everyone is driven by greed and I feel that that is a huge assumption to make. Many ordinary, everyday people will be affected by a property crash and not only in terms of their property devalueing....jobs lost as the economy goes down etc. I think a crash would be a catastrophe for Ireland and to wish it so that we can get back on our feet sooner is ludricrous.


----------



## bearishbull

Calina said:
			
		

> A soft landing is nothing of the kind...it means that prices don't correct rationally, and it is only a conduit for suggesting to people that in fact, it will all be okay when they wonder about the wisdom of what they have done.
> 
> The point is, property in this country is disproportionately costed vis a vis available salary income. That cannot continue, and unless it falls significantly or we suddenly have massive salary inflation, we are in an unhealthy position.
> 
> Property market matching salary growth is highly unlikely. We're lucky to scrabble 3% a year out of IBEC in national wage discussions - the employers do not want to pay out any more money in salaries than they can get away with and if they could cut it, they would. So the only other mechanism for getting a more reasonable balance between average salaries and house prices is for the latter to fall.


Great post. Interestingly i read that German workers willingly reduced their wages by 4% last year , they got paid the same but increased hours,thats why their export sector is booming and they are the number one exporter in world again, can you imagine irish unions accepting paycuts/freezes to control costs/competitiveness/inflation?  I think the sooner we have a correction the better for the long term health of the economy,we will realise we have to develop a world class export sector with large indigenous component and not rely on multinationals who transfer price and assemble goods here for tax reasons.


----------



## Calina

liteweight said:
			
		

> I don't believe that most FTBs can rent cheaply in an area they want to live in. Rents may be decreasing of late but they are still an expensive outlay especially in Dublin. What happens to all theses renters if an investor pulls out and decides to sell? Rent is dead money whether we like it or not and I think it is this perception that drives people to get on the property ladder and not greed as you suggest. There is also the fact that if you rent, by and large, you live with a landlord's colour schemes, facilities on offer etc. This becomes even more of an issue when one has children.


Current fact: the rent on the house I live in would be about 400E a month less than the mortgage on the least expensive house I can afford. That house, that I can afford is in Portlaoise or Slane (choose whichever you like) which are both, in empty roads, an hour at least from where I work. In the rush hour I wouldn't like to estimate. The house I rent is 5 minutes drive from where I work in north county Dublin. 

If investors pull out and sell, there are two main possibilities: 1) he sells to another investor, in which case rental supply stays the same or 2) he sells to a person who wants to live in the house in which case rental supply goes down one, but down the chain, so too does tenant supply. 

There seems to be a surfeit of investment property out there at the moment, and that's on the basis of 80,000 people a year in the country. I think the mess will occur when we realise we have built a lot of accommodation which no one needs and, further more, because capital appreciation has slowed down or vanished, no one wants. Then we'll start hearing "No one told me..."

In any case, what is truly dead money is the excess amount of money you pay in mortgage interest over the rent you would pay on the same property. In other words, if the mortgage interest exceeds rent, then you're better off renting. Incidentally, I don't believe rent is totally dead money. I'm paying for a service. I've done it in quite a few other countries and there hasn't been any major difficulty with the idea that you pay someone for the use of their premises. It's not like you rent a house and then don't live there.


----------



## walk2dewater

liteweight said:
			
		

> I don't believe that most FTBs can rent cheaply in an area they want to live in. Rents may be decreasing of late but they are still an expensive outlay especially in Dublin. What happens to all theses renters if an investor pulls out and decides to sell? Rent is dead money whether we like it or not and I think it is this perception that drives people to get on the property ladder and not greed as you suggest. There is also the fact that if you rent, by and large, you live with a landlord's colour schemes, facilities on offer etc. This becomes even more of an issue when one has children.
> 
> Having said that, the advice I would give my children is to rent in an area they like, rather than buy somewhere way outside Dublin. This advice is based on things like how their lifestyle would suffer, their mental state (spending 2 or perhaps more hours driving just to get to and from work) and their outlay i.e. motoring costs, fast food cos too tired to cook by the time they get home. It's not that I don't believe they should make sacrifices to get what they want.
> 
> Another point I would like to make is that a lot of people who put their money into property did so based on the advice of professional advisors. While in previous posts the big banks in Ireland are accused of shafting people in a recession, your attitude is exactly the same i.e. you feel sorry for people in negative equity but what can be done...it's inevitable.
> 
> Anyway, the point I would like to make is, that not everyone is driven by greed and I feel that that is a huge assumption to make. Many ordinary, everyday people will be affected by a property crash and not only in terms of their property devalueing....jobs lost as the economy goes down etc. I think a crash would be a catastrophe for Ireland and to wish it so that we can get back on our feet sooner is ludricrous.


 
LW I know you are well-meaning. Unfortunately well-meaning doesnt cut it. Economic reality is being imposed on Ireland by external forces, cos we are proving unable to manage ourselves. This process will happen whether we throw our toys out of the pram screaming "but rent is dead money" or not. We are not in splendid isolation anymore, we are a recently inducted member of the rich-world economies club. We've accepted the trappings of this with open arms, but seem intent on not living up to the billing as an advanced economy. Membership however will be swiftly revoked if we continue with our Albania-esque property pyramid scheme much longer.

And THAT would be a far greater catastrophe for Ireland


----------



## bearishbull

liteweight said:
			
		

> I don't believe that most FTBs can rent cheaply in an area they want to live in. Rents may be decreasing of late but they are still an expensive outlay especially in Dublin. What happens to all theses renters if an investor pulls out and decides to sell? Rent is dead money whether we like it or not and I think it is this perception that drives people to get on the property ladder and not greed as you suggest. There is also the fact that if you rent, by and large, you live with a landlord's colour schemes, facilities on offer etc. This becomes even more of an issue when one has children.
> 
> .


Do you not follow the news? Rents are same now as in 2001 and rents in Dublin are among cheapest in european capital cities according to the recent mercer executive price survey.

Im sure most landlords will let you decorate a house in your own way once you consult him and arrange to have it changed back if necessary before your lease is up.

As for people buying property for their pension i have no sympathy, cant they that because we are building so many houses (100k)  a year! by the time they are retired there will be a massive over supply of housing and the demographics will have changed so there may be too few buyers/renters


----------



## Calina

bearishbull said:
			
		

> Great post. Interestingly i read that German workers willingly reduced their wages by 4% last year , they got paid the same but increased hours,thats why their export sector is booming and they are the number one exporter in world again, can you imagine irish unions accepting paycuts/freezes to control costs/competitiveness/inflation?  I think the sooner we have a correction the better for the long term health of the economy,we will realise we have to develop a world class export sector with large indigenous component and not rely on multinationals who transfer price and assemble goods here for tax reasons.



Thanks.

I worked in Germany. They probably had the time to spare. It's not such a massive overtime culture the way here is. Additionally, that deal will have been agreed with the workers unions. Not only that but they probably were working towards the future at government level rather than exploiting the here and now. I must check actually - when I lived there, if you wanted to buy a house or an apartment, you had to have a deposit of about 30% (not the piffling little 8% that was required here) of the purchases price. I wonder if that changed. 

TBH, we had a lot of so called boom years here and only in taxes was much return passed on to the employees. No matter how good things are, IBEC never want to pay anyone anything, end of story. 

In any case, I agree totally with you on the world class export sector - it's one of my bug bears about Anglo-Saxon economic thinking at the moment (the UK and the US have massive trade deficits, but it doesn't matter because they're "service economies" but their debt profile is irrelevant) - we're going the same way and we really need to re-assess how things are done here before we get into real trouble. People will remind you about unemployment in France and Germany though if you point these things out to them.


----------



## bearishbull

P.S Liteweight , Do you think the rent on a mortgage(Ie; interest) is dead money? Do you realise house prices must increase by around 50% in real terms just to break even on the purchase of a house?


----------



## thewatcher

liteweight said:
			
		

> Another point I would like to make is that a lot of people who put their money into property did so based on the advice of professional advisors. While in previous posts the big banks in Ireland are accused of shafting people in a recession, your attitude is exactly the same i.e. you feel sorry for people in negative equity but what can be done...it's inevitable.


 
It was the financial institutions that threw the lending guidelines out the window a long time ago,aided by the mostly passive central bank when we were all set for a soft landing. 



			
				liteweight said:
			
		

> Anyway, the point I would like to make is, that not everyone is driven by greed and I feel that that is a huge assumption to make. Many ordinary, everyday people will be affected by a property crash and not only in terms of their property devalueing....jobs lost as the economy goes down etc. I think a crash would be a catastrophe for Ireland and to wish it so that we can get back on our feet sooner is ludricrous.


 
It was a property pusher SSB that said we "hoped" for a crash,i don't think i've ever seen any bear on this site wish for a crash,all anyone has done is look at the fundamentals and draw their own conclusions.


----------



## bearishbull

Calina said:
			
		

> Thanks.
> 
> I worked in Germany. They probably had the time to spare. It's not such a massive overtime culture the way here is. Additionally, that deal will have been agreed with the workers unions. Not only that but they probably were working towards the future at government level rather than exploiting the here and now. I must check actually - when I lived there, if you wanted to buy a house or an apartment, you had to have a deposit of about 30% (not the piffling little 8% that was required here) of the purchases price. I wonder if that changed.
> 
> TBH, we had a lot of so called boom years here and only in taxes was much return passed on to the employees. No matter how good things are, IBEC never want to pay anyone anything, end of story.
> 
> In any case, I agree totally with you on the world class export sector - it's one of my bug bears about Anglo-Saxon economic thinking at the moment (the UK and the US have massive trade deficits, but it doesn't matter because they're "service economies" but their debt profile is irrelevant) - we're going the same way and we really need to re-assess how things are done here before we get into real trouble. People will remind you about unemployment in France and Germany though if you point these things out to them.


People talk of unemployment in france and germany but 90% of workers have jobs and excellent wages/pensions/wprking conditions, the european economy has to change to compete on world stage but they are doing quite well at present in spite of high labour costs. Being unemployed isnt so bad in europe as social welfare is very good and housing cheap so if your partner or family member is working one wage can usually support more people than here in ireland/uk, also the french workers in private sector are the most productive in the world!


----------



## Marie

Duplex said:
			
		

> What riles me is the sheepishness of people lead into debt slavery for the price of a humble piece of land and an assortment of p poor building materials. The fact that this tardy charade has been foisted on people on so many occasions makes the farce only more exasperating. The whole bubble adds not one whit to the advancement of society.


 
Duplex, all - I feel this is the crux of it.  Nobody is maliciously savouring the prospect of a crash (and a crash there will be, have no doubt about that!).  It is rather a wish for an end to the craziness around property which grew to a cultural myth in Ireland during the last 10 years and knocked all logic and reason out of the equation and previous posters have articulately distinguished between (a) _this_ phenomenon and (b) investment and (c) buying a home.  The point is that _all three_ categories have been infected with the crazy mythology........which was promulgated (because it was _in their own various interests_!!) by government, estate agents and lending establishments.

Whilst the coming reversal will bring property prices into more logical relationship with income and value what it will not do is roll back the damage to culture, community and environment.  One of the initial spurs to the property 'boom' was the amenity of small-scall, relatively unspoilt clean environments with community values and engagement.  Unfortunately these have been lost (or more hopefully, temporarily submerged?) under the concrete.  

Now the recklessness and acquisition-at-any-cost frenzy are lessening the real de-valuation will become apparent and may perhaps feed into the property downturn, contributing to its accelleration.  As you say, folks will begin to be a great deal more critical of shabbily-built, sunless boxes with postage-stamp-size gardens in soulless mega-estates in the a***hole of beyond if they are viewing a potential home-for-life.


----------



## room305

liteweight said:
			
		

> I don't believe that most FTBs can rent cheaply in an area they want to live in. Rents may be decreasing of late but they are still an expensive outlay especially in Dublin.



Nonsense. Rents may be an expensive outlay but compared to the cost of a mortgage they're laughable. I'm undecided at the moment but am seriously weighing up the possibility of selling my home and renting, having seen what is on offer at ridiculously low prices in good areas.



			
				liteweight said:
			
		

> What happens to all theses renters if an investor pulls out and decides to sell?



Well assuming the landlord is a legal one then you will get sufficient notice etc. This should give you ample time to rent a new home. As Calina pointed out, for someone to sell, someone else must buy.



			
				liteweight said:
			
		

> Rent is dead money whether we like it or not and I think it is this perception that drives people to get on the property ladder and not greed as you suggest.



"Rent is dead money" is the greatest misconception ever. Unless you actually have the full cost of the house upfront you either rent the property or you rent the money to purchase the property. Currently renting the property looks a much better deal than renting the money.

It is a combination of greed and fear that is driving most people to buy property they cannot afford. Fear that they will miss out and greed for future appreciation.



			
				liteweight said:
			
		

> There is also the fact that if you rent, by and large, you live with a landlord's colour schemes, facilities on offer etc. This becomes even more of an issue when one has children.



Which is fair enough, however with a good landlord this can be negotiable. I've only ever rented in student type places in Dublin but I am well aware in other areas of the country where landlords have been very accomodative about allowing tenants to decorate, buy their own furniture etc.



			
				liteweight said:
			
		

> Having said that, the advice I would give my children is to rent in an area they like, rather than buy somewhere way outside Dublin. This advice is based on things like how their lifestyle would suffer, their mental state (spending 2 or perhaps more hours driving just to get to and from work) and their outlay i.e. motoring costs, fast food cos too tired to cook by the time they get home. It's not that I don't believe they should make sacrifices to get what they want.



Sound advice.



			
				liteweight said:
			
		

> Another point I would like to make is that a lot of people who put their money into property did so based on the advice of professional advisors.



Working for whom though? I doubt any independent pensions advisor ever said - "No, no, don't take out a pension, are you mad? Buy an overpriced house in Dublin, it's the safest bet." 



			
				liteweight said:
			
		

> While in previous posts the big banks in Ireland are accused of shafting people in a recession, your attitude is exactly the same i.e. you feel sorry for people in negative equity but what can be done...it's inevitable.



What can be done? It is inevitable now. Anything done at this point stands more chance of making things worse.



			
				liteweight said:
			
		

> Anyway, the point I would like to make is, that not everyone is driven by greed and I feel that that is a huge assumption to make. Many ordinary, everyday people will be affected by a property crash and not only in terms of their property devalueing....jobs lost as the economy goes down etc. I think a crash would be a catastrophe for Ireland and to wish it so that we can get back on our feet sooner is ludricrous.



Perhaps not everyone was driven by greed, for many it was simply herd behaviour. I stand by that most were but maybe I just mix with the wrong people ;-)

A crash could well be a catastrophe for Ireland but it is unavoidable. If you have any suggestions for avoiding it they would be most welcome. It is simply too late at this stage to do anything about it.

A country can only increase in wealth by increasing its exports or decreasing its imports. We are in fact doing the opposite and it is not until the housing mania recedes that we will notice this.


----------



## Calina

bearishbull said:
			
		

> Im sure most landlords will let you decorate a house in your own way once you consult him and arrange to have it changed back if necessary before your lease is up.


The problem in Ireland is not so much the redecoration issue - although it's a bit aggravating - it's that despite recent changes to the law, you're still at the mercy of a landlord who might want you out for whatever reason. 

Currently, after six months, you're entitled to stay in a property for 4 years, with a couple of key exceptions - ie, landlord wants to sell, landlord wants to move into property for self or for member of family. Then they have to give you statutory notice of up to 56 days, depending on how long you were in the property. 

Because capital appreciation is such an attraction for a lot of investors, the freedom to dump out a tenant with 56 days notice in order to sell is a major problem. I'm speaking from personal experience here - landlords who were previously alright to deal with can become extremely nasty and make your life absolutely hell, despite "A tenant is entitled to reasonable enjoyment of their home" provisions in existing legislation. Usually I get out as soon as possible because my life is not worth the stress of someone else trying to sell a house. 

So even if you think you can live in a house for four years, there's a chance you mightn't be able to because of the profile of a lot of investors in Ireland at the moment. (actually if I want anyone to take a burning in property, these would be the ones). In that case, for a lot of people, redecorating is not a top priority because it's easier to leave the magnolia there than redecorate a house back to it just as you are a) getting the deposit and rent together for a new house or b) trying to start off in your own. 

A lot of issues there would be rectified if exceptions to the Part 4 tenancy were removed. I strongly believe that if landlords want to sell investment properties are occupied by tenants, they should have to sell them as occupied tenant unaffected. That might, additionally, have cooled down some of the investment/speculator driven increases, but I guess it's too late for that now.


----------



## Calina

bearishbull said:
			
		

> People talk of unemployment in france and germany but 90% of workers have jobs and excellent wages/pensions/wprking conditions, the european economy has to change to compete on world stage but they are doing quite well at present in spite of high labour costs. Being unemployed isnt so bad in europe as social welfare is very good and housing cheap so if your partner or family member is working one wage can usually support more people than here in ireland/uk, also the french workers in private sector are the most productive in the world!


Just so that we are absolutely clear on this - I totally agree with you. I've lived in Germany and in France, and I have also read recent comparisons between them, Sweden and the UK. Statistically, Europe is far more productive per employee than the US, for example. And by choice, I would prefer a society along French or Germany lines than the current set up in Ireland. 

What troubles me is that there is a lot of short termism in the "my economy is better than yours" game and that is why I point out that if you try to have this conversation with a lot of people, they will point out that France and Germany have 10% unemployment whereas Ireland, the UK and America have 5% unemployment. It is a single statistic and going forward, it is not something you can build on. On the other hand, manufacturing and export out put are something you can build on, and France and Germany have this to spare. France has a deficit at the moment, but it is circa 1/3 that of the UK, and it's falling. 

Just to come back on topic though, property prices in France are starting to rise again, in the last six months - driven by FTBs and foreigners. Sounds kind of familiar. As France is a far bigger economy, I'm inclined to think that movements there could have more sway with respect to interest rate considerations...I must see what is happening in Germany there...


----------



## Marie

liteweight said:
			
		

> I don't believe that most FTBs can rent cheaply in an area they want to live in. Rents may be decreasing of late but they are still an expensive outlay especially in Dublin. What happens to all theses renters if an investor pulls out and decides to sell? Rent is dead money whether we like it or not and I think it is this perception that drives people to get on the property ladder and not greed as you suggest. There is also the fact that if you rent, by and large, you live with a landlord's colour schemes, facilities on offer etc. This becomes even more of an issue when one has children.


 
Hi Liteweight

I often wonder if the alleged thousands of euro 'profit' from property price increases over the past decade are quoting the gain before or after capital gains tax based on the increase in market price has been paid to the government.  Investor/speculators who brag about their huge profits gained 'without lifting a finger' appear to be basing this on the gross-before-tax, rather than the net after-tax-and-costs, increase.  Incidentally, property ownership entails a great deal more financial outlay than mortgage alone; house upkeep and everyday maintenance costs are substantial annual outlay.


----------



## thewatcher

liteweight said:
			
		

> Anyway, the point I would like to make is, that not everyone is driven by greed and I feel that that is a huge assumption to make. Many ordinary, everyday people will be affected by a property crash and not only in terms of their property devalueing....jobs lost as the economy goes down etc. I think a crash would be a catastrophe for Ireland and to wish it so that we can get back on our feet sooner is ludricrous.


 
LW, this http://www.askaboutmoney.com/showthread.php?t=31943 is what you are dealing with and i am not just picking on this person, this demand is widespread.Until the investor driven demand is curbed the potential for a crash further increases.

In the event of a crash if anyone was to suggest that taxpayers money should be used to bail out the likes of this carry on,i would seriously have to consider my position within ireland inc.
Everyone is entitled to 1 house in my book,after that your're on your own.


----------



## room305

Marie said:
			
		

> Incidentally, property ownership entails a great deal more financial outlay than mortgage alone; house upkeep and everyday maintenance costs are substantial annual outlay.



Interesting point Marie. In the breathlessness accompanying oft quoted statistic from the TSB/ESRI house price index, that the average house has increased 270% in the past ten years, it often overlooked that in the same period the ISEQ index rose 230%. 

Given the amount of leverage required to get invested in property and the other incidental costs involved, I often wonder if a basket of Irish bluechips would have proved a better buy over that ten year period.


----------



## bearishbull

room305 said:
			
		

> Interesting point Marie. In the breathlessness accompanying oft quoted statistic from the TSB/ESRI house price index, that the average house has increased 270% in the past ten years, it often overlooked that in the same period the ISEQ index rose 230%.
> 
> Given the amount of leverage required to get invested in property and the other incidental costs involved, I often wonder if a basket of Irish bluechips would have proved a better buy over that ten year period.


If you reinvested the dividends you would make even more than property over last 5/10/15 years, ya see people forget that companies/shares will always out perform property in long term because companies are the ones that make the profits and pay the incomes that pay for the properties, if property outperformed companies in long term the property couldnt be paid off as company profits /incomes wouldnt be sufficient to pay an ever greater debt burden for property.


----------



## ivuernis

Blame game hots up over eurozone inflation fears


A Housing Bubble in Europe?
http://www.businessweek.com/investor/content/jun2006/pi20060626_425094.htm


----------



## Calina

*


			
				Business Week said:
			
		


			a correction in house prices could have severe effects, as the recent Dutch example shows.
		
Click to expand...

*

Know anything about this? I don't read Dutch and am not so well up on happenings there as France or Germany.


----------



## walk2dewater

ivuernis said:
			
		

> Blame game hots up over eurozone inflation fears


 
It's all there isn't it?  Could the signs be any clearer.  The Germans will not stand for inflation, houses price inflation or any other erosion of the value of THEIR D.Mark/Euro.  This is exactly why the Swiss stayed out of the eurozone, they feared the less prudent European members would beggar them.

I'll say it again, ECB rates are going much higher, much quicker than any public commentator in Ireland has thus far said/wrote.

Calina, interesting few posts there.


----------



## room305

walk2dewater said:
			
		

> I'll say it again, ECB rates are going much higher, much quicker than any public commentator in Ireland has thus far said/wrote.



Isn't this Trichet's conundrum though? Rates should be much, much higher here and in Spain. As it stands real interest rates are still negative. However, for Germans such high interest rates would be punitive, punishing their recovering economy.

I think the author was spot on about the German fear of inflation. Listening to many media commentators here, you'd almost imagine it was a good thing.


----------



## walk2dewater

room305 said:
			
		

> for Germans such high interest rates would be punitive, punishing their recovering economy.


 
No.  Germans collectively and individually have very very low debt levels and are prudent spenders.  Why would higher rates hurt them?  It is a myth that Germany has a weak economy;  go visit Germany and tell me what you see.  Yes higher rates would strenghten the euro and hurt their massive exporting/engineering industrial complex.  But higher rates would lower any imported inflation, such as fossil fuels.

There will be no breaking ranks from the DMark/Franc "Euro".  Perhaps some indirect forgiving of debts [e.g. ECB fornally declares Italian bonds same investment grade as Germany], but Italy, Spain, Ireland etc. have more to lose than gain by exiting the euro.  All euro denominated debts will be repaid, one way or the other.

Germans have an almost irrational fear of inflation, as alluded to in that article.  For that reason alone, I reckon ECB rates will drift ever higher over the next 2 years, to minimum 8%.

Us Irish better be very happy indeed with our recent purchases on German credit.


----------



## ivuernis

walk2dewater said:
			
		

> Germans have an almost irrational fear of inflation, as alluded to in that article. For that reason alone, I reckon ECB rates will drift ever higher over the next 2 years, to minimum 8%.


 
Even with my bearish outlook I can't see rates going that high over the next couple of years, that would tank almost every property market across Europe. 8% would warrant a 0.25% rise almost every month for the next 2 years to reach that level. I can certainly see 4-5% but 8%?


----------



## bearishbull

walk2dewater said:
			
		

> No. Germans collectively and individually have very very low debt levels and are prudent spenders. Why would higher rates hurt them? It is a myth that Germany has a weak economy; go visit Germany and tell me what you see. Yes higher rates would strenghten the euro and hurt their massive exporting/engineering industrial complex. But higher rates would lower any imported inflation, such as fossil fuels.
> 
> There will be no breaking ranks from the DMark/Franc "Euro". Perhaps some indirect forgiving of debts [e.g. ECB fornally declares Italian bonds same investment grade as Germany], but Italy, Spain, Ireland etc. have more to lose than gain by exiting the euro. All euro denominated debts will be repaid, one way or the other.
> 
> Germans have an almost irrational fear of inflation, as alluded to in that article. For that reason alone, I reckon ECB rates will drift ever higher over the next 2 years, to minimum 8%.
> 
> Us Irish better be very happy indeed with our recent purchases on German credit.


Germans collectively remember the hyper inflation of the 1920's that in part led to hitlers rise.Higher rates could hit businesses ,many of germanys export would have significant debt due to the capital structure  manufacturing companies tend to have. Yes higher rates=higher euro but lower oil/commodities but the net effect may be higher priced goods and reduced demand for german exports. we'll see in a year or two anyway!


----------



## bearishbull

8% rates in short term would lead to a break up of euro zone,italy can barely keep its head above water with negative/low real rates


----------



## room305

8% seems very high to me also. While I do see the pace of increases quickening it is hard to imagine more than six increases next year. I also think Trichet will stick with 0.25% increases.

I think a base rate of 5% by year end next year is realistic.

To get back on topic - I really do not think many FTBs are prepared for such increases. Many are already feeling the pain and we will probably have three more rises this year!


----------



## southsideboy

There is no way that interest rates will hit 8%. I think the ECB would be very reluctant to ever raise rates that high and although the German economy will probably recover to a certain degree I don't think that the economic situation in Europe could warrant 8% over the next 2 years. I think perhaps 4% would be more realistic and that will hit many homeowners. Also I think terrorism has a major role to play in Europe. One 9/11 style attack could hault economic growth and also interest rates. Having said that I don't think interest rates are the only factor which could influence a downturn in the Irish property market. But I think in the short term high interest rates would be one of the main factors which could lead to a crash as opposed to a soft landing. I don't really see where *walk2dewater *is getting a figure of 8% from? Are you expecting some sort of economic miracle in 2 years?


----------



## beattie

bearishbull said:
			
		

> 8% rates in short term would lead to a break up of euro zone,italy can barely keep its head above water with negative/low real rates


 
It will come down basically to who calls the shots at the ECB, if Italy can't get its own house in order will they be cut any slack by the more prudent memebers. I doubt that ECB rates will be held down just for them. I can see 6% in 08 if inflation isn't curtailed


----------



## walk2dewater

ivuernis said:
			
		

> I can't see rates going that high over the next couple of years, that would tank almost every property market across Europe. 8% would warrant a 0.25% rise almost every month for the next 2 years to reach that level. I can certainly see 4-5% but 8%?


 
ECB rates predictions, these are minimums:
Dec 06 -- 4%
Dec 07 -- 7%
Dec 08 -- 8%

Give or take    BoE will be same. Fed will be about 2-4% higher.  BoJ will be 2-4% lower.

Gold will be min €1000/oz.  US dollar will be 1.5-1.75 to the euro.

Hey, all In My Humble Opinion....


----------



## beattie

southsideboy said:
			
		

> Also I think terrorism has a major role to play in Europe. One 9/11 style attack could hault economic growth and also interest rates.


 
What????? Are you saying that the property industry here would almost welcome an attack if it provided more liquidity at a time when it will be much tighter than it currently is


----------



## Calina

southsideboy said:
			
		

> Also I think terrorism has a major role to play in Europe. One 9/11 style attack could hault economic growth and also interest rates.



Really? So we have had two major terrorist attacks in Europe so far, namely in the UK and Spain and they have caused...oh yeah...a bit of anger and resentment towards their local governments but not much noticeable to the wider European economy as a whole.

The problem with 9/11 is that the first one has a nice impact caused by it being completely out of the blue. If there is another one in Europe...and it's no means certain, its impact will be very different, particularly since we didn't centralise a whole pile of financial business in a single landmark building complex. I don't think terrorism *has* a major role to play in Europe. I think it *may* have an impact if someone succeeds but it's by no means certain and I wouldn't be relying on it to keep down interest rates.


----------



## Calina

southsideboy said:
			
		

> ..... I don't think that the economic situation in Europe could warrant 8% over the next 2 years. I think perhaps 4% would be more realistic and that will hit many homeowners.



and while I'm at it...the economic situation in _Ireland_ right now merits it and property is rising in cost in a couple of other European countries. While I'd be reluctant enough to go as high as 8% I would equally not bank on them staying down as far as 4% in the short to mid term. I suspect they'll go higher for a while before coming back down to the more reasonable 4%.


----------



## Marie

room305 said:
			
		

> Interesting point Marie. In the breathlessness accompanying oft quoted statistic from the TSB/ESRI house price index, that the average house has increased 270% in the past ten years, it often overlooked that in the same period the ISEQ index rose 230%.
> 
> Given the amount of leverage required to get invested in property and the other incidental costs involved, I often wonder if a basket of Irish bluechips would have proved a better buy over that ten year period.


 
This is why I sold off the (inherited) family home in Dublin 2 years ago against a _barrage_ of advice from family, friends and neighbours.  The myth/mantra was 'You can't go wrong; keep it as an investment - you can let it out at sky-high rent.......there's a housing shortage due to incoming migrants".  However personal research and doing the arithmetic for after-tax-after-costs income revealed that far from 'paying for itself' the 50% mortgage would need subsidising.........plus the prospect of all the work of landlording and worry about the market which this course would have entailed.

With the proceeds I paid off the outstanding mortgatge on my PPR, maximised my pension contributions and invested the rest in SSIAs and a 7-day notice deposit account paying 4.8% and can consider early retirment at age 60 in 2 years time as my workplace has engaged in massive restructuring and service-cutting (which didn't bother me unduly as I have this secure savings buffer).  For the first time in my life I have not had the constraint of a tight budget so afford foreign travel, a few desirable antiques of quality and treats for nieces and nephews.  

The disbelief of some posters here that interest rates could climb to 8% is interesting.  My interest was 8.0% on the mortgage on this, the first home I'd ever owned (1995).  Interest-rates were deemed 'low' as they had been something like 11.5% at the height of the 'boom' here in the UK about 5 years previously!!!


----------



## Marie

.........my companion has just corrected that last comment with the information that interest rates went _above 14 %_ in 1989-90 in the UK.


----------



## walk2dewater

Marie said:
			
		

> a 7-day notice deposit account paying 4.8%


 
Where, if may I enquire, are you getting this Marie?


----------



## southsideboy

Calina said:
			
		

> and while I'm at it...the economic situation in _Ireland_ right now merits it and property is rising in cost in a couple of other European countries. While I'd be reluctant enough to go as high as 8% I would equally not bank on them staying down as far as 4% in the short to mid term. I suspect they'll go higher for a while before coming back down to the more reasonable 4%.


 
So what if the economic situation in Ireland merits high interest rates? Debt levels would never have been so high if we had control over our own interest rates. The fact is we don't. Germany and other big countries in the Eurozone dictate interest rates. The ECB are only concerned about the overall economy, not insignificant economies like Ireland. Just because we should have higher interest rates, doesn't mean we will get them.


----------



## southsideboy

Calina said:
			
		

> Really? So we have had two major terrorist attacks in Europe so far, namely in the UK and Spain and they have caused...oh yeah...a bit of anger and resentment towards their local governments but not much noticeable to the wider European economy as a whole.
> 
> The problem with 9/11 is that the first one has a nice impact caused by it being completely out of the blue. If there is another one in Europe...and it's no means certain, its impact will be very different, particularly since we didn't centralise a whole pile of financial business in a single landmark building complex. I don't think terrorism *has* a major role to play in Europe. I think it *may* have an impact if someone succeeds but it's by no means certain and I wouldn't be relying on it to keep down interest rates.


 
Who is relying on terrorism to keep interest rates low?? Of course it is only a possibilty. I was merely pointing out that it could play a big role in the recovery of European economies. You must be very naive to think that a major 9/11 style attack in Europe would not affect fragile recovering economies. London and Madrid were minor attacks compared to 9/11. A large terrorist attack could have a severe impact on consumer confidence.


----------



## walk2dewater

southsideboy said:
			
		

> Who is relying on terrorism to keep interest rates low?? Of course it is only a possibilty. I was merely pointing out that it could play a big role in the recovery of European economies. You must be very naive to think that a major 9/11 style attack in Europe would not affect fragile recovering economies. London and Madrid were minor attacks compared to 9/11. A large terrorist attack could have a severe impact on consumer confidence.


 
The affects of the real-negative rates in the West since 9/11 are a far greater threat to Western civilization than any terrorist. Preventing inflation is not an optional thing, it is paramount.


----------



## beattie

southsideboy said:
			
		

> Who is relying on terrorism to keep interest rates low?? Of course it is only a possibilty. I was merely pointing out that it could play a big role in the recovery of European economies. You must be very naive to think that a major 9/11 style attack in Europe would not affect fragile recovering economies. London and Madrid were minor attacks compared to 9/11. A large terrorist attack could have a severe impact on consumer confidence.


 
London for years has lived with terrorist attacks and it didn't exactly dent consumer confidence over there. I think you are overstating the case. Also many people now believe that Greenspan went too far after 911 and caused the huge housing bubble which is in the nascent stages of unwinding over there which will dwarf the effect of the dotcom boom.

Are we more indebted (per person) than the US now? If so we could get it even worse than they are going to get


----------



## joe sod

walk2dewater said:
			
		

> There will be no breaking ranks from the DMark/Franc "Euro". Perhaps some indirect forgiving of debts [e.g. ECB fornally declares Italian bonds same investment grade as Germany], but Italy, Spain, Ireland etc. have more to lose than gain by exiting the euro. All euro denominated debts will be repaid, one way or the other.
> 
> Germans have an almost irrational fear of inflation, as alluded to in that article. For that reason alone, I reckon ECB rates will drift ever higher over the next 2 years, to minimum 8%.
> 
> Us Irish better be very happy indeed with our recent purchases on German credit.


 
Do you see the euro falling apart then. How can it continue to hold economies like Germany and France who would prefer higher interest rates with Italy, Spain and Ireland who need very low interest rates. If it did fall apart how would national currencies come back into existence. In 2001 Argentina defaulted on its national debt. This was also talked about in Ireland in the mid eighties. What would happen if there was large scale debt default by individuals in ireland. I think this is very likely.


----------



## Guest107

thewatcher said:
			
		

> In the event of a crash if anyone was to suggest that taxpayers money should be used to bail out the likes of this carry on,i would seriously have to consider my position within ireland inc.
> Everyone is entitled to 1 house in my book,after that your're on your own.



But the poor banks and the poor builders will also have to be bailed out....not just the investor muppets.

Lest anybody forget the £3000 FTB grant was intriduced in the early 1980s duing the last slump (and when you could buy a  house for £15000 in some cases. A 20% subsidy that was in that example. 

Don't think it could not happen again even though we bankrupted ourselves the last time


----------



## Calina

southsideboy said:
			
		

> Who is relying on terrorism to keep interest rates low?? Of course it is only a possibilty. I was merely pointing out that it could play a big role in the recovery of European economies. You must be very naive to think that a major 9/11 style attack in Europe would not affect fragile recovering economies. London and Madrid were minor attacks compared to 9/11. A large terrorist attack could have a severe impact on consumer confidence.


And your point is? We're talking about current public sentiment towards the housing market. Are you suggesting 1) terrorist attack followed by 2) low interest rates followed by 3) continued property growth or are you actually highlighting this as an issue that would have a further impact on property growth? Because if you are, you must be incredibly naive. The country is already endebted up to its ears. There comes a point when no matter how low interest rates are, it can't afford to take on any more debt. Low consumer confidence suggests low wishes to take on massive personal debt. 

I don't know what your point is. Currently, there are a busload of indicators telling us we're in trouble. Personally I wouldn't be endebting myself to the hilt in Stepaside if I saw all these indicators and thought that a major terrorist attack was a likely possibility. I can only assume you think otherwise.


----------



## Calina

joe sod said:
			
		

> Do you see the euro falling apart then. How can it continue to hold economies like Germany and France who would prefer higher interest rates with Italy, Spain and Ireland who need very low interest rates. If it did fall apart how would national currencies come back into existence. In 2001 Argentina defaulted on its national debt. This was also talked about in Ireland in the mid eighties. What would happen if there was large scale debt default by individuals in ireland. I think this is very likely.



No, I don't personally see the euro falling apart. I see that different regions will have hard times at different times. But that's a moot point. 

For the record, Ireland does not need very low interest rates. Ireland needs higher interest rates and has done for the past two to three years. It needs them because our inflation is above average, and our consumer debt is spiralling. Why do you think we need low interest rates - so we can afford to continue taking on so much debt?


----------



## tyoung

The paradoxical thing is that the longer the credit inflation goes on the lower the natural rate of interest level. As debt/income ratios increase the lower the rate of interest at which these become problematic. Debt is deflationary. The rise in debt to income means a smaller rise in interest rates could cause problems than even a few years ago.  If the debt  to income ratio continue to spiral Ireland will need low interest rates just to avoid an deflationary scenario.
 Of course we don't know what level of interest rate would cause problems at a given debt/income ratio.


----------



## southsideboy

Calina said:
			
		

> And your point is? We're talking about current public sentiment towards the housing market. Are you suggesting 1) terrorist attack followed by 2) low interest rates followed by 3) continued property growth or are you actually highlighting this as an issue that would have a further impact on property growth? Because if you are, you must be incredibly naive. The country is already endebted up to its ears. There comes a point when no matter how low interest rates are, it can't afford to take on any more debt. Low consumer confidence suggests low wishes to take on massive personal debt.
> 
> I don't know what your point is. Currently, there are a busload of indicators telling us we're in trouble. Personally I wouldn't be endebting myself to the hilt in Stepaside if I saw all these indicators and thought that a major terrorist attack was a likely possibility. I can only assume you think otherwise.


 
No that wasn't my point at all. I was just responding to your rather naive view that terrorism isn't an issue re; interest rates. Of course it is. 

As for the busload of indicators that are telling us we are in trouble - I still don't think we're heading for a crash. I think there will certainly be a downturn but not a crash. And I don't ever remember saying I was endebting myself to the hilt. In fact I can comfortably afford to buy my apartment without compromising on holidays, cars, nights out etc. I personally don't understand people who want to sacrafice their lifestyle for an investment property but I wouldn't want to wish a crash on them either.


----------



## redo

*Prediction;*

This coming selling season (Autumn/Winter) will (will = might, if *Loki* is lurking out there) see a decline in FTB's and a collapse of FTS (First time speculators) entering the market. This much is pretty obvious and understandable. Activity amongst intending second time buyers (ISTB), (FTB wishing to trade up) will notice a severe increase in competition. 

The housing output before the boom started, was very low (~35k), compared to the current output (projections from BOI this week is that over 100k houses will be built this year in 06). Given that the typical FTB normally trades up their property within 4-7 years, I think we can expect to see the panic depart from the investor and FTB market and begin to enter the ISTB market. (I don't have the figures but I can probably guess there is a higher percentage of apartments built within the projected 100k figure than within the 35k figure).

Prices for normal semi-d and detached houses in desirable areas are going to rocket in price. Areas in non desirable,value for money areas are going to plummet. I won't get into name calling. I think everyone knows if an area is nice or not, or whether or not they wish to bring up there kids there, assuming they can even get a place in the school (Read 2Packs' 2 band theory). Competition will be fierce, with the threat of ISTB being stuck in areas they never wished to settle in, with the intention of just getting on the property ladder. Initial evidence was provided in the first quarter of this year with house prices increasing circa 30% for properties in the trade up market. 

Currently, reduced viewings and fewer attendances at auctions, should not been seen as a lead indicator but as seasonal. In short, this coming selling season we will witness a marked increase in the ISTB's market. Prices will go through the roof (due to fundamentals, ie demand vs supply, lol) and prices increases will probably increase to 20-25%, incorporating the new interst rates.

You will hear EAs' economists trying to play down these figures the quarter after they are released by saying, 

"*We have noted a marked increase in house price inflation during the last quarter of 2006. House price inflation has surpassed previous highs of 1998 and is most prevalant in the trade up market. Initial indicators signal a drop in demand in the FTB and investor market, however this still brings inflation figures within previous predictions of 12%. The inactivity in the property market during the 2nd and 3rd can directly attributted to seasonal factors including the World cup. Going forward, we anticipate a cooling off effect, as potential buyers asess the impact of the recent interest rates increases from the ECB. Any continued reduction in FTB activity could weaken the overall market and lead to a period of negative growth".*


----------



## Marie

Hmmm!  Surely the scenario you describe would lead to a s-t-r-e-t-c-h between falling-in-price second-hand 'starter' properties/apartments and increasingly-expensive (through relative scarcity) of 3-bed semi-d's.  Do we know if this is borne out by birth-rate statistics for the past decade?  Is there actually a growing group of parents with three or four kids?  My impression was the birth-rate was down somewhat (adults too exhausted with overtime, commute and stresses of debt  )


----------



## walk2dewater

It's laughable that people think 8% ECB rates are out of the question.  And I think it's a minumum.  Just goes to show how ultra low rates has embedded in Irish group-think.


----------



## room305

walk2dewater said:
			
		

> It's laughable that people think 8% ECB rates are out of the question. And I think it's a minumum. Just goes to show how ultra low rates has embedded in Irish group-think.


 
No, not out of the question by any means. Certainly if we hit 2009 and inflation is still rampaging out of control, then 8% is hardly out of the question. Your timeframe seems quite short though.

Going by your estimations:

Dec 2006 - 4% (5 more hikes)
Dec 2007 - 7% (12 hikes)
Dec 2008 - 8% (4 hikes)

Given the much slower growth rate in the EU (estimated 1.8% p.a.) compared to the US (5-6%), twelve month-by-month, Fed style rate increases could probably tip some countries into a recession.

I doubt even the more hawkish members of the panel would want that.


----------



## walk2dewater

room305 said:
			
		

> Going by your estimations:
> 
> Dec 2006 - 4% (5 hikes)
> Dec 2007 - 7% (12 hikes)
> Dec 2008 - 8% (4 hikes)
> 
> Given the much slower growth rate in the EU (estimated 1.8% p.a.) compared to the US (5-6%), twelve month-by-month, Fed style rate increases could probably tip some countries into a recession.
> .


 
The ECB will start making 0.5% hikes or more, perhaps starting Aug 3.  The so-called "weak" growth in Germany is made of far tougher and sustainable stuff than the so-called "strong" growth in US.


----------



## Eurofan

walk2dewater said:
			
		

> The ECB will start making 0.5% hikes or more, perhaps starting Aug 3.


My thoughts are leading that way too. Threat of future rises can also be effective in damping inflation and after the relatively strong words of last week i wouldn't be surprised if the ECB is now ready to make that move.

While being a predictable central bank has been one of their states aims i'd suggest they now need to demonstrate they are serious about the constant aim of price stability etc.

A .5% on Aug 3rd would really start to polarise sentiment amongst the public here i believe. Rates have, in my experience, been of little concern to most buyers in the last few years. It's simply been a matter of the mortgage costing €xxx a month and thats that.

Gradual increases have allowed people to keep their heads stuck in the sand. A .5% increase with the threat of more to follow would start waking a lot of people up.

(btw i agree too the 'weak' German economic recovery is a complete red herring)


----------



## ecstatic

There is not a snowballs chance in hell interest rates will be 8% in two years.

Until european convergence of the east block has occured rates will stay low to create growth. 

God you can even get 4% fixed rate from banks in brussels for 20 years.


----------



## micheller

Can an Irish citizen as an EU Citizen get a mortgage from a European Bank (i.e avail of a 4% 20yr fixed?)


----------



## walk2dewater

ecstatic said:
			
		

> There is not a snowballs chance in hell interest rates will be 8% in two years.


 
There isn't a snowballs they'll be 2.75%


----------



## Guest107

*Anybody mention Japan ?*

http://www.rte.ie/business/2006/0710/wealth.html



> [FONT=Verdana, Arial, Helvetica, sans-serif]The Japanese are the only people in the world wealthier than the Irish, according to the report, which values our houses and financial assets - like pensions, shares, and other investments - at almost €800 billion.[/FONT]
> 
> [FONT=Verdana, Arial, Helvetica, sans-serif]If €115 billion owed to banks for mortgages and other loans is subtracted, the result, is €680 billion. *Property, however, accounts for three-quarters of this amount, a higher proportion than any other country.* The massive property boom has resulted in a massive 350% increase in wealth in a decade.[/FONT]


And we all know what happened to Japan ....around when they introduced the 50 year mortgage IIRC .But the Japanese also have investments in productive assets.

OH! and daft is up to 14157 having dropped to almost 14000 over the weekend as expired properties were cleared off.


----------



## whizzbang

*Re: Anybody mention Japan ?*



			
				2Pack said:
			
		

> http://www.rte.ie/business/2006/0710/wealth.html


[FONT=Verdana, Arial, Helvetica, sans-serif]"even when the value of principal private residences are excluded Ireland now has 30,000 millionaires."[/FONT]

so how many of those 30,000 are millionaires because they have  second/thurd houses as "investments"?

also it would be interesting to see the Japanese personal debt stats vs the Irish. From what I know Japanese save a lot, us, not so much.


----------



## walk2dewater

*Re: Anybody mention Japan ?*



			
				2Pack said:
			
		

> http://www.rte.ie/business/2006/0710/wealth.html
> 
> 
> And we all know what happened to Japan ....around when they introduced the 50 year mortgage IIRC .But the Japanese also have investments in productive assets.
> 
> OH! and daft is up to 14157 having dropped to almost 14000 over the weekend as expired properties were cleared off.


 
Quote from that article: "Property, however, accounts for three-quarters of this amount, a higher proportion than any other country."

What a joke..... surely even the most reality challenged can see through this. The *complete absence of foreign investors* in Irish property tells us exactly what the rest of the world makes of our delusional property "wealth".


----------



## room305

Guessing interest rates can be an impossible game anyway but whether base rates are 5% or 7% come the end of next year, it is clear that a vast number of Irish people are completely unprepared for interest rates even close to these figures.

I very doubt it bothers the ECB (and in some respects may even suit them) but it is funny that the high inflation of the last few years hasn't really led to many sustained calls for wage increases. Mostly I suspect, the availability of cheap credit has been offsetting the need for a rise in income. 

It is somewhat paradoxical, but I imagine as interest rates trend upwards to combat inflation, many Irish workers will start to aggressively demand higher wages to meet rising borrowing costs.

Example:

Interest-only €1M mortgage for 35 years @ 3.5% - €4,132.92 p.m.
Interest-only €1M mortgage for 35 years @ 8.5% - €7,468.61 p.m.

That's quite a jump to take in the space of a few years!


----------



## walk2dewater

room305 said:
			
		

> Guessing interest rates can be an impossible game anyway but whether base rates are 5% or 7% come the end of next year, it is clear that a vast number of Irish people are completely unprepared for interest rates even close to these figures.
> 
> I very doubt it bothers the ECB (and in some respects may even suit them) but it is funny that the high inflation of the last few years hasn't really led to many sustained calls for wage increases. Mostly I suspect, the availability of cheap credit has been offsetting the need for a rise in income.
> 
> It is somewhat paradoxical, but I imagine as interest rates trend upwards to combat inflation, many Irish workers will start to aggressively demand higher wages to meet rising borrowing costs.
> 
> Example:
> 
> Interest-only €1M mortgage for 35 years @ 3.5% - €4,132.92 p.m.
> Interest-only €1M mortgage for 35 years @ 8.5% - €7,468.61 p.m.
> 
> That's quite a jump to take in the space of a few years!


 
And because of the way we measure inflation [we count mortgage _payments_ not house prices] Irish inflation will SOAR as ECB rates rise.

oh yeah, ain't going to be pretty at all.


----------



## room305

walk2dewater said:
			
		

> And because of the way we measure inflation [we count mortgage _payments_ not house prices] Irish inflation will SOAR as ECB rates rise.


I always found this a bizarre way to measure inflation. 

If I buy a car on hire purchase and it costs €30k and last year it would have cost me €20k. However the car dealer spreads the payments over a longer period, thereby actually reducing the monthly repayment compared to last year. Nobody would then say the car price had fallen!

Is anyone aware of the reason for doing it this way or is it really a dastardly evil plot to convince people that house price inflation isn't really _proper_ inflation ...


----------



## Guest107

room305 said:
			
		

> I always found this a bizarre way to measure inflation.



It means that Irish inflation will track the rate rises ....given the mad size of our mortgages ....and that rate rises will not curb inflation in Ireland but may fuel it.


----------



## ivuernis

room305 said:
			
		

> It is somewhat paradoxical, but I imagine as interest rates trend upwards to combat inflation, many Irish workers will start to aggressively demand higher wages to meet rising borrowing costs.


 
They can demand all they like, but are unlikely to get them. We have already lost most of our competitive edge in this regards. 

The economy will suffer especially, the extra money going to be spent on servicing higher mortgage costs will result in money not being spent elsewherein the economy. 

It's possible to see a stagflationary scenario for the irish economy, whatever about anywhere else.


----------



## room305

ivuernis said:
			
		

> They can demand all they like, but are unlikely to get them. We have already lost most of our competitive edge in this regards.


 
Sadly, in the public sector they probably will.


----------



## whizzbang

room305 said:
			
		

> Sadly, in the public sector they probably will.


let all go work for the corpo...


seriously..


----------



## ivuernis

room305 said:
			
		

> Example:
> 
> Interest-only €1M mortgage for 35 years @ 3.5% - €4,132.92 p.m.
> Interest-only €1M mortgage for 35 years @ 8.5% - €7,468.61 p.m.
> 
> That's quite a jump to take in the space of a few years!


 
I think you gave the capitol+interest repayment figures above.  gave me these figures for interest only...

Interest-only €1M mortgage for 35 years @ 3.5% - €2,916.67 p.m.
Interest-only €1M mortgage for 35 years @ 8.5% - €7,083.33 p.m.


----------



## ivuernis

room305 said:
			
		

> Sadly, in the public sector they probably will.


 
Who's going to pay for it if the private sector gets a hammering and government revenue from the construction industry contracts.


----------



## ivuernis

whizzbang said:
			
		

> let all go work for the corpo...
> 
> seriously..


 
Have thought about it, some family members work in the public sector and comparing salaries i can believe the recent stat that says on average public sector workers earn 40% more than private sector workers. Plus there's all added benefits, e.g. pension, better job security, etc.


----------



## phoenix_n

This from the Sunday Independent...


----------



## ivuernis

walk2dewater said:
			
		

> And because of the way we measure inflation [we count mortgage _payments_ not house prices] Irish inflation will SOAR as ECB rates rise.


 
Short of wage hikes or tax breaks inflation in other goods and services should drop as the money once spend on them goes into servicing the higher mortgage repayments so it might be all a case where inflation for everything rises.


----------



## whizzbang

ivuernis said:
			
		

> Have thought about it, some family members work in the public sector and comparing salaries i can believe the recent stat that says on average public sector workers earn 40% more than private sector workers. Plus there's all added benefits, e.g. pension, better job security, etc.



That being said would it not drive you nuts working in there? Some friends of mine work for the goverment and they are surrounded by deadbeat work to rulers. It would do my head in to be honest.


----------



## ivuernis

whizzbang said:
			
		

> That being said would it not drive you nuts working in there? Some friends of mine work for the goverment and they are surrounded by deadbeat work to rulers. It would do my head in to be honest.


 
Agreed, that's why I thought about it and decided not to, still the money was tempting tho.


----------



## whizzbang

ivuernis said:
			
		

> Agreed, that's why I thought about it and decided not to, still the money was tempting tho.


it really is madness, who would have thought the most secure jobs would be the best paid, it seems backwards!?


----------



## ivuernis

Getting back to the topic at hand, i have a developer acquaintance who assures me the market won't drop (not that i would expect him to say otherwise), but at the same time he has recently off-loaded some of his property portfolio and diverted the funds into other areas.


----------



## room305

ivuernis said:
			
		

> I think you gave the capitol+interest repayment figures above.  gave me these figures for interest only...
> 
> Interest-only €1M mortgage for 35 years @ 3.5% - €2,916.67 p.m.
> Interest-only €1M mortgage for 35 years @ 8.5% - €7,083.33 p.m.


You are right. My mistake, the figures I gave relate to a with capital repayments mortgage. Highlights how little the IO mortgage saves you once rates go much higher.

A 242.85% increase in a few years. Quite staggering.

As an aside, I am continuously baffled by the lack of knowledge on the part of property investors here. Over the weekend, I asked a friend of mine (whom I have been trying to convince to sell his investment property and pay off his outstanding debts) was he concerned about rising interest rates over the short-medium term.

He conceded that although he was worried about the difficulty of making the repayments on his interest-only mortgage, there was only a year and a half left to run on the interest-only component. After which, he assured me confidently, rising interest rates would no longer be a concern as all the interest will have been paid off on the loan and he will only be repaying the capital ...


----------



## whizzbang

ivuernis said:
			
		

> Getting back to the topic at hand, i have a developer acquaintance who assures me the market won't drop (not that i would expect him to say otherwise), but at the same time he has recently off-loaded some of his property portfolio and diverted the funds into other areas.



Did he give any explaination for this apparent lack of confidence in the market? Or is it a simple case of diversifying?


----------



## ivuernis

whizzbang said:
			
		

> it really is madness, who would have thought the most secure jobs would be the best paid, it seems backwards!?


 
Like a lot of things in this crazy economy of ours i guess, but they have unions and are less prone to the vagaries of globalisation. I've never been in a unionised job, work in IT, and the spectre of competition from out sourcing to more competitive countries always looms on the horizon.


----------



## Howitzer

room305 said:
			
		

> As an aside, I am continuously baffled by the lack of knowledge on the part of property investors here. Over the weekend, I asked a friend of mine (whom I have been trying to convince to sell his investment property and pay off his outstanding debts) was he concerned about rising interest rates over the short-medium term.
> 
> He conceded that although he was worried about the difficulty of making the repayments on his interest-only mortgage, there was only a year and a half left to run on the interest-only component. After which, he assured me confidently, rising interest rates would no longer be a concern as all the interest will have been paid off on the loan and he will only be repaying the capital ...


 
That's the best one I've heard in quite a while. I hope you corrected him. And if so what was his reaction?


----------



## room305

Howitzer said:
			
		

> That's the best one I've heard in quite a while. I hope you corrected him. And if so what was his reaction?


It was a struggle not to burst out laughing to be honest. Anyway, I said that I had never heard of such a mortgage and that typically an interest-only mortgage involved repaying only the interest for a few years followed by repayments of both interest and capital but that at all times you are repaying the interest on the outstanding balance of the loan.

Although he insisted he was sure, some back of a beer mat calculations on just how much he would have to be repaying the bank to "forward pay" all the loan interest, even if he had fixed @ 3.5% for 30 years, seemed to convince him.

I left it at that but have my fingers crossed he will give serious consideration to selling. Even my parents when I visited them this weekend, seemed less bullish on property. My father was all set to purchase another as recently as one month ago (despite my pleas) but has now decided to adopt a "wait and see" attitude to the market and will reassess the situation in a few months.

If you want an indicator of what public sentiment is like, that is not a bad one. I believe many people are moving into a cautionary phase which will only be heightened as rates continue to rise.


----------



## ivuernis

whizzbang said:
			
		

> Did he give any explaination for this apparent lack of confidence in the market? Or is it a simple case of diversifying?


 
No, he has nothing but confidence in the market, but his diversification, whilst not an admittance of a downturn tells me he feels there is at least the chance of an imminent peak. Actions speak louder than works as they say.


----------



## whizzbang

ivuernis said:
			
		

> No, he has nothing but confidence in the market, but his diversification, whilst not an admittance of a downturn tells me he feels there is at least the chance of an imminent peak. Actions speak louder than works as they say.


a peak followed by further gains? interesting trigonometry


----------



## whizzbang

room305 said:
			
		

> If you want an indicator of what public sentiment is like, that is not a bad one. I believe many people are moving into a cautionary phase which will only be heightened as rates continue to rise.



Very true, according to [broken link removed]

The next phases are Anxiety, denial, fear, depression, panic, capitulation, despondancy, desperation and then on up to hope.

I wonder how quickly we will cycle through them?


----------



## ivuernis

room305 said:
			
		

> Although he insisted he was sure, some back of a beer mat calculations on just how much he would have to be repaying the bank to "forward pay" all the loan interest, even if he had fixed @ 3.5% for 30 years, seemed to convince him.


 
I am aghast at that lack of knowledge considering the financial outlay and risk (what risk in buying property some might say!!) involved. He should hopefully thank you in time if you save him from a nasty surprise at the end of the interest-only term of his mortgage. 

I know of similar of tales that make me fear for the general knowledge of people getting involved in property investment. I know of a someone who's followed a friend of theirs down the road of a second "investment" property purely on the basis that their friend was an accountant and how could an accountant be wrong about investing in property. Whilst I'm sure the accountant knows how to make the most of any tax breaks, etc. it does not make them financial gurus in all aspects. When did people lose the capacity to think for themselves?


----------



## walk2dewater

ivuernis said:
			
		

> I am aghast at that lack of knowledge considering the financial outlay and risk ... When did people lose the capacity to think for themselves?


 
We may be a "rich" country but believe me, and I've lived and worked in several countries, collectively as a nation we don't think like people from rich countries.  The average, middle-class Swiss or Canadian simply wouldn't fall for what going on here.  We think more like Albanians with their famous get-rich pyramid schemes.


----------



## ivuernis

walk2dewater said:
			
		

> We think more like Albanians with their famous get-rich pyramid schemes.


 
Sure haven't we had pyramid schemes in Cork recently! I remember when pyramid schemes were ongoing during the 80's and even as a kid back then I was dumbfounded as to why people got involved. When it happened again recently I didn't know whether to laugh or cry.


----------



## redo

It will be a very interesting autumn selling season when the ECB puts rates up.  Speculators who've bought with an IO mortgage will find it very hard to offload these properties without a heavy price discount.  It could become very expensive if they hold out for a better price in a falling market and with rising IO payments.


----------



## walk2dewater

redo said:
			
		

> It will be a very interesting autumn selling season when the ECB puts rates up. Speculators who've bought with an IO mortgage will find it very hard to offload these properties without a heavy price discount. It could become very expensive if they hold out for a better price in a falling market and with rising IO payments.


 
yeap.

But, and this occurred to me the other day, perhaps all that overhang of unrented property will come onto the market. Since capital appreciation is "guaranteed" and prices soft, IO holders may compensate for higher rates by renting out their currently unoccupied properties. Better to accept the burden of being a landlord and make €500/mth for that Dublin apartment, or €750/mth for the Kildare 3-bed. We may see collapsing rents. This is good cos my lease is up early Autumn  Perhaps I can extract another 5-10% off my (already cheap) rent.


----------



## phoenix_n

Like the saying, men are motivated by two emotions : Interest and Fear. Interest has spawned the property boom and fear will burst it.



			
				whizzbang said:
			
		

> Very true, according to [broken link removed]
> 
> The next phases are Anxiety, denial, fear, depression, panic, ca1pitulation, despondancy, desperation and then on up to hope.
> 
> I wonder how quickly we will cycle through them?


----------



## room305

This was in today's Independent:

http://www.unison.ie/irish_independent/stories.php3?ca=9&si=1649377&issue_id=14329



> [FONT=Verdana, Arial] Despite many agents' best endeavours to hide the fact, results show that many auctions took place last week where no bids were made at all.[/FONT]
> [FONT=Verdana, Arial]
> Estate agents are now being forced to put up scores of properties for sale by private treaty. They are hoping that auction fever will revive in September when buying traditionally picks up again.[/FONT]


----------



## Guest107

*spanish investors hget hit*

Todays Irish times, some 100,000 Irish who own property in Spain are being chased for local taxes (like rates) and a 'wealth tax' on top.

http://www.andalucia.com/law/wealthtax.htm

http://www.andalucia.com/property/propertytaxes.htm


----------



## redo

*Re: spanish investors hget hit*



			
				2Pack said:
			
		

> Todays Irish times, some 100,000 Irish who own property in Spain are being chased for local taxes (like rates) and a 'wealth tax' on top.


Can we now expect Daft.ie to start selling overseas properties?  Eventually, there will be a worldwide shortage of naive paddys to offload these foreign "investments" to.


----------



## phoenix_n

This in sundays independent

*Is it the brakes . . . or something more serious?*



			
				room305 said:
			
		

> This was in today's Independent:
> 
> http://www.unison.ie/irish_independent/stories.php3?ca=9&si=1649377&issue_id=14329


----------



## Guest107

*Flipper wants out*

As you can see the EA is selling them for  [broken link removed]and there seem to be some left (mid terrace) 

A flipper got one, he wants his profit so he <cough> Mis Spells the name of the estate and asks for €685k


----------



## whizzbang

*Re: Flipper wants out*



			
				2Pack said:
			
		

> As you can see the EA is selling them for  [broken link removed]and there seem to bel some left (mid terrace)
> 
> A flipper got one, he wants his profit so he <cough> Mis Spells the name of the estate and asks for €685k



 I'm shocked and appauled....

look like he is hoping to charge people with stupid/lazy tax...


----------



## redo

*Re: Flipper wants out*



			
				2Pack said:
			
		

> As you can see the EA is selling them for  [broken link removed]and there seem to be some left (mid terrace)
> 
> A flipper got one, he wants his profit so he <cough> Mis Spells the name of the estate and asks for €685k


Well, if anyone does buy it, they deserved to be ripped off.


----------



## miju

> There's definitely a creaking sound coming from the property market. Is it the brakes squeaking - or something more serious?


 
my guess is that it's the creaking of the last support columns of FTB's propping up the market about to give way


----------



## redo

miju said:
			
		

> my guess is that it's the creaking of the last support columns of FTB's propping up the market about to give way


 Perhaps not the FTB's but definately the 'Buy to Let' crowd and the speculators who buy from the plans hoping for a quick turnaround.


----------



## soma

Wow that was a pretty scary anecdote about a specu-vestor not understanding the "reset" on his interest-only loan. I wonder how much the joe-soap-specu-vestors understand about their exotic mortgage products..

Here's a question about IO mortgages. Alot of speculation appears to be carried out using them. AFAIK most of them reset to being interest+capital after a period of e.g. 3-5 years. But what is there to stop speculators from switching mortgage providers each time the 'reset' is about to kick in..? (assuming they always have the cashflow to pay even v high interest rates). I'm unfamiliar with the smallprint of mortgages, so I don't know if they are somehow locked-in or pay hefty charges for transferring institutions.


----------



## room305

soma said:
			
		

> But what is there to stop speculators from switching mortgage providers each time the 'reset' is about to kick in..? (assuming they always have the cashflow to pay even v high interest rates).



Nothing AFAIK, although if the market value of the property drops below the loan amount then obviously they cannot borrow more than what the property is worth.

You'll find though, that once interest rates are high enough, the monthly savings that result from having long terms or repaying only the interest are greatly reduced.


----------



## Neffa

soma said:
			
		

> Wow that was a pretty scary anecdote about a specu-vestor not understanding the "reset" on his interest-only loan. I wonder how much the joe-soap-specu-vestors understand about their exotic mortgage products..
> 
> Here's a question about IO mortgages. Alot of speculation appears to be carried out using them. AFAIK most of them reset to being interest+capital after a period of e.g. 3-5 years. But what is there to stop speculators from switching mortgage providers each time the 'reset' is about to kick in..? (assuming they always have the cashflow to pay even v high interest rates). I'm unfamiliar with the smallprint of mortgages, so I don't know if they are somehow locked-in or pay hefty charges for transferring institutions.


 
AFAIK you can have IO for the term of the mortgage now - BoSI currently do that and I think others do too. In any event, you can certainly flip providers at no cost if you have a 3-year "introductory" IO term.


----------



## z107

> AFAIK you can have IO for the term of the mortgage now



How does that work? - I thought with interest only mortgages, you're only paying off the interest, so you always owe the amount borrowed.


----------



## Neffa

umop3p!sdn said:
			
		

> How does that work? - I thought with interest only mortgages, you're only paying off the interest, so you always owe the amount borrowed.


 
Either (1) it is an investment so you accept that you're only getting the capital upside - you never intend to pay it off.  You "roll-over" the mortgage long-term or (2) if it is against your PPR you have a savings vehicle (pension, equities, stake in a business etc.) which will pay off the loan when you retire.

Option (2), particularly with a pension, is very popular in the UK but much less so in Ireland. The mortgage we have for our London house is set up in exactly this way.


----------



## wolfie

Anyone notice the addition of the word '' region '' before the prices on daft?.


----------



## Contrarian

They're giving the "asking price" under some houses now in the Examiner property supplement which I have'nt seen up until last week.

A 3 bed semi in my area costs about €750 pm to rent but around €1500+pm to buy, I simply do not see the logic of buying these things if 100,000 more of them are going to be built next year.
They say towards the end of a financial mania, the last few rational people start questioning themselves, asking 'is it me that is crazy?' That
point has surely been reached in Ireland.
It seems to me that most of the people that were going to buy, have bought, and that in a rising interest rate environment there has to be a finite number of people willing/able to borrow €400,000 to buy a flatpack semi in a country with the population of Greater Manchester and more land than you can shake a stick at...

'We learn from history that we do not learn from history' - Hegel


----------



## bearishbull

Contrarian said:
			
		

> They're giving the "asking price" under some houses now in the Examiner property supplement which I have'nt seen up until last week.
> 
> A 3 bed semi in my area costs about €750 pm to rent but around €1500+pm to buy, I simply do not see the logic of buying these things if 100,000 more of them are going to be built next year.
> They say towards the end of a financial mania, the last few rational people start questioning themselves, asking 'is it me that is crazy?' That
> point has surely been reached in Ireland.
> It seems to me that most of the people that were going to buy, have bought, and that in a rising interest rate environment there has to be a finite number of people willing/able to borrow €400,000 to buy a flatpack semi in a country with the population of Greater Manchester and more land than you can shake a stick at...
> 
> 'We learn from history that we do not learn from history' - Hegel


house in my area renting for 34% of equivalent repayment mortgage (house "valued" close to a million), NONSENSE!!!


----------



## evan

Ive just looked at the Property Investment page on this website and have noticed two threads on it enquiring about selling investment properties. The sentiment has definitely changed. Many people who invested on the upswing had the smug attitude that they could always sell out when the tide started turning. The problem with this strategy is that it will be very hard to sell now that buyers know the tide has turned. There was an article in the independent today about house auctions in dublin last week attracting no bids. The only way now for sellers to attract bids is to start asking for much lower asking prices. A lot of investors are now going to find out how illiquid property really is and in a downturn houses may be on the market years.


----------



## ClubMan

evan said:
			
		

> Ive just looked at the Property Investment page on this website and have noticed two threads on it enquiring about selling investment properties. The sentiment has definitely changed.


Two threads about selling investment property mean that sentiment has changed?


----------



## CN624

The blame game has really started.

http://www.unison.ie/breakingnews/index.php3?ca=9&si=94800

Methinks the government is afraid the 'fundamentals' are about to be found out ahead of schedule i.e the election.


----------



## room305

That little segment is a classic. I love this quote:



> Reports this morning said Junior Minister Noel Ahern had expressed concern that the banks were willing to give out so much money to home-buyers, thereby fuelling the "hype" surrounding the property market.




From the party that has done nothing but "hype" the property mania since its inception. He might also want to chastise his brother for all the hyping he has been doing.

I actually live in Noel Ahern's constituency and had been greatly looking forward to asking him some tough questions about the housing boom in the run up to the election. Not least because of a comment he made on Newstalk a few months back, where he claimed that houses are even more affordable now than in 1995 because wage increases have kept pace or outpaced the rise in house prices. When I relayed the comment to a neighbour her reaction was "Yeah, _his_ wages maybe".

You can bet that Noel Ahern didn't make this comment without some serious feedback from the doorsteps of his consituency ...


----------



## Neffa

evan said:
			
		

> Ive just looked at the Property Investment page on this website and have noticed two threads on it enquiring about selling investment properties. The sentiment has definitely changed. Many people who invested on the upswing had the smug attitude that they could always sell out when the tide started turning. The problem with this strategy is that it will be very hard to sell now that buyers know the tide has turned. There was an article in the independent today about house auctions in dublin last week attracting no bids. The only way now for sellers to attract bids is to start asking for much lower asking prices. A lot of investors are now going to find out how illiquid property really is and in a downturn houses may be on the market years.


 
Guys, we should be careful not to clutch at straws like the UK's housepricecrash forum. You read things on there like "I heard someone on the bus say that they're having payment challenges - the crash is on"!!!

If the tide does turn it will take 12-18 months before the general population really believe it has turned - the SSIA money and election giveaways will cushion the effect into 2007.


----------



## whizzbang

Neffa said:
			
		

> Guys, we should be careful not to clutch at straws like the UK's housepricecrash forum. You read things on there like "I heard someone on the bus say that they're having payment challenges - the crash is on"!!!
> 
> If the tide does turn it will take 12-18 months before the general population really believe it has turned - the SSIA money and election giveaways will cushion the effect into 2007.



very good point. I think you won't really be able to call a down turn until after at least 2 or 3 months of serious price declines. Otherwise there is too high a chance it is just a wobble and not an actually collapse. 

I'm not sure it will take a full 12 to 18 months for public opinion to change, but it would definitly take 6 or more before your Gran and aunts to stop asking "have you bought yet?"


----------



## Persius

I know the SSIAs are only starting to mature now and the bulk of them won't mature till 2007. However I think the SSIA-effect has already been priced in to the market. FTBs etc are getting loans from parents, credit unions etc for deposit or stamp duty which they will then pay back in 6 months time once their SSIA matures.

I don't really have any evidence for this, just a hunch based on my own thinking as a potential FTB. Would be interested to hear other people's comments on this.


----------



## beattie

Neffa said:
			
		

> Guys, we should be careful not to clutch at straws like the UK's housepricecrash forum. You read things on there like "I heard someone on the bus say that they're having payment challenges - the crash is on"!!!
> 
> If the tide does turn it will take 12-18 months before the general population really believe it has turned - the SSIA money and election giveaways will cushion the effect into 2007.


 
Good point, ECB will have to go to 3.5% before the squeeze starts to really bite IMO. Prices will be sticky on the way down and as judging by what is going on in the US where they peaked in the Autumn of last year they have not come down that much (and that is even with the Fed continously increasing rates). 

I do however detect that the general change in sentiment coming from the print media is starting to be discussed in the canteen a bit more that in previous months


----------



## room305

Neffa said:
			
		

> Guys, we should be careful not to clutch at straws like the UK's housepricecrash forum. You read things on there like "I heard someone on the bus say that they're having payment challenges - the crash is on"!!!


This thread isn't trying to call the top of the market or chart the crash, it was set up to try and assess public sentiment towards the housing market. Last year Joe Punter would have told you housing was a one way bet, couldn't lose no matter what, etc. Now I'm detecting a slight change in that stance, more caution, an acknowledgement that maybe things have run away with themselves but still reasonably confident that property is a good medium-long term bet.

Of course, it is important to try and find any evidence of this. The Daily Mail have an article today pointing out how flawed the recent report placing us as the second wealthiest nation in the world is. I don't have a link but here is an example quote:



> Bank of Ireland researchers call it wealth, but one may as well call it a pyramid scheme.


The media don't think dictate public opinion but try to reflect it. There has been a lot of bearish comment in the media recently about the Irish property market and this is filtering down.


----------



## room305

beattie said:
			
		

> Good point, ECB will have to go to 3.5% before the squeeze starts to really bite IMO. Prices will be sticky on the way down and as judging by what is going on in the US where they peaked in the Autumn of last year they have not come down that much (and that is even with the Fed continously increasing rates).
> 
> I do however detect that the general change in sentiment coming from the print media is starting to be discussed in the canteen a bit more that in previous months



I would say many properties in the US have fallen dramatically, particularly in the former "hot" markets - Florida, California etc. However, many borrowers have been shielded by the fixed portion of their hybrid ARMs. The bulk of these are set to reset to above the current interest rate (5.25%) in the next few years. Some financial columnists have referred to this as a "ticking time bomb".


----------



## miju

wow this thread hasn't half turned out popular , results of the poll i'm running are pretty interesting as well (though only 100 votes so far so suppose you could call it a snapshot kinda poll at the moment)

I own property and am bullish - 23.23%
I own a property and am bearish - 28.28%
I do not own property and am bullish - 11.11%
_I do not own property and am bearish_ - 37.37%

total bullish : 34.34%
total bearish: 65.65%

definitenitely indicates a big shift in sentiment IMO and most notably among the FTB's when you compare non-owners who are bullish to non-owners who are bearish


----------



## Guest107

Daft up 206 properties since friday to 14295 . It was 14089 when I first looked. 1.5% more properties  for sale in 3 days.


----------



## Contrarian

In the US $300 billion of mortgages this year and $1 trillion next year will be switched to adjustable payments. The 2007 adjustments will almost certainly be the largest such turnover that has ever occurred. The effects could be colossal.


----------



## Guest107

Contrarian said:
			
		

> In the US $300 billion of mortgages this year and $1 trillion next year will be switched to adjustable payments. The 2007 adjustments will almost certainly be the largest such turnover that has ever occurred. The effects could be colossal.



These are negative amortization mortgages are they not  ????

They are not as common in Ireland  .  Allegedly !!!!!


----------



## room305

2Pack said:
			
		

> These are negative amortization mortgages are they not  ????
> 
> They are not as common in Ireland  .  Allegedly !!!!!



No, they are essentially variable interest loans with the first few years fixed. As contrarian mentioned, a huge amount of this fixed periods lapse next year. These people have not really felt the effect of the Fed's 17 month run of monthly 0.25% hikes. For many of them it may be akin to a sudden 400% increase in the interest component of their mortgage repayments.


----------



## SLAPPY

Speaking from my experience in the once hot Florida market, prices have fallen  10%-15% from their peak in just the past year.  That is simply based on what I thought my house was worth a year ago, and what it could sell for now.  The official figures published by the NAR claim it has only dropped 2%.   Once the specu-vestors stopped buying, the market took a sharp nosedive and everyone realized the building boom overshot demand.  I'm not sure where prices will bottom out, but I know we're not even close yet.    It will be a very ugly ride on the way down as everyones net worth is slashed in half and will likely take years to fully play out.   I fear the situation in Dublin could turn quicker than most people think.   A little bad press goes a long way to sway public opinion.   Most of my friends in Dublin have jobs related to the construction business and I worry about their future.   I think we all know what is coming for Irish property prices, but are we really prepared for it (lost jobs, bankruptcy, recession??)


----------



## Guest107

SLAPPY said:
			
		

> Once the specu-vestors stopped buying, the market took a sharp nosedive and everyone realized the building boom overshot demand.


And it seems that while the Florida market was going up the number of specu-vestors or flippers  who were stirring it  was actually higher than thought 

[broken link removed]

The interesting thing about Ireland is that a contract is not a contract so a lot of these guys can withdraw fast. If you have €10k down on a €600k property today  that you intended to flip then you can just walk away from the deal in Ireland because the hit if you buy it could be over €10K . 

These developments (which were once sold out) will suddenly come back on the market with a 'few' cancellations. They will never admit how many.

Watch out for them


----------



## redo

There are pitfalls for the investulators should watch out for.  Having convinced themselves that they're in it for the long term, when in fact, all they expect is capital apprication and not to be landlords, many of them will ignore their gut feeling to sell.  Greed will be their downfall.


----------



## CN624

Is it not possible for US mortgages to be fixed for the entire term?


----------



## room305

CN624 said:
			
		

> Is it not possible for US mortgages to be fixed for the entire term?



I doubt it, are full term fixed mortgages available here? I presume around 10-15 years is the upper limit. The key point is that even if these people wish to fix again at the end of the term, the rate will have shot up. Short term rates have increased by 4.25% in just under a year and a half. The full effects of this have not been realised because thus far the banks are taking the hit rather than the borrowers.


----------



## Contrarian

Traditionally, the majority of US mortgages were fixed for 30 years, but
in the last few years, many buyers took out interest-only, variable-rate loans, and in some cases put no money down to buy a house. According to the government-chartered mortgage giant Freddie Mac one out of every three loans issued in 2005 was an adjustable rate mortgage. Now that we’ve seen 14 consecutive interest-rate increases since June 30, 2004, many of these loan rates are bumping up, increasing the size of mortgage payments. Houses were unaffordable for a lot of people at 6% fixed over 30 years but at 2/3% for the first couple of years it was possible to buy with the hope that increasing values would mitigate the adjustment to higher rates.


----------



## Howitzer

Turn on to newstalk, Noel Ahern sounds like WTDW.


----------



## Howitzer

Noel Ahern, Jill Kirby (Sunday Times) and some bank dude. The opinions of the bank guy and Jill Kirby were predictable enough, Jill has been a property bear for quite a while. Ahern sounded quite panicked, VERY bearish, and seemed to be pushing any blame for any future crash firmly at the door of the banks, notably the central bank which should be more restrictive with it's lending to the regular banks + 100% loans. He disowned any blame saying that the departments sole role is on the supply side and pointed to the kazillion or so units being built this year. He also threw some blame at parents for helping/buying places for their kids, and individuals for buying now rather than waiting till they'd saved more.


----------



## redo

It would be interesting to know how many of the banks' stress testing algorithims include a drop in the property market.  No many I'd say.


----------



## whizzbang

Howitzer said:
			
		

> Ahern sounded quite panicked, VERY bearish, and seemed to be pushing any blame for any future crash firmly at the door of the banks, notably the central bank which should be more restictive with it's lending to the regular banks + 100% loans. He disowned any blame saying that the departments sole role is on the supply side and pointed to the kazillion or so units being built this year. He also threw some blame at parents for helping/buying places for their kids, and individuals for buying now rather than waiting till they'd saved more.



Did he say "Shure who's runnin this place anyway lads?"


----------



## Afuera

Howitzer said:
			
		

> Turn on to newstalk, Noel Ahern sounds like WTDW.



Is it possible to pick this up as a podcast for those that aren't local? What show was it on?


----------



## room305

Howitzer said:
			
		

> Ahern sounded quite panicked, VERY bearish, and seemed to be pushing any blame for any future crash firmly at the door of the banks, notably the central bank which should be more restrictive with it's lending to the regular banks + 100% loans. He disowned any blame saying that the departments sole role is on the supply side and pointed to the kazillion or so units being built this year. He also threw some blame at parents for helping/buying places for their kids, and individuals for buying now rather than waiting till they'd saved more.


This must have election-related alarm bells going off in FF HQ. No matter what anyone says or how much blamestorming is done, whichever party is in charge when this crash occurs is going to be out of power for about 20 years ...

If I were an evil FF strategist I'd be setting the party up to lose by a narrow margin. Then I'd led the party smugly to the opposition benches and shout loudly "I told you no-one could manage the economy like us!" when the alternative government tried to deal with the aftermath of a housing crash.

As as the market bottomed out, FF would be re-elected on landslide by promising to reverse all the measures the alternative government were forced to put in place (higher taxes etc.) ...


----------



## conor_mc

room305 said:
			
		

> This must have election-related alarm bells going off in FF HQ. No matter what anyone says or how much blamestorming is done, whichever party is in charge when this crash occurs is going to be out of power for about 20 years ...
> 
> If I were an evil FF strategist I'd be setting the party up to lose by a narrow margin. Then I'd led the party smugly to the opposition benches and shout loudly "I told you no-one could manage the economy like us!" when the alternative government tried to deal with the aftermath of a housing crash.
> 
> As as the market bottomed out, FF would be re-elected on landslide by promising to reverse all the measures the alternative government were forced to put in place (higher taxes etc.) ...


 
Most cunning, most devious......


----------



## redo

room305 said:
			
		

> This must have election-related alarm bells going off in FF HQ. No matter what anyone says or how much blamestorming is done, whichever party is in charge when this crash occurs is going to be out of power for about 20 years ...
> 
> If I were an evil FF strategist I'd be setting the party up to lose by a narrow margin. Then I'd led the party smugly to the opposition benches and shout loudly "I told you no-one could manage the economy like us!" when the alternative government tried to deal with the aftermath of a housing crash.
> 
> As as the market bottomed out, FF would be re-elected on landslide by promising to reverse all the measures the alternative government were forced to put in place (higher taxes etc.) ...



Isn't there a FF backbenchers debate going on tommorow?.  I bet the FF TD's in the commuter belts are getting hammered on the doorsteps about the high cost of housing.  Many of the constituants in these areas (Meath, Kildare, Louth etc) perhaps bought to get on the property ladder and now are appauled at the prospect of handing out 50k-100k in stamp duty when they want to return to the area in which they were brought up in.   Even more so when they hear that the Government is raking in nearly a half a billion in stamp duty that will probably be squandered on election promises and make-up.

NOTE: Please squander it on more Traffic Corps Gardai.


----------



## Guest107

Howitzer said:
			
		

> Noel Ahern, Jill Kirby (Sunday Times) and some bank dude. The opinions of the bank guy and Jill Kirby were predictable enough, Jill has been a property bear for quite a while. Ahern sounded quite panicked, VERY bearish, and seemed to be pushing any blame for any future crash firmly at the door of the banks, notably the central bank which should be more restrictive with it's lending to the regular banks + 100% loans.


 Noel is minister for housing and has advance notice of lots of interesting stats that we mortals would not have. He has the latest housing starts and the latest completion figures well before they are published. He knows the size of the average FTB mortgage and can see changes very fast ....its a legacy of the FTB grant his department administered. 

What IS  he hiding and what DOES he see happening before the next election AND  for which FF will be blamed ???? . Why can he not simply go to the Galway races and chill.....like all good FFers should. 


> He disowned any blame saying that the departments sole role is on the supply side and pointed to the kazillion or so units being built this year.


 and how about building regulations and national planning guidelines and other stuff his department is supposed to do ??


> He also threw some blame at parents for helping/buying places for their kids, and individuals for buying now rather than waiting till they'd saved more.


 the durty blueshirt bastards


----------



## room305

As a counterpoint to the bearish sentiment being espoused here, when I arrived home from work today there was one of those "this house has recently been sold for a record price in your area, we have numerous potential buyers for a property such as yours, please call etc. etc." awaiting me on the mat.

Presumably the REA (representing one of the big firms) wouldn't have paid someone to deliver these if they had a glut of unsold properties sitting on their books.

Also while I like my little house, I am forced to concede that it is probably closer to the bottom of the market than the top.

I thought it was interesting anyway.


----------



## gearoidmm

Agree that this all might be a little premature.  Compare number of properties available on DAFT and myhome.ie in Dublin, Wicklow, Kildare and Meath (4-5000) with the inventory in San Diego currently (~24,000) which has a similar population (1.27 million).  Prices won't fall unless (until) there is a large increase in inventory.

Spent last night trying to convince a friend that now might not be a good time to buy a crappy apartment on her own when interest rates are rising but she and the other four of her friends with her all told me I was mad.  2 of the others are buying also - one an investment property.  All agreed that prices were mad but despite this they will never fall and they might as well buy anyway.

No sign of a change in sentiment there.


----------



## walk2dewater

gearoidmm said:
			
		

> Prices won't fall unless (until) there is a large increase in inventory.


 
Actually this is the first stage.

While a sudden gapping down in market prices WILL happen and will probably be a precursor to smaller, drawn out and sustained falls, what we're likely to see before any tipping into a true buyers market is (1) a build up in inventory (2) massive falling off in trading activity, then (3) a drop in inventory. At stage 3 the have-to sellers (the only ones left in the market) cave into buyers demands for discounts, and buyers will just be clueing in to the possibility of discounts. Only at stage 3 will we begin a proper 'buyers market', not before.

We are barely at stage 1 (and maybe not even), and the progression through the stages can be fast or so slow as to be almost imperceptable.

Here's a VERY interesting set of charts. From these charts I'd suggest the UK is well past stage 1.
(allow it to load)
[broken link removed]


----------



## CN624

I know this thread is discussing public sentiment but some industry views may also be useful. I was talking to a mate last night who is in foreman of a very large development and would be close to the developer. 

He says there is a huge panic at the moment to get as much done as quickly  possible within the industry before the bubble bursts. 
They are fitting out apartments twice as fast now as they were were 6 months ago. I asked him was it because they are more efficient and he says not really, its cos the workers are working longer hours because they know as soon as the plug is pulled they could be out of work for a long long time.


----------



## whizzbang

CN624 said:
			
		

> .
> They are fitting out apartments twice as fast now as they were were 6 months ago.



Twice the speed! Half the quality!


----------



## Sophia2457

*Did anyone see Location, location, location on telly last night?*

I'm proved right! Wicklow is THE most expensive county to buy in bar Dublin.

The presenters did their best, but there was no way the couple were going to get what they wanted (4 bed detached hahaha) for the money they had.

They really showed Wicklow as a sellers' market - hugely inflated prices for the cachet of living there. And, if you're like me and stuck on a humonguous estate in Bray and want off badly - the only way to get anything decent is to move to another county.

So that's what we're trying to do. Wicklow's very scenic and near Dublin and all that, but you'll spend your life in traffic and never get enough together (bar windfalls) to scrape together enough to get out of your first house without mortgaging your life away.

Be interested to hear what others thought


----------



## Bedsit

A good example is the ChocolateFactory development in Kilmainham. The speed at which the work is being completed is astonishing. A month ago the block facing Kilmainham hospital was not even complete structurally. Last week they were putting up the glass front to the same block.


----------



## whizzbang

I wonder does this mean we are going to see an even bigger number of completions this year than previously thought as developers rush to pull in timelines? Ie stuff scheduled for Q1 2007 gets finished in Q4  2006?


----------



## rgfuller

Bedsit said:
			
		

> A good example is the ChocolateFactory development in Kilmainham. The speed at which the work is being completed is astonishing. A month ago the block facing Kilmainham hospital was not even complete structurally. Last week they were putting up the glass front to the same block.


 
The block facing the hospital is actually the new Hotel and was always scheduled to be completed first.


----------



## Marie

room305 said:
			
		

> As a counterpoint to the bearish sentiment being espoused here, when I arrived home from work today there was one of those "this house has recently been sold for a record price in your area, we have numerous potential buyers for a property such as yours, please call etc. etc." awaiting me on the mat.
> 
> Presumably the REA (representing one of the big firms) wouldn't have paid someone to deliver these if they had a glut of unsold properties sitting on their books.
> 
> Also while I like my little house, I am forced to concede that it is probably closer to the bottom of the market than the top.
> 
> I thought it was interesting anyway.


 
Hi Room, all
Why do you think the Estate Agents need to whip up interest by junk-mailing exercises (at the cost of a couple of hours @ minimum-wage rate to some unemployed chisler) if business is booming?

Where I live (just outside Greater London boundary) I have these shoved through my letter-box regularly.  However the market locally has moved from stagnant (which it was for a couple of years) to frankly depressed in the wake of the government's commitment to increasing the housing stocks to resolve the alleged 'shortage' in the south-east.  This strategy has meant that this desirable stable environment within commute of London (tens of thousands of people used to take the train into the city to work every day) has in 10 years become a concrete jungle with little open space or amenity.  Houses nearby have been on the market up to 2 years (and that is AFTER price-reduction of - in one case - £30,000 on an already-knock-down price.  Ten years ago when I purchased my _home _in a prestigious street (quiet Victorian terrace in a conservation area adjacent to high-street, station and bus-services) it was all owner-occupied.  Now _most _of the houses are rented out...........at least that is the plan!  The local university - which like all learning-establishments these days must organise itself as a hard-nosed business - recognised a decade ago the potential income from rental of student accommodation.  They built 20,000 units on the university campus.  So for the amateur landlords/risk-takers who 'bought to let' when it was 'a sure thing' and 'money for old rope - you can't go wrong' hold property which they can't get rid of (there are no buyers) and they can't rent out (there is no market).  

It was only at that stage I began to get estate agents' leaflets thrust through my door telling me my property was 'needed' as they had 'buyers waiting'.  

By the way did anyone see 'Property Ladder' on Channel 4 last night?  I caught the last few minutes of it.  A couple (she was Irish, with a bank-manager hubby) were endeavouring to resettle in Ireland for quality-of-life considerations, settle for a property in Newtownmountkennedy (I think?) and our intrepid PL team 'make the phone call' only to be told the price has gone up Euro50,000 since they viewed the previous day........The last shots are the couple back in the good old UK saying sadly 'It was only a dream.........we've got it out of our system now _as there's no way we're doing that_! (bidding war).  I found the difference in attitude very interesting.  Not only were they not prepared to get into the b.w. nonsense but they had put an offer under the asking-price.  The E.A.s telephone response was described by the PL team as "fierce".


----------



## Guest107

Marie said:
			
		

> Not only were they not prepared to get into the b.w. nonsense but they had put an offer under the asking-price.  The E.A.s telephone response was described by the PL team as "fierce".



That EA will be a sweet strokeable amenable purring pussycat by this time next year  . That program was made during the 'top of the market'  this spring no doubt.


----------



## walk2dewater

Anecdotes aside, I reckon changes in inventory levels are the best indicator of where we are at.  Rem it remains a sellers market, i.e. sellers BELIEVE they can extract higher prices from buyers and buyers feel they have no power to ask for discounts.  Sellers actual ability to extract those higher prices is reflected in the inventory level—low or steady levels means buyers are caving in to sellers demands, rising levels means failure to extract higher prices.

Anecdotes from Estate Agents etc. suggest inventories are rising.  But I don't trust much of anything they say.  Where are the best inventory measures for Ireland?  Anyone know?


----------



## room305

Marie said:
			
		

> It was only at that stage I began to get estate agents' leaflets thrust through my door telling me my property was 'needed' as they had 'buyers waiting'.


 
I'm not doubting you for a second but I would be very interested in hearing any thoughts you might have on why REAs would get involved in such a counter-productive measure? If they are struggling to shift the unsold properties on their books why would they try and add to them?

The only roundabout explanation I can think of is they have a seller but his estimation of what the house is worth is well in excess of what potential buyers think it is worth. By bringing more properties onto the books (more competition for the seller) they may force a re-evaluation by the seller and finally shift it.


----------



## walk2dewater

room305 said:
			
		

> I'm not doubting you for a second but I would be very interested in hearing any thoughts you might have on why REAs would get involved in such a counter-productive measure? If they are struggling to shift the unsold properties on their books why would they try and add to them?
> .


They're not.  They want you to buy something so they can eat.


----------



## Guest107

walk2dewater said:
			
		

> Anecdotes from Estate Agents etc. suggest inventories are rising.  But I don't trust much of anything they say.  Where are the best inventory measures for Ireland?  Anyone know?


My occasional DAFT series tells the same.

The count is 14433 now. It was 14089 on friday last  .

The inventory of unsold property on DAFT has risen by 344 or *2.5% in under 5 days* 

I predict that the number of properties for sale will reach 15000 by next monday around the close of business.


----------



## room305

walk2dewater said:
			
		

> They're not.  They want you to buy something so they can eat.



So it's a reverse psychology play? Crafty REAs. They were hoping that when I came home yesterday I saw the card on my mat and thought:

"Record prices, buyers queuing up around the block to purchase ... no way am I selling my house. In fact, I am going to buy another house!"

Makes sense. Although given the area in which I live I wouldn't imagine it's overburdened with property speculators. That said, it probably wouldn't completely surprise me either ... this is Ireland after all.


----------



## walk2dewater

room305 said:
			
		

> So it's a reverse psychology play? Crafty REAs. They were hoping that when I came home yesterday I saw the card on my mat and thought:
> 
> "Record prices, buyers queuing up around the block to purchase ... no way am I selling my house. In fact, I am going to buy another house!"
> 
> Makes sense. Although given the area in which I live I wouldn't imagine it's overburdened with property speculators. That said, it probably wouldn't completely surprise me either ... this is Ireland after all.


 
Car dealers do similar things when they can't shift inventory.  ANYTHING to get punters in the door.


----------



## ninsaga

room305 said:
			
		

> So it's a reverse psychology play? Crafty REAs. They were hoping that when I came home yesterday I saw the card on my mat and thought:
> 
> "Record prices, buyers queuing up around the block to purchase ... no way am I selling my house. In fact, I am going to buy another house!"
> 
> Makes sense. Although given the area in which I live I wouldn't imagine it's overburdened with property speculators. That said, it probably wouldn't completely surprise me either ... this is Ireland after all.



...couldn' disagree more on the logic you apply.... have had those flyers coming in the door from various EA's from time to time over the last 3 yrs


----------



## redo

room305 said:
			
		

> I'm not doubting you for a second but I would be very interested in hearing any thoughts you might have on why REAs would get involved in such a counter-productive measure? If they are struggling to shift the unsold properties on their books why would they try and add to them?
> 
> The only roundabout explanation I can think of is they have a seller but his estimation of what the house is worth is well in excess of what potential buyers think it is worth. By bringing more properties onto the books (more competition for the seller) they may force a re-evaluation by the seller and finally shift it.


 When you do get fliers through the door, it is ususally down to one thing.  A house in the development (similar to the one receiving the mailshot) sold with a couple of bidders engaged in a bidding war.  Perhaps these unsucessful bidders have asked the agent to keep them informed about other properties in the same development.  Hence, the targetted spam.  I doubt that every house in the area got one.


----------



## Persius

2Pack, surely you're not really suggesting that five days' worth of figures from Daft is really an indication of anything?  It could even be that EAs are so busy selling houses that they don't have time to take down the sold stock when they put up the new stock.

BTW saw one property 3/4 bed in SW Dublin last week. Fairly central and close to Luas, though house is very 80's looking inside and opposite corporation flats. Asking price was €420K and current bid it €390K. Dunno if the asking price was too high or what will happen with bidding in the next few weeks, but it is at least one indication that buyers are thinking about bidding under the asking price.


----------



## walk2dewater

The BIG question... are inventories rising or not?  Is time to sell increasing or not?  Personally, I can't make my mind up about the market until I see data on this.  Daft is an OK approximation, but a couple of days does not make a trend.


----------



## Howitzer

Persius said:
			
		

> BTW saw one property 3/4 bed in SW Dublin last week. Fairly central and close to Luas, though house is very 80's looking inside and opposite corporation flats. Asking price was €420K and current bid it €390K. Dunno if the asking price was too high or what will happen with bidding in the next few weeks, but it is at least one indication that buyers are thinking about bidding under the asking price.


 
Have heard from the horses mouth that this is the current strategy of EAs. Highest price in area is 381K, pitch at 420K with the expressed notion of dropping to 390K after 2 weeks. Hoping that someone will bite at a high price but at all times telling the vendor that 381K is the realistic target. Someone buys at 390K thinking they've got a bargain and everyone's happy. Next sale.

The problem is that at the moment people are biting at whatever price the property is pitched at. Game Theory describes this scenario quite well with what's known as the Winners Curse.


----------



## redo

walk2dewater said:
			
		

> The BIG question... are inventories rising or not?  Is time to sell increasing or not?  Personally, I can't make my mind up about the market until I see data on this.  Daft is an OK approximation, but a couple of days does not make a trend.


The problem with most data is that is comes from the previous 3 months.


----------



## Guest107

walk2dewater said:
			
		

> T  Daft is an OK approximation, but a couple of days does not make a trend.


Leave me with it my dear fellow 

A couple of  months to end september. THATS a trend.


----------



## Raskolnikov

I'm listening to a lady on the phone to one of her mates at work here (strange how she always seems to be on the phone to friends). She's just after giving a rundown of her recent purchase of a third house. Her reason for purchase was that she just wouldn't feel safe investing her money in anything else.


----------



## whizzbang

2Pack said:
			
		

> Leave me with it my dear fellow
> 
> A couple of  months to end september. THATS a trend.


I'm doing a daft record of all houses for sale in the country and by county if this is what you are doing? I plan to graph it dynamically too  but only if I get bored enough 

edit: daft not dail! Freudian slip!


----------



## whizzbang

Raskolnikov said:
			
		

> I'm listening to a lady on the phone to one of her mates at work here (strange how she always seems to be on the phone to friends). She's just after giving a rundown of her recent purchase of a third house. Her reason for purchase was that she just wouldn't feel safe investing her money in anything else.



"Safe as houses"


----------



## walk2dewater

whizzbang said:
			
		

> I'm doing a dail record of all houses for sale in the country and by county if this is what you are doing? I plan to graph it dynamically too  but only if I get bored enough


 
Perhaps Duplex can post the results on his blog?  Like I said above, rising inventory is the classic tell-tale sign of when a sellers market is starting to top out.


----------



## daveirl

whizzbang said:
			
		

> I'm doing a dail record of all houses for sale in the country and by county if this is what you are doing? I plan to graph it dynamically too  but only if I get bored enough


 I'm just doing the country! Been doing it since Friday.  
	
	




		Code:
	

 Date        Properties To Buy    Properties To Let 
07 July        14,097            5,067 
08 July        -            - 
09 July        -            - 
10 July        14,122            4,938 
11 July        14,281            4,968 
12 July        14,445            5,036


----------



## Guest107

whizzbang said:
			
		

> I'm doing a dail record of all houses for sale in the country and by county if this is what you are doing? I plan to graph it dynamically too  but only if I get bored enough


Oh grand  , I only ever quote the national figure but ye know that  anyway ....and who started doing this DAFT Effect may I enquire ? 

If yiz are on holidays I can always 'capture' the data for you .

_If_ I was doing a county survey I would stick to 

Westmeath/Laois/Carlow/Wexford/Cavan/Louth (Band 1)

Kildare/Meath/Wicklow (Band2)

and Dublin (all) . 

My contention , my 2 band theory is that the Band 1 prices and supply will soon show a _CONSIDERABLE_ divergence with the same metrics in Band 2 and also with the same metrics in  Dublin  itself.

Smaller  towns such as Galway do not really overspill that much out of the county (same with Cork) so the data is inconclusive. If there were a Band 1 in Galway it would be the likes of Gort vis a vis Galway City  ...eg around 20 miles out not 40-70 as with Dublin. Band 1 in Cork would be Fermoy and Mallow at 25miles.


----------



## ivuernis

Just noticed this [broken link removed] on Daft, says the average house price in Ireland is now €365k whereas the recent ESRI report http://www.finfacts.com/biz10/irelandhouseprices.htm has the average house price at just under €300k. 

Even though the Daft report is from May I don't recall seeing it mentioned here previously, maybe I missed it. Why the huge difference between the Daft average and the ESRI average? What are Daft playing at? Am I missing something?


----------



## whizzbang

2Pack said:
			
		

> Oh grand (not by county , I only ever quote the national figure but ye know that  anyway ....and who started doing this DAFT Effect may I enquire ?
> 
> If yizare on holidays I can always 'capture' the data for you .



Thanks! but I have it automated, i intend to forget about it for a few months and take a look again in September! Once it is automated I can just nab all the counties everyday no bother.

I did get the idea after seeing your monitoring of the situation last Friday


----------



## redo

It will be interesting to watch how the developers react this coming selling season. The developers will not want to percipitate a downward trend by reducing prices, instead they will offer cash back deals, increasing allowances etc.  What we also may witness is purchasers playing hardball by daring to haggle!


----------



## whizzbang

ivuernis said:
			
		

> Just noticed this [broken link removed] on Daft, says the average house price in Ireland is now €365k whereas the recent ESRI report http://www.finfacts.com/biz10/irelandhouseprices.htm has the average house price at just under €300k.
> 
> Even though the Daft report is from May I don't recall seeing it mentioned here previously, maybe I missed it. Why the huge difference between the Daft average and the ESRI average? What are Daft playing at? Am I missing something?



Daft probably is for whole country while I think ESRI splits Dublin and non-Dublin. so 300k is the average non Dublin price


----------



## ivuernis

whizzbang said:
			
		

> Daft probably is for whole country while I think ESRI splits Dublin and non-Dublin. so 300k is the average non Dublin price


 
Don't think so, quote from the ESRI report: "The average price paid for a house *nationally* in May of this year was €296,361, up €18,500 on that recorded for December 2005 (€277,852)."


----------



## whizzbang

ivuernis said:
			
		

> Don't think so, quote from the ESRI report: "The average price paid for a house *nationally* in May of this year was €296,361, up €18,500 on that recorded for December 2005 (€277,852)."



ah,  i sit corrected


----------



## Guest107

daveirl said:
			
		

> Been doing it since Friday.



how are you filtr ing  it out ????

PM me if you wish .


----------



## ivuernis

whizzbang said:
			
		

> ah, i sit corrected


 
An ideas as to the discrepancy between the 2 figure then? It's pretty big! How can the Daft figure be so wildly out of sync with the ESRI figure?


----------



## redo

ivuernis said:
			
		

> An ideas as to the discrepancy between the 2 figure then? It's pretty big! How can the Daft figure be so wildly out of sync with the ESRI figure?


Their basket of houses may be different.


----------



## ivuernis

redo said:
			
		

> Their basket of houses may be different.


Substantially different!


----------



## Persius

Howitzer said:
			
		

> Have heard from the horses mouth that this is the current strategy of EAs. Highest price in area is 381K, pitch at 420K with the expressed notion of dropping to 390K after 2 weeks. Hoping that someone will bite at a high price but at all times telling the vendor that 381K is the realistic target. Someone buys at 390K thinking they've got a bargain and everyone's happy. Next sale....


 
Now that is interesting. I was involved in a bidding war on a 3 bed end of terrace house in the Coombe area last May. The original asking price was €395K and it ultimatly went for €457K AFAIK. 

The other day the EA got back on to me. Said she was contacting all the underbidders for that house as she had another property in the same area. Now this property is only a two bed and it is mid terrace (I reckon end of terrace increases value). She told me the asking price for this was €420K. 

I was thinking straight away that this is too expensive and the vendors got greedy. I plan to check out the house but was certainly not planning on bidding at that price. If the 3 bed EOT is worth 457K, then I would have thought a two bed mid-t is worth under 400K. But it does sound like this EA is following the strategy you mention. Maybe it's only worth 381K


----------



## jpd

With regard to the statistics from the Daft.ie site, one of the factors to take into account is whether the number of houses being advertised on Daft.ie is rising or falling as a % of the total number of houses for sale - if the total number of houses for sale is staying constant but more and more are advertised through Daft.ie, it will look like the number of houses available is increasing although this is not so.


----------



## Guest107

offer €360k , fully approved and no chain , see if the EA 'nibbles '


----------



## Duplex

Its time that Bertie started dishing out Prozac to the lads up at The Central Bank.  They’ve only gone and issued another warning about the housing market.  What is it with these doom mongers?

‘risk of a sharp correction’

‘unbalanced nature of growth’, 

‘prices could be overvalued’  

I ask ya.  

[broken link removed]


----------



## Remix

Re: central bank report:

Details in full technicolour compliments of the finfacts team:

http://www.finfacts.com/irelandbusinessnews/publish/article_10006547.shtml


----------



## bearishbull

Remix said:
			
		

> Re: central bank report:
> 
> Details in full technicolour compliments of the finfacts team:
> 
> http://www.finfacts.com/irelandbusinessnews/publish/article_10006547.shtml


"there may be trouble ahead!"


----------



## Remix

Duplex said:
			
		

> .
> .
> What is it with these doom mongers?


 
And it shouldn't go unnoticed that the ECB Economic and Monetary Affairs Commissioner, Joachim Almunia, appears to be joining the Doom'n'Gloomers in his outlook for Ireland.

http://www.unison.ie/business/stories.php3?ca=80&si=1650178



> Mr Almunia said that Ireland was "developing pro-cyclical policies that could create problems in the future".


 
For "pro-cyclical" insert your favourite crash term, e.g "Boom'N'Bust", "unsustainable bubble" etc.


----------



## ninsaga

daveirl said:
			
		

> I'm just doing the country! Been doing it since Friday.
> 
> 
> 
> 
> 
> 
> Code:
> 
> 
> Date        Properties To Buy    Properties To Let
> 07 July        14,097            5,067
> 08 July        -            -
> 09 July        -            -
> 10 July        14,122            4,938
> 11 July        14,281            4,968
> 12 July        14,445            5,036



Has this been seasonaly adjusted...given that (my understanding) is that summer is not the best time to try and sell... so the expectation anyway is that more will come on the market as time passes..

ninsaga


----------



## gearoidmm

DAFT figures are substantially different as they just lump all houses into the index regardless of type.  TSB/ESRI adjust the average according to the mix of properties bought.  Second, DAFT provide asking prices which may not reflect sale prices. Third, there is a significant time-lag in the ESRI data as it comes from mortgage drawdowns and there might be up to a 3-4 month delay in the figures.  Finally, as the daft figures are taken directly from the website, they might include groups of houses sold as one or if there are errors on the site (house listed at price of 1,000,000 where it should be 100,000 - common problem on rightmove in the UK), this might drive up the average


----------



## ninsaga

So given those potential issues, then what value is there in presenting potentially flawed data.

If you are dependant on correct data to make decisions in you job wouldn't you want to wnsure that it is not flawed to any degree? 

This is tabloid type data.

ninsaga


----------



## Guest107

ninsaga said:
			
		

> So given those potential issues, then what value is there in presenting potentially flawed data.
> 
> If you are dependant on correct data to make decisions in you job wouldn't you want to wnsure that it is not flawed to any degree?


Its not flawed in this sense. Every day there are more properties for sale than the previous day . But you can explain. 



> This is tabloid type data.


Tis not. 

Tis the poor mans _Irish Market Base Activity Index _and it is not reliant on PROPERTY ECONOMISTS to interpret it for us or on lazy moth eaten  crappy so called journalists who will publish the PROPERTY ECONOMISTS press releases in their newspapers without putting a brain between the release and the publication.

Basically its pure and bang up to date uninterpreted and is entirely yours with which to do as you wish.

Please stop shooting the messengers


----------



## SteelBlue05

For the figures to be of any real significance you would have to account for Dafts general growth in becoming a popular place for selling properities. Is it taking market share from other selling agents\websites? 

So if the figures increase by x% over a week then how much of that increase is down to people using Daft instead of another website etc.


----------



## Guest107

SteelBlue05 said:
			
		

> So if the figures increase by x% over a week then how much of that increase is down to people using Daft instead of another website etc.



I explained the significance of Daft (rather than Myhome) , had you looked at all . Its here

http://www.askaboutmoney.com/showpost.php?p=238386&postcount=92

and furthermore here

http://www.askaboutmoney.com/showpost.php?p=238506&postcount=121

and is called_ 2Packs DAFT EFFECT _

_If  the number of properties sold privately on DAFT  starts to rise while the number of properties sold by EAs  on Daft do not rise commensurately then we most assuredly have a slump on. _


----------



## SteelBlue05

2Pack said:
			
		

> _If the number of properties sold privately on DAFT starts to rise while the number of properties sold by EAs on Daft do not rise commensurately then we most assuredly have a slump on. _


 
But how do you account for private sellers and estate agents now changing to Daft from other means of selling (www.propertypartners.ie, www.realestate.ie, www.4salebyowner.ie etc, even agents who now decied to use Daft versus just their own websites).

Daft has become a lot more popular recently for selling, so how do you know an increase in figures is not down to this rise in popularity versus a "slump" as you call it.


----------



## bearishbull

2Pack said:
			
		

> I explained the significance of Daft (rather than Myhome) , had you looked at all . Its here
> 
> http://www.askaboutmoney.com/showpost.php?p=238386&postcount=92
> 
> and furthermore here
> 
> http://www.askaboutmoney.com/showpost.php?p=238506&postcount=121
> 
> and is called_ 2Packs DAFT EFFECT _
> 
> _If the number of properties sold privately on DAFT starts to rise while the number of properties sold by EAs on Daft do not rise commensurately then we most assuredly have a slump on. _


its daft to read too much into the numbers on daft,the data means nothing in context your providing. lets hear no more of the numbers on daft.waiting for good data/statistics from esri/permanent tsb is only price movement guide i'll accept as there no easy reliable way of gauging all inventory in irish market unlike in other countries.


----------



## Guest107

SteelBlue05 said:
			
		

> But how do you account for private sellers and estate agents now changing to Daft from other means of selling (www.propertypartners.ie, www.realestate.ie, www.4salebyowner.ie etc, even agents who now decied to use Daft versus just their own websites).





From my second link. !!!







> Sherryfitz _CONTROL _the entry of properties onto their website .
> 
> MyHome deals with EAs too. The EAs _CONTROL_ the entries onto myhome, not the public.
> 
> DAFT allows _ANYBODY_ to sell A_NYTIME _and is a realistic simulation of what is FOR SALE and not of what do the EAs think the market will bear....with the rest stacked up waiting their turn on the sales ladder !


same with propertypartners, EAs enter the data on that . 

as for realestate.ie , did you not look at all 



> [SIZE=-2]Advertise With Us[/SIZE] *www.realestate.ie                      is the official portal of The IAVI (Irish Auctioneers &                      Valuers Institute)*
> [SIZE=-2]IAVI is the leading property body in Ireland and is the premier                      organisation for qualified property practitioners. auctioneers,                      estate agents, valuers and other property professionals, in                      Ireland. It is the only truly 32 county property body. [/SIZE]





			
				SteelBlue05 said:
			
		

> Daft has become a lot more popular recently for selling, so how do you know an increase in figures is not down to this rise in popularity versus a "slump" as you call it.


ease of entry into market !


----------



## SteelBlue05

2Pack said:
			
		

> From my second link. !!!
> !


 
Your second link doesn't explain this at all. Pointless figures, needs to account for more issues than you can see. Market Research is a measurement and there is an scientific approach to market research that you have totally missed.


----------



## ninsaga

SteelBlue05 said:
			
		

> For the figures to be of any real significance you would have to account for Dafts general growth in becoming a popular place for selling properities. Is it taking market share from other selling agents\websites?
> 
> So if the figures increase by x% over a week then how much of that increase is down to people using Daft instead of another website etc.



That's a very valuable point.... more & more people are aware of daft.ie.... jeez I remember looking at in before & it looked like a real amaturish set up.

So as it has become more successful then more individuals as well as EA's are using it...it's the simple law of selling.... place the product where people are going to look.

So I again think that your representation there 2Pack is fundamentaly flawed. It even reeks of sensationalist journalism.....

ninsaga


----------



## Guest107

ninsaga said:
			
		

> That's a very valuable point.... more & more people are aware of daft.ie.... jeez I remember looking at in before & it looked like a real amaturish set up.


I am standing over my _Daft Effect _until some 'scientist'  empirically proves it wrong. 

Off with ye


----------



## daveirl

I know all about how 5 days data is a crap base to have for the numbers of houses being sold but I don't have a time machine so I can't get the older data! All I can do is keep recording it from now.  If anyone has historical data points I'd put them!


----------



## ninsaga

Hold on.... if more & more people & EA's use daft.ie are their tool for selling than accoding to your logic, then you will always be right..... so your logic is wrong.....

what if I created a new web site called sellyourhomeprettyfast.ie & I market it correctly then logically there will be an increased throughput... the owners of daft want to get as much up there so that 'they' can get paid also.

Actually now that I think of it, the 'real' data that you need to colect is what are the number of investment properties that are coming on the market. Don't even think tthat can be easily gathered. Most people move house, upgrade etc 2-3 times in a lifetime - I've done it myself. Look around you & I bet you will find half a dozen people you know very quickly who have done that...friends, relatives, co-workers, neighbours & just because people in that catagory have their houses up for sale does not mean that there is a general offload going on and that the market is gonna crash - which is what I think you are trying to convey here.


ninsaga


----------



## Guest107

SteelBlue05 said:
			
		

> But how do you account for private sellers and estate agents now changing to Daft from other means of selling  <.snip> www.4salebyowner.ie etc,



4sale by owner has 25 properties in total and in Mayo , daft has 14470 .



			
				SteelBlue05 said:
			
		

> Pointless figures, needs to account for more issues than you can see. Market Research is a measurement and there is an scientific approach to market research that you have totally missed.



 Pointless figures indeed my friend. 25 vs 14470 .

Why did you mention realestate.ie the iavi selling cartels home site? . Do tell.


----------



## Duplex

daveirl said:
			
		

> I know all about how 5 days data is a crap base to have for the numbers of houses being sold but I don't have a time machine so I can't get the older data! All I can do is keep recording it from now.  If anyone has historical data points I'd put them!



Of course Daft is not an ideal source of inventory data. But there is nothing else, nothing.  So nit picking about this one source available to to the public is facile.


----------



## SidTheDweeb

Duplex said:
			
		

> Of course Daft is not an ideal source of inventory data. But there is nothing else, nothing.  So nit picking about this one source available to to the public is facile.



I personally think these daft 'stats' should be discussed in another thread, if at all. If you can't see that they might be redundant it devalues any other arguments you put forward 
No offense here (and Im definitely bearish about irish property) but there are many factors that would show an inventory increase on daft. Increased popularity being the main one, and in general increased proportion of properties being advertised online and not just EA websites, paper publications and shops.


----------



## SteelBlue05

2Pack said:
			
		

> 4sale by owner has 25 properties in total and in Mayo , daft has 14470 .
> 
> Pointless figures indeed my friend. 25 vs 14470 .
> 
> Why did you mention realestate.ie the iavi selling cartels home site? . Do tell.


 
Ok, the figures are "fun" to read, I am just pointing out to people that they are far from reliable.


----------



## ivuernis

Daft's average natioanl house price (€365k) was WAY OUT from the actual national average of €300k (ESRI) so I wouldn't be relying on them for any indication of where the market may be headed.


----------



## ubiquitous

I think it is time to put this thread out of its misery. There may be some purpose to endless rehashing of homespun economic theories and faintly comical statistical extrapolations but enough is enough imho.


----------



## Howitzer

Worst thread ever.


----------



## purplealien

ubiquitous said:
			
		

> I think it is time to put this thread out of its misery. There may be some purpose to endless rehashing of homespun economic theories and faintly comical statistical extrapolations but enough is enough imho.


 
About time someone said it.


----------



## ninsaga

ubiquitous said:
			
		

> I think it is time to put this thread out of its misery. There may be some purpose to endless rehashing of homespun economic theories and faintly comical statistical extrapolations but enough is enough imho.



Agreed & Thank you


----------



## Guest107

There are  14478 reasons to shut it down right now


----------



## ninsaga

2Pack said:
			
		

> There are  14478 reasons to shut it down right now



..... getting more and more farcical by the minute......


----------



## SteelBlue05

2Pack said:
			
		

> There are 14478 reasons to shut it down right now


 
Well there is one anyways


----------



## redo

2Pack said:
			
		

> There are 14478 reasons to shut it down right now


Perhaps start a thread in letting off steam whereby people who want to track the daft listings can do so.  Let keep this one on topic.


----------



## Guest107

Righty ho


Bertie and Noel Ahern have all sounded defensive in the past week about their actions to cool the market (and Brian Cowan today in repsonse to the EU Commission) . I thought markets were markets and sacrosanct. 

What key piece of info do they have apart from the Noel Ahern figure in yesterdays times that *FTBs*  borrowed *€3Bn* in the first 6 months of 2005 and then they borrowed (a new lot of FTBs of course) *€8Bn* in the first 6 months of 2006.

The government equally has figures on Investor activity (from stamp duty returns ) but has not shared this data with us.


----------



## soma

Let's try to keep this OT.

Anyways, An interesting (and for a property supplement article surprisingly bear-ish) relevant article in today's Irish Times Property Supplement: (not available via link w/o subscription).

>>> Irish Times >>>
Buyers beware . . . again

Predictions of crashes give buyers jitters, writes Edel Morgan

These are confusing times for anyone planning to buy or sell property in Ireland. While some estate agents are reporting the first signs of a soft landing, others claim there is still a bullish appetite for residential property in this country and the current slow-down is largely related to seasonal factors.

Meanwhile the most vulnerable sector of the market, first-time buyers, are being left in a quandary as to whether to buy now or take a "wait and see" approach and risk prices rising again after the summer.

Last week I received an e-mail from a guy who said he had heeded warnings about the property market for some time and "now finally" has put a deposit on a house. He is getting cold feet because of "a lot of negativity" from people around him, which is making him "seriously doubt whether I should buy at this particular time.

" I'm also afraid to lose the house and not go for it because I know it will be snapped up as soon as I do. The house, as with most houses today, is for crazy money but... location, location, location. It's perfect! I am, and have been, aware of the downturn in the US which could in turn create a domino effect in Europe but buyers have been living in constant fear of a pending crash for at least 10 years as far as I can see and it hasn't happened... yet!

"What do you think?" he wrote, "I could do with a little positivity (is it really that bad?). I would appreciate your advice or any help you can offer."

Reading between the lines I could tell he wanted someone, anyone, to tell him he was doing the right thing. Unfortunately, in the absence of any psychic powers - that I'm aware of - I couldn't assure him that there are no risks involved.

There is a theory, however, that given its population, Dublin and, in particular what are regarded as "well located" areas in Dublin, will be less affected by a downturn in the market.

The reader seems to regard the house as ideal for him, which is just as well, as anyone taking the risk of buying a property in an uncertain market should be prepared to live in it long term. While most Irish economists are predicting a soft landing, if a negative equity situation occurs, he will have to hold on to the property until the market emerges from the crisis.

It's also crucial to consider affordability should interest rates rise significantly. I told him that certain economists and most estate agents (surprise, surprise) are predicting continued growth for the rest of this year at least, albeit at a slower pace, on the back of continuing demand and SSIA windfalls.

His dilemma is common. I know of a family who have been renting for years and which has been put off buying in the past by doom-laden predictions. They recently saw a reasonably priced property advertised in their preferred area in north county Dublin but are now hesitant following this week's bombshell.

While some agents insist that confidence in the market is still riding high, Alan Cooke of the IAVI has said it appears that a soft landing is imminent but won't happen across the market in one fell swoop or in all locations simultaneously.

It does seem that properties aimed at first-time buyers and middle-price brackets have experienced some sluggishness: neither group is affluent enough to take bets on a risky market prone to rising interest rates.

A house a few doors away from mine in Beaumont - where properties were being snapped up at an unrealistic €500,000-€600,000 until March/April: a phenomenal rise of €100,000-€150,000 on the previous summer - has being languishing on the market since early May and has now had its price reduced from €525,000 to €495,000.

A friend who is selling his three-bed semi in Whitehall, Dublin 9, for a price that would have been considered the going rate until early this year, has been told by his estate agent that he should consider revising the price downwards.

According to some reports the new homes market has taken a hit as some first-time buyers wait to see if prices fall and if developers offer better deals to offload properties. The last time this happened was post 9/11 in 2001 where appliances and furniture packages were being included as sweeteners.

The upper end of the market seems to be less sensitive to interest rate rises. However, last week Property reported the details of two expensive properties being sold by Lisney with reduced asking prices, which may reflect the time of year: a five-bed house in Dalkey with a 90ft back garden went from €1.85 to € 1.7 million and a five-bed house in Foxrock Manor from €2 million to €1.9 million. In the same week a house at number 8 Gilford Park in Sandymount, Dublin 4, sold for nearly a €1 million over its guide price of €1.5 million. I also know of a lady who sold her period house on the North Circular Road, Dublin 7, at auction for well in excess of the guide price in early May and recently won a bidding war for a 1930s redbrick property she bought for over €900,000.

But if trader-uppers continue to have difficulty selling their properties, it might be only a matter of time before this sector of the market is also affected.

© The Irish Times


----------



## redo

From last weeks edition.


----------



## soma

PS Seeing as I brought up the IT Property supplement. If any joe publics have been keeping an eye on the "worth the investment" series of articles that they run (including todays), they will have observed a noticeable pattern in the 'advice' given. The conclusion for the majority of properties in the past 6 weeks or so has been that the gap b/t rental income and repayments would make the property a questionable 'investment'.

Now this gap b/t rental and mortgage payments have existed for several years - but it's interesting that it's finally being directly pointed out.


----------



## soma

redo said:
			
		

> From last weeks edition.



Oops you appear to be right. Well not my fault as this is what's on the IT website today as the most recent (thursday is res property supp day).


----------



## shnaek

Here is an interesting article by David Mc Williams on the Bank of Ireland study earlier in the week which claimed that we are the second richest nation in the world:

[broken link removed]

It is certainly food for thought. The goverments inclination to avoid acting responsibly is a source of constant amazement to me. If we allow vested interests to continue to make unchallenged statements then we are certainly in for a 'correction' - and let's hope it's not a Japanese-style 20-year-plus correction.


----------



## Guest107

shnaek said:
			
		

> It is certainly food for thought.


The Japs dithered for years after the top of their boom. We are as well off to take the hit as quickly as we can, 3 years max. The adjustment to reality should be fast and then we will get over it.

The commensurate shock to the property market in Kusadasi, Bulgaria, Krakow, Budapest , Prague, Outer Mongolia Cyprus and Faro will be equally sharp and equally quick.

Many International property markest are bubbleicious thanks to this ludicrous  Irish wealth effect . Personally I would not touch Bulgaria or Eddie Hobbs' favourite...the Cape Verde Islands, with a 900 foot pole.


----------



## Persius

This weeks Irish Times property supplement is only 16 pages, and Edel Morgan's column is missing. I guess the smaller supplement if for the quiet summer season.

However, on page 6 of today's IT property supplement. There's a light hearted piece in the "Around the Block" section about builders heading off for their holidays. But is this a slight mood change for such pieces?

"The developers have every reason to splash out this summer, after one of the busiest six month periods in living memory. New house sales have been frentic, with a touch of concern that the good times may be coming to an end."

and

"With over €1 billion in site sales so far this year, the traditional housebuilder list out time and time again to investor groups who believe they can cash in on the high profit margins in the new home market. These new style raiders are in many cases advised by stockbrokers and bankser, rather than estate agents, and let's hope they get it right."

Don't have link. Got this from the printed version.

Soma, I've also been following the "worth the investment" section since my return to Ireland in March. I couldn't believe that they were saying the featured properties were definetly worth the investment during March and April, as the potential rent only barely covered an interest only morgage (no mention of charges etc). However I too have noticed much more cautious conclusions over the last 6 to 8 weeks.


----------



## Remix

Re: Edel Morgan article.

Worth making the distinction in that in the examples she gives (Beaumont and Whitehall) she is not just taking about reductions in unrealistic asking prices.

She is giving examples of how prices have fallen from levels that were the _*going*_ rate - i.e. real house price falls.

Well welly well, and they said it couldn't happen here.


----------



## Persius

One of the main stories in the business section of today's IT is headed
"Central bank issues fresh house price warning"
This is based on the central bank report issued yesterday where they see a gap between the actual house prices and "the prices warranted by fundamentals".

In a separate story, Jim Power, chief economist with Friends First predicts an ECB rate of 4.25% in 18 months. 
Yikes, if that turns out to be true, we'll be looking at morgage rates of 5.5%.


----------



## walk2dewater

Persius said:
			
		

> One of the main stories in the business section of today's IT is headed
> "Central bank issues fresh house price warning"
> This is based on the central bank report issued yesterday where they see a gap between the actual house prices and "the prices warranted by fundamentals".
> 
> In a separate story, Jim Power, chief economist with Friends First predicts an ECB rate of 4.25% in 18 months.
> Yikes, if that turns out to be true, we'll be looking at morgage rates of 5.5%.


 
Jim knows it'll be more like 4.25% before 12mth are up. But of course he can't say that. Instead, like all other economists have done for last 1-2yrs, he'll constantly revised upwards his estimates. Irish economists ECB rate official forecasts have got to have the poorest track record... no one seems to (wants to?) point this out

This time next year when ECB is at 4.5% and still talking _increasingly_ hawkish, it'll be "we see rates levelling out at 5.5% in 12mths"... etc etc... 

Large debtors need to do some thinking for themselves...


----------



## ivuernis

Persius said:
			
		

> In a separate story, Jim Power, chief economist with Friends First predicts an ECB rate of 4.25% in 18 months.
> Yikes, if that turns out to be true, we'll be looking at morgage rates of 5.5%.


 
Wouldn't be surprised if it was nearer 5% (base rate) in 18 months. W2DW thinks we'll be on our way to 8% by then remember. Rates are definitely rising faster than people expected. Looks like it could be a least 3.5% by the end of 2006 when at the start of 2006 a rate of 3.5% was being predicted for mid-2007.


----------



## Duplex

The market seems to be in the process of absorbing new information on the likely prospects for price growth over the next few years.  It appears that a consensus is developing that price growth will be a much less in the coming years than we have witnessed previously.   Banks and agents are anticipating that prices will now appreciate in line with incomes, a soft landing.  However is this what the market wants? Does the market want low single digit price growth?  Would investors be happy to accept historically low yields, yields below self financing levels? Without the compensation of capital growth?.  Will first time buyers be in such a hurry to buy, if they see that prices are static relative to their incomes?  

If prices are static will new buyers be able to tap notional equity growth in the value of their property to finance lifestyle and/or further property purchases? What will happen to the building industry when the demand for new houses wanes? Will Eastern Europeans find employment outside the building sector if a slowdown causes layoffs?  Will they decamp and return home or move on to the next boom nation?  

Can a soft landing ( a state of effective stasis) be possible after a speculative bubble in asset prices where the supply of that asset is plentiful?  Where the cost of buying the asset increases, when the values does not?


----------



## walk2dewater

Duplex said:
			
		

> The market seems to be in the process of absorbing new information on the likely prospects for price growth over the next few years. It appears that a consensus is developing that price growth will be a much less in the coming years than we have witnessed previously. Banks and agents are anticipating that prices will now appreciate in line with incomes, a soft landing. However is this what the market wants? Does the market want low single digit price growth? Would investors be happy to accept historically low yields, yields below self financing levels? Without the compensation of capital growth?. Will first time buyers be in such a hurry to buy, if they see that prices are static relative to their incomes?
> 
> If prices are static will new buyers be able to tap notional equity growth in the value of their property to finance lifestyle and/or further property purchases? What will happen to the building industry when the demand for new houses wanes? Will Eastern Europeans find employment outside the building sector if a slowdown causes layoffs? Will they decamp and return home or move on to the next boom nation?
> 
> Can a soft landing ( a state of effective stasis) be possible after a speculative bubble in asset prices where the supply of that asset is plentiful? Where the cost of buying the asset increases, when the values does not?


 
With or without higher rates the SL is an impossibility.  With higher rates the tipping point into a true buyers market just will come quicker.  There will be financial carnage for many.


----------



## ivuernis

Trichet urges close attention to oil prices
[broken link removed]

_"The *phenomenon* we are observing is very important and we have to understand it. One of our provisional conclusions is that we are in some kind of *supply shock* but also very much a *demand shock* with the emergence of new giants,"_ Trichet said.

Get ready for Peak Oil people.


----------



## redo

walk2dewater said:
			
		

> With or without higher rates the SL is an impossibility.  With higher rates the tipping point into a true buyers market just will come quicker.  There will be financial carnage for many.


 I somewhat agree with you.  A soft landing would imply a gradual reduction in demand or an increase in supply.  With around 40% of newbuilds bought from investors and including the amount of stock already held by speculators, one can only expect an explosion in supply when prices flatline.


----------



## lff12

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.


 
I know of tax-dodging landlords who just don't claim the tax relief in the hope that the tax man won't take an interest.  I'd estimate that about 60% of landlords are not registered - and I would guess it is mostly for tax reasons.  There is a huge discrepancy between paying 42% on an income of 1000 a month and paying nothing on say 750 a month.  The irony of this is that as a private tenant you can get a nicely discounted rent from a tax-dodger landlord, but those who disobey the law on tax generally don't give a fig about minimum standards etc, but once you cop on they aren't declaring it, it is a good way to get things done, hold them to ransom, etc.

The main problem with this (aside from the lost tax revenue which must be enormous) is that it pushes rent-allowance tenants into the 40% of the market that is tax-declaring and as those who pay tax are making smaller profits they are less likely to have the spare cash to pay for maintenance and repairs etc.  (Of course it could be argued that people who are too mean to pay tax are also too mean to maintain the property, but I'm sorry to say that in my experience the shabbiest of properties I have let were all by tax-abiders, while the nice ones were let by the tax-dodgers).  It also makes a lot of official stats on the size of the rented sector less meaningful.


----------



## bearishbull

*Seems even one of americans biggest and most respected newspapers doubt sthe sustainability of the house market.*
*But the estate agents are furiously spinning* 
[broken link removed]
_Paul Murgatroyd, DNG economist, said: "We do seem to be moving into a period of soft landing. The downturn, *everything will be fine* scenario we have been hearing about, it looks like it is coming to fruition._
_"We are moving into a soft landing and stabilising of house price growth, but certainly there is no crash or big dip._
_"The balances of power are shifting back to the buyer from the vendor slightly but the downside is that there is the double-edged sword of raising increased sums to fund the buying and paying back loans."_
_Mr Murgatroyd also *warned *that first time buyers sat on their hands in 2001 expecting prices to keep on falling but in the first quarter of 2002 prices saw a 6.5% rise, making up all the ground that was lost in the previous year. _*BASICALLY BUY NOW OR PRICES WILL RISE MUCH MORE IN NEXT YEAR !!!!! BUT HIS BUDDY THE CHIEF EXECUTIVE SAYS;*

_Keith Lowe, chief executive of Douglas Newman Good, said: "Looking at the remainder of the year, if interest rates continue to rise steadily, it is difficult to see house price inflation running at anything other than a very small amount as demand is pegged back by the higher cost of borrowing._

*BASICALLY HE SAYS PRICES CANT RISE BY MUCH MORE THAN A SMALL AMOUNT!*

*NOT SINGING FROM THE SAME HYMNSHEET LADS! MR MURGATROYD SEEMS TO BE GETTING WORRIED!*


----------



## Guest107

he is of course a PROPERTY ECONOMIST not a real economist.

soft means _hard_
upside means _do not buy_
sound fundamentals means _don't sell till I offload my pad first 
landing means crashing 
_


----------



## phoenix_n

I am about to sign a contract on a new build in the next 2 weeks. I am now thinking that i probably won't. Thats just me but if i am one person then there may be more.


----------



## redo

phoenix_n said:
			
		

> I am about to sign a contract on a new build in the next 2 weeks. I am now thinking that i probably won't. Thats just me but if i am one person then there may be more.


At least ask the developer for a nice discount.  If they decline, you can tell them to feck off (If that is your intended decision)


----------



## phoenix_n

redo said:
			
		

> At least ask the developer for a nice discount. If they decline, you can tell them to feck off (If that is your intended decision)


 
I thought the same. I might aswell give it a go.


----------



## Guest107

in a soggy market the first sign of discounting is when the allowances for kitchens and tiling and stuff go from a _generous €3k_ to a  _generous €15k_ , a HIDDEN discount of €12k but with no discount off list. 

start off by querying the allowances. Tel the developer you remember them being _*a lot higher*_ and if they won't budge then ask straight off for a discount


----------



## beattie

Just saw a housing launch advertised on RTE1, have never seen a specific development get this sort of promotion before but maybe I have just missed it.


----------



## sonar

Slightly off topic for a moment but something that might eventually have an impact on jobs and public sentiment:

Dell and Intel and are Ireland's largest exporters. But things are not too rosy for either at the moment:

Intel begins layoffs

Dell share price almost halved in one year


----------



## Borderlord

I am new to this site but have been collecting some information from Daft since Nov 2003 regarding rent and sales in Dublin ? Cork City. This was done on a weekly basis and here are my findings
In Dublin I took an overall view of what was for rent and then I focused on two areas, Lucan and Rathfarnham using set criteria of 3 bed semi D and a max Eur 1,300 pm. Below is a summary of some of my findings.  I hope this helps

To Let / Rent 19/11/2003
Dublin >> 3936 units
Cork >> 112 units 
Lucan >> 85 units 
Rathfarnham >> 16 units 
For Sales Dublin >> 358 units

To Let / Rent 08/04/2004
Dublin >> 4065 units
Cork >> 260 units 
Lucan >> 45 units 
Rathfarnham >> 9 units
For Sales Dublin >> 723 units

To Let / Rent 08/11/2004
Dublin >> 3258 units
Cork >> 212 units 
Lucan >> 72 units 
Rathfarnham >> 14 units
For Sales Dublin >> 1087 units

To Let / Rent 21/04/2005
Dublin >> 2912 units
Cork >> 228 units 
Lucan >> 40 units 
Rathfarnham >> 12 units
For Sales Dublin >> 918 units

To Let / Rent 22/11/2005
Dublin >> 2545 units
Cork >> 164 units 
Lucan >> 32 units 
Rathfarnham >> 4 units
For Sales Dublin >> 623 units

To Let / Rent 20/04/2006
Dublin >> 2522 units
Cork >> 215 units 
Lucan >> 24 units 
Rathfarnham >> 5 units
For Sales Dublin >> 817 units

To Let / Rent 05/07/2006
Dublin >> 2918 units
Cork >> 346 units 
Lucan >> 20 units 
Rathfarnham >> 2 units
For Sales Dublin >> 1637 units


----------



## SteelBlue05

Borderlord said:
			
		

> I am new to this site but have been collecting some information from Daft since Nov 2003 regarding rent and sales in Dublin ? Cork City. This was done on a weekly basis and here are my findings
> In Dublin I took an overall view of what was for rent and then I focused on two areas, Lucan and Rathfarnham using set criteria of 3 bed semi D and a max Eur 1,300 pm. Below is a summary of some of my findings. I hope this helps
> 
> To Let / Rent 19/11/2003
> Dublin >> 3936 units
> Cork >> 112 units
> Lucan >> 85 units
> Rathfarnham >> 16 units
> For Sales Dublin >> 358 units
> 
> To Let / Rent 08/04/2004
> Dublin >> 4065 units
> Cork >> 260 units
> Lucan >> 45 units
> Rathfarnham >> 9 units
> For Sales Dublin >> 723 units
> 
> To Let / Rent 08/11/2004
> Dublin >> 3258 units
> Cork >> 212 units
> Lucan >> 72 units
> Rathfarnham >> 14 units
> For Sales Dublin >> 1087 units
> 
> To Let / Rent 21/04/2005
> Dublin >> 2912 units
> Cork >> 228 units
> Lucan >> 40 units
> Rathfarnham >> 12 units
> For Sales Dublin >> 918 units
> 
> To Let / Rent 22/11/2005
> Dublin >> 2545 units
> Cork >> 164 units
> Lucan >> 32 units
> Rathfarnham >> 4 units
> For Sales Dublin >> 623 units
> 
> To Let / Rent 20/04/2006
> Dublin >> 2522 units
> Cork >> 215 units
> Lucan >> 24 units
> Rathfarnham >> 5 units
> For Sales Dublin >> 817 units
> 
> To Let / Rent 05/07/2006
> Dublin >> 2918 units
> Cork >> 346 units
> Lucan >> 20 units
> Rathfarnham >> 2 units
> For Sales Dublin >> 1637 units


 
Not more of this! Are you 2Pack in disguise?!


----------



## Marie

Well that seems to give the lie to the theory that more people are using Daft than formerly.  From your figures over a thousand more properties in the market in Dublin now than in 2003 and approximately a thousand less properties to rent in Dublin than in 2003.  Could there be other interpretations?  It looks as if contrary to what people are _saying _regarding their sentiments on property, the slide may be beginning!


----------



## Duplex

Interesting Borderlord, thanks for posting. In the absence of any other means of tracking inventory Daft listings are a worthwhile guide to possible public sentiment.

PS 

Borderlord do you have data comparing June, July, 2003,2004,2005 property for sale with June, July this year?


----------



## Guest107

Duplex said:
			
		

> Interesting Borderlord, thanks for posting. In the absence of any other means of tracking inventory Daft listings are _a worthwhile guide to possible public sentiment._



I will say nothing save that the Borderlord is not me, not associated with me in any way ,  and obviously got there long before me  <respect> .

_Possible pubic sentiment_ is a most elegant way of putting it duplex. 

Please refrain from shooting the messengers y'all


----------



## bearishbull

can people stop posting any numbers from daft, set up your own daft thread. why dont you ask daft to set up an index of inventory in irish market or something. the figures as many have said are meaningless without context /adjustment for daft business growth and seasonal factors.


----------



## redo

bearishbull said:
			
		

> can people stop posting any numbers from daft, set up your own daft thread. why dont you ask daft to set up an index of inventory in irish market or something. the figures as many have said are meaningless without context /adjustment for daft business growth and seasonal factors.


Plus I know of one house in particular in Malahide (1.3m) for sale.  It has about 4 entries in the lettings section with prices ranging from 2000 - 2500.


----------



## ivuernis

bearishbull said:
			
		

> set up your own daft thread.


 
was that pun intended


----------



## bearishbull

ivuernis said:
			
		

> was that pun intended


----------



## Persius

Going back to public sentiment, was talking to a guy who had been looking to buy for the best part of a year. Has since decided to continue renting a while as he reckons the prices are too high. He still gets people regularly thinking he's mad.

Another guy I know who bought an investment property from the plans last year says he'd be hesitant about buying anything now. 

So some more people are sceptical.

In contrast a third guy who bought an investment property two years ago and has seen his property increase by 33% (based on current sale prices) still thinks purchasing is a good idea. He sees prices continuing to go up - even though his rent doesn't even cover his morgage. He views it as his pension. Tried to discuss with him whether it made sense to be essentially subsidising somone else's accomodation. However this arguement just made no sense to him. So long as this type of thinking is prevalent among investors (and they can afford to cover the shortfall in rent), it's hard to see these guys getting pessimistic.


----------



## ivuernis

Persius said:
			
		

> Going back to public sentiment


Mentioned in another thread i know of 2 recent FTB's who are bullish (they would be though having just bought) and 2 other FTB's (bought a few years ago) who have recently bought a second "investment property". I'm the only bear it seems. 


			
				Persius said:
			
		

> He views it as his pension.


Still can't understand this mindset.... are people really that short-sighted to think that the recent 5-10 year boom in property which has made accidental millionaires out of a minority will do the same for the majority in 30-40 years time.


----------



## Borderlord

Duplex said:
			
		

> Interesting Borderlord, thanks for posting. In the absence of any other means of tracking inventory Daft listings are a worthwhile guide to possible public sentiment.
> 
> PS
> 
> Borderlord do you have data comparing June, July, 2003,2004,2005 property for sale with June, July this year?


 
Yes, I have collected the already mentioned info. Please find below what you are asking for, however, I only started in Nov 2003 so I cant supply you with June / July info for 2003.  Also, all figures are around mid-month and are for Dublin only

For sale June / July 2004 >>  871 / 1045
For sale June / July 2005 >>  854 / 748
For sale June / July 2006 >>  1293 / 1653


----------



## Duplex

Borderlord said:
			
		

> Yes, I have collected the already mentioned info. Please find below what you are asking for, however, I only started in Nov 2003 so I cant supply you with June / July info for 2003. Also, all figures are around mid-month and are for Dublin only
> 
> For sale June / July 2004 >> 871 / 1045
> For sale June / July 2005 >> 854 / 748
> For sale June / July 2006 >> 1293 / 1653


 
Thanks Borderlord.  (That name, you're not Slab Murphy by any chance?


----------



## bearishbull

Borderlord said:
			
		

> Yes, I have collected the already mentioned info. Please find below what you are asking for, however, I only started in Nov 2003 so I cant supply you with June / July info for 2003. Also, all figures are around mid-month and are for Dublin only
> 
> For sale June / July 2004 >> 871 / 1045
> For sale June / July 2005 >> 854 / 748
> For sale June / July 2006 >> 1293 / 1653


You dont collect stamps or watch trains do you?   only kidding.


----------



## southsideboy

Hey I just thought that this may interest a few people on here. There seems to be a trend in Dublin whereby a lot of big property developers are buying up big houses in good areas in Dublin and renting them out at low returns. Because they are mortgage free then of course they are generating good incomes of say between €4000-8000 per month but the returns are quite low as the houses are being bought for €2.5m-5m+ I wonder is there a trend whereby developers are trying to buy up as much property in order to keep demand high. Does anybody know whether this is their logic or is it more of an ego boost or do they see these as genuinely good investments (capital appreciation could be running at €500k-€1m a year on some of these properties)

To give you an idea of what I'm talking about. My parents home is in Dublin 6. On their road and two adjacent roads there is a well known developer who owns at least 10 houses ranging in value from €4m to about €10m - these are either vacant or rented out. Note most of these are listed and don't have development potential so he is not acquiring them for that reason. Also I know another developer in Dublin 4 who owns at least 6 large period properties which again are vacant or rented out at returns of approx 1-2%. So do people think this is a strategy to reduce supply?? Or whats going on?


----------



## kirian

Southsideboy,

Maybe these developers who are buying these listed properties for up to €10m and renting them out at a yield of 1-2% have more money than sense. 

They may not be financial geniuses even though they have made millions by being in the right place at the right time, i.e. being a porperty develper during the biggest property boom in the history of Ireland. This huge boom has been the result of a combination of many different factors and any property developer/property owner has gained masively from it. But it could be a case that some of these developers know nothing else other than property and believe their own hype that property is a one way bet and that's why they invest their money in it.


----------



## thewatcher

Buying up houses at them prices will have no effect on supply whatsoever,because they are way outside the limit of most people.
I always considered the top end of the market a totally different beast to the rest of it,mainly because for most people buying at them prices money is not a problem and if they see a house they really want they will pay whatever for it (within some reason of course). 

For property developlers to have any effect on real supply they would have to start buying up the likes of the celbridge's,lucan's,swords,santry's etc etc.   
If this was found out it would bring such media/public/revenue scrunity down on them,they would probably end up worse off in the long run.


----------



## bearishbull

impossible to affect suupply in such a way! these could be trophy homes or just investments,at upper end of market rental yield isnt important,there will always be rich people willing to buy in the most exclusive area's.


----------



## Rico

Don't believe a crash is about to happen. In the last ten years house prices have been catching up with incomes. Even an interest rate of 5% is still a relatively low rate. An average mortgage repayment of €1,600 is still comfortably affordable for average earning couple. A majority of people have significant equity in their houses. With a strong economy and culture strong on home ownership, its difficult to see a collapse, there is too much momentum and disposal income. Given recent performance of stock markets there is still a strong sentiment for investing in property. Even if it drops 10% alot of people still will have had serious appreciation. The days for fast capital appreciation seem to be past. Sure alot of things can happen, economy can recess etc the sky can fall in, but it is a just as valid  that property prices may just plateau as in the UK over the past few years. The value of property stock is still way above the value of debt.


----------



## bearishbull

Prices there seem to be getting close to or equal to the most expensive parts of london,does anyone seriously think dublin is as good an investment as london in the long term? london is a global capital and will always attract the rich and famous from around the world but dublin?  plus theres big tax advantages to buying in uk compared to here.


----------



## thewatcher

Rico said:
			
		

> Don't believe a crash is about to happen. In the last ten years house prices have been catching up with incomes.


 
Eh hello,dont you mean racing ahead of !  



			
				Rico said:
			
		

> The value of property stock is still way above the value of debt.


 
Says who ?It's only worth what someone else is willing to pay for it,just because BoI says irish property is worth 800billion does not mean anyone outside of ireland would be willing to pay that for it.If only the irish reckon it's worth that,then that value is simply an illusion.


----------



## bearishbull

Rico said:
			
		

> Don't believe a crash is about to happen. In the last ten years house prices have been catching up with incomes. Even an interest rate of 5% is still a relatively low rate. An average mortgage repayment of €1,600 is still comfortably affordable for average earning couple. A majority of people have significant equity in their houses. With a strong economy and culture strong on home ownership, its difficult to see a collapse, there is too much momentum and disposal income. Given recent performance of stock markets there is still a strong sentiment for investing in property. Even if it drops 10% alot of people still will have had serious appreciation. The days for fast capital appreciation seem to be past. Sure alot of things can happen, economy can recess etc the sky can fall in, but it is a just as valid that property prices may just plateau as in the UK over the past few years. The value of property stock is still way above the value of debt.


If mortgage rates reach 5+% then the banks will be lending much less than when they were at 3% even if people can afford the payments the have to be stress tested.
Property has far exceed income growth and other fundamental measures hence the costant warnings from central bank etc.
Houses may be worth 500billion and mortgages 120billion but mortgaes are growing at 25% and if that continues with slower house price growth you'll soon have a scenario where mortgages exceed the "value " of all the property! when compounding at 25% the amount triples every 5 years.


----------



## southsideboy

bearishbull said:
			
		

> impossible to affect suupply in such a way! these could be trophy homes or just investments,at upper end of market rental yield isnt important,there will always be rich people willing to buy in the most exclusive area's.


 
I'm referring to keeping supply down at the upper end of the market. I would have thought its very easy to affect supply at this end of the market. Its a unique market. The stock of good period homes in Dublin is quite poor. The same builders happen to behind "exclusive" developments in D4 and D6.


----------



## bearishbull

southsideboy said:
			
		

> I'm referring to keeping supply down at the upper end of the market. I would have thought its very easy to affect supply at this end of the market. Its a unique market. The stock of good period homes in Dublin is quite poor. The same builders happen to behind "exclusive" developments in D4 and D6.


 im sure he wouldnt tie up loads of capital just to limit supply ,the period house market isnt so small that a small number of houses would affect supply side significantly


----------



## thefisherman

i have a investor friend who just sold an investment property. he bought in 1996 for 60k and sold for 360k,his reasons for selling was to lock in profits. he thinks property is way overvalued and sooner or later there will be a correction-better to get out now and have a clear road rather than wait for rush hour with the herd when they get spooked by the sharp crack of interest rates rising.
says he can get the same or better return on his investment elsewhere, 

dont know if he's mad or not ,
but he sure can mix metaphors.


----------



## Howitzer

It looks to me as if the Sunday Indo is calling the property boom to be over. Not a huge fan of the paper but I think it, or at least it's editorial staff, see it as being an opinion forming element of modern Ireland, and they appear to be now telling the masses that it's time to jump ship. 

There's nothing new really in any of these stories but the fact that they've been lobbed out together in the one issue stood out for me. Maybe it's silly season and Business news is getting thin on the ground but I don't remember seeing this kind of stuff in previous years.

The smart money is now being diverted elsewhere
http://www.unison.ie/irish_independent/stories.php3?ca=184&si=1654335&issue_id=14357

A country Wilde about putting all of its investment eggs in the property basket
http://www.unison.ie/irish_independent/stories.php3?ca=184&si=1654099&issue_id=14357

A country bursting with riches and it's all due to a bubble
http://www.unison.ie/irish_independent/stories.php3?ca=184&si=1654147&issue_id=14357


----------



## beattie

Yes the Indo seems to have taken some sort of editorial decision to come out strongly against the bubble we have. They have a big enough circulation to know that the EA's will still have to deal with them if they want to flogg their overpriced wares.

Shane Ross has been particularly vociferous in recent weeks on the prospect of the bubble bursting.

I feel very sorry for that bloke to signed over his money for his investment in Turkey, I would contend that the currency collapse hasn't even registered with many who have handed over their (or the banks!) money


----------



## bearishbull

Bulgarian and Turkish investments both featured in bearish articles in sunday papers today along with bearish articles about irish bubbles, debt,high oil, interest rates and economy slowing down in next two years, enough in these opinion forming publications today to start forming more widespread negative sentiment, this autumn-spring will be crucial for the market.


----------



## JohnBoy

am just back from a weekend in Ireland where (as always) property was a topic of discussion with a number of people that I met.

i certainly did notice a slightly more circumspect view of the Irish property market from the majority of the prople that I spoke to (but as always a soft landing was never in doubt).

What I thought was interesting is that whilst there was a growing realisation that Irish property prices no longer represented good value to the investor; there is still a strong appetite for property as an invesmtnet vehicle so many were looking overseas (the UK & Germany in particular).


----------



## miju

there's another interesting poll on boards.ie about property which is here which again seems to indicate that a massive turn in sentiment has begun to materialise in the irish psyche


----------



## phoenix_n

miju said:
			
		

> there's another interesting poll on boards.ie about property which is here which again seems to indicate that a massive turn in sentiment has begun to materialise in the irish psyche


 
When is the moment that you can definately say that the bubble has burst ?


----------



## miju

personally don't think there is one defining moment as property isn't like the markets so you wouldn't really have days like black monday etc


----------



## whizzbang

phoenix_n said:
			
		

> When is the moment that you can definately say that the bubble has burst ?


about 9 months to a year after it actually happens  When the market does turn there will be so much spin from all the vested interests with dodgy stats that it will be impossible to tell what's what at the time.


----------



## polaris

On a previous thread about this subject, someone posted a link to an article about the collapse of housing bubbles. Seemingly it's more of a slow puncture situation!


----------



## phoenix_n

Anyone else thinking that the bubble has already burst.


----------



## Guest126

That article was written January 2005, the author hasn't exactly been proven right so far!!


----------



## Amygdala

There is no evidence of a turn just yet.


----------



## beattie

phoenix_n said:
			
		

> Anyone else thinking that the bubble has already burst.


 
Not yet IMO. Won't happen before ECB rates hit 3.5% as there are too many 'professional' investors who are still buying. I have noticed a change in sentiment though


----------



## walk2dewater

phoenix_n said:
			
		

> Anyone else thinking that the bubble has already burst.


 
No, we're going Japanese in Ireland-- that's my bet-- 2 more years of sellers/bull market in Irish property. We need crushing ECB rates to alter the mentality here. 9% mortgages should do it.

I was in London on the w/e. Apart from high-end London, bidding wars for UK property are 'so last year'. But then high-end London, is like high-end Paris or New York-- its sheikhs, Russians oil barons and rockstars.

Now the conventional wisdom of ordinary UK buyers is to expect a discount or some form of sweetener. I have friend in the City, UBS director, lives in a (v nice) rental apartment. Sold his London place 2yrs ago and has just bought a block of flats in Berlin.


----------



## Duplex

CapitalCCC said:
			
		

> That article was written January 2005, the author hasn't exactly been proven right so far!!


 
I think the author was writing about the US market. So it seems he was right. 

http://thehousingbubbleblog.com/


----------



## ivuernis

CapitalCCC said:
			
		

> That article was written January 2005, the author hasn't exactly been proven right so far!!


That article is solely describing the US housing market situation and based on figures coming out about the US market (re: building starts, completions, sales, etc.) this year may be on the ball.


----------



## Remix

Some areas in Dublin are definitely showing warning signs that look more than just a summer slowdown.

Also looks likely at this point that the summer slowdown will transition into a significantly higher interest rate environment. 

The unbalanced nature of the housing market is maintained by big time borrowing and the problem (from the banks perspective) with keeping prices at these levels is that Irish personal debt is now already very high by international standards.

You would think that options might be running out for this particular money-maker.


----------



## ninsaga

walk2dewater said:
			
		

> No, we're going Japanese in Ireland-- that's my bet-- 2 more years of sellers/bull market in Irish property. We need crushing ECB rates to alter the mentality here. 9% mortgages should do it.



..outside of some level of satisfaction you are going to get if/when there is a major crash, do you have some vested interest in seeing it happen?


----------



## ivuernis

walk2dewater said:
			
		

> We need crushing ECB rates to alter the mentality here. 9% mortgages should do it.


I don't think we'll require those kind of rates to alter the mentality here. I think we're beginning to see it already. 9% would certainly see the market go Japanese but sentiment would turn with half those rates IMHO.


----------



## Duplex

Its not just rates, its the economy or more precisely the US economy.  The Yield curve has remained inverted for almost a month now, a harbinger of a sharp slowdown and probable recession in the US.  The deficits have caught up with the Americans.


----------



## ivuernis

Duplex said:
			
		

> Its not just rates, its the economy or more precisely the US economy. The Yield curve has remained inverted for almost a month now, a harbinger of a sharp slowdown and probable recession in the US. The deficits have caught up with the Americans.


 
I agree it's not just rates which are a factor in this, and many other indicators at the moment point to the possibility of problems ahead especially for the US economy. 

I knew the yield curve had been flat for some about 6 months now, was it just June that it inverted?

p.s. UK inflation jumped too this month, possibly interest rate rise on the card in the UK again.


----------



## walk2dewater

ninsaga said:
			
		

> ..outside of some level of satisfaction you are going to get if/when there is a major crash, do you have some vested interest in seeing it happen?


 
I get satisfaction in being right with my investment calls, and that means putting my money where the facts are telling me. I've been (overall) a successful investor for coming on 20 years now. I intend to profit from whatever the markets throw my way. A nice put or short on a basket of Irish banks would be nice.

the facts are telling me that the religious zeal for property is far from over in ireland, in fact, the true mania may have only started.  As I said before I need to see clear evidence of inventory build up, before Im willing to believe we've reached a price peak.


----------



## anseo

If you're looking for a more intellectual debate, try the  Irish Wimmin's forum:




After reading the "buying property in Dublin - anyone scared  of a crash " all I can say is God help us.


Women are a bit mad aren't they![FONT=Arial, Verdana][/FONT]http://www.ivenus.com/scripts/ubbcg...um=Property&number=35&DaysPrune=60&LastLogin=


----------



## ivuernis

anseo said:
			
		

> After reading the "buying property in Dublin - anyone scared of a crash " all I can say is God help us.


Quote from said forum: "As for the property crash - it ain't gonna happen. Property prices will stablise, thats its, they won't crash. Any economist will tell you that."


----------



## whizzbang

anseo said:
			
		

> If you're looking for a more intellectual debate, try the  Irish Wimmin's forum:
> 
> 
> 
> 
> After reading the "buying property in Dublin - anyone scared  of a crash " all I can say is God help us.
> 
> 
> Women are a bit mad aren't they!



good link! I love this one...

"[FONT=Arial, Verdana]As for the property crash - it ain't gonna happen. Property prices will stablise, thats its, they won't crash. Any economist will tell you that."

...except perhaps this one: http://www.economist.com/
[/FONT]


----------



## walk2dewater

ivuernis said:
			
		

> I don't think we'll require those kind of rates to alter the mentality here. I think we're beginning to see it already. 9% would certainly see the market go Japanese but sentiment would turn with half those rates IMHO.


 
On the contrary, the odds of dramatic price falls this summer flowing into Autumn are less than the odds that prices go on a massive 2 year run. Sorry, Irish propery owners would rather eat glue than sell their property for a discount and rates are no where near enough to withdraw the amount of liquidity required. The only thing that can save this economy from an imploding debt pyramid is a quick, sharp spike in interest rates. 8% ECB by end 2008 would be just about sufficient to do it.


----------



## Remix

walk2dewater said:
			
		

> A nice put or short on a basket of Irish banks would be nice.


 
I suggested this a few weeks back (end of June):



			
				Remix said:
			
		

> The ISEQ financials seem oblivious to the emerging situation
> 
> Big 4 at 18.34/14.10/11.58/18.55
> 
> Time for shorts ?


 
Wish I'd taken my own advice as the Big 4 are now DOWN

-4%
-6%
-5.8%
-6.7%

Since that post !


----------



## walk2dewater

Remix said:
			
		

> I suggested this a few weeks back (end of June):
> 
> 
> 
> Wish I'd taken my own advice as the Big 4 are now DOWN
> 
> -4%
> -6%
> -5.8%
> -6.7%
> 
> Since that post !


 
I'll have to take a closer look.  Thanks for that.


----------



## Duplex

ivuernis said:
			
		

> I agree it's not just rates which are a factor in this, and many other indicators at the moment point to the possibility of problems ahead especially for the US economy.
> 
> I knew the yield curve had been flat for some about 6 months now, was it just June that it inverted?
> 
> p.s. UK inflation jumped too this month, possibly interest rate rise on the card in the UK again.


 
From memory about 4 weeks. ivuernis.

http://www.bloomberg.com/markets/rates/index.html


----------



## ivuernis

walk2dewater said:
			
		

> On the contrary, the odds of dramatic price falls this summer flowing into Autumn are less than the odds that prices go on a massive 2 year run.


I don't see dramatic falls on the card anytime soon either even with rates rising faster than anticipated but neither can I envisage the property bull continuing for another 2 years, certainly not at anything approaching double digits.


----------



## redo

What is interesting is the amount of 2nd hand investment properties becoming available.  A quick trawl through myhome.ie (only watching Dublin West and Dublin North) is very revealing.  Not many 1 beds, but there is plenty of 2 beds.

I think there is many 'savvy' and 'canny' investors out there trying to dump their 'portfolio' in a quiet market.   With the recent media attention on the ECB rate rises in August, they appear not to be in it for the long haul after all.  It is amazing how these people will dilude themselves with the promises of easy money.  It is also quite funny to note the EA's marketing these properties to *"First time buyers and Investors alike.."*


----------



## beattie

anseo said:
			
		

> If you're looking for a more intellectual debate, try the Irish Wimmin's forum:
> 
> 
> 
> 
> After reading the "buying property in Dublin - anyone scared of a crash " all I can say is God help us.
> 
> 
> Women are a bit mad aren't they!


 
Is this thing for real? God help anyone who relies on this nugget for investment advice


----------



## micheller

Not in Dublin, but this house caught my eye for the price tagline 'or nearest offer' in the description. I've never seen this before. Unusual?

[broken link removed]


----------



## bearishbull

_From ivenus_
_" I don't think you can lose in Dublin the population is growing and there aint enough housing, I bought in an up and coming area in dublin 14mths ago and now I couldn't afford my own place if I were to try and buy it now. I feel sorry for people who haven't bought yet! Best thing I ever did was buy Cavan because from that I got the deposit for Dublin by remortgaging! So if people can't afford Dublin but can afford elsewhere I'd say to do it just to get on the ladder!"_

Aint enough housing in dublin? Thats why rents are no higher than 6 years ago!! Oh i'd say theres great demand for rental properties in the economic capital of ireland -Cavan! These are the sort of "investors" buying and inflating market with zero regard for rental yields or sustainability and are in for a rude awakening


----------



## beattie

bearishbull said:
			
		

> _From ivenus_
> _" I don't think you can lose in Dublin the population is growing and there aint enough housing, I bought in an up and coming area in dublin 14mths ago and now I couldn't afford my own place if I were to try and buy it now. I feel sorry for people who haven't bought yet! Best thing I ever did was buy Cavan because from that I got the deposit for Dublin by remortgaging! So if people can't afford Dublin but can afford elsewhere I'd say to do it just to get on the ladder!"_
> 
> Aint enough housing in dublin? Thats why rents are no higher than 6 years ago!! Oh i'd say theres great demand for rental properties in the economic capital of ireland -Cavan! These are the sort of "investors" buying and inflating market with zero regard for rental yields or sustainability and are in for a rude awakening


 
It would be interesting to see how many of these guru's are managing to get tenants in these places outside the commuter belt like Cavan and if so what sweeteners they have had to throw in such as reduced rent to actually let them. I don't think those stories would make it on that thread. I agree a rude awakening is in store for these type of investors especially if they have to put up the for sale sign and find a shortage of potential buyers.


----------



## singinvestor

I don’t think a correction in the Irish property market needs to wait for a sudden increase in interest rates. The market, particularly over the last few years has been driven by fear and speculation rather than sound economic principles. The fact that interest rates are nudging up with no certainty of where they will level off may be enough for investors to start considering a movement out of property. The real test for the property market will come when prices stabilise and possibly stop growing – will investors stay for the long haul and be happy in the short to medium term with low yields and little if any capital appreciation?


----------



## ivuernis

Merrill Lynch's Survey of Fund Managers for July; 60% of participants expect the global economy to weaken over the next 12 months, up from 5% of participants from 3 months ago - most negative result in the survey's history. 
http://www.finfacts.com/irelandbusinessnews/publish/article_10006618.shtml


----------



## Persius

I was in the UK yesterday, and the headline of the British Mail was that UK house prices are set to rise 50% over the next 6 years. This was based on some survey or the other without much detail. They just said it was also based on the assumption that BoE rates stayed at 4.5%. There was also mention of Japanese style intergenerational morgages.

Not really relevant to sentiment in Ireland I know, but I found it unusual considering how many people were saying that UK prices had plateaued out. Maybe it's as a previous poster said, you won't know the boom/bubble is over till about 9 months after the peak has been reached.


----------



## glendale

A Davys report titled The Irish Economy: an assessment of risks and forecasts 2008-2010 said that

"...a price adjustment still seemed likely, but the timing was hard to predict and any fall-out would be reduced by the increase in personal incomes over the last few years. "

according to http://www.rte.ie/business/2006/0719/economy.html


----------



## ivuernis

German producer prices rose by 6.1% in year to June close to a 24-year high:
http://www.finfacts.com/irelandbusinessnews/publish/article_10006624.shtml


----------



## phoenix_n

...got a voice message from an established EA on the northside wanting to know if i was still looking for property.

never got that before!


----------



## redo

phoenix_n said:
			
		

> ...got a voice message from an established EA on the northside wanting to know if i was still looking for property.
> 
> never got that before!


Becoming more like Glengary Glenross every day.  The EA's looking for "leads".


----------



## Duplex

> Economists Robbie Kelleher and Rossa White said the housing market remained the most obvious risk, but population trends had significantly increased the underlying demand for housing.


 
This statement is patently wrong as is obvious to anyone familiar with the deflation in rents.  The demand for housing is not driven by population growth, but by speculation.  I think that we now are approaching the European average for housing units per capita.  However if the measure was the number of habitable rooms per capita, Ireland would top the league; that is we have more bedrooms per head of population that most  European countries.

Do we have any information on the churn rate in the 'guest worker' population, how long do these people remain before returning home?. We know that most work in low end service sector and construction jobs, the areas of the economy most likely to be affected by a slowdown. So making any suppositions of population trends' involving the continuation of the current guest worker cohort is futile. 

I'm consistently amazed at the pathetic analysis churned out by our banks, its embarrassing, please stop and go get a job in marketing somewhere chaps.


----------



## damien60

A.B.C
Alaways
Be
Closing


----------



## phoenix_n

you can now rent a 2 bed in prospect hall in finglas (or glasnevin if ur dreaming) for 1,000.


----------



## ivuernis

"When the economy slows down... immigrants will be more flexible and in the extreme, some will up and split, leaving the estimated thirty percent of new Irish housing stock rented by foreigners, tenantless" - David McWilliams
http://www.unison.ie/irish_independent/stories.php3?ca=36&si=1655827&issue_id=14373


----------



## RugbyBoy

also with texting, email, IM ,etc migrant workers know very quickly where the jobs are.


----------



## Persius

The preliminary 2006 census figures were published today at www.cso.ie
The population is recorded at 4.2 million, up from 3.9 million in 2002. A total increase of 317K. Of this, births over deaths in the state accounts for 131K. This "gives a derived net immigration figure of 186,000* for the 2002-2006 period"

* the footnote further states
"The number of non-Irish nationals enumerated as part of the 2002 census was 222,000, representing 5.8 per cent of the usually resident population. While the corresponding figure for 2006 will have to await the publication of the Principal Demographic Results in April 2007, it can be tentatively estimated from the derived flow data on migration that the stock of non-Irish nationals is likely to be about 400,000."

So, can't estimate churn rate or future rates of net inward migration, but it does look like 178,000 people immigrated to, or returned to, Ireland over the last 4 years.

So it does look like there are some arguements in favour of "demographics". More relevant may be whether this is made up of single people, childless couples or couples with children. This would determine what types of property will be most in demand over the next few years.

Full details:  http://www.cso.ie/census/documents/2006PreliminaryReport.pdf


----------



## Purple

Does anyone have figures showing how many of the 178,000 inward migrants were returning Irish nationals and non-EU nationals? I would suggest that these are less mobile (to other EU states) in the event of an economic downturn.


----------



## Bedsit

Purple said:
			
		

> Does anyone have figures showing how many of the 178,000 inward migrants were returning Irish nationals and non-EU nationals? I would suggest that these are less mobile (to other EU states) in the event of an economic downturn.


Yes but the thing to remember in relation to the non-EU nationals is that the in the event of a donwturn the government could (under public pressure) stop renewing work permits or maybe change citzenship and residency rules so that they would be forced to return to their native countries or go somewhere else.


----------



## Amygdala

> Does anyone have figures showing how many of the 178,000 inward migrants were returning Irish nationals and non-EU nationals


 
From RTE "On average, there were 46,000 more immigrants than emigrants each year from 2002 to 2006, up from 26,000 in the previous period."


----------



## Remix

Some more details on the report from Davy Stockbrokers



> There are no such mitigating factors to explain the pace of house price inflation in Ireland.
> By most measures, house prices in Ireland look stretched and a period of stabilisation or
> decline looks inevitable at some point. However, we do not have the tools to determine with
> any confidence the timing or size of such an adjustment.


 
They offer three scenarios. The most pessimistic scenario calls for a 5% per annum decline in house prices.

i.e in their _worst case_ scenario, years of panic buying,speculation and unjustified house price inflation will be followed by a nice gentle orderly decline. Hmmmm.

You might be forgiven for questioning who owns Davy Stockbrokers


----------



## JumpShot

317K population increase over 4 years Apr-02 to Apr-06 according to preliminary census results

284K new dwellings completed over 4 years 2002 to 2005.

a. Imigration will need to increase from current levels to meet the supply of houses being built, even allowing for lower average household size. in the future

b. less houses need to be built in the future

[broken link removed]


----------



## beattie

JumpShot said:
			
		

> 317K population increase over 4 years Apr-02 to Apr-06 according to preliminary census results
> 
> 284K new dwellings completed over 4 years 2002 to 2005.
> 
> a. Imigration will need to increase from current levels to meet the supply of houses being built, even allowing for lower average household size. in the future
> 
> b. less houses need to be built in the future
> 
> [broken link removed]


 
In relation to point b above there is now way that developers who have paid astronomical sums to buy land over the past year or so cannot afford not to bring them to market so there will be a huge amount of housing coming on stream for the next few years


----------



## Duplex

The building boom will end and I suppose only then will we know how much of the economy was reliant on construction and related spin offs.


----------



## ivuernis

Discussion on possible impending stagflation in the US economy and its effects on consumers... a harbinger of things to come for the Irish economy perhaps...


----------



## macbri

On the census,the vasy majority off immigrants in the last 2 years have to come from new EU states-estimates suggest that there are between 100-200 thousand polish immigrants alone.

This immigration will only support the housing rental market as vast majority will end up in minimum wage jobs(tourism,catering etc).

Again-this begs the question-what is driving current housing demand? given 2006 projected housing output at 90000-100,000 and housing density falling from 3.1 in 2002 to 2.55 .


----------



## Duplex

macbri said:
			
		

> On the census,the vasy majority off immigrants in the last 2 years have to come from new EU states-estimates suggest that there are between 100-200 thousand polish immigrants alone.
> 
> This immigration will only support the housing rental market as vast majority will end up in minimum wage jobs(tourism,catering etc).
> 
> *Again-this begs the question-what is driving current housing demand? given 2006 projected housing output at 90000-100,000 and housing density falling from 3.1 in 2002 to 2.55* .


 
To get some idea of what is happening in Ireland look no further than Florida.  The Florida bubble began to burst a year ago so it may provide some indication how things will play out here.  I've attached a report from a realtor in Florida who tells it like it is (rare).  

http://globaleconomicanalysis.blogspot.com/2006/07/ghost-housing-market.html


----------



## Persius

macbri said:
			
		

> On the census,the vasy majority off immigrants in the last 2 years have to come from new EU states-estimates suggest that there are between 100-200 thousand polish immigrants alone.
> 
> This immigration will only support the housing rental market as vast majority will end up in minimum wage jobs(tourism,catering etc).
> 
> Again-this begs the question-what is driving current housing demand? given 2006 projected housing output at 90000-100,000 and housing density falling from 3.1 in 2002 to 2.55 .


 
Some of the other EU countries are now opening up their labour markets to the accession countries (Spain, Portugal, Belgium and Finland I think). All of the old 15 EU members are obliged to open up their labour markets by 2012. I think Ireland will be a less attractive location for Poles, Latvians etc by then.

I think the demand is basically coming from the Irish pysche. The long held view that "you can't go wrong in your own home" and "rent is dead money for poor quality and no security of tenancy" along with the more recent view that property "investment" is a one way bet. 

One result of this is that loads of singles in their 20's feel they should be getting on the property ladder, and are thus driving up demand (along with investors/speculators). I guess this was very rare 10 or 15 years ago, where mainly maried couples purchased. Increasing maritial separation and now divorce is probably also driving demand to some extent.

I see a little bit more caution in public sentiment now, but still the majority opinion (amongst those I talk to) seems to be bullish regarding property.


----------



## shnaek

We were chatting around the table at work here and I was amazed that all 6 people at the table said you'd be crazy to buy now. One of those people had been looking at houses for the last few months. Another had only been saying a few months back how now was the time to buy, with SSIA's coming out etc. 
So the 'public' sentiment here is definitely bearish.


----------



## Howitzer

Did they have strong reasons for their change of heart or simply following the herd, then and now.


----------



## delboy159

You have to take into account the current media blitz of negativity.  I remember a few years ago when equity markets were suffering and the papers had headlines of "Equity SSIA's loosing money" etc. etc.  

A lot of my friends transferred from equity to deposit SSIAs because of this.  I was trying to tell them that it was silly to pull out - you were selling at a low price - stay in the funds, buy at the low market and only transfer when things recover - you have 3/4 years......  But still they transferred.....  Now they are saying that in hindsight they were silly why did they listen to the media hype.  It's the same thing now - there are no real cold hard facts, yet people are jumping on a band wagon beause thats what the papers are feeding them this week.  

Bottom line - I'm looking to buy in an area (I would call very vulnerable to price drops) down the country and prices are not dropping - as much as I'd like them to - thats a cold hard fact, not media hype...


----------



## Guest126

Yea markets operate on fear and greed.

The case of equities you mentioned was an example of fear, they bottomed out and were oversold IMO.

On the other hand, in the case of houses it is greed at the moment, they have topped out and (as with the tech bubble) are still being bought IMO.


----------



## shnaek

Howitzer said:
			
		

> Did they have strong reasons for their change of heart or simply following the herd, then and now.



I don't know. We didn't get into much of a discussion on it. One girl is American with an Irish husband. She was comparing prices to San Fran prices and saying that they didn't make sense. Another was saying that they were looking around and couldn't see the value in the prices being asked. 

But it was only a ten minute lunch break so we didn't go too deep into it. Perhaps it is a herd reaction, but isn't everything?! The herd has been pushing prices up, so the herd could just as easily push prices down. If you can anticipate the herd then you can see profit to be made.


----------



## colc1

Persius said:
			
		

> Some of the other EU countries are now opening up their labour markets to the accession countries (Spain, Portugal, Belgium and Finland I think). All of the old 15 EU members are obliged to open up their labour markets by 2012. I think Ireland will be a less attractive location for Poles, Latvians etc by then.


 
I think the labour markets opening in these countries is a very important point why wouldn't the Poles, etc. go to somewhere with a better climate over the next few years rather than Ireland?


----------



## colc1

shnaek said:
			
		

> Perhaps it is a herd reaction, but isn't everything?! The herd has been pushing prices up, so the herd could just as easily push prices down. If you can anticipate the herd then you can see profit to be made.


 
Exactly the herd has been pushing up prices and the herd is now clearly getting more negative plus the census proves the huge immigration levels of recent years and that's not going to continue once at that level once the other countries like Spain open their labour markets as I was predicting in my previous post


----------



## walk2dewater

In order for prices to fall we need a market where buyers have power to extract discounts from sellers. Where sellers are forced to concede ever lower prices, thus driving market values lower and lower.

I think we are nowhere near such a position for the folllowing reasons:

First, inventory build up is the first tell-tale sign that sellers arn’t having their way, and I see NO evidence of this.

Second, the recent “crash” fears in the media are highly exaggerated. By Autumn, hindsight will demonstrate this to be yet another “crying wolf” episode. The few temporary bears will conclude that prices will continue to rise and they will therefore switch back to the bull camp. Sellers may experience even more pricing power than ever.

Thirdly, ECB rates won’t really hurt until >7%. And that’s 18mths away. And before this Irish banks will have time to develop and market 50yr+ mortgages or other forms of payment scheduling that maintain “monthly affordability”

Fourthly, and this is crucial, I think that there will be an EXTREME supply side refusal to discount prices, EVEN if buyers dry up. I have recently re-started discussing property trends with friends, friends of friends, colleagues etc. There is a scenario forming in my mind where families or other groups will “band together” to prevent ANY sales going through for discounts. I can see a situation where there is virtually NO sales activity. Estate agents and auctioneers may go bust in droves, but absolutely no one will break ranks and sell “below market”. This extreme supply-side response could only be broken by extreme circumstances, e.g. 80s style recession.

Any comments?


----------



## Duplex

The bell has tolled for the Irish Housing Bubble.  Global indicators now point to a sharp slowdown, inverted yield curves, rising inflation, slowing US economy, geopolitical rancor etc.   The lumpen masses will realise soon enough.


----------



## colc1

walk2dewater said:
			
		

> This extreme supply-side response could only be broken by extreme circumstances, e.g. 80s style recession.
> 
> Any comments?


 
Do you not think some kind of recession, maybe not 80s style, is possible  with fewer houses being built, cheaper labour in newer EU states, etc?


----------



## Guest126

My comment is that rental yields are now about (and in Cork a bit less than) 3%.

How can we say that interest rates need to get to 7% before they hurt, if yields are 3%?

Do we think renters can afford to pay much higher rents than now?
IMO no they cant because economy is not booming ahead now.

Do we think rental yields will go lower?
IMO no because they are about 4% to 5% in major EU capitals such as Madrid, Paris, Amsterdam...eh what is so special about Cork please


----------



## walk2dewater

colc1 said:
			
		

> Do you not think some kind of recession, maybe not 80s style, is possible with fewer houses being built, cheaper labour in newer EU states, etc?


 
I do, but my main point is that I sense something in the Irish psyche that will resist tooth and nail succumbing to lowering the asking price. Moreso than in other countries. We are a very stubborn race and we have a fanatical relationship with property/land. Even if there's a job loss, illness or divorce, or punishing rates, family will rally around to make sure the mortgage gets paid, and no-way-Jose over-my-dead body etc. will they "give away" the house...


----------



## Duplex

We won't have data like this in Phoenix Arizona (on their bursting bubble).
But this is what I expect to happen here.  And I don't think that interest rates will have to rise or (will) rise to 7%-8% (unless the Middle East goes critical.)

The property market is a bubble remember that, prices have risen because prices have risen, when prices stop rising the bubble pops it really is that simple.   



[broken link removed]


----------



## walk2dewater

[I know I'm replying to myself here ]

What's to stop government giving subsidies/tax breaks/dole to jumbo mortgage holders in danger of being repossessed? Surely that would be a popular voting grabbing, policy?


----------



## Guest126

But who will buy at less than 3%?


----------



## Howitzer

walk2dewater said:
			
		

> [I know I'm replying to myself here ]
> 
> What's to stop government giving subsidies/tax breaks/dole to jumbo mortgage holders in danger of being repossessed? Surely that would be a popular voting grabbing, policy?


 
Once tax from property transactions drops, tax from consumer spending drops and unemployment increases then you'll struggle to come up with the cash for populist measures without breaking the EU budget guidlines, though I know everyone else breaks these on a regular basis.


----------



## Persius

walk2dewater said:
			
		

> ...I think that there will be an EXTREME supply side refusal to discount prices, EVEN if buyers dry up... There is a scenario forming in my mind where families or other groups will “band together” to prevent ANY sales going through for discounts. I can see a situation where there is virtually NO sales activity. Estate agents and auctioneers may go bust in droves, but absolutely no one will break ranks and sell “below market”. This extreme supply-side response could only be broken by extreme circumstances, e.g. 80s style recession.
> 
> Any comments?


 
I'm no expert in the motor trade, but think there may be some parallels there.

The amount of new motor purchases has been roaring ahead since 2000. This resulted in loads of articles in the press about the forecourts being full of second hand cars as a result of the trade-ins. The conclusion was that there was oversupply of second hand cars, and it should be easy to get a bargain. 

However as far as I can see, the garages simply refused to sell at a discount. From anecdotal evidence, many garages refuse to enter into any meaningful bargaining, and will simply hold on to a vehicle for an extra year rather than sell at discount. I guess they don't want to give the impression that they have any over supply or other problems. Otherwise they will get this reputation and everyone will be looking for significant discounts.

I could imagine something similar happening with property. Owners will simply refuse to sell at a discount. They will (still) be willing to subsidise their tennants in their investment property, or simply delay a move in their residential property.

Rising interest rates on their own won't make that much difference as people will probably cut back elsewhere instead. The only thing that will force sellers to accept lower prices IMHO is a large increase in unemployment where the seller can no longer afford his monthly repayments. However in this scenario purchasers will probably also be very afraid of losing their jobs and less willing to commit to long term morgages. There's another thread on propsects for the Irish economy, but no-one foresees large rises in unemployment for the next 2 years at least.


----------



## Duplex

The best example I can provide of what is likely to happen is what did happen here in Ireland in 2001. Prices fell, mortgage lending dropped, then 9/11. Five years 400,000 new homes later an economy built on houses and unsustainable debt, is where we are at.


----------



## phoenix_n

walk2dewater said:
			
		

> I do, but my main point is that I sense something in the Irish psyche that will resist tooth and nail succumbing to lowering the asking price. Moreso than in other countries.


 


Disagree totally. Firstly those that gained already will take a loss on their profit to get out of a falling market. Those that are paying a mortgage of 1600 on a falling asset when they could rent the same for 1000 will sell even at loss to stop the montly loss.


----------



## Bedsit

One point to remember here is that a lot of the second hand stock has been bought up immigrants and recent arrivals. This has kept the second hand market bouyant.



			
				Persius said:
			
		

> I'm no expert in the motor trade, but think there may be some parallels there.
> 
> The amount of new motor purchases has been roaring ahead since 2000. This resulted in loads of articles in the press about the forecourts being full of second hand cars as a result of the trade-ins. The conclusion was that there was oversupply of second hand cars, and it should be easy to get a bargain.
> 
> However as far as I can see, the garages simply refused to sell at a discount. From anecdotal evidence, many garages refuse to enter into any meaningful bargaining, and will simply hold on to a vehicle for an extra year rather than sell at discount. I guess they don't want to give the impression that they have any over supply or other problems. Otherwise they will get this reputation and everyone will be looking for significant discounts.


----------



## ubiquitous

walk2dewater said:
			
		

> I think that there will be an EXTREME supply side refusal to discount prices, EVEN if buyers dry up. I have recently re-started discussing property trends with friends, friends of friends, colleagues etc. There is a scenario forming in my mind where families or other groups will “band together” to prevent ANY sales going through for discounts. I can see a situation where there is virtually NO sales activity. Estate agents and auctioneers may go bust in droves, but absolutely no one will break ranks and sell “below market”. This extreme supply-side response could only be broken by extreme circumstances, e.g. 80s style recession.
> 
> Any comments?



One possible flaw in your argument would be the effect of the banks forcing people to sell against their will. Then again the banks have over the years forced quite a number of cash-strapped farmers to sell their farms and this phenomenon has not caused agri land prices to collapse, even though profits in agriculture have been falling for years. Its therefore impossible to predict with any certainty what will happen in the property market.


----------



## walk2dewater

phoenix_n said:
			
		

> Disagree totally. Firstly those that gained already will take a loss on their profit to get out of a falling market. Those that are paying a mortgage of 1600 on a falling asset when they could rent the same for 1000 will sell even at loss to stop the montly loss.


 
Good point, the sellers from which buyers can extract discounts will likely be the "investor" types.

However, isnt there STILL wide scope to "borrow from peter to pay paul" so that these investor-types can cope and hang in there for ages more?  Particularly if overall sentiment maintains a seller market?

Bottom line is, I reckon reports of a buyers market as of TODAY are exaggerated.  I'm betting on prices being higher 6-12mths from now.


----------



## walk2dewater

ubiquitous said:
			
		

> One possible flaw in your argument would be the effect of the banks forcing people to sell against their will. Then again the banks have over the years forced quite a number of cash-strapped farmers to sell their farms and this phenomenon has not caused agri land prices to collapse, even though profits in agriculture have been falling for years. Its therefore impossible to predict with any certainty what will happen in the property market.


 
Remember 1st and foremost banks want their principal back, and the best way to do this is to keep those monthly payments coming in.  Friendly banker: "Falling behind on the mortgage there Mr Murphy?", "Well now that you've paid off some of the principal why not re-finance to reduce the monthly lump?"


----------



## macbri

Folks,
        The housing environment is govern like any asset by supply and demand.

We are going from a situation where supply is at historial highs(forecast 90-100k this year),housing density historical low 2.55,prices at record high and interest rates at historical low 2.75%.

If interest rates go to 5-6%,that is roughly 80% increase on current repayments whether its' investor or home loan.

Given current house prices,couples or single people with parent support can only get into the housing market.
Where is the demand to support 90k new homes a year or even 60k homes a year.
To give u an example,Australia with a population of 20m and similiar demographics  & housing density to Ireland has forecast 150k new housing starts this year(Australia also has an extensive annual skilled migration programme)).


As well in Ireland,theres' an abundance of rental stock at less than half mortgage of buying same property.

Rent is not dead money-its' only the Irish psyche.
For example,In Germany and France over 70% of population rent their homes-I think in Germany its' 78%(correct me out there if I'm wrong)

Anyone who has bought property in the last year has made a financial killing but theres' is no point having all your assets in 1 basket.

It reminds me of the tech boom where we had all these 'paper millionaires' ie trintech,baltimore etc-the happy ones where the investors who sold on the up whilst those who held up for higher gains ended with zero.' 

Economic reality will determine the housing market and at the moment,its only pointing 1 way


----------



## delboy159

We do have a lot of people leveraged in this country, but there is still a lot of people who have "family safety nets", be it cash or land etc.  These will be tapped before people sell at a loss.  

Just to give you an insight into a typical sellers psychology -----

I'm going to put my house on the market in about 6 weeks.  Renovations are starting to come together.  However, I will not sell unless I receive what I know to be a minimum going market value.  I'm not talking about what the estate agent says (which i think is over-valued) - I mean average prices I've seen houses sell for in the estate over the past few months.  I'll hold on for 3 months or 6 months and then I'll take it off the market rather than sell below that value.  I'm not saying I'm looking to "break the price cieling" or do something special - but I have my number and I'd say a lot of people have the same mentality.......


----------



## SteelBlue05

macbri said:
			
		

> If interest rates go to 5-6%,that is roughly 80% increase on current repayments whether its' investor or home loan.


 
Where are you getting that figure from?!


----------



## redo

delboy159 said:
			
		

> I'm going to put my house on the market in about 6 weeks.  Renovations are starting to come together.  However, I will not sell unless I receive what I know to be a minimum going market value.  I'm not talking about what the estate agent says (which i think is over-valued) - I mean average prices I've seen houses sell for in the estate over the past few months.  I'll hold on for 3 months or 6 months and then I'll take it off the market rather than sell below that value.  I'm not saying I'm looking to "break the price cieling" or do something special - but I have my number and I'd say a lot of people have the same mentality.......



Are you trading up? or selling an investment.  If you are trading up, note that the prices in the trade-up market are going to rocket this autumn IMO.  Let us know how you get on.  It will be interesting to hear from your prospective.


----------



## walk2dewater

redo said:
			
		

> prices in the trade-up market are going to rocket this autumn IMO.


 
I would tend to agree also.  When this current period of bearishness is demonstrated to be yet another episode of "crying wolf", and therefore "prices can't fall", sellers will be emboldened and buyers forlorn.


----------



## macbri

Its' pretty easy to work out

Interest rates at moment are 2.75%(ECB Rate),bank margin(1-1.25%)=4%

Interest rates by ECB move by 2-3% ECB(3% rise will equal current US rate 5.75%) will give bank mortgage rate of 6-7%.

This is an increase of 80% increase on interest only mortgate,about 60-70% on a term mortgage depending on term


----------



## walk2dewater

Bottom line is:  We're entering the "going Japanese" phase.  I have feared this outcome for a while.  Now it looks highly probable to me.  Average prices up min. 25% next 18mths, high-end who knows, 30%-40%-X%?  The market will be comprised as follows:

Sell side: absolutely no discounts.
Buy side: Damn the price, damn the rate, damn the debt, buy NOW.


----------



## phoenix_n

Persius said:
			
		

> However as far as I can see, the garages simply refused to sell at a discount. From anecdotal evidence, many garages refuse to enter into any meaningful bargaining, and will simply hold on to a vehicle for an extra year rather than sell at discount.


 
Thats flawed as the asset (in this case a car) will depreciate over the year if they choose to retain it. In the current second hand car market a car sales man would be very foolish to let a prospective customer walk out of his premises.

Back to property though.

Someone wrote that all 6 in their group said it was a bad time to buy. If another 6 agree that its time to sell that is where the market will drop. Loads of sellers. No buyers.


----------



## shnaek

walk2dewater said:
			
		

> Bottom line is:  We're entering the "going Japanese" phase.  I have feared this outcome for a while.  Now it looks highly probable to me.  Average prices up min. 25% next 18mths, high-end who knows, 30%-40%-X%?  The market will be comprised as follows:
> 
> Sell side: absolutely no discounts.
> Buy side: Damn the price, damn the rate, damn the debt, buy NOW.



If this is your opinion would you put your money on it? Would you buy now to get that min 25%?


----------



## redo

walk2dewater said:
			
		

> Sell side: absolutely no discounts.
> Buy side: Damn the price, damn the rate, damn the debt, buy NOW.


 *or forever be stuck in this ****hole.*

IMO, the 'investor' and FTB market will be daed this autumns' season.  It will be the trade-up market that begins to panic, fearing being stuck in an area with they do not want to settle in (bought initially to get on the ladder, location was not a factor at this stage).  

Sellers wishing to trade up from the FTB market will have plenty of tyre kickers but with no real interest from FTB's.  I think there will be discounts to be had in new developments and within the FTB market.


----------



## phoenix_n

delboy159 said:
			
		

> However, I will not sell unless I receive what I know to be a minimum going market value.


 
But if the market value has dropped to say what you bought it for would that mean you would not sell the place.


----------



## room305

I look forward to selling my house at a vastly inflated price in about 18-24mths time! Planning on emigrating and I was worried I might end up selling at a loss.

So from a purely selfish perspective, that will work out brilliantly. Though of course, I have no doubt that friends, family, girlfriend etc. will be unrelenting in their advice that I would be "mad to sell" ...


----------



## redo

room305 said:
			
		

> I look forward to selling my house at a vastly inflated price in about 18-24mths time! Planning on emigrating and I was worried I might end up selling at a loss.


It will depend on what area your house is in.  May I ask where abouts it is?


----------



## room305

phoenix_n said:
			
		

> In the current second hand car market a car sales man would be very foolish to let a prospective customer walk out of his premises.



Houses can depreciate in value too of course. Slightly off-topic but I know a garage owner and he says that in the 2nd hand market the value of older cars (01,00,99) is quite close to newer ones (04,05). Or should be at least. Quite simply they can't shift the newer 2nd hand cars and older 2nd hand cars are flying off the forecourts. Supply and demand being what it is, in terms of a trade-in they will offer pretty much the same price for both kinds.

Obviously this varies depending on model etc. Going a bit off-topic and don't want a highly entertaining thread to get locked so I'll shut-up.


----------



## thewatcher

walk2dewater said:
			
		

> Bottom line is: We're entering the "going Japanese" phase. I have feared this outcome for a while. Now it looks highly probable to me. Average prices up min. 25% next 18mths, high-end who knows, 30%-40%-X%? The market will be comprised as follows:
> 
> Sell side: absolutely no discounts.
> Buy side: Damn the price, damn the rate, damn the debt, buy NOW.


 
There is no way average prices are going to rise by another 25%,average buyers simply cannot afford them prices.

A new estate in drogheda is looking for 400,000 for a 3 bed semi,anyone iv'e spoken too has said they are not worth that money and your trying to tell me they'll be going for 500,000 in the next 18 months.i couldn't buy that.

Once the downturn comes many people will be forced to sell ,whether they like it or not,i know a few of them.


----------



## walk2dewater

shnaek said:
			
		

> If this is your opinion would you put your money on it? Would you buy now to get that min 25%?


 
No.  It's illiquid and it's a balance of probability statement.  I'm not 100% certain it will happen, just seems more probable than any other outcomes I can think of.

I'm happy to remain in cash and CAN$/CHF bonds (60%), gold shares/bullion (15%), energy/metal shares (20%) and trade my QQQ and Dow puts on the side (5%).


----------



## walk2dewater

thewatcher said:
			
		

> There is no way average prices are going to rise by another 25%,average buyers simply cannot afford them prices.
> .


 
It's not about "average" buyers it's about the marginal buyer.  They set the market price.  There are enough "marginal" fools left to drive prices much higher I'm afraid.


----------



## room305

redo said:
			
		

> It will depend on what area your house is in.  May I ask where abouts it is?



North side, not a great area but close to the city and well served by buses. Small 1 bed but it has a decent sized garden and crappy apartments and duplexes near-by seem to be selling at ridiculous sums.

Problem is I guess, that there may well be an abundance of 1 beds on the market by that time. However, it would need to drop in value by over 30% (based on a conservative current market value), to get less than what I paid for it.


----------



## frescoflyer

Hi,

With reference to the many points that the house prices will be affected when other countries open their doors - this is where Ireland has been very clever.

We opened our doors to the Polish and have had a head start with regards to them getting established and settled (jobs, spouse, children etc). Alot of fellow (for examples sake) Poles will come over as their friends are already here etc etc. Thus the reason for the snowball effect in relation to their presence here in Ireland.

These foundations are being established and will be well and truly cemented by the time the other countries open their doors.

Thus, I believe the impact on Ireland when other countries open their doors will not be as bad a mentioned by some, as the large majority of them will be established and will not be too pushed to move on.

Saying that, if there is a huge economic collapse in Ireland, it's not just the foreign nationals who will be getting out.......... ;-)

Cheers,

Fresco


----------



## delboy159

redo - I'm trading down.  Looking to sell in Dublin now and in the next 6-18 months buy down the country....  Obvioulsy I can be hit by the trade up increases - _If they happen_. 

phoenix_n - My miniumum value is well above what I paid for the property.  In fact the min value I'd sell at is 64% above what I actually paid for the place (not incl stamp, legal, etc.).  Also, the estate agents value is 80% above what I paid for it.  So those "what I paid for it" considerations are not in the equation for me.  
So to answer your question (sorry for rambling) I would not even consider selling it for what I bought it for two and a half years ago.


----------



## conor_mc

room305 said:
			
		

> North side, not a great area but close to the city and well served by buses. Small 1 bed but it has a decent sized garden and crappy apartments and duplexes near-by seem to be selling at ridiculous sums.
> 
> Problem is I guess, that there may well be an abundance of 1 beds on the market by that time. However, it would need to drop in value by over 30% (based on a conservative current market value), to get less than what I paid for it.


 
Your real risk isn't in the value dropping by 30%, it's in simply not being able to find a buyer for months on end and then having to delay your departure until you've sold. If you're definitely leaving the country, I'd be prepared to sell in a hurry any time between now and then should the market start to look a bit wobbly.

It's a bit like your pension, you need to move your funds into something less volatile as D-Day approaches.


----------



## Duplex

It's not like the set of circumstances that are fast approaching have not occurred before.  There will be a stand off, sellers will fish for buyers in a dwindling pool of the same, repossessions will rise, house keys will be dropped through the letter boxes of banks, builders will offer incentives and under the table discounts in order to defend headline prices.  But this early stage will be played out against the backdrop of a global slowdown, and growing evidence of the massive impact of the US housing bubble bust. 

The first area to suffer will be the speculator market, flats, semis and terraces in their price range.  I don't think it will be too difficult to gather evidence of a build up in inventory in this sector.   The speculator sector is critical to what will happen to the wider market. This sector is more volatile more sentiment driven and hence much more fickle.


----------



## Guest126

But our infrastructure is appalling - so the Poles being here early and telling their friends about IRELAND could be a double-edged sword.

Once groups of them go to Spain/Portugal and word gets about that their main motorway is not a CAR PARK, that they have trains and buses that actually WORK, that it is possible to play sports and have other hobbies besides go to the PUB every night I reckon you would see a mass exodus quickly.


----------



## redo

Duplex said:
			
		

> The first area to suffer will be the speculator market, flats, semis and terraces in their price range.  I don't think it will be too difficult to gather evidence of a build up in inventory in this sector.   The speculator sector is critical to what will happen to the wider market. This sector is more volatile more sentiment driven and hence much more fickle.


Agreed.  Just look at myhome.ie.  Investors are already starting to get out of the market.  Most new 1/2 bed apt/duplexs that are being sold, EA's on myhome are marketing them to FTB and.......'investors'.


----------



## kane3000

Hi there


			
				walk2dewater said:
			
		

> What's to stop government giving subsidies/tax breaks/dole to jumbo mortgage holders in danger of being repossessed? Surely that would be a popular voting grabbing, policy?


 
Do you think this scenario could actually happen, that hard working tax dollars would be used to bail out fools who have over-burdened themselves with debt ? That would be outrageous!


----------



## colc1

CapitalCCC said:
			
		

> But our infrastructure is appalling - so the Poles being here early and telling their friends about IRELAND could be a double-edged sword.
> 
> Once groups of them go to Spain/Portugal and word gets about that their main motorway is not a CAR PARK, that they have trains and buses that actually WORK, that it is possible to play sports and have other hobbies besides go to the PUB every night I reckon you would see a mass exodus quickly.


 
Well said Capital


----------



## room305

conor_mc said:
			
		

> Your real risk isn't in the value dropping by 30%, it's in simply not being able to find a buyer for months on end and then having to delay your departure until you've sold. If you're definitely leaving the country, I'd be prepared to sell in a hurry any time between now and then should the market start to look a bit wobbly.
> 
> It's a bit like your pension, you need to move your funds into something less volatile as D-Day approaches.



Cheers conor_mc, I don't think I'd have to be sold-up before I go. When I move I'll be renting (might even be lucky enough to get a job with accomodation included - who knows ;-)) so I won't need the lump sum for anything and I'll be happy to leave it on the market a while if necessary.


----------



## room305

kane3000 said:
			
		

> Do you think this scenario could actually happen, that hard working tax dollars would be used to bail out fools who have over-burdened themselves with debt ? That would be outrageous!



I'm almost certain this will happen. See it coming a mile-off. 

I was stupid enough to purchase Eircom shares (more specifically I was stupid enough to hold onto them) but I was still absolutely appalled that the Fine Gael wanted to reimburse people who lost money on them.


----------



## redo

room305 said:
			
		

> Cheers conor_mc, I don't think I'd have to be sold-up before I go. When I move I'll be renting (might even be lucky enough to get a job with accomodation included - who knows ;-)) so I won't need the lump sum for anything and I'll be happy to leave it on the market a while if necessary.


What about signing the contracts at sale?


----------



## exile

redo said:
			
		

> What about signing the contracts at sale?



My solicitor posted the contracts to me to sign.


----------



## phoenix_n

delboy159 said:
			
		

> phoenix_n - My miniumum value is well above what I paid for the property. In fact the min value I'd sell at is 64% above what I actually paid for the place (not incl stamp, legal, etc.). Also, the estate agents value is 80% above what I paid for it. So those "what I paid for it" considerations are not in the equation for me.
> So to answer your question (sorry for rambling) I would not even consider selling it for what I bought it for two and a half years ago.


 
Well your laughing then. I know the market quite well on the north side and my only qualifications to that market is the newly built prospect hill development which may push up supply.


----------



## Persius

CapitalCCC said:
			
		

> But our infrastructure is appalling - so the Poles being here early and telling their friends about IRELAND could be a double-edged sword.
> 
> Once groups of them go to Spain/Portugal and word gets about that their main motorway is not a CAR PARK, that they have trains and buses that actually WORK, that it is possible to play sports and have other hobbies besides go to the PUB every night I reckon you would see a mass exodus quickly.


 
And wait till Germany and Austria (who both have a history of eastern european immigration) and perhaps also Italy open their borders. It'll be alot easier for the Poles etc to go there and work. As an aside it may even be the kick start that the German economy requires (but that's off topic).

I was in Portugal last year (and had spent time there previously about 8 years ago). I was surprised by the amount of Ukranian immigrants living and working there. No reason why the EU eastern europeans don't start heading over there now if they can. 

And regarding our headstart, I'm not sure how many families we're attracting. Seems to me more like singles or young couples who want to stay a few years, maybe improve their english, and earn a few quid - perhaps for their own house back home. Unlike, say, Germany in the 60s who attracted lots of Turkish immigrants, our immigrants are coming from countries which have just joined the EU and should grow significantly themselves in the medium term (bit like Ireland). So these immigrants could easily head back home in a few years time.


----------



## bearishbull

Poles can work in germany already once they register as a sole trader/self employed person but not sure how tight the rules are for self employment in german, im sure self employed construction workers and IT workers can work in germany and others now and more will as german economy picks up and they realise they work as self employed easily there and rent and live cheaper than in ireland.


----------



## macbri

Poles and other 'low cost' immigrants are not going to feed the housing market.

These immigrants come here to work mostly in minimum wage jobs(tourism,catering,retail etc) save money and send it home.
Unemployment in Poland is 18% and wages are a quarter of Irish wages.

They will support the rental market until employment boom in Ireland is over.As we all know employment boom in Ireland has been driven by housing(construction market) over the last 4 years .

Average price of a house in Ireland is close to $300k euro whilst average earnings between $30k-$40k.

Again,I ask the question-who is going to drive future demand given our housing outputs at historical highs ,housing stock density at historical lows and affordability at historical lows?


----------



## Guest107

macbri said:
			
		

> who is going to drive future demand given our housing outputs at historical highs ,housing stock density at historical lows and affordability at historical lows?



ladder pyramids


----------



## ivuernis

Perhaps a "[broken link removed]" thread is required!


----------



## CelloPoint

macbri said:
			
		

> Poles and other 'low cost' immigrants are not going to feed the housing market.


 Agree 100% with this statement.

I was telling a taxi driver last night about this thread - he told me 'house prices will never go down' and that 'there'll be 1 million immigrants in Ireland by 2015'. I just had to bite my lip (his son had just bought a duplex in the Belfry, Citywest).



			
				macbri said:
			
		

> These immigrants come here to work mostly in minimum wage jobs(tourism,catering,retail etc) save money and send it home.
> Unemployment in Poland is 18% and wages are a quarter of Irish wages.


 You should give the Poles a lot more credit. I work with Polish engineers and they're top notch with excellent English. The university system in Poland is very competitive and challenging unlike in today's Ireland where universities are full of middle-class kids who go to study for the 'experience' (I'm thinking Arts UCD, BE$$ Trinity et. al.)



			
				macbri said:
			
		

> They will support the rental market until employment boom in Ireland is over.As we all know employment boom in Ireland has been driven by housing(construction market) over the last 4 years .


 Internet, email, instant messaging, low-cost flights, etc. implies high mobility - they know where the money is they'll go where the money is. I'll be quite happy to join them soon if things go pear shaped.



			
				macbri said:
			
		

> Average price of a house in Ireland is close to $300k euro whilst average earnings between $30k-$40k.


 Madness.



			
				macbri said:
			
		

> Again,I ask the question-who is going to drive future demand given our housing outputs at historical highs ,housing stock density at historical lows and affordability at historical lows?


 Yup.


----------



## macbri

I am not having a got at the Poles or any immigrant group.

All I am trying to say is that they can earn more in a non skilled job here than a skilled job in their own homeland.

Fair play to them if they can pick up a professional/trade position but I still can't see them being a factor in housing demand


----------



## CelloPoint

macbri said:
			
		

> I am not having a got at the Poles or any immigrant group.
> 
> All I am trying to say is that they can earn more in a non skilled job here than a skilled job in their own homeland.
> 
> Fair play to them if they can pick up a professional/trade position but I still can't see them being a factor in housing demand


Not only is this true for Poles (the fact that you earn more in a non-skilled job), it also applies to young Irish professional people. No wonder Irish boys aren't exerting themselves to go to university - they know where the money is. House building.


----------



## macbri

It reminds me of a job that I had till the mid nineties.

I was working as an accountant for an American blue chip manufacturing company in Ireland earning $15,000 p.a.

A job came up on the shop floor as a warehouse clerk which paid $25k(shift allowance & strong union)

I went for it and got position,there were a lot of similiar guys as me(qualified as fitters,sparks etc) working alongside me on shop floor.

Money talks and  skilled workforce will go into non-skilled jobs if there is a financial incentive to do so.


----------



## macbri

Another factor in this debate is the sky high cost of living in Ireland.

With gas prices going up another 34%,electricity jumping 25%,petrol doubling in the last couple of years,and Ecb rates forecast to incease by 50 % from 2 % base last year-how can people afford their mortgages especially those who have bought in the last 2-3 years?


----------



## Bedsit

*Saturday's property ads in the Irish Times

*I was looking through the property ads in the Irish Times on Saturday (22nd of July) and noticed very few. Usually there are lots of big EAs advertising viewings for houses which will usually go to auction. Names like DNG were conspicuously missing while others such as HOK, SF had very lean offerings.

Is it just the time of the year when everone is away on holidays or a sign of things to come?


----------



## miju

it's the so called quiet season for property BUT with that said it will be interesting to see if the market "picks up" on the back of rising ECB rates , fuel costs etc as well as it usually does 

all i know it there's a perfect FTB / Investor apartment on sale beside me for the last two weeks and it's going for a song (so to speak) and sale agreed sign still hasn't gone up yet , 

the apartment is in citygate which is a very well serviced and central area


----------



## delboy159

I remember 3+ years ago when I was looking for property I was disgusted that there was no activity in July/August in the papers - so it is the norm.  Things did pick up in September, but you never know how the market will react to another rate rise in early Ausust etc.


----------



## thefisherman

when i speak to people now ,they all admit that house prices cannot keep rising 10-15 per cent year after year.now the talk is all about a soft landing.
sentiment has changed, the buy to let market does not make sense when you strip away the yearly house price increases that people seem to think is normal. once that is gone -there will be alot of buy-to -lets coming back onto the market from so called investors who are over extended,which will depress the market even more.
carnage for a year or two, then the smart investors will start buying back into the market-looking for yield from rents while property is cheap.
investing is a business, those who bought in the last few years will soon have to deal with that fact.
if they are not making money on their buy to let now how do they expect to make money in a few years times?
the smart ones are already selling up and locking away their profits while joe public( aka lemmings)are still buying overpriced and badly built houses in overcrowded estates.
the smart ones know that there will be plenty of bargains to be had when the dust settles.

fisherman.

tactics will win a battle-
but strategy wins the war.


----------



## CelloPoint

thefisherman said:
			
		

> ...the smart ones know that there will be plenty of bargains to be had when the dust settles.



Just watch out for the 'dead cat bounce' on the way down!

I was speaking with my aunt who lived through a property crash (Calgary, Canada) during the 80s. She told me about her neighbour who thought she was getting a bargain for $165k having dropped from $300k in the space of 2 months. 6 months later, houses around hers were going for $65.

She also told me that the mortgage companies at that time tried to pull a scam whereby they offered to buy the house off you for $1 in exchange for a 'clean credit rating'. i.e. they would sell you another mortgage at the going rate. 

She told me similar tactics will probably be employed here by lenders when things go pear shaped, but that you're better off declaring yourself bankrupt and moving abroad in the long run.

Anyway, it was really nice talking to her and very interesting to get a perspective from someone who had lived through a crash.


----------



## thefisherman

once apon a time ,in a far away and pleasant land,house prices started to rise, soon everybody was building houses to sell to everybody else as everyone knew that house prices never ever come down, 
then one day, some smart little fellow said - hey, wait a minute ,i don't need to buy a overpriced house-i can rent. rent is cheap.
no problem said the builders to the bright eyed young landlords listening,who were getting nervous. sure wont rent rise to cover the mortgage
no, said the smart kid. why should rents rise when you are building house's as fast as you can-lets drop the prices of house's instead.
no, say the builder.
yes,says the kid.
then,way off in the distance a new voice was heard to say
interest rates are going up.
great ,said the builders,lets just add a few thousand to the price of that small house-sure if you spread the mortgage out over 50 years you wont even notice it.
well,said the kid,i wont notice it-thats right, but my landlord might,and when he wants to raise my rent -i am just going across the road to rent a cheaper place, there's plenty of rental house's available thanks to all the houses you've built.
no problem, said the canny builder, i have my money made-i'm off to spain with my mistress, you can rent cheaply, the only loser here is your landlord for buying an overpriced house that he can't really afford-but on the bright side he has learned the difference between investing and speculating which,maybe, he should have known all along.
see you all.


----------



## Glenbhoy

I certainly don't concur that our eastern european immigrants are going to up sticks and leave, just because Portugal/Spain/Italy etc have opened their doors to them.  Do you all know just how bad salaries are in these countries, additionally, jobs are not easy come by in Spain and Italy.  People won't move because of poor infrastructure, they may move in the future when we experience a down turn, but right now, they can earn substantially more here.


----------



## cardie

macbri said:
			
		

> Another factor in this debate is the sky high cost of living in Ireland.
> 
> With gas prices going up another 34%,electricity jumping 25%,petrol doubling in the last couple of years,and Ecb rates forecast to incease by 50 % from 2 % base last year-how can people afford their mortgages especially those who have bought in the last 2-3 years?


 
We bought our house 2 years ago. The increases spoken about won't bother us for a good while as a) we have a fixed-rate mortgage for the next 3 years and b) we commute to and from Dublin to the sticks, so don't have enough time at home to use up much electricity or gas.


----------



## CelloPoint

Regarding buying off plans: the developer gets to _sell_ of plans thereby transferring much of the risk associated with an increasingly skeptical/volatile market onto the buyer.

With regards 'priority lists', tales of '100s of people queueing', 'booking fees' and all the other fancy marketing-speak you have picked up on, think: game theory. Who will be the real winner from buying in 2006 market conditions? You're playing a game of musical chairs.

I'm a definite bear. You've no experience in dealing with snakey estate agents, developers and lawyers (nor do most FTBs), yet you seem (to me) rather carefree about handing over huge sums of money. I would not recommend going near Irish property in 2006.


----------



## CelloPoint

sorry about above... I copy and pasted the wrong response... (plus, I've lost the response I was going to write...) Not my day!


----------



## CelloPoint

Sorry about above message. I copy/pasted the wrong one! Plus, to make matters worse, I lost the message I was going to write. Damn!


----------



## Persius

Glenbhoy said:
			
		

> I certainly don't concur that our eastern european immigrants are going to up sticks and leave, just because Portugal/Spain/Italy etc have opened their doors to them. Do you all know just how bad salaries are in these countries, additionally, jobs are not easy come by in Spain and Italy. People won't move because of poor infrastructure, they may move in the future when we experience a down turn, but right now, they can earn substantially more here.


 
It's not just about how much they earn, but rather how much they've left over to send/bring home after paying rent and other living expenses. So even if the wages are lower in other countries, if the rents and cost of food/drink is also lower, then they may be actually better off there than here. I don't think we'll see an exodus in the next year or so, but if work starts to dry up here, and word gets out that work is picking up in these other countries, then they're gone.

I saw this myself in Berlin in the mid 90s. For the first few years of the decade there were tonnes of Irish and British builders out there, and making good money too. As the cost of unification took its toll, the construction work started drying up. Meanwhile the Irish and British property booms were starting. It didn't take long for all those builders to head back home, and you'll find none there now.


----------



## yawha

*"Rising interest rates on their own won't make that much difference as people will probably cut back elsewhere instead. The only thing that will force sellers to accept lower prices IMHO is a large increase in unemployment where the seller can no longer afford his monthly repayments. However in this scenario purchasers will probably also be very afraid of losing their jobs and less willing to commit to long term morgages. There's another thread on propsects for the Irish economy, but no-one foresees large rises in unemployment for the next 2 years at least".*

But this is contradictary,If people decide to cut back in other areas then this foregone expenditure will create unemployment.
This particulary applies to Ireland as one of the main drivers in our economy is the consumer,


----------



## autumnleaf

OK, "anecdotal evidence" is an oxymoron, but in the course of a recent pub conversation I was asked if I owned or rented. I said "still renting" and expected the usual stuff about dead money. He said "you're dead right - wait for the crash."

OTOH, a couple I know recently had a change of landlord when their flat was sold. The new landlord wanted to increase the rent, so they moved. He bought the place sight-unseen and even the hugely-increased rent wouldn't cover the mortgage, so he's obviously buying for expected price increase.


----------



## phoenix_n

yawha said:
			
		

> *"Rising interest rates on their own won't make that much difference as people will probably cut back elsewhere instead. The only thing that will force sellers to accept lower prices IMHO is a large increase in unemployment where the seller can no longer afford his monthly repayments. However in this scenario purchasers will probably also be very afraid of losing their jobs and less willing to commit to long term morgages. There's another thread on propsects for the Irish economy, but no-one foresees large rises in unemployment for the next 2 years at least".*


 
Agreed. Except. Dont forget that many a folk has made quite a profit on property and can sell at a reduced price whilst still retaining a profit. Those that can can take the hit will be able to sell faster than those who are in a negative equity situation.

As regards this whole immigration thing. There is one difference between Ireland and other EU countries which should not be overlooked. Its the language. To learn english whilst earning some kind of living is an added bonus and it would take a serious disadvantage to forego learning the 'common denominator language'.


----------



## macbri

I don't agree with above statement that rising interest rates on their own won't make much of a difference.What some people don't realise is that interest rates are coming of a very low base and new/recent 1st time buyers are borrowed to the hilt.

Ecb rates currently are 2.75% which are 3% below US & Australia.

If rates were to rise to US levels,mortgage repayments would increase by 60-80% depending on nature of loan.

This is a massive increase and will reduce housing affordability by same amount-I assume most recent home buyers have average mortgage of $300-$350 pw based on current average house price in mid $350 region.

How can they afford an extra $250-$280 pw by reducing living expenses-there only option would be to borrow short term(credit card,bank overdraft etc) to fund their mortgage.

As we all know,this is a vicious circle.

To illustrate my point,I will assume a single guy 1st time buyer on $80k a week is buying average house price in Dublin($380k per daft website).
This person would clear just over 1000 euro per week.
His mortgage assuming 100% over 35 years at 2.5% per daft would be $1500pm works out at $350 pw.

Essential living expenses(car,petrol,tax,insurance,food,utility bills,clothes etc) conservatively estimated at $400 pw.

This leaves him with just 250 euro per week to cover discretionary expenses(meals out holidays,pub etc)

However each 1% increase in mortgages will reduce his weekly spending power by approx 75 euros so a 3% will have this guy living on the breadline.

Its' pretty scary as how many recent 1st time buyers are on $80k pa.

Unemployment will be the outcome of increase in interest rates due to collapse of housing market(construction lay offs,retail lay offs due to depressed consumer spending etc)
 `
The only thing that can save Irish housing market is reduced housing output,little or no interest rate rises and zero house inflation.


----------



## room305

macbri said:
			
		

> The only thing that can save Irish housing market is reduced housing output,little or no interest rate rises and zero house inflation.



Of which of course, no condition will be met. Builders won't stop building houses while people are buying (why would they?), interest rate rises will be headed north for quite some time to come and zero house price inflation would mean a reduction in real terms so unlikely without precipitating a crash.


----------



## redo

redo said:
			
		

> On myhome.ie there are 123 properties for sale in Lucan.  This is highest figure I've seen in a while.  I doubt many of them are leftovers from the auction season.


There are 141 houses for sale now in Lucan.  That is a serious buildup of stock.  There was around 40 in January.


----------



## macbri

The sad part about all this is that it will be young people who have got on the ladder in the last couple of years who will be effected if a crash happens.

Mortgage brokers,banks etc have to take some of the blame for the excess of easy credit currently being offered.

People get caught up in the hype and only look at what there paying back and not how much they are borrowing.
Everybody likes the feeling of being rich(notional until u sell) and property has been the obvious avenue in the last few years.

Like any bubble,the crash will be very painfull but hopefully the country will recover quickly(ie not like another Japan which took 17 years to recover)


----------



## Bedsit

*Smart Investing Amidst Real Estate Mania*

Below is a link to an interesting article by Robert Kiyosaki of "Rich Dad Poor Dad" fame. Somewhat dated yet still relevant I think.

[broken link removed]


----------



## room305

Bedsit said:
			
		

> *Smart Investing Amidst Real Estate Mania*
> 
> Below is a link to an interesting article by Robert Kiyosaki of "Rich Dad Poor Dad" fame. Somewhat dated yet still relevant I think.
> 
> [broken link removed]



That guy is a buffoon who got rich selling books filled with dubious financial advice.

The major problem with the advice that you should buy when the market drops is that it is spectacularly easy to lose your shirt doing so. I've read similar advice in many publications and it is something I find particularly erroneous. It leads people to believe that if they invest in a market whenever it dips they will pick up bargains and end up making a killing.

It is as hard to call the bottom of a market as it is to call the top. You will not get rich following any of the advice in "rich dad, poor dad" and you need to question why someone with such supposedly fantastic financial acumen needs to flog overpriced books and games to support himself.


----------



## Guest126

He seems pretty smart to me.


----------



## Bedsit

Yes I would have to agree. I was more interested in the quotes that he had in the article from Warren Buffet. It is interesting to note that this guy was very bullish on property in the past and now he is predicting a crash. If I remember correctly his main claim to fame was renting out old comics to his peers as child. After that he rode the property boom in Hawaii and wrote a couple of books that caught the public imagination and made a killing.



			
				room305 said:
			
		

> That guy is a buffoon who got rich selling books filled with dubious financial advice.
> 
> The major problem with the advice that you should buy when the market drops is that it is spectacularly easy to lose your shirt doing so. I've read similar advice in many publications and it is something I find particularly erroneous. It leads people to believe that if they invest in a market whenever it dips they will pick up bargains and end up making a killing.
> 
> It is as hard to call the bottom of a market as it is to call the top. You will not get rich following any of the advice in "rich dad, poor dad" and you need to question why someone with such supposedly fantastic financial acumen needs to flog overpriced books and games to support himself.


----------



## Guest126

People are allowed go from bullish to bearish about an asset class - I would imagine that is what makes an investor successful...if the person can move from being a bull to a bear and back to being a bull at the right time.

I am not saying it is easy, but to imply that if one was bullish on as asset class before means that one should be bullish about the same asset class now would seem to me to miss the whole point of investing.


----------



## room305

I don't see why people would listen to the financial advice of someone who only became rich by writing books offering financial advice. How is he qualified to dispense this advice?



> Take market crashes. I love them because that's the best time to buy -- finding true value is a lot easier during such periods.



I'll say it again - predicting a market bottom is not for the faint hearted. Many an investor has lost huge amounts of money jumping into a "dead cat bounce".

Buying into a market simply because it has fallen is just as idiotic as buying into a market simply because it has risen.


----------



## Guest126

He says there are more bargains to be found at such a time - it makes sense to me.

The guy never ever advocates buying stock without researching it - that (in any market) is idiotic.


----------



## phoenix_n

Ok who here can 'say' on record that when the selling season starts again in September that a 'Soft landing' will be called. This thread will i think survive that long and we can then see if our analysis (or wishful thinking) came to fruit.

I am putting my name in.


----------



## CelloPoint

We're I a betting man (which I am), I would agree that the problems will start once the builders and estate agents come back from their spanish villas and decide that enough is enough.

I'd say the probability of a crash is highest this September/October, and if not this Autumn, next Spring with a general election imminent . All other possibilities are rank outsiders AFAIK (bar the possibility that it will occur any over the next couple of weeks).


----------



## room305

CapitalCCC said:
			
		

> He says there are more bargains to be found at such a time - it makes sense to me.
> 
> The guy never ever advocates buying stock without researching it - that (in any market) is idiotic.



Yes but a bargain is only a bargain if someone is willing to pay more to purchase that item (even if that someone is you).

Sure, when the market crashes there will be plenty of bargains around because the nature of markets is that they overshoot and then overcorrect. So if you purchase near the top of the market you will pay too much but if you purchase near the bottom you will get a fantastic bargain.

But how can you call the bottom of the market? How do you know the period of correction has completed? If the housing market dips 10% next year will you swoop in to pick up a "bargain"? It may fall 10% every year for the next ten years. Or it may not, it may rise 20% the following year and you'll find you have actually purchased a bargain.

Purchasing because the market has fallen is as idiotic as purchasing because the market has risen. If Robert Kiyosaki was such a great investor he wouldn't have needed to start peddling books and games to make money.


----------



## Guest126

The article said there were more bargains around.
It never said buy stock because the price of stock has fallen - the article is not calling a top or a bottom, it is saying that there are bargains to be had when bubbles burst and it is bang on the money.


----------



## SteelBlue05

room305 said:
			
		

> Yes but a bargain is only a bargain if someone is willing to pay more to purchase that item (even if that someone is you).
> 
> Sure, when the market crashes there will be plenty of bargains around because the nature of markets is that they overshoot and then overcorrect. So if you purchase near the top of the market you will pay too much but if you purchase near the bottom you will get a fantastic bargain.
> 
> But how can you call the bottom of the market? How do you know the period of correction has completed? If the housing market dips 10% next year will you swoop in to pick up a "bargain"? It may fall 10% every year for the next ten years. Or it may not, it may rise 20% the following year and you'll find you have actually purchased a bargain.
> 
> Purchasing because the market has fallen is as idiotic as purchasing because the market has risen. If Robert Kiyosaki was such a great investor he wouldn't have needed to start peddling books and games to make money.


 
If prices come down to the point where rents will offer a decent yield on the mortgage required to purchase the property then I'll be buying a second property! We will be needing about a 40% drop in prices though for that to happen.


----------



## room305

CelloPoint said:
			
		

> We're I a betting man (which I am), I would agree that the problems will start once the builders and estate agents come back from their spanish villas and decide that enough is enough.
> 
> I'd say the probability of a crash is highest this September/October, and if not this Autumn, next Spring with a general election imminent . All other possibilities are rank outsiders AFAIK (bar the possibility that it will occur any over the next couple of weeks).



I think it's years away yet. We are seeing a slowdown at the moment but it as likely to be seasonal as anything else. When the crash occurs we won't even know it for several months afterwards.

The experience in other countries is that builders and developers will keep going full tilt until the veyr end. In fact, the prospect of a slowdown probably accelerates their activity because builders are keen to develop and sell before the inevitable occurs.


----------



## room305

CapitalCCC said:
			
		

> The article said there were more bargains around.
> It never said buy stock because the price of stock has fallen - the article is not calling a top or a bottom, it is saying that there are bargains to be had when bubbles burst and it is bang on the money.



Then it is more a platitude than sound financial advice. 

Of course there are bargains to be had when a market is oversold. Some of Warren Buffett's best investments occured in the aftermath of the 1987 stock market crash. I'm sure some brave investors made a killing on oversold stock following the dotcom collapse.

However, this is not something that should necessarily be advocated to the ordinary investor. Especially not in housing, due to the fundamental illiquidity of the market. 

Feel free to try and snap up an investment bargain when the Irish housing market corrects but I bet you'll regret the decision.


----------



## SteelBlue05

For all these people predicting that a crash will happen in x months, or not all, etc, then I would suggest reading a book called Ubiquity - Why Catastrophes Happen by Mark Buchanan. 

His arguement (and there is a chapter on financial markets which may be similar to the property market) is that these systems are always in a critical point, where any event can trigger a small or huge response. This is regardless of what the event was, because the system (in this case the market) is complex with many interdependencies then it is impossible to predict what will happen in response to an event.

I cant really explain the whole thing but I am happy enough that we cannot predict or time the markets. So relax everybody, what will be will be!


----------



## redo

A crash or (price correction as the vested interests will call it) can only really occur when interest rates go higher.  When base rates are around 4-5%, prices should fall back to 2000-2001 levels.  250k for 3 bed semi in West Dublin.  I would imagine the prices in the trade up market will only be marginally effected.  If a crash were to happen this coming season, October 13th 2006 would seem apt.


----------



## SteelBlue05

redo said:
			
		

> A crash or (price correction as the vested interests will call it) can only really occur when interest rates go higher. When base rates are around 4-5%, prices should fall back to 2000-2001 levels. 250k for 3 bed semi in West Dublin. I would imagine the prices in the trade up market will only be marginally effected. If a crash were to happen this comming season, October 13th 2006 would seem apt.


 
prices for a 3 bed semi in west dublin to go back to 250k? Sorry never going to happen. A 45% drop in prices, you really believe this?


----------



## room305

SteelBlue05 said:
			
		

> If prices come down to the point where rents will offer a decent yield on the mortgage required to purchase the property then I'll be buying a second property! We will be needing about a 40% drop in prices though for that to happen.



The market will probably remain depressed for years after the crash. However, if rental income is providing a reasonable return on your capital then you may be happy with that.


----------



## Howitzer

SteelBlue05 said:
			
		

> prices for a 3 bed semi in west dublin to go back to 250k? Sorry never going to happen. A 45% drop in prices, you really believe this?


 
Why not? How much does a comparable house cost in Helsinki, Manchester, Stuttgart?


----------



## CelloPoint

Howitzer said:
			
		

> Why not? How much does a comparable house cost in Helsinki, Manchester, Stuttgart?



I would have to agree. Worth pointing out that AFAIK, Helsinki, Manchester and Stuttgart have a lot more going for them (in terms of good planning, transport, economic prospects) than Dublin does at present.


----------



## room305

I think a return to 2001 levels is likely alright, so how far the market falls depends on how far it continues to rise.

Of course it might not fall at all in nominal terms but simply stagnate with a long drawn out correction in real terms (similar to what occured here in eighties).


----------



## SteelBlue05

Howitzer said:
			
		

> Why not? How much does a comparable house cost in Helsinki, Manchester, Stuttgart?


 
I dont know, can you do the research? 
How do our salaries compare to those cities? 
Demand for property? 
Population profiles? 
Peoples attitudes to buying and renting? 
Incentives offered to FTB's? 
Incentives offerred to Investors? 
Emigration? 
GDP?

If you really know what you are talking about then you will realise there are a multitude of interacting factors that are very difficult to understand and more importantly predict. 

This is all just tiresome speculation.


----------



## Glenbhoy

> I would have to agree. Worth pointing out that AFAIK, Helsinki, Manchester and Stuttgart have a lot more going for them (in terms of good planning, transport, economic prospects) than Dublin does at present.


Well, want to enlighten us?


----------



## SteelBlue05

CelloPoint said:
			
		

> I would have to agree. Worth pointing out that AFAIK, Helsinki, Manchester and Stuttgart have a lot more going for them (in terms of good planning, transport, economic prospects) than Dublin does at present.


 
More sweeping statements with no substance.


----------



## Guest126

I am currently buying a place in Paris with a net yield approx double the net yield in Cork.

That is not speculation.

I do not see what is so great about Cork that property here should command such a low yield, perhaps somebody could explain, is it the €3 take away coffee perhaps?


----------



## bearishbull

SteelBlue05 said:
			
		

> I dont know, can you do the research?
> How do our salaries compare to those cities?
> Demand for property?
> Population profiles?
> Peoples attitudes to buying and renting?
> Incentives offered to FTB's?
> Incentives offerred to Investors?
> Emigration?
> GDP?
> 
> If you really know what you are talking about then you will realise there are a multitude of interacting factors that are very difficult to understand and more importantly predict.
> 
> This is all just tiresome speculation.


By all measures Dublin property is vastly overpriced,current high prices are a temorary phenomenon, i could elaborate further but this has been done to death on these threads over the last year.


----------



## walk2dewater

My sentiment has turned ever so slightly bullish on property in the last little while. There's a serious chance we're heading for a massive spike in prices. The Sheeple are going to rush to BUY NOW before var rates make property "unaffordable"; higher ECB rate means can't borrow enough, can't lock-in a fixed rate etc.

I say property price go 10%+ 2nd half of 2006.

**************

of course, many many jumbo mortgage holders are financial equivalents of the "walking dead"

*********************

Meanwhile I'm making an absolute killing on my sterling puts... ECB and BoE meet Aug 3...


----------



## room305

I get the feeling there is going to be another spike too. I really couldn't figure out what the REAs were doing, almost calling a market top. Then I thought about it and applied the old maxim - whatever a REA is saying, they're saying it to sell more houses.

So I'm expecting much talk about soft landings and reasonable capital appreciation for the next month or two to assuage investors. Meanwhile, FTBs and trader-uppers hold off hoping against hope that prices will come down to reasonable levels.

Instead what happens? Prices continue to rise. Even if developers have to offer ridiculous incentives, the great Irish property train will rumble on inevitably. FTBs who held off will realise they have been duped once again by "dem der economists" who don't understand that Irish property market is "different". In a mad rush they pile in and prices spike crazily.

I agree with W2DW that there is a "race against rates" element here as well. Get in at whatever cost then fix for a year or two is becoming the standard motto. Like high oil prices people are acting as though any rate increases will be a temporary thing, with fixing rates almost a "get out of jail" card.

I was thinking of selling but now I shall probably hold off for a year and see what happens.


----------



## ivuernis

walk2dewater said:
			
		

> My sentiment has turned ever so slightly bullish on property in the last little while. There's a serious chance we're heading for a massive spike in prices.


 
Is this this the scenario that was discussed here before where at the peak 
or just before even the last bears begin to doubt themselves and change 
their minds


----------



## walk2dewater

ivuernis said:
			
		

> Is this this the scenario that was discussed here before where at the peak
> or just before even the last bears begin to doubt themselves and change
> their minds


 
Hey, I'm the grand-daddy of bears around here!!!  But I move with the facts.  And facts say, no inventory build up, and no seismic shift in public sentiment.  The "doom-mongers" will have egg on their faces one more time.....I say, current worries will be replaced with massive outpouring of BUYING.  We're "going japanese", hang on tight....

Alas, there's several other juicy fish to fry....


----------



## Guest107

SteelBlue05 said:
			
		

> If prices come down to the point where rents will offer a decent yield on the mortgage required to purchase the property then I'll be buying a second property! We will be needing about a 40% drop in prices though for that to happen.



about that


----------



## room305

ivuernis said:
			
		

> Is this this the scenario that was discussed here before where at the peak
> or just before even the last bears begin to doubt themselves and change
> their minds


When I posted that story about Isaac Newton and the South Seas company bubble, the reply was:



			
				Glenbhoy said:
			
		

> So basically when W2DW announces that he has just bought, it's time to get out??


----------



## miju

walk2dewater said:
			
		

> .I say, current worries will be replaced with massive outpouring of BUYING.  We're "going japanese", hang on tight....


going japenese sure This post will be deleted if not edited immediately i think we're practically a colony at this stage it's gone completely out of control.

interesting what you say about no obvious change in sentiment i personally beg to differ as the original poll on bullish -vs- bearish that started this thread and this second poll on  what direction prices will go (as well as the severity of rises / falls


----------



## Duplex

I guess its impossible to read a market riven by mania.  What rational person would have thought that tens of thousands of people would buy investment properties this year when; yields were infinitesimal, rents static, housing output at record levels and interest rates started rising from historic lows?

The only thing that I have reached absolute certainty about is that its a bubble.  And bubbles always pop.


----------



## thewatcher

Duplex said:
			
		

> I guess its impossible to read a market riven by mania. What rational person would have thought that tens of thousands of people would buy investment properties this year when; yields were infinitesimal, rents static, housing output at record levels and interest rates started rising from historic lows?
> 
> The only thing that I have reached absolute certainty about is that its a bubble. And bubbles always pop.


 
I would agree it's definitely a bubble,as for the other 2 boys saying there could be another possible spike before the crash,i think the government has finally woken up and while nothing will be said in public the screws are about to be put on the banks.

As for inventorys not building up,i have been kind of looking for a property for the last 3 or 4 months and in the supposed slowdown period i have seen inventorys double in some area's !.


----------



## ivuernis

walk2dewater said:
			
		

> current worries will be replaced with massive outpouring of BUYING. We're "going japanese", hang on tight....


 
I have a feeling too that current bearish sentiment could die come September and buyers will get back on the train for another while but I can't see where prices can rise by much more than max 10% in the next 12 months.


----------



## thejuggler

redo said:
			
		

> A crash or (price correction as the vested interests will call it) can only really occur when interest rates go higher. When base rates are around 4-5%, prices should fall back to 2000-2001 levels. 250k for 3 bed semi in West Dublin. I would imagine the prices in the trade up market will only be marginally effected.


 
Do you mean that regardless of a crash the cost of trading up (e.g the price difference between a 3 bed semi and a 4 bed detached) will remain the same?  I thought that the gap would narrow as oveall prices fall.

I'm thinking of trading up myself but don't know whether its better to move now or wait until the crash happens.  Perhaps it will be impossible to sell a 3 bed semi when the crash happens.


----------



## SteelBlue05

thejuggler said:
			
		

> Do you mean that regardless of a crash the cost of trading up (e.g the price difference between a 3 bed semi and a 4 bed detached) will remain the same? I thought that the gap would narrow as oveall prices fall.
> 
> I'm thinking of trading up myself but don't know whether its better to move now or wait until the crash happens. Perhaps it will be impossible to sell a 3 bed semi when the crash happens.


 
I think you need to take all these ranting comments with a big pince of salt. The point is no one knows what will happen.


----------



## walk2dewater

SteelBlue05 said:
			
		

> The point is no one knows what will happen.


 
The point is some of us are better at considering and assigning probablities to future outcomes than others..... and some of us don’t even know what the preceding means….


----------



## Calina

thejuggler said:
			
		

> Do you mean that regardless of a crash the cost of trading up (e.g the price difference between a 3 bed semi and a 4 bed detached) will remain the same?  I thought that the gap would narrow as oveall prices fall.
> 
> I'm thinking of trading up myself but don't know whether its better to move now or wait until the crash happens.  Perhaps it will be impossible to sell a 3 bed semi when the crash happens.



It depends on where the house is. The problem is not, I think, that it will be impossible to sell a three bedroomed semi (assuming we're talking house and not duplex apartment that is) but that it may be impossible to sell at the price you want. 

That's going to be the issue for a lot of sellers - they will find it difficult to compute that if they want to sell stuff in a falling, dying market, then they will have to drop their prices.


----------



## SteelBlue05

walk2dewater said:
			
		

> The point is some of us are better at considering and assigning probablities to future outcomes than others..... and some of us don’t even know what the preceding means….


 
Its like listening to drunk conversations in a pub. Are you not the person projecting interest rates of 8% by end of 2007?


----------



## CelloPoint

SteelBlue05 said:
			
		

> Its like listening to drunk conversations in a pub. Are you not the person projecting interest rates of 8% by end of 2007?



But you're not in a pub and this is indeed a deadly serious topic. The fact is that the more people there are out there having this conversation (average joe having a pub chat or not), the worse the sentiment gets, the more the market gets spooked, the sooner the effect on the property market.


----------



## shnaek

In another post someone mentioned the possible male/female divide on this issue. To me there seems to be a Dublin/rest-of-country divide on this issue. As far as I can see my Dub friends are bullish and the rest are bearish. Does this reflect anyone elses experience here?


----------



## redo

thejuggler said:
			
		

> Do you mean that regardless of a crash the cost of trading up (e.g the price difference between a 3 bed semi and a 4 bed detached) will remain the same?  I thought that the gap would narrow as oveall prices fall.
> 
> I'm thinking of trading up myself but don't know whether its better to move now or wait until the crash happens.  Perhaps it will be impossible to sell a 3 bed semi when the crash happens.


 No, the gap is widening already.  Second hand properties rose over 30% (annualised) in the first quater of this year.

If you are only "thinking" about trading up now, it may be too late.  Get your skates on.


----------



## SteelBlue05

CelloPoint said:
			
		

> But you're not in a pub and this is indeed a deadly serious topic. .


 
Yes but does anyone really know what they are talking about? You cannot predict things like this and while its ok to discuss the topic this thread is becoming farcical with all the throw away statements that are not based on any reasoning, and other statements where people most have a crystal ball.


----------



## Calina

shnaek said:
			
		

> In another post someone mentioned the possible male/female divide on this issue. To me there seems to be a Dublin/rest-of-country divide on this issue. As far as I can see my Dub friends are bullish and the rest are bearish. Does this reflect anyone elses experience here?


I took the view (in that other thread) that it's worth looking at how open to financial risk people are. Prices in Dublin are, in the main, significantly higher than they are in the rest of the country, hence, on average, people are outlaying more money. I'll translate that - yes, it bears more relation to my reality than a split down male/female lines. 

That being said, I've seen more than a few people suggest that Dublin will not be as badly impacted by a property correction because Dublin is short of property, or words to that effect. I'm not altogether convinced by that. I get the impression that prices in Dublin rose further and faster than the rest of the country. I think they have further to fall when or if the time comes. 

That being said, someone is going to pop up and talk about demographics and profiles of available properties, so I will qualify that by adding at most risk is the vast swathes of totally inappropriate and badly designed one and two bedroomed apartments. But I would be stunned if the rest of the property types in the city avoided some sort of collateral damage.


----------



## redo

SteelBlue05 said:
			
		

> Yes but does anyone really know what they are talking about? You cannot predict things like this and while its ok to discuss the topic this thread is becoming farcical with all the throw away statements that are not based on any reasoning, and other statements where people most have a crystal ball.


Well, I am only giving my opinion.  And yes some of it needs a pinch of salt to digest.  The market may be heading for a big downturn.  FTB are getting priced out of the market.  When these guys can't get on the ladder, the whole thing grinds to a halt.  When 'investors' see (on a quarterly basis, retrospectively) that the expect capital appreciation does not materalise, this will effect the "fundamentals" you hear economists talk about.  These figures could be released at the start of the next selling season in August.  However they will provide a caveat, saying that it was an unusally slow off season.




*".......Investments may rise as well as fall"*


----------



## yawha

CapitalCCC said:
			
		

> People are allowed go from bullish to bearish about an asset class - I would imagine that is what makes an investor successful...if the person can move from being a bull to a bear and back to being a bull at the right time.
> 
> I am not saying it is easy, but to imply that if one was bullish on as asset class before means that one should be bullish about the same asset class now would seem to me to miss the whole point of investing.


 
Then those books which are outdated should be pulled off the shelves,but the're not,this guy sells books _*now *_which applied to markets 10 years ago.


----------



## Guest126

Totally untrue - he talks about puts and calls as well as property, his books do not say go buy property.

His books say "buy assets" do not waste money on luxuries.
Good advice I think, particularly nowadays when people are so keen to throw money around.


----------



## Duplex

Here's my reasoning.

Ten year Euro bond rates are at 4%, I calculate an equated yield on Irish residential property at 3-4% in excess of the Ten Year Bond to reflect sector risk. The risk weighting is my take on factors such as 

1. Falling real rental incomes

2. Substantial supply of empty properties 

3. Market reliance on 'transient tenant' sector

4. Serviced land supply equivalent to 350,000 new units

5. Unsustainable rate of debt accumulation.

5. Irish economy's reliance on American MNC for export earnings.

6. The probable impact of American trade and current account deficits on the American economy and the dollar.

7. Rising Euro interest rates.

8. Heavy Irish exposure to risky overseas property bubbles.

9. Poor financial literacy amongst many market participants.

10. The deflationary impact globalisation will have on incomes growth in western economies in coming decades.

11. Mortgage fraud and unethical business practices in the lending and property sectors.


So my considered take on the extent of over valuation for Irish housing is in the region of 50%. Worth noting that prices have fallen in Tokyo by 70% over the past decade and a half, by 50% in many other bubble markets in the past.


----------



## walk2dewater

SteelBlue05 said:
			
		

> this thread is becoming farcical with all the throw away statements that are not based on any reasoning,.


 
There is a lot of reasoning going on here. [and there is a paucity of reasoning in Ireland in general IMHO]. If you can't stand the heat....


----------



## walk2dewater

Duplex said:
			
		

> 9. Poor financial literacy amongst many market participants.
> 
> .


 
My vote for the numero uno problemo.  No one seems to know how, or for that matter WANT, to think for themselves.

I believe Duplex you coined it "Ah-sureism"


----------



## Duplex

walk2dewater said:
			
		

> My vote for the numero uno problemo. No one seems to know how, or for that matter WANT, to think for themselves.
> 
> I believe Duplex you coined it "Ah-sureism"


 
Bubble psychology as can be witnessed in other speculative markets in Bulgaria, Spain, Florida, Dubai, Cyprus, Hungary etc.  where many Irish investors are embroiled.  These are low rent, high void, intangible yield places with p poor resale markets, Bubble markets, reliant on an endless supply of greater fools.


----------



## Contrarian

When everyone thinks the same, then there is'nt alot of thinking going on....


----------



## room305

SteelBlue05 said:
			
		

> Yes but does anyone really know what they are talking about? You cannot predict things like this and while its ok to discuss the topic this thread is becoming farcical with all the throw away statements that are not based on any reasoning, and other statements where people most have a crystal ball.



We are not discussing a rational market or people behaving in any kind of a logical manner, so how else are supposed to treat the topic?

In a bubble market nobody can predict _when_ the crash will occur, just that it _will_ occur.

Bubbles always last longer than people expect and that's why people get sucked in, they begin to think that maybe it isn't a bubble after all.


----------



## macbri

Agree with u Duplex and the greater the bubble,the harder the fall

A couple of factors u missed on your list

1-High cost of living in Ireland
2-Average earnings between $30-$40k multiple of 8-9 on average house prices
3-New housing stock projected at 100k for 2006
4-Vast majority of inward migration from new EU accession countries
5-Household size reduced from 3.1 in 2002 to 2.5 now

And the argument for increase prices is what???


----------



## room305

Duplex said:
			
		

> 9. Poor financial literacy amongst many market participants.



I've already mentioned here before the frightening story of a friend who believed that an IO mortgage meant you effectively paid the interest for the loan and then the capital. So he was looking forward to the IO component of his mortgage running out so that IR rises would no longer be a problem!

In general, people seem quite ignorant of even what their current interest rates are let alone what way they are headed.

A 50% correction in real terms seems about right to me.

However, I think some people here are mistakenly of the impression that there will be a crash one day which in turn presents a fantastic smash-and-grab buying opportunity for wily investors.

Be aware, when this thing goes south it will be an incredibly long, painful, drawn out affair.


----------



## CelloPoint

Duplex said:
			
		

> Here's my reasoning.
> 
> Ten year Euro bond rates are at 4%, I calculate an equated yield on Irish residential property at 3-4% in excess of the Ten Year Bond to reflect sector risk. The risk weighting is my take on factors such as
> 
> 1. Falling real rental incomes
> 
> 2. Substantial supply of empty properties
> 
> 3. Market reliance on 'transient tenant' sector
> 
> 4. Serviced land supply equivalent to 350,000 new units
> 
> 5. Unsustainable rate of debt accumulation.
> 
> 5. Irish economy's reliance on American MNC for export earnings.
> 
> 6. The probable impact of American trade and current account deficits on the American economy and the dollar.
> 
> 7. Rising Euro interest rates.
> 
> 8. Heavy Irish exposure to risky overseas property bubbles.
> 
> 9. Poor financial literacy amongst many market participants.
> 
> 10. The deflationary impact globalisation will have on incomes growth in western economies in coming decades.
> 
> 11. Mortgage fraud and unethical business practices in the lending and property sectors.
> 
> 
> So my considered take on the extent of over valuation for Irish housing is in the region of 50%. Worth noting that prices have fallen in Tokyo by 70% over the past decade and a half, by 50% in many other bubble markets in the past.



Excellent analysis of the current situation.

In response to SteelBlue05, 



			
				SteelBlue05 said:
			
		

> Yes but does anyone really know what they are talking about? You cannot predict things like this and while its ok to discuss the topic this thread is becoming farcical with all the throw away statements that are not based on any reasoning, and other statements where people most have a crystal ball.



I would say, that nobody is on here being absolutist about the future (it's impossible to be). But, as Duplex points out, there is a thing called _risk_ which balances any potential benefits in every investment scenario. They are listed pretty well, in order of likelyhood, above. The risk associated with Irish property is massive when you compare the guaranteed rate of return associated with bank deposits (currently 5% with AIB). There are even larger rates at other banks with large sums of money (i.e. house price sums of money).

31,500 hits on this thread alone gives you some indication as to how nervous people are becoming. Well done Miju for starting such an gripping topic! I would hardly describe this thread as being 'farcical'. It would farcical not to take action to counteract the imminent market threat.


----------



## yawha

CapitalCCC said:
			
		

> Totally untrue - he talks about puts and calls as well as property, his books do not say go buy property.
> 
> His books say "buy assets" do not waste money on luxuries.
> Good advice I think, particularly nowadays when people are so keen to throw money around.


 
Investing, is all about timing,buy low sell high etc,no where does he give hints or insights on what to look out for or signals which show which way any market is going.
Anyone who reads the market reports would have known many parts of the US property market was in decline for the last year,hardly insightful information. 
I bought one of his books about a year ago,one of my worst investments ever.


----------



## kane3000

On the point of financial literacy, I remember back in 1996, a woman at work saying she had just bought her first house and she was delighted, however she had heard that many people were predicting that the price of property would rise dramatically in Ireland, she was worried that her mortgage was going to go up with the increase in value of her house!!!

Basic finance should be mandatory in Secondary schools - it is the most important topic that effects absolutely everyone.

I think that property prices will keep going up until everyone has had a chance to cash in their profits - then there will be no fools..property prices will then gently drop down so everyone who cashed in can buy a nicer, bigger house at a cheaper price....because if that doesnt happen it will be so unfair.


----------



## Calina

kane3000 said:
			
		

> I think that property will prices will keep going up until everyone has had a chance to cash in their profits - then there will be no fools..property prices will then gently drop down so everyone who cashed in can buy a nicer, bigger house at a cheaper price....because if that doesnt happen it will be so unfair.



my head hurts please make the pain go away


----------



## SteelBlue05

kane3000 said:
			
		

> I think that property will prices will keep going up until everyone has had a chance to cash in their profits - then there will be no fools..property prices will then gently drop down so everyone who cashed in can buy a nicer, bigger house at a cheaper price....because if that doesnt happen it will be so unfair.


 
Obviously this is a joke?


----------



## kane3000

Sarcasm, but how many people will be heard to laud the "so unfair" type statement after 'de correction'


----------



## Guest126

The purpose of the book is to teach people to buy assets not liabilities, it is a philosophical thing.

It is not a stock-pickers book - subscribe to the FT if you want stock tips.


----------



## room305

yawha said:
			
		

> I bought one of his books about a year ago,one of my worst investments ever.



I concur. Never bought his book but had it pressed on me by a friend who thought it was brilliant and knew I had an interest in "all that financial stuff". I'm not being patronising when I say the advice is idiotic, essentially just pointess platitudes and homespun philosophies dressed up as financial wisdom. When the market is low, look out for bargains, don't spend more money than you earn etc.

They are plenty of better books to dish out financial advice to people who wish to learn more. In "Rich Dad, Poor Dad" there was stuff that was just completely erroneous but I think it has all been covered in another thread on this board. Suffice to say, you won't get rich following his advice and could potentially lose a lot of money.

I've mentioned it before but I think it's worth repeating ad nauseum. There will be no easy profits to be had when the Irish property market crashes.


----------



## walk2dewater

yawha said:
			
		

> Investing, is all about timing,buy low sell high etc,no where does he give hints or insights on what to look out for or signals which show which way any market is going.
> Anyone who reads the market reports would have known many parts of the US property market was in decline for the last year,hardly insightful information.
> I bought one of his books about a year ago,one of my worst investments ever.


 
Investing is first and foremost about capital preservation, second "managing your trades".  These two things explain why the wealthy stay that way.

Sermon over


----------



## Borderlord

Surly the news last week that electricity prices are due to rise by 34 pc and ESB 20 pc circa should have a major impact on peoples thinking as it will take a lot of money out of peoples pockets every year.  Is it not like a 1/4 to 1/2 pc rate rise ??


----------



## soma

CapitalCCC said:
			
		

> The purpose of the book is to teach people to buy assets not liabilities, it is a philosophical thing.


Totally agree - I think it's a good book about a healthy *mindset* to have.


----------



## Glenbhoy

> however she had heard that many people were predicting that the price of property would rise dramatically in Ireland


Were there many forecasters?


> Surly the news last week that electricity prices are due to rise by 34 pc and ESB 20 pc circa should have a major impact on peoples thinking as it will take a lot of money out of peoples pockets every year. Is it not like a 1/4 to 1/2 pc rate rise ??


Doubtful, for me personally it means approx €350 extra p.a. whereas a 0.25% interest rate increase costs me circa €720 p.a


----------



## SteelBlue05

Glenbhoy said:
			
		

> Doubtful, for me personally it means approx €350 extra p.a. 0.25% interest rate increase costs me circa €720 p.a


 
Ouch, thats like taking a 1k salary cut with each .25% increase!


----------



## CelloPoint

SteelBlue05 said:
			
		

> Ouch, thats like taking a 1k salary cut with each .25% increase!



Ouch indeed...


----------



## soma

room305 said:
			
		

> the advice is idiotic, essentially just pointess platitudes
> .
> .
> don't spend more money than you earn etc.


I do not want to turn this into a RD/PD thread. But do you have any idea what percentage of the population fail to grasp basic concepts such as this..? If Joe Soap could learn "an asset produces positive cashflow" and "don't spend more money than you earn" this economy wouldn't be heading for half the crash that I personally believe it is.

If the absolutely-financially-clueless people I encounter every day could  actually learn these two concepts alone, then the few quid they spend on whatever book/CD/website/lecture they learned it from, would be well worth it. 

Certainly alot cheaper than finding out that that 3-bed in Cavan
 you've been feeding cash to break-even for 2 years was a bad investment.


----------



## room305

soma said:
			
		

> I do not want to turn this into a RD/PD thread.



Agreed, so I will try keep this somewhat on topic. There are better books than RD/PD and ones filled with less erroneous information. I mean, he thinks Amway is a fantastic organisation (he would - they plugged his book for him) and a legitimate business model. In reality, it's not far removed from pyramid selling. A lot of the anecdotes don't really seem plausible, in fact the whole setup doesn't and I am inclined to think it's all made-up and he only ever made money from selling shoddy books.

He also promotes the idea that education is worthless if you want to make money. Statistically this has been proven to be untrue.

However, to keep things on topic. His advice in relation to property is dubious. He promotes the idea that in a housing market crash you can swoop in, snap up a couple of bargain properties, thereby making a killing.

In reality, even if you are lucky enough to call the market bottom, negative sentiment might leave the value of those properties stagnating for many years. Hardly an efficient way to spend your capital.

Wealthy people (of which I am not one) tend to be as concerned with wealth preservation as they are with wealth creation. However, I doubt any of them ever got rich or stayed rich by investing money that should be spent on bills and taxes.

I try to work on an 80/20 rule. Try to always save or invest 20% of your income. There - you can have that one for free.


----------



## Glenbhoy

> Ouch, thats like taking a 1k salary cut with each .25% increase!


True, though luckily herself benefits from all those benchmarking deals, now if only I could get her to contribute to the mortgage!!
To be honest, the increases haven't impacted us at all yet, and save for a loss of employment the increases will not affect us, additionally, we haven't yet reached the level where renting is cheaper for us (edging closer though).  
However there must be many couples out there who are starting to find it getting a bit tight, the average interest rate impact of a 0.25% increase is €50 per month (on a 330K, 30yr), hence with the 1.25% by year end, the average increase will be approx €3000 p.a or a €4000 pay cut!!  Bear in mind that the average is probably not particularly relevant here anyway, as newer buyers will be impacted significantly more than the average and vice versa.


----------



## Bedsit

*Credit Cards in Ireland

*One thing that might be useful to keep an eye on in the future is the number of credit cards in the Irish market. If there is a squeeze in personal finances then I would suspect that this figure will go up and many people will take out new credit cards and transfer their existing balance to the new card for one of those low introductory offers.

Anyone know what the figure is at the present time?


----------



## shnaek

Glenbhoy said:
			
		

> True, though luckily herself benefits from all those benchmarking deals, now if only I could get her to contribute to the mortgage!!



All you have to do is inform her that if she isn't contributing you would be entitled to a far greater share of the house if things were ever to bomb between you. Though the arguement following such an announcement would probably negate the gain


----------



## SteelBlue05

Glenbhoy said:
			
		

> To be honest, the increases haven't impacted us at all yet, and save for a loss of employment the increases will not affect us


 
Well for the fact that you seem to be well able to afford the increases doesnt mean they havn't impacted you, or are you on a fixed rate or something?


----------



## CelloPoint

32,500 hits in 3 weeks! No wonder the site crashed... Does the interest point to another imminent crash?


----------



## Glenbhoy

> All you have to do is inform her that if she isn't contributing you would be entitled to a far greater share of the house if things were ever to bomb between you. Though the arguement following such an announcement would probably negate the gain


She'd get the judge onside.


> Well for the fact that you seem to be well able to afford the increases doesnt mean they havn't impacted you, or are you on a fixed rate or something?


I disagree, if you don't notice the increase at all, i would say it has no impact.


----------



## soma

Glenbhoy said:
			
		

> I disagree, if you don't notice the increase at all, i would say it has no impact.


Your current/savings account has less cash in it than if the rates hadn't increased, therefore it has impacted you. Obviously you can manage this unperturbed.


----------



## room305

Glenbhoy said:
			
		

> To be honest, the increases haven't impacted us at all yet, and save for a loss of employment the increases will not affect us, additionally, we haven't yet reached the level where renting is cheaper for us (edging closer though).



Even on a very good salary a reduction of yearly discretionary income by just over €2k has got to be at least noticeable (it's a decent holiday afterall ). You might also want to consider the impact of future rate rises. Conservatively you are looking at about 12 further rises by year end 2008 (W2DW thinks there will be much more). Since each rise is proportionally more significant it is unlikely that even benchmarking will keep pace with the cuts into your income.

You might want to consider saving some of your discretionary income and using it to pay off lump sums from your mortgage. Like yourself, the rate rises haven't brought my repayments into line with rental costs but there is no way I could say it isn't having _any_ impact.


----------



## redo

redo said:
			
		

> There are 141 houses for sale now in Lucan.  That is a serious buildup of stock.  There was around 40 in January.


144 right now


----------



## cjh

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2006/07/27/ccrack27.xml


The link is to an article in The Telegraph by Amborse Evans-Pritchard relating to credit in the UK, but it's worth reading to the last sentence, which mentions the Irish situation.
It could be relevant in several of the threads but I think it's appropriate in this one (!?)


----------



## CelloPoint

redo said:
			
		

> 144 right now



Yeah, 2Pack was monitoring the number of houses for sale nationally on daft.ie on this thread about 2 weeks ago. He was at about 14,100 on his last post. It's now 14,900 (in the middle of the quiet season).


----------



## SteelBlue05

redo said:
			
		

> 144 right now


 
How many houses in Lucan? 3,000, more? Its hardly surprising that there are some for sale. 

What was the average amount for sale in Lucan over the last few months\years?


----------



## Glenbhoy

I'll accept what you all say re the rises impacting, what i'm trying to get at though is that, the drip/drip approach of rising interest rates by 0.25 is designed to soften the impact.  It's like ciggies, if governments wanted people to stop, they'd put very punitive taxes on them each year instead of 20c - it has an impact, but not a decision altering impact.


> Since each rise is proportionally more significant it is unlikely that even benchmarking will keep pace with the cuts into your income.


I would have thought that each rise is proportionally less significant??


----------



## Howitzer

SteelBlue05 said:
			
		

> How many houses in Lucan? 3,000, more? Its hardly surprising that there are some for sale.
> 
> What was the average amount for sale in Lucan over the last few months\years?


 
As an avid "Lucan watcher" I think I've a fair read on what the numbers have/should be. The numbers for Lucan, on the MyHome site, generally hover around between 80 and 110 (8-11 pages on a regular search). During the winter break these dropped to about 50 - 60. 

I did raise an eyebrow when I did a search recently after seeing the 141 number posted as it is somewhat higher than usual. However I came the conclusion that 1) Lucan has more houses, seemingly by the day, so it shouldn't be a surprise to see more for sale. 2) I suspect there are a number of properties on the site which simply haven't been taken down due to summer holidays. This would be a factor which wouldn't necessarily be the case during the winter break.

That said the prices being asked for these properties is MASSIVELY inflated on what they had been. Roughly 25% on the year to date.


----------



## SteelBlue05

Howitzer said:
			
		

> That said the prices being asked for these properties is MASSIVELY inflated on what they had been. Roughly 25% on the year to date.


 
Is that just happening in Lucan or in all parts of Dubln, I didnt think Lucan was any different.


----------



## redo

SteelBlue05 said:
			
		

> Is that just happening in Lucan or in all parts of Dubln, I didnt think Lucan was any different.


Lucan is a FTB market.  My point in pointing out the numbers of houses for sale was highlight the reduction in activity in the FTB market.


----------



## Howitzer

SteelBlue05 said:
			
		

> Is that just happening in Lucan or in all parts of Dubln, I didnt think Lucan was any different.


 
I think Lucan has somewhat outperformed the market, possibly cos there was relative value still to be had, at the start of the year anyway, certainly not now.


----------



## CelloPoint

Howitzer said:
			
		

> I think Lucan has somewhat outperformed the market, possibly cos there was relative value still to be had, at the start of the year anyway, certainly not now.



Especially when you consider the amount of housing estates, appaling traffic and general lack of facilites.


----------



## Bedsit

redo said:
			
		

> Lucan is a FTB market.  My point in pointing out the numbers of houses for sale was highlight the reduction in activity in the FTB market.


A freind of mine bought a house in Moy Glas in the early days when they were selling to 80K Pounds. The same houses have an asking price if 410K Euros today. Surely this is out of the reach of most FTBs


----------



## SteelBlue05

CelloPoint said:
			
		

> Especially when you consider the amount of housing estates, appaling traffic and general lack of facilites.


 
traffic is bad on the N4 in the mornings, traffic is fine around Lucan.

Lack of facilities? What is it missing?


----------



## redo

Bedsit said:
			
		

> A freind of mine bought a house in Moy Glas in the early days when they were selling to 80K Pounds. The same houses have an asking price if 410K Euros today. Surely this is out of the reach of most FTBs


This is the main point.  It is starting to get to the stage were even FTB's cannot afford places like Lucan, for second hand houses anyway.  There also seems to be alot of people in that area (Griffeen and Moyglass) selling up due to the new road being built and the projected increase in heavy lorries that will use this new road.  Plus, with Adamstown being a "stones throw away", the traffic can only get worse.  EA's must have a very good arm if they can throw stones that far.  Maybe we should get them to enter the dicus at the next Olympics


----------



## Glenbhoy

> A freind of mine bought a house in Moy Glas in the early days when they were selling to 80K Pounds. The same houses have an asking price if 410K Euros today. Surely this is out of the reach of most FTBs


Probably standard for many first time buyers.  Say a couple with incomes of 40K and 50K (not unreasonable for most 30yo old couples).  Net income of approx. 65k, monthly - 5.25K, repayments on a 30yr 100% mortgage at 4.5% are 2100, this is approx 40% of net incomes, that's supposedly the limit for banks presently, but if they go for a 35yr mortgage then repayments become 1900 and affordability is now 36%. There is not much room for upward movement though, especially as these are supposed to be stress tested at 2% above prevailing interest rates - of course the banks could just continue to change their lending criteria, as is their right in a free market.


----------



## room305

Glenbhoy said:
			
		

> I'll accept what you all say re the rises impacting, what i'm trying to get at though is that, the drip/drip approach of rising interest rates by 0.25 is designed to soften the impact.  It's like ciggies, if governments wanted people to stop, they'd put very punitive taxes on them each year instead of 20c - it has an impact, but not a decision altering impact.



Absolutely. A punitive 0.5% or hell, why not a 1% rise in interest would definitely whip the wind from the sails of the Irish property market. If we could control the rate rises ourselves the central bank might even do it. However, it is unlikely for the same reason the ECB are afraid to do it. It could cause a recession.



			
				Glenbhoy said:
			
		

> I would have thought that each rise is proportionally less significant??



No, more significant definitely. However, if you are depreciating the capital in the interim between the rises it may appear less significant because the higher percentage is calculated on smaller loan value.


----------



## redo

Glenbhoy said:
			
		

> Probably standard for many first time buyers.  Say a couple with incomes of 40K and 50K (not unreasonable for most 30yo old couples).  Net income of approx. 65k, monthly - 5.25K, repayments on a 30yr 100% mortgage at 4.5% are 2100, this is approx 40% of net incomes, that's supposedly the limit for banks presently, but if they go for a 35yr mortgage then repayments become 1900 and affordability is now 36%. There is not much room for upward movement though, especially as these are supposed to be stress tested at 2% above prevailing interest rates - of course the banks could just continue to change their lending criteria, as is their right in a free market.


 If these FTB decide to have kids? One can also include childminding costs cira 700 pm.  Alot of them will be in the prediciment that they can't "afford" to have kids, which is a shame.


----------



## CelloPoint

Glenbhoy said:
			
		

> Probably standard for many first time buyers.  Say a couple with incomes of 40K and 50K (not unreasonable for most 30yo old couples).  Net income of approx. 65k, monthly - 5.25K, repayments on a 30yr 100% mortgage at 4.5% are 2100, this is approx 40% of net incomes, that's supposedly the limit for banks presently, but if they go for a 35yr mortgage then repayments become 1900 and affordability is now 36%. There is not much room for upward movement though, especially as these are supposed to be stress tested at 2% above prevailing interest rates - of course the banks could just continue to change their lending criteria, as is their right in a free market.



Problem is, your skewed example is not a typical scenario. You refer to a house at the bottom end of the market and a couple with well above average salaries.

Let's be honest, nobody wants to live in commuterland.


----------



## Glenbhoy

> If these FTB decide to have kids? One can also include childminding costs cira 700 pm. Alot of them will be in the prediciment that they can't "afford" to have kids, which is a shame.


My research suggests you'd be blessed to get change out of a grand.
However, you also have to consider that assuming the economy stays stable (a very big assumption), salaries increase by circa 5% p.a. and of course mortgage repayments do come down with time.

Re the interest rate increases, my point was that a 0.25% increase on a base rate of 2% is more significant than a 0.25% increase on a base rate of 3%.


----------



## soma

Glenbhoy said:
			
		

> Say a couple with incomes of 40K and 50K (not unreasonable for most 30yo old couples).  Net income of approx. 65k, monthly - 5.25K, repayments on a 30yr 100% mortgage at 4.5% are 2100, this is approx 40% of net incomes


Just stop and *think* about what you're saying for a moment. A high-earning couple with no kids and no debt apart from the mortgage would be spending *40% of their joint income* to live in an undesirable area (IMO) of the capital. 

This is sheer, utter, madness and I feel confident that market forces will sort out this mess over a painfully drawn-out few years.


----------



## Glenbhoy

> Problem is, your skewed example is not a typical scenario. You refer to a house at the bottom end of the market and a couple with well above average salaries.
> 
> Let's be honest, nobody wants to live in commuterland.


Firstly, what's skewed?  Perhaps you should read my post and what it was in response to - ie a suggestion that 410K was out of reach of most FTB's.  I was pointing out how 410k is most likely affordable for many couples - as for where the place is, and the merits of living there - i did not comment.


----------



## room305

Glenbhoy said:
			
		

> Re the interest rate increases, my point was that a 0.25% increase on a base rate of 2% is more significant than a 0.25% increase on a base rate of 3%.



Ah yes I see. The repayment increase on a move from 2-2.25% is less than the repayment increase when you move from 5-5.25%. However, as a portion of the overall rate, the first move is more significant.


----------



## Glenbhoy

> Just stop and *think* about what you're saying for a moment. A high-earning couple with no kids and no debt apart from the mortgage would be spending *40% of their joint income* to live in an undesirable area (IMO) of the capital.


Tis not me who is saying anything, i'm just pointing out what the banks see - as some have rightly said, maybe the purchasers should stop and think - but we're all grown ups aren't we.


----------



## redo

Bedsit said:
			
		

> A freind of mine bought a house in Moy Glas in the early days when they were selling to 80K Pounds. The same houses have an asking price if 410K Euros today. Surely this is out of the reach of most FTBs


145 has got full planning permission for a two story development and is quoting 1/2 million.  Crazy.


----------



## Guest107

CelloPoint said:
			
		

> Yeah, 2Pack was monitoring the number of houses for sale nationally on daft.ie on this thread about 2 weeks ago. He was at about 14,100 on his last post. It's now 14,900 (in the middle of the quiet season).


I had stopped but thanks for noting the figure for me there Cellopoint. Hopefully you do not get any irrational abuse for simply stating the facts like I did  Its now 14972 by the way.


----------



## bearishbull

PLEASE! NO MORE FIGURES FROM MYHOME OR DAFT!!!! start  a new thread if you wanna discuss it. When/if rigourous studies of housing inventory is available then it can be considered in terms of consumer sentiment.


----------



## Jeanne

Took me an entire day to read through this thread. Jeepers, I'm now boggle - eyed!  

But it was worth it.

All really interesting - some very insightful contributions. And I've even enjoyed 2Pack's stats!  

My own reading of the property situation is.....this bubble is about to burst!


----------



## CelloPoint

Jeanne said:
			
		

> Took me an entire day to read through this thread. Jeepers, I'm now boggle - eyed!
> 
> But it was worth it.
> 
> All really interesting - some very insightful contributions. And I've even enjoyed 2Pack's stats!
> 
> My own reading of the property situation is.....this bubble is about to burst!


Can I ask how you heard about this thread? Are you a new askaboutmoney user? The reason I ask is because this thread has received a phenomenal amount of hits over the last 3 weeks.

I was talking to a colleague at lunch and I overheard the people at the table next to me talking about this thread!


----------



## walk2dewater

Contrarian said:
			
		

> When everyone thinks the same, then there is'nt alot of thinking going on....


 
This sums up my current thinking(ha!) at the moment.  Brilliant.

Here's another one, this time its really happening:

_The lunatics are about to take over the asylum_.

hang on....


----------



## beattie

Jeanne said:
			
		

> My own reading of the property situation is.....this bubble is about to burst!


 
It won't for a while yet, though I think the next six months will be interesting. I am noticing the pace of building the apartment blocks in South Dublin has ramped up in the last two months. Once these come on stream I forsee a drop in rents which coupled with ECB rates of approx 3.5% will make for an interesting spectacle


----------



## room305

Jeanne said:
			
		

> My own reading of the property situation is.....this bubble is about to burst!


Nope, highly unlikely. Not for a while yet anyway. 

Might just be idle speculation but I've noticed a curious bullishness undercurrent to the thoughts of people who are supposedly bearish. I thought recently that I had detected a change of sentiment among people I spoke to. Much talk of possible collapse, more caution, talk of prices falling etc. Especially when this was coupled with lots of bearish articles in the media about property. Although the property supplements didn't really get any slimmer.

Now I'm starting to think nothing at all has changed. Even those who _claim_ they are bearish, are really just hoping the prices will drop so they can buy in at a supposed "bargain" price. After that they would like it to be  business-as-usual-please with a never-ending rise in property prices.

It's possible we're entering the last leg of the bubble, when even supposed bears start to believe the hype and buy in at all costs.

When you hear W2DW has been spotted queuing overnight for an apartment in Charlestown, then it is most definitely time to exit the party as gracefully as you can manage. Or just duck.


----------



## thewatcher

room305 said:
			
		

> It's possible we're entering the last leg of the bubble, when even supposed bears start to believe the hype and buy in at all costs.
> 
> When you hear W2DW has been spotted queuing overnight for an apartment in Charlestown, then it is most definitely time to exit the party as gracefully as you can manage. Or just duck.


 
 There's a few lads wobbling alright,but it still doesn't get away from the fact that it would be better to take a bit of a smack now than a lump hammer further down the line.

http://www.rte.ie/business/2006/0727/usa2.html

Compare and contrast !.no


----------



## liteweight

bearishbull said:
			
		

> P.S Liteweight , Do you think the rent on a mortgage(Ie; interest) is dead money? Do you realise house prices must increase by around 50% in real terms just to break even on the purchase of a house?



Have just returned from holiday and am trying to catch up with this thread! No Bearishbull, I didn't realise that. However, at least when paying a mortgage over time it is creating equity in the property whereas rent remains the same and (?) may rise. If you pay for 10 years, you still come out the way you went in! I presume the figure of 50% is based on a person sticking to the term of the loan e.g.20 yrs. There is opportunity however, to reduce the size of the loan and therefore the interest as one's circumstances allow. Also it is possible to sell and put any profit made against the next family home, thereby  reducing the mortgage. I realise with house prices so high, that stamp duty and fees will significantly reduce profit nowadays.

Anyway I'm taking everything said in reply to my post and trying to digest it. I may even take a different stand.......I have been known to be persuaded by a good argument occassionally!


----------



## room305

thewatcher said:
			
		

> ... it would be better to take a bit of a smack now than a lump hammer further down the line.



Absolutely. Couldn't agree more. I just doubt we'll get the bit of a smack now because rates simply won't rise fast enough to do it. We are headed for disaster, although I think now that it is further away than I originally anticipated.

That's the thing with bubbles, they always last longer than you'd suspect. Even Alan Greenspan got sucked into believing the hype about the .com bubble, with all the talk of a "new era", "Dow 36,000" and so on.


----------



## whathome

Reading this thread has been really interesting!
Mrs. Whathome and I have been active in the market since January. We currently own two properties (purchased in 1998 and 2001) and we were planning on selling both to trade up.

Given that we are selling and buying, we've had a good view of both sides of the market and we are definitely becoming more bearish every day.  Our selling agent mentioned that despite the usual summer slowdown, prospective buyers appear to be far more cautious than usual.

As mentioned previously in this thread, increased inventory in certain areas is obvious - tons of investor type property (apartments and ex-rental houses) coming on even during the quiet summer season.

Our observations have been that some asking prices have quietly dropped over the recent past. This is not just a summer phenomenon as these houses were originally priced at levels consistent with similar properties in the same area.  Furthermore, they're in what people would typically consider "secure" areas.  Here are some examples of particular houses that I noticed:

- Blackrock : 4 Bed Detached reduced from €895,000 to €850,000
- Blackrock : 3 Bed Semi Dormer Bungalow reduced from €850,000 to €795,000
- Beaumont : 3 Bed Semi reduced from €590,000 to €550,000
- Raheny : 3 Bed Semi reduced from €760,000 to €719,000
- Raheny : 4 Bed Semi reduced from €850,000 to 820,000
- Rathmichael : 2 Bed reduced from €520,000 to €495,000
- Rathmichael : 2 Bed reduced from €460,000 to €435,000

I also noticed that some new €1M plus townhouses in Stillorgan that had previously sold out are back on the market - and this is not the release of a new phase.

There has been a real shift in momentum from the frenzy that was evident in March to a crawl as the two interest rate hikes kicked in.  I know it's the summer season but I noticed a similar shift in sentiment when prices started to drop during 2001 when we bought, even prior to 9/11.  September will be interesting - we know of several houses that have been pulled off the market to be "re-launched" in the autumn.  Add next weeks expected interest rate hike, the overhang of unsold property from the previous season and the new supply will create some pressure.

I think the craziness that is the Irish property market is partly as a result of bank over-lending.  When we originally spoke with our conservative bank manager in January, he was horrified that we were thinking of selling either of our properties in order to buy our next house.  They were VERY keen for us to go interest only on both existing properties and use our equity along with a jumbo mortgage to fund our new home.  I couldn’t go along with that as I like to sleep at night – well most nights!

What has really highlighted a change in sentiment to me is that when we told people in Jan/Feb that we were planning on selling to buy, they invariably replied that we were “Mad to sell anything”.  The response has changed recently to a reluctant “Maybe you’re doing the right thing”.  Only time will tell!


----------



## phoenix_n

whathome said:
			
		

> The response has changed recently to a reluctant “Maybe you’re doing the right thing”. Only time will tell!


 
And thats the key really. People are motivated by Fear and Interest. If the Fear exists that the market is about to burst ( the realisation that now it is indeed a bubble is significant) then it will.


----------



## beattie

whathome said:
			
		

> Our observations have been that some asking prices have quietly dropped over the recent past. This is not just a summer phenomenon as these houses were originally priced at levels consistent with similar properties in the same area. Furthermore, they're in what people would typically consider "secure" areas. Here are some examples of particular houses that I noticed:
> 
> - Blackrock : 4 Bed Detached reduced from €895,000 to €850,000
> - Blackrock : 3 Bed Semi Dormer Bungalow reduced from €850,000 to €795,000
> - Beaumont : 3 Bed Semi reduced from €590,000 to €550,000
> - Raheny : 3 Bed Semi reduced from €760,000 to €719,000
> - Raheny : 4 Bed Semi reduced from €850,000 to 820,000
> - Rathmichael : 2 Bed reduced from €520,000 to €495,000
> - Rathmichael : 2 Bed reduced from €460,000 to €435,000
> 
> I also noticed that some new €1M plus townhouses in Stillorgan that had previously sold out are back on the market - and this is not the release of a new phase.


 
Very interesting to see reductions in those areas, it has always being drilled in that prices would drop last in the more salubrious areas. Maybe interest rate rises are affecting the highter market as well. I suppose if I was an investor in these areas I would see a pitiful yield being derived and get out while the going is good


----------



## phoenix_n

Very strange. I just noticed there is an increase of properties for sale in Phibsboro where i live. Looks like investors (poorly maintained houses) are dumping their stock. 

Its started.


----------



## soma

Anyone who has been watching the attitudes to property of the two main players in the Irish broadsheet market was able to put a very large 2+2 together this morning.

I think people will have noticed that the independent newspaper group's columnists & general articles have been getting increasingly bearish (including a *very* bearish collection of articles in the Sunday Independent a few weeks back) - whereas the Irish Times has remained largely silent with the exception of the tone their 'worth the investment?' series.

This morning we learn that the Irish Times has emerged as a potential buyer of www.myhome.ie - I was always wondering who was going to end up being the bagholder for that one. 

If the I.T. does purchase myhome, I predict they will take such a bath on that one in the next few years, that it will threaten the financial viability of the paper itself.


----------



## soma

soma said:
			
		

> This morning we learn that the Irish Times has emerged as a potential buyer of www.myhome.ie


Well lo & behold, they are the *actual* buyer (€50m) - a brutal investment IMHO.

May I be the first to congratulate the estate agents for selling at the top of the market and making a killing. The smart money always gets out in time.


----------



## redo

whathome said:
			
		

> Reading this thread has been really interesting!
> Mrs. Whathome and I have been active in the market since January. We currently own two properties (purchased in 1998 and 2001) and we were planning on selling both to trade up.
> 
> Given that we are selling and buying, we've had a good view of both sides of the market and we are definitely becoming more bearish every day.  Our selling agent mentioned that despite the usual summer slowdown, prospective buyers appear to be far more cautious than usual.
> 
> As mentioned previously in this thread, increased inventory in certain areas is obvious - tons of investor type property (apartments and ex-rental houses) coming on even during the quiet summer season.
> 
> Our observations have been that some asking prices have quietly dropped over the recent past. This is not just a summer phenomenon as these houses were originally priced at levels consistent with similar properties in the same area.  Furthermore, they're in what people would typically consider "secure" areas.  Here are some examples of particular houses that I noticed:
> 
> - Blackrock : 4 Bed Detached reduced from €895,000 to €850,000
> - Blackrock : 3 Bed Semi Dormer Bungalow reduced from €850,000 to €795,000
> - Beaumont : 3 Bed Semi reduced from €590,000 to €550,000
> - Raheny : 3 Bed Semi reduced from €760,000 to €719,000
> - Raheny : 4 Bed Semi reduced from €850,000 to 820,000
> - Rathmichael : 2 Bed reduced from €520,000 to €495,000
> - Rathmichael : 2 Bed reduced from €460,000 to €435,000
> 
> I also noticed that some new €1M plus townhouses in Stillorgan that had previously sold out are back on the market - and this is not the release of a new phase.
> 
> There has been a real shift in momentum from the frenzy that was evident in March to a crawl as the two interest rate hikes kicked in.  I know it's the summer season but I noticed a similar shift in sentiment when prices started to drop during 2001 when we bought, even prior to 9/11.  September will be interesting - we know of several houses that have been pulled off the market to be "re-launched" in the autumn.  Add next weeks expected interest rate hike, the overhang of unsold property from the previous season and the new supply will create some pressure.
> 
> I think the craziness that is the Irish property market is partly as a result of bank over-lending.  When we originally spoke with our conservative bank manager in January, he was horrified that we were thinking of selling either of our properties in order to buy our next house.  They were VERY keen for us to go interest only on both existing properties and use our equity along with a jumbo mortgage to fund our new home.  I couldn’t go along with that as I like to sleep at night – well most nights!
> 
> What has really highlighted a change in sentiment to me is that when we told people in Jan/Feb that we were planning on selling to buy, they invariably replied that we were “Mad to sell anything”.  The response has changed recently to a reluctant “Maybe you’re doing the right thing”.  Only time will tell!



Nice post with some meaningfull stats thrown in!  We did exactly the same.  Myself and my wife put both our properties on the market in late January (bought 97 & 99) in order to trade up.  Even back then I thought we had missed to boat (selling FTB properties).


----------



## CelloPoint

Related question: Why have the Irish media been so silent about property over the last couple of weeks?


----------



## Bedsit

soma said:
			
		

> Well lo & behold, they are the *actual* buyer (€50m) - a brutal investment IMHO.
> 
> May I be the first to congratulate the estate agents for selling at the top of the market and making a killing. The smart money always gets out in time.


Really does remind one of the heyday of the Dotcom boom and subsequent crash. 50mil for a Website. I know it has a brand name, presence etc. etc., but 50mil for a Website!!


----------



## redo

soma said:
			
		

> Well lo & behold, they are the *actual* buyer (€50m) - a brutal investment IMHO.
> 
> May I be the first to congratulate the estate agents for selling at the top of the market and making a killing. The smart money always gets out in time.



myhome.ie is only a bloody website that a first year IT student could knock up.


----------



## room305

CelloPoint said:
			
		

> Related question: Why have the Irish media been so silent about property over the last couple of weeks?



They haven't though. The Irish Independent and Sunday Independent have been extraordinarily bearish.


----------



## SteelBlue05

redo said:
			
		

> myhome.ie is only a bloody website that a first year IT student could knock up.


 
Its the not just a website they bought, its a revenue generating business with a huge brand name.


----------



## redo

Bedsit said:
			
		

> Really does remind one of the heyday of the Dotcom boom and subsequent crash. 50mil for a Website. I know it has a brand name, presence etc. etc., but 50mil for a Website!!



Agreed, the only reason it has an projected "asking price" is due to is market presence.  However, recenly, Daft has overtaken myhome is traffic stats recently.  

There are considering selling because they know that websites that make money are copied and even improved upon.  There is nothing stopping some young kid (remember the ryanair website?) developing a website, like myhome and making it available to everybody, like daft.  Vendors sumit there properties for sale, EA tender for them.


----------



## Bedsit

SteelBlue05 said:
			
		

> Its the not just a website they bought, its a revenue generating business with a huge brand name.


True I pointed this out in my last post. However if the housing bubble bursts then all they have for 50m is a fancy name and its not even a .com address. The rest is just a database and some old hardware


----------



## redo

SteelBlue05 said:
			
		

> Its the not just a website they bought, its a revenue generating business with a huge brand name.


 Money spent on marketing can make you a household name in a matter of weeks.   A female streaker running through the 18 green at the K club during the final day of the Ryder Cup with <insert brand here> painted on her bottom would suffice.


----------



## SteelBlue05

Bedsit said:
			
		

> True I pointed this out in my last post. However if the housing bubble bursts then all they have for 50m is a fancy name and its not even a .com address. The rest is just a database and some old hardware


 
if there is a huge bubble burst that doesnt mean that people will stop selling and buying property. Myhome.ie obviously has a lot of contractual arrangements with various estate agents etc and this is a valuable thing.


----------



## SteelBlue05

redo said:
			
		

> Money spent on marketing can make you a household name in a matter of weeks. A female streaker running through the 18 green at the K club during the final day of the Ryder Cup with <insert brand here> painted on her bottom would suffice.


 
Thats the classic "15 minutes of fame", its not a brand.


----------



## SineWave

> However if the housing bubble bursts then all they have for 50m is a fancy name and its not even a .com address. The rest is just a database and some old hardware




If the housing bubble bursts, one would have to presume that their site is going to have more revenue paying ads than ever


----------



## Bedsit

redo said:
			
		

> Agreed, the only reason it has an projected "asking price" is due to is market presence.  However, recenly, Daft has overtaken myhome is traffic stats recently.
> 
> There are considering selling because they know that websites that make money are copied and even improved upon.  There is nothing stopping some young kid (remember the ryanair website?) developing a website, like myhome and making it available to everybody, like daft.  Vendors sumit there properties for sale, EA tender for them.



I know one of the guys from Daft as he took course in networks in his final year, and I can tell you that he is very clued in. He was one of the panelists on Leviathan recently and frankly admitted as yet he had not purchased a home. That says volumes as far as I am concerned.


----------



## bearishbull

even when the bubble bursts houses will still be bought and sold but 50million seems a bit much, theres no guaruntee that estate agents who owned myhome will continue to direct business to myhome.ie. as someone else pointed out the site is easily copied and lacks anything to make it a sure bet going forward,at least when estate agents owned it they would guarantee a through flow of business. in a post bubble burst market sites will pop up offering all the services a house buyer/seller needs but cheaper .


----------



## SteelBlue05

bearishbull said:
			
		

> theres no guaruntee that estate agents who owned myhome will continue to direct business to myhome.ie. .


 
I would assume that for 50m they would have agreed contractually to continue to direct their business to myhome.ie


----------



## Howitzer

redo said:
			
		

> Agreed, the only reason it has an projected "asking price" is due to is market presence. However, recenly, Daft has overtaken myhome is traffic stats recently.


 
MyHome currently makes a PROFIT of between 1 and 1.5 million annually. A valuation of 35 - 50 times earnings seems a tad high but not out of this world, especially to a buyer with it's own interests in that specific market.

[broken link removed]


----------



## redo

SteelBlue05 said:
			
		

> if there is a huge bubble burst that doesnt mean that people will stop selling and buying property. Myhome.ie obviously has a lot of contractual arrangements with various estate agents etc and this is a valuable thing.


The main Estate (Sherry Fitz and DNG) agents OWN 75% of myhome.ie with 25% owned by private investors.


----------



## SteelBlue05

redo said:
			
		

> The main Estate (Sherry Fitz and DNG) agents OWN 75% of myhome.ie with 25% owned by private investors.


 
I mean how many estate agents have contractually agreed to use myhome.ie rather than who "owns" it.


----------



## bearishbull

i think just after bubble bursts i'll set up quicksale.ie and offer discount pricing for listing and legal fee's etc!


----------



## Lumpsum

The Irish Times already seems hugely reliant on property for its advertising revenue.  If you took out property, and Friday's recruitment ads (13 pages today) what would be left? Buying myhome seems to have exposed them to financial calamity in the event of a slowdown in property market activity. And don't they have their own property site, nicemove.ie?

In light of the above, don't be expecting much bearish property analysis from that quarter for a while....


----------



## bearishbull

im sure the board of the irish times who live in their ivory towers in the leafy suburbs of south dublin and earn huge salaries and see the massive sums being paid for properties in their property section each week know how to judge good value   Pity they didnt ask their increasingly bearish economics commentator on the wisedom of the purchase.


----------



## redo

redo said:
			
		

> The main Estate (Sherry Fitz and DNG) agents OWN 75% of myhome.ie with 25% owned by private investors.


I stand corrected (said the man in orthopedic shoes) http://www.rte.ie/business/2006/0728/myhome.html


----------



## yawha

soma said:
			
		

> Anyone who has been watching the attitudes to property of the two main players in the Irish broadsheet market was able to put a very large 2+2 together this morning.
> 
> I think people will have noticed that the independent newspaper group's columnists & general articles have been getting increasingly bearish (including a *very* bearish collection of articles in the Sunday Independent a few weeks back) - whereas the Irish Times has remained largely silent with the exception of the tone their 'worth the investment?' series.
> 
> This morning we learn that the Irish Times has emerged as a potential buyer of www.myhome.ie - I was always wondering who was going to end up being the bagholder for that one.
> 
> If the I.T. does purchase myhome, I predict they will take such a bath on that one in the next few years, that it will threaten the financial viability of the paper itself.


 

Well since The Independent contracted David McWilliams a few months ago it would be very contradictary of them to be anything but bearish.
[broken link removed]


----------



## CelloPoint

yawha said:
			
		

> Well since The Independent contracted David McWilliams a few months ago it would be very contradictary of them to be anything but bearish.
> [broken link removed]



I thought he was on holidays!


----------



## phoenix_n

yawha said:
			
		

> Well since The Independent contracted David McWilliams a few months ago it would be very contradictary of them to be anything but bearish.
> [broken link removed]


 
In the article he writes "Now imagine the following scenario. Ireland's house prices are falling in tandem with the forecast slowing economy."

I think that that is what is happening now.


----------



## Bedsit

More stats from the CSO on Ireland's construction dependancy


http://www.rte.ie/business/2006/0728/housing.html


----------



## Zack

The talk of a soft landing which seems to be on many commentator's lips these.......is this possible? - what scenario will bring this about?
Surely a soft landing relies on people keeping their nerve?- if the investors stampede to offload -how can the landing be "soft".

Z


----------



## room305

phoenix_n said:
			
		

> I think that that is what is happening now.



The economy isn't slowing! In fact it is growing at an extraordinary rate. Granted this is unsustainable and construction driven but it is erroneous to say it is currently slowing.

There is a predicted slowdown in 2008 and that sounds about right to me (both for a slowdown in the economy and a serious slide in house prices).


----------



## room305

Zack said:
			
		

> Surely a soft landing relies on people keeping their nerve?- if the investors stampede to offload -how can the landing be "soft".



Worse than that, they are relying on altruism on the part of speculators. Namely, don't take your massive profit now, hold off and keep the prices stable. Form an orderly queue to sell and the prices won't drop etc.

So unlikely it is almost laughable. I'm very surprised (given their warnings in the past few years) that ESRI appear to support this theory too.


----------



## Zack

Room305, exactly,

Its utterly against human nature......we panic.
There will be no orderly queing by investors......in the fact of rising interest rates?!?!? -get rid of it.....now!
I mean c'mon.


----------



## room305

I don't think the rates have risen enough yet to really start hurting. Like high prices at the pump, this situation is being treated as a temporary pain. Many people have simply fixed for a year or so and think we'll be back to an extremely low base rate by the time the fixed period runs out.

No doubt some people - especially those who have bought recently - will completely overextend themselves. Possibly to the point of not being able to afford repayments on their house. However, I doubt it will lead to a mass sell-off. Friends, family and the banks will all rally round to lend a helping hand.

After all, you'd be mad to sell wouldn't you?


----------



## Duplex

Zack said:
			
		

> The talk of a soft landing which seems to be on many commentator's lips these.......is this possible? - what scenario will bring this about?
> Surely a soft landing relies on people keeping their nerve?- if the investors stampede to offload -how can the landing be "soft".
> 
> Z


 
In California the term 'soft landing' seems to have been consigned to the rhetorical dustbin.  

http://www.latimes.com/business/la-fi-soft21jul21,1,3893046.story?coll=la-mininav-business&ctrack=1&cset=true

An alternative I read somewhere _'she's going to auger in' _


----------



## phoenix_n

room305 said:
			
		

> I don't think the rates have risen enough yet to really start hurting.


 
But dont forget where the hurt will happen first. As capital appreciation gains from property falls off (i doubt whether property bought yesterday would get the same price today) investors will leave the market. Prospective buyers will hold off waiting for prices to fall even further. So what will happen is that you will have people making mortgage repayments on negative equity properties. And that , rather than incremental rises in interest rates, will cause the real hurt.


----------



## CelloPoint

Any estate agents on here? C'mon, let us know what you think? We won't bite! I say fair play to anyone who goes out to be an estate agent and takes full advantage of the situation - the fools who hand over the money without asking any questions deserve to learn the hard way.


----------



## jammacjam

CelloPoint said:
			
		

> Any estate agents on here? C'mon, let us know what you think? We won't bite! I say fair play to anyone who goes out to be an estate agent and takes full advantage of the situation - the fools who hand over the money without asking any questions deserve to learn the hard way.


 
I don’t think people are fools just because they buy houses, I think it’s a perfectly natural thing to do. There is another thread about how you should buy a house before starting a pension because of the seccurity of owning your own house. I don’t think people are fools for working hard and wanting to own their own homes. I certainly don’t  think FTB don’t deserve it. Easy for people here to say that when most would already own their houses for years, not so easy if you are in the position of uncertainty of not knowing if they are going to continue to rise or not or for how long if you don’t own your own house.


----------



## Bedsit

CelloPoint said:
			
		

> Any estate agents on here? C'mon, let us know what you think? We won't bite! I say fair play to anyone who goes out to be an estate agent and takes full advantage of the situation - the fools who hand over the money without asking any questions deserve to learn the hard way.


One thing that would be very interesting is for all of us on this forum to reveal our true identities once it has been officially confirmed that the bubble has burst. I'm not saying one has to reveal ones name, but things like age, gender, educational qualifications, employment sector etc. etc. I think the resulsts will be very interesting.


----------



## redo

SteelBlue05 said:
			
		

> I mean how many estate agents have contractually agreed to use myhome.ie rather than who "owns" it.


I would suspect that the main EA's (Sherry Fitz, DNG, Gunne) that have sold out will probably setup another website whenever their contract (if present) expires.  That's a nice return.


----------



## poormouth

Interesting and relevant blog entry at following location called "Lights Out in Georgia" at location http://globaleconomicanalysis.blogspot.com/ detailing change of sentiment in a US housing market over the last 6 month period


----------



## room305

phoenix_n said:
			
		

> So what will happen is that you will have people making mortgage repayments on negative equity properties. And that , rather than incremental rises in interest rates, will cause the real hurt.



I disagree. Sitting on negative equity isn't a whole lot of fun obviously and it may prevent you selling your house if you need to. However, once rates move into the 6-7% range, it will be coming up with the money to service the jumbo mortgage that will hurt the most.

However, it doesn't help that selling the house at this stage might be an impossible option at that stage because of negative equity.


----------



## yawha

jammacjam said:
			
		

> I don’t think people are fools just because they buy houses, I think it’s a perfectly natural thing to do. There is another thread about how you should buy a house before starting a pension because of the seccurity of owning your own house. I don’t think people are fools for working hard and wanting to own their own homes. I certainly don’t think FTB don’t deserve it. Easy for people here to say that when most would already own their houses for years, not so easy if you are in the position of uncertainty of not knowing if they are going to continue to rise or not or for how long if you don’t own your own house.


 
In most of europe its perfectly natural to rent,if your outlook on life is conditioned by your immediate surrounding then I think you need to broaden your horizons.
What dont FTB deserve?Nobody is physicaly forcing them to do anything,dont believe the hype or the media, they're out to make money ,not do you favours. 
House prices keep rising because people keep buying them,if people did their homework and worked out whether houses were good value or not, using facts ,statistics,history,comparisons and basic common sense they would have stopped buying them a long time ago,the're not doing this and been driven by fear(of their own ignorance),this is foolishness en masse.
There is no external,mystical,uncontrollable force driving house prices up,its not like the weather.
You and everybody else's attitude and consequential action affects what happens.
I dont own my own house,I did but now rent,I didnt buy to make money, I have since cashed  in and I feel very secure about my decision and I am financially better off.


----------



## jammacjam

yawha said:
			
		

> In most of europe its perfectly natural to rent,if your outlook on life is conditioned by your immediate surrounding then I think you need to broaden your horizons.
> What dont FTB deserve?Nobody is physicaly forcing them to do anything,dont believe the hype or the media, they're out to make money ,not do you favours.
> House prices keep rising because people keep buying them,if people did their homework and worked out whether houses were good value or not, using facts ,statistics,history,comparisons and basic common sense they would have stopped buying them a long time ago,the're not doing this and been driven by fear(of their own ignorance),this is foolishness en masse.
> There is no external,mystical,uncontrollable force driving house prices up,its not like the weather.
> You and everybody else's attitude and consequential action affects what happens.
> I dont own my own house,I did but now rent,I didnt buy to make money, I have since cashed in and I feel very secure about my decision and I am financially better off.


 
I dont own either for the exact same reason, we were going to untill this year but it doesnt make sense anymore. I can understand why people want to buy as well and it made sense untill about a year ago I would say. No I feel sorry for what is about to happen, not happy about it is all I mean.


----------



## Zack

Duplex, "auger in " - yeah, its test pilot terminology for an uncontrable,downward spin -resulting inevitably in, well, a crash. Alternatively :  " it's bleeeedin Hindenburgin bud"

One thing though, whether you own property or not it seems we are all cojoined in this. A crash or slide will have fairly traumatic consequences for the economy in general. (having said that, its somewhat easier to pack your bags, get on a plane and earn your living elsewhere when you're not chained to the old bricks and mortar.)
As it happens my partner and I purchased  5yrs, ago. We have been clearing the mortgage  extremely aggressively while rates are so low  and are sensible relatively responsible wrt finances. What disturbs and annoys me is the sheer volume of profligate cretins out there to whom the phrase " rainy day" seems to have no meaning, who are up to the hilt in debt and to whom "interest rates" are an abstraction that has no bearing on their lives.

A lot of people it seems are going to have a severe hangover once Germany's and Ireland's interests beign to diverge.

Z


----------



## walk2dewater

I maintain though that this thread represents a microcosmic sample of sentiment, the vast majority of people are simply not on board with the views here.  In fact, between now and Xmas, I reckon theres gonna be a small army of aggressive buyers climbing over themselves to accept whatever prices sellers are asking for.  Prices are going UP UP UP in the near-term.

This will be the last hurrah, then I’m going to starting betting seriously against this bubble.  And I will explain it in detail on a new thread.


----------



## CelloPoint

Zack said:
			
		

> ...having said that, its somewhat easier to pack your bags, get on a plane and earn your living elsewhere when you're not chained to the old bricks and mortar.




This is exactly what I'll do if things go pear shaped. I certainly won't be sticking around for the hangover. And I'll be taking my free education with me.


----------



## room305

walk2dewater said:
			
		

> This will be the last hurrah, then I’m going to starting betting seriously against this bubble.



Once silly season kicks in again in earnest I shall be selling. I'd prefer to get out before the top than either try and time the top or deal with the aftermath.


----------



## CelloPoint

room305 said:
			
		

> Once silly season kicks in again in earnest I shall be selling. I'd prefer to get out before the top than either try and time the top or deal with the aftermath.



No doubt this thread is being passed off as 'silly season' scare-mongering.


----------



## whathome

We're selling two properties and there is no sign of a small army of aggressive buyers, quite the opposite.  We were sale agreed on one of the houses we're selling but the buyer got cold feet and backed out.  Now an identical house has gone up in the same estate with an asking price €30k less than ours.  I really don't think any "UP UP UP" situation will occur in the near term, sentiment has changed - maybe not a lot but enough to tip the balance.

The effect either way on me is neutral as we're selling and buying roughly equal values but right now it looks like buying is becoming easier than selling if you're brave enough and have the money!  If I could avoid it, there's no way I would buy any property until values return to reasonable levels based on rental yield, price/earnings etc.  Unfortunately I can’t avoid buying so selling to buy rather than holding existing properties and buying is as good as it gets.


----------



## redo

whathome said:
			
		

> We're selling two properties and there is no sign of a small army of aggressive buyers, quite the opposite. We were sale agreed on one of the houses we're selling but the buyer got cold feet and backed out. Now an identical house has gone up in the same estate with an asking price €30k less than ours. I really don't think any "UP UP UP" situation will occur in the near term, sentiment has changed - maybe not a lot but enough to tip the balance.
> 
> The effect either way on me is neutral as we're selling and buying roughly equal values but right now it looks like buying is becoming easier than selling if you're brave enough and have the money! If I could avoid it, there's no way I would buy any property until values return to reasonable levels based on rental yield, price/earnings etc. Unfortunately I can’t avoid buying so selling to buy rather than holding existing properties and buying is as good as it gets.


Are they FTB type properties?


----------



## whathome

redo said:
			
		

> Are they FTB type properties?


 
One is a high-end FTB apartment, the other is a moderate trade-up 3 bed semi.  On the purchase side looking for a 3/4 bed house with a decent garden -  still seeing people at viewings but nobody making offers...seems like everyone is cautiously waiting to see what will happen.


----------



## Jeanne

CelloPoint said:
			
		

> Can I ask how you heard about this thread? Are you a new askaboutmoney user? The reason I ask is because this thread has received a phenomenal amount of hits over the last 3 weeks.
> 
> I was talking to a colleague at lunch and I overheard the people at the table next to me talking about this thread!


 
I pop in and out of this site from time to time, so not a total newbie and didn't hear about this thread from someone. Don't tend to post much because they seem quite srict and I'm nervous of having a post removed/deleted etc because it's in the wrong place or because I failed to notice there was already a similar thread or that type of thing.  

Anyway, back to the topic. I'm near Dublin 14 and have noticed that houses are not selling as quickly as earlier in the year. Any houses that didn't sell before mid June are still For Sale and this would be considered a very desirable area. I reckon the heretofore popular EA in this area (who shall remain nameless) may not be so popular from here on. The asking price in most cases is too high and the EA ought to have known, particulary coming into the summer, to pitch a bit lower in order to sell. So now they're probably telling all their clients not to worry, everything will be fine in the autum because there'll be loads of buyers by then!


----------



## bearishbull

signs of changing sentiment in banking sector?
Meanwhile the banks continue to sell their property assets. They say its to free up capital to lend more but in reality it would free up limited capital relative to the amount they already lend,they can already get unlimited money for the low ecb base rate from eurozone and stick their high irish margins on it, why didnt they sell these assets to free up capital for lending back in the 90's 80's etc?? Surely if they think property is gonna keep rising it would be better to hold appreciating assets as capital appreciation and rent saved would outstrip any one off benefits from selling the assets for a large capital sum now? AIB even seem eager to start selling before BOI, are they getting nervous?? Do as i do not as i say!

From Irish Times 
_AIB is to follow Bank of Ireland by embarking on a sale and leaseback next month of part of its branch network to release capital for its banking operations. *Jack Fagan* reports._
_AIB is planning to upstage its main competitor by putting about 15 of its best-located branches in Dublin city and suburbs on the market in August, a week or two before B of I is due to begin a sales campaign for 36 of its branches._
_Significant investments are seldom offered for sale in August, when many of the main players are on holidays._
_AIB apparently has not finalised the list of buildings to be offered for sale in the first round but, according to a bank source, the portfolio will include many of their best branches in the Dublin area._
_If, as expected, the first branches sell particularly well, the bank will then offer other buildings throughout the country, including those in provincial cities and large towns where they generally occupy prime trading positions._
_AIB's most valuable Dublin branch at Grafton Street also has frontage on to Wicklow Street and would be expected to sell for a yield of 2-2.25 per cent. Depending on the rent the bank is prepared to pay, this branch alone could be worth at least €35 million._
_Branches in Dame Street, Lower Baggot Street, Upper O'Connell Street, Blackrock, Morehampton Road, as well as Ranelagh and Dun Laoghaire, are likely to be among those going for sale._
_Suburban branches will have a valuation of €5-€8 million and should show returns of around 3 per cent for investors, depending on whether the leases provide for break options. About half the Bank of Ireland branches going for sale allow the bank to opt out after 15 years._
_A spokesman for AIB said yesterday that their property portfolio "remains under review." In fact the bank has favoured a sale and leaseback strategy for a considerable time and always planned to move ahead with the sale of the branch network once it had completed the disposal of the AIB Bank Centre for over €377 million._


----------



## tiger

bearishbull said:
			
		

> ... They say its to free up capital to lend more but in reality it would free up limited capital relative to the amount they already lend,...


It's not to free up captial, but to improve the return on capital.

Yes they can borrow from the central bank, but they need to have adequate Tier 1 & 2 capital (have a look at Capital adequacy)

A branch is worth, say €2M.  It's equivalent rental income is only 2-3% of this.  Through their normal business they expect to be able to generate more than this.


----------



## walk2dewater

bearishbull said:
			
		

> _Suburban branches will have a valuation of €5-€8 million and should show returns of around 3 per cent for investors__._


 
Yeah I can just see the world's investors lining up for this bargain.  What a joke.


----------



## room305

> _AIB's most valuable Dublin branch at Grafton Street also has frontage on to Wicklow Street and would be expected to sell for a yield of 2-2.25 per cent. Depending on the rent the bank is prepared to pay, this branch alone could be worth at least €35 million._


_

_This already sounds like an extraordinarily bad piece of business. If I had €35 million to invest I know I wouldn't be sticking it somewhere with a yield of only 2.25% ...


----------



## bearishbull

tiger said:
			
		

> It's not to free up captial, but to improve the return on capital.
> 
> Yes they can borrow from the central bank, but they need to have adequate Tier 1 & 2 capital (have a look at Capital adequacy)
> 
> A branch is worth, say €2M. It's equivalent rental income is only 2-3% of this. Through their normal business they expect to be able to generate more than this.


whatever they claim i think its smoke and mirrors,the big two banks are clamouring to sell their prime real estate which they have never done in the past. they have no problem lending at present,maybe they want to make their accounts look better but financial institutions dont sell prize assets that are set to increase substantially,only conclusion i can draw is they dont expect substantial increase over next ten+ years


----------



## tiger

bearishbull said:
			
		

> only conclusion i can draw is they dont expect substantial increase over next ten+ years



Would tend to agree with this, if the banks are selling property then you have to think they believe its at or close to the top of the cycle.

On the other hand there might be another objective here.  Banks are trying to move customers away from the counter and towards online.  They've already closed several city center branches, it'll be easier to close these others in 10-15 yrs time when they come up for rent reviews.


----------



## wolfie

Of the 114 houses for sale in Athlone on daft.ie, at least 35 are investor owned.The areas of Willow park, Alverno, meadowbrook, norwood, and auburn heights are traditionally student areas. The houses for sale are well below the prices for similar houses in other areas of Athlone I.E 145K TO 200K for a standard semi as opposed to 250 k plus for similar houses elsewhere in town.A sure sign that the investors are having second thoughts about the direction of this market and are getting out.We are being forever told by the media that there is a shortage of starter homes around the country I see no shortage in athlone .I see a big queue of investors lining up to bail from this market.


----------



## walk2dewater

Coming here soon...

http://cbs13.com/video/?id=8259@kovr.dayport.com

...but not before one last gasp I reckon...


----------



## bearishbull

tiger said:
			
		

> Would tend to agree with this, if the banks are selling property then you have to think they believe its at or close to the top of the cycle.
> 
> On the other hand there might be another objective here. Banks are trying to move customers away from the counter and towards online. They've already closed several city center branches, it'll be easier to close these others in 10-15 yrs time when they come up for rent reviews.


The fact they are continuing to rent the properties tells you they dont intend shutting many branches anytime soon, if closing branches is planned down the road they could always sell the assets when the time comes to close branches down and get any capital appreciation between now and then but they chose not to and would rather rent than hold onto prime real estate! they a)dont expect rents to rise significantly(or else they wouldnt be as eager to sell and rent) and b)they dont think the capital appreciation prospects are good enough to hold onto them, i can see the banks buying back their properties at knock down rates in years to come.


----------



## gearoidmm

The only reason that someone would spend 35 milllion to get a 2% yield is if they thought there was going to be significant capital appreciation in the future.  Otherwise you're much better off putting it into bonds.  However, the fact that the banks are selling out suggests that they don't feel that there is much scope for further price rises.

Is there anyone out there stupid enough to go for this?


----------



## bearishbull

gearoidmm said:
			
		

> The only reason that someone would spend 35 milllion to get a 2% yield is if they thought there was going to be significant capital appreciation in the future. Otherwise you're much better off putting it into bonds. However, the fact that the banks are selling out suggests that they don't feel that there is much scope for further price rises.
> 
> Is there anyone out there stupid enough to go for this?


Plenty, the pension funds for one, cant see any serious developer going for it unless theres options to demolish and build higher on the site. The sentiment is still positive among many "investors" out there, i know of an investor who bought a small 3 bed semi former corpo houses in west cabra(bad part cabra near all those new flats on royal canal) for 420k a few weeks ago,add in stamp duty etc and void rents and his yield is terrible and house is ugly in a bad area. i can see groups of investors clubbing in together in syndicates and buying these bank branches, "Guarunteed rent!!" "great pension" they'll say etc.
The larger properties likes grafton street will be bought by a pension fund or big retailer or the like as a flagship location rather than for rental yield.


----------



## ivuernis

Prepare to batten down the hatches


----------



## walk2dewater

Just in case theres any confusion over whats happening in the US...
http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2006/07/28/ushouse28.xml
[broken link removed]
http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2006/07/28/ushouse28.xml 

meanwhile... US inflation keeps rising...
http://www.rte.ie/business/2006/0728/usa.html

stagflation?
got gold?


----------



## ivuernis

walk2dewater said:
			
		

> stagflation?


Certainly the early warning signs are there for all to see but no one dare speak its name. A period of stagflation would certainly be worst of all possible scenarios for the Irish property market and economy.


----------



## Trueduc

Living in France, where the weather is possibly too hot and dry, I idly thought about buying in SW Ireland - somewhere cheap to go for the summer months  and early spring to play a little golf and maybe do some fishing. After a couple of weeks research I am absolutely staggered by the prices - especially for the dull, unimaginative new-builds that seem to have broken out, rash-like, on a hitherto quite attractive landscape. One could almost buy better in the UK and certainly €400k in SW France will get you a palace, land and still be able to afford to pay some French builders to fine tune it.
Anyway, the upshot of this minor tirade, I'm afraid, is to think again.


----------



## beattie

BOI have 'corrected' some of the negative sentiment emanating over the past few weeks......

http://www.rte.ie/business/2006/0731/houses.html


----------



## CharlieC

beattie said:
			
		

> BOI have 'corrected' some of the negative sentiment emanating over the past few weeks......
> 
> http://www.rte.ie/business/2006/0731/houses.html


 
Love the side panel on that link

(27 Apr 2006) 
Rates rises fail to dampen house growth   
 (12 Apr 2006) 
Rates will dampen house market - BoI


----------



## Guest107

*BOI forecast.*

I, for one, consider that so called 'forecast' by Dan McLaughlin to be the height of irresponsibility. 

It is indicative of lax and unsustainable lending practises in BoI itself of course  . 

Maybe Dan 'knows' they will launch the 50 year  interest only mortgage any day now !


----------



## CelloPoint

15,235 houses for sale nationally on daft.ie now. Up from 14,900 late last week.


----------



## SteelBlue05

CelloPoint said:
			
		

> 15,235 houses for sale nationally on daft.ie now. Up from 14,900 late last week.


 
Stop with the stats, its been widely agreed that these have little meaning without serious market research.


----------



## walk2dewater

Surely none of the Irish bank economists, real estate economists, auctioneer economists or other hired guns have any credibility whatsoever? Even looking beyond their obvious vested interest, this crowd have in fact a dismal track record in forecasting ECB rates, completions, even price rises. This has been overlooked because the general trend has proved them broadly correct. D McL in particular has been spectacularly poor in forecasting ECB rates 6-12mths out with any degree of accuracy. He changes his minded constantly yet he seems constantly behind the game. Imagine basing investment decisions on his public announcements? These people simply cannot be trusted in my view, they are far too compromised by their source of income.


----------



## bearishbull

The real story in that article/report is that he says price growth will slow to 3% next year which with inflation at 4% is a fall in real terms! when recent investors are getting less than inflation growth rates and are having to subsidise their "investments" every month there will be many heading for the exits.


----------



## CelloPoint

bearishbull said:
			
		

> The real story in that article/report is that he says price growth will slow to 3% next year which with inflation at 4% is a fall in real terms! when recent investors are getting less than inflation growth rates and are having to subsidise their "investments" every month there will be many heading for the exits.



And with average Dublin house prices around the E525k mark, 1% difference equates to E5k a year or a E9k salary drop if you're paying tax at 42%.


----------



## bearishbull

If you investment is falling in real terms by 1% a year it reduces your already paltry rental return by 1% so houses in dublin 4 and 6 will be yielding around 1-2% including capital appreciation - sorry depreciation! while the cost of financing the "investments" will be heading for 5%!! No brainer.


----------



## bearishbull

I also think mclaughlins being optimistic with a 3% growth rate,he's a banker, he's not gonna say prices will only grow by 0 or 1 % in nominal terms, if a banker says something will grow by 3% and he has a vested interest in the prediction then halve the predicted rate to get a more realistic prediction.


----------



## ivuernis

The BoI report said the average national house price would rise to €395k by the end of 2006 BUT latest Permanent TSB/ESRI House Price Index has the average national house price at €300k. How can these figures be so far apart? The BoI numbers don't add up!


----------



## Guest107

ivuernis said:
			
		

> The BoI numbers don't add up!



They don't have to 'add up'  because the lazy uncritical fatarses that call themselves journalists will report them as gospel....save maybe the Indo who have decided to prick this bubble in the national interest.....and fair play to the Indo for once because I am not a fan of them really 

.


----------



## CelloPoint

2Pack said:
			
		

> They don't have to 'add up'  because the lazy uncritical fatarses that call themselves journalists will report them as gospel....save maybe the Indo who have decided to prick this bubble in the national interest.....and fair play to the Indo for once because I am not a fan of them really
> 
> .



I don't think they've done it just yet. I would say they're building up the story though. I wouldn't be surprised if the headlines were prepared already.


----------



## whathome

Irish House Prices – A perfect storm?

Reading the “press release” from Bank of Ireland today reminded me of stockbroker predictions in the late nineties.   I wonder are we brewing the perfect storm for a crash …

- Reckless over-lending from banks and building societies
- Large speculative element to the market – Interest Only, 100% mortgages etc
- Huge dependency on the construction industry
- National obsession with property at the expense of real entrepreneurial activity
- Blind faith in economists with a vested interest which helped inflate the bubble
- Prices disconnected from fundamentals
- Rising interest rates following years of rates which were far too low for the economy
- Massive over-supply in the market due to rising completions

Has anyone mentioned the looming dip in demographics?  There was a big drop in the Irish birth rate from the mid 80’s to the mid 90’s.  Universities have even been advertising on the radio for undergraduate places in the last year or two!  What will happen to FTB numbers when these people reach buying age soon?


----------



## CelloPoint

I read through this article which I found very informative. (Thanks to Neffa who posted this on another thread already - I thought it was very relevant here too though!).

[broken link removed]

I liked this paragraph in particular: 

"The frenzy is driven by several factors: newly confident twentysomethings desperate to get on the housing ladder before it’s too late, the arrival of European banks offering mortgages with no money down and interest-only monthly payments, and a national preoccupation with landowning that probably dates back to when all land was in the hands of British gentry. The accompanying construction boom accounts for half of the country’s job growth in recent years."

And so it seems, for all the 'new found wealth of today's celtic cubs' lark we constantly hear about, the Irish inferiority complex (with regards to land ownership) is alive and well. The ignorant bling-bling display of wealth on show by the neuve riche in today's Ireland just typifies the obsessive one-up-man-ship and 'keeping up with the Smurfits' (to coin a phrase from David McWilliams) that is alive and well in the Irish psyche.

We're a nation of drunks and gamblers and have never been able to stand up on our own two feet with regards to managing our economy. There'll be no EU funding or foreign direct investment next time round. I'm expecting a massive hangover.


----------



## Guest107

CelloPoint said:
			
		

> I don't think they've done it just yet. I would say they're building up the story though. I wouldn't be surprised if the headlines were prepared already.


They have started to do it , saturday front page was the increase in the sixe of the average Irish mortgage by €1000 a week in 5 years based on CSO data.

The Indo did not mince words . Their headline on the front page was !



> [FONT=Arial, Verdana, Arial]*Mortgages increasing by €1,000 every week*[/FONT]


which is a lot truer than Dans soft landing waffle .


----------



## HighFlier

I like the bit in the article about Sir Tony's butler.

Was it J.P. Morgan who sold all his stocks in advance of the 1929 Wall St. crash when he started to hear stock tips from his shoe shine boy? !!


----------



## Duplex

HighFlier said:
			
		

> I like the bit in the article about Sir Tony's butler.
> 
> Was it J.P. Morgan who sold all his stocks in advance of the 1929 Wall St. crash when he started to hear stock tips from his shoe shine boy? !!


 
It was JFK's father.


----------



## room305

HighFlier said:
			
		

> I like the bit in the article about Sir Tony's butler.
> 
> Was it J.P. Morgan who sold all his stocks in advance of the 1929 Wall St. crash when he started to hear stock tips from his shoe shine boy? !!



No it was Joseph P. Kennedy, father of John F. Kennedy, the late American President. He sold his stocks in 1928 before the 1929 crash, locking multi-million dollar profits and indeed even profited from the crash due to owning a number of short positions on the market.

The phrase "sell when the shoeshine boy is buying" has been attributed to him, as he apparently received stock tips from someone who was shining his shoes. Convincing that the market was very much overbought and likely to crash.


----------



## macbri

Just read the BOI comments on rte website.

Average cost of house $400k with Dublin =$525k

We also have the comments from Brian Cowen our finance minister stating that Ireland isn't dependent on construction industry.

On same day,we get a report that stamp duty has increased 300% from 2000 to 2005 and housing output doubled in same period.

With information like the above from the top bank and financial steward in the country,is it any wonder that people are desperate to get on housing market and driving prices upwards without thinking through the consequences.
The higher prices go up,the harder will be the fall 

Interestingly,Australian interest rates are forecast to go up to 6.0% this Wednesday,local paper said over 25 years at 7.25%,repay $2900 pm for $400k loan,50 year mortgage would be $2500 pm.

These repayments would be the total net income of a lot of 1st time buyers


----------



## walk2dewater

There are enough "marginal" fools left to rush to buy over the next 6mths thus ratcheting prices significantly higher.

Apart from generalised insanity/stupidity, the reasons for this are:

"This is my last chance to qualify for a mortgage big enough to buy a house..."

and

"I want to lock-in a fixed rate..."

Both comments ended off by "...before I'm priced out and will never have my own house"


----------



## ivuernis

macbri said:
			
		

> Just read the BOI comments on rte website.
> Average cost of house €400k with Dublin = €525k


Again, these figures diverge MASSIVELY from the most recent ESRI/PTSB House Price Index, that 
gives the average price of a house nationally as €300k and the average in Dublin as just over €400k. 

How do the BoI justify these figures and why aren't the media questioning their validity?


----------



## phoenix_n

phoenix_n said:
			
		

> as a side note. When you can buy a half a house (or [broken link removed] if your posh) for 320 you


 
This is now advertised for 280K. 12.5% drop.

(could not find the cache of it though)


----------



## ivuernis

W2DW, your prediction of one final hurrah maybe coming true... 
Irish house prices increased by 15.2% in year to June; Rate of increase more than trebles in first half of 2006


----------



## Guest126

I loved the kitchen in that maisonette - what a steal


----------



## Mrs Mac

It is gorgeous - I simply have to have it


----------



## Guest126

Mrs Mac - you're clearly a person of great taste too


----------



## phoenix_n

ivuernis said:
			
		

> W2DW, your prediction of one final hurrah maybe coming true...
> Irish house prices increased by 15.2% in year to June; Rate of increase more than trebles in first half of 2006


 
Anyone involved in buying or selling this year can testify how crazy it was. I was even bidding on a house that i had yet to view.


....

Actually just thinking in total:
Bid on 3 houses in galway - outbidded
Bid on 1 house in Tipperary -sale agreed-  Problems with title 
Bid on 2 bed terrace in Phibsboro -sale agreed-  No planning permission for extension
Bid on 2 bed terrace in Phibs - Outbidded
Bid on 1 bed terrace in Phibs - outbidded
Bid on 1 bed terrace in phibs - outbidded
Bid on 2 bed terrace in phibs - outbidded (blown out of water more like it)

Thats 12 houses from feb to july

and number 13. New build in Phibs.Apartment. Backed out owing to current view of market.

Mad huh.


----------



## room305

CapitalCCC said:
			
		

> I loved the kitchen in that maisonette - what a steal



Ha, ha! I think you could at least clean up a bit if you want to sell your house.


----------



## Guest126

Not in today's market - the EA probably expects to have a queue of people with the cheque books out for such "LOW MAINTENANCE" (literally by the look of it!!) living in our magnificent cosmo capital!


----------



## CelloPoint

phoenix_n said:
			
		

> Anyone involved in buying or selling this year can testify how crazy it was. I was even bidding on a house that i had yet to view.
> 
> 
> ....
> 
> Actually just thinking in total:
> Bid on 3 houses in galway - outbidded
> Bid on 1 house in Tipperary -sale agreed-  Problems with title
> Bid on 2 bed terrace in Phibsboro -sale agreed-  No planning permission for extension
> Bid on 2 bed terrace in Phibs - Outbidded
> Bid on 1 bed terrace in Phibs - outbidded
> Bid on 1 bed terrace in phibs - outbidded
> Bid on 2 bed terrace in phibs - outbidded (blown out of water more like it)
> 
> Thats 12 houses from feb to july
> 
> and number 13. New build in Phibs.Apartment. Backed out owing to current view of market.
> 
> Mad huh.



I would say you're playing it sensible. The risk is huge at the moment. Perhaps 13 is lucky for you after all?


----------



## room305

What I've seen so far has convinced me to sell. Will look at putting my house on the market in Oct/Nov.

Myself and my gf are really not looking forward to telling our parents what we're doing. They think selling property in order to rent is tantamount to treason.

Funny thing is, once we sell we'll actually lose some discretionary income, as rent will cost more than mortgage outgoings. However, in terms of risk/return, it makes no sense for us to be burdened with a mortgage on what is essentially an FTB property.


----------



## SteelBlue05

room305 said:
			
		

> Funny thing is, once we sell we'll actually lose some discretionary income, as rent will cost more than mortgage outgoings. However, in terms of risk/return, it makes no sense for us to be burdened with a mortgage on what is essentially an FTB property.


 
So what is your long term plan?

Seems a bit of bad decision to sell in order to pay rent which will be greater than your current repayments. Unless I just dont understand these things.

Are you now not going to be burdened by an even bigger rent repayment?


----------



## Guest107

The dude will bank his profits to leverage his reentry to the market at or near bottom . He will get a non FTB property in a bette rlocation for less than his FTB property cost .....is that not the plan dude ???

Mrs 2Pack and I also considered selling but we live in a highly distorted micromarket with stonking  planning permission difficulties restricting new builds with no enurement clauses .


----------



## bearishbull

phoenix_n said:
			
		

> But they are an indication nevertheless of inventory coming onto the market. If the public are somewhat nervous you will find that many 'sale agreed' properties wil come onto the market again. This can only really be noticed by an unusual increase in inventory.
> 
> as a side note. When you can buy a half a house (or [broken link removed] if your posh) for 320 you know the market is warped and even [broken link removed] for 475 is not realistic


 What kips for the price. You could rent a great apartment/house in nice part dublin for less than interest only mortgage on those properties,this tells you market is highly overvalued.


----------



## SteelBlue05

2Pack said:
			
		

> The dude will bank his profits to leverage his reentry to the market at or near bottom . He will get a non FTB property in a bette rlocation for less than his FTB property cost .....is that not the plan dude ???
> 
> Mrs 2Pack and I also considered selling but we live in a highly distorted micromarket with stonking planning permission difficulties restricting new builds with no enurement clauses .


 
Oh right, they are going to time the market, great idea  .


----------



## Guest126

Hey don't knock my maisonette, I have my eye on that little gem!!


----------



## room305

SteelBlue05 said:
			
		

> So what is your long term plan?
> 
> Seems a bit of bad decision to sell in order to pay rent which will be greater than your current repayments. Unless I just dont understand these things.
> 
> Are you now not going to be burdened by an even bigger rent repayment?



I'm happy to take the hit on discretionary income because I know that it is a bill that will not rise much in the next few years. On the other hand interest rates will continue to increase.

However, the primary reason for selling is simply I don't want to be stuck where I am now. It's not somewhere I'd ever want to bring up kids (though such an event is probably a good few years away) so I'd prefer not to be stuck living here unable to sell because the market has tanked. It is the FTB market that will take disproportionately large hit when the market does actually collapse.

Also, I could if I wished simply park the gain in a bank and pay rent for about five or six years from it. I won't be doing that but it will be reassuring to have it there just in case. I'm expecting a substantial salary jump in the next year or so too, so that should definitely put me in a position to comfortably afford to rent a property I could never afford to buy.

I shall be happy to post here letting people know how I get on.


----------



## room305

2Pack said:
			
		

> The dude will bank his profits to leverage his reentry to the market at or near bottom . He will get a non FTB property in a bette rlocation for less than his FTB property cost .....is that not the plan dude ???



Not necessarily. As I - and several others - have commented several times in this thread, property is not like stocks so any crash will likely play out over several years. I will consider buying when prices return to reasonable levels but until then I will be happy to rent, leaving the investor to subsidise my lifestyle.


----------



## SteelBlue05

room305 said:
			
		

> I'm happy to take the hit on discretionary income because I know that it is a bill that will not rise much in the next few years. On the other hand interest rates will continue to increase.
> .


 
Just be careful about the assumption that rent will not increase much versus what a mortgage repayment would. I can imagine a lot of landlords trying to push up rents due to the increase in interest rates. 

Anyways my point is that you cannot predict the property market\interest rates\rents and as long as you do what makes sense for yourself then you can't really go too far wrong.


----------



## phoenix_n

room305 said:
			
		

> I'm happy to take the hit on discretionary income because I know that it is a bill that will not rise much in the next few years. On the other hand interest rates will continue to increase.
> 
> However, the primary reason for selling is simply I don't want to be stuck where I am now. It's not somewhere I'd ever want to bring up kids (though such an event is probably a good few years away) so I'd prefer not to be stuck living here unable to sell because the market has tanked. It is the FTB market that will take disproportionately large hit when the market does actually collapse.
> 
> Also, I could if I wished simply park the gain in a bank and pay rent for about five or six years from it. I won't be doing that but it will be reassuring to have it there just in case. I'm expecting a substantial salary jump in the next year or so too, so that should definitely put me in a position to comfortably afford to rent a property I could never afford to buy.
> 
> I shall be happy to post here letting people know how I get on.


 
Smart move. Not sure how much equity you are hoping to release but better to realise those funds now rather than be greedy and repent afterwards.

You should , if you have not already, max your pension contributions and any shortfall in montly needs can be topped up using your available cash.

This whole doom and gloom may be all talk but looks at a real living example http://www.askaboutmoney.com/showthread.php?t=33378


----------



## CelloPoint

SteelBlue05 said:
			
		

> Just be careful about the assumption that rent will not increase much versus what a mortgage repayment would. I can imagine a lot of landlords trying to push up rents due to the increase in interest rates.



There is no relationship between a landlord's mortgage repayments and what the market dictates the rent to be. For example, I'm living in a town-house in Dublin 6 (built in 89) and am paying for one room what the landlord is probably paying on mortgage repayments for the whole house. Another example: My friend bought 75% of a 2-bed flat with his gf about 2 months ago. The place cost 430k and is in Summerhill near the Royal Canal. He is subsidising his tenants in the hope of capital appreciation while he's off working in London.


----------



## Guest107

I agree wholeheartedly that todays FTB (in mid/outer Leinster somewhere scenario) will be left carrying the can and unable to afford an STB type _area and property_ going forward because of illiquidity in their FTB area.


----------



## SteelBlue05

2Pack said:
			
		

> I agree wholeheartedly that todays FTB (in mid/outer Leinster somewhere scenario) will be left carrying the can and unable to afford an STB type _area and property_ going forward because of illiquidity in their FTB area.


 
Room305, what area have you currently bought in?


----------



## whathome

room305 said:
			
		

> I'm happy to take the hit on discretionary income because I know that it is a bill that will not rise much in the next few years. On the other hand interest rates will continue to increase.


 
And it looks like the pace of interest rate increases will speed up:
http://www.bloomberg.com/apps/news?pid=20601085&sid=aALvocHK7jks&refer=europe


----------



## Guest107

*Australia*

Their bubble peaked a year and a half back, early on in a rate tightening cycle

[broken link removed]



> "Sales teams are reporting a distinct lack of urgency among consumers, all at a time of an apparent rental crisis," he said.



They owe about what we anbd the Brits do, per capita



Their Biffo, Mr Costello said



> he Reserve Bank meets tomorrow and will most likely put _interest rates up to 6 per cent, the highest level in five years._  Treasurer Peter Costello sounded a warning yesterday, saying _managing the economy was now proving difficult._



But the Australians thought that they had engineered a 'soft landing' in the past 18 months. And then

[broken link removed]


----------



## room305

SteelBlue05 said:
			
		

> Room305, what area have you currently bought in?



Finglas West.


----------



## phoenix_n

The sydney market possible hard landing is a warning to our market.


----------



## phoenix_n

room305 said:
			
		

> Finglas West.


 
Your f***ed mate. Only joking 

But you may be wise to cash in as soon as you can.


----------



## room305

phoenix_n said:
			
		

> Your f***ed mate. Only joking
> 
> But you may be wise to cash in as soon as you can.



 Surprisingly nice area actually but I'd be unsure of bringing up a kid here should the market tank and I end up unable to sell my house. House is way too small for a kid anyway.

As I said, I'll keep people informed of how it's going but it'll be a few months yet before I sell up.


----------



## CelloPoint

Thanks for that bloomberg article whathome.

I found the following snipets concerning: (emphasis mine)

"...The ECB is likely to raise interest rates *this week* for the fourth time in eight months to curb inflation fanned by record oil prices and the strongest economic expansion since 2000, *all 34 economists* surveyed by Bloomberg News said. It would speed up the pace of rate moves to every two months from quarterly...

...ECB President Jean-Claude Trichet prepared the ground for a rate increase at the bank's Aug. 3 meeting when he said on July 6 *the bank will show ``strong vigilance'' on inflation*. Trichet has used that language to signal the last three ECB rate increases. Policy makers probably will boost its benchmark rate to 3 percent from 2.75 percent...

...For now, investors expect the ECB to keep raising borrowing costs, boosting the benchmark rate to *at least 3.25 percent by December*, futures trading shows. The yield on the three-month futures contract for December was at 3.57 percent at 10:59 a.m. in Frankfurt today...

What effect does a 1/4% increase have on a 400k mortgage?


----------



## CelloPoint

Oh look, this thread has 40,000 hits.


----------



## ivuernis

CelloPoint said:
			
		

> What effect does a 1/4% increase have on a 400k mortgage?


Find out here...


----------



## Guest126

Yea but not 40,000 different people, I myself have probably viewed it a few hundred times...does that mean there are only about 80 of us going off in a rant about property...the other 4m are buying away, blissfully unaware of our talk!?


----------



## phoenix_n

CapitalCCC said:
			
		

> Yea but not 40,000 different people, I myself have probably viewed it a few hundred times...does that mean there are only about 80 of us going off in a rant about property...the other 4m are buying away, blissfully unaware of our talk!?


 
Thats true but its in places like here where the first rumblings are heard.


----------



## Guest126

I am as bearish as anyone, but I would not underestimate the ignorance of people when it comes to property and investing!


----------



## room305

Did a straw poll of the office at lunch time and apart from one Polish guy they all think I'm mad to sell up and rent.

So the sentiment here remains fairly bullish.


----------



## phoenix_n

room305 said:
			
		

> Did a straw poll of the office at lunch time and apart from one Polish guy they all think I'm mad to sell up and rent.
> 
> So the sentiment here remains fairly bullish.


 
You'd rather sell though with that prevailing thought than if the straw poll said the reverse.


----------



## JumpShot

http://today.reuters.com/news/ArticleNews.aspx?type=reutersEdge&storyID=2006-07-28T200841Z_01_N28147013_RTRUKOC_0_US-BIZFEATURE-MORTGAGES.xml
http://today.reuters.com/news/newsA...&src=073106_0854_INVESTING_comment_&_analysis 
I won't be buying till they offer me one of those free swimming pools


----------



## CelloPoint

ivuernis said:
			
		

> Find out here...



Thanks for that link. A .25% rate increase mortgage on an average Dublin house (400k) over 35 years equates to about E700 extra per year (at current best rates - National Irish Bank). Or equivalently a 1,200k salary drop.


----------



## room305

phoenix_n said:
			
		

> You'd rather sell though with that prevailing thought than if the straw poll said the reverse.



Absolutely. It's far easier to sell something when people want to buy.

It's like when Michael O'Leary was asked whether it was a good time to buy property in Poland. He said he wasn't sure about it being a good time to buy foreign property but it was certainly a fantastic time to be selling it.


----------



## CelloPoint

phoenix_n said:
			
		

> Thats true but its in places like here where the first rumblings are heard.



I would agree. The plebs will be the last ones to find out when they read the Sunday Independent.


----------



## powderblue78

Timing the market eh....

Does anyone think waiting until interest rates start to DROP would be a good time to jump on the property wagon?


----------



## Duplex

powderblue78 said:
			
		

> Timing the market eh....
> 
> Does anyone think waiting until interest rates start to DROP would be a good time to jump on the property wagon?


 

You might be waiting a while.  Nevertheless many bubble markets have seen falling prices coupled with falling interest rates (Japan 1991-2006) Germany, UK, US etc.  Falling interest rates are usually a response to recessionary episodes; an attempt by  central banks to reflate in a deflationary period.  Its questionable if consumers have much more capacity for debt in any case.


----------



## ivuernis

Another view on the state of the US property market...
The Coming Housing Crash

_"Unless the Fed can inflate another bubble, the end of the real estate boom will practically guarantee a recession"_


----------



## gidxl03

Room305,
before betting the family home, here are a few (no doubt controversial) points to consider;

[1]. interest rates may return to low levels in the next 2 years. See the cost of fixing your mortgage at http://www.bankofireland.ie/html/gws/personal/buy_house/legal_interest_rates/index.html#doclink2
*1* year fixed: *4.49%*
*20* year fixed *5.49%*

[2]. As the US dollar drops relative to the euro, this may (a) threaten to cause recession in Euro zone, (b) make exports more expensive. These factors will put pressure on the ECB to keep interest rates low

[3]. What if globalization means this time it really is different! (i.e. HousePrice /Income remains at 10 instead of 2.5) Since the economy is now more globalized than ever before, it is less likely that a situation like the UK in 1989 will re-occur. In the UK they were going into a recession but had to increase interest rates regardless because they wanted to keep the STG /DMARK constant.

See the third last paragraph in http://www.bloomberg.com/apps/news?pid=20601085&sid=aALvocHK7jks&refer=europe

[4] Interest rates are on the way up now because the Germans are confident about the future, but that confidence is likely to be shaken when the US stop living beyond their means

[5] What if Irish banks AIB and BOI are not selling up to cash in on investment. Instead their profits are lagging behind those of internet only banks.

[6] Other factors such as energy cost, and cost of goods from China starting to rise will tend to increase inflation (and influence higher rates) but it is difficult to predict which factors will prevail.

[7] It will be just a difficult to know when to buy back into a fallen market as it is to get out. While you are prepared to rent for 7 years, you will be inconvienced by landlords who want to sell up themselves.

[8] What rate will you get on your lump sum? 5% gross taxed at 22% DIRT is less than 5% on your PPR. And you are paying out rent with only minor rent relief. Calculate exactly how much you will gain by selling up now. E.g. Simulate a 7% rise in property values for the next 4 years, followed by a crash of 15% and 3 years of decline at 2%. Deduct expenses for selling, rental, DIRT tax on your savings.


The internet is a big place - make sure you research positive factors such as such a 
- low tax for investors (no annual property tax in Ireland)
- low tax for corporations
- high Irish borrowing is not all just for lifestyle (growing population, investments in UK and elsewhere)
- Irish are more inclined to store their wealth in property than equities.
- stable, law abiding, English speaking


It sure is difficult to predict, and I wouldn't bet the family home on the outcome!


----------



## powderblue78

Duplex said:
			
		

> You might be waiting a while. Nevertheless many bubble markets have seen falling prices coupled with falling interest rates (Japan 1991-2006) Germany, UK, US etc. Falling interest rates are usually a response to recessionary episodes; an attempt by central banks to reflate in a deflationary period. Its questionable if consumers have much more capacity for debt in any case.


 
Good point, although waiting isn't a problem!  At least I would be entering at a fixed point in time independant of any bull/bear sentiments one can get caught up in.


On another point, having read througha good lot of this thread (although not all 4x pages!), I am intrigued about where the main cast of character lie property wise.  Let's be honest here, every is looking after themselves:
- If you don't own property, you want price to stay level or drop.  
- If you do own property, you want prices to stay level or rise

With that in mind, how much does owning or not owning makes ones sentiment sway towards bull or bear, towards what we want to believe will happen

So duplex/305/bearishbull/bluesteel and anyother regular, do you own or not and what year did you buy if you own? ( no need to ask if you are bulls or bears  )


----------



## walk2dewater

gidxl03 said:
			
		

> It sure is difficult to predict, and I wouldn't bet the family home on the outcome!


 
Sure is difficult to predict.  But we try!

But we arnt talking about the 'family home' here, are we?  Given the limited financial savy of J Soap the best advice would be to hammer down the mortgage on the primary residence.  That way Mrs and Mr Soap can muddle through the recession with the burden of only a SMALL mortgage.

However, there's the little issue of all those ... ahem.. 'investment' properties.


----------



## thefisherman

all you have to do is look at the property section of AAM.
some of the wise investors seem to think nothing of using all their equity in their PPR to buy overpriced 'investment' properties where the rent will not even cover the interest on the mortgage.
those guys are in over their heads from day one and are very exposed to rate rises etc.

in a way the shoe shine lads are still buying as the smart guys are selling.
there is nothing new under the sun.
if they dont learn from history they will learn the hard way.

my wife has three properties, all bought pre-2000, 70 per cent equity.
we would not even consider buying property now. that bird has left the building a long time ago.
we are considering selling one property to have beef up our cash reserve.


the fishermans brother.


----------



## whathome

powderblue78 said:
			
		

> do you own or not and what year did you buy if you own?


 
I own two properties and don't really care if the market goes up or down.  I do however believe that we are experiencing a bubble and from current evidence, that bubble will not last much longer.


----------



## SteelBlue05

whathome said:
			
		

> I own two properties and don't really care if the market goes up or down. I do however believe that we are experiencing a bubble and from current evidence, that bubble will not last much longer.


 
And what evidence is that? There is no evidence, its speculation.


----------



## whathome

SteelBlue05 said:
			
		

> And what evidence is that? There is no evidence, its speculation.


 
I've posted several times about the evidence I'm seeing as we try to move house in the current market.


----------



## Duplex

gidxl03 said:
			
		

> Room305,
> before betting the family home, here are a few (no doubt controversial) points to consider;
> 
> [1]. interest rates may return to low levels in the next 2 years. See the cost of fixing your mortgage at http://www.bankofireland.ie/html/gws/personal/buy_house/legal_interest_rates/index.html#doclink2
> *1* year fixed: *4.49%*
> *20* year fixed *5.49%*
> 
> [2]. As the US dollar drops relative to the euro, this may (a) threaten to cause recession in Euro zone, (b) make exports more expensive. These factors will put pressure on the ECB to keep interest rates low
> 
> [3]. What if globalization means this time it really is different! (i.e. HousePrice /Income remains at 10 instead of 2.5) Since the economy is now more globalized than ever before, it is less likely that a situation like the UK in 1989 will re-occur. In the UK they were going into a recession but had to increase interest rates regardless because they wanted to keep the STG /DMARK constant.
> 
> See the third last paragraph in http://www.bloomberg.com/apps/news?pid=20601085&sid=aALvocHK7jks&refer=europe
> 
> [4] Interest rates are on the way up now because the Germans are confident about the future, but that confidence is likely to be shaken when the US stop living beyond their means
> 
> [5] What if Irish banks AIB and BOI are not selling up to cash in on investment. Instead their profits are lagging behind those of internet only banks.
> 
> [6] Other factors such as energy cost, and cost of goods from China starting to rise will tend to increase inflation (and influence higher rates) but it is difficult to predict which factors will prevail.
> 
> [7] It will be just a difficult to know when to buy back into a fallen market as it is to get out. While you are prepared to rent for 7 years, you will be inconvienced by landlords who want to sell up themselves.
> 
> [8] What rate will you get on your lump sum? 5% gross taxed at 22% DIRT is less than 5% on your PPR. And you are paying out rent with only minor rent relief. Calculate exactly how much you will gain by selling up now. E.g. Simulate a 7% rise in property values for the next 4 years, followed by a crash of 15% and 3 years of decline at 2%. Deduct expenses for selling, rental, DIRT tax on your savings.
> 
> 
> The internet is a big place - make sure you research positive factors such as such a
> - low tax for investors (no annual property tax in Ireland)
> - low tax for corporations
> - high Irish borrowing is not all just for lifestyle (growing population, investments in UK and elsewhere)
> - Irish are more inclined to store their wealth in property than equities.
> - stable, law abiding, English speaking
> 
> 
> It sure is difficult to predict, and I wouldn't bet the family home on the outcome!


 

You  should consider the pricing power of Irish labour in an increasingly global economy. The average Chinese industrial wage equates to about 0.70c($) per hour, similar to that in India.  

Debt erosion in real terms will take much longer than before because the poorest two thirds of the global population are now offering their labour and  low cost locations in direct competition to the west.  

Increased incomes are a result of increased productivity, the most productive sector of an economy is manufacturing, the West is loosing manufacturing jobs while the East is building manufacturing capacity.

Its surprising that many commentators fail to mention the deflation in Japanese incomes over the past decade, as one of the reasons that Japan has struggled to emerge from their last property bubble; even with the aid of 0% interest rates.  

As David Ricardo said 200 years ago; 

_*"Labour is cheap when it is plentiful"*_


----------



## SteelBlue05

whathome said:
			
		

> I've posted several times about the evidence I'm seeing as we try to move house in the current market.


 
You posted one example from what I can see. You shouldnt assume this one example is indicative of the entire market.


----------



## whathome

SteelBlue05 said:
			
		

> You posted one example from what I can see. You shouldnt assume this one example is indicative of the entire market.


 
I never assume  

You're correct - it's very difficult to judge the sentiment of a market...I suppose that's why this thread was started.

Good to hear positions from both sides - it's an interesting debate for sure.


----------



## thewatcher

ivuernis said:
			
		

> W2DW, your prediction of one final hurrah maybe coming true...
> Irish house prices increased by 15.2% in year to June; Rate of increase more than trebles in first half of 2006


 
Could the final hurrah not have been the first 6 months of this year,it always seemed strange to me that the "soft landing" was called in the space of about 2 weeks after the highest price rises since 2001.
It seems to me that a lot of people are banking on the market going back into overdrive come september,if this doesn't happen panic will set in.


----------



## singinvestor

> It seems to me that a lot of people are banking on the market going back into overdrive come september,if this doesn't happen panic will set in


 
It'll be intersting to see how much PR(relative to previous years)will come out of the construction industry and EAs this autumn.  If there is any sense of a perceived market correction in the brewing, you can be assured property pundits will do all they can to calm everyone's nerves and prop up the market with media releases on rising population stats, soft landing theories, affordability, how wealthy we are due to property, etc. One only has to look at the conflicting messages coming from EAs in the media today on accelerating prices and how we are heading towards a soft landing and warnings from the CB on how "vunerable" our economy is to rising house prices.  At the end of the end of the day, it's as much about fighting for the hearts and minds of buyers as it is about selling property!


----------



## ivuernis

thewatcher said:
			
		

> Could the final hurrah not have been the first 6 months of this year,it always seemed strange to me that the "soft landing" was called in the space of about 2 weeks after the highest price rises since 2001.
> It seems to me that a lot of people are banking on the market going back into overdrive come september,if this doesn't happen panic will set in.


Perhaps. Although in my area (Cork) I have not seen prices rise as spectacularly as the BoI data would suggest. 

As for the reason why there is a €100k difference between the national averages produced by the BoI and ESRI/PTSB reports I do not know. Having looked at the BoI report they get their values for house prices from the Department of the Environment.


----------



## binman

It's been about 20 pages since anybody mentioned the SSIAs.  I think that these are still a factor, albeit not as significant as they were once thought to be.

My feeling is that the extra cash flooding onto the economy between now and next May is going to keep consumer spending firmly in the black. That extra spending should help to keep unemployment down, at the expense of yet more inflation.

I can see the cash providing an underpinning of sorts in certain parts of the property market (particularly STBs).  That said I think there will be far fewer investors stumping up the deposits on rentals in less desireable locations.  And, as we all know, when the chips are down it's all about location.


----------



## bogwarrior

Interesting article in todays Sydney Morning Herald regarding the impact of rising interest rates on local (and interstate) property prices.  Sydney, as you probably know, also underwent a massive growth in prices from the mid-90s until early 2004.  In 2004-2005 property prices stalled, and now by the looks of it, the prices are dropping, particularly in the saturated apartment market in the city centre.  Bear in mind that interest rates are currently around 7% and the lowest they were was around 4.5% a few years back.

Interest rate rise 'final straw for property'


----------



## Duplex

Merrill Lynch have declared US housing a bear market.




> This past week *Merrill Lynch* declared that housing is in a bear market and that a "buyer's market" for homes should last for "years." Merrill notes that the unsold inventories of homes continues to pile up, and that resale prices are flattening in the single-family market, while declining for condominiums...


 
http://www.nationalmortgagenews.com/columns/hearing/


----------



## walk2dewater

We are coming up to a total panic “must get on the ladder” phase.

This Thursday some people will see that they qualify for a smaller mortgage at their current incomes.  They will also realise that fixed rates are heading higher.  Both these factors will result in a wall of desparate buyers.

This is how the Sheeple think.


----------



## room305

gidxl03 said:
			
		

> Room305,
> before betting the family home, here are a few (no doubt controversial) points to consider;




It's not the family though. That's one of the reasons I'm selling. If I owned a home that I was happy to live in for the next 15 years then it would be a  different story.
 


			
				gidxl03 said:
			
		

> [1]. interest rates may return to low levels in the next 2 years. See the cost of fixing your mortgage at http://www.bankofireland.ie/html/gws/personal/buy_house/legal_interest_rates/index.html#doclink2
> *1* year fixed: *4.49%*
> *20* year fixed *5.49% *




I'd be surprised if they did but then again it is difficult to call the economy at the moment. Certainly if we have widespread recession and deflation, interest rates will be dropped. At the moment interest rates aren't really a major factor for me and I could reasonably comfortably afford the 20 year fixed rate quoted above.
 


			
				gidxl03 said:
			
		

> [2]. As the US dollar drops relative to the euro, this may (a) threaten to cause recession in Euro zone, (b) make exports more expensive. These factors will put pressure on the ECB to keep interest rates low




See above.
 


			
				gidxl03 said:
			
		

> [3]. What if globalization means this time it really is different! (i.e. HousePrice /Income remains at 10 instead of 2.5) Since the economy is now more globalized than ever before, it is less likely that a situation like the UK in 1989 will re-occur. In the UK they were going into a recession but had to increase interest rates regardless because they wanted to keep the STG /DMARK constant.
> 
> See the third last paragraph in http://www.bloomberg.com/apps/news?pid=20601085&sid=aALvocHK7jks&refer=europe



Do you genuinely believe owning a large mortgage is a good position to be in in the event of a recession? Unless you work in the public sector where you can remain oblivious, I would want to be both debt free and highly mobile.



			
				gidxl03 said:
			
		

> [4] Interest rates are on the way up now because the Germans are confident about the future, but that confidence is likely to be shaken when the US stop living beyond their means




See above.
 


			
				gidxl03 said:
			
		

> [5] What if Irish banks AIB and BOI are not selling up to cash in on investment. Instead their profits are lagging behind those of internet only banks.




Their profits aren't lagging behind and I doubt they would cash in in such a case anyway, if the expected significant capital appreciation in future years. Nobody wants to face a crowd angry shareholders in five years time baying for blood and demanding to know why they sold the company assets for a song. They are obviously betting this is a highly unlikely scenario.
 


			
				gidxl03 said:
			
		

> [6] Other factors such as energy cost, and cost of goods from China starting to rise will tend to increase inflation (and influence higher rates) but it is difficult to predict which factors will prevail.




I think you could take your pick of any of these possible scenarios: deflation, inflation, hyper-inflation, stagflation. In not one of them would you want to own a large mortgage.
 


			
				gidxl03 said:
			
		

> [7] It will be just a difficult to know when to buy back into a fallen market as it is to get out. While you are prepared to rent for 7 years, you will be inconvienced by landlords who want to sell up themselves.




If the market crashes those landlords will struggle to sell. They certainly won't be willing to kick us out while the house is on the market and yes, it may be inconvenient if we have to move a few times but we'll cope.
 


			
				gidxl03 said:
			
		

> [8] What rate will you get on your lump sum? 5% gross taxed at 22% DIRT is less than 5% on your PPR. And you are paying out rent with only minor rent relief. Calculate exactly how much you will gain by selling up now. E.g. Simulate a 7% rise in property values for the next 4 years, followed by a crash of 15% and 3 years of decline at 2%. Deduct expenses for selling, rental, DIRT tax on your savings.




Would you consider a 7% rise for the next four years realistic? Followed by a decline of only 21%? Assuming on average 4% p.a. growth in average wages, in your scenario, this would still leave the average house trading at around 10x the average wage. It is far more likely that prices will return to the historical average of between 3x-6x annual wage.

As for putting the money on deposit - we won't be doing so. The money lump sum will be invested for the next 5-10 years while we pay rent from our income.
 


			
				gidxl03 said:
			
		

> The internet is a big place - make sure you research positive factors such as such a
> - low tax for investors (no annual property tax in Ireland)
> - low tax for corporations
> - high Irish borrowing is not all just for lifestyle (growing population, investments in UK and elsewhere)
> - Irish are more inclined to store their wealth in property than equities.
> - stable, law abiding, English speaking
> 
> It sure is difficult to predict, and I wouldn't bet the family home on the outcome!


These and other factors started the boom but sometime around 2001 things became very much divorced from reality. A return to these prices is highly likely over the next several years.

Once again though, this isn't the family home we are betting. The main danger for us is that when the market collapses we will be left unable to sell and will be stuck living in a home that is unsuitable for our future needs (e.g. if we decide to have children etc.). On balance I would rather take my chances in the rental market than be stuck with a large mortgage in a very uncertain economic climate.


----------



## phoenix_n

Duplex said:
			
		

> Merrill Lynch have declared US housing a bear market.
> 
> 
> 
> [URL="http://www.nationalmortgagenews.com/columns/hearing/"]http://www.nationalmortgagenews.com/columns/hearing/[/URL]


 
Duplex quotes part of todays indo in his blog.

"Figures in a research report by Davy Stockbrokers estimated recently that up to four out of every 10 mortgages sold to first-time buyers are now 100pc homeloans"

4 in 10 of FTBs. Thats near criminal what they are doing. In a normal market you might agree with it but the way property is been traded like shares these days makes it very dangerous. To give some large sums of money to people with no clear track record of savings to speculate in a market is going to cause tremendous problems in the near future.


----------



## thefisherman

thats it, property is now being traded almost like shares-and like shares one must be prepared to sell to lock in profits, more and more investors will be selling as the property market is unstable.


----------



## phoenix_n

When demand falls and developers off load their apartments at massive reduced prices ( because they can take the hit and still realise a reduced profit ) then many a FTB will find themselves in the evitable position of being in debt. Somthing all our folks warned us against.


----------



## Persius

walk2dewater said:
			
		

> We are coming up to a total panic “must get on the ladder” phase.
> 
> This Thursday some people will see that they qualify for a smaller mortgage at their current incomes. They will also realise that fixed rates are heading higher. Both these factors will result in a wall of desparate buyers.
> 
> This is how the Sheeple think.


 
Does indeed sound like following the herd, but may actually be not so stupid if you think the interest rates are more likely to come down again



			
				gidxl03 said:
			
		

> Room305,
> before betting the family home, here are a few (no doubt controversial) points to consider;
> [1]. interest rates may return to low levels in the next 2 years. See the cost of fixing your mortgage at [broken link removed]
> 1 year fixed: 4.49%
> 20 year fixed 5.49%
> ...


 
Many people are predicting that the US economy could run into trouble and the dollar may decline in value wrt the euro as a result. This is bad for Germany (the world's largest exporter) and will affect growth there, and throughout the eurozone. The ECB may be forced to drop rates again to prevent the Euro rising too much against the dollar.

I sometimes think the most likely scenario to force interest rates, and thus Irish house prices down, up is a continuing boom in the US and a simultaneous recovery in Germany. But neither of these things seem to be really happening. Since the Fed and the ECB dropped the rates so aggressivly post 9/11 everyone seems to be working off a new mean interest rate of about 4 % rather than 8 % in the past (maybe it really "is different"  ).


----------



## room305

Persius said:
			
		

> Many people are predicting that the US economy could run into trouble and the dollar may decline in value wrt the euro as a result. This is bad for Germany (the world's largest exporter) and will affect growth there, and throughout the eurozone. The ECB may be forced to drop rates again to prevent the Euro rising too much against the dollar.



You seem to be forgetting about inflation.


----------



## walk2dewater

Persius said:
			
		

> Does indeed sound like following the herd, but may actually be not so stupid if you think the interest rates are more likely to come down again
> 
> 
> 
> Many people are predicting that the US economy could run into trouble and the dollar may decline in value wrt the euro as a result. This is bad for Germany (the world's largest exporter) and will affect growth there, and throughout the eurozone. The ECB may be forced to drop rates again to prevent the Euro rising too much against the dollar.
> 
> I sometimes think the most likely scenario to force interest rates, and thus Irish house prices down, up is a continuing boom in the US and a simultaneous recovery in Germany. But neither of these things seem to be really happening. Since the Fed and the ECB dropped the rates so aggressivly post 9/11 everyone seems to be working off a new mean interest rate of about 4 % rather than 8 % in the past (maybe it really "is different"  ).


 
Persius, you have hit on the crux of the issue.  Central banks are caught in an end-game where the choice is either hyperinflation (cut rates/stop rising rates when recession occurs) or deflation (raise rates aggressively to fight inflation but cause massive recession).  My money, literally, is on the former—see my gold thread.

Either way, inflation or deflation is going to be UGLY.  And for related reasons I highly doubt we will avoid falling property prices.


----------



## Del3D

Persius said:
			
		

> Many people are predicting that the US economy could run into trouble and the dollar may decline in value wrt the euro as a result. This is bad for Germany (the world's largest exporter) and will affect growth there, and throughout the eurozone. The ECB may be forced to drop rates again to prevent the Euro rising too much against the dollar.
> 
> I sometimes think the most likely scenario to force interest rates, and thus Irish house prices down, up is a continuing boom in the US and a simultaneous recovery in Germany. But neither of these things seem to be really happening. Since the Fed and the ECB dropped the rates so aggressivly post 9/11 everyone seems to be working off a new mean interest rate of about 4 % rather than 8 % in the past (maybe it really "is different"  ).



I would agree this except for our reliance on the US through multinationals. A sudden pull out by an "Intel" in that scenario would have an incredible impact on our house prices! Lets face it in the case of Intel, with a drop of 15% in worldwide staffing currently proposed... it may not be that far away.


----------



## redo

Del3D said:
			
		

> I would agree this except for our reliance on the US through multinationals. A sudden pull out by an "Intel" in that scenario would have an incredible impact on our house prices! Lets face it in the case of Intel, with a drop of 15% in worldwide staffing currently proposed... it may not be that far away.


It would be most felt in the West Dublin area


----------



## SteelBlue05

redo said:
			
		

> It would be most felt in the West Dublin area


 
Thats too narrow a view. Intel is a huge link amongst hundreds of companies. There are supply chains between these companies and Intel and bewteen companies supplying Intel and other companies. If you were to map it out it would look like a big map of airline routes with Intel being one of the links with hundreds of routes in and out.

The consequence of Intel being removed from that map would have far reaching effects, way beyond West Dublin.


----------



## redo

SteelBlue05 said:
			
		

> Thats too narrow a view. Intel is a huge link amongst hundreds of companies. There are supply chains between these companies and Intel and bewteen companies supplying Intel and other companies. If you were to map it out it would look like a big map of airline routes with Intel being one of the links with hundreds of routes in and out.
> 
> The consequence of Intel being removed from that map would have far reaching effects, way beyond West Dublin.


Agreed, but mostly felt......


----------



## SteelBlue05

redo said:
			
		

> Agreed, but mostly felt......


 
Seriously I dont think you can say that with any confidence. Check out the book called Nexus from Mark Buchanan.


----------



## phoenix_n

I personally think that the initial soft landing will be independent of rates or economy. The purchasing of property in the last 4 years was based more on projected capital appreciation which indeed proved correct. Now that supply has increased and rental market suppressed these gains are not there anymore. When you can get a better return on your income from Northern Rock rather than Brick and Mortar the hard fact is driven home. The interest in the market will be gone and will be replaced by fear. Rising rates will only compound that belief.


----------



## Duplex

Persius said:
			
		

> Does indeed sound like following the herd, but may actually be not so stupid if you think the interest rates are more likely to come down again
> 
> 
> 
> *Many people are predicting that the US economy could run into trouble* and the dollar may decline in value wrt the euro as a result. This is bad for Germany (the world's largest exporter) and will affect growth there, and throughout the eurozone. The ECB may be forced to drop rates again to prevent the Euro rising too much against the dollar.
> 
> I sometimes think the most likely scenario to force interest rates, and thus Irish house prices down, up is a continuing boom in the US and a simultaneous recovery in Germany. But neither of these things seem to be really happening. Since the Fed and the ECB dropped the rates so aggressivly post 9/11 everyone seems to be working off a new mean interest rate of about 4 % rather than 8 % in the past (maybe it really "is different"  ).


 

The US economy is in trouble, to the tune of $12 trillion dollars (the deficits) .  The yield curve is inverted, imports exceed export by 50+%, the housing bubble is bursting, the savings rate is 'negative', oil prices are rising as is inflation. Incomes growth is static (to falling).

Cutting interest rates will not fix structural problems in any economy as the rate cutting episode post the Dot-com bust has proven.


----------



## Bedsit

Persius said:
			
		

> Many people are predicting that the US economy could run into trouble and the dollar may decline in value wrt the euro as a result. This is bad for Germany (the world's largest exporter) and will affect growth there, and throughout the eurozone. The ECB may be forced to drop rates again to prevent the Euro rising too much against the dollar.


Could it also be the case that a falling dollar would require the Fed to push up rates even higher to stop countries like China dumping US bonds? If so then would it be correct to assume that the ECB would have to follow suit with higer interest rates also so that the Euro did not devalue too much against the dollar?


----------



## CelloPoint

phoenix_n said:
			
		

> [more money in] Northern Rock rather than Brick and Mortar


Hilarious!


----------



## phoenix_n

Persius said:
			
		

> Many people are predicting that the US economy could run into trouble and the dollar may decline in value wrt the euro as a result.


 
Does anyone know what the 'smart money' is doing. There are financial institutions out there who employ people solely to analyse such things.


----------



## room305

Bedsit said:
			
		

> Could it also be the case that a falling dollar would require the Fed to push up rates even higher to stop countries like China dumping US bonds? If so then would it be correct to assume that the ECB would have to follow suit with higer interest rates also so that the Euro did not devalue too much against the dollar?


It's certainly possible. Countries like Turkey and Iceland were pretty much forced to do this during the worldwide May sell-off of stocks and bonds, as global attitudes to risk were reassessed.


----------



## phoenix_n

CelloPoint said:
			
		

> Hilarious!


 
Thanks. I try my best.


----------



## Bedsit

*Credit card debt increases by 18%*

I mentioned this in a recent post and an article in today's Irish Times seems to confirm this. The URL (requires subscription) is:

[broken link removed]

What will also be interesting is to keep an eye on is the number of credit cards in Ireland. This figure could also rise if people were to switch to one of those low introductory, interest free offers to delay paying their debts. The latest figures I can find on the number of credit cards is from the Irish Bankers Federation for 2004 ()

This figure is 2.3 million. Does anyone know of more recent figures?


----------



## Duplex

Bedsit said:
			
		

> *Credit card debt increases by 18%*
> 
> I mentioned this in a recent post and an article in today's Irish Times seems to confirm this. The URL (requires subscription) is:
> 
> [broken link removed]
> 
> What will also be interesting is to keep an eye on is the number of credit cards in Ireland. This figure could also rise if people were to switch to one of those low introductory, interest free offers to delay paying their debts. The latest figures I can find on the number of credit cards is from the Irish Bankers Federation for 2004 ()
> 
> This figure is 2.3 million. Does anyone know of more recent figures?


 

Table C14, in Latest Monthly Stats from the Central Bank.

[broken link removed]


----------



## phoenix_n

This was inevitable really. Having thousands and thousands of euros in equity in ones house lends people to think of themselves as richer than they really are. People have to know that its only in the realisation of such funds that makes them rich. 

"If you cant afford to pay cash. You cant afford it."


----------



## room305

The house as a cash machine phenomenon has been driving the U.S. economy for a while now. However, with falling or stagnant prices and rising rates equity withdrawals for consumer spending will of course fall dramatically.

However, I'm not convinced that such behaviour - releasing home equity to fund lifestyle purchases - is really that common here.


----------



## Guest107

room305 said:
			
		

> releasing home equity to fund lifestyle purchases - is really that common here.



Remortgages are common but it MAY be that they use that equity release to buy investor properties instead  , some do equity release to fund their demanding lifestyle


----------



## CelloPoint

Someone on over on boards.ie was saying that we are entering new unchartered territory when it comes to real estate economics and that perhaps, because of globalisation and rising populations worldwide, you can now expect to pay x10 your annual salary on a humble place to live in. This is by virtue of the fact that it is so competitive out there and social concerns are gone out the window in favour of profit.

I'm not sure whether to fob this off as 'new economic parardigm' PR-speak rubbish or to consider that this may actually play a part? The rich have always controlled a disproportionate amount of land, and with a highly pronounced rich-poor divide being a by-product of globalisation, perhaps things can only get worse for the new 'working poor' (afaik, anyone earning under E35k) rather than better


----------



## walk2dewater

CelloPoint said:
			
		

> Someone on over on boards.ie was saying that we are entering new unchartered territory when it comes to real estate economics and that perhaps, because of globalisation and rising populations worldwide, you can now expect to pay x10 your annual salary on a humble place to live in. This is by virtue of the fact that it is so competitive out there and social concerns are gone out the window in favour of profit.


 
Quick BUY NOW!


----------



## Howitzer

CelloPoint said:
			
		

> Someone on over on boards.ie was saying that we are entering new unchartered territory when it comes to real estate economics and that perhaps, because of globalisation and rising populations worldwide, you can now expect to pay x10 your annual salary on a humble place to live in. This is by virtue of the fact that it is so competitive out there and social concerns are gone out the window in favour of profit.


 
This isn't isn't even a coherant sentance, never mind a valid arguement. I wonder what a Polish plumber in Warsaw would make of that while he can't get a job in a country with a falling population with low birth rates and high emigration, which yet has incredibly high growth in property prices. 

SPEC-U-LA-TION.


----------



## phoenix_n

Howitzer said:
			
		

> This isn't isn't even a coherant sentance, never mind a valid arguement. I wonder what a Polish plumber in Warsaw would make of that while he can't get a job in a country with a falling population with low birth rates and high emigration, which yet has incredibly high growth in property prices.
> 
> SPEC-U-LA-TION.


 
Dont mention Poland to me. I occasionally work on assignment in poland. I have eaten out every day with beers and still only managed to spend 100euros for the whole week.


----------



## Contrarian

No doubt about it ,we're now entering the 'blow off' phase of this mania. A 'buy at any price' attitude is prevailing amongst the foolish who after paying crazy random figures that are seemingly being plucked out of the air, will be given a painful lesson in the flip side of excessive leverage. Average price €400,000, give me a break, you'd want at least a view of lower Manhattan for that kind of money.


----------



## autumnleaf

CelloPoint said:
			
		

> Someone on over on boards.ie was saying that we are entering new unchartered territory when it comes to real estate economics and that perhaps, because of globalisation and rising populations worldwide, you can now expect to pay x10 your annual salary on a humble place to live in. This is by virtue of the fact that it is so competitive out there and social concerns are gone out the window in favour of profit.


 
I wonder how much of the international property speculation is driven by cheap air fares, and how eager people would be to buy a place in Bratislava if they had to cough up a large chunk of money every time they wanted to visit. Air fares are currently artificially low because air fuel is not taxed, and also because airlines buy fuel in bulk which means that temporary increases in price affect them less than car drivers or other fuel users. However, a proposed E.U.-wide tax on air fuel would increase prices significantly, and if there are no dips in oil price for airlines to take advantage of, that cost will also be passed on to the passengers. 


As for “rising populations”, well birth rates have been dropping in most developed countries and many developing countries too. Remaining countries with rising populations (eg Afghanistan, Rwanda) are not places from which we can expect many property speculators in the near future. Ireland has unusual demographics in which we currently have a large chunk of people in their mid-to-late 20s and early 30s, but we are an outlier in this respect and the age group trailing behind them (ie the prospective FTBs for the 2010s) are much fewer.


----------



## phoenix_n

Contrarian said:
			
		

> No doubt about it ,we're now entering the 'blow off' phase of this mania. A 'buy at any price' attitude is prevailing amongst the foolish who after paying crazy random figures that are seemingly being plucked out of the air, will be given a painful lesson in the flip side of excessive leverage. Average price €400,000, give me a break, you'd want at least a view of lower Manhattan for that kind of money.


 
when i pass by that prospect hill development in finglas i am reminded of what a debt ridden place that place is going to be. That is a prime example of folks buying to get on the market and paying inflated prices where the location did not warrant it.


----------



## Persius

Don't forget immigration when considering rising populations. The population of the world continues to rise rapidly and there will always be an inflow of migrants from poorer countries to richer ones (legally or illegally). This will have an affect on the housing market, even if these people only enter the equation as renters. Then also consider the fact that most households now use two incomes to pay off a morgage rather than one. 

So maybe it is true that the price of a house in relation to the average wage in a performing economy is now much higher than it was in the past, and it will remain at this higher level in the medium term. I hope not as I believe it will have serious social implications down the line (whatever about economic ones). But no-one knows.


----------



## CelloPoint

phoenix_n said:
			
		

> when i pass by that prospect hill development in finglas i am reminded of what a debt ridden place that place is going to be. That is a prime example of folks buying to get on the market and paying inflated prices where the location did not warrant it.



Other places that spring to mind include:

Northern Cross, Malahide Road (Darndale)
The Belfry, Citywest (Tallaght)
Priory Hall, Donaghmede

I know someone who's handed over 430k for a 2-bed flat in Summerhill (of the generic glass-house type) about 2 months ago. He's a stamp duty bill of another 30k. There's no way he'd get 460k for it were he to sell it tomorrow. The place isn't even built yet. The developer has sold them all and he's effectively got the money the bank, property crash or not.

Speaking of generic glass-house-type flats, what will these places look like after 20 years of Irish wind/rain (not forgetting shoddy management companies)? Will they actually have a resale value? Did we not learn from the communists that such forms of housing (out-of-town, large-scale complexes with no facilities) are recipes for social disaster?


----------



## ivuernis

CelloPoint said:
			
		

> Did we not learn from the communists that such forms of housing (out-of-town, large-scale complexes with no facilities) are recipes for social disaster?


Obviously not!


----------



## phoenix_n

Persius said:
			
		

> Don't forget immigration when considering rising populations. The population of the world continues to rise rapidly and there will always be an inflow of migrants from poorer countries to richer ones (legally or illegally). This will have an affect on the housing market, even if these people only enter the equation as renters. Then also consider the fact that most households now use two incomes to pay off a morgage rather than one.
> 
> So maybe it is true that the price of a house in relation to the average wage in a performing economy is now much higher than it was in the past, and it will remain at this higher level in the medium term. I hope not as I believe it will have serious social implications down the line (whatever about economic ones). But no-one knows.


 
Rental controls will be put in place similar to in Germany.

There, as a landlord, you can only rise the rent in line with agreed principles and any abnormal rise can be disputed by the tenants. You have a right to reside in the apartment for life. It can take a whole year to evict a tenant that is not paying rent. Its common for a seller of an apartment to offer money to the sitting tenant to vacate as selling property without a sitting tenant is more profitable. I know of one such offer where the seller offered the tenant 20K to vacate. They didn't.


----------



## Guest107

Persius said:
			
		

> So maybe it is true that the price of a house in relation to the average wage in a performing economy is now much higher than it was in the past, and it will remain at this higher level in the medium term. I hope not as I believe it will have serious social implications down the line (whatever about economic ones). But no-one knows.


It has historically been 4x the average wage in Ireland (thats the average property) but I would not think it will go there again. We have probably moved to 5x or 6x permanently. Our taxes are somewhat lower and interest rates are lower than they used to be and we have far more disposable income (relative to  gross) than 25 years ago where you paid 60% income tax after £10,000 salary and when mortgage rates were 15-20% out of that take home pay.

The problem in Dublin is that the house price is 10x the average Dublin wage and the average house price in Galway is something like 11x or 12x

I can see massive pay rises coming up for all of us to settle things down , just as the soft landing happens


----------



## Guest126

HEY - the communists had great facilities, much better than the sh!te we are being offered on new developments in Cork (usually the fact that there is a pub and a chipper within two miles constitues a prime location)!


----------



## Dave_Post

When you have statements suggesting that places like The Belfry will be akin to communist style wastelands, is it any wonder that 'the sheep' you all like to smugly criticise think you are all nuts and to be ignored.


----------



## autumnleaf

However, in Galway nobody takes the lower wages into account when discussing house prices. “I know it’s a rip-off, but it’s a bargain compared to what you’d get in Dublin” is the attitude.


----------



## CelloPoint

Dave_Post said:
			
		

> When you have statements suggesting that places like The Belfry will be akin to communist style wastelands, is it any wonder that 'the sheep' you all like to smugly criticise think you are all nuts and to be ignored.



Yeah just ignore us. Maybe it's not sheep we're talking of, but ostriches with their heads in the sand.


----------



## CelloPoint

Was talking to an old friend of mine down the country who told me ostrich farming has really taken off here in Ireland.


----------



## phoenix_n

autumnleaf said:
			
		

> However, in Galway nobody takes the lower wages into account when discussing house prices. “I know it’s a rip-off, but it’s a bargain compared to what you’d get in Dublin” is the attitude.


 
If i was still in the market for property the actual only place i would consider to buy would be Salthill and failing that Roundstone. I think Salthill will become the Florida of Ireland, or the bouremouth(?) of the UK as it will be where many retirees will head to. The increase in temperatures in southern europe coupled with water shortages will make ireland, with its increasing warmer summers, a desirable place to retire to. Interesting but saw on some other thread here someone who resides in France looking to buy here to avail of our milder summers.

(Talking of water shortages - Dont know if anybody follows the spanish market here but developers were allowed to go ahead with a development south of toledo even though they know that they cannot meet projected water demand)

I tried to get a house in the salthill area earlier this year but had left it 6 months too late. I dont foresee a massive correction in Salthill. Other areas will though.

(Dont ask me how i know. I knew in 99 that prices were going to go up as property was very cheap and we were playing catch-up to europe. (i of course didnt heed my own advice as more interested in chasing girls than investing). I know that the market now has stopped and that you will soon see threads on how to declare bankrupcy. And i know that salthill will become the gem of europe. Just like how i knew i wouldnt make that flight the other day.)


----------



## CelloPoint

phoenix_n said:
			
		

> If i was still in the market for property the actual only place i would consider to buy would be Salthill and failing that Roundstone. I think Salthill will become the Florida of Ireland, or the bouremouth(?) of the UK as it will be where many retirees will head to. The increase in temperatures in southern europe coupled with water shortages will make ireland, with its increasing warmer summers, a desirable place to retire to. Interesting but saw on some other thread here someone who resides in France looking to buy here to avail of our milder summers.
> 
> (Talking of water shortages - Dont know if anybody follows the spanish market here but developers were allowed to go ahead with a development south of toledo even though they know that they cannot meet projected water demand)
> 
> I tried to get a house in the salthill area earlier this year but had left it 6 months too late. I dont foresee a massive correction in Salthill. Other areas will though.



What's the traffic situation like in Salthill these days? I heard you can't get in or out of the place and that the whole place is ruined by big ignorant complexes being built left right and centre. Not to mention the scarred Galway landscape due to one-off housing pitter-pattered all over the place as if the planner had just taken up modern art. 

Having said this, I don't think anyone is disagreeing that some areas will hold their values better than others.


----------



## tententwenty

While over in the UK, Britons are going broke in record levels... 

_ HSBC today warned that 'serious' and 'excessive' levels of consumer debt in the UK was a growing issue. 

_ _ While the bank said it has deliberately reduced its share of the unsecured lending market, loans and credit cards, as a result. 

_ _ However, the decision looks like closing the stable door after the horse has bolted.   There is a raft of evidence that high street banks have been guilty of reckless lending over the past 4-5 years._


----------



## Guest107

phoenix_n said:
			
		

> If i was still in the market for property the actual only place i would consider to buy would be Salthill and failing that Roundstone. I think Salthill will become the Florida of Ireland, or the bouremouth(?) of the UK as it will be where many retirees will head to. The increase in temperatures in southern europe coupled with water shortages will make ireland, with its increasing warmer summers, a desirable place to retire to. Interesting but saw on some other thread here someone who resides in France looking to buy here to avail of our milder summers.


 My dear young fellow. The icecaps will have melted in the self same heat so Salthill will be UNDER WATER by then.  Knocknacarra will be the new seafront  


> I tried to get a house in the salthill area earlier this year but had left it 6 months too late. I dont foresee a massive correction in Salthill. Other areas will though.


 I could have bought this Salthill house in Ard Na Mara (right opposite national school)  for about €240k-€250k 5 years back but got a better deal. 

[broken link removed]. 



> *Ard na Mara, Salthill, Co Galway.* Three-bed semi-d with a two-bed apartment. Withdrawn: €410,000.Sold after €430,000. Agent: O'Donnellan & Joyce Auctioneers


Now they are about €700k or so. The only people who can afford them are property developers though


----------



## tententwenty

And a slightly acerbic take on the BoI report [broken link removed]...

_Dr Dan McLaughlin, well known economist, said he was increasing his predictions for house price increases for 2006 up to 12%, saying that wage increases, good employment levels, and a rapid increase in population levels fuelled this increase. Dr McLaughlin however fails to account for the fact that most wage increases were in the public sector, not the far larger private sector, and that a good deal of population growth can be attributed to transient immigrant population, currently estimated to comprise 10% of the population, or 400,000 people._


----------



## Raskolnikov

So the inexorable march of the Irish property market moves on (prices up 1.2% for the month of June, [broken link removed]), despite contradictory anecdotal evidence from some posters here. This report comes on the back of comments from the Bank of Ireland stating house prices will increase beyond the 3% years target to 12%.

The widespread coverage this recieved from the news media will blow all the recent bearish sentiment out of the water. The FTB is faced with the fact that . .

Property prices are STILL rising at this very moment.
They're looking increasingly likely to RISE in the future.
Now, the assumption of many posting on these forums is that FTB'ers (and indeed, "investors") are rational purchasers (this should be a reasonable assumption given that a house is likely to be a person's most expensive purchase, therefore it should be researched vigourously). As we have already seen though, this is not the case. Driven by the general collective mania of the population, the media and the _extreme_ ignorance concerning the financing of property, we are as a nation now obsessed with the procurement of property. This fallacy, we can attribute to the general public, given that the housing market is still on the up.

I think that we are most definitely entering into uncharted territory here. How can anyone try to apply rational theory to an irrational market? What I do know however, is that internal (the coming budget) and external (the global economy and ECB rates) are going to be the factor that determine where the property market will go. The nightmare scenario would be

A budget giveaway, ie. abolition/cut back in Stamp Duty, reintroduction of the first time buyers grant, more resources for affordable housing, etc.
A downturn in the Eurozone economy (not altogether unlikely given current pessimism in the global economy) and the continued high/medium growth in our own. Subsequently, we could rates actually going down.
If this happens, house prices will rocket yet further and any hope we have of "soft-landing" will be absolutely anihilated.


----------



## Bedsit

[FONT=Verdana, Arial]There was an article in the Irish Independent Business section today on Credit Growth in the Irish Economy (http://www.unison.ie/irish_independent/stories.php3?ca=184&si=1663303&issue_id=14437). There was an intriguing paragraph which I quote below:[/FONT]

"Private sector credit has now grown by a monthly average of €5bn during the first six months of 2006, bringing total outstanding credit to €288.6bn. The Central Bank said that the June rise would have been even larger had it not been for a €2bn increase in securitised residential mortgages, which are excluded from total private sector credit figures. If these are included, the annual growth rate for private sector credit would have been 31.4pc in June."


[FONT=Verdana, Arial]Is this a reference to people getting a top up on their mortgage as the price of their house may have gone up substantially since they bought?[/FONT]


----------



## thewatcher

Bedsit said:
			
		

> [FONT=Verdana, Arial]There was an article in the Irish Independent Business section today on Credit Growth in the Irish Economy (http://www.unison.ie/irish_independent/stories.php3?ca=184&si=1663303&issue_id=14437). There was an intriguing paragraph which I quote below:[/FONT]
> 
> "Private sector credit has now grown by a monthly average of €5bn during the first six months of 2006, bringing total outstanding credit to €288.6bn. The Central Bank said that the June rise would have been even larger had it not been for a €2bn increase in securitised residential mortgages, which are excluded from total private sector credit figures. If these are included, the annual growth rate for private sector credit would have been 31.4pc in June."
> 
> 
> [FONT=Verdana, Arial]Is this a reference to people getting a top up on their mortgage as the price of their house may have gone up substantially since they bought?[/FONT]


 
THE IRISH !
Once the biggest drinkers in europe,now the biggest debtors in europe.
Where a jumbo mortgage is like a status symbol to be envied by others.
I'd say the rest of europe are laughing their asses off at us !.


----------



## Guest126

I presume it means that the banks have securitised the mortgages (i.e. sold them as securities to international institutional investors)?


----------



## phoenix_n

2Pack said:
			
		

> My dear young fellow. The icecaps will have melted in the self same heat so Salthill will be UNDER WATER by then. Knocknacarra will be the new seafront


 
I havnet been called young fellow in a few years so thank you kind sir.

You may mock at my predictions but do not underestimate what a degree change in temperatures can make. Someone else mentioned traffic etc in salthill. I would not be concerned with that as eventually traffic will be mostly banned from alot of the areas (can be fixed in a day with a council ruling) and the views and the sea will never change.(in our lifetime anyhow)

But like all nouveau predictions, they are always mocked at intially owing to (and it is understandable) ignorance.


----------



## Guest107

Bedsit said:
			
		

> The Central Bank said that the June rise would have been even larger had it not been for a €2bn increase in securitised residential mortgages, which are excluded from total private sector credit figures.



Oh ****  **** ****  !!!!!!!!!

It means that €2bn a month of CREDIT is being 'hidden' with the connivance of the central bank  , thats €24Bn a Year or 20% of GDP 

There was very little securitisation of mortgages 10 years ago, this information gap is recent.


----------



## thewatcher

CapitalCCC said:
			
		

> I presume it means that the banks have securitised the mortgages (i.e. sold them as securities to international institutional investors)?


 
But as someone else said earlier in the thread more than likely these are cherry picked "safe" mortgages (low Ltv) as international investors are not stupid,leaving the irish banks with the much riskier one's 100%,interest only etc.


----------



## Guest107

thewatcher said:
			
		

> But as someone else said earlier in the thread more than likely these are cherry picked "safe" mortgages (low Ltv) as international investors are not stupid,leaving the bank with the much riskier one's 100%,interest only etc.



Thats not quite the point, if securitisation is carried out at this rate EVERY month then they are hiding €24Bn worth of debt from the gross figures every year . 

Regardless of loan quality that money is owed by an Irish person to a bank in Ireland.


----------



## SteelBlue05

phoenix_n said:
			
		

> I
> I would not be concerned with that as eventually traffic will be mostly banned from alot of the areas (can be fixed in a day with a council ruling)


 
I dunno, where can they ban traffic in Salthill without making things worse? There simply are not enough roads between the Barna side of Salthill and the east side of the city.


----------



## walk2dewater

Property prices are going UP UP UP.....

We're a while off a 'buyers' market yet.. but it is inevitable... and I [puffs chest out with Irish pride] wouldnt want to live here when it does...


----------



## ivuernis

phoenix_n said:
			
		

> You may mock at my predictions but do not underestimate what a degree change in temperatures can make. Someone else mentioned traffic etc in salthill. I would not be concerned with that as eventually traffic will be mostly banned from alot of the areas (can be fixed in a day with a council ruling) and the views and the sea will never change.(in our lifetime anyhow)


Recent measurements show that the Gulf Stream has already weakened and if it does not recover temps in Northwest Europe could drop by 1C over the next decade. If the Gulf Stream were to switch off completely temps would drop by between 4C and 6C within 20yrs of such an event. It's entirely plausible that within lifetime of most people alive today.


----------



## room305

walk2dewater said:
			
		

> Property prices are going UP UP UP.....
> 
> We're a while off a 'buyers' market yet.. but it is inevitable... and I [puffs chest out with Irish pride] wouldnt want to live here when it does...



I dunno, maybe living here when the whole thing collapses won't be so bad. Assuming your job won't be affected and you don't have a large mortgage hanging over your head, what will the problem be?

Probably snap yourself up a nice repossessed motor on the cheap too.


----------



## phoenix_n

walk2dewater said:
			
		

> Property prices are going UP UP UP.....
> 
> We're a while off a 'buyers' market yet.. but it is inevitable... and I [puffs chest out with Irish pride] wouldnt want to live here when it does...


 
Its not a buyers market. Correct. Only because nobody will want to buy.



			
				room305 said:
			
		

> I dunno, maybe living here when the whole thing collapses won't be so bad. Assuming your job won't be affected and you don't have a large mortgage hanging over your head, what will the problem be?


 
If you mean that it will be cheap to buy. Yes. But the trick will be to know that you dont buy when the market has only hit a crevice , on the way to rock bottom. Maybe that might be a thread one day. 'Has the market hit rock bottom yet'.


----------



## CelloPoint

Can we plesae stop about the gulf stream? If this kind of talk continues, the mod will shut this thread for going off topic. The previous record on AAM was 48,000 hits over 8 months. This thread is now touching on 45,000 hits in less than one month.


----------



## beattie

thewatcher said:
			
		

> THE IRISH !
> I'd say the rest of europe are laughing their asses off at us !.


 
Agree with that sentiment. Anyone I have ever met in Europe cannot believe the prices that we overpay for our property and when they see the standard of the crap that is being built they laugh.......


----------



## phoenix_n

CelloPoint said:
			
		

> touching on 45,000 hits in less than one month.


 
Wasnt it over 39 thousand yesterday ? No way. Could it really have risen by 6,000 in 24 hrs.


----------



## SteelBlue05

phoenix_n said:
			
		

> Wasnt it over 39 thousand yesterday ? No way. Could it really have risen by 6,000 in 24 hrs.


 
That isnt really a huge amount. Each person may view the pages 10 times in a day, so 600 people may have read it, and there are a lot of users on this site. Plus we dont know exactly how the "views" are calculated, if you open a thread, then submit a new response, and then view it again then is that 1 "view" or 3 "views".


----------



## CelloPoint

room305 said:
			
		

> I dunno, maybe living here when the whole thing collapses won't be so bad. Assuming your job won't be affected and you don't have a large mortgage hanging over your head, what will the problem be?
> 
> Probably snap yourself up a nice repossessed motor on the cheap too.



What makes you so sure you will be able to get a generous mortgage under such economic conditions? I don't own a house and have no intention of buying one in a crashed market just cos it's cheap. I save lots of money by renting and investing the difference. People say to me "but you can't live in equities" and I say to them "you can't live in Rathoath/Adamstown/Balbriggan either" (because I would have to sit in traffic for 2 hours a day to get to work). My savings will be leaving this country. I've a good job in the tech sector at the moment which looks reasonably secure for the short to medium term. A lot depends on the Irish economy. If anything, an economic crash may even be a good thing as it would drive our costs down - the sooner this happens, the better. It may just be too late - the market should have been reigned in years ago.

Why any young person or immigrant would stay in Ireland in the event of an economic crash is beyond me, let alone to want to commit to a mortgage in a gloomy economy.


----------



## CelloPoint

SteelBlue05 said:
			
		

> That isnt really a huge amount. Each person may view the pages 10 times in a day, so 600 people may have read it, and there are a lot of users on this site. Plus we dont know exactly how the "views" are calculated, if you open a thread, then submit a new response, and then view it again then is that 1 "view" or 3 "views".



Nowhere has anyone actually stated that 45,000 individual people have viewed this thread - I think everyone aware of the multiple hits factor. It's worth pointing that out, I agree.

Still, the stats are very impressive I have to say.


----------



## room305

phoenix_n said:
			
		

> If you mean that it will be cheap to buy. Yes. But the trick will be to know that you dont buy when the market has only hit a crevice , on the way to rock bottom. Maybe that might be a thread one day. 'Has the market hit rock bottom yet'.



No, I genuinely mean will be that bad to live here if the housing market crashes. Not - _will I be able to get a cheap house_ - just simply, will it be bad to live here if I have a job and no mortgage but the housing market crashes?

Presumably there will be a recession and it is hard to see that being much fun.


----------



## Dave_Post

CelloPoint said:
			
		

> Why any young person or immigrant would stay in Ireland in the event of an economic crash is beyond me, let alone to want to commit to a mortgage in a gloomy economy.


Maybe because some people dont live their lives obsessed with money. If they have a job in a sector that is reasonably secure and can afford to own their own home, then why should they care?

I know this is a concept alien to AAM.


----------



## miju

CelloPoint said:
			
		

> Can we plesae stop about the gulf stream? If this kind of talk continues, the mod will shut this thread for going off topic. The previous record on AAM was 48,000 hits over 8 months. This thread is now touching on 45,000 hits in less than one month.


 
perhaps i should never have opened my mouth 

where i live there's two properties side by side being "flipped" (i reckon because all the others are fully furnished and being lived in and these are your typical looking investor properties)

now i know it's the quite season but I'm REALLY keeping an eye on these 2 for a few reasons:

1: property is in dublin 11 and is 2 bed apt for €315,000 asking
2: could be considered an "ideal" investor property
3: could also be considered ideal FTB property 
4: is right beside M50
5: takes about 15 mins to get into city centre
6: has so many amenities right beside them from pubs , shopping centre , well kept parks , clothes shops , cinemas , resteraunts etc
7: is a very quiet area away from heavy traffic (main roads are well fenced off with no immediate access , turns in about 30 metres away)

Would one not expected a property like above to be snapped up? I personally think it's a bargain (by todays ridiculous standards) 

I've been waiting for the Sale Agreed sign or someone actually coming to view the property for 3 WEEKS so far something tells me it'll probably be another 3 weeks before I even get a glimpse of a person looking at it


----------



## SteelBlue05

CelloPoint said:
			
		

> Nowhere has anyone actually stated that 45,000 individual people have viewed this thread - I think everyone aware of the multiple hits factor. It's worth pointing that out, I agree.
> 
> Still, the stats are very impressive I have to say.


 
Well there are a lot of people who wouldnt understand hits and page views and that kind of thing. To some it would sound like an extra 6000 people read it in 24 hrs.


----------



## room305

CelloPoint said:
			
		

> What makes you so sure you will be able to get a generous mortgage under such economic conditions? I don't own a house and have no intention of buying one in a crashed market just cos it's cheap. I save lots of money by renting and investing the difference. People say to me "but you can't live in equities" and I say to them "you can't live in Rathoath/Adamstown/Balbriggan either" (because I would have to sit in traffic for 2 hours a day to get to work). My savings will be leaving this country. I've a good job in the tech sector at the moment which looks reasonably secure for the short to medium term. A lot depends on the Irish economy. If anything, an economic crash may even be a good thing as it would drive our costs down - the sooner this happens, the better. It may just be too late - the market should have been reigned in years ago.
> 
> Why any young person or immigrant would stay in Ireland in the event of an economic crash is beyond me, let alone to want to commit to a mortgage in a gloomy economy.



*sigh*

Nowhere, but nowhere did I suggest I wanted to buy a house when the market crash happens. I have constantly preached the opposite and am actively gearing up to sell my house.

I am just genuinely wondering if it would be bad to live here during a crash if I was in secure employment and renting.


----------



## walk2dewater

room305 said:
			
		

> I dunno, maybe living here when the whole thing collapses won't be so bad. Assuming your job won't be affected and you don't have a large mortgage hanging over your head, what will the problem be?


 
Street protests.  Political paralysis.  Scapegoating.  Crime.  Unemployment.  Depressed, miserable people.

Can you not see the scale of the crisis developing?

Edo and a few other posters have pointed out something extremely key to whats going on.  Something I have only fully twigged in recent weeks, resulting in my view that property prices are heading much higher in the short term.  We have a sorta fecklessness in this country, we do not want to face up to our problems and prefer to hide in the crowd.  Deal with tomorrow, tomorrow.  No connection between action and consequence is drawn, like some one ELSE will bail us out.


----------



## ivuernis

room305 said:
			
		

> I am just genuinely wondering if it would be bad to live here during a crash if I was in secure employment and renting.


If you had a reasonable job and no debts then sure it would be as good 
as anywhere I guess but you'd have to live with the social fall-out of a 
property bust which mightn't be much fun. Maybe people like you who 
sold out early would be blamed for starting the great big sell-off


----------



## Dave_Post

Seriously, I might start investing in apocalypse-proof shelters to sell to some of you guys


----------



## beattie

miju said:
			
		

> perhaps i should never have opened my mouth
> 
> where i live there's two properties side by side being "flipped" (i reckon because all the others are fully furnished and being lived in and these are your typical looking investor properties)
> 
> now i know it's the quite season but I'm REALLY keeping an eye on these 2 for a few reasons:
> 
> 1: property is in dublin 11 and is 2 bed apt for €315,000 asking
> 2: could be considered an "ideal" investor property
> 3: could also be considered ideal FTB property
> 4: is right beside M50
> 5: takes about 15 mins to get into city centre
> 6: has so many amenities right beside them from pubs , shopping centre , well kept parks , clothes shops , cinemas , resteraunts etc
> 7: is a very quiet area away from heavy traffic (main roads are well fenced off with no immediate access , turns in about 30 metres away)
> 
> Would one not expected a property like above to be snapped up? I personally think it's a bargain (by todays ridiculous standards)
> 
> I've been waiting for the Sale Agreed sign or someone actually coming to view the property for 3 WEEKS so far something tells me it'll probably be another 3 weeks before I even get a glimpse of a person looking at it


 
That is interesting, I have noticed a 2-bed beside me Booterstown which has been on the market for 3 months + ( if not more). I expect the seller has got a completely unrealistic price on it as it is in prime letting area so one would have thought it would have attracted the investor as well. There are about 400 apartments going to come on stream in a 1-mile radius of it so I suppose the seller missed the boat


----------



## phoenix_n

SteelBlue05 said:
			
		

> Well there are a lot of people who wouldnt understand hits and page views and that kind of thing. To some it would sound like an extra 6000 people read it in 24 hrs.


 
I hope you dont mean me or else i should quit been an IT consultant ! 

But 6,000 hits is impressive in 24 hours. Funny tried googling a couple of queries to see if this site got any hits but none. Except wikipedia now has an entry for the Irish Property Bubble



			
				miju said:
			
		

> I've been waiting for the Sale Agreed sign or someone actually coming to view the property for 3 WEEKS so far something tells me it'll probably be another 3 weeks before I even get a glimpse of a person looking at it


 
You could try phoning up the EA. People are gonna get suspicious with you hanging outside the apartment all day.  
I noticed a house across from me which was actually priced to sell and have phoned up twice. No offers. 2 months on market.


----------



## room305

ivuernis said:
			
		

> Maybe people like you who
> sold out early would be blamed for starting the great big sell-off



Anyone who suspects my sale of a one bedroom bungalow in west Finglas caused a mass sell-off has bigger problems than even declining property prices ...


----------



## walk2dewater

room305 said:
			
		

> Anyone who suspects my sale of a one bedroom bungalow in west Finglas caused a mass sell-off has bigger problems than even declining property prices ...


 
Why would you been blamed when there are a queue of buyers?


----------



## room305

walk2dewater said:
			
		

> Street protests.  Political paralysis.  Scapegoating.  Crime.  Unemployment.  Depressed, miserable people.



So only stick around if schadenfreude is your thing?


----------



## thewatcher

2Pack said:
			
		

> Thats not quite the point, if securitisation is carried out at this rate EVERY month then they are hiding €24Bn worth of debt from the gross figures every year .
> 
> Regardless of loan quality that money is owed by an Irish person to a bank in Ireland.


 
I don't know a whole lot about this side of things.But as i understood it,what the other poster was saying was that the money was in fact owed to the bank that had securitised the loan and not to the irish bank(the irish person still has to pay it of course,i know that's the point your making) but the point is if the irish bank sells off all it's "guaranteed" loans leaving its self with all the riskier one's if there is a property crash it could be on very shakey ground.This is bordering on criminal irresponsibility on an enron scale *IF* this is going on.


----------



## Guest107

Most Irish people do not have HUGE 200k + mortgages.

Most of them that does is Dubs so who cares


----------



## dam099

Duplex said:
			
		

> Merrill Lynch have declared US housing a bear market.
> 
> 
> 
> [URL="http://www.nationalmortgagenews.com/columns/hearing/"]http://www.nationalmortgagenews.com/columns/hearing/[/URL]


 
Merrill Lynch are about as reliable a source of information on this as the Estate Agents are i.e they both have their differing biases based on their own self interest.


----------



## phoenix_n

dam099 said:
			
		

> Merrill Lynch are about as reliable a source of information on this as the Estate Agents are i.e they both have their differing biases based on their own self interest.


 
Totally disagree. Merrill Lynch is one of the world's leading financial management and advisory companies. I would take notice of what they say over EAs who have a vested interest.


----------



## CCOVICH

phoenix_n said:
			
		

> Merrill Lynch is one of the world's leading financial management and advisory companies.


 
How original.


----------



## Guest126

Merrill Lynch surely underwrite an awful lot of mortgage debt, such as the already mentioned securitisation of mortgages, and generate huge fees by doing so.

I would not think that they would have a vested interest, as implied earlier, in there being a property collapse.


----------



## Glenbhoy

> Totally disagree. Merrill Lynch is one of the world's leading financial management and advisory companies. I would take notice of what they say over EAs who have a vested interest.


I bet Enron investors are glad they took notice of Merrill's buy recommendations.


----------



## Raskolnikov

Glenbhoy said:
			
		

> I bet Enron investors are glad they took notice of Merrill's buy recommendations.


On the face of it, Enron looked like a decent investment. How were Merill Lynch supposed to know that Enron were cooking their books?


----------



## phoenix_n

CCOVICH said:
			
		

> How original.


 
 I was waiting for someone to spot that. I even left the original font face to make it easier. 

Nice of you to contribute.


----------



## dam099

CapitalCCC said:
			
		

> Merrill Lynch surely underwrite an awful lot of mortgage debt, such as the already mentioned securitisation of mortgages, and generate huge fees by doing so.
> 
> I would not think that they would have a vested interest, as implied earlier, in there being a property collapse.


 
Not in a collapse as that would have knock on effects on the wider economy but regardless of the fact that they may do some securitisation of mortgages they are primarily a broker and investment banker with a vested interest in people investing their money in equities and not property which is a competing asset class for peoples investments.

I fully agree by the way with the fact that Estate Agents have a vested interest too I was just stating that both have have potential interest in spinning a particular view.


----------



## CCOVICH

phoenix_n said:
			
		

> I was waiting for someone to spot that. I even left the original font face to make it easier.
> 
> Nice of you to contribute.


 
Not at all

As an investment bank, it is a leading global trader and underwriter of securities and derivatives across a broad range of asset classes and serves as a strategic advisor to corporations, governments, institutions and individuals worldwide.


----------



## Guest126

"Some securitisation of mortgages" - ha!

They do billions I am sure and being an investment bank they would undertake massive commercial property deals as quickly as they would undertake LBOs and MBOs so do not compare them to "The equity version of estate agents" please.


----------



## Duplex

dam099 said:
			
		

> Not in a collapse as that would have knock on effects on the wider economy but regardless of the fact that they may do some securitisation of mortgages they are primarily a broker and investment banker with a vested interest in people investing their money in equities and not property which is a competing asset class for peoples investments.
> 
> I fully agree by the way with the fact that Estate Agents have a vested interest too I was just stating that both have have potential interest in spinning a particular view.


 
So you think Merrill Lynch are spinning the news?


[broken link removed]


----------



## yawha

CelloPoint said:
			
		

> Why any young person or immigrant would stay in Ireland in the event of an economic crash is beyond me, let alone to want to commit to a mortgage in a gloomy economy.


 
The very fact that Irish people,particulary smart Irish people run away when things get tough is one of the reasons why Ireland has for decades been an economic and social disaster.
For all the flag waving that the Irish do,they certainly can't be too patriot if their doing it from abroad.
As JFK once said(of Irish stock ,Ironicaly) "Think not what your country can do for you but what you can do for your country".
The smart people need to stick around,spread their genes,make decent political parties and vote them into power.


----------



## Duplex

yawha said:
			
		

> The smart people need to stick around,spread their genes,......


 

Okay I'll volunteer


----------



## Guest107

and the meek shall inherit those FTB ghettos in the Pale


----------



## room305

yawha said:
			
		

> The very fact that Irish people,particulary smart Irish people run away when things get tough is one of the reasons why Ireland has for decades been an economic and social disaster.



Well maybe if everyone else wasn't so intent on wrecking the economy they might stick around ...

You can point the finger at FF and the PDs for doing little to stop the bubble but they can hardly be blamed for it.


----------



## Afuera

yawha said:
			
		

> The very fact that Irish people,particulary smart Irish people run away when things get tough is one of the reasons why Ireland has for decades been an economic and social disaster.



Are you advocating that smart Irish people should just accept to live a meager existance, on the dole, at the expense of the government, should there be a downturn?

There's a good case for argument that the smart Irish people who went abroad in years gone by were partially responsible for some of the more recent economic success in the country when they returned.


----------



## CelloPoint

yawha said:
			
		

> The very fact that Irish people,particulary smart Irish people run away when things get tough is one of the reasons why Ireland has for decades been an economic and social disaster.
> For all the flag waving that the Irish do,they certainly can't be too patriot if their doing it from abroad.
> As JFK once said(of Irish stock ,Ironicaly) "Think not what your country can do for you but what you can do for your country".
> The smart people need to stick around,spread their genes,make decent political parties and vote them into power.



How do you expect recent school-leavers and college graduates to be 'patriotic' to a corrupt bunch of politicians who govern them? What did they expect? Unfortunately, the good work done by some in power by promoting free education and (more recently) 4th level research has/or soon will be been destroyed by a bunch of fat cats. 

You can't blame young people for the failures of others


----------



## CelloPoint

I think the blame game will go on for years. Whether it's immigrants, young people, middle-aged people, the EU, the US economy, the banks, the government, the media, estate agents, builders, etc., etc.


----------



## dam099

Duplex said:
			
		

> So you think Merrill Lynch are spinning the news?
> 
> 
> [broken link removed]


 
Not necessarily, obviously there are indicators which speak for themselves and they are not good.

However the original article states "*Merrill Lynch* declared that housing is in a bear market and that a "buyer's market" for homes should last for "years."

While the indicators would tend to support the fact that there is a bear market how long it will last is more subjective and is in part Merrill's opinion.

Even a biased commentator can be right if the indicators do actually support their bias I just disagree with the assertion that because Merrill Lynch state it it must be true. When posters on AAM have quoted Estate Agents commentaries in the past it has been rightly pointed out to treat their arguments with caution as they may be spinning it to suit their particular view I would just caution the same for statements from brokers, look at the facts underlying their opinions and see if you think they support their conclusion, if you do fine.


----------



## bearishbull

dam099 said:
			
		

> Not necessarily, obviously there are indicators which speak for themselves and they are not good.
> 
> However the original article states "*Merrill Lynch* declared that housing is in a bear market and that a "buyer's market" for homes should last for "years."
> 
> While the indicators would tend to support the fact that there is a bear market how long it will last is more subjective and is in part Merrill's opinion.
> 
> Even a biased commentator can be right if the indicators do actually support their bias I just disagree with the assertion that because Merrill Lynch state it it must be true. When posters on AAM have quoted Estate Agents commentaries in the past it has been rightly pointed out to treat their arguments with caution as they may be spinning it to suit their particular view I would just caution the same for statements from brokers, look at the facts underlying their opinions and see if you think they support their conclusion, if you do fine.


Any significant falls in US housing market are bad news for american economy and merrill lynchs business, investment bankers have their fingers in every pie and are far less biased than estate agents as they can make money in many differnet ways unlike the estate agents. Even the US realtors and house builders are saying the markets bad and getting worse.


----------



## whathome

More pressure on ECB to raise interest rates:

http://www.marketwatch.com/news/story/Story.aspx?guid=%7BF14E113D%2D1CF6%2D46D6%2D9F81%2DD0590C456409%7D&siteid=

The final sentence points out that rate hikes don't impact German consumers as much as in countries where they are highly leveraged on mortgage spending:

"It remains to be seen if the (hikes) have an impact on consumers in France and Spain due to their high leverage on mortgage spending, but especially in Germany it shouldn't be a problem"


----------



## Firefly

Hi all, 1st post!
Whilst I agree that recent investors, highly geared with equity, should consider selling before rates rise, I believe that FTBs should still purchase assuming that the property meets their needs for the medium term and repayments can be met...and purely for non-financial reasons.

For anyone who remembers queuing up with 15 to 20 people outside a pokey house to be "interviewed" by smug tenants (many of whom are still renting I might add) I can assure you that home ownership rocks. No landlords & no sh1tty furniture. You're working hard and deserve a nice gaff. If rates rise..tighten the belts in other areas like everyone else..ride the storm and emerge, like everyone else. 

For those who intend hanging on and waiting to buy "when" property is cheap I have heard that argument for the last 5 years...and given the lack of proper rent control in this country, who in their right mind would want to rent for several years if they had the choice?  

My advice is buy your first gaff and enjoy the dinner parties!

Firefly


----------



## bearishbull

Firefly said:
			
		

> Hi all, 1st post!
> Whilst I agree that recent investors, highly geared with equity, should consider selling before rates rise, I believe that FTBs should still purchase assuming that the property meets their needs for the medium term and repayments can be met...and purely for non-financial reasons.
> 
> For anyone who remembers queuing up with 15 to 20 people outside a pokey house to be "interviewed" by smug tenants (many of whom are still renting I might add) I can assure you that home ownership rocks. No landlords & no sh1tty furniture. You're working hard and deserve a nice gaff. If rates rise..tighten the belts in other areas like everyone else..ride the storm and emerge, like everyone else.
> 
> For those who intend hanging on and waiting to buy "when" property is cheap I have heard that argument for the last 5 years...and given the lack of proper rent control in this country, who in their right mind would want to rent for several years if they had the choice?
> 
> My advice is buy your first gaff and enjoy the dinner parties!
> 
> Firefly


Can't wait to hear the dinner party chatter when the bubble bursts!  For once property wont be the only thing on the agenda! Only a few people were saying prices were overvalued 5 years ago, the yields were pretty good and rent nearly covered a mortgage,if you cant see the difference between now and 5 years ago then god love ya. the fundamentals are far worse now than 5 years ago, who knows the few guys who predicted things may be proved right to an extent in the future. i dont think property will be any higher in real terms in 15 years time than now.massive oversupply is coming down the tracks.


----------



## thewatcher

Firefly said:
			
		

> Hi all, 1st post!
> Whilst I agree that recent investors, highly geared with equity, should consider selling before rates rise, I believe that FTBs should still purchase assuming that the property meets their needs for the medium term and repayments can be met...and purely for non-financial reasons.
> 
> For anyone who remembers queuing up with 15 to 20 people outside a pokey house to be "interviewed" by smug tenants (many of whom are still renting I might add) I can assure you that home ownership rocks. No landlords & no sh1tty furniture. You're working hard and deserve a nice gaff. If rates rise..tighten the belts in other areas like everyone else..ride the storm and emerge, like everyone else.
> 
> For those who intend hanging on and waiting to buy "when" property is cheap I have heard that argument for the last 5 years...and given the lack of proper rent control in this country, who in their right mind would want to rent for several years if they had the choice?
> 
> My advice is buy your first gaff and enjoy the dinner parties!
> 
> Firefly


 
What happens if the only gaff you can afford is in some kip in dublin or else 30 - 40 miles outside of dublin,do you really want to be stuck there for the next 10 -15 years.
My advice is to hold your ground and bide your time,build up as much cash as you can while renting.
The crash will come may be 6 months on the inside,may be 36 months on the outside but it's coming.


----------



## Raskolnikov

A new blog on Irish property sentiment.

http://irishproperty.blogspot.com/


----------



## diarmuidc

yawha said:
			
		

> For all the flag waving that the Irish do,they certainly can't be too patriot if their doing it from abroad.
> As JFK once said(of Irish stock ,Ironicaly) "Think not what your country can do for you but what you can do for your country".
> The smart people need to stick around,spread their genes,make decent political parties and vote them into power.



Only an idiot would hang around a country that has turned into a basket case when they could emigrate to some other country where there is a better standard of living, better weather and more jobs to be had. Smart people stick around ? Are you kidding? Smart people get the hell away from crap situations.


----------



## walk2dewater

Firefly said:
			
		

> For anyone who remembers queuing up with 15 to 20 people outside a pokey house to be "interviewed" by smug tenants (many of whom are still renting I might add) I can assure you that home ownership rocks. No landlords & no sh1tty furniture. You're working hard and deserve a nice gaff.


 
My landlord is about to give me ANOTHER discount on my rent.  Most of the furniture is mine, and I can't keep "guests" away because of my central location and my patio.  I also walk to work.


----------



## beattie

walk2dewater said:
			
		

> My landlord is about to give me ANOTHER discount on my rent. Most of the furniture is mine, and I can't keep "guests" away because of my central location and my patio. I also walk to work.


 
Nice one! Our landlord hasn't upped ours for the second year running (we had got ~17% reduction over the previous two years) I didn't have the heart to ask for another reduction as he is getting a pitiful yield (<1.8%) from it and he is a decent guy


----------



## whathome

Firefly said:
			
		

> For anyone who remembers queuing up with 15 to 20 people outside a pokey house to be "interviewed" by smug tenants


 
It’s nice to reminisce!  However the situation is very different now.  Huge supply of rental properties, many of them new, professionally decorated - with or without furniture.  Rent is so much cheaper than a mortgage and with increasing supply, even when the house price bubble bursts - rent will be competitive.


----------



## Firefly

All the fancy furniture in the world provided by your landlord still isn't yours and all the while your cash is paying off someone elses mortgage. If the rent your paying is more than the interest payments on a mtg then you are in negative cashflow...the principal part of a mortgage is simply repaying for what you own..
In reference to being stuck somewhere 30-40 miles from Dublin, my first point is that the house should suit your needs...

POint taken that rents have reduced recently and conditions are better, but this could easily revert to the old days without proper rent control.

Firefly.


----------



## bogwarrior

question for the people who say they'll cut and run if we hit a downturn - where do you intend going to?  
If its house-price booms (and potential busts) you're avoiding you'll have to rule out large tracts of the US, Australia and the UK as well as the numerous other markets that have experience record house-price growth in the last 8 years.  In this globalised world I suspect the bottom might fall out of several markets simultaneously,  narrowing options considerably.
As the cliche says 'If America catches cold, the rest of the world sneezes...'

Its not as if dIreland is the only country run by incompetent, corrupt fools .......


----------



## Bedsit

*Daft.ie says soft landing in sight*

The reassurances are coming in thick and fast now. I remember someone saying earlier on this forum that we would be hearing things like this from the media in the near future. Here is the link:

(http://www.rte.ie/business/2006/0802/houses.html)


----------



## whathome

Daft says house price growth has slowed :
http://www.rte.ie/business/2006/0802/houses.html

"general slowdown across the entire property market" 

- you could tell it was weakening from a noticeable drop off in buyer interest, more property on the market etc. 
The autumn selling season will be very interesting.


----------



## beattie

Bedsit said:
			
		

> *Daft.ie says soft landing in sight*
> 
> The reassurances are coming in thick and fast now. I remember someone saying earlier on this forum that we would be hearing things like this from the media in the near future. Here is the link:
> 
> (http://www.rte.ie/business/2006/0802/houses.html)


 
Interesting to see that the annual growth rate has slowed so markedly, does daft.ie now have the most amount of houses advertised in Ireland (thus making it the best source of data?)


----------



## phoenix_n

> *Firefly*
> _For anyone who remembers queuing up with 15 to 20 people outside a pokey house to be "interviewed" by smug tenants (many of whom are still renting I might add) I can assure you that home ownership rocks. No landlords & no sh1tty furniture. You're working hard and deserve a nice gaff._


 

I do agree with you but i now rent in the city centre and can bike/walk it to work. My current rent affords me to save regularly and not only will it not rise by any interest changes but i can move to another part of the city if i choose with 4 weeks notice. Have even considered Dalkey with rents falling. 
Buying a house (which i did) did make sense and the freedom was great. But it no longer is a wise choice and to buy now will create a burden of which only rises with each interest rate. You cant just then decide to head off to oz for a year if you cant sell your place.



			
				whathome said:
			
		

> Daft says house price growth has slowed :
> http://www.rte.ie/business/2006/0802/houses.html
> 
> "general slowdown across the entire property market"
> 
> - you could tell it was weakening from a noticeable drop off in buyer interest, more property on the market etc.
> The autumn selling season will be very interesting.


 
The game is up.


----------



## room305

bogwarrior said:
			
		

> question for the people who say they'll cut and run if we hit a downturn - where do you intend going to?



I've been giving this some serious consideration. The UK would be my preference but it too is vulnerable to a housing collapse. Other options would include France and Germany or the Scandanavian countries. I'll keep my options open and see how things play out globally. Luckily in the line of work I am in I could conceivably stay here and work contracts for companies based abroad.



			
				bogwarrior said:
			
		

> As the cliche says 'If America catches cold, the rest of the world sneezes...'



I think that phrase is the other way round but the point is well taken. There may well be a global economic downturn.


----------



## Bedsit

"According to Marc Coleman, economics editor of The Irish Times, the property market is overvalued by as much as 15 per cent but we are unlikely to see a downturn ..."

[broken link removed]

I guess he is finally towing the Irish Times boards line . Especially since they bought into that dud website for 50 million last week. It is a pity to see the few voices of reason in the media are being stifled by their own organizations in the face of profit.


----------



## Raskolnikov

beattie said:
			
		

> does daft.ie now have the most amount of houses advertised in Ireland (thus making it the best source of data?)


No, myhome.ie advertises the largest amount of properties to purchase online in Ireland.


----------



## Guest107

thewatcher said:
			
		

> What happens if the only gaff you can afford is in some kip in dublin or else 30 - 40 miles outside of dublin,do you really want to be stuck there for the next 10 -15 years.
> My advice is to hold your ground and bide your time,build up as much cash as you can while renting.
> The crash will come may be 6 months on the inside,may be 36 months on the outside but it's coming.



Thats pretty much my advice with a smidge extra.  Try to have 10% of the price handy when you do dip in. 

Theres no point bustin yo' balls to buy onto that 'ladder' at the back of Ballivor , especially if you are a Dub  Lifes too short.


----------



## Raskolnikov

http://irishproperty.blogspot.com/2006/08/soft-landing-in-sight.html

It's simply ludicrous to take the properties advertised on daft.ie as a sample in the prediction of where house prices will go. Daft presumes that all houses listed on it's website will sell for the price they were listed at. There's nothing stopping Seamo McPaddy listing his three-bedroomed semi-d in Tallaght at €1,000,000 purely for speculative measures.


----------



## Firefly

Correct me if I'm wrong as I only heard a snippet of that Daft report
this morning, but aren't they just looking at asking prices and not selling prices? 
Also did it not report that GROWTH rates had fallen and not actual prices? 
Finally, the largest rental website in the country has a vested interest in reporting that rents are up 7% (going against everything the doomsayers on this thread are arguing..ie that rents are falling!!). 
If prices are falling according to them, then why are rents rising???
Firefly.


----------



## phoenix_n

bogwarrior said:
			
		

> question for the people who say they'll cut and run if we hit a downturn - where do you intend going to?


 
Years ago i always had that in mind. Didnt want to end up in the UK if economy went belly up. Went to oz and got a passport. Its an option that i have.


----------



## CelloPoint

Firefly said:
			
		

> Correct me if I'm wrong as I only heard a snippet of that Daft report
> this morning, but aren't they just looking at asking prices and not selling prices?
> Also did it not report that GROWTH rates had fallen and not actual prices?
> Finally, the largest rental website in the country has a vested interest in reporting that rents are up 7% (going against everything the doomsayers on this thread are arguing..ie that rents are falling!!).
> If prices are falling according to them, then why are rents rising???
> Firefly.


We've had the whole daft debate already. I think everyone is pretty much agreed that daft.ie stats are not a market analysis. However, this is a public forum and we are in a thread about public sentiment in the current Irish property market. Nobody is purporting to have an MBA from the London School of Economics, therefore any sentiment expressed by a poster about daft stats is certainly valid in the context of a public message board - If daft stats make them feel more bullish/bearish, then that's how the poster thinks and nobody can stop this. Personally I think any statistics from daft.ie are a pretty good rule of thumb and nothing more because of: seasonal factors, vested interests, rogue houses for sale, site popularity, etc.

Having said all this, I wouldn't just simply ignore any noticable statistical changes from the daft.ie site.


----------



## CelloPoint

Sorry FireFly, my rebuttal was directed at Raskolnikov's last post.


----------



## Duplex

> House Prices Hang over a Sloping Hillside
> Thankfully the cliff analogy is a bit extreme. Irish house prices are not hanging over the edge of a canyon. A sloping hillside is a more accurate, and comforting, analogy. Somewhat overvalued, the gap between where we are and where we should be isn't yet critical, a fall of several, rather than hundreds, of feet. But if house price inflation doesn't moderate soon, the gap could soon become too large to avoid a very painful correction.



Marc Colman Economics Editor of the Irish Times.


http://www.daft.ie/report/index.daft


It seems that Mr. Colman has an interest in topography; so are we are on the edge of a gently sloping hillside? What’s at the bottom of the hill? Is it a U shaped valley, with another gentle slope leading upwards? Or is the slope leading to a plain that extends as far as the horizon? 

But hang about we’ve just climbed up a nearly precipitous mountain over the past decade, redolent of the north face of the Eiger I thought mountains were approximately conical in shape steep on all sides. It could be that we have reached a ‘permanently high plateau. 


Permanently High Plateau, that’s it, (sounds familiar though?)

EDIT

*Permantley High Plateau*. I remember now, Irving Fisher a famed financial journalist and economist made that topographical remark back in 29’. 




> The stock market crash of 1929 and the subsequent Great Depression cost Fisher much of his personal wealth and academic reputation. He famously predicted, a few days before the Stock Market Crash of 1929, _"Stock prices have reached what looks like a permanently high plateau."_ For months after the Crash, he continued to assure investors that a recovery was just around the corner


 
http://en.wikipedia.org/wiki/Irving_Fisher


----------



## Firefly

How about this for a conspiracy theory....the Irish Times, in an elaborate attempt to move focus from proprty prices, is trying single-handedly to re-ignite the dot.com bubble by forking out 50m for a website! 

Firefly


----------



## shnaek

room305 said:
			
		

> I've been giving this some serious consideration. The UK would be my preference but it too is vulnerable to a housing collapse. Other options would include France and Germany or the Scandanavian countries. I'll keep my options open and see how things play out globally. Luckily in the line of work I am in I could conceivably stay here and work contracts for companies based abroad.
> I think that phrase is the other way round but the point is well taken. There may well be a global economic downturn.



Yeah, been looking at Germany myself. Seems to me that when the US and UK are doing badly, Germany and Japan do well - and vice versa. Either way the Germans have been in recession for a long while. It's not going to get any worse over there so you know what you're getting. Things can only go one way over here, and I would be a lot more confident of the Germans and Sandanavians pulling themselves out of the sh*t than our crowd here who have never proven they can run a country responsibly.


----------



## whathome

Duplex said:
			
		

> so are we are on the edge of a gently sloping hillside? What’s at the bottom of the hill?


 
House prices are usually sticky on the way down making it look more like a sloping hill that continues down for a long time. The question is, how far do prices have to fall before we experience the "soft landing"? !!!


----------



## Bedsit

*Australia's central bank lifts interest rates*

*http://news.xinhuanet.com/english/2006-08/02/content_4907909.htm*


----------



## exile

Firefly said:
			
		

> How about this for a conspiracy theory....the Irish Times, in an elaborate attempt to move focus from proprty prices, is trying single-handedly to re-ignite the dot.com bubble by forking out 50m for a website!



Honestly?  It's not one of the better ones.


----------



## bogwarrior

oz interest rates went up again yesterday, and property prices have stalled (and started going backwards) in parts of sydney and melbourne over the last couple of years - where prices had risen to all time highs. 
Australia, of course, isn't solely relying on property to drive their economy (which appears to be the case here). Its currently riding a resources boom (selling iron-ore to china etc) and should be able to cope with a significant decrease in property prices.  

The worrying thing is, that despite having two very fiscally aware leaders (John Howard and Treasurer Peter Costello) and having their own independent central bank (reserve bank of australia) they still allowed a property bubble to develop over the last 10 years or so.  So what hope do we have here with Bumbling Bertie leading the dance and the ECB calling the tune.....




			
				phoenix_n said:
			
		

> Years ago i always had that in mind. Didnt want to end up in the UK if economy went belly up. Went to oz and got a passport. Its an option that i have.


----------



## Duplex

whathome said:
			
		

> House prices are usually sticky on the way down making it look more like a sloping hill that continues down for a long time. The question is, how far do prices have to fall before we experience the "soft landing"? !!!


 

Coleman suggests that we will have a fall of 'several feet'.  Which would seem to suggest a 'soft landing'.   

So I suppose you could view Mr Colemans announcement as being highly significant, he being the Economics Editor of Irelands self styled ‘Quality Daily’.  The problem I have is that his views are long on topography and short on economics.  What happens to the speculator market when prices stop rising? Will builders keep knocking out new homes?.  No mention of the global situation.    If I were cynical I’d almost believe that he was pitching bulls*it at the credulous.


----------



## phoenix_n

The Irish Times decision to buy the web-site was not a bad decision as some may think. Remember in a soft-landing/crash people will want to sell and the website only makes money from houses for sale. So if before you had 10 houses on offer in a particular area,now say you will have 20. But. More importantly whilst a house may before been on the market for 4 weeks now it may be (like it was before) on the market for 4 months. Assuming that an EA pays per week for an advertised house if say 10 euros.thats 10*20*16weeks rather than 10*10*4weeks. 3200 projected revenue against past 400. Simple example but logical to me.
They may have made a very smart decision.


----------



## walk2dewater

shnaek said:
			
		

> the Germans have been in recession for a long while. It's not going to get any worse over there so you know what you're getting. Things can only go one way over here, and I would be a lot more confident of the Germans and Sandanavians pulling themselves out of the sh*t than our crowd here who have never proven they can run a country responsibly.


 
Germany has not and is not in a recession. It is a myth. Their GDP is based on engineering, manufacturing and exporting things of high value. US/UK is based on debt and consumption. Which do you think is stronger and more sustainable? In the last week, US GDP for the LAST 2 YRS has been revised down, while Germanys is being revised up. [See yesterdays Lex column in the FT]. The QUALITY of GDP matters as well as the QUANTITY. Go visit Germany, it blindingly obvious that the Germans are doing a lot of things right.

Finally, it matters very little to German consumers and manufacturers what interests are. They have no debt. We on the other hand are drowning in it, and live and die by the ECB.


----------



## CelloPoint

phoenix_n said:
			
		

> The Irish Times decision to buy the web-site was not a bad decision as some may think. Remember in a soft-landing/crash people will want to sell and the website only makes money from houses for sale. So if before you had 10 houses on offer in a particular area,now say you will have 20. But. More importantly whilst a house may before been on the market for 4 weeks now it may be (like it was before) on the market for 4 months. Assuming that an EA pays per week for an advertised house if say 10 euros.thats 10*20*16weeks rather than 10*10*4weeks. 3200 projected revenue against past 400. Simple example but logical to me.
> They may have made a very smart decision.



And with that E50m they have ruined the integrity of the publication and will not be able to publish unbiased reports on what will be the biggest news story in 10 years. The paper is gone to hell and I wish them bad luck in their new generic glass-house on Tara Street. (slightly off topic) The current premises they occupy on D'Olier Street have charachter and are steeped in history. The move to an awful looking glass-fronted building just typifies what is happening at the Irish Times


----------



## Bedsit

Irish mortgages: Pain on the way 

Here is a link to an old article from the Sunday Business Post. Below is an interesting snippet from the same.

"The sensitivity of Irish mortgage holders to rising interest rates will be far greater than for many other EU citizens because the vast majority of Irish borrowers - about 75 per cent - have variable mortgage rates, while the majority of continental borrowers - especially in France and Germany - have long-term fixed rate mortgages at rates that are far lower than the fixed-rate mortgages available here. In other eurozone countries, mortgages may be at variable rates, but they are capped ...

Last week, ten-year fixed rate mortgage deals in Ireland were priced at about 4.6 per cent. Generally speaking, Irish banks do not market longer-term fixed-rate mortgages, though Bank of Ireland said it offered a 20 year fixed-rate product at 5.2 per cent.

Our long-term fixed-rate mortgages are far dearer than in France, where, last week, you could get a 15-year fixed-rate mortgage at 3.25 per cent, a 20 year fixed-rate mortgage at 3.4 per cent or a 25-year fixed-rate mortgage at 3.55 per cent, according to the French website www.meilleurtaux.com, which analyses the best rates available on the market."

Need one say more!!


----------



## Persius

Germany may not be in recession, but it is in some difficulty. It has an unemployment figure of around 9 or 10%, though admitedly it is coming down slightly. It has a low birthrate and an aging population which is putting pressure on their health and pension budgets. It has breached one of the Maastricht criteria (something about current account defecit and 3% - never really understood it) three years running and may breach it again this year. It is suffering from political paralysis and this is unlikely to change soon as it's due to the structure of the Federal Republic, deliberatly so created after WW2 to prevent the rise of a strong centralist State. And there is a pretty negative vibe in the country regarding the economy and future prospects (not fun to live through, as we may discover in the next few years).

Having said all that, it is a stable economy and is growing at around 1.5 to 2%. Taxes may be high but you get good public services for your money and the general cost of living is lower than Ireland. Accomodation is not cheap, but is good quality. There are jobs in Germany, though it takes longer to find one due to the more formal nature of the recruitment process. Due to the demographics there, they expect skills shortages in certain areas in the near future.

Seeing as I speak the lingo, that would be one of my main options should the economy go belly up here and I lose my job as a result. It also has the advantage of being EU (no work permit required) and Eurozone.


----------



## Del3D

*House Prices Falling - its official!*

The full Daft report is published here at:
http://www.daft.ie/report/DaftReport-Q22006.pdf

Now, I was impressed with Daft's frankness about the figures, but they don't present the full story - look at Page 2 of the report. There is a table...

Asking Prices, Residential Sales
Base: 2005 = 100 (includes preliminary figure for July)

2005 2006
January  89.0 104.7
February  95.1 108.3
March 96.9   109.3
April 97.1 110.5
May 98.3 107.8
June 100.4 106.6
July 100.3 105.4
August 99.7
September 103.0
October 104.7
November 106.5
December 109.0

(Sorry about the formatting - not easy!)

So just to explain the annual growth figures. They take the average price for 2005 and set that at 100 (i.e. could  be €450k). So annual growth  % is calculated by taking the normalised value in April 2006 at 110.5 and subtracting the value in April 2005 at 97.1  giving 13.4% growth in property price between April 2005 and April 2006.

Now - my headline would be! *Current house prices have fallen constantly by 5.1% since April this year! *(i.e. from 110.5% in April'06 to 105.4% in July'06 - this compares to a rise of 3.2% for the same period last year)

Frankly you can make any figure from the statistics above, but I would have thought that this would catch the public's attention!

In  the report they use average quarterly figures. You don't have to be a genius to see that there is no way that they will be able to hide the drop in the Q3 figures given this downward trend!


----------



## SteelBlue05

*Re: House Prices Falling - its official!*



			
				Del3D said:
			
		

> Now - my headline would be! *Current house prices have fallen constantly by 5.1% since April this year! *(i.e. from 110.5% in April'06 to 105.4% in July'06 - this compares to a rise of 3.2% for the same period last year)
> !


 
They also fell from June to August inclusive last year, so is just a seasonal factor?


----------



## whathome

*Re: House Prices Falling - its official!*



			
				Del3D said:
			
		

> You don't have to be a genius to see that there is no way that they will be able to hide the drop in the Q3 figures given this downward trend!


 
When house prices dropped in 2001 the announcements from BOI/PTSB/DNG etc suddenly switched from 
"House prices jumped by XX% last month" 
to "The annual rate of house price inflation slowed slightly last month"

Then when prices started to rise again in early 2002, the announcements went back to headline grabbing monthly figures. 

Anything to avoid reporting a drop!


----------



## thewatcher

2Pack said:
			
		

> Thats pretty much my advice with a smidge extra. Try to have 10% of the price handy when you do dip in.
> 
> Theres no point bustin yo' balls to buy onto that 'ladder' at the back of Ballivor , especially if you are a Dub  Lifes too short.


 
I already had a house but sold it,i'm aiming for a Ltv of 50-60% when i dip back in.


----------



## CelloPoint

Can we have a prize for the 1000th poster?


----------



## Firefly

Personally I see the biggest drop (in Dublin) occurring in apartments - 000's of FTBs are buying these and will, after about 2 years, grow tired of maintenance bills & lack of space. This will lead to them chasing either houses in the city, if they have the funds, or joining the commuter belt. Given the number of new builds in commuter-ville, my money is on the 3-4 beds inside the M50.....
Firefly


----------



## SteelBlue05

Firefly said:
			
		

> Personally I see the biggest drop (in Dublin) occurring in apartments - 000's of FTBs are buying these and will, after about 2 years, grow tired of maintenance bills & lack of space. This will lead to them chasing either houses in the city, if they have the funds, or joining the commuter belt. Given the number of new builds in commuter-ville, my money is on the 3-4 beds inside the M50.....
> Firefly


 
I agree, appartment living gets tiresome very quickly with..
- Maintenance Bills
- Always using elevators and stairs
- Walking up and down to the car park
- Lack of space
- More possibilities of noisey neighbours

There is a lot to be said for semi-detached houses! Or detached ones if you have deeper pockets!


----------



## phoenix_n

Firefly said:
			
		

> Personally I see the biggest drop (in Dublin) occurring in apartments - 000's of FTBs are buying these and will, after about 2 years, grow tired of maintenance bills & lack of space. This will lead to them chasing either houses in the city, if they have the funds, or joining the commuter belt. Given the number of new builds in commuter-ville, my money is on the 3-4 beds inside the M50.....
> Firefly


 
And the first to get hit are those ground floor apartments. Especially 1 bed.


----------



## redo

The only properties effected by a downturn will be the ones in less desirable locations.  The mad rush over the last couple of years to get on the ladder 'no matter where' will be hit the hardest.

EDIT:
Perhaps the use of the word 'only' is a bit misleading.  Read - Majority.


----------



## whathome

Look at the difference in these two headlines:
Feb 2002 : http://www.rte.ie/business/2002/0207/houses.html
Mar 2002 : http://www.rte.ie/business/2002/0321/houses.html

Also - interesting how long the lag was in relation to the market.  By the time the Feb report came out, prices had taken a big jump.


----------



## snuffle

A real actual conversation had today with a supposedly intelligent co-worker - 

Q:My home has gone up by 40k, how do I apply to release equity from this to put as a deposit on a 2nd home,I want to become a property investor? 
A: (from me) you re-mortgage your house for the 40k. 
Q: so does that mean repayments on my own mortgage will go up???
A: yes, you are borrowing the 40k against your PPR, mortgage to increase accordingly.
Q: but I thought the bank would just give me the 40k seeing as I "earned" it?
A: so you are saying that the bank now "owes" you 40k out of the blue, as a windfall of sorts...is the irish property bubble fairy supposed to leave it under your pillow...

this woman thought the banks should deposit 40k into her account out of thin air as her house was now worth more.  Give me strength!!! If this is the level of some wannabe-investors in the property market, I fear for their future....


----------



## bogwarrior

well, at least she asked the questions and no longer lives under that misconception - it'll probably make her reconsider becoming an investor too.


----------



## MugsGame

> Can we have a prize for the 1000th poster?


No!


----------



## whathome

redo said:
			
		

> The only properties effected by a downturn will be the ones in less desirable locations. The mad rush over the last couple of years to get on the ladder 'no matter where' will be hit the hardest.
> 
> EDIT:
> Perhaps the use of the word 'only' is a bit misleading. Read - Majority.


 
Or maybe the word is 'initial' - those properties prop up the rest of the market!


----------



## dontaskme

Persius said:
			
		

> Accomodation (in Germany) is not cheap, but is good quality.


 
I agree your analysis other than the above. 

It depends where you are renting or buying.

Munich and Hamburg are most expensive, but I don´t think they would be significantly dearer than Dublin. 

But much of the country would be less expensive, especially the former east, where there are something like a half million empty apartments. 

In cash terms, I would say most of the country would be less expensive than Dublin (to rent at least), but because taxes are higher people don´t have as much disposable income anyway.


----------



## redo

whathome said:
			
		

> Or maybe the word is 'initial' - those properties prop up the rest of the market!


Yes, you're probably right


----------



## Contrarian

I spent time in Cologne last month during the world cup and was told that you can rent a 2 bedroom apartment in the centre of Cologne which is a fantastic city with the population of Dublin for €500 per month or around €200,000 to buy. By any measure, far cheaper than here.


----------



## phoenix_n

Contrarian said:
			
		

> I spent time in Cologne last month during the world cup and was told that you can rent a 2 bedroom apartment in the centre of Cologne which is a fantastic city with the population of Dublin for €500 per month or around €200,000 to buy. By any measure, far cheaper than here.


 
And i know of a building in central Hamburg (this from local knowledge) with four 2 bed apartments and one studio for 430,000. Transaction costs are about in total 10%. But its a complicated process to buy but yields are about 6 to 7%.


----------



## Glenbhoy

> I spent time in Cologne last month during the world cup and was told that you can rent a 2 bedroom apartment in the centre of Cologne which is a fantastic city with the population of Dublin for €500 per month or around €200,000 to buy. By any measure, far cheaper than here.


TBH, comparisons such as that are a waste of time and I don't know why people keep on bringing them up.  If Cologne/Stockholm are such fantastic value move there.


----------



## whathome

Spain may try to resist ECB rate rises:
http://www.bloomberg.com/apps/news?pid=20601085&sid=aM6MYWJId9wE&refer=europe

I wonder how much influence John Hurley from the Central Bank has - would he be dovish or hawkish?


----------



## Afuera

*Re: House Prices Falling - its official!*



			
				SteelBlue05 said:
			
		

> They also fell from June to August inclusive last year, so is just a seasonal factor?



I'm sure the season has something to do with it but it has dropped earlier (by 2 months) and a lot faster this year when compared to last year.

It only dropped 0.7% between June and August last year during the slow season. It's already dropped 1.2% between June and July of this year and when August's figures are included this will surely pull it even further below.

I guess none of this is that surprising in a climate of rising interest rates though I haven't seen it so clearly laid out before. I think next Septembers and Octobers figures are going to be crucial in determining how things will unfold.


----------



## Contrarian

What do you want to compare Dublin with? New York, Paris, Tokyo and Sydney? I'm sorry, but Dublin is not one of the world's great cities. It is a small city in a small country with a 3rd world infrastructure.


----------



## Glenbhoy

> What do you want to compare Dublin with? New York, Paris, Tokyo and Sydney? I'm sorry, but Dublin is not one of the world's great cities. It is a small city in a small country with a 3rd world infrastructure.


I don't want it compared with anything, that was my initial point (not having a go at you, it just that comparisons are not really possible).
Re your points on infrastructure and smallness etc, why stay (if indeed you reside in ireland)?


----------



## Bedsit

Here is an interesting snipppet from the Australian property market

"Perth couple Brian and Eileen Bowden are among thousands reaping the benefits of the state's robust economy as they prepare to extract a $100,000 profit on their home in just six weeks. 
Having paid $420,000 for a four-bedroom, two-bathroom house in Perth's northern suburbs six weeks ago, they are now preparing to sell and build the house of their dreams."

Also in the article a HBOS Australia spokesman rejects that there is a housing bubble in Perth

[broken link removed]

While another headlines reads "*HBOS rides homes boom"*
HBOS Australia, the owner of WA's biggest home lender, said yesterday it was alert to warning signs of a property bubble after the state's red-hot real estate market helped fuel another bumper profit.

[broken link removed]


----------



## Duplex

> Mr Bowden, 61, said the increase in house prices in such a short time far outweighed the thousands of dollars in stamp duty and taxes in buying and selling the property. He said the property market was so tight that most houses sold before the first public viewing.
> "Most people now would just need to advertise their house and it is gone," he said.
> 
> *"The people who we bought this house from made $100,000 off us, so it's a non-stop cycle."*


 
Free money, alchemy at last!!!


----------



## gearoidmm

The Daft report is interesting.  I've long wondered what the lag is between the prices you see advertised and the ESRI/PermanentTSB figures.  Looking at the ESRi figures for last year, house price inflation really started to take off again in October/November while in the DAFT report, it began in August.  This suggests that any slowdown won't appear in the ESRI figures for another 2 months at least (and would explain the apparent contradiction that prices are powering ahead in one index while they are flat in the other).

5% drop in the last four months..


----------



## gearoidmm

Town wants $384k for a pee by the sea

http://www.chinadaily.com.cn/world/2006-08/02/content_655800.htm


----------



## RiceCakes

gearoidmm said:
			
		

> Town wants $384k for a pee by the sea
> 
> http://www.chinadaily.com.cn/world/2006-08/02/content_655800.htm



The fact that properties like this are so bizzarly priced that a news site in China deems it so odd its newsworthy is just plain embarissing to be honest.


----------



## thewatcher

madisona said:
			
		

> I think we finally have our equivalant to the 1987 London broom closet.
> €300,000 for a toilet.


 
And everyone knows what happened then !.


----------



## bearishbull

gearoidmm said:
			
		

> Town wants $384k for a pee by the sea
> 
> http://www.chinadaily.com.cn/world/2006-08/02/content_655800.htm


The madness continues. I've seen a few similar in last year in foreign media including a tiny house in dublin 8 that used to be a shed and a tin shed on coast in wicklow somewhere. Meanwhile i was looking at property prices in san diego (an affluent southern californian city with great quality of life,weather etc) and large 2 bed aprtments close to the beach are much cheaper than their irish equivalents despite the state of this country(weather, infrastructure, sustainability of economy, public services)


----------



## Duplex

Australia

[broken link removed]


----------



## RiceCakes

[FONT=Arial,Helvetica,sans-serif]Jaysus, every corner of the globe can't believe it, yet..it's a bargain according politition Martin Conway..

Time this bloody pyramid came crashing down, we are the laughing stock of the rest of the world at this point.
[/FONT]


----------



## whathome

The drop in the number of First Time Buyers due to demographics will start to appear over the next few years, this will probably compound any problems that the property market experiences.

According to a Central Statistics Office report: Between 1991/92 and 2001/02, the total number of pupils in schools in the Republic of Ireland *decreased* by *100,000*

[broken link removed]


----------



## whathome

Two hard-hitting headlines in the Independent today:

*"Mortgage holders to struggle as interest rates rise again"* and

*"Home rate hikes to hit hard today"*


----------



## beattie

whathome said:
			
		

> Two hard-hitting headlines in the Independent today:
> 
> *"Mortgage holders to struggle as interest rates rise again"* and
> 
> *"Home rate hikes to hit hard today"*


 
It is hard to fathom why the Indo has become so bearish over the past couple of months, the writing has been on the wall for a much longer period than that


----------



## whizzbang

beattie said:
			
		

> It is hard to fathom why the Indo has become so bearish over the past couple of months, the writing has been on the wall for a much longer period than that



Bad news sells newspapers perhaps? Also they didn't just spend 50 million on a property site


----------



## Guest107

*prop site*

NO!

The TIMES spent €50m on a property site and are not being bearish 

The Indo are being responsible here, someone has to prick the bubble .


----------



## Bedsit

*ECB*

The ECB president gives a media briefing once the council meeting has concluded. You can watch him live at the following site:

http://www.ecb.int/home/html/index.en.html


The schedule is usually as follows (all times are local):

12:30 pm - Rate decision posted on the site
1:30 pm     - Press conference


----------



## dontaskme

Glenbhoy said:
			
		

> I don't want it compared with anything, that was my initial point (not having a go at you, it just that comparisons are not really possible).
> Re your points on infrastructure and smallness etc, why stay (if indeed you reside in ireland)?


 
I disagree, I think it is only logical to compare Dublin with other cities or Ireland with other countries.

No two cities or locations are exactly the same but it still makes sense to compare value for money etc.

I´d say that comparisons like "I know some guy who bought an apartment for 200k in Berlin when he would not have got anything in Dublin for the same price" are probably not that useful, but if you can´t compare prices generally speaking  in one city to another then how can you tell when one city is overpriced or oversold?


----------



## phoenix_n

whathome said:
			
		

> Two hard-hitting headlines in the Independent today:
> 
> *"Mortgage holders to struggle as interest rates rise again"* and
> 
> *"Home rate hikes to hit hard today"*


 
But the headline *Petrol prices to rise *will have a greater impact.

(can somone create a link to the first headline "mortgage holders....." .Cant find the article on unison.ie ....cheers)


----------



## walk2dewater

We'll see analysis in the weekend papers about how much less individuals/couples can borrow on a given income at 3% ECB.  We'll also see more advertising for fixed mortgage rates.

The message will be buy before your ability to borrow is further eroded, and buy to lock in a "low" fixed rate.


----------



## whathome

phoenix_n said:
			
		

> (can somone create a link to the first headline "mortgage holders....." .Cant find the article on unison.ie ....cheers)


 
http://www.unison.ie/irish_independent/stories.php3?ca=9&si=1663926&issue_id=14442


----------



## whizzbang

phoenix_n said:
			
		

> But the headline *Petrol prices to rise *will have a greater impact.



Excellent, more visitors to my web site!  Visits go up when prices rise, then people get used to prices and visits drop. Its amazing to watch how quickly people get used to higher prices.


----------



## phoenix_n

whizzbang said:
			
		

> Excellent, more visitors to my web site!  Visits go up when prices rise, then people get used to prices and visits drop. Its amazing to watch how quickly people get used to higher prices.


 
Shameless plug. 

Thanks whathome for the link.


----------



## room305

walk2dewater said:
			
		

> We'll see analysis in the weekend papers about how much less individuals/couples can borrow on a given income at 3% ECB.  We'll also see more advertising for fixed mortgage rates.
> 
> The message will be buy before your ability to borrow is further eroded, and buy to lock in a "low" fixed rate.



The Sunday Business Post already did an analysis, with the conclusion that a couple would qualify for about €100k less when the rates had increased by one percent.

I would be very interested in seeing how much business the banks are doing in selling fixed rate loans rather than variable over the past month or so. Certainly their personal lending seems to be heavily focused on fixed rate personal loans - to judge by their advertising.


----------



## phoenix_n

whathome said:
			
		

> http://www.unison.ie/irish_independent/stories.php3?ca=9&si=1663926&issue_id=14442


 
 

"However, estate agents Hooke & MacDonald has seen very strong interest from prospective buyers registering for new property launches in September. Mr Conway said buyers will turn to parental assistance and co-signing to get over the initial shock of rate rises. "
 
I completely disagree with this. If they are of the impression that parents are going to encourage their children to go into debt i think he is under a great mis-conception


----------



## redo

room305 said:
			
		

> The Sunday Business Post already did an analysis, with the conclusion that a couple would qualify for about €100k less when the rates had increased by one percent.
> 
> I would be very interested in seeing how much business the banks are doing in selling fixed rate loans rather than variable over the past month or so. Certainly their personal lending seems to be heavily focused on fixed rate personal loans - to judge by their advertising.


We may see the introduction of some new interest rate products.  An interest rate ceiling, for example.  The rate can't go above a certain rate but if the rate comes down, you get the benefit.  All this at a premium though.

Another thing we will witness this autmn, is more "zoned" land coming up for sale by developers who don't want to build on it in this current climate.  Most canny developers will just keep it for another time, but some extra supply will come onto the market, I suspect.


----------



## whathome

phoenix_n said:
			
		

> "Mr Conway said buyers will turn to parental assistance "


 
Conway's sweet shop:
"You haven't enough - Go ask Mummy or Daddy for some more change"


----------



## room305

phoenix_n said:
			
		

> I completely disagree with this. If they are of the impression that parents are going to encourage their children to go into debt i think he is under a great mis-conception



Actually I think he could be bang on the money. Remember that RTE show "I'm an adult get me out of here!". I think just about every person featured got financial aid from their parents to get on the ladder.

From the parent's perspective they might regard stumping up €40k as cheap business to get rid of little Johnny ...


----------



## room305

redo said:
			
		

> We may see the introduction of some new interest rate products.  An interest rate ceiling, for example.  The rate can't go above a certain rate but if the rate comes down, you get the benefit.  All this at a premium though.



Already here. IIB have a capped tracker mortgage. The capped component runs out after a year or two though and it becomes a simple tracker.


----------



## Afuera

I think it's around this time that we'll see 40 and 50 year mortgages being launched on the market as an attempt to address the afforability wall being reached.

While the message coming from banks and real estate agents is to "buy now", "it's going to be a soft landing" evidence from the US seems to suggest that we could be encountering a global slump. If people start to hear reports of a hard crash in the property market in the US can they continue to sing the mantra "it can't happen here, we're different."?


----------



## Persius

dontaskme said:
			
		

> I disagree, I think it is only logical to compare Dublin with other cities or Ireland with other countries.
> 
> No two cities or locations are exactly the same but it still makes sense to compare value for money etc.
> 
> I´d say that comparisons like "I know some guy who bought an apartment for 200k in Berlin when he would not have got anything in Dublin for the same price" are probably not that useful, but if you can´t compare prices generally speaking in one city to another then how can you tell when one city is overpriced or oversold?


 
I agree, so long as the comparissons also include average take home pay, average rents per square meter, size of city/country, state of economy, interest rate (if not in Eurozone), demographics etc.

So to give an example: Property in Munich costs on average about €3000 per square meter. So a 70 square meter 2 bed appartment would cost around €210,000 (add 4 to 8% transaction costs). This is for property within the city limits and there is not huge variation to the same extent as Dublin. Munich has a similar population to Dublin and the economy is strong and mixed with many multinationals. It's the third biggest city in Germany and one of the wealthiest. The banks are not as generous as the irish banks - traditionally requiring 20% deposit, though this has been dropping to between 5 and 10% in the last few years.

I _think_ wages in Munich are similar to Dublin, though the tax burden is higher. Offsetting that is the fact that the general cost of living is lower. Rents are about €11 per square meter. So the same property would cost about €770 to rent. Germany in general has a low birthrate and Munich has a very high percentage of youngish singles. People having families tend to move out of the city. Older people move back in.

Now based on these sort of comparissons I think you can make some sort of judgement on the relative value in Dublin property. However I think cities like Vienna, Rotterdam, Helsinki, Copenhagen would make for better comparissons with Dublin (or the same countries for Ireland).


----------



## Raskolnikov

whathome said:
			
		

> http://www.unison.ie/irish_independent/stories.php3?ca=9&si=1663926&issue_id=14442


More sensationalist tosh from the Indo, a 1/4% interest hike will put the squeeze on mortgage holders, but certainly won't "cripple" them like the Indo is suggesting. It took interest rates to rise to over 4% in the UK before the skids were put on the market there. 3% in the scheme of things, is still reasonable.


			
				phoenix_n said:
			
		

> I completely disagree with this. If they are of the impression that parents are going to encourage their children to go into debt i think he is under a great mis-conception


As of last year, the ESRI  that 20% of FTB are already receiving parental assistance in purchasing their homes. I would expect that as the threshold of affordability is being reached, the "Bank of Mam and Dad" (TM "I'm an adult get me out of here!". ); will pull out all the stops to get their little darlings on the property ladder.

I mean, if they don't get one now, they're _never _going to own a home!


----------



## frazzled

Afuera said:
			
		

> While the message coming from banks and real estate agents is to "buy now", "it's going to be a soft landing" evidence from the US seems to suggest that we could be encountering a global slump. If people start to hear reports of a hard crash in the property market in the US can they continue to sing the mantra "it can't happen here, we're different."?


 
How's this for starters:

*US housing 'saviour' on slide*
http://www.unison.ie/irish_independent/stories.php3?ca=184&si=1664041&issue_id=14442


----------



## Glenbhoy

dontaskme said:
			
		

> I disagree, I think it is only logical to compare Dublin with other cities or Ireland with other countries.
> 
> No two cities or locations are exactly the same but it still makes sense to compare value for money etc.


It's just that any comparison is very difficult.  There are all the basics such as: income, disposable income, local economy, banks willingness to lend, local infrastructure, govt incentives, legal implications of renting, type of housing stock, population density etc. Then there are the intangibles, such as mindset, the utility value individuals derive from ownership, lifestyle choices, this list is pretty long.
You've also got to consider that Dublin whilst population may not be huge in world terms, relative to the population in this state is massive, ie approx 50% of the population are Dubs to some degree and so on.......


----------



## whathome

Raskolnikov said:
			
		

> 3% in the scheme of things, is still reasonable.


 
you're correct - it's still very low.  

Interestingly, house prices dropped in 2001 despite interest rates coming down three times (total rate drop 1.25%) that year.


----------



## Guest107

Munich also has a stonkingly good public transport system so your two adult FTB unit do not 'need' to live out the back of Ballivor and run 2 cars either, they can move to Starnberg or Passau or somewhere. 

If they did live out the back of Ballivor there would be a fabulous S-Bahn service nearby. It goes out about 30 miles from the centre. Dublin is a bloated mess with feck all proper public transport. Its about 3 times the physical  size of Munich with the same population. Each U-Bahn and S-Bahn train line would have to be *3 Times Longer on Average* to cover the same number of people . Also remember that Muicnh built this system 30 years back and have now paid for it., Dublin cannot even agree a route for the first tube line to the Airport  

Thats why I consider that Dublin works ONLY as a walking city (D1/D2/D8) and if its too long to walk its not a proposition for me at all   Munich is also a lot safer and has a lot less street scumbaggery which explains why  the elders move back into town while we gate them in instead.

All in all its a hell of a lot better than the mindless semi d sprawl that is the entire Pale nowadays.


----------



## phoenix_n

2Pack said:
			
		

> Munich also has a stonkingly good public transport system so your two adult FTB unit do not 'need' to live out the back of Ballivor and run 2 cars either, they can move to Starnberg or Passau or somewhere.
> 
> If they did live out the back of Ballivor there would be a fabulous S-Bahn service nearby. It goes out about 30 miles from the centre. Dublin is a bloated mess with feck all proper public transport. Its about 3 times the physical size of Munich with the same population. Each U-Bahn and S-Bahn train line would have to be *3 Times Longer on Average* to cover the same number of people .
> 
> Thats why I consider that Dublin works ONLY as a walking city (D1/D2/D8) and if its too long to walk its not a proposition for me at all  Munich is also a lot safer and has a lot less street scumbaggery which explains why the elders move back into town while we gate them in instead.
> 
> All in all its a hell of a lot better than the mindless semi d sprawl that is the entire Pale nowadays.


 
ur gonna get the thread locked by going off topic !


----------



## Guest107

phoenix_n said:
			
		

> ur gonna get the thread locked by going off topic !




Factors such as properly functioning mature public transport systems are of great  importance to some of us when considering our 'Location Location Location' inputs into our house price  sustainability models.

Majorly Car dependent peripheral communities at the outer edge of communter belts nationally are at a higher risk of a sharper correction that elsewhere which is why I posited '2packs 2Band effect' in the past.  

Public Transport infrastructure backlogs are so great in Ireland that it will take 30-40 years to address the problem in the greater Dublin area. Munich (conveniently)  is a perfect example of what Dublin is not.  

Dry Nuff For Ya Head ????


----------



## soma

Afuera said:
			
		

> I think it's around this time that we'll see 40 and 50 year mortgages being launched on the market as an attempt to address the afforability wall being reached.


Actually Afuera, talk of 50 year mortgages is a complete red herring. When you enter into repayments over such a long period of time, good old mathematics kicks in and the monthly repayments (i.e. the 'new affordability') are actually not much different from smaller repayment periods.

_Example_
€250k over *35 years* @5.0% : *€1262/mth*
€250k over *50 years* @5.0% : *€1135/mth*

There is essentially no difference in 'affordability'.


----------



## Howitzer

Raskolnikov said:
			
		

> More sensationalist tosh from the Indo, a 1/4% interest hike will put the squeeze on mortgage holders, but certainly won't "cripple" them like the Indo is suggesting. It took interest rates to rise to over 4% in the UK before the skids were put on the market there. 3% in the scheme of things, is still reasonable.


 
Your analysis of the UK market reaction to interest rates is incorrect. It did indeed take rates to go over 4% in the UK to put the skids on property price increases but the starting point was 3.5%. Rates went from a bottom of 3.5% in Nov 03 to a peak of 4.75% in Aug 04. This was only a 1.25% increase and as relative measure was only a 30% increase in interest rates.

http://news.bbc.co.uk/2/hi/business/5240770.stm

By the end of today we'll have gone from 2% in Nov 05 to 3% in Aug 06. A 1% increase or 33% increase in interest rates.


----------



## CelloPoint

So to give an example: Property in Munich costs on average about ?3000 per square meter. So a 70 square meter 2 bed appartment would cost around ?210,000 (add 4 to 8% transaction costs). This is for property within the city limits and there is not huge variation to the same extent as Dublin. Munich has a similar population to Dublin and the economy is strong and mixed with many multinationals. It's the third biggest city in Germany and one of the wealthiest. The banks are not as generous as the irish banks - traditionally requiring 20% deposit, though this has been dropping to between 5 and 10% in the last few years.

I _think_ wages in Munich are similar to Dublin, though the tax burden is higher. Offsetting that is the fact that the general cost of living is lower. Rents are about ?11 per square meter. So the same property would cost about ?770 to rent. Germany in general has a low birthrate and Munich has a very high percentage of youngish singles. People having families tend to move out of the city. Older people move back in.
[/QUOTE]
Agree with much of this. There is no value whatsoever to be had in Dublin.



			
				Persius said:
			
		

> Now based on these sort of comparissons I think you can make some sort of judgement on the relative value in Dublin property. However I think cities like Vienna, Rotterdam, Helsinki, Copenhagen would make for better comparissons with Dublin (or the same countries for Ireland).


I'm laughing at the comparison of Dublin with Vienna, Rotterdam, Helsinki, Copenhagen. A population comparison is certainly valid, but in terms of cultural sophistication and taste we are still muck-savages (just take a look at Dublin, Galway, Cork on a typical Saturday night and you'll get a flavour for the kind of 'culture' of the _neuve riche_). 

Irish people were always good hard workers and are prepared to roll up their sleeves and get on with the job. Unfortunately, after a hard day's work, they'd enevitably end up down in the pub and drink themselves silly. I think much of the hard graft was done in the 80s and 90s and we're all drinking ourselves silly thinking everything will be all right in the morning. We've a massive hangover coming our way and we're just going to have to bear it.

There's a cultural identity crisis in Ireland at the moment and given the amount of bling-bling cars and awful clinical looking houses around the place, you really get a feel for how ignorant and unclassy Irish people really are. The only culture we have in this modern Ireland is that of consumerism and a constant desire to feed the senses. Dublin is a hell of a long way from Vienna, Rotterdam, Helsinki, Copenhagen, Sydney, Melbourne - and that's just culture; don't get me started on infrastructure, economic governance and public accountability...


----------



## liteweight

Very good 2Pack. What about D4? is it not close enough to town for you?

As suggested, I think by Brendan, in another post. Which risk are people willing to take..the fact that house prices will drop and you'll be able to buy cheaply, or will they stay level and even rise?

To my mind I'd buy because if a FTB is stretched now, and prices continue to rise, then all hope of buying is gone. Most people do not buy their first home with a view to investment..they buy it to live and raise a family in. Therefore, they are talking about staying put for 5 yrs. or more. Who knows what will happen in the market during that time?


----------



## Guest107

Look at the result in the UK, bad debts have incresed dramaticall despite the rates being historically low there. _We owe as much money per person as they do._ Their interest rate is 4.5% base . 

At that historically low level (for us and for them) we nevertheless find that in the UK in the past 2 days alone we see the following reports coming out.

1 in 5 'contemplates' declaring themselves bankrupt.

Barclays Bank Bad Debt Soars

Lloyds TSB Bank Bad Debt Soars

(and D4 is too far out for me as is D6 )


----------



## macbri

Good point,when u go looking 4 a mortgage,u look at repayment not on how much u borrow.
This is the primary reason why property market has boomed not migration/demographics,economic boom etc.

Example,when I was back in Ireland over the summer,found that by borrowing $400k would only cost me $1300 pm(introductory offer at 2.75%) from 1 of the banks
in australia variable rates from financial institutions average 7.8%(base rate 6%)-on same mortgage cost $3200

Doesn't take a genious to work out what will happen in Ireland if rates go up and maybe the 1% increase already sinceb December is enough to stall market


----------



## Afuera

soma said:
			
		

> Actually Afuera, talk of 50 year mortgages is a complete red herring. When you enter into repayments over such a long period of time, good old mathematics kicks in and the monthly repayments (i.e. the 'new affordability') are actually not much different from smaller repayment periods.
> 
> _Example_
> €250k over *35 years* @5.0% : *€1262/mth*
> €250k over *50 years* @5.0% : *€1135/mth*
> 
> There is essentially no difference in 'affordability'.



It's still a 10% reduction in the cost of the monthly replayment (which could be the difference between someone being able to afford to buy or not). Also, banks make super profits off those long term mortgages, so I'd say they could offer a fairly competitive rate on it. It's been used elsewhere so I wouldn't rule it out just yet.


----------



## walk2dewater

liteweight said:
			
		

> To my mind I'd buy because if a FTB is stretched now, and prices continue to rise, then all hope of buying is gone. Most people do not buy their first home with a view to investment..they buy it to live and raise a family in. Therefore, they are talking about staying put for 5 yrs. or more. Who knows what will happen in the market during that time?


 
"Prices go up in the long term", "rent is dead money", "safe as houses", "can't raise a family in a rented home", "prices can't crash where will people live", BUY NOW or "all hope of buying is gone"

What dull, repetitive, un-thinking dogma.


----------



## Calina

liteweight said:
			
		

> To my mind I'd buy because if a FTB is stretched now, and prices continue to rise, then all hope of buying is gone. Most people do not buy their first home with a view to investment..they buy it to live and raise a family in. Therefore, they are talking about staying put for 5 yrs. or more. Who knows what will happen in the market during that time?



This is where you are wrong. This is what people *want* to do. Unfortunately, certainly in Dublin, a lot of people are not buying their first home with a view to raise their family in. It's because a) you can't raise a family effectively in a one or two bedroomed apartment and b) you can't afford a three bedroomed apartment unless you are earning far, far in excess of the average salary. The primary reason why I will not buy is because about the only thing I can afford within 30 minutes drive of work is a onebedroomed box. 

Personally, under the circumstances between the risk of prices going up versus the risk of prices going down, I'd prefer to rent a reasonably decent place with some modicum of space in the short term because on balance, given the average ratio of salary to final house price in this country, I can't see the current gravy train lasting indefinitely. Yes it's a risk, but it's no more of a risk than possibly getting priced out of the market and there is some evidence to suggest that it may be less of a risk.


----------



## Contrarian

These cliches are wearing a bit thin alright. They certainly smack of intellectual dishonesty of the most delusional kind. These types of mantras are also evident in various historical manias of one sort or another.


----------



## Raskolnikov

Howitzer said:
			
		

> Your analysis of the UK market reaction to interest rates is incorrect. It did indeed take rates to go over 4% in the UK to put the skids on property price increases but the starting point was 3.5%. Rates went from a bottom of 3.5% in Nov 03 to a peak of 4.75% in Aug 04. This was only a 1.25% increase and as relative measure was only a 30% increase in interest rates.
> 
> http://news.bbc.co.uk/2/hi/business/5240770.stm
> 
> By the end of today we'll have gone from 2% in Nov 05 to 3% in Aug 06. A 1% increase or 33% increase in interest rates.


True; but 4.75% on a sum is A LOT more than 3% on the same sum even if the percentage increase is less as in the case you pointed out. 

The point I'm trying to make is that it's going to take more than a 1/4% increase in rates before it makes a difference to house prices. This isn't just my opinion, it's the opinion of Dan McLaughlin of the BOI too, who we grudgingly have to admit, is usually right in his forecasts.


----------



## Contrarian

FYI, Dan McLauglhin has been consistently wrong with his forecasts for interest rates.


----------



## whathome

Bank of England have raised rates by .25% to 4.75%
ECB is next!


----------



## Bedsit

Raskolnikov said:
			
		

> The point I'm trying to make is that it's going to take more than a 1/4% increase in rates before it makes a difference to house prices. This isn't just my opinion, it's the opinion of Dan McLaughlin of the BOI too, who we grudgingly have to admit, is usually right in his forecasts.


I'd have to laugh at that . I wonder where he got his PhD from? Maybe it was from "Pacific Western University", the the same place where the previous government chief scientific advisor Barry McSweeney got his from.


----------



## Howitzer

whathome said:
			
		

> Bank of England have raised rates by .25% to 4.75%
> ECB is next!


 
http://news.bbc.co.uk/2/hi/business/5241974.stm

That's quite big news as it wasn't really an expected move and has been made to combat inflation. Stand up to the plate W2DW or are you loading up the truck with bullion as we speak?


----------



## CelloPoint

Calina said:
			
		

> This is where you are wrong. This is what people *want* to do. Unfortunately, certainly in Dublin, a lot of people are not buying their first home with a view to raise their family in. It's because a) you can't raise a family effectively in a one or two bedroomed apartment and b) you can't afford a three bedroomed apartment unless you are earning far, far in excess of the average salary. The primary reason why I will not buy is because about the only thing I can afford within 30 minutes drive of work is a onebedroomed box.
> 
> Personally, under the circumstances between the risk of prices going up versus the risk of prices going down, I'd prefer to rent a reasonably decent place with some modicum of space in the short term because on balance, given the average ratio of salary to final house price in this country, I can't see the current gravy train lasting indefinitely. Yes it's a risk, but it's no more of a risk than possibly getting priced out of the market and there is some evidence to suggest that it may be less of a risk.



This pretty much my thoughts too. I rent in a 3-bed house in Darty and I walk to work. Risk is the number one factor that must be considered when venturing into the uncharted waters of the Irish property marked. Risk is huge and the more we have debates like this (approaching 50k hits already), the edgier the market sentiment gets, the greater the uncertainty and the greater the risk.

I earn a good salary, but to be quite honest, I'm not prepared to hand it over to a landowner for the privilidge of living in the 'back of Balivor' (to quote 2Pack) and commute to work for 4 hours a day. I'm happy enough in Ireland at the moment in the sense that there is lots of work, but I am highly mobile and am in a position to up and leave with a month's notice which I will do if the economic storm clouds come our way.

The greatest fools are the ones coming out with all the mantra that walk2dewater describes:


			
				walk2dewater said:
			
		

> "Prices go up in the long term", "rent is dead money", "safe as houses", "can't raise a family in a rented home", "prices can't crash where will people live", BUY NOW or "all hope of buying is gone"


Such people have probably been reading too many estate agent brochures (indeed the Irish Times property section!)...

Anyway, the ladz, boyos and cute-hoors are all off in their villas in Spain. They've made their millions (in many cases 100s of millions) and they certainly won't be back to sort out the mess they left behind.


----------



## macbri

1 point missing from this debate is where is the future demand going to come from.

Presumably its' so called 'generation Y' people born between 1978 to 1994.

They recently published a study in Australia which concluded that this generation only wants instant satisfaction not long term values/commitment.

On housing,they will rent close to the city(which has driven apartment building in sydney),there not interested in buying.

Why are Irelands' generation Y any different.

On another matter why is rent dead money?
I don't matter paying somebodys mortgage if the yield is 2-4%

I can never understand this and would be happy renting 4 the rest of my life(gives me flexibility,choice and less financial pressure)

This would be the same if I had kids where I could afford to rent in any area of sydney,not the case if I choose to buy


----------



## Raskolnikov

Bedsit said:
			
		

> I'd have to laugh at that . I wonder where he got his PhD from? Maybe it was from "Pacific Western University", the the same place where the previous government chief scientific advisor Barry McSweeney got his from.




_Chief Economist, ABN AMRO Dan obtained his Masters Degree in Economics from Birkbeck College London, before going on to complete a PH.D at Queen Mary College, where he developed a model of the Irish economy. He worked in the City of London in the 1980's, latterly as a Senior Economist for the Midland Bank (now HSBC), before returning to Ireland to take up the post of chief economist at Riada Stockbrokers, now ABN AMRO Stockbrokers. He has written extensively on economic and financial issues and is a well-known commentator on the Irish economy._ 

Sounds well qualified to me.


----------



## room305

I think Dan McLaughlin is a good economist I'd just wonder if his reports are really what he thinks, or if they have been coloured somewhat by the little matter of who is paying his monthly cheque.


----------



## Raskolnikov

Contrarian said:
			
		

> FYI, Dan McLauglhin has been consistently wrong with his forecasts for interest rates.


At April of this year when rates were 2.5%, he predicted rates of 3.5% by Spring 2007 which is exactly what the present forecast is.

http://www.rte.ie/business/2006/0412/houses.html a linky to back it up.


----------



## redo

liteweight said:
			
		

> Most people do not buy their first home with a view to investment..they buy it to live and raise a family in. Therefore, they are talking about staying put for 5 yrs. or more. Who knows what will happen in the market during that time?


Unfortunally, Liteweight, most people in the last 5 years bought "just to get on the ladder", any ladder.


----------



## Contrarian

I does'nt matter how qualified he is, the proof is in the pudding and he has been consistently wrong on the scale of interest rate rises in the eurozone.


----------



## Bedsit

Raskolnikov said:
			
		

> At April of this year when rates were 2.5%, he predicted rates of 3.5% by Spring 2007 which is exactly what the present forecast is.


And so did everyone else for that matter!!

The guy is just a mouthpiece for BoI. He is hardly going to tell us that the "Sky is about to fall"


----------



## cjh

Present forecast is 3.5% by December 2006.


----------



## Raskolnikov

room305 said:
			
		

> I think Dan McLaughlin is a good economist I'd just wonder if his reports are really what he thinks, or if they have been coloured somewhat by the little matter of who is paying his monthly cheque.


I can't believe the opinions of some of the blinkered armchair economists here. Dan McLaughlin is an extremely qualified economist with one of Ireland's leading banks. I imagine that the Bank of Ireland would employ similarily talented financiers, analysts and modellers to draw up the reports that they produce. Unless I see evidence to the contrary, they generally get things right. However, daft.ie's very own Chief Economist; Ronan Lyons (a student who has only just completed his MSc in economics) runs a one man effort using only the asking prices of daft.ie properties; lo and behold, we have the barstoolers here proclaiming the jig is up! Property crash imminent!


----------



## Raskolnikov

Contrarian said:
			
		

> I does'nt matter how qualified he is, the proof is in the pudding and he has been consistently wrong on the scale of interest rate rises in the eurozone.


Back this up please.


----------



## Raskolnikov

cjh said:
			
		

> Present forecast is 3.5% by December 2006.


Did you not read what I said? The man predicted 3.5% by Spring 2007.

The rates hikes between now and then will come October 1st and December 1st. Unless we see a rate hike in January, his prediction will be correct.


----------



## Bedsit

Raskolnikov said:
			
		

> Back this up please.


Check out this short movie by Duplex where Dr Dan kills the guy from the ECB in case he lets the cat out of the bag 

http://www.grapheine.com/bombaytv/play_uk.php?id=724918


----------



## redo

Bedsit said:
			
		

> Check out this short movie by Duplex where Dr Dan kills the guy from the ECB in case he lets the cat out of the bag
> 
> http://www.grapheine.com/bombaytv/play_uk.php?id=724918


Damning evidence


----------



## walk2dewater

Raskolnikov said:
			
		

> we have the barstoolers here proclaiming the jig is up! Property crash imminent!


 
Beg to differ.  This bar stool has a MSc in Economics from a very good Canadian university.  I also get PAID to provide my advice... of course my advice on here is gratis


----------



## Bedsit

ECB rates have gone up as predicted

http://www.ecb.int/home/html/index.en.html


----------



## Contrarian

I'm a postgrad at the London School of Economics at the moment, am also an Oxonian and am training to be a pro futures trader so armchair economist I ain't.


----------



## Calina

Raskolnikov said:
			
		

> I can't believe the opinions of some of the blinkered armchair economists here. Dan McLaughlin is an extremely qualified economist with one of Ireland's leading banks. I imagine that the Bank of Ireland would employ similarily talented financiers, analysts and modellers to draw up the reports that they produce. Unless I see evidence to the contrary, they generally get things right. However, daft.ie's very own Chief Economist; Ronan Lyons (a student who has only just completed his MSc in economics) runs a one man effort using only the asking prices of daft.ie properties; lo and behold, we have the barstoolers here proclaiming the jig is up! Property crash imminent!


Uhem, just so as we're clear, I don't see the game as being up just yet. But I do think that the players are irrational. There is a slight difference, whether you like it or not. 

That's one point. 

Second point is BOI are not an unbiased party. They are, like most/all of the banks in this country drawing great profits out of mortgage interest. Once the property market begins to slow up, then the year on year growth is likely to slow up as well, even allowing for interest rate rises. As such, while I wouldn't necessarily disbelieve what Dan McLaughlin has to say, I would still consider it within the remit of the following 1) other economists 2) ongoing house price data reports which are interestingly not singing from the same hymnsheets 3) some anecdotal evidence and 4) other related business news which may have a knock on effect. 

"Unless I see evidence to the contrary, they generally get things right."
this sounds like an article of faith to be honest with you. 

The voices saying that the property market is heading for a, uhem, correction, are starting to get louder. The Independent is even starting to change its tune a little, although that's probably a business move on their part. In other words, the atmosphere and sentiment in the housing market has, pretty much definitely, changed. The economists can quote all the figures they want, but figures do not equal sentiment, and sentiment is what is being discussed here. 

What I would like to see these much vaunted banking economists come out with are projected figures on;

1) the impact of a soft landing in housing/construction on the wider economy. 
2) the impact of a major correction on the wider economy
3) the impact on the housing market of the exit from the Irish economy of either Dell or Intel. 

Banks are in the business of making money. That is why we have so much consumer debt in this country. It is not in the long term interest of the economy however, but it is in the long term interest of the banks provided that the debt can be serviced. As such, I see that the interests of the BOI diverge from the wider interests of the country, and therefore, the views of its highly paid economists must be seen in that context. 

As for the guy from DAFT - well he runs a pretty decent business there. As to whether he's right or not - I have some doubts but that's not because I think that the softlanding has arrived. It's because I have some doubts that there will be a soft landing, based purely on the fact that we are unlikely to see salary inflation of a level required to rebalance the house price/salary ratio which is currently not all that sensible, seeing as it varies between 9:1 and 12:1 depending on what set of figures you use. A more rational level would be around 6:1 and preferentially 4:1 but i guess that's too much to ask for at this stage.


----------



## walk2dewater

Howitzer said:
			
		

> http://news.bbc.co.uk/2/hi/business/5241974.stm
> 
> That's quite big news as it wasn't really an expected move and has been made to combat inflation. Stand up to the plate W2DW or are you loading up the truck with bullion as we speak?


 
This is absolutely HUGE news.  I will have to digest this!  Maybe 9/10 of analysts might have got this wrong...

[As for my gold position, last Friday and last Monday were big buying days for me-- increased my exposure by 4.7 percentage points... further discussion on the gold thread later...]


----------



## rgfuller

macbri said:
			
		

> I can never understand this and would be happy renting 4 the rest of my life(gives me flexibility,choice and less financial pressure)


 
But if you retire (i.e. stop working for income) at 65(or70) and don't own a house you'll be paying rent from pension/savings possibly for the next 30+ years, whereas if you own a house (in full) you don't have this old age cost.


----------



## Glenbhoy

CelloPoint said:
			
		

> I'm laughing at the comparison of Dublin with Vienna, Rotterdam, Helsinki, Copenhagen. A population comparison is certainly valid, but in terms of cultural sophistication and taste we are still muck-savages (just take a look at Dublin, Galway, Cork on a typical Saturday night and you'll get a flavour for the kind of 'culture' of the _neuve riche_).
> Dublin is a hell of a long way from Vienna, Rotterdam, Helsinki, Copenhagen, Sydney, Melbourne - and that's just culture; don't get me started on infrastructure, economic governance and public accountability...


The grass is always greener eh?  As I stated earlier - why do you stay??  I have no problem with your overall analysis on the irish housing, i agree, it's overvalued, but your constant denigration of irish society and your elitist attitude becomes a little grating after a while.


----------



## autumnleaf

liteweight said:
			
		

> As suggested, I think by Brendan, in another post. Which risk are people willing to take..the fact that house prices will drop and you'll be able to buy cheaply, or will they stay level and even rise?
> 
> To my mind I'd buy because if a FTB is stretched now, and prices continue to rise, then all hope of buying is gone. Most people do not buy their first home with a view to investment..they buy it to live and raise a family in. Therefore, they are talking about staying put for 5 yrs. or more. Who knows what will happen in the market during that time?


 
From what I can gather, the general advice from these boards is to buy if (a) you have found a place you are prepared to live in for the next 5 years at least and (b) if you can comfortably afford the payments. But not to buy just to “get on the ladder”. (Am I reading the sentiment right?)




			
				macbri said:
			
		

> Presumably its' so called 'generation Y' people born between 1978 to 1994.
> 
> They recently published a study in Australia which concluded that this generation only wants instant satisfaction not long term values/commitment.


 
And how does this make them different from young people of any other generation? It’s the Gen-Xers – you know, the slackers who sang along when Kurt Cobain said he hated himself and wanted to die – who are fuelling the current FTB panic. As well as those “rock-n-roll kids” who used to worry their parents with those crazy Beatles haircuts, and who are now buying up second and third properties as a pension investment.


----------



## walk2dewater

rgfuller said:
			
		

> But if you retire (i.e. stop working for income) at 65(or70) and don't own a house you'll be paying rent from pension/savings possibly for the next 30+ years, whereas if you own a house (in full) you don't have this old age cost.


 
Correct.

But does it matter whether you own a house if you've got several million in say, Canadian or Swiss bonds?


----------



## whathome

gearoidmm said:
			
		

> The Daft report is interesting. I've long wondered what the lag is between the prices you see advertised and the ESRI/PermanentTSB figures. Looking at the ESRi figures for last year, house price inflation really started to take off again in October/November while in the DAFT report, it began in August. This suggests that any slowdown won't appear in the ESRI figures for another 2 months at least (and would explain the apparent contradiction that prices are powering ahead in one index while they are flat in the other).
> 
> 5% drop in the last four months..


 
I've often wondered about the lag.  

The ESRI/PTSB report is based on mortgages drawn down when final contracts are signed.  This means that there is approx 10 week lag on sale agreed prices.  Add another month for report preparation and you have data that is three to four months old at the time of release.

We all know the market was crazy in March which is when figures in the latest report would represent sale agreed prices - but it has since slowed considerably.

Much of the Bank of Ireland quarterly property review is based on ESRI/PTSB and Department of Environment figures which would explain why it also lags the real market.  The DoE index is also based on loans paid, and involves a time lag from when contracts are signed.  

As the daft report is based on asking prices, it is more representative of sentiment in my view.


----------



## macbri

The main difference between generation X & Y is that X were lucky to see very low house prices.I'm a generation X and bought my house in 93 price 50k punt(5 bedroom house in Dundalk)

Generation Y have no interest in house buying(there only interested in lifestyle and instant hits)
Generation X at same age were more prudent(savers) and had longer term goals.
That was the conclusion of the study in Australia

Maybe Ireland is different?


----------



## macbri

On paying rent when your in old age-why would u live in poverty.

78% of German households rent and we don't hear scare stories about these pensioners living in poverty.

As well if u put the savings from renting over paying a mortgage,u should have a very nice nest egg when u reach retirement age.

I'm currently putting $30k pre tax into my pension pa-this will leave me with a very nice nest egg at 60 where I will have the option of buying house outright(or getting an indexed linked pension which I plan to do)

Theres' so much fear out there of missing out on the property ladder,reminds me of the dot com bubble


----------



## phoenix_n

macbri said:
			
		

> The main difference between generation X & Y is that X were lucky to see very low house prices.I'm a generation X and bought my house in 93 price 50k punt(5 bedroom house in Dundalk)
> 
> Generation Y have no interest in house buying(there only interested in lifestyle and instant hits)
> Generation X at same age were more prudent(savers) and had longer term goals.
> That was the conclusion of the study in Australia
> 
> Maybe Ireland is different?


 
The effect of the housing boom in Ireland is that people are more impressed by someone who owns a couple of investment properties and surfed the property boom rather than somone who spent a year in a 3rd world country helping the poor. I believe Gen Y will realise which is more important.


----------



## mollser

Howitzer said:
			
		

> http://news.bbc.co.uk/2/hi/business/5241974.stm
> 
> That's quite big news as it wasn't really an expected move and has been made to combat inflation.



Correct me if I'm wrong, but isn't inflation at the moment being caused primarily by rising energy costs, rather than consumer demand (europe wide, not Ireland!), which feeds into the price of goods.  

By increasing interest rates, does this not also cause inflationary pressures as the cost of borrowings increase (for business and consumers), which also feeds into the price of goods?

Surely the increases in energy pricing should act as a measure in itself to temper consumer demands.  It sounds to me by increasing interest rates will only serve to fuel costs, thereby increasing inflation??


----------



## redo

mollser said:
			
		

> Correct me if I'm wrong, but isn't inflation at the moment being caused primarily by rising energy costs, rather than consumer demand (europe wide, not Ireland!), which feeds into the price of goods.
> 
> By increasing interest rates, does this not also cause inflationary pressures as the cost of borrowings increase (for business and consumers), which also feeds into the price of goods?
> 
> Surely the increases in energy pricing should act as a measure in itself to temper consumer demands.  It sounds to me by increasing interest rates will only serve to fuel costs, thereby increasing inflation??


It makes credit dearer


----------



## thewatcher

The whine line now on rte1 radio,the housing market being discussed


----------



## macbri

The idea of interest rates increase is that it reduces consumer spending power,hence reducing demand and by default reducing prices(price is determined by demand and supply,if supply is constant and demand is reduced then in theory price should be reduced)



Generally if firms have higher input costs(fuel,heat etc) they will need to reduce labour to remain competitive-consumer will not pay higher costs due to less spending power re rise in interest rates

Thats' the theory but it will be interesting to see what happens in the future.


----------



## CelloPoint

macbri said:
			
		

> The main difference between generation X & Y is that X were lucky to see very low house prices.I'm a generation X and bought my house in 93 price 50k punt(5 bedroom house in Dundalk)
> 
> Generation Y have no interest in house buying(there only interested in lifestyle and instant hits)
> Generation X at same age were more prudent(savers) and had longer term goals.
> That was the conclusion of the study in Australia
> 
> Maybe Ireland is different?



Many young Irish people are living in complete fantasy land. They have never known bad economic times, let alone prudent economic times. The sooner this whole consumerist 'lifestyle choice' culture of fancy clothes, fancy car, latest nightclub, plasma TV, credit card, load consolidation wears off the better. The whole 'keeping up with the Smurfits' mentality is absolutely insane. Just take a trip to Dundrum/Liffey Valley/Newbridge shopping centres and you'll see what I'm talking about - I'd say half the people there are buying into a fantasy-land based on borrowed money and equity release.

Mind you some wealthy people do like to splash out on the latest consumer goods which is fair enough (despite the bad taste), but the indebted generics who queue up to hand over their meagre salaries to Visa or MasterCard are just downright pityful.

People will only learn the hard way that in order to build a sustainable and social-friendly economy, there must be conservative governence, prudent economic planning, responsible citizens who save regularly and a willingness to work hard at something they really believe in so as to stand shoulder to shoulder with our international counterparts rather than rely on their low-cost credit and foreign investment.


----------



## ivuernis

whathome said:
			
		

> Interestingly, house prices dropped in 2001 despite interest rates coming down three times (total rate drop 1.25%) that year.


Price didn't drop exactly, the rate of growth just tailed off in 2001 to about 4% from the prev year's growth of 20%. 

Also, the rates in 2001 didn't start dropping until May of that year and considering they had risen from 3% at the start of 2000 to 4.75% by the end of 2000 the drop in growth in 2001 could be seen as a delayed reaction to those rate rises.


----------



## room305

macbri said:
			
		

> The idea of interest rates increase is that it reduces consumer spending power,hence reducing demand and by default reducing prices(price is determined by demand and supply,if supply is constant and demand is reduced then in theory price should be reduced)


The size of the money supply is important as well, if demand/supply from consumer was the only issue then there would be no fear of stagflation. Money supply has exploded in Ireland due to cheap credit. In fact money supply is rising faster than even house prices. This money has to find a home, hence it pushes up the price of goods and services. 

Increasing the cost of borrowing slows the growth of money supply but it is questionable if it can do it fast enough and suck up enough of the existing money in circulation to really combat inflation. To do so might tip the Eurozone economy into a recession. Worse still inflation may still be rampant. Hello, stagflation.


----------



## phoenix_n

thewatcher said:
			
		

> The whine line now on rte1 radio,the housing market being discussed


 
Is the sentiment bullish or bearish.

Someone could phone in and mention this thread. That'd surely get it to hit the 100,000 mark.


----------



## whathome

ivuernis said:
			
		

> Price didn't drop exactly, the rate of growth just tailed off in 2001 to about 4% from the prev year's growth of 20%.
> 
> Also, the rates in 2001 didn't start dropping until May of that year and considering they had risen from 3% at the start of 2000 to 4.75% by the end of 2000 the drop in growth in 2001 could be seen as a delayed reaction to those rate rises.


 
House prices dropped for sure in 2001 for several months running:
Feb 2002: http://www.rte.ie/business/2002/0207/houses.html
Clearly shows a drop in December 2001.

Edit: Well not so clearly as the truth was hidden by the misleading headline!


----------



## Guest107

ivuernis said:
			
		

> Price didn't drop exactly, the rate of growth just tailed off in 2001 to about 4% from the prev year's growth of 20%.
> 
> Also, the rates in 2001 didn't start dropping until May of that year and considering they had risen from 3% at the start of 2000 to 4.75% by the end of 2000 the drop in growth in 2001 could be seen as a delayed reaction to those rate rises.


Yes but Germany France and Italy (for whom the ECB rates are set not for us) were in recession then, thats why rates were coming down EVEN before 911 when the emergency 2% rate kicked in.

The emergency post 911 rate stabilised those economies but caused some peripheral ECB zone economies like Ireland and Spain to go spastic ....for want of a better description...as they were slooshed by a wave of cheap money which overinflated their housing markets . 

A rate cut cycle is some way off at present and a prudent person would have to plan for a plateau of 6% mortgage rates meaning base around 5%  Base is 3% from today.  

Ultimately I belive that the gen X er who bought a house in the 1990s and had a repayment mortgage will not go negative , thast assuming they have not entered the rental market post 911 as well.

As for the Y type interest only 40 year mortgage type  person out the Back of Ballivor......God help the poor fools


----------



## Duplex

ivuernis said:
			
		

> Price didn't drop exactly, the rate of growth just tailed off in 2001 to about 4% from the prev year's growth of 20%.
> 
> Also, the rates in 2001 didn't start dropping until May of that year and considering they had risen from 3% at the start of 2000 to 4.75% by the end of 2000 the drop in growth in 2001 could be seen as a delayed reaction to those rate rises.


 
*Housing Loan Approvals (CSO)

*2000 80,858
2001 69,062
2002 93,136
2003 97,888
2004 104,305
2005 120,637

The 2001 'reversal' in the market has to be seen in the context of lower house prices relative to incomes, lower private sector consumer debt, higher rental yields (in 2001) and 300,000 fewer homes than presently exist.  The ECB will not be cutting interest rates in the foreseeable future.


----------



## OilKing

Howitzer said:
			
		

> Your analysis of the UK market reaction to interest rates is incorrect. It did indeed take rates to go over 4% in the UK to put the skids on property price increases but the starting point was 3.5%. Rates went from a bottom of 3.5% in Nov 03 to a peak of 4.75% in Aug 04. This was only a 1.25% increase and as relative measure was only a 30% increase in interest rates.
> 
> http://news.bbc.co.uk/2/hi/business/5240770.stm
> 
> By the end of today we'll have gone from 2% in Nov 05 to 3% in Aug 06. A 1% increase or 33% increase in interest rates.


 


Both of you are wrong. 

A rise from 3.5% - 4.75% is a relative increase of 35.7%.

An interest rate rise from 2% - 3% is a relative increase of *50%*, not 33%.


----------



## Howitzer

OilKing said:
			
		

> Both of you are wrong.
> 
> A rise from 3.5% - 4.75% is a relative increase of 35.7%.
> 
> An interest rate rise from 2% - 3% is a relative increase of *50%*, not 33%.


 
Well spotted, poor mental arithmetic. The correct numbers was the main thing for me.


----------



## ivuernis

whathome said:
			
		

> House prices dropped for sure in 2001 for several months running:
> Feb 2002: http://www.rte.ie/business/2002/0207/houses.html
> Clearly shows a drop in December 2001.
> 
> Edit: Well not so clearly as the truth was hidden by the misleading headline!


 
Ok, drop in Dec is agreed but over the course of the year prices were still up.


----------



## Afuera

Duplex said:
			
		

> *Housing Loan Approvals (CSO)
> 
> *2000 80,858
> 2001 69,062
> 2002 93,136
> 2003 97,888
> 2004 104,305
> 2005 120,637



Since there were 86,000 or so new properties built in 2005, would that mean that the size of the second hand market in Ireland was only about 34,000 units in 2005?
Surely that can't be right?

Claims from some real estate agents about 40% of new builds being bought by investors would suggest that around 35,000 units were bought by them in the same period. If all of those investors dumped their properties on the market it would effectively double the supply of second hand homes!

Someone tell me I'm wrong here, please.


----------



## CelloPoint

macbri said:
			
		

> On paying rent when your in old age-why would u live in poverty.
> 
> 78% of German households rent and we don't hear scare stories about these pensioners living in poverty.
> 
> As well if u put the savings from renting over paying a mortgage,u should have a very nice nest egg when u reach retirement age.
> 
> I'm currently putting $30k pre tax into my pension pa-this will leave me with a very nice nest egg at 60 where I will have the option of buying house outright(or getting an indexed linked pension which I plan to do)
> 
> Theres' so much fear out there of missing out on the property ladder,reminds me of the dot com bubble



Exactly. And if you had a 40 year mortgage, what's the difference? You'll be paying well into retirement anyway.


----------



## ivuernis

2Pack said:
			
		

> Yes but Germany France and Italy (for whom the ECB rates are set not for us) were in recession then, thats why rates were coming down EVEN before 911 when the emergency 2% rate kicked in.


 
I know the reasons why rates dropped then, I was just replying to someone who said prices had dropped in Ireland in 2001 even though rates dropped and while it's true there was a small drop in late 2001 year-on-year prices were still up on 2001. Previously in 2000 rates had risen before they began to fall again which surely had some time-lag effect on prices in late 2001 alongside the general world economy post-dot-com sentiment. 



			
				2Pack said:
			
		

> A rate cut cycle is some way off at present and a prudent person would have to plan for a plateau of 6% mortgage rates meaning base around 5% Base is 3% from today.


 
I don't see a rate cut cycle coming anytime soon either baring some unforeseen(s) event forcing a cute.


----------



## whathome

ivuernis said:
			
		

> Ok, drop in Dec is agreed but over the course of the year prices were still up.


 
December was the fourth consecutive monthly drop in house prices in 2001.

I agree with Duplex, the factors which saved the market in early 2002 no longer exist:

- government reversed the Bacon anti-investment measures
- rental yields were much higher
- prices were far lower relative to income
- supply was much lower

None of these apply any more, the situation is far more dangerous now.


----------



## CelloPoint

whathome said:
			
		

> December was the fourth consecutive monthly drop in house prices in 2001.
> 
> I agree with Duplex, the factors which saved the market in early 2002 no longer exist:
> 
> - government reversed the Bacon anti-investment measures
> - rental yields were much higher
> - prices were far lower relative to income
> - supply was much lower
> 
> None of these apply any more, the situation is far more *dangerous* now.



I agree with your use of the word 'dangerous'. It's a strong word, but I believe the market deserves such a word because it is just that, dangerous. There are far lower risk, guaranteed investment options out there for any even mildly intelligent investor. In my opinion, this very fact (coupled with an emergence of fear) will be the instigating factor in the mass selling of so-called 'investment' properties.


----------



## dontaskme

mollser said:
			
		

> Correct me if I'm wrong, but isn't inflation at the moment being caused primarily by rising energy costs, rather than consumer demand (europe wide, not Ireland!), which feeds into the price of goods.


There will be a 3% increase from 16% to 19% in VAT in Germany in 2007 and I reckon some of this increase is being front loaded now so that producers/service providers won´t have to bump prices up 3% on 1 Jan.


----------



## ivuernis

whathome said:
			
		

> I agree with Duplex, the factors which saved the market in early 2002 no longer exist:
> - government reversed the Bacon anti-investment measures
> - rental yields were much higher
> - prices were far lower relative to income
> - supply was much lower
> None of these apply any more, the situation is far more dangerous now.


I totally agree.


----------



## Duplex

Afuera said:
			
		

> Since there were 86,000 or so new properties built in 2005, would that mean that the size of the second hand market in Ireland was only about 34,000 units in 2005?
> Surely that can't be right?
> 
> Claims from some real estate agents about 40% of new builds being bought by investors would suggest that around 35,000 units were bought by them in the same period. If all of those investors dumped their properties on the market it would effectively double the supply of second hand homes!
> 
> Someone tell me I'm wrong here, please.


 
There is a 'lot' of silly money flying about the Irish market at present. If you consider that each of these new properties was worth say €250,000 that amounts to €21 billion looking for a home or twelve.


----------



## liteweight

walk2dewater said:
			
		

> "Prices go up in the long term", "rent is dead money", "safe as houses", "can't raise a family in a rented home", "prices can't crash where will people live", BUY NOW or "all hope of buying is gone"
> 
> What dull, repetitive, un-thinking dogma.



Last time I looked, this was a thread on Current PUBLIC sentiment towards housing market...not walk2dewater's sentiment. I'm entitled to my view just as you are but there's no need IMO to be rude or obnoxious when voicing it!! Perhaps you should open a new thread on this where you can talk to yourself and only take your own replies on board.

As to the other poster who thinks I probably only read the Irish Times Property Supplement, well yes I do..and Business and Finance and numerous others sent to me by my Financial Advisors!

And yes..I do go off to my villa in Spain and didn't manage to acquire any of my properties through dull, repetitive thinking.

In the immortal words of Billy Connolly "Don't pity me....I'm f****** loaded!!!! If I'd listened to the likes of you God knows where I'd be!! As for 'dogma' why not try reading back through your own posts!!!


----------



## redo

liteweight said:
			
		

> Last time I looked, this was a thread on Current PUBLIC sentiment towards housing market...not walk2dewater's sentiment. I'm entitled to my view just as you are but there's no need IMO to be rude or obnoxious when voicing it!! Perhaps you should open a new thread on this where you can talk to yourself and only take your own replies on board.
> 
> As to the other poster who thinks I probably only read the Irish Times Property Supplement, well yes I do..and Business and Finance and numerous others sent to me by my Financial Advisors!
> 
> And yes..I do go off to my villa in Spain and didn't manage to acquire any of my properties through dull, repetitive thinking.
> 
> In the immortal words of Billy Connolly "Don't pity me....I'm f****** loaded!!!! If I'd listened to the likes of you God knows where I'd be!! As for 'dogma' why not try reading back through your own posts!!!



*walk2dewater you have just been b'tch slapped.*


----------



## whathome

liteweight said:
			
		

> I'm entitled to my view just as you are


 
Liteweight - your views are valid and welcome.

Quick question though - is there some point at which you would re-evaluate your investment properties based on profit, yield etc.?

I purchased an investment property in Dec 2001 and am currently selling it. I've seen the price rise to a level that doesn't make sense relative to rental income.  My view is that with rising interest rates, many other investors will take a profit rather than subsidise tenants.  Do you think you would you ever realise a profit and sell?


----------



## room305

liteweight said:
			
		

> In the immortal words of Billy Connolly "Don't pity me....I'm f****** loaded!!!! If I'd listened to the likes of you God knows where I'd be!! As for 'dogma' why not try reading back through your own posts!!!



How much of this wealth is realised and how much is tied up in property? I'd be very nervous if all my equity was tied up in an illiquid market when we're in such an uncertain economic climate.


----------



## CelloPoint

liteweight said:
			
		

> Last time I looked, this was a thread on Current PUBLIC sentiment towards housing market...not walk2dewater's sentiment. I'm entitled to my view just as you are but there's no need IMO to be rude or obnoxious when voicing it!! Perhaps you should open a new thread on this where you can talk to yourself and only take your own replies on board.
> 
> As to the other poster who thinks I probably only read the Irish Times Property Supplement, well yes I do..and Business and Finance and numerous others sent to me by my Financial Advisors!
> 
> And yes..I do go off to my villa in Spain and didn't manage to acquire any of my properties through dull, repetitive thinking.
> 
> In the immortal words of Billy Connolly "Don't pity me....I'm f****** loaded!!!! If I'd listened to the likes of you God knows where I'd be!! As for 'dogma' why not try reading back through your own posts!!!



Hi, thanks for the contribution. Can I just ask you a question - how many of these people queueing up to buy houses for 400k in the back of Balivor do you think will be living in spanish villas in 10 years' time? There's no doubt that anyone who rode the property wave from the mid 90s has made a killing and done very well, but we're living in 2006 now, and I think pretty much everyone in here agrees that you'd be a fool to sign up to a 40 year mortgage and put all your savings into stamp duty for a crappy location property with no services.

If we were to see a thread like this back in 1995 and 'listened to the likes of' us, you'd be right. (Again the mantra, "sure if I listened to you lot, I'd still be renting"). But do you really believe that all these 20 something people living in Co. Meath will be sipping cocktails from their villas? The market has changed massively in 10 years.


----------



## phoenix_n

CelloPoint said:
			
		

> In my opinion, this very fact (coupled with an emergence of fear) will be the instigating factor in the mass selling of so-called 'investment' properties.


 
You are correct with the emergence of fear. (men are motivated by either interest or fear) . But there will not be mass selling of 'investment properties'. 

Why ? Because there will be no-one prepared to buy them.


----------



## whizzbang

phoenix_n said:
			
		

> You are correct with the emergence of fear. (men are motivated by either interest or fear) . But there will not be mass selling of 'investment properties'.
> 
> Why ? Because there will be no-one prepared to buy them.



Exactly, we are not going to see a "Black Monday" where all of a sudden all houses are half price. We will see months and months of hosues not selling and frustrated EAs trying to talk sellers into lowering prices so they can move the houses off their books.


----------



## room305

phoenix_n said:
			
		

> You are correct with the emergence of fear. (men are motivated by either interest or fear) . But there will not be mass selling of 'investment properties'.
> 
> Why ? Because there will be no-one prepared to buy them.



Hit the nail on the head there. I think it is possible that houses won't even drop much in nominal terms. The correction will happen in real terms played out over a decade or so.

The worry for FTBs should not be that they will end up in a negative equity situation but rather that they will simply be unable to find a buyer for their property. Leaving them stuck for a large portion of their lives in a residence they had only ever viewed as a "starter home".


----------



## Calina

Hmm, 

It's interesting when one side of a debate gets defensive, and it looks to me like liteweight, that's what's happening here. The thing is w2dw has very strong views, and at least as the guts to argue them out. I don't agree with everything s/he has to say in general, and I'm not altogether convinced by most of his more recent predictions. It's of secondary important because frankly - whether you like it or not - his analysis is absolutely correct. Your advice to FTBs to buy is based on the sole rationale of "if you don't, you'll get left behind". He could have put it a bit more diplomatically, but frankly, you haven't said anything that no one's heard before. 

This presupposes that possession of a mortgage/property is the be all and end all of financial success. Unfortunately, it's not. Like a lot of wealth, it is impossible to quantify that wealth until you cash it in. One of the most naive things I see on this site on a day to day basis, particularly over on location, location, location is the absolute conviction of people that they are somehow richer because the asking price of their house has gone up. Unfortunately, you're not richer unless you cash it in. Maybe you'll cash in all your chips, and that's fine. You'll be rolling in it. 

You would do well to remember that in a debate about public sentiment in property, that while it is not just w2dw's sentiment that is under discussion, it is not just yours either. Personally I'm interested to see the contributions of people who don't see trouble ahead - particularly as they seem to be as rare as hell on this site - but I'm consistently disappointed by the level of analysis which they bring which has, in recent months been less than indepth. From what I can see, currently, most of it appears to amount to "you've been saying the same things for five years and you were WRONG" which, of course, is no guarantee that that will continue to be the case. 

Ultimately, the value of your investment can go up as well as down. Timing the change, however, is difficult. Realistically speaking, I tire of people discussing how you can't go wrong with property. Property has a very distinct function in providing shelter. Unfortunately, this country doesn't see it as such right now. It's seen as a cash cow get rich scheme. 

This has had a bearing on the types of properties being built many of which have not been built with any sort of long term planning in mind. 

But it doesn't matter though, does it - because if I am to believe you, properties will continue to rise, based on an analysis of "because they did for the last five years". Or that's how it seems.


----------



## CelloPoint

What makes people so sure there won't a mass selling off of properties? An investor who bought, say in 2002 will happily take a hit of 50k off today's market price if he was fearful of the market outlook.

The other factor that you must consider for a mass selling off is that some people with second properties will have no choice but to sell because they won't be able to get tenants to cover the mortgage repayments (obtained with equity from their own home) when there are loads of places for rent and a dwindling immigrant population.

As always, those properties in badly serviced areas will be hit hardest.


----------



## CelloPoint

room305 said:
			
		

> Hit the nail on the head there. I think it is possible that houses won't even drop much in nominal terms. The correction will happen in real terms played out over a decade or so.


What makes people so sure there won't a mass selling off of properties? An investor who bought, say in 2002 will happily take a hit of 50k off today's market price if he was fearful of the market outlook.

The other factor that you must consider for a mass selling off is that some people with second properties will have no choice but to sell because they won't be able to get tenants to cover the mortgage repayments (obtained with equity from their own home) when there are loads of places for rent and a dwindling immigrant population.

As always, those properties in badly serviced areas will be hit hardest.


----------



## room305

CelloPoint said:
			
		

> What makes people so sure there won't a mass selling off of properties?



You can't sell if nobody is buying.


----------



## phoenix_n

whizzbang said:
			
		

> Exactly, we are not going to see a "Black Monday" where all of a sudden all houses are half price. We will see months and months of hosues not selling and frustrated EAs trying to talk sellers into lowering prices so they can move the houses off their books.


 
Prices will fall but with interest replaced by fear there will be no takers. Those that can't service their debt or those who want to cash it on some of the equity gained over the years will drop their prices the most.

But no-one is going to take the risk that what they think could be the bottom of the market is in fact.....only a crevice.

(IMO)


----------



## Guest107

CelloPoint said:
			
		

> how many of these people queueing up to buy houses for 400k in the back of Balivor do you think will be living in spanish villas in 10 years' time?


Not a single one , them Back Of Ballivor people will have missed the opportunity that others who bought earlier had  to leverage that FTB to get a decent STB near where they wanted to live before prices sent them off to buy at the Back of Ballivor.

In every pyramid there must be a wider base than each of the next rungs . Those bottom rungers will be shafted as always while those who got in early will be fine.

In a few years we will all know an eater of a Bitter Pill at the Back of Ballivor  along with a slew of other marooned by negative equity in former outer commuter belts . They can move if they wish but they will have to bank a loss. Transport economics will prevent those outer commuter belts from recovering , ever again.


----------



## liteweight

whathome said:
			
		

> Liteweight  - is there some point at which you would re-evaluate your investment properties based on profit, yield etc.?
> 
> I purchased an investment property in Dec 2001 and am currently selling it. I've seen the price rise to a level that doesn't make sense relative to rental income.  My view is that with rising interest rates, many other investors will take a profit rather than subsidise tenants.  Do you think you would you ever realise a profit and sell?



At the moment I am in the lucky position that rental from investment properties cover all expenses plus the mortgage on my PPR. Of course I re-evaluate our situation constantly. 

We recently sold our interests in commercial property and although it might not seem logical to some, the reason I did this was that I began to see more and more brand new offices left standing empty. Upon researching this, I found that, builders who include commercial units in apartment blocks do not have to allocate any units to affordable/social housing. It's a get out clause for them. (This was correct at the time I sold anyway). It led me to believe that commercial property was not being built due to demand but for other reason mentioned.  We also wanted to diversify as I don't like having all my eggs in one basket. To cut a long story short, we also wanted to release some capital to buy the famous villa in Spain, which we will rent for part of the year, but because of current situation there, we don't want to have to rely on the rental. It's a lifestyle choice really.

So yes, I would re-evaluate my position if,  the  property concerned was worth so  much that  rental yield was less  than I could get  on investment of the profit from selling and if I felt that the area in which the property was located had hit its ceiling. Otherwise I'd hold on. At the moment I can hold onto properties without too much sweat even if rents go down. I bought with a view to the long term and so far its worked out well.


----------



## CelloPoint

room305 said:
			
		

> You can't sell if nobody is buying.



And so the adage 'you're not richer unless you cash it in' stares middle-class Ireland in the face. Popular dinner party conversation revolving around the prices of houses in the neighbourhood will meaningless when there isn't a buyer in sight.


----------



## Calina

You can sell if the price is right. Unfortunately, if you've bought a one bed box for 285K you're not going to consider a market valuation of 170K as "right".


----------



## Glenbhoy

CelloPoint said:
			
		

> Hi, thanks for the contribution. Can I just ask you a question - how many of these people queueing up to buy houses for 400k in the back of Balivor do you think will be living in spanish villas in 10 years' time? There's no doubt that anyone who rode the property wave from the mid 90s has made a killing and done very well,


Cello, I think you're making the mistake that everything is and always will be doom and gloom for those who didn't get the opportunity to surf the celtic property wave.  
People amass wealth in a multitude of different ways, property is one facet of wealth accummulation, allbeit one that has worked out well for many buyers of the past 10-15 yrs (beyond their wildest dreams i imagine).
In general, people make money from businesses and successful careers, the couple in Balivor could end up discovering the secret of nuclear fusion, their neighbours could find the oil reserves in the back garden, who knows.......


----------



## DonCorleone

Glenbhoy said:
			
		

> The grass is always greener eh?  As I stated earlier - why do you stay??  I have no problem with your overall analysis on the irish housing, i agree, it's overvalued, but your constant denigration of irish society and your elitist attitude becomes a little grating after a while.


Completely agree. Obvilously from Australia...the 'world greatest country'...blah blah blah.


----------



## phoenix_n

Calina said:
			
		

> You can sell if the price is right. Unfortunately, if you've bought a one bed box for 285K you're not going to consider a market valuation of 170K as "right".


 
The market value was always 170K. It was just the perceived value was 285K.


----------



## whathome

phoenix_n said:
			
		

> But no-one is going to take the risk that what they think could be the bottom of the market is in fact.....only a crevice.


 
I remember an old stuck-up Investment banker being interviewed on Bloomberg TV years ago. He was asked about whether he thought the market had reached a bottom. His reply:

"Well you know what happens when you try feel for a bottom?....
You get smelly fingers."

A crevice might not be so bad!!!


----------



## Glenbhoy

phoenix_n said:
			
		

> The market value was always 170K. It was just the perceived value was 285K.


Surely if the market paid 285K, then the market value was 285K.  Maybe the perceived value in some peoples opinion was 170K, but the market did not agree!!


----------



## CelloPoint

Glenbhoy said:
			
		

> Cello, I think you're making the mistake that everything is and always will be doom and gloom for those who didn't get the opportunity to surf the celtic property wave.
> People amass wealth in a multitude of different ways, property is one facet of wealth accummulation, allbeit one that has worked out well for many buyers of the past 10-15 yrs (beyond their wildest dreams i imagine).
> In general, people make money from businesses and successful careers, the couple in Balivor could end up discovering the secret of nuclear fusion, their neighbours could find the oil reserves in the back garden, who knows.......



Point taken - anyone can make it in life if they work hard and get the right breaks. Let's decouple this issue from my conviction that there is no value in the back of Balivor and that the risk of negative equity from such a purchase is great.
Such people will find it very hard to break free from the noose of debt hanging around their necks, no matter how hard they work. 
You've got to work smart too in this life (as well as work hard), and I don't think buying is the back of Balivor is very smart in 2006.


----------



## Calina

phoenix_n said:
			
		

> The market value was always 170K. It was just the perceived value was 285K.



This is where you're wrong. The market value is the value borne by the market. If people are paying 285K, then that's the market value at a given point in time. But the market value can change. 

I'd see 170K as the actual value. That's a bit different. Additionally, EAs laugh if you say things like that.


----------



## phoenix_n

Glenbhoy said:
			
		

> Surely if the market paid 285K, then the market value was 285K. Maybe the perceived value in some peoples opinion was 170K, but the market did not agree!!


 
Yes i was not being literal in my terms but i was conveying a message.


----------



## room305

CelloPoint said:
			
		

> And so the adage 'you're not richer unless you cash it in' stares middle-class Ireland in the face. Popular dinner party conversation revolving around the prices of houses in the neighbourhood will meaningless when there isn't a buyer in sight.



W2DW has made some good predictions on here so I'm going to try my arm.

As the market slows and rather than prices coming down in any dramatic way, instead you simply see a slow down of buying activity (with accompanying rising inventory as seen in the US). Then it will be a fantastic time to be in home improvement. Because that is what middle-Ireland will shift focus too. How do you sell? Everyone will know of someone who sold a place in an unpopular area because they put down extra decking or redid the bathroom. The merits of spending cash on the kitchen vs. repainting the outside will be discussed. _"... and once he put in the marble tiling on the bathroom floor sure he barely had to come down in price at all, loads of buyers came in. It pays for itself in the end really_ ..." will be what you will be the type of thing you will hear.

Anyway, I may have said it before but I'm saying it again now. Home improvement will be big business during the crash.


----------



## liteweight

room305 said:
			
		

> How much of this wealth is realised and how much is tied up in property? I'd be very nervous if all my equity was tied up in an illiquid market when we're in such an uncertain economic climate.



About 50/50 at mo. I'm not particularly worried about property market falling as we would just hold on to them until we saw a recovery or the children inherited. I agree that it's foolhardy to have all equity tied up in property.


----------



## tiger

CelloPoint said:
			
		

> What makes people so sure there won't a mass selling off of properties? An investor who bought, say in 2002 will happily take a hit of 50k off today's market price if he was fearful of the market outlook.


</p> 
While I do think the market is out of kilter, I'm not expecting a big drop in prices.  What's happening is that with 35 yr 100% mortgages, lending has reached it's limit, and that limit is starting to contract now with ECB rates rising.  On the other hand the economy & employment is relatively strong.  The key for me though is supply, as far as I can tell virtually all new builds are sold off the plans, so there is very little risk for the developers and they can turn off the tap very easily if demand dries up.  Does this happen in any other market?


----------



## room305

liteweight said:
			
		

> About 50/50 at mo. I'm not particularly worried about property market falling as we would just hold on to them until we saw a recovery or the children inherited. I agree that it's foolhardy to have all equity tied up in property.



I'd still consider liquidating more of it but you do seem to be in a better position than many newer buyers (including myself might I add). A recovery could be a long time playing out but it sounds like you are in for the long haul anyway.


----------



## CelloPoint

room305 said:
			
		

> W2DW has made some good predictions on here so I'm going to try my arm.
> 
> As the market slows and rather than prices coming down in any dramatic way, instead you simply see a slow down of buying activity (with accompanying rising inventory as seen in the US). Then it will be a fantastic time to be in home improvement. Because that is what middle-Ireland will shift focus too. How do you sell? Everyone will know of someone who sold a place in an unpopular area because they put down extra decking or redid the bathroom. The merits of spending cash on the kitchen vs. repainting the outside will be discussed. _"... and once he put in the marble tiling on the bathroom floor sure he barely had to come down in price at all, loads of buyers came in. It pays for itself in the end really_ ..." will be what you will be the type of thing you will hear.
> 
> Anyway, I may have said it before but I'm saying it again now. Home improvement will be big business during the crash.



You can't paint your way out of a bad location with crappy public services.

Also, where will all this money for DIY come from when there are no more equity release offers for the get-rich-quick, middle-class lemmings to avail of?

Those investors who bought in 2000 will happier to sell than those who bought the same property in 2005 - so a 100k hit to the 2000 investor is nothing compared to a 100k hit for a 2005 investor. So the argument that property is 'sticky on the way down', does not apply afaik (especially in the context of investment properties, family properties are a little bit sticky for obvious reasons).


----------



## room305

CelloPoint said:
			
		

> You can't paint your way out of a bad location with crappy public services.



It doesn't matter whether you can or not, just that people will think you can. They will take the house off the market, put it back on the market a few months later. Maybe fire their REA, do up the garden, put up a fence. Anything is better than doing nothing.

Initially at least. After a while they give up and that's when houses start to get run down and dilapidated looking - making them harder again to sell.



			
				CelloPoint said:
			
		

> Also, where will all this money for DIY come from when there are no more equity release offers for the get-rich-quick, middle-class lemmings to avail of?



They may still have plenty of equity to release in their PPR. Credit cards, credit unions are also an option. They'll get the money from somewhere, there's plenty of it still sloshing about.



			
				CelloPoint said:
			
		

> Those investors who bought in 2000 will happier to sell than those who bought the same property in 2005 - so a 100k hit to the 2000 investor is nothing compared to a 100k hit for a 2005 investor. So the argument that property is 'sticky on the way down', does not apply afaik (especially in the context of investment properties, family properties are a little bit sticky for obvious reasons).



Property is sticky on the way down, as people are very reluctant to come down in price. Regardless of what they paid for the house.


----------



## whizzbang

tiger said:
			
		

> </p> The key for me though is supply, as far as I can tell virtually all new builds are sold off the plans, so there is very little risk for the developers and they can turn off the tap very easily if demand dries up.  Does this happen in any other market?



Don't the developers only get the deposit? with the rest paid on completion? This would mean the developers are at risk from people who paid a deposit just walking away if the property is now worth less than they paid for it?


----------



## whathome

Interesting BBC reader-comments feedback on the UK rate rise today:
[broken link removed]

I wonder what the general response on an RTE equivalent would be?


----------



## CelloPoint

room305 said:
			
		

> Property is sticky on the way down, as people are very reluctant to come down in price. Regardless of what they paid for the house.



The amatuer investor believes this to be the case. But for the more astute investor, he'll recognise a road to nowhere and bail out regardless. The psychology of selling an asset for less than you bought it does not factor in to the cold, hard truth of the market price. As usual the gullible amatuers will be the ones who hold on, only to be left with an even worse situation.


----------



## Guest107

whathome said:
			
		

> I wonder what the general response on an RTE equivalent would be?



that the ladder has become slippy and icky and is breaking their fingernails as they climb and YEW   K


----------



## liteweight

CelloPoint said:
			
		

> - how many of these people queueing up to buy houses for 400k in the back of Balivor do you think will be living in spanish villas in 10 years' timI


I have no idea, it really depends on what they do in the interim.



			
				CelloPoint said:
			
		

> There's no doubt that anyone who rode the property wave from the mid 90s has made a killing and done very well, but we're living in 2006 now,


I started riding the wave in 2001 and have indeed made a 'killing' even though its only 2006. Really depends on what you did with the wealth![/quote]




			
				CelloPoint said:
			
		

> and I think pretty much everyone in here agrees that you'd be a fool to sign up to a 40 year mortgage and put all your savings into stamp duty for a crappy location property with no services.



It depends on what you want. I agree about the crappy location with no services but I don't imagine anyone sets out to buy something like that. FTB don't pay stamp duty on new homes below 1250sq. ft. or on secondhand homes up to a price of approx 317k. As for tying themselves into the mortgage it depends on what you want. Not everyone sees a home as an investment, even though its probably the biggest investment they'll ever make!  I think it is exactly the type of dinner conversations where house prices are discussed which is changing the perception of what your first HOME should be. Nowadays, people seem to want it to be 'all things to all men' e.g. good location, spacious, rising in value every month. My first house was a 20 minute drive from Dublin (in traffic) and everybody thought it was the back of beyonds at the time. Nothings changed except the distance. However, distance does count as it interferes with quality of everyday life.



			
				CelloPoint said:
			
		

> If we were to see a thread like this back in 1995 and 'listened to the likes of' us, you'd be right. (Again the mantra, "sure if I listened to you lot, I'd still be renting"). But do you really believe that all these 20 something people living in Co. Meath will be sipping cocktails from their villas? The market has changed massively in 10 years.



I may not believe they'll be sipping cocktails in their villas but I'd bet a good many of them will be living closer to where they want to be. In general, i believe that corrections in the market will affect the outlying satellite towns long before it affects the cities. If you imagine that most people who made a killing only did so in the 90s you'd be wrong. IMO those who bought as late as 2004 are still making a good profit and prices would have to drop a long way before they made a loss.


----------



## room305

CelloPoint said:
			
		

> The amatuer investor believes this to be the case. But for the more astute investor, he'll recognise a road to nowhere and bail out regardless.



In 2006 which is a bigger proportion of the BTL market place - astute investors or amateur gamblers?

The people panicking will be flippers and developers who have just had buyers walk out on off-plan deposits. Both of those will can come down significantly but will still struggle to attract buyers.

I'm inclined to think that most landlord's (say who became landlord's pre-2001) will hang-on, either because they view as a long-term investment/pension or because they don't want to come down in price.

Anyway, it doesn't matter how much they come down in price they will still struggle to sell.


----------



## walk2dewater

liteweight said:
			
		

> And yes..I do go off to my villa in Spain and didn't manage to acquire any of my properties through dull, repetitive thinking.


 
Sounds like you were lucky, right time, right place. Unlike the current crop of FTBs who are subsidising the early retirement lifestyles of their elders via the property pyramid.



			
				liteweight said:
			
		

> In the immortal words of Billy Connolly "Don't pity me....I'm f****** loaded!!!! If I'd listened to the likes of you God knows where I'd be!! As for 'dogma' why not try reading back through your own posts!!!


 
Prattling out tired old substitute-for-thinking-cliches is dogma, no matter what pulpit it comes from, no matter how many times its repeated by you, the real estate economist or anyone else.


----------



## Guest126

Yea I am loaded too  (says he pretending to live in a 5 bed detached luxury house in Cork city, and owning 3 villas...one in Spain, one in France and one in, oh let me see, how about Florida) - Ah the beauty of the internet now you all believe me I am sure!!


----------



## Duplex

Its worth remembering that this rate tightening cycle is a global phenomenon.  The worlds central banks are taking away the punch bowl just as the party gets into full swing, hardly unprecedented however.
So whatever happens to sentiment in the Irish housing market it will happen against the backdrop of a slowing/contracting global economy.


----------



## whathome

tiger said:
			
		

> there is very little risk for the developers and they can turn off the tap


 
In Jean-Claude Trichet speak:  "Withdrawal of accommodation accommodation"

What will happen to the armies of construction workers that are currently employed building vacant property when the tap gets turned off?


----------



## sonar

Duplex said:
			
		

> Its worth remembering that this rate tightening cycle is a global phenomenon. The worlds central banks are taking away the punch bowl just as the party gets into full swing, hardly unprecedented however.
> So whatever happens to sentiment in the Irish housing market it will happen against the backdrop of a slowing/contracting global economy.


 
_Today_ alone we've had interest rate hikes from

The Danish National Bank
Bank of Slovenia 
South African Reserve Bank
Bank Of England
and last but by no means least the ECB.


----------



## bogwarrior

sonar said:
			
		

> _Today_ alone we've had interest rate hikes from
> 
> The Danish National Bank
> Bank of Slovenia
> South African Reserve Bank
> Bank Of England
> and last but by no means least the ECB.



...and yesterday from the Reserve Bank of Australia.


----------



## walk2dewater

But will they lose their nerve when all this hiking threatens recession? THAT is the real question... stagflation may be the muddle through scenario that appeals the most... rates set just perfectly so as to stem inflation, but not cause a whooping recession... can it be pulled off?

Either way asset bubbles everywhere (consumer, tech stocks and property) are going to get pole-axed from both sides...


----------



## Duplex

walk2dewater said:
			
		

> But will they lose their nerve when all this hiking threatens recession? THAT is the real question... stagflation may be the muddle through scenario that appeals the most... rates set just perfectly so as to stem inflation, but not cause a whooping recession... can it be pulled off?
> 
> Either way asset bubbles everywhere (consumer, tech stocks and property) are going to get pole-axed from both sides...


 
Rates fall in recessions I guess.  But the bubble economies (Ireland, Spain, UK, US, Australia) problems are structural and the bad money needs to be flushed from the system.


----------



## gidxl03

Too many bears on this thread for a fair balanced argument!

Some more bullish thoughts on why the sky is unlikely to fall down just yet;
[1] Investors who want to realise their profit are interested in their nett return. If when they buy high, even if the price drops in the mean time, it will eventually recover. Therefore, by buying high, they are ensuring that they pay less Capital Gains Tax when they do eventually sell. The current CGT rate is 20%. It may return to 40% when times get hard. The CGT factor should not be dismissed lightly.

[2] Where to invest the money after selling? With peak oil arriving any time soon, the general stock market may be hit hard as economies stop expanding and start to shrink instead. Gold may will be a good bet, but how many people will be willing to buy 100K's of it?

[3] See the plateau (soft landing) of house prices in the UK during the last 12 months. http://www.housepricecrash.co.uk It can happen!


----------



## whathome

gidxl03 said:
			
		

> Too many bears on this thread for a fair balanced argument!
> 
> Some more bullish thoughts on why the sky is unlikely to fall down just yet;
> [1] Investors who want to realise their profit are interested in their nett return. If when they buy high, even if the price drops in the mean time, it will eventually recover. Therefore, by buying high, they are ensuring that they pay less Capital Gains Tax when they do eventually sell. The current CGT rate is 20%. It may return to 40% when times get hard. The CGT factor should not be dismissed lightly.
> 
> [2] Where to invest the money after selling? With peak oil arriving any time soon, the general stock market may be hit hard as economies stop expanding and start to shrink instead. Gold may will be a good bet, but how many people will be willing to buy 100K's of it?
> 
> [3] See the plateau (soft landing) of house prices in the UK during the last 12 months. http://www.housepricecrash.co.uk It can happen!


 
I think this answers the question "what is *smart* money doing?" ...
It's NOT buying Irish property!


----------



## bearishbull

gidxl03 said:
			
		

> [3] See the plateau (soft landing) of house prices in the UK during the last 12 months. http://www.housepricecrash.co.uk It can happen!


 
After todays rate rise in uk and another by xmas i think prices may well be heading lower in next year or two. once theres a few quarters of price falls a negative cycle of bearish sentiment gets established and is very difficult to counter.


----------



## gidxl03

So 'whathome', say I have 600K to invest after selling property bought in 1996. What do you suggest I do with this cash to protect it from inflation?

WHAT IF for example the US solves its debt problem by creating trillions of FIAT dollars (thereby devaluing China's foreign exchange of 1 trillion USD)and our friends at the ECB want to keep the euro pegged with the dollar. ECB will need to reduce interest rates and so property will continue to rise sharply while my 600K in a Bond is worth less and less every day (and the government tax it!).


----------



## whathome

gidxl03 said:
			
		

> Therefore, by buying high, they are ensuring that they pay less Capital Gains Tax when they do eventually sell.


 
From the Fr Doughal school of economics.  

Ted: "Why are you setting fire to all your savings from the bank Doughal?"
Doughal: "Ah Ted - I didn't want to pay tax on the interest"


----------



## whathome

gidxl03 said:
			
		

> So 'whathome', say I have 600K to invest after selling property bought in 1996. What do you suggest I do with this cash to protect it from inflation?
> 
> WHAT IF for example the US solves its debt problem by creating trillions of FIAT dollars (thereby devaluing China's foreign exchange of 1 trillion USD)and our friends at the ECB want to keep the euro pegged with the dollar. ECB will need to reduce interest rates and so property will continue to rise sharply while my 600K in a Bond is worth less and less every day (and the government tax it!).


 
That is an excellent question...I certainly wouldn't try to protect it by investing in Irish property.


----------



## gidxl03

'bearishbull' your prediction may of course be true. However Q2 2006 shows a fairly sustainable increase of about 4 to 5% and so small IR increases of 0.5% will not be enough to cause a major upset.
- UK pop is ~15 times ours, but they are building only 2x as many houses
- average HP/Salary is about 8
- very high immigration levels


----------



## gidxl03

'whathome', post 1161 is out of context! The context is: an investor who is thinking about selling: forgoing 50K a year of easy money and 12K in rent to instead pay 1% to an auctioneer, an few K to get house painted & decorated, hassle of selling furniture. And, after having timed the market, buy in again and pay stamp duty of about 7%, more solicitors etc.

And after all that you don't have an answer to what to do with the money. Perhaps now you see the other side of the fence !


----------



## Duplex

gidxlo3

The market sets the value not the seller. As prices are set at the margin the latest comparable sale is the open market value of comparable properties. The energy squeeze will divert resources (money) from non productive fixed assets to productive investments e.g. alternative energy. Its quite true that many people will not sell at the market price, in expectation that prices will rise in the future, however I have yet to read a reasoned argument as to why or how this will support current valuations. 

The UK economy is a basket case with falling productivity, static incomes growth, a rising trade deficit, rising unemployment and rising bankruptcies and debt defaults, I think that they've drunk the debt tap dry.


----------



## bearishbull

gidxl03 said:
			
		

> 'bearishbull' your prediction may of course be true. However Q2 2006 shows a fairly sustainable increase of about 4 to 5% and so small IR increases of 0.5% will not be enough to cause a major upset.
> - UK pop is ~15 times ours, but they are building only 2x as many houses
> - average HP/Salary is about 8
> - very high immigration levels


 
If theres a shortage of housing then why are yields so low relative to interest rates over there? Also prices are ten times average salary 200k:20k , interest rates are much higher there so servicing a mortgage costs more and theres no sign of lower rates any time soon, their unemployment is at 6 year high and rising.the london price rises early in the year distort national figures. todays rate rise may turn public sentiment more bearish.


----------



## liteweight

walk2dewater said:
			
		

> Sounds like you were lucky, right time, right place. Unlike the current crop of FTBs who are subsidising the early retirement lifestyles of their elders via the property pyramid.



Luck had nothing to do with it and the time span is 20 years planning to retire early. I don't know of anyone who could afford to retire early solely based on the price a FTB could afford to pay for the family home (if this is what you're referring to). In my case we have two pensions (one an albatross which we're still trying to get rid of) and a third, if you count the state pension.

When it comes to the PPR, although it is leveraged, this is for a miniscule amount in terms of what it would be valued on the market. However, I have always been of the opinion that a house is only worth what someone is willing to pay for it and would never dream of speculating with the family home.

Not everyone invests for the same reason, some invest with the idea of selling up at retirement and living on the profits. Some keep their properties  so that rental income will give them a wage and yes, some jumped on the bandwagon with the hope of making spectacular gains. Because of this, the outcome will be different for the individual. Even if house prices/rental incomes fall, it won't mean that investors sell wholesale. If that was the case, why haven't they been selling in droves over the last couple of years when rental income has dropped significantly? Capital gain alone, is only worth it if you can afford to pay the mortgage.

I have and always will look after my own retirement and lifestyle and don't believe for one minute that it's at anyone else's expense.


----------



## bearishbull

gidxl03 said:
			
		

> So 'whathome', say I have 600K to invest after selling property bought in 1996. What do you suggest I do with this cash to protect it from inflation?
> 
> WHAT IF for example the US solves its debt problem by creating trillions of FIAT dollars (thereby devaluing China's foreign exchange of 1 trillion USD)and our friends at the ECB want to keep the euro pegged with the dollar. ECB will need to reduce interest rates and so property will continue to rise sharply while my 600K in a Bond is worth less and less every day (and the government tax it!).


 Invest it in well diversified funds , over the long run equities outperform all asset classes, companies will always exist and make profits despite challenges like inflation and "peak oil".


----------



## Duplex

bearishbull said:
			
		

> Invest it in well diversified funds , over the long run equities outperform all asset classes, companies will always exist and make profits despite challenges like inflation and "peak oil".


 
Agree


----------



## whathome

gidxl03 said:
			
		

> 'whathome', post 1161 is out of context! The context is: an investor who is thinking about selling: forgoing 50K a year of easy money and 12K in rent to instead pay 1% to an auctioneer, an few K to get house painted & decorated, hassle of selling furniture. And, after having timed the market, buy in again and pay stamp duty of about 7%, more solicitors etc.
> 
> And after all that you don't have an answer to what to do with the money. Perhaps now you see the other side of the fence !


 
Why not just buy low - it will be so much easier.

With gross yield on property at around 3%, cash earns more in the bank without the risk.  Also - the Euro is not, never has been and never will be pegged with the US dollar.

This thread is about property sentiment so I'm not going to bore you with what I would do with the money beyond saying - I wouldn't touch Irish property.


----------



## Duplex

Just thinking about what the Americans will do to address their deficits that stand at about $12 trillion. They may seek to monetarise the debt, (print more dollars) but this will cause hyper inflation, the possible collapse of the dollar and the end of America as the soul superpower. Talk about a rock and a hard place.


http://bethemedia.typepad.com/photos/uncategorized/deficits.jpg

Nice chart tracking the deficit from the 1960's.


----------



## whathome

I love the term "Soft Landing" which has been frequently used in the press lately. I was on a flight back from Madrid recently - the plane descended slowly for 30,000 feet before we experienced a soft landing!


----------



## walk2dewater

liteweight said:
			
		

> Luck had nothing to do with it and the time span is 20 years planning to retire early.


 
If you bought into the Irish property bubble early count yourself lucky. But spare some sympathy for the poor saps buying now.



			
				liteweight said:
			
		

> However, I have always been of the opinion that a house is only worth what someone is willing to pay for it .


 
Exactly. Debt on the other hand is all due and payable, with interest. Again, spare some sympathy for the poor saps buying now.



			
				liteweight said:
			
		

> Even if house prices/rental incomes fall, it won't mean that investors sell wholesale. If that was the case, why haven't they been selling in droves over the last couple of years when rental income has dropped significantly? Capital gain alone, is only worth it if you can afford to pay the mortgage.


 
Indeed why have "investors" continued to pile into property? I think it might have to something to do with "prices always go up in the long-term", "it's a pension", "Can't lose with property", "have someone else pay your mortgage" and other such pearls of apparent wisdom.



			
				liteweight said:
			
		

> I have and always will look after my own retirement and lifestyle and don't believe for one minute that it's at anyone else's expense.


 
The reality is that the saps buying at current prices are supporting the value of your property(s). For now. That is, until we run out of saps.


----------



## gidxl03

[whathome] One thing I can say for sure, it's never easy to "just by low". E.g. when in 1996 I invested heavily, people told me I was stark raving mad. Only in hindsight was it wise. The gain is much greater than I expected so I do count myself lucky (but fully realise that it is still only on paper!) Also, of course the euro is not hard pegged to the dollar but since the EU is a net exporter to the US, the exchange rate is an important factor. E.g. Those of work in US multinationals based in Ireland know that their salaries are calculated in $.

The question about what to do with the money is intrinsically linked to the thread topic of propery sentiment. There are many amateur investors who got lucky and just don't know how to invest the profit. E.g. The Black monday crashes (25% in one day). You need to convince amateur investors like me that the stock market will be a better bet in the long run.

[bearishbull, Duplex] Stock markets have done well as economies have expanded. Oil is essential for this to happen. The trend of the last 60 years of strong stock market growth may not continue as oil reaches 200$ a barrel. At 80$ a barrel we can still fly to Italy for 50 euro. It is still dirt cheap!


----------



## whathome

gidxl03 said:
			
		

> [whathome] One thing I can say for sure, it's never easy to "just by low". E.g. when in 1996 I invested heavily, people told me I was stark raving mad. Only in hindsight was it wise. The gain is much greater than I expected so I do count myself lucky (but fully realise that it is still only on paper!)


 
I understand what you're saying gidx.  I've bought low or lowish by making sure I don't buy high.  Echoing W2DW, I really feel sorry for people trying to buy their first property at the moment but I think if they hold off, they will be able to buy at lower prices.


----------



## room305

gidxl03 said:
			
		

> The question about what to do with the money is intrinsically linked to the thread topic of propery sentiment. There are many amature investors who got lucky and just don't know how to invest the profit. E.g. The Black monday crashes (25% in one day). You need to convince amature investors like me that the stock market will be a better bet in the long run.



Nobody really cares where you invest your money because (to the best of my knowledge) nobody here has a vested interest in you putting your money somewhere. So by all means continue to take financial advice from REAs. However, historical data will show that stocks outperform all other asset classes in the longterm (10+ years). However, a well diversified portfolio is encouraged. As a store of wealth, property is terrible despite the tax advantages to holding it. For one it requires leverage and also housing is an illiquid market so it is not always possible to sell when you want.


----------



## bearishbull

Duplex said:
			
		

> Just thinking about what the Americans will do to address their deficits that stand at about $12 trillion. They may seek to monetarise the debt, (print more dollars) but this will cause hyper inflation, the possible collapse of the dollar and the end of America as the soul superpower. Talk about a rock and a hard place.
> 
> 
> http://bethemedia.typepad.com/photos/uncategorized/deficits.jpg
> 
> Nice chart tracking the deficit from the 1960's.


Its only $40k per citizen ,hardly armagedon stuff. lets try keep on topic folks.


----------



## whathome

RTE News at 6pm and 9pm had well balanced reports on the ECB rise today.  Lots of warnings about increasing debt and the squeeze on recent home buyers.  These reports really do affect sentiment IMO.


----------



## walk2dewater

Irish people by and large are totally ignorant about investing.  We don't learn it in school, and its not passed down from family.  Sorry, that's the grim reality and it's a shame.  Until we learn how, and are motivated and encouraged to, obtain, grow and preserve wealth we are destined to remain at the mercy of those that do.


----------



## room305

walk2dewater said:
			
		

> Irish people by and large are totally ignorant about investing.  We don't learn it in school, and its not passed down from family.  Sorry, that's the grim reality and it's a shame.  Until we learn how, and are motivated and encouraged to, obtain, grow and preserve wealth we are destined to remain at the mercy of those that do.



It still shocks me that it's not considered a necessary subject for the school curriculum. I guess if you go back a couple of decades then teaching children where to invest their future earnings would have seemed like a sick joke but it is essential we introduce it now.


----------



## thefisherman

one question-why should property prices keep rising at their current rates when there is no shortage of houses. we can and do build more of them each year -mainly because people seem willing to pay more and more for them.i consider that (imho)the very definition of a bubble.
question 2.
what usually happens to bubbles?
all this talk of what ifs reminds me of a joke i heard years ago-
 doctor.well mr smith, no doubt about it -you've been poisoned.
mr smith. good grief-what is it?
doctor. we wont know that until the autopsy.


----------



## gidxl03

[room305] I get the feeling that a lot of contributors would like to see people like me selling up.  So maybe they do care where it is invested!  

As for taking advice from REA's, well I wouldn't be here if it was that simple!

Note that I am only addressing one important subtopic: why don't 199X investors sell up when the profits are so high?  I have much smypathy for FTBs but can't offer them any advice.

If energy supply wasn't a problem then I would sell property and buy shares.  But it is a problem and with the uncertainty of FIAT money, I'm not convinced that selling up is the best bet.

I agree that I haven't a clue about how to invest this windfall. So I would very much like to see arguments about why peak-oil won't reverse the trend of stock market growth.  Perhaps someone with answers would like to start a new thread?  Or even just some URLs to get me started.


----------



## beattie

whathome said:
			
		

> RTE News at 6pm and 9pm had well balanced reports on the ECB rise today. Lots of warnings about increasing debt and the squeeze on recent home buyers. These reports really do affect sentiment IMO.


 
I was quite suprised that no EA or bullish commentator was on to give a 'balanced' view of the news. I am still inclined to agree with some of the earlier posts that some of the saps buying now won't pay any attention to this increase....


----------



## z107

Anyone remember the broom cupboard in knightbridge? - well check this out;
http://news.sky.com/skynews/article/0,,30000-13536171,00.html


----------



## liteweight

walk2dewater said:
			
		

> If you bought into the Irish property bubble early count yourself lucky. But spare some sympathy for the poor saps buying now.



Bought my first house in my early twenties in 1978 when rates skyrocketed to such an extent that salaries were only slightly higher than mortgages. Did not count myself lucky. Struggled on until salaries etc. increased and rates decreased meaning we could afford to pay extra off mortgage until it was paid off. Bought my current PPR, worst house in best area scenario and refurbished it over time. Meanwhile invested in commercial property (amongst other things) which we sold off a while back at a profit. Bought rental properties and allowed estate agents to look after them. With recent rise in rates and lower rental yields, took over the role of letting agent myself.

I do spare more than a thought for the FTB, but I trust that the majority will make an informed decision not only based on the market but on their personal circumstances. If that choice is to buy a home then so be it. I do not consider them 'saps' as long as they can afford it and have factored in rate increases.




			
				walk2dewater said:
			
		

> Indeed why have "investors" continued to pile into property? I think it might have to something to do with "prices always go up in the long-term", "it's a pension", "Can't lose with property", "have someone else pay your mortgage" and other such pearls of apparent wisdom.



You seem to believe that all investors behave like lemmings. Nobody could force the cash out of my hand based on a few cliches. I have to assume that others do their research too. Yes I am sure there are some who will fall for it and, if the property market crashes, IMO, they are to be pitied. 

As you stated in another post, perhaps education in schools, from parents and others in the know might help these people avoid the pitfalls. Unfortunately those 'in the know' are not always forthcoming with advice, even on these pages.





			
				walk2dewater said:
			
		

> The reality is that the saps buying at current prices are supporting the value of your property(s). For now. That is, until we run out of saps.



Correct, although I wouldn't refer to them as 'saps'. Its always been this way. Back in 1978 I was also 'supporting' those above me. What would you like to see happen? Do you imagine that if houses dropped a 100k overnight due to interest hikes, that a FTB could afford this? How far would the drop in price have to go? Nothing changes in isolation. A bank or building society will lend less to a FTB if interest rates increase, is the drop in house price negated by this? Those who think they will be able to borrow the same amount, on the same salary, at a higher rate of interest are only dreaming. The financial institutions always look after themselves first!


----------



## bugsbunny

Let the EA's sweat for a change!


----------



## Guest109

any opinions as to where not to buy a house ie near a railway bridge or line  airport or motorway


----------



## z107

> Let the EA's sweat for a change!


The Estate Agents have already made their money. If there is a collapse, they'll just close up shop and move on.



> any opinions as to where not to buy a house ie near a railway bridge or line  airport or motorway


Ireland


----------



## bugsbunny

They are closing up shop and selling on to International estate agents!


----------



## Duplex

Just an observation on the investment options discussed in previous posts.  No one has suggested setting up a business, possibly exporting its product or service (lessening exposure to any down turn in the Irish economy).  The return on investment would be up to you.


----------



## thewatcher

[broken link removed]

Some very interesting reading in that,with alot of ire directed towards the BTL brigade in the uk.Their definitely a bit more financially savy over there than your average paddy.


----------



## Duplex

umop3p!sdn said:
			
		

> Anyone remember the broom cupboard in knightbridge? - well check this out;
> http://news.sky.com/skynews/article/0,,30000-13536171,00.html


 
This was mentioned further up the thread umop, the Chinese and Australians are currently laughing up their selves.


----------



## ivuernis

gidxl03 said:
			
		

> If energy supply wasn't a problem then I would sell property and buy shares. But it is a problem and with the uncertainty of FIAT money, I'm not convinced that selling up is the best bet.
> 
> I agree that I haven't a clue about how to invest this windfall. So I would very much like to see arguments about why peak-oil won't reverse the trend of stock market growth. Perhaps someone with answers would like to start a new thread? Or even just some URLs to get me started.


 
I think peak-oil will most definitely reverse the trend of stock market growth and I can't see any reasons why it won't reverse the trend of property price growth either if it's not pricked already beforehand. 

The oil-shocks of the 70's and 80's occured when just about 5% of the world's production was removed. Annual depletions rates post-peak will be around 2% (if we're lucky). You can see the potential for the turmoil it will cause.


----------



## whizzbang

gidxl03 said:
			
		

> [room305]
> 
> Note that I am only addressing one important subtopic: why don't 199X investors sell up when the profits are so high?



Greed, why sell now if prices "can only go up"?


----------



## Firefly

Room305, you mentioned leverage as a negative aspect about property investment...leverage, in my opinion, is the sweetest thing about property investment - shares may out perform housing % wise in the long run, but because of gearing, housing brings a larger wedge of cash back in. Take a 50k deposit money for a house and put it into shares..take the S%P's 8% return for the past 25 years, for the next 25 years...wow in 25 years your investment has reached 483k...this 50K could be used to buy a house for 500K and assuming that grows by a paltry 3% a year it will worth a million over the same period. OK housing has costs and hassle with tenants, but also carries tax benefits - as interest rates rise it also presents a higher Case V rental expense deduction.
If gearing was an option for shares, I'd agree with you and buy more of them, but try walking into a bank and looking to borrow 500k to buy shares...
Firefly


----------



## whathome

Firefly said:
			
		

> leverage, in my opinion, is the sweetest thing about property investment


 
Agreed - when prices are rising. Gearing is one of the most dangerous aspects of property investment when prices are falling. It amazes me how many people are terrified of the stock market after loosing a few hundred euro on Eircom shares but they will happily walk into a bank and take out a 100% mortgage on a €400,000 property. Gearing up for a financial nightmare. Risk is a good thing when people are aware of the dangers.

New show coming to RTE in the autumn:
"I'm a property investor - Get me out of here"


----------



## askalot

Firefly said:
			
		

> this 50K could be used to buy a house for 500K and assuming that grows by a paltry 3% a year it will worth a million over the same period. OK housing has costs and hassle with tenants, but also carries tax benefits



a million minus the 500k it cost (if interest only) and minus the 50k deposit. So that's 450k gain and don't forget your 20% CGT if this is an investment property so in fact it is a 360k gain but then you have to allow for the mortgage payments! So that 483K gain on shares looks pretty good especially if they are wrapped in a pension whereby the 50


----------



## Duplex

Leverage is good when prices go up and bad when prices go down. You can borrow money to buy shares btw.


[broken link removed]


----------



## Guest126

Hi Duplex

For my info - for an average person like me say, who is not mad about property, and would like to invest say €300k in equities, using say €50k of my own (and I am not Dermot Desmond so the security for loan would need to be the same shares) - what banks would consider this?


----------



## walk2dewater

Firefly said:
			
		

> Room305, you mentioned leverage as a negative aspect about property investment...leverage, in my opinion, is the sweetest thing about property investment - shares may out perform housing % wise in the long run, but because of gearing, housing brings a larger wedge of cash back in. Take a 50k deposit money for a house and put it into shares..take the S%P's 8% return for the past 25 years, for the next 25 years...wow in 25 years your investment has reached 483k...this 50K could be used to buy a house for 500K and assuming that grows by a paltry 3% a year it will worth a million over the same period. OK housing has costs and hassle with tenants, but also carries tax benefits - as interest rates rise it also presents a higher Case V rental expense deduction.
> If gearing was an option for shares, I'd agree with you and buy more of them, but try walking into a bank and looking to borrow 500k to buy shares...
> Firefly


 
oh dear me.


----------



## Firefly

Ok Ok...I'm gonna have a bash at defending housing cliches. Can I first point out that I am in no way an expert in property investment but am actively beginning to add a portfolio (even at today's prices) for the long term.

1. House prices rise in the long term - they for the past 200 years.

2. You have to live somewhere - You do....think of all the wonderful and practical things you could do with shares and gold on a desert island.

3. Safe as houses - houses are safe. See 1. Also, for all the talk about shares as a better investment, property assets make up a very sizeable portion of a plc's Balance Sheet...take this out and see what happens the share price!

4. Rent is dead money - it is - you're paying off someone else's mortgage 
instead of your own. In the short term renting may be cheaper, but as mortgage payments are made up of Principal and Interest payments, the outstanding balance is falling all the while. For a realistic comparison of short term cashflow, the rent should be compared to only the interest element of the mortgage. Principal repayments, while hitting your bank a/c, are netted off by reducing the mortgage balance.

5. Renting is not viable long term - totally agree. Without proper rent control we can't compare our situation with the Germans. And without proper rent control I personally think that raising a family by moving from one rented house to another is both impractical (schools, childminding etc) and irresponsible as it promotes a transient attidute. Some things, like housing, just make sense.

I know I'm gonna get slated now because the vast majority of contributers to this thread are preaching doom & gloom, but for those who really believe long term renting is a better way to go...please spread the word to as many people you can - who knows you might be renting one of my places in a few years time, and sure then we'll all be happy!!

Firely


----------



## Guest126

Firefly - if rent is DEAD MONEY...then what do you call the money that a landlord pays on an INTEREST ONLY loan that exceeds the rental income on a house (you will be doing that if you buy investment property at current prices)?


----------



## jani

i happened on this thread a while back and have popped in on it from time to time. i am a FTB and being referred to as a sap really angers me, some of the generalised comments here..referring to people as sheep, plebs, saps lowers the tone and are indulgent, unbalanced and take away from the valid points being made.


----------



## redo

Firefly said:
			
		

> 1. House prices rise in the long term - they for the past 200 years.
> *Prices of everything rise over time, art included*
> 
> 2. You have to live somewhere - You do....think of all the wonderful and practical things you could do with shares and gold on a desert island.
> *Yes, you do have to live somewhere, house ownership is different*
> 
> 3. Safe as houses - houses are safe. See 1. Also, for all the talk about shares as a better investment, property assets make up a very sizeable portion of a plc's Balance Sheet...take this out and see what happens the share price!
> *Local developments, like the new Gaol in North Dublin can effect prices*
> 
> 4. Rent is dead money - it is - you're paying off someone else's mortgage
> instead of your own. In the short term renting may be cheaper, but as mortgage payments are made up of Principal and Interest payments, the outstanding balance is falling all the while. For a realistic comparison of short term cashflow, the rent should be compared to only the interest element of the mortgage. Principal repayments, while hitting your bank a/c, are netted off by reducing the mortgage balance.
> *Rent is the payment of a service, ie accomodation.  If during the next couple of years, the housing market bursts, houses (in the short term) can become liabilities.  In this instance, rent is the clever option.*
> 
> 
> Firely


 However, I own a house and would not rent.

EDIT: The bank owns half of it.


----------



## redo

jani said:
			
		

> i happened on this thread a while back and have popped in on it from time to time. i am a FTB and being referred to as a sap really angers me, some of the generalised comments here..referring to people as sheep, plebs, saps lowers the tone and are indulgent, unbalanced and take away from the valid points being made.


Welcome to AAM (Ask About Money).  Would be interested to hear your thoughts.  Have you bought or still considering?  Again, welcome and join in


----------



## whathome

Firefly said:
			
		

> I know I'm gonna get slated now


 
I wouldn't disagree that there are positive aspects to property investment when you don't buy into a bubble. I will buy investment property again when I can get find a property that will yield above 6%. It's far more difficult for first time buyers but since they are competing with investors, looking at the rental return to spot a bubble and avoid it makes sense.


----------



## gidxl03

CapitalCCC: "Firefly - if rent is DEAD MONEY...then what do you call the money that a landlord pays on an INTEREST ONLY loan that exceeds the rental income on a house (you will be doing that if you buy investment property at current prices)?"

That money is a cost of business.  If this cost is greater than house price inflation then the investor is losing money.  However over time, inflation causes the initial purchase price to be small compared to rental income which rises over time.  In short, it is the small price you pay for inflation that causes a house to be worth 4x what it cost 20 years ago.  (last 10 years has been exception, but the principle still applies.)


----------



## walk2dewater

http://www.m-w.com/dictionary/sap

Pronunciation: 'sap
Function: _noun_
Etymology: Middle English, from Old English _sæp;_ akin to Old High German _saf_ sap
*1 a* *:* the fluid part of a plant; _specifically_ *:* a watery solution that circulates through a plant's vascular system *b *(1) *:* a body fluid (as blood) essential to life, health, or vigor (2) *:* bodily health and vigor
*2* *:* a foolish gullible person

Every pyramid scheme needs a steady supply of the No.2's.


----------



## JohnBoy

1. House prices rise in the long term - they for the past 200 years.

Most things do - that is called inflation. Most asset prices are subject to cycles - a period of outperformance followed by either static or falling real prices. If you buy near the top you could spend 10 years regretting it.

2. You have to live somewhere - You do....think of all the wonderful and practical things you could do with shares and gold on a desert island.

Like earn a return significantly in excess of the returns available on Irish property! Not to mention diversification etc - Yes you do need to live somewhere - buy you only _need_ one property.

3. Safe as houses - houses are safe. See 1. Also, for all the talk about shares as a better investment, property assets make up a very sizeable portion of a plc's Balance Sheet...take this out and see what happens the share price!

Houses safe? *No* investment is truly safe - even bank deposits carry a degree of risk. In the past 15 years house prices have fallen in lots of places (UK; Japan; Australia; Norway & look to be about to in the US). Property is an increasingly unimportant balance sheet asset in an economy that is service oriented - also, lots of plc's (including the Irish banks) are selling some of their property assets - does this not concern you?

4. Rent is dead money - it is - you're paying off someone else's mortgage 
instead of your own. In the short term renting may be cheaper, but as mortgage payments are made up of Principal and Interest payments, the outstanding balance is falling all the while. For a realistic comparison of short term cashflow, the rent should be compared to only the interest element of the mortgage. Principal repayments, while hitting your bank a/c, are netted off by reducing the mortgage balance.

True but many investment properties in Ireland are on IO mortgages so the loan amount is never reduced. Lots of landlords cannot even cover the interest payments on the mortgage out of rent received - in this respect the rent is dead money from the landlord's perspective!

5. Renting is not viable long term - totally agree. Without proper rent control we can't compare our situation with the Germans. And without proper rent control I personally think that raising a family by moving from one rented house to another is both impractical (schools, childminding etc) and irresponsible as it promotes a transient attidute. Some things, like housing, just make sense.

Also true but the property market in Ireland now seems to be weighted in favour of renters in terms of choice and price.

I know I'm gonna get slated now because the vast majority of contributers to this thread are preaching doom & gloom, but for those who really believe long term renting is a better way to go...please spread the word to as many people you can - who knows you might be renting one of my places in a few years time, and sure then we'll all be happy!!

no interest in slating you. It is good to debate these issues. That is what makes a market place. At current prices I am a seller and you are a buyer.

Firely[/quote]


----------



## whizzbang

Firefly, thank you for posting the bullish arguments, property bulls rarely give reasons for their beliefs, it is good to find one who is willing to debate!


----------



## beattie

walk2dewater said:
			
		

> http://www.m-w.com/dictionary/sap
> 
> Pronunciation: 'sap
> Function: _noun_
> Etymology: Middle English, from Old English _sæp;_ akin to Old High German _saf_ sap
> *1 a* *:* the fluid part of a plant; _specifically_ *:* a watery solution that circulates through a plant's vascular system *b *(1) *:* a body fluid (as blood) essential to life, health, or vigor (2) *:* bodily health and vigor
> *2* *:* a foolish gullible person
> 
> Every pyramid scheme needs a steady supply of the No.2's.


 
There are no shortage of the 2's in Ireland at the moment, though it will be interesting to see if any of them pay any heed to yesterday's ECB rise.


----------



## Persius

JohnBoy said:
			
		

> 5. Renting is not viable long term - totally agree. Without proper rent control we can't compare our situation with the Germans. And without proper rent control I personally think that raising a family by moving from one rented house to another is both impractical (schools, childminding etc) and irresponsible as it promotes a transient attidute. Some things, like housing, just make sense.
> 
> 
> 
> 
> *Also true but the property market in Ireland now seems to be weighted in favour of renters in terms of choice and price.*
Click to expand...

 
You have to admit that the rental options, even now, are not great for people wishing to raise a family. I have stated in other posts that after looking for a place to buy, I have decided to rent instead for a while. However this decision will always be based on personal circumstances as well as financial circumstances. In many situations it is not a viable option in the long term. 

I can understand these people thinking that if they have to bite the bullet of house purchase sometime soon anyway, it may as well be now instead of paying two more years of rental "dead money" and then starting with a mortgage. Would you tell such people not to buy now and instead try to "time the market"?


----------



## thewatcher

Persius said:
			
		

> You have to admit that the rental options, even now, are not great for people wishing to raise a family.


 
One simple answer to that "Government failure" yet again.The simple fact is the FF/PD's care more about economic units than they do about people.


----------



## CelloPoint

Persius said:
			
		

> Would you tell such people not to buy now and instead try to "time the market"?



I would, because it's worth the risk. What isn't worth the risk, is a 40 year mortgage for a house in the middle of nowhere. The only reason people live in such places is because it's the 'only place they can afford' which is a stupid reason to buy.

With rent you can live in a very good location with very low financial exposure to market downturns. And let's be honest, the longer this madness continues, the more the risk accumulates and the more unnattractive these generic housing estates in west Dublin become.


----------



## walk2dewater

beattie said:
			
		

> There are no shortage of the 2's in Ireland at the moment, though it will be interesting to see if any of them pay any heed to yesterday's ECB rise.


 
No they won’t.  IMHO the thinking of the “marginal” unit of demand at the bottom of the pyramid is as follows:


Rates have gone up, I can borrow less at my current income.
Rates are rising faster and faster, I can borrow less and less.
Fixed rates are also rising, if I buy now I can lock-in at a fixed rate.
Prices have risen so high, for so long, therefore they cannot fall, only “stagnate” at worst.
I must buy now or never be able to buy my own house.
Result:  massive price spike coming.


----------



## redo

thewatcher said:
			
		

> One simple answer to that "Government failure" yet again.The simple fact is the FF/PD's care more about economic units than they do about people.


FF know that there is a direct relationship between the sale of new builds and pary donations.  I would expect something to stimulate the FTB market in the next budget, keeping the gravy train running.


----------



## beattie

Persius said:
			
		

> Would you tell such people not to buy now and instead try to "time the market"?


 
Yes and I have but they don't listen as I am told it will be more expensive if they wait...... I no longer pass any remarks about it as it is becoming too critical for many people if there is a correction. There is no planning as to future expenses such as children etc so I just avoid any mention of the subject. Still many bankers will take home serious bonus' judging by the results from the banks in the past few days on the back of the property boom.......


----------



## redo

walk2dewater said:
			
		

> No they won’t.  IMHO the thinking of the “marginal” unit of demand at the bottom of the pyramid is as follows:
> 
> Rates have gone up, I can borrow less at my current income.
> Rates are rising faster and faster, I can borrow less and less.
> Fixed rates are also rising, if I buy now I can lock-in at a fixed rate.
> Prices have risen so high, for so long, therefore they cannot fall, only “stagnate” at worst.
> I must buy now or never be able to buy my own house.
> Result:  massive price spike coming.



Also, when one considers that the primary building activity over the last 5 years or so, was aimed to the FTB market.  These people are due an "upgrade", so to speak.  I would expect the points you have highlighted would resonate more with people who wish to trade up.  Already, houses like mine (trade up type, nice area etc) have sold for over 150k more than we paid in April.


----------



## whathome

One of our selling agents called this morning to advise accepting an offer which is below the asking price - he said it's a good idea to get the deal done before the new "stock" comes on in September.  They've given me until Monday to decide!  I asked him about his feelings on the market - he said there were "Lots of tyre kickers".  I presume he means people viewing without making any offers.


----------



## Bedsit

I thought this comment by an EA in today's Irish Examiner was quite amusing. The full article can be found at the following URL:

[broken link removed]

“Regardless of interest rate hikes, the Irish property market will continue to perform strongly on the back of positive economic conditions, ...,” said Marie Hunt, director of research at estate agents CB Richard Ellis. 

She added that considering the enormous wealth generation that has been created in Ireland in recent years, property purchases are now less reliant on bank financing than was traditionally the case and upward movements in interest rates of the scale that we are likely to witness this year are not a huge concern for many investors. 

“This is particularly true in the commercial sector and in the residential investment market, *where many investors are now cash buyers*,” she said.


----------



## Firefly

I'd like to qualify that interest only is not what I'm about to do, nor would not recommend...however rent would still cover an interest only mortgage. Can't remember who, but someone made a good point that if the rent covers the interest element of a mortgage on a non-IO mortgage, doesn't this give the investor effectively an interest-free 30 year lona? Not bad...

As for renting, you are at the mercy of the landlord..ok it's good at the moment, but you never know. 

The bank does own (or at least has the rights to) most of the house until the loan is repayed - same with any other business you go into with start up capital.

One of the points I forgot to mention regarding shares (and I'm not anti-shares btw, I have a growing portfolio here also), is that if you have say an extra 200 euro coming in every month and want to buy shares Mr Davy and Mr Goodbody are going to charge you a bomb to transact on those, with property (once the initial costs, although huge, are paid) you can simply reduce the balance.

Firefly.


----------



## walk2dewater

Firefly said:
			
		

> One of the points I forgot to mention regarding shares (and I'm not anti-shares btw, I have a growing portfolio here also), is that if you have say an extra 200 euro coming in every month and want to buy shares Mr Davy and Mr Goodbody are going to charge you a bomb to transact on those, with property (once the initial costs, although huge, are paid) you can simply reduce the balance.
> 
> Firefly.


 
And it's a very good point.  Brokerage services/infrastructure is a joke here.  And with their "advice" it's no wonder people consider stocks and bonds more akin to gambling than investing.  There are other options though for Irish residents, namely a certain (unmentionable) international brokerage based in Luxembourg.


----------



## Duplex

I think quite a few people, (including that lady from CB Ellis) are in for a shock. 

The only long term study on real estate price growth in real terms that I'm aware of was undertaken in Holland. The study examined property prices in Amsterdam over a 300 year period, the average annual rise in prices in the period, 0.3%. 

People discuss the Irish property market as if the Irish economy was a self sufficient entity removed from the vagaries of cyclical economic growth and contraction. In fact Ireland is almost uniquely exposed to a global contraction in trade. 

If any one is interested in what lies in store for the Irish property market/economy (the same thing essentially) then look no further than the US. You know the nation that drags us along on its economic coat tails; its one year further down the debt bubble correction trail than us.

Edit

Have a butchers at this, not a Goldilocks perspective I'm afraid.

http://www.rgemonitor.com/blog/roubini


----------



## bearishbull

Firefly said:
			
		

> I'd like to qualify that interest only is not what I'm about to do, nor would not recommend...however rent would still cover an interest only mortgage. Can't remember who, but someone made a good point that if the rent covers the interest element of a mortgage on a non-IO mortgage, doesn't this give the investor effectively an interest-free 30 year lona? Not bad...
> 
> As for renting, you are at the mercy of the landlord..ok it's good at the moment, but you never know.
> 
> The bank does own (or at least has the rights to) most of the house until the loan is repayed - same with any other business you go into with start up capital.
> 
> One of the points I forgot to mention regarding shares (and I'm not anti-shares btw, I have a growing portfolio here also), is that if you have say an extra 200 euro coming in every month and want to buy shares Mr Davy and Mr Goodbody are going to charge you a bomb to transact on those, with property (once the initial costs, although huge, are paid) you can simply reduce the balance.
> 
> Firefly.


 interest only mortgage as free loan? What about opportunity cost ? Your getting zero return on capital unless the house price rises.
As for renting,in reality the landlord is at the mercy of the market  ,rents are no higher in real terms than in 2000 while the asset price has shot up massively, the reason is vast supply of rental property and this will only get worse for the landlord with 100k units being built a year and 40% being bought (and presumably rented) by investors.
If your buyng now i really feel you will deserve it when prices fall along with rents in coming 1-3years. maybe you will see out this rough patch if you have strong cash flow but in long term i think things are even worse for you as with approx 100k units being built EVERY year there will be massive oversupply in one two and three decades which is your long term investment horizon.
As for shares save the 200 a month for say 6 months and then buy online for feck all charges/transaction fees.


----------



## bearishbull

Duplex said:
			
		

> I think quite a few people, (including that lady from CB Ellis) are in for a shock.
> 
> The only long term study on real estate price growth in real terms that I'm aware of was undertaken in Holland. The study examined property prices in Amsterdam over a 300 year period, the average annual rise in prices in the period, 0.3%.
> 
> People discuss the Irish property market as if the Irish economy was a self sufficient entity removed from the vagaries of cyclical economic growth and contraction. In fact Ireland is almost uniquely exposed to a global contraction in trade.
> 
> If any one is interested in what lies in store for the Irish property market/economy (the same thing essentially) then look no further than the US. You know the nation that drags us along on its economic coat tails; its one year further down the debt bubble correction trail than us.
> 
> Edit
> 
> Have a butchers at this, not a Goldilocks perspective I'm afraid.
> 
> http://www.rgemonitor.com/blog/roubini


im sure if the woman has a brain in her head she knows its unsustainable and crash likely but its her job to spin it that way. She fails to address the fact that the economic conditions are being generated by construction (to a large degree) and public service and not from the essential export sector of economy,this self fuffilling economic activity can only last so long before fundamentals and reality hit home.


----------



## bearishbull

Firefly - Show us even one property on myhome in dublin that if rented would cover an interest only mortgage plus the maintenace insurance and empty periods that all landlords encounter and thats even ignoring  the stamp duty on purchase.


----------



## thewatcher

redo said:
			
		

> FF know that there is a direct relationship between the sale of new builds and pary donations. I would expect something to stimulate the FTB market in the next budget, keeping the gravy train running.


 
I was refering to "security of tenure" or the lack of it so to speak.While it has improved a bit in the last few years (as in the landlord can't turn up in the middle of the night and tell you to pack your bags) it's still a joke compared to continental europe.
I can see why people don't want to raise familys in private rented accomodation,because of the lack of security and that's fair enough,that is the governments fault fair and square.The irish wouldn't be half as mad on property,if the investors/speculators had half the responsibilities they would on the continent.

The biggest joke of the whole thing is you can have two houses side by side in an estate,one given to the council as part of the social and affordable provisions rented to a council tenant who can only be got ridden of, if they cause anti-social behaviour and the other one rented to a private tenant with barely any rights at all.It wouldn't happen in Germany !.


----------



## Firefly

Will have a look for said property that when rented will cover int on mortgage...but can't at the mo - sneakily logging every few mins at work!

Whilst supply is shooting upwards, it's not in the areas I'm looking at - 3 bed houses in Kimmage.

I totally agree that buying out in the middle of nowhere is madness as an investment property....but this is akin to buying shares in a dead-tech IT company...we can't just say property is better than shares vice-versa...each investment has to be judged on it's own merits.
I like the point re: opportunity cost...hadn't factored that in

The other thing about property investment & leverage...even with the hassle with tenants etc, it is a very low maintenace business - any other business (and it is a business in my book) requireing 500k, you'd need to give up your current job. With property investment you don't.

Firefly


----------



## Guest126

Property ownership is a LOT more labour intensive than share ownership.


----------



## bearishbull

thewatcher said:
			
		

> I was refering to "security of tenure" or the lack of it so to speak.While it has improved a bit in the last few years (as in the landlord can't turn up in the middle of the night and tell you to pack your bags) it's still a joke compared to continental europe.
> I can see why people don't want to raise familys in private rented accomodation,because of the lack of security and that's fair enough and that is the governments fault fair and square.The irish wouldn't be half as mad on property,if the investors/speculators had half the responsibilities they would on the continent.


 
Is it really that bad to have to move every 3/4 years? If you rent a place in same area your kids still have their friends/schools etc nearby. The legislation is better now than a few years ago and will only improve.


----------



## CelloPoint

Firefly said:
			
		

> Will have a look for said property that when rented will cover int on mortgage...but can't at the mo - sneakily logging every few mins at work!



You'll be looking for a long time.


----------



## Duplex

Firefly said:
			
		

> Will have a look for said property that when rented will cover int on mortgage...but can't at the mo - sneakily logging every few mins at work!
> 
> Whilst supply is shooting upwards, it's not in the areas I'm looking at - 3 bed houses in Kimmage.
> 
> I totally agree that buying out in the middle of nowhere is madness as an investment property....but this is akin to buying shares in a dead-tech IT company...we can't just say property is better than shares vice-versa...each investment has to be judged on it's own merits.
> I like the point re: opportunity cost...hadn't factored that in
> 
> The other thing about property investment & leverage...even with the hassle with tenants etc, it is a very low maintenace business - any other business (and it is a business in my book) requireing 500k, you'd need to give up your current job. With property investment you don't.
> 
> Firefly


 
Thanks for posting your views Firefly I appreciate where your coming from. I'm curious on what your view is of the wider economic context, the background against which you are basing your investment decisions.


Edit 

I cant find the original study on line but an article from The IHT covers that long term study of the Amsterdam market if anyone's interested.

[broken link removed]


----------



## thewatcher

Duplex said:
			
		

> Thanks for posting your views Firefly I appreciate where your coming from. I'm curious on what your view is of the wider economic context, the background against which you are basing your investment decisions.


 
To be fair Firefly seems to know what he/she is doing.
I know 3 "landlords", not a bean in stamp duty paid,not a bean in tax on rental income paid,the prtb "what's that ?"


----------



## bearishbull

Many of the people buying investments today dont contemplate global economics despite fact we are one of the most open/globalised economies in world and will suffer most in a global slowdown as many analysts are forecasting. We have been lucky in last 15 years that not many global shock have occured that affected us but this is bound to change. Remember the original Tiger economies that crashed in late nineties.Add in the fact we have lost all monetary control and this economy is precarious.


----------



## Bedsit

*Live Register Figures*

Its interesting to see how different reports can put a completely different spin on the same peice of news.

[FONT=Arial, Verdana, Helvetica]Live Register falls 2,500 in July - RTE[/FONT]
[FONT=Arial, Verdana, Helvetica]http://www.rte.ie/business/2006/0804/CSO.html[/FONT]

[FONT=Arial, Verdana, Helvetica]Number on Live Register up 3.6% in July - Irish Times[/FONT]
[FONT=Arial, Verdana, Helvetica][broken link removed][/FONT]


----------



## whizzbang

thewatcher said:
			
		

> To be fair Firefly seems to know what he/she is doing.
> I know 3 "landlords", not a bean in stamp duty paid,not a bean in tax on rental income paid,the prtb "what's that ?"



I can't help but think these people are the Revenue's "Rainy Day fund" that they will go after when the tax revenue dries up.


----------



## bearishbull

Firefly said:
			
		

> Whilst supply is shooting upwards, it's not in the areas I'm looking at - 3 bed houses in Kimmage.
> 
> I


3 bed in kimmage? whats the yield on that after maintenace, insurance, taxes, a charge for your time managing/renting/fixing the property,stamp duty,empty periods etc???? Very little i'd expect ,then you have your interest to pay so you'll be paying your own cash in every month to own an albatross. There might not be an infinite supply of 3 bed houses in dublin but theres not an infinite line of credit either, do you not realise that demand is less after every price rise and interest rate rise due to the amount a person/couple can borrow and afford?


----------



## Firefly

I try not to predict the economy in general because I don't have enough information, nor am I suitably qualified. 
Sorry to harp on about property as the be all and end all, but even with increased supply I can't see the Irish love affair with property coming to an end any time soon. To get a good insight into Irish psyche, go to Xtravision tonight and rent out "The Field".
Firefly


----------



## CelloPoint

whizzbang said:
			
		

> I can't help but think these people are the Revenue's "Rainy Day fund" that they will go after when the tax revenue dries up.



They'll be grand so long as they have a 'good' accountant with connections (I know one person who's avoided a stamp duty bill by using such accountants). It's rampant in the industry, so much so that revenue are overwhelmed trying to track down such people. Even still, revenue officials are only humans and the brown envelope culture still pays even though people might not want to believe it (I'm talking from my own experience of course).

Point taken though that Revenue could use this as a "Rainy Day fund". But I'd say you can safely say you'll get away with it - by revenue opening this can of worms, they'd undermine their own integrity. A nod and a wink and a quiet chat will keep troubles at bay.


----------



## Firefly

Regarding houses in Kimmage, I agree that I will face negative cashflow until I sell, but I believe that this area will appreciate when the FTBs buying all those small apts now need/want more space...so it's a cap appreciation play.
One of the areas I have a problem with shares though (and sorry if I'm going off-point), is that if you keep adding to a set portfolio of shares and then sell some, the Revenue deems the shares you sold to come from the first batch you bought...thereby resulting in a higher CGT.
Firefly


----------



## beattie

Firefly said:
			
		

> To get a good insight into Irish psyche, go to Xtravision tonight and rent out "The Field".
> Firefly


 
It is a good analogy but it seems the property bulls could experience the investments going over the cliff when the bubble here bursts which will have very serious knock on effects for the rest of the economy


----------



## Calina

CelloPoint said:
			
		

> Point taken though that Revenue could use this as a "Rainy Day fund". But I'd say you can safely say you'll get away with it - by revenue opening this can of worms, they'd undermine their own integrity. A nod and a wink and a quiet chat will keep troubles at bay.



By revenue not opening said can of worms, they will prove that they have no integrity to lose. 

Sorry. Your attitude sickens me.


----------



## Guest126

So, according to a property bull, the analogy implies that we have a good property market that we can rely on into the future because we are a nation of ignoramuses and that won't change?


----------



## JohnBoy

good example! A better example might be Oliver Stone's Wall Street (followed perhaps by Angela's Ashes). Fair play to you for sticking your head into the bear cave by the way.


----------



## Glenbhoy

Bearishbull, i decided to take up the mantle of your challenge (for research purposes of course).  Twas more difficult than i thought, but i've come up with this:
[broken link removed]=
2 bedroom apartment - mountjoy sq. cost 330K

100% IO mortgage, repayments at 4.35% are €1194


Rental, given comparable apartments on DAFT, one would hope for circa 1300  p.m.
http://www.daft.ie/searchrental.daft?s%5Bcc_id%5D=ct1&s%5Ba_id%5D=ga1&s%5Bmnp%5D=&s%5Bmxp%5D=&s%5Bbd_no%5D=2&refine=Refine&search=1&s%5Brefreshmap%5D=1&search_type=rental

Overall Income - 11 months  - 14300  p.a
Annual Interest - 14328 p.a

Slight loss considering management fee/insurance, but rent could perhaps be increased slightly.   
Bear in mind that capital appreciation is likely to be circa 10% p.a (because it always is obviously).
Net result -  win, win, win.......


----------



## whizzbang

Glenbhoy said:
			
		

> [broken link removed]=
> 2 bedroom apartment - mountjoy sq. cost 330K


so long as you can get it for 330,000 and there isn't a bidding war 

/edit fair play on finding one that at least works on paper though!


----------



## room305

CelloPoint said:
			
		

> They'll be grand so long as they have a 'good' accountant with connections (I know one person who's avoided a stamp duty bill by using such accountants). It's rampant in the industry, so much so that revenue are overwhelmed trying to track down such people. Even still, revenue officials are only humans and the brown envelope culture still pays even though people might not want to believe it (I'm talking from my own experience of course).



This is misleading toss if not outright lies. There are of course legal ways of avoiding stamp duty and good accountants will be happy to point them out to you. There is nothing necessarily wrong with this. 

However, to suggest that stamp duty can be avoided by bribing revenue officials is a joke. Just think about logically - what size of a bribe would you be talking about and would the official (who would have to be quite senior and even then I'd have my doubts) really want to risk their entire career for it?

If you have indeed bribed an official then you were probably taken for a ride.


----------



## bogwarrior

while posters here (perhaps reflecting their own circumstances) remark on the dangers of FTBs getting stuck in the newly developed, poorly serviced outer suburbs of our cities when a correction comes, at least they will have a place to live, even if its not the detached period house in Rathmines they hoped for.  From once they can make they repayments they'll survive.

The real danger here is for the 50 something wannabe investor, who has a bit of equity or nice nest-egg built up and see's from some of his/her mates that property is the way to go.  At a time in their lives when they should be moving away from risky investments (and lets face it - at the current prices 2 bed units and generic 3 bed semi-d's in the new burbs are risky as a shortish term ie5-10 year investment), they're getting into the property fad.

To me its similar to what happened in the US pensions market during dot-com, when people nearing retirement age were encouraged to invest large chunks of their assets into the dot-coms rather than diversifying some of it into bonds/cash.

In the event of a correction/slowdown/crash here - young people will feel it bad, but at least time will be on their side to recover their assets.  The smart people will have made their money anyway, and there will also be a lot of folks who'll be able to ride it out.  But the 58 year-old with the empty 3 bed-semi in a legoland Kildare housing estate who was banking on it as his retirement fund, now thats the guy/girl who's going to be phoning Joe Duffy.....


----------



## room305

thewatcher said:
			
		

> I was refering to "security of tenure" or the lack of it so to speak.



As I plan to move from being an owner to a renter this is something that is of concern. The regulation is quite weak and probably the only thing working in your favour is the vast over-supply of rental properties means the landlord cannot afford to get you offside.

However, there are similar downsides to home ownership as anyone has had to deal with unregulated sham property management companies is probably all too well aware.

At least if you are shafted by your landlord it is relatively easy to move. It's one hell of a process to try and sort a bad management company out!


----------



## Firefly

Pardon the beermat maths here, but say you buy an interest only apt for 300k (I fundamently disapprove of IOs btw - just to prove a point). Say the rent doesn't cover the IO mortgage and that you have to subsidize it to the tune of 300 euro per month for 20 years. That results in negative cashflow of 3,600 a year or 120k over 20 years...a considerable sum, but the property would only have to increase by 1 measily percent py to make this back. Worst comes to the worst ...after 10 years you decide your fed up forking out 3,600 (which in 10 years will be zilch anyway)...do it up and have a nice bed i Dublin for dirty weekends away!
Firefly.


----------



## CelloPoint

Glenbhoy said:
			
		

> Bearishbull, i decided to take up the mantle of your challenge (for research purposes of course).  Twas more difficult than i thought, but i've come up with this:
> [broken link removed]=
> 2 bedroom apartment - mountjoy sq. cost 330K
> 
> 100% IO mortgage, repayments at 4.35% are €1194
> 
> 
> Rental, given comparable apartments on DAFT, one would hope for circa 1300  p.m.
> http://www.daft.ie/searchrental.daft?s%5Bcc_id%5D=ct1&s%5Ba_id%5D=ga1&s%5Bmnp%5D=&s%5Bmxp%5D=&s%5Bbd_no%5D=2&refine=Refine&search=1&s%5Brefreshmap%5D=1&search_type=rental
> 
> Overall Income - 11 months  - 14300  p.a
> Annual Interest - 14328 p.a
> 
> Slight loss considering management fee/insurance, but rent could perhaps be increased slightly.
> Bear in mind that capital appreciation is likely to be circa 10% p.a (because it always is obviously).
> Net result -  win, win, win.......



You've neglected stamp duty, maintainence costs (remember it's the landlords responsibility to sort out that dishwasher, dodgy plumbing, leaking ceiling, broken lightbulb), and legal fees.

You'd be lucky to get E550 for a double room in a flat in Mountjoy Square given the large immigrant population and native vagrants in the vicinity of that area.


----------



## Persius

Revenue may be underresourced, but I do think they will be able to track down many "investor landlords" who aren't paying income tax on rent, correct stamp duty, capital gains tax on sales etc.

I've posted on this before. Basically just like the non-resident account inquiries, they offload the work to the banks. The easy method would be to look at any individual with more than one mortgage. Alternativly to cover the case where people are themselves renting, but also renting out what was once their PPR, they ask the banks to trawl for morgages which were payed off from a stream of income that doesn't appear to be a salary, i.e. someone else's rent. Considering today's technology and bank record retention period, this shouldn't be too hard to do. If the revenue even start _talking_ about it, many may confess themselves if doing so could avoid fines.


----------



## room305

Firefly said:
			
		

> That results in negative cashflow of 3,600 a year or 120k over 20 years...a considerable sum, but the property would only have to increase by 1 measily percent py to make this back.



If you invested your capital over 20 years and got a return of exactly zero would you think you had got a good deal? It would be better off in the current account of an Irish bank.


----------



## tententwenty

Persius said:
			
		

> Revenue may be underresourced, but I do think they will be able to track down many "investor landlords" who aren't paying income tax on rent, correct stamp duty, capital gains tax on sales etc.
> 
> I've posted on this before. Basically just like the non-resident account inquiries, they offload the work to the banks. The easy method would be to look at any individual with more than one mortgage. Alternativly to cover the case where people are themselves renting, but also renting out what was once their PPR, they ask the banks to trawl for morgages which were payed off from a stream of income that doesn't appear to be a salary, i.e. someone else's rent. Considering today's technology and bank record retention period, this shouldn't be too hard to do. If the revenue even start _talking_ about it, many may confess themselves if doing so could avoid fines.


Or alternately they could just phone up anyone advertising a room and ask if they give rent receipts. If the answer is no, investigations ensue!


----------



## Glenbhoy

CelloPoint said:
			
		

> You've neglected stamp duty, maintainence costs (remember it's the landlords responsibility to sort out that dishwasher, dodgy plumbing, leaking ceiling, broken lightbulb), and legal fees.
> 
> You'd be lucky to get E550 for a double room in a flat in Mountjoy Square given the large immigrant population and native vagrants in the vicinity of that area.


Bearishbull did say to neglect stamp duty.  Maintenance costs have been neglected (sure white good consumables are pretty cheap nowadays), but as a  bit of a handy man myself, i can do most of that myself (i don't know about the lightbulb, but i don't remember any of my landlords replacing the bulbs).
As for the rent, I don't agree with you and DAFT does seem to back me up - i worked there for 3.5 years and don't remember too many 'native vagrants', as for immigrants, there are indeed more non-irish nationals there than previously, but that goes for most parts of the city (even some southside locations!!).


----------



## exile

tententwenty said:
			
		

> Or alternately they could just phone up anyone advertising a room and ask if they take rent receipts. If the answer is no, investigations ensue!


I know at least one person who got a letter from the Revenue saying they suspected she had properties she was letting.  Not quite sure why they flagged her - it was something to do with address changes which didn't match her property purchases.  Actually she wasn't letting any properties and owned just one house which she lived in.  But they're obviously putting some thought into it.


----------



## Duplex

Firefly said:
			
		

> I try not to predict the economy in general because I don't have enough information, nor am I suitably qualified.
> Sorry to harp on about property as the be all and end all, but even with increased supply I can't see the Irish love affair with property coming to an end any time soon. To get a good insight into Irish psyche, go to Xtravision tonight and rent out "The Field".
> Firefly


 
I've often come across, what only can be described as this cultural foible as an explanation as to why the Irish property market wont fold.  However a sentimental Hollywood film is pretty flimsy evidence to support a multi billion € market.  The most likely scenario is that we will have a repeat of what happened in 2001 a build up in inventories followed by falling prices.


----------



## whathome

Duplex said:
			
		

> The most likely scenario is that we will have a repeat of what happened in 2001 a build up in inventories followed by falling prices.


 
Absolutely agree, I bought in late 2001, the market right now feels very similar to mid 2001 when prices started dropping. The big difference is that there's nothing create a reversal next year as opposed to the recovery in 2002. 

Buyers know all about fear so they're very good at smelling it.


----------



## Glenbhoy

> Revenue may be underresourced, but I do think they will be able to track down many "investor landlords" *who aren't paying income tax on rent*, correct stamp duty, capital gains tax on sales etc.


Alternatively, since the general sentiment here is that investors can't cover the mortgage interest with rent, then there's no income tax to pay!! (i know that's a relatively recent phenomonem....)


----------



## thewatcher

Firefly said:
			
		

> I try not to predict the economy in general because I don't have enough information, nor am I suitably qualified.
> Sorry to harp on about property as the be all and end all, but even with increased supply I can't see the Irish love affair with property coming to an end any time soon. To get a good insight into Irish psyche, go to Xtravision tonight and rent out "The Field".
> Firefly


 
Whatever about the older generation,it's nothing as deep as that with the younger generation.Greed plain and simple "can't lose" etc.


----------



## thewatcher

exile said:
			
		

> I know at least one person who got a letter from the Revenue saying they suspected she had properties she was letting. Not quite sure why they flagged her - it was something to do with address changes which didn't match her property purchases. Actually she wasn't letting any properties and owned just one house which she lived in. But they're obviously putting some thought into it.


 
That's the funny thing,the one person i know who did sell a house to buy another one rather than holding on to their first property told me he got a letter from revenue a few weeks later.It was some kind of declaration that he had sold his initial property,not exactly sure.I can only think that maybe all these evaders are revenue's rainy day fund.


----------



## Howitzer

Firefly said:
			
		

> Pardon the beermat maths here, but say you buy an interest only apt for 300k (I fundamently disapprove of IOs btw - just to prove a point). Say the rent doesn't cover the IO mortgage and that you have to subsidize it to the tune of 300 euro per month for 20 years. That results in negative cashflow of 3,600 a year or 120k over 20 years...a considerable sum, but the property would only have to increase by 1 measily percent py to make this back. Worst comes to the worst ...after 10 years you decide your fed up forking out 3,600 (which in 10 years will be zilch anyway)...do it up and have a nice bed i Dublin for dirty weekends away!
> Firefly.


 
Except you'll still owe 300K and even IO mortagages will look for you to pay this off at some point.


----------



## CelloPoint

Just saw this post over on Location, location, location.

Gives you an idea as to how anxious developers are to get the contracts signed and money in the bank. They're even offering a E500 voucher if you sign within 21 days! The voucher's probably with one of their mate's kitchen companies so is pittence for the sake of peace of mind, safe in the knowledge that no matter how badly the market turns, your money is safely tucked away in the bank.



			
				Paulie13 said:
			
		

> If you get the contracts sorted within 21 days of your solicitor receiving them you get a 500euro voucher towards your kitchen. Even our contract didn't give individual dimensions (or even mention the overall square footage!!!). I think its fair to say that Bohan property consultants are not excelling themselves with their level of service on this one!



Someone FTB was on here giving on about people referring to FTBs as 'saps' etc. I'm sorry if you what you read doesn't please you, but anybody who gets involved in deals with developers for a poorly-located property, in a turbulent market, that isn't even built yet is most certainly a gullible fool in my opinion. 

What use is a E500 discount off the latest kitchen then? 'Bremore Pastures', Balbriggan sounds like legoland


----------



## Glenbhoy

CelloPoint said:
			
		

> They're even offering a E500 voucher if you sign within 21 days!


TBH Cello, this is not a new development, many builders have been giving away fully fitted kitchens, flooring etc for at least 4/5 years now, if the contract is signed within 21 days of the booking deposit being put down. Many of them also offer something else at completion to speed up the process.
You are right in that the offer is normally something that they've got a deal on, or can do quite cheaply themselves, but for the impoverished FTB, any little helps and is appreciated.


----------



## CelloPoint

thewatcher said:
			
		

> Whatever about the older generation,it's nothing as deep as that with the younger generation.Greed plain and simple "can't lose" etc.



Yup, we're in a market driven by greed alright. 

The question is, how soon will greed change to fear? History tells us that this can happen very rapidly indeed. I don't see any real reason why this change in sentiment will not occur and will not be rapid. Many reasons for changing sentiment have been given already along the lines of: interest rate rises, rising energy costs, change of government, stagnant rental market, poor infrastructure, corruption, rapidly increasing inventory, media hype, availability of cheap money from the european banks, Irish economic threats, economic reliance on house-builing and cheap imported labour, transient immigrant population, Irish obsession with land-owning, etc.

I have not heard any solid reasoning on here to counteract all of these very good arguments. Therefore, I can only conclude (in the absence of any solid and proportionate counter-reasoning), that the market will enevitably go fearful as the screw gets tighter and tighter and a critical mass of people begin to cop themselves on.


----------



## autumnleaf

thewatcher said:
			
		

> Whatever about the older generation,it's nothing as deep as that with the younger generation.Greed plain and simple "can't lose" etc.


 
Maybe the younger generation are just looking for somewhere to live. Old-fashioned idea, I know...


----------



## thewatcher

autumnleaf said:
			
		

> Maybe the younger generation are just looking for somewhere to live. Old-fashioned idea, I know...


 
You can't live in 2 houses or a house and a apartment,or did i miss something.....


----------



## CelloPoint

autumnleaf said:
			
		

> Maybe the younger generation are just looking for somewhere to live. Old-fashioned idea, I know...



There's no such thing as a house fairy.


----------



## Calina

autumnleaf said:
			
		

> Maybe the younger generation are just looking for somewhere to live. Old-fashioned idea, I know...



Quite a few of them are, but they can't afford suitable accommodation so quite a few of them buy what they can afford on the assumption of being able to trade up. 

It's not wise and yet it's hard not to in the face of "you can't lose on property" and "you have to get your foot on the ladder". 

If you look at what is actually being built you'll know that people are buying places that they will absolutely not be able to live in long term even if they are single. 

On the other hand, quite a lot of them are looking to get rich without actually doing any work. They will scream when they get their fingers burned.


----------



## darex

gidxl03 said:
			
		

> Stock markets have done well as economies have expanded. Oil is essential for this to happen. The trend of the last 60 years of strong stock market growth may not continue as oil reaches 200$ a barrel. At 80$ a barrel we can still fly to Italy for 50 euro. It is still dirt cheap!



Disagree with most of what you are saying gidxl03 but you could well be right on the mark with this one. We are in completely uncharted territory due to the oil situation and stocks may no longer be a good long term investment. However what hits stocks badly will hit Irish property far worse so having any investment in Irish property (except for PPR) is questionable.


----------



## autumnleaf

Calina said:
			
		

> Quite a few of them are, but they can't afford suitable accommodation so quite a few of them buy what they can afford on the assumption of being able to trade up.
> It's not wise and yet it's hard not to in the face of "you can't lose on property" and "you have to get your foot on the ladder".


 
Agree on this, I've seen it myself. I've resisted the temptation to "get on the property ladder" because at the moment I can only afford the bottom rung and I don't want to risk that falling out from under me. 



			
				gidxl03 said:
			
		

> At 80$ a barrel we can still fly to Italy for 50 euro. It is still dirt cheap!


Flying is currently dirt cheap because airline fuel is not taxed. This situation may not last.


----------



## gearoidmm

autumnleaf said:
			
		

> Flying is currently dirt cheap because airline fuel is not taxed. This situation may not last.


 
Not to mention the fact that all the major airlines lock in fuel prices for a couple of years in advance (except ryanair, but they were forced to do it recently) and as a result, we have not yet seen the real effect of rising fuel costs on the airlines.  Wait for these contracts run out and see what happens to air fares.


----------



## murray

darex said:
			
		

> Disagree with most of what you are saying gidxl03 but you could well be right on the mark with this one. We are in completely uncharted territory due to the oil situation and stocks may no longer be a good long term investment. However what hits stocks badly will hit Irish property far worse so having any investment in Irish property (except for PPR) is questionable.


 
I have (PPR) a property in Dublin worth around 600k , owe 285k only bought it 3 yrs ago. I think I should sell , get the equity safe and rent. My mortgage is 1500 per month - i could rent the same thing for 1200 per month - and I think property prices are going to decrease due to the massive supply of new property and interest rate hikes. Any opinions????


----------



## Glenbhoy

> My mortgage is 1500 per month - i could rent the same thing for 1200 per month


Tough call, you need to ascertain the interest element before you can compare rent and mortgage repayments.
If you get out now and prices increase by another 10% in the next 12 months (not an unlikely scenario) you lose 60K, would that sicken you? It might, or you could be phiposophical about it all - the danger is of course if prices go up a little more you have difficulty getting back on the property ladder again. The other things to consider are transaction costs, ie stamp duty.
Truth to tell, if you are somewhere that you're happy to stay in for 10yrs, i would not advise selling.


----------



## whathome

murray said:
			
		

> I have (PPR) a property in Dublin worth around 600k , owe 285k only bought it 3 yrs ago. I think I should sell , get the equity safe and rent. My mortgage is 1500 per month - i could rent the same thing for 1200 per month - and I think property prices are going to decrease due to the massive supply of new property and interest rate hikes. Any opinions????


 
I wish I could sell to rent.  Currently selling PPR and rental property to buy a bigger house.  Despite the advantages of renting, Mrs. Whathome will not allow it.


----------



## beattie

murray said:
			
		

> I have (PPR) a property in Dublin worth around 600k , owe 285k only bought it 3 yrs ago. I think I should sell , get the equity safe and rent. My mortgage is 1500 per month - i could rent the same thing for 1200 per month - and I think property prices are going to decrease due to the massive supply of new property and interest rate hikes. Any opinions????


 
Well I can't see rents going up and mortgages certainly will so the differential will only increase in future months


----------



## murray

whathome said:
			
		

> I wish I could sell to rent. Currently selling PPR and rental property to buy a bigger house. Despite the advantages of renting, Mrs. Whathome will not allow it.


 
So you think it is a good idea to 'leave the table' then ??  (I have a very understanding Mrs.Murray !!)


----------



## Calina

beattie said:
			
		

> Well I can't see rents going up and mortgages certainly will so the differential will only increase in future months



To be honest, I'm not sure how good a call that is. It's dependent on a lot of people who currently let properties in the short term not deciding to cash in their chips. If you're a sensible business person, you may well want to cash in your chips. 

What may be interesting is if buyers dry up, how many speculators try to offset their losses by renting out previously unoccupied property. 

I don't want to scaremonger on the rental front - I rent myself - but I wouldn't necessarily be certain that we'd avoid a blip while the property purchase market is sorting itself out.


----------



## whathome

murray said:
			
		

> So you think it is a good idea to 'leave the table' then ?? (I have a very understanding Mrs.Murray !!)


 
Yes - I think it's a good idea.  Certainly a decision not to be taken lightly and even though the market is starting to unravel, it may fall for a few years before a sustainable recovery.  You might be away from the table for a while.  As 2Pack says - there is no harm in taking a profit.


----------



## Firefly

Regarding whether you should sell at 600k depends on where the house is...ie proximity to dem phone boxes on Grafton Street and also your medium term needs...are you staying in Dublin / happy with your house...if you are, then I wouldn't sell as the high transaction costs of re-entry are the big gamble here. 
Your mortgage is 1,500 - is this IO? If not then the interest portion is comparible to the rental amount of 1,200 and not the entire 1,500.

On a side issue, can we get a list of view points as follows:
Name FIREFLY
Age   31
Marital Status MARRIED
Home Owner / Renter  OWNER
Buy a house now or not BUY 

to see if this can throw up something..even though there has been a lot of hits on this thread the contributers are a tiny number...
Firefly


----------



## murray

Glenbhoy said:
			
		

> Tough call, you need to ascertain the interest element before you can compare rent and mortgage repayments.
> If you get out now and prices increase by another 10% in the next 12 months (not an unlikely scenario) you lose 60K, would that sicken you? It might, or you could be phiposophical about it all - the danger is of course if prices go up a little more you have difficulty getting back on the property ladder again. The other things to consider are transaction costs, ie stamp duty.
> Truth to tell, if you are somewhere that you're happy to stay in for 10yrs, i would not advise selling.


 
Fair point 'Glenbhoy' - it's a top floor apartment - no lift - we are looking towards having a family..... - wont stay in an apartment for 10yrs , the plan would be ; (hope prices pull back!!) and buy a house in a year or 2.....
I really appreciate your veiwpoint, thanks.....


----------



## CelloPoint

whathome said:
			
		

> Yes - I think it's a good idea.  Certainly a decision not to be taken lightly and even though the market is starting to unravel, it may fall for a few years before a sustainable recovery.  You might be away from the table for a while.  As 2Pack says - there is no harm in taking a profit.



It would be a ballsy decision to sell your PPR and sit out a forecasted storm. Problem with property is that everyone knows you're selling (unlike a private bank account) including your family, neighbours, friends etc. - there's a lot of social pressure to be seen to be getting ahead in life and wouldn't it be awful embarrassing for middle-class-Joe to have to endure the gossip from making a bad decision?

I would say go for it. It's all relative after all and no matter what way you look at it, 600k will get you a very long way in the global property stakes.


----------



## CelloPoint

whathome said:
			
		

> Yes - I think it's a good idea.  Certainly a decision not to be taken lightly and even though the market is starting to unravel, it may fall for a few years before a sustainable recovery.  You might be away from the table for a while.  As 2Pack says - there is no harm in taking a profit.



It would be a ballsy decision to sell your PPR and sit out a forecasted storm (most people aren't in a position to do this so you're unique in this sense). Problem with property is that everyone knows you're selling (unlike a private bank account) including your family, neighbours, friends etc. - there's a lot of social pressure to be seen to be getting ahead in life and wouldn't it be awful embarrassing for middle-class-Joe to have to endure the gossip from making a bad decision?

I would say go for it. It's all relative after all and no matter what way you look at it, 600k will get you a very long way in the global property stakes.


----------



## redo

Name : REDO
Age   : 34
Marital Status : MARRIED
Owner / Renter  : OWNER
Advice : Investors sell, Trade upers buy, FTB hold


----------



## whathome

murray said:
			
		

> it's a top floor apartment - no lift - we are looking towards having a family..... - wont stay in an apartment for 10yrs , the plan would be ; (hope prices pull back!!) and buy a house in a year or 2.


 
Given this information it makes it an easier decision, I would definitely sell. It looks like you would want to move anyway so moving costs, stamp duty etc. would apply regardless.


----------



## whathome

Name : WHATHOME
Age : 34
Marital Status : MARRIED
Owner / Renter : OWNER
Advice : Investors *Sell*, Trade uppers : *Sell to rent*, FTB : *Don't Buy*


----------



## Firefly

Have to agree knowing your situation...I'd sell, but would trade up if you have the funds.

Firefly


----------



## Bedsit

Name : BEDSIT
Age : 35
Marital Status : MARRIED
Owner / Renter : NEITHER (unique situation) 
Advice : Investors *Sell*, Trade uppers : *Sell to rent*, FTB : *Don't Buy*


----------



## ecstatic

Name : ECSTATIC
Age : 26
Marital Status : SINGLE
Owner / Renter : Owner
Advice : Investors *Change Market*, Trade uppers : *Buy*, FTB : *Buy*


----------



## sandymount

Name : Sandymount
Age : 34
Marital Status : MARRIED
Owner / Renter : OWNER
Advice : Investors SELL, Trade uppers : *SELL to RENT*, FTB : *WAIT, can't say how long?*


----------



## redo

Bedsit said:
			
		

> Name : BEDSIT
> Age : 35
> Marital Status : MARRIED
> Owner / Renter : NEITHER (unique situation)
> Advice : Investors *Sell*, Trade uppers : *Sell to rent*, FTB : *Don't Buy*


Are you living at Hotel Mum and Dad ? (TM I'm an Adult, get me out of here)


----------



## Bedsit

redo said:
			
		

> Are you living at Hotel Mum and Dad ? (TM I'm an Adult, get me out of here)


No I have been allocated a house by the organization that I work for for a period of 5 years


----------



## Contrarian

Name : CONTRARIAN
Age : 29
Marital Status : SINGLE
Owner / Renter : RENTER
Advice : *EXIT/DON'T BUY*


----------



## room305

Name : ROOM305
Age : 26
Marital Status : SINGLE
Owner / Renter : OWNER
Advice : *Sell or do not buy, whichever applies.
*


----------



## CelloPoint

NAME: CelloPoint
AGE: 25
MARRIED: No
OWNER/RENTER: rent
BULL/BEAR: definite bear
ADVICE : Investors: *sell*, trader-uppers: *sell to rent* , FTB: *don't buy*
MARKET WILL: *crash* within 9 months


----------



## whizzbang

Name : whizzbang
Age : 28
Marital Status : So very SINGLE
Owner / Renter : RENTER
Advice : Investors *Sell*, Trade uppers : *Depends on equity level*, FTB : *Wait
*Outlook : Gloomy, with a large depression moving over the country in the next year to 18 months. Could lead to prolonged spells of massive debt and emmigration.


----------



## whizzbang

Bedsit said:
			
		

> No I have been allocated a house by the organization that I work for for a period of 5 years



Its not a bedsit is it? 

(Sweet gig by the way)


----------



## Neffa

CelloPoint said:
			
		

> NAME: CelloPoint
> MARKET WILL: *crash* within 9 months


 
CelloPoint,

What will be the event which will cause the market to crash? I'm very bearish but I tend towards a view of a long-drawn out correction as I think interest rates are on a gradual increase. To get a crash, we need a sharp change and I don't see where that comes from....


----------



## redo

2Pack, can you produce some stats with the user options.


----------



## whathome

Neffa said:
			
		

> To get a crash, we need a sharp change and I don't see where that comes from....


 
You don't need a sharp change - the trigger doesn't have to be a large event, sometimes it's just the straw that breaks the camel's back.  Rising interest rates are more than enough.  The market has started to turn already.


----------



## Firefly

Thanks for the replies (almost feel like I'm running the place now!). I had my own idea that the "renters" were young(er), renting and living a carefree live of debauchery (ahh the dayz), but am surprised to see quite a few in their 30s and owning houses recommending to Sell..puts a different slant on it for me entirely...

Think we might all sell and crash Bedsits gaff!

Firefly


----------



## CelloPoint

Neffa said:
			
		

> CelloPoint,
> 
> What will be the event which will cause the market to crash? I'm very bearish but I tend towards a view of a long-drawn out correction as I think interest rates are on a gradual increase. To get a crash, we need a sharp change and I don't see where that comes from....



One word: *sentiment*.

A change in sentiment will be enough imho.


----------



## sandymount

Conspiracy theory number 354:

Permanent TSB haven't released any figures for their June Price Index. Generally they release figures before the end of the next month. June figures could be interesting especially with the World Cup.  I would suspect a drop in prices.

Alternately the person who compiles the information might be on holidays.


----------



## beattie

Name : Beattie
Age : 30
Marital Status : Single
Owner / Renter : Renter
Advice : Investors sell, Trade upers hold, FTB Don't Buy


----------



## murray

Firefly said:
			
		

> Have to agree knowing your situation...I'd sell, but would trade up if you have the funds.
> 
> Firefly


 
I would seriously struggle to pay the 9% stamp duty over 635k level -if I traded up -  next level up in my area (that we really like!) is 900-1mill... out of the question for me...

Take the dosh and run??


----------



## whathome

Identifying a bubble is very difficult until it has burst. John P. Calverley is chief economist and strategist at American Express. He has produced a checklist for typical characteristics of a bubble:

- Rapidly rising prices
- High expectations for continuing rapid rises
- Overvaluation compared to historical averages
- Overvaluation compared to reasonable levels
- Several years into an economic upswing
- Some underlying reason or reasons for higher prices
- A new element, e.g. technology for stocks or immigration for housing
- Subjective "paradigm shift" (It's different this time)
- New investors drawn in
- New entrepreneurs in the area 
- Considerable popular and media interest
- Major rise in lending
- Increase in indebtedness
- New lenders or lending policies
- Consumer price inflation often subdued (so central banks relaxed)
- Relaxed monetary policy
- Falling household savings rate
- A strong exchange rate

There can be no doubt that we are experiencing a massive bubble in house prices IMO.


----------



## Calina

Name : Calina
Age : 34, almost
Marital Status : SINGLE
Owner / Renter : RENTER
Advice : Investors SELL *if you are depending on capital appreciation. If your rental yields are okay and you see this as a long term business, you may want to hold. *
Trade uppers : *Depends on what you're selling and what you're trying to buy. * 
FTB : *Only buy if you're willing to stay in the property to wait out a crash. Do not buy for a short period "to get your foot on the ladder"*


----------



## Guest107

murray said:
			
		

> Fair point 'Glenbhoy' - it's a top floor apartment - no lift - we are looking towards having a family..... - wont stay in an apartment for 10yrs , the plan would be ; (hope prices pull back!!) and buy a house in a year or 2.....
> I really appreciate your veiwpoint, thanks.....


I would recommend that you read the recent threads on empty properties as found by the CSO. Its referred to here 




> enumerators undertaking the latest census have stumbled across 275,000 vacant homes.
> 
> The Irish Independent (19.6.06) reported that 300,000 homes across the country will not be included in the latest census because there was no one at home to accept the census form.
> 
> *‘Following inquiries among neighbours, postmen and women and apartment block management companies, the vast majority of those dwellings - some 275,000 - were identified as being vacant.’
> *
> The government uses the data collected in the Census to inform policy decisions, such as infrastructure development, education and health care provision, strategic and local land use policy, even constituency boundaries. The census asks questions regarding the composition of housing accommodation; number of bedrooms, type of utilities, floor space etc. It seems that following the completion of the census we will have very sketchy or no information on 15% of the housing stock, (that 15% is sufficient to house 800,000 people based on the average household size by the way). So the census of 2006 will be unsound, more a sample than a census.
> 
> But a much more disturbing aspect of the discovery of these tens of thousands of ‘ghost homes’, is the revelation that we have more homes than we need. The housing vacancy rate in the UK is about 3% and falling while In Ireland it is 15% and probably rising (given that we will churn out an additional 90,000 units this year). It matters not one jot, incidentally, how many of these properties are available and on the market to buy or let. The fact is that they are there and can arrive on the market at any time.


My theory (predating the CSO figures ) is that:

1. Many investors piled in in the past 4 years since stamp duty changes and drove the market. 
2. Many of these are empty, they rely on capital appreciation but have not "banked" that appreciation.
3. Many do not want the hassle of renting.
4. These properties are  a massive market overhang. Despite the empties rent is static. If rented wholesale the rental market will tank
5. Their owners will cash out when the rises stop.
6. They will tank the market when they do...a year into the plateau/slump I will wager .
7. This tanking/illiquidity effect will be more marked in BTL ghettoes rather than mature residential areas, I have no idea where Murray lives.

Basically I think there is an oversupply of property in Ireland which will  become dead obvious WHEN the price rises stop . I feel that Irish landlords have feck all pricing power , rents in the IFSC area are broadly where they were 6 years ago despite inflation.  You will still pay around €1200 a month for renting that gaff in 3 or 5 years time while mortgage costs will have been higher than €1500 during most (if not all of of that time).

The bank , when you go back into the market (if you so choose) will look very favourably at someone who has €300k in cash  lodged with them. The banks will be feeling very sorry for themselves in a few years and will want quality borrowers only, thanks.   

In extremis you may even get the chance to buy back the gaff you are in now  and still have money in the bank afterwards.

                                                Name :2Pack
Age : 47 
Marital Status : MARRIED
Owner / Renter : OWNER
Advice : 
Investors SELL *if you are depending on capital appreciation only. Sell if you are in the construction business and subsidising mortgage from month to month. *
Trade uppers : *Depends on a lot of factors.* 
FTB : *Only buy now if you're top 20% of earners or will be in 5 years. Do not buy  "to get your foot on the ladder". Prepare to save 20k - 30k or so.
*


----------



## Persius

Name : Persius
Age : 33
Marital Status : Single
Owner / Renter : Renter
Advice : Investors : *no opinion (depends on circumstances)*, Trade uppers : *no opinion (depends on circumstances)*, FTB : *Don't Buy (unless willing to live there for next 7-8 years)*


----------



## fatmanknows

Never been more confident that the madness has ended. Saps galore out there (in particular the BTL brigade). The country is awash with amateur foolish greedy investors who are about to experience a hard lesson. I've forecast it before and do so again - there will be grown men crying on every corner before long. The cycle is over, to those who got in at the bottom, good luck to you, to those who burst into the party late, more the fool you.


----------



## rgfuller

Name : rgfuller
Age : 35
Marital Status : Single
Owner / Renter : Owner (Trading up)
Advice : 
Investors : *hold *(keep your property empire if you can afford mortgage).
Trade uppers : *buy *(if you can sell your existing property and can afford new mortgage+1% higher rates).
FTB : *buy house* (if you can afford mortgage+1% higher rates - because I doubt prices will drop in the places you can afford to buy).
*rent apartment* (cos I can see these prices dropping a bit over a prolonged period).


----------



## thewatcher

Name : thewatcher
Age : 30
Marital Status : SINGLE
Owner / Renter : Ex Owner (profit taking) / Soon to be renter,maybe
Advice : Investors Bank the profits, Trader uppers Depends, FTB hold off


----------



## StoppedClock

IMHO House Prices will continue to rise until banks stop lending ever increasing amounts of money, irrespective of *general* sentiment - that simple. As long as prices are not actually falling there will always be at least enough “savvy Investors” to queue in the rain for their 800 square feet of Irish paradise. However once these people can simply no longer get the mortgages the tipping point will be reached, then there will be a gradual slowdown in sales and commensurate deterioration in confidence. We all know the rest…

So far banks have achieved this exponential money supply with ever more exotic mortgage products (read slack lending criteria) and constantly made fools of people (me) predicting that the end of easy money was nigh. Now once again with the latest in a series of IRR, we have what *should* be the catalyst for an end to the increases but I heard one of the UB clowns on News talk saying that the institutions may not pass this rise on to the borrowers. I find this Interesting on two points; firstly how fat must their margins be that they do not need to pass them on and secondly they must reason that they are now in fact approaching the limit of what they can lend by extending terms, giving higher percentages, self certification etc. etc. etc.) - . My guess is they’ll try and keep life in the market for the next selling season while they quietly continue their exit from property themselves.
8th time lucky on my prediction?


----------



## whathome

Article in Moneyweek relating the the BoE rate hike yesterday and it's affect on UK house prices. Some points made are very relevant to the Irish market:

http://www.moneyweek.com/file/16373/how-will-the-interest-rate-hike-affect-house-prices.html

Rate rises are great news for First Time Buyers due to falling house prices:

"So even though first-time buyers might not be able to borrow as much, they’ll find their hard-saved deposits buy them a bigger chunk of house. Particularly when panicky buy-to-letters start offloading their portfolios as their monthly payments rise above their property's rental income."


----------



## whathome

StoppedClock said:
			
		

> 8th time lucky on my prediction?


 
8th time lucky - Yes I think so!
The end of easy money is upon us.  The banks have a responsibility to their shareholders to maximise profits, they're not in the charity business.  It would hurt their bottom line too much and affect earnings results.


----------



## thewatcher

StoppedClock said:
			
		

> , we have what *should* be the catalyst for an end to the increases but I heard one of the UB clowns on News talk saying that the institutions may not pass this rise on to the borrowers. I find this Interesting on two points; firstly how fat must their margins be that they do not need to pass them on and secondly they must reason that they are now in fact approaching the limit of what they can lend by extending terms, giving higher percentages, self certification etc. etc. etc.) - . My guess is they’ll try and keep life in the market for the next selling season while they quietly continue their exit from property themselves.


 
I heard that fool myself,who the hell do these people think they are.The whole point of having an "independent" central bank is that it is supposed to act for the good of the EU and not the vested interests.
Interest rates are rising to cool inflation,asset bubbles,excess liquitity etc. and these little fools think they can go interfering with that,it's being done for a REASON !I've a good mind to email Mr Trichet about this !


----------



## StoppedClock

Further to your post watcher does anyone know what are the rules (if any) that govern the commerical banks in relation to ECB rates?  Can they just ignore them if they are borrowing from cheaper moneymarkets elsewhere?


----------



## redo

whathome said:
			
		

> "So even though first-time buyers might not be able to borrow as much, they’ll find their hard-saved deposits buy them a bigger chunk of house. Particularly when panicky buy-to-letters start offloading their portfolios as their monthly payments rise above their property's rental income."


Clever point!


----------



## Eurofan

Name : Eurofan
Age : 31
Marital Status : SINGLE (getting married next year
Owner / Renter : Ex Owner (profit taking) / now renting at a discount
Advice : Investors ; Sell, Trader uppers ; if you can afford to, FTB ; Rent for the forseeable future, buy when you can afford (which isn't when the bank/ea/bertie etc tells you to).


----------



## gearoidmm

sandymount said:
			
		

> Conspiracy theory number 354:
> 
> Permanent TSB haven't released any figures for their June Price Index. Generally they release figures before the end of the next month. June figures could be interesting especially with the World Cup.  I would suspect a drop in prices.
> 
> Alternately the person who compiles the information might be on holidays.



http://www.finfacts.com/irelandbusinessnews/publish/article_10006779.shtml

Released to the media last week although not on the TSB website yet.

Key headlines



> *[FONT=arial, helvetica, sans-serif]Continued strong price growth in June –  average price of a house nationally now €300,000, while a Dublin house averages just  over €400,000.[/FONT]*
> *[FONT=arial, helvetica, sans-serif] [/FONT]*
> 
> *[FONT=arial, helvetica, sans-serif]National prices up 7.9% during the first  half of the year – compared to just 2.5% for same period last year.  [/FONT]*
> *[FONT=arial, helvetica, sans-serif] [/FONT]*
> 
> *[FONT=arial, helvetica, sans-serif]Strong growth across all sectors,  particularly Dublin Commuter counties, with prices  nationally up 15.2% on June 2005.[/FONT]*


----------



## Duplex

A study worth reading on international housing markets (including Ireland's).


http://irish-property-bubble.blogspot.com/


----------



## bearishbull

BEARISHBULL
25
Single
Still at home due to university(just me and parents), though will be renting in D4 or 6 soon for bargain rate.
If you bought several years ago and arent planning on moving house or moving abroad in next 15 years dont sell,If planning to trade up wait or sell now! the differential  between your current and future home will be less in absolute terms after a correction , FTB- wait and you will be rewarded (incomes arent rising much and rates are rising which will curtail any more significant rises, adopt wait and see as prices can not rise much more due to tightening borrowing capacity and reduced affordability), Investors- sell/dont buy unless capital appreciation isnt your aim in investing  (potential upside is limited and potential downside is massive. massive supply of property coming on stream and if you consider it your pension ask yourself how will the massive supply being built every year affect you in 20/30 years time in terms of rent and price) Recent FTB's- god love ya! cross your fingers...and legs ...etc


----------



## bearishbull

Duplex said:
			
		

> A study worth reading on international housing markets (including Ireland's).
> 
> 
> http://irish-property-bubble.blogspot.com/


Interesting, Irish house prices didnt rise in real terms between 1979 and 1995! Investors who bought then were in for the rental yield but have now also gotten massive capital appreciation,they deserve the capital gains!


----------



## whathome

gearoidmm said:
			
		

> Released to the media last week although not on the TSB website yet.


 
Note that the June ESRI/PTSB report relates to market activity in March/April

The ESRI/PTSB report is based on mortgages drawn down when final contracts are signed. This means that there is approx 10 week lag on sale agreed prices. Add another month for report preparation and you have data that is three to four months old at the time of release.


----------



## thefisherman

StoppedClock said:
			
		

> IMHO House Prices will continue to rise until banks stop lending ever increasing amounts of money, irrespective of *general* sentiment - that simple. As long as prices are not actually falling there will always be at least enough “savvy Investors” to queue in the rain for their 800 square feet of Irish paradise. However once these people can simply no longer get the mortgages the tipping point will be reached, then there will be a gradual slowdown in sales and commensurate deterioration in confidence. We all know the rest…
> 
> So far banks have achieved this exponential money supply with ever more exotic mortgage products (read slack lending criteria) and constantly made fools of people (me) predicting that the end of easy money was nigh. Now once again with the latest in a series of IRR, we have what *should* be the catalyst for an end to the increases but I heard one of the UB clowns on News talk saying that the institutions may not pass this rise on to the borrowers. I find this Interesting on two points; firstly how fat must their margins be that they do not need to pass them on and secondly they must reason that they are now in fact approaching the limit of what they can lend by extending terms, giving higher percentages, self certification etc. etc. etc.) - . My guess is they’ll try and keep life in the market for the next selling season while they quietly continue their exit from property themselves.
> 8th time lucky on my prediction?


my point of view exactly. nicely put,by the way.
but would point out that the banks are probably playing the end game now-such as selling off their branch offices,, encouraging more people to use internet banking,etc.-while the rest of the amateur investors are still playing the middlegame.


----------



## Duplex

bearishbull said:
			
		

> Interesting, Irish house prices didnt rise in real terms between 1979 and 1995! Investors who bought then were in for the rental yield but have now also gotten massive capital appreciation,they deserve the capital gains!


 

The study also states that in all the markets studied, house prices returned to pre boom levels (in real terms).  I expect that some of the inflation in Irish house prices in the early days of the boom was based on demographic fundamentals, the rest was speculation.  My prediction a fall in house prices of 50%-60% over five-six years.


----------



## CelloPoint

I'm having a quiet weekend this weekend (unusual) and I can't wait to see the Sunday papers. It will be very interesting to see the views of the mainstream media (as opposed to AAM). I do think though that we're slightly ahead of the game on here. 

Fair play to you 'thewatcher' for recognising the madness and going against the grain of popular opinion (or Sunday Independent-speak) - i'd say it wasn't easy to sell, but fair balls to you all the same. Also, I'm absolutely fascinated by this thread!


----------



## sonar

Wouldn't it be great if someone wrote a comedy sketch with a banker, developer and politician meeting to discuss how on earth they are going to keep the property game going as more and more people are catching on to their racket ?

Perhaps it's just my sense of humour but I would find it very funny to read them uncomfortably try to reassure each other with all the usual property cliches but knowing well that the game is almost up!

Maybe a few people could pool together a donation of cash for the best written sketch (put some of that loose credit to good use for a change) !


----------



## tententwenty

Heres a novel idea that just occurred to me. What if, despite all the good reasons to the contrary, market sentiment just doesn't swing? Interest rates go to 5 and 6 percent, the banks stop giving out large loans on good terms, the immigrants all leave and the rental market collapses? A lot of people might be forced to sell at a loss, due to high repayments, but where else could they get credit? What about all the loan consolidation companies, credit unions, other sources of funding (perhaps foreign)? Would friends and family chip in and help with repayments?

 There is no doubt in my mind whatsoever that a bubble exists, and a huge one at that. Properties are ten to fifteen times wages, average couples going to buy a house together *will* live for a decade in penury just to have a stable place to live, and there are 275,000 houses sitting empty, pushing up the market price by an enormous amount. 

But is it possible that this bubble could drag on despite everything? Ultimately the higher they go, the farther they will fall, and at the end of the day, if you can't pay, you're out, but are there other sources of easy credit that might have been overlooked?

Edit: reading back over that, I realised I have just described a gambling addicts behaviour.


----------



## murray

are you staying in Dublin / happy with your house...if you are, then I wouldn't sell as the high transaction costs of re-entry are the big gamble here. 
Your mortgage is 1,500 - is this IO? If not then the interest portion is comparible to the rental amount of 1,200 and not the entire 1,500.

In Rathgar area, on a repayment , not IO . Happy here for the mo- but 32 yrs old- looking towards having a family , in a top floor apartment - no lift etc. !


----------



## murray

JohnBoy said:
			
		

> 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.


 
Fully agree ! well put....


----------



## thewatcher

murray said:
			
		

> Fully agree ! well put....


 
There's so many in it for capital appreciation i doubt it,new estate up the road from me "for sale" *signs* going up on duplex's only just finished, there's flippers all over the shop.
If this figure for 275,000 empty properties which i find hard to believe myself is even remotely true then you can forget about a soft landing.


----------



## room305

thewatcher said:
			
		

> If this figure for 275,000 empty properties which i find hard to believe myself is even remotely true then you can forget about a soft landing.



It's true. The census enumerators make an explicit difference between a house where they couldn't get an answer and a house that is vacant. For example, they may talk to neighbours and discover nobody has lived there for over three months etc. Having spoke to several enumerators working in several different areas - many of whom did the same job during the last census - their two main comments were:

- My God, just look at how many new houses there are!
- Christ, just how many of them are empty?

I know one guy who having completed the census practically strong-armed his father into selling an investment property he owned. His thinking was that with that many vacant properties, a crash is pretty much unavoidable.

Even allowing for 10% margin of error, it is still a staggering number of empty properties. Most people are simply refusing to believe it and assume there is an error.


----------



## beattie

room305 said:
			
		

> It's true. The census enumerators make an explicit difference between a house where they couldn't get an answer and a house that is vacant. For example, they may talk to neighbours and discover nobody has lived there for over three months etc. Having spoke to several enumerators working in several different areas - many of whom did the same job during the last census - their two main comments were:
> 
> - My God, just look at how many new houses there are!
> - Christ, just how many of them are empty?
> 
> I know one guy who having completed the census practically strong-armed his father into selling an investment property he owned. His thinking was that with that many vacant properties, a crash is pretty much unavoidable.
> 
> Even allowing for 10% margin of error, it is still a staggering number of empty properties. Most people are simply refusing to believe it and assume there is an error.


 
It is an incredible figure which because it is so high most people will dismiss. What I find hard to believe is how so many investors manage to pay off more than one property. It takes an incredible amount of cash flow to service more than one loan especially if the second property is not producing any income. As property is such an illiquid asset this could further exacerbate problems further down the line if there is a herd mentality and there is a rush to the exit doors.....

I have no sympathy for these flippers as they are trying to make money in a market which they do not fully understand. I wonder will many of them cut and run in the short term or will they try and hold out for some sap to come along and bail them out at an inflated price


----------



## room305

beattie said:
			
		

> I have no sympathy for these flippers as they are trying to make money in a market which they do not fully understand. I wonder will many of them cut and run in the short term or will they try and hold out for some sap to come along and bail them out at an inflated price



Looking at anecdotal evidence from Florida, most walk out on their "risk premium" (i.e. the deposit paid to developer) if the property becomes hard to sell. They don't want to hold it for any significant length of time because it would produce cash flow problems. The developer can then sell at market value - deposit without losing out at all. However, this only exasperates problems for others trying to sell at the previous market price ...


----------



## room305

Wollie said:
			
		

> It annoys me to think that of the two big investment decisions I made in the 1990s, one to start up my own business, the other to buy a new house, the house has probably increased in value faster.  I put my whole life into one investment, while I just sat on my backside for the other, yet the one where I just sat back has probably done better.  That can't be right.



It can't be right and it isn't right. My heart bleeds for you man. It's crazy that our own house has appreciated more in two years than than both myself and my girlfriend could earn through working. No wonder people have become lazy and greedy with respect to property - they are financially rewarded for it!

Be happy that the tide will turn eventually, prepare yourself for it and try your best to prepare your kids for it too. Tell whoever has bought to try and reduce their mortgage sum as much as possible and tell anyone who hasn't bought to simply hold off.


----------



## Duplex

Well according to the Belfast Telegraph agents are reporting price drops in Dublin. 





> Despite industry sources having described the Irish property boom as "phenomenal", recent anecdotal evidence from the Irish Auctioneers and Valuers Association (IAVA) sparked controversy by suggesting some properties in popular areas of Dublin had to reduce their prices dramatically in a bid to clinch a sale.
> 
> *Fintan McNamara, IAVA chief executive, said a number of its members had reported a significant drop in some property prices.*
> "An average three-bed semi in the inner suburbs of Dublin that was selling at Easter for 700,000 (£479,956 euro) is now selling for 20,000 euro (£13,714) less," said Mr McNamara.
> 
> And those trying to sell recently constructed homes are having the same problems with the owners of a three-bed terraced house in AddisonPark, Glasnevin, who have been asked to reduce the priced by a massive 75,000 euro (£51,429) to generate interest, according to the Institute's spokesman.


 
Bit out of the blue?

[broken link removed]


----------



## room305

Duplex said:
			
		

> Bit out of the blue?



Certainly. Especially when the properties quoted are ones where you would expect there to be continued pressure - the trader-upper market. Maybe it is just a lure to get hesitant buyers to come in from the sidelines? 

Since the IAVA have been calling a soft-landing for a while now so I can only assume they actively want it to happen and are actually not seeing it happening at all.

A case of trying to talk the market out of going supernova?


----------



## whathome

room305 said:
			
		

> A case of trying to talk the market out of going supernova?


 
I think IAVI chief executive is right, *asking prices are coming down* in the trade-up market. We're trading up and regularly seeing asking prices coming down now.

Same House Example...

Old Listing from a few months back: €565,000 
[broken link removed]

New Listing this Thursday: €550,000
[broken link removed]

The market is definitely weakening.

Edit: I agree room305, they're probably trying to talk the market into a soft landing rather than a meltdown.


----------



## Hibernicatio

Would it be reasonable to assume that when the market crashes, or a period thereafter, whichever Government is in power would be under pressure to reduce re-entry costs such as stamp duty etc?


----------



## Duplex

[LEFT said:
			
		

> *Hibernicatio*[/LEFT]]Would it be reasonable to assume that when the market crashes, or a period thereafter, whichever Government is in power would be under pressure to reduce re-entry costs such as stamp duty etc?



The UK government reduced stamp duty in 1992 two years into the crash there.  Not unreasonable to assume that the Irish government would come under pressure to do the same.


----------



## bearishbull

Why does myhome leave the two different prices up on its site?

That telegraph story is just a rehash of the irish indo story a few weeks ago. Asking prices got ahead of themselves and those wanting to sell soon have be forced to curb their asking price to lure the viewers in in the quiet summer season but prices are still growing im sure. Untill i see several houses in such location sell for less than a comparable house did previously i wont beleive a correction is underway.


----------



## whathome

bearishbull said:
			
		

> Untill i see several houses in such location sell for less than a comparable house did previously i wont beleive a correction is underway.


 
Until I see several houses in such location sell for *more* than a comparable house did previously i wont believe that a correction is *not* underway.

This did not happen last summer, sentiment has changed IMO


----------



## beattie

bearishbull said:
			
		

> Why does myhome leave the two different prices up on its site?
> 
> That telegraph story is just a rehash of the irish indo story a few weeks ago. Asking prices got ahead of themselves and those wanting to sell soon have be forced to curb their asking price to lure the viewers in in the quiet summer season but prices are still growing im sure. Untill i see several houses in such location sell for less than a comparable house did previously i wont beleive a correction is underway.


 
Agree, one swallow doesn't make a summer ..... but the correction has to start somewhere and it is quite interesting that this reduction is in D9 and not somewhere beyond the Pale. I have seen many houses remain on the market in Waterford for a period of months now. I believe the asking prices have remained quite static but reality could start setting in and closing prices could be lower. It would be good to see if there are any other instances of reductions happening (I don't spend time on myhome so I can't help!)


----------



## whathome

It's really when you're active in the market that you get a clear indication of it's strength.

On Monday I'm going to accept an offer below asking.  My asking price was set at the level achieved by the previous identical property sold by the same agent in April.

Any properties that we are interested in buying currently either have no offers or offers significantly below asking.  Many of them have been on the market since before the summer quiet period.  Some houses that we lost bidding wars on have returned to the market having been sale agreed, they are now back on at their original asking price.

As a seller, I'm feeling more vulnerable but as a buyer I'm feeling far more confident.  This is a complete reversal to our position in March/April.


----------



## redo

The salient point at the moment is that people are in property chains.  Some houses in great locations (L/L/L) will sell if only people selling in not so great areas can sell.  The distance between the next rung in the property ladder is widening, from the FTB markert and the trade-up market.


----------



## redo

whathome said:
			
		

> It's really when you're active in the market that you get a clear indication of it's strength.
> 
> On Monday I'm going to accept an offer below asking.  My asking price was set at the level achieved by the previous identical property sold by the same agent in April.
> 
> Any properties that we are interested in buying currently either have no offers or offers significantly below asking.  Many of them have been on the market since before the summer quiet period.  Some houses that we lost bidding wars on have returned to the market having been sale agreed, they are now back on at their original asking price.
> 
> As a seller, I'm feeling more vulnerable but as a buyer I'm feeling far more confident.  This is a complete reversal to our position in March/April.



If I was you, I would hold out going sale agreed on your property (trade-up market, yes?) until Oct.


----------



## whathome

Sunday Business Post:

*Investors could flee buy-to-let market*
[broken link removed]

*House-price inflation set for slowdown*
[broken link removed]

*Inflation worries have forced ECB to tighten the squeeze *
[broken link removed]

Sunday Independent:
*Home-owners seek quick fix for rate rises*
http://www.unison.ie/irish_independent/stories.php3?ca=184&si=1666616&issue_id=14467

Comment from Ulster Bank boss...
"It just can't continue on. I think rising interest rates will help that and there's also one hell of a lot of supply coming onto the market"


----------



## dontaskme

Hibernicatio said:
			
		

> Would it be reasonable to assume that when the market crashes, or a period thereafter, whichever Government is in power would be under pressure to reduce re-entry costs such as stamp duty etc?


 
The Government could even come under pressure to become an active market participant. If there was a flood of houses coming onto the market, people might expect the state to step in to buy properties as social housing. This could act as an effective floor to the market.

In any case, I doubt it would be in the Government´s interest to stand idly by and to watch the market collapse.


----------



## beattie

dontaskme said:
			
		

> The Government could even come under pressure to become an active market participant. If there was a flood of houses coming onto the market, people might expect the state to step in to buy properties as social housing. This could act as an effective floor to the market.
> 
> In any case, I doubt it would be in the Government´s interest to stand idly by and to watch the market collapse.


 
When would they get involved? After the market drops 10%. Why would they get involved then if the market had further to fall. I wouldn't want my taxes to be used to prop up a market which could fall further still, that makes no sense at all so it has a good chance of happening.....


----------



## beattie

Still going strong......

*"Estate agents, unsurprisingly, continue to put a positive spin on property. Ronan O’Driscoll, a director of Hamilton Osborne King, is adamant that any trend to sell off buy-to-let properties is not widespread. “I honestly can’t think of a single example of an investor selling up. I just haven’t come across that at all. The rental market is exceptionally strong, with virtually no void periods. Investors are sitting on an income stream and have seen good growth along the way"* 

http://www.timesonline.co.uk/newspaper/0,,2770-2300403,00.html


This guy isn't reading the script.........

*"A three-bedroom semi-detached in Cork will cost you €360,000 and give you a yield of €12,000. That is only 3%, and if your mortgage is 4.25%, you’re losing money. That doesn’t make sense."*

http://www.timesonline.co.uk/newspaper/0,,2770-2300395,00.html


----------



## Marie

dontaskme said:
			
		

> The Government could even come under pressure to become an active market participant. If there was a flood of houses coming onto the market, people might expect the state to step in to buy properties as social housing. This could act as an effective floor to the market.
> 
> In any case, I doubt it would be in the Government´s interest to stand idly by and to watch the market collapse.


 
This is probably the underlying fantasy driving the Irish property bubble.....an illusion of a 'nanny state' combined with memories (?) of colonisation and rackrenters.  People who have committed themselves to property ownership will unfortunately discover the hard way that in business the more potential gain the more risk involved.  Investments can fall in value as well as rise.  _There is absolutely no reason to think "The State" will bail anyone out!!!  _As the previous poster points out this would be irresponsibly committing the taxes of some to protecting the irresponsibility of others.  However I think your remark uncovers the _irrational_ _belief  _of many latter-day property 'moguls' (or even young couples 'buying instead of renting')..........that there _is _no risk!........that _nothing _can go wrong (or if it does Nanny State will bail them out).  That is not a "market"!  Housing is a "market".


----------



## ivuernis

I don't know why this surprises me anymore but I still meet well-educated people who don't know that interest rates are harmonized across the Eurozone or who sets them.... and these are people who have mortgages to pay.


----------



## Eurofan

Marie said:
			
		

> _There is absolutely no reason to think "The State" will bail anyone out!!!  _As the previous poster points out this would be irresponsibly committing the taxes of some to protecting the irresponsibility of others.



However the only thing that will matter to the government will be _"is it a vote getter?"_.

I must admit though that we are already making exploratory plans for different places to live and settle in Europe in a few years, any move by the Irish government to make me pay for other peoples mistakes would copper-fasten that move. I know i'm not alone in this too.


----------



## bearishbull

beattie said:
			
		

> Still going strong......
> 
> *"Estate agents, unsurprisingly, continue to put a positive spin on property. Ronan O’Driscoll, a director of Hamilton Osborne King, is adamant that any trend to sell off buy-to-let properties is not widespread. “I honestly can’t think of a single example of an investor selling up. I just haven’t come across that at all. The rental market is exceptionally strong, with virtually no void periods. Investors are sitting on an income stream and have seen good growth along the way"*
> 
> http://www.timesonline.co.uk/newspaper/0,,2770-2300403,00.html
> 
> 
> This guy isn't reading the script.........
> 
> *"A three-bedroom semi-detached in Cork will cost you €360,000 and give you a yield of €12,000. That is only 3%, and if your mortgage is 4.25%, you’re losing money. That doesn’t make sense."*
> 
> http://www.timesonline.co.uk/newspaper/0,,2770-2300395,00.html


Wonder what he thinks of Dublin gross yields of 2% or less! He says he's gonna keep some as long term investments (ie:the pension) but does he not realise that in 20/30 years with the massive supply being built and likely to keep being built for those 20/30 years there will be a massive oversupply and selling or renting may be quite hard at a price he would expect,he's likely to have a lower priced asset and less rent,he should sell up and use all his capital more constructively and diversify his investments.


----------



## Duplex

dontaskme said:
			
		

> The Government could even come under pressure to become an active market participant. If there was a flood of houses coming onto the market, people might expect the state to step in to buy properties as social housing. This could act as an effective floor to the market.
> 
> In any case, I doubt it would be in the Government´s interest to stand idly by and to watch the market collapse.


 
I doubt that even Bertie would countenance this. 

1. The government have earmarked several large social housing development sites around the Greater Dublin Region. Some of these are at an advanced planning stage.

2. Not proceeding with these developments would be a blow to the building industry just as private sector demand demand wanes.

3. Many social sector tenants are already housed in private sector rental units, if the government bought distressed properties it would adversely effect an already shaky private rented sector.

4. To purchase ten thousand average housing units where social housing provision is at its lowest would cost the taxpayer €4 to 5 billion. Building a similar number on land owned by the state and at cost, might cost half this amount.

5. Buying scattered units across any region would add to management and maintenance costs, and no doubt nimby's would wish to voice their concerns about the impact of living next door to a social housing unit.


----------



## dontaskme

Duplex said:
			
		

> I doubt that even Bertie would countenance this.
> ...


 
I didn´t really put that much thought into ít as a serious suggestion. But if house prices really started to crash and burn before the next general election how many parties could make daft promises?

Last time round Fine Gael proposed gifting taxpayers´ money to people who got burned by eircom´s ipo and a lot less people were exposed to that than to the housing market.


----------



## wolfie

Any one under any illusion about our economy and housing market after reading this.?


----------



## Duplex

wolfie said:
			
		

> Any one under any illusion about our economy and housing market after reading this.?


 

_



It may sometimes be expedient for a man to heat the stove with his furniture. But if he does, he should know what the remoter effects will be. He should not delude himself by believing that he has discovered a wonderful new method of heating his premises.
		
Click to expand...

 
Indeed.

And...






In his Three Lectures on Commerce and one on Absenteeism (1835) Mountifort Longfield drew attention to the possibility that a change in the pattern of spending could bring about an unfavourable change in the structure of investment. 

Longfield pointed out that if absentee landlords spent their rents on buying French dresses and lace for their lady friends instead of investing in their Irish farms this could alter the factorial terms of trade for Ireland. A little economic reasoning indicates that a loose monetary policy could have the same effect by artificially stimulating the demand for foreign consumption goods.

Click to expand...

_


----------



## thewatcher

wolfie said:
			
		

> Any one under any illusion about our economy and housing market after reading this.?


 
Excellent Article.

To repeat: The economic and financial situation in the United States is today far worse than in 2000, when the economy's slowdown began. What's worse, monetary and fiscal policy have no ammunition left.
Bubbles Bubbles Everywhere.


----------



## SLAPPY

http://www.palmbeachpost.com/business/content/business/epaper/2006/08/07/c1bz_rawlscol_0807.html

Here's a good article on the state of the Florida property market.   I like the part about the doorman and his 3 condos.    Also, they seem to blame the Europeans and the favorable dollar/euro exchange rate for their current mess.


----------



## Calina

SLAPPY said:
			
		

> http://www.palmbeachpost.com/business/content/business/epaper/2006/08/07/c1bz_rawlscol_0807.html
> 
> Here's a good article on the state of the Florida property market.   I like the part about the doorman and his 3 condos.    Also, they seem to blame the Europeans and the favorable dollar/euro exchange rate for their current mess.



Always easier to blame someone else though, isn't it?


----------



## whathome

On the FTB rates hikes thread, Liteweight mentioned a block of apartments (100) in Sandymount that were developed and left vacant, maybe some being rented.  I've noticed a block of about 30 apartments at the entrance to Woodlawn in Santry that have been vacant for well over a year, they were never sold or rented.  Has anyone else noticed this?

I've also noticed when driving past blocks in Sandyford, Dundrum and Stepaside in the evenings that many of the individual apartments do not look like they're occupied.  Maybe the new owners are waiting for Pia Bang to put the finishing touches to interior design.


----------



## bearishbull

whathome said:
			
		

> On the FTB rates hikes thread, Liteweight mentioned a block of apartments (100) in Sandymount that were developed and left vacant, maybe some being rented. I've noticed a block of about 30 apartments at the entrance to Woodlawn in Santry that have been vacant for well over a year, they were never sold or rented. Has anyone else noticed this?
> 
> I've also noticed when driving past blocks in Sandyford, Dundrum and Stepaside in the evenings that many of the individual apartments do not look like they're occupied. Maybe the new owners are waiting for Pia Bang to put the finishing touches to interior design.


Could be developers holding on to them to sell for more a year or two down line but would have taught that any developer would want to get as much return as quick as possible to invest in his next development, a developer would get more return on 5million euro through another development than in leaving that capital tied up in apartments. Could be larege property investors who buy multiple apartments in many developments and dont rent them all for whatever reasons. Hard to fathom whats going on ,i've heard many anecdotal reports of empty apartments around dublin especially in suburbs.


----------



## phoenix_n

[broken link removed]


----------



## StoppedClock

Is everyone still on holidays? I would have thought that article would have stirred up the bears!!  
Has anyone a link to the report itself, would love to see how the_ abrubt downturn_ and _strongest warnings yet about the overdependence of the economy on construction _tallies with 
_continued strong performance of the economy saying it is one of the best worldwide.  _
Seems to be like saying that we have the fastest growning wheat crop in the world except that is is not wheat but dandelions...


----------



## room305

bearishbull said:
			
		

> Hard to fathom whats going on ,i've heard many anecdotal reports of empty apartments around dublin especially in suburbs.



My guess is that people purchase them as an investment and either do not or cannot rent them. For now they are happy to take the hit because of the capital appreciation. Certainly I am aware of at least one multiple property owner who considers letting his houses out to tenants to be "far too much bother".


----------



## room305

StoppedClock said:
			
		

> Is everyone still on holidays? I would have thought that article would have stirred up the bears!!



We probably feel like we're repeating ourselves ad nauseum. I doubt any of the bulls will pay this report much attention. None of the previous warnings have had any effect - ECB, ESRI, CB and of course, the IMF.

They will say that "dem der economists" have been warning this for years but have yet to rumble that the Irish have discovered a perpetual money making machine called the "property boom". Where inflation is good and a lifetime of debt is a small price to pay for a house in Kinnegad.

If a safety inspector repeatedly warns that a mineshaft isn't safe, the workers would take little solace in the fact that "he's been warning that for years and the mine hasn't caved in yet".


----------



## StoppedClock

room305 said:
			
		

> My guess is that people purchase them as an investment and either do not or cannot rent them. For now they are happy to take the hit because of the capital appreciation. Certainly I am aware of at least one multiple property owner who considers letting his houses out to tenants to be "far too much bother".


 
Absolutely agree and know many such investors. In fairness in their position I would do the same, these were obviously bought purely for speculation so why complicate the buy low, sell high plan. 

What should be worrying for these people is that this is so widespread... 275,000? obviously not...
but even if a 1/10 of these vacant properties are CBATL (Couldn't be arsed to let) that is still 25K+ units which are explicitly being held to be quickly sold at thew first sign of weakening...


----------



## whizzbang

room305 said:
			
		

> If a safety inspector repeatedly warns that a mineshaft isn't safe, the workers would take little solace in the fact that "he's been warning that for years and the mine hasn't caved in yet".



And think of all the coal the guys who refused to work there missed out on! Ejits!...


----------



## CelloPoint

whizzbang said:
			
		

> And think of all the coal the guys who refused to work there missed out on! Ejits!...



The canary is dying lads. The gold mine will explode if you don't get out quick. The greedy fools will risk everything for a few nuggets. Not sure if there'll be enough room on the elevator to the surface though.


----------



## liteweight

room305 said:
			
		

> My guess is that people purchase them as an investment and either do not or cannot rent them. For now they are happy to take the hit because of the capital appreciation. Certainly I am aware of at least one multiple property owner who considers letting his houses out to tenants to be "far too much bother".



In Sandymount, the builder (think it was McInerney but not sure) held on to the apartments.  He is advertising them for rent but they stood empty for at least a year. Why he's deciding to rent now..I don't know.

In Ringsend, a small builder built an apartment block off South Lotts Road and also kept them. These are now rented. I'm told that Liam Carroll aka Danninger, Fabrizia, Zoey, also frequently holds on to a block for himself. I don't know how true this is.

Another reason lots of apartments stand empty is that while owner/occupiers want to get in as quickly as possible, investors like to hold off on drawing down a mortgage for as long as possible. 

Perhaps builders also think the housing boom is over or at least, the building boom. If buyers begin to hold off buying in case the market drops, they'll still need somewhere to live, so perhaps the major builders are adding another string to their bow and becoming landlords? My guess is that its probably something to do with tax.


----------



## CelloPoint

Bear in mind though that the rental yield for somone who built the place from stratch (with all the tax benefits) is much much higher than your average joe public who buys off plans in the marketing suite.

If the builder (or his mate) also runs the apartment complex management company, he stands to trouser 2 or 3 grand from each unit every single year.

So in this sense, I'd say there's still relatively good yield out there for builders cum landlords.


----------



## room305

liteweight said:
			
		

> My guess is that its probably something to do with tax.



Another factor for developers is the possibility of further development in an area. Many developers hold on to properties in a recent development - thereby gaining a seat on the resident's association, which is useful should the residents be considering objecting to any further plans the developer may have.

However, what I think most likely is that they are hanging on to properties for capital appreciation purposes. They'll sell the bulk of the properties but they seem to want to always hang onto a few to sell at an inflated price a year or two later. In many respects it doesn't make sense (surely the return on investment would be higher if they sold and ploughed the money into further development) but I think it is happening all the same. Perhaps the simply like to be able to tell people "Sure, I sold three of the houses a year later and they'd gone up €20k each!"

Also (and this is only something that has just occured to me) people buying houses in a new development often take assurance from a developer holding onto property in an area. It implies they are getting a bargain (i.e. the developer sees enormous capital appreciation potential) and that the houses are built to a high standard.


----------



## liteweight

room305 said:
			
		

> Another factor for developers is the possibility of further development in an area. Many developers hold on to properties in a recent development - thereby gaining a seat on the resident's association, which is useful should the residents be considering objecting to any further plans the developer may have.



True, Danninger are applying to put more floors on top of one of their recent developments (complex already complete) and I doubt the residents will be happy.



			
				room305 said:
			
		

> However, what I think most likely is that they are hanging on to properties for capital appreciation purposes. They'll sell the bulk of the properties but they seem to want to always hang onto a few to sell at an inflated price a year or two later. In many respects it doesn't make sense (surely the return on investment would be higher if they sold and ploughed the money into further development) but I think it is happening all the same. Perhaps the simply like to be able to tell people "Sure, I sold three of the houses a year later and they'd gone up €20k each!"



I think your ordinary Joe Soap investor is more likely to have this conversations. Builders must surely talk in millions!!



			
				room305 said:
			
		

> Also (and this is only something that has just occured to me) people buying houses in a new development often take assurance from a developer holding onto property in an area. It implies they are getting a bargain (i.e. the developer sees enormous capital appreciation potential) and that the houses are built to a high standard.



Very, very true!! I've overheard this type of conversation myself.


----------



## CelloPoint

liteweight said:
			
		

> True, Danninger are applying to put more floors on top of one of their recent developments (complex already complete) and I doubt the residents will be happy.


What happens if you've already signed on the dotted line for a "penthouse"?!


----------



## liteweight

CelloPoint said:
			
		

> What happens if you've already signed on the dotted line for a "penthouse"?!


Funny you should mention that...they never advertised top floor apartments as penthouses although if I'd bought on the top floor, I would have assumed that there'd be no one above me!

Perhaps they didn't sell the top two floors at all because they knew they had other plans. In doing some research, I've found Danninger to be good in that they don't put apartment blocks up for sale until work is near completion. That means that, although you have builders on site, the grounds, public areas etc. are finished pretty nicely before you move in.  For the builder, it means that he's selling at today's rate, rather than two years ago off plans.


----------



## Guest107

room305 said:
			
		

> Another factor for developers is the possibility of further development in an area. Many developers hold on to properties in a recent development - thereby gaining a seat on the resident's association, which is useful should the residents be considering objecting to any further plans the developer may have.


No, the builder controls the income stream from the property management company as long as the last unit remains ' unsold' . This is a uniquely Irish problem may I add. 

Once the last unit is 'sold' (if ever) the residents may organise the property management themselves, but not till then.


----------



## whathome

*ECB's Liebscher Says Ready to Raise Rates to Counter Inflation*
http://www.bloomberg.com/apps/news?pid=20601087&sid=aXMZeJMAZvNs&refer=home

"Upward risks to price stability haven't receded but rather worsened"


----------



## homeowner

2Pack said:
			
		

> No, the builder controls the income stream from the property management company as long as the last unit remains ' unsold' . This is a uniquely Irish problem may I add.
> 
> Once the last unit is 'sold' (if ever) the residents may organise the property management themselves, but not till then.



I dont think this is entirely true.  In my apt complex the builder still ownes 6 of the units and we are in the process of removing him from the board of directors as he didnt turn up to the AGM.  They are the rules of our management company, if you dont turn up to get voted back in you are removed as a director unless no one objects to you staying on.  We all objected to him staying on so he is going to be removed.  

He also hasnt paid the management fee for the past 18months on those 6 units and we have a solicitor after him for the money plus interest.  At our last committee meeting he had replied saying the money would be sent on immediately. 

I dont think he cares that he is going to be removed as a director.


----------



## CelloPoint

homeowner said:
			
		

> I dont think this is entirely true.  In my apt complex the builder still ownes 6 of the units and we are in the process of removing him from the board of directors as he didnt turn up to the AGM.  They are the rules of our management company, if you dont turn up to get voted back in you are removed as a director unless no one objects to you staying on.  We all objected to him staying on so he is going to be removed.
> 
> He also hasnt paid the management fee for the past 18months on those 6 units and we have a solicitor after him for the money plus interest.  At our last committee meeting he had replied saying the money would be sent on immediately.
> 
> I dont think he cares that he is going to be removed as a director.



Would be very interesting to see how that one pans out. I'd say it's not so simple (nor cheap) to eject a director who owns 6 units.

These are the very reasons I would hate to live in an apartment complex/managed estate.


----------



## Bedsit

*Irish Banks and Savings

*Would I be correct in assuming that there is a maximum to the amount of money that a bank would be obliged to return to its customers from their deposit/savings accounts in the case of a banking crisis?

Also is there a prospect of such a collapse happening in the Irish market given the fact that even though there has been a lot of bad news from the UK in the past week, there does not seem to be too much concern all around.

Finally, would it be prudent at this stage to open a couple of additional accounts and spread one's savings?


----------



## SteelBlue05

Ok, calm down a bit, the banks are not going to collapse!


----------



## homeowner

CelloPoint said:
			
		

> Would be very interesting to see how that one pans out. I'd say it's not so simple (nor cheap) to eject a director who owns 6 units.
> 
> These are the very reasons I would hate to live in an apartment complex/managed estate.



From what the management company tell us we have to file a director's form (?) with CRO and he wont be listed on the next one we file.  We have appointed two more people in place of him and his partner.  He cant object, we have a majority and the complex is finished so he has no legal right to be on the board.  No one voted him in and he didnt turn up to the AGM.  The rules are the same for any Ltd company.


----------



## whathome

With interest rates on savings improving all year, potential buyers might be encouraged to avoid a weakening property market and save more for a larger deposit instead. 

Bank of Scotland (Ireland) now offering 4.5% on a regular savings account!


----------



## CelloPoint

homeowner said:
			
		

> From what the management company tell us we have to file a director's form (?) with CRO and he wont be listed on the next one we file.  We have appointed two more people in place of him and his partner.  He cant object, we have a majority and the complex is finished so he has no legal right to be on the board.  No one voted him in and he didnt turn up to the AGM.  The rules are the same for any Ltd company.



Still, sounds expensive, and you'll have to pay for it out of your annual fee.  Maybe the builder has made his money and now lives in Spain and couldn't be bothered with petty politics of residents' committees.


----------



## room305

2Pack said:
			
		

> No, the builder controls the income stream from the property management company as long as the last unit remains ' unsold' . This is a uniquely Irish problem may I add.



Surely a builder would be better off concentrating on building rather than getting involved in property management? They will need to look after the area and chase people up for money, so would the income stream make it worthwhile (especially if you factor in the lost revenue from not selling units that could be sold)?

That said, there is little that could surprise me about the property market at this stage.


----------



## whathome

One auctioneer has resorted to "Price on Application" to hide reductions in asking price.

Original price was €760,000 which can be seen on google's cache of daft
Their own website shows two listings for the same house, one at POA and the other at €740,000

The house has been re-advertised on myhome as POA:
[broken link removed]=


----------



## CelloPoint

whathome said:
			
		

> google's cache


A tool we'll find very useful indeed for comparing prices here on AAM! The estate agents will find it hard to hide away from technology!


----------



## phoenix_n

whathome said:
			
		

> With interest rates on savings improving all year, potential buyers might be encouraged to avoid a weakening property market and save more for a larger deposit instead.
> 
> Bank of Scotland (Ireland) now offering 4.5% on a regular savings account!


 
Thats a bloody good rate and knocks northern rock out of the water!. Its even close to my staff special deposit rate of 5%.


----------



## phoenix_n

whathome said:
			
		

> One auctioneer has resorted to "Price on Application" to hide reductions in asking price.
> 
> Original price was €760,000 which can be seen on google's cache of daft
> Their own website shows two listings for the same house, one at POA and the other at €740,000
> 
> The house has been re-advertised on myhome as POA:
> [broken link removed]


 
I think this is where the thread should concentrate on. What is the market saying. I know of a house across from me which still has no offers on it. It would have been snapped up earlier this year.


----------



## whathome

phoenix_n said:
			
		

> What is the market saying


 
It's happening a lot lately but it's not easy to spot.
Here's another one showing asking price drop of €22,000
This did not happen last summer!

Original listing from google cache : €*620,000*


New Listing : €*598,000*
http://www.daft.ie/searchsale.daft?search=1&selected_agent=&id=81085&s%5Bagent_id%5D=196&s%5Bp%5D=rpxstvyu


----------



## homeowner

whathome said:
			
		

> One auctioneer has resorted to "Price on Application" to hide reductions in asking price.
> 
> Original price was €760,000 which can be seen on google's cache of daft
> Their own website shows two listings for the same house, one at POA and the other at €740,000



That isnt necessarily a bad thing.  If the house at 760K was well over that other houses have sold for in that area then it wont sell.  It doesnt mean that prices are declining, maybe 740K is what the last house sold for, so for that road it isnt seen that there is a price decline.

I have gone sale agreed on my apartment and the estate agent put a very conservative asking price on it, considering what other apts in the area were asking for.    I queried him about it and he said that it will find its own level in the market.  If there is someone out there who wants it they will pay whatever they can to get it.  Turns out he was right, it sold for 85K more than what he priced it at.  He wasnt saying that the original price was wrong, he just thought that it was a good market price, but you cant account for someone really wanting it and pushing up the bidding.  

A drop in an asking price, isnt necessarily a decline in prices for that area.


----------



## beattie

phoenix_n said:
			
		

> I think this is where the thread should concentrate on. What is the market saying. I know of a house across from me which still has no offers on it. It would have been snapped up earlier this year.


 
Is it an investors house or is it a PPR do you know? If it is the former it will be quite telling if they accept a bid below asking.

Austin Hughes was on Newstalk at lunchtime, he was not impressed by the IMF report!!!! He wasn't as bullish on property as he has been before. The interviewer gave him free reign to propagate his views though. He was too weak to take him on. The other person was from the Irish Homebuilders association (I think). Talk about a balanced discussion.............


----------



## whathome

homeowner said:
			
		

> A drop in an asking price, isnt necessarily a decline in prices for that area.


 
It's a relatively new phenomenon and certainly not a good sign for the health of the market.  If houses were priced too high previously, the market used to catch up and take them out.  Not happening anymore.


----------



## StoppedClock

whathome said:
			
		

> It's happening a lot lately but it's not easy to spot.


 
How did you spot it?


----------



## whathome

StoppedClock said:
			
		

> How did you spot it?


 
I've a good memory when it comes to prices and as we're selling and buying at the moment, I'm on myhome & daft a lot!


----------



## sandymount

whathome said:
			
		

> It's happening a lot lately but it's not easy to spot.
> Here's another one showing asking price drop of €22,000
> This did not happen last summer!
> 
> Original listing from google cache : €*620,000*
> 
> 
> New Listing : €*598,000*
> http://www.daft.ie/searchsale.daft?search=1&selected_agent=&id=81085&s%5Bagent_id%5D=196&s%5Bp%5D=rpxstvyu



Funny thing is in the "*Try financing this property with..." *section. It had lower repayments at the 620,000 price. Interest rates are slowly starting to have an effect.


----------



## phoenix_n

sandymount said:
			
		

> Funny thing is in the "*Try financing this property with..." *section. It had lower repayments at the 620,000 price. Interest rates are slowly starting to have an effect.


 
Yes but it not just the interest rates that is having an affect. Its the 'interest' in property speculation is waning. If a person can get 4.5% in bnk of scotland why risk returns of 3-4% on property when there is a risk to your original capital. 

I'd love to know why real-estate agents are thinking(rather than saying). Property is their business and they know what the market sentiment is out there at the moment.


----------



## whathome

Do a myhome search on Monkstown or Ballsbridge.  Notice all of the fabulous €1M + properties that failed at auction now wallowing in private treaty.  Again - this did not happen last year.


----------



## room305

whathome said:
			
		

> It's a relatively new phenomenon and certainly not a good sign for the health of the market.



An element of realism on the part of "investors" might be a fantastically healthy sign for the market but I await further developments with great interest. I doubt we've seen the last chapter in the great Irish property price explosion just yet.


----------



## homeowner

Does anyone know what the predictions are for the rest of the year for property market?  Have "they" said what the expected growth is for the last quarter?


----------



## Persius

I've been contacted by estate agents a couple of times over the past month. They were asking _me_ if _I_ was interested in viewing some properties. This didn't happen in May or June when I was activly ringing the EAs. Now this could just be due to the slow summer. It'll be interesting to see if I still get calls in September.


----------



## Raskolnikov

phoenix_n said:
			
		

> Yes but it not just the interest rates that is having an affect. Its the 'interest' in property speculation is waning. If a person can get 4.5% in bnk of scotland why risk returns of 3-4% on property when there is a risk to your original capital.
> 
> I'd love to know why real-estate agents are thinking(rather than saying). Property is their business and they know what the market sentiment is out there at the moment.


Herd mentality.


----------



## phoenix_n

Raskolnikov said:
			
		

> Herd mentality.


 
Or Pyramid schemes.


----------



## whathome

Asking prices are dropping in many areas.

Here's another two for you - southside this time. Myhome doesn't always cache on google but the mapping section sometimes does!

Dundrum, Original listing : €890,000


New listing €850,000 - a price *reduction *of €40,000
[broken link removed]=

*-------------------------------------------------*

Shankill, Original listing €645,000 


New listing €635,000 a price *reduction *of €10,000
[broken link removed]=


----------



## homeowner

whathome said:
			
		

> Asking prices are dropping in many areas.
> 
> Here's another two for you - southside this time. Myhome doesn't always cache on google but the mapping section sometimes does!
> 
> Dundrum, Original listing : €890,000
> 
> 
> New listing €850,000 - a price *reduction *of €40,000
> [broken link removed]


 

I live in dundrum, I know where that house is.  6 months ago  850K would have been a huge price to pay for that house never mind 890K.  IMO 850K is probably one of the highest prices for a house in that estate.  So while it looks like a reduction in asking price it isnt compared with prices in that estate 6 months ago.

Possible reason for reduction in price from 890K is that there is a halting/traveller site going in right near that estate, if it isnt there already.  Alot of people have sold there in college park way because of that but it doesnt seem to be effecting prices too much.  There is also a new block of apartments going in beside the estate too (dundrum point), in front of the halting site.....record prices being asked, see this thread http://www.boards.ie/vbulletin/showthread.php?p=51812014

I know what you are saying about prices appearing to drop, but what is happening is more like the increase in price is getting smaller, not that the price is dropping....if that makes sense.


----------



## room305

whathome said:
			
		

> Asking prices are dropping in many areas.


 
How do these asking prices compare to houses previously sold in the area (i.e. is it the case that the sellers vastly over-estimated how much the property was worth)?

It would also be interesting to note what the final selling price ends up at. They may be dropping the price to provoke interest (and consequently a bidding war) with the final selling price pushed up beyond the original asking price.

What would be most useful would be if we had a reliable way to track inventory. Rising inventory is surely the most reliable sign of a slowdown in the market.

But please, please no meaningless daft numbers ...


----------



## bearishbull

whathome said:
			
		

> Asking prices are dropping in many areas.
> 
> 
> New listing €850,000 - a price *reduction *of €40,000
> New listing €635,000 a price *reduction *of €10,000


 
People could be more eager to sell while buyers are not so keen, doesnt mean much yet,in a months time we'll know what the autumn selling season is like, i wouldnt be suprised if we get another final spurt of price growth as people panic and buy before higher interest rates reduces amount they can borrow.Never underestimate the irrationality of a bubble market .even if prices are 10-20 % higher by next summer they will go no higher than that for many years(restricted borrowing,less affordability,renting even better value, world economic slowdown)


----------



## whathome

bearishbull said:
			
		

> People could be more eager to sell while buyers are not so keen, doesnt mean much yet


 
Well as I've said many times before, this is exactly what happened when prices dropped in 2001.  I was active in the market then also.

It does point to a change in sentiment.  With interest rates now 1% higher than they were nine months ago, a final spurt looks very unlikely at this stage.


----------



## bearishbull

room305 said:
			
		

> How do these asking prices compare to houses previously sold in the area (i.e. is it the case that the sellers vastly over-estimated how much the property was worth)?
> 
> It would also be interesting to note what the final selling price ends up at. They may be dropping the price to provoke interest (and consequently a bidding war) with the final selling price pushed up beyond the original asking price.
> 
> What would be most useful would be if we had a reliable way to track inventory. Rising inventory is surely the most reliable sign of a slowdown in the market.
> 
> But please, please no meaningless daft numbers ...


 
Im hoping the media (well those that arent completley biased and in property markets pocket) will get the inside information from estate agents etc when inventories start building up and houses dont shift at the highest prices identical houses sold at earlier in the year, this could be next month or if may not be for a year but it will happen. Its a good story and i'd say the indo and examiner will be eager to get the info,plus people working in industry will tell friends etc of slowing/falling amrket and it will get around very quickly in ireland.


----------



## whathome

homeowner said:
			
		

> IMO 850K is probably one of the highest prices for a house in that estate.


 
Oh really?  What about the one listed at the bottom of this cached page for €1,400,000.  


I take your point that rises may not be as strong but that's what everyone thinks at the tipping point in a bubble market.


----------



## StoppedClock

In fairness the 1.4m is a 5 bed,  that said doubt if the extra room makes up for the 510k drop.


----------



## room305

whathome said:
			
		

> I take your point that rises may not be as strong but that's what everyone thinks at the tipping point in a bubble market.



Actually, typically in a bubble market the rises are strongest at the end as the last batch of fools jumps in at any price. It is only then that everybody realises there is no greater fool to sell to and everyone trys to get out at once leading to a crash.

A slowdown in growth rather than a massive final upward spike might be postive as it means a crash is less likely. I'll reserve judgement until Sept/Oct but I think we'll see a major jump in prices before the end.


----------



## StoppedClock

room305 said:
			
		

> I'll reserve judgement until Sept/Oct but I think we'll see a major jump in prices before the end.


 
But did we not see a(n) (unexpected) major jump in Spring sales?


----------



## phoenix_n

If you look at the market logically something like [broken link removed] shows that we are in for a big correction.


----------



## homeowner

whathome said:
			
		

> Oh really?  What about the one listed at the bottom of this cached page for €1,400,000.
> 
> 
> I take your point that rises may not be as strong but that's what everyone thinks at the tipping point in a bubble market.



But thats a 5 bed house.  You posted a link to a 3 bed house.  I meant a record for a similar house, come on you cant compare the prices of a 3 bed with a 5 bed.


----------



## homeowner

phoenix_n said:
			
		

> If you look at the market logically something like [broken link removed] shows that we are in for a big correction.



Lol, since when did logic come into it.

That does seem crazy, but I bet someone will buy it


----------



## StoppedClock

homeowner said:
			
		

> But thats a 5 bed house. You posted a link to a 3 bed house.


 
I believe they were a 5 and a 4 not a three.


----------



## homeowner

StoppedClock said:
			
		

> I believe they were a 5 and a 4 not a three.



Sorry, typo!


----------



## phoenix_n

homeowner said:
			
		

> That does seem crazy, but I bet someone will buy it


 
Not so sure anymore.


----------



## whathome

StoppedClock said:
			
		

> But did we not see a(n) (unexpected) major jump in Spring sales?


 
Absolutely agree - the market went completely crazy in Feb/March. I think that was the final spurt.

There's another major factor to consider. The "hangers-on"

Everyone we bid against during the year were "hanging on" to their existing house to trade up. Our bank virtually pleaded with us to hang on to our existing property. This created a temporary shortage in the market during the spring. Hangers-on will be far less likely to hang on going forward, pushing prices lower. Hanging-on created huge froth and that resulted in the final spurt.


----------



## bearishbull

phoenix_n said:
			
		

> If you look at the market logically something like [broken link removed] shows that we are in for a big correction.


 Drumcondra *Dublin 3  *The map disagrees!
_Excellent rental potential_ Wonder will it even cover half the interest on an interest only mortgage and the spending of a fortune renovating it and on stamp duty?


----------



## room305

phoenix_n said:
			
		

> If you look at the market logically something like [broken link removed] shows that we are in for a big correction.



 Wow! What a bargain at only half a mil. I love the look of the landscaped garden. Yes, there is definitely a big correction ahead!

I'd just be surprised if the correction begin as price growth moderation. I would have expected a huge spike followed by a complete absence of buyers for several months. After which we will see a long brutal period of correction dragging out for many years.

Not ruling out the possibility of the spike having occured but I haven't noticed any real change of sentiment outside of this thread.


----------



## homeowner

Apologies if someone has already made this point, but if interest rates are going to rise even more before christmas, will potential buyers not be rushing to get into the market now while they will still qualify for higher mortgages than wait till next year thus causing a bit of a surge towards the end of the year?


----------



## room305

homeowner said:
			
		

> Apologies if someone has already made this point, but if interest rates are going to rise even more before christmas, will potential buyers not be rushing to get into the market now while they will still qualify for higher mortgages than wait till next year thus causing a bit of a surge towards the end of the year?



Walk2dewater I believe first made this point, dubbing it the "race against rates". Certainly, in the U.S. the initial rate rises were seen as inflationary from a housing perspective precisely because of this phenomenon.


----------



## whathome

homeowner said:
			
		

> Apologies if someone has already made this point, but if interest rates are going to rise even more before christmas, will potential buyers not be rushing to get into the market now while they will still qualify for higher mortgages than wait till next year thus causing a bit of a surge towards the end of the year?


 
That point has been made several times but since rates have already risen by 1%, it's probably too late for people to borrow as much as buyers in the spring.  As a result, prices will be lower than in the spring.


----------



## phoenix_n

homeowner said:
			
		

> Apologies if someone has already made this point, but if interest rates are going to rise even more before christmas, will potential buyers not be rushing to get into the market now while they will still qualify for higher mortgages than wait till next year thus causing a bit of a surge towards the end of the year?


 
Isnt the next rate increase in Sept. Just in time for the 'expected' season to start again.


----------



## StoppedClock

homeowner said:
			
		

> Apologies if someone has already made this point, but if interest rates are going to rise even more before christmas, will potential buyers not be rushing to get into the market now while they will still qualify for higher mortgages than wait till next year thus causing a bit of a surge towards the end of the year?


 
Fair point and agree it is likely, but my GOD what is the mentality of these people, do they think:

I must get a mortgage now as I am fully expecting a rate rise and I want to make sure that I borrow even more than the unbelieveablly irresposnible banks would be preapred to lend me once the rise actually kick in.

They bloody well deserve it!!


----------



## whathome

room305 said:
			
		

> Walk2dewater I believe first made this point, dubbing it the "race against rates". Certainly, in the U.S. the initial rate rises were seen as inflationary from a housing perspective precisely because of this phenomenon.


 
That is because US buyers generally lock rates for the total duration of their mortgage. Variable (adjustable) rate mortgages (ARM's) are a recent arrival to the US market. So people rush to lock in a low rate. Variable rates are dominant in Ireland so the "race against rates" is less likely to have as much of an effect here.


----------



## Raskolnikov

If I owned a home, I would most definitely leave it up on daft permanently at 10-15% above it's market value. If some poor sap went along and bought it, I'd simply buy back into the market and pocket the profit. My point? There's nothing stopping anyone (especially in a hugely volatile S. Dublin market) from doing the same.


----------



## Guest107

phoenix_n said:
			
		

> If you look at the market logically something like [broken link removed] shows that we are in for a big correction.


Thats right behind the Cusack stand on the North Strand side. Its either in Marino or in North Strand not Drumcondra at all and the auctioneer knows that well .

Them housheens were €20k about 20 years ago .


----------



## Calina

A couple of things occur to me. How do you settle if your house is permanently on sale and people want to see it? House viewings are a nuisance. 

Second thing occurs to me: is it a home you want or a get rich scheme? See, I don't have a lot of sympathy for people who get burned in the coming correction (because people will), but I have more compassion for those who actually want to set up a home for themselves than I do for those who are looking to get easy money. 

Housing has an intrinsic purpose of providing shelter. Unfortunately, in Ireland of late, its primary purpose has been wealth generation. This in turn causes other problems which are going to be difficult to rectify. A lot of housing hasn't had shelter as its main remit, but short term profit. A lot of apartment blocks have gone up and to be honest I can't see all of them lasting out their 99 year leases.


----------



## Raskolnikov

phoenix_n said:
			
		

> Isnt the next rate increase in Sept. Just in time for the 'expected' season to start again.


Unlikely, October and December are the current forecasts for rate hikes.


----------



## CelloPoint

room305 said:
			
		

> Wow! What a bargain at only half a mil. I love the look of the landscaped garden. Yes, there is definitely a big correction ahead!
> 
> I'd just be surprised if the correction begin as price growth moderation. I would have expected a huge spike followed by a complete absence of buyers for several months. After which we will see a long brutal period of correction dragging out for many years.
> 
> Not ruling out the possibility of the spike having occured but I haven't noticed any real change of sentiment outside of this thread.



Have to disagree. There were several articles in the Business Post over the weekend. 

[broken link removed]

[broken link removed]

The warning signs are there. And besides, once the saps read it in the Sindo (indeed the Sunday Business Post), it'll be too late. The ladz are all sitting in their villas in Marbella and driving their Maybachs.

It may be the "silly-season", but this Irish housing market stuff is deadly serious and should not just be passed of as "silly-season doom-mongering". I'd say many a commuter will not be able to face another winter of 4 hours a day being wasted in a train carriage. They will think they're being clever by selling "before the imminent pop" - most of them will probably leave it too late as they'll wait until the last minute to get out of the gold mine, at which stage the elevator to the surface will be full.

Anyway, what to you think of this boyo, Noel Ahern, coming out with stuff like: "interest rate painless": [broken link removed]

And even greater clowns over in the ESB (despite their 77k average annual salaries) messing with the economy by supplying Intel not with electricity, but with power cuts:
[broken link removed]


----------



## StoppedClock

CelloPoint said:
			
		

> FROM :Anyway, what to you think of this boyo, Noel Ahern, coming out with stuff like: "interest rate painless": [broken link removed]


 

_"Ahern said he had yet to meet a constituent who had not been able to handle the rate increases"_

That's cos there were't too many constituents in the FF tent in Galway!!


----------



## Raskolnikov

Calina said:
			
		

> A couple of things occur to me. How do you settle if your house is permanently on sale and people want to see it? House viewings are a nuisance.


My post was made in half-jest. I personally wouldn't want the hassle of having my house on sale permanently; but if someone came in with an offer of 10-15% above it's market value, I'd ate the hand off them!


----------



## whathome

I love the Sunday Business Post guide to TrichetSpeak...

"Borrowers, be afraid. Be very afraid!"

[broken link removed]


----------



## summerhill

Any of the bank's passed on the latest interest rate increase to mortgage holders yet??? Any indication as to when it will happen?


----------



## whathome

Here's another price drop in Beaumont, D9. A friend of mine (not me - honestly) dropped out of bidding on an identical one of these at €610,000 in April, it has since returned to the market at 585k. These are commodity houses, there are about 400 of them in the estate.

Original price €570,000


Reduced price €550,000
[broken link removed]=


----------



## CelloPoint

summerhill said:
			
		

> Any of the bank's passed on the latest interest rate increase to mortgage holders yet??? Any indication as to when it will happen?



That's another good point. Can't remember where I saw it (boards.ie or here on AAM), but is there any evidence that the banks are not passing on the rises to their customers? If this is the case, the Irish banks are basically giving 2 fingers to the ECB, and it's like saying "to hell with the long-term future of the Irish economy, we're going to milk the tiger for every last drop of blood" and "we know better than the ECB". Interest rates for Ireland should have increased years ago and we should be welcoming rate increases!!! It's too late though, and the short-term gain associated with a price spike is more favourable (from a bank's perspective).


----------



## phoenix_n

whathome said:
			
		

> Reduced price €550,000
> [broken link removed]


 
Before i got to the end i knew which EA was selling it. Why THEY ALWAYS HAVE TO ADVERTISE WITH CAPITAL LETTERS is beyond me. So bloody annoying. (dont they know its akin to shouting)

(p.s. You gotta hand it to those who sold at the start of the year. They made a killing.)


----------



## Calina

whathome said:
			
		

> Here's another price drop in Beaumont, D9. A friend of mine (not me - honestly) dropped out of bidding on an identical one of these at €610,000 in April, it has since returned to the market at 585k. These are commodity houses, there are about 400 of them in the estate.
> 
> Original price €570,000
> 
> 
> Reduced price €550,000
> [broken link removed]=



You have got to be joking me? People were spending 600K plus in Collinswood?

Oh My God. That's insane. I'm glad I didn't look, I'd have been sick.


----------



## StoppedClock

phoenix_n said:
			
		

> (p.s. You gotta hand it to those who sold at the start of the year. They made a killing.)


 
I'm lovin' the sentiment but just before I start making smug phone calls and marching around the office yelling "I told you so" can you please confirm that we have peaked and that the crash is currently underway?


----------



## whathome

Calina said:
			
		

> You have got to be joking me? People were spending 600K plus in Collinswood?


 
That one went sale-agreed but didn't go through, came back on the market about a month later. It's been back on for months now, no buyers.


----------



## Calina

Going rent in Collinswood is 1400-1500 (depending on how lucky). Average mortgage on 550K is around 2200 (cap repayments included). I rented in Collinswood for a while, and a fair whack of it was rented. I wonder if that's still the case.


----------



## homeowner

StoppedClock said:
			
		

> I'm lovin' the sentiment but just before I start making smug phone calls and marching around the office yelling "I told you so" can you please confirm that we have peaked and that the crash is currently underway?



There is no evidence of a peak, considering the last stats we have say there were record price increases in the first quarter (half?) of this year.  There is annecdotal evidence of prices being lowered on these boards, but I remember the same thing being said last year.  It also summer which is a known time for slow sales.  It will be another few months when a few more rate hikes kick in before anyone can say which way its going.  IMO too early to tell yet.


----------



## Duplex

I think that the market has turned from what we saw in the spring/early summer.  Asking prices for similar properties in my bellwether development are static.  However asking prices 4-5 months ago were an invitation to treat not the vendors anticipated selling price.  Bidding wars are possibly history for large swathes of the market, negative equity may be a reality (if unidentified) for many recent buyers.


----------



## dam099

CelloPoint said:
			
		

> That's another good point. Can't remember where I saw it (boards.ie or here on AAM), but is there any evidence that the banks are not passing on the rises to their customers? If this is the case, the Irish banks are basically giving 2 fingers to the ECB, and it's like saying "to hell with the long-term future of the Irish economy, we're going to milk the tiger for every last drop of blood" and "we know better than the ECB".


 
Given the increasing share trackers have in the market then the rate increases on these would automatically have been passed on to many borrowers anyway. It generally takes a week or two before the banks announce increases in their rates but I'm pretty sure most are passing on the increases in full for example AIB passed on the full .25% in March and [broken link removed] although it was 10-12 days before they announced this.


----------



## bearishbull

whathome said:
			
		

> That is because US buyers generally lock rates for the total duration of their mortgage. Variable (adjustable) rate mortgages (ARM's) are a recent arrival to the US market. So people rush to lock in a low rate. Variable rates are dominant in Ireland so the "race against rates" is less likely to have as much of an effect here.


Actually its more of a problem in Ireland where vast majority are variable or semi variable(fixed for a few years only). Banks stress test at prevailing mortgage rate +2% ,so where theres loads of variable mortgages the higher rates go the more people are affected by reduced borrowing capacity. If majority are on long term fixed terms then the stress test isnt required.


----------



## whathome

bearishbull said:
			
		

> Actually its more of a problem in Ireland where vast majority are variable or semi variable(fixed for a few years only). Banks stress test at prevailing mortgage rate +2% ,so where theres loads of variable mortgages the higher rates go the more people are affected by reduced borrowing capacity. If majority are on long term fixed terms then the stress test isnt required.


 
The effect of the stress test is neutral.  Rates go higher, stress test goes higher by the same amount.  Agreed that there will be a few crazies that will try to borrow in case their approval drops.

If you were locking your mortgage rate for 30 years, would you wait for rates to rise before buying?  This is the position for many US buyers, the race against rates has more of an effect over there.


----------



## whathome

Duplex said:
			
		

> negative equity may be a reality (if unidentified) for many recent buyers.


 
Eloquently put!


----------



## StoppedClock

Duplex said:
			
		

> negative equity may be a reality (if unidentified) for many recent buyers.


 
NE is virtually assured for any one who has bought in 2006 with minimum deposit when you consider stamp, legals etc.


----------



## whizzbang

summerhill said:
			
		

> Any of the bank's passed on the latest interest rate increase to mortgage holders yet??? Any indication as to when it will happen?



When the banks have sold off their branch  networks and HQs?


----------



## bearishbull

whathome said:
			
		

> The effect of the stress test is neutral. Rates go higher, stress test goes higher by the same amount. Agreed that there will be a few crazies that will try to borrow in case their approval drops.
> 
> If you were locking your mortgage rate for 30 years, would you wait for rates to rise before buying? This is the position for many US buyers, the race against rates has more of an effect over there.


 Long term Mortgage rates in America never went below approx 5.5%,even when variable rates were ultra low most americans were fixing into long term rates at 5.5%. For several reasons it does have a bigger effect here and race against rates didnt exist to a large extent in the usa.


----------



## StoppedClock

bearishBull please claify your understanding of race against rates.

Do you mean people trying to lock in lower fixed rates or borrow larger amounts?


----------



## bearishbull

StoppedClock said:
			
		

> bearishBull please claify your understanding of race against rates.
> 
> Do you mean people trying to lock in lower fixed rates or borrow larger amounts?


 Both, but mainly with regard to borrowing capacity, rates rise and you can borrow less,but when majority of market is fixed theres less of a race to get in before rates rise whereas where the majority are variable(as in ireland) there is a race to get in before a)rates rise to unaffordable levels and b) the amount you can borrow at a set income level is reduced due to higher rates.


----------



## whathome

bearishbull said:
			
		

> Long term Mortgage rates in America never went below approx 5.5%,even when variable rates were ultra low most americans were fixing into long term rates at 5.5%. For several reasons it does have a bigger effect here and race against rates didnt exist to a large extent in the usa.


 
The 30 Year FRM (Fixed Rate Mortgage) in the US dropped from 6.5% in Sep '03 down to 5.5% in Feb '05. Current average is 6.63%. There was a rush to lock at the lower 5.5% to 6% range.

[broken link removed]


----------



## StoppedClock

bearishbull said:
			
		

> amount you can borrow at a set income level is reduced due to higher rates.


 
Are people really that stupid that they cannot see the link betwen higher lending amounts and higher prices and inversely lower lending amounts and lower prices?


----------



## whathome

StoppedClock said:
			
		

> Are people really that stupid that they cannot see the link betwen higher lending amounts and higher prices and inversely lower lending amounts and lower prices?


 
It sounds crazy but I suspect a minority are that stupid.


----------



## bearishbull

whathome said:
			
		

> The 30 Year FRM (Fixed Rate Mortgage) in the US dropped from 6.5% in Sep '03 down to 5.5% in Feb '05. Current average is 6.63%. There was a rush to lock at the lower 5.5% to 6% range.
> 
> [broken link removed]


 
Yeah but its not as significant as here. 5.5% is only 15% less than 6.6%. Borrowing capacity wasnt affected much like will be/is the case here now.


----------



## bearishbull

whathome said:
			
		

> It sounds crazy but I suspect a minority are that stupid.


Fools and their money.
Edit : Fools and their borrowed money!


----------



## Howitzer

bearishbull said:
			
		

> Yeah but its not as significant as here. 5.5% is only 15% less than 6.6%.


 
Yes but 6.6% is 20% more than 5.5%!


----------



## whathome

bearishbull said:
			
		

> 5.5% is only 15% less than 6.6%


 
6.6 is 20% more than 5.5.

And it's 20% more for *30* years!

I think we all accept that there will be some head-cases that believe they should rush out and get a big mortgage while they can but rates have risen enough already to take most of them out.  They may have had some effect in the spring but it's too late now.


----------



## bearishbull

Yes but a move from 5.5% to 6.6% on a repayment mortgage(30year) only adds 12% to monthly repayment. We're going too far off topic here but needless to say the effect is far more pronounced here and was evident in those on variable rates to a lesser extent in america a couple of years ago. The structure of the american mortgage market prevents such an effect being too widespread for too long among FTB's in particular.


----------



## whathome

bearishbull said:
			
		

> 5.5% to 6.6% on a repayment mortgage(30year) only adds 12% to monthly repayment.


 
You must be selling mortgages 

Someone mentioned earlier that it had happened in the US so it could happen here. I was pointing out why it might have happened in the US but that the same reason does not apply here. In the US, it would have been less to do with approval limits and more to do with getting a good deal.

The effect in Ireland would have been from misguided borrowers who just wanted maximum mortgage approval. It's not too far off-topic, as it relates to sentiment.


----------



## Apsil

Just an observation...

I've been following these boards for a while now, and they always seem bearish. If you look back over the past few years (e.g. http://www.askaboutmoney.com/showthread.php?t=6238 ) you'll see that almost everyone is warning you off everything. If you took all of this advice to heart you would have lost out on huge property growth in Ireland. 

I realise that prudence is key, but you have to take a risk on something or you're never going to make money on anything. Check out the various forums at the moment and the best advice you will get is stick all your money in Northern Rock! I thought property investment was about long-term returns? If so, what's the big problem with investing now? (ok, ok, yields - but yields have been a problem for years).

Does anyone have any bullish comments on any actual investments, apart from a 3% return in a deposit account? Stocks? Overseas properties? Commodities? Dare I say it, Irish property?!!


----------



## whathome

Apsil said:
			
		

> If you took all of this advice to heart you would have lost out on huge property growth in Ireland


 
Your name isn't Bertie is it?



			
				Apsil said:
			
		

> Does anyone have any bullish comments on any actual investments, apart from a 3% return in a deposit account? Stocks? Overseas properties? Commodities? Dare I say it, Irish property?!!


 
This is a thread about "Current public sentiment towards the housing market", not alternative investments.


----------



## RiceCakes

Good post Apsil, I'd argue the main difference between now and two years ago is that globally two years ago was boom time, and we are very exposed to the global market.
Now its turning, look to the US housing market, its in recession and frankly tottering on the precipice if earlier posts and links are accurate, two years ago the US market was full of flippers thinking like the current Irish "Investors" that they discovered a perpetual money making machine.

Sentiment is different this time, just look at the amount of thread views, most people including heavyweights like the IMF ( http://www.unison.ie/irish_independent/stories.php3?ca=9&si=1667129&issue_id=14469 ) are warning about our economy and in particular the housing part of it.

Some are now calling the top of the market, am wondering we are there yet myself, but not going to call that till November 1st.


----------



## whathome

Apsil said:
			
		

> I realise that prudence is key, but you have to take a risk on something or you're never going to make money on anything.


 
You have made a fair point Apsil.  What about starting a business?

Sentiment has been so strong with regard to property that "investors" have been singularly focused on buying more of it. With rising rates and a weakening market, I suspect that people might become interested in real business again.


----------



## edo

Following from comments made about the US property scene vis a vis our own - Really good article in the Observer on Sunday:

http://www.guardian.co.uk/usa/story/0,,1838202,00.html


        [FONT=arial,helvetica,sans-serif]*'Dead zone' threat to US suburban dream*[/FONT]       

                   [FONT=arial,helvetica,sans-serif]Petrol price rises may cause the housing bubble to burst, triggering global recession and the fall of America's Eden, writes Paul Harris in New York[/FONT]           

       [FONT=Geneva,Arial,sans-serif] *Sunday    August    6, 2006
The Observer* 

[/FONT] Levitown is a bus ride beyond the aptly named Hicksville in the outer suburbs of New York. Its lawns are neat and its houses boxy. From many gardens fly American flags and yellow ribbons: typical displays of suburban patriotism.It was here, almost 60 years ago, that modern American suburbia was born. Work began on the town in 1947 and Long Island potato fields were soon covered with a radical new form of housing: single, similar, purpose-built houses designed for car-owners and aimed at families. At the time it was a shock. Social scientists scoffed at Levittown. But within decades the suburban experiment had come to define US life and what began in Levittown now covers the country in urban sprawl, strip malls and a way of life revolving around the car.

Article continueshttp://image.guardian.co.uk/Ads/MPU/arrow9x7.gif
                                                                                                    &lt;a&gt;                         &lt;img&gt;&lt;/a&gt;                                                           

Now there are fears it is coming to an end. For the past five years America has been gripped by a housing price bubble. It has funded a huge expansion of suburbia as Americans poured their wealth into their homes. Yet many think that bubble may be about to burst. That would send shock waves through the US economy and into the rest of the world. Nor is that the only threat. The rising price of oil is squeezing suburbanites. It threatens a way of life where pavements are rare and everyone moves by car.'We have invested all our wealth in a living arrangement with no future,' said James Howard Kunstler, author of the Long Emergency which postulates the end of suburbia. 'In building suburbia we embarked on the greatest misallocation of wealth in the history of the world.'
Not that it looked that way in Levittown last week. Kids were driven to school, fathers and mothers drove off to work, the retired sheltered indoors from the heat. Most had an obvious pride in where they lived. 'It's quiet and its peaceful. It's great here. I know it's the suburbs but it is where you want to live to raise a family,' said resident Sherri Smith.
Yet there are real signs America's long and profitable love affair with the suburbs may be over. The past five years have seen an unprecedented rise in house prices, which in turn has triggered a massive building boom. But the pace of house sales in America has now declined nine months in a row after setting a record last summer. Across the US once booming markets are stagnant or prices slipping. One recent survey showed home builders have started offering free add-ons, like pools or garages, in order to sell their houses. Home builder confidence is at its lowest level in 14 years. Fortune magazine recently headlined a piece on the housing bubble with the words: 'Welcome to the Dead Zone'.
It is a far cry from the mania of the past five years when Americans queued up - sometimes literally - to buy homes in new developments, often doubling their investment in 12 months. Not surprisingly the construction industry responded by a binge of development that saw 75 per cent of new building taking place in the suburbs. That has left the economy deeply reliant on housing. Between 2001 and 2005 housing created 43 per cent of all new jobs in America. If the bubble bursts, the economy could plunge into recession. So tied up is the average American that a 20 per cent drop in prices is seen as equivalent in effect to a 40 per cent drop in the stock market.
Though a price collapse would be devastating, trapping homeowners in negative equity and wiping out savings, the fallout cannot be underestimated. Soaring oil prices have threatened suburbia as petrol has risen above $3 a gallon. At the same time heating costs have risen and the so-called McMansions of the 1990s are expensive to keep warm.
'We have these terrible perfect storm conditions. The real estate market in America has gone south. We will get a death spiral,' said Kunstler.
Those warning of a coming crisis believe suburbia's economic collapse would force a rethink of the fundamentals of the American way of life. The cultural and political force of suburbia is vast. It is where most Americans live. From The Graduate to American Beauty to Desperate Housewives, the suburbs pervade culture. Their bonhomie and good living have been celebrated in iconic TV shows such as Father Knows Best. Their dark side has also been explored in everything from David Lynch's surreal films to The Simpsons. 'The great American story has ultimately been told in the suburbs,' said Professor Robert Thompson of Syracuse University.
Thompson has charted how popular portrayals of the suburbs have changed. In the 1950s it was a celebration of their Edenic qualities as a place to raise a family. By the 1980s cynicism had set in. But most Americans have still chosen to live there, which leads some to believe predictions of a crisis are overblown.
Professor Robert Bruegmann of the University of Illinois in Chicago sees the suburban model as the future. In his book, Sprawl, Bruegmann launched a passionate defence of modern urban development that, he argues, has been a great democratic leveller: allowing ordinary working families access to a standard of living previously only available to the wealthy. And the idea of suburbia as a homogeneous, mainly white, cultural desert is a myth. 'They have always been more diverse and interesting than people ever thought,' he said.
Suburbia is home to 38 per cent of black Americans, 58 per cent of Asian Americans and more than half of Hispanics. It is also where most new immigrants choose to live. Bruegmann says the model has been closely copied in Europe and thus: 'High oil prices have no impact on suburbs. We have already had that experiment. It is called Europe.'
He believes antipathy towards the suburbs lies in the snobbishness of elite culture - Victorian styles were ridiculed right up until the 1950s. Now the first suburban houses in Levittown are sought after as historical monuments. Bruegmann thinks tastes will change as suburban living becomes ingrained in the American psyche. 'That Wal-Mart store that everyone now reviles will be seen as quaint. People will say what wonderful construction methods we had back then,' he said. There may be some truth in that. When Levittown was first built, the houses were derided by architectural critics. Now the Smithsonian Institution in Washington wants to buy one.



Interesting: What will happen to our sprawling car dependent suburbs in the most oil dependent , indebted economy in Western Europe?


----------



## whathome

edo said:
			
		

> Interesting: What will happen to our sprawling car dependent suburbs in the most oil dependent , indebted economy in Western Europe?


 
Nice article and an excellent question Edo.


Further comparison to the US market. They're saying that the US is over-priced and going to crash, what about this comparison?

$640,000 - 915 sq ft in Ballybough, Dublin 3 : [broken link removed]

$640,000 - 960 sq ft in New York's extremely wealthy Upper East Side : http://realestate.nytimes.com/+comshare/vulisting.asp?Lid=253-NS6060810


----------



## messyleo

In fairness, one is a house and the other is an apartment, but i do take your point. however you can't just make straight comparisons like that without taking into account other variables i.e. average earnings per capita and average mortgage repayments as a percentage of average earnings (which is a better guide to affordability than house prices alone).


----------



## whathome

gravitygirl said:
			
		

> In fairness, one is a house and the other is an apartment, but i do take your point. however you can't just make straight comparisons like that without taking into account other variables i.e. average earnings per capita and average mortgage repayments as a percentage of average earnings (which is a better guide to affordability than house prices alone).


 
Very few houses in Manhattan unfortunately.

Manhattan has the highest average salary in the US, $77,000 (€60,000)


Who would have thought that good old Ballybough would be more expensive per square foot than the upper east side, New York.

Note : Nothing against Ballybough, that little house just happened to be an even half million.


----------



## beattie

gravitygirl said:
			
		

> In fairness, one is a house and the other is an apartment, but i do take your point. however you can't just make straight comparisons like that without taking into account other variables i.e. average earnings per capita and average mortgage repayments as a percentage of average earnings (which is a better guide to affordability than house prices alone).


 
When you take wages into account it makes the Manhatten one more attractive and the Irish one even more ridiculous.


----------



## bearishbull

ah but irelands different .we cant be compared to wealthier, economically powerful and sustainable locations with much better infrastructure cos we're the best little country in the world.


----------



## Duplex

bearishbull said:
			
		

> ah but irelands different .we cant be compared to wealthier, economically powerful and sustainable locations with much better infrastructure cos we're the best little country in the world.


 
And condo prices are falling in New York. Its funny old world.





> “At another smaller project, the Abbey, a former parish building on East 16th Street being converted to condominiums, one apartment, a duplex on the top two floors, sold at a discount of $500,000, or about 27 percent below the asking price. Eight of 31 apartments are still listed as available.”


 
http://www.nytimes.com/2006/07/09/realestate/09cov.html?ei=5090&en=a19d17bcbb688393&ex=1310097600&partner=rssuserland&emc=rss&pagewanted=all


----------



## bearishbull

Shock horror the new york apartment has a rental yield of around 6%, thats a bit old fashioned aint it! despite a massive house price boom there you can still get a 6% yield on a desirable manhattan property not far from central park, im sure many in ireland would rather a D4 apartment yielding 2% and the high taxes relative to america.


----------



## edo

Jeez Gravity Girl !

Dont know if I fully understand the point you are trying to make - but I think the rest of the guys have pretty much nailed it already.

there is no way on Gods Earth that property price per square foot is worth  more in BallyBough than Manhattans upper east side .

Apartment versus House is irrelevant here - there only "houses" I know in Manhattan are in the Zoo in Central Park!

With all respect When someone can justify that a relatively neglected,underdeveloped (with lots of potential heh heh!) inner suburb of what is a provincial European City is worth more than a classy gentrified upper class area of one of the Worlds Greatest and wealthiest cities , without a batting an eyelid at the complete absurdity of it all - Then everything that has happened with the property market in this country becomes clear - We've completely lost the friggin plot! 

Sayonara Folks - Japanese style property market here we come!


----------



## redo

Duplex said:
			
		

> Bidding wars are possibly history for large swathes of the market, negative equity may be a reality (if unidentified) for many recent buyers.


Recent *FTB* buyers


----------



## phoenix_n

Apsil said:
			
		

> I realise that prudence is key, but you have to take a risk on something or you're never going to make money on anything. Check out the various forums at the moment and the best advice you will get is stick all your money in Northern Rock! I thought property investment was about long-term returns? If so, what's the big problem with investing now? (ok, ok, yields - but yields have been a problem for years).


 
The thing is that sometimes the best investments are those where you dont lose any money. And thats why northern rock, with no risk to capital and a guaranteed return for minimal work is seen as a better investment than irish property where your returns are low and not only is our capital at risk but it is also highly iliquid.


----------



## Afuera

redo said:
			
		

> Recent *FTB* buyers



Surely the LTV figure would determine how much risk a buyer is of falling into negative equity? Whether it's a FTB or a STB if they still have to pay back 90% of their mortgage and there's a drop of 10% then they start to head into negative equity territory...


----------



## OilKing

bearishbull said:
			
		

> Shock horror the new york apartment has a rental yield of around 6%, thats a bit old fashioned aint it! despite a massive house price boom there you can still get a 6% yield on a desirable manhattan property not far from central park, im sure many in ireland would rather a D4 apartment yielding 2% and the high taxes relative to america.


 
So I guess a question that we must ask is by what % must Irish Property in Dublin be reduced so that its yeilds a similar 6%. Maybe then we will get an idea of how much property is over priced.


----------



## redo

Afuera said:
			
		

> Surely the LTV figure would determine how much risk a buyer is of falling into negative equity? Whether it's a FTB or a STB if they still have to pay back 90% of their mortgage and there's a drop of 10% then they start to head into negative equity territory...


Agreed, well spotted


----------



## CelloPoint

madisona said:
			
		

> to ensure that prices don't fall before the election. Several councils have plans in place to buy social housing from the private market. I would not be surprised if a downturn in prices saw a transfer of funds from central govt to councils in targeted areas for the purpose of propping up prices



Affordable housing scheme = political safety valve. The whole scheme is driven by a recognition that there will be problems ahead. Deserted, half-built complexes will be snapped up at bargain prices and sold on to a dumb electorate at discount prices. FF/PD politicians will herald the affordable housing scheme a huge success and claims that young professional people are being priced out of the market will be passed off as but an "opposition rant".

Anyone who thinks that affordable housing is a good investment is a greater fool (fool me once, shame on me, fool me twice etc.) These places are generally in the middle of nowhere (I'm thinking Northern Cross, Darndale) and are occupied by undesireables.

A crash will be just that, a crash, and certainly will not be due to a political masterpiece in providing cheap housing to young people (a political masterpiece in economic masochism perhaps).

Affordable housing is definitely a case of buying votes - feed the goldfish and they'll vote. On a fundamental note: why should anyone subsidise another perfectly healthy tax-payer capable of work? Affordable housing is despicable.


----------



## Calina

Apsil said:
			
		

> I realise that prudence is key, but you have to take a risk on something or you're never going to make money on anything.


Property generated wealth is generally empty. Currently, this country is generating a disproportionate amount of its growth from property/construction and selling none of it outside the country. Additionally, much of the remainder comes from multinationals who are at liberty to go and and improve economic growth in a number of other countries if they so wish. 

In the long term, a country which is actually earning money from productive activity in some respect is better off economically than a country which has a lot of debt laden growth. The vast majority of people investing money in property are doing so not because you have to take a risk to make money but because "you can't lose on property". That's not a consideration of the risk involved. 

The economy would be a lot healthier if people did actually look at possible risk/return and invest in companies which have ideas to sell or export, be it in the area of manufacturing or services or knowledge. I don't really care which. You can't, by definition, export houses. There are vast swathes of Lucan which you cannot sell to the fast growing Chinese economy. 

We can't actually have continued economic growth merely from selling houses to each other.


----------



## Calina

CelloPoint said:
			
		

> Anyone who thinks that affordable housing is a good investment is a greater fool (fool me once, shame on me, fool me twice etc.) These places are generally in the middle of nowhere (I'm thinking Northern Cross, Darndale) and are occupied by undesireables.


Northern Cross is being built right on top of a Hilton Hotel and not all of it is being flogged as affordable housing. That being said, the list prices (full, not affordable) were, in my opinion, very high, even without respect to its proximity to Darndale, and with respect to its proximity to the coastal areas and M1/M50. 

Affordable housing is not so much a good investment - unless you're convinced property will continue to grow indefinitely, which it won't. From a governmental point of view, it was not a courageous move either. A sensible move would have been to take the heat of the market before blew up. Unfortunately, that would have meant alienating a lot of people. There is no politician anywhere in the world, never mind Ireland, who is democratically elected, who would have the guts to do something which would directly cause a lot of people to lose a lot of money (on paper).


----------



## Afuera

OilKing said:
			
		

> So I guess a question that we must ask is by what % must Irish Property in Dublin be reduced so that its yeilds a similar 6%. Maybe then we will get an idea of how much property is over priced.



Not too sure that this is an accurate gauge since yields can vary greatly. Investors in Ireland have shown that they are willing to forego yields and rely on capital gains alone. Parts of the Irish property market have a long way to drop (or rents a long way to rise) if it's ever to reach those 6% yields that you mentioned.

According to the latest daft report the average price paid for a house in Dublin was 483,000. The average price paid for rent in Dublin, from the same report, was 1,250 monthly (15,000 annualy). This represents a yield of 3.1% before taking all other expenses into account.

To get a 6% yield average, rent would have to rise to 2,400 per month or the average price of property would have to fall to 250,000 (a 48% drop).


----------



## homeowner

edo said:
			
		

> Jeez Gravity Girl !
> 
> Dont know if I fully understand the point you are trying to make - but I think the rest of the guys have pretty much nailed it already.
> 
> there is no way on Gods Earth that property price per square foot is worth  more in BallyBough than Manhattans upper east side .
> 
> Apartment versus House is irrelevant here - there only "houses" I know in Manhattan are in the Zoo in Central Park!
> 
> With all respect When someone can justify that a relatively neglected,underdeveloped (with lots of potential heh heh!) inner suburb of what is a provincial European City is worth more than a classy gentrified upper class area of one of the Worlds Greatest and wealthiest cities , without a batting an eyelid at the complete absurdity of it all - Then everything that has happened with the property market in this country becomes clear - We've completely lost the friggin plot!
> 
> Sayonara Folks - Japanese style property market here we come!



You cant talk about worth and houses.  A house is "worth" what it costs to rebuild it, which in most cases is far less than what someone will pay for it on the market.  The apartment in manhatten isnt "worth" $640K no more than the one in D3.  However, to someone who wants to live in ireland and doesnt want to live in manhatten that house in D3 maybe owrth 640K to them!  The apt in manhatten isnt worth sh1t to them because they dont want it.


----------



## whathome

Two more asking price reductions I noticed...
this time in Foxrock and Dún Laoghaire

Foxrock
Original Price : €1,250,000


New listing, *Reduced to* €1,175,000 
[broken link removed]=

------------------------------------------------

Dún Laoghaire - this one even gets a write up in the Irish Times
Original Price :€695,000 [broken link removed]

New listing, *Reduced to* €675,000
[broken link removed]=


----------



## swims

CelloPoint said:
			
		

> Anyone who thinks that affordable housing is a good investment is a greater fool


Affordable housing is not supposed to be an investment.


----------



## whathome

Has anyone noticed that recent buyers are absolutely horrified that somebody might get a better deal than them?

If they stress tested their repayments and they made a "long term investment" then they shouldn't worry about rising interest rates and falling prices. They seem to resent that buyers might be able to purchase at lower prices than they did!


----------



## Duplex

homeowner said:
			
		

> You cant talk about worth and houses. A house is "worth" what it costs to rebuild it, which in most cases is far less than what someone will pay for it on the market. The apartment in manhatten isnt "worth" $640K no more than the one in D3. However, to someone who wants to live in ireland and doesnt want to live in manhatten that house in D3 maybe owrth 640K to them! The apt in manhatten isnt worth sh1t to them because they dont want it.


 
The value of that house in D3 is comprised of the replacement cost of the existing structure plus the price of the land on which it stands.  The value of land is a factor of its productive capacity.  For instance an acre of agricultural land in the Golden Vale has more value than an acre of stony land in the west of Ireland because it can produce more food.  The same goes for urban land the higher the productive capacity the higher the value.  The productivity of urban land is a factor of population density, infrastructural provision, quality of governance, land use planning policies, etc.


----------



## Calina

whathome said:
			
		

> Has anyone noticed that recent buyers are absolutely horrified that somebody might get a better deal than them?
> 
> If they stress tested their repayments and they made a "long term investment" then they shouldn't worry about rising interest rates and falling prices. They seem to resent that buyers might be able to purchase at lower prices than they did!


It's the fear of discovering that they came in at the top thus making them look silly which is probably the issue here.


----------



## Duplex

whathome said:
			
		

> Two more asking price reductions I noticed...
> this time in Foxrock and Dún Laoghaire
> 
> Foxrock
> Original Price : €1,250,000
> 
> 
> New listing, *Reduced to* €1,175,000
> [broken link removed]=
> 
> ------------------------------------------------
> 
> Dún Laoghaire - this one even gets a write up in the Irish Times
> Original Price :€695,000 [broken link removed]
> 
> New listing, *Reduced to* €675,000
> [broken link removed]


 

Thanks Whathome, fascinating to have concrete evidence.


----------



## redo

whathome said:
			
		

> Two more asking price reductions I noticed...
> this time in Foxrock and Dún Laoghaire
> 
> Foxrock
> Original Price : €1,250,000
> 
> 
> New listing, *Reduced to* €1,175,000
> [broken link removed]=
> 
> ------------------------------------------------
> 
> Dún Laoghaire - this one even gets a write up in the Irish Times
> Original Price :€695,000 [broken link removed]
> 
> New listing, *Reduced to* €675,000
> [broken link removed]=



New Listing reduced to 1.25m from 1.3m. I don't know how to search the google cache? any help?
[broken link removed]


----------



## homeowner

calina said:
			
		

> Originally Posted by *whathome*
> Has anyone noticed that recent buyers are absolutely horrified that somebody might get a better deal than them?
> 
> It's the fear of discovering that they came in at the top thus making them look silly which is probably the issue here.



You all seem to be salivating at the thought of a property crash.  Its palpable.

I presume none of you are  home owners or else you bought more than 5 years ago.  

whathome & calina I assure you the fear of "looking silly" is the last thing on the minds of people with families who have signed up their earnings for the next 35 years to a house which, if you are right, wont be worth what they paid for it.

There is a very distasteful element being brought into the debate.  Can we stick to the topic which is how we think the market is going to go.


----------



## StoppedClock

homeowner said:
			
		

> You all seem to be salivating at the thought of a property crash. Its palpable.
> 
> I presume none of you are home owners or else you bought more than 5 years ago.
> 
> whathome & calina I assure you the fear of "looking silly" is the last thing on the minds of people with families who have signed up their earnings for the next 35 years to a house which, if you are right, wont be worth what they paid for it.
> 
> There is a very distasteful element being brought into the debate. Can we stick to the topic which is how we think the market is going to go.


 
the topic is in fact current sentiment and fear of "looking silly" is a valid sentiment

EDIT : I think we all now how we think the market is going


----------



## Sarah W

Is there a prize for the 15000 post?

Sarah

www.rea.ie


----------



## phoenix_n

Investors are dumping their property


----------



## Howitzer

whathome said:
			
		

> Has anyone noticed that recent buyers are absolutely horrified that somebody might get a better deal than them?
> 
> If they stress tested their repayments and they made a "long term investment" then they shouldn't worry about rising interest rates and falling prices. They seem to resent that buyers might be able to purchase at lower prices than they did!


 
This is known as the Winners Curse.

http://en.wikipedia.org/wiki/Winner's_curse


----------



## StoppedClock

Sarah W said:
			
		

> Is there a prize for the 15000 post?
> 
> Sarah
> 
> www.rea.ie


 
15000? is the rea speak for 1500?


----------



## whizzbang

StoppedClock said:
			
		

> 15000? is the rea speak for 1500?


no, its how much the post will be this time next year! 

sorry rea, I couldn't resist


----------



## StoppedClock

phoenix_n said:
			
		

> Investors are dumping their property


 
*249 North Circular Road, Phibsborough, Dublin 7, North Dublin City - Terraced House*

*Region €2,200,000 - *Annual rental income in the region of €111,000.

That is not a bad yield, wonder why its being sold?


----------



## SHARP

So the thread question is about public sentiment towards the housing market, so here is an account of my view:


Okay, my thoughts have now started to take over my wife and my life and its becoming a daily obsession:
Constant discussions about: Property/Financial Position/What should we do:

Everyday while I sit down for breakfast and lunch at work and when I arrive home for Dinner, the same topics come up:

“The whole country has gone property crazy”
“There is a crash coming”
“John and Mary have bought/build a new house for 400-500k and have took out a 35 year mortgage and they only earn …..”
“What should we do – should we sell our house for a profit and buy/build new one with 3,000sq ft, full kitted out etc.”
“We should stop the negativity and spend, spend, spend “like everyone else seems to be doing””
“How can they afford THAT house”


Basically myself and my wife are 28 years old with a 11month old baby. We are living very comfortably in a lovely 4 bedroom detached house on a site just outside a big town We have a small mortgage of 140k and have 20 years left to pay. Our house is standard (1,800sq foot) and we love it.

We have been feeling the pressure to sell the house and buy the big house and get the big mortgage that goes along with it, but we see the black clouds ahead and are prepared to stay put and “batten down the hatches”

About 6 couples around us have either spent 400-500k on huge 3,000sq foot homes or are building houses of similar size. They are also fully kitting out this home in order for them to be show homes and all this on 35,40 year mortgages. I know of at least 4 of these couples that earn less than I do and have more debts and no SSIA/VHI provisions. They are basically putting all the eggs in one basket by taking out the biggest loan they can get and getting the biggest house they can get (while not thinking of how they will manage the running costs (lighting, heating etc). 

Public sentiment is that house prices will continue to grow and grow and “our house will be worth 800-1m in 2 years time”. People seem to think that this will run and run and jobs and money will be aplenty for years to come. I am consider mad or a “dooms dayer” for saying that I wish the best of luck and hope everything works out for them “of course it will work out – sure the house has already increased in value”

I asked 5 people the following question and I think it gives a good overview of how people think:

If you won 300-400k on the lotto, would you pay off the mortgage:

God NO, sure you always need a mortgage, its great for the tax benefits. It’s the most tax efficient thing you can do.  I will always have a mortgage ?????
NO. I would buy a bigger house. I could sell my house and with the extra 400k, I could buy a huge mansion for that.
No, sure that wouldn’t pay off my mortgage anyway and I would prefer to spend it while Im young
Yes, I would love to, but its not enough to get the mortgage cleared as I have already re-mortgaged twice in the last years. Would spend it on a nice holiday and new cars for my and my husband. I always wanted a little sports car, so I would buy one of those.
Yes, It’s the biggest drain on my finances, cant wait to pay it off. 33 years left at the moment and I will be 63 by the time I pay it off. Would pay it off straighaway!
 
So only 1 out of the 5 would actually pay off their mortgages if they got the chance??
THAT is a reflection of Irish people today

Maybe there is a huge amount of envy, even jealously from myself and my wife about the others around us that are taking out the big mortgages and buying the big houses, but I think people have lost the run of themselves and are not prepared for the downturn that is obviously coming ….and soon.

Just some snippets of people I know:

38year old couple couldn’t hold out any longer, sold everything they could in order to qualify for a 420k mortgage and now have the big house with the 35 year mortgage. Will pay off mortgage when they are: 73????

My mother and father think they are of “upper class nature now” after their house was valued at 500k. My father refers to them as being “half millionaires”???

A 30 year old couple in serious debt (4 various loans) in 2004, no savings or SSIA and renting a small house with no children. 5 Banks refused them a mortgage 
…….2 years later: 2 kids and a 300k mortgage and 3,000 sq foot house (modern Ireland Ieh)

2 shop assistants on low money sell their average house (after missing 3 mortgage payments in 12 months)in order to buy a 2,500 sq foot house with a lake view. Wife wants BMW or will leave the husband because her friend has one. Wife wants the BMW, and wants to stop working. She wants to be a “kept woman” If she doesn’t get the life she thinks she “deserves”, she will leave.

30’s couple with house in Dublin Suburbs. Wife loses job in June, both purchase an Apartment in Bulgaria for 130,000 a month later. Same couple have not yet been to Bulgaria, but tell me that “it has already increased by 20%”

This is modern Ireland and public sentiment regarding the property market – it all up, up and up!


----------



## phoenix_n

StoppedClock said:
			
		

> *249 North Circular Road, Phibsborough, Dublin 7, North Dublin City - Terraced House*
> 
> *Region €2,200,000 - *Annual rental income in the region of €111,000.
> 
> That is not a bad yield, wonder why its being sold?


 
I guess better stock is coming onto the market. Older units rents will fall when you can rent a new 2 bed unit for under a grand in the northside.

Besides u can get near the 90K mark in deposit interest (is that correct?) with no risk.


----------



## room305

homeowner said:
			
		

> You all seem to be salivating at the thought of a property crash.  Its palpable.
> 
> I presume none of you are  home owners or else you bought more than 5 years ago.
> 
> whathome & calina I assure you the fear of "looking silly" is the last thing on the minds of people with families who have signed up their earnings for the next 35 years to a house which, if you are right, wont be worth what they paid for it.
> 
> There is a very distasteful element being brought into the debate.  Can we stick to the topic which is how we think the market is going to go.



I concur. Things are getting a little distasteful with some posters practically whooping from the sidelines at the prospect of crash. This is quite short-termist in outlook. The prospect of cheaper housing pales into insignificance when compared to the devastation that will result from a housing crash. As I have mentioned before, what use is it to you if you see your dream home selling for a song, when you don't have a job to pay for it?

However, if the young couples buying houses now weren't aware of the risk they took on when they took out a 35 year mortgage then more fool them.

The market is going to crash eventually of course but I've yet to be persuaded that we are seeing it now. The lack of access to decent statistics and data in Ireland is pitiful.


----------



## Calina

homeowner said:
			
		

> You all seem to be salivating at the thought of a property crash.  Its palpable.


Actually, this is where you are wrong, and where you are completely missing the points which I have consistently raised. 

Property in Ireland is hugely too expensive for many, many people. A lot of people are already overstretched even before we hit midpoint on interest rate rises. 

Unfortunately, for me, the wider issue is not the prospect of a property crash, but the impact it has on the wider economy, and frankly, the longer we go without a correction, the bigger that impact will be. Now, I could be overly cynical or fatalistic here, but frankly, I can't see a property crash having a positive impact on the economy as a whole. 

You can sit where you are assuming that I just want a property crash just for personal satisfaction, but I am over 30 years old, and unlike a lot of people who seem to be buying property on 100% mortgages touching 50% of their disposable income, I remember when this country had 18% unemployment and 50,000 people a year left the country rather than 80000 peopel a year coming in. 

If you think I'm salivating, then you're wrong, and you're naive. I am absolutely terrified at the prospect but unlike a lot of people who say it'll never happen, I see quite a lot of writing on the wall. 

The citation is correct. If you are a FTB, you are not going to want to hear of people getting better deals than you because no matter how far off your trade up is planned for, if property falls, you cannot do it. If you can't handle the fact that others of us seen in that an ominous sign, then I'm sorry. 

As to how much sympathy I have, I think collectively housebuyers walked themselves into paying too much for their houses. My sympathy for them will be somewhat limited. On the other hand, people who are directly impacted by a property crash who didn't actually contribute to the bubble, such as tenants who find their homes being dumped by overexposed investor-speculators, or people losing jobs as a result of the wider ramifications, that's where my sympathy will lie.


----------



## whathome

room305 said:
			
		

> I concur. Things are getting a little distasteful with some posters practically whooping from the sidelines at the prospect of crash. This is quite short-termist in outlook. The prospect of cheaper housing pales into insignificance when compared to the devastation that will result from a housing crash. As I have mentioned before, what use is it to you if you see your dream home selling for a song, when you don't have a job to pay for it?
> 
> However, if the young couples buying houses now weren't aware of the risk they took on when they took out a 35 year mortgage then more fool them.
> 
> The market is going to crash eventually of course but I've yet to be persuaded that we are seeing it now. The lack of access to decent statistics and data in Ireland is pitiful.


 
Agreed - there should be no whooping from the sidelines as prices fall. Gloating about people in negative equity is distasteful but I don't think anyone here is doing that. New buyers getting a better deal is a good thing however and even recent buyers shouldn't resent that. If they're sufficiently stress tested and happy in their property for the long term, there is no problem. In my view, prices will fall for a long time so picking up a bargain quickly will be out of the question.


----------



## room305

SHARP said:
			
		

> So the thread question is about public sentiment towards the housing market, so here is an account of my view:




Interesting post Sharp, pretty much sums up my assessment of current sentiment.

Do not btw feel under any pressure to sell and buy somewhere different. You are happy where you are so keep paying off as much of your mortgage as you can. Start behaving as though the country was already in a recession and you will do well. The end days of cheap credit will be upon us sooner rather than later.

Cash will be king again.

Oh yeah, welcome to the bear cave.


----------



## walk2dewater

SHARP said:
			
		

> So the thread question is about public sentiment towards the housing market, so here is an account of my view:
> 
> 
> Okay, my thoughts have now started to take over my wife and my life and its becoming a daily obsession:
> Constant discussions about: Property/Financial Position/What should we do:
> 
> Everyday while I sit down for breakfast and lunch at work and when I arrive home for Dinner, the same topics come up:
> 
> “The whole country has gone property crazy”
> “There is a crash coming”
> “John and Mary have bought/build a new house for 400-500k and have took out a 35 year mortgage and they only earn …..”
> “What should we do – should we sell our house for a profit and buy/build new one with 3,000sq ft, full kitted out etc.”
> “We should stop the negativity and spend, spend, spend “like everyone else seems to be doing””
> “How can they afford THAT house”
> 
> 
> Basically myself and my wife are 28 years old with a 11month old baby. We are living very comfortably in a lovely 4 bedroom detached house on a site just outside a big town We have a small mortgage of 140k and have 20 years left to pay. Our house is standard (1,800sq foot) and we love it.
> 
> We have been feeling the pressure to sell the house and buy the big house and get the big mortgage that goes along with it, but we see the black clouds ahead and are prepared to stay put and “batten down the hatches”
> 
> About 6 couples around us have either spent 400-500k on huge 3,000sq foot homes or are building houses of similar size. They are also fully kitting out this home in order for them to be show homes and all this on 35,40 year mortgages. I know of at least 4 of these couples that earn less than I do and have more debts and no SSIA/VHI provisions. They are basically putting all the eggs in one basket by taking out the biggest loan they can get and getting the biggest house they can get (while not thinking of how they will manage the running costs (lighting, heating etc).
> 
> Public sentiment is that house prices will continue to grow and grow and “our house will be worth 800-1m in 2 years time”. People seem to think that this will run and run and jobs and money will be aplenty for years to come. I am consider mad or a “dooms dayer” for saying that I wish the best of luck and hope everything works out for them “of course it will work out – sure the house has already increased in value”
> 
> I asked 5 people the following question and I think it gives a good overview of how people think:
> 
> If you won 300-400k on the lotto, would you pay off the mortgage:
> 
> God NO, sure you always need a mortgage, its great for the tax benefits. It’s the most tax efficient thing you can do. I will always have a mortgage ?????
> NO. I would buy a bigger house. I could sell my house and with the extra 400k, I could buy a huge mansion for that.
> No, sure that wouldn’t pay off my mortgage anyway and I would prefer to spend it while Im young
> Yes, I would love to, but its not enough to get the mortgage cleared as I have already re-mortgaged twice in the last years. Would spend it on a nice holiday and new cars for my and my husband. I always wanted a little sports car, so I would buy one of those.
> Yes, It’s the biggest drain on my finances, cant wait to pay it off. 33 years left at the moment and I will be 63 by the time I pay it off. Would pay it off straighaway!
> So only 1 out of the 5 would actually pay off their mortgages if they got the chance??
> THAT is a reflection of Irish people today
> 
> Maybe there is a huge amount of envy, even jealously from myself and my wife about the others around us that are taking out the big mortgages and buying the big houses, but I think people have lost the run of themselves and are not prepared for the downturn that is obviously coming ….and soon.
> 
> Just some snippets of people I know:
> 
> 38year old couple couldn’t hold out any longer, sold everything they could in order to qualify for a 420k mortgage and now have the big house with the 35 year mortgage. Will pay off mortgage when they are: 73????
> 
> My mother and father think they are of “upper class nature now” after their house was valued at 500k. My father refers to them as being “half millionaires”???
> 
> A 30 year old couple in serious debt (4 various loans) in 2004, no savings or SSIA and renting a small house with no children. 5 Banks refused them a mortgage
> …….2 years later: 2 kids and a 300k mortgage and 3,000 sq foot house (modern Ireland Ieh)
> 
> 2 shop assistants on low money sell their average house (after missing 3 mortgage payments in 12 months)in order to buy a 2,500 sq foot house with a lake view. Wife wants BMW or will leave the husband because her friend has one. Wife wants the BMW, and wants to stop working. She wants to be a “kept woman” If she doesn’t get the life she thinks she “deserves”, she will leave.
> 
> 30’s couple with house in Dublin Suburbs. Wife loses job in June, both purchase an Apartment in Bulgaria for 130,000 a month later. Same couple have not yet been to Bulgaria, but tell me that “it has already increased by 20%”
> 
> This is modern Ireland and public sentiment regarding the property market – it all up, up and up!


 
yep.


----------



## CelloPoint

Howitzer said:
			
		

> This is known as the Winners Curse.
> 
> http://en.wikipedia.org/wiki/Winner's_curse



Fascinating link! Thanks!


----------



## homeowner

Calina said:
			
		

> Actually, this is where you are wrong, and where you are completely missing the points which I have consistently raised.
> 
> 
> 
> I have read all your posts.  You made the comment about looking silly which in my view is extremely childish and distasteful given your obvious understanding of what the implications of a crash are.
> 
> 
> 
> 
> 
> Calina said:
> 
> 
> 
> 
> If you think I'm salivating, then you're wrong, and you're naive. I am absolutely terrified at the prospect but unlike a lot of people who say it'll never happen, I see quite a lot of writing on the wall.
> 
> 
> 
> 
> I am definitely not naive,  I recognise schadenfreude when I see it.
> 
> 
> 
> 
> 
> Calina said:
> 
> 
> 
> 
> The citation is correct. If you are a FTB, you are not going to want to hear of people getting better deals than you because no matter how far off your trade up is planned for, if property falls, you cannot do it. If you can't handle the fact that others of us seen in that an ominous sign, then I'm sorry.
> 
> Click to expand...
> 
> 
> I am not a ftb, i am in my 30s and have a house which has a very low mortgage ...I  am in no danger if there is a crash nor will I profit if it the boom continues as I dont intend on selling.
> 
> 
> 
> 
> Calina said:
> 
> 
> 
> 
> As to how much sympathy I have, I think collectively housebuyers walked themselves into paying too much for their houses. My sympathy for them will be somewhat limited. On the other hand, people who are directly impacted by a property crash who didn't actually contribute to the bubble, such as tenants who find their homes being dumped by overexposed investor-speculators, or people losing jobs as a result of the wider ramifications, that's where my sympathy will lie.
> 
> Click to expand...
> 
> 
> You havent shown any sympathy at all.  I am sure the people who will be caught by any downturn in the market will not want sympathy anyway.
> 
> Click to expand...
Click to expand...


----------



## whathome

SHARP said:
			
		

> So only 1 out of the 5 would actually pay off their mortgages if they got the chance??


 
Great post Sharp.
It probably would have been 0 out of 5 a few months ago.  1 in 5 is a start in the right direction.


----------



## phoenix_n

Howitzer said:
			
		

> This is known as the Winners Curse.
> 
> http://en.wikipedia.org/wiki/Winner's_curse


 
"The severity of the winner's curse gets stronger as the number of bidders increases. This is because the more bidders there are, the more likely it is that some of them have greatly overestimated the good's value. In technical terms, the winner's expected estimate is the value of the first order statistic, which increases as the number of bidders increases."

Isnt that what happened in the first quater of this year. I can attest to this having being involved in numerous bidding wars where thankfully i always lost.


----------



## beattie

homeowner said:
			
		

> You havent shown any sympathy at all. I am sure the people who will be caught by any downturn in the market will not want sympathy anyway.


 
So long as the government doesn't bail them out by intervening in the market to prop it up. I don't want my taxes to keep supporting this bubble. I feel really sorry for people who have recently got in and don't understand how future interest rate rises will adversely affect them. It's the lending policies (or lack of them) of the banks who you should be directing your annoyance at IMO


----------



## walk2dewater

homeowner said:
			
		

> Calina said:
> 
> 
> 
> 
> Actually, this is where you are wrong, and where you are completely missing the points which I have consistently raised.
> 
> 
> 
> I have read all your posts. You made the comment about looking silly which in my view is extremely childish and distasteful given your obvious understanding of what the implications of a crash are.
> 
> 
> 
> 
> I am definitely not naive, I recognise schadenfreude when I see it.
> 
> 
> 
> 
> I am not a ftb, i am in my 30s and have a house which has a very low mortgage ...I am in no danger if there is a crash nor will I profit if it the boom continues as I dont intend on selling.
> 
> 
> 
> You havent shown any sympathy at all. I am sure the people who will be caught by any downturn in the market will not want sympathy anyway.
> 
> 
> 
> 
> I didnt notice any sympathy when the market was going up, and people were selling their property for vast profit to those further down the "ladder"....  I did however notice a pervasive smugness and I'm-alright-Jackness from those riding the bubble...
> 
> But answer me this Homeowner, cos this is the real crux of the issue:  Why don't you want to see cheaper housing?  Sure don't we all want things we need to be cheaper, cheaper petrol, cheaper clothes, cheaper food?
> 
> Click to expand...
Click to expand...


----------



## kellyiom

I'm not going in that bear cave! Regarding the yield discrepancy vs manhattan and dub, remember that rates there are higher therefore in terms of a margin over, they're actually quite similar. 

In terms of crashes, I still don't see what the catalyst is that should make it any more imminent than six, nine months ago. The same discussions were taking place then, perhaps even a decade ago. Illiquid assets always 'gap' in a price correction, whether property, private equity, distressed debt as it settles until participants find the level. It's all down to attitude to risk. I agree with the posters on the prudence aspect; it can't be much fun seeing your wages nearly gone just to fund some sort of 'lifestyle' that's imposed on you by outside forces but if you're truly happy and can manage without too much stress, then regardless of the actual P&L on your house, then what does it matter?


----------



## autumnleaf

I was at a party over the weekend, and of course the subject turned to property eventually. There was one guy who was on holidays from the States. He made a remark that he had never seen any country so property mad but he supposed it was inevitable given the jumps in income in recent years. I mentioned that the ratio of average income:house price was about 10:1 and he was shocked. But a Polish guy thought that this wasn't so shocking since the ratio was prob even higher in Poland. He's trying to save for a place in Krakow but the prices keep rushing ahead of him. I also mentioned the E300k toilet in Lahinch. The American thought this was incredible but an Irishwoman remarked in all seriousness that it was a reasonable enough price given the location!



			
				SHARP said:
			
		

> Basically myself and my wife are 28 years old with a 11month old baby. We are living very comfortably in a lovely 4 bedroom detached house on a site just outside a big town We have a small mortgage of 140k and have 20 years left to pay. Our house is standard (1,800sq foot) and we love it.
> We have been feeling the pressure to sell the house and buy the big house and get the big mortgage that goes along with it, but we see the black clouds ahead and are prepared to stay put and “batten down the hatches”


Congrats on the house and the baby  "Keeping up with the Joneses" is human nature and we've all felt twinges of it, but i think you're being v sensible with your attitude and in the long run you'll prob be a better off than these people in serious debt. (And you should prob thank whatever deity you believe in that you didn't get saddled with that gold-digging Beamer-loving wife!)


----------



## Calina

homeowner said:
			
		

> I am definitely not naive,  I recognise schadenfreude


I would question that, to be honest with you.

However, to move back to the topic at hand, if an increasing number of buyers are unhappy at the prospect that someone might get a better deal than they are, I would see that as a recognition of possibly being in a poorer position than hitherto thought (where that position was "sure you can't lose on property). The point is, if you do buy at the top of the market - a position which can't be identified until it has actually turned, then you are open to issues relating to 1) negative equity and 2) difficulties in trading up 3) difficulties in increasing mortgages for structural/enhancement work if you are in negative equity. 

As much of property discussion in this country is based on people convincing themselves that they got a great deal, how many people do you think are going to want to admit that they bought at the *very *top of the market? It is extremely worrying from the point of view of identifying where that turn will come if anecdotally, an increasing number of actual purchasers are concerned that they may, in fact, have bought at the top of the market and yes, they will fear looking silly. It is only human.

A wildly out of control property market is not good for any economy and the knock effects can last for years. They are still recovering in Japan, they took quite a while to recover in the UK. Unfortunately, the sum of argument against it happening here is "it's different here", but amongst the fundamentals which are different here is a heavily reliance on FDI and construction for our growth.


----------



## Persius

SHARP said:
			
		

> So the thread question is about public sentiment towards the housing market, so here is an account of my view:
> 
> 
> ...
> 
> This is modern Ireland and public sentiment regarding the property market – it all up, up and up!


 
Wow, doesn't sound like any change in sentiment among the population in general. And you seem to cover quite a cross section of Irish society. I was talking to a few of my relatives over the weekend. When I told them I was taking a break from looking for a property to purchase (I'm a potential FTB) the reaction was generally understanding. Not the typical "are you mad! you should hurry up and get on the ladder now before it's too late", but more "yeah, you might be right, prices seem to be levelling off, and it's hard to know which way it's going".

Sharp, sounds to me like you are in a good situation with a decent sized house, managable debts and a young baby. It's just a matter of adjusting your built in bullsh1t detectors to filter out all the conversation about the family up the road buying a new mansion/appartment abroad for XXX thousand euro ;-)


----------



## thefisherman

while i feel sorry for the individual i am concerned at the group behavior .
the funny thing is that if people were sensible and stopped paying ever increasing prices for an ever increasing supply of housing it probably would lead to a crash. which we bears fear.
i think we are going to have a big crash in this country, sooner rather  or later.


----------



## whathome

kellyiom said:
			
		

> In terms of crashes, I still don't see what the catalyst is that should make it any more imminent than six, nine months ago.


 
Three words : Interest Rate Rises

You make a good point on rates here vs US but their rates have stalled and ECB rates are rising so they may converge.


----------



## phoenix_n

In reality FTB's should be alright. So what if the house has fallen value they still need a place to live and they are reducing their capital. Once they didnt get into a bidding war or choose 'best house in worst location' then all things being equal there should be no real problems. Trader uppers made use of the equity and in reality are paying somewhat simmilar mortgages if not a bit higher. This group will need to cut costs but in general they overall expenditure is decreasing anyway.

Its really 1 and 2 bed apartments bought by investors that are gonna get the hit as when you have to subside the mortgage and having to deal with an illiquid asset then many will try to cut and run. The illiquidity of the asset, i think, will be the 'newest' conversation to be had at those parties. You're stuck with something than is costing you money and no-one wants to buy it. And you hear that poland/germany etc is the place to be buying.....


----------



## Contrarian

`Well as they say 'give people freedom and all they do is imitate each other'


----------



## fatmanknows

walk2dewater said:
			
		

> ..But answer me this Homeowner, cos this is the real crux of the issue: Why don't you want to see cheaper housing? Sure don't we all want things we need to be cheaper, cheaper petrol, cheaper clothes, cheaper food?


 
Count me in......I make no bones about where I want things to go. The bigger and harder the coming crash the better. Surely no one will hold that against me. If after all, all you property owning barons (particularly the multi-owning BTL/investor  brigade, which largely has the market the way it is) are wishing your bricks and morter higher and higher thus depriving affordability to more and more - then what's wrong with my take on things. Surely my view is the more moral of the two- increasing  affordability for the masses. Hey think about, if  please God, the crash is as hard as I hope it is we'll all be able to buy and live in D4 and be happy ever after.


----------



## Howitzer

Contrarian said:
			
		

> `Well as they say 'give people freedom and all they do is imitate each other'


 
I was just about to say that!


----------



## Persius

phoenix_n said:
			
		

> "The severity of the winner's curse gets stronger as the number of bidders increases. This is because the more bidders there are, the more likely it is that some of them have greatly overestimated the good's value. In technical terms, the winner's expected estimate is the value of the first order statistic, which increases as the number of bidders increases."
> 
> Isnt that what happened in the first quater of this year. I can attest to this having being involved in numerous bidding wars where thankfully i always lost.


 
Very interesting link. This also mirrors my experiences in the second quarter. Potential FTB looking for small 3 bed end of terrace in the cheaper areas of south Dublin (Crumlin etc). Got involved in a number of bidding wars where the bids reached what I considered to be a _fair value_ for such a property in the prevailing market - which was also my limit. This figure was, by nature of the fact I was bidding at all, already well above what I consider to be a true estimate of the _actual value_ of the property. I was basing my _actual value_ estimate on %age of salary required to pay mortgage, house prices to wages ratio, comparissons with similar cities abroad (I've previously posted comparissons with Munich), etc. Anyway after reaching my limit, father (bless him) offered to contribute an extra €20,000. I was reluctant to take this for a number of reasons, but in the end did continue bidding up to my limit plus the extra €20K and still lost out.

At the moment I'm glad I did lose out, and have become more bearish about the property market (due to the general state of the economy) since then. God knows how I'll feel about this time next year, with the advantage of hindsight.


----------



## homeowner

walk2dewater said:
			
		

> [
> But answer me this Homeowner, cos this is the real crux of the issue:  Why don't you want to see cheaper housing?  Sure don't we all want things we need to be cheaper, cheaper petrol, cheaper clothes, cheaper food?



I havent said I wanted house prices to go up nor have I said I want them to go down.  What I think will happen and I what I want to happen are not necessarily the same thing.  

I personally dont think there will be a crash, as I have said many times on this and other boards, I think there will be a levelling off in about 12-18 months and prices will rise with inflation.  But hey, thats just my opinion and it has just as much a chance of being wrong as all the other opinions here.

I think cheaper housing would be great for people who cant buy at current prices. I know lots of people who would benefit from cheaper housing.  Would I like to see houses on my road being sold for 100K less than what I paid, of course not.  But it wont effect me if it does happen  as I am not planning on selling, ever, as far as I can see now.  I dont have investment properties and I havent over stretched myself.

It seems to me that the people who are predicting doom and gloom here have a vested interest in the market crashing.  I would like to hear from people who like me wont be affected, Id like to hear what they think.  And if that is the posters here, can they say that so we can put more weight on their opinion rather than people on either side of the debate who "need" the market to go one way or the other.


----------



## whathome

homeowner said:
			
		

> And if that is the posters here, can they say that so we can put more weight on their opinion rather than people on either side of the debate who "need" the market to go one way or the other.


 
We need to remember that in a debate, although people may make a very strong case for one side, it doesn't mean that they are wishing for it.  I'm not wishing or hoping for a crash, I just think that one is going to happen.


----------



## CelloPoint

phoenix_n said:
			
		

> In reality FTB's should be alright. So what if the house has fallen value they still need a place to live and they are reducing their capital. Once they didnt get into a bidding war or choose 'best house in worst location' then all things being equal there should be no real problems. Trader uppers made use of the equity and in reality are paying somewhat simmilar mortgages if not a bit higher. This group will need to cut costs but in general they overall expenditure is decreasing anyway.
> 
> Its really 1 and 2 bed apartments bought by investors that are gonna get the hit as when you have to subside the mortgage and having to deal with an illiquid asset then many will try to cut and run. The illiquidity of the asset, i think, will be the 'newest' conversation to be had at those parties. You're stuck with something than is costing you money and no-one wants to buy it. And you hear that poland/germany etc is the place to be buying.....



I'd say the new topic of conversation in middle-class Ireland will be quiet quiet whisperings about who got caught out. Just like the gambler who wants to tell the world about his big win, but say nothing when he loses the rent money, Cyril Speculator will take his losses and shut his mouth for fear of looking like an idiot


----------



## Calina

phoenix_n said:
			
		

> In reality FTB's should be alright. So what if the house has fallen value they still need a place to live and they are reducing their capital. Once they didnt get into a bidding war or choose 'best house in worst location' then all things being equal there should be no real problems. Trader uppers made use of the equity and in reality are paying somewhat simmilar mortgages if not a bit higher. This group will need to cut costs but in general they overall expenditure is decreasing anyway.
> 
> Its really 1 and 2 bed apartments bought by investors that are gonna get the hit as when you have to subside the mortgage and having to deal with an illiquid asset then many will try to cut and run. The illiquidity of the asset, i think, will be the 'newest' conversation to be had at those parties. You're stuck with something than is costing you money and no-one wants to buy it. And you hear that poland/germany etc is the place to be buying.....


I'd have to qualify that statement. I'm not entirely sure that all those FTBs were fortunate enough to be in a position to buy something which they could consider living in for years and years to come. There are a lot of FTBs in one bedroomed apartments in poorly serviced blocks who will get caught because their ability to trade up may be limited, particularly if they had a high LTV. One of my main other cribs about property in Ireland has been the lack of attention to the utility of new developments being built, and the heavy emphasis on starter homes which have no long term needs in mind.


----------



## Remix

Kudos to Whathome for posting the means of comparing current asking prices versus google-cached.

I find it quite interesting that the estate agents are making no reference to the higher price and are avoiding the phrase "asking price reduced" which would be a normal sales term to attract in buyers. 

Is it likely they are just not psychologically prepared yet for selling in a falling market? New sales paradigm ahead ? 

They'll learn quick enough I suppose.


----------



## messyleo

edo said:
			
		

> Jeez Gravity Girl !
> 
> Dont know if I fully understand the point you are trying to make - but I think the rest of the guys have pretty much nailed it already.
> 
> there is no way on Gods Earth that property price per square foot is worth more in BallyBough than Manhattans upper east side .
> 
> Apartment versus House is irrelevant here - there only "houses" I know in Manhattan are in the Zoo in Central Park!
> 
> With all respect When someone can justify that a relatively neglected,underdeveloped (with lots of potential heh heh!) inner suburb of what is a provincial European City is worth more than a classy gentrified upper class area of one of the Worlds Greatest and wealthiest cities , without a batting an eyelid at the complete absurdity of it all - Then everything that has happened with the property market in this country becomes clear - We've completely lost the friggin plot!
> 
> Sayonara Folks - Japanese style property market here we come!


 
sorry i wasn't for a second saying that the D3 house was worth the same, I was merely pointing out the technicalities of comparing like-with-like, regardless of the underlying point really...


----------



## phoenix_n

Its gonna be an interesting next couple of months to see (after following this thread for weeks now) how the market really pans out.



			
				Remix said:
			
		

> I find it quite interesting that the estate agents are making no reference to the higher price and are avoiding the phrase "asking price reduced" which would be a normal sales term to attract in buyers.


 
Where the vendor wants it sold he won't care what language the agent will use.


----------



## Bedsit

One thing we have not talked about in the last few posts is the cyclical nature of the property boom. Assuming that there is some sort of a correction or crash much of the house building will slowdown/stop. This will result in large numbers of immigrants out of work, and some of them will undoubtedly return home or go looking for jobs in other EU countries. This in turn will mean more empty apartments and houses. This will have a knock on effect in the services sector, less people buying DIY, home furnishings, eating out etc. So in turn small business will start laying off people, again many of these are immigrants or students who rent apartments and the cycle will continue downwards. Dare I even mention the backlash we may have against foreigners who may be seen to be taking Irish jobs ....


----------



## SHARP

[quote = homeowner] I would like to hear from people who like me won’t be affected, Id like to hear what they think. And if that is the posters here, can they say that so we can put more weight on their opinion rather than people on either side of the debate who "need" the market to go one way or the other.[/quote]

How do you know you won't be affected though?

You are presuming you won't, but I think the property market and the over dependence on it will bring down this country over the next few years. This will lead to loss of jobs in many areas directly and indirectly related to the construction/property market. 

This will affect the WHOLE country me and YOU included.

I certainly don't want anything to crash and would love if everything eased off and realigned itself so we all could live happily ever after, but I just can’t see this happening when people are stretching themselves paying paying 500,000 on a tiny house on a 35 year mortgage (thinking to themselves that everything will be okay as the value will increased to 600,000 next year etc etc


----------



## thefisherman

i have an investor friend who built and bought houses around the city center in cork,location location location,  all pre-1999.has about 17 now.
the rental covers all mortgage repayments comfortably.
i know he will be able to weather the crash.
but he feels pity for the later investors who borrowed on the equity of their ppr to buy appartments and houses to rent out. these guys have a heavy debt burden in an uncertain market.


----------



## Guest107

Afuera said:
			
		

> To get a 6% yield average, rent would have to rise to 2,400 per month or the average price of property would have to fall to 250,000 (a 48% drop).


Yah. Rent will not rise in Ireland with the vacancy levels we have (16% of properties are empty) . Landlords (save in a few hotspots) have no pricing power.....meaning that rents will not rise.!!!!!

As we are _different and special _here  in Ireland will will simply adjust to our 2% yields and carry on regardless , of course we will


----------



## JohnBoy

I think that bedsit and Sharp have correctly identified the potentially ruinous implications of the standard economic money multiplier working in reverse should the single largest part of the economy slow down, or dare I say it, actually contract.


----------



## beattie

2Pack said:
			
		

> Yah. Rent will not rise in Ireland with the vacancy levels we have (16% of properties are empty) . Landlords (save in a few hotspots) have no pricing power.....meaning that rents will not rise.!!!!!
> 
> As we are _different and special _here in Ireland will will simply adjust to our 2% yields and carry on regardless , of course we will


 
Hit the nail on the head, there is so much property due to come on stream inside the next 12 months that rents will come down in nominal terms which will be a huge hit as inflation shows no sign of abating


----------



## whathome

Rising fuel costs, rising electricity prices, rising gas prices, rising interest rates.

When I think about the Irish property market it reminds me of the reality TV stolen car chases they used to show on the US TV programme - Cops. 

Usually a high speed chase on a Freeway. The police would shoot at the tyres which would blow-out and the car would continue on it's metal rims for ages with sparks flying everywhere. It might then run into a barrier (maybe losing a door or bumber) but keep going, swerving from side to side. I'd say that's where were at right now. Each interest rate rise is another bullet in the car.


----------



## Calina

beattie said:
			
		

> Hit the nail on the head, there is so much property due to come on stream inside the next 12 months that rents will come down in nominal terms which will be a huge hit as inflation shows no sign of abating


Don't know about that. Currently I think property rental is already supported by HSE payments, certainly in the north Dublin area. And although I know it's the subject of much debate here, I really do wonder how much new property will go to rental given that the difference between rental income and mortgage outgoing is not in favour of the investor at the moment. Put simply, I think any savvy investor will be reluctant to invest a massive amount of money at this stage. I'm not expert enough to know if landlords can write off massive losses on one property against other properties where they have an income in excess of their costs.


----------



## Remix

phoenix_n said:
			
		

> Where the vendor wants it sold he won't care what language the agent will use.


 
Really? Do you mean that? How about "overpriced dump for quick sale" 

My point is that there are vendors already out there wanting to sell with little or no buyer interest. Estate agents don't appear to have adapted yet to the situation. They might need to dig out and dust off the "price-reduced" and "must sell" boards that have been in storage for the past ten years or so!


----------



## Calina

Remix said:
			
		

> Really? Do you mean that? How about "overpriced dump for quick sale"
> 
> My point is that there are vendors already out there wanting to sell with little or no buyer interest. Estate agents don't appear to have adapted yet to the situation. They might need to dig out and dust off the "price-reduced" and "must sell" boards that have been in storage for the past ten years or so!



Possibly - and I'm by no means sure of this - no one wants to make a call until we're out of the so called quiet season. I daresay there are plenty of conversations that include the sentence "Yeah, the market is kind of quiet at the moment; it'll pick up in September, it always does."


----------



## CelloPoint

Bedsit said:
			
		

> Dare I even mention the backlash we may have against foreigners who may be seen to be taking Irish jobs ....



Slightly off topic, I know, but this is somthing that David McWilliams is predicting - the blame game will go on for years whether it's against immigrants, the government, the banks, estate agents, politicians, landlords etc.

Immigrants just won't put up with it, and they'll move to the next building site (along with young Irish people).

Anyway, the economic outlook is all irrelevant to the high-flyers who have made their money by riding the Irish property wave. They won't be sticking around in a gloomy and depressed country with unemployment and miserable people. South of France or Croatia sounds like a nice spot for the newly-found-wealth Irish property tycoon.


----------



## phoenix_n

whathome said:
			
		

> When I think about the Irish property market it reminds me of the reality TV stolen car chases they used to show on the US TV programme - Cops.


 
Bad boys. Bad boys. Whatya gonna do.....


----------



## Duplex

I reserve my ire for the government that allowed narrow sectional interests gain from a restrictive planning permission regime.    The whole idea of planning control is a restriction on the operation of the free market. If planning restrictions did not exist then well resourced cartels would not be able to monopolise supply in the market, allowing them to price fix at their leisure. 

The issue of planning permission is a gift, granted by the democratically elected government on behalf of society.  The intention is that land use should be controlled in such a way so as to benefit all the people not a tiny minority who, build, lend and administer this artifice called the housing market.  This cabal are utterly unproductive leaches.    

Adam Smith's famous dictum: 

"People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices."

Rant over.


----------



## kellyiom

whathome said:
			
		

> Three words : Interest Rate Rises
> 
> You make a good point on rates here vs US but their rates have stalled and ECB rates are rising so they may converge.


 
hmm true but these are all forward looking aren't they. Even back in 2001 we knew rate rises would be ahead but the price of properties already discounted this (or buyers chose to ignore this ;-) In %age terms, rates have already climbed dramatically and overall credit quality hasn't deteriorated that much. Even some fairly hefty rises will still leave property affordable to the large majority.  It's a bit grim in the states but this is offset by the better refinancing that's taken place. In reality, speculators/investors have a shortage of options for their money worldwide. GDP growth in the states is about 6.5%, euroland 4.5% and climbing and while we will see some people hurt, I just don't think this is such a scenario where we'll see a crash. A jolt maybe.  The liquidity worldwide has compressed spreads in virtually every asset to such a degree that formerly risky assets are bid very strongly. Even the early 90's crash, and that was a crash! just looks like a blip, just a few years later. For me, moral of the story is just buy a house you like just in case you're lumbered with it and then it won't matter!


----------



## CN624

SHARP said:
			
		

> 2 shop assistants on low money sell their average house (after missing 3 mortgage payments in 12 months)in order to buy a 2,500 sq foot house with a lake view. Wife wants BMW or will leave the husband because her friend has one. Wife wants the BMW, and wants to stop working. She wants to be a “kept woman” If she doesn’t get the life she thinks she “deserves”, she will leave.



Just to be clear, the shop assistant wants her husband (a shop assistant) to buy her a BMW? 

Does this not explain how crazy as a nation we have become.


----------



## Duplex

kellyiom said:
			
		

> hmm true but these are all forward looking aren't they. Even back in 2001 we knew rate rises would be ahead but the price of properties already discounted this (or buyers chose to ignore this ;-) In %age terms, rates have already climbed dramatically and overall credit quality hasn't deteriorated that much. Even some fairly hefty rises will still leave property affordable to the large majority. It's a bit grim in the states but this is offset by the better refinancing that's taken place. In reality, speculators/investors have a shortage of options for their money worldwide. GDP growth in the states is about 6.5%, euroland 4.5% and climbing and while we will see some people hurt, I just don't think this is such a scenario where we'll see a crash. A jolt maybe. The liquidity worldwide has compressed spreads in virtually every asset to such a degree that formerly risky assets are bid very strongly. Even the early 90's crash, and that was a crash! just looks like a blip, just a few years later. For me, moral of the story is just buy a house you like just in case you're lumbered with it and then it won't matter!


 

The continuance of the liquidity bubble is dependent on the willingness of foreign governments to underwrite American consumer and government debt. The US is teetering on the brink, the economies that take up the baton after the Americans have finished their consumption binge will have cheaper workers willing to work in poorer conditions than their western counterparts. Survival of the fittest, most productive, innovative and hardworking.


----------



## binman

fatmanknows said:
			
		

> Count me in......I make no bones about where I want things to go. The bigger and harder the coming crash the better.
> ...
> increasing affordability for the masses. Hey think about, if please God, the crash is as hard as I hope it is we'll all be able to buy and live in D4 and be happy ever after.


 
I presume your tounge is firmly in your cheek. The reasons mentioned by whathome:



			
				whathome said:
			
		

> Rising fuel costs, rising electricity prices, rising gas prices, rising interest rates


 
To which I'd add rising unemployment and the associated falling consumer spending (after the SSIA boom) will lead banks to firmly tighten their lending policies.

I'm sure you all recall the 2.5 times main salary / 1 times lower salary rule that used to operate back in the days of 6 to 7% mortgage interest? I can forsee these rules, or a variation on them, being re-imposed (either by the banks themselves or by the Central Bank)

When the crash comes, your dream home might be 20% cheaper to buy than it is now, but you will not be able to borrow anything like as much as you can now either.


----------



## walk2dewater

homeowner said:
			
		

> I think cheaper housing would be great for people who cant buy at current prices. I know lots of people who would benefit from cheaper housing. ..


 
how compassionate.



			
				homeowner said:
			
		

> Would I like to see houses on my road being sold for 100K less than what I paid, of course not. ..


 
oh, not that compassionate then.



			
				homeowner said:
			
		

> It seems to me that the people who are predicting doom and gloom here have a vested interest in the market crashing.


 
yes some do.  They want cheaper house prices, just like they want cheaper milk at the shops.


----------



## walk2dewater

binman said:
			
		

> When the crash comes, your dream home might be 20% cheaper to buy than it is now, but you will not be able to borrow anything like as much as you can now either.


 
20% off would hardly make a dent.  Sure, to roll us back to 2001 prices would only be a 50% discount.  



			
				binman said:
			
		

> but you will not be able to borrow anything like as much as you can now either.


 
Who needs to borrow much when you've got little or no debt, a pile of cash, and vendors flogging their properties for ever greater discounts?  Jumbo mortgages are for suckers.


----------



## bogwarrior

SHARP said:
			
		

> I certainly don't want anything to crash and would love if everything eased off and realigned itself so we all could live happily ever after.



as a matter of interest, how would this scenario play out?  ie what is the 'best case' scenario for the overall economy in a slowdown?

if house price increases level off and start to track inflation I'd imagine we're still going to see large-scale dumping of investment property ( the capital appreciation is what is driving the market, not the yields).
The building boom would certainly slow down, putting god knows how many out of work.  This would in turn lead to many of the foreign workers employed in the building trade to move on to greener pastures, resulting in even more empty properties.  And the whole thing goes cyclic with more layoffs - this time in the industries that service the building trade ie shops, diy stores, estate agents etc

So, does anyone have an idea how an 'optimal' slowdown would play out?

I won't be crying into my tea for any investor who gets burned in a slowdown, but I'm afraid of the consequences for the rest of the country.


----------



## room305

bogwarrior said:
			
		

> So, does anyone have an idea how an 'optimal' slowdown would play out?



I can only imagine this would involve the bulk of specuvestors hanging on to their properties with very few selling them. Houses prices would continue to rise in nominal terms but would fall ever so slightly in real terms. The market would achieve the circa 50% correction in real terms that is required, over a 20 to 30 year time frame.

Likely? Yeah, I won't be putting too much money down in Paddy Power on that scenario either.


----------



## fatmanknows

The beads of perspiration from those who bailed in against all logic beginnig to drip quicker and quicker. 

Bring it on.......my vulture fund is in place ......won't be too long now before the first carcasses are found.



Anybody watched 'Treasure of Sierre Madre' recently. Dusted it down on the video shelf the other day. Cracking View. Human nature does'nt change much down the years.


----------



## Duplex

room305 said:
			
		

> I can only imagine this would involve the bulk of specuvestors hanging on to their properties with very few selling them. Houses prices would continue to rise in nominal terms but would fall ever so slightly in real terms. The market would achieve the circa 50% correction in real terms that is required, over a 20 to 30 year time frame.
> 
> Likely? Yeah, I won't be putting too much money down in Paddy Power on that scenario either.


 
The Goldilocks scenario that the banks don't swallow, as is evident by their property dumping.


----------



## room305

fatmanknows said:
			
		

> Bring it on.......my vulture fund is in place ......won't be too long now before the first carcacces are found.


 
 If you think that you will be able to make a killing in a collapsing housing market by buying property, then you my friend will get very, very badly burnt.


----------



## homeowner

walk2dewater said:
			
		

> Who needs to borrow much when you've got little or no debt, a pile of cash, and vendors flogging their properties for ever greater discounts?  Jumbo mortgages are for suckers.



If you had bought a few years ago when you started saving your pile of cash you'd have a nice bit of profit built up by now in your home, in fact you'd have far outpaced your current savings.  You could have sold this year to one of the suckers out there and pocketed a shed load of cash, waited for the crash and then buy back in at a muich lower price.  Oh wait....you didnt buy a few years ago because you were waiting for the crash.....which never came and you're still waiting.


----------



## Guest107

homeowner said:
			
		

> Oh wait....you didnt buy a few years ago because you were waiting for the crash.....which never came and you're still waiting.



Did the dude not sell this year and go back renting WHILE he waits to time his re-entry


----------



## SHARP

binman said:
			
		

> I presume your tounge is firmly in your cheek. The reasons mentioned by whathome:
> 
> 
> 
> To which I'd add rising unemployment and the associated falling consumer spending (after the SSIA boom) will lead banks to firmly tighten their lending policies.
> 
> I'm sure you all recall the 2.5 times main salary / 1 times lower salary rule that used to operate back in the days of 6 to 7% mortgage interest? I can forsee these rules, or a variation on them, being re-imposed (either by the banks themselves or by the Central Bank)
> 
> When the crash comes, your dream home might be 20% cheaper to buy than it is now, but you will not be able to borrow anything like as much as you can now either.


 
Posts like this gets my brain spinning and I think it does others too.

Yes, I have a nice house, but I know I could "comfortably" afford a bigger house in 2-3 years time - but if this does happen, does it then mean that I won't be able to go to the bank and re-mortgage and buy the newer property? I think some people are thinking like this also and it remains a lingering doubt in the back of my head:

Most people get the largest mortgage the bank will give them, so they can get the biggest house they can get (as when the rates rise, they won't be able to get/build the new big house and will "have missed the boat"


My questions to the bulls

Will my kids look at me in 10-15 years time in my decent sized house, wondering why they don't live in the 3,000 sq foot house their cousins are living in?


----------



## bearishbull

bogwarrior said:
			
		

> as a matter of interest, how would this scenario play out? ie what is the 'best case' scenario for the overall economy in a slowdown?
> 
> if house price increases level off and start to track inflation I'd imagine we're still going to see large-scale dumping of investment property ( the capital appreciation is what is driving the market, not the yields).
> The building boom would certainly slow down, putting god knows how many out of work. This would in turn lead to many of the foreign workers employed in the building trade to move on to greener pastures, resulting in even more empty properties. And the whole thing goes cyclic with more layoffs - this time in the industries that service the building trade ie shops, diy stores, estate agents etc
> 
> So, does anyone have an idea how an 'optimal' slowdown would play out?
> 
> I won't be crying into my tea for any investor who gets burned in a slowdown, but I'm afraid of the consequences for the rest of the country.


 This is what the soft landing is impossible unless rents rise substantially which given ever increasing supply of rental properties is highly unlikely. This is why i beleive a significant correction (20-50% real falls over next decade) is ineviatable, when capital gains stop coming the greedy will head for the door.


----------



## fatmanknows

room305 said:
			
		

> If you think that you will be able to make a killing in a collapsing housing market by buying property, then you my friend will get very, very badly burnt.


 
Don't worry about me..........the This post will be deleted if not edited to remove bad language will be right of it before I'll be penning any cheques.


----------



## homeowner

SHARP said:
			
		

> My questions to the bulls
> 
> Will my kids look at me in 10-15 years time in my decent sized house, wondering why they don't live in the 3,000 sq foot house their cousins are living in?



Erm, i'm not a bull but ......

if they do, give them a good clip around the ear and learn them some manners.


----------



## Calina

homeowner said:
			
		

> If you had bought a few years ago when you started saving your pile of cash you'd have a nice bit of profit built up by now in your home, in fact you'd have far outpaced your current savings. You could have sold this year to one of the suckers out there and pocketed a shed load of cash, waited for the crash and then buy back in at a muich lower price. Oh wait....you didnt buy a few years ago because you were waiting for the crash.....which never came and you're still waiting.


One of the problems I have with statements like this is it appears to assume that a few years ago, *everyone* could afford to buy something. They couldn't. A lot of them still can't, even more so because house prices went up so much faster than incomes did. But there's no need to criticise them for saving in the meantime. I would have assumed it was what you did up front, right?


----------



## CelloPoint

fatmanknows said:
			
		

> The beads of perspiration from those who bailed in against all logic beginnig to drip quicker and quicker.
> 
> Bring it on.......my vulture fund is in place ......won't be too long now before the first carcasses are found.
> 
> 
> 
> Anybody watched 'Treasure of Sierre Madre' recently. Dusted it down on the video shelf the other day. Cracking View. Human nature does'nt change much down the years.



Indeed, the history of human nature doesn't change much. Watch out for the 'dead cat bounce' though - it's cocky guys like you that will get nabbed.


----------



## Calina

SHARP said:
			
		

> My questions to the bulls
> 
> Will my kids look at me in 10-15 years time in my decent sized house, wondering why they don't live in the 3,000 sq foot house their cousins are living in?



I'd be interested to know what the average house size is. I grew up in 1200sq ft bungalow, and all this talk of 3000sq ft is starting to melt my brain. Are their people who seriously judge their success in life by how big the house is? Do you know how hard it is to clean 3000 sq foot of house? 

It's not the size of the house which makes a home.


----------



## homeowner

Calina said:
			
		

> One of the problems I have with statements like this is it appears to assume that a few years ago, *everyone* could afford to buy something. They couldn't. A lot of them still can't, even more so because house prices went up so much faster than incomes did. But there's no need to criticise them for saving in the meantime. I would have assumed it was what you did up front, right?



Hold your horses there.  I was replying to the poster who said he had a pile of cash saved.  I wasnt talking about everyone, or assuming about everyone or saying anything about *everyone*.


----------



## whathome

I wonder if Irish people played too much Monopoly as children

The general rule was buy as many properties as you could as quickly as possible - well apart from Kimmage or Crumlin. Just as now, nobody paid attention to rental yield. Everyone wanted Shrewsbury Road which had an 8% yield as a site only! Grafton St paid 8.75% 
Poor old Kimmage and Crumlin - if you were stuck with them, you could make them scary with a hotel or two. 

Did anyone ever pay attention to yield in Monopoly? No

Did prices ever drop in Monopoly? No.

We learned about property by playing a game that was flawed! I blame Monopoly.


----------



## Bedsit

CelloPoint said:
			
		

> Slightly off topic, I know, but this is somthing that David McWilliams is predicting - the blame game will go on for years whether it's against immigrants, the government, the banks, estate agents, politicians, landlords etc.
> 
> Immigrants just won't put up with it, and they'll move to the next building site (along with young Irish people).


Just to clarify the immigrant issue as I think this will be a big talking point in the future. In my opinion there are two broad categories of immigrants in Ireland. The first are EU nationals (Eastern European mainly) who have the option of moving to another EU country in search of greener pastures. Then there is the second category, Non EU nationals who are largely on work permits, work visas etc and who cannot change jobs or country that easily. These are the people who have increasingly bought into the housing bubble in recent years. These immigrants will have no appetite for selling up and leaving at a loss. Secondly many of these immigrants are here with a view of staying permanently or at least until they are granted citizenship. This is where I think we will have a real problem.


----------



## walk2dewater

homeowner said:
			
		

> If you had bought a few years ago when you started saving your pile of cash you'd have a nice bit of profit built up by now in your home, in fact you'd have far outpaced your current savings. You could have sold this year to one of the suckers out there and pocketed a shed load of cash, waited for the crash and then buy back in at a muich lower price. Oh wait....you didnt buy a few years ago because you were waiting for the crash.....which never came and you're still waiting.


 
You sound a little smug my friend.  The next installment on the roller coaster is fear.


----------



## homeowner

walk2dewater said:
			
		

> You sound a little smug my friend.  The next installment on the roller coaster is fear.



You are very quick to call people suckers and point out how clever you are for waiting for this crash.

I dont think its smug of me to point out that you have placed yourself at a disadvantage by sitting on cash that is depreciating in value as inflation and house prices rise faster than you can save.

Dont dish it if you cant take it.


----------



## room305

fatmanknows said:
			
		

> Don't worry about me..........the This post will be deleted if not edited to remove bad language will be right of it before I'll be penning any cheques.



So probably a decade away. Meanwhile inflation will be eating up the value of your savings faster than the nominal value of property is falling.

I would forget about making a killing on the inevitable casualties of Ireland's property collapse but concentrate instead on the altogether more difficult task of preserving the value of your own wealth.


----------



## Bedsit

*US mortgage market rebounds on brighter outlook*



			
				Irish Times said:
			
		

> US mortgage applications rose for the first time in four weeks as long-term home loan interest rates plunged to their lowest levels since March, data from the industry's main trade group showed today.
> 
> The Mortgage Bankers Association (MBA) in a statement said its seasonally adjusted index of mortgage application activity for the week ended August 4th rose 4.9 per cent to 553.3 from the previous week's 527.6.
> 
> Borrowing costs on 30-year fixed-rate mortgages last week averaged 6.45 per cent, down from 6.62 per cent in the previous week and the lowest since the week ending March 24th.
> 
> "The worst of the housing market is behind us," said Richard Yamarone, chief economist at Argus Research in New York, before the MBA data was published.
> 
> "That's simply because the two primary drivers of housing - interest rates and demographics - are improving."


 
[broken link removed]

I guess everything is hunky dory again!!


----------



## walk2dewater

homeowner said:
			
		

> You are very quick to call people suckers and point out how clever you are for waiting for this crash.
> 
> I dont think its smug of me to point out that you have placed yourself at a disadvantage by sitting on cash that is depreciating in value as inflation and house prices rise faster than you can save.
> 
> Dont dish it if you cant take it.


 
You're making a lot of assumptions about my financial situation, arnt you? But lets not bring it up, and I won't guess yours.

Im talking about the current round of sheep getting fleeced to prop up the pyramid. I make no bones about calling buyers at todays prices "suckers" or "saps"; what else do you call a buyer who borrows x10 their salary to buy something thats gone up x3 in price in <10yrs?

Astute?


----------



## Duplex

whathome said:
			
		

> I wonder if Irish people played too much Monopoly as children
> 
> The general rule was buy as many streets as you could as quickly as possible - well apart from Kimmage or Crumlin. Just as now, nobody paid attention to rental yield. Everyone wanted Shrewsbury Road which had an 8% yield as a site only! Grafton St paid 8.75%
> Poor old Kimmage and Crumlin - if you were stuck with them, you could make them scary with a hotel or two.
> 
> Did anyone ever pay attention to yield in Monopoly? No
> 
> Did prices ever drop in Monopoly? No.
> 
> We learned about property by playing a game that was flawed! I blame Monopoly.


 
Good analogy, but in Monopoly the supply of streets is fixed, as is the supply of money and the number of participants. In the 'Adult' version these constants are variable and cyclical.


----------



## whathome

Bedsit said:
			
		

> I guess everything is hunky dory again!!


 
If only the same could be said about the property market in Ireland


----------



## Duplex

Bedsit said:
			
		

> *US mortgage market rebounds on brighter outlook*
> 
> 
> 
> [broken link removed]
> 
> I guess everything is hunky dory again!!


 

Watch the yield curve on American Bonds.  Long dated T bills are up and down at present.  

http://www.bloomberg.com/markets/rates/index.html


----------



## homeowner

walk2dewater said:
			
		

> Im talking about the current round of sheep getting fleeced to prop up the pyramid. I make no bones about calling buyers at todays prices "suckers" or "saps"; what else do you call a buyer who borrows x10 their salary to buy something thats gone up x3 in price in <10yrs?
> 
> Astute?



You cant borrow x10 your salary. x5 is the most the banks will give you and that is only recently.  It used to be 3.5 times your salary plus 1.5 times your partner's salary.  So I dont understand your argument.  

Also I would like to point out that people under the age of say 26 who bought at their currently salary will most likely see a large increase in their salary as they progress in their careers and double incomes when they move in with someone, so what might seem like a huge multiple of salary now will not be so big in 5-10 years time.  In fact those people will be in the best position for clearing their mortgages off much earlier.


----------



## whathome

Duplex said:
			
		

> Good analogy, but in Monopoly the supply of streets is fixed, as is the supply of money and the number of participants. In the 'Adult' version these constants are variable and cyclical.


 
I wonder will the government issue "Get out of jail FREE" cards.

Winning £10 in a beauty competition was my favourite   Thank God for Community Chest!


----------



## Bedsit

homeowner said:
			
		

> Also I would like to point out that people under the age of say 26 who bought at their currently salary will most likely see a large increase in their salary as they progress in their careers and double incomes when they move in with someone, so what might seem like a huge multiple of salary now will not be so big in 5-10 years time.  In fact those people will be in the best position for clearing their mortgages off much earlier.


This is assuming that there will be no downturn in the employment sector. One has to remember that a large number of the jobs created in recent years have been property related such as in retail, banking, law firms etc. Many of these jobs will disappear along with the property boom.


----------



## howstrange

I have been watching this post for quite a while and am fascinated by it!! I am a renter myself and have been hoping to get on the property ladder for the last couple of years but have held off as I have believed for quite a while that property is way overvalued and the inevitable will happen! In that 2 years I have been told by parents, friends etc "get in there now", "buy before it is too late" etc etc. I have held firm though sticking to my beliefs but at the same time laughed at cos I am waiting for the bubble to burst!! I just didnt want to buy a badly constructed gaff that is in a place I had no interest in living just to get on the "property ladder". Anyway for the 1st time I am starting to think I did the right thing! 

This post has been dragging on with different viewpoints but would be keen to see some more concrete indications of a turning property market. My own experiences and observations have been as follows:

- Friend had a house for sale in Kerry for a year and had to drop the price to generate interest. Sold it for €30K less!
- Look on Myhome.ie at Inchicore, apt block called the Tramyard. At the money there are 6 apts up for sale and I think some have been for a while. Are they all going to sell for the asking price??
- Mate of mine renting in new apt block in Cork street. Most of the apts are empty!
- A bulk of amateur speculators hoping for a quick buck!

Would like to see other peoples observations too. In my opinion these are the 1st signs. With oil and energy prices only heading north in the near future adding inflationary pressures, I think there are many more interest rate increases on the way. Investors realising there is no many to be made will start selling rapidly. Basic economic theory, supply > demand => price goes down!! In this case rapidly!!!


----------



## Duplex

whathome said:
			
		

> I wonder will the government issue "Get out of jail FREE" cards.
> 
> Winning £10 in a beauty competition was my favourite  Thank God for Community Chest!


 

I always felt a bit of a fraud when I pulled that beauty competition winner card.


----------



## StoppedClock

HowStrange, you have summed up my current position and thoughts exactly.  If the only thing I can afford is a crap house then frankly I am not interested, Ireland is good place to live but its not THAT good.


----------



## edo

Yeah Bedsit - be careful what you read into the US markets at moment -

 its like the Grand Old Duke of York and his ten thousand men at the mo. Most Commentators are agreed that the US is slipping toward recession at the moment - how fast and how bad it will be is the main question - The Markets really haven't a clue at the moment - any scrap of info will be used as evidence that its going this way or that - That there would be a rebound in the mortgages market is no surprise given Bernanke held off on another interest rate rise for the moment (many will take the chance to refinance as opposed to buying) and gives the herd a chance for a good auld jog this week -
 the basic fundementals haven't changed and one stray missile in the ME could have them all the Bear Cave by the end of the week.


----------



## whizzbang

Remix said:
			
		

> They might need to dig out and dust off the "price-reduced" and "must sell" boards that have been in storage for the past ten years or so!



I think they will make up new "soft landing price" boards, nobody wants to use dirty words like "reduction",


----------



## Dusty

howstrange said:
			
		

> I have been watching this post for quite a while and am fascinated by it!! I am a renter myself and have been hoping to get on the property ladder for the last couple of years but have held off as I have believed for quite a while that property is way overvalued and the inevitable will happen! *In that 2 years* I have been told by parents, friends etc "get in there now", "buy before it is too late" etc etc. I have held firm though sticking to my beliefs but at the same time laughed at cos I am waiting for the bubble to burst!! I just didnt want to buy a badly constructed gaff that is in a place I had no interest in living just to get on the "property ladder". Anyway for the 1st time I am starting to think I did the right thing!
> 
> This post has been dragging on with different viewpoints but would be keen to see some more concrete indications of a turning property market. My own experiences and observations have been as follows:
> 
> - Friend had a house for sale in Kerry for a year and had to drop the price to generate interest. Sold it for €30K less!
> - Look on Myhome.ie at Inchicore, apt block called the Tramyard. At the money there are 6 apts up for sale and I think some have been for a while. Are they all going to sell for the asking price??
> - Mate of mine renting in new apt block in Cork street. Most of the apts are empty!
> - A bulk of amateur speculators hoping for a quick buck!
> 
> Would like to see other peoples observations too. In my opinion these are the 1st signs. With oil and energy prices only heading north in the near future adding inflationary pressures, I think there are many more interest rate increases on the way. Investors realising there is no many to be made will start selling rapidly. Basic economic theory, supply > demand => price goes down!! In this case rapidly!!!



But will they drop back the 20+% that they have increased in the last two years whilst you have been waiting for the bubble to burst? In some localised areas perhaps they will, but I don't see the average house price dropping that much IMHO.


----------



## StoppedClock

What do people think are the percentage of specuvestors who will be happy with nominally flat prices, (i.e. the soft landing) and therefore hold on to properties for the long term


----------



## Guest126

What is the point in whether or not they will go back to where they were two years ago?

Surely all that matters now is where will they go next?


----------



## SHARP

Calina said:
			
		

> I'd be interested to know what the average house size is. I grew up in 1200sq ft bungalow, and all this talk of 3000sq ft is starting to melt my brain. [/b]Are their people who seriously judge their success in life by how big the house is? [/b]Do you know how hard it is to clean 3000 sq foot of house?
> 
> It's not the size of the house which makes a home.


 
Oh Yes, without a doubt, you wouldn't believe how people are acting (and its not all Dublin Suburbs that is buzzing with keeping up with the Jones' - its alive and well in the country areas!!

I know of one couple and their kids that have recently moved into a big house that go around telling everyone that their house is the biggest in the "family" i.e. siblings, cousins etc. The adults say this!

They also had to buy a bigger newer car when someone bought a newish car. Their little girl was telling people that her Mammy and Daddy had a bigger car and house than everyone else.

Then, when someone got a new TV, they went out and bought a bigger one and their teenage daughter said to their customer that they now have the biggest TV too.

This is modern Ireland alive and well!


----------



## Calina

homeowner said:
			
		

> You cant borrow x10 your salary. x5 is the most the banks will give you and that is only recently. It used to be 3.5 times your salary plus 1.5 times your partner's salary. So I dont understand your argument.
> 
> Also I would like to point out that people under the age of say 26 who bought at their currently salary will most likely see a large increase in their salary as they progress in their careers and double incomes when they move in with someone, so what might seem like a huge multiple of salary now will not be so big in 5-10 years time. In fact those people will be in the best position for clearing their mortgages off much earlier.



This presupposes the following:

1) no change in unemployment
2) ongoing high inflation including salary inflation

The problem, as I see it, is that the average salary in Ireland is somewhere between one eighth and one eleventh the average house price depending on which lot of statistics you read. Certainly the average house price in Dublin - where I live and work - is more than 10 times my salary which is approximately double what it was when I was 26 and additionally, I also earn well in excess of the average salary. In some respects, the maths do not actually add up. 

I don't see salary inflation being very likely at the moment. Basically, we're sliding in competitivity as regards a lot of the rest of the world. Much of employment growth is in the construction industry. IBEC did their absolute best to limit reward in the latest collective deal and anyway, a massive number of people are not signed up to the National Wage Agreement. I know people who are earning less in real terms now than they were 5 years ago. 

For me, the issue is that lending criteria were heavily relaxed over the past three or four years, and now loan terms are increasing heavily too. The net result is that even if monthly payments appear to be equivalent to three, for years ago, people are carrying more debt for longer, and they are massively open to shocks. When the difference between a 25 year mortgage and a 30 year mortgage monthly repayment is less than 100E, and people can't afford the 25 year mortgage, then they are probably at the very, very limit of affordability, in a market of rising rates. 

Anecdotally, there are stories of people getting far in advance of the 5x salary because they're trainee accountants or civil servants. I'm not absolutely sure how true those stories are though. 

Those people whom you expect to be in the best position to clear their mortgages earlier need to be living in accommodation that suits their long term needs. I'd be surprised if there were many sub 26 year olds in that position, to be honest with you, unless they were saving for a house and still have their confirmation money intact, certainly in Dublin. Possibly the same outside Dublin given the disparity in average incomes.

The problem is, because there is a massive disparity between rents and mortgages, and the norm is for them to track, there are three possible scenarios 1) rents rise to meet mortgages 2) property prices fall so that mortgage repayments meet rents or 3) combination of the two. Only in one of those scenarios is it possible to avoid property coming down in price, and that's no guarantee of continued rises. The problem is rent is largely dictated by salaries and if average salaries are not rising, it will be difficult for rents to go up wholesale unless there's a crash in rental supply. 

Which is possible, but given the massive supply in actual accommodation units, is unlikely.


----------



## SteelBlue05

Dusty said:
			
		

> But will they drop back the 20+% that they have increased in the last two years whilst you have been waiting for the bubble to burst? In some localised areas perhaps they will, but I don't see the average house price dropping that much IMHO.


 
Thats the big question, I dont think so. House in my area have gone up 40% in 18 months, its a crazy increase but are they going to decrease 50% or more in order for people to see negative equity? No.


----------



## SHARP

PS - All the money is borrowed:
For the new car
For the new TV
and a 35 year mortgage at 35 years of age

I have a feeling they will suffer in the next couple of years


----------



## howstrange

CapitalCCC said:
			
		

> What is the point in whether or not they will go back to where they were two years ago?
> 
> Surely all that matters now is where will they go next?



Agreed. Sure there was people who made a killing even in the last 2 years!! The IO and 100% mortgages drove prices through the roof. FTB's thought it was 10 Christmas's at once. But I really think things have changed now. Would like to see more examples of an increase in supply before we can say things are turning though.


----------



## cjh

Quote SHARP - "I know of one couple and their kids that have recently moved into a big house that go around telling everyone that their house is the biggest in the "family" i.e. siblings, cousins etc. The adults say this!

They also had to buy a bigger newer car when someone bought a newish car. Their little girl was telling people that her Mammy and Daddy had a bigger car and house than everyone else.

Then, when someone got a new TV, they went out and bought a bigger one and their teenage daughter said to their customer that they now have the biggest TV too."

- Anyone who'd listen to them would be a bigger ejit!


----------



## Guest107

homeowner said:
			
		

> You cant borrow x10 your salary. x5 is the most the banks will give you and that is only recently.  It used to be 3.5 times your salary plus 1.5 times your partner's salary.  So I dont understand your argument.



You are WRONG yourself. That sort of explains why you dont understand the argument.

It USED  to be 2.5 times main income and 1 x second income until the late 1990's . 

It USED to be 2.5 times main income up to maximum 80% until the late 1970's


----------



## bogwarrior

man, you don't need a new house, you need new friends!!
these people you know sound appalling!!



			
				SHARP said:
			
		

> Oh Yes, without a doubt, you wouldn't believe how people are acting (and its not all Dublin Suburbs that is buzzing with keeping up with the Jones' - its alive and well in the country areas!!
> 
> I know of one couple and their kids that have recently moved into a big house that go around telling everyone that their house is the biggest in the "family" i.e. siblings, cousins etc. The adults say this!
> 
> They also had to buy a bigger newer car when someone bought a newish car. Their little girl was telling people that her Mammy and Daddy had a bigger car and house than everyone else.
> 
> Then, when someone got a new TV, they went out and bought a bigger one and their teenage daughter said to their customer that they now have the biggest TV too.
> 
> This is modern Ireland alive and well!


----------



## Guest126

I was thinking that too, the guy who has a wife that is going to leave him unless she gets a new BMW...well he must be VERY stupid or VERY VERY ugly!!!


----------



## Contrarian

Alot of people are being lent 6 & 7 times their salary. I rang around various mortgage lenders and was offered 7 times my salary by 2 lenders.


----------



## homeowner

2Pack said:
			
		

> You are WRONG yourself. That sort of explains why you dont understand the argument.
> 
> It USED  to be 2.5 times main income and 1 x second income until the late 1990's .
> 
> It USED to be 2.5 times main income up to maximum 80% until the late 1970's



With BOI in 2002 it was 3.5 times your salary plus 1.5 times your partner's salary.


----------



## SHARP

bogwarrior said:
			
		

> man, you don't need a new house, you need new friends!!
> these people you know sound appalling!!


 
LOL!!
Unfortunately they are "family" i.e. I married into this mess of a family


......and they ARE appalling!


----------



## Guest107

Contrarian said:
			
		

> Alot of people are being lent 6 & 7 times their salary. I rang around various mortgage lenders and was offered 7 times my salary by 2 lenders.



are you a PQ accountant or low down a guaranteed civil service salary scale of some sort, if they are lending against future income that is not guaranteed by exams or scales then that was a truly insane multiple

also was it IO or Repayment mortgage ??


----------



## SHARP

CapitalCCC said:
			
		

> I was thinking that too, the guy who has a wife that is going to leave him unless she gets a new BMW...well he must be VERY stupid or VERY VERY ugly!!!


 
Well he's not very,very ugly, but I will agree on the stupid part. But as you are aware, people will do desperate things in order to save a marriage, especially when there are kids involved.

"Till death due us part, in sickness and in health, for richer or poorer"

I personally think she is sick and going through an early mid life crisis.


----------



## ducati-steve

My 2 cents on 5x, 6x or 7x


It actually doesn't matter - what is important is your net available income (after tax, car loan, etc etc). Can your net available income comfortably cover the repayments on your mortage with a "buffer" for interest rate increases (and pay for your lifestyle).

If yes - then great, if no then "no go" but 2x 4x or 6x no longer has relevance .... its an old rule for a different tax system where your take home pay was a much smaller % of your total.

DS


----------



## StoppedClock

"Self emplyed" IT contractor lived in Oz till September 04 so < 2 years employment history in Ireland, offered 6.5 times my salary, 92% mortgage


----------



## Guest126

So you were not joking, the wife is gone unless she gets a new BMW...I had thought (hoped!) it was a slight exaggeration!!


----------



## Guest107

homeowner said:
			
		

> With BOI in 2002 it was 3.5 times your salary plus 1.5 times your partner's salary.


Are you not aware of any historic information any further back than 2002 , many of my assumptions about the lunacy nowadays aree based on long run data not post 2002 froth.

In 1996, 10 years ago, mortgages were

1. Max 90% 
2. Based on 2.5x main and 1x second income
3. Repayment not IO
4. 20 year or maybe 25 year repayment terms.

a 35 year old who got a mortgage then will normally be clear by 55 . Tax was higher then so your take home was a lot smaller as a % of income.

In 2006 its 

1. max 100% 
2. mega x income , 5x-7x main in some cases.
3. IO so you still owe the lot in 
4. 35 years, when you are 70


----------



## StoppedClock

FYI in Oz not only do you (as at end 04) need 10% deposit you also needed to prove where it came from i.e. not put in your account from folks, credit card etc. the night before, referred to over there as "Genuine Savings".

That said didn't stop their bubble...


----------



## Persius

homeowner said:
			
		

> With BOI in 2002 it was 3.5 times your salary plus 1.5 times your partner's salary.


 
You are correct in theory, which is one reason I thought I wouldn't be able to afford a house back in 2001 (I still don't have one), even though I could actually afford to meet the mortgage repayments. However talking to some people who did buy, and other anecdotal evidence, the banks regularly offered more on an "individual basis".

Now in theory, a single person can borrow up to 5 times their gross salary (if I remember correctly). As stated in previous posts, and often heard in conversations, the banks regularly offer more than this on an "individual basis". I think the likes of TSB and BoS are much less flexible as their loan quotations are made via call centers. However the mortgage advisors in the likes of BoI and EBS seem to have much more flexibility in deciding how big a mortgage to offer someone. And the brokers seem to also be able to get much more than the 5 times one salary. Did you see "I'm an adult, get me out of here"? If I remember correctly, the host was regularly able to get mortgages well above 5 times earnings to singles without any debt.


----------



## homeowner

2Pack said:
			
		

> Are you not aware of any historic information any further back than 2002 , many of my assumptions about the lunacy nowadays aree based on long run data not post 2002 froth.
> 
> In 1996, 10 years ago, mortgages were
> 
> 1. Max 90%
> 2. Based on 2.5x main and 1x second income
> 3. Repayment not IO
> 4. 20 year or maybe 25 year repayment terms.
> 
> a 35 year old who got a mortgage then will normally be clear by 55 .
> 
> In 2006 its
> 
> 1. max 100%
> 2. mega x income , 5x-7x main in some cases.
> 3. IO so you still owe the lot in
> 4. 35 years, when you are 70



Eh whats the point of all this? 


I replied to a post that said banks were lending x10 salary which they are not.  I mentioned a previous loan ratio of 3.5 times and now you are quoting multiplies back to 1996 and telling me I am "WRONG".

Move on.


----------



## Guest107

homeowner said:
			
		

> Eh whats the point of all this?


A mortgage of 3.5 x salary or higher is very recent , 2x or 2.5x is the long run historic multiple . 

It is utterly wrong to use 3.5x as a starting point when looking at the sillyness the banks are encouraging.


----------



## homeowner

Persius said:
			
		

> You are correct in theory, which is one reason I thought I wouldn't be able to afford a house back in 2001 (I still don't have one), even though I could actually afford to meet the mortgage repayments. However talking to some people who did buy, and other anecdotal evidence, the banks regularly offered more on an "individual basis".
> 
> Now in theory, a single person can borrow up to 5 times their gross salary (if I remember correctly). As stated in previous posts, and often heard in conversations, the banks regularly offer more than this on an "individual basis". I think the likes of TSB and BoS are much less flexible as their loan quotations are made via call centers. However the mortgage advisors in the likes of BoI and EBS seem to have much more flexibility in deciding how big a mortgage to offer someone. And the brokers seem to also be able to get much more than the 5 times one salary. Did you see "I'm an adult, get me out of here"? If I remember correctly, the host was regularly able to get mortgages well above 5 times earnings to singles without any debt.



Yeah its around 5 times now but I believe you that people are being offerred more than that.  The banks keep moving the yardstick.  I only hope those people can afford the repayments.


----------



## Persius

whathome said:
			
		

> Further comparison to the US market. They're saying that the US is over-priced and going to crash, what about this comparison?
> 
> $640,000 - 915 sq ft in Ballybough, Dublin 3 : [broken link removed]
> 
> $640,000 - 960 sq ft in New York's extremely wealthy Upper East Side : http://realestate.nytimes.com/+comshare/vulisting.asp?Lid=253-NS6060810


 


			
				StoppedClock said:
			
		

> What do people think are the percentage of specuvestors who will be happy with nominally flat prices, (i.e. the soft landing) and therefore hold on to properties for the long term


 
For the sake of discussion, some bullish arguements on Irish property

1) One of the reasons why it really "is different" in Ireland (mainly thinking of the cities) is the low density of housing. It has been said previously that the price someone pays for a house is not just the price of the time and materials that went into building the house, but also the price of the site. In a low density city such as Dublin, the price of sites (at least those in centralish locations) will be higher per household than the price of an equivalent site in a higher density city such as New York.

2) Specuvestors who were in it for the quick buck could be easily convinced to take a "long term view", and not try to sell in a flat market. Considering our obsession with property you could easily imagine this sort of conversation between a specuvestor (S) and his family/friends/bank manager (F) etc

S: The price of my investment property has plateaued out. There are no more capital gains to be got. I think it's time to sell.
F: Now mighn't be the best time to sell. You may have to accept a lower price than normal. Remember property is the best investment class in the long term. You should hold on to it as a pension.
S: Yeah, but the rent I'm getting isn't covering my mortgage. I have to contribute €500 myself every month
F: But this is standard for any type of investment. If you were in a pension fund you would also have to contribute a sum of money every month. With property, the tennant contributes more than half of that money. Besides rents will rise over time.
S: So you think I should continue ploughing money into my property
F: Sure. In the long term, prices will go up again. In 25 years it'll be worth a fortune.
S: Yeah, maybe you're right

3) ...

Opinions?


----------



## Afuera

homeowner said:
			
		

> Also I would like to point out that people under the age of say 26 who bought at their currently salary will most likely see a large increase in their salary as they progress in their careers and double incomes when they move in with someone, so what might seem like a huge multiple of salary now will not be so big in 5-10 years time. In fact those people will be in the best position for clearing their mortgages off much earlier.



Huge assumptions there! Unless you're a civil servant there's no guarantee you'll be making more in your chosen career in X years. Even civil servants may be forced to take pay cuts if the government runs into problems raising the moola to pay them!

In the past homeowners were lucky to have high inflation wipe out the real debt on their mortgage. Currently though, all of the central banks around the world have their sights set on fighting inflation so this is a scenario that is unlikely to repeat itself. People with jumbo mortages hanging over them for most of their life will not be in a position to do much at all.


----------



## StoppedClock

Persius said:
			
		

> 2) Specuvestors who were in it for the quick buck could be easily convinced to take a "long term view", and not try to sell in a flat market.


 
If they have a choice then perhaps they will hold on for the long term but if it is an IO and I is going up then what?


----------



## Dusty

howstrange said:
			
		

> Agreed. Sure there was people who made a killing even in the last 2 years!! The IO and 100% mortgages drove prices through the roof. FTB's thought it was 10 Christmas's at once. But I really think things have changed now. Would like to see more examples of an increase in supply before we can say things are turning though.



My point was that in those two years that you have been waiting for the long promised collapse in house prices they have risen significantly and are continuing to do so. Do you really think they will drop back that far to make your wait worth while or would you have been better off buying two years ago?

If you are buying a home (as opposed to an investment) it really doesn't matter as it will iron itself out in the long run (10-20 years) and we'll all look back and reminisce on how cheap houses where in 2006!


----------



## Afuera

Persius said:
			
		

> 2) Specuvestors who were in it for the quick buck could be easily convinced to take a "long term view", and not try to sell in a flat market.



This might be possible in a flat market but there's a very real possibility of some areas actually seeing drops in prices. If you're being told that "your property has lost 20,000 this year alone", I'd say it would start to feel a lot like deadweight.


----------



## howstrange

Dusty said:
			
		

> My point was that in those two years that you have been waiting for the long promised collapse in house prices they have risen significantly and are continuing to do so. Do you really think they will drop back that far to make your wait worth while or would you have been better off buying two years ago?
> 
> If you are buying a home (as opposed to an investment) it really doesn't matter as it will iron itself out in the long run (10-20 years) and we'll all look back and reminisce on how cheap houses where in 2006!



I totally agree with you. If I was buying a home that I was happy to stay in for a long time then price crashes are irrelevant. But when you all you can afford is some crap gaff in ballygobackwards and people are telling you buy it cos you can trade up in a couple of years then market stability is a factor! TBH I cant believe how mad prices have gone in the last year or so and if I had bought 2 years ago I could have made money. But thats history and this post is about 'what will happen'!! Do you think that it would be wise for a guy like me to buy NOW in some shack I dont want?? I dont! Its because of the recent price surges that I think the landing will be harder and faster! Everyone knows it is a bubble and bubbles always burst!!


----------



## Afuera

Dusty said:
			
		

> If you are buying a home (as opposed to an investment) it really doesn't matter as it will iron itself out in the long run (10-20 years) and we'll all look back and reminisce on how cheap houses where in 2006!



10-20 years sounds like a very long time to stay stuck in a small property, in a badly serviced area, that was only bought to get on the ladder in the first place!


----------



## Remix

Bedsit said:
			
		

> *US mortgage market rebounds on brighter outlook*
> 
> 
> 
> [broken link removed]
> 
> I guess everything is hunky dory again!!


 
What a very strange headline from the Times based on such a small data blip!

Over to finfacts :

*US weekly mortgage applications down 24.9% compared with same week in 2005*



> On an unadjusted basis, the Index increased 4.3 percent compared with the previous week but was down 24.9 percent compared with the same week one year earlier


 
http://www.finfacts.com/irelandbusinessnews/publish/article_10006885.shtml


----------



## whathome

Persius said:
			
		

> One of the reasons why it really "is different" in Ireland (mainly thinking of the cities) is the low density of housing. It has been said previously that the price someone pays for a house is not just the price of the time and materials that went into building the house, but also the price of the site. In a low density city such as Dublin, the price of sites (at least those in centralish locations) will be higher per household than the price of an equivalent site in a higher density city such as New York.


 
If you're concerned about density, what about the area with the second best salaries in the US.  Silicon Valley : avg salary $62,600 (€49,000)

This one is in Sunnyvale in the heart of silicon valley, California.

$639,000 - Detached, 1600 sq feet, 3 bedrooms, 2 bathrooms, 2 car garage 


$640,000 - 915 sq ft in Ballybough, Dublin 3 : [broken link removed]


----------



## ivuernis

Dusty said:
			
		

> If you are buying a home (as opposed to an investment) it really doesn't matter as it will iron itself out in the long run (10-20 years) and we'll all look back and reminisce on how cheap houses where in 2006!


Of course it matters! There is no guarantee of anything in 10-20 years time.


----------



## Calina

Dusty said:
			
		

> If you are buying a home (as opposed to an investment) it really doesn't matter as it will iron itself out in the long run (10-20 years) and we'll all look back and reminisce on how cheap houses where in 2006!



But a lot of those homes that are being bought are being bought with the expectation of being able to trade up within a few years. 

That may not be possible in a very volatile market.


----------



## conor_mc

Dusty said:
			
		

> My point was that in those two years that you have been waiting for the long promised collapse in house prices they have risen significantly and are continuing to do so. Do you really think they will drop back that far to make your wait worth while or would you have been better off buying two years ago?!


 
For me, an emphatic Yes (Edit - in answer to prices dropping back). I can't see any logical reason why the house I bought two years should be worth almost 50% more than what I paid for it. Can you?


----------



## ivuernis

howstrange said:
			
		

> I totally agree with you. If I was buying a home that I was happy to stay in for a long time then price crashes are irrelevant.


 
So, you'd have no problem paying a mortgage that's more than the value of your property?


----------



## CelloPoint

Until I see a photograph of a substantial amount of 'for sale' signs outside some generic apartment complex/housing estate, I will hold off on saying stuff like 'the crash has begun'. I'm still a definite bear though.

Mind you, estate agents might opt to sell housing units via the internet in the event of a mass sell-off in an attempt to avoid the visual deterrent of lots of 'for sale' signs on display.

So has anyone got any decent photographs they can post on AAM? I'll keep my eyes open too, but I don't live in West Dublin...


----------



## StoppedClock

Dusty said:
			
		

> If you are buying a home (as opposed to an investment) it really doesn't matter as it will iron itself out in the long run (10-20 years)


 
If for arguments sake you buy now 300,000 @ 4% you will have annual repayments of roughly 17000 for 30 years.
if they drop by just 10% and you still paid the same repayments you would finish paying 5 years (and 90,000) earlier



			
				Dusty said:
			
		

> and we'll all look back and reminisce on how cheap houses where in 2006!


 
Like the Japanese look longingly back at the 90's


----------



## Contrarian

What are you talking about?


----------



## howstrange

ivuernis said:
			
		

> So, you'd have no problem paying a mortgage that's more than the value of your property?



Of course Id have a problem with it! But at least if you live in a place you are happy in you have some consolation. What about the many that are living in some puny place in a place they hate living paying back a huge mortgage in a place nobody wants to buy, then it would be a major problem!!


----------



## StoppedClock

Contrarian said:
			
		

> What are you talking about?


Who?


----------



## Duplex

I think people look no further than the US to get a flavour of what might happen. Same loose lending standards, same building boom, same consumer boom, etc.

http://thehousingbubbleblog.com/


----------



## Calina

howstrange said:
			
		

> Of course Id have a problem with it! But at least if you live in a place you are happy in you have some consolation. What about the many that are living in some puny place in a place they hate living paying back a huge mortgage in a place nobody wants to buy, then it would be a major problem!!



The concern of a lot of people here is that there is a major chance that this will happen.


----------



## Contrarian

StoppedClock said:
			
		

> If for arguments sake you buy now 300,000 @ 4% you will have annual repayments of roughly 17000 for 30 years.
> if they drop by just 10% and you still paid the same repayments you would finish paying 5 years (and 90,000) earlier
> 
> What do you mean by the above statement? Do you mean if prices dropped? If prices dropped you'd still be paying the same mortgage over the same timeframe.


----------



## Dusty

conor_mc said:
			
		

> For me, an emphatic Yes (Edit - in answer to prices dropping back). I can't see any logical reason why the house I bought two years should be worth almost 50% more than what I paid for it. Can you?



No I can't. However neither do I think that you will see a 50% drop in the price of your house. If\when house prices drop they don't tend to drop that far, people would rather stay put than sell their house at a sustantial amount less than they percieve it to be worth. Only those who are forced to move will do so, most will wait for prices to pick up (much like those now waiting for the bubble to burst!) 

If you're honest you wouldn't sell your house now for what you bought it for two years ago? (If you will give me a call ) you might knock of 10 or 20% if the market slows but any more, I doubt it...


----------



## Calina

Contrarian said:
			
		

> StoppedClock said:
> 
> 
> 
> 
> If for arguments sake you buy now 300,000 @ 4% you will have annual repayments of roughly 17000 for 30 years.
> if they drop by just 10% and you still paid the same repayments you would finish paying 5 years (and 90,000) earlier
> 
> What do you mean by the above statement? Do you mean if prices dropped? If prices dropped you'd still be paying the same mortgage over the same timeframe.
> 
> 
> 
> 
> StoppedClock means that if the value of that house fell by just 10%, ie, you buy the property at 270K instead of 300K, but paid back at the rate that someone who paid 300K, you would pay 90K less and be done with the mortgage in 25 years instead of 30.
> 
> Of course, this presupposes no change in interest rates, and that's not guaranteed. But the point is a 30K drop in house purchase price is not just 30K less in what you spend, it's nearer 90K according to him. I haven't done the maths, but I suspect he's not far off with the figures.
Click to expand...


----------



## Dusty

StoppedClock said:
			
		

> *If* for arguments sake you buy now 300,000 @ 4% you will have annual repayments of roughly 17000 for 30 years.
> * if *they drop by just 10% and you still paid the same repayments you would finish paying 5 years (and 90,000) earlier



If, If.....

What if by the time they drop 10% prices have gone up another 20%?

no-one knows what will happen in this crazy market.


----------



## Contrarian

Thanx for clarifying that, when you look at it that way the importance of buying at the right price becomes even more important due to the interest savings etc


----------



## phoenix_n

Dusty said:
			
		

> No I can't. However neither do I think that you will see a 50% drop in the price of your house. If\when house prices drop they don't tend to drop that far, people would rather stay put than sell their house at a sustantial amount less than they percieve it to be worth. Only those who are forced to move will do so, most will wait for prices to pick up (much like those now waiting for the bubble to burst!)
> 
> If you're honest you wouldn't sell your house now for what you bought it for two years ago? (If you will give me a call ) you might knock of 10 or 20% if the market slows but any more, I doubt it...


 
What they perceive it to be worth will not matter. Try that with your EA and they will say the same. Its what someone is prepared to buy it for. If they dont want to sell at what the market dictates the price to be then they can very well choose not to sell. Dont forget also that people can sell below what they paid for it if they had gained sufficiently equity in prior sales.

You must remember that houses were bought/sold like shares (not all but recent sales) and as such can fall in value when the perceived growth is not realised.



			
				Dusty said:
			
		

> If, If.....
> 
> What if by the time they drop 10% prices have gone up another 20%?
> 
> no-one knows what will happen in this crazy market.


 
And thats the point. Its a crazy market. Its risky


----------



## miju

homeowner said:
			
		

> It seems to me that the people who are predicting doom and gloom here have a vested interest in the market crashing.


 
just to pick up on a quick point here , but would these people not be the current / future housebuyers in this economy of ours? in which case does it not give you a clear indication of what way sentiment is heading?


----------



## howstrange

Dusty said:
			
		

> No I can't. However neither do I think that you will see a 50% drop in the price of your house. If\when house prices drop they don't tend to drop that far, people would rather stay put than sell their house at a sustantial amount less than they percieve it to be worth. Only those who are forced to move will do so, most will wait for prices to pick up (much like those now waiting for the bubble to burst!)
> 
> If you're honest you wouldn't sell your house now for what you bought it for two years ago? (If you will give me a call ) you might knock of 10 or 20% if the market slows but any more, I doubt it...



What about the many joe soaps who have bought a 1 od 2 bed apt as an investment waiting for the capital appreciation and the cash to start rolling in?  How many of these will start to panic when they see prices starting to fall? Will they have the nerve to hold out while they are up to the gills paying 2 mortgages and interest rates all the while increasing?


----------



## Contrarian

Dusty said:
			
		

> No I can't. However neither do I think that you will see a 50% drop in the price of your house. If\when house prices drop they don't tend to drop that far, people would rather stay put than sell their house at a sustantial amount less than they percieve it to be worth. Only those who are forced to move will do so, most will wait for prices to pick up (much like those now waiting for the bubble to burst!)
> 
> If you're honest you wouldn't sell your house now for what you bought it for two years ago? (If you will give me a call ) you might knock of 10 or 20% if the market slows but any more, I doubt it...


 
People that live in their own house may be reluctant to sell but the speculators will exit at the drop of a hat. Remember that up to 40% of new build is bought by 'canny investors'.


----------



## CelloPoint

Contrarian said:
			
		

> People that live in their own house may be reluctant to sell but the speculators will exit at the drop of a hat. Remember that up to 40% of new build is bought by 'canny investors'.



Agree 100%. I've seen talk on this thread of people holding on to their properties because of the psychology of selling below what you paid for it - reasoning like "i'm in it for the long term" etc. 

Investment properties are indeed a different kettle of fish, and whilst PPRs are sticky on the way down, investment properties certainly will "exit at the drop of a hat".

Given the amount of investment property out there (thanks to section 23), the outlook  can only point to one direction.


----------



## homeowner

miju said:
			
		

> just to pick up on a quick point here , but would these people not be the current / future housebuyers in this economy of ours? in which case does it not give you a clear indication of what way sentiment is heading?


Yes but you/those people are only one part of the future home buying sector.  The rest will be made up of apartment and small house owners looking to upgrade, older people looking to downgrade, immigrants and of course new college grads coming along or new ftbs.  Your opinions are valid, but you dont reflect the whole market and your buying power is less than those who have already bought and will upgrade/downgrade.

I forgot to mention investors!  (how could I forget the investors )


----------



## conor_mc

Dusty said:
			
		

> No I can't. However neither do I think that you will see a 50% drop in the price of your house. If\when house prices drop they don't tend to drop that far, people would rather stay put than sell their house at a sustantial amount less than they percieve it to be worth. Only those who are forced to move will do so, most will wait for prices to pick up (much like those now waiting for the bubble to burst!)
> 
> If you're honest you wouldn't sell your house now for what you bought it for two years ago? (If you will give me a call ) you might knock of 10 or 20% if the market slows but any more, I doubt it...


 
But the current "value" of my house isn't based on my house at all, it's based on the sale of similar houses in the area. So if one of my neighbours is forced by circumstance to sell up at the same price I bought at originally, then low and behold, that's what my house is now worth and I'm getting dangerously close to negative equity territory. So just like my house is now worth 50% more, it could in theory be worth 50% less, and all with me still living in it because it's all notional until the house is sold and the cash is in the bank.

Incidentally, if neither you nor I can see any reason why my house is worth 50% more in just two years, do you not think that right there, in that one simple example, is the very reason why the Irish property market stands on a foundation of quicksand that could give way at any moment?


----------



## StoppedClock

conor_mc said:
			
		

> Incidentally, if neither you nor I can see any reason why my house is worth 50% more in just two years, do you not think that right there, in that one simple example, is the very reason why the Irish property market stands on a foundation of quicksand?


 
Great point!!


----------



## Duplex

Remix said:
			
		

> What a very strange headline from the Times based on such a small data blip!
> 
> Over to finfacts :
> 
> *US weekly mortgage applications down 24.9% compared with same week in 2005*
> 
> 
> 
> http://www.finfacts.com/irelandbusinessnews/publish/article_10006885.shtml


 
The Irish Times is pathetic in the quality of its 'economic analysis', who do they think read their paper?   A fine example of why the Internet will pulverise traditional media.


----------



## whathome

homeowner said:
			
		

> Yes but you/those people are only one part of the future home buying sector.


 
Unfortunately we can't get everyone who has ever or will ever buy or sell a house in this country to tell us about sentiment. All we have is this excellent debate.

Although sentiment hasn't done a 180, I think we can say that judging from the majority sentiment in this thread that it has turned slightly. A small change in sentiment is enough to push the market over the edge in my opinion. Then you will have a much larger drop in sentiment as prices stop rising and the outlook gets progressively gloomy.


----------



## redo

whathome said:
			
		

> Unfortunately we can't get everyone who has ever or will ever buy or sell a house in this country to tell us about sentiment. All we have is this excellent debate.
> 
> Although sentiment hasn't done a 360, I think we can say that judging from the majority sentiment in this thread that it has turned slightly. A small change in sentiment is enough to push the market over the edge in my opinion. Then you will have a much larger change in sentiment as prices stop rising and the outlook gets progressively gloomy.


Don't you mean 180?


----------



## whathome

redo said:
			
		

> Don't you mean 180?


 
I was just about to edit that!


----------



## redo

whathome said:
			
		

> I was just about to edit that!


I suppose in a way it has done a 360 since 9/11


----------



## fatmanknows

Had a chat with a contact who is senior lending source from one of the institutions promoting 100% mortgages. Discussion covered whether there was any signs of stress showing on their loan book. He tells me that " no matter what they or the other banks are saying there is already a build up of non performing debt on their books. Any bank who says differently has simply not been lending. It is also evident that were it not for the unprecedented level of remortgaging going on the level of non performance would be much higher - i.e.people are remortgaging themselves out of arrears. Lending policies are about to get much tighter and the batons are starting to come down" .

Looks like the party may be be ending for some and starting for others.


----------



## whathome

€4M houses in Foxrock

From the Independent on May 7th:
"Selling agents Hooke & MacDonald - who report themselves as "*braced for the onslaught*" - will be opening the showhouse at Grove House from this weekend, appointment only"

http://www.unison.ie/classifieds/property/residential/stories.php?ca=150&si=1610478

I guess the "onslaught" wasn't quite as strong as they expected in May and they didn't sell out. They have just been listed on myhome!

[broken link removed]=


----------



## whathome

fatmanknows said:
			
		

> i.e. people are remortgaging themselves out of arrears.


 
I was thinking that some people would be tempted to do that, didn't think we'd hear about it so soon in the rate rise cycle.


----------



## RiceCakes

whathome said:
			
		

> €4M houses in Foxrock
> 
> From the Independent on May 7th:
> "Selling agents Hooke & MacDonald - who report themselves as "*braced for the onslaught*" - will be opening the showhouse at Grove House from this weekend, appointment only"
> 
> http://www.unison.ie/classifieds/property/residential/stories.php?ca=150&si=1610478
> 
> I guess the "onslaught" wasn't quite as strong as they expected in May and they didn't sell out. They have just been listed on myhome!
> 
> [broken link removed]=



EA's be afraid, very afraid, posters on AAM will find you out!!


----------



## sonar

fatmanknows said:
			
		

> Lending policies are about to get much tighter and the batons are starting to come down" .
> 
> Looks like the party may be be ending from some and starting for others.


 
If what he is saying is accurate and applies across the lending board then this would be the nail in the coffin of this absurd episode in Irish economics.

As posters have said above, there is no justification for the type of house price inflation we have witnessed in the recent past - other than loose lending and reckless borrowing. If lending tightens and interest rates continue upwards we are looking at a return to normality.


----------



## Guest107

AIB have dropped back from lending somewhat.

They now have the most sensible income multiples and are reluctant to do 100% even then. I could name the 2 institutions with the crappiest loan books among the prime lenders but will refrain from so doing.

Safe to say that we could guess who they are and the 100% mortgage and over 5x income multiples they offer is what their problem is  

If either of those two end up in a class action for bundling this dross into a securitised package it will not surprise me in the least .


----------



## beattie

whathome said:


> €4M houses in Foxrock
> 
> From the Independent on May 7th:
> "Selling agents Hooke & MacDonald - who report themselves as "*braced for the onslaught*" - will be opening the showhouse at Grove House from this weekend, appointment only"
> 
> http://www.unison.ie/classifieds/property/residential/stories.php?ca=150&si=1610478
> 
> I guess the "onslaught" wasn't quite as strong as they expected in May and they didn't sell out. They have just been listed on myhome!
> 
> [broken link removed]


 
Great spot, and I thought those property supplements only told it as it was.... 

As Duplex referred to in an earlier thread the IT's reporting re the story on US Mortgage applications is not much better than what I would expect from the red tops. Just because you have 'invested' €50m in a website shouldn't mean that your reporting standards take a nosedive. 

It might be useful to set up a separate thread regarding instances of price reductions or stories such as the one spotted by whathome as I imagine they will become more commonplace in the next few weeks/months


----------



## miju

Bedsit said:


> *US mortgage market rebounds on brighter outlook*
> 
> 
> 
> [broken link removed]
> 
> I guess everything is hunky dory again!!



mini dead cat bounce anyone?



SteelBlue05 said:


> Thats the big question, I dont think so. House in my area have gone up 40% in 18 months, its a crazy increase but are they going to decrease 50% or more in order for people to see negative equity? No.



so the prices have gone up 40% in 18months which you admit are crazy but you don't think it could possibly drop 40-50% when the property market gets a reality check good and proper??

makes sense ...............NOT



Persius said:


> S: The price of my investment property has plateaued out. There are no more capital gains to be got. I think it's time to sell.
> F: Now mighn't be the best time to sell. You may have to accept a lower price than normal. Remember property is the best investment class in the long term. You should hold on to it as a pension.
> S: Yeah, but the rent I'm getting isn't covering my mortgage. I have to contribute €500 myself every month
> F: But this is standard for any type of investment. If you were in a pension fund you would also have to contribute a sum of money every month. With property, the tennant contributes more than half of that money. Besides rents will rise over time.
> S: So you think I should continue ploughing money into my property
> F: Sure. In the long term, prices will go up again. In 25 years it'll be worth a fortune.
> S: Yeah, maybe you're right



to sum that up in 3 words ..... head in sand



Dusty said:


> If\when house prices drop they don't tend to drop that far, people would rather stay put than sell their house at a sustantial amount less than they percieve it to be worth.



ok 2 things:

1: can you provide experience / examples of prices not dropping substantially in previous property bubbles?

2: a house is only worth what someone is willing to pay for it , if you percieve it to be worth 500k but the majority of buyers think it's only worth 400k then you can percieve what you want until the cows come home the fact of the matter is it's only worth the market price of 400k regardless of what you payed for it.

IMHO people will doggidly try to sell for at least what they paid for it but as time goes on and prices drop and drop the bitter reality will dawn that this simply aint gonna happen



homeowner said:


> Yes but you those people are only one part of the future home buying sector. The rest will be made up of apartment and small house owners looking to upgrade, older people looking to downgrade, immigrants and of course new college grads coming along or new ftbs. Your opinions are valid, but you dont reflect the whole market and your buying power is less than those who have already bought and will upgrade/downgrade.



so answer me this important question then , who will all these people sell their properties to in order to upgrade if people like me aint gonna / cant afford to buy them? It certainly wont be investors with current dismal yields at best and in a stagnated or declining market so you can rule them out for starters , so who does that leave ye with? no investors and little or no FTB's actively purchasing means your not gonna be upgrading that "starter property" until such time as they both start buying again.

your very wrong homeowner , the power in the market lies with the buyers NOT with the sellers as the manic property market seems to think but sure you'll find that out for yourself soon enough


----------



## CN624

> Builder: Oversupply slump worst in 40 years
> Toll Brothers slashes outlook on new homes as orders plunge and revenue misses forecasts.



http://money.cnn.com/2006/08/09/news/companies/toll_brothers/index.htm?cnn=yesm?cnn=yes


----------



## thewatcher

http://money.cnn.com/2006/07/25/real_estate/housing_market_values/index.htm

_I hope no one here has an investment property in California !._


----------



## fatmanknows

CelloPoint said:


> Indeed, the history of human nature doesn't change much. Watch out for the 'dead cat bounce' though - it's cocky guys like you that will get nabbed.


 
If following reason and logic is being 'Cocky'...then hey, I'm the biggest Cock in town. The brains in this debate are all heavily on my side. Support the bull party all you want, but last drinks in this overdone partry were served months ago and most have now left and gone home to nurse their mortgages.

I'm told the A&E (debt) department has been put on maximum alert. I expect the wards will be full in no time. However, whilst out of respect I'll be sure to be making regular visits to comfort all those unfortunate patients and wish them a speedy recovery, I cannot guarantee the life support machines will be kept on. Some appear to be complete hopeless cases. 

If there's any of you who don't like grapes ...let me know.

Regards for now.

Fats


----------



## room305

fatmanknows said:


> If following reason and logic is being 'Cocky'...then hey, I'm the biggest Cock in town. The brains in this debate are all heavily on my side. Support the bull party all you want, but last drinks in this overdone partry were served months ago and most have now left and gone home to nurse their mortgages.


 
The brains are most definitely _not_ on your side. Have fun purchasing a 'bargain' investment property on the first dead cat bounce and crying about it for the next decade or so.


----------



## Calina

room305 said:


> The brains are most definitely _not_ on your side. Have fun purchasing a 'bargain' investment property on the first dead cat bounce and crying about it for the next decade or so.



While his attitude might leave a certain amount to be desired, you can't be certain that he will buy in the first dead cat bounce, can you?

As a general note, one of the most interesting things about this debate, from my point of view is that it clearly identifies just how greedy and money-driven people in this country appear to have become. 

People want to get wealthy from their house by the simple fact of just buying them. There was a time they just wanted to live in them. 

The net result is that property has shot up in value, and that rise is dependent on 1) a sufficient number of people buying at the prices and 2) a sufficient amount of money to buy at those prices. Currently, a massive whack of that money is borrowed. How sane is that? There are horrible shades of pyramid scheme around the whole thing at the moment. 

I've been watching property debates on this site for a long time now, and contributing to them, and the problem I have is this. There is no real logic to property prices in Ireland, no fundamental reason why that wealth is being generated. But they keep on rising, so that voices of reason get drowned out with "you were wrong for five years, so why should you be right now?" On another thread on the subject, there was a very heavy idea that "something will change to keep property prices up". 

The only point in the favour of those arguing that it will continue to rise, as far as I can see, is that it hasn't stopped rising yet. 

A rising property market, to some extent, is a good sign in an economy. But there comes a point when it becomes dangerous. I think we're at that stage because other economic indicators which speak of trouble to come are not so much in our favour. Most of our job creation is in the non-import sector (as in it's not earning money for the country) and we have massive rising consumer debt. Growth based purely on internal factors and debt isn't real growth, and I think it's interesting that our growth is being tracked with slightly higher inflation than average in the rest of the eurozone. Our money isn't buying all that much, is it? And that's as much true for a cup of coffee as it is for a house or an apartment. 

Personally I'm not in this for a killing. I am in it for a home. But I see that the home I want to buy is priced out of my range by people who just want to make a killing (often - you'll find a lot of FTBs in that position) and to be honest, as I see how proud of themselves that they got it right they are with their capital appreciation - and it's not a profit until it's banked (but no  one seems to understand that), I wonder why I should feel sorry for them on the way down if they are going be somewhat resentful of those who buy in falling prices. 

I don't want to time the bottom of the market - I can't, for one thing. But I don't want to take a hammering from the extremists on either sides for a) exploiting the property crash and causing someone to take a heavy loss or b) or buying before the market hit rock bottom. It's very tribalistic. 

Economically, our property market has to correct, and the shorter it takes for that to happen, probably the better in the long term. I'm not interested in estate agents' livelihoods, but a long drawn out property crash will probably have a worse effect on the rest of the economy than a sharp shock. 

The other thing which interests me is that by and large, the debate is getting very personal, to the extent that it is becoming less and less rational on here. After yesterday I'm slightly surprised the thread didn't get locked. 

What's public sentiment in housing? I don't know any more. Most people I know who are in the market to buy are not buying at the moment. Not because it's too expensive per se, but because it represents, in the short term, very bad value for money. 

A recurring theme here is "okay so it rose 40%. But it can't possibly fall 40%, really, when you think about it". But there was no real basis for the rise other than demand, and demand is elastic. The only people who are actually homeless won't be in the position to buy anyway. Everyone else can actually rent which is currently a better option for many people, vis a vis location, for example. 

The property market was probably over valued 4 years ago. But it kept on rising and whether they like it or not, it is the people who continued to buy who contributed to that continuing rise. Sure they got the money from the banks....but they didn't have to buy either. A lot of people didn't. They took slack for it. I find it interesting that those that did buy, or do own homes are expecting their counterparts to be magnanimous should the tables turn. It's very much the "I was smug on the rising market, but you can't be smug on the falling market". Double standards which are typical of life in Ireland, I must say.


----------



## Guest107

*The Florida Real Estate Bubble*

From here , seem familiar ???



> *Many astute investors* took notice and started buying Florida real estate. The population in Florida was growing exponentially and *housing couldn’t meet the demand.*


Then 



> *It seemed you could do no wrong by just buying any property in Florida* and become a millionaire. By 1925, real estate prices had become so exorbitant that buying land wasn’t affordable any longer. *New investors failed to arrive and old investors started to sell.*


Finally , after Hurricanes and Tidal Waves and Floods and Pestilence all arrived to help poop the party as well 



> the investors were *bankrupt* from the enormous mortgages.


Read the _lesson_ bit at the end of that article which is a standard disclaimer for each and every bubble in history. That will include ours  , of course it will.


----------



## phoenix_n

I realise its the slow season and that is why stock at the moment is not moving. I look at D7 properties and the stock is increasing and is moving off very slowly. ( total stock is increasing by 2 a week )


However i'm don't agree with this whole slow season bit (as property is/was the leading investment vehicle in this state) as if you really are in the market for a house you surely could pick up a 'bargain' now rather than wait for the rush in autumn. Stock is not moving and not because of reluntant sellers but low or no offers.


----------



## Bedsit

Article in the Irish Times said:
			
		

> *Property group Kenny set for sale at €475m*
> 
> "The Kenny Group is one of the biggest and most active developers outside Dublin. Its Irish portfolio is said to include assets in Galway, Limerick, Cork and Dublin. The group was highly acquisitive in the past and it traditionally held on to property assets where it could.
> 
> It was unclear late last night why the group was contemplating a sale. Sources said that the Kenny family appeared to be planning to dissolve the business.


 
[broken link removed]

Looks like the smart people are exiting the market


----------



## Guest107

*Kenny Exiting*

Kenny are housebuilders too, not Civil engineers who could go road building.

If anything Kenny service the FTB market more than any other segment.

Best exit while your land bank is worth something I says


----------



## fatmanknows

[FONT=verdana,arial]*Kenny's property sale to fetch E475m*[/FONT]_[broken link removed]_[FONT=verdana,arial]_Thursday, 10th August 2006 07.06am_[/FONT]_[broken link removed]__[broken link removed]__[broken link removed]_[FONT=verdana,arial]_The property portfolio controlled by the Galway-based Kenny Group is to be sold with a price tag of around E475 million._

Translation : Nervous Lemons gathering at the cliff edge.............go on, jump.


_The sources said the family-owned group has approached Merrion Capital and DTZ Sherry FitzGerald to find the buyer ..._

Translation _:_ Maybe the Lads at Merrion will package it in nice wrapping paper and flog it to a few ejits across their client base.

_It was unclear late last night why the group was contemplating a sale...._

Unclear why they were contemplating a sale ???.......please, please....don't start inviting answers on a postcard.
[/FONT]_[broken link removed]_


----------



## Raskolnikov

Kenny Group shutting up shop! Property crash imminent! Umm no, not quite. The Kenny Group's property portfolio is primarily commercial (retail, government, student accomodation, etc). Also, they've also recently won a contract for a government/retail development worth €100 million on Patrick's Quay in Cork City. These assets are the reason why the company is expected to fetch nearly €1/2 billion. It's housing stock and construction arm would definitely account for the smaller share of it's net worth.


----------



## room305

Calina said:


> While his attitude might leave a certain amount to be desired, you can't be certain that he will buy in the first dead cat bounce, can you?



Judging by his comments I'd be very surprised if he doesn't. Although he has said that he will not buy until the market bottom (I'd love to know how he will judge when that has occured) he seems to think this will happen soon.

Saving money to buy when the crash occurs is silly business. Inflation will depreciate the real value of your savings as rapidly as the nominal value of housing falls. This is a very illiquid market and the bulk of the correction will probably be in real terms.

I think people should give up thinking about making money on property for a while - like you said, let's go back to thinking about houses as somewhere you live rather than some kind of cash generation machine.


----------



## StoppedClock

room305 said:


> Saving money to buy when the crash occurs is silly business. Inflation will depreciate the real value of your savings as rapidly as the nominal value of housing falls. This is a very illiquid market and the bulk of the correction will probably be in real terms.


 
So buy now then? Or don't save money and borrow to buy when the crash occurs?


----------



## Calina

room305 said:


> Saving money to buy when the crash occurs is silly business.



Traditionally, people were compelled to save up to 10% of the purchase price of a house. There may be the odd few people around who are trying to save 100% or 50% of their purchase price, but I suspect a lot of people are not anywhere near close enough. But it would be good practice to bring a deposit because equally, it is not exactly bright to take out a loan of 100% on an asset which is widely suspected to be overvalued. My position is I would rather have a deposit than a massive mortgage.


----------



## Raskolnikov

room305 said:


> Inflation will depreciate the real value of your savings as rapidly as the nominal value of housing falls.


That's presumptuous.


----------



## fatmanknows

Raskolnikov said:


> Kenny Group shutting up shop! Property crash imminent! Umm no, not quite. The Kenny Group's property portfolio is primarily commercial (retail, government, student accomodation, etc). Also, they've also recently won a contract for a government/retail development worth €100 million on Patrick's Quay in Cork City. These assets are the reason why the company is expected to fetch nearly €1/2 billion. It's housing stock and construction arm would definitely account for the smaller share of it's net worth.


 
1.Won a contract .........means to develope on behalf of a client.

2. Be it Commercial or Residential Property......the coming correction won't discriminate.

Back to school Raskolnikov.


----------



## room305

StoppedClock said:


> So buy now then? Or don't save money and borrow to buy when the crash occurs?



Definitely don't buy now.

I am just counselling against people who are saving in anticipation of buying into the market after "the crash". The crash will be a long drawn out process, spanning at least five years.

Obviously you should save money but you should be thinking of investments outside of property. Simply sticking your money in the bank isn't the best idea IMO. 

I'll stop now because I don't want to wander to far off topic.


----------



## Firefly

Here's why I still believe property in still a good investment even at today's prices (don't shoot me all at once!!)
If you take a property in a rentable location for 500k. Over 30 years at a 3% growth rate the property will be worth 1.2M. Even if prices fall in the coming years, I think it's fairly safe to assume a 3% growth rate over 30 years as this is a long time frame and should incorporate a few economic cycles.
An alternative is to buy shares - say you put in 50k into shares (which would cover the stamp duty, legal and fit-out fees of buying the home) and you also save 700 euro per month to buy shares (which would cover the shortfall in rent not meeting the mortgage) and you do this for 30 years...the shares would have to increase by 7% over 30 years to get the same return on the house at 3%. I am ignoring dividends on shares here and also rent rises as neither are guaranteed. 
Whilst the gearing with housing can result in bigger swings in value, over time my "sentiment" is that it will still be worth more than shares. Think about it this way...every time someone gets a pay rise of 2k, they can qualify for an extra 10k in a mortgage....
Am fully aware this is back of the beermat maths but it's just to illustrate my sentiment. 

Firefly


----------



## gidxl03

Analysis by the OECD of the state of the Irish economy 2 March 2006
[broken link removed]

Chapter 7 (summary)
The Irish housing market is very buoyant. The housing boom is driven by strong economic growth, dynamic demographics and low interest rates. However, large tax advantages and relatively lenient credit policies by banks have also played their part, and prices may have become overvalued. To the extent that high house prices reflect favourable tax treatment, they may lead to economic inefficiencies by drawing excessive resources into residential construction. *While a soft landing appears the most likely prospect,* a disorderly correction of house prices would pose risks for macroeconomic and possibly financial stability. In this context, one policy lever available to the government would be a phased removal of the tax advantages associated with housing. In addition, banks should remain cautious in their lending and provisioning policies.

Do these guys have a vested interest? How come the professionals have it so wrong in that they don't see a hard landing as the most likely outcome.

Perhaps professional investors are taking advice from professional economists rather than Estate Agents as many heRE seem to think!


----------



## Raskolnikov

Calina said:


> There may be the odd few people around who are trying to save 100% or 50% of their purchase price


That still happens  My nervous brother had a meeting with the bank manager back in 2001 to try get a mortgage. Manager's jaw dropped to the floor when the brother revealed that he had a "deposit" of 75% for the mortgage. All the more remarkable considering he was only earning a little bit more than the average wage and his money came solely from saving and investment.

Obviously, someone who had the communion money invested in the Irish stockmarket is more of an exception than the rule. Don't however doubt that there are sizeable numbers of young people out there with significant amounts of savings.


----------



## whathome

Here's another asking price drop.

This time a period redbrick in Ranelagh!

Original price : €1,000,000


New listing, *Reduced* to €975,000
www.daft.ie/130551


----------



## StoppedClock

I'm trying to do some maths here re. Firfly's theory and want to know historically what is the normal ratio of inflation to interest rates i.e. is rate of inflation normally above or below interest rates?


----------



## gidxl03

Drops in asking prices have very little relevance.  When you can show drops in SALE AGREED prices relative to other houses in the area that have already sold, then you have evidence to back up your argument of falling sentiment.

Just for a laugh, take a look at this diagram
http://www.telegraph.co.uk/money/ma...d=242&sSheet=/money/2006/06/19/ixcitytop.html

Ireland is not the worst by a long shot!


----------



## kellyiom

Duplex said:


> Watch the yield curve on American Bonds. Long dated T bills are up and down at present.
> 
> http://www.bloomberg.com/markets/rates/index.html


 
hardly any more than any other year when rates have been rising no? Year to date yields on the ten have gone from 4.39 to 4.91, touching 5.20 a couple of months ago. The overall flattening and recent inversion is a bearish indicator though.


----------



## whathome

gidxl03 said:


> Drops in asking prices have very little relevance.


 
Wow - who would have thought anyone could have said this over the past few years!

We're talking about sentiment here, dropping asking prices are very relevant. They may not mean lower deal prices but that's not what this debate is about.


----------



## Calina

gidxl03 said:


> Drops in asking prices have very little relevance. When you can show drops in SALE AGREED prices relative to other houses in the area that have already sold, then you have evidence to back up your argument of falling sentiment.



Drops in asking prices suggest houses are not selling quite as fast as they used to be. Drops in asking price are definitely a change in sentiment. 

It's very hard to show drops in sale agreed prices because people are unwilling to release that info. If it was widely available we might have a better fist on what the actual rises and average prices are. Currently they vary widely depending on whose data you use.


----------



## room305

Raskolnikov said:


> That's presumptuous.



Same as anyone else here, I'm not a seer. It's just my assessment of what will happen. Feel free to accept or reject.


----------



## phoenix_n

gidxl03 said:


> Drops in asking prices have very little relevance. When you can show drops in SALE AGREED prices relative to other houses in the area that have already sold, then you have evidence to back up your argument of falling sentiment.


 
Disagree. What you are asking for is to show you the flood rather than show you the storm clouds. Drops in asking price (thanks whathome for your research) along with rising stock levels is what is currently happening (not sentiment but hard facts) in the market.

Edit !

Ok i am coining this.(copyright pending)

The 'crash' (localised on those who bought within 2 years in poor locations and those where changing circumstanes forces sale) is gonna be called the 'Irish Flood'. Falling prices (rain!) coupled with rising stock levels (water).


----------



## room305

StoppedClock said:


> I'm trying to do some maths here re. Firfly's theory and want to know historically what is the normal ratio of inflation to interest rates i.e. is rate of inflation normally above or below interest rates?



Below


----------



## Peadar

Just a point on all these house price drops that are being quoted. They are all very small in percentage terms and I don't think they point to anything like a house price crash. A €25000 price drop on a house of €1,000,000 is only 2.5%, that is nothing, especially when prices have risen by 25-40% over the last 2 years.

The tradition in buying property in Ireland, was that the bids used to come in below the asking price anyway, only in dublin in the last 4-5 years and the rest of the country in the last 18 months have prices been driven massively over their original asking price due to the mania that drove prices over the last few years.

Prices look to be settling down, which is a good thing, it by no means points to an impending crash.

With all the publicity about house price crashes in the media I think a lot of prospective buyers are just waiting to see things settle down a bit.


Peadar


----------



## Howitzer

StoppedClock said:


> I'm trying to do some maths here re. Firfly's theory and want to know historically what is the normal ratio of inflation to interest rates i.e. is rate of inflation normally above or below interest rates?


 
Inflation is variably below interest rates, the fact that you need to ask is an indication of how skewed the Irish economy has been for the last 5 years.

Firefly makes a great case for someone who wants to be a very wealthy OAP, I believe the pharohs had similar economic principles and were thus able to fill their pyramids with gold when they died, however your avareage joe soap looks at any investment on a short to medium term (less than 5 years). In the short to medium term Irish property 'could' be a pig of an investment using a starting point of today.


----------



## kellyiom

Duplex said:


> The continuance of the liquidity bubble is dependent on the willingness of foreign governments to underwrite American consumer and government debt. The US is teetering on the brink, the economies that take up the baton after the Americans have finished their consumption binge will have cheaper workers willing to work in poorer conditions than their western counterparts. Survival of the fittest, most productive, innovative and hardworking.


 
all good stuff agrred and good points, but how long's the US been teetering on the brink now? And the $ is still the emerging worlds de facto reserve currency, no matter what we see about reserve banks reducing $ weightings. And no matter what we all hear about emerging markets taking over, there's little sign that they're becoming the innovators and entrepreneurs of the future just yet. When a larry page or bill gates comes out of india or china then maybe but at the moment, it's still largely cheap human capital. Intellectual capital lives in the states and will continue to do so. Asian innovators will continue to relocate there to germinate their businesses so the dollar is dead story will take many more years to play out...bit like the western property market I reckon


----------



## whathome

Peadar said:


> Prices look to be settling down, which is a good thing, it by no means points to an impending crash.


 
Thanks Peader, we're discussing a change in sentiment here.
Falling asking prices indicates a very big change in sentiment.


----------



## whathome

kellyiom said:


> all good stuff agrred and good points, but how long's the US been teetering on the brink now?


 
I think Duplex set up a separate thread to discuss the US market.


----------



## kellyiom

Persius said:


> For the sake of discussion, some bullish arguements on Irish property
> 
> 1) One of the reasons why it really "is different" in Ireland (mainly thinking of the cities) is the low density of housing. It has been said previously that the price someone pays for a house is not just the price of the time and materials that went into building the house, but also the price of the site. In a low density city such as Dublin, the price of sites (at least those in centralish locations) will be higher per household than the price of an equivalent site in a higher density city such as New York.
> 
> 2) Specuvestors who were in it for the quick buck could be easily convinced to take a "long term view", and not try to sell in a flat market. Considering our obsession with property you could easily imagine this sort of conversation between a specuvestor (S) and his family/friends/bank manager (F) etc
> 
> S: The price of my investment property has plateaued out. There are no more capital gains to be got. I think it's time to sell.
> F: Now mighn't be the best time to sell. You may have to accept a lower price than normal. Remember property is the best investment class in the long term. You should hold on to it as a pension.
> S: Yeah, but the rent I'm getting isn't covering my mortgage. I have to contribute €500 myself every month
> F: But this is standard for any type of investment. If you were in a pension fund you would also have to contribute a sum of money every month. With property, the tennant contributes more than half of that money. Besides rents will rise over time.
> S: So you think I should continue ploughing money into my property
> F: Sure. In the long term, prices will go up again. In 25 years it'll be worth a fortune.
> S: Yeah, maybe you're right
> 
> 3) ...
> 
> Opinions?


 
very realistic Persius, great post. While there will be some pain, it just won't be pain enough to create this plunge. And property investors are lacking that alternative screaming at them that says this is a waste of money, put it here instead.


----------



## phoenix_n

Peadar said:


> With all the publicity about house price crashes in the media I think a lot of perspective buyers are just waiting to see things settle down a bit.
> 
> Peadar


 
Exactly. Interest replaced by Fear. But for those who have to sell, and those who are waiting for things to settle down prices will have to fall in order to sell.

Dont forget that many people made around 200-500k on houses so they can sell (if they have to) at a reduced price but still realising excellent gains. So dont be surprised at 100k been knocked off houses. Its only if you bought late does this seem excessive.


----------



## Raskolnikov

fatmanknows said:


> 1.Won a contract .........means to develope on behalf of a client.


They're essentially being paid a lucrative sum to build a development with no risk to themselves. Sounds like a good deal to me!



fatmanknows said:


> 2. Be it Commercial or Residential Property......the coming correction won't discriminate.


Poppycock. The property market is in no way homogenous. We've recently sold a three bedroomed townhouse in Ballina that was bought back in 1990 just before the market started to take off. Taking inflation into account, it probably only appreciated 15-20% in real terms (attributable to higher incomes rather than any sort of property bubble). The reason? No one viewed the market for property in that area as speculatory. I never knew a single person in the town who bought a property there for capital appreciation.

As for "the coming correction".

There's no such thing as a sure thing. By closing your eyes completely to the idea of a soft-landing, you're proving yourself to be just as blind and ignorant as the property bears out there.


fatmanknows said:


> Back to school Raskolnikov.


Don't be so patronising, you neither have the wit nor the intelligence to pull it off.


----------



## gidxl03

IMO, asking prices are much more of a sales strategy than a reflection of sentiment. E.g. Sales strategy : House Prices increased by 10% in the first 6 months of this year. I'm now about to sell, so why not add on yet another 10%, then a few weeks later drop it by 5% and claim REDUCED PRICE.

Analysis of Asking Prices is really just 'noise of the moment' whereas no body seems interested in reflecting on the analysis provided by the boring old OECD.  This is what guides my sentiment.


----------



## whathome

gidxl03 said:


> then a few weeks later drop it by 5% and claim REDUCED PRICE.


 
They're not claiming REDUCED PRICE, they're trying to hide it!

It's only through using google's cache that we're spotting reduced asking prices.


----------



## phoenix_n

whathome said:


> They're not claiming REDUCED PRICE, they're trying to hide it!
> 
> It's only through using google's cache that we're spotting reduced asking prices.


 
Exactly.

I can hear the patter of rain on the roof.


----------



## gidxl03

Highlighting a REDUCED PRICE is one strategy.  Another strategy for getting the best price is equally simple: start at a high one and slowly come down (and at the same time, try to disguise the fact that you have been chancing your arm!).

I'm not asking for you to show me a "flood" of houses than sold for less than the AMV, just 4 or 5 would show the beginning of a possible change in sentiment.  I agree that it is a pity that Ireland has less data than say the UK market.  

With the huge jump in prices during the first 6 months, crazy asking prices were inevitable.  Everyone wants the best price.

Any comments on the OECD anyone?


----------



## delboy159

Reduced asking prices are not a realistic assesment of public sentiment.  

You don't know what the value of that house was last year or what equivalent houses in the area have sold for recently...  I bought a house 30 months ago.  It started at 310k, then dropped to 270k and finally went for 250k.  I knew it would never go for 310k - it was crazy, the fact that the price dropped wasn't a reflection on house prices falling it was that the Estate Agent chanced his arm - it didn't work and he then went with a realistic...

A lot of house sales over the past 5 years in all parts of Ireland have involved price drops - don't over anayse it.  My 310k to 250k was almost a 20% drop in property prices based on your arguement that asking prices are in anyway fact forming.

Besides property isn't a formula driven product thats on a shelf and sells at a price.  If your neighbour sells his house and is lucky that 3/4 bidders are keen, it might add on an unrealistic 10k (or more).  When you go to sell there might only be one interested buyer - you dodn't make quite as much - thats life.  This can't be read into as public sentiment changing etc. it's just free market economics...

Less of the unrealistic scare tactics - real facts or nothing at all....


----------



## whathome

delboy159 said:


> Less of the unrealistic scare tactics - real facts or nothing at all....


 
Scare tactics? Regularly falling asking prices are a fact. If people are scared by that, we can't help it.

Every time anyone provides evidence of a change in sentiment here, there are attempts to rubbish it. As I've said before, this is exactly what happened when prices started to fall in 2001. Only this time, there is nothing to stop the market falling further next year.


----------



## phoenix_n

delboy159 said:


> Reduced asking prices are not a realistic assesment of public sentiment.
> 
> A lot of house sales over the past 5 years in all parts of Ireland have involved price drops - don't over anayse it. My 310k to 250k was almost a 20% drop in property prices based on your arguement that asking prices are in anyway fact forming.
> 
> Less of the unrealistic scare tactics - real facts or nothing at all....


 
The market that i refer to is houses bought in the last 2 years and of all the houses that i have bidded on in the last year not one went below asking price. It does happen, i am sure, but not enough to warrant any comment. 

Interesting comment about scare tactics. That would point that there is something to be scared of. Inflated prices, investors over-commiting, buying for capital appreciation, falling rents, high density apartments, cheap commuter belt houses.


----------



## StoppedClock

delboy159 said:


> Less of the unrealistic scare tactics - real facts or nothing at all....


 
Yes from now on please restrict yuor posts only to facts listed on [broken link removed]

No more conjecture or opinion or debate.


----------



## whathome

gidxl03 said:


> With the huge jump in prices during the first 6 months, crazy asking prices were inevitable. Everyone wants the best price


 
I absolutely agree with you here.  The jump in prices in the spring was crazy and unsustainable.  That was the final push upwards.  So people are asking for more realistic prices - that in itself is a change.


----------



## Calina

whathome said:


> Scare tactics? Regularly falling asking prices are a fact. If people are scared by that, we can't help it.
> 
> Every time anyone provides evidence of a change in sentiment here, there are attempts to rubbish it. As I've said before, this is exactly what happened when prices started to fall in 2001. Only this time, there is nothing to stop the market falling further next year.



While I would agree that people who don't see a crash coming are starting to get very defensive, I would venture to say that a few reduced asking prices in the higher end trader up market are not yet adequate proof that the market itself has turned. It isn't yet fact that prices are regularly falling, and they are absolutely not falling at entry level just yet.


----------



## Remix

whathome said:


> Here's another asking price drop.
> 
> This time a period redbrick in Ranelagh!
> 
> Original price : €1,000,000
> 
> 
> New listing, *Reduced* to €975,000
> [URL="http://www.daft.ie/130551"]www.daft.ie/130551[/URL]


 

Excellent detective work whathome!

Hmm interesting seems like only yesterday when we were told to expect to pay tens of thousands over the initial asking price. 

Estate agents in this area (Dublin 6) were setting asking price low in order to start bidding wars. They are now having to reduce asking price in some instances in an attempt to get any interest.

I've been calling about some properties in the area and the estate agent seems so happy to have someone to talk to !

Autumn ought to be interesting!


----------



## phoenix_n

Calina said:


> While I would agree that people who don't see a crash coming are starting to get very defensive,


 
Its like being stuck with a box ful of power ranger toys that no-one wants any more.


----------



## Calina

phoenix_n said:


> Its like being stuck with a box ful of power ranger toys that no-one wants any more.



Well I wouldn't know about that. I never had power ranger toys.


----------



## delboy159

Regularly falling asking prices are a fact - but a fact of what nature?  That estate agents are over pricing or that there is no demand or that the vendors are insisting that they "try" 30k more than the agent has valued at?  When someone comes on and says that a house beside them sells for 50k less than an equivalent house that sold 3 months ago - thats a fact.  

I'm not saying no info of this kind - I stated "less" as I actually find these interesting - but unlike people here I'm not using it as a basis for an assesment on peoples current sentiment....

I do believe there is something to be scared of out there - things are very tight at the moment for all of the reasons mentioned - however, there is a need for focused genuine examples of sentiment change, not pointing at unrealistic methods of measurement. 

I'm looking at sites in Laois to build - 6 months ago there were 9 sites advertised on DAFT, today there are 48 - Guess what, none of them affordable, just 39 more sites that annoy me....  Thats a fact... Such jumps on DAFT have been used as a basis for over supply, I'm in the trenches and the prices aint falling...


----------



## whathome

delboy159 said:


> I'm looking at sites in Laois to build - 6 months ago there were 9 sites advertised on DAFT, today there are 48


 
Might be a warning sign, a build-up of inventory usually precedes a price drop.


----------



## delboy159

What about my last line - prices aint dropping!


----------



## Howitzer

delboy159 said:


> Regularly falling asking prices are a fact - but a fact of what nature? That estate agents are over pricing or that there is no demand or that the vendors are insisting that they "try" 30k more than the agent has valued at? When someone comes on and says that a house beside them sells for 50k less than an equivalent house that sold 3 months ago - thats a fact ....


 
 Keep an eye on this thread so.

http://www.askaboutmoney.com/showthread.php?t=33378


----------



## Calina

delboy159 said:


> I'm looking at sites in Laois to build - 6 months ago there were 9 sites advertised on DAFT, today there are 48 - Guess what, none of them affordable, just 39 more sites that annoy me.... Thats a fact... Such jumps on DAFT have been used as a basis for over supply, I'm in the trenches and the prices aint falling...



Rising inventory comes first....if the people who own those sites don't need to sell, then they may well pull from the market than bring down their prices. If they do, then ultimately, rising supply will have an impact on prices. 

But it's not an instantaneous cause/effect. This is why there are varying estimates of between 18 months and 20 years for the property market to find its equilibrium, and why there are discussions of dead cat bounces.


----------



## cjh

http://www.itulip.com/


*IMF: House prices may crash in Ireland*

Of interest to the Irish market....


----------



## macbri

Good article and objective as from IMF.

Basically the article asks the question will US suffer same housing crash as Ireland.
There been a bit presumptous here as crashed hasn't happened in Ireland yet but it will especially in a higher interest rate environment.

Supply is at all time highs(predicted 100k for 2006),affordability at record lows ,borrowing levels at record high and yields at record lows

The only argument is when crash will happen.


----------



## Remix

Inflation and interest rates:

*Annual Irish Consumer Price Inflation rose to 4.2% in July*
http://www.finfacts.com/irelandbusinessnews/publish/article_10006894.shtml


*ECB warns again of likelihood of further interest rate rises*
http://www.finfacts.com/irelandbusinessnews/publish/article_10006893.shtml


----------



## gidxl03

If the IMF is warning of a crash, then I would take the warning seriously.

To read a longer summary of the report;
[broken link removed]

However the warning is just that.  The report also includes the following;

However, the IMF recognises the strong performance of the economy in recent years was one of the best in the world and it is forecasting strong growth in gross domestic product for this year and next of 5.5% and 5.8%, respectively. Gross national product (GNP) figures for the same period will be 5.4% and 6.2%. which are better than recent ESRI forecasts. 
The report noted that employment growth was rapid and it reflected strong immigration and rising labour force participation. 
"This remarkable performance reflected both good policies and fortunate circumstances," it said. 
Tánaiste Mary Harney last night welcomed the IMF assessment. 
"The IMF has acknowledged the continued impressive performance of Ireland's economy, which they say is characterised by high real gross national product growth, low unemployment levels and an inflation rate that is converging towards the EU average."

PS The iTuplip group were not premature about the Irish House Price crash. They simply asked, could the same WARNING apply to the US.  Not the same as wondering if the same House Price crash could happen in the US.

PPS I someone around here getting defensive? I haven't noticed.  Anyhow, I think that the AAM moderators have long since given up on this thread!


----------



## redo

gidxl03 said:


> Tánaiste Mary Harney last night welcomed the IMF assessment.
> "The IMF has acknowledged the continued impressive performance of Ireland's economy, which they say is characterised by high real gross national product growth, low unemployment levels and an inflation rate that is converging towards the EU average."



Mary, get your head out of the sand.  The inflation rate is diverging from the EU average.


----------



## phoenix_n

This is something you wouldnt want to be in your investment profolio in the current weakening market.


----------



## whathome

I've heard of quite a few deals falling through due to buyers struggling to sell - I think we will see more of these in the coming months:
http://www.askaboutmoney.com/showthread.php?t=34050


----------



## phoenix_n

whathome said:


> I've heard of quite a few deals falling through - I think we will see more of these in the coming months:
> http://www.askaboutmoney.com/showthread.php?t=34050


 
I personally cancelled my proposed purchase of a new apartment in D7 this week owing to my current sentiment of the market. (hence why i am on this thread so much as i was researching the market). I may be wrong but i dont think I am.


----------



## CelloPoint

phoenix_n said:


> I personally cancelled my proposed purchase of a new apartment in D7 this week owing to my current sentiment of the market. (hence why i am on this thread so much as i was researching the market). I may be wrong but i dont think I am.



Seriously, fair play to you. You'd be mad to take on the risks associated with such a purchase in the current climate.

So are you saying that AAM was the major factor in your decision?


----------



## macbri

It looks like we're going to get a couple more rises to end of 2006.
Comments from ECB very clear which is unusual for them.

Problem for Ireland is that ECB were reducing rates due to economic problems in Germany/France.

If Ireland had been treated alone,then rates would have been a lot higher earlier thus reducing housing bubble that we're in at the moment.

The other factor unique to Irish market is the 25% increase in housing stock in the last 4 years-this is unique in Europe and perhaps the World


----------



## macbri

I think IMF article pretty clear-you can take out it what u like depending on your perspective but I would share their sentiments on Irelands housing bubble


----------



## whathome

macbri said:


> It looks like we're going to get a couple more rises to end of 2006.


 
Yep - the next interest rate rise looks likely to be on October 5th, bang in the middle of the autumn selling season. It's not looking good for sellers when you include increasing supply.

Quote from Ulster bank boss Cormac McCarthy in the Independent last week:
"There's one hell of a lot of supply coming onto the market"


----------



## phoenix_n

CelloPoint said:


> Seriously, fair play to you. You'd be mad to take on the risks associated with such a purchase in the current climate.
> 
> So are you saying that AAM was the major factor in your decision?


 
Yes and No. Firstly i was buying for capital appreciation, knowing that rental yield ( i was going to continue to rent as its cheap) would not cover mortgage. I was even intent on flipping the property. Its was a very good 2 bed new build in phibs. But i believe that the 'interest' has gone from the market and that to buy high was totally inalien to any investment decision. AAM made that clear to me. Buy low, Sell high.

Rising interest rates, higher fuel costs, reliance on irish economy on construction played a big part. A visit from a German friend also highlighted the gross property prices. What my place was going to cost i could have bought a 4 apartment block in Hamburg with guaranteed 6% yield and possible capital appreciation on a german recovery. I have since signed on a german commercial property fund and whilst there are many different opinions on that i know that it is a safer investment.

But has the market stopped. IMO, the answer is yes. But i could be wrong.


----------



## Guest126

Thanks for post phoenix - I think you made a good move.

A recent poster said that yields were justifiably higher in USA compared with Ireland because interest rates higher over there.

I would like to hear a logical reasoning why yields in Germany are almost double Ireland - no interest rate or currency risk, so why such a large gap?


----------



## homeowner

Article from today's Irish Independent, apologies for the formatting:


> Only way is up to solve city's housing crisis, claims new report
> 
> 
> APARTMENT living is the only way the desperate demand for property in Dublin will be met after 2012.
> 
> A hard-hitting report has urged the City Council to promote the building of large complexes and family-orientated
> apartments as the supply of land for housing between the canals runs out over the next six years.
> 
> Ireland's supply of apartments falls far short of the amount on offer in other European countries.
> 
> Large apartment complexes make up just 1pc of properties here, compared to 4pc in Britain, 19pc in Denmark,
> 18pc in Holland and 28pc in Austria.
> 
> There are currently 200,000 people living in apartments - most of them single or childless couples.
> 
> "The only way to meet projected demand within a reasonable city footprint is by ensuring apartment developments
> remain the dominant form of new housing," stated the report by Evelyn Hanlon of Dublin City Council's Private Housing Unit.
> 
> The report, Successful Apartment Living, commissioned by Dublin City Council, also emphasised that a range of new
> apartments for various household sizes and types needs to be encouraged.
> 
> Its author said families, especially those with young children, need specially designed apartments. These should
> include access to laundry facilities in a separate area away from the kitchen, and kitchens and bathrooms designed
> with families in mind.
> 
> The report also urged that the council should set up a new legal framework for management companies to increase
> 'sustainability'.
> 
> "When a company is struck off, it is very difficult for owners to sell their apartments, because there is no legal
> body in existence to own the common areas."
> 
> Anne-Marie Walsh



If it is true and there is/will be a shortage of space in dublin in the next 5 years then I think dublin prices will hold quite well.


----------



## Afuera

gidxl03 said:


> Any comments on the OECD anyone?



That article you linked to from the OECD ([broken link removed]) doesn't contain positive news for Ireland. They've been calling an overvaluation in the prices of Irish property for a long time and this analysis doesn't diverge from that. Under current conditions they are calling a leveling off or slight decline in prices (the famous soft landing). 



> "Thus, the most likely scenario is that *prices will level out or decline slightly, housing construction will fall back gradually, turnover will decline and the market will remain subdued for some time*. But even in such a scenario, government receipts would weaken sharply, so that a substantial structural budget deterioration would come on top of any cyclical weakening."


However with every interest rate change or knock to the US economy (we're very dependant on them after all) we get closer to reaching some of the other possible outcomes that they mention. Here are the two that they mention in the report:


> "...there are alternative scenarios on the upside and downside that could have significant macro-economic implications. The first is that *the housing boom may not run out of steam of its own accord, leading to serious overvaluation and imbalances throughout the economy*..."
> 
> "...The second scenario is that *house prices fall sharply, either because they are more overvalued than they appear or because a negative shock hits the economy*. The impact on activity and the budget could be large."


----------



## whathome

homeowner said:


> "When a company is struck off, it is very difficult for owners to sell their apartments, because there is no legal
> body in existence to own the common areas."


 
I wouldn't want to be stuck with one of those apartments if I was trying to sell in a falling market!


----------



## redo

Abandon ship.


----------



## phoenix_n

CapitalCCC said:


> I would like to hear a logical reasoning why yields in Germany are almost double Ireland - no interest rate or currency risk, so why such a large gap?


 
Logical reasoning would state that property should be getting at least 6-7 yields as property is illiquid and your capital is at risk. But this probably is best continued in the property investment section.


----------



## SidTheDweeb

phoenix_n said:


> This is something you wouldnt want to be in your investment profolio in the current weakening market.



Gawd that is one desperate looking apartment. And as for the price... you'd want to be insane.


----------



## homeowner

homeowner said:
			
		

> There are currently 200,000 people living in apartments - most of them single or childless couples.



That is a potential market of 200,000 people looking to move into houses over the next few years if they get married and have kids (or 100,000 if they marry each other  ) I'm not saying they *need* to have a house but most parents *want* to live in a house.


----------



## beattie

homeowner said:


> Article from today's Irish Independent, apologies for the formatting:
> 
> 
> If it is true and there is/will be a shortage of space in dublin in the next 5 years then I think dublin prices will hold quite well.


 
That is why there are empty blocks in Sandymount, huge vacancy levels in the new build in areas such as Smithfield..... This is one of the myths propagated by the EA's which causes some investors to still believe that
there is a shortage...


----------



## phoenix_n

SidTheDweeb said:


> Gawd that is one desperate looking apartment. And as for the price... you'd want to be insane.


 
You show that to any foreign friends and they will tell you without even knowing the market that property prices are just 'wrong' and are in-line for a correction.


----------



## Guest126

But Phoenix - is there a greater risk to capital in Germany?

If not, then why is the yield double the yield available in Ireland?


----------



## redo

phoenix_n said:


> You show that to any foreign friends and they will tell you without even knowing the market that property prices are just 'wrong' and are in-line for a correction.


Yes, they would laugh.  However, many of the new apts built recently in the burbs will look like that over time.  It's unnerving to thing apts like those 30 years ago were considered state of the art.


----------



## phoenix_n

CapitalCCC said:


> But Phoenix - is there a greater risk to capital in Germany?
> 
> If not, then why is the yield double the yield available in Ireland?


 
Think of it as current irish property is half the yield of what it should be.


----------



## Afuera

homeowner said:


> If it is true and there is/will be a shortage of space in dublin in the next 5 years then I think dublin prices will hold quite well.



 I don't think this is true at all. The Department of Environment, Heritage and Local Government have some interesting stats showing huge increases in zoned and serviced land in Dublin over the last 6 years:

SURVEY OF HOUSING ZONED SERVICED LAND AVAILABILITY

D/Laoghaire-Rathdown  #Housing Units
30 Jun 00 -> 7,146
30 Jun 01 -> 9,526
30 Jun 02 -> 10,071
30 Jun 03 -> 12,191
30 Jun 04 -> 13,388
30 Jun 05 -> 19,777

Fingal  #Housing Units
30 Jun 00 -> 34,721
30 Jun 01 -> 42,552
30 Jun 02 -> 37,115
30 Jun 03 -> 44,590
30 Jun 04 -> 35,623
30 Jun 05 -> 45,049

South Dublin  #Housing Units
30 Jun 00 -> 12,410
30 Jun 01 -> 18,680
30 Jun 02 -> 25,640
30 Jun 03 -> 37,246
30 Jun 04 -> 34,022
30 Jun 05 -> 35,480

Dublin City Council #Housing Units
30 Jun 00 -> 12,740
30 Jun 01 -> 20,632
30 Jun 02 -> 23,874
30 Jun 03 -> 24,160
30 Jun 04 -> 29,160
30 Jun 05 -> 44,883


Dublin Total  #Housing Units
30 Jun 00 -> 67,017
30 Jun 00 -> 91,390
30 Jun 00 -> 96,700
30 Jun 00 -> 118,187
30 Jun 00 -> 112,193
30 Jun 00 -> 145,189


----------



## Calina

homeowner said:


> (stuff about shortage of family living space in Dublin)
> If it is true and there is/will be a shortage of space in dublin in the next 5 years then I think dublin prices will hold quite well.



This was totally foreseeable and is in line with my general whinge that apartments were built for wealth generation purposes rather than for utility reasons. Given the vast amount of construction over the past four to seven years, there was a fantastic opportunity to build for the future and it has been totally squandered. 

But does it matter? No, because *loads of* people made a killing on property, and sure, that's what it's all about, folks. 

As for Dublin prices holding quite well, that's not strictly accurate. It depends on the property type and you can't generalise and say "Dublin will be alright" because Dublin covers a multitude, including 300K one bedroomed apartments close to no facilities, and lots of them.


----------



## Guest126

phoenix_n said:


> Think of it as current irish property is half the yield of what it should be.


 
Thanks for the tip!


----------



## homeowner

beattie said:


> That is why there are empty blocks in Sandymount, huge vacancy levels in the new build in areas such as Smithfield..... This is one of the myths propagated by the EA's which causes some investors to still believe that
> there is a shortage...



The report was commissioned by dublin city council not EAs.  I dont think they are saying there is a shortage of apartments, merely a shortage of living space for families in the city, hence the need to build large apartments suited for families like they have in most other major cities.  If they did that it would take the pressure off the demand for 3 bed semis.  I would certainly consider living in a large apt with my family if it was adaquetly built and serviced (and didnt cost a million yoyos).


----------



## gidxl03

At last! Someone rising to the challenge of reviewing what the professionals say - good post Auerfa if I may!

More comments on OECD later (am supposed to be working!).

Why is yield in Germany 6 or 7%? Easy. Because prices have fallen over 1% a year for the last 10 years or more. That'll put up the rental yield for you. Prices fell because of many factors, the most significant of which IMO is demographics. As the population falls more buildings become empty, no matter how the overall economy does. So your fund in German property may do well on yield, but I wouldn't like to depend on getting my capital back again!


----------



## Guest126

gidxl03 said:


> Why is yield in Germany 6 or 7%? Easy. Because prices have fallen over 1% a year for the last 10 years or more. That'll put up the rental yield for you. Prices fell because of many factors, the most significant of which IMO is demographics. As the population falls more buildings become empty, no matter how the overall economy does. So your fund in German property may do well on yield, but I wouldn't like to depend on getting my capital back again!


 
This is typical property investment ignorance!

What happened BEFORE does not matter.
What matters is what will happen in the FUTURE.

Why would I need 6% on my German rent to match 3% on my Irish rent (as an investor)?


----------



## phoenix_n

gidxl03 said:


> So your fund in German property may do well on yield, but I wouldn't like to depend on getting my capital back again!


 
Well thats called risk which i am fully aware of. In fact i am actually counting on capital apprecation and the yield is the worst case sceanario. 
Buy low. Sell high.

To be honest i am no financial advisor or guru. But what i am doing is following the smart money.

Besides..



gidxl03 said:


> Drops in asking prices have very little relevance. When you can show drops in SALE AGREED prices relative to other houses in the area that have already sold, then you have evidence to back up your argument of falling sentiment.
> 
> Just for a laugh, take a look at this diagram
> http://www.telegraph.co.uk/money/ma...d=242&sSheet=/money/2006/06/19/ixcitytop.html
> 
> Ireland is not the worst by a long shot!


 
0% chance of property crash in Germany. Now its only an article but......thats pretty low.


----------



## Firefly

To all those in the bear cave...if you're right and property crashes in the coming months, this will have wide reprocussions for the entire economy with almost all affected....what are you planning to do? i've heard some saying that they'd leave etc...if you're so sure it's gonna happen why are you waiting around? For those hoping to snap up a cheap property...you'll be joining a long queue. We can all give aruguments for/against a crash till the proverbial cows come home, but what are you doing about it?? 

Btw, don't want to come across as jibing or provoking, I am genuinely interested in where you think the "wise" money is going..

Firefly


----------



## whathome

Firefly said:


> Btw, don't want to come across as jibing or provoking, I am genuinely interested in where you think the "wise" money is going..
> Firefly


 
Maybe we should start a thread on "What will you do when the crash happens" - this thread is about sentiment


----------



## gidxl03

CapitalCCC said:


> This is typical property investment ignorance!
> 
> What happened BEFORE does not matter.
> What matters is what will happen in the FUTURE.
> 
> Why would I need 6% on my German rent to match 3% on my Irish rent (as an investor)?


 
Shocking!  The guy is about to invest 10 or 100's K in a market and you claim it doesn't matter what happend "before".  Not sure what before means - 2 months ago, a year ago, 10 years ago? If you have an established trend from the past (e.g. population in decline) it certainly will affect the FUTURE.  

Please expand where my "typical property investment ignorance" lies - I don't think I get it yet. Certainly not the last line above ??


----------



## Duplex

gidxl03 said:


> At last! Someone rising to the challenge of reviewing what the professionals say - good post Auerfa if I may!
> 
> More comments on OECD later (am supposed to be working!).
> 
> Why is yield in Germany 6 or 7%? Easy. Because prices have fallen over 1% a year for the last 10 years or more. That'll put up the rental yield for you. Prices fell because of many factors, the most significant of which IMO is demographics. As the population falls more buildings become empty, no matter how the overall economy does. So your fund in German property may do well on yield, but I wouldn't like to depend on getting my capital back again!


 
The yield is 6 or 7% because it is, I doubt that investment yields were lower in Germany a decade ago.  While the Americans, Brits and Irish have gone debt doolally over the past decade the Germans have keep their heads down over their lathes churning out BM's, Merecs, etc. 

P.S. Compare the relative performance of American, British and German car manufactures, tells you something about the relative merits of investment in speculation versus industry.


----------



## Calina

Firefly said:


> To all those in the bear cave...if you're right and property crashes in the coming months, this will have wide reprocussions for the entire economy with almost all affected....what are you planning to do? i've heard some saying that they'd leave etc...if you're so sure it's gonna happen why are you waiting around? For those hoping to snap up a cheap property...you'll be joining a long queue. We can all give aruguments for/against a crash till the proverbial cows come home, but what are you doing about it??
> 
> Btw, don't want to come across as jibing or provoking, I am genuinely interested in where you think the "wise" money is going..
> 
> Firefly



It's not a question of where the wise money is going, it's more a question of knowing whether you can hang in here while the property market is re-calibrating itself. 

Personally, I'd prefer to stay here if I could for family reasons. Much of my decision is not made on exclusively financial grounds, although I feel kind of unique in that respect. Very alone, actually. While I appreciate you are not being provocative in asking why people stay here if they see a crash coming, you also need to understand that such a decision is not always based solely on economic grounds. Rent has been an option for most people refusing to buy. 

I can't do anything much about avoiding a crash other than not contributing to the bubble and that has been my policy for the past few years. What do you expect us to do about preventing a crash when we didn't do anything to create it?

I can't foresee how hard it will be for me to buy property in the event of a crash. I wish I could. I don't want to count on it either. 

I get the feeling that in the question is an unspoken accusation that those of us who are strongly convinced that the Irish property market is unhealthy and unbalanced at the moment are going to be responsible for talking the market down. This is regrettable, since it was excessive and irrational demand on the part of others which drove it up. When it explodes I hope not to be collateral damage, but if I am, then I will move. But I won't be happy about it.


----------



## CelloPoint

Firefly said:


> To all those in the bear cave...if you're right and property crashes in the coming months, this will have wide reprocussions for the entire economy with almost all affected....what are you planning to do? i've heard some saying that they'd leave etc...if you're so sure it's gonna happen why are you waiting around?



I'm sticking around for my redundency payment. Why move now when there's still plenty of money in the economy and I have a stable job. One thing is for sure though, my savings will not be put in to Irish property. Germany is number one on my list at the moment.


----------



## whathome

From RTE's website today:

"Recent increases in interest rates rises pushed up mortgage repayments. Higher energy prices also had a significant impact last month, increasing the cost of petrol and home heating oil."
http://www.rte.ie/business/2006/0810/inflation.html

Mortgage repayments are a major component of increasing inflation. 

Avoid inflation - don't get a mortgage


----------



## Guest126

gidxl03 said:


> Shocking! The guy is about to invest 10 or 100's K in a market and you claim it doesn't matter what happend "before".
> 
> "typical property investment ignorance"


 
What happened before the dot com bubble burst?
People got VERY VERY rich investing in dot coms.

When it burst...people that invested LATE to dot coms got badly burnt.

What happened before to an investment is no indicator of what will happen to it in the future.


----------



## gidxl03

phoenix_n said:


> Well thats called risk which i am fully aware of. In fact i am actually counting on capital apprecation and the yield is the worst case sceanario.
> Buy low. Sell high.
> 
> To be honest i am no financial advisor or guru. But what i am doing is following the smart money.
> 
> Besides..
> 
> 0% chance of property crash in Germany. Now its only an article but......thats pretty low.


 
Billions of smart money has already gone to Germany but prices haven't budged .  Now if someone spots a trend where lots of imigrant workers start to go to Germany instead of Ireland then I'll look at Germany again.

The risk is low I agree but so is the potential for gain IMO. Also, the price is low for a good reason.  Don't buy it just because it looks cheap relative to Ireland.


----------



## soma

Firefly said:


> To all those in the bear cave...if you're right and property crashes in the coming months, this will have wide reprocussions for the entire economy with almost all affected....what are you planning to do?



Personally speaking, I've plenty of options. But most of those options would be non-existant if I was nailed to a jumbo mortgage.

I'm working on my qualifications to make them more 'internationally-reknowned', considering a part-time MBA & working on my foreign language abilities.



Firefly said:


> i've heard some saying that they'd leave etc...if you're so sure it's gonna happen why are you waiting around?



Two main reasons:
1) My better half has yet to finish her PHD.
2) I'm making alot of dosh in Ireland at the moment, and saving a significant chunk of it. Splitting the savings between cash & equities to hopefully keep my options open and remain largely liquid.



Firefly said:


> For those hoping to snap up a cheap property...you'll be joining a long queue.



I don't care about a 'cheap' property - what I care about is a property thats value for money. I'll happily buy that nice house in D6 when the repayments are at least in the same league as the equivalent rental payments.

I have no problems with settling in another EU country or perhaps even further afield. I also have a slowly but surely increasing distaste for Irish culture & society in general (I used to live in the US and Ireland seems to importing alot of it's more negative qualities).


----------



## gidxl03

CapitalCCC said:


> What happened before the dot com bubble burst?
> People got VERY VERY rich investing in dot coms.
> 
> When it burst...people that invested LATE to dot coms got badly burnt.
> 
> What happened before to an investment is no indicator of what will happen to it in the future.


 

I think what you mean is that past performance is not a guarantee of future returns.

What I mean is that the past (up to the present day) needs to be fully understood before investing.  New events in the future will ensure that no trend continues forever.  But these are difficult / impossible to predict.

Trends I see in Ireland is increasing population, pro-investment taxation policies, focus on the knowledge economy.  If this prediction is incorrect, then my optimistic outlook for Irish property is misplaced.


----------



## Duplex

whathome said:


> From RTE's website today:
> 
> "Recent increases in interest rates rises pushed up mortgage repayments. Higher energy prices also had a significant impact last month, increasing the cost of petrol and home heating oil."
> http://www.rte.ie/business/2006/0810/inflation.html
> 
> Mortgage repayments are a major component of increasing inflation.
> 
> Avoid inflation - don't get a mortgage


 
From that report;



> The SFA said there were stark differences between inflation in the services sector at 6.4%, while in the traded goods sector it was running at 1.7%.


 
Service sector inflation in Ireland is out of whack entirely.


----------



## StoppedClock

gidxl03 said:


> IIf this prediction is incorrect, then my optimistic outlook for Irish property is misplaced.


 
Are you currently buying property in Ireland and and/or advsing others to do so?


----------



## Guest126

gidxl03 said:


> I think what you mean is that past performance is not a guarantee of future returns.


 
No what I mean is that past performance is no indicator of future performance - in fact many contrarian investors believe it is an inverse indicator of future performance.

I do not believe in either theory - that of the contrarians nor your one which seems to be "it went up before so it will go up again probably".


----------



## Remix

Another slant on very low yields in Ireland is in the rent vs buy equation being more favorable towards renters.

Yields are so poor and house prices so high in my area (D6W) that house prices need only fall by a very small amount (1% - 2%) per year for me to be making a profit by renting versus buying.


----------



## phoenix_n

gidxl03 said:


> Billions of smart money has already gone to Germany but prices haven't budged ...
> 
> ...Don't buy it just because it looks cheap relative to Ireland.


 
Of course. You dont buy anything because its cheap relative to something else unless you actually need it.

When it comes to investing , you invest because of sound financial principles (i come from a business background). 

And just at the moment Irish property is not a sound investment.


----------



## Duplex

gidxl03 said:


> Trends I see in Ireland is increasing population, pro-investment taxation policies, focus on the knowledge economy. If this prediction is incorrect, then my optimistic outlook for Irish property is misplaced.


 
gidxl03

I suppose its a question of faith in the future.  Lets supposed you own a helicopter (maybe you do). You need to have the thing regularly serviced, the engine checked over etc. you are given the option of the services of two mechanics one an optimist the other a pessimist who would you choose?


----------



## Firefly

Thanks for your reply soma...my sentiments exactly...I'm working for the "safest" company I can and have a professional qual recognised globally, as does my wife, so we can work anywhere. 
Have some property behind me (and can meet repayments comfortably) but am not prepared to start re-arranging the deck chairs when the Titanic goes down!

If prices do fall..can we get a consesus where hardest hit and where 1st? My money is on apts outside the M50 and outside the regional cities...these are not IMHO sustainable for longterm living as they sacrafice space but do not offer proximity to city centre.

Firefly


----------



## Persius

homeowner said:


> Article from today's Irish Independent, apologies for the formatting:
> (stuff about shortage of family living space in Dublin)
> If it is true and there is/will be a shortage of space in dublin in the next 5 years then I think dublin prices will hold quite well.


 


Calina said:


> This was totally foreseeable and is in line with my general whinge that apartments were built for wealth generation purposes rather than for utility reasons. Given the vast amount of construction over the past four to seven years, there was a fantastic opportunity to build for the future and it has been totally squandered.
> 
> But does it matter? No, because *loads of* people made a killing on property, and sure, that's what it's all about, folks.
> 
> As for Dublin prices holding quite well, that's not strictly accurate. It depends on the property type and you can't generalise and say "Dublin will be alright" because Dublin covers a multitude, including 300K one bedroomed apartments close to no facilities, and lots of them.


 
I think there will be a shortage of _quality_ accomodation in Dublin in 10 to 15 years. By that stage, the bulk of the population will be around the age to have teen and pre-teen kids. They will need large, family friendly accomodation. Relativly speaking there will be much fewer twenty-somethings and early thirty-somethings than today. The sort of people looking for 1 and 2 bed appartments.

So if you _are_ in it for the long haul (or looking for your own PPR) and purchase a place in a decent Dublin location that will meet the needs of this key demographic in 10 or 15 years time, then I reckon you will do alright. But that doesn't mean that a poorly constructed 1 bed appartment outside the M50 will make you a tidy profit. In fact you may well sell it for less in 15 years than today's purchase price (all IMHO)


----------



## phoenix_n

Firefly said:


> If prices do fall..can we get a consesus where hardest hit and where 1st? My money is on apts outside the M50 and outside the regional cities...these are not IMHO sustainable for longterm living as they sacrafice space but do not offer proximity to city centre.
> 
> Firefly


 
e.g. Rockview in sandyford.


----------



## joe sod

It is unbelievable the number of postings on this thread. Nothing fires up so much opinion in ireland as property. Also alot of the postings are from new contributors who do not comment on other topics on this site.


----------



## gidxl03

Nice analogy Duplex, and no I don't and never will, own a helicopter!

I'd hire the pessimist, but if the dude is replacing expensive parts faster than they need to be I'd sack him and hire the optimist with the warning that he'll lose his job too if I crash and die.

I haven't given any advice.  Clearly there is cause to watch this market very carefully (that's why I'm here afterall).  I'm happy that I haven't given advice that has caused people to lose their hard earned cash. I'll break my rule and give one piece of advice; don't buy that awful apartment in Dublin with the well maintained common area that was featured earlier.


----------



## phoenix_n

joe sod said:


> It is unbelievable the number of postings on this thread. Nothing fires up so much opinion in ireland as property. Also alot of the postings are from new contributors who do not comment on other topics on this site.


 
From Paul McCartneys thread....



joe sod said:


> I have to say I have been intrigued with the break up of Paul McCartneys marriage with Heather Mills. I never had a very high opinion of her. I think she started to make McCartney look like an old fool and he started to become overly commercial in the last few years something he steered clear of for the previos 30.


 
 I have no real interest in the above


----------



## homeowner

phoenix_n said:


> e.g. Rockview in sandyford.



What's wrong with Rockview?  

Its 25 min walk to dundrum town centre and same for sandyford ind estate, there's a feeder bus to the luas which takes less than 10 mins.  I know some people who live there and they love it.


----------



## Bedsit

gidxl03 said:


> Trends I see in Ireland is increasing population, pro-investment taxation policies, *focus on the knowledge economy*.  If this prediction is incorrect, then my optimistic outlook for Irish property is misplaced.



"Focus on the knowledge economy" - I'd have to laugh. The recent spat of announcements from the minister for Enterprise and Employment have been to give companies millions of Euros in tax breaks and direct investment to setup shop here in the name of R&D. Do you really think that the likes of Intel and Google are doing any serious R&D here or just availing themselves of the low cost corporation tax regime that we have.


----------



## whathome

homeowner said:


> What's wrong with Rockview?
> 
> Its 25 min walk to dundrum town centre and same for sandyford ind estate, there's a feeder bus to the luas which takes less than 10 mins. I know some people who live there and they love it.


 
I think the areas discussion should be kept to the "Location, Location, Location" section on AAM


----------



## miju

homeowner said:


> That is a potential market of 200,000 people looking to move into houses over the next few years if they get married and have kids (or 100,000 if they marry each other  ) I'm not saying they *need* to have a house but most parents *want* to live in a house.


 
and most probably will but given the option of renting the same house for far below what do you reckon they'd do?

i know what my family are currently doing and that certainly aint buying


----------



## daveirl

Firefly said:


> this will have wide reprocussions for the entire economy with almost all affected....what are you planning to do?


I work for an Irish company that does no business with Irish companies only foreign companies. My job is safe independently of what the Irish economy does.


----------



## phoenix_n

homeowner said:


> What's wrong with Rockview?
> 
> Its 25 min walk to dundrum town centre and same for sandyford ind estate, there's a feeder bus to the luas which takes less than 10 mins. I know some people who live there and they love it.


 
I have no reason to dislike it but just what i read from location,location there seems to be always hassles with parking and i think 25 min walk to city centre is better than 25 min walk to dundrum when it comes to apartments. But again i dont live there so dont know.

But this is not the thread for such discussions..........

(but if you really want to know of a place that i suspect will be the first hardest hit it will be 'prospect hill' in finglas)


----------



## Persius

Bedsit said:


> "Focus on the knowledge economy" - I'd have to laugh. The recent spat of announcements from the minister for Enterprise and Employment have been to give companies millions of Euros in tax breaks and direct investment to setup shop here in the name of R&D. Do you really think that the likes of Intel and Google are doing any serious R&D here or just availing themselves of the low cost corporation tax regime that we have.


 
One of the big hidden risks IMHO. The US authorities could seriously start forcing these companies to prove that all the revenue they declare in Ireland is actually made in Ireland (and I'm pretty sure it isn't), and that they are not just using Ireland to avoid paying their fair share of US corporate tax. Such a scenario is more likely if US revenue intakes fall due to a recession there. If the multinationals were forced to admit that some of their revenue should actually be taxed in the US (or any third jurisdiction), then we will have lost one of our key competitive advantages in attracting and keeping these companies. No prizes for guessing the knock-on effect on the Irish economy in such a scenario.

And as for the _knowledge economy_ bit, talk to techie people from some of the east and south-east asian countries. In many ways they are already miles ahead of us. Frightning really.


----------



## Duplex

gidxl03 said:


> Nice analogy Duplex, and no I don't and never will, own a helicopter!
> 
> I'd hire the pessimist, but if the dude is replacing expensive parts faster than they need to be I'd sack him and hire the optimist with the warning that he'll lose his job too if I crash and die.


 
My problem is that I have no faith in human nature when it comes to matters financial.  I tend to the opinion that rational thought flys out the window episodically. 

*As famous economist John Kenneth Galbraith writes in his book "A Short History of Financial Euphoria":
*
_"Those who had been riding the upward wave decide now is the time to get out. Those who thought the increase would be forever find their illusion destroyed abruptly, and they, also, respond to the newly revealed reality by selling or trying to sell. And thus the rule, supported by the experience of centuries: the speculative episode always ends not with a whimper but with a bang."_


----------



## Calina

Persius said:


> One of the big hidden risks IMHO. The US authorities could seriously start forcing these companies to prove that all the revenue they declare in Ireland is actually made in Ireland (and I'm pretty sure it isn't), and that they are not just using Ireland to avoid paying their fair share of US corporate tax. Such a scenario is more likely if US revenue intakes fall due to a recession there. I



Not all that hidden, to be honest. Symantec have already drawn attention on that front, I think. 

But we're sliding off topic again. I actually think that issues on the property front will come ahead of other issues.


----------



## JohnBoy

phoenix_n said:


> Of course. You dont buy anything because its cheap relative to something else unless you actually need it.
> 
> When it comes to investing , you invest because of sound financial principles (i come from a business background).
> 
> And just at the moment Irish property is not a sound investment.


 
is this not the crux of the matter? the value of any investment is (in theory) based upon the present value of the stream of future cash flows. In the case of Irish residential property the low (or in some cases negative cash flows) make it an unnattractive investment. 

Admittedly, the same could have be said for dotcom stocks or indeed any asset that is subject to a speculative mania.

In the end the fundamentals will reassert themselves.


----------



## joe sod

phoenix_n said:


> From Paul McCartneys thread....
> 
> 
> 
> I have no real interest in the above


 
I dont know what your point is phoenix. You pulled a posting of mine from a completely different section. If you have no interest in it why did you pull it from "letting off steam" and then declare you had no interest in it. At least it proves that I comment on alot of topics not just property


----------



## whathome

Interesting article from Chambers Ireland on Stock Vs Property

"with Dublin property values, for example, having grown by close to 400pc in the past 10 years. Such a high level of confidence in one particular asset class is rare and normally precedes a correction."

http://www.chambers.ie/index.php?id=379


----------



## Calina

joe sod said:


> I dont know what your point is phoenix. You pulled a posting of mine from a completely different section. If you have no interest in it why did you pull it from "letting off steam" and then declare you had no interest in it. At least it proves that I comment on alot of topics not just property



But that's completely irrelevant to the question at hand. Start another thread in LOS if you want to complain about people limiting their input to various property related threads. The fact that you might comment on a lot of other things doesn't necessarily de-value the contributions of people about property on a property related thread, I would have thought. 

In any case, property is a major issue for a lot of people today. It is particularly so because a lot of people have spent a lot of money on it and a lot of other people are suggesting that that it may not be money well spent.


----------



## homeowner

whathome said:


> Interesting article from Chambers Ireland on Stock Vs Property
> 
> "with Dublin property values, for example, having grown by close to 400pc in the past 10 years. Such a high level of confidence in one particular asset class is rare and normally precedes a correction."
> 
> http://www.chambers.ie/index.php?id=379



That article was written by a portfolio manager from a brokerage house.  He is making a case for people to invest in the stock market.  What do you expect him to say?  This would be the equivalent of posting a link to an article written by an estate agent putting forward an argument for why its a good idea to invest in property.  IMO it is biased because it comes from someone who has a vested interest in people investing in the stock market.


----------



## whathome

Short-term speculators - I wonder how many of these are about.

We lost (Edit: opted out of) a bidding war on a €900,000 house in February, the deal went through a few weeks later. Driving past it today, Mrs. Whathome noticed that it had not been touched, weeds in the garden etc. So she cheekily stopped and took a closer look and it's vacant.

No building work, no furniture. It's exactly as it was in Feb. I'm not saying it was definitely a speculator however. 

With IO mortgages I wonder if there are many people taking big short-term bets on Dublin property?


----------



## Firefly

Why are German yields 6% and ours 3% - easy...the Germans have strict tenancy laws...making the tenant all powerful (hence the high rental figures)..German property looks cheap as a result. I would be VERY careful buying here as you may be buying the most illiquid of assets. Also, when Hanz from Munich wants his Bosch dishwasher upgraded..don't expect to get away with a Zanussi...
Firefly


----------



## phoenix_n

whathome said:


> Short-term speculators - I wonder how many of these are about.
> 
> We lost (Edit: opted out of) a bidding war on a €900,000 house in February, the deal went through a few weeks later. Driving past it today, Mrs. Whathome noticed that it had not been touched, weeds in the garden etc. So she cheekily stopped and took a closer look and it's vacant.
> 
> No building work, no furniture. It's exactly as it was in Feb. I'm not saying it was definitely a speculator however.
> 
> With IO mortgages I wonder if there are many people taking big short-term bets on Dublin property?


 
Would be interesting to see a property coming back on the market which i lost the bidding war to. And at a lower price.


----------



## phoenix_n

Firefly said:


> Why are German yields 6% and ours 3% - easy...the Germans have strict tenancy laws...making the tenant all powerful (hence the high rental figures)..German property looks cheap as a result. I would be VERY careful buying here as you may be buying the most illiquid of assets. Also, when Hanz from Munich wants his Bosch dishwasher upgraded..don't expect to get away with a Zanussi...
> Firefly


 
Yes completely agree with you. (having researched the market). Did you know that it can also take a year to kick Hanz out if he is not paying rent? 
Thats why i went for commercial property.

Having said that if i had a sufficient lump sum and wanted a income generating investment and also with a view to passing it on as an inheritance i would choose a small block of apartments in Hamburg.

But back to the Irish market...


----------



## CelloPoint

phoenix_n said:


> Would be interesting to see a property coming back on the market which i lost the bidding war to. And at a lower price.



Not to mention the stamp duty on 900k + legal fees. Ouch.


----------



## Superman

Firefly
German apartments come unfurnished - if one is lucky, one might get a cooker.  Hans will have to buy his own washing machine.

(Edit: replying/following on to StoppedClock below - but as this is off topic I'll stick it in here)
Other points of note regarding German tenants - many of my German friends have to fully repaint their apartments themselves when they move, as part of their contracts.  Also where Irish tenants have a tendency to think "Christ I have to pay rent! - I'm going to screw the Landlord for everything I can", Germans have a renting culture and don't seem have that sense of entitlement, IME. Give me a German tenant any day. 
(Also if anyone here has to rent an apartment in Germany - a good tip is not to mention the fact that you are Irish, in case they have had any experience of Irish tenants).


----------



## StoppedClock

Superman said:


> Firefly
> German apartments come unfurnished - if one is lucky, one might get a cooker. Hans will have to buy his own washing machine.


 
Lucky to get a kitchen, it is not at all unusual for there to be no cooker or work surfaces, cupboards etc.


Also Firefly it is very common to sell with sitting tenant so it could be argued that BTL in Germany is less illiquid than equivalent here.


----------



## fatmanknows

Raskolnikov said:


> ..............
> 
> Poppycock. The property market is in no way homogenous. We've recently sold a three bedroomed townhouse in Ballina that was bought back in 1990 just before the market started to take off. Taking inflation into account, it probably only appreciated 15-20% in real terms (attributable to higher incomes rather than any sort of property bubble). The reason? No one viewed the market for property in that area as speculatory. I never knew a single person in the town who bought a property there for capital appreciation.
> 
> *Fats : What's all that about ????????????*
> 
> 
> As for "the coming correction".
> 
> There's no such thing as a sure thing. By closing your eyes completely to the idea of a soft-landing, you're proving yourself to be just as blind and ignorant as the property bears out there.
> 
> *Fats : Sounds like your fully invested....very scared ....and hoping for the best with your eyes closed tight.*
> 
> Don't be so patronising, you neither have the wit nor the intelligence to pull it off.
> 
> *Fats : Perhaps we have something in common. then...............Apologies if I've ruffled your feathers.*


----------



## whathome

Far fewer First Time Buyers in coming years?

I was thinking about how the baby boom from the 70's has worked it's way through the various obsessions that have taken Ireland.

DMcW makes reference to it here, pubs closing etc.:
http://www.davidmcwilliams.ie/Articles/view.asp?CategoryID=-1&CategoryName=&ArticleID=267

Is property just the latest obsession because a glut of people at the "that" age need to buy property?

Nobody talks about the college points race anymore - because there are far fewer people in "that" age bracket and there is a surplus of college places.

Do you remember Superpubs?

In a few years, will people be saying "Do you remember the proberty bubble?"

With far fewer FTB's coming on the scene, who will prop up the market?


----------



## liteweight

beattie said:


> That is why there are empty blocks in Sandymount, huge vacancy levels in the new build in areas such as Smithfield..... This is one of the myths propagated by the EA's which causes some investors to still believe that
> there is a shortage...



Where are the empty blocks in Sandymount? If your referring to a previous post of mine I said........the builder kept the block, it remained empty and then he decided to rent out all the apartments himself.


----------



## whathome

liteweight said:


> Where are the empty blocks in Sandymount? If your referring to a previous post of mine I said........the builder kept the block, it remained empty and then he decided to rent out all the apartments himself.


 
I noticed another block in Clontarf of about 20 apartments.  I think they were sold about a year ago but most of them are vacant!


----------



## whathome

[broken link removed]=
This block is mostly empty, you can easily see into them from the road.


----------



## Jeanne

[broken link removed]=

The above house has been for sale all summer (sine May I believe). As with most properties everywhere, the asking price is ridiculous, however it's in a very popluar area and I'm certain that this time last year it would have sold, or at least had sale agreed by now.  Wonder how long it will take to sell? Will there be a big rush in September to snap it up? Will they have to reduce the asking price? So far, it looks that way.

A pal went to see a nice house in Knocklyon few weeks back. She said there were loads of people viewing but no offers. The Ea has been calling trying to encourage her to buy. She's decided not to.


----------



## whathome

Jeanne said:


> [broken link removed]=
> 
> The above house has been for sale all summer (sine May I believe). Will they have to reduce the asking price? So far, it looks that way.


 
Looks like it's ex-rental, investor selling up. We should watch this one for a price drop! There is so much unsold property sitting on the market coming into the autumn season, far more than previous years IMO. The market was so strong in previous years, that it didn't slow as much in the summer.


----------



## powderblue78

Yeah, I really think we are corner a turning

A friend of mine bought a place in Shankill this time last year for 365K.

Theere are now two identical houses on the same estate for sale on Myhome.  One is asking 475K.  The other is asking in excess of 530K (although it was 550k according to google cache), and has been sitting there for 2 months.

So a supposedly 45% increase on this estate in the space of a year assuming they get the crazy 530K asking price.
It seems like things just went nuts the first half of this year.   Final  crazy spurt before things dry up. 

(What's also amazing is there is a 55K difference in asking price between the asking price of the two identical houses currently for sale.  Really shows how no one know what houses are worth at the moment)


----------



## RiceCakes

whathome said:


> [broken link removed]=
> This block is mostly empty, you can easily see into them from the road.



€548K for a one bed in Clontarf!!!

Properties like these surely have a long way to fall in any downturn, just who would pay that for a one bed apartment 657 sq foot in Clontarf D3 Ireland???, crazy, absolutely crazy.


----------



## buyingabroad

RiceCakes said:


> €548K for a one bed in Clontarf!!!


 
There are fantastic views from this property. Right over the bay.


----------



## beta2

The Girlfriends father is a director in a very large building firm in Ireland.

About 2 months ago he disagreed with my view that we were heading for a property price correction, in fact he laughed lamenting that he couldn't see the end in sight!

Last week that firm cancelled all of it plans to build residential apartments in 2007. It also pulled out of several bidding wars that they were in trying to get land in dublin. They have also brought forward the completion dates of its existing apartment developments. In fact they have increased the workforce by 50% to get two large apartment blocks finished by the end of the year.

That to me is a worrying sign! to say the least.

A Friend of mine has just finished a 3 year degree (diploma) in architectural technology. hes a good friend of mine but i wouldn't let him near plans for a house with a 40 foot barge pole. Yet he is 22 years old who bearly passed a pass degree and several firms are offering him approx 35K with absolutely no experience to work for them! 

This reminds me of IT graduates before the dotcom burst.


----------



## ninsaga

beta2 said:


> A Friend of mine has just finished a 3 year degree (diploma) in architectural technology. hes a good friend of mine but i wouldn't let him near plans for a house with a 40 foot barge pole. Yet he is 22 years old who bearly passed a pass degree and several firms are offering him approx 35K with absolutely no experience to work for them!



...what has that got to do with anything?


----------



## Firefly

Whathome, I totally agree with you - the biggest wedge of population in ireland is 28-35 and are obsessed with property. The trick is going to be to target the next obsession...ask the folks what they were into when they were 40...if they can remember! Reckon private health care...maybe we should be investimg in nursing homes (kinda ties in with property)


Firefly


----------



## whathome

ninsaga said:


> ...what has that got to do with anything?


 
I thought the first part of Beta2's post was very interesting.
I wonder if many developers are scaling back their plans for next year in the face of continuing interest rate rises.


----------



## whathome

Firefly said:


> Whathome, I totally agree with you - the biggest wedge of population in ireland is 28-35 and are obsessed with property. The trick is going to be to target the next obsession...ask the folks what they were into when they were 40...if they can remember! Reckon private health care...maybe we should be investimg in nursing homes (kinda ties in with property)
> Firefly


 
I was thinking about the same thing - maybe commercial property: a cosmetic surgery clinic


----------



## beattie

beta2 said:


> The Girlfriends father is a director in a very large building firm in Ireland.
> 
> About 2 months ago he disagreed with my view that we were heading for a property price correction, in fact he laughed lamenting that he couldn't see the end in sight!
> 
> Last week that firm cancelled all of it plans to build residential apartments in 2007. It also pulled out of several bidding wars that they were in trying to get land in dublin. They have also brought forward the completion dates of its existing apartment developments. In fact they have increased the workforce by 50% to get two large apartment blocks finished by the end of the year.
> 
> That to me is a worrying sign! to say the least.


 
That is very telling that sentiment inside the building firms has soured so quickly. If we see a slowdown in building next year will many of the immigrants from the EU-10 head to some of the other countries which have opened up their labour markets thus causing even more vacant properties to appear.

This could turn far quicker than even I (a huge property bear) would have seen it being played out. Anyone buying in the current climate needs the men with the butterfly nets to nab them before they sign on the line which is dotted..........


----------



## CN624

beta2 said:


> Last week that firm cancelled all of it plans to build residential apartments in 2007. It also pulled out of several bidding wars that they were in trying to get land in dublin. They have also brought forward the completion dates of its existing apartment developments. In fact they have increased the workforce by 50% to get two large apartment blocks finished by the end of the year.




Would this be 1200 apartments in Tallaght?


----------



## liteweight

whathome said:


> Short-term speculators - I wonder how many of these are about.
> 
> We lost (Edit: opted out of) a bidding war on a €900,000 house in February, the deal went through a few weeks later. Driving past it today, Mrs. Whathome noticed that it had not been touched, weeds in the garden etc. So she cheekily stopped and took a closer look and it's vacant.
> 
> No building work, no furniture. It's exactly as it was in Feb. I'm not saying it was definitely a speculator however.
> 
> With IO mortgages I wonder if there are many people taking big short-term bets on Dublin property?



A four bed semi detached house in D4 sold for 2.435 million a couple of months ago. It needs total refurbishment! Since the auction it has remained empty. The reason, I'm told, is that the buyer is awaiting planning permission.


----------



## whathome

liteweight said:


> A four bed semi detached house in D4 sold for 2.435 million a couple of months ago. It needs total refurbishment! Since the auction it has remained empty. The reason, I'm told, is that the buyer is awaiting planning permission.


 
900k empty house was perfect, had already been done with new extension etc. One of the reasons we were so keen was that it was immaculate. Vacant for six months now, no skips or building mods going on.

In the Bank of Ireland Quarterly review for August '06 it mentions that in 2005, 54,000 loans were for new houses but there were 81,000 new house completions.
[broken link removed]
Could 27,000 *new* properties really have been bought with no mortgage last year?
Builders hanging on to 1/3 of their completions?


----------



## beta2

ninsaga said:


> ...what has that got to do with anything?



I'm comparing it to the dotcom bubble, IT graduates in the mid nineties were paid much more than they are worth, I'm simply saying that paying these relatively large wages to an inexperienced graduate is indicative of a bubble.

I can't see graduates from his course earning that kind of money in Ireland when the market corrects itself.


----------



## beta2

CN624 said:


> Would this be 1200 apartments in Tallaght?



I don't know the specifics, but I don't think they had plans for Tallaght


----------



## phoenix_n

beta2 said:


> Last week that firm cancelled all of it plans to build residential apartments in 2007. It also pulled out of several bidding wars that they were in trying to get land in dublin. They have also brought forward the completion dates of its existing apartment developments. In fact they have increased the workforce by 50% to get two large apartment blocks finished by the end of the year.


 
Was the demand not there for the residential apartments ? 
Do you know if the apts where the completion dates were brought forward are all sold (deposit taken) ?


----------



## robd

RiceCakes said:


> €548K for a one bed in Clontarf!!!
> 
> Properties like these surely have a long way to fall in any downturn, just who would pay that for a one bed apartment 657 sq foot in Clontarf D3 Ireland???, crazy, absolutely crazy.



Theres a story behind this one.  They were built by the guy who owns the Beaumount House.  He tried to sell them himself and cut off the agents.  He sold none.  They sat there for 6 months when completed.  Then Sherry Fitz got involved.  They still didn't sell.  Then the guy went around putting Sold signs on most of the properties and put some up for rent.  Were vacent for another 6 months.  Now they're being sold one by one.  Seems to have sold a few.  Yes they're way over priced.  Word was you could have got one for €490k if you made an over.  The 2 beds were/are even more outragous at €750k.  Incidently this area is prone to high tide flooding and did so about 3 years ago.


----------



## robd

whathome said:


> Far fewer First Time Buyers in coming years?
> 
> I was thinking about how the baby boom from the 70's has worked it's way through the various obsessions that have taken Ireland.
> 
> DMcW makes reference to it here, pubs closing etc.:
> http://www.davidmcwilliams.ie/Articles/view.asp?CategoryID=-1&CategoryName=&ArticleID=267
> 
> Is property just the latest obsession because a glut of people at the "that" age need to buy property?
> 
> Nobody talks about the college points race anymore - because there are far fewer people in "that" age bracket and there is a surplus of college places.
> 
> Do you remember Superpubs?
> 
> In a few years, will people be saying "Do you remember the proberty bubble?"
> 
> With far fewer FTB's coming on the scene, who will prop up the market?



That's exactly my feeling.  Demographics made it and demographics have broken it.  In the case of property demographics too will break it.  You don't see the 90k per year immigrants propping up the pub business.  

All you have to do is look around somewhere like Blackrock for a snapshot of how the pubs are struggling these days.  2 pubs gone since I returned to work in this area.  Other pubs like the Dollymount House in Clontarf have closed down to be (subject to pp) turned into appartments.  It had a very viable food business but no more than 50 people on a Fri/Sat night.  It was one of the superpubs when I was turning 18.


----------



## CelloPoint

robd said:


> Theres a story behind this one.  They were built by the guy who owns the Beaumount House.  He tried to sell them himself and cut off the agents.  He sold none.  They sat there for 6 months when completed.  Then Sherry Fitz got involved.  They still didn't sell.  Then the guy went around putting Sold signs on most of the properties and put some up for rent.  Were vacent for another 6 months.  Now they're being sold one by one.  Seems to have sold a few.  Yes they're way over priced.  Word was you could have got one for €490k if you made an over.  The 2 beds were/are even more outragous at €750k.  Incidently this area is prone to high tide flooding and did so about 3 years ago.



My family home is in Raheny, and I can tell you that very same story has travelled from D3 to D5. It's hilarious really the fact that yer man had to put up 'sold' signs on his flats! You're right about the flooding too. Wouldn't go near that ground-floor, one bed with a barge pole.

Hilarious!


----------



## CelloPoint

robd said:


> All you have to do is look around somewhere like Blackrock for a snapshot of how the pubs are struggling these days.  2 pubs gone since I returned to work in this area.  Other pubs like the Dollymount House in Clontarf have closed down to be (subject to pp) turned into appartments.  It had a very viable food business but no more than 50 people on a Fri/Sat night.  It was one of the superpubs when I was turning 18.



I'd say you'd be damn glad to have a pub in the future. Selling out to build apartments in the hope the property market is still buoyant in 2 year's time is a risky endeavour.


----------



## Guest107

robd said:


> All you have to do is look around somewhere like Blackrock for a snapshot of how the pubs are struggling these days.



The peak pub every night demographic bulge has already gone through. The number of 18 year olds in ireland peaked in c.1999 and these guys are now 25. While many are about to buy (after they pay off Australia don't forget) it is MOST likely that they will reluctantly buy into a falling market.

The immigrants will have gone because there is no more building . Thast what brought most of them here. The flippers will be dumpers  

It was said of the dot com boom that 10 years worth of infrastructure was built in 5 years and took 5 years to work out of the system. The same is true of Irish property. A sustainable level of building in this decade was some 50000 units a year but we have built 80000 a year for 4 years (including this) on average and now have an overhang of at least 2.4 years building (120000 units) to work through. 

By that measure we would reach equilibrium again in 2 or 3 years but _ONLY if we build nothing _. As we will still build something every year it will take 4-5 years of slumpitude before this equilibrium is reached. Thats my opinion anyway.


----------



## phoenix_n

phoenix_n said:


> This is something you wouldnt want to be in your investment profolio in the current weakening market.


 
I was thinking about how much i would pay for this place. I put a figure of 80K. Max 100k (over 25 yrs at 4% would be 530 a month). Future rental yields would be about 700 max a month i think as it is a very old property. 

But that is how, IMO, such property could crash substantially in price. From 380K to 80K/100K.


----------



## gar123

just to follow on from a earlier post regarding number of properties for sale within an estate, i have heard of a particular agent in Blanch putting for sale signs outside properties they are letting on behalf of clients to get the name out and about

this has led to a bit of a panic amongst some of my neighbours thinking everyone is doing a runner!


----------



## Guest107

phoenix_n said:


> But that is how, IMO, such property could crash substantially in price. From 380K to 80K/100K.



Unlikely.

In peripheral areas property will fall as much as 50% from now. In better areas as little as 25% . Outer commuter belt is what I call peripheral. 30-50 miles out from Dublin and 10-25 miles out from Galway . Those kinds of areas will be savaged. No modern _houses_ will drop below €150k except out the back of Ballivor maybe .

Dodgy apartments in the cities where the management fees and structures are loaded against the occupiers  will also get it in the neck. I can see standard purchase contracts for apartments becoming very very strict and lots of litigation between apartment 'owners' and their management companies and agents and legislation to clean the whole mess up .

That will take years to sort out though , affecting the prices in some complexes very badly as apartment purchasers migrate towards transparently and fairly  managed complexes.


----------



## Afuera

whathome said:


> In the Bank of Ireland Quarterly review for August '06 it mentions that in 2005, 54,000 loans were for new houses but there were 81,000 new house completions.
> [broken link removed]
> Could 27,000 *new* properties really have been bought with no mortgage last year?
> Builders hanging on to 1/3 of their completions?



Thanks for the link... Interesting reading.

When that 275,000 vacancy number first materialized from the CSO report I was a bit dubious because it seemed so high. With this data showing that up to a 1/3 of new properties may not be sold and anecdotal evidence that some investors are willing to hold on to properties without renting them out, that figure may not be far out after all.

I really have to laugh at their methods for working out affordability in that same report though:

_Our own model compares the annual cost of servicing an average new mortgage
(with an assumed 25-year term) with average gross earnings. The latter is
calculated by dividing the total wages paid to employees by the number of
employees. In 2005, for example, this delivers a figure of €38,240, a 5%
increase on the previous year. Using an average mortgage rate of 3.5% and a
€200,000 mortgage gives a monthly outlay of €1,000, or 31.4% of average
earnings.

_I can't imagine that many mortgages this year were taken out over 25 years. An average earnings figure of 38,240 seems excessive (the median might be more useful) and the mortgage rate given at 3.5% is no longer a realistic figure. Also to top it all off, suggesting that an average mortgage of 200,000 is a useful guage on affordability is a joke!

Even with these heavily skewed figures they are unable to hide the complete loss of affordability.


----------



## phoenix_n

2Pack said:


> Unlikely.
> 
> In peripheral areas property will fall as much as 50% from now. In better areas as little as 25% . Outer commuter belt is what I call peripheral. 30-50 miles out from Dublin and 10-25 miles out from Galway . Those kinds of areas will be savaged. No modern _houses_ will drop below €150k except out the back of Ballivor maybe .
> 
> Dodgy apartments in the cities where the management fees and structures are loaded against the occupiers will also get it in the neck. I can see standard purchase contracts for apartments becoming very very strict and lots of litigation between apartment 'owners' and their management companies and agents and legislation to clean the whole mess up .
> 
> That will take years to sort out though , affecting the prices in some complexes very badly as apartment purchasers migrate towards transparently and fairly managed complexes.


 
I would not be so general in your percentages because it will differ from house to house. For example with over-supply the whisper of car noise from outside will render many properties undesirable when you have choice.

So what would you pay for the linked apartment ?


----------



## Guest107

phoenix_n said:


> I would not be so general in your percentages because it will differ from house to house.



You are right in stating that there will be variations Phoenix but you are WRONG if you think that the €80k-€100k semi is making a comeback anytime  in this decade unless its situated beside a hardstand or under a motorway or something like that  . I have my assumptions , as stated, on average variations to do with distances, time of commute , cost of petrol , overhangs of properties in more desirable areas, etc etc.

Even if an apartment complex was run by scum from hell developers it still has some value ...but maybe not much. Once some of them are badly flooded (and uninsurable for eternity thereafter ) they will go as low as €50k in some cases but that does not mean I want to swim either.


----------



## bearishbull

[broken link removed]=

How much would this house cost in Dublin?? Shows you how much houses can cost to build.


----------



## Guest107

bearishbull said:


> [broken link removed]=
> 
> How much would this house cost in Dublin?? Shows you how much houses can cost to build.



Well its probably built in an infilled bog ..knowing Bonniconlon, so the land cost feck all.

1180 sq ft for €160k , and allowing land costs of €10k per site means the build and the profit came to €150k . As the markup is 25% at least the build came to  €120k  so thats  1200 sq ft (rounded) for €120k or €100 a square foot which is what people are told to expect.

The land would have been dirt cheap which explains the price and  the area is hardly affluent or majorly desirable.


----------



## room305

Firefly said:


> To all those in the bear cave...if you're right and property crashes in the coming months, this will have wide reprocussions for the entire economy with almost all affected....what are you planning to do? i've heard some saying that they'd leave etc...if you're so sure it's gonna happen why are you waiting around? For those hoping to snap up a cheap property...you'll be joining a long queue. We can all give aruguments for/against a crash till the proverbial cows come home, but what are you doing about it??



I don't think a property crash is imminent and I certainly won't be buying property when the crash does occur. Fools buy into dead cat bounces (although it is different if you are buying somewhere to live).

If you want to see where people are sticking there money it might be advisable to set up a separate thread. Don't want to stray too far off topic.


----------



## Duplex

This my stab at finding the fundamental value of a modern two bedroom apartment in a town in West Meath, currently on the market at €220,000, with similar properties on the rental market at €500 per month.


Annual rent €6,000 less one month rent void and one month service charge.

Net Income: €5,000

Capatialisation rate: €5,000/€220,000 = 44

Net Yield: 44/100=2.27%

Valuation based on equated yield.

20 year Eurobond yield 4.2% 
Risk weighting 4%

Equated Yield say 8%

Capitalisation rate 8/100 = 12.5

Valuation: Net Income x 12.5 = €65,000


----------



## Guest107

Duplex said:


> This my stab at finding the fundemental value of a modern two bedroom apartment in a town in West Meath, currently on the market at €220,000, with similar properties on the rental market at €500 per month



Fair Value About €110-€120k which would be consistent with my stating that properties in the outer pale/midlands are valued at the moment so that a correction could go to 50% of current value. The midlands is the poorest region in ireland as measured by GDP and has been for years. 

see [broken link removed]


----------



## whathome

phoenix_n said:


> _This is something you wouldnt want to be in your investment profolio in the current weakening market._
> 
> I was thinking about how much i would pay for this place. I put a figure of 80K. Max 100k (over 25 yrs at 4% would be 530 a month). Future rental yields would be about 700 max a month i think as it is a very old property.
> 
> But that is how, IMO, such property could crash substantially in price. From 380K to 80K/100K.


 
If it was done up, I'd say it would rent for €1000/month, I would begin to think about buying this apartment if the gross yield was above 6%. If you could overlook the fact that the building looks very cold-war, it might start make sense for me at around €200,000

That's a drop of €180,000 (47%)

Edit : Note, 6% is way below the limit that many professional investors would buy at meaning they would only buy if the purchase price was even lower!


----------



## bearishbull

Duplex said:


> This my stab at finding the fundamental value of a modern two bedroom apartment in a town in West Meath, currently on the market at €220,000, with similar properties on the rental market at €500 per month.
> 
> 
> Annual rent €6,000 less one month rent void and one month service charge.
> 
> Net Income: €5,000
> 
> Capatialisation rate: €5,000/€220,000 = 44
> 
> Net Yield: 44/100=2.27%
> 
> Valuation based on equated yield.
> 
> 20 year Eurobond yield 4.2%
> Risk weighting 4%
> 
> Equated Yield say 8%
> 
> Capitalisation rate 8/100 = 12.5
> 
> Valuation: Net Income x 12.5 = €65,000


Are you not including the other costs of being a landlord in your net yield? Maintenance insurance etc?


----------



## Guest126

Duplex said:


> Valuation based on equated yield.
> 
> 20 year Eurobond yield 4.2%
> Risk weighting 4%
> 
> 
> Valuation: Net Income x 12.5 = €65,000


 
But surely the Eurobond yield of 4.2% is the entire return, i.e. the bond is bought at par so the yield (including capital value return) is 4.2%.

I would think for a property we tend to expect a capital appreciation as well as a yield so an equated yield should be in the 3.5% to 4.5% region...even though I am a BEAR!


----------



## phoenix_n

2Pack said:


> You are right in stating that there will be variations Phoenix but you are WRONG if you think that the €80k-€100k semi is


 
I was talking about a specific apartment not semis. ?


----------



## Duplex

CapitalCCC said:


> But surely the Eurobond yield of 4.2% is the entire return, i.e. the bond is bought at par so the yield (including capital value return) is 4.2%.
> 
> I would think for a property we tend to expect a capital appreciation as well as a yield so an equated yield should be in the 3.5% to 4.5% region...even though I am a BEAR!


 
We'll assume 0% inflation.


----------



## Persius

People do still purchase to live in the property. In this case a "fair" price could perhaps be judged as perhaps 15 to 30% more than the price of renting an equivalent property on a 25 year mortgage at a rate of 5.5%

None of these are exact figures, but the point is if I want to buy a property to live in myself, and am happy to live there for a long time, then I use different figures to see if the price adds up, rather than the 6% yield expectation. A purchaser of a house to live in themselves would probably give the house a higher monetary worth than a proper investor looking for his 6% yield.


----------



## Firefly

65k for an apartment??...bout the same price as a new 5 series...not much chance of that happening me thinks...
Firefly


----------



## Guest107

phoenix_n said:


> I was talking about a specific apartment



different variables apply for apartments , management company transparent or no ?

managing agent doing job , expensive or no ??

sink fund able to pay for that roof that needs doing or those new windows ....or no , is there a sink fund ??

parking for 2 cars or no ?????

cannot really say mate.


----------



## delboy159

Phoenix_n -- I actually live about 5 mins walk from those apartments (even though I've never seen them).

And while the one listed looks brutal the area is highly sought after.  It is surrounded by lovely red bricks and is a very safe area..  I would rent that 2 bed (I know barely a 2 bed) in a second for €800 in the current rental market (assuming the place isn't damp or smelly or dodgy etc.)

Therefore based on an approximate 4% yield (not including stamp and running costs etc.) I'd pay €240,000 in a heartbeat and would up it to the low €300k's if the apartment was in good condition (better then the image the dark pictures give anyway) and might rent for €900/950.  A typical 2 bed in that area rents for €1,200 easily, so your allowing for how bad the place looks when quoting 900/950 as a figure. 380k is crazy, but it's not as crazy as the small numbers your quoting....  That property should sell for the low 300ks - possible even 290k - no more...


----------



## Duplex

bearishbull said:


> Are you not including the other costs of being a landlord in your net yield? Maintenance insurance etc?


 
Gross rent €6,000 less one month for voids, one month for service charge, insurance, management etc. Net Income €5,000.


----------



## phoenix_n

delboy159 said:


> Therefore based on an approximate 4% yield (not including stamp and running costs etc.) I'd pay €240,000 in a heartbeat and would up it to the low €300k's if the apartment was in good condition (better then the image the dark pictures give anyway) and might rent for €900/950. A typical 2 bed in that area rents for €1,200 easily, so your allowing for how bad the place looks when quoting 900/950 as a figure. 380k is crazy, but it's not as crazy as the small numbers your quoting.... That property should sell for the low 300ks - possible even 290k - no more...


 
300K at 4% for 25yrs works out at 1500 a month repayments. I live in the area but have not seen them myself but even if max rent is 1200 ( i am working on the assumption of falling rents) you still are 300 a month short in terms of investment. Factor in tax,insurance,maintenance, i cannot see it getting the figure that you suggest.

I am not suggesting that the price would fall to 100K but on just looking at it as an investment vehicle it would suggest it could.


----------



## redo

Can we cut down on the yield stuff, my head is getting sore.


----------



## Guest107

I see a flat roof and a big job to fix it . I expect a good sink fund in place for which a premium _may _be payable !


----------



## Duplex

Firefly said:


> 65k for an apartment??...bout the same price as a new 5 series...not much chance of that happening me thinks...
> Firefly


 

As the investment market consumes 40-50% of new home production, I think its worthwhile approaching it from this angle.  Prices in Tokyo are down 70% from peak, prices have fallen for condos in some US cities by 20% in a year.  In London in the early 90's flats fell in some parts of South London by 50%.   I know its hard to fathom but these things do happen when a speculative market crashes.


----------



## delboy159

Firstly you are assuming rents will drop - if the property market bubble does pop or burst - output will decline which will have a knock on effect to the rental market which will stabilise rents if not increase them.

Also, a lot of investors (I'm making an assumption about this), will fork out their 400k all in for a place like this, but it might only be 250k of a mortgage - which the rent might just cover.  Their own cash is capital appreciation investment and the rent covers their mortgage.  

I've seen prices rocket around that area over the past 8 months and people have told me that the majority of purchasers are investors, but not 28 year olds looking to leverage to the hilt, they are older people who probably (and seem to) have a lot of cash to put into the deal...

You have to be realistic about the market, not just looking at the mortgage v rent formula, because a lot of investors are able to look beyond this.


----------



## phoenix_n

redo said:


> Can we cut down on the yield stuff, my head is getting sore.


 
 Its just that when capital appreciation stalls and yields are calculated the speculation in Irish property stops.


----------



## Duplex

delboy159 said:


> Firstly you are assuming rents will drop - if the property market bubble does pop or burst - output will decline which will have a knock on effect to the rental market which will stabilise rents if not increase them.
> 
> Also, a lot of investors (I'm making an assumption about this), will fork out their 400k all in for a place like this, but it might only be 250k of a mortgage - which the rent might just cover. Their own cash is capital appreciation investment and the rent covers their mortgage.
> 
> I've seen prices rocket around that area over the past 8 months and people have told me that the majority of purchasers are investors, but not 28 year olds looking to leverage to the hilt, they are older people who probably (and seem to) have a lot of cash to put into the deal...
> 
> You have to be realistic about the market, not just looking at the mortgage v rent formula, because a lot of investors are able to look beyond this.


 
Rental growth always follow income growth (you cant borrow money to pay rent). There are times in the market when supply/demand imbalances effect this trend (such as now where rental income lags wage income).


----------



## phoenix_n

delboy159 said:


> Also, a lot of investors (I'm making an assumption about this), will fork out their 400k all in for a place like this, but it might only be 250k of a mortgage - which the rent might just cover. Their own cash is capital appreciation investment and the rent covers their mortgage.
> 
> You have to be realistic about the market, not just looking at the mortgage v rent formula, because a lot of investors are able to look beyond this.


 
But you have to include the opportunity cost of the lost deposit interest on the 150K cash they are putting into the place.  I know what you are saying but these investments at current market rates do not justify their price without capital appreciation.


----------



## beattie

delboy159 said:


> Firstly you are assuming rents will drop - if the property market bubble does pop or burst - output will decline which will have a knock on effect to the rental market which will stabilise rents if not increase them.
> 
> 
> You have to be realistic about the market, not just looking at the mortgage v rent formula, because a lot of investors are able to look beyond this.


 
There is currently no shortage of units in Ireland at the moment so I can't see any upward pressure on rents in the next 3-5 years.

I agree that many cash rich investors can (and do) pump in a load of their own money (I know of a couple myself) but once cap appreciation tails off why would they keep doing this?


----------



## CelloPoint

Has anyone seen a noticable increase in the number of 'for sale' signs yet? I haven't as of yet, but perhaps some of the posters in the west Dublin area might?


----------



## phoenix_n

If you like. The apt is worth 250K (still think overpriced). The cost of entering the market is 150k cash. (competition is fierce) This 150K cash is speculating that the apt will increase in value. (sale price 400k)

If it does not you have lost your 'bet' on the market. Apt is still worth 250k(as income generating vehicle). You just lost 150K.

And thats how it has worked in the past housing crashes and how it may work here.


----------



## Guest107

delboy159 said:


> Firstly you are assuming rents will drop - if the property market bubble does pop or burst - output will decline which will have a knock on effect to the rental market which will stabilise rents if not increase them.



Have you read ANY of this thread   There is a massive preprogrammed oversupply of inventory in the market which will take years to shake out .


----------



## Raskolnikov

CelloPoint said:


> Has anyone seen a noticable increase in the number of 'for sale' signs yet? I haven't as of yet, but perhaps some of the posters in the west Dublin area might?


I've seen quiet the opposite, estate agents windows in my Cork suburb are looking extremely bare. In one EA's office, they've resorted to putting three ads for each house on their windows.


----------



## CelloPoint

Raskolnikov said:


> I've seen quiet the opposite, estate agents windows in my Cork suburb are looking extremely bare. In one EA's office, they've resorted to putting three ads for each house on their windows.



Really? What do you think is the cause of this phenomenon?


----------



## delboy159

2Pack - I have actually read all of this thread (which isn't easy) - and people have used anecdotal evidence that there is an over supply (people sitting on properties etc.) - but I haven't seen geographical spread on this or concete evidence other than "I've heard" or trying to make assumptions on very raw Census figures.  The fact remains - if you are trying to rent in Dublin it's not one tenth as hard as it was 5 years ago, but it's still a competitive market. Landlords have to try a little, but they still get tenants.  Apartments in the outskirts of Dublin or on the edge of rural towns are a different kettle of fish in this regard and we all agree that these properties will be the first hit when things get rough...  However in Dublin and the other greater urban centres, the normal economic rules of rents increasing when supply of houses decrese will hold true - I'm not actually expecting rents to increase, but I do believe they will stay stable.... 

Phoenix_n - I do agree that the 150k cash and the 250k mortage isn't "good business", but guess what - I'm only saying it like it seems to be out there.  Also many investors aren't looking purely at cap appreciation on their 150k.  They would look at 250k being paid off by renters and their 150k cash turning into a full property in 20 years time - a noce little nest egg for only 150k of their own money.  I don't agree with this logic and see the flaws - and do agree this will feed into an inevitable property crash, but as regards current public sentiment - this seems a relevant insight into a major portion of the purchasing public.


----------



## Afuera

delboy159 said:


> 2Pack - I have actually read all of this thread (which isn't easy) - and people have used anecdotal evidence that there is an over supply (people sitting on properties etc.) - but I haven't seen geographical spread on this or concete evidence other than "I've heard" or trying to make assumptions on very raw Census figures.



Are you suggesting that the recent preliminary census report from the CSO highlighting an estimated 275,000 vacant properties is purely anecdotal?

Also, the report that whathome mentioned from BoI is hardly what you'd call anecdotal evidence either: [broken link removed]

They state in this that out of the 81,000 new homes built in 2005, a mortgage was used to pay for only 54,000 of them. It doesn't go into details about what happened the other 27,000 but suggests that some of them may have been paid for outright.

I don't think investors are stupid, so why would they put their money into a risky vehicle that gives them a 3% return when they could put that same money into a secure institution such as a bank and get a guaranteed 5% return?

If we're to believe that investors are behaving in that kind of manner than it's proof that the market is not rational and speculation has taken a hold of it. If investors are not behaving in this way than it points to over supply and unsold inventory. Neither scenario is particularily good for the market.


----------



## nacho_libre

I think the current public sentiment is that a crash or at least a property slowdown 
is looming. However, from what I gather on this thread there is no "real" evidence 
that this has commenced yet or is anywhere near commencing. 

Just because a handful of properties have had to reduce there guide-price in order 
to stir up some interest for a sale, I believe this no indication of a slump or 
anything of the sort. 

IMO the housing market will continue to grow rapidy for at least another 18 months, 
after that I think it will calm a bit but this crash that people keep talking about is 
a long time coming and personally I'll not be holding my breath.


----------



## CelloPoint

nacho_libre said:


> I think the current public sentiment is that a crash or at least a property slowdown
> is looming. However, from what I gather on this thread there is no "real" evidence
> that this has commenced yet or is anywhere near commencing.
> 
> Just because a handful of properties have had to reduce there guide-price in order
> to stir up some interest for a sale, I believe this no indication of a slump or
> anything of the sort.
> 
> IMO the housing market will continue to grow rapidy for at least another 18 months,
> after that I think it will calm a bit but this crash that people keep talking about is
> a long time coming and personally I'll not be holding my breath.



What is your reasoning for this rapid continuation of growth over the next 18 months?


----------



## Afuera

nacho_libre said:


> I think the current public sentiment is that a crash or at least a property slowdown
> is looming. However, from what I gather on this thread there is no "real" evidence
> that this has commenced yet or is anywhere near commencing.



The daft report for Q2 of 2006 has shown that there has been a decline in the average asking price since April of this year. While this is "real" evidence that there is a slowdown happening it is difficult to distinguish at this stage how much is due to seasonal factors.


----------



## nacho_libre

CelloPoint said:


> What is your reasoning for this rapid continuation of growth over the next 18 months?



Just pure demand. I'm witnessing bidding wars everday for properties that are very 
obviously overvalued and unattractive, but such is the demand that the back of the 
queue of these overbidders is still not visible. Of course I can only speak for my own 
particular area but even in this particular area the talk of an eminent crash is 
constant yet the properties are still selling like hot-cakes.


----------



## nacho_libre

Afuera said:


> The daft report for Q2 of 2006 has shown that there has been a decline in the average asking price since April of this year. While this is "real" evidence that there is a slowdown happening it is difficult to distinguish at this stage how much is due to seasonal factors.



The asking price for a house has no "real" significance. It's not like it's a price tag, 
A starting point for a bidding war and a way to attract more interest a bit quicker.


----------



## StoppedClock

nacho_libre said:


> I can only speak for my own
> particular area but even in this particular area the talk of an eminent crash is
> constant yet the properties are still selling like hot-cakes.


 
Where is your area?


----------



## nacho_libre

StoppedClock said:


> Where is your area?



Cork City and suburbs


----------



## Guest126

Hot cakes in Cork?

Not sure about that.

I had bid in on one place and could not believe how quickly it was accepted, I walked away, also went to view new apartments in Blackpool (< 1 mile from city centre) and the EA seems to be struggling to shift them.


----------



## delboy159

Afuera - The two examples you used the CSO figures - which explain nothing - were apartments empty?  or are students not houses over the summer? Are houses empty due to old people in a home (2 houses on my cul de sac of 17 are like this - old person in a home - house empty).  Investors buying holiday homes for their own use which were empty.  The CSO stats are very raw and hard to use as the basis for any arguement.  

As for the BOI stats - I don't believe that 27,000 homes were paid for with cash - but - if I wanted to justify a point based on raw general statistics I could say - that 20,000+ houses were bought for cash in 2005 which proves there is a lot of cash in the Irish property market which means there is a lot of room for levearge and further expension of the market in the coming years.. That statement is as based on fact as yours and we both know what I just wrote isn't the fact of the situation....

Lies, damn lies and statistics!


----------



## Afuera

nacho_libre said:


> The asking price for a house has no "real" significance. It's not like it's a price tag,
> A starting point for a bidding war and a way to attract more interest a bit quicker.



Yes, this is a well acknowledged tactic by estate agents to draw buyers interest. It still doesn't answer why they have to use lower prices now then they were using back in April. When compared to last year there was not such a noticible dip.

I think you might be dissapointed if you're looking for absolute concrete proof of a slowdown. This will only really come out maybe 3-4 months after the market has begun to slide. If there is no pick up in sales this September or October then there's very real danger of a major slide happening.


----------



## miju

nacho_libre said:


> Just pure demand. I'm witnessing bidding wars everday for properties that are very
> obviously overvalued and unattractive, but such is the demand that the back of the
> queue of these overbidders is still not visible.


 
so on one hand you can see prices are obviously overvalued (your words) but yet you think this situation is sustainable????? 

yeah right, you sure your not an estate agent seeing as you witness them everyday???



delboy159 said:


> Afuera - The two examples you used the CSO figures - which explain nothing - were apartments empty? or are students not houses over the summer? Are houses empty due to old people in a home (2 houses on my cul de sac of 17 are like this - old person in a home - house empty). Investors buying holiday homes for their own use which were empty. The CSO stats are very raw and hard to use as the basis for any arguement.


 
the cso figures DIDN'T include holiday homes and if i'm not mistaken the census certainly wasn't carried out in the summer so bang goes that student theory of yours and has for the old people while i've no hard stats / evidence i think it's pretty safe to say that they're contribution to the full figure would be negligible


----------



## nacho_libre

CapitalCCC said:


> Hot cakes in Cork?
> 
> Not sure about that.
> 
> I had bid in on one place and could not believe how quickly it was accepted, I walked away, also went to view new apartments in Blackpool (< 1 mile from city centre) and the EA seems to be struggling to shift them.



What about this place for example? 

[broken link removed]

There is currently an offer on this house of 256k and I've seen. It needs about a lot 
of work on the inside. About 20k-30k. 

Just an example that the demand is still strong.


----------



## Afuera

delboy159 said:


> Afuera - The two examples you used the CSO figures - which explain nothing - were apartments empty? or are students not houses over the summer? Are houses empty due to old people in a home (2 houses on my cul de sac of 17 are like this - old person in a home - house empty). Investors buying holiday homes for their own use which were empty. The CSO stats are very raw and hard to use as the basis for any arguement.



Holiday homes are not counted in that figure. The census was held during April which would rule out students being away for summer. Old people in homes is legitimate but as you know we've a very young demographic which would make it hard for all 275,000 to be explained by this.



delboy159 said:


> As for the BOI stats - I don't believe that 27,000 homes were paid for with cash - but - if I wanted to justify a point based on raw general statistics I could say - that 20,000+ houses were bought for cash in 2005 which proves there is a lot of cash in the Irish property market which means there is a lot of room for levearge and further expension of the market in the coming years.. That statement is as based on fact as yours and we both know what I just wrote isn't the fact of the situation....



If you said that 20,000+ houses were bought outright then this would not only prove that there is a lot of cash in the Irish property market. It would also prove that people are speculating on capital appreciation. That's not exactly a healthy sign.



delboy159 said:


> Lies, damn lies and statistics!



As with anything the facts can be spun  

There's a limit to how far credibility can go out the window though. BoI using an average mortgage of 200,000 to try and measure affordability is just taking the piss to be honest.


----------



## nacho_libre

miju said:


> so on one hand you can see prices are obviously overvalued (your words) but yet you think this situation is sustainable?????
> 
> yeah right, you sure your not an estate agent seeing as you witness them everyday???
> 
> 
> 
> the cso figures DIDN'T include holiday homes and if i'm not mistaken the census certainly wasn't carried out in the summer so bang goes that student theory of yours and has for the old people while i've no hard stats / evidence i think it's pretty safe to say that they're contribution to the full figure would be negligible



I think this situation is certainly sustainable for the next 18 months or so. What 
happens after that.....I've know idea. 

All the logic points to a slowdown, but I'm not seeing it happening and I'm obviously not the only one. 


BTW I'm not an estate agent.


----------



## Guest126

The link shows what we all already know - people have been (and some still are) buying terrible property for crazy prices.

The fact that EAs are struggling with a block of nice brand new aparts hints that the tide is turning.


----------



## miju

nacho_libre said:


> BTW I'm not an estate agent.


 
fair enough , though three of your posts strongly suggest otherwise with knowledge of bids on houses etc for starts.

interested to know your reasoning on why you think the market will sustain for 18 months


----------



## delboy159

I came up with a handful of quick examples off the top of my head to prove that a generalised raw figure needs to be brocken down before it can be used as the basis for anything.

Also the Census was done (I think) May 20th ish - which would have a lot of student properties vacated in and and around or after exam times..  Also many dwellings would be empty due to renovations,  properties built on sites down the country, but not occupied because the owner lives and works in Dublin.  Also how many of Limerick were in empty homes at that brilliant weekend (I wasn't in my home, Cardiff, will we ever forget)

I can name loads of empty homes for numerous reasons and they are only in the small little micro perspective of my life...


----------



## Afuera

delboy159 said:


> Also the Census was done (I think) May 20th ish - which would have a lot of student properties vacated in and and around or after exam times.. Also many dwellings would be empty due to renovations, properties built on sites down the country, but not occupied because the owner lives and works in Dublin. Also how many of Limerick were in empty homes at that brilliant weekend (I wasn't in my home, Cardiff, will we ever forget)



Wrong! It was Sunday 23rd of April:


----------



## Guest107

*empties*

and the census staff checked with the neighbours whether they were EMPTY as in unused  or whether NOBODY WAS HOME before declaring them as really empty .


----------



## rgfuller

delboy159 said:


> As for the BOI stats - I don't believe that 27,000 homes were paid for with cash - but - if I wanted to justify a point based on raw general statistics I could say - that 20,000+ houses were bought for cash in 2005 which proves there is a lot of cash in the Irish property market which means there is a lot of room for levearge and further expension of the market in the coming years..


 
Also people returning to Ireland, having sold up abroad, could have bought these properties outright with proceeds from foreign sales.

A few of the property shows earlier this year showed people returning to Ireland from the UK with cash in hand.

How many people immigrated to Ireland last year ~ 46,000 ?
http://www.migrationinformation.org/Feature/display.cfm?id=402


----------



## bearishbull

The fact that many sellers are agreeing to changing the asking price for their house on myhome is an indicator that sentiment is somewhat changed. Why would they reduce the asking prices when they know some potential buyers would have seen the higher earlier asking price?

Maybe the estate agent is telling them that it will attract in potential buyers but why do they need to attract potential buyers with lower asking prices if market is currently strong? 

If the market is strong and still rising substantially why not wait a few weeks/ a month or two untill the price has increased(if prices are still increasing) and asking price is no longer excessive?


----------



## CelloPoint

nacho_libre said:


> Just pure demand. I'm witnessing bidding wars everday for properties that are very
> obviously overvalued and unattractive, but such is the demand that the back of the
> queue of these overbidders is still not visible. Of course I can only speak for my own
> particular area but even in this particular area the talk of an eminent crash is
> constant yet the properties are still selling like hot-cakes.



OK, so you come on to askaboutmoney saying there's "no 'real' evidence that this [a property slowdown] has commenced yet or is anywhere near commencing", yet you have no actual solid reasoning yourself to predict that "the housing market will continue to grow rapidy for at least another 18 months".

It is plainly obvious that the market is unsustainable when you consider the large inventory, rising interest rates/energy costs, changing demographics and the possibility of immigrants leaving once the mad rush to build all these complexes under construction ends.


----------



## Afuera

rgfuller said:


> Also people returning to Ireland, having sold up abroad, could have bought these properties outright with proceeds from foreign sales.
> 
> A few of the property shows earlier this year showed people returning to Ireland from the UK with cash in hand.
> 
> How many people immigrated to Ireland last year ~ 46,000 ?
> http://www.migrationinformation.org/Feature/display.cfm?id=402



This is a possible explanation for some of those people buying homes outright. But IMHO I'd say as a percentage of all sales, this group would be quite small. The same website you linked to has reports showing that there were large numbers of immigrants from the accession EU states applying for PPS numbers around the same time. This group of immigrants are not going to be easily able to buy Irish property using hard cold cash!


----------



## bearishbull

mortgage rates hitting 4.5% by xmas or 5% by next summer will mean FTB's can borrow a lot less than last december. When FTB's cant borrow to buy demand will fall off while supply remains strong and continues to grow, People who want to trade up cant sell at current prices so have to stay or reduce prices , etc etc.


----------



## nacho_libre

CelloPoint said:


> OK, so you come on to askaboutmoney saying there's "no 'real' evidence that this [a property slowdown] has commenced yet or is anywhere near commencing", yet you have no actual solid reasoning yourself to predict that "the housing market will continue to grow rapidy for at least another 18 months".
> 
> It is plainly obvious that the market is unsustainable when you consider the large inventory, rising interest rates/energy costs, changing demographics and the possibility of immigrants leaving once the mad rush to build all these complexes under construction ends.



As long as people are willing and able to pay for way overpriced property the housing market will continue to grow. It is my opinion that there is a queue of such people that are still in a panic to buy properties. There's as much evidence to suggest that the housing market will continue to grow in the short-term as there is for it to fall. 

I'm in total agreement that it can't be sustained, all the evidence points to that, 
but when will we see this crash/slowdown? 

No evidence on this thread has me convinced that it's occurring now.


----------



## SteelBlue05

This thread is pointless now, nearly 2000 posts and all it has served to do is that some people think property prices will decrease, others disagree.

Going around in circles now.


----------



## room305

delboy159 said:


> I can name loads of empty homes for numerous reasons and they are only in the small little micro perspective of my life...



The figure isn't for _empty_ homes it is for _vacant_ homes. The figure doesn't include houses where people are actually living but were unable to be contacted by the census enumerator.


----------



## nacho_libre

SteelBlue05 said:


> This thread is pointless now, nearly 2000 posts and all it has served to do is that some people think property prices will decrease, others disagree.
> 
> Going around in circles now.



I think this thread has served a purpose. From reading all the posts it seems to me 
that the current public sentiment is that a crash/slowdown is inevitable in the 
opinion of most posters.


----------



## ninsaga

nacho_libre said:


> No evidence on this thread has me convinced that it's occurring now.



Agreed. There are always going to be isolated incidents..... and have been during the last few years of properties that just do not sell & prices drop. To counter these arguments I know of 2 fine houses that did not sell... just not located very well yet the sellers still continued to increase the asking price from time to time in line with the madness.... eventually they did sell for the high price!

As per prev post above, I'm also in Cork & still see very strong demand here. So providing details of the odd problem is not an indicator of a slow down as far as I can see.

ninsaga


----------



## SteelBlue05

nacho_libre said:


> I think this thread has served a purpose. From reading all the posts it seems to me
> that the current public sentiment is that a crash/slowdown is inevitable in the
> opinion of most posters.


 
Yes, but its pointless now, do we need another 1000 responses of the same points.

We know the generally sentiment at this stage.


----------



## Eurofan

SteelBlue05 said:


> This thread is pointless now, nearly 2000 posts and all it has served to do is that some people think property prices will decrease, others disagree.
> 
> Going around in circles now.



IF you feel it's pointless then don't contribute or read, personally i find the debate quite interesting and i'm considerably more bearish than bullish 90+ pages later.

Sentiment is a very difficult thing to judge and much of it will be anecdotal, from my point of view while many of my own peers (while still refusing to countenance the possibility of a crash) have accepted double digit growth cannot continue and are happily talking up the soft landind scenario.

Two of the group (both amatuer investors/speculators, one of whom is very stretched) would have been loudly vocal bulls last year proclaiming to all how they're going to be loaded in a few years.

The last few times we've discussed property as a group they're very very quiet now. Sometimes silence speaks volumes.


----------



## nacho_libre

Eurofan said:


> IF you feel it's pointless then don't contribute or read, personally i find the debate quite interesting and i'm considerably more bearish than bullish 90+ pages later.
> 
> Sentiment is a very difficult thing to judge and much of it will be anecdotal, from my point of view while many of my own peers (while still refusing to countenance the possibility of a crash) have accepted double digit growth cannot continue and are happily talking up the soft landind scenario.
> 
> Two of the group (both amatuer investors/speculators, one of whom is very stretched) would have been loudly vocal bulls last year proclaiming to all how they're going to be loaded in a few years.
> 
> The last few times we've discussed property as a group they're very very quiet now. Sometimes silence speaks volumes.



It is interesting that you've become more bearish by reading these posts. It has a 
similar effect on me, however my experiences outside of this forum are very much 
pulling me in the other direction (bullish).

A few of my close friends have bought houses as recently as February and at the 
time the sentiment was similar to now. That the market was not sustainable, the 
interest rates were rising, the supply was meeting demand etc, etc. 

Since then the houses that they bought have increased in value from 260k in 
February (Phase 1 new build) to 300k in July (Phase 2 new build). Still these new 
houses are selling well. 

At the moment I realise it's not a good time to buy property, but when will be a 
better time than now? 

Can anyone say for sure that this time next year, houses will be cheaper or even 
the same price?


----------



## Raskolnikov

SteelBlue05 said:


> This thread is pointless now, nearly 2000 posts and all it has served to do is that some people think property prices will decrease, others disagree.


It is getting rather silly. What gets my goat is people seem to think they can predict a downturn in an irrational market. They don't seem to realise that irrationality by it's very nature; is inherently unpredictable. Not only that but any statistic or news report gets bent to fit these hypotheses'. Last year; the record sale of the old Jury's hotel site was proclaimed as the begining of the end for the Irish property market. Earlier this year, AIB sell up in Ballsbridge, property crash imminent we were told! Now the Kenny Group are selling, quick! everyone out of the pool, crash right around the corner! Of course, when a correction does occur, we'll have the smug posters here telling us, "We told you so".


----------



## corkfella

Alrite lads, I'm going to brave d gauntlet here and tell you my opinion. I'm 28 and left my 50k well paid computer job here in cork 6 monthes with the aid of a nice severance package. I had gone to night school and got an auctioneers qualification so I got a job straight away in a auctioneers for a 20k salary plus commission. I made d move because I did not like my old job and was always v interested in property. in d last 6 monthes I've been learning d trade and I have begun to notice a change alrite recently. Developers and savvy people are slower in buying these days and some of them are begining to get rid of some of their stock. there is still strong demand from ftb's but they are being pushed to the lower scale of the price range, often to stuff that needs serious diy or far from d city but they are so desperate to get on d 1st rung they are going for them. previously I feel builders and developers were going for these but d margins are not there anymore so they are not bothering so much anymore because they feel sumthing is in d offing. I was(I think) lucky enough 2 buy in d city centre this time last year for 240k in d city in need of renovation and it is currently estimated at 350k. I am considering selling and taking my profit but d one thing stopping me is its location, 10 min walk from patrick st and I like living there and have 2 rooms rented out so repayments are grand.

I think we can all agree that sentiment is changing but its currently only d savvy and "cute" as we say here in cork realize it. I deal with people buying houses evrey day and d majority don't have an idea of what is really happening in terms of interest rate hikes and more to come. The desperate ftb are still clamouring to buy but recently I'd advised 2 of my own friends not to buy in d last month.

Personally I hope d crash does not happen as it wud hurt us all economically and d country wud struggle to get over it. I like living in Ireland close to my family and it wud pain me to leave for work abroad in whatever field. however I do think the country is gone to pot, I'm single without kids but have older sisters and brothers with kids and they have so bought into d american culture and to b honest d kids are spoilt rotten. pardon my lack of eluoquence here but d country is full of muppetts who are not going to enjoy d hard landing that looks to b on its way....

above is my opinion and not fact, please bear that in mind when u reply.


----------



## Guest107

By the time you KNOW the sentiment has turned its too late for you if you bought recently . 

Note to amateurs. Banks and Estate Agents sold their properties or theirs companies out recently .

MyHome.ie was sold too. 

Now a large builders, Kennys, is on the blocks and for sale.

Once the 'smart' money 'exits' with cash in the pocket the money thats left in the market gets dumber and dumber by definition does it not ???

This thread exists to protect that dumber money from the consequences of its own folly if its caught on the hop by a sliding market. 

For those of you of a certain age this is not the first mania you have seen, I can mark down the .com BS and the UK property market in the late 1980s myself. Each of these I knew to be a MANIA at the time with all sorts of gobsheens telling me I COULD NOT lose buying ....whatever.  The same gobsheens were busy peddling some other crap within months.


----------



## whathome

corkfella said:


> Alrite lads, I'm going to brave d gauntlet here and tell you my opinion. I'm 28 and left my 50k well paid computer job here in cork 6 monthes with the aid of a nice severance package. I had gone to night school and got an auctioneers qualification so I got a job straight away in a auctioneers for a 20k salary plus commission. I made d move because I did not like my old job and was always v interested in property. in d last 6 monthes I've been learning d trade and I have begun to notice a change alrite recently. Developers and savvy people are slower in buying these days and some of them are begining to get rid of some of their stock. there is still strong demand from ftb's but they are being pushed to the lower scale of the price range, often to stuff that needs serious diy or far from d city but they are so desperate to get on d 1st rung they are going for them. previously I feel builders and developers were going for these but d margins are not there anymore so they are not bothering so much anymore because they feel sumthing is in d offing. I was(I think) lucky enough 2 buy in d city centre this time last year for 240k in d city in need of renovation and it is currently estimated at 350k. I am considering selling and taking my profit but d one thing stopping me is its location, 10 min walk from patrick st and I like living there and have 2 rooms rented out so repayments are grand.
> 
> I think we can all agree that sentiment is changing but its currently only d savvy and "cute" as we say here in cork realize it. I deal with people buying houses evrey day and d majority don't have an idea of what is really happening in terms of interest rate hikes and more to come. The desperate ftb are still clamouring to buy but recently I'd advised 2 of my own friends not to buy in d last month.
> 
> Personally I hope d crash does not happen as it wud hurt us all economically and d country wud struggle to get over it. I like living in Ireland close to my family and it wud pain me to leave for work abroad in whatever field. however I do think the country is gone to pot, I'm single without kids but have older sisters and brothers with kids and they have so bought into d american culture and to b honest d kids are spoilt rotten. pardon my lack of eluoquence here but d country is full of muppetts who are not going to enjoy d hard landing that looks to b on its way....
> 
> above is my opinion and not fact, please bear that in mind when u reply.


 
Great post corkfella, one of the best in this thread IMO.


----------



## walk2dewater

SteelBlue05 said:


> This thread is pointless now, nearly 2000 posts and all it has served to do is that some people think property prices will decrease, others disagree.
> 
> Going around in circles now.


 
Agree.  Im getting cliche poisoning.  Methinks about time to put it out of it's misery.


----------



## SteelBlue05

Is there anyway we can do a poll of peoples feelings about the market in this forum?

Would be interesting to see the results. Also would be interesting to include variables like...
- does the person voting already own a home or is renting
- does the person voting own an investment property
- location of voter
- how much has the person borrowed to buy a property

etc etc

I would assume people with big mortgages would say the market will never dip and the people renting will say its just around the corner.

Thats the only way we can make sense of this mammoth thread.


----------



## CelloPoint

nacho_libre said:


> As long as people are willing and able to pay for way overpriced property the housing market will continue to grow. It is my opinion that there is a queue of such people that are still in a panic to buy properties. There's as much evidence to suggest that the housing market will continue to grow in the short-term as there is for it to fall.
> 
> I'm in total agreement that it can't be sustained, all the evidence points to that,
> but when will we see this crash/slowdown?
> 
> No evidence on this thread has me convinced that it's occurring now.



That's fine, take what's written here with a pinch of salt, but you see you haven't given any reasons for why you think the market will continue for the next 18 months apart from anecdotal "queues of people" that you've allegedly witnessed. Please tell us when and where.

'whathome' posted this on property bubbles a few days ago:


			
				whathome said:
			
		

> John P. Calverley is chief economist and strategist at American Express. He has produced a checklist for typical characteristics of a bubble:
> 
> - Rapidly rising prices
> - High expectations for continuing rapid rises
> - Overvaluation compared to historical averages
> - Overvaluation compared to reasonable levels
> - Several years into an economic upswing
> - Some underlying reason or reasons for higher prices
> - A new element, e.g. technology for stocks or immigration for housing
> - Subjective "paradigm shift" (It's different this time)
> - New investors drawn in
> - New entrepreneurs in the area
> - Considerable popular and media interest
> - Major rise in lending
> - Increase in indebtedness
> - New lenders or lending policies
> - Consumer price inflation often subdued (so central banks relaxed)
> - Relaxed monetary policy
> - Falling household savings rate
> - A strong exchange rate



and what about the many reasons for changing sentiment that have been given already: 
- rising interest rates (fact)
- rising energy costs (fact)
- change of government to one less favourable to developers (probable)
- stagnant rental market (fact)
- poor infrastructure making commuterland less and less attractive(fact)
- land corruption and artificially high land prices (fact)
- rapidly increasing inventory (fact)
- media hype and hard-sell of the 'latest developments' (anecdotal)
- unscrupulous availability of cheap money from the european banks (fact)
- Irish economic threats as a result of US economy (possibility)
- economic reliance on house-builing (fact)
- reliance on cheap imported labour (anecdotal)
- transient immigrant population who will up and leave if spooked (probable)
- Irish obsession with land-owning (fact)
- possibility that large numbers of section 23 investors will dump their investment properties onto the market if spooked (possibility)
etc., etc.

Do you have anything to add that proportionaly counteracts the above threats, facts and risks to the Irish property market?

*I just cannot see how anyone can predict that "the housing market will continue to grow rapidy for at least another 18 months", I'm sorry, I really can't.*

Also, are you a house/apartment/duplex owner? If yes, when and where did you buy?


----------



## edo

Totally agree with Nacho Libre on this one

I believe there is 18 months at least left in this bull run. A couple of swallows dont make a summer. Among the rational persons in our population yes the sentiment is changing - but they aren't the ones who are driving this bubble.
The vested interests concerned will ensure that they can wring every last cent out of this and to hell with the future.

 Regardless of what the ERSI, IMF or anyother financial commentator says I will guarantee you that Bertie our beloved leader, will be going around like an arsonsist on LSD to ensure the flames of this "boom" are burning brightly for the election - its on the only chance hes got - the next budget will be a giveaway regardless of all the downplaying, the next round of benchmarking will be a disgrace to all the rest of us who actually have to earn a living. the banks will be out to earn their christmas bonuses and will come up with even more elaborate ways to loan you money to keep their shareholders happy - and the great financially unwashed will still be saying you can't lose on property and get in there while you can and i really think interest rates will have to increase by another 2% at least to have any meaningful effect - When it comes to the property scenario in this country at the mo - we are not dealing in logic or rational. 

the crunch will come as the US economy starts sliding - next year  - its not looking good ( look at other thread for this) 

Armageddon in late 2008/2009


----------



## fatmanknows

corkfella said:


> Alrite lads, I'm going to brave d gauntlet here and tell you my opinion. I'm 28 and left my 50k well paid computer job here in cork 6 monthes with the aid of a nice severance package. I had gone to night school and got an auctioneers qualification so I got a job straight away in a auctioneers for a 20k salary plus commission. I made d move because I did not like my old job and was always v interested in property. in d last 6 monthes I've been learning d trade and I have begun to notice a change alrite recently. Developers and savvy people are slower in buying these days and some of them are begining to get rid of some of their stock. there is still strong demand from ftb's but they are being pushed to the lower scale of the price range, often to stuff that needs serious diy or far from d city but they are so desperate to get on d 1st rung they are going for them. previously I feel builders and developers were going for these but d margins are not there anymore so they are not bothering so much anymore because they feel sumthing is in d offing. I was(I think) lucky enough 2 buy in d city centre this time last year for 240k in d city in need of renovation and it is currently estimated at 350k. I am considering selling and taking my profit but d one thing stopping me is its location, 10 min walk from patrick st and I like living there and have 2 rooms rented out so repayments are grand.
> 
> I think we can all agree that sentiment is changing but its currently only d savvy and "cute" as we say here in cork realize it. I deal with people buying houses evrey day and d majority don't have an idea of what is really happening in terms of interest rate hikes and more to come. The desperate ftb are still clamouring to buy but recently I'd advised 2 of my own friends not to buy in d last month.
> 
> Personally I hope d crash does not happen as it wud hurt us all economically and d country wud struggle to get over it. I like living in Ireland close to my family and it wud pain me to leave for work abroad in whatever field. however I do think the country is gone to pot, I'm single without kids but have older sisters and brothers with kids and they have so bought into d american culture and to b honest d kids are spoilt rotten. pardon my lack of eluoquence here but d country is full of muppetts who are not going to enjoy d hard landing that looks to b on its way....
> 
> above is my opinion and not fact, please bear that in mind when u reply.


 
good honest post Corkfella. There are a few posters on here who appear far too sensitive at the mention of the market is heading south. They dont want any mention of the elephant in the corner.


----------



## beattie

corkfella said:


> Alrite lads, I'm going to brave d gauntlet here and tell you my opinion. I'm 28 and left my 50k well paid computer job here in cork 6 monthes with the aid of a nice severance package. I had gone to night school and got an auctioneers qualification so I got a job straight away in a auctioneers for a 20k salary plus commission. I made d move because I did not like my old job and was always v interested in property. in d last 6 monthes I've been learning d trade and I have begun to notice a change alrite recently. Developers and savvy people are slower in buying these days and some of them are begining to get rid of some of their stock. there is still strong demand from ftb's but they are being pushed to the lower scale of the price range, often to stuff that needs serious diy or far from d city but they are so desperate to get on d 1st rung they are going for them. previously I feel builders and developers were going for these but d margins are not there anymore so they are not bothering so much anymore because they feel sumthing is in d offing. I was(I think) lucky enough 2 buy in d city centre this time last year for 240k in d city in need of renovation and it is currently estimated at 350k. I am considering selling and taking my profit but d one thing stopping me is its location, 10 min walk from patrick st and I like living there and have 2 rooms rented out so repayments are grand.
> 
> I think we can all agree that sentiment is changing but its currently only d savvy and "cute" as we say here in cork realize it. I deal with people buying houses evrey day and d majority don't have an idea of what is really happening in terms of interest rate hikes and more to come. The desperate ftb are still clamouring to buy but recently I'd advised 2 of my own friends not to buy in d last month.
> 
> Personally I hope d crash does not happen as it wud hurt us all economically and d country wud struggle to get over it. I like living in Ireland close to my family and it wud pain me to leave for work abroad in whatever field. however I do think the country is gone to pot, I'm single without kids but have older sisters and brothers with kids and they have so bought into d american culture and to b honest d kids are spoilt rotten. pardon my lack of eluoquence here but d country is full of muppetts who are not going to enjoy d hard landing that looks to b on its way....
> 
> above is my opinion and not fact, please bear that in mind when u reply.


 
It's very interesting to see that you have advised two of your friends to hold off purchasing at the moment even though you are part of the industry now. I hope you don't expect an invitation to the EA's ball now that you have veered off course....

It would be good to hear from someone who works in a mortgage section of one of the banks to see are there any new trends occurring such as a reduction in investor purchases, increase/decrease in arrears/defaults


----------



## phoenix_n

Just caught up reading the last two pages. The debate is beginning to rage but whilst i understand some people becoming defensive they have to realise that this thread is changing from current sentiment to what is beginning to happen in the market. And yes there are still people buying houses like there are those still buying secondhand alfa 156s. 

And again i am going to say it. I believe that many apartments currently retailing for 380-400K will result in at least 150K been knocked off by the end of this year. 

(The post by the Cork EA was interesting but this is the internet, no respect to him, so we cannot verify his opinion.)


----------



## miju

SteelBlue05 said:


> Is there anyway we can do a poll of peoples feelings about the market in this forum?
> 
> Would be interesting to see the results. Also would be interesting to include variables like...
> - does the person voting already own a home or is renting
> - does the person voting own an investment property
> - location of voter
> - how much has the person borrowed to buy a property
> 
> etc etc
> 
> I would assume people with big mortgages would say the market will never dip and the people renting will say its just around the corner.
> 
> Thats the only way we can make sense of this mammoth thread.


 
i started a poll on boards.ie last month (think the link was in the post that i made when i started this thread)

the results of 143 votes are interesting to say the least and definitely indicative of a change in sentiment as the results are so far as follows:

Own a property & am bullish about market: 31 votes / 21.68%
own a property & am bearish: 49 votes / 34.27%
Don't own a property & am bullish: 13 votes / 9.09%
I do not own a property & am bearish: 50votes 34.97%

so all in all 70% bearish about property with the other 30% bullish , makes for a very interesting quick read doesn't it


----------



## Guest107

I will not see that fall of yours  by the *end of the year* Phoenix. I will however predict that certain apartments in residentially marginal areas will fall by 50% over the next 2 - 3 years probably 3 and that they will stay down there a long time.


----------



## nacho_libre

CelloPoint said:


> That's fine, take what's written here with a pinch of salt, but you see you haven't given any reasons for why you think the market will continue for the next 18 months apart from anecdotal "queues of people" that you've allegedly witnessed. Please tell us when and where.
> 
> 'whathome' posted this on property bubbles a few days ago:
> 
> 
> and what about the many reasons for changing sentiment that have been given already:
> - rising interest rates (fact)
> - rising energy costs (fact)
> - change of government to one less favourable to developers (probable)
> - stagnant rental market (fact)
> - poor infrastructure making commuterland less and less attractive(fact)
> - land corruption and artificially high land prices (fact)
> - rapidly increasing inventory (fact)
> - media hype and hard-sell of the 'latest developments' (anecdotal)
> - unscrupulous availability of cheap money from the european banks (fact)
> - Irish economic threats as a result of US economy (possibility)
> - economic reliance on house-builing (fact)
> - reliance on cheap imported labour (anecdotal)
> - transient immigrant population who will up and leave if spooked (probable)
> - Irish obsession with land-owning (fact)
> - possibility that large numbers of section 23 investors will dump their investment properties onto the market if spooked (possibility)
> etc., etc.
> 
> Do you have anything to add that proportionaly counteracts the above threats, facts and risks to the Irish property market?
> 
> *I just cannot see how anyone can predict that "the housing market will continue to grow rapidy for at least another 18 months", I'm sorry, I really can't.*
> 
> Also, are you a house/apartment/duplex owner? If yes, when and where did you buy?



I don't own any property. All the points made above were relevant to this same 
debate at Christmas 2005. Growth since then has been ridiculous. The only ones 
that changed significantly were energy increases and interest rates. 

Energy prices have always been increasing and the interest rates are rising slowly 
and predictably. Hence the growth will continue IMO, just the same as it has since 
Christmas. 

18 months at least is a loose estimate. This is based on the way the interest rates 
are going and the property supply increasing. This is based on my own observations of events happening around me. I'm not a big fan of stats because 
they can be very easily skewed and you can take from them what you want. 

Just my honest opinion. I'm no expert in this area. (as i'm sure you'll agree)


----------



## phoenix_n

2Pack said:


> I will not see that fall of yours by the *end of the year* Phoenix. I will however predict that certain apartments in residentially marginal areas will fall by 50% over the next 2 - 3 years probably 3 and that they will stay down there a long time.


 
But do not underestimate those that have to sell.  ( And developers can offload units at dramatically reduced prices and still make a profit. )


----------



## Guest107

still cant see it unravel that fast mate. The UK slump in the early 90s really started about mid to late 1990 and bottomed about 1993 with dead cat bounce episodes in 1994 and 1995 until it  started a sustained recovery about 1996  . I can see ours hissing air steadily for 3 years once the turn starts. 

I will concede a noticeable drop in asking prices  this year in the order of 10-15% off peak depending and thats on older housing . In new housing The builders will increase their allowances from say 10k to about 30k to 'hide' this in many cases but as the allowances go up they will obviously be masking a technical drop . Thats what happened in 2001 or so too.

Watch out for that FIRST.


----------



## phoenix_n

2Pack said:


> still cant see it unravel that fast mate. The UK slump in the early 90s really started about mid to late 1990 and bottomed about 1993 with dead cat episodes in 1994 and 1995 .


 
Which bubble do you think is(was) bigger ?


----------



## Guest107

phoenix_n said:


> Which bubble do you think is(was) bigger ?



hard to compare without a big spreadsheet.

their mortgage rates hit 15% by 1991 which is what caused it (ours will not exceed 6% in this tightening cycle) 

incomes were lower . takehome as % of average wage was similar to here now.

*BUT* the number of empties or vacants in the UK peaked around 6% ( [broken link removed]) at the bottom of the slump while our empty/vacant rate is much higher now .  I have been very pessimistic since those CSO figures were released.


phew that would be a complex spreadsheet.


----------



## phoenix_n

2Pack said:


> while our empty/vacant rate is much higher now . I have been very pessimistic since those CSO figures were released.


 
Do we really have a high vacant rate? Is this borne out by investors really having problems renting or just stock which is just not rented owing to tax reasons or whatever.


----------



## whathome

German Inflation Accelerates; ECB to Increase Rates

http://www.bloomberg.com/apps/news?pid=20601100&sid=aSJ.jfVEanZA&refer=germany


----------



## phoenix_n

whathome said:


> German Inflation Accelerates; ECB to Increase Rates
> 
> http://www.bloomberg.com/apps/news?pid=20601100&sid=aSJ.jfVEanZA&refer=germany


 
"The economy is on track for its best performance since 2000. " 

I'm betting on a german recovery.


----------



## Guest126

Bit late to bet on a recovery - the recovery has been underway there for about 12 months.


----------



## Guest107

phoenix_n said:


> Do we really have a high vacant rate? Is this borne out by investors really having problems renting or just stock which is just not rented owing to tax reasons or whatever.



In this Indo article

http://www.unison.ie/irish_independent/stories.php3?ca=9&si=1636317&issue_id=14226

300,000 homes were not counted in the census ( of population) for not having any population in them . 275000 long term empties and 30000 recent ones .

there are some 1500000 lived in homes in the state , thats near enough 16% empty or vacant (whatever 1500000 + 300000 = Total Homes ) .

London never went below 6% empty and had a nasty slump anyway . Why are we special ????


----------



## Eurofan

phoenix_n said:


> Which bubble do you think is(was) bigger ?



Ours unquestionably.

The problem as i see it though is that once the corner is turned it brings so much of the economy along it will be very difficult to know when it will stop.

Insofar as the current (post 2001) boom has been self-fueling due to the nations increasing reliance on the construction industry we have nothing to replace those jobs that will go as contruction slows (never mind crashes).

The timing couldn't be worse with rates on the way up, slowing fdi, negligable indiginous industry and growing pressure on American fdi to repatriate profits at home and pay taxes there.

I've long since given up offering my own reasoning within my own peers since it's seen as 'wishing for it' or 'begrudging those who've bought recently' (for what it's worth i put my money where my mouth is late last year and took a 200k profit by selling my home, not as simple as it seems though since we have the option to rent at a discount through family and will probably emigrate or move anyway in the next two years).

Due to the increasing bearish tone of the general media my opinion is now being sought out more often as to why this is all happening (loads more warnings, rates going up etc.)

Anecdotal though it may be i found one response particularly interesting from the group. Of 12 home-owners (mostly couples, late twenties/early thirties, none with kids, all employed, all purchased within last 24 months) i asked what would be their response if a downturn occured and they found themselves with negative equity.

After some debate *half* reckoned they would chuck the keys back to the bank and get on the first plane to oz/nz/uk/europe. The other half would struggle through _as long as_ there wasn't a job loss and/or significant rate increases that mean they would have to significantly sacrifice lifestyle.

Sentiment? If we can't win then we sure as hell won't lose...


----------



## phoenix_n

CapitalCCC said:


> Bit late to bet on a recovery - the recovery has been underway there for about 12 months.


 
I did bet a couple of months ago. Realised my gains in Irish property and put it into a german commercial Property fund.


----------



## Guest126

Oh ya, but I think the recovery was about five months old when you first mentioned that fund on this website.


----------



## nacho_libre

Eurofan said:


> Sentiment? If we can't win then we sure as hell won't lose...



Good point!


----------



## Bedsit

phoenix_n said:


> Do we really have a high vacant rate? Is this borne out by investors really having problems renting or just stock which is just not rented owing to tax reasons or whatever.



My aunt has 10 properties in Ireland (which she bought in the mid and late 90s). She has three of them lying vacant at the present time and is not too concerned. She also does not believe any of the negative press even though she regularly gets the Sunday Independent and the Sunday Business Post. Just pointing out the sentiment out there from first hand experience.


----------



## liteweight

A very close friend of mine put all his investment properties on the market late last year. He owned 16 properties in all, accumulated over 10 years. He made a very tidy profit!!  As all the properties were in the same area, an outsider might well have thought that there was something 'nasty' going on in the area, or, seeing as they were all rentals, that investors were selling up and heading for the hills!!

The truth of the matter is that he sold because of the PRTB! Before anyone rushes to judgement, he was not a bad landlord and his properties were in excellent condition. They were 2,3, and 4 bed houses. His problem was that each were multiple tenancies so his PRTB bills were quite hefty and he envisioned they'd only go up. He looked after his own properties and so his paperwork rose dramatically. The reason he put all of them on the market at the same time was very simple. He cut a really sweet deal with the estate agent based on the number of properties. Personal reasons also helped him make his decision, he has children and he wanted to spread the wealth and see them getting some enjoyment out of it while he was alive.

The properties lay empty for six months while he had them refurbished, although this was really just a paint job. He had always used the same painter and decorator, a small firm, and gave the job to him even though he could have hired a big outfit to do them all in a couple of weeks. In the time it took to get them all ready, he sorted out 'where to go from here' with his advisors. He says it was time and money well spent. 

So you see, sometimes investors sell for reasons other than an impending crash. Sometimes houses look empty but there are things going on in the background that the casual observer is completely unaware of.


----------



## Remix

whathome said:


> German Inflation Accelerates; ECB to Increase Rates
> 
> http://www.bloomberg.com/apps/news?pid=20601100&sid=aSJ.jfVEanZA&refer=germany


 
Someone (or everyone  ) should forward this to info@rte.ie as the headline they've been displaying all day begins:

German Inflation Slows....


----------



## Duplex

Remix said:


> Someone (or everyone  ) should forward this to info@rte.ie as the headline they've been displaying all day begins:
> 
> German Inflation Slows....


 

German inflation slows and yields rise on German Bonds? 

_*Surely some mistake ?*_

http://www.bloomberg.com/markets/rates/germany.html


----------



## Firefly

The problem I have with 18 months is that it's been bandied about all over the place and if enough people believe this to be true then surely the masses will start to work backwards...ie "I'll sell mine in 17 months", but then someone else will say "I'm not waiting until yer man starts selling at 17 months..I'm gonna sell in 16 months" and so on. Covered this in Economics ages ago, but too many brain cells killed in the meantime to remember the theory, but you get my drift...this will bring forward any correction if enough people hold the 18mth tiemframe as being fact
Firefly.


----------



## phoenix_n

Firefly said:


> The problem I have with 18 months is that it's been bandied about all over the place and if enough people believe this to be true then surely the masses will start to work backwards...ie "I'll sell mine in 17 months", but then someone else will say "I'm not waiting until yer man starts selling at 17 months..I'm gonna sell in 16 months" and so on. Covered this in Economics ages ago, but too many brain cells killed in the meantime to remember the theory, but you get my drift...this will bring forward any correction if enough people hold the 18mth tiemframe as being fact
> Firefly.


 
Yep. Gotta know when to buy but more importantly when to sell.


----------



## Contrarian

And most certainly do not stand in front of the train or try to catching the falling knife when it happens. This could play out over a long time.


----------



## SteelBlue05

Contrarian said:


> And most certainly do not stand in front of the train or try to catching the falling knife when it happens. This could play out over a long time.


 
Please lock this thread, the cliches are killing me!


----------



## CelloPoint

SteelBlue05 said:


> Please lock this thread, the cliches are killing me!



No, I'm really enjoying this thread and it's the best thread AAM has ever had.

Not at least until we get to 100k views!


----------



## whathome

SteelBlue05 said:


> the cliches are killing me!


 
Here's a few cliches that sound really tired!
[broken link removed]

- It’s not a house it’s a home.
- Buy now or you’ll be priced out forever.
- Renting is just throwing your money away.
- You have to live somewhere.
- They’re not making any more of it.
- Real estate never goes down.
- You’re just kidding yourself if you’re waiting for prices to fall.
- Never a better time to buy!
- I think you have a deep-seated fear of commitment.
- Never try to time the market (when it’s falling).
- It’s different this time.
- _(insert location)_ is so desirable, people will want to live here no matter how expensive it gets.
- Boomers/immigrants/rich people will keep prices permanently high.
- Prices have achieved a permanently high plateau/new paradigm/soft landing.
- _(insert location)_ is land-locked.
- If you’re waiting for the perfect time to buy, you’ll be waiting forever.
- You can’t lose in real estate –it’s a no-brainer.
- Real estate’s seasonal; after _(insert holiday)_ things will return to normal.

Interesting that you hear the exact same *rubbish* on both sides of the Atlantic!


----------



## Guest107

*The Americans Have a New Word, "Bubble Sitting"*

From CNN

* Bubble sitting *



> Convinced home prices will fall? So are a lot of other Americans.Some - known as bubble sitters - are acting on their conviction. *They're cashing out by selling their homes and renting, figuring they'll return to the market after prices have fallen*.


Some consider it leads to pent up demand  but there are not quite as many empties in the US as here I'll wager (without knowing for sure may I add ) 

http://money.cnn.com/2006/08/11/real_estate/bubble_sitting/index.htm

Nor have these 'vultures' made a killing over there. Yet !

http://money.cnn.com/2006/08/07/real_estate/vulture_buyers_invade_market/index.htm

CNN are adamant that price falls are localised and recommend, as do I , that you research and know where you WANT to live very well before making any price drop assumptions for that area.


----------



## Gab24

Hi All,


I was reading this thread in last few weeks and I just wanted to share my own impression about the topic.

I'm not irish, but I worked in this country for more than 5 years in one of these high-tech companies in Limerick. I have been renting a place all the time and I was thinking to buy at some point, but I gave up the idea.
I am sure a correction was due at the end of 2003, but the coming of eastern europeans, the new mortgages and some incentives from the government saved the situation. This is to reply to all the people that use the argument of "it has been said before about a crash and never happened". I was taking care of my full house (the landlord didn't want to rent just one room and I had to put the adverts in the papers ....) and during the year of 2003 I had to pay many times for the empty rooms in my house. 
At that time, many landlords were struggling to find tenants in Limerick and I'm sure they would have been forced to seel their houses.
However, the incoming of eastern europeans saved them during the year of 2004, I could see this with my own eyes, as I was still involved in the renting market.
I guess the interest rates from ECB also helped the landlords a lot.

For a foreginer, the prices of houses versus their quality looks very, very high now. Not sure how many talented young foreigners will want to settle here when they find out a bit more about the system. I must say I didn't pay attention to my salary in the first years, but when I discovered how much money the people in the public sector are making (I know about the county council ones) and this story about the so called "benchmarking" I felt very humiliated. Definitely I don't want to stay in a country that ripps-off the people from the producing sector to give it to the ones sitting and moving papers from one office to another. 

The increase in prices from the first half of the year in Limerick near Dell factory is absolutely ridicolous and denies the right of young people to have a roof. Second hand houses that were 170.000 in september last year are 230.000 or even 250.000 now. I feel sorry for the people that will buy them for living. Anyway, if the rumours of Dell opening a factory in the city of Lodz from Poland will become true, then it will be disaster for the prices in Limerick. The factory from here doesn't have to be closed, it's enough for the more than 50% polish workforce (maybe 1500 people) to return home and the rental situation from 2003 will be back because all these people are renting around here.

Myself, I decided to move already (2-3 months from now) from this place, as my personal standard of living has deteriorated too much. While I was 2-3 years on salary freeze because of the international bad economy, the people in the public sector were getting 10% increases a year. It's too much humiliation to support them from my taxes from a frozen salary.

Most of the foreign people are here for the money,  usually in low-paid services. Until now, these were sustained by huge borrowing by the irish people. But this borrowing has already become MAD !!!!  260 billions for the public sector !!!! From where will you pay this ?????  Dell is the second biggest exporter of Ireland and has lost 50% in the share price for the last year. Intel is number one and has problems, too. A decent salary here starts to look like a good salary in USA, so I don't see any reason for an american company to come here. Also, the main reason of the Irish boom (CORPORATE TAX) will be surely cancelled in 2-3 years. Europe has had enough watching how german, french, italian money paid for goods packed here are dissapearing from their economy. Opposition from irish representatives in the EU-Finance Commission is very very strong. They will not accept any increase in Corporate tax. But guess what ?? The rest of Europe is working on a law to retain the profits in the country where the product is sold.
In other words: even if Microsoft Office is packed in Ireland and sold in Germany, the profit might remain mainly in Germany from now on. This was a very clever way for the americans to sell their products in EU without paying import tarriffs. Check about this company called Round Island One from Dublin: they sell all the Microsoft software for Europe and Asia. The american IRS is watching since last year, because the american are losing tax money too, from this.

In conclusion, a crash in housing is sure because there will be physical limits: no more easy money from the banks, less foreign companies and less money from the corporate taxation even if the foreign companies will remain. 

The irish government will do everything to hide this, there is no doubt about it. The sad story is that young irish people that bought houses now will remain to clean the mess after the party of those that have 40-50 years now.

All the best and make anyone aware about this, before it's too late !


----------



## bearishbull

As previously stated Dan McLaughlin of Bank of Ireland is forecasting house price growth slowing to 3% in 2007(as a result of reduced affordability and banks not lending ever increasing amounts to chase prices). If he as the public face of one of countrys biggest banks/lenders is forecasting sub inflationary growth (which is a fall in real terms) then things must be close to a turning point.

Im sure personally he doesnt beleive that if growth slows to inflation or below inflation that the 40% who are buying now as investments are gonna be plunging in and supply for other buyers will shoot up as ulster banks chief economst has said, but publically he will say all is well and a soft landing will occur.

If the banks are predicting a virtual stalling of the market within a year i think its time to be worried and not a time to buy (why buy now if growth is going to slow to below your increase in wages?) .

People will say that what do these guys know and we've heard it all before but the reality is these guys know the market inside out(they are insiders) and see trends and issues affecting price rises before the rest of us, so if they say things are gonna stall then i'd bet thats a best case scenario!

You have been warned!


----------



## redo

Gab24 said:


> Hi All,
> 
> 
> I was reading this thread in last few weeks and I just wanted to share my own impression about the topic.
> 
> I'm not irish, but I worked in this country for more than 5 years in one of these high-tech companies in Limerick. I have been renting a place all the time and I was thinking to buy at some point, but I gave up the idea.
> I am sure a correction was due at the end of 2003, but the coming of eastern europeans, the new mortgages and some incentives from the government saved the situation. This is to reply to all the people that use the argument of "it has been said before about a crash and never happened". I was taking care of my full house (the landlord didn't want to rent just one room and I had to put the adverts in the papers ....) and during the year of 2003 I had to pay many times for the empty rooms in my house.
> At that time, many landlords were struggling to find tenants in Limerick and I'm sure they would have been forced to seel their houses.
> However, the incoming of eastern europeans saved them during the year of 2004, I could see this with my own eyes, as I was still involved in the renting market.
> I guess the interest rates from ECB also helped the landlords a lot.
> 
> For a foreginer, the prices of houses versus their quality looks very, very high now. Not sure how many talented young foreigners will want to settle here when they find out a bit more about the system. I must say I didn't pay attention to my salary in the first years, but when I discovered how much money the people in the public sector are making (I know about the county council ones) and this story about the so called "benchmarking" I felt very humiliated. Definitely I don't want to stay in a country that ripps-off the people from the producing sector to give it to the ones sitting and moving papers from one office to another.
> 
> The increase in prices from the first half of the year in Limerick near Dell factory is absolutely ridicolous and denies the right of young people to have a roof. Second hand houses that were 170.000 in september last year are 230.000 or even 250.000 now. I feel sorry for the people that will buy them for living. Anyway, if the rumours of Dell opening a factory in the city of Lodz from Poland will become true, then it will be disaster for the prices in Limerick. The factory from here doesn't have to be closed, it's enough for the more than 50% polish workforce (maybe 1500 people) to return home and the rental situation from 2003 will be back because all these people are renting around here.
> 
> Myself, I decided to move already (2-3 months from now) from this place, as my personal standard of living has deteriorated too much. While I was 2-3 years on salary freeze because of the international bad economy, the people in the public sector were getting 10% increases a year. It's too much humiliation to support them from my taxes from a frozen salary.
> 
> Most of the foreign people are here for the money,  usually in low-paid services. Until now, these were sustained by huge borrowing by the irish people. But this borrowing has already become MAD !!!!  260 billions for the public sector !!!! From where will you pay this ?????  Dell is the second biggest exporter of Ireland and has lost 50% in the share price for the last year. Intel is number one and has problems, too. A decent salary here starts to look like a good salary in USA, so I don't see any reason for an american company to come here. Also, the main reason of the Irish boom (CORPORATE TAX) will be surely cancelled in 2-3 years. Europe has had enough watching how german, french, italian money paid for goods packed here are dissapearing from their economy. Opposition from irish representatives in the EU-Finance Commission is very very strong. They will not accept any increase in Corporate tax. But guess what ?? The rest of Europe is working on a law to retain the profits in the country where the product is sold.
> In other words: even if Microsoft Office is packed in Ireland and sold in Germany, the profit might remain mainly in Germany from now on. This was a very clever way for the americans to sell their products in EU without paying import tarriffs. Check about this company called Round Island One from Dublin: they sell all the Microsoft software for Europe and Asia. The american IRS is watching since last year, because the american are losing tax money too, from this.
> 
> In conclusion, a crash in housing is sure because there will be physical limits: no more easy money from the banks, less foreign companies and less money from the corporate taxation even if the foreign companies will remain.
> 
> The irish government will do everything to hide this, there is no doubt about it. The sad story is that young irish people that bought houses now will remain to clean the mess after the party of those that have 40-50 years now.
> 
> All the best and make anyone aware about this, before it's too late !


Great post.


----------



## REXO

Any profit margin , no matter how small , is a good one for the boys in Dell and Intel. Americans love working with the Irish , we speak english and go about our work with a smile. Sure aren't we great craic altogether. Theres nobody going back to lodz any time soon.


----------



## ninsaga

SteelBlue05 said:


> "And most certainly do not stand in front of the train or try to catching the falling knife when it happens. This could play out over a long time."
> 
> Please lock this thread, the cliches are killing me!




...how's about... all together now.... 'You gotta know when to hold, know when to fold 'em, know when to walk away....know when to hide, you never count your money, when you're sitting at the table.... there'll be time enough for countin'...when the dealin's done'


----------



## CelloPoint

Gab24 said:


> Hi All,
> 
> 
> I was reading this thread in last few weeks and I just wanted to share my own impression about the topic.
> 
> I'm not irish, but I worked in this country for more than 5 years in one of these high-tech companies in Limerick. I have been renting a place all the time and I was thinking to buy at some point, but I gave up the idea.
> I am sure a correction was due at the end of 2003, but the coming of eastern europeans, the new mortgages and some incentives from the government saved the situation. This is to reply to all the people that use the argument of "it has been said before about a crash and never happened". I was taking care of my full house (the landlord didn't want to rent just one room and I had to put the adverts in the papers ....) and during the year of 2003 I had to pay many times for the empty rooms in my house.
> At that time, many landlords were struggling to find tenants in Limerick and I'm sure they would have been forced to seel their houses.
> However, the incoming of eastern europeans saved them during the year of 2004, I could see this with my own eyes, as I was still involved in the renting market.
> I guess the interest rates from ECB also helped the landlords a lot.
> 
> For a foreginer, the prices of houses versus their quality looks very, very high now. Not sure how many talented young foreigners will want to settle here when they find out a bit more about the system. I must say I didn't pay attention to my salary in the first years, but when I discovered how much money the people in the public sector are making (I know about the county council ones) and this story about the so called "benchmarking" I felt very humiliated. Definitely I don't want to stay in a country that ripps-off the people from the producing sector to give it to the ones sitting and moving papers from one office to another.
> 
> The increase in prices from the first half of the year in Limerick near Dell factory is absolutely ridicolous and denies the right of young people to have a roof. Second hand houses that were 170.000 in september last year are 230.000 or even 250.000 now. I feel sorry for the people that will buy them for living. Anyway, if the rumours of Dell opening a factory in the city of Lodz from Poland will become true, then it will be disaster for the prices in Limerick. The factory from here doesn't have to be closed, it's enough for the more than 50% polish workforce (maybe 1500 people) to return home and the rental situation from 2003 will be back because all these people are renting around here.
> 
> Myself, I decided to move already (2-3 months from now) from this place, as my personal standard of living has deteriorated too much. While I was 2-3 years on salary freeze because of the international bad economy, the people in the public sector were getting 10% increases a year. It's too much humiliation to support them from my taxes from a frozen salary.
> 
> Most of the foreign people are here for the money,  usually in low-paid services. Until now, these were sustained by huge borrowing by the irish people. But this borrowing has already become MAD !!!!  260 billions for the public sector !!!! From where will you pay this ?????  Dell is the second biggest exporter of Ireland and has lost 50% in the share price for the last year. Intel is number one and has problems, too. A decent salary here starts to look like a good salary in USA, so I don't see any reason for an american company to come here. Also, the main reason of the Irish boom (CORPORATE TAX) will be surely cancelled in 2-3 years. Europe has had enough watching how german, french, italian money paid for goods packed here are dissapearing from their economy. Opposition from irish representatives in the EU-Finance Commission is very very strong. They will not accept any increase in Corporate tax. But guess what ?? The rest of Europe is working on a law to retain the profits in the country where the product is sold.
> In other words: even if Microsoft Office is packed in Ireland and sold in Germany, the profit might remain mainly in Germany from now on. This was a very clever way for the americans to sell their products in EU without paying import tarriffs. Check about this company called Round Island One from Dublin: they sell all the Microsoft software for Europe and Asia. The american IRS is watching since last year, because the american are losing tax money too, from this.
> 
> In conclusion, a crash in housing is sure because there will be physical limits: no more easy money from the banks, less foreign companies and less money from the corporate taxation even if the foreign companies will remain.
> 
> The irish government will do everything to hide this, there is no doubt about it. The sad story is that young irish people that bought houses now will remain to clean the mess after the party of those that have 40-50 years now.
> 
> All the best and make anyone aware about this, before it's too late !



Most interesting development in this thread sofar AFAIK. Great to have the perspective of a foreign worker. I actually work with a lot of Polish, Chinese and German engineers and I can tell you, they are all top class engineers and are a cut above the average engineering graduate that we get coming out of the Irish universities.

My recently-arrived Polish colleague was absolutely astounded by the price of houses - so much so, he actually laughed out loud because he thought it was a joke. He's here to get as much of that Irish borrowed money in his back pocket as he can, and once it goes pear-shaped, he'll leave, leaving Paddy Irish Joe with his house in commuter-land to pay back all the money to the European banks.

The party is over chaps. Any mortgage-free, young person won't be sticking around for pay-back time either.


----------



## beattie

CelloPoint said:


> Most interesting development in this thread sofar AFAIK. Great to have the perspective of a foreign worker. I actually work with a lot of Polish, Chinese and German engineers and I can tell you, they are all top class engineers and are a cut above the average engineering graduate that we get coming out of the Irish universities.
> 
> My recently-arrived Polish colleague was absolutely astounded by the price of houses - so much so, he actually laughed out loud because he thought it was a joke. He's here to get as much of that Irish borrowed money in his back pocket as he can, and once it goes pear-shaped, he'll leave, leaving Paddy Irish Joe with his house in commuter-land to pay back all the money to the European banks.
> 
> The party is over chaps. Any mortgage-free, young person won't be sticking around for pay-back time either.


 
Second that. We better buck up when we are working for the Poles and Chinese when a large amount of international companies relocate over there. In the long run our high cost base will do serious damage to our overall economic situation and with it our beloved housing market....


----------



## edo

Well Said Gab24

Couldn't have put it better myself - great post

better start checking out the languages section for the forthcoming evening class semester heh heh heh! -

 I am a property owner but its all paid for and its not in this country - I've got a feeling those whose assets are liquid and transferrable(both financial and skills) are going to be the ones best able to deal with the hurricane thats gonna hit this country in a few years time - I wonder , when the Irish are once again earning their livings in the 4 corners of the world , how we or more probably, our children will look back at the last decade or 2? What will the history books say about us? What a great time it was or what complete bunch of eejits we all were to throw it all away on something as mundane as houses - I can just see it - "We became wealthy and prosperous and all we got to show for it is a rusting steel pole in the middle of our capital city" .

Sweet dreams


----------



## Duplex

Gab24

Thanks for that insightful and valuable post.  

I'm optimistic that the Irish will learn from this manic episode, we are a resourceful, imaginative and gritty people.   


We learn our lessons (eventually)

1. Potatoes, never put all your eggs in one basket.

2. Property, never put all your eggs in one basket.


----------



## thewatcher

Duplex said:


> Gab24
> 
> Thanks for that insightful and valuable post.
> 
> *I'm optimistic that the Irish will learn from this manic episode, we are a resourceful, imaginative and gritty people. *
> 
> 
> We learn our lessons (eventually)
> 
> 1. Potatoes, never put all your eggs in one basket.
> 
> 2. Property, never put all your eggs in one basket.


 
I don't know we seem to vote the same gimps in time after time after time,hopefully it will be the end of the 2 party system we have at present that only came about because of a civil war.
I blame the current government for a lot of the mess we are about to be in,but i have very little doubt the other mob would have done exactly the same damage.
I have noticed a change over the last while in a lot of my peers,that they are looking for something different their sick of the strokers,corruption and vested interests that infest this country.
If anything comes out of this whole mess,i'd love to see a genuine new party emerge,for the people where the ordinary man/woman on the street comes first.


----------



## thewatcher

A lot of the posters on this site predicted that the ssia's would have little effect on the market as this had already been built in to the prices and everyone was trying to get in before the ssia's matured anyway,where as the vested interests were maintaining buy now before prices jump.

As a soft landing was called 6 weeks after the ssia's matured,is it now time to say people here called it right on that score ?

If the september season does not kick in and prices go into reverse i predict the first dead cat bounce may 2007 !


----------



## Jeanne

SteelBlue05 said:


> Please lock this thread, the cliches are killing me!


 
I'm really glad this thread hasn't been locked! Wouldn't make sense  
If it had, we wouldn't have seen the very recent interesting post (IMO) from Gab24.
There are probably lots of people checking in and reading but taking their time to contribute.


----------



## SLAPPY

Two beautiful properties near me that both went on the market in late 2005 at 1.2 million and are now still sitting - prices slashed to 895,000.     Maybe it's a sign that the smart "high end" buyers have fled the market and left this madness to the FTB Bottom-Feeders.     

[broken link removed]=

[broken link removed]=


----------



## phoenix_n

SLAPPY said:


> Maybe it's a sign that the smart "high end" buyers have fled the market and left this madness to the FTB Bottom-Feeders.


 
And that my friend is the key. Unless you are financially savvy or have inside information the main method of realising gains and minimising losses is by following the smart money.

And the smart money at the moment is not being invested in, what will be, a depreciating and (more importantly because cash is, dont forget, king) highly illiquid asset - Irish property.


----------



## sandymount

SLAPPY said:


> Two beautiful properties near me that both went on the market in late 2005 at 1.2 million and are now still sitting - prices slashed to 895,000.     Maybe it's a sign that the smart "high end" buyers have fled the market and left this madness to the FTB Bottom-Feeders.
> 
> [broken link removed]=




Same house was 975,000 on this auctioneers site before the vendor switched to Lisney
http://www.prestigeproperties.ie/index.html


----------



## liteweight

SLAPPY said:


> Two beautiful properties near me that both went on the market in late 2005 at 1.2 million and are now still sitting - prices slashed to 895,000.     Maybe it's a sign that the smart "high end" buyers have fled the market and left this madness to the FTB Bottom-Feeders.
> 
> [broken link removed]=
> 
> [broken link removed]=



Absolutely no disrespect intended SLAPPY, but, did the smart "high end" bidders ever buy in Saggart? Maybe as a nice place to live, but surely not as an investment? Actually, I don't think it's very fair to single out individual properties on this thread.


----------



## beattie

liteweight said:


> Absolutely no disrespect intended SLAPPY, but, did the smart "high end" bidders ever buy in Saggart? Maybe as a nice place to live, but surely not as an investment? Actually, I don't think it's very fair to single out individual properties on this thread.


 
Why not? I think that there has been quite a number of properties which have had to reduce their prices in order obviously to generate interest. Maybe it is discomforting to some to see this sort of information but judging the amount of views expressed on this thread there is a great deal of interest to many people. Do you think that EA's would want this information being released to the general public? I think it is refreshing to get another view to the mostly one sided news that emanates from those ridiculous property supplements


----------



## liteweight

beattie said:


> Why not? I think that there has been quite a number of properties which have had to reduce their prices in order obviously to generate interest. Maybe it is discomforting to some to see this sort of information but judging the amount of views expressed on this thread there is a great deal of interest to many people. Do you think that EA's would want this information being released to the general public? I think it is refreshing to get another view to the mostly one sided news that emanates from those ridiculous property supplements



Although it might be refreshing to get another view, it's just another one sided view IMO. If posters were willing, for example, to set up another thread on this subject, where ALL properties which had dropped their price were listed, I think it would be more equitable. Perhaps all those properties who sold way above their listed price should be included. There's plenty of evidence for this in other threads, where posters are engaged in bidding wars and losing out.

I don't think Estate Agents would want the type of thread I've suggested to be available to the general public. As I'm neither an Estate Agent nor a vendor at the moment, I have no personal reasons for not wanting to see this type of post on this thread, other than consideration for the individual vendors who are being singled out! To have your property listed on a thread such as this, without consideration of the circumstances surrounding the price decrease, must be sickening. How do we know that some of the posters don't have a vested interest, i.e. want to buy a particular property and are trying to drive down the price further?

As to the property supplements, MyHome.ie is regaled by a number of posters on this thread, yet it is owned by the Irish Times. This is just my view. It is a free market and there are no holds barred on the internet. But for some, dipping into this thread, it has become very boring to see so many of the same types of post.


----------



## ninsaga

liteweight said:


> ..... I have no personal reasons for not wanting to see this type of post on this thread, other than consideration for the individual vendors who are being singled out! To have your property listed on a thread such as this, without consideration of the circumstances surrounding the price decrease, must be sickening. How do we know that some of the posters don't have a vested interest, i.e. want to buy a particular property and are trying to drive down the price further?.....



good points... I would be inclinded to think that there would be some here who have a vested intestest in seeing a property that they like being targeted..... anyways such is life


----------



## whathome

liteweight said:


> But for some, dipping into this thread, it has become very boring to see so many of the same types of post.


 
Sign of the times in a weakening market. I skip posts that don't interest me. Prices on websites such as myhome and daft are in the public domain.

Edit: When the "End of the road for soaring property market" article appeared in the Independent, posters claimed that the price drops mentioned by Fintan McNamara of IPAV were not really happening, that there was no evidence of falling asking prices. Subsequent evidence in this thread has proven that his statement - "agents are telling me that the same €700,000 property is now selling for about €20,000 less." was true. 

http://www.unison.ie/irish_independent/stories.php3?ca=9&si=1645649&issue_id=14300

Now that we know that falling asking prices are a reality, there is no need to prove it with specific examples anymore. There are too many asking price drops occurring to list anyway.


----------



## redo

SLAPPY said:


> Two beautiful properties near me that both went on the market in late 2005 at 1.2 million and are now still sitting - prices slashed to 895,000.     Maybe it's a sign that the smart "high end" buyers have fled the market and left this madness to the FTB Bottom-Feeders.
> 
> [broken link removed]=
> 
> [broken link removed]=



Lol, you said bottom feeders


----------



## redo

liteweight said:


> To have your property listed on a thread such as this, without consideration of the circumstances surrounding the price decrease, must be sickening. How do we know that some of the posters don't have a vested interest, i.e. want to buy a particular property and are trying to drive down the price further?



It must be very hard for vendors to see their property being discussed here and about how crazy the prices are.  I agree.  I can just imagine how the vendors must get enraged, putting off the potential purchasers, when they read the negative press about the asking prices about a posted link to a house, and I do feel for them.  

I sold a house in Lucan, and would balk at people giving out about Lucan.  In fact, I think this happened in the earlier thread that was closed down, about property in general.  The vendor (I think) came out saying the such and such a house for sale that was posted, was a great buy etc.

However, I think we all need a collective pinch with regards to property prices.  I think everyone here agrees that it can't continue on its current trajectory.  Things need to slow down, for everyones sake.  Unless we do, we could end up like the Wiley Cayote who has just realised that he (if cartoons figures have a sex) has just ran over the edge and has just enough time to look down, before he realises he is over the edge.

I've said it and alot of other posters have said it, FTB's provide the oil to the property market.  Unless they can enter the market, it will stall.  It is unlikely to crash, but just grind to a halt.  I have projected that there will be a mad rush by the trade-uppers this Autumn, but I will admit, that we may have already seen it this Spring.  

The upcoming budget needs to discourage investors entereing the market,  perhaps by banning them from getting 100% mortgages, or some kind of property tax.  There are plenty of investment oppertunities out there for people with money, no nonsense pyramid schemes for example.  Current sentiment towards the housing market?  Houses should not be purchased  like commodities, there is too much at stake.


----------



## whathome

"The madness of crowds - the lessons from 400 years ago. How to spot a bubble"

http://www.theage.com.au/news/Opini...dness-of-crowds/2005/03/25/1111692625200.html

Could this be where the phrase "You're some tulip" comes from?


----------



## liteweight

ninsaga said:


> good points... I would be inclinded to think that there would be some here who have a vested intestest in seeing a property that they like being targeted..... anyways such is life



Careful ninsaga, you may be accused of speaking in cliches. This is another thing bandied about to silence opposition on this thread.


----------



## liteweight

whathome said:


> Sign of the times in a weakening market. I skip posts that don't interest me. Prices on websites such as myhome and daft are in the public domain.



I don't skip posts, I like to make a judgement based on what everyone has to say, whether I find it boring or not. Otherwise, I'd be in danger of reading, or giving credence only to those who agree with me! I am aware that MyHome and Daft are in the public domain and therefore open to all. I simply felt that to look at both sides of the coin i.e. those houses that sold for more than the amount asked, as well as those whose prices are dropping, would give a more balanced view of what's happening in the market. Of course this information is not available in Google's cache.





			
				whathome said:
			
		

> Now that we know that falling asking prices are a reality, there is no need to prove it with specific examples anymore. There are too many asking price drops occurring to list anyway.



I think I recall that you are selling an investment property. Will you be dropping your price? If so, would you like to see the property posted here? No matter, I think if people are unsure as to what their sentiment is with regard to the property market it would be better for all concerned if we tried to give an objective, balanced view.


----------



## liteweight

redo said:


> It must be very hard for vendors to see their property being discussed here and about how crazy the prices are.  I agree.  I can just imagine how the vendors must get enraged, putting off the potential purchasers, when they read the negative press about the asking prices about a posted link to a house, and I do feel for them.  ....
> 
> ..However, I think we all need a collective pinch with regards to property prices.  I think everyone here agrees that it can't continue on its current trajectory.  Things need to slow down, for everyones sake.  Unless we do, we could end up like the Wiley Cayote who has just realised that he (if cartoons figures have a sex) has just ran over the edge and has just enough time to look down, before he realises he is over the edge.
> 
> I've said it and alot of other posters have said it, FTB's provide the oil to the property market.  Unless they can enter the market, it will stall.  It is unlikely to crash, but just grind to a halt.  I have projected that there will be a mad rush by the trade-uppers this Autumn, but I will admit, that we may have already seen it this Spring.



Wiley Cayote aka Roadrunner (?)..very good analogy and I agree with you, we do need a collective pinch perhaps, but not a shove!! We'll all wait with bated breath to see what the Autumn holds. Personally, I don't think it will be as manic as this Spring. I'm not sure what happened there. I saw the most abyssmal houses in my area going for huge money! I suspect Spring prices are the reason  that some vendors now have to drop their price i.e. they got carried away with themselves or else their Estate Agents did!!

FTBs are definitely getting a raw deal. It was never easy to get on the property ladder but the prices being asked for pokey apartments these days is , IMO, scandalous.  I really don't know what can be done to alleviate this situation. The culture is firmly entrenched in home ownership as the way to go. Even if we were to try to follow the German model or that of cities in the USA, we'd find it impossible. The calibre and size of apartments  produced here are such that families could never be raised in them.


----------



## whathome

liteweight said:


> I don't skip posts, I like to make a judgement based on what everyone has to say, whether I find it boring or not.


 
Good man liteweight 



liteweight said:


> I think I recall that you are selling an investment property. Will you be dropping your price? If so, would you like to see the property posted here? No matter, I think if people are unsure as to what their sentiment is with regard to the property market it would be better for all concerned if we tried to give an objective, balanced view.


 
I'm selling two properties. As of this week, both sale-agreed. One at asking and one below asking, I didn't have to drop the "asking" price on either but came very close. I would have absolutely no problem with any property of mine being linked to here as a price drop - they were advertised publicly anyway. Any free to public listing on the internet can be linked to, that it the nature of the world wide web. Thanks to the internet and sites like askaboutmoney, it's easier to get an objective, balanced view.

Please PM me if you would like to discuss further.


----------



## Guest107

liteweight said:


> We'll all wait with bated breath to see what the Autumn holds. Personally, I don't think it will be as manic as this Spring. I'm not sure what happened there.


Twont. Twas the top of the market (assuming one sold at that price). Frightening even.



> FTBs are definitely getting a raw deal. It was never easy to get on the property ladder but the prices being asked for pokey apartments these days is , IMO, scandalous.


Which is why I warned them off. Strenously so may I say and not all took the advice. They refuse to compare our apartments with European ones.


> I really don't know what can be done to alleviate this situation. The culture is firmly entrenched in home ownership as the way to go. Even if we were to try to follow the German model or that of cities in the USA, we'd find it impossible. The calibre and size of apartments produced here are such that families could never be raised in them.


Yep. We do not build for families , we build for 'ladder' freaks who dream of the house ....later on.


----------



## Duplex

Property prices are now falling across the US, as inventories continue to build up. Prices measured in real terms (relative to US inflation running at 3%  ( 1% above target)) are falling more sharply.  It seems that a lot of the slowdown can be attributed to the disappearance of speculators in the hottest markets; who were buying for capital growth.  If the Irish market remains subdued over the next couple of months it might effect the appetite of Irish 'investors' similarly.


----------



## sonar

Falling asking prices - so cleverly uncovered in this thread - appear to be fitting in with information from another source today in the front page headline of the SBPost.

Mortgage brokers who are



> uniquely placed .... to detect early warning signs


 
are predicting a major slowdown in the housing market with house price inflation of 0% for 2007 
(i.e predicting falls in real terms).


----------



## whathome

Here's a link to the SBPost headline:

*Mortgage brokers predict drop in house prices in 2007*
[broken link removed]=

"The Independent Mortgage Advisors Federation have predicted that the property market bubble will burst next year."


----------



## Duplex

Strange that mortgage brokers should be so frank?  Is it a case of being first to the punch garnering kudos for their predictive powers? Or are they looking to shift vendors expectations in order to keep turnover ticking?  Or maybe they have had a Paulian road to Damascus moment and seen the light?


----------



## bearishbull

Duplex said:


> Strange that mortgage brokers should be so frank? Is it a case of being first to the punch garnering kudos for their predictive powers? Or are they looking to shift vendors expectations in order to keep turnover ticking? Or maybe they have had a Paulian road to Damascus moment and seen the light?


Without going into detail they are acting in their own interests in some way,they always do these interest groups/associations hence the name.


----------



## phoenix_n

whathome said:


> Here's a link to the SBPost headline:
> 
> *Mortgage brokers predict drop in house prices in 2007*
> [broken link removed]=
> 
> "The Independent Mortgage Advisors Federation have predicted that the property market bubble will burst next year."


 
Read that this morning. Capital appreciation, the deciding factor in many purchases , is now stalled. 

The 'fun' is about to begin.


----------



## sonar

They might be telegraphing a message to Cowen that an attempt to stimulate things again is needed to counteract the ECB or else the meltdown will start.

Hopefully Cowen will ignore it and allow the market to make the first moves towards normality.


----------



## bearishbull

Havent been to shops yet and business post website has'nt been updated, whats the article saying? Are they asking for anything to be done? I think its too late and would be too irresponsible for the governement to do anything drastic now.


----------



## sonar

Basically predicting a major slowdown because

1. Interest rates rising
2. Rising inflation means less money to spend on mortgages repayments
3. Bank Stress testing on top of higher interest rates is reducing how much debt people can acquire

They didn't suggest solutions. But they know that Cowen knows that the housing market etc etc.


----------



## Guest107

sonar said:


> Basically predicting a major slowdown because
> 3. Bank Stress testing on top of higher interest rates is reducing how much debt people can acquire



The brokers can see people being refused or hardballed by certain banks who would have gotten a mortgage in the spring no probs. They can also see people who were approved for 100% and who are being told 90% or 95% at the very last minute and cannot 'find' this money as they disclosed everything to the banks . 

In other words they can see the banks closing the taps off very fast because they are in a unique position to do so as they deal with nearly all the banks. 

The Credit Unions have also closed off the taps this year, quietly . 

Cowan cannot really inject an amount such as 5% of the AVERAGE mortgage in 2006 into the market to make up this shortfall ...save maybe in the budget in December. Were he to introduce a FTB grant of 5% to help the brokers that would be about €15000 a pop nowadays . As he abolishe dthat grant in 2003 he would have lots of pissd off punters out there who _should_ have got the grant and not that many who did get it by the next election. He would therefore lose votes.

Cowan could, however, introduce universal shared ownership where the government buys 10% of each and every FTB house and guarantees to take the hit if the market drops by 12% meaning the owner only has to pay 2% of the loss while the government takes a bath on their entire amount . _Guarantor of first resort_ stuff not a grant per se.

Basically the credit train which drove prices onwards to insanity is drying up. While the irresponsible borrowers are still doing their damndest to get on their ephemeral ladder the lenders have started to leave the party.


----------



## walk2dewater

2Pack said:


> Cowan cannot really inject an amount such as 5% of the AVERAGE mortgage in 2006 into the market to make up this shortfall ...save maybe in the budget in December. Were he to introduce a FTB grant of 5% to help the brokers that would be about €15000 a pop nowadays . As he abolishe dthat grant in 2003 he would have lots of pissd off punters out there who _should_ have got the grant and not that many who did get it by the next election. He would therefore lose votes.
> 
> Cowan could, however, introduce universal shared ownership where the government buys 10% of each and every FTB house and guarantees to take the hit if the market drops by 12% meaning the owner only has to pay 2% of the loss while the government takes a bath on their entire amount . _Guarantor of first resort_ stuff not a grant per se.
> .


 
Or increase mortgage interest deductability.


----------



## RiceCakes

2Pack said:


> Cowan could, however, introduce universal shared ownership where the government buys 10% of each and every FTB house and guarantees to take the hit if the market drops by 12% meaning the owner only has to pay 2% of the loss while the government takes a bath on their entire amount . _Guarantor of first resort_ stuff not a grant per se.



Hmm, my tax euros will not go towards subsidising the people that bought at peak madness (aka last spring).
I'll emigrate before I subsidise the "investors" (saps).


----------



## bearishbull

RiceCakes said:


> Hmm, my tax euros will not go towards subsidising the people that bought at peak madness (aka last spring).
> I'll emigrate before I subsidise the "investors" (saps).


Ah leave the poor sheeple alone, no one told them prices could fall! like you'd think they had taken part in a pyramid scheme in cork the way youre talking like!


----------



## somerset

I have emigrated... almost two years ago.. and my sentiment is that the market will continue to climb

I arrived in Ireland as a skilled immigrant in 2000 and quickly assumed the position of a property bear, very much encouraged by sceptic parents and family with regard to the property market. I have maintained that position unflinchingly ...until becoming a follower of this website. 

The property market in 2000 seemed out of control and i waited confidently for the crash to occur. In late 2004 I emigrated, very much due the poor quality of life i could avail of in Dublin, and the unrelenting climb in its costs.

I have no regrets about leaving however the barrier to returning has climbed even higher. 

I still believe that the price of property is overvalued in Ireland, however reading this web site has been a reflection of my own stubborness; i imagine a lot of bears on this website would have been happy to get a foot on the ladder in 2000 and probably see that as a time when things werent that expensive, well it did seem expensive then, but not now... Its all relative, and i envisage that in 4 years time the same debates will be raging. A recent article found through a link on this site has reinforced that possibility.

http://www.federalreserve.gov/pubs/ifdp/2005/847/ifdp847.pdf 

In Ireland, property that appears expensive today will unfortunately seem like a bargain in 5 years time, and irrespective of how much i would love to see it drop, and how often i log on here for links to articles that reinforce that hope, it appears it most likely wont happen anytime soon. Infact over the years of following the Irish property game... too closely... there have been regular glimmers of hope, which have faded into smiles on the faces of friends who had the discipline and determination to get on the ladder. 

Again it is my hope that things do you pear shaped on a grand scale, I really mean that but i fear i may be waiting a while.

So my sentiment is hopelessly bearish, the obsession and capacity for property in Ireland will remain strong in the long term


----------



## liteweight

RiceCakes said:


> Hmm, my tax euros will not go towards subsidising the people that bought at peak madness (aka last spring).
> I'll emigrate before I subsidise the "investors" (saps).



Have you..or anybody close to you, been born, educated, been ill, died, collected a pension, been on the dole, social welfare....the affordable housing scheme????? If the answer to any of the above is yes, then this 'saps' tax euros helped support you and I didn't emigrate because of it!!!!!!


----------



## bearishbull

liteweight said:


> Have you..or anybody close to you, been born, educated, been ill, died, collected a pension, been on the dole, social welfare....the affordable housing scheme????? If the answer to any of the above is yes, then this 'saps' tax euros helped support you and I didn't emigrate because of it!!!!!!


Theres a difference when it comes to investments, buying homes and the like, you must know that the vast majority of people with no mortgage left or who dont have a mortgage or a small mortgage would be most annoyed if the government helped out the last 10 or 20% of buyers who suffered in a crash, people entered into this with their eyes wide open (or should have) and accepted that they may gain a load or lose a load but its their own responsibility.


----------



## bearishbull

somerset said:


> I have emigrated... almost two years ago.. and my sentiment is that the market will continue to climb
> 
> I arrived in Ireland as a skilled immigrant in 2000 and quickly assumed the position of a property bear, very much encouraged by sceptic parents and family with regard to the property market. I have maintained that position unflinchingly ...until becoming a follower of this website.
> 
> The property market in 2000 seemed out of control and i waited confidently for the crash to occur. In late 2004 I emigrated, very much due the poor quality of life i could avail of in Dublin, and the unrelenting climb in its costs.
> 
> I have no regrets about leaving however the barrier to returning has climbed even higher.
> 
> I still believe that the price of property is overvalued in Ireland, however reading this web site has been a reflection of my own stubborness; i imagine a lot of bears on this website would have been happy to get a foot on the ladder in 2000 and probably see that as a time when things werent that expensive, well it did seem expensive then, but not now... Its all relative, and i envisage that in 4 years time the same debates will be raging. A recent article found through a link on this site has reinforced that possibility.
> 
> http://www.federalreserve.gov/pubs/ifdp/2005/847/ifdp847.pdf
> 
> In Ireland, property that appears expensive today will unfortunately seem like a bargain in 5 years time, and irrespective of how much i would love to see it drop, and how often i log on here for links to articles that reinforce that hope, it appears it most likely wont happen anytime soon. Infact over the years of following the Irish property game... too closely... there have been regular glimmers of hope, which have faded into smiles on the faces of friends who had the discipline and determination to get on the ladder.
> 
> Again it is my hope that things do you pear shaped on a grand scale, I really mean that but i fear i may be waiting a while.
> 
> So my sentiment is hopelessly bearish, the obsession and capacity for property in Ireland will remain strong in the long term


Jaysis man, in 2000 very few if any people though property was overvalued wasnt much if any more than renting. The banks and mortgage brokers are both saying growth will slow to nothing next year then many of the speculators in the market will pull out as rates hit 5% and rents remain low/static,the market will be a buyers one and prices will fall over a prolonged period(years).
what your saying is prices kept rising after you thought they wouud fall so they will continuing rising now despite all the reasons that (even the vested interests admit) will stop growthnext year and therfore IMO cause falls in real terms, get a grip will ya.


----------



## liteweight

bearishbull said:


> Theres a difference when it comes to investments, buying homes and the like, you must know that the vast majority of people with no mortgage left or who dont have a mortgage or a small mortgage would be most annoyed if the government helped out the last 10 or 20% of buyers who suffered in a crash, people entered into this with their eyes wide open (or should have) and accepted that they may gain a load or lose a load but its their own responsibility.



Yeah I know...just sick of people spitting the dummy!!


----------



## whathome

Here's a link to the front page article in the Sunday Business Post yesterday

*Brokers predict major slowdown in housing market *
*[broken link removed]*

"It is now very much an issue, as base rates are at 3 per cent. Where is the money going to come from for first-time buyers to buy new homes?”


----------



## phoenix_n

somerset said:


> I have emigrated... almost two years ago.. and my sentiment is that the market will continue to climb
> 
> I arrived in Ireland as a skilled immigrant in 2000 and quickly assumed the position of a property bear, very much encouraged by sceptic parents and family with regard to the property market. I have maintained that position unflinchingly ...until becoming a follower of this website.
> 
> The property market in 2000 seemed out of control and i waited confidently for the crash to occur. In late 2004 I emigrated, very much due the poor quality of life i could avail of in Dublin, and the unrelenting climb in its costs.
> 
> I have no regrets about leaving however the barrier to returning has climbed even higher.
> 
> I still believe that the price of property is overvalued in Ireland, however reading this web site has been a reflection of my own stubborness; i imagine a lot of bears on this website would have been happy to get a foot on the ladder in 2000 and probably see that as a time when things werent that expensive, well it did seem expensive then, but not now... Its all relative, and i envisage that in 4 years time the same debates will be raging. A recent article found through a link on this site has reinforced that possibility.
> 
> http://www.federalreserve.gov/pubs/ifdp/2005/847/ifdp847.pdf
> 
> In Ireland, property that appears expensive today will unfortunately seem like a bargain in 5 years time, and irrespective of how much i would love to see it drop, and how often i log on here for links to articles that reinforce that hope, it appears it most likely wont happen anytime soon. Infact over the years of following the Irish property game... too closely... there have been regular glimmers of hope, which have faded into smiles on the faces of friends who had the discipline and determination to get on the ladder.
> 
> Again it is my hope that things do you pear shaped on a grand scale, I really mean that but i fear i may be waiting a while.
> 
> So my sentiment is hopelessly bearish, the obsession and capacity for property in Ireland will remain strong in the long term


 

The difference between 2000 and 2006 is that now we have a bubble. Irish property, in the context of Europe, was quite cheap and it merely was catching up in prices to be on par with other developed european cities. Whilst you may have been waiting for a crash in 2000 you really have to separate sentiment from factual analysis and in 2000 the prices were indeed only playing catch up.

Now all economists, financial institutions etc agree that there is a bubble. They may differ on possible outcomes but the fact that a bubble is recognised is very significant. Its akin to driving a car knowing that your tyres are over-inflated and wraped. Its an inevitable outcome. 

Speculation by the masses in one asset on what people may pay for it in future is what created the wraped nature of the bubble. As i said before a 250K apartment bought for 400K involved a cost of 150K to enter the market to speculate on capital appreciation. Now with that now occuring (it will take time for it to play out) that apt is still only worth (and slightly less as nervous buyers) 250K with the speculator (and not investor) losing 150K.


----------



## StoppedClock

phoenix_n said:


> The difference between 2000 and 2006 is that now we have a bubble.


 
I agree with all you are saying but I think the most important difference is that now it appears that the lenders are going to turn off the taps. 

IMO even with the acknowledgement that there is a bubble and the general change in sentiment this in itself will not stop the HPI and I believe that if the banks do continue to lend ever more amounts then the prices will continue to go up.


----------



## phoenix_n

StoppedClock said:


> I agree with all you are saying but I think the most important difference is that now it appears that the lenders are going to turn off the taps.
> 
> IMO even with the acknowledgement that there is a bubble and the general change in sentiment this in itself will not stop the HPI and I believe that if the banks do continue to lend ever more amounts then the prices will continue to go up.


 
Whilst that may have been true a number of years ago the nature of the property market at the moment is heavily based on peoples sentiment. The bidding wars of the last 6 months were not a consequence of people desperately seeking 'shelter' but was based solely on speculating that the asset was going to continue to rise.


----------



## StoppedClock

phoenix_n said:


> Whilst that may have been true a number of years ago the nature of the property market at the moment is heavily based on peoples sentiment. The bidding wars of the last 6 months were not a consequence of people desperately seeking 'shelter' but was based solely on speculating that the asset was going to continue to rise.


 
But there still are a lot of people who believe it is a one way ticket and for every bearish report they will quote a bullish one, these people will not be convinced until the market actually starts tanking, IMO the sentiment hasn't turned sufficiently bearish to kill the market, and that the next chapter in the book is the FTB's not getting the loans which will then lead to the more widespread change of sentiment which will tip the scales.  

However if the lenders/goberment pull another trick from their sleeve which allows continued increases in loans (or some other way of making houses more 'affordable') then the market will continue to go up and the current bearish sentiment will be replaced by a new unbelievably bullish one where the feeling will be of utter invincibility because the market shrugged of IR and high oil prices etc. etc.


----------



## phoenix_n

StoppedClock said:


> But there still are a lot of people who believe it is a one way ticket and for every bearish report they will quote a bullish one, these people will not be convinced until the market actually starts tanking, IMO the sentiment hasn't turned sufficiently bearish to kill the market, and that the next chapter in the book is the FTB's not getting the loans which will then lead to the more widespread change of sentiment which will tip the scales.
> 
> However if the lenders/goberment pull another trick from their sleeve which allows continued increases in loans (or some other way of making houses more 'affordable') then the market will continue to go up and the current bearish sentiment will be replaced by a new unbelievably bullish one where the feeling will be of utter invincibility because the market shrugged of IR and high oil prices etc. etc.


 
Perhaps but as of now with prices stalled ( hard to spot though as slow season ) ,irish property from a speculative and investing perspective is now an unsafe and unrewarding investment. Those that sell their property now to previous unsuccesful buyers (where many are still reading the market as when they entered) are off-loading at the the top of the market.

But this thread can be put on hold as oct/nov the price freeze will be noticed, buyers will be nervous but some will stil commit, xmas will be slow and not until feb/mar will slight panic happen when sellers still cannot off-load. Market will be read by summer resulting in downward spiral prices in aug (entering market early) and continue to who knows when.

But thats my take and we will have to see.


----------



## Guest126

phoenix_n said:


> And yes there are still people buying houses like there are those still buying secondhand alfa 156s.
> 
> And again i am going to say it. I believe that many apartments currently retailing for 380-400K will result in at least 150K been knocked off by the end of this year.


 
Hi Phoenix_n

I thought from your recent post (above) that you were expecting a 40% drop in apartment prices by end of 2006 - it now sounds like you're expecting no dramatic prince fall until August 2007, have you changed sentiment?


----------



## thefisherman

CapitalCCC said:


> Hi Phoenix_n
> 
> I thought from your recent post (above) that you were expecting a 40% drop in apartment prices by end of 2006 - it now sounds like you're expecting no dramatic prince fall until August 2007, have you changed sentiment?


 
trying to guess when this wobbly bubble is going to start rolling downhill is tricky to pinpoint-but roll it will.
and it will quickly snowball.

axiom, if prices can't rise forever-they wont.

when they stop rising the market will be hit by canny investors offloading near the top and nervous speculators dumping properties that are draining their cash flow.not to mention the over supply of 80 to100 thousand houses being built.
the investors,and builders can afford to sell for less than the speculators who will have to drop prices to compete.
nobody wants to hang on to an asset that is falling in value,shares or houses. people will try and salvage what profit they can so i can see the market going into freefall, total carnage when it gets going. 
saying this does not mean i want it to happen,but business is war.there will be winners and lots of losers.
prepare, the end draws near.
you cant time the markets so the smart money is probably pulling out already.

good luck.








tough times ahead,i fear.


----------



## Guest126

thefisherman said:


> axiom, if prices can't rise forever-they wont.
> 
> tough times ahead,i fear.


 
But if posters choose to nail their colours to the mast then they cant turn around and say "oh it's a hard one to call" - if it is too hard to call a date, then don't call a date!!


----------



## bearishbull

CapitalCCC said:


> But if posters choose to nail their colours to the mast then they cant turn around and say "oh it's a hard one to call" - if it is too hard to call a date, then don't call a date!!


 Nobody can call it accurately at this stage and there is never a 40% fall in prices of property in space of less than a year unless theres a major event to cause it. This will be a slow drawn out affair, dont listen to  people saying prices will fall dramatically in space of a year or two as this isnt the way things pan out in the marketplace.


----------



## Guest126

Although there have been some spectacular share price collapses in less than a year, I suppose property would be (by its nature) a more drawn out process, even in event of a crash.


----------



## phoenix_n

CapitalCCC said:


> Hi Phoenix_n
> 
> I thought from your recent post (above) that you were expecting a 40% drop in apartment prices by end of 2006 - it now sounds like you're expecting no dramatic prince fall until August 2007, have you changed sentiment?


 
Thanks for keeping tabs on me. I can see localised drops in prices by the end of the year in that poor stock will take a hit but it wont be that noticeable in the wider sector. (properties that come on the market after sale fell thru will be cheaper aswell as the length of time on market will force quicker sale) The 'actual' hit wont (IMO) occur until there is an attempt by many recent 'investors' to liquidate their stock. By my reckoning Aug 2007.


----------



## Guest107

you did say 40% by christmas Phoenix     nahhhhhhhhhhhhh that won't happen. The EAs are a selling cartel in Ireland and can finesse pricing to hide slumps for up to 2 years by not dropping below certain thresholds and sticking there . 

The problem is that the selling cartel has been bypassed as I explained elsewhere so the EA selling cartel do not have the power to finesse this downturn as they did previous ones.


----------



## beattie

2Pack said:


> The problem is that the selling cartel has been bypassed as I explained elsewhere so the EA selling cartel do not have the power to finesse this downturn as they did previous ones.


 
How have they being bypassed?


----------



## Guest126

phoenix_n said:


> Thanks for keeping tabs on me.


 
No problem - I suppose if people come on here making extremely leftfield predictions for the property market (or any other market) it is worth remembering them so that the same people can't start chanting different predictions two weeks later...otherwise we will all get every call right!!


----------



## Guest107

beattie said:


> How have they being bypassed?



If you sold a proerty in the early 1990s it would have been done through and by  an EA who would only take maybe 2 houses in an estate at a time. Now you have _<cough> _websites where you can do it yourself !!!!!!

Therefore EAs cannot stem a flood of panicking spcuvestors  dumping their gaffs like they could have up to 10 years ago.


----------



## Bedsit

Apologies in advance as I know we are not supposed to put stats on this site. However I noticed that the number of houses for sale on DAFT today is approaching 17000. This seems to be a considerable jump from the 14000+ I recall in earlier posts.

I guess the question remains is DAFT just getting more popular or is there an inventory build up taking place?

EDIT: Looks like they were doing a mopping up operation during the past hour. The figure has settled to just over 16000 now


----------



## Mrs Mac

A friend of mine told me at the weekend that one particular institution is now dealing with a large amount of repo's and they are getting busier by the day.
Not trying to be vague but I won't mentioned the company's name for obvious reasons.  Seems that is happening already.


----------



## phoenix_n

CapitalCCC said:


> No problem - I suppose if people come on here making extremely leftfield predictions for the property market (or any other market) it is worth remembering them so that the same people can't start chanting different predictions two weeks later...otherwise we will all get every call right!!


 
Well I dont believe i changed my predictions but you seem to be more interested in shooting the messenger than the message so i shall leave it at that.



2Pack said:


> you did say 40% by christmas Phoenix  nahhhhhhhhhhhhh that won't happen. The EAs are a selling cartel in Ireland and can finesse pricing to hide slumps for up to 2 years by not dropping below certain thresholds and sticking there .
> 
> The problem is that the selling cartel has been bypassed as I explained elsewhere so the EA selling cartel do not have the power to finesse this downturn as they did previous ones.


 
2Pack. You seem to repeat this but if someone has to sell they have to sell. Not sure if you quite understand all the fundamentals of the market but there is no 'conspiracy' when it comes to Irish property.


----------



## Guest126

phoenix_n said:


> Well I dont believe i changed my predictions but you seem to be more interested in shooting the messenger than the message so i shall leave it at that.
> 
> 
> 
> 2Pack. You seem to repeat this but if someone has to sell they have to sell. Not sure if you quite understand all the fundamentals of the market but there is no 'conspiracy' when it comes to Irish property.


 
You did change your prediction - a few pages ago you predicted a 40% fall by Christmas, I only picked it up because today you were predicting that the significant fall would not be seen until August 2007 - are you saying that these two views are consistent with each other?

Maybe you understand "the fundamentals" so well that you can see the consistency in those two statements!!


----------



## Guest107

I understand that a 40% fall by Christmas is impossible? Thats pretty fundamental is it not ???

Phoenix also predicts a fall of *c.75% *by an unspecified date here


----------



## thefisherman

its all starting to converge,
rising interest rates cutting the affordability of ftb's. 
massive over hang of vacant properties.
80-to 100 thousand new builds coming on line.
investors taking their profit(gotta know when to fold!)
speculators ditching money losing properties.
american housing bubbles starting to pop. ie, florida. san deigo, boston. when america sneezes the whole world catchs a cold.
because the stock markets are very unsettled at the moment, alot of investors held back from offloading property but now i think that they would prefer to have the cash in a bank account until the dust clears.
all this in my humble view which could be totally wrong- but the evidence is there for all to see,what you do with it is up to yourself.
now -who wants to pay 400k for a 3 bed 1200sq foot house in a crowded estate without any green areas or parking? bearing in mind it might be worth 390k the week after you move in.
paddy last -whereforth art thou?thou brave foolish lemming.

full of doom and gloom today.
independent lemming breaking from the pack.

as for people changing their predictions-the wise man changes his view according to evolving facts,the fool never.


----------



## StoppedClock

http://www.unison.ie/breakingnews/index.php3?ca=35&si=96736

*AIB increases interest rates in wake of ECB decision*

Every body strapped in?  Hold on tight...


----------



## Guest126

thefisherman said:


> as for people changing their predictions-the wise man changes his view according to evolving facts,the fool never.


 
So what fact has changed that lead someone that predicted a 40% fall by Christmas to now predict no significant fall until Aug 2007?

Oh sorry, I am just a fool for not seeing the wisdom!!


----------



## phoenix_n

CapitalCCC said:


> So what fact has changed that lead someone that predicted a 40% fall by Christmas to now predict no significant fall until Aug 2007?
> 
> Oh sorry, I am just a fool for not seeing the wisdom!!


 
Again i was specifically mentioning certain stock would decrease by xmas and i have not changed my view on this. I dont want to go on as this thread seems to have worked it course but you do understand that property can be a highly illiquid asset so the 'true' value is only realised on final sale. Just because you put it on the market for 400K its true value may be finally assessed at 250K.


----------



## thefisherman

CapitalCCC said:


> So what fact has changed that lead someone that predicted a 40% fall by Christmas to now predict no significant fall until Aug 2007?
> 
> Oh sorry, I am just a fool for not seeing the wisdom!!


 
first of all, it is not my place to defend phoenix-he can do that himself,i just pointed out that he is entitled to change his views,
secondly, using quotes out of context is a funny way to score points ,if thats what you are doing.
anyway theres no need to call yourself a fool, see the wisdom in that?
i dont think anyone here has any definite answers -we are just throwing our pennys worth into the discussion,
my view is worth the same as yours. 
nothing


----------



## Guest126

40% by Christmas - I just do not see it happening.

Should you find an example of a place that was trading at €400k this year changing hands for €250k or less before Christmas THEN please feel free to come on this website and should "I told you so" at me.


----------



## Guest126

I think that if you review the posts you will find that this is the quote:



thefisherman said:


> as for people changing their predictions-the wise man changes his view according to evolving facts,the fool never.


 
that was utterly without any context.


----------



## tententwenty

phoenix_n said:


> as this thread seems to have worked it course



Heres an entire internet for you. Enjoy. Meanwhile the rest of us are getting to comment ringside on our first ever real life property collapse, and I for one am thoroughly enjoying the discussion.


----------



## thefisherman

CapitalCCC said:


> I think that if you review the posts you will find that this is the quote:
> 
> 
> 
> that was utterly without any context.


 
really?another of your selective post. seems to me you are being thick today? read the entire post and you will see it was in context. you made the point that phoenix had changed his predictions,i pointed out that people are entitled to change their minds,you took this as a dig at you when it was not.


----------



## thefisherman

move on dude, get over yourself. 
if this thread moves onto personal bickering it will probably be closed down.


----------



## Guest126

Stop being personal.
I questioned a property bear going from calling a 40% property price fall by end of this year (I am a bear too but that statement stunned me), to calling a crash occuring in August 2007.

My question remains.


----------



## whathome

Interesting finfacts article:

*Irish Economy 2006 and Future of the Celtic Tiger: Putting a brass *
*knocker on a barn door!*
*http://www.finfacts.com/irelandbusinessnews/publish/article_10006912.shtml*

"The new housing units are small and are among the lowest standard in the Developed World"


----------



## thefisherman

CapitalCCC said:


> Stop being personal.
> I questioned a property bear going from calling a 40% property price fall by end of this year (I am a bear too but that statement stunned me), to calling a crash occuring in August 2007.
> 
> My question remains.


 
yes , your question remains, maybe if you directed at the person that quoted it you might get an answer instead of using my posts out of context to say what exactly?

good day to you.
that concludes my posts today.


----------



## whathome

The construction industry is like the Duracell bunny:

http://www.rte.ie/business/2006/0814/construction.html

"It looks like the industry is on target to deliver another record level of house completions this year"


----------



## The Punter

Ok, my 2 cent worth. I believe the property market cannot and will not sustain itself over next couple of years. I think the ecomony is a basket case, totally dependant on construction and it's offshoots. It is concievable that it could all fall down like a deck of cards. 

As one of many who have an investment property in this country (I am sure David Mcwilliams has a name for me) I have started to think that if the banks are selling all their property then it's time to get out too. I like the saying that you only make a profit once it's banked so thats what I will do.  
I believe there is still gains to be made in the market for another few months but I dont plan on trying to time the market any more than I am doing now.
Once the house goes on the market I will be sure to give you folks the definitive answer to what the *Current public sentiment towards the housing market *is!! Hopefully it will be positive for at least another month!!


----------



## beattie

The Punter said:


> Once the house goes on the market I will be sure to give you folks the definitive answer to what the *Current public sentiment towards the housing market *is!! Hopefully it will be positive for at least another month!!


 
Best of luck, there will still be a few saps who will keep purchasing for a while yet. Make sure you keep the forum updated with developments.


----------



## phoenix_n

The Punter said:


> Once the house goes on the market I will be sure to give you folks the definitive answer to what the *Current public sentiment towards the housing market *is!! Hopefully it will be positive for at least another month!!


 
I believe you should get an early impression of the market when your EA views your property.


----------



## JohnnyBoy

Just to add my 2 cent's worth.I was driving up to UCC in Cork a couple of days ago & there were tens of houses for sale in the traditional student areas,it was incredible.For me this implied,it is becoming a buyer's market & I think the worm is turning!


----------



## thewatcher

whathome said:


> Interesting finfacts article:
> 
> *Irish Economy 2006 and Future of the Celtic Tiger: Putting a brass *
> *knocker on a barn door!*
> *http://www.finfacts.com/irelandbusinessnews/publish/article_10006912.shtml*


 
Ouch,i started to feel very ill about halfway through that article,we really are in a serious pickle !.


"The striking aspect of Irish public governance is that the buck stops nowhere."


I couldn't have put it better myself !.


----------



## The Punter

phoenix_n said:


> I believe you should get an early impression of the market when your EA views your property.


 
EA's are still biggin' up the market which is expected.


----------



## whathome

Does anybody else think that a certain "new homes agent" have too much power in the new homes market?

I wonder - does the Competition Authority take an interest in the property market?


----------



## whathome

Pat McArdle made an interesting statement in an sbpost article yesterday:

"The trick will be to manage supply so that an overhang of unsold houses does not materialise and generate a negative price spiral"

[broken link removed]

How exactly will supply be "managed" so that prices don't drop? I wonder what is the "trick"?  This sounds like a very unusual statement coming from the chief economist at a lending institution. Is there a way to legally control supply in a market in order to keep prices high?

From the Competition Authority website homepage:

*When does the Competition Authority take action?*
"Anti-competitive behaviour occurs when firms agree to fix prices, limit output, divide business between them or abuse their market power, with no benefits to consumers"
http://www.tca.ie/


----------



## phoenix_n

The Punter said:


> EA's are still biggin' up the market which is expected.


 
Agreed, however if you ask the right questions you can ascertain their views on the current market. (if they scratch their nose they are hiding something  ) Have you made sufficient gains that you can offer a 'discount' (below asking price) to make a quick sale. 



whathome said:


> :
> 
> "The trick will be to manage supply so that an overhang of unsold houses does not materialise and generate a negative price spiral"
> How exactly will supply be "managed" so that prices don't drop? I wonder what is the "trick"?


 
He is merely refering to basic economics of supply and demand. However its as much use as closing the door after the horse has bolted. Supply cannot be restricted in the short term - unless i am missing something.


----------



## soma

whathome said:


> Interesting finfacts article:
> 
> *Irish Economy 2006 and Future of the Celtic Tiger: Putting a brass *
> *knocker on a barn door!*
> *http://www.finfacts.com/irelandbusinessnews/publish/article_10006912.shtml*



_Woah, that was one savage attack on modern economic ireland.._


----------



## The Punter

Depends on what you classify as sufficient.


----------



## room305

phoenix_n said:


> Have you made sufficient gains that you can offer a 'discount' (below asking price) to make a quick sale.



Presumably he will only consider such an action if the offers aren't coming in. Why would you tell the REA that you will accept a low offer? Does he need a quick sale? If you tell the REA that you'll accept a low price, then you will get a low price. They care more about quick turnaround than getting an extra €10k over the market value and will happily sell at a discount if they can do so quickly.

Despite much of the talk on this thread the market is not crashing. Its long term prospects are nothing short of dire but I wouldn't fool myself that there is anything other than an upward trend occuring at the moment.


----------



## CelloPoint

whathome said:


> Pat McArdle made an interesting statement in an sbpost article yesterday:
> 
> "The trick will be to manage supply so that an overhang of unsold houses does not materialise and generate a negative price spiral"
> 
> [broken link removed]
> 
> How exactly will supply be "managed" so that prices don't drop? I wonder what is the "trick"?  This sounds like a very unusual statement coming from the chief economist at a lending institution. Is there a way to legally control supply in a market in order to keep prices high?



I wanted to make that very same quote yesterday, but for some reason the sbpost site wasn't updated.

House price management me This post will be deleted if not edited to remove bad language! Last time I checked this was a free market economy.

The affordable housing scheme is the only card FF/PDs have left to get themselves out of this mess. And it's a low-ranking off-suit card at that


----------



## CelloPoint

JohnnyBoy said:


> Just to add my 2 cent's worth.I was driving up to UCC in Cork a couple of days ago & there were tens of houses for sale in the traditional student areas,it was incredible.For me this implied,it is becoming a buyer's market & I think the worm is turning!



Did you get any pictures? I'd love to see some pictures of loads of apartments up for sale at the same time.


----------



## phoenix_n

The Punter said:


> Depends on what you classify as sufficient.


 


room305 said:


> Presumably he will only consider such an action if the offers aren't coming in. Why would you tell the REA that you will accept a low offer? Does he need a quick sale? If you tell the REA that you'll accept a low price, then you will get a low price. They care more about quick turnaround than getting an extra €10k over the market value and will happily sell at a discount if they can do so quickly..


 
I believe that by his response that Punter may have made a sufficient gain that he may be willing to 'lose' 10K to realise that gain. But it depends on how you read the market. But you would want to be a very lucky investor indeed to time the market exactly right.


----------



## methud

Hi Guys, just wondering if anyone has a link on the web to a 'Build calculator' for new houses. I don't mean 'rebuild' calculators as these tend to give estimates (via banks) for insurance purposes, therefore they're over inflated and aimed at contractor builds rather than sourcing the individual contractors yourself or via a project manager.

Any one take my meaning? 

Cheers.


----------



## The Punter

phoenix_n said:


> I believe that by his response that Punter may have made a sufficient gain that he may be willing to 'lose' 10K to realise that gain. But it depends on how you read the market. But you would want to be a very lucky investor indeed to time the market exactly right.


 
I would say there are very few people who haven't made sufficient gains in the last 4-5 years in property in Ireland. i agree with the guy who said that the market is still rising so I dont envisage having to sell at any kind of discount. obviously, if i dont get any takers I can afford to take a reduced price. My sentiment is that in the coming years this will be more likely to happen but not just yet.


----------



## phoenix_n

The Punter said:


> I would say there are very few people who haven't made sufficient gains in the last 4-5 years in property in Ireland. i agree with the guy who said that the market is still rising so I dont envisage having to sell at any kind of discount. obviously, if i dont get any takers I can afford to take a reduced price. My sentiment is that in the coming years this will be more likely to happen but not just yet.


 
Not so sure if it still rising as the cost of debt has increased but won't know till autumn. But it may be interesting for others to read that above explains how prices can fall (slightly) as Punter has made gains of say 200-400 (guessing ) and can i suppose take a hit of 10-50 without it having any effect. Lucky bugger.


----------



## whathome

The Punter said:


> obviously, if i dont get any takers I can afford to take a reduced price.


 
My feeling is that the market is weakening currently.  I would be inclined to sell earlier rather than later this season for two reasons:

1. Take advantage of any pre-interest-rate-rise-approved buyers still knocking about.

2. Get it on the market before the next batch of supply weakens your selling position even further.


----------



## Howitzer

whathome said:


> Pat McArdle made an interesting statement in an sbpost article yesterday:
> 
> "The trick will be to manage supply so that an overhang of unsold houses does not materialise and generate a negative price spiral"
> 
> [broken link removed]
> 
> How exactly will supply be "managed" so that prices don't drop? I wonder what is the "trick"? This sounds like a very unusual statement coming from the chief economist at a lending institution. Is there a way to legally control supply in a market in order to keep prices high?
> 
> From the Competition Authority website homepage:
> 
> *When does the Competition Authority take action?*
> "Anti-competitive behaviour occurs when firms agree to fix prices, limit output, divide business between them or abuse their market power, with no benefits to consumers"
> http://www.tca.ie/


 
Supply WAS actually managed last sping. Anyone who was seriously looking at the market last January/February/March will have noticed, and it was picked up in the press, that there was a 3/4 week delay in bringing the first new builds to the market. The season effectively started later than usual but the interest was by then huge and prices surged. This was in response to the fact that new house prices last year (2005) stalled somewhat because the stamp duty changes of 2004 made them less appealing to FTBs. The first rate rise in Dec 05 would have also been on agents minds.

So agents can indeed manipulate the market. It just remains to be seen whether the same trick can be pulled again.

Whether this constitues the behaviour of a collective monopoly is open to debate but may be noted if last Spring does become the high water mark for the Irish property market. I believe it will be.


----------



## whathome

Howitzer said:


> Anyone who was seriously looking at the market last January/February/March will have noticed, and it was picked up in the press, that there was a 3/4 week delay in bringing the first new builds to the market.


 
I had noticed that, new builds seemed to arrive on the market in the same week, a few weeks after prices had taken a supply-starved jump. One particular agent seems to have a very high percentage of the new build market.


----------



## Guest107

whathome said:


> One particular agent seems to have a very high percentage of the new build market.



and can maybe manipulate an apparent  'Housing shortage in Dublin'  maybe  ????

and can maybe release peripheral developments before the better located ones to get the deposits in 

and can set the level of deposits very high (my booking deposit on my first house was 1000 for a 66000 house or 1.5% at the time. What is the typical booking deposit now ???


----------



## Howitzer

And here's the story, 03 Feb 06.

http://www.unison.ie/irish_independent/stories.php3?ca=303&si=1553625&issue_id=13623

And the reason? Aparently the architects drawing got delayed. In every estate agent. 



> Architects' drawings were delayed. Brochure layouts were held up. Printing was put off. And with the property buying public now so used to really streamlined launches, no-one was interested in going into the market-place ill-prepared.


 
And another article in the same issue.

*Property demand is set to rise*
http://www.unison.ie/irish_independent/stories.php3?ca=303&si=1553471&issue_id=13623


----------



## Guest107

funny how not a single builder or developer in all of Dublin was ready to go in February....until the pricing frenzy erupted in March/April when all the brochures materialised and launches were seamlessly managed  and the FTBs were in an absolute tizzy .


----------



## whathome

Howitzer said:


> http://www.unison.ie/irish_independent/stories.php3?ca=303&si=1553471&issue_id=13623


 
Thanks for the link Howitzer

From that February article :
"In a recent sale with nine prospective buyers as many as four were planning to hold onto their existing houses. Low interest rates and interest only loans make it easier to hold on to properties"

This is one of the major reasons why I think the autumn season will be very different to spring: the hangers-on won't be hanging on anymore. Higher interest rates and worry in the market will cause them to be far more likely to sell when trading up.


----------



## liteweight

2Pack said:


> and can set the level of deposits very high (my booking deposit on my first house was 1000 for a 66000 house or 1.5% at the time. What is the typical booking deposit now ???



3K on 345K property. Others ask for 5K. This deposit is refundable if you fail to sign contracts.


----------



## TallSpoon

Hello all, 
first time poster on this thread so go easy. 
I couldnt help but notice that 5 or six weeks ago when 2Pack made his observation there were around 14000 properties on Daft and now six weeks later there are over 16,200. Does nobody else think that this might be a significant indicator that people have started dumping property or maybe that nobody is buying. This is supposed to be the quiet period.

Tallspoon sits back and awaits mauling ;0)


----------



## conor_mc

TallSpoon said:


> Hello all,
> first time poster on this thread so go easy.
> I couldnt help but notice that 5 or six weeks ago when 2Pack made his observation there were around 14000 properties on Daft and now six weeks later there are over 16,200. Does nobody else think that this might be a significant indicator that people have started dumping property or maybe that nobody is buying. This is supposed to be the quiet period.
> 
> Tallspoon sits back and awaits mauling ;0)


 
It's not the most scientific method, but I'll tell you what, if it remains that high into Sept/Oct then I'll buy into it!


----------



## bearishbull

TallSpoon said:


> Hello all,
> first time poster on this thread so go easy.
> I couldnt help but notice that 5 or six weeks ago when 2Pack made his observation there were around 14000 properties on Daft and now six weeks later there are over 16,200. Does nobody else think that this might be a significant indicator that people have started dumping property or maybe that nobody is buying. This is supposed to be the quiet period.
> 
> Tallspoon sits back and awaits mauling ;0)


 The reason why is it was very quiet due to middle of summer, it would be normal for it to increase in august through to mid september. Please! no more DAFT figures  I hope we would try to be more rigourous in our analysis of any numerical data.


----------



## whathome

bearishbull said:


> The reason why is it was very quiet due to middle of summer, it would be normal for it to increase in august through to mid september. Please! no more DAFT figures I hope we would try to be more rigourous in our analysis of any numerical data.


 
Would have to disagree with you there bearishbull, inventory usually sells off in the summer.   Very little of it sold off this summer and we're left with an overhang heading into the new season.  New supply doesn't usually start to appear until early September but this year inventory levels appear to be rising earlier.  Quite a few houses have re-appeared having been sale-agreed previously also.


----------



## liteweight

Well, the Estate Agents seem to be starting early. Got the first of the usual 'let us sell your house for you...others sold in your area' etc. etc.,put through letterbox today. It begins............


----------



## Champions

> 1 bed in Cork put on market in May with asking price of €220K. reduced to €210K in June. now on offer for last two months at €195K. It will probably go down again soon


 
Crap one bed ground floor apartment in a crap area..........hardly a true reflection of the market


----------



## miju

Champions said:


> Crap one bed ground floor apartment in a crap area..........hardly a true reflection of the market



can i ask why when anyone posts evidence anecdotal or otherwise of price drops that it's almost rubbished by the "other side" (for want of a better term)

if you ask me that apt is your typical bog standard s*h*it apartment in s*h*it location / commuter land / FTB property which would make that a true reflection of the market

also noticed that particular property seems to be an investment property which makes it all the more interesting


----------



## liteweight

miju said:


> can i ask why when anyone posts evidence anecdotal or otherwise of price drops that it's almost rubbished by the "other side" (for want of a better term)
> 
> if you ask me that apt is your typical bog standard s*h*it apartment in s*h*it location / commuter land / FTB property which would make that a true reflection of the market
> 
> also noticed that particular property seems to be an investment property which makes it all the more interesting



I wouldn't call a handful of posts evidence of a price drop! There are lots of reasons why price can drop at this time of year, e.g.slow market during summer and vendor wants to sell quickly, new 'trade up' ready and must get rid of apartment to avoid paying 2 mortgages/bridging. Vendor bought into 'funny money' prices in Spring and overvalued his property.

I can't tell whether this is a 'bog standard' apartment or not. A picture on MyHome doesn't tell you anything 'real' about the surrounding area, the quality of the apartment or anything else for that matter!

For each property found on MyHome, where the price has gone down, there'll be another who got way over what they were looking for!! Look at the 'to sell or not to sell' thread and you'll see a poster who was surprised he got 50K over his asking price!!

To insist on posting various homes/apartments whose prices have dropped is indicative of nothing IMO. To quote the amount of properties for sale on Daft is indicative of nothing! It may indicate that the Daft website is doing even more business as time goes on...nothing more.


----------



## thewatcher

TallSpoon said:


> Hello all,
> first time poster on this thread so go easy.
> I couldnt help but notice that 5 or six weeks ago when 2Pack made his observation there were around 14000 properties on Daft and now six weeks later there are over 16,200. Does nobody else think that this might be a significant indicator that people have started dumping property or maybe that nobody is buying. This is supposed to be the quiet period.
> 
> Tallspoon sits back and awaits mauling ;0)


 
I was skeptical of the daft figures,but then i'm talking to someone tonight who is trying to sell 2 properties in good estates in blanchardstown after 6 weeks,very few viewings and no offers.
I go on to myhome just for a look,and in 1 estate(not where their selling) alone there are 8 properties all around the same price,now something tells me if someone wants to get out of there,their going to have to drop the price.What happens if the other one's follow suit ?

I've a feeling there could be a lot of property for sale in september !.


----------



## whathome

What's interesting is that the apartment has dropped by another 10k to €185,000 on daft.

Asking price drops are very important in helping to gauge the market.  It's very unusual to have so many price drops in such a short period of time.  Everybody wants more evidence than a handful of posts but everytime anyone shows evidence, it's rubbished. 

As liteweight says, there are properties that achieve in excess of their asking price with no evidence.  Likewise many properties do not achieve their asking price, again with no evidence of this fact.  There are so many asking price drops occurring that it would make this thread utterly boring if they were all presented.  With the weakening market it will become a more common phenomenon.


----------



## messyleo

liteweight said:


> To quote the amount of properties for sale on Daft is indicative of nothing! It may indicate that the Daft website is doing even more business as time goes on...nothing more.


 
have to second this - the increase in the number of properties could well be down to more people knowing about the site. my parents only heard about daft a few weeks back! Also HOK have just started (in the lat month or so) using it to list all their properties and hadn't been doing so before, which would certainly count for several hundred I'd imagine.


----------



## phoenix_n

liteweight said:


> I wouldn't call a handful of posts evidence of a price drop! There are lots of reasons why price can drop at this time of year, e.g.slow market during summer and vendor wants to sell quickly, new 'trade up' ready..


 
Agreed but we are currently watching the market on a day to day basis so whilst minute changes in house prices do not constitute a trend it is nonetheless indicative.(bad stock like the one linked will take a hit first though )

In reality its all speculatiion at the moment as its summer so we will not know until Autumn.


----------



## Raskolnikov

madisona said:


> you realize that the property market is Ireland has become truly bizarre and totally ridiculous when someone thinks that they can get €55K for a house in O'Malley Park in Stabcity.
> 
> [broken link removed]=


Can't believe that! I paid €6,600 for my end of terrace house in O'Malley park back in 2002. The house was only recently refurbished with PVC windows and had gas fired heating put in, the cost of which must surely have exceeded the value of the property. The pensioner who lived in it was burgled 7 times in a year and had enough. We since fitted an alarm system, multiple locks and reinforced the doors and windows and not had a burgulary since. O'Malley Park is not nearly as bad as it used to be but €55,000 is a ridiculous price.


----------



## Guest107

an _equally salubrious _address in Galway would cost you *€245k *with nightly views of the cars being burnt out etc . Limerick is _such_ good value .

[broken link removed]


----------



## whathome

I wonder how headlines like this affect sentiment:

*Rate rise fear as EU growth hits six-year high*
http://www.unison.ie/irish_independent/stories.php3?ca=185&si=1670487&issue_id=14493

"THE European economy grew at its fastest in six years during the second quarter of 2006, raising the pressure for yet more interest rate hikes"


----------



## Borderlord

I have been following DAFT for nearly 3 years and there is a massive jump this last few months. The below are Dublin houses for sale over the last few years. The below is just to illustrate what I have observed and are all approx. Take from what it you like. What I then to look at is not the comparison from year to year but from month to month especially 2006
For sale in Dublin
. 
2004 >> April > 730. May > 850. June > 860. July > 900. Aug > 1030. Sept > 1100. Oct 1230
2005 >> April > 910. May > 860. June > 840. July > 750. Aug > 700. Sept > 730. Oct > 720
2006 >> April > 820. May > 1080. June > 1300. July > 1650. Aug > 2200.


----------



## phoenix_n

Borderlord said:


> I have been following DAFT for nearly 3 years and there is a massive jump this last few months. The below are Dublin houses for sale over the last few years. The below is just to illustrate what I have observed and are all approx. Take from what it you like. What I then to look at is not the comparison from year to year but from month to month especially 2006
> For sale in Dublin
> .
> 2004 >> April > 730. May > 850. June > 860. July > 900. Aug > 1030. Sept > 1100. Oct 1230
> 2005 >> April > 910. May > 860. June > 840. July > 750. Aug > 700. Sept > 730. Oct > 720
> 2006 >> April > 820. May > 1080. June > 1300. July > 1650. Aug > 2200.


 
I am not sure what to make of the daft numbers but a house that i was watching that went sale agreed last week has been taken off so it does seem to reflect what is currently on the market.

From purely supply versus demand dynamics it is significant because if supply increases to meet demand and even exceeds it then it, by pure economics alone, will result in lower prices.

But what is telling is that sofar from posters here, and we must remind ourselves that it is a slow month, that it seems to be getting harder to sell. I also noted the increase in posts from 'savings and investments' inquiring about deposit accounts which may show a trend of holding onto cash.


----------



## ninsaga

I don't believe you can extract anything from daft regarding trends in house prices. The ONE thing that can certainly be extracted from daft is that it is becoming a more popular site than Myhome.ie..hence the increased vol.

An auctioneer told me lately that they never bothered to use daft but over the last couple of weeks or so, they cut a dela with daft & now have placed all of their properties on there.... so just becasue more & more individuals as well as auctioneers are going in that direction does not mean that the whole damn country is selling out. 

(Then again I suppose, people will see only what they want to see & draw wrong conclusions.)

ninsaga


----------



## Art

I agree re the daft figures. Look up Midleton, Co. Cork. A number of auctioneers have listed the same houses twice thereby distorting the number of houses for sale. The totals are irrelevant and we cannot possibly draw any conclusions from them.


----------



## whathome

ninsaga said:


> The ONE thing that can certainly be extracted from daft is that it is becoming a more popular site than Myhome.ie..hence the increased vol.


 
Would have to agree with this - HOK started using daft earlier in the year which boosted figures, probably additional agents making the same decision.


----------



## Guest107

I merely see an increase in inventory for sale .

If you look at daft today there are 16000 odd properties for sale. *

Thats equal to all the houses built in one year in Ireland in a normal year between 1976 and 1993 .

*And thanks to Finfacts for this graph on this page of theirs 

* http://www.finfacts.com/img/Chart1NCB.gif
*


----------



## room305

What about the inventory on Myhome.ie - is that also showing an increased number of houses for sale? If so then the stats might have relevance. 

However, if daft.ie shows more houses for sale now than this time last year and myhome.ie shows roughly the same number of houses for sale as last year, then the increase is likely to be due to the increased popularity of daft.


----------



## Raskolnikov

I also notice that there are many sites for sale on daft.ie masquerading as houses. Not only that, but it seems like most site sellers are only chancing their arm.


----------



## StoppedClock

Talk about a slow news day


----------



## redo

*Excess 650k*
http://www.daft.ie/searchsale.daft?id=117835&search=1

*Asking price 700k*
[broken link removed]


----------



## SteelBlue05

redo said:


> *Excess 650k*
> http://www.daft.ie/searchsale.daft?id=117835&search=1
> 
> *Asking price 700k*
> [broken link removed]


 

??? Whats the point of this?


----------



## whathome

SteelBlue05 said:


> ??? Whats the point of this?


 
Looks like you get €50,000 off if you call about the ad on daft rather than myhome


----------



## redo

whathome said:


> Looks like you get €50,000 off if you call about the ad on daft rather than myhome


Yes, it could give any potential buyers the scent of blood.


----------



## CelloPoint

As everyone knows I'm a complete bear.

Here are my speculative predictions to come about by December 2006:

* commuterland 1 bed flats - 40%
* commuterland 2+ bed flats - 30%
* inner M50 flats and commuterland houses - 25%
* city centre flats - 20%
* middle class suburbia 2 bed houses and townhouses (no management companies) - 15%
* middle class suburbia 3 and 4 bed semi-Ds (no management companies) - 10%

The above predictions are at a macro level. There will of course be micro-factors associated with particular sales in certain areas (embassy belt, seaside, Ballymun etc.).

Further depreciation to come in 2007 with commuterland being hardest hit - greater than 50% price reduction come summer time and a new government in place.

I stand to be corrected. See you all in December.


----------



## phoenix_n

whathome said:


> Looks like you get €50,000 off if you call about the ad on daft rather than myhome


 
Interesting. What it may mean that the agent has had to reduce the price by 7% to attract interest.


----------



## phoenix_n

CelloPoint said:


> As everyone knows I'm a complete bear.
> 
> Here are my speculative predictions to come about by December 2006:
> 
> * commuterland 1 bed flats - 40%
> * commuterland 2+ bed flats - 30%
> * inner M50 flats and commuterland houses - 25%
> * city centre flats - 20%
> * middle class suburbia 2 bed houses and townhouses (no management companies) - 15%
> * middle class suburbia 3 and 4 bed semi-Ds (no management companies) - 10%
> 
> The above predictions are at a macro level. There will of course be micro-factors associated with particular sales in certain areas (embassy belt, seaside, Ballymun etc.).
> 
> Further depreciation to come in 2007 with commuterland being hardest hit - greater than 50% price reduction come summer time and a new government in place.
> 
> I stand to be corrected. See you all in December.


 
I know i have been saying something simmilar to the above and i tend to agree somewhat with the above. You cant be as specific on across the board reductions although perhaps with more generic property you can.

I think though you have to factor in the lead time it takes to sell and unwilling sellers and nervous buyers. So whilst you may not see that 40% decrease in hard data,  what you will see is property on the market where its 'true value' is 40% less asking price (some sellers will offload of course) .


----------



## Guest107

I will predict a -20% minimum everywhere even in D4 embassy land and a fall of over 50% out in the *Back of Ballivor *type commuter places  but this will all  take up to three years to bottom out and will most assuredly not happen by December 2006 unless the ECB jacks by 25bp every montg from now on and a panic starts as well .

Property is 'sticky on the way down' with many threshholds to cross and pauses at certain steps which is why it will take quite a while to hit bottom.

The Irish bubble is not enormous enough by historic standards that it will go pop in 4 months, that sort of bubble is a 500% increase in a year such as this one


----------



## SteelBlue05

2Pack said:


> I will predict a -20% minimum everywhere even in D4 embassy land and a fall of over 50% out in the *Back of Ballivor *type commuter places but this will all take up to three years to bottom out and will most assuredly not happen by December 2006 unless the ECB jacks by 25bp every montg from now on and a panic starts as well .


 
"Over a 50% drop" eh? A drop to below the cost of building the place in most cases. Did you just pluck that figure out from thin air?


----------



## room305

CelloPoint said:


> Here are my speculative predictions to come about by December 2006:
> 
> * commuterland 1 bed flats - 40%
> * commuterland 2+ bed flats - 30%
> * inner M50 flats and commuterland houses - 25%
> * city centre flats - 20%
> * middle class suburbia 2 bed houses and townhouses (no management companies) - 15%
> * middle class suburbia 3 and 4 bed semi-Ds (no management companies) - 10%



I'm quite bearish myself but I have to laugh at your ridiculous predictions. We haven't seen any significant signs of inventory build-up and already you are calling for a huge correction.

You will see these kind of drops (and probably worse) but they are at least two years off yet.

Housing has undoubtedly gone bear in the U.S. and they are only taking about falls in prices occuring next year!

If a 1 bed flat in commuter land cost €250k last year, then it will probably cost about €275k now. For your prediction to come true, the seller will need to drop his asking price from €275k to €150k. A drop of 45% by the seller. 

Where is the motivation for such an enormous drop going to come from?

Making these kind of massive, stock market crash style predictions for the short term looks foolish and provides much ammunition for the bulls.


----------



## whathome

Here's how the last crash happened in the UK.  Took some time to unfold:

http://www.housepricecrash.co.uk/graphs-last-house-price-crash.php

I would say it will be gradual and progressive but relentless.


----------



## Remix

Anyone considered forwarding examples of widespread concealed asking  price reductions to the Indo ?

I would think there's a story there.

Besides they might be happy to report to the public how myhome.ie facilitates EAs reducing asking prices surreptitously.


----------



## langball

just caught up on the last 10 pages, took a bit of time but I have read the whole lot so far. There's lots of interesting comments and I hope I can add something meaningful. 

I got off the property merry go round in January. I live in Dublin and on my return from a year away I sold my only property which was in Cork. It had been rented for 2 of the 3 years I owned it. The sum remaining on the mortgage was half the sale price of 300k. - 2 other properties in the estate that have been put up for sale since have'nt sold, one (which was bigger and had a garage) was for nearly 400k a few weeks after mine and the sale fell through because the purchaser could'nt raise the funds, the other is still on the market for 300k. 

My tenants covered the rent and other costs and paid my ssia for 2 years, one of which I wasnt working. I sold the house with the contents so I presume the purchaser is renting it out. If the new owner got a 100% mortgage there would be a shortfall of 400 over what current (reduced) rental would deliver. I know of others who are buying to let and are covering the shortfall themselves in the hope that the sale will deliver a windfall like others have realised. I think this is total madness as after costs and cgt they need a big increase to break even. These people have other properties already so are especially vulnerable to interest rate increases. 

I bought the property because I was unable to afford or justify buying in Dublin. I had a good salary and some help from my parents at a time when property was still reasonable in Cork relative to Dublin. 

My reasons for selling were as follows: 

on returning from travelling I couldnt believe what I was told the place was valued.
my tenants were moving out of the house and the company that was renting it were looking for lower rents for their other tenants in a few houses the town.
the bypass was finishing and it was expected to have a negative affect on rentals in the town. 
I would kick myself if the price dropped and I never took the profits - I wont get upset if I see the same house go for more money.
I was probably never going to live there.
I am sceptical about Ireland's economy and its reliance on corporate America - if the finfacts article is anything to go by and 87% of our exports are by american companies this country is being propped up by people with no allegiance to any country. My job got outsourced in part to india before I left the country. I don't see any reason why many of those companies would stay here in the long run with US govt looking for their money from the likes of symantec, avg engineer wages 400 euros a month in poland (rte news) and america itself being gutted by outsourcing http://www.counterpunch.org/roberts03162005.html / http://www.finfacts.com/irelandbusinessnews/publish/article_10006912.shtml
I am not convinced there is that much real money in ireland and have no idea how people are going to deal with a global downturn and layoffs. I am according to the irish independent in the top 10% of earners. I cannot figure how people can affort to buy these suv's and odius apartments with concierges like http://www.thegrange.ie 'city living comparable to london and new york' http://www.dundrumpoint.ie - read the advertising... - the developers must be having some laugh, unbelievable - have these people who are 'registering their interest' given any thought to how they would pay their 2000 euro mortgages when interest rates increase and/or if they found themselves unable to find work or if the dollar crashed. 
I have the money in the bank and took some advice from a financial adviser. I have some in gold and I will probably pay some into a pension and an equities fund. 

I sometimes consider moving to germany again. I saw well built aparments in Berlin that are rented for 400 euros a month between 3 people! I am not considering buying to let. I speak German and lived there for 2 years so I would consider going back and living there in relative comfort (my definition of comfort doesnt involve getting ripped off on houses, cars, groceries, alcohol). Australia was'nt for me and theres not a lot going on in new zealand. America is out of the question right now. 


I am not relying on a spectacular crash so that I can get back on 'the ladder' in a hurry but I do expect it will happen. This comes from many of the books and websites that I read. I know you can find anything out there to support any view but my gut feeling is scepticism. The media in ireland in the last month have become quite worried. The purchase of myhome.ie by the irish times reminds me of dot.com mania that I was surrounded by and involved in. McWilliams book is pop-economics but he did lead me to reading about hyman minsky - I took this link from another great thread on aam [broken link removed] 

This one is from thedailyreckoning.com newsletter and the author of 'empire of debt'. Apologies for the length but I did'nt want to edit it. The bit from the guy in the FT is interesting. 




> Bill Bonner, en vacances in France:





> The gods have gone over to the other side.
> 
> What is happening is that trends that worked so
> beautifully on the upside are now slipping into reverse.
> 
> People still watch central bank policy setters as if it
> were a live sex show. They don't want to miss anything.
> But the thrill is gone. The magic no longer works.
> 
> The most important of these thrills is the housing
> market. When house prices were rising - in Britain as in
> the US, Australia, South Africa and across English-
> speaking world - homeowners enjoyed what economists call
> a "positive wealth effect". Interest rates fell. Housing
> boomed as more and more people went to work in it the
> industry. In America, 20% to 40% of all new employment
> in the last five years was in the housing sector. As
> everyone's house rose in price, people felt themselves
> richer and spent more money.
> 
> But now house prices have stalled...and are beginning to
> slip back.
> 
> >From Dallas comes news that house sellers are offering
> incentives such as free maid service, swimming pools and
> appliances - whatever it takes to move stuck
> merchandise. The trouble is, after ten years of boom
> conditions, there's a lot of merchandise to move. And
> much of it is not really suited to buyers' interest.
> 
> For ten years, people have bought expensive new
> apartments - "condos" as the outsized version in the US
> is known - not because they really want a condo...but
> because they think it is a way to magnify the wealth
> effect. The more condos they own, the more effect they
> get.
> 
> Or, they might have decided to get more bang by putting
> up more bucks. A buyer signs up for a plusher, pricier
> house than he really needs, realising that the wealth
> effect is proportional to the investment. Property, he
> sees, has been rising at 20% per year in many areas.
> Twenty percent of £500,000, he tells himself cannily, is
> more than 20% of £250,000. So he buys the half-million-
> pound house, even though he really doesn't need it.
> 
> But now that that 20% per year froth has disappeared,
> homeowners no longer have an interest in more house than
> they need.
> 
> "Homeowners say 'downsize me'," reports Reuters. It
> costs money to maintain a house. Property taxes, heat,
> mortgage payments and maintenance are all proportional
> to the size of the house. With nothing to gain, people
> naturally want to cut out the unnecessary expense.
> 
> The positive wealth effect has gone...negative. The more
> house you own, the more it costs you to hold onto the
> house...and the more you lose when house prices go down.
> 
> Meanwhile, the Anglo-Saxon homeowner is also getting
> squeezed by higher interest rates and higher fuel bills.
> "Gas prices inch up to another record high," says an AP
> report. The US national average rose to $3.03 last week.
> Prices in the UK are nearing £1 a litre again.
> 
> Now our hapless consumer is in a bind. His real income
> is flat or falling...while his expenses are starting to
> rise. He has to cut back. Naturally, the first thing to
> go will be the house he doesn't need....which makes the
> negative wealth effect even more effective and even more
> negative. Not just for the seller, but for everyone
> else. Every house sold at a discount drops the value of
> all equivalent housing stock - even for people who don't
> intend to sell. All of a sudden, none of them are as
> rich as they used to be. They, too, cut back their
> spending.
> 
> We know what the Fed and Bank of England will do once
> this trend builds up momentum; they will cut rates -
> just as the Old Lady did in August last year. She took a
> step back and cut to 4.50%. Now the Old Lady's been
> forced by inflation to start crawling forwards again.
> She's raised base rates to 4.75%.
> 
> But if the Bank of England or the Fed now cut the cost
> of borrowing from here, the magic will have gone. And no
> matter how many passes in the air these magicians make,
> it will not come back. For, if they really could
> manipulate the economy any way they chose, we need never
> have worried. They could have jerked the economy around
> like a puppet on a string. Want faster growth...just cut
> rates. Want less inflation...just raise them.
> 
> But there comes a time when financial officials can
> fondle rates as much as they want; they will never get
> the response they're looking for.
> 
> As Nouriel Roubini explains in last week's Financial
> Times:
> 
> "Once the housing and consumption slump starts, demand
> for durable goods becomes interest-rate insensitive.
> Indeed, the recent housing bubble has led to a glut of
> housing stock, consumer durables and lingering excess
> capital capacity in the rest of the economy. Thus, as we
> saw in 2000-01, the housing and consumption slump will
> dominate any monetary easing effort..."
> 
> In the US, the Fed can chirrup as much as it likes;
> lower rates simply won't reverse the negative wealth
> effect of a falling real estate market. Mortgage rates
> may go up or they may go down (the Fed only controls
> short rates), but people won't borrow at all if they
> sense they will have a hard time making the payments.
> This is because the old star-spangled circus magic has
> turned into black magic...a kind of voodoo economics
> curse, where the tricks all go wrong.
> 
> The magician pulls a rabbit out of his hat and it bites
> him on the nose. He saws his pretty assistant in half
> and finds her actually cut into two bloody pieces. And
> the ace up his sleeve turns out to be an Old Maid.
> 
> It is what happened to Japan in the 1990s. Could it
> happen in the US and Britain? We don't doubt it.


----------



## Guest107

SteelBlue05 said:


> "Over a 50% drop" eh? A drop to below the cost of building the place in most cases. Did you just pluck that figure out from thin air?



never mind the cost of building, its simply the _opportunity cost_ of the long commute over the short commute .

outer commuter belt of whatever town will  get it hardest .


----------



## SteelBlue05

2Pack said:


> never mind the cost of building, its simply the _opportunity cost_ of the long commute over the short commute .
> 
> outer commuter belt of whatever town will get it hardest .


 
Please explain, not following your arguement on how you are comming up with "over a 50%" drop....

I really dont think you'll see places for sale for less than the cost of the build, it does matter.

Some of the figures and claims thrown around on this thread are crazy, I thought this was for rational intelligent discussion, not tabloid type claims.


----------



## CelloPoint

room305 said:


> I'm quite bearish myself but I have to laugh at your ridiculous predictions. We haven't seen any significant signs of inventory build-up and already you are calling for a huge correction.
> 
> You will see these kind of drops (and probably worse) but they are at least two years off yet.
> 
> Housing has undoubtedly gone bear in the U.S. and they are only taking about falls in prices occuring next year!
> 
> If a 1 bed flat in commuter land cost ?250k last year, then it will probably cost about ?275k now. For your prediction to come true, the seller will need to drop his asking price from ?275k to ?150k. A drop of 45% by the seller.
> 
> Where is the motivation for such an enormous drop going to come from?
> 
> Making these kind of massive, stock market crash style predictions for the short term looks foolish and provides much ammunition for the bulls.



I'm sorry if I make you laugh, but I'm prepared to stick by what I predicted above. Unlike the US, the Irish market has a huge speculative element to it, driven mainly by incentive schemes such as section 23 coupled with a non-sensical property culture (or lingering 19th century Irish inferiority complex as I like to call it - new-found-wealth investors also suffer from this mindset).

I was being conservative above with my price drop in suburban 3 and 4 bed houses - they are certainly not immune either, but I gave them a only a 10% drop because the investor element is not as prominent in this class of housing (unlike section 23 flats). Ultimately I can see around a 50% drop in such 3 and 4 bed suburban houses over the next 3 years, depending on the economic performance. Whilst I agree that certain property classes are sticky on the way down, investment properties certainly are not sticky and with a huge supply of housing (far outstripping the population increase) there is a massive speculative element to the market that will result in a rapid price correction


----------



## liteweight

Remix said:


> Anyone considered forwarding examples of widespread concealed asking  price reductions to the Indo ?
> 
> I would think there's a story there.
> 
> Besides they might be happy to report to the public how myhome.ie facilitates EAs reducing asking prices surreptitously.



Do you mean because MyHome is owned by the Irish Times???


----------



## whathome

SteelBlue05 said:


> I really dont think you'll see places for sale for less than the cost of the build, it does matter.


 
Why not? - even at the height of our current boom it would cost more than €55,000 to rebuild that house in O'Malley park but it's selling for "just" €55,000. The value of a property is not simply related to the build cost.

Also - in a construction recession, building costs would be reduced significantly due to builders competing in a tougher market.


----------



## phoenix_n

langball said:


> just caught up on the last 10 pages, took a bit of time but I have read the whole lot so far. There's lots of interesting comments and I hope I can add something meaningful.
> 
> 
> <font face=&quot;Arial&quot;>I got off the property merry go round in January....


 
Good read.I think my sentiment is similar to yours in that i spent a number of years in Australia and came back last year. I also sold my rented house at the beginning of this year. I too realised the substantial profiit i could realise and was not going to risk that on, from what i could see, an inflated asset. (Interesting that you should mention Gold. I am currently researching that (have invested the bulk of my proceeds elsewhere) but not so sure of the current price. If you could add more info in the gold thread i'd appreciate it)


----------



## SteelBlue05

whathome said:


> Why not? - even at the height of our current boom it would cost more than €55,000 to rebuild that house in O'Malley park but it's selling for "just" €55,000. The value of a property is not simply related to the build cost.
> 
> Also - in a construction recession, building costs would be reduced significantly due to builders competing in a tougher market.


 
I am on about the original build cost, not rebuild costs.

Now back to this over 50% figure you magically whizzed up, how did you get that?


----------



## room305

CelloPoint said:


> I'm sorry if I make you laugh, but I'm prepared to stick by what I predicted above. Unlike the US, the Irish market has a huge speculative element to it, driven mainly by incentive schemes such as section 23 coupled with a non-sensical property culture (or lingering 19th century Irish inferiority complex as I like to call it - new-found-wealth investors also suffer from this mindset).



Well we'll wait and see I guess. I'll be very surprised if we even see falling prices this year, given that prices have jumped about 12% already. As for the U.S. not having a "huge speculative element" to their housing development? You couldn't be more wrong.

Do you not remember all those ads in the Sunday Times property supplement for condos in Florida?

Seriously, making outrageous claims like these just makes bears look stupid.


----------



## whathome

SteelBlue05 said:


> I am on about the original build cost, not rebuild costs.
> 
> Now back to this over 50% figure you magically whizzed up, how did you get that?


 
I didn't come up with any 50% figure.

Why do you believe that a property can't go below original build cost?


----------



## room305

SteelBlue05 said:


> Now back to this over 50% figure you magically whizzed up, how did you get that?



The 50% figure was already explained in this thread.


----------



## StoppedClock

langball said:


> I live in Dublin and on my return from a year away I sold my only property which was in Cork. It had been rented for 2 of the 3 years I owned it. ...
> ...My tenants covered the rent and other costs and paid my ssia for 2 years, one of which I wasnt working.


 
Great post langball but wouldn't go shouting about paying into SSIA while not normally resident in the state.


----------



## Guest107

SteelBlue05 said:


> I am on about the original build cost, not rebuild costs.


It is completely irrelevant so i will not even answer that. 


> Now back to this over 50% figure you magically whizzed up, how did you get that?


peripherality factors. 

As energy costs rise the Irish commuter belts 30 -50 miles out in little villages with no services will tank. Simple really . 

These peripheral commuter belts will see the greatest falls and thats where the 50% drops will be because there will be far more sellers than buyers and the price will be set by whoever bails out last .

Inner commuter belts less so.

Good close to employment areas less so again.


----------



## SteelBlue05

Ok, so you have a hunch that prices will fall, but you dont know by how much or why, and you are basically have a wild guess. Right, that clears that up then.

I would go and search for the theory behind the "over 50%" figure but there are over 2000 posts in this thread and I somehome dont think its worth the effort.

My point is try to keep the discussion factual or at least based on solid reasoning.


----------



## whathome

SteelBlue05 said:


> My point is try to keep the discussion factual or at least based on solid reasoning.


 
What's the solid reasoning behind the belief that a property can't sell for less than the original build cost?


----------



## redo

2Pack said:


> It is completely irrelevant so i will not even answer that.
> 
> peripherality factors.
> 
> As energy costs rise the Irish commuter belts 30 -50 miles out in little villages with no services will tank. Simple really .
> 
> These peripheral commuter belts will see the greatest falls and thats where the 50% drops will be because there will be far more sellers than buyers and the price will be set by whoever bails out last .
> 
> Inner commuter belts less so.
> 
> Good close to employment areas less so again.



It would probably more realistic to claim that the prices would fall back to 2000/2001 levels.  However, that would probably still work out around 50%


----------



## phoenix_n

SteelBlue05 said:


> Ok, so you have a hunch that prices will fall, but you dont know by how much or why, and you are basically have a wild guess. Right, that clears that up then.
> 
> I would go and search for the theory behind the &quot;over 50%&quot; figure but there are over 2000 posts in this thread and I somehome dont think its worth the effort.
> 
> My point is try to keep the discussion factual or at least based on solid reasoning.


 
In reality, steelblue , when anyone can produce real facts to support such falls then this thread will have ceased to exist as it will be in the public domain. Its his analysis (which i concur in parts) so if you have would like to state your analysis (which is also valid) then by all means proceed.


----------



## SteelBlue05

whathome said:


> What's the solid reasoning behind the belief that a property can't sell for less than the original build cost?


 
There is nothing to say this "can't" happen, just that it is very very unlikely in the case of the newer commuter towns that you mentioned previously where "over 50%" reduction in price is going to happen.

I say this because builders will not subsidise a person to buy a property below the build cost.


----------



## Guest107

redo said:


> It would probably more realistic to claim that the prices would fall back to 2000/2001 levels.  However, that would probably still work out around 50%



Yep, a fall back to pre bubble prices would be 50% . I am additionally assuming that more central areas will not give all of that back and will keep some of their post 2001 gains. 

In 2001 a litre of Diesel was 55p or €0.65c now its nearly twice that. Commuting has a marginal cost you see. 

Builders can only set realisable prices and if they are caught with inventory then tough.


----------



## SteelBlue05

phoenix_n said:


> In reality, steelblue , when anyone can produce real facts to support such falls then this thread will have ceased to exist as it will be in the public domain. Its his analysis (which i concur in parts) so if you have would like to state your analysis (which is also valid) then by all means proceed.


 
I dont mean we can predict the future, thats my point, we cannot. But why bother just picking figures out of the air and not being able to back them up with proper reasoning.


----------



## Guest107

SteelBlue05 said:


> I dont mean we can predict the future, thats my point, we cannot. But why bother just picking figures out of the air and not being able to back them up with proper reasoning.



You have given us no clear analysis that I can think of to justify prices remaining at their current levels .  If you cannot justify them   _then they are too low_...is that what you want me to believe


----------



## SteelBlue05

2Pack said:


> Yep, a fall back to pre bubble prices would be 50% . I am additionally assuming that more central areas will not give all of that back and will keep some of their post 2001 gains.
> 
> In 2001 a litre of Diesel was 55p or €0.65c now its nearly twice that. Commuting has a marginal cost you see.
> 
> Builders can only set realisable prices and if they are caught with inventory then tough.


 
Can you post a link to the post where you explain the "over 50%" reduction. Are you saying 50% because it conveniently matches the prices of property pre bubble? Or because you have a logical arguement on how this will happen? The former I think.


----------



## Guest107

ahh no. You justify their not falling at all, anywhere at all , first 

if you accept they can or may fall I'll take your hand and lead you to the next logical conclusion


----------



## whathome

SteelBlue05 said:


> you mentioned previously where "over 50%" reduction in price is going to happen.


 
I didn't mention that, I think you're thinking of someone else 



SteelBlue05 said:


> I say this because builders will not subsidise a person to buy a property below the build cost.


 
Agreed but desperate sellers of second hand property won't be concerned about original build cost.  If I'm selling a house, I don't care what it originally cost to build it - could have been 10k or 200k.


----------



## SteelBlue05

whathome said:


> I didn't mention that, I think you're thinking of someone else
> 
> Agreed but desperate sellers of second hand property won't be concerned about original build cost. If I'm selling a house, I don't care what it originally cost to build it - could have been 10k or 200k.


 
Yes, got your confused with 2Pack.

Desperate sellers wont be worried about build costs no, but they will be worried about their purchase price, so for a 50% reduction in these outer commuter towns where most property is relatively new I cant see a 50% reduction, i.e. sticky prices. 

And most property in these outter commute towns are 200-400k, a 50-60% reduction would bring prices way below the max affordability of most people, so why would this happen?

Prices will always be near the max affordability of most people.


----------



## conor_mc

SteelBlue05 said:


> I say this because builders will not subsidise a person to buy a property below the build cost.


 
Of course they would. I'm not saying that I agree with the predictions, but theoretically it is entirely possible that builders who have invested several million in a development would sell below cost to realise a 10% loss rather than an effective 100% loss by hanging onto the property.

As in any business, cash-flow is king. You don't hold onto stock indefinitely, especially in a falling market. You cut your losses asap. After all, whats a 10% loss on one development when you've made 10% on however many developments over the last 10 years!


----------



## SteelBlue05

2Pack said:


> ahh no. You justify their not falling at all, anywhere at all , first
> 
> if you accept they can or may fall I'll take your hand and lead you to the next logical conclusion


 
I am not justifying anything about property prices, just questioning your figures which you are unable to back up.

I fully accept prices can fall, or course.


----------



## whathome

SteelBlue05 said:


> Prices will always be near the max affordability of most people.


 
Only in a rising market.  In a falling market, many potential purchasers stay away even if they can afford to buy.  Alternatively they may wait so that a better property will drop into their price range. So in a falling market, property becomes more affordable - it doesn't always have to be at the limits of affordability.


----------



## CelloPoint

SteelBlue05 said:


> ...
> And most property in these outter commute towns are 200-400k, a 50-60% reduction would bring prices way below the max affordability of most people, so why would this happen?
> ...


Do you not see what you've just written? You've got to ask yourself why crappy generic houses in crap locations miles from Dublin *aren't* below the max affordability for average earners. It's called hysteria driven by FTBs and investors with 19th century inferiority complexes.

I rent in Dublin 6 and there's no way I would live in Rathoath/Balivor/Kinnegad or somewhere *even if someone paid me*. I'm deadly serious about this because it would take me at least 90 mins to get to work and I'd be surrounded by awful, shallow people with miserable lives. How depressing is that?


----------



## SteelBlue05

whathome said:


> Only in a rising market. In a falling market, many potential purchasers stay away even if they can afford to buy. Alternatively they may wait so that a better property will drop into their price range. So in a falling market, property becomes more affordable - it doesn't always have to be at the limits of affordability.


 
Ok yeah, it depends on location though. Good locations will always be at the limits of affordability.

But then for all the people who cant afford the good location they will be forced to look further outside the core areas and therefore the cycle starts again, keeping prices in the outter areas up again to limits of affordability.

Irish people want to buy property, we all wanted a car each years ago, now its a house, so unless that attitude changes....


----------



## conor_mc

SteelBlue05 said:


> Prices will always be near the max affordability of most people.


 
Disagree with that too, because it just assumes that everyone will say to themselves "Oh I can afford that, so I'll buy it now". They most certainly won't adopt that attitude in a falling market, the majority will wait til they're happy that property has stopped falling before jumping back in.

If there is a property crash, I reckon we're likely to see an overshoot on the way down before it rises back to a more reasonable level. At that point, I'd be inclined to agree with your statement above in general terms.

Only other point is that "affordability" will be significantly redefined once this era of incredibly cheap credit is brought to an end.


----------



## joe sod

phoenix_n said:


> Good read.I think my sentiment is similar to yours in that i spent a number of years in Australia and came back last year. I also sold my rented house at the beginning of this year. I too realised the substantial profiit i could realise and was not going to risk that on, from what i could see, an inflated asset. (Interesting that you should mention Gold. I am currently researching that (have invested the bulk of my proceeds elsewhere) but not so sure of the current price. If you could add more info in the gold thread i'd appreciate it)


 


phoenix_n said:


> Could someone explain how a buyer may reclaim a booking deposit.
> 
> My situation:
> 
> I currently have highest bidder (after the usual price war) on 2 properties which are due to close very soon.
> 
> To avoid any pitfalls (seller pulling out, survey not sound) i was going to put the booking deposit on both properties. (have the available cash due to my early sale of my house)
> 
> Is this advisable. It probably is not fair but then whichever seller is willing to sign (and all is well with house) first gets the deal.
> 
> What is involved in getting back my booking deposit and under what
> circumstances can i lose it.
> 
> Thanks for any info.


 
Looks like phoenix you have just recently turned bearish on property seen as you were going to use the proceeds to buy another house recently. Just getting you back for a tactic you pulled on me


----------



## SteelBlue05

CelloPoint said:


> Do you not see what you've just written? You've got to ask yourself why crappy generic houses in crap locations miles from Dublin *aren't* below the max affordability for average earners. It's called hysteria driven by FTBs and investors with 19th century inferiority complexes.
> 
> I rent in Dublin 6 and there's no way I would live in Rathoath/Balivor/Kinnegad or somewhere *even if someone paid me*. I'm deadly serious about this because it would take me at least 90 mins to get to work and I'd be surrounded by awful, shallow people with miserable lives. How depressing is that?


 
Yeah I agree with you, I am just trying to find out why these prices will reduce by over 50% as stated by 2Pack.


----------



## SteelBlue05

conor_mc said:


> Only other point is that "affordability" will be significantly redefined once this era of incredibly cheap credit is brought to an end.


 
Yes, but dont underestimate the potential for Mammy and Daddy to help out the sons and daughters even more than they currently are in order to get more buying power.


----------



## whathome

SteelBlue05 said:


> Irish people want to buy property, we all wanted a car each years ago, now its a house, so unless that attitude changes....


 
Facelifts are next, followed by zimmer-frames 

£49.95 now - bet they'll be 50% higher in 20 years!

[broken link removed]


----------



## Guest107

SteelBlue05 said:


> Yeah I agree with you, I am just trying to find out why these prices will reduce by over 50% as stated by 2Pack.


Just take 2packs word for it, good lad.


----------



## SteelBlue05

2Pack said:


> Just take 2packs word for it, good lad.


 
Nice one 2Pack, I knew you hadn't a clue what you were talking about.


----------



## Guest107

*Re:  towards the housing market?*



SteelBlue05 said:


> Nice one 2Pack, I knew



"Current public sentiment towards the housing market"

Q. How do I explain or quantify _sentiment _to one such as yourself.
A. I don't bother. I use the Ignore feature in my user control panel instaed 

Ciao


----------



## SteelBlue05

*Re: towards the housing market?*



2Pack said:


> "
> Q. How do I explain or quantify _sentiment _to one such as yourself.
> Ciao


 
Not asking you to explain sentiment, just give me some logic as to how you plucked out the "Over 50%" figure, Pleeeeeasse, I'll be forever grateful!


----------



## whathome

During a crash, PPR buyers are reluctant to get into the market.  The only thing that stops an entry-level market falling continuously is professional investors jumping back in.  When they see the opportunity to make money with a positive yield, they will start to buy again.  

I think this will happen at about 6% gross yield which would imply that prices would have to drop by 50% in real terms.

There's one reason anyway, I didn't even want to put a % drop prediction on this thread


----------



## room305

redo said:


> It would probably more realistic to claim that the prices would fall back to 2000/2001 levels.  However, that would probably still work out around 50%



I think that was the general reasoning behind the 50% figure. Market was slowing around then until Sept. 9/11 and Alan Greenspan brought a glorious era of cheap credit to our shores. It would bring mortgages back into closer alignment with rents and would fit the historical average of 3x-6x times annual salary.

So an average correction of 50% would be _logical_. Some places will fall more, some less. Markets tend to overshoot because they are driven by sentiment, so we are likely to see falls greater than that before a return to more normal levels.

Steelblue, I understand your frustration at some of the wild and ridiculous claims being thrown around by some of the bears here but that doesn't mean everyone should submit a doctoral thesis with every figure they use.


----------



## CelloPoint

SteelBlue05 said:


> Nice one 2Pack, I knew you hadn't a clue what you were talking about.



Maybe people are confusing 2Pack with some of my posts? I can easily see a 50% drop materialising in house prices (Over the next 3 years I can envisage even 3 and 4 bed suburban Dublin houses suffering such a blow, depending on economic conditions).

For now though, I can see a 40% drop in commuterland 1 bed flats by Christmas - these kinds of half-built developments will be the target of the grandious 'affordable housing scheme' in the run up to election time in 2007, with knockdown prices all round and a roof for every citizens' head, communist style.

And before I'm accused of making 'wild predictions with no factual grounding', please read through my previous posts by clicking on my username and you'll see a whole litany of reasons for why I believe this country is going down the tube (for fear of being accused of 'mind-numbingly repeating myself').


----------



## SteelBlue05

Thanks WhatHome, I can understand that, but I suppose the thing is you say "during a crash".... how to we get to a crash stage from here?

I understant the rising interest rates, rising costs etc but I cant see that causing a crash. Not without changing the attidudes and culture first.

Nevermind, there is way too much in this to consider and too may interlinked issues.. Lets see where we are in 12 months time I say.


----------



## phoenix_n

joe sod said:


> Looks like phoenix you have just recently turned bearish on property seen as you were going to use the proceeds to buy another house recently. Just getting you back for a tactic you pulled on me


 
Hilarious. Look i never thought i would do this on AAM but i'm going to put you on my ignore list (current tally 0) as i not interested in this. I suggest you do the same.


----------



## Duplex

The US market is a leading indicator I think. New build prices are down 22% since Feb on an annualised basis.





> Looking ahead, for the first time in nearly five years, quarterly housing permit issuance fell in the three months ending in June. Single-family building permits are off 12 percent from year-ago levels, and we could well see this trend accelerate in Wednesday's report for July.
> The decline is a belated reaction from homebuilders who have seen annualized new-home price declines of 22 percent since February -- the deepest slide since September 1990, when we were in a recession.


http://www.projo.com/business/content/projo_20060814_dimart14.1f8160f.html


----------



## Duplex

This is a report on a paper which examined the role sentiment had in the Hong Kong bust in the late 90's; prices fell by 57% from the top. I know Hong Kong is not a good comparison to Ireland but there are some parallels. 

3 page pdf
[broken link removed]


----------



## Persius

SteelBlue05 said:


> And most property in these outter commute towns are 200-400k, a 50-60% reduction would bring prices way below the max affordability of most people, so why would this happen?
> Prices will always be near the max affordability of most people.


 


whathome said:


> Only in a rising market. In a falling market, many potential purchasers stay away even if they can afford to buy. Alternatively they may wait so that a better property will drop into their price range. So in a falling market, property becomes more affordable - it doesn't always have to be at the limits of affordability.


I tend to agree with whathome here. Affordability won't just be based on present wages and present interest rates, but will take more account of possible future wages and interest rates. Rates are impossible to predict, but people will start asking themselves questions like "can I really count on my salary increasing significantly over the next 5 years"? Or, "what are the chances of being made redundant over the next 5 years"? Or, "if I am made redundant, what are the chances of me finding a new job with a comparible salary?" IMHO the third question is very important. I believe people experienced wage drop once finding a new job following previous downsizing waves in the US in the 90s. And I know one of the reasons Germans are reluctant to make such large purchases is the fear of not being able to find a comparibly paying job in the event of being layed off. In times of uncertainity people will be more reluctant to purchase if it means mortgaging out to the max.


Off topic I know, but just in case.


StoppedClock said:


> Great post langball but wouldn't go shouting about paying into SSIA while not normally resident in the state.


Wouldn't worry about that. If you were only out of the state for two years, then you remained _ordinarily resident_. That's all that's required to qualify for the government top-up of your SSIA (I'm sure a search of other threads on this site will clear this up).


----------



## StoppedClock

Persius said:


> Wouldn't worry about that. If you were only out of the state for two years, then you remained _ordinarily resident_. That's all that's required to qualify for the government top-up of your SSIA (I'm sure a search of other threads on this site will clear this up).


 
Thanks Perisus, I didn't realise it was two years,  I'm not feeling so clever now!!


----------



## Fergal

room305, are you still selling your home? 

What if the crash doesn't come

I heard that Dublin county council is predicting a severe shortage of land in 2012
Long term interest rates of about 5% will cool the market but hardly tip it over.
The IMF found that the economy is very strong and healthy but issued warnings about over-reliance on property (see article in this weeks Sunday Business Post).
When I bought back in the 80's, people hardly had enough cash to furnish the house.  Now houses are so affordable that people have enough cash to furnish them, buy new cars the same year, still maintain their lifestyle.  That was unthinkable back then.
What if Irish investors are generally very successful with their purchases abroad.  E.g. Their Polish apts bought at 50K are later worth 200K. That means that the you will always be competing with those with lots of cash to buy the type of place you want in Dublin.  So after selling you place in Dublin 21, your only option may be to buy again in Dublin 51.
I know many younger people that have refused to buy because they fear a crash.  They have been waiting for years.  There may be enough bargain hunters to soften any fall.
I also know several couples getting divorced.  They now need second houses.  How many of these cases will there be?
The SSIA money of 250 a month isn't even missed at the moment.  Once people aren't saving it, they can use the money to pay off a bigger mortage.  This will have more impact that the 20K they receive when it matures.
Isn't trying to sell short a very big gamble to take?  What do you think you may gain.  E.g. 60% chance that by 2 years from now, prices will be 30% less in a fairly desirable area of Dublin.  Also, what do you think the chances are that prices will be 30% higher 2 years from now?


----------



## Duplex

> What if Irish investors are generally very successful with their purchases abroad. E.g. Their Polish apts bought at 50K are later worth 200K. That means that the you will always be competing with those with lots of cash to buy the type of place you want in Dublin. So after selling you place in Dublin 21, your only option may be to buy again in Dublin 51.


 
Pardon me butting in, but this point is of interest to me. Prices are falling in Spain and Florida, prices in Croatia are static at best, Bulgaria is a no go for the sentient, Dubai is inexplicable. I think the foreign exploits of Irish 'investors' will only add to problems at home.




> The IMF found that the economy is very strong and healthy but issued warnings about over-reliance on property (see article in this weeks Sunday Business Post).


 
The Irish economy is heavily reliant on the continuation of the current unprecedented liquidity splurge instigated by the Federal Reserve post 9/11. This is coming to an end. If you can muster an argument, that supports a healthy US economy going forward I would be happy to here your views.


----------



## tententwenty

Fergal said:


> room305, are you still selling your home?
> 
> What if the crash doesn't come
> I heard that Dublin county council is predicting a severe shortage of land in 2012
> Long term interest rates of about 5% will cool the market but hardly tip it over.
> The IMF found that the economy is very strong and healthy but issued warnings about over-reliance on property (see article in this weeks Sunday Business Post).
> When I bought back in the 80's, people hardly had enough cash to furnish the house.  Now houses are so affordable that people have enough cash to furnish them, buy new cars the same year, still maintain their lifestyle.  That was unthinkable back then.
> What if Irish investors are generally very successful with their purchases abroad.  E.g. Their Polish apts bought at 50K are later worth 200K. That means that the you will always be competing with those with lots of cash to buy the type of place you want in Dublin.  So after selling you place in Dublin 21, your only option may be to buy again in Dublin 51.
> I know many younger people that have refused to buy because they fear a crash.  They have been waiting for years.  There may be enough bargain hunters to soften any fall.
> I also know several couples getting divorced.  They now need second houses.  How many of these cases will there be?
> The SSIA money of 250 a month isn't even missed at the moment.  Once people aren't saving it, they can use the money to pay off a bigger mortage.  This will have more impact that the 20K they receive when it matures.
> Isn't trying to sell short a very big gamble to take?  What do you think you may gain.  E.g. 60% chance that by 2 years from now, prices will be 30% less in a fairly desirable area of Dublin.  Also, what do you think the chances are that prices will be 30% higher 2 years from now?



DCC is probably predicating that on the massive influx of immigrants, who will be leaving once the property and construction well dries up.

Interest rates have historically gone a great deal higher than 5%.

The IMF predicted a sharp downturn of property in Ireland in late 2007. No soft landings there.

_Now houses are so affordable that people have enough cash to furnish them, buy new cars the same year, still maintain their lifestyle.

_I think you meant to say "enough credit". They'll be paying that off for another 35 years.
_
Their Polish apts bought at 50K are later worth 200K.

_Yes, and the Polish people love them for it. Some way or another, someone is going to have to end up living in that apartment, and they won't be able to pay that price.

The number of divorcees is miniscule.

What makes you think that the percentage of people currently paying out for SSIAs are going to turn around and lumber themselves with more long term debt?

Its high time that Irish people as a whole grasped that there are other and better investments than property. Talk about a one string fiddle.


----------



## soma

Fergal said:


> Now houses are so affordable that people have enough *cash* to furnish them, buy new cars the same year, still maintain their lifestyle.  That was unthinkable back then.



My guess is that in alot of these cases (and in a high percentage of FTB purchases) *cash* is not being used - *credit* is. There's a world of difference. 

_The annoying thing about credit is.. you have to pay for it with cash eventually.._


----------



## phoenix_n

Fergal said:


> room305, are you still selling your home?
> 
> What if the crash doesn't come
> 
> I heard that Dublin county council is predicting a severe shortage of land in 2012
> Long term interest rates of about 5% will cool the market but hardly tip it over.
> The IMF found that the economy is very strong and healthy but issued warnings about over-reliance on property (see article in this weeks Sunday Business Post).
> When I bought back in the 80's, people hardly had enough cash to furnish the house. Now houses are so affordable that people have enough cash to furnish them, buy new cars the same year, still maintain their lifestyle. That was unthinkable back then.
> What if Irish investors are generally very successful with their purchases abroad. E.g. Their Polish apts bought at 50K are later worth 200K. That means that the you will always be competing with those with lots of cash to buy the type of place you want in Dublin. So after selling you place in Dublin 21, your only option may be to buy again in Dublin 51.
> I know many younger people that have refused to buy because they fear a crash. They have been waiting for years. There may be enough bargain hunters to soften any fall.
> I also know several couples getting divorced. They now need second houses. How many of these cases will there be?
> The SSIA money of 250 a month isn't even missed at the moment. Once people aren't saving it, they can use the money to pay off a bigger mortage. This will have more impact that the 20K they receive when it matures.
> Isn't trying to sell short a very big gamble to take? What do you think you may gain. E.g. 60% chance that by 2 years from now, prices will be 30% less in a fairly desirable area of Dublin. Also, what do you think the chances are that prices will be 30% higher 2 years from now?


 
Very valid points. However, IMO, speculation in the market over the last 12 months have pushed the instrictic value of a house from its true value to that of a speculative value. And i think that is the key. When the speculative nature has ceased then its true value will return. Couple that with slight panic in the market and even that true value can even slip.


----------



## whathome

New buyers starting to get very worried.  From neighbours.ie:



"INTEREST RATES HAVE GONE UP TWICE NOW SINCE WE PURCHASED OUR HOUSE AND IT IS GETTING VERY WORRYING AT THIS STAGE"


----------



## Fergal

tententwenty said:


> DCC is probably predicating that on the massive influx of immigrants, who will be leaving once the property and construction well dries up. *Fergal*: Well that's your prediction, not DCC's.
> 
> Interest rates have historically gone a great deal higher than 5%. *Fergal:* Central bankers have never worked before to keep base inflation at 2%. The banks are offering long term fixed rate mortgage at 5%.
> 
> The IMF predicted a sharp downturn of property in Ireland in late 2007. No soft landings there. *Fergal*: The sharp downturn is from 15% pa to only 3% pa. aka soft landing. They are NOT predicting a fall in values let alone a crash.
> 
> _Now houses are so affordable that people have enough cash to furnish them, buy new cars the same year, still maintain their lifestyle._
> 
> I think you meant to say "enough credit". They'll be paying that off for another 35 years. *Fergal*: Credit has always been available, jobs were not.
> 
> _Their Polish apts bought at 50K are later worth 200K._
> 
> Yes, and the Polish people love them for it. Some way or another, someone is going to have to end up living in that apartment, and they won't be able to pay that price. *Fergal*: In 20 years time, wealth will transfer to Poland as it did to India and even China.
> 
> The number of divorcees is miniscule. *Fergal*: I have no reference to determine the number.
> 
> What makes you think that the percentage of people currently paying out for SSIAs are going to turn around and lumber themselves with more long term debt? *Fergal*: Because we're Irish and have always done so.
> 
> Its high time that Irish people as a whole grasped that there are other and better investments than property. Talk about a one string fiddle. *Fergal*: Well its playing a good tune so far!


----------



## walk2dewater

Fergal said:


> *When I bought back in the 80's,* people hardly had enough cash to furnish the house. Now houses are so affordable that people have enough cash to furnish them, buy new cars the same year, still maintain their lifestyle. That was unthinkable back then.


Hows the weather in Spain today?


----------



## ivuernis

whathome said:


> New buyers starting to get very worried. From neighbours.ie:


 
Speechless I am!


----------



## room305

Fergal said:


> room305, are you still selling your home?



_ Still selling and I will be happy to post a detailed summary of the experience once it's sold. _

What if the crash doesn't come

_I'm not selling so much in anticipation of a crash as a desire to be mobile and to not have a 35 year mortgage hanging over my head._
I heard that Dublin county council is predicting a severe shortage of land in 2012
_They should really start building up, shouldn't they? I imagine this is based on current building rates which are monstrously high and not sustainable._
Long term interest rates of about 5% will cool the market but hardly tip it over.
_Maybe, maybe not. Rates could go much, much higher than this though. It will certainly make people think twice before committing to a jumbo mortgage._
The IMF found that the economy is very strong and healthy but issued warnings about over-reliance on property (see article in this weeks Sunday Business Post).
_Does this not seem contradictory? Also there are many global factors which should be of concern._
When I bought back in the 80's, people hardly had enough cash to furnish the house.  Now houses are so affordable that people have enough cash to furnish them, buy new cars the same year, still maintain their lifestyle.  That was unthinkable back then.
_It's not so much that these things are 'affordable' per se, just that cheap credit has never been so easily available. Those days are rapidly running out._
What if Irish investors are generally very successful with their purchases abroad.  E.g. Their Polish apts bought at 50K are later worth 200K. That means that the you will always be competing with those with lots of cash to buy the type of place you want in Dublin.  So after selling you place in Dublin 21, your only option may be to buy again in Dublin 51.
_Fly-to-let investors should probably have just put their money on the horses. They don't seem to have put much thought into their investments and I'd be surprised if they appreciate much. I very much doubt they'll be able to sell them once the guaranteed rental period lapses._
I know many younger people that have refused to buy because they fear a crash.  They have been waiting for years.  There may be enough bargain hunters to soften any fall.
_Most people are afraid to buy a falling asset and overly eager to buy an appreciating asset. I cannot see that changing. Although, I wouldn't rule out a few 'dead cat bounces' on the way down._
I also know several couples getting divorced.  They now need second houses.  How many of these cases will there be?
_I dunno, in the US I think it is about 50%. However, once a couple divorces they will look to meet other people and eventually they may move in together again. I'm not sure if it will have a hugely significant effect._
The SSIA money of 250 a month isn't even missed at the moment.  Once people aren't saving it, they can use the money to pay off a bigger mortage.  This will have more impact that the 20K they receive when it matures.
_I'm missing it I can tell you! I also think a lot of people's mortgages are going to increase a lot more than the maximum SSIA amount.

_Isn't trying to sell short a very big gamble to take?  What do you think you may gain.  E.g. 60% chance that by 2 years from now, prices will be 30% less in a fairly desirable area of Dublin.  Also, what do you think the chances are that prices will be 30% higher 2 years from now?

_Selling is not without risk but it's not like I want to buy back the same house later (neither do I live in what could be called a desirable area of Dublin! ) Ideally, I could sell up and buy a bigger place but frankly, I couldn't afford to, not without financial assistance from my parents, which I don't want to ask for.

For the interim, myself and my girlfriend will be happy to rent. If it means we can never again afford to buy in Dublin, then so be it. We'll live elsewhere or continue to rent. I consider this less of a risk than havign the two of us stuck in a FTB home for the foreseeable future.
_


----------



## Fergal

All butt-ins welcome.



Duplex said:


> Pardon me butting in, but this point is of interest to me. Prices are falling in Spain and Florida, prices in Croatia are static at best, Bulgaria is a no go for the sentient, Dubai is inexplicable. I think the foreign exploits of Irish 'investors' will only add to problems at home. *Fergal*: You predict that a lot of investors will lose out. Perhaps.  But my point is that IF a lot of them gain substantially, THEN room305 will find it more difficult.  Its another factor in his risk calculation.
> 
> The Irish economy is heavily reliant on the continuation of the current unprecedented liquidity splurge instigated by the Federal Reserve post 9/11. This is coming to an end. If you can muster an argument, that supports a healthy US economy going forward I would be happy to here your views. *Fergal:* The Federal Reserve have stopped increasing interest rates. So I could argue that more expensive money is comming to an end. American economy may recover quickly when Bush is ejected.


----------



## Calina

That strikes me as naive.

Sorry - that was in response to the post on neighbours regarding interest rates being set in stone on date of draw down which I think is a bit naive. Sheesh this thread is busy today.


----------



## walk2dewater

ivuernis said:


> Speechless I am!


 
Jay-zeus, and I get schtick for calling them saps!


----------



## phoenix_n

The above posts from neighbours reminds me of the below




langball said:


> [broken link removed]


 
*Stage 3: Euphoria*

We have all missed booms. A wise investor knows to wait for the next boom, rather than jump in if they've missed the current one. But when acceleration turns to euphoria, the greater fools rush in.


----------



## Guest107

as for this fella 



I smell a junior investor flipper type chappie


----------



## ivuernis

walk2dewater said:


> Jay-zeus, and I get schtick for calling them saps!


I'm still re-reading it because I can't believe what my eyes are telling me.


----------



## Fergal

Good answers room305!  You've thought it through and I guess you're right to go with your gut feeling. 

So good luck to you (though it may be bad luck for me, what the hell - easy come easy go!)

PS Very amusing Walk2DeWater


----------



## owenm

"Sticky prices" might mean "No prices", i.e. a 50% drop means an owner cannot sell because this doesn't cover the mortgage outstanding. I pity anyone who recently bought a starter home to get on the ladder with a view to trading up - don't see that plan working.

These 'stuck' houses will not be 'making the market', investors who can sell at -50% will.

What scares me most is the vicious circle when building slows down, jcb drivers, bricklayers, plumbers, electricians, tilers, carpenters, readymix drivers, plasterers, painters, window fitters, roofers, surveyors, architects, builders providers, cement factory's, timber importers, window manufacturers, DIY outlets, curtain makers, electrical resellers, furniture shops, lighting shops, carpet shops, tile outlets....... 

How many of you know anyone who does one of these for a living? 

They all spend money in pubs, travel agents, bookmakers, butchers, car showhouses, the local spar, petrol stations, antique shops, Blockbuster, toy shops, mothercare, argos, HMV, Tesco.... 

The old adage: We employ ourselves, is illustrated here. Their is nothing to relish in a fall in prices. To those of you who held off buying anticipating a crash would do well to remember that when money is cheap houses are dear, when houses are dear........


----------



## whathome

ivuernis said:


> I'm still re-reading it because I can't believe what my eyes are telling me.


 
...and these people are spending €300,000 to €500,000.

I know I'll get shot down for this but I feel sorry for them to be honest.


----------



## Howitzer

ivuernis said:


> I'm still re-reading it because I can't believe what my eyes are telling me.


 


whathome said:


> ...and these people are spending €300,000 to €500,000.
> 
> I know I'll get shot down for this but I feel sorry for them to be honest.


 


walk2dewater said:


> Jay-zeus, and I get schtick for calling them saps!


 


2Pack said:


> as for this fella
> 
> 
> 
> I smell a junior investor flipper type chappie


 
This is actually a commonly held misconception. A quick browse through the Mortgages section of AAM will throw up numerous threads on this and suggestions on how to effectively lock in the current rate (drawing down "the deposit" early for instance).

Just becasuse it's obvious to you doesn't mean it's obvious to everyone else and you're only fooling yourself if you think this is indicative of lunatics running the asylum. There hadn't been an increase in rates in 5 YEARS prior to this year so it doesn't surprise me that issues like this are alien to most current buyers, or indeed anyone else who's bought in the last 5 years, friends, family, etc, who most people would rely on for advise on such subjects.

Very patronising.


----------



## CelloPoint

That guy who was eager to sign so as to 'lock in the rate' was a right idiot - he was probably fed a pack of lies by god knows who.

This is my absolute favourite! Really brightened up my rainy day...



I can't believe people are so naive - only one word for 'em - *saps*!


----------



## Calina

This for me is the key point. The ramifications of a property crash extend far beyond the simple act of buying houses. 

However, that, in itself, is no reason for allowing property prices to grow insanely for no good reason that we can all equally rip each other off. The point is, a lot of people have bought starter homes which they will go mad in inside two years - but to trade up, they need to exploit someone further down the chain than themselves. And exploit is the world. One bedroomed apartments - sorry - tiny one bedroomed apartments in Swords are commanding 285KE. This is not a rational price for that type of property either from the point of view of living in it or trying to command rent from it. 

What would be healthier is a sensible housing price profile (say six times average salary rather than 11 times average salary). Trying to avoid a correction because it will be bad is only delaying the inevitable, and I honestly believe that the longer that the current situation plays out, the worse the backlash will be. It's like an elastic band in that respect. 

There are two primary ways for housing prices to reach some sensible balance: either house prices come down significantly, or salaries go up significantly. Neither is good, but I strongly suspect that the economy would be better off if houses prices fell because otherwise, we'll price our labour out of the market and be screwed either which way. At least if we manage to keep salaries someway competitive we might hang on to some reasonably low unemployment. Push salaries up and we can definitely look forward to doubling unemployment.


----------



## binman

whathome said:


> New buyers starting to get very worried. From neighbours.ie:


 
One of the comments on that thread is absolutely stunning in it's naivety:



			
				from neighbours.ie said:
			
		

> Yes. Regardless of whether you choose a fixed or variable rate mortgage it is the rate on the day your loan cheque is drawn down that determines your monthly repayments. I think that once a contract with any bank is signed and mortgage repayments agreed that this shouldnt change and your mortgage repayments should reflect the rate on the date that the contract was signed. We weren't aware of this until we received an amended contract in the post showing an increase in our monthly repayments due to an interest rate rise. Which is why the delays in snagging and moving into Adamstown is costing us more each month because we are vulnerable to any rate increases until we are able to close the deals on our properties.


 
Have I read that correctly? Does the person who posted that really think that their repayments are fixed for the duration of the loan? Are the general public really that unaware of how finances work?

If so, some people are in for a very rude awakening. Now, I wonder who they'll blame? The Banks? The Government? Some other culpable party? Certainly not themselves of course. 

I'm not as bearish as many on here, but if this level of knowledge is typical then we're in for a rough ride.

EDIT  Ach, curses, beaten to the point again...


----------



## SteelBlue05

CelloPoint said:


> That guy who was eager to sign so as to 'lock in the rate' was a right idiot - he was probably fed a pack of lies by god knows who.
> 
> This is my absolute favourite! Really brightened up my rainy day...
> 
> 
> 
> I can't believe people are so naive - only one word for 'em - *saps*!


 
I really didnt think there were people buying places like this. The ol' property market will be fine if enough of these people are around to keep buying because "someone in the know" told them to buy.


----------



## CelloPoint

btw, well done to whoever spotted the saps on neighbours.ie! It's added petrol to the bears' fire!


----------



## whathome

Howitzer said:


> Very patronising.


 
People spending hundreds of thousands of euro on anything should know exactly what they are getting into.  It's not like they're just starting off with a small 10k loan - it's a massive commitment.  Due to a lack of education in this area many people are blindly heading into a financial nightmare.  Without being patronising, I genuinely feel sorry for them.


----------



## Howitzer

binman said:


> Have I read that correctly? Does the person who posted that really think that their repayments are fixed for the duration of the loan? Are the general public really that unaware of how finances work?


 
No, you have not read it correctly.

The person agrees a fixed mortgage in, say, May and draws down in August after snagging. He expected the rate to be the same as what was agreed when he signed the mortgage contract with the bank, instead the fixed rate changed in the interim. 

This is a very common issue and one which hasn't arisen atall, to anyone, in Ireland in 5 years until this year.

Has anyone read that thread correctly or are youse just dying to jump on the bandwagon?


----------



## whathome

Howitzer said:


> The person agrees a fixed mortgage in, say, May and draws down in August after snagging. He expected the rate to be the same as what was agreed when he signed the mortgage contract with the bank, instead the fixed rate changed in the interim.


 
Howitzer, I think you may have it wrong. Here's the key sentence that people seem to be picking up on:
"Regardless of whether you choose a fixed *or variable* rate mortgage it is the rate on the day your loan cheque is drawn down that determines your monthly repayments"


----------



## conor_mc

Howitzer said:


> No, you have not read it correctly.
> 
> The person agrees a fixed mortgage in, say, May and draws down in August after snagging. He expected the rate to be the same as what was agreed when he signed the mortgage contract with the bank, instead the fixed rate changed in the interim.
> 
> This is a very common issue and one which hasn't arisen atall, to anyone, in Ireland in 5 years until this year.
> 
> Has anyone read that thread correctly or are youse just dying to jump on the bandwagon?


 
That's the way I read it too Howitzer.


----------



## gearoidmm

owenm said:


> What scares me most is the vicious circle when building slows down, jcb drivers, bricklayers, plumbers, electricians, tilers, carpenters, readymix drivers, plasterers, painters, window fitters, roofers, surveyors, architects, builders providers, cement factory's, timber importers, window manufacturers, DIY outlets, curtain makers, electrical resellers, furniture shops, lighting shops, carpet shops, tile outlets.......
> 
> How many of you know anyone who does one of these for a living?
> 
> They all spend money in pubs, travel agents, bookmakers, butchers, car showhouses, the local spar, petrol stations, antique shops, Blockbuster, toy shops, mothercare, argos, HMV, Tesco....
> 
> The old adage: We employ ourselves, is illustrated here. Their is nothing to relish in a fall in prices. To those of you who held off buying anticipating a crash would do well to remember that when money is cheap houses are dear, when houses are dear........



Got the new issue of the Golden Pages yesterday; 16 pages of attic conversion companies, 15 pages of electricians, 15 pages of conservatories.... all paid for with cheap credit and remortgages.  House prices don't have to drop for the economy to go pear-shaped.


----------



## Afuera

gearoidmm said:


> Got the new issue of the Golden Pages yesterday; 16 pages of attic conversion companies, 15 pages of electricians, 15 pages of conservatories.... all paid for with cheap credit and remortgages. House prices don't have to drop for the economy to go pear-shaped.


 
Funny you should mention those attic conversion companies and conservatory builders. If prices fail to rise or even fall a little (thus breaking the mytical property ladder) these guys might be the only resort for growing families unable to move out of their "starter" homes.

I think the banks and estate agents are in a much more precarious situation.


----------



## tententwenty

*Fergal*: _Well that's your prediction, not DCC's._

I said Predicated, not predicted. When you learn the difference, come back and we'll debate the point.

*Fergal:* _Central bankers have never worked before to keep base inflation at 2%. The banks are offering long term fixed rate mortgage at 5%._

The European Central Bank is RAISING INTEREST RATES TO COMBAT INFLATION. Thats the work they are doing to keep inflation at 2%. Your magical long term fixed mortgages are for 3 or 5 years. Thats not long term on a 35 year mortgage.

*Fergal*: _The sharp downturn is from 15% pa to only 3% pa. aka soft landing. They are NOT predicting a fall in values let alone a crash._

Perhaps you would like to support that with a link?

*Fergal*: _Credit has always been available, jobs were not._

Did you even read the thread? This much credit has never been available, due to low interest rates. Or are people buying houses in cash from their savings where you live?

*Fergal*: _In 20 years time, wealth will transfer to Poland as it did to India and even China._

India and China are still third world countries. They have a fair bit of transferring yet to do, I'm sorry to tell you.

*Fergal*: _I have no reference to determine the number. _

What about a guess? And people breaking up find new partners and move in with them. Negligible.

*Fergal*: _Because we're Irish and have always done so._

No harm to you Fergal, but thats the stupidest thing I've read so far on this thread. Sure didn't saint patrick drive out all the property crashes? Ireland hasn't even existed as a state for a century, how can we have these long term habits you're talking about? This is the kind of rubbish that caused the bubble in the first place. Don't forget, Ireland is different! 

*Fergal*: _Well its playing a good tune so far!_

I wonder what kind of song you'll be singing when it snaps?


----------



## joe sod

phoenix_n said:


> Very valid points. However, IMO, speculation in the market over the last 12 months have pushed the instrictic value of a house from its true value to that of a speculative value. And i think that is the key. When the speculative nature has ceased then its true value will return. Couple that with slight panic in the market and even that true value can even slip.


 
From your first postings I see you were one of the speculators  just a few months ago or at least tried to be. Speculation hasn't just driven the market in the last 12 months its driven for the last 5 years. You've gained from the housing boom but more by pure luck than design.


----------



## whathome

Might be a new home price drop from Hooke and MacDonald

*1 Bed apartments in Santry*

Old price (cached 24th May) : €360,000 


New price today : €350,000 - *Reduced by €10,000*
[broken link removed]
also shown here: 

I promised not to list anymore second hand price drops because they were becoming so common that it was boring....but price drops on new developments are very interesting IMO.


----------



## liteweight

whathome said:


> This might be somewhat controversial....
> 
> Here is a new home price drop from Hooke and MacDonald
> 
> *1 Bed apartments in Santry*
> 
> Old price (cached 24th May) : €360,000
> 
> 
> New price today : €350,000 - *Reduced by €10,000*
> [broken link removed]
> 
> I promised not to list anymore second hand price drops because they were becoming so common that it was boring....but price drops on new developments are very interesting IMO.



Don't think you're right here Whathome!! If you go into your first link, scroll up to Google cache, you'll find 'view current page'...the property is now priced at 375K not 360K...a rise of 15K.

Your second link is on MyHome and is not necessarily the same apartment. Apartments in this development (which is very popular BTW and in a great location) vary in size. It's also possible that this particular apartment was bought off plans and the vendor is trying to 'flip' it.


----------



## whathome

liteweight said:


> Don't think you're right here Whathome!! If you go into your first link, scroll up to Google cache, you'll find 'view current page'...the property is now priced at 375K not 360K


You might be looking at the price for a 2 bed 



liteweight said:


> Your second link is on MyHome and is not necessarily the same apartment. Apartments in this development (which is very popular BTW and in a great location) vary in size. It's also possible that this particular apartment was bought off plans and the vendor is trying to 'flip' it.


 
You might be right liteweight but it's not a flipper, even the H&MD site says 350k


----------



## gearoidmm

liteweight said:


> Don't think you're right here Whathome!! If you go into your first link, scroll up to Google cache, you'll find 'view current page'...the property is now priced at 375K not 360K...a rise of 15K.





> *From the current page
> 
> *Number of Bedrooms: 1 Prices from: € 350,000
> Number of Bedrooms: 2 Prices from: € 375,000


----------



## liteweight

Apologies Whathome, you're right, I was looking at a 2bed! I still wouldn't give too much credence to it though. The last one 360K might have been for a larger apartment in one phase and the 350K for a poky one in the next. H&MD do sell on properties for people, even when the developer hasn't sold out yet!!

As luck would have it, I made enquiries on these apartments recently. You'd be lucky to get one at either of the above prices, unless it's next to the lift or some such. Wasn't interested as ......wait for it.......yield would be too low!!


----------



## whathome

liteweight said:


> Apologies Whathome, you're right, I was looking at a 2bed! I still wouldn't give too much credence to it though. The last one 360K might have been for a larger apartment in one phase and the 350K for a poky one in the next. H&MD do sell on properties for people, even when the developer hasn't sold out yet!!
> 
> As luck would have it, I made enquiries on these apartments recently. You'd be lucky to get one at either of the above prices, unless it's next to the lift or some such. Wasn't interested as ......wait for it.......yield would be too low!!


 
Agreed - they are in a great location, unless you're a criminal - very near the garda station.  You're correct, could be a smaller apartment although I thought all phases of Milners Square had been released.


----------



## phoenix_n

room305 said:


> _ Still selling and I will be happy to post a detailed summary of the experience once it's sold. _


 
You probably are in a better position than many posters here to gauge somewhat the sentiment of the current market. What impression did your EA give you? Have you been getting many queries ? 
I understand you may not want to divulge much but have you learned more since beginning the process of selling ?


----------



## Guest107

CNN Reports

Home Price Deep Freeze 

USA Wide. And as they peaked about a year before we did (I am calling our peak for March/April 2006) we will be broadly in the same situation by this time next year.

The worst localised decline in a _city in the US _over that year was 11% but what about commuter belts for those cities. They are not surveyed at all. 

Must research further !


----------



## whathome

I noticed a lot of asking price drops in Rathfarnam lately. Many of the houses towards the end of the myhome search have seen substantial price drops. One house caught my attention, it shows how speculators and amateur property "developers" can get caught in a weakening market.

This couple bought a house in Rathfarnam for 1.15M in June last year. They spent six months and €500,000 renovating it along with €103,500 in stamp duty. So a total spend of about *€1,753,500*. It failed to sell at auction in May and following the auction it was quoting €2.1M

Their story is told in this article:
http://www.propertyinvesting.net/cgi-script/csNews/csNews.cgi?database=default.db3744&command=viewonex

And now it has dropped to *€1,750,000* on myhome. 
[broken link removed]=

So after six months of what sounds like a horrific renovation project it's looking like a zero return. If it sells! If market sentiment had not changed , rising prices would have saved them but it's no longer a one-way bet.


----------



## Guest107

Good find whathome , they were selling it private treaty for €1.9m in July thru sherryfitz (according to your article) so its really dropped less than 10% . Never mind auction guides


----------



## whathome

2Pack said:


> Good find whathome , they were selling it private treaty for €1.9m in July thru sherryfitz (according to your article) so its really dropped less than 10% . Never mind auction guides


 
Yeah, auction guides are a joke but this wasn't the AMV
After it was withdrawn from the auction in May, it was quoting €2.1M (private treaty)
Look under Dublin 16:
[broken link removed]

must have dropped to 1.9M before dropping further to 1.75M


----------



## beattie

whathome said:


> I noticed a lot of asking price drops in Rathfarnam lately. Many of the houses towards the end of the myhome search have seen substantial price drops. One house caught my attention, it shows how speculators and amateur property "developers" can get caught in a weakening market.
> 
> This couple bought a house in Rathfarnam for 1.15M in June last year. They spent six months and €500,000 renovating it along with €103,500 in stamp duty. So a total spend of about *€1,753,500*. It failed to sell at auction in May and following the auction it was quoting €2.1M
> 
> Their story is told in this article:
> http://www.propertyinvesting.net/cgi-script/csNews/csNews.cgi?database=default.db3744&command=viewonex
> 
> And now it has dropped to *€1,750,000* on myhome.
> [broken link removed]=
> 
> So after six months of what sounds like a horrific renovation project it's looking like a zero return. If it sells! If market sentiment had not changed , rising prices would have saved them but it's no longer a one-way bet.


 
That must be one hell of a monthly repayment going out the door, I don't think that they will be in a position to hold out much longer and could have to drop the price again just to get a buyer


----------



## phoenix_n

whathome said:


> I noticed a lot of asking price drops in Rathfarnam lately. Many of the houses towards the end of the myhome search have seen substantial price drops. One house caught my attention, it shows how speculators and amateur property "developers" can get caught in a weakening market.
> 
> This couple bought a house in Rathfarnam for 1.15M in June last year. They spent six months and €500,000 renovating it along with €103,500 in stamp duty. So a total spend of about *€1,753,500*. It failed to sell at auction in May and following the auction it was quoting €2.1M
> 
> Their story is told in this article:
> http://www.propertyinvesting.net/cgi-script/csNews/csNews.cgi?database=default.db3744&command=viewonex
> 
> And now it has dropped to *€1,750,000* on myhome.
> [broken link removed]=
> 
> So after six months of what sounds like a horrific renovation project it's looking like a zero return. If it sells! If market sentiment had not changed , rising prices would have saved them but it's no longer a one-way bet.


 
Great work Whathome. Please continue. Remember individual drops in asking prices is not in themselves significant but when seen to be a part of a trend it is very significant.


----------



## StoppedClock

_Sherry FitzGerald withdrew Dun Chuilinn on Cruagh Road, Rockbrook in Rathfarnham at €1.925 million and is now quoting €2.1million.
_
If they actually had a bidder at 1.95 I wouldn't be too pleased with Sherry Fitz advice to withdraw it, could have cost them 150k


----------



## whathome

phoenix_n said:


> Great work Whathome. Please continue. Remember individual drops in asking prices is not in themselves significant but when seen to be a part of a trend it is very significant.


 
Yeah, I don't want to list them all - will drive people mad but if you do a myhome search on rathfarnam and look at the last few pages, most of those properties have dropped in price.


----------



## gearoidmm

Just because it's quoting 1.75 doesn't mean that they'll agree to sell it for that much.  The original guide price was 600,000 and they ended up spending 1.15 million.  given the costs of renovation, time involved and interest payments, they are already making a significan loss if they sell it for that much


----------



## whathome

gearoidmm said:


> Just because it's quoting 1.75 doesn't mean that they'll agree to sell it for that much.


 
They may have no choice.  They will only be able to sell it for an amount that someone is prepared to pay.


----------



## Guest107

Their bank manager may make them


----------



## Remix

Great quotes from the estate agent article:

_"There’s a new player in the property market who will have you dripping with envy: the twentysomething property developer"_

or 

_"they stand to make a healthy profit from their six-month slog"_

Poor young uns. Auctioneers, banks & builders took their money as easy as taking candy from a baby.

Keep up the great work whathome!


----------



## exile

Remix said:


> Great quotes from the estate agent article:
> 
> _"There’s a new player in the property market who will have you dripping with envy: the twentysomething property developer"_
> 
> or
> 
> _"they stand to make a healthy profit from their six-month slog"_
> 
> Poor young uns. Auctioneers, banks & builders took their money as easy as taking candy from a baby.
> 
> Keep up the great work whathome!



Did some bank really loan them that much on the assumption that it was a fairly short-term investment?

600K was "affordable" for them but they ended up bidding 1.15m?  Then they had another 250K lying around to rennovate but ended up spending 500K?  Methinks there are some other players not mentioned in the article.


----------



## beattie

gearoidmm said:


> Just because it's quoting 1.75 doesn't mean that they'll agree to sell it for that much. The original guide price was 600,000 and they ended up spending 1.15 million. given the costs of renovation, time involved and interest payments, they are already making a significan loss if they sell it for that much


 
The market doesn't care what price you paid for an asset


----------



## gearoidmm

beattie said:


> The market doesn't care what price you paid for an asset


 
Agreed, but they rejected an offer of 1.9million only a month ago.  I wouldn't read too much into the asking price, it could be a teaser - the sale price would be much more indicative.


----------



## whathome

gearoidmm said:


> Agreed, but they rejected an offer of 1.9million only a month ago. I wouldn't read too much into the asking price, it could be a teaser - the sale price would be much more indicative.


 
It was withdrawn at the auction in May not July. The market has changed since then IMO. 
It's wilting on the market for months, it doesn't look like any teaser is working.


----------



## Raskolnikov

whathome said:


> I noticed a lot of asking price drops in Rathfarnam lately. Many of the houses towards the end of the myhome search have seen substantial price drops. One house caught my attention, it shows how speculators and amateur property "developers" can get caught in a weakening market.
> 
> This couple bought a house in Rathfarnam for 1.15M in June last year. They spent six months and €500,000 renovating it along with €103,500 in stamp duty. So a total spend of about *€1,753,500*. It failed to sell at auction in May and following the auction it was quoting €2.1M
> 
> Their story is told in this article:
> http://www.propertyinvesting.net/cgi-script/csNews/csNews.cgi?database=default.db3744&command=viewonex
> 
> And now it has dropped to *€1,750,000* on myhome.
> [broken link removed]=
> 
> So after six months of what sounds like a horrific renovation project it's looking like a zero return. If it sells! If market sentiment had not changed , rising prices would have saved them but it's no longer a one-way bet.


You're forgetting about solictor and estate agent fees, so you can probably shave another €50,000-€60,000 off the proposed selling price. 

Like exile said, there must be someone backing this couple up, there's not a hope in hell a beautician and electrician in their mid-twenties could afford to spend €1,753,000 on a property.


----------



## Guest107

well the banks have been somewhat _too _acommodating of late  otherwise this thread would never have lasted as long as it did would it  .


----------



## Raskolnikov

2Pack said:


> well the banks have been somewhat _too _acommodating of late otherwise this thread would never have lasted as long as it did would it .


Read the article again. They had a mortgage on _each_ of their homes. They would have sent their debt easily into +€2,000,000 territory.

Frightening really.


----------



## Guest107

Raskolnikov said:


> Read the article again. They had a mortgage on _each_ of their homes. They would have sent their debt easily into +€2,000,000 territory.
> 
> Frightening really.



From that article on the previous page . 



> *The €600,000 guide price was also affordable for the couple, as long as they disposed of their Stillorgan base.* “We were the last people to view the house and the auction was on a few days later, so we decided to go along, more in hope than expectation,” says Duggan.
> 
> 
> We were by far the youngest people there and I’m sure a few jaws dropped when we started to bid,” she says.
> 
> *The steely pair’s resolve was tested when bidding eclipsed the €1m mark, but they kept their composure and secured the house for €1.15m.* “I turned completely pale when our bid was accepted,” says Duggan.
> 
> *The young couple suddenly found themselves with two mortgages and two homes, one of them in a perilous state of neglect. *“We’re both quite impulsive and I think that if we had had more time to really weigh up the decision, we might have got cold feet. Our parents were supportive, but were obviously worried that we were getting in over our heads,” says Hughes.


As they went to auction with a _good plan_ namely  to buy for €600k and fix up for €250k I would dearly love to know who approved the _business plan _to buy for €1.15m and fix up for €500k . The money came from somewhere !

Thats an overshoot of €800k  of borrowed money or almost 100% of their initial budget .

€2m sounds right but they have no negative equity at this moment in time as they bought in Stilllorgan years ago.


----------



## Raskolnikov

2Pack said:


> From that article on the previous page .
> 
> 
> As they went to auction with a _good plan_ namely to buy for €600k and fix up for €250k I would dearly love to know who approved the _business plan _to buy for €1.15m and fix up for €500k . The money came from somewhere !
> 
> Thats an overshoot of €800k  of borrowed money or almost 100% of their initial budget .
> 
> €2m sounds right but they have no negative equity at this moment in time as they bought in Stilllorgan years ago.


Touché.


2Pack said:


> The money came from somewhere !


Bank of Mam and Dad.


----------



## JohnG

Very slightly off topic.....

Imagine they sold at the breakeven number of about €1.8m.

What would the PTSB House Price Index say?  Would it be included as a 56% increase in 12 months???

When you think about the amounts spent on extensions / attic conversions / new kitchens etc. you would wonder how much the price increases of recent years are overstated.


----------



## phoenix_n

Calina said:


> One bedroomed apartments - sorry - tiny one bedroomed apartments in Swords are commanding 285KE. This is not a rational price for that type of property either from the point of view of living in it or trying to command rent from it.


 
or 265KE for this 1 bed in donabate


----------



## renter

Have been following this debate for the last week or so here, just decided to join this forum today. Here's our story...
Bought a few years ago in Dublin suburb for typical reasons - in a steady relationship, rent is dead money, everybody needs a place to live, prices likely to keep going up, etc. Decided to cut back on unafforable luxuries early on - sold new car, got rid of loan, bought 1 second hand car instead of having 2, used public transport. Had planned to stay for 3-5 years in house before moving out of Dublin for family/quality of life reasons if work allowed same. 

It was looking like we would move/sell in 2007, hoping that house prices would stay fairly high as last of SSIA money becomes available. However got a little spooked recently that house prices might fall, so decided to sell 3 bed semi. Was on the market for only a few weeks after the initial price was set by the EA a bit lower than typical ones in the area to generate interest. Probably had about 10 viewers and 2 serious bidders which brought price close to other ones in the area, so we decided to take offer fairly quickly. Have recently been bidding on a property outside Dublin which would require building work. We feel that the current bid price is a little overvalued because there is another keen bidder also. As we learned with our sale, all it takes are 2 keen bidders to get price up.
In the meantime, we are going to rent for a while in Dublin while we plan our next move.

Some things heard directly or indirectly from 4 different people in property business recently - 1. "market softening last few months, sell immediately"; 2. "would have >10 seriously interested people in a house a few months ago, now only 2 or 3 typically"; 3. "market still strong"; 4. "if market does fall, apartments outside M50 will be hit worst".

IMO, the public sentiment is 50/50 re house prices depending on personal cirumstances. Reckon that under 30-35's are generally more optimistic like we were a few years ago buying for the first time and hoping prices keep rising. Maybe it's because they have'nt seen any hard times yet in Ireland. Approaching middle age now, it seems is when a broad mind exchanges places with a narrow waist. Anyway, IMO, it will take a few months to see hard statistics like falling prices in the PTSB/ESRI house price index before the more optimistic people start to turn.

George Lee of RTE had an interesting programme back a few months ago called BOOM (I think) about the rise in Irish economy and personal debt, etc. over the last number of years. Seemed to be warning the good times have to end eventually as many people have said over the years. He may well be scripting for a new programme called BOOM OVER by the end of 2006. Or maybe it will be a damp morning in November when one is stuck in the M50 roadworks traffic after seeing effect of probable October rise in interest rates that many more people might see that this present scenario is not sustainable. On the otherhand SSIAs might have a smoothing effect for the likely downturn.


----------



## bren2002

This thread is a fascinating read.


----------



## phoenix_n

renter said:


> ..... However got a little spooked recently that house prices might fall, so decided to sell 3 bed semi.


 
Since you sold have you noticed any prices changes (increase/decrease) in your suburb ?


----------



## renter

Prices seem to be fairly static since selling in last few weeks. There are plenty of houses still for sale which were on the market before we decided to sell ours. Vendors might be holding out to see what happens in September but I get the impression from glancing at the myhome map for the area that there is more availability than previously. Again, this is only an impression, so best to wait to see actual numbers and prices in next few months.


----------



## phoenix_n

Did you find it hard to go back to renting or were you just happy to 'bank' the money and wait your next move.


----------



## Firefly

Slightly off topic...

As the prices climb ever higher people seem to be treating the whole thing like monopoly money..ie the price bears no resemblence with normality at all and people just say "sure it's only another 10 grand"...can we blame the intro of the euro for this..ie in Old money an apt at IR180 becomes 
230k in euro.

Firefly


----------



## renter

Looking around for house to rent at the moment. Feels inconvenient to have to move so much stuff but not as inconvenient to potentially lose money in next while. Although house prices could still rise too! 
We are wondering will rents fall or are landlords choosy who they take in. Went to see nice house almost 2 weeks ago. Other people there also for viewing. Was'nt suitable for our needs. Expected it to be snapped up but it is still advertised for rent on daft. Also, a couple of other landlords sound very accommodating for houses we are viewing next week. We did'nt mention we sold house but they seemed to be very flexible with viewing time and length of lease.


----------



## bearishbull

whathome said:


> I noticed a lot of asking price drops in Rathfarnam lately. Many of the houses towards the end of the myhome search have seen substantial price drops. One house caught my attention, it shows how speculators and amateur property "developers" can get caught in a weakening market.
> 
> This couple bought a house in Rathfarnam for 1.15M in June last year. They spent six months and €500,000 renovating it along with €103,500 in stamp duty. So a total spend of about *€1,753,500*. It failed to sell at auction in May and following the auction it was quoting €2.1M
> 
> Their story is told in this article:
> http://www.propertyinvesting.net/cgi-script/csNews/csNews.cgi?database=default.db3744&command=viewonex
> 
> And now it has dropped to *€1,750,000* on myhome.
> [broken link removed]=
> 
> So after six months of what sounds like a horrific renovation project it's looking like a zero return. If it sells! If market sentiment had not changed , rising prices would have saved them but it's no longer a one-way bet.


 Stamp duty?? also interest on 1.75million for a year? The amount of their own time they spent on the project.

If these "property developers" had done nothing to the property and sold it in march/april this year they would have made a fair bit of profit. Looking at a loss now unless theres a price spurt  at higher end of market in next few months. The inter


----------



## CelloPoint

On daft figures... (yes, I know)

I thought that increasing inventory from the daft site would be the first obvious sign of edginess in the market.

I have no doubt that those running the site are only all too aware of this aswell - especially when you consider that half the bears on here are watching this figure. Were I in charge of daft, I would keep the number of houses online for sale at a steady level, whilst increasing the turnover of the number of houses, for fear of sparking a 'mad rush'. As people get more desperate to sell, they don't mind paying the advertising fee more regularly even though it's only for a short period of time.

Anyone know how daft.ie sales work? How many days does your property stay online for? Is it random? Or is it until the house is sold?


----------



## phoenix_n

I can see also that alot of investors rental properties are coming onto the market. Propect hill in finglas (glasnevin if ur a snob) are now coming on the market and are advertised for 1200euros a month for 2 bed. I'd bet that you'd get it for a grand.


----------



## ninsaga

CelloPoint said:


> On daft figures... (yes, I know)
> 
> I thought that increasing inventory from the daft site would be the first obvious sign of edginess in the market.
> 
> I have no doubt that those running the site are only all too aware of this aswell - especially when you consider that half the bears on here are watching this figure. Were I in charge of daft, I would keep the number of houses online for sale at a steady level, whilst increasing the turnover of the number of houses, for fear of sparking a 'mad rush'. As people get more desperate to sell, they don't mind paying the advertising fee more regularly even though it's only for a short period of time.
> 
> Anyone know how daft.ie sales work? How many days does your property stay online for? Is it random? Or is it until the house is sold?




Please read prev postings on why daft  figures cannot/should not be used in terms of sale etc etc.

with regard to the posting above on renting etc... I have noticed (in the Cork City section of daft lettings), that many premises for rent do not remain up there for long - they get snapped up fairly quickly as far as I can see. I don't know what the dynamics are on why stuff goes up there & moves pretty quickly ... perhaps as university term is about to commence soon enough?

ninsaga


----------



## beattie

ninsaga said:


> Please read prev postings on why daft figures cannot/should not be used in terms of sale etc etc.
> 
> with regard to the posting above on renting etc... I have noticed (in the Cork City section of daft lettings), that many premises for rent do not remain up there for long - they get snapped up fairly quickly as far as I can see. I don't know what the dynamics are on why stuff goes up there & moves pretty quickly ... perhaps as university term is about to commence soon enough?
> 
> ninsaga


 
Is there not a truck load of S50 coming on stream in Cork which should cause downward pressure on rents?


----------



## jackbhoy

Hi Guys,


I have been following this thread for a while now and am fascinated. I have held the opinion for some time now that a slowdown is unavoidable and will begin sooner rather than later. I cannot see drops of 40/50% by xmas that were predicted by some but I can see prices stalling for a few months before sellers panic and start to drop asking prices.
I was in the process of buying an apt myself but just pulled out last week. This was about 20% down to problems with contracts/management Company and 80% our gut feeling that prices are close to their peak. I'd also like to state that I was only buying so we could have a place to live and to avoid throwing 12k p/a into our landlords bank account, and not to make money on capital appreciation.
I am pretty good when it comes to managing finances and I work for a major bank so I would have decent knowledge of mortgage products etc, however looking back I can see that all my logic and my head telling me "do I want to pay €1500 of my salary every month to live in a shoebox of apartment with no outside space, crap build quality and a generally give up going for dinner/pints/holidays" was totally overruled by a desire just to have our own place, somewhere that is really "our home" and that we can alter/decorate/furnish just as we want it and to be forever rid of landlords bleeding magnolia paint everywhere!!
Even though everyone has called me crazy to give up on "getting on the ladder" (man I hate that saying), I feel as though a huge weight has been lifted off my shoulders. Renting doesn’t seem so bad anymore, I may be paying out "dead money" every month but hey I live my favorite part of Dublin, we are close to all our favorite friends/pubs/restaurants/parks and 20 mins walk to work.
To all FTB's out there, everyone (i.e. parents/friends/family/colleagues) don’t have to pay your huge mortgage, live in your crappy ("1st rung on the ladder") apt, sit (or stand) on your cramped bus/train on your daily commute from the only area you could afford to buy in and they wont be with you when you are staying awake at night worrying when interest rate rises are robbing you of what little disposable income you have left.
Once you take a step back and look at things with some semblance of logic you will be able to forget about everyone else and do whats right for you and makes you happy!! 
Maybe I have made one of the worst decisions of my life but only time will tell, so far I couldn’t be happier!! 

BTW, that couple spending 2m on house, they're just like 1000's of others throughout UK/Ireland who watch property shows on BBC/C4 that show saps that don’t have a clue how to manage a project/budget, don’t have a clue about the market they are entering or construction and still manage to make 6 figure profits, and they think to themselves, "I’ll have some of that easy money too".


----------



## fatmanknows

Good one JackBhoy.


----------



## whathome

jackbhoy said:


> Maybe I have made one of the worst decisions of my life but only time will tell, so far I couldn’t be happier!!


 
Good decision - even if there is no crash in the short term, your quality of life will be much better while you hold off.  The optimists at Bank of Ireland are predicting only 3% growth in property next year which is negative in real terms.  Even if their optimistic predictions are correct, you won't be missing out on much growth.  I think you are saving yourself from potential financial misery, commuting hell and despair at living in a property that you don't even like.


----------



## walk2dewater

jackbhoy said:


> Hi Guys,
> 
> 
> I have been following this thread for a while now and am fascinated. I have held the opinion for some time now that a slowdown is unavoidable and will begin sooner rather than later. I cannot see drops of 40/50% by xmas that were predicted by some but I can see prices stalling for a few months before sellers panic and start to drop asking prices.
> I was in the process of buying an apt myself but just pulled out last week. This was about 20% down to problems with contracts/management Company and 80% our gut feeling that prices are close to their peak. I'd also like to state that I was only buying so we could have a place to live and to avoid throwing 12k p/a into our landlords bank account, and not to make money on capital appreciation.
> I am pretty good when it comes to managing finances and I work for a major bank so I would have decent knowledge of mortgage products etc, however looking back I can see that all my logic and my head telling me "do I want to pay €1500 of my salary every month to live in a shoebox of apartment with no outside space, crap build quality and a generally give up going for dinner/pints/holidays" was totally overruled by a desire just to have our own place, somewhere that is really "our home" and that we can alter/decorate/furnish just as we want it and to be forever rid of landlords bleeding magnolia paint everywhere!!
> Even though everyone has called me crazy to give up on "getting on the ladder" (man I hate that saying), I feel as though a huge weight has been lifted off my shoulders. Renting doesn’t seem so bad anymore, I may be paying out "dead money" every month but hey I live my favorite part of Dublin, we are close to all our favorite friends/pubs/restaurants/parks and 20 mins walk to work.
> To all FTB's out there, everyone (i.e. parents/friends/family/colleagues) don’t have to pay your huge mortgage, live in your crappy ("1st rung on the ladder") apt, sit (or stand) on your cramped bus/train on your daily commute from the only area you could afford to buy in and they wont be with you when you are staying awake at night worrying when interest rate rises are robbing you of what little disposable income you have left.
> Once you take a step back and look at things with some semblance of logic you will be able to forget about everyone else and do whats right for you and makes you happy!!
> Maybe I have made one of the worst decisions of my life but only time will tell, so far I couldn’t be happier!!
> 
> BTW, that couple spending 2m on house, they're just like 1000's of others throughout UK/Ireland who watch property shows on BBC/C4 that show saps that don’t have a clue how to manage a project/budget, don’t have a clue about the market they are entering or construction and still manage to make 6 figure profits, and they think to themselves, "I’ll have some of that easy money too".


 
Good post, and good for you. Is this post and are you, really indicative of sentiment out there, or as I still think, is this thread just a fringe minority of "clear thinkers"?


----------



## whathome

walk2dewater said:


> Good post, and good for you. Is this post and are you, really indicative of sentiment out there, or as I still think, is this thread just a fringe minority of "clear thinkers"?


 
I think there's a growing awareness that things have changed in the market. Even looking at new builds, developments that had been sold out have properties available again due to cancellations.

Today I noticed a pre-completion apartment for sale (probably a flipper) in a new development in south Dublin. It has been for sale for about three months. The vendor had been selling the apartment for 15k below the builder. As it is pre-completion, there is no stamp duty. Today they dropped their price to 30k below the builder. The current phase of these apartments had sold out - now there's a flipper selling at 30k below and the builder is re-advertising units for sale at the original price!


----------



## gearoidmm

Where is this development?


----------



## ninsaga

fatmanknows said:


> Good one JackBhoy.





whathome said:


> Good decision .....





walk2dewater said:


> Good post, and good for you. .......



lots of backslappin' by the bears it would appear


----------



## whathome

gearoidmm said:


> Where is this development?


 
*Stillorgan *- New apartment price drop, pre-completion, no stamp duty. It has been for sale for a few months. Price drop occurred within the past 4 days.

Old listing : €575,000


New listing : €560,000 
http://www.daft.ie/searchsale.daft?search=1&selected_agent=&id=84285&s[agent_id]=218&s[p]=upsvvwrp

Builders listing : €590,000 
[broken link removed]=

Sentiment must really have changed for this apartment to be struggling to sell.


----------



## beattie

whathome said:


> I think there's a growing awareness that things have changed in the market. Even looking at new builds, developments that had been sold out have properties available again due to cancellations.
> 
> Today I noticed a pre-completion apartment for sale (probably a flipper) in a new development in south Dublin. It has been for sale for about three months. The vendor had been selling the apartment for 15k below the builder. As it is pre-completion, there is no stamp duty. Today they dropped their price to 30k below the builder. The current phase of these apartments had sold out - now there's a flipper selling at 30k below and the builder is re-advertising units for sale at the original price!


 
Suspected that this would happen and I don't think this will be the last of its kind by a long shot. I would imagine that these flippers who have bought in the last 6-12 months (in new builds) will realise that there might not be another sap further down the line on which they can offload their property onto. 

What percentage of the asking price is this 30K?


----------



## whathome

beattie said:


> What percentage of the asking price is this 30K?


5% - See above : http://www.askaboutmoney.com/showpost.php?p=261130&postcount=2205


----------



## beattie

whathome said:


> 5% - See above : http://www.askaboutmoney.com/showpost.php?p=261130&postcount=2205


 
Cheers, a sizeable drop I would say. I wonder what the builders will have to say when they see this, not to mention someone who had coughed up the full €590k.......


----------



## sonar

beattie said:


> Cheers, a sizeable drop I would say. I wonder what the builders will have to say when they see this, not to mention someone who had coughed up the full €590k.......


 
Correct me if I'm wrong but isn't the situation even worse for an investor?

With stamp duty and other expenses he/she could pay €640k for a two-bed apartment only to find his neighbour has been trying to sell or has sold in the region of €560k !


----------



## RiceCakes

A colleague in work was enthused today to tell me all about his experiences on the Irish housing market.

He bought a house in Laragh in the Wicklow mountains with a nice view , 4 bedrooms etc etc for 350k several years ago on an interest only mortgage.

Well, today its apparently worth 750K, so he's sold it and moved into a tiny semi-d with 3 beds in Cabinteely for 750K..yep you guessed it..for 750K interest free mortgage.

He should own equity..but sure prices are rising so fast he'd be mad to not take benifit of it..

I do the same job as him and am roughly paid the same amount....my car is a Fabia 02D, his is an 06 Toyota Avensis as is the wifes (single income family)Yaris.
I bought the Fabia this year and told him it was all I could afford and he looked at me like I was crazy.

So in summary..he's got an interest only mortgage on a 750K tiny semi -d (in a nice 'ish area) with the 06 car etc..and I rent a bedsit and save about 1K a month and drive a Fabia and have zero debts.

I think he's crazy to have the amount of debt he has, on the other side of the coin, whats the worst that can happen ?  He declares himself bankrupt in a house crash and rents like me , but had a few good years?

The housing market is nuts and I feel its going to burn people like him, and people like me will have to talk in subdued tones in the work canteen as we didnt live the high life in the years of plenty for all, and now are not in a tizzy about interest rates and falling house prices as are the easy money generationers

I see people like him clamouring for child car allowance increases and mortgage allowance increases as "all" Irish homeoners are now dual income and someone has to look after the kids....

I'm single, I don't particularily want to suppliment Mr & Mrs Overextended Mortgage and Creche Expenses

Emigration really seems like the only option to me, I cannot see how the economy can  be anything but a basket case with every family needing two people working and no-one bar the creche to look after the kids to pay the huge mortgage in years to come.

The other thing that strikes me is that with two parents working and the creche costs..smaller families are the inevitable result - who's going to buy all these houses 20-30 years from now with shrinking population?
A 20 year plus investment in the Irish property market just really doesn't make sense looking at the demographics imho.

Sentiment - more bearish by the minute


----------



## ivuernis

Are you sure they're the same apt?



whathome said:


> Old listing : €575,000


size = 69 sq. m. (743 sq.ft.)



whathome said:


> Builders listing : €590,000
> [broken link removed]=


size = 72 sq. m. (775 sq.ft.)


----------



## gearoidmm

> 2 Bed Apartments ranging in size from 69sq.m. (743sq.ft.) to 75sq.m. (807sq.ft.) priced from €590,000



The website says that prices for 2 beds in the development start at 590,000.


----------



## whathome

ivuernis said:


> Are you sure they're the same apt?
> size = 69 sq. m. (743 sq.ft.)
> size = 72 sq. m. (775 sq.ft.)


 
Yes - we looked at this development when the last phase was launched

"2 Bed Apartments ranging in size *from 69sq.m. (743sq.ft.)* to 75sq.m. (807sq.ft.) priced *from €590,000*"

[broken link removed]


----------



## Guest107

whathome said:


> *Stillorgan *- New apartment price drop, pre-completion, no stamp duty. It has been for sale for a few months. Price drop occurred within the past 4 days.
> 
> Old listing : €575,000
> 
> 
> New listing : €560,000
> http://www.daft.ie/searchsale.daft?search=1&selected_agent=&id=84285&s[agent_id]=218&s[p]=upsvvwrp
> 
> 
> Sentiment must really have changed for this apartment to be struggling to sell.



Hmm, are you sure that the apartment was not released in [broken link removed] so the flipper is quids in anyway . Just a thought 

But HARK. Has the builder suddenly upped his spec. Note the difference between the flippers spec on Daft and the Builders spec at €590k on Myhome , the builder now has



> [broken link removed]
> *Luxury solid oak shaker style fitted kitchens with granite worktops*
> *Stainless steel kitchen appliances, dishwasher, fridge/freezer, washer/dryer, stainless steel finish oven and hob*


Enhanced allowances are always the first sign of sogginess in the market <cough>


----------



## whathome

2Pack said:


> Hmm, are you sure that the apartment was not released in [broken link removed] so the flipper is quids in anyway . Just a thought


 
Yes - I figured that was the case. The main reason behind the post is to show that the flipper hasn't been able to sell, even though s/he's undercut the builder by a significant margin for a number of months and has now dropped the price even further.


----------



## whathome

2Pack said:


> But HARK. Has the builder suddenly upped his spec. Note the difference between the flippers spec on Daft and the Builders spec at €590k on Myhome


 
Nah - I think they're the same - take a look further down the flipper's ad on daft.


----------



## Guest107

its still €65 profit in a year, thats a decent amount .

 use the email feature on daft and offer him €530k cash, sale contracts to sign by end august , no chain ...see what he sez to that. He may think you are a flipper too and cut and run quick.

he gets €35k profit minus costs of max €2k or €3k . 

 gwan there whathome, have a lash


----------



## wolfie

Spoke to a mate today ,he works as a builder on a site .He lives in a council house and pays 400 euros rent pm, The council approached him to by his house and offered him 30% discount.The market value is approx 180,000 euros and he can get it for 120,000.Because of his age 38 he can only get max 27 yrs mortgage and this would cost him at least 700 pm to buy.He asked my opinion. I asked him what would he be buying for, as he has 3 kids and that 300 pm saving would be better spent on them now.He says he wants to have something to hand down to them.I said that if I were him I would rather have the 300 pm in my hand ,have no worries on interest rates or house insurance premiums etc Seems the lure of 30 % instant equity is blurring his vision .I said that at the end of the day equity is nothing unless you sell and bank it and go live in a tent.


----------



## ninsaga

wolfie said:


> Spoke to a mate today ,he works as a builder on a site .He lives in a council house and pays 400 euros rent pm, The council approached him to by his house and offered him 30% discount.The market value is approx 180,000 euros and he can get it for 120,000.Because of his age 38 he can only get max 27 yrs mortgage and this would cost him at least 700 pm to buy.He asked my opinion. I asked him what would he be buying for, as he has 3 kids and that 300 pm saving would be better spent on them now.He says he wants to have something to hand down to them.I said that if I were him I would rather have the 300 pm in my hand ,have no worries on interest rates or house insurance premiums etc Seems the lure of 30 % instant equity is blurring his vision .I said that at the end of the day equity is nothing unless you sell and bank it and go live in a tent.



I think he should buy.


----------



## whathome

2Pack said:


> gwan there whathome, have a lash


 
lol - he must be getting edgy now as the completion date is Oct '06.   He'll be under pressure to close and then it becomes a second hand property with stamp duty?


----------



## Guest107

you have nothing to lose mate , simply click and ask


----------



## whathome

ninsaga said:


> I think he should buy.


Despite my bearish inclination, I agree with you ninsaga


----------



## gearoidmm

ninsaga said:


> I think he should buy.



Agree completely - a deal is a deal


----------



## whathome

2Pack said:


> you have nothing to lose mate , simply click and ask


 
Then I'll be stuck with it!

Besides - Mrs. Whathome won't allow speculation. That's why we have to trade up to a bigger house with bigger garden etc. rather than rent and wait which is what I want to do.

Edit: Renter is doing what I would like to do - http://www.askaboutmoney.com/showpost.php?p=260862&postcount=2186


----------



## wolfie

Even though im a permanent bear , i dont want to dish out bad advice to anyone .But why should he nearly double his payment just to live in the same house and expose himself to increasing interest rates, insurance premiums and all the other costs. surely that 300pm would be better spent on something else?


----------



## Guest107

wolfie said:


> But why should he nearly double his payment just to live in the same house and expose himself to increasing interest rates, insurance premiums and all the other costs. surely that 300pm would be better spent on something else?



and builders will get it first in a slump .

does the house need a new roof or windows, let the council do them first and then buy it ina few years.


----------



## gearoidmm

wolfie said:


> Even though im a permanent bear , i dont want to dish out bad advice to anyone .But why should he nearly double his payment just to live in the same house and expose himself to increasing interest rates, insurance premiums and all the other costs. surely that 300pm would be better spent on something else?



Because it's not an investment.  he's not in it for capital gain and he's getting a house for a reasonable price.  The interest component on his mortgage would approximate his rent so you could think of it as him saving 200 a month with a prospect of future appreciation (when the carnage from the current bubble settles down).

I'm a definite bear but 30% off is still a good deal for a house - does he really want to rent for the rest of his life?  Most of the bears here will admit that they eventually want to own their own home (if they don't own already).


----------



## Howitzer

wolfie said:


> Even though im a permanent bear , i dont want to dish out bad advice to anyone .But why should he nearly double his payment just to live in the same house and expose himself to increasing interest rates, insurance premiums and all the other costs. surely that 300pm would be better spent on something else?


 
Start a new thread on this as any reponses will just get lost here. 

I'd also be tempted to buy BUT the house can't be sold from under him, THIS IS THE KEY POINT, so he can actually wait and see how the market pans out without losing the property of his dreams (where he already lives!). If it falls in value he'll still be able to pay 30% under what the new market value is if and when he does decide the buy it. If the market keeps going up then ditto. Interest rates will be rising regardless but I think I'd decide to buy and start saving cold hard cash then buy it in a couple of years when he can purchase with a smaller mortgage and, hopefully, at a lower market price.

He already has the property he just has to decide when is the best time to buy it!! I'd wait until interest rates start heading down, 2/3/4 years off?


----------



## ninsaga

wolfie said:


> Even though im a permanent bear.......





gearoidmm said:


> ......
> I'm a definite bear ......





whathome said:


> Despite my bearish inclination.....



Ok what a fun thread this is turning out to be.....so when is the end of the world by the way


----------



## walk2dewater

gearoidmm said:


> Agree completely - a deal is a deal


 
33% off is a deal.  And I doubt this guy would invest the difference b/n mortgage payment and rent wisely.


----------



## whathome

I noticed that doing a myhome search in Lucan returns more that the results limit of 150, I've never seen this before.  I know that the results can be limited by bedrooms, price etc but if I was a seller, I would be worried that my house doesn't even show up on a general Lucan search.

Nothing against Lucan by the way it's just the first time I've seen a general myhome search max out for one area.  All areas seem to have had an increase in supply, not just Lucan.


----------



## sandymount

109 with 3 bed or less
43 with 4 bed or more

Lucan grand total = 152


----------



## whathome

ninsaga said:


> Ok what a fun thread this is turning out to be.....so when is the end of the world by the way


 
I think you're confusing realism with negativity


----------



## room305

phoenix_n said:


> You probably are in a better position than many posters here to gauge somewhat the sentiment of the current market. What impression did your EA give you? Have you been getting many queries ?
> I understand you may not want to divulge much but have you learned more since beginning the process of selling ?



Only met with the REA yesterday but he doesn't seem to be anticipating a tough sell. His suggested asking price is higher than we expected and about 10% higher than the house was valued in May. He is quite confident that we'll get the asking price or even higher.

Now I am aware he could be talking up the price to get the sale but I assume this would be counterproductive since it will then sit on his books for longer. I don't have much experience of the RE game but I assume the general position is to talk down the expectations of the seller to below market price, talk up the price to above market price to the buyer and then sell at market price and everyone walks away thinking they've got a bargain.

I cannot see the advantage for him in unrealistically talking up our expectations.

Especially since he is pursuing a _triple-whammy_ - sell our current house, sell us a new house and sell us the mortgage to finance it. So again, a quick sale is in his interest so I'm inclined to think the asking price may be close to what we will actually get for it.


----------



## ninsaga

whathome said:


> I think you're confusing realism with negativity



OK so then why you are being really negative!


----------



## whathome

ninsaga said:


> OK so then why you are being really negative!


We're not, it just sounds negative to you.


----------



## frazzled

room305 said:


> Especially since he is pursuing a _triple-whammy_ - sell our current house, sell us a new house and sell us the mortgage to finance it.


 
Whatever you do, do *not* get your mortgage through the estate agent


----------



## walk2dewater

whathome said:


> I think you're confusing realism with negativity


 
Irish philosophy:  problems exist => being a 'doom-monger', 'begrudger' etc, ignore problems until they grow too large to ignore anymore.  Then panic.

N American philosophy:  problems exist => adjust and make changes asap to nip the problem early.

Guess which philosophy makes for a better life?


----------



## room305

frazzled said:


> Whatever you do, do *not* get your mortgage through the estate agent



No fear. We're selling up to rent anyway.


----------



## CelloPoint

room305 said:


> No fear. We're selling up to rent anyway.



No fear? You'd want to hurry up!


----------



## StoppedClock

room305 said:


> Especially since he is pursuing a _triple-whammy_ - sell our current house, sell us a new house and sell us the mortgage to finance it. So again, a quick sale is in his interest so I'm inclined to think the asking price may be close to what we will actually get for it.


 
Does he not know that your are STR? If not then nice! It will make a change for him to be taken for a ride

Edit : fed lies to harsh.


----------



## redo

whathome said:


> I noticed that doing a myhome search in Lucan returns more that the results limit of 150, I've never seen this before.  I know that the results can be limited by bedrooms, price etc but if I was a seller, I would be worried that my house doesn't even show up on a general Lucan search.
> 
> Nothing against Lucan by the way it's just the first time I've seen a general myhome search max out for one area.  All areas seem to have had an increase in supply, not just Lucan.


It was 138 on Tuesday evening, 144 around Lunchtime yesterday.  This could be the pre season rush.


----------



## ninsaga

walk2dewater said:


> N American philosophy:  problems exist => adjust and make changes asap to nip the problem early.
> 
> Guess which philosophy makes for a better life?



Now apply that philosophy to those living in Iraq after the "weapons of mass destruction problem _existed_'....that is if stand fully behind the idea that the US has it really all thought out!


----------



## CelloPoint

redo said:
			
		

> It was 138 on Tuesday evening, 144 around Lunchtime yesterday. This could be the pre season rush.



Meaningless figures as your sample size is tiny. Also, there is no doubt in my mind that properties are managed through the daft.ie site so as to 'normalise' the statistics. There are estate agents involved with the site and the money to be made is huge, so why shoot yourself in the foot by providing a pin to prick the bubble?

I would honestly say that there's only a little bit of jittering in the market at the moment, with most people being completely naive and think that the celtic tiger is still roaring, the whole world loves us cos we're Irish and the bank manager is your best mate. The outsiders will have to be made learn the hard way, and the only way they'll learn is when they see the insiders fleeing that smoking house - even then, some people will refuse to believe it.

I'd say pubs, chemists and radio phone shows will do well in the future.


----------



## walk2dewater

ninsaga said:


> Now apply that philosophy to those living in Iraq after the "weapons of mass destruction problem _existed_'....that is if stand fully behind the idea that the US has it really all thought out!


 
Sophistry is the other tactic of the head-in-sand crowd.. "ah sure.."


----------



## whathome

room305 said:


> No fear. We're selling up to rent anyway.


 
Be really interested to hear how the sale goes if you don't mind sharing your story as it unfolds?


----------



## Guest107

100,000 views, phew.

Is this the _Outsiders Guide to Property Market Insider Thinking  In Ireland  _??


----------



## room305

CelloPoint said:


> No fear? You'd want to hurry up!



Ah yes, I had forgotten about the impending December crash.

It won't happen but if it did I would definitely buy back in as it would invalidate everything I thought I knew about how housing market corrections work.

Have you thought about what exactly is going to cause this sudden clammer for the exits?


----------



## room305

whathome said:


> Be really interested to hear how the sale goes if you don't mind sharing your story as it unfolds?



I'll post a few pieces of information alright but nothing too revealing. Once I've sold I shall be happy to answer any questions anyone has.


----------



## ninsaga

Is sophistry not also a tactic applied to either side of any argument.



walk2dewater said:


> Sophistry is the other tactic of the head-in-sand crowd.. "ah sure.."



No ...not quite..... I'm testing the logic being applied in the 'ah sure the americans are always right!' point


----------



## StoppedClock

room305 said:


> Ah yes, I had forgotten about the impending December crash.
> 
> It won't happen but if it did I would definitely buy back in as it would invalidate everything I thought I knew about how housing market corrections work.
> 
> Have you thought about what exactly is going to cause this sudden clammer for the exits?


 

Why are you STR if there is no impending crash?


----------



## CelloPoint

room305 said:


> Ah yes, I had forgotten about the impending December crash.
> 
> It won't happen but if it did I would definitely buy back in as it would invalidate everything I thought I knew about how housing market corrections work.
> 
> Have you thought about what exactly is going to cause this sudden clammer for the exits?



Yes, I've nailed my colours to the mast. Please don't misquote me by saying I predict a 'December crash', because what I did predict is here:
http://www.askaboutmoney.com/showpost.php?p=259835&postcount=2067

I believe that any change in the market will come about very quickly indeed, especially in bubble markets.

You say 'it won't happen', but I think it would be naive not to maintain a reactive position to imminent danger. Anti-American jibes aside, I agree pretty much with walkdewater when he says:



			
				walkdewater said:
			
		

> Irish philosophy: problems exist => being a 'doom-monger', 'begrudger' etc, ignore problems until they grow too large to ignore anymore. Then panic.
> 
> N American philosophy: problems exist => adjust and make changes asap to nip the problem early.


There's no doubt that this attitude has played a huge part in the rise of the America as the largest economy in the world, whatever about their current difficulties (topic of discussion elsewhere on AAM).

I'd prefer to be on this side of the Irish property tsunami than the other, because when it comes ashore, the damage to this economy will be huge.


----------



## Guest107

*US Housing Starts Continue To Drop*

Graph on CNN







Article Builders Hit The Brakes 

http://money.cnn.com/2006/08/16/news/economy/housingstarts/index.htm


----------



## walk2dewater

ninsaga said:


> I'm testing the logic being applied in the 'ah sure the americans are always right!' point


 
But that wasn’t my point.

But you prove my other point about how we deliberately go around in illogical circles as a way to defend a point of view.  It is an insidious Irish cultural trait, not WANTING to think straight, and it intrigues me why it’s so embedded here.

A bit of topic though, no?


----------



## Fergal

*tententwenty: *DCC is probably predicating that on the massive influx of immigrants, who will be leaving once the property and construction well dries up.
*Fergal*: _Well that's your prediction, not DCC's._
*tententwenty: *I said Predicated, not predicted. When you learn the difference, come back and we'll debate the point.
*Fergal*: Anyone see a problem here with tententwenty's literacy? 
www.dictionary.com. For you.
*tententwenty: *www.dictionary.com. For you.
*Fergal*: OK, I have to spell it out. DCC may well be PREDICATING that there will be a house shortage due to a massive influx of immigrants. You are PREDICTING that they will subsequently leave.
--------------------------------------------------------
*Fergal:* _Central bankers have never worked before to keep base inflation at 2%. The banks are offering long term fixed rate mortgage at 5%._
*tententwenty: *The European Central Bank is RAISING INTEREST RATES TO COMBAT INFLATION. Thats the work they are doing to keep inflation at 2%. Your magical long term fixed mortgages are for 3 or 5 years. Thats not long term on a 35 year mortgage.
*Fergal:* _Have you actually looked up the long term fixed rate? E.g. can you find 20 yr fixed at 5.6% ?_
*tententwenty:* No I can't. That was my point. What was your point?
*Fergal: *[broken link removed] To restate my point "_The banks are offering long term fixed rate mortgage at 5%."_
--------------------------------------------------------
*Fergal*: _The sharp downturn is from 15% pa to only 3% pa. aka soft landing. They are NOT predicting a fall in values let alone a crash._
*tententwenty: *Perhaps you would like to support that with a link?
*Fergal*: [broken link removed] It predicts that a soft landing is the most likely outcome. I.e. the rate of increase will experience of sharp downturn from increasing at 15% down to only an increase of 3%. In mathematical terms, the rate of acceleration will be negative while the velocity will continue to increase.
*tententwenty:*I'm trying to find the icon for "weeps while tearing my hair out". Did you even read the article you linked? *An "abrupt correction" to the property market cannot be ruled out, it says, although the contraction of the construction sector is likely to be smooth.
*O RLY?
*Fergal*: Now I did need the dictionary for "O RLY". Spot the difference between "cannot be ruled out" vs "is likely to be smooth"
--------------------------------------------------------
*Fergal*: _Credit has always been available, jobs were not._
*tententwenty: *Did you even read the thread? This much credit has never been available, due to low interest rates. Or are people buying houses in cash from their savings where you live?
*Fergal*: No point having credit available if you have no job. Lots of jobs in Ireland.
*tententwenty: *So you're saying its all fine and dandy that these jobs (thats a *couple* working their entire lives) are not sufficient to pay off the loans within 35 years, based purely on speculation and market sentiment in the few years when there were low interest rates available? Irresponsible lending practices more worthy of loan sharks that the banks have been indulging in are responsible for the bubble, and will be responsible for the enormous amount of damage caused to the economy when it collapses.
*Fergal*: Credit follows jobs.
--------------------------------------------------------
*Fergal*: _In 20 years time, wealth will transfer to Poland as it did to India and even China._
*tententwenty: *India and China are still third world countries. They have a fair bit of transferring yet to do, I'm sorry to tell you.
*Fergal*: Agreed.
--------------------------------------------------------
*Fergal*: _I have no reference to determine the number. _
*tententwenty: *What about a guess? And people breaking up find new partners and move in with them. Negligible.
--------------------------------------------------------
*Fergal*: _Because we're Irish and have always done so._
*tententwenty: *No harm to you Fergal, but thats the stupidest thing I've read so far on this thread. Sure didn't saint patrick drive out all the property crashes? Ireland hasn't even existed as a state for a century, how can we have these long term habits you're talking about? This is the kind of rubbish that caused the bubble in the first place. Don't forget, Ireland is different! 
*Fergal*: So after almost a century, you are saying it is still not possible to detect long term habits.
*tententwenty: *Considering there has only been significant wealth in the country for the last ten years, I would say it reflects the attitude of the previous generation more than anything else. And in any case, since when is "always" a hundred years?
--------------------------------------------------------
*Fergal*: _Well its playing a good tune so far!_
*tententwenty: *I wonder what kind of song you'll be singing when it snaps?
*Fergal*: Do I detect a measure of ill-will here?
*tententwenty: *Whatever emotional subtext you read into my replies is your business, not mine. Tell us Fergal, how many properties do you own?
*Fergal*: I don't think you want to know.


----------



## CelloPoint

Fergal said:


> *tententwenty: *DCC is probably predicating that on the massive influx of immigrants, who will be leaving once the property and construction well dries up.
> *Fergal*: _Well that's your prediction, not DCC's._
> *tententwenty: *I said Predicated, not predicted. When you learn the difference, come back and we'll debate the point.
> *Fergal*: Anyone see a problem here with tententwenty's literacy?
> --------------------------------------------------------
> *Fergal:* _Central bankers have never worked before to keep base inflation at 2%. The banks are offering long term fixed rate mortgage at 5%._
> *tententwenty: *The European Central Bank is RAISING INTEREST RATES TO COMBAT INFLATION. Thats the work they are doing to keep inflation at 2%. Your magical long term fixed mortgages are for 3 or 5 years. Thats not long term on a 35 year mortgage.
> *Fergal:* _Have you actually looked up the long term fixed rate? E.g. can you find 20 yr fixed at 5.6% ?_
> --------------------------------------------------------
> *Fergal*: _The sharp downturn is from 15% pa to only 3% pa. aka soft landing. They are NOT predicting a fall in values let alone a crash._
> *tententwenty: *Perhaps you would like to support that with a link?
> *Fergal*: [broken link removed] It predicts that a soft landing is the most likely outcome. I.e. the rate of increase will experience of sharp downturn from increasing at 15% down to only an increase of 3%. In mathematical terms, the rate of acceleration will be negative while the volocity will continue to incease.
> --------------------------------------------------------
> *Fergal*: _Credit has always been available, jobs were not._
> *tententwenty: *Did you even read the thread? This much credit has never been available, due to low interest rates. Or are people buying houses in cash from their savings where you live?
> *Fergal*: No point having credit available if you have no job. Lots of jobs in Ireland.
> --------------------------------------------------------
> *Fergal*: _In 20 years time, wealth will transfer to Poland as it did to India and even China._
> *tententwenty: *India and China are still third world countries. They have a fair bit of transferring yet to do, I'm sorry to tell you.
> *Fergal*: Agreed.
> --------------------------------------------------------
> *Fergal*: _I have no reference to determine the number. _
> *tententwenty: *What about a guess? And people breaking up find new partners and move in with them. Negligible.
> --------------------------------------------------------
> 
> *Fergal*: _Because we're Irish and have always done so._
> *tententwenty: *No harm to you Fergal, but thats the stupidest thing I've read so far on this thread. Sure didn't saint patrick drive out all the property crashes? Ireland hasn't even existed as a state for a century, how can we have these long term habits you're talking about? This is the kind of rubbish that caused the bubble in the first place. Don't forget, Ireland is different!
> *Fergal*: So after almost a century, you are saying it is still not possible to detect long term habits.
> --------------------------------------------------------
> *Fergal*: _Well its playing a good tune so far!_
> *tententwenty: *I wonder what kind of song you'll be singing when it snaps?
> *Fergal*: Do I detect a measure of ill-will here?



That's one hell of an unreadable bicker.

So Fergal, are you a bull or a bear?


----------



## room305

StoppedClock said:


> Why are you STR if there is no impending crash?



Because once the sentiment changes it will be next to impossible to sell a FTB house/apartment. It might be many years before the necessary correction is made due to the illiquid nature of the market.

We mightn't even see much of a drop in nominal terms.


----------



## phoenix_n

room305 said:


> Ah yes, I had forgotten about the impending December crash.


 
The mistake that you may be making is that you think that the Dec crash(and its just a measured guess) means that suddenly prices drop and its all over and lets pack our bags. Thats a too simplistic approach IMO.(no direspect)

Just take a house that you currently see on sale and has been on sale for the last 2 to 3 months. Asking price 400K. Still not sold. And by Dec. Still not sold. The asking price is still 400k ( EA tells interested parties that vendor is willing to negotiate). Its true value may be much much less but until that vendor eventually sells it it wont be realised. 

I guess what i am trying to say is that when the crash happens you will not see prices suddenly drop. You have to take into account the lead time.


----------



## miju

room305 said:


> Because once the sentiment changes it will be next to impossible to sell a FTB house/apartment. It might be many years before the necessary correction is made due to the illiquid nature of the market.
> 
> We mightn't even see much of a drop in nominal terms.


 
to quote a certain analogy earlier in this thread, your climbing out of the crazy pool while saying ah sure the waters grand hop in to the next sap who wants to 
buy

regarding decreases in nominal terms are predicting a 3% growth only next year which by my reckoning equates to a decrease in real terms given inflation is at 4%


----------



## StoppedClock

room305 said:


> Because once the sentiment changes it will be next to impossible to sell a FTB house/apartment.


 
Not if you drop your price!!! Supply/Demand, sound familliar?


----------



## CelloPoint

phoenix_n said:


> The mistake that you may be making is that you think that the Dec crash(and its just a measured guess) means that suddenly prices drop and its all over and lets pack our bags. Thats a too simplistic approach IMO.(no direspect)
> 
> Just take a house that you currently see on sale and has been on sale for the last 2 to 3 months. Asking price 400K. Still not sold. And by Dec. Still not sold. The asking price is still 400k ( EA tells interested parties that vendor is willing to negotiate). Its true value may be much much less but until that vendor eventually sells it it wont be realised.
> 
> I guess what i am trying to say is that when the crash happens you will not see prices suddenly drop. You have to take into account the lead time.



Sorry, but just reiterating a point here, an investor who bought the house at 200k will happily take a 50k - 100k+ hit if he thinks the sentiment has changed for the worse. Investment properties and second houses will behave very differently to PPRs. And with all the section 23 properties out there, coupled with people holding on to their old houses when trading up, there are a huge number of investment properties. People will rush to sell their second houses if the mortgage on their PPR depends heavily on the value of the former.


----------



## room305

CelloPoint said:


> Yes, I've nailed my colours to the mast. Please don't misquote me by saying I predict a 'December crash', because what I did predict is here:



An average correction of over 20% in less than four months isn't a crash? If the ESRI/TSB house price index is even negative for this year I will give you my house.



CelloPoint said:


> I believe that any change in the market will come about very quickly indeed, especially in bubble markets.



In a liquid market yes. Even in an illiquid market if there is a sufficient driver. But what exactly is that driver going to be? You yourself haven't even posited any suggestions for what this might be.



CelloPoint said:


> You say 'it won't happen', but I think it would be naive not to maintain a reactive position to imminent danger.



The chances of such a sudden and imminent correction are so infinitesimally small that I would be stupid to act on it. Nothing in life is without risk.

If your prediction comes through it will be good. The market needs a correction, so the sooner the better.



CelloPoint said:


> I'd prefer to be on this side of the Irish property tsunami than the other, because when it comes ashore, the damage to this economy will be huge.



A few months ago you were all set to invest in Irish property. Now you think there is a possibility of an imminent collapse of the property market here. I would be genuinely interested in knowing why you had such a change of sentiment, if you don't mind elaborating. I am not being sarcastic, good investors can and do regularly change their mind about particular investments.


----------



## room305

phoenix_n said:


> The mistake that you may be making is that you think that the Dec crash(and its just a measured guess) means that suddenly prices drop and its all over and lets pack our bags. Thats a too simplistic approach IMO.(no direspect)




Read over my posts. I'm not the one predicting sudden price drops.
 


phoenix_n said:


> Just take a house that you currently see on sale and has been on sale for the last 2 to 3 months. Asking price 400K. Still not sold. And by Dec. Still not sold. The asking price is still 400k ( EA tells interested parties that vendor is willing to negotiate). Its true value may be much much less but until that vendor eventually sells it it wont be realised.
> 
> I guess what i am trying to say is that when the crash happens you will not see prices suddenly drop. You have to take into account the lead time.



So there will be a sudden crash that will take many months to be realised?


----------



## Guest107

room305 said:


> I would be genuinely interested in knowing why you had such a change of sentiment, if you don't mind elaborating. I am not being sarcastic, good investors can and do regularly change their mind about particular investments.


_Assetarily Induced Bipolarity Syndrome_ I'll christen it. 

Hope theres a cure or a Ritilin thang for it


----------



## room305

miju said:


> to quote a certain analogy earlier in this thread, your climbing out of the crazy pool while saying ah sure the waters grand hop in to the next sap who wants to
> buy



Am I being deceitful in some way? I'm selling it at what the market is willing to pay. Should I reduce the price simply because I think it is overvalued?



miju said:


> regarding decreases in nominal terms are predicting a 3% growth only next year which by my reckoning equates to a decrease in real terms given inflation is at 4%



That's why I said _nominal_ ...


----------



## room305

StoppedClock said:


> Not if you drop your price!!! Supply/Demand, sound familliar?



So I should hang onto my house so I can sell it at a lower price later?


----------



## CelloPoint

room305 said:


> An average correction of over 20% in less than four months isn't a crash? If the ESRI/TSB house price index is even negative for this year I will give you my house.


Even the ESRI/TSB figures can be misleading - a house bought for 800k and rennovated, then sold a year later for 1.2M would come out in their analysis as being a 50% increase, no? The fact that TSB put their name to the research, to me suggests compromise in the integrity of the study.



room305 said:


> In a liquid market yes. Even in an illiquid market if there is a sufficient driver. But what exactly is that driver going to be? You yourself haven't even posited any suggestions for what this might be.


Let's be in no doubt that section 23 investment properties and second homes are very liquid.



room305 said:


> The chances of such a sudden and imminent correction are so infinitesimally small that I would be stupid to act on it. Nothing in life is without risk.


Ultimately, it's your decision. Seeing as you've adopted the 'wait and see' strategy, how long are you going to wait?



room305 said:


> If your prediction comes through it will be good. The market needs a correction, so the sooner the better.


Agreed.



room305 said:


> A few months ago you were all set to invest in Irish property.


Denied.



room305 said:


> Now you think there is a possibility of an imminent collapse of the property market here. I would be genuinely interested in knowing why you had such a change of sentiment, if you don't mind elaborating. I am not being sarcastic, good investors can and do regularly change their mind about particular investments.


I have contributed to this thread since page 1. I developed a whole list of reasons as to why I am extremely skeptical not only of the Irish property market, but of the Irish economy as a whole. Click on my username to see my posts if you want an idea of where I am coming from. But to make life easier for you, see this post that includes a list of bullet-points:
http://www.askaboutmoney.com/showpost.php?p=257965&postcount=1896


----------



## Guest107

*Tight Margin Of Error For SubPrimers.*

The forthcoming downturn/slump/crash/wobble will be the first in Irleand where the sub prime lenders will be tested in action. These guys only entered  the market in the past few years . They repossess and sell very very fast if there is a problem, not like our traditional lenders. 

I am unaware where they may be found in the Irish market but I suspect they have quite a lot of the single detached market in some rural areas . 

Here is the effect in action. 

One $300 phone bill costs a woman her home

because the sub primer bowwowers have no savings, no cushions, no margin error built in and no chance if the sub prime lender calls the loan in.....3 months of missed payments and they may cut their losses. 

Remember that they expect over 10% of loans to go bad so if they have 100,000 mortgages out there in Ireland they may ultimately reposses and sell 10,000 homes. 

This will have a catastrophic effect in certain areas but I cannot say which ones yet. In that article you can see that 0.8% of homes are being repo-ed in Georgia in each quarter or 3.2% a year annualised. 

I suspect its not D4 or D6 though !


----------



## phoenix_n

room305 said:


> Read over my posts. I'm not the one predicting sudden price drops.


I know. It was me. (and someone else forget who) . And my predictions may/will change depending on prevailing factors. This is a debate , its not science. 



room305 said:


> So there will be a sudden crash that will take many months to be realised?


 
Yes. Example: I just bought a new bike. Cost 400euros. To me its worth 400euros but when i sell it its only worth 150euros. 

A profit on property is only realised on sale. And so is a loss


----------



## StoppedClock

room305 said:


> So I should hang onto my house so I can sell it at a lower price later?


 
No, I was merely pointing out the flaw in your argument, to recap:

You are Selling to Let but don't think there will be a drop.

I say :  why sell then?

You say : as it will be impossible to sell following change in sentiment (still implying no drop, if there is then everything you know about property market is wrong etc. etc.)

I say : it will be possible to sell, but one would need to drop one's price (Supply/Demand) (Hence IMO prices will drop)


You Say : So you advise me to hang onto my house so I can sell it at a lower price later?

I say : You missed my point


----------



## phoenix_n

I say potayto. You say potaato.


----------



## CelloPoint

phoenix_n said:


> I say potayto. You say potaato.



Regarding potatoes, it seems the Irish haven't learned from the famine (putting all of ones eggs in the one basket etc.)


----------



## Calina

room305 said:


> So I should hang onto my house so I can sell it at a lower price later?



While I can't speak for him, I think what he means is that you should admit that you want to sell at the top of the market, not in the falling market. 

It won't necessarily be impossible to sell as the market falls. It will almost certainly be difficult to get the price you want for it. There is actually a difference there.


----------



## room305

Calina said:


> While I can't speak for him, I think what he means is that you should admit that you want to sell at the top of the market, not in the falling market.



Exactly. It is easier to sell before the peak than after, even if the price you realise is ultimately the same.


----------



## phoenix_n

Room305. I think you are making a wise decision. 

Realise your gains. Rent somewhere where you could never afford to buy. Relax and watch market.


----------



## room305

CelloPoint said:


> Even the ESRI/TSB figures can be misleading - a house bought for 800k and rennovated, then sold a year later for 1.2M would come out in their analysis as being a 50% increase, no? The fact that TSB put their name to the research, to me suggests compromise in the integrity of the study.



It is a 50% increase.




CelloPoint said:


> Let's be in no doubt that section 23 investment properties and second homes are very liquid.



No they're not. The owners might quickly decide to sell but that doesn't mean they'll quickly find a buyer.



CelloPoint said:


> Ultimately, it's your decision. Seeing as you've adopted the 'wait and see' strategy, how long are you going to wait?



I'm selling now.



CelloPoint said:


> I have contributed to this thread since page 1. I developed a whole list of reasons as to why I am extremely skeptical not only of the Irish property market, but of the Irish economy as a whole. Click on my username to see my posts if you want an idea of where I am coming from. But to make life easier for you, see this post that includes a list of bullet-points:
> http://www.askaboutmoney.com/showpost.php?p=257965&postcount=1896



I don't disagree but nothing I've seen or heard would lead me to the conclusion that there will be a rush to exit doors before the end of the year. What will cause this?


----------



## Persius

jackbhoy said:


> Even though everyone has called me crazy to give up on "getting on the ladder" (man I hate that saying), I feel as though a huge weight has been lifted off my shoulders. Renting doesn’t seem so bad anymore, I may be paying out "dead money" every month but hey I live my favorite part of Dublin, we are close to all our favorite friends/pubs/restaurants/parks and 20 mins walk to work.
> To all FTB's out there, everyone (i.e. parents/friends/family/colleagues) don’t have to pay your huge mortgage, live in your crappy ("1st rung on the ladder") apt, sit (or stand) on your cramped bus/train on your daily commute from the only area you could afford to buy in and they wont be with you when you are staying awake at night worrying when interest rate rises are robbing you of what little disposable income you have left.
> Once you take a step back and look at things with some semblance of logic you will be able to forget about everyone else and do whats right for you and makes you happy!!


Spot on. I was in a similar situation and came to the same conclusion. It will be *your* property, not your parents/friends/TV Pundit/bloke who was mouthing off in the pub...
Regarding sentiment, I know a few other people thinking the same way. When I told a good friend, who is a bank manager, that I don't intend purchasing at present, and will rent for the next while, he said "you may be right" and also mentioned rising rates, huge supply coming on stream and predicted "soft landing". When I told other people I know, their reactions were not of shock, but understanding. Also I know someone who was trying to sell one of those section XX holiday homes in Clare. She had it advertised all spring, got a few viewers but no bids at all. Dunno if she was looking to sell it at a very high price, but I doubt it. 
In more casual conversations on property in general, more people are saying that they've heard that property prices won't continue to rise and may even fall. Still, as others have pointed out it's not what the average person thinks, but rather the marginal buyer. If you get two people at a viewing who remain confident re the economy in general and the worth of the property in particular, then they will bid on the property and its price will rise. IMHO there are still enough people out there who do believe that the economy will continue to perform and properties will continue to rise in price. It will take a fair bit of media coverage about nominal price drops before these people become bearish. And I don't see widespread nominal price drops for another 12 months or so. My gut feeling is that the show will role on (though at a reduced rate) this Autumn and next Spring. But it'll be a different world by Autumn 2007



> The other thing that strikes me is that with two parents working and the creche costs..smaller families are the inevitable result - who's going to buy all these houses 20-30 years from now with shrinking population?
> A 20 year plus investment in the Irish property market just really doesn't make sense looking at the demographics imho.


Good point RiceCakes. I've said on other threads that German property prices have been more or less static in nominal terms for the last 12 or so years. One of the reasons is their demographics. Most people in Ireland in their 30s come from families with four or five children, but are themselves only having on average 2 children. The same could be said of people in their 50s and 60s in Germany. Their demographic structure is about 20 years ahead of ours, but I can see the same thing happening here in 20 years time. The Chinese, who can't afford to buy at home, may look at the Limerick property market in 20 years time in the same way that we look at the Berlin property market now ("wow, you can get 1 bed appartments in Berlin for €50,000").


----------



## redo

*Re: Tight Margin Of Error For SubPrimers.*



2Pack said:


> The forthcoming downturn/slump/crash/wobble will be the first in Irleand where the sub prime lenders will be tested in action. These guys only entered  the market in the past few years . They repossess and sell very very fast if there is a problem, not like our traditional lenders.
> 
> I am unaware where they may be found in the Irish market but I suspect they have quite a lot of the single detached market in some rural areas .
> 
> Here is the effect in action.
> 
> One $300 phone bill costs a woman her home
> 
> because the sub primer bowwowers have no savings, no cushions, no margin error built in and no chance if the sub prime lender calls the loan in.....3 months of missed payments and they may cut their losses.
> 
> Remember that they expect over 10% of loans to go bad so if they have 100,000 mortgages out there in Ireland they may ultimately reposses and sell 10,000 homes.
> 
> This will have a catastrophic effect in certain areas but I cannot say which ones yet. In that article you can see that 0.8% of homes are being repo-ed in Georgia in each quarter or 3.2% a year annualised.
> 
> I suspect its not D4 or D6 though !


What can also happen these types of borrowers is that they, for example, get into some more financial difficulty and need to raise 5-10k.  It is not unreasonable to to assume that the subprime lenders will sell their house to get this money owed.


----------



## room305

StoppedClock said:


> You are Selling to Let but don't think there will be a drop.
> 
> I say :  why sell then?
> 
> You say : as it will be impossible to sell following change in sentiment (still implying no drop, if there is then everything you know about property market is wrong etc. etc.)
> 
> I say : it will be possible to sell, but one would need to drop one's price (Supply/Demand) (Hence IMO prices will drop)
> 
> 
> You Say : So you advise me to hang onto my house so I can sell it at a lower price later?
> 
> I say : You missed my point



I don't think prices will drop in the short term. In the long term they will drop but the correction will be in real terms due to the fundamental illiquidity of the market.

House owners won't drop their prices. They would prefer not to sell. Sounds stupid but that is how it has proved in the past.


----------



## CelloPoint

room305 said:


> It is a 50% increase.


Tis, and the cost of rennovation is ignored. So a hypothetical 50% increase according to ESRI is not actually a 50% increase when you consider the economic cost of rennovating.



room305 said:


> No they're not. The owners might quickly decide to sell but that doesn't mean they'll quickly find a buyer.


They are liquid until the fools run out. There will be plenty of fools willing to buy in at 'knock-down' prices after the initial spill.



room305 said:


> I'm selling now.


That's interesting. The impression I got from you was that there's still blood left to be squeezed out of the stone?



room305 said:


> I don't disagree but nothing I've seen or heard would lead me to the conclusion that there will be a rush to exit doors before the end of the year. What will cause this?


I've made this point before. You asked 'what will cause this [rush]?' My answer is one-worded: *sentiment*


----------



## Gab24

Hi All,


       A while ago I posted a message about how I see the irish house prices as a foreginer in this country (by the way, thanks for the replies to that post).
       I stick with my belief that the future will be dictated by economical facts rather than peoples sentiments. If the monthly payments will rise above a certain level or if your tenants are leaving from your house you will have to sell it and that's it. Unless the government comes with some more tricks to divert money into housing industry.
      You might want to have a look at this article from Limerick: 

[broken link removed]

       Some people are starting to feel already some pain because of spiralling cost of living. Of course, it can be just a singular event, but still ... it was suprising to read about it when every media tells you that Ireland is so rich and economy is in such good shape. How many people have streched themself hoping to sell in 1-2 years for a nice profit ? This cannot go forever, it's pure maths.
       Keep in mind that there will be cost increases for electricity and gas in a few months and they will affect again all the house holders.

        The fractional banking system allows money to be created at the expense of debt for future generations. Since euro area became reality a few years ago, there was a flood of credits in many EU countries. Banks and financial institutions are the most happy ones to give money now because they know for sure interest rates will be higher in future, giving them nice profits.
         What you see in now in Ireland is a good party because of the continuous borrowing of money. And the goverment is also happy to sustain this. Someone said that politicians should be regarded as people thinking in 4-years time frames. And I incline to believe it. Very few are really thinking about their country and willing to lose elections for the better future. They want to be in power now.
         Just a quick example: about 1/3 from the price of a house goes to goverment through taxes imposed on the builder and the buyer. For every 300.000euro paid by a person that borrowed this money, the government takes about 100.000 (IN CASH). So, they can still sustain these nice salaries of people working in public sector.
          These money also sustain a lot of SERVICES in the economy, but a clever country should invest in production and research. Where are most of the foreigners working ? In restaurants, hotels, pubs ... 
           A house is a necesity, but in the end it will never produce food, steel, or microchips.  Putting so much money in houses seems crazy. And if this figure of about 270.000 houses being empty in Ireland is true, then again, it's very crazy.
          The so called shortage of land for construction was artificially mainained by the government through excessive construction regulation.
           The result ?  Irish young people borrow like mad to have a roof. Don't you think that the standard ratio for a price of a house being 3-4 times your salary had some reason ? Once you start putting more money into a house, there will be an imbalance in the economy. There will be less money to do other economic activities that can bring real profits from real production.


           Here you can see the external debt of Ireland rising in the last few years:

 [broken link removed]


           If Ireland was borrowing so much money when the economy was booming, I'm wondering what it will do when the economy will not be so strong ?
            I did some research myself and I found that Ireland has the biggest External debt / GDP in the world : 500% !!! The nex is UK with 330%, Holland with 260% and Belgium with 260%.
             By the way, the irish external debt is over 1000 billions  $ and the GDP is 200 billions $ (I wonder how much from this is made from housing industry).

           USA has a hige external debt, but they also have a huge GDP, so the ratio comes at 72%

           China has an external debt/GDP ratio of 11% (very interesting).

           Ok, you might say that the key element for a successful capitalist system is borrowing money from the banks, but still I think it's too much for Ireland.


            Unless, the world will witness a new ecnomical situation where every country will start borrowing at ratios of 5-10 times their GDP, I don't see a party keep going in Ireland             


          The pharmaceutical companies in Ireland have warned already that cost of energy is becoming too high in this country. On the other side, you can't tell to people working in ESB that have huge mortgages that they might have to take some salary cuts or do some restructuration to lower the costs. And this is how imbalances will create in the economy, the pharmaceutical companies might start moving and so on ...        
         See here one example:

    MUMBAI, Aug 10 (Reuters) - India's Ranbaxy Laboratories Ltd.  (RANB.BO: Quote, Profile, Research) said on Thursday it would sell a manufacturing facility  in the Republic of Ireland as it moved to consolidate its  European operations in Romania. 
  "Ranbaxy has decided to divest the manufacturing facility of  Ranbaxy Ireland Ltd., located in Cashel, Ireland, as a going  concern," it said in a statement. 
     In June, Ranbaxy completed the acquisition of Romania's  Terapia S.A. for $324 million, and said this would boost its  presence in the fast-growing CIS markets. 

     "Following the recent acquisition of Terapia in Romania,  there are significant operational efficiencies to be gained from  consolidating the company's European manufacturing operations in  Romania," it said.



            To conclude again, it will be down to economical realities rather than what people feel. Many people are saying now: "I'm not going to sell that house for a loss" and the EA will use these arguments about the mentality of people that keeps these high prices.
            But, they might be forced to sell or become bankrupt.




All the best


----------



## walk2dewater

CelloPoint said:


> Regarding potatoes, it seems the Irish haven't learned from the famine (putting all of ones eggs in the one basket etc.)


 
1840 Irish peasant:  "Ah sure, planting those cabbages is dead money, potatoes are a sure thing, and sure isnt it time you got over your fear of potatoe committment... if there's crop failure sure it'll be a soft-landing.... sure don't people have to eat SOMETHING...."


----------



## whathome

CelloPoint said:


> I've made this point before. You asked 'what will cause this [rush]?' My answer is one-worded: *sentiment*


 
I agree with this, it very quickly becomes a buyers market.  That doesn't mean that the bottom falls out of it but it operates in a very different way to a sellers market.  Suddenly buyers realise that they have power in the deal, this hasn't been the case for years but is rapidly heading that way.  I'm a buyer and I'm feeling much more confident about getting a good deal - as a seller I'm praying that my 2 deals go through!


----------



## room305

CelloPoint said:


> Tis, and the cost of rennovation is ignored. So a hypothetical 50% increase according to ESRI is not actually a 50% increase when you consider the economic cost of rennovating.



I doubt it is happening on a wide enough scale to skew the ESRI/TSB index.




CelloPoint said:


> They are liquid until the fools run out. There will be plenty of fools willing to buy in at 'knock-down' prices after the initial spill.





CelloPoint said:


> I've made this point before. You asked 'what will cause this [rush]?' My answer is one-worded: *sentiment*



So the sentiment changes and everybody is jumping out of the pool. Happy to accept 50% drops from current market value. Anything, they don't care, they just need to offload their property. Luckily, at the same time a horde is charging the other way, looking for bargains. Snapping up any discounted property that comes on stream.



CelloPoint said:


> That's interesting. The impression I got from you was that there's still blood left to be squeezed out of the stone?



I'm not a property speculator. Nor am I that risk averse.


----------



## fatmanknows

[FONT=verdana,arial]*'Inflation ease shouldn't deter ECB'*[/FONT][broken link removed][FONT=verdana,arial]Thursday, 17th August 2006 12.29pm[/FONT][broken link removed][broken link removed][broken link removed][FONT=verdana,arial]The surprise easing of euro zone inflation and slightly softer-than-expected industrial output figures should not deter the European Central Bank from raising interest rates by at least 50 basis points by the end of the year, economists said.
'Today's data should have no impact on the ECB,' Bank of America economist Holger Schmieding said.
'With growth above trend and headline inflation above target, the ECB will want to reduce its monetary stimulus further, most likely by 25 basis point rate hikes in October and December,' Schieding said.
[/FONT]


Crank up the Heat, I say. Lets see how strong this market really is.


----------



## tententwenty

_*Fergal*: Anyone see a problem here with tententwenty's literacy?_
www.dictionary.com. For you.

_*Fergal:* __Have you actually looked up the long term fixed rate? E.g. can you find 20 yr fixed at 5.6% ?
_No I can't. That was my point. What was your point?_

*Fergal*: [broken link removed]_ It predicts that a soft landing is the most likely outcome. 

I'm trying to find the icon for "weeps while tearing my hair out". Did you even read the article you linked? 

*An "abrupt correction" to the property market cannot be ruled out, it says, although the contraction of the construction sector is likely to be smooth.*

O RLY?

_*Fergal*: No point having credit available if you have no job. Lots of jobs in Ireland._
So you're saying its all fine and dandy that these jobs (thats a *couple* working their entire lives) are not sufficient to pay off the loans within 35 years, based purely on speculation and market sentiment in the few years when there were low interest rates available? Irresponsible lending practices more worthy of loan sharks that the banks have been indulging in are responsible for the bubble, and will be responsible for the enormous amount of damage caused to the economy when it collapses.

_*Fergal*: So after almost a century, you are saying it is still not possible to detect long term habits._
Considering there has only been significant wealth in the country for the last ten years, I would say it reflects the attitude of the previous generation more than anything else. And in any case, since when is "always" a hundred years?

_*Fergal*: Do I detect a measure of ill-will here?_
Whatever emotional subtext you read into my replies is your business, not mine. Tell us Fergal, how many properties do you own?


----------



## ivuernis

Anyone else think this thread has run its course?


----------



## StoppedClock

ivuernis said:


> Anyone else think this thread has run its course?


 
I think so but would anyone be prepared to sum it up and offer a conclusion?


----------



## ninsaga

ivuernis said:


> Anyone else think this thread has run its course?



eh....and what's the conclusion? (something about we are all doomed I think!)


----------



## Calina

I'm just seeing if it can break 2500 replies at this stage.


----------



## Firefly

If prices fall, I think the dinner party conversations could quite quickly turn from "I am up xxxK on my gaff" to "I bought my new gaff at a discount of xxxK on last years price"....ie they will still think they are up!!!!


Firefly


----------



## thewatcher

StoppedClock said:


> I think so but would anyone be prepared to sum it up and offer a conclusion?


 
In order to save the irish economy into the future a severe price correction must occur ! there you go


----------



## bren2002

ivuernis said:


> Anyone else think this thread has run its course?



For a couple of months anyway.  When there are developments in the market (pardon the pun!) to report it will become interesting again.


----------



## CelloPoint

ninsaga said:


> eh....and what's the conclusion? (something about we are all doomed I think!)



Sell your property *now*. Upskill, save and prepare to leave this country.


----------



## beattie

ivuernis said:


> Anyone else think this thread has run its course?


 
No, I still find it interesting. Someone was calling for its head a while back and if he/she had got its wish we wouldn't have got the contribution from the guy not from this country on his view of where we are at and are going to go.


----------



## beattie

Calina said:


> I'm just seeing if it can break 2500 replies at this stage.


 
When the next bulletin from the PTSB/ERSI comes out there will be a clamour from either the bears or bulls to say that they were right!!


----------



## SteelBlue05

ivuernis said:


> Anyone else think this thread has run its course?


 
Yes without doubt.
Askaboutmoney is now TalkAboutPropertyForever.com


----------



## thewatcher

beattie said:


> When the next bulletin from the PTSB/ERSI comes out there will be a clamour from either the bears or bulls to say that they were right!!


 
Depends when the data is from,if it's 3 months old i have no doubt it will show a rise,this weeks data might be a different story !.


----------



## thewatcher

SteelBlue05 said:


> Yes without doubt.
> Askaboutmoney is now TalkAboutPropertyForever.com


 
No one is asking you to post here,if you don't like it just ignore the thread.
It's the quiet before the storm either way,when the selling season begins it will ramp up again.


----------



## room305

phoenix_n said:


> Yes. Example: I just bought a new bike. Cost 400euros. To me its worth 400euros but when i sell it its only worth 150euros.
> 
> A profit on property is only realised on sale. And so is a loss



So when did your bike depreciate over 62% - the day you bought it, the day you sold it or the day you scratched the crossbar? Obviously we just have to take it that the loss was incurred the day you sold it.

CelloPoint is predicting major price drops by Christmas. You agree with him but say we just won't notice these drops until several months later when the properties are actually sold. I think that is just plain ridiculous and you should both stop trying to move the goalposts on your predictions.


----------



## wjc

How many international investors or high net worth individuals like Desmond or Magnier do you see investing in apartments and semi-detached houses in commuterland? With yields of 1-2% how would you expect them to. At the end of the day it will all come down to economic fundamentals. The only real wealth generated in the property market in the last few years has been the enormous transfer of money from housebuyers ( mostly borrowed ) to developers and development land owners. The whole thing reminds me of a few of those pyramid schemes in the news earlier in the year. The ones that will be burnt are the last ones in.


----------



## room305

wjc said:


> The ones that will be burnt are the last ones in.



And the last ones out.


----------



## whathome

beattie said:


> When the next bulletin from the PTSB/ERSI comes out there will be a clamour from either the bears or bulls to say that they were right!!


 
The next report may show a rise as it doesn't represent current market activity.

The ESRI/PTSB report is based on mortgages drawn down when final contracts are signed. This means that there is approx 10 week lag on sale agreed prices. Add another month for report preparation and you have data that is three to four months old at the time of release.


----------



## ninsaga

Calina said:


> I'm just seeing if it can break 2500 replies at this stage.





thewatcher said:


> It's the quiet before the storm either way,when the selling season begins it will ramp up again.



.... ANyone keeping a running count of the  number of cliches have been used in tis thread... (just doing my bit there Calina to make your day


----------



## whathome

Interest rates poll on unison : http://unison.ie/polls/index.php3?ident=Irish Independent&mypollid=2473

The Comments below it are interesting too.


----------



## phoenix_n

room305 said:


> So when did your bike depreciate over 62% - the day you bought it, the day you sold it or the day you scratched the crossbar? Obviously we just have to take it that the loss was incurred the day you sold it.
> 
> CelloPoint is predicting major price drops by Christmas. You agree with him but say we just won't notice these drops until several months later when the properties are actually sold. I think that is just plain ridiculous and you should both stop trying to move the goalposts on your predictions.


 
Dont know what bee is in your bonnet but i'm not interested. 

G'luck with your sale, hope all goes as planned.


----------



## whathome

PTSB/ESRI comment from the Independent in February:

"Permanent TSB's figures are based on mortgages, as are those from the Dept of the Environment. The time-lag on these figures could be as long as a year, particularly in the case of new houses and apartments. This happens when the price is agreed before construction, but the mortgage is not drawn down for some time afterwards. "


----------



## CelloPoint

room305 said:


> CelloPoint is predicting major price drops by Christmas. You agree with him but say we just won't notice these drops until several months later when the properties are actually sold. I think that is just plain ridiculous and you should both stop trying to move the goalposts on your predictions.



Refute that. When did I move the goalposts on my predictions?


----------



## walk2dewater

I’ll do my bit then to get the thread back on track. “My sentiment towards the Irish property market”, by WTTW:

Summer into Autumn 2006 – sentiment does a bit of a wobble. Constant stream of contradictory data from the US. ECB raises rates to 3.5%, while Fed remains paused. Irish bears jump the gun calling a ‘peak’ and ‘imminent crash’. Random, unconfirmed cases of price drops haunt Irish market. Much gnashing of teeth and wringing of hands on RTE/Irish Times/Sundays etc.

Winter 2007 – ECB joins the Fed in pausing rates at 4% citing slowdown in France and Germany and 1.35 exchange to the US$. Bullish *sentiment* roars back. Bears “proved wrong again”. Mad scramble to get on the ladder and prices ratchet up like never before. Headlines in papers once again proclaim X% a week price rises. This is it, the very last chance for those wanting to get on the property train.

Spring 2007 - Sentiment goes ultra bullish even though FTBs are effectively priced out. Headlines in papers explain FTBs no longer a necessary factor in the property market. “Owners” leverage themselves further to pay each other ever higher sums for property. The number of bearish commentators dwindles to all-time low, even David McWilliams capitulates and says, “an new era of property feudalism has dawned on Western countries”. Sober articles are written how we’re heading for a society divided into permanent camps of owners and renters; those who work for a living and those who own for a living. Stories emerge of ‘rags to riches’ landlords with 100’s of properties, ordinary people pictured smiling in Sunday papers above articles outlining their assets valued at multiples of the national lottery prizes.

However, Irish inflation now at 6% and rising. European inflation averaging 3-4%. ECB slips in one small rate rise amid the “pause” period.

Summer 2007 - Existing landlords start to leverage to the extreme, brokers offer products whereby equity can be withdrawn and held in special accounts to meet monthly debt commitments. Other incredibly clever tax and amortatization schemes limit month payments. “Guaranteed” maximum debt re-payment schemes for property "owners" are advertised. Landlords liabilities to the banks are reported as shrinking as a percentage of their asset-base. Landlords with millions owing on mortgages leverage themselves further and further to snap up property. It is a virtuous cycle, and articles and analysis appear vindicating the sustainability of it. The absence of FTBs means that “someone must own property”, therefore the concentration in a few hands makes sense. More and more exotic products are offered to manage the monthly debt repayment obligations of “owners”. 

But, bad news about falling prices in the USA start to become undeniable and UK Halifax index goes y-o-y negative.

With European inflation now persistently tracking higher at 4-5%, ECB decides its pause period is over, starts ratching rates higher. ECB hints at 0.5% increments in their tightening, but conceeds to political pressure to raise it’s price stability bar to 3%. All of this means nothing of course to FTBs without parental/lottery assistance. The subtext of the expanded property supplements is that they are doomed to a life of renting.

Autumn 2007 – Silently, unannounced and unknown, ECB rates hit the point where even the most exotic monthly payment schemes “rollover”, i.e. the debt chairs cannot be shuffled any more, payments simply have to rise. Political crises in Europe as the Fed suggests cutting rates. But ECB defies Brussels and pushes through the Fed rate of 5.75%, “indicating 6 or 7% may be required”. Gold hits US$850/oz.

…….

To be continued…


----------



## Firefly

When both myself and my wife were earning 40k each we had to jump through hoops to get 210k...this Java developer should be selling pvc windows with those negotiation skills!!
Firefly


----------



## room305

CelloPoint said:


> Refute that. When did I move the goalposts on my predictions?



Well mainly I think it was Phoenix_n, who agreed with your prediction but then claimed this crash would happen in December while taking months to actually materialise.



CelloPoint said:


> Until I see a photograph of a substantial amount of 'for sale' signs outside some generic apartment complex/housing estate, I will hold off on saying stuff like 'the crash has begun'.





CelloPoint said:


> Here are my speculative predictions to come about by December 2006:
> 
> * commuterland 1 bed flats - 40%
> * commuterland 2+ bed flats - 30%
> * inner M50 flats and commuterland houses - 25%
> * city centre flats - 20%
> * middle class suburbia 2 bed houses and townhouses (no management companies) - 15%
> * middle class suburbia 3 and 4 bed semi-Ds (no management companies) - 10%
> 
> The above predictions are at a macro level. There will of course be micro-factors associated with particular sales in certain areas (embassy belt, seaside, Ballymun etc.).
> 
> Further depreciation to come in 2007 with commuterland being hardest hit - greater than 50% price reduction come summer time and a new government in place.
> 
> I stand to be corrected. See you all in December.





			
				CelloPoint said:
			
		

> Yes, I've nailed my colours to the mast. Please don't misquote me by saying I predict a 'December crash'



I apologise if the quotes are taken out of context (I don't think they are though) but to see such serious drops by the end of the year, people selling now would need to be accepting substantially reduced offers. Thus far, this isn't happening.


----------



## whathome

walk2dewater said:


> Winter 2007 – ECB joins the Feb in pausing rates citing slowdown in France and Germany and 1.35 exchange to the US$. Bullish sentiment roars back


 
Not a chance IMO - it would take a massive cut in interest rates to get it moving again. This market is a like walking dead man  

What saved it in 2002 was the ECB move to VERY low rates and government reversing the Bacon measures. There is nothing to save it next January.

This thread is going in circles - would be great to lock it until Sep 17th - one month from now


----------



## walk2dewater

I've revised my earlier post [no.2309]...


----------



## whathome

room305 said:


> Thus far, this isn't happening.


 
It is happening, from first hand experience I can tell you that most people selling right now are selling slightly below their original expectations.


----------



## ninsaga

whathome said:


> It is happening, from first hand experience I can tell you that most people selling right now are selling slightly below their original expectations.



Are you an EA? How can you speak for what MOST people are doing?


----------



## whathome

ninsaga said:


> Are you an EA? How can you speak for what MOST people are doing?


 
Because I'm actively selling and buying.  Dealing with numerous EA's.


----------



## CelloPoint

room305 said:


> RE: the first quote - I still don't think the crash has begun and nowhere have I stated that it has.
> 
> RE: the second quote - Yes, this is my prediction
> 
> RE: the third quote - this was in response to:
> 
> 
> 
> room305 said:
> 
> 
> 
> 
> Ah yes, I had forgotten about the impending December crash.
> 
> It won't happen but if it did I would definitely buy back in as it would invalidate everything I thought I knew about how housing market corrections work.
> 
> Have you thought about what exactly is going to cause this sudden clammer for the exits?
> 
> 
> 
> I believe there will be a huge slowdown in so-called 'investment' property prices by December, the full effects of the crash coming about in early 2007 when PPRs will be affected as well. You must also bear in mind that reduced asking prices for flats by developers cannot be regarded as a fall in prices. A crash, imo, constitutes a price drop across the board.
> 
> 
> 
> 
> room305 said:
> 
> 
> 
> 
> I apologise if the quotes are taken out of context (I don't think they are though) but to see such serious drops by the end of the year, people selling now would need to be accepting substantially reduced offers. Thus far, this isn't happening.
> 
> Click to expand...
> 
> 
> There is shakiness in the market at the moment. I'm not surprised by reports on AAM of people selling to rent and taking slightly below asking price to get rid of their properties. Can I ask you why you would 'definitely buy back in' in the event of a property crash? A property crash to me would signal take my savings and get the hell out of this country for fear of having to be in a miserable country full of miserable people with mill-wheels hanging round their necks.
Click to expand...


----------



## phoenix_n

walk2dewater said:


> I’ll do my bit then to get the thread back on track. “My sentiment towards the Irish property market”, by WTTW:
> 
> Summer into Autumn 2006 – sentiment does a bit of a wobble. Constant stream of contradictory data from the US. ECB raises rates to 3.5%, while Fed remains paused. Irish bears jump the gun calling a ‘peak’ and ‘imminent crash’. Random, unconfirmed cases of price drops haunt Irish market. Much gnashing of teeth and wringing of hands on RTE/Irish Times/Sundays etc.
> 
> Winter 2007 – ECB joins the Fed in pausing rates at 4% citing slowdown in France and Germany and 1.35 exchange to the US$. Bullish *sentiment* roars back. Bears “proved wrong again”. Mad scramble to get on the ladder and prices ratchet up like never before. Headlines in papers once again proclaim X% a week price rises. This is it, the very last chance for those wanting to get on the property train.
> 
> Spring 2007 - Sentiment goes ultra bullish even though FTBs are effectively priced out. …


 
So having indentified such an opportunity would you not be willing to commit to the market.


----------



## walk2dewater

phoenix_n said:


> So having indentified such an opportunity would you not be willing to commit to the market.


 
If such a scenario materializes I will increasing my holdings of gold


----------



## ninsaga

whathome said:


> Because I'm actively selling and buying.  Dealing with numerous EA's.



...so how does that translate into what MOST people are doing?


----------



## phoenix_n

walk2dewater said:


> If such a scenario materializes I will increasing my holdings of gold


 
Which makes sense if you could only buy a house with cash but with credit surely you could make a bigger killing in property ?


----------



## fatmanknows

walk2dewater said:


> I’ll do my bit then to get the thread back on track. “My sentiment towards the Irish property market”, by WTTW:
> 
> Winter 2007 – ECB joins the Feb in pausing rates at 4%  ............................once again proclaim X% a week price rises. This is the last chance for those wanting to get on the property train.
> 
> Spring 2007 - Sentiment goes ultra bullish ..........


 
Hear what you say WTTW and very much like your posting style. However I strongly think otherwise about whether there's any more breadth left in the market. The market is exhausted and IMO has already had it's final run  - peaked late April with a few of the big red bricks achieving unintelligble amounts. We'll have two more rate rises before year end and more in the 1st quarter of new year.  (For those on IO or long term martgages a further 1% increase could amount to a staggering increase of 25% on their current heavy monthly commitment.) The market is 'punched out' and will not sustain itself with the coming rate rises and shed loads of supply yet to come on stream.


----------



## whathome

ninsaga said:


> ...so how does that translate into what MOST people are doing?


 
Well - when you're active in the market it is easy to spot.

- Many properties with no bids or bids way below asking
- Buyers pulling out of deals
- Falling asking prices
- EA's calling me wondering if I would consider making a bid below the asking price
- Going to viewings, nobody else there!
- So many properties coming on that suit us that we can't view them all

The only properties I've seen go sale agreed in the past few weeks have been below or at asking price. Vendors usually expect to achieve above asking.


----------



## Persius

fatmanknows said:


> Hear what you say WTTW and very much like your posting style. However I strongly think otherwise about whether there's any more breadth left in the market. The market is exhausted and IMO has already had it's final run - peaked late April with a few of the big red bricks achieving unintelligble amounts.... The market is 'punched out' and will not sustain itself with the coming rate rises and shed loads of supply yet to come on stream.


 
You may be right regarding the "big red bricks". I know nothing about the market for them. However I think the market does indeed have another 9 months or so to run at the bottom end. There are still enough desperate FTBs and "canny investors" willing to spend €350k - €500k for their "dream starter home" or simply not to "miss out", or for that "sensible investment". This will keep the show on the road for a bit longer - though it will be a more nervous show.


----------



## Duplex

A trend worth watching is the development of new Residential Mortgage Backed Securities (RMBS) markets in emerging economies. Russia, India, China, Korea, Egypt etc. are at the early stages of developing RMBS's possibly providing competition for funds in established markets in Europe and the US. 

This report is on the RMBS in Saudi.

http://www.menafn.com/qn_news_story_s.asp?StoryId=1093120725


----------



## ivuernis

whathome said:


> PTSB/ESRI comment from the Independent in February:





whathome said:


> "Permanent TSB's figures are based on mortgages, as are those from the Dept of the Environment. The time-lag on these figures could be as long as a year, particularly in the case of new houses and apartments. This happens when the price is agreed before construction, but the mortgage is not drawn down for some time afterwards. "


 
I know I've asked about this one before but if the above is indeed true 
how come the last PTSB/ESRI reported the average house price at about 
roughly €300k whereas the recent BoI report which reported the average 
house price at about roughly €400k. 

The BoI report was also based on Dept of the Environment figures. If both 
reports are based on Dept of the Environment figures how come they 
came to figures which are so far apart for average house price - 

€300k v €400k ?


----------



## phoenix_n

whathome said:


> - Buyers pulling out of deals


 
..which will add to the known supply coming on stream.


----------



## room305

CelloPoint said:


> I believe there will be a huge slowdown in so-called 'investment' property prices by December, the full effects of the crash coming about in early 2007 when PPRs will be affected as well. You must also bear in mind that reduced asking prices for flats by developers cannot be regarded as a fall in prices. A crash, imo, constitutes a price drop across the board.



Perhaps you could clarify your prediction. These price drops by December. Are you talking about a percentage drop from the seller's expected sale price, a percentage drop from the current market value, or an annualised loss?

I still fail to see how your prediction doesn't constitute a crash.



CelloPoint said:


> There is shakiness in the market at the moment. I'm not surprised by reports on AAM of people selling to rent and taking slightly below asking price to get rid of their properties. Can I ask you why you would 'definitely buy back in' in the event of a property crash? A property crash to me would signal take my savings and get the hell out of this country for fear of having to be in a miserable country full of miserable people with mill-wheels hanging round their necks.



Someone accepting slightly below the asking price means nothing. I bought two years ago during the gold rush for slightly below the asking price. The two scariest things about property as an investment IMO, are the illiquidity of the market (so you cannot limit your loss the way can with investments in a liquid market) and the requirement for leverage. If we see a massive correction by Christmas it means the market is more liquid than I thought. There were fundamentals underpinning the boom in prices but these were vastly overshot, manifesting into the bubble we now see. This happens quite often in markets but is not as much of a problem if the market can correct.

I am bullish on the long term prospects of gold. The fact that the price has crashed relative to its May peak hasn't changed that for me. My fear for the property market would be that the 'stickyness' of prices would mean the correction would occur in real rather than nominal terms. This effectively leaves prices static in nominal terms with a Mexican stand-off between buyers and sellers. For someone wishing to trade-up (as I would be) this is a horrible situation, leaving you trapped in a home that is no longer suitable for your needs.

Hence my decision to sell now.


----------



## whathome

ivuernis said:


> I know I've asked about this one before but if the above is indeed true
> how come the last PTSB/ESRI reported the average house price at about
> roughly €300k whereas the recent BoI report which reported the average
> house price at about roughly €400k.
> 
> The BoI report was also based on Dept of the Environment figures. If both
> reports are based on Dept of the Environment figures how come they
> came to figures which are so far apart for average house price -
> 
> €300k v €400k ?


 
They're both based on mortgages but the BOI report is based on a mix of DOE & PTSB figures whereas the PTSB/ESRI report is based on their own data. They also have differing views on what the definition of an average house price is.


----------



## whathome

Here's an interesting thread:
http://www.askaboutmoney.com/showthread.php?t=34409&page=1

And an interesting post:
http://www.askaboutmoney.com/showpost.php?p=261141&postcount=23


----------



## Guest107

Its about mints , al quaida and dyslexia in equal measure , what a bloody bore 

A 4 Bed Semi in Mullingar for below €200k , now theres an interesting one coz its been a while since I saw one that low.


----------



## whathome

Best of luck with the sale room305.

Might pop back to take an occasional look now and again but I'm signing off from AAM and this thread now - bye


----------



## thewatcher

2Pack said:


> Its about mints , al quaida and dyslexia in equal measure , what a bloody bore
> 
> A 4 Bed Semi in Mullingar for below €200k , now theres an interesting one coz its been a while since I saw one that low.


 
That has to be a wind up,i'd say someone's mam and dad are going to hit the roof when they come back from holidays.
A free car thrown in aswell i might make an offer,quick sale before the parents return.


----------



## Guest107

Mullingar prices are crashing already . make an offer so .


----------



## fatmanknows

Is the tank full


----------



## ninsaga

whathome said:


> The only properties I've seen go sale agreed in the past few weeks have been below or at asking price. Vendors usually expect to achieve above asking.



and August being a slow time for the market anyway...... how have you taken that into account?


----------



## hmmm

ninsaga said:


> and August being a slow time for the market anyway...... how have you taken that into account?


That's a nice easy excuse for the bulls to trot out to explain any signs of a downturn. Maybe if you repeat it often enough it'll come true


----------



## thewatcher

I simply don't see any slow down in the amount of properties hitting the market.I know we should view the Daft figures with skeptisim but it looks like Navan could be in trouble,have the flippers been caught out !.


----------



## liteweight

exile said:


> Did some bank really loan them that much on the assumption that it was a fairly short-term investment?
> 
> 600K was "affordable" for them but they ended up bidding 1.15m?  Then they had another 250K lying around to rennovate but ended up spending 500K?  Methinks there are some other players not mentioned in the article.



Some banks will lend this amount as long as you produce a 'Letter of Servicability'.


----------



## Duplex

liteweight said:


> Some banks will lend this amount as long as you produce a 'Letter of Servicability'.


 
Irish banks would lend to a shadow if they could package up the mortgage and sell it on as a Mortgage Backed Security on the money markets.  How long this will or can continue is the question.


----------



## walk2dewater

Duplex said:


> Irish banks would lend to a shadow if they could package up the mortgage and sell it on as a Mortgage Backed Security on the money markets. How long this will or can continue is the question.


----------



## ct_roy

OK - i can't keep up with all this "oh yes it will" "oh no it won't" stuff. I think it's high time for someone to put their hand up and actually started spelling out to people what the implications for a property market crash are for how the man on the street live their daily lives. Now i've not read all posts in this thread but have done a good job lurking at them since this kicked off and very few if any have actually addressed how issues such as Negative Equity affect Joe Bloggs on the street. There's a lot of speculative debate but not a lot of education and understanding as to what the implications are for what is being speculated. 

Perhaps it's time to start new spin off threads addressing these issues? I honestly don't know how anyone has the time to keep up with this thing!

Personally, I'm sitting on the fence on how things will pan out over the next 12-18 months. I think the autumn will be a good barameter for things to come. If the bulls anticipated demand returns, then watch how the tone of this thread changes as the stories of a resurgence in the market start popping up all over the place. 

If demand (which is the one uncertain half of the price growth/decline equation - supply will be constant and/or increasing for the next 3-5 years) doesn't bounce as predicted by the bears - the doomsayers voices will grow louder and we'll probably accelerate the downturn - the importance of perception in any potential downturn is huge.

I do take heart that one day Hollywood will probably make a blockbuster on the "Irish Property Market Story" - anyone got some suggestions for a catchy, witty title?


----------



## Guest107

ct_roy said:


> I do take heart that one day Hollywood will probably make a blockbuster on the "Irish Property Market Story" - anyone got some suggestions for a catchy, witty title?



Hollywood is, a major documentary is being shot at present based around some specuvestors with wide open eyes gushing away about home much money they made so far and how the sky is the limit. Some of it is shot in Florida where these people have also specuvested.

Its a work in progress of course.


----------



## TallSpoon

_.._


----------



## TallSpoon

ct_roy said:


> I do take heart that one day Hollywood will probably make a blockbuster on the "Irish Property Market Story" - anyone got some suggestions for a catchy, witty title?



Crash!!!


----------



## Maine

My detailed post is my only post 

RE sitting on fence quote belongs CT ROY


----------



## Maine

My 2p for what its worth …..Below is information from central bank plus I roll it forward a year.

In July 2003 mortgage lending to date was c 50,000 million.  The interest on this at 2% plus 1% margin was 1,500 million.

July 2006 mortgage lending to date is approx 110,000 million.  The interest on this at 3% plus 1% margin is 4,400 million.  

At current growth rates it can be projected that by December 2007 approx 150,000 million of mortgages will be borrowed at say 4% plus 1% margin is 7,500 million.  

That’s 6,000 million a year or120 million a week extra to be found compared to July 2003 just for interest. What is funding this …… new borrowing which flows around the economy paying wages and taxes.  

If only 5% of those mortgage debts were to go bad during the downward cycle whenever it happens that’s 7,500 million plus of bad debts.

Add lending to developers which could easily be of the same size and increasing cost to service.

This poker game is not about a few Bob the builders losing their jobs and house prices falling by 10% - this involves the health of the irish banking sector. 

It is about being possibly the first country in the world to have a property recession without any control over its own interest rates.  If banks failed in Japan at 0% interest rates then it possible for them to fail in Ireland.

Re above see Davys Stockbrokers Starting Points 15 August 2006 which says that New York hedge funds are already short selling a Irish bank on fears of a slowdown in commercial property lending. The hedge funds may be premature depending on yuor view but these are not stupid people.  

The only certainty is the builders will keep building a 100,000 units and keep selling because they can sell at lower prices and still make profit.

A property slowdown would be good for ireland Ltd


----------



## Guest107

Maine said:


> If only 5% of those mortgage debts were to go bad during the downward cycle whenever it happens that’s 7,500 million plus of bad debts.



not all of which will be written off fully mind and which will sold as secondary debt in the 10% -50% of face range and some of which has been securitized and sold to ...dare I say...rather gullible Asian investors .

The banks will be hit directly for a few Billion all right but thats a years profit only, they will also sack lots of salespersons to balance the books a tad.

Senior bank people that I know have been crapping themselves about the property lending since about 2003/4 but were afraid to lep off the carousel first. They do not believe they have the people any more to 'manage a downturn' as there are too many tiger cubs in there who only ever saw good times.

Watch the banks import US CEOs and CFOS who will do their dirty for them and pretty fast.


----------



## miju

2Pack said:


> its still €65 profit in a year, thats a decent amount .
> 
> use the email feature on daft and offer him €530k cash, sale contracts to sign by end august , no chain ...see what he sez to that. He may think you are a flipper too and cut and run quick.
> 
> he gets €35k profit minus costs of max €2k or €3k .
> 
> gwan there whathome, have a lash



i emailed and while it's not fair to go into figures and the ins and outs of the reply suffice to say i made a very low offer and the reply has confirmed my belief the market is currently undergoing a massive shift and largely towards negative sentiment

(anyone who wants details PM me)


----------



## Duplex

2Pack said:


> Hollywood is, a major documentary is being shot at present based around some specuvestors with wide open eyes gushing away about home much money they made so far and how the sky is the limit. Some of it is shot in Florida where these people have also specuvested.
> 
> Its a work in progress of course.


 

Eighty years too late;

http://www.imdb.com/title/tt0019777/


----------



## ct_roy

> This poker game is not about a few Bob the builders losing their jobs and house prices falling by 10% - this involves the health of the irish banking sector.
> 
> It is about being possibly the first country in the world to have a property recession without any control over its own interest rates. If banks failed in Japan at 0% interest rates then it possible for them to fail in Ireland.



Most insightful post yet. I too agree. People must understand that if "the crash" does come - the banks are ultimately the most exposed.

Japanese banks have still not fully recovered from their property bubble being popped 15 years ago. 

As you say, add to this that the real interest rate (rate minus inflation) in Japan was negative for a prolonged period in the 90's as a combative measure which failed and I shudder at the prospect of a clapped out Irish banking sector teeming with bad debts and no control over monetary policy. 
In short, our interest rates will be significantly higher than those an Irish Central Bank would maintain - the complete opposite to the current (albiet changing) environment - this would be a complete economic disaster and would be unprecedented in modern western economic history. (unless it's already occuring elsewhere in the EMU - I haven't been keeping my economic ear to the ground of property markets in mainland europe of late)


----------



## ct_roy

> There's a lot of speculative debate but not a lot of education and understanding as to what the implications are for what is being speculated.
> 
> 
> Personally, I'm sitting on the fence on how things will pan out over the next 12-18 months. I think the autumn will be a good barameter for things to come. If the bulls anticipated demand returns, then watch how the tone of this thread changes as the stories of a resurgence in the market start popping up all over the place.



sorry - couldn't resist


----------



## liteweight

miju said:


> i emailed and while it's not fair to go into figures and the ins and outs of the reply suffice to say i made a very low offer and the reply has confirmed my belief the market is currently undergoing a massive shift and largely towards negative sentiment
> 
> (anyone who wants details PM me)



People on this thread have lost the run of themselves!!! It should be closed. Everything that can be said on the topic HAS been said. The post above is a step too far.


----------



## miju

a step too far how exactly, it was one simple email with an offer much like anyone would make on any property and i got a simple answer in return (a simple enquiry if you will) , it wasn't like i was intending to lead the vendor on for a while so as he'd potentially miss out on a sale or anything


----------



## tententwenty

liteweight said:


> People on this thread have lost the run of themselves!!! It should be closed. Everything that can be said on the topic HAS been said. The post above is a step too far.


So go somewhere else. Shifts in a market like property take months and years, and the daily commentary here is bound to have a certain amount of redundancy, keeping that in mind. The insightful commentary and unique perspectives keep coming regardless of your opinion on the matter. Heres an internet.


----------



## gearoidmm

liteweight said:


> People on this thread have lost the run of themselves!!! It should be closed. Everything that can be said on the topic HAS been said. The post above is a step too far.




I think we both know that if it is closed, like a hydra, another will spring up in its place.  There are a significant minority of people on this site who want to discuss this subject and every time a thread is closed, it takes less than a day for someone to start another one.  As has been mentioned in Letting off Steam, it's probable better just to keep one open to keep all the property bears occupied.  Anyway, all the same arguments would just start from the beginning again.


----------



## whizzbang

ct_roy said:


> I do take heart that one day Hollywood will probably make a blockbuster on the "Irish Property Market Story" - anyone got some suggestions for a catchy, witty title?



"Eyes wide shut"? oh wait, thats gone...


----------



## ninsaga

miju said:


> i emailed and while it's not fair to go into figures and the ins and outs of the reply suffice to say i made a very low offer and the reply has confirmed my belief the market is currently undergoing a massive shift and largely towards negative sentiment
> 
> (anyone who wants details PM me)



If you had no real intent in buying then why would you do such a thing? That in itself is injecting a negative sentiment towards the seller.......


----------



## phoenix_n

ninsaga said:


> If you had no real intent in buying then why would you do such a thing? That in itself is injecting a negative sentiment towards the seller.......


 
To his defence anyone who has put a low offer on a property to be kept in the loop is guilty of the same offence.

Are we seeing a trend of falling (albeit slowing) prices. That is where i think this thread is interesting. Individual posts taken on their own do not merit too much analysis but taken with others do show what the current market is like.


----------



## Duplex

It seems churlish to demand that this thread be shut down.  The subject under discussion is the most significant financial issue to arise in Ireland in decades.  The housing market dominates our economy and the futures of hundreds of thousands of Irish people.  I appreciate that an open frank discussion of contentious topic is disagreeable to a small minority; but I think it would be foolish to stop a debate to protect their censorious sensibilities.


----------



## Maine

ct_roy said:


> Most insightful post yet. I too agree. People must understand that if "the crash" does come - the banks are ultimately the most exposed.
> 
> Japanese banks have still not fully recovered from their property bubble being popped 15 years ago.
> 
> As you say, add to this that the real interest rate (rate minus inflation) in Japan was negative for a prolonged period in the 90's as a combative measure which failed and I shudder at the prospect of a clapped out Irish banking sector teeming with bad debts and no control over monetary policy.
> In short, our interest rates will be significantly higher than those an Irish Central Bank would maintain - the complete opposite to the current (albiet changing) environment - this would be a complete economic disaster and would be unprecedented in modern western economic history. (unless it's already occuring elsewhere in the EMU - I haven't been keeping my economic ear to the ground of property markets in mainland europe of late)


----------



## phoenix_n

Maine said:


> Re above see Davys Stockbrokers Starting Points 15 August 2006 which says that New York hedge funds are already short selling a Irish bank on fears of a slowdown in commercial property lending. The hedge funds may be premature depending on yuor view but these are not stupid people.


 
Do you have a link to this ?


----------



## Guest107

phoenix_n said:


> Do you have a link to this ?



Lord God Man 

Find todays commentary on www.davy.ie, note the date in the file name, change the filename to the date he stated and hey presto

http://www.davy.ie/other/pubarticles/eqbrief20060815.pdf

There is the comment , it relates to shorting of Anglo Irish in New York.

Anglo tend to lend to developers more than end users !


----------



## soma

gearoidmm said:


> it's probable better just to keep one open to keep all the property bears occupied.



I've just had a mental image of all of us bears being penned-in in the "AAM Zoo"


----------



## langball

wjc said:


> How many international investors or high net worth individuals like Desmond or Magnier do you see investing in apartments and semi-detached houses in commuterland? With yields of 1-2% how would you expect them to. At the end of the day it will all come down to economic fundamentals. The only real wealth generated in the property market in the last few years has been the enormous transfer of money from housebuyers ( mostly borrowed ) to developers and development land owners. The whole thing reminds me of a few of those pyramid schemes in the news earlier in the year. The ones that will be burnt are the last ones in.


 
I heard Desmond give a speech at xmas to a few hundred of his employees (of which I was one) - he advised people not to buy property this year as a correction is coming. I was surprised he would choose such a time to say such a thing but was happy that one of the wealthiest men in the country vindicated my decision to sell. One girl who had just bought a house acted like it was the end of the world; like the crash was already upon us and she was stuck holding the baby. Can DD can see into the future? I don't think so but he makes a lot of smart decisions and he was giving advice for free that night. 

Money means nothing in Ireland because the banks are giving it away. They are under pressure to post records profits year on year. A lot of people have no idea of the value of a euro and what it means not to have it - I predict a lot of bankrupt people with massive mortgages on properties not worth near the purchase price (happened to a relation of mine in the uk 15 years ago). 

As an aside, I know someone who made 30k in the cork pyramid scheme, he had to screw his brother and father for 5k to get it tho. IMO the property market is just a bigger version of this.


----------



## bearishbull

langball said:


> I heard Desmond give a speech at xmas to a few hundred of his employees (of which I was one) - he advised people not to buy property this year as a correction is coming. I was surprised he would choose such a time to say such a thing but was happy that one of the wealthiest men in the country vindicated my decision to sell. One girl who had just bought a house acted like it was the end of the world; like the crash was already upon us and she was stuck holding the baby. Can DD can see into the future? I don't think so but he makes a lot of smart decisions and he was giving advice for free that night.
> 
> Money means nothing in Ireland because the banks are giving it away. They are under pressure to post records profits year on year. A lot of people have no idea of the value of a euro and what it means not to have it - I predict a lot of bankrupt people with massive mortgages on properties not worth near the purchase price (happened to a relation of mine in the uk 15 years ago).
> 
> As an aside, I know someone who made 30k in the cork pyramid scheme, he had to screw his brother and father for 5k to get it tho. IMO the property market is just a bigger version of this.


At least the woman had the chance to sell after xmas if she really beleived his prediction. You dont have to be psychic to forsee a correction, theres limits to amount people can borrow and logic tells you when that point is reached prices wont increase , then if you have a speculator/investor element amounting to 40% of properties its clear that much of this speculative element will dry up reducing demand further while supply is still massive, and so it begins.


----------



## miju

ninsaga said:


> That in itself is injecting a negative sentiment towards the seller.......


 
my simple reply to that is , if the vendor was already negative about prices i wouldnt have gotten the reply i did


----------



## langball

People who think buying an apartment on the stillorgan dualer for 600k is a good idea should have their head examined. They should see what they would get in Richmond outside London or in Manhattan for the same amount of money, i.e. not something with walls made of plasterboard which are thrown up in a few weeks and will be lucky to last 10 years. 

I am embarassed by what has happened in this country in the last few years and have even less respect for the politicans than I had previously. Are there any recent examples of a country who became incredibly 'rich' overnight similar to ireland - would other countries that crave wealth allow it to run amok? How did the countries of eastern europe deal with the price increases in recent years? 

Mcwilliams wrote about the spanish empire earlier this year - some of his analogies are interesting - he claims they never really recovered from their gold boom in the 16th century [broken link removed]


----------



## beattie

langball said:


> I heard Desmond give a speech at xmas to a few hundred of his employees (of which I was one) - he advised people not to buy property this year as a correction is coming.


 
Very interesting to hear DD said this. Did he give any indication that it would be large or small in scale?


----------



## ninsaga

miju said:


> my simple reply to that is , if the vendor was already negative about prices i wouldnt have gotten the reply i did



ah yes....wheel kicker is the term that comes to mind


----------



## langball

beattie said:


> Very interesting to hear DD said this. Did he give any indication that it would be large or small in scale?


 
No. I think his exact words were "I did'nt get where I am by being a pessimist but I will give you one piece of advice for next year .. dont buy property in Ireland because there is a correction due" (we were then treated to an apalling comedy improv of his choosing )


----------



## househunter7

the whole set up of the property market is wrong now. It cannot sustain itself. it is horrible now to think that the average working man in his mid 20s when he should be ready to leave his parents home cannot afford to buy a house on his own, like many men on average wages in the 70s and 80s were still capable of buying a house without relying on a wifes salary.

How is there still so many people plunging their money into average 3 bed houses for over €400,000 even now? is this not a total waste, or can they not see it?


----------



## liteweight

Duplex said:


> It seems churlish to demand that this thread be shut down.  The subject under discussion is the most significant financial issue to arise in Ireland in decades.  The housing market dominates our economy and the futures of hundreds of thousands of Irish people.  I appreciate that an open frank discussion of contentious topic is disagreeable to a small minority; but I think it would be foolish to stop a debate to protect their censorious sensibilities.



I agree that the property market is a most significant financial issue. However, I do not consider people contacting vendors and putting in a false bid as contributing to an 'open', 'frank' debate. Especially when the purpose is simply to report back on AAM with regard to a perceived fall in property prices!!

I am neither churlish nor censorious but I do object to unethical behaviour! Perhaps you should re-read the posts that came before mine!!


----------



## miju

you mean as opposed to when gazumping happens liteweight?

what i did wasn't unethical at all , what vendors / RA's do with gazumping now that's unethical , shoe , other foot etc , etc 

it really does work both ways and again as i said before i didn't string the vendor along , it was a simple email enquiry and when the reply came i sent a politely worded email back saying no thanks


----------



## Fergal

Corrections are large changes that address fundamental changes in a market place. They can be up as well as down.

Prices have undergone a correction for the last 10 years. Previously a landlord could buy property and expect his tentants to pay off the mortgage.  The correction now means that the landlord also needs to come up with substantial capital (say 40% of the purchase price) in order for rental income to pay the mortgage.  So it's not as easy as it used to be to build up your property portfolio.

Unless interest rates rise above 7% and/or unemployment takes a very big hit, the correction will remain in place.

Remember that the term of your 35yr mortgage can be reduced after several years have gone by.  

Houses are only expensive the day you buy one.


----------



## miju

so let me get this logic right fergal , the market is currently undergoing a correction but in terms of price rising further / not falling becuase landlords need to subsidise their tenants so the landloard cant build up his property portfolio as easy???????????????? please explain your reasoning behind that little gem (we'll ignore the silly cliche about reducing mortgage  )

meanwhile back in reality....................


----------



## Bedsit

*Dunne expands portfolio with Hume House swap (11/08/06)*

"Property developer Seán Dunne has significantly increased the footprint of his portfolio in Ballsbridge with a deal to acquire the Hume House office block adjoining the Jurys Hotel complex on Pembroke Road."

([broken link removed])

I just wonder as to what makes this guy so bullish on Irish property. He is a big property developer and must have insights into the market, and has spent nearly 400 million in amassing a landbank in Ballsbridge. What does he know that the rest of us have missed?


----------



## StoppedClock

langball said:


> No. I think his exact words were "I did'nt get where I am by being a pessimist but I will give you one piece of advice for next year .. dont buy property in Ireland because there is a correction due" (we were then treated to an apalling comedy improv of his choosing )


 
At least we know where the smart money *isn't* going...


----------



## Fergal

miju said:


> so let me get this logic right fergal , the market is currently undergoing a correction but in terms of price rising further / not falling becuase landlords need to subsidise their tenants so the landloard cant build up his property portfolio as easy???????????????? please explain your reasoning behind that little gem (we'll ignore the silly cliche about reducing mortgage  )
> 
> meanwhile back in reality....................


 

I inject enough capital so that the tentants rental income covers the mortgage.  Have done so for years.  Previously it was easy to expand the business.  It is less easy now and so I think the correction is nearing an end.

I hear people complaining about 35yr mortgages for small houses.  Stepping up repayments to reduce the term is hardly a cliche.


----------



## miju

Fergal said:


> I inject enough capital so that the tentants rental income covers the mortgage. Have done so for years. Previously it was easy to expand the business. It is less easy now and so I think the correction is nearing an end.


 
suppose i may as well be blunt here

your not making any sense what so ever , could you perhaps not talk in riddles and spell out exactly what your waffling about


----------



## StoppedClock

miju said:


> suppose i may as well be blunt here
> 
> your not making any sense what so ever , could you perhaps not talk in riddles and spell out exactly what your waffling about


 
I agree, no disrespect Fergal but I cannot follow you at all.


----------



## ninsaga

langball said:


> No. I think his exact words were "I did'nt get where I am by being a pessimist but I will give you one piece of advice for next year .. dont buy property in Ireland because there is a correction due" (we were then treated to an apalling comedy improv of his choosing )



Similar to the stock market dynamics then....

- have many saying that the stock in question is overvalued
- have the analysts give a neutral, hold down grade position
- market gets shaky
- stockholders flee the market
- share value decreases to bargain basement pricing
- market movers buy in & then 'talk up' the share

..... see it from time to time on Bloomberg where some analysts come in a slate a particular company........then market is driven on emotion


----------



## walk2dewater

miju said:


> suppose i may as well be blunt here
> 
> your not making any sense what so ever , could you perhaps not talk in riddles and spell out exactly what your waffling about


 
Miju, Fergal "bought in the 80s", does that explain it?


----------



## StoppedClock

ninsaga said:


> Similar to the stock market dynamics then....
> 
> - have many saying that the stock in question is overvalued
> - have the analysts give a neutral, hold down grade position
> - market gets shaky
> - stockholders flee the market
> - share value decreases to bargain basement pricing
> - market movers buy in & then 'talk up' the share
> 
> ..... see it from time to time on Bloomberg where some analysts come in a slate a particular company........then market is driven on emotion


 

I don't think a pronouncement at a company do would have much of an effect on Irish sentiment as a whole (it is certainly no bloomberg), if that was the goal I would assume he could use his profile to get much broader coverage.   Sounds to me like a quiet word to hie employees


----------



## langball

ninsaga said:


> Similar to the stock market dynamics then....
> 
> - have many saying that the stock in question is overvalued
> - have the analysts give a neutral, hold down grade position
> - market gets shaky
> - stockholders flee the market
> - share value decreases to bargain basement pricing
> - market movers buy in & then 'talk up' the share
> 
> ..... see it from time to time on Bloomberg where some analysts come in a slate a particular company........then market is driven on emotion


 
I see what you are saying but who knows what the guy will do next. I think he was looking at an oil refinery in canada a few months ago according to the sbpost. He got rid of London City airport at a massive profit so the only property I know of that he has is his house on Ailesbury road, his house in Gibraltar and his sandy lane hotel in barbados ... I doubt he will be getting in on the buy to let market any time soon. With nearly 2 billion in the bank he wont need the hassle


----------



## Fergal

I mean that when I purchase new property, I put in about 40% capital and get a 60% mortgage. Then rental income covers the montly mortgage payments. I have been doing this for years. However previously I had to stomp up only 20% capital with 80% mortgage.

I don't understand posters who talk about tentants subsidising landlords. If tentants income had always covered the entire purchase, I would own the entire country by now. It is never easy to buy property.


----------



## Guest107

Bedsit said:


> He is a big property developer and must have insights into the market, and has spent nearly 400 million in amassing a landbank in Ballsbridge. What does he know that the rest of us have missed?



This will be an ultra top end development in an ultra top end part of D4. A gated high security community where those who coined it during the boom and had the cop to bank the cash will feel safe . 

Going Forward......like


----------



## Duplex

Fergal said:


> I mean that when I purchase new property, I put in about 40% capital and get a 60% mortgage. Then rental income covers the montly mortgage payments. I have been doing this for years. However previously I had to stomp up only 20% capital with 80% mortgage.
> 
> I don't understand posters who talk about tentants subsidising landlords. If tentants income had always covered the entire purchase, I would own the entire country by now. It is never easy to buy property.


 
Are you buying with just rental yield in mind Fergal?

Do you remember when rental yields on residential property were in excess of 10%?


----------



## walk2dewater

Fergal said:


> I mean that when I purchase new property, I put in about 40% capital and get a 60% mortgage. Then rental income covers the montly mortgage payments. I have been doing this for years. However previously I had to stomp up only 20% capital with 80% mortgage.
> 
> I don't understand posters who talk about tentants subsidising landlords. If tentants income had always covered the entire purchase, I would own the entire country by now. It is never easy to buy property.


 
Here’s why ALL of todays landlords are effectively subsidising tenants:

Besides members of the outdoor society people need to live somewhere, right? Essentially, there's two choices, rent or buy.

Ireland at the moment is full of very very nice people. One of these nice people a few years ago bought the property I live in. Ive got a deal with him to let me live in it for a fraction of what a mortgage would cost me. Isnt that nice of him?

Now you might say well Im paying his mortgage arnt I? Well yes of course I am. And you might say well wouldn’t you be better off buying the place yourself then? Well I’m a little short of the current asking price, buts lets say I did have the extra couple hundred grand. So I plonk down the full asking price and I get what, negative 1 or 2% net real return on my money? No thanks, Im up north of 50% in real terms the last 18mths investing in other things.

See Fergal, my landlord is a sap. Even if he owns the place outright, he is still a sap for losing money every day on his capital. If were him I'd sell and put the money to better use. But he wants to subsidise me. Fine by me!! Meanwhile I get to live for peanuts in his fine property, while my money is off doing very very productive things.


----------



## StoppedClock

2Pack said:


> This will be an ultra top end development in an ultra top end part of D4. A gated high security community where those who coined it during the boom and had the cop to bank the cash will feel safe .
> 
> Going Forward......like


 
So he has spent 400m ammassing landbank in Ballsbridge (does this include the 130m estimate of value of swap?)

Sorry posted in error, still finishing this one off


----------



## Calina

Fergal said:


> I mean that when I purchase new property, I put in about 40% capital and get a 60% mortgage. Then rental income covers the montly mortgage payments. I have been doing this for years. However previously I had to stomp up only 20% capital with 80% mortgage.
> 
> I don't understand posters who talk about tentants subsidising landlords. If tentants income had always covered the entire purchase, I would own the entire country by now. It is never easy to buy property.



Then you are completely missing the point of the problem as it exists in the current market. People are not doing this. They are buying property but not at a rate where their rental income covers their mortgage repayments. Just because you do it differently does not mean that everyone is so sensible. The fact that it has changed that you have to put in 40% instead of 20% should be telling you this. There are people whose rental income does not even cover the interest part of their mortgage repayment, and there are people whose rental income doesn't cover their IO mortgage. 

Do you think that this is healthy? You probably would reply by saying "well they should put more into the capital side when they are acquiring property" but a lot of would be investors are not actually able to do this. With them out of the market then it is entirely feasible to suggest that property prices would be a little lower and additionally, the supply profile of Irish property would be somewhat different. According to recent figures which have been linked ad infinitum on this site, up to 40% of last year's output was acquired by investors and this in a market of falling or static rents.


----------



## langball

2Pack said:


> This will be an ultra top end development in an ultra top end part of D4. A gated high security community where those who coined it during the boom and had the cop to bank the cash will feel safe .


 
I can only imagine the 'sophisticated' advertising campaing lures they would use to flog that. 

This has to be the best one yet, I cant get over it: http://www.dundrumpoint.ie/dp_brochure.pdf

Theres this stuff which sounds like nobody I know; 


> Your lifestyle is not off-the-peg, so why should the design of your home be generic? Cooking an elaborate dinner one evening, ordering in Chinese the next. At the gym in the morning, relaxing with a bottle of wine at night. As comfortable in cocktail wear as you are in your favourite jeans, the heart of living well lies in the details: the unassuming elegance of excellent design, stylish appliances that work hard for you, windows which glide open, flooring and finishes that welcome you home, a space that fits the way you like to live.


 
They have a quote from former political prisoner and poet ezra pound (who wrote a book about the sham that is the US federal reserve) 




> " A REAL BUILDING IS ONE ON WHICH THE EYE CAN LIGHT AND STAY LIT." - Ezra Pound


 
what sort of country is this that we live in? has it changed that much that people are so devoid of any interests except property and consumerism? that is whats known as conspicuous consumption 

maybe I secretly want a concierge and to shop in harvey nicks  - doubt it tho


----------



## Remix

LMAO Langball !

I'm all for good living and celebration but I think it's the fact that the aspirations and delusions wealth are based on 
massive borrowing, disappearing fundementals and a transient property bubble that makes this sort of verbage so funny in Ireland.


----------



## Guest107

lots and lots of cute chickies in cocktail dresses , do Dundrumeroids not work for a living ???


----------



## Duplex

To think they cut down perfectly healthy trees, minding their own business to produce this tat.


----------



## Fergal

Duplex - I have never flipped a house.  Since the majority of the rental income is used to pay off mortgages, in the short term I am not really in it for the rental income.  When I stop investing in new houses, the rental income will start to significantly exceed the mortgage repayments.  The rental yield tends to follow interest rates so when yield was high, so too were the repayments.

walk2dewater - You seem to have great skill in investing in non-property related activities.  And if you can get your capital to work more effectively in shares or gold or futures then well done and I wish you every success.  Who knows, I may be your landlord.  I think it is unfair to describe me as a 'sap'.  I know property and have been specialising in this market for many years before the boom.  Booms may come and go but the houses will still be standing and will provide rental income.

Calina - investors who flip houses are clearly exposed to a sudden loss.  If very many investors are doing this then I would agree that the market is unhealthy. My main argument here is that while it has been relatively easy to build up a portfolio until now, the correction has made it less easy.  Hence I see forecasts here of a drop of 40% by Christmas as very speculative.  If it did happen then I would of course be able to more easily expand my business.

I'm afraid to say that in many (though by no means all) of the bears here seem to be more obsessed with the pending crash than any bull about the future.  Just look at how many posts you can see in one day from the same people.  Are these people supposed to be working? This is why people with more balanced (less extreme if you prefer) views are glad that the doomsayers are confined only to this thread.

Another observation is that many of the bears assume that the investors are severely lacking in intelligence.  One comment from an earlier poster was that I was .lucky'.  But I have always factored in effects of sudden drops of up to 30% in value and never leverage beyond that. To assume that you know more that the majority is generally risky and may cause you to miss out on opportunities.


----------



## Duplex

As this thread is about public sentiment towards the housing market, I thought it might be interesting to see what Google Trends might reveal. It seems that the search for the term 'property' has fallen over the past twelve months in Ireland. 



http://www.google.com/trends?q=property&ctab=1&geo=IE&date=all


----------



## Maine

A substantial number of landlords in past 3 years are looking not at yields but at capital appreciation.  

I happened to be in New York when the Nasdaq went past 5000 and everyone was piling in.  It then dropped all the way down to c 1600 and is today below 2200.  When sentiment turns on speculative assets then its gets very illiquid.

We also have low cash savings which means if people cannot remortgage and they temporarily fall on hard times even for a few months its going to be difficult to pay the mortgages and the bills.


----------



## SteelBlue05

Duplex said:


> As this thread is about public sentiment towards the housing market, I thought it might be interesting to see what Google Trends might reveal. It seems that the search for the term 'property' has fallen over the past twelve months in Ireland.
> 
> 
> 
> http://www.google.com/trends?q=property&ctab=1&geo=IE&date=all


 
Check out the trends for "Daft" - may explain the increase in properties for sale that people love posting about here. Its just a more popular site.

http://www.google.com/trends?q=daft&ctab=1&geo=IE&date=all


----------



## Duplex

Fergal said:


> Duplex - I have never flipped a house. Since the majority of the rental income is used to pay off mortgages, in the short term I am not really in it for the rental income. When I stop investing in new houses, the rental income will start to significantly exceed the mortgage repayments. The rental yield tends to follow interest rates so when yield was high, so too were the repayments.


 
Rental yields tend to follow capital values, rents follow real incomes growth. You have weighed up the risks and seem happy with the results so good luck.


----------



## Duplex

SteelBlue05 said:


> Check out the trends for "Daft" - may explain the increase in properties for sale that people love posting about here. Its just a more popular site.
> 
> http://www.google.com/trends?q=daft&ctab=1&geo=IE&date=all


 

Check out 'Spanish Property', fine example of the cyclical nature of speculative markets.

http://www.google.com/trends?q=spanish+property&ctab=1&geo=all&date=all

Or the waning interest in Floridian property;

http://www.google.com/trends?q=spanish+property,+florida+property&ctab=1&geo=all&date=all


----------



## phoenix_n

Check out German Property. 

http://www.google.com/trends?q=german+property&ctab=1&geo=all&date=all


----------



## Duplex

Worth noting that the Google trends data is backed up with actual market evidence in relation to the Spanish market. 

[broken link removed]

Sentiment I guess.


----------



## tyoung

Maine
        Davy's put the Irish savings rate at 15% which is much higher than US UK, Spain, Aus etc and should act as a cushion  as IR rise.


----------



## SteelBlue05

tyoung said:


> Maine
> Davy's put the Irish savings rate at 15% which is much higher than US UK, Spain, Aus etc and should act as a cushion as IR rise.


 
Is that figure skewed by the SSIAs?


----------



## edo

to all the bears out there


http://www.cagle.com/working/060815/beeler.gif



Its Friday - have a good weekend folks!


----------



## miju

searching for irish property would probably have been better , and this trend doesnt track websites it tracks search terms , if you ask me if someone knows the site daft.ie they aint really gonna google it are they that would be pretty damn ehh well daft 

interesting thing to note with that google trend is that pretty much all the search terms for irish property have actually come from ireland (hmmmmmmmmmmmm) 


http://www.google.com/trends?q=irish+property&ctab=1&geo=all&date=allhttp://www.google.com/trends?q=irish+property&ctab=1&geo=IE&date=all


----------



## SteelBlue05

miju said:


> searching for irish property would probably have been better , and this trend doesnt track websites it tracks search terms , if you ask me if someone knows the site daft.ie they aint really gonna google it are they that would be pretty damn ehh well daft
> 
> [/quote]
> 
> Yes thats the point, searching for daft would indicate new users who just heard about site but didnt know the address. So more search terms for google would suggest a gain in popularity, a gain in popularity would suggest more ads on daft and therefore the figures quoted about daft need to taken in context of a site that is simply more popular.


----------



## langball

phoenix_n said:


> Check out German Property.
> 
> http://www.google.com/trends?q=german+property&ctab=1&geo=all&date=all


 
That is insane. Yes a 5 room apartment in berlin is reasonable by Irish standards but like someone here said; it is only of value if you actually want to live there. Even then jobs do not pay that much; that goes some way to explain why rent is so low and why you can get a good meal for 3 euros in many parts of eastern berlin. 

If people think it is another 'goldrush' waiting to happen all over again they might find themselves sadly mistaken. It reminds me of the movie where people are scrambling to find the trees that make the big W with the treasure buried underneath!

An american investor recently bought the entire apartment block where a friend of mine lives. That's 40 apartments for 1.2 million euros. I was told that Americans are buying lots of this sort of thing in berlin. Seems like a good idea if you are losing faith in the dollar.

Germany is heavily regulated (no surprises there) and as every amateur investor in ireland should know, tenants have more rights, rent is controlled etc. From having lived there for 2 years I know that when things need to be fixed it can cost quite a lot of money e.g. heating, locks etc. Yes a management company will take care of this for you but as with all services in germany you get efficiency but you pay for it. I would be wary about the hassle and low returns on investment, albeit a small amount. 

This realistic article might deter some from dipping their toe in the speculative german waters  
[broken link removed]


----------



## phoenix_n

langball said:


> That is insane. Yes a 5 room apartment in berlin is reasonable by Irish standards but like someone here said; it is only of value if you actually want to live there.


 
Yields on german property are around 6% to 7%. In fact they suggest you dont buy if they are not at least this. Now compare that to yields in Ireland and I know where the insanity lies.


----------



## tyoung

Steelblue
 Yes. You can read the whole article at davy.ie. It's the weekly market comment.
Regards


----------



## Duplex

I think total SSIA funds amount to about €12 billion, Irish private sector debt growth is running at roughly €5 billion per month.


----------



## whizzbang

SteelBlue05 said:


> Is that figure skewed by the SSIAs?



a lot of which is already spend on credit cards...


----------



## SteelBlue05

whizzbang said:


> a lot of which is already spend on credit cards...


 
And I'd say a fair chunk of it will go into paying off loans from parents\credit unions etc for property.


----------



## whizzbang

tyoung said:


> Maine
> Davy's put the Irish savings rate at 15% which is much higher than US UK, Spain, Aus etc and should act as a cushion  as IR rise.



Do you have a link for this, I wonder what it is 15% of? 15% of people save, people save on average 15% of there savary?

It sounds odd that we have all these savings but yet personal debt is going through the roof.


----------



## whizzbang

SteelBlue05 said:


> And I'd say a fair chunk of it will go into paying off loans from parents\credit unions etc for property.



I think I saw a few of them walking out the door of the Powercity January Sale in 42 inch plasma TV form.


----------



## Maine

All those people ( alot) who purchased homes pre 1998 have lots of savings if they have not purchased additional property.

Those who purchased in recent years have no savings and with higher interest rates / slowing economy will not have until 2020

Fair dues to Feargal for long term approach and profits accumulated.  I have no problem with those who have profited from the boom - thats the market economy.  However the banks who should know better have provided far too high multiples and taken advantage of borrowers.  This has consigned a generation to working for the banks for most of their lives while knowing if they get sick or lose their jobs then it could be curtains.


----------



## miju

SteelBlue05 said:


> Yes thats the point, searching for daft would indicate new users who just heard about site but didnt know the address. So more search terms for google would suggest a gain in popularity, a gain in popularity would suggest more ads on daft and therefore the figures quoted about daft need to taken in context of a site that is simply more popular.


 
NO , NO , NO , NO , all of those searches for daft do not mean the daft.ie website

it the search term daft as in , daft stories , daft pictures etc etc you get what i mean


----------



## ivuernis

tyoung said:


> Davy's put the Irish savings rate at 15% which is much higher than US UK, Spain, Aus etc and should act as a cushion as IR rise.


If that 15% includes SSIA savings then i wonder what it might fall too when the SSIAs are removed.


----------



## SteelBlue05

miju said:


> NO , NO , NO , NO , all of those searches for daft do not mean the daft.ie website
> 
> it the search term daft as in , daft stories , daft pictures etc etc you get what i mean


 
I'd suggest at least 80% of searches for the word "daft" is related to daft.ie 

Who ever searches for "daft stories"?! They would search for "funny stories" etc.


----------



## ninsaga

SteelBlue05 said:


> I'd suggest at least 80% of searches for the word "daft" is related to daft.ie
> 
> Who ever searches for "daft stories"?! They would search for "funny stories" etc.



Just Google daft & look at the amount of links related to daft are there... it might surprise you but the world does not revolve around daft.ie


----------



## shanegl

Google trends is about as useful as Daft.ie in making predictions about the Irish Property market IMO.


----------



## tententwenty

shanegl said:


> Google trends is about as useful as Daft.ie in making predictions about the Irish Property market IMO.



To be honest I completely agree with this. There is little enough that can be learned in the property market from watching trends on a commercial website that may be gaining or reducing in viewers and advertisers at any given time, which also revolves around seasonal factors (not in the property market, in the number of people online). Something else to keep in mind is the age groups of those used to using the internet, versus the age groups of those buying second or investment properties. The demographics are badly skewed here.

The ones to talk to, the only ones I would trust to give a clear picture, are the revenue commissioners. Is there a location where we can get what should be public information, amount of stamp duty paid, taxes and so on, and the number of houses that were sold over the last months and years for each region, preferably with averages, medians and so on extracted and graphed, with a listing of first and second home buyers (as I believe there is a difference between a home to live and a property as an investment from the point of view of the revenue commissioners)?

Anyone got a link or someone we can call to get this info?


----------



## SteelBlue05

ninsaga said:


> Just Google daft & look at the amount of links related to daft are there... it might surprise you but the world does not revolve around daft.ie


 
No, not a surprise, but Daft has a way bigger brand name than any of the other results brought up by google, to me that would suggest that most people searching for daft would be looking for daft.ie rather than 3*daft*monkeys.co.uk or www.*daft*-records.com.

Look, these google trends dont mean much anways.


----------



## miju

SteelBlue05 said:


> Look, these google trends dont mean much anways.


 
indeed they dont but this was brought up as a counter to your reasoning the number of rising properties on daft is solely down to growing popularity when that simply isn't the case

actually , it may be growing in popularity because vendors are seeking more ways of dumping they're properties LOL


----------



## SteelBlue05

miju said:


> the number of rising properties on daft is solely down to growing popularity when that simply isn't the case


 
I dont believe its the sole reason, I dont think I said that but I do believe its needs to be taken into consideration but without anyone here knowing how to quantify that I believe quoting Daft figures is...daft.


----------



## phoenix_n

Need i say it but this continued talk whether google trend results on daft is indeed daft.ie is, well, a little daft !


----------



## SteelBlue05

phoenix_n said:


> Need i say it but this continued talk whether google trend results on daft is indeed daft.ie is, well, a little daft !


 

Yes, and this thread should be locked as its just gone way too big, too vague, and off topic in parts.


----------



## ninsaga

tententwenty said:


> The ones to talk to, the only ones I would trust to give a clear picture, are the revenue commissioners. Is there a location where we can get what should be public information, amount of stamp duty paid, taxes and so on, and the number of houses that were sold over the last months and years for each region, preferably with averages, medians and so on extracted and graphed, with a listing of first and second home buyers (as I believe there is a difference between a home to live and a property as an investment from the point of view of the revenue commissioners)?



eehhh... how's about actually calling the Revenue commissioners  



tententwenty said:


> Anyone got a link or someone *we* can call to get this info?



....what's this _*we*_ business?


----------



## ninsaga

SteelBlue05 said:


> Yes, and this thread should be locked as its just gone way too big, too vague, and off topic in parts.



Yep..there are so many here who accurately predicting specific timelines in relation to what will happen & when it will happen.... how's about one of the taking a quick look into the crystal ball there & giving me the nos for the Euro Millions draw


----------



## miju

SteelBlue05 said:


> Yes, and this thread should be locked as its just gone way too big, too vague, and off topic in parts.


 
as has been said already steelblue , you dont have to post or read this thread if you dont want to and others do and besides other threads will more than likely pop up.

by the way for a fairly definitive statistic on daft.ie website traffic , see here

seems daft.ie traffic is fairly constant and stable with the usual dips and peaks in it's stats SOOO what do the people offering the explanation of rising popularity as causing inventory build say to that?

IMO the daft.ie figures bandied about have a good bit more credibility than before given the above


----------



## Duplex

ninsaga said:


> Yep..there are so many here who accurately predicting specific timelines in relation to what will happen & when it will happen.... how's about one of the taking a quick look into the crystal ball there & giving me the nos for the Euro Millions draw


 

Well here's my crystal ball its called the US housing market.  

http://www.libn.com/article.htm?articleID=36121


----------



## phoenix_n

Duplex said:


> Well here's my crystal ball its called the US housing market.
> 
> http://www.libn.com/article.htm?articleID=36121


 
Good article. That is what will happen by Xmas here. Localised crashes by those that have to sell.


----------



## StoppedClock

Can someone give me a really bearish thought heading into the weekend?


----------



## tententwenty

SteelBlue05 said:


> Yes, and this thread should be locked as its just gone way too big, too vague, and off topic in parts.


Also all the bearish sentiment is terrifying the poor bulls... Bit of a bull yourself there aren't you steel?


----------



## tententwenty

ninsaga said:


> eehhh... how's about actually calling the Revenue commissioners
> 
> ....what's this _*we*_ business?


What, you don't want accurate figures?


----------



## ClubMan

StoppedClock said:


> Can someone give me a really bearish thought heading into the weekend?


http://en.wikipedia.org/wiki/Bear_community


----------



## ninsaga

ClubMan said:


> http://en.wikipedia.org/wiki/Bear_community



Quote:
Originally Posted by wolfie  
Even though im a permanent bear.......

Quote:
Originally Posted by gearoidmm  
......
I'm a definite bear ......

Quote:
Originally Posted by whathome  
Despite my bearish inclination.....


Oooppps.... sorry... didn't mean to 'out' you _guys_


----------



## SteelBlue05

miju said:


> as has been said already steelblue , you dont have to post or read this thread if you dont want to and others do and besides other threads will more than likely pop up.


 
Am I not allowed to give my opinion ? Likewise you can choose to ignore my posts.


----------



## StoppedClock

ClubMan said:


> http://en.wikipedia.org/wiki/Bear_community


 

  Nice one.


----------



## Maine

ninsaga said:


> Quote:
> Originally Posted by wolfie
> Even though im a permanent bear.......
> 
> Quote:
> Originally Posted by gearoidmm
> ......
> I'm a definite bear ......
> 
> Quote:
> Originally Posted by whathome
> Despite my bearish inclination.....
> 
> 
> Oooppps.... sorry... didn't mean to 'out' you _guys_


----------



## Maine

Ninsaga - alot of your comment seem to be directed at others rather than submitting something of use either bullish or bearish


----------



## ninsaga

Maine said:


> Ninsaga - alot of your comment seem to be directed at others rather than submitting something of use either bullish or bearish



ALot maybe..but not all...read back through......


----------



## Jeanne

SteelBlue05 said:


> Yes, and this thread should be locked as its just gone way too big, too vague, and off topic in parts.


 
But you don't have to read if you don't want. I find it fascinating...and I've read from start up to now and still really enjoying it, as I suspect lots of people are. It's so topical.

Can't understand the fixation some people have with locking threads because they're bored of them.


----------



## ninsaga

Jeanne said:


> But you don't have to read if you don't want. I find it fascinating...and I've read from start up to now and still really enjoying it, as I suspect lots of people are. It's so topical.
> 
> Can't understand the fixation some people have with locking threads because they're bored of them.



as a matter of interest... given that you have read from beginning to end....how many times has the same point been made over & over again


----------



## Jeanne

ninsaga said:


> as a matter of interest... given that you have read from beginning to end....how many times has the same point been made over & over again


 
lots of times. But it's interesting to read different people's perspective on the subject. The thread is so long that if a point raised pages before resurfaces again it's fine because it's still topical. And actually I'm enjoying the stats, even the one's you need to take with a pinch of salt!   Also, keep in mind that anyone coming upon this thread might not start at the very beginning so it's useful to have some things repeated.

Honestly, I find some of the regular contributors here really interesting. I know there's a bit of 'jibing' going on but that's only to be expected. Property is a emotive subject for a lot of people, you're either in one camp or the other. There's a lot at stake for some people. But I think contributors here, in general, are keeping it light thus helping to keep it on track and interesting.

Hats off to everyone who has contributed so far. Apart from being imformative, some of the posts are just so amusing and witty, they almost deserve a prize!  

I'm a bear myself and as a matter of interest, the house I'm currently living in will be on the market for sale in a few weeks. We're in Dublin 16 (what's the bet the EA will list it as D 14  ) so I'll be able to give first-hand updates. Will keep you posted.

Oh - and a house around the corner has been For Sale since May and still not sold. Seems like a long time to still be on the market in this area.

Keep it coming y'all!


----------



## thewatcher

ninsaga said:


> as a matter of interest... given that you have read from beginning to end....how many times has the same point been made over & over again


 
The bulls seem absolutely mad to get this thread locked,why ?

While some stuff is repeated,new articles are posted every day from the US,Europe,financial websites,blogs,Real estate websites,foreign immigrants,outsider views,anecdotal evidence is also provided.

By all means post evidence backing up your argument,but this constant calling for the thread to be locked is silly and childish.
Why don't you start your own thread posting the counter arguments for a correction ?I might even take a peek from time to time !


----------



## miju

well said the watcher , instead of constantly calling for the thread to be locked why not counter the arguments with stats , reports of your own and encourage a good healthy discussion from both sides

that is of course if you can find any


----------



## walk2dewater

miju said:


> well said the watcher , instead of constantly calling for the thread to be locked why not counter the arguments with stats , reports of your own and encourage a good healthy discussion from both sides
> 
> that is of course if you can find any


 
Ninsaga has ran out of any water-holding bullish arguments, we all know that it's only BELIEF propping up the pyramid.

But the hour is getting late...


----------



## ninsaga

There have been some silly stats put forward which I have challanged ie.... the 'the house down the road from me hasn't sold for 5 weeks so that means that the bottom is falling out of the market' -type threads..... as well as the repeated 'daft' stats which account for nothing.

I'm looking around in the Cork area & have watched properties in my locality, my parents locality etc. and I have recently seen alot of property change hands with no indication of anyone selling under the asking. That's my experiences of late. 

BTW I am neither very bullish nor bearish (in both contexts of the definition  ). I think that the level of growth will certainly decline ....but as opposed to going into a negative I'm not convinced at all.

ninsaga


----------



## Maine

Does anyone have information on the average age of property purchasers, it will vary between city and country.

Just trying to understand how much evidence there is that demand has been brought forward in the past 12 months by 100% mortgages etc to younger buyers

IMO this may be a factor that has driven the market as banks have in effect created new customers in 2005 / 2006 that would not in normal conditions been customers until say 2007 or 2008.


----------



## dochasach

miju said:


> well said the watcher , instead of constantly calling for the thread to be locked why not counter the arguments with stats , reports of your own and encourage a good healthy discussion from both sides
> that is of course if you can find any



Well said miju. I hope this thread and related threads remain open to share information. I'm not a believer in Ireland's ability to defy the laws of economics forever, but I do believe that we can learn something from watching the slow-motion collapse of property bubbles in other markets:
[broken link removed]
[broken link removed]
[broken link removed]


We are in a position to use this knowledge to cushion our inevitable downturn.  Unfortunately much of the damage has been done:

- The government is addicted to and squandered the enormous stamp duty windfall.

- Our competitiveness is suffering. Businesses are leaving Ireland for places where property (and therefore labor) is more affordable.

- A generation is entering the work force at a time when fallow property earns more than hard-working individuals. The value of work is being lost.

- Businesses and farms are being destroyed for the value of the property that underlies them. Walk through ballsbridge or blackrock and you'll see "to let" signs everywhere. The businesses have left the property, the property lies fallow, 'earning' capital appreciation without contributing anything real to the economy.

- A generation is relying on two or more incomes to support mortgage debt. When both parents and possibly grandparents are working to raise money to buy a house, who is minding the children? And with mortgage terms stretching beyond 35 years, will today's children eventually be saddled with multigenerational loans?

- Sprawling exburbs filled with thousands of shoddy, energy inefficient homes are being built. When "ladder chasers" will buy anything just to get on the first rung, builders have little incentive to build quality housing. These substandard houses will be with us for a long time.
[FONT=Verdana, Arial, Helvetica, sans-serif]
If the "boom" goes on forever have problems, if the boom collapses we have other problems. These problems won't go away if we stop talking about them.

If this thread is locked, we should create another one to talk about personal and government strategies for getting out of this fine mess we've gotten ourselves into. This will be a challenge as Ireland is no longer able to control base lending rates (e.g. the U.S) or devalue its currency (e.g. China) to reduce the carrying cost of debt, deflate the debt and return to economic competitiveness.[/FONT]

You can still find people in bubble denial in parts of the U.S. where inventory has risen several hundred percent and median price has dropped over the past year.  I suspect you'll see the same here even when it becomes obvious to the most daft observer that we're popping. 

I'll agree that if there is evidence of a collapse in Ireland, we are in very early stages, but from the bear's corner, just in case anyone missed it:




			
				iol said:
			
		

> [FONT=Verdana, Arial, Helvetica, sans-serif]The Independent Mortgage Advisors Federation have predicted that the property market bubble will burst next year.
> 
> The mortgage brokers group have warned there are warning signs of major slowdown in the market that could lead to a fall in house prices in 2007.[/FONT]


[FONT=Verdana, Arial, Helvetica, sans-serif]

[/FONT]


----------



## shanegl

..


----------



## liteweight

miju said:


> well said the watcher , instead of constantly calling for the thread to be locked why not counter the arguments with stats , reports of your own and encourage a good healthy discussion from both sides
> 
> that is of course if you can find any



I notice you are very fond of taking your stats from Daft.ie. To my certain knowledge, Daft.ie have changed their scientific method of calculation (using different tables, since a few months ago). Therefore any stats quoted on the website cannot be used to make comparisons i.e. this year to last year. Their reports on rental/purchase in Ireland can only be used anecdotally!

You can verify this by emailing Daft.ie or making a simple phonecall. You should not presume that you are quoting an accurate statistic without first verifying the accuracy of your source.


----------



## ninsaga

despite that you can run down to Paddy powers now & olace a bet that daft stats will be 'factually' presented - yet again- during the course of this thread.


----------



## miju

well you notice wrong litweight NOT ONCE have I posted anything from daft , the only thing I have posted in relation to daft is an up to date website traffic analysis report that is a very reliable source from my own previous experience with other sites I run in terms of traffic accuracy.



			
				liteweight said:
			
		

> To my certain knowledge, Daft.ie have changed their scientific method of calculation (using different tables, since a few months ago). Therefore any stats quoted on the website cannot be used to make comparisons i.e. this year to last year. Their reports on rental/purchase in Ireland can only be used anecdotally!


 
And what do they use these scientific method of calculation to measure may I ask? As daft.ie somehow changed the fundamentals of mathematics and decided to change how they calculate something?

since i never really got involved in the daft.ie argument all i'm gonna say is keep sticking your head in the sand and hope it will all go away , OK denial has never worked before but sure go for it anyway and see what happens


----------



## liteweight

ninsaga said:


> despite that you can run down to Paddy powers now & olace a bet that daft stats will be 'factually' presented - yet again- during the course of this thread.



Exactly and you'll probably find a 'census' man in there too!!


----------



## liteweight

miju said:


> well you notice wrong litweight NOT ONCE have I posted anything from daft , the only thing I have posted in relation to daft is an up to date website traffic analysis report that is a very reliable source from my own previous experience with other sites I run in terms of traffic accuracy.



I did not mean to imply that you had posted from Daft. No site is a reliable source on this information if they have not included the FACT that Daft have changed their scientific method of calculation!! Also Daft i.e can only give information based on their own website!! I suggest you take a harder look at the sites you are using because you obviously know nothing about statistics.





			
				miju said:
			
		

> ..... is keep sticking your head in the sand and hope it will all go away , OK denial has never worked before but sure go for it anyway and see what happens



Are you in the property business at all? How many investment properties do you own?? One, two, PPR?? If not how can you make such comments? What do you back them up with, if you exclude your questionable statistics?? Good eyesight....the house down the road.... If you were talking to one of the stockbrokers on this site, would you argue against stocks and shares based on such flimsy information.

Everyone knows there has to be a correction in the market, but there is no basis in argument for negative equity. Saying that people are in denial, or burying their head in the sand is a 'playground' tactic to silence the opposition.


----------



## liteweight

miju said:


> And what do they use these scientific method of calculation to measure may I ask? As daft.ie somehow changed the fundamentals of mathematics and decided to change how they calculate something?



This is such a shining example of arrogance and ignorance that it deserved a slot of its own!!!! Go back to school for godsake!


----------



## room305

liteweight said:


> Exactly and you'll probably find a 'census' man in there too!!



This crops up a lot. Daft statistics are worse than useless. I wouldn't put much faith in them.

However that census figure of 275,000 vacant homes is true.

Anyone holding an investment property for which they expect to receive capital appreciation would do well to remember this.


----------



## liteweight

The average age of a house purchaser last year was 32 years of age. This year to date the average is 34. This is from memory so if OP is interested in accurate information check out the ESRI etc.


----------



## liteweight

room305 said:


> This crops up a lot. Daft statistics are worse than useless. I wouldn't put much faith in them.
> 
> However that census figure of 275,000 vacant homes is true.
> 
> Anyone holding an investment property for which they expect to receive capital appreciation would do well to remember this.



I realise the census figure is accurate but it does not take into account how many of these properties are sale agreed, awaiting services before occupation, or indeed, how many are being retained by the builder for his own use i.e. future rental. In inner city areas, it does not take into account, the fact, that large blocks in strategic locations are 'rented' by companies who sublet to corporate tenants from abroad. These apartment would only be occupied sporadically, e.g. when a businessman need to visit the IFC or Google for example. It is often more cost affective for companies to rent in this way rather than pay large hotel bills.


----------



## whizzbang

liteweight said:


> I realise the census figure is accurate but it does not take into account how many of these properties are sale agreed, awaiting services before occupation, or indeed, how many are being retained by the builder for his own use i.e. future rental. In inner city areas, it does not take into account, the fact, that large blocks in strategic locations are 'rented' by companies who sublet to corporate tenants from abroad. These apartment would only be occupied sporadically, e.g. when a businessman need to visit the IFC or Google for example. It is often more cost affective for companies to rent in this way rather than pay large hotel bills.



How many would you say fall into these "Legitimately empty" categories?

275,000 is an awful lot of properties.


----------



## liteweight

whizzbang said:


> How many would you say fall into these "Legitimately empty" categories?
> 
> 275,000 is an awful lot of properties.



Agreed, It's impossible to guess how many throughout the country. From my own perspective (and it's only my own), I know of at least 2 apartment blocks in the Dublin 4 area retained by the builder for private use. These are approx. 600 in total. In another area only 1 block of 5 in the development was occupied but all got census forms, this accounts for another 500 alone and that's just from personal experience. These apartments were occupied after the census date. I know these figures are a long way off 275,000 but it is also why I would not consider the census figures as accurate in terms of occupancy.


----------



## ninsaga

Originally Posted by miju  
And what do they use these scientific method of calculation to measure may I ask? As daft.ie somehow changed the fundamentals of mathematics and decided to change how they calculate something?



liteweight said:


> This is such a shining example of arrogance and ignorance that it deserved a slot of its own!!!! Go back to school for godsake!



...going back to my earlier posts...people will only see what they want to see & for someone to pose a stupid question regarding  *daft.ie somehow changed the fundamentals of mathematics and decided to change how they calculate something* ...certainly sums it all up (no pun intended)


----------



## miju

liteweight said:


> I did not mean to imply that you had posted from Daft. No site is a reliable source on this information if they have not included the FACT that Daft have changed their scientific method of calculation!! Also Daft i.e can only give information based on their own website!! I suggest you take a harder look at the sites you are using because you obviously know nothing about statistics.


 
put quite simply your talking through your This post will be deleted if not edited to remove bad language , i've been a web developer for years and know the internet business inside out THERE IS NO SCIENTIFIC FORMULA FOR GATHERING RAW TRAFFIC STATISTICS they are what they are plain and simple , 

are you deliberatly being vague to try and confuse what your talking about or what



liteweight said:


> Are you in the property business at all? How many investment properties do you own?? One, two, PPR?? If not how can you make such comments? What do you back them up with, if you exclude your questionable statistics??
> Everyone knows there has to be a correction in the market, but there is no basis in argument for negative equity.


 
I quite happily own no property and to suggest that becuase someone doesnt own a property cant offer an educated opinion is pure ridiculous , in fact in the context of this thread it would be people like me who could perhaps have their finger more on the pulse of sentiment rather than the jimmy and mary down the road who think they're property tycoons because they're subsidising a tenant in the hope of capital appreciation 



liteweight said:


> Good eyesight....the house down the road.... If you were talking to one of the stockbrokers on this site, would you argue against stocks and shares based on such flimsy information.
> 
> ........
> 
> Saying that people are in denial, or burying their head in the sand is a 'playground' tactic to silence the opposition.


 
no becuase i know absolutely nothing about stocks i can however recognise theres a major shift happening and alot of people ARE burying their heads in the sand with regards to property

as a matter of fact i'm not trying to silence any opposition whatsoever in fact i welcome it otherwise this thread would get boring and not make for a very good debate

ps: you should really stop barking up the wrong tree about statistics or at least understand what the statistics are because i've not posted any other than the website traffic ones



liteweight said:


> This is such a shining example of arrogance and ignorance that it deserved a slot of its own!!!! Go back to school for godsake!


 
so you cant answer the question then i presume , the reason i asked is because i've the funniest feeling your talking about different statistics than the ones I was which really makes you the arrogant / ignorant person and not me , perhaps pay better attention in future


----------



## Guest107

It seems that BoI (quietly) launched the 100% 35 year mortgage this week.


----------



## ninsaga

2Pack said:


> It seems that BoI (quietly) launched the 100% 35 year mortgage this week.



...and what do you conclude from that?


----------



## shanegl

miju said:


> put quite simply your talking through your This post will be deleted if not edited to remove bad language , i've been a web developer for years and know the internet business inside out THERE IS NO SCIENTIFIC FORMULA FOR GATHERING RAW TRAFFIC STATISTICS they are what they are plain and simple ,



He's talking about the housing market statistics that Daft released.

Internet traffic has nothing to do with the housing market anyway. Popularity as a vendor doesn't necessarily mean that more buyers are visiting the site. Don't forget the site is also used for _renting_.

I suggest getting back on topic if you want to keep the thread open.

Interesting product launch from BOI. This seems to be the last squeeze of affordability.


----------



## Guest107

liteweight said:


> Agreed, It's impossible to guess how many throughout the country. From my own perspective (and it's only my own), I know of at least 2 apartment blocks in the Dublin 4 area retained by the builder for private use. These are approx. 600 in total. In another area only 1 block of 5 in the development was occupied but all got census forms, this accounts for another 500 alone and that's just from personal experience.


Thats 1000  of them. Irrespective of why they are empty they are inhabitable and empty and they overhang the market. Ultimately they will be sold or rented and will help to swamp either of those markets.


> These apartments were occupied after the census date. I know these figures are a long way off 275,000 but it is also why I would not consider the census figures as accurate in terms of occupancy.


They were accurate in April 2006 . 17% of the national housing stock empty is a scandal TBH.

There are places like Carrick on Shannon with swathes and swathes of tax designation empties in them. Wander around some Monday night and see the amount with not lights on. 

Places like Enniscrone and Bundoran in the winter ...or indeed in April are full of Seaside Resort scheme empties as well.

Even once you take out the Rural Renewal empties and Seaside Resort empties you are still looking at 250,000 empties nationwide or 15%

Some places are destroyed by market (not tax) driven holiday homing such as Roundstone in Connemara or Lahinch in Clare or Dunfanaghy in Donegal where much of the property is fallow most of the year. 

Nevertheless *I will wager that there are 150000 properties empty in areas where there is all year round demand.* 

By any *normal measure* of demand *thats three years worth of building that will not be done* as the properties are finally brought onto the market for disposal in the absence of paper capital gains.


----------



## miju

shanegl said:


> He's talking about the housing market statistics that Daft released.
> 
> Internet traffic has nothing to do with the housing market anyway. Popularity as a vendor doesn't necessarily mean that more buyers are visiting the site. Don't forget the site is also used for _renting_.


 
i know he was but in his / her arrogance didnt even bother to check the link otherwise would have known that.

the website statistics were posted as rebutal from the bulls saying that daft.ie is growing in popularity hence the increase in the amount of properties for sale when in fact daft.ie's traffic seems to stay pretty much the same throughout the whole year which debunks the bulls theory reposes the original question


----------



## shanegl

miju said:


> i know he was but in his / her arrogance didnt even bother to check the link otherwise would have known that.



Then there was no need for this:


> put quite simply your talking through your This post will be deleted if not edited to remove bad language , i've been a web developer for years and know the internet business inside out THERE IS NO SCIENTIFIC FORMULA FOR GATHERING RAW TRAFFIC STATISTICS they are what they are plain and simple ,
> 
> are you deliberatly being vague to try and confuse what your talking about or what


I'd really like this thread to be kept open  



> the website statistics were posted as rebutal from the bulls saying that daft.ie is growing in popularity hence the increase in the amount of properties for sale when in fact daft.ie's traffic seems to stay pretty much the same throughout the whole year which debunks the bulls theory


As I said, it may increase in popularity as a vendor for various reasons (costs etc) without an increase in interest from buyers.


----------



## Guest107

miju said:


> the website statistics were posted as rebutal from the bulls saying that daft.ie is growing in popularity hence the increase in the amount of properties for sale when in fact daft.ie's traffic seems to stay pretty much the same throughout the whole year which debunks the bulls theory reposes the original question



I spoke extensively about the implications,  as I see them,  of Daft in this very thread in July but have since undertaken not to comment on them , for a while !!!!!

I will dredge it *all *up again come November, I promise


----------



## miju

the daft effect?????

  

actually, had an interesting conversation with a friend i hadn't seen in ages yesterday, the conversation turned towards property as he mentioned he was buying a new place with his missus (he currently owns a place and so does she) , i asked him on his opinion on where prices will go and his reply was "oh they'll drop really soon but not by alot" to which my reply was "in that case would you not consider selling the two properties now and buy back in when they drop???" i was met with a bit of a blank look followed by the reply "sure i'll see how high they go and when they start to drop then i'll sell" at which point i just simply had to change the topic of conversation

meanwhile he's planning to buy another house now with his missus and between them they'll have three mortgages , irrational isn't the word


----------



## Guest107

Yah 

2Packs Daft Effect


----------



## beattie

liteweight said:


> I know of at least 2 apartment blocks in the Dublin 4 area retained by the builder for private use. These are approx. 600 in total. In another area only 1 block of 5 in the development was occupied but all got census forms, this accounts for another 500 alone and that's just from personal experience.


 
Where is this development in D4, what will happen when the whole area around Jury's gets redeveloped I wonder...


----------



## fatmanknows

beattie said:


> ............. what will happen when the whole area around Jury's gets redeveloped I wonder...


 
IMO Sean Dunne's vision of creating a Dublin Knightsbridge or Manhattan is just that...a dream. It ain't goona happen in the next decade. 

Never think people who have previous been very successful are infallible. Bigger brains than Mr Dunne have got it spectacularly wrong in every other property market.


----------



## liteweight

miju said:


> put quite simply your talking through your This post will be deleted if not edited to remove bad language , i've been a web developer for years and know the internet business inside out THERE IS NO SCIENTIFIC FORMULA FOR GATHERING RAW TRAFFIC STATISTICS they are what they are plain and simple ,



Charming, may I suggest you check you're own orifices....you'll propbably find you're head up there!!! Who was talking about gathering raw traffic statistics....not me or anyone else on this thread as far as I know. Just you then...not knowing that raw traffic statistics have nothing to do with the housing market. Are you deliberately trying to blur the edges on this issue??



			
				miju said:
			
		

> are you deliberatly being vague to try and confuse what your talking about or what


 
No offence but being a web designer doesn't give  you any  authority to spout statistics. Of course statistical software packages are out there. One of which is SPSS!!!  How do you think the government bodies get their statistical information?? It's considered a science and I have no inclination to teach you the arts of it on this thread!




			
				miju said:
			
		

> I quite happily own no property and to suggest that becuase someone doesnt own a property cant offer an educated opinion is pure ridiculous , in fact in the context of this thread it would be people like me who could perhaps have their finger more on the pulse of sentiment



I don't recall saying that 'people who do not own property' can't offer an educated opinion. My post was in reference to you, making sweeping generalisations without anything to back them up. When you  give the impression that these generalisations are backed by statistics then that's another matter! 




			
				miju said:
			
		

> rather than the jimmy and mary down the road who think they're property tycoons because they're subsidising a tenant in the hope of capital appreciation



Another generalisation. How do you purport to know how many of your 'johnnys and marys are out there?





			
				mije said:
			
		

> alot of people ARE burying their heads in the sand with regards to property



How do you know?? You've accused me of this and it couldn't be further from the truth!



			
				miju said:
			
		

> as a matter of fact i'm not trying to silence any opposition whatsoever in fact i welcome it otherwise this thread would get boring and not make for a very good debate



Glad to hear it.



			
				miju said:
			
		

> ps: you should really stop barking up the wrong tree about statistics or at least understand what the statistics are because i've not posted any other than the website traffic ones



Well perhaps if you had stated that you only posted website traffic, the more enlightened could have passed on their knowledge to you with regard to statistics and their accuracy  [/quote]


----------



## Maine

_


dochasach said:



			Well said miju. [FONT=Verdana, Arial, Helvetica, sans-serif]If this thread is locked, we should create another one to talk about personal and government strategies for getting out of this fine mess we've gotten ourselves into. This will be a challenge as Ireland is no longer able to control base lending rates (e.g. the U.S) or devalue its currency (e.g. China) to reduce the carrying cost of debt, deflate the debt and return to economic competitiveness.[/FONT]

Click to expand...

_


dochasach said:


> Ireland can regain control over all the above - leave the euro but that debate wont be on the table until 2010 or 2011. A key reason for this debate will be that Ireland will need to run big budget deficits of 6% to 8% post 2010 like Japan did which will be forbidden by rules. Ireland entered the euro with our economy in a different cycle to the continent - we should have waited a few years. Not being in the Euro has not harmed the UK.
> 
> BOI's 35 yr 100% mortgage reflects trying to get to new younger customers in mid 20s and keep demand ramped up. Like alcopops from the drinks industry except there are limits imposed there by govt. These products push slowdown well into 2007 but mean that demand further out in a slowdown 2009 / 2010 will be reduced.


----------



## Guest107

ninsaga said:


> ...and what do you conclude from that?



I said "(quietly)" , thats my conclusion. If you recall the orignal post you queried.



			
				2Pack said:
			
		

> It seems that BoI (quietly) launched the 100% 35 year mortgage this week.



Were I to state the same _without a conclusion_ I would thought I would have said

"BoI launched the 100% 35 year mortgage this week."

I Hope This Helps.


----------



## Guest107

Maine said:


> A key reason for this debate will be that Ireland will need to run big budget deficits of 6% to 8% post 2010 like Japan did which will be forbidden by rules.


We are not Italy and will be allowed to run a 6-8% deficit for 3-4 years which is all thats required as the banks take the hit quickly . We will still stop before we hit 60% of GDP unlike the almost bankrupt Italians.

The important thing is to get it over with fast, within 3 years or max 4. Propping it up as it deflates with fiscal sticky plaster is pointless.



> BOI's 35 yr 100% mortgage reflects trying to get to new younger customers in mid 20s and keep demand ramped up. Like alcopops from the drinks industry except there are limits imposed there by govt.



LOL  , kiddie mortgages to get them young eh.

It really Shows how few properly bankable propositions there are out there .

Next up the lifetime mortgage and the mortgage that will be paid off by the as yet unborn.....thats how far the Japanese went before it went splat in the early 1990s


----------



## tententwenty

liteweight said:


> Charming, may I suggest you check you're own orifices....you'll propbably find you're head up there!!!



Settle down liteweight. Yes, we all know that Daft stats aren't worth a toss, but theres no need to get personal. Yourself, ninsaga, and steel are the bulls of this thread from what I can see so far, presumambly due to being somewhat exposed yourselves. Your opinions are more than welcome, but it would be better to back them up with actual reasons rather than just shouting for the thread to be closed (which isn't going to happen, since you know the owners of AAM are loving the hit count-why would they kill the golden goose?). 

If there are no reasons, then we know you're just panicking.

I mean ninsaga said there that there was no reason for capital depreciation. Back it up or pack it up.


----------



## fatmanknows

tententwenty said:


> Settle down liteweight. Yes, we all know that Daft stats aren't worth a toss, but theres no need to get personal. Yourself, ninsaga, and steel are the bulls of this thread from what I can see so far, presumambly due to being somewhat exposed yourselves. Your opinions are more than welcome, but it would be better to back them up with actual reasons rather than just shouting for the thread to be closed (which isn't going to happen, since you know the owners of AAM are loving the hit count-why would they kill the golden goose?).
> 
> If there are no reasons, then we know you're just panicking.
> 
> I mean ninsaga said there that there was no reason for capital depreciation. Back it up or pack it up.


 
Hear hear, twentytwenty


----------



## Jeanne

ninsaga said:


> There have been some silly stats put forward which I have challanged ie.... the 'the house down the road from me hasn't sold for 5 weeks so that means that the bottom is falling out of the market' -type threads


 
On a few occasions I have noted on this thread that a house near me in Dublin 14 has been on the market since May. This is a fact and very relevant to the topic at hand. It does not necessarily mean the bottom is falling out of the market but, to my mind, it does indicdate that there is a cooling in the property market that is not just seasonal. It's unusual for a house in this area to be on the market for 3.5 months without some movement. I don't believe you are correct in dismissing this type of information. We are all observing the market at this time and any change is worth noting.


----------



## ninsaga

There has always been property that did not move or was slow to move...always has been always will be.....not to peoples taste, needs interior work, failed engineers report etc etc. This is also the slower season. How many properties have you seen that have scarcely been in an auctioneers window before it has been snapped up.......all since May I might ask.

ninsaga


----------



## thewatcher

Maine said:


> BOI's 35 yr 100% mortgage reflects trying to get to new younger customers in mid 20s and keep demand ramped up. Like alcopops from the drinks industry except there are limits imposed there by govt. These products push slowdown well into 2007 but mean that demand further out in a slowdown 2009 / 2010 will be reduced.


 
The difference between a 30year 300,000 and a 35year 300,000 mortgage is basically E100 a month or E25 a week (less than any night out),this is simply the banks preying on the young and naive of the country.
The difference in interest that a bank makes between a 30 and 35 year mortgage is huge,the difference to the "customer" or "party to be sucked dry" is miniscule.
For any ftb's out there if you are going to buy,forego the 1 night out to the cinema a week and tell your "friendly" mortgage broker/bank manager to stick his 35yr mortgage.


----------



## liteweight

tententwenty said:


> Settle down liteweight. Yes, we all know that Daft stats aren't worth a toss, but theres no need to get personal. Yourself, ninsaga, and steel are the bulls of this thread from what I can see so far, presumambly due to being somewhat exposed yourselves. Your opinions are more than welcome, but it would be better to back them up with actual reasons rather than just shouting for the thread to be closed (which isn't going to happen, since you know the owners of AAM are loving the hit count-why would they kill the golden goose?).
> 
> If there are no reasons, then we know you're just panicking.
> 
> I mean ninsaga said there that there was no reason for capital depreciation. Back it up or pack it up.



Consider me settled. However, I wonder why you didn't make any comment to Miju when he/she told me I was talking through my This post will be deleted if not edited to remove bad language!!!!!!!!!! My post was in repy. You make a lot of assumptions, who said I was bullish about the market? I haven't made up my mind yet and like to look at both viewpoints. I know I am certainly not as bearish as most on this thread nor am I over exposed in the property market. So you can forget the panic chestnut.

I have asked for this thread to be closed, once, and that was after Miju contacted a vendor/site, feigning interest in a property, just so that he/she could report back here. I found it childish and unethical then, and I still do.

As to the owners of AAM 'loving the hit count', I would hope that this would not be their priority and that the moderators would take a more ethical stance. 

If ninsanga said there was no reason for capital depreciation, I would have to read the post before commenting. As for 'back it up or pack it up', I have yet to see any hard and fast statisical analysis by the bears on this site. Not surprising, it can't be done in a context, or indeed a forum such as this.


----------



## liteweight

2Pack said:


> Thats 1000  of them. Irrespective of why they are empty they are inhabitable and empty and they overhang the market. Ultimately they will be sold or rented and will help to swamp either of those markets.
> 
> They were accurate in April 2006 . 17% of the national housing stock empty is a scandal TBH.



Perhaps I didn't make it clear that these apartments are now occupied, either rented or owner occupied. The reason they were empty, in one instance, was that the builder was awaiting the ESB connection. In effect, these will not swamp the market as they were sold two years ago.




			
				2Pack said:
			
		

> There are places like Carrick on Shannon with swathes and swathes of tax designation empties in them. Wander around some Monday night and see the amount with not lights on.
> 
> Places like Enniscrone and Bundoran in the winter ...or indeed in April are full of Seaside Resort scheme empties as well.
> 
> Even once you take out the Rural Renewal empties and Seaside Resort empties you are still looking at 250,000 empties nationwide or 15%



I'm sure a lot of these will remain empty. Don't get me wrong, I don't dispute the fact that a lot of property stands empty, even more in the winter months. Large amounts of these were bought to avail of the tax incentives that go with them. I know of at least one investor in this position who is not worried as he only bought it for the 'relief'.



			
				2pack said:
			
		

> Some places are destroyed by market (not tax) driven holiday homing such as Roundstone in Connemara or Lahinch in Clare or Dunfanaghy in Donegal where much of the property is fallow most of the year.



Completely agree. I was glad to see Donegal county council taking the initiative and banning further building of holiday homes. It was beginning to remind me of the pre Celtic Tiger days, when small towns in the country were deserted because of lack of money. now the opposite is true.


----------



## liteweight

thewatcher said:


> The difference between a 30year 300,000 and a 35year 300,000 mortgage is basically E100 a month or E25 a week (less than any night out),this is simply the banks preying on the young and naive of the country.
> The difference in interest that a bank makes between a 30 and 35 year mortgage is huge,the difference to the "customer" or "party to be sucked dry" is miniscule.
> For any ftb's out there if you are going to buy,forego the 1 night out to the cinema a week and tell your "friendly" mortgage broker/bank manager to stick his 35yr mortgage.



I think the trap some FTBs fall into is that they imagine they will not be in the property for 35 years and so they take the cheaper route on repayments. I suspect a lot might find that they end up in this property for at least 5 years and they've paid a hefty amount of interest by that time anyway. I agree that they'd be better off to tighten the belt and go for 30 years.


----------



## tententwenty

liteweight said:


> Consider me settled. However, I wonder why you didn't make any comment to Miju when he/she told me I was talking through my This post will be deleted if not edited to remove bad language!!!!!!!!!! My post was in repy. You make a lot of assumptions, who said I was bullish about the market? I haven't made up my mind yet and like to look at both viewpoints. I know I am certainly not as bearish as most on this thread nor am I over exposed in the property market. So you can forget the panic chestnut.


So he said it first, that makes it okay? We'll have to take your word for it that you aren't exposed on the property market...



liteweight said:


> I have asked for this thread to be closed, once, and that was after Miju contacted a vendor/site, feigning interest in a property, just so that he/she could report back here. I found it childish and unethical then, and I still do.


Investigative journalists and researchers do that kind of thing all the time. Its neither childish nor unethical, its honest to  god front line research, and I say fair play to Miju for doing it.



liteweight said:


> As to the owners of AAM 'loving the hit count', I would hope that this would not be their priority and that the moderators would take a more ethical stance.


So your definition of "ethics" involves censoring the hundreds of people posting valid opinions and viewpoints on this thread? This is a discussion site about financial affairs, which makes this discussion bang in AAM's remit. Getting more traffic to that end is entirely their priority. If you don't like that, feel free to start your own discussion site.



liteweight said:


> If ninsanga said there was no reason for capital depreciation, I would have to read the post before commenting. As for 'back it up or pack it up', I have yet to see any hard and fast statisical analysis by the bears on this site. Not surprising, it can't be done in a context, or indeed a forum such as this.


If thats the case then you haven't read much of the thread, nor even that post from Ninsaga which I all but directly quoted. I have seen lists of excellent reasons for bearish sentiments, all of them factual, throughout this and other threads. I have neither the time nor the inclination to repeat them yet again for you.


----------



## tiger

Time out!!!

Guys, stop disecting each other threads and speculating as to peoples motives for posting, it's less interesting for the rest of us.

I've been following this thread for a while, some opinions I agree with, others not.  Some peoples logic/analysis is sound, others is flawed, but it's all good sentiment!!!


----------



## ninsaga

tententwenty said:


> Investigative journalists and researchers do that kind of thing all the time. Its neither childish nor unethical, its honest to  god front line research, and I say fair play to Miju for doing it.



..... he offered a lower asking price with NO intention of buying. This is unethical. I'm glad that you have compared it to the work that _some_ journalists do......far from ethical indeed.



tententwenty said:


> I have seen lists of excellent reasons for bearish sentiments, all of them factual....



I think that the points made earlier is that they are not all factual.....

ninsaga


----------



## tententwenty

ninsaga said:


> ..... he offered a lower asking price with NO intention of buying. This is unethical. I'm glad that you have compared it to the work that _some_ journalists do......far from ethical indeed.


So one email asking about prices is going to devalue that entire property? The housing market must be on shakier ground than I thought... The bottom line is, if you want the facts, you are going to have to ask someone. He did.



ninsaga said:


> I think that the points made earlier is that they are not all factual.....


You're going to have to go into details for me there.


----------



## liteweight

tententwenty said:


> So he said it first, that makes it okay? We'll have to take your word for it that you aren't exposed on the property market...



I never said it made it ok...was simply pointing out to you that you were 'picking and choosing' which posts to object to! And yes you do have to take my word for it that I'm not over invested just as I have to take your word for certain things.




			
				twentytwenty said:
			
		

> Investigative journalists and researchers do that kind of thing all the time. Its neither childish nor unethical, its honest to  god front line research, and I say fair play to Miju for doing it.



Any investigate journalist worth his salt would not do as Miju did.




			
				twentytwenty said:
			
		

> So your definition of "ethics" involves censoring the hundreds of people posting valid opinions and viewpoints on this thread? This is a discussion site about financial affairs, which makes this discussion bang in AAM's remit. Getting more traffic to that end is entirely their priority. If you don't like that, feel free to start your own discussion site.



I have never suggested censoring anyone, nor would I!! I do however, get a bit sick of people who can't justify their remarks, throwing their toys out of the pram....if you don't like etc.




			
				twentytwenty said:
			
		

> If thats the case then you haven't read much of the thread, nor even that post from Ninsaga which I all but directly quoted. I have seen lists of excellent reasons for bearish sentiments, all of them factual, throughout this and other threads. I have neither the time nor the inclination to repeat them yet again for you.



I beg to differ . You actually quoted  a line from ninsaga's post, if that was all he/she posted then so be it.


----------



## ninsaga

tententwenty said:


> So one email asking about prices is going to devalue that entire property? The housing market must be on shakier ground than I thought... The bottom line is, if you want the facts, you are going to have to ask someone. He did.



Lets look at what Miju did agaon...



miju said:


> i emailed and while it's not fair to go into figures and the ins and outs of the reply suffice to say i made a very low offer and the reply has confirmed my belief the market is currently undergoing a massive shift and largely towards negative sentiment



..so...
- he made an offer below asking with no intent of buying
- offer was accepted therefore the bottom is falling out of the market
...oh please
anyways...... I believe it unethical & totally un professional to screw around with a seller like that.... maybe its just that we have different sets of standards



tententwenty said:


> You're going to have to go into details for me there.



The daft stats of course

ninsaga


----------



## tententwenty

liteweight said:


> I never said it made it ok...was simply pointing out to you that you were 'picking and choosing' which posts to object to! And yes you do have to take my word for it that I'm not over invested just as I have to take your word for certain things.



Oh, I'm not asking for you to take my word on anything.



liteweight said:


> Any investigate journalist worth his salt would not do as Miju did.



Well thats your opinion. The information gathered by Miju was in the public arena, not any kind of secret.



liteweight said:


> I have never suggested censoring anyone, nor would I!!



Locking the thread sounds like censorship to me.



liteweight said:


> I beg to differ . You actually quoted  a line from ninsaga's post, if that was all he/she posted then so be it.



This doesn't even make sense. Okay so, cards on the table, what interest if any have you in the Irish property market, do you own any properties, and are any of them investment properties?


----------



## tententwenty

ninsaga said:


> ..so...
> - he made an offer below asking with no intent of buying
> - offer was accepted therefore the bottom is falling out of the market
> ...oh please
> anyways...... I believe it unethical & totally un professional to screw around with a seller like that.... maybe its just that we have different sets of standards


I note he never said the offer was accepted however, just implied that it was. And in any case, as I said, the information was and is in the public domain. When you want to find out something in the public domain, you call and ask. The conclusions drawn from it might have been erroneous or what have you, but I see no problem in finding out. the big problem in Ireland today is people NOT calling, NOT finding out, and stumbling blindly into what amounts to a lifetime financial commitment that might bankrupt them. 

We need more Mijus... 



ninsaga said:


> The daft stats of course


Can't argue with you there...  As I said before, the only stats I am likely to trust are the Revenue Commissioners.


----------



## ninsaga

tententwenty said:


> I note he never said the offer was accepted however, just implied that it was. And in any case, as I said, the information was and is in the public domain. When you want to find out something in the public domain, you call and ask. .



You are missing the point here .....  the point is he is leading on someone here with out the slightest intent of carrying through..... he is falsely playing with with someone there - unfair, unethical, unprofessional.... what is to say that this seller does not have personal difficulties & needs to sell anyway.

In relation to comparing that to the work of an investative journalist...well its not as though he is trying to lure a drug dealer into an offer. Good investigative journalists don't prey on the public like that.   Can you now make the differentiation.

ninsaga


----------



## tententwenty

ninsaga said:


> You are missing the point here .....  the point is he is leading on someone here with out the slightest intent of carrying through..... he is falsely playing with with someone there - unfair, unethical, unprofessional.... what is to say that this seller does not have personal difficulties & needs to sell anyway.
> 
> In relation to comparing that to the work of an investative journalist...well its not as though he is trying to lure a drug dealer into an offer. Good investigative journalists don't prey on the public like that.   Can you now make the differentiation.


An enquiry was made, and it was responded to. For all we know the seller might have tacked 20% on the probable price and accepted the 10% drop or something. Yeah, and thats about as realistic and has as much point as your painting the seller as a poor old granny that needs a hip replaced. Good investigative journalists get the facts, and the facts are what was got.


----------



## miju

ninsaga said:


> You are missing the point here .....  the point is he is leading on someone here with out the slightest intent of carrying through..... he is falsely playing with with someone there - unfair, unethical, unprofessional...



i made an offer , it was countered by a slight increase on my offer and i replied with a thanks but no thanks good luck with your sale email what on earth is unethical about that?

as i said before there's plenty of vendors out there who gazump buyers or pull out at the last second before signing off because of a higher offer , 

leading him on would be stringing him along , going to viewings implying i would buy then not sending 1 email is an enquiry BIG DIFFERENCE , i didn't undermine the property in any way because i haven't put the figures up on this thread (and i wont either) and again i didn't claim the bottom was falling out of the market i merely said that the response i got was very indicitive that sentiment is changing i mean last year the offer i made would have been laughed at


----------



## Guest107

Jeanne said:


> We are all observing the market at this time and any change is worth noting.



Elegantly put Jeanne

I noted that this weeks Galway Advertiser (main Galway outlet) is chocka with Doughiska properties for the first time ever. I have my beady eye on this area as it is particularly bloated with post 911 specuvesting .

The pattern may be viewed on their website , all the EAs seem to have Ballybrit Heights and/or Túr Uisce type property to offload.

Keep an eye on the PDF edition 

[broken link removed]

I am now calling Galway City. The specuvestors have started to dump.


----------



## Jeanne

ninsaga said:


> You are missing the point here ..... the point is he is leading on someone here with out the slightest intent of carrying through..... he is falsely playing with with someone there - unfair, unethical, unprofessional.... what is to say that this seller does not have personal difficulties & needs to sell anyway.


 
He made an offer that was accepted. Get real!  I know plenty of people who love nothing more than to view property and, out of curiosity often bid lower than asking price (to test the water) usually expecting to be refused. But occasionally it happens that, unexpectedly, the offer is accepted. It happens all the time. If the EA isn't intersted in your offer, they are so 'professional and fair' they'll get back to you straight away and tell you to....well, of course they'll be ever so polite! And they would never play you off against another bidder. No. Never!

If someone was to engage in a long bidding war, leading everyone (vendor, other bidders) to believe they were serious about purchasing when they had no inention, *that *would unfair.

Anyway, there's a house just up for sale near me (Youngs). I'm off to have a look at the details.

Loving his thread...


----------



## whathome

ninsaga said:


> You are missing the point here ..... the point is he is leading on someone here with out the slightest intent of carrying through..... he is falsely playing with with someone there - unfair, unethical, unprofessional.... what is to say that this seller does not have personal difficulties & needs to sell anyway.
> 
> In relation to comparing that to the work of an investative journalist...well its not as though he is trying to lure a drug dealer into an offer. Good investigative journalists don't prey on the public like that. Can you now make the differentiation.
> 
> ninsaga


 
Just had a quick look over the thread over the past few days - too much petty meandering IMO. Edit - but I hope the moderators don't close it, the odd gem makes it very informative!

There is no ethical problem with Miju's call. We're buying a house at the moment, I call agents all the time asking if they think a vendor might be interested in an offer around a certain price. The response usually gives me an idea of how much movement there is in on asking price. Sometimes I do it to just see how soft an area is on price. Doesn't mean I'm reneging on anything. He made a call, got a response - no big no deal  Did he visit the development? Did he make a formal offer? Did he sign any contracts? No vendor would take a quick enquiry call to an agent seriously but the agents' response gives a good idea of the amount of interest in the property. 

The market weakened further this week - an agent in Swords told me that they have twice the number of properties for sale this year compared to last. She said that in the last two weeks they had more cancellations than sales!


----------



## Guest107

ninsaga said:


> ..so...
> - he made an offer below asking with no intent of buying
> - offer was accepted therefore the bottom is falling out of the market
> ...oh please
> anyways...... I believe it unethical & totally un professional to screw around with a seller like that.... maybe its just that we have different sets of standards



Actually that was _MY IDEA_ based on a discussion about a particular area which is being staged onto the market  but Miju did it. 

Miju did not post the details having confirmed his hunch and I did not ask for them (although you could PM them to me if you wish under NDA conditions Miju ) . I see no reason to post them either at this time . They may come up again when the place has been sold .

You may attack me for suggesting the idea  if you will Ninsaga , leave Miju out of it please.

Oh! and Letterkenny now has 1000 properties for sale .


----------



## ninsaga

Jeez..lookat all the fun I missed whilst having a cuppa tea  



tententwenty said:


> An enquiry was made, and it was responded to..



NO - an offer was made ...lets stick to the facts please....(see folloowing quote)



miju said:


> i made an offer , it was countered by a slight increase on my offer and i replied with a thanks but no thanks....



OK then why did you not state that to begin with...you post implied that as a result of offering lower then the bottom is falling out of the market



2Pack said:


> Actually that was _MY IDEA_ based on a discussion about a particular area which is being staged onto the market  but Miju did it.
> .....
> You may attack me for suggesting the idea  if you will Ninsaga , leave Miju out of it please.


My my, how noble of you...although I'm sure miju is big enough to think & act for him/herself

ninsaga


----------



## miju

ninsaga said:


> J
> OK then why did you not state that to begin with...you post implied that as a result of offering lower then the bottom is falling out of the market



i did state that as i knew someone would get on my case saying i'm trying to string along seller and again i didnt state the bottom was falling out of the market (thats what you may have read) what i said was there seems to be a massive shift happening in sentiment


----------



## miju

Wollie said:


> As part of the assessment of the strength of financial institutions, it looked at the impact of what it called a "range of large but plausible hypothetical shocks". One of the "plausible" shocks examined in the report was a 40% decline in house prices, which takes effect from the beginning of Q3 2006.



40% of the market for buying property is very plausible given that just over 40% of the market last year is made up of investors


----------



## tententwenty

ninsaga said:


> Jeez..lookat all the fun I missed whilst having a cuppa tea


I'd take the ethics of someone making an inquiry over the ethics of someone trying to get a very popular thread locked on flimsy pretexts because it doesn't suit his personal financial situation any day.

You are rapidly encroaching on troll territory here Ninsaga.


----------



## Maine

_


2Pack said:



			We are not Italy and will be allowed to run a 6-8% deficit for 3-4 years which is all thats required as the banks take the hit quickly . We will still stop before we hit 60% of GDP unlike the almost bankrupt Italians.
		
Click to expand...

_


2Pack said:


> _The important thing is to get it over with fast, within 3 years or max 4. Propping it up as it deflates with fiscal sticky plaster is pointless._
> 
> Good points 2PACK.
> 
> IMO the shakeout will at least cost 100,000 jobs direct and indirect as a result of a few years of 50,000 output - half current.  It will take time ( 3 to 4 yrs is min ) to get these people back to other work particularly as the public sector will be closed - govt have over hired past 4 years.
> 
> Also IMO all wages in ireland currently have a boom element - this could be 20% plus and this will slowly disappear for all non public sector employees.  US multinationals who have lost power over wage reviews will take it back with relish.
> 
> Any Irish govt will borrow massively to keep it up as long as possible - I understand the amounts the Japan borrowed in the past 10 years are staggering.


----------



## Eurofan

I've found this thread interesting from the start but is there any chance those involved can just call it quits on the bickering about who said what (or just take it to pm?)

It's really clogging up what is a fascinating thread and will continue to be such as the market develops into Winter.

Please?


----------



## Jeanne

ninsaga said:


> Jeez..lookat all the fun I missed whilst having a cuppa tea
> 
> 
> 
> NO - an offer was made ...lets stick to the facts please....(see folloowing quote)
> 
> 
> 
> OK then why did you not state that to begin with...you post implied that as a result of offering lower then the bottom is falling out of the market
> 
> 
> My my, how noble of you...although I'm sure miju is big enough to think & act for him/herself
> 
> ninsaga


 
Hey, that's not fair. You didn't have a 'go' at me!? I've read and re-read your post above and I'm definitely not quoted.   Feeling very rejected...

Off to have a cup of tea myself  

By the way, the asking price for the house nearby me is 900,000. I'll be keeping an eye on that.


----------



## ninsaga

Eurofan said:


> I've found this thread interesting from the start but is there any chance those involved can just call it quits on the bickering about who said what (or just take it to pm?)
> 
> It's really clogging up what is a fascinating thread and will continue to be such as the market develops into Winter.
> 
> Please?



Have no problem with that as long as clear facts are being presented... if you'll not, many of my posts have challenged 'facts' which in the end account for nothing

20/20 cut the crap..... regarding this trolling stuff... I've been an active member of this forum for a few years (whilst it was on EZboard).... I have no intention of getting shut off..... you call it trolling.. I call it making light of a situation.

anyways ...on with the fun....


----------



## miju

Eurofan said:


> I've found this thread interesting from the start but is there any chance those involved can just call it quits on the bickering about who said what (or just take it to pm?)



im most definitely in agreement with this


----------



## tententwenty

ninsaga said:


> 20/20 cut the crap.....


Ditto.

I agree completely with Miju and Eurofan however, on with the show!


----------



## Marie

*Statistics are fine but need interpretation.  The prediction that 10 out of every 100 mortgagees might default (i.e. be unable to continue to meet repayments) and possibly be repossessed does not tap the broader unravelling.  Perhaps we need more than conventional statistics for the unravelling which occurs when bubbles burst - I suggest cladistics (chaos) theory fits the circumstances as it models for how small incremental changes across the spectrum build into different eventualities.  Does anyone here know if the cladistics model is being used?  Applying those forecasts would give a good sense of possible outcomes and equip individuals to avoid the worst effects of a 'crash'.*



Wollie said:


> (snipped) The report has some useful comments on the housing market.
> 
> As part of the assessment of the strength of financial institutions, it looked at the impact of what it called a "range of large but plausible hypothetical shocks". One of the "plausible" shocks examined in the report was a 40% decline in house prices, which takes effect from the beginning of Q3 2006.
> 
> (snipped)
> Despite all these warnings, the report seems to give Irish financial institutions a reasonably clean bill of health in terms of their ability to survive a collapse in house prices. From my reading of the report, it seems that institutions would be able to withstand a 55% fall in house prices combined with a 10% default ratio.


----------



## liteweight

Chaos theory....sure it's  a mess but I'm sure there's a pattern in there somewhere?? 

I doubt very much if anyone is using cladistics but perhaps they should! Any biologists out there?


----------



## phoenix_n

whathome said:


> The market weakened further this week - an agent in Swords told me that they have twice the number of properties for sale this year compared to last. She said that in the last two weeks they had more cancellations than sales!


 
That is where the first real price reductions will happen. Those who are in chains will need to sell their properties and with interest replaced by fear the number of potential buyers will have dryed up. Those that bought >3 years will be able to 'afford' to sell at reduced prices. Those that find it hard to imagine a crash have to realise that a house can be sold at 100K less and still realise a profit for the owner.



Wollie said:


> I've been reading a report from the IMF, which is an updated assessment of the country's financial system. The report has some useful comments on the housing market.
> 
> As part of the assessment of the strength of financial institutions, it looked at the impact of what it called a "range of large but plausible hypothetical shocks". One of the "plausible" shocks examined in the report was a 40% decline in house prices, which takes effect from the beginning of Q3 2006.


 
Looks like my predicted xmas crash (localised and only 'true values' ) was not so outlandish afterall.


----------



## beattie

2Pack said:


> Elegantly put Jeanne
> 
> I noted that this weeks Galway Advertiser (main Galway outlet) is chocka with Doughiska properties for the first time ever. I have my beady eye on this area as it is particularly bloated with post 911 specuvesting .
> 
> The pattern may be viewed on their website , all the EAs seem to have Ballybrit Heights and/or Túr Uisce type property to offload.
> 
> Keep an eye on the PDF edition
> 
> [broken link removed]
> 
> I am now calling Galway City. The specuvestors have started to dump.


 
If investors are starting to get out in Galway this could be an ominous development for prices beyond the Pale. I have noticed in Waterford that there is far more 'For Sale' signs up than one year ago. I recently passed one new development where there was quite a few of them already put back up for sale. I always thought that prices beyond the Pale would fall before they started to go South in Dublin.


----------



## Archie

What is the sentiment with regards to the property market in Cork?


----------



## Guest107

Archie said:


> What is the sentiment with regards to the property market in Cork?



It is Whatever Ninsaga tells you it is !!!!!!


----------



## Guest107

beattie said:


> If investors are starting to get out in Galway this could be an ominous development for prices beyond the Pale.


Note that this is simply stage one of the correction, a noticeable increase in inventory for sale in areas developed post 2002 , dumped by specuvestors who believe the capital appreciation gravy train is ending. 


beattie said:


> I always thought that prices beyond the Pale would fall before they started to go South in Dublin.


Agreed although I consider 'Dublin' to be Greystones to Drogheda and out west to Kildare and Kinnnegad and Navan. Inside that circle will be the last bastion....eg 30 miles out.

Outside that circle is the back of Ballivor....which is doomed.


----------



## Maine

Wollie said:


> _Despite all these warnings, the report seems to give Irish financial institutions a reasonably clean bill of health in terms of their ability to survive a collapse in house prices. From my reading of the report, it seems that institutions would be able to withstand a 55% fall in house prices combined with a 10% default ratio._




read the IMF 2006 summary page ONLY on iceland as a benchmark for above - having read you would think iceland has nothing too big to worry about - maybe a few small problems.........

However Icelands interest rate just hit 13.5% and per its CB will go higher....inflation is 8.6% and forecast by its CB to hit 11%

One conclusion would be that IMF views tend to be a little sanitised.


----------



## room305

phoenix_n said:


> That is where the first real price reductions will happen. Those who are in chains will need to sell their properties and with interest replaced by fear the number of potential buyers will have dryed up. Those that bought >3 years will be able to 'afford' to sell at reduced prices. Those that find it hard to imagine a crash have to realise that a house can be sold at 100K less and still realise a profit for the owner.



You'll find those specuvestors will not quickly accept such price reductions. They will take their houses off the market, do up the kitchen, try a new REA etc. before the new reality sets in and they realise they will have to come down in price to attract buyers.



phoenix_n said:


> Looks like my predicted xmas crash (localised and only 'true values' ) was not so outlandish afterall.



What's "true value"? The value is what the market will pay for it. Like politics, all real estate is local so during a crash some areas will be worse affected than others. I doubt this will happen before Christmas. Summer of next year is more likely, especially if the SSIA-fuelled price jumps don't actually materialise.


----------



## bogwarrior

Todays Sydney Morning Herald reveals some 
anecdotal evidence about local property prices.  The properties that are showing the major decreases are in the commuter belt well outside the city centre....think meath for an Irish refererence.   
Another interesting fact is that the papers headline describes it as a 'housing crash' - for the last 18 months the Australian papers have been talking about 'soft landings' and 'slow growth', so sentiment appears to be changing.
Another article for todays paper had the prime minister blaming the state goverments (mostly Labour - his opposition) for the 'housing crash' - the blame game has begun in earnest.


----------



## Guest107

bogwarrior said:


> Another interesting fact is that the papers headline describes it as a 'housing crash' - for the last 18 months the Australian papers have been talking about 'soft landings' and 'slow growth', so sentiment appears to be changing.



Its also most interesting that this area is about 50km out of Sydney or 30miles . 

Thats about Ballivor is it not or is that Trim , never mind the back of Ballivor??!


----------



## phoenix_n

bogwarrior said:


> Todays Sydney Morning Herald reveals some
> anecdotal evidence about local property prices. The properties that are showing the major decreases are in the commuter belt well outside the city centre....think meath for an Irish refererence.
> Another interesting fact is that the papers headline describes it as a 'housing crash' - for the last 18 months the Australian papers have been talking about 'soft landings' and 'slow growth', so sentiment appears to be changing.
> Another article for todays paper had the prime minister blaming the state goverments (mostly Labour - his opposition) for the 'housing crash' - the blame game has begun in earnest.


 
From the article "The _Herald_ checked 16 properties in south-western and western suburbs listed at the weekend and found 60 per cent had prices or had attracted offers at a discount to their last sale price."

That is where this thread is of benefit as it has also recorded slow sales and asking prices been reduced.

(p.s. 2pack can we stop this whole Ballivor stuff.....please!)


----------



## whathome

Fewer FTB's in the coming years. As I mentioned before, the last few years has seen a drop in college points because of the looming dip in demographics. A big drop in birth rate in the 80's will result in far fewer FTB's coming through over the next few years.

http://www.rte.ie/news/2006/0821/cao.html

Fewer First Time Buyers equals less demand at a time of huge supply.  This could make the crash even more severe.


----------



## Guest107

phoenix_n said:


> (p.s. 2pack can we stop this whole Ballivor stuff.....please!)



No. Phoenix and you should not ask me to neither  

You have a theory that price falls will be general , 40% by christmas kind of stuff. 

I have a different theory, namely that outer commuter bands will get it first . I invented the _Back of Ballivor _as a nominal mid outer (not outer outer)  Dublin commuter band area and am very focused on what happens there and thereabouts first. I called it my _2band _theory at the time. Bar a strong riposte from a Mullingarianer I have not been challenged with any consistent rigour on that theory  so it stands.   I would additionally say that the 3 years started about April 06. 

I am also minded that these falls will take 3 years to play out, did you notice that many of these Oz properties were being shown relative to 2003 which is consistent with a  slower downturn than the 4 month one  you have posited.

Finally the examples given in Australia are distress or repo sales .

We kind of agree with each other but not on timing. That Australian article confirms my general theory on banding and that on timing in the one fell swoop so as you can well imagine I am withdrawing NOTHING at this time 

Do you still expect a 40% fall by end 2006 then because I most certainly do not ??


----------



## CelloPoint

whathome said:


> Fewer FTB's in the coming years. As I mentioned before, the last few years has seen a drop in college points because of the looming dip in demographics. A big drop in birth rate in the 80's will result in far fewer FTB's coming through over the next few years.
> 
> http://www.rte.ie/news/2006/0821/cao.html



yup, 65,000 leaving cert students in 1998; 51,000 in 2006.


----------



## phoenix_n

2Pack said:


> Do you still expect a 40% fall by end 2006 then because I most certainly do not ??


 
I am constantly mis-quoted on this 

I predict localised falls in values by xmas. For example take House A. Asking price 400K. You know and I know that that is its speculative value rather than its true value. Say we agree on 300K. Now that does not reflect a crash in that house price until the majority of people agree with us. And by xmas i believe more people will be in our camp but that does not mean that the price will suddenly be reduced to 300K. Only on final sale will it. So a crash can happen in the market but not be known about until close of sale. (if that makes sense)

For example at the moment we are experiencing a soft landing (last trickle of buyers) and a reduction in prices but its not being recorded in the media because of the lead time it takes for houses to sell. 

BTW rents are beginning to fall as well. Note the variation in prices.


----------



## Remix

bogwarrior said:


> Another interesting fact is that the papers headline describes it as a 'housing crash' - for the last 18 months the Australian papers have been talking about 'soft landings' and 'slow growth', so sentiment appears to be changing..


 
Here's how I think a soft landing can be achieved for a period in the Irish property market.

The ECB needs to raise rates until house prices in Ireland just start to tip from stagnating to falling. At that point they need to reduce interest rates to reassure investors and buyers.

Now they will have to be very vigilant as we have such regional distortions between Dublin and the rest that the adjustments required for a soft landing in Dublin may crash a region further out.

However if Mr Trichet brings all the economic expertise in the ECB to focus on the issue and is careful in tuning rates it should be achievable.

He will simply have to ignore Eurozone inflation and the resurgent economies of Germany and France.

Thank you in advance Mr. Trichet !


----------



## Guest107

phoenix_n said:


> I am constantly mis-quoted on this
> 
> I predict localised falls in values by xmas. For example take House A. Asking price 400K. You know and I know that that is its speculative value rather than its true value. Say we agree on 300K. Now that does not reflect a crash in that house price until the majority of people agree with us. And by xmas i believe more people will be in our camp but that does not mean that the price will suddenly be reduced to 300K. Only on final sale will it. So a crash can happen in the market but not be known about until close of sale. (if that makes sense)


I also predict localised falls by christmas where the asking will be noticeably lower in some areas, never mind the final agreed prices which will be unknown. Noticeable will be 10-20% here and there.

Not 40% though , anywhere, and in fairness I believe I have consistently predicted _where _I expect to see these falls on a systemic basis and _why_ these areas are at higher risk of a fall than other areas  .


----------



## Raskolnikov

beattie said:


> If investors are starting to get out in Galway this could be an ominous development for prices beyond the Pale.


In the suburbs of Cork, I'm seeing very little estate agent activity, certainly nothing to suggest that _selling season_ has started.


----------



## beattie

Remix said:


> Here's how I think a soft landing can be achieved for a period in the Irish property market.
> 
> The ECB needs to raise rates until house prices in Ireland just start to tip from stagnating to falling. At that point they need to reduce interest rates to reassure investors and buyers.
> 
> Now they will have to be very vigilant as we have such regional distortions between Dublin and the rest that the adjustments required for a soft landing in Dublin may crash a region further out.
> 
> However if Mr Trichet brings all the economic expertise in the ECB to focus on the issue and is careful in tuning rates it should be achievable.
> 
> He will simply have to ignore Eurozone inflation and the resurgent economies of Germany and France.
> 
> Thank you in advance Mr. Trichet !


 
Yes Mr Trichet will do everything in his power from stopping the bubble from exploding in the most dynamic economy to ever be seen in Europe. Sure aren't the rest of Europe in thrall with our success.....


----------



## room305

phoenix_n said:


> I predict localised falls in values by xmas. For example take House A. Asking price 400K. You know and I know that that is its speculative value rather than its true value. Say we agree on 300K. Now that does not reflect a crash in that house price until the majority of people agree with us. And by xmas i believe more people will be in our camp but that does not mean that the price will suddenly be reduced to 300K. Only on final sale will it. So a crash can happen in the market but not be known about until close of sale. (if that makes sense)




Now this is just silly. A crash can occur but nobody will notice until some time later when a crash actually does occur and we do notice.

How about saying that by Christmas buyers will no longer be willing to pay what the people selling are asking for. Eventually the sellers will need to come down in asking price to meet what the market is willing to pay. This will take many months to fully materialise and be reflected in the sale price. However, some people - perhaps under financial pressure or selling in an area with a glut of housing for sale - will be forced to reduce their prices quicker in order to sell.

Forget about all this "true value" nonsense.


----------



## macbri

I read the sydney price falls this morning,Over the last 2-3 years there was talk over hear frpm estate agents,banks etc of a measured housing slowdown-this is the 1st time that I have read statements like 'housing crash' and the facts to back then up ie 40% falls in 2-3 years.

Also the housing crash in sydney is coming from a`lower base than Ireland and house building in Australia is only 145k pa(population 20.5 million)

Irelands' house building projection is 100k this year although population is 20% of Australias'.This is on top of 1.8 million homes per census on a population of only 4.2 million

Ireland will have a worse housing crash than sydney,simple demand and supply will see to that.

The easiest way to analyse any market is to look at supply(housing stock,development land) and demand(demographics,interest rates,affordability,investor return,migration,future earnings growth,employment growth,fiscal policy)


----------



## Bedsit

macbri said:


> I read the sydney price falls this morning,Over the last 2-3 years there was talk over hear frpm estate agents,banks etc of a measured housing slowdown-this is the 1st time that I have read statements like 'housing crash' and the facts to back then up ie 40% falls in 2-3 years.




I wonder if negative sentiment from other markets such as Australia, US etc. will have an accelerating affect on sentiment here and quicken the pace of the crash.


----------



## room305

Bedsit said:


> I wonder if negative sentiment from other markets such as Australia, US etc. will have an accelerating affect on sentiment here and quicken the pace of the crash.



I doubt it. Don't forget the Irish market is "different".


----------



## phoenix_n

macbri said:


> Ireland will have a worse housing crash than sydney,simple demand and supply will see to that.


 
I tend to agree. I was close to buying in 2004 in sydney but was never involved in any real bidding war. Back here earlier this year i got caught up in too many bidding wars to count. 

Whilst interest rates rises will put pressure on the sydney market (dont know market outside of nsw) the pure speculative nature of the market here will force the crash earlier.


----------



## Bedsit

*Bernanke, Trichet Have to Sacrifice More Jobs to Curb Inflation*

http://www.bloomberg.com/apps/news?pid=20601087&sid=adN8w9qgRznU&refer=home

Interesting article on Bloomberg today


----------



## macbri

Interest rate rises will have the biggest impact-if Ecb rises rates by another .5% by xmas will definately effect demand.

If not then the crash will be drawn out longer.

Can somebody on here give me an argument why house prices will not go down in the next 2-3 years backed by some statistics-
It seems to be a very 1 sided discussion at the moment.

Another way of asking the question where is the demand going to come from 4 100k houses this year and why is the Irish housing market 'unique' to normal demand/supply economics?


----------



## Guest107

phoenix_n said:


> the pure speculative nature of the market here will force the crash earlier.



Hmm. Not by christmas though.

The only Irish market that peaked _last year _from what I can see and has been in decline ever since is Letterkenny in Donegal. 

4 Bed semi , €139k  

Modern 3 Bed apartment in centre of town  €165k 

Hardly a semi over €200k anywhere 

Thats what I see happening in all outer commuter belts by mid-end 2007 . The cities will get their big falls falls later on, about 2008.

In the meantime the _print media_ and the _property economists_ will welcome the 'soft landing' while the smarter ones liquidate and put cash in bank


----------



## Bedsit

*Slowing house prices will help crush inflation*

http://business.timesonline.co.uk/article/0,,16849-2320116,00.html

Another interesting article in this weeks Sunday Times


----------



## walk2dewater

Bedsit said:


> *Bernanke, Trichet Have to Sacrifice More Jobs to Curb Inflation*
> 
> http://www.bloomberg.com/apps/news?pid=20601087&sid=adN8w9qgRznU&refer=home
> 
> Interesting article on Bloomberg today


 
yes, saw that too.  Interesting discussion on the 'sacrafice ratio' of inflation vs. unemployment.  Should really re-post this article on the interest rate thread.  My guess of 6-7% ECB rate by Dec 07 looking better by the day    savers rejoice!!


----------



## legend99

macbri said:


> Interest rate rises will have the biggest impact-if Ecb rises rates by another .5% by xmas will definately effect demand.
> 
> If not then the crash will be drawn out longer.
> 
> Can somebody on here give me an argument why house prices will not go down in the next 2-3 years backed by some statistics-
> It seems to be a very 1 sided discussion at the moment.
> 
> Another way of asking the question where is the demand going to come from 4 100k houses this year and why is the Irish housing market 'unique' to normal demand/supply economics?




see page 62 of this report. [broken link removed]

We have quite a low number of dwellings per 1,000 of population. Therefore demand is high relative to supply.


----------



## langball

Bedsit said:


> *Slowing house prices will help crush inflation*
> 
> http://business.timesonline.co.uk/article/0,,16849-2320116,00.html
> 
> Another interesting article in this weeks Sunday Times


 
It seems according to that article and one from the smh posted earlier that folks in the states (where 'gas' is $3.50 a gallon) and in sydney (approx 0.60 euros a litre for petrol) have copped on that their reliance on their cars must change in the future. 

Not so in the land of the shoddy houses many miles from everywhere and the small roads clogged with oversized vehicles driven by idiots

from yesterdays sindo: 


> WHILE the rest of the western world is turning its back on non-environmentally friendly SUV cars, Ireland's love affair with the gas-guzzlers continues as sales here continue to soar.
> Amazingly, some models have almost doubled their sales since last year, bucking all the downward trends around the world. New figures from the Society of the Irish Motor Industry (SIMI) show that sales of SUV or 4x4 cars have continued to rise strongly here, while many other countries report adecline.
> Whether doing the school run or playing the ultimate soccer parent, it seems Irish drivers are still very much in love with their monster cars, despite ever-increasing fuel costs and the growing environmental debate.
> Comparable figures from the UK, the US and several European countries show areduction in SUV sales inthe first seven months ofthis year.
> British figures are down by almost 3 per cent, while across the continent the figure is closer to 8 per cent.


----------



## Guest107

legend99 said:


> see page 62 of this report. [broken link removed]
> 
> We have quite a low number of dwellings per 1,000 of population. Therefore demand is high relative to supply.



Did you not note the implications  of that table. Ireland jumped from 1.55m to 1.8m very suddenly once the census enumerators went out. 

In other words despite the construction of 100k units in 2005 the housing stock increased by 250k between 2004 and early 2006. 

*150k housing units were found out there by the Census People *,_ just like that_ 

This years 100k will bring us to the Euro average, more or less.  We have already passed out the UK as you can see , another country very similar to ours in the ownership stakes.

And its no wonder after that report was published in July that construction firms are now rushing to get rid of property by finishing fast. Their assumptions on the actual size of the housing stock were very very wrong.


----------



## tententwenty

Bedsit said:


> *Bernanke, Trichet Have to Sacrifice More Jobs to Curb Inflation*
> 
> http://www.bloomberg.com/apps/news?pid=20601087&sid=adN8w9qgRznU&refer=home
> 
> Interesting article on Bloomberg today



My god, the best method these fellas can come up with to reduce inflation is to arbitrarily fire people?

_Michael E. Feroli, an economist at JPMorgan Chase & Co. in New York, says that up until the mid- 1990s, an increase of 1.5 percentage points in the unemployment rate was enough to bring inflation down 1 percentage point.          _ 
_ ``Now, the same reduction in inflation would take a 4 percentage point increase in the unemployment rate,'' he wrote in a report last month._

I suppose the thinking goes that if people aren't getting paid, they can't afford high priced goods. Genuises.


----------



## legend99

2Pack said:


> Did you not note the implications  of that table. Ireland jumped from 1.55m to 1.8m very suddenly once the census enumerators went out.
> 
> In other words despite the construction of 100k units in 2005 the housing stock increased by 250k between 2004 and early 2006.
> 
> *150k housing units were found out there by the Census People *,_ just like that_
> 
> This years 100k will bring us to the Euro average, more or less.  We have already passed out the UK as you can see , another country very similar to ours in the ownership stakes.
> 
> And its no wonder after that report was published in July that construction firms are now rushing to get rid of property by finishing fast. Their assumptions on the actual size of the housing stock were very very wrong.



Note also the 275,000 vacant dwellings in the country according to that report.


----------



## Guest107

legend99 said:


> Note also the 275,000 vacant dwellings in the country according to that report.



We know all about that empties  figure of 275k  but would like your thoughts on the 'finding' of the 100k-150k extra homes out there . 
_
2Pack World News Headline_



> Irish Census Enumerators discover that 10% of estimated national housing stock appears out of nowhere......_just like that_


How can 100k-150k inhabitable units simply appear ????

_ In June 2006_ , BEFORE the census figures were released. The Dept of Noel Ahern assumed that there were:

"Almost 1.7m Housing Units of Housing Stock in 2005"  page 14 of this pdf .

Within _days _the CSO said it was 1.8M .

However you do it thats a record years building which simply showed up  . Lord God!


----------



## Maine

_extract from davys stockbrokers_

Mandatory mortgage stress testing could mean applying rates of 7.0% next year
One of the issues occupying our minds at the moment is mortgage affordability. Since we did our mystery shopping exercise earlier this summer, ECB rates have risen 0.5% to 3.0% and look like hitting 3.5% by year-end. In fact we expect them to reach 4.0% sometime early next year. Hence first time buyer (FTB) affordability is being slowly squeezed, and the only way for the banks to respond is to stretch out the term even further. The typical FTB term is currently heading for 35 years, so do not be surprised if more of the banks start offering 40-year terms. Note that availability of a 100% LTV mortgage will not solve this problem.
If we take our mystery couple earning €60,000 between them, our average loan offer was €326,000 or 5.4x salary. At the time ECB rates were 2.5%, so over 35 years this equated to 32% of salary being used to pay the mortgage. Note that most banks work off a maximum of around 35% for that kind of income level (some take note of minimum residual income levels too). With ECB rates at 3.5%, that figure rises to over 36%; at 4.0%, it reaches 38.7%. If ECB does hit 4.0% next year, our loan offer would have to be cut to €295,000 (a reduction of nearly 10%) in order to get back within the lending guideline. That would have meant a one-bed apartment and not the two-bed for the couple in our shopping exercise. Extending the term to 40 years would help but not by much - it would cut the figure from 38.7% to nearer 37%, which is less than the hit from a 0.5% rate increase. Finally, investors should bear in mind that the banks are still mandated by the Regulator to stress test mortgage applications for rate increases of 2% from current levels. This suggests that the banks could be plugging mortgage rates of over 7.0% into their new business models next year. That works out at 49% of salary. Ouch!


----------



## tententwenty

Maine said:


> _extract from davys stockbrokers_
> _If we take our mystery couple earning €60,000 between them, our average loan offer was €326,000 or 5.4x salary._



Gotta love the magic maths applied here. That would be 10.8x salary gentlemen. When it actually reaches 5.4x salary, it will be more realistic.


----------



## Raskolnikov

langball said:


> It seems according to that article and one from the smh posted earlier that folks in the states (where 'gas' is $3.50 a gallon) and in sydney (approx 0.60 euros a litre for petrol) have copped on that their reliance on their cars must change in the future.
> 
> Not so in the land of the shoddy houses many miles from everywhere and the small roads clogged with oversized vehicles driven by idiots


Oh right, so anyone who drives a 4x4 or an SUV is an idiot? Give it a rest.

Off-topic, but in California, the Americans are as car dependant as ever. It really is a sight to behold. Literally, every second car is an SUV or 4x4, even the poorest of white trash take great pride in their overpowered vehicles, despite often living in trailers.


----------



## exile

tententwenty said:


> Gotta love the magic maths applied here. That would be 10.8x salary gentlemen. When it actually reaches 5.4x salary, it will be more realistic.



Why?  Because it's a couple?  If it was just one person earning 60K, would you argue it's not 5.4x salary?


----------



## bearishbull

exile said:


> Why? Because it's a couple? If it was just one person earning 60K, would you argue it's not 5.4x salary?


Historically  the ratio  of a single average income to prices/mortgages was used .


----------



## Bedsit

A couple of interesting sites if you have not already seen them:

Housing Crash Continues
[broken link removed]

Housing Bubble News
[broken link removed]

The Housing Bubble Blog
http://www.thehousingbubbleblog.com/

DC Housing Bubble Blues
http://dchousingbubbleblues.blogspot.com


----------



## langball

Raskolnikov said:


> Oh right, so anyone who drives a 4x4 or an SUV is an idiot?quote]
> 
> I did'nt mean to imply that everyone is an idiot. Those who need them for work fair enough. Those who pay 90k for them and use them for shopping are the idiots I am talking about  // ends rant


----------



## exile

bearishbull said:


> Historically  the ratio  of a single average income to prices/mortgages was used .



Fair enough - I see your point.


----------



## phoenix_n

Good thread to watch to see how the market is. (please no bears or bulls post on the thread....just leave it and see how it goes)


(as a side note if one really wanted to get a 'bargain' on a downward market you would only need to ascertain the vendors situation to know whether you could extract a high discount. In fact you could put this, 'stressed' vendor, as your first criteria. So instead of looking for a 3 bed semi with kitchen extension you would look for a 3 bed semi with 'stressed' vendor. )


----------



## wiggzie

get ready to start rifling through potential targets rubbish bins...


----------



## CelloPoint

2Pack said:


> Do you still expect a 40% fall by end 2006 then because I most certainly do not ??



Why not? I predict up to a 40% drop in localised areas (commuterland 1 beds) come Xmas '06.


----------



## bogwarrior

2 more articles from the Sydney Morning Herad (tuesday edition)

The trend of Australians taking out equity has ended, due to high interest rates and the decline in the price of property.  As your average Aussie has an even worse savings rate than the average Irish person (no SSIA there) this will probably have a large impact on purchase of big ticket items such as cars, holidays etc...

The other article, the Urban Development Institute of Aus says that there will be a shortfall of at least 50,000 new homes by 2031 (due to population trends) and are recomnending the government to be more flexible zoning land.  Turns out that this institute represents 'developers and property industry firms'.  It reads to me that they're trying to buck sentiment, hoping to get Bruce and Sheila out into the property market again.

I think the Australian experience is interesting as they appear to be a good 18 months ahead of us in any property downturn that may come our way.  So expect more doom and gloom articles from the mainstream media, followed by puff pieces masquerading as research from the vested interests.

 One to watch.


----------



## polar

Bedsit said:


> A couple of interesting sites if you have not already seen them:
> 
> Housing Crash Continues
> [broken link removed]


 
A good piece, which dissects 42 separate housing clichés. Among much else of interest, it suggests an interesting price rule:

*"Another rule of thumb is that a fair house price is 125 times the monthly rent. If a house rents for $2000 per month, then a fair price is $250,000."*

I remember when this applied in Ireland, too, years ago - the ratio now appears to be about 250:1. 

Yes, I think I shall continue to rent.


----------



## RiceCakes

Interesting link posted earlier

[broken link removed]

The quote below really struck me as being relevant possibly to future Ireland..

_"If you buy, at least you have a house, but if you rent, you end up with nothing."
FALSE. Renters in the Bay Area end up with much more money, while living in the same quality house as an owner. At the end of 30 years, a renter would have enough principal saved to buy the $700K house mentioned above and would have spent *$162,846 less* on rent than he would have spent in interest payments. And he would have lived in an equivalent house all that time.  Owners frequently end up with nothing because they lose the house to foreclosure._

The old "rent is dead money" cliche is totaly laid to rest there in an unbalanced market like ours.


----------



## phoenix_n

Really amazed at how suddenly the australia market has been called a crash.


----------



## Superman

polar said:


> *"Another rule of thumb is that a fair house price is 125 times the monthly rent. If a house rents for $2000 per month, then a fair price is $250,000."*



That's a rental return of 9.6%!


----------



## tententwenty

Superman said:


> That's a rental return of 9.6%!


It does seem a little excessive alright. I can't say I've ever heard that one anywhere else...


----------



## ninsaga

tententwenty said:


> It does seem a little excessive alright. I can't say I've ever heard that one anywhere else...



Which does not mean that it isn't happening of course


----------



## tententwenty

ninsaga said:


> Which does not mean that it isn't happening of course


Really? Where? I'll hand in my bear card and move there! We were talking about the 125 x rent=actual house property value, which I think is probably a bit low.


----------



## ninsaga

tententwenty said:


> Really? Where? I'll hand in my bear card and move there! We were talking about the 125 x rent=actual house property value, which I think is probably a bit low.



I don't know..... I'm just stating that it is a possibility.


----------



## tententwenty

ninsaga said:


> I don't know..... I'm just stating that it is a possibility.


----------



## bearishbull

polar said:


> I remember when this applied in Ireland, too, years ago - the ratio now appears to be about 250:1.


Ratio is around 550 in my area (dublin 9). Madness.


----------



## liteweight

bearishbull said:


> Ratio is around 550 in my area (dublin 9). Madness.



Why so?? It's a good area, well settled community and close to the city.


----------



## JohnBoy

a monthly ratio of rental income to value of 550 equates to a price/earnings ratio of 45.80 which is very expensive when compared to property in many other countries and it is almost three times more expensive than the ISEQ in p/e terms and about equivalent to the NASDAQ. 

I understand that you pay a premium for a desirable area but in terms of assessing the merits of property as an investment a price/earnings ratio of almost 47 is pretty steep and I would only pay this if I thought that the rental income could at least double in the near future - an unlikely eventuality in Dublin I would imagine.

Additionally, if you compare the forward p/e ratio for Google (38x next year's earnings) then D9 houses are more expensive than this!


----------



## bogwarrior

phoenix_n said:


> Really amazed at how suddenly the australia market has been called a crash.



well, its the Sydney market for now ( I'm sure Melbourne will follow the same patterns soon).  Brisbane and Perth are still growing - though a slowdown there will be inevitable at some stage.
It seems that they've come to something of a tipping point in Sydney - the slowdown has been reported over the last 18 months but now the papers (or at least the SMH) are calling it a crash.  People  there have been so bullish about property for the last 10 years or so it will be interesting to see how public sentiment changes over the next 6 - 12 months (if the bad news continues).


----------



## beattie

bearishbull said:


> Ratio is around 550 in my area (dublin 9). Madness.


 
Ratio is 709 for my house in D4. I just hope my landlord is not reading this thread.....


----------



## Firefly

I love the way the bears refer to apartments as "flats" in an attempt to add weight to their arguments..hilarious!!

Firefly


----------



## Guest107

An "_apartment"_ is simply EA speak for what was *ALWAYS* called a _"flat"_ in Ireland pre 1990. I never met anyone in this country who lived in an apartment before the 1990s.

Why _should _we import a French word all of a sudden when we have a perfectly good English word already. 

Naturally I am reluctant to allow EAs to redefine the english language considering what they have done to words like 'exclusive'  and 'exceptional'  in their day to day lives .

They are called 'flats' because they are on the one floor.

If they are on more than one floor they are 'maisonettes'


----------



## Calina

You forgot to gripe about the duplex.


----------



## Calina

Oh and I always understood the difference between apartment and flat as being that apartments were purpose built as apartments, but flats were as the result of houses being split down to multiple units.


----------



## Calina

Firefly said:


> I love the way the bears refer to apartments as "flats" in an attempt to add weight to their arguments..hilarious!!
> 
> Firefly



And you think this is a valuable contribution to the debate?

Currently, I have yet to see any opponent of bearish argument put forward a rational argument over "yez were wrong for five years, so why should yez be right now" and "property always rises". But this is just laughable.


----------



## whathome

Calina said:


> Oh and I always understood the difference between apartment and flat as being that apartments were purpose built as apartments, but flats were as the result of houses being split down to multiple units.


 
What about the notorious Ballymun "apartments" built in the 1960's?


----------



## macbri

The sydney market crash is making me rethink about going back into the housing market here.
We are renting 2km from opera house and paying $380 pw-we were been quoted $480k to buy it but close by apartments are now been offered $425k ono.

If these drop by another 15% to say $360k then it basically equates to our rent given interest only mortgage(assuming we put down $60k deposit)

From the above,it makes sense assuming further price drops to buy rather than rent especially as we see ourselves here long term.

Also reading that sydney(same population as`Ireland) is forecasting population growth to 5.7 million and 640k housing starts to 2031.

That works out at 27,500 pa which compares dramatically to Irelands' forecast 100k housing starts this year


----------



## soma

bearishbull said:


> Ratio is around 550 in my area (dublin 9). Madness.



That's hilarious, 550 is *exactly* my ratio too! (Dublin 6).


----------



## conor_mc

macbri said:


> If these drop by another 15% to say $360k then it basically equates to our rent given interest only mortgage(assuming we put down $60k deposit)
> 
> From the above,it makes sense assuming further price drops to buy rather than rent especially as we see ourselves here long term.


 
Sound enough logic, but don't ignore sentiment in the market either. Prices tend to overshoot on the way down too, so if $360k is a reasonable price going by the fundamentals, then a lack of confidence in the market could well see the price go beyond that before confidence is regained and prices stabilise.


----------



## whathome

Headline in the Examiner today : "Rates rise will price first-time buyers out". They focus on affordability and limits for FTB's but don't make the link that prices will have to fall.

[broken link removed]

It doesn't look like longer mortgage terms make that much of a difference over 35/40 years. There's nothing to save the market from falling IMO, the banks have already used everything in their magic box of tricks.


----------



## Guest107

whathome said:


> Headline in the Examiner today : "Rates rise will price first-time buyers out". They focus on affordability and limits for FTB's but don't make the link that prices will have to fall.



They sort of mentioned that nobody can afford to buy anymore  

But BECAUSE Ireland is DIFFERENT the lack of buyers will have no effect at all, thank God for that!


----------



## macbri

Know what your saying Conor but if I buy it will be a home not an investment.Rents will go up in the long term whilst mortgage will stay the same(if I fix it at 7%)
I would try to take an interest only loan say over 25 years and use my super to pay balance off(tax efficient and 300k now would equate to 180k in 25 years time assuming 3% inflation)

Cash flow would not be effected as rent=mortgage


----------



## beattie

whathome said:


> It doesn't look like longer mortgage terms make that much of a difference over 35/40 years. There's nothing to save the market from falling IMO, the banks have already used everything in their magic box of tricks.


 
Yes I think the banks are playing their last hand at the moment, I got an unsolicited letter from the PTSB last week offering me a 100% mortgage even though I closed the last account I had with them about 5 years ago


----------



## beattie

macbri said:


> .Rents will go up in the long term whilst mortgage will stay the same(if I fix it at 7%)


 

Why do you believe that rents will go up? Do you not think that with 100k units coming on stream next year that this will only add to the existing overhang in the market?


----------



## Bedsit

*Agents on edge over waning interest in buying homes*

http://www.unison.ie/irish_independent/stories.php3?ca=9&si=1674662&issue_id=14536

"[FONT=Verdana, Arial]ESTATE agents are waiting nervously to see if buyer interest is still on the wane, as the autumn season takes off in the coming fortnight.[/FONT]

[FONT=Verdana, Arial]Some property agents say inquiries and the numbers of people registering for new developments have increased 25pc on last year. However, others say the market is "not as strong as last year" due to the recent hikes in interest rates."[/FONT]


----------



## delboy159

Just to drag this thread back towards public sentiment and not whats happening 18,000 miles away or value divided by rent etc.....

I have knowledge of a local development (commuter belt county) as a cousin of mine was involved from day one with planning etc.  When they originally started moving on this small development around April I was told the prices they intended pitching the houses at.  There were one or two delays and prices will release on Friday - at 23% above what they were thinking in April/May.... The original prices were high, but manageable, these new prices are as expensive as I've ever seen in the area - by far.... Way above what people expected....

If the houses sell in the coming weeks (which I will report back on) then public sentiment is without a doubt bullish.....  If they drop by 10/15% then things are stabilising - but still strong and if a few houses end up going for 25% less than the asking (which is still around their intended asking 4/5 months ago) then the market is moving bearish.....

Would people agree that this is a good test of the water in the coming days and weeks?


----------



## Calina

macbri said:


> Cash flow would not be effected as rent=mortgage



Currently in my area, mortgage = approx 1.5 rent. So the maths would be different for a lot of people. To make the rent = the mortgage I need a capital injection of oh 100K.


----------



## macbri

Interesting article from the examiner especially with so much housing stock still to come on the market.

I was looking at some recent statistics on demographics of recent ftbs in Ireland.I was amazed at the high percentage of people less than 25 who make up this figure(from memory 15%) 

Again this must be unique in Europe


----------



## macbri

I'm talking about sydney rents not Irish(I'm based in sydney)


----------



## macbri

II think its' useful to show whats' happening in sydney market as it bears similiar demographics,population to Ireland.

Suppose point I'm trying to illustrate that rents will eventually equate to house prices.In Irelands' case due to stock overhang,house prices will decrease rapidly and more severly than Sydney.


----------



## Calina

beattie said:


> Why do you believe that rents will go up? Do you not think that with 100k units coming on stream next year that this will only add to the existing overhang in the market?



See, the problem I have with this is that I am not convinced that rentals will escape totally unscathed. 

If you have a lot of people trying to sell investment property - which is one of the expected drivers of increased sales supply - the only way that will avoid having an immediate impact on rental supply is for all those investments-for-sale to be unoccupied. Sure there is anecdotal evidence that a lot of them are unoccupied. But not all of them. As a lot of landlords are in the game for capital appreciation, they are likely to want to sell before they think the market crashes, and a sale is one of the exceptions to Part VI tenancies. Certainly they need to give notice but my experience in landlords selling houses that I have been renting is that it rarely plays out nice and sweetly. 

So if there is a rush of investment properties to sale, I strongly suspect that there will be a tightening of rental supply as well. As in, as sales supply increases, rents will rise. However - if those houses are not selling for any price because the supply of buyers has sort of dried up, I think that rents will level out as supply comes back on track and investor-owners, unable to sell, need to stem their losses on an going basis. They will rent out then. 

In short, I think upheaval in the property sales side of things will bring upheaval - temporarily - in the rental market also.


----------



## whathome

Interesting finfacts article on the Central Bankers meeting in Wyoming.
It looks like ECB rates could go directly to 4% rather than 3.5%.  

http://www.finfacts.com/irelandbusinessnews/publish/article_10006997.shtml

"Last week, Danish bank Danske, in a report said that the ECB may be persuaded by inflationary pressures to take its policy rate directly to 4% - not 3.5% as Danske currently expects"

The article also mentions the Sydney property crash and falling asking prices in the UK.


----------



## room305

Calina said:


> So if there is a rush of investment properties to sale, I strongly suspect that there will be a tightening of rental supply as well. As in, as sales supply increases, rents will rise. However - if those houses are not selling for any price because the supply of buyers has sort of dried up, I think that rents will level out as supply comes back on track and investor-owners, unable to sell, need to stem their losses on an going basis. They will rent out then.
> 
> In short, I think upheaval in the property sales side of things will bring upheaval - temporarily - in the rental market also.



This could easily happen alright. Landlords toss their tenants out so they can offload their property. However, once they find themselves unable to sell they will be (as you mentioned) looking to get their tenants back to help reduce their monthly losses ...

Just how much of a rental discount do you think you could command in this scenario


----------



## nacho_libre

delboy159 said:


> Would people agree that this is a good test of the water in the coming days and weeks?



I would certainly agree that this could be an indicator of how public sentiment is 
at the moment. I'd be very interested to hear how the properties are selling. 

It is definitely more relevant to us than whats happening in Oz.


----------



## Raskolnikov

polar said:


> *"Another rule of thumb is that a fair house price is 125 times the monthly rent. If a house rents for $2000 per month, then a fair price is $250,000."*


Historically, that was true. However, as long people treat houses in a speculatory manner, that figure will remain redundant. Even if there was a crash, there will always be those who will treat housing as a commodity to be bought and sold, so I don't see that figure becoming relevent in the short/mid-term.


----------



## Calina

room305 said:


> This could easily happen alright. Landlords toss their tenants out so they can offload their property. However, once they find themselves unable to sell they will be (as you mentioned) looking to get their tenants back to help reduce their monthly losses ...
> 
> Just how much of a rental discount do you think you could command in this scenario



Depends. Realistically, if supply then outstrips current supply I'd expect at least 10% of my current rate across the board. Depending on how localised excess supply is, rentals in some places (eg Lucan, parts of Swords, parts of Sandyford - all places with lots of new supply) may take a bigger hit.


----------



## StoppedClock

Raskolnikov said:


> Historically, that was true. However, as long people treat houses in a speculatory manner, that figure will remain redundant. Even if there was a crash, there will always be those who will treat housing as a commodity to be bought and sold, so I don't see that figure becoming relevent in the short/mid-term.


 
Disagree that it is irrelevant.  Assuming that we accept that a fair house price is 125 times the monthly rent then we can work out the fair price and know if we are getting good or bad value.  Very relevant in any purchase IMO.


----------



## liteweight

Calina said:


> Depends. Realistically, if supply then outstrips current supply I'd expect at least 10% of my current rate across the board. Depending on how localised excess supply is, rentals in some places (eg Lucan, parts of Swords, parts of Sandymount - all places with lots of new supply) may take a bigger hit.



Parts of Sandymount?? Definitely not. A builder kept one apartment block in Sandymount for rental. He could have sold them 10 times over but did not want to and never intended to. Any other builds in Sandymount are tiny (no more space) and enquiries are starting to be made as soon as hoarding went up! I know this because if I could get one, I'd buy it!


----------



## miju

does anyone here think that the indo article today which is here looks remarkably like an advertorial ???

i've refrained from doing so until now but i'm gonna make a call on level of price drop of 33% off the average price of a €400k house , this equates to a €140k drop in price which i believe is very plausible and bring us somewhere to 2001 levels.

my reasoning / sentiment behind this is as follows:

i'm on average wage and a mortgage of €800 from discussion with others they'd  would be affordable and not over stretch to any major extent.

the historial average length of a mortgage is 25 years so €800pm by 25yrs = €260,000 

obviously interest would have to be factored into mortgage but you get my point. i know it seems like back of beermat calculations above (and it is to an extent but it's a figure i've arrived at from talking to about 20 people over the last while and what they feel would be a bearable mortgage without killing themselves financially)

so this isn't a strong analysis of a drop with data it's more a sentiment driven calculation which is after all the topic at hand here


----------



## Bedsit

*Conspiracy Theory?*

A number of friends of mine bought houses in commuter land a few years ago for about 190K. These are worth today in the region of 300K. They have now decided to move closer to Dublin and have bought second houses (also in the region of 300K). The bank advised them against selling their existing property and was willing to lend them the extra cash to purchase the new house. The reasoning of the bank manager was that the rental income from the first house would cover the first mortgage. So they now have in effect a combined mortgage of more than 400K (a figure that they would not have qualified for in the first instance).

In the case of a slowdown or crash they may find themselves in a situation where they cannot rent their first property and have to service a mortgage of 400K. In the worst case scenario prices may drop by around 50%, and they may be forced to sell their first property by the bank for about 150K. They would live in their new house (everyone needs a place to live) while still servicing a mortgage of 250K.

From the banks point of view would this be a win win situation as they would not incur any loss in the above scenario? Also how many of these types of people are there out there at the present time?


----------



## SHARP

Bedsit said:


> *Conspiracy Theory?*
> 
> A number of friends of mine bought houses in commuter land a few years ago for about 190K. These are worth today in the region of 300K. They have now decided to move closer to Dublin and have bought second houses (also in the region of 300K). The bank advised them against selling their existing property and was willing to lend them the extra cash to purchase the new house. The reasoning of the bank manager was that the rental income from the first house would cover the first mortgage. So they now have in effect a combined mortgage of more than 400K (a figure that they would not have qualified for in the first instance).
> 
> In the case of a slowdown or crash they may find themselves in a situation where they cannot rent their first property and have to service a mortgage of 400K. In the worst case scenario prices may drop by around 50%, and they may be forced to sell their first property by the bank for about 150K. They would live in their new house (everyone needs a place to live) while still servicing a mortgage of 250K.
> 
> From the banks point of view would this be a win win situation as they would not incur any loss in the above scenario? Also how many of these types of people are there out there at the present time?


 
If there is a crash, then it won't just affect the ability to rent a property..........what if they can't actually sell the house.......at all - then what?


----------



## StoppedClock

miju said:


> does anyone here think that the indo article today which is here looks remarkably like an advertorial ???


 
AFAIK the Irish Mortgage Corporation (IMC) is owned by Hooke and McDonald so not surprising that Geoff and Frank would be talking the market up.


----------



## Calina

liteweight said:


> Parts of Sandymount?? Definitely not. A builder kept one apartment block in Sandymount for rental. He could have sold them 10 times over but did not want to and never intended to. Any other builds in Sandymount are tiny (no more space) and enquiries are starting to be made as soon as hoarding went up! I know this because if I could get one, I'd buy it!



I was talking about Sandyford. I'll go and edit above. Apologies. But I do want to clarify that I'm talking about rental supply in this case, not sales supply.


----------



## Calina

Bedsit said:


> A number of friends of mine bought houses in commuter land a few years ago for about 190K. These are worth today in the region of 300K. They have now decided to move closer to Dublin and have bought second houses (also in the region of 300K). The bank advised them against selling their existing property and was willing to lend them the extra cash to purchase the new house. The reasoning of the bank manager was that the rental income from the first house would cover the first mortgage.



Banks do not have anyone's interest but their own at heart. One of the big contributing factors to a fall in supply of starter homes has been a failure to sell on. If banks have likewise been advising people to keep their starter homes in addition to providing ever insane loan amounts, then they really should be taken out and very heavily punished - hit them in the profits if necessary - for contributing to a major economic issue for the country as a whole. 

/end moral judgement.


----------



## conor_mc

StoppedClock said:


> Disagree that it is irrelevant. Assuming that we accept that a fair house price is 125 times the monthly rent then we can work out the fair price and know if we are getting good or bad value. Very relevant in any purchase IMO.


 
I agree that there is a fundamental equivalence between rental income and fair price, however 125 times rent would equate to a rental yield of over 10%. I'd be more inclined to put the ratio at 200 times monthly rent, which is about 6%.

Either way, ratios of 500-700 are plain crazy, simple as that.


----------



## somerset

As the thread title is "Current public sentiment towards the housing market?" .... i reckon this opens it up to the opinions of the Australian public aswell as expats

I am in Oz, having emigrated a couple of years ago... and have been looking through   an Ozzy property site like myhome.ie with an Ozzy work mate.. 

I decided to show him what you can get in myhome.ie for 400,000 yo yos.... he may still be laughing...


----------



## Bedsit

*Goodbye Condo Mania (From Yahoo Finance)*


http://biz.yahoo.com/special/re0912_06_article1.html


----------



## whathome

Calina said:


> If banks have likewise been advising people to keep their starter homes in addition to providing ever insane loan amounts, then they really should be taken out and very heavily punished - hit them in the profits if necessary - for contributing to a major economic issue for the country as a whole.


 
Our bank manager was just short of pleading with us to hang on to both of our existing properties when trading up.  He was coming up with all sorts of crazy ways we could work IO so that the rent would cover the mortgages.  In the end, his "encouragement" was one of the reasons we were happy to do the opposite and sell both.


----------



## Maine

macbri said:


> Interesting article from the examiner especially with so much housing stock still to come on the market.
> 
> I was looking at some recent statistics on demographics of recent ftbs in Ireland.I was amazed at the high percentage of people less than 25 who make up this figure(from memory 15%)
> 
> Again this must be unique in Europe


 
IMO the past 18 months has seen alot of people in their mid 20s buying property.  The 100% 35yr mortgage market is directly targeting this age group.  This brings forward demand into 2006 and 2007 - effectively creating extra buyers in these time periods.  I think the stats on age being put out are skewed and know of people still in college that are attempting to get on the property ladder.

This may keep the market up for another 12 months as younger buyers soak up the next 100k units.

Hence there is every risk that prices go up in the short term probably through to summer 07 when these 'new' buyers have all bought and rates have hit 4%.  The big issue then is that normal demand for housing in 2008 / 2009 / 2010 will be much lower making a hard landing more likely.


----------



## Guest107

whathome said:


> He was coming up with all sorts of crazy ways we could work IO



And He will be among the first to be let go once the gravy train stops  . The banks will keep their branch yellowpackers because they will be cheap to run and fully trained and up to speed for the post 2015 calf run ......the next baby bull .


----------



## Remix

miju said:


> does anyone here think that the indo article today which is here looks remarkably like an advertorial ???


 
This looks like an abridged version of what appeared in the paper Indo this morning.

The paper version says EAs were admitting that after the madness of late 2005/early 2006 asking prices AND actual prices had fallen in some areas of Dublin. The example they gave was a house which earlier sold for 700k and would no longer be expected to fetch that amount.


----------



## tententwenty

Calina said:


> Banks do not have anyone's interest but their own at heart. One of the big contributing factors to a fall in supply of starter homes has been a failure to sell on. If banks have likewise been advising people to keep their starter homes in addition to providing ever insane loan amounts, then they really should be taken out and very heavily punished - hit them in the profits if necessary - for contributing to a major economic issue for the country as a whole.
> 
> /end moral judgement.



I'd be in favour of severe censure.


----------



## Raskolnikov

StoppedClock said:


> Disagree that it is irrelevant. Assuming that we accept that a fair house price is 125 times the monthly rent then we can work out the fair price and know if we are getting good or bad value. Very relevant in any purchase IMO.


It's all relative. If you think 125 times monthly rent is a fair price, I doubt you'll ever own a home unless there was a catastrophe in the property market.


			
				somerset said:
			
		

> I decided to show him what you can get in myhome.ie for 400,000 yo yos.... he may still be laughing...


Pointless comparison. Australians earn a lot less than we do. As a corollary, I could show a Norwegian property prices here and he would consider it very affordable relative to his income.


----------



## StoppedClock

Raskolnikov said:


> It's all relative. If you think 125 times monthly rent is a fair price, I doubt you'll ever own a home unless there was a catastrophe in the property market.


 
I prefaced my statement with "Assuming we accept" as I personally do not agree with that ratio but my point was not about the ratio but rather about the idea that irrespective of what actual price is we must have our own measure of what prices should be to determine if we are getting good or bad value.  It touches on a discussion that I oft have re. _houses always go up in the long term _which I accept but the point so many people miss is that there are better and worse times to buy.


----------



## somerset

I think the stats on age being put out are skewed and know of people still in college that are attempting to get on the property ladder.



how??


----------



## liteweight

somerset said:


> I think the stats on age being put out are skewed and know of people still in college that are attempting to get on the property ladder.
> 
> 
> 
> how??



Parents paying deposit, going guarantor or just buying it to get children on property ladder, I suspect.


----------



## whizzbang

delboy159 said:


> Would people agree that this is a good test of the water in the coming days and weeks?



I'd be very interested in this.


----------



## Maine

somerset said:


> I think the stats on age being put out are skewed and know of people still in college that are attempting to get on the property ladder.
> 
> 
> 
> how??


 
some parental assistance and using wages from working experience year - buying outside a rural town so prices are relatively more do-able


----------



## whizzbang

miju said:


> does anyone here think that the indo article today which is here looks remarkably like an advertorial ???



"[FONT=Verdana, Arial] Although there was a "positive feeling" in the market, vendors were now forced to be more realistic in their asking prices, he said. "Vendors can see the high level of supply out there. Buyers are not in such a rush to view properties and make an offer. They are now much more likely to have four or five similar properties to look at.""

Looks like REAs are now talking down the market and trying to lower sellers expectations.. this is the beginning of the end in my book. It must mean they are afraid sales will dry up due to stubbern sellers.
[/FONT]


----------



## room305

Maine said:


> some parental assistance and using wages from working experience year - buying outside a rural town so prices are relatively more do-able



Talk about madness. How do these people know where they will end up working?

That said, if someone is planning on putting several children through college in the same town, it might make financial sense for them to buy rather than paying rent for four or five years for each child.


----------



## walk2dewater

Can't happen here right?

http://www.smh.com.au/news/national...-in-debt-crisis/2006/08/20/1156012414995.html


----------



## phoenix_n

Irish independent 


whizzbang said:


> "[FONT=Verdana, Arial] Although there was a "positive feeling" in the market, vendors were now forced to be more *realistic* in their asking prices, he said. "Vendors can see the high level of supply out there. Buyers are not in such a rush to view properties and make an offer. They are now much more likely to have four or five similar properties to look at.""[/FONT]


 
and from the sydney morning herald

"There are some sad stories. But we have to show the sellers the comparable sales and say honestly this is where the market is *realistically* at."

Seems they are talking the same language but the irish market has yet to be 'called'.


----------



## liteweight

StoppedClock said:


> AFAIK the Irish Mortgage Corporation (IMC) is owned by Hooke and McDonald so not surprising that Geoff and Frank would be talking the market up.



Not true, they share a building.


----------



## Maine

IMO the CAO news yesterday is not good for investors in towns with ITs- likely to be lower student number intakes going forward.


----------



## Bedsit

ECB rises starting to impact on house prices (RTE)

http://www.rte.ie/business/2006/0822/house.html


----------



## firinn

I have been reading through this thread for a while and I have often noticed posts (in fact there is one a few posts up in this thread) suggesting that australians earn a lot less than we do and that this should be taken into account when comparing property prices between Ireland and Australia. 

I lived in Australia for a number of years and returned to Ireland quite recently, judging by my field (IT) and other fields that I am aware of, Australians do not earn much less than us. From my experience they earn approximately 10-20% less, also the cost of living (aside from property prices) is considerably lower there, allowing far more disposable income to be thrown at a mortgage.

Admittedly it is difficult to compare countries in terms of disposable income as there are many factors to be taken into consideration (access to free education, health etc.), but on the whole even though property prices are considered high in australia (with respect to rental income ratio) they are not even remotely comparable to house prices in Ireland and the lower income argument simply does not apply. Houses in Ireland are quite simply ridiculously over-priced with respect to fundamentals, how long they will stay that way I do not know.


----------



## fatmanknows

Bedsit said:


> ECB rises starting to impact on house prices (RTE)
> 
> http://www.rte.ie/business/2006/0822/house.html


 
Above report mentions house prices grew 1.1% last month. I cannot believe such tosh - their info is way out of date IMO.


----------



## phoenix_n

Bedsit said:


> ECB rises starting to impact on house prices (RTE)
> 
> http://www.rte.ie/business/2006/0822/house.html


 
"The latest Permanent TSB/ESRI house price index says that house prices grew nationally by 1.1% last month. "

I figure those rates reflect houses sale agreed in may/june ?


----------



## whathome

phoenix_n said:


> I figure those rates reflect houses sale agreed in may/june ?


 
No, earlier than that - today's ESRI/PTSB report relates to market activity in April/May

The ESRI/PTSB report is based on mortgages drawn down when final contracts are signed. This means that there is approx 10 week lag on sale agreed prices. Add another month for report preparation and you have data that is three to four months old at the time of release.


----------



## Guest107

phoenix_n said:


> I figure those rates reflect houses sale agreed in may/june ?



Correct. They are a lag indicator where we tend to discuss lead indicators around here ...such as sentiment


----------



## StoppedClock

firinn said:


> I have been reading through this thread for a while and I have often noticed posts (in fact there is one a few posts up in this thread) suggesting that australians earn a lot less than we do and that this should be taken into account when comparing property prices between Ireland and Australia.
> 
> I lived in Australia for a number of years and returned to Ireland quite recently, judging by my field (IT) and other fields that I am aware of, Australians do not earn much less than us. From my experience they earn approximately 10-20% less, also the cost of living (aside from property prices) is considerably lower there, allowing far more disposable income to be thrown at a mortgage.
> 
> Admittedly it is difficult to compare countries in terms of disposable income as there are many factors to be taken into consideration (access to free education, health etc.), but on the whole even though property prices are considered high in australia (with respect to rental income ratio) they are not even remotely comparable to house prices in Ireland and the lower income argument simply does not apply. Houses in Ireland are quite simply ridiculously over-priced with respect to fundamentals, how long they will stay that way I do not know.


 
Well said firinn, agree completely, I had the exact same experience


----------



## phoenix_n

whathome said:


> No, earlier than that - today's ESRI/PTSB report relates to market activity in April/May
> 
> The ESRI/PTSB report is based on mortgages drawn down when final contracts are signed. This means that there is approx 10 week lag on sale agreed prices. Add another month for report preparation and you have data that is three to four months old at the time of release.


 
The rate when announced then in oct for July is going to be shocking.


----------



## Bedsit

Anyone thinking of starting a new business then maybe the Irish equivalent of the following may be a winning idea:

Foreclosure.com


RealtyTrac.com
[broken link removed]


----------



## Gab24

Hi,


Just noticed some %10 drop in asking prices for newly built apartments in Limerick. These 2 bedrooms apartments used to have a starting price of 250.000 up to a few weeks ago, through GVM auctioneers. They were also listed on daft for that price:


http://www.daft.ie/searchsale.daft?search=1&selected_agent=&id=88316&s[agent_id]=2758&s[p]=rprppuwq


But, the last advertising from GVM is asking for 225.000:

[broken link removed]


It might be a clear sign that the upper limit was reached and it's harder to find buyers at the prices from a few months ago.  

 The builders are the first ones to drop the prices, as they usually make huge profits, anyway.

It's very curious for me why the vast majority of building companies for houses are irish only. Considering the huge profits one can make here, I was expecting all the past few years to see german and other european companies to try to get a slice of the pie and create a bit more competition between builders. Is it because of the "extra-regulation" ?


----------



## HighFlier

€2.25m wow! expensive


----------



## StoppedClock

HighFlier said:


> €2.25m wow! expensive


 
Yes but the fundamentals are still very strong. 

_Ideal investment._


----------



## whizzbang

Bedsit said:


> Anyone thinking of starting a new business then maybe the Irish equivalent of the following may be a winning idea:



I was thinking of starting www.hiredgoons.ie

it has been a  lean few years for the hired goon industry.


----------



## Guest107

*Down!*



Gab24 said:


> But, the last advertising from GVM is asking for 225.000:
> 
> [broken link removed]



The townhouses are still €295 on both Daft and GVM

Watch out for quietly increasing allowances which is how price cuts are often masked  , eg the €5000 kitchen allowance becomes €10000 

Things are bad when they simply cut the headline price  because they cannot mask the price cut.


----------



## Raskolnikov

firinn said:


> I have been reading through this thread for a while and I have often noticed posts (in fact there is one a few posts up in this thread) suggesting that australians earn a lot less than we do and that this should be taken into account when comparing property prices between Ireland and Australia.
> 
> I lived in Australia for a number of years and returned to Ireland quite recently, judging by my field (IT) and other fields that I am aware of, Australians do not earn much less than us. From my experience they earn approximately 10-20% less, also the cost of living (aside from property prices) is considerably lower there, allowing far more disposable income to be thrown at a mortgage.
> 
> Admittedly it is difficult to compare countries in terms of disposable income as there are many factors to be taken into consideration (access to free education, health etc.), but on the whole even though property prices are considered high in australia (with respect to rental income ratio) they are not even remotely comparable to house prices in Ireland and the lower income argument simply does not apply. Houses in Ireland are quite simply ridiculously over-priced with respect to fundamentals, how long they will stay that way I do not know.


I'm not arguing that property price in Ireland is ridiculously inflated, I think it is too. I'm not even going to argue the degree as to whether the Irish or Australians get paid more. My problem is; as you yourself touched on, comparisons between prices in Ireland and Australia are difficult since we've got two completely different economies, tax systems, property markets, etc. 

As an aside, it's interesting how Australia is rapidly becoming the favoured immigration route for the countries of the British Isles. Is there anyone who wants to immigrate to the USA anymore?


----------



## nacho_libre

Raskolnikov said:


> As an aside, it's interesting how Australia is rapidly becoming the favoured immigration route for the countries of the British Isles. Is there anyone who wants to immigrate to the USA anymore?



Yes. I know 5 people that have emigrated to the US in the past 2-3 years. One as 
recently as last week. Although this is off the topic, but I agree that the Oz route is 
now more common than the US.


----------



## Firefly

If we are going to have an imminent housing crash (affecting the whole economy), then why are our banking shares so high...surely all the "smart" money would have cashed in?? 
Firefly


----------



## StoppedClock

Firefly said:


> If we are going to have an imminent housing crash (affecting the whole economy), then why are our banking shares so high...surely all the "smart" money would have cashed in??
> Firefly


 
Banks have sold on a lot of their risk (to US investors getting out of their own Banks  ) also they are very profitable at the moment and investors believe that any property crash (if they believe in one at all) will play out slowly so plenty of time to dump bank stock later.


----------



## room305

Firefly said:


> If we are going to have an imminent housing crash (affecting the whole economy), then why are our banking shares so high...surely all the "smart" money would have cashed in??
> Firefly



Actually banking shares are extremely low. They trade at a P/E ratio of around 10.

So perhaps the market doesn't feel current earnings are sustainable ...


----------



## Guest107

American News

Not as advanced as Australia , yet, but bad

[broken link removed]


----------



## wolfie

House rental prices have always been a fair ratio to wages.Mortgage payments  are not.


----------



## Maine

Firefly said:


> If we are going to have an imminent housing crash (affecting the whole economy), then why are our banking shares so high...surely all the "smart" money would have cashed in??
> Firefly


 
Because borrowings are growing at 30% and it will take time for this to slow down meantime banks will make alot of profit.  This massive momentum will carry growth in house prices into 2007 at a national level.

Only if ECB rates get to 3.5% by Cmas will the going get tougher and if they stop there it could stretch the growth all the way to end 2007 particulary with SSIA support.

Irish banks know that they can change the rules and make credit easier to get, find new buyers and hence stretch the game further into the future.  In US at peak of their recent boom you did not even have top pay all the interest on IO mortgages as some of the interest was deferred and added to your mortgage for the first few years. So there are a few tricks left in the bag yet.


----------



## wolfie

[broken link removed]


----------



## CelloPoint

Maine said:


> Because borrowings are growing at 30% and it will take time for this to slow down meantime banks will make alot of profit.  This massive momentum will carry growth in house prices into 2007 at a national level.


The momentum aspect is a very good point.



Maine said:


> Only if ECB rates get to 3.5% by Cmas will the going get tougher and if they stop there it could stretch the growth all the way to end 2007 particulary with SSIA support.


I don't think there's much doubt that the ECB base rate will hit 3.5% by December (considering futures trading). At the moment, it's a question of whether the ECB base rate will go even higher.



Maine said:


> Irish banks know that they can change the rules and make credit easier to get, find new buyers and hence stretch the game further into the future.  In US at peak of their recent boom you did not even have top pay all the interest on IO mortgages as some of the interest was deferred and added to your mortgage for the first few years. So there are a few tricks left in the bag yet.


You're right. People are so naive with regards banks in this country. I know people who talk of their bank manager as if he's their best mate, but I adopt a much more arms-length approach in dealing with banks. You cannot afford to get sucked into the glitz and marketing-speak behind the various 'offers' made available (in a very complicated fashion) by banks today.


----------



## wolfie

[broken link removed]


----------



## bearishbull

Raskolnikov said:


> It's all relative. If you think 125 times monthly rent is a fair price, I doubt you'll ever own a home unless there was a catastrophe in the property market.
> 
> Pointless comparison. Australians earn a lot less than we do. As a corollary, I could show a Norwegian property prices here and he would consider it very affordable relative to his income.


 
Actually Norwegian property isnt expensive relative to Norwegian wages or Irish house prices, they seem to be less exuberantthere as illustrated in these articles. 
http://business.timesonline.co.uk/article/0,,8209-2281123,00.html
http://money.guardian.co.uk/weekly/story/0,,1778822,00.html

Can you imagine how irish people would squander such a windfall! Even with all their REAL wealth the norwegians dont get carried away with house price speculation and materialism to anywhere near the extent the Irish do.


----------



## whathome

StoppedClock said:


> AFAIK the Irish Mortgage Corporation (IMC) is owned by Hooke and McDonald so not surprising that Geoff and Frank would be talking the market up.


 


liteweight said:


> Not true, they share a building.


 
Are you sure about this liteweight?

A friend of mine bought through Hooke and Macdonald last year and they told her that she could arrange her mortgage with their sister company - Irish Mortgage Corporation (IMC).

...and now that they are losing Irish buyers, they are trying to find a new story!
"Many first time buyers are foreign, says study"
http://www.rte.ie/news/2006/0823/housing.html

They did the same thing last year to get younger buyers to join the pyramid
From October 2005: "New research reveals First-Time Buyers begin property search in early twenties" 
[broken link removed]


----------



## beattie

The IT is quick out of the traps this morning to reassure that all is well with regard to the property outlook....


[broken link removed]


----------



## whathome

beattie said:


> The IT is quick out of the traps this morning to reassure that all is well with regard to the property outlook....
> 
> 
> [broken link removed]


 
At least they mentioned that the ESRI/PTSB figures were months out of date:

"A spokesman said the full impact of recent interest rate rises may still not be feeding through to the figures, which reflect the drawing down of mortgage loans, not their approval. "It may be a couple of months yet before the full impact of the most recent rate rises show up in the figures," he said."


----------



## phoenix_n

Heard on RTE news that some tabloid had a headline about 'irish property crash' or something (not that i would give credence to it). Did anyone catch the name of the 'newspaper' ?


----------



## Marie

"The average price of a house nationally in July was €303,274, €25,000 more than at the end of last year. In Dublin, the average home now costs €408,959. This time last year, it was just over €350,000.
Prices have continued to rise this year despite four quarter-point increases in interest rates, most recently early this month. The European Central Bank (ECB) is expected to increase rates by a further half percentage point before the end of the year. (snip)

A spokesman said the full impact of recent interest rate rises may still not be feeding through to the figures, which reflect the drawing down of mortgage loans, not their approval. "It may be a couple of months yet before the full impact of the most recent rate rises show up in the figures," he said.

Homeowners with a mortgage of €250,000 over 25 years are now paying an extra €134 in monthly repayments compared to last December (snip) Meath, Kildare, Wicklow and Louth has seen the most dramatic rise in prices over the past year, jumping by 18.6 per cent - or more than four times faster than in the previous year. (todays I.T. frontpage)

It looks as if - regardless of the sense of the unreality of property on this forum - potential purchasers just think "Well - what's an extra hundred odd euro a month" and keep on firing on all cylinders!!


----------



## Guest107

whathome said:


> "Many first time buyers are foreign, says study"
> http://www.rte.ie/news/2006/0823/housing.html



Many are indeed, the demographic that is buying is mainly that which gets long term contracts in the Health services (India , Pakistan, Phillipines) and not the recent eastern european influx who tend to work in construction and services .

Many Indian and Pakistani buyers have been here for years in sizeable numbers , arguably since the 1980s ,  while the Filipino group started to come in the late 1990. The study did not produce a nuanced view of 'who' is buying of course.

They are not to be confused with citizens of EU accession states post 2004 who make up the greater number of foreign nationals in Ireland nowadays.


----------



## whathome

Marie said:


> It looks as if - regardless of the sense of the unreality of property on this forum - potential purchasers just think "Well - what's an extra hundred odd euro a month" and keep on firing on all cylinders!!


 
Yes, it was definitely firing on all cylinders in April/May, this was when the bulk of the property in the report would have been sale-agreed. The market this spring was absolutely crazy. Looks like the slowdown is beginning to feed through however, the ESRI reports in the coming months will be very interesting.


----------



## tententwenty

2Pack said:


> Many Indian and Pakistani buyers have been here for years in sizeable numbers , arguably since the 1980s ,  while the Filipino group started to come in the late 1990. The study did not produce a nuanced view of 'who' is buying of course.


Most of the Filipinos are nurses who are subject to annual reviews and examinations in order to maintain their working visa status. Some have become naturalised, but I guarantee you that most of them have little desire to settle in Ireland, and are setting themselves up with a nice nest egg at home, as well as a small palace that they couldn't possibly afford in Ireland. The only reason a lot of them stay this long is because they have to support extended family networks who pooled the money to educate them and send them over here in the first place. I spend several months a year over there, so I know whereof I speak.

This report seems to be rearranging deck chairs on the titanic, although I can't speak for Indians or Pakistanis.


----------



## EvilDoctorK

> ...and now that they are losing Irish buyers, they are trying to find a new story!
> "Many first time buyers are foreign, says study"
> http://www.rte.ie/news/2006/0823/housing.html


 
Indeed  - IMC is a (relatively) small brokerage  - representing a small %age of the market - I would imagine they have a disproportionately high number of "foreign" buyers ... if you looked at direct applications to banks etc. I think you'd find the overall number would be a lot lower than the 18.5% quoted in this report.


----------



## Bedsit

Actually most of the foreign nurses are not directly hired by the HSE. They are subcontracted from other agencies and are on work permits. Most of these immigrants may not wish to stay in Ireland long term, however they have no intention of leaving without an EU passport either.

The thing to remember is that today we are at full employment. Not much attention is paid when jobs are lost to foreigners at the low skilled end of the spectrum. However if jobs of middle class Ireland start to be lost to foreign workers, you can be sure that the local politicians will hear about this. Just take a look at the UK media in the last few days. I would suspect that the government under pressure will have to introduce new laws to curb immigration. Maybe even stop the work permit/visa scheme, and in extreme circumstances change citizenship laws. Thats when the real trouble will start!



2Pack said:


> Many are indeed, the demographic that is buying is mainly that which gets long term contracts in the Health services (India , Pakistan, Phillipines) and not the recent eastern european influx who tend to work in construction and services .
> 
> Many Indian and Pakistani buyers have been here for years in sizeable numbers , arguably since the 1980s ,  while the Filipino group started to come in the late 1990. The study did not produce a nuanced view of 'who' is buying of course.
> 
> They are not to be confused with citizens of EU accession states post 2004 who make up the greater number of foreign nationals in Ireland nowadays.





tententwenty said:


> Most of the Filipinos are nurses who are subject to annual reviews and examinations in order to maintain their working visa status. Some have become naturalised, but I guarantee you that most of them have little desire to settle in Ireland, and are setting themselves up with a nice nest egg at home, as well as a small palace that they couldn't possibly afford in Ireland. The only reason a lot of them stay this long is because they have to support extended family networks who pooled the money to educate them and send them over here in the first place. I spend several months a year over there, so I know whereof I speak.
> 
> This report seems to be rearranging deck chairs on the titanic, although I can't speak for Indians or Pakistanis.


----------



## Raskolnikov

2Pack said:


> Many Indian and Pakistani buyers have been here for years in sizeable numbers , arguably since the 1980s , while the Filipino group started to come in the late 1990. The study did not produce a nuanced view of 'who' is buying of course.


Anecdotally, does anyone know of a Pole or Lithuanian who has bought a house in Ireland? I never met one, on the otherhand, I know of several Indian/Pakistani/Filipino homeowners.


----------



## Guest126

Most of them I know can't afford a car in Ireland - never mind a house!

I know a few of them who are buying/building in their home country though.


----------



## Bedsit

That is just the point. EU migrants can easily move to another country in search of jobs. However Non-EU nationals do not have that luxuary, and that is one of their main reasons for buying houses. The thinking is that it will become very difficult politically for the govenrment to force them to leave if they have bought a house in Ireland and established roots here.



Raskolnikov said:


> Anecdotally, does anyone know of a Pole or Lithuanian who has bought a house in Ireland? I never met one, on the otherhand, I know of several Indian/Pakistani/Filipino homeowners.


----------



## phoenix_n

whathome said:


> Yes, it was definitely firing on all cylinders in April/May, this was when the bulk of the property in the report would have been sale-agreed. The market this spring was absolutely crazy. Looks like the slowdown is beginning to feed through however, the ESRI reports in the coming months will be very interesting.


 
May not have to wait so long.

And doing some research. Contacted an EA about a property in D7 asking price 750K. Emailed saying that i would only be interested in viewing if vendor was willing to negotiate around the 700K mark. 

This was the response 

I would not think they clients would accept any as low as EUR700,000 for the house, however if you budget was possible to stretch further and you wish to view and make an offer we will put it to them for their decision


Now this in itself means nothing but.....?


----------



## FrankBascomb

agree


----------



## Howitzer

phoenix_n said:


> And doing some research. Contacted an EA about a property in D7 asking price 750K. Emailed saying that i would only be interested in viewing if vendor was willing to negotiate around the 700K mark.
> 
> This was the response
> 
> I would not think they clients would accept any as low as EUR700,000 for the house, however if you budget was possible to stretch further and you wish to view and make an offer we will put it to them for their decision
> 
> 
> Now this in itself means nothing but.....?


 
Just means Mary Hanafin needs to look at the falling standards of English as well as Maths.


----------



## room305

Raskolnikov said:


> Anecdotally, does anyone know of a Pole or Lithuanian who has bought a house in Ireland? I never met one, on the otherhand, I know of several Indian/Pakistani/Filipino homeowners.



There are two Polish guys working in our office. Neither has bought here but both say they have numerous Polish friends living here who have bought. They keep the mortgage low by sharing with a large number of people and are buying for the same reason many Irish are - capital appreciation.

In a couple of years (is the rationale), they will have built sufficient equity in their Irish homes to buy a house outright in Poland.

Needless to say, the two Polish guys working in the office here consider it an enormously risky strategy and are surprised the people buying cannot see this.


----------



## phoenix_n

Howitzer said:


> Just means Mary Hanafin needs to look at the falling standards of English as well as Maths.


 
? (dont know how i got that A in Honours English then ?)


----------



## Guest126

For a "Real Estate Executive" I thought that was pretty good English!!


----------



## Guest107

txt spk via a spell check I'll wager


----------



## ninsaga

phoenix_n said:


> May not have to wait so long.
> 
> And doing some research. Contacted an EA about a property in D7 asking price 750K. Emailed saying that i would only be interested in viewing if vendor was willing to negotiate around the 700K mark.
> 
> This was the response
> 
> I would not think they clients would accept any as low as EUR700,000 for the house, however if you budget was possible to stretch further and you wish to view and make an offer we will put it to them for their decision
> 
> 
> Now this in itself means nothing but.....?



but what?


----------



## bogwarrior

phoenix_n said:


> I would not think they clients would accept any as low as EUR700,000 for the house, however if you budget was possible to stretch further and you wish to view and make an offer we will put it to them for their decision



I thought estate agents had to inform the seller of any offers made on a property? (even ones they consider too low)


----------



## delboy159

Phoenix_n - is the price of 750k a new threshold for that type of house in the area or is it at the silly April/May values or is it slightly below the silly figures?

Just to put the house and the price in context?


----------



## tententwenty

Bedsit said:


> That is just the point. EU migrants can easily move to another country in search of jobs. However Non-EU nationals do not have that luxuary, and that is one of their main reasons for buying houses. The thinking is that it will become very difficult politically for the govenrment to force them to leave if they have bought a house in Ireland and established roots here.


Yes but most non-eu nationals with the exception of "refugees" and so on come from completely different climates and cultures, and would like nothing better than to retire to their homelands with a few quid in their pockets and raise their families there. Thats why they rent as cheaply as possible, save as much cash as they can, then go home. 

Alternately if they stay here a few years they can become naturalised and can move around the EU freely. An IT qualification is seen as Ireland's backdoor to Europe in many circles, since its one of the few easily achievable qualifications that will get you a work visa no questions asked. Which, incidentally, keeps IT wages in this country depressed. There is no lack of IT professionals in Ireland, but a severe lack of them willing to work as slave labour.


----------



## Bedsit

Not neccessarily the whole picture. What you have to realize is that most of the  poeple coming from these countries (populations in the 100s of millions) are not the cream of the crop. Those tend to go to the US!! These are the guys who have a good qualification, but are not able to get decent jobs (think civil service) back home as there is intense competion for them. Thus they have no real future back home and have no intention of going back. Also once they come to Europe the problems in their home countries become more amplified and makes it even more difficult for them to contemplate returning home.



tententwenty said:


> Yes but most non-eu nationals with the exception of "refugees" and so on come from completely different climates and cultures, and would like nothing better than to retire to their homelands with a few quid in their pockets and raise their families there. Thats why they rent as cheaply as possible, save as much cash as they can, then go home.


----------



## Persius

tententwenty said:


> Yes but most non-eu nationals with the exception of "refugees" and so on come from completely different climates and cultures, and would like nothing better than to retire to their homelands with a few quid in their pockets and raise their families there. Thats why they rent as cheaply as possible, save as much cash as they can, then go home...


 
That's what they said in Germany in the 60s when they started their Gastarbeiter program, offering foreign workers (Italians, Spanish, Portuguese, Greeks, Yugoslavs and Turks) visas to work in Germany. At the time the German economy was booming and the wages were much higher than in the foreign workers' home countries. Both the native Germans, and the immigrants, felt that they would arrive, work a few years, earn some money and then go home. 

However many, if not most, of the foreigners ended up putting down roots in Germany. Even as unemployment started to rise to the current 10%, and in some cases the home economy (e.g. Spain) was doing well, the foreigners remained in Germany. That's because Germany was now where their life was (they'd got married, their kids were in school, they had a good, rented, appartment etc). The Germans learnt that you're not importing workers, but human beings with all their desires, ideas, dreams and illogicalities.

It's way to early to say what will happen in Ireland. The concept of "EU migrants" and "freedom of movement" did not exist in the 60s as the UK, France and Germany had their immigration waves. However, based on previous patterns in those countries, I would expect quite a lot of migrants will remain in Ireland for longer than people expect, and through a downturn. Whether they will catch the Irish bug and become property purchasers/investors is also unclear. But I do believe they will play a part in the housing market in the next 20 or more years as they will obviously still need somewhere to live - and that may change from a house share for five lads to three houses for a family with kids for three of those five lads (the other two having gone home or elsewhere).


----------



## tententwenty

Bedsit said:


> Not neccessarily the whole picture. What you have to realize is that most of the  poeple coming from these countries (populations in the 100s of millions) are not the cream of the crop. Those tend to go to the US!! These are the guys who have a good qualification, but are not able to get decent jobs (think civil service) back home as there is intense competion for them. Thus they have no real future back home and have no intention of going back. Also once they come to Europe the problems in their home countries become more amplified and makes it even more difficult for them to contemplate returning home.


Honestly I think you are playing down the type of people who come to Ireland too much. Anecdotes aside, Ireland is one of the richest nations on earth per head, and the money attracts the talent. Doesn't mean they are buying houses however.


----------



## tententwenty

Persius said:


> It's way to early to say what will happen in Ireland. The concept of "EU migrants" and "freedom of movement" did not exist in the 60s as the UK, France and Germany had their immigration waves.


Thats an interesting and correct point you make there, its quite likely that a certain amount of these working immigrants will stay. However I guarantee you even if they do, they won't be prolonging this property bubble for the banks and mortgage lenders.


----------



## Bedsit

Its more to do with the psyche in those countries. Traditionally the US has been the mecca for those looking for a better life, and this still continues to be the case even today. The best brains from these countries still go to the US where they are offered the best jobs and the highest salaries. Can you honestly say that there is any serious R&D going on in the Irish subsidaries of US multinationals here. The IT consultants that you talk about are mostly people who have qualified from second tier institutions and not from the premiere colleges.



tententwenty said:


> Honestly I think you are playing down the type of people who come to Ireland too much. Anecdotes aside, Ireland is one of the richest nations on earth per head, and the money attracts the talent. Doesn't mean they are buying houses however.


----------



## cjh

*From today's Indo......*



*Number of new houses and apartments up 24% this year*
*Wednesday August 23rd 2006*

The number of new houses built so far this year is up almost 24% on last year, according to new figures from the Department of the Environment. 
Publishing the figures today, Junior Minister Noel Ahern said it appeared that the number of houses and apartments being built would exceed all records by the end of the year.

Mr Ahern also said he was concerned by the increasing number of people who buy houses off the plans and sell them on immediately.

He said these investors add nothing to the economy and were only pushing up prices for people looking for a place to live.


----------



## ivuernis

cjh said:


> Mr Ahern also said he was concerned by the increasing number of people who buy houses off the plans and sell them on immediately.
> 
> He said these investors add nothing to the economy and were only pushing up prices for people looking for a place to live.


 
It's a bit late in the day for this isn't it!


----------



## Persius

tententwenty said:


> Thats an interesting and correct point you make there, its quite likely that a certain amount of these working immigrants will stay. However I guarantee you even if they do, they won't be prolonging this property bubble for the banks and mortgage lenders.


 
But they may act to prevent dramatic house price falls in nominal terms, by proping up the rental market. Honestly I think the demographics will result in static prices (on average) in nominal terms over the next 10 or so years. I do think prices will fall somewhat in less desirable areas. And I think they could still rise somewhat in prime areas.


----------



## cjh

Anti - Flipping measures in the next budget?
Fianna Fail specialise in closing the door after the horse has bolted.


----------



## Howitzer

ivuernis said:


> It's a bit late in the day for this isn't it!


 
Expect this loophole to be closed off in the next budget.


----------



## tententwenty

Bedsit said:


> Its more to do with the psyche in those countries. Traditionally the US has been the mecca for those looking for a better life, and this still continues to be the case even today.


You'd be surprised how few people are hypnotised by the "American dream". In the Philippines for example, a worker is as likely to go to Dubai or Singapore for a job as the US. Or alternately follow the oil companies. They go where the work is.



Bedsit said:


> The best brains from these countries still go to the US where they are offered the best jobs and the highest salaries. Can you honestly say that there is any serious R&D going on in the Irish subsidaries of US multinationals here. The IT consultants that you talk about are mostly people who have qualified from second tier institutions and not from the premiere colleges.


Have you got one single statistic to back that rather sweeping and extravagant claim up?


----------



## tententwenty

Persius said:


> But they may act to prevent dramatic house price falls in nominal terms, by proping up the rental market. Honestly I think the demographics will result in static prices (on average) in nominal terms over the next 10 or so years. I do think prices will fall somewhat in less desirable areas. And I think they could still rise somewhat in prime areas.


Ah no now you're way off track There are over 275,000 houses sitting empty around the country. Thats a whole heap of renters, and that excludes the fact that the rental market is oversaturated with places to stay at the moment. 

Rental prices and mortgage prices are generally completely unrelated. Just because the landlord needs to cover his mortgage doesn't mean he will ever find tenants willing (or able) to pay for it for him. Rent doesn't even cover the interest alone on a lot of mortgages.


----------



## Bedsit

Just look at the number of H1B visas and the proportion of them granted to Asian countries. I am in academia and most of the applications we get for postgraduate studies are from institutions that we would classify as second tier colleges. Graduates entering any of the premiere instutions are guaranteed a ticket to the US the day they start their course.

Take a look at the followng links:

[broken link removed]
[broken link removed]



tententwenty said:


> Have you got one single statistic to back that rather sweeping and extravagant claim up?


----------



## CelloPoint

cjh said:


> Anti - Flipping measures in the next budget?
> Finna Fail specialise in closing the door after the horse has bolted.



Spot on.


----------



## thewatcher

cjh said:


> Anti - Flipping measures in the next budget?
> Finna Fail specialise in closing the door after the horse has bolted.


 
    the horse is halfway down the port tunnel about to go for a swim !.


----------



## Remix

> Speaking at the publication of new figures showing that housing output continues to rise at record levels, the Minister said he would be speaking to the Minister for Finance about the possibility of introducing measures in the next Budget to curb property speculation.


 
http://www.rte.ie/business/2006/0823/houses.html


----------



## whathome

Government measures to squeeze out speculation...?

RTE TV news at 1 interviewed Noel Ahern today - he said that he would be working with Dept of Finance on introducing measures to "squeeze out speculators", emphasised that property should be for genuine buyers not just people trying to profit on a growing market.

I think this is well overdue - should allow genuine first time buyers to have a better chance of buying new builds.


----------



## shanegl

cjh said:


> *From today's Indo......*


 
Aren't the number of new builds started this year way down on previous years?


----------



## Howitzer

shanegl said:


> Aren't the number of new builds started this year way down on previous years?


 
Where did you hear that? They're way up.

Seriously, where did you hear that? EA, bank manager, broker?


----------



## shanegl

It was widely reported in the media in the last couple of months. I'm talking about new builds started, not completed.


----------



## Guest107

*Stat Note*

There are 3 significant stats

1. Planning applications 
2. Notified Housing Starts
3. Notified Completions

1 and 2 are down 

but not 3 ...yet.

As 1 and 2 are down 3 must drop next year.


----------



## Howitzer

shanegl said:


> It was widely reported in the media in the last couple of months. I'm talking about new builds started, not completed.


 
The article you quoted referred to new builds completed this year.


----------



## tententwenty

Bedsit said:


> Just look at the number of H1B visas and the proportion of them granted to Asian countries. I am in academia and most of the applications we get for postgraduate studies are from institutions that we would classify as second tier colleges. Graduates entering any of the premiere instutions are guaranteed a ticket to the US the day they start their course.
> 
> Take a look at the followng links:


The two articles you point to relate to Indians in America. They don't have a bearing on the quality of students coming to Ireland. And again, you refer only to India, whih is but one source of immigrant workers in Ireland.

Unless you are the Minister responsible for accepting postgraduate students to Irish courses, or have a paper released by same, you aren't in a position to comment on the overall quality of foreign students arriving in Ireland from poor countries. And in any case, we aren't talking about students here.

And to wrap it up, as it becomes less germane to the discussion, the average wage in India is 5 to 10 bucks a week. Even on minimum wage here, an Indian can go back home and live like a king after a few years working.

Even assuming what you say is true, you don't need to get a job in the civil service if you don't need to work again. And if you do feel the need to work again, you have more than enough capital to open your own business, whatever that may be.


----------



## shanegl

Howitzer said:


> The article you quoted referred to new builds completed this year.


 
Yes but when were these started? I'm saying that the figure is going to drop in the future.


----------



## whathome

tententwenty said:


> The two articles you point to relate to Indians in America. They don't have a bearing on the quality of students coming to Ireland. And again, you refer only to India, whih is but one source of immigrant workers in Ireland.
> 
> Unless you are the Minister responsible for accepting postgraduate students to Irish courses, or have a paper released by same, you aren't in a position to comment on the overall quality of foreign students arriving in Ireland from poor countries. And in any case, we aren't talking about students here.
> 
> And to wrap it up, as it becomes less germane to the discussion, the average wage in India is 5 to 10 bucks a week. Even on minimum wage here, an Indian can go back home and live like a king after a few years working.
> 
> Even assuming what you say is true, you don't need to get a job in the civil service if you don't need to work again. And if you do feel the need to work again, you have more than enough capital to open your own business, whatever that may be.


 

There are a few posters on this thread that go on-and-on-and-on with a private mini-discussion - why don't you PM each other?


----------



## whizzbang

Howitzer said:


> Expect this loophole to be closed off in the next budget.


Any suggestions on how they would go about this?

Higher CGT for properties sold within 5 years
"investor tax" on mortgate repayments
Make investors have to prove property is being rented out, penalty if it is not.
Offer a reward for any tennant who rats out a non registered landlord.

Not sure how workable these are, any other ideas?

maybe they will just finally do the recommendations in the Bacon report?


----------



## Howitzer

whizzbang said:


> Any suggestions on how they would go about this?
> 
> Higher CGT for properties sold within 5 years
> "investor tax" on mortgate repayments
> Make investors have to prove property is being rented out, penalty if it is not.
> Offer a reward for any tennant who rats out a non registered landlord.
> 
> Not sure how workable these are, any other ideas?
> 
> maybe they will just finally do the recommendations in the Bacon report?


 
That sounds like a good idea for a new thread ......


----------



## Bedsit

whathome said:


> There are a few posters on this thread that go on-and-on-and-on with a private mini-discussion - why don't you PM each other?



True, but this discussion has a bearing on the overall market. The bottom line being that most of these Non-EU nationals will not want to go back to their countries of origin. They are here to stay and are buying houses in large numbers. However once things go pear shaped (as most of us think they will) we will have a problem on our hands.


----------



## phoenix_n

Agreed.

I believe it would have achieved that price in the silly season earlier this year. Or thereabouts anyway. The price would certainly have been regarded as expected for the particular street the property is located on. Again i am playing no credence to such a small sample of data but what it did say to me was that for this one particular property that they had currently no offers (or maybe they had) and that they were willing to negotiate (again maybe i don't know).

I would think that if a sample of 20 properties was taken around Dublin i believe we would get similar responses. But that is of course all pie in the sky until the research is actually carried out.

If you like, pick a property that you are fammilar with, email the EA and inquire whether the vendor would be willing to negotiate. You are not leading on any parties. And then perhaps this thread can change from current sentiment to actual facts as they pertain on the ground.



delboy159 said:


> Phoenix_n - is the price of 750k a new threshold for that type of house in the area or is it at the silly April/May values or is it slightly below the silly figures?
> 
> Just to put the house and the price in context?


----------



## Guest107

Actually 1 and 2 are not down, only 1 is.

Table 3

New Commencements Notices: 


Housing Commencements (2 in my last post) are static nationally . 

http://www.environ.ie/DOEI/DOEIPub....9699f58bcf810cba802571d3004014df?OpenDocument

County *6 months 2005* 6 months 2006 *% change*
TOTAL *39,804*            40,816             2*.5%*

And way up in the outer Pale out the back of Ballivor, ouch !

Kildare/Laois/Offaly/Longford


----------



## whizzbang

Howitzer said:


> That sounds like a good idea for a new thread ......



yeah its a bit OT, I'll start a new thread.


----------



## tententwenty

Bedsit said:


> True, but this discussion has a bearing on the overall market. The bottom line being that most of these Non-EU nationals will not want to go back to their countries of origin. They are here to stay and are buying houses in large numbers. However once things go pear shaped (as most of us think they will) we will have a problem on our hands.


Thats not the bottom line as I see it. In fact I see the exact opposite.


----------



## delboy159

Thanks for the feedback phoenix_n - so the 750k would have been a realistic May price - it will therefore be intertesting to see how things develop on that one...  

As I stated in a previous post I'm keeping tabs on a local commuter village development that I have a unique perspective on and I'm also keeping tabs on a house in the North of the city..  Between my few observations in the coming weeks and your input and if a handful of other people put in some realistic facts, we could start developing a bit of a genuine sentiment...


----------



## Raskolnikov

whathome said:


> Government measures to squeeze out speculation...?
> 
> RTE TV news at 1 interviewed Noel Ahern today - he said that he would be working with Dept of Finance on introducing measures to "squeeze out speculators", emphasised that property should be for genuine buyers not just people trying to profit on a growing market.
> 
> I think this is well overdue - should allow genuine first time buyers to have a better chance of buying new builds.


Absolutely incredible, talk about closing the stable door after the hourse has bolted! 

I could actually foresee such a measure instigating volatility in the property market. E.g, if the property market goes into decline, a tax is introduced on speculators which will cause them to exist the market _en masse_. Then, a flood of rental properties will come onto the market, combined with record completion levels this year. Hundreds of thousands of houses with desperate sellers, thus causing a house price crash.


----------



## tententwenty

whathome said:


> There are a few posters on this thread that go on-and-on-and-on with a private mini-discussion - why don't you PM each other?



Name of discussion: Current public sentiment towards the housing market?

Topic being discussed: The sentiment of members of the public who also happen to be foreigners, and the impact of said sentiment on the housing market.


----------



## whathome

tententwenty said:


> Name of discussion: Current public sentiment towards the housing market?
> 
> Topic being discussed: The sentiment of members of the public who also happen to be foreigners, and the impact of said sentiment on the housing market.


 
Point proven   you're at it again!


----------



## tententwenty

whathome said:


> Point proven   you're at it again!


And you're trolling.


----------



## whathome

delboy159 said:


> Thanks for the feedback phoenix_n - so the 750k would have been a realistic May price - it will therefore be intertesting to see how things develop on that one...
> 
> As I stated in a previous post I'm keeping tabs on a local commuter village development that I have a unique perspective on and I'm also keeping tabs on a house in the North of the city.. Between my few observations in the coming weeks and your input and if a handful of other people put in some realistic facts, we could start developing a bit of a genuine sentiment...


 
I noticed a second round price drop for the first time today.  4 bed semi in Raheny.  Original price 850k in May, reduced to 820k in July, reduced to 790k this week.   850 was a silly season price but a 60k drop is pretty severe IMO.


----------



## room305

Persius said:


> Honestly I think the demographics will result in static prices (on average) in nominal terms over the next 10 or so years. I do think prices will fall somewhat in less desirable areas. And I think they could still rise somewhat in prime areas.



This is pretty much my feeling on how things will go. It still makes buying a house now a spectacularly bad investment.


----------



## phoenix_n

whathome said:


> I noticed a second round price drop for the first time today. 4 bed semi in Raheny. Original price 850k in May, reduced to 820k in July, reduced to 790k this week. 850 was a silly season price but a 60k drop is pretty severe IMO.


 
7% drop in asking price. Thats the kind of figures i am getting aswell.


----------



## Guest107

punt in an offer of €730k , if the EA actually TALKS to you and engages you then its a sign that they consider a buyer at €790k is a dream. 

If the EA ignores you (and they should  ) its a sign they are confident of the €790k price and that its correctly priced.


----------



## phoenix_n

whathome said:


> I noticed a second round price drop for the first time today. 4 bed semi in Raheny. Original price 850k in May, reduced to 820k in July, reduced to 790k this week. 850 was a silly season price but a 60k drop is pretty severe IMO.


 
Suppose they entertained an offer of 750K. Thats 40K short of current asking price. Not too unreasonable.

But thats 100K less than the original asking price.


----------



## Raskolnikov

tententwenty said:


> And to wrap it up, as it becomes less germane to the discussion, the average wage in India is 5 to 10 bucks a week.


Completely ludicrous statement.


----------



## bearishbull

Too late for anti speculator laws at this stage in cycle, when the market corrects then that is the time to set up a new well regulated housing and rental market. The market will begin to correct to fundamentals at some stage and im betting its within 16 months max.


----------



## Guest107

you can bring in one aspect today, stamp duty increments of 0.1% instead of full percents.


----------



## beattie

bearishbull said:


> Too late for anti speculator laws at this stage in cycle, when the market corrects then that is the time to set up a new well regulated housing and rental market. The market will begin to correct to fundamentals at some stage and im betting its within 16 months max.


 
Will this change that the dept will introduce on the urgings of Noel Ahern (though I am dubious whether it will transpire) not cause a further weakening of sentiment among builders who fearing that there won't be as many buyers for the new apartment blocks start to price them accordingly (i.e. cheaper) thus causing a knock on effect among other property classes? 

Can any of these changes be made retrospective whereby houses which have already being built but are unoccupied be subject to the same punitive conditions to new builds?


----------



## CelloPoint

I really miss David McWilliams's commentry (www.davidmcwilliams.ie). It will be interesting to see what he has to say on return from his holidays!

I emailed him and told him about this thread - no response  I'm behaving like a teenage groupie I know!


----------



## CelloPoint

beattie said:


> Will this change that the dept will introduce on the urgings of Noel Ahern (though I am dubious whether it will transpire) not cause a further weakening of sentiment among builders who fearing that there won't be as many buyers for the new apartment blocks start to price them accordingly (i.e. cheaper) thus causing a knock on effect among other property classes?
> 
> Can any of these changes be made retrospective whereby houses which have already being built but are unoccupied be subject to the same punitive conditions to new builds?



What institute educated you, mate?


----------



## tententwenty

Raskolnikov said:


> Completely ludicrous statement.


Ah yes, you are correct, the average wage is actually €40 a week. I was thinking about the 26% of the country below the poverty line of €9 a week. Still compares very poorly to minimum wage in Ireland, however. And underscores my point that a few years in any sort of a job in Ireland could set you up for life in India, meaning they would be more likely to move home than stay here and slave in their minimum wage job, and similar for most immigrants.

Hence no effect on the housing market.

Edit: I just checked that, and as insane as it may sound, the poverty level for India in 2004 was 540 rupees a MONTH, not per week. So thats about two or three quid a week. Yikes.


----------



## Bedsit

We only have to look across the water and see how many of the people who came there in the 60s and 70s went back. Todays report clearly states that a lot of non-EU nationals have bought property over the past number of years. The problem will be that if the market falls, they might be left holding an asset which is less than what they paid for, or they may not be able to sell at all if it is in commuterland etc.




tententwenty said:


> Ah yes, you are correct, the average wage is actually €40 a week. I was thinking about the 26% of the country below the poverty line of €9 a week. Still compares very poorly to minimum wage in Ireland, however. And underscores my point that a few years in any sort of a job in Ireland could set you up for life in India, meaning they would be more likely to move home than stay here and slave in their minimum wage job, and similar for most immigrants.
> 
> Hence no effect on the housing market.


----------



## tententwenty

Bedsit said:


> We only have to look across the water and see how many of the people who came there in the 60s and 70s went back. Todays report clearly states that a lot of non-EU nationals have bought property over the past number of years.


 You mean the report released by the impartial Irish Mortgage Corporation? And it doesn't give any figures I could see in the RTE release for "a lot" of anything. If they come out with specific figures stating that 20% of new buys were from immigrants, fair enough. Right now we don't know if its 20% or 1%. I saw another similar report released by AIB and estate agents which on the one hand praises immigrants for depressing wages, and on the other hand looks forward to them entering the property market. One or the other, lads. So again, grasping at straws.


Bedsit said:


> The problem will be that if the market falls, they might be left holding an asset which is less than what they paid for, or they may not be able to sell at all if it is in commuterland etc.


The problem they will have in common with everyone else you mean?


----------



## Remix

US existing home sales fell 4.1% in July; 

House prices falling in 26 Metro areas

http://www.finfacts.com/irelandbusinessnews/publish/article_10007023.shtml 

Oh and remember - we are closer to Boston then Berlin 
(Haven't heard that boast in a while  )


----------



## miju

tententwenty said:


> Right now we don't know if its 20% or 1%.


 
i heard on newstalk this morning that it was just under 5% of the total market of FTB's , 

so take 37% of all properties sold last year (percentage of FTB's in market last year - dont know what is is now) and find 5% of that and theres your answer in cold hard numbers

anyone wana do the maths????

i imagine the answer would be negligible in comparison to the current immigration "demographics"  / numbers being bandied about , more cannon fodder IMHO


----------



## tententwenty

miju said:


> i heard on newstalk this morning that it was just under 5% of the total market of FTB's ,
> 
> so take 37% of all properties sold last year (percentage of FTB's in market last year - dont know what is is now) and find 5% of that and theres your answer in cold hard numbers
> 
> anyone wana do the maths????
> 
> i imagine the answer would be negligible in comparison to the current immigration "demographics"  / numbers being bandied about , more cannon fodder IMHO



1.85% of all properties sold last year?


----------



## Guest107

sure 5% of the workforce is medical bods in the public health system (100,000 workers out of 2m) many very well paid doctors.


----------



## Afuera

miju said:


> i heard on newstalk this morning that it was just under 5% of the total market of FTB's ,


 
RTE have it quoted as 18.5% of FTBs and it's only counting the first six months of this year. 
http://www.rte.ie/business/2006/0823/houses.html

If IMC actually released the full report to the public domain it might be more useful. Can anyone actually say what percentage of the market for the first six months was made up of FTBs?

http://www.rte.ie/business/2006/0823/houses.html


----------



## tententwenty

Afuera said:


> RTE have it quoted as 18.5% of FTBs and it's only counting the first six months of this year.
> http://www.rte.ie/business/2006/0823/houses.html
> 
> If IMC actually released the full report to the public domain it might be more useful. Can anyone actually say what percentage of the market for the first six months was made up of FTBs?



Well if its the same as last year, its 6.8% of all properties were bought by immigrants, just over one purchase in twenty. I'm not sure if the FTB ratio had dropped or increased in the first six months of this year?


----------



## Afuera

tententwenty said:


> Well if its the same as last year, its 6.8% of all properties were bought by immigrants, just over one purchase in twenty. I'm not sure if the FTB ratio had dropped or increased in the first six months of this year?


 
Somebody out there knows the FTB ratio in the market for the first six months of 2006. The fact that it's not available publicly is suspicious to say the least.

I wonder what's the order of priority for the objectives of the Irish Mortgage Council? (Who by their own estimates say their members account for over 95% of mortgage lending in Ireland.)

-the promotion of high standards of mortgage lending, 
-the development of industry views on areas of common interest, particularly in terms of regulation and legislation affecting housing and housing finance, 
-ensuring that the relevant national and European authorities are made aware of these views, 
-assisting in the development of market data, 
*-the general representation of member institutions' interests*.

EDIT: Realised that the figures being quoted today came from Irish Mortgage Corporation (a different IMC). Comment still stands if the Irish Mortage Council can achieve it's objectives of assisting in the developing of market data and provide the general representation of member instutions interests though.


----------



## Raskolnikov

RTÉ stated last night on the 9 o' clock news that 1/5 of FTB's this year were foreign born, of those . . .

36% of those FTB'ers were Asian
20% British
1/7 EU15


----------



## Guest107

Galway Flipper Not Doing Badly

Houses were [broken link removed] originally in early 2005 IIRC

Flipper wants [broken link removed] , 20% in a year.

No bad business if you get it but Loughrea in Galway is massively 'overbuilt' to my mind.


----------



## whathome

Raskolnikov said:


> RTÉ stated last night on the 9 o' clock news that 1/5 of FTB's this year were foreign born, of those . . .
> 
> 36% of those FTB'ers were Asian
> 20% British
> 1/7 EU15


 
The data for that "research" came from Irish Mortgage Corporation which is the mortgage broker associate company to Hooke and MacDonald, the new homes estate agent. These vested interests had the report timed for release to counter the Department of Environment figures showing a huge increase in home completions this year.

The IMC data represents activity predominantly in the new homes market and doesn't represent the market as a whole. They are desperately trying to come up with new reasons for FTB's to be fearful of losing out if they don't buy immediately. If you look at the press releases section on their website you will see that they have released fear reports regularly.

Foreign buyers have always been active in the Irish market - the report didn't say if the buyers were investors, speculators or owner-occupiers. As wealth grows in Asian countries, their presence will be felt in many western property markets just as Irish investors are very active in foreign markets currently.

Anyway – it’s not a new story. HOK released the same kind of report last October. If anything, it looks like the numbers of foreign buyers have dropped! "Non-nationals buy 30% of new homes" 
From October 2005 :http://www.rte.ie/business/2005/1025/Houses.html - Notice that the HOK report was timed to counter the DOE home completion numbers from last year as well!

So according to Hooke & MacDonald/IMC - this year it's down to 20%. That's if you believe any of the rubbish that these vested interests regularly dump into the media.


----------



## Guest107

So Johnny Foreigner has copped himself on and reduced his exposure to the pyramid  before our native _*" Ladderjacks "*_ ( or is that "*Ladderemoid*" ?) did .

Good for you Johnny , sensible chap, what what !


----------



## whathome

2Pack said:


> So Johnny Foreigner has copped himself on and reduced his exposure to the pyramid before our native _*" Ladderjacks "*_ ( or is that "*Ladderemoid*" ?) did .
> 
> Good for you Johnny , sensible chap, what what !


 
lol - I wonder if there is special pricing in the Irish market for Irish buyers similar to foreign markets. Except in the Irish market, the real price is for the non-nationals and a higher price for the locals


----------



## conor_mc

whathome said:


> Anyway – it’s not a new story. HOK released the same kind of report last October. If anything, it looks like the numbers of foreign buyers have dropped! "Non-nationals buy 30% of new homes"
> From October 2005 :http://www.rte.ie/business/2005/1025/Houses.html - Notice that the HOK report was timed to counter the DOE home completion numbers from last year as well!
> 
> So according to Hooke & MacDonald/IMC - this year it's down to 20%. That's if you believe any of the rubbish that these vested interests regularly dump into the media.


 
Actually, it was 30% of new homes bought by foreigners last year, but 20% of FTB's this year - different measures entirely.

Regardless, both figures are very dubious, not to mention the motives for their release.


----------



## whathome

conor_mc said:


> Actually, it was 30% of new homes bought by foreigners last year, but 20% of FTB's this year - different measures entirely.
> 
> Regardless, both figures are very dubious, not to mention the motives for their release.


 
Good spot.  It amazes me how these reports just go straight to TV and newspapers with no attempt to question or investigate.


----------



## Bedsit

*Snippets from two articles in today's Irish Times Property Section*

"The autumn sales season has begun and signs are it's going to be frenetic with estate agents reporting a higher than expected volume of houses coming on the market in most parts of Dublin. Although no one is suggesting oversupply just yet, vendors are obviously keen to get their properties out there while prices are still seen to be rising."

[broken link removed]

*Q&A*
*We need to sell quickly afterprevious sales fell through*
*We put our house on the market in February and, to cut a very stressful story short, during that time two buyers pulled out after they had paid their deposit. One couple split up and the other woman couldn't get the finance. Our new house is now ready and we must sell by the end of September. We have switched agent and feel the new one will do a better job. Is there anything we can do to make absolutely sure that this time the sale will go through?*

".... There will be a huge number of properties on the market in September so make sure yours stands out. ..."

[broken link removed]


----------



## Harrogate

Extraordinary thing about the Irish housing market compared to the one here in England is the number of new builds. The Uk's population is around 15 times as big as Ireland's yet only 125,000 new homes built every year..scarcely any more than on your side of the water.


----------



## Guest126

That may be the case but we are just soo much richer than you over there - we are one of the richest countries in the world...NOT!!!


----------



## Remix

Nice post Bedsit. I like this quote. The Irish Times (of all people!) is suggesting that nowadays even reducing your house price _below market_ will not guarantee a smooth sale.



> The way of shifting a property in double-quick time is to sell it below market value - and even then (unless the buyer fetches up on the day with bags of cash and a pen in his hand to sign contracts) things can still go horribly wrong


----------



## Raskolnikov

conor_mc said:


> Actually, it was 30% of new homes bought by foreigners last year, but 20% of FTB's this year - different measures entirely.


That doesn't necessarily mean there were more foreign buyers last year.


----------



## Harrogate

Irish and British HPs have risen in proportion to the fall in interest rates.
Prior to 1970 mortgage lending was effectively rationed which kept HPs low and Irs were always lowish as strict controls on banks and foreign exchange prevented the need for high Irs to cool the economy.
After 1970 IRs were very volatile and all booms until this one were curtailed by steeply rising IRs.....
I have been a regular contributor to house price crash for 2 years.

http://www.housepricecrash.co.uk/forum/index.php?showforum=22


----------



## conor_mc

Raskolnikov said:


> That doesn't necessarily mean there were more foreign buyers last year.


 
Absolutely - I was only pointing out to OP that 20% of apples is not necessarily less than 30% of oranges...


----------



## Afuera

Raskolnikov said:


> That doesn't necessarily mean there were more foreign buyers last year.


 
Since these figures are incomplete and provide no real context from where they come they are worth nothing to someone trying to analyze the market.


----------



## whathome

Afuera said:


> Since these figures are incomplete and provide no real context from where they come they are worth nothing to someone trying to analyze the market.


 
Exactly - it's just vested interest drivel IMHO.


----------



## conor_mc

AIB cashing in a few more chips....

http://www.rte.ie/business/2006/0824/AIB.html


----------



## cjh

*Minister vows to curb property speculator greed*


http://www.unison.ie/irish_independe...issue_id=14540

More from Monister Ahern in today's Indo on speculators and 100% mortgages.


----------



## askalot

cjh said:


> *Minister vows to curb property speculator greed*
> 
> More from Monister Ahern in today's Indo on speculators and 100% mortgages.



Based on the past performance* of this government (little action but lots of talk and spin) they must fear that the crash will, rather inconveniently, arrive this side of the election and are busy putting on the fig leaves.


*Past performance is no guarantee of future performance, except in the case of the government.


----------



## cjh

*Past performance is no guarantee of future performance, except in the case of the government.[/quote]

 Excellent.


----------



## Raskolnikov

Could the tragi-comedy of the Irish property market get anymore ridiculous? Enforcing a reduction of mortgage lending terms combined with increasing rates/housing stock and possible taxes on speculators will only copperfasten the likelyhood of a crash.


----------



## Guest107

*Loan Terms*

Frankly the banks will bring in 40 year and multi generational mortgage if allowed and probably multi generation 'neg ams' too. 

The government should bar all these products, terms capped and  Neg-Ams of any sort, by statute.

The longest mortgage term should not exceed 30 years IO or 25 Year repayment and 100% should mean not a penny more .

The taxpayer will be asked to wipe the banks arses for them anyway when it all goes pear shaped


----------



## Calina

Duh. 

The mortgage lending terms should never have been loosened in the first place, and the loosening thereof caused the market to go irrational in the first place. This needs to be sorted out.

Interest rates have been at a historic low. Assuming they'd stay that way is naive. 

Speculators should be taxed. They are not adding the economic wellbeing of the country. 

Property in Ireland is not priced rationally according to basic fundamentals such as ROI for investors, equivalent rentals or salaries. Like it or not, there will be a correction at some stage, just the longer we wait for it, the bigger its impact will be. 

Your post sounds more like "don't upset the applecart and we'll worry about the future later".


----------



## room305

askalot said:


> Based on the past performance* of this government (little action but lots of talk and spin) they must fear that the crash will, rather inconveniently, arrive this side of the election and are busy putting on the fig leaves.



They know that a crash arriving this side of the election would do them in. They wouldn't have a hope of getting elected. In fact I would go as far as to say, they must think that a crash definitely will _not_ arrive this side of the election.

If Ahern thought a crash was imminent he would surely not be stupid enough to do something that would likely precipitate it (i.e. a flood of speculative houses being dumped en masse on the market) and kill his political career.

That said, knowing the form of Noel Ahern, anything is possible.


----------



## CelloPoint

It would take one monumental act of cute-hoorism to keep the property tsunami from hitting land prior to the next election. I think we're at the beginning of break-water stage.


----------



## room305

CelloPoint said:


> It would take one monumental act of cute-hoorism to keep the property tsunami from hitting land prior to the next election. I think we're at the beginning of break-water stage.



Well the guys in charge are past masters at that. Should be an interesting budget.


----------



## Guest107

*FF will go early*

I can promise ye now that if the wind starts to hiss loudly  out of the market in September then FF will call an election as quickly as possible (October) before it goes tits up altogether.


----------



## phoenix_n

Bedsit said:


> *Snippets from two articles in today's Irish Times Property Section*
> 
> "The autumn sales season has begun and signs are it's going to be frenetic with estate agents reporting a higher than expected volume of houses coming on the market in most parts of Dublin. Although no one is suggesting oversupply just yet, vendors are obviously keen to get their properties out there while prices are still seen to be rising."
> 
> [broken link removed]
> 
> *Q&A*
> *We need to sell quickly afterprevious sales fell through*
> *We put our house on the market in February and, to cut a very stressful story short, during that time two buyers pulled out after they had paid their deposit. One couple split up and the other woman couldn't get the finance. Our new house is now ready and we must sell by the end of September. We have switched agent and feel the new one will do a better job. Is there anything we can do to make absolutely sure that this time the sale will go through?*
> 
> ".... There will be a huge number of properties on the market in September so make sure yours stands out. ..."
> 
> [broken link removed]


 
Its interesting that both articles refer to an increased supply this Autumn. That by iteself will mean demand will be satisfied more which should mean lower prices. Couple that with nervous buyers and you've got a stalled market.


----------



## tententwenty

Looks like the government is [broken link removed]...

_The Government will today publish plans to introduce unprecedented fines and even jail terms for traders engaging in unscrupulous practices, in the first major piece of new consumer law for 30 years._

_Minister for Enterprise Micheál Martin will give details this morning of the Consumer Protection Bill, which is expected to specify over 30 trading practices which are to be outlawed._

_These include making false claims about goods or services offered for sale, including property._

So no more shadow bidders and "near to prime area" misleading adverts.


----------



## bearishbull

The fact is prices will slow to the rate of inflation at most sometime in next 16 months. When this occurs (even the banks say it will occur in 2007) it remains to be seen if the market stagnates and grows at 2or 3% per annum (a fall in real terms) or enters zero or negative nominal growth. I personally feel the market will slow to 2% growth sometime in next 12 months and grow at that rate for a year or two and only then with bumper supply continuing will large numbers of investors sell and drive market much lower, this will probably coincide with a slowdown and this slowdown will in turn be made worse by a falling property market, expect a recession within 5 years.


----------



## bearishbull

phoenix_n said:


> Its interesting that both articles refer to an increased supply this Autumn. That by iteself will mean demand will be satisfied more which should mean lower prices. Couple that with nervous buyers and you've got a stalled market.


In a rational market yes but as soon as the supply is increased "investors" are snapping them up despite static rents etc, speculative demand exists to meet any excess supply from people who want to actually live in their purchase. They will get their just desserts soon enough.


----------



## whizzbang

Harrogate said:


> Extraordinary thing about the Irish housing market compared to the one here in England is the number of new builds. The Uk's population is around 15 times as big as Ireland's yet only 125,000 new homes built every year..scarcely any more than on your side of the water.



We all live in four houses each... its a long story.


----------



## whathome

bearishbull said:


> The fact is prices will slow to the rate of inflation at most sometime in next 16 months.


 
The property market turned lower quite quickly in 2001 even before 9/11 (allowing for time lag in ESRI data). I see things moving in a very similar pattern this year, when the data catches up over the next month or two, we'll see a rapid change. Not prices falling through the floor but definitely drops showing up in the ESRI/PTSB index before the end of this year.

Some people think it takes a long time for a property market to stall and turn but it can happen quite quickly as the following data from 2001 shows: 

*ESRI/PTSB National House Prices*
Dec-00 174,071
Jan-01 175,939
Feb-01 176,717
Mar-01 178,974 
Apr-01 181,075 
May-01 181,853 
Jun-01 182,475 
Jul-01 184,265 
Aug-01 185,899 
Sep-01 185,562 (turning point)
Oct-01 184,032 
Nov-01 183,253 
Dec-01 181,697 
Jan-02 180,141 
Feb-02 181,386


----------



## room305

whathome said:


> The property market turned lower quite quickly in 2001 even before 9/11 (allowing for time lag in ESRI data). I see things moving in a very similar pattern this year, when the data catches up over the next month or two, we'll see a rapid change. Not prices falling through the floor but definitely drops showing up in the ESRI/PTSB index before the end of this year.
> 
> Some people think it takes a long time for a property market to stall and turn but it can happen quite quickly as the following data from 2001 shows:
> 
> *ESRI/PTSB National House Prices*
> Dec-00 174,071
> Jan-01 175,939
> Feb-01 176,717
> Mar-01 178,974
> Apr-01 181,075
> May-01 181,853
> Jun-01 182,475
> Jul-01 184,265
> Aug-01 185,899
> Sep-01 185,562 (turning point)
> Oct-01 184,032
> Nov-01 183,253
> Dec-01 181,697
> Jan-02 180,141
> Feb-02 181,386



Very interesting. I know economic growth was slowing around then as well, so it is something to be aware of given some of the incoming information on the US economy. I'd be surprised if we saw price drops showing up in the ESRI/PTSB index before next summer but I wouldn't rule it out completely.

I'm sure Hooke & McDonald have a press release already drafted - "Soft landing is in. Shows the sound fundamentals of the market. Great time to buy."


----------



## Bedsit

whathome said:


> The property market turned lower quite quickly in 2001 even before 9/11 (allowing for time lag in ESRI data). I see things moving in a very similar pattern this year, when the data catches up over the next month or two, we'll see a rapid change.




I wonder if the slew of bad news coming out of other markets (US, Aus etc.) will further quicken the change of sentiment in Ireland


----------



## whathome

room305 said:


> I'm sure Hooke & McDonald have a press release already drafted - "Soft landing is in. Shows the sound fundamentals of the market. Great time to buy."


 
Yep - and then next August:

"Our research shows that household pets now make up 32.7% of first time buyer numbers"


----------



## tententwenty

Bedsit said:


> I wonder if the slew of bad news coming out of other markets (US, Aus etc.) will further quicken the change of sentiment in the Ireland


Sure Ireland is different.


----------



## Guest107

We are "special" Keano , neither logic nor gravity is applicable to us.

Here is the new Dodgy Estate Agents Bill 

http://www.entemp.ie/publications/commerce/2006/NCAUCPDBILL18Aug06.pdf

The first half is all a new agency being created, page 54 onwards is the new law

EAs (and the Irish Times property pages) will be criminals if this goes thru as we can see .

unfair commercial practises which could 

"materially distort economic behaviour" 

"making exaggerated statements"

"misleading action if it contains false information"

"omit material the average customer needs" (like 'needs some work' means 'no roof' in reality )

"refusing to show the advertised item"

"using editorial content"

It goes on and on and on, the FFers who are EAs or who are involved in the EA /cute hoor gene pool will want to sting up Mic heál Martin for this of course and the Irish Times will be on their side...just you see what the Times does tomorrow and Saturday


----------



## phoenix_n

whathome said:


> I see things moving in a very similar pattern this year, when the data catches up over the next month or two, we'll see a rapid change. Not prices falling through the floor but definitely drops showing up in the ESRI/PTSB index before the end of this year.


 
Any guesses on what that figure will be. I gonna say 0.1% growth.


----------



## Guest107

anything below inflatoin is negative REAL growth. We are there already.


----------



## phoenix_n

2Pack said:


> anything below inflatoin is negative REAL growth. We are there already.


 
The growth rate earlier this year will offset any negative growth for the remainder of the year. Next year should be negative in real terms though.


----------



## anseo

Here's an article to cheer everyone up:

US Recession will be nasty and deep  From MarketWatch

Housing is in free fall, pulling the economy down with it, says Nouriel Roubini, president of Roubini Global Economics.


----------



## Guest107

phoenix_n said:


> The growth rate earlier this year will offset any negative growth for the remainder of the year. Next year should be negative in real terms though.



 I mean month to month in 2006 (not the annual rolling average) and I never heard of Roubini


----------



## Raskolnikov

2Pack said:


> anything below inflatoin is negative REAL growth. We are there already.


Have you figures for this?


----------



## Guest107

Published Figures , Nope. 

The PRTB and The CSO cannot be matched because we do not know when the deal was done. Assume the most recent (settled in June) PRTB figures refer to March/April Deals  at the top of the froth. 

[broken link removed]

The CSO figures are more up to date.

[broken link removed]

I'll wager that CPI  inflation runs at* 0.4% a month* in the economy now but that   house prices are no longer rising at a rate over 0.4% a month, now in August that is .

Stats to prove this will not be released until November so try me then


----------



## Raskolnikov

2Pack said:


> Published Figures , Nope.


I'm not completely disagreeing with you, but when I see posts like this, I'm not yet convinced that the fury of the Irish Property Pyramid scheme is spent yet.


----------



## Guest107

Raskolnikov said:


> I'm not yet convinced that the fury of the Irish Property Pyramid scheme is spent yet.



I do expect a few dead cat bounces of course. You know that a builder of a small scheme with no sales often offloads a house/flat on each of his subbies to pay their bills. I could point you at a specimen estate  from 2001 during the last schlumpette where the houses were already built and not shifting at all...so thats how they were removed from the market and presented as 'sold' . 

Once the builder sold his a veritable profusion of EA signs appeared in front of the others. 

Daft kindly told us of a real time drop in ASKING prices _in each of May June and July on the previous month_ so I will call March and April 2006 as the peak of the lunacy. 

[broken link removed] 

But no  , its not over yet.


----------



## gearoidmm

[broken link removed]

This one-bed in St Annes in Milltown (500sq ft) has been on the market for a couple of months for 510,000

[broken link removed]

This is a similar one-bed also on the market for a couple of months for 515,000.  It's about 515sq ft

[broken link removed]

This one-bed also in St Annes (732sq ft) has just been put on the market for 535,000.  200sq feet more in the same development for only 20,000 extra.  If I owned any of the first two apartments I'd be hunting down that vendor with murder in mind.  Fairly devalues the first two, wouldn't you think


----------



## whathome

Raskolnikov said:


> I'm not yet convinced that the fury of the Irish Property Pyramid scheme is spent yet.


 
New builds seem to be holding up alright - well apart from Adamstown.  They're still struggling to sell phase 1 and have dropped the price of their one bed apartments.

They may have been overpriced to begin with - I couldn't understand why people were attracted to Adamstown when second hand houses in nearby Lucan were more desirable - lower density, bigger gardens...and better value even when you include stamp duty.  What is it about new builds that get people so excited?


----------



## Howitzer

whathome said:


> What is it about new builds that get people so excited?


 
Cuff links and champagne. Haven't you seen the brochures?


----------



## thewatcher

whathome said:


> New builds seem to be holding up alright - well apart from Adamstown. They're still struggling to sell phase 1 and have dropped the price of their one bed apartments.
> 
> They may have been overpriced to begin with - I couldn't understand why people were attracted to Adamstown when second hand houses in nearby Lucan were more desirable - lower density, bigger gardens...and better value even when you include stamp duty. What is it about new builds that get people so excited?


 
The same thing puzzles me greatly,why do the irish queue overnight to buy in crappy build estates with no services and poor build quality when beautiful,well build cheaper secondhand houses are readily available in better locations,it's just crazy.

It must be something to to with having to have things new, i saw a prime example of this in drogheda where new houses were going for 750,000 in an estate on the edge of town,you could have got a much better secondhand house and have change in your back pocket and yet people were supposedly mad to buy them !


----------



## whathome

Howitzer said:


> Cuff links and champagne.


 
Handcuffs and water are more probable when reality sets in


----------



## TallSpoon

whathome said:


> What is it about new builds that get people so excited?



No stamp duty!


----------



## thewatcher

TallSpoon said:


> No stamp duty!


 
I know it irks people to have to pay stamp duty,but even with the stamp duty included you would still come out better off.Anyway most houses are priced compared to other similar properties in an area,so in effect people are paying the stamp duty to the builder on a new build rather than the government.
It's a disgrace that builders get this preferencial treatment, more of the govenments sop to their property developer mates.Either have stampduty on owner occupiers or don't but to have it payable on only one side of the market is a disgrace.


----------



## whizzbang

Howitzer said:


> Cuff links and champagne. Haven't you seen the brochures?


artichokes and car door handles? 

I hate that hoarding...


----------



## tententwenty

Ah I don't know if that bill will go through as it is...



2Pack said:


> "making exaggerated statements"



I mean there goes the entire advertising and marketing industry.


----------



## SidTheDweeb

I suppose the no stamp duty on new builds was to promote new builds. More profit for the builder, more attractive proposition to build. If the crash does come, could it be blamed?


----------



## thewatcher

For what ?


----------



## liteweight

New builds attract people for a number of reasons. The first, I think is that there is no stamp duty for FTB (usually) and for owner occupiers if property is under 125 sq.mt. Even if the size does not meet this criteria, stamp duty on a new property is charged on the purchase price, less VAT, so it is a smaller amount due in comparison to an older property.

Undoubtedly, the 'bells and whistles' in a new apartment attract certain people. A number of agents have told me now that this has become extremely important in the last few years. Apartments built in the 70s and 80s are difficult to sell, even though lots of them are twice the size of a modern one. The reason given  is that their facades are not nice!

Another factor is the timescale. Only a deposit is paid on a new build and this means that a FTB has time to save, either to have less of a mortgage or to furnish. An investor bides his/her time and doesn't mind how long it takes to build. The investment is appreciating long before he/she has to start paying interest.


----------



## Harrogate

All over the Uk builders are churning out 2 bedroomed new-build hotel-style flats you couldn't swing a cat in , often in grim inner-city areas and trying to sell them for as much as semi-detached places in nice suburbs!
They have expensive kitchens and bathrooms and are in a block of similarly-appointed flats so are £125k (about 165k Euros) more expensive than ordinary flats in 70s blocks or flats converted from houses.
Even if the rest of market stagnates these will lose almost half their value.
Calling them executive flats is laughable as all the executives I know would rather live in large houses in leafy suburbs! 
and young professionals who can afford £200k for a place prefer established, trendy (oxymoron unintended!) areas.where there are more amenities....and which are no dearer.
eg Didsbury and Chorlton in Manchester or Chapel Allerton and Headingley in Leeds.... as opposed to the city centre wastelands..........
Is the same thing being borne out in Irish cities??????


----------



## macbri

Some interesting statistics on projected housing starts for 2006 for following  countries.I'm not 100% sure on UK figure(using earlier post from someone on here,please correct if I'm wrong)

           Country    Housing starts                     Population
             US              1,050,000                         300M
             UK              125,000                            58M
           Australia        145,000                            21m
           Ireland           100,000                             4.2m

Can anyone not see that Ireland is building houses at 400-700% the rate of countries above-surely this alone will lead to a crash or am I missing something?

Countries above have all high migration programmes and US/Australia operate substanial skilled migration programmes which does have a meterial impact on housing market.


----------



## Guest107

*UK vs Ireland*

The key difference between say London and Dublin is that London has a good (if wheezing) public transport system where Dublin is utterly car reliant.

Therefore many of the 'executive' shoeboxes (aka starter homes aka get on the 'ladder' homes) are in a field in commuter land and not in the inner cities or near where the work is.

Oh! and we have no green belts.


----------



## phoenix_n

macbri said:


> Can anyone not see that Ireland is building houses at 400-700% the rate of countries above-surely this alone will lead to a crash or am I missing something?


 
The best method to gauge supply is to look at the rental market. In Castlenock there are 59 places to rent. If i limit it to 2 beds, 1200 max i have noticed that the price of these is now falling to 1100 which indicates strong competition.

http://www.daft.ie/searchrental.daf...rch+%BB&more=&tab=1&s%5Bsearch_type%5D=rental


----------



## CelloPoint

Raskolnikov said:


> I'm not completely disagreeing with you, but when I see posts like this, I'm not yet convinced that the fury of the Irish Property Pyramid scheme is spent yet.



Or this?

Couldn't believe a single income family (bread-winner on 35k) getting themselves into this mess. God only knows where they got the idea of 'investing' in Irish property from.


----------



## Raskolnikov

*Re: UK vs Ireland*



2Pack said:


> Dublin is utterly car reliant.


Oh come on now.


----------



## redo

Evidence of rising supply levels

Lucan.
25 properties over 500K
140 properties under 500k

I also saw a house in Malahide (Gainbrough) drop its asking price from 750k to 725k.


.....couldn't happen here though, our market is based on solid fundamentals.


----------



## Remix

Just noticed a house in Rathfarnham has dropped in price from 635k to 550k.

Must be getting desperate to shift it before even more inventory gets dumped on the market in September.


----------



## Remix

Raskolnikov said:


> Could the tragi-comedy of the Irish property market get anymore ridiculous? .


 

Well, we've had the comedy: endless property hype,panic bidding as if no more houses were being build, silly prices for dog-box houses, dublin more expensive than london etc. 

The tragic part of this amateur drama is in the next act - due shortly


----------



## bearishbull

Why would people reduce asking prices by so much just before the supposed autumn selling season???? If i was confidient i'd wait till the autumn season starts to reduce asking prices.


----------



## room305

bearishbull said:


> Why would people reduce asking prices by so much just before the supposed autumn selling season???? If i was confidient i'd wait till the autumn season starts to reduce asking prices.



Well don't rule out personal circumstances forced upon the seller - may have overextended themselves etc. Yeah, I'm surprised people are dropping prices now. Surely you would only drop when selling season didn't bring any bids to the table.


----------



## phoenix_n

bearishbull said:


> Why would people reduce asking prices by so much just before the supposed autumn selling season???? If i was confidient i'd wait till the autumn season starts to reduce asking prices.


 
Perhaps they are not confident. And you must bear in mind that many vendors can 'afford' to drop their prices and still realise a substantial profit. Better to get that 300K in the bank now than to be stuck with a highly illiquid asset.


----------



## hmmm

bearishbull said:


> Why would people reduce asking prices by so much just before the supposed autumn selling season???? If i was confidient i'd wait till the autumn season starts to reduce asking prices.



You said it - "supposed". If this Autumn miracle which will see buyers flood back into the market at 1am on the 1st of September doesn't materialise, I don't see much in the way of sentiment propping up this market.


----------



## conor_mc

phoenix_n said:


> Perhaps they are not confident. And you must bear in mind that many vendors can 'afford' to drop their prices and still realise a substantial profit. Better to get that 300K in the bank now than to be stuck with a highly illiquid asset.


 
If true, that would indicate a massive change in sentiment to me. The property bulls of the last 5-10 years turning bearish and cashing in?


----------



## Guest107

also remember that a €635k asking with the intent to sell at €600k may attract no interest because people see the asking price _as a sort of minimum_ ....given the history of the Dublin housing market in this decade.

a €550k asking price may get a *lot* of interest in the property and start a bidding war that drives the price up to €600k

so you are no worse off as a seller are you


----------



## phoenix_n

conor_mc said:


> If true, that would indicate a massive change in sentiment to me. The property bulls of the last 5-10 years turning bearish and cashing in?


 
You have no know when to buy, but more importantly when to sell.


----------



## Zarathustra

Long time lurker, first time posting. Intrigued by this thread. 

I've noticed a reduced asking price in Dun Laoghaire. 

In May, this house was being auctioned with a guide of 1.75M; see the Irish Times' article: [broken link removed]

It's now for private treaty sale at 1.595M: [broken link removed]

That's almost a 9% reduction.


----------



## whathome

Zarathustra said:


> Long time lurker, first time posting. Intrigued by this thread.
> 
> I've noticed a reduced asking price in Dun Laoghaire.
> 
> In May, this house was being auctioned with a guide of 1.75M; see the Irish Times' article: [broken link removed]
> 
> It's now for private treaty sale at 1.595M: [broken link removed]
> 
> That's almost a 9% reduction.


 
That's a very big drop - so it's now advertised well below the original AMV....and AMV's are usually way below the price that a vendor expects.


----------



## phoenix_n

whathome said:


> That's a very big drop - so it's now advertised well below the original AMV....and AMV's are usually way below the price that a vendor expects.


 
And the vendor had to service the debt during the summer aswell.


----------



## wolfie

Just checked daft again in Athlone 137 houses for sale. I know at least 40 of those are investor owned.Quite a few blocks of houses together i.e nos 137,138,139 for sale at once some houses for sale in pairs on same streets.Havent noticed this amount of investor type properties being dumped like this before.Surprising as there is a large student population in athlone and renting out these types of houses is usually quite easy.Also checked other auctioneers sites in athlone that dont use daft and there are another 30 similar properties for sale.


----------



## Guest107

lots and lots  of Willow park in Athlone for sale (studentland) maybe they built a load of section 50 apartments there ???

eg €170k each and two up for disposal (same windows , nudge nudge) .

but the build quality out there is chronic .


----------



## Harrogate

macbri said:


> Some interesting statistics on projected housing starts for 2006 for following countries.I'm not 100% sure on UK figure(using earlier post from someone on here,please correct if I'm wrong)
> 
> Country Housing starts Population
> US 1,050,000 300M
> UK 125,000 58M
> Australia 145,000 21m
> Ireland 100,000 4.2m
> 
> Can anyone not see that Ireland is building houses at 400-700% the rate of countries above-surely this alone will lead to a crash or am I missing something?
> 
> Countries above have all high migration programmes and US/Australia operate substanial skilled migration programmes which does have a meterial impact on housing market.


 
yes, I can confirm these figures ......
Translate to
Us ..................300 people per new house built
UK...................386  ''    
Australia...........144  ''
Ireland..............42   

So taking the 2 extremes Ireland's housebuilding rate is over 9 times greater than the UK's which has been restricted in the last 30 years by tight planning laws.


----------



## wolfie

They built some section 50. Most of these houses for sale were built in the eighties and ninties and you would expect thatthe yield from rent would be good.They would have been investor owned for quite a while  ie "smart money"  and it looks like these guys know that the market peak is close.


----------



## Bedsit

*Home for Sale, by Anxious Owner (NY Times)*

"In California, the Northeast, South Florida and parts of the Southwest, deal sweeteners like these are playing an increasingly important role in supporting home prices. From large national home builders to individual homeowners, many sellers are offering thousands of dollars in perks, including straight cash, so they do not have to slice deeply into asking prices."

http://www.nytimes.com/2006/08/25/b...6508424-LfH61VhncZqpw8i7oK9TiQ&pagewanted=all

I wonder what type of sweetners will be on offer in Ireland in the next few months.


----------



## redo

Bedsit said:


> I wonder what type of sweetners will be on offer in Ireland in the next few months.


Blinds and Barna sheds


----------



## Guest107

Harrogate said:


> So taking the 2 extremes Ireland's housebuilding rate is over 9 times greater than the UK's which has been restricted in the last 30 years by tight planning laws.


 
You are absolutely correct my dear fellow but none of these international comparisons apply (or mean anything) to the average Irish Property Professional or _Bull_ . 

They will tell you that we are 'different' and that we are 'special' , you lot don't have the 'property ladder' experience like _we_ do and are deprived of a very important formative experience . 

Our Primary Home Ownership is approx the same as yours over there, stats from 

http://www.cso.ie/

Our ratio of housing units per capita is exactly the same as yours too, 426 units per 1000 persons in 2005 IIRC 

I did post it earlier this week in this thread somewhere.

But we'll see just how bloody different we are in about 1 year flat


----------



## wolfie

Just noticed that athlone houses for sale on daft has jumped from 137 to 150 in one hour. Sherry fitzgerald have added their houses for the first time .Must be having trouble selling them from the shop window!!


----------



## CelloPoint

wolfie said:


> Just noticed that athlone houses for sale on daft has jumped from 137 to 150 in one hour. Sherry fitzgerald have added their houses for the first time .Must be having trouble selling them from the shop window!!



We've had the daft debate already. You can't make conclusions based on daft stats (especially with your tiny sample size over a one hour snapshot).

Also, I'd be very surprised if the statistic: "number of houses currently for sale in Ireland" was *not* managed so as to give the impression of a stable market.


----------



## phoenix_n

CelloPoint said:


> Also, I'd be very surprised if the statistic: "number of houses currently for sale in Ireland" was *not* managed so as to give the impression of a stable market.


 
CelloPoint....you should stop smoking the wacky tobacky...!


----------



## wolfie

Observations not conclusions!!! Thats the highest daft figure for athlone for months


----------



## gearoidmm

CelloPoint said:


> We've had the daft debate already. You can't make conclusions based on daft stats (especially with your tiny sample size over a one hour snapshot).
> 
> Also, I'd be very surprised if the statistic: "number of houses currently for sale in Ireland" was *not* managed so as to give the impression of a stable market.



I agree generally but if you think that they are massaging the figures to give the impressioin of a stable market, they are doing a bad job - the number of properties on sale has increased from 14000 in late early July to over 17000 now.

Agree that they should be taken with a pinch of salt, though


----------



## colc1

I was talking to a guy from Mitchelstown in Cork last weekend and he was telling me there is an estate there, where they just cant sell the houses!

Has anyone else heard anything similar about other areas recently?  And one fifth of first time buyers are foreigners, the minute things dont look so good they'll surely be gone!


----------



## thewatcher

CelloPoint said:


> We've had the daft debate already. You can't make conclusions based on daft stats (especially with your tiny sample size over a one hour snapshot).
> 
> Also, I'd be very surprised if the statistic: "number of houses currently for sale in Ireland" was *not* managed so as to give the impression of a stable market.


 
http://www.askaboutmoney.com//showthread.php?t=35102

I attempted to start a seperate thread on inventory,but it was locked down.Needless to say we won't take up this thread with the daft debate again but 4000 houses in 7 weeks cannot be explained away easily to me !.


----------



## phoenix_n

More news on the property crisis from down under

 Boom and bust on the home front


----------



## wolfie

Also daft dont have all houses for sale .There are a lot of estate agents in each area who dont use daft or dont show full inventory!


----------



## tententwenty

colc1 said:


> And one fifth of first time buyers are foreigners


If you believe that, you might be interested in some property I have for sale, a very nice bridge...


----------



## Jeanne

I posted previously about a house for sale near me (Churchtown/Dundrum) since May asking price all summer was 685,000. 
Now reduced to 650,000 (can't find the link just at the mo)

Anyway - that's 35,000 drop in a popular area.

And I thought September would see a flood of property buyers to the market?

Flood of houses to the market more like - with not so many buyers perhaps? I know of 2 other houses coming onto the market for sale in the next few weeks in this area.

No doubt about it, sentiment has changed since earlier this summer.


----------



## whathome

Jeanne said:


> No doubt about it, sentiment has changed since earlier this summer.


 
I think you're correct - sentiment really has changed considerably IMO.
I've seen a lot of evidence of falling asking prices in Dundrum, the most severe is a 20% drop  

Original Listing €1,200,00 


New Listing €950,000 -* Reduced by €250,000 (20.8%)*
[broken link removed]=


----------



## liteweight

I think a lot of people may have been impressed by the statistics bandied about in Spring with regard to price increases up to 12%!! When they came to sell they upped their price, by this and more, and have subsequently been given a rude awakening!

Statistics in this area are always skewed IMO. For example a house in my area sold for 2.43M which was over 1M beyond it's AMV (AMV was right IMO). This and others like it, has to affect the statistical analysis with regard to Dublin prices! Nevertheless, it is almost guaranteed that the houses surrounding the one above, if selling, will put them on the market at this price. They WILL NOT SELL. This was an anomaly.

Whathome, if prices decrease dramatically, who do you think will win out...the FTB or the Investor waiting to snap up a bargain? What do you imagine will happen to prices close to the city if everyone holds off on buying in the satellite towns? BTW thought you had dipped out of this thread? Addiction too strong?


----------



## whathome

liteweight said:


> Whathome, if prices decrease dramatically, who do you think will win out...the FTB or the Investor waiting to snap up a bargain? What do you imagine will happen to prices close to the city if everyone holds off on buying in the satellite towns? BTW thought you had dipped out of this thread? Addiction too strong?


 
I don't see it in terms of winners and losers.

I always drop by here when looking at myhome - we thought our selling/buying saga had ended but it has dragged on .... again.  Another buyer backed out, probably reading this thread!


----------



## liteweight

whathome said:


> I don't see it in terms of winners and losers.
> 
> I always drop by here when looking at myhome - we thought our selling/buying saga had ended but it has dragged on .... again.  Another buyer backed out,



 Sorry to hear that, hold the head and the nerve till September if you can!



			
				whathome said:
			
		

> probably reading this thread!




Probably are!!! Did yer Mammy never tell ye what side yer supposed to be on when yer selling?


----------



## whathome

Inventory Rising. Properties usually sell off slowly during the summer rather than build up - this summer is very unusual - and the new season property hasn't even hit the market yet. There are nearly twice the number of homes for sale in Lucan now than there were April this year. Not picking on Lucan for any particular reason - it's a fine area with plenty of nice houses IMO.

Myhome had *86 *homes for sale in Lucan on 19th April 2006:


Today Myhome has *164 *homes for sale in Lucan*:*
[broken link removed]

(Search has to be split, there are so many that they exceed the myhome search limit of 150).


----------



## liteweight

I wouldn't panic yet. Are you sure you're comparing like with like? Both HOK and Sherry Fitzgerald have joined MyHome in the recent past. I'm sure the site's takeover by the Irish Times will cause a few more to follow suit.


----------



## whathome

liteweight said:


> I wouldn't panic yet. Are you sure you're comparing like with like? Both HOK and Sherry Fitzgerald have joined MyHome in the recent past. I'm sure the site's takeover by the Irish Times will cause a few more to follow suit.


 
It is definitely like with like. You're wrong about HOK and Sherry Fitz, they've been with MyHome since it was established in 2001.


----------



## liteweight

whathome said:


> It is definitely like with like. You're wrong about HOK and Sherry Fitz, they've been with MyHome since it was established in 2001.



I could be, I got the info from this thread!!!

I knew Hooke &McDonald were on it but I didn't think HOK Residential advertised there. Are you sure Sherry Fitzgerald Back of Balivor etc. weren't on it but main Dublin branch was not? Just want to clarify, wouldn't want to spread wrong info.


----------



## whathome

liteweight said:


> I could be, I got the info from this thread!!!
> 
> I knew Hooke &McDonald were on it but I didn't think HOK Residential advertised there. Are you sure Sherry Fitzgerald Back of Balivor etc. weren't on it but main Dublin branch was not? Just want to clarify, wouldn't want to spread wrong info.


 
I think you might be confusing MyHome with Daft. All the of the players have been on MyHome for years. SherryFitz, Gunne and DNG set up myhome originally with AIB. HOK used it from day 1 also.

A doubling of inventory is very significant...points to a weaker market moving forward IMO.

164 up from 86 in four months is a huge jump in the number of homes for sale in one area. And it's not just Lucan, it's happening in most areas of Dublin.


----------



## liteweight

I stand corrected.

A doubling of inventory is troubling I agree. I wonder why people don't bide their time in an area that has a lot up for sale. I appreciate that some have to move quickly. Then again, there's a lot I don't understand like why do some people on this thread put down their own area...it's like shooting yourself in the foot!


----------



## CelloPoint

Anyone read Kathy Sheridan's article "Suburbs Full of Empty Promise" in today's Irish Times (features section)?

Brilliant article. A real insight into the miserable lives of commuters in Co. Meath and planning corruption.

I don't have a membership to ireland.com, but perhaps someone who does would be kind enough to copy and paste it to AAM?

Here's the link for members:
[broken link removed]


----------



## CCOVICH

CelloPoint said:


> I don't have a membership to ireland.com, but perhaps someone who does would be kind enough to copy and paste it to AAM?[broken link removed]



Don't-see the Posting Guidelines


----------



## Jeanne

whathome said:


> I think you're correct - sentiment really has changed considerably IMO.
> I've seen a lot of evidence of falling asking prices in Dundrum, the most severe is a 20% drop
> 
> Original Listing €1,200,00
> 
> 
> New Listing €950,000 -* Reduced by €250,000 (20.8%)*
> [broken link removed]


 
 Actually I'm more stunned by the original asking price than the substantially reduced asking price. Were they (EA) for real?? Just goes to show how ludicrous the property market had gone.
Insane is the only word for it.


----------



## liteweight

I went to see these last year...beautiful apartments without a doubt. 1250 sq.ft...doubtful! 1.2M...get a grip!


----------



## gearoidmm

Jeanne said:


> Actually I'm more stunned by the original asking price than the substantially reduced asking price. Were they (EA) for real?? Just goes to show how ludicrous the property market had gone.
> Insane is the only word for it.



Agreed - similar price drop in our development - 1.2 million to 995,000.  Again, though, the original price was outrageous


----------



## SLAPPY

Here's a good article on the bursting of the U.S. bubble and how everyone is starting to realize how silly their logic was towards property investment. 

http://money.cnn.com/2006/08/24/real_estate/pluggedin_tully.fortune/index.htm


----------



## Jeanne

whathome said:


> I don't see it in terms of winners and losers.
> 
> I always drop by here when looking at myhome - we thought our selling/buying saga had ended but it has dragged on .... again. Another buyer backed out, probably reading this thread!


 
Hey whathome - just want to wish you well with the sale.

We're on the same side in this debate but contrary to what some folks might think of the 'bears' on this thread, I don't like to see anyone having a stressful time either selling or buying. And I even include those who tried to make a fast buck out of the property market and believed all the EA-bank-govt-media hype  

Hang in there, keep the faith. I predict you will sell within the next few weeks. Call it a woman's intuition.


----------



## somerset

I enclose an interesting if complicated academic study of properties markets accross UK, US, Japan and of course Ireland. This model has proven suprisingly accurate in historical application. 

It models rather different futures for all these markets, all of them fairly dire... except for Ireland... which it predicts will see house prices double...*again* ... between 2005 and 2010, and no substantial slow down till 2033!! 

I have enclosed briefly in a previous post to no response.

As a former bear, this may now set me on a path of purchasing, if not now, soon, and i see the current nervousness as a blip in the market, one i am happy to capatalise on.

Is the data and fundamentals that this paper based on not worth comment and if so i would appreciate the reasoning as it is turning me from bear to bull, in direct contrast to the sentiment in this forum

http://www.federalreserve.gov/pubs/ifdp/2005/847/ifdp847.pdf

_I suggest openning and searching for "Ireland" and looking at the graphs, the rest is fairly hard going._


----------



## bearishbull

somerset said:


> I enclose an interesting if complicated academic study of properties markets accross UK, US, Japan and of course Ireland. This model has proven suprisingly accurate in historical application.
> 
> It models rather different futures for all these markets, all of them fairly dire... except for Ireland... which it predicts will see house prices double...*again* ... between 2005 and 2010, and no substantial slow down till 2033!!
> 
> I have enclosed briefly in a previous post to no response.
> 
> As a former bear, this may now set me on a path of purchasing, if not now, soon, and i see the current nervousness as a blip in the market, one i am happy to capatalise on.
> 
> Is the data and fundamentals that this paper based on not worth comment and if so i would appreciate the reasoning as it is turning me from bear to bull, in direct contrast to the sentiment in this forum
> 
> http://www.federalreserve.gov/pubs/ifdp/2005/847/ifdp847.pdf
> 
> _I suggest openning and searching for "Ireland" and looking at the graphs, the rest is fairly hard going._


Doesnt matter how good the demographics are, if all these people cant borrow due to higher interest rates and low wage growth then prices wont rise much more from here (in real terms),plus he ignores the fact we have no control over interest rates anymore etc. Numerous reasons not to beleive his very simple model will hold true for ireland.
Also no matter what the demographics if theres oversupply prices will fall.


----------



## miju

somerset said:


> Is the data and fundamentals that this paper based on not worth comment and if so i would appreciate the reasoning as it is turning me from bear to bull, in direct contrast to the sentiment in this forum



in fairness to you seeing as how you emigrated to oz i'd imagine it's ALOT harder for you to see what's happening on the ground

interesting link by the way , but again that's based on an "everything is rosey" scenario when it fact it quite the opposite which is something you would see if living in Ireland, it's not just property prices when you start to factor in other living costs and inflation at 4.5% it's a very different picture than what that link says particularly when the baby boom they're talking about has come and gone


----------



## dontaskme

somerset said:


> Is the data and fundamentals that this paper based on not worth comment and if so i would appreciate the reasoning as it is turning me from bear to bull, in direct contrast to the sentiment in this forum
> 
> http://www.federalreserve.gov/pubs/ifdp/2005/847/ifdp847.pdf
> 
> _I suggest openning and searching for "Ireland" and looking at the graphs, the rest is fairly hard going._


 
Yes, it does make a lot of sense that house prices are correlated with demographics and real interest rates.

Notice on page 8 - the model ignores international capital flows i.e. it models on the basis of a closed economy. I would ask where Ireland's economy would be were it not for the flow of international capital.

However, the model may not predict patterns of emigration and immigration correctly. 

The author in the report says that Ireland has a young population and this is correct, due to the "Pope's Childer", David McWilliams's _soi-disant_ generation and many "New Europeans".

Quite a large percentage of Ireland's working age population come from Eastern Europe. 3% of Lithuania's population is in Ireland and they arrived in the recent past. A large proportion of Ireland's working age population could therefore up and leave.

This happened already in the 1980's and you can see how house prices stagnated in the same graph. Note that the model predicted that they should have been higher, which leads me to think the model is only looking at the working age population, not the number of people actually in work.

Coincidentally (or not) house prices in the Uk, the target country of most Irish emigrants, increased steeply between 1984 and 1990.

I would have thought also that there was more of a baby boom in Ireland immediately after the war, and this would correspond with the parents of the "Pope's Children" (why didn´t McWilliams call them the Bosco generation or something more catchy?) but the author says there was no data from then and the initial post war boom peaked around 1960.

And in the wake of the Wanderly Wagon  generation baby boom what happened to house prices? According to the graph, house prices in real terms declined from 1972 to 1982, when the model predicts they should be constant or increasing.


----------



## whathome

somerset said:


> _I suggest openning and searching for "Ireland" and looking at the graphs, the rest is fairly hard going._


 
Interestingly for a market study it doesn't take supply into consideration or the looming dip in demographics due to falling birth rate in the 80's or the speculative effect due to unusually low interest rates for a number of years. There's no mention of salaries or rental yield.

It concludes that demographics are the primary force underlying the evolution of real house prices. I would agree with this but the factors that create an asset bubble have been ignored by the study.

I've seen several simplistic academic "models" created for various markets over the years that appear to track past performance very well. They usually don't work well at predicting the future.

It reminds me of this book : Dow 36000 - The New Strategy for Profiting From the Coming Rise in the Stock Market 
http://www.amazon.com/gp/product/0609806998/002-2092240-8232040?v=glance&n=283155  - Have a read of the online reviews half way down the page!

Or this book : "Dow, 30,000 by 2008" Why It's Different This Time.
http://www.amazon.com/gp/product/1893958701

Both books made amazing predictions based on "solid" academic research but have become a joke in the investment community.

And in the review for Dow 36,000 Amazon say: "Most books that predict a sky-high stock market make their forecast either by extrapolating the trend line of the market's recent past or by looking at the demographics of the baby boom"


----------



## Duplex

Interesting graph of long term US house prices published in the New York Times last week.  


http://graphics8.nytimes.com/images/2006/08/26/weekinreview/27leon_graph2.large.gif


----------



## bearishbull

Duplex said:


> Interesting graph of long term US house prices published in the New York Times last week.
> 
> 
> http://graphics8.nytimes.com/images/2006/08/26/weekinreview/27leon_graph2.large.gif


prices only rose by an average of 0.6% per annum in real terms over the 116 years. Not a great investment.


----------



## Maine

From Central Bank sectoral report.

This shows that during 12 months to June 2006 the manufacturing sector was borrowing almost 15m a week while the mortgage / construction / real estate industry was borrowing almost 1,000m a week. For other industries the figures are even weaker.

Suggests things may be just a little unbalanced to support growth in prices all the way to 2010.

[broken link removed]


----------



## dochasach

SLAPPY said:


> Here's a good article on the bursting of the U.S. bubble and how everyone is starting to realize how silly their logic was towards property investment.
> 
> http://money.cnn.com/2006/08/24/real_estate/pluggedin_tully.fortune/index.htm



Even the U.S. National Association of Realtors (NAR) is beginning to admit that there is a problem:
http://paper-money.blogspot.com/2006/08/lereah-mea-culpa.html
http://www.realtor.org/Research.nsf...ppt/$FILE/Leadership Summit (August 2006).ppt

If there is a property bubble collapse in our future, at least we have an advantage, we can learn from the current collapses in Australia and the U.S. and perhaps soften the blow to our economy.  But will we learn?

[broken link removed]


----------



## whathome

Maine said:


> Suggests things may be just a little unbalanced to support growth in prices all the way to 2010.


 
Are you thinking that an unhealthy borrowing imbalance in the economy until June 2006 equals momentum in the housing market going forward four years?

Edit - No need to answer, I had interpreted the statement the wrong way around


----------



## Maine

My point is that "fundamentals" have to be amazing for anyone argue that an economy that is borrowing 65 times more for its housing sector compared to its manufacturing sector could be sustainable for 5 more years.  

It also amazes me that amateur investors continue to invest with relatively small deposits like 10% and vast amounts of debt relative to take home income - apparently "secured" on a single asset class in a single economy.  

What people forget is in a market decline banks will lower the multiples they are prepared to lend on. Therefore equity withdrawal on PPRs will not be so easy and pressure to sell investments will be massive.  Banks won't want the keys to these properties they will want cash.


----------



## phoenix_n

whathome said:


> I think you're correct - sentiment really has changed considerably IMO.
> I've seen a lot of evidence of falling asking prices in Dundrum, the most severe is a 20% drop
> 
> Original Listing €1,200,00
> 
> 
> New Listing €950,000 -* Reduced by €250,000 (20.8%)*
> [broken link removed]


 
Well spotted.  I can see that development getting badly hit. It's too high density. 2 bed apts are going for 575 whereas their true value is about 375. I believe that my xmas this will be known to the general public.


----------



## gearoidmm

http://www.unison.ie/irish_independent/stories.php3?ca=35&si=1677819&issue_id=14569



> NEARLY two-thirds of the SME sector feel that the almost decade-long property boom is just about over.
> About 64 per cent of bosses polled in the Sunday Independent Business Owners Survey believe that the days of rampant price inflation that made the the Irish property market so lucrative are grinding to a halt. This view was countered by 30 per cent of respondents, who believe the boom will continue.



Hidden in the business pages of the Indo.


----------



## CelloPoint

gearoidmm said:


> http://www.unison.ie/irish_independent/stories.php3?ca=35&si=1677819&issue_id=14569
> 
> 
> 
> Hidden in the business pages of the Indo.


 
Yeah, read that today too. Couldn't find a web link... Very interesting indeed.


----------



## tententwenty

*Immigrants going home*

And home they go...

_Dr Shabnam Singh recruits doctors for a private hospital._

_"The Indian private sector facilities are at a par, and dare I say it, in some cases better than what is available in the west," she says._

_"In the last six years I would say that from a trickle at first there is now a constant flow of people wanting to relocate back home."_

So much for immigrants propping up the housing pyramid scheme for another two years. I had to laugh at the indo the last day, they had a pull out supplement all about just that. I wonder how many immigrants read the indo?


----------



## bearishbull

September starts on friday and its technically already autumn yet the market seems very quiet in my area(glasnevin/drumcondra). Houses on market months that would have sold in a few weeks in mar/april . Two new builds nearby have been for sale for 2 months and i have yet to see anyone viewing.


----------



## Raskolnikov

[broken link removed]

Surprised no one mentioned the SBP article about AMV's (advertised minimum prices) at auctions. Inside the Property section of the article itself, it covered the individual cases of a huge number of properties. It even mentioned the case of the Dun Chuillin property on the Creagh Road that was mentioned in this thread.

[broken link removed]

A different SBP article about the 57% of withdrawls of properties at auctions. Despite this, properties that did sell at auction were well in excess of their AMV's.

The consenous seems to have been that while people are still willing to pay inflated prices for premium properties, things are slowing down.


----------



## onekeano

bearishbull said:


> September starts on friday and its technically already autumn yet the market seems very quiet in my area(glasnevin/drumcondra). Houses on market months that would have sold in a few weeks in mar/april . Two new builds nearby have been for sale for 2 months and i have yet to see anyone viewing.



BB, we'll know the state of the market on 6th of September after this [broken link removed] goes under the hammer. Last one a couple of doors away went for €1.27m so that's the benchmark.

If you are referring to the 2 on Mobhi Botharinn I think they are being pitched very high as a result of the auction for the 3rd on that made €750 - crazy price!

So it's hold you breadth till Sept 6th.

Roy


----------



## phoenix_n

gearoidmm said:


> http://www.unison.ie/irish_independent/stories.php3?ca=35&si=1677819&issue_id=14569
> 
> NEARLY two-thirds of the SME sector feel that the almost decade-long property boom is just about over.
> About 64 per cent of bosses polled in the Sunday Independent Business Owners Survey believe that the days of rampant price inflation that made the the Irish property market so lucrative are grinding to a halt. This view was countered by 30 per cent of respondents, who believe the boom will continue.
> 
> Hidden in the business pages of the Indo.


 
Possibly the most significant post on this thread. If the smart money is saying the game is up, then the game is up. Its only now a matter of waiting until the news moves from the business pages into mainstream media.


----------



## whathome

The US property market is looking increasingly worrying.  From MarketWatch (Dow Jones):
http://www.marketwatch.com/News/Sto...DBFF-4EE4-ACF7-530A3CD714D3}&siteid=mktw&dist=

"Housing is in free fall, pulling the economy down with it"
"Consumers also face high energy prices, higher interest rates, stagnant wages, negative savings and high debt levels"


----------



## CelloPoint

phoenix_n said:


> If the smart money is saying the game is up, then the game is up.



Especially when you read all about it in a publication like the _Sunday Independent_.


----------



## Raskolnikov

CelloPoint said:


> Especially when you read all about it in a publication like the _Sunday Independent_.


Absolutely horrible newspaper, an editorial type peice yesterday wrote about how not allowing those two Asian lads on the plane in Spain was acceptable given the actions of their compatriots.


----------



## CelloPoint

Raskolnikov said:


> Absolutely horrible newspaper


100% agree with you.

But the plebs read it... Can't ignore the plebs remember...


----------



## phoenix_n

Raskolnikov said:


> Absolutely horrible newspaper,


 
Totally agree.


----------



## qwerty1

Have been a long time lurker here on this site and am very curious about this topic.
One thing I noticed the last time I was down the country, at a house party, was the amount of young guys and gals, <25, driving new BMW's and GTI's, living in 3 bed semi D's, with powerboats and jetskis in the drive. One particular house in this estate, in a prosperous provincial town, had a TV that took up the entire bay window of the house. 

Now what has me scratching the head is just how these things are financed. All of these people have become home owners in the past few years and they are quite open about saying these big ticket items have been purchased with equity release. The people in question earn reasonable money, but certainly a lot less than other friends of mine who are unable to change the car or take a trip or whatever.

Just how widespread is this 'free money' throughout the country and surely it is unsustainable?


----------



## bearishbull

onekeano said:


> BB, we'll know the state of the market on 6th of September after this [broken link removed] goes under the hammer. Last one a couple of doors away went for €1.27m so that's the benchmark.
> 
> If you are referring to the 2 on Mobhi Botharinn I think they are being pitched very high as a result of the auction for the 3rd on that made €750 - crazy price!
> 
> So it's hold you breadth till Sept 6th.
> 
> Roy


That house on clare road would'nt be among the first to fall in value, its a red brick period property not a FTB property, theres still enough people able and willing to buy these types of properties at inflated prices as there arent too many of them around,in saying that i do expect nearly all properties to be hit at some stage in a correction except for the maybe the most exclusive properties  in certain parts of the city.


----------



## Bedsit

A very tongue and cheek article from today's Irish Independent. Unfortunately they do not have a link to it as yet.

*Side Line (Pg 25)*

Our increasingly unhealthy obsession with property has now reached the point where we can identify Ireland’s number one internet porn site as MyHome.ie.

In home and office across the country, guilty types are snatching furtive moments online, fantasizing over five-bed semis in Malahide or looking for hot n’motivated sellers who are ready and willing to go all the way.

They’re unhappy with their jaded old home of ten years, the thrill has gone and they crave the raw excitement of that wild rollercoaster ride to emotional fulfillment or negative equity.

Frustrated wives are wondering why their husbands no longer seem to be interested in coming to bed at the end of a long day.

“Er – I’ll be with you in just a moment darling, I’ve just got to check something out online”.

While she listlessly leafs through some chick-lit, he’s getting something that she could never give him from an exotic online property agency with a new golf development in the Algarve.

And then she wonders why, in the rare moments of passion, he now calls out “Valderama!”, picturing the handsome latin features of Seve Ballesteros as he buys him a whiskey at the 19th hole.

Of course, some will soon tire of the soft-core property scene and start looking for the harder stuff.

Luckily for these deviants, there is no shortage of estate agents out there who are only too willing to punish and humiliate them for a hefty fee.

But it is a sad and pathetic life to lead. Constantly obsessing about the next property thrill, the next sexy Sunday supplement enthusiastically telling you just how much your home is now worth.

And in the end, when you are left hollow-eyed and spend with nothing to show for your obsession other than monthly repayments that would bankrupt a medium-sized African dictatorship, where do you go?

It seems strange, but we may soon long for those days when healthy young Irish men and women were obsessed with the traditional pastimes of sex and shopping.


----------



## phoenix_n

bearishbull said:


> That house on clare road would'nt be among the first to fall in value, its a red brick period property not a FTB property, theres still enough people able and willing to buy these types of properties at inflated prices as there arent too many of them around,in saying that i do expect nearly all properties to be hit at some stage in a correction except for the maybe the most exclusive properties in certain parts of the city.


 
Would tend to agree. They will fall slightly but family orientated red-brick terraces (as opposed to 2 up 2 down) within walking distance of the city will remain popular. Its the half a million euros 2 bed apts not within walking distance that will get hit first and hit hard aswell.


----------



## CN624

On the Sunday Independent..

The tabloids are where failed journos work.
The Sindo is where failed tabloid journos work.


----------



## whathome

phoenix_n said:


> Would tend to agree. They will fall slightly but family orientated red-brick terraces (as opposed to 2 up 2 down) within walking distance of the city will remain popular. Its the half a million euros 2 bed apts not within walking distance that will get hit first and hit hard aswell.


 
Would tend to disagree. I have seen very little in the way of price drops in FTB properties. Seems to be non-FTB properties that have been hit first - redbricks included. I've searched for evidence of price drops in FTB properties and can find very few but lots of non-FTB price drops. 

Many higher-end properties were purchased in the spring with large IO mortgages. There were several reports in the media about a large number of IO mortgages for 1M plus. It takes a lot of confidence in rising prices to do this.

http://www.unison.ie/business/personalfinance/stories.php?ca=259&si=1649768

"The figures also show a sharp rise in the numbers of people taking out €1m-plus mortgages. In the first three months of this year, there was a quadrupling in the number of €1m-plus mortgages"

All properties will be hit in the end anyway - a falling tide lowers all boats but it looks like the trade-up market is being hit first with falling asking prices from what I'm seeing.


----------



## CelloPoint

Bedsit said:


> A very tongue and cheek article from today's Irish Independent. Unfortunately they do not have a link to it as yet.
> 
> *Side Line (Pg 25)*
> 
> Our increasingly unhealthy obsession with property has now reached the point where we can identify Ireland’s number one internet porn site as MyHome.ie.
> 
> In home and office across the country, guilty types are snatching furtive moments online, fantasizing over five-bed semis in Malahide or looking for hot n’motivated sellers who are ready and willing to go all the way.
> 
> They’re unhappy with their jaded old home of ten years, the thrill has gone and they crave the raw excitement of that wild rollercoaster ride to emotional fulfillment or negative equity.
> 
> Frustrated wives are wondering why their husbands no longer seem to be interested in coming to bed at the end of a long day.
> 
> “Er – I’ll be with you in just a moment darling, I’ve just got to check something out online”.
> 
> While she listlessly leafs through some chick-lit, he’s getting something that she could never give him from an exotic online property agency with a new golf development in the Algarve.
> 
> And then she wonders why, in the rare moments of passion, he now calls out “Valderama!”, picturing the handsome latin features of Seve Ballesteros as he buys him a whiskey at the 19th hole.
> 
> Of course, some will soon tire of the soft-core property scene and start looking for the harder stuff.
> 
> Luckily for these deviants, there is no shortage of estate agents out there who are only too willing to punish and humiliate them for a hefty fee.
> 
> But it is a sad and pathetic life to lead. Constantly obsessing about the next property thrill, the next sexy Sunday supplement enthusiastically telling you just how much your home is now worth.
> 
> And in the end, when you are left hollow-eyed and spend with nothing to show for your obsession other than monthly repayments that would bankrupt a medium-sized African dictatorship, where do you go?
> 
> It seems strange, but we may soon long for those days when healthy young Irish men and women were obsessed with the traditional pastimes of sex and shopping.




On perversion:

Perverse is the only word to describe the kind of money that is being made by banks and developers off the back of young, hardworking and honest people (many of whom just want for a modest existence - i.e. a home and a family).

Having said this, the pornography users (those in the game for greed-driven speculative reasons), deserve to be found out. Pornography is not just a passive thing - real people are affected by it.


----------



## liteweight

CelloPoint said:


> On perversion:
> 
> Perverse is the only word to describe the kind of money that is being made by banks and developers off the back of young, hardworking and honest people (many of whom just want for a modest existence - i.e. a home and a family).



Correct me if I'm wrong....but weren't you one of the ones calling them saps a little while ago??


----------



## phoenix_n

whathome said:


> Would tend to disagree. I have seen very little in the way of price drops in FTB properties. Seems to be non-FTB properties that have been hit first - redbricks included. I've searched for evidence of price drops in FTB properties and can find very few but lots of non-FTB price drops.
> 
> Many higher-end properties were purchased in the spring with large IO mortgages. There were several reports in the media about a large number of IO mortgages for 1M plus. It takes a lot of confidence in rising prices to do this.
> 
> http://www.unison.ie/business/personalfinance/stories.php?ca=259&si=1649768
> 
> "The figures also show a sharp rise in the numbers of people taking out €1m-plus mortgages. In the first three months of this year, there was a quadrupling in the number of €1m-plus mortgages"
> 
> All properties will be hit in the end anyway - a falling tide lowers all boats but it looks like the trade-up market is being hit first with falling asking prices from what I'm seeing.


 
Perhaps but the way i view it is that the money at the top end is holding out and just being conservative. Its , if you like, a soft landing at the middle/top end. The real crash happens to those boats that cant weather the storm.


----------



## Duplex

How much of a shock would a bursting property bubble be to the Plain People of Ireland?  I know the banks and insiders are aware of the likely outcome that seems to be fast approaching, but how will the man/woman on the street react when the balloon goes up?  My guess is that scape goats will be hunted down, herded up and ritually slaughtered to satisfy the Gods of avarice and stupidity.


----------



## SLAPPY

Duplex said:


> Interesting graph of long term US house prices published in the New York Times last week.
> 
> 
> http://graphics8.nytimes.com/images/2006/08/26/weekinreview/27leon_graph2.large.gif


 


LOOK OUT BELOW!    This is the scariest graph I have every seen.  Buying on to the property ladder at todays prices will leave many, many people in financial disaster when this whole thing blows up.


----------



## bren2002

Somebody made the point in earlier about General Elections and the market.  I reckon this can be your shortterm guide to the market!  If Bertie calls one before the end of the term, you know there is trouble ahead.  If he calls it in October then things are really bad, he may hold off until Feb/Mar hoping the the general populace don't get wind of this thread,  that way he has the chance to give away a bit in the budget and maybe take some sting out of the ECB rises.


----------



## CelloPoint

liteweight said:


> Correct me if I'm wrong....but weren't you one of the ones calling them saps a little while ago??



I do feel sorry for the poor saps.


----------



## phoenix_n

CelloPoint said:


> I do feel sorry for the poor saps.


 
With all due respect it can be said that anyone that did not amass a tidy fortune if they had the means to enter the property market in the last 6 years, could also rightly be called a sap.


----------



## soma

phoenix_n said:


> With all due respect it can be said that anyone that did not amass a tidy fortune if they had the means to enter the property market in the last 6 years, could also rightly be called a sap.



It always amazes me when people mistake 200k of equity locked up in bricks & mortar, with 200k in the bank.


----------



## Calina

soma said:


> It always amazes me when people mistake 200k of equity locked up in bricks & mortar, with 200k in the bank.



or that they don't equate equity release with debt.


----------



## liteweight

soma said:


> It always amazes me when people mistake 200k of equity locked up in bricks & mortar, with 200k in the bank.



I don't think Phoenix mentioned equity. Many people have made money in the last 6 years by buying low and selling high.


----------



## CelloPoint

phoenix_n said:


> With all due respect it can be said that anyone that did not amass a tidy fortune if they had the means to enter the property market in the last 6 years, could also rightly be called a sap.



I accept your point about those 'saps' who held off in the hope of a market correction - this though is the dogma of the bulls, which I don't believe applies in 2006. I think we both agree that to buy in 2006 would be financial masochism? In my opinion, Irish property is 'worth' 2002 prices.

*Warning: rant mode*

Definition of a sap: a gullible fool. Or, one who thinks the estate agent is your best mate, spends his saturday afternoon shopping in the latest shopping centre, bought a flat in 2006 in Rathoath for 400k on a 100% mortgage + help from the parents, thinks having a large Hollywood dvd collection is representative of his cultural sophistication, still plays computer games, reads GQ magazine, spends E50 getting his haircut but has to pay for it by credit card, lives for the weekend, to be seen drinking Hum-Dinger with fellow generics in 'the Odeon' on a Saturday night but can't afford a taxi home. Still asks parents for money, has a large personal loan which he uses to pay the ESB, gym membership, management company, broadband, foreign holidays. Will be bankrupt by the time he's 30, but sure he had a ball (at least he thought he was having a ball - he was unable to think outside the herd, but hey - what he never knew won't hurt him). The Irish identity crisis is very sad. I know lots of people like the above.


----------



## soma

liteweight said:


> I don't think Phoenix mentioned equity. Many people have made money in the last 6 years by buying low and selling high.



If you are referring to people "cashing out" - I really think that number is low. I only know of one person who has truly cashed out and banked the proceeds. Everyone else I know of has merely 'transferred' the equity to different bricks and mortar.


----------



## liteweight

soma said:


> If you are referring to people "cashing out" - I really think that number is low. I only know of one person who has truly cashed out and banked the proceeds. Everyone else I know of has merely 'transferred' the equity to different bricks and mortar.



I know at least 4 or 5 who cashed out! Of those who put money back into bricks and mortar, their mortgage on a PPR is now much lower!!


----------



## bren2002

CelloPoint said:


> I accept your point about those 'saps' who held off in the hope of a market correction - this though is the dogma of the bulls, which I don't believe applies in 2006. I think we both agree that to buy in 2006 would be financial masochism? In my opinion, Irish property is 'worth' 2002 prices.



Do you really think that prices could drop that much? I was thinking more 25%, but 2002 levels would destroy the economy.


----------



## CelloPoint

bren2002 said:


> Do you really think that prices could drop that much? I was thinking more 25%, but 2002 levels would destroy the economy.



Yes. And I'm very pessimistic about the future of the Irish economy.


----------



## Howitzer

bren2002 said:


> Do you really think that prices could drop that much? I was thinking more 25%, but 2002 levels would destroy the economy.


 
Why?

I'd imagine any answer would explain exactly why prices WILL fall to those levels.


----------



## redo

bren2002 said:


> Do you really think that prices could drop that much? I was thinking more 25%, but 2002 levels would destroy the economy.


I don't see how prices falling back to 2002 levels could destroy the economy.


----------



## CelloPoint

redo said:


> I don't see how prices falling back to 2002 levels could destroy the economy.



This is a point. I'm involved with many start-up companies here in Ireland and I know the cost of commercial office space/workshop space is prohibitively expensive. I even know of one small 2 person company that has moved to Poland where they can rent a building, employ 2 more (english speaking) electronic engineers for the price of one Irish one and have an office secretary/administrator/translator. Plus, their personal expenses are far lower in Poland for the same work they'd be doing in Dublin anyway.

A correction would definitely help Irish businesses remain competitive.


----------



## Duplex

The US economy is about to enter a recession, Oil prices, the twin deficits, a weak dollar, stagnant incomes growth, inflation, an inverted yield curve and a bursting housing bubble are happening now.  Ireland will suffer badly when the US succumbs I'm afraid.


----------



## whizzbang

CelloPoint said:


> A correction would definitely help Irish businesses remain competitive.



It depends who their market is. If they sell luxaries to the highly indebted then their sales might dry up if all of this equity money dissappears. ie fitting 42 plaza TVs in Ballyknacker.

If however you only sell to overseas then the cheaper wages and rentals could benefit you.


----------



## CelloPoint

whizzbang said:


> If however you only sell to overseas then the cheaper wages and rentals could benefit you.



If you are an export-orientated, global business (the kind of businesses that the IDA and Enterprise Ireland are trying to promote), then your costs are almost certainly lower abroad.


----------



## Savvy

I went sale agreed on a property a couple of weeks ago but all this talk about prices falling are making me think twice about it.Its hard to know whether to stick with it or stay renting for a few more months to see how things pan out.
It could easily be 2-3 years before things really go to the crapper


----------



## CelloPoint

Savvy said:


> It could easily be 2-3 years before things really go to the crapper



What is your reasoning behind the 2-3 year time-frame?


----------



## Duplex

Savvy said:


> I went sale agreed on a property a couple of weeks ago but all this talk about prices falling are making me think twice about it.Its hard to know whether to stick with it or stay renting for a few more months to see how things pan out.
> It could easily be 2-3 years before things really go to the crapper



Savvy you have to draw your own conclusions from the available evidence and reach an 'informed'  decision.


----------



## phoenix_n

Savvy said:


> I went sale agreed on a property a couple of weeks ago but all this talk about prices falling are making me think twice about it.Its hard to know whether to stick with it or stay renting for a few more months to see how things pan out.
> It could easily be 2-3 years before things really go to the crapper


 
Best to give as much details on your purchase and then we can give you an informed opinion. For example if i had a house in Salthill i would ride out any storm because in the long run its still a good bet.



soma said:


> If you are referring to people "cashing out" - I really think that number is low. I only know of one person who has truly cashed out and banked the proceeds. Everyone else I know of has merely 'transferred' the equity to different bricks and mortar.


I cashed in.  (but nearly jumped in again this year)


----------



## Savvy

I'm looking at buying in a midlands town,3/4 bed +needs a bit of modernising, cost is less than 250.
Appears to be a quiet mature area(my words not the EA).
I suppose, its the mortgage that is scaring me, it will be almost double my rent, but then again my rent is very low, 600/month for a 3 bed detached house.
I agree with you on Salthill but the prices are savage there. I lived in Glenard Cresent for while and the houses there were not without issues but yet there still clearing 550+ on auction


----------



## CelloPoint

Savvy said:


> I went sale agreed on a property a couple of weeks ago but all this talk about prices falling are making me think twice about it.Its hard to know whether to stick with it or stay renting for a few more months to see how things pan out.



If you want to feel better about your decision - just think of the mantra. If you say it enough to yourself and your family, it's not so bad anymore.

"That's what they've been saying for years now, and no crash has ever materialised"

"You can't go wrong with bricks and mortar"

"People thought I was crazy back in 1996, but look at me now!"

"At least you'll be on the ladder, and you can always 'trade up' in a couple of years"

...

Really though, you should weigh up the risks vs. the potential benefits in an analytical fashion. I think most people in here agree that, when you weigh up everything, Irish property represents an apalling investment. Even as a place to live in, buying a home costs you an arm and a leg.


----------



## Savvy

I remember seeing 5 bed houses going up on the distributor road in knocknacarra a few years ago and thinking 'a quarter of a million, thats madness'
I suppose over time your perceptions of value for money change and I may have convinced myself that what appears to be a good price is a good price.
Cello, your right on the mantra.
You have to sit down and make an informed decision about what is the best decision for you as an individual. Its lunacy to just jump straight in blindly.


----------



## phoenix_n

Savvy said:


> I'm looking at buying in a midlands town,3/4 bed +needs a bit of modernising, cost is less than 250.
> Appears to be a quiet mature area(my words not the EA).
> I suppose, its the mortgage that is scaring me, it will be almost double my rent, but then again my rent is very low, 600/month for a 3 bed detached house.
> I agree with you on Salthill but the prices are savage there. I lived in Glenard Cresent for while and the houses there were not without issues.


 
Hard choice. The only thing i can say is remember the saying 'the day you buy is the day you sell' . Do you think you would have no problems selling the property. Then you might be fine. 

Have a look at similar properties. Could you now get a better deal than before. You have up to the time of signing to fully decide and up to then I'd be researching the market well.

I am not familiar with the midlands so can't really advise more than that.

Yeah i know knocknacarra well.(gf) Was bidding blind on a house there earlier this year but was severly outbidded. If you bought in that area (closer to salthill than knockn) in 2005 you would have done well.


----------



## Savvy

The house would sell easily enough if it was given a little TLC and placed on the market.
I'll just have to contemplate a little more over the coming weeks.
Likewise I bid on a house in Knocknacarra earlier this year and actually went sale agreed but surveyors report explained why the house was on the market so long. So needless to say I didn't proceed with that.


----------



## CelloPoint

Savvy said:


> The house would sell easily enough if it was given a little TLC and placed on the market.
> I'll just have to contemplate a little more over the coming weeks.
> Likewise I bid on a house in Knocknacarra earlier this year and actually went sale agreed but surveyors report explained why the house was on the market so long. So needless to say I didn't proceed with that.



Exactly. Don't rush into any situations or feel pressurised into signing.


----------



## delboy159

Savvy - Don't go putting too much weight into what you read here - use it is a (small) informing factor in your decision, but in the whole scheme of things you are still listening to people who care more about backing up there entrenched views than actually looking at things logically...

You mentioned the "fear of the big morgtage"...  Everyone on this thread will agree with a doubt that Interest rates will increase from 3% to 4% in about 12 months (maybe 9 months) and that they will easily be at 5% in 20 to 34 months.  1% increase equates to nearly €140 on a250k mortgage over 25 years... Things might increase sooner or later - but my time frames are pretty sensible...
In 2 years time will you be able to tolerate a €280 increase per month in your mortgage?

Do you wish to upgrade in the coming years?  If you do and the market crashes - will "being stuck" in this house effect your quality of life or do you see this as a home for the future?

Bottom line - worst case scenario if the a*rse does fall out of the market could you afford a min of €300 extra a month in payments (possible even €500 extra) and will you be "happy" in the house you've bought? If you can afford it and you will be happy in the house work away....  

As was siad in a previous post weigh up the pros and cons as you - the informed person in the situation sees them...  Whatever you feel is right, go with it..  Have the guts to go for buying it or have the guts to pull out. As an old football manager of mine said - If I loose this final it will be with my own tactics, not the tactics people think I should be using...


----------



## Savvy

Delboy,
Naturally it will be my decision but still I'm interested in hearing other people thoughts on the matter. They can give insights in to what you yourself have not thought of.
I am well aware of the rate increases that are very likely down the line. Hence the reason that I'm not mortgaging over 300K(which I have approval for) on a house.


----------



## phoenix_n

Savvy said:


> Delboy,
> Naturally it will be my decision but still I'm interested in hearing other people thoughts on the matter. They can give insights in to what you yourself have not thought of.
> I am well aware of the rate increases that are very likely down the line. Hence the reason that I'm not mortgaging over 300K(which I have approval for) on a house.


 
The only thing is that your mortgage payments will go up. That is near a definite now. But your rent will not. So if you are paying say 1350 next year you would be saving 750 by just paying rent. You would need to get this 750 working for you in order to offset any unplanned increases in house prices. But then again with a mortgage you are reducing the original capital.
Hard choice. 

But there is a joy in owing a house which cannot be measured by money.


----------



## whizzbang

delboy159 said:


> Savvy - Don't go putting too much weight into what you read here - use it is a (small) informing factor in your decision,



Excellent post, it is worth remembering that few of the posters here are unbiased!  that goes for bulls and bears.


----------



## comanche

Being reading this thread for quiet a bit and it seems quiet difficult to put a timeframe on things turning bear. They will its just a matter of time.

However to put a little bit of personal exp on this, I have been over in California every 3 months for the last 3 years and I can't believe how quickly the market has changed here.

One year ago (even 6 months ago), houses where hot cakes. Very few people had a bear mindset. However one year later main stream media is reporting on a market slow down - as far as San Jose goes they are reporting building inventories in most areas. Not too much on price drops yet - though it is reported in one or two area. 

The reason for this
1. Rising intrest rates
2. Fuel prices - people are less willing to commute long distances
3. Quality of life - see above

On top of this areas with poor schools are as well as far from centers of work are being hit first - location, location, location.

My personal opinon is that its a taster of things to come... The shock for me is how quickly the market has turned. 

Oh and another funny thing is how realators work practices are having to change over here with gas prices soaring they will no longer take tyre kicks to view a property (over here you have realator work on your behalf who take you to see properties)... bit of a kicker if you are trying to talk up a market!


----------



## CelloPoint

comanche said:


> The shock for me is how quickly the market has turned.



History has shown many a time that rapid changes in bubble markets are the norm rather than the exception. In fact, bubble markets by their very nature head southwards very rapidly.


----------



## redo

comanche said:


> On top of this areas with poor schools are as well as far from centers of work are being hit first - *location, location, location*.


Location, Location, Location will be the mantra of trade-up buyers this season.   Property prices in desirable areas (D4 D6 D3 etc) will rocket from demand by couples with young childern.  As school starts up again, it will get many people thinking as to where about they would want their kids to be educated.

The biggest hit in property prices (Redo's *Mixed Theory* (MT), all credit to 2Pack) might infact come from, 3 beds with attic conversions, 4 beds semi/detacted, large 3 bed penthouse/apartments, all situated within mixed developments.  Also developments that charge management fess and contain an element of social housing won't be immune.

EDIT

This would be a classic example
[broken link removed]


----------



## redo

It is amazing how little activity this thread gets during non office hours


----------



## redo

A few more

[broken link removed]
[broken link removed]

[broken link removed]
[broken link removed]
[broken link removed]


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## Maine

redo said:


> I don't see how prices falling back to 2002 levels could destroy the economy.


 
Someone who lives in a 1 million house with no mortgage - millionaire.  Market drops 20% - now worth 800k - no longer a millionaire.  History shows this person will cut back on expenditure and save more to try to recover the "loss of wealth".  This cutback by lots of people means a big fall off in business and with it jobs.  Witness Japan where even with 0% interest rates few would borrow money.

Secondly we output 100,000 housing units which would fall to normal levels of say 60,000.  Thats alot of bank staff idle, construction supplies and building staff.  The demand for holiday homes etc could fall even further depressing building outside the big cities even more.  

Thirdly the govt finances drop massively - one example would be that the 40,000 drop in housing starts would cost it about 80 million a week.


----------



## ivuernis

Maine said:


> Someone who lives in a 1 million house with no mortgage - millionaire. Market drops 20% - now worth 800k - no longer a millionaire. History shows this person will cut back on expenditure and save more to try to recover the "loss of wealth".


 
Why???


----------



## Maine

Simple case is a person of 55. This person now does not worry too much about his pension as he can sell the house for 1 million, buy a place in country / spain for 250k and bank 750k and the interest on this is say 30k a year.  Drop the house price by 250k and he only banks 500k.  Interest drops to 20k.  He will feel less wealthy and will cut back to try to increase his income.

See the saving rates in Japan and Germany where housing has fallen - huge.


----------



## bearishbull

ivuernis said:


> Why???


The wealth effect in reverse affects consumer confidence and spending.


----------



## CN624

ivuernis said:


> Why???



Its human nature. Just gone through this on a small scale myself for the first time.

Shares I had bought at 8 euro went up to 19 euro. (About 10,000 profit) So I'm already spending the money in my head, thinking big ticket items holiday etc. 

But it even effects small day-to-day expenditure, go for a couple of pints or treat some mates to a good meal and think 'Sure its only a few bob, I'll sell a few shares and its covered'. 

Then the price fell to 16 euro. Now I'm still up 100% but the attitude changes to "I've lost 3 euro a share" not "I'm up 100%" . So you start to question if you can afford the holiday. And can't go out for a meal every night, maybe cut back on the pints for a while. 

Only a small example but I think one that may explain how a housing crash will effect consumer confidence.


----------



## Guest107

*Negative Wealth Effect* Explained to the Bewildered  and [broken link removed]

Its because of this that I have always advocated a short sharp correction period of no more than 3 years (and preferably 2) with no pissing about by politicians.

The bubble should be burst rather than gently deflated...which could drag on for bloody years


----------



## RugbyBoy

more bad news frm the US - but it won't happen here. Ireland is unique 

http://business.timesonline.co.uk/article/0,,8210-2332487,00.html


----------



## Duplex

RugbyBoy said:


> more bad news frm the US - but it won't happen here. Ireland is unique
> 
> http://business.timesonline.co.uk/article/0,,8210-2332487,00.html


 

Imagine the surprise if The Irish Times started to refer to the Irish housing market as a bubble.  They (the IT)  will have to capitulate at some stage I suppose , embarrassing denial and being expected to be taken seriously are uneasy bedfellows.  Oh to be a fly on the wall when the editorial decision is made to report the blindingly obvious.


----------



## Guest107

Duplex said:


> Imagine the surprise if The Irish Times started to refer to the Irish housing market as a bubble.



Never underestimate the ability of an Irish newspaper to say one thing in its 'main' section while its 'property' section appears on the face of it to be driven by quite a disparate set of editorial 'values' .

The Irish Times would never do that though, they believe in consistency  !


----------



## Duplex

2Pack said:


> Never underestimate the ability of an Irish newspaper to say one thing in its 'main' section while its 'property' section appears on the face of it to be driven by quite a disparate set of editorial 'values' .
> 
> The Irish Times would never do that though, they believe in consistency !


 

But whats this?, investors selling up (dumping),  the word cynical used by the Irish Times in the same sentence as property.  Have they seen the light.

PS
Who do these investors expect to buy these properties?  



> Not only is there likely to be an over supply of apartments in some areas of Dublin, but some investors are now selling off their rental properties, reckoning that they have seen the best of the buoyant market. Other investors are planning to consolidate their portfolios by selling all their bits and pieces to buy one decent investment. Top of the wish list at the moment will be one of the AIB or Bank of Ireland branches which are about to hit the market at prices generally between €5 million and €9 million. Imagine the cachet of owning your local branch? No trouble in raising a loan for your daughter's new car after that. The banks are hoping to capitalise on the runaway commercial investment market, so expect a feeding frenzy over the coming months. The more cynical among us wonder why, if the branches are such good buys, that the banks have chosen to offload them at this stage. Remember Eircom.


 
[broken link removed]


----------



## phoenix_n

Duplex said:


> "Not only is there likely to be an over supply of apartments in some areas of Dublin"
> 
> 
> [broken link removed]


 
62 rental properties in Castleknock on daft. An increase from last week. But the price expected for some is unrealistic.


----------



## Howitzer

RugbyBoy said:


> more bad news frm the US - but it won't happen here. Ireland is unique
> 
> http://business.timesonline.co.uk/article/0,,8210-2332487,00.html


 
Interesting line:



> However, people do not join a wave of selling when prices fall: most simply sit tight. Furthermore, the US market is a vast, diversified one, nothing like as dominated by a single, frothy urban market in the way the UK is affected by London.


 
Err, I would have thought extending the logic of this to Ireland and Dublin is self evident. The UK is a large and diversified market compared to here.


----------



## Persius

In the Sunday Times, Irvin Stelzer in his American letter made the point that some commentators in the US housing business may be deliberatly talking up the housing crash in order to frighten the Fed to start dropping interest rates. With lower rates, they could then start selling "affordability", "soft landing", "good time to buy again" etc.

Should the Fed actually start dropping rates, it's harder to see the ECB continuoulsy rising rates, which could prevent a significant fall in housing prices here in Ireland. However Stelzer thought that the Fed would remain more woried by inflation and wouldn't drop rates in the short term.


----------



## Howitzer

Persius said:


> Should the Fed actually start dropping rates, it's harder to see the ECB continuoulsy rising rates, which could prevent a significant fall in housing prices here in Ireland. However Stelzer thought that the Fed would remain more woried by inflation and wouldn't drop rates in the short term.


 
His conclusion was recession or inflation, pick one.

http://www.timesonline.co.uk/newspaper/0,,2769-2330122,00.html


----------



## soma

Persius said:


> Should the Fed actually start dropping rates, it's harder to see the ECB continuoulsy rising rates, which could prevent a significant fall in housing prices here in Ireland.



If the Fed do this (which I agree could happen) - then the US Dollar is toast, and this will simply lead to a host of other problems which will trickle/flood down to Ireland.


----------



## Duplex

Persius said:


> In the Sunday Times, Irvin Stelzer in his American letter made the point that some commentators in the US housing business may be deliberatly talking up the housing crash in order to frighten the Fed to start dropping interest rates. With lower rates, they could then start selling "affordability", "soft landing", "good time to buy again" etc.
> 
> Should the Fed actually start dropping rates, it's harder to see the ECB continuoulsy rising rates, which could prevent a significant fall in housing prices here in Ireland. However Stelzer thought that the Fed would remain more woried by inflation and wouldn't drop rates in the short term.


 
I think the Fed will hold for now and maybe cut next year in response to emerging signs of a recession.  (Interest rates fall during a recession.)  I think that low interest rates wont sort out the structural problems in the US economy, in the same way low rates failed to prevent a deflationary recession in Japan.


----------



## Guest107

But my dear chaps, the prime driver in the Irish housing market will be the _purest of local oversupply_, the Fed/ECB/Inflation/Exchange Rates equation is secondary and energy costs are tertiary and for another thread surely.

Ben Bernanke gets no notice out the Back of Ballivor ...I sez now unto yiz  all !


----------



## Lumpsum

2Pack said:


> Never underestimate the ability of an Irish newspaper to say one thing in its 'main' section while its 'property' section appears on the face of it to be driven by quite a disparate set of editorial 'values' .
> 
> The Irish Times would never do that though, they believe in consistency !


 

Well this morning they seem to be beginning news management of the forthcoming crash, I mean soft landing. And if even the banks are now predicting a "material slowdown".....

[broken link removed]


----------



## Duplex

Lumpsum said:


> the banks are now predicting a "material slowdown".....
> 
> [broken link removed]


 

I had one of those 'material slowdowns' once.  I drove my car into the back of an Audi, the guy driving it was livid, balling and spitting.  Sez I "sure tis only a material slowdown ya big fool".


----------



## BigM

Hello all. Fascinating thread – keep it up!

I was pretty bullish on the market up to recently but a few things (including this thread!) have made me reassess my views: 
When the banks started using ‘ability to repay’ calculations rather than the traditional salary multiples, the resultant 6-10 time multiples were ‘justified’ by the incredibly low interest rate environment. But the corollary is also true: in a rising rate environment the ‘ability to repay’ calculations must result in lower salary multiples being offered – I would suggest 5x is still generous.

When we bought our 1st house (4/5 years ago) we were on ordinary junior-level salaries (banking and law) and the bank lent us around 4 times our joint income to buy the house. Typical starter home – D8, 2-bed ex-council house 15min walk to town.
These are now selling for 450k which, based on 5x salary, would require an excellent salary for a single person or 2 good salaries. It is not remotely affordable to typical FTBs (junior-level salaries have not doubled in the last 4 years!) and is also not attractive for investors as they rent for only 900-1200pm.

And things don’t get any easier at the other end of the market. My wife and I had to go for a 35yr (I know, I know!) mortgage in order to be able to afford our home (last year). We decided to go for it because it’s the area we always wanted (D6), close to town, Luas, shops, schools etc and we’ll be here for at least 10 years. We could barely afford it, our salaries are at the high end of the scale and the mortgage is still only around 75% of house’s current ‘value’  so who could we sell it to if its ‘value’ keeps on increasing?

So I think the time has come to cash in the profit on our 1st house. It will enable us to reduce our mortgage to 60%, 20 years (saving a fortune in interest) with manageable repayments (even when rates go to 5%). 
I know a lot of people who are in the same position and thinking of selling their investment properties (usually their 1st homes) in order to take profits and insulate themselves somewhat from any price correction.
Just hope to get it done before the crash happens!!

Sorry for length of post - 1st time and all that... need to hone my editing skills!!


----------



## whathome

BigM said:


> So I think the time has come to cash in the profit on our 1st house.


 
Great post BigM. Nearly everyone I know who moved up the "ladder" in the past few years didn't sell their first or second homes. We were encouraged to hang on to ours when trading up also. I've noticed that a lot of the hangers-on are thinking about letting go of their investment property to bank the amazing returns achieved, realising that the market now looks like it's weakening. There's also quite a bit of hassle renting out property and life appears more straighforward when you have a healthier financial situation and no letting headaches.

It's a bit like Who wants to be a millionaire? All of the lifelines have been spent and the next question is impossible, it's too much of a gamble to keep going.

A lot of the selling pressure over the next year will come from hangers-on letting go IMO.


----------



## Remix

If this sort of thing can happen in the past couple of years when house prices went crazy, I suspect there will be a lot of similar stories in the near future.

True story (numbers approximate and I'm estimating buying/selling expenses and cgt):

The guy Purchased house for investment in 2004 (South Dublin City) 450k + 7.5% stamp duty + expenses = 486k.

Landlord intended to rent it out but house needed complete refurbishment. This was done over the two years but the ongoing work meant vacant periods as tenants refused to stay in the house with the work overruns and builders, decorators etc marching through it.

Cost of refurbishment (including an extension) = 120k.

Tenants were numerous (new arrivals - pack 'em in) enough for periods of time to cover the bulk of interest rate payments.

So total cost 486k + 120k = 606k.

The construction work did not go smoothly and there was much conflict with builders, tenants and neighbours. The landlord and
his wife both have jobs with young kids in a creche. His wife had a near nervous breakdown and missed time from work.

Now the house is back on the market - asking price 640k. Neighbours don't think it will get this price as similiar priced properties in the area are sitting with no buyer interest.

Let's assume it does fetch 640k
Selling costs = 5k. CGT = 6k.

So if he's lucky he walks away with a profit of about 20k for a two year nightmare.


----------



## Howitzer

whathome said:


> A lot of the selling pressure over the next year will come from hangers-on letting go IMO.


 
Definately. The amount of posts relating to this sort of scenario over the last 3 months has been huge.

The tax liabilities which a lot of these people have will be interesting. Brokers and Bank Managers advising people to take out new mortgages and hold onto their existing properties seems to be a pretty close parallel to the Bank Managers advising clients to take out off shore accounts in the 80s.


----------



## CelloPoint

Howitzer said:


> The tax liabilities which a lot of these people have will be interesting. Brokers and Bank Managers advising people to take out new mortgages and hold onto their existing properties seems to be a pretty close parallel to the Bank Managers advising clients to take out off shore accounts in the 80s.



Concurr. I would even suggest there's a conspiracy going on.


----------



## liteweight

I would never take a Bank Manager's advice when it came to buying or selling property! It's not his/her role...their role is finance and I assume they would always suggest you held on to old property because it means two mortgages. More money for them!!


----------



## CelloPoint

Remix said:


> If this sort of thing can happen in the past couple of years when house prices went crazy, I suspect there will be a lot of similar stories in the near future.
> 
> True story (numbers approximate and I'm estimating buying/selling expenses and cgt):
> 
> The guy Purchased house for investment in 2004 (South Dublin City) 450k + 7.5% stamp duty + expenses = 486k.
> 
> Landlord intended to rent it out but house needed complete refurbishment. This was done over the two years but the ongoing work meant vacant periods as tenants refused to stay in the house with the work overruns and builders, decorators etc marching through it.
> 
> Cost of refurbishment (including an extension) = 120k.
> 
> Tenants were numerous (new arrivals - pack 'em in) enough for periods of time to cover the bulk of interest rate payments.
> 
> So total cost 486k + 120k = 606k.
> 
> The construction work did not go smoothly and there was much conflict with builders, tenants and neighbours. The landlord and
> his wife both have jobs with young kids in a creche. His wife had a near nervous breakdown and missed time from work.
> 
> Now the house is back on the market - asking price 640k. Neighbours don't think it will get this price as similiar priced properties in the area are sitting with no buyer interest.
> 
> Let's assume it does fetch 640k
> Selling costs = 5k. CGT = 6k.
> 
> So if he's lucky he walks away with a profit of about 20k for a two year nightmare.



Funny thing is that the PTSB/ESRI would report that such houses have increased in 'value' by 40%.

"So house prices continue to increase at phenomenal rates, get in now, or you'll miss the boat. Quick!"


----------



## Howitzer

CelloPoint said:


> Concurr. I would even suggest there's a conspiracy going on.


 
No conspiracy. New mortgage for new property means another signing bonus for the mortgage seller.


----------



## whathome

CelloPoint said:


> Funny thing is that the PTSB/ESRI would report that such houses have increased in 'value'


 
Next months PTSB/ESRI report will generate a lot of headlines. I don't think it will show prices falling yet because of the four month time-lag but the size of the drop from the previous month will surprise a lot of people.


----------



## phoenix_n

BigM said:


> Hello all. Fascinating thread – keep it up!
> 
> I was pretty bullish on the market up to recently but a few things (including this thread!) have made me reassess my views:
> When the banks started using ‘ability to repay’ calculations rather than the traditional salary multiples, the resultant 6-10 time multiples were ‘justified’ by the incredibly low interest rate environment. But the corollary is also true: in a rising rate environment the ‘ability to repay’ calculations must result in lower salary multiples being offered – I would suggest 5x is still generous.
> 
> When we bought our 1st house (4/5 years ago) we were on ordinary junior-level salaries (banking and law) and the bank lent us around 4 times our joint income to buy the house. Typical starter home – D8, 2-bed ex-council house 15min walk to town.
> These are now selling for 450k which, based on 5x salary, would require an excellent salary for a single person or 2 good salaries. It is not remotely affordable to typical FTBs (junior-level salaries have not doubled in the last 4 years!) and is also not attractive for investors as they rent for only 900-1200pm.
> 
> And things don’t get any easier at the other end of the market. My wife and I had to go for a 35yr (I know, I know!) mortgage in order to be able to afford our home (last year). We decided to go for it because it’s the area we always wanted (D6), close to town, Luas, shops, schools etc and we’ll be here for at least 10 years. We could barely afford it, our salaries are at the high end of the scale and the mortgage is still only around 75% of house’s current ‘value’ so who could we sell it to if its ‘value’ keeps on increasing?
> 
> So I think the time has come to cash in the profit on our 1st house. It will enable us to reduce our mortgage to 60%, 20 years (saving a fortune in interest) with manageable repayments (even when rates go to 5%).
> I know a lot of people who are in the same position and thinking of selling their investment properties (usually their 1st homes) in order to take profits and insulate themselves somewhat from any price correction.
> Just hope to get it done before the crash happens!!
> 
> Sorry for length of post - 1st time and all that... need to hone my editing skills!!


 
You seem to be in a strong position. I would be wary of selling this Autumn/Spring as the market will be flooded with investment apartments and other stock and your D4 place may not attract the attention it should. You may not want the stress either. If you can take the strain of interest rises then i'd hang on until a couple of years when the dust settles.


----------



## Howitzer

whathome said:


> Next months PTSB/ESRI report will generate a lot of headlines. I don't think it will show prices falling yet because of the four month time-lag but the size of the drop from the previous month will surprise a lot of people.


 
Insider information? What stage does this place you (us) on Minsky's bubble thingy?

http://www.askaboutmoney.com/showthread.php?t=24601


----------



## whathome

phoenix_n said:


> You seem to be in a strong position. I would be wary of selling this Autumn/Spring as the market will be flooded with investment apartments and other stock and your D4 place may not attract the attention it should. You may not want the stress either. If you can take the strain of interest rises then i'd hang on until a couple of years when the dust settles.


 
I don't agree - when prices are falling, it's always better to sell sooner rather than later!   Also - the first property is in D8, not D4


----------



## whathome

Howitzer said:


> Insider information? What stage does this place you (us) on Minsky's bubble thingy?
> 
> http://www.askaboutmoney.com/showthread.php?t=24601


 
Stage 6? I haven't heard of insiders selling property apart from the banks.

It's a shame there's no spread betting market for the PTSB/ESRI index! Phoenix_n has predicted 0.2% growth in next months report - I'm going for 0.4% growth which will generate more "weakening market" headlines IMO


----------



## gearoidmm

I'd go along with 0.4%.


----------



## Duplex

phoenix_n said:


> You seem to be in a strong position. I would be wary of selling this Autumn/Spring as the market will be flooded with investment apartments and other stock and your D4 place may not attract the attention it should. You may not want the stress either. If you can take the strain of interest rises then i'd hang on until a couple of years when the dust settles.


 
That dust you mention will be;

1. Rising interest rates

2. A US recession

3. A recession in Ireland

4. Rising unemployment

5. A departure of the guest workers for pastures greener.

6. Falling rental incomes (see above)

7. Falling house prices.

8. A budgetary squeeze.

9. Possibly rising taxation (see above)

10. Repossessions, defaults etc.


That's some dust.


----------



## conor_mc

whathome said:


> Stage 6? I haven't heard of insiders selling property apart from the banks.


 
Sorry mate, that's just laughable. Unless you're on the inside, you won't necessarily hear about what the insiders are doing until they're done! Otherwise, well it wouldn't really be insider trading, would it?

If it weren't for company law, the banks wouldn't have broadcast their property sales to the general public. As it is, they spun it to sound like a vote of confidence in the Irish property market.


----------



## delboy159

I have heard reliable stories of banks reposessing houses - BUT NOT SELLING THEM....  The solution they came up with was genius!

They 
a) froze the owners mortgage (while still acrruing interest obviously)
b) took posession of the home
c) rented the house to the owner (at a friendly rate that is much lower than that annoying mortage... I know - friendly rate!)
d) eventually when the owner is back on his/her/their feet, they take posession of the house and start re-paying the mortgage (which is now larger as it has been accruing interest for the past few months/years).

Great solution for the bank as 
> The rent they get helps towards the frozen mortgage
> They don't have to dump the house (or numerous houses) onto the open market and create an oversupply and/or lack of confidence.
> If/when the mortgage payments start back up again the bank has made money on the accrued interest

Anyway - would people classify this as insider trading of sorts?


----------



## whathome

conor_mc said:


> Sorry mate, that's just laughable. Unless you're on the inside, you won't necessarily hear about what the insiders are doing until they're done! Otherwise, well it wouldn't really be insider trading, would it?


 
Insider selling usually relates to public company executives selling shares, they are obliged by law to disclose details of their dealings.  Some investors use this as a bearish signal on the stock.

I don't think there's an exact equivalent with property but the closest thing would be estate agents selling their private investment properties? 

Maybe you're getting confused between insider trading and insider selling?


----------



## conor_mc

whathome said:


> Insider selling usually relates to public company executives selling shares, they are obliged by law to disclose details of their dealings. Some investors use this as a bearish signal on the stock.
> 
> I don't think there's an exact equivalent with property but the closest thing would be estate agents selling their private investment properties?
> 
> Maybe you're getting confused between insider trading and insider selling?


 
Okay, so lets redefine Minsky's phase 6 as "Open Selling"? Insider is the key word, in that people with access to information not in the public domain can make a profit from how they use that information. The banks selling up several hundred million worth of property is a big hint, and as I said they're obliged to notify the stock market of transaction of that size. 

I'm sure there are plenty of private companies/individuals following suit, but they're not about to let everyone else in on their little secret until such time as they've maximised their profit - either through disposing of their over-valued assets and/or maintaining the status-quo upon which their % commissions apply.

Bottom line is that, as far as I'm aware, there aren't too many "insiders" on this thread - most of us are observers trying to read the signs.


----------



## Guest107

whathome said:


> Stage 6? I haven't heard of insiders selling property apart from the banks.



We are Late Late 5 early 6 on the Minsky Bubble scale and will be at full stage 6 by the end of October. I reckon all the Euphoria feelings will be  gone by end October ( AND that the next general election will take place in Mid October)  

There are plenty of euphoric muppets still out there to produce the illlusion of prosperity and stability  .

The build up of _inventory in the sales channel , including very long term investors dumping out, is *VERY*_ _noticeable_. At least to me. 

Not all the sellers are insiders , merely cute hoors. The euphoric muppets will oblige by  buying the properties for a while and they will exit with cash in hand .


----------



## whathome

2Pack said:


> There are plenty of euphoric muppets still out there to produce the illlusion of prosperity and stability .


 
Yep - will take them a little longer to come down from the euphoria, then they'll realise that the DJ has stopped playing, the main lights have come on and most people are leaving.


----------



## BigM

whathome said:


> I don't agree - when prices are falling, it's always better to sell sooner rather than later! Also - the first property is in D8, not D4


 
If it was D4 I'd definitely sell it as it would probably pay off my entire mortgage and then some!!


----------



## phoenix_n

BigM said:


> If it was D4 I'd definitely sell it as it would probably pay off my entire mortgage and then some!!


 
Sorry my mistake. If you are going to sell i'd suggest you do it before others who are thinking of it do it aswell. But what will be important will be the financial status and commitment of the buyer as you will want a quick transaction and not want your sale agreed to fall thru leaving you to put it back on the market when it may languish for months or....


----------



## whathome

conor_mc said:


> either through disposing of their over-valued assets and/or maintaining the status-quo upon which their % commissions apply.


 
Yes - I didn't say it wasn't happening, just that I hadn't heard of it happening. The point being that it's difficult to say whether we're at stage 6 or not  Minsky implies that sometimes insider selling information sneaks out:

From stage 6 - "Other times, the outsiders see them as they leave. Whether the outsiders see them leave or not, insider profit taking signals the beginning of the end"


----------



## conor_mc

whathome said:


> Yes - I didn't say it wasn't happening, just that I hadn't heard of it happening. The point being that it's difficult to say whether we're at stage 6 or not  Minsky implies that sometimes insider selling information sneaks out:
> 
> From stage 6 - "Other times, the outsiders see them as they leave. Whether the outsiders see them leave or not, insider profit taking signals the beginning of the end"


 
Cool, got ya now.

I think we are seeing those signs sneaking out (with AIB and BoI), just dressed up as a vote of confidence in Irish property. I'm more inclined to see it as a tidy-up of the balance sheet myself.


----------



## phoenix_n

phoenix_n said:


> 62 rental properties in Castleknock on daft. An increase from last week. But the price expected for some is unrealistic.


 
Rental supply in CastleKnock has just increased to 68 from 62 this morning. 

Increased supply coming on to the market from completed developments ?


----------



## whathome

from Bloomberg today:
"German Consumer Confidence Rises to Highest Since November 2001"
http://www.bloomberg.com/apps/news?pid=20601100&sid=arhtQakdr7bc&refer=germany

..and then from RTE today:
"Survey finds Germany consumers gloomy"
http://www.rte.ie/business/2006/0829/germany.html

They're both reporting on the same news story!!!


----------



## Howitzer

whathome said:


> Yes - I didn't say it wasn't happening, just that I hadn't heard of it happening. The point being that it's difficult to say whether we're at stage 6 or not  Minsky implies that sometimes insider selling information sneaks out:
> 
> From stage 6 - "Other times, the outsiders see them as they leave. Whether the outsiders see them leave or not, insider profit taking signals the beginning of the end"


 
I have a theory, I'm not got going to give it a title, but every commentator from the "inside", that's EAs, bank economists and the like, all seem to be calling the slow down as being 18 months away. This equates to 3 selling seasons, S1 (this autumn), S2 (next spring), S3 (next autumn).

Now if you wanted to off-load your property portfolio at the best possible price the last season you'd want to be selling up in is S3, obviously. Anyone taking this advice will, as a result, look to sell in S2. So if you wanted to get out before the pack S1 is actually when you should be selling up. 

So are the banks, et all, telling the punters to hold off selling so that they can all get out in this selling season?

Ahh sod it, "Howitzer's 3 season solution" it is.


----------



## phoenix_n

phoenix_n said:


> 62 rental properties in Castleknock on daft. An increase from last week. But the price expected for some is unrealistic.


 


Howitzer said:


> I have a theory, I'm not got going to give it a title, but every commentator from the "inside", that's EAs, bank economists and the like, all seem to be calling the slow down as being 18 months away. This equates to 3 selling seasons, S1 (this autumn), S2 (next spring), S3 (next autumn).
> 
> Now if you wanted to off-load your property portfolio at the best possible price the last season you'd want to be selling up in is S3, obviously. Anyone taking this advice will, as a result, look to sell in S2. So if you wanted to get out before the pack S1 is actually when you should be selling up.
> 
> So are the banks, et all, telling the punters to hold off selling so that they can all get out in this selling season?
> 
> Ahh sod it, "Howitzer's 3 season solution" it is.


 
Except, IMO, there is no selling season left.


----------



## dontaskme

whathome said:


> from Bloomberg today:
> "German Consumer Confidence Rises to Highest Since November 2001"
> http://www.bloomberg.com/apps/news?pid=20601100&sid=arhtQakdr7bc&refer=germany
> 
> ..and then from RTE today:
> "Survey finds Germany consumers gloomy"
> http://www.rte.ie/business/2006/0829/germany.html
> 
> They're both reporting on the same news story!!!


 
More from Germany:

http://today.reuters.com/news/artic...BusinessNews&storyID=nL29903388&from=business

German tax take for June has increased 11.5% from the previous year. Some of this is probably due to the World Cup.

Note also they are talking of reducing the rate of corporate tax to 30% as they are very aware that they are being undercut by countries such as Ireland.

The German economy is much bigger than Ireland's and cannot turnaround as quickly but obviously has a much bigger weighting with the ECB when they are setting interest rates for the eurozone.


----------



## phoenix_n

dontaskme said:


> More from Germany:
> 
> http://today.reuters.com/news/artic...BusinessNews&storyID=nL29903388&from=business
> 
> German tax take for June has increased 11.5% from the previous year. Some of this is probably due to the World Cup.
> 
> Note also they are talking of reducing the rate of corporate tax to 30% as they are very aware that they are being undercut by countries such as Ireland.
> 
> The German economy is much bigger than Ireland's and cannot turnaround as quickly but obviously has a much bigger weighting with the ECB when they are setting interest rates for the eurozone.


 
Die duetsch sind kommen. I for one predict a German recovery and have invested as such.


----------



## Superman

Please...
"Die Deutschen sind gekommen"


----------



## dontaskme

Superman said:


> Please...
> "Die Deutschen sind gekommen"


 
That's past tense. Werden would be future.

Just from the point of view of inflation, the three percent increase in VAT will surely affect consumer prices.

From the ECB´s point of view, the effect on the eurozone inflation would probably be the same as if VAT in Ireland were increased by 50% i.e. to 71!


----------



## Calina

The whole question of German grammar is way, way off topic, but frankly, from the original sentence, you can't tell whether he meant: The Germans are coming, the Germans have come or the Germans will come. My money, however is, on The Germans are coming which, in German, is "Die Deutschen kommen".

But I'd prefer something like the "Die deutsche Konjunktur wachet auf". It's years since I've written formal German, but I'm not sure, in the context "The Germans are coming" would be correct idiom in German. 

In any case, the Germany economy is one of the biggest exporters of value goods, if not the biggest - I can't find a link to the article at present, but I believe German exports exceed exports of the US, China and Japan put together. The big, big issue for Germany is its high unemployment. The fact that its economy is a lot more soundly based in output and trade income will be heavily ignored by the Anglo-Saxon economies because Germany's unemployment rate is touching 11%, versus us clever people with our official rates of 5 and 6%. Not to mention our very, very heavy dependence on debt. 

Given a choice between low interest rates and a skyrocketing property market, I'd prefer to see inflation under control. I don't mean inflation in the cost of borrowing per se, but inflation in the cost of normal living, food and getting to report, and clothing. 

That being said, if the US catches a serious cold, then I'm pretty sure that no economy will escape a negative impact, and that includes Germany.


----------



## Persius

Superman said:


> Please...
> "Die Deutschen sind gekommen"


Or perhaps "Die Deutschen werden irgendwann, bald, gleich, hoeffentlich noch kommen". As stated by phoenix_n, it'll take a while for a turnaround to be actually experienced on the ground.

Regarding the 3% VAT increase and the effect on inflation, this surely depends on whether this is fully passed on to customers. I would imagine that many retailers will simply drop the base price by enough to allow the end price with 19% VAT in 2007 to be the same as it was with 16% VAT in 2006. A 3% increase doesn't give you much scope to round-up to even numbers without making significant increases in price. And significant increases will slow down consumption too much, so retailers will be hesitant to risk it (though they may start hiking some prices up now, so they can then keep them constant in 2007 by droping the base price back).


----------



## darex

Interesting article here from the US:

Property put on market in Sept 2005 at $1.1m. Didn't sell until Aug 2006 at $530,000 a drop of over 50%.

It demonstrates the perils of being too slow to react to a falling market.

Also interesting in that the fall happened over the period of only 1 year - much much faster that the 4 years that a housing slowdown is supposed to take.

http://www.realestatejournal.com/buysell/markettrends/20060824-corkery.html?refresh=on


----------



## bearishbull

When people talk of 11% unemployment in germany and of similar unemployment levels in ireland in 1980's i always think well nearly 90% were/are employed. If nearly 90% can get a job then im not too worried about the 10% ,they have to worry about their employability and if necessary increase it through more qualifications etc.
I tend to wonder was it so bad here in 80's and is it so good now?. My father and mother (now in mid 50's)despite neither finishing school, or being particularly intelligent/entrepreneurial or getting any qualifications managed to afford a  decent house and live well with holidays abroad through the70's and 80's. Neither inherited anything and have had a good life on (for most of the time) a single  salary from a state employer. Nowadays the equivalent couple would need loads of qualifications and jobs paying way above average to afford the same house/lifestyle and neither could stay at home permenently like my mother did. thats the celtic tiger for ya!


----------



## whizzbang

bearishbull said:


> Neither inherited anything and have had a good life on (for most of the time) a single  salary from a *state employer. *



I'm not sure how bad it was here during the 80s either but having a state job must have made things a lot easier?


----------



## bearishbull

whizzbang said:


> I'm not sur ehow bad it was here during the 80s either but having a state job must have made things a lot easier?


The job wasnt too well paid but i suppose well enough given that many of my dads friends in similar paid state jobs(gardai,prisons,fire service) could buy multiple investment properties, unfortunately he didnt! Hates debt even when used constructively.


----------



## Persius

bearishbull said:


> When people talk of 11% unemployment in germany and of similar unemployment levels in ireland in 1980's i always think well nearly 90% were/are employed. If nearly 90% can get a job then im not too worried about the 10% ,they have to worry about their employability and if necessary increase it through more qualifications etc...


 
The thing about high unemployment is that it puts _fear_ into people that they too could lose their jobs and *not be able to find a new one at a similar salary level*. Of course if you are a civil servant, then this isn't a big concern. But for the rest of us, you are less likley to be borrowing for mortgages or otherwise living it up if you always have this _real fear_ in the back of your mind. You're more likely to put your money away for a rainy day. 

I've lived in Germany, and believe me, there are plenty of highly qualified unemployed people too. Many of them have little prospect at present of finding a job that pays similar to the one they lost. You just have to be unlucky and be the one made redundant, or work for a company that goes bust. If new jobs in your area aren't being created, then it doesn't matter how much qualifications you have. Sure, they could get a job at the minimum wage, but it's hard to support a family on that.

Should Irish unemployment rise to similar levels, those without jobs may have to hand back their house keys to the banks. Alot of people who remain in jobs (civil servents excluded) will have many sleepless nights, and will surely cut back on their consumption of electrical goods, nights out etc. Think what that will do to the economy and our migrant workforce (who sell you electrical goods, serve your meal and live in your investment property).


----------



## phoenix_n

darex said:


> Interesting article here from the US:
> 
> Property put on market in Sept 2005 at $1.1m. Didn't sell until Aug 2006 at $530,000 a drop of over 50%.
> 
> It demonstrates the perils of being too slow to react to a falling market.
> 
> Also interesting in that the fall happened over the period of only 1 year - much much faster that the 4 years that a housing slowdown is supposed to take.
> 
> http://www.realestatejournal.com/buysell/markettrends/20060824-corkery.html?refresh=on


 
Interesting read. The 'snap' in the irish market will be just as severe.


----------



## BigM

darex said:


> Interesting article here from the US:
> 
> Property put on market in Sept 2005 at $1.1m. Didn't sell until Aug 2006 at $530,000 a drop of over 50%.
> 
> It demonstrates the perils of being too slow to react to a falling market.
> 
> Also interesting in that the fall happened over the period of only 1 year - much much faster that the 4 years that a housing slowdown is supposed to take.
> 
> http://www.realestatejournal.com/buysell/markettrends/20060824-corkery.html?refresh=on


 
Extremely interesting - the 1st paragraph describes the current situation here exactly. Only a matter of time I suppose until the 2nd paragraph does too!


----------



## ivuernis

darex said:


> Also interesting in that the fall happened over the period of only 1 year - much much faster that the 4 years that a housing slowdown is supposed to take.


Rates did increase by 525% during that 12-mth timeframe from 1% to 5.25%, far faster and higher than anything the ECB has done.


----------



## gearoidmm

ivuernis said:


> Rates did increase by 525% during that 12-mth timeframe from 1% to 5.25%, far faster and higher than anything the ECB has done.



The overnight rate on loans by the fed increased by that much, sure, but most mortgages in the US are long term fixed (over 20-25years) and the rate on these only increased by approx 1%.

There has been an increase in so-called exotic loans in the US over the last few years (they would call a variable or tracker mortgage exotic) but they make up a much smaller proportion of mortgages than over here.


----------



## darex

ivuernis said:


> Rates did increase by 525% during that 12-mth timeframe from 1% to 5.25%, far faster and higher than anything the ECB has done.



Good point, but isn't it also true that actual rates paid by homeowners - even on variable mortages - have varied by much much less in percentage terms in the US than the Fed rises.


----------



## tententwenty

Persius said:


> Of course if you are a civil servant, then this isn't a big concern.



Well thats where a lot (most?) of the money from the property boom and celtic tiger generally has been channeled, into the civil service, largely for aspiring politicos and petty empire building, not industry and infrastructure where it should have gone. 

With pay increases at triple the rate of the private sector and continuous hiring going on, the question is, in the event of a collapse, will the previously "untouchable" civil service jobs become eminently touchable? Will we see mass layoffs of civil servants?


----------



## ivuernis

gearoidmm said:


> The overnight rate on loans by the fed increased by that much, sure, but most mortgages in the US are long term fixed (over 20-25years) and the rate on these only increased by approx 1%.
> 
> There has been an increase in so-called exotic loans in the US over the last few years (they would call a variable or tracker mortgage exotic) but they make up a much smaller proportion of mortgages than over here.


 
True, good point!


----------



## gearoidmm

No layoffs as that would be political suicide but expect to see the non-replacement of people who retire - already happening in the North East AFAIK.


----------



## ivuernis

darex said:


> Good point, but isn't it also true that actual rates paid by homeowners - even on variable mortages - have varied by much much less in percentage terms in the US than the Fed rises.


 
Yes, as gearoidmm already pointed out to me.


----------



## room305

tententwenty said:


> With pay increases at triple the rate of the private sector and continuous hiring going on, the question is, in the event of a collapse, will the previously "untouchable" civil service jobs become eminently touchable? Will we see mass layoffs of civil servants?



Not without the country grinding to a halt as a result of mass strikes. There will be a rise in income taxes before there will be large scale layoffs of civil servants.

The ridiculous benchmarking may be thrown out the window though.


----------



## tententwenty

room305 said:


> Not without the country grinding to a halt as a result of mass strikes. There will be a rise in income taxes before there will be large scale layoffs of civil servants.



You know, for the first time in my life, I am seriously considering emigration. Madness.


----------



## SteelBlue05

tententwenty said:


> You know, for the first time in my life, I am seriously considering emigration. Madness.


 
I cant believe when people say this, a lot of people seem to suggest they will emigrate if times get tough. I just wonder what are peoples values these days, is money and financial health highest on the list of values?

Personally, I value many other things than money and if I was to emigrate I would be leaving them all behind. No thanks.

I suppose this is "askaboutmoney" so what can you expect?


----------



## tententwenty

SteelBlue05 said:


> I cant believe when people say this, a lot of people seem to suggest they will emigrate if times get tough. I just wonder what are peoples values these days, is money and financial health highest on the list of values?
> 
> Personally, I value many other things than money and if I was to emigrate I would be leaving them all behind. No thanks.
> 
> I suppose this is "askaboutmoney" so what can you expect?


 True. But I have serious objections to my tax money being used to inflate a civil service that, it seems, cannot be removed or reduced without bringing the country to a crashing halt. Especially given that my experiences with these civil servants have been less than positive, as well as all sorts of stories about people sitting at their desks pushing paper around 10 to 4, who can't be fired. Better to put my money somewhere its not lining some lazy beaurocrat's pocket, maybe. And increasing income tax for that purpose. Nah, seeya.

Anyway, this is all wildly off topic, sorry, carry on!


----------



## liteweight

tententwenty said:


> stories about people sitting at their desks pushing paper around 10 to 4, who can't be fired. Better to put my money somewhere its not lining some lazy beaurocrat's pocket, maybe. And increasing income tax for that purpose. Nah, seeya.
> 
> Anyway, this is all wildly off topic, sorry, carry on!



As opposed to people sitting at their desks, pretending to work, while really posting on the current public sentiment..on AAM??


----------



## whathome

Penthouses in Santry look like they're being hit hard - ongoing price drops:

This one has dropped from €525,000 to €450,000

Old listing - €525,000:


New listing : €450,000:
[broken link removed]=

Interestingly, it's very similar to the one that Cecelia Ahern had trouble selling earlier in the year!
[broken link removed]

There are a lot of apartments that have been for sale in Santry for a long time - I wonder how long they can stay on the market before prices fall further.


----------



## Duplex

whathome said:


> Penthouses in Santry look like they're being hit hard - ongoing price drops:
> 
> This one has dropped from €525,000 to €450,000
> 
> Old listing - €525,000:
> 
> 
> New listing : €450,000:
> [broken link removed]=
> 
> Interestingly, it's very similar to the one that Cecelia Ahern had trouble selling earlier in the year!
> [broken link removed]
> 
> There are a lot of apartments that have been for sale in Santry for a long time - I wonder how long they can stay on the market before prices fall further.


 
People were only buying these places because they were going up in value.  They stop going up in value and the buyers drift away.  Prices will coast down until these flats look like value for money, and that's value for money a year or three from now.


----------



## Guest107

"Penthouse in Santry" sound ridiculous ...like "Exclusive Development in  Sallynoggin" sounds ridiculous


----------



## bearishbull

whathome said:


> Old listing - €525,000:


 
This link aint working.


----------



## Guest107

it did earlier and the page was from daft with teh asking just like WH said 

caches are funny, eh !


----------



## whathome

bearishbull said:


> This link aint working.


 
Daft hasn't been updated with new price yet anyway - 525k:
www.daft.ie/145729 

Down to 450k:
[broken link removed]=


----------



## whathome

And they said it could never happen in Ballsbridge, the heart of D4....

Asking price drop from €635,000 down to €600,000

New listing €600,000:
[broken link removed]

Original Listing €635,000 (second one in the list)


It really hurts for a vendor to lower their asking price - I haven't seen asking price drops on a scale like this since property prices fell in 2001. I'm only posting this one to prove that it's also happening in D4 but asking prices are dropping in most areas of Dublin.  If the price on a property was too high, over the past few years the rising market used to take care of it.  Now they just sit on the market until the vendor capitulates and drops the asking price.


----------



## bogwarrior

bearishbull said:


> I tend to wonder was it so bad here in 80's and is it so good now?. My father and mother (now in mid 50's)despite neither finishing school, or being particularly intelligent/entrepreneurial or getting any qualifications managed to afford a  decent house and live well with holidays abroad through the70's and 80's. Neither inherited anything and have had a good life on (for most of the time) a single  salary from a state employer. Nowadays the equivalent couple would need loads of qualifications and jobs paying way above average to afford the same house/lifestyle and neither could stay at home permenently like my mother did. thats the celtic tiger for ya!



interesting point, but you're forgetting the large-scale emigration we had back then, which kept the unemployment rate lower than it could have been.
And also, as another poster mentioned, a state job did offer considerable protection.  Out in the private sector, like today, the same job security wasn't there.  If you lost your job, you had to compete with the 10% of unemployed people + the 65,000 young people leaving school every year also looking for a job.
Materially we're far better off now, but there have been huge trade-offs - high property prices, longer commutes, 2 parents working (not out of choice).
But would you really want to go back to the 80's?


----------



## redo

These two recent examples should be a reminder to all sellers out there.  If you are selling your property, you have to stage it, or a least put some nice furnature in it.


----------



## Calina

bogwarrior said:


> interesting point, but you're forgetting the large-scale emigration we had back then, which kept the unemployment rate lower than it could have been.
> And also, as another poster mentioned, a state job did offer considerable protection.  Out in the private sector, like today, the same job security wasn't there.  If you lost your job, you had to compete with the 10% of unemployed people + the 65,000 young people leaving school every year also looking for a job.
> Materially we're far better off now, but there have been huge trade-offs - high property prices, longer commutes, 2 parents working (not out of choice).
> But would you really want to go back to the 80's?



Unemployment was closer to 17% if I recall correctly, even allowing for an exodus of between 50-80 thousand people every year. On the other hand, that dose of reality would affect the way you live your life in terms of how you manage money, how you view the future. There's a generation of people in Ireland who have no concept of how bad times can be. And some of them have huge credit card debts and a lot of them are mortgaged up to the hilt in new starter homes which are, very frequently, tiny one bedroomed apartments. 

That being said, we didn't have to trade off in that way. We created - ourselves - the high property prices by being willing -collectively - to endebt ourselves. It wasn't because we had more money that property prices went up - it was because we were willing to pay those prices. We bought into them because collectively (there were individuals who didn't agree) we convinced ourselves that you could never lose on property. That's not really a function of being materially well off, it's a function of not being intelligent about your money. There are some who'd say "well look how well people did for the last six years" and to them I would say that that will be offset by how badly people will do when the correction does come. Balanced sensible growth is far more sustainable than rampant growth followed by a sharp correction. Living the wanting to get rich quickly lifestyle brings with it the risk of getting poor quickly as well. Unfortunately a lot of people buying property in this country aren't all that clear on that front. 

Personally, given a choice between Duran Duran and Britney, I'd choose Duran Duran, but not at the price of no internet. But that's my call. 

Just one last thing - people have always bought houses and all those houses were not bought by state employees. Most of the most massive mortgages I see being taken out are not being taken out by state employees. Certainly a state job may be a good long term bet, but not all state employees earn enough to buy a house. 

But then, I wonder who does given that the average salary is X and the average house price is between 9 and 12 times X depending on whose house price surveys you read, and up to 16 times X in Dublin, again depending on whose price surveys you read.


----------



## Calina

One of the points that I'd value opinions on from potential purchasers is:

You are in the market for property. You feel it represents bad value for money. Which would you prefer - the vendor to do upgrade works costing X amount of money, or the vendor to knock X amount of money off the asking price?

I'm leaning towards the discount. Part of the reason I might be more tempted by an ex-investment property is that there is less of a former owner's personality to stamp out of it. 

I'm just interested because by and large, we're hitting a point where asking prices are starting to slide, anecdotally at least, and this has, in the past, brought about a situation whereby people do some work on a house to make it more attractive, when, perhaps it would be directly cheaper to them (in terms of selling faster and not getting caught for mortgage interest, for example) to discount the house.


----------



## room305

whathome said:


> If the price on a property was too high, over the past few years the rising market used to take care of it.  Now they just sit on the market until the vendor capitulates and drops the asking price.



A good sign that we may have hit the top of the market. The amount of talk from REAs about how things will pick up "when the buying season kicks in" and talk in the press of people holding off on selling until it does, leads me to believe that there will simply be too much of an oversupply for "buying season" to ever really kick in.

The only thing that could bolster the market now is an early pause of ECB rate rises - on the back of the Fed starting to slash rates to try and inflate their way out of the coming recession. If they pause, it may give a kick to the market. There may even be talk of the ECB starting to cut rates in tandem with the Fed (although I will be surprised if it actually does happen). This talk could see buyers emerging from the sidelines, hoping to buy "before prices start rising again".


----------



## BigM

room305 said:


> There may even be talk of the ECB starting to cut rates in tandem with the Fed (although I will be surprised if it actually does happen). This talk could see buyers emerging from the sidelines, hoping to buy "before prices start rising again".


 
Very surprised I'd say - Having just established their inflation-fighting credentials the ECB can't change direction until inflation is well under control.
Also, I heard from EAs that new developments coming to market this season are being far less aggressively priced than they had previously intended. If it's true it could mean that yer man who bought most of Ballsbridge will have to build much more than originally thought to make his money back!


----------



## whathome

room305 said:


> The only thing that could bolster the market now is an early pause of ECB rate rises


 
They are unlikely to pause - looks like two more ECB interest rate rises by December this year - taking us to 3.5%

http://www.bloomberg.com/apps/news?pid=20601101&sid=am1QwaDpwiqM&refer=japan


----------



## room305

whathome said:


> They are unlikely to pause - looks like two more ECB interest rate rises by December this year - taking us to 3.5%


 
I meant a pause after they hit 3.5%. It's not impossible. The US economy is tanking faster than anyone expected and although inflation risks remain, given a choice I'm betting the Fed will choose inflation over recession (initially at least). It will be hard for the ECB to keep raising when the Fed is cutting because the dollar will fall so sharply against the euro that it will severely hurt exports. If they can avoid it, I would say they will not cut rates but they may pause.

Alternatively, if Bernanke turns hawkish and start raising rates again leading the US into a recession (or even slowed growth), the price of commodities will tumble and this will give the ECB reason to pause.

I'm not saying anyone should buy a house (indeed I'm selling mine) but it's worth considering things from several angles. However, this is probably temporary and at some stage the Fed will have to hike rates even higher than they are now or kiss goodbye to the dollar.


----------



## whathome

room305 said:


> I meant a pause after they hit 3.5%.


 
Yes - I'd say they will pause at 3.5% - I was always doubtful about any rises after that.  The trek from 2.0% to 3.5% is more than enough to burst the housing bubble.  Even pausing at 3.0% would kill it IMO.


----------



## liteweight

Whathome...the apartment you posted is NOT in Ballsbridge! They are Dublin 2 I'd say but close to D4. Pembroke Square must be the name of the Apartment Complex (can't remember now but I've been in them)...it's not THE Pembroke Square.

I'd also be wary of the measurement given to be honest. The apartments I saw had a living room which was narrow at one end, which would be awkward to furnish. Even if they sell at 600K...believe me they are making a killing!


----------



## sandymount

liteweight said:


> Whathome...the apartment you posted is NOT in Ballsbridge! They are Dublin 2 I'd say but close to D4. Pembroke Square must be the name of the Apartment Complex (can't remember now but I've been in them)...it's not THE Pembroke Square.
> 
> I'd also be wary of the measurement given to be honest. The apartments I saw had a living room which was narrow at one end, which would be awkward to furnish. Even if they sell at 600K...believe me they are making a killing!



This block is on the D4 side of the canal (just about)


----------



## whathome

liteweight said:


> Whathome...the apartment you posted is NOT in Ballsbridge!


 
From the Daft Listing:
"192 Pembroke Square, Ballsbridge, Dublin 4"

Estate Agents!  Same is happening with the gasworks


----------



## soma

liteweight said:


> Whathome...the apartment you posted is NOT in Ballsbridge!



Nope it's Dublin 4 (only just over the canal, but it's D4). I used to live (rent) in that Apt block a few years back.


----------



## whathome

liteweight said:


> Whathome...the apartment you posted is NOT in Ballsbridge!


 
Well you can't say that The Sweepstakes is not in Ballsbridge...

Price Drop from €1.9 million to €1.75 million.

Nice write-up in the business post in March listing 1.9M:
[broken link removed]

Now reduced to 1.75M
[broken link removed]=

The key thing about these asking price drops is not whether they were overpriced to begin with - which some of them may have been. It's that falling asking prices on this scale is a recent phenomenon. A rising market used to result in over-priced property selling eventually. Not any more - hence price drops.


----------



## Guest107

room305 said:


> I meant a pause after they hit 3.5%. It's not impossible.



Absolutely, I could not see any possibility of a pause at 3.5% (seeing it beyond 4% ) ..and that was last month. Now I do.


> The US economy is tanking faster than anyone expected and although inflation risks remain, given a choice I'm betting the Fed will choose inflation over recession (initially at least). It will be hard for the ECB to keep raising when the Fed is cutting because the dollar will fall so sharply against the euro that it will severely hurt exports. If they can avoid it, I would say they will not cut rates but they may pause.


 I would add that the demand for commodities and oil will be affected by a marginal slowdown in the US, a 1% drop in US GDP (excluding housing) could knock €10 off  the barrel of oil and EU inflation would be affected immediately. 

As all commodites bar steel are $ denominated the inflation pressures  in the core EU could drop off rapidly as these commodity prices started to fall back.

In essence, and at a constant exchange rate with no dollar tanking factor the ECB could spot  a get out of jail card incoming.

Watch commodity futures like a hawk , particularly when lots of them expire at the end of september. 



> Alternatively, if Bernanke turns hawkish and start raising rates again leading the US into a recession (or even slowed growth), the price of commodities will tumble and this will give the ECB reason to pause.


No. Ben is not that secure in his job and there are US elections coming up in November . He will IMO  stop increasing the base rate and may even nudge it down a netch in the next month.....0.25% only .


I believe commodity futures will be heading south any day now .

A snifter of what is a complex situation to be see here

http://news.tradingcharts.com/futures/5/9/82569995.html


----------



## soma

whathome said:


> It's that falling asking prices on this scale is a recent phenomenon.



I think a take-away point is this. In previous years, the vendors would simply have held out and avoided price drops by waiting for the 'selling season' of september.

The fact that a few of them (and we must avoid jumping the gun, the amount of price drops is still relatively low) have dropped their asking prices rather than 'risk' the selling season, could be a telling lack of confidence in the future market by some parties IMO.


----------



## whathome

soma said:


> (and we must avoid jumping the gun, the amount of price drops is still relatively low)


 
Actually the amount of price drops is very high - I've resisted posting them so as not to become too much of a bore


----------



## Guest107

Again I reiterate that the basic problem in Ireland is overlending to construction and a commensurate massive oversupply together with a mind set amongst those who are under 35 and who have never experienced a recession that you cannot lose on property  . 

Muppetry reinforced by Muppetry and underpinned by Muppetry if you will. 

We have too many houses in many areas and the slowdown and price drops will occur because we finally _REALISE_ this fact .

External factors will only _HELP_ us to realise to this, ECB , US Economy or whatever .

But Reality can be such a  horrible thing


----------



## CelloPoint

I think the point was made before, but all this talk of stock markets and futures trading are only secondary issues. The primary factors affecting Irish property prices include a mixture of: oversupply, wage inflation relative to house inflation, demographics, market sentiment and poor value-for-money when one considers similar sized population centres/economies elsewhere.

Granted, the interest rate is an important external factor, but all external factors aside, I have no doubt there's enough internal pressure within Ireland to blow the gasket (there is no safety valve).


----------



## gearoidmm

2Pack said:


> No. Ben is not that secure in his job and there are US elections coming up in November . He will IMO stop increasing the base rate and may even nudge it down a netch in the next month.....0.25% only .



There is absolutely no chance of Ben Bernanke cutting interest rates next month.  He has set himself up as an inflation fighter and in contrast to his predescessor, he has suggested that he has inflation targets.  Core inflation in the US is way ahead of the target and does not look likely to fall in the next few months.  Any credibility he had as an inflation fighter would be destroyed if he cut rates next month and would precipitate a crash in the value of the dollar.  He would have to be crazy to reduce rates.

Look at the Australian example.  The housing market there is in the doldrums for the past year and despite that, the Aussie central bank raised interest rates recently to fight inflation knowing that it will cause more trouble.


----------



## Duplex

soma said:


> I think a take-away point is this. In previous years, the vendors would simply have held out and avoided price drops by waiting for the 'selling season' of september.
> 
> The fact that a few of them (and we must avoid jumping the gun, the amount of price drops is still relatively low) have dropped their asking prices rather than 'risk' the selling season, could be a telling lack of confidence in the future market by some parties IMO.


 
Good point; it does seem odd (in an Irish context that is) that sellers should be cutting asking prices so close to the 'selling season'.  It's also worth noting that asking prices at the zenith of the boom were an invitation to treat, the expected bidding war would often drive the eventual sales price beyond the initial asking price.  The change in sentiment in the market between spring and late summer is marked, to say the least.


----------



## BigM

soma said:


> The fact that a few of them (and we must avoid jumping the gun, the amount of price drops is still relatively low) have dropped their asking prices rather than 'risk' the selling season, could be a telling lack of confidence in the future market by some parties IMO.


 
Agreed. when I mentioned to 2 EA relatives of mine that I was planning on selling my invest property I was expecting the usual 'are you mad? don't ever sell property' response. Actual response: "I think you're right. Its money is made, you may as well take it now"


----------



## whathome

ECB interest rates rising from 2% to 3.5% is huge. 

It's the equivalent of rates rising from 8% to 14% in the old days. Interestingly, this is roughly the level of interest rate rise which preceeded the UK housing crash in the early nineties. See graph:

http://www.houseweb.co.uk/house/market/graph.html


----------



## liteweight

Sweepstakes is definitely Ballsbridge!

I don't think these price drops are a recent phenomena...in D4 at any rate. Estate Agents come in and say the place is worth a fortune and vendors believe them!! In some cases they got the price, in others, the price was dropped. Has been going on ever since I moved here 20 years ago.

I think the best place to look for evidence of price drops is in the new builds, when they are being sold on. Purchasers who bought at an inflated price cannot afford to drop price, so real evidence would be to see them being forced into it. A vendor who has lived in his property/let it for some years can afford to drop the price if he/she has other plans for the money! 

A family friend recently sold his investment properties. His attitute was 'put it out there and see if it flies', he dropped his price on some properties but sold others at the inflated price!! The point is, the prices were inflated to begin with and he knew it so had no problem dropping it at a later date.


----------



## whathome

liteweight said:


> I don't think these price drops are a recent phenomena...in D4 at any rate.


 
They are a recent phenomena - I've been checking out property on myhome for years (in between doing other things!) - haven't seen it on this scale since 2001.


----------



## Duplex

gearoidmm said:


> There is absolutely no chance of Ben Bernanke cutting interest rates next month. He has set himself up as an inflation fighter and in contrast to his predescessor, he has suggested that he has inflation targets. Core inflation in the US is way ahead of the target and does not look likely to fall in the next few months. Any credibility he had as an inflation fighter would be destroyed if he cut rates next month and would precipitate a crash in the value of the dollar. He would have to be crazy to reduce rates.
> 
> Look at the Australian example. The housing market there is in the doldrums for the past year and despite that, the Aussie central bank raised interest rates recently to fight inflation knowing that it will cause more trouble.


 
If the Fed cuts possibly next year, the market will push long term rates higher upping the cost of long term debt (fixed rate mortgages).  A weaker dollar might ease the pain of the twin deficits but it would push up the cost of imports.  The Fed is in a pickle.


----------



## room305

gearoidmm said:


> There is absolutely no chance of Ben Bernanke cutting interest rates next month.  He has set himself up as an inflation fighter and in contrast to his predescessor, he has suggested that he has inflation targets.  Core inflation in the US is way ahead of the target and does not look likely to fall in the next few months.  Any credibility he had as an inflation fighter would be destroyed if he cut rates next month and would precipitate a crash in the value of the dollar.  He would have to be crazy to reduce rates.



You are dreaming if you think Bernanke is an inflation fighter. Jeffrey Lacker yes, but not Bernanke. I doubt he will cut rates next month but another month where the core rate comes in below expectations will give him reason to continue to pause. Once economic indicators point to a further slowing of the US economy he will have all the ammo he needs to start cutting rates.

Someone who has previously said "_people know that inflation erodes the real value of the government's debt and, therefore, that it is in the interest of the government to create some inflation_" does not sound like much of an inflation fighter to me.

Like Greenspan, he has talked a lot about fighting inflation but his real fear is deflation.


----------



## liteweight

whathome said:


> They are a recent phenomena - I've been checking out property on myhome for years (in between doing other things!) - haven't seen it on this scale since 2001.



There's a whole world out there you know...just waiting for you!!


----------



## BigM

whathome said:


> They are a recent phenomena - I've been checking out property on myhome for years (in between doing other things!) - haven't seen it on this scale since 2001.


 
I agree - while there have been price drops over the last few years in the area they've been mostly isolated incidents where the initial price was ludicrously high (and property still overvalued even at its reduced price! )


----------



## Raskolnikov

room305 said:


> I'm not saying anyone should buy a house (indeed I'm selling mine) but it's worth considering things from several angles.


Is this is your PPR and are you selling primarily because you think there'll be a price correction?

If so, I hope you realise, that attitudes like this are the reason why we have a property bubble.


----------



## whathome

liteweight said:


> There's a whole world out there you know...just waiting for you!!


 
lol - it's more fun here 

here's another new build priced below the builder. It doesn't look like it was ever lived in: €280,000, it's on the top floor and south facing
[broken link removed]

Builders listing - From €300,000
[broken link removed]=


----------



## cjh

whathome said:


> lol - it's more fun here
> 
> here's another new build priced below the builder. It doesn't look like it was ever lived in: €280,000, it's on the top floor and south facing
> [broken link removed]
> 
> Builders listing - From €300,000
> [broken link removed]


 

Coule this be a flipper worried they're going to be stuck with the apartment?


----------



## BigM

Still - don't know what price was originally paid for the apt (penthouse indeed!!). If it was in the early phases then 280k could still be a decent profit?


----------



## delboy159

Whathome - Thats not a like for like comparison on the apartments.  You can't compare different apartments and then quote a price drop.  You may be correct - but you may not.

Besides the house I bought in November 2004 was 20% below the original asking and 10% below what the neighbours "thought/believed" it had sold for...  The seller panciked and felt the market was on the way down (we made our offer at end Nov - end of Autumn season)...  So price drops are not unusual at any time in a property market... Besides there are many crazy prices on properties at the moment.  I know of 2 people in my estate who couldn't believe what houses were selling for - they popped their houses on the market for 10% above the crazy price with the attitude of - if someone is fool enough to buy at that price we'll take their money.  Both houses didn't sell - not because the market was sluggish, but because they had priced themselves out of the market!


----------



## whathome

BigM said:


> Still - don't know what price was originally paid for the apt (penthouse indeed!!). If it was in the early phases then 280k could still be a decent profit?


 
Yep - I'd say there's still a profit if it's a flipper.  Interesting that they are undercutting the builder by 20k , it's supposed to be one of the desirable apartments.


----------



## conor_mc

Raskolnikov said:


> Is this is your PPR and are you selling primarily because you think there'll be a price correction?
> 
> If so, I hope you realise, that attitudes like this are the reason why we have a property bubble.


 
So it's okay for the bulls to make a killing on the way up, but the bears have to be sensible and not endanger the market?

It's a free market and I don't think you should be passing judgement on room305 for selling up.


----------



## BigM

conor_mc said:


> So it's okay for the bulls to make a killing on the way up, but the bears have to be sensible and not endanger the market?
> 
> It's a free market and I don't think you should be passing judgement on room305 for selling up.


 
Surely it's attitudes like room305's that will end the bubble, not create it!?


----------



## whathome

delboy159 said:


> Both houses didn't sell


 
The point is - they used to sell eventually.  I've seen so many properties over the years that were WAY overpriced and I said - "That will never sell".  Then after a few months of rising prices it looks cheap to someone and it's SOLD without dropping the asking price   So the market has changed, now more people are dropping their asking price in order to sell.


----------



## delboy159

Whathome - my point is that there is no evidence that the market has changed.............  The market is still at the level of 2/3/4 months ago.  You are saying that the market not going that further crazy 10% is a sign of change - no - the further crazy increase "is the change"

But your opinion/attitude that a 10% increase is not change, that it is the norm (and you would be a Bear - true), shows how the Irish (even an irish Bear) sees increases as "the norm"...  Which further feeds into how big a bubble we are in!


----------



## liteweight

whathome said:


> Yep - I'd say there's still a profit if it's a flipper.  Interesting that they are undercutting the builder by 20k , it's supposed to be one of the desirable apartments.



If it's a flipper they have to sell or else become liable to purchase, so the price drop would ensure a quick sale.

If the owner is selling, then it's no longer a new build and the purchaser would have to pay stamp duty. By dropping the price, they still attract FTBs (under threshold) and STB who would have to pay stamp duty. If a STB/owner occupier, buys from the builder, they get the apartment with no liability for stamp duty as long as its 125sq.mt. or under.


----------



## whathome

delboy159 said:


> But your opinion/attitude that a 10% increase is not change, that it is the norm (and you would be a Bear - true), shows how the Irish (even an irish Bear) sees increases as "the norm"... Which further feeds into how big a bubble we are in!


 
Moving from 10% growth to 0.1% growth is a change...even if prices never dropped...which I think they will do in time.


----------



## room305

Raskolnikov said:


> Is this is your PPR and are you selling primarily because you think there'll be a price correction?



It is my PPR. I have already detailed my reasons for selling earlier on this thread. At the time I still thought there was potential for further increases but thought I might as well try and get out ahead of the top. Now I'm not so sure, there is some (albeit anecdotal) evidence of inventory build-up and the sheer number of asking price drops are significant. So we may well have seen the top. Either way, my reasons remain the same.



Raskolnikov said:


> If so, I hope you realise, that attitudes like this are the reason why we have a property bubble.



Having dealt with nothing but unbearable smugness and obscene posturing from people who managed to jump on the gravy train at right time (or whose children had the fortitude to be born in a certain parts of Dublin), I'd love to know the reasoning behind this statement. I have always been quite prudent with my money. I'm selling because of the actions of _other_ people. If it wasn't for them I mightn't sell for another year or possible two.


----------



## Firefly

If people start selling their investment properties as interest rates rise (leading to a fall in house prices) will this in turn not lead to rising rents as the number of houses for rent falls??
Firefly


----------



## cjh

Firefly said:


> If people start selling their investment properties as interest rates rise (leading to a fall in house prices) will this in turn not lead to rising rents as the number of houses for rent falls??
> Firefly


 
Many of the investor/speculator properties weren't rented anyway....


----------



## darex

Firefly said:


> If people start selling their investment properties as interest rates rise (leading to a fall in house prices) will this in turn not lead to rising rents as the number of houses for rent falls??
> Firefly



If the house is sold to an investor then the number of houses to rent stays the same.
If the house is sold to a FTB then the number of people renting falls

 - either way the ratio of renters to investment properties stays the same and hence rents shouldn't be impacted.


----------



## Persius

One of the many links on this thread was to an article by an american economist talking about the effects of a house price crash. He made the point that rents could rise in such a scenario. It was based on the premise that investors defaulted on their mortgage and the banks siezed the properties. The properties, which were previously available for rent, were boarded up as the bank tried to sell them. As there is a crash, it is not easy to sell them, so they remain boarded up a long while, thus reducing the amount of rental stock out there.

However this scenario doesn't seem too likely to me in an Irish context. Some poster mentioned a bank scheme whereby they froze your mortgage and rented your house back to you at a much lower rate. I think banks will be reluctant to sieze properties, and look for other methods. Investors who try to sell themselves will either sell to another investor (meaning the property is still available to rent) or to an occupier (meaning that some other property will be freed up to rent).

Edit: As cjh says, if the property was originally sitting idle, it may be rented out by the new owner (or existing owner) thus increasing the rental supply and hopefully (for tennants) reducing rents.


----------



## BigM

darex said:


> If the house is sold to an investor then the number of houses to rent stays the same.
> If the house is sold to a FTB then the number of people renting falls
> 
> - either way the ratio of renters to investment properties stays the same and hence rents shouldn't be impacted.


 
Plus there's curently serious spare capacity as outlined earlier in this thread. Also not all investors bought in the last 10years. The long-term landlords can easily afford to ride out any price falls without getting hurt financially...


----------



## CelloPoint

Persius said:


> One of the many links on this thread was to an article by an american economist talking about the effects of a house price crash. He made the point that rents could rise in such a scenario. It was based on the premise that investors defaulted on their mortgage and the banks siezed the properties. The properties, which were previously available for rent, were boarded up as the bank tried to sell them. As there is a crash, it is not easy to sell them, so they remain boarded up a long while, thus reducing the amount of rental stock out there.
> 
> However this scenario doesn't seem too likely to me in an Irish context. Some poster mentioned a bank scheme whereby they froze your mortgage and rented your house back to you at a much lower rate. I think banks will be reluctant to sieze properties, and look for other methods. Investors who try to sell themselves will either sell to another investor (meaning the property is still available to rent) or to an occupier (meaning that some other property will be freed up to rent).



It's not as black and white as "Mass sell-off => demand for rental property increases".

There are numerous other factors to be taken into account, including (but not limited to): immigrant emigration, emigration by Irish people (especially young people and those lured back to Ireland on promises of gold-lined celtic tiger streets), oversupply, pre-2002 hangers-on refusing to sell as rental income still covers their mortgage, etc.


----------



## liteweight

darex said:


> If the house is sold to an investor then the number of houses to rent stays the same.
> If the house is sold to a FTB then the number of people renting falls
> 
> - either way the ratio of renters to investment properties stays the same and hence rents shouldn't be impacted.



You can't have it every way i.e. investors rushing to sell but others rushing in to buy what they're off loading!!

If investors begin to sell off then renters might well find themselves unable to get suitable accommodation, especially close to the city! IMO this will lead to an increase in rents. 

Not all FTBs are currently renting...some live at home until they buy, in order to save money!  Furthermore, of those who do rent, interest rate hikes may well put buying a property out of their reach for the forseeable future.


----------



## soma

liteweight said:


> If investors begin to sell off then renters might well find themselves unable to get suitable accommodation



_You're making the assumption that the investors will have someone to sell *to*.._


----------



## BigM

Of course if prices fall enough, some recent investors may have to hang onto their property. It could be easier to fund the shortfall each month than to realise the loss.


----------



## BigM

soma said:


> _You're making the assumption that the investors will have someone to sell *to*.._


 
You'll always find someone to sell to - if the price is right (for them, not you! )


----------



## conor_mc

liteweight said:


> You can't have it every way i.e. investors rushing to sell but others rushing in to buy what they're off loading!!
> 
> 
> 
> But if somebody sells, then somebody has to be the buyer.
> 
> To be honest, it'll be horses for courses if it all comes crashing down anyway.
> 
> Should we hit negative equity territory, some investors will be able to suffer a loss of tens of thousands by selling up. Others may not be able to do so and will have to subsidise their mortgage to the tune of a few hundred a month because they can't find the cash to clear the mortgage.
Click to expand...


----------



## bearishbull

bogwarrior said:


> interesting point, but you're forgetting the large-scale emigration we had back then, which kept the unemployment rate lower than it could have been.
> And also, as another poster mentioned, a state job did offer considerable protection. Out in the private sector, like today, the same job security wasn't there. If you lost your job, you had to compete with the 10% of unemployed people + the 65,000 young people leaving school every year also looking for a job.
> Materially we're far better off now, but there have been huge trade-offs - high property prices, longer commutes, 2 parents working (not out of choice).
> But would you really want to go back to the 80's?


I doubt things were really as bad as people claim, there was lots of cash around as evidenced by off shore accounts,bogus non resident accounts etc, a lot on dole did work for cash in hand and lots of cash was sent home from those working in uk usa etc. There was always the option of headin hundred miles across the water to uk where economy was very strong.We havent known real tough times in this country in many many decades.


----------



## BigM

bearishbull said:


> I doubt things were really as bad as people claim, there was lots of cash around as evidenced by off shore accounts,bogus non resident accounts etc, a lot on dole did work for cash in hand and lots of cash was sent home from those working in uk usa etc. There was always the option of headin hundred miles across the water to uk where economy was very strong.We havent known real tough times in this country in many many decades.


You're wrong there. things were just as bad as people claim. I'm one of the youngest in my family and I saw how hard it was for my older brothers and sisters to get anywhere at all. And all the while paying huge taxes? There was a lot of cash in a very small number of pockets but mostly there were just lots of empty pockets.


----------



## liteweight

soma said:


> _You're making the assumption that the investors will have someone to sell *to*.._



No, not making any assumptions...was simply replying to another poster who suggested what might happen if people sell!!


----------



## bearishbull

Does anyone think this thread has become too big? why not restart the thread as a new thread "current sentiment 2 -september 2006" and start it on friday 1st september. Its a bit offputting for someone who hasnt been reading the thread yet or havent read it in long while , lots of stuff gets repeated so the new thread would not be lacking in pertinent info after a few dozen posts and old thread can be referenced.


----------



## dontaskme

bearishbull said:


> I doubt things were really as bad as people claim, there was lots of cash around as evidenced by off shore accounts,bogus non resident accounts etc, a lot on dole did work for cash in hand and lots of cash was sent home from those working in uk usa etc. There was always the option of headin hundred miles across the water to uk where economy was very strong.We havent known real tough times in this country in many many decades.


 
[broken link removed]

From 1981 to 1988 housing completions declined every year from almost 30,000 to under 20,000 (and how many of those were in Tallaght?). That's a lot of unemployed or underemployed plasterers, carpenters. bricklayers etc.

If there was as much cash as you say, why was it not chasing property?


----------



## darex

liteweight said:


> You can't have it every way i.e. investors rushing to sell but others rushing in to buy what they're off loading!!
> 
> If investors begin to sell off then renters might well find themselves unable to get suitable accommodation, especially close to the city! IMO this will lead to an increase in rents.



If investors sell off then they have to sell to someone!!!!

That person is either a renter or an owner or another investor. In all cases the ratio of investment property to renters remains constant.


----------



## a_greenspan

I can't believe some people are actually looking back to the 80's as an era they would prefer compared to now - are you mad??!  I was only a boy but I distinctly remember a whole air of depression over the country.  If you want to experience the 80's again, move to Romania or Poland - mass emigration, unemployment running at 20%.  Ok, so you won't get the complete experience as mortgage rates in Romania and Poland are quite low (higher than eurozone but still low).  So to get the complete experience, go into your bank in Romania and tell them that you'd like them to raise their interest rates to 20%.  Then you will be living in the 80's


----------



## liteweight

darex said:


> If investors sell off then they have to sell to someone!!!!
> 
> That person is either a renter or an owner or another investor. In all cases the ratio of investment property to renters remains constant.



Oops! I meant to say you can't have investors selling and other investors rushing in to buy what they are off loading!


----------



## bearishbull

dontaskme said:


> [broken link removed]
> 
> From 1981 to 1988 housing completions declined every year from almost 30,000 to under 20,000 (and how many of those were in Tallaght?). That's a lot of unemployed or underemployed plasterers, carpenters. bricklayers etc.
> 
> If there was as much cash as you say, why was it not chasing property?


It was probably chasing property in uk! and then a lot probably got burned in the crash in early 90's! Many smart people were buying property in the 80's, i know of several, the rent paid the mortgage then.
not saying things were great but just that they werent as bad as many commentators would have you beleive. you'd think it was a third world country here in the eighties the way some middle class "couldnt get a great/perfect job so it was a disaster" commentators would have you beleive.


----------



## Guest126

Ireland 80s v Romania/Poland

Except that Romania/Poland of today probably have far superior infrastructure (in urban centres) than Ireland has in 2006?


----------



## Lumpsum

a_greenspan said:


> I can't believe some people are actually looking back to the 80's as an era they would prefer compared to now - are you mad??! I was only a boy but I distinctly remember a whole air of depression over the country. If you want to experience the 80's again, move to Romania or Poland - mass emigration, unemployment running at 20%. Ok, so you won't get the complete experience as mortgage rates in Romania and Poland are quite low (higher than eurozone but still low). So to get the complete experience, go into your bank in Romania and tell them that you'd like them to raise their interest rates to 20%. Then you will be living in the 80's


 
Wad it really like that? I was a bit more than a boy and had a great 80s.  All I had was a job, but back then that was all you needed to feel reasonably prosperous.  20 per cent unemployment meant 80 per cent had jobs (and whisper it, but some of those 20 per cent were earning a few bob on the side too). A job in your 20s meant you could certainly afford a house of some sort - not like now. Helped dispel any "air of depression".

No flames!  I'm not dismissing the unemployment, the misery of emigration.  I remember the sadness and anger among my cohort of friends over being split up by involuntary emigration, and the longing of those abroad to get home.  The good news is that most who wanted to were able to come home to the more prosperous 90s. 

Being , er, older, I don't like the blanket dismissal of the 80s as being the period when Ireland resembled Soviet Russia (or modern Russia).  Sure the economic stats looked at now were pretty shocking, but many (most?) people were able to work and  build careers and lives. 

All of which is way off topic.  In response to an earlier poster, most people were not "chasing property" back then.  A ppr was plenty to be getting along with....


----------



## bearishbull

CapitalCCC said:


> Ireland 80s v Romania/Poland
> 
> Except that Romania/Poland of today probably have far superior infrastructure (in urban centres) than Ireland has in 2006?


I have actually considered going on the social welfare here for a year or two and heading off to live in one of these eastern european cities without having to work. the social welfare here pays more(8500euro) than average salary in many of these places.


----------



## Firefly

Things were really that bad, I was there but couldn't afford to buy the T shirt! There was a photo in the Irish Times in 1986 of the 1st Abrakedabra opening on Baggott St with a queue of about 15 men and women in suits applying for positions. I remember ads in the paper for handymen "no job too small"...know it's off topic, but this is a banana republic and the sooner people recognise this the better!


----------



## CelloPoint

bearishbull said:


> I have actually considered going on the social welfare here for a year or two and heading off to live in one of these eastern european cities without having to work. the social welfare here pays more(8500euro) than average salary in many of these places.



That would be fraud. You must be resident in Ireland. You can however go on a holiday for about 2 weeks without social welfare minding.

How will you sign on each month if you're living abroad? You'd have to travel home each month to present yourself.

I think athletes can go on the dole and spend extended periods of time abroad (once they are approved). So unless you're an athlete, forget about it.


----------



## bearishbull

CelloPoint said:


> That would be fraud. You must be resident in Ireland. You can however go on a holiday for about 2 weeks without social welfare minding.
> 
> How will you sign on each month if you're living abroad? You'd have to travel home each month to present yourself.
> 
> I think athletes can go on the dole and spend extended periods of time abroad (once they are approved). So unless you're an athlete, forget about it.


I didnt say it was unemployment assistance, i know people claiming disability benefit for "depression" and "anxiety" who havent been asked to attended the social welfare or a state doctor for years. Theres no way to prove someone who claims to be depressed/anxious isnt actually depressed. one friend had panic attacks from experimenting with illegal substances,he went on disability benefit and took a year off from college, he was fine after a few months and went travelling with  some savings and the disability allowance.


----------



## Lumpsum

That still seems like fraud to me.....


----------



## bearishbull

Lumpsum said:


> That still seems like fraud to me.....


Ah rehabilitation he claimed!   very hard and expensive to prove these things. although in uk they are cracking down on disability allowance as around 2 million people claim it! in one ex mining town in wales with high unemployment 22% of the population are on disability allowance!


----------



## wolfie

http://www.askaboutmoney.com//showthread.php?t=35498


----------



## dontaskme

bearishbull said:


> I didnt say it was unemployment assistance, i know people claiming disability benefit for "depression" and "anxiety" who havent been asked to attended the social welfare or a state doctor for years. Theres no way to prove someone who claims to be depressed/anxious isnt actually depressed. one friend had panic attacks from experimenting with illegal substances,he went on disability benefit and took a year off from college, he was fine after a few months and went travelling with some savings and the disability allowance.


 
Carpal tunnel syndrome allows you to register as hanidicapped in California, if you type a lot maybe you could try something like that.

And, to get back on topic, if the cash was chasing property in the Uk, then it was not in this country. Both capital and the workforce are much freer to move now as a result of the EU and this has a direct effect on the Irish property market.

And another side effect of Europe, you can transfer unemployment benefit (but not unemployment assistance) to another EU15 country (not sure about the newbies) for up to 13 weeks.


----------



## cjh

Minister Noel Ahern has said he thinks property speculators should 'be taxed out of existance' and he will be talking to Minister Cowen about the issue. I can't add the link because it's on the Irish Times premium site.....


----------



## tententwenty

cjh said:


> Minister Noel Ahern has said he thinks property speculators should 'be taxed out of existance' and he will be talking to Minister Cowen about the issue. I can't add the link because it's on the Irish Times premium site.....


Have to say I am solidly behind that idea.


----------



## gearoidmm

He's talking about raising capital gains tax on investors/speculators.  This could potentially precipitate a crash due to a very large number of properties coming on the market at the one time.

It's too late for anything like this - any intervention now will only make the crash longer and harder


----------



## Calina

cjh said:


> Minister Noel Ahern has said he thinks property speculators should 'be taxed out of existance' and he will be talking to Minister Cowen about the issue. I can't add the link because it's on the Irish Times premium site.....



One of the big problems this country had when I came back in 1999 was a lack of rental accommodation. So the taxing of people who hold property for investment purposes, be it for speculative or service provision will have to be approached carefully as one of the sidesteps around Part VI is sale of the property. Remove sale of property as an option there and you'll soon have the capital appreciation speculators out of the equation because an illiquid asset will become even more illiquid. 

I'd like to see a sliding time scale which means the sooner you sell the property after purchase incurs a higher CGT, plus the property not having been registered by the PRTB as rented would also incure a higher CGT or otherwise registered as holiday home. This is something to consider for the medium term because any kneejerk reaction will almost definitely tip the balance in the property market as a whole leading to a fall off in tax take from stamp duty, and not necessarily bring it in via CGT. Plus, check out the location of some of those holiday homes (don't let it be a loophole whereby Lucan suddenly becomes the holiday destination numero uno in the country).

But it's not going to happen. Things are far too precipitous now and I don't think any politician wants to be the one directly responsible for tipping the balance right now.


----------



## Calina

gearoidmm said:


> He's talking about raising capital gains tax on investors/speculators.  This could potentially precipitate a crash due to a very large number of properties coming on the market at the one time.
> 
> It's too late for anything like this - any intervention now will only make the crash longer and harder



Not sure I agree with that last comment. It may bring about the crash rather sooner which could in the medium to long term be a good thing. Logically I don't see why it would make the crash last longer. As it stands, the whole soft landing theory depends on a long drawn out process where salaries rise to a reasonable level vis a vis property values. And I can't see that happening.


----------



## thewatcher

gearoidmm said:


> It's too late for anything like this - any intervention now will only make the crash longer and harder


 
They won't actually do it,it just sounds good coming up to an election and will maybe sooth some of the anger on the doorsteps.It's not like property speculation(in effect all the people who've bought a second house in the last few years and kept their original one are property speculators) hasn't been going on for the last few years,where was the "concern" then !


----------



## whathome

cjh said:


> Minister Noel Ahern has said he thinks property speculators should 'be taxed out of existance' and he will be talking to Minister Cowen about the issue. I can't add the link because it's on the Irish Times premium site.....


 
There's a separate thread dedicated to the discussion on the govt moving against speculators here:
http://www.askaboutmoney.com/showthread.php?t=34984


----------



## redo

Calina said:


> I'd like to see a sliding time scale which means the sooner you sell the property after purchase incurs a higher CGT, plus the property not having been registered by the PRTB as rented would also incure a higher CGT or otherwise registered as holiday home.


Exxxxcellent (in a Monty Burns accent)


----------



## dontaskme

cjh said:


> Minister Noel Ahern has said he thinks property speculators should 'be taxed out of existance' and he will be talking to Minister Cowen about the issue. I can't add the link because it's on the Irish Times premium site.....


 
Got the following quotes from the Examiner breaking news:

*Mr Ahern said up to 90,000 homes could be built this year but it didn’t seem to be curbing the cost of housing.*

*“There is something wrong if the prices keep going up,” he said. “Some form of taxation would help, as output alone does not seem to keep prices down.*

*“There are people buying land in the short term, not to build on it but to sit on it for a few years before selling on to some developer.*

*“There are people buying houses and apartments off the plans and never taking the keys but selling on the contract. *
http://adserver.adtech.de/adlink|3.0|257|1101765|0|170|ADTECH;loc=300;misc=556771632984194​*“I don’t think those people are giving any added value to the whole issue. I personally would like to see those people taxed out of existence.*

*“People who see the demand move in to make the fast buck. They should be playing the commodities market in the London Stock Exchange on oil or cocoa beans or whatever, rather than with houses.”*

I would suggest however that those who purchase off the plans are providing liquidity to the market as well as providing cash flow to the developer. I don't know any developers but I would imagine building a number of houses or apartments requires a lot of cash to be paid upfront, before the revenues start coming in.

If a developer does not have cash to continue a development and no-one wants to buy off the plans, what do you end up with? Developers declaring bankruptcy and half-finished developments that no-one will touch with a barge pole.


----------



## RiceCakes

My vote is worth the same as any developers. Thankfully we live in a democracy.

While its great to be getting the brown bags from the developers..the people on the doorsteps are the ones that put the TD's into their nice cushy roles..and I bet they are getting feedback on the doorsteps that many voters are not happy curently about house prices.

Happy people don't vote in the same number unhappy people do - I bet a lot of FTB's(or wannabe FTB - all our votes count the same remember!!) are giving the FF'r canvassers a hard time on the door steps.

A tax on investors, like in the German market would go down very well with me to be honest.


----------



## room305

RiceCakes said:


> A tax on investors, like in the German market would go down very well with me to be honest.



Charlie McCreevy announced an anti-speculative tax in June 2000. Either Noel Ahern has forgotten or he is pretending he had. For some reason - wonder why?  - Fianna Fail never went ahead with it.

http://www.finance.gov.ie/viewdoc.asp?fn=/documents/news/june/mcc659.htm



> *Anti-Speculative Tax.*
> The Bill introduces a new 2% Anti-Speculative tax which is designed to curb short-term speculative demand for housing. The new tax will apply for 3 years to second and additional residential properties acquired on or after 15 June. (As with stamp duty there will be transitional provisions for persons who had entered into written contracts before 15 June to buy a residential property.) An individual’s principal private residence will be exempt. However, where an individual changes principal private residence on/after 15 June while retaining ownership of his/her previous residence, the latter property will come within the scope of the tax, even if owned before 15 June. The tax will not apply to residential properties received through gift or inheritance where the property was owned by the donor before 15 June 2000. Where a property is built on land which was acquired before 15 June 2000 no tax will apply






> The Minister indicated that he will be bringing the Bill to the Dail next week with a view to having it passed before the Summer recess.


----------



## Guest107

Funny that, the market then came off the boil from about september 2000 to march 2002 and the specuvestors were kept out by Bacon . Then the builders squealed loudly in the FF tent and McCreevy scrapped Bacon entry conditions and forgot all about exit taxing the feckers as he had planned .

Government statistics in 2000 , 2001 and 2002 clearly show this softness.

p31 of 73 in 2000

p31 of 67 in 2001

and 

p34 of 72 in 2002 ( this shows the whole soft landing 2000-2002 period ) 

And then it took off in late spring 2002 when the swoooosh of cheap post 911 money hit the banks and was lent out to non Baconated specuvestors but as ye can see house prices dec 2000 - dec 2001 were static .

That period in 2000 - 2002 was our _soft landing_ from the 1990s , pretty much all that  happened since 2002 was simply insanity, watch it evaporate


----------



## z108

Duplex said:


> I think the Fed will hold for now and maybe cut next year in response to emerging signs of a recession.  (Interest rates fall during a recession.)  I think that low interest rates wont sort out the structural problems in the US economy, in the same way low rates failed to prevent a deflationary recession in Japan.



A question,
Whats the meaning of a structural problem ?


----------



## jpd

too much spending, not enough saving


----------



## Duplex

sign said:


> A question,
> Whats the meaning of a structural problem ?


 

Pretty much what JPD says above.

*L*ast year America spent 57 percent more than it earned on world markets. That is,  imports were 57 percent larger than exports.

In 2005, spending on home construction as a percentage of gross domestic product reached its highest level in more than 50 years. Last year the personal savings rate fell below zero for the first time since 1933. 


US manufacturing has lost lost 2.9 million jobs, over the past few years almost 17% of the manufacturing work force. The wipe out is across the board. Not a single manufacturing payroll classification created a single new job. 

Communications equipment lost 43% of its workforce. Semiconductors and electronic components lost 37% of its workforce. The workforce in computers and electronic products declined 30%. Electrical equipment and appliances lost 25% of its employees. The workforce in motor vehicles and parts declined 12%. Furniture and related products lost 17% of its jobs. Apparel manufacturers lost almost half of the work force. Employment in textile mills declined 43%. Paper and paper products lost one-fifth of its jobs. The work force in plastics and rubber products declined by 15%. Even manufacturers of beverages and tobacco products experienced a 7% shrinkage in jobs. 

U.S. consumers who once saved an average of 8% of their take-home pay now spend about 1% more than they earn. Payments on personal debt for such things as credit cards and student loans once totaled less than 6% of after-tax income. Now, at its highest level in more than a decade, that figure is at nearly 8%, and still rising. 

Incomes growth has been static since 2000.

The deficits are trade and current account are crippling.

And their housing bubble is bursting.

The yield curve is inverted, an indicator that has always proceeded a recession in the US.


The US economy is a basket case in short and Ireland is heavily reliant on this basket case.   Even if we didn't have our own massive housing bubble we would be in trouble.  Interesting times.


----------



## Hibernicatio

What is the yield curve exactly?  How is it measured and what are the implications of good/bad yield curve?


----------



## dontaskme

Hibernicatio said:


> What is the yield curve exactly? How is it measured and what are the implications of good/bad yield curve?


short term interest rates are usually lower than long term interest rates.

when the opposite is true, the yield curve is said to be inverted.

http://en.wikipedia.org/wiki/Yield_curve


----------



## Duplex

Hibernicatio said:


> What is the yield curve exactly? How is it measured and what are the implications of good/bad yield curve?


 
The Yield curve is in essence what trillions of dollars are saying will happen to the US economy over the next decade. This link explains Yield Curves. 

http://fixedincome.fidelity.com/fi/FIHistoricalYield?refpr=obrfi12


----------



## Hibernicatio

Thanks for the insight.  One more thing I did not know yesterday.


----------



## Persius

Interesting articles. From the fidelity one


> Inverted yield curves are rare. Never ignore them. They are always followed by economic slowdown -- or outright recession -- as well as lower interest rates across the board


 
So if interest rates start going lower, that is good news for property purchasers and means that people will be able to borrow more again. I suppose the question is how this is offset by the rising unemployment, that one would expect in a recession. Then we need to factor in the local supply and demand picture. And of course "sentiment" (the starting point of the thread).

It all looks very complicated, and I'm not sure how anyone can predict Irish house price developments in any direction with a high degree of certainty. I suppose a worst case scenario would be US recession and a resulting rise in unemployement in Ireland (which is highly dependant on the US), but a strong Eurozone economy (which is somewhat less dependant on the US) and Eurozone inflation, resulting in high interest rates in Ireland. But, to be honest it's hard to see the Eurozone economy remaining strong if companies can't export to the US. 

I suppose if energy prices keep increasing, the ECB could say we have an inflation problem and increase interest rates, even if this results in a recession. But if this affected large Eurozone countries, I'm sure the politicians would move quickly to change the ECB's mandate or defintion of inflation (to exclude external energy costs). 

All in all, I think the world economy has become dependant on low interest rates, and I can't see how this will change. Predictions of ECB rates rising to 6 or 7% or more just don't seem realistic to me. What does this mean for Irish house prices?


----------



## exile

Funny little bit of PR from EBS today:

[broken link removed]

Three quarters of FTBs think property in Ireland is a good investment.  Meaning one quarter think something else.  Wonder what!


----------



## Remix

exile said:


> Funny little bit of PR from EBS today:
> 
> [broken link removed]
> 
> Three quarters of FTBs think property in Ireland is a good investment.


 
Well, they've spent their savings, they've borrowed heavily, they're lifestyle is restricted and they're concerned about rising interest rates.

I'd imagine it's important to believe you've made a good investment if you are in that situation - you'd despair otherwise !

more on that here


----------



## Arthur Daley

I'm new to this forum, but having reviewed this thread for quite a while, and having been a FTB last year, it seems the Bears are onto something about sentiment around property having taken a turn downwards. 
The latest Central Bank stats on private sector lending show there's been a bit of slowdown in the rate of growth in mortgage lending since June. These numbers have increased at a crazy rate since 2001 so that now we owe €293m. 
As far as a reduction of US interest rates goes it seems clear that there is quite a lag between the Eurozone and US cycles. There was on the way down so there will be on the way up. Thus I wouldn't be waiting for ECB rates to show a downward trend for at least a year to 18 months, despite the inverted curve in the US.


----------



## hmmm

Persius said:


> So if interest rates start going lower, that is good news for property purchasers and means that people will be able to borrow more again.



That's a bit too simplistic. Rates will be lowered if there is evidence of a slowdown (and if inflation can be contained). I think the low rates and growing economies of the past 6 years or so has been an exceptional case which is unlikely to be repeated in the near future. In the event of an economic slowdown (or recession), borrowing will be restricted to private individuals with or without a rate cut.

There is also a relatively high risk at present of stagflation (high inflation, low growth) or even at worst case deflation (Japan, prices falling, debt burden increases massively each year, lack of investment).


----------



## BigM

"Strong vigilance remains of the essence".... "progressive withdrawal of monetary accommodation will remain warranted"... Trichet says today. Confirmation, if any were needed, of 25bps on Oct 5th and again Dec 7th


----------



## Bedsit

BigM said:


> "Strong vigilance remains of the essence".... "progressive withdrawal of monetary accommodation will remain warranted"... Trichet says today. Confirmation, if any were needed, of 25bps on Oct 5th and again Dec 7th



Another interesting point he made was when a journalist asked him how the ECB would react to some of the negative forecasts that had been published in the last couple of weeks. To this Mr Trichet pointed to the fact that even though at the end of last year some of the indicators were on the low side, the council increased rates as they were taking into account medium-term considerations. I think that this was a very important point and hint to ECB watchers.


----------



## bearishbull

Any signs of the autumn selling season kicking off yet? Tomorrow is first of September and I have'nt seen any indications. A house up for auction nearby was on open view when i passed at lunchtime but it didnt look like anyone was inside looking and door was wide open, a similar nearby house was auctioned in april/may and every day it had open viewing it was jammed at lunch time.


----------



## BigM

bearishbull said:


> Any signs of the autumn selling season kicking off yet? Tomorrow is first of September and I have'nt seen any indications. A house up for auction nearby was on open view when i passed at lunchtime but it didnt look like anyone was inside looking and door was wide open, a similar nearby house was auctioned in april/may and every day it had open viewing it was jammed at lunch time.


 
A house went on sale down the road from me on the 14th Aug and sale agreed by the 24th. Strong demand or eager seller? Take your pick...


----------



## demoivre

Duplex said:


> The Yield curve is in essence what trillions of dollars are saying will happen to the US economy over the next decade....



and what's that then?


----------



## bearishbull

demoivre said:


> and what's that then?


recession in next few years in america, and when america sneezes......


----------



## Eurofan

bearishbull said:


> recession in next few years in america, and when america sneezes......



Boogers everywhere (or something like that  )


----------



## power1

Just cashed in on my house and am moving to France. House sold within two weeks for a lot more than I had expected. A number of couples and first time buyers put in bids around the stamp duty threshold of €317,500 but they were all blown out of it by a bidding war between several property investors. I know that I would hate to be a FTB in todays market trying to compete with the Investors and considering my place as an example, it would appear that property values may have a bit higher to go before they halt.


----------



## demoivre

bearishbull said:


> recession in next few years in america, and when america sneezes......



That's by no means a certainty , I can think of several other reasons why the yield curve might be inverted.


----------



## onekeano

power1 said:


> Just cashed in on my house and am moving to France. House sold within two weeks for a lot more than I had expected. A number of couples and first time buyers put in bids around the stamp duty threshold of €317,500 but they were all blown out of it by a bidding war between several property investors. I know that I would hate to be a FTB in todays market trying to compete with the Investors and considering my place as an example, it would appear that property values may have a bit higher to go before they halt.



As a matter of interest Power would you mind telling teh general lcoation. When I spoke to a couple of agents recently about selling a property they told me tehre were no investors out there. As an investor myself I can't understand the logic of buying with current yields.

Roy


----------



## onekeano

bearishbull said:


> Any signs of the autumn selling season kicking off yet? Tomorrow is first of September and I have'nt seen any indications. A house up for auction nearby was on open view when i passed at lunchtime but it didnt look like anyone was inside looking and door was wide open, a similar nearby house was auctioned in april/may and every day it had open viewing it was jammed at lunch time.



BB - isn't Friday a very unusual day for a viewing (normally Wednesday evening and Sat afternoon). Perhaps it was a private viewing or by appointment?

Roy


----------



## power1

HTML:
	

As a matter of interest Power would you mind telling teh general lcoation. When I spoke to a couple of agents recently about selling a property they told me tehre were no investors out there. As an investor myself I can't understand the logic of buying with current yields.


North County Dublin - 3 Bed Property


----------



## bearishbull

demoivre said:


> That's by no means a certainty , I can think of several other reasons why the yield curve might be inverted.


 I wasnt saying thats my interpretation but what Duplex was hinting at. It may simply be investors are happy to buy dollar denominated bonds at low yields for reasons other than anticipated recession.


----------



## bearishbull

onekeano said:


> As a matter of interest Power would you mind telling teh general lcoation. When I spoke to a couple of agents recently about selling a property they told me tehre were no investors out there. As an investor myself I can't understand the logic of buying with current yields.
> 
> Roy


Same thing happened a few months ago to my friend who owned such a house in Finglas, his small 3 bed semi ex council near clearwater shopping centre sold to an investor for 425k, the rent is about a 1200 a month or less.


----------



## bearishbull

onekeano said:


> BB - isn't Friday a very unusual day for a viewing (normally Wednesday evening and Sat afternoon). Perhaps it was a private viewing or by appointment?
> 
> Roy


Todys thursday and it was open viewing, sherry fitgerald had a sign on street outside advertising this fact, the house is on mobhi road,maybe its just a slow start as house is only on market a few days.


----------



## Raskolnikov

power1 said:


> Just cashed in on my house and am moving to France.


May I ask; are you leaving Ireland becase of a work commitment or because you simply don't want to live in this country?

The renter of the semi-detached house next to us has just taken an option to buy their rental house for €360,000. I imagine they pay the same monthly rent as we do currently (same landlord, same house and is finished almost identically) of €800. According to the mortgage calculator at jeacle, they're going to be effectively paying twice as much for a lesser product (furnishings/refuse/insurance/etc aren't included in the deal). 

I'm surprised the landlord hasn't offered us the same deal.


----------



## whathome

The first of the new supply of high-end properties has hit myhome over the past week or so. I noticed that many mid-high value houses that I would have expected to be auctioned have been placed by private treaty instead. 

I think properties at the lower end of the market are still moving when priced well. I still haven't seen much evidence of price drops in the sub €317,500 category apart from the odd apartment or the 1 beds dropping by 10k in Adamstown. 

Looks like the next ECB interest rate rise will be October 5th:
http://www.rte.ie/business/2006/0831/ecb.html


----------



## futisle

That's by no means a certainty , I can think of several other reasons why the yield curve might be inverted.

Would you mind sharing them with the less educated among us (like myself)


----------



## power1

> May I ask; are you leaving Ireland becase of a work commitment or because you simply don't want to live in this country?


 
To be honest its a bit of both, I really like the way of life over there and I got a chance of a far better job in Geneva then I have here. I'll be able to buy a site and build a large 4 Bed Detached house on about 1000m2 of Land with a Pool in a really nice area about 25 miles from Geneva (with proper infrastructure for commuting) for around the €450K mark. Try do the same within a 25 mile radius of Dublin.


----------



## whathome

People on this thread have been accused of having a vested interest in the market moving one way or another. I don't believe that this thread has any impact on the market in general. 

Could this be a desperate attempt to talk up a development?
http://www.askaboutmoney.com/showthread.php?t=35570

I wonder how much investor sentiment is affected by people hearing stories about profits with little of no work involved. Even if these stories dry up slightly it might affect sentiment IMO.


----------



## Guest107

whathome said:


> Could this be a desperate attempt to talk up a development?



Its desperate indeed , which of the following did it

1. Flipper
2. Developer

or

3. A dumb EA ??

I would dearly love to know


----------



## BigM

whathome said:


> Could this be a desperate attempt to talk up a development?
> http://www.askaboutmoney.com/showthread.php?t=35570


 
That's hilarious!! 
But these people who reckon they've made 100k before they've even gotten the keys are going to get a bit of a land when/if they try and actually sell them.
What about Stamp Duty costs and the chance that builders are going to be offering more and more sweeteners to offload their new phases?
Then again, anyone who answers their own post and thinks nobody will notice probably hasn't thought everything through properly!!


----------



## tententwenty

I just read the paper there, Daft have a press release going around about their new maps facility. Its really painting a very interesting picture, you can see around Galway that 3 and 4 bed houses, on the outskirts of the city (like Knocknacarra) €375,000 and up and up. Thats at least €50,000 more than houses in the same area earlier this year. 

To actually see how geographically far from the city they are, in contrast to their prices, is more illuminating than reading the address. Mind you in some of the shadier areas closer to town, prices seem to be dropping a bit.


----------



## sandymount

tententwenty said:


> I just read the paper there, Daft have a press release going around about their new maps facility.



This is brillant, bye bye www.myhome.ie


----------



## whathome

BigM said:


> Then again, anyone who answers their own post and thinks nobody will notice probably hasn't thought everything through properly!!


 
...and it's a bit sad that someone would think that posting their fantasy online would make it real.  

probably a flipper getting worried!


----------



## tententwenty

sandymount said:


> This is brillant, bye bye www.myhome.ie


They are also talking about having 50% more properties than their "closest competitor" in the press release...


----------



## redo

Myhome was probably the Sale of the Century.


----------



## liteweight

Just had a look at Daft's new map facility. Anyone know why the majority of houses in Sandymount/Ballsbridge have been left off it. Thought Sherry Fitzgerald had joined? Saw a number of houses for sale today but they're not on the site!!


----------



## whathome

liteweight said:


> Just had a look at Daft's new map facility. Anyone know why the majority of houses in Sandymount/Ballsbridge have been left off it. Thought Sherry Fitzgerald had joined? Saw a number of houses for sale today but they're not on the site!!


 
I'm not sure if SherryFitz are using Daft yet - maybe they will in time if their contract from selling myhome allows them to. Quite a few EA's don't seem to use Daft. I really like it though - the two brothers that set it up are a breath of fresh air to Irish business.

Looks like they've taken inspiration from Whizzbang's www.pumps.ie


----------



## RiceCakes

tententwenty said:


> I just read the paper there, Daft have a press release going around about their new maps facility.



Thats really really neat, pick a price point and zoom about finding areas you can live and afford, then click straight into the ad, really clever stuff!

Well done the lads in daft.ie!


----------



## Guest107

tententwenty said:


> Its really painting a very interesting picture, you can see around Galway that 3 and 4 bed houses, on the outskirts of the city (like Knocknacarra) €375,000 and up and up. Thats at least €50,000 more than houses in the same area earlier this year.



Actually the interesting thing about Galway is the amount of investors dumping out of their strongholds like and Doughiska. Have a look at the Advertiser, its scary stuff. 

I'll wager now that the asking for Gleann Dara, currently €330-€340k will be more like €299k by christmas but these places are owned by long term investors who bought them in the mid 1990s for €100k or so and had a good run of rental for years. Now they can't rent them any more so they are selling out .


----------



## Marie

Brilliant!  Gives a much clearer idea of the property-market at a glance...


----------



## thewatcher

We're "abnormal" ,are you listening Mr. Cowan ?

http://www.rte.ie/business/2006/0831/property.html

http://www.rte.ie/business/2006/0831/ecb.html


----------



## bearishbull

thewatcher said:


> We're "abnormal" ,are you listening Mr. Cowan ?
> 
> http://www.rte.ie/business/2006/0831/property.html
> 
> http://www.rte.ie/business/2006/0831/ecb.html


 
Ah sure "bubble bertie" the bumbling builders buddy sayz tings are gettin boomier, so we're allrite lads!!


----------



## tententwenty

thewatcher said:


> We're "abnormal" ,are you listening Mr. Cowan ?


Maybe he meant to say "different", the way everyone is always saying it around the country?


----------



## Glenbhoy

> We're "abnormal" ,are you listening Mr. Cowan ?


We discussed this before and no one had any real recommendations as to what the govt should/could do to engineer the 'soft landing'.  The consensus seemed to be that it's too late now, and any messing by the govt could be disastrous.


----------



## Guest107

Its to late now and there is an election coming up soon ...maybe October...thats as long as they do not tax us all to prop the bloody banks up of course


----------



## bearishbull

Listening to noel ahern on radio today im sure they are up to something by telling speculators that they will be taxed out of it in future. Is he (and bertie by extension) trying to scare potential speculators into the market now (before the new taxes/anti speculator measures are implemented) to drive demand and prevent a crash pre election??

Any "investors " thinking of buying in next year or two may be rushed into buying in next several months to avoid any future penalties.


----------



## Calina

bearishbull said:


> Listening to noel ahern on radio today im sure they are up to something by telling speculators that they will be taxed out of it in future. Is he (and bertie by extension) trying to scare potential speculators into the market now (before the new taxes/anti speculator measures are implemented) to drive demand and prevent a crash pre election??
> 
> Any "investors " thinking of buying in next year or two may be rushed into buying in next several months to avoid any future penalties.



I don't think it's the "buying" they will need to worry about so much as the "selling".


----------



## Guest107

all they can do is try to keep the next lot of flippers out of the market with some FUD , if they demonise the flippers enough with the FUD they may be able to enact some measures after the election.


----------



## whizzbang

whathome said:


> I'm not sure if SherryFitz are using Daft yet - maybe they will in time if their contract from selling myhome allows them to. Quite a few EA's don't seem to use Daft. I really like it though - the two brothers that set it up are a breath of fresh air to Irish business.
> 
> Looks like they've taken inspiration from Whizzbang's www.pumps.ie



*takes a bow*

I have something else in the works that will be of a lot of interest to viewers of this thread  .. more news to follow


----------



## Guest107

would that be www.flipthat.com ?


----------



## CelloPoint

Glenbhoy said:


> The consensus seemed to be that it's too late now, and any messing by the govt could be disastrous.



The affordable housing initiative will be the great political smoke-screen - supplying thousands of young people with crappy houses in crappy locations bought off builders who realised they wouldn't sell.


----------



## Remix

thewatcher said:


> We're "abnormal" ,are you listening Mr. Cowan ?
> 
> http://www.rte.ie/business/2006/0831/property.html
> 
> http://www.rte.ie/business/2006/0831/ecb.html


 

For Trichet to use the term "abnormal" towards a member state is, well, highly abnormal . I don't think he's ever used such a direct term even in 
describing economic conditions in countries such as Bulgaria. I expected the story to be plastered all over the country this morning but it seems to have been quickly dropped.

Short of walking up and down O'Connell street with a placard and a megaphone, I don't see how else he's going to get the message into
thick skulls that this mess is our own fault - we can't blame the Brits or the ECB for this one.


----------



## whathome

This article about Adamstown is from February this year - it reads like a sad joke now:
[broken link removed]

"Those anxious not to miss the boat at Adamstown would be advised to arrive early."

They're still trying to sell them six months later! ...and they've had to drop the starting price to €270,000.

I really like the reference to local infrastructure:
"Some infrastructure for Adamstown Castle is already in place, such as a children's playground and bus stop."

I'm not so sure we'll see queues at the launch of any new development this Autumn, unless they are organised and paid for by the developer.

I'm off now to put a booking deposit on an apartment, apparently there's already a bus stop somewhere nearby.


----------



## Duplex

Remix said:


> For Trichet to use the term "abnormal" towards a member state is, well, highly abnormal . I don't think he's ever used such a direct term even in
> describing economic conditions in countries such as Bulgaria. I expected the story to be plastered all over the country this morning but it seems to have been quickly dropped.
> 
> Short of walking up and down O'Connell street with a placard and a megaphone, I don't see how else he's going to get the message into
> thick skulls that this mess is our own fault - we can't blame the Brits or the ECB for this one.


 
I think the fact that Trichet's statement hasn't made the headlines/editorials  just reflects how abnormal the situation is here.  We have a history of sweeping unpleasantness under the carpet, allowing problems fester and grow until they cant be ignored anymore.  This particular Irish abnormality is past remediation. Trichet in his statement seemed resigned to the inevitable, having warned the government on many previous occasions.


----------



## whathome

Remix said:


> I expected the story to be plastered all over the country this morning but it seems to have been quickly dropped.


 
I expected to see it also - very surprised that it's been buried.

They ignore a direct reference to Ireland from the president of the ECB, yet the media here are happy to reprint press releases from EA's and other vested interest groups.

Next weeks release from Hanger and MacDowel:
*167% of First Time Buyers are from outer space*

"We've seen a huge increase in the amount of interest in Irish property from Plutonians. Since their asteroid is no longer recognised as a planet, they are flocking to pick up one and two bed apartments in the greater Dublin area."


----------



## SidTheDweeb

How much of the market is actually FTB's?
And how much are investors?
Would be interesting to see a breakdown!


----------



## CelloPoint

Duplex said:


> I think the fact that Trichet's statement hasn't made the headlines/editorials  just reflects how abnormal the situation is here.  We have a history of sweeping unpleasantness under the carpet, allowing problems fester and grow until they cant be ignored anymore.  This particular Irish abnormality is past remediation. Trichet in his statement seemed resigned to the inevitable, having warned the government on many previous occasions.



THE IRISH MEDIA ARE A DISGRACE - the free press is an important facet of our democracy. By keeping silent, this freedom is being abused by the mainstream media - afaic, they have given in to the money-making machine that is the great Irish property pyramid scheme.


----------



## coogeebear

So I won't pack my bags a leave sunny Oz just yet then!


----------



## Marie

Well perhaps instead of blaming 'the gubbernent' or 'the Brits' the heat is being turned onto 'the meeja' but is that fair, either?  The Trichet comment is published alongside the news that Irish borrowing is about to burst through the 300 BILLION........yet, that's BILLION ceiling.  It's the responsibility for every adult to do their own thinking about the implications.  Unfortunately I think there is a deeply-entrenched cultural 'redemption' myth, a child-like belief that "everyone's a winner" and the small-print (value can go down as well as up; large gain is associated with high risk) doesn't apply to "Me".  Then switch to the EA's ads and badly-built properties at the edge of the concrete jungle have risen by five-figure numbers in just the last year.

It will be, very bad and very soon!


----------



## CelloPoint

Marie said:


> Well perhaps instead of blaming 'the gubbernent' or 'the Brits' the heat is being turned onto 'the meeja' but is that fair, either?


I was just making the point that the media have been suspiciously silent. Perhaps they're brewing something? And besides, I've already made the point on this thread about the social backlash arising from a property crash - the blame game will go on for years. 

Whatever about blaming a group or organisation after the event has occured, do you not agree that the media, by keeping silent, are neglecting on their responsibilities to a free democracy? 



Marie said:


> The Trichet comment is published alongside the news that Irish borrowing is about to burst through the 300 BILLION........yet, that's BILLION ceiling.  It's the responsibility for every adult to do their own thinking about the implications.  Unfortunately I think there is a deeply-entrenched cultural 'redemption' myth, a child-like belief that "everyone's a winner" and the small-print (value can go down as well as up; large gain is associated with high risk) doesn't apply to "Me".  Then switch to the EA's ads and badly-built properties at the edge of the concrete jungle have risen by five-figure numbers in just the last year.
> 
> It will be, very bad and very soon!


There'll be tears.


----------



## bearishbull

SidTheDweeb said:


> How much of the market is actually FTB's?
> And how much are investors?
> Would be interesting to see a breakdown!


investors are close to 40% non first time buyers are around 30-40% and FTB's are no more than 30% of market and decreasing,they could be closer to 20% as i havent seen reliable figures for country as a whole only reports from estate agents and mortgage providers.


----------



## Eurofan

CelloPoint said:


> Whatever about blaming a group or organisation after the event has occured, do you not agree that the media, by keeping silent, are neglecting on their responsibilities to a free democracy?



I'd agree with the above but i suspect it's more to do with blame than anything else. I've been surprised by the willingness of some of the papers to test the waters in recent weeks with a few of the articles quoted earler in the thread about poor yield, increasing rates, 'smart money moving out of property' etc.

Granted it's small coverage compared to the usual tranch of 'all is rosy' articles but there's been a definate increased trend in bearish reporting.

None of the papers want to jump the gun with a full on "here comes the crash folks" unless it's blatently obvious it's already here since the 'gubbernent' will suggest that the media paniced the market into a downturn.

I feel of the various involved parties (construction, estate agents, revenue, media) everyone _knows_ the end is in sight but no-one wants to be blamed for saying it first.


----------



## CelloPoint

RE: media: Thank heavens for non-mainstream media outlets such as the AAM forum!



bearishbull said:


> investors are close to 40% non first time buyers are around 30-40% and FTB's are no more than 30% of market and decreasing,they could be closer to 20% as i havent seen reliable figures for country as a whole only reports from estate agents and mortgage providers.



Yeah, I'm also very skeptical of these figures that are being bandied about. Wasn't there a big song and dance there last week about 20% of all FTBs being immigrants? Where on God's earth did this figure come from? And if we can find the source, who is this person that declared such a figure?


----------



## Humdinger

Just picked this up from RTE business news ....."Intel, the world's leading computer chip maker which employs 99,000 people worldwide, could soon slash up to 20,000 jobs, a report from the US said today. 
The layoffs could come as early as next week, when Intel has  scheduled an internal announcement, The Wall Street Journal said, quoting analysts and former employees of the company."

Any impact in Leixlip would deal a major blow to confidence.


----------



## whizzbang

2Pack said:


> would that be www.flipthat.com ?


nope,


----------



## daveirl

RiceCakes said:


> Thats really really neat, pick a price point and zoom about finding areas you can live and afford, then click straight into the ad, really clever stuff!
> 
> Well done the lads in daft.ie!


It wasn't exactly their own idea, but it's well implemented all the same. Zillow have been doing this for a while.


----------



## liteweight

The Daft map is handy but would have to be used in conjunction with other avenues. I looked up Sandymount last night. Daft said it had 3 properties but only 2 were shown on map. Took a trip to Sandymount this morning and counted 10 for sale signs!!


----------



## whathome

liteweight said:


> Took a trip to Sandymount this morning and counted 10 for sale signs!!


 
Liteweight - what's happening to you????  That sounds almost bearish


----------



## liteweight

whathome said:


> Liteweight - what's happening to you????  That sounds almost bearish



What can I tell you?? I'm having a bad day!  Builders swarming all over the gaff and not one them good looking!!

I will say though that three of these houses went up late last week and already have Sale Agreed on them!!


----------



## whathome

liteweight said:


> What can I tell you?? I'm having a bad day! Builders swarming all over the gaff and not one them good looking!!
> 
> I will say though that three of these houses went up late last week and already have Sale Agreed on them!!


 
Ah - you haven't lost it 

but you said ... "this morning and counted 10 *for sale *signs"


----------



## liteweight

whathome said:


> Ah - you haven't lost it
> 
> but you said ... "this morning and counted 10 *for sale *signs"



Yes, I should qualify that by saying they weren't all in the village itself. Some are not on MyHome yet and only 2 are on Daft!


----------



## whathome

liteweight said:


> Yes, I should qualify that by saying they weren't all in the village itself. Some are not on MyHome yet and only 2 are on Daft!


 
So you saw 10 "for sale" signs on your trip this morning
...but 3 of them actually say "sale agreed" rather than "for sale"
...and you think that the sale agreed properties switched to "sale agreed" within a week of the "for sale" sign going up and may never have appeared on myhome or daft.

All very unusual! Looks like the vendors were VERY keen to get out quick. They didn't give their properties a chance on the market.

I wouldn't expect sale agreed properties to appear on the daft map anyway - it's likely to upset the sale-agreed purchaser.


----------



## liteweight

whathome said:


> So you saw 10 "for sale" signs on your trip this morning
> ...but 3 of them actually say "sale agreed" rather than "for sale"
> ...and you think that the sale agreed properties switched to "sale agreed" within a week of the "for sale" sign going up and may never appeared on myhome or daft.
> 
> All very unusual!  Looks like the vendors were VERY keen to get out quick.  They didn't give their properties a chance on the market.
> 
> I wouldn't expect sale agreed properties to appear on the daft map anyway - it's likely to upset the sale-agreed purchaser.



It's not that unusual in Sandymount, Ballsbridge, particularly at the beginning of the season. Lots of properties seem to sell before Auction and not only this year!! I have to say if I was offered what I wanted without having to go through the hassle and expense.....I'd take the money and run. Most properties in the area, if they don't sell at Auction, sell immediately afterwards. Few are left languishing but then, these are such bad value that the price is laughable!! To date, even these have sold eventually.

I just happened to be looking at Daft Map and remembered a property close to mine which has a For Sale sign. Out of curiosity, I looked it up...it wasn't on Daft, nor MyHome, nor on the Agents web site!!! This calls the Agent, not the vendor, into question as far as I'm concerned and it's not the first time I've noticed it.

As for properties going Sale Agreed before it even appears on Daft or MyHome....yes it happens regularly. Each year at the beginning of the season, apart from the usual Estate Agent blurb....'we have people waiting to buy your house'...I get at least one or two letters posted through the door from private purchasers wishing to buy in the area. It's the area they want....not the particular house!


----------



## whathome

liteweight said:


> As for properties going Sale Agreed before it even appears on Daft or MyHome....yes it happens regularly. Each year at the beginning of the season, apart from the usual Estate Agent blurb....'we have people waiting to buy your house'...I get at least one or two letters posted through the door from private purchasers wishing to buy in the area. It's the area they want....not the particular house!


 
...but surely you wouldn't go to the trouble of making up a "sale agreed" sign to put outside your house if it was a private deal - unless you wanted to impress the neighbours!


----------



## tententwenty

daveirl said:


> It wasn't exactly their own idea, but it's well implemented all the same. Zillow have been doing this for a while.


I dunno, I have noticed that there are several properties that are addressed completely wrongly. I think they are leaving the placement of the icons for houses in the hands of the sellers; there was one spot located in the middle of Galway City, a site on Lough something or other, that in fact is halfway into Connemara. Also with all the development around Galway lately, the map is fairly out of date.

They should really do the placement themselves, and maybe do a deal with some of the GPS companies to get up to date maps. Actually that would be rather nifty, they could do an add on to the GPS software for live updates to property sales in the area, if you happen to be cruising by. Hmm...


----------



## liteweight

whathome said:


> ...but surely you wouldn't go to the trouble of making up a "sale agreed" sign to put outside your house if it was a private deal - unless you wanted to impress the neighbours!



 Are you messing? The Sale Agreed signs are from legitimate Estate Agents!! Any private sales I've heard of have been through the grapevine!! Why would you be bothered trying to impress the neighbours if you're leaving anyway?? Anyway...why would you be bothered trying to impress the neighbours at all!


----------



## liteweight

tententwenty said:


> I dunno, I have noticed that there are several properties that are addressed completely wrongly. I think they are leaving the placement of the icons for houses in the hands of the sellers; there was one spot located in the middle of Galway City, a site on Lough something or other, that in fact is halfway into Connemara. Also with all the development around Galway lately, the map is fairly out of date.
> 
> They should really do the placement themselves, and maybe do a deal with some of the GPS companies to get up to date maps. Actually that would be rather nifty, they could do an add on to the GPS software for live updates to property sales in the area, if you happen to be cruising by. Hmm...



Is this the Daft Map you're talking about??


----------



## whathome

liteweight said:


> Anyway...why would you be bothered trying to impress the neighbours at all!


 
To show off your artistic side through the ancient art of "sale agreed" sign making of course.

The old grapevine eh?  I hear those Windmill apartments in Kilbarrack have trebled in price within the past four days


----------



## liteweight

Not that kind of grapevine, talking to new neighbours about how they got the house. Actually one house changed hands twice in the last year. I insulted the new occupants by assuming they were renting!! Well what are you supposed to think if you don't see a For Sale sign??


----------



## whathome

liteweight said:


> Actually one house changed hands twice in the last year


 
Impressive - I still haven't seen one with hands yet.



liteweight said:


> I insulted the new occupants by assuming they were renting!! Well what are you supposed to think if you don't see a For Sale sign?


 
Burglars?


----------



## tententwenty

liteweight said:


> Is this the Daft Map you're talking about??


Yesh. You heard it here first.


----------



## liteweight

whathome said:


> Impressive - I still haven't seen one with hands yet.
> 
> 
> 
> Burglars?



 I think I'll go to the pub now. I'm worn out watching the builders work!!


----------



## Maine

Cannot blame the media - in fairness there has always been plenty of warnings (look at Shane Ross columns in late 90s/early 00s - premature!). 

The real facilitators of the boom have been the banks who have been left to their own devices by the toothless wonder aka central bank.

The borrowings data for June and July indicate very good selling in Sept. So no worries for attempting to cash out now. 

October 3rd interest increase will dent things a tad for a week but Dec raise will force the investors and FTBs to seriously think about fixing.   85% of mortgages are variable.


----------



## bren2002

Not actually having a mortgage I'm not sure I can comment on this, but here we go anyway.

Is it not the case that it's too late really for fixing now and all that fixing wll give you is expensive stability in repayments?  Fixing should have been done >9months ago.


----------



## room305

bren2002 said:


> Is it not the case that it's too late really for fixing now and all that fixing wll give you is expensive stability in repayments?  Fixing should have been done >9months ago.



Only if you think ECB rates won't go much higher. You can get a five year fixed rate for < 5%. This is not even half a percent above the current variable rate. Not bad when you consider the ECB has practically signposted two more 0.25% rises before the end of the year.


----------



## Marie

You have to take into account that there may be arrangement fees for changing from variable to fixed interest.  Check, too, if there is a penalty - for example a fee of a percentage of the outstanding mortgage amount - if you need for any reason to get of the fixed rate before the end of the stated period (I've been there.........it's an expensive mistake!).   Fixed-rate is useful if you are absolutely sure your circumstances won't change during the period.  For example if you want/need to sell the fixed-interest mortgage may not be portable to the next property.  Lots of small print to be read.........!


----------



## ivuernis

Sunday Times: Pull the other one, Noel


----------



## liteweight

ivuernis said:


> Sunday Times: Pull the other one, Noel



Excellent article and I totally agree with everything said. It's the old politician's trick of throwing someone (in this case the elusive speculator) to the wolves, in order to prevent the people discussing the 'real' issues!

Why doesn't Minister Aherne ask why some county councils will accept donations from builders in lieu of affordable housing? Why doesn't he ask what these councils are doing with said donations? Does anyone keep a record of where the money goes?

When is the last time the Government asked any county council to embark on a big building project/housing scheme to house the country's citizens who can't afford to do it alone? Surely there's all that stamp duty in the coffers, paid over by compliant citizens....why isn't it ploughed back into this area?

No..much easier for Minister Aherne to blame speculators because no one really knows how many are out there, but he knows they're 'talked about' and resented. Easy pickings for lazy politicians who can't be bothered to really examine the issues!!


----------



## liteweight

madisona said:


> €440,000,000 of that stamp duty was returned to landlords last year through the rent allowance scheme



Where did you get this figure madisona, if it's correct then it's a National disgrace!  How many houses could have been built for even half that amount of money?


----------



## Jeanne

ivuernis said:


> Sunday Times: Pull the other one, Noel


 
That's an article that really sums up reasons for the property mess we're in.  Excellent. Doubt the Irish Times will publish it.


----------



## room305

ivuernis said:


> Sunday Times: Pull the other one, Noel



We had an anti-speculation tax on the books, it was just never implemented and then it was quietly scrapped. You'd think the minister for housing would be aware of this. He's in my constituency so when he comes around I'll be sure to give him a grilling about it.

[broken link removed]



> *Finance (No. 2) Act, 2000, Section 6*
> Subject to the provisions of this Part and any regulations thereunder, with effect on and from 6 April 2001 a tax, to be called anti-speculative property tax, shall be charged, levied and paid annually upon the market value of the relevant residential property on the valuation date in each of the years 2001, 2002 and 2003 of every assessable person and the rate of tax shall be 2 per cent of that market value.


----------



## whathome

IIB are set to release a report tomorrow warning the government not to intervene in the property market...

http://www.unison.ie/breakingnews/index.php3?ca=35&si=97811

It's no wonder they are worried by the weakening market...confidence in US banks is waning with worries about their ability to weather the housing downturn:

*Housing casts shadow on prospects for banks*
http://www.marketwatch.com/news/story/Story.aspx?guid={4A7839E2-AC2D-4BD0-B069-1513F703B9EB}&siteid=

"Just a few months ago, homebuilders, the National Association of Realtors and most Wall Street analysts were still predicting a soft-landing in housing, in the same reassuring way they used to say last year that housing would remain strong in 2006. 

But after the freshest figures - which showed sales of new homes sales plunged 21.6% in July from the year earlier, inventories of unsold homes soared and prices fell - there is little debate that the housing market is stumbling much faster than most expected. "

...expect a reassuring report tomorrow from IIB saying that housing market is strong, switching to a "soft landing" in a few months, then capitulation and acceptance of the downturn - always behind the curve and after the fact!


----------



## whathome

Tax measures against speculators would have been a good idea over the past few years but probably wouldn't make much of a difference now as the market weakens.

Speculators are going to get crucified over the coming months, not by the government but by rising interest rates and the market turning against them.


----------



## CelloPoint

liteweight said:


> Where did you get this figure madisona, if it's correct then it's a National disgrace!  How many houses could have been built for even half that amount of money?



And to top it all off, landlords with tenants under the rent allowance scheme are exempt from registering from the PRTB. In effect, they only pay tax if they choose to.


----------



## liteweight

CelloPoint said:


> And to top it all off, landlords with tenants under the rent allowance scheme are exempt from registering from the PRTB. In effect, they only pay tax if they choose to.



Are you sure about that CelloPoint?? I think I read that somewhere else but it was disputed?


----------



## room305

CelloPoint said:


> And to top it all off, landlords with tenants under the rent allowance scheme are exempt from registering from the PRTB. In effect, they only pay tax if they choose to.


 
That's not true. Landlords are still obliged to register with the PRTB, irrespective of whether their tenants are receiving rent allowance or not.


----------



## CelloPoint

liteweight said:


> Are you sure about that CelloPoint?? I think I read that somewhere else but it was disputed?



Well seeing as landlords are now paid rent allowance direct from the local council, that would make them exempt (see excerpt below from the PRTB's website). I can't say this with any authority though.



			
				PRTB website - FAQs section said:
			
		

> *2. What dwellings are exempt from the tenancy registration system?*
> 
> A number of dwellings are exempt from registration, these include:
> 
> > Business premises, even where partly residential
> 
> > A dwelling to which Part II of the Housing (Private Rented Dwellings) Act     1982 applies (i.e. formerly rent controlled dwelling occupied by the “original     tenant” or his/her spouse) or to which Part II of the Landlord and     Tenant (Amendment) Act 1980 applies (i.e. long occupation equity lease tenancies)
> 
> *> A dwelling let by a local authority or voluntary housing body*
> 
> > A dwelling occupied under a shared ownership lease
> 
> > A holiday let
> 
> > A dwelling in which the landlord is also resident
> 
> > A dwelling in which the spouse, parent or child of the landlord is resident     and there is no written lease or tenancy agreement
> 
> > A dwelling that is occupied rent free




The rent allowance system is a juicy rant for the opposition political parties. But you're right, can't see this situation lasting much longer. The horse has bolted at this stage, so whatever measures the FF/PD coalition introduce to remove this discrepancy, it will be too late, as billions of Euro of public money have been poured out over the last couple of years straight into the pockets of landlords.

Imagine if this money was spent on social housing schemes? It's a big debate (I'm sure has been discussed elsewhere). My opinion on rent allowance is that:
- landlords should be made register with the PRTB like everyone else
- B&Bs and hostels should be used for short-term emergency accomodation needs (i.e. 1 day to 1 month)
- rent allowance should be used for medium-term accomodation needs (i.e. 1 month to 1 year)
- social housing should be used for long-term accomodation needs (i.e. over one year)

The system as we have it is pouring money down the drain. There is no cohesive government strategy which ought to include: giving homeless people a leg up, giving unqualified people a chance to educated themselves, giving disadvantaged people a second chance in life, giving convicts a second chance, etc.

It's easy to justify the spending of money on noble causes such as giving people a roof over their heads - but the presenet rent allowance system is the easy and lazy option (indeed corrupt). Tackling the issues by providing a broad spectrum of social housing units, education programmes and drug rehabilitation programmes is the strategy the Dept. of Social Welfare & Family Affairs should be doing. Whilst there is some good work being done by certain people, there is an inherent laziness/lethargicy in government departments coupled with a failure by those in charge to deliver sucessful projects that are good value-for-money for the exchequer.

But nobody really cares - dole recipients get free rent, landlord get guaranteed money and government departments don't have to administer people (they just tell them to go to a landlord). It's a quick-fix solution. The only people who lose out are the 9-5 drones who work in the private sector. It's easy to deal with the drones though - just put 'nuclear power' or 'airport terminals' on the agenda to divert attention from the real issues.


----------



## room305

CelloPoint said:


> Well seeing as landlords are now paid rent allowance direct from the local council, that would make them exempt (see excerpt below from the PRTB's website). I can't say this with any authority though.



No, you're wrong. Check it with the PRTB. If you are a landlord you must register the tenancy agreement with the PRTB. It doesn't matter that the rent is being paid by the local authority on behalf of the client. This is quite a different situation to a building being let by the LA (i.e. the LA do not rent the house from the landlord and let it to the tenant but rather pay on behalf of the tenant to the landlord).


----------



## liteweight

liteweight said:


> Are you sure about that CelloPoint?? I think I read that somewhere else but it was disputed?



You're definitely wrong on this CelloPoint, had a good read and I think you're misunderstanding the PRTB rules. See Room305's post.

The point is not really whether this huge amount of money is being paid to a landlord or not. The point is that it is being spent on an ongoing basis rather than using the funds to help people purchase, which would in turn, free up money to fund other areas, some of which you mention.


----------



## whathome

Thread very quiet this weekend...everybody must have gone to electric picnic!   Most concert goers not worried about sentiment - probably easier to get a mortgage than tickets to the gig


----------



## liteweight

What's an electric picnic when it's at home?? Or am I showing my age?


----------



## whathome

liteweight said:


> What's an electric picnic when it's at home?? Or am I showing my age?


 
It's a new kind of picnic basket.  You can get them in PowerCity or Harvey Norman I think for about €50.  They're battery powered but you can run them from the 12v socket in a car.  Basically they have a built in lighting and sound system so you can enjoy your hang sangwiches and tea in style.  There's an electric picnic owners club meeting somewhere in Laois where they all gathered this weekend.


----------



## liteweight

whathome said:


> It's a new kind of picnic basket.  You can get them in PowerCity or Harvey Norman I think for about €50.  They're battery powered but you can run them from the 12v socket in a car.  Basically they have a built in lighting and sound system so you can enjoy your hang sangwiches and tea in style.  There's an electric picnic owners club meeting somewhere in Laois where they all gathered this weekend.



Are you taking the michael? Sounds way too classy for Power City!

This thread is always quiet at weekends...no one is in work! I'd even venture to say that Mrs. Whathome has abandoned you for the day or you'd be getting Whatfor, browsing and carousing on the internet on a Sunday!!


----------



## whathome

liteweight said:


> I'd even venture to say that Mrs. Whathome has abandoned you for the day or you'd be getting Whatfor, browsing and carousing on the internet on a Sunday!!


 
She'll be home soon and I haven't even started on any of the housework or ironing


----------



## liteweight

whathome said:


> She'll be home soon and I haven't even started on any of the housework or ironing



Be afraid..........be VERY afraid...!!


----------



## Superman

Regarding Rent Allowance:
It saves maintenance costs of social housing, it also saves employing public sector employees to look after the social housing.
Also from a social perspective, it disperses people who are entitled to such things rather than ghettoise them.  (which is a good thing).  

I'm not as convinced as you that it is such a bad thing. 

The tax situation regarding Landlords is a different matter.


----------



## liteweight

Superman said:


> Regarding Rent Allowance:
> It saves maintenance costs of social housing, it also saves employing public sector employees to look after the social housing.
> Also from a social perspective, it disperses people who are entitled to such things rather than ghettoise them.  (which is a good thing).



I would suggest that the money be ploughed into Affordable Housing or the Shared Ownership Scheme. If people effectively own their own homes public sector employees only have to look after the administration. I'm sure the Rent Allowance Scheme requires a lot of admin. already!

I don't see the need to ghettoise people either. The Government should learn from the sins of the past and realise they have created a great deal of the current anti social behaviour in our society.  They took people who were used to living close to Dublin (and I'm sure this happened in other areas), and stuck them in the back of beyonds. Yes they had a house but with no amenities, parks or youth orientated venues!! What did they think would happen?

More funds could be given to innovative projects such as the one started by 2 Ringsend women, who saw their area become far too expensive for locals, they organised and built a whole apartment block strictly for residents of the area!

If two women from Ringsend can do it, why can't our politicians?


----------



## wolfie

Might be a few cheap houses for sale in the leixlip area soon!!.


----------



## bearishbull

wolfie said:


> Might be a few cheap houses for sale in the leixlip area soon!!.


Intel in Leixlip wont be affected much by the upcoming jobs cull. They survived two previous culls without losing anyone and only recently opened new billion dollar facilities there. Being based in Ireland saves a lot on the tax bill of intel.


----------



## wolfie

Yeah, but the spiraling cost of labour, energy, insurance and transportation in ireland is slowly negating the benefits of tax savings.


----------



## bearishbull

wolfie said:


> Yeah, but the spiraling cost of labour, energy, insurance and transportation in ireland is slowly negating the benefits of tax savings.


Labour costs arent a primary concern for microprocesser manufacturers as AMD's new plants in USA and Germany indicate. Energy for industry isnt as expensive as for consumer, I've yet to hear of any of these multinationals complain about the energy prices here. Other costs may be rising but we've yet to see widespread departures from the hi tech multinationals here for cost reasons. A lot will go in next decade or two but they seem happy enough to be here at present making lots of profit and paying low tax on it. there doesnt seem to pay many more of these high value jobs coming into the country which is more worrying . We can only remain a prosperous nation by exporting high value added goods and services, but unfortunately the economys current expansion is'nt much down to this form of economic activity at present.


----------



## liteweight

Well I've heard it all now!!!


----------



## bearishbull

madisona said:


> .
> 
> opened Ireland on Sunday this morning and there is an ad from Dublin City Council. They stated that they are to begin purchasing private residential properties and asked those interested to contact them.


They've been doing this for years, all councils buy houses in private estates to house social housing recipients.


----------



## wolfie

Thats common practice by the council. They start with one or two properties and then as prices stagnate in these areas due to the types of clients that the council put in these houses, they step in and buy more.Willow park in athlone was a beautiful residential area built in the eighties.The council started buying houses there about 3 years ago .you can now buy a 4 or 5 bed semi in that area for 160 k which is at least 100k below equivalent properties in other ares of athlone.and at the last count on daft there were 30 for sale in this one area.


----------



## whathome

bearishbull said:


> They've been doing this for years, all councils buy houses in private estates to house social housing recipients.


 
Correct, they've been at that for years. It would take a hell of a lot of buying to save the market! In Lucan alone there are nearly 100 more houses for sale now than in April this year. They would have to spend approx €35,000,000 to reduce inventory to spring levels in just one area.


----------



## liteweight

madisona said:


> I don't think that they have. Up until now social and affordable housing has either been specifically built for that purpose or acquired under the 20% of housing in new developments provision. I think that the decision to begin purchasing housing on the open market is a new iniatative. Although there is a precedent in the governments growing role in supporting the private rented market.



Does this mean that builders who chose to make a very small donation instead of supplying affordable housing, can now sell these same houses back to Dublin City Council at above the market value?? If this is the case then the builder gets to market the estate as having no affordable housing (which puts some people off), then saves himself advertising/estate agent fees by selling to the council.


----------



## wolfie

I.dont know why people are afraid of affordable housing in a private area .The people who get these houses are working , they just dont earn a large amount,Its the social housing that could cause the problem ,as it is the councils decision who gets the social housing and the background of some tenants on the social housing list leaves a lot to be desired.


----------



## whathome

So someone could buy the house that they're renting from the Council under the Tenant Purchase Scheme at a very attractive price with no stamp duty etc.  They could even get a loan from the Council to facilitate this.

[broken link removed]

....and then sell it back to them at a nice profit   

[broken link removed]

Lovely!


----------



## Glenbhoy

wolfie said:


> Yeah, but the spiraling cost of labour, energy, insurance and transportation in ireland is slowly negating the benefits of tax savings.


That I very much doubt - presumably Intel, in common with any other US multinational based here use Ireland to book all (or virtually all) of their EU profits, thus saving billions in tax.


----------



## Glenbhoy

This thread on rent allowance subsidies should be relevant here: 
http://www.askaboutmoney.com/showthread.php?t=29589


----------



## wolfie

[broken link removed]


we will not purchase houses in areas where to do so would exacerbate an existing social imbalance.
Oh really!!!


----------



## tadhg1

Dear Clubman It's about time someone did intervene in the market. There are many areas of life where the market should be constrained. There is a public and ethical aspect to housing and the rights of all citizens to have a roof over their head. Our Goverment has been abysmal in this regard and are happy to let the market rip while they cream their take off of the proceeds.


----------



## Glenbhoy

> here is a public and ethical aspect to housing and the rights of all citizens to have a roof over their head.


In fairness tadgh there are not too many citizens who don't have a roof over their heads.
Certainly the general sentiment on this thread is that there are more than enough vacancies in the rental market to ensure all citizens have the opportunity to have a roof over their heads.


----------



## tententwenty

Glenbhoy said:


> That I very much doubt - presumably Intel, in common with any other US multinational based here use Ireland to book all (or virtually all) of their EU profits, thus saving billions in tax.


Of course said fact has not escaped the attention of other governments (EU and US), and they are looking to close those tax loopholes. Not to mention other countries copping on to what we did and doing it themselves.


----------



## tententwenty

Glenbhoy said:


> In fairness tadgh there are not too many citizens who don't have a roof over their heads.
> Certainly the general sentiment on this thread is that there are more than enough vacancies in the rental market to ensure all citizens have the opportunity to have a roof over their heads.


Well in fairness why should anyone have to rent when there are 275,000 homes sitting empty around the country, not even rented? Property speculation should be discouraged in the strongest terms; it removes a basic human need in order to line the pockets of a few people. Like cornering the market in a particular kind of medicine.


----------



## whathome

From the Irish Independent today:

"*Sell, sell, sell, estate agents tell property investors"*
http://www.unison.ie/irish_independent/stories.php3?ca=9&si=1682160&issue_id=14600

"With rising interest rates and concerns that the property market may finally be beginning to slow, some investors are opting out of the market. "

...it's refreshing to see articles that reflect a realistic state of market.


----------



## Bedsit

*Call to increase stamp duty level (Irish Independent)*

"AUCTIONEERS and home valuers are calling on the Government to raise the stamp duty threshold to €500,000."

http://www.unison.ie/irish_independent/stories.php3?ca=9&si=1682167&issue_id=14600


----------



## exile

whathome said:


> From the Irish Independent today:
> 
> "*Sell, sell, sell, estate agents tell property investors"*
> http://www.unison.ie/irish_independent/stories.php3?ca=9&si=1682160&issue_id=14600
> 
> "With rising interest rates and concerns that the property market may finally be beginning to slow, some investors are opting out of the market. "
> 
> ...it's refreshing to see articles that reflect a realistic state of market.



Call me crazy, but they quote one nameless property investor.  Are they lifting the quote directly from this thread?!

http://www.askaboutmoney.com/showthread.php?p=269023

Edited to add quote:



BigM said:


> when I mentioned to 2 EA relatives of mine that I was planning on selling my invest property I was expecting the usual 'are you mad? don't ever sell property' response.



Irish indo article:
[FONT=Verdana, Arial]'...relatives who work as estate agents advised him to sell. "I was expecting the usual 'Are you mad? Don't ever sell property' response," he said.'[/FONT]

I'm not crazy!  Compare!  They're lifting the news from this thread...


----------



## room305

I wonder are the incredible amount of bearish reports coming from the Irish Independent a sly dig at the Irish Times, who are now wedded to the property market? Perhaps I am being too cynical and it is really just refreshingly honest reporting.

It does read like it was lifted from this thread though.


----------



## whathome

room305 said:


> I wonder are the incredible amount of bearish reports coming from the Irish Independent a sly dig at the Irish Times, who are now wedded to the property market?


 
Could be, or maybe the Irish Independent reports are to balance the excessive amount of vested interest spin that's been coming out of the Irish Times since they bought myhome.ie


----------



## BigM

exile said:


> Call me crazy, but they quote one nameless property investor. Are they lifting the quote directly from this thread?!
> 
> http://www.askaboutmoney.com/showthread.php?p=269023
> 
> Edited to add quote:
> 
> 
> 
> Irish indo article:
> [FONT=Verdana, Arial]'...relatives who work as estate agents advised him to sell. "I was expecting the usual 'Are you mad? Don't ever sell property' response," he said.'[/FONT]
> 
> I'm not crazy! Compare! They're lifting the news from this thread...


 
The cheeky beggars!!


----------



## Duplex

The Irish Times seems to have adopted a 'head resolutely buried in the sand approach' lifting its head occasionally to utter some panglossian, Goldilocks gibberish.  So comparing the Indo's coverage to the IT's makes the Indo seem uber bearish I guess.


----------



## whathome

Interesting article from MoneyWeek on ECB vs Fed policy:

http://www.moneyweek.com/file/17719/why-the-fed-should-take-its-lead-from-the-ecb.html

"But with every bubble, eventually there’s a trigger that tips the market down. And when that happens, when prices start falling, those heavily-indebted borrowers don’t feel so clever"


----------



## Guest107

tententwenty said:


> Of course said fact has not escaped the attention of other governments (EU and US), and they are looking to close those tax loopholes.



In order to do so they must repudiate tax treaties. This is permissible however only after 5 years notice is given which has not happened yet .

See article 30 of the USA-Ireland Tax treaty for example.

http://www.unclefed.com/ForTaxProfs/Treaties/ireland.pdf


----------



## liteweight

Duplex said:


> The Irish Times seems to have adopted a 'head resolutely buried in the sand approach' lifting its head occasionally to utter some panglossian, Goldilocks gibberish.  So comparing the Indo's coverage to the IT's makes the Indo seem uber bearish I guess.



'Uber bearish'...I think it was last week that people on this thread were calling the Indo a rag and sneering at it's content. They also asked who would read a paper like the Indo. Sneering at the types if you know what I mean.

I seriously doubt the IT would manipulate reporting property news just because they own MyHome. If there's a rush to the market then they're quids in??? 

When I read that the Indo appeared to be copying the content of this thread, I was glad to be honest, because I thought I was going crazy, or experiencing deja vu! I'd swear the BP is doing the same thing.

Therefore these articles are not so much an indictment on the property market, rather an indictment of the low level of journalism!! When a journalist can't do his/her own investigative reporting, without resorting to quoting a thread such as this, then it's just another person's opinion as far as I'm concerned and shouldn't be reported as research/news. Shame on the Indo.


----------



## Guest107

BigM said:


> The cheeky beggars!!



I could insert my usual strong caveats about the "Quality" of Irish Business and Property Journalism in here but I am imminently threatened with a permanent ban from AAM by the Mods if I say anything about any Irish journalist on this Board . 

Hopefully some kind soul may say for me that which I am only allowed to think of privately in future.


----------



## tententwenty

2Pack said:


> In order tro do so they must repudiate tax treaties. This is permissible however only after 5 years notice is given which has not happened yet .
> 
> See article 30 of the USA-Ireland Tax treaty for example.
> 
> http://www.unclefed.com/ForTaxProfs/Treaties/ireland.pdf



Nope, thats only 6 months notice they need to give, but they can only give it after the first five years of the treaty have passed. Seeing that it was signed in 1997, they can change it any time they feel like. And even if they don't change it, there are many other ways they can censure companies that they feel are hiding profits from the taxman. Which they are, in all honesty.


----------



## exile

liteweight said:


> Therefore these articles are not so much an indictment on the property market, rather an indictment of the low level of journalism!!



Yes, it's very lame journalism.  One must assume (given BigM's response!) that they didn't even call to confirm the quote or the information.

More interesting though is that many people have pointed out that despite how popular this thread is on here, it's still got a very limited readership.  Now that one of the posts has essentially been transferred to the Indo (and however many more people read it on unison.ie without buying the paper) - the audience has just got a lot wider.


----------



## Guest107

*The September Selling Season Opens with a REAL Bang*

lots and lots and lots of new listings here

lots since friday lest one ask


----------



## whathome

*Re: The September Selling Season Opens with a REAL Bang*



2Pack said:


> lots and lots and lots of new listings here
> 
> lots since friday lest one ask


 
There's a hell of a lot of property coming on the market, far more than in the Spring...and a lot of supply from last season still hasn't sold.

Also - asking prices don't appear to have risen between the seasons - even with new builds.


----------



## bearishbull

Bedsit said:


> *Call to increase stamp duty level (Irish Independent)*
> 
> "AUCTIONEERS and home valuers are calling on the Government to raise the stamp duty threshold to €500,000."
> 
> http://www.unison.ie/irish_independent/stories.php3?ca=9&si=1682167&issue_id=14600


They know whats coming.


----------



## bearishbull

Lots of bearish articles in media lately and this either reflects public sentiment or public sentiment will be affected by it, also consumer sentiment is still weakening. A few more months of articles like the indo one today and from last week will turn enough people negative to affecte market. Even if the numbers of people buying houses to live in doesnt fall the market can still fall if the investors (40% of market) cut down on their purchases/sell up a percentage or all of their properties.


----------



## Remix

> Banks and other finance houses lent out €4.7bn last month alone, according to the latest Central Bank and Financial Services Authority report.


 
Amazing to think that after the destruction of Lebanon where, as the Israelis claimed, the "rubble bounced on rubble" and 95% of highways networks and bridges were put out, that the estimates of total cost to rebuild is _*less*_ than the amount that Irish people _*borrowed*_ in the month of July !!


----------



## bearishbull

Remix said:


> Amazing to think that after the destruction of Lebanon where, as the Israelis claimed, the "rubble bounced on rubble" and 95% of highways networks and bridges were put out, that the estimates of total cost to rebuild is _*less*_ than the amount that Irish people _*borrowed*_ in the month of August !!


Yeah costs of building in middle east are dirt cheap, the arabs import cheap workers from rest of asia as well as local labour at minimal rates of pay.


----------



## phoenix_n

IMO, the market has now unoffically crashed.

Congrats to anyone who has made, what will become, the old money of years to come.


----------



## soma

liteweight said:


> '...I think it was last week that people on this thread were calling the Indo a rag and sneering at it's content. They also asked who would read a paper like the Indo. Sneering at the types if you know what I mean.



I think you're getting yourself confused between the Indo and the *S*indo.


----------



## TallSpoon

phoenix_n said:


> IMO, the market has now unoffically crashed.


Why?


----------



## Guest107

the Independent group has made a decision that the property market 'as is' and 'as has been' for the past few years is not in the national interest.

The Daily Indo seems to have 2 downers a day for our flipping friends, irrespective of the provenance of some of that material  as was well spotted by exile and BigM who originated the AAM comment published in the Indo today .....or maybe BigM IS the Indo   ?    eh ??? 

I would say that this change of heart occured around when the CSO figure of 275k houses or 17 % of the national stock being EMPTY  was revealed in June.

The Indo are correct of course.  This insanity is not in the national interest at all ...however I dare not read the sunday version given the size of the thing


----------



## whathome

phoenix_n said:


> IMO, the market has now unoffically crashed.
> 
> Congrats to anyone who has made, what will become, the old money of years to come.


 
Nah - I'd say there's still some time to get out, houses that are priced well are still selling. 

Although I did see what is probably the most bearish indicator to date IMO.  Marginal asking price drops from €395,000 to €381,000 on 3-bed-semi's.  I had seen plenty of price drops in the high/medium end but only started to see price drops in the sub 400k bracket very recently.


----------



## Guest107

whathome said:


> Nah - I'd say there's still some time to get out, houses that are priced well are still selling.



Thats a *KEY* stamp duty bracket (€381k) meaning that they do not *expect* it to hold up above that with some shilly shallying over contents to 'finesse' the deal <cough> . 

It would have held over that in the spring .


----------



## whathome

2Pack said:


> Thats a *KEY* stamp duty bracket (€381k) meaning that they do not *expect* it to hold up above that with some shilly shallying over contents to 'finesse' the deal <cough> .
> 
> It would have held over that in the spring .


 
Here's an example: New price €381,000
[broken link removed]=

Old Price €395,000 - google cached in July (3rd up from the bottom):


----------



## cjh

The price on this is going up?! and it's been on the market for months?!

Current (€395,000)
*http://www.daft.ie/searchsale.daft?...earch+%BB&more=&tab=1&s%5Bsearch_type%5D=sale*

*Previous (€375,000)*


----------



## whizzbang

cjh said:


> The price on this is going up?! and it's been on the market for months?!
> 
> Current (€395,000)
> *http://www.daft.ie/searchsale.daft?...earch+%BB&more=&tab=1&s%5Bsearch_type%5D=sale*
> 
> *Previous (€375,000)*





Don't you know property prices _always_ go up in Ireland! We are magical. St Patrick drove the property crashes out.


----------



## whathome

cjh said:


> The price on this is going up?! and it's been on the market for months?!
> 
> Current (€395,000)
> *http://www.daft.ie/searchsale.daft?...earch+%BB&more=&tab=1&s%5Bsearch_type%5D=sale*
> 
> *Previous (€375,000)*


 
Edit - I see it now, the priced changed within a few days.  Interesting that they want to sell it as soon as they buy it and they're stressing it's a private sale.


----------



## cjh

whizzbang said:


> Don't you know property prices _always_ go up in Ireland! We are magical. St Patrick drove the property crashes out.


 


Maybe it's because Irish people will only buy when they see prices going up!


----------



## Bedsit

I found an easy way to look at masking of price drops on Daft. (Some of you may have already figured this out). 

When searching for a property put in the lowest available figure into the "Max Price" box (currently 100K). This will then show up all the houses that have "Price on Application" as the asking price. As before check the Google cache to see the original asking price or if the house has gone from rental to a sell !!


----------



## cjh

whathome said:


> If you're talking about this property: http://www.daft.ie/searchsale.daft?id=125161&search=1
> it looks like the price has not risen.


 
I'm talking about a different property (linked to).

Edit - see you've got the right one now, Whathome.


----------



## whathome

cjh said:


> Maybe it's because Irish people will only buy when they see prices going up!


 
Actually I've seen that work before when the market was still strong earlier in the year, house in Killiney advertised at €995,000 for about six months. They increased the price to 1.1M and it sold in a few weeks!


----------



## TallSpoon

This place in Kildare Town has been for sale for about 6 months at €330K and they have INCREASED the price to €345K

http://www.daft.ie/searchsale.daft?...h_type]=sale&s[refreshmap]=1&search_type=sale

[broken link removed]

Maybe there is still life in the boom yet!


----------



## BigM

2Pack said:


> The Daily Indo seems to have 2 downers a day for our flipping friends, irrespective of the provenance of some of that material as was well spotted by exile and BigM who originated the AAM comment published in the Indo today .....or maybe BigM IS the Indo  ?  eh ???


 
Janeymac! If I was more sensitive I'd have you up for libel  !!

Seriously though, it's impossible to tell if the drop in asking price means the seller is desperate or just they need to drum up interest now the season is on again - especially when price drops to a convenient SD level.


----------



## whathome

TallSpoon said:


> This place in Kildare Town has been for sale for about 6 months at €330K and they have INCREASED the price to €345K
> 
> http://www.daft.ie/searchsale.daft?...h_type]=sale&s[refreshmap]=1&search_type=sale
> 
> [broken link removed]
> 
> Maybe there is still life in the boom yet!


 
It sounds crazy doesn't it - you can't sell your house for six months - so .... increase the price.  I remember an agent telling me in 2001 how frustrated he was because although prices were falling, some vendors were reading reports about prices still rising and insisting on increasing the selling price.  Even though they couldn't sell the house at the lower price!


----------



## cjh

Or maybe they're trying to cover increased costs???!!!


----------



## whathome

BigM said:


> Seriously though, it's impossible to tell if the drop in asking price means the seller is desperate or just they need to drum up interest now the season is on again - especially when price drops to a convenient SD level.


 
I would say it's a bit of both...it really hurts to have to lower your asking price.


----------



## blue01

i finally read all of this thread phew!.....how do you use google cache by the way?....

another report from IIB 

http://www.rte.ie/business/2006/0904/property.html?rss

everything is fine and speculators arent the cause of the price rises....how do they get away with these reports?....notice on the right hand side the related links about IIBs profits...


----------



## beattie

blue01 said:


> another report from IIB
> 
> http://www.rte.ie/business/2006/0904/property.html?rss
> 
> everything is fine and speculators arent the cause of the price rises....how do they get away with these reports?.....


 
Its incredible how these lads aren't given a harder time by the media here. Obviously our paper of record will correct this very soon......


----------



## Guest107

beattie said:


> Obviously our paper of record will correct this very soon......



We'll see what the Independent does to him tomorrow morning ...that what you mean is it not ???!

Google cache is the bottom on a google retrieval , if you google for _Daft House Cavan 250k _you get a result _

if you click the link on the top one it goes to the page, if you look down a tiny netch you see Cached. 
_


> [SIZE=-1]This is G o o g l e's cache of http://www.daft.ie/cavan/cavan/117872/ as retrieved on 1 Sep 2006 00:09:19 GMT.[/SIZE]


 [SIZE=-1] 
While the difference is small in that example  some cache entries can be 2 or 3 months older . It can confirm a movement within that period..[/SIZE][SIZE=-1]
[/SIZE]


----------



## Duplex

Its worth remembering that the Big Daddy bubble that was the US housing market is in full retreat. Some of the coverage is becoming apophrical as the magnitude of the bubble becomes evident. And while the Indo may be making oblique refrences to the end of the Irish Bubble we have yet to see the reporting in the Irish media as grating as this. The one certainty is that the Irish crash will be harder and the consequences far greater than those in the US.

The Globe and Mail Washington DC

*



The housing collapse heard round the world

Click to expand...

*


> But the peak has passed, and the consequences of the deflating bubble are buffeting the housing market, in Washington and across the United States.
> 
> What sold in a weekend here last year is taking months to unload. And increasingly nervous home sellers are slashing prices to get rid of properties before their value sinks even further. One buyer recently threatened to walk away from a signed contract on a $1.6-million house unless the seller took $100,000 off the price to reflect the drop in value since the deal was struck. The seller quickly buckled, fearing the house might be worth even less if put back on the market today.
> 
> “Look how fast prices were going up. The same thing is happening on the way down,” observed Ms. Gaus, who's been selling homes in Potomac for 16 years. “It's a very tough market.”
> 
> The once red-hot housing market has fizzled. And the topic du jour among economists, investors and policy makers is whether the end of the housing boom signals the beginning of the end of a long run for the world's mightiest economy, and by association, the rest of the planet.
> 
> The U.S. housing crash may prove to be the economic equivalent of the canary in the coal mine — a warning of impending danger in an economy that has surged too far, too fast.


 



[broken link removed]


----------



## phoenix_n

TallSpoon said:


> Why?


 
Because the tulip bought for X+4 in the hope of it being worth X+6 in the future, is now, only worth X.


----------



## whathome

Duplex said:


> Its worth remembering that the Big Daddy bubble that was the US housing market is in full retreat.


 
The really scary thing is that our property bubble even makes property in the US look cheap


----------



## Duplex

blue01 said:


> i finally read all of this thread phew!.....how do you use google cache by the way?....
> 
> another report from IIB
> 
> http://www.rte.ie/business/2006/0904/property.html?rss
> 
> everything is fine and speculators arent the cause of the price rises....how do they get away with these reports?....notice on the right hand side the related links about IIBs profits...


 
What RTE fail to realise is that many people are not equipped to dissemble 'marketing speak' from bank ahem 'reports' such as these.


----------



## Duplex

whathome said:


> The really scary thing is that our property bubble even makes property in the US look cheap


 
We have California prices, sorry had California prices.


----------



## phoenix_n

I posted [broken link removed] a while ago. Was 320K now its 280K. 12.5% drop in asking price.

(couldn't find the cache)


----------



## cjh

phoenix_n said:


> I posted [broken link removed] a while ago. Was 320K now its 280K. 12.5% drop in asking price.
> 
> (couldn't find the cache)


 

Found the cache for that, but it's at 300,000....maybe more recent...


----------



## Remix

The Indo reporter that made a story from BigM's comments on this site could not have failed to notice the detection and posting here of falling asking prices.

Mr./Ms. Reporter if you are still reading, can we have a story (front page would be nice!) covering some of the dramatic falls in asking prices going on around Dublin ?

Thanks in advance !

-R


----------



## Duplex

The Seattle Times on the Irish Housing market.

They mention that the average US house costs $251,000 and the average Irish home $400,000. 


[broken link removed]


----------



## Lumpsum

New exchequer returns today show the Government took E2.35 billion in stamp duty from January 1st to August 31 this year.  That compares to E1.65 billion in the same period last year.  The Jan-Aug figure for 2006 annualises to E3.5 billion by my sums - maybe a bit less seeing as the income from sales in the "dead" property period in the summer will be reflected between now and the end of the year.

But the total is around a third of total health spending, and of course stamp duty is only part of the enormous tax windfall the Government gets from the property mania ( they clean up from property through CGT, VAT on construction etc). 

So it's not just the recent investor/FTB who stands to get hammered by the end of the gravy train.  The Government is totally in hock to it. 

 And I'm no expert on the Government's options, but surely if there is anything they can do in the coming budget to keep it going, they'll do it?


----------



## CelloPoint

Duplex said:


> The Seattle Times on the Irish Housing market.
> 
> They mention that the average US house costs $251,000 and the average Irish home $400,000.
> 
> 
> [broken link removed]



Isn't it amazing that we have to read that in a Seattle newspaper? Very good article and insightful for a foreign publication. AFAIC, there's definitely an agreement amongst the Irish newspapers to keep quiet.

I found the statistic that 1/3 of all new housing in Ireland is less than 10 years old interesting.

Also, it was interesting to note the writer commenting on "too many new homes are spoiling the look and feel of the country". I would agree with this 100%. The pitter-patter of ugly cottages in scenic areas is disgusting.

There's a quote at the end from someone saying "We've matured as a nation". If anything, we've shown what fools we really are. We've never been able to manage our own economic affairs, and very soon, we're going to be the laughing stock of Europe/the world and nobody will take us seriously ever again.


----------



## room305

Lumpsum said:


> And I'm no expert on the Government's options, but surely if there is anything they can do in the coming budget to keep it going, they'll do it?



I would say that is not far from a nailed on certainty. Doing something to prop the market is great for the government on several fronts:

- It will be popular (in the short term at least) with people who cannot afford a house
- It will be popular with FF's developer buddies because they can keep flogging and building poor quality overpriced houses
- It will be popular with anyone who recently bought a house because it will validate their decision to do so by pushing prices up further
- Most importantly of all, it will allow them to effectively buy the election without the opposition being able to call them on it (since giving massive amounts of money to FTBs seems to FG's economic policy as well)

Of course, there is only so long that the government can fight the market but unless the government calls a snapshot pre-Christmas election, I am expecting some anti-speculator window dressing along with some major FTB concessions.


----------



## room305

CelloPoint said:


> We've never been able to manage our own economic affairs, and very soon, we're going to be the laughing stock of Europe/the world and nobody will take us seriously ever again.



While the French, Germans and Scandinavian countries can justifiably engage in a little _schadenfreude_ if our economy tanks, I doubt the Americans or the English can really look down their noses at us for indulging in a little housing mania, given their respective positions.


----------



## Calina

"Now, he said, many Irish own not one, but two homes." (from that Seattle article linked above)

The key point however is that many Irish do not own houses at all, and cannot afford to buy them. It's also worth knowing that many Irish owe a significant amount of money to banks for the two homes they own.


----------



## Lumpsum

Brian Cowen just on telly now.  Says property market is "forging ahead". So that's all right then.....


----------



## Duplex

Lumpsum said:


> Brian Cowen just on telly now. Says property market is "forging ahead". So that's all right then.....


 

What was it the captain of the Titanic said just before they hit the berg?.......Oh yeah I remember now, "We're forging ahead".


----------



## whathome

Lumpsum said:


> Brian Cowen just on telly now. Says property market is "forging ahead". So that's all right then.....


 
He would say that - if it doesn't "forge ahead", he's out of a job next May!

The Irish property market has always been talked up by vested interests through the media. 
...look at the amount of "reports" these guys have put out over the past few years: [broken link removed]
It's usually reported verbatim in the media. 

It's the same with IIB. So nothing has changed lately on that front making their impact fairly neutral. 

What has changed is that interest rates have risen four times in nine months and are set to rise another two times before Christmas - next one on 5th October. 
No amount of spin and reassurance from banks, new homes estate agents, politicians etc can prevent the inevitable.


----------



## bearishbull

Remix said:


> The Indo reporter that made a story from BigM's comments on this site could not have failed to notice the detection and posting here of falling asking prices.
> 
> Mr./Ms. Reporter if you are still reading, can we have a story (front page would be nice!) covering some of the dramatic falls in asking prices going on around Dublin ?
> 
> Thanks in advance !
> 
> -R


The indo did report falls in asking prices in glasnevin in june or july, theres a link on here somewhere. Seems to be more widespread now though, I reckon we'll have all those stories in next month or two if the market doesnt enter another last gasp spurt of growth.


----------



## beattie

bearishbull said:


> The indo did report falls in asking prices in glasnevin in june or july, theres a link on here somewhere. Seems to be more widespread now though, I reckon we'll have all those stories in next month or two if the market doesnt enter another last gasp spurt of growth.


 
I can see the IT giving a prominent display to stories such as the one report today from IIB seeing they have such a vested interest in propping up the bubble. Also Cowens comments on the news will have them smiling at IIB/IT etc.....


----------



## room305

bearishbull said:


> I reckon we'll have all those stories in next month or two if the market doesnt enter another last gasp spurt of growth.



I had expected last splurge possibly on the back of an ECB rate pause. Only the media wouldn't call it a pause (which would imply a resumption of raises) they would call it the "top of the cycle". Following which we would see cuts. Buyers who could get mortgages would come out of the woodwork to buy at inflated prices on the expectation that any yahoo would be able to get a mortgage in a year's time, driving prices even higher again.

The crash would then come when in a shock instead of pausing the ECB started to raise again.

However, the market is weakening quicker than I expected and so there may not be a last splurge. I'm in two minds but I guess things will start to become clearer in Jan/Feb of next year.


----------



## whathome

Does anyone here think that a soft landing is possible for the Irish property market?

Although I think it's unlikely to happen, could a soft landing be better for the economy and jobs etc.?

Is it better to have a good clearing of the Irish obsession with property through a crash or temper it with a gentle downturn?


----------



## beattie

whathome said:


> Does anyone here think that a soft landing is possible for the Irish property market?
> 
> Although I think it's unlikely to happen, could a soft landing be better for the economy and jobs etc.?
> 
> Is it better to have a good clearing of the Irish obsession with property through a crash or temper it with a gentle downturn?


 
I don't see how there can be a soft landing given that so many investors will offload once there is no further cap appreciation in the pipeline. I think we are already beginning to see the effects of this albeit at a minor pace.

I agree that we need a good clearout of our obsession with property so that we can become more focused on making real gains in development/ research etc which could lead to sustained growth further down the line (well hopefully)


----------



## Marie

A landing is a landing is a landing........soft or hard is irrelevant!  People seem to think if it's 'soft' then everything is OK.  Unfortortunately not.  The money that has been pumped into property - whether by folks who simply wanted 'their own home' or those who speculated on making profit - has been either locked into property as it was valued at a particular moment in time, or gone into the dividend paid to the bank's shareholders or gone to one of the thousand or so Irish property millionaires.  

As far as I can gather from other threads on AAM the boom hasn't resulted in either the government investing its huge haul of revenue from property taxes into public services and infrastructure nor do those private individuals who profited from the housing boom appear to have invested their haul in Ireland.  The impression is its gone abroad - into foreign property.

Doesn't this mean that whether 'soft' or 'hard' ending to the property boom that's dead money?  Isn't that what posters here refer to when they say 'the party's over' - it's been a time of plenty, new cars, holidays, the good life.............then there's the 'morning after'.  

Difficult to picture what life will be like in 5 - 7 years time but _that _money is gone, gone gone!  Further roaring beasts of any ilk are not anticipated.  I hope people who have bought in the past 5 years can be philosophical about it and enjoy their homes and continue to get employment through which to pay their large, long mortgages.


----------



## bearishbull

Anyone hear the two vested interests spinning on the last word today "price only ever go up" "more price rises are inevitable" "demand is real and not from speculation" etc etc, they are trying to persuade the government not to intervene in market to stop speculation etc. think they are getting worried. 
Listen


----------



## LivinAbroad

Public sentiment towards the housing market.... I know this thread is about Irish sentiment, but I thought some of you might be interested in the US.
I live in Key Biscayne, a wealthy part of Miami, FL. (I rent the smallest apartment on the island!). I thought about buying in 2005 - a local (Irish realtor (Estate Agent) was of the opinion that Key Biscayne was nuclear proof and that prices could only go up or stabilise briefly. But the Fed raised interest rates, the property developers in Miami and SOuth FLorida continued to build and now..... across the board, we're looking at prices that are 10% less than they were last year - best rent money I ever paid!
Miami is a hotspot in property in the US - and prices are falling, even as rents rise (more people are less willing to buy - so they rent, pushing up rental prices, but property prices are falling). Housing inventory is at it's highest in 13 years, and there are still 85,000 units to be completed before June 2007! Developers have started walking away from land options, cancelling large condo projects. The main talk about property now is how big is the bubble and when it will burst.

It is bound to come to Ireland too.I left Dublin / Ireland in 2001 becasue I was priced out of it - I basically felt that it was either a lifetime of scrimping and saving to live in a house I felt was acceptable or 15- 20 years of scrimping and saving to live in a dump. Of course, if I'd realised that the mania would continue, I could have bought and sold and made a tidy sum. Oh well. I've been a bear for years, reading the papers and these threads, my opinion is only strengthened.

The question I would ask is WHY live in Ireland now? Why be an FTB? If you're 22 and fresh out of college or considering becoming an FTB, then leave it,  gain some foreign work experience, (it will always stand to you in your career) wait for the bubble that virtually everyone expects, and then come back to lower property prices?

Vested interest? I own no property anywhere in the world, would like to return to Ireland at some stage, but only when prices become more realistic. Roll on the crash.


----------



## exile

bearishbull said:


> Anyone hear the two vested interests spinning on the last word today "price only ever go up" "more price rises are inevitable" "demand is real and not from speculation" etc etc, they are trying to persuade the government not to intervene in market to stop speculation etc. think they are getting worried.
> Listen



Today FM shouldn't bring on vested interests unchallenged, because it simply amounts to free advertising time for them.  The IPAV (auctioneer) guy seemed to rule out any landing at all, hard or soft.  He said there'll be a "continued upturn" and even managed to get in the suggestion that you should mortgage your home to buy an investment property if your children are off to college - it'll save you on rent.


----------



## Maine

An economy that is borrowing 15 times more for real estate than manufacturing is going to suffer cold turkey. The irish economy needs to borrow 50,000 million just to maintain current activity levels. No wonder FTBs / novice landlords are being spinned stories from banks and IPAV. In the next 12 months it is possible that the private sector, excluding banks, will borrow 100,000 million or equivalent to giving everyone at work 50,000 to spend.

A hard or soft landing is important. Hard landing = nothing to come back to for 5 years.

US house prices are alot lower than Ireland - possibly 50% lower in real terms. So if they are having a hard time .........


----------



## Duplex

Maine said:


> An economy that is borrowing 15 times more for real estate than manufacturing is going to suffer cold turkey. The irish economy needs to borrow 50,000 million just to maintain current activity levels. No wonder FTBs / novice landlords are being spinned stories from banks and IPAV. In the next 12 months it is possible that the private sector, excluding banks, will borrow 100,000 million or equivalent to giving everyone at work 50,000 to spend.
> 
> A hard or soft landing is important. Hard landing = nothing to come back to for 5 years.
> 
> US house prices are alot lower than Ireland - possibly 50% lower in real terms. So if they are having a hard time .........


 
A key issue is measuring the size of the bubble in Ireland relative to other markets. 


But even a soft landing would deal a crippling blow to an economy heavily reliant on construction and equity release to keep the exchequers coffers full and the tills ringing. 

I think the Celtic Tiger has morphed into an entirely different beast, I was trying to think of a suitable animalistic replacement and realised that James Joyce had penned the perfect description; _'The sow that eats her farrow'_ his description of Ireland nearly ninety years ago.


----------



## bearishbull

exile said:


> Today FM shouldn't bring on vested interests unchallenged, because it simply amounts to free advertising time for them. The IPAV (auctioneer) guy seemed to rule out any landing at all, hard or soft. He said there'll be a "continued upturn" and even managed to get in the suggestion that you should mortgage your home to buy an investment property if your children are off to college - it'll save you on rent.


Yeah i wouldnt trust that guy as far as i could throw him, real cute hoor type, "remortage to buy an investment property" WTF!!! and telling people to bring a fair bit of cash to an investment so your rent comes near covering your interest repayments!  does this guy not understand that the cash an "investor" brings to a property purchase is part of the capital invested and has an opportunity cost? He seems to think remortgaging to buy an investment property reduced risk in some way  , I give up on this country, the media let the vested interests spin the news all the time and dont address the fundamentals of the market in detail at all, does no one in media try and rationalise the fact that rents are the same or lower than 6 years ago and incomes havent risen by much while house prices have nearly doubled. Newstalk are the only ones who seem to address the risks and irrational nature of the market by letting jill kerby warn all young FTBs.


----------



## z108

bearishbull said:


> Anyone hear the two vested interests spinning on the last word today "price only ever go up" "more price rises are inevitable" "demand is real and not from speculation" etc etc, they are trying to persuade the government not to intervene in market to stop speculation etc. think they are getting worried.
> Listen




Which link should I listen to in there ? Theres a fair few to listen to.


----------



## bearishbull

sign said:


> Which link should I listen to in there ? Theres a fair few to listen to.


Todays show from 6-7pm


----------



## exile

bearishbull said:


> He seems to think remortgaging to buy an investment property reduced risk in some way



"You're cushioning the effects," to use his exact words.  Effects of what I would love to have known.

The IPAV guide to investment: "Spread your risk by having two mortgages instead of one!"


----------



## bearishbull

I dont know where Mr Hughes got his economics degree but how can he say that recent speculation has not driven price increases? Investors make up circa 40% of market, they are creating excess demand which is driving prices up,if numbers of investors halved overnight a year ago then prices wouldnt have risen by as much but rents may have risen by a greater amount.
His collegue launching the report with him today says a soft landing is on the cards, but we all know that a soft landing is impossibel as the 40% of market that is buying for "investment" will shrink when the slow/zero capital growth arrives next year.

http://www.rte.ie/business/2006/0904/property.html
_However, speaking at a Dublin seminar today Tom Foley, CEO of IIB Homeloans, said a number of factors suggest that house price growth is set to ease back through 2007and that the market was set to undergo some *big changes*. _
_'We are now entering a* transition* from a period of explosive growth. I'd be optimistic that we'll see a fairly gentle *slowdown* to a calmer pace of growth in both lending and in the property market', he said._ 

He would say that wouldnt he! Who beleives the bankers???


----------



## whizzbang

bearishbull said:


> Anyone hear the two vested interests spinning on the last word today "price only ever go up" "more price rises are inevitable" "demand is real and not from speculation" etc etc, they are trying to persuade the government not to intervene in market to stop speculation etc. think they are getting worried.
> Listen



"House prices always go up, just look over the last 100 years"... I nearly crashed the car...

I think people like this are either delusional or evil.


----------



## Duplex

Could it be that Ireland will be the poster child for the next economic downturn?. The worlds media seem to have latched on to the craziness here and spotted a story, that may serve as a parable for the bursting liquidity bubble globally. 





> *Irish Mania for Homeownership Squeezes Consumers as Rates Rise
> 
> 
> ``There's a sense of a bubble,'' says Alan Barrett, senior economist at Dublin's Economic and Social Research Institute. ``One in eight workers are in construction. If there's a wobble, it gives you the potential for a big unemployment increase.''
> 
> Ireland and Spain are likely to be among the hardest hit as the ECB raises rates, according to a February report by JPMorgan Chase & Co. Spurred by record-low interest rates and falling unemployment, Irish house prices rose 335 percent to an average of 303,247 euros from 1995 to 2005, the fastest growth among 18 countries surveyed by the Paris-based Organization for Economic Cooperation and Development.
> 
> Prices in Dublin, as measured by square meter, are now higher than those in London, Zurich and Paris, the OECD says, estimating that Irish housing may be overvalued by as much as 20 percent. The average price of a Dublin home is now 409,000 euros, 56 percent more than outside the city.
> *


 


http://www.bloomberg.com/apps/news?pid=20601109&sid=aYcvATm_m374&refer=home


----------



## G123

> I think people like this are either delusional or evil.


 
I didn't hear the interview but this seems a bit strong...

No doubt that Irish property is at a scary level now but would anyone here actually bet money that a house bought now in a reasonable location in Ireland will be worth less in, say, 10 years time?

IMO home buyers are faced with a dilemma. Do you put off buying a home now in the anticipation of a long anticipated price crash or do you take the plunge if you can.

I waas warned off buying my home in Dublin a number of years ago by an 'expert'. Thankfully I didn't listen.


----------



## Remix

bearishbull said:


> Anyone hear the two vested interests spinning on the last word today "price only ever go up" "more price rises are inevitable" "demand is real and not from speculation" etc etc, they are trying to persuade the government not to intervene in market to stop speculation etc. think they are getting worried.
> Listen


 

Interesting they should claim that prices are based on real demand - not speculation - and then come out in force when the government 
threatens to move against speculation.

This contradiction makes it sound like even they don't believe what they are saying !


----------



## whathome

It looks like there's more pressure on the ECB to continue raising interest rates.

Article from the International Herald Tribune:
*Steel wage demands test ECB on inflation* 
[broken link removed]

"The last time German steelworkers sought a pay increase as big as the one they are seeking now, 14 years ago, inflation surged and Germany's central bank raised interest rates to the highest level in more than a decade"

...and European producer price inflation accelerated in July:
http://www.bloomberg.com/apps/news?pid=20601087&sid=aWlKPMvhRkf8&refer=home


----------



## Duplex

G123 said:


> I didn't hear the interview but this seems a bit strong...
> 
> No doubt that Irish property is at a scary level now but would anyone here actually bet money that a house bought now in a reasonable location in Ireland will be worth less in, say, 10 years time?
> 
> IMO home buyers are faced with a dilemma. Do you put off buying a home now in the anticipation of a long anticipated price crash or do you take the plunge if you can.
> 
> I waas warned off buying my home in Dublin a number of years ago by an 'expert'. Thankfully I didn't listen.


 
Potential buyers should undertake their own research and reach informed decisions as to the wisdom or otherwise of buying residential property in Ireland in the current market.


----------



## exile

No point in commenting any further on what the auctioneer said, 'cause no objective opinion can be expected there.

But regarding the banks, rather than outright lying I think they do believe that a soft landing is possible and therefore they should talk this up.  They also believe that a very hard and painful landing is possible, but can we honestly expect any bank to adopt that as their official line?  They're erring on the side of optimism.


----------



## Duplex

whathome said:


> It looks like there's more pressure on the ECB to continue raising interest rates.
> 
> Article from the International Herald Tribune:
> *Steel wage demands test ECB on inflation*
> [broken link removed]
> 
> "The last time German steelworkers sought a pay increase as big as the one they are seeking now, 14 years ago, inflation surged and Germany's central bank raised interest rates to the highest level in more than a decade"
> 
> ...and European producer price inflation accelerated in July:
> http://www.bloomberg.com/apps/news?pid=20601087&sid=aWlKPMvhRkf8&refer=home


 
Chinese inflation has taken off after a period of price deflation.



> Global economics consultant to Allianz Global Investors Andrew Hunt said: “Over the last couple of months we’ve seen very clear evidence that Chinese export prices are finally rising. Since June and July there has been a significant increase in Chinese export price inflation. We’ve gone from 2 or 3 per cent export price deflation to 6 or 7 per cent annualised rates of export price inflation.”


 
[broken link removed]


----------



## cjh

G123 said:


> I didn't hear the interview but this seems a bit strong...
> 
> *No doubt that Irish property is at a scary level now but would anyone here actually bet money that a house bought now in a reasonable location in Ireland will be worth less in, say, 10 years time?*
> 
> IMO home buyers are faced with a dilemma. Do you put off buying a home now in the anticipation of a long anticipated price crash or do you take the plunge if you can.
> 
> I waas warned off buying my home in Dublin a number of years ago by an 'expert'. Thankfully I didn't listen.


 
A house bought 15 years ago in Japan at the peak of their boom is *still* worth less today than it was then. 
Irrational 'booms' are a different economic phenomena to normal appreciation/inflation effects.


----------



## room305

G123 said:


> No doubt that Irish property is at a scary level now but would anyone here actually bet money that a house bought now in a reasonable location in Ireland will be worth less in, say, 10 years time?



In Dublin? I'd take that bet. You can pick the house. Anything but the red brick period properties.



G123 said:


> IMO home buyers are faced with a dilemma. Do you put off buying a home now in the anticipation of a long anticipated price crash or do you take the plunge if you can.



If you can't afford it don't buy. If you can pay at least 10% upfront, take on a term of less than 30 years and tolerate interest rate increases of +2% over current rates and it is somewhere you will be happy to live for the next ten years, then yes by all means buy.

I'll venture a lot of people buying now aren't buying a "home" per se, they just think it is silly to rent since it is only "dead money".



G123 said:


> I waas warned off buying my home in Dublin a number of years ago by an 'expert'. Thankfully I didn't listen.



And right you were then. But remember, the 'experts' only need to be right once.


----------



## whizzbang

G123 said:


> I didn't hear the interview but this seems a bit strong...



Fair enough "evil" might be a bit strong, but it does annoy me how they recommend people extract equity from their PPR to buy an investment property when it seems clear that even the best case sceanario it a soft landing where you have small capital appreciation and a rent that no where near covers a mortgage.

Either these guys know that this is a bad idea but recommend people to do it anyway or they refuse to acknowledge the numbers that just don't add up.


----------



## phoenix_n

cjh said:


> Found the cache for that, but it's at 300,000....maybe more recent...


 
Cheers. As far as i remember when it was advertised first it was 320K. Worked out last night was its value really is - 170K. !


----------



## cjh

phoenix_n said:


> Cheers. As far as i remember when it was advertised first it was 320K. Worked out last night was its value really is - 170K. !


 

Offer 150 and see if they bite


----------



## G123

> In Dublin? I'd take that bet. You can pick the house. Anything but the red brick period properties


.

Okay then Room 305. Interesting thread below.

You gonna take the plunge?


----------



## Square Mile

Hello All

Do Irish banks and Building Socities still require Indemnity Bonds?  I bought my first house in London during the recession of the early 90s when repossession was widespread.

If the LTV was more than a particular amount, the banks insisted on the borrower buying an indemnity bond for approx STG £1000 to insure them against negative equity, repossession etc.  Banks had a habit of selling repossessed properties for well below the market price, just to recoup some of the losses.  The Indemnity Bond then covered them for the rest.

Most borrowers believed that if they could no longer pay their mortgage that they could give the keys back to the bank and then walk away.  This was an incorrect assumption as the indemnity bond that they bought only covered the bank's losses, and that the insurance company, who indemnified the bank, would in turn chase the initial borrower to recoup their losses.  There were cases when borrowers were pursued for several years by various insurance companies.

Does this practice exist in Ireland?

SM


----------



## room305

G123 said:


> .
> 
> Okay then Room 305. Interesting thread below.
> 
> You gonna take the plunge?



I am selling my PPR.


----------



## BigM

G123 said:


> .
> 
> Okay then Room 305. Interesting thread below.
> 
> You gonna take the plunge?


As Room305 says, he's already putting his money where his mouth is.

FTB's who've compromised on location in the mad scramble to get onto the bottom rung of the ladder could well see themselves stuck in their poorly-serviced areas for a long time to come with no hope of 'trading up' to the promised land of the 2nd-from-bottom-rung.
If you're in the happy position of living in your 'final home' in your preferred location then whatever the market does won't affect you much either way (except on paper). 
If you're not, then selling up, investing the proceeds and renting in your desired area makes perfect sense. Once the mortgage/rent premium has corrected itself you can then think about buying in again. If it doesn't, then the money saved on mortgage interest over the years should be adequate compensation.


----------



## Bedsit

*Economy depends on construction (Irish Times Editorial)*

Looks like the right hand is not talking or listening to the left!!

[broken link removed]

"... Revenues from capital taxation, including stamp duties, capital gains tax and capital acquisition tax, are growing at four times the rate of total taxation and are responsible for the fact that the latter total grew by almost 13 per cent per annum in the year to August. While likely to remain strong until at least the middle of next year, revenue growth to date disguises the growing vulnerability of the revenue base. ...

... The month will come in which stamp duties and capital gains taxes will either stop growing strongly or stall. A sharp correction in the property market may even send such revenues into decline. The next government may have the misfortune of discovering this in a quite unpleasant manner. ..."


----------



## Neffa

bearishbull said:


> http://www.rte.ie/business/2006/0904/property.html
> _However, speaking at a Dublin seminar today Tom Foley, CEO of IIB Homeloans, said a number of factors suggest that house price growth is set to ease back through 2007and that the market was set to undergo some *big changes*. _
> _'We are now entering a* transition* from a period of explosive growth. I'd be optimistic that we'll see a fairly gentle *slowdown* to a calmer pace of growth in both lending and in the property market', he said._


 
Not posted in a bit, just keenly observing how a small number of bears 6-12 months ago seems to be growing rapidly. 

I think this kind of IIB stuff is pretty amusing. I'd like to hear a reporter with some courage ask them:

"Well, Mr. Banker. Irish property values relative to incomes are amongst the highest in the world, if not the highest. On an absolute level, the OECD say that prices in Dublin are higher than London, Zurich and Paris - world cities with considerably greater international business importance than Dublin can claim. Meanwhile while household income - the thing we use to pay for rent/mortgage - is rising at about 5% p.a. and household debt is growing at 30% pa while interest rates are rising. Yet you claim that you can only see constant upward growth in prices at beyond the 5% level. Could you explain how this is possible in fundamental terms?"

To which they'd no doubt say demand, but I'd say that is sentiment based rather than using economic fundamentals to justify valuations. On any measure we are now entering unchartered waters. Interesting times ahead.


----------



## Persius

I didn't hear the interviews on the radio yesterday. Most of the positive talk about property prices that I've _read_ talks about continuing upward prices in 2006 and 2007. Even amongst all the vested interests, I can't remember _reading_ anywhere predictions that property prices would continue to rise beyond 2007. Can any one recall recent reports or statements from banks, EAs etc recently (i.e. in last two months) predicting continuous growth in 2008 to 2010?


----------



## miju

so does anyone know if the property market has "perked up" with buyers or is it just even more sellers piling in


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## Remix

miju said:


> so does anyone know if the property market has "perked up" with buyers or is it just even more sellers piling in


 
Early days so can only offer some anecdotal I'm afraid.

I viewed two houses in D6W in the past few days. They were the glorified Dublin semi-D type that we are told will always be in huge demand (yeah right!)

The first one I viewed on Saturday. It was fresh on the market - 'bout 4 families looking through it. The asking price was definitely placed below the asking price of similiar properties in the area that've been sitting for a while. No offers on yet.

The second one has been sitting on the market for a couple of months. (I also viewed it when it came on the market first) Some things of note:

EA was actively trying to sell the house rather than passively waiting for the bidding to begin
The house has been given a major makeover since I first viewed it and still hasn't attracted a bid.
Even though the asking price has not been publicly reduced, the EA indicated the vendors will now consider offers below asking price.
The house is not priced any higher than what similiar houses were fetching last spring - so not a case of testing out with a big price tag.


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## coinfused

Anecdotal evidence from me too:
House viewed in commuter belt (very north Kildare) in early July. AMV was 360, we bid up to 364, vendor refused so we withdrew. Its still on the market as are 2 more house in next estate that went on the market 2 weeks later for 385/ 390. Same type house in same estate went for 409k in early May. As FTB's we are definitely not buying for the moment.


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## Harrogate

HPC Veteran

Group: Members
Posts: 1,516
Joined: 29-August 04
From: Harrogate.......
Member No.: 336


[broken link removed]
the 335% raise in 10 years is ......around 16% pa compounded!!!!!!!!!!!!!!!!! [broken link removed] 

so hps can rise 16% a year for that long!.....How much have Paddy's wages risen in this time??
The house building rate per million inhabitants is around ten times ours owing to laxer planning regs....
The problem was the introduction of the low Eurozone IRs just as Ireland needed higher IRs..
Brussels had done so much for the Irish they embraced and still embrace everything European including the Euro....
What the hell's going to happen when the German economy picks up speed and IRs rise just as the Irish economy weakens.....The Irish situation has been an accident waiting to happen and the government's done nothing.....

www.housepricecrash.co.uk


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## gearoidmm

> When we moved back to Thailand in August of 1997, the baht was rapidly losing value. Currency speculators had won. In six months Thailand exhausted its 32-billion dollar foreign exchange reserve. Some traders lost millions when Thailand, in a last stand, forced speculators to default on short positions by limiting access to the baht overseas. This only strengthened those with longer positions, most notably George Sorros. The baht was finally floated and quickly sank. In January of 1998, 56 baht bought a dollar. The currency had lost 50% of its value in less than six months.
> 
> Many articles recapping the devaluation still blame Sorros, but the crisis was rooted in crony capitalism and lack of regulation. In 1996 Bangkok Bank of Commerce (BBC) had finally been exposed. Rumors the bank was rotten were rampant. Books had been cooked to hide massive debt. Near the end, in a desperate attempt to re-capitalize, *BBC did what banks never do: pay depositors a higher rate than they collect from borrowers.* The Thailand government bailed out the BBC in 1996 at the cost of 10% of GNP.



This is an interesting article about the financial crisis in Thailand in the late nineties.  It did occur to me recently to ask myself why the banks are now offering interest rates on deposits that are far in excess of the ECB rate and in some cases more than they charge for mortgages.  I'm not saying that we are in this kind of a crisis but I just want to throw it out there and ask why this is happening?


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## room305

gearoidmm said:


> It did occur to me recently to ask myself why the banks are now offering interest rates on deposits that are far in excess of the ECB rate and in some cases more than they charge for mortgages.  I'm not saying that we are in this kind of a crisis but I just want to throw it out there and ask why this is happening?



Was this not always the case? Perhaps if they were offering rates in excess of what they charge for personal loans I'd be more worried.


----------



## bearishbull

gearoidmm said:


> This is an interesting article about the financial crisis in Thailand in the late nineties. It did occur to me recently to ask myself why the banks are now offering interest rates on deposits that are far in excess of the ECB rate and in some cases more than they charge for mortgages. I'm not saying that we are in this kind of a crisis but I just want to throw it out there and ask why this is happening?


Likes of rabobank offer the higher saving rate as a loss leader a friend who works in treasury told me. Then they try to sell you otehr financial products.


----------



## bearishbull

Remix said:


> Early days so can only offer some anecdotal I'm afraid.
> 
> I viewed two houses in D6W in the past few days. They were the glorified Dublin semi-D type that we are told will always be in huge demand (yeah right!)
> 
> The first one I viewed on Saturday. It was fresh on the market - 'bout 4 families looking through it. The asking price was definitely placed below the asking price of similiar properties in the area that've been sitting for a while. No offers on yet.
> 
> The second one has been sitting on the market for a couple of months. (I also viewed it when it came on the market first) Some things of note:
> 
> EA was actively trying to sell the house rather than passively waiting for the bidding to begin
> The house has been given a major makeover since I first viewed it and still hasn't attracted a bid.
> Even though the asking price has not been publicly reduced, the EA indicated the vendors will now consider offers below asking price.
> The house is not priced any higher than what similiar houses were fetching last spring - so not a case of testing out with a big price tag.


Interesting, any other signs of a slow start to the autumn selling season out there?


----------



## whathome

bearishbull said:


> Interesting, any other signs of a slow start to the autumn selling season out there?


 
Asking prices are continuing to drop and there's been a huge build up of inventory - that's about it.

Swords - On June 20th there were *74 *houses for sale on myhome 
Today there are *126* so that's an increase of 52 properties on the market in Swords.

Myhome had *86 *homes for sale in Lucan on 19th April 2006,
today there are *185*, an increase of 99 properties in one area!

Myhome is solid and stable for stats like this - shows a huge build-up of inventory. Asking prices have only recently started to drop in these areas. Inventory usually dries up over the summer, this year it built up instead and the new supply is creating a glut.


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## Maine

Appears the OECD has just completed a massive U turn by suggesting ECB was right to raise rates over the summer compared to its May report - quite a dismal effort even for them
http://www.rte.ie/business/2006/0905/oecd.html

All the strong borrowing data over the summer suggest the housing market will broadly hold thru end of 06. 

IMO in April / May a price of 800k really meant a required offer needed of 900k plus. So you could now have a price of 850k and would accept offer of 850k. Looks like a price rise but is actually a fall.

Think builders have figured out though that phase 2 always has to be priced higher to give impression prices are rocketing and FTBs should get in quick


----------



## Maine

Also does anyone have a take on current status of the lettings market  - this may hold the key to some sentiment in the wider housing market.

Seen some houses that have been for rent all summer and are still to let in a good area.


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## gearoidmm

Maine said:


> Also does anyone have a take on current status of the lettings market - this may hold the key to some sentiment in the wider housing market.
> 
> Seen some houses that have been for rent all summer and are still to let in a good area.



The number of properties available for rent on DAFT in Dublin has fallen froma a high of about 3000 in late June/early July to about 2400.  Probably seasonal due to students looking for accomodation.


----------



## Glenbhoy

> Also does anyone have a take on current status of the lettings market - this may hold the key to some sentiment in the wider housing market.
> 
> Seen some houses that have been for rent all summer and are still to let in a good area.


 I can't say for sure, and I wouldn't want to be accused of being a bull, but whilst there always seems to be a good supply of property in my area, they don't remain on DAFT for too long and rent are up from aprox 1100 this time last year to 1400 this year.  I don't know if the landlords get that money, but that's what they're looking for.  This is partly why I can't understand the claims that many make that it's much cheaper to rent than buy - possibly i suppose in d6, but up northside it's still better to buy!!
Sorry, that's a 2 bedroom apt I'm talking about.


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## bearishbull

dont think the letting market matters much if as reported their are 275k houses are sitting empty.


----------



## whathome

Glenbhoy said:


> This is partly why I can't understand the claims that many make that it's much cheaper to rent than buy - possibly i suppose in d6, but up northside it's still better to buy!!
> Sorry, that's a 2 bedroom apt I'm talking about.


 
Northside: 2 bed apartment? Looks like it's definitely cheaper *not *to buy....

[broken link removed]=

Repayments on 365,000 over 35 years = about €1700/month

To rent the same property is only €1150/month
www.daft.ie/217008 

So landlord subsidises tenant to the tune of €550/month = €6,600/year!

Far cheaper to rent than to buy


----------



## thewatcher

blue01 said:


> i finally read all of this thread phew!.....how do you use google cache by the way?....
> 
> another report from IIB
> 
> http://www.rte.ie/business/2006/0904/property.html?rss
> 
> everything is fine and speculators arent the cause of the price rises....how do they get away with these reports?....notice on the right hand side the related links about IIBs profits...


 
Well well well,just looking at the rte business news on Aertel pg 130 and low and behold but who advertises mortgages for sale on rte.Yes,you've guessed it our old friends IIB homeloans,with 10 pages no less.(i wonder how much that costs)
Surely rte,seen as they fleece most of their revenue from the taxpayers have a duty to report independent news analysis,rather than the vested interest's spin. 
Is this any different to brian dobson getting a wrap on the knuckles for giving pr courses to people who he may have to interview/grill at a later date !.
Of course it's not but i'd forgotten i'd clicked my heels some time ago and was back in ireland,the land of the nods and winks.Silly silly me !


----------



## liteweight

bearishbull said:


> dont think the letting market matters much if as reported their are 275k houses are sitting empty.



This figure is taken from the census and has already been widely discussed on this thread. It is not reliable...at least not a true marker of how many properties are 'sale agreed' but not occupied etc. etc. etc.


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## Harrogate

Ireland's housing market is far more stretched than than any of these except maybe Hong Kong and Japan's a few years back. 
[broken link removed]


----------



## whathome

liteweight said:


> This figure is taken from the census and has already been widely discussed on this thread. It is not reliable...at least not a true marker of how many properties are 'sale agreed' but not occupied etc. etc. etc.


 
It was actually proved to be reliable - there's no way you can get away with saying that 275,000 properties are in the "sale agreed" state so they are vacant!   Census figures are the most reliable way to assess the vacancy rate.


----------



## mortimer33

whathome said:


> Today there are *126* so that's an increase of 52 properties on the market in Swords.
> 
> Myhome had *86 *homes for sale in Lucan on 19th April 2006,
> today there are *185*, an increase of 99 properties in one area!
> 
> Myhome is solid and stable for stats like this - shows a huge build-up of inventory. Asking prices have only recently started to drop in these areas. Inventory usually dries up over the summer, this year it built up instead and the new supply is creating a glut.


Does anyone know the figures for the same areas 1 year ago? Don't think its accurate to compare June's inventory with September.
 In addition it should be considered that these are two of Dublins fastest growing areas. How many extra apartments/houses have been built in the intervening months?


----------



## room305

liteweight said:


> This figure is taken from the census and has already been widely discussed on this thread. It is not reliable...at least not a true marker of how many properties are 'sale agreed' but not occupied etc. etc. etc.



It's reasonably accurate liteweight, I'd vouch for that. The census enumerators can only class a house as "vacant" if the neighbours say that no-one has been living there for a period of longer than 3 months. Where there are no neighbours to verify this the house must look obviously unlived in (e.g. no curtains, furniture etc.). This isn't a case of 275,000 empty homes but 275,000 _vacant_ homes.

It is the single most startling fact to emerge from this thread and few people have realised its implications.

We are currently building more houses than we need to make up for a supposed deficit of housing stock, yet we have more three years of building stock currently lying idle.


----------



## whathome

mortimer33 said:


> Does anyone know the figures for the same areas 1 year ago? Don't think its accurate to compare June's inventory with September.
> In addition it should be considered that these are two of Dublins fastest growing areas. How many extra apartments/houses have been built in the intervening months?


 
Well April is busy season when you would expect high levels of inventory but inventory has more than doubled in Lucan since then.

Developers don't list each house for sale individually so the comparison is accurate.


----------



## redo

whathome said:


> Well April is busy season when you would expect high levels of inventory but inventory has more than doubled in Lucan since then.
> 
> Developers don't list each house for sale individually so the comparison is accurate.


Oh dear, there are 200 properties for sale now in Lucan 79 min price of 400k and 121 with 400k max price.  

PS there were around 45-50 around late Jan early Feb 2006.


----------



## whathome

redo said:


> Oh dear, there are 200 properties for sale now in Lucan 79 min price of 400k and 121 with 400k max price.
> 
> PS there were around 45-50 around late Jan early Feb 2006.


 
it's actually 190 today - there are 10 at 400k 
...since the total has gone over the myhome area limit of 150, it's best to split them by number of bedrooms - max 3 bed and then min 4 bed.

So from 45-50 in Jan (start of last selling season) to 190 now (start of this selling season) is a massive jump in inventory in one area


----------



## redo

whathome said:


> it's actually 190 today - there are 10 at 400k
> ...since the total has gone over the myhome area limit of 150, it's best to split them by bedrooms - max 3 bed and then min 4 bed.
> 
> So from 45-50 in Jan (start of last selling season) to 190 now (start of this selling season) is a massive jump in inventory in one area



Can you check again.  This is what I'm getting with no other filters (Lucan only)

Min price 400k =   79
Max price 400k = 121


----------



## whathome

redo said:


> Can you check again. This is what I'm getting with no other filters (Lucan only)
> 
> Min price 400k = 79
> Max price 400k = 121


 
There are 10 at 400k - you're counting those 10 properties twice.
...best not to use price, use number of bedrooms.

Max beds 3 (no min) : 135
Min beds 4 (no max) : 55
Total : *190*


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## redo

whathome said:


> There are 10 at 400k - you're counting them twice.
> ...best not to use price, use number of bedrooms.


Nope

Select min 400k then no max.
Then select 400k max no min


----------



## redo

Ahh, just reread


----------



## Duplex

Meath County, Daft inventory;

7 July            487
19 July          504
28 August      665
6 September  705

A steady rise in Daft listings as the 'selling season' starts.


----------



## mortimer33

whathome said:


> Well April is busy season when you would expect high levels of inventory but inventory has more than doubled in Lucan since then.
> 
> Developers don't list each house for sale individually so the comparison is accurate.


 
I agree that April is a busy season. Don't disput that. I was referring to the figures you gave for Swords when you compared inventory for June versus September. 


p>


----------



## whathome

redo said:


> Nope
> 
> Select min 400k then no max.
> Then select 400k max no min


 
You are counting 10 houses at 400k twice.  

Min 400k includes 10 at 400k
....and Max 400k includes 10 at 400k.


----------



## redo

whathome said:


> You are counting 10 houses at 400k twice.
> 
> Min 400k includes 10 at 400k
> ....and Max 400k includes 10 at 400k.


Shhh, not soo loud


----------



## whathome

mortimer33 said:


> I agree that April is a busy season. Don't disput that. I was referring to the figures you gave for Swords when you compared inventory for June versus September.
> 
> I just had a quick look at myhome.ie and there are only 150 houses advertised for sale in Lucan - not 185! A drop of 35 in 1 day. When you consider the number of extra houses advertised for sale on myhome.ie (now 64!) compared to the total number of houses in the sprawling suburb of Lucan its very little.


 
Nope - myhome has a search result limit of 150 so you have to split the result. Hard to believe but the real total is 190!
There are so many houses for sale that it has reached the search result limit for one area - I had never seen that before until it happened a few weeks ago.

Houses completed over the past few months will not have been listed individually. Anything else is likely to be from flippers and there's no way that flippers will double the number of houses for sale in an area.


----------



## whathome

mortimer33 said:


> I was referring to the figures you gave for Swords when you compared inventory for June versus September.


 
Swords : There's been a continuous build up of property for sale over the summer rather than the reduction that normally occurs.  One agent in Swords told me recently that they have twice the number of properties on their books now compared with this time last year.  They told me that in one week they had more people backing out than sales agreed.


----------



## phoenix_n

BigM said:


> As Room305 says, he's already putting his money where his mouth is.
> 
> FTB's who've compromised on location in the mad scramble to get onto the bottom rung of the ladder could well see themselves stuck in their poorly-serviced areas for a long time to come with no hope of 'trading up' to the promised land of the 2nd-from-bottom-rung.
> If you're in the happy position of living in your 'final home' in your preferred location then whatever the market does won't affect you much either way (except on paper).
> If you're not, then selling up, investing the proceeds and renting in your desired area makes perfect sense. Once the mortgage/rent premium has corrected itself you can then think about buying in again. If it doesn't, then the money saved on mortgage interest over the years should be adequate compensation.


 
Perfectly said. For the first time by not buying and renting; you will be 'saving' as you will not be incurring the capital depreciation.


----------



## redo

whathome said:


> Nope - myhome has a limit of 150 per area so you have to split the result.  Hard to believe but the real total is 190!
> There are so many houses for sale that it has reached the max result count for one area - I had never seen that before until it happened a few weeks ago.
> 
> Houses completed over the past few months will not have been listed individually. Anything else is likely to be from flippers and there's no way that flippers will double the number of houses for sale in an area.


There is a lot of people now attempting to trade-up from the Lucan area.


----------



## whathome

redo said:


> There is a lot of people now attempting to trade-up from the Lucan area.


 
I think Lucan is a lovely area, lots of 3 bed semi's with gardens...lower density than newer builds.  Friends of mine that live there would only trade up within Lucan itself. 

I would say that lots of people that bought first in the 90's hung on to their first house when trading up.  Now they're letting go.


----------



## Remix

If you can tolerate the nasty cliches like "land hunger" and "fever pitch" in 
this article, you might detect something unwritten running through the text ---> *Oversupply *!!!  


*€500m Dublin site sales rollout*


----------



## Jister

Here is a development of 5 "executive homes" located in "exclusive" Cratloe Co. Clare. Trouble is they are beside an ESB substation and right beside the dualcarraigeway, so lots of noise pollution. Its not in a good location really, on the fringe of Cratloe and the wrong side of the dualcarraigeway so you have to go in a roundaboutway to get to the shops, schools, pubs etc. They have been under construction and on the market for over 2 years and are now sitting there empty and finished, just one has been sold. 

[broken link removed]


----------



## soma

whathome said:


> I think Lucan is a lovely area, lots of 3 bed semi's with gardens...lower density than newer builds.



Personally I detest Lucan - it's like legoland :-/


----------



## CelloPoint

soma said:


> Personally I detest Lucan - it's like legoland :-/



Yup, westside = new northside.


----------



## whathome

CelloPoint said:


> Yup, westside = new northside.


 
that has to be a good thing then 

No area will be saved from falling prices anyway IMO.


----------



## phoenix_n

whathome said:


> No area will be saved from falling prices anyway IMO.


 
Except Good Red-Terrace,Victorian etc (not so much the small ones though) houses within walking distance of the city centre. They will take a slight hit but there will be a trend to go for more period property with no commuting so these will be desirable. In fact if certain properties fell within my bracket in say Glasnevin i would re-enter the market.

But any apartment not within easy commute of Dublin will take,IMO, a massive hit.


----------



## Harrogate

Bubbles are typically defined as markets departing from historical norms ...
(eg House price to rent and house price to salary ratios greater than ever before)
With buyers over-focussed on short-term capital gains!

In the Uk and Australia both of these ratios are about 40% ABOVE the 1970-2000 average and in Spain about 100%.........
and Germany and Japan both 30% BELOW ...
No figures for ireland but i reckon similar to Spain....
Why the heck aren't the Irish investing in German property?......You can buy a castle in the former GDR


----------



## whathome

phoenix_n said:


> Except Good Red-Terrace,Victorian etc (not so much the small ones though) houses within walking distance of the city centre. They will take a slight hit but there will be a trend to go for more period property with no commuting so these will be desirable. In fact if certain properties fell within my bracket in say Glasnevin i would re-enter the market.


 
I disagree - many of the Good Red-Terrace,Victorian etc have been bid up in recent years by wannabe new money types taking on massive IO mortgages to "secure" their trophy home. Also - people who trade up to these properties will be selling something which will be worth far less.

The Irish property market feeds on itself so once the lower end goes, everything else will be affected IMO.


----------



## room305

I don't think there will investment opportunities for a few years yet. However, anyone thinking of buying now for a home to live in would do well to look at the U.S.

Buyers in the formerly "hot" areas like Miami, Las Vegas and San Francisco are getting to drive some incredible bargains (albeit driving the bargains from an originally inflated price).

When Bovale start throwing in a free swimming pool with their new builds or distressed sellers are offering a free Mercedes with their house, then it might be worth buying ...


----------



## Glenbhoy

whathome said:


> Northside: 2 bed apartment? Looks like it's definitely cheaper *not *to buy....
> 
> [broken link removed]=
> 
> Repayments on 365,000 over 35 years = about €1700/month
> 
> To rent the same property is only €1150/month
> www.daft.ie/217008
> 
> So landlord subsidises tenant to the tune of €550/month = €6,600/year!
> 
> Far cheaper to rent than to buy


Not quite, when making such comparisons it's probably better to actually compare like with like, the total mortgage repayment is not comparable with rent, only the interest element, the interest element is circa 1100 per month, in the initial years, dropping substantially in the later years at which time rent will undoubtedly have increased (inflation at worst).
Hence, for the time being buying is cheaper.


----------



## phoenix_n

whathome said:


> I disagree - many of the Good Red-Terrace,Victorian etc have been bid up in recent years by wannabe new money types taking on massive IO mortgages to "secure" their trophy home. Also - people who trade up to these properties will be selling something which will be worth far less.
> 
> The Irish property market feeds on itself so once the lower end goes, everything else will be affected IMO.


 
I hope many others will feel like you so that there will be no more bidders


----------



## Glenbhoy

whathome said:


> I disagree - many of the Good Red-Terrace,Victorian etc have been bid up in recent years by wannabe new money types taking on massive IO mortgages to "secure" their trophy home. Also - people who trade up to these properties will be selling something which will be worth far less.
> 
> The Irish property market feeds on itself so once the lower end goes, everything else will be affected IMO.


 
I agree that these houses went for silly prices because they're trophy homes, however these are exactly the type of people who would have no need to sell.  Remember, when you purchase a property for €15m, you probably haven't got a 100% mortgage


----------



## room305

Glenbhoy said:


> Not quite, when making such comparisons it's probably better to actually compare like with like, the total mortgage repayment is not comparable with rent, only the interest element, the interest element is circa 1100 per month, in the initial years, dropping substantially in the later years at which time rent will undoubtedly have increased (inflation at worst).
> Hence, for the time being buying is cheaper.



See if you start only comparing the interest component of a mortgage then you must also consider the cash flow benfits of renting. If your boiler breaks when you own a house, you don't call a plumber, you call your landlord. Likewise when renting you avoid management charges, insurance and so forth.

The renter can then put this extra cash-flow to work and invest it over a number of years, paying a large lumpsum upfront when re-entering the property market as the rent-to-mortgage ratio returns to a more historical norm.


----------



## whathome

Glenbhoy said:


> I agree that these houses went for silly prices because they're trophy homes, however these are exactly the type of people who would have no need to sell. Remember, when you purchase a property for €15m, you probably haven't got a 100% mortgage


 
True but these houses also end up on the market from probate etc.
The question will be - who's going to buy them not who's going to sell!

Plenty of people are (were) taking out huge IO mortgages on expensive property, these will be hit by rising interest rates and the realisation that capital appreciation is no longer a reality.


----------



## whathome

Glenbhoy said:


> Not quite, when making such comparisons it's probably better to actually compare like with like, the total mortgage repayment is not comparable with rent, only the interest element, the interest element is circa 1100 per month, in the initial years, dropping substantially in the later years at which time rent will undoubtedly have increased (inflation at worst).
> Hence, for the time being buying is cheaper.


 
Not quite - amortized over 35 years, the initial interest payments are about €1250 / month....and that's BEFORE interest rates rise - twice again before Christmas  

...and as room305 points out, cash-flow is an additional benefit to the renter plus no additional costs on the property!


----------



## Remix

While Ireland attempts to base its risky economy on residents selling the same little bits of land and bricks to each other at ever increasing prices, Germany surges ahead with da fundamentals.

Germany is the world's top machine manufacturer.


----------



## whathome

Miju's buddy in Stillorgan must be getting worried...
the 2 bed apartment is due for completion next month - no takers yet!

[broken link removed]

Can a builder force a flipper to close a sale on completion?


----------



## phoenix_n

whathome said:


> Miju's buddy in Stillorgan must be getting worried...
> the 2 bed apartment is due for completion next month - no takers yet!
> 
> [broken link removed]
> 
> Can a builder force a flipper to close a sale on completion?


 
565K. Some people are gonna get burned badly.


----------



## Marie

Remix said:


> While Ireland attempts to base it's risky economy on residents selling the same little bits of land and bricks to each other at ever increasing prices, Germany surges ahead with da fundamentals.
> 
> Germany is the world's top machine manufacturer.



Not only that - the service that comes with it is *************************!  As member of a medical research team some years ago I was responsible for ordering a piece of equipment from Germany.  Not only was it superb, delivered on time but with one of the firm's agents to train the technicians who would use it........thrown in gratis as part of the sale!  The ordering and lead-up (which I had been scared witless about as I don't know German and  specifications were technical and precise) was effortless as communication was excellent; all their personel spoke fluent English.  Its not just the stuff - they have perfected the whole package.


----------



## Glenbhoy

whathome said:


> Not quite - amortized over 35 years, the initial interest payments are about €1250 / month....and that's BEFORE interest rates rise - twice again before Christmas
> 
> ...and as room305 points out, cash-flow is an additional benefit to the renter plus no additional costs on the property!


 
Okay, i checked it is €1250, so in y1 you'd be better off to the tune of €100 p.m.
And I appreciate that there are some cashflow benefits to renting, but it seems to me that you're all neglecting that by yr 20 for example, interest is €770 per month, whilst rent is likely to be approx. (pretending 2.5% p.a increase for 10 of the 20 yrs - very generous I feel) €1500 per month.  Indeed for the majority of the years in question rent will far exceed mortgage interest repayments.  In addition your capital repayments are open to appreciation at some indeterminant rate, which is likely to be equal to that gained on other investments (see discussion yesterday).
And finally, you mention interest rate rises, we don't know what will happen, one shouldn't try and second guess, however granted signs are that there will be 2 more 0.25% increases pre christmas.  After that they're as likely to go down as up, we don't know.  IR rises are a double edged sword in any case, in the longer term, higher interest rates tend to keep people renting rather than buying, thus rents may appreciate at a quicker rate.
In summation, i do not accept that it is cheaper to rent than buy, simply because the facts prove that it is not.


----------



## whathome

Glenbhoy said:


> Okay, i checked it is €1250, so in y1 you'd be better off to the tune of €100 p.m.
> ....
> In summation, i do not accept that it is cheaper to rent than buy, simply because the facts prove that it is not.


 
Sounds like a contradiction to me!



Glenbhoy said:


> whilst rent is likely to be approx. (pretending 2.5% p.a increase for 10 of the 20 yrs - very generous I feel) €1500 per month.


 
Ah - but that's just speculation - we're talking about right now.

And....right now it's cheaper to rent: "better off to the tune of €100 p.m" as you put it


----------



## Glenbhoy

> And....right now it's cheaper to rent: "better off to the tune of €100 p.m" as you put it


And in 2 years time you will be better off buying than renting to the tune of €10 per month, and this margin will increase for every year of your mortgage term.
I made my argument, i addressed all your points, maybe we should just agree to disagree.  You've obviously got it into your head that it's cheaper to rent than buy in this country, no matter where.  Undoubtedly it is in some area's, but not everywhere.  
Finally, can anyone show me area's where rents have fallen in the past year, as from anecdotal evidence i have only seen increases.


----------



## phoenix_n

Glenbhoy said:


> And in 2 years time you will be better off buying than renting to the tune of €10 per month, and this margin will increase for every year of your mortgage term.
> I made my argument, i addressed all your points, maybe we should just agree to disagree. You've obviously got it into your head that it's cheaper to rent than buy in this country, no matter where. Undoubtedly it is in some area's, but not everywhere.


 
When taken into account predicted capital depreciation it is far cheaper at the moment to rent.


----------



## whathome

Glenbhoy said:


> And in 2 years time you will be better off buying than renting to the tune of €10 per month, and this margin will increase for every year of your mortgage term.


 
And the only way this can happen is if the mortgage holder pumps €500 extra per month into the mortgage on top of interest!



Glenbhoy said:


> You've obviously got it into your head that it's cheaper to rent than buy in this country, no matter where.


 
I think it is, unfortunately I have no choice but to trade up - Mrs. Whathome is insisting on it  
The facts say it all - right now it's cheaper to rent!



Glenbhoy said:


> Finally, can anyone show me area's where rents have fallen in the past year, as from anecdotal evidence i have only seen increases.


 
Rents have increased marginally over the past year according to Daft.


----------



## whathome

From RTE:

*800 mortgages issued a day here*
http://www.rte.ie/business/2006/0906/mortgages.html

"The number of mortgages taken out in Ireland is now running at 800 a day - a substantially higher number than previously estimated. "


----------



## phoenix_n

Was shocked to see the price of this in phibs. 550K.

Gonna watch this one to see how fall the price falls.


----------



## mollser

> Region €395,000 - Group of 1 Bed Apartments For Sale
> 
> ****PLEASE NOTE THAT THIS IS A PRIVATE SALE **** We are selling on our one-bed apartment once we complete the sale of it later this year circa October/November 2006. This is a unique opportunity to buy an outstanding one -bedroom brand new and save €1000's off the next launch prices. A highly desirable location in a development that will have retail outlets, bars, restaurants and an Arts Centre. There’s even a concierge to give you a welcome. Built on a 12.5 acre site in Sandyford, it is straight into the city centre via the M50 or the LUAS. Superb convenient location, only 22 minutes on the Luas to Grafton Street. The apartments ...



http://www.daft.ie/searchsale.daft?...earch+%BB&more=&tab=1&s%5Bsearch_type%5D=sale

This is funny, a blatant flipper obviously in a state of flux... I have never seen a more desparate add in my life, sentiment???


----------



## gearoidmm

whathome said:


> From RTE:
> 
> *800 mortgages issued a day here*
> http://www.rte.ie/business/2006/0906/mortgages.html
> 
> "The number of mortgages taken out in Ireland is now running at 800 a day - a substantially higher number than previously estimated. "


 


> In the second quarter of 2006, a total of 53,449 mortgage loans were granted. These loans can be split into five groups - first-time buyers (17.6%), mover purchasers (21.7%), purchasers of residential investment properties (13.3%), re-mortgages (13%) and top-up mortgages (34.4%).


 
This means that according to these figures, investors are now making up 25% of all home purchase mortgages and FTBs are making up approximately 33%.  This would suggest that the numbers of investors is less than we thought.  40% are second time buyers.  I wonder what proportion of these are holding on to their first homes?

Interesting that re-mortgages now make up nearly 50% of all mortgages.


----------



## Bedsit

mollser said:


> http://www.daft.ie/searchsale.daft?...earch+%BB&more=&tab=1&s%5Bsearch_type%5D=sale
> 
> This is funny, a blatant flipper obviously in a state of flux... I have never seen a more desparate add in my life, sentiment???




A better term to describe such people might be "floppers" instead of "flippers"


----------



## swims

mollser said:


> http://www.daft.ie/searchsale.daft?...earch+%BB&more=&tab=1&s%5Bsearch_type%5D=sale
> 
> This is funny, a blatant flipper obviously in a state of flux... I have never seen a more desparate add in my life, sentiment???



I can see these apartments from the office where I work as I happen to be in the highly undesirable building site and car park that is Sandyford Industrial Estate.

The sentiment amongst my colleagues when I told them about this apartment is that the seller has made his money and the apartment will be worth more when the development is finished.


----------



## cjh

swims said:


> I can see these apartments from the office where I work as I happen to be in the highly undesirable building site and car park that is Sandyford Industrial Estate.
> 
> The sentiment amongst my colleagues when I told them about this apartment is that the seller has made his money and the apartment will be worth more when the development is finished.


 

How can the seller have made his money until the apartment is sold?
It's been on daft for months now....

Also is that not 'apartments' - the add refers to a group of apartments?


----------



## swims

cjh said:


> How can the seller have made his money until the apartment is sold?
> It's been on daft for months now....
> 
> Also is that not 'apartments' - the add refers to a group of apartments?



Just reporting the sentiment in my office. As far as they're concerned it's money in the bank. You can't lose on property after all.


----------



## cjh

swims said:


> Just reporting the sentiment in my office. As far as they're concerned it's money in the bank. *You can't lose on property after all.*


 

I feel silly now, I should have known that.


----------



## binman

Those Beacon South Quarter Apartments were lauched at 295k - 350k for the one beds back in April 05.  I work nearby and can remember the queues that extended around the block on the morning of the launch. 

The apartments look to be nearing completion so the flipper must be feeling the impending mortgage beginning to loom over him.  I wonder if he has already spent the 40-80k of 'profit' he thinks he's made.

As for the 'Amenities', well they might be promised but at the moment the only entertainment in the area comes from your car radio as you sit in a traffic jam.

It's a pretty soulless place to work, I can't imagine what it would be like to live here too...


----------



## Chieftain

phoenix_n said:


> Was shocked to see the price of this in phibs. 550K.
> 
> Gonna watch this one to see how fall the price falls.



[FONT=&quot]So was I - I just sold a far superior property one street away for the same money! 

Admittedly I’m very happy with the sale - I did well out of it & am out before the fall [/FONT]


----------



## Dipole

http://www.rte.ie/business/2006/0906/mortgages.html

This report is confusing to me.

They include figures for top-up mortgages and remortgages.

Working off the remainder then FTB make up about 33% of total demand.
Investors 27 to 28% and trader-uppers the remainder.
but the trader-uppers figure probably includes people retaining their original home for rental which would probably tally with what it says lower in the piece that the mortgages for investors and trader-uppers are the biggest in terms of money value and anecdotal evidence from this thread where people recount their experience of bank managers trying to co-erce trader-uppers into retaining their original property while taking out a massive mortgage.

FTBs represent 17.6% of market but 21% of loans advanced so the sums advanced to trader uppers and investors must be huge especially since most FTBs are getting 92 - 95% mortgages.  I would have expected that trader uppers only need maybe 200,000 to get the extra bedroom in a house in a better part of town.  FTB mortgages would be larger than this.

In short these figures don't make sense to me in the way they are presented and appear to be shown in the way they are to give the impression that there is a healthy balance in the mortgage market amongst all the different types of purchasers i.e. it suggests investors aren't really soaking up 40% of the supply.

Sorry if my post is confusing but the figures I'm basing my musings on are confusing too.


----------



## Harrogate

Germany's economy is based on sound fundamentals unlike the Irish and Anglo-Saxon ones......



How much would this pad in Germany cost if it were in Ireland?
It's within commuting distance of Dresden but only has 62 rooms


----------



## Dipole

Regarding the report at http://www.rte.ie/business/2006/0906/mortgages.html 
I think the high value of top-up loans are partly explained by property abroad on which the bank can't secure anything locally.
Top-up mortgages are on average over €90K so I can't see how people can be spending that much money on cars, gardens, holidays, new businesses etc.....
I'm figuring that the FTB figure is the only one in the report that is reasonably reliable and all the others are composed of or hiding borrowing for property investment\speculation here or abroad.


----------



## delboy159

I think I'm going to be sick... What a CASTLE for under 700k!


----------



## elefantfresh

thats insane! or is it us thats insane....


----------



## whathome

Harrogate said:


> Germany's economy is based on sound fundamentals unlike the Irish and Anglo-Saxon ones......
> 
> 
> 
> How much would this pad in Germany cost if it were in Ireland?
> It's within commuting distance of Dresden but only has 62 rooms


 
Nice Castle!

Shame there's no bus stop though - Did you know that Adamstown Castle in West Dublin already has a bus stop? 

[broken link removed]


----------



## Harrogate

whether you value property in relation to how much it would rent out for or how much people in the area earn.....
Irish property is overvalued and German property is undervalued!


----------



## ivuernis

The pendulum has swung towards the bears on this thread noticeably of 
late but I'm beginning to doubt the resolve of the various Central Banks to 
stay the course in fighting inflation if their rate hikes start to hurt in 2007 
despite their protestations to the contrary. I think I may even feel slightly 
bullish. It's unnerving me.


----------



## whathome

ivuernis said:


> The pendulum has swung towards the bears on this thread noticeably of
> late but I'm beginning to doubt the resolve of the various Central Banks to
> stay the course in fighting inflation if their rate hikes start to hurt in 2007
> despite their protestations to the contrary. I think I may even feel slightly
> bullish. It's unnerving me.


 
Don't be unnerved - ECB is rushing to get rates to a neutral level. Interestingly they see neutral somewhere around 4%. Rates at 2% were unusually low but holding them that low for such a long time has fooled Irish buyers into thinking that 2% was normal. 

More indications that ECB will keep raising beyond 3.5% into next year:
http://today.reuters.com/news/artic...6. REUTERS/Alex Grimm (GERMANY)&from=business

Note the comment from ECB's Weber : "There has been no decision to end the process of normalisation by the end of the year"
...they see raising rates as normalisation - rates returning to normal!


----------



## ivuernis

whathome said:


> Don't be unnerved - ECB is rushing to get rates to a neutral level. Interestingly they see neutral somewhere around 4%. Rates at 2% were unusually low but holding them that low for such a long time has fooled Irish buyers into thinking that 2% was normal.
> 
> More indications that ECB will keep raising beyond 3.5% into next year:


 
Thing is 4% is still reasonably low (or on the low side of neutral levels 
so to speak) and I don't think it will be enough to curb real inflation. 

My concern is that the CB's will stop too soon or pause for too long 
due to pressure on economic growth. Inflation may then get seriously 
out of control resulting in a necessity to raise rates by a lot more 
than is currently intended because they stalled on fighting inflation 
too early leaving them no choice but to then go hard and fast with 
rates à la Volcker in the late 70s.


----------



## nacho_libre

Was talking with some colleagues in the canteen at work earlier today. Strangely 
enough we seldom discuss property there but today it cropped up in conversation 
for the first time in over a month. 

General concensus is that anybody contemplating buying a house at the moment 
for whatever reason, (be it to live in or investment etc) are getting nervous and 
doubtful. It seemed unanimous that the end of the boom is upon us. I found it 
interesting that all of us (6 others and myself) were in agreement that it could be 
a risky time to buy. The last time we had this chat the opinions were split. 

If that's the opinion in our canteen, i'm sure it's echoed around many other canteens 
in the country. Maybe??


----------



## whathome

Looks like 2Pack's theory about the back of Balivor was correct...

Balivor in Dublin 18 was withdrawn from auction in May and then quoted €3.35M, now it's been reduced to €2.75M

[broken link removed]=

Original SBpost article listing withdrawal in May:


----------



## whathome

nacho_libre said:


> If that's the opinion in our canteen, i'm sure it's echoed around many other canteens
> in the country. Maybe??


 
I've noticed it too.  I keep my bearish comments to this thread as I don't want to upset my heavily indebted friends/colleagues ... but lately there's been a definite increase in nervousness about the property market.


----------



## mollser

whathome said:


> I've noticed it too.  I keep my bearish comments to this thread as I don't want to upset my heavily indebted friends/colleagues ... but lately there's been a definite increase in nervousness about the property market.



... meanwhile a colleague of mine is rushing to complete the purchase of a one bed ground floor 'luxury apartment'  in Dundrum for just shy of €400k in order to draw down the mortgage before the 6 month drawdown period is up, as she knows she wouldn't get approved for as much now.

I do actually feel nervous/sorry for her, but I dare not enter into 'that' conversation with her...

(now THESE are luxury apartments... http://www.trumpparkavenue.com/ )


----------



## CelloPoint

whathome said:


> I keep my bearish comments to this thread as I don't want to upset my heavily indebted friends/colleagues ...


I've been in the exact same situation many times.

I did try to talk to one of my friends about his recent apartment purchase, but he didn't listen to me - very sensitive stuff. I guess you just don't talk about money in public, it's a private decision that he's made. God help him (25 and mortgaged to 400k for 35 years), that's all I can say.


----------



## glendale

Here's a big price reduction in Glendalough, Wicklow.

It started at 800k
[broken link removed]

then went to 750k


still no dice and is now 690k
[broken link removed]

A reduction of 110K or 13.75%


----------



## whizzbang

CelloPoint said:


> I did try to talk to one of my friends about his recent apartment purchase, but he didn't listen to me - very sensitive stuff. I guess you just don't talk about money in public, it's a private decision that he's made. God help him (25 and mortgaged to 400k for 35 years), that's all I can say.



You cant win, talk to them and you risk an argument, don't talk to them and feel crap for not warning them.


----------



## rob30

phoenix_n said:


> Was shocked to see the price of this in phibs. 550K.
> 
> Gonna watch this one to see how fall the price falls.


 
I live around the corner from there. Cute houses but you would need your head examined to spend that much!


----------



## JohnMac4

Definitely think the market is turning.

Doesn't stop people asking for ridiculous amounts for very ordinary gafs though. Came across this a while ago  [broken link removed]= . Madness.


----------



## bearishbull

Any word on any auctions this week? I know a local house was for auction today. Wonder if it sold well above AMV.


----------



## Guest109

seen todays business news 800 mortgages being taken out  a day ,i think this can only lead  to a big crash


----------



## Duplex

This news from a South African newspaper on the latest Irish 'fools gold' rush. (The italics are mine)


Irish invade Berlin for buy-to-let flats




> The expansion eastwards of the Irish investor follows a trend across Europe with entrepreneurs who made fortunes from the growth of the Celtic tiger economy buying up airports and shopping malls in England; thousands of apartments on the Spanish Costa's and Florida; and hotels and ski chalets in the Balkans. _(These are the markets now flooded with inventory and falling prices where Paddies are floundering in a sea of hard lessons)_
> 
> The Irish are estimated to be in the top three foreign investor nations in Berlin. However, in a city of 3,4-million, where only half of its citizens are working, German observers of the Berlin property market are extremely cautious. (They look at these Paddies and scratch their heads in bemusement)
> 
> Ralf Schoenball, a property expert for the Berlin-based daily _Der Tagesspiegel_, warns that Berlin may not be the best place for Irish investors to buy flats and apartments. "Don't get me wrong here. I have been here since 1983 and I love Berlin. But the economy of this city has shrunk every year since 1996 with one exception: [growth of] 1% in 2000.
> 
> "Because of the shrinking economy there are fewer Berliners working and the incomes of the households are decreasing if you take into account the cost of living. For the housing market this means that, as people have less money, an increase in rents makes it harder for them to pay. There are also 100 000 empty flats in Berlin, so tenants can move around and find the cheapest places to rent."
> 
> Morris brushes aside the cautious noises of German observers and says*: "The prospects for **Berlin** look good in the long run.* (No they don’t, the population is falling and aging and incomes are falling along with the birth rate)  * Many of the Germans in business here are too conservative*.


 

Ho hum.

[broken link removed]


----------



## RiceCakes

> But the economy of this city has shrunk every year since 1996 with one exception: [growth of] 1% in 2000.






> However, in a city of 3,4-million, where only half of its citizens are working, German observers of the





> Berlin property market are extremely cautious.




But who cares !!




> "The €35-million deal we are trying to secure now would land us with 900 apartments, 30% of which need renovation. What we are offering in all our properties is a net return per annum of 7% from rental incomes,"


I don't know wheter to laugh or to cry as the total utter complete madness, and am a little ashamed to call myself Irish when this kind of insanity is spreading to other shores where the locals have sense but now this Irish pyramid money is going to distort their market. 
What about the locals that are trying to get on the property ladder?!! - Irish pyramid money is pricing them out.

God, the soon our lunacy/greed has cold water poured over it the better for all concerned.

What expecially galls me is that all this is being funded by the FTB'rs at the bottom of the pyramid with their 35 year 100% dual income slavery mortgage rates.


----------



## onekeano

bearishbull said:


> Any word on any auctions this week? I know a local house was for auction today. Wonder if it sold well above AMV.



Clare Road, Drumcondra was sold at auction today by GWD - guiding €1mn it sold under the hammer @ €1.35mn

Roy

Several other interesting ones coming up over the next few weeks in Glasnevin / Drumcondra for auction.......


----------



## whathome

onekeano said:


> Clare Road, Drumcondra was sold at auction today by GWD - guiding €1mn it sold under the hammer @ €1.35mn


 
I would have expected that to go for much more than €1.35M

The last one auctioned on Clare road was St Judes, No 19 Clare Road - it sold for €1.26M but that was in  (Edit: April)  2005, over a year ago.


----------



## onekeano

whathome said:


> I would have expected that to go for much more than €1.35M
> 
> The last one auctioned on Clare road was St Judes, No 19 Clare Road - it sold for €1.26M but that was in August 2005, over a year ago.



Whathome - it went 35% over the guide! The house had a great back garden (well loads of potential anyway), but the 4th "bedroom" wouldn't actually house a single bed and was really only fit for an en suite to the master bedroom. I reckon it needed 200k+ (and 6-9 months) to get it to a decent standard. So, 1.35 + .200 + .120 for stampers brings total cost to almost 1.7mn - think that's questionable in terms of value. Oh and getting PP for the alterations might not be a piece of cake either - the 2nd last one on that road was sold 3-4 years ago and the buyers have still not moved in. Hope it works out for the buyers - brave people.

Roy

Roy


----------



## tententwenty

onekeano said:


> Whathome - it went 35% over the guide! The house had a great back garden (well loads of potential anyway), but the 4th "bedroom" wouldn't actually house a single bed and was really only fit for an en suite to the master bedroom. I reckon it needed 200k+ (and 6-9 months) to get it to a decent standard. So, 1.35 + .200 + .120 for stampers brings total cost to almost 1.7mn - think that's questionable in terms of value. Oh and getting PP for the alterations might not be a piece of cake either - the 2nd last one on that road was sold 3-4 years ago and the buyers have still not moved in. Hope it works out for the buyers - brave people.
> 
> Roy
> 
> Roy


Economic Darwinism?


----------



## whathome

onekeano said:


> Whathome - it went 35% over the guide!


 
Does anyone take auction AMV's seriously?

We stupidly attended an auction earlier in the year where a property had an AMV of €890,000.   It sold for €1.34M.


----------



## whathome

onekeano said:


> The house had a great back garden (well loads of potential anyway), but the 4th "bedroom" wouldn't actually house a single bed and was really only fit for an en suite to the master bedroom. I reckon it needed 200k+ (and 6-9 months) to get it to a decent standard. So, 1.35 + .200 + .120 for stampers brings total cost to almost 1.7mn - think that's questionable in terms of value. Oh and getting PP for the alterations might not be a piece of cake either - the 2nd last one on that road was sold 3-4 years ago and the buyers have still not moved in. Hope it works out for the buyers - brave people.


 

Today's sale, 11 Clare Road, Sold for €*1.35M* : [broken link removed]=

It sounds like it was in very similar condition to the last one that sold on Clare Rd, No. 19 St Judes....
[broken link removed]

Interestingly, the AMV for No. 19 Clare Road was *€800,000* and it was sold by Lisney for €*1.26M*, a year and a half ago. It was actually sold in *April 2005.* 

So very similar properties only a few doors away from each other in similar condition sold 18 months apart with an increase in price of only 7%.

If I was the vendor, I would have been very disappointed with the result today comparing it to the previous sale 18 months earlier. Very much at the lower end of expectations I would think.

There's a pic on No 19 Clare Road in this Lisney half season report from 2005. (Search for Clare).
[broken link removed]

So either Redbricks in Drumcondra are underperforming the property market in general or today's sale of No. 11 at €1.35M could be more evidence that the market is weakening.


----------



## bearishbull

whathome said:


> It sounds like it was in very similar condition to the last one that sold on Clare Rd, No. 19 St Judes....
> 
> [broken link removed]
> 
> Interestingly, the AMV for No. 19 Clare Road was *€800,000* and it was sold by Lisney for *1.26M*, a year and a half ago. It was actually sold in *April 2005.*
> 
> So very similar properties only a few doors away from each other in similar condition sold 18 months apart with an increase in price of only 7%.
> 
> If I was the vendor, I would have been very disappointed with the result today comparing it to the previous sale 18 months earlier. Very much at the lower end of expectations I would think.
> 
> There's a pic on No 19 Clare Road in this Lisney half season report from 2005. (Search for Clare).
> [broken link removed]


If they werent happy why didnt they withdraw it? or are they panicking? There are two different types of house on that road, are you comparing like with like?


----------



## Maine

AMVs and guides - designed for one purpose only ....to get 3 or more bidders competing in a fervoured auction room.

Drumcondra for 1.7m euros or US$ 2.2m. As per Ricecakes it reminds me of serfdom - 30 years of hard dual labour to freedom.  Assuming a deposit of US$200k ( low I know) total repayments over 30 years would approach US$4m.  What a result for the banking industry.


----------



## bearishbull

bearishbull said:


> If they werent happy why didnt they withdraw it? or are they panicking? There are two different types of house on that road, are you comparing like with like?


Actually i just looked they are identical ,unless the inside of one needs more work done than other, this is a bad result alrite, 7% rise in nearly 15 months when homes in area were rising at 25% per annum early this year. A house near me and close to clare road went from 500k to 750k between Jan05 and May06. Why hasnt this house increased by similar? mmmmm


----------



## whathome

bearishbull said:


> Actually i just looked they are identical ,unless the inside of one needs more work done than other, this is a bad result alrite, 7% rise in nearly 15 months when homes in area were rising at 25% per annum early this year.


 
They were more or less identical, even had the same length garden.  Both needed modernisation.

Very weak result IMO and vendor must have been very keen to sell if they had a reserve of only 7% (max) above previous sale in April 2005.


----------



## bearishbull

whathome said:


> They were more or less identical, even had the same length garden. Both needed modernisation.
> 
> Very weak result IMO and vendor must have been very keen to sell if they had a reserve of only 7% (max) above previous sale in April 2005.


Can we assume sentiment has changed? I'd expect a red brick property in good location to increase by a lot more considering what other houses in area have increased in value by.


----------



## liteweight

bearishbull said:


> Can we assume sentiment has changed? I'd expect a red brick property in good location to increase by a lot more considering what other houses in area have increased in value by.



There's often a huge difference in red brick houses even when located on the same road. For example there are two houses on our road at the moment, both owned by people in their 70s. If put up for sale tomorrow, both would require modernisation but whereas one would need a new kitchen, the flowery wallpaper and carpets stripped out and perhaps a new bathroom; the other needs all this plus rewiring, plumbing, central heating and a new roof!

If they went for sale, I've no doubt the AMVs would vary considerably.


----------



## onekeano

bearishbull said:


> this is a bad result alrite, 7% rise in nearly 15 months when homes in area were rising at 25% per annum early this year. A house near me and close to clare road went from 500k to 750k between Jan05 and May06. Why hasnt this house increased by similar? mmmmm



I think what we have here is either scaremongering or a general lack of understanding. I'm not a bear, on the current market but there are a number of issues that need to be taken into account. 
- the house made 35% over the guide and people are saying that this is a bad result - so what would have been a satisfactory result 60% / 80%?
- the previous one on Clare Road made a bumper price (think it was mentioned earlier here it went 58% over the guide). This I understand was due to exceptional personal circumstances on behalf of the buyer.
- Prior to that, the last house before that one the road was sold for 625k so taking the logic of "the last house sold for xx so this should have gone up by xx" is crazy.  Yesterday's auction achieved 725k more than the 2nd last house sold on the road (or 116%)

Roy


----------



## whathome

onekeano said:


> BB, we'll know the state of the market on 6th of September after this [broken link removed] goes under the hammer. *Last one a couple of doors away went for €1.27m so that's the benchmark.*
> 
> If you are referring to the 2 on Mobhi Botharinn I think they are being pitched very high as a result of the auction for the 3rd on that made €750 - crazy price!
> 
> So it's hold you breadth till Sept 6th.
> 
> Roy


 
Roy, 
It was you that made the comparison in the first place! (see above) 

So a house is auctioned 18 months after an identical one and only achieves 7% appreciation....
and you call that scaremongering? You were the one that wanted to use it as a barometer, not us.

So if we can't compare it to the previous house, what is a fair comparison? Everyone knows that AMV's are a joke.

Maybe when you made the original post above you didn't take the date that the previous house sold into consideration?

So in your original post, you said that the other house is *the benchmark *but now you know the auction result was weak, you say it was *due to exceptional personal circumstances .... *which is it?


----------



## onekeano

whathome said:


> So a house is auctioned 18 months after an identical one and only achieves 7% appreciation....and you call that scaremongering? You were the one that wanted to use it as a barometer, not us.



I certainly would have used it as a barometer but given what I knew about the previous 2 houses I would not have expected a price much higher than the previous one (St Judes?). In fact, an agent (not the selling agent) advised me that they believed it would go 1.3-1.4m. I would have been interested myself only the work required and the stampers to me meant it represented poor value.

Overall I would have thought the vendor was happy given the price of some other houses in the general area at present - fair play to them.

Roy


----------



## whathome

onekeano said:


> fair play to them.


 
Absolutely - fair play to them.

...but it's not fair to set us up to use an auction as a barometer of sentiment and then accuse us of scaremongering when we analyse the result.

So anything that doesn't paint a lovely rosy picture of the Irish property market is scaremongering?  Maybe we should all take "make-believe" XXXXXXXXXXXXXXXXXXXX before posting here


----------



## robd

More bearish and very bearish articles in the Indo today

[FONT=Arial, Verdana, Arial]*Interest rate hikes put the brakes on house spree*[/FONT]
http://www.unison.ie/irish_independent/stories.php3?ca=9&si=1683365&issue_id=14609

[FONT=Arial, Verdana, Arial]*US wages surge points towards higher US and EU rates*[/FONT]
http://www.unison.ie/irish_independent/stories.php3?ca=186&si=1683406&issue_id=14609

[FONT=Arial, Verdana, Arial]*Is the debt-fuelled world living on borrowed time?*[/FONT]
http://www.unison.ie/irish_independent/stories.php3?ca=35&si=1683414&issue_id=14609

[FONT=Arial, Verdana, Arial]*Property's poll peril*[/FONT]
http://www.unison.ie/irish_independent/stories.php3?ca=35&si=1683456&issue_id=14609


----------



## phoenix_n

rob30 said:


> I live around the corner from there. Cute houses but you would need your head examined to spend that much!


 
Re 550 terrace in phibs - Yep, the EA is following on from prices earlier on this year not realising that the sentiment (IMO) has changed.

This one for 405 i considered buying for 375 (i think) earlier this year but it had retention planning permission issues so fell thru (thank god!). Will be interesting to see how the price changes.


----------



## whathome

robd said:


> More bearish and very bearish articles in the Indo today
> 
> [FONT=Arial, Verdana, Arial]*Interest rate hikes put the brakes on house spree*[/FONT]
> http://www.unison.ie/irish_independent/stories.php3?ca=9&si=1683365&issue_id=14609
> 
> [FONT=Arial, Verdana, Arial]*US wages surge points towards higher US and EU rates*[/FONT]
> http://www.unison.ie/irish_independent/stories.php3?ca=186&si=1683406&issue_id=14609
> 
> [FONT=Arial, Verdana, Arial]*Is the debt-fuelled world living on borrowed time?*[/FONT]
> http://www.unison.ie/irish_independent/stories.php3?ca=35&si=1683414&issue_id=14609
> 
> [FONT=Arial, Verdana, Arial]*Property's poll peril*[/FONT]
> http://www.unison.ie/irish_independent/stories.php3?ca=35&si=1683456&issue_id=14609


 

It's great that they looked for the real story from yesterday's IBF/PWC report.  Even Eddie Hobbs has a few words to say


----------



## phoenix_n

robd said:


> More bearish and very bearish articles in the Indo today
> 
> [FONT=Arial, Verdana, Arial]*Interest rate hikes put the brakes on house spree*[/FONT]
> http://www.unison.ie/irish_independent/stories.php3?ca=9&si=1683365&issue_id=14609
> 
> [FONT=Arial, Verdana, Arial]*US wages surge points towards higher US and EU rates*[/FONT]
> http://www.unison.ie/irish_independent/stories.php3?ca=186&si=1683406&issue_id=14609
> 
> [FONT=Arial, Verdana, Arial]*Is the debt-fuelled world living on borrowed time?*[/FONT]
> http://www.unison.ie/irish_independent/stories.php3?ca=35&si=1683414&issue_id=14609
> 
> [FONT=Arial, Verdana, Arial]*Property's poll peril*[/FONT]
> http://www.unison.ie/irish_independent/stories.php3?ca=35&si=1683456&issue_id=14609


 
Anyone else agree with me that the market has crashed.


----------



## Duplex

robd said:


> More bearish and very bearish articles in the Indo today
> 
> [FONT=Arial, Verdana, Arial]*Interest rate hikes put the brakes on house spree*[/FONT]
> http://www.unison.ie/irish_independent/stories.php3?ca=9&si=1683365&issue_id=14609
> 
> [FONT=Arial, Verdana, Arial]*US wages surge points towards higher US and EU rates*[/FONT]
> http://www.unison.ie/irish_independent/stories.php3?ca=186&si=1683406&issue_id=14609
> 
> [FONT=Arial, Verdana, Arial]*Is the debt-fuelled world living on borrowed time?*[/FONT]
> http://www.unison.ie/irish_independent/stories.php3?ca=35&si=1683414&issue_id=14609
> 
> [FONT=Arial, Verdana, Arial]*Property's poll peril*[/FONT]
> http://www.unison.ie/irish_independent/stories.php3?ca=35&si=1683456&issue_id=14609


 

You can't fault the Indo's coverage of the 'delicate' subject of the global debt tsunami.


----------



## Duplex

As the market is often described in aeronautical terms, (soaring, soft landing, etc.) I would describe the market as approaching a stall. Induced by fuel starvation to the engines (rising interest rates) and too steep an angle of attack (hyper inflation in house prices). The question is whether the pilots can regain control of the aircraft before it drops, spinning towards Terra Firma.


----------



## soma

phoenix_n said:


> Anyone else agree with me that the market has crashed.



Nope, too early for that, I'd agree with Duplex's "stalling" analogy.


----------



## Firefly

My own sentiment on house prices is that we are at a tipping point due to interest rates....I think people are "waiting and seeing"...if rates hold firm then I expect prices to rise by 3-5% over the next 12 months. If they rise by .25% I expect them to remain flat and if they rise by .5% I predict them to fall. Interest rate changes (like inflation) cause uncertaintity in the market resulting in a "look before you leap" mindset.

I don't think there is/will be mass selling as the re-entry costs are too high...it's funny to think that Stamp Duty (as bad as it is) might actually be the one thing holding up the property market  

On the over-supply side...I think developers will scale back to protect margins as will owners of landbanks. There will be instances of builders forging ahead and hitting the wall, but the Sisks, McInerneys and Bovales of this world will adapt.

Firefly


----------



## cjh

I think it'll be a while (< 6 months) before the market realises there's nothing holding it up anymore - a bit like in the cartoons when they run over the cliff and keep going - for a moment......


----------



## delboy159

phoenix_n  -  I think thats why logical bear arguements end up seeming over the top...  You stated that you believe the market has crashed, yet the property in Clare Road went for 1.35m - which people could argue is a technical drop or stall or soft whatever - but it does not signify a crash of any sort - a crash would have to be significant 20%+ drop and certain houses getting no bids even when the house drops it's price by 20%


----------



## mollser

robd said:


> More bearish and very bearish articles in the Indo today
> 
> [FONT=Arial, Verdana, Arial]*Interest rate hikes put the brakes on house spree*[/FONT]
> http://www.unison.ie/irish_independent/stories.php3?ca=9&si=1683365&issue_id=14609
> 
> [FONT=Arial, Verdana, Arial]*US wages surge points towards higher US and EU rates*[/FONT]
> http://www.unison.ie/irish_independent/stories.php3?ca=186&si=1683406&issue_id=14609
> 
> [FONT=Arial, Verdana, Arial]*Is the debt-fuelled world living on borrowed time?*[/FONT]
> http://www.unison.ie/irish_independent/stories.php3?ca=35&si=1683414&issue_id=14609
> 
> [FONT=Arial, Verdana, Arial]*Property's poll peril*[/FONT]
> http://www.unison.ie/irish_independent/stories.php3?ca=35&si=1683456&issue_id=14609



...contrasted with the Irish Times 8 page special, "Invest in Property" report!


----------



## room305

Interesting points Firefly. The cost of re-entry may help prop up the market, so if the government abolishes or relaxes the stamp duty in an effort to bolster a weakening market it may actually result in a crash.

I think public sentiment is digesting the bearish news and probably hearing reports about how it is getting tougher to sell overpriced property. So "stall" is a good analogy. Once they have come to terms with prices no longer rising they will start to focus on the possibility of prices dropping. They may think "they may drop in some areas, but not in good areas". Finally, fear kicks in and you will see drops across the board.

I'm guessing a year from now before the Indo is running "Irish Property Market Crash" headlines.


----------



## phoenix_n

delboy159 said:


> phoenix_n - I think thats why logical bear arguements end up seeming over the top... You stated that you believe the market has crashed, yet the property in Clare Road went for 1.35m - which people could argue is a technical drop or stall or soft whatever - but it does not signify a crash of any sort - a crash would have to be significant 20%+ drop and certain houses getting no bids even when the house drops it's price by 20%


 
By a crash I mean the star went super-nova but we can still see it. It will take (which i have said before) up to xmas for it to be known that the star is in fact gone. But property will still exchange hands, its not like gold where one price affects all.

And i dont believe i am really over the top. There is talk of 'soft landing' etc but what i see is a big balloon squeezed under the armpit of the irish economy which is just about to be burst by a hot needle.

But thats just my sentiment.


----------



## whathome

It looks like recent buyers are really feeling the pressure from rising interest rates.

Here's a thread entitled _"*Interest Rates!!!! Ahhhhhh!!!!*"_ where recent buyers voice concern this week.

[broken link removed]

The opening poster says:
"Six months ago I could have managed with the repayments but now it is going to be tough"
"I have two friends who have bought properties elsewhere and have had to sell due to the rises. Is this the beginning of the end?"


----------



## Duplex

Firefly said:


> My own sentiment on house prices is that we are at a tipping point due to interest rates....I think people are "waiting and seeing"...if rates hold firm then I expect prices to rise by 3-5% over the next 12 months. If they rise by .25% I expect them to remain flat and if they rise by .5% I predict them to fall. Interest rate changes (like inflation) cause uncertaintity in the market resulting in a "look before you leap" mindset.
> 
> I don't think there is/will be mass selling as the re-entry costs are too high...it's funny to think that Stamp Duty (as bad as it is) might actually be the one thing holding up the property market
> 
> On the over-supply side...I think developers will scale back to protect margins as will owners of landbanks. There will be instances of builders forging ahead and hitting the wall, but the Sisks, McInerneys and Bovales of this world will adapt.
> 
> Firefly


 
If the Irish market stalls all bets are off.  Investors will not invest at present yields without the compensation of capital growth, current investors will be exposed to higher finance costs without the compensation of capital growth.  Builders are likely to retreat as demand wanes, with a knock on effect on employment.  The ability of homeowners to utilise equity in their properties will diminish as inflation ends; having a further impact on the economy and employment.   Then we have to consider the wider global economy and the impact that will have on Ireland, the current prognosis is not good.    Pyramid schemes require a constant stream of new entrants to survive, it seems to me that we are approaching a point where new participants are drying up.   If the Irish property market stalls, it will inevitably crash.


----------



## Persius

The third Indo article, "Is the debt-fuelled world living on borrowed time?", is IMHO particularly interesting.


> In the case of the euro area, one reason for concern is that nearly everyone is starting to behave more like the Irish and the Spaniards. While not naming names, ECB President Jean-Claude Trichet was referring to Ireland when he said last week that lending conditions in some markets were "abnormal". The problem for him and the ECB is that the abnormal is beginning to look normal.


I've had this feeling for a while that low interest rates have become the new "neutral". Our whole economy seems to be based on this fact. As a result even central bankers, IMHO, will be wary about raising rates too high. It's hard to seem them rising rates above what they consider "neutral". As a result the old neutral becomes the new top limit.


> Interest rates of 4pc some time next year most certainly cannot be ruled out. But the ECB may find that it is pretty difficult to kill the appetite for debt, once people have got the taste for it. That certainly has been the case with the Bank of England.
> The Old Lady of Threadneedle Street was one of the fastest on her feet, beginning to tighten at the end of 2003, well before the Fed and long before the ECB. She winged the property boom, but she did not kill it. Even with interest rates at 4.75pc, the latest figures show borrowing at a 15-year high, and home loans up 28pc.


I read a comparisson somewhere between rate rises and a frog in water. Put a frog in boiling water and it immediatly jumps out. Put a frog in tepid water and he thinks it is ok. Gradually bring the water to the boil and the frog will not notice the danger to him as the temperature increases, and will continue to feel fine at first. He will then die from overheating before he recognises the danger. I think this gradual notching up of Euro interest rates will have the same effect in the housing market.

So my gut feeling is still that the housing market still has another two or three selling seasons to run, and we will still see price increases, or at least static prices. IF the ECB really does raise rates above neutral levels within the next 9 months, then we may see panic setting in. Someone here had a stalling theory where the ECB rather got frightened of the height at neutral levels and lower growth and then dropped the rates a bit. This then fuelled one more borrowing spurt before the ECB bites the bullet and hikes up rates seriously (probably mid 2008). This looks quite probable to me.


----------



## Bedsit

[FONT=Verdana, Arial][FONT=Arial, Verdana, Arial]*Leixlip and Shannon are spared the worst of the axe*[/FONT] (Irish Independent)

(Interesting snippet from the Indo today. Don't think we have reached the end of the Intel saga just yet)

*http://www.unison.ie/irish_independent/stories.php3?ca=35&si=1683472&issue_id=14609*

"... Over the past few months speculation is growing that Intel Ireland is looking at another loss-making division and there has also been a shift in recruitment tactics by replacing staff workers with contract employees. 

The Leixlip facility is highly profitable for the group - with the exception of its loss-making Ireland Fab Operations (IFO) plant or flash memory division, which manufactures older computer chips or memory chips and employs about 2,000 people. 

It is understood that Intel is planning to sell or spin off its entire flash memory division, which is likely to include the Leixlip IFO. .."
[/FONT]


----------



## delboy159

"By a crash I mean the star went super-nova but we can still see it. It will take (which i have said before) up to xmas for it to be known that the star is in fact gone. But property will still exchange hands, its not like gold where one price affects all.

And i dont believe i am really over the top. There is talk of 'soft landing' etc but what i see is a big balloon squeezed under the armpit of the irish economy which is just about to be burst by a hot needle."

"But thats just my sentiment"

Phoenix_n - I agree with your sentiment above (to an extent).  But things have not "crashed" as you put it - a crash is imminent....  But if the govt props things up or interest rates stay as they are or global fuel prices fall etc. then prices could keep increasing (I don't think any of these will happen - but they could).  So until there are "ACTUAL" signs of a crash, don't go heralding it - state stats as they are and form opinions on that, not the usual bear scare mongering which tends to dilute logical bear perspectives!


----------



## whizzbang

soma said:


> Nope, too early for that, I'd agree with Duplex's "stalling" analogy.



yep, we are at the top of the rollarcoaster, floating in mid air, everyone feeling quesy, drop hasn't started but more and mroe people are expecting it.


----------



## Jister

Firefly said:


> On the over-supply side...I think developers will scale back to protect margins as will owners of landbanks. There will be instances of builders forging ahead and hitting the wall, but the Sisks, McInerneys and Bovales of this world will adapt.
> 
> Firefly


 
If construction scales back we will have countless plasterers, plumbers, blocklayers etc. out looking for work, they will have to price lower to get work, which will feed into lower house prices.

There is due to be 90K completions this year, if it falls to 80K there won't be enough work for all the existing people working in this industry, not to mind schoolleavers and apprentices coming on stream each year.

Due to the nature of our boom, I would guess that the vast majority of people working in construction are under 40, so its not like there is a generation about to retire.


----------



## Duplex

Persius said:


> The third Indo article, "Is the debt-fuelled world living on borrowed time?", is IMHO particularly interesting.
> 
> I've had this feeling for a while that low interest rates have become the new "neutral". Our whole economy seems to be based on this fact. As a result even central bankers, IMHO, will be wary about raising rates too high. It's hard to seem them rising rates above what they consider "neutral". As a result the old neutral becomes the new top limit.
> 
> I read a comparisson somewhere between rate rises and a frog in water. Put a frog in boiling water and it immediatly jumps out. Put a frog in tepid water and he thinks it is ok. Gradually bring the water to the boil and the frog will not notice the danger to him as the temperature increases, and will continue to feel fine at first. He will then die from overheating before he recognises the danger. I think this gradual notching up of Euro interest rates will have the same effect in the housing market.
> 
> So my gut feeling is still that the housing market still has another two or three selling seasons to run, and we will still see price increases, or at least static prices. IF the ECB really does raise rates above neutral levels within the next 9 months, then we may see panic setting in. Someone here had a stalling theory where the ECB rather got frightened of the height at neutral levels and lower growth and then dropped the rates a bit. This then fuelled one more borrowing spurt before the ECB bites the bullet and hikes up rates seriously (probably mid 2008). This looks quite probable to me.


 
I don't think that the ECB pay to much attention to the Irish economy, when making decisions on the most accommodative interest rates for the Euro area.  The ECB will only know that their rate tightening policy is having an impact when it has an impact, (on Germany specifically).  As the article suggests the worlds central bankers may be relying on a cyclical slowdown to help them tackle the inflation monster.  

I'd keep an eye on news that the Chinese have allowed inflation creep up over the past few months.  The deflationary effect of cheap as chips Chinese goods has helped keep a lid on inflation in the west for nearly a decade.


----------



## phoenix_n

delboy said:
			
		

> Phoenix_n - I agree with your sentiment above (to an extent). But things have not "crashed" as you put it - a crash is imminent.... But if the govt props things up or interest rates stay as they are or global fuel prices fall etc. then prices could keep increasing (I don't think any of these will happen - but they could). So until there are "ACTUAL" signs of a crash, don't go heralding it - state stats as they are and form opinions on that, not the usual bear scare mongering which tends to dilute logical bear perspectives!


 
I have formed my opinion that is all based on my own research and instinct. Others can wait for the Indo headline to second theirs.


----------



## whizzbang

Still no sign of a auction resutls section in the Irish Times property section. How many more weeks before this starts to look fishy?

When would they usuall restart that section after the summer season?


----------



## redo

Great analogies lads

Stalling, Super Novae, and boiling frogs.  Expect to see them reprinted in the Sunday property suppliments !


----------



## onekeano

whathome said:


> It looks like recent buyers are really feeling the pressure from rising interest rates.
> 
> Here's a thread entitled _"*Interest Rates!!!! Ahhhhhh!!!!*"_ where recent buyers voice concern this week.
> 
> [broken link removed]
> 
> The opening poster says:
> "Six months ago I could have managed with the repayments but now it is going to be tough"
> "I have two friends who have bought properties elsewhere and have had to sell due to the rises. Is this the beginning of the end?"



WH, you sure you're not trying to pick up a house on the cheap?

Roy


----------



## whathome

onekeano said:


> WH, you sure you're not trying to pick up a house on the cheap?
> 
> Roy


 
lol - nope, trying to sell 2 and buy 1 - so the effect of a moving market is neutral to me unfortunately 

I would love to rent and take advantage of the impending crash though - but won't be able to.


----------



## room305

whathome said:


> I would love to rent and take advantage of the impending crash though - but won't be able to.



No chance of convincing Mrs. Whathome otherwise? Gonna be tough to avoid saying "I told you so" in the coming years but if you can hold your tongue it would be advisable.

Then again, you're selling your investment properties and the new one is a family home so the only issue for you will be that you will end up paying too much for it given the current market. This is in itself will be counterbalanced by selling the other properties at an over-inflated price.


----------



## whathome

room305 said:


> No chance of convincing Mrs. Whathome otherwise?


 
Not a chance, I've tried but it's a non runner 
....but at least selling rather than hanging on to the existing properties is good compared to many trader-uppers who do the hanging on thing.


----------



## rob30

Duplex said:


> As the market is often described in aeronautical terms, (soaring, soft landing, etc.) I would describe the market as approaching a stall. Induced by fuel starvation to the engines (rising interest rates) and too steep an angle of attack (hyper inflation in house prices). The question is whether the pilots can regain control of the aircraft before it drops, spinning towards Terra Firma.


 

To keep the plane analogy going, the plane may be stalling, but as long as the pretty hostesses keep lashing out the free booze to politicians and developers, noone will care!


----------



## Maine

The Irish Times will remain bullish - it has put alot of its eggs in the property basket.

Comparison to US is more relevant IMO than UK.  Interest rates in UK never fell to giveaway levels like Europe and US.  The fact that the UK market is still doing ok with a base rate of 4.75% says something - at this rate Irish property market would be in meltdown.  IMO this is also reflected in fact that UK property prices are relatively alot cheaper than Irish property prices - at least 20% ( due to the higher interest rates).


----------



## Remix

Maine said:


> The Irish Times will remain bullish - it has put alot of its eggs in the property basket.


 
Here's the [broken link removed]of the Irish Times (emphasis mine):

"to publish an independent newspaper primarily concerned with serious issues for the benefit of the community throughout the whole of Ireland free from any form of personal or of party political, commercial, religious or *other sectional control*".

Hmmm.


----------



## Duplex

rob30 said:


> To keep the plane analogy going, the plane may be stalling, but as long as the pretty hostesses keep lashing out the free booze to politicians and developers, noone will care!


 

Well the pilot is reaching for his parachute, the politicians in the back have theirs firmly strapped on and are backing towards the door and the hostess is announcing to the rest of the passengers over the p.a. that  she's just discovered that there aren't anymore chutes.


----------



## Duplex

Remix said:


> Here's the [broken link removed]of the Irish Times (emphasis mine):
> 
> "to publish an independent newspaper primarily concerned with serious issues for the benefit of the community throughout the whole of Ireland free from any form of personal or of party political, commercial, religious or *other sectional control*".
> 
> Hmmm.


 
And guess who is on both the Trust and Board of The Irish Times............

*David Went,*
*Group Chief Executive,*
*Irish Life & Permanent.*

Well, well, well. There's a surprise. 
 



[broken link removed]


----------



## phoenix_n

The Irish times _will _report on the facts as the pertain. To do otherwise would risk more than an investment in myhome.ie !


----------



## Remix

Duplex said:


> And guess who is on both the Trust and Board of The Irish Times............


 
Excellent stuff !

The flying analogy reminds me of the gag in the movie "Airplane" when the hostess asks the passengers to assume crash positions. When she looks back she sees the passengers spread over the floor, upside down on seats etc. - all in their crash positions.

Property interests of Ireland: assume crash positions !


----------



## bearishbull

Just saw the front page of the Indo in the shop, some guy saw the headline and looked a bit worried and picked up the paper to read it,i then left. A few more months of headlines like this and sentiment will change even more significantly than it has to date.

Maybe someone should write to geraldine kenny or whatever her name is and get reassurances that the irish times won't shy avoid from reporting the facts in the property market.


----------



## Persius

I think many posters are being too harsh on the Irish Times. It's true that it hasn't run any overtly negative articles on Irish property. And it's true that their headlines have a more positive spin than the Indo. However if you read the content of their articles, then it is quite balanced IMHO.

Again it is true that some articles are just "reporting the news". So if some economist makes a big press statement, the IT reports it. However when they do feature pieces, or opinion or editorial pieces, then there is usually a good balance. Some examples in today's paper would include the article from Edel Morgan in the property supliment about courses in property investments. She clearly states that it may be too late to bank on making money on Irish property. Similarly the "worth the investment" piece has clearly stated for months now that rents only barely cover IO mortgages

In another suplement in the paper a London developer wonders where the Irish are getting all the money to invest in property in London. The journalist (forget who) states that it is coming on the back of rising values of people's PPR, allowing them to borrow huge sums. She then clearly states that this is a very risky thing to do, and doesn't recommend it.

In an editorial the other day, the IT also warned of stagnant or even falling prices.

The bottom line is that the Indo is going for dramatic headlines whilst the actual market is still hanging on the edge. The IT will only start printing dramatic headlines when we experience dramatic events - e.g. real substantial falls in house prices, real increases in builders going bust, real rising unemployment. In the meantime many journalists may already be bracing themselves for the impending explosion. But as it hasn't actually happened it isn't news yet.

Anyone who _reads_ the IT, as distinct from just scanning the headlines, will know that all is not rosy in the property garden. These people should be able to come to their own conclusions and don't need spectacularly negative headlines.

Disclaimers:
I've no relationship to the IT (but I do think it's a good paper)
I've no vested interest in seeing the property boom continuing, but expect it to do so into mid 2007.


----------



## room305

The Independent might be doing the country a service by hyping up a property crash before it actually happens. The more weary people are, the less likely they are to engage in reckless behaviour. Someone had to call it and I'm glad they did.

Funnily, if they are negative enough in their comments, they may help engineer the "soft landing" scenario (unlikely but possible).

Although I'm sure their bearishness (compared to the rest of the media here) has not gone unnoticed by the developer's party, Fianna Fail. Think they've got a good scapegoat there if things go the way of the U.S.


----------



## phoenix_n

Reduced from  to [broken link removed]. Its bad stock but as supply increases this is where you notice the changes first.


----------



## whathome

This house reduced by €1,000,000  ...

Any takers?

Was €8,500,000:


Now only €7,500,000
[broken link removed]=


----------



## CelloPoint

redo said:


> Great analogies lads
> 
> Stalling, Super Novae, and boiling frogs.  Expect to see them reprinted in the Sunday property suppliments !



How about canaries in the gold mine, tsunamis and potatoe famine?

Copyright, CelloPoint, 2006.

http://www.askaboutmoney.com//showpost.php?p=255326&postcount=1372
http://www.askaboutmoney.com//showpost.php?p=261516&postcount=2272
http://www.askaboutmoney.com//showpost.php?p=266067&postcount=2765

Gee the server seems to be having a bit of a hard time today - this thread has grown into a bit of a Frankenstein - it seems to be getting even more popular. We're heading for 200k hits faster than the first 100k hits. Even the main-stream media are reading this thread!

Poor 2Pack appears to have been banned. Anyone know why?


----------



## miju

robd said:


> [FONT=Arial, Verdana, Arial]*Interest rate hikes put the brakes on house spree*[/FONT]
> http://www.unison.ie/irish_independent/stories.php3?ca=9&si=1683365&issue_id=14609



in addition to this did anyone see the article in page 21 todays independant about the award winning construction company Delta Homes which went into recievership yesterday citing a decline in their core market as the main reason

just to pick at the figures they provided

28% of mortgages are for 2nd time buyers
21% are FTB
19% are investors with the rest of the percentage made up of people topping up mortgages / refinancing

with the peak in the market being / close to being called one would only imagine that the percentage of investors will drop further as capital appreciation pretty much becomes negligible , now couple that with affordability being a major concern for FTB hypotethically the figues early next year could look like the following

28% of mortgages are for 2nd time buyers
15-19% are FTB
5-9% are investors with the rest of the percentage made up of people topping up mortgages / refinancing

the figures above leaves an overhang and effectively turns the market into a buyers market which will lead to stagflation AT BEST , not a pretty picture





possibly an isolated incident possibly not , either way I feel sorry for the 180 people whose jobs that were lost with Delta Homes yesterday in addition to the other 80 they laid off a few months ago


----------



## Glenbhoy

> It's true that it hasn't run any overtly negative articles on Irish property.


In fairness, I think a lot of ye are getting a bit carried away.  Can many of you tell me any negative stories on Irish property that should be carried?  
Look at the stories that the Indo has carried, they're normally talking about how interest rate increases have added x/y/z to the average mortgage, great journalism alright, can't figure out how they manage to get all that research finished pre-pub.  
I am believe it or not quite bearish, but the lot of you here are trying to say there's been a crash etc, the facts do not back up what you are saying, yeah you can trawl through various caches and find houses which have a lower asking price now than 3 months ago - but surely you know that asking price has little or no relevance to sales price - when you can start showing me houses consistently selling for less than others on the estate went for, then i'll believe.  
I believe that the problem a lot of ye are having is that ye are starting to believe that the rest of the population think along similar lines to the participants on here, you all grasp at any straw that the real world may have finally been enlightened, "a guy a work said today that if interest rates rise by another 5%, he would consider getting an estate agent to value one of his 25 investment properties with a view to perhaps selling it (btw, he mentioned in passing that one of the properties was vacant for 4 days last year, he's going to have sell)" etc, and whilst obviously I'm exaggerating slightly, that is what it seems like at times.
Remember, just because you're wishing harder does not make it true (yet)!!
Enjoy ripping this post to pieces.


----------



## whathome

Glenbhoy said:


> but the lot of you here are trying to say there's been a crash etc.


I think you'll find that there's only one person that said this here - and he's already explained his reasoning that once it's past tipping point, there's no way back.



Glenbhoy said:


> when you can start showing me houses consistently selling for less than others on the estate went for, then i'll believe.


 
Fine - you can wait until the PTSB/ESRI reports then. Unfortunately the official reports come four months after market activity so reporting current market activity here is as close as anyone can get to showing how it is right now. Falling asking prices across many areas and price ranges are a very important indicator of weakness in the market. I know how much of a pain it is to lower my asking price, my house is now selling for less than the last identical one that sold in April.


----------



## Duplex

Persius said:


> I think many posters are being too harsh on the Irish Times. It's true that it hasn't run any overtly negative articles on Irish property. And it's true that their headlines have a more positive spin than the Indo. However if you read the content of their articles, then it is quite balanced IMHO.
> 
> Again it is true that some articles are just "reporting the news". So if some economist makes a big press statement, the IT reports it. However when they do feature pieces, or opinion or editorial pieces, then there is usually a good balance. Some examples in today's paper would include the article from Edel Morgan in the property supliment about courses in property investments. She clearly states that it may be too late to bank on making money on Irish property. Similarly the "worth the investment" piece has clearly stated for months now that rents only barely cover IO mortgages
> 
> In another suplement in the paper a London developer wonders where the Irish are getting all the money to invest in property in London. The journalist (forget who) states that it is coming on the back of rising values of people's PPR, allowing them to borrow huge sums. She then clearly states that this is a very risky thing to do, and doesn't recommend it.
> 
> In an editorial the other day, the IT also warned of stagnant or even falling prices.
> 
> The bottom line is that the Indo is going for dramatic headlines whilst the actual market is still hanging on the edge. The IT will only start printing dramatic headlines when we experience dramatic events - e.g. real substantial falls in house prices, real increases in builders going bust, real rising unemployment. In the meantime many journalists may already be bracing themselves for the impending explosion. But as it hasn't actually happened it isn't news yet.
> 
> Anyone who _reads_ the IT, as distinct from just scanning the headlines, will know that all is not rosy in the property garden. These people should be able to come to their own conclusions and don't need spectacularly negative headlines.
> 
> Disclaimers:
> I've no relationship to the IT (but I do think it's a good paper)
> I've no vested interest in seeing the property boom continuing, but expect it to do so into mid 2007.


 

There was an article in todays IT, by a woman discussing the US market. She advised that Irish buyers might want to steer clear of Florida as prices had fallen by 15%. (The IT has run several articles extolling the virtues of Floridian property previously, they weren't decent enough to issue a warning to their readers however when the market started to dive.) 

Anyway this lady singled out Phoenix, Arizona as a possible alternative investment location for Irish investors scared away from Florida and other cooling markets. So to circumvent the need for her to publish an article in a couple of months telling her readers to avoid Phoenix I'll do that now. Avoid Phoenix prices are falling now.


----------



## ivuernis

Glenbhoy said:


> In fairness, I think a lot of ye are getting a bit carried away. Can many of you tell me any negative stories on Irish property that should be carried?


 
I'm inclined to agree w.r.t. the recent reporting from the Irish Indo. This is 
the same paper after all who's idea of "research" is to lift a quote directly 
from this website and pronounce it as some sort of indication of a vast 
swing in market sentiment amongst estate agents. 


http://www.askaboutmoney.com/showthread.php?p=271343&highlight=mad#post271343


----------



## Duplex

ivuernis said:


> I'm inclined to agree w.r.t. the recent reporting from the Irish Indo. This is
> the same paper after all who's idea of "research" is to lift a quote directly
> from this website and pronounce it as some sort of indication of a vast
> swing in market sentiment amongst estate agents.
> 
> 
> http://www.askaboutmoney.com/showthread.php?p=271343&highlight=mad#post271343


 
Well if you or Glenboy could come up with a cogent argument why you believe that a property bubble doesn't exist, I would be interested in reading it.


----------



## phoenix_n

whathome said:


> I think you'll find that there's only one person that said this here - and he's already explained his reasoning that once it's past tipping point, there's no way back.


 
That'd be me.  And I am not prone to exaggeration either. 



whathome said:


> I know how much of a pain it is to lower my asking price, my house is now selling for less than the last identical one that sold in April.


 
How are u finding the market ?


----------



## BigM

Firefly said:


> My own sentiment on house prices is that we are at a tipping point due to interest rates....I think people are "waiting and seeing"...if rates hold firm then I expect prices to rise by 3-5% over the next 12 months. If they rise by .25% I expect them to remain flat and if they rise by .5% I predict them to fall. Interest rate changes (like inflation) cause uncertaintity in the market resulting in a "look before you leap" mindset.


Do you mean an extra 25bps or 50bps in 2007? Because rates are absolutely going up 25bps on Oct 6th and (almost) definitely another 25bps on Dec 7th.


----------



## ivuernis

Duplex said:


> Well if you or Glenboy could come up with a cogent argument why you believe that a property bubble doesn't exist, I would be interested in reading it.


 
I *do believe* there is a property bubble and a have for quite a long time. I've been bearish on here since the beginning, except of late when I've been experiencing some pangs of bullishness  which I'm at a loss to explain - I posted about this the other day w.r.t. the resolve of the Central Banks resolves to stay the course fighting inflation. 

Just some of the reporting in the media of late irks me somewhat more than anything else.


----------



## BigM

whizzbang said:


> Still no sign of a auction resutls section in the Irish Times property section. How many more weeks before this starts to look fishy?
> 
> When would they usuall restart that section after the summer season?


 
The Auction results won't really kick off until the last 2 weeks of Sept. Since a lot of houses came on the market in the last week, their lead time for auctions would be 3/4 weeks. So there should be a bumper crop of auction results for us to analyse in a couple of weeks (27/28/29 Sept seem to be particularly busy days for my area).


----------



## BigM

ivuernis said:


> I'm inclined to agree w.r.t. the recent reporting from the Irish Indo. This is
> the same paper after all who's idea of "research" is to lift a quote directly
> from this website and pronounce it as some sort of indication of a vast
> swing in market sentiment amongst estate agents.
> 
> 
> http://www.askaboutmoney.com/showthread.php?p=271343&highlight=mad#post271343


 
Indeed, although I'm not sure you can impugn all the journos of any paper (IT or Indo) just because they have a few incredibly lazy hacks working for them (except the Sindo of course - they should all be forcefed their own copy )
Personally I'd love to read Tom Humphries' take on the Irish property market....


----------



## whizzbang

BigM said:


> The Auction results won't really kick off until the last 2 weeks of Sept. Since a lot of houses came on the market in the last week, their lead time for auctions would be 3/4 weeks. So there should be a bumper crop of auction results for us to analyse in a couple of weeks (27/28/29 Sept seem to be particularly busy days for my area).



fair enough, thanks for the feedback.


----------



## Glenbhoy

> I *do believe* there is a property bubble and a have for quite a long time. I've been bearish on here since the beginning, except of late when I've been experiencing some pangs of bullishness  which I'm at a loss to explain - I posted about this the other day w.r.t. the resolve of the Central Banks resolves to stay the course fighting inflation.


Me too, although, I haven't been getting any bullish pangs, all I'm saying is that I think there's a bit to go yet, and that it might take bad news on the job front before we start to see significant declines.  Remember we have a giveaway budget coming up, and likewise I feel IR could fall again by next march, the ECB are ratchetting them up too quickly for the big euro countries, I think mainly to counter inflation led by oil prices, that represents double hits for industries (allied to increased oil costs) in those countries, and might be too hard for them to cope with.

Whathome - what were you expecting to get for your home, what do you think you'll get now, what type and approx location and is there much interest?  Rough amount of vewings, how long on market etc? (if you don't mind).


----------



## ivuernis

Glenbhoy said:


> I feel IR could fall again by next march, the ECB are ratchetting them up too quickly for the big euro countries


I can see them perhaps pausing early/mid 2007 but I can't see them falling. 
The ECB has been slow and steady with the rate increases so far. 0.25% 
every 3-months and now in 2-monthly intervals all with plenty of forewarning 
from Trichet's statements.


----------



## Glenbhoy

> The Auction results won't really kick off until the last 2 weeks of Sept. Since a lot of houses came on the market in the last week


Are there not auction results in the property supplement today?  I saw some anyway.
The Investment property supplement was quite funny though.  Best quote was "I know a family from Killiney who bought in Tuscany..... they can travel door to door in 4 hrs, that's less than the trip to Kerry", a quote I would have to question the veracity of.


----------



## BigM

Glenbhoy said:


> Are there not auction results in the property supplement today? I saw some anyway.
> The Investment property supplement was quite funny though. Best quote was "I know a family from Killiney who bought in Tuscany..... they can travel door to door in 4 hrs, that's less than the trip to Kerry", a quote I would have to question the veracity of.


 
There are some - but the real 'barometer' will be end-Sept results (I reckon, anyway!)

As for the 4hr door-to-door..... sure Killiney to the airport can take nearly 2hrs on a bad day (never mind the queues at check-in)!! Methinks they have their own private jet....


----------



## whizzbang

Glenbhoy said:


> Are there not auction results in the property supplement today?  I saw some anyway.
> T



I was looking for the section that summarised them all, how many sold, how many were with drawn, stuff like that. I think that part was missing.


----------



## cushtie

This is only my opinion, not based on any results of studying the economy, scruitinising reports, or following interest rate news etc, you might say it is the sentiment of the man on the street, a gut feeling if you will.

I reckon that there is no way bertie and the boys are going to let anything happen until they are safely back in the hot seat after next years election. (Although there was an interesting theory here how they would loose it on purpose so as they would not be in power when things went pear shaped )

People can spend all day giving out about the govenment but I think the only thing that will stop FF and the PD's getting back in is if something happens to the propery market.

In our own situation we bought a house about 3 years ago and are currently building a new one. for the last few months I have thought of nothing else but whether to kepp on to the first one as an investment or flog it and use the equity to reduce the mortgage in the new one.

I have finally decided to sell it (even though the rental would cover the full mortgage repayment) as I think things will tank this time next year IMO


----------



## whathome

Glenbhoy said:


> Whathome - what were you expecting to get for your home, what do you think you'll get now, what type and approx location and is there much interest? Rough amount of vewings, how long on market etc? (if you don't mind).


 
As I mentioned, we're selling two properties. First contracts are signed on one property thank God - sold at asking.

The other one is in the 600k range on the Northside - on the market since the Spring. It was bid above asking very quickly and we were sale agreed for a few weeks. Unfortunately there was a delay getting deeds between solicitor and bank and during that time, buyer backed out. So underbidder stepped in to very slightly below asking which we accepted. They backed out also - very little interest since then and now we're reducing the asking price by 30k and we're spending €700 to have the brochures reprinted and another go at advertising in the Independent - the paper of choice when selling property on the northside 

We're not looking forward to more hassle with viewings, stress etc so the sooner this is all over, the better.

First noticed the market weakening very late in May when we started to see fewer people at viewings and bidding on houses wasn't as aggressive - we were already sale-agreed then and thought we were safe. 

It's way too early to say that there's a crash....but it's not too early to suggest that sentiment has changed since the spring and it's becoming a buyers market.


----------



## whizzbang

cushtie said:


> I reckon that there is no way bertie and the boys are going to let anything happen until they are safely back in the hot seat after next years election. (Although there was an interesting theory here how they would loose it on purpose so as they would not be in power when things went pear shaped )




Do you think this is actually in there power? A giveaway budget will only get them so far.

I'm a fan of the second theory too  not sure they would go for it though!


----------



## bearishbull

cushtie said:


> This is only my opinion, not based on any results of studying the economy, scruitinising reports, or following interest rate news etc, you might say it is the sentiment of the man on the street, a gut feeling if you will.
> 
> I reckon that there is no way bertie and the boys are going to let anything happen until they are safely back in the hot seat after next years election. (Although there was an interesting theory here how they would loose it on purpose so as they would not be in power when things went pear shaped )
> 
> People can spend all day giving out about the govenment but I think the only thing that will stop FF and the PD's getting back in is if something happens to the propery market.
> 
> In our own situation we bought a house about 3 years ago and are currently building a new one. for the last few months I have thought of nothing else but whether to kepp on to the first one as an investment or flog it and use the equity to reduce the mortgage in the new one.
> 
> I have finally decided to sell it (even though the rental would cover the full mortgage repayment) as I think things will tank this time next year IMO


Once market sentiment changes by enough theres nothing the government can do.


----------



## liteweight

whizzbang said:


> I'm a fan of the second theory too  not sure they would go for it though!



For as long as I can remember FF have managed to leave office just as the economy was going down the cr@pper and left another party to pick up the pieces, aka take the blame!


----------



## tententwenty

liteweight said:


> For as long as I can remember FF have managed to leave office just as the economy was going down the cr@pper and left another party to pick up the pieces, aka take the blame!


And Mary Harney just quit for unspecified reasons...


----------



## liteweight

whathome said:


> The other one is in the 600k range on the Northside - on the market since the Spring.  It was bid above asking very quickly and we were sale agreed for a few weeks.  Unfortunately there was a delay getting deeds between solicitor and bank and during that time, buyer backed out.  So underbidder stepped in to very slightly below asking which we accepted.  They backed out also - very little interest since then and now we're reducing the asking price by 30k and we're spending €700 to have the brochures reprinted and another go at advertising in the Independent - the paper of choice when selling property on the northside



Any idea why the second buyer pulled out? How have other sales gone in the area? Have you had many viewing?


----------



## Glenbhoy

whathome said:


> It's way to early to say that there's a crash....but it's not too early to suggest that sentiment has changed since the spring and it's becoming a buyers market.


Fair enough, although I still feel that the summer is always very slow, you'll know better in the next few weeks.


----------



## Maine

whathome said:


> This house reduced by €1,000,000 ...
> 
> Any takers?
> 
> Was €8,500,000:
> 
> 
> Now only €7,500,000
> [broken link removed]


 
Thats alot of drop in anyones money in prime area that should be immune from any change in sentiment.


----------



## wolfie

642 houses in loughrea and over 250 in ballinasloe for sale on daft !!! Tell me im seeing things!!!


----------



## whathome

wolfie said:


> 642 houses in loughrea and over 250 in ballinasloe for sale on daft !!! Tell me im seeing things!!!


 
Looks like a problem with Daft - if you look through the pages you'll see every house duplicated many times.


----------



## mollser

> 50,409 properties online (10,013 in the last 24 hours



from daft.ie - this seems a bit, well, daft??


----------



## whathome

liteweight said:


> Any idea why the second buyer pulled out? How have other sales gone in the area? Have you had many viewing?


 
2nd buyers - we figured they were interested in another house, they had given us a time limit within which to accept their offer which we did. They pulled out pretty quickly without a survey or anything so we think they changed their minds and went with the other house in the end.

On viewings, we've had a few tyre kickers as our EA puts it but that's about it. EA has contacted potential buyers with update on lower asking price and we have 2 parties scheduled to view on Sat morning. I'm confident that the price drop will do the trick.

The only houses to sell since May have been lower priced than ours but not as well located in the area.


----------



## Jeanne

CelloPoint said:


> Poor 2Pack appears to have been banned. Anyone know why?


 
No, but I miss his contribution to his thread


----------



## Jeanne

Remix said:


> Excellent stuff !
> 
> The flying analogy reminds me of the gag in the movie "Airplane" when the hostess asks the passengers to assume crash positions. When she looks back she sees the passengers spread over the floor, upside down on seats etc. - all in their crash positions.
> 
> Property interests of Ireland: assume crash positions !


 
 Hilarious!


----------



## micheller

I saw the Star in work and there was a very amusing page which had almost a full page article on headline similar to 'Prices set to rocket' and a tiny article about interest rates going up. The larger article just repeated the usual- IIB say the market fundamentals are solid (demand, immigration etc).

So, everything must be okay then or the IR article would have been much larger, right? 

M.


----------



## redo

I think the supply is having an effect on prices in Lucan

Price drop of 15k to 495k
[broken link removed]

198 for sale in the Lucan area
57 min 4 beds
141 max 3 beds

Has been on the market for over 4 months.


----------



## rgfuller

redo said:


> I think the supply is having an effect on prices in Lucan
> 
> Price drop of 15k to 495k
> [broken link removed]
> 
> 198 for sale in the Lucan area
> 57 min 4 beds
> 141 max 3 beds
> 
> Has been on the market for over 4 months.


 
I would have thought that the asking price the EA had set was unreasonably high in the first place hence the drop down. I've not seen any 4 beds in this area ever go over the 500k mark, and I've been watching the lucan market closely (south of the N4) for the last 12 months.


----------



## whathome

rgfuller said:


> I would have thought that the asking price the EA had set was unreasonably high in the first place hence the drop down. I've not seen any 4 beds in this area ever go over the 500k mark, and I've been watching the lucan market closely (south of the N4) for the last 12 months.


 
You may not have seen it but they probably did. I think what happened is that with the absolute frenzy that occurred in the Spring, bidding wars sent houses way above asking. People who subsequently put their houses on the market with expectation of the "new" price have been disappointed - the frenzy has gone and asking price drops ensue. You would not have noticed the unusually high prices unless you were bidding or selling.


----------



## Firefly

Are the falling prices being quoted on myhome/daft etc happening with new builds? The reason I'm asking is that I think we may have hit the ceiling in 2nd house prices due to stamp duty. Someone may be able to afford the monthly repayments of ~ 2,250 on a place for 500k, but it's a different thig to raise the 37,500k stamp duty. So while 2nd hand house prices are flattening out, new builds will get more expensive as demand for these will increase...thus massaging the overall figures somewhat.

btw...moving from being bullish to bearish....but stuck somewhere in the middle which is the worst place to be..."I used to be indicisive, but now I'm not so sure"

Firefly


----------



## Bedsit

*The global housing market - Checking the thermostat* (Economist)

http://www.economist.com/finance/displaystory.cfm?story_id=7891311


----------



## redo

CelloPoint said:


> How about canaries in the gold mine, tsunamis and potatoe famine?
> 
> Copyright, CelloPoint, 2006.
> 
> http://www.askaboutmoney.com//showpost.php?p=255326&postcount=1372
> http://www.askaboutmoney.com//showpost.php?p=261516&postcount=2272
> http://www.askaboutmoney.com//showpost.php?p=266067&postcount=2765
> 
> Gee the server seems to be having a bit of a hard time today - this thread has grown into a bit of a Frankenstein - it seems to be getting even more popular. We're heading for 200k hits faster than the first 100k hits. Even the main-stream media are reading this thread!
> 
> Poor 2Pack appears to have been banned. Anyone know why?


The Economist !!


----------



## bearishbull

A point for those who says "its always hard to buy your first house" and "if you can afford it buy it" etc. I think they would accept that back in say 2001 when wages werent much lower and rents were the same as now (all in real terms) it was a good time to buy, conversely there are bad times to buy then?  Why then are houses so much more expensive today? Massive numbers of houses are being built and will continue to be built for forseeable future pumping extra supply into market, if anything this fact should have contained the market somewhat,alas no. When mortgae rates are 60% higher next year than last year where will prices go? Affordability and borrowing capacity are being squueezed and cost of living is outstripping wage rises, its downhill from here. Tying yourself to one property in one location may not be the smartest thing in todays gloablised economy, we have embraced globalisation in many ways but not in terms of labour mobility. We have to be ready to react to the vagaries of the external globalised economy with which our futures are now so interwoven. We have no monetary policy/currency to help us so tying yourself and your capital to this island may not be the best idea over next 10-20 years.


----------



## BigM

bearishbull said:


> Affordability and borrowing capacity are being squueezed and cost of living is outstripping wage rises, its downhill from here.


Couldn't agree more... but I do think it will take some time to filter through to the general populace. 
I do expect some Stamp Duty FTB concessions this budget which will provide a spurt to that section of the 2nd hand market.
I also expect more and more 'extras' will be included by builders rather than reducing their prices on new builds (as 2Pack I think suggested earlier?).
But eventually (12-18mths?) the writing on the wall will be writ so large that no-one will be able to ignore it any longer...


----------



## redo

I think the banks have a lot to answer for by increasing peoples affordability.  If they kept mortages at 20/25 years (perhaps new legislation in next budget?) house prices would not have increased soo much over the last 18 months.


----------



## BigM

redo said:


> I think the banks have a lot to answer for by increasing peoples affordability. If they kept mortages at 20/25 years (perhaps new legislation in next budget?) house prices would not have increased soo much over the last 18 months.


 
Don't think legislation is a runner (free market and all that).
Sure don't the banks stress-test everyone and we're all loaded anyway so there's no problem there (says Dougal to Ted).

A move back to max 4/5 times incomes would have an immediate impact...


----------



## exile

redo said:


> I think the banks have a lot to answer for by increasing peoples affordability.  If they kept mortages at 20/25 years (perhaps new legislation in next budget?) house prices would not have increased soo much over the last 18 months.



Do they ever come to collective agreements like that though?  It would only take one bank/mortgage provider to say "Hey, if those guys won't loan you the money - we will!  Over 35 years..."  Not trying to defend the banks - but in the absence of external regulation don't we have to assume they'll act in their own interests?


----------



## StoppedClock

Assuming there was political will to try and engineer a soft landing is there any way that it can be done?  If so, how?


----------



## CelloPoint

StoppedClock said:


> Assuming there was political will to try and engineer a soft landing is there any way that it can be done?  If so, how?



Of course there's a way: *The Affordable Housing Scheme*.

There'll be no crash - just that this wonderfully considerate government has had enough of 'the speculators' and is going to provide the young citizens of this country with affordable housing for half nothing.

The statisticians up in the CSO will be busy preparing figures showing how affordable the average house actually is - they will knock down any talk of average houses in Dublin costing over 400k.

Affordable housing will be the trump card when it comes to diverting debates on government failure to control the housing market. Any hint that someone would criticise an affordable housing development (crappy houses in crappy locations), will be knocked down as snobbery.

Something along these lines anyway - anyone agree with me? 

One thing's for sure, the spin over the coming months will be fascinating. There'll be something very surprising to come out of someone's hat.


----------



## room305

StoppedClock said:


> Assuming there was political will to try and engineer a soft landing is there any way that it can be done?  If so, how?



Problem with the "soft landing" idea is that it is just a long drawn correction that occurs in real rather than nominal terms. Not sure why that is so great. Better to have a sharp correction on the order 20%-30% which will shake out the specuvestors and discourage further speculation. After that we can all get back to the business of trying to get Ireland Inc. going again and start thinking about houses as objects for shelter rather than magical wealth creation machines ...

Not quite sure how it could be achieved in practice. Punitive exit and re-entry taxes a la stamp duty are a good start as it lessens the chances of a rush to the exits. Perhaps some kind of holding incentive for specuvestors so that they don't just sell when prices stop rising. Oh yeah, change the SD laws on new builds as well. Key in the next few years would be to discourage new builds so the supply glut doesn't increase.

At the same time, you have to encourage buyers not just to wait at the sidelines in the hope of lower prices. Maybe a government-backed CFD should market prices decline.

Very tough to engineer a soft landing with so many moving variables involved. Take a lot of money as well. I guess the question is, is it really a worthwhile use of tax payer's money?

Depends on the amount I guess but I would be inclined to think it would be.


----------



## Maine

redo said:


> I think the banks have a lot to answer for by increasing peoples affordability. If they kept mortages at 20/25 years (perhaps new legislation in next budget?) house prices would not have increased soo much over the last 18 months.


 
In the IT today a small piece that says that Fitch, global ratings company, now view the Irish banking system as risky as Russia and South Africa due to the sheer scale of personal borrowing.  This will force the banks to assess their risk exposures as foreign investors will be focussing on this.


----------



## Persius

bearishbull said:


> ... Affordability and borrowing capacity are being squueezed and cost of living is outstripping wage rises, its downhill from here. Tying yourself to one property in one location may not be the smartest thing in todays gloablised economy, we have embraced globalisation in many ways but not in terms of labour mobility. We have to be ready to react to the vagaries of the external globalised economy with which our futures are now so interwoven...


 
There's a reason why most of us haven't embraced the labour mobility aspect of the globalised economy. That's because most of view ourselves as human beings with many interests, and not just wage slaves.

Now it might be great for a 25 year old to head abroad to where the work is, thus gaining valuable work experience and earning big bucks. But what about the 35 year old who's just become a father/mother? Or the 50 year old who's trying to get their moody teenage children through secondary school with good exam results and no unplanned pregnancies? Do you think they should be ready to just up sticks and move to the other end of Europe?

If this is the model for the future, then the property investors are right. There will always be money to be made letting out to the new generation of gypsy workers. Otherwise, it still makes sense to put money into your own property as long it is close to a reasonably strong employment center (e.g. Dublin), and try to ensure that you remain employable and can find employment reasonably close to home.

If we have a major slump in Ireland in the 21 century, it'll most likely be due to some global slump. I find it hard to believe that construction in Ireland, and hence the Irish economy, could collapse in the absence of a global slump and rising unemployment in other areas first. In that case, there's probably nowhere great to emigrate to anyway. So I do still think buying your own home makes sense. The usual provisos about "starter homes" and being prepared to live there for 10 years apply (as well as being able to afford it based on even higher interest rates). Having said that, if you don't _need_ to buy a home now, then it may make sense to hold off a while (that's what I'm doing).


----------



## ivuernis

Persius said:


> If we have a major slump in Ireland in the 21 century, it'll most likely be due to some global slump. I find it hard to believe that construction in Ireland, and hence the Irish economy, could collapse in the absence of a global slump and rising unemployment in other areas first.


You're probably right in your assertion that it will take a global slump to 
effect these changes but it looks like these global changes are already 
happening. 

i. We can see from housing markets ahead of us in the curve (e.g. United 
States, Australia) are already starting to take a hit in property values. 

ii. There's many a prediction of the current global upswing cycle coming to 
an end (e.g. 
0000779e2340.html]IMF warns of ‘severe global slowdown’)

iii. Central banks around the world have donned their anti-inflation suites 
and will likely sacrifice jobs to contain inflation if they have to.


----------



## CelloPoint

ivuernis said:


> You're probably right in your assertion that it will take a global slump to
> effect these changes but it looks like these global changes are already
> happening.



FF are praying for a global slump prior to the next election - this would be a perfect scapegoat.


----------



## Glenbhoy

CelloPoint said:


> Of course there's a way: *The Affordable Housing Scheme*.


Garrett the Good was mentioning this too, but I don't see how increased social and affordable housing will help bring about a soft landing.  Is the one of the main tenets of the bubble theory not that we have too many investors in the market?  If this is the case will the provision of homes for people who currently rent not cause investors to exit the market?  Hence, oversupply of property followed by a big pop of the bubble??


----------



## room305

CelloPoint said:


> FF are praying for a global slump prior to the next election - this would be a perfect scapegoat.



I very much doubt this CelloPoint. Perfect scapegoat or not, FF are well aware that the economy is the key to them holding power. Irregardless of the global economic and/or housing situation I expect them to play the everything-is-fine-this-party-is-barely-getting-started line right up until the regain their seats. After which they will blame any problems on forces outside of their control.

Has everyone forgotten the 2002 election already? No wonder they keep getting back in ...


----------



## darag

While bearish on property in Ireland, I don't think that the bubble has started to burst particularly in the "starter home segment".  I have been watching a particular small apartment block (in a village about 35 miles from Dublin) over the last year or so.  Many of these apartments have been sold during this period.  The apartments are mostly of similar size and spec with some minor differences but ten months ago one sold for 205K.  A few more sold since then but I couldn't find out how much they sold for.  Over three months ago two were sold at 235.  In the case of one of them, after dicking around for over three months the purchaser pulled out.  This one was put back on the market and immediately sold for 245.  At about the same time another one sold for 250 (but this one I believe was exceptionally well fitted out - Jacuzzi, etc.).  This anecdote is worth noting because these are actual prices paid for the apartments - not advertised prices and more importantly because many of them (six or seven) have changed hands over the last year, the number of datapoints is relatively large.


----------



## Duplex

The Baltimore Sun. “Greg Siciliano first put his Ocean City bayside condo on the market for $699,000 in May. By August, he had dropped the price of the two-year-old, two-story condo to $550,000, and had thrown into the package two WaveRunners and the pier out back. ‘I’m just a little discouraged with the lack of interest,’ said Siciliano.”
“He and other sellers have found their properties stuck in a glut of condos and townhouses that have flooded the market. Siciliano’s condo is one of nearly 1,700 condos for sale in Ocean City, and there is nearly twice as much inventory as in July 2005. In the first half of this year, 528 condos were sold in Ocean City, 42 percent fewer than in the first half of last year.”
“Linda Moran, a real estate agent in Ocean City, said *she started noticing the slowdown in October*. ‘It progressively has gotten worse, with more and more people putting properties on the market and less and less buyers,’ Moran said. ‘We’re at the saturation point of listings at this point, but they’re not selling.’”


----------



## Bedsit

Here is a very bearish article from Yahoo Finance entitled "Nightmare Mortgages"

http://biz.yahoo.com/weekend/mortgagepain_1.html


----------



## Persius

Wow, so those ARMs aren't even IO mortgages!!! I guess that's another option that the Irish banks have, to allow them lend even more money for even higher priced houses. :-/
Is there anything to actually prevent such a product being introduced over here?


----------



## whizzbang

Not that it means anything,but here is a graph of daft.ie's number of houses for sale nationally in July and August.


----------



## hmmm

Many ARMs have what are in effect inducement rates for the first number of years, and we have similar over here. The inducement rates however target the financially naive - e.g. how can someone with any financial sense believe that it is possible to go from a 5.5% fixed rate to a 1.5% ARM with no cost, yet many have. After the inducement rate period ends, the ARM jumps to 7/8/9%, and the original fixed rate is no longer available.


----------



## BigM

Persius said:


> Wow, so those ARMs aren't even IO mortgages!!! I guess that's another option that the Irish banks have, to allow them lend even more money for even higher priced houses. :-/
> Is there anything to actually prevent such a product being introduced over here?


God help us all if they're introduced here....


----------



## room305

Persius said:


> Wow, so those ARMs aren't even IO mortgages!!! I guess that's another option that the Irish banks have, to allow them lend even more money for even higher priced houses. :-/
> Is there anything to actually prevent such a product being introduced over here?



Given the toothlessness of the regulator over the 100% mortgages I'm inclined to think these would be allowed.


----------



## Duplex

whizzbang said:


> Not that it means *anything,but*​ here is a graph of *daft.ie's*​ number of houses for sale nationally in July and August.
> 
> http://www.iol.ie/~thedeans/daft.gif



Thanks Whizzbang. *Interesting*​.


----------



## StoppedClock

room305 said:


> Given the toothlessness of the regulator over the 100% mortgages I'm inclined to think these would be allowed.


 
Therefore these could add a few more years and another 20+% to HPI so should we buy now?


----------



## derryman

"Elvis has left the building"

1996 - new Dublin three bed semi - 90k net bought
2006 - original Dublin three bed semi - 600 gross sold

Irish HPI over the last decade.................priceless


----------



## Persius

hmmm said:


> Many ARMs have what are in effect inducement rates for the first number of years, and we have similar over here. The inducement rates however target the financially naive - e.g. how can someone with any financial sense believe that it is possible to go from a 5.5% fixed rate to a 1.5% ARM with no cost, yet many have. After the inducement rate period ends, the ARM jumps to 7/8/9%, and the original fixed rate is no longer available.


 
But we don't have any inducement rates where the principal, total repayment amount, is actually *building up* as you're making your monthly repayments. Even some sort of discounted IO mortgage would at least (by very definition) pay off all the owed interest each month, meaning the principal owed is staying constant. And with the inducement discounted rates on normal mortgages, you're paying off some of the principal along with the reduced interest. So when the reduced rate no longer applies, you have some of the principal paid off.

The nearest analogy we have that I can think of is the repayment holiday (often for 3 months, taken at the beginning of the mortgage). In this case the principal will build up over those first three months, and probably takes quite a few more months before you get it down to the original amount.

Edit: Even if they could get away with it, I would hope the Irish banks are prudent enough not to introduce such a product over here. The possibility of negative publicity in any future misselling scandal, along with threatened legal action, should frighten them away from introducing such a product. Please tell me I'm not being naive...


----------



## tententwenty

Persius said:


> Edit: Even if they could get away with it, I would hope the Irish banks are prudent enough not to introduce such a product over here. The possibility of negative publicity in any future misselling scandal, along with threatened legal action, should frighten them away from introducing such a product. Please tell me I'm not being naive...


These are the same flutes that were advising people to get offshore accounts a while back? Banks have a nice respectable veneer, but believe me nothing could be further from the truth.


----------



## blindjustice

My sentiment at the housing market at the moment is a mix of bitterness anger and sadness
If it continues younger couples will be crucified with unmerciful mortgages over crazy lenghts of time living in small apartments and pitiful excuses for houses. i think a levelling off or "soft landing" will only allow this to continue.
if it crashes the economy is in big trouble.
which is the lesser evil?


----------



## Maine

http://www.baltimoresun.com/busines...,357896.story?coll=bal-realestate-headlines-1

"KB Home, the No. 6 U.S. homebuilder by stock market value, lowered its 2006 earnings forecast Wednesday after quarterly orders plunged, and Hovnanian Enterprises Inc., the No. 10 builder, reported profit fell 34 percent.

Yesterday, Beazer Homes USA Inc., No. 12, lowered its forecast after orders fell by half.

Short-term housing investors, so-called "flippers," are putting their properties up for sale, making for "an increasingly challenging housing market," KB Home Chief Executive Officer Bruce Karatz said in a statement that detailed the builder's 43 percent drop in new .

What is amazing is the sheer scale of decreases for huge corporations...these are not 3% or 4% fall offs. This is a nosedive however we need it to level off in the next few months to avoid serious problems here given our house prices and supply are alot higher.


----------



## bearishbull

A lovely house in my area has been on market for months,got a write up in Sunday Business Post before going to auction in May but did'nt sell and is now for sale by private treaty for 1.3million it had been on sale at auction with an AMV of 1.45million in May. Another on same road sold for 1.25 mill in March at auction having had an AMV of 950k
[broken link removed]

[broken link removed]=
Must have trouble selling at lower price as its on market all summer, and its not the type of house you'd expect to remain on market long if sentiment was positive.


----------



## onekeano

bearishbull said:


> A lovely house in my area has been on market for months,got a write up in Sunday Business Post before going to auction in May but did'nt sell and is now for sale by private treaty for 1.3million it had been on sale at auction with an AMV of 1.45million in May. Another on same road sold for 1.25 mill in March at auction having had an AMV of 950k
> [broken link removed]
> 
> [broken link removed]=
> Must have trouble selling at lower price as its on market all summer, and its not the type of house you'd expect to remain on market long if sentiment was positive.



BB - have to say, I checked this house out because its on a great road which I admire. The 4th and 5th bedrooms were an ATTIC CONVERSION. They had some  bloody cheek quoting 1.45mn (which assuming the normal 20% "bonus" would mean they expected almost 1.75mn). I think you may have forgotten to mention that another house in the immediate area sold in May for <€1.1 mn  which had loads of potential and was ideally located in terms of aspect.

Roy


----------



## bearishbull

onekeano said:


> BB - have to say, I checked this house out because its on a great road which I admire. The 4th and 5th bedrooms were an ATTIC CONVERSION. They had some bloody cheek quoting 1.45mn (which assuming the normal 20% "bonus" would mean they expected almost 1.75mn). I think you may have forgotten to mention that another house in the immediate area sold in May for <€1.1 mn which had loads of potential and was ideally located in terms of aspect.
> 
> Roy


Wasnt aware of anything your saying but im sure your right. Still long time for one of those houses to remain on market. Its just one more piece of evidence that the sentiment is quite different to earlier this year, it may pick up again and that wouldnt suprise me but the correction is inevitable in next 12-16months.


----------



## whathome

*ECB tone confirms looming interest rate rise*

http://www.unison.ie/business/stories.php3?ca=80&si=1685483

"The ECB is likely to keep raising rates until there are clear signs that the eurozone economy is slowing, although some analysts believe this will happen next year, pegging rates at 3.75pc"


----------



## Maine

bearishbull said:


> A lovely house in my area has been on market for months,got a write up in Sunday Business Post before going to auction in May but did'nt sell and is now for sale by private treaty for 1.3million it had been on sale at auction with an AMV of 1.45million in May. Another on same road sold for 1.25 mill in March at auction having had an AMV of 950k
> [broken link removed]
> 
> [broken link removed]=
> 
> Lets say it sells for broadly that price plus stamp means E 1.5m. A 25yr old starting out and trading up will pay in total including all interest at least E3m before finally owning this property i.e. double the price as a basic rule. Thats 75,000 a year for 40 years of after tax income or 120,000 a year for 40 years of gross income. We will truly be a miracle economy if the incomes are there to support this.
> 
> PS in 2004 I think there was *something less than 3000 properties* in the UK that sold for more than £1m ? Can anyone confirm ?


----------



## SLAPPY

I was very suprised and thrilled to read that the Irish will soon own the entire world.

http://www.unison.ie/irish_independent/stories.php3?ca=184&si=1685652&issue_id=14628

"That's right, forget about buying a three-bed in Lucan to rent to a gaggle of nurses, Cambodia is the place to lay down your cash for a rainy day. 
The home of the Khmer Rouge and the killing fields was yesterday being touted as the latest must-have for the hordes of ever-hungry Irish property investors. "

I wonder if I can buy a few acres on this killing field?   I'm sure these people are getting filthy rich selling worthless Cambodian property to all the young Irish who can't afford to get on their local property ladders.   There is a reason why property is dirt cheap in Cambodia;  wages average around $70 per month (assuming you can find work with 20% unemployment rate).   But I'm sure all the specuvestors did all their research and already know this.     My humble advice to any world investors out there is to sell (if you can) and get your hands on the cold hard cash that you may have made.  Once the world properyt bubble finally runs its course,  all these foreign properties will go back to their previous local prices (worthless).


----------



## Duplex

Maine said:


> bearishbull said:
> 
> 
> 
> A lovely house in my area has been on market for months,got a write up in Sunday Business Post before going to auction in May but did'nt sell and is now for sale by private treaty for 1.3million it had been on sale at auction with an AMV of 1.45million in May. Another on same road sold for 1.25 mill in March at auction having had an AMV of 950k
> [broken link removed]
> 
> [broken link removed]=
> 
> Lets say it sells for broadly that price plus stamp means E 1.5m. A 25yr old starting out and trading up will pay in total including all interest at least E3m before finally owning this property i.e. double the price as a basic rule. Thats 75,000 a year for 40 years of after tax income or 120,000 a year for 40 years of gross income. We will truly be a miracle economy if the incomes are there to support this.
> 
> PS in 2004 I think there was *something less than 3000 properties* in the UK that sold for more than £1m ? Can anyone confirm ?
> 
> 
> 
> 
> 
> The property in question is an extended semi. The cost of reinstatement (i.e. the cost of rebuilding a facsimile of the property)  would be in the region of say €200,000; which would suggest that the narrow strip of land on which this house stands is worth somewhere in the region of €1,000,000.
Click to expand...


----------



## Duplex

Duplex said:


> There was an article in todays IT, by a woman discussing the US market. She advised that Irish buyers might want to steer clear of Florida as prices had fallen by 15%. (The IT has run several articles extolling the virtues of Floridian property previously, they weren't decent enough to issue a warning to their readers however when the market started to dive.)
> 
> Anyway this lady singled out Phoenix, Arizona as a possible alternative investment location for Irish investors scared away from Florida and other cooling markets. So to circumvent the need for her to publish an article in a couple of months telling her readers to avoid Phoenix I'll do that now. Avoid Phoenix prices are falling now.


 
Fortune Magazine called the Phoenix market as far back as May, and what did the official organ of the super rich call it? 'A Dead Zone'.  The Irish are in the grip of a mania that may have infected others but not in the feverish lunatic manner it has here.  

http://money.cnn.com/2006/05/03/news/economy/realestateguide_fortune/


----------



## Raskolnikov

Today's (Cork) Examiner came with a bumper 72 page Property section, I don't see any evidence of price reductions in it although I have noticed properties in it that have been on myhome for months now. Asking prices have remained static though.


----------



## Jeanne

What are the most popular days for viewing (in Dublin)? I heard Thursday evenings and Saturday's. There are a few houses for sale in my neighbourhood and I've not seen much activity today, which I thought would be a busy day for viewings.


----------



## Jeanne

madisona said:


> The owners of the "Irish" Examiner would like it to be known that the Examiner is a national newspaper which is also read in Dublin ( albeit by Cork people that are living there). Boy.


 
I still think of that paper as the 'Cork' Examiner. Living in Dublin, it wouldn't occur to me to buy it!


----------



## Jeanne

Raskolnikov said:


> Today's (Cork) Examiner came with a bumper 72 page Property section, I don't see any evidence of price reductions in it although I have noticed properties in it that have been on myhome for months now. Asking prices have remained static though.


 
Not surprised. The EA's will of course ignore the obvious change in public sentiment toward the property market (imo) and react as though it's business as usual. I suppose we can all be guilty at times of deluding ourselves into thinking if we ignore something we don't like it will go away.

Usually I feel sorry for those with their heads buried in the sand because they don't want to see what's ahead. Not this time though.


----------



## thejuggler

Speaking of the Examiner I saw an advert in todays edition for a new development in Kanturk (I think) which had as a "special September offer" included a fully fitted kitchen including all electrical appliances for all buyers.  I think it was someone on this thread that predicted that we would start seeing builders throwing in these "extras" to entice buyers as the market begins to crash.  Is it proof that we are now at this point?


----------



## tententwenty

SLAPPY said:


> "That's right, forget about buying a three-bed in Lucan to rent to a gaggle of nurses, Cambodia is the place to lay down your cash for a rainy day.
> The home of the Khmer Rouge and the killing fields was yesterday being touted as the latest must-have for the hordes of ever-hungry Irish property investors. "


Investing in Germany or the south of France is one thing, but if you're going as far afield as south east asia, you'd better have your homework well and truly done. They have all sorts of little gotchas and addendums they like to spring on rich westerners. 

For example, property in the Philippines is a decent prospect, but you can't actually own any as a foreigner. You can own it through your wife or husband, however. Doesn't stop them advertising beachfront property in Cebu to the Americans. And once you have bought your property, they like to inform you that the land taxes haven't been paid on the property since world war 2. There are a few things you can do to get around these restrictions, but generally stay well clear of the place, would be my advice.

Remember, in asia, yes means no, and they never say no.... 

Edit: Oh yes, and lets not forget political instability...
_
Private ownership of land was abolished by the Khmer Rouge in the 1970s. Such ownership is also not recognized by the PRK government, which for example, refused to support former owners when they returned and found others living on and working their land._


----------



## Harrogate

Negative Amortisation Mortgages have been available in the boom markets of the US for some time.... These are interest-only mortgages where you don't actually pay all the interest...It is simply rolled up and and paid back later with interest on the interest!


----------



## whathome

From The Sunday Times (Ireland) today:

*Will lenders be so optimistic when property values start falling?*

http://www.timesonline.co.uk/newspaper/0,,176-2350000,00.html

"Like most of us, the bosses of lending companies have all been infected with the “property-itis virus” that convinces otherwise rational people that property values can only go up. It certainly explains why 800 mortgages a day are being sold even as repayment costs go up."


----------



## bearishbull

Was driving to see a friends new house in Ashbourne yesterday and once i got past finglas onto the new motorway it immediately struck me how much land is sitting there so close to m50 /dublin etc. Driving for miles and miles theres endless acres of fields many of which werent being used at all while some had a few horse in them and other had crops. When the people who own such land here and in other locations close to dublin eventually sell up tp developers,what will happen to the prices of all the houses miles and miles further out from dublin? Why hasnt the government used its powers to free up this land for development years ago and serve the greater public good? Agricultural land should not get more than twice its agricultural value and government should CPO all agricultural land in greater dublin as due to the current housing crisis, food should not be grown where the nations capital (and economic powerhouse) should be expanding into.Can you imagine crops growing on land 6miles from centre of london or any other major capital city??? The lack of action and planning in this country to suit vested interests will be the downfall of us.


----------



## Eurofan

So true, i fly in and out of Dublin Airport often and it amazes me to see just how much greenfield land there is *in* and around the city, and i'm not talking about phoenix park here. 

The supposed issue of 'lack of land' is a red-herring, there's a lack of _zoned and serviced_ land. Unfortunately that's a political issue too....


----------



## beattie

Eurofan said:


> So true, i fly in and out of Dublin Airport often and it amazes me to see just how much greenfield land there is *in* and around the city, and i'm not talking about phoenix park here.
> 
> The supposed issue of 'lack of land' is a red-herring, there's a lack of _zoned and serviced_ land. Unfortunately that's a political issue too....


 
Can't see anything being done about this with this government in power. The people who frequent the FF tent at the Galway races wouldn't want to see too much zoned land coming on stream, it is much better to get people to commute 200km per day instead!


----------



## Glenbhoy

In fairness Bearish, surely more urban sprawl is the last thing we need.  Yeah, it'd be great if they rezoned land closer to the city, but get an underground servicing it first.  In the UK the population are housed on 6/7% of the available land.
Obviously, if planning restrictions were to be relaxed many people would lose substantial amounts of money, including every home owner in the country, what you're proposing is anarchy, a complete breakdown in our society, you're mad


----------



## bearishbull

Glenbhoy said:


> In fairness Bearish, surely more urban sprawl is the last thing we need. Yeah, it'd be great if they rezoned land closer to the city, but get an underground servicing it first. In the UK the population are housed on 6/7% of the available land.
> Obviously, if planning restrictions were to be relaxed many people would lose substantial amounts of money, including every home owner in the country, what you're proposing is anarchy, a complete breakdown in our society, you're mad


 No , the urban sprawl results from spreading suburbs out to meath etc, higher density closer to city is far better for numerous reasons. You wouldnt do it overnight but if we want to plan for future we need cheaper property/land as high cost land/property means higher wages and higher costs making us uncompetitive internationally when we need to be as competitive as possible going forward, articifically high prices as a resuly of only 4% of land being urbanised is not a smart long term move. 
How would every home owner lose substantial amounts of money? if your living in a house what does it matter what its worth? 60% of homeowners own their houses outright and have no mortgage. The children of the homeowners who you say will "lose money" will have to pay far less for their bricks and mortar and people trading up will have to pay less for a bigger/better house.There would be some short term suffering but in long term the economy and irish society would be much better off.Some would lose out but this would be offset by gains of many other, those speculating in property and other vested interest minorites would lose out but  families who just want somewhere to live and affordable houses for their kids etc in the future would benefit.


----------



## Glenbhoy

I think I know the land you mean Bearish, and to my mind building out there - 12 (?)  miles from the city centre would not be a good idea unless we had a decent transport system.  In addition, the density there would by necessity have to be low density, why bother moving outside the M50 unless you get a decent sized place is my own theory.
Re the wealth issue, if you remember recently the BOI claimed we're all millionaires etc, what was that based on?  Of course, it was our property assets.  Regardless if people own their property outright or not (I would be sceptical of your 60% figure), you try and tell them that the house they have which used to be worth 1m is now worth the rebuilding costs of 200K and they'll not be best pleased.  People base their lifestyle around this perceived wealth, be it through top up loans, not bothering with pensions etc. 
As for anyone who's bought in the past few years, now they'd be delighted wouldn't they?
I know you're not actually proposing that all land be opened up to development (I'm just thinking of the ramifications of that as I type).
As for dooing something to try and free up more land, the govt tried back in the late 90's by giving a special break for 2 years on cgt on dvlpmnt land of 20%, this was supposed to revert to 40% by 2002.  How it all worked out, i don't know as I was out of the country for a few yrs around then,  but i do know they didn't follow up on their threat.


----------



## killeoin

whathome said:


> *ECB tone confirms looming interest rate rise*
> 
> http://www.unison.ie/business/stories.php3?ca=80&si=1685483
> 
> "The ECB is likely to keep raising rates until there are clear signs that the eurozone economy is slowing, although some analysts believe this will happen next year, pegging rates at 3.75pc"


 

You know what always confuses me above these types of quotes is that the ECB should not be worried about the eurozone economy. According to the ecb website [broken link removed]  "price stability is the primary objective" and "Without prejudice to the objective of price stability (Inflation)" are the rest. e.g. eurozone economy. The ECB is failing in its mandate.

Also on the subject of house prices and interest rates, most people now believe that interest rates will go to 3.5% by year end and 4% into nxt year. Thus, is this not allready factored into current prices? It would be if we were dealing with shares, or exchange rates so why not property?


----------



## whathome

killeoin said:


> Thus, is this not allready factored into current prices? It would be if we were dealing with shares, or exchange rates so why not property?


 
No - unfortunately it's quite the opposite...Irish buyers realising that rates were going up appear to have rushed to the lending institutions at the start of the year in a race to maximise their approval before interest rates were raised by the ECB.

Also - it's clear from anecdotal evidence that FTB's and recent buyers did not expect interest rates to rise as quickly as they have this year.

The stock and currency markets are very efficient at factoring in central bank activity but interest rate movements have a delayed effect on the property market. The effect of the first rate rises are only filtering through now showing up in the weakening property market. The same happened in 2001 when property prices fell in response to rising rates in 2000. Interest rates peaked at 4.75% in October 2000 and property prices started to fall in summer 2001.


----------



## beattie

whathome said:


> No - unfortunately it's quite the opposite...Irish buyers realising that rates were going up appear to have rushed to the lending institutions at the start of the year in a race to maximise their approval before interest rates were raised by the ECB.
> 
> Also - it's clear from anecdotal evidence that FTB's and recent buyers did not expect interest rates to rise as quickly as they have this year.


 
Yes that is my experience from some FTB's that I know, some of them are totally clueless as to where the ECB might go to over the next 12 months. There could be bit of belt tightening if Trichet and Co continue with rises of 25bp every 2 months. 

I am sure that the banks are rigorously applying the 2% stress tests at the moment......


----------



## Glenbhoy

whathome said:


> The effect of the first rate rises are only filtering through now showing up in the weakening property market.


Although the knowledge that the property market is weakening is at present limited to users of this board


----------



## Glenbhoy

SPC100 said:


> Hi Harrogate,
> 
> I've watched this thread with interest and think I have read about 70% of the posts.
> 
> I am interested in the historic norms. Have you a source for the info you quote above?
> 
> 
> Cheers!


SPC, historical norms in Ireland would be way off the mark imo, the ireland of today is vastly different than at any point in history.  We have full employment, mass immigration, average income way above EU average (higher when net income is compared) - these are all in stark contrast to the situation that has existed since this state was formed.
We therefore have to look at something different, say for example rental yields or something along those lines.


----------



## whathome

Glenbhoy said:


> Although the knowledge that the property market is weakening is at present limited to users of this board


 
Maybe you should get out more often to have a look - you might notice that it is more commonly known 

Are you bidding on any property at the moment Glenbhoy?


----------



## whathome

Many of the previous releases of new developments have *still* not sold out. Here's another example of the weakening property market...

These Clontarf apartments were released in April and were widely expected to sell out quickly - still for sale in now in September with no margin for a price increase.

April:
[broken link removed]

September:
[broken link removed]

Back in the old days when the market was still strong, the "final" phase would have sold out but the weakening market results in a struggle to offload them.  Many developments that were expected to sell out in the previous season are still struggling to sell - and we are definitely into the new selling season now.


----------



## Duplex

Glenbhoy said:


> SPC, historical norms in Ireland would be way off the mark imo, the ireland of today is vastly different than at any point in history. We have full employment, mass immigration, average income way above EU average (higher when net income is compared) - these are all in stark contrast to the situation that has existed since this state was formed.
> We therefore have to look at something different, say for example rental yields or something along those lines.


 

We don't have full employment. We have an influx of economic migrants working in the service and construction sectors, no one knows if these migrants will remain if we have a slowdown or if their home economies pick up.  While incomes have raised so has inflation above the European average and debt creation is now running well above European norms at an unsustainable rate.   We are heavily reliant on a handful of American MNC's for export earnings and by extension on an American economy which shows signs of a slowdown.  One in eight people in Ireland is employed in construction and heaven knows how much of the economy is dependent on the construction, furnishing and financing of houses.


----------



## whathome

Duplex said:


> We don't have full employment. We have an influx of economic migrants working in the service and construction sectors, no one knows if these migrants will remain if we have a slowdown or if their home economies pick up. While incomes have raised so has inflation above the European average and debt creation is now running well above European norms at an unsustainable rate. We are heavily reliant on a handful of American MNC's for export earnings and by extension on an American economy which shows signs of a slowdown. One in eight people in Ireland is employed in construction and heaven knows how much of the economy is dependent on the construction, furnishing and financing of houses.


 
Absolutely, the economy is dangerously dependent on construction.  From this article in today's Independent, it looks like there has been no let-up in construction or supply of new housing.

*Building on the rise as order books are swelling *
http://www.unison.ie/irish_independent/stories.php3?ca=184&si=1686317&issue_id=14630


----------



## whathome

*EU's central bankers signal higher rates* 

[broken link removed]

""Inflation is a very serious risk," Mario Draghi, the governor of the Bank of Italy, said in Helsinki. "We're in a situation of having extraordinarily accommodating interest rates."


----------



## soma

Glenbhoy said:


> I think I know the land you mean Bearish, and to my mind building out there - 12 (?)  miles from the city centre would not be a good idea unless we had a decent transport system.



You mean a public transport system which is as good as the one in meath/kildare, where they're building instead..?


----------



## bearishbull

_http://www.timesonline.co.uk/newspaper/0,,2769-2350137_1,00.html_


Former chief economist and deputy general of the Irish Central Bank writting in yesterdays Sunday Times.

_There is no question that demand for housing is strong, being boosted by demographic factors, immigration and an almost obsessive desire for homeownership, even multiple homeownership. Another demand factor is the help provided by parents to their children through releasing equity in the family home. Young people are buying houses at an earlier age to “get on the ladder”. This, combined with overlending by banks, has set up an almost self-perpetuating spiral. __Figures released by the Irish Bankers Federation show that almost a third of all home loans are now for investment. Is this lending underpinned by demographics, or is it a plain old investment bubble? On the supply side, Ireland is not overpopulated, yet site values have shot into hyperspace. The servicing of land for building has also failed to keep pace. When the president of the European Central Bank recently referred to “abnormal” property markets, what other country could he have been talking about?_ 

He also questions the quality of the economic growth and says that theres such a thing as unhealthy economic growth and that under the facade the economy isnt so great going forward.

_Merchandise exports, however, have been sluggish for a while now. In the case of indigenous companies, they have been flat for 10 years. This may relate to high wage growth and lack of competitiveness. If the dollar falls in value, the trend for exports could become very worrying._


----------



## Bedsit

More bad news from Australia

http://www.smh.com.au/news/national/left-with-an-empty-feeling/2006/09/09/1157222376383.html


----------



## HotdogsFolks

I get the feeling a lot of people here are secretly hoping for a crash. Is this based on jealousy (you missed the boat a few years back) or because you honestly believe a correction is justified? It does seem a lot of you will be delighted when people start being unable to make their mortgage repayments... Seems a bit sad/sick IMO.

But back OT: Again anecdotal evidence, but a few friends of mine who were planning on buying a house this year have decided to "wait and see". The ones who did make the purchase now have a worse standard of living due to financial stress and the "unknown" which is down the road.

Personally I think people who commute from Kildare / Cavan etc to Dublin each day are crazy. I'd rather emmigrate than live that kind of depressing existance. Financially, mentally, etc it's just not worth it...


----------



## Remix

Irish Consumer Sentiment takes a serious dip August:

http://www.finfacts.com/irelandbusinessnews/publish/article_10007239.shtml


----------



## whathome

HotdogsFolks said:


> I get the feeling a lot of people here are secretly hoping for a crash. Is this based on jealousy (you missed the boat a few years back) or because you honestly believe a correction is justified?


 
I honestly believe that a correction is justified.  We have a massive property bubble which is damaging the economic future of the country IMO.  I'm certainly not jealous, I purchased in two properties in 1998 and 2001 - so I don't think you could say I missed the boat.  

I would say most people here are enjoying the debate and posters with bearish opinion reflect the change in public sentiment.  Nobody wants to see mortgage holders suffering.  It would be nice however to see first time buyers have a chance to purchase property without having to commit themselves to a near endless financial incarceration.


----------



## Calina

HotdogsFolks said:


> I get the feeling a lot of people here are secretly hoping for a crash. Is this based on jealousy (you missed the boat a few years back) or because you honestly believe a correction is justified? It does seem a lot of you will be delighted when people start being unable to make their mortgage repayments... Seems a bit sad/sick IMO.



It seems to be common to dismiss those who consider a correction to be somewhat desirable as been sad jealous losers. Personally I think that's highly insulting. 

Currently, average home prices in Ireland are between 8 and 10 times average salaries. With the best will in the world, that is not sustainable, so either house prices come down, or salaries will have to rise. There is no way in hell that salaries will go up without causing inflationary trouble and unemployment troubles. It will also happen over IBEC's dead bodies and by and large, as they do the paying.... 

The property market in Ireland is the way it is because property has lost its utilitarian function and has become a get rich quick scheme. As such, quite a lot of the property being built is being built with the intention of maximising the amount of money that can be made in the short term, and with little or no respect to how it's going to be used. Example - all those small and horrifically expensive one bedroomed apartments going up in County Dublin commanding up to 300K. 

Why do I think a correction is necessary? Because we can't afford to pay for that property. We think we can but in truth we have to borrow massive and increasing amounts of money - and that money is getting more expensive - to pay for it, and in a lot of cases, we don't even need it. We're just going to use it as a pension because hey, it'll be worth millions in 30 years time when we retire. But millions mightn't buy you much in 30 years time. Or we're going to make a fortune on cap appreciation within 4 years. Or we think we're able to be landlords whereas half the questions elsewhere on this site display crass naivete on the part of first time landlords. 

I don't like raining on anyone's parade but I am convinced that this state of affairs is not sustainable and the sooner a correction comes, the less impact it will have on the rest of the economy - which won't go unaffected anyway. To pretend that things can go on as they are is redolent of burying your head in the sand.


----------



## room305

HotdogsFolks said:


> I get the feeling a lot of people here are secretly hoping for a crash. Is this based on jealousy (you missed the boat a few years back) or because you honestly believe a correction is justified? It does seem a lot of you will be delighted when people start being unable to make their mortgage repayments... Seems a bit sad/sick IMO.


 
It can seem that way but the bulk of posters here don't want a crash, they just see it as unavoidable. Houses are overvalued by any measure you care to use. Thus they need to correct, how they correct will be either a short, sharp correction or a long drawn out one.

Up to maybe two years ago, a sharp correction would have been better. Now I think it has gone too far and if the "soft landing" can be engineered (I am very doubtful) I think this would be best. A housing correction now will bring about a recession.

As for jealousy - if people have put up with unbearable smugness from specuvestors making obscene money on property in the past few years, then don't deny those who "missed the boat" a sly smirk as they watch these people struggle to come to terms with the sheer volume of debt they are carrying once the market turns on them.


----------



## phoenix_n

Bedsit said:


> More bad news from Australia
> 
> http://www.smh.com.au/news/national/left-with-an-empty-feeling/2006/09/09/1157222376383.html


 
Scary stuff.


At Annandale, a "mortgagee in possession" house, bought 18 months ago for $750,000 was up for auction. But only a handful of interested parties went looking for a bargain.
The Susan Street home passed in at auction without attracting a single bid. Before the auction, Century 21 City West principal Matthew Meynell expected the three-bedroom, two-bathroom strata home to sell for about $550,000.
Afterwards, a potential buyer offered a mere $330,000.


----------



## tententwenty

whathome said:


> Nobody wants to see mortgage holders suffering.


Frankly if specuvestors get hurt in a property crash, I for one will be rolling in the aisles. This is what happens when you force the price of a basic human requirement to increase dramatically beyond the reach of the normal family. Whats next, medical monopolies?

Good riddance.


----------



## bearishbull

HotdogsFolks said:


> I get the feeling a lot of people here are secretly hoping for a crash. Is this based on jealousy (you missed the boat a few years back) or because you honestly believe a correction is justified? It does seem a lot of you will be delighted when people start being unable to make their mortgage repayments... Seems a bit sad/sick IMO.


 
Getting nervous? A correction will be good for the longterm health of the economy. There will be winners and losers in a crash in the same way there was winners and losers from the so far ever increasing house price spiral over last ten years. How optimistic could a twenty year old in college now be of buying a home when he gets out of college in a few years ? A single person earning 50k a year would find it hard to purchase a first time property in Dublin despite earning a salary much more than the average. Things are'nt right and the market has to correct.


----------



## CelloPoint

bearishbull said:


> Getting nervous? A correction will be good for the longterm health of the economy. There will be winners and losers in a crash in the same way there was winners and losers from the so far ever increasing house price spiral over last ten years. How optimistic could a twenty year old in college now be of buying a home when he gets out of college in a few years ? A single person earning 50k a year would find it hard to purchase a first time property in Dublin despite earning a salary much more than the average. Things are'nt right and the market has to correct.



But remember, we've entered a new economic paradigm.


----------



## whathome

tententwenty said:


> Frankly if specuvestors get hurt in a property crash, I for one will be rolling in the aisles. This is what happens when you force the price of a basic human requirement to increase dramatically beyond the reach of the normal family. Whats next, medical monopolies?


 
It's unusual for me to defend speculators but as long as specuvestors didn't do anything illegal, I see know reason to take delight in seeing people (whoever they are) suffering financial hardship.  Better to roll in the aisles at your own good fortune than when others get hurt.  I have no sympathy for specuvestors but it was the market that forced "a basic human requirement" to increase dramatically, they were just participants playing by the rules of the day.


----------



## tententwenty

whathome said:


> Better to roll in the aisles at your own good fortune than when others get hurt.


Others are getting hurt, and in large numbers too.



whathome said:


> I have no sympathy for specuvestors but it was the market that forced "a basic human requirement" to increase dramatically, they were just participants playing by the rules of the day.


Participants that we've been listening to smirking while they lauded themselves on becoming the new "landlord class" over the last few years, while contributing to the market in a very real way. Now the shoe is on the other foot, and they can expect no sympathy from me. They can expect a few belly laughs however. I wouldn't mind seeing a few bankers strung up as well, not to mention politicians and EAs.

Yes it wasn't illegal. But it should be.


----------



## whathome

tententwenty said:


> I wouldn't mind seeing a few bankers strung up as well, not to mention politicians and EAs.


 
All that anger  

Looks like *HotdogsFolks *was correct about one or two people


----------



## Glenbhoy

Duplex said:


> We don't have full employment. We have an influx of economic migrants working in the service and construction sectors, no one knows if these migrants will remain if we have a slowdown or if their home economies pick up.


Okay, so we actually have employment in excess of full employment - my apologies, but it amounts to the same thing anyway.



> Callina,
> Currently, average home prices in Ireland are between 8 and 10 times average salaries. With the best will in the world, that is not sustainable


Is this really the case?  What you've got to take into consideration is that most home purchases are made by working couples, thus, the average home (380K?) is less than 6 times average salary (33K?).  
How do we know that is not sustainable?  I mean people all have jobs now (which pay well), people live longer and can afford to work longer, interest rates are still at historical lows and there's seemingly no prospect of them increasing to the double digit rates of the past, we have population growth for the first time in 160yrs - who knows what the future will bring?  (maybe even some infrastructure??).


----------



## Duplex

Hotdogsfolks.

I suppose you have two options; you can chose to take delight in the misfortune of others, or you can chose to pity them. Neither option is particularly pleasant.


----------



## tententwenty

whathome said:


> All that anger
> 
> Looks like *HotdogsFolks *was correct about one or two people


People buying their homes to live in, first time buyers trying to put a roof over their heads, I think thats great. I support that fully. Scouring the future of the nation to line your own pockets, well that gets me a bit irritable.


----------



## Glenbhoy

tententwenty said:


> Others are getting hurt, and in large numbers too.


Well, enlighten us, who is getting hurt?



tententwenty said:


> This is what happens when you force the price of a basic human requirement to increase dramatically beyond the reach of the normal family.


 
Presumably you are referring to home ownership here?  If so, why and when did this become a basic human requirement?


----------



## Duplex

Glenbhoy said:


> Okay, so we actually have employment in excess of full employment - my apologies, but it amounts to the same thing anyway.
> 
> 
> Is this really the case? What you've got to take into consideration is that most home purchases are made by working couples, thus, the average home (380K?) is less than 6 times average salary (33K?).
> How do we know that is not sustainable? I mean people all have jobs now (which pay well), people live longer and can afford to work longer, interest rates are still at historical lows and there's seemingly no prospect of them increasing to the double digit rates of the past, we have population growth for the first time in 160yrs - who knows what the future will bring? (maybe even some infrastructure??).


 
I thought unemployment was running at 4-5%?


----------



## whathome

Duplex said:


> Hotdogsfolks.
> 
> I suppose you have two options; you can chose to take delight in the misfortune of others, or you can chose to pity them. Neither option is particularly pleasant.


 
There is a third option...Indifference.


----------



## tententwenty

Glenbhoy said:


> Well, enlighten us, who is getting hurt?


 The fact that you need to ask these questions means you need a serious enlightening. What about young couple who have traded away the next 35 years of their lives to live in a rattletrap? Assuming they could even get into a home of their own, which in a country with 275,000+ empty homes lying around is inexcusable. And what, another 90,000 built this year? And of course thats assuming again that interest rate rises don't force them out onto the street with a hundred grand in debts and nothing to show for it. All of which can be laid squarely at the door of speculators and banks. If either of these groups take a hammering, I won't be contributing to the fund for bankrupt investors.



Glenbhoy said:


> Presumably you are referring to home ownership here?  If so, why and when did this become a basic human requirement?


Wow.



Glenbhoy said:


> thus, the average home (380K?) is less than 6 times average salary (33K?).


More crack smokery. Thats 10 to 12 times average wages.


----------



## cjh

Glenbhoy said:


> Well, enlighten us, who is getting hurt?
> 
> 
> 
> Presumably you are referring to home ownership here? If so, why and when did this become a basic human requirement?


 

Speechless.


----------



## Calina

Glenbhoy said:


> Is this really the case? What you've got to take into consideration is that most home purchases are made by working couples, thus, the average home (380K?) is less than 6 times average salary (33K?).
> How do we know that is not sustainable? I mean people all have jobs now (which pay well), people live longer and can afford to work longer, interest rates are still at historical lows and there's seemingly no prospect of them increasing to the double digit rates of the past, we have population growth for the first time in 160yrs - who knows what the future will bring? (maybe even some infrastructure??).



1) a lot of people are not trying to buy as couples
2) a lot of people may wind up not paying mortgages as couples as someone takes time off to have children. Their cost of living will rise exponentially as they have children. 
3) a lot of historical salary-houseprice ratios (if not all) are single income based. So historically, it was six times one salary. As such it has doubled. 

We may not know anything for sure. But you cannot claim for sure that it is sustainable since our immigration (and thus population growth) is dependent on 1) internal construction and 2) tax havening a number of American MNCs. From an economic point of view, these are not reliable sources of economic growth for the future and without that economic growth we cannot depend on employment. 

Much of our employment growth of late has not, incidentally, been in the sector that turned our economy into a powerhouse. We cannot export roads and house. They cannot earn our economy much in the long term. I hope to be alive for another 30 years. I can remember when things were very bad in this country and I can remember when they got very good. The turning took around 5 years start to finish. Who's to say it can't turn equally sharpish? I see a lot of people who assume that the good times will last forever. A cursory look at economic history the world over will make it clear that this is not true.


----------



## room305

tententwenty said:


> Participants that we've been listening to smirking while they lauded themselves on becoming the new "landlord class" over the last few years, while contributing to the market in a very real way. Now the shoe is on the other foot, and they can expect no sympathy from me. They can expect a few belly laughs however. I wouldn't mind seeing a few bankers strung up as well, not to mention politicians and EAs.
> 
> Yes it wasn't illegal. But it should be.



tententwenty - it's not pleasant but (ridiculous investment tax breaks aside) it's a free market. If investors decide to snap up every home as they come onstream then the builders will keep building more and eventually the price will come down dramatically. Housing has become divorced from its actual use but the time for government intervention is long gone - if indeed it was ever there.

Adapt and survive like humans always do. Do what I'm planning on doing and rent somewhere plush and let some foolish landlord subsidise your lifestyle. Then buy your house when the herd is stampeding the other way.


----------



## walk2dewater

cjh said:


> Speechless.


 
There is an incredible amount of gormless, shocking ignorance about how the world/economy actually operates.  People, particularly the 50+ age group, genuinely believe that the last 10+yrs somehow irrefutably proves that pyramid schemes work and that we've somehow 'magic-ed' wealth out of thin air?   It reminds me of the child who thinks "money" comes from the "bank machine"


----------



## Glenbhoy

Duplex said:


> I thought unemployment was running at 4-5%?


Indeed, but that is full employment according to many economists - there's always a few people out there who don't work out of choice.


> More crack smokery. Thats 10 to 12 times average wages.


Indeed a little error on my part, but Callina understood my point.


> What about young couple who have traded away the next 35 years of their lives to live in a rattletrap? Assuming they could even get into a home of their own, which in a country with 275,000+ empty homes lying around is inexcusable. And what, another 90,000 built this year? And of course thats assuming again that interest rate rises don't force them out onto the street with a hundred grand in debts and nothing to show for it. All of which can be laid squarely at the door of speculators and banks. If either of these groups take a hammering, I won't be contributing to the fund for bankrupt investors.


And why did they purchase this 'rattletrap', was it the auld gun to their head trick those heartless developers often use?
One would imagine that with so much supply that rent would be quite reasonable, perhaps couple above would have contemplated that?
And you reckon that the blame for spiralling can left squarely at the door of speculators and banks, they really are heartless alright, what with them responding to demand and all that, why lock em up I say!!


----------



## tententwenty

room305 said:


> tententwenty - it's not pleasant but (ridiculous investment tax breaks aside) it's a free market. If investors decide to snap up every home as they come onstream then the builders will keep building more and eventually the price will come down dramatically. Housing has become divorced from its actual use but the time for government intervention is long gone - if indeed it was ever there.
> 
> Adapt and survive like humans always do. Do what I'm planning on doing and rent somewhere plush and let some foolish landlord subsidise your lifestyle. Then buy your house when the herd is stampeding the other way.


Yeah thats wise. I wouldn't undervalue the usefulness of government intervention, however; solid regulatory slaps for the banks combined with far higher taxes for second and subsequent properties should cool their heels a bit.


----------



## cjh

walk2dewater said:


> There is an incredible amount of gormless, shocking ignorance about how the world/economy actually operates. People, particularly the 50+ age group, genuinely believe that the last 10+yrs somehow irrefutably proves that pyramid schemes work and that we've somehow 'magic-ed' wealth out of thin air? It reminds me of the child who thinks "money" comes from the "bank machine"


 

Could you clarify whose ignorance you're refering to?


----------



## tententwenty

Glenbhoy said:


> And why did they purchase this 'rattletrap', was it the auld gun to their head trick those heartless developers often use?
> One would imagine that with so much supply that rent would be quite reasonable, perhaps couple above would have contemplated that?
> And you reckon that the blame for spiralling can left squarely at the door of speculators and banks, they really are heartless alright, what with them responding to demand and all that, why lock em up I say!!


Rent is quite reasonable. Its a vicious circle. Low interest rates mean larger loans for people earning less, enabling higher house prices (indeed the only thing that does, unless someone found an oil well suddenly in every home in the country), which speculators pay in the hope of capital appreciation and in the process artificially reducing supply, which builders take as licence to vastly increase construction output. Rinse, repeat.

The upshot of which is that a lot of average young families become roadkill when interest rates rise, not to mention over extended speculators. One of these groups I'll be sad for, the other I'll be laughing at.

Stop me if I'm going too fast for you.


----------



## walk2dewater

cjh said:


> Could you clarify whose ignorance you're refering to?


 
"particularly the 50+ age group"

The cohort who are eating the under 35s alive in this country.


----------



## gearoidmm

> My house has been on the market now for 3 weeks without as much as a phone call!!
> 
> My next door neighbour sold in April and was sale agreed within two weeks, well above her asking price.
> 
> How long would you leave it with an agent with no feedback whatsoever? I am not blaming the agent by the way. She has put it on my home, daft etc. I am thinking of perhaps advertising it in the local paper also?
> 
> I had put a holding deposit on a new house (which it will look like I will now not be able to buy) as I am not sure if the house will sell at all.
> 
> Have been awake till four o'clock in the morning worrying about all this. Makes me want to just stay put. I agree with the previous poster who said selling was definitely more stressful than buying.



From another thread (selling house in Dublin).
Signs of change in sentiment?


----------



## daveirl

http://www.askaboutmoney.com/showpost.php?p=275611&postcount=1


----------



## redo

gearoidmm said:


> From another thread (selling house in Dublin).
> Signs of change in sentiment?


I think the build up of supply in the Lucan area is having a knock on effect for sellers.


----------



## room305

daveirl said:


> http://www.askaboutmoney.com/showpost.php?p=275611&postcount=1



He's losing €13k a year. Sounds like a great investment.


----------



## SidTheDweeb

To the person who asked would I be happy if the property market crashed...

Tough question.
Instinct makes me reply with YES, as...
- would be able to get a better quality place for less money (I know this is a point that can be argued, but don't have the steam this evening to back this assertion up)
- government and developers etc. may rethink building strategies (area, size etc) and it should lead to more desireable newbuilds - not lego land)
- hopefully it won't be the norm to have to borrow/take money off parents to buy a place (i really hate the idea of that)
- specuvestors with bad attitudes and smug mugs will take a hit (probably shouldn't feel this way - but can't help it - bitterness eh?  )
- normality will return and people will buy places to live in, or investors with means will buy adequate homes to rent out longterm

My head makes me think a crash will really hurt everyone in the country
- unemployment
- social welfare mess
- higher taxes
- hand-wringing
- blame game
- less well-off

Let's wait n see


----------



## Duplex

SPC100 said:


> Hi Glenbhoy - Harrogates original post says
> "eg House price to rent *and* house price to salary ratios greater than ever before"
> 
> I am intested in Irish and foreign historical norms for yield and salary/price stats. I agree we are likely way off historical norms, but I am interested in the data to see how far we and other countries are off.
> 
> If Harrogate has any sources of information for that I would love to have a gander at it.


 
You'll find this report from The Federal Reserve interesting; 

http://www.federalreserve.gov/pubs/ifdp/2005/841/ifdp841.pdf


----------



## blindjustice

I think alot hinges on how many 20-35yr olds are doing cruel commutes to Dublin, in a situation where both need to be working to support themselves. I know plenty in a situation where they could never afford it if one was out of work. I wonder what % these people are. I can only speak about who I know and many consider moving abroad

What is the typical first time buyer and what is their typical purchase etc etc


----------



## minky

blindjustice said:


> I think alot hinges on how many 20-35yr olds are doing cruel commutes to Dublin, in a situation where both need to be working to support themselves. I know plenty in a situation where they could never afford it if one was out of work. I wonder what % these people are. I can only speak about who I know and many consider moving abroad
> 
> What is the typical first time buyer and what is their typical purchase etc etc



I don't know the % either but I can tell you this, Some of these young couples have already snapped, couldn't take the commuting to dublin hell any longer. 

I know of two couples who have acquired visas in the last 2 years and have sold their residences in the midlands areas and upped sticks, brought their kids with them & all. One couple went to canada, the other went to Oz respectively. 

Neither of them regret it in the slightest, say that the quality of life and affordability far outstrips any benefits of being home. 

It may be only a trickle now, but it may turn into a flood the at the rate the country is going at the moment with rising costs, interest rates, affordability, etc.  What makes me laugh is the way that some of the bulls think that young couples are going to put up with this s**t no matter what happens in the future, and that we've nowhere to go, they've got to be completely deluding themselves. 

Anyway thats my 2 cents, feel free to savage what I've said.


----------



## whathome

*Banking fears wipe €700m off index*

The fall was attributed to a *Credit Suisse* report on Irish financial institutions...

[broken link removed]

"It also warned the level of bad debt in Irish banks could double in the near term as rising interest rates hit overstretched borrowers"


----------



## thewatcher

minky said:


> I don't know the % either but I can tell you this, Some of these young couples have already snapped, couldn't take the commuting to dublin hell any longer.
> 
> I know of two couples who have acquired visas in the last 2 years and have sold their residences in the midlands areas and upped sticks, brought their kids with them & all. One couple went to canada, the other went to Oz respectively.
> 
> Neither of them regret it in the slightest, say that the quality of life and affordability far outstrips any benefits of being home.
> 
> It may be only a trickle now, but it may turn into a flood the at the rate the country is going at the moment with rising costs, interest rates, affordability, etc. What makes me laugh is the way that some of the bulls think that young couples are going to put up with this s**t no matter what happens in the future, and that we've nowhere to go, they've got to be completely deluding themselves.
> 
> Anyway thats my 2 cents, feel free to savage what I've said.


 
I said this 4 months ago on another thread and i was laughed out of the place.If the over 50's think the 20's/30's educated age group are going to turn themselves in financial slaves to keep them in the lives they've become accustomed to their deluding themselves.I know lads already applying for australia.


----------



## Remix

finfacts:


> *The Irish Times also reports that petrol prices in the Republic should be much lower than they are, with retailers too slow in passing on reductions to consumers, according to a new economic analysis.*


 
and what about house prices Irish Times ??


----------



## phoenix_n

Phibsboro terrace price decreased from  to [broken link removed]

And all the kings horses and all the kings men.....


----------



## soma

Anecdotal I know.. but there are currently 50 (fifty) properties for sale in Ranelagh on www.myhome.ie - anyone who knows Ranelagh knows it's not exactly a large area.


----------



## elefantfresh

Friends of mine just bought a house in south co dublin advertised for 425k - they got it for 385k.


----------



## delboy159

nice one phoenix_n - good find.  saying that, it does need a lot work and just over 500 sqft for a 2 bed is a serious squeeze. Realistically if I saw that house drop from 425 to 395 I'd be thinking the max I'd go is 380k.... 

I might be wrong on my area - I don't live quiet as close to town, but you could get 2 bed mid terrace for under 450k in Drumcondra (a mile or so furher up the road) - bigger than that one and in better condition....  

Would you have felt that the 425k was a new price level, because I feel there is better value in the D3 or D9 (possible D7 area - but I don't know it that well)?

Still in the crazy April someone might have paid over 400k for that!


----------



## phoenix_n

delboy159 said:


> nice one phoenix_n - good find. saying that, it does need a lot work and just over 500 sqft for a 2 bed is a serious squeeze. Realistically if I saw that house drop from 425 to 395 I'd be thinking the max I'd go is 380k....


 
380K. You'd be mad. Seriously!
 


soma said:


> Anecdotal I know.. but there are currently 50 (fifty) properties for sale in Ranelagh on www.myhome.ie - anyone who knows Ranelagh knows it's not exactly a large area.


 
Phibsboro now lists 5 pages on myhome. Never remember seeing that many before either.


----------



## delboy159

I'm not saying I'd pay 380k - but anyone looking would easily smell blood at 395k - so really 395k is automatically no better than 380k...  If it stays at 380k for 6 to 8 weeks 360k or 350k is then on the table.....

Would be a fascinating property to watch...


----------



## tententwenty

delboy159 said:


> nice one phoenix_n - good find.  saying that, it does need a lot work and just over 500 sqft for a 2 bed is a serious squeeze. Realistically if I saw that house drop from 425 to 395 I'd be thinking the max I'd go is 380k....


I think you'd be insane to pay that much. Just to put this in perspective, price per square foot in *Manhattan *was $970 per square foot last year, which is €763 per square foot at current exchange rates. €380,000 for your 500 square feet comes in at €760 per square foot.

Thats right, the prices in Dublin are as high as the most exclusive areas in New Yawk, New Yawk.


----------



## fatmanknows

phoenix_n said:


> Phibsboro terrace price decreased from  to [broken link removed]
> 
> And all the kings horses and all the kings men.....


 
The Master Bedroom looks quite cosy albeit needing a wee paint touch up.


----------



## CelloPoint

soma said:


> Anecdotal I know.. but there are currently 50 (fifty) properties for sale in Ranelagh on www.myhome.ie - anyone who knows Ranelagh knows it's not exactly a large area.



I would add to that anecdotal tone, in that I have noticed a lot of houses for sale around ranelagh/rathmines. I cycle down palmerstown road every day, and as you are going towards the canal, you will see about 12-15 houses for sale. To my knowledge, a large number of these houses are pre-63 rental properties given their general shabiness, buzzers outside the houses, and bicycles locked up in the gardens. Having said this, some of them have been sold very quickly indeed! Perhaps trader-uppers? Or some investor with a massive inferiority complex, whereby he must be able to tell all his friends that he has a house in D6 (though probably on interest only).

Previously on this thread, I predicted that houses in the D4/D6 area would not be affected so much. Now though, I'm beginning to iterate on my thoughts of the extent to which D4/D6 properties will be spared from the carnage. No doubt commuterland will be hit first and hardest, but I would say we're on course for a 20% drop by summer 2007 in established suburbs such Terenure, Rathgar, Clontarf, Blackrock, etc.

To reiterate my earlier prediction: Commuterland to crash literally overnight - 40% drops by xmas are on the cards.


----------



## howstrange

On myhome.ie, an apt in the Old Chococlate Factory went on sale for €585K about 2 weeks ago. Now on sale for €550K. Obviously got a lot of phone calls!!! Outrageous selling price anyway. 

In Inchicore, there are now 9 apts for sale in the Tramyard some of these have been there for 3 months! 207 houses for sale in Lucan compared to about 150 a couple of months ago.

It seems to me that a lot of supply is building up and its not confined to certain areas!


----------



## phoenix_n

have you got a link ?



howstrange said:


> On myhome.ie, an apt in the Old Chococlate Factory went on sale for €585K about 2 weeks ago. Now on sale for €550K. Obviously got a lot of phone calls!!! Outrageous selling price anyway.
> 
> In Inchicore, there are now 9 apts for sale in the Tramyard some of these have been there for 3 months! 207 houses for sale in Lucan compared to about 150 a couple of months ago.
> 
> It seems to me that a lot of supply is building up and its not confined to certain areas!


----------



## walk2dewater

CelloPoint said:


> To reiterate my earlier prediction: Commuterland to crash literally overnight - 40% drops by xmas are on the cards.


 
Doubt it.  2 reasons why this market is still a good way from rolling over:
(1) Sentiment, i.e. willingness to borrow and belief in "owning", remains solidly bullish.
(2) Capacity to borrow remains high, yes even with ECB at 3.5% by Dec.
(3) Capacity to juggle *unsustainable* debt levels is high.

Do you really think those Ashbourne, Kildare, Drogheda, Arklow commuters are persuing the rental adds, considering moving into Dublin, closer to work and reclaiming their lives??  No, they're still far far away from putting the commuter house up for sale. They'll burn the furniture and stay in eating rice and beans before letting anything take away their house.


----------



## Firefly

Lads & lassies....after being bullish for years, I have now become a bear (partly in thanks to this thread). I have conducted my own research - there are 2 apartments for sale in the Cammock apartments in Kilmainham one asking 290k and the other asking 285k...

[broken link removed]=

[broken link removed]=

Neither have ANY offers on them and neither have car parking. Last August we sold our apt in this complex for 305k with parking. Parking had cost us 16k initially which brings a like-for-like price = 289k. Therefore even if either of these apts get what they are asking for, that would represent a no gain in the last 12 months...

I realise that this is a very specific example, but considering we had 6 bidders on our place upto very close to our sale price, the lack of any offers at all does not bode well me thinks.

Firefly


----------



## somerset

thewatcher said:


> I said this 4 months ago on another thread and i was laughed out of the place.If the over 50's think the 20's/30's educated age group are going to turn themselves in financial slaves to keep them in the lives they've become accustomed to their deluding themselves.I know lads already applying for australia.


 
I have to agree completely with this sentiment... and as stated before have already left... and thoroughly recommend to anyone.

However I doubt the level of those who decide to depart will be significant enough to impact anything other than their immediate families....  most educated people in their thirties were lucky enough to follow the herd and get on the property ladder ... its probably just those of us that failed too that will leave (or the lucky beggers who have sold up and have decided to feck off)

As an aside, depsite the doom and gloom about property in sydney reported in various newspaper links here, its suprising that it never comes up in a topic of conversation with australians... only among irish friends. i wonder should the property market there (Ireland) tumble, will it cease to be the number one conversation topic?


----------



## room305

I concur with W2DW (and not just because I'm currently selling my PPR ). There have been a few periods on this long property buying binge where the market has gotten a little twitchy. Potential buyers are currently hogging the sidelines wondering if they should really commit to buying an over-priced house in undesirable location. They have heard economists talk about "the crash" of course and are waiting hoping it will happen soon so that they can buy a cheap house. From a market perspective, things have currently flat lined and the market is awaiting a breakout.

With so much bullish sentiment still intact, I wouldn't be surprised if that breakout was to the upside with a major push upwards/buying frenzy in Dec/Jan of this year.

Thus far I haven't heard any stories of _forced_ sales like in the US and Australia. A leading indicator for this would be more credit card and short term borrowing defaults. Some people have overstretched themselves of course but borrowing is still cheap and the banks are still accomodative. No doubt many specuvestors have gotten worried (even panicked) and are trying to offload their Irish property to chase the dream in some far off location but ask the bulk of Irish property owners if they would prefer to buy a home with an affordable mortgage or rent a similar home for a paltry sum and they will invariably say "buy".

Most bubbles end with a large spike - the supposed 'last chance saloon' as even bears convert to bulls thinking they've missed the boat - after which there are no more buyers, the insiders riding the bull market from the beginning disappear and the deck of cards collapses.


----------



## howstrange

phoenix_n said:


> have you got a link ?





[broken link removed]


----------



## Duplex

> *The rating agency Fitch said it now has five countries on watch for "macro-prudential stress",* up from two last year, using a set of indicators. A mixed bag, they comprise Iceland, Azerbaijan, South Africa, Russia *and, surprisingly, Ireland, where the ratio of private credit to GDP has reached 190pc, the world's highest.* The denouement for Ireland may not be pretty, since it gave up control of monetary policy when it joined the euro.
> 
> David Bloom, global head of currency strategy at HSBC, said: "It is the US that we are worried about as the housing market turns down. The US needs nearly one trillion dollars of foreign money each year just to stand still. If people around the rest of the world start keeping their money at home for any reason, the dollar will face a serious decline and we think it will kick in later this year.
> "The risk has moved from the outskirts to the heart of the system, and it's now pressing on the very aorta of capitalism."


Ho hum and thrice ho hum.





http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2006/09/12/cctrade12.xml


----------



## whathome

room305 said:


> Most bubbles end with a large spike - the supposed 'last chance saloon' as even bears convert to bulls thinking they've missed the boat - after which there are no more buyers, the insiders riding the bull market from the beginning disappear and the deck of cards collapses.


 
There's not near enough liquidity or trading in a property market for something like a "breakout" to occur.  Breakouts occur in the stockmarket where the sheer volume of trading can cause prices to push either side of an historical range.  Have you been watching CNBC 

Anyway - we already had the spike - anyone who bought property in Spring will be able to tell you all about it


----------



## CelloPoint

walk2dewater said:


> They'll burn the furniture and stay in eating rice and beans before letting anything take away their house.


Hilarious!



walk2dewater said:


> Doubt it.  2 reasons why this market is still a good way from rolling over:
> (1) Sentiment, i.e. willingness to borrow and belief in "owning", remains solidly bullish.


You are right about peoples' willingness to borrow - they are buying into the celtic tiger dream that has been fed to them. I guess the longer the facade continues, the more minds that are tricked by elaborate marketing, the more couples that believe their bank manager has got them a 'special' deal, the longer the hysteria will continue. The hysteria is self-perpetuating - people on huge mortgages will not contemplate a reversal of economic fortune, because to talk of such eventualities, let alone think about it, would be counter to the dream of living that perfect life of cuff-links, cocktail dresses and champagne flutes (I'm thinking of a certain advert for apartments in Dundrum starting at E435k for a one-bed).

I think the policy campaigning of the opposition parties, once they get in to gear, will annihilate the false celtic dream. The opposition can't start too early, because people have short memories, and you need to save the juicy bits for the last-ditch knock-out 2-3 weeks before the election. Even if people don't cop themselves on to the government mis-management of the economic and social future of this country in the coming months, the annual hysterical Xmas consumerist spree might be enough of a distraction for the bubble to last until the new year.

Me personally, I don't think people are stupid. The people living in Kildare/Meath/Louth are well-educated young people with degrees - they will find out what is going on. The problem is, once enough of them realise it, it will be too late to do anything about it.



walk2dewater said:


> (2) Capacity to borrow remains high, yes even with ECB at 3.5% by Dec.


This is also true, but in reference to your previous point about sentiment, I think that sentiment works against banks' capacity to borrow. Yes, the money is there (largely due to huge profitability of banks from domestic economic activity and overseas operations), but if a mass-selling hysteria begins, the banks will simply turn off the tap.



walk2dewater said:


> (3) Capacity to juggle *unsustainable* debt levels is high.


This is also true, at the moment and I can see what you're saying. If the banks were to tighten their lending criteria (which they would do in the event of increased economic risk), this would effectively reduce the amount of money available in the economy. So whatever about low interest rates, poor sentiment, or high risk, will decrease the amount of money available.



walk2dewater said:


> Do you really think those Ashbourne, Kildare, Drogheda, Arklow commuters are persuing the rental adds, considering moving into Dublin, closer to work and reclaiming their lives??  No, they're still far far away from putting the commuter house up for sale. They'll burn the furniture and stay in eating rice and beans before letting anything take away their house.


But to persue the rental ads would be counter to living the perfect life dream. How would you explain to your family and friends that you are going to be a tenant once again? As you rightly put it, you'd sooner live like a dog, than publicly admit to your family/friends/neighbours that you're finding it tough to pay back that plasma hire purchase, that 06 toyota, and those increasing mortgage repayments.


----------



## ivuernis

walk2dewater said:


> "particularly the 50+ age group"





thewatcher said:


> If the over 50's think the 20's/30's educated age group are going to turn themselves in financial slaves to keep them in the lives they've become accustomed to their deluding themselves


It would be remiss to think that the majority (or even a large proportion) of the 50+ age group are lording it over the rest of us. My parents (in their 50's) are certainly not in this bracket you speak off. I'm sure there are plenty of people on this board with parents in that age group who worked hard to raise many of us 20's/30's during difficult times in the 1970s-80s. 

Playing a generational blame-game does everyone a disservice.


----------



## Calina

WRT over 50s cashing in, you can't blame them. 

But buyers are absolutely not immune from blame here. They probably bear more of it in that respect. They paid the prices. They went to the banks and asked for the money when a little collective common sense would have been to not pay the prices. Don't buy at the price if you don't like it. Collective mania on the part of buyers forced prices up. In truth, a lot of people whinged about the cost of property in this country but a significant number of them also paid the prices demanded. No one forced them to borrow all that money and no one - other than themselves - forced them to pay all that money over.


----------



## blindjustice

if you could warn everyone about a coming crash it would not help in fact it would drive it


----------



## soma

Calina said:


> WRT over 50s cashing in, you can't blame them.
> 
> But buyers are absolutely not immune from blame here. They probably bear more of it in that respect. They paid the prices.



There is a bit of a vicious cycle here..

* Yes the over 50s arent solely to blame..
* ..and yes the buyers paid those prices..
* ..but alot of those buyers would have come under huge pressure from families to 'get on the ladder', that pressure can be very hard to resist.
* ..and alot of this pressure came from... the over 50s... cos they had seen their property's value double and triple and most of them seem very happy to peddle the line that this will occour forever.


----------



## walk2dewater

ivuernis said:


> My parents (in their 50's) are certainly not in this bracket you speak off.
> 
> Playing a generational blame-game does everyone a disservice.


 
I'm not blaming anyone, I'm stating the obvious.  Is it not obvious that most over 50s enjoy massive property related wealth because most under 35s are willing to pay $350k for a commuter house?

As David McWilliams once put it, "for every over 50'er teeing off at 9am in the Algarve, there's four under 35s stuck in traffic at the M50 toll bridge".  

Sums it up in my view.


----------



## coinfused

Nobody did force the younger age bracket to buy -this is true but speaking as double income, well educated couple no kids the pressure to buy was overwhelming and not just from family. The govt and media have been selling false dreams- you cant lose with property, its in our culture to buy etc. We may be very well-educated but neither of us are economists/business heads so when the crunch time came (early this year) to buy I remembered the old marxist dictum that all markets go through cycles of boom and bust and decided to do some research on property buying. Almost every source I found was bullish along with all my phd holding peers and family. Then I found this site and 2pacs 2band theory (bring him back please!) and happened to watch a documentary on the Tulip bubble in Holland. We then decided to be more cagey with our money. Ea's treated us like dirt when we told them x house wasn't worth x price to us and the pressure was immense to cave and live off 1 salary so the other could pay a huge (to us) mortgage on a proerty with a 1 hour commute.
This notion of a new ireland where status is based on conspicuous consumption is being sold to us as the norm. If you're not a part of it you're somehow a lesser person and are still caught up in the old stifled ireland regardless of your age. This alongside a hefty serving of speculation and naked greed has driven this bubble (as with all others) . And as for those who say the market decides, we are all part of the market and when the pressure is on to enter from all sources it takes a well-informed strong minded(or lucky as in our case) punter to say no. Who among us willingly wants to lose face?


----------



## phoenix_n

room305 said:


> Most bubbles end with a large spike - the supposed 'last chance saloon'


 
Yes but that spike was Feb-April this year.


----------



## Savvy

> Yes but that spike was Feb-April this year.


Only time willl prove/disprove this.


----------



## phoenix_n

Savvy said:


> Only time willl prove/disprove this.


 
Correct. Its just my sentiment.


----------



## Jister

Jister said:


> Here is a development of 5 "executive homes" located in "exclusive" Cratloe Co. Clare. Trouble is they are beside an ESB substation and right beside the dualcarraigeway, so lots of noise pollution. Its not in a good location really, on the fringe of Cratloe and the wrong side of the dualcarraigeway so you have to go in a roundaboutway to get to the shops, schools, pubs etc. They have been under construction and on the market for over 2 years and are now sitting there empty and finished, just one has been sold.
> 
> [broken link removed]


 
Now that these houses are actually built they have gone from €850k to €750K!! As can be seen there are 4 available out of the original 5, despite being on the market since the development started.

[broken link removed]


----------



## ivuernis

walk2dewater said:


> Is it not obvious that most over 50s enjoy massive property related wealth because most under 35s are willing to pay $350k for a commuter house?


 
Yes, but for many it is paper wealth only and may never be tapped into.


----------



## griswold

To make matters worse about signing up for a 35 year mortgage - inflation wont devalue the principal to the same extent that it did for our parents' generation.
I hear a lot of people say "It'll be tough enough for the first few years but by the end our repayments will be piffle in real terms." OK for our parents who borrowed, lets say 10,000 in 1973. By 1983  inflation of 10%+ had diminished the value of what they owed.
Our generation are looking at 35 year terms rather than 20/25 years and inflation of 4% rather than 15%.
People are basing their expectations of life on what their parents tell them, (to a certain degree), but it's going to be tougher.
Forget about early retirement etc with a long term mortgage, prepare for difficulty when your Mrs has babies and you miss her contributions toward the mortgage....
Lower your expectations......
Am very pessimistic - I wish it wasn't so...


----------



## fitzy73

Hi folks - long time lurker on this thread - best one I've read on AAM.  What do people think of the position this guy is in?  Am I alone in thinking he is heading for a big big fall? 

http://www.askaboutmoney.com/showpost.php?p=272706&postcount=8


----------



## Eurofan

phoenix_n said:


> Correct. Its just my sentiment.



I'm inclined to agree.

The main issue at this point is affordability, it's been lauded for the last few years as a % of income rather than a multiple but it is now, from my own experience talking to friends and colleagues, stretched to breaking point.

I did another straw poll at my fiances workplace yesterday and of 11 people who have bought in the last two years 5 have already re-mortgaged and 1 has done so twice.

While some of this money was for 'lifestyle' reasons (holidays, car, redecorate etc), more often than not it was to pay off other debt including maxed credit cards and credit union loans used to pay deposits and furnish the house in the first place.

*All* admit difficulty making ends meet from month to month but most don't see it as a major problem since credit to cover the shortfall is easily available and is well covered by rising property prices anyway.

I honestly feel we have turned the corner at this point. In order for the market to continue upwards there must be a flow of ftbs at the bottom to facilitate this. With the rate increases to date plus the likely increases in the next few months plus the dramatic rise in heating/elec costs and the general rise in inflation signals to me that despite any desire to the contrary there is simply no more wiggle room to justify bigger mortgages for ftbs.

Bear in mind we've had _years_ of parents providing deposits, credit unions used for deposits, 'rent-a-room' and other fictional bonuses used to fluff ftbs incomes in order to get mortgages they couldn't really afford.

I'm calling the corner now.

Watch the media over the next few months announce how the 'soft-landing' has now materialised and how property will hold steady with inflation. Then watch the tens of thousands of amateur speculators head for the door since the 'moneys been made'. Watch a hold heap of ftbs sit on the sidelines since they can't afford to buy the house they'd like to live in and there's sure as hell no reason to buy property in commuterville anymore since they won't be able to trade up profitably in a few years.


----------



## gearoidmm

griswold said:


> Forget about early retirement etc with a long term mortgage, prepare for difficulty when your Mrs has babies and you miss her contributions toward the mortgage....



Exactly.  Another contributor to this thread pointed out that because most FTBs are buying with two salaries, the ratio of house prices was more like 6-to-1 rather than 11-to-1.  What is going to happen when these couples start having children in their early-mid thirties.  Maybe they will all keep working and put the children in childcare (maybe they'll have to to afford the mortgage), but as I get towards that age and my friends start having babies, more and more of them want to stay at home with the children.

The idea that all these people will still have two incomes off into the future is tosh.


----------



## CelloPoint

griswold said:


> To make matters worse about signing up for a 35 year mortgage - inflation wont devalue the principal to the same extent that it did for our parents' generation.
> I hear a lot of people say "It'll be tough enough for the first few years but by the end our repayments will be piffle in real terms." OK for our parents who borrowed, lets say 10,000 in 1973. By 1983  inflation of 10%+ had diminished the value of what they owed.
> Our generation are looking at 35 year terms rather than 20/25 years and inflation of 4% rather than 15%.
> People are basing their expectations of life on what their parents tell them, (to a certain degree), but it's going to be tougher.



That is a very good point about inflation, something I have not considered. 



griswold said:


> Forget about early retirement etc with a long term mortgage, prepare for difficulty when your Mrs has babies and you miss her contributions toward the mortgage....
> Lower your expectations......
> Am very pessimistic - I wish it wasn't so...


I share your pessimism, and at 25, I can't see myself being in Ireland in 5 years' time. For the moment though, I'm going to get as much of that borrowed European money into my bank account as possible - I won't be sticking around to help pay any of it back.


----------



## whathome

Eurofan said:


> Watch the media over the next few months announce how the 'soft-landing' has now materialised and how property will hold steady with inflation.


 
Absolutely, also watch the media switch from reporting monthly figures from the ESRI/PTSB index to annual figures so as to avoid showing a drop in the monthly figures.

So instead of announcing that house prices dropped in October by 0.2%, they will announce that annual inflation in house prices fell slightly from 15.6% to 15.4% but that prices were still up strongly over 12 months. You will have to dig to spot prices dropping initially. (listed percentages just for demonstration!)


----------



## whathome

griswold said:


> To make matters worse about signing up for a 35 year mortgage - inflation wont devalue the principal to the same extent that it did for our parents' generation.
> I hear a lot of people say "It'll be tough enough for the first few years but by the end our repayments will be piffle in real terms." OK for our parents who borrowed, lets say 10,000 in 1973. By 1983 inflation of 10%+ had diminished the value of what they owed.
> Our generation are looking at 35 year terms rather than 20/25 years and inflation of 4% rather than 15%


 
Excellent point.


----------



## blindjustice

CelloPoint said:


> For the moment though, I'm going to get as much of that borrowed European money into my bank account as possible - I won't be sticking around to help pay any of it back.




THATS THE SPIRIT 

lol


----------



## ivuernis

griswold said:


> OK for our parents who borrowed, lets say 10,000 in 1973. By 1983 inflation of 10%+ had diminished the value of what they owed.
> Our generation are looking at 35 year terms rather than 20/25 years and inflation of 4% rather than 15%.


 
The thing about our parents debt in the late 70s / early 80s is that the effects of inflation then drove both the cost of living and salaries up and in turn reducing the debt value in real terms. 

We, going forward, could still see inflation a lot higher than 4% (and real inflation is probably a lot higher anyway) but might not see a similar inflation of our pay packets (thanks to globalisation) thus making the debt situation even worse for those heavy in debt.


----------



## blindjustice

griswold said:


> To make matters worse about signing up for a 35 year mortgage - inflation wont devalue the principal to the same extent that it did for our parents' generation.
> I hear a lot of people say "It'll be tough enough for the first few years but by the end our repayments will be piffle in real terms." OK for our parents who borrowed, lets say 10,000 in 1973. By 1983  inflation of 10%+ had diminished the value of what they owed.
> Our generation are looking at 35 year terms rather than 20/25 years and inflation of 4% rather than 15%.
> People are basing their expectations of life on what their parents tell them, (to a certain degree), but it's going to be tougher.
> Forget about early retirement etc with a long term mortgage, prepare for difficulty when your Mrs has babies and you miss her contributions toward the mortgage....
> Lower your expectations......
> Am very pessimistic - I wish it wasn't so...





HOLY MOLEY


----------



## Duplex

The next decade in Ireland will be a time for cool heads and calming words.  No doubt about it.


----------



## blindjustice

about the whole globalisation thing - its a damned if we do damned if we dont 
if we increase the wages to keep up the property market and stop a crash which could possible ruin our economy then our competitiveness is out the window along with thousands of jobs
if we dont increase the wages then we are lookin at a serious crash with job losses (i think alot of people have the mindset that - i bought it last year and it went up a hundred grand sure if it crashes and goes down fifty Im still winning) 
another of the catch 22:
If there is no crash but a levelling off we are damning our younger brothers and sisters to cruel mortgages ZERO quality of life - why stay? family and friends is the only reason against emigration


----------



## phoenix_n

You are, IMO, totally correct in your sentiment with just one 'minor' flaw. The soft landing you describe is happening now with leveling prices and nervous buyers, but its actually a crash with the lead time stalling its visibility until xmas.

Do not aswell underestimate the size of the bubble.

Again, my sentiment.



Eurofan said:


> I'm inclined to agree.
> 
> The main issue at this point is affordability, it's been lauded for the last few years as a % of income rather than a multiple but it is now, from my own experience talking to friends and colleagues, stretched to breaking point.
> 
> I did another straw poll at my fiances workplace yesterday and of 11 people who have bought in the last two years 5 have already re-mortgaged and 1 has done so twice.
> 
> While some of this money was for 'lifestyle' reasons (holidays, car, redecorate etc), more often than not it was to pay off other debt including maxed credit cards and credit union loans used to pay deposits and furnish the house in the first place.
> 
> *All* admit difficulty making ends meet from month to month but most don't see it as a major problem since credit to cover the shortfall is easily available and is well covered by rising property prices anyway.
> 
> I honestly feel we have turned the corner at this point. In order for the market to continue upwards there must be a flow of ftbs at the bottom to facilitate this. With the rate increases to date plus the likely increases in the next few months plus the dramatic rise in heating/elec costs and the general rise in inflation signals to me that despite any desire to the contrary there is simply no more wiggle room to justify bigger mortgages for ftbs.
> 
> Bear in mind we've had _years_ of parents providing deposits, credit unions used for deposits, 'rent-a-room' and other fictional bonuses used to fluff ftbs incomes in order to get mortgages they couldn't really afford.
> 
> I'm calling the corner now.
> 
> Watch the media over the next few months announce how the 'soft-landing' has now materialised and how property will hold steady with inflation. Then watch the tens of thousands of amateur speculators head for the door since the 'moneys been made'. Watch a hold heap of ftbs sit on the sidelines since they can't afford to buy the house they'd like to live in and there's sure as hell no reason to buy property in commuterville anymore since they won't be able to trade up profitably in a few years.


----------



## blindjustice

in my honest opinion i believe that a soft landing is not possible
they are building 80,000plus houses a year and we already have dare i say it 275,000 houses "in the bank" empty
what happens when they dont need all the construction workers and no jobs for immirgrants we need the immirgrants to keep up the boom, our demographics wont sustain it in a few years maybe not even now if the immigrants were suddenly not allowed in
each has a knock on effect there are so many reasons for a crash 
many of them could cause it independently 
its too late to stop it - if everyone knew then everyone would try to get out quick! bringing it on suddenly


----------



## blindjustice

the govt (if they are advised properly) will try to boost the market until at least the election is finished and if they have a clue whats going on they would  call one early


----------



## blindjustice

Duplex said:


> The next decade in Ireland will be a time for cool heads and calming words.  No doubt about it.




well I want blood


----------



## Calina

blindjustice said:


> well I want blood



Why? That's hardly helpful. Some of us actually like living here; I'd prefer to get on with life - because like it or not, it goes on - and deal with reality rather than looking for blood. You just - as it happens - have to get on with it and deal with reality. The world does not stop. 

Oh, and in case it's relevant I am a FTB currently "waiting". Am I happy that I had to wait? Nope, but hell, life goes on. It's not like I'm sitting at home with bitterness building up inside.


----------



## CelloPoint

blindjustice said:


> in my honest opinion i believe that a soft landing is not possible
> they are building 80,000plus houses a year and we already have dare i say it 275,000 houses "in the bank" empty


More like 100k houses this year.

Not to mention the 20,000 odd houses on daft.ie today, I wonder how many are on myhome?

On the over 50s:

They are off playing golf, have banked their money and are living off the interest. An economic crash/property market downturn will have little effect on their desire to read newspapers and play golf all day.

The 25-30somethings are the great losers. Probably multi-national workers, defined contribution pension scheme and living in Westmeath.

Compare this with 45-50somethings (the great winners). Probably civil service workers, defined benefit pension, living beside the sea in D3 mortgage-free.


----------



## whathome

blindjustice said:


> well I want blood


 
Does daylight bother you?

I'm taking garlic and bringing the holy water before I post here again!


----------



## tententwenty

Calina said:


> Why? That's hardly helpful. Some of us actually like living here; I'd prefer to get on with life - because like it or not, it goes on - and deal with reality rather than looking for blood. You just - as it happens - have to get on with it and deal with reality. The world does not stop.


Well it might give the next shower of muppets that think about pulling something like this pause for thought, and it might give the current shower a new reality to deal with. Thats a distinct benefit I can come up with. Obviously calling for actual blood is silly, but strict regulation of the lending market with criminal penalties for infringement (including misleading marketing practices), as well as harsh laws to counteract corruption in goverment, would do wonders.


----------



## blindjustice

Calina said:


> Why? That's hardly helpful. Some of us actually like living here; I'd prefer to get on with life - because like it or not, it goes on - and deal with reality rather than looking for blood. You just - as it happens - have to get on with it and deal with reality. The world does not stop.
> 
> Oh, and in case it's relevant I am a FTB currently "waiting". Am I happy that I had to wait? Nope, but hell, life goes on. It's not like I'm sitting at home with bitterness building up inside.



aint sittin at home plenty of plans made

people should stand together a bit of unity would have stopped this years ago
as for the blood remark dont be so gutless


----------



## Calina

whathome said:


> Does daylight bother you?
> 
> I'm taking garlic and bringing the holy water before I post here again!



This could be difficult. Thanks to globalisation, vegetables don't have quite the same taste/smell/pungency as they used to. You might want to fly to a food market in France for suitably effective garlic rather than going to Tesco for mass-produced Spanish garlic.


----------



## blindjustice

tententwenty said:


> Well it might give the next shower of muppets that think about pulling something like this pause for thought, and it might give the current shower a new reality to deal with. Thats a distinct benefit I can come up with. Obviously calling for actual blood is silly, but strict regulation of the lending market with criminal penalties for infringement (including misleading marketing practices), as well as harsh laws to counteract corruption in goverment, would do wonders.



amen to that


----------



## Calina

tententwenty said:


> Well it might give the next shower of muppets that think about pulling something like this pause for thought, and it might give the current shower a new reality to deal with. Thats a distinct benefit I can come up with. Obviously calling for actual blood is silly, but strict regulation of the lending market with criminal penalties for infringement (including misleading marketing practices), as well as harsh laws to counteract corruption in goverment, would do wonders.



But none of that is blood - it comes with the label of getting on with things. Or do you assume that learning from mistakes equals blood whereas burying your head under sand is getting on with life?


----------



## blindjustice

its a touchy subject afterall a home is a basic necessity
what tententwenty posted was what i meant by callin for blood anywho 
not a bit sorry if i upset those with queasy stomachs LOL


----------



## whathome

blindjustice said:


> as for the blood remark dont be so gutless


 
....and your posts cast no shadow


----------



## bearishbull

I think the process of buying and fitting a new home for  the average FTB these days demonstrates the unsustainability of this economy quite clearly. The couple one of whom works for an american multinational and one as a construction professional borrow massive amounts of money to buy in middle of meath or similar where theres no shortage of land to build yet prices are sky high. Their house price includes around 100k for the governement who then uses the money to pay the civil servants but not for better transport links to cut their daily grinding commute. They furnish their house with finest italian slate and marble, finest korean and japanese electronics ,finest scandinavian pine ,finest german kitchen appliances etc etc, all the profit of which goes abroad and negatively affects the balance of payments. They drive their german and japanese cars and spend their holidays in europe asia and the americas. When their interest only mortgage rises due to the ecb they don't know who to blame as the government and central bank have little or no control over interest rates no matter how bad the economy becomes. Their childcare costs eat into disposable income but one of them cant stay at home to raise their kids like their parents raised them because they feel they couldnt afford it with the big mortgage,credit cards and lifestyle costs. They start to feel something has to give.


----------



## blindjustice

what has happened is a disgrace seriously there is anger among some people
it shouldnt be allowed to happen in future 
the government never tried to prevent investors outbidding FTBs


----------



## Calina

whathome said:


> ....and your posts cast no shadow



no reflection in the mirror either.


----------



## Glenbhoy

griswold said:


> To make matters worse about signing up for a 35 year mortgage - inflation wont devalue the principal to the same extent that it did for our parents' generation.
> I hear a lot of people say "It'll be tough enough for the first few years but by the end our repayments will be piffle in real terms." OK for our parents who borrowed, lets say 10,000 in 1973. By 1983 inflation of 10%+ had diminished the value of what they owed.
> Our generation are looking at 35 year terms rather than 20/25 years and inflation of 4% rather than 15%.
> People are basing their expectations of life on what their parents tell them, (to a certain degree), but it's going to be tougher.
> Forget about early retirement etc with a long term mortgage, prepare for difficulty when your Mrs has babies and you miss her contributions toward the mortgage....
> Lower your expectations......
> Am very pessimistic - I wish it wasn't so...


But does the effect of interest rates not negate this? i.e interest rates then were also above the inflation rate, so whilst their initial capital was less, they had to repay many multiples of what you repay on the same nominal amount.


----------



## blindjustice

http://members.chello.se/jennystridh/vampire.jpg
thats me
lol


----------



## bearishbull

Glenbhoy said:


> But does the effect of interest rates not negate this? i.e interest rates then were also above the inflation rate, so whilst their initial capital was less, they had to repay many multiples of what you repay on the same nominal amount.


Not if your borrowing 6 times your salary . Inflation often exceeded interest rates in 70s and 80s and wage inflation usually kept pace with both.


----------



## whathome

blindjustice said:


> http://members.chello.se/jennystridh/vampire.jpg
> thats me


 
Nice photo - you look very like a bank manager


----------



## Glenbhoy

blindjustice said:


> its a touchy subject afterall a home is a basic necessity


Not this again, who exactly is being denied a home?


blindjustice said:


> the government never tried to prevent investors outbidding FTBs


If only they'd taken account of this possibility in their 5 year plan, no matter, they should just seize these (dare i use such bad lannguage on AAM) 'investment' properties, and redistribute to those in need of owning their own homes.


----------



## Calina

blindjustice said:


> what has happened is a disgrace seriously there is anger among some people
> it shouldnt be allowed to happen in future
> the government never tried to prevent investors outbidding FTBs



Yes, it's always some one else's fault that we get into trouble, isn't it?

Plus ca change in this country by the looks of things.


----------



## blindjustice

Glenbhoy said:


> Not this again, who exactly is being denied a home?


Im not suggesting people are living on the streets but since the country has supposedly never been better off then whats with all the people commuting from so far away with a crappy quality of life


----------



## Glenbhoy

bearishbull said:


> Not if your borrowing 6 times your salary . Inflation often exceeded interest rates in 70s and 80s and wage inflation usually kept pace with both.


But wage inflation is currently in excess of both inflation and interest rates too, and inflation has been below interest rates for the past 3/4 years.  So what is the difference?  
In addition, there's no point in looking at borrowing in terms of salary, surely you must look at is a multiple of net household income in order to have any meaningful comparisons.


----------



## bearishbull

Have to back up glenbhoy a bit, housing is a right but OWNING a house is not although it is preferable for everyone that wants to to be able to own without commiting to massive 35 year loans that result in you paying around 50% more in real terms than the purchase price of your house. Scandinavia is big on everyone being able to afford housing and their social housing is excellent and abundant.


----------



## EvilDoctorK

Intersesting one on a slice of the US market - http://money.cnn.com/2006/09/11/real_estate/giant_Michigan_home_auction/


----------



## Calina

blindjustice said:


> Im not suggesting people are living on the streets but since the country has supposedly never been better off then whats with all the people commuting from so far away with a crappy quality of life



If I were going to crib about the way things were regards the country being well off but it not being apparent in XYZ...I would highlight the following items:

1) health system and
2) primary education funding and 
3) long term public transport funding. 

I wouldn't be complaining about the commuting and the quality of life side of things here because there is an element of free choice in buying half way to Cavan (assuming working in Dublin) - there is a reasonable quantity of rental available in Dublin as witnessed by static or sub-inflation rising rents, and if people had chosen the quality of life argument over the buying property argument a couple of things might be different namely:
1) slightly higher rentals
2) lower capital appreciation because of lower level of purchasers. 

Again, there is an element of choice involved here which I have no doubt will be forgotten as the dust starts to fly.


----------



## bearishbull

Glenbhoy said:


> But wage inflation is currently in excess of both inflation and interest rates too, and inflation has been below interest rates for the past 3/4 years. So what is the difference?
> In addition, there's no point in looking at borrowing in terms of salary, surely you must look at is a multiple of net household income in order to have any meaningful comparisons.


Wage inflation is barely matching general inflation and not even matching the inflation many couples are facing, general inflation is an average,i'd say the inflation for your average FTB couple in their lae 20's /30's is well above 4%.

The point about salary multiples is the banks used to only lend a smaller multiple which reduced the volume of debt a couple had relative to their combined incomes and hence higher rate werent so crippling .


----------



## tententwenty

Glenbhoy said:


> Not this again, who exactly is being denied a home?


Maybe you should answer the original rebuttals before bringing up this topic yet again.


----------



## Glenbhoy

blindjustice said:


> Im not suggesting people are living on the streets but since the country has supposedly never been better off then whats with all the people commuting from so far away with a crappy quality of life


Yeah, but that's a choice that people are willing to make, it's not something i'd do in a million years, but many people buy into the hype and the dream (particularly that one propagated by developers, you know, the couple on the patio drinking their wine.....).  
People are in a rush to buy now, before they leave college they're eyeing up their first apartment, people aren't content to live in apartments, but high density is the only way to avoid the commute (particularly with our abysmal transport infrastructure).
Yes, there have been many mistakes made by planners, developers and government, but, we cannot blame them for making people buy in ultimately undesireable locations for what may prove to be ridiculous amounts of money.


----------



## Glenbhoy

tententwenty said:


> Maybe you should answer the original rebuttals before bringing up this topic yet again.


What are you referring to?
If what you want me to say is this:
"I am not aware of any family being denied a home", there I've said it, now what?


----------



## Calina

bearishbull said:


> Have to back up glenbhoy a bit, housing is a right but OWNING a house is not although it is preferable for everyone that wants to to be able to own without commiting to massive 35 year loans that result in you paying around 50% more in real terms than the purchase price of your house. Scandinavia is big on everyone being able to afford housing and their social housing is excellent and abundant.



The problem in this country, as I see it, is a significant number of people owning more than one house, with the knock of effect of limiting supply. The tendency in this country to hold on to starter homes for investment reasons is a case in point in this country.


----------



## tententwenty

Glenbhoy said:


> What are you referring to?
> If what you want me to say is this:
> "I am not aware of any family being denied a home", there I've said it, now what?


Oh I see. Well you might want to cast your gaze over the waiting lists for affordable housing one of the days so. For a start. You might carry on by going back over the thread and looking at responses to your earlier posts.

Its amazing what you can find out when you try to inform yourself.


----------



## Duplex

I think the idea that the government isn't culpable to a great degree in allowing this shambles develop is wrong.  The government owes a duty of care to the less 'able' members of our society whether they be physically impaired or those who are the target of unethical lending practices by rapacious banks. 

Market regulation is accepted as essential by economists of every hue, similarly by political parties.  If the government fails to regulate then why have government?


----------



## Glenbhoy

tententwenty said:


> Oh I see. Well you might want to cast your gaze over the waiting lists for affordable housing one of the days so. For a start. You might carry on by going back over the thread and looking at responses to your earlier posts.
> 
> Its amazing what you can find out when you try to inform yourself.


Do you mean the various posts on here about the amount of rental accommodation available, the posts concerning the reasonableness of rent or some other posts?
As bearish states, it may not be desireable for people to rent as opposed to own, but it's an option that perhaps more people should consider.  It's not too long ago that a large percentage of our population was housed in local authority housing, it's also quite common in many European countries for people to rent their entire lives.


----------



## Howitzer

tententwenty said:


> Oh I see. Well you might want to cast your gaze over the waiting lists for affordable housing one of the days so. For a start. You might carry on by going back over the thread and looking at responses to your earlier posts.
> 
> Its amazing what you can find out when you try to inform yourself.


 
It's a basic human right to have somewhere to live, not necessarily to own. Nobody on those lists is living rough (by definition, since they need to be living locally to qualify!)

It's amazing what you can find out when you actually read the OPs original point correctly.


----------



## room305

Duplex said:


> Market regulation is accepted as essential by economists of every hue, similarly by political parties.  If the government fails to regulate then why have government?



Absolutely. While the Chavez-style economics espoused by some board members here makes my blood run cold, it is clear the government has failed in its duty to regulate both the housing and lending market.

As Trichet himself said, Ireland's policies have been "pro-cyclical" in this regard.

Poor urban planning, sloppy bank lending practices, tax incentives to invest in an overheated housing market and encouraging young couples to buy outrageously overpriced property do not a good government make.


----------



## bearishbull

Anyone sick of the long commute in heavy traffic? Why not spend 40k on this rather than a merc! Would be popular in commuterland if you could land/park at the IFSC/docks!!! 
[broken link removed]


----------



## Glenbhoy

Duplex said:


> I think the idea that the government isn't culpable to a great degree in allowing this shambles develop is wrong. The government owes a duty of care to the less 'able' members of our society whether they be physically impaired or those who are the target of unethical lending practices by rapacious banks.
> 
> Market regulation is accepted as essential by economists of every hue, similarly by political parties. If the government fails to regulate then why have government?


I think they were like a referee in who let a few tackles go unpunished early on, by the time they realised it was time to act, it was too late. It wasn't all their fault though, they were unlucky in that IR control had been ceded to the ECB at that precise time when we needed it most.
At this stage, it's too late, if they touch anything it could be catastrophic.
What do you think they could have done given that IR control was gone? Bear in mind that they attempted some measures back in 1999, I personally would have maintained these, but apparently they led to a drop in rental supply and massive hikes in rent.
Oh yeah, forgot about tax incentives - absolutely ridiculous, but sure isn't Carrrick on Shannon all the better for them


----------



## Calina

Duplex said:


> I think the idea that the government isn't culpable to a great degree in allowing this shambles develop is wrong. The government owes a duty of care to the less 'able' members of our society whether they be physically impaired or those who are the target of unethical lending practices by rapacious banks.
> 
> Market regulation is accepted as essential by economists of every hue, similarly by political parties. If the government fails to regulate then why have government?



Firstly, I'm not sure that market regulation is accepted as necessary as the current tendency in liberal economics is for it to be as hands off as possible. 

Secondly, while I would say that the Central Bank should perhaps have taken a closer interest in what the banks have been up to, it is still a shocking indictment of people in this country that they are incapable of regulating themselves. 

The truth is people who borrowed huge sums of money to buy property are also culpable to a great degree for doing so. Abdicating them of that responsibility will not prevent something similar happening in the future. But this is not surprising, because if you look at the way we drive in this country, it is exactly the same. If we have accidents, it is someone else's fault for not stopping us from driving so badly. The fact that the buck stops with the driver appears to be anethema here, and the fact remains that the buck does also stop with the people who borrowed the money. If this is not accepted or learned at some stage then I will truly believe that we deserve a nanny state.

As to whether public sentiment has changed or not - the one bit of anecdotal evidence which I bring to the table is that it has ceased to be a subject for discussion which is, in itself, telling.


----------



## whathome

bearishbull said:


> Anyone sick of the long commute in heavy traffic? Why not spend 40k on this rather than a merc! Would be popular in commuterland if you could land/park at the IFSC/docks!!!
> [broken link removed]


 
Perfect for spotting development land, corner houses or big back gardens with development potential


----------



## tententwenty

Glenbhoy said:


> Do you mean the various posts on here about the amount of rental accommodation available, the posts concerning the reasonableness of rent or some other posts?
> As bearish states, it may not be desireable for people to rent as opposed to own, but it's an option that perhaps more people should consider.  It's not too long ago that a large percentage of our population was housed in local authority housing, it's also quite common in many European countries for people to rent their entire lives.


But why? Its an artificial situation. There aren't many people in this country, there is plenty of land, and shedload of houses, about one in six of which is sitting empty, not even rented out. Therefore the prices have escalated at this demented rate due to extraordinary conditions, and when people could have their own housing, there is no reason why they shouldn't. Unless there are minority groups attempting to set the situation to recreate a landlord class, something I feel should be vigorously opposed. And there are a great many people who will feel the same. Not that it matters, the market is well on its way to resolving the situation all by itself.

I didn't say owning a house was a basic human right, for all the pedants in the crowd. Being denied home ownership in order to make certain groups more wealthy, however, thats a different story entirely. And knock off the guff about "no one is stopping them buying". With housing at 12 times average salaries, there may as well be a law in place for many people, and young families.


----------



## whathome

Calina said:


> As to whether public sentiment has changed or not - the one bit of anecdotal evidence which I bring to the table is that it has ceased to be a subject for discussion which is, in itself, telling.


 
Good point - it's all gone a bit GPO on a Saturday in 1980 around here


----------



## BigM

Calina said:


> If we have accidents, it is someone else's fault for not stopping us from driving so badly.


Totally agree - I had a 'heated debate' with a friend of mine who insisted it was the gardai's fault if he was speeding: "If they enforced the speed limits I wouldn't speed" was his argument - and his brother's a garda!!
It's this cute-hoorism mindframe that argues "if I can get away with it then it must be ok" which has led so many people into ridiculous levels of indebtedness - " sure the banks would never lend me the money/increase my credit limit/allow me to finance a 42in plasma over 40yrs if they weren't sure I'm good for the money in the end. If it all goes belly-up it must be their fault"
Make your own decisions and take responsibility for them - just because you can doesn't mean you should. 
Of course, the bears could be quite wrong and in 10yrs all those 'poor commuters' will be laughing all the way to the bank......


----------



## tententwenty

whathome said:


> Good point - it's all gone a bit GPO on a Saturday in 1980 around here


Should that be 1918 or are we mullet-bashing here? Not that theres ever a bad time for that...


----------



## room305

blindjustice said:


> what has happened is a disgrace seriously there is anger among some people
> it shouldnt be allowed to happen in future
> the government never tried to prevent investors outbidding FTBs



Stupid question probably but why should the government try to prevent investors outbidding FTBs?


----------



## tententwenty

room305 said:


> Stupid question probably but why should the government try to prevent investors outbidding FTBs?


One wants a place to live, one wants to drive housing prices higher so they can make a profit, making it even harder for the other one to find a place to live. Social responsibility, among other things.


----------



## ivuernis

room305 said:


> Stupid question probably but why should the government try to prevent investors outbidding FTBs?


 
So that would never have gotten ourselves into this situation in the first place. It's all too late now though. The recommendations of the Bacon report were discarded. That was our "get out of jail" card and we still couldn't resist the lure of a quick buck.


----------



## cjh

room305 said:


> Stupid question probably but why should the government try to prevent investors outbidding FTBs?


 

Should the government incentivise investors at the expense of FTB's?


----------



## Howitzer

tententwenty said:


> One wants a place to live, one wants to drive housing prices higher so they can make a profit, making it even harder for the other one to find a place to live. Social responsibility, among other things.


 
Grrr, once again. There is absolutely no problem finding somewhere to live in this country. And with rents being lower than mortgages and an oversupply of rental accomadation there really is no problem for someone who doesn't own property (ftb) to find somewhere to live. In fact it's EASIER for them to find accomodation than someone who owns and who, if they wish to move, will find themselves in a long expensive chain before they can actually change address. Investors have actually facilitated this scenario.

This "must own" mentality is absolutely pervasive. Maybe someone should send in Amnesty International to continental Europe to free the landless masses from their Oirish BTL overlords.


----------



## tententwenty

Howitzer said:


> Grrr, once again. There is absolutely no problem finding somewhere to live in this country. And with rents being lower than mortgages and an oversupply of rental accomadation there really is no problem for someone who doesn't own property (ftb) to find somewhere to live.


And once again, why should they have to rent out their whole lives? There is no justification for that. None. Not in this country. Anyway, as I said, the market is in the process of sorting it out with gusto, as we speak, so no need to supply the hotline number for amnesty international, thanks.


----------



## room305

cjh said:


> Should the government incentivise investors at the expense of FTB's?



Nope but that's a completely different thing entirely. I just want to know why one person cannot outbid another person on a property because they intend to let rather than live in that property.

We need a rental market too.

It's funny that on one side we have people who want socialist style housing for all (since home ownership is clearly a "right"). On the other side we have people who want the government to intervene to prevent the market collapsing.

Have all the capitalists fled already?


----------



## BigM

Howitzer said:


> Grrr, once again. There is absolutely no problem finding somewhere to live in this country. And with rents being lower than mortgages and an oversupply of rental accomadation there really is no problem for someone who doesn't own property (ftb) to find somewhere to live. In fact it's EASIER for them to find accomodation than someone who owns and who, if they wish to move, will find themselves in a long expensive chain before they can actually change address.
> 
> This "must own" mentality is absolutely pervasive. Maybe someone should send in Amnesty International to continental Europe to free the landless masses from their Oirish BTL overlords.


 
I remember when the 1st few Bacon measures were introduced - higher SD rates etc. Rents went through the roof as supply plummeted, queues around the corner for rat-infested holes. 
It was a pain for people who left school around 1990 or so - the biggest Leaving Cert classes => biggest no of renters who grew up to become the biggest no of FTBs who are now older again and causing the 'trading up' price increases.


----------



## tententwenty

room305 said:


> Nope but that's a completely different thing entirely. I just want to know why one person cannot outbid another person on a property because they intend to let rather than live in that property.
> 
> We need a rental market too.
> 
> It's funny that on one side we have people who want socialist style housing for all (since home ownership is clearly a "right"). On the other side we have people who want the government to intervene to prevent the market collapsing.
> 
> Have all the capitalists fled already?


Once you start dealing in things like home ownership as a vehicle for profit, you get into all sorts of nasty situations (like the one we have now, for example). Its the exact same as the American medical system; once you treat healthcare as a for-profit business, you have problems like a large percentage of all bankruptcies in the US being caused by medical fees. And thats just the people who have insurance, which costs an arm and a leg too. Your basic profiteering.

Buy a home to live in it, or trade up your old home to sell so you can move to a better home. The rental market is already oversaturated.

Edit: And adequate healthcare isn't a basic human right either.


----------



## Howitzer

tententwenty said:


> Once you start dealing in things like home ownership as a vehicle for profit, you get into all sorts of nasty situations (like the one we have now, for example). Its the exact same as the American medical system; once you treat healthcare as a for-profit business, you have problems like a large percentage of all bankruptcies in the US being caused by medical fees. And thats just the people who have insurance, which costs an arm and a leg too. Your basic profiteering.
> 
> Buy a home to live in it, or trade up your old home to sell so you can move to a better home. The rental market is already oversaturated.
> 
> Edit: And adequate healthcare isn't a basic human right either.


 
Ok, well you're drifting into a very Socialist argument there regarding the role of government and housing in society. While I wouldn't necessarily disagree with your sentiments it completely ignores the real world as it stands today.

I don't agree with the role investors have sometimes played in the Irish housing market but there's no point in just ignoring the scenario as it exists and pining for a utopian society.


----------



## tententwenty

Howitzer said:


> Ok, well you're drifting into a very Socialist argument there regarding the role of government and housing in society. While I wouldn't necessarily disagree with your sentiments it completely ignores the real world as it stands today.


The real world as regards healthcare here and in the US are very different. The real world as far as housing goes, we are very similar. The real world is what we make. 

I'm not advocating government sponsored socialised housing across the board, just the severe cracking down on speculators and irresponsible lending practices, possibly marketing practices, and most certainly on the corruption that appears to be endemic to the zoning process and planning permission. That should get housing down to its historic norms, which as I recall were more like 3-4 times average wage than 5-6 times, although I would agree that inflation has reduced a good deal since then, so maybe 5 times average wage is closer to sustainable. Hardly utopian aspirations, there.


----------



## room305

tententwenty said:


> Once you start dealing in things like home ownership as a vehicle for profit, you get into all sorts of nasty situations (like the one we have now, for example). Its the exact same as the American medical system; once you treat healthcare as a for-profit business, you have problems like a large percentage of all bankruptcies in the US being caused by medical fees. And thats just the people who have insurance, which costs an arm and a leg too. Your basic profiteering.
> 
> Buy a home to live in it, or trade up your old home to sell so you can move to a better home. The rental market is already oversaturated.
> 
> Edit: And adequate healthcare isn't a basic human right either.



This all sounds very socialist. The rental market may be oversaturated now but that still doesn't explain why an investor should not be allowed outbid a FTB. If I buy a house and rent it out to someone who has neither the means nor the inclination to buy, I'm providing a service. In return for this service I don't see why I shouldn't be allowed make a profit.

The bubble we have now has been caused (like all bubbles) by greed and fear, not by having landlords. Everybody who bought is complicit in some way.

Restricting the market by not allowing investors to outbid FTBs would be counterproductive in my opinion.


----------



## room305

tententwenty said:


> I'm not advocating government sponsored socialised housing across the board, just the severe cracking down on speculators and irresponsible lending practices, possibly marketing practices, and most certainly on the corruption that appears to be endemic to the zoning process and planning permission. That should get housing down to its historic norms, which as I recall were more like 3-4 times average wage than 5-6 times, although I would agree that inflation has reduced a good deal since then, so maybe 5 times average wage is closer to sustainable.



I agree with all of the above measures which sound more like proper regulation (like government's are supposed to do) rather than any outright market interference. Although I'm not sure if speculators are necessarily such a bad thing. They are very easy to blame for sure but they too have their role. Certainly they could be discouraged from simply buying houses and sitting on them for capital gain.

However, this is a million miles away from a situation where investors are banned from outbidding FTBs on a house (I could see so many things going wrong with that one).


----------



## tententwenty

room305 said:


> This all sounds very socialist.


You mean using government funds, taken from taxpayers, to support the public? Yes, they would be better off burning all that cash on a useless civil service.



room305 said:


> The rental market may be oversaturated now but that still doesn't explain why an investor should not be allowed outbid a FTB.


Because 9 times out of 10, an investor will be able to easily outbid a FTB, which is a bad thing, as it leads us to the situation we have today. And you haven't a notion of turning a profit on rent in today's market, even without over a quarter of a million empty houses. Yes, there is a place for landlords and rent, of course, but that playing field should be tightly controlled in case it gets out of hand.



room305 said:


> Although I'm not sure if speculators are necessarily such a bad thing. They are very easy to blame for sure but they too have their role.


What role would that be?



room305 said:


> However, this is a million miles away from a situation where investors are banned from outbidding FTBs on a house


No one is talking about banning them, just increasing taxes for second and subsequent houses, or measures to that effect.


----------



## Howitzer

tententwenty said:


> I'm not advocating government sponsored socialised housing across the board, just the severe cracking down on speculators and irresponsible lending practices, possibly marketing practices, and most certainly on the corruption that appears to be endemic to the zoning process and planning permission.


 
Fair enough. 



tententwenty said:


> That should get housing down to its historic norms, which as I recall were more like 3-4 times average wage than 5-6 times, although I would agree that inflation has reduced a good deal since then, so maybe 5 times average wage is closer to sustainable. Hardly utopian aspirations, there.


 
Err, surely now you're placing a price on what housing should or shouldn't be? This is effectively treating housing as a commodity, something you buy and sell and so place a price upon.

Look I don't care one way or the other who, or what's, to blame for the current high price of housing. I just feel it's overpriced, yes as a commodity, and so chose not to purchase at current prices. I don't actually blame anyone. Looking at the price it's too much for me right now so I'll pass.


----------



## gearoidmm

Blaming the house price rises on speculators is again missing the main point.  The speculators wouldn't have the money if the banks hadn't loosened lending criteria and were willing to give them so much money with so little up front.

Human nature being what it is, people cannot help but take advantage of the cheap money.  These 'speculators' are your friends, relatives and neighbours - and everyone else that has bought into this pyramid scheme.

There's nothing wrong with investors being able to outbid FTBs.  In a sane market you need a mix of both so that people like me who move a lot and want to rent can have someplace nice to live too.


----------



## Howitzer

tententwenty said:


> Because 9 times out of 10, an investor will be able to easily outbid a FTB, which is a bad thing, as it leads us to the situation we have today.


 
Ok, just being pedantic (again), but just because an investor can outbid a FTB in an auction scenario isn't in itself a bad thing. In any auction where the absolute price of the commodity is unknown it is the person who overestimates the true value of the item that actually wins the auction. As such the investor has guaranteed himself that he has overpaid for his 'commodity'. As such he has saved the FTB from overbidding. Ok in reality the losing FTB then bids like a mad man on the next place but at some point people just have to have personal discipline and walk away from auctions when their price limit is exceeded.

This is know within Game Theory as the Winners Curse.

http://en.wikipedia.org/wiki/Winner's_curse


----------



## room305

tententwenty said:


> You mean using government funds, taken from taxpayers, to support the public? Yes, they would be better off burning all that cash on a useless civil service.



I'd prefer to have it put back in my own pocket in the form of reduced taxes.



tententwenty said:


> Because 9 times out of 10, an investor will be able to easily outbid a FTB, which is a bad thing, as it leads us to the situation we have today. And you haven't a notion of turning a profit on rent in today's market, even without over a quarter of a million empty houses. Yes, there is a place for landlords and rent, of course, but that playing field should be tightly controlled in case it gets out of hand.



The situation we have today hasn't been caused by investors outbidding FTBs. It has been caused by FTBs outbidding investors. If FTBs weren't willing to pay ludicrous sums of money for a house there would be no market for the speculators who buy houses at inflated prices and sell them on to FTBs at even more inflated prices. The more a government tries to interfere with the free market the more distorted it becomes (just look at the housing market today for example).



tententwenty said:


> What role would that be?



It costs a lot of money to build housing estates and apartment blocks. Even very rich developers find it tough to raise the finance to do it in one go. So they build in phases and raise the finance by selling the phases off plan in advance of the build. People who intend to live in a home mightn't be happy to buy off-plan so this is where speculators come in. They add liquidity to the market.



tententwenty said:


> No one is talking about banning them, just increasing taxes for second and subsequent houses, or measures to that effect.



Blindjustice said that the government never tried to prevent investors outbidding FTBs, implying this was a bad thing. Unless you hold Venezuala and Cuba as role models for a utopian society, I fail to see why this would be a good thing.


----------



## tententwenty

gearoidmm said:


> Blaming the house price rises on speculators is again missing the main point.  The speculators wouldn't have the money if the banks hadn't loosened lending criteria and were willing to give them so much money with so little up front.


Absoloutely.



gearoidmm said:


> Human nature being what it is, people cannot help but take advantage of the cheap money.  These 'speculators' are your friends, relatives and neighbours - and everyone else that has bought into this pyramid scheme.


 Two words for you here... "diversified portfolios". There are a great many other investments than property.



gearoidmm said:


> There's nothing wrong with investors being able to outbid FTBs.  In a sane market you need a mix of both so that people like me who move a lot and want to rent can have someplace nice to live too.


Theres plenty wrong with it. For a start it leads to spiralling house prices and a looming collapse, with consequent knock on effects for the entire economy, which is what we have today. An investor wants to buy many houses, a FTB only wants one. Once its bought, they are out of the market, but the speculator will keep buying and driving up prices.


----------



## tententwenty

Howitzer said:


> Ok in reality the losing FTB then bids like a mad man on the next place but at some point people just have to have personal discipline and walk away from auctions when their price limit is exceeded.
> 
> This is know within Game Theory as the Winners Curse.


Its known in Ireland as a property crash.


----------



## gearoidmm

tententwenty said:


> Theres plenty wrong with it. For a start it leads to spiralling house prices and a looming collapse, with consequent knock on effects for the entire economy, which is what we have today. An investor wants to buy many houses, a FTB only wants one. Once its bought, they are out of the market, but the specualtor will keep buying and driving up prices.


 
That's not true.  If the market was behaving rationally, investors would continue to outbid FTBs until there came a time when there were too many investment properties out there and rents and occupancy began to fall.  At that point, investors would lose interest in the market and FTBs would have it all to themselves.  In practice, this is what has happened always.  You need a mix of investors and FTBs out there to keep the market going - otherwise where would the renters live.  If my landlady had not bought my place many moons ago, I'd be forced to join in the race for a FTB house - eeek.

Unfortunately, in Ireland this no longer applies and everyone (FTBs and investors alike) are bidding up the price of houses to a point where traditional measures of value are left behind (ie salary multiples and rental yields).  Eventually, you can be sure that the market will sort this all out.


----------



## Howitzer

tententwenty said:


> Theres plenty wrong with it. For a start it leads to spiralling house prices and a looming collapse, with consequent knock on effects for the entire economy, which is what we have today. An investor wants to buy many houses, a FTB only wants one. Once its bought, they are out of the market, but the speculator will keep buying and driving up prices.


 
You make it sound like you feel the average semi d should cost 10 shillings and 6 pence. That prices should never go up and anyone caught bidding more than the last person should be given the lash.


----------



## tententwenty

room305 said:


> I'd prefer to have it put back in my own pocket in the form of reduced taxes.


Ah yes social Darwinisim. The 19th century called, it wants its society back.



room305 said:


> Blindjustice said that the government never tried to prevent investors outbidding FTBs, implying this was a bad thing. Unless you hold Venezuala and Cuba as role models for a utopian society, I fail to see why this would be a good thing.


Or, possibly, Sweden.



room305 said:


> The situation we have today hasn't been caused by investors outbidding FTBs. It has been caused by FTBs outbidding investors. If FTBs weren't willing to pay ludicrous sums of money for a house there would be no market for the speculators who buy houses at inflated prices and sell them on to FTBs at even more inflated prices.


Of course, speculators never sell to other speculators, its the "in crowd" selling to the boobs. Eh I'm going to have to stop this here. If you really believe that, theres no point in me saying anything more to you.


----------



## tententwenty

gearoidmm said:


> That's not true.  If the market was behaving rationally, investors would continue to outbid FTBs until there came a time when there were too many investment properties out there and rents and occupancy began to fall.


And you have just described the Ireland of today.



gearoidmm said:


> At that point, investors would lose interest in the market and FTBs would have it all to themselves.  In practice, this is what has happened always.


You think speculators never sell to speculators?



gearoidmm said:


> Eventually, you can be sure that the market will sort this all out.


Very true. And very shortly too, IMHO.


----------



## tententwenty

Howitzer said:


> You make it sound like you feel the average semi d should cost 10 shillings and 6 pence. That prices should never go up and anyone caught bidding more than the last person should be given the lash.


I have a Modest Proposal for you... 

By the way, lets privatise healthcare too. Damn slackers, sponging off the healthy. Because housing and healthcare are on an equivalent level, I mean.


----------



## room305

tententwenty said:


> Ah yes social Darwinisim. The 19th century called, it wants its society back.



My mistake. I slept through the global communist uprising and still live in a time when low taxes, high employment and a small but efficient government are considered a good ideal. How you must laugh at fools like me left still believing in capitalism.



tententwenty said:


> Or, possibly, Sweden.



That's funny because knowing someone from Stockholm, the one thing she hates about the place is that you have to be put on a list for years to get anywhere decent to rent.



tententwenty said:


> Of course, speculators never sell to other speculators, its the "in crowd" selling to the boobs. Eh I'm going to have to stop this here. If you really believe that, theres no point in me saying anything more to you.



And I'm from the 19th century ...


----------



## exile

room305 said:


> That's funny because knowing someone from Stockholm, the one thing she hates about the place is that you have to be put on a list for years to get anywhere decent to rent.



True, it's almost the other extreme.  I doubt she complained about the size of the rent though - or that she could buy an apartment for about 100,000 Euro.


----------



## whathome

I wonder if Noel Ahern's attack on Speculators might have been the result of a misunderstanding at the highest level of government....

Bertie's instructions:

"Noel - yer man Trichet from the ESB waz on da phone to me dere givin out again 
... will ya do sumtin to sort out the flippin' property problem? ".


----------



## fatmanknows

Hear from a good source that the phones were hopping today in Gunne's, complaining about Monsieur Cassidy's predicitions of the easing of prices. It appears the nerves of some investors and the like are becoming increasingly fragile.


----------



## blindjustice

all this talk about capitalism and socialism  and whether its a right to own a home or not!!
Come on! 

the reality of ireland is ITS LIKE A CARTEL


----------



## whathome

fatmanknows said:


> Hear from a good source that the phones were hopping today in Gunne's, complaining about Monsieur Cassidy's predicitions of the easing of prices. It appears the nerves of some investors and the like are becoming increasingly fragile.


 
Good spot, I hadn't heard about this until you mentioned it.
Here's a link:

http://www.rte.ie/business/2006/0912/mibusiness.html

"GUNNE SEES PROPERTY BLAZE DYING OUT - Gunne has become the latest firm of auctioneers to call time on the roaring property market here. This morning it says the indications are that growth will ease considerably before the end of the year."


----------



## Glenbhoy

tententwenty said:


> I'm not advocating government sponsored socialised housing across the board, just the severe cracking down on speculators and irresponsible lending practices, possibly marketing practices, and most certainly on the corruption that appears to be endemic to the zoning process and planning permission. That should get housing down to its historic norms, which as I recall were more like 3-4 times average wage than 5-6 times, although I would agree that inflation has reduced a good deal since then, so maybe 5 times average wage is closer to sustainable. Hardly utopian aspirations, there.


Can you elaborate on the endemic corruption in the zoning and planning process (current examples please)?
How/why should speculators be cracked down on, do you mean recent entrants into the speculating game or the old hands who've been at it for years?  Is there not already government regulation, taxes etc, both income and cgt?
As for cracking down on lending and marketing practices, firstly, surely it's up to a lender to adequately vet their own loans, they can assess the likelihood of default better than any civil servant, after all, they're hit in the event of default too.  Secondly, as I stated before, lenders don't force anyone to take out a loan, are you suggesting that borrowers are incapable of making the decision for themselves, and that some government agency should make that decision for them?
As for your assumption of 5 times average wage, where does that come from?  Do you mean average household wages (given two parties working), in which case it's pretty close to what we currently have. 
I do agree that houses are overpriced in this country btw, but I will not accept that speculators bear the responsibility for that, investors take advantage of prevailing conditions, many recent investors probably shouldn't have got involved, they'll learn the hard way (possibly), in fact, will recent investors (many of them are of the traders up who retain property no.1) not be the hardest hit of any sector?  Double mortgage, probably well over-extended with little or no rental income from property no.1.....


----------



## Maine

whathome said:


> Good spot, I hadn't heard about this until you mentioned it.
> Here's a link:
> 
> http://www.rte.ie/business/2006/0912/mibusiness.html
> 
> "GUNNE SEES PROPERTY BLAZE DYING OUT - Gunne has become the latest firm of auctioneers to call time on the roaring property market here. This morning it says the indications are that growth will ease considerably before the end of the year."


 
This is very strange UNLESS it is directed at reluctant sellers and is intended to get them to lower their prices to shift the houses. It may be that Gunnes are tired of sellers attempting to get April 2006 prices for property. Lower priced sales are better to EAs than none.

Is it correct to think that Gunnes doesnt sell alot of large FTB developments hence are under no pressures from the developers. Therefore upsetting the FTB market in the short term is worth it if they can get the suburban sellers to lower their prices and expectations. 

Looks like April May was a great time to be selling EA firms...........


----------



## whathome

Maine said:


> Is it correct to think that Gunnes doesnt sell alot of large FTB developments hence are under no pressures from the developers


 
Apart from the "been for sale since February and first release still hasn't sold out despite lowering starting prices and already having a bus stop!" development at Adamstown


----------



## tententwenty

Glenbhoy said:


> Can you elaborate on the endemic corruption in the zoning and planning process (current examples please)?
> How/why should speculators be cracked down on, do you mean recent entrants into the speculating game or the old hands who've been at it for years?  Is there not already government regulation, taxes etc, both income and cgt?
> As for cracking down on lending and marketing practices, firstly, surely it's up to a lender to adequately vet their own loans, they can assess the likelihood of default better than any civil servant, after all, they're hit in the event of default too.  Secondly, as I stated before, lenders don't force anyone to take out a loan, are you suggesting that borrowers are incapable of making the decision for themselves, and that some government agency should make that decision for them?
> As for your assumption of 5 times average wage, where does that come from?  Do you mean average household wages (given two parties working), in which case it's pretty close to what we currently have.
> I do agree that houses are overpriced in this country btw, but I will not accept that speculators bear the responsibility for that, investors take advantage of prevailing conditions, many recent investors probably shouldn't have got involved, they'll learn the hard way (possibly), in fact, will recent investors (many of them are of the traders up who retain property no.1) not be the hardest hit of any sector?  Double mortgage, probably well over-extended with little or no rental income from property no.1.....


You have repeatedly provided information that is both misleading and flat out wrong throughout this discussion to support your own points, asking questions that have already been answered, and have a habit of waiting until after a discussion has died down to come flying in from the wings with your knickers around your ankles, trying to score the odd parting shot. Perhaps someone else would like to field that.

I really don't see much point in discussing anything with you, either.

Good luck with those old hands, though.


----------



## Maine

whathome said:


> Apart from the "been for sale since February and first release still hasn't sold out despite lowering starting prices and already having a bus stop!" development at Adamstown


 
Gunnes have clearly missed all the fast selling bonuses on that then and money to be made on those remaining will be less than 2 semi ds in suburbia


----------



## liteweight

whathome said:


> I wonder if Noel Ahern's attack on Speculators might have been the result of a misunderstanding at the highest level of government....
> 
> Bertie's instructions:
> 
> "Noel - yer man Trichet from the ESB waz on da phone to me dere givin out again
> ... will ya do sumtin to sort out the flippin' property problem? ".



Very good!


----------



## Maine

Glenbhoy said:


> As for cracking down on lending and marketing practices, firstly, surely it's up to a lender to adequately vet their own loans, they can assess the likelihood of default better than any civil servant, after all, they're hit in the event of default too.
> 
> A lender is a group of mainly senior individuals who get bonuses from advancing more money. If a bank collapses in the coming downturn then most likely they will call on the govt to get them out of trouble whether we like it or not. Reference AIB in the 1980s - would have gone bust without the govt. Also reference current Fitch ratings on the banks which clearly states they have lent too much.


----------



## redo

whathome said:


> ....and your posts cast no shadow


----------



## Afuera

Maine said:


> If a bank collapses in the coming downturn then most likely they will call on the govt to get them out of trouble whether we like it or not. Reference AIB in the 1980s - would have gone bust without the govt. Also reference current Fitch ratings on the banks which clearly states they have lent too much.


 
And why would the EU allow this blatant government interference in the market? They weren't too accomodating to the Belgian government while it's national airline was going down the tubes... I don't see why our banks would be treated any differently.


----------



## Afuera

Glenbhoy said:


> Secondly, as I stated before, lenders don't force anyone to take out a loan, are you suggesting that borrowers are incapable of making the decision for themselves, and that some government agency should make that decision for them?


 
Unfortunately it appears that a lot of borrowers might just be completely incapable of making sound financial decisions: http://www.unison.ie/irish_independent/stories.php3?ca=299&si=1686576&issue_id=14634 (needs free registration).


----------



## bearishbull

Gunne estate agents would rather a sharp correction in prices rather than a slow declining market as volume of sales would go down for longer period. It's all about volume of sales to them ,they'd rather sell a hundred houses quickly at 500k than 50 slower at 700k.


----------



## Calina

Glenbhoy, the nature of business is such that people running banks have a higher motivation to book profits than to guarantee the future stability of that bank - after all that could always be someone else's problem anyway. So it is extremely naive to assume that "banks wouldn't lend all that money if they were okay with it". Every loan they issue up their profits and that's the bottom line. Yes they do need to be kept in line. 

I find the simplistic "investor/no investor" argument as it carried on during the night to be totally naive. The point - as I see it - we always need rental accommodation. Always. However, according to CSO statistics, we have some 230,000 unoccupied accommodation units across the country. Either they are not being rented, or they cannot be rented. My money, incidentally, is on the former. The assumption appears to be that they were bought for capital appreciation purposes only. 

I have no objection to people buying for investment purposes if they are making that property available for the use of people who pay them for that service. People who buy for capital appreciation only are leeches on the economy. I think that the CGT on an investment property sold (but never rented) should be significantly higher than it is on a property which was rented out and that would almost definitely have slowed things up before they got totally critical. 

I see in that RTE report that Cassidy of Gunne mentioned the possibility of some measure for FTBs. As an FTB myself, looking, I would have to say that it is absolutely critical that there be no measure whatsoever because that only delays the inevitable.


----------



## CelloPoint

(tried posting this yesterday, but server was extremely busy)



tententwenty said:


> But why? Its an artificial situation. There aren't many people in this country, there is plenty of land, and shedload of houses, about one in six of which is sitting empty, not even rented out. Therefore the prices have escalated at this demented rate due to extraordinary conditions, and when people could have their own housing, there is no reason why they shouldn't. Unless there are minority groups attempting to set the situation to recreate a landlord class, something I feel should be vigorously opposed. And there are a great many people who will feel the same. Not that it matters, the market is well on its way to resolving the situation all by itself.
> 
> I didn't say owning a house was a basic human right, for all the pedants in the crowd. Being denied home ownership in order to make certain groups more wealthy, however, thats a different story entirely. And knock off the guff about "no one is stopping them buying". With housing at 12 times average salaries, there may as well be a law in place for many people, and young families.



You can't legislate for stupidity, true. However, we can, it seems, legislate for land hoarding, rezoning, building regulations, planning, etc. (all to the benefit of a select group of people/organisations)

The point I'm trying to say is that we live in a society that is not all about material gain: we need to protect against people being taken advantage of (this is different to stupid people making stupid decisions). A balance must be struck between a nanny state and a corporate utopia, and an elected government fulfills this role: they work for the greater good of all (supposedly). It's not a perfect system, but it's the best we've got I guess.

So in this sense, my use of the word 'pleb' in the past on this board was a bit too strong. Whilst there is a certain amount of stupidity and gullibility involved in people buying houses in the back of Ballivor in 2006, I think there are other factors at play that must be considered before we write these people off.


----------



## room305

exile said:


> True, it's almost the other extreme.  I doubt she complained about the size of the rent though - or that she could buy an apartment for about 100,000 Euro.



Nope, buying usually isn't a problem but renting is. You can wait for years (literally) for somewhere suitable - great once you get it but frustrating during the wait. It favours those who have lived in Stockholm all their lives and discriminates against migrant workers who move to Stockholm to work. The problem from what I understand it, is that they didn't build enough houses and apartments for rental. However, since renting is cheap, there is little incentive to buy so the rental waiting lists are consequently huge.


----------



## River

room305 said:


> People who intend to live in a home mightn't be happy to buy off-plan so this is where speculators come in. They add liquidity to the market.
> quote]
> 
> I havent seen much of this. In my experience, there has been huge interest from ftb's to buy off plans. I've also found that investors usually have high percentages of units bought before they are even officially launched. This squeezing of new supply has had a large impact on prices and in my opinion should have been someway restricted by govt measures.


----------



## room305

tententwenty said:


> You think speculators never sell to speculators?


 
You've mentioned this several times. Either you have no understanding of how markets work or you are being deliberately disingenuous. 

It doesn't matter if speculators sell to other speculators. Even if there is chain of 20 speculators flipping a 2 bed in the back of Ballivor, driving the eventual price up to €2M, it is for nothing if they cannot eventually sell it to someone who will use it (to live in or to let). So the eventual buyer is also responsible for the high prices. If they feel houses are overpriced they should stop buying them and the prices will come back down.

You speak as though the prices for housing are rising independently of those doing the buying.


----------



## room305

River said:


> I havent seen much of this. In my experience, there has been huge interest from ftb's to buy off plans. I've also found that investors usually have high percentages of units bought before they are even officially launched. This squeezing of new supply has had a large impact on prices and in my opinion should have been someway restricted by govt measures.



Are those FTBs not also speculating? Since they are purchasing a house before it is ready in anticipation of the market price being higher when it is. Government intervention isn't required (watch how the off-plan buyers disappear in a falling market), just common sense.

I've lost count of the number of times I've said to people - if you think it is too expensive, don't bloody buy it.

However, I still fully expect there will be a raft of anti-speculative measures brought in _after_ the market has crashed.


----------



## tententwenty

room305 said:


> You've mentioned this several times. Either you have no understanding of how markets work or you are being deliberately disingenuous.
> 
> It doesn't matter if speculators sell to other speculators. Even if there is chain of 20 speculators flipping a 2 bed in the back of Ballivor, driving the eventual price up to €2M, it is for nothing if they cannot eventually sell it to someone who will use it (to live in or to let). So the eventual buyer is also responsible for the high prices. If they feel houses are overpriced they should stop buying them and the prices will come back down.
> 
> You speak as though the prices for housing are rising independently of those doing the buying.


Bleh. When you have a bunch of specuvestors juggling properties back and forth, proclaiming "Look see it got more expensive", while the banks lend out ever higher amounts of cash based on the leverage they have gained from their own properties already in existence, which FTBs can't afford since they have no such leverage, there's no reason on earth why they can't keep doing that forever.

Unless interest rates rise and the money dries up.

Oops.

You speak as if you have little understanding of either what I am saying or of the marketplace.


----------



## bearishbull

Found this story in indo rather amusing, IFG who sell mortgages want stamp duty removed for many as it is acting as a form of contraceptive! They obviously want to try and influence Brian Cowen before budget time like the other property vested interests. Maybe these guys should worry more about the prices of houses being excessive than on stamp duty, we all know that as soon as stamp duty is removed generally it results in prices jumping higher.
http://www.unison.ie/irish_independent/stories.php3?ca=9&si=1686982&issue_id=14635

They must be getting worried about market too.
Whatever you think of stamp duty 6 or 7% on top of price when your paying a million is'nt much, most other countries have a property tax you pay every year which we dont have so you win on that count.


----------



## Calina

Interesting one from the Times in London. 

This caught my eye in particular:


> And too many young people seem to be victims of their own excess. Thirteen per cent of 21 to 24-year-olds surveyed said that they had missed one or more mortgage payments in the past 12 months.


----------



## shanegl

> there's no reason on earth why they can't keep doing that forever.


 
All pyramid schemes invariably collapse.


----------



## River

room305 said:


> Are those FTBs not also speculating? Since they are purchasing a house before it is ready in anticipation of the market price being higher when it is.


 
I bought because I found an apartment that i liked in a location that appealed to me, not because I thought it represented a potential capital gain. I purchased this property because I may not be another like it on the market for quite a while. It was also ready within 4 months of purchase so again capital gain between purchase time and completion time was not an issue. 

In my example, 45 units went on sale and 22 of them were sold before the first person in the que entered the sales office.


----------



## Afuera

River said:


> I bought because I found an apartment that i liked in a location that appealed to me, not because I thought it represented a potential capital gain. I purchased this property because I may not be another like it on the market for quite a while.


 
And why do you feel that there may not be another on the market like it for quite awhile? Is that not speculation?


----------



## room305

tententwenty said:


> Bleh. When you have a bunch of specuvestors juggling properties back and forth, proclaiming "Look see it got more expensive", while the banks lend out ever higher amounts of cash based on the leverage they have gained from their own properties already in existence, which FTBs can't afford since they have no such leverage, there's no reason on earth why they can't keep doing that forever.
> 
> Unless interest rates rise and the money dries up.
> 
> Oops.
> 
> You speak as if you have little understanding of either what I am saying or of the marketplace.



Here's how I think it played out. There was a shortage of housing due to demographics and undersupply of new builds. This coupled with the country's increased wealth drove prices up (as people could afford to pay more for a commodity they wanted that was in short supply). The rapidly increasing prices brought increased attention from the general public and soon speculation took over. In the end, it became self-fulfilling. Investors bought as many houses as they could restricting supply, prices thereby continued to increase, encouraging investors to buy even more etc. However, the higher the prices and the greater the demand, the more builders and developers continue to build. Eventually at some point something cracks - either FTBs are priced out of the market and stop buying, or rising interest rates mean investors cannot keep servicing their accumulated debt or so many houses are built that investors simply cannot keep buying enough to restrict supply. Once that point is breached, prices will come tumbing down. It's the nature of markets - overshoot then overcorrect.

By and large this seems to be your take on it too. If FTBs thought houses were too expensive why did they keep paying inflated prices? Probably, like myself, they bought into the hype. So in effect, we are not blameless. We too were motivated by fear and greed. Unless you are already of a very socialist persuasion, I cannot see why this crisis should be a call to arms for the comrades. Although no doubt some will see it that way. Notice how the blame game has already started on this thread!

The last thing we need is more government interference in the market. Their ridiculous tax incentives and continual hyping of the housing market are one of the major reasons the bubble grew so big in the first place.


----------



## room305

River said:


> I bought because I found an apartment that i liked in a location that appealed to me, not because I thought it represented a potential capital gain. I purchased this property because I may not be another like it on the market for quite a while. It was also ready within 4 months of purchase so again capital gain between purchase time and completion time was not an issue.


 
All of which is fair enough. What I don't understand is why housing should be different to anything else people want to buy. If I go into a wine shop I don't demand that my bottle of wine should be cheaper because I intend on drinking it that evening rather than placing it in a cellar with a view to selling it on at an inflated price in three years. If the bottle is too expensive I look for something else or don't buy.

An anti-speculative tax similar to the one that was already on the books but was never implemented is a good idea (i.e. tax people who buy houses with no intention of letting them). Some kind of socialist juncta where the state supplies all of our housing needs and/or fixes the prices is not.


----------



## nacho_libre

room305 said:


> All of which is fair enough. What I don't understand is why housing should be different to anything else people want to buy. If I go into a wine shop I don't demand that my bottle of wine should be cheaper because I intend on drinking it that evening rather than placing it in a cellar with a view to selling it on at an inflated price in three years. If the bottle is too expensive I look for something else or don't buy.



Not a good analogy. A place to live is a necessity. A bottle of wine?


----------



## tententwenty

room305 said:


> Here's how I think it played out. There was a shortage of housing due to demographics and undersupply of new builds. This coupled with the country's increased wealth drove prices up (as people could afford to pay more for a commodity they wanted that was in short supply).


And right there is where you miss the crucial point. _Wealth_ didn't increase, _debt_ increased. We're running debt at 190% of GDP. There are few people who are much richer now than in 2000; there are however a staggering number who are indebted to the eyeballs.



room305 said:


> Notice how the blame game has already started on this thread!


Well this is about public sentiment, after all. Its not a blame game, its about actions and consequences.



room305 said:


> The last thing we need is more government interference in the market. Their ridiculous tax incentives and continual hyping of the housing market are one of the major reasons the bubble grew so big in the first place.


Government "interference" is the only thing that will make sure that this doesn't happen again. You are talking about laissez-faire economics, the survival of the fittest and the idea that monopolies will never exist. 

If this model of economics were in place we would never have minimum wages, corporate welfare to assist part of the domestic industry, anti-trust regulation, nationalized industries, progressive income taxes, welfare programs as a way to provide a safety net for those without the capacity to find work or work because of disability, or subsidy programs for businesses and agricultural products.

There are significant differences between what I am talking about and the free for all profiteering of the American system, and damn the little man, and even more differences between what I am saying and communist style government ownership of everything.


----------



## fatmanknows

[FONT=verdana,arial]*[broken link removed]*[/FONT]
[FONT=verdana,arial][/FONT] 
[FONT=verdana,arial]*AIB: *[/FONT][FONT=verdana,arial]*House buyers feeling the squeeze*[/FONT]
[broken link removed][FONT=verdana,arial]Wednesday, 13th September 2006 10.41am[/FONT][broken link removed][broken link removed][broken link removed][FONT=verdana,arial]The squeeze on house price affordability from a combination of rising house prices and higher
interest rates looks set to continue for some time yet, according to AIB's chief economist, John Beggs........

[/FONT]


----------



## phoenix_n

phoenix_n said:


> Phibsboro terrace price decreased from  to [broken link removed]
> 
> And all the kings horses and all the kings men.....


 
Made an inquiry on the property to test the market. Said i would be interested in viewing but my ceiling was max 340K. He was open to my offer.


----------



## room305

nacho_libre said:


> Not a good analogy. A place to live is a necessity. A bottle of wine?



Come on now, I'm selling my house, it still won't leave me homeless. Housing is a commodity. The state has a duty of care to make sure the less well-off aren't homeless but that doesn't mean every citizen in the state should be able to afford to buy a home.


----------



## nacho_libre

room305 said:


> Come on now, I'm selling my house, it still won't leave me homeless. Housing is a commodity. The state has a duty of care to make sure the less well-off aren't homeless but that doesn't mean every citizen in the state should be able to afford to buy a home.



I agree with that statement to a certain extent, but at the moment the only way 
people CAN buy a house is if :

a) They have substantial wealth 
or 
b) They get into debt up the their eyeballs for the next 35-40 years.

Surely it doesn't have to be that way.


----------



## room305

tententwenty said:


> And right there is where you miss the crucial point. _Wealth_ didn't increase, _debt_ increased. We're running debt at 190% of GDP. There are few people who are much richer now than in 2000; there are however a staggering number who are indebted to the eyeballs.



Did house prices not increase prior to 2000? Are we not wealthier as a nation since the early 90's? However, since 2000/2001 we have turned inward, decreasing exports, increasing imports. Like someone no longer working but continuing to live off their savings.



tententwenty said:


> Government "interference" is the only thing that will make sure that this doesn't happen again. You are talking about laissez-faire economics, the survival of the fittest and the idea that monopolies will never exist.



_You_ mentioned laissez-faire economics not me. The state has a duty to make sure the less well-off aren't exploited but that duty doesn't extend to making sure every couple can afford to buy a 3 bedroom house within commuting distance of Dublin.

What would you call government price fixing of a commodity? It sounds very like socialism and almost always ends in tears. If the government fixes house prices then builders will have no incentive to build good houses since they'll get paid the same amount anyway. In fact they'll be postively incentivised to build the cheapest dump the regulations will allow them get away with. If the government implements a law to prevent investors outbidding FTBs then a black market will spring up around that.

With proper planning and regulation there should be no need for a government to intervene in the market. Surely no rational person can look at the housing market in Ireland today and think the solution is even more government intervention?


----------



## room305

nacho_libre said:


> I agree with that statement to a certain extent, but at the moment the only way
> people CAN buy a house is if :
> 
> a) They have substantial wealth
> or
> b) They get into debt up the their eyeballs for the next 35-40 years.
> 
> Surely it doesn't have to be that way.



The seller doesn't dictate the price, the buyer does. Once buyers expectations are for lower prices then the sellers will have to lower their prices accordingly. It doesn't need government intervention, just a little cop on from buyers.


----------



## Calina

room305 said:


> With proper planning and regulation there should be no need for a government to intervene in the market. Surely no rational person can look at the housing market in Ireland today and think the solution is even more government intervention?



Planning and regulation is, in of itself, market intervention. Central Bank regulation of lending criteria is also market intervention. Are you saying that it is not?


----------



## delboy159

phoenix_n - fascinating insight.  These type of small, run down, potential money pit properties (even if it is in a city centre location) will be hard to sell... Saying that - I expected to see more examples of commuter apartments nose diving before these houses.  

To put things in perspective though - I see there is a 2 bed ground floor apartment in Portland Lock for sale accross the road from the property you posted.  They are looking for €360,000, for a less then 2 year old apartment at 743 sqft (which is much bigger then the house).

I'm assuming the negatives on the apartment
- ground floor
- no mention of parking space, so I assume none
- the canal is crappy looking especially in the summer.

BUT - I would pay at least 30k more for the apartment than I would for the house (wouldn't pay 360k for the apartment)..... You could debate whether the house is overvalued at 360k, but it definitley puts in perspective how pricey the St. Ignatius property is. Would you agree?


----------



## edo

came across this in todays indo -  

http://www.unison.ie/irish_independent/stories.php3?ca=302&si=1686895&issue_id=14635


im no karl marx myself - quite the opposite actually - but taxation is one of the few levers left to elected democratic government to influence the society it governs on behalf of.

The arrogance of those who have  gained hugely from the recent property boom is really something to behold.


----------



## nacho_libre

room305 said:


> The seller doesn't dictate the price, the buyer does.



Yes, but when something is a necessity and it's in short supply, the buyer doesn't 
have a choice in dictating the price. Hence a "seller's market" when supply exceeds 
demand the tables turn.


----------



## tententwenty

room305 said:


> Did house prices not increase prior to 2000? Are we not wealthier as a nation since the early 90's? However, since 2000/2001 we have turned inward, decreasing exports, increasing imports. Like someone no longer working but continuing to live off their savings.


We're not living off savings, we are living off future earnings. Why is this so hard to understand?



room305 said:


> _You_ mentioned laissez-faire economics not me.


I just described the situation you seem to want.



room305 said:


> The state has a duty to make sure the less well-off aren't exploited but that duty doesn't extend to making sure every couple can afford to buy a 3 bedroom house within commuting distance of Dublin.


Thats a false dichotomy, its not an either-or situation.



room305 said:


> What would you call government price fixing of a commodity? It sounds very like socialism and almost always ends in tears. If the government fixes house prices then builders will have no incentive to build good houses since they'll get paid the same amount anyway. In fact they'll be postively incentivised to build the cheapest dump the regulations will allow them get away with. If the government implements a law to prevent investors outbidding FTBs then a black market will spring up around that.


Black market houses, indeed. They'll be smuggling them in with the chinese in containers via the channel tunnel. Who is talking about fixing prices here? Knock out investors whose only purpose is to drive property prices up, to the detriment of society as a whole, and the idea of a property tax is sounding more and more appealing to me. No property tax for your primary living home, cumulatively increasing property taxes for every house after the first that you own. That sounds about right. Landlords can factor that into the rent if they like, and it will provide a serious incentive not to own too many residential properties.

And don't start crying about what will we do to earn money then. Learn about other investments. Put some of that cash into local businesses, start your own, invest in equities. There are a million other ways to earn money.



room305 said:


> With proper planning and regulation there should be no need for a government to intervene in the market. Surely no rational person can look at the housing market in Ireland today and think the solution is even more government intervention?


Proper planning and regulation ARE government interference. In my opinion, no rational person would be looking at the property market in in Ireland today. They'd be off in the middle of the most affluent sections of New York City, buying property for the same price as in Phibsboro.


----------



## Calina

room305 said:


> The seller doesn't dictate the price, the buyer does. Once buyers expectations are for lower prices then the sellers will have to lower their prices accordingly. It doesn't need government intervention, just a little cop on from buyers.



The seller can dictate a minimum price and your scenario only works in a situation where a sale is mandatory. The seller always has the option to wait out.


----------



## room305

Calina said:


> Planning and regulation is, in of itself, market intervention. Central Bank regulation of lending criteria is also market intervention. Are you saying that it is not?



Apologies, I probably didn't make myself clear. I'm not in favour of an all out scrap. Proper planning is needed to make sure houses are build in appropriate areas and at appropriate densities with required amenities etc. Regulation is needed to ensure building compliance and so forth. These areas are currently lacking.

What am I against is the government directly intervening in the market (e.g. price caps on houses, insisting investors cannot outbid FTBs etc. - all the stuff that is being suggested here). I consider the stock market and commodities markets to be "free markets" but regulation is still required to limit abuse of the system.

Let people play, just give them rules to play by and referees to ensure the rules are obeyed.


----------



## Howitzer

Calina said:


> The seller can dictate a minimum price and your scenario only works in a situation where a sale is mandatory. The seller always has the option to wait out.


 
So does the buyer.


----------



## cjh

Calina said:


> The seller can dictate a minimum price and your scenario only works in a situation where a sale is mandatory. The seller always has the option to wait out.


 

Not all sellers have the option to wait it out - numerous factors can force a seller to sell at a price below what they want to sell for. Increasing interest rates/Death/sickness in the family/Relocation etc.......


----------



## Duplex

phoenix_n said:


> Made an inquiry on the property to test the market. Said i would only be interested in viewing but my ceiling was max 340K. He was open to my offer.



Interesting.  I'm watching inventory rise in the secondary markets.


----------



## room305

nacho_libre said:


> Yes, but when something is a necessity and it's in short supply, the buyer doesn't
> have a choice in dictating the price. Hence a "seller's market" when supply exceeds
> demand the tables turn.



If the buyer's wait then the tables will turn.


----------



## Calina

room305 said:


> What am I against is the government directly intervening in the market (e.g. price caps on houses, insisting investors cannot outbid FTBs etc. - all the stuff that is being suggested here). I consider the stock market and commodities markets to be "free markets" but regulation is still required to limit abuse of the system.
> 
> Let people play, just give them rules to play by and referees to ensure the rules are obeyed.



Personally I am not looking for price caps on houses or not allowing investors to outbid FTBs. But I would recommend reassessing the taxation situation particularly for investment properties bought but never released onto the rental market, for example.


----------



## tententwenty

room305 said:


> (e.g. price caps on houses, insisting investors cannot outbid FTBs etc. - all the stuff that is being suggested here).


You're the only one suggesting these things. Making it hard for investors to outbid FTBs means putting significantly higher taxes on property purchases after the first, so it doesn't make economic sense to buy houses for investment.


----------



## Marie

Calina said:


> Interesting one from the Times in London.
> 
> I enjoyed the "Debt is now so ubiquitous it brings a certain complaicancy".  What differs between the UK and Ireland is that in the UK the complaicancy comes from lack of understanding of the basis of mortgage arrangements and loans.  In Ireland it seems to come from the irrational belief that "the gubbernent will save me" if/when the bank send in the bailiffs to repossess.


----------



## room305

edo said:


> came across this in todays indo -
> 
> http://www.unison.ie/irish_independent/stories.php3?ca=302&si=1686895&issue_id=14635
> 
> 
> im no karl marx myself - quite the opposite actually - but taxation is one of the few levers left to elected democratic government to influence the society it governs on behalf of.
> 
> The arrogance of those who have  gained hugely from the recent property boom is really something to behold.



Land tax is probably the best taxation system ever thought of and by far the fairest. The government should scrap every other tax and accrue all the required revenue through land tax alone.


----------



## River

Afuera said:


> And why do you feel that there may not be another on the market like it for quite awhile? Is that not speculation?


 
by that rational an opinion is speculation. 

I believe in this thread, speculation is confined to an exercise to obtain financial gain. I was not deducing that because another would not be available in the foreseeable future that this would mean the price would rise. 

I simply liked the apartment I found and wanted to buy it & live in it.


----------



## Remix

phoenix_n said:


> Made an inquiry on the property to test the market. Said i would only be interested in viewing but my ceiling was max 340K. He was open to my offer.


 
Anecdotally it would seem that the September buying spree might be dead on arrival. Next big hope for the vestos will be some boost in the December budget - but by that time interest rates could be 50 basis pts (17%) higher than today. 
Timber!!!????


----------



## River

room305 said:


> All of which is fair enough. What I don't understand is why housing should be different to anything else people want to buy. If I go into a wine shop I don't demand that my bottle of wine should be cheaper because I intend on drinking it that evening rather than placing it in a cellar with a view to selling it on at an inflated price in three years. If the bottle is too expensive I look for something else or don't buy.


 
My point regarding the time frame was to deflate idea that ftb's are buying off plans solely to speculate. 



room305 said:


> An anti-speculative tax similar to the one that was already on the books but was never implemented is a good idea (i.e. tax people who buy houses with no intention of letting them). Some kind of socialist juncta where the state supplies all of our housing needs and/or fixes the prices is not.


 
i agree


----------



## HotdogsFolks

room305 said:


> Are we not wealthier as a nation since the early 90's?


 
I'm not sure we are as rich as we think.

When I was a student (95 - 99) I worked part-time in technical support, about 30 hours a week. I lived in an apartment in the city centre with my girlfriend. I always had money left over at the end of the month.

10 years later, I'm in a reasonably senior position but I'm not doing much better than my student days. Everything has pretty much doubled in price since then, my wages have also doubled , but it means I'm staying afloat. If anything, I actually feel poorer now. I worry about affording basic things like clothes and rent.

Funnily enough I probably could have bought a house/apartment on my part-time wages 10 years ago, but have no chance in hell of ever affording a (non-commuter hell) house now.

Things have gone crazy in this country. My only option (which I am happy about) is to emigrate. I just don't see what is so attractive about Ireland as to put myself in terrible debt and at terrible risk for 30 years.

...


----------



## thewatcher

Calina said:


> Personally I am not looking for price caps on houses or not allowing investors to outbid FTBs. But I would recommend reassessing the taxation situation particularly for investment properties bought but never released onto the rental market, for example.


 
Exactly,this would have the added bonus of flushing out all the tax evading landlords,if your not registered with the prtb then revenue should pay you special attention.


----------



## Afuera

River said:


> I believe in this thread, speculation is confined to an exercise to obtain financial gain. I was not deducing that because another would not be available in the foreseeable future that this would mean the price would rise.


 
I'm sorry I disagree. Speculation on missing out (fear) is driving the property market just as much as speculation on ever increasing prices (greed).



River said:


> I simply liked the apartment I found and wanted to buy it & live in it.


 
Good for you! But a lot of people I know are not buying property they really like (or even see themselves living in for the long term).


----------



## room305

tententwenty said:


> Black market houses, indeed. They'll be smuggling them in with the chinese in containers via the channel tunnel. Who is talking about fixing prices here? Knock out investors whose only purpose is to drive property prices up, to the detriment of society as a whole, and the idea of a property tax is sounding more and more appealing to me. No property tax for your primary living home, cumulatively increasing property taxes for every house after the first that you own. That sounds about right. Landlords can factor that into the rent if they like, and it will provide a serious incentive not to own too many residential properties.



You said that the government should prevent investors outbidding FTBs. In such a scenario if two investors wanted a property it would be worth paying a FTB to put in a bid and therefore put a ceiling on the property price.

The only purpose of investors isn't too drive up property prices. They may be hoping for prices to increase in the future or to make a profit from letting the house but unless you think they are operating some sort of cartel, they are taking a risk to do so. As for taxation - replacing stamp duty with a yearly tax would be best. Why tax exit or entry into the market - the solution is to make the market more liquid not less.



tententwenty said:


> And don't start crying about what will we do to earn money then. Learn about other investments. Put some of that cash into local businesses, start your own, invest in equities. There are a million other ways to earn money.



I'm pretty happy with my investment choices. I don't need you to tell me what I should or shouldn't invest in.



tententwenty said:


> Proper planning and regulation ARE government interference. In my opinion, no rational person would be looking at the property market in in Ireland today. They'd be off in the middle of the most affluent sections of New York City, buying property for the same price as in Phibsboro.



Exactly, in your opinion not rational person would get involved in the market today. Let people make their own decision as to what is rational and what is not. Better that than have the civil service decide. Freedom entails a freedom to make mistakes as well.


----------



## gearoidmm

tententwenty said:


> Knock out investors whose only purpose is to drive property prices up, to the detriment of society as a whole, and the idea of a property tax is sounding more and more appealing to me. No property tax for your primary living home, cumulatively increasing property taxes for every house after the first that you own. That sounds about right. Landlords can factor that into the rent if they like, and it will provide a serious incentive not to own too many residential properties.



Where would I live in that situation.  Your suggestion would basically force people like me to buy when I am perfectly content renting.  Particularly in the current market where there is an excess of good rental properties at a much lower price than the equivalent cost of buying.

The government should stay the hell out of this


----------



## cjh

gearoidmm said:


> The government should stay the hell out of this


 

The government *should* stay the hell out of this - by removing tax incentives for investors and levelling the playing field for anyone wanting to buy a house!


----------



## thewatcher

room305 said:


> Notice how the blame game has already started on this thread!


 
IMHO the people on this thread are about 6-9 months ahead of the game, once the panic sets in with the masses there will be murder,joe duffy will get months out of it !.


----------



## room305

HotdogsFolks said:


> I'm not sure we are as rich as we think.


 
Too true. Nominal wealth is meaningless - only real wealth counts. The government has not tried to contain inflation but rather has encouraged it (hyper-inflation in housing for one). It seems great in the initial waves but sucks for years to come after that - when it filters down from the things we own into the things we buy.

Worse still wages won't increase to match inflation so we'll be getting poorer every year. Stagflation here we come.


----------



## phoenix_n

Mate the house will probably be sold in the end for a figure in the high 200K. A house on that street went for 500K (I viewed it) but it was done up smartly. These, yes, are due a severe correction. 

I would personally value the terrace over the apartment. Never underestimate the convenience of been able to just park outside your front door.
 


delboy159 said:


> phoenix_n - fascinating insight. These type of small, run down, potential money pit properties (even if it is in a city centre location) will be hard to sell... Saying that - I expected to see more examples of commuter apartments nose diving before these houses.
> 
> To put things in perspective though - I see there is a 2 bed ground floor apartment in Portland Lock for sale accross the road from the property you posted. They are looking for €360,000, for a less then 2 year old apartment at 743 sqft (which is much bigger then the house).
> 
> I'm assuming the negatives on the apartment
> - ground floor
> - no mention of parking space, so I assume none
> - the canal is crappy looking especially in the summer.
> 
> BUT - I would pay at least 30k more for the apartment than I would for the house (wouldn't pay 360k for the apartment)..... You could debate whether the house is overvalued at 360k, but it definitley puts in perspective how pricey the St. Ignatius property is. Would you agree?


----------



## room305

cjh said:


> The government *should* stay the hell out of this - by removing tax incentives for investors and levelling the playing field for anyone wanting to buy a house!



Exactly. The best thing would be a level playing field for investors, speculators, FTBs, STBs and just about anybody else who wants a house. Then let market forces decide what a house is worth.

This market has been grossly distorted by stamp duty and tax incentives. I don't see more taxes solving the problem only amplifying it.


----------



## whathome

thewatcher said:


> once the panic sets in with the masses there will be murder,joe duffy will get months out of it !.


 
This Joe Duffy will :
http://www.rte.ie/radio1/liveline/

...but this Joe Duffy might not :


The Irish economy, it's a tale of two Joe Duffy's.


----------



## tententwenty

room305 said:


> You said that the government should prevent investors outbidding FTBs. In such a scenario if two investors wanted a property it would be worth paying a FTB to put in a bid and therefore put a ceiling on the property price.


Where exactly did I say that? Its no good putting words in my mouth. I've already said several times what I think should happen, which is higher property taxes for houses after the first, to make it uneconomical to even bid in the first place for speculators. Why am I repeating myself?



room305 said:


> The only purpose of investors isn't too drive up property prices. They may be hoping for prices to increase in the future or to make a profit from letting the house but unless you think they are operating some sort of cartel, they are taking a risk to do so.


With rental yields what they are, there is zero chance of making a profit by letting the house out, so that idea goes out the window.



room305 said:


> As for taxation - replacing stamp duty with a yearly tax would be best. Why tax exit or entry into the market - the solution is to make the market more liquid not less.


Yes, but only on properties after the first, with higher taxes annually for every subsequent property.



room305 said:


> I'm pretty happy with my investment choices. I don't need you to tell me what I should or shouldn't invest in.


Splendid I'm very happy for you. You might consider passing on some of that wisdom to the rest of the country, however.



room305 said:


> Let people make their own decision as to what is rational and what is not.


Making the most important financial decision of their lives in ignorance is not something that should be advised, unless you are trying to pull a fast one.


----------



## tententwenty

room305 said:


> Exactly. The best thing would be a level playing field for investors, speculators, FTBs, STBs and just about anybody else who wants a house. Then let market forces decide what a house is worth.


The playing field of specuvestors vs FTBers isn't level in the first place, its grossly weighted in favour of the specuvestors.



room305 said:


> This market has been grossly distorted by stamp duty and tax incentives. I don't see more taxes solving the problem only amplifying it.


What? Your posts are becoming increasingly schizophrenic... This is even on the same page. My head hurts from speed of the u-turn.



room305 said:


> Land tax is probably the best taxation system ever thought of and by far the fairest. The government should scrap every other tax and accrue all the required revenue through land tax alone.


----------



## implode

Hi I 've been following this thread for months now an decided its probably about time I threw in my tuppence worth. Like a lot of people on this thread I think, I missed the boat well and truly in the nineties if I knew then what I know now etc. etc. 

However I really do think this time the market is teetering on the brink I know the difference from what I'm paying in rent to what I'd pay for a mortgage is unbelievable (1100 for a two bedroom house in dublin 14).

To anybody who says the government should interfere with taxes etc I think they are spectacularly wrong, the market is about to correct itself it has to theres no way it can keep going its well and truly out of kilter with wages, (by the way I earn over fifty thousand a year with bonuses of up to ten grand as well as other nixer work and I can't buy a house)


----------



## delboy159

phoenix_n - I agree on the convenience of the house option - I went with that myself when I purchased...

However this house is in such bad repair - over 200sqft smaller than the apartment and the possible problems from leaks, damp, re-roofing etc. are limitless....  

Bottom line 425k, 395k, even 380k are crazy numbers for that house, what figure represents April/May market value? and what will it sell for?  If it goes for under 300k or even just above 300k I would call that an indication of a crash - would you agree? 

I know one swallow doth not a summer make, but 300k area is a crash indication in my book...


----------



## Firefly

How soon after the property crash will the books come out....surely not soon enough for a Xmas bestseller???

Firefly


----------



## phoenix_n

delboy159 said:


> Bottom line 425k, 395k, even 380k are crazy numbers for that house, what figure represents April/May market value? and what will it sell for? If it goes for under 300k or even just above 300k I would call that an indication of a crash - would you agree?


 
I have called a 'crash' already. Its just the time it takes to sell (lead time) which is why is it not visible now. Expect xmas for it to in public domain. (earlier in business pages)


----------



## gearoidmm

E75.000 to live in Moyross

http://www.daft.ie/searchsale.daft?search=Search+%BB&s[cc_id]=ct5&s[a_id][0]=3711&s[mnb]=&s[mxb]=&s[mnp]=&s[mxp]=&s[pt_id]=&s[search_type]=sale&s[refreshmap]=1&limit=10&id=116896

You must be joking


----------



## room305

tententwenty said:


> The playing field of specuvestors vs FTBers isn't level in the first place, its grossly weighted in favour of the specuvestors.



How so? They don't necessarily have more money and even if they do, is that a reason for the government to intervene? Every market favours the wealthy, it's impossible not too. I don't go beating down the door of my local politician if I get outbid on ebay by someone I suspect has more wealth than me.



tententwenty said:


> What? Your posts are becoming increasingly schizophrenic... This is even on the same page. My head hurts from speed of the u-turn.



Land tax is about the only tax that doesn't interfere with or distort the free market. If you tax labour then you create an incentive not to work, if you tax wealth then you disincentivise the creation of the same, if you tax goods and services you discourage their consumption. However, if you tax the land (not the houses) that people own then little interference results. It is also proportionally fair - if the government builds rail services with public money that increases the worth of your land then you pay a correspondingly increased tax.

I would say that supporting land tax is very much in line with my "laissez-faire" beliefs would you not?


----------



## gabhla

I think it was overpriced to begin with, but think I'll hold off buying in Donegal,for the moment.





Hello,
Please click on the link below to view the latest property on our books. The asking price of this property (Ref 429) has been reduced from €350,000.00 to €310,000.00. This property is complete with fitted kitchen, utility room, wooden floors and fireplace and is ready to walk in to. It boasts unrestricted views over the Atlantic Ocean and Arranmore Island. Beaches are a five minute walk away, Cruit Island Golf Club is a five minute drive.
http://www.campbells.ie/CruitIsland.htm


----------



## Chieftain

phoenix_n said:


> Mate the house will probably be sold in the end for a figure in the high 200K. A house on that street went for 500K (I viewed it) but it was done up smartly. These, yes, are due a severe correction.



Was this the one on the other side of the road with the nice back garden?


----------



## Remix

Cribs: Irish Style

If any Irish in America are reading and considering a return to Ireland....

This is the dream that a million hard-earned dollars can buy you and your family in a South Dublin Suburb...

[broken link removed]=

Why does it cost so much ? Well, the celtic tiger economy is just boomin'.. and you can be part of it 
(covers mouth to suppress laughter).

Hurry now, auction's on soon.


----------



## tententwenty

room305 said:


> How so? They don't necessarily have more money and even if they do, is that a reason for the government to intervene? Every market favours the wealthy, it's impossible not too. I don't go beating down the door of my local politician if I get outbid on ebay by someone I suspect has more wealth than me.


Yes, thats why only the rich get decent healthcare in Ireland, the scoundrels. Oh no wait, they don't. Unlike in America, where they do. You're attitude is that the strong should win regardless. In matters of profit and loss, I agree. Home ownership shouldn't be a vehicle for profit, its a social requirement the very same as healthcare. Treating it as such encourages profiteering. And yet again, I am repeating myself.



room305 said:


> Land tax is about the only tax that doesn't interfere with or distort the free market. If you tax labour then you create an incentive not to work, if you tax wealth then you disincentivise the creation of the same, if you tax goods and services you discourage their consumption. However, if you tax the land (not the houses) that people own then little interference results. It is also proportionally fair - if the government builds rail services with public money that increases the worth of your land then you pay a correspondingly increased tax.
> 
> I would say that supporting land tax is very much in line with my "laissez-faire" beliefs would you not?


I just can't track what this has to do with anything. Are you investing in apartments or something? Because if you are, then land tax will be perfect, along with any other high density housing. This is not what I would call an optimal solution.


----------



## tententwenty

Remix said:


> Cribs: Irish Style
> 
> If any Irish in America are reading and considering a return to Ireland....
> 
> This is the dream that a million hard-earned dollars can buy you and your family in a South Dublin Suburb...
> 
> [broken link removed]=
> 
> Why does it cost so much ? Well, the celtic tiger economy is just boomin'.. and you can be part of it
> (covers mouth to suppress laughter).
> 
> Hurry now, auction's on soon.


Bwaahahah!  You need a leprechaun in there somewhere. I don't know where, just fit it in somehow!


----------



## whathome

tententwenty said:


> Yes, thats why only the rich get decent healthcare in Ireland, the scoundrels. Oh no wait, they don't. Unlike in America, where they do. You're attitude is that the strong should win regardless. In matters of profit and loss, I agree. Home ownership shouldn't be a vehicle for profit, its a social requirement the very same as healthcare. Treating it as such encourages profiteering. And yet again, I am repeating myself.


 
Was listening to internet radio while reading above....the perfect soundtrack was playing....

[broken link removed][broken link removed]

Morrissey repeats himself in that song too


----------



## room305

tententwenty said:


> Where exactly did I say that? Its no good putting words in my mouth. I've already said several times what I think should happen, which is higher property taxes for houses after the first, to make it uneconomical to even bid in the first place for speculators. Why am I repeating myself?



When it was suggested that the government should have stopped investors outbidding FTBs you agreed. You say the tax system should be altered to equalise this supposed imbalance. I think any interference by the government is a bad idea. Certainly any interference by the government so far has been completely counterproductive.



tententwenty said:


> With rental yields what they are, there is zero chance of making a profit by letting the house out, so that idea goes out the window.



Now it is of course. Will it be this way forever? Only if we legislate it to be. Why are you so intent on tanking the rental market and punishing people who don't want to buy a house?



tententwenty said:


> Yes, but only on properties after the first, with higher taxes annually for every subsequent property.



The idea of a yearly property tax is to cover local authority costs. This way areas with higher LA costs could have higher taxes. I don't see why this tax should change dependent on the number of houses you own or why someone who only owns one house should be exempt.



tententwenty said:


> Splendid I'm very happy for you. You might consider passing on some of that wisdom to the rest of the country, however.



Why? If people want to spend their money on beer and skittles or overpriced houses in Ballivor let them. It's their money not mine.



tententwenty said:


> Making the most important financial decision of their lives in ignorance is not something that should be advised, unless you are trying to pull a fast one.



Would you feel the same sympathy for someone who bought shares in a company that went bankrupt? If somebody doesn't know what they are buying they shouldn't be buying. If you are about to make the biggest financial investment of your life, shouldn't you make sure you are not ignorant about it?


----------



## Glenbhoy

tententwenty said:


> You have repeatedly provided information that is both misleading and flat out wrong throughout this discussion to support your own points, asking questions that have already been answered, and have a habit of waiting until after a discussion has died down to come flying in from the wings with your knickers around your ankles, trying to score the odd parting shot. Perhaps someone else would like to field that.
> 
> I really don't see much point in discussing anything with you, either.
> 
> Good luck with those old hands, though.


What information have I provided that is misleading/wrong?
As for the questions already answered, I must apologise if that is so, it's just so hard to keep up with the volume of posts.  So did you answer my request for information re endemic planning corruption that's evident to all?
Re the waiting around until the discussion has finished (getting a little paranoid are we?), well, working for one's self, I can't always devote the time required to read your latest posts on why government intervention is essential to protect the poor FTB's from the big bad speculators and developers.
Finally, what do you mean by "Good luck with those old hands, though", I genuinely don't understand.


----------



## Calina

room305 said:


> The idea of a yearly property tax is to cover local authority costs. This way areas with higher LA costs could have higher taxes. I don't see why this tax should change dependent on the number of houses you own or why someone who only owns one house should be exempt.



I'm pretty sure you suggested that ALL taxation should be replaced by a land tax. Currently, we fund a great deal of other things through taxation beyond local authority expenses. 

I fail to see why a land tax is more equitable than an income based tax. Maybe you might like to explain. Your claims of little interference make no sense whatsoever to me, because the ability to actually pay a land tax is still income dependent. How you plan to assess a landtax liability I imagine must be value dependent, and if there is a land tax, there is no incentive to own land at all which means no incentive to develop it either. I'm not entirely sure that is healthy either.


----------



## room305

tententwenty said:


> Yes, thats why only the rich get decent healthcare in Ireland, the scoundrels. Oh no wait, they don't. Unlike in America, where they do. You're attitude is that the strong should win regardless. In matters of profit and loss, I agree. Home ownership shouldn't be a vehicle for profit, its a social requirement the very same as healthcare. Treating it as such encourages profiteering. And yet again, I am repeating myself.



My attitude is that people should be allowed spend their money on whatever the hell they want, be it housing or lollipops. If they overpay the market will punish them. How this relates to healthcare I'm not sure. Are you against all private healthcare? I'm not against social housing but I don't see why the government should step in if I want to pay more than anyone else for a house, regardless of whether I intend to live in it or let it out.

Without profit you'll find few developers want to actually build houses, so let the market dictate the price not the government.



tententwenty said:


> I just can't track what this has to do with anything. Are you investing in apartments or something? Because if you are, then land tax will be perfect, along with any other high density housing. This is not what I would call an optimal solution.



Somebody else mentioned land tax and I added that I think land tax is a brilliant solution. Perfectly optimal. One of the state's main roles is in protecting a citizen's right to private ownership of land. So tax the land that people own. If it encourages more people to live in apartments and avoid the continuing sprawl of Dublin all the better.


----------



## gearoidmm

tententwenty

Please could you tell me what provision that you will make to ensure that renters like me will still have a place to live when you tax investors out of the market.

Oh, and the immigrants, students, school-leavers, job-movers, lower-incomes etc.


----------



## tententwenty

Calina said:


> Your claims of little interference make no sense whatsoever to me, because the ability to actually pay a land tax is still income dependent.


A whole lot of what hes saying makes little sense to me, what with endless redundancy and schizophrenic points being made one in opposition to the other. At this point I wash my hands of it, himslef and glenbhoy. Life is too short.


----------



## room305

Calina said:


> I'm pretty sure you suggested that ALL taxation should be replaced by a land tax. Currently, we fund a great deal of other things through taxation beyond local authority expenses.



Land tax not property tax. Such radical reform is unlikely so  a good interim step would be too replace stamp duty with a property tax. This could fund local authorities rather than having the government pay them.



Calina said:


> I fail to see why a land tax is more equitable than an income based tax. Maybe you might like to explain. Your claims of little interference make no sense whatsoever to me, because the ability to actually pay a land tax is still income dependent. How you plan to assess a landtax liability I imagine must be value dependent, and if there is a land tax, there is no incentive to own land at all which means no incentive to develop it either. I'm not entirely sure that is healthy either.



If I work super-hard and earn more money than my neighbour but we both enjoy the same state benefits, then why am I paying more money? So the incentive is there for me to work less and still enjoy the same state benefits Now, if the tax is low enough such a situation may be unlikely since it might mean a lower standard of living but the incentive is there nonetheless. The government is effectively encouraging citizens to earn less. Then the government decides to build a Luas line near our houses. Both myself and my neighbour benefit enormously because the price of our land increases, yet our tax bill doesn't increase proportionally. Why? If instead of taxing labour the government taxed land, then myself and my neighbour would pay an equal share for an equal benefit.

Since the tax is based on the value of the land, there is plenty of incentive to develop. If own land worth €1M and pay 10% tax, then I pay the government €100k a year even if the land lies idle. If I build a hotel on the land, the land is still worth €1M and I still pay the government €10k, regardless of what I make from the hotel.


----------



## tententwenty

gearoidmm said:


> tententwenty
> 
> Please could you tell me what provision that you will make to ensure that renters like me will still have a place to live when you tax investors out of the market.
> 
> Oh, and the immigrants, students, school-leavers, job-movers, lower-incomes etc.


Well thats a fair question. First of all there is a distinction between speculators for profit and buy to let landlords. The way to approach it is first of all to deal with the speculators by putting prohibitive taxes on the PURCHASE of second and subsequent properties, graded higher with each property. This prevents this endless tail chasing up the tower of price rises which we have today. Not to make it so prohibitive that its impossible to own a second or even a third house, but enough to take the profits out of flipping, and general speculation.

Secondly, *landlords and buy to letters are already priced out of the market*, so the situation as it stands is lethal for renters. With rental returns being so far below even interest repayments, there is no point in buying to let as of about last year some time. Its just not economical.

Thirdly, stricter controls need to be placed on landlords to prevent rackrenting, as happened the last time the Bacon ideas were introduced. This form of "mass financial protest" by landlords needs to not happen. There should be stronger protections for both tenants and landlords.

When these are implemented, an annual property tax should be put in place for houses which are not the primary dwelling place of the owner. Again, subsequently higher tax rates for each property after the first. That should get the empty homes reduced in a hurry. Again, we are talking about a gradiated tax, so it will be economically possible to have a house, apartment or maybe two for renting, but not many more than that.

Landlords will of course try to have 10 houses, but the rents in the last 8 will be too high to attract renters, and represent an annual loss for them, and so should be put on the market again. Likewise this will deal with speculators, who should be drummed out of the system permanently.

That should sort it out.


----------



## BigM

tententwenty said:


> At this point I wash my hands of it, himslef and glenbhoy. Life is too short.


Maybe the pro/anti-speculators/Commie-vs-Capitalist/Govt intervention-vs-freemarket argument could be continued in a separate thread?
It may reflect people's current sentiment to housing/social/govt policy but not exactly towards the housing market. 
Arguing the merits of various possible govt initiatives is not the same as arguing the affects of said initiatives.


----------



## Calina

room305 said:


> Since the tax is based on the value of the land, there is plenty of incentive to develop. If own land worth €1M and pay 10% tax, then I pay the government €100k a year even if the land lies idle. If I build a hotel on the land, the land is still worth €1M and I still pay the government €10k, regardless of what I make from the hotel.



The value of the land is dependent on the possible income that it can raise. So if you do build the hotel on the land, the value of the land rises accordingly as the income derivable from that parcel of land goes up. I have no doubt you would endeavour to separate the hotel from the land, but that's fallacious as the hotel cannot exist independently of the land that it's built on. If you hire the land to the hotel owner (separate) to build on, the land is still earning money via the landhire agreement and as such, its value will still change accordingly. Your example is ill thought out.


----------



## room305

tententwenty said:


> Well thats a fair question. First of all there is a distinction between speculators for profit and buy to let landlords. The way to approach it is first of all to deal with the speculators by putting prohibitive taxes on the PURCHASE of second and subsequent properties, graded higher with each property. This prevents this endless tail chasing up the tower of price rises which we have today. Not to make it so prohibitive that its impossible to own a second or even a third house, but enough to take the profits out of flipping, and general speculation.



That will kill the rental market stone dead. Who would be a full time landlord if it is only economical to let one house? It won't even impact 'flipping' because the flipper never actually takes possession of the house, only the contract.


----------



## Calina

Back with the subject at hand - I notice lately that the more expensive properties are turning up on MyHome and the less expensive (so called starter) properties are turning up more frequently on DAFT for parts of north County Dublin. Has anyone else noticed this sort of split?


----------



## BigM

implode said:


> the market is about to correct itself it has to theres no way it can keep going its well and truly out of kilter with wages, (by the way I earn over fifty thousand a year with bonuses of up to ten grand as well as other nixer work and I can't buy a house)


 
Exactly - when someone on a good salary plus bonus can only afford a (decent) house if the bank  is willing to lend him 10x his annual salary, in a rising rate environment, there is obviously, fundamentally something wrong with the market. (Oh no, I forgot, our situation is completely different! )


----------



## howstrange

BigM said:


> Maybe the pro/anti-speculators/Commie-vs-Capitalist/Govt intervention-vs-freemarket argument could be continued in a separate thread?
> It may reflect people's current sentiment to housing/social/govt policy but not exactly towards the housing market.
> Arguing the merits of various possible govt initiatives is not the same as arguing the affects of said initiatives.



My sentiments exactly!! There has been a few occasions on this thread where it has got boring with posters running off on different tangents. Lets try and keep it on topic!!


----------



## room305

Calina said:


> The value of the land is dependent on the possible income that it can raise. So if you do build the hotel on the land, the value of the land rises accordingly as the income derivable from that parcel of land goes up. I have no doubt you would endeavour to separate the hotel from the land, but that's fallacious as the hotel cannot exist independently of the land that it's built on. If you hire the land to the hotel owner (separate) to build on, the land is still earning money via the landhire agreement and as such, its value will still change accordingly. Your example is ill thought out.



Your response is ill thought out. Why would the value of land change dependent on the income of a business operating in a building on the land. Does the value of a house rise and fall with the income of the owner? Did AIB's profit last year change the price of its headquarters when they were put up for sale? When a festival is held in a field on a farmer's land does the value of the field increase for the duration of the festival? Are commercial leases negotiated on the basis of how much profit the company makes?


----------



## Duplex

Calina said:


> Back with the subject at hand - I notice lately that the more expensive properties are turning up on MyHome and the less expensive (so called starter) properties are turning up more frequently on DAFT for parts of north County Dublin. Has anyone else noticed this sort of split?


 

Yes. It seems that Daft is the 'low rent' Myhome, hence The Irish Times decision to buy Myhome I guess.


----------



## phoenix_n

howstrange said:


> My sentiments exactly!! There has been a few occasions on this thread where it has got boring with posters running off on different tangents. Lets try and keep it on topic!!


 
Second that. I was really tiring of that to. Best to keep the thread on sentiment and perhaps less 1-1 bickering.


----------



## gearoidmm

tententwenty said:


> Well thats a fair question. First of all there is a distinction between speculators for profit and buy to let landlords. The way to approach it is first of all to deal with the speculators by putting prohibitive taxes on the PURCHASE of second and subsequent properties, graded higher with each property. This prevents this endless tail chasing up the tower of price rises which we have today. Not to make it so prohibitive that its impossible to own a second or even a third house, but enough to take the profits out of flipping, and general speculation.
> 
> Secondly, *landlords and buy to letters are already priced out of the market*, so the situation as it stands is lethal for renters. With rental returns being so far below even interest repayments, there is no point in buying to let as of about last year some time. Its just not economical.



I think you have missed the point to be honest.  The situation at the moment is great for renters.  Rents are lower both in absolute and real terms than they were in 2001.  This is because of a huge increase in available rental properties over the past 4 years.  Anyone who lived in Dublin in 2000-2001 and endured the horrors of queues and interviews for shabby rooms in shabby houses for extortionate amounts will agree that we don't want to go back to that again.

At the moment it makes no sense to invest in BTL properties as the return that you would get is less than the return on money in a savings account. As a result of oversupply, rents are low and we are starting to see rationality returning to the market.  Eventually, the amateur investors will realise that prices are not going much higher and will find something else to put their money into.  At that stage, we renters will still need somewhere to live.  Who would you rather rent from, a landlord who makes his living from renting and is professional and organised or a rank amateur who owns one property as a sideline.

The market needs investors just as much as it needs FTBs.  My biggest fear is that my landlady realises that she could make more money by selling my place than she does from renting it to me - where would I live then.

I'm no fan of flippers and those who sit on properties for capital appreciation but taxing investors out of the market makes no sense


----------



## Calina

room305 said:


> Your response is ill thought out. Why would the value of land change dependent on the income of a business operating in a building on the land. Does the value of a house rise and fall with the income of the owner? Did AIB's profit last year change the price of its headquarters when they were put up for sale? When a festival is held in a field on a farmer's land does the value of the field increase for the duration of the festival? Are commercial leases negotiated on the basis of how much profit the company makes?



You didn't understand, did you? The land value is dependent on the income that can be extracted from that land. The AIB deal - if you like - was not dependent on AIB profits, it was dependent on 1) the amount of money that the buyer of the AIB site could derive via a leasing agreement, plus what he could expect to charge for reuse of the site at the end of the lease (convert it to apartments, for example). Personally I think he seriously overpaid but that's another day's debate.

Commercial leases are negotiated on the basis of how much the company is willing to pay for the use of that land or property, not how much they are likely to make on it. Their profit is of secondary importance to the land owner who is leasing the land to them. The value of the land is dependent on the rent paid on it. If you own the land on which you are operating a business, then the nature of that business will have a bearing on the value of that land. 

You might like to explain how you would value land given that it appears to be linked to nothing more substantial than a wisp of air. It's not based on use, it's not based on income derived, so what is it?


----------



## Calina

Duplex said:


> Yes. It seems that Daft is the 'low rent' Myhome, hence The Irish Times decision to buy Myhome I guess.



I've only noticed the tendency in the last few weeks however, so I wonder if it's an effect of the decision rather than a cause of it.


----------



## whathome

phoenix_n said:


> Second that. I was really tiring of that to. Best to keep the thread on sentiment and perhaps less 1-1 bickering.


 
I'll third that!  I know when I see a particular name or two that we're in for some tedious circular bickering.  It's the lengthy point-for-point non stop rubbish that puts everyone to sleep.

...best keep it to current sentiment for sure


----------



## Calina

gearoidmm said:


> The market needs investors just as much as it needs FTBs. My biggest fear is that my landlady realises that she could make more money by selling my place than she does from renting it to me - where would I live then.
> 
> I'm no fan of flippers and those who sit on properties for capital appreciation but taxing investors out of the market makes no sense



I'm of the opinion that the rental market would be better served by people who were interested in actually running a business rather than making a killing. Tententwenty's idea is interesting, but upside down. If you need serious investors in the market, you need to make it attractive to them to be in there. In truth, the taxation idea that I would favour is major taxation on a first investment property with a sliding scale down as you get to about 5 properties and up. The caveat on this is that the rental side of things would have to be regulated and policed a lot more effectively than it is currently being policed. 

Making it more difficult to abruptly exit the rental market as an investor would have gone a long way towards stemming capital appreciation I think. Your fear is a wellfounded one as it has happened to me twice (from investors realising they couldn't fund two mortgages and subsidise rent that was below their mortgage outgoings). In short, we need a viable rental market (as opposed to the mess that was here late nineties). But we don't need the extremes of requiring massive capital appreciation to make it worth while either. 

It interests me that people can't see that a middle way is possible - we appear to have a load of accommodation units now, so supply/demand should at some point balance out. Why is there an assumption that we have to benefit only owners or only investors? Currently the big winners are speculators and they are the only section of the equation that add no value other than house price inflation. If you are buying to live in or buying to let, that's fine, but buying to flip, or buying to sit on does not benefit the economy in anyway.


----------



## tententwenty

gearoidmm said:


> Anyone who lived in Dublin in 2000-2001 and endured the horrors of queues and interviews for shabby rooms in shabby houses for extortionate amounts will agree that we don't want to go back to that again.


Err I lived in Dublin in that period, renting, and I got a nice place close to town at a reasonable price. Yes, there were a lot of holes in the ground I was shown, but they are still there, still being rented. Hasn't changed much at all really. 



gearoidmm said:


> Who would you rather rent from, a landlord who makes his living from renting and is professional and organised or a rank amateur who owns one property as a sideline.


I know plenty of landlords that make their living from renting, and rent out dirty holes putting the minimum of effort in them. I won't be losing any sleep if they have to take up actual productive employment in order to make a living. I mean get a job, the horror. Besides that, once the mortgage on a couple of properties is paid off, even with land taxes, you could make a decent living on two or three houses.



gearoidmm said:


> The market needs investors just as much as it needs FTBs.  My biggest fear is that my landlady realises that she could make more money by selling my place than she does from renting it to me - where would I live then.


No, you're missing the point here. I'm drawing a distinction between buy to let and investors - theres a significant difference there. And see, even the current situation today has you worried that you will be turfed out. Whoever buys its probably won't be letting it out, since thats economically futile, but letting it sit and grow in capital appreciation.



gearoidmm said:


> I'm no fan of flippers and those who sit on properties for capital appreciation but taxing investors out of the market makes no sense


Not landlords - investors.


----------



## whathome

there we go again


----------



## bearishbull

Firstly can the debate about land taxes etc start a new thread if required ,off topic arguments do nothing for the thread except clog it up. 
Secondly considering rents are lower now than 6 years ago can you imagine the case if immigrants were'nt arriving by the planeload!! rents would be even lower and prices may have already corrected. The EU accesion in 2004 gave the market an extra push, albeit short term. Apartments coming on stream all over Dublin, cant see rents going much higher in real terms, recent investors must be starting to feel the pinch of the rate rises,give them another year and low/zero/negative capital appreciation and they'll be rushing to exit the market.


----------



## Calina

POI - investors very often equal landlords. Landlords rarely equal speculators. What you describe as an investor is what gearoidmm considers to be a landlord. What you consider an investor is a speculator.


----------



## Duplex

Calina the IT's decision to buy Myhome at the top of the market makes no economic sense to me?.  But it meet with board approval. 

By way of light relief

The Auction scene form The Coconauts (1929) a Marx Brothers film dealing partly with the Florida land bust. (Grouch lost a packet when the bubble bust in 1926)   

Famous quote _*'You can even get stucco, boy can you get stucco'* _

http://www.youtube.com/watch?v=dJNGo3kVLts


----------



## Calina

bearishbull said:


> Firstly can the debate about land taxes etc start a new thread if required ,off topic arguments do nothing for the thread except clog it up.
> Secondly considering rents are lower now than 6 years ago can you imagine the case if immigrants were'nt arriving by the planeload!! rents would be even lower and prices may have already corrected. The EU accesion in 2004 gave the market an extra push, albeit short term. Apartments coming on stream all over Dublin, cant see rents going much higher in real terms, recent investors must be starting to feel the pinch of the rate rises,give them another year and low/zero/negative capital appreciation and they'll be rushing to exit the market.



agreed on the landtax first off. 

secondly, another contributor to shoring up rents, certainly in parts of Dublin are the HSE rent payments. In parts of Dublin, that exceeds market rent for a lot of properties. 

That being said, I would expect that the rental market will take a brief hammering as people try to cash in on their investment properties, particularly if they are subsidising rents.


----------



## gearoidmm

Duplex said:


> Calina the IT's decision to buy Myhome at the top of the market makes no economic sense to me?. But it meet with board approval.



If you look at it a different way, it makes perfect sense.  Myhome.ie revenue does not depend on house sales but on number of ads and how long they remain online.  The very best time to buy it is when the market is turning, loads of properties are going online and staying online (or being renewed due to lack of interest)


----------



## bearishbull

Use tax incentives to encourage long term ownership/renting, tax heavily those buying and selling investment property within only a few years. We need landlords and incentives work as seen by student accomodation etc. Anyway all the incentive of the past resulted in the massive supply being built every year so they may be counterproductive in years to come. No more property taxes / capitalist-socialist etc PLEASE!!


----------



## Calina

Duplex said:


> Calina the IT's decision to buy Myhome at the top of the market makes no economic sense to me?. But it meet with board approval.



On the face of it, it makes very little sense to me, with an increasing number of estate agents also using DAFT. It's entirely possible that they have a nice little business plan stashed away for it but given their subscription model for internet access to IT content online, I'd be surprised if it was very innovative. The only thing I can think of is they are expecting that people will always - to some extent - be buying and selling houses, even if the speculatory mania dies down. 

I question - based on available information and considerations - whether it was really worth what they paid for it, particularly given that I thought the IT wasn't the steadiest financially. Must have been wrong there. But basically, I think they overpaid for it. Buying it is fine and dandy, for the reasons that gearoidmm has mentioned. Still doubt it was worth what they paid for it, even if you could claim it was the top of the market. Was anyone else interested in it at the time? Can't remember.


----------



## tententwenty

bearishbull said:


> Use tax incentives to encourage long term ownership/renting, tax heavily those buying and selling investment property within only a few years. We need landlords and incentives work as seen by student accomodation etc. Anyway all the incentive of the past resulted in the massive supply being built every year so they may be counterproductive in years to come. No more property taxes / capitalist-socialist etc PLEASE!!


Yup sounds good to me. Nothing wrong with a good healthy debate earlier on but now its getting a bit silly. Can we also get a seperate thread for posters crying about other posters discussions, and not adding anything to the site themselves?


----------



## bearishbull

Mark Coleman of Irish Times on Newtalk saying media and government and banks should get together and try and engineer a soft landing for irish property market,he said things are getting unsustainable and things could get bad especially if a predicted world slowdown/recession occurs (IMF are predicting a significant chance of serious global slowdown in next few years)


----------



## room305

bearishbull said:


> Mark Coleman of Irish Times on Newtalk saying media and government and banks should get together and try and engineer a soft landing for irish property market,he said things are getting unsustainable and things could get bad especially if a predicted world slowdown/recession occurs (IMF are predicting a significant chance of serious global slowdown in next few years)



I think there was a few posts a while back wondering whether the soft landing was really a good idea. Did Mark Coleman suggest how it could be done?

They'd need to get the builders involved too. So much supply on the market that no new inventory should be coming on stream.


----------



## Calina

bearishbull said:


> Mark Coleman of Irish Times on Newtalk saying media and government and banks should get together and try and engineer a soft landing for irish property market,he said things are getting unsustainable and things could get bad especially if a predicted world slowdown/recession occurs (IMF are predicting a significant chance of serious global slowdown in next few years)



Interesting. The problem is I don't think it has been sustainable for at least two years and may closer to four so this smacks of shutting stables with horses long bolted. Also the only way to ensure a soft landing is to carefully balance the number of properties on sale versus the number of buyers. I don't think anyone is capable of doing it. I suppose the fact that it's an IT journalist saying it is a change from it just being the Indo, but anyway.


----------



## bearishbull

room305 said:


> I think there was a few posts a while back wondering whether the soft landing was really a good idea. Did Mark Coleman suggest how it could be done?
> 
> They'd need to get the builders involved too. So much supply on the market that no new inventory should be coming on stream.


He did'nt suggest how, just that it may be neccessary for them to get together as he seemed worried about the market and irish economy. I think he was saying media and banks have been hyping and the fear of prices rising more and pricing out FTB's became a self fufilling prophecy.


----------



## tententwenty

Calina said:


> Also the only way to ensure a soft landing is to carefully balance the number of properties on sale versus the number of buyers. I don't think anyone is capable of doing it.


Well by a soft landing, they mean keep prices approximately where they are today. Which means banks have to keep lending out the same amounts that they are doing today. With rising interest rates, I don't think they can do that, without serious risk anyway. And where else will people get the money to pay for housing?


----------



## room305

Two things happen when the market turns:

- Those holding multiple properties dump them on the market causing prices to tank
- Those wishing to buy effectively short sell, holding off for longer in anticipation of further price falls

For a soft-landing then you would have to discourage investors from dumping properties and reassure buyers that prices won't fall.

Whether it's a good thing to do or not is another debate but I guess the bank could effectively sell put options as part of the mortgage. So when the buyer sells their PPR, if the house sold for x less in nominal terms than the buy price, the buyers would be duly compensated. These put options would only be available to people who were planning on living in a property.

The government could also increase cgt for anyone selling a non-PPR that hadn't been let to a tenant for at least three years.


----------



## bearishbull

tententwenty said:


> Well by a soft landing, they mean keep prices approximately where they are today. Which means banks have to keep lending out the same amounts that they are doing today. With rising interest rates, I don't think they can do that, without serious risk anyway. And where else will people get the money to pay for housing?


Fitch forecasted the growth in lending will slow from circa 30% to 15% in 2008, if amount borrowed slows then prices wont be able to rise much if any.


----------



## tententwenty

bearishbull said:


> Fitch forecasted the growth in lending will slow from circa 30% to 15% in 2008, if amount borrowed slows then prices wont be able to rise much if any.


But will they fall, is the question? A small reduction in prices over time would qualify as a soft landing.


----------



## Jeanne

whathome said:


> I'll third that! I know when I see a particular name or two that we're in for some tedious circular bickering. It's the lengthy point-for-point non stop rubbish that puts everyone to sleep.
> 
> ...best keep it to current sentiment for sure


 
Agree. I'm skipping certain posts because they are too long and off topic.

House in Dundrum/Churchtown on the markt for over 2 weeks with only one viewing (no offer). No viewings lined up for tomorrow (I heard Thursday was supposed to be a popular day for viewings?) and as yet nothing for the w/end. So little interest in a popular area - definitely points to a change in public sentiment toward the housing market (back on topic  )

12 months ago I believe there would have been lots of interest by this stage.


----------



## Afuera

room305 said:


> For a soft-landing then you would have to discourage investors from dumping properties and reassure buyers that prices won't fall.
> 
> Whether it's a good thing to do or not is another debate but I guess the bank could effectively sell put options as part of the mortgage. So when the buyer sells their PPR, if the house sold for x less in nominal terms than the buy price, the buyers would be duly compensated. These put options would only be available to people who were planning on living in a property.
> 
> The government could also increase cgt for anyone selling a non-PPR that hadn't been let to a tenant for at least three years.




I can't imagine the government, banks, builders, media etc. all getting their heads together to engineer something like this. This would be like shooting themselves in the foot and quite likely cause a recession (for which they would be held accountable).

The main result of the suggestions you made above would be to prevent new investors joining the market. They have been a sizable percentage of the market until now so this wouldn't be able to happen without a sizeable knock on demand. Lower demand would of course mean less building required (also less employment), less mortgage lending, less tax receipts, etc.

It's probably too late in the day for something like this to be successful. It's a lot easier for everyone to continue banking profits as normal and then point the finger at each other when it goes pear-shaped. The current crash in the US housing market will most likely be blamed as causing a domino effect around the world with very little analysis going into the local policies at fault.


----------



## Lumpsum

Calina said:


> "It's entirely possible that they have a nice little business plan stashed away for it but given their subscription model for internet access to IT content online, I'd be surprised if it was very innovative."
> 
> 
> Well the IT started its own property portal, nicemove.ie, at the same time as Myhome set up. Bet they had a business plan for that too, and that it didn't involve recognising failure a few years later and buying their rival for a fortune.


----------



## tententwenty

And stateside, we have foreclosures on mortgages jumping 53% in August...


----------



## Maine

Originally Posted by *bearishbull* http://www.askaboutmoney.com/showthread.php?p=277176#post277176 
_Fitch forecasted the growth in lending will slow from circa 30% to 15% in 2008, if amount borrowed slows then prices wont be able to rise much if any._

_The problem with this is at end of 2007 private sector debt will be heading to 400,000 million and by end of 2008 this up to 460,000 million. Interest to service it will at 5% approx 23,000 million_

_That compares to 2003 of 150,000,million at 3.25% or say 5,000 milion. _

_Thats an increase in interest of 18,000 million a year or 360 million a week._

_What will we have innovated in the 5 years to justify that - anyone know of lots of googles being incubated in ireland_


----------



## blindjustice

out of interest has anyones sentiment been changed or largely influenced by reading this thread? in either direction?


----------



## treora

Here is an unnecessarily long post:

Here's a set of ideas I cobbled together from better people's quotes on other boards.  I even suggested it four years ago on a board that is no longer.  Too late now, but here is the gist of it.

Why regulate a desirably open market. Well, because people like stablity and safety especially when there are children around.  Once upon a time driver licences were not regulated, and now look at us drive. I wonder what it could be like if there was no regulation?  Economics like atomic physics works on the principles that chaotic atoms in a relatively vacent space rarely initially clash.  Over time they clash more; add more atoms and they are bound to clash until  gradually they follow universal principle of physics - binding and attraction etc. - to find a mutually acceptable temporary conclusion.  Buying property will eventually lead to the same conclusion with a market solution.  However unlike other creatures we can self examine in an abstract sense and act communially to a mutually profitable outcome.  That's called regulation to you and me.  Too much is horrendous and once indroduced it has to be continually monitored and adjusted, but it is possible.

The objective is to create efficient use of land with regards to residential use.  Following the concept (below) developers would move to high value family apartments in 15+ story buildings in the city centre, possibly dual purpose office space. Those high wealth individuals would push for a high quality infrastucture in a high density - high quality residental area, that means a good metro system to you and me.  Why high value - well the rich won't let their high rise turn to ruins. The biggish houses on the communter belt  that are not listed can be grouped and redeveloped into mixed density suburban housing hopefully with better infrastructure.  Growth can be sustained and property can be sold on more level playing field.  

Idea
Primary residence is tax free to a limit, twice that limit if it is used as a home business (inc. farm), both annually provable.  Garden space is non taxable to the same space as the house allowance and three times the house allowance if it is a working yard(annually provable).  2 parents with 3 children can have a working house of 600SqM (Rural surgery/B&B) and a working yard of 900SqM(creche play area etc).  There after each square metre is annually charged at a base rate by an annually adjusted local services multiplier.  Underground utilities (parking, storage, laundry rooms) are not taxed, but surface parking eats up garden allowance.  Commerical/farming property is treated under current statute or adjusted as appropriately.  This does not apply to mobile homes.
Sq. metres        Number of people living at that address
70------------1
125----------2
+35...-------+1...

Accommodation registered with the tenancy board can have the same allowances.  This provides rentable accommodation and removes speculators/holiday home owners and empty (inefficient) houses from the market.  An extra exit tax should be placed on the sale of rented accommodation.  This means that rental investors would really want to make a profit and provide a quality service.  However if a house has been converted from a rented house to a primary residence for two years (allowing rented rooms) then no exit tax would be charged.  

Unfortunately this requires a national compulsory biometric identiy card - social welfare, driving licence, revenue work status, electorial/census register, primary residence, nationality, age, gender.  Why?  Well random audits would have to be carried out.  Fortunately it would be the speculators or the suspected social housing manipulators that would have most of the audits.  Also a big help would be to push the lending stress test criteria from a 2% to 3.5% phased over the next 28 months.

Incidentally mortgage is from the French 'death gauge' or gauge of how long you have left to live.

Commence the hold poking.


----------



## fatmanknows

treora said:


> Here is an unnecessarily long post........................
> 
> .


 

Ya got Me !


----------



## edo

here's your 15 minutes of fame folks!



http://www.unison.ie/irish_independent/stories.php3?ca=184&si=1687282&issue_id=14637


*[FONT=Verdana, Arial]"the popular personal finance website Askaboutmoney.com has 190 pages of 200,000 posts under the title 'Current public sentiment towards the housing market'. Much of it is negative about property prices."[/FONT]*


----------



## whathome

From today's Independent...

*Desmond warning on property bubble*
http://www.unison.ie/irish_independent/stories.php3?ca=35&si=1687460&issue_id=14637

"DERMOT Desmond, who is one of Ireland's top financiers, has warned of a bubble in the Irish property market. "


*IS THE PARTY FINALLY OVER?*
http://www.unison.ie/irish_independent/stories.php3?ca=184&si=1687282&issue_id=14637

"IS the great Irish property party finally coming to an end? The question has been prompted by a number of recent indicators that appear to suggest early signs of a slowdown in the property market. "


----------



## random2006

edo said:


> here's your 15 minutes of fame folks!
> http://www.unison.ie/irish_independent/stories.php3?ca=184&si=1687282&issue_id=14637
> *[FONT=Verdana, Arial]"the popular personal finance website Askaboutmoney.com has 190 pages of 200,000 posts under the title 'Current public sentiment towards the housing market'. Much of it is negative about property prices."[/FONT]*



200,000 posts, sheesh thats a lot more than Ive read! Nice of them to actually quote the website though!
R


----------



## tententwenty

random2006 said:


> 200,000 posts, sheesh thats a lot more than Ive read! Nice of them to actually quote the website though!
> R


Must have been all that tedious circular bickering!  Awww just kidding whathome, we love you really. Lets keep it on topic now!


----------



## redo

Old price 550K


New price 530K


Looks like the abolition of the groceries order is finally taking effect


----------



## phoenix_n

Guys with this thread now advertised on the Indo thats the end of this thread as its gonna blow out and attract flamers etc .
So all the best. Enjoyed watching in real time the crashing of the market.


----------



## CelloPoint

treora said:


> Here is an unnecessarily long post:
> 
> Here's a set of ideas I cobbled together from better people's quotes on other boards.  I even suggested it four years ago on a board that is no longer.  Too late now, but here is the gist of it.
> 
> Why regulate a desirably open market. Well, because people like stablity and safety especially when there are children around.  Once upon a time driver licences were not regulated, and now look at us drive. I wonder what it could be like if there was no regulation?  Economics like atomic physics works on the principles that chaotic atoms in a relatively vacent space rarely initially clash.  Over time they clash more; add more atoms and they are bound to clash until  gradually they follow universal principle of physics - binding and attraction etc. - to find a mutually acceptable temporary conclusion.  Buying property will eventually lead to the same conclusion with a market solution.  However unlike other creatures we can self examine in an abstract sense and act communially to a mutually profitable outcome.  That's called regulation to you and me.  Too much is horrendous and once indroduced it has to be continually monitored and adjusted, but it is possible.
> 
> The objective is to create efficient use of land with regards to residential use.  Following the concept (below) developers would move to high value family apartments in 15+ story buildings in the city centre, possibly dual purpose office space. Those high wealth individuals would push for a high quality infrastucture in a high density - high quality residental area, that means a good metro system to you and me.  Why high value - well the rich won't let their high rise turn to ruins. The biggish houses on the communter belt  that are not listed can be grouped and redeveloped into mixed density suburban housing hopefully with better infrastructure.  Growth can be sustained and property can be sold on more level playing field.
> 
> Idea
> Primary residence is tax free to a limit, twice that limit if it is used as a home business (inc. farm), both annually provable.  Garden space is non taxable to the same space as the house allowance and three times the house allowance if it is a working yard(annually provable).  2 parents with 3 children can have a working house of 600SqM (Rural surgery/B&B) and a working yard of 900SqM(creche play area etc).  There after each square metre is annually charged at a base rate by an annually adjusted local services multiplier.  Underground utilities (parking, storage, laundry rooms) are not taxed, but surface parking eats up garden allowance.  Commerical/farming property is treated under current statute or adjusted as appropriately.  This does not apply to mobile homes.
> Sq. metres        Number of people living at that address
> 70------------1
> 125----------2
> +35...-------+1...
> 
> Accommodation registered with the tenancy board can have the same allowances.  This provides rentable accommodation and removes speculators/holiday home owners and empty (inefficient) houses from the market.  An extra exit tax should be placed on the sale of rented accommodation.  This means that rental investors would really want to make a profit and provide a quality service.  However if a house has been converted from a rented house to a primary residence for two years (allowing rented rooms) then no exit tax would be charged.
> 
> Unfortunately this requires a national compulsory biometric identiy card - social welfare, driving licence, revenue work status, electorial/census register, primary residence, nationality, age, gender.  Why?  Well random audits would have to be carried out.  Fortunately it would be the speculators or the suspected social housing manipulators that would have most of the audits.  Also a big help would be to push the lending stress test criteria from a 2% to 3.5% phased over the next 28 months.
> 
> Incidentally mortgage is from the French 'death gauge' or gauge of how long you have left to live.
> 
> Commence the hold poking.



Mmm. Sounds like your plan involves employing lots of civil servants and lots of money. Don't expect me to stick around to pay for the mess someone else has created.

I despise the idea of biometric ids, property tax and civil servants with clip-boards poking around in your personal day-to-day business. And why do farmers get special treatment?


----------



## random2006

phoenix_n said:


> Guys with this thread now advertised on the Indo thats the end of this thread as its gonna blow out and attract flamers etc .
> So all the best. Enjoyed watching in real time the crashing of the market.



I really hope this doesnt happen. Ive been reading this thread from the start, and was quite bearish but didnt think that prices would start falling seriously until one of the big players agreed with the bears here! While there has been a little bit of straying off topic it has generally been (IMHO) a good debate and a thread, and being a novice investor, that I have learned a lot from, not just regarding housing but investing in general. 

Now that somebody has called it, (or suggested that it might slowdown) what do you reckon the odds are on this site being dragged into the blame game: well if AAM hadnt started spreading rumours of sellers dropping prices and highlighting the number of empty houses, everything would have been grand!!
R


----------



## Calina

madisona said:


> only out by about 196,130 but then the Indo is prone to the occasional slight exagaration.



am guessing they mixed up the number of views with the number of posts, but that, I guess is just by the way.


----------



## Afuera

whathome said:


> From today's Independent...
> 
> *IS THE PARTY FINALLY OVER?*
> http://www.unison.ie/irish_independent/stories.php3?ca=184&si=1687282&issue_id=14637
> 
> "IS the great Irish property party finally coming to an end? The question has been prompted by a number of recent indicators that appear to suggest early signs of a slowdown in the property market. "



Wow. If I was a recent investor I would not like the sound of this at all... without capital appreciation and with such low yields how can they hope to get any return?

[FONT=Verdana, Arial] "Developers are not increasing prices. They are responding to interest rates. Developers want a flow of business; they don't want a slowdown." - [/FONT][FONT=Verdana, Arial]Hooke & MacDonald managing director Ken MacDonald[/FONT]


----------



## Duplex

Great Scott even the Irish Times are at it. 'Around the Block' the usually simpering, and self satisfied weekly take on the market,  seems to have gone around the bend.  What next? 




*



Around the Block: It's time for vendors to get realistic - that's the message coming loud and clear from estate agents who are walking a fine line between wanting to attract new business and not get their clients' hopes up with unrealistic price expectations.

Viewings were fairly quiet over last weekend, with houses that might have attracted 60 to 100 viewers earlier in the year getting just 20 or 30 people through the door, with plenty of nosey neighbours included.
The first wave of auctions next week should give a good indication as to how the season will pan out, but meanwhile agents are telling customers that, with such a vast number of houses on the market, the selling process may take longer than usual - particularly in areas with a cluster of auction signs up.

The huge number of properties that have suddenly appeared on the market may well be soaked up before Christmas, but the reality is that many vendors who have been holding out for years, as they watched prices rise, may have left it too late to get that magic amount that will give them a trade-down home, a pension, and a leg up for the kids.
		
Click to expand...

 
*[broken link removed]


----------



## soma

redo said:


> Old price 550K
> 
> 
> New price 530K
> 
> 
> Looks like the abolition of the groceries order is finally taking effect


----------



## Firefly

Was it not Dermot Desmond who paid 45m for a place on Shrewsbury Rd last year? 

He must have something up his sleeve....no better man than the Kaiser to make a killing on a market change...

Firefly.


----------



## bearishbull

This thread is gonna be flooded if it's mentioned in mainstream media. Nice knowing ya folks!


----------



## bearishbull

Firefly said:


> Was it not Dermot Desmond who paid 45m for a place on Shrewsbury Rd last year?
> 
> He must have something up his sleeve....no better man than the Kaiser to make a killing on a market change...
> 
> Firefly.


Trophy homes may hold value, im sure he just wanted house and has made enough along the way not to be worried about it halving in value.


----------



## SHARP

Can anyone convince me that a "major downturn" is NOT going to happen next year? I have been trying to convince family and friends to be prudent and get their finances in order to ensure they are not caught out - but sure enough they are not listening and that apartment in sunny beach in Bulgaria is just too tempting. 

I seem to be on my own and am been ignored now by friends because I am too negative.

Someone convince me that Im being too negative and should spend,spend,spend like everyone else seems to be doing.


----------



## Duplex

SHARP said:


> Can anyone convince me that a "major downturn" is NOT going to happen next year? I have been trying to convince family and friends to be prudent and get their finances in order to ensure they are not caught out - but sure enough they are not listening and that apartment in sunny beach in Bulgaria is just too tempting.
> 
> I seem to be on my own and am been ignored now by friends because I am too negative.
> 
> Someone convince me that Im being too negative and should spend,spend,spend like everyone else seems to be doing.


 
Never attempt to stop a stampede, observe yes; but stand in front of it flailing your arms, no.


----------



## mortimer33

Calina said:


> am guessing they mixed up the number of views with the number of posts, but that, I guess is just by the way.


 
I think you're right..Big difference between 200,000 posts and 200,000 views though.  
Btw 2 points:  
1.Thats the second time the Indo have referenced this thread to write a news story (The other time being when they mentioned the 'source' who knew an estate agent..)  
2.The Indo is also the most commonly quoted newspaper here.. Almost on a daily basis..

OWN UP: How many on here work for the Indo!!?


----------



## Howitzer

Firefly said:


> Was it not Dermot Desmond who paid 45m for a place on Shrewsbury Rd last year?
> 
> He must have something up his sleeve....no better man than the Kaiser to make a killing on a market change...
> 
> Firefly.


 
He's already made his killing, sure didn't he sell his stake in Greencore (now simply a property shell company, that also makes sambos) last month to that generous property investor fellow Liam Carroll.


----------



## cormacol

I think that the mad increases we saw at the start of the year were the last rush before the bubble popped. Given prices around Dublin i wouldn't be surprised to see a major drop in prices. But what are peoples views on other areas of the country


----------



## Duplex

mortimer33 said:


> I think you're right..Big difference between 200,000 posts and 200,000 views though.
> Btw 2 points:
> 1.Thats the second time the Indo have referenced this thread to write a news story (The other time being when they mentioned the 'source' who knew an estate agent..)
> 2.The Indo is also the most commonly quoted newspaper here.. Almost on a daily basis..
> 
> OWN UP: How many on here work for the Indo!!?


 
Dam you; I am unmasked. You can call me Tony.


----------



## Calina

Duplex said:


> Dam you; I am unmasked. You can call me Tony.



is that why you were so interested in the IT's rationale for buying MyHome.ie, then?


----------



## Calina

SHARP said:


> Can anyone convince me that a "major downturn" is NOT going to happen next year? I have been trying to convince family and friends to be prudent and get their finances in order to ensure they are not caught out - but sure enough they are not listening and that apartment in sunny beach in Bulgaria is just too tempting.
> 
> I seem to be on my own and am been ignored now by friends because I am too negative.
> 
> Someone convince me that Im being too negative and should spend,spend,spend like everyone else seems to be doing.



Uhem, this is probably not the best place to ask for that seeing as most of us have been expecting a downturn/correction/crash for the past six to eight months.


----------



## Arthur Daley

I think that it shows how clever this thread is and how clued in some of you guys are on here that this story appears in the Independent today as well as the Dermor Desmond viewpoint which was mentionned on this thread a few weeks back..........

Nice one my son


----------



## howstrange

SHARP said:


> Can anyone convince me that a "major downturn" is NOT going to happen next year? I have been trying to convince family and friends to be prudent and get their finances in order to ensure they are not caught out - but sure enough they are not listening and that apartment in sunny beach in Bulgaria is just too tempting.
> 
> I seem to be on my own and am been ignored now by friends because I am too negative.
> 
> Someone convince me that Im being too negative and should spend,spend,spend like everyone else seems to be doing.



I know thats the problem with going against the grain!! I feel the exact same as that. But people dont want to hear the fundamental reasons why you should not buy now. They just think you are mad. 

What do mean house prices are going to go down? Rent is dead money!! But you cant lose with property!! But I dont want to miss the out before its too late. But johnny down the road made a fortune with his house!! blah blah!! 

The media, banks and EA's have everybody brainwashed in this country. Thats why it might take a bit longer for a crash to kick in. It is going to be so hard for most people to drop their asking price. They just wont understand the fact that the reason nobody is buying their house is because it is too expensive. They will struggle on for months giving out that nobody is coming to view it before they will drop the price. Sure property doesnt go down in value!!! Thats insane!!!!


----------



## Duplex

Calina said:


> is that why you were so interested in the IT's rationale for buying MyHome.ie, then?


 
No. I'm fascinated by the juxtaposition between the IT's coverage of a manic speculative market driven by ignorance and blind greed. And their self-appointed role as Ireland's quality newspaper, which would suggest a degree of aloof high mindedness. I loathe hypocrisy.


----------



## Zarathustra

As the sentiment looks like it's now pegged firmly in the slowdown/crash side, I propose a new question: How far do you think things will fall?

There are three elements to that: 

1) Assuming an over-reaction, what do you think a likely percentage fall is?
2) What sort of fall would return prices to sound fundamentals?
3) What time frame are we looking at for hitting the bottom, and then to the return to "correct" prices.

I bought in 2001. Since then, my property has gone up almost 100%. As far as I can see, none of that was merited, but the price I paid in 2001 seems like a reasonable price -- comparing it to what it would likely rent for.

I can see falls of 50% (bringing it back to what I consider a fair price) happening in the next 2-3 years. I doubt it'll fall quicker than that, but I could be wrong.


----------



## whathome

Here's another significant drop, this is the second time the asking price has been dropped on this one in Sutton:

Original Price: €835,000


New Price: €750,000
[broken link removed]=

It was at €795,000 for a few months in between.


----------



## hmmm

Zarathustra said:


> I can see falls of 50% (bringing it back to what I consider a fair price) happening in the next 2-3 years. I doubt it'll fall quicker than that, but I could be wrong.


People seem to be dismissing the idea of 50% falls, but I agree with you that it's more than possible. If you accept the notion that rents versus purchase price is the housing equivalent of a P/E ratio, to return us to our long term average "housing P/E ratio" in Dublin would require a fall of at least 50%.


----------



## room305

Zarathustra said:


> As the sentiment looks like it's now pegged firmly in the slowdown/crash side, I propose a new question: How far do you think things will fall?



How long is a piece of string? I'm assuming a correction of between 10%-30% of the next three to four years in nominal terms. That will be a 50% correction or more in real terms. Once things bottom out it is unlikely we'll see double digit growth in houses again for quite some time.


----------



## tententwenty

Zarathustra said:


> I can see falls of 50% (bringing it back to what I consider a fair price) happening in the next 2-3 years. I doubt it'll fall quicker than that, but I could be wrong.


I agree, 50% seems about right, although not in all areas. Some of the more "optimistically" priced properties could fall even further, while for good locations you might be looking at 20-30% dropoffs. This time next year the dust should be clearing, I reckon.


----------



## Duplex

Zarathustra said:


> As the sentiment looks like it's now pegged firmly in the slowdown/crash side, I propose a new question: How far do you think things will fall?
> 
> There are three elements to that:
> 
> 1) Assuming an over-reaction, what do you think a likely percentage fall is?
> 2) What sort of fall would return prices to sound fundamentals?
> 3) What time frame are we looking at for hitting the bottom, and then to the return to "correct" prices.
> 
> I bought in 2001. Since then, my property has gone up almost 100%. As far as I can see, none of that was merited, but the price I paid in 2001 seems like a reasonable price -- comparing it to what it would likely rent for.
> 
> I can see falls of 50% (bringing it back to what I consider a fair price) happening in the next 2-3 years. I doubt it'll fall quicker than that, but I could be wrong.


 
Net Yields on investment property in the 2-3% range at present.  I estimate that they will rise to 7-8% over the next couple of years. (still low by historic standards)  Oversupply, a sharp global slowdown and rising unemployment will play a part, a credit squeeze and  emigration by guest workers and natives will add to the the markets woes.  So a drop of approx 50% over several years.


----------



## phoenix_n

Since i think i called the crash here first i am going to reiterate again my figure of a fall.

40% by xmas. Main Dublin market with the obvious exceptions. (i.e. leafy surburbs)


----------



## conor_mc

phoenix_n said:


> Since i think i called the crash here first i am going to reiterate again my figure of a fall.
> 
> 40% by xmas. Main Dublin market with the obvious exceptions. (i.e. leafy surburbs)


 
Can see 40% eventually, but not by Christmas.

I know you've justified this before by saying that the 40% drop would take a few more months beyond Christmas to materialise, but I think the rest of us consider a 40% drop to have occurred when houses are actually sold for 40% less than their neighbours and not just when buyers would like/expect to buy them for 40% less but the sellers just haven't revised their expectations yet.


----------



## Superman

Personally I think even rents relative to salaries in comparison with other European countries are high.  Coupled with the fact that a slowdown would result in unemployment, and less immigration and possibly even emigration I can foresee rents falling in real terms in the future.  
So while I think that property prices should be 50% of what they currently are to be in line with current rents, I could foresee a fall in property prices above this - maybe 60-65% though obviously this would play out over 12-15 years.
At the same time, considering Irish people's love of property it might only fall to 50%.


----------



## SHARP

howstrange said:


> I know thats the problem with going against the grain!! I feel the exact same as that. But people dont want to hear the fundamental reasons why you should not buy now. They just think you are mad.
> 
> What do mean house prices are going to go down? Rent is dead money!! But you cant lose with property!! But I dont want to miss the out before its too late. But johnny down the road made a fortune with his house!! blah blah!!
> 
> The media, banks and EA's have everybody brainwashed in this country. Thats why it might take a bit longer for a crash to kick in. It is going to be so hard for most people to drop their asking price. They just wont understand the fact that the reason nobody is buying their house is because it is too expensive. They will struggle on for months giving out that nobody is coming to view it before they will drop the price. Sure property doesnt go down in value!!! Thats insane!!!!


 
I seem to merge 2 topics to one to be honest and maybe that why Im seen as negative. I firmly believe that the property market built this country to the insane levels of debt its finds itself in, but I also this the property market will bring the people in this country to their knees and into a dark place for a term of at least 5+ years.

I think we will have huge job losses and it will all stem from the downturn in property. When I discuss this with people, they think Im mad and just think everything will either stay the same or just grow a bit slower.

Im trying to be positive (because my wife is sick of me going on about it), but I just think the country and its people are out of control and we have dark days ahead. This thread is really about how are live's are going to change for the worse over the next few years.


----------



## robd

whathome said:


> Here's another significant drop, this is the second time the asking price has been dropped on this one in Sutton:
> 
> Original Price: €835,000
> 
> 
> New Price: €750,000
> [broken link removed]=
> 
> It was at €795,000 for a few months in between.



This is something that really annoys me with Estate Agents.  

This house is acutally in Kilbarrack not Sutton.  Kilbarrack, Coolock, Donaghmede and Bayside have all disappeared over the last 5+ years.  They've become Raheny and Sutton.  Same with areas of Killester, Marino and all of Dollymount becoming Clontarf

Wonder how long they'll continute to get away with this in a falling market.  They should be brought to book for false advertising at the very least.


----------



## tententwenty

SHARP said:


> This thread is really about how are live's are going to change for the worse over the next few years.


Well its an ill wind in fairness. Some businesses will do well, others will utterly collapse. How would you go about crash-proofing yourself (if this really is the last gasp)?


----------



## BigM

phoenix_n said:


> Since i think i called the crash here first i am going to reiterate again my figure of a fall.
> 
> 40% by xmas. Main Dublin market with the obvious exceptions. (i.e. leafy surburbs)


 
Not sure by Christmas, but there's definitely room for 40% drops over the next 8/9 months - especially for 'stressed vendors' in 2Pac's (RIP) Back of Ballivor areas. But people who paid up for houses in desirable (to them) locations will likely just take the pain of IR hikes rather than realise losses - also must consider that anyone who bought even 18mths ago can probably take a 30% fall in the 'paper' value of their home.

My barometer is the following:
[broken link removed]=
Went on sale (private treaty) back at the start of July (bad timing) asking €1.65mio. Sat there all summer. Now it's being auctioned on 3rd Oct - AMV €1.65mio. Let's see what happens.......


----------



## CelloPoint

Just to put a little bit more perspective on this discussion.

My aunt lived in Calgary during the 1980s property crash. She was chatting to me recently about the madness in Ireland and shares similar views to me. 

We are re-living history here in Ireland. The young people my age have never experienced hard times, let alone mediocre times, and we're all expected to be wearing prada shoes now.

Calgary's economy was heavily dependent on the oil industry: In Ireland, I believe our equivalent oil industry is US FDI, the US economy, and the oil well of money that is German pension funds (borrowed at exceptionally low interest rates).

Anyway, here's the article below. Even the Canadians didn't learn from the hard lessons of the 1980s - greed is a funny thing.

http://www.calgarysun.com/cgi-bin/publish.cgi'p=129737&x=articles&s=lifestyle


			
				Calgary Sun said:
			
		

> Home prices are going through the roof in Calgary.
> 
> HAMMERED ... So you're going to buy a newly built home and quickly flip it for profit' Hold your horses! Experts say *the desire to make easy money by buying and selling property is often a ticket to bankruptcy*.
> 
> The average house price is now above $300,000 and we're closing in on Toronto. So rapid is the rise, the term real estate doesn't seem relevant any more? Unreal Estate is more fitting. In the Calgary Sun's five-part special series on residential realty, we're profiling this red-hot market. We'll examine where the market is and where it's going and we'll provide tips on buying and selling. As well, readers will gain insights on the pros and cons of the current home realty scene. Today, we look at how times can change on a dime.
> 
> The headlines of the day promised Calgary's good times would always roll.
> 
> But with the turn of the decade, homeowners in the city were heading into the 1980s' perfect storm of economic trouble.
> 
> And with the current housing boom, both economists and those who lived through the last bust are offering the following advice: Sure, be optimistic, but also be careful with your cash.
> 
> *'We learned the hard way,'* says Al Westman, whose former company B&H Homes was one of the casualties when the bottom fell out of Alberta's economy in the 1980s.
> 
> *'There was literally hundreds and hundreds of houses on the market lower than we could build them at.'*
> 
> High corporate debt, runaway inflation and interest rates soaring near 20% ' coupled with the then-federal government's National Energy Program ' led to massive layoffs and home and business foreclosures across the province as activity in the oilpatch ground to a halt.
> 
> And while he's quick to point out it's unlikely we'll be crashing into an economic iceberg anytime soon in Wild Rose Country, Mike Percy, a University of Alberta professor who specializes in energy issues and the area's economy, says slowdowns are a fact of life.
> 
> Our economy, though now more diverse, is also still largely dependent on energy prices, he says.
> 
> 'Inevitably, there's going to be a recession ' the business cycle is not dead,' says Percy, adding all it would take is a major incident in the U.S. or China.
> 
> 'When it's going to be and its severity is hard to predict ... in the absence of those types of things we can't control, the economic fundamentals look pretty good, but one has to be aware there is still going to be a turning point.'
> 
> Bank of Canada brass has indicated if inflation remains in the 2% range, any interest rate hikes should remain modest.
> 
> But even a minimal increase would hurt with city home prices currently rocketing through the roof.
> 
> In February, the average home in Calgary went for $304,560.
> 
> Assuming a downpayment of $30,400, or 10%, and 25 years amortization, monthly property payments at 6% are about $1,754, but at 8% that would rise to $2,092 and a 12% rate would cost $2,829.
> 
> In 1981, when many mortgages were a whopping 21%, owning that same house would have set you back about $4,600 a month.
> 
> Former Calgarian Brian Norton says he remembers buying a 2,100-sq.-ft. house in the Woodlands area in December 1979 and being stuck paying rates close to that when he renewed his mortgage a year later.
> 
> 'At the end of that year, our rates went through the roof,' says Norton, adding mortgages had previously been closer to 12%.
> 
> 'For several years, all we did was struggle to make those payments and we ran up a bunch of debts.'
> 
> Adding insult to the injury of his $2,000-a-month housing bill was the fact property values plunged because the cost of borrowing meant many people couldn't afford to buy ' and many of those who did defaulted and faced foreclosure.
> 
> *'We couldn't have sold it and even got enough to pay the mortgage,'* says Norton, now 66 and practising law in Kelowna.
> 
> 'We were on a pretty tight budget then.'
> 
> About the same time, others, such as Elsie and Peter Moore, found $4,000 added to the price of their $74,000 Whitehorn-area honeymoon home literally overnight.
> 
> 'There was just no way we could afford that,' recalls Elsie Moore.
> 
> When the then-newlyweds made their story public, another developer came to their rescue, offering to build them another house at the original price, and Moore says they were then able to weather the storm.
> 
> 'The house wasn't built for five months after we got married, so
> we lived with Pete's parents, but it
> all turned out in the end,' Moore says.
> 
> 'I just thought if we don't sell it, we're not going to lose anything so just hang onto it and hope things get better ' and they eventually did.'
> 
> Like the Moores, those who carefully control their finances will probably survive any future downturns, but those swimming in red ink hoping things will get even better will probably drown financially, Percy warns.
> 
> *'Buying houses to flip and make quick profits in anticipation of ever-increasing housing prices is a ticket to bankruptcy in the longer term,' says Percy.
> 
> 'They will get burned ' it's only a question of when, not if.'*
> 
> Builders who balance their books well should also stay afloat, says Westman, who's now 78 and went on to help found his son Jay's firm, Jayman MasterBuilt.
> 
> 'Today, nobody's carrying anybody's credit ... everybody pays their bills on time,' says Westman, adding Jayman maintains a financial buffer ' allowing it to complete any work it's already started.
> 
> 'If we can't pay for them, we don't build them.'
> 
> ------
> 
> - RICH PRICES LEAVE CITY'S POOR IN THE COLD
> 
> If nothing more is done to make housing in Calgary more affordable, those who help the city's poor say one thing is certain ' their business will continue to boom.
> 
> 'There's no question about it,' says Dermot Baldwin, executive director of the Calgary Drop-In Centre.
> 
> 'The market's giving us less options to place people and less hope for people coming in who could have otherwise made it.'
> 
> Baldwin estimates the client base at his centre is up about 15% from last year and with costs on even the lower-end homes soaring, the pool of people who qualify as poor in Calgary is increasing.
> 
> 'I have a staff member who paid $480 for an apartment with free parking and cable ' the same place 3+1/2 years later, it's $780, plus you now have to pay for the cable and the parking,' says Baldwin.
> 
> Now the rush for homeless help isn't confined to the Christmas season, either, adds Diana Segboer, the Inn from the Cold Society's executive director.
> 
> 'We have been full of families in March, which means no single women or single men are getting in ' we're definitely at an all-time high,' says Segboer.
> 
> Serious government help is about the only thing that will ease the crunch for the poor in this market, says Terry Roberts, president of the Calgary Homeless Foundation.
> 
> 'The one big difference from the housing boom of the 1980s is interest rates are so much lower now ... however, with high purchase prices, land and construction costs that advantage is more than wiped out,' says Roberts.
> 
> 'We're not keeping up now, but we hope the new federal government, and the province, will develop long-term affordable housing programs.'
> 
> -----
> 
> - NEW AGE TAXING ON SOME
> 
> Soaring house prices won't necessarily result in higher taxes for Calgary homeowners ' so long as your property isn't on the leading edge of inflation.
> 
> Deputy city assessor Roy Fegan says Calgary's Market Value Assessment system isn't designed to profit from rising real estate prices, and only those homes that increase in price by more than the city average will end up with a higher tax bill.
> 
> 'We refer to it as revenue neutral ' if city council could operate on the same budget, with the same money, it would actually lower the tax rate,' said Fegan.
> 
> It comes down to where you live in Calgary, and whether your neighbourhood is rising in price faster than the average.
> 
> Each year, the city's assessors determine what the average price increase was for Calgary's 400,000 homes over 12 months, measured from July to July.
> 
> Between July 2004 and July 2005, the average increase was 8.4% ' homes that rode in price by more than 8.4% saw a tax increase, and those that increased by less, saw a tax decrease.
> 
> Because a select few communities are increasing in value faster than others, residents there are seeing substantial increases in the annual bills.
> 
> 'When values increase, they don't increase uniformly across the city,' said Fegan.
> 
> 'The city centre increases more than extreme suburbs.'
> 
> This year's tax bill, which will be mailed out in June, saw homes in communities such as Elbow Park and Roxboro increasing in price by more than 30%.
> 
> Because those desirable, inner-city mansions rose so much, it actually resulted in a tax decrease for 63% of Calgary homes.
> 
> What Market Value doesn't take into account is whether city council increases taxes in a given year.
> 
> -----
> 
> THEN AND NOW
> 
> - Energy Policy
> 
> The National Energy Program (NEP), enacted after the 1980 federal election by the government of Pierre Trudeau, was billed as a corrective measure prompted by a more than 150% rise in world oil prices.
> 
> It was designed to redistribute wealth, stabilize prices, and give Canadians more control over their own energy sector ' but it served only to plunge Alberta's economy into recession.
> 
> World oil prices fell on their own shortly afterwards.
> 
> Subsequent federal governments have vowed a program such as this will never be enacted again.
> 
> Analysts Goldman Sachs are sticking to their forecast the price of Alberta benchmark West Texas Intermediate crude will average $69.50 US a barrel, just shy of its record high, over the rest of 2006.
> 
> - Housing
> 
> In February this year, the average home in Calgary went for $304,560, up 26% from the same month in 2005.
> 
> The average local home resale price in December 1982 was $100,000 down $7,000 from the same month in 1981, but at the time some owners saw their property values crash by nearly 30%.
> 
> Housing starts in 1982 were 9,599 down from the 1978 record 15,382.
> 
> Total housing starts for 2005 were 13,667, down 2% from the previous year, but besting the 13,000 mark for an unprecedented fourth year in a row.
> 
> - Inflation
> 
> In July 1982, the consumer price index (CPI) in Alberta was 12.2%, compared to the national average 10.8%.
> 
> To stem that inflationary tide, federal regulators raised the Bank of Canada's trend-setting lending rate to nearly 20% ' meaning mortgages in the 21% range were common.
> 
> Currently, the national CPI, a measure of inflation used by Statistics Canada, remains in the 2% range and, as long as price increases stay in that range, the federal bank says rate hikes, if any, will remain modest.


----------



## beattie

It seems stories like this regarding recessions brought about by housing bubbles popping are becoming more commonplace.


http://www.rte.ie/business/2006/0914/imf2.html


----------



## whathome

robd said:


> This is something that really annoys me with Estate Agents.
> 
> This house is acutally in Kilbarrack not Sutton. Kilbarrack, Coolock, Donaghmede and Bayside have all disappeared over the last 5+ years. They've become Raheny and Sutton. Same with areas of Killester, Marino and all of Dollymount becoming Clontarf
> 
> Wonder how long they'll continute to get away with this in a falling market. They should be brought to book for false advertising at the very least.


 

Yep, area creep has been going on for years...

- Coolock has become Artane or Raheny
- Ballymun has become Santry or Glasnevin
- Eastern Swords has become Malahide
- Finglas has become Glasnevin
- Some of Artane has moved into Beaumont

Same on Southside...
- Ballybrack has become Killiney
- parts of Dundrum are becoming Stillorgan
- Sallynoggin moving into Glenageary
- Cornelscourt and Leopardstown edging towards Foxrock!

A better postal code system should sort all that out


----------



## whathome

BigM said:


> 2Pac's (RIP)


 
Where is he? I was thinking he'd gone on holidays or something.


----------



## OilKing

Not sure how many people would be on for this but as I've seen on the popular UK website [broken link removed], they have organised pub meetings in some area's where posters (bull and bear alike) can meet up and discuss their favourite threads over a few pints. 
PS. Could get messy if room305 and tententwenty get their beer fueled hands on each other.


----------



## CelloPoint

beattie said:


> It seems stories like this regarding recessions brought about by housing bubbles popping are becoming more commonplace.
> 
> 
> http://www.rte.ie/business/2006/0914/imf2.html



Are we suggesting that the ground is being layed for the crash? Can the US crash be used as a scapegoat, something that 'we could never have foreseen'? How does the US property market affect the Irish one anyway? Surely, it's the US economy as a whole and not localised property bubbles that we should be worried about?

Anyway, I don't trust anything I read about property anymore. We're a basket case. Our property bubble is massive - it is absolutely huge for a small island on the side of Europe with poor infrastructure and unsustainable economy.

AFAIC, this country has had no governance over the last 10-12 years. We've been on auto-pilot - the vested interests and lobby groups are the ones who are running the place to the demise of others. It's a sad state of affairs when my neighbour at work just spent 2 hours and 20 minutes in a car from west dublin this morning, and is absolutely soul destroyed with worry about his mortgage, his childrens' music lessons and his wife whom he hardly gets to see.


----------



## Bedsit

The news articles are coming in thick and fast today. Another one from the Indo's Breaking News section below:

http://www.unison.ie/breakingnews/index.php3?ca=9&si=98373


----------



## Howitzer

whathome said:


> Yep, area creep has been going on for years...
> 
> - Coolock has become Artane or Raheny
> - Ballymun has become Santry or Glasnevin
> - Eastern Swords has become Malahide
> - Finglas has become Glasnevin
> - Some of Artane has moved into Beaumont
> 
> Same on Southside...
> - Ballybrack has become Killiney
> - parts of Dundrum are becoming Stillorgan
> - Sallynoggin moving into Glenageary
> - Cornelscourt and Leopardstown edging towards Foxrock!
> 
> A better postal code system should sort all that out


 
FYI Dublin now consists of 3 areas: Castlenevintarf, Lucan and South Dublin.


----------



## room305

OilKing said:


> PS. Could get messy if room305 and tententwenty get their beer fueled hands on each other.



I'll be good I promise!


----------



## gearoidmm

whathome said:


> Where is he? I was thinking he'd gone on holidays or something.



Banned


----------



## whathome

OilKing said:


> Could get messy if room305 and tententwenty get their beer fueled hands on each other.


 
Do you detect some mutual attraction between them?


----------



## redo

Howitzer said:


> FYI Dublin now consists of 3 areas: Castlenevintarf, Lucan and South Dublin.


----------



## Calina

Howitzer said:


> FYI Dublin now consists of 3 areas: Castlenevintarf, Lucan and South Dublin.



Bother. Castlenevintarf will barely fit on the average internet form.


----------



## somerset

I would be interested to see what the extent of the impact of this thread has on the housing market. 

I am not getting carried away with the importance of the ramblings of a group of underoccupied obsessives ........however having already influenced a newspaper article, could such aspects as the widespread identification of actual cases of falling house prices cause a more rapid deflation of the market than would otherwise be the case?.

In previous market crashes knowledge of the instances of discounted prices would have been limited to vendors, buyers, EA's and their friends until it would be latched upon by the mainstream media. IMHO, the media outlets are taking their lead from a better informed public (AAM users).

Who wants to set up a website for properties that have dropped in prices ? bet that would be popular and get things rolling a bit quicker


----------



## SLAPPY

tententwenty said:


> Well its an ill wind in fairness. Some businesses will do well, others will utterly collapse. How would you go about crash-proofing yourself (if this really is the last gasp)?


 

I was just thinkg the same thing myself tententwenty.    Obviously a recession would affect each of us, but those who have already cashed out of the housing market and are sitting on a pile of money will be kings of the new world in 6 years.    All the people who are swimming in debt and  owe the bank 300,000 on a house that is now only worth 175,00 won't be much fun to be around.     People with a safe gov't job should be able to sleep pretty well at nights.   The only way to crash proof yourself is to have more cash and less debt.


A few thoughts on business that shouldn't suffer too much in a recession:
1. Pubs (Ireland will never change)
2. Chippers and any cheap eats
3. Career Counsilors (all the unemployed builders and auctioneers will need to do something with their lives.)


Businesses that will be hurt badly by a recession
1. Upscale restaraunts (sorry Lemongrass, I love ya, but I won't be able to afford ya)
2. Luxury car dealers (not a big demad for hummers and Land Rovers)
3. Builders and everyone involved in the housing industry (a little obvious)


----------



## batty

"In previous market crashes knowledge of the instances of discounted prices would have been limited to vendors, buyers, EA's and their friends until it would be latched upon by the mainstream media. IMHO, the media outlets are taking their lead from a better informed public (AAM users).

Who wants to set up a website for properties that have dropped in prices ? bet that would be popular and get things rolling a bit quicker"

Nooooooo- Can you all keep quite please for the next month or so??   I'm trying to sell a house here!!  (only joking)


----------



## Savvy

Well Somerset, Looks like you have your first house...Batty's!


----------



## BigM

gearoidmm said:


> Banned


 
I'm sure it's only a matter of time before he reappears in disguise.... perhaps as a bull !!



somerset said:


> I would be interested to see what the extent of the impact of this thread has on the housing market.


 
Of course, one could always start up a 'Bulls only' thread, email it to the lazy journo hacks and try to prop up the market that way!


----------



## Savvy

Does anybody know when in the month do Daft update their house price index? At the moment its only up to July.


----------



## SHARP

whathome said:


> Yep, area creep has been going on for years...
> 
> - Coolock has become Artane or Raheny
> - Ballymun has become Santry or Glasnevin
> - Eastern Swords has become Malahide
> - Finglas has become Glasnevin
> - Some of Artane has moved into Beaumont
> 
> Same on Southside...
> - Ballybrack has become Killiney
> - parts of Dundrum are becoming Stillorgan
> - Sallynoggin moving into Glenageary
> - Cornelscourt and Leopardstown edging towards Foxrock!
> 
> A better postal code system should sort all that out


 
Not only that

Leixlip, Celbridge and Maynooth are now considered "Dublin" to many people I know who live there!


----------



## BigM

batty;277581Nooooooo- Can you all keep quite please for the next month or so?? I'm trying to sell a house here!! (only joking)[/quote said:
			
		

> I know you're only joking but I still think if there are signs of a serious 'wobble' (as I think bank economists call it - they just can't bring themselves to admit it's going to be a crash) then Cowen will bring in some FTB-friendly Stamp Duty changes in December which will prop up the lower end of the market... for a while.
> I reckon there will still be time to get out in the Spring '07 season - but I wouldn't want to be selling my house this time next year.....


----------



## edo

I couldn't agree more with SHARP

A property crash in a well developed diversified economy is one thing - ie Japan in the early 90s - a property crash in modern day Post- Celtic Tiger Ireland is going to be interesting to say the least.

It still amazes me how much of the entire economy and workforce is dependent on the Property sector. I have heard figures of 10-15% of the workforce , but IMO that is on the low side - if you take all aspects , Construction, financials, EAs , advertisers , interior decor and all the retail associated with it, all the deli shops selling jumbo breakfast rolls and the like - I would put it at closer to 30% myself .

I was down in the home place (South County Carlow) over the weekend and damn near every small business or recent startup is in something to do with property - be it builders, tilers , builders providers , drain unblockers , capital equipment hires , painters , landscape gardeners, etc etc . Every corner you go around there is a site for sale - there are 3 estate agents in a village with a population of 900!- I guess everybody down there must be on their 3 of 4th property by now! - if the property market slows - the knock on effect will be tremendous . 

Another observation is that there is widespread displacment going on in small businesses throughout the Irish countryside - despite official denials to the contrary - 2 businesses I know down there cleaned out their Irish workforce and hired in Eastern Europeans - Doesn't really matter as most of the Irish I know want to work in the property sector where the money is better - no competitive challenges to worry about there . Again if the property market slows and the property jobs dry up - we will really see how tolerant the Irish really are - once the middleclass start squealing the game will be up.

Im in export manufacturing and this sector has technically been in recession for the previous 2 years - take away the property sector and public sector and with some honorable exceptions there has been Sweet Fanny Adams job creation in this country since 2001. The whole property boom literally has created this "bubble economy " in which the majority of the population of this island are dependent for their livelihoods.

For those of us who have to make a living in the "real world" it is quite apparent that we are , as the Chinese insult would put it, are about to enter interesting times . the US is about to enter recession , if its not there already , the result of which will put us all in uncharted territory , Europe's tentative recovery this year could be stillborn , dependent as it is on Germany's export sector . China's booming exports have masked a multitude of sins , which may become apparent when the American consumer decides the splurge is over and its time to repay the mortage or lose the house - it will be a long long time before China will be in a position to replace the US as the motor of World economic growth - oh yeah they also have a property bubble too!. 

Irelands competitive position on the world stage has gone to the dogs over the last few years - ok we dodged a bullet over Intel, but its a stay of execution , not a pardon. With inflation spiralling , more competitive rivals opening up in the far east and eastern europe , our export industry better start diversifying soon because when the Multi's move on - theres gonna be a lot of empty 3 bed semi ds in County Dublin and Limerick. 

From a purely economic Darwinist point of view - A shakeup was overdue and t what the market gives , the market takes away , if you get complacent. It will seperate the chaff from the wheat and what is still left standing will be something to build on when the dust settles - It will also hopefully cure the Irish peoples illusions of getting a lot for very little effort - that there is no subsitute for hardwork allied with good planning and vision to create wealth and prosperity that will last.

No use blaming the government - we live in a democracy and in democracies you normally get (as much as it pains me to say this) governments that are broadly representative of the citizens who voted for them - poor planners and money managers, the greed and short term thinking, the im alright Jackism etc etc. Hopefully people will remember that when they go to the polls next time - maybe a property crash might make them brave enough to actually do something about it , rather than the usual bitching, whinging and moaning that takes place between elections , yet when the opportunity arises to take positive action , they fall for the same ould S***E and chicken out. A Property crash will be tough , taxes will go up etc etc , yet there could be a silver lining to it all - its not the end of the world , just a particular part of our economic history that people will look back on fondly saying " Do ya remember how much that gob****e paid for that.................................................

Im Done


----------



## SHARP

SLAPPY said:


> I was just thinkg the same thing myself tententwenty. Obviously a recession would affect each of us, but those who have already cashed out of the housing market and are sitting on a pile of money will be kings of the new world in 6 years. All the people who are swimming in debt and owe the bank 300,000 on a house that is now only worth 175,00 won't be much fun to be around. People with a safe gov't job should be able to sleep pretty well at nights. The only way to crash proof yourself is to have more cash and less debt.
> 
> 
> A few thoughts on business that shouldn't suffer too much in a recession:
> 1. Pubs (Ireland will never change)
> 2. Chippers and any cheap eats
> 3. Career Counsilors (all the unemployed builders and auctioneers will need to do something with their lives.)
> 
> 
> Businesses that will be hurt badly by a recession
> 1. Upscale restaraunts (sorry Lemongrass, I love ya, but I won't be able to afford ya)
> 2. Luxury car dealers (not a big demad for hummers and Land Rovers)
> 3. Builders and everyone involved in the housing industry (a little obvious)


 
I think the Spar's/ centra's/ convience shops will be hugely hit and buying in Lidl/Aldi wiill sky rocket!(people need food, but will need to watch the pennies) I also think shopping centre's in general will be hit in a big way, Although shopping is Ireland's biggest hobby, I just think people will continue to travel to them (i.e. the north side visting Liffey Valley and the south side travelling to Blanchardstown) but it will be their day out and the buying will dry up (well especially in comparision to the lunatic buying that's going on now)

The construction industry impacts so much and most things will get a big hit. I really don't want a downturn/recession, but want people to cop on and face up to the fact that we are not Footballers and Footballers wifes!


----------



## tententwenty

OilKing said:


> PS. Could get messy if room305 and tententwenty get their beer fueled hands on each other.


Not to worry, whathome will start his own thread in the chipper afterwards about the petty bickering and we'll all have a good larf.


----------



## batty

Savvy said:


> Well Somerset, Looks like you have your first house...Batty's!


 
In anticipation of falling prices I've priced my house myself at €690.  EA was suggesting that I put it on at €750!!  It won't be officially "launched" until next Tuesday but should be interesting.


----------



## whathome

tententwenty said:


> Well its an ill wind in fairness. Some businesses will do well, others will utterly collapse. How would you go about crash-proofing yourself (if this really is the last gasp)?


 
Anyone selling bicycles in the west of Ireland should do very well!

   nudge nudge


----------



## phoenix_n

Great post edo. Pure logical thought.



edo said:


> I couldn't agree more with SHARP
> 
> A property crash .................................................
> 
> Im Done


----------



## CelloPoint

To what extent do people agree with Edo's observation that: not only are we playing out a property bubble, we're also going through an _economic_ bubble?


----------



## baby_tooth

First time posting here but have been following this thread amongst others for some time.

I think Edo has done a great job surmising my sentiment as to the direction things will spin.

Coming from an area where following and pricing interest rates and inflation I can see nothing but increases in rates up to 3.5% with a pause to see if the US can sort out their deficit and what role China will play with regard to their currency.

At the moment the euro has been day on day depreciating against the dollar and pound, pulling surpluses out of eu and into these countries which I can't see being allowed to continue in the short to medium term.

Add to that the fact that Irish Energy regulators are slow to adjust prices as per market views, we will see us paying higher than markets rates for energy which will squeeze margins (be that take home pay or company profits) and further reduce sentiment even further.


----------



## BigM

madisona said:


> not a bad idea. maybe some new websites could be started www.maybebears.com or [broken link removed] and there could be some new sections in the classifieds ""Bull seeks Bull" or "Bear seeks Bull"
> e.g "long time Bear on reasonable rent seeks self satisfied Bull for heated discussion on advisability of selling and reinvestment in cocoa beans. ( no messers please, min three investment properties required)
> and www.myhome.ie could introduce a private members area with previews and pictures of new developments .


 
Brilliant.


----------



## whathome

A downturn might be good news for employers...
 Harnessed by the banks, employees up to their neck in mortgage debt will be very eager to please the boss when things get a little tighter.


----------



## soma

CelloPoint said:


> To what extent do people agree with Edo's observation that: not only are we playing out a property bubble, we're also going through an _economic_ bubble?



I have long since stopped actually caring about/paying attention to house prices and affordability etc - the penny dropped about 10 months ago that what I was looking at was a Paper-Tiger economy, one that will not have a leg to stand on over the next few years IMHO. 

So yes I'd subscribe to the theory that we have a 'bubble economy'.


----------



## SHARP

I agree we have a bubble economy and not just property.

Our spending is out of control and I don't think people realise how much. Many of my friends are in their 30's and have 300k+ mortgages over 30+ years, credit card bills in the low 1,000's, extra loans for the new plasma/re-done decorating, 2 car loans, credit unions loans.

Not all people in Ireland at the money have "real money" Yes, there are 50year old plus that have real money in the bank as their "meagre" 15-20 years mortgages are now paid off and all their wages can be used for spending. 

The people you see in the new BMW's, Merc's, Landrovers in their 30's - you can nearly be right in thinking that a large percentage of them have huges unaffordable loans out on them or even worse - they are re-mortgaged loans on the huge increase on the price of their homes. What happens when jobs are lost and these loans can't be met?

The whole "Keeping up with the Jones" is going to bring this country to its knees (or maybe just the suburban housing estates then) because people are using borrowed money to keep the "Im rich"/"Im loaded" persona up.

I don't know about others - but I have seen signs of Depression rising among family and friends which was not present before. The times of "saving up for something to enjoy" are long gone in Ireland and its going to destroy us all.


----------



## BigM

SHARP said:


> I agree we have a bubble economy and not just property.
> 
> Our spending is out of control and I don't think people realise how much. Many of my friends are in their 30's and have 300k+ mortgages over 30+ years, credit card bills in the low 1,000's, extra loans for the new plasma/re-done decorating, 2 car loans, credit unions loans.
> 
> The people you see in the new BMW's, Merc's, Landrovers in their 30's - you can nearly be right in thinking that a large percentage of them have huges unaffordable loans out on them or even worse - they are re-mortgaged loans on the huge increase on the price of their homes. What happens when jobs are lost and these loans can't be met?


 
I'm not sure how prevalent the remortgaging to buy plasmas/BMWs really is - I don't know anyone who has done it. But I do know plenty of people in their 30s with mortgages in excess of 300k - they're not too worried about the paper losses a crash might bring since they're not moving. 
The knock-on effect on the economy will be bad but I'm not sure it'll result in wholescale recession a la 80's. 
It'll hit the construction (obviously) and its attendant services industries hardest, which have largely been maintained by migrant workers lately. The Banks have already repackaged and sold on most of their debts so there won't be any collapses there. 
So overall, it could be a 'hard landing' (i.e. crash) for the property market followed by a 'soft landing' for the economy as a whole. 
And then we can get back to 2000 levels when fundamentals actually meant something


----------



## tententwenty

whathome said:


> Anyone selling bicycles in the west of Ireland should do very well!
> 
> nudge nudge


Haha, sadly thats not me, I just enjoy cycling, thats a mates shop. No SUVs over here. 

Someone said that those who made out on the property boom will be the rich in the next 6 years, I would debate that. Money easily gotten is easily lost, as our fine government with its large and well paid civil service has amply illustrated. Most of these people have had good fortune and earned from it, but that doesn't imply any particular economic skill on their part. Whether or not they can hold on to that cash, or burn most of it in a splurge of high living and foreign holidays, is anyone's guess. I doubt that most of them will be investing in equities or local businesses, thats for sure.

Edit: actually if I had to place money on it, most of them will put their cash straight back into property on the first dead cat bounce, and take a belated hiding.


----------



## Duplex

somerset said:


> In previous market crashes knowledge of the instances of discounted prices would have been limited to vendors, buyers, EA's and their friends until it would be latched upon by the mainstream media. IMHO, the media outlets are taking their lead from a better informed public (AAM users).
> 
> Who wants to set up a website for properties that have dropped in prices ? bet that would be popular and get things rolling a bit quicker


 
Something along these lines?
http://flippersintrouble.blogspot.com/

P.S.

Great post Edo.


----------



## room305

whathome said:


> A downturn might be good news for employers...
> Harnessed by the banks, employees up to their neck in mortgage debt will be very eager to please the boss when things get a little tighter.



They'd have to be in a recession-proof industry. The employer mightn't like paying high wages to his employees but he hates it more when he doesn't have customers to buy his products.

Another rather large section of the economy that is going to get spanked in a recession is the debt industry. The home loan, debt consolidation stuff will take a brutal hammering during any period of credit tightening.

Actually so few industries are going to go unscathed that is probably worth trying to identify them. I disagree on the pubs front - your average local may be fine but the superpubs and niteclubs will be in trouble.

- Healthcare and funeral homes generally survive recessions (people never stop getting sick or dying)
- Protected professions by which I mean doctors, solicitors and accountants
- Public service jobs
- Low cost retailers


----------



## Superman

I'd question that about solicitors:
From what I've heard - much of the work in offices outside Dublin was made up of wills, conveyancing and personal injury cases.  With personal injuries now taken away there is a significant reliance on conveyancing which will be hit by a downturn.

Also don't forget that they charge percentages on certain transactions which will be squeezed if the value of the assets decrease (wills etc.)


----------



## CelloPoint

Superman said:


> I'd question that about solicitors:
> From what I've heard - much of the work in offices outside Dublin was made up of wills, conveyancing and personal injury cases.  With personal injuries now taken away there is a significant reliance on conveyancing which will be hit by a downturn.
> 
> Also don't forget that they charge percentages on certain transactions which will be squeezed if the value of the assets decrease (wills etc.)



Also, there are loads of legal people pouring out of the universities, Blackhall and Kings Inns. There just ain't enough work for all these 580+ points, perfect life, young people with massive expectations.


----------



## Duplex

Lipstick sales rise in recessionary periods. My advice, secure that Avon franchise now!


[broken link removed]


Oh, the bolder colours sell better in hard times, apparently.


----------



## beattie

Duplex said:


> Something along these lines?
> http://flippersintrouble.blogspot.com/


 
This would be good to see, it would be required viewing for anyone considering purchasing IMO


----------



## robd

CelloPoint said:


> To what extent do people agree with Edo's observation that: not only are we playing out a property bubble, we're also going through an _economic_ bubble?



What I believe we have is a Property Bubble and a Consumer Spending Bubble driven by said Property Bubble. We don't actaully have an Economic Bubble as out balance of payments is in decline and has been since 1999. Source [broken link removed] Q1 2006 shows up at -2 billion. We're just borrowing to fund this. The Celtic Tiger, which is still bandied about, died in 2001 with the .com crash. That's what makes this all the worse, we well ran off the cliff (ala cartoon character) and as of yet have forgotten to look down.

It has been interesting to see how various factors contributed to this unprecendented bull run for Irish Property, the length of which has never been experienced anywhere before. Relatively low house prices vs wages compared to other countries, .Com Boom/Celtic Tiger, joining low interest rate Euro economy at a time when higher rates where needed/warrented, opening up of East European labour. 

It's like the Property Market/Consumer Driven Economy is a pendulum swinging off of a pendulum. Both predulums have swung as far to the right as they can and are stalled. The main pendulum (US Economy) is just starting to swing back. The swing back of the secondary pendulum (Ireland) could be vicious.

The US Property House Price Index (available here http://en.wikipedia.org/wiki/US_property_bubble) looks so moderate compared to the Irish one.

I really think that any Property Price Correction here in Ireland has the potential to be much worse that that in other countries (UK, Austraila, and US) due to the sheer magnitude of the increases, the unprecendented length of the increases and the factors that contibuted to the increases. If even 2 factors, such as US Property Crash, US Recession, Higher Euro Interest Rates (due to recovering Germany, or higher inflation) combine the effect here will be magnified.

Incidently if the US goes into recession that would suggest that money would go into Staple Industries such as Food, Pharma, Heavy Industry and Bluechip companies with low growth and decent P/E, things which Germany have in abudance. Read an article on Yahoo Finance (http://biz.yahoo.com/special/invest091106.html) where one of the things a fund manager in the US is recommending for Recession Proof investment is Europe. So I wouldn't count on a slowing German economy and thus lower interest rates (quite the opposite in fact)


----------



## beattie

CelloPoint said:


> Also, there are loads of legal people pouring out of the universities, Blackhall and Kings Inns. There just ain't enough work for all these 580+ points, perfect life, young people with massive expectations.


 
Agree, the PIAB should take away a good deal of their work and result in cheaper insurance for the rest of us which might help people in reducing their costs when considering opening up a business.


----------



## SHARP

BigM said:


> *I'm not sure how prevalent the remortgaging to buy plasmas/BMWs really is - I don't know anyone who has done it. But I do know plenty of people in their 30s with mortgages in excess of 300k - they're not too worried about the paper losses a crash might bring since they're not moving. *
> The knock-on effect on the economy will be bad but I'm not sure it'll result in wholescale recession a la 80's.
> It'll hit the construction (obviously) and its attendant services industries hardest, which have largely been maintained by migrant workers lately. The Banks have already repackaged and sold on most of their debts so there won't be any collapses there.
> So overall, it could be a 'hard landing' (i.e. crash) for the property market followed by a 'soft landing' for the economy as a whole.
> And then we can get back to 2000 levels when fundamentals actually meant something


 
Well would people actually tell you that they have remortgaged to buy the new TV, car, holiday, new furniture - or is it a "loan"???

I was in with my solictor the other week in relation to a personal matter and he mentioned to me that he would be very busy between now and Christmas because of all the re-mortgage's draw downs he has to do. I asked "was everyone still building extensions etc" and his response gave my theory a bit of weight when he said "no, its to pay for the holidays expenses as the credit card bills are in .......and christmas, its the busiest time - very little to do with the property"

I think more and more people have bought houses for e.g. 200k and its now "worth" 300k - they are then taking out 20-50k for Luxuries i.e new car, new decking etc etc. If the property bubble does pop, and their house is now worth 200k again - negatitive equity????

Sure most people on here are either good with money or interested in being good with money - there is an awful lot more people out there borrowing from all cornerrs to live the life of a footballer and using the "equity" in their houses to live it. They do not realize that equity is not real money unless you sell the house.

There are more people involved in this than we all think!

.


----------



## room305

SHARP said:


> Well would people actually tell you that they have remortgaged to buy the new TV, car, holiday, new furniture - or is it a "loan"???


 
Could be on to something there. I didn't really believe it because I hadn't heard of many people financing their lifestyle with their housing equity. Then again when people are living the dream they don't want to admit they are behaving like the people you see in "Ocean Finance" ads.

On average, when a mortgage is switched in Ireland, €36k extra debt is taken on. There are approximately 100 mortgages switched every day. I doubt it is all for foreign property and conservatories.


----------



## phoenix_n

An ever greater consequence is that because of the perceived equity in property actual cash reserves will be low or even negative.


----------



## phoenix_n

phoenix_n said:


> I have called a 'crash' already. Its just the time it takes to sell (lead time) which is why is it not visible now. Expect xmas for it to in public domain. (*earlier in business pages*)


 


whathome said:


> From today's Independent...- *Business section*
> 
> Desmond warning on property bubble
> http://www.unison.ie/irish_independent/stories.php3?ca=35&si=1687460&issue_id=14637
> 
> "DERMOT Desmond, who is one of Ireland's top financiers, has warned of a bubble in the Irish property market. "
> 
> 
> *IS THE PARTY FINALLY OVER?*
> http://www.unison.ie/irish_independent/stories.php3?ca=184&si=1687282&issue_id=14637
> 
> "IS the great Irish property party finally coming to an end? The question has been prompted by a number of recent indicators that appear to suggest early signs of a slowdown in the property market. "


----------



## SHARP

room305 said:


> Could be on to something there. I didn't really believe it because I hadn't heard of many people financing their lifestyle with their housing equity. Then again when people are living the dream they don't want to admit they are behaving like the people you see in "Ocean Finance" ads.
> 
> On average, when a mortgage is switched in Ireland, €36k extra debt is taken on. There are approximately 100 mortgages switched every day. I doubt it is all for foreign property and conservatories.


 
This is just what I "know" of what some people I know/know off to have done:

"Remortgaged to pay for Classic cars"
"Remortgaged to buy a motorbike"
"Remortgaged to buy a foreign investment"
"Remortgaged and put all existing loans from the car and holiday loan and then could take out a new loan for a new car"
"Remortgaged to pay for a holiday"
"Remortgaged to pay for new TV and Christmas presents in 2005"

They are just some of the things I know have been done by people - but Im sure there are many,many more that have done it.

I just have a feeling that more and more people over the past 2-3 years have actually topped up/remortgaged up to present values of their houses and if they fall in value - they are in negative equity, but with their shiny new car and tv to keep them happy.


----------



## poormouth

SHARP said:


> This is just what I "know" of what some people I know/know off to have done:
> 
> "Remortgaged to pay for Classic cars"
> "Remortgaged to buy a motorbike"
> "Remortgaged to buy a foreign investment"
> "Remortgaged and put all existing loans from the car and holiday loan and then could take out a new loan for a new car"
> "Remortgaged to pay for a holiday"
> "Remortgaged to pay for new TV and Christmas presents in 2005"
> 
> They are just some of the things I know have been done by people - but Im sure there are many,many more that have done it.
> 
> I just have a feeling that more and more people over the past 2-3 years have actually topped up/remortgaged up to present values of their houses and if they fall in value - they are in negative equity, but with their shiny new car and tv to keep them happy.


----------



## poormouth

SHARP said:


> This is just what I "know" of what some people I know/know off to have done:
> 
> "Remortgaged to pay for Classic cars"
> "Remortgaged to buy a motorbike"
> "Remortgaged to buy a foreign investment"
> "Remortgaged and put all existing loans from the car and holiday loan and then could take out a new loan for a new car"
> "Remortgaged to pay for a holiday"
> "Remortgaged to pay for new TV and Christmas presents in 2005"
> 
> They are just some of the things I know have been done by people - but Im sure there are many,many more that have done it.
> 
> I just have a feeling that more and more people over the past 2-3 years have actually topped up/remortgaged up to present values of their houses and if they fall in value - they are in negative equity, but with their shiny new car and tv to keep them happy.



Apologies for last mail pressed send too quickly.

Is'nt this exactly what Eddie Hobbs usually suggests in his "Show me the money" programme.


----------



## Eurofan

SHARP said:


> This is just what I "know" of what some people I know/know off to have done:
> 
> "Remortgaged to pay for Classic cars"
> "Remortgaged to buy a motorbike"
> "Remortgaged to buy a foreign investment"
> "Remortgaged and put all existing loans from the car and holiday loan and then could take out a new loan for a new car"
> "Remortgaged to pay for a holiday"
> "Remortgaged to pay for new TV and Christmas presents in 2005"



Had to add one i heard of recently;

"Remortgaged to buy a *horse*"!!

This was in order to buy a racehorse with her brother and as anyone who watched Hector on "Only Fools Buy Horses" it certainly wasn't cheap.

The most astonishing aspect is she reckoned it was 'an investment'...


----------



## room305

Eurofan said:


> The most astonishing aspect is she reckoned it was 'an investment'...



Well the Irish are well used to "investments" that cost them a lot and earn them little ...


----------



## Calina

Eurofan said:


> The most astonishing aspect is she reckoned it was 'an investment'...



yes well, high return investments are usually high risk aren't they?


----------



## conor_mc

Calina said:


> yes well, high return investments are usually high risk aren't they?


 
Ah, but you're assuming that Irish people can remember how to equate risk with reward.

In our minds, the highest reward investment (property - due to leverage) is the least risky (sure property prices only ever go up...!).


----------



## room305

Calina said:


> yes well, high return investments are usually high risk aren't they?



But they often seem to mix up which you are supposed to maximise and which you are supposed to minimise.


----------



## Jason7

Mount st annes - 2 bed apartments 750K all sold out !!!!

I am truly astonished at a) the price and b) how any one could pay that kind of money for an apartment in Miltown  in todays market that is showing all the signs of at best a slow down .


----------



## BigM

SHARP said:


> Well would people actually tell you that they have remortgaged to buy the new TV, car, holiday, new furniture - or is it a "loan"???
> 
> I was in with my solictor the other week in relation to a personal matter and he mentioned to me that he would be very busy between now and Christmas because of all the re-mortgage's draw downs he has to do. I asked "was everyone still building extensions etc" and his response gave my theory a bit of weight when he said "no, its to pay for the holidays expenses as the credit card bills are in .......and christmas, its the busiest time - very little to do with the property"


 
Hmmmm. Now I am worried... 
Although I just find it hard to believe that people would be stupid enough to remortgage up to the max in order to buy ridiculous luxuries (a horse for God's sake!?!? ) and pay for them over 30yrs.
But I suppose, what is it they say about one being born every minute?


----------



## whathome

Jason7 said:


> Mount st annes - 2 bed apartments 750K all sold out !!!!
> 
> I am truly astonished at a) the price and b) how any one could pay that kind of money for an apartment in Miltown in todays market that is showing all the signs of at best a slow down .


 

Which development are you talking about - from what I've seen, these apartments are coming down in price...

Old price : €695,000


New price : €675,000
www.daft.ie/135338


----------



## beattie

Jason7 said:


> Mount st annes - 2 bed apartments 750K all sold out !!!!
> 
> I am truly astonished at a) the price and b) how any one could pay that kind of money for an apartment in Miltown in todays market that is showing all the signs of at best a slow down .


 
They are in for a rude awakening in the near future


----------



## room305

Same properties are €1,450pm to rent or €3,150pm to buy (100% mortgage). 

More than double!


----------



## BigM

whathome said:


> Which development are you talking about - from what I've seen, these apartments are coming down in price...
> 
> Old price : €695,000
> 
> 
> New price : €675,000
> www.daft.ie/135338


 
Jason7's talking about the latest release - 2beds "from €715k"
which, funnily enough, is what you'll end up paying after Stamp on the €675k listed above


----------



## whathome

Jason7 said:


> Mount st annes - 2 bed apartments 750K all sold out !!!!
> 
> I am truly astonished at a) the price and b) how any one could pay that kind of money for an apartment in Miltown in todays market that is showing all the signs of at best a slow down .


 
From this cache (11 Aug) it looks like the last brand new 2 beds in the latest phase were sold months ago:


----------



## cjh

whathome said:


> From this cache (11 Aug) it looks like the last brand new 2 beds in the latest phase were sold months ago:


 

..which makes more sense, because you could have sold a caravan for €750 K a few months ago....


----------



## whathome

*IMF warns over UK property crash *

[broken link removed]

Ireland get's a mention...

"House prices in Spain, Ireland and the United Kingdom still look elevated, and could come under pressure in a rising interest rate environment," it said.

"At this point, concerns centre on the US, although other markets, such as those in Ireland, Spain and the United Kingdom, also still seem overvalued by most conventional measures."


----------



## BigM

whathome said:


> *IMF warns over UK property crash *
> 
> [broken link removed]
> 
> Ireland get's a mention...
> 
> "House prices in Spain, Ireland and the United Kingdom still look elevated, and could come under pressure in a rising interest rate environment," it said.
> 
> "At this point, concerns centre on the US, although other markets, such as those in Ireland, Spain and the United Kingdom, also still seem overvalued by most conventional measures."


 
Sure there's nothing to worry about so - prices are merely "elevated"...
And anyway, does anyone take any notice of these pronouncements from the likes of IMF? Let's see how much coverage it gets...


----------



## whathome

BigM said:


> Sure there's nothing to worry about so - prices are merely "elevated"...
> And anyway, does anyone take any notice of these pronouncements from the likes of IMF? Let's see how much coverage it gets...


 
Good point - probably get the Bertie type response:
"Ah sure anyone dat listened to dem last year wudov lost out"

IMF, ECB, Irish Central Bank....they're always saying it


----------



## BigM

whathome said:


> Good point - probably get the Bertie type response:
> "Ah sure anyone dat listened to dem last year wudov lost out"
> 
> IMF, ECB, Irish Central Bank....they're always saying it


 
Soon enough AAM will be added to that list


----------



## tententwenty

BigM said:


> Sure there's nothing to worry about so - prices are merely "elevated"...


Wouldn't do to be held responsible for starting a market collapse now would it?


----------



## SHARP

BigM said:


> But I suppose, what is it they say about one being born every minute?


 
Yes, but what's even more worrying is that its alot more than 1 or 2. If I know at least 5-6 people who have/are doing it - how many people do you know have done it. Its probably the couple who didn't have any spare money a year or two ago and now seem to have the new car, back from the foreign holiday and they have done up the living room and bought the new TV and kitchen. Do you know any one these people and do you really think they paid "cash" for all of this - all in the space of say 6-12 months?

There used to be a saying "mortgaged up to their eyeballs" - I think alot of people are now re-mortgaged up to their eyeballs.

If there is a downturn (and I really wish it doesn't happen - because I like my current life) there is going to be some very sore people as marriages and family's WILL get broken up!


----------



## whizzbang

somerset said:


> Who wants to set up a website for properties that have dropped in prices ? bet that would be popular and get things rolling a bit quicker





who about www.DownTheyGo.com? its free


----------



## whathome

Some very light bed-time reading for industrious ThreadHeads,
...the 1999 Bacon II report.

http://www.environ.ie/DOEI/doeipub.nsf/0/3f3ff45854888bbb80256f0f003db97f/$FILE/Bacon2.pdf

"The primary impact towards price stability has been achieved through:

- Reducing investor demand for residential properties through the removal of deductibility of interest on borrowings undertaken for investment in
residential property, against rental income for personal income tax
purposes.

- Promoting liquidity in the second hand market by reforming the stamp duty regime, including extension of the new regime to purchases of new houses by non-owner occupiers."

Shame - Bacon II worked too well and had to be reversed!


----------



## thewatcher

whathome said:


> Shame - Bacon II worked too well and had to be reversed!


 
Yep,vested interests and all that !Couldn't be putting them out now could we  .
I hope they'll all be patting themselves on the back at the ryder Cup, in the knowledge that they've wrecked this country in the medium term.


----------



## blindjustice

I spoke to a friend of mine about the market and he reckons if it does crash there is always "safety in numbers" he didnt seem a bit bothered? anyone subscribe to this view?


----------



## edo

> I spoke to a friend of mine about the market and he reckons if it does crash there is always "safety in numbers" he didnt seem a bit bothered? anyone subscribe to this view?


Holy God BJ - exactly which bodily orifice was your friend talking out of when he gave this piece of wonderful wisdom? - were there illicit mind altering substances involved?

WTF!!!

A property crash isn't exactly a lion hunt on the serengetti plains or a pack of wolves chasing caribou across the artic tundra - what does he mean ? that the value of our properties will get picked off one by one until the crash has had its fill , gives up and goes way and its happy days again?

A more accurate view of "numbers" in this scenario would be the closing scene of "the field" which saw the whole bloody herd charging over a cliff to their doom.

Maybe, Maybe he means that there are just so many property owners in the country now that the government of the day wouldn't dare let the value of their precious houses fall or there will be hell to pay huh? - Well if it is , its a very naive view to hold - the gov might aswell be whistling dixie on the ditch for all the effect its going to have if the negative sentiment takes hold.

(if the gov starts givin out taxpayers money to compensate these lemmings - as soon as I manage to crack the Pentagon security codes - Im calling in a B52 strike on Leinster house - no way Jose!)

Im still not sure I get him exactly - bit baffled

 maybe somebody else here can enlighten me 

 going for a smoke and coffee to ponder on this one.


----------



## RiceCakes

blindjustice said:


> I spoke to a friend of mine about the market and he reckons if it does crash there is always "safety in numbers" he didnt seem a bit bothered? anyone subscribe to this view?



Exit stage left if the "gubbernment" tries to bail out the specuvesters at the expense of the renters and savers incomes.

I'll emigrate with my skills and positive income flow to somewhere I'm appreciated and not seen as meat for the bottom feeders.


----------



## blindjustice

hehehe i am so showing him this thread


----------



## blindjustice

kev says:
if anything....a very soft landing....most people wont be affected
Brian says:
europe has been warning us
Brian says:
thats not possible 
kev says:
wont happen
Brian says:
100,000 jobs were created in the building industry
Brian says:
a levelling off would equal job losses
Brian says:
job losses = no immirgrants
kev says:
apparently since the celtic tiger we had this bubble..
kev says:
immigrants will always be coming here
Brian says:
no immirgrants = lack of demand
kev says:
a ordinary job at the factory is like being an engineer in poland etc
Brian says:
nevermind 280,000 houses pluse an extra 30,000 holiday homes EMPTY
Brian says:
yeah
Brian says:
thats why alot are workin on building sites
Brian says:
the american economy is slowing down we have alot to do with their economy
Brian says:
its bad bad bad
kev says:
http://news.moneycentral.msn.com/provider/providerarticle.asp?feed=OBR&Date=20060914&ID=6020394
kev says:
no no no
kev says:
read that
Brian says:
at the very least a levelling off with job losses with an end to the boom and then a recovery = at best
kev says:
ha
kev says:
ur mad


----------



## blindjustice

kev says:
http://www.theaustralian.news.com.au/story/0,20867,20415263-2702,00.html
Brian says:
oh my god those links dont support your cause at all
kev says:
the things u say are just dangers
kev says:
there should be something from the government to ease the landing


----------



## blindjustice

another persons sentiment? anyone see the BLIND FAITH in our economy and the BLIND  FAITH in our government?


----------



## blindjustice

kev says:
ur getting hyped up by business people...they are exactly like weathermen trying to predict next months weather


----------



## wolfie

You have a wonderful way with words Edo. Class response!!!


----------



## exile

blindjustice said:


> kev says:
> if anything....a very soft landing....most people wont be affected



If anything... but probably nothing will happen.  15% rises for the rest of eternity!  We're all going to property millionaire heaven lads, yayyyyyy!


----------



## whizzbang

blindjustice said:


> another persons sentiment? anyone see the BLIND FAITH in our economy and the BLIND  FAITH in our government?



I think a lot of people just believe what they are told by people in Authority. In this case those in Authority are the Banks, Estate Agents and the Goverment.

Also people always assume the current trend will continue, I'm sure if you went back to the 80s most people would have said Ireland will never be the "Best" country in Europe http://news.bbc.co.uk/1/hi/world/europe/4020523.stm and second  wealthiest in the world
[broken link removed]

Accordingly now we all are rich most people believe we always will be.

I would imagine a lot of people feel something like: "We were poor before and now we are rich, and you don't go back to being poor once you are rich"
or
"We did our hard time before, now we deserve to be rich"


----------



## Eurofan

whizzbang said:


> "We did our hard time before, now we deserve to be rich"



I wonder how steeped this is in the twenty and thirty something mindset. One of my friends (on his third remortgage and despite having difficulties meeting ends meet still has his head stuck in the sand) is of the opinion that since his parents suffered enough to raise him and and his siblings he shouldn't have to do the same.

The fact that his new lifestyle is funded by *credit* doesn't seem to matter, all that matters is that x is less than y (where x is the monthly payment on whatever it is he's buying today and y is how much of his salary is left after paying the mortgage).

Out of roughly thirty peers i know of *one* who regularly saves for things he wants before buying them, and everyone else thinks he's nuts.


----------



## blindjustice

wolfie said:


> You have a wonderful way with words Edo. Class response!!!


 
i second this



exile said:


> If anything... but probably nothing will happen. 15% rises for the rest of eternity! We're all going to property millionaire heaven lads, yayyyyyy!


 
i second this...........YIPPEE!!!!!!!!!!!!!!


----------



## Duplex

I think that the 'what the hell, we will all go down together' attitude is a lot more prevalent that you'd think.  Its a typically Irish ahsureistic attitude and speaks volumes for a folk memory of a society where social cohesion was remarkable by its persistence, through war and famine.  Whether it will survive the next decade or so is questionable.


----------



## edo

Ah BJ - Im on to you now!



> if anything....a very soft landing....most people wont be affected


Kev and Brian are really Ant & Dec and yis are just buzzin' us trying to rise a response out of the more high strung posters on this thread!



> another persons sentiment? anyone see the BLIND FAITH in our economy and the BLIND FAITH in our government?     Today 09:20 PM



well it does beg the question - what - if the more vocal cassandras on this thread are correct and the market does start going into meltdown this side of the next election - what exactly will be response of the powers that be - the gov? - apart from doing a passable Wiley Coyote Impression 2 seconds before Boulder Impact!

* As for the rest of this lunatic asylum of a country - I can just picture it now *

A typically mature response from Fine Gael - "its all FF and PDs fault - we knew this would happen all the time and we warned ya - even tho we didn't na na na na"

Labour and Pat Rabitte will come up with some pointed witty enjoiners - which as per usual they will have completely misjudged the mood of the mob and will harden the general opinion that Rabbitte is just too much of smug smartarse to let into government (even tho IMO he isnt - even if I dont agree with his politics)

Joe Higgins will be out organising the Bolshevik takeover of suburban Dublin

The Greens will say that if we had all built environmentally friendly housing sure there would be no loss in Value of the properties.

Gerry Adams and Sinners will come out with the original solution that property prices will once again start rising if we could only get the Brits out of the North - their standard solution to every issue from Global warming to Drunk driving.

David MCwilliams will have a smile on his face that can only be removed by large doses of laser surgery.

The RTE Sensationaist Squad will spring into Action - 

Gerry Ryan interviewing disraught homeowners with particular attention being paid to malfunctioning toilets and overflowing septic tanks

Pat Kenny will of course get the big scoop - interviewing the tearful widow of some poor unfortunate who tops himself when the realization that he was going to be living in Castleknock/neilstown for the rest of his natural life sank in.

Charlie Bird gets beaten up by a crowd of irate Rugger mums wielding Gucci Bags who are protesting  outside the Dail.

Joe Duffy has to get an ear transplant every 2 months until finally he pleads insanity , picks up his little book of calm and retreats to an igloo on the South Pole for the forseeable future.

Bono holds a huge concert in the Phoenix Park to Campaign for Debt Relief for Adamstown - the banks generously donate 50 grand each and an umbrella for everybody in the audience emblazoned with "Sucker"

OK OK enough - maybe thats getting a bit surreal - anyway the grownups on the thread will givin out about GOING OFF TOPIC and the like !

G'Night


----------



## Duplex

You know what Edo?, the sad thing is that you are probably right.


----------



## tententwenty

whizzbang said:


> and second  wealthiest in the world
> 
> Accordingly now we all are rich most people believe we always will be.


And yet we are still not net EU contributors. I wonder how well that sits with Brussels?


----------



## thewatcher

I shall now give my prediction 40% - 60% drop within 18 months,the further away from dublin the bigger the drop.


----------



## SHARP

thewatcher said:


> I shall now give my prediction 40% - 60% drop within 18 months,the further away from dublin the bigger the drop.


 

There is alot more people in Ireland than just Dublin. Just becuase FTB's or trader uppers in Dublin and the suburbs are paying 400k+ for a box over 35 years, there is the equilivant FTB, trader uppers in the counties of Ireland that are taking out 400k to build 3,000 sq foot monsters. 


The reduction in the property prices of houses in itself doesn't really have me losing sleep as I think the houses are completely overpriced - its the knockon effect it will have on jobs. Most people don't mention it enough, but most homes in the past 5 years have been bought with 2 wages/salaries to pay for them. When the job losses do come in the building sector and the resulting business sectors that feed off it - where will people get the money to pay for the 400K mortgage? It doesn't matter if the house is only worth 300-350k - where's the wages to pay the mortgage?

People are living unsustainable lives on 2 wages at the moment - what will happen if there is only 1 wage? 

Repossessions, divorce and suicides!


----------



## redo

edo said:


> _* David MCwilliams will have a smile on his face that can only be removed by large doses of laser surgery.*_
> *
> Charlie Bird gets beaten up by a crowd of irate Rugger mums wielding Gucci Bags who are protesting  outside the Dail.
> 
> Bono holds a huge concert in the Phoenix Park to Campaign for Debt Relief for Adamstown - the banks generously donate 50 grand each and an umbrella for everybody in the audience emblazoned with "Sucker"
> *
> G'Night


LMAO


----------



## Calina

thewatcher said:


> I shall now give my prediction 40% - 60% drop within 18 months,the further away from dublin the bigger the drop.



I'm never really convinced by this. I think that you will see the greatest proportional drops in those places that have seen the greatest proportional rises so I think that some parts of Dublin are heading for a shock too.


----------



## redo

208 properties for sale in Lucan

17 <= 2 beds
133 = 3 beds
58 >= 4 bed

Prices are starting to drop.


----------



## conor_mc

Calina said:


> I'm never really convinced by this. I think that you will see the greatest proportional drops in those places that have seen the greatest proportional rises so I think that some parts of Dublin are heading for a shock too.


 
I agree. Two examples of 3-bed semi's I've been keeping an eye on. If we assume the values of each will revert to a reasonable rental yield of, say, 6%....

Stamullen - 25 miles from Dublin - current asking price €315k, current asking rent €1050 @ 6% yield = €210k or a drop of 33%.

Collinswood D9 - current asking price €550, current asking rent €1350 @ 6% yield = €270k or a drop of 51%

It's a simplistic comparison I admit, but it does show that central area's shouldn't be exempt if the market returns to reasonable, historical norms. In fact, they may be hit quite hard especially when the trader-uppers can't get out of Commuterville because of negative or inadequate equity.


----------



## conor_mc

Wollie said:


> NCB are very bullish about property in a commentary out this morning
> 
> "There has been much comment of late on the extent to which the Irish economy is "dependent" on the construction sector. Apart from the fact that it routinely overstates the case, such comment is banality masquerading as economic analysis. .... the current pace of house building is entirely consistent with underlying growth in demand. ... Rather than fearing it, the gloomsters would be better served celebrating such well0-underpinned dependency." So there!!! Yez are all idiots, as far as NCB are concerned.


 
I can't believe these guys - did they hire Sherry Fitz to write that report????

They are mistaking depend to buy houses with demand for houses to live in. Low, stagnant rents = no shortage of housing supply. Speculative element in the property market = massive demand for properties to _buy. _

Remove the speculative element and POP!, there goes their well-underpinned dependency!


----------



## redo

7 times out of 10 (complete quess) people will always choose location over space when trading up.  My MDT (Mixed developement Theory) states that large 3/4 properties in newly developed urdan areas (D15, Adamstown etc) will tkae the biggest hit.


----------



## redo

conor_mc said:


> I can't believe these guys - did they hire Sherry Fitz to write that report????
> 
> They are mistaking depend to buy houses with demand for houses to live in. Low, stagnant rents = no shortage of housing supply. Speculative element in the property market = massive demand for properties to _buy. _
> 
> Remove the speculative element and POP!, there goes their well-underpinned dependency!


Exactly my thoughts,  these guys have some neck


----------



## conor_mc

redo said:


> Exactly my thoughts, these guys have some neck


 
What gets me is they're Stock Brokers.... they should be talking up the stock market, not the property market.

My only conclusion is that a property slump would cause such massive damage to the ISE that these guys have now decided that they could lose more than they gain by trumpeting stocks as a better investment than property....


----------



## fatmanknows

Wollie said:


> NCB are very bullish about property in a commentary out this morning
> 
> "There ...................d.


 
These were the muppets who recently forecast everything is hunky dory for at least  the next 15 years..........such vision. The odds are money on that there gonna wish they kept silent on the issue.


----------



## room305

SHARP said:


> Yes, but what's even more worrying is that its alot more than 1 or 2. If I know at least 5-6 people who have/are doing it - how many people do you know have done it. Its probably the couple who didn't have any spare money a year or two ago and now seem to have the new car, back from the foreign holiday and they have done up the living room and bought the new TV and kitchen. Do you know any one these people and do you really think they paid "cash" for all of this - all in the space of say 6-12 months?


 
I had previously said that one big difference between a property meltdown here and in the U.S. was that at least Irish people didn't succumb to the "house-as-an-ATM" mentality like the Americans did. However, I'm becoming less and less convinced of this. I live in an area that wouldn't harbour many of the country's wealthy elite but the number of 06 cars and SUVs around is staggering. I can only assume a lot of them were bought using mortgage "top-ups".

272 mortgage top-ups were taken out every day last year at an average amount of almost €90k. Scary stuff.


----------



## Duplex

You have to admire NCB's hutspa, these guys have balls of steel. I love the way they trawl through the data to find an argument, any argument that supports world beating indebtedness, falling yields, falling competitiveness, housing over supply and signs that the global credit splurge is ending. You really have to stand back in awe at this type of 'turd polishing'.



BTW the IMF has issued another warning, [broken link removed]


----------



## Remix

Has the initial run for the exits started in expensive Terenure ?

Bushy park house now has 7 apartments for sale ([broken link removed]). I think that's a total of 9 this year.

I don't remember seeing any of these apartments going on sale last year. Anyone?


----------



## CelloPoint

Remix said:


> Has the initial run for the exits started in expensive Terenure ?
> 
> Bushy park house now has 7 apartments for sale ([broken link removed]). I think that's a total of 9 this year.
> 
> I don't remember seeing any of these apartments going on sale last year. Anyone?



650k for a freehold? Whoever buys one of those is a class A* idiot.


----------



## CelloPoint

redo said:


> 208 properties for sale in Lucan
> 
> 17 <= 2 beds
> 133 = 3 beds
> 58 >= 4 bed
> 
> Prices are starting to drop.



You're dead right about Lucan:



Perhaps Lucan is first the domino to fall.


----------



## Afuera

conor_mc said:


> My only conclusion is that a property slump would cause such massive damage to the ISE that these guys have now decided that they could lose more than they gain by trumpeting stocks as a better investment than property....



I think you're right about that. Out of the twenty companies selected for the ISEQ 20 index over half are focused on property related businesses. A cursory glance shows a lot of banks, construction companies and property/land holding companies.

If the property market tanks then it would not be surprising if the ISE saw a huge amount wiped off it.


----------



## room305

Afuera said:


> If the property market tanks then it would not be surprising if the ISE saw a huge amount wiped off it.



You can guarantee that and Robbie Kelleher will have to forget all about ISEQ 9,000. It's a very financials heavy index, something like a 44% weighting to the big banks.


----------



## Raskolnikov

There's one particular estate in my town where I estimate that out of 80 units, 10 or so are up for sale. Even the mother commented as she was driving by, she's never seen so many houses for sale in one particular estate. It's an estate that has only recently been completed, with some rather ugly duplexes and terraced houses. Construction quality is dubious to say the least. 

If I get a chance, I'll take a spin through the estate and take a picture of all the For Sale signs.


----------



## CelloPoint

room305 said:


> You can guarantee that and Robbie Kelleher will have to forget all about ISEQ 9,000. It's a very financials heavy index, something like a 44% weighting to the big banks.



For anyone on an Irish Life pension, I would consider changing down to as low a risk as possible for the next couple of months - given the huge dependency of the Irish Life pension fund on the ISEQ, there is a big property-related risk exposure there.


Anyone whose pension investment option is property-related, would do well to move their money into cash or bonds (at least for a while until things become a bit more stable).


----------



## Afuera

Duplex said:


> BTW the IMF has issued another warning, [broken link removed]



The Indo also writes about the same warning from the IMF:
http://www.unison.ie/irish_independent/stories.php3?ca=9&si=1688017&issue_id=14640

I think this sums up the Catch 22 predicament of the ECB perfectly...

"[FONT=Verdana, Arial]The IMF warned central banks to be cautious in raising interest rates, for fear of triggering a slump in house prices which could hit global growth."
.
.
.
[/FONT][FONT=Verdana, Arial]"The IMF has increased its forecasts for Europe, with growth in the eurozone put at 2.6pc this year and 2pc in 2007. The IMF accepts this strong expansion means interest rates will have to rise further."[/FONT]



Since the ECB have price stability listed as their primary concern, I think ultimately they will have no other options except to let Spain and Ireland be the fall guys for the greater good of Europe.


----------



## Jister

Afuera said:


> Since the ECB have price stability listed as their primary concern, I think ultimately they will have no other options except to let Spain and Ireland be the fall guys for the greater good of Europe.


 
This, for me, is the root cause of our problems. I remember getting my mortgage in the late 1990's and interest rates have been falling ever since, until recently. I think they came down by about 3.5% over the first few years of my mortgage. There was also a global cut post 9/11 to give 2 fingers to the terrorists IIRC. At the time the republic did not need to cut rates and if anything our central bank may have increased rates to keep things under control. 

Now we are between a rock and a hard place, the ECB need to raise rates but we need to maintain our present rates to enable a "soft landing"

Bang, bang, we are dead. We will collapse faster than the WTC on 9/11


----------



## Dipole

CelloPoint said:


> For anyone on an Irish Life pension, I would consider changing down to as low a risk as possible for the next couple of months - given the huge dependency of the Irish Life pension fund on the ISEQ, there is a big property-related risk exposure there.
> 
> 
> Anyone whose pension investment option is property-related, would do well to move their money into cash or bonds (at least for a while until things become a bit more stable).


 

Can't: only get one option to change each year.  Had a meeting with our pension advisor and voiced my concerns and that I wanted to be anywhere but in my current pension fund which is heavily exposed to teh ISEQ and US stocks at the moment.
Will get a chance to change at Christmas I think.  
I hate company pensions!


----------



## room305

Afuera said:


> Since the ECB have price stability listed as their primary concern, I think ultimately they will have no other options except to let Spain and Ireland be the fall guys for the greater good of Europe.



The goal of the Eurozone economy was always for stable, low inflationary growth. Such a growth model didn't suit our needs and we followed a more aggressive growth pattern (more Boston than Berlin).

When the housing crash drags us into a deep recession, we may actually serve as an example to newer EU member states on how to manage their economies.


----------



## CelloPoint

Raskolnikov said:


> There's one particular estate in my town where I estimate that out of 80 units, 10 or so are up for sale. Even the mother commented as she was driving by, she's never seen so many houses for sale in one particular estate. It's an estate that has only recently been completed, with some rather ugly duplexes and terraced houses. Construction quality is dubious to say the least.
> 
> If I get a chance, I'll take a spin through the estate and take a picture of all the For Sale signs.



I was just about to ask about the pictures! Some photographs of housing estates with loads of for sale signs outside them, would really confirm to me that we are indeed witnessing a tiger property crash in real-time.


----------



## daveirl

Raskolnikov said:


> There's one particular estate in my town where I estimate that out of 80 units, 10 or so are up for sale.


Where exactly is this by the way?


----------



## markyboy

CelloPoint said:


> Some photographs of housing estates with loads of for sale signs outside them, would really confirm to me that we are indeed witnessing a tiger property crash in real-time.


 
I imagine this will be the way of introduction of choice by the IT when it has to take notice.


----------



## SHARP

room305 said:


> I had previously said that one big difference between a property meltdown here and in the U.S. was that at least Irish people didn't succumb to the "house-as-an-ATM" mentality like the Americans did. However, I'm becoming less and less convinced of this. I live in an area that wouldn't harbour many of the country's wealthy elite but the number of 06 cars and SUVs around is staggering. I can only assume a lot of them were bought using mortgage "top-ups".
> 
> 272 mortgage top-ups were taken out every day last year at an average amount of almost €90k. Scary stuff.


 
And those top ups are paying for the new cars/holidays etc etc. My parents and their generation (60 year olds upwards) think all these new cars/furnishings are paid by the weekly wage - they really do! They don't believe me when I say that they are all on credit, more increasingly spread out over the 30+ year mortgage. They can't fathom that - they say that they can't be bought on borrowed money, sure if you don't have the money then you can't buy it - Im told them to wake up and smell the coffee and that day of "being able to afford" something is gone. Sure if they want it - they borrow the money to get it.

Im mean seriously - how many people have 60-100k in cash available to buy a new Land Rover, BMW X5 etc etc?????


----------



## Raskolnikov

daveirl said:


> Where exactly is this by the way?


PM sent.

Should be able to post a picture later.


----------



## Raskolnikov

SHARP said:


> Im mean seriously - how many people have 60-100k in cash available to buy a new Land Rover, BMW X5 etc etc?????


It'd surprise you. Where I work the average salary is about €60K.


----------



## Bedsit

Can we start a thread with pictures of For Sale signs, something like the one below?

http://thehousingbubbleblog.com/js_slideshow/


----------



## Remix

Bedsit said:


> Can we start a thread with pictures of For Sale signs, something like the one below?
> 
> http://thehousingbubbleblog.com/js_slideshow/


 


I'd like to see some well done photos of the same overpriced house and for-sale sign as the seasons pass. 

It's not too late to get a shot of the house and sign reflecting some sunshine.

Next up would be a damper looking photo with autumn leaves at the base of the sign. 

We could then have a seasonal shot with a sprinkling of snow and some holly suspended from the sign.

And so on..


----------



## whathome

Within our circle of friends and colleagues, we noticed that most of the people currently excited about buying/moving are female while the guys seem to be holding back a bit.  It could be simply because Mrs. Whathome's friends/colleagues have more money than mine of course.   

Just an observation so feel free to rubbish it


----------



## Calina

whathome said:


> Within our circle of friends and colleagues, we noticed that most of the people currently excited about buying/moving are female while the guys seem to be holding back a bit.  It could be simply because Mrs. Whathome's friends/colleagues have more money than mine of course.
> 
> Just an observation so feel free to rubbish it



It was noted in some set of mortgage statistics during the year that the number of single women taking out mortgages had grown disproportionately. I seem to recall it was also commented by the mortgage brokers that women buying were more inclined to have done their homework. I must confess I found it difficult to believe. 

I would also add that the people currently excited about buying are those who are buying. It's astonishing how people's attitudes to property and potential crashes therein change when they buy themselves.


----------



## SteelBlue05

Raskolnikov said:


> It'd surprise you. Where I work the average salary is about €60K.


 
Gross salary of €60 doesnt mean you have 60k-100k cash to spend on a car. Seems unlikey even if you saved for a few years.


----------



## mortimer33

Surprised to see this headline in the Indo!

Good news from CSO on future homes demand..

http://www.unison.ie/irish_independent/stories.php3?ca=303&si=1687849&issue_id=14640

What are peoples thoughts? (Btw We're almost through 200,000 page views barrier..WooHoo!)


----------



## Calina

mortimer33 said:


> Surprised to see this headline in the Indo!
> 
> Good news from CSO on future homes demand..
> 
> http://www.unison.ie/irish_independent/stories.php3?ca=303&si=1687849&issue_id=14640
> 
> What are peoples thoughts? (Btw We're almost through 200,000 page views barrier..WooHoo!)





			
				Indo Journo said:
			
		

> "[FONT=Verdana, Arial] It is clear therefore that demand will increase, therefore construction output needs to increase despite Ireland holding the record for housing output in Europe."[/FONT]


[FONT=Verdana, Arial]

Seems to me that there are a lot of "therefores" in that sentence, too many for my liking. 

Oh wait:

[/FONT]





			
				Indo Journo said:
			
		

> [FONT=Verdana, Arial] The Irish Home Builders Association (IHBA) say it can produce an additional 20,000 units per anunm, but it will require adequate zoned serviced land and updated regional planning.[/FONT]


[FONT=Verdana, Arial]

Hmm. Wonder if a IHBA press release was involved anywhere in the preparation of this story?
[/FONT][FONT=Verdana, Arial]
An additional 20,000 units, so, say 120,000 units per year? Interesting. Do we really have that many people sleeping on the streets?
[/FONT]


----------



## tententwenty

Calina said:


> [FONT=Verdana, Arial]
> An additional 20,000 units, so, say 120,000 units per year? Interesting. Do we really have that many people sleeping on the streets?
> [/FONT]


More like we are preparing for the return of the eastern continental United States to our shores...


----------



## SHARP

Raskolnikov said:


> It'd surprise you. Where I work the average salary is about €60K.


 
What about it???

That certainly doesn't mean that they have 60,000 in cash in the bank - just there to splash out on a new suv????

Back to my point - there aren't many people out there that can pay cash for large items such as new cars, large holidays (10k+) without borrowing. 

This borrowing is usually from re-mortgaging in one shape or form.


----------



## Savvy

One fact that the report raises is true, as things stand as of Jan 1st next year we will have 7m Bulgarians and 22m Romanians that will be able to come here to work.
The GDPfor these countries make Poland look rich(  GDP in dollars: Poland 8655, Romania 5232, Bulgaria 3683-source IMF).
So there could be a big influx from these countries and a knock on to demand


----------



## conor_mc

That Indo article discusses inward migration and then makes this interesting statement of 'fact'.....



> With two additional countries joining the EU in January next, this number will increase further.


 
Simple as that, not "may increase" but "WILL increase".

What about Germany/France/Sweden/etc opening up their labour markets after 2 years.... will a wider choice of destinations not affect the flow of inward migration at all? Will we put restrictions in place for the next two accession states that might limit the growth in inward migration?


----------



## Superman

Let's assume a population in Ireland of 4,000,000.
According to the IHBA there is an average 2.84 people per household
giving a grand total of houses of 1,408,451.
To reach the European average of 2.6, we would need a total of 1,538,461 which means we are currently "short" 130,010 houses.

Now, leave aside the fact that
a. Dwelling units in Ireland tend to have more bedrooms than other European countries, and so allow for higher people/household ratios.
b. Ireland has a younger population profile than Europe and children under 18 usually live with their parents,
c. There appear to be 240,000 units built in which noone lives.

Given that 90,000 houses are to be built this year, which let's assume were not moved into by the date of the Census.  
That leaves us short 40,010 houses to reach the European average.

Additional accommodation is required for immigrants of course, however I fail to understand where the demand for the building of 90,000 houses next year and in following years is to come from.

Anyone have any suggestions?


----------



## Duplex

Savvy said:


> One fact that the report raises is true, as things stand as of Jan 1st next year we will have 7m Bulgarians and 22m Romanians that will be able to come here to work.
> The GDPfor these countries make Poland look rich(  GDP in dollars: Poland 8655, Romania 5232, Bulgaria 3683-source IMF).
> So there could be a big influx from these countries and a knock on to demand



I understand that the new immigrants will be bussed to building sites and hotels and restaurants across the country as soon as they arrive.  The dire shortage of labour in the low skilled service sector must be addressed.   But seriously I think the government will announce restrictions on immigration from  Romania and Bulgaria when they become member states.


----------



## conor_mc

Superman said:


> Additional accommodation is required for immigrants of course, however I fail to understand where the demand for the building of 90,000 houses next year and in following years is to come from.
> 
> Anyone have any suggestions?


 
Speculation.

As I said before, low stagnant rents = no shortage of housing stock.


----------



## Savvy

conor_mc said:


> What about Germany/France/Sweden/etc opening up their labour markets after 2 years.... will a wider choice of destinations not affect the flow of inward migration at all? Will we put restrictions in place for the next two accession states that might limit the growth in inward migration?


Sweeden allowed free movement from day one. Germany put them off for 7 years(with some exceptions)


----------



## conor_mc

Savvy said:


> Sweeden allowed free movement from day one. Germany put them off for 7 years(with some exceptions)


 
I was going by this not-exactly-definitive resource....

http://www.workpermit.com/news/2004_02_27/eu/working_restrictions.htm



> *Sweden *
> Sweden, like Denmark and the Netherland, Sweden initially intended to let migrants from the EU accession countries work without restriction, but they have changed their stance. The Swedish government is especially worried about "benefits shopping" in light of its generoous social welfare system. The existing liberal work permit scheme (requiring merely a job offer in a skilled position) will remain in place for at least two years, subject to approval by parliament.


 
Either way, Ireland was the only existing EU country to allow full and free access from day 1 to the accession states. This will change over time as the other 14 relax restrictions, offering the migrant worker a greater choice of destination.


----------



## Borderlord

Channel 4 news last Sunday had a piece about 40,000 Polish people sleeping rough around London and that a charity was willing to pay their way home on a one way ticket. There is only so many people we can give jobs to, I would not worry about people coming from Romania and Bulgaria as there will be no work for them.. Sure, in a few years we could be all heading off to Germany with the Romania's and Bulgarians looking for work.


----------



## Savvy

conor_mc said:
			
		

> Either way, Ireland was the only existing EU country to allow full and free access from day 1 to the accession states. This will change over time as the other 14 relax restrictions, offering the migrant worker a greater choice of destination.


Not true the UK and Sweeden also(
[broken link removed])


----------



## Raskolnikov

Took a spin out, was very surprised to find that many of the houses in the estate I mentioned are actually Sale Agreed, noticed one or two signs have been taken down already. Anyway, here's the pictures, NOT 56K friendly.

http://static.flickr.com/95/243822850_b8ac62ee32_b.jpg

Entrance to the estate.

http://static.flickr.com/87/243822335_c5f5e74d98_b.jpg

Three For Sale signs as you enter the estate, two are already Sale Agreed.

http://static.flickr.com/43/243820530_06c76fc0e4_b.jpg

Four houses (only three viewable, the other sign), all Sale Agreed. You'll have to take my word about the other house.

http://static.flickr.com/83/243821842_d4c4aec49f_b.jpg

Another two houses for sale just around the corner.

By the way, the pictures I posted above are in the catchment area of about 40 houses, the rest of the signs are grouped in one's and two's, so not quite as dramatic. 

There were another two houses right next door to each other with For Sale signs, both are now sold with the signs taken down. They are however still listed on myhome.ie

[broken link removed]=
[broken link removed]=

So all in all, a flurry of activity with lots of sales, sorry CelloPoint.


----------



## Duplex

Borderlord said:


> Channel 4 news last Sunday had a piece about 40,000 Polish people sleeping rough around London and that a charity was willing to pay their way home on a one way ticket. There is only so many people we can give jobs to, I would not worry about people coming from Romania and Bulgaria as there will be no work for them.. Sure, in a few years we could be all heading off to Germany with the Romania's and Bulgarians looking for work.


 
You have a point. 

http://www.rte.ie/business/2006/0915/jobs.html


----------



## room305

Savvy said:


> One fact that the report raises is true, as things stand as of Jan 1st next year we will have 7m Bulgarians and 22m Romanians that will be able to come here to work.



From what I understand Ireland will not be extending its open door policy to Bulgarian and Romanian workers. One of the guys I work with is Romanian so he has looked into this fairly extensively (by which I mean he asked Noel Ahern).

Anyways, Bulgaria can't really spare any construction workers at present as they are all flat-out building apartments for the Irish fly-to-let brigade. 

As an ad on the radio this morning informed me - "in Bulgaria, things are only getting started ..."


----------



## HotdogsFolks

Savvy said:


> One fact that the report raises is true, as things stand as of Jan 1st next year we will have 7m Bulgarians and 22m Romanians that will be able to come here to work.
> The GDPfor these countries make Poland look rich( GDP in dollars: Poland 8655, Romania 5232, Bulgaria 3683-source IMF).
> So there could be a big influx from these countries and a knock on to demand


 
The government has already said it won't be allowing Romanians and Bulgarians come here to work. "We have done our bit" was the quote I believe.


----------



## Savvy

Just coming up to speed on this a the moment and
not to stray off topic too much but we can put them off from coming in from day.You can only defer this date for seven years. as it was with the countries that joined in 2004.
So no large influx in January next year then, so that gives less credibility to the report in the Indo


----------



## Jister

The thing about the immigrants is that the whole of Europe will soon be open to them and geographically we are the furthest away. Look at when the Irish were going to America, most went to Boston and New York on the East coast, and fewer to the west coast. Once central Europe is open to them they will all migrate there and join in the building boom of building houses for themselves in these countries.

But of course places like Poland are now enjoying booms of their own and soon they will be attracting their people back from Ireland, the same way as the IDA have tried to attract Irish people back from the States in the past.


----------



## Raskolnikov

SteelBlue05 said:


> Gross salary of €60 doesnt mean you have 60k-100k cash to spend on a car. Seems unlikey even if you saved for a few years.


I'm talking about 60K NETT, many people would earn in excess of that. Plenty of new cars in the parking lot, never heard of one person who remortgaged to purchase. Usually it's a case of getting a motor loan combined with savings and selling the older model. Not to mention lots of builders and builders wives who have money falling out of their pockets.


----------



## CelloPoint

Raskolnikov said:


> I'm talking about 60K NETT, many people would earn in excess of that. Plenty of new cars in the parking lot, never heard of one person who remortgaged to purchase. Usually it's a case of getting a motor loan combined with savings and selling the older model. Not to mention lots of builders and builders wives who have money falling out of their pockets.



Where do you work? The ESB or somewhere?


----------



## room305

Raskolnikov said:


> I'm talking about 60K NETT, many people would earn in excess of that. Plenty of new cars in the parking lot, never heard of one person who remortgaged to purchase. Usually it's a case of getting a motor loan combined with savings and selling the older model. Not to mention lots of builders and builders wives who have money falling out of their pockets.



I'm definitely in the wrong job. Which is funny in a way because my line of work is supposed to underpin our economy in the future ...


----------



## dontaskme

Savvy said:


> Sweeden allowed free movement from day one. Germany put them off for 7 years(with some exceptions)


 
yes, but there is a Polish car parked on a building site on my street (I live in Germany) right now, and I heard the guys talking in a language that was not German or English and sounded to my ear like Polish.

As I understand it, anyone from the 10 newbie countries can set up a company in Germany, or any EU15 country and then just employ themselves as self-employed, this does not require a permit.

Of course, setting up a company in Germany is probably pretty much like swimming through bureaucratic treacle but the influx of cheap self-employed labour could be one reason why the German economy has improved this year, spurring interest rate increases.


----------



## mortimer33

room305 said:


> From what I understand Ireland will not be extending its open door policy to Bulgarian and Romanian workers. One of the guys I work with is Romanian so he has looked into this fairly extensively (by which I mean he asked Noel Ahern).
> 
> Anyways, Bulgaria can't really spare any construction workers at present as they are all flat-out building apartments for the Irish fly-to-let brigade.
> 
> As an ad on the radio this morning informed me - &quot;in Bulgaria, things are only getting started ...&quot;


Have to disagree. The Bulgarian minimum wage was approx 76euro a month in 2005 (Correct me if I'm wrong!). If the European market opens up then it makes sense that young Bulgarians/Romanians with travel to places like Ireland where we pay 10euro an hour!
With regards preventing EU nationals from travelling to Ireland. Its likely that the EU courts could overturn anything that Noel Ahern tries to do..


----------



## Raskolnikov

CelloPoint said:


> Where do you work? The ESB or somewhere?


Pharmaceutical company.


----------



## bearishbull

dontaskme said:


> yes, but there is a Polish car parked on a building site on my street (I live in Germany) right now, and I heard the guys talking in a language that was not German or English and sounded to my ear like Polish.
> 
> As I understand it, anyone from the 10 newbie countries can set up a company in Germany, or any EU15 country and then just employ themselves as self-employed, this does not require a permit.
> 
> Of course, setting up a company in Germany is probably pretty much like swimming through bureaucratic treacle but the influx of cheap self-employed labour could be one reason why the German economy has improved this year, spurring interest rate increases.


Yeah your right, theres loads of these people working illegally and as self employed contractors all across central europe. The can drive from poland to france/germany and spend months working illegally there, if they get caught they just get sent home and come back in a few weeks later.many are living in their work vans around brussels and working during day from these vans for weeks at a time.


----------



## dontaskme

bearishbull said:


> Yeah your right, theres loads of these people working illegally and as self employed contractors all across central europe.


 
If they're self employed they're not working illegally.


----------



## SHARP

Raskolnikov said:


> I'm talking about 60K NETT, many people would earn in excess of that. Plenty of new cars in the parking lot, never heard of one person who remortgaged to purchase. Usually it's a case of getting a motor loan combined with savings and selling the older model. Not to mention lots of builders and builders wives who have money falling out of their pockets.


 
I work in the same industry as you do - now tell me how many cars in the parking lot cost between €60,000-€100,000 i.e. BMW X5, Landrover, Merc etc. Now think of the people who own them - would they really tell you that they have re-mortgaged to buy a car, of course most of them won't. Sure people driving these cars certainly don't want anyone thinking that they didn't have to borrow to buy them.

Yes, people on 60-100k wages are driving standard cars (20-40k) and paying for them in savings + value of car + loan, but they have income to support them

Now, how about the couple on 20-30k salaries, stretching to pay for the 03 BMW 3 series that are around - these are another sector that are re-mortgaging the house they bought for 250 and the house is now worth 300k - the have already spent the 50k.


----------



## room305

mortimer33 said:


> Have to disagree. The Bulgarian minimum wage was approx 76euro a month in 2005 (Correct me if I'm wrong!). If the European market opens up then it makes sense that young Bulgarians/Romanians with travel to places like Ireland where we pay 10euro an hour!
> With regards preventing EU nationals from travelling to Ireland. Its likely that the EU courts could overturn anything that Noel Ahern tries to do..



The second bit was a joke. The first bit is true. Ireland can block access to Bulgarian and Romanian nationals for seven years as far as I know.


----------



## SteelBlue05

Raskolnikov said:


> Pharmaceutical company.


 
salary surveys dont suggest that *average* salaries are 90k gross in Pharmaceutical companies...

http://www.recruitireland.com/careercentre/info/salarysurvey_pharm.asp


----------



## dontaskme

mortimer33 said:


> If the European market opens up then it makes sense that young Bulgarians/Romanians with travel to places like Ireland where we pay 10euro an hour!
> With regards preventing EU nationals from travelling to Ireland. Its likely that the EU courts could overturn anything that Noel Ahern tries to do..


 
As far as I know, Ireland and Uk will not let in Romanians to work. 

But I didn't think anyone was mooting not letting them travel within the EU. That is, they should have right to travel, as distinct from right to work in any member country.


----------



## Savvy

As I said in an earlier post Germany legally allowed certain types of workers in to their country. This included tilers.
So you had cities with triple the number of tilers as the Poles came in and properly registered themseleves and undercut the German workers by up to 50%.

Mortimer, countries have the right to but up restrictions for up to seven years. Look at Hungary, they just joined in 2004 and yet are not likely to allow new entrants in to their country next year!


----------



## dontaskme

SteelBlue05 said:


> salary surveys dont suggest that *average* salaries are 90k gross in Pharmaceutical companies...
> 
> http://www.recruitireland.com/careercentre/info/salarysurvey_pharm.asp


 
I know a guy works as a supervisor in production in pharma company in Cork and what he makes would probably be more than most of the figures listed in the above link. He works 12 hour shifts, including nights and presumably gets overtime and shift bonuses etc.


----------



## Raskolnikov

SHARP said:


> Now, how about the couple on 20-30k salaries, stretching to pay for the 03 BMW 3 series that are around - these are another sector that are re-mortgaging the house they bought for 250 and the house is now worth 300k - the have already spent the 50k.


I don't know anyone on 20-30K salaries that own new/almost new BMW's.


----------



## conor_mc

dontaskme said:


> I know a guy works as a supervisor in production in pharma company in Cork and what he makes would probably be more than most of the figures listed in the above link. He works 12 hour shifts, including nights and presumably gets overtime and shift bonuses etc.


 
Not exactly a standard 9-5 then, is it?

I don't think anyone doubts that there are people out there who do make this kind of money - more of them than there probably ever has been in the past.

But the main point was not that everyone with an X5/Merc/etc had remortgaged to buy it, but that _some_ people have done so.


----------



## SteelBlue05

dontaskme said:


> I know a guy works as a supervisor in production in pharma company in Cork and what he makes would probably be more than most of the figures listed in the above link. He works 12 hour shifts, including nights and presumably gets overtime and shift bonuses etc.


 
That would apply to all salary surveys I would assume. They dont account for bonuses, overtime etc as that is different from company to company.


----------



## SHARP

Raskolnikov said:


> I don't know anyone on 20-30K salaries that own new/almost new BMW's.


 
Well I do and my friends do.

People are amazed at where people are getting money, Im not - I know exactly where its coming from and its all linked to property.


----------



## Glenbhoy

SHARP said:


> Now, how about the couple on 20-30k salaries, stretching to pay for the 03 BMW 3 series that are around - these are another sector that are re-mortgaging the house they bought for 250 and the house is now worth 300k - the have already spent the 50k.


Haven't been following all the posts, but what couple on salaries such as these would be buying a car like this?  (they would deserve whatevers coming to them thought)  I doubt a bank would offer a top-up loan on salaries like that, regardless of equity built up.  Open to correction though.


----------



## SHARP

Sure remember people who bought for 200k and there house is worth 300k now - sure they are 100,000 richer eh? They HAVE to spend it you know!


----------



## cjh

I know two factory workers ( a couple) who drive a new BMW and a new Jeep. Then again, maybe they had a lotto win!


----------



## mortimer33

Oops missed the joke! ..
It'll be interesting to see what happens in the New Year with the new countries joining. You can stop them working legally, but experience has shown you can do almost nothing to stop people coming to work illegally...But then again would young Bulgarians/Romanians try to do something like that..


----------



## conor_mc

mortimer33 said:


> Oops missed the joke! ..
> It'll be interesting to see what happens in the New Year with the new countries joining. You can stop them working legally, but experience has shown you can do almost nothing to stop people coming to work illegally...But then again would young Bulgarians/Romanians try to do something like that..


 
In fairness, we're not likely to get a huge share of these immigrants due to our distance from their home countries. It'd be easier for them to drive into Germany or somewhere, get kicked out, and then drive back over the border a few days later.

Regardless, illegal migrant workers won't be contributing to house price growth to any great degree.


----------



## Raskolnikov

SteelBlue05 said:


> salary surveys dont suggest that *average* salaries are 90k gross in Pharmaceutical companies...
> 
> http://www.recruitireland.com/careercentre/info/salarysurvey_pharm.asp


Firstly, I work in the finance/accounting/HR department of the the company, so we wouldn't have too many lower wage earners dragging us down. Secondly, those figures are laughable, maybe 25% less than what people in the same position earn. Also it wouldn't even take into account bonuses and benefits.


----------



## Glenbhoy

> Sure remember people who bought for 200k and there house is worth 300k now - sure they are 100,000 richer eh? They HAVE to spend it you know!


I don't think it's that easy to release equity.
See here http://www.askaboutmoney.com/showthread.php?t=36268


----------



## Raskolnikov

conor_mc said:


> But the main point was not that everyone with an X5/Merc/etc had remortgaged to buy it, but that _some_ people have done so.


Exactly!

The point I'm trying to get accross is that there are plenty of people out there who can afford to do it.


----------



## Savvy

mortimer33 said:


> Oops missed the joke! ..
> It'll be interesting to see what happens in the New Year with the new countries joining. You can stop them working legally, but experience has shown you can do almost nothing to stop people coming to work illegally...But then again would young Bulgarians/Romanians try to do something like that..



This brought a quote to my mind from an article I read a few weeks ago.
It was the Bulgarian PM stating that anyone who wanted to work in the UK were already there.
The fact that these countries have joined the EU shouldn't make much of a difference if they can't simply hop on a plane and work here.


----------



## room305

Raskolnikov said:


> I don't know anyone on 20-30K salaries that own new/almost new BMW's.



I know people who supposedly have _no_ salary driving new beamers but that's another story entirely.

Certainly, there are some people who can afford their SUVs and similar luxury cars. However, there are quite a few 06 SUVs parked around my area and I can only think - if you can (legally) afford to pay for that in cash, I doubt you would choose to live here!

I'd agree with Sharp, probably a lot of people doing it but very few admitting it.

Last year nearly one hundred thousand people took out a top-up mortgage. Some of them have to be doing it to finance their lifestyle.


----------



## conor_mc

Glenbhoy said:


> Haven't been following all the posts, but what couple on salaries such as these would be buying a car like this? (they would deserve whatevers coming to them thought) I doubt a bank would offer a top-up loan on salaries like that, regardless of equity built up. Open to correction though.


 
I think it's over-simplifying by expecting a bank to directly sanction a 35-year car loan by re-mortgage.

What happens is these people buy the house and pay the mortgage. They then take out the car loan. Insurance costs a grand and goes on the credit card. Sure I'll clear it when I get my bonus. Bonus is spent on a 3-week holiday in Thailand, along with another 1k on the CC. Sure I'm due a pay-rise in May. Pay-rise comes and goes with rising interest rates and fuel costs, etc. Oh, and we need that 42" plasma screen TV too.... throw it on the CC. Short on cash at the end of the month, throw the weeks shopping on the CC. Get paid but last weeks shopping is forgotten about until the CC bill arrives. Cash is running short again cos it's nearly the end of the month. Take out a personal loan to clear CC and start afresh.

Rinse and repeat above for another year or two.

Go back to bank and tell them you're building an extension/attic conversion and ask for an equity release. Bank manager closes his eyes when he asks to see your architects drawing and you show him a blank A4 sheet. No worries, we can release €50k for you Mr & Mrs X, sure isn't it your own money anyway only it's tied up in bricks and mortar!

Rinse and repeat....

Believe me, this happens. Came close to this sort of scenario myself, only I got sense (thanks in large part to AAM!), sold the 03 car and am now tipping around in a rather banged-up 93 Toyota Starlet.

My next car I'm buying with cash.... my own cash....

Edit: forgot to mention the old chestnut of "sure we'll pay it back (42" TV?) when the SSIA comes through next year...."


----------



## Persius

Surveys in Romania have shown that most Romanians who expressed an interest in emigrating to work in other EU countries, said they would like to go to Italy or Spain - fellow Latin countries. I wouldn't expect too many to try to come here. 

I haven't heard any similar surveys for Bulgaria, and never came across too many of them when I was in Germany either, so it's hard to say where they would go. Wouldn't be surprised if quite a few of them went to Greece to work illegally there (I'm sure they're already doing this).

For both countries, I think Ireland is not attractive as a destination for illegal work. It's always easier in a country that has an existing community to show you the ropes, and that can be reached easily by car.


----------



## SteelBlue05

SHARP said:


> Well I do and my friends do.
> 
> People are amazed at where people are getting money, Im not - I know exactly where its coming from and its all linked to property.


 
I know a guy who is earning in the high 20's and is drving a 02 bmw 2litre 3 series.


----------



## Raskolnikov

I know of a guy who has never worked a day in his life and he's got a nice apartment with no mortgage and an almost new car. So what?


----------



## CelloPoint

conor_mc said:


> I think it's over-simplifying by expecting a bank to directly sanction a 35-year car loan by re-mortgage.
> 
> What happens is these people buy the house and pay the mortgage. They then take out the car loan. Insurance costs a grand and goes on the credit card. Sure I'll clear it when I get my bonus. Bonus is spent on a 3-week holiday in Thailand, along with another 1k on the CC. Sure I'm due a pay-rise in May. Pay-rise comes and goes with rising interest rates and fuel costs, etc. Oh, and we need that 42" plasma screen TV too.... throw it on the CC. Short on cash at the end of the month, throw the weeks shopping on the CC. Get paid but last weeks shopping isn't paid for until the CC bill comes and cash is running short again cos it's nearly the end of the month. Take out a personal loan to clear CC and start afresh.
> 
> Rinse and repeat above for another year or two.
> 
> Go back to bank and tell them you're building an extension/attic conversion and ask for an equity release. Bank manager closes his eyes when he asks to see your architects drawing and you show him a blank A4 sheet. No worries, we can release €50k for you Mr & Mrs X, sure isn't it your own money anyway only it's tied up in bricks and mortar!
> 
> Rinse and repeat....
> 
> Believe me, this happens. Came close to this sort of scenario myself, only I got sense (thanks in large part to AAM!), sold the 03 car and am now tipping around in a rather banged-up 93 Toyota Starlet.
> 
> My next car I'm buying with cash.... my own cash....



I rent in a pretty affluent area. You can see the difference between the new money and the old money just by the kind of car that's sitting in the driveway. New money tends to have a fleet of 05/06 cars parked in front as if they were on display. Old money will have a 96-97 volvo estate that hasn't been washed all summer and has a scent of dog from the interior. Some people just don't see the need to announce to the world that they've got money.

Personally, I drive a 1994 toyota carina E. It was handed down to me from grandfather->father->son. (and no, I'm not old money).


----------



## Calina

How is any of this bickering over how perfect strangers pay for their cars relevant? I realise that there is some link to property prices if people are remortgaging but *as long as they can keep up the payments it is not going to matter one way or the other* they will do their best not to sell. 

The point is for those who are selling, will people want to buy what's on sale. Methinks increasingly less at the money being saught but well, it'll take time for the shakedown, right?


----------



## SteelBlue05

Raskolnikov said:


> I know of a guy who has never worked a day in his life and he's got a nice apartment with no mortgage and an almost new car. So what?


 
Re-read the previous posts, this is all in the context of what is being discusses. You cant follow it?


----------



## ninsaga

Persius said:


> Surveys in Romania have shown that most Romanians who expressed an interest in emigrating to work in other EU countries, said they would like to go to Italy or Spain - fellow Latin countries. I wouldn't expect too many to try to come here.



..and why not...there has been a bunch of Romanians in Cork for years...long before the Polish & Latvians arrived.

Why would they not want to come...sure for any non national who does not work here they get well looked after with state benefits.


----------



## thewatcher

ninsaga said:


> Why would they not want to come...sure for any non national who does not work here they get well looked after with state benefits.


 
When the downturn comes one of the first things that's going to come under the microscope is the social welfare system,and how's it handing money out hand over fist and in many cases to people who shouldn't even be getting it.The health boards are even worse than the social welfare for this.The waste of taxpayers money is simply staggering,as other posters have said in some aera's rental supplement is the only thing keeping the market going.


----------



## room305

Calina said:


> How is any of this bickering over how perfect strangers pay for their cars relevant?



I think the original point was that there is a lot less of an equity cushion out there than people might expect. In a downturn, it will not just be the people who bought last year who are trapped in a negative equity situation.


----------



## Persius

Many people have pointed out the lack of foreign interest in the Irish property market as a sign that there is no value to be had here.
Well in the business section of today's Irish times there's an article about a Dutch online estate agency called Funda, which is buying the IAVI's website realestate.ie. Funda are paying €4m for the site, but most of it is deferred payment, based on profit sharing or targets being met.

I'm not sure what this actually says about the irish property market, but it seems madness to me, considering the dominance of both myhome and daft. There should be a lot of marketing over the coming weeks to try to establish the site.


----------



## sandymount

Persius said:


> Well in the business section of today's Irish times there's an article about a Dutch online estate agency called Funda, which is buying the IAVI's website realestate.ie. Funda are paying €4m for the site, but most of it is deferred payment, based on profit sharing or targets being met.



What if they miss their target? Generally the targets will be extremely ambitious to get the €4m.


----------



## thebutcher

[broken link removed]


[broken link removed]


----------



## blindjustice

room305 said:


> When the housing crash drags us into a deep recession, we may actually serve as an example to newer EU member states on how to manage their economies.


 
yep i reckon so too was just thginkin the same the other day!



edo said:


> Ah BJ - Im on to you now!
> 
> 
> Kev and Brian are really Ant & Dec and yis are just buzzin' us trying to rise a response out of the more high strung posters on this thread!


 
no kev is my bro


----------



## wolfie

[broken link removed]


----------



## redo

CelloPoint said:


> I rent in a pretty affluent area. You can see the difference between the new money and the old money just by the kind of car that's sitting in the driveway. New money tends to have a fleet of 05/06 cars parked in front as if they were on display. Old money will have a 96-97 volvo estate that hasn't been washed all summer and has a scent of dog from the interior. Some people just don't see the need to announce to the world that they've got money.
> 
> Personally, I drive a 1994 toyota carina E. It was handed down to me from grandfather->father->son. (and no, I'm not old money).



Has any else noticed nearly every single SUV/car bought in 05/06 is black, some with tinted windows.  Passat/PATHFINDER/BMW5.  Black is the new silver,  lol


----------



## Contrarian

Its a basic equation, over 200 remortages per day = explosion of SUV's/4X4's and assorted appendages of conspicuous consumption.


----------



## blindjustice

i heard that benchmarking for the public service can decrease their pay in bad times? any truth in this? relevance - many bought thinking their jobs and pay would be secure.


----------



## extopia

I think this thread is finally dead, unfortunately........

Nice ride tho.


----------



## tententwenty

extopia said:


> I think this thread is finally dead, unfortunately........
> 
> Nice ride tho.


So you're a bull, then?


----------



## ninsaga

tententwenty said:


> So you're a bull, then?



...well if one is trying to draw conclusions on how the housing market is going based upon the colour of cars then yes this thread has certainly run its course....



redo said:


> Has any else noticed nearly every single SUV/car bought in 05/06 is black, some with tinted windows.  Passat/PATHFINDER/BMW5.  Black is the new silver,  lol



...nuff said


----------



## tententwenty

ninsaga said:


> ...well if one is trying to draw conclusions on how the housing market is going based upon the colour of cars then yes this thread has certainly run its course....


Ah ninsaga, my favourite crokman. How often have you called to have this thread closed down? The bulls are starting to get panicky now, so I expect a lot more of these type of posts. Once again, if you don't like the discussion, start your own called "property prices, the only way is up, baby", with its own kinky boyz soundtrack.


----------



## Calina

blindjustice said:


> i heard that benchmarking for the public service can decrease their pay in bad times? any truth in this? relevance - many bought thinking their jobs and pay would be secure.



well I'm assuming that the vast majority of those in the private sector - who would outnumber the public sector hugely - might be in the same boat. After all, if they thought their jobs weren't secure, they'd hardly have bought. Or do you have a special secret report that says 94% of all housebuyers in 2005 were State employees?


----------



## bearishbull

ah all you doom mongers should just stop repoting all these asking price falls, slow market etc, dont you know bubble bertie the bumbling builders buddy sayz tings are gettin boomier!


----------



## Lumpsum

ninsaga said:


> ..there has been a bunch of Romanians in Cork for years...long before the Polish & Latvians arrived.
> 
> Why would they not want to come...sure for any non national who does not work here they get well looked after with state benefits.


 

Actually they build our houses, mind our kids, serve our food and are entitled to no State benefits if they don't work here - unless they are legitimate asylum seekers.

Focus group research done by the political parties shows that many people in Cork believe the department of social welfare give Romanians free prams, and buy cars for Nigerians. But intelligent people posting here wouldn't peddle such silly racist tosh, would they?


----------



## ninsaga

tententwenty said:


> Ah ninsaga, my favourite crokman. How often have you called to have this thread closed down? The bulls are starting to get panicky now, so I expect a lot more of these type of posts. Once again, if you don't like the discussion, start your own called "property prices, the only way is up, baby", with its own kinky boyz soundtrack.



My point is, what else can be said here that has not been said already. Some posters don't even bother hosting discussion..just pointing to (the same old) links on other websites.

Added to that if the best way of keeing this thread going is talking about the colour of cars ("lol" as the poster put it!) then it certainly has run its course!



Lumpsum said:


> Actually they build our houses, mind our kids, serve our food and are entitled to no State benefits if they don't work here - unless they are legitimate asylum seekers.
> 
> Focus group research done by the political parties shows that many people in Cork believe the department of social welfare give Romanians free prams, and buy cars for Nigerians. But intelligent people posting here wouldn't peddle such silly racist tosh, would they?



..some are here to work...some are here for the hand outs...for which our guvment provide without any qualms ..... how many of these (polish/latvians/russians excluded) do you know that don;t have medical cards?

ninsaga


----------



## tententwenty

ninsaga said:


> My point is, what else can be said here that has not been said already. Some posters don't even bother hosting discussion..just pointing to (the same old) links on other websites.
> 
> Added to that if the best way of keeing this thread going is talking about the colour of cars ("lol" as the poster put it!) then it certainly has run its course!


In a thread with thousands of posts, a little side tracking from time to time is not just acceptable, its essential. As for repeating posts, a property crash isn't a weekend event, it takes months or longer. So there is bound to be a little redundancy. 

Stop picking on people and add something to the thread, or be off with you.


----------



## whathome

*ECB's Weber Says ECB to Show `Strong Vigilance' on Inflation *

http://www.bloomberg.com/apps/news?pid=20601087&sid=abWJKnRhcmmk&refer=home

"European Central Bank council member Axel Weber said inflation will remain 'strong' into 2008, 
indicating policy makers will *extend their effort to raise interest rates into next year*."

Edit : Almost forgot to include some "discussion" for Ninsaga -
...so it looks like interest rates are going to rise above 3.5% into next year.


----------



## Lumpsum

ninsaga said:


> ..some are here to work...some are here for the hand outs...for which our guvment provide without any qualms ..... how many of these (polish/latvians/russians excluded) do you know that don;t have medical cards?
> 
> ninsaga


 
Eh, all of them.

Workers from the new EU states have been excluded from social welfare rights here. Those on work permits are excluded from free medical care, education and social welfare entitlements as well.

And they don't get free buggies nor free cars either. And they don't bleed lambs in their front gardens and eat their children.

You are entitled to feel uncomfortable about the number of foreigners here, but don't spread old wives tales.


----------



## ninsaga

tententwenty said:


> In a thread with thousands of posts, a little side tracking from time to time is not just acceptable, its essential. As for repeating posts, a property crash isn't a weekend event, it takes months or longer. So there is bound to be a little redundancy.



...thank you for reaffirming & agreeing my point then ie. that this has now become a side tracked discussion with a level of redundancy. 



tententwenty said:


> Stop picking on people and add something to the thread, or be off with you.



please rearrange the following words in the right order then.... kettle, black, pot



Lumpsum said:


> Eh, all of them.
> 
> Workers from the new EU states have been excluded from social welfare rights here. Those on work permits are excluded from free medical care, education and social welfare entitlements as well.
> 
> And they don't get free buggies nor free cars either. And they don't bleed lambs in their front gardens and eat their children.
> 
> You are entitled to feel uncomfortable about the number of foreigners here, but don't spread old wives tales.




Well lets agree on some things ( ie the lambs & the children stuff anyways) and agree to differ on others. Maybe you have not ..but I have witnessed where the social services provide these handouts.

If your read my thread again you may pick soemthing out of it..but just in case not..... I stated that some are here to work - I have no problem with that - just in case you think otherwise - irrespective of race, colour or creed.


----------



## tententwenty

ninsaga said:


> ...thank you for reaffirming & agreeing my point then ie. that this has now become a side tracked discussion with a level of redundancy.


Says he merrily discussing social welfare scams on a property thread. I won't feed the trolls any further, but neither will you get this thread closed.


----------



## ninsaga

tententwenty said:


> Says he merrily discussing social welfare scams on a property thread. I won't feed the trolls any further, but neither will you get this thread closed.



What...someone challanges where this thread is going & you call it trolling.... oh I see, so you want to keep this a "bear back-slapping" thread then is it...with the odd offline topic.....(say anyone know what the latest fashion trend is in Japan - what car colour is 'in' over there....yawn).


----------



## whathome

ninsaga said:


> What...someone challanges where this thread is going & you call it trolling.... oh I see, so you want to keep this a "bear back-slapping" thread then is it...with the odd offline topic.....(say anyone know what the latest fashion trend is in Japan - what car colour is 'in' over there....yawn).


 
ths thread can get a bit woolly sometimes but usually gets back on track fairly quickly when some new statistics or news appears. The PTSB/ESRI results out soon should re-focus everyone's attention. Why not come back and have a look then


----------



## OilKing

I know that several people on here were somewhat disappointed recently when on "The last word" last week, Matt Cooper was discussing house prices. Unfortunately he had 2 vested interest bulls, (can't remember exactly who) who naturally backed each others everything is fine keep spending stories.
Its funny how nobody has brought up with Matt that about 40% of TodayFMs adds come from Banks/Property websites/Auctioneers. Just have a listen at any time to Today fm and hear the shocking amount of vested interest adds at any time of the day or night. Not surprising he's afraid to have a real debate on the subject with someone like Mcwilliams or one of the editors of Finfacts.


----------



## Marie

Now John Hurley, governor of the Central Bank, warns the economy has become over dependent on the construction sector and its productivity performance has deteriorated - fairly encapsulates some realistic concerns expressed on this thread (quoted in an article in today's "Irish Times").......but as a recent contribution highlighted there are still hundreds of new triumphant 'Sold' lollipops appearing every week!


----------



## Lumpsum

madisona said:


> I assume that you are referring to landlords.


 
Or perhaps the SSIA scheme?


----------



## delgirl

madisona said:


> I assume that you are referring to landlords.


Or to bogus social welfare claimants?


----------



## redo

Marie said:


> Now John Hurley, governor of the Central Bank, warns the economy has become over dependent on the construction sector and its productivity performance has deteriorated - fairly encapsulates some realistic concerns expressed on this thread (quoted in an article in today's "Irish Times").......but as a recent contribution highlighted there are still hundreds of new triumphant 'Sold' lollipops appearing every week!


Contrast this statement with what NCB stockbrokers said last week.


----------



## bearishbull

Any signs of the autumn selling season being busy? Its now Sept 16th, have'nt heard much to indicate a frenzied buying season like in spring last. Anyone here at viewings today?


----------



## whathome

bearishbull said:


> Any signs of the autumn selling season being busy? Its now Sept 16th, have'nt heard much to indicate a frenzied buying season like in spring last. Anyone here at viewings today?


 
We've been at some viewings, much quieter than the Spring. Houses are still selling but definitely not at the inflated prices from earlier in the year. Sellers seem to have lowered their expectations, making deals possible.

This house for example (2nd in the list) started with an AMV of €3,000,000


and was subsequently reduced to €2,750,000 even before the auction, coming up on 26th Sep
[broken link removed]=


----------



## wolfie

Mate of mine bought 4 bed semi in Athlone 4 yrs ago for 110k Is selling it for 270k and banking the difference. He is going to rent a large  new detached home in new estate in Athlone for 850 per month.


----------



## thewatcher

madisona said:


> I assume that you are referring to landlords.


 
The tax evading one's yes,cheques should only be made payable to the landlord and checks should be in place to make sure that the properties status is that of an investment property and that all the revelant taxes have/are being paid.To think that taxpayers money is going to some landlord who aren't even paying taxes/stamp duty themselves is sickening and a disgrace in my book. 



Lumpsum said:


> Or perhaps the SSIA scheme?


 
What has that got to do with anything ?A silly point really.



delgirl said:


> Or to bogus social welfare claimants?


 
Them aswell,it seems to me that once someone actually secures a claim their status is rarely if ever checked after that,bar unemployment benefit.


----------



## Foxtrot

bearishbull said:


> Any signs of the autumn selling season being busy? Its now Sept 16th, have'nt heard much to indicate a frenzied buying season like in spring last.



I worked at an estage agent's office in the States years ago and it was commonly accepted by the agents that the market cycle for property starts to heat up in Spring and slows down in the Fall, regardless of the general trend of the market. Don't know if it applies over here, but just a thought.


----------



## blindjustice

Calina said:


> well I'm assuming that the vast majority of those in the private sector - who would outnumber the public sector hugely - might be in the same boat. After all, if they thought their jobs weren't secure, they'd hardly have bought. Or do you have a special secret report that says 94% of all housebuyers in 2005 were State employees?



an earlier post said that in the event of a crash civil servants would be ok
I wanted to know if there was any truth in what I heard about benchmarking being able to go down as well as up!!


----------



## miju

Foxtrot said:


> I worked at an estage agent's office in the States years ago and it was commonly accepted by the agents that the market cycle for property starts to heat up in Spring and slows down in the Fall, regardless of the general trend of the market. Don't know if it applies over here, but just a thought.




sept is the month much trumpeted by the bulls as the return to roaring form for the property market , though that prediction seems to not be materialising thus far


----------



## whathome

Excellent FinFacts article on the Irish Banking sector relating to the property market:

http://www.finfacts.com/irelandbusinessnews/publish/article_10007281.shtml

"On Monday, analyst Jonathan Pierce at Credit Suisse started new coverage of Irish banks, saying earnings forecasts don't reflect the impact of rising rates. "Loan growth could halve and impairment charges double by 08," he says. "Mortgage lending could fall to 15% per annum by 08 driven by reduced consumer demand and a slowdown in house price inflation." 

*"In Ireland, the ratio of private credit to GDP has reached 190%, the world's highest. "  *


----------



## thewatcher

whathome said:


> Excellent FinFacts article on the Irish Banking sector relating to the property market:
> 
> http://www.finfacts.com/irelandbusinessnews/publish/article_10007281.shtml
> 
> "On Monday, analyst Jonathan Pierce at Credit Suisse started new coverage of Irish banks, saying earnings forecasts don't reflect the impact of rising rates. "Loan growth could halve and impairment charges double by 08," he says. "Mortgage lending could fall to 15% per annum by 08 driven by reduced consumer demand and a slowdown in house price inflation."
> 
> *"In Ireland, the ratio of private credit to GDP has reached 190%, the world's highest. "  *


 
Just so i can sleep soundly tonight,i take it Northern Rocks irish arm is part of the UK market and has little to do with the irish banking system ?


----------



## macbri

The property crash is really beginning to bite in sydney.

Theres' an article in the sun herald today about a property that sold for 262k in 2003 that went for 95k at the weekend(obviously a mortagee sale)

Its' a massive drop in only 3 years


----------



## whathome

From Today's Sunday Times:

*Credit Suisse: Irish home loan growth to halve*

http://www.timesonline.co.uk/newspaper/0,,2769-2361085,00.html

"The broker said the likely impact would be two-fold: “First, an increase in unemployment could intensify a consumer slowdown; second, credit demand in the construction industry — a key driver or domestic credit growth — would fall.”


----------



## whathome

*BREAKING NEWS*....also reported on radio news today:

*House prices to level off as interest rates on the rise*

http://www.unison.ie/breakingnews/index.php3?ca=35&si=98526

"Sellers having been warned to adjust their expectations, as economists predict that the level of price inflation seen earlier in the year will not be matched this autumn.

The number of houses on sale in estate agents around Dublin is up 25 percent from last September.

These houses, combined with a number of properties which were withdrawn at auction over the summer have resulted in an over-supply of second hand homes in the capital."


----------



## minky

whathome said:


> *BREAKING NEWS....also reported on radio news today:*
> 
> *House prices to level off as interest rates on the rise*
> 
> http://www.unison.ie/breakingnews/index.php3?ca=35&si=98526
> 
> "Sellers having been warned to adjust their expectations, as economists predict that the level of price inflation seen earlier in the year will not be matched this autumn.
> 
> The number of houses on sale in estate agents around Dublin is up 25 percent from last September.
> 
> These houses, combined with a number of properties which were withdrawn at auction over the summer have resulted in an over-supply of second hand homes in the capital."




The last sentence is the most revealing, Looks like the vested interests are trying to talk down the panic with the miraculous soft landing scenario.



> "However, estate agents and economists emphasised the point that buyers should be preparing for a soft landing rather than a crash."



Would they please explain how this will happen? I'll believe it when I see it


----------



## Duplex

There is of course an intellectual dishonesty inherent in the soft landing scenario.  We are supposed to believe that the market will tick along at supply demand equilibrium, the economic equivalent of an elephant balancing on the head of a pin.   We are supposed to swallow hook line and sinker the fabrication that a previously speculative market will transform into one driven by fundamentals; when the fundamentals don't support current valuations. (2-3% net yields, stagnant rental inflation,  tens of thousands of empty  properties).   We are expected to be gullible and ignorant enough to ignore the countless lessons of history which show that all speculative markets crash.  We are considered so moronic that we will ignore the evidence that prices are falling in other nations where the run up in prices has been far less than in Ireland.   We are the most indebted nation on Earth, we rely heavily on selling our own land to ourselves to sustain our economy, we are at a turning point in this cycle of global economic growth, we have lost competitiveness, manufacturing jobs and the run of ourselves entirely.   Given these facts a hard landing might be the best case scenario.


----------



## thewatcher

Duplex said:


> There is of course an intellectual dishonesty inherent in the soft landing scenario. We are supposed to believe that the market will tick along at supply demand equilibrium, the economic equivalent of an elephant balancing on the head of a pin. We are supposed to swallow hook line and sinker the fabrication that a previously speculative market will transform into one driven by fundamentals; when the fundamentals don't support current valuations. (2-3% net yields, stagnant rental inflation, tens of thousands of empty properties). We are expected to be gullible and ignorant enough to ignore the countless lessons of history which show that all speculative markets crash. We are considered so moronic that we will ignore the evidence that prices are falling in other nations where the run up in prices has been far less than in Ireland. We are the most indebted nation on Earth, we rely heavily on selling our own land to ourselves to sustain our economy, we are at a turning point in this cycle of global economic growth, we have lost competitiveness, manufacturing jobs and the run of ourselves entirely. Given these facts a hard landing might be the best case scenario.


 
When you have people as walk2dewater said with the mentality of trying to "beat the rates" ie. pay the highest price possible for an asset just before interest rates increase,then i think it's safe to assume that there's plenty of gullible and ignorant people out there !.


----------



## Calina

minky said:


> Would they please explain how this will happen? I'll believe it when I see it



It's a delaying tactic, I think. Buyers appear to be in shorter supply than usual, so the few that are around, to get them to turn over money, you need to convince them that in fact, they won't do better than they are doing now if they wait. House prices tracking inflation (apparent soft landing) means that buying now is better than buying in three months time. 

The problem is...the asking prices in some cases seem to be falling and in a lot of cases appear to have crashed into a brick wall. Certainly in the areas where I would be looking, there is some indication that prices rises are off the table and price maintenance is now where it's at.


----------



## whathome

I was surprised to hear the over-supply breaking news story on the radio, you should be able to hear it again on FM104 at 2pm.  It's interesting to hear the popular media starting to run with the weakening property market story.


----------



## RiceCakes

Calina said:


> there is some indication that prices rises are off the table and price maintenance is now where it's at.



Definately entering the "sticky on the way down" phase in my opinion. 

My forecast - 

A) Dropping marginally until late November early Decemeber - by then reliable figures should start appearing for sales around now and the first true signs of a serious slowdown
B) A slightly sharper fall until March and April when we get the first "dead cat bounce" when those waiting for a fall dive in because they just missed out last spring and think its 2001 all over again, they HAVE to get in now that they can. Much celebration by home owners and economists saying we told you so, the soft landings were just what we predicted. Chamagne and cufflinks..
C) Those who just missed out last spring all now have places, others with a  longer term view recognise it for what it is and wait - hard times for home owners and sellers and the economy.
D) 2010+ ??? Recovery starts but is painfully slow as memories of the Great Property Bust of 2007 are still fresh in Joe and Jane Publics minds.


----------



## blindjustice

http://www.askaboutmoney.com/showthread.php?t=36468



http://www.askaboutmoney.com/showthread.php?t=36581

hmmmmmmmmmnnnnn!!!

I really dont think a crash will be a cause for celebration
there gonna be alot of unhappiness if it falls right through


----------



## beattie

blindjustice said:


> http://www.askaboutmoney.com/showthread.php?t=36468
> 
> 
> 
> http://www.askaboutmoney.com/showthread.php?t=36581
> 
> hmmmmmmmmmnnnnn!!!
> 
> I really dont think a crash will be a cause for celebration
> there gonna be alot of unhappiness if it falls right through


 
So it seems that the penny is finally dropping for many vendors. It will be interesting to see if they bite the bullet and accept bids that are marginally lower or try and ride it out in the hope of prices rising again. The next 2 months are going to be very interesting to observe.


----------



## Calina

By the same token, the insane property value inflation shouldn't have been a cause for celebration either because it is highly unlikely that it could continue. But if you said that to any interested parties, they did in fact pooh pooh you for it. 

Economically, a correction is pretty much necessary - the future economic health of the country probably depends on it this stage because we cannot continue borrowing money to the extent that we are presently doing. We need to stop mortgaging future earnings for current operating costs (ie we need to stop remortgaging to pay for cars and holidays). I won't celebrate to see people suffer, but I cannot abdicate them of responsibility for bringing themselves to that point either. The crash was foreseeable, has been foreseeable for years. Claiming it won't happen because it hasn't happened yet is ostrich mentality and it's what we've had for the past three or four years. The unhappiness caused by a crash has to be seen in the context of people making their own decisions. The only proviso I have is that I'm not entirely sure that the pre-crash period of feeling wealthy was matched by a corresponding rise in happiness either.


----------



## Jeanne

Calina said:


> By the same token, the insane property value inflation shouldn't have been a cause for celebration either because it is highly unlikely that it could continue. But if you said that to any interested parties, they did in fact pooh pooh you for it.
> 
> Economically, a correction is pretty much necessary - the future economic health of the country probably depends on it this stage because we cannot continue borrowing money to the extent that we are presently doing. We need to stop mortgaging future earnings for current operating costs (ie we need to stop remortgaging to pay for cars and holidays). I won't celebrate to see people suffer, but I cannot abdicate them of responsibility for bringing themselves to that point either. The crash was foreseeable, has been foreseeable for years. Claiming it won't happen because it hasn't happened yet is ostrich mentality and it's what we've had for the past three or four years. The unhappiness caused by a crash has to be seen in the context of people making their own decisions. The only proviso I have is that I'm not entirely sure that the pre-crash period of feeling wealthy was matched by a corresponding rise in happiness either.


 
Very well said. Couldn't agree more. The people now having panic attacks because property prices are heading south will just have to accept that they are directly responsible for the insane proptery bubble we all found ourselves in! Pressure or no pressure, they bought at ridiculously inflated prices until the whole thing spiraled out of control.

A correction is inevitable, it will hurt for a while but in the end sanity will prevail. Doubt lessons will be learned, but there you go.


----------



## whathome

Austin Hughes from IIB was on Newstalk this morning trying to inject calm into the weakening property market. He was tut-tutting about the "sensationalist" stories identifying a weaker market in the press over the past week or so, mentioned the Tribune in particular. He said that there were some positive property stories but they were not given enough attention by the media. As usual he was talking up the market saying how prices were going to keep rising in the face of more interest rate hikes.

It was a real love-in with the presenter who even suggested that talk of lower prices will cause people to jump in immediately creating more price rises???? Austin agreed!


----------



## beattie

whathome said:


> Austin Hughes from IIB was on Newstalk this morning trying to inject calm into the weakening property market. He was tut-tutting about the "sensationalist" stories identifying a weaker market in the press over the past week or so, mentioned the Tribune in particular. He said that there were some positive property stories but they were not given enough attention by the media. As usual he was talking up the market saying how prices were going to keep rising in the face of more interest rate hikes.
> 
> It was a real love-in with the presenter who even suggested that talk of lower prices will cause people to jump in immediately creating more price rises???? Austin agreed!


 
Yes it was an incredible interview, it was very funny to hear him blame some unrealistic expectations of sellers at the moment. I have never heard him so worried in an interview. I would have thought Newstalk would have had someone like Jill Kerby on to provide some counterbalance. He also stated that people who have been sitting on the sidelines for a while might now enter the market which would further bolster it....


----------



## whathome

beattie said:


> Yes it was an incredible interview, it was very funny to hear him blame some unrealistic expectations of sellers at the moment. I have never heard him so worried in an interview. I would have thought Newstalk would have had someone like Jill Kerby on to provide some counterbalance. He also stated that people who have been sitting on the sidelines for a while might now enter the market which would further bolster it....


 
They know that if potential buyers realise that prices might not go up, they may hold off making a purchase. This would definitely cause the market to collapse so they have to inject talk of soft landings and prices rising at a "sustainable" pace to keep it propped up in some way. The thing is - these people have been talking up the market for years so the effect of continued interviews like this will be neutral. Talk of a weaker market in the press IS new and that will definitely have an effect on sentiment.


----------



## SHARP

Calina said:


> By the same token, the insane property value inflation shouldn't have been a cause for celebration either because it is highly unlikely that it could continue. But if you said that to any interested parties, they did in fact pooh pooh you for it.
> 
> Economically, a correction is pretty much necessary - the future economic health of the country probably depends on it this stage because we cannot continue borrowing money to the extent that we are presently doing. We need to stop mortgaging future earnings for current operating costs (ie we need to stop remortgaging to pay for cars and holidays). I won't celebrate to see people suffer, but I cannot abdicate them of responsibility for bringing themselves to that point either. The crash was foreseeable, has been foreseeable for years. Claiming it won't happen because it hasn't happened yet is ostrich mentality and it's what we've had for the past three or four years. The unhappiness caused by a crash has to be seen in the context of people making their own decisions. The only proviso I have is that I'm not entirely sure that the pre-crash period of feeling wealthy was matched by a corresponding rise in happiness either.


 
Excellent post and well said!


----------



## whathome

Calina said:


> We need to stop mortgaging future earnings for current operating costs (ie we need to stop remortgaging to pay for cars and holidays).


 
Absolutely - you can see from this piece on rte.ie today that first time buyers are leading the growth in re-mortgaging!
http://www.rte.ie/business/2006/0918/mortgage.html

"Research by IFG Mortgages shows that more people than ever are re-mortgaging. According to the internal survey by IFG, first time home owners are leading the growth in the sector. 

The research also showed that the size of the average re-mortgage amount has gone up by 38% in the last 12 months"


----------



## Jister

I happened to be flicking through the 1992 Guinness book of records over the weekend and in 1992 somewhere in Tokyo had the worlds most expensive real estate prices. I wouldn't be suprised if the price in the same place today is less than it was in 1992. Nor would I be suprised if somebody told me that Dublin has the worlds highest real estate prices in 2006........


----------



## whathome

*New Build Price Drop*

These apartments in Donnybrook were launched last week and the price has been dropped already. 1 bed units were launched at €640,000 and they have been reduced to €630,000. 2 beds units were launched at €880,000, now reduced to €860,000.

Launch article:
http://www.unison.ie/irish_independent/stories.php3?ca=303&si=1685101&issue_id=14621

1 Bed, reduced from €640k to €630k
[broken link removed]=

2 Bed, reduced from €880k to €860k
[broken link removed]=


----------



## ninsaga

whathome said:


> *New Build Price Drop*
> 
> These apartments in Donnybrook were launched last week and the price has been dropped already. 1 bed units were launched at €640,000 and they have been reduced to €630,000. 2 beds units were launched at €880,000, now reduced to €860,000.
> 
> Launch article:
> http://www.unison.ie/irish_independent/stories.php3?ca=303&si=1685101&issue_id=14621
> 
> 1 Bed, reduced from €640k to €630k
> [broken link removed]=
> 
> 2 Bed, reduced from €880k to €860k
> [broken link removed]=



...could they not have been pricing errors? Did you contact the EA & ask why as a matter of interest?


----------



## whathome

They're not pricing errors, we noticed these at higher prices during the summer. Here's a link to the old prices on myhome:



4th and 5th in the list. Click through and you'll see the new prices:
€640k reduced to €630k
€880k reduced to €860k


----------



## SHARP

whathome said:


> Absolutely - you can see from this piece on rte.ie today that first time buyers are leading the growth in re-mortgaging!
> http://www.rte.ie/business/2006/0918/mortgage.html
> 
> "Research by IFG Mortgages shows that more people than ever are re-mortgaging. According to the internal survey by IFG, first time home owners are leading the growth in the sector.
> 
> The research also showed that the size of the average re-mortgage amount has gone up by 38% in the last 12 months"


 
This was on Today FM news aswell along with the comment that they were re-mortgaging within the first year to re-furnish the house and buy cars.

I believe I mentioned this earlier in the thread and that led to others questioning it. Do they believe it now?


We are built up for a large fall......


----------



## SHARP

Think of this article from the UK and then think of the same couple who have bought a 350k house in Ireland:

http://www.timesonline.co.uk/article/0,,2-2355623,00.html


----------



## fatmanknows

ninsaga said:


> ...could they not have been pricing errors? Did you contact the EA & ask why as a matter of interest?


 
Your probably right, they are pricing errors.............by the developer, even with the new prices they still appear to contain pricing errors. It may take the middle of 2007 before the price errors are corrected.


----------



## ninsaga

No.. the reason I asked was because Whthome stated that these were launched last week & then only one week later there was a change...seemed far to quick to adjust based on sentiment alone.

ninsaga


----------



## ninsaga

SHARP said:


> Think of this article from the UK and then think of the same couple who have bought a 350k house in Ireland:
> 
> http://www.timesonline.co.uk/article/0,,2-2355623,00.html



Looks like the mortgage broker screwed them over more big time.....their quote "“Looking back, there was no reason why the broker did not recommend a mortgage with a normal high street bank as we had no major debts.

“It also became clear, when we were in difficulty, that the mortgage broker had no proper record of our earnings. Unexplained charges kept appearing. I wish we had never bought it in the first place.”"


----------



## soma

whathome said:


> Absolutely - you can see from this piece on rte.ie today that first time buyers are leading the growth in re-mortgaging!
> http://www.rte.ie/business/2006/0918/mortgage.html



I often thought that a factor which _may_ have somewhat limited the carnage of a property crash here would be the fact that Irish people hadn't treated their houses as giant ATMs, to the same extent that the americans have. Now I'm not so sure..


----------



## whathome

ninsaga said:


> No.. the reason I asked was because Whthome stated that these were lainced last week & then only one week later there was a change...seemed far to quick to adject based on sentiment alone.
> 
> ninsaga


 
When prices rise rapidly some people nod and smile smugly, it's never questioned.  

As soon as prices are seen to fall - Oh My God, it must be a pricing error!


----------



## redo

ninsaga said:


> No.. the reason I asked was because Whthome stated that these were lainced last week & then only one week later there was a change...seemed far to quick to adject based on sentiment alone.
> 
> ninsaga


My thoughts too


----------



## whathome

redo said:


> My thoughts too


 
Yep - they've been priced higher for some time and then re-launched last Friday week at those prices.  So the price drop is within the last week.  You can see from the myhome listing vs. cache that it is a genuine price drop.


----------



## Calina

Sounds like they're not selling if they had to be relaunched. 

I'm getting the impression that price drops, such as they are turning up here, are in a specific price bracket, namely the 500-850K bracket.


----------



## beattie

Calina said:


> Sounds like they're not selling if they had to be relaunched.
> 
> I'm getting the impression that price drops, such as they are turning up here, are in a specific price bracket, namely the 500-850K bracket.


 
In percentage terms it isn't that much of a drop, I would have thought that the developers would have to  have done a bit better than that to get someone to bite. I am not sure that there will be any saps who will go for this if they had been reading or listening to any of the negative reports over the weekend.


----------



## Savvy

I'm monitoring asking prices on daft for a few towns in Laois(about 40 properties in total) for a few weeks now.
No price drops but this morning I see one has an asking price 40K below last weeks price(can't find a cache entry for it)from 475k to 435k. An other has a small 5K drop(265 to 260)-again can't find a cache entry for it.
I'll add links when I can find the cache entries.


----------



## whathome

Here's one in Laois that dropped in the last while:

Old price €380,000 (cached July 13th)


New Price €365,000
www.daft.ie/11095


----------



## AJ1

a house in my estate in bray (3 bed mid terrace) has dropped from 475k initially (about a month ago) to 440k.


----------



## Savvy

I've only been tracking numbered houses,they're easier to work with


----------



## kerrybull

History has a habit of repeating itself, especially economic history. What has happened in Japan should be seen as a warning. I visited Tokyo around six years age at the height of their property crash and was amazed at the amount of economic activity. The port area was a hive of productivity exporting goods to the four corners of the globe. Any quick look around our own houses would see the strength of that economic power and still their property market crashed and wiped out millions of investers. Take a quick look around the house today and see what Irish goods you have in your house, apart from the odd pack of Barry's Tea, we as a nation are not producing or exporting enough Irish owned products. If Japan with all it's economic power could suffer a housing market crash, by allowing insanity to become part of economic orthodxy, then we in little Ireland could suffer far far worse.


----------



## room305

Noticed quite a few houses for sale in Glasnevin on the way into work today. Three or four "For Sale" signs on houses right beside each other on Ballymun road. There was only one there on Friday.

Even my father, a property perma-bull, has decided to hold off for six months or so on a planned purchase. As little as two weeks ago he was blithely dismissing any concerns I had about the market.

I think that sentiment has definitely changed which makes me more than a little nervous for my impending sale - my house goes on the market this week.


----------



## Jister

Barrys Tea is imported too!


----------



## johnjoe101

Hi

A 3 bed semi d in bray (mature estate - would have been considered a starter for parents but now is considered an upgrade!) was on the market for months and was recently taken off the market. they didnt even attempt to lower the price. It was bought 3 years ago for approx 385K and they were looking for 725k not surprised it didnt sell. however another house in same estate sold in last autumn selling season for 640k. outragious growth for a 2.5 yr period.

Keeping my eye on another outragious price 1.1m for average detached house in similar estate nearby in bray. its been on the market for months also no movement in price yet.


----------



## fatmanknows

[broken link removed]

[FONT=verdana,arial]*Corkery to lead new Dell facility*[/FONT][broken link removed]
I scent something very ominous for the brethern in Limerick. I'd hold off on tapping up any mortgages for a while.


----------



## kerrybull

Reality Bites for all Irish workers


----------



## whizzbang

Jister said:


> Barrys Tea is imported too!



Since when did we start _growing_ tea in Ireland?! 

Its a pity that the first example of Irish manufacturing we think of is only a re-packaging and marketing business!


----------



## whathome

Looks like builders are making a real push to get developments on the market ASAP.  Anecdotal evidence of them working until after 10pm and starting before 7AM.  Poster comments that they all seem to be under pressure at the moment:


----------



## Calina

whathome said:


> Looks like builders are making a real push to get developments on the market ASAP. Anecdotal evidence of them working until after 10pm and starting before 7AM. Poster comments that they all seem to be under pressure at the moment:



A 7am start used to be normal when I was living in Swords while Applewood was being built. I don't remember them going on till 10pm though.


----------



## SHARP

whathome said:


> Looks like builders are making a real push to get developments on the market ASAP. Anecdotal evidence of them working until after 10pm and starting before 7AM. Poster comments that they all seem to be under pressure at the moment:


 
Might also have something to do with the light fading fast with winter approaching too......


----------



## Calina

SHARP said:


> Might also have something to do with the light fading fast with winter approaching too......



But it's dark by 7.30, 8, already...


----------



## beattie

whathome said:


> Looks like builders are making a real push to get developments on the market ASAP. Anecdotal evidence of them working until after 10pm and starting before 7AM. Poster comments that they all seem to be under pressure at the moment:


 
I wouldn't blame them for trying to get them on the market ASAP. If I were a shareholder in one of these companies I would hope they could bank as much money as possible before they have to start throwing in the kinds of perks that they are doing in the US in an attempt to offload them


----------



## whathome

Calina said:


> But it's dark by 7.30, 8, already...


 
Yep - it was mentioned on this thread previously by someone saying they had heard that builders/developers were in a rush to get projects moving ahead of continued interest rate rises.

If I was a developer, I would want my project on the market yesterday! Edit: Well April just gone really


----------



## Savvy

Extract from todays IT regarding SD changes they want

The Institute of Professional Auctioneers and Valuers recently said that the tax thresholds must be widened in the December budget to ease the pressure on homebuyers struggling with higher prices and rising interest rates.


----------



## CelloPoint

whathome said:


> Yep - it was mentioned on this thread previously by someone saying they had heard that builders/developers were in a rush to get projects moving ahead of continued interest rate rises.
> 
> If I was a developer, I would want my project on the market yesterday! Edit: Well April just gone really



Yeah, the point about builders being in a mad rush to finish their developments has been made before. I guess the longer it takes them to build the development, the greater their risk exposure.

Some observations of mine in relation to this rush: poor quality building work and a huge temporary demand for labour.


----------



## Calina

Ireland.com Journalist said:
			
		

> The Institute of Professional Auctioneers and Valuers recently said that the tax thresholds must be widened in the December budget to ease the pressure on homebuyers struggling with higher prices and rising interest rates.



I don't think you're allowed to quote entire articles here. 

This is the interesting bit. Taxes go (or are supposed to go) to the greater good. The greater good would be served by prices coming down, but a reduction in stamp duty for FTBs and indeed, most taxation measures to improve the lot of poverty stricken FTBs has always resulted in higher prices and therefore no impact on the amount of money they have to cough up. 

I'd have more faith in the IPAV if they recognised that the gap between salary inflation and house price inflation is unsustainable.


----------



## Savvy

..


----------



## Calina

Interesting post on Investment:

Would be interesting to see if this does come in to play.


----------



## rgfuller

whathome said:


> Here's one in Laois that dropped in the last while:
> 
> Old price €380,000 (cached July 13th)
> 
> New Price €365,000


 
However here is one in Dublin that has increased in the last few months...

Old Price €418,000 (from April) - 3rd one down.


New Price €495,000 (today)
[broken link removed]=


----------



## whathome

rgfuller said:


> However here is one in Dublin that has increased in the last few months...
> 
> Old Price €418,000 (from April) - 3rd one down.
> 
> 
> New Price €495,000 (today)
> [broken link removed]


 
Yep - I know about this one, it's been for sale since the start of the year, and I can see why - it's absolutely tiny and stuck at the end of a row right beside a very busy road. The vendor has changed auctioneer and raised the price in an attempt to renew interest! I've seen a few cases where a house has not sold but the price has risen - generally it's where it had been sale agreed at a higher figure but the buyer backs out and the vendor is loath to put it back on at the original price.


----------



## thewatcher

Calina said:


> Interesting post on Investment:
> 
> Would be interesting to see if this does come in to play.


 
In my opinion this is the only thing they can do now,the second hand market is going to collaspe first taking everything else with it.
By doing something for owner occupiers of secondhand properties it will at least give some buyoancy to the upper end of that market because at the moment the stampduty rates are just crazy.
The builders are not going to like this though as there will be far less competition for new builds.
Doing something for FTB's now i think is irrelevant as most of them have already jumped in early to "get on the ladder".

The limit's are the key if they set ridiculous levels,like they did for FTB's buying secondhand properties,this will only serve to increase prices up to the limits,they have to be realistic about the levels.They can't try and keep the market going and get their pound of flesh at the same time.


----------



## Savvy

whathome said:


> Yep - I know about this one, it's been for sale since the start of the year, and I can see why - it's absolutely tiny and stuck at the end of a row right beside a very busy road. The vendor has changed auctioneer and raised the price in an attempt to renew interest! I've seen a few cases where a house has not sold but the price has risen - generally it's where it had been sale agreed at a higher figure but the buyer backs out and the vendor is loath to put it back on at the original price.



Have to say I thought that the size was a misprint. A detached house but less than 900sq feet, shocking really!


----------



## whathome

Savvy said:


> Have to say I thought that the size was a misprint. A detached house but less than 900sq feet, shocking really!


 
I've driven past it and it looks really weird.  To me it looks like the owner might have had a nice house to begin with but left it in the dryer too long and it shrunk.


----------



## delboy159

Could it be that this was a side garden of the house beside it and the owner built on his plot and created a new house - hence the 32A...
I could be off the mark on that though - just guessing.


----------



## whathome

delboy159 said:


> Could it be that this was a side garden of the house beside it and the owner built on his plot and created a new house - hence the 32A...
> I could be off the mark on that though - just guessing.


 
You're correct - when I saw it first I couldn't believe that they had been given planning permission. It doesn't even come close to matching the style of the original house beside it and it's shoehorned into the garden.


----------



## Jister

delboy159 said:


> Could it be that this was a side garden of the house beside it and the owner built on his plot and created a new house - hence the 32A...
> I could be off the mark on that though - just guessing.


 
Thats what I thought too when I saw the picture.


----------



## redo

rgfuller said:


> However here is one in Dublin that has increased in the last few months...
> 
> Old Price €418,000 (from April) - 3rd one down.
> 
> 
> New Price €495,000 (today)
> [broken link removed]=



From the add,

              This is a *stunning *and unique 3 bedroom detached family home presented to the market in excellent condition.

*stun* (st[broken link removed]n)  Pronunciation Key [broken link removed]  [broken link removed] 
_tr.v._ *stunned,* *stun·ning,* *stuns *
 To daze or render senseless, by or as if by a blow.
 To overwhelm or daze with a loud noise.
 To stupefy, as with the emotional impact of an experience; astound. See Synonyms at daze.
 _n._ A blow or shock that stupefies.


----------



## Firefly

Heard on the news that the PDs were talking about introducing measures for FTBs to pay for Stamp Duty over the life of the mortgage instead of u front...what muppets...what do you think FTBs are going to do when the hear this??? 

WAIT

Firefly


----------



## whathome

From Reuters:

*ECB sources-Hikes likely next year, possibly over 4 pct*

http://today.reuters.com/news/artic...toryID=nLAE000214&imageid=&cap=&from=business

"The European Central Bank expects to continue raising interest rates in 2007, possibly above 4 percent"

Above 4%?  The market is already starting to suffer at 3%, another 1%+ would really hurt.


----------



## Duplex

The US slowdown is starting to hit employment in the real estate sector. Their run lasted five years.  




> NEW YORK (Reuters) - They are jumping ship or receiving the pink slip. America's real estate agents and mortgage lenders, that is.
> Now that the glory days of the most recent U.S. housing market are over, its deterioration is taking a toll on employees who profited from its record-breaking five-year run.
> Real estate industry job cut announcements totaled 3,033 year-to-date through August, a nearly 96 percent surge over the same period in 2005, according to Challenger, Gray & Christmas, Inc., an employment consulting firm based in Chicago.
> The mortgage lending industry has not fared much better, with layoff announcements totaling 8,513 during the same period, a rise of over 70 percent year-over-year, according to data provided by the company.


http://news.moneycentral.msn.com/provider/providerarticle.asp?feed=OBR&Date=20060917&ID=6027640


----------



## kerrybull

Duplex said:


> The US slowdown is starting to hit employment in the real estate sector. Their run lasted five years.
> 
> 
> http://news.moneycentral.msn.com/provider/providerarticle.asp?feed=OBR&Date=20060917&ID=6027640


 
Everyone knows that the US is still the main engine for the world economy, what happens there will have major knock-on-consequences for the world economy and our own economy. I firmly believe that the bubble here has already burst, but the reality is that we will not wake up to hear this news on the radio or read it in our press. The housing market does not work in this way. The same factors that led to the explosion of prices will in fact lead to the inevitable collaspe. The lemming like rush to buy will be followed by the lemming like surge to sell. The evidence is all around us.


----------



## Eurofan

kerrybull said:


> The lemming like rush to buy will be followed by the lemming like surge to sell. The evidence is all around us.



I'm convinced the above will follow through quite quickly in the next 6 months or so. Although for the most part i reckon W2TW arguements have a lot of merit i don't think the 'Irish' urge to own their own property will make the down cycle as sticky as it often is in property declines.

The vast majority of people i know who've bought in the last few years weren't buying a _home_ they were buying an investment, even if it was their ppr that was still how they viewed it.

If anything is alive and well in the Irish mentality it is the 'cute hoore' attitude that will make a lot of investors/speculators head for the doors in the next few months in the hope that they will get out while the going is good.

When the market turns, as it appears to be already, i suspect we'll all be shocked by just how quickly.


----------



## bearishbull

I think less people are keeping their old house as an "investment/pension" when they are trading up. Loads of people were doing this is last few years which was reducing supply. Rates are rising and people are seeing the cost of holding their old house rising while rents arent great and everyone's(including estate agents banks etc) talking  about a "slowdown".


----------



## kerrybull

Ireland's property market has not been driven by professional investors. We all know the nurse, teacher, policeman, office worker, who have dipped into the market and own more that one property. The evidence is again all around us that they have used the capital appreciation of their property as a means to live a lifestyle that would have previously been beyond them. Now is the time when we see these rather inexperienced investors trying to sell their investment properties to pay back much of their lifestlye debt before the market turns. As in life there will be winners and loosers and those that leave it too late may well loose more than anyone has previously imagined.


----------



## ivuernis

Haven't seen this one posted today... 

PDs to consider plan to scrap stamp duty

Who thinks this is a pre-election spin or a serious consideration on the PDs part? MacDowell is launching his opening salvos as PD leader saying his is looking to increase the number of PD seats in the house. 

Any comments?


----------



## Calina

kerrybull said:


> Now is the time when we see these rather inexperienced investors trying to sell their investment properties to pay back much of their lifestlye debt before the market turns.



This hasn't started happening yet - but what I suspect is happening is that new entrants to that market are thin on the ground by comparison to previous year. 

I'd also add that lifestyle funding equity extraction is not limited to would-be investors. 

Regarding non-chaining - there seems to be some anecdotal evidence of more people selling on their first property at this stage. I don't know if that's "possible top of the market" related or "just can't fund it" related. I guess a combination of the two.


----------



## Calina

ivuernis said:


> Haven't seen this one posted today...
> 
> PDs to consider plan to scrap stamp duty
> 
> Who thinks this is a pre-election spin or a serious consideration on the PDs part? MacDowell is launching his opening salvos as PD leader saying his is looking to increase the number of PD seats in the house.
> 
> Any comments?



Yes. Stamp duty is payable on completion of a contract, and currently dependent on the value of the contract (give or take some messing with VAT in some cases and exclusions depending on floor area and previous ownership). If they are serious about dealing with stamp duty head on, they will make it a standard fixed charge - not linked to the value of the contract. 

Instead, they are going to fluter around.


----------



## room305

ivuernis said:


> Who thinks this is a pre-election spin or a serious consideration on the PDs part? MacDowell is launching his opening salvos as PD leader saying his is looking to increase the number of PD seats in the house.



I think there is a good chance this could have an unintended effect on the housing market. It will make more FTBs wait at a time when the market needs them to commit if it is to avoid nosediving as inventory mounts.


----------



## ivuernis

room305 said:


> I think there is a good chance this could have an unintended effect on the housing market. It will make more FTBs wait at a time when the market needs them to commit if it is to avoid nosediving as inventory mounts.


 
I think it's happening already, though this will add to it. I think it's going to be a very quiet Q4 in the property market.


----------



## kerrybull

Political efforts to intervene in the market could well cause the market to falter as public confidence may view this as an artificial attempt to talk up the market. Our economic system is based on confidence it is a house of sand and the real danger is the rising tide of debt.

Debt will do for Ireland, as sure as the astroids did for the dinasours.


----------



## Afuera

room305 said:


> I think there is a good chance this could have an unintended effect on the housing market. It will make more FTBs wait at a time when the market needs them to commit if it is to avoid nosediving as inventory mounts.



Good point. Rumours of the scrapping of Stamp Duty next December could certainly cause a lull in demand until then. (By which time interest rates will almost certainly be up another half point)

Other talk about anti-speculative measures and a possible return of CGT to 40% could also encourage a lot of investors to get out of the market quickly before all these changes come in.

Could the interfering politicians be helping to set the market up for a double-whammy (low demand, high supply)?


----------



## whizzbang

kerrybull said:


> Political efforts to intervene in the market could well cause the market to falter as public confidence may view this as an artificial attempt to talk up the market. Our economic system is based on confidence it is a house of sand and the real danger is the rising tide of debt.
> 
> Debt will do for Ireland, as sure as the astroids did for the dinasours.



Is it better that the goverment does something to try and control it now or should they just leave it? surely popping it earlier is better than popping it later? no matter how ham fisted the approach is?


----------



## Howitzer

whizzbang said:


> I sit better that teh goverment does somethign to try and control it now or should they just leave it? surely popping it earlier is better than popping it later? no matter how ham fisted the approach is?


 
But they're not looking to pop it. They have yet to recognise that the problem is the actual pricing. They're looking to increase liquidity in the market by making it easier for FTBs to buy and STBs to trade up, ie: the biggest factor still isn't getting the credit, it's getting the cold hard cash required for the stamp duty. Reminds me of Baltimore doing a 4 for 1 share split about a month before their price started it's terminal decline. In reality it'll make it easier for the last clutch of desperados to get on the ladder before it, probably, keels over.


----------



## kerrybull

Our government no longer controls our interest rates. If the French and Germans believe that Europe needs interest rates of 4% then we will have interest rates of 4% If they have to go higher, then they will. The sad fact is that Ireland and our over inflated property market will count for little in the decisions that have to be made by our European cousins. They have given us fair warning and the reality is that our government can do very little to alter the course that we are now on.


----------



## whizzbang

kerrybull said:


> Our government no longer controls our interest rates. If the French and Germans believe that Europe needs interest rates of 4% then we will interest rates of 4%



I would love to know how many Irish mortgage holders know this? that could be a scarey statistic.


----------



## Calina

whizzbang said:


> Is it better that the goverment does something to try and control it now or should they just leave it? surely popping it earlier is better than popping it later? no matter how ham fisted the approach is?



Clearly popping it earlier is better than popping it later. But they're not looking to do that. They're looking to prevent it from popping at all, which means the correction will be longer drawn out and far more painful. I realise that there are a lot of people screaming that the fundamentals are okay, and look at employment rates and immigration and all that. But: house prices are rising faster than salaries are, are now between 11 and 12 times the average salary and that is not a sustainable situation to be in. Delaying a correction is only delaying the inevitable.


----------



## tententwenty

Calina said:


> They're looking to prevent it from popping at all, which means the correction will be longer drawn out and far more painful.


If McDowells plan goes ahead, there will be a slowdown prior to an election, then the mother of all dead cat bounces directly afterwards, for which he will take due credit as well as reaping the benefits at the voting booths. As cynical and self interested political plans go, its pretty good.


----------



## beattie

whizzbang said:


> I would love to know how many Irish mortgage holders know this? that could be a scarey statistic.


 
I would hazard a guess that very few indeed would  be aware of this and then there are others who are in denial about it. It is going to get very messy


----------



## TallSpoon

fatmanknows said:


> [broken link removed]
> 
> [FONT=verdana,arial]*Corkery to lead new Dell facility*[/FONT][broken link removed]
> I scent something very ominous for the brethern in Limerick. I'd hold off on tapping up any mortgages for a while.



I wouldnt be too pessimistic. I believe that the Polish facility is to service growing demand in Russia and Eastern Europe. If there is going to be a big demand for PCs in these countries then why build and transport the goods from Ireland at huge cost.


----------



## bearishbull

TallSpoon said:


> I wouldnt be too pessimistic. I believe that the Polish facility is to service growing demand in Russia and Eastern Europe. If there is going to be a big demand for PCs in these countries then why build and transport the goods from Ireland at huge cost.


 
That plant is twice the size of here, why build pc's for europe middle east and africa in ireland for x when you can build them in poland for x divided by 3???? Dell will go eventually, they may leave a small operation here along with some customer service to take advantage of tax here(thats if tax benefits in poland are'nt better),but they will definetely go within 5-10 years.


----------



## camel44

Check out the fact that AIB is selling or has sold a large part of its property portfolio and then leased it back.

It would only do this if it thought the property market was at the top or close to the top.  And the banks know a lot more than we do.  I believe it has sold one building for 350m and is leasing it at 11m per year.  That is a 3% lease cost.  10 years ago lease costs were 12.5% of the retail value of the property i.e. got the value of the property back in 8 years.  The AIB deal gets it back in 33 years - which is a good deal for the bank.


----------



## kerrybull

This is more evidence of the reality of our property boom. The smart money does not get caught.


----------



## extopia

camel44 said:


> the banks know a lot more than we do.



You're giving them too much credit. They don't really know what's going to happen, but they have a lot of skin in the game and nobody makes a profit till they sell. So they're cashing in some chips, fair enough.


----------



## Maine

What appears beyond doubt to me is that there has in the past 3 months been a shift in sentiment and that it is now being far more widely reported in the media.  The tribune was quite specific about it yesterday.

Supply and rising interest rates are impacting. Trading uppers are no longer keeping but selling and those that did this over past few years are now also selling.

Credit Suisse reports will worry the banks....they need to keep getting access to cheap funds.


----------



## blindjustice

Calina said:


> By the same token, the insane property value inflation shouldn't have been a cause for celebration either because it is highly unlikely that it could continue. But if you said that to any interested parties, they did in fact pooh pooh you for it.
> 
> Economically, a correction is pretty much necessary - the future economic health of the country probably depends on it this stage because we cannot continue borrowing money to the extent that we are presently doing. We need to stop mortgaging future earnings for current operating costs (ie we need to stop remortgaging to pay for cars and holidays). I won't celebrate to see people suffer, but I cannot abdicate them of responsibility for bringing themselves to that point either. The crash was foreseeable, has been foreseeable for years. Claiming it won't happen because it hasn't happened yet is ostrich mentality and it's what we've had for the past three or four years. The unhappiness caused by a crash has to be seen in the context of people making their own decisions. The only proviso I have is that I'm not entirely sure that the pre-crash period of feeling wealthy was matched by a corresponding rise in happiness either.



good post, i said before that a crash wont be a cause for celebration, reading through the last few threads about some of the prices asked for really unspectacular houses even with the drops mentioned I couldnt bring myself to pay that much for them (provided I was rich enough) even if I was a MILLIONAIRE! Its hard to have sympathy for some the architects of this situation. (before you all go blah blah blah about blaming other people I state I KNOW its not just OTHER peoples fault!) but I AM a Vampire and I do enjoy some blood once in a while.



kerrybull said:


> Political efforts to intervene in the market could well cause the market to falter as public confidence may view this as an artificial attempt to talk up the market. Our economic system is based on confidence it is a house of sand and the real danger is the rising tide of debt.
> 
> Debt will do for Ireland, as sure as the astroids did for the dinasours.



These Bungling politicians! Do they have a clue!
Some people on this website could run the country ALOT better!
You bunch seem to be alot more tuned in!


----------



## dochasach

Jister said:


> I happened to be flicking through the 1992 Guinness book of records over the weekend and in 1992 somewhere in Tokyo had the worlds most expensive real estate prices. I wouldn't be suprised if the price in the same place today is less than it was in 1992. Nor would I be suprised if somebody told me that Dublin has the worlds highest real estate prices in 2006........



Jister, my back of the envelope calculation says we're close:

* 	  	 Let's sell up the entire country! 	      *

        	          	       During the peak of Japan's property bubble, the land under Tokyo's imperial palace was worth more than California and it would have been theoretically possible to "sell up" the island of Japan and buy the entire United States. Who could fault the Japanese from buying up California golf courses and large chunks of Hawaii and Manhattan They could've bought the whole country!

 Land in Ireland has gone for as much as 20m/acre. Swaths of America can be had for well under 100,000 euro/acre, so shouldn't we consider selling Ireland? At 20%/year appreciation, it's only a matter of time before all land here is worth 20m/acre.  So selling the entire 17 million acre Irish republic would put 340 trillion Euros in our pockets. With that, we should be able to buy 3.4 billion acres of the U.S. Let's go shopping. Well look at that, the entire U.S. is only 2.26 billion acres, we could buy the whole lot and we'd have money left over to buy something else, maybe throw in Germany or England._

*Note:* When buying the U.S., frugal buyers should either avoid big cities in California, the Northeast and Florida or wait until the property there has depreciated sufficiently.
_
_Just a tiny place, how about the land my cloak will cover?   
                           -- Saint Bridgid_
_
_[broken link removed]


----------



## kerrybull

I do not want to bore anyone or scare them but there is a new book out by Adam Tooze " The wages of Destruction" it is an excellent economic history of Nazi Germany.~

We all know that history has a habit of repeating itself and one of the few lessons of history that we humans have seemed to grasp is that we do not learn anything from history.

Well what is frightening in this book is to learn the relationship between government and inflation and the deadly consequences that follow.

We may well be living in 1928 again, living it up before the bubble really bursts.

One does not have to be a student of history to understand how fragile the democratic system is. Hitler was voted into power, to bring order for the middle class.

War is the close cousin of inflation, and Uncle Sam may well find itself in a situation where a strike on Iran may make as much sense as invading Poland did way back in September 1939.

We in Ireland spend so much time looking at ourselves when our fate both economic and possibly even more will be decided by the suits in the White House.


----------



## blindjustice

kerrybull said:


> Well what is frightening in this book is to learn the relationship between government and inflation and the deadly consequences that follow.
> 
> We may well be living in 1928 again, living it up before the bubble really bursts.
> 
> One does not have to be a student of history to understand how fragile the democratic system is.




How VERY TRUE
I think people think your off the wall when things like this are brought up
HOWEVER did ye all hear about BUDAPEST TODAY??????????????

RIOTS BECAUSE THE GOVERNMENT LIED ABOUT THE ECONOMY PEOPLE TRYING TO STORM GOVT BUILDINGS ETC (how would Bertie feel about that?)


----------



## tententwenty

kerrybull said:


> I
> War is the close cousin of inflation, and Uncle Sam may well find itself in a situation where a strike on Iran may make as much sense as invading Poland did way back in September 1939.


Settle down, relax. Its not quite as bad as it seems. Yes, a lot of people will be badly struck by a property downturn. Not, however, the majority. The job situation isn't so bad either. The smart money (pharmas) export their produce to Mexico first, then ship it north. They aren't going to get nabbed by the IRS  for taking advantage of the Irish corporate tax system. There will be severe effects, but nothing apocalyptic. The Irish economy may not export a great deal, but it is sufficiently diversified to withstand any single sector knock on the head.


----------



## thewatcher

Ah here,it's not the end of the world now.
Those that have prepared for the downturn will be fine,those that have their ppr may not be able to move as quickly as they thought,those that have been down the pub or at the dinner party boasting about their recently acquired investment property especially if they have released equity to buy it are going to get burned bigtime.
But in the long run a correction is the best thing that can happen because ireland is simply on an unsustainable path at present it simply cannot be put any better than 



Calina said:


> We need to stop mortgaging future earnings for current operating costs (ie we need to stop remortgaging to pay for cars and holidays). I won't celebrate to see people suffer, but I cannot abdicate them of responsibility for bringing themselves to that point either. The crash was foreseeable, has been foreseeable for years.


 
Also,FTB's need to stop mortgaging on the expectation of future earnings that simply will not materalise in my opinion.Their dept will not be eaten into over the next few years like their parents was,their is too much competition in the global market for this to happen,wage inflation is over for the foreseeable future !.


----------



## Jister

By 2004, prime "A" property in Tokyo's financial districts were less than 1/100th of their peak, and Tokyo's residential homes were 1/10th of their peak,


----------



## StoppedClock

madisona said:


> I agree. I assume that McDowell knows something about stamp duty changes in the budget and is angling to have the PD's take credit but it could well have the effect of making people hold off on buying until then.


 
If buyers do hold off it shows how little they understand the market at the moment, IMO the prices are not set by the sellers but by the competing buyers, if stamp duty is removed then they will simply outbid each other to new heights negating the removal of stamp duty.  The only change will be that the developers will get the money rather than the guberment.  Another smart move by our wise leaders.


----------



## Duplex

StoppedClock said:


> If buyers do hold off it shows how little they understand the market at the moment, IMO the prices are not set by the sellers but by the competing buyers, if stamp duty is removed then they will simply outbid each other to new heights negating the removal of stamp duty.  The only change will be that the developers will get the money rather than the guberment.  Another smart move by our wise leaders.



True the money 'saved' by FTB's on stamp duty would find its way back into the housing market and the pockets of developers  Mc Dowell knows this.  But this move is not unprecedented the Tories removed Stamp Duty for FTB in the UK in 1992 two years after the housing bust started, but prices continued to fall (as did interest rates btw) for the next four years.  Mc Dowell might be better employed in considering ways in which we can build our productive capacity to allow us meet the challenges of the global economy, how about.... ahhh..... infrastructure for starters.


----------



## Howitzer

StoppedClock said:


> If buyers do hold off it shows how little they understand the market at the moment, IMO the prices are not set by the sellers but by the competing buyers, if stamp duty is removed then they will simply outbid each other to new heights negating the removal of stamp duty. The only change will be that the developers will get the money rather than the guberment. Another smart move by our wise leaders.


 
Ok, just to be pedantic but this is incorrect.

"The only change will be that the developers will get the money rather than the guberment." Developers don't currently charge stamp duty (unless it's a super big property) so it's not the developers who'll net the proceeds but average joes selling their current properties, including investors.

Another point is that currently the stamp duty bands aren't acting as brakes but are seen as targets when people get into bidding wars. As soon as 2 people start bidding on a property there appears to be a race to get to the nearest stamp band, bidding in 10s of thousands as opposed to 1s. Remove the bands and what will happen? Well I think bidding will no longer have a target and will instead bid up the actual value of the property in a more measured way. There may still be an increase but by the sounds of people you'd think the removal of the bands would result in prices going on to infinity.

I know people who bid on properties when the 317.5 band was brought in. They were bidding on properties asking 270 / 280. Immediately they bid 317.5, 16% over the asking price, even though there was no other bidders! If the band had been removed altogether they would simply have bid the asking price and up their bidding in 1s and 2s in response to counter bids.


----------



## SHARP

madisona said:


> I doubt that it will take that long. They are currently sending over Irish staff to oversee the setting up of the polish plant. *IMO despite protestations to the contrary they will close Dell Hell in Stabcity as soon as it is up and running. They* don't even own the building in Limerick. They just lease it, which shows their commitment. And the polish govt is so desperate for jobs that they will throw loads of grants at them, hust as the Irish government did when they came here. It also makes more sense logistically to relocate to Poland


 

For gods sake - you should be banned for a comment like that! Dellhell in Stabcity??? 

You should be ashamed of yourself


----------



## ninsaga

SHARP said:


> For gods sake - you should be banned for a comment like that! Dellhell in Stabcity???
> 
> You should be ashamed of yourself



Well is is know as Dellhell locally in Limerick anyway - so whats wrong with that.


----------



## Art

Do any of the bears on this post not wonder why builders are still paying record prices for land?? - the purchase of Dalymount park for €65 million as well of tens of millions for small parcels of land in Ballsbridge are just two recent examples. Surely these people and their coterie of highly paid advisers are clued into what is happening in the property market? 

It would seem to me that much of the excellent analysis on this post is on why property should collapse. There is virtually no evidence of a collapse however apart from a few small price adjustments of properties that were probably overvalued in the first place anyway.


----------



## kerrybull

Ireland's property market is like no other property market. Professional investors are what they are. Our market will turn on Mr. Joe Teacher and Miss. Mary Nurse making a decision to sell the house they bought for €180,000 and now valued at €320,000, their decision will be based on the high levels of real debt that they have build up in lifestyle costs. The real danger is that in Ireland we have so many Joe's and Mary's and so much debt.

When property slides there is very little that can be done as the very same factors that drove the market will also cause it to crash. Human nature is human nature no one could make real sense of the rise, and the same will be for the fall.


----------



## whizzbang

Art said:


> Do any of the bears on this post not wonder why builders are still paying record prices for land?? - the purchase of Dalymount park for €65 million as well of tens of millions for small parcels of land in Ballsbridge are just two recent examples. Surely these people and their coterie of highly paid advisers are clued into what is happening in the property market?
> 
> It would seem to me that much of the excellent analysis on this post is on why property should collapse. There is virtually no evidence of a collapse however apart from a few small price adjustments of properties that were probably overvalued in the first place anyway.



Who knows why they are doing this? Greed? Refusing to read the signs? You could also suggest that these are ploys to push positive news into the market place. Have they handed over the money for this land? Could they pull out? Perhaps this is to helpt hem sell the last few units off their last development (stretching it but you never know?)

It is also well accepted that some developer is going to get stuck with land  when the turn comes. Maybe these guys think they are not Paddy last to use a DaveMcwilliamsism.


----------



## StoppedClock

Art said:


> Do any of the bears on this post not wonder why builders are still paying record prices for land?? - the purchase of Dalymount park for €65 million as well of tens of millions for small parcels of land in Ballsbridge are just two recent examples. Surely these people and their coterie of highly paid advisers are clued into what is happening in the property market?
> 
> It would seem to me that much of the excellent analysis on this post is on why property should collapse. There is virtually no evidence of a collapse however apart from a few small price adjustments of properties that were probably overvalued in the first place anyway.


 

I had often wondered just this and so asked around a bit in some reasonably clued in circles (i.e. the people lending them the money) the response I got was that it hasn't taken much genius to make a lot of money in develpoment in the last 10 years so don't over estimate their business acumen.  As regards their _coterie of highly paid advisers _methinks that any highly paid adviser knows that to talk a businessman out of doing more business does not lead to more requests for highly paid advice, just keep telling them to keep going till it does pop then blame some unforseen external factor.

As an aside it is interesting to note that the usual lenders have not been behind a lot of the Ballsbridge acquisitions as they were deemed to hot.  Furthermore the banks that initially loaned the money sold on all the loans immedietly locking in a tidy profit with no risk.


----------



## Jister

Art said:


> Do any of the bears on this post not wonder why builders are still paying record prices for land?? - the purchase of Dalymount park for €65 million as well of tens of millions for small parcels of land in Ballsbridge are just two recent examples. Surely these people and their coterie of highly paid advisers are clued into what is happening in the property market?


 
Perhaps these developers have the €65m in the bank from previous developments and know that no matter what happens by way of a crash, its paper profit/loss and the market will eventually come back (might take 30 years though)

Is there also a bit of arrogance and power involved? That guy (Sean Quinn?) seemed to become an overnight celebrity when he bought Jurys.


----------



## SteveyWonder

I'm new to this thread. Long time lurker etc. I have to be honest though, but I had much of this debate with an estate agent friend of mine last March - I've since sold both my properties at astonishing prices. I'm moving to Germany with my family for a new job next October and, whilst I have enjoyed being in Ireland for most of my life, I just feel too many things have changed for the worse + I am beginning to despise the upwardly-mobile, middle class parasites that seem to be springing up all around me.

It's the young guys starting off below me I feel sorry for. Yes they have plenty of work, but their relative pay is pittance considering the money flowing through the country and the cost of living (particularly house prices). How long this situation will continue, I don't know. I remember when I got my first job out of college - I could run a car and live in a nice house all paid for (after 2-3 years of saving) with one salary.

Anyway, it's guys like this (who were buying whilst I was being told to sell) that I feel have been sold false promises:
http://www.askaboutmoney.com/showthread.php?t=24656

Can someone do the math on this please (I'm no expert)? 405k over 35 years with rental income of 1050-1200 pm? Landlord subsidising tenant to the tune of several hundred euro per month - never thought I'd see anything quite as ridiculous as this. We have indeed "entered a new paradigm".


----------



## Remix

Art said:


> Do any of the bears on this post not wonder why builders are still paying record prices for land?? - the purchase of Dalymount park for €65 million as well of tens of millions for small parcels of land in Ballsbridge are just two recent examples. Surely these people and their coterie of highly paid advisers are clued into what is happening in the property market?


 
Look at the US housing market. The developers there just kept going right up until the situation they now find themselves in: possibly the biggest oversupply slump in about 50 years !


----------



## StoppedClock

Art said:


> Do any of the bears on this post not wonder why builders are still paying record prices for land?? - the purchase of Dalymount park for €65 million as well of tens of millions for small parcels of land in Ballsbridge are just two recent examples. Surely these people and their coterie of highly paid advisers are clued into what is happening in the property market?
> 
> It would seem to me that much of the excellent analysis on this post is on why property should collapse. There is virtually no evidence of a collapse however apart from a few small price adjustments of properties that were probably overvalued in the first place anyway.


 

Out of interest Art having posed the question and gotten a number of (IMO) decent responses the most telling of which would be Remix's example from the US, have you changed your view at all or are the bulls as blind to bear arguments as we bears are accused of being to bull ones?


----------



## Maine

Art said:


> Do any of the bears on this post not wonder why builders are still paying record prices for land?? - the purchase of Dalymount park for €65 million as well of tens of millions for small parcels of land in Ballsbridge are just two recent examples. Surely these people and their coterie of highly paid advisers are clued into what is happening in the property market?
> 
> The biggest gamblers on property in ireland have been the biggest winners.  Hence the above will continue for at least another 12 months.
> 
> Also I do think we should have more respect for Dell - they have provided alot of wealth and jobs to Ireland.  The insane property market is not their fault nor is our rocketing cost inflation.


----------



## blindjustice

Art said:


> *There is virtually no evidence* of a collapse however apart from a few small price adjustments of properties that were probably overvalued in the first place anyway.





StoppedClock said:


> Out of interest Art having posed the question and gotten a number of (IMO) decent responses the most telling of which would be Remix's example from the US, have you changed your view at all or are the bulls as blind to bear arguments as we bears are accused of being to bull ones?





dont mind em stoppedclock the post was OBVIOUSLY a joke


----------



## whizzbang

Maine said:


> Also I do think we should have more respect for Dell - they have provided alot of wealth and jobs to Ireland.  The insane property market is not their fault nor is our rocketing cost inflation.



No disrespect against Dell, they are a good company that have brought a lot of employment to Ireland. That being said their responsibility is to their shareholders and not the Irish. If they can make more money by opening a plan in Poland and (maybe) closing a plant in Ireland thats what they have to do.


----------



## Jister

SteveyWonder said:


> Can someone do the math on this please (I'm no expert)? 405k over 35 years with rental income of 1050-1200 pm? Landlord subsidising tenant to the tune of several hundred euro per month - never thought I'd see anything quite as ridiculous as this. We have indeed "entered a new paradigm".


 
I did a quick check and repayments on €400K would be ~1830 pm, so if he got a tenant then the subsidy would be ~800pm, add on insurance, fees, maintenance, rate rises etc. and the subsidy is over €1000pm.


----------



## Art

StoppedClock said:


> Out of interest Art having posed the question and gotten a number of (IMO) decent responses the most telling of which would be Remix's example from the US, have you changed your view at all or are the bulls as blind to bear arguments as we bears are accused of being to bull ones?


 
I never sought to give the impression that I was bullish. Quite the opposite. Indeed as you will see from other posts I have added elsewhere, I have put my investment property that I bought 5 years ago on the market. I was just curious to hear what people's opinion was. I do believe that there will be a crash for all of the reasons that have been outlined so eloquently elsewhere. However I do think that it is a good six months away.

The question I asked was I believe a valid one and was one that had not been raised before despite there being more than 2,400 posts.


----------



## Duplex

Art said:


> Do any of the bears on this post not wonder why builders are still paying record prices for land?? - the purchase of Dalymount park for €65 million as well of tens of millions for small parcels of land in Ballsbridge are just two recent examples. Surely these people and their coterie of highly paid advisers are clued into what is happening in the property market?
> 
> It would seem to me that much of the excellent analysis on this post is on why property should collapse. There is virtually no evidence of a collapse however apart from a few small price adjustments of properties that were probably overvalued in the first place anyway.


 
Highly paid advisers that only get paid if the deal goes through, think about it. No deals, no pay for advisers on the vendors or buyers side.  There were highly paid advisers in Japan, Hong Kong, Bangkok, London etc. etc. who called it wrong for their clients, they didn't see it coming.  I'm sure that Irish advisers will use the same defence (essentially the ignorance defence) when the crash gathers pace here.  'I'm sorry Mickey but how was I to know'


----------



## StoppedClock

Art said:


> I never sought to give the impression that I was bullish. Quite the opposite. Indeed as you will see from other posts I have added elsewhere, I have put my investment property that I bought 5 years ago on the market. I was just curious to hear what people's opinion was. I do believe that there will be a crash for all of the reasons that have been outlined so eloquently elsewhere. However I do think that it is a good six months away.
> 
> The question I asked was I believe a valid one and was one that had not been raised before despite there being more than 2,400 posts.


 
Sorry Art, usually such questions are posed by bulls, answered by bears then posed again in some other guise elsewhere, anwsered again and so on (more so on HousePriceCrash.co.uk admittedly). It was unsual to get so many answers in such quick sucession and for the person asking to still be logged so I thought I'd try and rope me a bull...


Edit: There is virtually no evidence of a collapse does sound quite bullish (even though it is probably true  )


----------



## SteveyWonder

Jister said:


> I did a quick check and repayments on €400K would be ~1830 pm, so if he got a tenant then the subsidy would be ~800pm, add on insurance, fees, maintenance, rate rises etc. and the subsidy is over €1000pm.



Oh deary deary me. He was obviously thinking "capital appreciation", "capital appreciation", "capital appreciation".


----------



## room305

Jister said:


> I did a quick check and repayments on €400K would be ~1830 pm, so if he got a tenant then the subsidy would be ~800pm, add on insurance, fees, maintenance, rate rises etc. and the subsidy is over €1000pm.



That's assuming he can get a tenant for 12 months of the year. Normally, landlords calculate based on 2 months vacant for every 10 months occupied. This pushes the subsidy to greater than the rent he is receiving!

It's philanthropy rather than investment.


----------



## room305

Art said:


> The question I asked was I believe a valid one and was one that had not been raised before despite there being more than 2,400 posts.



There have been similar questions asked. An alternative one is:

"If a property market collapse is so imminent then why are bank shares valued so highly?"

I think the answer to your question is:

Because if they don't another developer will. In almost all property busts developers continue to develop right up until the crash occurs. If they are mid-way through a development it usually makes more economic sense to finish the development and flog the properties, even if you have to cut prices and/or offer massive incentives to buyers. Like anyone in one line of business, developers only know how to develop, so while there is profit to be had they will continue to do so, even during a crash. When there is little incentive to develop they will stop developing and start amassing land banks awaiting the next upswing in property prices.


----------



## SteveyWonder

room305 said:


> It's philanthropy rather than investment.


Lol.

Incidentally, how much capital appreciation would you need to break-even on this 405k mortgage, assuming rents stay static?

Are we in to 700-800k for a 2 bed territory? Can anyone experienced in these things do the math? Is there the opportunity cost of availing of 5% savings deposit accounts that must also be factored in?

A 1000pm mortgage defecit equates to 12k per annum (plausible given vacancy rates and the fact that tax is due on loss-making rental income for non-residents), or a required capital appreciation of 12k per year, just to break even.

Now 12k per annum is about 20k worth of salary? I'd sooner have this in a medium-high risk pension equity fund, than tied up in a ultra-high-risk, tax inefficient property.


----------



## ninsaga

SteveyWonder said:


> Now 12k per annum is about 20k worth of salary? I'd sooner have this in a medium-high risk pension equity fund....



.......so why don't you?


----------



## Jister

If I had €400K in my pocket this minute what would I get for it in the bank - 4% interest soon enough, once rates rise again = 16k PA. and I can access the €400K at short notice.

If I bought an appartment for €400K I would get €1200pm for 10 months = 12K and out of that comes expenses etc. so lets say 10k.PA I am also risking my capital and will have fees, taxes etc. buying and selling it etc.


----------



## SteveyWonder

ninsaga said:


> .......so why don't you?



I have a pension already thanks, and I maximise the taxation system here as much as I can. All I was saying was that there are much better ways of making money than being sucked past the event horizon that is the Irish property whirlpool of dreams.

The Poles and Lithuanians are here to lap up as much of this water as possible, before it all gets sucked down the plug-hole, along with the dreams and ambitions of literally tens of thousands of young Irish people with over-zealous expectations.

Once the water hole has dried up, it'll be time to move on to the next oasis.


----------



## Duplex

SteveyWonder said:


> The Poles and Lithuanians are here to lap up as much of this water as possible, before it all gets sucked down the plug-hole, along with the dreams and ambitions of literally tens of thousands of young Irish people with over-zealous expectations.
> 
> Once the water hole has dried up, it'll be time to move on to the next oasis.


 
A fine analogy.


----------



## ninsaga

SteveyWonder said:


> ....that there are much better ways of making money than being sucked past the event horizon that is the Irish property whirlpool of dreams.



....would you care to elaborate on what better ways there are (or have been) in making money over the last few years. Property has yielded hughly...what investment do you know of has or is now capable of the same level or returns?

ninsaga


----------



## Howitzer

ninsaga said:


> ....would you care to elaborate on what better ways there are (or have been) in making money over the last few years. Property has yielded hughly...what investment do you know of has or is now capable of the same level or returns?
> 
> ninsaga


 
None. We're moving from an historically low interest rate environment where any investment worthy of the name should have made significant profits. In a high(er) rate environment there may not be any investments that show such growth potential. In such an environment wealth maintenance is the aim of the game.


----------



## SteveyWonder

ninsaga said:


> ....would you care to elaborate on what better ways there are (or have been) in making money over the last few years. Property has yielded hughly...what investment do you know of has or is now capable of the same level or returns?
> 
> ninsaga



There's no prizes for spotting historical trends my friend. And I have done extremely well out of what has gone on in Ireland over the last 10 years.

The point is though (and I have been making this point since I joined up this askaboutmoney), I was referring to another poster, carlb, who caught my eye - he bought in 2006. Are you suggesting that he should not be worried, just use history as a basis for predictions in to the future?


----------



## Duplex

ninsaga said:


> ....would you care to elaborate on what better ways there are (or have been) in making money over the last few years. Property has yielded hughly...what investment do you know of has or is now capable of the same level or returns?
> 
> ninsaga


 
A business selling property to paddies in Bulgaria or any other God forsaken bubble market you care to mention?


----------



## StoppedClock

ninsaga said:


> ....would you care to elaborate on what better ways there are (or have been) in making money over the last few years. Property has yielded hughly...what investment do you know of has or is now capable of the same level or returns?
> 
> ninsaga


 

Casinos, i heard of this one guy who literally doubled his money in about 3 minutes, he then did it again, and again, all in under 10 minutes.  Therefore since casions now only ever pay out (new paradigm) he can expect this return for ever.  Pity the poor losers who wasted their time on property.


----------



## walk2dewater

SteveyWonder said:


> There's no prizes for spotting historical trends my friend. And I have done extremely well out of what has gone on in Ireland over the last 10 years.
> 
> The point is though (and I have been making this point since I joined up this askaboutmoney), I was referring to another poster, carlb, who caught my eye - he bought in 2006. Are you suggesting that he should not be worried, just use history as a basis for predictions in to the future?


 
SW, it's called the "100-smokes-a-day-hasn't-killed-me-yet-so-it-never-will" school of philosophy


----------



## Jister

ninsaga;280167what investment do you know of has or is now capable of the same level or returns?
 
ninsaga[/quote said:
			
		

> Property is now yielding about 3%, so I'd say putting it on deposit might be a better bet. Or as somebody else pointed out invest in a pension to gain significant tax relief.


----------



## ninsaga

Howitzer said:


> ....In such an environment wealth maintenance is the aim of the game.



Good point for sure... for proper wealth maintenance one needs enterprising opportunities to stay ahead of the game 



SteveyWonder said:


> And I have done extremely well out of what has gone on in Ireland over the last 10 years.



Good for you & I mean that.. I just find that there are posters here who 'deplore how investors/speculators' have reaped from it.



SteveyWonder said:


> I was referring to another poster, carlb, who caught my eye - he bought in 2006. Are you suggesting that he should not be worried, just use history as a basis for predictions in to the future?



It depends on what he bought & where he bought in my view. I never regarded apartments as good long term...so if he bought one then yeah... his yields may be soemthing to watch




StoppedClock said:


> Pity the poor losers who wasted their time on property.



Not everyone who got into property loses...co you can't paint everyone with the same brush



walk2dewater said:


> SW, it's called the "100-smokes-a-day-hasn't-killed-me-yet-so-it-never-will" school of philosophy


..must remember that one  



Jister said:


> Property is now yielding about 3%, so I'd say putting it on deposit might be a better bet. Or as somebody else pointed out invest in a pension to gain significant tax relief.



3% over what period


----------



## Jister

ninsaga said:


> 3% over what period


 
If I buy a house tomorrow and rent it I will make about 3% per year.

See my earlier post about buying an apartment for 400K

BTW, my house has appreicated abut 300% over the last 8 years and in time I will probably inherit property worth about 500K, so its not really benificial for me to see the market crash.


----------



## Firefly

on the 400k house. If the subsidizing costs and opportunity costs are to be 20k py (seems a bit high to be but nevertheless) the property would need to increase by 3.75% annually over the next 20 years to break even. Over 30 years the annual growth would only need to be 1.5% which seems low to me.....(still bearish short term, but long term still think it's the best investment for the money)


----------



## ninsaga

Jister said:


> If I buy a house tomorrow and rent it I will make about 3% per year.
> 
> See my earlier post about buying an apartment for 400K
> 
> BTW, my house has appreicated abut 300% over the last 8 years and in time I will probably inherit property worth about 500K, so its not really benificial for me to see the market crash.



OK rental yield as opposed to capital growth yield is what you are referring to right?


----------



## Jister

ninsaga said:


> OK rental yield as opposed to capital growth yield is what you are referring to right?


 
I am assuming house prices stand still. Lets say the next 5 year period, as interest rates rise, capital appreciation gets cut back, and in my opinion might depreciate.


----------



## Firefly

Slightly off topic....I think there are a lot of people out there who are thinking "sure we're used to putting 500pm between us into the SSIA..why not keep going with a bit more and subsidize an investment property"...any thoughts.....

Firefly.


----------



## kerrybull

It is big picture time. With Irish property the Math does not add up. There will of course be major winners and there will be major loosers.

The next few months will tell a tale as the impact of increasing interest rates, and higher energy costs eat into consumer confidence.

Ireland is vulnerable to a number of international shocks. Today the President of Venezuela has said that they will stop oil production if the US attacks Iran. Oil at over $100 a barrel would be arrow into the heart of consumer confidence.


----------



## CelloPoint

Firefly said:


> on the 400k house. If the subsidizing costs and opportunity costs are to be 20k py (seems a bit high to be but nevertheless) the property would need to increase by 3.75% annually over the next 20 years to break even. Over 30 years the annual growth would only need to be 1.5% which seems low to me.....(still bearish short term, but long term still think it's the best investment for the money)



But aren't you neglecting the interest on the repayments?

Also, aren't you neglecting the opportunity cost of leaving the 400k in the bank on deposit?

Your calculations are based on breaking even (which requires 1.5% growth) - this is 0% return. What then about inflation that has been eating away at your 400k? So, to compete with Rabobank, you'd need a consistent 5-6% growth over 35 years.

I think investing in property in 2006 is for fools.


----------



## Jister

CelloPoint said:


> I think investing in property in 2006 is for fools.


 
Not in agreement 100%. There will always be opportunities if you purchase the right property, but the problem over the last 10 years is every investment has doubled,tripled, quadroupled so even the clowns that didn't know what they were at cleaned up.

Only the shrewd investor will make money in the next few years.


----------



## Firefly

In my calcs I am saying that a 1.5% return per year on 400k is all that's needed to get the same return as putting 20k per annum in the bank. This 20k includes the cost of subbing the tenant plus opp costs. Ie 400k at 1.5% over 30 years will be worth 1m.....


----------



## Firefly

Actually, I know it's easy to come back and say what about interest on the 20k etc...but this is what was deemed included. I'm gonna do a costing here for once and for all on the likely subsidising costs, vacancy periods, maint costs, letting fees, mtg repayments and come up with a true cost of a 400k apartment and come back to you (prob be tomo)...totally agree with Jister though...it all depends on what property to buy,..could just as easily buy shares in Baltimore before the bust....

Firefly.


----------



## CelloPoint

Firefly said:


> Actually, I know it's easy to come back and say what about interest on the 20k etc...but this is what was deemed included. I'm gonna do a costing here for once and for all on the likely subsidising costs, vacancy periods, maint costs, letting fees, mtg repayments and come up with a true cost of a 400k apartment and come back to you (prob be tomo)...totally agree with Jister though...it all depends on what property to buy,..could just as easily buy shares in Baltimore before the bust....
> 
> Firefly.



If you could do that Firefly, it would be most appreciated. We can whet our lips even more prior to the impending crash.


----------



## Eurofan

Jister said:


> Only the shrewd investor will make money in the next few years.



Personally i reckon only the shrewd investor will avoid _losing_ a lot of money in the next few years.


----------



## ninsaga

Jister said:


> Not in agreement 100%. There will always be opportunities if you purchase the right property, but the problem over the last 10 years is every investment has doubled,tripled, quadroupled so even the clowns that didn't know what they were at cleaned up.
> 
> Only the shrewd investor will make money in the next few years.



Agreed..... there were probably those who invested a few yrs back also who invested in the wrong areas perhaps. I don't believe that investors are just going to stop...... they will just be more selective ie. right property type, right  location etc...

ninsaga


----------



## room305

Jister said:


> There will always be opportunities if you purchase the right property, but the problem over the last 10 years is every investment has doubled,tripled, quadroupled so even the clowns that didn't know what they were at cleaned up.



As the saying goes ... "Everyone is a genius in a bull market ..."



Jister said:


> Only the shrewd investor will make money in the next few years.



"... so find the bull market."


----------



## phoenix_n

phoenix_n said:


> Re 550 terrace in phibs - Yep, the EA is following on from prices earlier on this year not realising that the sentiment (IMO) has changed.
> 
> ....


 
Now advertised for 510 (cache  )


----------



## blindjustice

phoenix_n said:


> Now advertised for 510 (cache  )


 

property like that should be razed to the ground.................


----------



## baby_tooth

room305 said:


> As the saying goes ... "Everyone is a genius in a bull market ..."
> 
> one can make money in a plunging market as well...
> 
> 
> "... so find the bull market."


 
could consider selling calls on future rising market, if you can find anyone mad enough to buy them, or perhaps badly priced puts for the enivitable fall,..ppl will panic and snatch at insurance. if you could price it at a price to cover rental yield cover then you could be onto a winner...money from put and cost to purchase house at low level - rent.


best bet is to look at commodities, esp the staples


----------



## darag

> Ie 400k at 1.5% over 30 years will be worth 1m.....


Nope - more like €625,232


----------



## RiceCakes

blindjustice said:


> property like that should be razed to the ground.................



Whats the real value of this crappy cubbyhole? €180K would be overvalued imho, maybe €140K , but €510k.. is someone taking the píss?, no seriously!!


----------



## ncs

RiceCakes said:


> Whats the real value of this crappy cubbyhole? €180K would be overvalued imho, maybe €140K , but €510k.. is someone taking the píss?, no seriously!!


 
It was looking round and seeing properties like this for such laughable amounts that convinced me something was seriously awry. Mind you, that was three or four years ago and the price nearer half of €510k.


----------



## ninsaga

Firefly said:


> In my calcs I am saying that a 1.5% return per year on 400k is all that's needed to get the same return as putting 20k per annum in the bank. This 20k includes the cost of subbing the tenant plus opp costs. Ie 400k at 1.5% over 30 years will be worth 1m.....



Will take 62yrs to get to the 1m


----------



## gearoidmm

Firefly said:


> In my calcs I am saying that a 1.5% return per year on 400k is all that's needed to get the same return as putting 20k per annum in the bank. This 20k includes the cost of subbing the tenant plus opp costs. Ie 400k at 1.5% over 30 years will be worth 1m.....



20k in the bank every year over 30 years @ a measly 3.5% interest would be worth 1.224 million.  At a 5% return, it would be worth 1.481 million.

1.5% return on 400,000 is 625,000.
4.5% return on your 400,000 would be 1.49 million


----------



## robd

Firefly said:


> Actually, I know it's easy to come back and say what about interest on the 20k etc...but this is what was deemed included. I'm gonna do a costing here for once and for all on the likely subsidising costs, vacancy periods, maint costs, letting fees, mtg repayments and come up with a true cost of a 400k apartment and come back to you (prob be tomo)...totally agree with Jister though...it all depends on what property to buy,..could just as easily buy shares in Baltimore before the bust....
> 
> Firefly.



Here's a copy from a spreadsheet I did a number of months ago.

List Price		400000										
Stamp Duty	7.50%	30000										
Legal Fees		3000										
Furnishings		10000										
Total Outlay		443000										
Loan Amount	100%	400000										
Cash Required		43000										


		2006				2007						
		June	August	October	December	March	June					
ECB Increase			0.25%	0.25%	0.25%	0.25%	0.25%	0.25%	0.25%	0.25%	0.25%	0.25%
ECB %		2.75%	3.00%	3.25%	3.50%	3.75%	4.00%	4.25%	4.50%	4.75%	5.00%	5.25%
Bank Yield		1.00%	1.30%	1.30%	1.30%	1.30%	1.30%	1.30%	1.30%	1.30%	1.30%	1.30%
Interest Rate %		3.75%	4.30%	4.55%	4.80%	5.05%	5.30%	5.55%	5.80%	6.05%	6.30%	6.55%

Repayment Interest		-€1,250.00	-€1,433.33	-€1,516.67	-€1,600.00	-€1,683.33	-€1,766.67	-€1,850.00	-€1,933.33	-€2,016.67	-€2,100.00	-€2,183.33
Repayment 40yr	40	-€1,610.10	-€1,747.15	-€1,811.13	-€1,876.11	-€1,942.05	-€2,008.93	-€2,076.71	-€2,145.35	-€2,214.81	-€2,285.07	-€2,356.09
Repayment 35yr	35	-€1,711.62	-€1,843.79	-€1,905.43	-€1,968.02	-€2,031.52	-€2,095.92	-€2,161.19	-€2,227.29	-€2,294.21	-€2,361.91	-€2,430.37
Repayment 30yr	30	-€1,852.46	-€1,979.49	-€2,038.64	-€2,098.66	-€2,159.53	-€2,221.22	-€2,283.72	-€2,347.01	-€2,411.08	-€2,475.89	-€2,541.44
Repayment 25yr	25	-€2,056.52	-€2,178.17	-€2,234.70	-€2,291.99	-€2,350.03	-€2,408.80	-€2,468.31	-€2,528.53	-€2,589.45	-€2,651.05	-€2,713.34
Repayment 20yr	20	-€2,371.55	-€2,487.62	-€2,541.41	-€2,595.83	-€2,650.88	-€2,706.56	-€2,762.86	-€2,819.76	-€2,877.27	-€2,935.38	-€2,994.08

House Insurance		-17.25	-17.25	-17.25	-17.25	-17.25	-17.25	-17.25	-17.25	-17.25	-17.25	-17.25
Management Fees		-125.00	-125.00	-125.00	-125.00	-125.00	-125.00	-125.00	-125.00	-125.00	-125.00	-125.00

Rent		1,200.00	1,200.00	1,200.00	1,200.00	1,200.00	1,200.00	1,200.00	1,200.00	1,200.00	1,200.00	1,275.00

Diff Interest Only		-€192.25	-€375.58	-€458.92	-€542.25	-€625.58	-€708.92	-€792.25	-€875.58	-€958.92	-€1,042.25	-€1,050.58
Diff 40yr		-€552.35	-€689.40	-€753.38	-€818.36	-€884.30	-€951.18	-€1,018.96	-€1,087.60	-€1,157.06	-€1,227.32	-€1,223.34
Diff 35yr		-€653.87	-€786.04	-€847.68	-€910.27	-€973.77	-€1,038.17	-€1,103.44	-€1,169.54	-€1,236.46	-€1,304.16	-€1,297.62
Diff 30yr		-€794.71	-€921.74	-€980.89	-€1,040.91	-€1,101.78	-€1,163.47	-€1,225.97	-€1,289.26	-€1,353.33	-€1,418.14	-€1,408.69
Diff 25yr		-€998.77	-€1,120.42	-€1,176.95	-€1,234.24	-€1,292.28	-€1,351.05	-€1,410.56	-€1,470.78	-€1,531.70	-€1,593.30	-€1,580.59
Diff 20yr		-€1,313.80	-€1,429.87	-€1,483.66	-€1,538.08	-€1,593.13	-€1,648.81	-€1,705.11	-€1,762.01	-€1,819.52	-€1,877.63	-€1,861.33

Gross Yield		3.348837209										
Net Yield		2.951860465


----------



## exile

blindjustice said:


> property like that should be razed to the ground.................



Don't be so harsh on the house - it didn't ask to be valued at 510K!


----------



## Maine

ninsaga said:


> Agreed..... there were probably those who invested a few yrs back also who invested in the wrong areas perhaps. I don't believe that investors are just going to stop...... they will just be more selective ie. right property type, right location etc...
> 
> IMO there will be a massive wipeout so all investors will from current stand point take a beating. Hence the stock coming out to sell now.
> 
> Note average farmers income in 2004 was 15k. Just think how many sites will be sold in the years ahead - not thousands but millions. Land as income equals 250 per annum per acre yet say on average 50,000 as development. That is a PE of 200. Sell.
> 
> Re folly of people handing back keys - amend my earlier comments saying this is not an option. It is an option for all the poles etc buying apartments. They have a no risk gamble as they will just go home if it collapses. Hence this is a big risk for the banks - left with property whose owners they cannot chase. If I was polish I would buy as many properties as possible - if it goes up further I will sell, if it drops I hand back keys and head for Lodz.
> 
> If Irish and bearish I would keep my cash in a sub of a non irish bank just in case they collapse - ref credit suisse report and new york hedge funds posts.  Credit unions a complete no no.


----------



## whathome

Maine said:


> [It is an option for all the poles etc buying apartments. They have a no risk gamble as they will just go home if it collapses. Hence this is a big risk for the banks - left with property whose owners they cannot chase. If I was polish I would buy as many properties as possible - if it goes up further I will sell, if it drops I hand back keys and head for Lodz.


 
That's an excellent point, Irish banks have no experience of lending to migrant workers.  In the US, it's nearly impossible to get even a low limit credit card without extensive history in the country.  US banks know from experience that immigrants are more likely to do a runner and fly home when bad debts mount.


----------



## Firefly

Apologies for the mis calc everyone (feeling even more bearish now)..1.5% on 400k over 30 years is not 1m! Will try and get to that xls today but up the walls...will go through yours too robd....

Super thread though isn't it !!


----------



## Duplex

whathome said:


> That's an excellent point, Irish banks have no experience of lending to migrant workers. In the US, it's nearly impossible to get even a low limit credit card without extensive history in the country. US banks know from experience that immigrants are more likely to do a runner and fly home when bad debts mount.


 

I'm sure that many young Irish people 'tricked' into interest only 35 year mortgages faced with debt slavery and a depreciating asset will post their keys through the letterboxes of their bank and do the flit.


----------



## cjh

http://www.daft.ie/searchsale.daft?search=1&s[cc_id]=ct1&s[a_id]=ga5&s[mnp]=&s[mxp]=500000&s[bd_no]=1&s[search_type]=sale&s[refreshmap]=1&limit=10&search_type=sale&id=130235

The best part of half a million - beggars belief!


----------



## SHARP

Duplex said:


> I'm sure that many young Irish people 'tricked' into interest only 35 year mortgages faced with debt slavery and a depreciating asset will post their keys through the letterboxes of their bank and do the flit.


 

I actually think the opposite, I think there will be many Irish people (not just young irish people) that will skip food, will put off other necessary purchases in order to keep the big house and big car - I think people are underestimating the "keeping up appearances factor" - this sentiment is rife around the country even at the moment.

Sure there are people struggling now, and you wouldn't even know it because they are the same people bragging about the value of their property/how big it is etc etc.


----------



## pvtighe

CelloPoint said:


> But aren't you neglecting the interest on the repayments?
> 
> Also, aren't you neglecting the opportunity cost of leaving the 400k in the bank on deposit?
> 
> Your calculations are based on breaking even (which requires 1.5% growth) - this is 0% return. What then about inflation that has been eating away at your 400k? So, to compete with Rabobank, you'd need a consistent 5-6% growth over 35 years.
> 
> I think investing in property in 2006 is for fools.


 
Inflation is also eating at your deposits and conversely your loan interest!


----------



## pvtighe

Firefly said:


> Slightly off topic....I think there are a lot of people out there who are thinking "sure we're used to putting 500pm between us into the SSIA..why not keep going with a bit more and subsidize an investment property"...any thoughts.....
> 
> Firefly.


 
I think they will be factored this in to offset the higher interest payments on the way!


----------



## redo

24 Galtrim Grange, Malahide.
Asking price 
800k


Reduced to 730k
[broken link removed]

Over priced IMO anyway.


----------



## Gwynston

redo said:


> 24 Galtrim Grange, Malahide.
> Asking price 800k
> Reduced to 730k
> Over priced IMO anyway.



Jezus - 3/4 mill for a 1300 sq.ft. 3-bed terrace? Madness! 
Did you see the picture of the lounge? The TV is so big, it practically takes up one whole end of the room with not enough space left to even fit a couch in such an orientation that one could actually watch the thing! 

I know Malahide has been high demand, but seriously!
Imagine what you could buy in Manhattan or Florida or The Med etc. for that money...


----------



## cjh

cjh said:


> http://www.daft.ie/searchsale.daft?search=1&s[cc_id]=ct1&s[a_id]=ga5&s[mnp]=&s[mxp]=500000&s[bd_no]=1&s[search_type]=sale&s[refreshmap]=1&limit=10&search_type=sale&id=130235
> 
> The best part of half a million - beggars belief!


 

Reposted with a viewable link.....

http://www.daft.ie/searchsale.daft?search=1&selected_agent=&id=130235&s[agent_id]=1338&s[p]=rpxvxxtr


----------



## room305

cjh said:


> Reposted with a viewable link.....



Use the daft shortcode: [broken link removed]


----------



## Calina

room305 said:


> Use the daft shortcode: [broken link removed]



Merits insoection, does it?


----------



## thewatcher

pvtighe said:


> Inflation is also eating at your deposits and conversely your loan interest!


 
Only if your wages are keeping pace with inflation,i would say people's loan interest is/will going/go up a lot quicker than their wages are/will !.


----------



## room305

Calina said:


> Merits insoection, does it?


----------



## Calina

room305 said:


>



you did read the ad, didn't you?


----------



## ajapale

> Beside the Dart The Sea and Glasthule village this is a most conveniently located cottage of much charm and apeal [sic]. The property has been recently fully refurbished and modernised throughout and well merits insoection [sic].


----------



## CelloPoint

Beside the Dart The Sea and Glasthule village this is a most conveniently located cottage of much charm and apeal [sic]. The property has been recently fully refurbished and modernised throughout and well merits insoection [sic].

Wasn't someone earlier making the point about so-called property experts and their shrewd decision making a sign of a healthy market? Well, it seems there are a lot of monkeys working for so-called professional operations who deal with hundreds of thousands of euro of other peoples money on a daily basis.

I wouldn't trust these guys.


----------



## room305

Calina said:


> you did read the ad, didn't you?



Apologies no I hadn't, was just posting the shortcode so it would be easier to link to. Just read it now though. Hilarious.

Funny how they go to great lengths to talk about how the owner has modernised it but then only show one picture from the outside.


----------



## Jason7

I think this is even better

Are they for real with their "location, location ,location " ,should be replaced with "debt debt debt"

"[broken link removed]


----------



## johnjoe101

Is it just me or are the maps on my home getting chock full of properties for sale? Really seems like there is alot out there at the moment. is this the case or are they just slow in taking sold propertise off the website?


----------



## whizzbang

while we are in a lighter mood, proof that the US house price crash is main stream news there
[broken link removed]


----------



## whizzbang

johnjoe101 said:


> Is it just me or are the maps on my home getting chock full of properties for sale? Really seems like there is alot out there at the moment. is this the case or are they just slow in taking sold propertise off the website?



Check out the West Dublin Property Rash on daft.ie Maps


----------



## Duplex

Have we a map identifying where the greater fools who are supposed to buy all this inventory are located?


----------



## redo

johnjoe101 said:


> Is it just me or are the maps on my home getting chock full of properties for sale? Really seems like there is alot out there at the moment. is this the case or are they just slow in taking sold propertise off the website?


One sly thing I've noticed is that EA sometimes (deliberitly?) place some houses down in the Atlantic Ocean off Kerry so it doesn't appear that an estate has too many houses for sale.

Anyone else notice that?


----------



## redo

Anyone know the story about Linnetsfield in Clonee.  There seems to be a localised cluster of sellers here

[broken link removed]

Map this property to get a closer look?

Are there high levels of Radon or is the government going build a nuclear power station nearby?


----------



## hmmm

Classic investor type apartment in city centre - asking price reduced by 10k in past month (not a big amount I realise, but is indicative of falls)

[broken link removed]


----------



## cjh

Jason7 said:


> I think this is even better
> 
> Are they for real with their "location, location ,location " ,should be replaced with "debt debt debt"
> 
> "[broken link removed]


 
Do they actually think those 'views' are a selling point?


----------



## Calina

redo said:


> Anyone know the story about Linnetsfield in Clonee.  There seems to be a localised cluster of sellers here
> 
> [broken link removed]
> 
> Map this property to get a closer look?
> 
> Are there high levels of Radon or is the government going build a nuclear power station nearby?



My bet is investment being dumped in this case at least.


----------



## miju

just back on the original topic for a moment.

would anyone agree that the fact ALOT more of the "common joes" are talking about a property bubble coupled with the fact you have more and more "experts" trying to talk down a bubble mean that we are now at a critical phase of this cycle?

the dogs on the street know they're looking at a massive bubble waiting to pop and want out / refuse to get in but the "experts" are trying to train them to "heel" and that things will be fine.

only problem is a pack of dogs can be VERY disobidient 

it really seems though like the market is now beginnning to majorly turn , with inventory building up and the market still slow (when this was the much trumpeted month for the return to form of the property market after the "usual" slow summer)

now with the possibility of stamp duty abolotion / reductions ireland could be looking at the largest dead cat bounce in property market history and it might just be around the corner


----------



## Firefly

Hi all,

Below I am trying to do a costing of buy-to-let of a prop in Christchurch. 

Buy 290k Bertram Court 1 bed Christchurch...assume it goes for 317k
[broken link removed]=

One for rent : Bertram Court 1 bed Christchurch - asking 1,050 - say they only get 950 per month
http://www.daft.ie/searchrental.daft?search=1&s[cc_id]=ct1&s[a_id]=3647&s[mnp]=&s[mxp]=&s[bd_no]=&s[search_type]=rental&s[refreshmap]=1&limit=10&search_type=rental&id=422013



I appreciate that it will be quite easy to pick holes in it (this is not exactly a thesis), but it's a shot nevertheless. 

Assumptions

The Opp Cost = initial outlay costs (SD, Legal, Fit out) plus the annual subsidising costs, as the ave "investor" will not be able to walk into the bank and borrow 317k for anything other than property, 
I have added these subsidising costs to the initial costs at the beginning of the year before adding interest which will boost the overall opp cost fig per year.

Ignoring interest rate movements...we can't say for certain what the average interest rate will be over the next 30 years. I accept they are low at the moment by historical standards.

Ignoring inflation - higher inflation will do nothing to affect the loan repayments, but could have effects on rental incomes going up along with expenses such as Maint costs, repairs etc. We could argue all day about future rental prices going uo/down...incidentally I owned a prop near Christchurch and feel rent here has gone up in the last 2 years byt approx 100 pm for above prop.

Reducing balance - I am ignoring the falling interest element as maturity approaches, meaning that more and more of the repayments will be repaying the actual pur price and not interest. 

Taxation - as there will be subsidising occuring for many years I am ignoring the tax due when income is greater than expenses (all profits on other investments are taxed also diff rates though). I am also ignoring subtracting Dep Retention Tax on deposits (which will boost the opp cost)


 Prop Cost   317,000   
 Initial Transaction Costs    

 Stamp Duty 5% (assume non-ftb)     15,850  
 Legal                                           3,000  
 Furnishings         6,000  

 Total initial Outlay       24,850 


 Monthly Expenses    
 Mortgage     1,427   
 Less Mtg Int Relief    -100   
     1,327   

 Insurance        80   
 Maintenance Co.     117   
 Upkeep (repairs etc)      83   

 Monthly Cost    1,607  
 Less Income     
 10 months rent PY @950pm    792  
 Shortfall Per month     815  

 Shortfall Per Year   9,778  

 Year   Principal   + Yearly Shortfall      3.5% Int   Total 
 0   24,850.00   9,778.00   34,628.00   1.035    35,839.98 
 1   35,839.98   9,778.00   45,617.98   1.035    37,094.38 
 2   37,094.38   9,778.00   46,872.38   1.035    38,392.68 
 3   38,392.68   9,778.00   48,170.68   1.035    39,736.43 
 4   39,736.43   9,778.00   49,514.43   1.035    41,127.20 
 5   41,127.20   9,778.00   50,905.20   1.035    42,566.65 
 6   42,566.65   9,778.00   52,344.65   1.035    44,056.49 
 7   44,056.49   9,778.00   53,834.49   1.035    45,598.46 
 8   45,598.46   9,778.00   55,376.46   1.035    47,194.41 
 9   47,194.41   9,778.00   56,972.41   1.035    48,846.21 
 10   48,846.21   9,778.00   58,624.21   1.035    50,555.83 
 11   50,555.83   9,778.00   60,333.83   1.035    52,325.29 
 12   52,325.29   9,778.00   62,103.29   1.035    54,156.67 
 13   54,156.67   9,778.00   63,934.67   1.035    56,052.15 
 14   56,052.15   9,778.00   65,830.15   1.035    58,013.98 
 15   58,013.98   9,778.00   67,791.98   1.035    60,044.47 
 16   60,044.47   9,778.00   69,822.47   1.035    62,146.02 
 17   62,146.02   9,778.00   71,924.02   1.035    64,321.14 
 18   64,321.14   9,778.00   74,099.14   1.035    66,572.38 
 19   66,572.38   9,778.00   76,350.38   1.035    68,902.41 
 20   68,902.41   9,778.00   78,680.41   1.035    71,313.99 
 21   71,313.99   9,778.00   81,091.99   1.035    73,809.98 
 22   73,809.98   9,778.00   83,587.98   1.035    76,393.33 
 23   76,393.33   9,778.00   86,171.33   1.035    79,067.10 
 24   79,067.10   9,778.00   88,845.10   1.035    81,834.45 
 25   81,834.45   9,778.00   91,612.45   1.035    84,698.65 
 26   84,698.65   9,778.00   94,476.65   1.035    87,663.11 
 27   87,663.11   9,778.00   97,441.11   1.035    90,731.31 
 28   90,731.31   9,778.00   100,509.31   1.035    93,906.91 
 29   93,906.91   9,778.00   103,684.91   1.035    97,193.65 
 30   97,193.65   9,778.00   106,971.65   1.035    100,595.43 

So, by putting the initial outlay costs in the bank and adding the annual subsidy costs to it and getting 3.5% on it, after 30 years you'd have only 100k.


----------



## ncs

miju said:


> ...would anyone agree that the fact ALOT more of the "common joes" are talking about a property bubble coupled with the fact you have more and more "experts" trying to talk down a bubble mean that we are now at a critical phase of this cycle?
> 
> it really seems though like the market is now beginnning to majorly turn , with inventory building up and the market still slow (when this was the much trumpeted month for the return to form of the property market after the "usual" slow summer)...


 
The thing about a sentiment-driven bubble which continues to grow despite many logical reasons why it should reverse, is that sentiment can also drive the needle which eventually catches it out. When the market is so far from equilibrium, people talking about "people talking about property reversals" might be all it needs to start the stampede. Threads like this, for example, could well become a self-fulfilling prophecy. Hurrah!


----------



## Duplex

We have been here before, a turning point in the market that is.  2001 before 9/11 inventory was rising and prices falling.  After 9/11 and Greenspan's emergency rate cuts the market entered a manic stage that has lasted five years.  So 400,000 new homes and billions in debt later its back to the future (or 2001) and that forestalled day of reckoning between supply and demand.


----------



## hmmm

Firefly said:


> So, by putting the initial outlay costs in the bank and adding the annual subsidy costs to it and getting 3.5% on it, after 30 years you'd have only 100k.



I'm trying to figure out what you're doing and can't decide if I've completely misunderstood you or you've made a big mistake. Your subsidy is about 10k a year, so how do you end up with only 100k after 30 years (ignoring all other calculations)?

Christchurch rents have been static in the past 6 years. I'd say that one beds have come down about 50-100 in past year, two beds are about the same. 950 is more than I'd expect for a Bertram one bed, I'd budget 850 as more realistic.


----------



## CelloPoint

whizzbang said:


> Check out the West Dublin Property Rash on daft.ie Maps



Looks rather alarming to me. But then again, I have nothing to compare it to. Still seems like a lot of houses up for sale.


----------



## Firefly

*
Apologies..forgot to add the annual subbing  costs..only realised after sent


Year​*​​​*Principal​*​​​*Yearly Shortfall​*​​​*Total​*​​​*3.5% Dep Interest​*​​​*Total​*​​​0​​​24,850.00​​​9,778.00​​​34,628.00​​​1.035​​​*35,839.98​*​​​1​​​*35,839.98​*​​​9,778.00​​​45,617.98​​​1.035​​​47,214.61​​​2​​​47,214.61​​​9,778.00​​​56,992.61​​​1.035​​​58,987.35​​​3​​​58,987.35​​​9,778.00​​​68,765.35​​​1.035​​​71,172.14​​​4​​​71,172.14​​​9,778.00​​​80,950.14​​​1.035​​​83,783.39​​​5​​​83,783.39​​​9,778.00​​​93,561.39​​​1.035​​​96,836.04​​​6​​​96,836.04​​​9,778.00​​​106,614.04​​​1.035​​​110,345.53​​​7​​​110,345.53​​​9,778.00​​​120,123.53​​​1.035​​​124,327.86​​​8​​​124,327.86​​​9,778.00​​​134,105.86​​​1.035​​​138,799.56​​​9​​​138,799.56​​​9,778.00​​​148,577.56​​​1.035​​​153,777.78​​​10​​​153,777.78​​​9,778.00​​​163,555.78​​​1.035​​​169,280.23​​​11​​​169,280.23​​​9,778.00​​​179,058.23​​​1.035​​​185,325.27​​​12​​​185,325.27​​​9,778.00​​​195,103.27​​​1.035​​​201,931.88​​​13​​​201,931.88​​​9,778.00​​​211,709.88​​​1.035​​​219,119.73​​​14​​​219,119.73​​​9,778.00​​​228,897.73​​​1.035​​​236,909.15​​​15​​​236,909.15​​​9,778.00​​​246,687.15​​​1.035​​​255,321.20​​​16​​​255,321.20​​​9,778.00​​​265,099.20​​​1.035​​​274,377.67​​​17​​​274,377.67​​​9,778.00​​​284,155.67​​​1.035​​​294,101.12​​​18​​​294,101.12​​​9,778.00​​​303,879.12​​​1.035​​​314,514.89​​​19​​​314,514.89​​​9,778.00​​​324,292.89​​​1.035​​​335,643.14​​​20​​​335,643.14​​​9,778.00​​​345,421.14​​​1.035​​​357,510.88​​​21​​​357,510.88​​​9,778.00​​​367,288.88​​​1.035​​​380,143.99​​​22​​​380,143.99​​​9,778.00​​​389,921.99​​​1.035​​​403,569.26​​​23​​​403,569.26​​​9,778.00​​​413,347.26​​​1.035​​​427,814.41​​​24​​​427,814.41​​​9,778.00​​​437,592.41​​​1.035​​​452,908.15​​​25​​​452,908.15​​​9,778.00​​​462,686.15​​​1.035​​​478,880.16​​​26​​​478,880.16​​​9,778.00​​​488,658.16​​​1.035​​​505,761.20​​​27​​​505,761.20​​​9,778.00​​​515,539.20​​​1.035​​​533,583.07​​​28​​​533,583.07​​​9,778.00​​​543,361.07​​​1.035​​​562,378.71​​​29​​​562,378.71​​​9,778.00​​​572,156.71​​​1.035​​​592,182.19​​​30​​​592,182.19​​​9,778.00​​​601,960.19​​​1.035​​​623,028.80​​​So the actual return is 600k which is altogether different!!!!


----------



## Firefly

*Year​*​​​*Principal​*​​​*Yearly Shortfall​*​​​*Total​*​​​*3.5% Dep Interest​*​​​*Total​*​​​0​​​24,850.00​​​9,778.00​​​34,628.00​​​1.035​​​*35,839.98​*​​​1​​​*35,839.98​*​​​9,778.00​​​45,617.98​​​1.035​​​47,214.61​​​2​​​47,214.61​​​9,778.00​​​56,992.61​​​1.035​​​58,987.35​​​3​​​58,987.35​​​9,778.00​​​68,765.35​​​1.035​​​71,172.14​​​4​​​71,172.14​​​9,778.00​​​80,950.14​​​1.035​​​83,783.39​​​5​​​83,783.39​​​9,778.00​​​93,561.39​​​1.035​​​96,836.04​​​6​​​96,836.04​​​9,778.00​​​106,614.04​​​1.035​​​110,345.53​​​7​​​110,345.53​​​9,778.00​​​120,123.53​​​1.035​​​124,327.86​​​8​​​124,327.86​​​9,778.00​​​134,105.86​​​1.035​​​138,799.56​​​9​​​138,799.56​​​9,778.00​​​148,577.56​​​1.035​​​153,777.78​​​10​​​153,777.78​​​9,778.00​​​163,555.78​​​1.035​​​169,280.23​​​11​​​169,280.23​​​9,778.00​​​179,058.23​​​1.035​​​185,325.27​​​12​​​185,325.27​​​9,778.00​​​195,103.27​​​1.035​​​201,931.88​​​13​​​201,931.88​​​9,778.00​​​211,709.88​​​1.035​​​219,119.73​​​14​​​219,119.73​​​9,778.00​​​228,897.73​​​1.035​​​236,909.15​​​15​​​236,909.15​​​9,778.00​​​246,687.15​​​1.035​​​255,321.20​​​16​​​255,321.20​​​9,778.00​​​265,099.20​​​1.035​​​274,377.67​​​17​​​274,377.67​​​9,778.00​​​284,155.67​​​1.035​​​294,101.12​​​18​​​294,101.12​​​9,778.00​​​303,879.12​​​1.035​​​314,514.89​​​19​​​314,514.89​​​9,778.00​​​324,292.89​​​1.035​​​335,643.14​​​20​​​335,643.14​​​9,778.00​​​345,421.14​​​1.035​​​357,510.88​​​21​​​357,510.88​​​9,778.00​​​367,288.88​​​1.035​​​380,143.99​​​22​​​380,143.99​​​9,778.00​​​389,921.99​​​1.035​​​403,569.26​​​23​​​403,569.26​​​9,778.00​​​413,347.26​​​1.035​​​427,814.41​​​24​​​427,814.41​​​9,778.00​​​437,592.41​​​1.035​​​452,908.15​​​25​​​452,908.15​​​9,778.00​​​462,686.15​​​1.035​​​478,880.16​​​26​​​478,880.16​​​9,778.00​​​488,658.16​​​1.035​​​505,761.20​​​27​​​505,761.20​​​9,778.00​​​515,539.20​​​1.035​​​533,583.07​​​28​​​533,583.07​​​9,778.00​​​543,361.07​​​1.035​​​562,378.71​​​29​​​562,378.71​​​9,778.00​​​572,156.71​​​1.035​​​592,182.19​​​30​​​592,182.19​​​9,778.00​​​601,960.19​​​1.035​​​623,028.80​​​


----------



## Firefly

Trying to post this bleeding thing properly!!

 Year   Principal   Yearly Shortfall   Total   3.5% Dep Interest   Total 
 0   24,850.00   9,778.00   34,628.00   1.035   35,839.98 
 1   35,839.98   9,778.00   45,617.98   1.035   47,214.61 
 2   47,214.61   9,778.00   56,992.61   1.035   58,987.35 
 3   58,987.35   9,778.00   68,765.35   1.035   71,172.14 
 4   71,172.14   9,778.00   80,950.14   1.035   83,783.39 
 5   83,783.39   9,778.00   93,561.39   1.035   96,836.04 
 6   96,836.04   9,778.00   106,614.04   1.035   110,345.53 
 7   110,345.53   9,778.00   120,123.53   1.035   124,327.86 
 8   124,327.86   9,778.00   134,105.86   1.035   138,799.56 
 9   138,799.56   9,778.00   148,577.56   1.035   153,777.78 
 10   153,777.78   9,778.00   163,555.78   1.035   169,280.23 
 11   169,280.23   9,778.00   179,058.23   1.035   185,325.27 
 12   185,325.27   9,778.00   195,103.27   1.035   201,931.88 
 13   201,931.88   9,778.00   211,709.88   1.035   219,119.73 
 14   219,119.73   9,778.00   228,897.73   1.035   236,909.15 
 15   236,909.15   9,778.00   246,687.15   1.035   255,321.20 
 16   255,321.20   9,778.00   265,099.20   1.035   274,377.67 
 17   274,377.67   9,778.00   284,155.67   1.035   294,101.12 
 18   294,101.12   9,778.00   303,879.12   1.035   314,514.89 
 19   314,514.89   9,778.00   324,292.89   1.035   335,643.14 
 20   335,643.14   9,778.00   345,421.14   1.035   357,510.88 
 21   357,510.88   9,778.00   367,288.88   1.035   380,143.99 
 22   380,143.99   9,778.00   389,921.99   1.035   403,569.26 
 23   403,569.26   9,778.00   413,347.26   1.035   427,814.41 
 24   427,814.41   9,778.00   437,592.41   1.035   452,908.15 
 25   452,908.15   9,778.00   462,686.15   1.035   478,880.16 
 26   478,880.16   9,778.00   488,658.16   1.035   505,761.20 
 27   505,761.20   9,778.00   515,539.20   1.035   533,583.07 
 28   533,583.07   9,778.00   543,361.07   1.035   562,378.71 
 29   562,378.71   9,778.00   572,156.71   1.035   592,182.19 
 30   592,182.19   9,778.00   601,960.19   1.035   623,028.80


----------



## Firefly

So it's 623k after 30 years.......(eventually!!)
F


----------



## BigM

hmmm said:


> I'm trying to figure out what you're doing and can't decide if I've completely misunderstood you or you've made a big mistake. Your subsidy is about 10k a year, so how do you end up with only 100k after 30 years (ignoring all other calculations)?


 
It looks like Firefly copied down the wrong interest calculation, i.e. on the original outlay.
When you add in the 9,778 pa, total investment after 30yrs is 623,721.64

Just noticed already answered! sorry


----------



## whizzbang

CelloPoint said:


> Looks rather alarming to me. But then again, I have nothing to compare it to. Still seems like a lot of houses up for sale.



It would be interesting to see what percentage of property in these areas is currently up for sale 5%? 10%?Not sure how to find out the total houses in this view short of going through all the CSO records!


----------



## BigM

whizzbang said:


> It would be interesting to see what percentage of property in these areas is currently up for sale 5%? 10%?Not sure how to find out the total houses in this view short of going through all the CSO records!


Definitely would not like to be selling a house in the big estates outside the M50... check out the number of properties for sale in Clonsilla 100; Lucan 113; Clondalkin 141; Tallaght 181...
With that amount of supply prices must be coming down, mustn't they?


----------



## whizzbang

BigM said:


> Definitely would not like to be selling a house in the big estates outside the M50... check out the number of properties for sale in Clonsilla 100; Lucan 113; Clondalkin 141; Tallaght 181...
> With that amount of supply prices must be coming down, mustn't they?



It depends if sellers are thinking "I'm not accepting anything less than X +10% because yer wan down the road got X three months ago"


----------



## CelloPoint

BigM said:


> Definitely would not like to be selling a house in the big estates outside the M50... check out the number of properties for sale in Clonsilla 100; Lucan 113; Clondalkin 141; Tallaght 181...
> With that amount of supply prices must be coming down, mustn't they?



Total number of properties for sale on daft.ie is still only 17645 today - it's been bouncing under the 18k mark for a couple of weeks now. Personally, my opinion is that this figure is being doctored by the site admins.


----------



## BigM

CelloPoint said:


> Total number of properties for sale on daft.ie is still only 17645 today - it's been bouncing under the 18k mark for a couple of weeks now. Personally, my opinion is that this figure is being doctored by the site admins.


 
You're probably right but even if they're being overstated by 50% they're still huge numbers.


----------



## robd

BigM said:


> Definitely would not like to be selling a house in
> the big estates outside the M50... check out the number of properties
> for sale in Clonsilla 100; Lucan 113; Clondalkin 141; Tallaght 181...
> With that amount of supply prices must be coming down, mustn't
> they?


Are these Daft figures? I get slightly higher on MyHome:<br>

Beds  Lucan  Tallaght  Clondalkin Blanch Clonsilla
 2-  18  46  50  33  23
 3  137  156*  101  34  60
 4+ 56  27  22  5  31
211  229  173  72  114

 * Calculated as Terraced  +  Not Terraced (everything selected bar Terraced)


----------



## Neffa

robd said:


> Here's a copy from a spreadsheet I did a number of months ago.
> 
> Gross Yield        3.348837209
> Net Yield        2.951860465


 
Have you just defined net yield as (income-expenses)/price?

In *none* of your calculations does the rent cover the mortgage. Did you factor that into the yield calc?


----------



## Firefly

To get the same return over 30 years, the property woulod only have to increase 2.25% anually

Year Apt Value %incr Total
0 317000  1.0225 324132.5
1 324132.5 1.0225 331425.4813
2 331425.4813 1.0225 338882.5546
3 338882.5546 1.0225 346507.4121
4 346507.4121 1.0225 354303.8288
5 354303.8288 1.0225 362275.665
6 362275.665 1.0225 370426.8674
7 370426.8674 1.0225 378761.472
8 378761.472 1.0225 387283.6051
9 387283.6051 1.0225 395997.4862
10 395997.4862 1.0225 404907.4296
11 404907.4296 1.0225 414017.8468
12 414017.8468 1.0225 423333.2483
13 423333.2483 1.0225 432858.2464
14 432858.2464 1.0225 442597.557
15 442597.557 1.0225 452556.002
16 452556.002 1.0225 462738.5121
17 462738.5121 1.0225 473150.1286
18 473150.1286 1.0225 483796.0065
19 483796.0065 1.0225 494681.4166
20 494681.4166 1.0225 505811.7485
21 505811.7485 1.0225 517192.5128
22 517192.5128 1.0225 528829.3444
23 528829.3444 1.0225 540728.0046
24 540728.0046 1.0225 552894.3847
25 552894.3847 1.0225 565334.5084
26 565334.5084 1.0225 578054.5348
27 578054.5348 1.0225 591060.7619
28 591060.7619 1.0225 604359.629
29 604359.629 1.0225 617957.7206
30 617957.7206 1.0225 631861.7694


What do you think???
Firefly


----------



## BigM

robd said:


> Are these Daft figures? I get slightly higher on MyHome:
> 
> Beds Lucan Tallaght Clondalkin Blanch Clonsilla
> 2- 18 46 50 33 23
> 3 137 156* 101 34 60
> 4+ 56 27 22 5 31
> -----------------------------------------
> 211 229 173 72 114
> 
> * Calculated as Terraced + Not Terraced (everything selected bar Terraced)


They're Daft - just taken from a quick perusal of the Map Search posted earlier..


----------



## Neffa

BigM said:


> You're probably right but even if they're being overstated by 50% they're still huge numbers.


 
Just thinking about this point. 

London agents have often said that 2% of property for sale is effectively breakeven. Above that and you generally see prices trend downwards, below that and their is insufficient supply so prices rise. 

In fact, one of the odd things we noticed about property in Dublin after returning from London was just how little there was for sale (I'm talking about the 3-4 bed family homes market, not the glut of 1-2 bed apartments). In our old street in London, with about 130 houses on it, 3 or so were sold every year. Contrast that with the area in Dublin we live in now where only 3 houses out of 500+ have sold in the last year.

We know from the census that there are about 1.8-1.9m households in the country. So it looks like Daft has 0.9% of the entire housing stock for sale at present. Question is - how much of the market do they cover? If it is only about 40% of the market, then that would suggest we are heading towards a tipping point. If they have a lot more than that, then perhaps supply is still tight.


----------



## bearishbull

Jaysis , enough with figures/numbers already ,this thread is'nt calculate my BTL property and the daft/myhome figures mean little by themselves unless you have complete market data for last year etc.


----------



## BigM

bearishbull said:


> daft/myhome figures mean little by themselves unless you have complete market data for last year etc.


 
I agree the figures don't have any empirical value  - and there's no point in comparing how many more houses there are on the sites now compared to last year (due to site popularity etc etc) but I still think they are useful for reinforcing (my own belief anyway) the anecdotal evidence that we are in a period of plentiful supply. Something also borne out by the bumper 76page IT supplement last week. The question remains, when does/has plentiful supply become oversupply?


----------



## robd

Neffa said:


> Have you just defined net yield as (income-expenses)/price?


 Yes.  Thats what Net Yield is (it doesn't include cost of finance).


Neffa said:


> In *none* of your calculations does the rent cover the mortgage.


I'm well aware of that.  That was the whole point of the post.


----------



## whathome

*Key workers can't afford houses in main cities*

http://www.rte.ie/business/2006/0920/housing.html




> Key public sector workers in Ireland - nurses, fire fighters, teachers and Gardai - can not afford to buy an average house in four out of five of the country's largest cities.
> 
> It says that nurses and members of the fire brigade are the worst affected key worker groups. Average house prices in Dublin are over 13 times the average salary of both professions.


 

... what about the average Joe/Jane? - they don't earn as much as public sector workers and certainly don't have the same level of job security. Are Halifax trying to inject public sector wage inflation so that house prices don't look as crazy? Public sector union leaders are going love this ammunition!


----------



## whathome

...interesting, Halifax did the exact same thing in the UK two months ago:

http://news.bbc.co.uk/2/hi/business/5225056.stm

UK : "The average property is beyond the reach of police, nurses, teachers, firemen and ambulance staff in all towns in the South-West, compared with 15% five years ago."

...they must have been happy with the results from the PR in the UK so tried the same trick here!


----------



## sell em all

Here's an interesting article from Brad Setser on the European housing bubble. From an Irish point of view the second graph is interesting. It suggests Irish residential investment reached 14% of GDP in 2005, way our of line with historical data and other countries (bar Spain). More fuel for those who believe even a slowdown(soft landing) could have a significant effect on the economy at large. 
  The other point he makes is that because of this level of investment supply is not the problem in ireland or Spain. It has to be demand!(investors, immigrants?). This is distinctly different from the other countries(GB, France Italy) where he sees supply as the main problem.
Regards 
http://www.rgemonitor.com/blog/setser/146495


----------



## Duplex

whathome said:


> ... what about the average Joe/Jane? - they don't earn as much as public sector workers and certainly don't have the same level of job security. Are Halifax trying to inject public sector wage inflation so that house prices don't look as crazy? Public sector union leaders are going love this ammunition!


 
Average Joe/Jane are *not* key workers, they merely earn the tax money to pay for key workers. You forget that Ireland operates in a perverse manner when it comes to economic truisms.


----------



## whathome

Duplex said:


> Average Joe/Jane are *not* key workers, they merely earn the tax money to pay for key workers. You forget that Ireland operates in a perverse manner when it comes to economic truisms.


 
As usual, it's the private sector workers that get ignored. Public sector jobs are more highly paid, have total job security and yet always seem to garner sympathy from the average Joe or Jane during industrial action.

Many of the people I know with multiple properties are teachers, Gardai, civil servants etc. Some with 3+ properties. The banks love lending to them because their jobs are so secure, this report doesn't take that into consideration!


----------



## Remix

whathome said:


> ...interesting, Halifax did the exact same thing in the UK two months ago:
> 
> http://news.bbc.co.uk/2/hi/business/5225056.stm
> 
> UK : "The average property is beyond the reach of police, nurses, teachers, firemen and ambulance staff in all towns in the South-West, compared with 15% five years ago."
> 
> ...they must have been happy with the results from the PR in the UK so tried the same trick here!


 
More Details at finfacts

According to the study:

The problem:
The study recognises that the housing bubble has pushed prices way beyond the affordability level of key workers.

The solution:
Need more innovation in borrowing ! ha! ha!  

You'd never guess the study was funded by a bank would you ?


----------



## whathome

Remix said:


> You'd never guess the study was funded by a bank would you ?


 
You're right - it's also huge PR for their recently announced rebranding.


----------



## whathome

Doesn't look like cottages in Glasthule are the "must have" fashion accessory this winter:

[broken link removed]


----------



## cjh

Regarding the supply issue, there are 198 houses on daft in Mullingar, which seems to me to be alot..
With that kind of choice, it has to be a buyers market there.


----------



## Duplex

Remix said:


> More Details at finfacts
> 
> According to the study:
> 
> The problem:
> The study recognises that the housing bubble has pushed prices way beyond the affordability level of key workers.
> 
> The solution:
> Need more innovation in borrowing ! ha! ha!
> 
> You'd never guess the study was funded by a bank would you ?


 
We should consider the American approach.  Rather than inflationary and  damaging wage demands or adding more debt to secure that most indebted nation on Earth title; how about a little deflation in house prices?  

These figures relate to the past 30 days only, if one were to annualise the trend we are talking about 10-15% drops across the US.

http://housing-watch.com/home.aspx?d=30


----------



## Neffa

Firefly said:


> To get the same return over 30 years, the property woulod only have to increase 2.25% anually
> 
> 
> What do you think???
> Firefly


 
You've forgotten to subtract the subsidy each year for the gap between rent and mortgage - makes a big difference.


----------



## SHARP

whathome said:


> Doesn't look like cottages in Glasthule are the "must have" fashion accessory this winter:
> 
> [broken link removed]


 

This link should be given to anyone who doesn't think that this country property market is on the edge of serious trouble.

Anyone that would spend half a million on some of these properties, really do need to be taken aside and slapped.


----------



## mf1

Finding this all very interesting - just to add my own tuppence worth. 

For the first time in years, I noticed in August the use of the phrase "asking price" in ads. It is many years since anything other than "guiding" was used. Guiding became a euphemism for won't accept anything less than 10% above. Asking price sounds like willing to talk.  

Passing DNG and Felicity Fox offices today - a number of properties with little stickers over the original price with the new reduced price. 

Two clients stuck with can't sell properties in Palmerstown. Three investors exiting market ( perhaps even too late?) thinking capital appreciation is done.

I will continue to watch with great interest how it all unfolds.

mf


----------



## mortimer33

SHARP said:


> This link should be given to anyone who doesn't think that this country property market is on the edge of serious trouble.
> 
> Anyone that would spend half a million on some of these properties, really do need to be taken aside and slapped.


 
What do you mean?!
For only 400k you can get a spacious 478 sq ft apt that you can decorate to your very own taste..Ahem


----------



## cjh

SHARP said:


> This link should be given to anyone who doesn't think that this country property market is on the edge of serious trouble.
> 
> Anyone that would spend half a million on some of these properties, really do need to be taken aside and slapped.


 

It's a sad fact that the reason those properties probably won't be sold at those ridicilous prices is not because there aren't idiots to pay it, but because the banks can no longer loan the idiots the money due to ECB rate increases.


----------



## murray

Glasthule cottage sale agreed for 550 ish I am told from a very reliable source.........


mf1 -  ''For the first time in years, I noticed in August the use of the phrase "asking price" in ads. It is many years since anything other than "guiding" was used. Guiding became a euphemism for won't accept anything less than 10% above. Asking price sounds like willing to talk. ''

mf1 , Dont be fooled - this came in when 'AMV' replaced 'guide price' etc... it is coincidential that the softening of the market happened at the same time..'asking price' was requested by the IAVI instead of the previously used 'in excess of' ..... all a load of s***e really - its worth what the market will pay.....blah..blah..blah...

I agree with SHARP - half a mill ! taking the pi** !!!


----------



## cjh

murray said:


> Glasthule cottage sale agreed for 550 ish I am told from a very reliable source.........
> 
> 
> Which of the cottages?


----------



## Firefly

Anyone any feedback on the calcs I did.....that a 317k apartment only needs to accumulate by 2.25% annually over the next 30 years, to reach the same point where the initial costs of purchase plus the subsidising amount would get earning 3.5% sitting in the bank....seems to me like this property could be a good bet....

Firefly


----------



## Jister

murray said:


> Glasthule cottage sale agreed for 550 ish I am told from a very reliable source.........


 
Theres a fool born every minute!


----------



## room305

Firefly said:


> Anyone any feedback on the calcs I did.....that a 317k apartment only needs to accumulate by 2.25% annually over the next 30 years, to reach the same point where the initial costs of purchase plus the subsidising amount would get earning 3.5% sitting in the bank....seems to me like this property could be a good bet....



I couldn't follow them unfortunately. Personally I don't think either is a particularly good idea for what to do with €20k.


----------



## redo

Jister said:


> Theres a fool born every minute!


Thats well inexcess of 110880 fools since this thread started.  Maybe there is a supply shortage of properies in Ireland after all!


----------



## Firefly

Thanks redo...I might start a new thread on what to do with 25k lump sum and 10k per year to invest...

F.


----------



## poormouth

Folks,

A bit of anecdotal evidence on the state of the housing market .
It sounds boomier than ever. An acquaintance of mine put his house up
for sale recently. Had approx. 30 viewers  and presently a number of active bidders. Looks like it will go for well above asking.


----------



## redo

poormouth said:


> Folks,
> 
> A bit of anecdotal evidence on the state of the housing market .
> It sounds boomier than ever. An acquaintance of mine put his house up
> for sale recently. Had approx. 30 viewers  and presently a number of active bidders. Looks like it will go for well above asking.


Can you give an idea of the Location.  I suspect it is in a "highly sought after area".


----------



## Firefly

Can you pls give details of where, what type of house and asking price....
Tx
F


----------



## poormouth

Firefly said:


> Can you pls give details of where, what type of house and asking price....
> Tx
> F


Where is Galway don't know other details


----------



## hmmm

Firefly said:


> Anyone any feedback on the calcs I did.....that a 317k apartment only needs to accumulate by 2.25% annually over the next 30 years, to reach the same point where the initial costs of purchase plus the subsidising amount would get earning 3.5% sitting in the bank....seems to me like this property could be a good bet....
> Firefly



Firefly, only an idiot would invest his 20k + 10k in the bank earning 3.5%. The long run return on the stock market would be about 10% (give or take a few %). Plug that into your figures, and after 30 years you would have over 2.2 million, non inflation adjusted.

For your property to make that, it would need to appreciate by 7% a year. That's a tall order considering that property in the long run (100 years) has returned 2% a year, and we are on the back end of the longest bull run in property ever. If your property falls in price at the beginning of your calculation, you're looking at more like 10% + appreciation.

On the raw figures subsidising rents does not make sense, and decades of good property investment practice are not going to be overturned by this wishy washy new age property economics we're experiencing.


----------



## conor_mc

hmmm said:


> On the raw figures subsidising rents does not make sense, and decades of good property investment practice are not going to be overturned by this wishy washy new age property economics we're experiencing.


 
But its a new paradigm....!!!


----------



## ivuernis

hmmm said:


> Firefly, only an idiot would invest his 20k + 10k in the bank earning 3.5%. The long run return on the stock market would be about 10% (give or take a few %). Plug that into your figures, and after 30 years you would have over 2.2 million, non inflation adjusted.


 
30k @ 10% per year over 30yrs is ~520k, not 2.2m.


----------



## room305

ivuernis said:


> 30k @ 10% per year over 30yrs is ~520k, not 2.2m.



It's €20k initial deposit plus an additional €10k a year.


----------



## murray

cjh said:


> murray said:
> 
> 
> 
> Glasthule cottage sale agreed for 550 ish I am told from a very reliable source.........
> 
> 
> Which of the cottages?
> 
> 
> 
> 
> 
> number 7 - from whathome's link.
Click to expand...


----------



## RiceCakes

A bargain!, I'm sure its going to be a PPR  ....


----------



## TallSpoon

http://www.daft.ie/searchinternational_sale.daft?id=82475

40 bedroom in renovated hotel for €831k


----------



## Duplex

TallSpoon said:


> http://www.daft.ie/searchinternational_sale.daft?id=82475
> 
> 40 bedroom in renovated hotel for €831k


 

That's a tidy looking building and looks cheap as chips from an Irish prospective.   But this looks cheaper


----------



## Duplex

madisona said:


> Damn. why didn't ye post those sooner. I've just spent all my money on a cottage in Glasthule.


 

Well hows about 2,550-3,000 sq ft of new build in Massachusetts, not far from Boston, for the price of a ahem... micro cottage in Glasthule. Builders are offering incentives and prices are still falling so don't hurry ya here. 


http://www.tollbrothers.com/homesearch/servlet/HomeSearch?app=model_description&plan_id=26703


----------



## Jeanne

TallSpoon said:


> http://www.daft.ie/searchinternational_sale.daft?id=82475
> 
> 40 bedroom in renovated hotel for €831k


 

Holy Toledo!   See ya folks, I'm moving to Liepzig!


----------



## minky

TallSpoon said:


> http://www.daft.ie/searchinternational_sale.daft?id=82475
> 
> 40 bedroom in renovated hotel for €831k



It really puts the prices here into perspective doesn't it!


----------



## Maine

A senior colleague has just rented a house in very expensive part of D4 at a yield of 1%.......


----------



## Firefly

hmmm,

You're quite right! The average return from the S&P 500 from 1965 to 2005 was 10.3% (with dividends re-invested) http://www.berkshirehathaway.com/letters/2005ltr.pdf

The property would have to increase by 7% annually adn yed I agree it is  atall order. I have been a bull until recently as I mentioned before but it's not until you do a costing like this that it drives home how we are at a high. The numbers don't lie.....

Firefly


----------



## beattie

Maine said:


> A senior colleague has just rented a house in very expensive part of D4 at a yield of 1%.......


 
That is what I would expect, my landlord in an exclusive estate in D4 is yielding approx 1.7%. I hope he keeps subsidising me for many months to come.....


----------



## bearishbull

Firefly said:


> hmmm,
> 
> You're quite right! The average return from the S&P 500 from 1965 to 2005 was 10.3% (with dividends re-invested) http://www.berkshirehathaway.com/letters/2005ltr.pdf
> 
> The property would have to increase by 7% annually adn yed I agree it is atall order. I have been a bull until recently as I mentioned before but it's not until you do a costing like this that it drives home how we are at a high. The numbers don't lie.....
> 
> Firefly


Take alternative investment calculations and deliberations to the appropriate forum, every one on this thread knows(or should know) how overvalued dublin property is and all this has been covered many time before. Lets keep the thread to sentiment in irush market as it unfolds.


----------



## CelloPoint

beattie said:


> That is what I would expect, my landlord in an exclusive estate in D4 is yielding approx 1.7%. I hope he keeps subsidising me for many months to come.....



I live in a rented townhouse in Darty - I calculated the yield around the 1% mark too...

My office colleague has a flat in Blanchardstown and it takes him about 2 hours to get to work in the morning - if only he'd swallow his pride and rent, he could live it up in D6 for about 60-70% of his mortgage in a volatile market.


----------



## whathome

Check this one out, not only did they lower the price by 10k but they moved the house!

Original price/location: Drumcondra, Dublin 9 for €550,000 (top of list)


New price/location: Marino, Dublin 3 for €540,000
[broken link removed]=


----------



## Sidewinder

My sister and her husband just STR'd their house in Cavan, got 10K over the asking price, profit of nearly 150K...on the market for _three days. _Retired couple are buying so no chain.

Course, the rest of the family are loudly telling them they're mad, property only goes up, never going to be a crash, yadda yadda. I'm the only one telling them they did the right thing.

So Laddermania is alive and well. I guess sentiment won't really shift until the ECB raise rates another 50 basis points and the meeja begins to report the US crash.


----------



## whathome

Here's another house that failed at auction and is now asking significantly under it's auction AMV. It's in one of those areas that some people believe will not be hit....I really don't understand the thinking that redbricks in leafy suburbs are safe from falling prices, it's complete rubbish. Prices have rapidly scaled to unbelievable heights, there is absolutely no reason why they would not fall in these areas.

Original AMV €3,200,000


New price : €2,950,000
[broken link removed]


----------



## ncs

Not just that, but the description has been 'upgraded' from end-of-terrace to semi-d...


----------



## CelloPoint

whathome said:


> Here's another house that failed at auction and is now asking significantly under it's auction AMV. It's in one of those areas that some people believe will not be hit....I really don't understand the thinking that redbricks in leafy suburbs are safe from falling prices, it's complete rubbish. Prices have rapidly scaled to unbelievable heights, there is absolutely no reason why they would not fall in these areas.



This is something I have come around to over the last couple of weeks. In conclusion, I don't believe embassy belt red-bricks will survive the shock wave (the epicentre being in the Lucan/Adamstown area).


----------



## CelloPoint

BigM said:


> the bumper 76page IT supplement last week. The question remains, when does/has plentiful supply become oversupply?



Yeah, the bumper property supplements is something I have noticed alright. It is very hard to estimate how many properties are on the market at the moment, but I would guess this figure to be in the region of 50,000-70,000 at this moment in time.

Logic: 20k on daft, 20k on myhome, 20k in property supplements, 10k affordable housing (give or take a bit of overlap).

So yes, definite oversupply.


----------



## thewatcher

Duplex said:


> We should consider the American approach. Rather than inflationary and damaging wage demands or adding more debt to secure that most indebted nation on Earth title; how about a little deflation in house prices?


 
A five year old could tell you the same thing,but apart from the people on this thread and a few lonely souls in the media,very few other people want the merry-go-round to stop.
As bertie himself said,many irish have become so selfish they have no problem taking short term gain at the expence of the long term future of the nation and indeed their own children in many cases.
With the happenings in Thailand and Hungary this week it's kind of scary to see how shakey things can become very quickly in a democracy.
This country seems to be going down a very unequal route aswell where the interests of the few come before the interests of the many.

http://www.rte.ie/business/2006/0920/housing.html

When a person on a good wage cannot afford to buy a home,then there is something very rotten going on in this country.


----------



## RugbyBoy

And the public sector workers are well paid so what chance do the rest of us have!

"the majority of whom are in well-paid public sector jobs (average pay in the public sector is some 30pc higher than that in the private sector). " from
http://www.chambers.ie/index.php?id=331



Probably linked previously but 
http://www.finfacts.com/irelandbusinessnews/publish/article_10006332.shtml


----------



## Maine

whathome said:


> Original AMV €3,200,000
> 
> 
> New price : €2,950,000
> [broken link removed]


 
Lets be generous and say it is "worth" US$ 2m. It is still up for sale for US$4m. IMO thats what is coming the way of the leafy suburb. US$2m at 5% is still a cost of US$100k. 

This is also clear from the Toll Brothers link in that US house prices are significantly lower than Ireland.

"Lowish" prices relative outside the Pale mean the dream purchaser for house sellers is a trader downer from Dublin after cashing in who will pay an extra 50,000 if they like the property as they will have already achieved "Glasthule prices" on their property


----------



## Jister

There is no reason why something like this could not happen here:

HUNDREDS of Irish property investors were last night nervously monitoring the political crisis in Hungary after predictions that the value of their investments could plummet. 
There are fears that the country's currency could fall 20pc against the euro, as the political and civil crisis adds to the country's already severe economic problems. 
Such a fall would wipe out the property gains made by Irish investors over the last two or three years who bought in euro. It would also reduce the euro value of any rental income. 
One analyst described the Hungarian situation as "an Asian-style financial crisis in the making". 
"In a worst case scenario, the Hungarian forint could fall from 270 to the euro to 330 by the end of the year," said Maya Bhandari at London-based Lombard Street Research. 
Even before the political eruptions, Hungary was wrestling with the biggest budget deficit and the largest government debt among the countries which joined the EU in 2004.


----------



## redo

CelloPoint said:


> This is something I have come around to over the last couple of weeks. In conclusion, I don't believe embassy belt red-bricks will survive the shock wave (the epicentre being in the Lucan/Adamstown area).


I necessarily agree that THE epicentre will be in Lucan.  Multiple epicentres; D15, North Co. Dublin (Balbriggin/Lusk etc), Lucan.  

Anywhere where there is a high proportion of mixed developments (apartments/duplex/3&4 beds) with management fees.


----------



## delboy159

My boss at work has been keeping me up to speed on her neices house sale in South City Dublin.

The AMV was 1m, but the were hoping to get 1.25/1.3m at auction.  They had low inquiries and very few bookings for the auction - so they were getting very nervous.  Then a guy offered 1.2m prior to auction - they were delighted, but said they were expecting 1.3m at auction (even though they were being realistic that 1m might not be achieved), they must be good at poker!.  He came back with 1.27 - and they jumped on it....  There seems to still be a bit of strength in the market still - even with a genuine acknowldgement that things are much slower than they were!.


----------



## bearishbull

delboy159 said:


> My boss at work has been keeping me up to speed on her neices house sale in South City Dublin.
> 
> The AMV was 1m, but the were hoping to get 1.25/1.3m at auction. They had low inquiries and very few bookings for the auction - so they were getting very nervous. Then a guy offered 1.2m prior to auction - they were delighted, but said they were expecting 1.3m at auction (even though they were being realistic that 1m might not be achieved), they must be good at poker!. He came back with 1.27 - and they jumped on it.... There seems to still be a bit of strength in the market still - even with a genuine acknowldgement that things are much slower than they were!.


OBviously a certain amount of high end "must have" properties will nearly always sell . Seemed to be a lot of withdrawals at auctions yesterday
[broken link removed]

If its like this now whats it gonna be like when theres loads more for sale later in the "auction season"?
By looking at prices for those that sold its impossible for me to know whether prices where lower than expected or sales earlier in year.


----------



## Borderlord

Are these boys wise ?. Obviously they haven't read too much into the Florida market. I must say this thread is a must read.

From RTE business news

"FARMERS INVEST IN US GOLF COURSE - More than 100 Irish farmers have come together to fund the $200m (€157.8m) development of a championship golf course and the construction of 550 condominiums in Florida, says the Irish Examiner. The pioneering deal was masterminded by Irish off-farm investment consultants Farrelly and Mitchell, managers for Green Oak Holdings LLC, a US-based company, which is lead partner in the development. Farrelly and Mitchell directors, Philip Farrelly and Malachy Mitchell, set up Green Oak Holdings in 2005 raising equity from farmer investors. The investor equity was supplemented with bank debt bringing the total of this actively managed fund to approximately $25m (€19.6m) and growing. The company acquired its first asset, a retail centre worth $5.5m (€4.3m) in December 2005 and development land in a joint venture arrangement in early 2006."


----------



## conor_mc

According to this article http://www.unison.ie/irish_independent/stories.php3?ca=9&si=1691456&issue_id=14664 there are 30,000 Latvian immigrants in this country sending €300m home every year.

That's an average of €10k per person.

I'd love to hear what Austin Hughes has to say about that. He'd probably tell us these are the wealthiest members of the immigrant community so they can afford massive Irish mortgages _and_ to send €10k a year home to Latvia..... quick everyone, buy, buy, buy before the Latvians price us out of our own property market!!!

(PS they'll also rent a second house each in addition to the one they're buying, so no need to worry about your investment property that, well, that the Latvians actually came here to build for you in the first place...)


----------



## Firefly

I think that Lucan will be OK actually (I don't live there)....most of the people there (while they might prefer to upgrade) can live out a happy enough existance...ie they have a house. It's the apt owners not within 1 sq mile of the city centre I'd be worried about....out just that bit too far for renters to be interested. They will have to trade up at some stage and will be snookered. The leafy D4/D6 houses IMO will be hit big...a lot of people stretched here I reckon, with super mortgages....what's the effect of a .5% rise on a 2m mortgage...it's the middle of the road houses that will be least hit...people will just sit it out if they can afford the repayments...
F


----------



## fatmanknows

7 Houses sell out of 49 under the hammer yesterday. 7 sold afterwards. Market awash with property. Panic has left the auction rooms. Oct and Dec interest rises will bury whats left of the bull.


----------



## Duplex

fatmanknows said:


> 7 Houses sell out of 49 under the hammer yesterday. 7 sold afterwards. Market awash with property. Panic has left the auction rooms. Oct and Dec interest rises will bury whats left of the bull.


 

Holy Cow


----------



## Duplex

Borderlord said:


> Are these boys wise ?. Obviously they haven't read too much into the Florida market. I must say this thread is a must read.
> 
> From RTE business news
> 
> "FARMERS INVEST IN US GOLF COURSE - More than 100 Irish farmers have come together to fund the $200m (€157.8m) development of a championship golf course and the construction of 550 condominiums in Florida, says the Irish Examiner. The pioneering deal was masterminded by Irish off-farm investment consultants Farrelly and Mitchell, managers for Green Oak Holdings LLC, a US-based company, which is lead partner in the development. Farrelly and Mitchell directors, Philip Farrelly and Malachy Mitchell, set up Green Oak Holdings in 2005 raising equity from farmer investors. The investor equity was supplemented with bank debt bringing the total of this actively managed fund to approximately $25m (€19.6m) and growing. The company acquired its first asset, a retail centre worth $5.5m (€4.3m) in December 2005 and development land in a joint venture arrangement in early 2006."


 
Florida is the epicentre of the the US housing bust, condos are selling like rashers of bacon in downtown Mecca.


----------



## xavier

fatmanknows said:


> 7 Houses sell out of 49 under the hammer yesterday. 7 sold afterwards. Market awash with property. Panic has left the auction rooms. Oct and Dec interest rises will bury whats left of the bull.


 

"They" have been flagging this week as not counting for the past few weeks in the press on account of everybody being out in the boonies watching the Ryder Cup.

"They" being property types interviewed on radio and in the press.

No panic people - sure all the moneybags were watchin golf, they'll be back with their millions next week.

It all smacks of kicking to touch, delaying the inevitable. Mañana, mañana everything will be ok tomorrow.


----------



## soma

Borderlord said:


> Are these boys wise ?. Obviously they haven't read too much into the Florida market.



I was talking a few weeks back to an Irish specuvestor who had bought a property in florida about a year ago.

I asked him what he thought about the current situation in florida with the condo glut etc.

He looked at me blankly.

This was news to him - and he has alot of skin in the game. Does no-one do any research or keep tabs on their 'investments' anymore..? 

Although in fairness to him, the Irish media have been very quiet about the US situation.


----------



## Afuera

fatmanknows said:


> 7 Houses sell out of 49 under the hammer yesterday. 7 sold afterwards. Market awash with property. Panic has left the auction rooms. Oct and Dec interest rises will bury whats left of the bull.



Ouch! That's a hell of a lot of withdrawns. There's definately change in the air.

If things don't tank altogether before next December's budget I'm guessing that the government will be throwing in a lot of things to try and support the property market for another few months at least. I originally thought that talk of changes to Stamp Duty, CGT were going to be purely cosmetic, but now I'm not so sure....
They could make it very difficult for investors to get out of the market and make it even easier for FTBs to enter it (although I'm not too sure if there are enough greater fools to sustain things as they are). If it collapses after they make any drastic changes they of course will get the blame so it's a very high-risk strategy. They've been so short-term looking throughout their reign that it's a definate possibility they might jump headlong into this. If it blows up on them they would possibly lose all credibility for decades! 

Bertie has said that he likes the summer months so the election is likely to be in May. If they pull the election date further forward it would be an obvious signal that they are worried about the short term future of things.


----------



## phoenix_n

delboy159 said:


> My boss at work has been keeping me up to speed on her neices house sale in South City Dublin.
> 
> The AMV was 1m, but the were hoping to get 1.25/1.3m at auction. They had low inquiries and very few bookings for the auction - so they were getting very nervous. Then a guy offered 1.2m prior to auction - they were delighted, but said they were expecting 1.3m at auction (even though they were being realistic that 1m might not be achieved), they must be good at poker!. He came back with 1.27 - and they jumped on it.... There seems to still be a bit of strength in the market still - even with a genuine acknowldgement that things are much slower than they were!.


 
That guy may just have overspent by 270,000 or even more.Probably thought he got a good deal buying before auction when in fact he may have not. One of the properties that i was watching (asking price 405) has an offer of 410 on it. 

Information is power and many buyers do not realise that the market has changed.


----------



## redo

Lucan (Laraghcon) 3 Bed End of Terrrace

635k


599k @ Myhome
[broken link removed]

_*"Ray Cleare presents No. 34 Prepare to be mesmerized by this stunning 4-bed end of terrace located in one of Lucan’s most prestigious areas"

*_Obviously, people viewing this house are left too mesmerised and stunned to  put a bid in.

EDIT:
These houses in Laraghcon are not usually in the FTB price range.  The majority of people buying these houses are existing people in the Lucan area.  With the oversupply of 3 bed semi's in the Lucan area, it is having a direct imapct in the trade up market also.


----------



## delboy159

phoenix_n - Info is power - you're spot on.

I really believe that if the new owner goes to sell that place in 3/6 months he will not get 1 million for it - bottom line.  Still fair dues on the owners.  They didn't jump on the 1.2m, they earned another 70k, by just bluffing, nothing more!

My own property is having viewings in the coming days - so I'll report back on how things go. The EA said that she was happy with the interest so far (she was honest when we first talked to her - that things are no where near as frantic as 4 months ago) so wait and see!


----------



## liteweight

Firefly said:


> The leafy D4/D6 houses IMO will be hit big...a lot of people stretched here I reckon, with super mortgages....what's the effect of a .5% rise on a 2m mortgage...it's the middle of the road houses that will be least hit...people will just sit it out if they can afford the repayments...
> F



Throw a stone in these leafy suburbs and you'll hit a banker. Six of them on my street (small street). Most I've talked to are happy to pay mortgage at today's rate but, if it goes much higher, they will simply revert to 'perk of the job', which is 3% interest rate. The reason they don't do this at the moment is because they'd have to pay benefit in kind. If interest rates rise sharpy, BIK becomes worth it.


----------



## ninsaga

I see there that some posters are referrign to current prices on auctioneering web sites & then showning prev prices (cached web pages or something).... how can one go back & look at cached pages...how is it done?

ninsaga


----------



## redo

ninsaga said:


> I see there that some posters are referrign to current prices on auctioneering web sites & then showning prev prices (cached web pages or something).... how can one go back & look at cached pages...how is it done?
> 
> ninsaga


When you get a hit in google, you can see under the hit there is a cache under it.


----------



## redo

Lucan -Hansted
This is listed on the same website, two separate entries. Deliberate?

2 bed apt 310k
[broken link removed]

@280k
[broken link removed]


----------



## ninsaga

redo said:


> When you get a hit in google, you can see under the hit there is a cache under it.



Ahh works a treat... thanks


----------



## Remix

ninsaga said:


> I see there that some posters are referrign to current prices on auctioneering web sites & then showning prev prices (cached web pages or something).... how can one go back & look at cached pages...how is it done?
> 
> ninsaga


 
In case it's still not clear to anyone how this is done, here are the steps (pioneered, I believe, by Whathome) I just followed to detect 
a €125,000 reduction in price of a house near me.

The house is 43 Fortfield Park, Terenure on myhome.

1. I go to google and use the search terms: myhome 43 fortfield park

2. Note the 'Cached' word near the end of the first item in the search results.

3. Click on the word 'Cached' and find the old price of this house: €1,600,000

4. Now compare this to the current asking price on myhome (€1,475,000) and voila! one big (unadvertised) price reduction!


----------



## ncs

Just tried this and found the following:

Clonsilla: Feb 06 price €375,000



Current price €440,000 

http://daft.ie/searchsale.daft?search=Search+%BB&s[cc_id]=204&s[a_id]=&s[mnp]=&s[mxp]=&s[bd_no]=3&s[search_type]=area&s[c_id]=1&s[ct_id]=1&s[refreshmap]=1&offset=30&limit=10&id=114341

Now THERE'S optimism. Mind you, I note the absence of the Citroen in the later picture - I'd definitely pay more for a house that didn't have one.


----------



## comanche

Remix said:


> In case it's still not clear to anyone how this is done, here are the steps (pioneered, I believe, by Whathome) I just followed to detect
> a €125,000 reduction in price of a house near me.
> 
> The house is 43 Fortfield Park, Terenure on myhome.
> 
> 1. I go to google and use the search terms: myhome 43 fortfield park
> 
> 2. Note the 'Cached' word near the end of the first item in the search results.
> 
> 3. Click on the word 'Cached' and find the old price of this house: €1,600,000
> 
> 4. Now compare this to the current asking price on myhome (€1,475,000) and voila! one big (unadvertised) price reduction!


 
you can impove this slightly by entering the following search term
site:www.myhome.ie 43 fortfield park


----------



## beattie

Borderlord said:


> Are these boys wise ?. Obviously they haven't read too much into the Florida market. I must say this thread is a must read.
> 
> From RTE business news
> 
> "FARMERS INVEST IN US GOLF COURSE - More than 100 Irish farmers have come together to fund the $200m (€157.8m) development of a championship golf course and the construction of 550 condominiums in Florida, says the Irish Examiner. The pioneering deal was masterminded by Irish off-farm investment consultants Farrelly and Mitchell, managers for Green Oak Holdings LLC, a US-based company, which is lead partner in the development. Farrelly and Mitchell directors, Philip Farrelly and Malachy Mitchell, set up Green Oak Holdings in 2005 raising equity from farmer investors. The investor equity was supplemented with bank debt bringing the total of this actively managed fund to approximately $25m (€19.6m) and growing. The company acquired its first asset, a retail centre worth $5.5m (€4.3m) in December 2005 and development land in a joint venture arrangement in early 2006."


 
I got a shock when I read this as well, and I thought it couldn't get much worse for farmers. I would think that when many other hard up sellers in Florida realise that there is an unlimited supply of saps over here there could be a few more advertisments appearing in our property supplements


----------



## Duplex

soma said:


> I was talking a few weeks back to an Irish specuvestor who had bought a property in florida about a year ago.
> 
> I asked him what he thought about the current situation in florida with the condo glut etc.
> 
> He looked at me blankly.
> 
> This was news to him - and he has alot of skin in the game. Does no-one do any research or keep tabs on their 'investments' anymore..?
> 
> Although in fairness to him, the Irish media have been very quiet about the US situation.


 
http://housing-watch.com/regionview.aspx?city=Miami

A fool and their money.....


----------



## soma

Duplex said:


> A fool and their money.....



A fool and their Bank's money..


----------



## Duplex

soma said:


> A fool and their Bank's money..


 
Much of it 'equity release' (a misnomer if there ever was one, as you don't pay interest on equity) on PPR's.  Thankfully Irish people aren't this foolish when it comes to making decisions on property in their domestic market

A nation of saps and easy marks.


----------



## Lumpsum

Irish Times take on yesterday's auction results a scream:

"Buyers have been adopting a wait and see approach this week as the first big round of auctions got underway.
With supply thought to be about 20 per cent up on last year, many potential buyers were holding back, hoping that houses would be withdrawn and made available for less. The high level of withdrawals at auction yesterday underlines this approach, though there were pockets of good results, notably in Donnybrook where a three-bedroom period house was sold after auction for well over €3 million."

Is this not The Irish Times, totally in hock to the property market after its purchase of myhome.ie, trying but failing not to say that the market is in big trouble?


----------



## beattie

Lumpsum said:


> Irish Times take on yesterday's auction results a scream:
> 
> Is this not The Irish Times, totally in hock to the property market after its purchase of myhome.ie, trying but failing not to say that the market is in big trouble?


 

The IT has been in hock to the property market well before it made the schrewd purchase of myhome.


----------



## Duplex

> Buyers have been adopting a wait and see approach this week as the first big round of auctions got underway


.

What do they mean by this?  buyers buy.  If they had said that spectators or possibly onlookers are adopting a wait and see approach, closer to the truth.  And guess what? the longer they wait..........


----------



## bearishbull

A 3 bed semi house in my area has been put up for sale, the thing is the guy who owns it is head of buying properties for a major retail chain and used to work in senior position for a well known estate agents. He lived in house up until 2003 then moved to larger house nearby but kept this property. If property professionals are selling out then?
I have also been watching inventory in area and its has risen by 25% in last week and many of the properties in area are for sale for months. I had a look on myhome.ie at map of area showing properties for sale and map is quite packed with properties in area and nearby areas


----------



## bearishbull

Plus he's asking 40 grand less than a near identical house sold for 4 months ago.


----------



## Firefly

Presume y'all saw the pile on today's IT prop section...Churchtown House. Bought in 97 for IR700k...after selling off 5 sites from the garden it's now on the market for 10m !! At current morgage rates this is approx 45,000 per month...can anyone tell me where I can get a job that pays this???

Deckchairs on the Titanic starting to slide.....

F.


----------



## thewatcher

I think the bears are being slightly too optimistic,we have yet to see the real stalemate develop between the buyers and sellers but it is begining.The huge number of withdrawls points to the fact that sellers have not yet accepted the new reality,a few smart one's will bite the bullet and take a small loss in profit.
Talking to a few bulls there recently,sentiment is begining to change but there's no panic yet as such. 
Of course a stalemate is the last thing some of the vested interests want, no sales no commission.


----------



## phoenix_n

thewatcher said:


> I think the bears are being slightly too optimistic,we have yet to see the real stalemate develop between the buyers and sellers but it is begining.The huge number of withdrawls points to the fact that sellers have not yet accepted the new reality,a few smart one's will bite the bullet and take a small loss in profit.
> Talking to a few bulls there recently,sentiment is begining to change but there's no panic yet as such.
> Of course a stalemate is the last thing some of the vested interests want, no sales no commission.


 
Nah mate its started. And the more buyers hold off the more pressure on vendor thus confirming buyers nervousness thus holding off longer putting greater pressure on vendors..........crash.

I think anyone here who can look logically at the market can attest that the autumn selling season has stalled. And we all knows what happens when a plane stalls......


----------



## hmmm

phoenix_n said:


> I think anyone here who can look logically at the market can attest that the autumn selling season has stalled.


In fairness, the selling season is well up on last year - it's the buying season that has failed to kick in


----------



## CelloPoint

phoenix_n said:


> Nah mate its started. And the more buyers hold off the more pressure on vendor thus confirming buyers nervousness thus holding off longer putting greater pressure on vendors..........crash.
> 
> I think anyone here who can look logically at the market can attest that the autumn selling season has stalled. And we all knows what happens when a plane stalls......



Can we have a prize for the best analogy?!


----------



## delboy159

hmmm said:


> In fairness, the selling season is well up on last year - it's the buying season that has failed to kick in


 
A good one !

Still looking at some houses I see going up for sale around me I can't believe what they are asking for.  They are all trying to break the ceiling price in the area.  A 3 bed house in my area went on the market in April for 480,000 - fully finished, really top job.  Went for over 500,000 in the end.  That price was a real eye opener to how crazy things were back then. Now a 2 bed in the area - not as well finished, smaller and poor wooden single glazed windows..... is looking for 485,000.... I've never seen a 2 bed in the area sell for over  450,000 (very few are in top notch condition), but still, 485,000 is almost 10% above the ceiling for 2 beds....  What are estate agents and vendors thinking?????


----------



## murray

hmmm said:


> In fairness, the selling season is well up on last year - it's the buying season that has failed to kick in


 

LMAO !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!


----------



## genki33

Have just bought off the plans.

http://www.dublincoastaldevelopment.com/index.html

Need to watch the video to appreciate the deal I got . ;-)


----------



## ncs

This could be an attempt to be canny and give the impression of sustained price rise. I wondered if EAs would create an artificially rosy picture in the current climate by switching from from encouraging bids through undervaluing to to quietly accepting underbids through overvaluing. Thus the asking price would appear to rise yet be a poor guide to the actual settlement price.


----------



## Duplex

genki33 said:


> Have just bought off the plans.
> 
> http://www.dublincoastaldevelopment.com/index.html
> 
> Need to watch the video to appreciate the deal I got . ;-)


 
Was that serious? whats with the giraffe only zoo?



> The development will be constructed in five phases:
> 
> The construction of the South Wall motorway to the proposed development site in Dublin bay.
> The construction of three artificial islands with a total surface area of over 12 square kilometers.
> Infrastructure finalised. The tracks for the luas link tramway are laid. The completion of the link to the East Point Toll bridge and the N11.
> The construction of the impressive central business district, the hub of commerce and industry.
> The construction of the residential areas. The 2 tiers of apartments and villas. *Over 42 thousand separate residences.*
> Welcome to the future of Dublin. Welcome to your future.


----------



## BigM

genki33 said:


> Have just bought off the plans.
> 
> http://www.dublincoastaldevelopment.com/index.html
> 
> Need to watch the video to appreciate the deal I got . ;-)


 
that's fantastic - now all I need to do is become a CEO on 200k+ and they'll consider my application!!
I assume it's a (very elaborate and stylish looking) joke.
Sure when the icecaps melt the whole lot will be under water !!


----------



## genki33

Duplex said:


> Was that serious? whats with the giraffe only zoo?



I view it as a good bit of satire, though given we're living in "la la" land, some may take it seriously.


----------



## Duplex

genki33 said:


> I view it as a good bit of satire, though given we're living in "la la" land, some may take it seriously.


 
A very well made 'spoof', if it wasn't for the giraffe only zoo  I'd have fallen for it.


----------



## whizzbang

genki33 said:


> Have just bought off the plans.
> 
> http://www.dublincoastaldevelopment.com/index.html
> 
> Need to watch the video to appreciate the deal I got . ;-)



They had me going until the Giraffe only zoo....

ahh funda, your timing of coming to the Irish market is almost as comical as your marketing videos


----------



## whizzbang

Duplex said:


> A very well made 'spoof', if it wasn't for the giraffe only zoo  I'd have fallen for it.



it was a bit "Giraffist" wasn't it?

on a side note, why are Funda coming here if they already think our market is a joke?!


----------



## bren2002

Howth 2, an exact replica on the southside.  Well done lads, humerous.


----------



## BigM

Duplex said:


> A very well made 'spoof', if it wasn't for the giraffe only zoo I'd have fallen for it.


 
It was the shamrock shaped island that did it for me (along with the 3 yr timeline!!) It's probably some Media Studies thesis.... give that wo/man a 1st!!

I was talking at lunch to some friends and arguing that the 'soft landing' ain't going to happen but they are still firmly of the belief that prices will still go up, but only by a 'reasonable' 7-10% pa...... and they're both clued in to the financial markets


----------



## whizzbang

BigM said:


> It was the shamrock shaped island that did it for me (along with the 3 yr timeline!!) It's probably some Media Studies thesis.... give that wo/man a 1st!!
> 
> I was talking at lunch to some friends and arguing that the 'soft landing' ain't going to happen but they are still firmly of the belief that prices will still go up, but only by a 'reasonable' 7-10% pa...... and they're both clued in to the financial markets



It will be interesting to hear if anyone quotes this as a serious development. Given the madness going around someone's not going to watch to the end of the video and believe it is real.


----------



## baby_tooth

CelloPoint said:


> Can we have a prize for the best analogy?!


 

don't know if this is apt...

anyone evey been on a merry-go-round...or played "dizzy" as a kid.

you start spinning...you have to go faster to keep up, all going well...but eventually either your tummy packs in and ya puke, or someone else in the chain (or yourself) loses balance or dizziness takes over, and down the group fall.


----------



## col

If I meet any more former school mates who tells me he is a property developer I will shoot myself. Does anyone have a real job anymore. Housing has to fall-its just a matter of when and by how much.


----------



## Duplex

whizzbang said:


> It will be interesting to hear if anyone quotes this as a serious development. Given the madness going around someone's not going to watch to the end of the video and believe it is real.


 

Well its is real it appears.  Funda.ie are mentioned on the site several times, so a promotional spoof possibly.  http://www.funda.ie/  I suppose setting up yet another property website at the crest of Europe's biggest property bubble requires a highly developed sense of humor.


----------



## phoenix_n

77 houses on myhome for sale in drumcondra. Seems alot.

and this for [broken link removed] in drumcondra. surely not.


----------



## StoppedClock

whizzbang said:


> It will be interesting to hear if anyone quotes this as a serious development. Given the madness going around someone's not going to watch to the end of the video and believe it is real.


 
On the subject of piss take developemnts I just heard a whisper on the underground grapevine that there is a consortium planning to build a cable car from Collins Barracke to the Point (or thereabouts).

I asked the guy who told me if they intended supporting it using sky-hooks... he said he wasn't sure on the details (didn't get my sarcasm at all).


----------



## whizzbang

Duplex said:


> Well its is real it appears.  Funda.ie are mentioned on the site several times, so a promotional spoof possibly.  http://www.funda.ie/  I suppose setting up yet another property website at the crest of Europe's biggest property bubble requires a highly developed sense of humor.



Yep, promotional spoof, watch the last 5 seconds of the video!


----------



## hmmm

StoppedClock said:


> On the subject of piss take developemnts I just heard a whisper on the underground grapevine that there is a consortium planning to build a cable car from Collins Barracke to the Point (or thereabouts).



I believe this is a real proposal (I'm not joking!)


----------



## StoppedClock

StoppedClock said:


> On the subject of piss take developemnts I just heard a whisper on the underground grapevine that there is a consortium planning to build a cable car from Collins Barracke to the Point (or thereabouts).
> 
> I asked the guy who told me if they intended supporting it using sky-hooks... he said he wasn't sure on the details (didn't get my sarcasm at all).


 
Actually googled it and it is no secret (bloke who told me about it told me it was), can't believe they would be mad enough to do it though...
[broken link removed]


----------



## whizzbang

phoenix_n said:


> 77 houses on myhome for sale in drumcondra. Seems alot.
> 
> and this for [broken link removed] in drumcondra. surely not.



you could fit a 1 bed apartment between it and the side wall so clearly it has "development potential"

Interestingly if you read the description there are no solid facts in it besidesthe "Decked back garden", it is all just wishy washy. 

It is always interesting to read through these things and underline any provable facts. The less you have the more BS the piece is. They are just filling up space.

Check it out, I have highlighted the Facts in the text, the rest is all marketing BS.


_To truly appreciate the imagination, flair and innovation which have gone into creating this unique and dramatic home, internal inspection is necessary. Behind the modest façade of this superbly convenient home its owner has cleverly enhanced and sympathetically restored, with the perfect balance of elegance and contemporary chic, to create a genuinely special home that is refreshingly different and yet wonderfully practical. Offering well proportioned rooms and stunning re-design this is a home where space and light have been allowed to prevail. This house is perfect for those lacking the time or energy to create their own masterpiece.__The appeal of this amazing property is further enhanced by the wonderful *decked rear garden*, *side entrance* and the ample *off-street parking* to the front._
_*Situated on Richmond Road*, this property enjoys a superb location just a short stroll from Drumcondra village with its many amenities and is within comfortable walking distance of the city centre. _
Everything that isn't in bold is just opinion, the bold stuff are the only solid facts. Total BS piece.

(Im leaving out "restored" as a fact as that is hard to prove)


----------



## BigM

whizzbang said:


> Check it out, I have highlighted the Facts in the text, the rest is all marketing BS.


In 'Freakonomics' he argues that the BS portion is always filtered out by purchasers anyway - they only pay attention to the facts. So the flowery prose beloved of most EAs (and SFitz in particular) is only to pad out their glossy brochures... which you end up paying for as part of the advertising costs.
On another note - has anyone else noticed the DNG habit of using photos of 'local coffee shop', 'park' etc to pad out their on-line brochures. It always makes me assume the house must be a total kip. I suppose they argue they're selling 'a lifestyle' (whatever the hell that is!?)


----------



## Calina

BigM said:


> In 'Freakonomics' he argues that the BS portion is always filtered out by purchasers anyway - they only pay attention to the facts. So the flowery prose beloved of most EAs (and SFitz in particular) is only to pad out their glossy brochures... which you end up paying for as part of the advertising costs.
> On another note - has anyone else noticed the DNG habit of using photos of 'local coffee shop', 'park' etc to pad out their on-line brochures. It always makes me assume the house must be a total kip. I suppose they argue they're selling 'a lifestyle' (whatever the hell that is!?)



I operate on the following basis:

1) If there are no photographs - fine
2) If there are four photographs of various different rooms in the house, fine
3) If there is one photograph of the house and six photographs of, for example, the local train station, a view of the coast, the nearest public park, I assume the worst.


----------



## whizzbang

BigM said:


> In 'Freakonomics' he argues that the BS portion is always filtered out by purchasers anyway



busted, I'm pretty sure I picked up that trick from him 

Still, it is scarey to see how much BS there is.


----------



## ivuernis

Duplex said:


> A very well made 'spoof', if it wasn't for the giraffe only zoo I'd have fallen for it.


 
If it wasn't spoof I bet they could sell if off the plans!

Our very own


----------



## blindjustice

ncs said:


> Threads like this, for example, could well become a self-fulfilling prophecy. Hurrah!


 
hurray? what about the implications of a crash on our economy?




CelloPoint said:


> This is something I have come around to over the last couple of weeks. In conclusion, I don't believe embassy belt red-bricks will survive the shock wave (the epicentre being in the Lucan/Adamstown area).


 
It seems to me that Dublin will NOT come out of this one unscathed!


----------



## tyoung

phoenix_n said:


> Nah mate its started. And the more buyers hold off the more pressure on vendor thus confirming buyers nervousness thus holding off longer putting greater pressure on vendors..........crash.
> 
> I think you're getting carried away here. A 1% in interest rates(IR) has made potential buyers wary and worried about how high they are going. Another 50 basis points is baked in the cake  and recently some ECB members have hinted at maybe more after that.
> But if you think even a 4% ECB rate is going to crash this market I think you're mistaken.  Belief in property is just to deep to be shaken by a 2% rise in IR. Look at the UK and AUS. The markets there stalled when IR first rose. Then when it seemed that IR had plateaued the property markets picked up again. Now it looks like IR in both countries are rising again. This might be where the real pain begins.
> In the US IR went from !% to 5.25% in 18 months and that plus the negative savings rate that buggered their property market.
> So if the ECB gets to say 3.75% and then goes on hold , I think the market will pick up again. There is just too many believers out there. If IR start to rise again say in late 07 or 08 it could get interesting. I would guess you would need at least a 5% ECB rate to see many forced sellers.
> 
> Repeat after me : This all about interest rates!


----------



## ncs

blindjustice said:


> hurray? what about the implications of a crash on our economy?
> 
> Conversely, what about the implications of continued insane house price inflation on our economy? Or even a "soft landing" in circumstances which put home ownership out of reach of the next generation? It's damned if it does, damned if it dithers and damned if it doesn't. As a pre-madness homeowner, I want to trade up and the differential is currently too wide for that to happen. Given that all outcomes are bad, a crash would suit me rather better.


----------



## hmmm

tyoung said:


> Repeat after me : This all about interest rates!



No, this is all about sentiment. If you read histories of previous real estate bubbles you'll notice that no one factor can be said to have caused their reversal, not even interest rates. What has caused their collapse is the accumulation of events that cause sentiment to change. And once the sentiment changes things fall apart fairly rapidly.


----------



## BigM

tyoung;281716[SIZE=2 said:
			
		

> I would guess you would need at least a 5% ECB rate to see many forced sellers.[/SIZE]


 
But you are completely ignoring the affect of these rate increases on the affordability of houses. While someone who's trading up mightn't mind so much as they've already made a massive chunk of paper profit already, the people at the bottom are already stretched far too much.
The banks are lending 10x salaries  - this was justified by the very low IR environment. Now that IR are on the rise - to 4% next year (and after that who knows, too many variables), the reverse must occur and therefore people are going to be forwarded less money.
So Joe and Mary have less to buy their 3-bed semi in Clonee, so the vendor has less to put towards his 4-bed semi on the Navan Rd, so that vendor has less to put towards his 5-bed detached in Glasnevin.....
We are already seeing the pinch as asking prices have stalled since the Spring.


----------



## BigM

and also - in the US there were still 'flippers' buying in after rates had increased from their incredible lows. They're the ones getting screwed now (ref the US Today quote earlier). Not that there are any of those nasty 'flipper' types here, oh no, we're different. It's the new paradigm...


----------



## whizzbang

hmmm said:


> No, this is all about sentiment. If you read histories of previous real estate bubbles you'll notice that no one factor can be said to have caused their reversal, not even interest rates. What has caused their collapse is the accumulation of events that cause sentiment to change. And once the sentiment changes things fall apart fairly rapidly.



agreed, a lof of FTBs are buying for fear of never being able to afford if they don't buy now. Once this fear is gone a lot of demand will be removed from the market.

The same goes for investors, with yields so low, who is going to invest in a non appreciating asset?

Interest rates only control the supply of money, other things control the supply of buyers.

If the bank offered me €100,000 to buy a €100,000 "1990 Ford Escort", I wouldn't buy it no matter what the interest rate.


*edit* that being said, higher interest rates will play a role, but won't be the deciding factor. Higher interest rates will cool the market, sentement will drag it down.


----------



## bearishbull

add in oversupply and reassesment of prices relative to incomes, rents etc by investors and FTB's alike. When even banks are saying price growth wil slow to 3% next year then the writting is on the wall.


----------



## room305

tyoung said:


> I would guess you would need at least a 5% ECB rate to see many forced sellers.



I'm inclined to agree. Sentiment among ordinary buyers is still very positive. That won't change until rates are above 5% ECB or prices are really starting to fall. 

I just cannot see the average buyer throwing the keys back at the bank because it is cheaper to rent.

At the moment there is a lot of nervousness in the market. Investors are clearly dumping their stock and chasing dreams in foreign countries. It _could_ fall from here but I wouldn't be surprised to see it go higher.


----------



## bearishbull

prices are set at the margin! it doesnt matter with majority of mortaged homeowners decide to sit tight and keep paying mortgage, once capital appreciation falls to rate of inflation or less then many investors will get out. also FTB's seeing prices not rising much (if any) are less likely to jump in due to fear of being priced out. Throw into the mix the massive supply of property coming to market every month and i cant see how property will be worth anymore in 5 years than it is now (in real terms).


----------



## Sidewinder

tyoung said:


> I would guess you would need at least a 5% ECB rate to see many forced sellers.



Have you not been paying attention? The ECB has spent the last 6 months telling everyone in clear, unambiguous language (well, clear and unambiguous by central banker standards) that they are moving to _at least_ a neutral rate of interest, and may adopt a tight stance if inflation remains above the 2% target.

That means 5% by spring 2008.

I think the entire world has gone completely nuts, drunk on ridiculously cheap credit for the last decade. The party is already over: the Fed, ECB and even the BoJ have all called time and announced a tightening phase. Japanese deflation ended last year, and that means the end of the Yen carry trade, and that means....

Try and focus through the euphoria. The hangover is coming.


----------



## room305

Vested interests will work very hard to ensure these margins are set high. Watch what developers throw into the mix to get buyers interested. Sellers offering free cars with their houses. Anything to keep the nominal price high.

I'm not saying housing is a good investment or that people should buy, I just think even a 10% drop in the ERSI/PTSB index next year is unlikely. Not that I'm expecting a 10% increase either.


----------



## baby_tooth

Sidewinder said:


> Have you not been paying attention? The ECB has spent the last 6 months telling everyone in clear, unambiguous language (well, clear and unambiguous by central banker standards) that they are moving to _at least_ a neutral rate of interest, and may adopt a tight stance if inflation remains above the 2% target.
> 
> That means 5% by spring 2008.
> 
> I think the entire world has gone completely nuts, drunk on ridiculously cheap credit for the last decade. The party is already over: the Fed, ECB and even the BoJ have all called time and announced a tightening phase. Japanese deflation ended last year, and that means the end of the Yen carry trade, and that means....
> 
> Try and focus through the euphoria. The hangover is coming.


 
TYOUNG...IS IT NOT a case of taking from one hand and putting into another, dropping some along the way..

high rates implies low yeilds...low yields imply low demand...
high demand means higher rates...

now throw in the fact that inflation+real intererst rates = nominal interest rates. yields are inversely related to rates.

rates rise, inflation rises, yield drops and value drops to bring it all back into balance...

economics 101.


----------



## Duplex

I think that this bust will have more to do with the state of the global economy than the cost of borrowing. Too much risk has accumulated in the funny money era, it doesn't matter that its packaged up as mortgage backed securities and resold several times to hedge funds, the risk remains. If a heavily indebted US enters a recession next year, (which seems more probable every day) a sharp global slowdown will follow that will hit these shores hard. Ask the Japanese for a lesson or two on debt binges and recessionary hangovers that last a decade or so.

It goes like this interest rates up recession, interest rates down.


----------



## tyoung

Duplex
 While I aree that the global economy will have an effect I disagree with you on the nature of the effect. A US recession will lead to a rapid fall in Global interest rates which could lead to the fabled soft landing for the Irish property market. It looks like US rates have peaked. As I've posted before,from an Irish point of view, the worst thing would be that the fed might be forced to come back and raise interest rates next year in the face of stubborn inflation. Some thing like that is happening in GB and AUS right now. Let's see how it plays out.
 Sidewinder
  If I could predict interest rates accurately 12 months out I'd give up the day job. I see 3.75 to 4% early next year but after that the crystal ball gets very cloudy.
BTW Morgan Stanley's European Team see the natural IR for  Euroland at about 3%
Babytooth
 I'm sorry but i don't follow your post.
" High rates imply low yields" (on what?)


----------



## Sidewinder

tyoung said:


> BTW Morgan Stanley's European Team see the natural IR for  Euroland at about 3%



That's pure voodoonomics. So yer saying the natural long-term real rate of interest in the Eurozone is going to be under 1%?

Oh yeah, I forgot, it's a new paradigm.


----------



## tyoung

Sidewinder
 In August their European economist said that 3.5% would be very near the Natural rate.  I agree with your comments but I don't set interest rates. Central Bankers do and they are appointed by politicans who are elected by the great unwashed who want easy money.
 That's just the way it is!


----------



## walk2dewater

tyoung said:


> If I could predict interest rates accurately 12 months out I'd give up the day job. I see 3.75 to 4% early next year but after that the crystal ball gets very cloudy.


 
I've been doing a decent job last 2 yrs, and I have returns to prove it.

Spring 05 I distinctly remember Dan McLoughlin saying he thought rates were heading down. Can you imagine?

Global rates are going MUCH higher in coming years.

[See the interest rate thread for my arguments on this]


----------



## Duplex

tyoung said:


> Duplex
> While I aree that the global economy will have an effect I disagree with you on the nature of the effect. A US recession will lead to a rapid fall in Global interest rates which could lead to the fabled soft landing for the Irish property market. It looks like US rates have peaked. As I've posted before,from an Irish point of view, the worst thing would be that the fed might be forced to come back and raise interest rates next year in the face of stubborn inflation. Some thing like that is happening in GB and AUS right now. Let's see how it plays out.
> Sidewinder
> If I could predict interest rates accurately 12 months out I'd give up the day job. I see 3.75 to 4% early next year but after that the crystal ball gets very cloudy.
> BTW Morgan Stanley's European Team see the natural IR for Euroland at about 3%
> Babytooth
> I'm sorry but i don't follow your post.
> " High rates imply low yields" (on what?)


 
The low interest rate era is a product of deflationary forces caused in part by the emergence of $1 an hour labour costs in Asia (in the main). Competing cheap labour will be the big story for the old economies over the next two decades, cheap labour that can produce complex products and provide sophisticated services to the same standards as the West but more profitably. The pricing power of labour in the West is weak and will remain so because we have to compete. 

Similarly the pricing power of an acre of Irish urban or agricultural land is weak because of competition from cheaper, more productive, better located and serviced land elsewhere. We have masked these economic truisms with debt but that option is a stop gap and a stop gap you can only use once every couple of decades.


P.S. The Fed are pushing the story that inflation is back under control. True or not I don't know.  But I know one thing for certain what ever happens in the US will happen here in spades. The money markets seem to think that the Fed will be back fighting a deflationary recession soon, and fighting with a weak dollar and the mother of all deficits, it will get messy.   

http://www.bloomberg.com/markets/rates/index.html


----------



## StoppedClock

tyoung said:


> Sidewinder
> In August their European economist said that 3.5% would be very near the Natural rate. I agree with your comments but I don't set interest rates. Central Bankers do and they are appointed by politicans who are elected by the great unwashed who want easy money.
> That's just the way it is!


 
Correction: Central Bankers are appointed by German politicans and their great unwashed happen to like high interest rates because they are savers not borrowers.


----------



## tyoung

W2dew
 If I remember correctly you predicted 8% by 08. That's way off the map. I find it hard to imagine (Breakup of the euro is the only possible scenario).
 If it does happen this would be the worst possible scenario for the Irish economy. There won't be enough stretchers to go round.

Duplex
 If I read you correctly you're predicting a deflationary recession/ Depression.
 Deflations do happen but they're very rare particularly in an era of fiat money. There was a global deflation in the 30s and Japan had a deflation in the 90s.  
There certainly has been a massive build up of debt and global inbalances partly as a result of previous attempts to "fight" deflation/recession. Central bankers would move heaven and earth to prevent deflation taking hold. In general  deflation has been a bad prediction.
So if I had to pick between  the two scenarios  I go with W2deW 's  inflationary scenario although I think it's unlikely.


----------



## fatmanknows

[broken link removed]

Near my own neck of the woods - see 100 Sandford Road above. It had a day out at the Auction a few months ago with an AMV of €2m. It never made it to the podium and had been for sale since. Couple of weeks ago it finally goes sale agreed ( at what price I don't know). Then just this morning I notice the FOR SALE flag goes back up. No big deal but just a further little bit of somewhat anecotal evidence that buyers are getting nervy.


----------



## Duplex

tyoung said:


> W2dew
> If I remember correctly you predicted 8% by 08. That's way off the map. I find it hard to imagine (Breakup of the euro is the only possible scenario).
> If it does happen this would be the worst possible scenario for the Irish economy. There won't be enough stretchers to go round.
> 
> Duplex
> If I read you correctly you're predicting a deflationary recession/ Depression.
> Deflations do happen but they're very rare particularly in an era of fiat money. There was a global deflation in the 30s and Japan had a deflation in the 90s.
> There certainly has been a massive build up of debt and global inbalances partly as a result of previous attempts to "fight" deflation/recession. Central bankers would move heaven and earth to prevent deflation taking hold. In general deflation has been a bad prediction.
> So if I had to pick between the two scenarios I go with W2deW 's inflationary scenario although I think it's unlikely.


 
tyoung

The US housing market is/was a bubble and attempting to reflate a bubble is impossible. The disconnect between fundamentals and valuations remains vast; the elemental driver of house price appreciation, wage growth, has remained all but static in the US since 2000. The Fed will attempt to reflate the market with a rate cut at some stage next year in response to falling values but this will not address the fundamental issue that has dogged the US economy; a deficit in labour pricing power due to globalisation. If cutting interest rates were a panacea for all economic woes (which it isn’t) we would never have cyclical slowdowns, we would just cut rates and continue on our merry way. The ‘mad, bad and dangerous to know’ money needs to be flushed from the system, the Central Bankers know this, but are unlikely to shout it from the roof tops. 

A couple of interesting articles that give an indication of how a consensus is building re a sharp slowdown in the US.



> *Housing: more pain ahead
> Many investors assume the damage to the housing industry is an isolated event (much as it was assumed that the dot-com implosion was an isolated event). I find myself more concerned than the consensus, believing the housing industry is vastly more important to the overall economy than many are currently assuming. Given that prices have yet to fall enough to drain inventories, and mortgage rates have yet to fall enough to stimulate another mortgage refinancing boom, there is still likely more pain and suffering to come before we can close the books on this housing cycle. And the harder housing falls, the harder it will be for the economy to land softly.
> *


*
*http://www.schwabinsights.com/2006_09/mktoutlook.html







> Note the chart below. It is a comparison of the price of copper relative to the NASDAQ bubble. There are so many charts like this, I think the message that the bond market is telling us is very important and may eventually lead to a change in my firm's view in our maturities that we hold for clients. The bond market is screaming slowdown or recession and these charts show the roadmap to that end. If these bubbles burst simultaneously, I don’t think the Fed or any central bankers will be able to stop the cascading of prices. This is for both commodities and stock prices. It would also affect corporate bonds, particularly junk and emerging market debt. I realize this is all sobering, and the pictures are downright scary, but to hide from the facts is the wrong “M.O.!”




[broken link removed]


----------



## Eben

ivuernis said:


> If it wasn't spoof I bet they could sell if off the plans!
> 
> Our very own



They forgot Israel!? Should be between b21 Egypt and d98 Jordan. What gives?


----------



## Remix

fatmanknows said:


> [broken link removed]
> 
> Near my own neck of the woods - see 100 Sandford Road above. It had a day out at the Auction a few months ago with an AMV of €2m. It never made it to the podium and had been for sale since. Couple of weeks ago it finally goes sale agreed ( at what price I don't know). Then just this morning I notice the FOR SALE flag goes back up. No big deal but just a further little bit of somewhat anecotal evidence that buyers are getting nervy.


 
There's a great story here if any Irish Indo Journalists are still reading  

Use the method outlined here (posts #4409 #4411) to find houses that have had big price drops - or even use the numerous examples of price drops on this thread.

Contact the owners for an interview. I'm sure they'll have some story to tell about the difficulty in selling their house and having to come to terms with their asking price falling.

Some owners might not discuss but others might appreciate the free publicity.


----------



## beattie

Remix said:


> There's a great story here if any Irish Indo Journalists are still reading


 
I am sure that there are journalists from the IT already on the case...


----------



## CelloPoint

Here's some first-hand insight into the trials and tribulations of (trying to) sell in Lucan:

http://www.askaboutmoney.com/showpost.php?p=281887&postcount=5


----------



## BigM

CelloPoint said:


> Here's some first-hand insight into the trials and tribulations of (trying to) sell in Lucan:
> 
> http://www.askaboutmoney.com/showpost.php?p=281887&postcount=5


 
I do think it's hilarious the way that prices aren't falling, it's just that they were "overpriced in the 1st quarter of 2006"


----------



## tyoung

StoppedClock said:


> Correction: Central Bankers are appointed by German politicans and their great unwashed happen to like high interest rates because they are savers not borrowers.



Good point The Germans have put up with a fair amount of pain recently in the name of the euro. If growth had been as slow in the US poeple would have been screaming for lower IR. Monetary stability does seem to be more prised in Germany.But they are not the whole Eurozone....Spain Italy Portugal  Greece  Ireland  may all be calling for lower IR if Duplex is  correct.  We'll see what happens.


----------



## Calina

tyoung said:


> Good point The Germans have put up with a fair amount of pain recently in the name of the euro. If growth had been as slow in the US poeple would have been screaming for lower IR. Monetary stability does seem to be more prised in Germany.But they are not the whole Eurozone....Spain Italy Portugal Greece Ireland may all be calling for lower IR if Duplex is correct. We'll see what happens.



We may well see what happens. But while they might be screaming for lower interest rates now, why weren't they screaming for higher interest rates when we needed them? And if they were, and we didn't get them, why should it be different now that we need lower interest rates.


----------



## BigM

Calina said:


> We may well see what happens. But while they might be screaming for lower interest rates now, why weren't they screaming for higher interest rates when we needed them? And if they were, and we didn't get them, why should it be different now that we need lower interest rates.


The ECB's number 1 objective is Price Stability = keep inflation in check. To start targeting member states' property markets (esp small ones like us & Spain) would require a change of Policy on their part, and would be impossible anyway given the diverse cycles throughout Europe.


----------



## CelloPoint

Calina said:


> We may well see what happens. But while they might be screaming for lower interest rates now, why weren't they screaming for higher interest rates when we needed them? And if they were, and we didn't get them, why should it be different now that we need lower interest rates.



Blaming the EU's monetary policy rings hollow in my ears. We knew for years that we'd have no control over interest rates. Domestic government policy did nothing to counteract this loss of monetary control: instead of responding with a whole series of measures to control the market, what did we do? We allowed our political representatives to incentivise builders and developers, whilst allowing local authorities to rezone their mates' land.


----------



## Afuera

tyoung said:


> Good point The Germans have put up with a fair amount of pain recently in the name of the euro. If growth had been as slow in the US poeple would have been screaming for lower IR. Monetary stability does seem to be more prised in Germany.But they are not the whole Eurozone....Spain Italy Portugal  Greece  Ireland  may all be calling for lower IR if Duplex is  correct.  We'll see what happens.



Fighting inflation = ECBs responsibility
Fighting internal market imbalances = Local governments resposibility

The ECB has already made calls for the Irish and Spanish governments to try and keep a handle on their markets and stop them from going out of control. If the respective governments choose to ignore this I think the most we can expect from the ECB, if it goes pear-shaped, is a "I told you so"!

To be honest, I'd be more worried if the ECB was willing to bail out every nation that got itself in a bit of a financial mess. Emerging economies in Eastern Europe would have nothing to fear and no country would have to take responsibility for bad management. Hardly going to encourage a stable environment, would it?


----------



## Remix

BigM said:


> I do think it's hilarious the way that prices aren't falling, it's just that they were "overpriced in the 1st quarter of 2006"


 
Hang on a second ! Property prices are coming down from the 1st qtr 2006 because they were overpriced ??

But we where told earlier that the high prices in the 1st qtr were justified because Irish property has been undervalued !! These vested interests are spinning so fast they can almost see the back of their own necks.


----------



## whizzbang

Remix said:


> These vested interests are spinning so fast they can almost see the back of their own necks.



that made my day


----------



## baby_tooth

tyoung said:


> Good point The Germans have put up with a fair amount of pain recently in the name of the euro. If growth had been as slow in the US poeple would have been screaming for lower IR. Monetary stability does seem to be more prised in Germany.But they are not the whole Eurozone....Spain Italy Portugal Greece Ireland may all be calling for lower IR if Duplex is correct. We'll see what happens.


 

tyoung, sorry, my post of yesterday wasn't very clear.

What I was saying was that Interest rates are linked to many differing factors.
Money Supply...the more money, the lesss valuable it is, the more prices increas in nominal terms.
Money Velocity...the quicker money changes hands the more money can be manufactured into the system with the fractional reserve banking.

Inflation, directly related to interest rates....more money supply, then things cost more in nominal terms.

Now, interest rates are inversely related to the yields, ie the profits or returns made on an asset, be it a house, a loan, a bond etc.

So if inflation rises, then rates rise, if rates rise then yields drop, if yeilds drop then prices drop to come back into line with returns and so the cycle continues.

The more liquid the asset, the quicker this circle spins...so if rates rise then bond prices drop overnight. But with houses things take longer to turn full circle. With vested interest and taxations on liquidity (such as stamp duty, solictors costs (whihc in themselves are also responsible for losses in the way of taxation inefficiences) this circle turns even slower again....

Add in Sentiment and historical behaviour, esp with house prices, then this circle turns even slower, but it does turn.

TO further complicate matters, consider the chaos theory of markets. mr yank sells but miss yank buys at lower rates, now mr yanks drops his sentiment on his returns and miss yanks drops her sentiment on her prospective yeilds, they talk to each group of friends....they lower the expecations...akin to the adaptive expectation hypothesis, and expect lower....this in turn fuels furhter sentiment and so on....

now all these elements pull together to direct the market for any good...as housing has some many more factors in play than most makrets it's more compicated than most...but at the ned of the day it will all boil back to yeilds, be it daily value extraceted from rent or compounding retunrs in the form of capital apprecaition...

so, long term view is that rates will rise, yeilds will drop and then rise again as prices realign themselve with money supply and inflation will come back on track....

long winded but hopefully a bit clearer...

excuse spellings.


----------



## StoppedClock

tyoung said:


> Good point The Germans have put up with a fair amount of pain recently in the name of the euro. If growth had been as slow in the US poeple would have been screaming for lower IR. Monetary stability does seem to be more prised in Germany.But they are not the whole Eurozone....Spain Italy Portugal Greece Ireland may all be calling for lower IR if Duplex is correct. We'll see what happens.


 

It’s been quite a while since I have seen Portugal, Ireland, Greece and Spain bundled together.  Some may remember in the 80's when we were the basket cases of Europe we were collectively known by the suitable acronym PIGS.  We were the countries scoffing at the trough while rich Europe ploughed money into us in the hope we would become modern responsible economies.  
For a short time around 2000/2001 this dream probably came true but the irresponsible and incompetent government that presided over us when we were poor basket cases in the past managed to effortlessly turn us into rich basket cases.  I can’t see this lasting long though and I expect the inevitable transition back to poor basket case will be a lot quicker and a lot less fun.


----------



## daveirl

Eben said:


> They forgot Israel!? Should be between b21 Egypt and d98 Jordan. What gives?


They deliberately didn't put it in.


----------



## bearishbull

Another auction property withdrawn/didnt sell yesterday evening, this time its the one i spoke about earlier on this thread that i saw no one viewing it, its now straight back on market today for sale by private treaty with an asking price the same as AMV of auction.


----------



## thejuggler

I post this for the benefit of posters not from Cork. I thought it summed up the current situation rather well.
Magical Mystery Tour (Editorial from this weeks Cork Independent. (widely read freesheet in Cork - not online so can't be linked)
"All aboard!!" shouts the Fat Controller. "All aboard the gravy train". Like an episode of Thomas the Tank Engine the puffing behemoth that is the Irish property boom is chugging down the tracks but the most attentive kids in the audience can see its about to derail, thanks to the healthy dose of reality lying on the line, also known as a "correction".
The puffy chested big wigs who run the railway are telling the pasengers that the line is clear, the worst that can happen is that the train will slow down a bit.
Their friends, The Fat Contractor and the Greedy Banker egg them on helped by their chums in PR. "Don't worry," they say, "we'll all be fine". But alas the train did indeed hit a fallen tree (correction) and derailed. 
The Fat Controller was quick to call for help. He called his friends in the Garda Station, he called his golfing buddy Dr Stretched in the hospital. "Come quick the gravy train has left the tracks. I think some of the passengers have been injured".
He waited ... and waited... and waited ...and waited. But nobody came. He tried to calm the passengers who were starting to panic. Those who could walked away from the gravy train, they wouldn't be getting onboard again in a hurry.
Dr Stretched finally turned up, lights flashing. "Where have you been? said the Fat Controller. "I had to go and pick up the paramedics", said Doctor Stretched. "They live a long way from the big city".
"Wheres Garda Plod?, said the Controller. "He's on his way," said Dr Stretched. "He'll be a bit longer, he lives even further from the big city".
Nobody had the heart to tell the Fat Controller that Plod couldn't afford to live near the big city. The story didn't end happily ever after for the Fat Controller. The passengers took a long time to come back to the gravy train and by then he had been made redundant.


----------



## CelloPoint

thejuggler said:


> I post this for the benefit of posters not from Cork. I thought it summed up the current situation rather well.
> Magical Mystery Tour (Editorial from this weeks Cork Independent. (widely read freesheet in Cork - not online so can't be linked)
> "All aboard!!" shouts the Fat Controller. "All aboard the gravy train". Like an episode of Thomas the Tank Engine the puffing behemoth that is the Irish property boom is chugging down the tracks but the most attentive kids in the audience can see its about to derail, thanks to the healthy dose of reality lying on the line, also known as a "correction".
> The puffy chested big wigs who run the railway are telling the pasengers that the line is clear, the worst that can happen is that the train will slow down a bit.
> Their friends, The Fat Contractor and the Greedy Banker egg them on helped by their chums in PR. "Don't worry," they say, "we'll all be fine". But alas the train did indeed hit a fallen tree (correction) and derailed.
> The Fat Controller was quick to call for help. He called his frineds in the Garda Station, he called his golfing buddy Dr Stretched in the hospital. "Come quick the gravy train has left the tracks. I think some of the passengers have been injured".
> He waited ... and waited... and waited ...and waited. But nobody came. He tried to calm the passengers who were starting to panic. Those who could walked away from the gravy train, they wouldn't be getting onboard again in a hurry.
> Dr Stretched finally turned up, lights flashing. "Where have you been? said the Fat Controller. "I had to go and pick up the paramedics", said Doctor Stretched. "They live a long way from the big city".
> "Wheres Garda Plod?, said the Controller. "He's on his way," said Dr Stretched. "He'll be a bit longer, he lives even further from the big city".
> Nobody had the heart to tell the Fat Controller that Plod couldn't afford to live near the big city. The story didn't end happily ever after for the Fat Controller. The passengers took a long time to come back to the gravy train and by then he had been made redundant.




Another fine analogy.

So there you have it folks. The party started with Packie's save in 1990 and will end with the Ryder Cup. So enjoy the last hurrah while it lasts. National anthem anyone?


----------



## Duplex

CelloPoint said:


> Another fine analogy.
> 
> So there you have it folks. The party started with Packie's save in 1990 and will end with the Ryder Cup. So enjoy the last hurrah while it lasts. National anthem anyone?


 

Sure;  now where did a put that fecking plectrum.

http://www.youtube.com/watch?v=0-1cWNiFbUU


----------



## NewMan

One of the funniest threads i have ever read. There seems to be an awful lot of bitterness here towards property owners and people who are currently buying. The word "fool" is been banded around left, right and center.

From my point of view (I know this goes against the grain of this thread) but property in my area appears to be selling extremely well and quick in the last few months. I feel secure in the knowledge that I can look back in 5 or 10 years and the country won't have disintegrated or the world won't have come to an end like some here seem to think.


----------



## phoenix_n

What the [broken link removed] [broken link removed] looks like


----------



## shanegl

NewMan said:


> One of the funniest threads i have ever read. There seems to be an awful lot of bitterness here towards property owners and people who are currently buying. The word "fool" is been banded around left, right and center.
> 
> From my point of view (I know this goes against the grain of this thread) but property in my area appears to be selling extremely well and quick in the last few months. I feel secure in the knowledge that I can look back in 5 or 10 years and the country won't have disintegrated or the world won't have come to an end like some here seem to think.


 
Are you going to back up your long term view with some analysis, or just throw some veiled insults? The thread could do with some bulls.


----------



## fatmanknows

NewMan said:


> ..............but property in my area appears to be selling extremely well and quick in the last few months. .............


 
Is it easy to get a flight to Ireland from where your living ?


----------



## bearishbull

shanegl said:


> Are you going to back up your long term view with some analysis? The thread could do with some bulls.


He sounds like a member of the  "i'm alrite jack"/head in the sand brigade.


----------



## hmmm

NewMan said:


> One of the funniest threads i have ever read. There seems to be an awful lot of bitterness here towards property owners and people who are currently buying. The word "fool" is been banded around left, right and center.



I think most of the bears on here feel that we are watching something really economically fascinating, as what we perceive to be a bubble unfurls in front of us. That is my main motivator for following this thread, along with many I expect.

There's also a certain amount of schadenfreude being exhibited I'll admit. Those of us who have followed what would have been considered prudent investment strategies have been outperformed by those pursuing what we would consider to be lazy, reckless and naive investment practices through property investment. In every bubble there is a stage at which "prudent" investors begin to think "things really have changed", and that psychological moment is financially very damaging as you end up leaping in a market top. By being in the company of others who can keep reminding you of the logic of your position, you can have the emotional courage to maintain the stance you know to be correct.


----------



## StoppedClock

hmmm said:


> I think most of the bears on here feel that we are watching something really economically fascinating, as what we perceive to be a bubble unfurls in front of us. That is my main motivator for following this thread, along with many I expect.
> 
> There's also a certain amount of schadenfreude being exhibited I'll admit. Those of us who have followed what would have been considered prudent investment strategies have been outperformed by those pursuing what we would consider to be lazy, reckless and naive investment practices through property investment. In every bubble there is a stage at which "prudent" investors begin to think "things really have changed", and that psychological moment is financially very damaging as you end up leaping in a market top. By being in the company of others who can keep reminding you of the logic of your position, you can have the emotional courage to maintain the stance you know to be correct.


 

hmmm, have a read of the excellent _"Fooled by Randomness"_, the first few chapters tell a very good allegorical story which would apply equally well to the feelings of the bears on this thread.

[broken link removed]?


----------



## whizzbang

hmmm said:


> ...By being in the company of others who can keep reminding you of the logic of your position, you can have the emotional courage to maintain the stance you know to be correct.



I think a lot of us are in this boat, families say we're mad for not buying, sometimes you need the backup of people with the same view!

That being said, I think there is a risk that we might have our heads in the sand as well, only our unbreakable belief is prices will go down. I think it is very difficult stay objective while reading threads like this. Informative and all as it is.

By reading this are we making ourselves believe that the crash is on while there may actually be another year or two of price gouging we are missing out on? I'm usually totally bearish but it gets tiring after a few years!


----------



## CelloPoint

whizzbang said:


> I think a lot of us are in this boat, families say we're mad for not buying, sometimes you need the backup of people with the same view!
> 
> That being said, I think there is a risk that we might have our heads in the sand as well, only our unbreakable belief is prices will go down. I think it is very difficult stay objective while reading threads like this. Informative and all as it is.
> 
> By reading this are we making ourselves believe that the crash is on while there may actually be another year or two of price gouging we are missing out on? I'm usually totally bearish but it gets tiring after a few years!



Isn't this the nature of sentiment within a market?

It's not like there's anything new in the Irish market that hasn't manifested itself somewhere in history.


----------



## tyoung

Newman
 I see the property boom/bubble as a wealth transfer exercise not a wealth creation exercise.  If a house doubles in price without undergoing  any structural change  where's the increase in wealth? Society as a whole is no better off. Instead what has happened is that wealth has been transferred from those with little property( generally the poor and the young) to those more than average property(generally the wealthy and older folk).
So the boom has actually redistributed wealth from the poor to the wealthy.
It has also dealt a blow to the idea of a meritocratic society. I know of families waiting to inherit multi million euro estates simply because of the good fortune  of their parents housing choice.
 The worst thing of all is those fortunate enough to benefit won't acknowledge that there was a lot of good fortune involved.
 So if there is some bitterness I think it's understandable.
 I also see any housing correction not as wealth destruction.  The houses will still there after all. Rather it will be wealth redistribution back the other way. I don't see anything wrong with hoping for it.
 The real question is how much malinvestment has there been because of the boom? Residential investment reached 14% in 05 way above other countries and historical data. How much of that is real demand and how much are shoddy properties thrown up quickly in poor locations sold to people who really can't afford them?
 I don't know but I think the rash of  1/2 bed apartments that have sprung up everywhere is going to cause our grandkids  to scratch their heads  and wonder   what we were thinking.
Bluetooth
 You have a deeper grasp of monetary theory and behavioural finance than me. i just see higher interest rates as the critical issue because it decides how much a bank will lend a prospective buyer. Thats all.


----------



## hmmm

whizzbang said:


> By reading this are we making ourselves believe that the crash is on while there may actually be another year or two of price gouging we are missing out on? I'm usually totally bearish but it gets tiring after a few years!



But trying to get a piece of some "price gouging"  is gambling not investing. You can adopt a daytrader type approach to this and see patterns in charts irrespective of the underlying asset, or avoid that sort of intellectual laziness, do the maths and understand the investment. I sleep easier at night by having a nice boring portfolio growing steadily than gambling my families future on the latest get rich quick scheme.


----------



## Afuera

hmmm said:


> I think most of the bears on here feel that we are watching something really economically fascinating, as what we perceive to be a bubble unfurls in front of us. That is my main motivator for following this thread, along with many I expect.



I concur with this. This thread has been a very useful resource for tracking down reports related to the market as well as hearing everyone's anecdotal evidence.



whizzbang said:


> That being said, I think there is a risk that we might have our heads in the sand as well, only our unbreakable belief is prices will go down. I think it is very difficult stay objective while reading threads like this. Informative and all as it is.



The bulls are free to come on here and prove everyone wrong however I don't think I've seen a single argument that could in anyway support that view for a very long time.

Most bulls these days are just coming out with the usual crap about "demographics", "can't go wrong with bricks and mortar", "you're all a bunch of begrudgers", etc. NewMan is no different.


----------



## asdef

whizzbang said:


> That being said, I think there is a risk that we might have our heads in the sand as well, only our unbreakable belief is prices will go down. I think it is very difficult stay objective while reading threads like this. Informative and all as it is.
> 
> By reading this are we making ourselves believe that the crash is on while there may actually be another year or two of price gouging we are missing out on? I'm usually totally bearish but it gets tiring after a few years!



The obvious phrase that comes to mind is 'echo chamber':


> Echo chambers, so the argument goes, are places where       like-minded people talk to one another, nobody ever changes anyone else's mind and true diversity of opinion is       exchanged for an infinite plenitude of ideologically identical communities


Is this an echo chamber? I've been following the thread for a few months at this point, and the environment does seem to have turned increasingly hostile for bulls. Are the bears in this thread pushing small examples of price decreases, and ignoring examples of continuing bullishness in the market? Remember, the market has been irrational for years, why are you sure people will figure it all out now? 

For the record, I'm expecting a "slowdown" before Christmas, a "realignment" in some areas, followed by a cut of 20-30% next year for most properties... (edit: well maybe 20%; more is not that likely, but definitely possible)

As regards sentiment among family, my dad was pushing for me to buy a 1-room apartment off Clonliffe Road (him as guarantor) last Christmas. He was sure I could afford it (talked to a mortgage broker informally about it). I thought "sure why not", there must be something to this not renting thing after all (before I came across AAM, obviously). And then on the following Monday I typed the numbers into a mortgage calculator. I choked - possibly doable at the then-current interest rates, but a severe pinch if they went up 1-2%. So I decided against that. He kept pushing the idea for 2-3 months, but recently he's shut up entirely, and I'm starting to push him on the idea of divesting into other equities from property...


----------



## walk2dewater

tyoung said:


> Newman
> I see the property boom/bubble as a wealth transfer exercise not a wealth creation exercise. If a house doubles in price without undergoing any structural change where's the increase in wealth? Society as a whole is no better off. Instead what has happened is that wealth has been transferred from those with little property( generally the poor and the young) to those more than average property(generally the wealthy and older folk).
> .


 
The 50-something early retiree wondering his good fortune with property need look no further for an explanation than the heaving mob of frazzled under-35 debtors on the 8:00am Arrow from Kildare/Balbriggan/Arklow/Ashbourne/etc


----------



## Calina

whizzbang said:


> I think a lot of us are in this boat, families say we're mad for not buying, sometimes you need the backup of people with the same view!
> 
> That being said, I think there is a risk that we might have our heads in the sand as well, only our unbreakable belief is prices will go down. I think it is very difficult stay objective while reading threads like this. Informative and all as it is.
> 
> By reading this are we making ourselves believe that the crash is on while there may actually be another year or two of price gouging we are missing out on? I'm usually totally bearish but it gets tiring after a few years!



I think part of it is this: it is almost certain that there will be a correction because of the salary inflation/price inflation mismatch. But what no one can tell is how that correction is going to play out. It's unlikely to be an overnight crash where an apartment costing 400K one day will be priced at 200K the next. But it could play out over a year that way. If we're looking for odd metaphors, you could look at it as being similar to weight gain. No one gets fat overnight - they build it up over time. You can't lose that sort of weight overnight, it takes a while. We've built up a massive quantity of property wealth here - but what's not really being discussed is how much of it is backed by debt. 

One of the things that really shocks me about this country (and I'm Irish but I've spent a lot of time out of the country) is how short termist most people are. Otherwise they wouldn't build up these debts. 

So my main issue with the property market at present is not how much the property costs because that's - I know this sounds all wrong - that's just money. What worries me greatly is the length of time most of those debts are for, and how apparently common equity release is. It's very much a manana, manana attitude. Apparently statistically, we're above average savers - but you have to set that off against a massive amount of consumer debt as well. 

In truth, as I see it, we'll see the property bubble burst - but because it is now so huge (that many people can't actually see it), it's going to be tough to predict how massive and long drawn out the correction will be. The shorter it is - no matter how extreme - the better in the long run. But we're only barely at the stage where people are accepting that the past ten years were anomalous and that anomaly may not last. I'm not saying this because property prices grew by 270% in the past 10 years. I'm saying it because salaries did not.


----------



## whizzbang

Calina said:


> I'm not saying this because property prices grew by 270% in the past 10 years. I'm saying it because salaries did not.



Thats an excellent point, I must bring it up next time I'm running with the Bulls.


----------



## Sidewinder

whizzbang said:


> By reading this are we making ourselves believe that the crash is on while there may actually be another year or two of price gouging we are missing out on? I'm usually totally bearish but it gets tiring after a few years!




Just remember dude: "When the last bear turns bull...."

The fact that even you are now feeling the lure of the Dark Side in itself is proof that this bubble has already burst.


----------



## Billo

After years of this thread,the bulls are still laughing all the way to the banks.
Rgds
Billo


----------



## derryman

reality

96 salary = 35k euro
2006 salary = 82k euro

96 home bought (3 bed semi, D16) = 90k euro
2006 house sold (same - no extras) = 575k euro

does not stack up, if interest rates increase any more


----------



## BigM

Calina said:


> I'm not saying this because property prices grew by 270% in the past 10 years. I'm saying it because salaries did not.


 
Exactly - that was my Pauline coversion moment from Bull to Bear... when I realised that the 1st house I bought (in 2001) would now require a salary of €90k to finance its purchase. 
It makes absolutely no sense, however you dress it up.


----------



## Calina

Billo said:


> After years of this thread,the bulls are still laughing all the way to the banks.
> Rgds
> Billo



You mean, when they go looking for more debts I mean equity release?


----------



## exile

derryman said:


> reality
> 
> 96 salary = 35k euro
> 2006 salary = 82k euro



This is your personal salary though?  The average increase has been less than this, I think.


----------



## walk2dewater

Billo said:


> After years of this thread,the bulls are still laughing all the way to the banks.
> Rgds
> Billo


 
After years of 100 smokes-a-day habit I still havent got cancer.

After years of driving 100mph down those country lanes I havent hit anything.

After years of travelling abroad uninsured I'll never need it in the future.

etc etc

yawn.


----------



## derryman

Exile

I am pointing out that although my salary doubled and a bit (10 years more experience mind), however my house (real bought and sold values) had increased over six fold, only difference - interest rates and fiat money


----------



## exile

derryman said:


> Exile
> 
> I am pointing out that although my salary doubled and a bit (10 years more experience mind), however my house (real bought and sold values) had increased over six fold, only difference - interest rates and fiat money



Yep, I got it the second time I read it   Question is - what is someone with 10 years fewer experience doing your job earning now?


----------



## derryman

Exile 

I an IT project manager now, IT developer then - thing is if you ignore the hyped up skills (c## etc), the IT developer now is barely earning more, believe me I know, I work for a MNC and people care manage some 5 years experience developers on 40k euro.  That is the absurdity of it all.


----------



## whizzbang

Sidewinder said:


> Just remember dude: "When the last bear turns bull...."
> 
> The fact that even you are now feeling the lure of the Dark Side in itself is proof that this bubble has already burst.



Good point! Perhaps I have a inner compass that is the inverse of market sentiment?! That could be useful!


----------



## blindjustice

Billo said:


> After years of this thread,the bulls are still laughing all the way to the banks.
> Rgds
> Billo


 
*the following is when this thread began :05-07-2006, 10:21 AM *
*NOT YEARS AGO!!*
*this is the very first post below:*



miju said:


> What do people here think the current attitude is towards property from joe public?
> 
> I've been talking to a few people and am kinda getting mixed results , so i decided to start a poll which is here which is kinda giving up some suprising results (though only 61 people have answered the question so far)
> 
> I own property and am bullish - 21.31%
> I own a property and am bearish - 26.23%
> I do not own property and am bullish - 13.11%
> _I do not own property and am bearish -_ 39.34% (suppose this is the most interesting as IMHO it's FTB's who have the "power" in the property market as if they stop buying the whole thing practically stalls as people can't "trade up" )
> 
> what do you all think?


----------



## Billo

walk2dewater said:


> After years of 100 smokes-a-day habit I still havent got cancer.
> 
> After years of driving 100mph down those country lanes I havent hit anything.
> 
> After years of travelling abroad uninsured I'll never need it in the future.
> 
> etc etc
> 
> yawn.


 
It's no wonder your tired, with all those posts in a short space of time


----------



## daveirl

exile said:


> Yep, I got it the second time I read it   Question is - what is someone with 10 years fewer experience doing your job earning now?


I'm a recent Microelectronics Graduate, I earn less now than a graduate earned in 1999, that's less in absolute terms not even taking into account inflation


----------



## daveirl

That previous thread title is predicting falls of 20%, people here are now predicting falls of 50%, both say that the 2001 levels were the 'true' levels so the two threads don't contradict.


----------



## Sidewinder

daveirl said:


> That previous thread title is predicting falls of 20%, people here are now predicting falls of 50%, both say that the 2001 levels were the 'true' levels so the two threads don't contradict.



Call me an Uberbear but I think 2001 levels were actually the natural _peak _of the cycle in Ireland. There is plenty of evidence that house prices in Ireland had stabilised and were actually falling off slightly in the Spring/Summer of 2001.

And then the Fed injected massive liquidity in order to push forward the effects of the unwinding of the dot-com bubble, Germany was still paying off the costs of reunification, Japan was still stuck in deflation with interest rates of 0% creating the Yen carry trade, and China was helping things along with the deflationary effects in Western economies of cheap Chinese goods.

And we Irish went buck mad altogether.

The four major trends above have all now reversed/ended, and there will be hell to pay.

I'd say _true _equilibrium house prices in Ireland are 1999 levels (adjusted for inflation).


----------



## beattie

Billo said:


> After years of this thread,the bulls are still laughing all the way to the banks.
> Rgds
> Billo


 
Would you recommend an investor to buy at the moment?


----------



## Billo

beattie said:


> Would you recommend an investor to buy at the moment?


 
Yes I would. But like everything else you have to shop around for good location and price.

Billo


----------



## Duplex

From Belgium. “The boom in the Belgian housing market has past its peak, a new report indicated. ‘Due to the very favourable mortgage conditions, buyers bought larger houses or in more expensive locations,’ ERA Belgium director Iain Cook said. But that does not mean that a row house with three bedrooms has also increased so much in price.”
“Unfortunately, sellers have not realised this, Cook said. It means that more and more houses are being put up for sale at an exaggerated price and are therefore difficult to sell.”

From Australia. “Welcome to the dark side of the housing boom. The question is, why have we borrowed so much more today? See the point? We took the benefit of lower interest rates and used it to achieve little more than a doubling in the price of homes.”

From New Zealand. “A slowdown in sales of higher priced houses has put a stop to rising prices in the city’s residential property market. The median selling price slipped $9000 in August at Mount Maunganui and Papamoa, and across the harbour the fall was even bigger, more than $12,000. ‘If you scratch under the surface at the moment there’s nothing much happening,’ said John O’Donnell, principal of LJ Hooker Mount Maunganui.”
“‘Life is not as exciting as some people would like. There are no great trends in the marketplace and prices are definitely not going up,’ he said.”

The National Post in Canada. “Royal Bank of Canada singled out the Vancouver market as ‘unsustainable,’ based on the fact the current median household income in the city of $54,912 means a typical family would have to shell out 72.8% of their pre-tax income to meet all the expenses of owning an average two-storey home.”

The New York Sun. “Money manager James Melcher adds that most people believe higher short-term interest rates, increased minimum monthly repayment levels for credit card debt, higher energy prices, the inability of households overburdened with debts to refinance homes in a declining market, the fact that wage earners have had no increase in inflation-adjusted earnings over the past several years, and a variety of other seriously negative factors will only slow consumer spending a fraction of a percent.’”
“‘We suspect that most of them also believe in Santa Claus and the Tooth Fairy,’ he quips.”


----------



## Remix

Billo said:


> Yes I would. But like everything else you have to shop around for good location and price.
> 
> Billo


 
Shoping around is definitely a good idea as a build up of inventory and houses sitting on the market for a while are resulting in price cuts in many areas.

The investor can use this to his/her advantage in negotiating but then he should also realise as he forks out on stamp duty and other significant costs that he's buying an asset whose market value is weakening and whose yield is pitiful.


----------



## whizzbang

Duplex said:


> From Belgium. ...
> 
> From Australia. ...
> 
> From New Zealand. “....
> 
> The National Post ....
> The New York ...
> ”



Phew! just as well that won't happen here!


----------



## Maine

There are many farmers sitting on 2m plus farms earning 40k. They are being advised to borrow against the farm and invest in property eg golf courses in Florida. Note farms can be rented for less now than 20 years ago. PE ratios are above 200 while top Irish companies are below 15.

Most of these farmers would be better advised to sell part of the farm at current huge prices and then invest it. This way the risk is balanced.

Banks are only loaning to this market because of property boom means they think can sell the farms easily if need be. Hence if property was to slip banks will shut the taps off quickly and go back to income based borrowing as they were between 1990 and 2000. Incomes are so low that loans values would collapse.


----------



## bearishbull

Billo said:


> Yes I would. But like everything else you have to shop around for good location and price.
> 
> Billo


So you think rental yields of 1 or 2 or 3% gross are good despite the cost of finance rising and even the banks saying capital appreciation will slow to 3% or less next year?? Your on course to be the next Donald Trump for sure!


----------



## Maine

Billo said:


> After years of this thread,the bulls are still laughing all the way to the banks.
> Rgds
> Billo


 
Current bears should study the Nasdaq 1999 to 2006. Nasdaq bears looked stupid with with their logic as the Nasdaq soared in 1999 and 2000 up above the 5000 market. However it then promptly fell all the way down to 1500 as logic returned and mania subsided.

The problem for Ireland is incomes are not going to go up either in nominal or in real terms. IMO after the downturn of 2007 to 2010 property prices will not recover in nominal terms until maybe all the way to 2020.

Same as H Paulson admitted last month re US when he said middle american income had not risen thru 4 years of boom in the US ( he was head of G Sachs ) 

We are approaching our lost decade at speed. 

In Nasdaq timelines we are at equivalent of 2000.


----------



## JumpShot

Calina said:


> Apparently statistically, we're above average savers - but you have to set that off against a massive amount of consumer debt as well.
> 
> Debt repayment (principal component) is counted as savings in national statistics.


----------



## beattie

Billo said:


> Yes I would. But like everything else you have to shop around for good location and price.
> 
> Billo


 

It looks like it mighn't be that difficult to find a 'bargain' in the future. The Sindo has a headline which might cause a few investors to offload their properties before it gets worse.


*"Dublin property prices falling by up to 20 per cent"*

http://www.unison.ie/irish_independent/stories.php3?ca=184&si=1694210&issue_id=14687

(needs registration)


----------



## plaudit

Maybe Billo could suggest a few propeties where we can expect yields of about 5-7% and capital appreciation of ~20% over the next 5 years?


----------



## exile

It's 12pm (in Ireland) and no one's pointed out the Sindo headline yet?

[FONT=Arial, Verdana, Arial]*Dublin property prices falling by up to 20 per cent

*Not very ambiguous.  Nothing too special in the article either - examples of reduced asking prices.  Anyone spot their own example from this thread in the article?  Do the Sindo do their research here too? 

[/FONT]


----------



## Calina

exile said:


> It's 12pm (in Ireland) and no one's pointed out the Sindo headline yet?
> 
> [FONT=Arial, Verdana, Arial]*Dublin property prices falling by up to 20 per cent*
> 
> [/FONT]



Well at 10.11.... there was some indication...


----------



## fatmanknows

exile said:


> It's 12pm (in Ireland) and no one's pointed out the Sindo headline yet?
> 
> [FONT=Arial, Verdana, Arial]*Dublin property prices falling by up to 20 per cent*[/FONT]
> 
> [FONT=Arial, Verdana, Arial]Not very ambiguous. Nothing too special in the article either - examples of reduced asking prices. Anyone spot their own example from this thread in the article? Do the Sindo do their research here too?
> 
> [/FONT]


 
The evidence of what's really happenin out there (and what some savy AAM posters spotted months ago) is now starting to spill out. Expect such reports to gather momentum as conditions in the market become progessively worse. I think it's highly probable that capital appreciation on today's values are at least a decade away. In between that time however values are in for a serious dip as sap investors run for the exit. The evidence of the adjustment is now very apparent to all but the stubbornly headed amateur who still refuses to accept ( for a little while longer anyway) that it never was always a one way bet. As a breed I would not like to see this type of sap investor dissappear however, after all who else is gonna subsidise the roof over my head.


----------



## exile

Calina said:


> Well at 10.11.... there was some indication...



What?  There are other threads on this forum?


----------



## magern

I am looking to buy at present having sold a place in Swords in August, and I have noticed a number of trends that would suggest we 
are definetely in a buyers market:

1) Pricies quoted on myhome on some properties have fallen in recent weeks

a) Portmarnock €430k now €415k
b) Clontarf €400k now €390k
c) Bray €400k now €385k

2) Three years ago when I brought you had to chase the selling agent to get a bid in whereas now they are ringing you after viewings to see if you are going to submit a bid.

3) Properties appear to be staying on the market for quiet a long time. I went sale agreed on my old place after a week in May, a neighbouring property has been on the market for the last 6 - 8 weeks.


----------



## beattie

magern said:


> I am looking to buy at present having sold a place in Swords in August, and I have noticed a number of trends that would suggest we
> are definetely in a buyers market:
> 
> 1) Pricies quoted on myhome on some properties have fallen in recent weeks
> 
> a) Portmarnock €430k now €415k
> b) Clontarf €400k now €390k
> c) Bray €400k now €385k
> 
> 2) Three years ago when I brought you had to chase the selling agent to get a bid in whereas now they are ringing you after viewings to see if you are going to submit a bid.
> 
> 3) Properties appear to be staying on the market for quiet a long time. I went sale agreed on my old place after a week in May, a neighbouring property has been on the market for the last 6 - 8 weeks.


 

Why are you going to buy in a market that is falling? Would you not be better to sit on the sidelines for the time being and get a sweeter deal in 6 months or so


----------



## hmmm

Hilarious site, if it wasn't so pathetic
http://iamfacingforeclosure.com/


----------



## paddyd

Interesting article in the Sunday Indo today about the amount of % drops in the 'high-end' of the Dublin market, especially at the auctions. Only 15% of houses at auction sold in past 2 weeks. Highest drop was 20% in AMV price. most were in the 5-10% range drops, which is still surprising.

interestingly, I was told a few weeks back that the auctioneer's were telling their friends to sell any investment property, as the market wouldn't hold the 2% yield compensating with capital appreciation anymore.

Maybe that explains the complete glut of property coming on the market for the new season since the beginning of Sept.


----------



## liteweight

It amazes me to think that so many on this thread will now sing the praises of the Sindo, just because it's agreeing the sentiment of the majority here. Usually none of you have a good word to say about it, or it's reporting!!


----------



## paddyd

hey don't worry, I never recommend the Sindo! they are always last to the party (or the funeral in this case?)

Could be worse, they could be the Economist 

TBH, I think the market is just trimming the fat at the high-end. The Sindo only mentions the houses in PD-land, the 8.5mill house is now listing for 7.5mill. The 4.5mill house 'slashed' to 3.9mill. Do we care??


----------



## exile

liteweight said:


> It amazes me to think that so many on this thread will now sing the praises of the Sindo, just because it's agreeing the sentiment of the majority here. Usually none of you have a good word to say about it, or it's reporting!!



Just to be clear, as the person who linked to it (in this thread) - I think it's a rag   However it's free on the web and I'm abroad...


----------



## fatmanknows

exile said:


> Just to be clear, as the person who linked to it (in this thread) - I think it's a rag  However it's free on the web and I'm abroad...


 
Ain't nothing wrong with rags when they spew the odd grain of truth. Don't be expecting  to see such headlines in the IT for a while.


----------



## paddyd

The IT will only realise the fat-trimming price adjustments when one of their contributors tries to sell their pile  

and then write a panic article!


----------



## markyboy

*Headline*



beattie said:


> *"Dublin property prices falling by up to 20 per cent"*
> 
> http://www.unison.ie/irish_independent/stories.php3?ca=184&si=1694210&issue_id=14687



Somehow, they managed to miss one of the properties in their own property section (oh and it's not even in Dubin!). This was in July, down to [broken link removed] today!


----------



## plaudit

I wouldn't buy the (S)indo except for its free on the net.


----------



## beattie

plaudit said:


> I wouldn't buy the (S)indo except for its free on the net.


 
But as so many people do buy it I would imagine articles like they ran today would have a major impact on the sentiment of a large cross section of the house buying (or selling) public. Maybe the O3 girls can do some analysis on sentiment next week.


----------



## Maine

paddyd;282653
TBH said:
			
		

> The Sindo article is bad for sentiment, it has plenty of readers and tomorrow across Ireland people will be talking about it - not just the bears. It will give the tree a shake and some fruit will fall.
> 
> Headline price reductions are one of the last options anytime. That is why they are important. It means there is no interest in the property and as the seller is getting worried the price gets chopped. However it also reduces prices for the next seller and damages sentiment locally. Everyone locally knows if the price has been cut and now start to believe stories re falling prices in the media.


----------



## Duplex

IF the TD's start selling up it must be a sign that the top is in.  Ivor may have decided to cash in his chips but why now?

http://www.timesonline.co.uk/article/0,,2091-2372515,00.html


----------



## paddyd

Maine said:


> However it also reduces prices for the next seller and damages sentiment locally. Everyone locally knows if the price has been cut and now start to believe stories re falling prices in the media.


 

I agree. Irish people have had it very good in the past, in that houses sell in a matter of weeks. In a lot of other countries things can take 6 months and possibly a lot more.
Now, ina  cooling market, when people don't sell immediately, they panic and drop the price. Then things snowball, and every hse on the street comes off the market or faces dropping the price.
These things tend to happen very quickly, and the market flat-lines for a few months (i.e. it doesn't drop, but doesn't rise anything worth a damn either).


----------



## Bedsit

Here is an interesting article from Bloomberg:

*Want to Avoid Housing Slump? Drop the Commute*

http://www.bloomberg.com/apps/news?pid=20601039&sid=aOuCmpF4xb6k&refer=home


----------



## walk2dewater

Bedsit said:


> Here is an interesting article from Bloomberg:
> 
> *Want to Avoid Housing Slump? Drop the Commute*
> 
> http://www.bloomberg.com/apps/news?pid=20601039&sid=aOuCmpF4xb6k&refer=home


 
Yeah, saw that too. Basically supporting the theory on here (2Pack?) that commuter-ville will get hit hardest.

The writer hits on a nerve. In a few years time it’ll be generally accepted common-sense, social norm, herd-think, call it whatever, that commuting 3hr+/day is entirely for lunatics. I’m even starting to hear people say positive things about my living and financial arrangement (ultra cheap rent, walk to work, surround myself with quality services). A year ago I was “mad”.


----------



## mollser

http://www.askaboutmoney.com/showthread.php?t=37214

another seller struggling...

Personally I think this is turning rather quickly, in certain areas.

What has bugged me though, about a month ago when people were highlighting daily rises in houses for sale on daft and myhome as evidence of increasing supply, this was knocked back quite authoritively by certain posters, citing any number of reasons for the increases in the figures - ie popularity of certain sites etc etc.

Well it seems quite clear that the supply of property coming to the market has increased markedly, as evidenced by most estate agents.  I just think an apology is due from those with head in the sand!   (was this why 2pack got banned btw???)


----------



## fatmanknows

[broken link removed]

See No 4 in List - 13 Darty Road - amv €3.75m

above property was due to be auctioned this thursday 28th. Just passed over weekend and noticed auction sign replaced with 'For Sale' sign. Seems like there's no confidence  of selling this in the room - change of tactics to avoid having a failed sale at auction.


----------



## beattie

fatmanknows said:


> [broken link removed]
> 
> See No 4 in List - 13 Darty Road - amv €3.75m
> 
> above property was due to be auctioned this thursday 28th. Just passed over weekend and noticed auction sign replaced with 'For Sale' sign. Seems like there's no confidence of selling this in the room - change of tactics to avoid having a failed sale at auction.


 
Bet they are kicking themselves for not getting it on the market 6 months ago. It is an interesting tactic for them to change course so suddenly. This will be an interesting one to follow


----------



## Art

Did anybody see the Irish Independent property supplement last Friday? Seemingly a new development in Terenure was due to be launched over the weekend. However all of the properties, which ranged in value from 950k to 3.5million were sold prior to launch.


----------



## StoppedClock

Art said:


> Did anybody see the Irish Independent property supplement last Friday? Seemingly a new development in Terenure was due to be launched over the weekend. However all of the properties, which ranged in value from 950k to 3.5million were sold prior to launch.


 
Forgive my ignorance as I have not started building my property empire yet and so have never bought off plan but what is a development launch if not the first time you can buy the properties? If this is not a launch what is it called when they launch.. I mean commence showing plans and taking orders etc.?


----------



## CelloPoint

Art said:


> Did anybody see the Irish Independent property supplement last Friday? Seemingly a new development in Terenure was due to be launched over the weekend. However all of the properties, which ranged in value from 950k to 3.5million were sold prior to launch.



Anyone remember when we were discussing that developer with those sea-front apartments in Clontarf, who plastered 'sold' signs on a couple of his flats so as to arouse interest? So as to give prospective buyers a sense of reassurance that they were buying an asset that is in high demand?

But yes, if the developer of that estate in Terenure managed to shift these properties to wealthy (and therefore astute by implication) people/investors, then fair balls to him.


----------



## fatmanknows

Art said:


> Did anybody see the Irish Independent property supplement last Friday? Seemingly a new development in Terenure was due to be launched over the weekend. However all of the properties, which ranged in value from 950k to 3.5million were sold prior to launch.


 
I had a look last W/E at this Sean Mulryan Developement (Ballymore). Pretty impressive finishings and internal fittings. The only part sold out are the three beds in the current phase. The top price in the estate are for 5 beds @ €1.95m.There are 4 X  6 beds which they have not priced as yet - The €3.5m you read is a misprint. If there is a drawback for me it would be the gardens ( or lack of). You're paying €2m for a place without a front garden and only a postage stamp size back one. Well landscaped communal front though. Not too long ago you'd get a walled estate and and gate lodge for €2m. 

The viewing was fairly busy - given that it was raining. On entering, everybody was made wear blue plastic coverings over their footwear. Felt a bit like a scene from ER in the operating theatre. (me being the G Clooney lookalike ...naturally.)

PS: Annual Service Charge €3.5K ish ....which includes membership of a gym they intend building at the back somewhere.


----------



## tententwenty

CelloPoint said:


> But yes, if the developer of that estate in Terenure managed to shift these properties to wealthy (and therefore astute by implication)


Err, in the last few years, anyone and his donkey could get a loan for property and become a "property developer / speculator". It doesn't imply any particular astuteness on their part, a fact which is reinforced by their purchase of these properties in Terenure.


----------



## Remix

Art said:


> Did anybody see the Irish Independent property supplement last Friday? Seemingly a new development in Terenure was due to be launched over the weekend. However all of the properties, which ranged in value from 950k to 3.5million were sold prior to launch.


 
Going from memory here, but a new Terenure development was also mentioned in the SBPost yesterday. They sold about 40 of them earlier in the year when things were still "wild and crazy". The still have 40-50 of them left to sell.

I'll dig out the details later unless someone posts in the meanwhile.


----------



## zac

[FONT=Arial, Verdana, Arial]*Property boom peters out as apartment prices fall *[/FONT]

[FONT=Verdana, Arial]*By BILL TYSON, Personal Finance Editor *[/FONT]

Article text removed-note our Posting Guidelines around copyright and reproducing entire articles.

[FONT=Arial, Verdana, Arial]*Dublin property prices falling by up to 20 per cent*[/FONT] 

[FONT=Verdana, Arial]NICK WEBB [/FONT]

Article text removed-note our Posting Guidelines around copyright and reproducing entire articles
[FONT=Verdana, Arial]=======================================[/FONT]



[FONT=Verdana, Arial]history repeating itself or this time its different???[/FONT]


----------



## plaudit

Interest rates are rising now, they were still falling in 1999 IIRC. There are also fundamental differences in supply of new stock.


----------



## Remix

I agree. The first article is from 1999 and what saved the market in that instance was the ECB (from Oct 2000) taking interest rates down to 
emergency low levels and keeping them there way too long for Ireland's good.

The housing market entered a frenzy with crazy lending and a growth in personal debt never before seen in Ireland (and probably the world). 

What's different about this years slowdown ? Interest rates are going up and Ireland has the world's most severe ratio of private debt to GDP (190%).


----------



## SHARP

Heard at the weekend from the employee of one of the largest property developers in the country that the Owner is currently selling ALL his Irish Property Portfolio.....except his main residence.

Rumours that he is getting out of the business, but when I asked about his other property interests abroad - "no they are staying the same - he's only selling the Irish ones"

Seems to me like another indicator of how people " in the know " realise that we are at the top of the curve and ready to fall......

Interesting...


----------



## Sidewinder

plaudit said:


> There are also fundamental differences in supply of new stock.



Not to mention about 5 years worth of supply lying around empty!


----------



## Duplex

Sidewinder said:


> Not to mention about 5 years worth of supply lying around empty!


 
Least we forget the US slowdown. 

[broken link removed]


----------



## CelloPoint

SHARP said:


> Heard at the weekend from the employee of one of the largest property developers in the country that the Owner is currently selling ALL his Irish Property Portfolio.....except his main residence.
> 
> Rumours that he is getting out of the business, but when I asked about his other property interests abroad - "no they are staying the same - he's only selling the Irish ones"
> 
> Seems to me like another indicator of how people " in the know " realise that we are at the top of the curve and ready to fall......
> 
> Interesting...



All this  talk of "in-the-know-ness" is annoying me now (a recurring theme in this thread). Either name this well-known property developer, or stop boasting on AAM about the fact that you are "in-the-know" more so than anybody else. I'm sure your intention was to give more credibility to your opinion by declaring yourself more "in-the-know", but your opinion is actually diminished by failing to reveal your source!

So no more in the know, about someone who we all know... ya know?


----------



## zac

Remix said:


> I agree. The first article is from 1999 and what saved the market in that instance was the ECB (from Oct 2000) taking interest rates down to
> emergency low levels and keeping them there way too long for Ireland's good.
> 
> The housing market entered a frenzy with crazy lending and a growth in personal debt never before seen in Ireland (and probably the world).
> 
> What's different about this years slowdown ? Interest rates are going up and Ireland has the world's most severe ratio of private debt to GDP (190%).



just come facts:

first article date: dec 1998
ECB rate cut: 11 May 2001 from 4.75 to 4.5
after 29 months

Fed rate cut Jan 3 2000, 

ECB and FED delay was 17 months

US bond market is starting to price in a FED rate cut late 2007, ECB might start rate cuts in 2008, thats a guess using previous cycle history.

disclosure:
i do not own a house, just thought i should write some facts to balance out one sided consensus here..

US has existing home median price drop last month first time in 11 yrs, report came out today, but prices never went down in US for one whole year since 30s depression . any flaws here please correct me.


----------



## Savvy

This is an extract from an article on ireland.com about the US property market.Prices there are down about 1.7% from Aug 05 to Aug 06.

_David Lereah, the Realtors' chief economist, said the drop in prices had been expected, indicating that sellers are finally starting to lower their asking prices in the face of weaker sales and soaring inventories._

We seem to be catching up on the Americans quickly. Our inventories are increasing rapidy, there has been some slight reduction in asking prices and sales are certainly weaker.To me this can only mean the downturn will be far worse than what they will experience.


----------



## zac

Remix said:


> I agree. The first article is from 1999 and what saved the market in that instance was the ECB (from Oct 2000) taking interest rates down to
> emergency low levels and keeping them there way too long for Ireland's good.
> 
> The housing market entered a frenzy with crazy lending and a growth in personal debt never before seen in Ireland (and probably the world).
> 
> What's different about this years slowdown ? Interest rates are going up and Ireland has the world's most severe ratio of private debt to GDP (190%).



is per-capita GDP to debt is worlds most severe too?anybody knows? i dont.


----------



## StoppedClock

zac said:


> is per-capita GDP to debt is worlds most severe too?anybody knows? i dont.


 
Not sure if I am understanding the question but if it is :
is our per capita debt to our per capita GDP the worlds worst then yes.  It is the same ratio as our debt to GDP


----------



## Remix

zac said:


> just come facts:
> 
> first article date: dec 1998
> ECB rate cut: 11 May 2001 from 4.75 to 4.5


 
Correct, I should have said ECB rates peaked in Oct 2000

http://www.ecb.int/stats/monetary/rates/html/index.en.html


----------



## southsideboy

fatmanknows said:


> [broken link removed]
> 
> See No 4 in List - 13 Darty Road - amv €3.75m
> 
> above property was due to be auctioned this thursday 28th. Just passed over weekend and noticed auction sign replaced with 'For Sale' sign. Seems like there's no confidence of selling this in the room - change of tactics to avoid having a failed sale at auction.


 
AFAIK the auction sign was ripped off by kids. There's a piece of the auction sign hanging off. I live just off Dartry Road and this house has attracted a lot of viewings so I doubt they are not going to auction.


----------



## Remix

zac said:


> is per-capita GDP to debt is worlds most severe too?anybody knows? i dont.


 
*The rating agency Fitch said it now has five countries on watch for "macro-prudential stress",* up from two last year, using a set of indicators. A mixed bag, they comprise Iceland, Azerbaijan, South Africa, Russia *and, surprisingly, Ireland, where the ratio of private credit to GDP has reached 190pc, the world's highest.* The denouement for Ireland may not be pretty, since it gave up control of monetary policy when it joined the euro.

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2006/09/12/cctrade12.xml


----------



## StoppedClock

zac said:


> US has existing home median price drop last month first time in 11 yrs, report came out today, but prices never went down in US for one whole year since 30s depression . any flaws here please correct me.


 
*Existing home sales fall for fifth straight month*

*First year-over-year decline in more than 11 years*


http://www.msnbc.msn.com/id/14999258/


----------



## soma

Savvy said:


> _David Lereah, the Realtors' chief economist, said the drop in prices had been expected, indicating that sellers are finally starting to lower their asking prices in the face of weaker sales and soaring inventories._



Anyone who keeps an eye on the U.S. bubble blogs will recognise that name. I've often seen references to this guy Lereah as '_Liar_eah' etc. If you're wondering why.. compare his statement above about expected falling prices with the title of the book he has been flogging since 2005:

 "*Are You Missing the Real Estate Boom?: The Boom Will Not Bust and Why Property Values Will Continue to Climb Through the End of the Decade - And How to Profit From Them".*

Any bulls who want a copy visit amazon 
http://www.amazon.com/Are-Missing-R...=pd_bbs_2/002-2527461-4734409?ie=UTF8&s=books

Altho be warned that the US property bears are dancing all over that books grave on the reviews I believe..

PS I wonder who the Irish equivalent is..


----------



## whizzbang

If property prices start to go down do you think we are going to have the media report A or B?

A) Property prices down 1% in October.

B) October Prices up 13% year on year!


----------



## Superman

For those who keep quoting the "Debt is 190% of GDP":
Don't forget that GDP is artificially high in Ireland due to low tax rates.
The Debt to GNP ratio would be a far more interesting figure...


----------



## StoppedClock

Superman said:


> For those who keep quoting the "Debt is 190% of GDP":
> Don't forget that GDP is artificially high in Ireland due to low tax rates.
> The Debt to GNP ratio would be a far more interesting figure...


That figure is too scary even for us bears!!


----------



## zac

Sidewinder said:


> Not to mention about 5 years worth of supply lying around empty!



anybody knows property sales per yr in ireland?
back of the envelop calculations, could be way off

800 mortgages are being approved in ireland per day, thats almost 200k a year, 13% are morgage swithcing, source rte.ie, so 175k are buyers..
lets say half of them actually buy, 88k?(could be more)

so 88*5=440k houses are empty?


----------



## zac

StoppedClock said:


> Not sure if I am understanding the question but if it is :
> is our per capita debt to our per capita GDP the worlds worst then yes.  It is the same ratio as our debt to GDP



thanks, would u mind sharing your source?


----------



## soma

StoppedClock said:


> That figure is too scary even for us bears!!



agreed!


----------



## paddyd

zac said:


> anybody knows property sales per yr in ireland?
> back of the envelop calculations, could be way off
> 
> 800 mortgages are being approved in ireland per day, thats almost 200k a year, 13% are morgage swithcing, source rte.ie, so 175k are buyers..
> lets say half of them actually buy, 88k?(could be more)
> 
> so 88*5=440k houses are empty?


 

I think the general rule is that 15-20% of houses in the country are empty (I know I've read '1 in 5' somewhere a couple of times)


----------



## whizzbang

zac said:


> anybody knows property sales per yr in ireland?
> back of the envelop calculations, could be way off
> 
> 800 mortgages are being approved in ireland per day, thats almost 200k a year, 13% are morgage swithcing, source rte.ie, so 175k are buyers..
> lets say half of them actually buy, 88k?(could be more)
> 
> so 88*5=440k houses are empty?



does the 800 a day include re-mortaging/equity extraction and the like? Or is that what you mean by "Mortgage switching"?


----------



## zac

StoppedClock said:


> *Existing home sales fall for fifth straight month*
> 
> *First year-over-year decline in more than 11 years*
> 
> 
> http://www.msnbc.msn.com/id/14999258/



that decline is on aug 06 over aug 05.. monthly yr over yr

what i asked previously was, has one yrs median price ever been lower than previous years median price except in 30's?

i agree things are pretty bad in US real estate right now.


----------



## StoppedClock

zac said:


> thanks, would u mind sharing your source?


 
Source was the post on AAM (don’t know how to link to other posts) stating that _"Debt is 190% of GDP" _
If that is the worst in the world and since it is a ratio then dividing both sides of the ratio by the population will keep the same ratio so that too must be the worst in the world.


----------



## zac

whizzbang said:


> does the 800 a day include re-mortaging/equity extraction and the like? Or is that what you mean by "Mortgage switching"?


God only knows but according to rte business new 13% is switching/remortgage


----------



## Remix

Superman said:


> For those who keep quoting the "Debt is 190% of GDP":
> Don't forget that GDP is artificially high in Ireland due to low tax rates.
> The Debt to GNP ratio would be a far more interesting figure...


 
Good point. In the US and most of Europe, GDP is about the same as GNP. In Ireland, I believe GDP is about 30% higher than GNP - skewed by multinational activity. 

If we compare on the GNP basis it puts the Irish debt ratio closer to xxxxx <censored on the basis of being too scary even for this thread>


----------



## miju

CelloPoint said:


> All this talk of "in-the-know-ness" is annoying me now (a recurring theme in this thread). Either name this well-known property developer, ......... I'm sure your intention was to give more credibility to your opinion by declaring yourself more "in-the-know", but your opinion is actually diminished by failing to reveal your source!


 
point well made cellopoint and it certainly does detract from the credibility of the conversatino from both sides


----------



## zac

StoppedClock said:


> Source was the post on AAM (don’t know how to link to other posts) stating that _"Debt is 190% of GDP" _
> If that is the worst in the world and since it is a ratio then dividing both sides of the ratio by the population will keep the same ratio so that too must be the worst in the world.



StoppedClock... househole+government debt is 96% of GDP and that is lower than it was in 1990.

household debt is 72% of gdp and that is lower than US and UK. above eu average though, maybe deomograhics differences between ireland and eu? we are young they are old.

again please correct if see a prob(with source)
my source: , bank of ireland

i have been reading this thread couple of days and there a lot of negativity, and sometimes unfounded negativity. we better stop believing the rumours.

again, i wouldnt mind prices go down, i dont own a house.


----------



## Duplex

zac said:


> anybody knows property sales per yr in ireland?
> back of the envelop calculations, could be way off
> 
> 800 mortgages are being approved in ireland per day, thats almost 200k a year, 13% are morgage swithcing, source rte.ie, so 175k are buyers..
> lets say half of them actually buy, 88k?(could be more)
> 
> so 88*5=440k houses are empty?


 
2000 80,858
2001 69,062
2002 93,136
2003 97,888
2004 104,305
2005 120,637

 Figures for mortgage approvals (CSO or DOE)


----------



## whizzbang

miju said:


> point well made cellopoint and it certainly does detract from the credibility of the conversatino from both sides



agreed, it would be great if we could keep this to published/verifiable facts as often as possible rather than rumors. They don't help anybody.

If anyone has evidence of a major player in the market selling up then I'd definitly be interested! Chances are the smart ones ill keep it secret though.


----------



## Superman

zac said:


> household debt is 72% of gdp and that is lower than US and UK. above eu average though, maybe deomograhics differences between ireland and eu? we are young they are old.
> 
> again please correct if see a prob(with source)
> my source: , bank of ireland



See Fitches as reported here:
http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2006/09/12/cctrade12.xml


----------



## zac

Duplex said:


> 2000 80,858
> 2001 69,062
> 2002 93,136
> 2003 97,888
> 2004 104,305
> 2005 120,637
> 
> Figures for mortgage approvals (CSO or DOE)



thanks, think CSO dont publish residential property transactions, 
800 per day is recent figure that i used..

problem is not all mortgage approvals result in peroprty transactions.im mortgage approved, havnt bought(yet), there are others out there like me.


----------



## Sidewinder

zac said:


> anybody knows property sales per yr in ireland?
> back of the envelop calculations, could be way off
> 
> 800 mortgages are being approved in ireland per day, thats almost 200k a year, 13% are morgage swithcing, source rte.ie, so 175k are buyers..
> lets say half of them actually buy, 88k?(could be more)
> 
> so 88*5=440k houses are empty?



No, yer forgetting we're just emerging from a speculating frenzy where everyone and his dog was buying 2 or 3 BTL/"investment" properties. In terms of the number of properties we actually _need_ each year, that's about 50-60K - and that's assuming immigration flows continuing at current rates. The "Pope's Children" demographic bulge has peaked for the usual "settling down and buying property" age group (say 25-35). If all the Poles decide to leave for pastures new, we really only need maybe 45K units a year.

There were 125K "investment" properties lying empty at the beginning of the year, with around 80K new units planned to be built in 2006.

We have massive oversupply, and that's _before _the stampede for the exits from the BTL/"investment" amateur brigade if prices start to fall.


----------



## Sidewinder

Plus, that 800-a-day figure includes equity-release, top-up and pure investor mortgages. FTBs and trader-upper mortgages only account for less than half of that.


----------



## zac

Superman said:


> See Fitches as reported here:
> http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2006/09/12/cctrade12.xml



gosh who to trust..
i guess fitch do not mean household debt, they are including all private sector debt i.e. also corporate debt.
if im buying house do i give monkeys about corporate debt?


[broken link removed]
[broken link removed]


----------



## zac

zac said:


> gosh who to trust..
> i guess fitch do not mean household debt, they are including all private sector debt i.e. also corporate debt.
> if im buying house do i give monkeys about corporate debt?
> 
> 
> [broken link removed]
> [broken link removed]




oops


----------



## zac

Sidewinder said:


> Plus, that 800-a-day figure includes equity-release, top-up and pure investor mortgages. FTBs and trader-upper mortgages only account for less than half of that.



we were just tryin to calculate property transactions because somebody said 5 yr supply is unoccupied..

investors mortgage to buy, no?

thanks for pointing out the that num included equity releases, rte reporter missed that.


----------



## Duplex

Private sector credit growth is about 29% pa according to the CSO. Worth noting that securitised mortgage debt is *NOT* included in these figures? This seems odd because the debt originates in Ireland and would constitute private sector credit. 


http://www.finfacts.com/irelandbusinessnews/publish/article_10007112.shtml


----------



## genki33

I imagine some reasonable percentage of corporate debt is property debt also? 
All those expensive sites in ballsbridge, etc, hardly show up on someones monthly mortgage statement. Yet.


----------



## zac

genki33 said:


> I imagine some reasonable percentage of corporate debt is property debt also?
> All those expensive sites in ballsbridge, etc, hardly show up on someones monthly mortgage statement. Yet.



good point, what i have read is that worldwide there is very little correlation between residential and commercial property inflation, dont know whats the the correlation in  irish commercial and residential markets... any ideas?
as a consumer my debt servicing is not imapacted by lets say intels or jury's debt.. theirs depends on economy, or macro economics, im not economist though take it by grain of salt,


----------



## Duplex

zac said:


> good point, what i have read is that worldwide there is very little correlation between residential and commercial property inflation, dont know whats the the correlation in irish commercial and residential markets... any ideas?


 

I think that there is a pretty strong correlation between commercial and residential markets. London commercial suffered a severe slump in the early 90's as did Tokyo and New York (see link). 

[broken link removed]


PS

A link to IPD which has good data on commercial returns, growth etc for Ireland.

[broken link removed]


Worth comparing these performance figures with Germany.
[broken link removed]


(Interesting how office rents have remained pretty much static in New York for the twenty year period covered in this chart)


----------



## sonar

"We're closer to Boston then Berlin"

That's been the boast over the years to reassure everyone that all is ok with our debt-based "approach" to the economy.

Just saw on Bloomberg TV a professor saying that Boston is now suffering the most severe property crisis in the US. The price falls recorded there are worse than anywhere else in the US.

Oh Dear!


----------



## CelloPoint

sonar said:


> "We're closer to Boston then Berlin"


 
Lol, the new slant is hilarious!


----------



## beattie

sonar said:


> "We're closer to Boston then Berlin"
> 
> That's been the boast over the years to reassure everyone that all is ok with our debt-based "approach" to the economy.
> 
> Just saw on Bloomberg TV a professor saying that Boston is now suffering the most severe property crisis in the US. The price falls recorded there are worse than anywhere else in the US.
> 
> Oh Dear!


 
I hope they don't start blaming the 'Anglo-Saxon' model when things go pear shaped....  The last thing this government needs (especially with all the trouble at the moment) is for the bubble to burst before the next election


----------



## CelloPoint

beattie said:


> I hope they don't start blaming the 'Anglo-Saxon' model when things go pear shaped.... The last thing this government needs (especially with all the trouble at the moment) is for the bubble to burst before the next election


 
Not too sure about this at the mo, but:

Anyone think that Bertie will resign over the next couple of days/weeks, ending FF's reign, by calling an early election? Remember what instigated Albert Reynolds's exit - a beef tribunal (which we've since all forgotten about). Is Bertie's 'dark incident from the past' the smoke screen that is needed for him to vanish off the stage in a puff, leaving somebody else to pick up the pieces once the house of cards collapses?

</end of (plausible) conspiracy theory>


----------



## beattie

CelloPoint said:


> Not too sure about this at the mo, but:
> 
> Anyone think that Bertie will resign over the next couple of days/weeks, ending FF's reign, by calling an early election? Remember what instigated Albert Reynolds's exit - a beef tribunal (which we've since all forgotten about). Is Bertie's 'dark incident from the past' the smoke screen that is needed for him to vanish off the stage in a puff, leaving somebody else to pick up the pieces once the house of cards collapses?
> 
> </end of (plausible) conspiracy theory>


 
No he doesn't want to go out this way IMO. He won't want to exit by the side door though some of his backbenchers will be getting very tetchy even before they hit the hustings. Just look what happened to the the two FF politicians at the opening of the road today (even though that is a local issue)


----------



## Maine

zac said:


> good point, what i have read is that worldwide there is very little correlation between residential and commercial property inflation, dont know whats the the correlation in irish commercial and residential markets... any ideas?as a consumer my debt servicing is not imapacted by lets say intels or jury's debt.. theirs depends on economy, or macro economics, im not economist though take it by grain of salt,


 
Zac - see below, central bank is good source of facts on debt.

From Central Bank sectoral report.

This shows that during 12 months to June 2006 the manufacturing sector was borrowing almost 15m a week while the mortgage / construction / real estate industry was borrowing almost 1,000m a week. For other industries the figures are even weaker.

Suggests things may be just a little unbalanced to support growth in prices all the way to 2010.

[broken link removed]


----------



## Maine

Our GDP / GNP is on steriods anyway because of all the investment in property and borrowing mania. We are dependent on property so one can cut the above by 10% to 20% if property market crashes. Do some sress testing excluding some construction froth and ratios jump.  Fitch have spotted this and put it on the agendas of all the banks in Europe financing bank borrowing here who will now focus more on Irish banks balance sheets which are largely comprised of ....property lending.  This is why Irish banks will be loath to admit any problems because if they do the European banks will reach for the taps. 

Commercial property will lag the economy downwards - if we stop buying Range Rovers the dealer will eventually get a cut in his rent or move / downsize.


----------



## zac

Maine said:


> Zac - see below, central bank is good source of facts on debt.
> 
> From Central Bank sectoral report.
> 
> This shows that during 12 months to June 2006 the manufacturing sector was borrowing almost 15m a week while the mortgage / construction / real estate industry was borrowing almost 1,000m a week. For other industries the figures are even weaker.
> 
> Suggests things may be just a little unbalanced to support growth in prices all the way to 2010.
> 
> [broken link removed]



Maine, interesting points indeed, finally seen somebody with cold hard numbers, things are definitely unbalanced in irish economy, construction sector too big a proportion of the economy on the basis of comparison that i hv seen with uk and other eu countries...

problem is things can stay unbalanced or irrational for longer than you and i can imagine(or stay solvent trying to capitalize on those unbalances)
what do u think


----------



## zac

Maine said:


> Our GDP / GNP is on steriods anyway because of all the investment in property and borrowing mania. We are dependent on property so one can cut the above by 10% to 20% if property market crashes. Do some sress testing excluding some construction froth and ratios jump.  Fitch have spotted this and put it on the agendas of all the banks in Europe financing bank borrowing here who will now focus more on Irish banks balance sheets which are largely comprised of ....property lending.  This is why Irish banks will be loath to admit any problems because if they do the European banks will reach for the taps.
> 
> Commercial property will lag the economy downwards - if we stop buying Range Rovers the dealer will eventually get a cut in his rent or move / downsize.



true without invesmtnt in property GDP would be lot less..10-20% feel like too much, but guess that depends on the extent of the crash, has anyone seen analysis of that e.g. drop in GDP for every 1% drop in residential property value?


if there was a trouble with irish banks balance sheets e.g. aib or boi, i wouldnt have expected them to be making new all time highs, 

http://finance.yahoo.com/q?s=ire
http://finance.yahoo.com/q?s=aib

IMO market is better judge than a rating agency. i checked fitch rating on AIB's mortgage based debt, and its AAA, best rating that you can get...
whwther banks admit their troubles or not, markets would sense it before you and i.


----------



## bearishbull

zac said:


> Maine, interesting points indeed, finally seen somebody with cold hard numbers, things are definitely unbalanced in irish economy, construction sector too big a proportion of the economy on the basis of comparison that i hv seen with uk and other eu countries...
> 
> problem is things can stay unbalanced or irrational for longer than you and i can imagine(or stay solvent trying to capitalize on those unbalances)
> what do u think


When theres too many houses/apartments/offices then construction will slow dramatically, i feel we are close to supply exceeding demand, we'll still need 50-60k units a year but this implies a 40% reduction in homebuilding. Can we stick to sentiment on this thread, the debt debate has been debated before and its inevitable that credit growth will slow significanty soon (1-3 years), and with less credit there will be less money leant by banks and hence less credit to drive up prices. A correction is inevitable, its all about timing now.


----------



## Maine

problem is things can stay unbalanced or irrational for longer than you and i can imagine(or stay solvent trying to capitalize on those unbalances)
what do u think[/quote]

Agree with this. IMO big questions to ask for anyone are as follows -

1/ How safe is ones job if the property market slows - need to really analyse this
2/ Buying to live in - at least for 3 years now
3/ Can one comfortably afford another 1 % 

Private sector credit was 150,000 million in July 2003 from the dawn of time. people expected a levelling off however banks got around the rules and pumped things up - all the way up to 300,000 million currently. Next year this will hit 400,000 million. Banks could have a few other tricks and this is maybe the only remaining but a big caveat.

Alot of replies to the site estimate second half of next year could see the crunch and tend to agree with them. Interest rates increases will hurt.

IMO investing in Irish property for long term or pension from here is far too late. Go almost anywhere else and better value will be had long term. Familar with central london property market and despite at least a 10% gain in past year it is still minimum 20% below Ireland prices.


----------



## SHARP

CelloPoint said:


> All this talk of "in-the-know-ness" is annoying me now (a recurring theme in this thread). Either name this well-known property developer, or stop boasting on AAM about the fact that you are "in-the-know" more so than anybody else. I'm sure your intention was to give more credibility to your opinion by declaring yourself more "in-the-know", but your opinion is actually diminished by failing to reveal your source!
> 
> So no more in the know, about someone who we all know... ya know?


 

Woah , hang on there!

Im not "in the know", a friend of mine isn't "in the know" either - he only works for the guy and knows he is currently selling all his Irish properties. He was worried about his job because he thought he was selling the company, but it was confirmed that he is just selling his Irish properties only.

Sorry, I didn't want to come accross as being in the know, just what I was told at the weekend. The person who told me wasn't concerned about the property market, but his job and told me why he was initially worried.

And no, Im certainly not going to name the company because I would like to continue to be anoymous and if I say a name it could have comebacks

Make of it what you will


----------



## blindjustice

bearishbull said:


> A correction is inevitable, its all about timing now.


 

but what sort of a "correction"? does anyone foresee houses crashing to pre 2001 levels for example? Or will they go down by say 40,000 euros and sure its no big deal  as they went up so much in the first place that very few will have negative equity


----------



## hmmm

blindjustice said:


> but what sort of a "correction"? does anyone foresee houses crashing to pre 2001 levels for example? Or will they go down by say 40,000 euros and sure its no big deal  as they went up so much in the first place that very few will have negative equity



We get this every 20 pages of thread  The ranges go from the most pessimistic (include me), who would say we'll revert to the old housing price/earnings of says 8-10% yield on rents, and an income to mortgage ratio of 2.5 - 3 times earnings. Plus on the way down we'll invariably have a negative bubble which may see us undershoot this level temporarily. That's an over 50% drop, I won't scare you by saying what it actually is.

Midrange of peoples guesstimates would be about 30% drop I think. There's some consensus (I don't share) that 2001 represents a "fair" level.

Some think 10% only. Can't see that, other than in a bit of a dead cat.


----------



## Debtwish

13th September 2006

*One small step for rates….one giant leap for repayments*

*Why some buyers have seen housing costs rise nearly 50% in the past year.*

The housing market is stalling. Anecdotal evidence suggests that houses are taking longer to sell than this time last year and the number of For Sale boards is increasing. So what’s happening? Shouldn’t the combination of a booming economy, full employment, SSIA spending, low interest rates and unprecedented levels of immigration see these houses being snapped up? For the answer, step back just 12 months and imagine you are a Dublin house buyer.

_Rest of copyrighted article removed -- please post a link!_


----------



## SHARP

Debtwish said:


> 13th September 2006
> 
> *One small step for rates….one giant leap for repayments*
> 
> *Why some buyers have seen housing costs rise nearly 50% in the past year.*
> ......


 
That is an excellent piece and I have just printed it off to show friends. Thanks for posting it, not sure whether the Mods will allow it to remain though.


----------



## beattie

Anyone catch the piece on Newstalk just before the 8 o'clock news.They had an economist from DNG (I think, didn't catch his name) and a journalist from the property supplement of the Indo. The journo was even more bullish than the representative of the EA. He dismissed the article from the Sindo by saying that it was referring to a holiday home which had 30k knocked off the price. Presenter didn't exactly put on the spot though. Bring back Eamo, all is forgiven.....


----------



## plaudit

That article sums it up well.


----------



## redo

I think what we'll see when the market does decline/stall is the increase in the use of the "POA" price tag instead of highlighting a 50k drop.


----------



## SHARP

redo said:


> I think what we'll see when the market does decline/stall is the increase in the use of the "POA" price tag instead of highlighting a 50k drop.


 
Thats even starting allready


----------



## Savvy

SHARP said:


> Thats even starting allready



Have to say that I am in the market for a house and I have spotted this too.
it was almost a rarity for me to come across this but in the last 2 to 3 weeks I'm seen it more regularly.(I'm looking in the Laois area)


----------



## Sidewinder

SHARP said:


> That is an excellent piece and I have just printed it off to show friends. Thanks for posting it, not sure whether the Mods will allow it to remain though.



Agreed, excellent article.

The scariest bit of all is the realisation that the market has stalled because mortgages have become completely unaffordable at interest rates of a mere *3%

*Surely even the most bullish must recognise that this is insane. What happens if current predictions are true and we are facing into a period of 70's style stagflation? Imagine ECB rates at 7,8,9%? 12%? 

Oh, and someone asked about "fair prices". I'm very bearish, and think the market left "fair value" for housing behind sometime in the late 90s. 2000/1 was a natural _peak _of the market before the artificial and externally induced liquidity bubble. Call it 1998/9 prices as long-term fair value (adjusted for  inflation in the interim). But of course bubbles bursting tend to overshoot a bit on the way down....

The only question is whether we get humungous nominal falls over 3-4 years, or merely large nominal falls followed by a decade of flat prices while inflation erodes the rest of the bubble away.


----------



## HotdogsFolks

Does anyone know what % of people take out interest only mortgages?

Maybe I'm being silly, but why the hell would you pay €1500+ for a house miles away from your job, *which you will never own* because you are just paying the interest?

Why not just rent closer to your work (will be cheaper than €1500 per month) and not have to worry about interest rate / huge debt / etc. ?

I just don't get it.

Some anecdotal evidence: I have a few friends who have bought houses in places which no one would have considered living 10 years ago and have gotten themselves an "investment" property. They are totally stretched beyond their means, cannot afford to socialise like they used to, and to me at least, I can see they are way unhappier now. Some of my friends have lost a lot of weight. The stress etc. is clearly taking its toll. However, these friends are seen as "clever" because they are doing this. These "clever" friends are commuting a long time to work, have no life, yet won't admit this and keep up the act that everything is OK.

I find this really sad.

If these guys lose their job, or their girlfriend gets pregnant, or interest rates go up a bit more, they are totally screwed. If they can't sell their property, what will they do? Perhaps they will get a second job and cut out all spending. But this alone will affect so many businesses that relied on their money.

I can see a situation where everyone stops spending, people start sitting at home terrified to losing their insane loss making home, and Ireland becomes a depressing, dead country.

I'm quite worried about the next few years here, so I'm making my own plans to emigrate.


----------



## SHARP

Thats exactly my fear, people are struggling at 3% (even though most won't admit it), but what will happen when the rates rise to 4%(at this stage a given?) and it could go as high as 5/6.

Is that when we will see people missing payments and getting into trouble with the banks?

I have shown the above article to a very "head in the sand" so of person and they couldn't believe it, once I mentioned that we don't have control on the interest rates and they could go to even 5% - the look of worry and realization was incredible.


----------



## Maine

Sidewinder said:


> The only question is whether we get humungous nominal falls over 3-4 years, or merely large nominal falls followed by a decade of flat prices while inflation erodes the rest of the bubble away.


 
If the property market slows dramatically then at least 50,000 need to find alternative jobs, add the romanians and bulgarians plus Poles etc and no public sector safety net and result will be massive competition for jobs.

this is the problem in german housing market - lose your well paying job ( low or high skilled )that you had since the 90s and find you may have to take a 30% pay cut to get a job.

after property slowdown IMO there will be big wage deflation in private sector. Inflation will fall to minimal levels in Ireland and certainly will not increase affordability. Witness japan which has had minimal inflation for 10 years or even Germany as above where wages have been static for 5 years.

This is why japan govt has been printing money for years to try to get inflation / erode the real value of debt and had zero % interest rates - again people there if they lose job they have a big risk of having to take a pay cut hence had little wage price power


----------



## HotdogsFolks

SHARP said:


> ...once I mentioned that we don't have control on the interest rates and they could go to even 5% - the look of worry and realization was incredible.


 
How is it possible a homeowner doesn't know we don't control interest rates? Are these the same people buying in Cape Verde?


----------



## demoivre

SHARP said:


> That is an excellent piece and I have just printed it off to show friends. Thanks for posting it, not sure whether the Mods will allow it to remain though.



Don't embarrass yourself by showing it to your mates - some of the numbers are wrong and the analysis is flawed for a number of reasons that I can't be arsed to explain. I am amazed the mods haven't closed this thread ages ago - some of the reasoning on here merits the entire thread being dumped in " shooting the breeze" imo , some absolutely hilarious stuff though.


----------



## StoppedClock

demoivre said:


> Don't embarrass yourself by showing it to your mates - some of the numbers are wrong and the analysis is flawed for a number of reasons that I can't be arsed to explain. I am amazed the mods haven't closed this thread ages ago - some of the reasoning on here merits the entire thread being dumped in " shooting the breeze" imo , some absolutely hilarious stuff though.


 
How much have you "made" on property?


----------



## Howitzer

demoivre said:


> Don't embarrass yourself by showing it to your mates - some of the numbers are wrong and the analysis is flawed for a number of reasons that I can't be arsed to explain.


 
I'm usually quite good with numbers and didn't see any flaws on first inspection. What did I miss?


----------



## Debtwish

Debtwish said:


> 13th September 2006
> 
> *One small step for rates….one giant leap for repayments*
> 
> *Why some buyers have seen housing costs rise nearly 50% in the past year.*
> 
> The housing market is stalling. Anecdotal evidence suggests that houses are taking longer to sell than this time last year and the number of For Sale boards is increasing. So what’s happening? Shouldn’t the combination of a booming economy, full employment, SSIA spending, low interest rates and unprecedented levels of immigration see these houses being snapped up? For the answer, step back just 12 months and imagine you are a Dublin house buyer.
> 
> _Rest of copyrighted article removed -- please post a link!_


 
There is no link.  

And I have not breached copyright. (Whose copyright do you think I've breached?)  

Debtwish


----------



## beattie

demoivre said:


> Don't embarrass yourself by showing it to your mates - some of the numbers are wrong and the analysis is flawed for a number of reasons that I can't be arsed to explain. I am amazed the mods haven't closed this thread ages ago - some of the reasoning on here merits the entire thread being dumped in " shooting the breeze" imo , some absolutely hilarious stuff though.


 
You really should share this information if it is wrong, there seems to be a few bulls who need a bit of reassurance at the moment


----------



## Calina

demoivre said:


> Don't embarrass yourself by showing it to your mates - some of the numbers are wrong and the analysis is flawed for a number of reasons that I can't be arsed to explain. I am amazed the mods haven't closed this thread ages ago - some of the reasoning on here merits the entire thread being dumped in " shooting the breeze" imo , some absolutely hilarious stuff though.



The fact that you can't be bothered to explain suggests to me that there is nothing to explain, and above all else, suggests to me you're hypocritical for demanding that the three be closed or dumped in STB seeing as at least opponents of your point of view provide some reasoning for their POV. You've provided nothing. 

So if it's all the same to you, I would like an explanation as to why the analysis is flawed. Some of us are actually at the sharp end of looking for mortgages and funnily enough this is the reality. With interest rates going up, even if the sale price stays steady, the property is More Expensive to the buyer. The figures may be inexact - I haven't done the sums - but the broad thrust is correct. 

Is there some part of that you don't understand?


----------



## bren2002

If the figure below is correct, then jeybus!!

_Another way of looking at this is that if interest rates had remained unchanged, the increase in monthly repayments is the same as if the purchase price of the property had risen from €500,000 to nearly €740,000 in just one year!_


----------



## tententwenty

plaudit said:


> That article sums it up well.


What article? Can someone give me a link?? Anything??


----------



## miju

bren2002 said:


> If the figure below is correct, then jeybus!!
> 
> _Another way of looking at this is that if interest rates had remained unchanged, the increase in monthly repayments is the same as if the purchase price of the property had risen from €500,000 to nearly €740,000 in just one year!_


 
haven't read the article but that looks like the writer is pointing out what you are *now* paying for a €500k mortgage would be equivical to a €740k mortgage before the interest rates started to rise, at least thats my take on it



			
				miju said:
			
		

> http://www.askaboutmoney.com/showthread.php?p=252098#post252098


 
incidently the two properties i mentioned on the 1.8.06 beside my apt that were for sale that would be ideal FTB / Investor properties as they are very close to all major amenities and inside the m50 in dublin 11 have not only still *NOT SOLD* they've had next to no viewings

at the end of the month they'll be close to *3 months* on the market priced at 315k for 2 bed apts , maybe prospective buyers got turned off by the magnitude of empty apts there?????????


----------



## bren2002

It's been edited my a Mod.

http://www.askaboutmoney.com/showpost.php?p=283486&postcount=4625


----------



## SHARP

HotdogsFolks said:


> How is it possible a homeowner doesn't know we don't control interest rates? Are these the same people buying in Cape Verde?


 
No, they are the people who are releasing equity in their homes to buy holiday homes in Sunny Beach Bulgaria. They are the same people that think the "banks won't allow the interest rate to rise"??????


----------



## bren2002

It's complete madness that people don't know who controls rates.  I couldn't believe it when I first heard of this, took me a while to realise that it does exist out there.  

I wonder if any of these people has 'investment properties' in Budapest, economy could collapse theer along with the Govt soon.


----------



## tiger

The figures were house asking/selling price increasing from €500K to €575K in a year (a 15% increase), combined with an increase in mortgage rates from 3.5% to 4.5% (100 basis points).  For an interest only mortgage, monthly payments are now 48% higher, which is the same as if the house had increased to €740K after a year, with no change in interest rates.


----------



## Arthur Daley

Wandering the streets this lunchtime the Evening Herald headline reads 'House boom over'


----------



## whizzbang

bren2002 said:


> It's complete madness that people don't know who controls rates.  I couldn't believe it when I first heard of this, took me a while to realise that it does exist out there.
> 
> I wonder if any of these people has 'investment properties' in Budapest, economy could collapse theer along with the Govt soon.



its ok, remember they are all 'savvy' investors!


----------



## CelloPoint

Arthur Daley said:


> Wandering the streets this lunchtime the Evening Herald headline reads 'House boom over'



Really???


----------



## plaudit

Does anybody know how many people are employed in roadbuilding in this country at the moment? The point I am making is that the rate of new road building has reached its peak and in a few years the motorway / dualcarraigeway programme should be practically complete so there will no longer be guaranteed employment for all these people.


----------



## whizzbang

plaudit said:


> Does anybody know how many people are employed in roadbuilding in this country at the moment? The point I am making is that the rate of new road building has reached its peak and in a few years the motorway / dualcarraigeway programme should be practically complete so there will no longer be guaranteed employment for all these people.



I think in general our road system is far inferior to the rest of the continent's. If the money is there the goverment could spend the next 20 years improving the roads here!

As Gunter (Barry Murphy) once said "Ireland doesn't have a motorway network, it has a series of conincidences"


----------



## Superman

plaudit said:


> Does anybody know how many people are employed in roadbuilding in this country at the moment?


Not a huge number apparently - it is far more machine intensive than labour intensive. - unlike house building for example.


----------



## plaudit

whizzbang - I accept we will probably be able to spend the next 20 years imporving our minor roads, but these will not be on anything like the same scale as the existing projects so employment will decrease in the sector

superman, if you include people selling the machines, servicing them, repairing them, quarrymen quarrying the material ,machine drivers, engineers, architects etc. etc. how many people are involved at the moment does anybody know?

Are there 50000 people involved at the moment?


----------



## bren2002

This is a bit off topic now.  But I think a lot of the road builders are people who have been brought in to the country to build the roads, they then move on to the next job.  Be it in this country or another.  If memory serves a lot of Spanish and Turks seem to be involved.


----------



## whizzbang

plaudit said:


> whizzbang - I accept we will probably be able to spend the next 20 years imporving our minor roads, but these will not be on anything like the same scale as the existing projects so employment will decrease in the sector



true, and I'm not sure we have the funds or inclination to improve those roads. It all does seem to be going into motorways and feeder routes at the   moment.


----------



## exile

plaudit said:


> Does anybody know how many people are employed in roadbuilding in this country at the moment? The point I am making is that the rate of new road building has reached its peak and in a few years the motorway / dualcarraigeway programme should be practically complete so there will no longer be guaranteed employment for all these people.



Could they not build some subways, trams or even mainline trains when they're done with the roads?
Edited to just note that this is completely off-topic!  Has this thread become current sentiment toward Ireland's economic future?


----------



## plaudit

I don't want to go off topic but I believe another sector of the construction industry is going to enter a slowdown at the same time as the housing boom starts to wilt. This will lead to fewer buyers amd a greater availability of labour.


----------



## plaudit

bren2002 said:


> This is a bit off topic now. But I think a lot of the road builders are people who have been brought in to the country to build the roads, they then move on to the next job. Be it in this country or another. If memory serves a lot of Spanish and Turks seem to be involved.


 
And if they all leave then who is going to rent all the houses they have been living in for the last few years?


----------



## Arthur Daley

Arthur Daley said:


> Wandering the streets this lunchtime the Evening Herald headline reads 'House boom over'


Whatever about sentiment on this thread. What about the effect on general sentiment when people read this headline walking down O'Connell st.


----------



## miju

exile said:


> Has this thread become current sentiment toward Ireland's economic future?


 
when you consider construction / property has become a massive proportion of our economy then it's one in the same really


----------



## walk2dewater

Arthur Daley said:


> Whatever about sentiment on this thread. What about the effect on general sentiment when people read this headline walking down O'Connell st.


 
I'm with you Arthur.  In my nearly 3 years back home, the Heralds headline today is a MILESTONE.  Let's open a new thread....


----------



## whathome

Arthur Daley said:


> Whatever about sentiment on this thread. What about the effect on general sentiment when people read this headline walking down O'Connell st.


 
Popped into a Spar at lunchtime - it jumps right out at you from the Herald : "*HOUSE PRICE BOOM OVER*" - massive headline. For anyone following this thread, the Herald makes very interesting reading this evening.


----------



## thewatcher

walk2dewater said:


> I'm with you Arthur. In my nearly 3 years back home, the Heralds headline today is a MILESTONE. Let's open a new thread....


 
It's going to be seen on every streetcorner in the city and junction on the M50,the cat is out of the bag.


----------



## plaudit

Anybody got the article online?


----------



## Debtwish

In case anyone missed it earlier, the text of the "One Small Step for Rates....." article you can find here

[broken link removed]


----------



## delboy159

We are moving into the self fulfilling prophecy side of things now with headlines like that.  Between owners selling up quickly and buyers "getting nervous" the definite slowness of the season will be compounded!


----------



## miju

delboy159 said:


> We are moving into the self fulfilling prophecy ....


 
think long overdue large dose of reality would be a better description _IMHO_


----------



## ivuernis

walk2dewater said:


> I'm with you Arthur. In my nearly 3 years back home, the Heralds headline today is a MILESTONE. Let's open a new thread....


 
First of all I am bearish, always have been, although recently my bearishness has not been as acute as previously (but thats another topic).

However, the current media analysis of late (e.g. Indo, Herald) smacks of opportunism on the part of these publications. We've seen the shoddy research from the Indo's point of view with them lifting quotes or misreading stats from this forum and presenting them as general sentiment or facts. I just think they are jumping the gun on this one right now.


----------



## Remix

I was in the Sony Store at Stephen's Green a little while back. Who did I see checking out the LCD TVs ?  Austin Hughes!

If only I had bumped into him today with my copy of the evening herald under my arm!


----------



## whathome

ivuernis said:


> I just think they are jumping the gun on this one right now.


 
I don't know how many times I've seen huge headlines announcing House Prices Rocketing etc etc over the past 10 years.  Now that the market has weakened at least they are being consistent in their amplification.

I don't think they're jumping the gun at all.


----------



## walk2dewater

ivuernis said:


> First of all I am bearish, always have been, although recently my bearishness has not been as acute as previously (but thats another topic).
> 
> However, the current media analysis of late (e.g. Indo, Herald) smacks of opportunism on the part of these publications. We've seen the shoddy research from the Indo's point of view with them lifting quotes or misreading stats from this forum and presenting them as general sentiment or facts. I just think they are jumping the gun on this one right now.


 
I don’t think so. The whole edifice is held up by the general positive, bullish sentiment towards property prices. Take that away and what’s left? The economics stopped adding up ages ago, I mean look at the farcical “Worth the Investment” articles in the Thursday IT. And for good or for bad, the Heralds headline today is an *absolute corker*.


----------



## 3go

Anyone actually read the Herald article? Would be interested to know what they are basing the story on?


----------



## plaudit

All this with at least 2 more interest rate hikes highly likely.


----------



## soma

plaudit said:


> All this with at least 2 more interest rate hikes highly likely.



..with the next one expected in what, 10 days..?


----------



## ninsaga

plaudit said:


> All this with at least 2 more interest rate hikes highly likely.



.... all what? 4600 posts which are basically saying...

- house price drop
- interest rates going up


----------



## Remix

soma said:


> ..with the next one expected in what, 10 days..?


 
Less - it's Oct 5th.

The interest rate on my "future bargain hunting fund " savings account is set to go up again


----------



## ivuernis

walk2dewater said:


> I don’t think so. The whole edifice is held up by the general positive, bullish sentiment towards property prices. Take that away and what’s left? The economics stopped adding up ages ago, I mean look at the farcical “Worth the Investment” articles in the Thursday IT. And for good or for bad, the Heralds headline today is an *absolute corker*.


 
I haven't read the article from the Herald but I bet the general tone of it is far less dramitic than the headline.


----------



## whathome

ivuernis said:


> I haven't read the article from the Herald but I bet the general tone of it is far less dramitic than the headline.


 
It's not actually - it's quite factual and supports the headline very well.


----------



## walk2dewater

ivuernis said:


> I haven't read the article from the Herald but I bet the general tone of it is far less dramitic than the headline.


 
Read it.  All I can say is it wasn't proof read by a real estate agent spinmeister


----------



## paddyd

I guess the Hearld article is bourne out of the sheer volume of property(panic selling?) that have come on the market for the new property season (Sept 1st), coupled with the inability of any of these houses to sell (only 15% of auctions got a sale).

the outcome is naturally going to be "HOUSE BOOM OVER" articles. This time however, they could be right.
just remember to distinguish the 'boom over' talk from the 'PRICE DROP' talk. Prices may not fall, they might just stop rising

wonder if the Economist has a 'told you so' article this month, after mis-firing for 5 years!!!!


----------



## Arthur Daley

The economist and David McWilliams


----------



## ivuernis

walk2dewater said:


> Read it. All I can say is it wasn't proof read by a real estate agent spinmeister


 
I'll try to pick it up on the way home later.


----------



## walk2dewater

paddyd said:


> just remember to distinguish the 'boom over' talk from the 'PRICE DROP' talk.


 
There is no difference 

Prices are going up because prices are going up and everyone believes prices will continue to go up ad infinitum. The economics of buying stack up ONLY if you believe prices are going up. When prices stop going up there will no reason to buy anymore.


----------



## Calina

walk2dewater said:


> When prices stop going up there will no reason to buy anymore.



Strictly speaking, that's only true if your motivation in buying is to make money. 

Me, I'm not interested in losing money, or bankrupting myself, but neither am I interested in making a killing. If prices are stable or sliding somewhat, then other motivational factors such as wanting to hang my pictures on the wall, not wanting to live with fruitcake flatmates, being able to choose my own furniture etc start to take on more importance than "how rich will this make me". 

What I suspect will happen is instead of hearing the "You have to get your foot on the ladder" platitude, people will be hearing "you'd be mad to buy now, sure property is on the way down"...line

The thing is, people have not really been using their intelligence in considering whether they want to buy a property or not. Me, if I come across a nice three bedroomed house that I can afford and which suits my needs, then I should buy it because I can fit a piano in it, or it has a garden that I can work on, or it's 10 minutes from work or whatever, and I plan to stay in it long term, then yes, I have a reason to buy it. Despite best efforts, not all houses are identical just yet. 

The problem is, many people's reason to buy property in the past four or five years has been less utilitarian and more "making a killing". The utility reasons will continue to exist, as do issues surrounding the rental market in Ireland which makes it attractive not to rent long term.


----------



## bearishbull

Calina said:


> Strictly speaking, that's only true if your motivation in buying is to make money.
> 
> Me, I'm not interested in losing money, or bankrupting myself, but neither am I interested in making a killing. If prices are stable or sliding somewhat, then other motivational factors such as wanting to hang my pictures on the wall, not wanting to live with fruitcake flatmates, being able to choose my own furniture etc start to take on more importance than "how rich will this make me".
> 
> What I suspect will happen is instead of hearing the "You have to get your foot on the ladder" platitude, people will be hearing "you'd be mad to buy now, sure property is on the way down"...line
> 
> The thing is, people have not really been using their intelligence in considering whether they want to buy a property or not. Me, if I come across a nice three bedroomed house that I can afford and which suits my needs, then I should buy it because I can fit a piano in it, or it has a garden that I can work on, or it's 10 minutes from work or whatever, and I plan to stay in it long term, then yes, I have a reason to buy it. Despite best efforts, not all houses are identical just yet.
> 
> The problem is, many people's reason to buy property in the past four or five years has been less utilitarian and more "making a killing". The utility reasons will continue to exist, as do issues surrounding the rental market in Ireland which makes it attractive not to rent long term.


Investors are/were buying approx 40% of properties every year, when they see prices not rising and they will have to subsidise their "investments" from now on without the capital appreciation that every recent investor seems to be relying on, they will head for the exits and the market will fall lower and lower.


----------



## darex

ivuernis said:


> I'll try to pick it up on the way home later.



Think you maybe too late. The housing interests saw the headline and panicked. They have organised a kidnap of a banker with a one million euro ransom and the heralds later editions have had to drop the original headline (it was on the front page wasn't it?)


----------



## redo

bearishbull said:


> Investors are/were buying approx 40% of properties every year, when they see prices not rising and they will have to subsidise their "investments" from now on without the capital appreciation that every recent investor seems to be relying on, they will head for the exits and the market will fall lower and lower.


Add the PD's idea of abolishing stamp duty to the mix, this season is going to be very quiet.

EDIT:
The FTB's will pause for thought.


----------



## soma

darex said:


> the heralds later editions have had to drop the original headline (it was on the front page wasn't it?)



Anyone else starting to think that the housing market is in league with the devil..? *lol*


----------



## Calina

bearishbull said:


> Investors are/were buying approx 40% of properties every year, when they see prices not rising and they will have to subsidise their "investments" from now on without the capital appreciation that every recent investor seems to be relying on, they will head for the exits and the market will fall lower and lower.



Sure it will. It does also still mean that people considering buying houses to live in will still have considerations. They may wait but their reasoning will not be solely based on financial loss/profit considerations.


----------



## phoenix_n

walk2dewater said:


> When prices stop going up there will no reason to buy anymore.


 
Exactly. Greed replaced by realism.


----------



## Calina

darex said:


> Think you maybe too late. The housing interests saw the headline and panicked. They have organised a kidnap of a banker with a one million euro ransom and the heralds later editions have had to drop the original headline (it was on the front page wasn't it?)



article will probably still be in it somewhere though.


----------



## soma

Calina said:


> article will probably still be in it somewhere though.



Nowhere near as powerful as on the front page IMHO, with all the associated mini-posters that the herald puts around town when it's on sale.


----------



## paddyd

walk2dewater said:


> There is no difference
> 
> Prices are going up because prices are going up and everyone believes prices will continue to go up ad infinitum. The economics of buying stack up ONLY if you believe prices are going up. When prices stop going up there will no reason to buy anymore.


 
somebody put it very well here yesterday when they said we are seeing "a deceleration in the rate of acceleration of house prices"

the only price drops have been mere fat-trimming on the high-end houses. I've yet to see evidence of a price drop on a 3-bed semi. I still think houses will continue to rise at least in line with inflation. So the boom is over, but its not a price drop.


----------



## bearishbull

paddyd said:


> somebody put it very well here yesterday when they said we are seeing "a deceleration in the rate of acceleration of house prices"
> 
> the only price drops have been mere fat-trimming on the high-end houses. I've yet to see evidence of a price drop on a 3-bed semi. I still think houses will continue to rise at least in line with inflation. So the boom is over, but its not a price drop.


Even banks are saying prices will slow to 3% next year , that below inflation and will be a drop in real terms.


----------



## Remix

If the headline is right then what a feeble, fragile and inflated boom it's turning out to be.

Interest rates are still only at 3% !!

It's like in a cartoon where some nasty little creature casts a shadow making him appear much bigger and stronger than he actually is !


----------



## phoenix_n

paddyd said:


> So the boom is over, but its not a price drop.


 
Thats where you are wrong my friend. 

If everyone was sitting in their own houses then whatever price their house is now will not bother them. But there is so much money tied in investment properties that without capital appreciation they are now in possessoin of a loss-making asset. And when someone wants to sell and no-one wants to buy the only way to entice that buyer is by dropping their price. And those that have made the most of the property market are the ones that can drop their prices the most first thus increasing pressure on 'late comers' to the market.
IMO. 

(phoenix_n : first person to have called a 'crash'.)


----------



## walk2dewater

Calina said:


> Sure it will. It does also still mean that people considering buying houses to live in will still have considerations. They may wait but their reasoning will not be solely based on financial loss/profit considerations.


 
Prices are set on the margin.  The future is what's happening in the States.  So here's what we have to look forward to:  An ever increasing horde of fearful sellers meeting an ever shrinking pool of skittish buyers.  Whaddya thinks gonna happen?


----------



## gearoidmm

zac said:


> [FONT=Arial, Verdana, Arial]*Dublin property prices falling by up to 20 per cent*[/FONT]
> 
> [FONT=Verdana, Arial]NICK WEBB [/FONT]
> 
> [FONT=Verdana, Arial][/FONT]



Favorite part about this article was the quote at the end from the DNG economist saying that house prices had gone up by 2.4% in Q3 2006.  Yet again, the ridiculous statistical analysis used by the estate agents being trotted out as the real deal.  DNG, like SFG, get their in-house agents to go around to a bunch of houses that they sold years ago and estimate how much they would go for today.  Not sales data, mortgage data or CSO data but "what do you think we'd get for that one Jim?"

Yet this is reported as fact in the MSM.


----------



## murray

"the only price drops have been mere fat-trimming on the high-end houses. I've yet to see evidence of a price drop on a 3-bed semi. I still think houses will continue to rise at least in line with inflation. So the boom is over, but its not a price drop." 

Paddy d - This is just untrue - Prices already dropping in West Dublin especially - *3 bed semis* in Lucan,Blanch area were 400-420 before summer , 370 -381 today. Over 100 three bed properties in Lucan alone..................


----------



## walk2dewater

The BS of the real estate spinmeisters is coming apart quicker than I imagined. Batten down the hatches!


----------



## Guest126

phoenix_n said:


> Thats where you are wrong my friend.
> 
> 
> (phoenix_n : first person to have called a 'crash'.)


 
Phoenix_n: the only person that tipped an apartment (I can't remember where in Dublin) with an asking price of about €450k would be selling for €170k before Christmas.


----------



## baby_tooth

phoenix_n said:


> Thats where you are wrong my friend.
> 
> If everyone was sitting in their own houses then whatever price their house is now will not bother them. But there is so much money tied in investment properties that without capital appreciation they are now in possessoin of a loss-making asset. And when someone wants to sell and no-one wants to buy the only way to entice that buyer is by dropping their price. And those that have made the most of the property market are the ones that can drop their prices the most first thus increasing pressure on 'late comers' to the market.
> IMO.
> 
> (phoenix_n : first person to have called a 'crash'.)


 

no, your way to early on this.

markets don't plummet, they yo-yo up or down to a new plateau..the less liquid, the longer it takes.

not a swallow does a summer make...time left for fools still to be aprted from their money...

the mentallity still exists that property doesn't drop, not in Ireland.


----------



## walk2dewater

baby_tooth said:


> markets don't plummet, they yo-yo up or down to a new plateau..the less liquid, the longer it takes.
> 
> not a swallow does a summer make...time left for fools still to be aprted from their money...
> .


Absolutely true. But the jagged 'slope of hope' starts with one almightly down-draft.



baby_tooth said:


> the mentallity still exists that property doesn't drop, not in Ireland.


and this mentality has just got it's first violent hammering courtesy of todays Herald


----------



## Afuera

Calina said:


> Me, if I come across a nice three bedroomed house that I can afford and which suits my needs, then I should buy it because I can fit a piano in it, or it has a garden that I can work on, or it's 10 minutes from work or whatever, and I plan to stay in it long term, then yes, I have a reason to buy it.



But, what happens if you come across 4 or 5 of these houses that match your criteria? Would you be willing to jump in and buy if the asking price kept getting chipped away on some of these properties?

Would it annoy you to find out later that a new neighbour buys the same house for a good bit less than you?

Michael McDowell stating that he is going to reform Stamp Duty has muddied things further. With capital appreciation out of the picture it might make it worth your while to wait until next December's budget before commiting.

Throw rising interest rates, negative press about the property market into the bag and it turns into a horrible mix. There are more factors in place now to stop FTBs than there are to actually encourage them to buy!


----------



## Calina

Afuera said:


> But, what happens if you come across 4 or 5 of these houses that match your criteria? Would you be willing to jump in and buy if the asking price kept getting chipped away on some of these properties?
> 
> Would it annoy you to find out later that a new neighbour buys the same house for a good bit less than you?
> 
> Michael McDowell stating that he is going to reform Stamp Duty has muddied things further. With capital appreciation out of the picture it might make it worth your while to wait until next December's budget before commiting.
> 
> Throw rising interest rates, negative press about the property market into the bag and it turns into a horrible mix. There are more factors in place now to stop FTBs than there are to actually encourage them to buy!



Well I won't be buying just yet - my point is that you cannot and should not assume that everyone has the same motivation in buying and that therefore everyone is affected to the same extent by a Herald headline. People will continue buying in the short to medium term for whatever reason - but it is inherently naive to assume that they will stop buying altogether just because capital appreciation is off the table. 

I must confess that I'm disappointed by debate in this respect. The "It's all over" attitude is not much less simplistic than the "It'll keep on rising because it hasn't fallen yet" attitude of the bull brigade. 

Personally, no it wouldn't annoy me if I found out that someone had bought for less than I had - this is life - triumphalism is not something I buy into. What I do - and have constantly - object to is the idea that I should buy some property inappropriate to my needs just in case I can't afford something down the line. If I am buying appropriate to my needs...then that's different. 

if, on the other hand, I do have a choice of houses to buy - then the sellers will have to compete for my attention. That's okay too.


----------



## Firefly

Spot on Afuera - no reason for a FTB to buy right now...hold the horses until Budget me thinks..
F


----------



## whathome

paddyd said:


> I've yet to see evidence of a price drop on a 3-bed semi.


 
....you can't say that anymore:

Old price €400,000


New price €390,000
www.daft.ie/118303 

There have been numerous examples shown on this thread previously.


----------



## CelloPoint

baby_tooth said:


> no, your way to early on this.
> 
> markets don't plummet, they yo-yo up or down to a new plateau..the less liquid, the longer it takes.


Normal markets yo-yo, bubble markets don't - they crash. Housing bubbles have occured all over the world on many an occasion. They crash literally over night - never underestimate the speed of sentiment change.



baby_tooth said:


> not a swallow does a summer make...time left for fools still to be aprted from their money...


If you had of said this to me last June or July, I would have had respect for you. The fact that there is a headline on today's Herald (and negative articles in last weekend's Sindo) shows that it is too late. The plebs are always last to "read all about it".



baby_tooth said:


> the mentallity still exists that property doesn't drop, not in Ireland.


People are indeed stupid, but they're not that stupid (i.e. if people were given even half the facts discussed here on AAM, I'd say nobody would buy in 2006). People are perhaps deceived - and it's getting harder and harder to keep up the deception.


----------



## Afuera

Calina said:


> Well I won't be buying just yet - my point is that you cannot and should not assume that everyone has the same motivation in buying and that therefore everyone is affected to the same extent by a Herald headline. People will continue buying in the short to medium term for whatever reason - but it is inherently naive to assume that they will stop buying altogether just because capital appreciation is off the table.



I agree with you that there will always be people in the need of a property regardless of the circumstances. Not everyone will stop buying altogether but I don't see how there will remain that strong a demand over the near-to-medium term at least.

In the last few years the market has been held up almost entirely due to the belief in rising prices. Investors were willing to fund loss making investments because of capital appreciation. FTBs were jumping into anything they could afford to get a foot on the ladder before their savings got whittled down to nothing. Trader-uppers were holding onto previous properties as a "pension", distorting the true demand for housing further.

A public acknowledgment that this is not going to be happening into the future is going to remove a huge amount of the demand.


----------



## Duplex

John Kenneth Galbraith  "A Short History of Financial Euphoria":

_



			"Those who had been riding the upward wave decide now is the time to get out. Those who thought the increase would be forever find their illusion destroyed abruptly, and they, also, respond to the newly revealed reality by selling or trying to sell. And thus the rule, supported by the experience of centuries: the speculative episode always ends not with a whimper but with a bang."
		
Click to expand...

_ 
Galbraith mentions two types of seller at a market top, in the quote. 

The first, those who have been _'riding the upward wave'_ i.e. the smart money.  The second _'Those who who thought that the increase would be forever'    _I think we are seeing the smart money leave now (see auction clearance rates).  The second group will take longer to absorb and digest that the speculative episode is over.    Then the apportioning of blame.


----------



## paddyd

whathome said:


> ....you can't say that anymore:
> 
> Old price €400,000
> 
> 
> New price €390,000
> www.daft.ie/118303
> 
> There have been numerous examples shown on this thread previously.


 
lads, I stand corrected 

i best get home to my 3-bed semi and start panicking ...

a lot of it relates to area (spur of the moment personal opinion). Lucan has no real public transport access to town (i notice someone mentioned 100 houses in lucan reduced ...). these areas will alwasy be the first ones to start cutting price, versus say a 3 bed in Clonsilla, or even donabate. I read elsewhere on the board today about Finglas also having the same trouble.
I looked in lucan when we bought 3 years ago, and couldn't believe the place was so badly serviced.


----------



## walk2dewater

Calina said:


> People will continue buying in the short to medium term for whatever reason - but it is inherently naive to assume that they will stop buying altogether just because capital appreciation is off the table.


 
of course their will ALWAYS be buyers and sellers, how can a transaction go through without both sides present? And those buyers and sellers will always have a multitude of personal reasons for their actions. A market is made up of all sorts of people with all sorts of motivations for doing what they do.

But prices are *set at the margin*, it is the _marginal_ transaction that sets prices, the very next transaction happening right now. This is absolutely key to how prices are set, and I believe people simply don’t understand this.

Ergo my view: Marginal demand for buying property is driven overwhelming by postive sentiment about future prices, NOT by yields, NOT by the vast majority people who are non-participants, and NOT by your need to fit a piano, and NOT by my need to have a pool table. MOST transactions going through right now this very instant are happening because…. Drum rolll,,, ta-da… “prices keep going up”. Thats it, thats the nub of issue, that's why most transactions are happening.  Most marginal demand is because property because "prices are going up".  And that Herald headline/story is putting a stake through the heart of the very reason for the existence of those transactions.

When you take out THOSE "prices only go up" transactions, what's left? Enough remaining demand to mop up 100k units a year? Enough remaining demand to meet the wall of sellers coming down the pipe?


----------



## Calina

You're missing the point. You said there was no reason to buy. I pointed out that there were always reasons to buy and not all of them were financial.

Your last post is irrelevant in that respect because what is not at issue between us is the likely direction of property prices. Read back through my posts and you will know this. The number of buyers will plummet, but it won't reach zero. And it will not happen overnight.


----------



## walk2dewater

Calina said:


> The number of buyers will plummet, but it won't reach zero. And it will not happen overnight.


 
agreed!


----------



## CelloPoint

This sums up modern Ireland very well:

http://www.askaboutmoney.com/showpost.php?p=283368&postcount=24

Made me laugh out loud from behind my computer...


----------



## whathome

paddyd said:


> lads, I stand corrected
> 
> these areas will alwasy be the first ones to start cutting price, versus say a 3 bed in Clonsilla, or even donabate.


 
Clonsilla - what about this one ... :

New price €360,000
[broken link removed]=

75 Ferndale (2nd in the list) - Old price €370,000


----------



## blindjustice

soma said:


> Anyone else starting to think that the housing market is in league with the devil..? *lol*





I can prove this. I can back it up with irrefutable evidence .......but...........
I would have to kill you


----------



## baby_tooth

CelloPoint said:


> Normal markets yo-yo, bubble markets don't - they crash. Housing bubbles have occured all over the world on many an occasion. They crash literally over night - never underestimate the speed of sentiment change.
> 
> 
> If you had of said this to me last June or July, I would have had respect for you. The fact that there is a headline on today's Herald (and negative articles in last weekend's Sindo) shows that it is too late. The plebs are always last to "read all about it".
> 
> 
> People are indeed stupid, but they're not that stupid (i.e. if people were given even half the facts discussed here on AAM, I'd say nobody would buy in 2006). People are perhaps deceived - and it's getting harder and harder to keep up the deception.


 

ppl will buy when they think the market has bottomed out...

problem is finding when the market bottoms out.

eg:
I want to buy something cheap, but what value do i consider cheap, say 250k, but someone else consdiers it cheap at 252k...and buy before me, i get worried and jump back in thinking i have saved, say 50k if it has fallen from 300k...other follow suit, but as market floods, others see prices drop even further south.

this is especially the case in illquid mrkts.

take oil for example, heading south of 60 a barrell....but lots locked in future prices at over 60 a barrell...as they thought prices wouldn't drop.

exact same theory at play here...

perception of value and balls to take a punt on it, how else do ppl make money on a dropping mrkt...going short...when do you buy back..

and if you can't go short, you jump back in at time x...which can be at the bottom, or only have where there.!


----------



## Marie

Surely a crucial aspect of the current (red-hot!) property situation is that houses have long ceased to be regarded as homes.  Some posters seem to think now that the market is collapsing the 'old values' will reassert.  Unfortunately there is no possibility of a return to pre-speculation innocence. The spiralling-down will be as dizzying as the spiralling-up. 

In my place of work today (I'm in England) a colleague mentioned her son (in his early 20's, fresh from university business studies followed by a years world-travel) has just moved to Dublin to take up his first job (he proposes training in accountancy).  She wanted my advice as a Dubliner.  Son staying in B&B for past few weeks as "he is not prepared to live out in the sticks with a long commute to work" and "will hold out in B&B as long as necessary as he can't afford the extortionate rents being asked in central Dublin".  I enquired what he considered an "extortionate" rent. That turns out to be


----------



## Marie

sorry - fingerslip!       "Extortionate" rent is considered to be Euro400 per month for a house-share, for which this intelligent welltravelled young man expects a one-bed apartment.  Just thought I would throw this anecdote into the pot.  There are - as Calina says - many other contributory factors to house-prices and rental prices.  As Duplex informs us, those factors are global and Ireland is now a very very 'porous' and open economy.


----------



## Duplex

Marie said:


> sorry - fingerslip! "Extortionate" rent is considered to be Euro400 per month for a house-share, for which this intelligent welltravelled young man expects a one-bed apartment. Just thought I would throw this anecdote into the pot. There are - as Calina says - many other contributory factors to house-prices and rental prices. As Duplex informs us, those factors are global and Ireland is now a very very 'porous' and open economy.


 

He should have moved to Frankfurt


----------



## Maine

The Herald story is a massive blow to "property interests" and to amateur landlords. This thread's petrol tank just keeps getting refilled. IMO the smart money is long gone.

Just to keep the irish economy ticking along takes minimum of 500 million in new mortgage borrowing every week. Investors having been borrowing north of 200 million a week as part of above. Slowdown is not an option.

IMO we are along way from cheap - cheap will not arrive until 2010. The Japanese were equally as feverish about property yet when their bubble burst 0% interest rates could not entice consumers to buy property at 50% below peak nor could it save a number of their big banks folding. 

There is loads of choice on homes - we have never had more ...... even in good areas where every back garden has added a new house.


----------



## miju

paddyd said:


> lads, I stand corrected
> 
> i best get home to my 3-bed semi and start panicking ...
> 
> a lot of it relates to area (spur of the moment personal opinion). Lucan has no real public transport access to town (i notice someone mentioned 100 houses in lucan reduced ...). these areas will alwasy be the first ones to start cutting price, versus say a 3 bed in Clonsilla, or even donabate. I read elsewhere on the board today about Finglas also having the same trouble.
> I looked in lucan when we bought 3 years ago, and couldn't believe the place was so badly serviced.



i love reading the sterotypical head in sand replies like this. he says i dont see any evidence of price drops so it aint happening , then when given evidence he rationlises it with the above LOL

that would have been me talking about finglas today and finglas is an *INCREDIBLY* well serviced and established area , close to m50 , 2 (soon to be 3) large shopping centres , all required amenties within 5-10 mins walk , about 20mins on a regular bus into town with QBC's to boot , PERFECT place to buy a place in one of the new estates that have been springing up but it doesnt seem like people want to buy the 2 properties i mentioned




baby_tooth said:


> eg:
> I want to buy something cheap, but what value do i consider cheap, say 250k, but someone else consdiers it cheap at 252k...and buy before me, i get worried and jump back in thinking i have saved, say 50k if it has fallen from 300k...other follow suit, but as market floods, others see prices drop even further south.



indeed will be interesting to see the severity of the first dead cat bounce whenever it materialises


----------



## ncs

There may not _be _a dead cat bounce if circumstances are too stretched by interest rates, fuel prices _etc_.


----------



## miju

well fuel prices i dont think will affect things greatly given that a weakening US economy has already reduced demand for oil to the extent it's dropped below €60 a barrell , which is great on the forecourts i may add my local tesco is €1.02 a litre happy days


----------



## bearishbull

miju said:


> well fuel prices i dont think will affect things greatly given that a weakening US economy has already reduced demand for oil to the extent it's dropped below €60 a barrell , which is great on the forecourts i may add my local tesco is €1.02 a litre happy days


Yeah but esb and gas will be going up substantially as are most expenses for young homeowning couples in ireland today.


----------



## Marie

Duplex said:


> He should have moved to Frankfurt


 
Exactly!  A classy apartment like this for Euro380 per month in Frankfurt or share an anonymous box on a mega-estate with 3 strangers at the end of a 2 hours-each-way-each-day commute for Euro 800 p.m.  People are getting more and more clued-up and expectations are changing.

The wider picture is that there is also a new wariness and weariness around resources both personal and natural.  There is an embryonic but fast-growing attitude which is utilitarian and conserving, values balance and moderation........completely at odds with the philosophy of acquisition, individualisation and conspicuous consumption which reached a peak in the year 2000 - at the millenium.  Historically and anthropologically millenia have been moments of dramatic change.  It may be we are observing part of such a process.


----------



## Doris

The Irish became rich by building too many apartments without provisions for the elderly or for children. No one who bought them as a BTL thinks they will be living in the things in thier 80's. No one thinks that their grandchildren will never have a garden or a playground, and that four children and two adults will share these 550sqft hell holes in 'exclusive developments for young professionals.'  Buildings last longer than investments.  These monuments of greed will haunt us long into the future.  Let's face it, todays apartments are tomorrows flats.


----------



## tententwenty

Marie said:


> There is an embryonic but fast-growing attitude which is utilitarian and conserving, values balance and moderation


Well at least until the market bottoms out, anyway...


----------



## walk2dewater

Marie said:


> Exactly! A classy apartment like this for Euro380 per month in Frankfurt or share an anonymous box on a mega-estate with 3 strangers at the end of a 2 hours-each-way-each-day commute for Euro 800 p.m. People are getting more and more clued-up and expectations are changing.
> 
> The wider picture is that there is also a new wariness and weariness around resources both personal and natural. There is an embryonic but fast-growing attitude which is utilitarian and conserving, values balance and moderation........completely at odds with the philosophy of acquisition, individualisation and conspicuous consumption which reached a peak in the year 2000 - at the millenium. Historically and anthropologically millenia have been moments of dramatic change. It may be we are observing part of such a process.


 
A highly respected economics professor once told me that if you learned only one thing about the functioning of the macro economy is was this:  Everything is cyclical.

As sure as night follows day, this property boom will encounter its bust.  And this is one massive boom.


----------



## bearishbull

Doris said:


> The Irish became rich by building too many apartments without provisions for the elderly or for children. No one who bought them as a BTL thinks they will be living in the things in thier 80's. No one thinks that their grandchildren will never have a garden or a playground, and that four children and two adults will share these 550sqft hell holes in 'exclusive developments for young professionals.' Buildings last longer than investments. These monuments of greed will haunt us long into the future. Let's face it, todays apartments are tomorrows flats.


Look there will be always young and middle aged people to fill these apartments , theres plenty of room in this country for everyone who wants a house with a garden etc at a reasonable price to have one. There has to be higher densities in cities and high density is'nt necessarily bad.


----------



## Doris

Dublin does benefit from higher density, the problem isn't the density or indeed that perennial red herring high -rise/ height, it is the provision of useful Public space.  The Docklands is a classic example. While the buildings look new and not everyone has moved in, things are great.  Workers in the offices during the day, a lively night life for apartment dwellers in the evening.  But that's not how I see it panning out.   Young couples will have one child and then two, Someone will move a family or ten students in to get a better rent, this idealised separate existence of the young professionals, is as big a myth as the number of true professionals.  The social glue of considerate behaviour isn't strong enough in Ireland.  The modern living experiment where the young and beautiful trip the light fantastic will be eaten away by low-grade-continuous-anti-social behaviour.  The nouveau riche have a strong sense of entitlement.  "I paid half a million euros for this apartment, I'll hang my drying on the balcony/play awful music with the windows open/ park where I want."


----------



## ivuernis

Marie said:


> Exactly! A classy apartment like this for Euro380 per month in Frankfurt


 
Are we looking at the same thing? It's an unfurnished one-bed studio flat, not a classy apartment.


----------



## paddyd

miju said:


> i love reading the sterotypical head in sand replies like this. he says i dont see any evidence of price drops so it aint happening , then when given evidence he rationlises it with the above LOL


 
bit harsh. You know nothing about me. Its called an opinion (we're allowed then here you know ). believe me, its not head in the sand, far from it. I'm an investor, and am still feeling more than comfortable; but then again I'm not buying right now; haven't for the past 6months, and not advising it, until we see what happens to the for few months of the new property season.

You are another one of those idle commentators thats just hoping it all goes t*ts up; the 'i told you so' gang. You've waited 6 years, I guess its time to give you some press.


----------



## paddyd

A lot will hinge on the number of new hse STARTS (rather than completions) next year.
If it drops, it suggests the builders are controlling a soft landing (why build houses on valuable land if they will be harder to sell).
If the figure increases, then things could really become a problem.


----------



## Neffa

paddyd said:


> bit harsh. You know nothing about me. Its called an opinion (we're allowed then here you know ). believe me, its not head in the sand, far from it. I'm an investor, and am still feeling more than comfortable; but then again I'm not buying right now; haven't for the past 6months, and not advising it, until we see what happens to the for few months of the new property season.


 
Would you mind sharing with us at what levels you would consider buying again in Ireland - e.g. yield at purchase / %age of monthly costs [interest, expenses etc.] which the rent will have to cover?


----------



## Doris

There has been a reduction in the number of bookings in major crane higher firms.  There has also been an increase in working hours on sites. Foreign labourers are being held onto because of good performance and skill while home grown are still pitching for better deals. Builders have the chance to really speed things up  if they want to.


----------



## whizzbang

paddyd said:


> A lot will hinge on the number of new hse STARTS (rather than completions) next year.
> If it drops, it suggests the builders are controlling a soft landing (why build houses on valuable land if they will be harder to sell).
> If the figure increases, then things could really become a problem.



I had a look for this figure yesterday but couldn't find a regular up to date source of them? Any ideas? Couldn't find them on cso.ie or anything.


----------



## tententwenty

paddyd said:


> A lot will hinge on the number of new hse STARTS (rather than completions) next year.
> If it drops, it suggests the builders are controlling a soft landing (why build houses on valuable land if they will be harder to sell).
> If the figure increases, then things could really become a problem.


See this would have been a wise strategy for people to heed in 2002. We're far, far beyond that now, I'm afraid. May as well get out the popcorn at this stage. Nyeh.


----------



## paddyd

Neffa said:


> Would you mind sharing with us at what levels you would consider buying again in Ireland - e.g. yield at purchase / %age of monthly costs [interest, expenses etc.] which the rent will have to cover?


I'm not sure I would!
It now takes a BIG wad of cash to pay the top off the cost of an investment property (maybe something like 1-200k), and in effect force the figures to add up.

the problem is that the investment market has been surviving on capital appreciation to supplement rent to cover mortgage repayment costs (interest only mortgages normally).
so a 350k 2-bed apartment costs maybe 1800 to service the mortgage p.m. and the rental income is about 1400 p.m maybe. Thats 17k per year, or about 1% rental yield. Most countries on earth can beat that yield (even Budapest is 6% right now). Now do the same for a guy who invested in a 500k apartment in the past year, and the problem is amplified. Ony the investors who were in before mid-2005 can probably feel confortable right about now, as they still have a healthy buffer of capital appreciation, and are even protected from a drop.

Now that the interest rates have rose, it changes the interest only investor mortgages completely; coupled with the now obvious downward trend in the market, the investors can no longer rely on appreciation alone to justify it, and the amateur investor cashes out. The problem is that perhaps everyone has the same idea


----------



## CelloPoint

paddyd said:


> You are another one of those idle commentators thats just hoping it all goes t*ts up; the 'i told you so' gang. You've waited 6 years, I guess its time to give you some press.



Well he only has to be right once - you have to be right _all_ the time! But that's the risk that an investor must take on board I guess.


----------



## JayDub

whathome said:


> ....you can't say that anymore:
> 
> Old price €400,000
> 
> 
> New price €390,000
> www.daft.ie/118303
> 
> There have been numerous examples shown on this thread previously.


 
The above house is now quoted at €381,000...


----------



## StoppedClock

JayDub said:


> The above house is now quoted at €381,000...


 
http://www.daft.ie/searchsale.daft?id=118303&search=1

How much would a des res like that rent for? 

IMO the utility value of that property cannot be more than 95K. Usually I think of the bubble in purely macro economic terms rather than focussing on individual properties but out of interest can I invite you all to take a look at that property: What would you pay for it assuming prices were going to rise in line with inflation and interest was going to be say 1.5% in real terms, i.e. you are buying the house to live in with no potential for capital gain or loss.


----------



## redo

JayDub said:


> The above house is now quoted at €381,000...


Nearly every 3 bed semi in lucan is going to gravitate down towards 381k.  Now some "canny" vendor is going to have to make his property sell by making it stand out.  A lick of paint won't do it, a new attic conversion, nope.  Decking out the back, nahh.  Perhaps a new kitchen.  However a tried a trusted way of getting your property to stand out, is with its price.  These houses will have to go down to at least 350k.


----------



## plaudit

paddyd said:


> A lot will hinge on the number of new hse STARTS (rather than completions) next year.
> If it drops, it suggests the builders are controlling a soft landing (why build houses on valuable land if they will be harder to sell).
> If the figure increases, then things could really become a problem.


 
If the new starts drops we are in trouble too. This will lead to a recession in the building industry. There will be too many workers so they will start cutting their labour rates, so prices will be eroded. The immigrants will arrive with no work available so they will have to leave again.


----------



## Remix

plaudit said:


> If the new starts drops we are in trouble too. This will lead to a recession in the building industry. There will be too many workers so they will start cutting their labour rates, so prices will be eroded. The immigrants will arrive with no work available so they will have to leave again.


 
It's not just construction immigrants that might be heading home 



> The Irish Independent also reports that the 400 Polish workers at Dell's Limerick factory will be facilitated if they want to relocate back to the company's €200m new plant in Lodz, which is expected to open at the end of this year.


 
finfacts


----------



## Art

paddyd said:


> so a 350k 2-bed apartment costs maybe 1800 to service the mortgage p.m. and the rental income is about 1400 p.m maybe. Thats 17k per year, or about 1% rental yield.


 
Don't know where you are getting the 1% from. Looks a lot closer to 5% to me.


----------



## baby_tooth

paddyd said:


> A lot will hinge on the number of new hse STARTS (rather than completions) next year.
> If it drops, it suggests the builders are controlling a soft landing (why build houses on valuable land if they will be harder to sell).
> If the figure increases, then things could really become a problem.


 

the land is only of value if the value can be realised.

If the builder has the land but ppl don't want houses its not much use to him is it?


----------



## Duplex

plaudit said:


> If the new starts drops we are in trouble too. This will lead to a recession in the building industry. There will be too many workers so they will start cutting their labour rates, so prices will be eroded. The immigrants will arrive with no work available so they will have to leave again.


 

The extent of the domino effect will be crucial.  The first domino is  inflation beating house price appreciation, if that falls I'm afraid that we are likely to see a knock on to building, retail, leisure, and financial services (the parts of the economy that have provided growth over the past few years).  When these sectors get squeezed guest workers will leave these shores, resulting in another tranche of housing supply coming to the market.  More worryingly, this scenario is likely to pan out over the first couple of years of a global slowdown.  Pretty grim I'm afraid.


----------



## random2006

baby_tooth said:


> the land is only of value if the value can be realised.
> 
> If the builder has the land but ppl don't want houses its not much use to him is it?



The builder has two options - sit on the land until the market levels out or build and sell asap. 
If the builder paid a lot of money for the land they may want to build and try to sell on the way down to at least cover costs rather than sit on a decreasing asset, not knowing when the market will level out and how much less the land will be worth then. 
Also if they are short of cash, waiting may not be an option.
R


----------



## plaudit

How long can a builder sit on a half finished estate?


----------



## CelloPoint

plaudit said:


> How long can a builder sit on a half finished estate?



As long as he can call up his local councillor and arrange a transfer in the name of "affordable housing", he'll be grand!


----------



## Duplex

Builders make money by building if they are not building they are not making money, simple (well I think so  )


----------



## JayDub

plaudit said:


> The immigrants will arrive with no work available so they will have to leave again.


 
Once the housing market cools down I expect to see a couple thousand immigrant construction workers hop across to the pond to fill the reported 33,500 new construction jobs that will be created when constuction for the 2012 London Olympics begins. There's another couple thousand rented accomodations back on the market.

"Which jobs will the Olympics create?
It’s estimated that preparations for the Olympics will create 150,000 jobs over the next seven years; 12,000 permanent jobs will be needed to service the site and its legacy afterwards."


http://www.learndirect-advice.co.uk/featured/olym/


----------



## bren2002

StoppedClock said:


> http://www.daft.ie/searchsale.daft?id=118303&search=1
> 
> How much would a des res like that rent for?
> 
> IMO the utility value of that property cannot be more than 95K. Usually I think of the bubble in purely macro economic terms rather than focussing on individual properties but out of interest can I invite you all to take a look at that property: What would you pay for it assuming prices were going to rise in line with inflation and interest was going to be say 1.5% in real terms, i.e. you are buying the house to live in with no potential for capital gain or loss.



I'd probably go 150K.  Considering size and (most) importantly location.


----------



## redo

bren2002 said:


> I'd probably go 150K.  Considering size and (most) importantly location.


Proximity to Lucan village usually commanded a premium.  Now, with recent traffic problems, I think people are starting to avoid having to commute through the village.  I've heard some residents in Laraghcon complain about an hours drive just to get through the village.


----------



## paddyd

Art said:


> Don't know where you are getting the 1% from. Looks a lot closer to 5% to me.


 
sorry, the maths were wrong, but the example is maybe a bad one! (Also remember that you have to pay rent tax, bills rates and what not. The net rental take is about 1-2% of hse value.)
These examples only apply to guys buying investment property right now. Only a portion of the hse market is FTB's, so there are a lot of new investors about. If you own your rental property for 5 or 10 years, then the figures don't apply as much, as your LoanToValue is maybe 20%!

Heres the article i was trying to find last night that shows examples from a Dublin stockbroker (guess who), showing yield of 1-2%.

well worth a read for any new or intending investor
http://www.finfacts.com/irelandbusinessnews/publish/article_10005356.shtml

The main stat that affects yield is 'Since April 2001, house prices are up 52% on average nationwide but rents are down 2%'.


----------



## miju

Art said:


> Don't know where you are getting the 1% from. Looks a lot closer to 5% to me.


 
eh how can you be getting a 1-5% rental yield if you subsidising it by €400 pm ?


----------



## cjh

Has anybody noticed that all the 'Region €317,000' notices on daft have become 'Region €310,000' etc...
Small but significant.

"It's not the size of the step, but the direction that it takes"...I can't remember who said it....


----------



## Howitzer

All the geniuses working for the EAs have no idea how to deal with a slowing market. Every single one has gone back to their vendors and went, look we'll drop the asking price by a 10K that'll arouse a load of interest and suddenly we'll have 5 people outbidding each other and the price will sky rocket. The problem is they've all had the same brainwave.


----------



## Bedsit

Looks like the boys from DAFT (the Fallon brothers) are monitoring this site. One criteria I used to use to look at price drops was to change the max price to 100K. Up till a few days ago this used to return in the region of 2300 hits with most of these quoting "Price on Application". This figure has now dropped to about 700.

Also I wonder if they will now try and offload the site to some mug especially after being featured in the Herald last night. Methinks its too late, but good luck to them if they can ...


----------



## JayDub

Mullingar is also feeling the pinch,

3rd house from top, 100 Ardmore Hills reduced from €600,000
[broken link removed]

Now going for €550,000
http://www.daft.ie/searchsale.daft?id=140651&search=1


----------



## ButtermilkJa

Bedsit said:


> ...
> Also I wonder if they will now try and offload the site to some mug especially after being featured in the Herald last night. Methinks its too late, but good luck to them if they can ...


Slightly off topic but... people will _always_ need to buy, sell and rent properties, regardless of rising/falling house prices or high/low interest rates, and currently Daft is one of the best (if not _the_ best site out there for this). I would say they would have no problem selling it, if they were foolish enough to want to in the first place.


----------



## cjh

JayDub said:


> Mullingar is also feeling the pinch,
> 
> 3rd house from top, 100 Ardmore Hills reduced from €600,000
> [broken link removed]
> 
> Now going for €550,000
> http://www.daft.ie/searchsale.daft?id=140651&search=1http://www.daft.ie/searchsale.daft?id=140651&search=1http://www.daft.ie/searchsale.daft?id=140651&search=1


 

As I have a relative living in Mullingar I'm keeping an eye on the situation there - there are litterly hundreds of new houses up for sale, and it's not such a big place!


----------



## JayDub

Another house in Mullingar

Was €325,000


Now €315,000 and still no takers.
http://www.daft.ie/116563

If anybody has been to Mullingar take a drive through Belvedere Hills, nice 4 bedroom semi detached houses, under €315,000. The problem is half of the housing estate remains unsold, the houses are 100% ready to move in but there no takers. I drove though last week and there must be over 20 occupied houses with FOR SALE signs.


----------



## miju

is it just me or does inventory seem to be building up a hell of alot quicker than anyone anticipated?


----------



## cjh

JayDub said:


> Another house in Mullingar
> 
> Was €325,000
> 
> 
> Now €315,000 and still no takers.
> http://www.daft.ie/116563
> 
> 
> Factor in the Stamp Duty threshold here and that makes the price drop much greater than it looks.


----------



## Marie

ivuernis said:


> Are we looking at the same thing? It's an unfurnished one-bed studio flat, not a classy apartment.


 
It's all relative I agree! Compared with a two bed ex-Corpo in West Dublin 'furnished' with Argos flat-packs, 'boasting' (!) a court-yard-style garden (translate - _space for a rotary clothes-line_) at an asking rent of Euro800 p.m. _per person _a spacious contemporary fully-tiled studio _apartment _with underfloor heating _in the centre of Frankfurt _for Euro 380 seems to me the better deal!........but I may be over-endowed by experience of life and standards in other countries.


----------



## Calina

Marie said:


> It's all relative I agree! Compared with a two bed ex-Corpo in West Dublin 'furnished' with Argos flat-packs, 'boasting' (!) a court-yard-style garden (translate - _space for a rotary clothes-line_) at an asking rent of Euro800 p.m. _per person _a spacious contemporary fully-tiled studio _apartment _with underfloor heating _in the centre of Frankfurt _for Euro 380 seems to me the better deal!........but I may be over-endowed by experience of life and standards in other countries.



Oh Marie, I totally agree with you. Along with the handy tenant friendly legislation and decent security of tenure of course, I really do feel that 380E to live on my own in the centre of Frankfurt is a far better deal than oh 1100E to live on my own in the centre of Dublin.


----------



## miju

madisona said:


> I think that he was referring to a price reduction from that that was attained from a comparable property and not a drop in asking price.


 
a few people have said this on this thread and i dont think anyone has picked up on it to try and counter it so i will.

if the vendor was having viewings / interested parties they would not have reason to drop the asking price.Therefore logic suggests that if they drop the price by whatever figure they choose to encourage anyone to bid that does not mean that suddenly people are bidding up the price back to the original asking price or above .

actually come to think of it if a prospective buyer see's the asking price reduced do you think they'd be willing to get into a bidding war or try and play tough with bids? god forbid the thought but hell they may even make an offer BELOW the asking price in time to come

so therefore in alot of peoples eyes a drop in asking price equates to a drop in price.


----------



## mollser

Calina said:


> Oh Marie, I totally agree with you. Along with the handy tenant friendly legislation and decent security of tenure of course, I really do feel that 380E to live on my own in the centre of Frankfurt is a far better deal than oh 1100E to live on my own in the centre of Dublin.



If ya read the blurb on that frankfurt studio, it seems to be on the motorway belt around frankfurt, although I concede that it is only 15mins by train to the city centre. 

The rent talk is futile as many a survey have shown that rents in Dublin are in fact very average for European cities.

"Compared with a two bed ex-Corpo in West Dublin at an asking rent of Euro800 p.m. per person."

Where is this advertised?? Unlikely that this will be rented, as its not hard to rent whole houses for €1,100 in decent areas.  Most guys in work seem to pay about €500 to share spanky new apartments in Dublin, not by any stretch expensive.

Anyway, this is way off topic...


----------



## CelloPoint

BedSit said:
			
		

> Looks like the boys from DAFT (the Fallon brothers) are monitoring this site. One criteria I used to use to look at price drops was to change the max price to 100K. Up till a few days ago this used to return in the region of 2300 hits with most of these quoting "Price on Application". This figure has now dropped to about 700.



Well done for spotting it. I concurr that it is no coincidence that stats are changing so abruptly. Those boys are smart - they didn't win all those awards for nothing you know! Fair play to them all the same. In business there are no morals - if you don't bend the play, then someone will do it for you! I would also say that they've increased the turnover of properties on the site - the effects of this would be two-fold: i) the property market looks stable as there are only ever about 18,000 properties for sale nationally and ii) desperate sellers pay more often for an advert that stays on the site for a shorter period of time. <cue cash register sound>. Of course this is all suspicion on my part (I'm very suspicious). Anybody got any first hand experience/evidence to suggest that there is a shorter advertising period on daft, compared to say 6 months ago?



			
				BedSit said:
			
		

> Also I wonder if they will now try and offload the site to some mug especially after being featured in the Herald last night. Methinks its too late, but good luck to them if they can ...


Who would buy them out? Funda maybe? IMO, daft looks to be a good business model in that it doesn't really matter how much the houses cost because it's a flat-rate fee unrelated to the house price (unlike rival estate agencies who must have swanky offices and glossy brochures). All daft need is an active market to maintain profitability. And besides, people are dying all the time, estates get broken up and (recently) people are forced in to selling (divorces/friends/families/girlfriends/boyfriends with property ventures going sour).


----------



## whathome

madisona said:


> I think that he was referring to a price reduction from that that was attained from a comparable property and not a drop in asking price.


 
Excellent, where do you propose getting results from a *private* treaty sale?


----------



## Maine

plaudit said:


> The immigrants will arrive with no work available so they will have to leave again.


 
IMO the immigrants will stay and if times are tough expensive irish workers will be let go and these guys hired for minimum wages. For the immigrants minimum wages will be enough however for irish people 400 euros a week does not leave alot left over for jumbo mortgages. 

As a irish skilled tradesman in London pointed out to me there will be a lot less well paid jobs in the Olympics for ex Irish construction workers as London is overloaded with eastern europeans who work for £300 to £400 a 6 day week. Historically the Irish had less competition for this work in Uk but the EU accession has changed that. The historical safety valve is not generous as it was.


----------



## Remix

madisona said:


> Originally Posted by *paddyd* http://www.askaboutmoney.com/showthread.php?p=284006#post284006
> _I've yet to see evidence of a price drop on a 3-bed semi._
> 
> 
> 
> 
> I think that he was referring to a price reduction from that that was attained from a comparable property and not a drop in asking price.


 
That would be easy to do in e.g. UK, US and Canada where there is more openness in their property markets.

In Ireland, information on actual sales price has been put beyond the freedom of information act and so is concealed from the public.

Very convenient, eh?


----------



## conor_mc

CelloPoint said:


> IMO, daft looks to be a good business model in that it doesn't really matter how much the houses cost because it's a flat-rate fee unrelated to the house price (unlike rival estate agencies who must have swanky offices and glossy brochures). All daft need is an active market to maintain profitability. And besides, people are dying all the time, estates get broken up and (recently) people are forced in to selling (divorces/friends/families/girlfriends/boyfriends with property ventures going sour).


 
In fact, these guys could make a very decent profit out of a crash. A ramp up in inventory is great for them. They care not a whit whether the house gets sold or for how much.


----------



## CelloPoint

JayDub said:


> If anybody has been to Mullingar take a drive through Belvedere Hills, nice 4 bedroom semi detached houses, under €315,000. The problem is half of the housing estate remains unsold, the houses are 100% ready to move in but there no takers. I drove though last week and there must be over 20 occupied houses with FOR SALE signs.



Pictures would be very telling indeed...


----------



## walk2dewater

mollser said:


> If ya read the blurb on that frankfurt studio, it seems to be on the motorway belt around frankfurt, although I concede that it is only 15mins by train to the city centre.
> 
> The rent talk is futile as many a survey have shown that rents in Dublin are in fact very average for European cities.
> 
> "Compared with a two bed ex-Corpo in West Dublin at an asking rent of Euro800 p.m. per person."
> 
> Where is this advertised?? Unlikely that this will be rented, as its not hard to rent whole houses for €1,100 in decent areas. Most guys in work seem to pay about €500 to share spanky new apartments in Dublin, not by any stretch expensive.
> 
> Anyway, this is way off topic...


 
Rents ARE cheap in Dublin, that is, relative to incomes (which are high by international standards) and _especially_ relative to property prices.

While on the anecdotes I'll add my own.  In Vancouver today you can expect to pay at the low-end $650/mth for a reasonable unfurnished 1-bed apt. in a decent area, close to downtown.  That's €458/mth.  And of course renting is totally different experience there.  Rental units are a real business in Canada with whole blocks run by stock market listed management companies, strong tenant laws and life-long tenants who can paint their walls and have pets etc.


----------



## Neffa

On the benefits (or not) for the Daft.ie team in the event of a change in buyer sentiment:

A sales crash would probably be great for them as it would drive up rental demand. 

In London post-1991, there was a very healthy 5-6 year period of rental demand following the crash because "you'd be mad to buy" was the general viewpoint of many FTB's.

Of course, there was a very, very small BTL market then so most properties for rent were offered by long-term professional landlords who were making profits on their income from their property rather than relying on capital appreciation.


----------



## Bedsit

conor_mc said:


> In fact, these guys could make a very decent profit out of a crash. A ramp up in inventory is great for them. They care not a whit whether the house gets sold or for how much.



They are a young startup company and having seen Myhome.ie sell for 50m they would surely love to get a slice of that action instead off having to live of the small peanuts that they would get from rental ads for the rest of their lives.


----------



## Duplex

Marie said:


> It's all relative I agree! Compared with a two bed ex-Corpo in West Dublin 'furnished' with Argos flat-packs, 'boasting' (!) a court-yard-style garden (translate - _space for a rotary clothes-line_) at an asking rent of Euro800 p.m. _per person _a spacious contemporary fully-tiled studio _apartment _with underfloor heating _in the centre of Frankfurt _for Euro 380 seems to me the better deal!........but I may be over-endowed by experience of life and standards in other countries.


 

€380 for a 500sq ft studio flat in Frankfurt. 

€750 for a (what looks smaller) studio in Dublin.

http://www.daft.ie/searchrental.daft?search=rental&id=420054

I like that studio in Dublin, you fall out of bed and are in the kitchen, perfect if you have an attack of the midnight munchies.


----------



## ncs

Duplex said:


> €380 for a 500sq ft studio flat in Frankfurt.
> 
> €750 for a (what looks smaller) studio in Dublin.
> 
> http://www.daft.ie/searchrental.daft?search=rental&id=420054
> 
> I like that studio in Dublin, you fall out of bed and are in the kitchen, perfect if you have an attack of the midnight munchies.


 
Where exactly is the "Spacious Living Area" ??? Outside, I assume.


----------



## conor_mc

Bedsit said:


> They are a young startup company and having seen Myhome.ie sell for 50m they would surely love to get a slice of that action instead off having to live of the small peanuts that they would get from rental ads for the rest of their lives.


 
True, wasn't really commenting on the pros and cons of selling up. Just that they're probably one of the only property-related businesses I can think of that would do well out of a crash.


----------



## Duplex

ncs said:


> Where exactly is the "Spacious Living Area" ??? Outside, I assume.


 
But I suppose you wouldn't have to spend too much time looking for the 'Spacious Living Area' with the flat being that small and such.  Check out the photo of the loo, no toilet seat cover and a pad missing from the toilet seat, classy.


----------



## Savvy

Duplex said:


> €380 for a 500sq ft studio flat in Frankfurt.
> 
> €750 for a (what looks smaller) studio in Dublin.
> 
> http://www.daft.ie/searchrental.daft?search=rental&id=420054
> 
> I like that studio in Dublin, you fall out of bed and are in the kitchen, perfect if you have an attack of the midnight munchies.



So does the foodpress double as a wardrope


----------



## Duplex

Savvy said:


> So does the foodpress double as a wardrope


 Yes suits (okay suit) on the right, cornflakes on the left.


----------



## mollser

"The elasticity of the supply money means that interest rate increases will continue to have little impact on the Irish property market..." 

Bulls, you are missing out on some superb reasoning from the [highlight]HOK[/highlight] property review (todays IT) as to why this bull run will continue for the forseeable future...

Attention Walk2Dewater, HOK reckon that there is a [highlight]maximum[/highlight] of 4 interest rate hikes to go, "worst case" and that so far there has been no impact from the increase in rates on the housing market here.  

Therefore we have nothing to worry about... 

Not a cautionary note in there anyway.  There are many more fantasticly positive arguments in their review...


----------



## thewatcher

mollser said:


> Bulls, you are missing out on some superb reasoning from the [highlight]HOK[/highlight] property review (todays IT) as to why this bull run will continue for the forseeable future...


 
Turkey's don't vote for christmas !


----------



## mortimer33

Duplex said:


> €380 for a 500sq ft studio flat in Frankfurt.
> 
> €750 for a (what looks smaller) studio in Dublin.
> 
> http://www.daft.ie/searchrental.daft?search=rental&id=420054
> 
> I like that studio in Dublin, you fall out of bed and are in the kitchen, perfect if you have an attack of the midnight munchies.


 
Think the rent is a bit cheeky for a bedsit, I easily found a 1 bed apt last year for 850/month in Beaumont. It looks like rents have gone up by about 100euro since then however. But I pity anyone who pays 750euro for that place...


----------



## Duplex

[broken link removed]

A severe shortage of family homes according to HOK?.   Very glossy publication with the obligatory photograph of a group of agents quaffing champers.


----------



## bren2002

Quaffing fizz because they sold up and cashed in!


----------



## mortimer33

How about this one?[broken link removed] Apparently - it sleeps up to 5...


----------



## ivuernis

Marie said:


> It's all relative I agree! Compared with a two bed ex-Corpo in West Dublin 'furnished' with Argos flat-packs, 'boasting' (!) a court-yard-style garden (translate - _space for a rotary clothes-line_) at an asking rent of Euro800 p.m. _per person _a spacious contemporary fully-tiled studio _apartment _with underfloor heating _in the centre of Frankfurt _for Euro 380 seems to me the better deal!........but I may be over-endowed by experience of life and standards in other countries.


 
Do you have a link for said example of €1600pm 2-bed in west Dublin because I'm looking on Daft right now and there any plenty of nice, new spacious 2-bed apts for €1200pm and under. 

Just for fairness and balance here is a city centre 2-bed apt (on the small side) for €1550pm in Frankfurt: 
[broken link removed]

I'm not saying west Dublin can be compared to centre of Frankfurt, I'm only showing other examples which counter your €1600pm in West Dublin and €380pm in centre of Frankfurt.


----------



## Savvy

mortimer33 said:


> How about this one?[broken link removed] Apparently - it sleeps up to 5...



Two to each single bed and one in the bath.


----------



## mortimer33

"it sleeps up to 5..."Maybe they meant 5 Umpa Lumpa's..


----------



## whizzbang

Bedsit said:


> Looks like the boys from DAFT (the Fallon brothers) are monitoring this site. One criteria I used to use to look at price drops was to change the max price to 100K. Up till a few days ago this used to return in the region of 2300 hits with most of these quoting "Price on Application". This figure has now dropped to about 700.
> 
> Also I wonder if they will now try and offload the site to some mug especially after being featured in the Herald last night. Methinks its too late, but good luck to them if they can ...



This is a great time for daft! all those people advertising houses for sale!


----------



## Bedsit

Check out this unfinished monstrosity in Mullingar

http://www.daft.ie/searchsale.daft?search=1&s[cc_id]=c7&s[a_id]=2713&s[mnp]=&s[mxp]=&s[bd_no]=&s[search_type]=sale&s[refreshmap]=1&limit=10&search_type=sale&id=140994

I wonder which "sea" they are referring to?


----------



## whizzbang

Duplex said:


> [broken link removed]
> 
> A severe shortage of family homes according to HOK?.   Very glossy publication with the obligatory photograph of a group of agents quaffing champers.



has this thing been published before? it says it is HOKS "Regular Property Commentry" is this a regular thing or does once mean "Regular" now? Interesting timing if this is the first one.


----------



## Savvy

I wouldn't be too sure that the appartments are in Ireland. They have a Spanish look about them.
If its Mullingar then it should read 50mi and not 150m !!


----------



## whizzbang

Bedsit said:


> Check out this unfinished monstrosity in Mullingar
> 
> http://www.daft.ie/searchsale.daft?search=1&s[cc_id]=c7&s[a_id]=2713&s[mnp]=&s[mxp]=&s[bd_no]=&s[search_type]=sale&s[refreshmap]=1&limit=10&search_type=sale&id=140994
> 
> I wonder which "sea" they are referring to?



wow, maybe its the "Sea of Dreams"  that this development is currently sinking into?


----------



## langball

ivuernis said:


> Just for fairness and balance here is a city centre 2-bed apt (on the small side) for €1550pm in Frankfurt:


 
thanks for that, I was just about to say the same. That apartment sounds like its in suburb hell (autobahn frequently = traffic jam worse than ireland) - its also most likely in the same house as the owner. Yes the rent is cheap by our standards but our stardards have become unsustainable. I am glad I sold my house and have no ties to this place. I feel bad for folks who are mortgaged up to their necks and who think the party will continue forever. 

Irish people see that other countries are ridiculously cheap to buy in by irish standards. That is is getting them in more trouble, buying in eastern europe or dubai or wherever. Just because you can rent / buy somewhere else cheaper (= reasonably) is not sufficient grounds to 'release equity' (other words for tighten the noose) and drop 100k; it will still have to be paid back at some stage and sometime soon that amount of money will sound like a lot here, again. 

It may be like being in a casino and on a winning streak, up 500% one minute and before you know it you owe the bank 5k. Gambling preys on human nature. 

I wish I was wrong but my opinon really counts for nothing. That Herald banner yesterday pm was scary, I had to do a double take. I actually bought it for only the 3rd time ever. Whatever you say about the paper, their reporting or content or whatever, the fact that it was there in black and white was monumental.


----------



## Debtwish

*Re: What will happen to house prices?*

I wanted to post my opinion on how low house prices will go on the appropriate thread but found it closed, so I will dump it here.

It has been interesting reading opinions on what will happen to prices. Some believe that the absence of capital appreciation will force investors to reassess their holdings, with the result that most will sell due to the investment case not making sense on a rental yield basis.

Whilst I agree that this could have a significant effect on the market, I feel that what happens to house prices depends as much upon the attitude taken by lenders in a softening market.

Most mortgage debt is securitised by the lending institutions and sold on in the markets to hedge funds and other institutions with an appetite for such risk. All the time there is a healthy demand for these securities, the lenders will keep lending. And why not if you know that you can sell that risk on?

I don’t believe that the global markets will go soft on Irish mortgage debt until they see evidence that bad debt provision is starting to rise on the balance sheets of the lenders. And that will only happen when borrowers start defaulting in significant numbers.

A reduction in demand for securitised debt will cause the banks to reign in the lending and apply stricter criteria. At the moment, it is pretty much a free-for-all out there, with mortgages available on income multiples of five, six times or even more. Imagine what would happen to buyers’ purchasing power if they could only borrow three to four times their income? It doesn’t take much imagination to realise that this would be devastating for the market.

There is such an aversion to renting amongst the Irish population that, even in a softening market, so long the banks are prepared to lend, the buyers will be prepared to borrow, even on a depreciating asset. It is not until the lending slows, that the buyer demand will drop and then only because their ability to pay will be diminished.

It remains to be seen whether this will happen, but I feel that what happens to house prices depends as much on the financial markets as it does on the behaviour of amateur BTL specu-investors.

Any comments?

Debtwish


----------



## miju

*Re: What will happen to house prices?*



Debtwish said:


> There is such an aversion to renting amongst the Irish population that, even in a softening market, so long the banks are prepared to lend, the buyers will be prepared to borrow, even on a depreciating asset. It is not until the lending slows, that the buyer demand will drop and then only because their ability to pay will be diminished.


 
OK so if that's the case , why is inventory building up and the market considerably slower in the month when things are to "pick up" i'm talking about normal 400k ish 3-4 bedroom house , never mind the 70% that failed at auction last week

for all intent and purposes it looks like this time sentiment has begun to turn and people aren't as willing to jump through hoops to buy any property no matter what. 

also, some people may be stupid but to insinuate that that irish people are THAT stupid as to take out a mortgage on a depreciating asset???? i mean come on get real the attitude will more than likely be:

"sure why not wait till the market bottoms out before taking on the mortgage after all us irish are cute whores for the bargains / good deals.  "

indeed the massive social cock measuring excercise that is "my house is worth xxxx and i only xxx for it" with be replaced with "this is was worth xxx but i managed to get it for less at xxx"


----------



## conor_mc

Debtwish,

It won't take significant numbers of defaulters to tighten the screws on bank securitisation. I'm sure these hedge funds weigh up the future risks associated with any investment, rather than just the current stats.

Simple fact is when debt gets more expensive, the risk of defaulting will rise. For that risk you need a corresponding reward. That reward can only increase with the risk if the margin between ECB rate and the rate charged by the bank increases.... e.g. trackers at ECB+1.5% instead of +1%.

Throw the possibility of U.S. recession and its impact here into the mix, and the risk grows further.

EDIT: Also, banks have to stress-check their mortgagees, so a couple earning €70k and being stress-tested to ECB+2% won't get as much in January 2007 as they could have in January 2006, no matter how much the bank would love to give them the money. The banks may still dish out plenty of mortgages, but the average mortgage has to come down from what it currently is as rates rise.


----------



## whathome

*Re: What will happen to house prices?*



Debtwish said:


> Most mortgage debt is securitised by the lending institutions and sold on in the markets to hedge funds and other institutions with an appetite for such risk. All the time there is a healthy demand for these securities, the lenders will keep lending. And why not if you know that you can sell that risk on?
> 
> I don’t believe that the global markets will go soft on Irish mortgage debt until they see evidence that bad debt provision is starting to rise on the balance sheets of the lenders. And that will only happen when borrowers start defaulting in significant numbers.


 
Hedge fund appetite for mortgage debt is already waning. This BusinessWeek article highlights how Wall Street is pushing back on banks to mop up the mess.

http://www.businessweek.com/magazine/content/06_40/b4003063.htm

"But now that the real estate tide is ebbing, trash is starting to wash up on shore. Mortgage delinquencies are zooming -- bad news for the banks, Wall Street firms, and investors holding loans."

"In some cases, the original lenders are taking the biggest hits. In typical deals, banks agree to buy mortgages back from Wall Street in the case of a payment default within the first 90 days. Now some are writing big checks."


----------



## MadPad

Truely, we are all doomed 
http://www.escapeartist.com/international/luck_property.html


----------



## ivuernis

MadPad said:


> Truely, we are all doomed
> http://www.escapeartist.com/international/luck_property.html


and written in August 1999 btw!


----------



## whizzbang

*Re: What will happen to house prices?*



Debtwish said:


> I wanted to post my opinion on how low house prices will go on the appropriate thread but found it closed, so I will dump it here.



First off, cheers for a good well thought out Bullish argument, we don't see enough of them.

This is an interesting argument from banking side of things but it does neglect the sentiment issue. We dont' really know if people will buy houses if they see the prices stop increasing. Lots of people might take a "Wait and see" attitude rather than get into debt to the tune of 10 times their salary. No matter how much money the banks are throwing at them.

From the baking point of view would this not be a one time deal for the banks? If they got a reputation for selling low quality debt on the international market would this not be shooting themselves in the foot? Once the money machine stops and the other financial institutions stop buying Irish mortgage debt it would be a long time before they would be able to sell on any debt to anyone again?

The other question is how far along this cycle are we? Could the international debt buyers start getting cold feel by looking at the risk  profile for our mortgage debt? Even before bad debt starts accumulating?


----------



## MadPad

ivuernis said:


> and written in August 1999 btw!


 
was wondering how long it would take people to spot that 

Ive been following this thread which I find fascinating. Bear and bull seem to think they know it all and its amusing to see the certainty in peoples replies.... Rates WILL increase... etc etc etc..

Plenty of people thought the same as that article in 1999 .... I shared that view, held off buying an investment property then... i still think property is way overvalued in Ireland but at least now ye all know my opinion doesnt count for much 

That said, Ireland has been rolling the dice and coming up with 6's for a good few years now.... devaluation, euro entry, rate decreases, immigration etc... wonder whats next...


----------



## whathome

MadPad said:


> its amusing to see the certainty in peoples replies.... Rates WILL increase... etc etc etc.


 
Well... interest rates WILL increase : next Thursday by 0.25%

Not sure why you find that amusing


----------



## mprsv1000

Currently living in the U.K and planning to move back to Ireland to start a family. Houses prices are a huge concern as when I look at what I'll have to pay out in repayments its mind boggling. What about when the kids come along? My biggest concern is this if I buy a house next door to my sister inlaw, who bought last year I will have to pay 420,000 while she only paid 300,000 now that is some hike ( fell free to explain how the new price is justified in one year??) My repayments will be about 500-600 euro more a month and that is less money  to go out, buy school book etc etc.

I work in th esame field as my sister in law and her salery has only gone up 3%. So my real concern is the effect house prices have on FTB's disposable income, they will have less(like me) to pump back into the economy, and consumerism is what is holding up most world economies at present. 

So I think there is a real need for concern about the future, we need to be looking at the -long term-BIG picture.
(anyone have a cheap house for sale-get out before the crash )


----------



## Debtwish

*Re: What will happen to house prices?*



whizzbang said:


> First off, cheers for a good well thought out Bullish argument, we don't see enough of them.


 
Thanks. Although I'm not that bullish myself. I am pretty sure that the housing boom is now over, but I'm not sure what will happen next. 

I do feel that a lot depends on the attitude of lenders, although you won't get any clues from the likes of Austin Hughes; a banker telling you not to borrow money is like Ford tell you not to own a car.

I take the view that markets do, what markets do and they never cease to amaze me.


----------



## Debtwish

*Re: What will happen to house prices?*



miju said:


> also, some people may be stupid but to insinuate that that irish people are THAT stupid as to take out a mortgage on a depreciating asset????


 
Perhaps you should speak to all my neighbours that have remorgaged to buy depreciating assets made by BMW and Mercedes.

My neighbour's driveway with his&hers BMWs is depreciating at a rate of nearly 100 Euro a day.


----------



## Duplex

If we are looking for clues as to what is likely to happen in the Irish housing market next, look no further than the US. Forewarned is forearmed. 

The first link deals with stated income (self certified) mortgages and widespread fraud in California. Harrowing stuff. 



http://cbs5.com/30minutes/local_story_266005029.html

The second link deals with early signs that the money markets are starting to price in some of the risk associated with voodoo mortgages.


http://articles.moneycentral.msn.co...ronicles/VoodooDebtAndTheComingRecession.aspx


----------



## MadPad

whathome said:


> Well... interest rates WILL increase : next Thursday by 0.25%
> 
> Not sure why you find that amusing


 
Rates are increasing by 0.25%.... Thats a QUARTER OF ONE PERCENT, its nothing, particularly to the new breed of enterpreneur out there who the banks have assured us have had their mortgages stress tested.

I have real sympathy for young people who have paid vastly inflated figures for property in the past few years, zero sympathy for investors... My sympathy or lack of it counts for nothing...

What i find funny is the certainty of people as to whats going to happen, life is unpredictable, rates could drop again in the spring... the article was just to show how certainty looks very silly a few years doen the road

A neutral ECB rates is generally agreed to be 4%, so mortgages (ECB + say 1%) should be somewhere between 3% and say 6%. So if property in Ireland is valued correctly, an increase of 1% should be a pain for people but shouldnt be a cause for sleepless nights for 99% of mortgage holders... The fact that a .25% increase is billed as a hike says enough


----------



## plaudit

MadPad said:


> Chill out...
> 
> Rates are increasing by 0.25%.... Thats a QUARTER OF ONE PERCENT, its nothing, particularly to the new breed of enterpreneur


 
The markets have priced in 3 more rises.


----------



## daveirl

MadPad said:


> Chill out...
> 
> Rates are increasing by 0.25%.... Thats a QUARTER OF ONE PERCENT, its nothing, particularly to the new breed of enterpreneur



Which means interest rates are over 60% higher than they were a year ago.


----------



## walk2dewater

MadPad said:


> That said, Ireland has been rolling the dice and coming up with 6's for a good few years now....


 
The secret to success in anything is to load the dice as much as you can in your favour... success isn't a total fluke, and neither is failure.


----------



## plaudit

But if 0.25% is nothing, then 10 x 0.25% rises is still nothing because 10 X Nothing is still nothing surely?


----------



## Remix

Duplex said:


> [broken link removed]
> 
> A severe shortage of family homes according to HOK?. Very glossy publication with the obligatory photograph of a group of agents quaffing champers.


 
I attended an open house of one of these family homes that are in severe shortage in Dublin. That was almost 5 months ago and this week I had a call from the EA telling me it was still on the market and the vendor is open to offers !!?!!

The other thing that amazes me about reports like this is that they are not even required to put in a disclaimer such as would be required in other countries. At the very least something along the following lines would be welcome:

_" The report is published for informational (entertainment  ) purposes and is not be construed as a solicitation or an offer to buy or sell any properties. The report is based on information obtained from sources believed to be reliable, but is not guaranteed as being accurate. Past performance is not necessarily indicative of future results"_


----------



## gearoidmm

As a lifelong IT reader, this kind of EA puke that's turning up all too often within the pages is starting to turn me off it.  If it wasn't for Tom Humphries...


----------



## ButtermilkJa

Duplex said:


> ...
> The first link deals with stated income (self certified) mortgages and widespread fraud in California. Harrowing stuff.
> http://cbs5.com/30minutes/local_story_266005029.html



Oh my God , am I missing something here. These brokers are ruining peoples lives by forging loan applications in order to receive large commission cheques... and they're getting away with this? How is this not illegal?


----------



## MadPad

plaudit said:


> But if 0.25% is nothing, then 10 x 0.25% rises is still nothing because 10 X Nothing is still nothing surely?


 
 didnt realize I was talking with a lawyer... 

Remember when rates were > 10%... There is still a probability (albeit small) that they can go back there.

a quarter of one percent is the minimum the ECB can raise rates without looking silly... *If you cant take say 8 of these in a row, the mortgage hasn't been stress tested.*. we've only done 3 so far...

Hopefully rates will rise enough to stop the property madness in ireland (lets say just another .5% over the next few months) and then fall back.
To me that would be the definition of Ireland rolling another 6. a reasonable drop in house prices, some people getting burned but most still capable of paying their mortgages, and values dropping just enough to burn investors but not so much that they all try to sell up at once. 

But its out of our hands now, lets see what those nice people in Frankfurt do over the next year.


----------



## MadPad

walk2dewater said:


> The secret to success in anything is to load the dice as much as you can in your favour... success isn't a total fluke, and neither is failure.


 
Dont tell me our brave buddies in government predicted the rash of low interest rates back in 2001. If they did, they should have introduced a property tax.

We need to start loading the dice again though, and get property back where its should be... somewhere to live and work, not a get rich scheme, that is affecting real business.


----------



## CelloPoint

MadPad said:


> didnt realize I was talking with a lawyer...
> 
> Remember when rates were > 10%... There is still a probability (albeit small) that they can go back there.
> 
> a quarter of one percent is the minimum the ECB can raise rates without looking silly... *If you cant take say 8 of these in a row, the mortgage hasn't been stress tested.*. we've only done 3 so far...
> 
> Hopefully rates will rise enough to stop the property madness in ireland (lets say just another .5% over the next few months) and then fall back.
> To me that would be the definition of Ireland rolling another 6. a reasonable drop in house prices, some people getting burned but most still capable of paying their mortgages, and values dropping just enough to burn investors but not so much that they all try to sell up at once.
> 
> But its out of our hands now, lets see what those nice people in Frankfurt do over the next year.



Mmm, aren't the rates being "normalised" around the 4-5% mark? We've just experienced a period of abnormal rates around the 2-3% mark, when the majority of our debt was taken on. We now have to pay this back at the higher rate. We're screwed as far as I can see.


----------



## plaudit

but the thing is I don't remember 10% rates, a lot of people don't, which is part of the myth, that rates will never go over ~5%. The present base rate in New Zealand is 7.5%, there is no reason why that can't happen here.


----------



## whathome

MadPad said:


> What i find funny is the certainty of people as to whats going to happen, life is unpredictable, rates could drop again in the spring... the article was just to show how certainty looks very silly a few years doen the road


 
So you tried to bait us with the 1999 article and it didn't work... and you think it's funny that people have a clear indication of where interest rates are heading. Do you think you are more clever than the majority of people posting here? Do you think we're stupid enough to fall for such a lame trick? Such a pathetic attempt to make a point degrades anything else you have to say.


----------



## Howitzer

MadPad said:


> a quarter of one percent is the minimum the ECB can raise rates without looking silly... *If you cant take say 8 of these in a row, the mortgage hasn't been stress tested.*. we've only done 3 so far...


 
There have been *4* so far. The ECB rate is currently 3% (in case you were unaware). It had been 2% last December. That's a 50% increase in interest rates. There will be another increase at the start of October.


----------



## MadPad

plaudit said:


> but the thing is I don't remember 10% rates, a lot of people don't, which is part of the myth, that rates will never go over ~5%. The present base rate in New Zealand is 7.5%, there is no reason why that can't happen here.


 
If it goes to that, we are all screwed. but its very unlikely thanks to the ECB being too big for currency speculators to really take on. NZ doesnt have that luxury...

Best post so far was #4625, a real eye opener... http://www.askaboutmoney.com/showpost.php?p=283486&postcount=4625

It not in our interest for property prices to keep rising, and certainly not in our interest for there to be a crash. All in all a few interest rate rises are good news provided they stop say early/mid next year.


----------



## Savvy

http://www.bloomberg.com/apps/news?pid=20601068&sid=adLVyqsH_yvw&refer=economy

More upwards pressure on interest rates


----------



## Calina

MadPad said:


> It not in our interest for property prices to keep rising, and certainly not in our interest for there to be a crash. All in all a few interest rate rises are good news provided they stop say early/mid next year.



1) it is not in our interest for property prices to keep rising
2) it is not in our interest for there to be a crash

Unfortunately
3) it is not in our interest for property prices to remain at the levels they are at the moment given the disparity between salaries and average prices. For some (any) sort of rationality to come into the market, either salaries will have to rise quite a bit or houseprices will have to come down. Current social partnership talks about something like 10% in 27 months and most private sector employees are claiming they won't even see that. So...hmm...

So what's it to be? Thing is, if property prices are going to remain at current levels, something like 40% of the buyers are going to dry up so...

I think that means many houses, fewer buyers, supply, demand, prices heading down?

I'd venture to say that what's not in our interest is a long drawn out correction. A sharp shock and life as normal...but I can't see it happening. Not with so many people trying to convince themselves that everything is alright.


----------



## walk2dewater

MadPad said:


> If it goes to that, we are all screwed. .


 
I'm not. And anyone with a pile of cash ain't either. Bring on higher rates I say. Higher the better cos with inflation at 5% and rabobank only paying 3.6% before DIRT I'm getting poorer.



MadPad said:


> but its very unlikely thanks to the ECB being too big for currency speculators to really take on. NZ doesnt have that luxury...
> .


 
Sez who? Sez the bank, sez the estate agent?  Just because every vested interest in Ireland says it over and over and over ad nauseum don't make it true. Why lo and behold, HOKs "Research" in todays IT says that another 1% increase is the worst case (top right on page5). No, that aint the worse case at all.


----------



## phoenix_n

baby_tooth said:


> no, your way to early on this.
> 
> markets don't plummet, they yo-yo up or down to a new plateau..the less liquid, the longer it takes.
> 
> not a swallow does a summer make...time left for fools still to be aprted from their money...
> 
> the mentallity still exists that property doesn't drop, not in Ireland.


 
And they thought WW1 would be over my xmas.


----------



## Gwynston

mprsv1000 said:


> Currently living in the U.K and planning to move back to Ireland to start a family. Houses prices are a huge concern as when I look at what I'll have to pay out in repayments its mind boggling. What about when the kids come along?
> ...
> So I think there is a real need for concern about the future, we need to be looking at the -long term-BIG picture.


Why not rent? Sounds like the perfect choice while you wait to see what happens with the property market.


----------



## MadPad

whathome said:


> So you tried to bate us with the 1999 article and it didn't work... and you think it's funny that people have a clear indication of where interest rates are heading. Do you think you are more clever than the majority of people posting here? Do you think we're stupid enough to fall for such a lame trick? Such a pathetic attempt to make a point degrades anything else you have to say.


 
Well, there was nothing wrong with an attempt to *bait* people, although that wasn’t the purpose of the post. Among all the doom and gloom on the thread, sometimes its good to be reminded how today’s certainties look silly tomorrow. 

Far from considering myself smarter that people on the forum, excluding your good self of course, events since 1999 proved me particularly poor in predicting the future. I went with the argument that prices had peaked in 99 and didn’t invest in a BTL. So I’m not that smart.

Apart from my PPR, which is paid for, I don’t have any skin in the game on Irish property so I am not trying to drive a particular agenda.

I think that among all the posts both bear and bull, its worth looking back on what the “smart people” were saying a few years ago and maybe learning something from them. Im not saying that just because some smart guys predicted a crash in ’99 and some smart guys are doing the same now that it WONT happen, all I’m saying is they are just predictions.


----------



## MadPad

walk2dewater said:


> I'm not. And anyone with a pile of cash ain't either. Bring on higher rates I say. Higher the better cos with inflation at 5% and rabobank only paying 3.6% before DIRT I'm getting poorer.
> 
> 
> 
> Sez who? Sez the bank, sez the estate agent? Just because every vested interest in Ireland says it over and over and over ad nauseum don't make it true. Why lo and behold, HOKs "Research" in todays IT says that another 1% increase is the worst case (top right on page5). No, that aint the worse case at all.


 
Yeah, but if higher rates hurt nearly everyone except yourself, then it aint much use, unless its a big wad of cash  A big wad of cash is always good.

Yeah, youre right, no guarantee ECB wont raise rates to 10% but they dont want to. Small countries are often *forced to* in order to fend off currency speculators. Thankfully we are part of the EU and aside from the US $, we are one of the biggest and the EU has enough reserves to cause most speculators to think twice. The speculators will try to pick off weaker currencies, remember when Ireland was forced to devalue, we simply didnt have the reserves to fight the speculators.


----------



## whathome

MadPad said:


> Im not saying that just because some smart guys predicted a crash in ’99 and some smart guys are doing the same now that it WONT happen, all I’m saying is they are just predictions.


 
Predicting when a crash will happen is very different to having insight on interest rate movements based on ECB comment.  The ECB provide a lot of pointers to indicate future rate movements, reading these pointers is not the same as making predictions on a crash.


----------



## MadPad

Calina said:


> 1) it is not in our interest for property prices to keep rising
> 2) it is not in our interest for there to be a crash
> 
> Unfortunately
> 3) it is not in our interest for property prices to remain at the levels they are at the moment given the disparity between salaries and average prices. For some (any) sort of rationality to come into the market, either salaries will have to rise quite a bit or houseprices will have to come down. Current social partnership talks about something like 10% in 27 months and most private sector employees are claiming they won't even see that. So...hmm...
> 
> So what's it to be? Thing is, if property prices are going to remain at current levels, something like 40% of the buyers are going to dry up so...
> 
> I think that means many houses, fewer buyers, supply, demand, prices heading down?
> 
> I'd venture to say that what's not in our interest is a long drawn out correction. A sharp shock and life as normal...but I can't see it happening. Not with so many people trying to convince themselves that everything is alright.


 
 Forget whats in your interest, whats the best result for the country?
Maybe a long drawn out correction allowing for inflation to bring property back would be better for Ireland as its part of the EU? Maybe its best to get it over with?

Or maybe we should hope the euro gets devalued....

Its a conundrum isn't it...


----------



## tententwenty

MadPad said:


> Well, there was nothing wrong with an attempt to *bait* people,


Yeah there is, its called trolling.



MadPad said:


> Far from considering myself smarter that people on the forum, excluding your good self of course, events since 1999 proved me particularly poor in predicting the future.


Actually you would have been right in 1999, or close anyway. If interest rates hadn't been floored in 2001, the price rises would have deflated and things would have returned more or less to equilibrium. The thing is now that even if interest rates collapse again, for some unknown reason, the house value to salary rates is too far off the scale to support further increases. And interest rates aren't going to drop again, short of another 9-11 scale attack. And even then I would have my doubts.


----------



## tententwenty

MadPad said:


> Maybe a long drawn out correction allowing for inflation to bring property back would be better for Ireland as its part of the EU?


Being one of the richest countries in the world, apparently, and still not being a net EU contributor will not have endeared us to Brussels any. They won't be doing us any favours to pull our fat out of the fire this time around, EU member or not.


----------



## Marie

Duplex said:


> €380 for a 500sq ft studio flat in Frankfurt.
> 
> €750 for a (what looks smaller) studio in Dublin.
> 
> http://www.daft.ie/searchrental.daft?search=rental&id=420054
> 
> I like that studio in Dublin, you fall out of bed and are in the kitchen, perfect if you have an attack of the midnight munchies.


 
'Spacious'?  Shower and w.c. appear to occupy a single bed width!!!


----------



## Doris

I was wondering if anyone had any insight into the link between  the Irish rental markets and a slowdown crash in the cities property prices?


----------



## whathome

MadPad said:


> I went with the argument that prices had peaked in 99 and didn’t invest in a BTL. So I’m not that smart.


 
Maybe you're not that smart or maybe you were just naive to believe the argument that prices had peaked in 1999.  If you had looked at fundamentals rather than trying to time the market it might have worked out better for you.  Gross yields above 7% were available in 1999, it wasn't necessary to subsidise tenants.  Decent yields will return and when that happens, Irish property will be a viable investment again.  Who knows when property will drop to a level that makes sense for a professional investor - could be next year or a few years from now.


----------



## Sidewinder

MadPad said:


> A neutral ECB rates is generally agreed to be 4%, so mortgages (ECB + say 1%) should be somewhere between 3% and say 6%. So if property in Ireland is valued correctly, an increase of 1% should be a pain for people but shouldnt be a cause for sleepless nights for 99% of mortgage holders... The fact that a .25% increase is billed as a hike says enough



No, the "neutral" rate is a real rate of interest of 2-3%. Given the ECB inflation target of 2%, if that is met then the long-term neutral ECB rate is indeed 4-5%. But global inflation has been held down for the last decade due to deflationary effects from Germany, Japan and China. If inflation across the Eurozone goes to 3-4% (which is still low, does nobody actually remember the 70s, 80s and early 90s anymore???) then the ECB will adopt a tight stance so we can easily foresee a scenario like this:

persistent inflation at 3.5%
neutral rate therefore 6%
Tight stance required to fight inflation, ECB rate of up to 8%

Is it just me, or do bull arguments seem very flimsy and not really based on any actual economic knowledge or knowledge of global trends, or how various institutions actually work, just pure sentiment?


----------



## tententwenty

Sidewinder said:


> Is it just me, or do bull arguments seem very flimsy and not really based on any actual economic knowledge or knowledge of global trends, or how various institutions actually work, just pure sentiment?


Could it be because there aren't any valid bull arguments?  Actually fair play to any bulls who have the chutzpah to step into this bear's den of a thread, in all honesty I'm open to both sides of the argument; its just that I've yet to hear good reasons to be bullish about the market from anyone. If anyone has any, please let us know...


----------



## room305

Sidewinder said:


> Is it just me, or do bull arguments seem very flimsy and not really based on any actual economic knowledge or knowledge of global trends, or how various institutions actually work, just pure sentiment?



Actually I haven't heard a bull argument yet that hasn't boiled down to "Ah sure, the government would never let that happen".

It seems that government endorsement of the housing bubble has led people to believe they have more power than they actually have. As happened with the Eircom fiasco, so too will happen on a grander scale with the housing bubble.

Since next year is likely to bring a downturn in property globally, I imagine Bertie and the Bumblers will blame this for any downturn in Irish property.


----------



## whathome

Sidewinder said:


> Is it just me, or do bull arguments seem very flimsy and not really based on any actual economic knowledge or knowledge of global trends, or how various institutions actually work, just pure sentiment?


 
It's not just you, none of the bull arguments stack up. The most common brainless argument is: "If I'd listened/not listened to that in 1999 blah blah blah blah".


----------



## Remix

gearoidmm said:


> As a lifelong IT reader, this kind of EA puke that's turning up all too often within the pages is starting to turn me off it. If it wasn't for Tom Humphries...


 

Let us count just a couple of ways, with regards to property commercial interests, in which the IT appears to have compromised it's own stated purpose:

_"to publish an independent newspaper primarily concerned with serious issues for the benefit of the community throughout the whole of Ireland free from any form of personal or of party political, commercial, religious or other sectional control"._

1. Purchased myhome.ie for 50mil+. For this investment to be successful one can imagine that they must maintain a sweet and ongoing business relationship with the countries largest estate agents.

2. David Went, Chief Executive of one of Ireland's largest mortgage providers sits on the Irish Times Trust *and* the Irish Times Board.

[broken link removed]


----------



## MadPad

tententwenty said:


> Being one of the richest countries in the world, apparently, and still not being a net EU contributor will not have endeared us to Brussels any. They won't be doing us any favours to pull our fat out of the fire this time around, EU member or not.


 
Nor should they, nor should the taxpayer subsidise any loss on "investments", be that directly or with any more tax breaks than what currently exists. Or the taxpayer must not be forced to bail out the banks and credit unions who have loaned people more than they can pay back, often with a nod and a wink. Let them shave their margins if rates rise through 2007, or let them be bought out.... Screw them, they changed the rules on salary multiples...

With a general election coming, if the posts here about increasing inventory are accurate, there will be pressure to increase mortgage tax relief, abolish VAT on building materials, abolish stamp duty, abolish PRSI for construction workers, buy unsold or half completed houses as public housing, anything to keep the party going. The only one I would even consider is buying public housing provided it could be demonstrated the taxpayer was getting them "at cost" and hence not getting screwed.

I think in general Irish property is overvalued, by something like 30% to 40%. A very rough figure which I cant really defend, its just my opinion.

But over the last 10 years every threat of a correction has been faced down. Mostly by luck and events outside of our control rather than good governance. Unfortunately, the threats were then promptly airbrushed from history by vested interests and the party went on. So who knows what will happen... , we might roll another 6 again.... or we might roll a 1.... 

Lets see what happens...


----------



## whathome

Out of 11 auction results listed on myhome so far today (Sep 27th) ....

All 11 were withdrawn, only 2 selling after auction:

[broken link removed]


----------



## random2006

whathome said:


> Out of 11 auction results listed on myhome so far today (Sep 27th) ....
> 
> All 11 were withdrawn, only 2 selling after auction:
> 
> [broken link removed]



Maybe its just me not understanding the finer details of auctioning property, but if your house is quoted at, say €1.9 million and withdrawn, presumably thats because nobody would buy it, why would you then requote it at €1.95 million?
B


----------



## liteweight

I noticed this too. Although every house was withdrawn they all upped the price. Obviously they still have confidence in the market.


----------



## whathome

random2006 said:


> Maybe its just me not understanding the finer details of auctioning property, but if your house is quoted at, say €1.9 million and withdrawn, presumably thats because nobody would buy it, why would you then requote it at €1.95 million?
> B


 
The initial quote is the AMV (Advised Minimum Value) which the vendor would usually not accept but after a property fails at auction they move to private treaty where the quoted price is closer to what the vendor would accept.  

AMV's are supposed to be within 20% of the reserve price - which is the price that a vendor would sell at.


----------



## tententwenty

MadPad said:


> if the posts here about increasing inventory are accurate


Well I'll put it to you like this; I went through Gort today, and you'd think there was already an election on with the amount of real estate agent signs festooning the place. And not just one or two, but 5 or 6 seperate agencies for each house. You couldn't go sixty feet without another "for sale" sign hanging up there. Anecdotal, I know, but true nonetheless. So either inventory is rising sharply or the town of Gort is looking to emigrate.


----------



## whathome

liteweight said:


> I noticed this too. Although every house was withdrawn they all upped the price. Obviously they still have confidence in the market.


 
This is normal on withdrawals.  AMV is always set well below vendor expectation so when it fails and moves to private treaty they have to quote something more realistic.

Not looking good for the market at all based on today's results.


----------



## random2006

whathome said:


> The initial quote is the AMV (Advised Minimum Value) which the vendor would usually not accept but after a property fails at auction they move to private treaty where the quoted price is closer to what the vendor would accept.
> 
> AMV's are supposed to be within 20% of the reserve price - which is the price that a vendor would sell at.



Cheers!


----------



## whathome

When you compare recent (this week and last) auction results:
[broken link removed]

to the archived results - scroll down to April & May:
[broken link removed]

...you can see that the drop in auction performance is huge.


----------



## liteweight

whathome said:


> This is normal on withdrawals.  AMV is always set well below vendor expectation so when it fails and moves to private treaty they have to quote something more realistic.
> 
> Not looking good for the market at all based on today's results.



Well I know it's normally 'normal', but if people, in general, believed the Evening Herald headline, then surely they would leave the house price at the AMV. Anyway I thought the AMV is what the Estate Agent thinks the house is worth?  I know the 'guide prices' were a joke but AMV was supposed to be a little more realistic. Are you saying that the vendors think their new higher price is more realistic? Surely that would imply confidence in a sale?


----------



## whathome

liteweight said:


> Anyway I thought the AMV is what the Estate Agent thinks the house is worth?


 
No - it's supposed to be the Advised Minimum Value, not what the agent thinks the property is worth.



liteweight said:


> I know the 'guide prices' were a joke but AMV was supposed to be a little more realistic. Are you saying that the vendors think their new higher price is more realistic? Surely that would imply confidence in a sale?


 
From experience, I know that AMV's are no more accurate than the old guide prices. I've been to auctions where the reserve was more than 25% higher than AMV.


----------



## walk2dewater

MadPad said:


> Yeah, but if higher rates hurt nearly everyone except yourself,


 
Who's "everyone".  LOL..  The 4.3m property maniacs here that make up less than 1% of the eurozone economy?!



MadPad said:


> Yeah, youre right, no guarantee ECB wont raise rates to 10% but they dont want to.


 
Again sez who?  You've heard that rates can't go above XYZ a thousand times so it must be true?  If REALLY you want to know what the ECB "wants to do" I suggest you go here www.ecb.int.  The ECB wants something called "price stability" and my money is firmly on them getting just that, regardless of collateral damage to the Irish property pyramid.


----------



## MadPad

walk2dewater said:


> Who's "everyone". LOL.. The 4.3m property maniacs here that make up less than 1% of the eurozone economy?!
> 
> 
> 
> 
> Again sez who? You've heard that rates can't go above XYZ a thousand times so it must be true? If REALLY you want to know what the ECB "wants to do" I suggest you go here www.ecb.int. The ECB wants something called "price stability" and my money is firmly on them getting just that, regardless of collateral damage to the Irish property pyramid.


 
I think that its in all our interest that employment stays high, that workers stay at work and pay taxes and so on... Thats "everyone", not a great choice of words, but on the whole, I think even people who have yet to get on the property ladder would be better off renting in the Ireland of 2006 than being a property owner in the Ireland of 1986, with the country bankrupt 20% unemployment etc etc etc.

Ah yeah, it doesnt need to go anywhere near 10% to kill irish property. 5% will do that, probably even 4%. But short of inflation hitting 7 or 8% in the eurozone, 10% interest rates wont happen...

I'm well aware they are focussed on fighting inflation and on having price stability, and oddly enough, Marys Section 23 in Carrick doesnt get a mention at the ECB meetings  . Now stuff can happen to cause inflation, the Chinese could discover trade unions, oil can go back up, the french can riot, loads of stuff.. And the ECB would raise rates to cope with that... At some stage maybe this will happen but I dont think that level of inflation is likely in the immediate future. With the influx of eastern europeans, due to start hitting other countries soon, this will probably moderate wage inflation in those countries... 

What do you think the ECB interest rate will be in December 2007? 

The consensus seems to be probably 4%, maybe even it starts back down towards 3%? Unless there is a major suprise on the cards, it'll be nowhere near 10%.... 10% interest rates would kill the german and french economies, thats why they wont do it. And they are big enough to do what they want.

Fully agree with you on them not caring about the paddies buying everything... They have warned us repeatedly, what more can they do... 

Listen, if rates hit 10%, we are back to 1997/98 prices... No guarantee they wont but lets not get carried away... A 500k interest only mortgage would cost 50k a year  I've been a property bear for years but even I cant see that happening in the next few years


----------



## Doris

MadPad said:


> I think that its in all our interest that employment stays high, that workers stay at work and pay taxes and so on... Thats "everyone", not a great choice of words, but on the whole, I think even people who have yet to get on the property ladder would be better off renting in the Ireland of 2006 than being a property owner in the Ireland of 1986, with the country bankrupt 20% unemployment etc etc etc.
> 
> Ah yeah, it doesnt need to go anywhere near 10% to kill irish property. 5% will do that, probably even 4%. But short of inflation hitting 7 or 8% in the eurozone, 10% interest rates wont happen...
> 
> I'm well aware they are focussed on fighting inflation and on having price stability, and oddly enough, Marys Section 23 in Carrick doesnt get a mention at the ECB meetings  . Now stuff can happen to cause inflation, the Chinese could discover trade unions, oil can go back up, the french can riot, loads of stuff.. And the ECB would raise rates to cope with that... At some stage maybe this will happen but I dont think that level of inflation is likely in the immediate future. With the influx of eastern europeans, due to start hitting other countries soon, this will probably moderate wage inflation in those countries...
> 
> What do you think the ECB interest rate will be in December 2007?
> 
> The consensus seems to be probably 4%, maybe even it starts back down towards 3%? Unless there is a major suprise on the cards, it'll be nowhere near 10%.... 10% interest rates would kill the german and french economies, thats why they wont do it. And they are big enough to do what they want.
> 
> Fully agree with you on them not caring about the paddies buying everything... They have warned us repeatedly, what more can they do...
> 
> Listen, if rates hit 10%, we are back to 1997/98 prices... No guarantee they wont but lets not get carried away... A 500k interest only mortgage would cost 50k a year  I've been a property bear for years but even I cant see that happening in the next few years


----------



## Doris

How common are interest only mortgages in the Republic, in the United Kingdom they are the reserve of those with recession proof high incomes


----------



## hmmm

MadPad said:


> Listen, if rates hit 10%, we are back to 1997/98 prices... No guarantee they wont but lets not get carried away... A 500k interest only mortgage would cost 50k a year  I've been a property bear for years but even I cant see that happening in the next few years



Again, you're just getting sucked into the "ah sure they couldn't do something like that, think of the impact on us" thinking that the bulls have. If the ECB need to ever kill inflation in Germany and France with 10% rates, they will have no hesitation in doing so. Particularly those on interest only mortgages are in real trouble if (err when) we enter negative equity territory and if interest rates rise.


----------



## liteweight

I'd imagine they're very common. Property prices are so high that I can't see people, wishing to purchase at the high end of the market, realistically being able to afford it otherwise. A few months ago the latest 'brag' was a 1M mortgage!!


----------



## Neffa

Doris said:


> How common are interest only mortgages in the Republic, in the United Kingdom they are the reserve of those with recession proof high incomes


 
Doris, having lived and applied for mortgages in both areas, I have to say that's simply not true.

Practically anyone (not just investors) can get an IO mortgage in the UK if you say it is backed by ISA's, pensions etc. Then no-one actually bothers to check if you're actually paying into the plan. 

IO mortgages are relatively harder to get in Ireland due to the pension arrangements being different (personal pensions less common, more people in company schemes). Mostly they are for investors with time-limits applied for IO mortgages for PPR's.


----------



## MadPad

hmmm said:


> Again, you're just getting sucked into the "ah sure they couldn't do something like that, think of the impact on us" thinking that the bulls have. If the ECB need to ever kill inflation in Germany and France with 10% rates, they will have no hesitation in doing so. Particularly those on interest only mortgages are in real trouble if (err when) we enter negative equity territory and if interest rates rise.


 
Maybe I'm not phrasing my posts well enough but trust me, I do not for one second think the ECB thinks of Irelands greedy little "BTL property millionaires", and genuinely hard pressed young FTB's when setting interest rates...

If they ever need to do go to 10% or beyond they will. But right now, I cant see the need this year, next year or in the forseeable future. Again i could be completely wrong on this, if you have any useful links as to what the projected inflation rates are for the main ECB member countries, I would genuinely like to see them. Im not trolling on this... just looking for info... Whats the 10 year fixed rate at...

Maybe the post sounds bullish but guys sometimes this forum reads like a support group for bears or people who are wishing for a crash


----------



## Doris

I wonder if IO mortgages will have an impact.  You would think if you were clever enough to qualify that you wouldn't be stupid enough to expose yourself.  But  I know there is a post poverty need in Ireland to be seen to be rich.  I note that the desire for houses is driven by a desire so strong that it must be neurotic in root. The collective yearning for 'the big house' seems pervasive, a desire this strong probably is owned by an older generation as is merely being expressed by a younger one.


----------



## StoppedClock

MadPad said:


> Maybe I'm not phrasing my posts well enough but trust me, I do not for one second think the ECB thinks of Irelands greedy little "BTL property millionaires", and genuinely hard pressed young FTB's when setting interest rates...
> 
> If they ever need to do go to 10% or beyond they will. But right now, I cant see the need this year, next year or in the forseeable future. Again i could be completely wrong on this, if you have any useful links as to what the projected inflation rates are for the main ECB member countries, I would genuinely like to see them. Im not trolling on this... just looking for info... Whats the 10 year fixed rate at...
> 
> Maybe the post sounds bullish but guys sometimes this forum reads like a support group for bears or people who are wishing for a crash


 
Madpad agreeing with this post but not with last, I do not believe 10% interest rates would hurt the German recovery as I have said before (and therefore by the law of repition it must be true) Germans are savers not borrowers.  Their infrastructure is largely already in place and hence their economic growth is based on the strightforward sustainable 2% of relaistic productivity gains not hyped up figures based on consumer spending or trying to catch up after years of underinvestment.

Since low interest rates have made bugger all difference in stimulating their economy we should not overestimate the impact of higher in surpressing it.  

PS. Exact opposit is true of Ireland

PPS do not believe interet rates will be 10% in the next 10years this was just arguing a point


----------



## beattie

MadPad said:


> Maybe the post sounds bullish but guys sometimes this forum reads like a support group for bears or people who are wishing for a crash


 
If the authorities had done their duty and tried to introduce some order into this bubble when it was in its infancy (i.e. not rolled back Bacon) the crash which will happen would never have needed to materialise. I know people who are borrowed up to their necks, where the next rate rises have not being factored in and where there is little chance of major salary increases in the next few years. They are the ones who will feel the pinch in the years to come but they won't get a lookin in the FF tent at the Galway races....


----------



## walk2dewater

MadPad said:


> IWhat do you think the ECB interest rate will be in December 2007?


 
ECB repo will be 5.5% by Dec 07. Was pegging it 6-7% up until a few weeks ago. My view has been downgraded in recent weeks because of the accelerating implosion in the US housing market (can't happen here of course-- it's different here). US recession coupled with groaning noises from France and Italy will slow down the hawks in Frankfurt but eurozone inflation metrics will stay stubbornly above target, hence no end in hikes. The ECB made almost an equal number of 0.5% changes as 0.25% changes on the way down to the 2% level and I don't see why they won't do it on the way up.

The ECB is the easiest to forecast, they've even explicitly said they target asset prices as well as M3. READ THEIR POLICY PAPERS.

Who knows what the Fed will do, I am watching this one with morbid fascination. I'm betting on one long drawn out pause, followed by the Fed being put out to pasture as international US$ bondholders stealthy but effectively take over setting US borrowing costs.

BoE? Well the £ is waaaayyy overvalued. A Soros-type will probably make another billion shorting the £ again. Eventually BoE will succumb to defending the £ and stemming imported inflation with higher rates. Double digit UK rates a la 1990 cannot be ruled out.


----------



## bearishbull

walk2dewater said:


> ECB repo will be 5.5% by Dec 07. Was pegging it 6-7% up until a few weeks ago. My view has been downgraded in recent weeks because of the accelerating implosion in the US housing market (can't happen here of course-- it's different here). Weakening US situation coupled with groaning noises from France and Italy will slow down the hawks in Frankfurt but eurozone inflation metrics will stay stubbornly above target, hence no end in hikes. The ECB made almost an equal number of 0.5% changes as 0.25% changes on the way down to the 2% level and I don't see why they won't do it on the way up.
> 
> The ECB is the easiest to forecast, they've even explicitly said they target asset prices as well as M3. READ THEIR POLICY PAPERS.
> 
> Who knows what the Fed will do, I am watching this one with morbid fascination. I'm betting on one long drawn out pause, followed by the Fed being put out to pasture as international US$ bondholders stealthy but effectively take over setting US borrowing costs.
> 
> BoE? Well the £ is waaaayyy overvalued. A Soros-type will probably make another billion shorting the £ again. Eventually BoE will succumb to defending the £ and stemming imported inflation with higher rates. Double digit UK rates a la 1990 cannot be ruled out.


W2dw can we keep interest rate speculation to the relevent thread. If you really beleived rates would be that high when dont you put a large chunk of your assets into it?? I think its only fair to assume rates will be what the market are predicting at this stage and idle speculation however inpspired or genius can be kept on interest rate speculation thread. Currently 10 year rates are forecast at less than 4% and have fallen in recent weeks. 
On another note, shall we see many more properties withdrawn at auction in tomorrows papers?


----------



## MadPad

StoppedClock said:


> low interest rates have made bugger all difference in stimulating their economy we should not overestimate the impact of higher in surpressing it.


good point


----------



## tententwenty

bearishbull said:


> W2dw can we keep interest rate speculation to the relevent thread.


I'd say interest rates will have a major effect on public sentiment in the housing market, in fairness.


----------



## Neffa

walk2dewater said:


> ECB repo will be 5.5% by Dec 07. Was pegging it 6-7% up until a few weeks ago. My view has been downgraded in recent weeks because of the accelerating implosion in the US housing market (can't happen here of course-- it's different here). US recession coupled with groaning noises from France and Italy will slow down the hawks in Frankfurt but eurozone inflation metrics will stay stubbornly above target, hence no end in hikes. The ECB made almost an equal number of 0.5% changes as 0.25% changes on the way down to the 2% level and I don't see why they won't do it on the way up.
> 
> The ECB is the easiest to forecast, they've even explicitly said they target asset prices as well as M3. READ THEIR POLICY PAPERS.


 
5.5% (implying mortgages at 6.5%+) would create carnage in the Irish property market. 

Do you really think inflationary pressure is that strong in the Eurozone that the ECB will react that strongly? I've always thought that a US recession would tend to dampen inflationary pressures in the export-oriented European economies (e.g. Germany) so that they would not reach as high as 5.5%. I would have thought 4.0% end of 2007.


----------



## solatic

Neffa said:


> 5.5% (implying mortgages at 6.5%+) would create carnage in the Irish property market.


What's so impossible about 6% rates? Canada, yesterday:







And yet Vancouver and Calgary are still in double-digit growth. I'm not saying that would be the case in Dublin, but people are talking like a 2% increase in the ECB's base rate would signal the end of the world. It's not exactly a doomsday scenario for 90% of europe, and especially not the net contributors.


----------



## liteweight

Neffa said:


> IO mortgages are relatively harder to get in Ireland due to the pension arrangements being different (personal pensions less common, more people in company schemes). Mostly they are for investors with time-limits applied for IO mortgages for PPR's.



It's possible to get an interest only mortgage in Ireland for an indefinite period on one's PPR. I know a number of people who have done this and they have never been asked about their pensions. It's simply based on the value of their PPR. Interest only mortgages are no longer only for investors. A number of financial institutions offer them, for a couple of years, at the start of the mortgage also.


----------



## beattie

liteweight said:


> It's possible to get an interest only mortgage in Ireland for an indefinite period on one's PPR. I know a number of people who have done this and they have never been asked about their pensions. It's simply based on the value of their PPR. Interest only mortgages are no longer only for investors. A number of financial institutions offer them, for a couple of years, at the start of the mortgage also.


 
Yes I can second that, I know of someone who took one out as they could not afford their house otherwise, but that was when the ECB was at 2% and not heading for 3.5% as it is now so their plan of switching went out the window pretty quickly.


----------



## Remix

Irish job losses in September to exceed 2,000.

finfacts


----------



## ButtermilkJa

bearishbull said:


> ...
> On another note, shall we see many more properties withdrawn at auction in tomorrows papers?


Spot on... 
Today's property headline... "Houses fail at auction. Property market gets real."

[broken link removed]


----------



## whathome

ButtermilkJa said:


> [broken link removed]


 
....very interesting, surprised by some of the IT comment:

*70% unsold in washout week for auctions*

"The reality is that the market has run out of steam, after record gains in house prices in the first quarter of 2006"

"Sellers will now be under pressure to reduce prices if they are anxious to offload their properties before Christmas. With such a vast choice available, buyers will be able to bargain down, rather than bid up for the home they want."

[broken link removed]


----------



## whathome

Another article in Today's Irish Times:

*A slower market will soon test agents' sales skills*

[broken link removed]

"While predictions of a slowdown in the market continue - and there's evidence on the ground that it might be happening - it looks as if Irish estate agents might have to brush up on their selling and negotiating skills"

"The market is swimming with second-hand homes"


----------



## Duplex

ButtermilkJa said:


> Spot on...
> Today's property headline... "Houses fail at auction. Property market gets real."
> 
> [broken link removed]


 

The cognitive dissonance is palpable in that piece.  The agents are scrambling for credible platitudes which don't touch on the truth; i.e. it was a speculative bubble.  Negative equity is probably a reality for many buyers who entered the market in the early months of this year.


----------



## plaudit

So if I bought in the Spring for €1.25million what should I do if the house is only worth €1m now?


----------



## bren2002

> Some agents are blaming the failure to sell at auction on a greedy vendor syndrome, though in some cases they've created the problem themselves by valuing properties on the high side to get ahead of their competitors.


[broken link removed]

I find this difficult to swallow.  The agents are the ones advising on the prices to the vendors.


----------



## beattie

plaudit said:


> So if I bought in the Spring for €1.25million what should I do if the house is only worth €1m now?


 
What can you do. Maybe Mr McDowell's proposal will save them but I would doubt it. Just pray that it doesn't go down to 3/4 of a million


----------



## walk2dewater

bearishbull said:


> W2dw can we keep interest rate speculation to the relevent thread. ?


Agreed.




bearishbull said:


> If you really beleived rates would be that high when dont you put a large chunk of your assets into it?? ?


The only thing I “believe” is my ability to be more often right than wrong in my investment calls.  If euro int rates and xch rates don’t go the way I expect, yes I will lose money.  Risk comes with the territory.




bearishbull said:


> Currently 10 year rates are forecast at less than 4% and have fallen in recent weeks?


Where and whats the track record of the source?

All Im saying is wake up and do your owning thinking!  Take a hard look at who's (successfully it seems) ramming down our throats day in day out the view that interest rates can't get higher.  Then take a look at what the ECB says, and then come up with an honest, reasoned opinion.


----------



## howstrange

whathome said:


> ....very interesting, surprised by some of the IT comment:
> 
> *70% unsold in washout week for auctions*
> 
> "The reality is that the market has run out of steam, after record gains in house prices in the first quarter of 2006"
> 
> "Sellers will now be under pressure to reduce prices if they are anxious to offload their properties before Christmas. With such a vast choice available, buyers will be able to bargain down, rather than bid up for the home they want."
> 
> [broken link removed]



Is it possible that a lot of potential home buyers are hoping for some kind of relief in stamp duty in the December budget and are holding out until maybe the new year before they decide to buy?? Cos if there is a chance of a change in stamp duty bands then you be mad to buy now unless you really had to. It may not be just to do with sentiment and interest rates. Am i correct? If thats the case things might pick up again early next year. I am a bear by the way. Was just a thought.


----------



## walk2dewater

Duplex said:


> The cognitive dissonance is palpable in that piece. The agents are scrambling for credible platitudes which don't touch on the truth; i.e. it was a speculative bubble. Negative equity is probably a reality for many buyers who entered the market in the early months of this year.


 
Two things are leading me to think Game Over here:
1. The tell-tale build up in inventory, ok it's all anecdotal stuff, but I'll accept it.
2. Sentiment is being stabbed in the heart. cf. Herald's headline earlier this week. And it won't be the last.

So I'd say big price downdraft b/n now and Xmas followed by a bounce in the Spring (ECB pauses or something)?

I do have to admit being surprised by how quickly the market turned in the US. Sentiment there has gone very sour very quickly; switch from greed to fear was almost instantaneous. Now Im thinking why not here?


----------



## ajapale

bearishbull said:


> W2dw can we keep interest rate speculation to the relevent thread.



Interest rate speculation as it relates to "Current public sentiment towards the housing market" is very much "on topic".


----------



## Afuera

howstrange said:


> Is it possible that a lot of potential home buyers are hoping for some kind of relief in stamp duty in the December budget and are holding out until maybe the new year before they decide to buy?? Cos if there is a chance of a change in stamp duty bands then you be mad to buy now unless you really had to. It may not be just to do with sentiment and interest rates. Am i correct? If thats the case things might pick up again early next year. I am a bear by the way. Was just a thought.


 
I think that this certainly could be a factor. Michael McDowell isn't exactly known for his skill of thinking things through fully before blurting them out. Announcing possible changes to stamp duty might make some potential buyers wait awhile longer and encourage the current slowdown.

I don't know about things picking up next year though... By the time the budget comes out next December interest rates are almost certainly going to be higher, by .5 percent at least. This is going to further erode affordability and less and less FTBers will be able to buy in at last years prices (assuming of course that wages don't spike up by a huge precentage to compensate). This will make it hard for trader uppers to get rid of their old properties and affect other parts throughout the market.

The only way it would realistically pick up again would be if the ECB stopped raising rates or even began to drop them. I don't think we have a chance of seeing something like that happening until well into next year (if even then).


----------



## Jister

McDowell is not doing the budget, Cowen is. My understanding is that stamp duty changes will be in the manifesto for the next election and IF the PD's enter coalition it will be on the agenda for the programme for government negotiations going forward.

The budget for this year must be nearly in place now, so unless there is a massive crash over the next 6-8 weeks the budget won't include anything to prop up the falling market. Most of the stamp duty is already in the coffers for the year, so by the time alarm bells start ringing when the money stops pouring in the budget will have passed.


----------



## CelloPoint

MadPad said:


> Nor should they, nor should the taxpayer subsidise any loss on "investments", be that directly or with any more tax breaks than what currently exists. Or the taxpayer must not be forced to bail out the banks and credit unions who have loaned people more than they can pay back, often with a nod and a wink. Let them shave their margins if rates rise through 2007, or let them be bought out.... Screw them, they changed the rules on salary multiples...
> 
> With a general election coming, if the posts here about increasing inventory are accurate, there will be pressure to increase mortgage tax relief, abolish VAT on building materials, abolish stamp duty, abolish PRSI for construction workers, *buy unsold or half completed houses as public housing*, anything to keep the party going. The only one I would even consider is buying public housing provided it could be demonstrated the taxpayer was getting them "at cost" and hence not getting screwed.
> 
> ...


I am nodding away with you here.

On affordable housing:

For someone in a position of power (and on the lookout for a bit of cream-skimming every now and then), buying "unsold or half completed houses as public housing" is the obvious solution. They've no alternative but to go down this road if the party is to keep going (indeed it would be a beneficial road for a select group of individuals).

Shakespeare's _Macbeth_:
"I am in blood
Stepped so far that, should I wade no more,
Returning were as tedious as go o'er"


----------



## phoenix_n

walk2dewater said:


> I do have to admit being surprised by how quickly the market turned in the US. Sentiment there has gone very sour very quickly; switch from greed to fear was almost instantaneous. Now Im thinking why not here?


 
Nah it just appears to you now that it turned very quickly, but thats because its now on your radar more. Its happened here but its just not on everyones radar yet. If you are trying to sell a house say in Lucan then its more apparent or if your reading this thread it also is so. 

The bubble has burst here. Just takes a while for everyone to find out.


----------



## Bedsit

Here are two houses in the same estate in Maynooth selling for different prices. Arguably one has a side extension, but is it really worth an extra 67K?

http://www.daft.ie/searchsale.daft?search=1&s[cc_id]=ct1&s[a_id]=2818&s[mnp]=&s[mxp]=&s[bd_no]=&s[search_type]=sale&s[refreshmap]=1&offset=30&limit=10&search_type=sale&id=127486

http://www.daft.ie/searchsale.daft?search=1&s[cc_id]=ct1&s[a_id]=2818&s[mnp]=&s[mxp]=&s[bd_no]=&s[search_type]=sale&s[refreshmap]=1&offset=10&limit=10&search_type=sale&id=138948


----------



## Howitzer

MadPad said:


> With a general election coming, if the posts here about increasing inventory are accurate, there will be pressure to increase mortgage tax relief, abolish VAT on building materials, abolish stamp duty, abolish PRSI for construction workers, buy unsold or half completed houses as public housing, anything to keep the party going. The only one I would even consider is buying public housing provided it could be demonstrated the taxpayer was getting them "at cost" and hence not getting screwed.


 


CelloPoint said:


> On affordable housing:
> 
> For someone in a position of power (and on the lookout for a bit of cream-skimming every now and then), buying "unsold or half completed houses as public housing" is the obvious solution. They've no alternative but to go down this road if the party is to keep going (indeed it would be a beneficial road for a select group of individuals).


 
Should be of interest so:

State losses cash windfall in swop for affordable houses

http://www.askaboutmoney.com/showthread.php?t=36615


----------



## ncs

CelloPoint said:


> ...For someone in a position of power (and on the lookout for a bit of cream-skimming every now and then), buying "unsold or half completed houses as public housing" is the obvious solution. They've no alternative but to go down this road if the party is to keep going (indeed it would be a beneficial road for a select group of individuals)....


 
And on another note, I wonder if there'll be the same amount of post-crash bleatings and demand for compensation from those "mis-sold" interest-only loans as there was for the endowment policies of yesteryear. "They told us property could only go up... " etc.


----------



## CelloPoint

howstrange said:


> Is it possible that a lot of potential home buyers are hoping for some kind of relief in stamp duty in the December budget and are holding out until maybe the new year before they decide to buy?? Cos if there is a chance of a change in stamp duty bands then you be mad to buy now unless you really had to. It may not be just to do with sentiment and interest rates. Am i correct? If thats the case things might pick up again early next year. I am a bear by the way. Was just a thought.



Aboloshing stamp duty can't be done: you'd have far too many pissed off voters (and their friends/families) who bought in recent years feeling hard done by.


----------



## pvtighe

CelloPoint said:


> Aboloshing stamp duty can't be done: you'd have far too many pissed off voters (and their friends/families) who bought in recent years feeling hard done by.


 

It was abolished for FTB on second hand homes upto a certain value around 2001/2002.  Don't see why it can't happen again although I'd be surprised as I believe the gov will be afraid to touch it for fear of being blamed for what ever way the market goes, which is looking like down at the moment!


----------



## soma

I'm going to Taser the next person who doesn't use a Daft short-code when posting a link..


----------



## arbus

I noticed in Bray several cases when houses were sold for less than asking price.
The most recent example - 
[broken link removed]=
the initial asking price was 435 k. In a few weeks it became 410k. Few weeks later (the one u see on the link) it was 395k. No single offer!!!
Friend of mine was viewing it from the beggining thats why I know how prices were changing.
He proposed the price 381k not to pay an additional 3% of stamp duty and they agreed!!! So the price dropeed from 435k to 381 = 54 k
Yet he decided not to buy it 
Another example can be 
[broken link removed]=
Initial price was 415 by Douglas Newman Good, no offers. Now u can see the price 395 and as far as I know there are no offers. BTW they changed the agency since then.
Altogether, there are many houses on the market (Bray) for 1-2 months without offers from buyers. That was never the case before. 
As somebody else in that thread noticed - agents are calling the day after viewing and asking what turned u off the house. Again - never the case before.

I am not sure that the prices will go down and houses market will collapse very soon, but the fact that prices will not be growing (or growing very slow) is almost certain.
And that effectivle means that investors will stop investing into property that much, which will reduce the demand by 20-40%. 
So, in long term perspectives (5-10 years) prices will go down for sure.


----------



## Remix

bren2002 said:


> [broken link removed]
> 
> I find this difficult to swallow. The agents are the ones advising on the prices to the vendors.


 

They can point fingers and blame each other all they like but the reality check EAs and sellers are having now is that neither of them sets house prices - the buyers do !


----------



## delboy159

The fact reamins that the bubble is bursting.  You can't buy a house for 20% less then it cost 6 months ago - but you will soon.

Now - will Bertie allow a situation to arise where he has to knock on doors in April and face the question - 
"why have you messed up the housing market with all these price drops?"  Even he can't crocodile tear his way out of that one.

Whereas he can argue stamp duty changes "are to the benefit of first time buyers" till the cows come home!  Could be a surprsise or two in a give away budget......


----------



## walk2dewater

arbus said:


> I am not sure that the prices will go down and houses market will collapse very soon, but the fact that prices will not be growing (or growing very slow) is almost certain.
> And that effectivle means that investors will stop investing into property that much, which will reduce the demand by 20-40%.
> So, in long term perspectives (5-10 years) prices will go down for sure.


 
Prices are going up because prices are going up and everyone believes prices will continue to go up ad infinitum...

Ahem, or used to...


----------



## fatmanknows

I'm opening  a book on when Mr.Dunne (Sean) will start on his D4 Manhattan Style Developement - remember the one he paid €50m+ an acre for.

Current Odds -:

Never : No bets taken

Less than 1 year : 1000/1

1-3 years          :   900/1

3-5 years          :   800/1

5-10 years        :   750/1

10 to 20 years   :   100/1


----------



## liteweight

Well Mr. Dunne can afford to sit on his 'asset' and do nothing!!


----------



## Bedsit

liteweight said:


> Well Mr. Dunne can afford to sit on his 'asset' and do nothing!!



Would it be correct to assume that most of the money that he has invested is not his own. It has either been borrowed or is from investors. More than likely he has very few assets in his own name. So even if there was a crash and the value of his portfolio dropped, he could afford to just walk away and let the others take the hit.


----------



## walk2dewater

liteweight said:


> Well Mr. Dunne can afford to sit on his 'asset' and do nothing!!


 
Lots of us can afford to lose money, what's your point?


----------



## liteweight

walk2dewater said:


> Lots of us can afford to lose money, what's your point?



It was a joke, hence the , asset...ass....get it?


----------



## Duplex

fatmanknows said:


> I'm opening a book on when Mr.Dunne (Sean) will start on his D4 Manhattan Style Developement - remember the one he paid €50m+ an acre for.
> 
> Current Odds -:
> 
> Never : No bets taken
> 
> Less than 1 year : 1000/1
> 
> 1-3 years : 900/1
> 
> 3-5 years : 800/1
> 
> 5-10 years : 750/1
> 
> 10 to 20 years : 100/1


 
I think that the development only 'washed its face' at approx €1,000,000 per flat, and I think that AIB retain a lease on part of the site for the next 4 years.  I don't think he will be making to many off plan sales in the current climate.


----------



## Remix

The lending rush of the past few years could get real nasty real soon...



> Working couples in Dublin are spending just under €2,000-a-month or 37% of their incomes on
> repayments, an increase of €375 since December 2005.


 
unison


----------



## Debtwish

Throw in another 1% interest rate rise and that 37% rises to what? 50%?  

God help us.


----------



## Bedsit

Here is a link to the full article from the Irish Property Buyer Magazine:

[broken link removed]


----------



## CelloPoint

Debtwish said:


> Throw in another 1% interest rate rise and that 37% rises to what? 50%?
> 
> God help us.



AFAIC, there'll be no "us". I'm not sticking around to help pay for someone else's debt/stupidity!

On that 2k pm @ 37% statistic, this means (in my humble calculations) that:

2k a month = 24k a year
24k a year @ 37% of salary => salary of 65k net
salary of 65k net => salary of ~98k gross (give a little tax relief)

So:
A way, way *above* average earner can buy a house in a way *below* average housing estate.
or
A Way *above* average earning couple can buy a house in a way *below* average housing estate.

It's the young educated people (20-25) I feel sorry for - they were in no way the cause of this mad situation, yet they are expected to contribute to the lower rungs of the pyramid by enslaving themselves to a life of commuting and overtime. The 20-25 year olds are smart though - I don't think they're that stupid (although I have come across one or two who've bought in to the false dream).


----------



## Organ Donor

I'm still not so sure; Not meeting the asking price in my opinion is not such a big deal. Are the asking prices being set by the EA in the first place and if so then they are always gonna chance their arm. I think this may be just a reality check, maybe not a landslide but a gentle gradient. Looking at all the property  being "developed" at the mo, it would suggest the property will flow gently down to sensible prices. BTW i dont own property, I'm just interested.


----------



## Bedsit

CelloPoint said:


> A Way *above* average earning couple can buy a house in a way *below* average housing estate.



[broken link removed]


----------



## CelloPoint

Bedsit said:


> [broken link removed]



Living the "dream" eh? 2-bed flat in D15, traffic, tight belt and a property management company's bit%h. What a waste of youth.

But sure as long as they're happy, isn't that all that matters? I'd say a market correction would soon wipe that stupid smirk off their (and their parents') faces.

Lol!


----------



## Sidewinder

Organ Donor said:


> I'm still not so sure; Not meeting the asking price in my opinion is not such a big deal. Are the asking prices being set by the EA in the first place and if so then they are always gonna chance their arm. I think this may be just a reality check, maybe not a landslide but *a gentle gradient. Looking at all the property  being "developed" at the mo*, it would suggest the property will flow gently down to sensible prices. BTW i dont own property, I'm just interested.



Sheesh.

Supply. Demand.

Basic law of all economics. We have massive oversupply right now, even before all the under-construction estates get finished. Interest rates are rising, houses are unaffordable, and sentiment has collapsed, which means demand will fall.

Massive oversupply + greatly reduced demand = large fall in price.

Which bit of this is failing to get through to the populace at large?


----------



## phoenix_n

delboy159 said:


> Now - will Bertie allow a situation to arise where he has to knock on doors in April and face the question -
> "why have you messed up the housing market with all these price drops?" Even he can't crocodile tear his way out of that one.
> .


 
Can't blame anybody. Its akin to how a civil war breaks out (Iraq will be next) after every National Independence (be it forced or forced upon).

A housing bubble follows a economy recovery. And inevitably , it bursts.

C'est la vie !


----------



## Debtwish

Bedsit said:


> [broken link removed]


 


> With the demand for houses in the area very high, would the young couple be tempted to give up their home and walk away with a tidy profit? “We’ve no plans to move yet, we’d like to stay here and get settled. Both of us have been renting since we started in college seven years ago, *so we’re tired of giving away dead money and paying someone else’s mortgage.*”


 
So why not give even more "dead money" away in interest to your bank?  

Getting a mortgage IS RENTING money from the bank and each ECB rate rise means that your bank just puts the rent up.

Why don't people get this?


----------



## Sidewinder

Bedsit said:


> [broken link removed]



Dear God.

€400,000 in debt for the next 30 years (and with repayments at €1900 a month, I'm betting that's an IO loan). Probably, at their age, about 8 times _combined _salary?

That's just insane. How could anybody be so stupid? What is wrong with everyone these days?


----------



## somerset

Sidewinder said:


> Dear God.
> 
> €400,000 in debt for the next 30 years (and with repayments at €1900 a month, I'm betting that's an IO loan). Probably, at their age, about 8 times _combined _salary?
> 
> That's just insane. How could anybody be so stupid? What is wrong with everyone these days?


 

...is this magazine a pi#s take?


----------



## Bedsit

CelloPoint said:


> Living the "dream" eh? 2-bed flat in D15, traffic, tight belt and a property management company's bit%h. What a waste of youth.
> 
> But sure as long as they're happy, isn't that all that matters? I'd say a market correction would soon wipe that stupid smirk off their (and their parents') faces.
> 
> Lol!



I loved the following quote in the article:

"When we came up the second time, there was a queue of about ten people, but luckily the seller recognized us from before and gave us preference"

I hope I am never the recipient of such preferential treatment


----------



## room305

Bedsit said:


> [broken link removed]



They could have rented that exact same apartment for €1100 a month. No need to borrow from your parents, no need to put up €15k yourself, no property management fees and nearly an extra €10k in your back pocket.


----------



## plaudit

Bedsit said:


> [broken link removed]


 
Thats just sad. Suppose she has 2 kids in the next 5 years?


----------



## Glenbhoy

CelloPoint said:


> Living the "dream" eh? 2-bed flat in D15, traffic, tight belt and a property management company's bit%h. What a waste of youth.


I don't disagree about the waste of youth comment, but RCP is not in D15, it's probably D7, it is at least close to town, so in my opinion it's not that bad a long term investment compared to, well, a property that's actually in D15!


----------



## CelloPoint

Bedsit said:


> I loved the following quote in the article:
> 
> "When we came up the second time, there was a queue of about ten people, but luckily the seller recognized us from before and gave us preference"
> 
> I hope I am never the recipient of such preferential treatment



I didn't read the full article to be honest (it would just make me sick), but that quote has made me snigger out loud!

My mate who bought a similar 2-bed in north dublin was harping on about a similar "special deal" which he got from his mate who works in PTSB (I'll bet he was on commission too).


----------



## Debtwish

I think the article is one to print off and review in a few months time.


----------



## delboy159

CelloPoint said:


> But sure as long as they're happy, isn't that all that matters? I'd say a market correction would soon wipe that stupid smirk off their (and their parents') faces.
> 
> Lol!


 
It's really kind sentiment like that - at the expense of a young couple that are trying to set themselves up in life that tends to tarnish many of the logical arguements used by the bears.... we all know they look like they could be in a very dangerous place with house prices freezing (or falling) and IR going up, but takling pleasure in their potential problems isn't very becoming.

phoenix_n - I'm not saying that Bertie is to blame, I'm saying when he and his party members have to canvas for a general election in 8 months or so - a shakey or falling property market could ruin his election chances. I doubt the average Joe Voter will listen to "markets are cyclical and this is a natural and dare I say overdue correction that the market needs"....

Or Bertie could just do some dodgy stamp duty trick and get elected next May!!!!!


----------



## plaudit

room305 said:


> They could have rented that exact same apartment for €1100 a month. No need to borrow from your parents, no need to put up €15k yourself, no property management fees and nearly an extra €10k in your back pocket.


 
And invest the €10k wisely adding to it each year with another 10K. On top of the 15k upfront + 5K on furnishing and say 5K and 15k? stamp duty.


----------



## paddyd

Sidewinder said:


> Massive oversupply + greatly reduced demand = large fall in price.
> 
> Which bit of this is failing to get through to the populace at large?


 

aren't 'massive oversupply' and 'greatly reduced demand' not the same thing 

massive, greatly, large fall, ... i have to say it all sounds a bit panicky.

every report available shows supply not meeting demand for another 18 months.
now, that said, I think there is definitely a panic of investor property coming on to the market this month, but not enough to facilitate a LARGE fall in price; just an adjustment. most average example show properties that were quoting 410, now quoting 395 (or whatever), a 3.5% adjustment. There is probably enough potential for a 10% adjustment in the irish market, before I would ever start to worry about a burst bubble. 

The sky isn't falling 'just' yet, but theres not much holding it up


----------



## room305

CelloPoint said:


> But sure as long as they're happy, isn't that all that matters? I'd say a market correction would soon wipe that stupid smirk off their (and their parents') faces.
> 
> Lol!



That's pretty harsh. Granted they have made a mistake which they will no doubt regret in future years. Why take so much pleasure in their future misery? They haven't hurt you any.


----------



## ivuernis

CelloPoint said:


> Living the "dream" eh? 2-bed flat in D15, traffic, tight belt and a property management company's bit%h. What a waste of youth.
> 
> But sure as long as they're happy, isn't that all that matters? I'd say a market correction would soon wipe that stupid smirk off their (and their parents') faces.
> 
> Lol!


 
Listen, it's PR on the part of the EA and the magazine in question. The couple probably got a few quid for doing it... why else would you want your private details like that splashed across a magazine. 

Yes, I'm sure a market correction would put a different complexion on their faces but rubbing your hands in glee at the prospect of it going pear-shaped for them isn't exactly endearing either.


----------



## plaudit

paddyd said:


> every report available shows supply not meeting demand for another 18 months (about 60,000+ units per year).


 
If demand is 60000 and supply is 90000 whats your definition of oversupply?


----------



## paddyd

plaudit said:


> If demand is 60000 and supply is 90000 whats your definition of oversupply?


 
The 60k was just my own estimate (just found on AIB report that its 85,000, 60k irish, plus 25k foreign nationals, renters and buyers) I'll just edit the example out of the post above, so the post makes more sense

Affordability has a lot to do with the market (understatement of the year, i know), as once a First time buyer cannot afford a 100% mortgage, over 40 years, there is no further the banks can go, and they cannot enter the market, not without some financial family help (or 12 close friends  ).


----------



## conor_mc

paddyd said:


> aren't 'massive oversupply' and 'greatly reduced demand' not the same thing


 
Nope. One is loadsa people trying to sell, the other is fewer people looking to buy.

As for those reports you mention, ask yourself who publishes them.... think about it now, what interest might a bank or an estate agent or the construction industry have in reinforcing positive sentiment?

Listen, if there was a shortage of _housing_ then rent would be much more expensive. It isn't because there isn't any shortage.

There is, or rather there has been, a shortage of housing _for sale_ because specuvestors have held onto properties for capital appreciation. These guys will let these go once they start costing (or stop making) them money, they wouldn't own them in the first place if they weren't in it for the money.


----------



## plaudit

paddyd said:


> mmm, either you've made up the 90k, or i've made up the 60k, so I'll just edit the example out above, so the post makes more sense
> 
> adding figures into posts always creates tit4tat


 
My understanding is that there will be 90000 completions this year.


----------



## ivuernis

Debtwish said:


> Looking at the picture, I hope he's not the father, for the kids sake.


 
Be thankful for your movie star looks then and keep your comments to the topic at hand.


----------



## plaudit

According to [broken link removed] article we had ~52K units built in the first 7 months of this year, so if that continues for the last 5 months of the year we will have 90K units of new stock in total.


----------



## whathome

RTE's reporting of the affordability index:

*Rate hikes hitting house buyers' affordability*

http://www.rte.ie/business/2006/0928/housing.html

"Assuming that two further rate hikes are expected next month and in December, the repayment situation is due to deteriorate further."


----------



## CelloPoint

delboy159 said:


> It's really kind sentiment like that - at the expense of a young couple that are trying to set themselves up in life that tends to tarnish many of the logical arguements used by the bears.... we all know they look like they could be in a very dangerous place with house prices freezing (or falling) and IR going up, but takling pleasure in their potential problems isn't very becoming.



You know what, we live in a democracay (banana republic it may be), where people are free to make their own decisions. There is no legislation for stupidity I'm afraid, and if someone makes a stupid decision, they've only themselves to blame - when you play ball, you can lose as well as win. And yes, I am free to laugh at stupidity. Of course I feel sorry for them, it's just their incredulous naiveity that warrants a chuckle.

Go and take the moral high ground if you want - you'd be just the kind of person who'd advocate using taxpayers' money to mitigate against their stupidity. Anyway, all this bickering is a side issue for me - we're probably witnessing a crash and I'm sitting in my armchair wanting to see it unfold, and the only way we can see it unfolding is by example. Call it perverse, I don't care. Bring on more examples.


----------



## exile

CelloPoint said:


> Of course I feel sorry for them, it's just their incredulous naiveity that warrants a chuckle.



All they did was buy an apartment.  They didn't say "Oh, we've bought here because the prices are going up up up, this time next year we'll be millionaires..!"


----------



## plaudit

exile said:


> All they did was buy an apartment. They didn't say "Oh, we've bought here because the prices are going up up up, this time next year we'll be millionaires..!"


 
At this stage I don't think people like this are actually buying anything, after 3 years how much of the capital will they have paid off?


----------



## Gwynston

CelloPoint said:


> Of course I feel sorry for them, it's just their incredulous naiveity that warrants a chuckle.



Well, they've done nothing different to the rest of the "must get on the ladder" lemmings anyway. The scary thing is not their naivety in the current market, but the magazine's apparent incompetence at making such sentiment their current cover article. Do they really think people still swallow all that crap?

It smacks of either desperation or scandalous myth-spreading. Maybe the article was a few weeks old before making it to cover?


----------



## delboy159

CelloPoint said:


> You know what, we live in a democracay (banana republic it may be), where people are free to make their own decisions. There is no legislation for stupidity I'm afraid, and if someone makes a stupid decision, they've only themselves to blame - when you play ball, you can lose as well as win. And yes, I am free to laugh at stupidity. Of course I feel sorry for them, it's just their incredulous naiveity that warrants a chuckle.
> 
> Go and take the moral high ground if you want - you'd be just the kind of person who'd advocate using taxpayers' money to mitigate against their stupidity. Anyway, all this bickering is a side issue for me - we're probablly witnessing a crash and I'm sitting in my armchair wanting to see it unfold, and the only way we can see it unfolding is by example. Call it perverse, I don't care. Bring on more examples.


 
Okay -
I'm taking the morale high ground by not laughing at someones potential misfortune......  I took such an act as common manners and normal human nature - not a morally pure act.  
Of course you are free to laugh at whatever you wish - but calling people "stupid" when all they were doing was attempting to create a solid future for themsleves and actually work hard and make a better life - is petty.  

By the way I'm not "just the kind of person" who advocates government intervention as I believe it has been negative in the past and will be negative in the future if Stamp duty is changed - but I'm not surprised that such a perverse (a term you used to describe yourself - I didn't) intellect would automatically assume that of me without any evidence. I only asked did people think Bertie would attempt to ensure his political survival by tinkering with Stamp - not that I agreed with the idea!

As you can see from posts that followed mine - your sick pleasure was not appreciated by a few posters, not just myself.....


----------



## CelloPoint

delboy159 said:


> Okay -
> I'm taking the morale high ground by not laughing at someones potential misfortune......  I took such an act as common manners and normal human nature - not a morally pure act.
> Of course you are free to laugh at whatever you wish - but calling people "stupid" when all they were doing was attempting to create a solid future for themsleves and actually work hard and make a better life - is petty.
> 
> By the way I'm not "just the kind of person" who advocates government intervention as I believe it has been negative in the past and will be negative in the future if Stamp duty is changed - but I'm not surprised that such a perverse (a term you used to describe yourself - I didn't) intellect would automatically assume that of me without any evidence. I only asked did people think Bertie would attempt to ensure his political survival by tinkering with Stamp - not that I agreed with the idea!
> 
> As you can see from posts that followed mine - your sick pleasure was not appreciated by a few posters, not just myself.....



I think a storm in a tea cup over a chuckle is brewing here. Let's not get side-tracked and just get on with the debate.

You have to say it is pretty "stupid" (not for want of a better word) to buy at 2k a month over 30 years when, as was pointed out by somebody, they could probably rent the same place for 1100, not pay legal bills, stamp duty, uncertain interest and still create a "solid future for themselves".


----------



## delboy159

Fair enough - shake hands - I don't want to be branded like the hurling men from my County (Laois).


----------



## hmmm

CelloPoint said:


> You have to say it is pretty "stupid" (not for want of a better word) to buy at 2k a month over 30 years when, as was pointed out by somebody, they could probably rent the same place for 1100, not pay legal bills, stamp duty, uncertain interest and still create a "solid future for themselves".



In a couple of years time, I bet people like that will be all over the airwaves demanding the taxpayer bails them out of their financial situation. What's more, I bet the government will cave.


----------



## whizzbang

room305 said:


> That's pretty harsh. Granted they have made a mistake which they will no doubt regret in future years. Why take so much pleasure in their future misery? They haven't hurt you any.



its a good point, there is a difference between warning people of risk and rubbing their face in it if they made a wrong decision.


----------



## whizzbang

paddyd said:


> Affordability has a lot to do with the market (understatement of the year, i know), as once a First time buyer cannot afford a 100% mortgage, over 40 years, there is no further the banks can go,



100 year mortgage anyone?


----------



## Duplex

conor_mc said:


> Nope. One is loadsa people trying to sell, the other is fewer people looking to buy.
> 
> As for those reports you mention, ask yourself who publishes them.... think about it now, what interest might a bank or an estate agent or the construction industry have in reinforcing positive sentiment?
> 
> Listen, if there was a shortage of _housing_ then rent would be much more expensive. It isn't because there isn't any shortage.
> 
> There is, or rather there has been, a shortage of housing _for sale_ because specuvestors have held onto properties for capital appreciation. These guys will let these go once they start costing (or stop making) them money, they wouldn't own them in the first place if they weren't in it for the money.


 
I agree. This is a speculative market its important to remember that. Many people bought because prices were going up when prices stop going up many people will stop buying, the market will revert to fundamentals.  But the fundamentals will be altered by the fact that the housing market has panned, and a US slowdown will be underway.


----------



## CelloPoint

delboy159 said:


> Fair enough - shake hands - I don't want to be branded like the hurling men from my County (Laois).



Ok, shake reciprocated. We'll put the branding irons away for another day, that is, for when the blame game starts.


----------



## paddyd

whizzbang said:


> 100 year mortgage anyone?


 

mmm, this is something they did in Japan back at the hight of it in the early-mid nineties (maybe they still do).....  a multi-generation mortgage: you buy the house, and your kids inherit your debt, and repay the remaining 20 or 30 years, or whatever it was originally set at


----------



## ncs

hmmm said:


> In a couple of years time, I bet people like that will be all over the airwaves demanding the taxpayer bails them out of their financial situation. What's more, I bet the government will cave.


 
Exactly my sentiment. I just don't think recent purchasers can have grasped the enormity of their commitment - it's one thing if rents were on a similar footing and there was therefore little choice - but what were/are they hoping for ? A soft landing, an interest rate plateau and everything ticks on as the Celtic Tiger pads through the next 30+ years ? 

Now if I were a lender, I wouldn't make a big deal of pointing this out to them... Nevertheless I can already imagine a scenario of compensation in the future, either from the banks or the taxes of those who DIDN'T take on such a monumentally irresponsible gamble.


----------



## whizzbang

plaudit said:


> At this stage I don't think people like this are actually buying anything, after 3 years how much of the capital will they have paid off?



Well if they bought today...

345K @ 5.23% for 30 years.

Paid off loan.
€15,445.85 

Interest paid (money rental fee ):
€52,984.03

the banks must love these guys.

http://www.jeacle.ie/mortgage/


----------



## whizzbang

paddyd said:


> mmm, this is something they did in Japan back at the hight of it in the early-mid nineties (maybe they still do).....  a multi-generation mortgage: you buy the house, and your kids inherit your debt, and repay the remaining 20 or 30 years, or whatever it was originally set at



exactly, I was looking for a wikipedia reference for it but no joy!


----------



## room305

CelloPoint said:


> You have to say it is pretty "stupid" (not for want of a better word) to buy at 2k a month over 30 years when, as was pointed out by somebody, they could probably rent the same place for 1100, not pay legal bills, stamp duty, uncertain interest and still create a "solid future for themselves".



Absolutely but who doesn't make a stupid investment mistake every now again? I bought Eircom shares for god sake - and a house! Even W2DW gets it wrong on occasion. I just hate when posters on this thread seem to gloat over what will be unbearable misery for many people. Okay, the bears have had to put up with unbelievable smugness from many quarters but lets not lose the run of ourselves.


----------



## liteweight

plaudit said:


> At this stage I don't think people like this are actually buying anything, after 3 years how much of the capital will they have paid off?



The general opinion on this thread seem to be that it's all about capital appreciation. It's not. For the next 3 years, that couple have someplace to call home, where they have the freedom to do as they wish, within limits imposed by society. There are not subject to a landlord's whims for a start. I don't know why more renters here aren't worried about where they are going to live, given that all of us investors are supposed to be selling up fortwith! 

Cellopoint, you might yet find yourself living in Clondalkin ( I believe that area was the target of your last disparaging remarks on AAM). If there is no capital appreciation to be expected, and IR rising, landlords will raise rents to cover themselves. You can huff and puff all you like but they are entitled to do this and will do it.

Granted, that couple will not have made much of a dent in the mortgage after three years, but renters will have stood still. A little gain is better than nothing. After 5 years, they are in a better position all round. If they fall on hard times, they have a 2 bed which they can take advantage of by renting one room via the rent a room scheme and pay no tax. I'm not saying I agree with their purchase....but they do have options which most renters don't.


----------



## MadPad

liteweight said:


> The general opinion on this thread seem to be that it's all about capital appreciation. It's not. For the next 3 years, that couple have someplace to call home, where they have the freedom to do as they wish, within limits imposed by society. There are not subject to a landlord's whims for a start. *I don't know why more renters here aren't worried about where they are going to live, given that all of us investors are supposed to be selling up fortwith! *
> 
> Cellopoint, you might yet find yourself living in Clondalkin ( I believe that area was the target of your last disparaging remarks on AAM).* If there is no capital appreciation to be expected, and IR rising, landlords will raise rents to cover themselves. You can huff and puff all you like but they are entitled to do this and will do it.*
> 
> Granted, that couple will not have made much of a dent in the mortgage after three years, but renters will have stood still. A little gain is better than nothing. After 5 years, they are in a better position all round. If they fall on hard times, they have a 2 bed which they can take advantage of by renting one room via the rent a room scheme and pay no tax. I'm not saying I agree with their purchase....but they do have options which most renters don't.


 
Not sure I agree with this....
If theres a serious crash, (and thats not a certainty btw) the houses won't disappear, they will still be there, probably owned by the banks who will have to offload them, what about the empty houses discovered during the census?

Its really all down to interest rates and where values go. If prices stay much the same (drop 10%, yeah a few years renting will have meant no negative equity) If they drop 40%, well thats another story, it'll be like a neutron bomb, the houses will stay but the owners will be hit.. they will probably end up as tenants of the bank. And if they stay the same, the mortgage holder is the winner...

Time to get out the popcorn and sit back....


----------



## plaudit

liteweight said:


> After 5 years, they are in a better position all round.


 
Assuming prices keep rising surely?

If the price stays the same they will have about 80K behind them by saving 10K per year in mortgage repayments and further savings in insurance, furnishings, maintenance fees etc. 

A price drop does not bear thinking about.


----------



## conor_mc

liteweight said:


> The general opinion on this thread seem to be that it's all about capital appreciation. It's not.


 
I agree that some people around here seem to rate every _home _purchase as if it were an investment, it isn't. Having said that, these guys are pushing the boundaries of what they can comfortably handle, and that ain't smart.



liteweight said:


> I don't know why more renters here aren't worried about where they are going to live, given that all of us investors are supposed to be selling up fortwith!


 
Ah yes, you'll be selling up forthwith, but who'll be buying? Not to mention that Joe Soap, the amateur investor, will be eaten alive when the big boys in construction pull the plug on all their immigrant tenants.



liteweight said:


> If there is no capital appreciation to be expected, and IR rising, landlords will raise rents to cover themselves. You can huff and puff all you like but they are entitled to do this and will do it.


 
Landlords don't set the rent, the markets do. No point asking for 1500 a month when the apartment next door is up for 1200. Unless landlords form their own cartel, the landlords who bought 5-10 years ago can and will undercut those who bought in the last 5 years. You can ask for whatever rent you want, doesn't mean the market's gonna cough up for it.


----------



## paddyd

MadPad said:


> Not sure I agree with this....
> If theres a serious crash, (and thats not a certainty btw) the houses won't disappear, they will still be there, probably owned by the banks who will have to offload them


 
interesting tangent .... Foreclosure. Its something which banks in ireland VERY rarely do, which is great. The number of foreclosures has been in single figures for years.
In the UK the banks foreclose much much easier and quicker.

It will be interesting to see the Irish banks reaction to any inability of FTB's on already over-stretched mortgages to repay. Surely it will (unfortunately) be more evident in the coming years.


----------



## walk2dewater

conor_mc said:


> Listen, if there was a shortage of _housing_ then rent would be much more expensive. It isn't because there isn't any shortage.





conor_mc said:


> There is, or rather there has been, a shortage of housing _for sale_ because specuvestors have held onto properties for capital appreciation. These guys will let these go once they start costing (or stop making) them money, they wouldn't own them in the first place if they weren't in it for the money.


 
If a lot of empty “investments” come on the market, then rents are going to get v soft indeed. If these properties don’t get sold, then the holders may decide to rent at any price rather than leaving empty. I.e. “No more capital appreciation so best get €400/mth for that idle 1-bed apartment in Cork street”. This would trigger a game of undercutting existing landlords.

Excellent, maybe I can negotiate even cheaper rent next year J


----------



## CelloPoint

paddyd said:


> mmm, this is something they did in Japan back at the hight of it in the early-mid nineties (maybe they still do).....  a multi-generation mortgage: you buy the house, and your kids inherit your debt, and repay the remaining 20 or 30 years, or whatever it was originally set at



Isn't a 100 year mortgage better than an interest only mortgage?

An interest-only mortgage is an infinite term mortgage - the ultimate in inter-generational mortgage lending (even worse than Japan).


----------



## walk2dewater

CelloPoint said:


> Isn't a 100 year mortgage better than an interest only mortgage?
> 
> An interest-only mortgage is an infinite term mortgage - the ultimate in inter-generational mortgage lending (even worse than Japan).


 
LOL, slight problem if the kids refuse to born into slavery


----------



## conor_mc

CelloPoint said:


> Isn't a 100 year mortgage better than an interest only mortgage?
> 
> An interest-only mortgage is an infinite term mortgage - the ultimate in inter-generational mortgage lending (even worse than Japan).


 
An infinite interest-only PPR mortgage is RENT, plain and simple. The bank buy the house on your behalf and rent it to you. You'll never own a single brick of it.


----------



## plaudit

Matt Cooper has just mentioned that the housing market appears to have taken a sudden dive and will be discussing it on the last word soon.


----------



## conor_mc

plaudit said:


> Matt Cooper has just mentioned that the housing market appears to have taken a sudden dive and will be discussing it on the last word soon.


 

Going back to the title of the thread, whether or not a crash actually develops, SENTIMENT is on the move......


----------



## bren2002

I wouldn't have thought that the Last Word was main stream.  Wait until Adrian Kennedy starts talking about it!!


----------



## plaudit

conor_mc said:


> An infinite interest-only PPR mortgage is RENT, plain and simple. The bank buy the house on your behalf and rent it to you. You'll never own a single brick of it.


 
Not quite. Suppose the house costs 300K and you pay interest only, in 10 years time the outstanding debt will still be 300K regardless of market conditions in 10 years.

Eventually, maybe after 30 years, you should be able to buy the house for a weeks wages, inflation and all that.


----------



## cjh

plaudit said:


> Not quite. Suppose the house costs 300K and you pay interest only, in 10 years time the outstanding debt will still be 300K regardless of market conditions in 10 years.
> 
> Eventually, maybe after 30 years, you should be able to buy the house for a weeks wages, inflation and all that.


 

Or you might not be able to buy it at all, deflation and all that.


----------



## conor_mc

bren2002 said:


> I wouldn't have thought that the Last Word was main stream. Wait until Adrian Kennedy starts talking about it!!


 
It's all relative. Three months ago this was merely a discussion on an obscure website populated by like-minded people who share in interest in financial matters, now it's on national radio for Joe Soap to hear all about it.

And you won't hear about any of this on Adrian Kennedy either, at least until people are actually in negative equity and need a soap-box so they can blame the banks, the estate agents, the builders.... and, of course, exonerate themselves.


----------



## bren2002

Fair point


----------



## conor_mc

plaudit said:


> Not quite. Suppose the house costs 300K and you pay interest only, in 10 years time the outstanding debt will still be 300K regardless of market conditions in 10 years.
> 
> Eventually, maybe after 30 years, you should be able to buy the house for a weeks wages, inflation and all that.


 
Okay - RENT, but with a 30-year option to buy!


----------



## robd

plaudit said:


> Not quite. Suppose the house costs 300K and you pay interest only, in 10 years time the outstanding debt will still be 300K regardless of market conditions in 10 years.
> 
> Eventually, maybe after 30 years, you should be able to buy the house for a weeks wages, inflation and all that.



This is a completely false belief going back to the high/stagflation economy of 80's Ireland.  Part of buying into the Euro is low inflation (circa 2% per year).  This is just not going to happen.

1.02^30 times 300,000 = 543,000
1.02^30 times 30,000 (average industial wage) = 54,000


----------



## walk2dewater

conor_mc said:


> Going back to the title of the thread, whether or not a crash actually develops, SENTIMENT is on the move......


 
Bingo.  Sentiment, then inventory build up, then mexican stand-off, then cheaper prices...


----------



## whizzbang

Does anyone want to make a guess on what Estate agent / Bank economist Matt Cooper has one to talk about this?


----------



## Remix

paddyd said:


> .... Foreclosure. Its something which banks in ireland VERY rarely do, which is great. The number of foreclosures has been in single figures for years.


 
Remember the lenders have been very busy with the securitisation process - selling the rights to mortgages to overseas investors, hedge funds etc.

You may have taken out your mortgage with your big friendly Irish bank but they merely service the mortgage - the rights could well be held by some stressed overseas hedge fund.

Not sure how much this will impact future foreclosure rates - time will tell I suppose.


----------



## bearishbull

Should have someone realistic and without a vested interest like jill kerby but will be one of the estate agent guys or a bank guy likes that media wh0re austin hughes.


----------



## daveirl

emm, who's Adrian Kennedy? Wouldn't have thought anything is more mainstream than Matt Cooper on radio, maybe Radio 1 gets a bigger audience but that's about it.


----------



## CelloPoint

lightweight said:
			
		

> The general opinion on this thread seem to be that it's all about capital appreciation. It's not. For the next 3 years, that couple have someplace to call home, where they have the freedom to do as they wish, within limits imposed by society. There are not subject to a landlord's whims for a start. I don't know why more renters here aren't worried about where they are going to live, given that all of us investors are supposed to be selling up fortwith!


Might not be subject to the landlord's whims, but may be subject to the whims of the property management company. I would hate to live in a place where some clip-board jockey with a luminous jacket is forever knocking on your door telling you what you can and can't do.



			
				lightweight said:
			
		

> Cellopoint, you might yet find yourself living in Clondalkin ( I believe that area was the target of your last disparaging remarks on AAM). If there is no capital appreciation to be expected, and IR rising, landlords will raise rents to cover themselves. You can huff and puff all you like but they are entitled to do this and will do it.


I wouldn't live in Clondalkin if I was paid. In fact, my professor at university asked if I would move in to his spare house in Clondalkin at low rent about a year or two ago, which I politely refused.
BTW, we'll see how rents pan out over the next couple of years. The only way you'd see jumping on the housing gravy train is if I was paying substantially more to rent, than to buy. Right now, my landlord (also one of my best mates) is renting to me at a yield of @1% in D6. It just wouldn't make any sense for me to buy in this climate. (I have an eye on a flat in Berlin at the moment).



			
				lightweight said:
			
		

> Granted, that couple will not have made much of a dent in the mortgage after three years, but renters will have stood still.


You're forgetting they've also payed the difference between renting (13k a year) and owning (23k a year), as well as 2k's worth of management fees etc. Therefore, they need capital appreciation of 12k each year, just to break even. The risk they've taken on is not worth the potential gain.



			
				lightweight said:
			
		

> A little gain is better than nothing.


Not necessarily - you have to weigh up the risks involved in a potential downturn. If you play poker, you'd be aware of pot size to probability ratio. Now were I to weigh up the potential gain vs the probability of a crash, I'd fold my hand straight away. Irish property is a bit like playing an off-suit 2 & 7 with AAK on the board. (might make for a good bluff, but you can't bluff forever if the fundamentals just ain't there...)



			
				lightweight said:
			
		

> After 5 years, they are in a better position all round. If they fall on hard times, they have a 2 bed which they can take advantage of by renting one room via the rent a room scheme and pay no tax. I'm not saying I agree with their purchase....but they do have options which most renters don't.


Don't forget renters have a lot of options which owners don't. E.g. if they don't like their social housing neighbours, they can just go on daft and find a new place. Or, if the washing machine is broken, they can just ring up the landlord. Or, if they don't like the traffic, they can find somewhere closer to work. Or, if there's an economic crash, they can just up and leave and ride the next boom wherever it may be.

We've had the whole rent vs. buy debate already. Can't remember what the consensus was, but for me, it's: you'd be mad to buy in 2006.


----------



## bearishbull

daveirl said:


> emm, who's Adrian Kennedy? Wouldn't have thought anything is more mainstream than Matt Cooper on radio, maybe Radio 1 gets a bigger audience but that's about it.


yeah and once a hundred thousand people listening to the last word tell their family friends etc it spreads rapidly, any media in ireland isnt too far from mainstream. add this to indo and herald and numerous other bearish stories in media and sentiment cant not be affected


----------



## bren2002

daveirl said:


> emm, who's Adrian Kennedy? Wouldn't have thought anything is more mainstream than Matt Cooper on radio, maybe Radio 1 gets a bigger audience but that's about it.



Late Night FM104, listened to by Taxi drivers.


----------



## Debtwish

daveirl said:


> emm, who's Adrian Kennedy? Wouldn't have thought anything is more mainstream than Matt Cooper on radio, maybe Radio 1 gets a bigger audience but that's about it.


 
Gerry Ryan was just the other day banging on about how you can't go wrong with "bricks and mortar" for your pension.  

How many BTL's has he got I wonder?


----------



## room305

Remix said:


> Remember the lenders have been very busy with the securitisation process - selling the rights to mortgages to overseas investors, hedge funds etc.



This is an interesting point. If your house in one of the debt securitisation packages sold to hungry-for-risk hedge funds, does this mean they have any entitlements if you default?

Who comes knocking on your door when you miss a payment, nice Jim the bank manager or an angry trader from Amaranth who has just lost $6bn on the commodities futures markets and doesn't fancy reporting any more losses this month?


----------



## whizzbang

lets see if he mentions the 275,000 empties 
[SIZE=-1]www.cso.ie/releasespublications/documents/construction/current/constructhousing.pdf [/SIZE]


----------



## ivuernis

bearishbull said:


> Should have someone realistic and without a vested interest like jill kerby but will be one of the estate agent guys or a bank guy likes that media wh0re austin hughes.


 
I always read Jill Kerby, I think she's one of the few irish economic commentators out there talking sense, but she does work for RaboBank and in that sense she does has a vested interest in talking up non-property investments. That said I think she's spot-on w.r.t. property in Ireland. 

Is Austin Hughes that bad either? His last article on FinFacts discussing ECB policy is excellent and he's one of the only Irish economists (employed by a major bank) out there that I can think of who say rates could likely go higher than 4% in 2007.


----------



## paddyd

Remix said:


> You may have taken out your mortgage with your big friendly Irish bank but they merely service the mortgage - the rights could well be held by some stressed overseas hedge fund.


 
correct, and this is something people forget, that its the Germany pension fund money we are actually borrowing, as serviced by AIB/BOI or whomever. 
The aging Germany population were not spending their life-savings, and certainly not borrowing from banks, in the mid-nineties. As banks are in effect, money lenders, the german banks needed to loan the money to someone, anyone; and the irish banks were only bursting to get their hands on it and loan it out to all us chaps. and so the Celtic tiger economy really got the party started
(I call it my 'celtic tiger description' in 100 words or less)


----------



## ivuernis

Debtwish said:


> Gerry Ryan was just the other day banging on about how you can't go wrong with "bricks and mortar" for your pension.
> 
> How many BTL's has he got I wonder?


 
From his ivory tower in Donnybrook and his RTE salary he's far removed from the reality facing most people w.r.t. property and pensions. Still surprised as his comment though.


----------



## StoppedClock

At what time and on what satation is The Last Word?


----------



## cjh

Today FM, 5 - 7 pm weekdays.


----------



## bren2002

Today FM, 4.30 - 7 pm weekdays


----------



## StoppedClock

cjh said:


> Today FM, 5 - 7 pm weekdays.


 

Thanks, on what frequency is Today FM?


----------



## bren2002

Fm: 100-102


----------



## robd

bren2002 said:


> Fm: 100-102



Or www.todayfm.com

Wahooh !!! 5000 Posts.


----------



## ivuernis

StoppedClock said:


> Thanks, on what frequency is Today FM?


 
Are you taking the piss  

100-102 Today FM


----------



## phoenix_n

Could someone explain why this [broken link removed] would be worth 900,000 + stamp duty


----------



## cjh

phoenix_n said:


> Could someone explain why this [broken link removed] would be worth 900,000 + stamp duty


 

'Because there's one born every minute' .....is the only reason I can think of!


----------



## MadPad

phoenix_n said:


> Could someone explain why this [broken link removed] would be worth 900,000 + stamp duty


Chapelgate is without doubt one of Drumcondra's most prestigious apartment developments. Built in 1999 it is situated in the grounds of a refurbished convent, where beautifully landscaped grounds offer a peaceful haven within walking distance of the city centre. No. 106 is a fabulous penthouse apartment set in the refurbished cut-stone convent building and can be described as no less than stunning! This penthouse apartment exudes character, charm and atmosphere where modern standards blend excellently with old world style. It is complemented by neutral colour tones throughout and plenty of sash windows, which not only allow for stunning views over the city rooftops and Dublin Mountains, but also allow an abundance of natural light to fill the rooms. This secure development has electronic gates to the front and the apartment further benefits from one designated parking space and two visitor spaces. If you are looking for bright and spacious accommodation, low maintenance, and a central location, then look no further! 


All this and _*"one of Drumcondra's most prestigious apartment developments"*_ !!!

Bargain!


----------



## StoppedClock

ivuernis said:


> Are you taking the piss
> 
> 100-102 Today FM


 
No, i thought Q was at 102?



phoenix_n said:


> Could someone explain why this [broken link removed] would be worth 900,000 + stamp duty


 
Was trying to think of some funny response but it is actually beyond a joke.


----------



## DirtyH2O

CelloPoint said:


> Isn't a 100 year mortgage better than an interest only mortgage?
> 
> An interest-only mortgage is an infinite term mortgage - the ultimate in inter-generational mortgage lending (even worse than Japan).


 
Intergenerational mostgages of 99 years are available in Germany. I had suggested to a German friend that we had exhausted every line of credit available in Ireland - 
100% plus mortgages, 
40 year terms, 
interest only mortgages, 
6,7,8,9 times earnings, 
propective 2008 earnings used instead of actual salary, 
personal loans from credit unions to provide deposits, 
HP on furniture and white goods incl. essential 52" plasma TV,
parental assistance etc.


and so the boom would end when he pointed this option out. According to the guardian
http://money.guardian.co.uk/news_/story/0,,1856648,00.html

"These types of products are quite popular in Switzerland, Japan and Ireland" 
so maybe we have found some more rope to hang ourselves with yet. If I was feeding my dog and he kept eating everything I gave him I don't think I would continue providing more and more until ....
The new tanaiste obviously thinks that when consumption is out of control the best solution is to keep supplying. The trend in most countries is for no mortgage interest tax relief, a cap on LMV % and other sensible measures such as rent control and investor penalties. As the majority of the Irish voting public have already joined the BTL club we are all too compromised in by subjective views to admit the truth.

Shanahans Stamp Auctions all over again.

Apologies if this link has been referenced already but I think it makes a good summary of the situation.


http://en.wikipedia.org/wiki/Irish_property_bubble


----------



## genki33

phoenix_n said:


> Could someone explain why this [broken link removed] would be worth 900,000 + stamp duty



Love the picture of bedroom2..... "And the doors of the closet open in"  ;-)


----------



## mortimer33

Bedsit said:


> [broken link removed]


 

On a related topic just found this earlier.. 

*'Working couples spend 25% of income on mortgage payments'* 
See: [broken link removed]


----------



## robd

MadPad said:


> This secure development has electronic gates to the front and the apartment further benefits from one designated parking space and two visitor spaces.



Yet another so called Penthouse with only 1 parking space.


----------



## phoenix_n

robd said:


> Yet another so called Penthouse with only 1 parking space.


 
I know. Only one parking space. Imagine spending 900+ on a pad and your partner doesn't even have a space.
And its only 95 Square metres.


----------



## bearishbull

mortimer33 said:


> On a related topic just found this earlier..
> 
> *'Working couples spend 25% of income on mortgage payments'*
> See: [broken link removed]


And the rest , the average house in Dublin is around 450k the average couple earn around 50k after tax,you do the maths. For a single FTB in dublin on even 50k gross an average house is ridiculously out of reach. Where do they get such low repayments? they probably include people with tiny mortgages left. for the average FTB the repayment on an average property is far higher than those quoted.


----------



## mortimer33

bearishbull said:


> And the rest , the average house in Dublin is around 450k the average couple earn around 50k after tax,you do the maths. For a single FTB in dublin on even 50k gross an average house is ridiculously out of reach. Where do they get such low repayments? they probably include people with tiny mortgages left. for the average FTB the repayment on an average property is far higher than those quoted.


 
As far as I can make out the survey wasn't confined to FTB's. I'm sure that FTB's as a distinct group would have a higher mortgage repayment to income %.


----------



## robd

plaudit said:


> Matt Cooper has just mentioned that the housing market appears to have taken a sudden dive and will be discussing it on the last word soon.



Just started.  It's Orna Mulcahy from Irish Times.


----------



## MadPad

Has anyone changed their opinion as a result of this thread? 

As I started as a bear, i have changed my opinion a little in that i am probably a little more bearish, but am thinking that mainstream sentiment has definitely changed over the past few weeks.

Still think the thread doesnt have enough bulls, dont know if they are too busy making money, or have become bears or what...


Did anyone read this starting out as a bull and become a bear (or vice versa).. Or has the thread just re-inforced opinions...


----------



## robd

Matt Cooper's property piece has just finished.

Those interviewed were:

Orna Mulcahy - Property Editor - Irish Times
Ian Lawlor - Property Investor - ICES Group
Des Purcell - Waterford based Actioneer

Orna Mulcahy didn't have a huge amount to say.  She reckoned that the Auction Indicators weren't an indicator of the overall housing market.  The other 2 agreed.  All were still either quite bullish or very bullish on property.

Some stats on Dublin houses up for sale givem:

2006 -> 115 houses > €1m
2005 -> 63 houses > €1m
2004 -> 48 houses > €1m

The piece was very short and Orna really didn't have very much to say, she seemed quite unprepared for any of the questions Matt asked.  The Waterford auctioneer was very bullish on property in that area, a real spin doctor.  He rekoned there is great demand for new property in Waterford and surounding counties due to delay in planning.  Ian Lawlor reckoned there was still investments opportunities if/where the sums add up.  He reckoned there may be more opportunities to come if Orna's piece holds up.

It really wasn't a great piece at all.  Very wishy washy with not facts or anything.


----------



## polar

Public sentiment: I knew it was changing when my family actually started to listen to my last rant on housing and the economic future of Ireland.  For years, I've been considered the financial black sheep of the family, renting and refusing to buy while the bubble inflated and each of my reasons for not investing (mar dhea) was met with "Yeah, yeah, whatever... you eejit."  Behold, the last time I touched the subject, I found myself with a respectful audience for my speech. That, for me, was when the whole thing turned around.


----------



## StoppedClock

polar said:


> Public sentiment: I knew it was changing when my family actually started to listen to my last rant on housing and the economic future of Ireland. For years, I've been considered the financial black sheep of the family, renting and refusing to buy while the bubble inflated and each of my reasons for not investing (mar dhea) was met with "Yeah, yeah, whatever... you eejit." Behold, the last time I touched the subject, I found myself with a respectful audience for my speech. That, for me, was when the whole thing turned around.


 

Same here, someone even asked me for my opinion recently!!


----------



## minky

robd said:


> Matt Cooper's property piece has just finished.
> 
> Those interviewed were:
> 
> Orna Mulcahy - Property Editor - Irish Times
> Ian Lawlor - Property Investor - ICES Group
> Des Purcell - Waterford based Actioneer
> 
> Orna Mulcahy didn't have a huge amount to say.  She reckoned that the Auction Indicators weren't an indicator of the overall housing market.  The other 2 agreed.  All were still either quite bullish or very bullish on property.
> 
> Some stats on Dublin houses up for sale givem:
> 
> 2006 -> 115 houses > €1m
> 2005 -> 63 houses > €1m
> 2004 -> 48 houses > €1m
> 
> The piece was very short and Orna really didn't have very much to say, she seemed quite unprepared for any of the questions Matt asked.  The Waterford auctioneer was very bullish on property in that area, a real spin doctor.  He rekoned there is great demand for new property in Waterford and surounding counties due to delay in planning.  Ian Lawlor reckoned there was still investments opportunities if/where the sums add up.  He reckoned there may be more opportunities to come if Orna's piece holds up.
> 
> It really wasn't a great piece at all.  Very wishy washy with not facts or anything.



I hate the fact that all the discussions in the media about the property market are always one-sided, normally with only vested interests being interviewed. They are always bullish and are dismissive of any concerns about the market the interviewer may state. 

Another thing that bothers me is the that the interviewer rarely if ever tries
to grill these panelists about their statements, and usually takes their words as gospel.

I'd wish they'd bring in a balanced panel with the likes of Eddie Hobbs, IMF, OECD or anyone else who can counter their arguments.


----------



## solatic

phoenix_n said:


> and this for [broken link removed] in drumcondra. surely not.



Apparently not. 759k today.


----------



## whathome

[broken link removed]=



solatic said:


> Apparently not. 759k today.


 
845k down to 759k
€86,000 - quite a drop!

Amazing what Google throws up - here are some previous inhabitants:
[broken link removed]


----------



## solatic

That would appear to be Cardiff. A fairly common street address, it would seem.

I also can't find google's cache for the myhome page. I believe it's possible to have a site listed as not cachable. That would probably be a smart move for people not wishing to make weakness in the market visible.


----------



## StoppedClock

solatic said:


> That would appear to be Cardiff. A fairly common street address, it would seem.
> 
> I also can't find google's cache for the myhome page. I believe it's possible to have a site listed as not cachable. That would probably be a smart move for people not wishing to make weakness in the market visible.


 
Different cache I believe; not cachable is an instruction to your browser that the info is volitile and therefore the page should be recieved from the web on every visit.  The google cache would be equivalent to you copying a web page and all images to your own computer, if the page is visible to a browser then google will cache it.


----------



## whathome

Here's an example of a price drop on a redbrick in Drumcondra:

Original Price: €875,000


New Price: €845,000
[broken link removed]=


----------



## whathome

solatic said:


> I believe it's possible to have a site listed as not cachable. That would probably be a smart move for people not wishing to make weakness in the market visible.


 
You're might be correct - maybe they're not being cached correctly.


----------



## solatic

Looks like people are clamming up, as someone suggested they might:

Was 440k:
[broken link removed] 

Was 635k:
[broken link removed]

Was €1.65m:
[broken link removed]

It would be interesting to hear how much the EAs are suggesting for these properties now.


----------



## Marie

paddyd said:


> correct, and this is something people forget, that its the Germany pension fund money we are actually borrowing, as serviced by AIB/BOI or whomever.
> The aging Germany population were not spending their life-savings, and certainly not borrowing from banks, in the mid-nineties. As banks are in effect, money lenders, the german banks needed to loan the money to someone, anyone; and the irish banks were only bursting to get their hands on it and loan it out to all us chaps. and so the Celtic tiger economy really got the party started
> (I call it my 'celtic tiger description' in 100 words or less)


 
That's right!  Europeans are congenital 'savers'.  There was an item on BBC4 "Today" programme earlier this week deploring the _appalling _debt-ridden UK which is at an average of £1,500 per head - presumably adult head - of the population compared to half that in the rest of Europe.  I can't remember the comparable Irish figure but isn't it over Euro 5,000 per capita?   When the French or Germans buy a dacha in Lithuania they have savings to insulate them through most financial vicissitudes.


----------



## MadPad

Howitzer said:


> Should be of interest so:
> 
> State losses cash windfall in swop for affordable houses
> 
> http://www.askaboutmoney.com/showthread.php?t=36615


 
Shocking, exactly the type of taxpayer gouging that property interests are hoping for in the event of a downturn.


----------



## solatic

solatic said:
			
		

> Looks like people are clamming up, as someone suggested they might:


Weird - in the time since I last looked, all three of those have changed back from "contact agent" to listing the price again. Database update maybe?


----------



## bearishbull

Rumour around the dail has it bertie will go tonight or mcdowell will walk. a snap election would suit FF/PDs if market is starting to correct/crash.


----------



## room305

StoppedClock said:


> Different cache I believe; not cachable is an instruction to your browser that the info is volitile and therefore the page should be recieved from the web on every visit.  The google cache would be equivalent to you copying a web page and all images to your own computer, if the page is visible to a browser then google will cache it.



You can put a file called robot.txt on the webserver and include in the file any pages you do not want indexed by google and other search engines. Probably won't show up on the search at all then though.


----------



## room305

bearishbull said:


> Rumour around the dail has it bertie will go tonight or mcdowell will walk. a snap election would suit FF/PDs if market is starting to correct/crash.



Well they've scheduled a special debate on the farce next week but it could suit both parties. McDowell looks tough and the opposition can welcome the PDs with open arms. Fianna Fail will have an election before the full horror of the upcoming housing crash becomes apparant.


----------



## kerrybull

Bertie can call everyones bluff by calling an election now. They have a better chance now before a winter of discontent. What with higher fuel bills, higher interest rates, and the reality that the laws of gravity also apply to our housing market.


----------



## JayDub

..


----------



## plaudit

More negative sentiment on the 9 o'clock news - an article about repayments rising by 50% during the tightening cycle. They also mentioned growth of 5% but that it is driven by consumer spending and house price increases.


----------



## Maine

liteweight said:


> Well Mr. Dunne can afford to sit on his 'asset' and do nothing!!


 
IMO supply will keep coming. S Dunne and all the other developers will keep developing their landbanks and keep supplying property to the market. It is very difficult for those who have been very successful to stop until it is very clear to them and their banks that there is no way that money can be made. 

Every year they wait they are losing say 4% base plus 3% margin =7% of the amount borrowed. 

A key difference in this boom is the sheer scale of numbers means that letting large sites sit there is not going to be an option. The banks will also haver extracted lots of security on other dunne and other developer assets - another reason for them to keep going.  Banks are not completely stupid.


----------



## beattie

plaudit said:


> More negative sentiment on the 9 o'clock news - an article about repayments rising by 50% during the tightening cycle. They also mentioned growth of 5% but that it is driven by consumer spending and house price increases.


 
But we were also reassured by those good people at the EBS who told us that 75% of FTB's expect house prices to rise over the next 5 years. Thank god for some real perspective......


----------



## whizzbang

Whose been posting the most here?



congratulations whathome!

stupid 12th place...


----------



## room305

Maine said:


> IMO supply will keep coming.



That's been the experience in the U.S. market too. When you buy expensive land to develop, it becomes even more expensive if you let it sit idle depreciating in value. Far better to develop, slash the margins on the homes you are selling and try and recoup your money. Given the leeway developers have to cut prices, it absolutely kills people trying to sell their own 2nd hand homes, who may not be able to offer such discounts.

IMO, this will be even worse here, where developers already have the stamp duty laws working in their favour.


----------



## liteweight

whizzbang said:


> Whose been posting the most here?
> 
> 
> 
> congratulations whathome!
> 
> stupid 12th place...



I've only made approx. 42 posts but this has me down as 102??


----------



## whizzbang

liteweight said:


> I've only made approx. 42 posts but this has me down as 102??



how were you counting? I'm not sure how this works!


----------



## liteweight

whizzbang said:


> how were you counting? I'm not sure how this works!



I was surprised by the number of posts (102) that I supposedly had made. I went into my own profile and asked to see all posts by Liteweight. Counted them and it came to 42 give or take. If this count has been done automatically using names, e.g. 'search Liteweight' with automatic count, it may well be including posts where people quoted me, hence to 102 posts.


----------



## bogwarrior

minky said:


> Another thing that bothers me is the that the interviewer rarely if ever tries
> to grill these panelists about their statements, and usually takes their words as gospel.



the interviewer may have a conflict of interest on this topic if he\she owns a few btl's.  I'd imagine most of these interviewers (middle-aged, high income for the most part) have plenty invested in property and aren't going to be the first to say that 'the emperor has no clothes'.  EAs and banks advertise heavily on these shows, so there is a conflict there too.




CelloPoint said:


> Living the "dream" eh? 2-bed flat in D15, traffic, tight belt and a property management company's bit%h. What a waste of youth.



Cellopoint, you hit the nail on the head with the above observation - they're only 24, shouldn't they be backpacking around Australia or something?  Ah, but they're on the property ladder - sure it makes sense now.


----------



## Duplex

An article published by Constantine Gurdgiev (2004) sums up the widespread myopia.  


[broken link removed]


----------



## Maine

room305 said:


> That's been the experience in the U.S. market too. When you buy expensive land to develop, it becomes even more expensive if you let it sit idle depreciating in value. Far better to develop, slash the margins on the homes you are selling and try and recoup your money. Given the leeway developers have to cut prices, it absolutely kills people trying to sell their own 2nd hand homes, who may not be able to offer such discounts.
> 
> IMO, this will be even worse here, where developers already have the stamp duty laws working in their favour.


 
Good point on stamp duty - it favours the new build big time which will encourage the supply side. A further point is alot of developers in Ireland are private co's which means they only worry about profits in absolute terms and do not have to focus so much on margins .

One of the reasons the number of builds in UK is low comes from fact alot of housebuilders are public co's and analysts will beat them up if their margin starts to fall. Hence they keep volumes low to maintain margins.

Its also interesting to note that the SISKs and Mcinerneys / Abbeys etc are all expanding outside Ireland / outside construction. In SISKs case they are even buying health co's. Clear sign these co's see the writing on the wall.


----------



## thewatcher

Newtalk reporting all morning that the ESRI is claiming that there will be no ECB rate rises in 2007,can't find any links on the newswires though.
Let the ripping to shreads commence people !


----------



## Debtwish

thewatcher said:


> Newtalk reporting all morning that the ESRI is claiming that there will be no ECB rate rises in 2007,can't find any links on the newswires though.
> Let the ripping to shreads commence people !


 
No rate rises in 2007 is not what the bond market is saying. I bet newstalk didn't mention that!

http://www.bloomberg.com/apps/news?pid=20601009&sid=acvO_o4eQO7Y&refer=bond



> Sept. 29 (Bloomberg) -- European two-year government notes headed for a second monthly drop as *European Central Bank policy makers indicated the ECB will keep lifting interest rates into 2007* to combat inflation in the euro-region.


----------



## fatmanknows

I expect EA's will be leaving their 'SOLD' flags on properties for as long as they possibly can to create the illusion of a balanced market.


----------



## Duplex

If the US economy goes into recession next year then the ECB may stick. If the US dodges the bullet then I think that they will continue to tighten.  The proverbial rock and a hard place for the Irish economy.


----------



## beattie

thewatcher said:


> Newtalk reporting all morning that the ESRI is claiming that there will be no ECB rate rises in 2007,can't find any links on the newswires though.
> Let the ripping to shreads commence people !


 
Maybe the ESRI are hoping that there will be no interest rate rises in 2007. When is the next PTSB/ESRI report due?


----------



## bren2002

It's been many pages since we last looked at this.

I reckon we are solidly in Stage 7, stragglers still in Stage 6.



> *Stage One – Displacement*
> 
> Every financial crisis starts with a disturbance. It might be the invention of a new technology, such as the internet. It could be a shift in economic policy. For example, interest rates might be reduced unexpectedly. Whatever it is, the world changes for one sector of the economy. People see the sector differently.
> 
> *Stage Two – Prices start to increase*
> 
> Following the displacement, prices in the displaced sector start to rise. Initially, the price increase is barely noticed. Usually, these higher prices reflect some underlying improvement in fundamentals. As the price increases gain momentum, people start to notice.
> 
> *Stage three – Easy Credit*
> 
> Increasing prices are not enough for a bubble. Every financial crisis needs rocket fuel and there is only one thing that this rocket burns - cheap credit. Without it, there can be no speculation. Without it, the consequences of the displacement peter out and the sector returns to normal.When a bubble starts, the market is invaded by outsiders. Without cheap credit, the outsiders can’t join in.
> 
> Cheap credit is the entrance ticket for outsiders. For example, gas prices have risen sharply in recent years. However, banks aren’t giving out loans so that people can store gas in their garages in the hope that the price will double in three months. The banks, however, are prepared to give loans to people with poor credit to hold condos in the hope that they can be quickly flipped.
> 
> The rise in easy credit is also often associated with financial innovation. Often, a new type of financial instrument is developed that miss-prices risk. Indeed, easy credit and financial innovation is a dangerous cocktail. The South-Sea Bubble started life as new-fangled legal innovation called the limited liability joint stock company. In 1929, stock prices were propelled into the stratosphere with the help of margin calls. Housing prices today accelerated as interest-only mortgages emerged as a viable means for financing overpriced real estate purchases.
> 
> *Stage Four – Over-trading*
> 
> As the effects of easy credit kicks in, the market starts to overtrade. Overtrading stimulates volumes and shortages emerge. Prices start to accelerate, and easy profits are made. More outsiders are attracted, and prices run out of control. Accelerating prices attract the foolish, greedy and the desperate to enter the market. As a fire needs more fuel, a bubble needs more outsiders.
> 
> *Stage five – Euphoria*
> 
> The bubble now enters its most tragic stage. Some wise voices will stand up and say that the bubble can no longer continue. They put together convincing arguments based upon long run fundamentals and sound economic logic. However, these arguments evaporate in the heat of the one over-riding fact – the price is still rising. The wise are shouted down by charlatans, who justify insane prices by the euphoric claim that the world is different and this new world means higher prices.
> 
> Of course, the “new world” claim is true; the world is different every day, but that doesn’t mean that prices run out of control. The charlatan wins the day and unjustified optimism takes over. At this point, the charlatans bolster their optimism with the cruelest of all lies; when prices finally reach their new long run level, there will be a “soft landing”. The idea of a gentle deceleration of prices calms the nerves.The outsiders are trapped in knowing denial. They know that prices can’t keep rising forever, but they rarely act on that knowledge. Everything is safe so long as they quit one day before the bubble bursts.Those that did not enter the market are stuck in a terrible dilemma. They can not enter but neither can they stay out. They know that they have missed the beginning of the bubble. They are bombarded daily with stories of easy riches and friends making massive profits. The strong stay out and reconcile themselves to the missed opportunity. The weak enter the fire and are damned.
> 
> *Stage Six - Insider profit taking*
> 
> Everyone wants to believe in a new brighter future but a bubble takes that desire and turns it upside down. A bubble demands that everyone believes in a brighter future, and so long as this euphoria continues, the bubble is sustained.However, as madness takes hold of the outsiders, the insiders remember the old world. They lose their faith and start to panic. They understand their market, and they know that it has all gone too far. Insiders start to cash out. Typically, the insiders try to sneak away unnoticed, and sometimes they get away with it. Other times, the outsiders see them as they leave. Whether the outsiders see them leave or not, insider profit taking signals the beginning of the end.
> 
> *Stage seven - Revulsion*
> 
> Sometimes, panic of the insiders infects the outsiders. Other times, it is the end of cheap credit or some unanticipated piece of news. But whatever may be, euphoria is replaced with revulsion. The building is on fire and everyone starts to run for the door. Outsiders start to sell, but there are no buyers. Panic sets in; prices start to tumble downwards, credit dries up, and losses start to accumulate.
> 
> Here is the paradox of all bubbles – everyone knows how the fatal combination of easy credit, overtrading and euphoria will affect prices. Minsky didn’t need to write down a thing about the madness of speculation. America’s investors have a lifetime of experience. Within the space of five years, America moved from the tech stock bubble into the real estate bubble.Today’s housing prices are grossly overvalued. Everyone knows that prices will collapse. It might be tomorrow, or it might be two years from now. One thing, however is certain, the longer it takes for the bubble to burst, the more painful it will be.


----------



## MadPad

bren2002 said:


> It's been many pages since we last looked at this.
> 
> I reckon we are solidly in Stage 7, stragglers still in Stage 6.


 
Maybe the readership of this thread are at stage 7 but my guess is theres plenty of people still at stage 5, with a possible move to stage 6 if rates keep increasing, some insiders have cashed out, some still going strongly ahead...

_"They can not enter but neither can they stay out. They know that they have missed the beginning of the bubble. They are bombarded daily with stories of easy riches and friends making massive profits."_

There was a comment earlier about McDowell and Ahern having a tiff so an election could be arranged before a crash, thine we are giving our glorious leaders too much credit


----------



## Gwynston

robd said:


> Matt Cooper's property piece has just finished.
> 
> The piece was very short and Orna really didn't have very much to say, she seemed quite unprepared for any of the questions Matt asked. The Waterford auctioneer was very bullish on property in that area, a real spin doctor. He rekoned there is great demand for new property in Waterford and surounding counties due to delay in planning. Ian Lawlor reckoned there was still investments opportunities if/where the sums add up. He reckoned there may be more opportunities to come if Orna's piece holds up.
> 
> It really wasn't a great piece at all.  Very wishy washy with not facts or anything.



Yes, the discussion barely scratched the surface of the subject. Very poor.

The following interview with the 'ghostbuster' ridding Galway homeowners of malicious spirits was way longer and seemingly of much more interest to Matt. Probably to the listening public too, as the piece on property prices would have barely raised blip for most people driving home last night...


----------



## Jister

Matt also interviewed John Delaney about the UEFA final and asked him: Is Dublin big enough to handle it?

What a stupid question less than a week after the Ryder cup. 

If thats the best we can expect from interviewers then the property bubble might inflate another little bit before it pops.


----------



## bren2002

Brendan should go on The LAst Word with a synopsis of this thread and have a proper discussion for 20 minutes.  Although, I don't remember Brendan posting on this thread, so maybe he has a different opinion!


----------



## howstrange

http://www.unison.ie/breakingnews/index.php3?ca=35&si=99106

ESRI reckons interest rates will come down over the next few years due to low inflation next year........ Another roll of a 6 for the irish housing market???


----------



## plaudit

howstrange said:


> http://www.unison.ie/breakingnews/index.php3?ca=35&si=99106
> 
> ESRI reckons interest rates will come down over the next few years due to low inflation next year........ Another roll of a 6 for the irish housing market???


 
They haven't a clue whats going to happen. IF Oil goes to $100 for instance then inflation rockets. On top of this if the Euro goes towards parity with the dollar then the already expensive Oil becomes €2/litre at the pumps.


----------



## whathome

howstrange said:


> http://www.unison.ie/breakingnews/index.php3?ca=35&si=99106
> 
> ESRI reckons interest rates will come down over the next few years due to low inflation next year........ Another roll of a 6 for the irish housing market???


 
Here's the ESRI report:
[broken link removed]

What they actually say is:

"The continued increases in ECB interest rates will lead to further increases in mortgage re-payments. However, the forecast of the group suggests that the end to interest rate increases is in sight. "

They are saying what most people on this thread are expecting - an end to increases next year but they do not mention interest rates coming down.


----------



## redo

fatmanknows said:


> I expect EA's will be leaving their 'SOLD' flags on properties for as long as they possibly can to create the illusion of a balanced market.


What I've noticed recently also, on recently completed new builds (Clondalkin, Aras na Cluaine) where there is a lot new To Let and For Sale signs, some new company comes along trying to steal/compete for business by putting up SOLD or LET BY signs when there were no previous signs from this company.


----------



## thewatcher

whathome said:


> Here's the ESRI report:
> [broken link removed]
> 
> What they actually say is:
> 
> "The continued increases in ECB interest rates will lead to further increases in mortgage re-payments. However, the forecast of the group suggests that the end to interest rate increases is in sight. "
> 
> They are saying what most people on this thread are expecting - an end to increases next year but they do not mention interest rates coming down.


 
It was clearly being reported this morning that there would be *NO* further ECB rates rises in 2007,i would contend that this is completely at odds with some of the posters on this thread who IMHO know what they are talking about.


----------



## Duplex

howstrange said:


> http://www.unison.ie/breakingnews/index.php3?ca=35&si=99106
> 
> ESRI reckons interest rates will come down over the next few years due to low inflation next year........ Another roll of a 6 for the irish housing market???


 

Low inflation Japanese style i.e. deflation a possibility in the US as the velocity of money is hampered by recession, a consumer retreat from unsustainable indebtedness and a credit crunch.


----------



## MadPad

howstrange said:


> http://www.unison.ie/breakingnews/index.php3?ca=35&si=99106
> 
> ESRI reckons interest rates will come down over the next few years due to low inflation next year........ Another roll of a 6 for the irish housing market???


 

Yeeeeeee Haaaaaaawwwwwwwwww!!!! Were saved!!!!!!!
Now where was the link to that flat in drumcondra....sure its only 900k, and rates are coming down..... jump in and get it for 850 while the markets soft, bargain!


----------



## howstrange

MadPad said:


> Yeeeeeee Haaaaaaawwwwwwwwww!!!! Were saved!!!!!!!
> Now where was the link to that flat in drumcondra....sure its only 900k, and rates are coming down..... jump in and get it for 850 while the markets soft, bargain!



Dont think so!! But i think reports like these could prolong the party as peoples sentiment may get more bullish again. Vendors may hold back on selling that house for a while. They may think this slowdown we are having at the moment is just a blip and not to panic as IR may start coming back down. It certainly gives more ammunition to the likes of Austin Hughes and EA;s etc etc..


----------



## thewatcher

bren2002 said:


> Brendan should go on The LAst Word with a synopsis of this thread and have a proper discussion for 20 minutes. Although, I don't remember Brendan posting on this thread, so maybe he has a different opinion!


 
I've heard brendan on the last word(i think!) recommending that ftb's should go with I/O mortgages to start off with,while maybe good advice to the financially savvy IMHO telling the masses to do this is questionable advice.
People who don't know exactly what they are doing are likely to get themselves in over their head by overborrowing as everyone these days including the lenders seem to be looking at the repayment rate above anything else, when the I/O period is over your repayments will substancially increase,many people are not actually aware of this.
Going down the I/O road will just lead to a massive increase in house prices anyway and is of no benefit to the economy.
If i've quoted the boss incorrectly,i'm sure i'll be corrected and i'm really really sorry  .


----------



## Howitzer

thewatcher said:


> I've heard brendan on the last word(i think!) recommending that ftb's should go with I/O mortgages to start off with,while maybe good advice to the financially savvy IMHO telling the masses to do this is questionable advice.
> People who don't know exactly what they are doing are likely to get themselves in over their head by overborrowing as everyone these days including the lenders seem to be looking at the repayment rate above anything else, when the I/O period is over your repayments will substancially increase,many people are not actually aware of this.
> Going down the I/O road will just lead to a massive increase in house prices anyway and is of no benefit to the economy.
> If i've quoted the boss incorrectly,i'm sure i'll be corrected and i'm really really sorry  .


 
You haven't misquoted Brendan atall. 

http://www.askaboutmoney.com/showthread.php?t=28492
http://www.askaboutmoney.com/showthread.php?t=28195&page=2

A number of posters have tried to debate him a couple of times on this but to no avail. Still, it's his opinion and he's entitled to it.


----------



## whathome

Howitzer said:


> A couple of posters have tried to debate him a couple of times on this but to no avail. Still, it's his opinion and he's entitled to it.


 
I understand his point that you are better off on IO in the first few years so that you can enjoy life more while young - rising salary should make repayments more manageable in a few years. If buyers limit the amount to what they would have taken on a non IO loan then this works out ok. 

The problem is, borrowers use IO to maximise their borrowings rather than manage repayments so they end up in a far more precarious position with rising interest rates.


----------



## cjh

Private sector borrowing has slowed - August figures released by the Central Bank today (reported Indo, IT, Irish Business Post).

A reflection of weakening sentiment? And/or weakening ability?


----------



## gearoidmm

ESRI report is based on the opinion of the European Economics Institutes who suggest that interest rates are not going to go above 3.5% because of reducing inflationary pressures.  this is probable as a result of the flash estimate from the ECB showing that eurozone inflation has fallen to 1.8% in September as a result of falling oil prices.

This does not however take into account the rise in inflation to be expected early next year due to the rise in German VAT rates.

The money markets seem to be expecting 4%


----------



## thewatcher

whathome said:


> The problem is, borrowers use IO to maximise their borrowings rather than manage repayments so they end up in a far more precarious position with rising interest rates.


 
Thats about the size of it,

financially savvy - possibly good advice
joe bloggs        -  bad bad advice

In a rational market - possibly good advice
In the irish market - pushes the price of property up for everybody

Brendan's not a bear either,i think.2pack for the airwaves !


----------



## JayDub

Bad week nationwide on the jobs front
[broken link removed]

"Unilever said it was transferring the jobs at its Inchicore plant to other facilities in Europe because the Dublin operation could not compete efficiently."

"The job losses come 24 hours after Banta Corporation in Cork, a printing company, said it was shifting work done at its Cork plant to the Czech Republic with the loss of 200 jobs out from its workforce of 350 people. Of the job losses, some 150 are permanent positions."

So the immigrants are coming to Ireland to do the low paying jobs the Irish would not work at. Now Irish based companies are moving manufacturing jobs abroad because Irish are too high. Catch 22. Of the 150 permanent positions lost in Cork, how many of these wages went towards mortgages? Dell are also opening a plant in Poland which will no doubt see job losses in Limerick. This a growing trend. How many 400k mortgages can sustained on minimum hourly wages...


----------



## ivuernis

gearoidmm said:


> ESRI report is based on the opinion of the European Economics Institutes who suggest that interest rates are not going to go above 3.5% because of reducing inflationary pressures. this is probable as a result of the flash estimate from the ECB showing that eurozone inflation has fallen to 1.8% in September as a result of falling oil prices.


 
I just posted about this over in the  thread and was wondering if the recent drop in oil price has had time to filter through yet into the inflation index, I would doubt they have.


----------



## MadPad

As theres no bulls on the thread, i think its only fair to draw your attention to...

http://www.unison.ie/irish_independent/stories.php3?ca=303&si=1697695&issue_id=14713



> According to UCD economics lecturer Colm McCarty: "The strength of demand is the real bread and butter of the property sector and while prices may have peaked in the second hand sector, this does not mean a crash."
> 
> ..........
> 
> 
> Eddie Hobbs agrees, saying: "Poor auction results do not mean Armageddon, and anyone who thinks so demonstrates a complete lack of understanding of what a crash actually means. Our economy is ....


 
On the printed version the headline for the continuation is 
*No end to boom*
...


> Marie Hunt of CBRE Gunne also laments the *unfounded negativity* that is starting to creep in. "The second hand housing market is showing signs of price stablisation but some new home buyers are getting nervous because of interest rate movements. This is more indicatative of a steady transition to more stable condition than a sign of a crash or bubble bursting."


----------



## Duplex

I'll labour this point because it is crucial as to what is likely to happen to our little nation over the next decade. An analogy; celebrating falling interest rates in Ireland is akin to Kalahari bushmen celebrating when it stops raining in the desert. If the US dives into a recession in the near future interest rates will fall (recessions are deflationary, unemployment rises, spending falls) central banks will seek to reflate as they have in every recession in the past (see link). However you cannot reflate a bubble, (see Japan 1990 to date) the recession will end when productivity increases in other sectors of the economy. I would imagine that the ECB will require concrete evidence that the US is in recession before starting to ease, and they wont have to look outside Europe for confirmation.


----------



## Duplex

> MadPad said:
> 
> 
> 
> As theres no bulls on the thread, i think its only fair to draw your attention to...
> 
> http://www.unison.ie/irish_independent/stories.php3?ca=303&si=1697695&issue_id=14713
> 
> 
> 
> 
> 
> Why don't the bulls come on here and debate?   Or maybe the Indo or Times would accept an article from members of this board who are in agreement that a property bubble exists in Ireland?
Click to expand...


----------



## JayDub

Growth in mortgage lending continues to ease
http://www.rte.ie/news/2006/0929/mortgages.html

"The latest figures from the Central Bank show that growth in mortgage lending has continued to ease for the second month in a row."


----------



## zac

Duplex said:


> Why don't the bulls come on here and debate? Or maybe the Indo or Times would accept an article from members of this board who are in agreement that a property bubble exists in Ireland?


 
could it be that only those who have missed the boat hang out here?
could it be that they are too busy counting their cash or shopping from their equity withdrawls?
maybe we have only those ppl here who cant afford to buy and waiting for a crash so that they can buy?


----------



## plaudit

zac said:


> could it be that only those who have missed the boat hang out here?
> could it be that they are too busy counting their cash or shopping from their equity withdrawls?
> maybe we have only those ppl here who cant afford to buy and waiting for a crash so that they can buy?


 

This thread is about sentiment. Are there any bulls left or have a lot of them turned bearish - thats the real question.

I have property assets, and have done very well over the last 10 years, I am bearish on the property market at the moment though.


----------



## Duplex

zac said:


> could it be that only those who have missed the boat hang out here?
> could it be that they are too busy counting their cash or shopping from their equity withdrawls?
> maybe we have only those ppl here who cant afford to buy and waiting for a crash so that they can buy?


 

That might be it Zac.   But its more likely that they cant construct a credible argument?


----------



## zac

plaudit said:


> This thread is about sentiment. Are there any bulls left or have a lot of them turned bearish - thats the real question.
> 
> I have property assets, and have done very well over the last 10 years, I am bearish on the property market at the moment though.



this might not be the right place place to guage sentiment...

ppl that i talk to who own property are usually cautiously bullish, as in prices wont crash, cant go up like the  last yr for ever, will stablise, level off etc

ppl who dont own are usually bearish..

looking at these pages i get impression that 90%+ at bearish, survery conducted on ftb suggested 90%+ think prices gonna go up, obviously both of these are not true refection of sentiment, for that we need to talk to 1000 random ppl on the street


----------



## StoppedClock

zac said:


> could it be that only those who have missed the boat hang out here?


 
Why are you here?



zac said:


> could it be that they are too busy counting their cash or shopping from their equity withdrawls?


 
Are you implying that all bulls are property "owners"/mewers?



> maybe we have only those ppl here who cant afford to buy and waiting for a crash so that they can buy?


 
Again why are you here?


I think it is just that you cannot give a reasoned argument for continued HPI or even a leveling off?  

Do you accept the challange?


----------



## zac

Duplex said:


> That might be it Zac.   But its more likely that they cant construct a credible argument?



i have seen bullish arguments from the likes of banks, EAs, those who are related to property business etc etc, problem is judging whos argument is "credible" (whether bank's or evening hearld's journalist's/contributors on this board) is skewed by our own opinion, dont u think?


----------



## room305

zac said:


> ppl who dont own are usually bearish.



Yup, but those are the very people the bulls will need to convince to buy property if they are to avoid prices falling.


----------



## zac

StoppedClock said:


> Why are you here?
> 
> 
> 
> Are you implying that all bulls are property "owners"/mewers?
> 
> 
> 
> Again why are you here?
> 
> 
> I think it is just that you cannot give a reasoned argument for continued HPI or even a leveling off?
> 
> Do you accept the challange?



looks like i touched some nerves here,  i dont care why you are here and neither should you about me, 
dont think i said im  bullish on irish residential property, dont own one either, do own european and asia pac commercial propery funds tho and wont take too long to quit them either if they break their trends


----------



## fatmanknows

Remind me again which Banks only weeks ago were forecasting Property Price Growth for the remainder of 2006 and 2007. I'd be happy to write any Derivative on their views for them. Phone number with the Moderator should they wish to seek me out.


----------



## Duplex

zac said:


> i have seen bullish arguments from the likes of banks, EAs, those who are related to property business etc etc, problem is judging whos argument is "credible" (whether bank's or evening hearld's journalist's/contributors on this board) is skewed by our own opinion, dont u think?


 
Lets say Zac that when it comes to property that I am as well qualified to discuss property as anyone in these banks.  And better qualified than Eddie Hobbs


----------



## zac

room305 said:


> Yup, but those are the very people the bulls will need to convince to buy property if they are to avoid prices falling.


right on plus those who are neither bull nor bear


----------



## cjh

Rates slowing house price growth

Breaking news www.rte.ie


House Price growth shows for the third month in a row (despite the opening of the 'selling season'?) to 1%. Attributed to Increasing interest rates.


----------



## MadPad

Duplex said:


> Why don't the bulls come on here and debate? Or maybe the Indo or Times would accept an article from members of this board who are in agreement that a property bubble exists in Ireland?
> 
> 
> 
> 
> Maybe you should write one and submit it? I think an alternative viewpoint is always welcome but most bearish articles annoy even neutral people... heres a start
> 
> A short article with a title like
> 
> *Rent vs Buy, Whats the best option in 2006?*
> 
> So you are ____ earning ____ and are confused with the property market...
> A typical X bedroom house in XXX costs, YYY, can be rented for approximately ZZZ. or mortgaged with a 30 year mortgage for .... Is it better to buy or rent. Note that the buying assumption is the 'best case' scenario, a couple with a steady income expecting > inflation salary increases and good job propsects.
> Whats the best thing to do? Rent is dead money and you'll never see it again, but Houses prices are sky high. 30 years is a long time to be paying back a mortgage, and inflation aint what it used to be. The 50k given to Bertie back in the early 90's is still a lot of money when compared against nearly everything but house prices.
> 
> Risk
> 
> Rent is dead money. You are guaranteed never to see it again. So after 5 years you have lost xxxx, assuming rent increases of X%. Assuming you were able to finance the mortgage, and lived the same lifestyle, you would now have zzz sitting in your Rabo bank account...
> By Buying, After 5 years, you will have paid back xxxx, and taken zzzz off the mortgage. Assuming interest rates remain unchanged. Hopefully, if prices increase by X% per year, you will have a paper profit of ....
> 
> Betting your future on the ECB
> 
> But over 5 years rates WILL change. They can go up or down. there has been increases of 1.25% since the historic lows of 2004. The smart (long term financial rate) money is that they will be at xxx which means the bank will charge you 5%
> 
> Now, assume the predicted interest rates rises of for 2007 occur, then stabalize for a 2 years and drop 1%. Thats Then do the calculations..
> 
> If you rent, its easy you'll still have lost xxxx paying rent, and if you kept the same lifestyle as the guy paying the mortgage, you'll have xxxx in your Rabobank... If you werent able to save the mortgage repayments every month, you will have less, but you wont have lost anything
> If you bought, you'll have paid off .... What will the asset be worth?
> 
> I think it would show the risk is with the buyers...
> 
> *So whats the decision*
> 
> Rent for a year, see what happens... After all, when prices get to 500k, a 20k increase in prices increase in a year wont kill you. But a 1% increase in rates will, its another 5k to be found in that year....
> 
> 
> 
> http://www.askaboutmoney.com/showpost.php?p=283486&postcount=4625 is the best post on the thread and illustrates how people are betting their financial future on the ESB rate which is at historic lows and the bet is they stay there...
> 
> I think rather than emotional talk of a 'bubble' or crash, the facts speak for themselves...
Click to expand...


----------



## zac

fatmanknows said:


> Remind me again which Banks only weeks ago were forecasting Property Price Growth for the remainder of 2006 and 2007. I'd be happy to write any Derivative on their views for them. Phone number with the Moderator should they wish to seek me out.



BOI saying 3% next yr and NIB 7, last i read, think we can do with irish housing derivatives, why dont you float them on CME instead, US housing already there, dont think banks gonna take your challenge? nice thought though


----------



## StoppedClock

zac said:


> could it be that only those who have missed the boat hang out here?
> could it be that they are too busy counting their cash or shopping from their equity withdrawls?
> maybe we have only those ppl here who cant afford to buy and waiting for a crash so that they can buy?


 


zac said:


> looks like i touched some nerves here,  i dont care why you are here and neither should you about me,
> dont think i said im bullish on irish residential property, dont own one either, do own european and asia pac commercial propery funds tho and wont take too long to quit them either if they break their trends


 
I think I misunderstood your original post, it appears you have one of those strange sense of humours that no-one else really gets.


----------



## zac

Duplex said:


> Lets say Zac that when it comes to property that I am as well qualified to discuss property as anyone in these banks.  And better qualified than Eddie Hobbs



good stuff, dint think we had many well qualified ppl here 
you can share your qualification if you feel like, always good to listen to well qualified ppl.


----------



## whizzbang

MadPad said:


> As theres no bulls on the thread, i think its only fair to draw your attention to...
> 
> Eddie Hobbs agrees, saying: "Poor auction results do not mean Armageddon, and anyone who thinks so demonstrates a complete lack of understanding of what a crash actually means. Our economy is ....
> 
> ...



Attack the argument not the person Eddie....


----------



## whizzbang

Duplex said:


> Why don't the bulls come on here and debate? Or maybe the Indo or Times would accept an article from members of this board who are in agreement that a property bubble exists in Ireland?


 
letter to the editor anyone?


----------



## StoppedClock

whizzbang said:


> Duplex said:
> 
> 
> 
> letter to the editor anyone?
> 
> 
> 
> 
> I love the way the article just ends...
> 
> "Eddie Hobbs agrees, saying: "Poor auction results do not mean Armageddon, and anyone who thinks so demonstrates a complete lack of understanding of what a crash actually means. Our economy is "
> 
> Its almost as if he was going to say something that the powers that be don't like and they pulled the plug...
> 
> So this weeks competition to win a free ticket to the HOK foreign property expo choose one of the following:
> 
> Eddid Hobbs was recently misquoted in the Indo saying:
> 
> Our economy is :
> 
> a) based on solid fundamentals
> b) floundering
> c) manipulated by VI to line their own pockets
Click to expand...


----------



## whizzbang

MadPad said:


> Duplex said:
> 
> 
> 
> Maybe you should write one and submit it? I think an alternative viewpoint is always welcome but most bearish articles annoy even neutral people... heres a start
> 
> A short article with a title like
> 
> *Rent vs Buy, Whats the best option in 2006?*
> 
> So you are ____ earning ____ and are confused with the property market...
> A typical X bedroom house in XXX costs, YYY, can be rented for approximately ZZZ. or mortgaged with a 30 year mortgage for .... Is it better to buy or rent. Note that the buying assumption is the 'best case' scenario, a couple with a steady income expecting > inflation salary increases and good job propsects.
> Whats the best thing to do? Rent is dead money and you'll never see it again, but Houses prices are sky high. 30 years is a long time to be paying back a mortgage, and inflation aint what it used to be. The 50k given to Bertie back in the early 90's is still a lot of money when compared against nearly everything but house prices.
> 
> Risk
> 
> Rent is dead money. You are guaranteed never to see it again. So after 5 years you have lost xxxx, assuming rent increases of X%. Assuming you were able to finance the mortgage, and lived the same lifestyle, you would now have zzz sitting in your Rabo bank account...
> By Buying, After 5 years, you will have paid back xxxx, and taken zzzz off the mortgage. Assuming interest rates remain unchanged. Hopefully, if prices increase by X% per year, you will have a paper profit of ....
> 
> Betting your future on the ECB
> 
> But over 5 years rates WILL change. They can go up or down. there has been increases of 1.25% since the historic lows of 2004. The smart (long term financial rate) money is that they will be at xxx which means the bank will charge you 5%
> 
> Now, assume the predicted interest rates rises of for 2007 occur, then stabalize for a 2 years and drop 1%. Thats Then do the calculations..
> 
> If you rent, its easy you'll still have lost xxxx paying rent, and if you kept the same lifestyle as the guy paying the mortgage, you'll have xxxx in your Rabobank... If you werent able to save the mortgage repayments every month, you will have less, but you wont have lost anything
> If you bought, you'll have paid off .... What will the asset be worth?
> 
> I think it would show the risk is with the buyers...
> 
> *So whats the decision*
> 
> Rent for a year, see what happens... After all, when prices get to 500k, a 20k increase in prices increase in a year wont kill you. But a 1% increase in rates will, its another 5k to be found in that year....
> 
> 
> 
> http://www.askaboutmoney.com/showpost.php?p=283486&postcount=4625 is the best post on the thread and illustrates how people are betting their financial future on the ESB rate which is at historic lows and the bet is they stay there...
> 
> I think rather than emotional talk of a 'bubble' or crash, the facts speak for themselves...
> 
> 
> 
> 
> 
> Would you agree that Mortgage interest is dead money? as you are never going to see it again?
> 
> Also you have much more control over the rent you pay rather than the mortgage interest you pay.
Click to expand...


----------



## miju

zac said:


> survery conducted on ftb suggested 90%+ think prices gonna go up


 
would like to see the result of that survery , which survery was it and have you got a link?


----------



## zac

StoppedClock said:


> whizzbang said:
> 
> 
> 
> I love the way the article just ends...
> 
> "Eddie Hobbs agrees, saying: "Poor auction results do not mean Armageddon, and anyone who thinks so demonstrates a complete lack of understanding of what a crash actually means. Our economy is "
> 
> Its almost as if he was going to say something that the powers that be don't like and they pulled the plug...
> 
> So this weeks competition to win a free ticket to the HOK foreign property expo choose one of the following:
> 
> Eddid Hobbs was recently misquoted in the Indo saying:
> 
> Our economy is :
> 
> a) based on solid fundamentals
> b) floundering
> c) manipulated by VI to line their own pockets
> 
> 
> 
> 
> rest of the article is on a different page, FYI, here is wat he said:
> 
> [FONT=Verdana, Arial]"strong, so are the demographics with no suggestion of this weakening. Unless there is a shift in these pillars there will be no crash, just a cooling period which is the best possible outcome after a decade of growth."[/FONT]
> 
> he actually sounded more bearish in his last book, to me anyway.
Click to expand...


----------



## room305

StoppedClock said:


> Eddid Hobbs was recently misquoted in the Indo saying:
> 
> Our economy is :
> 
> a) based on solid fundamentals
> b) floundering
> c) manipulated by VI to line their own pockets



d) about as likely to last till May as the Taoiseach


----------



## Maine

cjh said:


> Rates slowing house price growth
> 
> Breaking news www.rte.ie
> 
> 
> House Price growth shows for the third month in a row (despite the opening of the 'selling season'?) to 1%. Attributed to Increasing interest rates.


 
August 2006 was one of the biggest months on record for mortgage and private sector borrowing ever. We are going to hit 300,000,000,000 of private sector debt (includes mortgages) in September.

International reviewers in 2007 will run out of ways to describe the scale of private sector debt in ireland.

The Central Bank is trying to spin it as a slowdown as they want an orderly slowdown in borrowing and the economy as they know foreign bankers are bemused by the situation here and that irish banks borrow heavily from abroad hence confidence needs to be maintained.

Re no bulls here look at the media reports in past 2 weeks. Also look at the jobs situation and our export / import balances yesterday to see those that are dealing outside the irish economy are struggling.


----------



## Duplex

zac said:


> good stuff, dint think we had many well qualified ppl here
> you can share your qualification if you feel like, always good to listen to well qualified ppl.


 

I think that the quality of the postings speak volumes for the calibre of the people who post on this board (present company excepted). This is a debate zac so debate.


----------



## StoppedClock

zac said:


> StoppedClock said:
> 
> 
> 
> rest of the article is on a different page, FYI, here is wat he said:
> 
> [FONT=Verdana, Arial]"strong, so are the demographics with no suggestion of this weakening. Unless there is a shift in these pillars there will be no crash, just a cooling period which is the best possible outcome after a decade of growth."[/FONT]
> 
> he actually sounded more bearish in his last book, to me anyway.
> 
> 
> 
> 
> 
> Thanks.  Are you looking online or the print version?
Click to expand...


----------



## zac

miju said:


> would like to see the result of that survery , which survery was it and have you got a link?



miju article appeared on finfacts a months or so ago, doing a search might find it for ya

i think its hardly surprising to hear a ftb saying that prices will go up


----------



## Duplex

MadPad said:


> Duplex said:
> 
> 
> 
> Maybe you should write one and submit it? I think an alternative viewpoint is always welcome but most bearish articles annoy even neutral people... heres a start
> 
> A short article with a title like
> 
> *Rent vs Buy, Whats the best option in 2006?*
> 
> So you are ____ earning ____ and are confused with the property market...
> A typical X bedroom house in XXX costs, YYY, can be rented for approximately ZZZ. or mortgaged with a 30 year mortgage for .... Is it better to buy or rent. Note that the buying assumption is the 'best case' scenario, a couple with a steady income expecting > inflation salary increases and good job propsects.
> Whats the best thing to do? Rent is dead money and you'll never see it again, but Houses prices are sky high. 30 years is a long time to be paying back a mortgage, and inflation aint what it used to be. The 50k given to Bertie back in the early 90's is still a lot of money when compared against nearly everything but house prices.
> 
> Risk
> 
> Rent is dead money. You are guaranteed never to see it again. So after 5 years you have lost xxxx, assuming rent increases of X%. Assuming you were able to finance the mortgage, and lived the same lifestyle, you would now have zzz sitting in your Rabo bank account...
> By Buying, After 5 years, you will have paid back xxxx, and taken zzzz off the mortgage. Assuming interest rates remain unchanged. Hopefully, if prices increase by X% per year, you will have a paper profit of ....
> 
> Betting your future on the ECB
> 
> But over 5 years rates WILL change. They can go up or down. there has been increases of 1.25% since the historic lows of 2004. The smart (long term financial rate) money is that they will be at xxx which means the bank will charge you 5%
> 
> Now, assume the predicted interest rates rises of for 2007 occur, then stabalize for a 2 years and drop 1%. Thats Then do the calculations..
> 
> If you rent, its easy you'll still have lost xxxx paying rent, and if you kept the same lifestyle as the guy paying the mortgage, you'll have xxxx in your Rabobank... If you werent able to save the mortgage repayments every month, you will have less, but you wont have lost anything
> If you bought, you'll have paid off .... What will the asset be worth?
> 
> I think it would show the risk is with the buyers...
> 
> *So whats the decision*
> 
> Rent for a year, see what happens... After all, when prices get to 500k, a 20k increase in prices increase in a year wont kill you. But a 1% increase in rates will, its another 5k to be found in that year....
> 
> 
> 
> http://www.askaboutmoney.com/showpost.php?p=283486&postcount=4625 is the best post on the thread and illustrates how people are betting their financial future on the ESB rate which is at historic lows and the bet is they stay there...
> 
> I think rather than emotional talk of a 'bubble' or crash, the facts speak for themselves...
> 
> 
> 
> 
> 
> I think something along those lines MP, but an explanation of what a bubble is, how the existence of such is measured against fundamentals and the fact that similar bubbles have formed and always burst in the past might be useful.
Click to expand...


----------



## Slicknik

whizzbang said:


> Also you have much more control over the rent you pay rather than the mortgage interest you pay.




You can fix your mortgage interest for a long period of tmie which gives you full control over the interest you pay. The same can hardly be said for a rented place where the price will fluctuate up and down depending on the market conditions.

/Nik


----------



## fatmanknows

Slicknik said:


> You can fix your mortgage interest for a long period of tmie which gives you full control over the interest you pay. The same can hardly be said for a rented place where the price will fluctuate up and down depending on the market conditions.
> 
> /Nik


----------



## Maine

Seem to remember that Eddie Hobbs is trying to sell a house euro 2m plus at the moment.


----------



## Duplex

StoppedClock said:


> whizzbang said:
> 
> 
> 
> I love the way the article just ends...
> 
> "Eddie Hobbs agrees, saying: "Poor auction results do not mean Armageddon, and anyone who thinks so demonstrates a complete lack of understanding of what a crash actually means. Our economy is "
> 
> Its almost as if he was going to say something that the powers that be don't like and they pulled the plug...
> 
> So this weeks competition to win a free ticket to the HOK foreign property expo choose one of the following:
> 
> Eddid Hobbs was recently misquoted in the Indo saying:
> 
> Our economy is :
> 
> a) based on solid fundamentals
> b) floundering
> c) manipulated by VI to line their own pockets
> 
> 
> 
> 
> ........grand so it is.
Click to expand...


----------



## StoppedClock

Maine said:


> Seem to remember that Eddie Hobbs is trying to sell a house euro 2m plus at the moment.


 

So that would be option C, cheers Eddie.


----------



## baby_tooth

with rate rises moderating.....!!!

rates are still at a hisotrical low level, the long term average rate in the euro zone is approx 5.5 - 6 %.

whos to say the ECB won't push up rate to 4.5% and let the economy settle, this will bring about real productivity growth and asset price correction, when the dollar drops, which it will in the medium term, then the ecb have the scope to drop rates again to stimulate eu out of a recession....

and bear in mind, that alot of credit in europe is drying up, the bottom has fallen out of the us bond market...
if your a german bank, who would you lend to...england, aussie, iceland, china, india, emerging markets and get a pretty much riskless return or aprox 6% or ireland paying eu rates of 3.75% (euribor)....

all this will, case is guessing when, have a huge effect on irish house prices.

PPL in ireland seem to have gotten all their sums wrong on their house price increase.

Eg: 400K House.

You pay out 400k now and pay back at interest rates of 3.25% plus margin. Now ppl seem to have this fascination with looking at capital appreciation, but are not factoring in a discount factor...they are using the same interest rate they are paying on as the discount factor for their "possible" returns.

Take a bank like BOI or AIB which pretty much give a market reflection of the Irish property play. These would have a discount factor of 10 - 12%  ...which is still considered very low risk (international sentiment changing here so share prices will drop to reflect risk)...making present value of your cash flows alot smaller than ppl think.

i must say that i am sitting on the sidelines on this one, watching with morbid fascination as this ecconomic oddity unravels before me.


On a side note:
PPL go on about Japan and the boom in the eighties there...has alot of similarities to here

Might be of interest to know that the Japanesse remortaged alot of their property in this period and used it to buy into "lifestyle" ""assets""...like the irish and their conservatories, plasmas and high-end motors.

They just did it with golf club memberships - their, at the time, idea of a reflection of status. Did you know that there was a Nikkei Index of Golf club memberships back through the eighties and into the ninties....its an interesting graph to watch....and one of the reasons that they have seen asset deprecation year on year to recover since it's bang!.

excuse spellings.


----------



## room305

Maine said:


> Seem to remember that Eddie Hobbs is trying to sell a house euro 2m plus at the moment.



He's trading up though isn't he? So he's not actually taking his cards off the table. You'd think the guru of prudence would see that it is cheaper to rent?


----------



## whizzbang

Slicknik said:


> You can fix your mortgage interest for a long period of tmie which gives you full control over the interest you pay. The same can hardly be said for a rented place where the price will fluctuate up and down depending on the market conditions.
> 
> /Nik



true, but then you are paying over the odds then. Also rents have been flat for the last 6 years, so I dont' expect them to change any time soon.


----------



## zac

Duplex said:


> I think that the quality of the postings speak volumes for the calibre of the people who post on this board (present company accepted).  This is a debate zac so debate.



Duplex my opinion doesnt matter, it would only matter if i was short fatmanknows housing futures... looking forward to them whenever they come out, 
wouldnt mind living in owned property rather than rental and then hedging the risk for the short term.


----------



## MadPad

whizzbang said:


> MadPad said:
> 
> 
> 
> Would you agree that Mortgage interest is dead money? as you are never going to see it again?
> Also you have much more control over the rent you pay rather than the mortgage interest you pay.
> 
> 
> 
> 
> I dont 100% agree on interest being dead money, or even on rent being dead money... Credit has been good to the ordinary man all over the last 100 years, it's enabled people to reach a certain level of wealth, by buying assets over time that they can use to generate more wealth or live in some level of independent comfort. I come from the background that you are better off owning and oweing nothing to anyone as soon as possible and am horrified at the duration of mortgages today...
> If you owe nothing, then worst case, you can close the door and the landlords/banks/bertie et all can go f themselves..
> Unfortunately, short of saving hard for many many years, or winning a dail seat... you'll need a mortgage to put a roof over your head and be able to plan to not worry about the roof over your head in X years. You dont really want to be past retirement and having to come up with a rent check for some landlord (or even some bank) do you? This may be an irish peasant mentality, but i dont really care.....
> 
> You dont own the house till the last payment but the banks do let you live in it while you pay it off, which is good of them
> You could argue that the interest part of a mortgage plus house maintenance costs is the dead money (should be the same as the rent), not the full part of the mortgage, assuming of course the underlying asset keeps its value.
> 
> Yeah, you do have control over the rent, you can move easier. You cant paint the kitchen purple or whatever, so theres trade offs there ....
Click to expand...


----------



## CelloPoint

House prices at their current levels are excluding one part of society from the fruits of the economy. Some would say that this is because they don't work hard enough - you must work harder if you want to live inside the M50. This is a lie - and is akin to the way those in Victorian times believed that poor people were poor because they were incapable of anything else (the thought that poor people were poor because of social/societal structures never entered the minds of the upper classes). Never before in the Republic of Ireland have so many hard-working people had to live in such awful conditions consisting of long commutes, management companies and the inability to procreate.

Economic success for the individual should be based on merit, and not on cute-hoorism (even if this is not actually the case, we should at least aspire to it being this way). We're essentially living in a scaled-up version of Orwell's animal farm. There's a bunch of pigs in charge in Dail Eireann, and those commuters are nothing but hard-working donkeys.


----------



## zac

baby_tooth said:


> with rate rises moderating.....!!!
> 
> 
> and bear in mind, that alot of credit in europe is drying up, the bottom has fallen out of the us bond market...
> .



baby tooth last i checked 10 yr was still trading at 7 months high, did bottom fell out pre market?


----------



## daveirl

whizzbang said:


> Whose been posting the most here?
> 
> 
> 
> congratulations whathome!
> 
> stupid 12th place...


Somone learned how to do that from the boards.ie thread 



liteweight said:


> I was surprised by the number of posts (102) that I supposedly had made. I went into my own profile and asked to see all posts by Liteweight. Counted them and it came to 42 give or take. If this count has been done automatically using names, e.g. 'search Liteweight' with automatic count, it may well be including posts where people quoted me, hence to 102 posts.


You have over 1000 posts in total, when you search in your profile it shows 42 *threads* containing posts from you. Hope that clarifies things.


----------



## room305

Given the choice I'd always prefer to own rather than rent provided it was somewhere I was happy to live for the long term.

Apart from the tax benefits of ownership, the mortgage works as a form of enforced savings. By the time you retire you own an asset that (irrespective of its nominal worth) will provide you with free rental accomodation. It would be tough to achieve the same kind of return from your savings while renting over the period of your mortgage.

That said, I'm selling now and won't be buying until the numbers make sense again.


----------



## zac

Irish Consumer Sentiment improves in September on oil price fall
        By Finfacts Team
        Sep 29, 2006, 12:16

damn, irish consumers were supposed to be crippled this morning, as per hearld am, i would have thought home owners crippling would effect this number?  i'd say the fudged the numbers?


----------



## whizzbang

MadPad said:


> whizzbang said:
> 
> 
> 
> I dont 100% agree on interest being dead money, or even on rent being dead money... Credit has been good to the ordinary man all over the last 100 years, it's enabled people to reach a certain level of wealth, by buying assets over time that they can use to generate more wealth or live in some level of independent comfort. I come from the background that you are better off owning and oweing nothing to anyone as soon as possible and am horrified at the duration of mortgages today...
> If you owe nothing, then worst case, you can close the door and the landlords/banks/bertie et all can go f themselves..
> Unfortunately, short of saving hard for many many years, or winning a dail seat... you'll need a mortgage to put a roof over your head and be able to plan to not worry about the roof over your head in X years. You dont really want to be past retirement and having to come up with a rent check for some landlord (or even some bank) do you? This may be an irish peasant mentality, but i dont really care.....
> 
> You dont own the house till the last payment but the banks do let you live in it while you pay it off, which is good of them
> You could argue that the interest part of a mortgage plus house maintenance costs is the dead money (should be the same as the rent), not the full part of the mortgage, assuming of course the underlying asset keeps its value.
> 
> Yeah, you do have control over the rent, you can move easier. You cant paint the kitchen purple or whatever, so theres trade offs there ....
> 
> 
> 
> 
> You're right, its all a mater of perspective really, how badly do you want your own place. To be honest I don't want my own place enough to lumber myself with 40 years of debt. I'll be perfectly happy to buy a place when I can do it with a  20 or 25 years mortgage. anything more than that is excessive. If by some miracle hosue prices keep going up then I guess I'm renting forever, but I dont really see that happening and I'm sure the economic cycle will bring prices down to a resonable mortgage length again. Until then I will hold off as I would feel like a total ejit for jumping on while the market is so overvalued.
> 
> I think Mortgage interest is equivalent with rent, you are paying for a service. I choose to pay to rent a place rather than rent money, thats the only difference. At the momment if I were to buy a place the money rental rate would be twice or three tiems to property rental price so I'm happy to go with the cheaper option. When these two even out more I'll consider renting money.
> 
> There are definitly benefits to owning your own place, for example, I can't buy a dog as I live in a rented apparment. But I just don't think it is worth the extra cost.
> 
> Also, I firmly believe prices cannot continue to keep rising as they are to the amount of missed out potential capital appreciation is worth the risk. Also the Capital depreciation risk grows with ever passing day.
Click to expand...


----------



## baby_tooth

5.45

5.63 1 month back

6.12 3 month

5.55 6 month

bloomberg 10yr note.

10yrs holiding up better than 5yr.

yields dropped on 5yrs t-b
"Treasuries have rallied since late June, with the yield on the benchmark 10-year notes plunging from 5.25% on bets that slowing growth will dampen inflation pressures, allowing the Fed to cut rates in early 2007. Yields on the 10-year Treasury notes, which move inversely to prices, dipped to 4.53% on Monday, the lowest level since February"


medium term view not great!

rates probably ease which puts pressure on euro.


----------



## Slicknik

whizzbang said:


> true, but then you are paying over the odds then. Also rents have been flat for the last 6 years, so I dont' expect them to change any time soon.



Same as fatmanknows I've got a 5 year fixed rate. Mine is at 3.79% so I wouldn't say I'm paying over the odds at all. And if I think that the interest will shoot up for some reason I've got the option to fix for an even longer period of time. As a tenant you have no option but paying the price that the market dictates.

And I agree, flat rents probably won't change much in the short term, but nobody can say what the rental market will look like in a couple of years time. 

So in my opionion I have a lot more control over my costs than someone who's renting.

/Nik


----------



## whizzbang

daveirl said:


> Somone learned how to do that from the boards.ie thread
> 
> You have over 1000 posts in total, when you search in your profile it shows 42 *threads* containing posts from you. Hope that clarifies things.



snared... 

any idea how you count the posts in a thread?


----------



## room305

Slicknik said:


> Same as fatmanknows I've got a 5 year fixed rate. Mine is at 3.79% so I wouldn't say I'm paying over the odds at all. And if I think that the interest will shoot up for some reason I've got the option to fix for an even longer period of time. As a tenant you have no option but paying the price that the market dictates.



How much leeway did the bank give you to negotiate the 5-year fixed rate?


----------



## whizzbang

Slicknik said:


> Same as fatmanknows I've got a 5 year fixed rate. Mine is at 3.79% so I wouldn't say I'm paying over the odds at all. And if I think that the interest will shoot up for some reason I've got the option to fix for an even longer period of time. As a tenant you have no option but paying the price that the market dictates.
> 
> And I agree, flat rents probably won't change much in the short term, but nobody can say what the rental market will look like in a couple of years time.
> 
> So in my opionion I have a lot more control over my costs than someone who's renting.
> 
> /Nik



Fair enough, thats a good rate, that being said it is a renters market at the moment so there are definitly benefits on that side too. 

I'm a bear on the prices front so I do see rent as a way of enjoying a nice place while avoiding possible house price declines.


----------



## whathome

One thing to consider in a stagnant market is how stamp duty can lock you into a property. This is more important for the trade-up market where stamp duty can be punishing.

If you purchase a house for say €670,000, you're paying €60,000 in stamp duty. So the actual cost is €730,000 + fees. If for some reason the house doesn't work out for you as a result of:

- horrible neighbours
- barking dogs
- anti-social behaviour
- commute worse than expected
- change in personal circumstances etc

If you need to move again, you've lost €60,000  
and it's even worse if you have to buy your way out of a five year fixed rate mortgage due to penalties!

Not the case if you're renting - just move at end of the lease


----------



## StoppedClock

I just had a conversation with a(n) FTB where he stated that since CPI was high this was actually going to help him in the long run as it would erode the value of his debt, however he wouldn't accept my point that he was confusing CPI with wage inflation.  Just because bread, milk, oil, fags etc. goes up does not mean someone is going to pay you more (unles you work in public sector ) he insited that it did, that this is how inflation _works_ - he hasn't had a payrise in two years but apparently that was beacuse inflation was low.  
IMO this is the flipside of the argument that landlords will put up rents if interest rates go up.  I guess you could call it Demand side economics, I demand more wages and I demand more rent .  THe fact that there is a massive oversupply of low wage employees and rental property doesn't enter into their equation.


----------



## phoenix_n

We have an internal bulletin board in work and for the first time I just noticed someone is advertising their house for Sale. Asking to contact EA for appointments. Must be a slow market if the person is now doing the work of the EA.


----------



## room305

StoppedClock said:


> I just had a conversation with a(n) FTB where he stated that since CPI was high this was actually going to help him in the long run as it would erode the value of his debt, however he wouldn't accept my point that he was confusing CPI with wage inflation.  Just because bread, milk, oil, fags etc. goes up does not mean someone is going to pay you more (unles you work in public sector ) he insited that it did, that this is how inflation _works_ - he hasn't had a payrise in two years but apparently that was beacuse inflation was low.
> IMO this is the flipside of the argument that landlords will put up rents if interest rates go up.  I guess you could call it Demand side economics, I demand more wages and I demand more rent .  THe fact that there is a massive oversupply of low wage employees and rental property doesn't enter into their equation.



I have tried until I blue in the face to explain to people that high prices are as a _result_ of inflation, they are not inflation itself. Inflation is an increase in the monetary supply. With more money around, its purchasing power erodes, manifesting in higher prices for things, be it bread or houses.

It just seems silly to me that with hyper-inflation in house prices, people still thought inflation was low because milk prices remained static.


----------



## JayDub

Another house in Mullingar dropped 25k this week

Old price *€*600,000


New Price *€*575,000
[broken link removed]


----------



## MadPad

StoppedClock said:


> I just had a conversation with a(n) FTB where he stated that since CPI was high this was actually going to help him in the long run as it would erode the value of his debt, however he wouldn't accept my point that he was confusing CPI with wage inflation. Just because bread, milk, oil, fags etc. goes up does not mean someone is going to pay you more (unles you work in public sector ) he insited that it did, that this is how inflation _works_ - he hasn't had a payrise in two years but apparently that was beacuse inflation was low.
> IMO this is the flipside of the argument that landlords will put up rents if interest rates go up. I guess you could call it Demand side economics, I demand more wages and I demand more rent . THe fact that there is a massive oversupply of low wage employees and rental property doesn't enter into their equation.


 
Ah sure theres a correlation between the decrease in the number of pirates and global warming, anything can happen ...

http://www.venganza.org
[broken link removed]


----------



## comanche

an opinion in the uk

[broken link removed]


----------



## ninsaga

whathome said:


> One thing to consider in a stagnant market is how stamp duty can lock you into a property. This is more important for the trade-up market where stamp duty can be punishing.
> 
> If you purchase a house for say €670,000, you're paying €60,000 in stamp duty. So the actual cost is €730,000 + fees. If for some reason the house doesn't work out for you as a result of:
> 
> - horrible neighbours
> - barking dogs
> - anti-social behaviour
> - commute worse than expected
> - change in personal circumstances etc
> 
> If you need to move again, you've lost €60,000
> and it's even worse if you have to buy your way out of a five year fixed rate mortgage due to penalties!
> 
> Not the case if you're renting - just move at end of the lease



fair point but I can see with some houses rented in my area that the renters don't give a crap about the place, the house appearance & gardens etc... having said that there are as many home owners who also don't look after their properties but the ratio's one renters doing this is higher.

ninsaga


----------



## whathome

ninsaga said:


> fair point but I can see with some houses rented in my area that the renters don't give a crap about the place, the house appearance & gardens etc... having said that there are as many home owners who also don't look after their properties but the ratio's one renters doing this is higher.
> 
> ninsaga


 
If in the above example instead of trading up, the purchaser decides to sell but hold off buying for a year or two, they could use the interest on deposit + saved mortgage payments to rent this gem in Sandymount:

[broken link removed] 

Try buying that for €670,000 

By renting they have no stamp duty, no maintenance fees, no insurance costs (apart from contents)
...but live in a nice house in a wonderful area while interest rates rise, watching the market fall or stagnate. If the market turns positive again, they can buy very quickly as they have nothing to sell and cash in the bank.


----------



## Neffa

whathome said:


> If in the above example instead of trading up, the purchaser decides to sell but hold off buying for a year or two, they could use the interest on deposit + saved mortgage payments to rent this gem in Sandymount:
> 
> [broken link removed]
> 
> Try buying that for €670,000
> 
> By renting they have no stamp duty, no maintenance fees, no insurance costs (apart from contents)
> ...but live in a nice house in a wonderful area while interest rates rise, watching the market fall or stagnate. If the market turns positive again, they can buy very quickly as they have nothing to sell and cash in the bank.


 
I have to say that through all the bearish arguments on AAM, this disparity (rental vs. buying the same property) is the thing which really makes me believe that there is something very, very wrong at the heart of the "for sale" market here and that there will be a correction - either sudden or drawn-out in the coming years.

My family is doing a similar thing to the plan suggested above - in fact we are renting a house in one of the nicest areas of the city for less than half of the monthly mortgage cost were we to try to buy it. 

We could not (as a rule) do this in London or other international cities which I know well. Dublin is very strange in that renting is relatively cheap by international standards but it is very expensive to buy in by international standards. Really doesn't make sense.


----------



## snuffle

Right, here's my (simplistic) view on things:
We currently rent, having decided it would be madness to pay roughly double each month to "own" the same house we currently rent.

We applied for a mortgage equal to the cost of the house we rent -over a 35 year repayment schedule -and this was over a _year_ ago...rates have gone up since then obviously,so today's cost would actually be more than double what it would be to stay renting.

OK, so we can't make major alterations to the house,but I'm 5 minutes from work, whereas if we bought within a comfortable and maneagable price range for us we'd be facing a commute (also factor in petrol costs/wear and tear on two cars instead of one) we're currently in a neighbourhood I'd never be able to afford if I were to buy, we can change the decor/furniture as we wish within reason (and have done), we can have pets if we like -which we do - and kids too if we like,  as we are not crippled by mortgage repayments and can take the hit of one wage, or alternatively move to a cheaper house which, while slightly smaller, would still be more than adequate for one or two additions to the family seeing as we currently have 3 spare bedrooms we don't use....we don't have the worry of what if the washing-machine packs up or a window falls out to budget for either...

While I know we don't own anything at the end of paying out all that rent, in the worst case scenario assuming we never manage to buy and looking at it in a purely non-emotional way(and don't slate me for being a cold greedy inheritance-ogling so-and-so, I'm not, this is purely based on simple fact, not on what I am planning for or wishing for) we will still end up with our own house(s) by the time we are of retirement age as our respective sets of parents - who of course own their properties outright - will not live to the grand old age of methuselah (more's the pity) unless there are amazing advancements in medical procedures.  Being an only child means unless I rightly peeve them in the future I know the house will be left to me.

Where is the incentive to buy a house now and cripple ourselves to the point of scraping together a fiver for some beans and toast and putting off having kids til we're into our 50's and expose ourselves to the rises in rates? 

The brother in law has just informed us that after coming out of his fixed term period, his _weekly_ mortgage repayments have just jumped by €80 which means the whole family are stretched uncomfortably, while we tick merrily along with no such increases.  

All the while I listen to the chit chat in work of people planning to remortgaging their house (bought less than a year ago in most cases) to finance the big wedding/jeep/holiday/whatever, with not a thought that seeing as they are already stretched as it is, an interest hike will only serve to add to the financial misery they are serving in thier terraced "townhouses" miles away from work.  However, I am seen as the crazy one for refusing to buy an overpriced heap of badly constructed bricks and mortar in a new sprawling estate an hour away from work/friends/town. I am looking forward to the day when realisation dawns on the co-workers that perhaps I am not such a lunatic after all...


----------



## bearishbull

Neffa said:


> I have to say that through all the bearish arguments on AAM, this disparity (rental vs. buying the same property) is the thing which really makes me believe that there is something very, very wrong at the heart of the "for sale" market here and that there will be a correction - either sudden or drawn-out in the coming years.
> 
> My family is doing a similar thing to the plan suggested above - in fact we are renting a house in one of the nicest areas of the city for less than half of the monthly mortgage cost were we to try to buy it.
> 
> We could not (as a rule) do this in London or other international cities which I know well. Dublin is very strange in that renting is relatively cheap by international standards but it is very expensive to buy in by international standards. Really doesn't make sense.


Its a classic asset bubble. prices nearly completely detached from fundamentals (rents) fueled by low financing costs. Financing costs are now rising and borrowing capacity is being reduced so the detachment from fundamentals is being examined more by investors etc. At least in london a property (despite being considered by many to be overpriced) you can get a yield twice as good as dublin. High house prices are just pushing up costs which we should be trying to control in the ever increasingly globalised world. If house prices halved people would be too unhappy about wages being 20% less. We have a lot of rebalancing to do in the irish economy.


----------



## bearishbull

People forget to put a value on the lost time with your children/family/friends, i'd want an extra 20k a year to sacrifice leisure time and time with family/friends. renting close to work/family/friends/leisure locations saves you time/money/stress etc


----------



## fatmanknows

Neffa said:


> ................We could not (as a rule) do this in London or other international cities which I know well. Dublin is very strange in that renting is relatively cheap by international standards but it is very expensive to buy in by international standards. Really doesn't make sense.


 
London is a city in which I too have a reasonabe knowledge of vis a vis property. Whilst accepted that the London market too is considered to be very toppy at the moment ,  the rental yields (historically low) at least bear some correlation to the cost of the property. In Ireland, the current yields (Dublin in particular) can only be of appeal to a brain-dead investor. I suppose the market is made up of all sorts - thats what makes a market.

I would be no different to anybody else in that I much prefer the idea of owning my own roof.........but not at any cost. Arguments put forward that rent is dead bread whilst mortgage payments means you own for what your paying..... I should hope so, with property at current levels it appears to be a case of 'buy two get one'.


----------



## Maine

Extract from Goodbodys report today​ 
"The performance of the external trade sector continues to be underwhelming. While exports were ahead by 5.9% yoy
in the first half of the year (mainly due to services exports), imports grew by 6.8%. Therefore,while the economy continues to grow at a rate above 5%, all of this is due to internal buoyancy". ​ 
No doubt this type of economic performance can sustain some of the highest property prices on the planet.......not.  Its even more scary when you remember the inflated prices of exports and understated cost of imports that multinationals are using to max tax benefit here.


----------



## beattie

fatmanknows said:


> In Ireland, the current yields (Dublin in particular) can only be of appeal to a brain-dead investor.


 
There are no shortage of them here but I don't know for how much longer the will keep propping up the market


----------



## StoppedClock

Assuming the average salary is what 30k? this is roughly €15 an hour. I rent 5 minutes from work, if I bought I would be at least 70 mins commute each way. 

Assuming you value your personal time then purely from a commuting POV that is (70 - 5)/60 * 2 * 5 = 10.9 hours pw ~ €162 pw or €700pm. 

This is ONLY the time-cost for commuting on an average wage. Think about it!

Strip away all the other savings from renting over buying and you still would be €700pm better off.


----------



## liteweight

daveirl said:


> Somone learned how to do that from the boards.ie thread
> 
> You have over 1000 posts in total, when you search in your profile it shows 42 *threads* containing posts from you. Hope that clarifies things.



Afraid not. I physically counted how many POSTS I made in this particular thread and it was 42 not 102. If there are 42 threads by me, then it's pure coincidence. The reason I bothered to count, was that I knew I don't post on this thread that often. Back to the drawing board!

PS I've actually started 20 threads!!


----------



## Jeanne

snuffle said:


> Right, here's my (simplistic) view on things:
> We currently rent, having decided it would be madness to pay roughly double each month to "own" the same house we currently rent.


 
Interesting post. Your approach makes perfect sense. It's baffling really why it doesn't make sense to a lot more people. It can only be because they are gripped by fear at the very notion of not _*owning*_ the house they live in and so they pursue that insane goal at any cost. And even when they're up their proverbials in mortgage debt the fact that they don't really own the house, the bank does, doesn't seem to sink in at all. I guess by then it's too late!  

I've been a bear on this thead since joining mid summer (it was obvious the property market was slowing) but even I didn't anticipate such a rapid change in sentiment. I've seen cases where the asking price has dropped by as much as 50K and still not selling. The only question now is how hard will the fall be? Are we looking at a crash in (sort-of) slow-mo or a gradual decent with a bumpy but safe landing?

I'll bet there are a few here who will predict that correctly. I guess only time will tell......


----------



## whathome

liteweight said:


> PS I've actually started 20 threads!!


 
Cecelia Ahern's new book on the housing market?


----------



## MugsGame

liteweight said:


> I was surprised by the number of posts (102) that I supposedly had made. I went into my own profile and asked to see all posts by Liteweight. Counted them and it came to 42 give or take. If this count has been done automatically using names, e.g. 'search Liteweight' with automatic count, it may well be including posts where people quoted me, hence to 102 posts.



Are you sure? I , set it to show individual posts in the results, and I see 105 posts now. Are there duplicate results in there?


----------



## liteweight

MugsGame said:


> Are you sure? I , set it to show individual posts in the results, and I see 105 posts now. Are there duplicate results in there?



That looks right to me now! Don't know what I did wrong the last time. I don't want to trawl through posts to see if there are duplicates!! Didn't realise I'd been so prolific on this thread but I suppose out of over 1k posts, 102 isn't that much!! Sorry for the confusion.


----------



## liteweight

whathome said:


> Cecelia Ahern's new book on the housing market?


----------



## hmmm

Ouch, €125,000 off of the asking price?

[broken link removed] myhome listing - 1.475m
 - 1.6m


----------



## beattie

hmmm said:


> Ouch, €125,000 off of the asking price?
> 
> [broken link removed] myhome listing - 1.475m
> - 1.6m


 
It will be interesting to see if this price reduction will garner enough interest for it to move. It looks like a trend of price reductions is well established in the more salubrious areas, something which I didn't would happen until the less attractive areas had suffered a severe downturn.


----------



## plaudit

More negative articles in the Indo today, couldn't be bothered posting them at this stage, they are all saying the same thing.


----------



## Afuera

snuffle said:


> Right, here's my (simplistic) view on things:
> We currently rent, having decided it would be madness to pay roughly double each month to "own" the same house we currently rent.


 
You're quite right. The numbers simply don't stack up.



snuffle said:


> we will still end up with our own house(s) by the time we are of retirement age as our respective sets of parents - who of course own their properties outright - will not live to the grand old age of methuselah (more's the pity) unless there are amazing advancements in medical procedures. Being an only child means unless I rightly peeve them in the future I know the house will be left to me.


 
You're parents don't owe you an inheritence though. They may have some grand plans for their retirement that might involve the need to release the equity in their house one way or an other.



snuffle said:


> Where is the incentive to buy a house now and cripple ourselves to the point of scraping together a fiver for some beans and toast and putting off having kids til we're into our 50's and expose ourselves to the rises in rates?


 
One of the incentives might be stabiltiy, as security of tenure in Ireland is a joke at the moment. IMHO unless this is addressed I don't think long-term renting will ever take off.

As things stand a young family with kids, of school going age, might be renting a house for a few years. If the landlords long-lost brother returns from abroad and needs a place to live then this is reason enough to evict the family (with notice of course). Leases in Ireland tend to be short term so there's very little protection for the tenant. Many other countries would require the tenants lease to be bought out should the landlord break it.


----------



## liteweight

Afuera said:


> your parents don't owe you an inheritence though. They may have some grand plans for their retirement that might involve the need to release the equity in their house one way or an other.



Like....illness in old age or paying for a retirement home. Even if they don't release equity to lead the high life, healthcare in Ireland is expensive in old age. Most nursing homes cost a fortune.





> One of the incentives might be stabiltiy, as security of tenure in Ireland is a joke at the moment. IMHO unless this is addressed I don't think long-term renting will ever take off.
> 
> As things stand a young family with kids, of school going age, might be renting a house for a few years. If the landlords long-lost brother returns from abroad and needs a place to live then this is reason enough to evict the family (with notice of course). Leases in Ireland tend to be short term so there's very little protection for the tenant. Many other countries would require the tenants lease to be bought out should the landlord break it.



Or the landlord might decide to give it to his/her children who have found themselves in the same position as Snuffle. You're right, the PRTB has gone some way to providing security of tenure but this is nothing like the situation in major cities like New York where a lease can be 30 years. In the early 1900s lifetime leases were available. I was surprised when some of my old neighbours died and their children didn't inherit. Apparently they'd lifetime leases at a pound a week!! The grandchildren of the original owners inherited. There are still some houses like this in the area. The modern investor is a different sort of animal and would not dream of tying up capital in this way.


----------



## Afuera

liteweight said:


> Like....illness in old age or paying for a retirement home. Even if they don't release equity to lead the high life, healthcare in Ireland is expensive in old age. Most nursing homes cost a fortune.


 
Well I was actually thinking that they might buy a yacht and head off around the world... but your example is probably more realistic.



liteweight said:


> The modern investor is a different sort of animal and would not dream of tying up capital in this way.


 
Lifetime leases might be a bit extreme. but it should be possible for someone to have security while renting for a 5 year period at minimum. 

You're right the modern investor is a totally different animal. In the past they were mainly people with a fair bit of capital behind them and were looking at the long term. These days any Joe Soap trading up can become an investor and drop out just as easily (or so they think!) if their circumstances change.


----------



## markyboy

hmmm said:


> Ouch, €125,000 off of the asking price?
> 
> [broken link removed] myhome listing - 1.475m
> - 1.6m



You've got to love the optimism of the "Finance this home with a monthly payment of *just *€6858" line from the mortgage company at the end of this listing.


----------



## Afuera

markyboy said:


> You've got to love the optimism of the "Finance this home with a monthly payment of *just *€6858" line from the mortgage company at the end of this listing.


 
Especially considering daft has this place to rent just down the road for EUR 2500 pm
www.daft.ie/215383


----------



## bearishbull

markyboy said:


> You've got to love the optimism of the "Finance this home with a monthly payment of *just *€6858" line from the mortgage company at the end of this listing.


Thats at current interest rates, 7500 would be a better approximation if mortgage rates were still low by at 5%. On daft theres a similar property around the corner from this one for 2500 a month, thats one third of the price of 35 year 100% repayable mortgage plus you dont have to worry about maintenece and insurance on the property. madness.


----------



## bearishbull

Beaten to it by Afuera! MAdness, how can the owner of the house renting it for 2500 a month think its a good investment when the equivalent mortgage is around 7000??


----------



## johnjoe101

Newstalk down to business show going to do a segment on housing market between now and two. If your interested usually a good show hope there is actually a bit of dedate.


----------



## snuffle

Afuera said:


> You're quite right. The numbers simply don't stack up.
> 
> 
> 
> You're parents don't owe you an inheritence though. They may have some grand plans for their retirement that might involve the need to release the equity in their house one way or an other.
> 
> 
> 
> One of the incentives might be stabiltiy, as security of tenure in Ireland is a joke at the moment. IMHO unless this is addressed I don't think long-term renting will ever take off.
> 
> As things stand a young family with kids, of school going age, might be renting a house for a few years. If the landlords long-lost brother returns from abroad and needs a place to live then this is reason enough to evict the family (with notice of course). Leases in Ireland tend to be short term so there's very little protection for the tenant. Many other countries would require the tenants lease to be bought out should the landlord break it.



I hear you, and of course I realise there are many factors which should be considered, and of course I know and realise I am not owed a thing by my parents, they've done enough raising me!  However, in my own personal situation, the parents have a wad of cash in the bank from my father's own inheritance from his parents who passed away, specifically held for their retirement, and will in the next 10/15 years (give or take) own a 2nd house (again, not something I'm looking forward to as it will be my grandmother's house which is willed to my mother -my grandmother is in her 90's and much as I'd like her to be around forever, chances are she's not going to see 120), so should they either take a mad notion and go globetrotting, or require medical/nursing homes costs, they would be more than able to afford it without having to dip into thier own house equity.  I'd like to think that by the time they reach that age where they might need treatment, I'd be earning enough to help look after them also.

I realise this sounds horribly cold and callous, but it's something that my parents have had serious discussions with me about as it was them that finally tipped the balance for me to remain renting for the immediate future - having been gobsmacked at the cost of servicing a mortgage when I was going about one. this is just from my side of the family, of course, my husband has a similar situation on his own side.  Reading back on that it sounds like I am a greedy money-hungry person, but TBH I'd prefer they lived into their 200's than to have me sitting in their house missing them.

The stability thing is something that doesn't really bother me, as there is (and always has been) plenty of housing stock in my area for rent, and with so many new apartment blocks going up day by day, the choice is only widened. If we have kids and are turfed out on our ear, we will just move within the same town to rent another property. Who knows, I may be looking to move from my area anyway for work reasons and it's a lot easier to walk away from a lease than to be stuck with a house that won't sell - even with the property climate as it is, a house we were looking at with a view to buy over 10 months ago is still on the market, not having reached it's asking price (we put in an offer of 5k under asking, and were refused, and the vendors are probably kicking themselves now as they're still stuck with it on the market).

OK, if the market falls apart, and the BTL investors have to sell at lower prices than are currently tabled leaving fewer residences for rent, I can always then dip my toe in the property pool myself, which is what I am actually aiming for rather than sitting around waiting for my poor parents to kick the bucket  
Or I can look to emigrate, which is something that is always an option.  

Apologies for waffling on for so long,  I guess I'm just trying to say that in the current climate, it makes absolutely no sense whatsoever for me to buy, and I would think I am not alone in this.   I just can't see the incentive for any young couple on an average wage to stretch themselves uncomfortably for a poor quality of life (commute, a huge proportion of their earnings servicing a mortgage for the next 35/40 years, having to put off having kids/limiting the amount they want to have due to financial considerations) to own an overpriced slapped-together-in-a-hurry residence.  

I am petrified for some of my friends who have stretched themselves to buy a house in a crummy area, who are only just keeping their heads above water in their initial fixed rate period while sitting on 2nd hand sofas eating beans on toast, who can't afford to start a family, and who literally don't know where the money will come from to service the mortgage once they come out of the fixed rate seeing as the current interest rate has already pushed the repayments they would be making well beyond their comfort zone... All this in a climate where there are job losses ahead.  I can see a situation where we might be the ones to put them up under our roof while they get back on their feet if it all goes wrong for them.

There's my sentiment for what it's worth! Again, sorry for the length of the post.


----------



## liteweight

snuffle said:
			
		

> I realise this sounds horribly cold and callous, but it's something that my parents have had serious discussions with me about as it was them that finally tipped the balance for me to remain renting for the immediate future - having been gobsmacked at the cost of servicing a mortgage when I was going about one. this is just from my side of the family, of course, my husband has a similar situation on his own side. Reading back on that it sounds like I am a greedy money-hungry person, but TBH I'd prefer they lived into their 200's than to have me sitting in their house missing them.



Undoubtedly, I've heard numerous stories of hard faced children awaiting parents' death. In fact, at a funeral, I once heard the offspring say "one down, one to go". Naturally I was horrified but I don't think this in regard to your post.

I've also had this discussion with my daughter. She found it all too upsetting but I ploughed on! There are only two certainties in life and that is that we are all born and we will all die!  

I only have her best interests at heart and sometimes we have to take a cold hard look at our position in life. This was never more true than when it comes to investing in the property market in Ireland. I don't want my children to have to live someplace where 'they eat their young' in order to get on the property ladder!!

We could help out with the deposit and go guarantor but she'd be left with the day to day expense of the mortgage and bills. At the moment, we have investments, property, and a PPR which will fetch a good price. We believe the PPR is too big for old people to live in and maintain, so when the kids leave the nest, it will go on sale. We'd much prefer to see them happy and secure while we are alive to witness it. I would never go into debt for this purpose though (property for them), as so many of my friends have done.

After that we intend to buy the yacht and perhaps go globe trotting! This is my sentiment!


----------



## markyboy

*€650k Price drop!*

*Sea Court, Butlerstown, County Cork*

According to the Examiner today this has been "relaunched" with a "revised asking price of €1.85 million, down from €2.5 million" and this includes "more restoration work"


----------



## whizzbang

liteweight said:


> That looks right to me now! Don't know what I did wrong the last time. I don't want to trawl through posts to see if there are duplicates!! Didn't realise I'd been so prolific on this thread but I suppose out of over 1k posts, 102 isn't that much!! Sorry for the confusion.



perhaps it just looks for the number of times your name appears in this thread, so any time you are quoted counts as a post?


----------



## bearishbull

*Re: €650k Price drop!*



markyboy said:


> *Sea Court, Butlerstown, County Cork*
> 
> According to the Examiner today this has been "relaunched" with a "revised asking price of €1.85 million, down from €2.5 million" and this includes "more restoration work"


Lovely place but you'd get it for less than a million in france.


----------



## Maine

hmmm said:


> Ouch, €125,000 off of the asking price?
> 
> [broken link removed] myhome listing - 1.475m
> - 1.6m


 

Its a significant drop.125k in one jump down is big - how did the EA get them to do that.

We were all told in 2005 that interest rates would move up this year yet it did not stop the "spring" boom.  This indicates that the next 2 interest rises are not yet priced in by the wider population. The October increase will shake the pyramid further and combined with a december rise will IMO put further pressure on prices.  

If the market does not shift the current stock before next springs selling season then it we could see a real slowdown even if rates do not rise further for a few months of 2007. There may not be a dead cats bounce.


----------



## Jeanne

I passed a house in the D14/16 area on view this afternoon and couldn't resist walking veeery slowly past and gawking in to see how many were in there viweing. No sign of activity or a line out the door and no sign of anyone inside other than the EA (I presume she was the EA) who, have to say, cut a lonely figure. Front door was wide open to greet all those property hungry punters who accoding to EA's are still out there, yet the place was empty. I guess the lashing rain today didn't help


----------



## plaudit

Maine said:


> We were all told in 2005 that interest rates would move up this year yet it did not stop the "spring" boom. This indicates that the next 2 interest rises are not yet priced in by the wider population.


 
This is a lot of the problem in this country, people do not realise that central banks tend not to like suprising the market so they give plenty of advance notice of possible rises and then closer to the time if it becomes probable that a rate rise is coming they indicate that too. The interest changes get priced in by the market gradually.

3.5% is pretty certain by Christmas and further rises are being indicated. The tone at next weeks press conference will give us an indication if we can expect a rise again in the new year.


----------



## snuffle

liteweight said:


> Undoubtedly, I've heard numerous stories of hard faced children awaiting parents' death. In fact, at a funeral, I once heard the offspring say "one down, one to go". Naturally I was horrified but I don't think this in regard to your post.
> 
> I've also had this discussion with my daughter. She found it all too upsetting but I ploughed on! There are only two certainties in life and that is that we are all born and we will all die!  .....
> 
> 
> ..... we intend to buy the yacht and perhaps go globe trotting! This is my sentiment!



  Some lovely children out there alright!! One down indeed. Horrid. As I said, I'd prefer to have my parents enter the guinness book of records for living to 200...and like your daughter, I too was upset when I heard my parents talk about "inheritance" while they're still fit and healthy prime of their life people! 

Seems the "Celtic tiger" has brought about a really unseemly obsession with money above and beyond all else, which I do not like. The sooner people realise what is important in life the better. Could be in for a wait on that front though, although perhaps if (when) the bubble bursts - when interest rates rise just that little bit too high for most FTBers to pass the stress test criterion of mortgage lenders meaning the bottom rung falls out of the ladder - people might just about start realising the usual foghorn blather about "how much my house has appreciated" is not the most vital dinner party conversation topic.

PS I love your idea of the yacht...your retirement PPR


----------



## blindjustice

Sentiment at this stage................

Its gonna be a crappy Christmas for some people and a worse new year!





("get on the property ladder - the sooner the better" - they never mention ya can fall off - Trichet down at the bottom shaking!)


----------



## Remix

Very funny (may as well have a laugh while prices are at these levels!)

Posted by "chriso" over on HPC



> *I Got €800,000 Burning A Hole In My Pocket*, Which of these two do you like best?
> 
> [broken link removed]
> 
> or


----------



## whathome

From the Sunday Business Post:

*A warning from deserted ghost estates *

[broken link removed]



> In a country where the construction industry is operating at full tilt, where 50 per cent of our new builds will be bought to be left vacant and when strains are appearing in the frothy auction market, the existence of ghost estates of vacant houses is a very bad sign.


----------



## whathome

Interesting that a mortgage provider is pleading for the 2% stress test to be abolished!!!

*Regulator to insist on mortgage stress-test requirement *

[broken link removed]



> The regulator’s statement comes at a time when one mortgage provider is arguing that it would no longer make sense for the Financial Regulator to require lenders to test the ability of borrowers to serve their mortgages if European Central Bank rates rise by a further 1 per cent.


----------



## whathome

From Today's Independent:

*'Washout week' isn't the real iceberg that'll sink the boom*

http://www.unison.ie/irish_independent/stories.php3?ca=35&si=1698385&issue_id=14715



> This sort of thing may be new to the young, but they are the ones most likely to be alarmed about it. They, after all, are most exposed to the property market, since they will have bought recently, and usually with heavy borrowings. But many investors must also have shuddered, and wondered if the game is up.


----------



## plaudit

whathome said:


> Interesting that a mortgage provider is pleading for the 2% stress test to be abolished!!!
> 
> *Regulator to insist on mortgage stress-test requirement *
> 
> [broken link removed]


 
Is this article saying that banks think because rates have risen by 2-3% that thats it, they can't possibly rise again by more than another 1%?


----------



## plaudit

Also from todays business post:

"New borrowers will only be offered 75 per cent of the mortgages that they qualified for last December, if rates continue to rise at current levels."

Its only now that the first few rounds of interest rate hikes are really beginning to sink in, wait until there are a few more hikes.


----------



## soma

SBP said:
			
		

> The argument advanced by the mortgage lender is that if ECB rates rose to 4 per cent, it would not be rational to retain the 2 per cent stress test ‘‘since rates would then be at their peak and likely to fall’’.



Stunning


----------



## plaudit

soma said:


> Stunning


 
It appears to me that all the vested interests view these rate hikes as nothing more than an inconvenience, a few awkward questions from buyers - extra hassle - that they don't need.

There seems to be a certainty in most quarters that prices will just keep on rising, and the gravy train will just enter a speed limit zone for a while before it accelerates again.


----------



## blindjustice

"GHOST ESTATES" -----------WOOOOOOOOOOOO!!!!!!!!!!!!! 


Genuinely scary


----------



## thewatcher

whathome said:


> Interesting that a mortgage provider is pleading for the 2% stress test to be abolished!!!
> 
> *Regulator to insist on mortgage stress-test requirement *
> 
> [broken link removed]


 
Some mortgage lenders are obviously prepared to destroy this country all in the name of profit,they should be stopped.
They must have the belief that the government will bail them out when the apocalypse comes,what was it gordon gekko said "greed is good".
Won't somebody please think of the children !


----------



## blindjustice

thewatcher said:


> Won't somebody please think of the children !




oh the humanity of it all...............



The Horror!


----------



## MadPad

whathome said:


> Interesting that a mortgage provider is pleading for the 2% stress test to be abolished!!!
> *Regulator to insist on mortgage stress-test requirement *
> [broken link removed]


 
I'm shocked that a mortgage provider would dare float an idea like that in public. Its a definite sign that the increases are starting to bite...

Surely theres somebody in management positions in these outfits over the age of 25 who can at least remember rates before 2001. 

Maybe the regulator could call their bluff, if they dont want to stress test, maybe that provider would like to offer a 30 year fixed rate at todays rate, with no exit penalties?


----------



## beattie

Sherry Fitz out with figures saying that the market is entering a 'soft landing' phase. They indicate that the figures for Dublin are less than the rest of the country which I thought was remarkable.

Their CEO was interviewed on Morning Ireland trying to allay fears of a slowdown. He didn't sound very convincing. The interviewer pressed him on why one would buy now if stamp duty could be abolished in the future. 



http://www.rte.ie/business/2006/1002/houses.html


----------



## phoenix_n

beattie said:


> Sherry Fitz out with figures saying that the market is entering a 'soft landing' phase. They indicate that the figures for Dublin are less than the rest of the country which I thought was remarkable.
> 
> Their CEO was interviewed on Morning Ireland trying to allay fears of a slowdown. He didn't sound very convincing. The interviewer pressed him on why one would buy now if stamp duty could be abolished in the future.
> 
> 
> 
> http://www.rte.ie/business/2006/1002/houses.html


 
Yeah heard that this morning. But passengers sit tight, the plane has not soft landed but stalled and if you like to look out your windows you can see we are still 40% above ground.


----------



## Superman

One point I don't fully understand about the "soft landing" theory is:
why would anyone buy into it now?  Yields do not appear to be sufficient relative to costs of the properties, and as there is no capital appreciation, buying in doesn't make sense.  
If there are no buyers, then the properties are not worth what they are currently "valued" at - and must fall to a point where the percentage yield is corrected (wherever that might be).


----------



## beattie

Superman said:


> One point I don't fully understand about the "soft landing" theory is:
> why would anyone buy into it now? Yields do not appear to be sufficient relative to costs of the properties, and as there is no capital appreciation, buying in doesn't make sense.
> If there are no buyers, then the properties are not worth what they are currently "valued" at - and must fall to a point where the percentage yield is corrected (wherever that might be).


 
It doesn't make any sense whatsoever for someone to buy now but I can't see them falling to a price where a sensible yield can be derived (~6%) in the short term unless there is a drastic increase in rents which isn't going to happen.


----------



## StoppedClock

beattie said:


> It doesn't make any sense whatsoever for someone to buy now but I can't see them falling to a price where a sensible yield can be derived (~6%) in the short term unless there is a drastic increase in rents which isn't going to happen.


 

We might not see prices falling to give a sensible yield of 6% but I can certainly see them falling to give a yield of a little over (+1%) the interest rates whatever that may be.

Amongst my circle of friends we have moved from denial that prices could ever drop (because falling house prices would ruin the economy and that can't happen), through grudging acceptance that they may drop, then throught realisation that they will drop and now as people percieve that they may have started dropping some have gone a stage further and are now considering selling up and emigrating (because falling house prices would ruin the economy) and they can trouser a healthy profit now. No STR's (yet). It's all sentiment and it is changing, the only way it can be avoided if the VI's mount one hell of an offence and can some how turn people around. So far the response have been very weak and makes me think they were unprepared for the speed of the change, also makes me feel a little sorry for them because it appears they actually belived there own hype.


----------



## phoenix_n

beattie said:


> It doesn't make any sense whatsoever for someone to buy now but I can't see them falling to a price where a sensible yield can be derived (~6%) in the short term unless there is a drastic increase in rents which isn't going to happen.


 
yes but you have to factor in that sometimes people really have to sell. moving overseas, moving county, can't afford repayments,separation etc. Called 'stressed vendors' and is really where prices will take that noticeable drop first. As a side note if you really have to buy then this is your first criteria; not a kitchen extension but a stressed vendor.


----------



## Remix

beattie said:


> Sherry Fitz out with figures saying that the market is entering a 'soft landing' phase. They indicate that the figures for Dublin are less than the rest of the country which I thought was remarkable.
> 
> Their CEO was interviewed on Morning Ireland trying to allay fears of a slowdown. He didn't sound very convincing. The interviewer pressed him on why one would buy now if stamp duty could be abolished in the future.
> 
> 
> 
> http://www.rte.ie/business/2006/1002/houses.html


 
Surprise! DNG are out contradicting Sherry Fitz saying they expect house prices to fall (less than 5%) in the second quarter next year.

Read it in the Indo this morning. I'll see if I can find a link.


----------



## plaudit

Remix said:


> Read it in the Indo this morning. I'll see if I can find a link.


 
Clip from Indo:

_Douglas Newman Good, which will publish a report on house prices today, said prices could fall in the second quarter of next year. _
_Rival Sherry FitzGerald is not only predicting that growth will continue, but said growth levels next year will be even greater than those experienced at present._


----------



## redo

http://www.unison.ie/irish_independent/stories.php3?ca=184&si=1698642&issue_id=14716


----------



## Duplex

plaudit said:


> Clip from Indo:
> 
> _Douglas Newman Good, which will publish a report on house prices today, said prices could fall in the second quarter of next year. _
> _Rival Sherry FitzGerald is not only predicting that growth will continue, but said growth levels next year will be even greater than those experienced at present._


 

DNG are possibly attempting to 'manage' their client's expectations in a slowing market (estate agents make money/ survive on volume).  Sherry FitzGerald seem to be 'true believers' they will probably stick to their guns until falling volumes start eating into their bottom line.


----------



## Howitzer

> In a report yesterday, Marian Finnegan, chief economist at Sherry FitzGerald, gave a much more upbeat forecast. She said: "The short-term deceleration in the pace of house price inflation is a result of a number of unique market conditions, most especially the current interest rate environment. It is a temporary phenomenon.


 
WTF? Interest rates moving to a neutral position is a unique and temporary phenomenon? These people are morons.


----------



## redo

Howitzer said:


> WTF? Interest rates moving to a neutral position is a unique and temporary phenomenon? These people are morons.


There is a article in the current Irish Property Buyer which Marian Finnegan says that now is a good time to buy.  Surely she has lost all credibility at this stage.


----------



## Remix

What an interesting year 2006 is turning out to be.

It started by giving us one of the most severe periods for house price inflation recorded and the latter part may be presenting a boom turning to bust. 

That early lending frenzy and last great price push turned out an extraordinary stroke of good-luck - or something! - for any smarties who sold their property portfolios before the current slowdown.


----------



## daveirl

NewsTalk had Jim Power from Friends First on this morning. He said we were experiencing the 'soft-landing' and the current oversupply would work it's way through the system over the next few months and then we'd reach equilibrium.


----------



## room305

Duplex said:


> DNG are possibly attempting to 'manage' their client's expectations in a slowing market (estate agents make money/ survive on volume).  Sherry FitzGerald seem to be 'true believers' they will probably stick to their guns until falling volumes start eating into their bottom line.



DNG are notorious for gaining clients by touting higher asking prices than their rivals. In fact, they frequently boast of achieving higher sales prices than any agent in a given area (which begs the question - who would buy from them?). This tactic was probably extraordinarily successful in a booming market but is no doubt killing them since the market started to weaken.

Clearly, DNG have quickly grasped the new reality but SherryFitz have a steep learning curve ahead.


----------



## plaudit

room305 said:


> In fact, they frequently boast of achieving higher sales prices than any agent in a given area (which begs the question - who would buy from them?). This tactic was probably extraordinarily successful in a booming market but is no doubt killing them since the market started to weaken.


 
I think it works like this. I have a house for sale and so does my neighbour. I go to SF and DNG (so does my neighbour) SF say its worth €400K, DNG say its worth €420K. I go with DNG the neighbour goes with SF. The neighbours house sells first (because its cheaper), but because the prices are rising by 10% per year anyway, my house sells 6 months later for €420K, I just have to wait a little longer.

Like you said, works well in a rising market when exaggerated prices now become normal prices in 6 months.


----------



## StoppedClock

plaudit said:


> I think it works like this. I have a house for sale and so does my neighbour. I go to SF and DNG (so does my neighbour) SF say its worth €400K, DNG say its worth €420K. I go with DNG the neighbour goes with SF. The neighbours house sells first (because its cheaper), but because the prices are rising by 10% per year anyway, my house sells 6 months later for €420K, I just have to wait a little longer.
> 
> Like you said, works well in a rising market when exaggerated prices now become normal prices in 6 months.


 
Such chancers.  How about starting a new thread "Current public sentiment towards Estate Agents?"


----------



## room305

plaudit said:


> I think it works like this. I have a house for sale and so does my neighbour. I go to SF and DNG (so does my neighbour) SF say its worth €400K, DNG say its worth €420K. I go with DNG the neighbour goes with SF. The neighbours house sells first (because its cheaper), but because the prices are rising by 10% per year anyway, my house sells 6 months later for €420K, I just have to wait a little longer.



Similarly, if both of you go with DNG they will overprice both - so maybe €420k for one house and €440k for the other. They then flog the cheaper of the two on the basis that it is well priced compared to other property in the area. Selling the house for €440k merely entails getting another client on the books to price at €460k.

As the saying goes "everyone is a genius in a bull market".


----------



## plaudit

But if we enter a bear market then the guy holding the house for sale at €460K loses hard as the other for sale houses in the area drop to 440, 420, 420, 400......


----------



## phoenix_n

daveirl said:


> NewsTalk had Jim Power from Friends First on this morning. He said we were experiencing the 'soft-landing' and the current oversupply would work it's way through the system over the next few months and then we'd reach equilibrium.


 
Yes but for those who bought with the sole intention of gaining on appreciation which is not now going to realise , they will want out as the 'soft landing'  is already biting into the already made 'profit' in the current PPR equity. 

As it happens everywhere watch the first strains on 1/2 bed apartments on outer ring of Dublin.


----------



## plaudit

I am going to make a simplistic argument / theory, please pick holes in it as ye so wish.


75000 people arrive here each year, lets say 3 per house, they need 25000 houses. 50000 people do the leaving cert per year, lets say 2 per house, thats another 25000 houses = 50000 houses per year needed. Old people die and free up houses, some people still emmigrate, so lets say that frees up 10000 houses, so we need 40000 new houses per annum at current immigration rates, but already we are building 90000 houses. We are building 40000 houses more than needed.

Am I missing something or is this a reasonabe picture of the situation?


----------



## StoppedClock

plaudit said:


> I am going to make a simplistic argument / theory, please pick holes in it as ye so wish.
> 
> 
> 75000 people arrive here each year, lets say 3 per house, they need 25000 houses. 50000 people do the leaving cert per year, lets say 2 per house, thats another 25000 houses = 50000 houses per year needed. Old people die and free up houses, some people still emmigrate, so lets say that frees up 10000 houses, so we need 40000 new houses per annum at current immigration rates, but already we are building 90000 houses. We are building 40000 houses more than needed.
> 
> Am I missing something or is this a reasonabe picture of the situation?


 
While your figures are fairly rough I would concur, hence the growth from 140,000 to 230,000 vacant houses since last census.


----------



## cjh

There was an article in Sunday's Business Post (www.sbpost.ie) about 'Ghost Towns' of empty investor properties in the west/midlands.


----------



## room305

plaudit said:


> Am I missing something or is this a reasonabe picture of the situation?



I think demand has been calculated at between 45k and 60k a year. The building of 90k+ houses are year was supposed to make up for a shortfall and return us to a state of "demand/supply equilibrium".

How a shortfall in housing could exist with so much vacant property around is anybody's guess.


----------



## whizzbang

room305 said:


> I think demand has been calculated at between 45k and 60k a year. The building of 90k+ houses are year was supposed to make up for a shortfall and return us to a state of "demand/supply equilibrium".
> 
> How a shortfall in housing could exist with so much vacant property around is anybody's guess.



My guess is that its't people claiming it is their PPR while living with parents/otherhalf in a more reasonable location. Hoping that by not renting it out they will avoid tax when the sell it. 

I guess it is possible people may own multiple places like this and are hoping to avoid tax on sales as they were never rented?

Does the revenue know if you have multiple houses or do you have to disclose it to them? Is the system smart enough to identify if someone is claiming to have 3 PPRs?


----------



## hmmm

whizzbang said:


> Does the revenue know if you have multiple houses or do you have to disclose it to them? Is the system smart enough to identify if someone is claiming to have 3 PPRs?



Doesn't really matter if the system is smart enough now, it's an easy enough system to build so even if you escape now you will be caught in the future. I'm sure Revenue will get around to it when they need the money.


----------



## bearishbull

It's some deceleration from first or second quarters to third quarter. Thing is a soft landing is (as many have pointed out here in last year) impossible. As soon as prices stagnate for a few quarters those that were only in it for capital appreciation will seek to exit as they see no capital appreciation and no pricing power in rental market.When these speculators exit they wont be holding on for best price and as prices begin to fall due to distressed sellers panic sets in and a negative downward cycle begins. Also if there was such an undersupply of property in dublin why are rents not much higher than they are now(relative to income,rents 5 years ago etc)?? 
Sentiment is everything in any market and the sentiment has most definetely changed significantly in last 4 months. The CEO of Toll brothers in USA commenting on recent house price falls said it was all down to sentiment as the economy is still doing very well over there.


----------



## hmmm

plaudit said:


> 75000 people arrive here each year, lets say 3 per house, they need 25000 houses.


If there's no jobs here, they'll stop coming. What happens to those already here who work in construction?


> 50000 people do the leaving cert per year,


A figure that is decreasing every year


> We are building 40000 houses more than needed.


Assuming inward migration of 80000 (?) a year continues. Imagine what happens if that stops.


----------



## room305

bearishbull said:


> The CEO of Toll brothers in USA commenting on recent house price falls said it was all down to sentiment as the economy is still doing very well over there.



I think he is dreaming if he thinks the US economy is in a healthy shape but he makes a good point. Negative sentiment causes buyers to disappear from the market or hold out for lower prices.


----------



## bearishbull

room305 said:


> I think he is dreaming if he thinks the US economy is in a healthy shape but he makes a good point. Negative sentiment causes buyers to disappear from the market or hold out for lower prices.


I'd disagree, unemployment is very low, incomes rising, stock markets at all time highs. there are clouds on the horizon but for the time being consumer sentiment is still strong in US and seems little economic reason for house prices to fall.


----------



## fatmanknows

Been speaking over weekend with a couple of contractors involved in the new residential build sector. Telling me to expect to hear of an increasing number of lay offs over the next few months. Lay offs have already begun and there is already a serious fall off in the number of new residentials started or expected. We are way past the peak of job creation in the sector and likely to be at the start of a bad downturn for the construction sector. Not quite sure which sectors are going to mop up the new arrivals in the country.


----------



## Howitzer

fatmanknows said:


> Not quite sure which sectors are going to mop up the new arrivals in the country.


 
Real Estate Economists? They're like cockroaches, kill one and 5 spring up in their place.


----------



## plaudit

fatmanknows said:


> Not quite sure which sectors are going to mop up the new arrivals in the country.


 
Well with our completely overpriced cost structure we are in big trouble.


----------



## whizzbang

hmmm said:


> Doesn't really matter if the system is smart enough now, it's an easy enough system to build so even if you escape now you will be caught in the future. I'm sure Revenue will get around to it when they need the money.



Absolutely agreed, I'm just wondering are there people out there who "know a fellah who did this and the revenue never caught him" so they may try it themselves.

I think the revenue see a lot of these dodgers as their "Rainy day fund", same with unregistered landlords.


----------



## Bedsit

Check out this [broken link removed] I was amazed at the asking prices and the size of the houses compared to Ireland.


----------



## room305

bearishbull said:


> I'd disagree, unemployment is very low, incomes rising, stock markets at all time highs. there are clouds on the horizon but for the time being consumer sentiment is still strong in US and seems little economic reason for house prices to fall.



US auto industry in serious trouble, housing market melting, negative savings rate, massive trade deficit, falling consumer spending ...

Sounds pretty negative to me.

The economic reason for house prices to fall are the same as here - interest rates have increased significantly.


----------



## whathome

Bedsit said:


> Check out this [broken link removed] I was amazed at the asking prices and the size of the houses compared to Ireland.


 
Shame we can't get 2Pack to do a video on the back of Ballivor.


----------



## Maine

Bedsit said:


> Check out this [broken link removed] I was amazed at the asking prices and the size of the houses compared to Ireland.


 
House prices in large parts of the US are way below here and they get alot more.

Just seen that UK mortgages in August month were £9.1b which at 1.45 ytd average to euro is 13.2 Billion .

We borrowed on average ytd in 2006 E 2 billion a month.  They have about 12 times more population so they should be borrowing 24 billion a month to keep up with us.

Hence relative to the UK we are borrowing 80% more each month on mortgages ......and they think they have a debt problem.

A little crude but is this correct ?


----------



## Neffa

Maine said:


> House prices in large parts of the US are way below here and they get alot more.
> 
> Just seen that UK mortgages in August month were £9.1b which at 1.45 ytd average to euro is 13.2 Billion .
> 
> We borrowed on average ytd in 2006 E 2 billion a month. They have about 12 times more population so they should be borrowing 24 billion a month to keep up with us.
> 
> Hence relative to the UK we are borrowing 80% more each month on mortgages ......and they think they have a debt problem.
> 
> A little crude but is this correct ?


 
I think your analysis is interesting but I think the situation for Ireland is worse than you say

UK's population multiple is actually about 14.5 (60m/4.2m) so the equivalent number for new borrowing should be E29bn. So Ireland is borrowing - on a per capita level - twice the UK level. And the UK gets a lot of press internationally for a borrowing problem!


----------



## Remix

Speaking of Ireland's debt problem, I came across another eye opener the other day. As has been reported here a few times, Fitch has put Ireland on a special "risky" watch list because our ratio of private sector debt to GDP is the worst in the world.

Someone posted that this may not be as bad as it looks because this includes corporate debt.

Might be a valid point if this corporate debt was being used to fund innovation, expansion, export growth etc. but wait ! While reading the Indo last week an article mentioned there is some evidence that a significant portion of corporate borrowing is being funneled into commercial and residential property!


----------



## bearishbull

room305 said:


> The economic reason for house prices to fall are the same as here - interest rates have increased significantly.


 We had this debate before and the vast majority of people in america buy using long term fixed rates. Even when rates were 1% in america people were still getting mortgages for 5-6%. Eitherway economic conditions are generally accepted not to be bad enough to cause a housing crash based on previous crashes but it is happening because of sentiment mainly.


----------



## Remix

My guess would be that interest rates and more exotic mortgages have a lot to do with it... 
(p.s. several of the mortgage products they refer to as exotic appear to be the norm in Ireland - adjustable, IO, intro rates etc.)



> A great shift toward adjustable mortgages helped push America's housing boom into high gear. Now, as the boom unwinds, the riskier side of those mortgages is coming home to roost.
> .
> .
> .
> In 1990, the last time the nation was entering a real estate slowdown, less than 10 percent of home loans were ARMs, adjustable-rate mortgages. For the first half of this year, that number is 46 percent of the total, measured in dollar volume, says Richard Brown, chief economist at the Federal Deposit Insurance Corp.


 
[broken link removed]


----------



## soma

bearishbull said:


> We had this debate before and the vast majority of people in america buy using long term fixed rates.



Gotta strongly disagree with you there. Up until a few years ago, yes the majority of americans put 10-20% (preferably 20%) down and usually fixed their rates. But the situation really changed in the past few years with massive adoption of ARMs (what we refer to as variable rate mortgages) and some absolutely *toxic* loans such as negative amortization (where you can end up paying interest on the interest..  ) The scheer number of "ARM resets" due over the next few years has been described as a ticking time bomb by many a (IMO) clued-in commentator.

Do *not* kid yourself, the US has gotten majorly drunk on cheap credit and "exotic" forms of lending - IMO their hangover is gonna be pretty bad.


----------



## whathome

bearishbull said:


> Eitherway economic conditions are generally accepted not to be bad enough to cause a housing crash based on previous crashes but it is happening because of sentiment mainly.


 
Agree - it's mainly a sentiment fuelled drop in the US.

In Ireland we're in a more dangerous situation than the US:

- As in the US, sentiment has changed
- The Irish property bubble is *far* more inflated
- Our interest rates are *still* rising
- Our economy is more dependent on construction

The brewing storm in Ireland makes problems in the US look like a pleasant summer shower.


----------



## whizzbang

Bedsit said:


> Check out this [broken link removed] I was amazed at the asking prices and the size of the houses compared to Ireland.



now thats an eye opener... I'd love to see an equivalent for Ireland!


----------



## Jister

Jister said:


> Now that these houses are actually built they have gone from €850k to €750K!! As can be seen there are 4 available out of the original 5, despite being on the market since the development started.
> 
> [broken link removed]


 
Now available for €700k


----------



## beattie

Jister said:


> Now available for €700k


 

Timber.................


----------



## tyoung

Howitzer said:


> Real Estate Economists? They're like cockroaches, kill one and 5 spring up in their place.



lol


----------



## bearishbull

I dont know why people spend so much on houses in rural areas where theres loads of land to build on in the future. In the long run if theres demand for property is such areas more houses will be built at lower cost(even allowing for planning issues). I wouldnt pay more than cost of building and land plus 30% for a rural property.


----------



## JayDub

fatmanknows said:


> Not quite sure which sectors are going to mop up the new arrivals in the country.


The immigrants are probably better of staying at home as thats where all the Irish jobs are going. 600 jobs were lost last week with most of those jobs going to eastern europe. Another 300 jobs were lost today in Limerick. Braun announced a couple hundred layoffs a fortnight ago.


----------



## cjh

[broken link removed][discussion_id]=86512&dcn[forum_id]=4

Some comment from the Daft Discussion boards....


----------



## bearishbull

cjh said:


> [broken link removed][discussion_id]=86512&dcn[forum_id]=4
> 
> Some comment from the Daft Discussion boards....


Thise guys post is quite worrying for anyone selling......

*Comments:
*_I wrote this further down on the buying or selling thread on 14/9/2006

****

I used to be an estate agent.
Have 6 friends who still are.
They are superb agents, second to none.
About 3 weeks ago the market popped !
Buckets on for sale, more than ever before .... and NOBODY interested in even viewing.

One mate of mine works in a well-known agency.
They have 75 properties on the books .... and only 5 bids. And even they are shaky. only 1 bidder, no counter bidders.

Everyone in the office is twiddling their thumbs as the phones are not ringing.
Im not talking about no bids, Im talking about no one even ringing.
They are cancelling viewings laft, right and centre as not even 1 person is looking.

This is in the centre of Dublin, encompassing 1st time buyer market and some 2nd time buyer €700k+ properties.

Party's over folks !
-----
Now 2/10/06 

SINCE ive written this the markets gotten worse.
When you read about new launches being 'sold out' .. try calling a week or two later and you will see whats still on offer i.e. LOADS !

Auction rooms are dead. 
One estate agent in dublin had 7 auctions last thursday and no one even turned up - let alone bid !
Swathes of 2nd hand properties not selling.

The only property thats selling are the ones where the owners are cutting prices. Prices have definately come DOWN.

All this evidence doesnt point to the bubble popping .. its pointing to the bubble having already popped. Past tense !

Always remember, unlike stock prices, property prices are sticky.
If someone has a house for sale at 700k and the market is only willing to pay 650k then the house just sits there. Official statistics dont record a decline, even if the market drops to 600k.

The knifes just gone in ... theres going to be a bloodbath !
_


----------



## plaudit

Assuming the above is accurate then things appear to even worse than what we have already guesstimated on this thread so far.


----------



## discstu

I'm running out the door to a match but if any of you saw TG4 news it spoke to an auctioneer Naughton I think in Galway who basically said major problems in the market for sellers Is the Nuacht repeated this evening


----------



## miju

judging by http://www.daft.ie/discussions.daft?dcn[forum_id]=4&limit=10&dcn[discussion_id]=86380&dcn[root_discussion_id]=0&dcn[forum_id]=4  

some estate agents obviously think the party is still raging


----------



## markyboy

[broken link removed]

I wonder where Ireland might sit on the Boston graph on the Billings video @ 3 min 50 secs?


----------



## Doris

Billings may not be Dublin but the growth in inventory and the refusal to take it into account is similar to the disavowal of Dublin EAs.  The fact the feeling of immunity to a crash is felt there too is interesting, we all seem too incapable to think about harder times, and are all schooled in an amazing denial mechanism.  I feel this may be generational. There is something linking risk-taking and fear of outside forces having a more powerful role than we would like. I am not sure what it is, but it doesn't seem to be local. We may be more susceptible though.


----------



## SHARP

bearishbull said:


> Thise guys post is quite worrying for anyone selling......
> 
> *Comments:*
> _I wrote this further down on the buying or selling thread on 14/9/2006_
> 
> _****_
> 
> _I used to be an estate agent._
> _Have 6 friends who still are._
> _They are superb agents, second to none._
> _About 3 weeks ago the market popped !_
> _Buckets on for sale, more than ever before .... and NOBODY interested in even viewing._
> 
> _One mate of mine works in a well-known agency._
> _They have 75 properties on the books .... and only 5 bids. And even they are shaky. only 1 bidder, no counter bidders._
> 
> _Everyone in the office is twiddling their thumbs as the phones are not ringing._
> _Im not talking about no bids, Im talking about no one even ringing._
> _They are cancelling viewings laft, right and centre as not even 1 person is looking._
> 
> _This is in the centre of Dublin, encompassing 1st time buyer market and some 2nd time buyer €700k+ properties._
> 
> _Party's over folks !_
> _-----_
> _Now 2/10/06 _
> 
> _SINCE ive written this the markets gotten worse._
> _When you read about new launches being 'sold out' .. try calling a week or two later and you will see whats still on offer i.e. LOADS !_
> 
> _Auction rooms are dead. _
> _One estate agent in dublin had 7 auctions last thursday and no one even turned up - let alone bid !_
> _Swathes of 2nd hand properties not selling._
> 
> _The only property thats selling are the ones where the owners are cutting prices. Prices have definately come DOWN._
> 
> _All this evidence doesnt point to the bubble popping .. its pointing to the bubble having already popped. Past tense !_
> 
> _Always remember, unlike stock prices, property prices are sticky._
> _If someone has a house for sale at 700k and the market is only willing to pay 650k then the house just sits there. Official statistics dont record a decline, even if the market drops to 600k._
> 
> _The knifes just gone in ... theres going to be a bloodbath !_


 
If this is true (and I actually think it may be), then we really are showing signs that we are right at the start of a collapse.

Everybody hold tight now........


----------



## Maine

bearishbull said:


> I dont know why people spend so much on houses in rural areas where theres loads of land to build on in the future. In the long run if theres demand for property is such areas more houses will be built at lower cost(even allowing for planning issues). I wouldnt pay more than cost of building and land plus 30% for a rural property.


 
Builder is building those Clare houses with a decent fit out for circa 300,000. That means a buyer is paying about 400,000 for the site. Now there will always be planning granted in places like Clare - what else are people going to do but build houses - councillors know this but can be a bit stricter at the moment as the boom means they do not need to worry about the jobs aspect. 

IMO we are way past worrying about planning in this country beyond a bunch of really top class sites i.e. the cliffs of moher will not be built on. 

The agricultural value of each house site - max 5,000.  Hence there is along way up to 400,000.


----------



## Duplex

London’s Docklands was the destination for a lot of green Irish bubble money over the past few years.  The market however, seems to be struggling; due to insipid rental yields, voids and a poor resale’s market. Irish exposure to high risk bubble markets across the globe may have an impact back home.  

The Times.





> *Down in Docklands?*
> *A rise in repossessions is casting a shadow over one of London’s property success stories, discovers Helen Davies*
> 
> 
> The regeneration of east London’s Docklands has been one of the capital’s great property success stories. Since the summer of 1981, developers have transformed crumbling wharves into yuppie loft apartments, and built steel and glass towers. There is even a three-storey Waitrose.
> 
> 
> A quarter of a century later, buildings are still going up. But the area is not proving an unmitigated success for a number of buy-to-let investors, who have borrowed heavily in order to buy and are now struggling to keep up with mortgage payments and cover rental voids.
> 
> 
> Adam Stackhouse, head of sales at Chesterton’s Tower Bridge office, estimates 25%-30% of properties on his books are repossessions, most originally bought by investors.
> 
> “They started to gather momentum 18 months ago and have grown steadily ever since,” he says. “Amateur buy-to-let investors who simply barnstormed into the market have found themselves in over their heads.”
> 
> Nor can those selling count on large capital gains. Savills Residential Research says the average value of flats “east of City” (which includes Wapping, Bermondsey, Limehouse and the Isle of Dogs) rose by just 2.2% between September 2002 and June 2006. With a further 24,000 units in the pipeline, future capital growth is likely to remain subdued.


 
http://property.timesonline.co.uk/article/0,,14049-2378182,00.html


----------



## plaudit

The bear markets prey on the weak and underfunded.


----------



## cjh

"ECB policymakers have reason to feel smug. The economy's surprising strength is forcing financial markets to reconsider *how far the rate rises might go*, and not even a welcome drop in oil prices and inflation is likely to break their stride."



"For central bankers, it says that the economy is strong enough to absorb further steps toward monetary policy normalisation," said Eric Chaney, European economist for Morgan Stanley. After the year-end, the outlook is less clear. If strong growth continues - as ECB staff currently predict - rates of at least 4 per cent by the end of 2007 should not be ruled out, one senior ECB central banker told Reuters recently."

From today's Irish Times.


----------



## MadPad

wow.. Its just one "good news" story after another this morning ...

Does anyone have any way of actually knowing how many houses/apartments were actually *sold* in the first month of the autumn season...

... careful what ye wish for lads ...


----------



## Duplex

MadPad said:


> wow.. Its just one "good news" story after another this morning ...
> 
> Does anyone have any way of actually knowing how many houses/apartments were actually *sold* in the first month of the autumn season...
> 
> ... careful what ye wish for lads ...


 
I wouldn't wish a speculative asset bubble on any nation.


----------



## plaudit

From an indo article about LA. It can't happen here though, as the worst that can happen us is a soft landing, thats what the estate agent said and they know everything.

_Just a few months ago, "open houses" in LA were like orgies. Real estate brokers would lay out tables of finger-food, while throngs of potential buyers would swoon over the stainless steel bathroom fixtures, fantasise about the remodelling potential (we can fit a hot tub in the back!) and, most importantly, jostle to outbid each other. _
_These days the ahi tuna canapes are gone, the brokers look ill and the only buyers are professional vultures, offering 30pc below listing._


----------



## Remix

ESRI says a US slowdown could lead to 90,000 jobs lost in Ireland.

Does not appear to include job losses in construction as housing slows ?? 

Calls for reductions in immigration from new EU entrants.

http://www.finfacts.com/irelandbusinessnews/publish/article_10007468.shtml


----------



## Duplex

Remix said:


> ESRI says a US slowdown could lead to 90,000 jobs lost in Ireland.
> 
> Does not appear to include job losses in construction as housing slows ??
> 
> Calls for reductions in immigration from new EU entrants.
> 
> http://www.finfacts.com/irelandbusinessnews/publish/article_10007468.shtml


 




> In the _General Assessment,_ the ESRI return to the slowdown in the US and discuss the possible implications for Ireland. The forecast slowing in the US, from GDP growth of 3.4 per cent in 2006 to 2.5 per cent in 2007, is not in itself a very dramatic slowdown. However, the possibility of a stronger slowdown moving the US into recession is real since the house price assumption on which the current forecast is based may prove to be optimistic. In a statement on immigration policy the ESRI calls for a cautious approach to the number of admissions in the near future


 

The reason that the ERSI are calling for a brake on new migrants is the probability that there wont be work for them here.  They mention the risk of the bursting US housing bubble but make no mention whatsoever of the higher risk Irish market?   Pretty worthless analysis.


----------



## cjh

The Property Investment thread next door is quiet today isn't it?


----------



## whizzbang

cjh said:


> The Property Investment thread next door is quiet today isn't it?


I'm sure they are all quietly asleep on their bed of money.


----------



## Remix

Ssshhh.. keep it quiet - Bad hangovers next door  

Speaking of binges - the SFA has come out this morning with this statement:



> Irish nation "behaving more like a drug addict than a well-oiled business – high on cheap money"


 
http://www.finfacts.com/irelandbusinessnews/publish/article_10007479.shtml


----------



## cjh

Would the last one out of the Property Investment thread please turn off the lights?


----------



## phoenix_n

cjh said:


> The Property Investment thread next door is quiet today isn't it?


 
How will the irish crash affect property in say Poland. Had thought about buying there but wonder if the money dries up here will that affect the prices abroad. Are we a mini-America to some places in eastern europe.


----------



## Howitzer

phoenix_n said:


> How will the irish crash affect property in say Poland. Had thought about buying there but wonder if the money dries up here will that affect the prices abroad. Are we a mini-America to some places in eastern europe.


 
It depends. What was your original exit strategy? Were you hoping to simply sell on to another Paddy at some point in the future or were you buying in an area of strong local employment and growth?

Any market which is based on the premise of simply selling on to a greater fool doesn't really get much time from me.


----------



## plaudit

phoenix_n said:


> How will the irish crash affect property in say Poland. Had thought about buying there but wonder if the money dries up here will that affect the prices abroad. Are we a mini-America to some places in eastern europe.


 
We can't have a crash, only a soft landing and 5% house price growth, I wish ye would start reading the estate agents predictions, they know everything!


----------



## plaudit

Seriously, remember that interest rates are rising in Poland too.


----------



## phoenix_n

Howitzer said:


> It depends. What was your original exit strategy? Were you hoping to simply sell on to another Paddy at some point in the future or were you buying in an area of strong local employment and growth?
> 
> Any market which is based on the premise of simply selling on to a greater fool doesn't really get much time from me.


 
I do business over in Poland so i had my research done well and prices have gone up accordingly. You'd have been mad to buy in ireland in '96 aswell so one always has to work on pure figures which I do.

However in the end i was too exposed to mainland europe so didnt go for it. 

But back to my original point. Will a Irish Crash (currently happening in slow motion) affect prices in eastern europe and to a lesser extent spain.


----------



## phoenix_n

WhatHome....

do you have any more links to cache price decreases. mentioned the impending crash (moment of weakness) and i'd like to show him some price decreases.


----------



## liteweight

cjh said:


> The Property Investment thread next door is quiet today isn't it?



Of course its quiet! It takes a lot of concentration when you're gearing up to buy up what's expected to sell cheaply, in the coming year!


----------



## plaudit

The Irish market is small in the overall context so I am not sure how it will effect other markets. Perhaps this is going off topic and should be dealt with in a seperate thread?


----------



## whathome

phoenix_n said:


> WhatHome....
> 
> do you have any more links to cache price decreases. mentioned the impending crash (moment of weakness) and i'd like to show him some price decreases.


 

*Example 1*
Old Price : €725,000

New Price : €700,000
[broken link removed]=

*Example 2
*Old Price : €540,000

new Price : €520,000
[broken link removed]=


----------



## redo

Ad of the decade.

SMITHCURLEY estate agents have a superb opportunity to acquire a *stunning* three bedroomed semi detached family home coming to the market in_* showhouse condition*_ throughout with _*no expense spared *_by its current owners. This property boasts a large rear garden and off street parking for 1/2 cars.

[broken link removed]


----------



## cjh

[broken link removed]


"No expense spared"! You have to see the hallway.


----------



## Neffa

redo said:


> SMITHCURLEY estate agents have a superb opportunity to acquire a *stunning* three bedroomed semi detached family home coming to the market in_* showhouse condition*_ throughout with _*no expense spared *_by its current owners. This property boasts a large rear garden and off street parking for 1/2 cars.


 
Well, if the agents themselves have a superb opportunity to acquire it, why don't they  

Honestly, the quality of some of the writing in these ads.....!


----------



## StoppedClock

cjh said:


> [broken link removed]
> 
> 
> "No expense spared"! You have to see the hallway.


 
Admit it.  Someone from here but that ad up, its a joke.  _"Showhouse condition throughout with no expense spared by its current owners"  _The kithchen is offensive, it has no aplliances, the grass hasn't even been cut.


----------



## whathome

phoenix_n said:


> WhatHome....
> 
> do you have any more links to cache price decreases. mentioned the impending crash (moment of weakness) and i'd like to show him some price decreases.


 
and here's another three:

*Example 3*
Old Price €785,000


New Price €745,000  : *Reduced by €40,000*
[broken link removed] 

*Example 4*
Old Price €720,000


New Price €690,000 : *Reduced by €30,000*
[broken link removed]

*Example 5*
Old Price €650,000


New Price €575,000 : *Reduced by €75,000*
[broken link removed]


----------



## phoenix_n

Muchos gracias amigo...



whathome said:


> and here's another three:
> 
> *......*


----------



## whathome

liteweight said:


> Of course its quiet! It takes a lot of concentration when you're gearing up to buy up what's expected to sell cheaply, in the coming year!


 
Never try to catch a falling knife


----------



## markyboy

redo said:


> Ad of the decade.
> 
> SMITHCURLEY estate agents have a superb opportunity to acquire a *stunning* three bedroomed semi detached family home coming to the market in_* showhouse condition*_ throughout with _*no expense spared *_by its current owners. This property boasts a large rear garden and off street parking for 1/2 cars.
> 
> [broken link removed]


 
"Asking Price: €355,000 to include curtains, blind, *light fitting*, barna shed."

Just the one mind!


----------



## Duplex

redo said:


> Ad of the decade.
> 
> SMITHCURLEY estate agents have a superb opportunity to acquire a *stunning* three bedroomed semi detached family home coming to the market in_* showhouse condition*_ throughout with _*no expense spared *_by its current owners. This property boasts a large rear garden and off street parking for 1/2 cars.
> 
> [broken link removed]


 

When they said 'stunning' I think they were referring to the aah... decor.


----------



## Dipole

I note that in many of these "cached dropped price" threads the houses are vacant\bare - these must be the houses owned by investors because most owner occupiers are stuck in property chains.

Also the quality of the fittings in most of these pictures suggest that (despite the good addresses in some cases) there was no houseproud wife in residence at any time recently.

As suggested during this thread it appears that specuvestors will be quite happy to take tens of thousands off the price of their houses to shift them so it appears the housing market isn't as sticky as some people would think it is.
I'm forming the opinion there is no invisible support to the market that will prevent the market from collapsing - specuvestors want out at any price above their mortgage liability and developers have a financial imperitative to continue to develop on the land they paid over the odds for over the last few years.

Is that a fair assessment of the market?


----------



## liteweight

whathome said:


> Never try to catch a falling knife



Unless you work in the circus?


----------



## Duplex

Dipole said:


> I note that in many of these "cached dropped price" threads the houses are vacant\bare - these must be the houses owned by investors because most owner occupiers are stuck in property chains.
> 
> Also the quality of the fittings in most of these pictures suggest that (despite the good addresses in some cases) there was no houseproud wife in residence at any time recently.
> 
> As suggested during this thread it appears that specuvestors will be quite happy to take tens of thousands off the price of their houses to shift them so it appears the housing market isn't as sticky as some people would think it is.
> I'm forming the opinion there is no invisible support to the market that will prevent the market from collapsing - specuvestors want out at any price above their mortgage liability and developers have a financial imperitative to continue to develop on the land they paid over the odds for over the last few years.
> 
> Is that a fair assessment of the market?


 
I'd tend to agree.  The speculative nature of the market may make things more liquid on the way down.  Subsidising an underwater 'investment' when prices are falling is financial suicide.


----------



## hmmm

Classic "sure [broken link removed] but it's still a great investment" type apartment.

99 Bushy Park House
[broken link removed] - 599,950
 - 649,950

There's loads of properties in this apartment complex that have recently appeared on myhome.


----------



## dontaskme

liteweight said:


> Originally Posted by *whathome* http://www.askaboutmoney.com/showthread.php?p=288590#post288590
> _Never try to catch a falling knife _
> 
> 
> Unless you work in the circus?


 
yep, you wouldn't want to get it in the juggler  




























I'll get me coat.


----------



## sunrock

Duplex said:


> The reason that the ERSI are calling for a brake on new migrants is the probability that there wont be work for them here. They mention the risk of the bursting US housing bubble but make no mention whatsoever of the higher risk Irish market? Pretty worthless analysis.


i am sure its to soothe the frayed nerves of the workers who are competing with the migrants already here and if not under threat of displacement will have seen their wages and conditions lower than they otherwise would have been 
thus the esri have thrown them this sop
i think it is wrong to have restrictions on romanians and bulgarians if poles etc have no restrictions
if there is no work for them they wont come or at least stay

also predicting rates peaking at 3.75  and mentioning the us housing bubble _all great comfort talk_who can take this pr/spin seriously


----------



## kramer2006

whathome said:


> *Example 5*
> Old Price €650,000
> 
> 
> New Price €575,000 : *Reduced by €75,000*
> [broken link removed]


 
575K for a two-bedroom "shack" in Shankill. The 3 photos are even more laughable; one shows the golden sands (!) of Shankill beach. With this kind of madness, is it any wonder we are starting to see a correction?


----------



## cjh

[broken link removed]=


[broken link removed]=

I think stuff like this is madness......nearly a million for a semid?


----------



## phoenix_n

whathome said:


> and here's another three:


 
Have you noticed any pressure on the lower end of the market ?


----------



## plaudit

[broken link removed] one goes for auction tomorrow, close to the Bushy park apartment above, lets see how it goes!


----------



## JayDub

kramer2006 said:


> 575K for a two-bedroom "shack" in Shankill. The 3 photos are even more laughable; one shows the golden sands (!) of Shankill beach. With this kind of madness, is it any wonder we are starting to see a correction?


 
LOL the house must not be that impressive if only 1 of the 3 photos is actually taken inside the house. Not even Bob the builder could make a sand castle on that beach. What about the garden or should I say jungle...


----------



## JayDub

cjh said:


> [broken link removed]=
> 
> 
> [broken link removed]=
> 
> I think stuff like this is madness......nearly a million for a semid?


 
And the light bulbs are not included in the sale...


----------



## Maine

whathome said:


> and here's another three:
> 
> *Example 3*
> Old Price €785,000
> 
> 
> New Price €745,000 : *Reduced by €40,000*
> [broken link removed]
> 
> *Example 4*
> Old Price €720,000
> 
> 
> New Price €690,000 : *Reduced by €30,000*
> [broken link removed]
> 
> *Example 5*
> Old Price €650,000
> 
> 
> New Price €575,000 : *Reduced by €75,000*
> [broken link removed]


 
Alot of the reductions seem to be sherry fitz - at little at odds with uber economist finnegan


----------



## StoppedClock

cjh said:


> [broken link removed]=
> 
> 
> [broken link removed]=
> 
> I think stuff like this is madness......nearly a million for a semid?


 

There's another one in Roebuck Downs for about 840k, I used to live there and I kid you not the build quality was so poor that we were woken by our neighbours alarm clock each morning.


----------



## Goldfinger

Is the bubble really burst yet? and once burst, can a bubble re-inflate?

(first post, after long time lurking, hello people!)


----------



## cjh

Goldfinger said:


> Is the bubble really burst yet? and once burst, can a bubble re-inflate?
> 
> (first post, after long time lurking, hello people!)


 

Yes and yes - it takes about 20 years.


----------



## StoppedClock

Goldfinger said:


> Is the bubble really burst yet? and once burst, can a bubble re-inflate?
> 
> (first post, after long time lurking, hello people!)


 

Welcome Goldfinger, bullish or bearish?  What prompted you to break your silence?   Are you the same Goldfinger as on HPC?


----------



## ncs

I spent an idle 10 mins Google cacheing Enniskerry to see how the highfliers belt was performing... Oh dear oh dear...

[broken link removed]=

Unless I'm much mistaken: 

5th July cache had this at €2.6 million
13th July at €2.4 million
Now at €2.1 million

Fingers crossed this pattern continues and by Xmas 2008 it's MINE ! ALL MINE!!!

Most of the 7 figure places I found round there have dropped recently. In truth, this may be an anomalous region since it must be tricky identifying the 'going rate' for one-off builds. But still...


----------



## SHARP

Those last few properties really show how crazy our property market has got. I mean a 3.4 bedroom semi for nearly a million and a very small house/cottage for nearly 800k. 

How anyone can buy these for that money, really is beyond reasonable thining, I mean it really is?

Do these people not take a step back and actually think of what exactly their money is buying????

I hate to say it, but a person who pays 900k for a semi d really does deserve to get burned, because its just plain stupidity.


----------



## phoenix_n

cjh said:


> [broken link removed]=
> 
> 
> [broken link removed]=
> 
> I think stuff like this is madness......nearly a million for a semid?


 
Or for 1 million and 375,000 thousand.....you get a dormer semi
[broken link removed]


----------



## whizzbang

Duplex said:


> When they said 'stunning' I think they were referring to the aah... decor.


I think the word is "shocking" not "stunning"


----------



## plaudit

Can somebody stick up a few prices of Semi-D's in London, in comparable areas to the ~€1m property Dublin house above.


----------



## whizzbang

dontaskme said:


> I'll get me coat.



*holds door open*


----------



## SHARP

Properties dropping by "bertie small" amounts of up to €75,000!!!That is shocking!!! 

Drops of 5,000 here and there and people could comment on it being a soft landing, but €75,000!!! ........Im in shock that these increasingly number of properties losing their "value" is not all over the papers, airways, tv???


----------



## cjh

SHARP said:


> Properties dropping by "bertie small" amounts of up to €75,000!!!That is shocking!!!
> 
> Drops of 5,000 here and there and people could comment on it being a soft landing, but €75,000!!! ........Im in shock that these increasingly number of properties losing their "value" is not all over the papers, airways, tv???


 

The Indo is usually a few days behind this thread.....


----------



## Goldfinger

StoppedClock said:


> Welcome Goldfinger, bullish or bearish? What prompted you to break your silence? Are you the same Goldfinger as on HPC?


 
I broke my silence, because this is such a good day. I've been fobbed off for years by my family for renting instead of buying, and finally I might be proved right all along. I'm a bear, with an inner bull waiting to let loose 

No, I'm a different Goldfinger, but I've been reading HPC and globalhousepricecrash for a while now.

I really like to comparisons between the cached price, and current price


----------



## whathome

phoenix_n said:


> Have you noticed any pressure on the lower end of the market ?


 
yes - all price ranges and areas in Dublin have been affected. The lower end took longer to show price drops but I think that's because price drops can be negotiated around the original asking on a lower end property without having to re-advertise.

5% of 350,000 = €17,500, no need to re-advertise as some offers might come close enough to original asking to do a deal.

5% of 800,000 = €40,000, probably need to re-advertise


----------



## SHARP

phoenix_n said:


> Or for 1 million and 375,000 thousand.....you get a dormer semi
> [broken link removed]


 

......and only €5894 pm* over 30 years (92% loan)

Sure with interest rates on the rise aswell, €6,000 a month seems like a bargain, eh? 30 years and it could be all yours......................


----------



## cjh

SHARP, I think your post really 'sums up' the extent of the madness!


----------



## MugsGame

5% drops on _asking prices_ for isolated properties are not that significant and don't really prove anything.


----------



## hmmm

MugsGame said:


> 5% drops on _asking prices_ for isolated properties are not that significant and don't really prove anything.


Typical bullish argument on here. Dismiss the facts that the bears are quoting with some vague response that belies the obvious.


----------



## phoenix_n

MugsGame said:


> 5% drops on _asking prices_ for isolated properties are not that significant and don't really prove anything.


 
I tend to disagree. If you were going to buy a house would you not now offer a lower amount than the advertised price and expect it to be taken seriously. I know properties that got their asking price offered on first viewing earlier this year. You have to agree that those days are over. So isolated price drops tells you alot. And these isolated price drops are only what a couple of posters here have found.


----------



## cjh

MugsGame said:


> 5% drops on _asking prices_ for isolated properties are not that significant and don't really prove anything.


 

When several people have posted drops seperately in different areas (presumably that they've been watching) how is the data 'isolated'?


----------



## plaudit

MugsGame said:


> 5% drops on _asking prices_ for isolated properties are not that significant and don't really prove anything.


 
This thread is about sentiment and from the articles that people are posting and the price drops being highlighted show that sentiment is changing towards bearish.

There are plenty of 20% price drops in asking price being quoted on this thread, not just 5%.


----------



## MugsGame

I'm sure if you looked you could have found isolated drops in asking prices at any time in the last five years. I'm aware of below asking bids that were accepted, certainly. A drop in an already inflated asking price doesn't on its own prove anything, that's my point. 

And who said I was a bull?


----------



## whathome

MugsGame said:


> 5% drops on _asking prices_ for isolated properties are not that significant and don't really prove anything.


 
...try telling that to a vendor who's had to go through the hell of dropping their price. 

Asking price drops are widespread.


----------



## phoenix_n

MugsGame said:


> I'm sure if you looked you could have found isolated drops in asking prices at any time in the last five years. A drop in an already inflated asking price doesn't on its own prove anything, that's my point.
> 
> And who said I was a bull?


 
Pick a house or two where you live. Phone up your EA. That will tell you everything.


----------



## whathome

MugsGame said:


> I'm sure if you looked you could have found isolated drops in asking prices at any time in the last five years.


 
Not true - I haven't seen it since 2001 which was the last time that prices dropped!


----------



## cjh

MugsGame said:


> I'm sure if you looked you could have found isolated drops in asking prices at any time in the last five years. I'm aware of below asking bids that were accepted, certainly. A drop in an already inflated asking price doesn't on its own prove anything, that's my point.
> 
> And who said I was a bull?


 

A drop in an already inflated asking price proves:
That a buyer at any price no longer exists
That a touch of reality has entered the market
That EA's and sellers are being forced to accept that the properties are *worth less* than previously thought
That the sentiment that caused the inflated asking prices no longer exists

I won't bother adding a conclusion to the above, it should be obvious.


----------



## plaudit

Prices can't drop though lads, we are getting a soft landing and its 5% growth after that. Happy days.

Trichet speaks on Thursday @12.00 and the press conference is set for 12.45, this is key, where he will indicate the stance for the new year. The way I see it:

0.25% rise October
0.25% rise December is "probable"
0.25% rise In February 2007 "possible"*

*I think this will be changed to "probable" at Thursdays press conference as the markets have partially priced this in already.


----------



## Remix

I think finding lots of examples of price drops is also very significant in the context of record withdrawals from auctions, buildup of unsold houses (25% up on last year) , interest rates marching higher, us market in trouble, increasing evidence of financial stress for borrowers and consumer sentiment on a general downtrend. (did I miss anything?)


----------



## liteweight

I think drops will only really signify something when house/apt/ prices start to fall below what was asked, for the same type of property, in early 2006. Everyone is in agreement (?) that Spring prices were an anomaly. Unfortunately vendors seem to have taken these figures....added 20% and taken their property to market. Every house and every road/area has a ceiling and, in the case of most of the houses displayed on this thread today, I believe the vendors were chancing their arm in the first place.

The market is definitely weakening but I don't believe it's on it's last gasp yet. If that's to happen, and its still an 'if'....it won't be until the next SSIA payout.  If anyone here has a crystal ball.......I'm  open to advice!


----------



## whathome

plaudit said:


> we are getting a soft landing


 
It's amazing how the EA's and other vested interests have been so quick to call a soft landing at the first sign of a weaker market.

The full effect of the initial interest rate rises has not been felt yet and we still have a few more rate hikes to come.  It's a sad story that they have already had to call a soft landing to encourage any straggling buyers to "come on IN!!!"


----------



## liteweight

whathome said:


> Not true - I haven't seen it since 2001 which was the last time that prices dropped!



Houses in certain areas dropped. D4 in 2002?


----------



## Calina

MugsGame said:


> I'm sure if you looked you could have found isolated drops in asking prices at any time in the last five years. I'm aware of below asking bids that were accepted, certainly. A drop in an already inflated asking price doesn't on its own prove anything, that's my point.
> 
> And who said I was a bull?



Drops in asking prices are significant to me because they are happening in that sector of the market which *everyone* suggested would be okay because they were the high-ish end markets/trader uppers/in good locations. If asking prices are dropping at all, it can only be because the properties are not shifting. 

Whilest I would say a drop in an inflated asking price doesn't prove anything, I have been intrigued that asking prices in my area, which generally went up between 10K and 20K for each new similar accommodation in a specific estate coming on the market, have run into a brick wall. 

I'm not sure what would constitute "proof" to people who are convinced by softlandings and "you can't lose on property" - I'm not sure you even form part of that community. It seems to me that every single nail in that coffin is explained away by specialised "oh that case was overvalued anyway". The problem is, everything is overvalued by the market in this country, and that is not sustainable. 

In any case, if you could have found "isolated" price drops at any time in the last 5 years, it is incumbant on you to prove it. The problem as I see it is that the number of price drops turning up here seems to be growing on a day to day basis. The market is in trouble, it seems. How much that trouble is caused by stamp duty related waiting and seeing and how much of it is caused by affordability barriers remains to be seen. The fact remains that there is a limit to the amount of money that people can spend on housing and while I cannot claim that it is now true that we have reached the limit, it would appear that options are starting to run low. 

Clearly they must be. Property is hanging around on the market longer and desperate strategems are being applied. A year or so ago I told an estate agent I would put in an offer of AP-20K on some property and the response I got was a sarcastic laugh and a comment to the effect that he wouldn't even bother telling the seller about the offer because frankly, he was expecting to make AP+40K. Asking prices, you see, weren't reflections of what people wanted. They were just gimicks. 

Now, they're gimicks in a different direction. Instead of understating the price, they're over stating it and in increasing numbers. 

No, it doesn't prove anything at all...but it is an interesting change.


----------



## whathome

liteweight said:


> The market is definitely weakening but I don't believe it's on it's last gasp yet.


 
Weakening property markets don't make gasps. Once a trend is set in motion, it takes either a huge event or a long time to reverse. Rising interest rates have hit the market and there are a few more blows to come. 

SSIA effect on property is rubbish. The amounts are not big enough to affect the trade-up market and people of FTB age don't have them. How old would current FTB's have been when SSIA's were released five years ago? I don't know anyone in their 20's with an SSIA.


----------



## MandaC

As someone trying without much success to sell their home, I can tell you that there is a definite change in the market, which I have unfortunately experienced,  first hand.

Originally, I put the house up for slightly less than next door sold for at Easter.  Since then, I have had to drop the price twice in the five/six weeks the house has been up, and even to achieve the current asking price, that is still €16K less than the exact same house next door (similar decor, etc) got last Easter. And I am at the bottom of the market.

I have had to change EA, as I dont the previous EA was not agressive enough to market the property in the changing market.  People are very hesitant, even EA's about the drop.  My EA told me that prices in the area are "correcting themselves" at the moment.   

I thought originally that it was just an over supply of houses in Lucan, but over the past few weeks and having spoken to other people trying to sell in different areas, its the same all over.

One resident has even taken to advertising their house in the Evening Herald as "Bargain, Bargain, Bargain, €10K off.....just to get their sale.


----------



## room305

whathome said:


> I don't know anyone in their 20's with an SSIA.



I do. Most of my friends have as well. Then again, a shocking amount of us also own property!


----------



## whathome

room305 said:


> I do. Most of my friends have as well. Then again, a shocking amount of us also own property!


 
Sorry, should have said - people in their 20's without an SSIA and property! The majority of people who could afford an SSIA five years ago already own property by now.


----------



## paddyd

whathome said:


> It's amazing how the EA's and other vested interests have been so quick to call a soft landing at the first sign of a weaker market.
> 
> The full effect of the initial interest rate rises has not been felt yet and we still have a few more rate hikes to come. It's a sad story that they have already had to call a soft landing to encourage any straggling buyers to "come on IN!!!"


 

i used to agree completely (over the past few months), but there have been indications just over the past few days, that maybe the Property market has managed to pull the nose of the plane up. Take this in todays Indo for example. We spoke about this here just last week, wondering would this happen, i.e. the builders control the wobble by dropping output:



> [FONT=Arial, Verdana, Arial]*Approval for house starts drops by 37pc*[/FONT]
> 
> [FONT=Verdana, Arial]THE number of homes being granted planning permission in Dublin city and county has fallen by almost 40pc in one year. [/FONT]
> [FONT=Verdana, Arial]The worrying figures show that in the 12 months to June, 12,644 units were approved compared to 20,183 in the previous 12 months, which is a drop of 37pc. [/FONT]
> [FONT=Verdana, Arial]Figures from Hooke & MacDonald estate agents, based on CSO statistics, show that just 1,836 new homes were granted planning permission in Dublin between April and June of this year, compared to 3,309 last year and 5,230 in 2004. [/FONT]
> [FONT=Verdana, Arial]"Serious supply deficiencies will intensify within the next 18 months if this trend persists," Hooke & MacDonald said. [/FONT]


 
remember this is only the 12 months to JUNE, and not Q3, up until Sept. I can't imagine there has been many developers applying for permission in the past 3 months on very expensive land when they might be hit with an over-supplied market in 12 months when the houses are built, and they can't be sold. So they adopt a 'wait n see' approach. This 37%+ drop in approvals could prove very important


----------



## liteweight

whathome said:


> Weakening property markets don't make gasps. Once a trend is set in motion, it takes either a huge event or a long time to reverse. Rising interest rates have hit the market and there are a few more blows to come.
> 
> SSIA effect on property is rubbish. The amounts are not big enough to affect the trade-up market and people of FTB age don't have them. How old would current FTB's have been when SSIA's were released five years ago? I don't know anyone in their 20's with an SSIA.



The 'gasp' was metaphorical!! I disagree that the SSIA payout won't have an effect on the market. A couple who pay the full amount will have over 40K to invest. My daughter has an SSIA and she's 24. Every one of her friends have SSIAs, some for the maximum and others for less. Each and every one of them intend to put it towards a deposit.


----------



## Duplex

plaudit said:


> Can somebody stick up a few prices of Semi-D's in London, in comparable areas to the ~€1m property Dublin house above.


 

I don't think Dublin and London are comparable. Dublin and Bristol are a better comparison similar in size, Bristol isn't your typical 'post-industrial' city as can be found in most parts of the UK.  Another comparable UK city might be Edinburgh.


http://www.rightmove.co.uk


----------



## whathome

MandaC said:


> As someone trying without much success to sell their home, I can tell you that there is a definite change in the market, which I have unfortunately experienced, first hand.
> 
> Originally, I put the house up for slightly less than next door sold for at Easter. Since then, I have had to drop the price twice in the five/six weeks the house has been up, and even to achieve the current asking price, that is still €16K less than the exact same house next door (similar decor, etc) got last Easter. And I am at the bottom of the market.
> 
> I have had to change EA, as I dont the previous EA was not agressive enough to market the property in the changing market. People are very hesitant, even EA's about the drop. My EA told me that prices in the area are "correcting themselves" at the moment.
> 
> I thought originally that it was just an over supply of houses in Lucan, but over the past few weeks and having spoken to other people trying to sell in different areas, its the same all over.
> 
> One resident has even taken to advertising their house in the Evening Herald as "Bargain, Bargain, Bargain, €10K off.....just to get their sale.


 
Absolutely agree, and anyone who says that asking price drops are insignificant hasn't a clue what they're talking about. Trying to sell a house in the current market and dropping your asking price is a real pain for vendors.


----------



## daveirl

I must have the wrong friends only 1 has an SSIA and even then she's only been able to pay into it properly since she got a 'real' job last September. I'm 23 BTW.


----------



## liteweight

daveirl said:


> I must have the wrong friends only 1 has an SSIA and even then she's only been able to pay into it properly since she got a 'real' job last September. I'm 23 BTW.



That's a pity, their parents should have been looking out for their financial interests. An SSIA payment was as little as 12.54...pocket money. It's then up to the child to up payments out of part time work etc. while attending college.


----------



## Duplex

I'm wary about the impact of SSIA's on the market, especially when the level of debt in the country is so high.  But I suppose anythings possible in a bubble market, it does beg the question what happens when the SSIA money has gone?


----------



## liteweight

Duplex said:


> I'm wary about the impact of SSIA's on the market, especially when the level of debt in the country is so high.  But I suppose anythings possible in a bubble market, it does beg the question what happens when the SSIA money has gone?



SSIA money plus all the reports stating that house prices are dropping will lead the inexperienced to believe that they are getting a bargain IMO. In fact, they will probably still be paying a somewhat inflated price for quite a while yet. I understand that's it's difficult for young people, having spent 5 years saving, with a view to buying a property, to then put that thought on hold!! This is even more true when you view the history of the property market to date. If the budget brings some relief with regard to stamp duty, it will add fuel to this fire IMO.


----------



## redo

Original AP 800k

Reduced to 790k
[broken link removed]

Can't find it in the cache but you can see the original amount of 800k furthur down the page.  These guys are really sloppy and are probably charging 5-7.5K for the pleasure.


----------



## phoenix_n

Funny this talk about SSIA because if you bought a house now rather than 4/5 months ago you would have 'earned' your SSIA money with the savings that you can now get.


----------



## plaudit

I don't think the SSIA's are that big a deal to the property. How many people would have bought their house maybe 2 years ago and borrowed money off their parents for example on the nod that once the SSIA matured they would repay them?

This is just one example, but I think the SSIA effect has been priced in gradually. A bit like the first time buyers grant of €3000, you would always see the price being advertised "Nett of Grant"

The same way as tax relief properties are often overpriced in the knowledge that the investor is getting a tax break.


----------



## MandaC

I know what I will be doing with my SSIA.

I am due about €15K, and my house has dropped €16K (and dropping) since April when next door sold.

Great....thats what I get after five years of hard saving. Down €1k.


----------



## beattie

liteweight said:


> SSIA money plus all the reports stating that house prices are dropping will lead the inexperienced to believe that they are getting a bargain IMO. In fact, they will probably still be paying a somewhat inflated price for quite a while yet. I understand that's it's difficult for young people, having spent 5 years saving, with a view to buying a property, to then put that thought on hold!! This is even more true when you view the history of the property market to date. If the budget brings some relief with regard to stamp duty, it will add fuel to this fire IMO.


 
Its terrible to think that if someone takes the plunge and buys now after saving hard for 5 years that there SSIA could be wiped out within a year. Lets hope that the EA's give them sound professional advice.....


----------



## liteweight

MandaC said:


> I know what I will be doing with my SSIA.
> 
> I am due about €15K, and my house has dropped €16K (and dropping) since April when next door sold.
> 
> Great....thats what I get after five years of hard saving. Down €1k.



Presumably you'll still make a profit???


----------



## phoenix_n

MandaC said:


> I know what I will be doing with my SSIA.
> 
> I am due about €15K, and my house has dropped €16K (and dropping) since April when next door sold.
> 
> Great....thats what I get after five years of hard saving. Down €1k.


 
Yes but if you sell soon you'll save a hell of alot more. (in earnings)

How much of a hit can you take ?


----------



## Neffa

paddyd said:


> i used to agree completely (over the past few months), but there have been indications just over the past few days, that maybe the Property market has managed to pull the nose of the plane up. Take this in todays Indo for example. We spoke about this here just last week, wondering would this happen, i.e. the builders control the wobble by dropping output:


 
Not sure that ending up with 300,000 vacant properties (see the census, McWilliams etc.) counts as "pulling the nose up".


----------



## HotdogsFolks

I don't really get this "drop the price by 10k now it's a bargain" thing...

If your house has doubled / triped / quadroupled in value, why is it so hard to drop the price by 10k or 50k or 100k?

If no one wants to even consider your house at its dropped by 10k bargain price, then that means your house is no where near worth that now.

If houses can double in price in 24 months, then they can easily half in price in 24 months...


----------



## Neffa

Duplex said:


> I don't think Dublin and London are comparable. Dublin and Bristol are a better comparison similar in size, Bristol isn't your typical 'post-industrial' city as can be found in most parts of the UK. Another comparable UK city might be Edinburgh.
> 
> 
> http://www.rightmove.co.uk


 

Agreed. However, if you search in the nicer areas of London (try postcodes SW6, N1, W4, SW11 from £500K upwards) you'll be amazed how much cheaper it is to buy there. Bristol, Edinburgh etc. are cheaper still.


----------



## zac

Just wondering how many real bears exist on this board, those who are bearish and have bet on it using their money i.e.

*owners *who sold recently to move to rental property, or
*investors *who reduced(or increased) their irish residential properties recently i.e. last few months(or 2006).
please reply.

those with just opinions please do *not* respond to this post.


ps. is there a need for a new thread for this poll?


----------



## StoppedClock

Neffa said:


> Agreed. However, if you search in the nicer areas of London (try postcodes SW6, N1, W4, SW11 from £500K upwards) you'll be amazed how much cheaper it is to buy there. Bristol, Edinburgh etc. are cheaper still.


 
Yeah but that's cos England hasn't had the same immigration as Ireland, and London's not a financial centre like Dublin and the English don't like owning their own homes etc. etc


----------



## cjh

Isn't a person with the money to buy, but who's holding back for prices to fall a 'real' bear?


----------



## StoppedClock

zac said:


> Just wondering how many real bears exist on this board, those who are bearish and have bet on it using their money i.e.
> 
> *owners *who sold recently to move to rental property, or
> *investors *who reduced(or increased) their irish residential properties recently i.e. last few months(or 2006).
> please reply.
> 
> those with just opinions please do *not* respond to this post.
> 
> 
> ps. is there a need for a new thread for this poll?


 

Inherited a house last year, flogged it, renting now.


----------



## Neffa

StoppedClock said:


> Yeah but that's cos England hasn't had the same immigration as Ireland, and London's not a financial centre like Dublin and the English don't like owning their own homes etc. etc


 
lol


----------



## walk2dewater

I justed shorted a Irish residential house builder (can’t mention who).  Does that make me a bear


----------



## phoenix_n

phoenix_n said:


> Or for 1 million and 375,000 thousand.....you get a dormer semi
> [broken link removed]


 
or a terrace in phibs for 1.25 !
[broken link removed]=


----------



## cjh

phoenix_n said:


> or a terrace in phibs for 1.25 !
> [broken link removed]


 


I was impressed to see it had a door....
[broken link removed]=


----------



## tig

hi zac,

im not rich enough to be a bear in the irish property market but my dad just sold the family home...may 2005. for 3.5 million. its all in the bank and he´s renting a house. he´s a smart guy. but pretty bearish in general and pessimistic. IMO

but it looks to me like the market is turning. IMO


----------



## murray

zac said:


> Just wondering how many real bears exist on this board, those who are bearish and have bet on it using their money i.e.
> 
> *owners *who sold recently to move to rental property, or
> *investors *who reduced(or increased) their irish residential properties recently i.e. last few months(or 2006).
> please reply.
> 
> those with just opinions please do *not* respond to this post.
> 
> 
> ps. is there a need for a new thread for this poll?


 

I have gone 'sale agreed' on my place - south dublin - bought at 365k in 2004 sold at 600k recently. going renting & invest the money elsewhere. Any more like me ? Or am i nuts and on my own?


----------



## paddyd

Neffa said:


> Not sure that ending up with 300,000 vacant properties (see the census, McWilliams etc.) counts as "pulling the nose up".


 
mmmm, but believe it or not there has been a lot of cash in the country for the past few years, and most of the vacant houses are actually Holiday Homes and not for rent. Of the 300k vacant houses, 2/3's are second/holiday homes, the rest being unlet investment properties (100k unlet is still quite large, granted).

p.s. don't believe everything McWilliams says. Its always a personal slant. 
Hobb's and himself are the self-styled saviours of us all.


----------



## redo

murray said:


> I have gone 'sale agreed' on my place - south dublin - bought at 365k in 2004 sold at 600k recently. going renting & invest the money elsewhere. Any more like me ? Or am i nuts and on my own?


Let hope everything completes and the purchasers don't pull out.  It is a very stressfull time.


----------



## tig

ALSO zac,

i´ve been pessimistic since 2001. waited out of housing market since 2001. I have the price of a house in the bank since then. what a mistake.
hindsight is a great thing ha ha! but i believe that houses will come back to 2001 levels over the next 3 years. we have a productivity problem in the economy. IMO. we are not genuinely productive as a nation compared with the uk and europe. there is no shortage of land. BTW you only make money when you pull the money out.


----------



## mollser

> Approval for house starts drops by 37pc
> 
> THE number of homes being granted planning permission in Dublin city and county has fallen by almost 40pc in one year.
> The worrying figures show that in the 12 months to June, 12,644 units were approved compared to 20,183 in the previous 12 months, which is a drop of 37pc.
> Figures from Hooke & MacDonald estate agents, based on CSO statistics, show that just 1,836 new homes were granted planning permission in Dublin between April and June of this year, compared to 3,309 last year and 5,230 in 2004.
> "Serious supply deficiencies will intensify within the next 18 months if this trend persists," Hooke & MacDonald said.



OH NO - HOK have realised that the juicy gravy train (i.e. new builds) they've been on for the last number of years is coming to an end and they're going to be seriously short of budgeted targets for the future, so therefore spin this spurious sh!te.  Serious shuffling in the Boardroom as HOK rebrand from being the 'New Home Specialist' to something else!  If anyones in marketing, tap them up quick!


----------



## robd

zac said:


> Just wondering how many real bears exist on this board, those who are bearish and have bet on it using their money i.e.
> ...



Sold a nice period Edwardian house in Dublin North area 2 years ago while on a year out of the country for a tidy profit.
Rent a 100 sqm appartment now in D3.
Cash for a significant deposit but renting, till I can buy a reasonably sized 3 bed, in decent condition, in Dublin North East area, at a price related to rent ie (1500-1600 pm for a 30 yr 75% LTV mtg).
If it doesn't work out for me over the next 4 years I'm out of here ( I hate this city for its lack of infrastructure and stupid prices).
The important thing for me isn't timing the market it's about buying a house I can afford in an area I want to live for it's utility value.

I'm a huge bear now and have been a bear for 3 years.  I forsee the biggest property crash (50%-70%) in history anywhere in the world. Otherwise this country (as it currently is) is pointless. The government can't devalue the currency this time to get us out of inflationary trouble.  All they can do is raise taxes.  Lack of monetary policy is something that I believe is sorrily under regarded by economists, governement and Joe Soaps.  This has never been the case before anywhere in the world.  It's virgin territory.


----------



## baby_tooth

sold out ages ago, bought and sold again, have money salted away in a few interesting schemes / shares....not gold...

pessimmistic on certain irish building firms, esp the one doing big business in canary wharf and another who signed huge deal for a shopping centre / apartment complex in poland...


----------



## DirtyH2O

zac said:


> Just wondering how many real bears exist on this board, those who are bearish and have bet on it using their money i.e.
> 
> *owners *who sold recently to move to rental property, or
> *investors *who reduced(or increased) their irish residential properties recently i.e. last few months(or 2006).
> please reply.
> 
> those with just opinions please do *not* respond to this post.
> 
> 
> ps. is there a need for a new thread for this poll?


 
I sold my PPR - an apartment in D8 last year; bought in 2000. Had multiple reasons for sale - was working abroad for a while and then going travelling, didn't want to join the landlord class, place had history of electrical issues - water pump, washing machine, storage heaters, extractor fans had all needed repair, 200+ unit of social opening next door, whole apartment was north facing so very little daylight and I was glad to be shot of it really.
Felt a little guilty when sold for c.35K more than I wanted\deserved. Since then seems the prices have shot up another 70K-80K approx for the same complex. I was mortgage free so was happy to have the money released and available while I decided where I wanted to live next on my return.
I wasn't going renting but it seems like a huge risk to gamble on a big drop and go renting instead.
I would find wishing for a crash a bit weird as I know the hardship it would cause friends of mine who are not speculating, just trying to have a suitable home for their families.


----------



## Neffa

paddyd said:


> mmmm, but believe it or not there has been a lot of cash in the country for the past few years, and most of the vacant houses are actually Holiday Homes and not for rent. Of the 300k vacant houses, 2/3's are second/holiday homes, the rest being unlet investment properties (100k unlet is still quite large, granted).


 
Nope, the census enumerators believed they were permanently unoccupied - many had no electric connection! 100K unlet is not that large, 5% of the housing stock (on 1.9m units). 300K is eye-popping.


----------



## room305

paddyd said:


> mmmm, but believe it or not there has been a lot of cash in the country for the past few years, and most of the vacant houses are actually Holiday Homes and not for rent. Of the 300k vacant houses, 2/3's are second/holiday homes, the rest being unlet investment properties (100k unlet is still quite large, granted).



This is repeated on the thread so often it is becoming tedious. Where did you get this 2/3 figure from?


----------



## paddyd

room305 said:


> This is repeated on the thread so often it is becoming tedious. Where did you get this 2/3 figure from?


 
From the Hibernian Investment Managers site (HIM). They called it 'vast majority'. As we love our figures and facts here, i assumed 2/3's. 
Will try find the link again

Edit: did a search on google just now and turned up a number of articales to the same effect. Even Davy's was one of them: 'Over 40% of houses built in the past two years are lying vacant as second homes, holiday homes or unlet investment properties.'
Unlet investments would not be as large a slice as holiday homes or 2nd homes. Investors cannot afford to leave property unrented, and assuming you did a whim of research, bought in a rentable area (rule #1 for buying rental property you'd think)


----------



## whizzbang

paddyd said:


> 2/3's are second/holiday homes,



interesting, the CSO said they counted holiday homes separatly, what evidence is there for this 2/3 figure?


----------



## paddyd

whizzbang said:


> interesting, the CSO said they counted holiday homes separatly, what evidence is there for this 2/3 figure?


 
http://www.answers.com/topic/irish-property-bubble

"Since 2000, approximately 75,000 housing units have been built every year as detailed by the Minister For Housing [1]. However, a significant proportion of these new homes are unoccupied. Economic commentator give a figure of approximately 230,000 vacant properties. Of these up to 115,000 or so may be holiday homes"

can we assume if 50% are Holiday homes, and 16% are second homes....? (its probably more)

Its actually quite hard to buy an investment property and not rent it. Remember these are UNOCCUPIED properties, and not properties that the investor hadd to reduce the rent on. They also include houses between tenants at time of census.
The only places I know that were bought as investment properties and are UNRENTABLE are the tax relief apartment blocks built a few years ago (before the relief ended) in places such as Carrick-on-shannon and so on (I'm familiar with those ones in particular.) In addition to being unrentable (no market), they ahve appreciated very little in the past few years, believe it or not. EA friend in Westmeath told me this a while back. They don't want to touch them for vendors, and are telling people to just hold on to them and hope.


----------



## conor_mc

paddyd said:


> From the Hibernian Investment Managers site (HIM). They called it 'vast majority'. As we love our figures and facts here, i assumed 2/3's. Will try find the link again


 
Second/holiday homes are luxuries.

If there is a major downturn in construction which reaches deep into the rest of the economy, you can expect that alot of people will ditch their luxuries in favour of security... ie they'll bank their cash.

It's naive to expect a country in recession (if that were to happen) to maintain >10% of its housing stock as second/holiday homes.

Therefore their current utilisation (or not?) may well be irrelevant once the brown stuff hits the fan.


----------



## JohnG

When you look at photos of many of the houses for sale in Lucan (on Myhome) you will be amazed to see how many are empty - some are unfurnished so they may have been empty for a while.


----------



## whizzbang

paddyd said:


> http://www.answers.com/topic/irish-property-bubble
> 
> "Since 2000, approximately 75,000 housing units have been built every year as detailed by the Minister For Housing [1]. However, a significant proportion of these new homes are unoccupied. Economic commentator give a figure of approximately 230,000 vacant properties. Of these up to 115,000 or so *may* be holiday homes"



"may be holiday homes" *may* be. 

Thats not a definite statement at all. They don't say that *are* holiday homes and they don't say where they got the 115,000 figure so I'm afraid that not really worth anything.

They are not stating a fact and are not giving a reason for their assumptions so its as good as pulling a number from thin air I'm afraid.


----------



## paddyd

conor_mc said:


> Second/holiday homes are luxuries.
> 
> If there is a major downturn in construction which reaches deep into the rest of the economy, you can expect that alot of people will ditch their luxuries in favour of security... ie they'll bank their cash.
> 
> It's naive to expect a country in recession (if that were to happen) to maintain >10% of its housing stock as second/holiday homes.
> 
> Therefore their current utilisation (or not?) may well be irrelevant once the brown stuff hits the fan.


 
this is absolutely true; but those with Holiday homes (115k of them, see above) would be assumed to be the better off, its certainly fair to say; and will be better able to take the hit on a downturn than those mortgaged up to the ears in their PPR.


----------



## paddyd

whizzbang said:


> "may be holiday homes" *may* be.
> 
> Thats not a defintie statement at all. They don't say that *are* holiday homes and they don't say where they got the 115,000 figure so I'm afraid that not really worth anything.
> 
> They are not stating a fact and are not giving a reason for their assumptions so its as good as pulling a number from thin air I'm afraid.


 
good to see you have an open mind! 

it comes from the Davy housing report.

page 2.

take from it whatever you want; i'm not shoving any view on anyone. was merely contesting this 300k properties unoccupied lark; "not including holiday and second homes".

I'm surrounded by bears, just waiting for things to crash. I'm not saying we're not getting a downturn (bacause we probably are already IN one), but I'm certainly not looking forward to it, and I won;'t be on the " see, i told you so" brigade.


----------



## whizzbang

paddyd said:


> good to see you have an open mind!
> 
> it comes from the Davy housing report.
> 
> page 2.
> 
> 
> I'm surrounded by bears, just waiting for things to crash. I'm not saying we're not getting a downturn (bacause we probably are already IN one), but I'm certainly not looking forward to it, and I won;'t be on the " see, i told you so" brigade.



ok, doke, I'll take a look at that and see if they list their assumptions or sources, thanks.


----------



## paddyd

whizzbang said:


> ok, doke, I'll take a look at that and see if they list their assumptions or sources, thanks.


 
no worries; although it does beg the question: who among us didn't do the research on the rental market, and bought anyway(?)

those cheap(er) 3-beds in the tiny west tipperary village will be easy to rent .... won't they?


----------



## whizzbang

paddyd said:


> good to see you have an open mind!
> 
> it comes from the Davy housing report.
> 
> page 2.
> 
> take from it whatever you want; i'm not shoving any view on anyone. was merely contesting this 300k properties unoccupied lark; "not including holiday and second homes".
> 
> I'm surrounded by bears, just waiting for things to crash. I'm not saying we're not getting a downturn (bacause we probably are already IN one), but I'm certainly not looking forward to it, and I won;'t be on the " see, i told you so" brigade.



Right so, I had a read of it and the 50% holiday homes is a guess made by Davey's..

_On the basis of the trends summarised in the table above we reckon the number of vacant properties will have risen to about 230,000 by April of 2006. That is the equivalent of just over 13.5% of the stock. But we still cannot break down this number as between holiday homes, unlet investment properties and stocks held by builders. *A best guess might be that about half of these vacant properties are holiday homes. *_

/edit removed line to reduce smugness


----------



## whizzbang

paddyd said:


> no worries; although it does beg the question: who among us didn't do the research on the rental market, and bought anyway(?)
> 
> those cheap(er) 3-beds in the tiny west tipperary village will be easy to rent .... won't they?



Absolutely!
I think there are a lot of investors who did little or no research on these things. Unfortunatly a lot of these have leveraged their homes on these BTL investments and it could all end up horribly for some people


----------



## plaudit

I have a tiny mortgage, so I more or less own my property outright, its valued around €350K. However I would love to see the market crash and my house devalue 50% to €175K.


----------



## Sidewinder

whizzbang said:


> Right so, I had a read of it and the 50% holiday homes is a guess made by Davey's..
> 
> _On the basis of the trends summarised in the table above we reckon the number of vacant properties will have risen to about 230,000 by April of 2006. That is the equivalent of just over 13.5% of the stock. But we still cannot break down this number as between holiday homes, unlet investment properties and stocks held by builders. *A best guess might be that about half of these vacant properties are holiday homes. *_




And even if they are right and it's only about 120K vacant "investment" properties, and even assuming that in the event of an economic downturn everyone can still afford the upkeep on their 120K holiday/second homes...

When you add the additional approx. 50K units completed since April...

That's at least 3 _years_ worth of supply, lying around empty, _before _the stampede for the exits even begins


----------



## paddyd

plaudit said:


> I have a tiny mortgage, so I more or less own my property outright, its valued around €350K. However I would love to see the market crash and my house devalue 50% to €175K.


 
it sounds like you intend living in that house for the rest of your life, (which is perfectly fine btw). However, if thats the case, then you have absolutely nothing to lose (or gain) in the housing market.... ever.


----------



## Neffa

Sidewinder said:


> And even if they are right and it's only about 120K vacant "investment" properties, and even assuming that in the event of an economic downturn everyone can still afford the upkeep on their 120K holiday/second homes...
> 
> When you add the additional approx. 50K units completed since April...
> 
> That's at least 3 _years_ worth of supply, lying around empty, _before _the stampede for the exits even begins


 
And that was my exact point to the original suggestion that just because there has been a fall in new planning permits that the "nose dive has been stopped" was not right - there is already a huge overhang so a moderation now is hardly suprising but not enough to give us the "soft landing" so beloved of Irish economists employed by estate agents.


----------



## paddyd

Neffa said:


> And that was my exact point to the original suggestion that just because there has been a fall in new planning permits that the "nose dive has been stopped" was not right - there is already a huge overhang so a moderation now is hardly suprising but not enough to give us the "soft landing" so beloved of Irish economists employed by estate agents.


 
correct; but public perception is what runs a wobbly market; and thats why you will never see a property supplement telling us the end is nigh. Its like comical Ali as the tanks rolled into Baghdad! denial to the (bitter) end

People on this board (by n large  ) tend to be clued in. The general population is not however.
We see the signs, and the signs say 'crash'; but the other 90% are blind to the signs, and so the market lands softer than expected.

as someone posted here a few days back: why would anyone buy a house in Ireland right now/today? instead of waiting and seeing what the end of 2006 brings (and another .5% rate rise in the meantime).
If prices keep going up; you're safe that it won't be only a few %. If it drops, you will have been right to wait.

But thats not how it works


----------



## Raskolnikov

I'm surprised that no one mentioned Eddie Hobbs' program that was on last night? The program was about 30 ways to invest your SSIA. He said that "property would be the graveyard for a huge number of SSIA's". Whatever people say about David McWilliams, The Economist or whoever, I would bet that Eddie Hobbs' comments will be a big factor in deterring investment into property.

Also, I'm surprised that no one has mentioned the ESRI/PermanentTSB house price index for August which is at 1%. 

[broken link removed]

As for current market trends regarding house prices? In Cork City there are a huge amount of properties for sale. I would go as far as saying, I've _never_ seen so much property for sale in all my life. On the College Rd near the UCC car park I counted 7 houses for sale within 20 metres of each other.


----------



## paddyd

Raskolnikov said:


> On the College Rd near the UCC car park I counted 7 houses for sale within 20 metres of each other.


 
all investor property. the market is flooded with it at the moment; bourne out of high interest rates, and low/no capital appreciation


----------



## plaudit

paddyd said:


> it sounds like you intend living in that house for the rest of your life, (which is perfectly fine btw). However, if thats the case, then you have absolutely nothing to lose (or gain) in the housing market.... ever.


 
Not quite paddy, I would consider upgrading if the market is right. Suppose I choose to upgrade to something 50% bigger and more expensive. Thats a 525K house, I need to spend 525-350=175K. If the market falls by 50% then this house becomes 262.5K and my house is 175K. That means to upgrade costs 87.5K instead of 175K. I also save on stamp duty and solicitors as they are all based on %.


----------



## Raskolnikov

paddyd said:


> all investor property. the market is flooded with it at the moment; bourne out of high interest rates, and low/no capital appreciation


In fairness though, I would only consider the prices of the properties I mentioned being slightly inflated. 

[broken link removed]=

4 bedroomed place for €370,000 five minutes walk from the city centre and (literally) a stone's throw from the college. €330,000 or so would be a fair price.


----------



## paddyd

plaudit said:


> Not quite paddy, I would consider upgrading if the market is right. Suppose I choose to upgrade to something 50% bigger and more expensive. Thats a 525K house, I need to spend 525-350=175K. If the market falls by 50% then this house becomes 262.5K and my house is 175K. That means to upgrade costs 87.5K instead of 175K. I also save on stamp duty and solicitors as they are all based on %.


 
that does make a crash sound attractive alright
although I'm not sure i'd be relying on things turning out that way!

and a 50% drop would have a massive effect on the economy too; so perhaps you won't have a job? 

(unless you work in our civil service, naturally)


----------



## room305

plaudit said:


> Suppose I choose to upgrade to something 50% bigger and more expensive. Thats a 525K house, I need to spend 525-350=175K. If the market falls by 50% then this house becomes 262.5K and my house is 175K. That means to upgrade costs 87.5K instead of 175K. I also save on stamp duty and solicitors as they are all based on %.



Housing hyper-inflation really only suits:

a) Developers
b) Multiple property owners
c) Downsizers
d) The debt industry

For those of us who don't view houses as a vehicle for profit and who don't own a jumbo-mortgage, any correction in housing should be welcome.


----------



## Sidewinder

Raskolnikov said:


> In fairness though, I would only consider the prices of the properties I mentioned being slightly inflated.
> 
> [broken link removed]=
> 
> 4 bedroomed place for €370,000 five minutes walk from the city centre and (literally) a stone's throw from the college. €330,000 or so would be a fair price.



You have to be kidding. An old terraced house "in need of upgrading"? Even in a good location as you say that house would by historical standards (pre-bubble, and adjusted for inflation in the interim) be worth _maybe _€100K. In 1998 you'd have been very lucky to get IR£60K for it.

That's the scale of this bubble. It's completely nuts. People seem detached from the reality of the prices they are paying, it's all just monopoly money random numbers to them, they just aren't making the connection in their heads to their actual wages and income.


----------



## fatmanknows

*Anybody wanna buy a Hammer - *

*Today's Results for Lisney's*


*View the latest auction results here!* 


Date of Auction: 03/10/2006
Address: Suncroft, Newtownpark Ave, Blackrock, Co Dublin
AMV: € 2.4m
Auction Result: Withdrawn, now quoting €2.4m
Estate Agent: Lisney 

Date of Auction: 03/10/2006
Address: 27 St Mary Road, Ballsbridge, Co Dublin 
AMV: € 5.5m  
Auction Result: Withdrawn, now quoting €6m
Estate Agent: Lisney 

Date of Auction: 03/10/2006
Address: 83 Carysford Downs, Blackrock, Co Dublin 
AMV: € 1.4m
Auction Result: Withdrawn, now quoting €1.47m
Estate Agent: Lisney 

Date of Auction: 03/10/2006
Address: Charleville, Newtownpark Ave, Blackrock, Co Dublin
AMV: € 3m
Auction Result: Withdrawn, now quoting €3.3m
Estate Agent: Lisney 

Date of Auction: 03/10/2006
Address: 3 Kilteragh Pines, Foxrock, Dublin 18
AMV: € 3.2m
Auction Result: Withdrawn, now quoting €3.2m
Estate Agent: Lisney


----------



## Sidewinder

Ummmm....what's with the tactic of withdrawing a house from auction (presumably for lack of interest) and then _raising _your asking price???


----------



## miju

paddyd said:


> Of the 300k vacant houses, 2/3's are second/holiday homes, the rest being unlet investment properties (100k unlet is still quite large, granted).



it's actually more like 260,000 are unoccupied (presumed investment properties) with the rest of the figure being made up of holiday homes

but even going by your figures 100,000 vacant homes is a MASSIVE amount of property just waiting to flood the market


----------



## plaudit

Is that a full list of Lisneys auctions for today or just the failures?

Putting in guide prices at or above auction price is just a face saving exercise IMO. Contact them next week and see how much they have fallen.


----------



## Raskolnikov

Sidewinder said:


> Even in a good location as you say that house would by historical standards (pre-bubble, and adjusted for inflation in the interim) be worth _maybe _€100K.


Not a snowballs chance in hell you'll ever get a house like that for €100,000 or even €200,000 ever again. 

€330,000 is a rough figure at where the mortgage would exceed the rental income. Perhaps it's a little high, but I wouldn't say by much.


----------



## miju

Sidewinder said:


> Ummmm....what's with the tactic of withdrawing a house from auction (presumably for lack of interest) and then _raising _your asking price???



with auctions you'd expect the final price to be higher than the guesstimated value 

so when they are withdrawn and go to private treaty they get a more "realistic" guesstimate 

makes perfect sense doesn't it? a property doesn't sell so we'll up the price


----------



## redo

paddyd said:


> correct; but public perception is what runs a wobbly market; and thats why you will never see a property supplement telling us the end is nigh. Its like comical Ali as the tanks rolled into Baghdad! denial to the (bitter) end
> 
> People on this board (by n large  ) tend to be clued in. The general population is not however.
> We see the signs, and the signs say 'crash'; but the other 90% are blind to the signs, and so the market lands softer than expected.
> 
> as someone posted here a few days back: why would anyone buy a house in Ireland right now/today? instead of waiting and seeing what the end of 2006 brings (and another .5% rate rise in the meantime).
> If prices keep going up; you're safe that it won't be only a few %. If it drops, you will have been right to wait.
> 
> But thats not how it works



http://i20.photobucket.com/albums/b226/roryireland/07-minister3.jpg

http://i20.photobucket.com/albums/b226/roryireland/separated.jpg


----------



## Maine

phoenix_n said:


> How will the irish crash affect property in say Poland. Had thought about buying there but wonder if the money dries up here will that affect the prices abroad. Are we a mini-America to some places in eastern europe.


 
Irish purchasing abroad will be concentrated in various developments. If the property mania ends you could have some short term investors ( soon to be FTBs in ireland) off loading to get back into the irish market. These may in the end be prepared to take a loss to get out. Hence some paddy developments could have a number of irish developers looking to exit at same time = price drops. To some extent there is alot less diversification in risk in that it is still related to market back home.

If US economy achieves soft landing ( some house crashes but not a deep national one) = continuing demand for oil and german exports = growth in germany = higher interest rates in EU and would have less cuts in US interest rates. Overall this could be bad for irish housing market as higher EU interest rates cause problems ?


----------



## Maine

http://www.daft.ie/searchrental.daft?search=1&s[cc_id]=ct1&s[a_id]=ga4&s[mnp]=2000&s[mxp]=&s[bd_no]=&s[search_type]=rental&s[refreshmap]=1&offset=20&limit=10&search_type=rental&id=404112

[broken link removed]=

House which has been for rent for while with no takers now gone on the market for sale.

7135 over 35 years now = probably 7500 by december to buy or 3750 to rent.

1.8m plus costs and stamp = 2m at say 5% = 100,000 interest only. 45,000 to rent ( probably could get it for less)


----------



## zac

walk2dewater said:


> I justed shorted a Irish residential house builder (can’t mention who).  Does that make me a bear



walk2dewater, yes that does make you bear but im rather interested in property transactions

thanks


----------



## zac

zac said:


> Just wondering how many real bears exist on this board, those who are bearish and have bet on it using their money i.e.
> 
> *owners *who sold recently to move to rental property, or
> *investors *who reduced(or increased) their irish residential properties recently i.e. last few months(or 2006).
> please reply.
> 
> those with just opinions please do *not* respond to this post.
> 
> 
> ps. is there a need for a new thread for this poll?



so far we have discovered 4 real bears, who sold within 1 year period and now renting.

also 1 or 2 who sold in last couple of years for multiple reasons, including travel, going abroad etc etc and dint buy on their return, so i guess we can call them half real bears.

any more? there should be lot more here seeing peoples sentiment here in general.


----------



## fatmanknows

walk2dewater said:


> I justed shorted a Irish residential house builder (can’t mention who). Does that make me a bear


 
With a Winter of Discontent ahead of us - you'll not go far wrong discarding yer Mac's and wrapping yerself up in a good Bearskin.

Heard from an excellent source today that the top bod in a leading EA confided to him that the game is up  and that the crash is unavoidable.


----------



## conor_mc

zac said:


> so far we have discovered 4 real bears, who sold within 1 year period and now renting.
> 
> also 1 or 2 who sold in last couple of years for multiple reasons, including travel, going abroad etc etc and dint buy on their return, so i guess we can call them half real bears.
> 
> any more? there should be lot more here seeing peoples sentiment here in general.


 
I'm a bear.... my significant other isn't..... so I regret to say I'm ineligible to join the distinguished list of those whose actions speak louder than words.

I am working on it though.

In fairness though, quite a lot of people here might harbour bearish sentiment, but it's another thing to expect them to prove their bona fides by selling up their PPR from underneath their family. It suits some people, but others may be willing to ride out a downturn.

It's a common misconception on this thread that every house needs to be assessed on its investment merits. Some people just want a home to live in.


----------



## conor_mc

paddyd said:


> this is absolutely true; but those with Holiday homes (115k of them, see above) would be assumed to be the better off, its certainly fair to say; and will be better able to take the hit on a downturn than those mortgaged up to the ears in their PPR.


 
Don't underestimate the level of debt these "better off" people may be carrying. Property has been a huge cash-cow for a lot of the nouveu rich in this country.... those better off and owning a second home today could well be tomorrows version of the dotcom paper millionaires, except with leverage....


----------



## bogwarrior

Article in todays Sydney Morning Herald on how the property slowdown there is affecting people in the outer suburbs of the city, the slump has been deeper there (your Lucans of the world)than in the North Shore or Eastern Suburbs (think southside Dublin)  - SMH.  

_But by Christmas 2003 sentiment across the city had turned: the boom was over. The median Sydney house price dropped about 10 per cent before stabilising this year. But the slump has been deeper and more prolonged in the west and southwest. The latest figures show that prices continued to fall there last financial year._

and

_In a cruel twist, the proportion of new investors in wealthy parts of Sydney rose very little as the boom approached its zenith. In one Sydney local government area with a median house price of $1.2 million (not named by the bank) the proportion of investors dropped in 2003-04. It was the opposite in the west and south-west. Tax Office figures analysed by the Reserve Bank show that in at least 15 Sydney local government areas with below average median house prices the proportion of investors rose in 2003-04. Thousands of neophyte investors were getting into property at the same time in the same area._


----------



## Afuera

Raskolnikov said:


> €330,000 is a rough figure at where the mortgage would exceed the rental income. Perhaps it's a little high, but I wouldn't say by much.



Are you basing that on current mortgage rates though? Using your system for measuring the correct value of the property would mean that it's value would get knocked down by about 40k with every interest rate percentage rise.


----------



## phoenix_n

zac said:


> any more? there should be lot more here seeing peoples sentiment here in general.


I sold my property and now am also renting. I walk to work and pay meager rent. Invested proceeds in a german recovery.


----------



## Guest126

zac said:


> any more? there should be lot more here seeing peoples sentiment here in general.


 
I sold out of Irish property in 2005 and 2006 - invested proceeds in different asset classes, will not buy Irish residential property until yields return to at least 4%.


----------



## Afuera

paddyd said:


> We see the signs, and the signs say 'crash'; but the other 90% are blind to the signs, and so the market lands softer than expected.



I don't think this argument stacks up.

IMHO if we use your own estimate that 90% are blind to the signs, I think it's very likely that that could in itself introduce a shock to the market. The first that many might suspect something is wrong is when they read that the average house price in Ireland has dropped by 10% or so. There's a real likelyhood that news like that sprung all of a sudden on a largely unsuspecting population could cause outright panic.

Sales are already slowing, inventories are continuing to build and this will end up hitting prices eventually (although it may be months after the fact before the figures get published).


----------



## Duplex

The number of vacant housing units in the US (9.1% of total stock) is at the highest since 1960 (when records began).   In Ireland the number of vacant units is somewhere in the region of 15%, (according to figures from the CSO)   The vacancy rate in the UK is roughly 3% of housing stock.   

Have we repealed the laws of supply and demand in Ireland? Or are we witnessing one of the greatest speculative asset bubbles in European history? 




http://www.census.gov/hhes/www/housing/hvs/qtr206/q206tab1.html


----------



## room305

CapitalCCC said:


> I sold out of Irish property in 2005 and 2006 - invested proceeds in different asset classes, will not buy Irish residential property until yields return to at least 4%.



You can buy Irish residential property now with a yield of 4%.


----------



## Sarah W

5400. Yay!


----------



## StoppedClock

room305 said:


> You can buy Irish residential property now with a yield of 4%.


 
Net?


----------



## Guest126

room305 said:


> You can buy Irish residential property now with a yield of 4%.


 
Not the house that I want to live in - the yields are about 2.5% to 2.8%.


----------



## room305

StoppedClock said:


> Net?



Definitely. Although you'd probably struggle to do so in Dublin. I'm selling my PPR and net yield (10 months rent) would be about 3.3%.

My point is that 4% net yield would be quite low - I'd be looking for 6% before climbing back into the pool.


----------



## phoenix_n

room305 said:


> Definitely. Although you'd probably struggle to do so in Dublin. I'm selling my PPR and net yield (10 months rent) would be about 3.3%.
> 
> My point is that 4% net yield would be quite low - I'd be looking for 6% before climbing back into the pool.


 
Are you still trying to offload your property ? How are you finding the market?


----------



## zac

conor_mc said:


> In fairness though, quite a lot of people here might harbour bearish sentiment, but it's another thing to expect them to prove their bona fides by selling up their PPR from underneath their family. It suits some people, but others may be willing to ride out a downturn.
> 
> It's a common misconception on this thread that every house needs to be assessed on its investment merits. Some people just want a home to live in.



conor_mc very important statement indeed, especially for  those who think prices will be back to 2001 levels, and for those who predict 50-70% crash on this board.


----------



## Bedsit

[broken link removed] (Irish Times)

" .... While remaining strong, total revenue growth slowed significantly in the month, cooling to an annualised rate of 8.6 per cent, compared with 15.8 per cent in August. The trend reflects a marked slowdown in growth in taxes related to the property market.

While still strong at 24.6 per cent, growth in capital gains taxes during September was much slower than the 114 per cent growth registered in August. Capital acquisitions tax receipts grew by 51.5 per cent in September, compared to 119.6 per cent in August. Stamp duties slowed more modestly, rising by 33.4 per cent, compared to 36.6 per cent in August. ... "


----------



## room305

phoenix_n said:


> Are you still trying to offload your property ? How are you finding the market?



Its only on the market about a week but there has been some interest already and one viewing.

We've priced it _at_ May levels as opposed to May + x%, so we're hoping this will work in our favour.

I'm keeping a close eye on the local market and although inventory is building, properties priced at May levels seem to be shifting. Fingers crossed and all that.


----------



## phoenix_n

room305 said:


> Its only on the market about a week but there has been some interest already and one viewing.
> 
> We've priced it _at_ May levels as opposed to May + x%, so we're hoping this will work in our favour.
> 
> I'm keeping a close eye on the local market and although inventory is building, properties priced at May levels seem to be shifting. Fingers crossed and all that.


 
G'luck and remember to find out as much as possible who the prospective bidders are and go with the one that you are confident can close even if he/she is an underbidder. You dont want the sale to fall through.


----------



## arbus

I just wonder if there exists any statistics about number of houses for a sale in different regions?
For example i was monitoring 2 categories from 19/09/06:
1) total number of houses for sale in Bray
2) number of houses (excluding apartments) for sale in Dublin South (except Talagth) with asking price <381k

1 grew for last 15 days from 124 for 138 (11% from initial number)
2 grew from 41 to 45 (about 10%)

it would be intersting to have a longer history for such a statistics

btw in myhome.ie when u do a search for Dublin South the last page is always at 150. Does anybody know how to get the total number (which is definetly higher than that)?


----------



## TPoriginal

*Living through a house price crash*

Having kept an eye on this thread for a while now I thought I'd add my tuppence worth. I lived in London throughout the 90s. When I met my then boyfriend and now husband, he had bought a 2 bed FTB flat in West London, 10 mins walk from the tube. He bought for £55,000 with a friend in 1987. It went up to £75 approx by 1989 and then started to go wrong. His friend bailed out at £65,OOO and hubby paid him the balance. We live in that flat until 1995 when it was valued at £52,000. 

All this time we were trapped by negative equity and had to resave a new deposit to buy a house in 1995. Had we sold that flat as late as 1995, we would have lost money so we held on to it. It is now worth £130,000 and with some refurbishment £160,000.

My observation was that prices creep down slowly. You might say the figures are small but all those 1% interest increases added up. Because mortgage loans in Ireland now are so enormous, each 0.25% rise has an equivalent effect in my opinion.


----------



## daveirl

http://www.finfacts.com/irelandbusinessnews/publish/article_10007493.shtml  Might be getting slow in the mortgage market?


----------



## room305

phoenix_n said:


> G'luck and remember to find out as much as possible who the prospective bidders are and go with the one that you are confident can close even if he/she is an underbidder. You dont want the sale to fall through.



Thanks. That would be my thinking exactly.


----------



## whizzbang

arbus said:


> I just wonder if there exists any statistics about number of houses for a sale in different regions?
> For example i was monitoring 2 categories from 19/09/06:
> 1) total number of houses for sale in Bray
> 2) number of houses (excluding apartments) for sale in Dublin South (except Talagth) with asking price <381k
> 
> 1 grew for last 15 days from 124 for 138 (11% from initial number)
> 2 grew from 41 to 45 (about 10%)
> 
> it would be intersting to have a longer history for such a statistics
> 
> btw in myhome.ie when u do a search for Dublin South the last page is always at 150. Does anybody know how to get the total number (which is definetly higher than that)?



I've got daily stats for daft.ie on a county by county basis for sales and rents since July if you are interested?

to go beyond 150 choose a smaller sample, ie choose areas within Dublin south or view houses and appartments in two different searches.


----------



## whizzbang

daveirl said:


> http://www.finfacts.com/irelandbusinessnews/publish/article_10007493.shtml  Might be getting slow in the mortgage market?



yikes!, that smacks of desperation!


----------



## murray

Whizzbang - I would be very interested to see them stats if you would be so kind to PM me.

Room 305 - best of luck - as i previously mentioned - im selling my PPR to go renting & clear a tidy profit!- insist your EA gets an 'AIP' (agreement in principle) from the bidders whith a full declaration of their position ie.FTB , downsizing, trading up etc. My contracts are just out & survey done - fingers crossed- i would'nt fancy going back to market in November/new year..............


----------



## Calina

daveirl said:


> http://www.finfacts.com/irelandbusinessnews/publish/article_10007493.shtml  Might be getting slow in the mortgage market?



They don't have a 100% mortgage offering if I recall correctly. My experience with AIB too is that they're a bit tougher in lending criteria than other institutions are. 

So this is interesting. It's like "If you're a good enough risk to get a mortgage out of us then we'll reward you"...


----------



## conor_mc

Calina said:


> They don't have a 100% mortgage offering if I recall correctly. My experience with AIB too is that they're a bit tougher in lending criteria than other institutions are.
> 
> So this is interesting. It's like "If you're a good enough risk to get a mortgage out of us then we'll reward you"...


 
.... rather than a broker.

I'm not really sure this move is indicative of anything really. AIB are strict enough I believe, so if they were really desperate they'd be relaxing their lending policies before making an offering like this.

Also, AIB have been pushing savings policies lately, more than most of the other banks, offering better rates etc. Coupled with the sale and lease-backs, I wonder are they in the process of making the books look a bit healthier in the expectation of a downturn.


----------



## zac

whizzbang said:


> I've got daily stats for daft.ie on a county by county basis for sales and rents since July if you are interested?
> 
> to go beyond 150 choose a smaller sample, ie choose areas within Dublin south or view houses and appartments in two different searches.



whizzbang, do you have properties on sale all over ireland(or just co dublin) data from daft? if yes would be great if you can pm me. thanks


----------



## redo

daveirl said:


> http://www.finfacts.com/irelandbusinessnews/publish/article_10007493.shtml  Might be getting slow in the mortgage market?


Is this an attempt to counter McDowel stamp duty comment?


----------



## phoenix_n

murray said:


> Room 305 - best of luck - as i previously mentioned - im selling my PPR to go renting & clear a tidy profit!- insist your EA gets an 'AIP' (agreement in principle) from the bidders whith a full declaration of their position ie.FTB , downsizing, trading up etc. My contracts are just out & survey done - fingers crossed- i would'nt fancy going back to market in November/new year..............


 
Smart move. You will just have earned the easiest money you ever will. Invest wisely and you can knock off 10-15 years of your retirement date.


----------



## River

Calina said:


> They don't have a 100% mortgage offering if I recall correctly. My experience with AIB too is that they're a bit tougher in lending criteria than other institutions are.quote]
> 
> They do offer 100% to professionals (accts, doctors etc).


----------



## murray

phoenix_n - i really hope you are right !!

in my mind - it just doesnt add up whatever way you look at it - 600k for a 2 bed apartment bought for 365k  - - 2 yrs ago ???? I had better learn how to invest wisely & very quickly - i have to admit , the only game i know reasonably well is property............... gold/shares/etc all greek to me ! better start learning !


----------



## Guest126

phoenix_n said:


> Smart move. You will just have earned the easiest money you ever will. Invest wisely and you can knock off 10-15 years of your retirement date.


 
phoenix_n - you're not Eddie Hobbs by any chance are you?


----------



## Sidewinder

Raskolnikov said:


> Not a snowballs chance in hell you'll ever get a house like that for €100,000 or even €200,000 ever again.
> 
> €330,000 is a rough figure at where the mortgage would exceed the rental income. Perhaps it's a little high, but I wouldn't say by much.



Why not?

Seriously? Japanese property prices fell for 15 years running after their bubble burst. There really is nothing to prevent it happening here too.


----------



## murray

"phoenix_n - you're not Eddie Hobbs by any chance are you?"

LMOA !!!!!!!!!


----------



## hmmm

The warning given to those investing in the stockmarket is to never try and time the market. Selling to rent is probably the property equivalent, and while I would be extremely bearish on residential property I'd be very uncomfortable with the idea of STR'ing.


----------



## Savvy

River said:


> Calina said:
> 
> 
> 
> They don't have a 100% mortgage offering if I recall correctly. My experience with AIB too is that they're a bit tougher in lending criteria than other institutions are.quote]
> 
> They do offer 100% to professionals (accts, doctors etc).
> 
> 
> 
> 
> That may be the official line but I was offered 100% loan with them and I'm in IT. Didn't go with it by the way.
Click to expand...


----------



## ncs

hmmm said:


> The warning given to those investing in the stockmarket is to never try and time the market. Selling to rent is probably the property equivalent, and while I would be extremely bearish on residential property I'd be very uncomfortable with the idea of STR'ing.


 
Selling up to rent would be more of a measured response though; property doesn't have to be at its peak, you need only be confident that it is either shortly before or shortly after. Short can mean months or even a year or two so long as the cost of making the switch is low. Personally speaking, I'd be saving money on a monthly basis if I rented an equivalent home to the one I own - my only risk would be continued aggressive house price inflation or a dramatic short-term increase in rents. It is a gamble, but I'm prepared to spend a few years paying a little extra to rent somewhere nice but out of my purchase price range.


----------



## fatmanknows

hmmm said:


> The warning given to those investing in the stockmarket is to never try and time the market. Selling to rent is probably the property equivalent, and while I would be extremely bearish on residential property I'd be very uncomfortable with the idea of STR'ing.


 
Got to disagree there.........Timing is Everything ! If I was to follow that kind of logic I should either just get in or get out of a market irrespective of events ??? 

To blindly attach yourself to any asset (even your own PPR) irrespective of how wild the value of that asset has appreciated don't sound like good sense to me.

Property in this town is completely out of sync with incomes. Either property falls drastically or Incomes rise dramatically. I've placed my bet.


----------



## murray

ncs  -totally agree - as 2pack would say "nobody ever lost out taking a profit!" I would have moved anyway in the next 2 yrs for other reasons - so now is as good a time as any. 

And I truly think it is going to go pear shaped.....


----------



## phoenix_n

murray said:


> phoenix_n - i really hope you are right !!
> 
> in my mind - it just doesnt add up whatever way you look at it - 600k for a 2 bed apartment bought for 365k - - 2 yrs ago ???? I had better learn how to invest wisely & very quickly - i have to admit , the only game i know reasonably well is property............... gold/shares/etc all greek to me ! better start learning !


 
if i was in your position i'd buy a small block of apts in Hamburg as returns are about 6% and use it as a cash cow asset producing yearly income and prices are only set to increase. Couple that with impending legislation will make it even more profitable. Although lots of regs regarding tenancy i'd look on it as a pensionable asset. My two bits.


----------



## soma

hmmm said:


> The warning given to those investing in the stockmarket is to never try and time the market. Selling to rent is probably the property equivalent



I would disagree. I think STR is more akin to realising that the price of your shares is completely out of whack with the company's earnings/dividends. Sure they may go even higher, but you're happy to sell now and to at least do well, instead of chasing the ever elusive 'top'.


----------



## Remix

check out the graph on this page showing our

"unparalled exposure to the construction sector"

http://www.finfacts.com/irelandbusinessnews/publish/article_10007496.shtml


Oh, yeah I almost forgot to mention. Expect a soft landing !


----------



## Afuera

hmmm said:


> The warning given to those investing in the stockmarket is to never try and time the market. Selling to rent is probably the property equivalent, and while I would be extremely bearish on residential property I'd be very uncomfortable with the idea of STR'ing.



I don't think you can compare STR as trying to time the market. Many are using it as a mechanism to lock in profit made over the last few years and already had plans of selling anyway to trade up, emigrate or whatever. With rents in good areas so cheap, it doesn't make sense to continue paying a big mortgage for a property that you ultimately may not want to live in in the near future anyway.


----------



## markyboy

Some building industry spokesperson was on Pat Kenny this morning (didn't catch who) suggesting another 80,000 builds next year.


----------



## hmmm

fatmanknows said:


> Got to disagree there.........Timing is Everything ! If I was to follow that kind of logic I should either just get in or get out of a market irrespective of events ???


Believe it or not yes. For the average investor in shares, dollar cost averaging (ignoring market sentiment) has been shown to be one of the most consistent ways of making money. The stats show that on average investors who try and judge market timing do worse than those who don't - e.g. the market after the 87 crash recovered quickly, even while sentiment was poor.


----------



## Afuera

Remix said:


> check out the graph on this page showing our
> 
> "unparalled exposure to the construction sector"
> 
> http://www.finfacts.com/irelandbusinessnews/publish/article_10007496.shtml
> 
> 
> Oh, yeah I almost forgot to mention. Expect a soft landing !



I think it's already been well established that the ISE is highly dependant on the construction industry and banks. Should there be a bad outlook for these sectors it would wipe a lot off the stocks. Not surprising that Goodbody's would produce a scary looking report like this (23% of GDP in Ireland is construction related) and then still try to conclude that it's all looking good for the future.


----------



## River

Savvy said:


> River said:
> 
> 
> 
> That may be the official line but I was offered 100% loan with them and I'm in IT. Didn't go with it by the way.
> 
> 
> 
> 
> yeah, I was also offered 100% before I was fully qualified. I did go with it.
Click to expand...


----------



## Maine

fatmanknows said:


> Got to disagree there.........Timing is Everything ! If I was to follow that kind of logic I should either just get in or get out of a market irrespective of events ???
> 
> To blindly attach yourself to any asset (even your own PPR) irrespective of how wild the value of that asset has appreciated don't sound like good sense to me.
> 
> Property in this town is completely out of sync with incomes. Either property falls drastically or Incomes rise dramatically. I've placed my bet.


 
Completely agree - incomes to price are way out of whack.

IMO the FTBS / investors are the key to the market - if they pull up those currently in starter homes will not be able to sell and trade up for years. This will hit values right up the chain. What we could see in Ireland IMO is a locked up market with a dramatic fall off in transactions. Imagine if there is a crash suggesting to the bank manager that you want to rent existing to buy that family house up the chain. Thats before the stamp duty distortion re cost of moving.

Although if stamp duty collapses then either corporation tax has to double or income tax rise by circa 20% based on yesterdays dept of finance numbers.

its difficult to remain balanced on this soft landing tight wire


----------



## Remix

Afuera said:


> I think it's already been well established that the ISE is highly dependant on the construction industry and banks. Should there be a bad outlook for these sectors it would wipe a lot off the stocks. Not surprising that Goodbody's would produce a scary looking report like this (23% of GDP in Ireland is construction related) and then still try to conclude that it's all looking good for the future.


 
And our GDP is skewed abnormally high due to multinational activity. If you express as a % of GNP the figure gets even worse !


----------



## conor_mc

hmmm said:


> Believe it or not yes. For the average investor in shares, dollar cost averaging (ignoring market sentiment) has been shown to be one of the most consistent ways of making money. The stats show that on average investors who try and judge market timing do worse than those who don't - e.g. the market after the 87 crash recovered quickly, even while sentiment was poor.


 
Thing is that for timed market trading you've got to be consistently correct to beat buy-and-hold. With your PPR, you've only got to be correct once.

I wouldn't recommend STR just to make a fast buck, but if you intend to trade up anyway it's a calculated risk whereby the transaction costs can be ignored because you're expecting to pay them anyway.


----------



## murray

hmmm said:


> Believe it or not yes. For the average investor in shares, dollar cost averaging (ignoring market sentiment) has been shown to be one of the most consistent ways of making money. The stats show that on average investors who try and judge market timing do worse than those who don't - e.g. the market after the 87 crash recovered quickly, even while sentiment was poor.


 

hmmm, not sure about that now (regarding property) - Out of interest , what you you do in my situation then?


----------



## bearishbull

http://www.rte.ie/business/2006/1004/housing.html

According to goodbodies we are building 21 homes per 1000 people and will exceed euro average in 2 and a half years. wonder if all the empty houses are being included?


----------



## Remix

Remix said:


> And our GDP is skewed abnormally high due to multinational activity. If you express as a % of GNP the figure gets even worse !


 
Doin' the maths.

For most countries, GDP = GNP but for Ireland GDP = GNP * 1.2

Therefore if construction is 25% of GDP, construction must be *30%* ( 25 * 1.2) of GNP.


----------



## Afuera

markyboy said:


> Some building industry spokesperson was on Pat Kenny this morning (didn't catch who) suggesting another 80,000 builds next year.



Is this not just a case of the construction industry trying to talk up the market though? It seems like they are trying to assure any shareholders that the future's looking good and they will have lots of business going forward. 
I wonder why Sisks recently decided to diversify and get into the healthcare industry, if things are looking so good for construction right now?


----------



## Afuera

Remix said:


> Therefore if construction is 25% of GDP, construction must be *30%* ( 25 * 1.2) of GNP.



Sounds like a lot of eggs in the one basket!


----------



## StoppedClock

bearishbull said:


> http://www.rte.ie/business/2006/1004/housing.html
> 
> According to goodbodies we are building 21 homes per 1000 people and will exceed euro average in 2 and a half years. wonder if all the empty houses are being included?


 
IMO the European average is rendered completely irrelevant because of the massive number of unoccupied homes now.  Just because something is the European average does not mean it is a target to aim for or even a comparative measure.

Norwegians consume on average just 6 liters of alcohol per person per annum, the European average is closer to 10, would you invest in a Norwegian brewer who proposed upping their output for the domestic market because it was below the European average, even while all the shelves were fully (over) stocked??

PS Please feel free to come up with a better analogy, I’m sure there is an absolute Peach that can be summed up in a single pithy statement suitable for bulls with extremely short attention spans.


----------



## whizzbang

bearishbull said:


> http://www.rte.ie/business/2006/1004/housing.html
> 
> According to goodbodies we are building 21 homes per 1000 people and will exceed euro average in 2 and a half years. wonder if all the empty houses are being included?



I did the maths for this a while back, we already have way more rooms per 1000 people than the euro average, they just have more properties per 1000. I guess this comes from our historically larger families.

The numbers:
Ireland has the 2nd largest houses on average, with 5.3 rooms per dewelling. The euro average is 4.32 rooms per dwelling.

So if we have 410 dewllings per 1,000 people, at 5.3 rooms per dwelling we have, 410*5.3= 2173 rooms per 1,000 people
European average is:465 * 4.32 = 2008.8 rooms per 1,000 people,

So we already have way more rooms than the euro average! 

On average European dwellings are larger than in Ireland, 90 sqm vs 88.3 sqm. but I dont' think building more tiny dwellings is going to help that figure much.

source of dwelling size data: http://www.finfacts.com/irelandbusinessnews/publish/article_10005314.shtml


----------



## Afuera

bearishbull said:


> http://www.rte.ie/business/2006/1004/housing.html
> 
> According to goodbodies we are building 21 homes per 1000 people and will exceed euro average in 2 and a half years.



So good news for future buyers then!

Sounds like another reason for them to "wait-and-see" what the next 88,000 properties next year will bring. There might even be a few in desirable areas and at affordable prices.


----------



## bearishbull

whizzbang said:


> I did the maths for this a while back, we already have way more rooms per 1000 people than the euro average, they just have more properties per 1000. I guess this comes from our historically larger families.
> 
> The numbers:
> Ireland has the 2nd largest houses on average, with 5.3 rooms per dewelling. The euro average is 4.32 rooms per dwelling.
> 
> So if we have 410 dewllings per 1,000 people, at 5.3 rooms per dwelling we have, 410*5.3= 2173 rooms per 1,000 people
> European average is:465 * 4.32 = 2008.8 rooms per 1,000 people,
> 
> So we already have way more rooms than the euro average!
> 
> On average European dwellings are larger than in Ireland, 90 sqm vs 88.3 sqm. but I dont' think building more tiny dwellings is going to help that figure much.
> 
> source of dwelling size data: http://www.finfacts.com/irelandbusinessnews/publish/article_10005314.shtml


Yes but person per household is decreasing due to less people getting married young, more divorces etc, i take your point but dont think its as simple as that but i do think we will have an oversupply soon (within a few years)


----------



## StoppedClock

bearishbull said:


> Yes but person per household is decreasing due to less people getting married young, more divorces etc, i take your point but dont think its as simple as that but i do think we will have an oversupply soon (within a few years)


 
Do you believe we don't have an oversupply now?


----------



## ivuernis

StoppedClock said:


> Do you believe we don't have an oversupply now?


 
I pure number terms we probably do have an oversupply but as bearishbull said it's not as simple as that due to demographics but also in the type of housing we are oversupplied in and other types we are undersupplied in... and more importantly where these are or are not located.


----------



## StoppedClock

ivuernis said:


> I pure number terms we probably do have an oversupply but as bearishbull said it's not as simple as that due to demographics but also in the type of housing we are oversupplied in and other types we are undersupplied in... and more importantly where these are or are not located.


 


bearishbull said:


> Yes but person per household is decreasing due to less people getting married young, more divorces etc, i take your point but dont think its as simple as that but i do think we will have an oversupply soon (within a few years)


 
Good point, we certainly have an oversupply of small 1 and 2 bed apartments in crap locations with poor services and an undersupply of homes suitable for raising a family, however using this line of reasoning I fail to see how we will have an oversupply soon (within a few years).


----------



## whizzbang

bearishbull said:


> Yes but person per household is decreasing due to less people getting married young, more divorces etc, i take your point but dont think its as simple as that but i do think we will have an oversupply soon (within a few years)



true, you don't know if there are big houses with few poeple in them or if they are all crammed with renters. But it does suggest that there are more than enough rooms to house the people we have numberswise at least.

Also I'm sure the same demographic arguments would apply to large parts of europe as well?


----------



## whizzbang

StoppedClock said:


> Good point, we certainly have an oversupply of small 1 and 2 bed apartments in crap locations with poor services and an undersupply of homes suitable for raising a family, however using this line of reasoning I fail to see how we will have an oversupply soon (within a few years).



Well there are a few things that could cause oversupply

1. Investors bailing out of the market (275,000 empty properties etc, many more rented out but sellable if they wanted to.., very likely, especially now we are enjoying our "soft landing" and there few capital appreciation gains to be had)
2. Continued excessive building (likely? or another while at least)
3. Less immigrents/immigrents going home (if economy turns, quite likely in the construction sector)

One of options 2 or 3 are very likely to happen. Either Construction continues and immigrent keep coming or Construction stops and a lot of the immigrents no longer have jobs. You could say these construciton workers could find jobs in other construction besides residential housing but I'm not sure if the government is going to ramp up public construction projects just as stamp duty takes are coming down. And we only need so many office blocks.

I'm not sure how we can avoid oversupply to be honest. The question is how will we deal with it?


----------



## conor_mc

StoppedClock said:


> Do you believe we don't have an oversupply now?


 
In a speculative bubble, supply isn't so much the issue, over-demand is. As in demand for instruments of capital appreciation, not demand for homes.

If undersupply was the issue, then house price growth wouldn't be speculative  by definition.... it'd be a genuine price rise due to lack of supply (think 1996-2001).

Even if we were perfectly supplied for genuine home occupation, demand for speculative instruments of capital appreciation warps the supply/demand curve. Remove that element of demand (i.e. lack of further cap. apprec.) and in theory you get a return to fundamental values.... not accounting for sentiment/herd mentality.

Incidentally, I think we are oversupplied. We'll see what shakes out of the tree once capital appreciation begins to disappear.


----------



## phoenix_n

conor_mc said:


> In a speculative bubble, supply isn't so much the issue, over-demand is. As in demand for instruments of capital appreciation, not demand for homes.
> .


 
You hit it on the head. The current housing bubble (and slow motion burst) was not based on sound economics but on frenzied buying. Creeping interest rates and increasing supply is only part of the problem.


----------



## conor_mc

phoenix_n said:


> You hit it on the head. The current housing bubble (and slow motion burst) was not based on sound economics but on frenzied buying. Creeping interest rates and increasing supply is only part of the problem.


 
Balanced supply and natural home-ownership demand would give us a return to fundamentals.

Over-supply the market, and we'll probably overshoot the mark.


----------



## Duplex

conor_mc said:


> In a speculative bubble, supply isn't so much the issue, over-demand is. As in demand for instruments of capital appreciation, not demand for homes.
> 
> If undersupply was the issue, then house price growth wouldn't be speculative by definition.... it'd be a genuine price rise due to lack of supply (think 1996-2001).
> 
> Even if we were perfectly supplied for genuine home occupation, demand for speculative instruments of capital appreciation warps the supply/demand curve. Remove that element of demand (i.e. lack of further cap. apprec.) and in theory you get a return to fundamental values.... not accounting for sentiment/herd mentality.
> 
> Incidentally, I think we are oversupplied. We'll see what shakes out of the tree once capital appreciation begins to disappear.


 
Very well put conor mc.   Worth restating that we have falling rental values in this market. Domestic service sector inflation is running at about 6%, rental inflation at 1.5% (approx), this is in the face of stellar house price inflation and immigration.  Its mania with a large dollop of bonkers for good measure.


----------



## ivuernis

Not exactly on topic but certainly related to our current plight...

[broken link removed]


----------



## HotdogsFolks

ivuernis said:


> Not exactly on topic but certainly related to our current plight...
> 
> [broken link removed]


 
This does not surprise me. The mentality of this country is very short term, and we only seem to care about money. "Progress" is when a new shopping centre is built.

The idea of actually thinking about the future or doing something which is seperated from commercial interests is alien to us...

For example, I run a few hobby type businesses which will never make money and I don't care if they make money, but most Irish people cannot understand that I do this because I want to not because I want to make money...


----------



## redo

conor_mc said:


> In a speculative bubble, supply isn't so much the issue, over-demand is. As in demand for instruments of capital appreciation, not demand for homes.
> 
> If undersupply was the issue, then house price growth wouldn't be speculative  by definition.... it'd be a genuine price rise due to lack of supply (think 1996-2001).
> 
> Even if we were perfectly supplied for genuine home occupation, demand for speculative instruments of capital appreciation warps the supply/demand curve. Remove that element of demand (i.e. lack of further cap. apprec.) and in theory you get a return to fundamental values.... not accounting for sentiment/herd mentality.
> 
> Incidentally, I think we are oversupplied. We'll see what shakes out of the tree once capital appreciation begins to disappear.



Exactly.  Expect to see this analysis reproduced in the sunday papers


----------



## tig

hey hotdogsfolks what businesses r u in?


----------



## Goldfinger

tig said:


> hey hotdogsfolks what businesses r u in?


 
I bet he sells burgers


----------



## conor_mc

redo said:


> Exactly. Expect to see this analysis reproduced in the sunday papers


 
I just hope they give me (and AAM!) a mention for it! 

As a matter of personal interest, what kind of a drop do people expect in what I would consider to be the segment of the market that will hold up best, 3-bed semi's in good areas inside in the M50? Specifically I'd be interested in the Drumcondra/Collins Ave/Griffith Ave/Glasnevin area, where houses are currently around the 550/600k mark.


----------



## whathome

conor_mc said:


> I just hope they give me (and AAM!) a mention for it!
> 
> As a matter of personal interest, what kind of a drop do people expect in what I would consider to be the segment of the market that will hold up best, 3-bed semi's in good areas inside in the M50? Specifically I'd be interested in the Drumcondra/Collins Ave/Griffith Ave/Glasnevin area, where houses are currently around the 550/600k mark.


 
I would expect properties in the 550/600k range in that area, Collinswood for example will drop to about 350/400k.  This would produce a gross yield of about 5-6%, the point where a professional investor _might _step in and buy.  Where property bubbles have burst in other markets, it's always been the professional investor that saves the market, buying when they see value.


----------



## bearishbull

conor_mc said:


> I just hope they give me (and AAM!) a mention for it!
> 
> As a matter of personal interest, what kind of a drop do people expect in what I would consider to be the segment of the market that will hold up best, 3-bed semi's in good areas inside in the M50? Specifically I'd be interested in the Drumcondra/Collins Ave/Griffith Ave/Glasnevin area, where houses are currently around the 550/600k mark.


 
Good location!  (i live close to griffith ave) , looks like the metro will be stopping at Griffith Ave as well as near collins ave(they added an extra mini-route between central and eastern routes which looks like eastern and central will be merged for metro line) , so this should add value in long term even if prices drop significantly in short term, although its close enough to city centre for taking bus or bike in no time.

Just heard AAM's Brendan on radio with matt cooper about property market slowing and cooper uttered words "bubble" and "bursting"  in same sentence! interesting.


----------



## StoppedClock

bearishbull said:


> Good location!  (i live close to griffith ave) , looks like the metro will be stopping at Griffith Ave as well as near collins ave(they added an extra mini-route between central and eastern routes which looks like eastern and central will be merged for metro line) , so this should add value in long term even if prices drop significantly in short term, although its close enough to city centre for taking bus or bike in no time.
> 
> Just heard AAM's Brendan on radio with matt cooper about property market slowing and cooper uttered words "bubble" and "bursting" in same sentence! interesting.


 
Was that :

"There is no bubble and so bursting is impossible, BUY" 

or 

"The bubble is bursting, SELL SELL SELL!!!"


----------



## bearishbull

StoppedClock said:


> Was that :
> 
> "There is no bubble and so bursting is impossible, BUY"
> 
> or
> 
> "The bubble is bursting, SELL SELL SELL!!!"


He was also talking to  a mortgage broker about borrowing capacity reduced and prices falling. Near the end of the interview there was a poping noise in the studio and cooper says something like "oh thats the sound of a bubble bursting"


----------



## blindjustice

room 305 pm you


----------



## beattie

bearishbull said:


> He was also talking to a mortgage broker about borrowing capacity reduced and prices falling. Near the end of the interview there was a poping noise in the studio and cooper says something like "oh thats the sound of a bubble bursting"


 
That won't go down well with the EA fraternity. There seems to be a continous feed of these stories emanating from the media. I still think it isn't fully sinking in the average Joe yet, I still think it will take 3-6 months for the new reality to take hold


----------



## blindjustice

http://www.rte.ie/business/2006/1004/housing.html

how can this happen without job losses??

and then: http://www.rte.ie/business/2006/1003/sfa.html

so by putting two and two together does it not equal RECESSION???


and gonna throw this in for good measure!!

http://www.rte.ie/business/2006/1003/economy.html 

dont we need those people because didnt we factor them in when figuring out how many houses we need to build per year??
will people keep coming if the building industry is slowing down i.e making people redundant?? and if they wont come for that what will they come for ? manufacturing jobs? no thats in recession?

what the hell is going on ? the country has been ruined as far as I can see?  The roads are in bits the health system is a joke the police and army are underfunded despite being both overstretched we have a tiny navy a tiny air force. Private businesses have not been helped enough. People cant afford houses. If we are/were such a rich country then why are the aforementioned the way their are plus much more i cant think off the top of my head.
WHAT DID WE DO WITH ALL OUR NATIONS WEALTH?  


oh and Europe IS going to use Dublin as an example of how NOT to do things : http://www.blather.net/zeitgeist/archives/2006/10/dublin_worstcase_scenario_in_e.html


----------



## fatmanknows

Hearing more optimistic comments from a smaller EA today. He assures that the market is still intrinsically strong and that we are merely taking a step backwards.

What he did'nt say was that we might be standing with our backs to the edge of a cliff.

What I want to know is where is all this 'Wall of maturing SSIA Mula' we were told about at the start of the year that was going to drive the donkey on ?. 

PS New car sales down 12% last month. So it does'nt appear to be there either ! Gosh, where could it be ?


----------



## messyleo

interesting price drop in portobello from 850k to 740k

original cached - 

now - [broken link removed]


----------



## whizzbang

fatmanknows said:


> What I want to know is where is all this 'Wall of maturing SSIA Mula' we were told about at the start of the year that was going to drive the donkey on ?.
> 
> PS New car sales down 12% last month. So it does'nt appear to be there either ! Gosh, where could it be ?




paying off the wall of debt?

or send of to Sunny Beach Bulgaria?


----------



## hmmm

fatmanknows said:


> What I want to know is where is all this 'Wall of maturing SSIA Mula' we were told about at the start of the year that was going to drive the donkey on ?.


I'll offer two theories

People believed SSIAs would drive up house prices, so they bought last year against the SSIA (unofficially)
The SSIAs that are maturing now tend to be from the more financially astute, who aren't gettting sucked into property. Later SSIAs may behave differently


----------



## conor_mc

fatmanknows said:


> What I want to know is where is all this 'Wall of maturing SSIA Mula' we were told about at the start of the year that was going to drive the donkey on ?.


 
As far as I'm aware, the vast majority of SSIA's were taken out in the final 2 months of the scheme, something like 80-90% if I remember correctly. Expect the tidal wave of SSIA mula next March/April/May.

Having said that, I suspect a lot of it is already spent and a very, very large portion of the proceeds, when they arrive, will be used to clear loans and credit cards. I certainly hope so, else the country's shagged.


----------



## blindjustice

heres more of it:

http://www.askaboutmoney.com/showthread.php?t=37917

anyone out there think its going to level off? Anyone think it wont PLUMMET?


----------



## fatmanknows

*OK,OK.... I accept that it's a little used but who wants to buy a newish Hammer ! - *

*View the latest auction results here!* 

Date: 04/10/2006
Address: 40 & 42 Belmont Avenue, Donnybrook, Dublin 4
AMV: € 4.5m 
Auction Result: Withdrawn at €2.4m, 42 - withdrawn at €2.3m, Now both Quoting €5.25m
Estate Agent: Sherry FitzGerald 

Date: 04/10/2006
Address: 21 Leinster Road, Rathmines, Dublin 6
AMV: € 2.3m
Auction Result: Withdrawn, now quoting €2.5m
Estate Agent: Sherry FitzGerald 

Date: 04/10/2006
Address: 14 Elton Park, Sandycove, Co Dublin
AMV: € 3.25m
Auction Result: Withdrawn, now quoting €3.5m
Estate Agent: Sherry FitzGerald 

Date: 04/10/2006
Address: 78 Heytesbury Lane, Ballsbridge, Dublin 4
AMV: € 2.5m 
Auction Result: Sold under the hammer for € 3.6m !!! 
Estate Agent: Sherry FitzGerald 

Date: 04/10/2006
Address: 7 Mountpleasant Avenue Upper, Ranelagh, Dublin 6
AMV: € 1.8m
Auction Result: Withdrawn, now quoting 1.8m
Estate Agent: Sherry FitzGerald 

Date: 04/10/2006
Address: 75 Haddington Road, Ballsbridge, Dublin 4
AMV: € 2.2m
Auction Result: Withdrawn at €2.3m, sold after for higher. (really, I still want to see proof !!)
Estate Agent: Sherry FitzGerald 

Date: 04/10/2006
Address: 66 Whitebeam Road, Clonskeagh, Duublin 14
AMV: € 1.6m
Auction Result: Withdrawn, now quoting 1.6m
Estate Agent: Sherry FitzGerald 

Date: 04/10/2006
Address: 14 Ashfield Road, Dublin 6
AMV: € 1.5m
Auction Result: Withdrawn, now quoting €1.5m
Estate Agent: Sherry FitzGerald


----------



## beattie

blindjustice said:


> heres more of it:
> 
> http://www.askaboutmoney.com/showthread.php?t=37917
> 
> anyone out there think its going to level off? A nyone think it wont PLUMMET?


 
Had a look on myhome and there doesn't seem to be any shortage of properties on the market in Castleknock. I thinks Phoenix's advice to drop the price is merited, wonder will it be heeded?


----------



## fatmanknows

Hey, Hope all you Boy and Girls are fast asleep. Remember Mr.ECB Man is coming tomorrow. He wont bring you anything if he catches you peeping !


----------



## fatmanknows

It's not that I'm pessimistic about the market but if we get 50 basis points tomorrow I changing my name to Yogi !


----------



## Borderlord

What time is the Landlord in Frankfurt putting up the rents today ? Imagine some rents will be increasing more than once today and that's now 5 increases since last December.. even my old landlord didn't put it up at that rate.. I also note that houses For Sales in Dublin are now over 3,000 for the first time.. This week last year the For Sale in Dublin was 740... the smart money is on the move..


----------



## plaudit

12.00 announcement, 12.45 for the press conference where we are told what to expect in the new year, and probably nail down the hike in December.


----------



## plaudit

fatmanknows said:


> It's not that I'm pessimistic about the market but if we get 50 basis points tomorrow I changing my name to Yogi !


 
There is an economic theory that the US rises @0.25% were not dramatic enough and the ECB should suprise the markets with a big 0.5% hike at some point.


----------



## phoenix_n

beattie said:


> Had a look on myhome and there doesn't seem to be any shortage of properties on the market in Castleknock. I thinks Phoenix's advice to drop the price is merited, wonder will it be heeded?


 
I keep an eye on Phibsboro and for the first time today the number of properties on myhome for that area exceeds 50.


----------



## Afuera

whathome said:


> Where property bubbles have burst in other markets, it's always been the professional investor that saves the market, buying when they see value.



Has there ever been a bursting property bubble that had so many amateur investors though? Our scenario in Ireland has turned a huge portion of the public into landlords. I think that this is a huge unpredictable wildcard that is more likely to panic and be less able to handle a loss.


----------



## whathome

Afuera said:


> I think that this is a huge unpredictable wildcard that is more likely to panic and be less able to handle a loss.


 
Absolutely. Amateur landlords will be hiding under the duvet, furiously calling the estate agent, questioning why their glorious 1 bed in Donabate isn't selling. My point was that the only thing preventing the market collapsing to zero will be professional investors who will buy when they get a decent yield.


----------



## Afuera

whathome said:


> My point was that the only thing preventing the market collapsing to zero will be professional investors who will buy when they get a decent yield.



Yes, you're right. It will of course reach a stage where readjusted yields make it economically viable to BTL once again, and should provide some kind of a floor.

It's possible that there may also be people on low to average wage who have been totally priced out the market currently. Some of these may be in a position to enter should prices drop although it's hard to verify how many would fall into this group, and how long they would be willing to watch the market drop for (since those drops work to their advantage).


----------



## ncs

Afuera said:


> Yes, you're right. It will of course reach a stage where readjusted yields make it economically viable to BTL once again, and should provide some kind of a floor.


 
I agree that this may constitute a floor of sorts but economic viability is also dependent on finding tenants in what may already be a chronic oversupply. We'd be back to fundamentals such as location so I fear for the far-flung investor estates. Having said that, once long term tenants find prices have dropped far enough to render mortgages and rent on a par, this may provide a more "solid" floor.


----------



## Duplex

Afuera said:


> Yes, you're right. It will of course reach a stage where readjusted yields make it economically viable to BTL once again, and should provide some kind of a floor.
> 
> It's possible that there may also be people on low to average wage who have been totally priced out the market currently. Some of these may be in a position to enter should prices drop although it's hard to verify how many would fall into this group, and how long they would be willing to watch the market drop for (since those drops work to their advantage).


 
The problem is in identifying where the support level lies.  Its a moving target caused by the very fact that the whole economy is heavily dependent on house price inflation.  The support level (for investors) will be a place where net rental yields alone (excluding any possibility of house price inflation) will justify investment.  That support level will be very difficult to identify in a market in flux.


----------



## whathome

ncs said:


> Having said that, once long term tenants find prices have dropped far enough to render mortgages and rent on a par, this may provide a more "solid" floor.


 
Due to herd mentality, it's unlikely that private buyers will step in until professionals put a floor on the market.  It's typical bubble activity, unfortunate lemmings pile in at the top and then fear finally keeps others out as they see the disaster unfold.


----------



## Duplex

whathome said:


> Due to herd mentality, it's unlikely that private buyers will step in until professionals put a floor on the market. It's typical bubble activity, unfortunate lemmings pile in at the top and then fear finally keeps others out as they see the disaster unfold.


 

This is how bad it can get.  The support level for condo's in Denver was $110,000, now its $20,000.  



> The Rocky Mountain News reports from Colorado. “Real estate foreclosures in the Denver area rocketed by 32.3 percent in the first nine months of the year, as condo overbuilding, risky loans and inflated appraisals drove the number of loan defaults to near record territory.”
> 
> “Through September, 14,205 foreclosures had been filed in the metro area, compared to 10,735 in the first three quarters of 2005. The record for foreclosures was set in 1988, when 17,122 were filed from Boulder to Douglas counties.”
> 
> “Economist Tucker Hart Adams said many of the foreclosures seem to be in the suburban condo market.”
> 
> “In one troubled condo project in southeast Denver, some one-bedroom units are being sold in foreclosure for as little as $18,000 to $20,000, while they sold for $110,000 to $120,000 at their peak, said broker Rob Murphy. Many owners walked away from their mortgages after being slapped with huge assessments.”
> 
> “‘The problem is it has a ripple effect,’ Murphy said ‘Appraisers are already under fire because a few bad apples were overinflating them. Now, appraisers can’t justify units down the street selling for $80,000 to $90,000, when they use this for a comparable.’”


----------



## fatmanknows

9 out of 96 sell under the hammer this week. I suppose things are not too bad after all.


----------



## whizzbang

fatmanknows said:


> 9 out of 96 sell under the hammer this week. I suppose things are not too bad after all.



15 sold after the auction, do people think this would be at a lower price?


----------



## ncs

whathome said:


> Due to herd mentality, it's unlikely that private buyers will step in until professionals put a floor on the market. It's typical bubble activity, unfortunate lemmings pile in at the top and then fear finally keeps others out as they see the disaster unfold.


 
OK, if we assume Bodie and Doyle step in at the right estimated yield, presumably we have all the factors we need (apart from today's ECB announcement) to establish how far prices would have to drop to make investment mathematically attractive once more. I've had a go at the calculation but I won't quote the details since I'm probably wrong... but if we assume capital appreciation is zero, I don't think even a 30% drop would be enough. Anyone better qualified like to take a guess ?


----------



## Dipole

ncs said:


> I agree that this may constitute a floor of sorts but economic viability is also dependent on finding tenants in what may already be a chronic oversupply. We'd be back to fundamentals such as location so I fear for the far-flung investor estates. Having said that, once long term tenants find prices have dropped far enough to render mortgages and rent on a par, this may provide a more "solid" floor.


 
I figure a 2 bed apartment in Blanch should only rent for about €800.  Some might argue that the current average rental price of €1050 is fair but I'll work off €800 figure p.m. which is €8800 with one month void excluding any additional expenses like management fee, ptsb, upkeep, etc....  Assuming professional investors will come back in to the market at 6% yield then doesn't that make the "worth" of this apartment €146,600 on the open market.
2 beds in Blanch are typically selling for over €300,000 so that is less than 50% of current market value.
A few pages back in the thread I figured that there was no stickiness in the market so is it possible that we could have a 50% crash in the value of two bed apartments in outlying parts of Dublin within 18 months?

Only really doubtful part of my calculations above is social welfare propping up the market which means that real rents will stay at the €1050 mark but still you are looking at a drop to well below 200,000 before an investor starts getting a yield of 6%


----------



## whizzbang

ncs said:


> OK, if we assume Bodie and Doyle step in at the right estimated yield, presumably we have all the factors we need (apart from today's ECB announcement) to establish how far prices would have to drop to make investment mathematically attractive once more. I've had a go at the calculation but I won't quote the details since I'm probably wrong... but if we assume capital appreciation is zero, I don't think even a 30% drop would be enough. Anyone better qualified like to take a guess ?



Well the appartment I rent would have to drop by 50% before it would get to  a 5% yield. I would have though most investors would be looking for 6% - 7% yield with no capital appreciation, that seems the average around europe.


----------



## plaudit

But prices rise by 5% a year in this country lads, when times are hard. Its 20% during the good years, which is 3 out of every 4 years. How many times have ye been told that by Estate Agents?


----------



## conor_mc

ncs said:


> OK, if we assume Bodie and Doyle step in at the right estimated yield, presumably we have all the factors we need (apart from today's ECB announcement) to establish how far prices would have to drop to make investment mathematically attractive once more. I've had a go at the calculation but I won't quote the details since I'm probably wrong... but if we assume capital appreciation is zero, I don't think even a 30% drop would be enough. Anyone better qualified like to take a guess ?


 
Avg rent in Dublin, according to Daft Q2 2006 report is about €1250.
Assuming a 6% rental yield reasserts itself...

((1250 * 11) / 6) * 100 = €230k avg house price in Dublin, current avg is €483k according to the same report.


----------



## shanegl

On the subject of putting your money where your mouth is:

I've just been offered a 2 bed apartment in Artane as part of the DCC affordable housing scheme. No decision will be made until I view the apartment. I am still bearish on the future of the market.

Opinions people?


----------



## Guest112

Let's remember too that a higher rental yield will be required as interest rates rise.

Investors have alternative channels for investing their money and the money markets become more attractive as interest rates rise.

Property investors will not be happy with 5% rent yield when interest rates reach 6%


----------



## Dipole

shanegl said:


> On the subject of putting your money where your mouth is:
> 
> I've just been offered a 2 bed apartment in Artane as part of the DCC affordable housing scheme. No decision will be made until I view the apartment. I am still bearish on the future of the market.
> 
> Opinions people?


 
Discounted price will insulate yoju to a certain extent from house price collapse.
If you have any aspirations to start a family in the next 5 to 6 years then hold out for a three bed as transaction costs are high when selling property.  You might also avoid mgmt fee on a three bed.


----------



## conor_mc

APHRODITE said:


> Let's remember too that a higher rental yield will be required as interest rates rise.
> 
> Investors have alternative channels for investing their money and the money markets become more attractive as interest rates rise.
> 
> Property investors will not be happy with 5% rent yield when interest rates reach 6%


 
Good point. As things stand today, we're looking at ECB rates at 4% max.... any moves further than that can't be foreseen based on currently available data, but that's not to say that some nasty data won't rear its head in 2007.

4% ECB would indicate 6-7% yields at a minimum, but I wouldn't be surprised if we saw 8-10% yields over the next 5 years, given a massive loss of public confidence in property. 8-10% yield is a bargain, 6-7% is probably the least that a professional investor would want.


----------



## JayDub

After purchasing a home, the second more expensive purchase is a car. Sales of new cars have dropped 12% in September. 
http://www.unison.ie/stories.php3?ca=9&si=1699765&issue_id=14723

With today's expected interest rate rise, first time buyers will see their mortgage payments rise by €391 compared to this time last year.
http://www.unison.ie/stories.php3?ca=9&si=1699829&issue_id=14723

Soft landing my This post will be deleted if not edited to remove bad language!!!


----------



## shanegl

Dipole said:


> Discounted price will insulate yoju to a certain extent from house price collapse.
> If you have any aspirations to start a family in the next 5 to 6 years then hold out for a three bed as transaction costs are high when selling property. You might also avoid mgmt fee on a three bed.


 
Agreed on the discount. No aspirations for family within the next 5 years, but then I suppose your circumstances can change over night. I don't think I could afford a three bed, and as a single person it would be beyond my needs anyway.
There's a lot to think about. Its not everyday you get offered an apartment at 50% discount. Surrounded by bulls in RL though, so need some nice bearish sentiment


----------



## shanegl

I should also add that my job will cap my mortgage at 5%


----------



## plaudit

As rates rises its not as attractive to borrow €30K for a new car. People will change every 4 years instead of 3 etc.


----------



## conor_mc

Dipole said:


> Discounted price will insulate yoju to a certain extent from house price collapse.
> If you have any aspirations to start a family in the next 5 to 6 years then hold out for a three bed as transaction costs are high when selling property. You might also avoid mgmt fee on a three bed.


 
I agree. If it was a house you could happily live in for the next 20 years I'd say go ahead because the reduced price is probably worth it as there is still a risk (however remote I personally believe it to be) that prices won't crash.

But if its an apartment that you can't see yourself living in in 5 years time, I'd hold off. The greater danger here is that you're stuck somewhere unsuitable for your needs.


----------



## delboy159

shanegl said:


> On the subject of putting your money where your mouth is:
> 
> I've just been offered a 2 bed apartment in Artane as part of the DCC affordable housing scheme. No decision will be made until I view the apartment. I am still bearish on the future of the market.
> 
> Opinions people?


 
the bottom line in this is
a) can you comfortable afford the payments (when your mort goes to 6%)?
b) do you want to live in the area?
c) do you like the apartment?

You are getting an insulation against price drops due to the cheaper price of the house - so in that respect you are some what protected from any price drops.....


----------



## room305

shanegl said:


> I should also add that my job will cap my mortgage at 5%



At a 50% discount to current market price and with a mortgage capped at 5% I'd buy. Prices are unlikely to fall much further than 50% and it is possible they will fall less.

So what would the mortgage @ 5% cost pm compared to renting an equivalent property?


----------



## shanegl

room305 said:


> At a 50% discount to current market price and with a mortgage capped at 5% I'd buy. Prices are unlikely to fall much further than 50% and it is possible they will fall less.
> 
> So what would the mortgage @ 5% cost pm compared to renting an equivalent property?


 
I've no idea on figures yet, but I will be doing such comparisions tonight when I get home.

My understanding of affordable housing though is that you bear a proportionate loss if you sell?


----------



## whathome

shanegl said:


> I've just been offered a 2 bed apartment in Artane as part of the DCC affordable housing scheme. No decision will be made until I view the apartment. I am still bearish on the future of the market.
> 
> Opinions people?


 
If it's something like this...
[broken link removed]=

I think they will fall to about €240,000. That number is calculated based on a 6% yield, they currently rent for about €1,200 pcm.

Interestingly, they've had problems offloading the final phase of those apartments over the past few months. Price still seems very high for the area, maybe developer priced in anticipation of affordable housing scheme.


----------



## shanegl

Good detective work whathome.


----------



## room305

shanegl said:


> I've no idea on figures yet, but I will be doing such comparisions tonight when I get home.
> 
> My understanding of affordable housing though is that you bear a proportionate loss if you sell?



There is clawback if you sell within five years. This clawback is proportional to the discount you received and reduces over the five years. Thus if you bought and sold immediately at market value they would clawback the full amount of the discount (50%).


----------



## whizzbang

ECB rates up .25% to 3.25%
http://www.ecb.eu/home/html/index.en.html


----------



## SHARP

From the article:

Now economists are predicting there could even be two more rates rises before the end of the year. Nick Matthews, an economist at Barclays Capital in London, said he expected the ECB to raise its rate to 3.25pc. 
"We're looking at two more rate increases by the end of the year," he added. 
Another rates rise in December, in addition to today's, will see the average home buyer around the country paying some €500 a month more in mortgage payments than last year.

The average homebuyer? Is that 300,000 mortgages? 500 extra a month is serious money!!! 2 more interest rate rises due this year also.........God help anyone on Mortgages of 400k and upwards - they HAVE to be feeling a huge pinch now, next year could be a very dreary year for many.


----------



## Bedsit

SHARP said:


> From the article:
> 
> Now economists are predicting there could even be two more rates rises before the end of the year. Nick Matthews, an economist at Barclays Capital in London, said he expected the ECB to raise its rate to 3.25pc.
> "We're looking at two more rate increases by the end of the year," he added.



It will be interesting to listen to the commentary by Mr Trichet this afternoon. If he quotes the phrase "strong vigilance" then we can expect a rate rise in November, possibly followed by another in December. He could however not do that and just point to inflationary fears thus paving the way for just a December rate rise.


----------



## Debtwish

Bedsit said:


> It will be interesting to listen to the commentary by Mr Trichet this afternoon. If he quotes the phrase "strong vigilance" then we can expect a rate rise in November, possibly followed by another in December. He could however not do that and just point to inflationary fears thus paving the way for just a December rate rise.


 
Let hope he stamps on this cr8p we've been hearing in the media about there being no rate rises in '07.


----------



## Humdinger

We have been living in interest rate nirvana in recent years - alltime historic lows. 
My wife and I relived our own FTB experience in the early 90's - 9% interest rate, income taxes 20% higher than today, relatively lower salaries. Yes house prices were significantly cheaper though they felt similarly out of reach.


----------



## fmoran

Just a quick note a friend mine who looks after House insurance in an Estate Agency in D15. His business is down 60% the last 2 weeks.


----------



## plaudit

FLASH: Trichet says strong credit growth pose medium term inflation risks


----------



## plaudit

Trichet is talking up more hikes.


----------



## plaudit

Inflation risks clearly on the upside depite oil fall: Trichet


----------



## plaudit

ECB council "unanimous" on todays hike " :Trichet


----------



## plaudit

Trichet: Falling oil will spur growth, every line and he is talking up inflation.


----------



## plaudit

Trichet: I will not contradict expectation of hike by year end

= definate hike in December


----------



## plaudit

Trichet will not comment on 2007 rate outlook, ECB will act accordingly


----------



## robd

http://www.ecb.int/press/pressconf/2006/html/is061005.en.html



> To sum up, annual inflation rates are projected to remain elevated in 2006 and 2007, with risks to this outlook remaining clearly on the upside. Given the ongoing dynamism of monetary and credit growth in an environment of already ample liquidity, a cross-check of the outcome of the economic analysis with that of the monetary analysis supports the assessment that upside risks to price stability prevail over the medium term. It is essential that inflation expectations remain firmly anchored at levels consistent with price stability. If our assumptions and baseline scenario are confirmed, it will remain warranted to further withdraw monetary accommodation. The Governing Council will therefore continue to monitor very closely all developments so as to ensure price stability over the medium and longer term.


So no rise in November, but looks like another rise in December. When asked to confirm future markets analysis of pricing in a futher 25 basis points Ticket said he would not say anthing to change their view. He wouldn't comment on anything for 2007 either way.


----------



## plaudit

Eur, Gbp an Chf falling on good numbers from US.


----------



## soma

Unusually clear commentary from Trichet I would have thought.


----------



## mollser

Irish Times interesting today, reporting the facts...

"dire week in the auction rooms"

"general acceptance now that the normally short autumn season might be even shorter, as the buyers that are there are sitting on their hands and taking in the view"

"agents have the neck to quote higher prices than initial AMV having withdrawn a property without a single bid.  This type of dilusional behavous is unlikely to attract buyers..."

Not much bullish sentiment from the IT anymore i'm afraid


----------



## whizzbang

Here's a question, do banks have to raise the rates on existing mortgages once the ECB increases the base rate? Or do they just do it because they can?

For example, say I get a mortgage at 4%, and that the bank borrowed that money at the interbank rate of 3% (before todays hike). Is the money the bank took the loan of not fixed at 3% for the term of the loan? Or do the banks who loaned the money to the Irish bank also raise their rates?

Or does it work some other way?


----------



## ivuernis

soma said:


> Unusually clear commentary from Trichet I would have thought.


 
Agreed (from the bits I heard). Did he mention "strong vigilance"? I got quite of lot of streaming interruptions while watching online so missed portions of his speech.


----------



## soma

fmoran said:


> Just a quick note a friend mine who looks after House insurance in an Estate Agency in D15. His business is down 60% the last 2 weeks.



An example of the domino effect upon employment (and the tax take etc.) that many expect, once the construction/housing sector grinds to a halt.


----------



## conor_mc

whizzbang said:


> Here's a question, do banks have to raise the rates on existing mortgages once the ECB increases the base rate? Or do they just do it because they can?
> 
> For example, say I get a mortgage at 4%, and that the bank borrowed that money at the interbank rate of 3% (before todays hike). Is the money the bank took the loan of not fixed at 3% for the term of the loan? Or do the banks who loaned the money to the Irish bank also raise their rates?
> 
> Or does it work some other way?


 
It's an overnight rate, so the current rate is what the bank get charged for what they owe on any given night regardless of what rate the money was originally borrowed at.

Otherwise all the 1980's/90's mortgage would still be on 10+% interest rates today.

Hence banks raise/lower the rates they charge their customers on loans in line with the ECB rate to maintain their margin.


----------



## robd

ivuernis said:


> Agreed (from the bits I heard). Did he mention "strong vigilance"? I got quite of lot of streaming interruptions while watching online so missed portions of his speech.



Nope.  Also, I posted the summary paragraph above if you want the overview.


----------



## StoppedClock

conor_mc said:


> It's an overnight rate, so the current rate is what the bank get charged for what they owe on any given night regardless of what rate the money was originally borrowed at.
> 
> Otherwise all the 1980's/90's mortgage would still be on 10+% interest rates today.
> 
> Hence banks raise/lower the rates they charge their customers on loans in line with the ECB rate to maintain their margin.


 

What about the so called carry trade ? Low IR Yen etc.


----------



## conor_mc

Debtwish said:


> Let hope he stamps on this cr8p we've been hearing in the media about there being no rate rises in '07.


 
I think he's left the door wide open for hikes in 2007 should they be required with the talk of medium-term inflation risks.

From what I've read here he certainly hasn't said anything to reassure the media that they're right about no hikes in 2007.


----------



## plaudit

ECB raised rates today -- will help anchor expectations - rates still accommodative, progressive withdrawal of accommodation warranted if scenario develops as expect - will continue to monitor very closely. 

Economic analysis. Economic recovery more broad-based will moderate somewhat but still grow around potential with some volatility in growth around the turn of the year. Balanced risks short-term but long-term risks down. 

HICP - Inflation likely be volatile short-term rising up to end of year and in early 2007. Favourable GDP momentum and higher wages mean clear upside risks going forward.Money and liquidity. Confirms inflation risks to upside in the medium-term. Liquidity is ample by all measure. Requires careful monitoring. Property market developments strong in some countries. 
VIEW: 'Holding' post rate rise statement which leaves open the possibility of a follow up rate rise on 7th December. No discernible alteration to ECB stance. Broadly wait and see. No strong vigilance mention means no November rate rise.


----------



## Bedsit

Kohn Warns Against Underestimating Inflation Concern (Bloomberg)


----------



## whizzbang

conor_mc said:


> It's an overnight rate, so the current rate is what the bank get charged for what they owe on any given night regardless of what rate the money was originally borrowed at.
> 
> Otherwise all the 1980's/90's mortgage would still be on 10+% interest rates today.
> 
> Hence banks raise/lower the rates they charge their customers on loans in line with the ECB rate to maintain their margin.



Thanks for that! That would make sense.


----------



## walk2dewater

We'll see at least one 0.5% hike first half of 2007.


----------



## phoenix_n

APHRODITE said:


> Let's remember too that a higher rental yield will be required as interest rates rise.
> 
> Investors have alternative channels for investing their money and the money markets become more attractive as interest rates rise.
> 
> Property investors will not be happy with 5% rent yield when interest rates reach 6%


 
Dont focus too much on yields. Doesnt really matter what the future yields are when the capital is depreciating.


----------



## SteelBlue05

walk2dewater said:


> We'll see at least one 0.5% hike first half of 2007.


 
You cannot see that with any level of surety.


----------



## plaudit

SteelBlue05 said:


> You cannot see that with any level of surety.


 
All the talk is of upside, so I'd go with at least 0.25% next year. GBP is going up next month too.


----------



## fatmanknows

walk2dewater said:


> We'll see at least one 0.5% hike first half of 2007.


Stop talking dirty !


----------



## Arthur Daley

Don't think all of the last rate rise was passed on by all lenders. This one will have to be though...........


----------



## SHARP

Arthur Daley said:


> Don't think all of the last rate rise was passed on by all lenders. This one will have to be though...........


 
Bank of Ireland/ICS certainly did a


----------



## Maine

mollser said:


> Irish Times interesting today, reporting the facts...
> 
> "dire week in the auction rooms"
> 
> "general acceptance now that the normally short autumn season might be even shorter, as the buyers that are there are sitting on their hands and taking in the view"
> 
> "agents have the neck to quote higher prices than initial AMV having withdrawn a property without a single bid. This type of dilusional behavous is unlikely to attract buyers..."
> 
> Not much bullish sentiment from the IT anymore i'm afraid


 
Sentiment has changed very very quickly. Its only a few weeks ago that bulls were declaring this thread as a boring rehash and should be closed. Alot of opinion here has been bang on the money...

Will we ever again see queues for property ....


----------



## bearishbull

Jaysis Plaudit we dont need a ticker from bloomberg via this thread, just give us a summary in one post afterwards.


----------



## soma

Maine said:


> Will we ever again see queues for property ....



Of course we will! But it'll be many years away & there'll be crash on the way first. Anyone who is a bull these days is simply denying the existence of economic cycles.


----------



## bearishbull

Seems to be a lot of new build apartments for sale at moment and more launching every week.


----------



## beattie

bearishbull said:


> Seems to be a lot of new build apartments for sale at moment and more launching every week.


 
Incredible amount the the IT's supplement today. Does anyone know if they are priced more cheaply than other ones to be released, say 6 months ago?


----------



## Savvy

> Seems to be a lot of new build apartments for sale at moment and more launching every week.


I thought the same too. A lot in the IT today.Is this a time of the year when new builds are planned to arrive on the market?


----------



## StoppedClock

Savvy said:


> I thought the same too. A lot in the IT today.Is this a time of the year when new builds are planned to arrive on the market?


 

Not sure whether they were planned to or whether they are dumping them but Hooke McDonald have never had as many launches


----------



## robd

beattie said:


> Incredible amount the the IT's supplement today. Does anyone know if they are priced more cheaply than other ones to be released, say 6 months ago?



The Metro had 3 full pages ads for new builds today.  Don't remember seeing new build ads here before.


----------



## hmmm

There was a piece on the News at 1 about the ECB hike, with the usual vox pop. It was amazing how many people interviewed were fretting about their siblings "never will be able to get on the property ladder" (in Irish lala land prices will keep going up even if no-one can afford to buy). It would be foolish to underestimate how much stupid money is still out there which doesn't understand basic economics.


----------



## bearishbull

hmmm said:


> There was a piece on the News at 1 about the ECB hike, with the usual vox pop. It was amazing how many people interviewed were fretting about their siblings "never will be able to get on the property ladder" (in Irish lala land prices will keep going up even if no-one can afford to buy). It would be foolish to underestimate how much stupid money is still out there which doesn't understand basic economics.


Yeah i heard the women saying "i fear my children will be never able to get on the "Ladder" " , people dont realise that once enough FTB's are priced out the bottom rung of the ladders ends and the market has to correct, they also fail to consider supply/demand and  role incomes and rents have indetermining prices, they just see prices rising for last 20+ years(in nominal terms, i know prices fell in real terms at least once in last 20 years) and assume when my children are 15-20 years older they wont be able to buy. If theres no buyers(or drastically reduced number of buyers due to affordability) then prices HAVE to drop.


----------



## walk2dewater

bearishbull said:


> Yeah i heard the women saying "i fear my children will be never able to get on the "Ladder" " , people dont realise that once enough FTB's are priced out the bottom rung of the ladders ends and the market has to correct, they also fail to consider supply/demand and role incomes and rents have indetermining prices, they just see prices rising for last 20+ years(in nominal terms, i know prices fell in real terms at least once in last 20 years) and assume when my children are 15-20 years older they wont be able to buy. If theres no buyers(or drastically reduced number of buyers due to affordability) then prices HAVE to drop.


 
Another classic is, “Prices can’t crash”, because, “where will people live?”...

[Sometimes I feel like I live in a parallel universe in this country]


----------



## conor_mc

walk2dewater said:


> Another classic is, “Prices can’t crash”, because, “where will people live?”...
> 
> [Sometimes I feel like I like in a parallel universe in this country]


 
Welcome to the land of the amateur property expert.

Whatever you say about us bears on this thread, at least we've taken the time to educate ourselves about the current situation and how it might play out compared with other property bubbles throughout history.

Most people just assume that people with money (property developers, investors, EA's, banks) MUST know better than they do themselves, which is why these people can continue to con the masses.


----------



## whathome

walk2dewater said:


> Another classic is, “Prices can’t crash”, because, “where will people live?”...
> 
> [Sometimes I feel like I like in a parallel universe in this country]


 
And another brainless comment I heard recently:

"We're so glad we bought in the spring.  The bank wouldn't let us borrow nearly as much now after the interest rate hikes."


----------



## FGM Doyle

So Basically the average Jimmy Garda and Mary Nurse who bought into the property pyramid are going to be worse effected..


----------



## FGM Doyle

For anyone out there who has a grudging dislike for EA's, now is the time to test their mettle, try a house in Lucan 3 bed semi-d.. ask for the minimum value say 390,00, then ask due to current climate would the vendor go lower to say 360,000.. I did this the EA got angry and hung up.. Hardly honing their Skills in the new market..


----------



## phoenix_n

whathome said:


> Absolutely. Amateur landlords will be hiding under the duvet, furiously calling the estate agent, questioning why their glorious 1 bed in Donabate isn't selling. My point was that the only thing preventing the market collapsing to zero will be professional investors who will buy when they get a decent yield.


 
I know Donabate well and always thought apartments there were a risky buy. Although good train links (if you dont mind standing) the prices are too high for apts so far from the city.

335 (or now [broken link removed] ) for a 2 bed.


----------



## conor_mc

FGM Doyle said:


> So Basically the average Jimmy Garda and Mary Nurse who bought into the property pyramid are going to be worse effected..


 
Absolutely not. At least they won't lose their construction-related jobs! It'll be Paddy the Plasterer (not that one!) and Brenda the Bank-Employee who'll be hit worst.


----------



## hmmm

FGM Doyle said:


> So Basically the average Jimmy Garda and Mary Nurse who bought into the property pyramid are going to be worse effected..



Let's speculate:
- Flipper/short term speculator: Are in trouble now, trying to get out and may be able to lock in profits if you sell quickly.
- Investor, rent covers mortgage, good yield (bought in 1998): You may have trouble finding renters, but you should emerge ok
- Investor, subsidising rent: Screwed when prices start falling. Can't afford to sell and can't afford to subsidise the rent.
- Home owner, bought in area they like living, 2006, can afford mortgage: You'll survive, but some of your neighbours will be paying half the mortgage you have to pay for the same type of property.
- Home owner, bought to "get on ladder" - can afford mortgage, don't like area: You're going to be stuck there for 10-15 years.


----------



## JayDub

Given the current climate, what are your views on purchasing a section 23 for purely tax relief reasons? I know time is ticking...


----------



## StoppedClock

conor_mc said:


> Absolutely not. At least they won't lose their construction-related jobs! It'll be Paddy the Plasterer (not that one!) and Brenda the Bank-Employee who'll be hit worst.


 

I reckon Cahil the car salesman won't be doing to well either, unfortunetly Eamon the Estate Agent will be alright once they get their head around the new new paradigm and start pushing people to sell at any price.


----------



## liteweight

conor_mc said:


> Brenda the Bank-Employee who'll be hit worst.




Won't bank employees revert to their benefit in kind mortgages?? The only reason they don't avail of these at the moment is that they'd have to pay BIK tax. If mortgage rates go much higher, pauing the tax will be worth it!


----------



## FGM Doyle

I was referring to the average couple who through Irish urban myth and neo-materialistic greed, peer pressure, keeping up with the jones, call it what you like but the property market (pyramid scheme) that has so indulged this nation since the inception of the Celtic Tiger has been chased by the average Irish couple regardless of trade or career because you just couldn't loss on it, it's your pension easy earning no work.. sures it like gauranteed..These are the poor souls who will be hurt most by the downward trend..puppets on a string pulled by Greed.


----------



## conor_mc

liteweight said:


> Won't bank employees revert to their benefit in kind mortgages?? The only reason they don't avail of these at the moment is that they'd have to pay BIK tax. If mortgage rates go much higher, pauing the tax will be worth it!


 
True, but I was thinking more along the lines of bank staf employed directly in construction-related banking i.e. mortgage lending.


----------



## Arthur Daley

Most BIK mortgages are worth it at the moment I think, if they're 3% fixed.............


----------



## bearishbull

phoenix_n said:


> I know Donabate well and always thought apartments there were a risky buy. Although good train links (if you dont mind standing) the prices are too high for apts so far from the city.
> 
> 335 (or now [broken link removed] ) for a 2 bed.


Prices in such areas are screwed long term as theres loads of land to build in such areas compared to say inside Dublin canals.


----------



## bearishbull

FGM Doyle said:


> So Basically the average Jimmy Garda and Mary Nurse who bought into the property pyramid are going to be worse effected..


I known plenty of Jimmy Gardas that bought multiple properties when the mortgage was fully covered by the rent back in late eighties and most of nineties. one garda i know from castleknock (big house there) retired at 55 and has ten properties and lives off his public sector pension. It was all about timing, and now is the worst time to buy for last 30 years.


----------



## liteweight

Arthur Daley said:


> Most BIK mortgages are worth it at the moment I think, if they're 3% fixed.............



I'd say you're right. At 4% the BIK might be worth more to an individual. As long as the ECB rate stayed within spitting distance of the 3%, ... BIK is 42% (depending on salary), and they could claim TRS relief also which made wit worthwhile not to avail of the perk.

Perhaps we'll see them availing of the perk plus borrowing extra for "home improvements", which will see them nicely positioned to buy up any future bargains on the market. As it was in the beginning...is now...and ever shall be..etc.etc.


----------



## The Pool Boy

I had been considering trading up recently and indeed am looking at a development at the weekend, but probably now just looking to be nosy.

My mortgage is paid but it would take about €250-€300k to buy into this development on top of my own house. I just figured that agreeing to buy a house now at top dollar would be risking my equity as I would be dependent on selling my house at it's "current" value. I'd be rightly screwed if I bought and had to drop the asking price on my house....

I'm sure plenty of others were thinking of trading up and are now holding on.....at least I have room for an extension if needs be. In fact, I've noticed 3 applications for extensions in my estate in the last week.

It'll be interesting to gauge demand on Saturday for what is a lovely development but is aimed at the higher end of the market.


----------



## baby_tooth

property ladder....where do ppl get off on this rubbish....

it appears that ppl fail to realise that this ladder is only a reflection of ppl's willingness to pay.

if ppl don't pay, it drops till it sells on the margin, to extract the extra euro value.


what i can't understand is that ppl seem to be doing all these calcs to establish yields without using any sort of a discount rate on their forcasted gains (capp appreciation) as well as the lending cost interest rates...


"will use the investment as me pension"...now that will be interesting indeed.

ireland is a credit bomb waiting to implode..the wise money is on holding out buying anything in this basket case country where asset priec outstrips its utility, but it seems to be typical irish behaviour is to overpay for a below standard service / product on everything....

law-
health
public transport
private transport
civil service
telecommunications

and by the largest degree---

housing stock.

as a young person, ie: a person who the older generation will stick around to pay their pensions as well as the wages of the doctors that "look" after them and the guards that protect their investment properties in the future.....and yet they also expect me to pay up to and over the odds on top of their future expectations on housing costs.

excuse the rant but the more "educated" and well travelled youth of today won't fall into this for very much longer....

romantic ireland is well and truely gone!!


----------



## whizzbang

baby_tooth said:


> romantic ireland is well and truely gone!!



...It's with OLeary in the grave.


----------



## whizzbang

bearishbull said:


> I known plenty of Jimmy Gardas that bought multiple properties when the mortgage was fully covered by the rent back in late eighties and most of nineties. one garda i know from castleknock (big house there) retired at 55 and has ten properties and lives off his public sector pension. It was all about timing, and now is the worst time to buy for last 30 years.



has he been smart enough to offload a few at the top of the market?


----------



## darex

baby_tooth said:


> what i can't understand is that ppl seem to be doing all these calcs to establish yields without using any sort of a discount rate on their forcasted gains (capp appreciation) as well as the lending cost interest rates...



babytooth - prehaps you could translate what you mean by "discount rate on their forcasted gains"


----------



## baby_tooth

no prob.

ppl about the place are saying if my house increase from x to x+y, then i have made a gain of y. This y has been, including here, discounted back to todays worth by using interest rates.

Interest rates should only be used to calculate the total cost of the mortage, ie: the net cashoutflows.

The future gains from buying now are a function of what else you could have bought, namely the opportunity cost. this is all relative to risk.

Thing is to figure a rate at which to discount back.
I for one, being opptomistic would use a ROI based upon one of the property dependant bodies in Ireland, or the one with the most exposure. Personally, would consider it some where BoI and Anglo, this is to take account for the uncertainity involved.

These co: would give a roughish approx of the returns one would expect from property.

Now, factor in the cost of servicing the debt....

if total cashflows are +ve then its worth investment, else walk away.

I have done this on a few places, and it's not the best of value to be had... yields are relative to all this.

Ya have to take into account the long term forecast of the opportunity cost...


----------



## Duplex

baby_tooth said:


> no prob.
> 
> ppl about the place are saying if my house increase from x to x+y, then i have made a gain of y. This y has been, including here, discounted back to todays worth by using interest rates.
> 
> Interest rates should only be used to calculate the total cost of the mortage, ie: the net cashoutflows.
> 
> The future gains from buying now are a function of what else you could have bought, namely the opportunity cost. this is all relative to risk.
> 
> Thing is to figure a rate at which to discount back.
> I for one, being opptomistic would use a ROI based upon one of the property dependant bodies in Ireland, or the one with the most exposure. Personally, would consider it some where BoI and Anglo, this is to take account for the uncertainity involved.
> 
> These co: would give a roughish approx of the returns one would expect from property.
> 
> Now, factor in the cost of servicing the debt....
> 
> if total cashflows are +ve then its worth investment, else walk away.
> 
> I have done this on a few places, and it's not the best of value to be had... yields are relative to all this.
> 
> Ya have to take into account the long term forecast of the opportunity cost...


 

Constructing an appropriate discount rate is the problem in the Irish market.   I pretty sure however that the appropriate rate is at least twice current net rental yields on residential property.


----------



## baby_tooth

Duplex said:


> Constructing an appropriate discount rate is the problem in the Irish market. I pretty sure however that the appropriate rate is at least twice current net rental yields on residential property.


 

well take boi -- play on irish property mkt - a little safer though as retail banking pulls down its risk weighting

anglo - little riskier - bank rolling large "speculative" devolpments.

if BOI returns 11% pa (as well as far superior liquidity) would expect irish property to at least retun this given stickiness and lack of liquidity...and let us not forget inflation, 11% year on year...growing at the rate of inflation.

If you do the IRR on a house....at this discount rate, wonder what required yeild would come out at

Ya could use perpetutis to price it, one starting now and one starting year after the mortage ends...


----------



## Rico

Do not think there is cause for panic and a crash is certainly not a definite.

a) Vacant housing in Longford or wherever is usually nothing more than a little tax haven which saves a significant investor so much tax on all their rental income they don't care if they are occupied or not. Plenty of affluence to support holiday homes which may be visited once or twice a year. The areas of relevance are urban and busy towns where there is strong demand for rentals and where people want  to live.

b) Interest rates even with a rise of 2% are still historically low, majority of homeowners have equity in houses and with the economy buoyant now and over the past few years a significant number of people do not have huge mortgages. If you can contribute to an ssia you can pay this amount to cover additioal repayment needed with interest rate rise when ssia ends and cut back on a few luxuries if needed.

c) Strong economic conditions despite the negatives we are not totally dependent on construction and it doesnt grind to a halt overnight plent y of structural and commercial activity, with very different demograhics to ten years ago, mobile young population, relatively attractive country to live in, single parents,separations divorces all require homes. Growing population.

d) Property has always had strongest attraction to Irish people and homeownership and improving/trading up activity will continue. 

In conclusion prices need a correction, no doubt and have to when the price of money goes up but do not believe a collapse will happen particularly on sentiment alone.


----------



## Rico

Do not think there is cause for panic and a crash is certainly not a definite.

a) Vacant housing in Longford or wherever is usually nothing more than a little tax haven which saves a significant investor so much tax on all their rental income they don't care if they are occupied or not. Plenty of affluence to support holiday homes which may be visited once or twice a year. The areas of relevance are urban and busy towns where there is strong demand for rentals and where people want to live.

b) Interest rates even with a rise of 2% are still historically low, majority of homeowners have equity in houses and with the economy buoyant now and over the past few years a significant number of people do not have huge mortgages. If you can contribute to an ssia you can pay this amount to cover additioal repayment needed with interest rate rise when ssia ends and cut back on a few luxuries if needed.

c) Strong economic conditions despite the negatives we are not totally dependent on construction and it doesnt grind to a halt overnight plent y of structural and commercial activity, with very different demograhics to ten years ago, mobile young population, relatively attractive country to live in, single parents,separations divorces all require homes. Growing population.

d) Property has always had strongest attraction to Irish people and homeownership and improving/trading up activity will continue. 

In conclusion prices need a correction, no doubt and have to when the price of money goes up but do not believe a collapse will happen particularly on sentiment alone.


----------



## Rico

Do not think there is cause for panic and a crash is certainly not a definite.

a) Vacant housing in Longford or wherever is usually nothing more than a little tax haven which saves a significant investor so much tax on all their rental income they don't care if they are occupied or not. Plenty of affluence to support holiday homes which may be visited once or twice a year. The areas of relevance are urban and busy towns where there is strong demand for rentals and where people want  to live.

b) Interest rates even with a rise of 2% are still historically low, majority of homeowners have equity in houses and with the economy buoyant now and over the past few years a significant number of people do not have huge mortgages. If you can contribute to an ssia you can pay this amount to cover additioal repayment needed with interest rate rise when ssia ends and cut back on a few luxuries if needed.

c) Strong economic conditions despite the negatives we are not totally dependent on construction and it doesnt grind to a halt overnight plent y of structural and commercial activity, with very different demograhics to ten years ago, mobile young population, relatively attractive country to live in, single parents,separations divorces all require homes. Growing population.

d) Property has always had strongest attraction to Irish people and homeownership and improving/trading up activity will continue. 

In conclusion prices need a correction, no doubt and have to when the price of money goes up but do not believe a collapse will happen particularly on sentiment alone.


----------



## whathome

...

Rico's post from July 14th:



Rico said:


> Don't believe a crash is about to happen. In the last ten years house prices have been catching up with incomes. Even an interest rate of 5% is still a relatively low rate. An average mortgage repayment of €1,600 is still comfortably affordable for average earning couple. A majority of people have significant equity in their houses. With a strong economy and culture strong on home ownership, its difficult to see a collapse, there is too much momentum and disposal income. Given recent performance of stock markets there is still a strong sentiment for investing in property. Even if it drops 10% alot of people still will have had serious appreciation. The days for fast capital appreciation seem to be past. Sure alot of things can happen, economy can recess etc the sky can fall in, but it is a just as valid that property prices may just plateau as in the UK over the past few years. The value of property stock is still way above the value of debt.


 
You really like to repeat yourself don't you! We'll be looking forward to hearing from you again in another three months


----------



## blindjustice

hooray - a bullish post! 
or three!
doesnt convince me though
*
I too have literally bet my PPR on a crash
* 



(if it were to level off why would you not sell up and rent for a while - and re-enter the market later - this would suit people who have bought the infamous "starter home/apartment" who plan on "moving up the ladder". why not take the money now - if it crashes you could lose big if you do this you protect yourself - at a small risk , a risk that you  percieve.)


----------



## whathome

blindjustice said:


> hooray - a bullish post!


 
If only it included something new


----------



## Rico

Apologies for the repetition in posts above,accidental error, nothing intended, just giving my views if thats okay with you whathome. I


----------



## Panzraam

I am bearish overall in the medium to long term, but I don’t think anybody should dismiss Rico's comments out of hand. The UK situation is in many (or at least some) ways similar to Ireland and despite BOE base rates of 4.75% there has been no collapse. It may take an external shock to Ireland to finally push the market over the edge, otherwise it may simply continue for a long period with lower or no price increases and lower levels of activity in the market. A major crash can really only happen with a major increase in unemployment and its not easy that easy for me to see that in the short term. 

In the medium term lower levels of construction will lead to a reduction in those employed in that industry but as a lot of those people are immigrants who rent I cant see that effecting demand for housing. Investors have already shown themselves more than willing to put up with 1.5% - 2.0% returns provided they own asset they believe will appreciate in the long run.

IMO we are looking at a long slow deflation of the bubble rather than a pop.  Sorry for those who were looking forward to gloating over their home owning friends/collegues but this isnt going to be so clear cut.


----------



## conor_mc

Rico said:


> a) Vacant housing in Longford or wherever is usually nothing more than a little tax haven which saves a significant investor so much tax on all their rental income they don't care if they are occupied or not. Plenty of affluence to support holiday homes which may be visited once or twice a year.


 
Affluence based on property values.... have a look at the growing private credit figures. We're not as affluent as we like to think.



Rico said:


> b) Interest rates even with a rise of 2% are still historically low, majority of homeowners have equity in houses and with the economy buoyant now and over the past few years a significant number of people do not have huge mortgages.


 
Firstly, equity is irrelevant in the context of enticing FTB's into the market. Secondly, by its definition a speculative property bubble isn't based on homeowners having two shillings to rub together, it's based on exaggerated demand from people looking to make a quick buck. These people buy houses purely in order to sell them later at a higher price. These specuvestors will leave the market if the EA's predictions of 3% per annum price rises are true. Since Sherry Fitz themselves reckon 40% of last years property was bought up by "investors", expect to see a significant drop in demand for houses.



Rico said:


> c) Strong economic conditions despite the negatives we are not totally dependent on construction and it doesnt grind to a halt overnight plent y of structural and commercial activity, with very different demograhics to ten years ago, mobile young population, relatively attractive country to live in, single parents,separations divorces all require homes. Growing population..


 
See SFA comments during the week about the rest of the economy (the useful bit!) being in recession while construction gives us "6% growth" comfort-blanket headlines. Check out the declining balance of trade too, while you're at it.

Oh, and re our young population, have a look at how the birth rate fell from 1980 onwards....



Rico said:


> d) Property has always had strongest attraction to Irish people and homeownership and improving/trading up activity will continue.
> 
> In conclusion prices need a correction, no doubt and have to when the price of money goes up but do not believe a collapse will happen particularly on sentiment alone.


 
This is the bit where I don't have facts or figures to debate, because sentiment is based on that strangest of things called human nature.

However, don't be surprised if the very strong attraction of owning property becomes revulsion in equal measure once the cliches are blown apart. Remember how eircom has pschologically scarred the general populace, frightening them off shares for 7 years now. Pensions crises (here and in the UK) during the 80's and 90's have plenty of people throwing their eggs in the property basket.

We Irish have long memories when we've been wronged by our investments.


----------



## whathome

Rico said:


> Do not think there is cause for panic and a crash is certainly not a definite.
> 
> a) Vacant housing in Longford or wherever is usually nothing more than a little tax haven which saves a significant investor so much tax on all their rental income they don't care if they are occupied or not. Plenty of affluence to support holiday homes which may be visited once or twice a year. The areas of relevance are urban and busy towns where there is strong demand for rentals and where people want to live.


 
Plenty of vacant properties evident in non tax haven and holiday home areas.



Rico said:


> b) Interest rates even with a rise of 2% are still historically low, majority of homeowners have equity in houses and with the economy buoyant now and over the past few years a significant number of people do not have huge mortgages. If you can contribute to an ssia you can pay this amount to cover additioal repayment needed with interest rate rise when ssia ends and cut back on a few luxuries if needed.


 
The problem isn't who's going to have to sell, it's who's going to buy?



Rico said:


> c) Strong economic conditions despite the negatives we are not totally dependent on construction and it doesnt grind to a halt overnight plent y of structural and commercial activity, with very different demograhics to ten years ago, mobile young population, relatively attractive country to live in, single parents,separations divorces all require homes. Growing population.


 
The construction sector accounts for 23% of the country's GDP, compared to an average of about 12% in the EU. That is a dependency.

Falling birth rates in the 80's mean that demographics are going to start working against the housing market.



Rico said:


> d) Property has always had strongest attraction to Irish people and homeownership and improving/trading up activity will continue.


 
Only while prices are rising. Watch that attraction turn to horror and repulsion as the myth disintegrates.


----------



## Neffa

Rico said:


> Do not think there is cause for panic and a crash is certainly not a definite.
> 
> 
> b) Interest rates even with a rise of 2% are still historically low, majority of homeowners have equity in houses and with the economy buoyant now and over the past few years a significant number of people do not have huge mortgages. If you can contribute to an ssia you can pay this amount to cover additioal repayment needed with interest rate rise when ssia ends and cut back on a few luxuries if needed.


 
Well, fair play to you for coming on here - we don't get many bulls. 

I could pick you up on all four points, but it is (b) I disagree with the most. 

Yes, interest rates are low but our mortgage payments to income ratio by year-end 2006 will be at the highest level for 20 years (>40% for many couples according to recent figures). This would be ok if we were at the top of an interest rate cycle but we're in the opposite place .

And, our mortgage debt is the amongst the highest in the world on a per capita basis and is growing twice as fast as our neighbours (who get lots of press for personal debt) in the UK. 

So while it is true that a lot of fortysomething/fiftysomethings have huge equity and are not strapped (and are probably funding their SSIA's), the generation behind is leveraged to their nether regions and are starting to struggle bigtime.


----------



## conor_mc

Panzraam said:


> The UK situation is in many (or at least some) ways similar to Ireland and despite BOE base rates of 4.75% there has been no collapse. It may take an external shock to Ireland to finally push the market over the edge, otherwise it may simply continue for a long period with lower or no price increases and lower levels of activity in the market. A major crash can really only happen with a major increase in unemployment and its not easy that easy for me to see that in the short term.


 
The thing is that the UK actually manufacture stuff that they sell to the rest of the world. They don't emply 15% of their workforce in construction. Construction doesn't account for 20% of GDP in the UK. The UK's credit bubble is about half of what ours is, on a per-person basis.


----------



## Neffa

Panzraam said:


> I am bearish overall in the medium to long term, but I don’t think anybody should dismiss Rico's comments out of hand. The UK situation is in many (or at least some) ways similar to Ireland and despite BOE base rates of 4.75% there has been no collapse. It may take an external shock to Ireland to finally push the market over the edge, otherwise it may simply continue for a long period with lower or no price increases and lower levels of activity in the market. A major crash can really only happen with a major increase in unemployment and its not easy that easy for me to see that in the short term.
> 
> In the medium term lower levels of construction will lead to a reduction in those employed in that industry but as a lot of those people are immigrants who rent I cant see that effecting demand for housing. Investors have already shown themselves more than willing to put up with 1.5% - 2.0% returns provided they own asset they believe will appreciate in the long run.
> 
> IMO we are looking at a long slow deflation of the bubble rather than a pop. Sorry for those who were looking forward to gloating over their home owning friends/collegues but this isnt going to be so clear cut.


 
The reason the UK is not collapsing is because the BoE is going a juggling act trying to control inflation whilst not bringing the UK economy to it's knees. The jury is out on whether or not they've actually controlled inflation - time will tell. 

There is one crucial difference - the UK has control over it's own interest rate - we don't. Trichet is primarily worried about Germany and France. We're a rounding error, let's face it. If we get hung out to dry, they won't care.


----------



## whathome

Panzraam said:


> The UK situation is in many (or at least some) ways similar to Ireland and despite BOE base rates of 4.75% there has been no collapse.


UK situation is completely different. Irish bubble is far more inflated. Also the lowest point for UK interest rates was 3.5% and even then only for 5 months in 2003.  Euro rates were at 2% for two and a half years between July 2003 and Dec 2005 - and interest rate increases are proportionally far larger than the UK.




Panzraam said:


> IMO we are looking at a long slow deflation of the bubble rather than a pop. Sorry for those who were looking forward to gloating over their home owning friends/collegues but this isnt going to be so clear cut.


Agreed, I think will be slow but relentless. Probably take a few years for the crash to play out. Japan took quite a while.


----------



## Duplex

Panzraam said:


> I am bearish overall in the medium to long term, but I don’t think anybody should dismiss Rico's comments out of hand. The UK situation is in many (or at least some) ways similar to Ireland and despite BOE base rates of 4.75% there has been no collapse. It may take an external shock to Ireland to finally push the market over the edge, otherwise it may simply continue for a long period with lower or no price increases and lower levels of activity in the market. A major crash can really only happen with a major increase in unemployment and its not easy that easy for me to see that in the short term.
> 
> In the medium term lower levels of construction will lead to a reduction in those employed in that industry but as a lot of those people are immigrants who rent I cant see that effecting demand for housing. Investors have already shown themselves more than willing to put up with 1.5% - 2.0% returns provided they own asset they believe will appreciate in the long run.
> 
> IMO we are looking at a long slow deflation of the bubble rather than a pop. Sorry for those who were looking forward to gloating over their home owning friends/collegues but this isnt going to be so clear cut.


 
The UK is a debt ridden, deficit junkie economy, please don't compare Ireland to the UK. (Trade has not contributed to economic growth in the UK since 1995). And if a crash happens reserve your bile for the shysters who profited from the shell game not the onlookers please.


----------



## blindjustice

Neffa said:


> Trichet is primarily worried about Germany and France. We're a rounding error, let's face it. If we get hung out to dry, they won't care.



especially since we ignored all the warnings and since we havent pulled out weight in the EU despite the Celtic Tiger we still are not a Net contributer to the EU


----------



## redo

Rico said:


> d) Property has always had strongest attraction to Irish people and homeownership and improving/trading up activity will continue.



The property trade-up market is only as strong as its weakest link, namely FTB.


----------



## kerrybull

I wonder are Rico and Panzraam wolves in estate agents clothing?

Sentiment drove the lemming like rush to the top and sentiment will lead to the lemming like rush to escape.

It will not happen overnight, but happen it will. Confidence is the corner stone of capitalism, take away confidence and we are left with an economey whose foundations are built on sand.

The tide of debt is rising and has been for a long time. We are not as rich as we think we are and a lot of people are going to find out that they are not as smart as they would like to think.


----------



## zac

zac said:


> so far we have discovered 4 real bears, who sold within 1 year period and now renting.
> 
> also 1 or 2 who sold in last couple of years for multiple reasons, including travel, going abroad etc etc and dint buy on their return, so i guess we can call them half real bears.
> 
> any more? there should be lot more here seeing peoples sentiment here in general.



ok here is an update, so far 6 real bears and two half bears... 
and rest are either hiding or have nothing more to show apart from their opinions.
come on out of hundreds postings on this forum only 8 bears?

still waiting on more responses, from investors who are reducing their holdings, or owners moving to rental properties.


----------



## zac

conor_mc said:


> Absolutely not. At least they won't lose their construction-related jobs! It'll be Paddy the Plasterer (not that one!) and Brenda the Bank-Employee who'll be hit worst.



bankers are not gonna hit anytime soon, their stocks still making all time highs. market will turn before them getting hit.


----------



## zac

hmmm said:


> Let's speculate:
> - Flipper/short term speculator: Are in trouble now, trying to get out and may be able to lock in profits if you sell quickly.
> - Investor, rent covers mortgage, good yield (bought in 1998): You may have trouble finding renters, but you should emerge ok
> - Investor, subsidising rent: Screwed when prices start falling. Can't afford to sell and can't afford to subsidise the rent.
> - Home owner, bought in area they like living, 2006, can afford mortgage: You'll survive, but some of your neighbours will be paying half the mortgage you have to pay for the same type of property.
> - Home owner, bought to "get on ladder" - can afford mortgage, don't like area: You're going to be stuck there for 10-15 years.



interesting...

no speculation on people like myself(and probable like yourself) who dont own? i guess we will be picking properties at 50% discount soon, right?
looks like everyone is in trouble except ppl like u and me, smart aint we lol


----------



## liteweight

zac said:


> interesting...
> 
> no speculation on people like myself(and probable like yourself) who dont own? i guess we will be picking properties at 50% discount soon, right?
> looks like everyone is in trouble except ppl like u and me, smart aint we lol



And if interest rates rise to 6% ECB rate...won't you still end up paying almost the same amount over time, except it will be to a lender rather than a vendor.


----------



## daveirl

zac said:


> and rest are either hiding or have nothing more to show apart from their opinions.


I don't have a house and have no intention of buying, does that not make me a bear.


----------



## ncs

daveirl said:


> I don't have a house and have no intention of buying, does that not make me a bear.


 
Well I hope to sell my PPR and rent if it isn't already too late; I'd happily accept a 10% underbid on the asking price of nearby properties too. But it's pragmatic bearish behaviour - we intend to trade up anyway and part of the plan is to rent somewhere we'd ideally like to buy to see how practical this turns out so even if it ends up costing (and the numbers are quite scary if next year sees a 10% rise), it won't entirely be wasted money.


----------



## Firefly

Off topic I know, but we ARE a net contributor to the EU and always have been...just ask our fishermen about our quota of 4% of the EU catch with 25% of the fish at our doorstep....meanwhile the farmers get handouts for keeping land in clover!!!

Firefly.


----------



## FGM Doyle

Three Bulls on newstalk this morning all spoke of Price correction or soft landing, very keen not to mention crash..Bad time for investors never a bad time for buying to live in..Changing of stamp duty was also mentioned, the average punter will hold out signing contracts till after the budget.

I think the Lucans and Clonees of this world are going to be most badly effected.


----------



## plaudit

plaudit said:


> [broken link removed] one goes for auction tomorrow, close to the Bushy park apartment above, lets see how it goes!


 
I see this has been withdrawn from Auction is now on the market.


----------



## beattie

FGM Doyle said:


> Three Bulls on newstalk this morning all spoke of Price correction or soft landing, very keen not to mention crash..Bad time for investors never a bad time for buying to live in..Changing of stamp duty was also mentioned, the average punter will hold out signing contracts till after the budget.
> 
> .


 
Newstalk seems to have a continous run of bulls on recently. The presenter doesn't ever seem to ask hard questions of them, did he this morning?


----------



## teknostic

plenty of properties listed on page 3 of todays Indo selling for above their AMV .


----------



## whathome

From Today's Irish Times:

*Mortgage borrowers hit by further interest rate rise*

[broken link removed]

This rediculous comment from Labour Party's finance spokeswoman - obviously doesn't understand basic economics!



> Labour Party finance spokeswoman Joan Burton criticised yesterday's decision as unnecessary.
> "Given the recent recovery in European markets over the last year, it is difficult to understand why the ECB is continuing with this series of increases," she said.


----------



## FGM Doyle

Teknostic - a genuine Bull talking up a dead market..


----------



## fatmanknows

plaudit said:


> I see this has been withdrawn from Auction is now on the market.


 
€825K !

Is there a big farm attached to the back of it ?


----------



## whathome

teknostic said:


> plenty of properties listed on page 3 of todays Indo selling for above their AMV .


 
Here's the article:

*A black week for auctions *

http://www.unison.ie/irish_independent/stories.php3?ca=303&si=1701408&issue_id=14736

They're talking about how AMV's are set too far below reserve price. This has been an ongoing problem for potential purchasers who waste time attending auctions.  Don't confuse it with strong auction results.  This week was another washout in auction rooms.



> Sadly, those buyers who hope that poor auctions will bring about more realistic AMVs will be disappointed. Even though many properties at the rostrum failed to secure even one single bid, they still are placed back on the market for figures well in excess of the original AMV


----------



## teknostic

FGM Doyle - I didnt make that up - I dont write for the Indo.
just pointing it out. if it had been the other way round, I'm sure a lot of
you would have been quick to pounce.


----------



## whathome

teknostic said:


> just pointing it out.


 
yes - and you misunderstood it


----------



## teknostic

whathome, that isnt the actual article on page 3.


----------



## whathome

teknostic said:


> whathome, that isnt the actual article on page 3.


 
post a link to it then.


----------



## whathome

This must be it:

*Vendors more willing to accept offers*

http://www.unison.ie/irish_independent/stories.php3?ca=9&si=1701578&issue_id=14736



> While a number of sales exceeded AMVs, at least one vendor offered to sell below the minimum asking price.
> Even this failed to shift the house, 92 Woodlawn Park, Churchtown, Dublin 14. Its agent Sherry FitzGerald had quoted an AMV of €1.4m, but is now quoting €1.3m.


 
Points to a weakening market.


----------



## teknostic

not every piece of print that goes into the hard copy edition goes online.
and I'm not typing it up.


----------



## whathome

teknostic said:


> and I'm not typing it up.


 
don't worry, I provided a link to it above.


----------



## whizzbang

zac said:


> ok here is an update, so far 6 real bears and two half bears...
> and rest are either hiding or have nothing more to show apart from their opinions.
> come on out of hundreds postings on this forum only 8 bears?
> 
> still waiting on more responses, from investors who are reducing their holdings, or owners moving to rental properties.



I'd be in here but you said at the start that those who had not owned property could not be considered bears for some reason.

How about not buying because you are a bear rather than selling because you are a bear. I think there are quite a few in the "not buy" category.

/edit, perhaps it wasn't you who said it, but whoever started this "how many real bears?" sub thread did.


----------



## plaudit

zac said:


> ok here is an update, so far 6 real bears and two half bears...
> and rest are either hiding or have nothing more to show apart from their opinions.
> come on out of hundreds postings on this forum only 8 bears?
> 
> still waiting on more responses, from investors who are reducing their holdings, or owners moving to rental properties.


 
What about people like me who would consider a crash benificial before I choose to upgrade? No point in spending €200k now when it only be €150K next year. I am holding in anticipation of prices falling.


----------



## FGM Doyle

Plaudit, like you i am fearful of buying, because i'd hate to think i spent 380,000 on a house now and its sales value in 6 months was 330,000..is this a realistic fear?


----------



## kerrybull

FGM Doyle said:


> Plaudit, like you i am fearful of buying, because i'd hate to think i spent 380,000 on a house now and its sales value in 6 months was 330,000..is this a realistic fear?


 

Of course it is a genuine fear. 12 months ago ftb were afraid if they did not pay €340,000 to get their foot on the ladder they would end up six months down the road having to pay €380,000. Sentiment was that prices would continue to grow, so prices grew. The same will happen now over time as sentimet changes. It will not happen overnight, but the rising tide of debt will change how people look at property.


----------



## Afuera

Firefly said:


> Off topic I know, but we ARE a net contributor to the EU and always have been...just ask our fishermen about our quota of 4% of the EU catch with 25% of the fish at our doorstep....meanwhile the farmers get handouts for keeping land in clover!!!
> 
> Firefly.



Maybe we make contributions in fishing but we've still got a few more years before we're helping out financially (even though we're allegedly the second richest nation in the world  ).

Bertie is pencilling in 2012/2013 before we reach that stage.

http://www.taoiseach.gov.ie/index.asp?locID=181&docID=2841



> In December last year European Council reached agreement on the Financial Perspectives for the EU for the years 2007 - 2013... We anticipate that we will become a net contributor to the EU budget near the end of the seven-year period.


----------



## plaudit

FGM Doyle said:


> Plaudit, like you i am fearful of buying, because i'd hate to think i spent 380,000 on a house now and its sales value in 6 months was 330,000..is this a realistic fear?


 
I posted my numbers some time back but I could stretch €200K to upgrade but would be reluctant to do so as falling prices would mean I would be at a loss at the end of the process.


----------



## Remix

Indo reports on a strategy to reduce interest payments. 

If the value of your house has shot up so that the outstanding loan is now less than 60pc of its value, then you could qualify for a reduction in interest rates.

No mention is made of the flip-side of this argument. What happens if/when house prices fall and your loan-to-value ratio moves into riskier territory ??


----------



## whathome

breaking news...

Newstalk just announced that the latest Daft report shows little or no growth in house prices during the summer months.  

They had a brief interview with Eamonn Fallon from daft.  He said that some people were saying that the slowdown in the summer was seasonal and would pick up in September.  He said that there has been no pick-up and what is actually happening is a "*Fundamental Shift*" and a "*Change in consumer sentiment*" towards the housing market.


----------



## whizzbang

whathome said:


> breaking news...
> 
> Newstalk just announced that the latest Daft report shows little or no growth in house prices during the summer months.
> 
> They had a brief interview with Eamonn Fallon from daft.  He said that some people were saying that the slowdown in the summer was seasonal and would pick up in September.  He said that there has been no pick-up and what is actually happening is a "*Fundamental Shift*" and a "*Change in consumer sentiment*" towards the housing market.



Interestingly at least one of the Fallon brothers doesn't own property! I heard him on tha Dave McWilliams podcast a while back. Interesting for someone in the business.


----------



## phoenix_n

whathome said:


> breaking news...
> 
> Newstalk just announced that the latest Daft report shows little or no growth in house prices during the summer months.
> 
> They had a brief interview with Eamonn Fallon from daft. He said that some people were saying that the slowdown in the summer was seasonal and would pick up in September. He said that there has been no pick-up and what is actually happening is a "*Fundamental Shift*" and a "*Change in consumer sentiment*" towards the housing market.


 
Slowly what some people think(or know) here is coming into the public domain. Each similar news piece confirms to a new bunch and reinforces to others that the market has changed.Repetition breeds retention. It will have a cumulative effect and effectively the autumn selling season is cancelled.

Those needing to buy should hold on for spring sales.


----------



## plaudit

I go for a walk most nights, past a new housing estate, the first phase finished, 12 or so houses, the rest being built. The house closest the road is empty, the lights come on in the same room every night and the central heating kicks in at the same time. You notice the pattern as you observe it every night. I wonder how smug the specuvestor feels, spending money on heat and light, beaming that his house has gone up about 20% in the first year (enough to cover stamp duty and legal fees) so he is now at breakeven point with his investment. But what if house prices don't rise in the next 12 months, he has to pay ongoing heat, light and insurance costs and his capital, if invested in a bank would earn interest and be very liquid.

It defies logic.


----------



## Neffa

whathome said:


> breaking news...
> 
> Newstalk just announced that the latest Daft report shows little or no growth in house prices during the summer months.
> 
> They had a brief interview with Eamonn Fallon from daft. He said that some people were saying that the slowdown in the summer was seasonal and would pick up in September. He said that there has been no pick-up and what is actually happening is a "*Fundamental Shift*" and a "*Change in consumer sentiment*" towards the housing market.


 
Mind you, amazingly, he (and the others) still called a "soft landing". Ger Gilroy did not ask him on how the Daft reported growth of 14% in Q1; 6% in Q2; 0% in Q3 suggested we were heading for a soft landing. Their business correspondent said he would buy anyway.


----------



## whathome

Neffa said:


> Mind you, amazingly, he (and the others) still called a "soft landing". Ger Gilroy did not ask him on how the Daft reported growth of 14% in Q1; 6% in Q2; 0% in Q3 suggested we were heading for a soft landing. Their business correspondent said he would buy anyway.


 
They have a soundbite from this on their hourly news. The edited clip can be heard again on newstalk at 12pm.


----------



## Remix

The Comical Ali Syndrome is thrivin' !

Dublin house prices set to spiral (upwards) 



> The CIF said the decline will make it impossible to deliver enough new houses to meet demand and keep prices from spiralling further.


 
Housing Shortage


----------



## StoppedClock

Neffa said:


> Mind you, amazingly, he (and the others) still called a "soft landing". Ger Gilroy did not ask him on how the Daft reported growth of 14% in Q1; 6% in Q2; 0% in Q3 suggested we were heading for a soft landing. Their business correspondent said he would buy anyway.


 
[broken link removed]

From the newstalk website:

*Ger Gilroy Biography*
Ger Gilroy has been with Newstalk from day one as Sports Editor and presenter of ‘Off the Ball’. A native of Athy, County Kildare, Ger has contributed to The Sunday Business Post, Village magazine and the Guardian. _*He also contributes a monthly column to the Irish Property Buyer magazine*._

So he may have a VI in ramping (although not having ever bought Irish Property Buyer I don't know the tone of his pieces but I'm guessing they are not bearish)


----------



## daveirl

whathome said:


> This rediculous comment from Labour Party's finance spokeswoman - obviously doesn't understand basic economics!


 That's just shocking. I could cry reading that.


----------



## whathome

StoppedClock said:


> So he may have a VI in ramping (although not having ever bought Irish Property Buyer I don't know the tone of his pieces but I'm guessing they are not bearish)


 
Wow - well spotted.  I always thought that he sounded biased.  Sometimes it sounds like a love-in between him and vested interest "economists" being interviewed.  In an interview with Austin Hughes recently, he was coming up with his own reasons as to why the market could not dip.


----------



## whizzbang

Remix said:


> The Comical Ali Syndrome is thrivin' !
> 
> Dublin house prices set to spiral (upwards)
> 
> 
> 
> Housing Shortage


----------



## Remix

Brilliant Whizzbang - very funny!

(p.s can you post a step by step on embedding pictures in posts ? )


----------



## cjh

whizzbang said:


> http://www.iol.ie/~thedeans/comical_aliQ3.jpg


 


Priceless!!!!


----------



## ncs

Remix said:


> The Comical Ali Syndrome is thrivin' !
> 
> Dublin house prices set to spiral (upwards)
> 
> 
> 
> Housing Shortage


 
Worse still: 

While [Wicklow] is one of the few areas to have increased planning permissions in the past year, many of these are for low density developments, including some of just four houses per acre of land. This fails to comply with sustainable development levels which state that an acre of land should provide *hosing* for ten families, the CIF said. 

These places don't even have bathrooms ?


----------



## ivuernis

whathome said:


> From Today's Irish Times:
> 
> This rediculous comment from Labour Party's finance spokeswoman - obviously doesn't understand basic economics!
> 
> Quote:
> Labour Party finance spokeswoman Joan Burton criticised yesterday's decision as unnecessary.
> "Given the recent recovery in European markets over the last year, it is difficult to understand why the ECB is continuing with this series of increases," she said.


 
Dear god almighty! I find it really hard to believe that an elected official in such a position can be so out of step with the workings on the ECB and economics in general.... then again should I really be surprised?


----------



## Bedsit

Remix said:


> (p.s can you post a step by step on embedding pictures in posts ? )



Don't think it is possible to embedd a picture into the post. Looks like the only option is to link it to another server using a URL. Leaves open the possiblity of exposing your true identity


----------



## plaudit

plaudit said:


> Eur, Gbp an Chf falling on good numbers from US.


 
I meant to follow up on this yesterday. This fall happened during the ECB rate hike announcement. An Irish economist was predicting recently that the Euro would strengthen with rising rates and weaken inflationary pressure (and increase house prices). I just found it ironic that the Eur would fall during the rate hike, especially since the economist was writing the article for Lisney estate agents (suprise suprise)


----------



## whizzbang

Remix said:


> Brilliant Whizzbang - very funny!
> 
> (p.s can you post a step by step on embedding pictures in posts ? )



I used a program called paint shop pro, you could do it online using this though 

They will even host the file for you for a few hours, longer than that you might want to use these guys http://imageshack.us/


----------



## edo

> Originally Posted by *zac*
> _ok here is an update, so far 6 real bears and two half bears...
> and rest are either hiding or have nothing more to show apart from their opinions.
> come on out of hundreds postings on this forum only 8 bears?
> 
> still waiting on more responses, from investors who are reducing their holdings, or owners moving to rental properties._


Well Im technically a property owner - have an apartment abroad - but since I returned to Dear Old Ireland at the turn of the millennium I 've chosen to rent - Do I qualify?

Well anybody who has read my posts over the last while both on this thread and the one on Irelands economy would accurately judge me to be a Bear when it comes to the Irish Property market . To qualify that :Im a bear in the long run - I firmly believe and I've yet to see any evidence to the contrary, that the Irish economy has been built on a certain type of quicksand - the sort that looks dry on top, yet when it breaks- you will start sinking slowly by degrees and it will stick like glue. However that said I still think that there is a bit of steam left in this mad stampede yet.

Why?
Its going to make more than a few .25% rises in the interest rate to overcome the manic fixation Irish people have with houses and land.
It is really impossible to underestimate this phenomenon. Most of the posters here see property as just another economic good/product and can view it dispassionately and critically if it isnt delivering the returns they are expecting just like it was shares or any product you could mention. The vast vast majority of the population of this country see things quite differently - and it will take a long long time for people to see property as anything but a sure bet.

Why - to borrow and paraphrase from that Old Duran Duran jingle :
" Destroyed by RTE I hate to bite the hand that feeds me So much information -The pressure’s on the screen to sell you things that you don’t need- It’s too much information for me"

Most folks are completely bewildered by the amount and number of financial products available to put your money into now. The pension debacles and dotcom meltdown have made most allergic to investing in these categories for the moment. Property and in particular housing has an attraction all of its own - because they can touch it and feel it , you dont need an actuary with a PHD from MIT to explain it to you and most importantly ! - you can show it off to your friends, neighbours and rivals as a show of your status, power sexual prowess and virility ya di ya di ya etc etc. never, never, underestimate the power of sex in getting in the way of making rational decisions!

Many people believe they understand property -" its bricks and mortar and I can improve it myself" - it cant vanish away on flickering screen like shares and equity prices and sure people will always need houses etc etc . The number of people who hold this view and have a house or apartment as their "pension" is quite staggering. Economic illiteracy in Ireland is at epidemic levels and peer pressure ," if everybody else is doing it why shouldn't we" is the biggest driver of the property bubble. As PC Fields that famous American of words put it "There is nothing worse than watching your neighbour get rich".

 Dont knock it tho - If everybody really looked at every item they buy as to its economic functionality and were honest as to how it would rationally benefit their lives the entire economy of the western world as we know it would collapse - bad news for everyone who doesnt grow food or make practical clothes for a living.

With the above underpining - throw in more exotic financial products from the Drug dealers ( the banks) and their cheerleaders (the entire Irish economist intelligensia with a few honorable non bought exceptions) , increasingly attractive offers from the developers who will anxious to offload as much inventory as possible in the most profitable way possible , the fact that over 80% (including mine) of the SSIA loot hasnt been released yet and a government desperate for reelection around the same time - their only hope after the shenanigans of the last few weeks is to bribe us big time - This could be the biggest since 1977 - FF couldn't give a monkeys what they do to the economy as along as they get to keep their mercs after next may or june , expect to see lots of money thrown down the bottomless pit of the public service, state bodies etc etc and stamp duty to be twiddled with. 
The Government, Banks and a large percentage of the economy have too much riding on house prices and the housing market to simply let the market decide on its own - once the election is out of the way, higher interest rates , A US recession which is looking like it will be nastier and nastier by the day, will finish off the job 

So to summarise - I see prices slowing , maybe small and I mean small, reduction to prices areas that even the most blinkered bull would have to say were nuts - but as long as interest rates stay under 4% and economy is primed for an early summer election - I really dont see much happening - after that ,say this time next year - all bets are off.

A Few other observations while Im at it.
Im just back from a tour around eastern Europe and Israel as a vanguard unit of the next phase of the Irish Manufacturing industry - exporting jobs - outsourcing - from what I can see there wont be many companies who manufacture and source manufactured goods from Irish suppliers left in 10 years time - it will be drip,drip drip - I have been appointed to turn off the light and put myself on the last boat out!

With my foreign collegues laughter ringing in my ears over Ireland property extravangsa - they all think we have gone stark raving bonkers -and Israelis are pretty good at the ole investment game - Went to ploughing festival in Tullow when I was down home at the weekend - the biggest tent - The one for all the folks selling foreign property to the asset rich welfare depending agricultural core - absolutely unf*****gbelievable - it was packed and they seemed to be doing a roaring trade - lets hope the farmers are better at picking good properties than they were at picking food products to produce and try and sell at a profit!!! - yeah I'd be real confident about that! - hope the EAs explained to them if the investment goes tits up that they can't sell the apartment into intervention!!!!

Later Folks

EDO


----------



## room305

edo said:


> With my foreign collegues laughter ringing in my years over Ireland property extravangsa - they all think we have gone stark raving bonkers -and Israelis are pretty good at the ole investment game - Went to ploughing festival in Tullow when I was down home at the weekend - the biggest tent - The one for all the folks selling foreign property to the asset rich welfare depending agricultural core - absolutely unf*****gbelievable - it was packed and they seemed to be doing a roaring trade - lets hope the farmers are better at picking good properties than they were at picking food products to produce and try and sell at a profit!!! - yeah I'd be real confident about that! - hope the EAs explained to them if the investment goes tits up that they can't sell the apartment into intervention!!!!



Quality post as always Edo. Yeah, I've often mentioned that we could learn alot from looking at the Israeli economy but given the heavy anti-US sentiment that abounds it tends to wonder into political debate territory so I've stopped mentioning it.

Couldn't believe that foreign property tent. Plenty of people wandered in thinking it was the HQ! By all accounts there were 11 luxury penthouses in Dubai sold so those farmers are probably as adept at property purchases as they are at free market economics.


----------



## bearishbull

StoppedClock said:


> [broken link removed]
> 
> From the newstalk website:
> 
> *Ger Gilroy Biography*
> Ger Gilroy has been with Newstalk from day one as Sports Editor and presenter of ‘Off the Ball’. A native of Athy, County Kildare, Ger has contributed to The Sunday Business Post, Village magazine and the Guardian. _*He also contributes a monthly column to the Irish Property Buyer magazine*._
> 
> So he may have a VI in ramping (although not having ever bought Irish Property Buyer I don't know the tone of his pieces but I'm guessing they are not bearish)


Yeah i noticed his attitude to property over last few weeks and was aware of his writtings in Irish Property Buyer but have'nt read any of his articles. I emailed him last week to criticise the show for having so many bulls when there was evidence prices were falling in likes of lucan, he didnt reply or change anything in the show, but what would you expect from a commercial radio station who get loads of advertising  from estate agents and foreign property companies. In fairness though i have heard some bearish sentiment on newstalk but its outweighed by  vast amount of bullish ones and even the breakfast show(or a segment of it) is sponsored by a property company selling and renting stuff in florida( where the bubble burst is already well under way!). Earlier in the week he was discussing property with someone on the show and at end of article he made a remark along lines of "so, everything in the proeprty market will be fine going forward" with a tone of it being gospel or at least trying to make the listeners beleive this was a certainty, in facts he sounded like a recent purchaser trying to pursuade himself and everyone else that he did the right thing!


----------



## treora

I walk through this place on the way to work every day. One 'for sale' sign went up every 5 days for the last month. This is a nice microcosm of specuvestor, young debt ridden Irish. Built about 6 years ago with 55 terrace/semi-d's, 50% clearly rented (mostly 'new Irish'), 25+% pram pushers [appear to be owner occupiers]. At least *10% *clearly* vacant* and *13% *of the houses are* up for sale* (only 6 of the 7 are listed on myhome). 

Map this property: [broken link removed]=


----------



## soma

room305 said:
			
		

> Quality post as always Edo.



I agree with Edo's economic arguments, but to be honest I think parts of his post smacked slightly of "it's different here". Edo you must remember that this "we have a special bond/need for property" is sold just as much to the americans, as to the Irish.



			
				room305 said:
			
		

> Yeah, I've often mentioned that we could learn alot from looking at the Israeli economy



While it is true that they do really well at innovation and have many internationally listed companies, you cannot compare like with like here because Israel is what I would term a "freak economy". Take away the *$6 billion a year* that they reieve in 'aid' from the US, and then you have a more level playing field where you can compare like with like.


----------



## Sidewinder

whathome said:


> Labour Party finance spokeswoman Joan Burton criticised yesterday's decision as unnecessary.
> "Given the recent recovery in European markets over the last year, it is difficult to understand why the ECB is continuing with this series of increases," she said.





Dear God. That's just scary. A woman with pretensions of being Finance Minister who clearly has _absolutely no clue _how the economic cycle works. Or indeed the first notion about inflation, interest rates, growth, relationship between.

Then again, I doubt very many of the 166 in the Dáil would say anything different to Ms Burton, they all seem spectacularly clueless on economic matters.

I personally dislike Pat Rabbitte, so wasn't going to be voting Labour anyway, but after that comment they've no chance of even a low preference.


----------



## murray

blindjustice said:


> hooray - a bullish post!
> or three!
> doesnt convince me though
> 
> *I too have literally bet my PPR on a crash*
> 
> 
> well done 'blindjustice' welcome to the club ! -


----------



## Remix

It's possible to comment here:

Maybe she'll clarify her position - who knows ?

[broken link removed]


----------



## miju

SPC100 said:


> * I am very scared about future Irish prosperity, thinking about changing job at the moment, and am lookin strongly at the public service.


 
i agree, so much so that i've actually applied for the civil service and i'll be taking a 3k per annum pay cut to do so

so while i don't own a property that's effectively this bear putting his money where his mouth his


----------



## murray

"I think the Lucans and Clonees of this world are going to be most badly effected." FGM Doyle..

Why there more so ??????????


----------



## Maine

whathome said:


> From Today's Irish Times:
> 
> *Mortgage borrowers hit by further interest rate rise*
> 
> [broken link removed]
> 
> This rediculous comment from Labour Party's finance spokeswoman - obviously doesn't understand basic economics!


 
Had the same thought. How stupid is this comment, we have as much to fear from a change in govt and we do from current bunch.

Also Jim O Leary had an interesting article in IT where he says alot of optimistic forecasts ( Davys etc) for 2007 but also majority of forecasts for 2008 are of a big slowdown. He thinks with 2008 slowdown looming many companies will slow down investment rate in 2007 hence impacting that years outcome negatively.


----------



## phoenix_n

Heard Nick Gleeson is doing a piece in the sbpost this sunday on the Irish property market. May make for an interesting piece.


----------



## Gwynston

zac said:


> ok here is an update, so far 6 real bears and two half bears...
> and rest are either hiding or have nothing more to show apart from their opinions.
> come on out of hundreds postings on this forum only 8 bears?
> 
> still waiting on more responses, from investors who are reducing their holdings, or owners moving to rental properties.


Do I count as a bear for convincing my wife NOT to buy an investment property?
We already have a family home, but when our SSIAs matured this summer, she wanted to jump in and buy a 3-bed semi in a new development with our SSIA money plus a 92% mortgage. Of course, everyone she knows is doing it, including immediate family - it's a "sure thing"! That was about when this thread started and after dicussions with a mate in England who hangs out at HPC.co.uk, I started feeling rather uncomfortable about the whole idea.

I grew up in England, and moved to Ireland with my Galway girl in 2000, and we bought a large 4-bed house on half-an-acre in the country 4.5 years ago. I worked out that with our SSIAs plus other savings, we could pay off what's left of our mortgage. So, after doing some research (well, reading this thread...) I tried to convince my wife the market was near the top and it was the wrong time to buy.

Well you can imagine the incredulity and ignorance and sheer blinkeredness I faced from her and all the in-laws! As an "outsider" I simply couldn't know "how things work in Ireland". I certainly didn't know how crazy the property boom has made everyone! 

Anyway, I finally brought my wife round to my way of thinking (thank you all), and can sleep contented at night with my young family knowing that we have a fully paid up house and regular savings going into something rather more safe than Irish property.

Does that make me a bear for bucking the trend?
Wonder if I could convince the wife to sell up now, make a handsome profit and go rent cheaply....


----------



## plaudit

Gwynston said:


> I worked out that with our SSIAs plus other savings, we could pay off what's left of our mortgage. So, after doing some research (well, reading this thread...) I tried to convince my wife the market was near the top and it was the wrong time to buy.


 
If you invest your SSIA in a pension, tax relief alone will give a much better return that buying an investment property at the moment IMO.


----------



## edo

> I agree with Edo's economic arguments, but to be honest I think parts of his post smacked slightly of "it's different here". Edo you must remember that this "we have a special bond/need for property" is sold just as much to the americans, as to the Irish.



Well Soma - I've been looking at the property bubble here for a long time now and find it very hard to come up with rational sound economic reasons for the sheer scale of it and the fact that it has shot up to stratosphere at precisely the time that the originators of the Celtic tiger - the export economy has slowed. when you look at relative poverty of what we export - a tiny amount of it is unique to Ireland , most of it is foreign owned and with increasing globalisation it is relatively easy to up sticks and get the manuals printed in the language of your chosen low-cost labour destination and move. - in fact I just concluded several of those deals in the Czech republic and Slovenia last week - thats X millions that would previously have gone into Ireland over a 5 year period will now go elsewhere. I take your point about the US" having your own property written into the constitution - ok being a tad sarcastic there" vis a vis Ireland - we are not alone - but, but, there really is an fixation ,unparalleled in the rest of Europe with us and property - I have travelled and lived abroad quite extensively and so I feel I can compare .

 the point I was trying to make is that people are quite prepared to go without a hell of a lot before they will give up that dream - the friday afterwork few beers office gang has dwindled recently - Half of them have recently purchased their little piece of Ireland in Suburbia - which now extends to the aran islands as far as I can make out - I know that they are all up to their proverbials in debt and that drinkies with the boys and girls , who rent and live in town ,like me . are out - small sacrifice to make to able to sneer at the "hippies" like myself who are still only renting - as I was trying to explain you can not underestimate the degree of social snobbery, social climbing and being able to be part of the "upscale herd" that is driving the property bubble. 

This mentality which has always been here , only difference is more money (or accurately easy credit) has allowed more people to indulge in the fantasy - we just didn't have the cash before. This mentality ,combined with the incremental rate rises will not disturb the market massively in the short term - for every one person who calls it a day and pulls out - there are 2 more looking for the opportunity to get in - the current lull , I think , is due to a lot of people catching their breath and seeing what the Gov will do in the budget (Bertie is pretty good with Gifts and the like so they wont be dissappointed) and then it will continue until after the next election , which is when I feel a perfect storm will be starting to appear - US recession, higher Euro rates, massive supply in housing , no more ssia money - jobs losses due to eroding competitiveness, farm incomes will be radically reduced. - once it turns it could be a slow downward slide with quite a few dead cat bounces on the way down - the property fixation means that folks will give up their first born rather than the keys to that semi 3 D - while Americans have the same property fixation - they also have the ability and the history to call time, hand in the keys load up the U Renter and drive to another part of that vast country to start again - That will be a new experience for many here and will accepted extremely reluctantly.



> While it is true that they do really well at innovation and have many internationally listed companies, you cannot compare like with like here because Israel is what I would term a "freak economy". Take away the *$6 billion a year* that they reieve in 'aid' from the US, and then you have a more level playing field where you can compare like with like


.

I think *Room305* was refering to the R/D and tech elements of the Israeli economy - something which is non existent on the same scale here. Im not going to get into to politics of the area - Im probably closer to your side Soma than you think - but most of the 6 billion is spent on defense for obvious reasons


----------



## FGM Doyle

Interesting post Gwynston, It reflects alot what I feel about the property boom, I followed this thread since its inception, I have found it has shaped my view on the sheer fragility of the property game, and its kind of exciting watching the sentiments of this thread spread on to the media and indeed the market place, during July and August I felt somehow like a insider in the know while the huddled mass saw no end to the boom.. Its almost popular opinion now that the end is close, even if those in the media with hidden agendas remain bullish, The cat is out we know.. 
and i think its only a matter of time before the in-laws agree with you Gwynston.


----------



## Miles

In fairness everything she states on her website is not far from the truth. There are a lot of familys stretched to their limits by recent increases.

Not everyone are property speculators. Lets not forget the human aspect in these discussions and I think this is whats shes driving at.


----------



## bearishbull

The number of homes in my area (glasnevin) for sale on myhome has increased from 40 in july to 50 in early september to 82 now in early october, it has increased by around 50% in 3 weeks. Myhome is'nt growing as rapidly as daft so the increase is more likely a result of increased inventory than increased popularity of myhome. I don't know what equivalent number for sale was last year but i don't recall it being so high.


----------



## Maine

Miles said:


> In fairness everything she states on her website is not far from the truth. There are a lot of familys stretched to their limits by recent increases.
> 
> Not everyone are property speculators. Lets not forget the human aspect in these discussions and I think this is whats shes driving at.


 
It will benefit ireland Inc now if interest rates go to 3.75 or 4% otherwise the debt mountain will go up. bubbles are best burst at any time. To allow them to get bigger is no good for all but a very small minority.  Joan should know this


----------



## Sidewinder

Miles said:


> In fairness everything she states on her website is not far from the truth. There are a lot of familys stretched to their limits by recent increases.
> 
> Not everyone are property speculators. Lets not forget the human aspect in these discussions and I think this is whats shes driving at.



Oh, highlighting the human aspect and lambasting this government for condemning a whole generation to a lifetime of grinding debt-ridden negative-equity suburban wage-slave hell: that I've no problem with at all, and it's long past time somebody started shouting from the rooftops to try and snap the country out of this mass hypnotism.

The comment about the ECB rates was quite staggeringly ill-informed  and economically illiterate though, _from someone who wants to be Finance Minister_. That's the scary bit!


----------



## liteweight

FGM Doyle said:


> Interesting post Gwynston, It reflects alot what I feel about the property boom, I followed this thread since its inception, I have found it has shaped my view on the sheer fragility of the property game, and its kind of exciting watching the sentiments of this thread spread on to the media and indeed the market place, during July and August I felt somehow like a insider in the know while the huddled mass saw no end to the boom.. Its almost popular opinion now that the end is close, even if those in the media with hidden agendas remain bullish, The cat is out we know..
> and i think its only a matter of time before the in-laws agree with you Gwynston.



You should be more careful about how your views are shaped. Do your own research is the best method IMO. Last time I checked about 50% of all posts on this thread were by the same 12 people.....all with the same view. How large is the population now??


----------



## redo

[broken link removed]


----------



## phoenix_n

edo said:


> - Half of them have recently purchased their little piece of Ireland in Suburbia - which now extends to the aran islands as far as I can make out - I know that they are all up to their proverbials in debt and that drinkies with the boys and girls , who rent and live in town ,like me . are out - small sacrifice to make to able to sneer at the "hippies" like myself who are still only renting - as I was trying to explain you can not underestimate the degree of social snobbery, social climbing and being able to be part of the "upscale herd" that is driving the property bubble.


 
Good post. I'd like to comment on the above. I was talking only this week to a friend about how the housing market has 'killed' the social scene in Ireland. So many of my friends and siblings 'retire' to the west of Dublin after work and it is rarely that they spend anytime anymore in the city during the week. It was even more apparent after the Cohen show at the point that my mates had to find taxis to bring them to the outreaches of Dublin whereas a couple of us could walk home. Whereas a few of us can catch the latest indie movie at the ifc after work for most a trip to the cinema requires planning not too dissimilar to a mini work project.

That's why with the bubble bursting it will cause pain but with it a new way of living  will be born. (My Fridays poetic ending)


----------



## FGM Doyle

Liteweight you misunderstood my e-mail, I alluded to cold hard facts in the media and marketplace being spotted in this thread weeks before the general public read about or saw it for themselves in the market.. Is the stagnant market enough for you.. Sometimes i Wonder


----------



## daveirl

edo said:


> I think *Room305* was refering to the R/D and tech elements of the Israeli economy - something which is non existent on the same scale here. Im not going to get into to politics of the area - Im probably closer to your side Soma than you think - but most of the 6 billion is spent on defense for obvious reasons


I have to agree, I work in Electronics in Ireland and we have more and more Israeli customers all the time, they were at the same point as us in the mid 1990s but now seem to be lightyears ahead with people I know describing it as being like Silicon Valley in the 80s/90s. So while they are building companies that have IPOs etc, we are doing nothing in that sphere.


----------



## sandymount

redo said:


> [broken link removed]



Interesting to see how prices have risen most in high value southside locations. The fact that most auctions have been a washout in September would leave me to question this data.

Also house prices in West Dublin are now in decline in real terms when inflation is taken into account.


----------



## liteweight

FGM Doyle said:


> Liteweight you misunderstood my e-mail, I alluded to cold hard facts in the media and marketplace being spotted in this thread weeks before the general public read about or saw it for themselves in the market.. Is the stagnant market enough for you.. Sometimes i Wonder



Let's not tax our brains with all that wondering eh?? The market is not stagnant....whether a yet should be tagged onto that statement remains to be seen! There is certainly evidence (anecdotal and otherwise) that places like Lucan etc. are just not shifting. Auction results showed at least one house which went for 1m over it's guide. Others sold after auction for higher sums. Granted, the results overall were disappointing but the vendors still put up prices after auction. A real test would be to see these houses languishing on the market until next year?

And don't me!!


----------



## FGM Doyle

Liteweight you have a very smug attitude are you an Estate Agent or a Pyramid scheme rookie


----------



## bearishbull

sandymount said:


> Interesting to see how prices have risen most in high value southside locations. The fact that most auctions have been a washout in September would leave me to question this data.
> 
> Also house prices in West Dublin are now in decline in real terms when inflation is taken into account.


Prices can still rise in a slowing market, if a lower volume of houses(usually the better houses sell in a slowing market) are traded at slightly higher prices then average prices rise. These statistics from estate agents and esri don't always tell the full story. At auction 80%approx are'nt selling and loads of houses that did'nt sell at auction in my area  are languising on sale by private treaty since early summer. At auction once you have two people with loads of money who both want a trophy home (at any price) prices will be high despite wider market conditions. Auction market is in terrible state despite a couple of big results.


----------



## robd

Remix said:


> It's possible to comment here:
> 
> Maybe she'll clarify her position - who knows ?
> 
> [broken link removed]



I mailed her on this earlier this morning. I have to say I got a prompt, corteous and detailed response clarifying her position. The quote in the IT was shortened. The full quote form the statement is below, which puts it a bit more in context. It makes more sense and she doesn't look so dumb. Seems the times took the bit they wanted.



> Given the recent recovery in European markets over the last year, it is difficult to understand why the ECB is continuing with this series of increases. Would it not have been better to allow this growth to sustain
> itself  rather  than  inflict further interest rate rises throughout the Eurozone thus threatening heretofore fragile economies?



Also here's a quote from her email which puts her true opinions down.


> The fundamental problem there is of course the size of the mortgages that
> some people have been granted at a time of historically low interest rates,
> and the various causes of the runaway  increses in the housing market over
> the last decade, an issue that my colleague Eamon GilmoreTD, who is the
> Labour Spokesperson on the Environment and Local Government comments on
> regularly.



Personally, I think the ECB was well warrented to raise interest rates but that's another point.

BTW, I'm not a Labour fan, I'm an anything but FF.


----------



## bearishbull

robd said:


> I mailed her on this earlier this morning. I have to say I got a prompt, corteous and detailed response clarifying her position. The quote in the IT was shortened. The full quote form the statement is below, which puts it a bit more in context. It makes more sense and she doesn't look so dumb. Seems the times took the bit they wanted.
> 
> 
> 
> Personally, I think the ECB was well warrented to raise interest rates but that's another point.


Thats not much better. The ECB's number one priority is to control inflation, growth is very much secondary.


----------



## colc1

liteweight said:


> There is certainly evidence (anecdotal and otherwise) that places like Lucan etc. are just not shifting.


 
If places like Lucan arent shifting what hope commuter towns which are further out in Meath, etc?  There definitely look dodgy times ahead for the property market!


----------



## phoenix_n

liteweight said:


> A real test would be to see these houses languishing on the market until next year?


 
So that we could discuss abandoning the ship after its sank !


----------



## Gwynston

liteweight said:


> You should be more careful about how your views are shaped. Do your own research is the best method IMO. Last time I checked about 50% of all posts on this thread were by the same 12 people.....all with the same view. How large is the population now??


I don't just take all comments in this "Bear Cave" of a thread as gospel. Obviously there is a majority of ursine-bias which sometimes has to be taken with a pinch of salt. However, that is nothing compared with the truck load of salt you need when talking to the average Joe Soap "Property Magnate" on any street in this country...

What makes this thread essential reading is that it is a great reference to most of the pertinent content on the subject taht's published elsewhere. That is the research I took on board, moreso than just the opinion, (although much of that is well founded and very well reasoned by people with a much better understanding of economics than I).

If not for that, my knowledge of the Irish property boom would be almost completely indoctrinated by my blinkered in-laws and I'd now just be another of the lemmings with a 2nd mortgage subsiding my tenants....


----------



## liteweight

phoenix_n said:


> So that we could discuss abandoning the ship after its sank !



Good point Phoenix. Perhaps I should have said 'houses which did not sell in Spring....Autumn....and still languishing. If everyone tries to get off the ship at once, there won't be enough lifeboats and only the strong will survive. The strong aren't necessarily the ones (investors) who rush to jump ship first without analysing all of their options.  Panic selling is just as detrimental to the economy as panic buying has been in the past IMO,


----------



## soma

edo said:


> I think *Room305* was refering to the R/D and tech elements of the Israeli economy



If you look at my post, you will see that I also note that.



edo said:


> but most of the 6 billion is spent on defense for obvious reasons



We're getting OT here, but that is far too simplistic to attempt to write-off a cash injection that large, as being swallowed by a single industry. 

(a) Money pumped into defence obviously finds it's way into other areas of the economy e.g. direct & indirect supporting industries, incomes, the tax take etc.

(b) Because that $6 billion magically appears, Israel does not have to "find" that money from elsewhere in it's budget. Obviously making it easier to divert funds into something like R&D.

Don't get me wrong, I'm always yelling from the rooftops about our paper-tiger economy with no R&D (I was so embarassed by bertie announcing R&D investment a few weeks back as hoping to encourage more foreign companies to come here, instead of seeing it as a strategy to kick start indigenous industry) - bit I think it's unfair to be compared to a state which is essentially bank-rolled and has disproportionate influence - it's simply not a level playing field.


----------



## ivuernis

phoenix_n said:


> I was talking only this week to a friend about how the housing market has 'killed' the social scene in Ireland. So many of my friends and siblings 'retire' to the west of Dublin after work and it is rarely that they spend anytime anymore in the city during the week. It was even more apparent after the Cohen show at the point that my mates had to find taxis to bring them to the outreaches of Dublin whereas a couple of us could walk home. Whereas a few of us can catch the latest indie movie at the ifc after work for most a trip to the cinema requires planning not too dissimilar to a mini work project.


 
I agree. I live in Cork and the experience is much the same, even though Cork is a much smaller city and a taxi to most outlying suburbs is max €15 and €20 to most satellite towns the dispersion due to house buying has resulted in my group of friends meeting up at best once a week (almost always at weekends). No more the mid-week pint or movie, neither the stroll back to someone's house at the w/e after a night out. Now it's all a panic to beat the rush to get a taxi to the suburbs. We are destroying the social fabric of our cities with the lack of considered developments in the centre of cities and the sprawl of the suburbs.


----------



## phoenix_n

bearishbull said:


> The number of homes in my area (glasnevin) for sale on myhome has increased from 40 in july to 50 in early september to 82 now in early october, it has increased by around 50% in 3 weeks. Myhome is'nt growing as rapidly as daft so the increase is more likely a result of increased inventory than increased popularity of myhome. I don't know what equivalent number for sale was last year but i don't recall it being so high.


 
6 of those 82 are apts in premier square which is going to take a hammering in the next few months. Like watching a ship sink.



liteweight said:


> Good point Phoenix. Perhaps I should have said 'houses which did not sell in Spring....Autumn....and still languishing. If everyone tries to get off the ship at once, there won't be enough lifeboats and only the strong will survive. The strong aren't necessarily the ones (investors) who rush to jump ship first without analysing all of their options. Panic selling is just as detrimental to the economy as panic buying has been in the past IMO,


 
Cheers for seeing the funny side of my post.


----------



## SteelBlue05

ivuernis said:


> I agree. I live in Cork and the experience is much the same, even though Cork is a much smaller city and a taxi to most outlying suburbs is max €15 and €20 to most satellite towns the dispersion due to house buying has resulted in my group of friends meeting up at best once a week (almost always at weekends). No more the mid-week pint or movie, neither the stroll back to someone's house at the w/e after a night out. Now it's all a panic to beat the rush to get a taxi to the suburbs. We are destroying the social fabric of our cities with the lack of considered developments in the centre of cities and the sprawl of the suburbs.


 
In Dublin anyways the problem is the concentration of business\industry into the centre. This should have been moved to other regions of Ireland over a period of time.


----------



## Bedsit

[broken link removed]

"... The review - which is commissioned by the Department of the Environment, Heritage and Local Government - estimates the value of construction output in 2005 was €31.5 billion representing 23 per cent of total GNP.

Direct employment in the sector has now reached an unprecedented high of 264,300 workers.

... Minister for Environment Dick Roche said the current high levels of employment and activity in the sector would continue.

"House-building will continue to perform strongly for the foreseeable future underpinned by a strong economy, changing demographics and strong net inward migration." ..."


----------



## soma

Bedsit said:


> ... Minister for Environment Dick Roche said the current high levels of employment and activity in the sector would continue.
> 
> "House-building will continue to perform strongly for the foreseeable future underpinned by a strong economy, changing demographics and strong net inward migration." ..."



I wonder does Minister Roche have any relatives in Iraq... who used to work for the goverment..


----------



## StoppedClock

Bedsit said:


> [broken link removed]
> 
> "... The review - which is commissioned by the Department of the Environment, Heritage and Local Government - estimates the value of construction output in 2005 was €31.5 billion representing 23 per cent of total GNP.
> 
> Direct employment in the sector has now reached an unprecedented high of 264,300 workers.
> 
> ... Minister for Environment Dick Roche said the current high levels of employment and activity in the sector would continue.
> 
> "House-building will continue to perform strongly for the foreseeable future underpinned by a strong economy, changing demographics and strong net inward migration." ..."


 
House-building will continue to perform strongly for the foreseeable future underpinned by a strong economy and that the economy will continue to perform strongly for the foreseeable future underpinned by strong House-building. 
He also added that House-building will grow for the foreseeable future as a result of the strong economy which will become boomier because of strong growth in House-building. 

He concluded that ...


----------



## Remix

robd said:


> I mailed her on this earlier this morning. I have to say I got a prompt, corteous and detailed response clarifying her position. The quote in the IT was shortened. The full quote form the statement is below, which puts it a bit more in context. It makes more sense and she doesn't look so dumb. Seems the times took the bit they wanted.
> 
> 
> 
> Also here's a quote from her email which puts her true opinions down.
> 
> 
> Personally, I think the ECB was well warrented to raise interest rates but that's another point.
> 
> BTW, I'm not a Labour fan, I'm an anything but FF.


 
Good one Robd. After that Irish Times quote making her look so stupid, I thought she might at least deserve a second chance from the AAM commentators. She has been critical of the housing market and lenders in the past and as we know these two are important to the Irish Times business. 

(p.s. I'm not a Labour fan either)


----------



## conor_mc

StoppedClock said:


> House-building will continue to perform strongly for the foreseeable future underpinned by a strong economy and that the economy will continue to perform strongly for the foreseeable future underpinned by strong House-building.
> He also added that House-building will grow for the foreseeable future as a result of the strong economy which will become boomier because of strong growth in House-building.
> 
> He concluded that ...


 
LMAO!!!!  

Almost worthy of the great Rumsfeld himself!!!


----------



## darex

liteweight said:


> You should be more careful about how your views are shaped. Do your own research is the best method IMO. Last time I checked about 50% of all posts on this thread were by the same 12 people.....all with the same view. How large is the population now??



Liteweight the value in the argument is what counts not the number of people making it. If one lemming says there is a cliff ahead and stops while all the others tumble over - who do you listen to?


----------



## SHARP

ivuernis said:


> I agree. I live in Cork and the experience is much the same, even though Cork is a much smaller city and a taxi to most outlying suburbs is max €15 and €20 to most satellite towns the dispersion due to house buying has resulted in my group of friends meeting up at best once a week (almost always at weekends). No more the mid-week pint or movie, neither the stroll back to someone's house at the w/e after a night out. Now it's all a panic to beat the rush to get a taxi to the suburbs. We are destroying the social fabric of our cities with the lack of considered developments in the centre of cities and the sprawl of the suburbs.


 
Originally Posted by *phoenix_n* http://www.askaboutmoney.com/showthread.php?p=291411#post291411 
_I was talking only this week to a friend about how the housing market has 'killed' the social scene in Ireland. So many of my friends and siblings 'retire' to the west of Dublin after work and it is rarely that they spend anytime anymore in the city during the week. It was even more apparent after the Cohen show at the point that my mates had to find taxis to bring them to the outreaches of Dublin whereas a couple of us could walk home. Whereas a few of us can catch the latest indie movie at the ifc after work for most a trip to the cinema requires planning not too dissimilar to a mini work project._

_I understand where you are coming from, but you also should take into account when people buy new homes, they are settling down and the "pints after work" culture ceases to exist. _

_There is also the fact of no drink driving that comes into the equation. A person who is single and in their early twenties will always have time to go for a drink after work, and socialise more than a person in their early 30's who have bought a house, are married/attached._


----------



## SHARP

StoppedClock said:


> House-building will continue to perform strongly for the foreseeable future underpinned by a strong economy and that the economy will continue to perform strongly for the foreseeable future underpinned by strong House-building.
> He also added that House-building will grow for the foreseeable future as a result of the strong economy which will become boomier because of strong growth in House-building.
> 
> He concluded that ...


 
This quote should be saved and used an an election poster by the opposition at the next election. The man clearly doesn't have a clue.

Another sad reflection of this government.


----------



## phoenix_n

SHARP said:


> _I understand where you are coming from, but you also should take into account when people buy new homes, they are settling down and the "pints after work" culture ceases to exist. _
> 
> _There is also the fact of no drink driving that comes into the equation. A person who is single and in their early twenties will always have time to go for a drink after work, and socialise more than a person in their early 30's who have bought a house, are married/attached._


 
Well I would disagree but I have a strong opinion on the DVD/pizza/comfort shopping lifestyle that we have created in Dublin. I am also attached but choose to still socialize in the city rather than become a regular at xtra vision. You have to see the scene in Stockholm during the week so see what point I am trying to make. Its goes beyond 'going for a pint' after work. But this goes beyond this thread.

(although for a different perspective on life check out the book 'how to be free' .Forget author but also wrote 'how to be idle' )


----------



## liteweight

darex said:


> Liteweight the value in the argument is what counts not the number of people making it. If one lemming says there is a cliff ahead and stops while all the others tumble over - who do you listen to?



How long did it take you to think that up??? I couldn't hear anything.....it's the sound of all those running feet....drown the sensible one out!


----------



## fatmanknows

Here's one at the top end which failed in the Auction Room. 
Now for rent (€10k pm) or for still for sale (€6.6m).

€10K per month ! Might suit 27 promiscuous students willing to share - (5 in a bed !)

A full house and your still only yielding 1.5%.

Something's gonna give.....

http://www.daft.ie/searchrental.daft?search=1&s[cc_id]=ct1&s[a_id]=pc6&s[mnp]=&s[mxp]=&s[bd_no]=5&s[search_type]=rental&s[refreshmap]=1&limit=10&search_type=rental&id=425099

[broken link removed]

ps:  27 Palmerston Road - Link appears not be working


----------



## Goldfinger

Please use: http://tinyurl.com/ when pasting big URLs

So, http://www.daft.ie/searchrental.daft?search=1&s[cc_id]=ct1&s[a_id]=pc6&s[mnp]=&s[mxp]=&s[bd_no]=5&s[search_type]=rental&s[refreshmap]=1&limit=10&search_type=rental&id=425099

turns into

http://tinyurl.com/ftw7c

Good work fatmanknows, I really like the links to the falling prices


----------



## redo

Laraghcon Lucan
Old price 790k  (Previously reduced from 800k)


New price  770k

[broken link removed]


----------



## StoppedClock

redo said:


> Laraghcon Lucan
> Old price 790k (Previously reduced from 800k)
> 
> 
> New price 770k
> 
> [broken link removed]


 

Is there anyway of finding out at what price the last similar house sold?


----------



## phoenix_n

redo said:


> Laraghcon Lucan
> Old price 790k (Previously reduced from 800k)
> 
> 
> New price 770k
> 
> [broken link removed]


 

...and all the kings horses and all the kings men....


----------



## treora

Hey - Joan posted a reply. Kind of wish that I had been more acerbic of her economic acumen, rather than give her a flimsey solution. 

[broken link removed]

Oh, and Mark Keogh is just another handle.


----------



## room305

Goldfinger said:


> Please use: http://tinyurl.com/ when pasting big URLs



Just use the daft short codes rather than cutting and pasting the browser URL.


----------



## darex

liteweight said:


> How long did it take you to think that up??? I couldn't hear anything.....it's the sound of all those running feet....drown the sensible one out!



But you get the point I hope - it the value in the argument that counts not the number of people making it. This is one of the key things that differentiates the people on this thread from the general public.


----------



## redo

[broken link removed]


----------



## liteweight

darex said:


> But you get the point I hope - it the value in the argument that counts not the number of people making it. This is one of the key things that differentiates the people on this thread from the general public.



I get the point Darex. But people on this thread are members of the general public! They're not a special breed, just people with opinions taking great pleasure in expressing them....and why not.


----------



## Eben

From redo's link to gunne report:

Going forward

The Naas market is expected to perform strongly based on
the weight of demand for property in the area and the fact that
the profile of the region will be further enhanced following the
Ryder Cup.



And you're worried about Joan Bruton's economic acumen!


----------



## whizzbang

redo said:


> [broken link removed]



I think the Q4 issues of all these reports should be interesting!


----------



## blindjustice

SPC100 said:


> * I am very scared about future Irish prosperity, thinking about changing job at the moment, and am lookin strongly at the public service.



I took it one step further! I just left the public service! off to foreign lands...



edo said:


> A Few other observations while Im at it.
> Im just back from a tour around eastern Europe and Israel as a vanguard unit of the next phase of the Irish Manufacturing industry - exporting jobs - outsourcing - from what I can see there wont be many companies who manufacture and source manufactured goods from Irish suppliers left in 10 years time - it will be drip,drip drip - I have been appointed to turn off the light and put myself on the last boat out!
> 
> 
> 
> EDO





murray said:


> blindjustice said:
> 
> 
> 
> hooray - a bullish post!
> or three!
> doesnt convince me though
> 
> *I too have literally bet my PPR on a crash*
> 
> 
> well done 'blindjustice' welcome to the club ! -
> 
> 
> 
> 
> I sold in spring I spoke with an auctioneer who said that the market had slowed alot in summer 2005 and that i didnt pick up much in the Autumn until the 100% mortgages came out - he said this boosted things until after Christmas (bear in mind this is down the country NOT Dublin commutable) but slowed again in spring. Houses were taking alot longer to shift I was advised by the auctioneer to IN HIS WORDS NOW "take the money and run".
> 
> I am suprised that places like Lucan are getting the publicity about houses for sale increasing - its been happening down the country a while now. I always thought it will hit rural Ireland first and hardest but i think the publicity will be for places like lucan and will knock on down here and make rural places damn near worthless. Some can still sell down here if they are priced correctly but its been hypovolemic a while now leading to a crash that no defibrillator will restart.
Click to expand...


----------



## Panzraam

> I wonder are Rico and Panzraam wolves in estate agents clothing?


 
I have to say that I am a bit surprised at being accused of being an EA given that I had just said




> I am bearish overall in the medium to long term


 

And




> IMO we are looking at a long slow deflation of the bubble


 
Is that what passes for EA optimism these days?


----------



## liteweight

Panzraam said:


> I have to say that I am a bit surprised at being accused of being an EA given that I had just said



I wouldn't worry about it. I've been accused of being an EA, a pyramid prop. AND a lemming!


----------



## Jeanne

Given that house prices are dropping, fairly significantly in some cases, makes me wonder is it better to have high interest rates and low house prices or low interest rates and ridiculous house prices?

Is there a big difference? Which is better all around? Perhaps it's the better of two evils to have high interest rates and low house prices. 

Was it *better* before the property boom? Everyone seems to think the loads-of-dosh celtic-tiger pheonemon was fantastic and low interest rates were a Godsend and everyone jumping on the property ladder meant we were a progressive country and sure aren't we (now morelike weren't we) almost practically millionaires (on paper anyway).  And sure isn't it all just grrreeeat!

Nonsense.

Did low interest rates = a bertie bowl type loss of sanity and decline into shameful greed.   

For another topic perhaps?

Meanwhile, far as I can see, there were very few viewings in my area this week (Churchtown/Dundrum). Looks like autumn season is already over and out as many here correctly predicted earlier this summer.
A washout...like the weather!


----------



## BigM

robd said:


> I mailed her on this earlier this morning. I have to say I got a prompt, corteous and detailed response clarifying her position. The quote in the IT was shortened. The full quote form the statement is below, which puts it a bit more in context. It makes more sense and she doesn't look so dumb. Seems the times took the bit they wanted.
> /QUOTE]
> 
> Except she's ignoring the fact that since it was the unprecedented low interest rates that allowed the banks to lend unprecedented salary multiples to people to spend unprec..(you get the idea) amounts on houses that caused the boom, it follows that higher interest rates will reduce the borrowing and therefore spending capacity of people.
> For some reason politicians, commentators, analysts etc are focussing entirely on how higher rates mean FTBs (especially) cannot borrow as much and so cannot afford to get on the 'ladder'.  But nobody (present company excluded, of course) is pointing out that this is exactly what is needed - if no-one can afford to buy then either nothing gets sold or prices come down. Am I missing something??


----------



## BigM

And she's also ignoring the fact that rate rises are beneficial to that rather significant % of people in Europe who actually save money rather than see how much they can possibly borrow from a bank for 40 yrs...


----------



## walk2dewater

BigM said:


> And she's also ignoring the fact that rate rises are beneficial to that rather significant % of people in Europe who actually save money rather than see how much they can possibly borrow from a bank for 40 yrs...


 
Spot on.  Except for "beneficial" I'd use "absolutely essential".  Trichet et al WILL get their 'price stability'.


----------



## blindjustice

http://www.boards.ie/vbulletin/showpost.php?p=52108176&postcount=822

good post from boards.ie

the list could be updated and maybe the bulls could have their own one or we should make two lists for and against


----------



## conor_mc

blindjustice said:


> http://www.boards.ie/vbulletin/showpost.php?p=52108176&postcount=822
> 
> good post from boards.ie
> 
> the list could be updated and maybe the bulls could have their own one or we should make two lists for and against


 
The only statistic I've come across that would support a continuing bull run in property is that we are beneath the EU average ratio of people:houses. Other than that, the stats are stacked in favour of the bears as far as I can see.


----------



## asdef

*Have the property gurus really got it right?*
http://www.unison.ie/irish_independent/stories.php3?ca=36&si=1702104&issue_id=14741



> Says Marian Finnegan, chief economist with auctioneers Sherry Fitzgerald: "For a market to fall, there has to be a fundamental shift in economic performance. Yes, interest rates have gone up. But if you put that aside for a moment, we still have an economy which is growing at three times the rate of most of Europe.


And how much of that is centered on the construction industry? 



> The rate of increase since the summer has been markedly lower, though that may be partly seasonal.


*cough* Really? From an article last year in the Indo, http://www.unison.ie/irish_independent/stories.php3?ca=303&si=1469805&issue_id=13008:


> AS THE auctioneers return to the rostrum in large numbers, buyers can expect an exciting season over the next two months with hundreds of prime residential lots going under the hammer. The autumn auction season tends to be even more frenetic than the spring summer period as vendors and buyers are anxious to close that deal and move in before Christmas.


One more quote from today's article (by ESRI economist David Duffy):


> It's unlikely that anybody who buys now will be in a negative equity situation next year.


No comment on that one...


----------



## phoenix_n

Terrace in phibs reduced from [broken link removed] to [broken link removed]


----------



## Duplex

As the banks and agents are happy to 'advise' buyers that the property market will continue to inflate in the coming years; I have a suggestion for anyone wishing to enter the market, who is skeptical about the sincerity of their forecasts. 

_*Get your bank and the selling agent to put in writing that the value of the house you are buying will not fall in nominal or real terms over the next five years. Ask them to agree to reimburse you the difference between the current price and the market value in five years time (if prices fall).*_ 


If they (banks and agents) are sincere in their prognostications they will be happy to enter into a binding agreement.


----------



## blindjustice

some speculation:
what about our low unemployment levels put aside the fact so many are employed in the construction industry. we are still under the eu average for houses per population arent we? when are we due to meet that level?
could an influx of people from the new EU member states somehow help this level off? i think we have enough eejits in  the country to keep buying once they can just about afford it.so in theory could it level off ? in theory communism works. we are surely on the edge

what do people think is the biggest threat to house prices?
Interest rates, or a slowdown in building causing job losses? Job losses in multinationals? etc etc if you were to say the latter you could argue that a crash wont be for awhile yet, if you were to say interest rate hikes have destroyed sentiment in FTBs then you could argue that the bottom has gone now and the New Year will dawn a brave new world


----------



## Duplex

blindjustice said:


> some speculation:
> what about our low unemployment levels put aside the fact so many are employed in the construction industry. we are still under the eu average for houses per population arent we? when are we due to meet that level?
> could an influx of people from the new EU member states somehow help this level off? i think we have enough eejits in the country to keep buying once they can just about afford it.so in theory could it level off ? in theory communism works. we are surely on the edge


 
We would have to continue to build more houses than we need and take on more debt than we can afford to sustain the current bubble.  Sustainable economic growth is built on increased productivity not increasing indebtedness.


----------



## bearishbull

A house on my road went on sale by private treaty this week and had an open viewing today. Only about 4 couples viewed it during the hour long session and the "poor" estate agent was standing idly at the front door waiting to greet the very few viewers. The same house sold by private treaty in early 05 and there were dozens of people viewing each evening that there was a viewing.


----------



## bearishbull

blindjustice said:


> what do people think is the biggest threat to house prices?


 
Biggest threats? Investors cashing in when capital appreciation becomes sub inflation level, and debt, debt cant keep growing at the current rate and peoples borrowing capacity is being reduced and confidence drained by every interest rate rise. Even if prices remained flat for next ten years and mortgage/debt levels continued growing at a slower rate of 20% then after around ten years mortgages would equal or exceed the value of all residential property!


----------



## whathome

New build buyers will be in negative equity before second hand buyers?

In a stagnant market, if a new build buyer has to sell for whatever reason, they need to drop the price below their purchase price to compensate the purchaser for stamp duty on second hand property. 

Am I right in thinking that many buyers of new developments over the past few months (100% or high LTV mortgages) will be in negative equity as soon as they sign their contract? To sell, they have to compete with the developer .... but people buying from the developer don't have to pay stamp duty so the private seller has to sell at a loss to compete.

Immediate Negative Equity


----------



## darex

phoenix_n said:


> Terrace in phibs reduced from [broken link removed] to [broken link removed]



Am curious - am noting that these are 2 different agents. Could some of this drop be explained by different pricing strategies adopted by different agents? Also unless I am mistaken its not possible to see the dates that the two ads were posted on.


----------



## beattie

whathome said:


> New build buyers will be in negative equity before second hand buyers?
> 
> In a stagnant market, if a new build buyer has to sell for whatever reason, they need to drop the price below their purchase price to compensate the purchaser for stamp duty on second hand property.
> 
> Am I right in thinking that many buyers of new developments over the past few months (100% or high LTV mortgages) will be in negative equity as soon as they sign their contract? To sell, they have to compete with the developer .... but people buying from the developer don't have to pay stamp duty so the private seller has to sell at a loss to compete.
> 
> Immediate Negative Equity


 
I think you are right. I expect many new builds to come down in price as many of these builders bought the land many years ago when land wasn't as expensive as it is today. 

I find it incredible that the economist from the ESRI is telling one and all that anyone who buys now won't be in negative equity next year. He doesn't even work for a bank...


----------



## bearishbull

beattie said:


> I think you are right. I expect many new builds to come down in price as many of these builders bought the land many years ago when land wasn't as expensive as it is today.
> 
> I find it incredible that the economist from the ESRI is telling one and all that anyone who buys now won't be in negative equity next year. He doesn't even work for a bank...


 
With house prices falling in some parts of country already i dont know how he can seriously say that. Although he did say "unlikely", maybe the esri dont wanna be called doom merchants etc.


----------



## beattie

bearishbull said:


> With house prices falling in some parts of country already i dont know how he can seriously say that. Although he did say "unlikely", maybe the esri dont wanna be called doom merchants etc.


 
Aren't they meant to be impartial? It's like Bertie's interjection into the debate a few months ago. At least he is probably too busy saving his own skin to make any more forays into the debate


----------



## phoenix_n

darex said:


> Am curious - am noting that these are 2 different agents. Could some of this drop be explained by different pricing strategies adopted by different agents? Also unless I am mistaken its not possible to see the dates that the two ads were posted on.


 
Actually both properties feature on myhome at different prices but different descriptions and diff number of rooms. Daft shows 525 as the price but can not be sure if 630 was the actual original....

Suspect that vendor changed agent (gwd to hok) and the original (630) is stil showing.

..update...

yep here it is on gwd site....at price 630

16% drop in asking price.


----------



## phoenix_n

BTW.

Expect sentiment to change even further with tomorrows article by Nick Gleeson in the sbpost.


----------



## beattie

phoenix_n said:


> BTW.
> 
> Expect sentiment to change even further with tomorrows article by Nick Gleeson in the sbpost.


 

Should be a good read


----------



## whathome

phoenix_n said:


> 16% drop in asking price.


 
That's a hefty drop.

Prices for these ex-corpo houses in Drumcondra are falling also - they used to be very popular with the buy-to-let brigade.

Old Price €550,000


New Price €500,000
[broken link removed]=


----------



## phoenix_n

whathome said:


> That's a hefty drop.
> 
> Prices for these ex-corpo houses in Drumcondra are falling also - they used to be very popular with the buy-to-let brigade.
> 
> Old Price €550,000
> 
> 
> New Price €500,000
> [broken link removed]


 
Not surprised. Drumcondra has 80 properties for sale on myhome. Thats alot of stock and is why vendors are starting to reduce prices (stressed vendors) to try to put themselves on a buyers radar.


----------



## whathome

Here's another significant drop. I've always really liked Daneswell road in Glasnevin, lovely houses - great area.

Number 7 Danesfort road came to the market at *€875,000*, listing 009 - second from the bottom on this list:


and it was also listed in an Irish Times article here (2nd house):
[broken link removed]

Now it's *reduced to €825,000*:
[broken link removed]=


----------



## phoenix_n

whathome said:


> Here's another significant drop. I've always really liked Danesfort road in Glasnevin, lovely houses - great area.
> 
> Number 7 Danesfort road came to the market at *€875,000*, listing 009 - second from the bottom on this list:
> 
> 
> and it was also listed in an Irish Times article here (2nd house):
> [broken link removed]
> 
> Now it's *reduced to €825,000*:
> [broken link removed]


 
Know that street as i passed it recently. Made a mental note on the streetname as i liked the houses.

But even at 825 its still over-valued. Well more to the point.....people are not making the gains as before so that premium (house value is about 600) of 225K no longer is available. 

Its become a reality that the longer you wait to buy the more money you will save. Better than any SSIA scheme.


----------



## 2nz

Hi,

New to this site. Good arguments. The examples of falling prices are v interesting.
Is there any website or blog which collates all examples of falling house prices? It would be great to see a list of these.


btw. If you have not guessed, i'm one of those people praying for a crash and before some of you say it, yes I am bitter that I did not get in early, but regardless of motivation the simple fact is that the prices of houses now are effin rediculous


----------



## phoenix_n

2nz said:


> Hi,
> 
> New to this site. Good arguments. The examples of falling prices are v interesting.
> Is there any website or blog which collates all examples of falling house prices? It would be great to see a list of these.


 
This is it. Do some research on your area, google some individual houses and find from cache previous asking price.

Like a commune. Everyone chips in. 

How did you come by this site ?


----------



## 2nz

Hi Phoenix,

Stumbled onto it when googling for examples of falling prices. The property has me driven mad...it's like a mad hobby now - reading articles etc


----------



## 2nz

We need a site or blog which only lists examples of falling prices and no comments. If there isn't one then I'll start a thread


----------



## whathome

2nz said:


> We need a site or blog which only lists examples of falling prices and no comments. If there isn't one then I'll start a thread


 
Don't start a thread - best to keep property market debate on this thread.


----------



## beattie

2nz said:


> We need a site or blog which only lists examples of falling prices and no comments. If there isn't one then I'll start a thread


 
Good idea, it can be difficult to find instances of price drops in this thread so a separate thread would be good. Don't think the Austin Hughes' and Ger Gilroys of this world will be happy with that


----------



## bearishbull

Awful lot of houses for sale in Glasnevin/drumcondra alrite



[img=http://img2.freeimagehosting.net/uploads/th.7b6d76eab2.jpg]


----------



## memyselfandi

2nz said:


> We need a site or blog which only lists examples of falling prices and no comments. If there isn't one then I'll start a thread


Sounds like a really good idea. As it will createa singular plcation for tracking the downward fall in prices (if it continues/accelerates). I especially agree with the no comment point. Is there a way to stop comments on it?


----------



## redo

Maybe create a thread titled "_*Property Dead Pool"*_.  People can put up posts from myhome.ie of houses for sale that they think will have a price drop.

Here is my bet, down to a 1 million before the end of the month, current asking price of 1.2 million

[broken link removed]


----------



## johnjoe101

I can beat that

[broken link removed]

Crazy talk!!!


----------



## blindjustice

just wondered about the comparisons with other countries etc
whats the pric of an average house in the US compared with the average wage. Compare both with here and convert into one currency. I would do it but am on dial up and the stupid connection keeps going plus its only 18.9kps!!


----------



## Maine

whathome said:


> Don't start a thread - best to keep property market debate on this thread.


 
Agreed IMO better to keep the price drops here as they sustain this thread and provide evidence of what is being discussed. real examples are important to this debate.

Has anyone *done an decent analysis of what will happen to tax receipts* if say housing output drops to 50,000 and transactions fall to normal level. On a brief analysis of recent dept of finance figures it looked like either corp tax rate would have to go up to 18% plus or that income tax at top rate will have to go by 5%. This is before factoring in higher dole costs.  It could be too scary an analysis.

This IMO could drive prices lower in year 2 / 3 of a downturn as taxes rise and govt is forced to cut costs and implement hiring freezes.


----------



## 2nz

Ok, not too many replies to my suggestion. Perhaps ye are all offline. Anyhoo, this is a really strong and stable thread so maybe keeping the price drop details here would be best.
To that end, I propose that when posting examples of price drops that the user copies the current list adds their example - the idea being that we will have one large list of examples and can check on old examples, etc.

After a quick search of the thread I found the examples below. I have not checked all links.


*Current List of House Price Drops*

*Example 1*

Number 7 Danesfort road came to the market at *€875,000*, listing 009 - second from the bottom on this list:
http://66.102.9.104/search?q=cache:u...n&ct=clnk&cd=2
and it was also listed in an Irish Times article here (2nd house):
http://www.ireland.com/newspaper/pro...IEFSJULY6.html
Now it's *reduced to €825,000*:
http://www.myhome.ie/search/property...rch&searchlist=


*Example 2*
Terrace in phibs *reduced* from 630 to 525


*Example 3*
Laraghcon Lucan
Old price 790k (Previously *reduced* from 800k)
http://66.249.93.104/search?q=cache:...e&ct=clnk&cd=1
New price 770k
http://www4.myhome.ie/search/property.asp?id=285862


*Example 4*
interesting price drop in portobello from 850k to 740k
original cached - http://66.249.93.104/search?q=cache:...e&ct=clnk&cd=4
now - http://www.myhome.ie/search/property.asp?id=264189



*Example 5*
Original AP 800k
*Reduced* to 790k
http://www.myhome.ie/search/property.asp?id=286176
Can't find it in the cache but you can see the original amount of 800k furthur down the page. These guys are really sloppy and are probably charging 5-7.5K for the pleasure.



*Example 6*
Old Price €785,000
http://66.249.93.104/search?q=cache:...ct=c lnk&cd=1
New Price €745,000 : *Reduced by €40,000*
www.daft.ie/142630 

*Example 7*
Old Price €720,000
http://66.249.93.104/search?q=cache:...n&ct=clnk&cd=5
New Price €690,000 : *Reduced by €30,000*
http://www.myhome.ie/search/property.asp?id=276511

*Example 8*
Old Price €650,000
http://66.102.9.104/search?q=cache:R...n&ct=clnk&cd=2
New Price €575,000 : *Reduced by €75,000*
http://www.myhome.ie/search/property.asp?id=277714


*Example 9*
Old price €400,000
http://209.85.129.104/search?q=cache...n&ct=clnk&cd=1
New price €390,000
www.daft.ie/118303


*Example 10*
3rd house from top, 100 Ardmore Hills *reduced* from €600,000
http://www.mcdonnellproperty.ie/html...nt.asp?docid=2
Now going for €550,000
http://www.daft.ie/searchsale.daft?id=140651&search=1


*Example 11*
Was €325,000
http://66.102.9.104/search?q=cache:b...ct=clnk&cd= 1
Now €315,000 and still no takers.
http://www.daft.ie/116563


*Example 12*
New price €360,000
http://www.myhome.ie/search/property...rch&searchlist=
75 Ferndale (2nd in the list) - Old price €370,000
http://209.85.129.104/search?q=cache...ct=clnk& cd=1



*Example 13*
24 Galtrim Grange, Malahide.
Asking price 
800k
http://66.102.9.104/search?q=cache:F...e&ct=clnk&cd=1
*Reduced* to 730k
http://www4.myhome.ie/search/propert...ch&searchlist=



*Example 14*
http://64.233.161.104/search?q=cache...&ct=clnk&cd=17
4th and 5th in the list. Click through and you'll see the new prices:
€640k *reduced* to €630k
€880k *reduced* to €860k


*Example 15*
Old price €380,000 (cached July 13th)
http://72.14.205.104/search?q=cache:...n&ct=clnk&cd=3
New Price €365,000
www.daft.ie/11095


*Example 16*
This house for example (2nd in the list) started with an AMV of €3,000,000
http://72.14.221.104/search?q=cache:...n&ct=clnk&cd=1
and was subsequently *reduced* to €2,750,000 even before the auction, coming up on 26th Sep
http://www.myhome.ie/search/property...rch&searchlist=



*Example 17*
This house *reduced* by €1,000,000 ...
Any takers?
Was €8,500,000:
http://66.102.9.104/search?q=cache:f...n&ct=clnk&cd=6
Now only €7,500,000
http://www.myhome.ie/search/property...rch&searchlist=


*Example 18*
*Reduced* from 290K (cache) to 265K. 


*Example 19*
Balivor in Dublin 18 was withdrawn from auction in May and then quoted €3.35M, now it's been *reduced* to €2.75M
http://www.myhome.ie/search/property...rch&searchlist=
Original SBpost article listing withdrawal in May:
http://72.14.221.104/search?q=cache:...n&ct=clnk&cd=1


----------



## blindjustice

cool


----------



## JayDub

Good work
*36 Beech Hill Drive,* Donnybrook, Dublin 4
*http://tinyurl.com/lgwvr*
Old price - €785,000

New Price - €735,000 - Sale Agreed
[broken link removed]=


----------



## dontaskme

Remix said:


> It's possible to comment here:
> 
> Maybe she'll clarify her position - who knows ?
> 
> [broken link removed]


 
As bearishbull said, the ECB's main concern is inflation, not growth. But I don't think she should be criticising the interest rate rise because the ECB should be free from political interference. The ECB don't try to tell the Government how to raise taxes.

She goes on to criticise speculators but if they are leveraged they are going to have to pay the extra interest, the same as a first time buyer.


----------



## 2nz

JayDub said:


> Good work
> *36 Beech Hill Drive,* Donnybrook, Dublin 4
> *http://tinyurl.com/lgwvr*
> Old price - €785,000
> 
> New Price - €735,000 - Sale Agreed
> [broken link removed]


 

Good job JayDub.
Not to be a tight ass, but in future please copy the list below, add your example and repost. 

*Current List of House Price Drops

Example 1*

Number 7 Danesfort road came to the market at *€875,000*, listing 009 - second from the bottom on this list:
http://66.102.9.104/search?q=cache:u...n&ct=clnk&cd=2
and it was also listed in an Irish Times article here (2nd house):
http://www.ireland.com/newspaper/pro...IEFSJULY6.html
Now it's *reduced to €825,000*:
http://www.myhome.ie/search/property...rch&searchlist=


*Example 2*
Terrace in phibs *reduced* from 630 to 525


*Example 3*
Laraghcon Lucan
Old price 790k (Previously *reduced* from 800k)
http://66.249.93.104/search?q=cache:...e&ct=clnk&cd=1
New price 770k
http://www4.myhome.ie/search/property.asp?id=285862


*Example 4*
interesting price drop in portobello from 850k to 740k
original cached - http://66.249.93.104/search?q=cache:...e&ct=clnk&cd=4
now - http://www.myhome.ie/search/property.asp?id=264189



*Example 5*
Original AP 800k
*Reduced* to 790k
http://www.myhome.ie/search/property.asp?id=286176
Can't find it in the cache but you can see the original amount of 800k furthur down the page. These guys are really sloppy and are probably charging 5-7.5K for the pleasure.



*Example 6*
Old Price €785,000
http://66.249.93.104/search?q=cache:...ct=c lnk&cd=1
New Price €745,000 : *Reduced by €40,000*
www.daft.ie/142630 

*Example 7*
Old Price €720,000
http://66.249.93.104/search?q=cache:...n&ct=clnk&cd=5
New Price €690,000 : *Reduced by €30,000*
http://www.myhome.ie/search/property.asp?id=276511

*Example 8*
Old Price €650,000
http://66.102.9.104/search?q=cache:R...n&ct=clnk&cd=2
New Price €575,000 : *Reduced by €75,000*
http://www.myhome.ie/search/property.asp?id=277714


*Example 9*
Old price €400,000
http://209.85.129.104/search?q=cache...n&ct=clnk&cd=1
New price €390,000
www.daft.ie/118303


*Example 10*
3rd house from top, 100 Ardmore Hills *reduced* from €600,000
http://www.mcdonnellproperty.ie/html...nt.asp?docid=2
Now going for €550,000
http://www.daft.ie/searchsale.daft?id=140651&search=1


*Example 11*
Was €325,000
http://66.102.9.104/search?q=cache:b...ct=clnk&cd= 1
Now €315,000 and still no takers.
http://www.daft.ie/116563


*Example 12*
New price €360,000
http://www.myhome.ie/search/property...rch&searchlist=
75 Ferndale (2nd in the list) - Old price €370,000
http://209.85.129.104/search?q=cache...ct=clnk& cd=1



*Example 13*
24 Galtrim Grange, Malahide.
Asking price 
800k
http://66.102.9.104/search?q=cache:F...e&ct=clnk&cd=1
*Reduced* to 730k
http://www4.myhome.ie/search/propert...ch&searchlist=



*Example 14*
http://64.233.161.104/search?q=cache...&ct=clnk&cd=17
4th and 5th in the list. Click through and you'll see the new prices:
€640k *reduced* to €630k
€880k *reduced* to €860k


*Example 15*
Old price €380,000 (cached July 13th)
http://72.14.205.104/search?q=cache:...n&ct=clnk&cd=3
New Price €365,000
www.daft.ie/11095


*Example 16*
This house for example (2nd in the list) started with an AMV of €3,000,000
http://72.14.221.104/search?q=cache:...n&ct=clnk&cd=1
and was subsequently *reduced* to €2,750,000 even before the auction, coming up on 26th Sep
http://www.myhome.ie/search/property...rch&searchlist=



*Example 17*
This house *reduced* by €1,000,000 ...
Any takers?
Was €8,500,000:
http://66.102.9.104/search?q=cache:f...n&ct=clnk&cd=6
Now only €7,500,000
http://www.myhome.ie/search/property...rch&searchlist=


*Example 18*
*Reduced* from 290K (cache) to 265K. 


*Example 19*
Balivor in Dublin 18 was withdrawn from auction in May and then quoted €3.35M, now it's been *reduced* to €2.75M
http://www.myhome.ie/search/property...rch&searchlist=
Original SBpost article listing withdrawal in May:
http://72.14.221.104/search?q=cache:...n&ct=clnk&cd=1


*Example 20*
*36 Beech Hill Drive,* Donnybrook, Dublin 4
*http://tinyurl.com/lgwvr*
Old price - €785,000

New Price - €735,000 - Sale Agreed
[broken link removed]=


----------



## 2nz

Example 21 added. 


*Current List of House Price Drops

Example 1

*Number 7 Danesfort road came to the market at *€875,000*, listing 009 - second from the bottom on this list:
http://66.102.9.104/search?q=cache:u...n&ct=clnk&cd=2
and it was also listed in an Irish Times article here (2nd house):
http://www.ireland.com/newspaper/pro...IEFSJULY6.html
Now it's *reduced to €825,000*:
http://www.myhome.ie/search/property...rch&searchlist=


*Example 2*
Terrace in phibs *reduced* from 630 to 525


*Example 3*
Laraghcon Lucan
Old price 790k (Previously *reduced* from 800k)
http://66.249.93.104/search?q=cache:...e&ct=clnk&cd=1
New price 770k
http://www4.myhome.ie/search/property.asp?id=285862


*Example 4*
interesting price drop in portobello from 850k to 740k
original cached - http://66.249.93.104/search?q=cache:...e&ct=clnk&cd=4
now - http://www.myhome.ie/search/property.asp?id=264189



*Example 5*
Original AP 800k
*Reduced* to 790k
http://www.myhome.ie/search/property.asp?id=286176
Can't find it in the cache but you can see the original amount of 800k furthur down the page. These guys are really sloppy and are probably charging 5-7.5K for the pleasure.



*Example 6*
Old Price €785,000
http://66.249.93.104/search?q=cache:...ct=c lnk&cd=1
New Price €745,000 : *Reduced by €40,000*
www.daft.ie/142630 

*Example 7*
Old Price €720,000
http://66.249.93.104/search?q=cache:...n&ct=clnk&cd=5
New Price €690,000 : *Reduced by €30,000*
http://www.myhome.ie/search/property.asp?id=276511

*Example 8*
Old Price €650,000
http://66.102.9.104/search?q=cache:R...n&ct=clnk&cd=2
New Price €575,000 : *Reduced by €75,000*
http://www.myhome.ie/search/property.asp?id=277714


*Example 9*
Old price €400,000
http://209.85.129.104/search?q=cache...n&ct=clnk&cd=1
New price €390,000
www.daft.ie/118303


*Example 10*
3rd house from top, 100 Ardmore Hills *reduced* from €600,000
http://www.mcdonnellproperty.ie/html...nt.asp?docid=2
Now going for €550,000
http://www.daft.ie/searchsale.daft?id=140651&search=1


*Example 11*
Was €325,000
http://66.102.9.104/search?q=cache:b...ct=clnk&cd= 1
Now €315,000 and still no takers.
http://www.daft.ie/116563


*Example 12*
New price €360,000
http://www.myhome.ie/search/property...rch&searchlist=
75 Ferndale (2nd in the list) - Old price €370,000
http://209.85.129.104/search?q=cache...ct=clnk& cd=1



*Example 13*
24 Galtrim Grange, Malahide.
Asking price 
800k
http://66.102.9.104/search?q=cache:F...e&ct=clnk&cd=1
*Reduced* to 730k
http://www4.myhome.ie/search/propert...ch&searchlist=



*Example 14*
http://64.233.161.104/search?q=cache...&ct=clnk&cd=17
4th and 5th in the list. Click through and you'll see the new prices:
€640k *reduced* to €630k
€880k *reduced* to €860k


*Example 15*
Old price €380,000 (cached July 13th)
http://72.14.205.104/search?q=cache:...n&ct=clnk&cd=3
New Price €365,000
www.daft.ie/11095


*Example 16*
This house for example (2nd in the list) started with an AMV of €3,000,000
http://72.14.221.104/search?q=cache:...n&ct=clnk&cd=1
and was subsequently *reduced* to €2,750,000 even before the auction, coming up on 26th Sep
http://www.myhome.ie/search/property...rch&searchlist=



*Example 17*
This house *reduced* by €1,000,000 ...
Any takers?
Was €8,500,000:
http://66.102.9.104/search?q=cache:f...n&ct=clnk&cd=6
Now only €7,500,000
http://www.myhome.ie/search/property...rch&searchlist=


*Example 18*
*Reduced* from 290K (cache) to 265K. 


*Example 19*
Balivor in Dublin 18 was withdrawn from auction in May and then quoted €3.35M, now it's been *reduced* to €2.75M
http://www.myhome.ie/search/property...rch&searchlist=
Original SBpost article listing withdrawal in May:
http://72.14.221.104/search?q=cache:...n&ct=clnk&cd=1


*Example 20*
*36 Beech Hill Drive,* Donnybrook, Dublin 4
*http://tinyurl.com/lgwvr*
Old price - €785,000

New Price - €735,000 - Sale Agreed
[broken link removed]=


*Example 21*
*Apartment 135 Bertram Court*, Christchurch, Dublin 8
Old Price - €290,000 (01-10-06)


New price - €280,000
[broken link removed]=


----------



## whathome

Can we drop the repetition of price drops? We know it's happening, no need to keep posting the same list over and over.

If people want to compile a list, maybe they could do it on a different website?

Edit:  How about setting up a blog that people can post listings as comments?  Would that work?


----------



## paddyd

whathome said:


> Can we drop the repetition of price drops? We know it's happening, no need to keep posting the same list over and over.
> 
> If people want to compile a list, maybe they could do it on a different website?


 
ditto


----------



## 2nz

No problem Whathome and Paddy. I guessed people would feel that way, hence my first suggestion, which Whathome disagreed with 

The list has been added to the new thread *List of House Price Drops In Ireland.*
That thread is hopefully only for additions to the list and no comments. People can comment on this thread.


----------



## zac

whizzbang said:


> I'd be in here but you said at the start that those who had not owned property could not be considered bears for some reason.
> 
> How about not buying because you are a bear rather than selling because you are a bear. I think there are quite a few in the "not buy" category.
> 
> /edit, perhaps it wasn't you who said it, but whoever started this "how many real bears?" sub thread did.



i would rather not count "not buying" category, there could be multiple reasons for them to be not buying, like maybe they cant afford to, more importantly they dint buy last year, 2 years ago, 3 years ago, or 5 years ago, and they have been proven wrong so far, why would somebody listen to their opinion, they have been constantly wrong so far.


----------



## zac

daveirl said:


> I don't have a house and have no intention of buying, does that not make me a bear.


yea maybe a bear who has been wrong so far, or someone who secretly or openly wishes for a crash so that he can buy, as i said before not counting opinions.


----------



## whathome

2nz said:


> The list has been added to the new thread *List of House Price Drops In Ireland.*


 
That thread will be shut down.

What about my suggestion to create a blog on a separate website? - blogger for example, I think Duplex uses that one.


----------



## zac

plaudit said:


> What about people like me who would consider a crash benificial before I choose to upgrade? No point in spending €200k now when it only be €150K next year. I am holding in anticipation of prices falling.



and your existing property wont depreciate in price when 200k upgrade cost becomes 150k?

again, im counting investors reducing long holdings and owners selling and moving to rental properties.


----------



## zac

edo said:


> Well Im technically a property owner - have an apartment abroad - but since I returned to Dear Old Ireland at the turn of the millennium I 've chosen to rent - Do I qualify?
> 
> Later Folks
> 
> EDO



yea but that was more than half a decade ago and prices are up approx 75% average since then.


----------



## zac

Gwynston said:


> Do I count as a bear for convincing my wife NOT to buy an investment property?
> Does that make me a bear for bucking the trend?
> Wonder if I could convince the wife to sell up now, make a handsome profit and go rent cheaply....



when you manage to do that please let us know


----------



## zac

zac said:


> Originally Posted by *zac* http://www.askaboutmoney.com/showthread.php?p=289135#post289135
> _so far we have discovered 4 real bears, who sold within 1 year period and now renting.
> 
> also 1 or 2 who sold in last couple of years for multiple reasons, including travel, going abroad etc etc and dint buy on their return, so i guess we can call them half real bears.
> 
> any more? there should be lot more here seeing peoples sentiment here in general.
> 
> 
> _
> ok here is an update, so far 6 real bears and two half bears...
> and rest are either hiding or have nothing more to show apart from their opinions.
> come on out of hundreds postings on this forum only 8 bears?
> 
> still waiting on more responses, from investors who are reducing their holdings, or owners moving to rental properties.




update: on this forum we have 7 real bears and 2 half real bears who have something to show for their opinion..

they have either sold their residential property recently and now renting, or  they have reduced their  holdings   recently, within a year or so.

i will update my count if i come across any more replies.


----------



## gurramok

*Example 22*
Reduced by *1.6%*
No. 10 in list was €435k on 15 July


Now €428k
[broken link removed]

*Example 23*
Reduced by *4.1%*
8th in list was €365k on 3rd July 
Now €350k 
[broken link removed]

*Example 26*
Reduced by *2.9%*
Was €695 on 25th May '06 (5th in list)


Now €675
[broken link removed]

*Example 27
* Reduced by *9.1%*
Was €780k (8th in list )


Now €710k
[broken link removed]

*Example 28*
Reduced by *6.4%*
Was €395k (8th in list)


Now €370k
[broken link removed]

*Example 29*
Reduced by *4.6%*
Was €550k (9th in list)


Now €525k
[broken link removed]

*Example 30*
Reduced by *6.7%*
Was €300k (8th in list)


Now €280k sale agreed
[broken link removed]

*Example 31*
Reduced by *7.3%*
Was €345k


Now €320k
[broken link removed]


----------



## onekeano

bearishbull said:


> A house on my road went on sale by private treaty this week and had an open viewing today. Only about 4 couples viewed it during the hour long session and the "poor" estate agent was standing idly at the front door waiting to greet the very few viewers. The same house sold by private treaty in early 05 and there were dozens of people viewing each evening that there was a viewing.



But BB, what was the price it sold for in 05 vs the current advertised price? Maybe that explains the difference in the level of interest.

Roy


----------



## Savvy

*Example 24:*
330 last week

Now its 310
http://www.daft.ie/searchsale.daft?id=123442
<p>
* Example 25:*
359 last week

Now its 345
http://www.daft.ie/searchsale.daft?id=123066


----------



## bearishbull

onekeano said:


> But BB, what was the price it sold for in 05 vs the current advertised price? Maybe that explains the difference in the level of interest.
> 
> Roy


Exactly. The prices have risen too high to generate interest despite the supposed shortage of 2nd hand houses in Dublin suburbs and a correction is now underway to restore equilibrium to the market.

Can people stop posting ASKING price drops, its annoying and we know house asking prices are dropping everywhere. When theres something more dramatic than 10% asking price drops feel free to post, but repitition of very similar reductions is boring and excessive. 

Like this quote from Nick Leeson in todays SBP.

_While the IMF and the Economist have warned about how long the property market can continue at this pace, the property bulls quickly dismiss the findings as not taking into account Ireland’s unique conditions.

They are also quick to point out that anyone who had taken this advice a year ago would have missed out on the capital appreciation since then. That is understandable but mortgages are taken out over far longer periods and this has to be taken into account._

http://tinyurl.co.uk/31g7


----------



## futisle

Page 2 of The Sunday Business Post big headline says Property Crash is unlikely - OECD, can't find the link. Apperently  its more likely in France. Do the OECD know something we don't? Bearish semtiment elswhere in the paper though.


----------



## gurramok

Longtime lurker on site, decided to dig up yet more stats!

*Example 32
* Reduced by *5.9%*
Was €340k on 7th July


Now €320k
[broken link removed]

*Example 33*
Reduced by *6%*
Was €420k on 3rd July (2nd in list)


Now €395k
[broken link removed]

*Example 34*
Reduced by *11.7%*
For the rich among us
Was €8.5m (4th in list)


Now €7.5m
[broken link removed]

*Example 35*
Reduced by *3.9%*
Was €640k


Now €615k (Sale agreed)
[broken link removed]
*
Example 36*
Reduced by *5.2%*
Was €485k (2nd in list)


Now €460k (sale agreed)
[broken link removed]


----------



## hmmm

I find the asking price drop stats interesting, I wish people who are not moderators would stop telling people what they can and cannot post on this thread.


----------



## Dannybouy

I belive that the profits on newbuilds are excessive that they could drop 40% and still sell at a profit. when builders have to reduce staff they could keep on the greatful poles and reduce their wage bill and make even more profits. Im a bull for developers but on buying I believe in the greater fool principal


----------



## bearishbull

hmmm said:


> I find the asking price drop stats interesting, I wish people who are not moderators would stop telling people what they can and cannot post on this thread.


Im just echoing the other 2 people who said post them all on another thread/website. Its fine having the odd few with drops in asking price that tell us something new about market but a person above was trying to get one big long post going by people quoting the previous list and adding them all into a mega post. All the posts regarding asking price drops have been in region of less than 10% , if you wanna see loads of similar drops from all over the city/country you can look up properties on myhome and google all day. If someone was to post about new build properties in Dublin being reduced by developer i think that would say a lot more then a 6% drop in asking price. Im not telling anyone what they can and can not post just that i and numerous other feel its pointless and annoying when its repeated excessively and adds nothing new to the thread.


----------



## liteweight

For what it's worth I agree with bearishbull! The OP suggested copying his post and adding your own price drops. The result I believe is simply a long boring post, to which, the moderators would possibly object. I've seen them ask people not to copy full posts when replying. It's difficult enough to keep up with posts on this thread without having to trawl through repetitive posts.


----------



## Savvy

Interesting.A couple of weeks ago when people were posting drops in asking prices there were people making statements like 'one swallow doesn't make a summer'. Now were been asked to only report bigger drops.
How long before it becomes, 'Only report drops in excess of 15% or 20%'
From 14% growth in the first 3 months to an expected 0% growth in the last three months is a very quick turn of events. A bit the like game against Cyprus last night it could all turn very bad.


----------



## Afuera

bearishbull said:


> Like this quote from Nick Leeson in todays SBP.
> 
> _While the IMF and the Economist have warned about how long the property market can continue at this pace, the property bulls quickly dismiss the findings as not taking into account Ireland’s unique conditions._
> 
> _They are also quick to point out that anyone who had taken this advice a year ago would have missed out on the capital appreciation since then. That is understandable but mortgages are taken out over far longer periods and this has to be taken into account._
> 
> http://tinyurl.co.uk/31g7


 
I liked this quote by Nick Leeson myself:

"Having assumed a few risky positions in my life, I would be very wary about investing in the Irish property market - it would represent significant high risk"


----------



## Afuera

Jeanne said:


> Given that house prices are dropping, fairly significantly in some cases, makes me wonder is it better to have high interest rates and low house prices or low interest rates and ridiculous house prices?
> 
> Is there a big difference? Which is better all around? Perhaps it's the better of two evils to have high interest rates and low house prices.


 
Good question!

I agree with you and think that high interest rates and low house prices would provide a more solid market since it would encourage people to save a large deposit before buying. High interest rates make it easier to save as well as making the mortgage payments more punishing. Buyers starting off at lower LTV ratings obviously have a better cushion should there be a fall in prices or a downturn.

Low interest rates do the exact oppposite and let people jump headfirst into debt with nothing more than a "Sure it'll be grand". Hence the enornmous increase in prices these last few years. If you take into consideration the transaction fees, furnishing and decoration costs etc., people with 100% mortages are already in negative equity when they buy. To be honest, I don't think that sort of environment can provide any kind of stability and even a mild slowdown could force it to collapse on itself.


----------



## Savvy

I think Mr Leeson's article was no more than a reprint of what has already been writen about the Irish property market. My God, most of it was taken  word for word from other reports.
I was expecting far more of his own thoughts.Saying that if I was considering investing, his article would have me seriously rethink where I was putting my money.


----------



## Remix

Good 1/2 page article in the Sunday Indo by Jane Suiter. Glad I bought it this morning  

Shows a few examples of significant house price drops around Dublin.

Covers the arguments for and against a soft landing. 

Also does a brief whirlwind tour of (mostly) deflating property bubbles around the world.


----------



## whizzbang

zac said:


> i would rather not count "not buying" category, there could be multiple reasons for them to be not buying, like maybe they cant afford to, more importantly they dint buy last year, 2 years ago, 3 years ago, or 5 years ago, and they have been proven wrong so far, why would somebody listen to their opinion, they have been constantly wrong so far.



let just call them the boys who cried wolf?


----------



## whathome

New builds.

*Prices falling in Adamstown (New Build)*

The Paddocks is the new release in Adamstown launched last week.
2 bedroom apartments started off last week at €305,000 but have now been dropped to €290,000.

Original launch details:
http://www.unison.ie/irish_independent/stories.php3?ca=303&si=1701582&issue_id=14736



> Prices start from €305,000 for a two-bed apartment


 
New Price: €290,000


----------



## wolfie

They say that the irish property and business boom started with packies save against Romania, I wonder will it end with a hammering by Cyprus


----------



## zac

whizzbang said:


> let just call them the boys who cried wolf?



 yea, probably better way to describe them


----------



## Maine

zac said:


> yea, probably better way to describe them


 
Again I come back to the most recent bubble that was burst - the Nasdaq. Note the "logical arguments" were dismissed for a few years however after peaking above 5000 it fell to 1600. Now the "logical arguers" missed the gains above say 3000 but if they had "long term" invested at that level (ie 3000 ) they would still be down 30% today - Nasdaq is currently at 2200ish.

The "long term" is a phrase that gets used to justify bubble asset purchasing but IMO we may not see April 2006 house prices for 20 years in nominal terms ignoring real terms.

The real economy in Ireland is probably less competitive today than at any time in the past. And as per my post above when the slowdown happens the govt will have to start raising taxes to make up for declining property taxes depressing things even further as they have got used to gorging themselves on boom receipts otherwise known as benchmarking. 

Remember post construction boom real private sector wages will fall whereas public wages will not. 

Some elements of the German workforce have averaged 0.3% wage increases for the past 6 years - how can businesses in Ireland compete after the past 6 years rises. Is it any wonder they are an export powerhouse.
Furthermore rising interest rates could actually drive the German economy up as they have so much savings - in any event rising interest rate sensitivity is far far lower there than in Ireland or Spain.


----------



## zac

whathome said:


> New builds.
> 
> *Prices falling in Adamstown (New Build)*
> 
> The Paddocks is the new release in Adamstown launched last week.
> 2 bedroom apartments started off last week at €305,000 but have now been dropped to €290,000.
> 
> Original launch details:
> http://www.unison.ie/irish_independent/stories.php3?ca=303&si=1701582&issue_id=14736
> 
> 
> 
> New Price: €290,000



dont think independent had correct price, they have sold about 250 units in 4 days, no 2 bed apartements left, only 1 or 2 sh*ty terraced 3 bed left, was there this morning, there were still lot of ppl there putting their name down for next phase and cancellations, doubt it if they need to drop price, they will prob increase it for next phase after seeing the demand, bast***s.

there is still plenty of money out there, this fourm's members need to work even harder to scare buyers.


----------



## zac

Maine said:


> Again I come back to the most recent bubble that was burst - the Nasdaq. Note the "logical arguments" were dismissed for a few years however after peaking above 5000 it fell to 1600. Now the "logical arguers" missed the gains above say 3000 but if they had "long term" invested at that level (ie 3000 ) they would still be down 30% today - Nasdaq is currently at 2200ish.
> 
> The "long term" is a phrase that gets used to justify bubble asset purchasing but IMO we may not see April 2006 house prices for 20 years in nominal terms ignoring real terms.
> 
> The real economy in Ireland is probably less competitive today than at any time in the past. And as per my post above when the slowdown happens the govt will have to start raising taxes to make up for declining property taxes depressing things even further as they have got used to gorging themselves on boom receipts otherwise known as benchmarking.
> 
> Remember post construction boom real private sector wages will fall whereas public wages will not.
> 
> Some elements of the German workforce have averaged 0.3% wage increases for the past 6 years - how can businesses in Ireland compete after the past 6 years rises. Is it any wonder they are an export powerhouse.
> Furthermore rising interest rates could actually drive the German economy up as they have so much savings - in any event rising interest rate sensitivity is far far lower there than in Ireland or Spain.



yea  heard all of this before, 

so what is your plan then to capitalize on this 20 yr price stagnation?


----------



## whathome

zac said:


> dont think independent had correct price


 
*New Build Prices falling in Adamstown*

The independent had the correct original price €305,000 as does today's Sunday Business Post. The DNG website and myhome.ie were both listing €305,000 last week.

Here's the old price (305,000) in today's sbpost, obviously written before the price drop!
[broken link removed]

They're now reduced to €290,000 on myhome as well.
[broken link removed]=


----------



## Maine

zac said:


> yea heard all of this before,
> 
> so what is your plan then to capitalize on this 20 yr price stagnation?


 
Its too easy to laugh at those who have not bought for good rational reasons.  It has been alot braver not to buy than to buy - few have not bought.  This resembles the value investors who ignored the dot com yet were ridiculed by the majority who followed analysts buy notes merrily.  Later of course it was found that some of these star analysts were privately describing these dot com stocks as crap and "do not touch them with a barge pole".  

This reminds me of the EAs who sold out this summer - great timing ...publicly talking up the market but privately taking the cash and walking.  Do you really think if they thought the market was really going to continue to boom they would have sold out.  This includes those EAs who flogged myhome.  Bill Gates did not flog his microsoft stock when he was building MS because he knew it was going to get bigger and there was no better place to put his money.  The EAs have taken the cash and have probably put it on deposit at the local bank.  

Time for more perspective from you  - some rational arguments as to whether we should buy or sell, invest or not and less patronising comments.

PS I first bought property back in 1998.


----------



## whathome

zac said:


> there is still plenty of money out there


 
...absolutely, but less of it is being spent on depreciating property.


----------



## zac

whathome said:


> The independent had the correct original price €305,000 as does today's Sunday Business Post.  The DNG website and myhome.ie were both listing €305,000 last week.
> 
> Here's the old price (305,000) in today's sbpost, obviously written before the price drop!
> [broken link removed]
> 
> They're now reduced to €290,000 on myhome as well.
> [broken link removed]=




jaysus i just read on sunday buss post that ppl were queuing there on tuesday night, before they opened the place on thursday...

is this true? 

guess builders dint see the queue before dropping the price, they must be reading this board instead.


----------



## whathome

Maine said:


> Time for more perspective from you - some rational arguments as to whether we should buy or sell, invest or not and less patronising comments.


 
Haven't you noticed Maine? Zac has been working *very *hard trying to count bears.


----------



## zac

Maine said:


> Its too easy to laugh at those who have not bought for good rational reasons.  It has been alot braver not to buy than to buy - few have not bought.  This resembles the value investors who ignored the dot com yet were ridiculed by the majority who followed analysts buy notes merrily.  Later of course it was found that some of these star analysts were privately describing these dot com stocks as crap and "do not touch them with a barge pole".
> 
> This reminds me of the EAs who sold out this summer - great timing ...publicly talking up the market but privately taking the cash and walking.  Do you really think if they thought the market was really going to continue to boom they would have sold out.  This includes those EAs who flogged myhome.  Bill Gates did not flog his microsoft stock when he was building MS because he knew it was going to get bigger and there was no better place to put his money.  The EAs have taken the cash and have probably put it on deposit at the local bank.
> 
> Time for more perspective from you  - some rational arguments as to whether we should buy or sell, invest or not and less patronising comments.
> 
> PS I first bought property back in 1998.



sorry dint mean to patronize, to be honest i havn't got a clue whether to buy or not in irish residential market, neither do those EAs i think. 
PS i do not own a house


----------



## bearishbull

zac said:


> sorry dint mean to patronize, to be honest i havn't got a clue whether to buy or not in irish residential market, neither do those EAs i think.
> PS i do not own a house


Zac, do you beleive houses are overvalued? You seem to be very cynical and patronising. Your on AAM for last two weeks and have posted 50 times and every post is on this thread, so given you are only interested in this thread you are either concerned about the direction of the market or your trying to wind people up.


----------



## conor_mc

zac said:


> sorry dint mean to patronize, to be honest i havn't got a clue whether to buy or not in irish residential market, neither do those EAs i think.
> PS i do not own a house


 
Whats the point in making such a big deal over whether someone is a bear or one of zac's "real bears" then? What is it to you?

In fairness, most of the bears have put forward rational arguments for their beliefs. You've just admitted you don't really have any belief, yet you continue to patronise and condescend towards those who do but haven't walked the walk??? Since you don't actually own property, I doubt you really understand what you are expecting of people so they can prove their credentials to someone who hasn't even the maturity to develop his own thoughts and opinions on the situation the country faces.

Why don't you come back with some well thought-out, rational arguments as to what the future may hold for the Irish property market. Until then, why not keep your immature cajones-comparison to yourself.


----------



## beattie

zac said:


> jaysus i just read on sunday buss post that ppl were queuing there on tuesday night, before they opened the place on thursday...
> 
> is this true?
> 
> guess builders dint see the queue before dropping the price, they must be reading this board instead.


 
I wonder if the builders are paying people to queue here...


----------



## whathome

From Today's Sunday Times Ireland:

*Prepare for a bang when the property bubble bursts*

http://business.timesonline.co.uk/article/0,,8214-2393385,00.html



> YOU know an asset bubble is just about stretched to its limit when the people who have made the most money by inflating it insist a “soft landing” is a sure thing.
> 
> How can a mere 1.5% price hike in Dublin property during the entire third quarter of this year be a “best result” when the previous two quarters reported cumulative price rises of 21.5%? Sounds more like a “thud” than a soft landing to me.


----------



## whathome

Reading the start of this thread gives the impression that both posters are either:

a) The same person faking a discussion
or
b) Sitting beside each other in an office.

http://www.askaboutmoney.com/showthread.php?t=37955

Both people brand new to AAM with responses flying back and forth, sometimes in the same minute and then the 8th post results in the magic EA phone number!

I wonder how much EA activity goes on in public forums.  The most pathetic was when one poster hyping a development got caught by replying to himself!!!


----------



## zac

bearishbull said:


> Zac, do you beleive houses are overvalued? You seem to be very cynical and patronising. Your on AAM for last two weeks and have posted 50 times and every post is on this thread, so given you are only interested in this thread you are either concerned about the direction of the market or your trying to wind people up.



bearishbull, yes I do believe houses are over valued here, that doesnt mean they cant get any more overvalue, market doesnt care about my belief or any one individuals'.

and yes i am cynical on extreme pessimism on this forum, which i personally feel does not reflect the true sentiment, in last couple of weeks i have only seen one or two posts about positives, so was just trying to balance things out. also cynical on those making predictions here and those who know exactly what is going to happen, only tried them to wind up not others.

theres some good information here, people who posts news links etc,  or those detectives who discover price drops, fair play to them, i like facts not a big fan of opinions, also cynical on the fact that negatives news appears here in jiffy, but positives one dont. no body mentioned PTSB index going up 1% in aug until few days after release, whereas evening hearld headline is apparently an exciting event.

i do care about commercial property though, funds i own making are doing well, and they have done me well so far, wont take long to dump them when trend change, but not based on anyones opinion.


----------



## Panzraam

Thats some good mischief making.


----------



## gearoidmm

Has the Q3 DAFT report been published anywhere yet?  I saw it mentioned that they were talking about it on Newstalk but I can't find it on the web.


----------



## gearoidmm

sandymount said:


> Interesting to see how prices have risen most in high value southside locations. The fact that most auctions have been a washout in September would leave me to question this data.
> 
> Also house prices in West Dublin are now in decline in real terms when inflation is taken into account.


 
This post was in reference to the DNG house price index.  All the estate agent's house price indices have to be taken with a large pinch of salt as their methodology for calculating house price rises is extremely suspect.  The only indices that are even remotely reputable are the DOE and ESRI indices.  Reporting the SF and DNG indices are fact is like quoting from brochures as fact.


----------



## beattie

whathome said:


> Reading the start of this thread gives the impression that both posters are either:
> 
> a) The same person faking a discussion
> or
> b) Sitting beside each other in an office.
> 
> http://www.askaboutmoney.com/showthread.php?t=37955
> 
> Both people brand new to AAM with responses flying back and forth, sometimes in the same minute and then the 8th post results in the magic EA phone number!
> 
> I wonder how much EA activity goes on in public forums. The most pathetic was when one poster hyping a development got caught by replying to himself!!!


 
Great find whathome. Definetely something fishy going on there. I see you rattled a few cages in there and was accused of scaremongering of prospective buyers, so I think we can take it that there is EA activity on that thread. Those people writing to each other need to devise a more plausible strategy


----------



## BigM

Well EA's are definitely worried - new launches not going out as aggressively as previously.
And why would any FTB buy now anyway? Chances are Cowen will do something FTB-friendly with SD (my bet is increase exemption to over 381k level at least, don't see him abolishing it entirely) so why buy a new-build now when you might be able to buy a SD-free 2nd hand in better location in the New Year?
Still won't help the investor-side of the starter-home market though.
Rental yields at high-end of the market at 2.6%? No thanks...

[broken link removed]


----------



## Maine

zac said:


> bearishbull, yes I do believe houses are over valued here, that doesnt mean they cant get any more overvalue, market doesnt care about my belief or any one individuals'.
> 
> and yes i am cynical on extreme pessimism on this forum, which i personally feel does not reflect the true sentiment, in last couple of weeks i have only seen one or two posts about positives, so was just trying to balance things out. also cynical on those making predictions here and those who know exactly what is going to happen, only tried them to wind up not others.
> 
> 
> 
> 
> If we look at this thread then it started in summer. There were almost no prices falls then. Yet a number of the contributors called it as they saw it. Lo and behold the media has almost did a backflip in september and rehashed most of what was on here. Look at the Sindo article today and it lists one fall listed here and some other hefty falls - up to 600,000 euro on a 3.3m property. That is a massive drop to anyone, it is unprecedented in the past couple of years.
> 
> Why would someone cut their price like that unless sentiment is dropping off. It amazes me in terms of scale and how rapid.
> 
> EAs do know where the market is going, that is why they sold. They know the market better than anyone and they took the cash and walked. That is worth more than a 1000 soundbites.
> 
> However agree that is not to say there is not a budget giveaway / a new cashback 1000 year mortgage deals that cannot give the market a few more quarters. As before IMO it will be 2007 Q3 / Q4 before we really start to see a change.
> 
> IMO if you are about to become an FTB there is *now* very little that you will lose by sitting out the market until Sept 07 when the picture will be clearer after SSIA has gone to bed.
Click to expand...


----------



## whizzbang

zac said:


> yea, probably better way to describe them



well we all know what happened in the end of that story don't we?


----------



## whizzbang

whathome said:


> Reading the start of this thread gives the impression that both posters are either:
> 
> a) The same person faking a discussion
> or
> b) Sitting beside each other in an office.
> 
> http://www.askaboutmoney.com/showthread.php?t=37955



Quality! it reads like an Ad from Newstalk! Just assume one is a man's voice and the other is a woman's!


----------



## Jeanne

whizzbang said:


> Quality! it reads like an Ad from Newstalk! Just assume one is a man's voice and the other is a woman's!


 
Yes, well spotted whathome. This board is probably swarning with EA's. Oh well, I  guess they've lots of time to spare nowadays. Waiting for the phone to ring is probably so terribly boring. Might as well mess about online and try (in vain) to drum up some business


----------



## sunrock

in the u.s.a.  house prices behave in a supply/demand commodity fashion
people are very mobile_big country_changing job _very fluid_easy to relocate
also are a much more insecure and have less welfare safety net so hardly walk in to an astronomical house price mortgage
in ireland what we have is a population who have been brainwashed into accepting ridiculously high house prices
all our soothsayers_banks,politicians,builders ,land owners,economic commentators,compliant media have cheerleadered the whole process of higher and still higher house prices
of course construction workers and the rest of the population  have been told and made to feel that this_boom was good for them and for ireland and anyway we deserved it_it was our turn
many thousands of course bought overpriced homes
easy to criticise these buyers as foolish  ,but the price paid is usually the maximum that the buyer for a particular property can afford
i mean if the bank will give a 100%mortgage ona property in a commuter  belt town and decide that a person with an average pay can borrow 400 0r 500k  should we be surprised that this is the price the estate agent  says the property is worth
it really is a disgrace this transfer of wealth from indebted mortgage holders to land owners and a lot of professionALS who were rich to begin with   . okay a bit of moral outrage/ala eam dunphy.ido appreciate you need greed to get things done
of course irish prices are going to be reduced/corrected
the form of correction _wellim not sure about
if there is a real recession  with high unemployment  _it will be very serious_.>50%imo
all the immigrants _most are economic migrants will leave_i mean they cant get dole_and im talking 1980s unemployment
most irish people wont be able to emigrate as easy as before
i mean there is a vast surplus of cheap labour to contend with in each country  why did so many come here 
probably most will stay here and get the gov to pay rent_the land lords will get the gov rent check all right
meanwhile there wont be much building for 5 to 10 years as not many can afford the now more realistic prices
in the uk house prices are also high_one of the main reason is there not building so much_a whole lot of people getting gov to pay their rent_so they get stuck in a welfare rut_they find that the jobs available  they pay much more than their rent allowance and dole 
i think this might be irelands future
of course its here already
im  envisioning a slowdown  and shakeout  with a lot of rich property owners   and a much increased underclass stuck in a rut 
as for industry and factories _very little_lots of cheap imports incl food_
but who cares about the country as long as you have feather bedded yourself and your family_
in time another boom will occur ....


----------



## 2nz

Hi guys,
Arguments taken on board, re a list of falling house prices and the disruption to this thread. Totally understand.
I have created a blog for this at: http://irishhousepricesfalling.blogspot.com/

I'll be back here regularly (keen reader of this thread for a while now) to find examples, and please feel free to add your examples to the blog.


----------



## Remix

Jeanne said:


> Yes, well spotted whathome. This board is probably swarning with EA's. Oh well, I guess they've lots of time to spare nowadays. Waiting for the phone to ring is probably so terribly boring. Might as well mess about online and try (in vain) to drum up some business


 
I was enjoying that thread until I attempted to access the third page. Then I was directed to a screen saying I did not have privileges to access. Just me or others as well ?


----------



## ajapale

whathome said:


> Reading the start of this thread gives the impression that both posters are either:
> 
> a) The same person faking a discussion
> or
> b) Sitting beside each other in an office.
> 
> http://www.askaboutmoney.com/showthread.php?t=37955
> 
> Both people brand new to AAM with responses flying back and forth, sometimes in the same minute and then the 8th post results in the magic EA phone number!
> 
> I wonder how much EA activity goes on in public forums.  The most pathetic was when one poster hyping a development got caught by replying to himself!!!



Hi Whathome,

Thanks for bringing this to our attention.  The thread has been moved away for consideration of the moderators/admininistrators.

Have you considered using the "report post" functionality? Its the triangular road sign with the exclaimation mark.

In the meantime please keep this thread on topic ie  *"Current public sentiment towards the housing market"*? And note that moderation decisions are not genearlly discussed.

Thanks,
aj


----------



## paddyd

whathome said:


> Reading the start of this thread gives the impression that both posters are either:
> 
> a) The same person faking a discussion
> or
> b) Sitting beside each other in an office.
> 
> http://www.askaboutmoney.com/showthread.php?t=37955
> 
> Both people brand new to AAM with responses flying back and forth, sometimes in the same minute and then the 8th post results in the magic EA phone number!
> 
> I wonder how much EA activity goes on in public forums. The most pathetic was when one poster hyping a development got caught by replying to himself!!!


 
I saw this at the wekend, and posted a reply this morning (as it happens I also lived around there for 4 years, and the airport noise from the nth/sth runway was terrible whenever they used that runway (high winds etc).

However, I've just been kicked out of the post, and I notice its no-where to be found at the moment. I guess its removed.

Also interesting to do a search on Volvichead's messages, ALL talking up different developments, around the city. ("go see their Marketing Suite, its excellent!", and so forth)

the place is full of EA's (although the tend to stay way from this thread).


----------



## arbus

I gave last time an example of the house price dropping from 435 to 380.
New record - todays asking price is 365 (70k =16% form the initial price!!!)
[broken link removed]=

from 19/09/2006
total houses in Bray and Greystones for sale increased from 124 to 149
houses with asking price <381                                 from 4 to 7
houses on the South <381 (except Talagh)                from 41 to 46


----------



## phoenix_n

2nz said:


> Hi guys,
> Arguments taken on board, re a list of falling house prices and the disruption to this thread. Totally understand.
> I have created a blog for this at: http://irishhousepricesfalling.blogspot.com/
> 
> I'll be back here regularly (keen reader of this thread for a while now) to find examples, and please feel free to add your examples to the blog.


 
Include a tab for supply so that this can be noted on a weekly basis. Use myhome for stats. The supply side is very important to monitor future prices.

e.g.
Week 9th Oct 2006. Phibs houses for sale Total 52


----------



## baby_tooth

wolfie said:


> They say that the irish property and business boom started with packies save against Romania, I wonder will it end with a hammering by Cyprus


 

there was actually a study done, think it was for a doctorate for yale or lse economics thesis where they were able to show an clear economic link between the fortune of the countires soccer team and the countries economy...i kid you not,

will try and find it somewhere in the attic, kept it for sheer madness.

englan - doing crap....
usa - always were crap.
Italy
germany  both improving - so is there economy.


----------



## Humdinger

I'm off to invest in the Macedonian and Cypriot stock exchanges then.
Lies, damn lies and statistical correlations !!!!


----------



## NewMan

Very little discussion about yesterdays Sunday Business Post on here. I thought a lot of posters where waiting eagerly for it.

How do people feel about the OECD report which painted a more positive picture than is portrayed here?


----------



## phoenix_n

NewMan said:


> Very little discussion about yesterdays Sunday Business Post on here. I thought a lot of posters where waiting eagerly for it.
> 
> How do people feel about the OECD report which painted a more positive picture than is portrayed here?


 
I read that report alright. I was puzzled how they based their argument on the fact that because of forecasted higher immigration levels that the risk of a crash was low. They failed to mention that these jobs were in construction and services and were based on the property boom.


----------



## whathome

NewMan said:


> How do people feel about the OECD report which painted a more positive picture than is portrayed here?


 
I didn't think it painted a more positive picture.  They said that a soft landing is a possibility but that Ireland is still hovering around the danger zone.

People probably didn't comment on it because it said nothing new.


----------



## SHARP

hmmm said:


> I find the asking price drop stats interesting, I wish people who are not moderators would stop telling people what they can and cannot post on this thread.


 
Competely agree!


----------



## bren2002

The price drop stats are very relevant to the discussion.


----------



## delboy159

Current public sentiment towards the housing market? 

- a vendor or EA (or both) who drop the price of a house are giving their sentiment to the current state of the market - by action not words!  By dropping the price their sentiment is that the market is weak.  

- also a house price drop also proves that buyers sentiment is changing (as they were not prepared to buy at the higher price).

Therefore, examples of price drops are highly relevant to a debate on public sentiment on the housing market.


----------



## Neffa

NewMan said:


> Very little discussion about yesterdays Sunday Business Post on here. I thought a lot of posters where waiting eagerly for it.
> 
> How do people feel about the OECD report which painted a more positive picture than is portrayed here?


 
I think the SBP article (I assume you mean Nick Leeson's) was little more than a re-hash of the points raised here. There was little new information.

However, I did think their US article was very unbalanced. Every other analyst is quoting the US housing market being in a fair degree of distress, yet the tone of most of their articles (even on Florida!) was that "prices are still going up, even though the market may be a little softer. Now is a great time to get in." Madness.


----------



## phoenix_n

Neffa said:


> I think the SBP article (I assume you mean Nick Leeson's) was little more than a re-hash of the points raised here. There was little new information.


 
Agree however for alot of people it was the first time that they were exposed to the harsh facts...lower yields,higher vacancy,longer lead time for sales,low auction clearance rates..


----------



## howstrange

http://www.askaboutmoney.com/showthread.php?t=38320

Things cant be that bad yet if this sort of thing is still happening!


----------



## FGM Doyle

Collapse of the Irish Housing Market and Steve Stauntons Ireland, Coincidence or related??


----------



## paddyd

phoenix_n said:


> Agree however for alot of people it was the first time that they were exposed to the harsh facts...lower yields,higher vacancy,longer lead time for sales,low auction clearance rates..


 

well, the SBP ran a good few articles, only one of which didn't feel a soft landing was on the cards; that being the one from Leeson, who admits in the article that his skepticism is based on being bitten in the UK in the 80's. Hardly 100% relevant. in the UK in the 80's, 2 things happened which imploded the market, neither of which is happening here:

- interest rates were 14.5 - 15.5%. In our celtic Tiger terms, thats 7 times the interest rate from last year, or 4 times the current. Yet everyone thought propery couldn't lose. Would you take a 100% mortgage at 15%? I doubt it.

- 120% mortgages were commonplace

when it busted, people we so indepted, some just handed their hse keys to their bank


----------



## colc1

Just looked at that thread €309,000 for a one bed you'd want to be nuts!  I assume couples are dying to give their money away because very few single people could afford that



howstrange said:


> http://www.askaboutmoney.com/showthread.php?t=38320
> 
> Things cant be that bad yet if this sort of thing is still happening!


----------



## whathome

howstrange said:


> http://www.askaboutmoney.com/showthread.php?t=38320
> 
> Things cant be that bad yet if this sort of thing is still happening!


 
Things aren't always as they seem. They were confused between 1 bed and 2 bed apartments and got a bit carried away with themselves.

Not to say that sort of thing isn't happening, but it certainly isn't happening in Clare Hall. The 1 beds did sell out on Saturday though


----------



## whathome

colc1 said:


> Just looked at that thread €309,000 for a one bed you'd want to be nuts!


 
That was for a 2 bed - I just confirmed with a phone call, the posters on that thread got confused, and over excited judging by the number of exclamations!!!!!


----------



## howstrange

whathome said:


> That was for a 2 bed - I just confirmed with a phone call, the posters on that thread got confused.



Is nuts! I reckon the 1 beds are selling out quicker is because affordability has decreased due to the higher interest rates! It just shows though that people are still doing whatever it takes to get on the property ladder regardless of current economic conditions! I think purchases like these are extremely risky with signs growing of the property bubble bursting.


----------



## redo

phoenix_n said:


> I read that report alright. I was puzzled how they based their argument on the fact that because of forecasted higher immigration levels that the risk of a crash was low. They failed to mention that these jobs were in construction and services and were based on the property boom.


Exactly.  Nearly every single argument against a property crash is based on the fact that;

The economy is bouyant - 25% is construction.
Migrant workers coming to Ireland - to build houses.
The demand for property is still high - 40% from investors.
Interest rates are still historically low - implying that.....


----------



## whathome

Neffa said:


> I think the SBP article (I assume you mean Nick Leeson's)


 
He was referreing to a different article on an OECD report.

Here is Nick Leeson's article:

*Irish property market living on borrowed time *
[broken link removed]



> Having assumed a few risky positions in my life, I would be very wary about investing in the Irish property market - it would represent significant high risk


That's coming from the man whose risk taking caused the collapse of Barings Bank in 1995.


----------



## ivuernis

I think many are calling the end of the Irish property mania too hastily. Yes, we have evidence of asking prices being lowered and a slow market, however, what we can not ascertain for certain just yet is if this is a fundamental change in sentiment or a temporary stand-off while we wait to see (a) how far more the ECB take the interest rate hikes and (b) what changes the government may take on stamp duty in the coming budget. 

If, and I'm postulating here, the ECB stop at between 3.5% and 4.0% (I think there is a good chance they will do this in 2007 whilst not discounting further rate hikes down the line in late 2007 onwards) and the government abolishes stamp duty for FTBs on new or secondhand houses upto 381k then I think there is fertile grounds for an upswing (abliet a minor one) in 2007. In such a scenario FTBs who may now be sitting on the fence in 2006 will come back to the market, thus re-invigorating prices up the chain. Gains will be small, in the low to mid single digits, but enough so that the oft hoped for "soft landing" will have been proclaimed to have arrived lulling most into a false sense of having dodged the bullet in Ireland (because don't forget people things are different here!)

The ECB, having initially reined in inflation (temporarily) due to current monetary policy coupled with a stable oil price floating around $60 barrel and a steady but not inflationary growth in the Eurozone will be forced at some stage to start ratcheting up rates again when (and it's just a matter of when and not if this happens) oil prices really start to go up, i.e. $100+ barrel. The Irish property market, having being lulled into the false dawn of a soft-landing and a belief that rates will not go much higher than 4.0% will suddenly be faced with another tightening cycle by the ECB but this time there will not be no escape route via SSIA money or further changes in stamp duty rates. Then the Irish property bubble will truly be put to the test. 

Just my current thinking on where this is all headed. Feel free to rip it to shreds or convince me otherwise but I think there may be a few more twists and turns yet which may delay the inevitable for another while.


----------



## onekeano

redo said:


> The demand for property is still high - 40% from investors.QUOTE]
> 
> Where does this come from? I'm an investor and have been back to around '97. I know lots of people who have been investing since around then. NOT ONE of them would be investing at todays prices and obviously lots have been cashing in over the last 12 months.
> 
> I can't / don't believe that 40% of units are being bought by investors - if that were the case rents would have dropped significantly over the past 12 months.
> 
> Can you please provide the relevant source for this statement?
> 
> Roy


----------



## Bedsit

ivuernis said:


> Just my current thinking on where this is all headed. Feel free to rip it to shreds or convince me otherwise but I think there may be a few more twists and turns yet which may delay the inevitable for another while.



However if investors decide that it is time to get out, and stop buying investment property, then we will have house completions in the 50K range. This will mean lower employment in the construction sector, which will in turn affect other dependent sectors. Also, a housing slow down in the US and a possible recession will have a bearing on jobs. If the jobs go then the immigrants will leave etc etc.

I think there are just too many variables in the equation and it is difficult to predict how quickly or slowly sentiment might change.


----------



## whathome

onekeano said:


> Can you please provide the relevant source for this statement?


 
I didn't make the original point but it's pretty clear in this sherry fitz report:[broken link removed]

Buyer Classification: 40% investors....see the pie chart.


----------



## MadPad

NewMan said:


> Very little discussion about yesterdays Sunday
> How do people feel about the OECD report which painted a more positive picture than is portrayed here?


 
People here are in a kind of a "negative feedback loop" which is just as silly as the "boom will go on forever" feedback loop that went on for the last few years in the real world. I suspect that as prices drop, sentiment here will change to stay even more negative that the real world.


----------



## redo

onekeano said:


> redo said:
> 
> 
> 
> The demand for property is still high - 40% from investors.QUOTE]
> 
> Where does this come from? I'm an investor and have been back to around '97. I know lots of people who have been investing since around then. NOT ONE of them would be investing at todays prices and obviously lots have been cashing in over the last 12 months.
> 
> I can't / don't believe that 40% of units are being bought by investors - if that were the case rents would have dropped significantly over the past 12 months.
> 
> Can you please provide the relevant source for this statement?
> 
> Roy
> 
> 
> 
> What I meant to convey was that 40% of all new builds in the first quarter were from investors.
Click to expand...


----------



## Duplex

That's the problem with the Irish housing market, risk is not being priced in.  Current valuations are based on the remotest of remote possibilities that the present extraordinary circumstances will continue in perpetuity.  We are in truth witnessing mania; pure unadulterated frothing at the mouth stuff, make no mistake about it.


----------



## mortimer33

whathome said:


> I didn't make the original point but it's pretty clear in this sherry fitz report:[broken link removed]
> 
> Buyer Classification: 40% investors....see the pie chart.


 
It also says that 30% of vendors were investors.


----------



## Art

whathome said:


> I didn't make the original point but it's pretty clear in this sherry fitz report:[broken link removed]
> 
> Buyer Classification: 40% investors....see the pie chart.


 
I am amused to see that this figure being quoted by Sherry Fitzgerald is deemed by the bears to be gospel wheres all of their upbeat statements are considered pure rubbish or simply untrue by those same bears.


----------



## redo

Art said:


> I am amused to see that this figure being quoted by Sherry Fitzgerald is deemed by the bears to be gospel wheres all of their upbeat statements are considered pure rubbish or simply untrue by those same bears.


Slight difference.  The figures from the 2006 Q1 season were statistics produced from sales.


----------



## Duplex

Irish property investors have a choice, they don't have to invest in Ireland. If investment prices stagnate (with negative rental yields) then it is reasonable to assume that Irish investors are probably likely to stop buying in the Irish market.   What happens to a market when 40% odd of the demand gets zapped?


----------



## Duplex

Art said:


> I am amused to see that this figure being quoted by Sherry Fitzgerald is deemed by the bears to be gospel wheres all of their upbeat statements are considered pure rubbish or simply untrue by those same bears.


 
Quote where figures from Sherry Fitz are questioned? Please.


----------



## phoenix_n

phoenix_n said:


> Phibsboro terrace price decreased from  to [broken link removed]
> 
> And all the kings horses and all the kings men.....


 
Now dropped to [broken link removed]

..couldn't put.....

(p.s. watch 9 st ignatius avenue fall from current [broken link removed] price)


----------



## Art

Duplex said:


> Quote where figures from Sherry Fitz are questioned? Please.


 


Maine said:


> Alot of the reductions seem to be sherry fitz - at little at odds with uber economist finnegan


 


redo said:


> There is a article in the current Irish Property Buyer which Marian Finnegan says that now is a good time to buy. Surely she has lost all credibility at this stage.


 


asdef said:


> *Have the property gurus really got it right?*
> http://www.unison.ie/irish_independent/stories.php3?ca=36&si=1702104&issue_id=14741
> 
> 
> And how much of that is centered on the construction industry?
> 
> 
> *cough* Really? From an article last year in the Indo, http://www.unison.ie/irish_independent/stories.php3?ca=303&si=1469805&issue_id=13008:
> 
> One more quote from today's article (by ESRI economist David Duffy):
> 
> No comment on that one...


----------



## whathome

Art said:


> I am amused to see that this figure being quoted by Sherry Fitzgerald is deemed by the bears to be gospel wheres all of their upbeat statements are considered pure rubbish or simply untrue by those same bears.


 
The numbers were never questioned, the upbeat statements were indeed pure rubbish. Nobody argued with the data, they argued with the ridiculous forward looking statements. What's wrong with that?

The discussion today was about data regarding buyer classification. Duplex asked you to show where the figures were questioned, we're still waiting.


----------



## conor_mc

Art said:


> I am amused to see that this figure being quoted by Sherry Fitzgerald is deemed by the bears to be gospel wheres all of their upbeat statements are considered pure rubbish or simply untrue by those same bears.


 
In fairness, what Sherry Fitz say they _think_ will happen and what their statistics say _has _happened are two different things.

The 40% statistic is interesting because SF used it to talk up the market, saying investor activity was strong. Bears used it to talk down the market, saying that this was speculative activity and was indicative of an imbalance in the market.

So the bears still disagree fundamentally with SF _opinion_, without necessarily disagreeing with their stats.


----------



## BigM

ivuernis said:


> Just my current thinking on where this is all headed.


 
I agree with ivuernis - there are still enough rabbits left in the hat to stave off a collapse in the near-term, but by Q4 2007/Q1 2008 I reckon not even Houdini could escape from the bursting bubble (apologies for mangled metaphors).

On another, related point: one crucial difference between Ireland and the US w.r.t. foreclosures is that it is very difficult for banks here to reposess family homes, given the Constitutional protection afforded to the family. (Investors are obviously a different story)


----------



## room305

BigM said:


> On another, related point: one crucial difference between Ireland and the US w.r.t. foreclosures is that it is very difficult for banks here to reposess family homes, given the Constitutional protection afforded to the family. (Investors are obviously a different story)



What if it is not the banks doing the foreclosures but the international hedge funds to which they have sold the mortgage debts?


----------



## darex

BigM said:


> On another, related point: one crucial difference between Ireland and the US w.r.t. foreclosures is that it is very difficult for banks here to reposess family homes, given the Constitutional protection afforded to the family. (Investors are obviously a different story)



Are you sure about this?. It dosen't make sense in one way because the bank has much less protection against people defaulting - and surely they must have some knid of protection against people defaulting in order to lend in the first place?

It does mean that if it is true that prices will have an extra stickiness that they wouldn't have in the US on the way down.


----------



## Duplex

BigM said:


> I agree with ivuernis - there are still enough rabbits left in the hat to stave off a collapse in the near-term, but by Q4 2007/Q1 2008 I reckon not even Houdini could escape from the bursting bubble (apologies for mangled metaphors).
> 
> On another, related point: one crucial difference between Ireland and the US w.r.t. foreclosures is that it is very difficult for banks here to reposess family homes, given the Constitutional protection afforded to the family. (Investors are obviously a different story)


 

I'd imagine that the buyers of mortgage backed securities issued in Ireland would be 'disturbed' to discover that they would be unable to liquidate their asset if the mortgagee were unable to pay up.  It would be interesting if a case went to court on this constitutional point where a repossession was sought by the mortgage holder . The court might allow repossession but not vacant possession i.e. allow the occupants remain as tenants of the mortgage holder.   I'd imagine that a ruling of that sort would cause mayhem in the Irish MBS market.


----------



## cjh

room305 said:


> What if it is not the banks doing the foreclosures but the international hedge funds to which they have sold the mortgage debts?


 


I imagine 'Constitutional Protection' is the same regardless of who's doing the foreclosing...?


----------



## whathome

cjh said:


> I imagine 'Constitutional Protection' is the same regardless of who's doing the foreclosing...?


 
I wonder would this put Irish family homes in a different risk classification when selling debt?


----------



## genki33

This notion that the constitution could be used in such cases is a complete red herring. The protection afforded the family has it's roots in the "Catholic ethos" of the original constitution writers. 
Has nothing to do with private property. The case wouldn't have a leg to stand on.


----------



## BigM

Duplex said:


> It would be interesting if a case went to court on this constitutional point where a repossession was sought by the mortgage holder.


 
It sure would! But you have to assume that any Credit Analysts worth their salt would have done the research on the Irish RMBS sector and would know that repossessions in Ireland are incredibly uncommon.

But the point is that the ultimate bondholders don't really come into the equation - the banks would have to repackage the debt (at higher levels)and call/redeem the existing bonds. So the big hedgefunds don't care - it's the Irish banks (and therefore Irish consumer) that will take the hit.


----------



## Duplex

whathome said:


> I wonder would this put Irish family homes in a different risk classification when selling debt?


 
If it were true it would cause the mother and father of credit crunches.  Secured lending would be impossible.


----------



## fatmanknows

Ain't no Lawyer but I don't believe the Family Home protection covers a home from repossession by any mortgage holder. I do believe it . covers the home from being used as security unbeknownst to one of the spouses. I also believe that the security on a family home would not be valid unless the mortgage holder proved that the mortgagees obtained independent legal advice before allowing a charge upon their home. 

In the years to come I think there will be many many unavoidable repossessions of homes - owner occupiers and investments alike.


----------



## conor_mc

genki33 said:


> This notion that the constitution could be used in such cases is a complete red herring. The protection afforded the family has it's roots in the "Catholic ethos" of the original constitution writers.
> Has nothing to do with private property. The case wouldn't have a leg to stand on.


 
You could also argue that under protection of the family "as the natural primary and fundamental unit group of Society", they do not actually need to _own_ a house, just have a dwelling to live in. I'd say that Rent Supplement and RAS would cover the states obligations as set down by the constitution.


----------



## BigM

fatmanknows said:


> Ain't no Lawyer but I don't believe the Family Home protection covers a home from repossession by any mortgage holder. I do believe it . covers the home from being used as security unbeknownst to one of the spouses. I also believe that the security on a family home would not be valid unless the mortgage holder proved that the mortgagees obtained independent legal advice before allowing a charge upon their home.
> 
> In the years to come I think there will be many many unavoidable repossessions of homes - owner occupiers and investments alike.


 
I'm not saying that banks can't repossess - of course they can, but they are incredibly reluctant to since there could be some kind of challenge through the Courts. They would much rather reorganise/restructure the mortgage than repossess the house.


----------



## Duplex

BigM said:


> It sure would! But you have to assume that any Credit Analysts worth their salt would have done the research on the Irish RMBS sector and would know that repossessions in Ireland are incredibly uncommon.
> 
> But the point is that the ultimate bondholders don't really come into the equation - the banks would have to repackage the debt (at higher levels)and call/redeem the existing bonds. So the big hedgefunds don't care - it's the Irish banks (and therefore Irish consumer) that will take the hit.


 

Am I reading too much between the lines here BigM; are you hinting that credit analysts may have 'gone easy' on risk weighting for Irish RMBS debt? not factoring in our cultural and constitutional abhorrence of being put off the land, so to speak.

BOI seem quite adamant that they'll turf you out if you don't come up with the juice, maybe its hot air. This issue could be dynamite. 
[broken link removed]


----------



## fatmanknows

A property ain't much of a security if it can't be realised without some mega challenge in Court. Our legal system is very similar to that of UK - and they repossesed left right and centre in the early ninties there. Unfortunately, we'll soon get to see with regularity how the system works here.


----------



## coinfused

Given our historical antipathy to evictions I wouldn't like to be PR person  for the bank that starts mass repossessions. I could see things getting very nasty in terms of civil unrest.


----------



## cjh

coinfused said:


> Given our historical antipathy to evictions I wouldn't like to be PR person for the bank that starts mass repossessions. I could see things getting very nasty in terms of civil unrest.


 

In this country? Given our historical apathy to everything I doubt it!


----------



## liteweight

fatmanknows said:


> Ain't no Lawyer but I don't believe the Family Home protection covers a home from repossession by any mortgage holder. I do believe it . covers the home from being used as security unbeknownst to one of the spouses. I also believe that the security on a family home would not be valid unless the mortgage holder proved that the mortgagees obtained independent legal advice before allowing a charge upon their home.
> 
> In the years to come I think there will be many many unavoidable repossessions of homes - owner occupiers and investments alike.



I believe you're right here. Everyone taking out a mortgage is warned that their home might be at risk. I'm not a lawyer either but I'm sure lenders don't state this on all documentation for the good of their health.

Nevertheless, the last time I discussed this with a solicitor, I was told that it takes about 2 years to actually repossess a family home and lenders prefer not to do it. Again, not for the good of their health, but because of the long, drawn out process!! Investment properties are much more clear cut.

If the market crashes here then there will be repossessions wholescale, I believe. When this happened in London it was catastrophic for many but as usual, good for some, who deliberately set out to buy houses that had been repossessed...held on to them for 10 years and made a killing.


----------



## BigM

Duplex said:


> Am I reading too much between the lines here BigM; are you hinting that credit analysts may have 'gone easy' on risk weighting for Irish RMBS debt?
> 
> BOI seem quite adamant that they'll turf you out if you don't come up with the juice, maybe its hot air. This issue could be dynamite.
> [broken link removed]


Not at all - some of my best friends are credit analysts!! Although sometimes I wonder if they actually do anything more than simply read Moody's and S&P reports.

And the link makes it clear that the banks prefer to restructure the loan rather than repossess. Of course, if the market tanks as much as some on this thread expect and people end up with 50% negative equity they might indeed opt for option (b) and head off to Oz/US...

(b) Repossession of a property may come about by voluntary agreement with the lender, through *abandonment of the property by the borrower* without notifying the lender, or by Court Order.


----------



## BigM

liteweight said:


> Nevertheless, the last time I discussed this with a solicitor, I was told that it takes about 2 years to actually repossess a family home and lenders prefer not to do it. Again, not for the good of their health, but because of the long, drawn out process!! Investment properties are much more clear cut.


 
Exactly my point - I've discussed this with several solicitors/barristers and they all reckon that banks would steer well clear if at all possible because of the timescales involved (not because of the bad PR - who likes banks anyway?).


----------



## Duplex

I think that if anyone thinks that an Irishman or woman will meekly be put out of their homes on the instructions of the agents of 'foreign interests' is either a foreigner or a very, very, very poor student of Irish history.   The depth of feeling, the historical resonance imagine it.


----------



## whathome

BigM said:


> Exactly my point - I've discussed this with several solicitors/barristers and they all reckon that banks would steer well clear if at all possible because of the timescales involved (not because of the bad PR - who likes banks anyway?).


 
A reluctance to foreclose would put bank earnings under even more pressure in a downturn. I wonder if short activity is building in Irish bank shares as the signs of a weakening property market are becoming more prevalent.


----------



## Neffa

paddyd said:


> well, the SBP ran a good few articles, only one of which didn't feel a soft landing was on the cards; that being the one from Leeson, who admits in the article that his skepticism is based on being bitten in the UK in the 80's. Hardly 100% relevant. in the UK in the 80's, 2 things happened which imploded the market, neither of which is happening here:
> 
> - interest rates were 14.5 - 15.5%. In our celtic Tiger terms, thats 7 times the interest rate from last year, or 4 times the current. Yet everyone thought propery couldn't lose. Would you take a 100% mortgage at 15%? I doubt it.
> 
> - 120% mortgages were commonplace
> 
> when it busted, people we so indepted, some just handed their hse keys to their bank


 
I hear both these arguments a lot in Ireland as part of "it's different here" pitches. I disagree with both of them.

On the first point, the absolute rate of interest is pretty irrelevant imho. It is all about affordability, not the absolute rate. Yes, UK rates were at 15% at the end of the crash period, but affordability rather than interest rates per se was the problem -affordability was going above 40% of net income. The prices themselves relative to income were lower than we have in Ireland today but because the IR's were so high, the net income percentage was high.

As many commentators have reported, we are now at the limit of affordability in Ireland, even though our base rate is 3.25%. So you could argue we are in a worse position, not a better one.

Second, 120% mortgages were certainly not readily available to everyday punters. 100% mortgages were but IO and other "exotic" forms of financing were not commonplace. BTL was also very rare. 

My recollection is that 100%+ mortgages were marketed after the crash so people could "buy" their negative equity and move out of their homes.


----------



## Debtwish

More evidence of higher rates to come next year.

Industrial production in Germany increasing.

http://www.bloomberg.com/apps/news?pid=20601009&sid=apt5l7KIlaF0&refer=bond

Will the media be warning homeowners?


----------



## liteweight

BigM said:


> Exactly my point - I've discussed this with several solicitors/barristers and they all reckon that banks would steer well clear if at all possible because of the timescales involved (not because of the bad PR - who likes banks anyway?).



I'm sure this attitude might change though if more and more stopped paying. In the main lenders prefer to negotiate...might let you pay interest only, or take a 'holiday' on payments until your finances stabilise. In the former case, they're making a profit on the interest anyway, and in the latter, they keep adding interest ,which lengthens the term of the loan. In either scenario they can't lose. If they have to repossess and it takes 2 years, presumably they are paying for the money they lent you in the interim period i.e. for the length of time it takes them to actually repossess the house! They get it all back when house is sold of course but I'm sure they'd prefer money in the coffers now rather than later!

Banks might have a real problem if too many stopped paying at the same time i.e. in a housing crash.


----------



## Duplex

whathome said:


> A reluctance to forclose would put bank earnings under even more pressure in a downturn.


 
If Irish banks and the government were faced with widespread 'civil disobedience' on the issue of repossession (you can imagine the head of stem such an issue could build up) it would cause financial caos; a liquidity crunch and who knows the collapse of the Irish banking system?.


----------



## BigM

whathome said:


> I wonder if short activity is building in Irish bank shares as the signs of a weakening property market are becoming more prevalent.


With their vast stockpiles of cash from Sale-Leasebacks they can afford to buy back shares if there's a significant move downwards...

of course they should be investing the money in the American Dream
[broken link removed]

"The most gargantuan feature, though, is the price tag of a cool $125 million (€98.5 million), and it’s not even the most expensive on offer - another mega-house in Aspen, Colorado, is now listed at $135 million (€106 million)"


----------



## zac

whathome said:


> A reluctance to foreclose would put bank earnings under even more pressure in a downturn. I wonder if short activity is building in Irish bank shares as the signs of a weakening property market are becoming more prevalent.



No its not.

BOI

Shares Short (prior month)[SIZE=-1]3[/SIZE]:19.75K
Shares Short (as of 12-Sep-06)[SIZE=-1]3[/SIZE]:11.82K

AIB

Shares Short (prior month)[SIZE=-1]3[/SIZE]:539.21K
Shares Short (as of 12-Sep-06)[SIZE=-1]3[/SIZE]:518.50K

Data from US, but indictive of trends, shorts covering actually, shares are near all time high, no fear in investors yet.
shorts on these stocks are tiny compare to float anyway.

Shorts near highs can fuel further rally when they cover. 

If there is any truth to the risk in irish banking sector these trends will reverse in no time.


----------



## room305

whathome said:


> A reluctance to foreclose would put bank earnings under even more pressure in a downturn. I wonder if short activity is building in Irish bank shares as the signs of a weakening property market are becoming more prevalent.



Some American hedge funds have begun shorting Anglo Irish if I remember correctly.


----------



## BigM

liteweight said:


> I'm sure this attitude might change though if more and more stopped paying. In the main lenders prefer to negotiate...might let you pay interest only, or take a 'holiday' on payments until your finances stabilise.


 
I've just had a terrible thought - rather than repossess houses, the banks will start offering negative amortisation mortgages!!


----------



## howstrange

Debtwish said:


> More evidence of higher rates to come next year.
> 
> Industrial production in Germany increasing.
> 
> http://www.bloomberg.com/apps/news?pid=20601009&sid=apt5l7KIlaF0&refer=bond
> 
> Will the media be warning homeowners?



If interest rates go to 5% we are in serious trouble!!


----------



## fatmanknows

liteweight said:


> .... In either scenario they can't lose. If they have to repossess and it takes 2 years, presumably they are paying for the money they lent you in the interim period i.e. for the length of time it takes them to actually repossess the house! They get it all back when house is sold of course but I'm sure they'd prefer money in the coffers now rather than later!


 
When we hit negative equity (esp. with all those 100%ers) there is no can't lose scerario. Banks will be swift to act imo....when the writing on the wall becomes a bit more legible


----------



## zac

Neffa said:


> I hear both these arguments a lot in Ireland as part of "it's different here" pitches. I disagree with both of them.
> 
> On the first point, the absolute rate of interest is pretty irrelevant imho. It is all about affordability, not the absolute rate. Yes, UK rates were at 15% at the end of the crash period, but affordability rather than interest rates per se was the problem -affordability was going above 40% of net income. The prices themselves relative to income were lower than we have in Ireland today but because the IR's were so high, the net income percentage was high.
> 
> As many commentators have reported, we are now at the limit of affordability in Ireland, even though our base rate is 3.25%. So you could argue we are in a worse position, not a better one.
> 
> Second, 120% mortgages were certainly not readily available to everyday punters. 100% mortgages were but IO and other "exotic" forms of financing were not commonplace. BTL was also very rare.
> 
> My recollection is that 100%+ mortgages were marketed after the crash so people could "buy" their negative equity and move out of their homes.



Indeed affordability is the KEY, not the interest rates, in worst case currently affordability is 40% net income(in dublin), and thats hitting levels seen in 80's, i saw the affordability graph the other day, so yes we are at the high historic limits, so either prices level off here or incomes rise for any further growth(or else we gonna owershoot historic highs in affordability), provided rates peak is less than 4%.

so if incomes stays constant, and rates go beyond 4, then we are in uncharted teritory, i.e very high risk. currently market doesnt think rates going beyond 4 in this cycle.


----------



## zac

room305 said:


> Some American hedge funds have begun shorting Anglo Irish if I remember correctly.



i took a lot of cr**p from couple of posters yesterday, now i am showing a lot of patience not to reply to this post.
sorry room305


----------



## Duplex

BigM said:


> With their vast stockpiles of cash from Sale-Leasebacks they can afford to buy back shares if there's a significant move downwards...
> 
> of course they should be investing the money in the American Dream
> [broken link removed]
> 
> "The most gargantuan feature, though, is the price tag of a cool $125 million (€98.5 million), and it’s not even the most expensive on offer - another mega-house in Aspen, Colorado, is now listed at $135 million (€106 million)"


 

Great offers available in Miami, maybe Diarmaid Condo (who wrote the SBP piece) would be interested. 

http://housingpanic.blogspot.com/2006/10/psst.html


----------



## conor_mc

zac said:


> i took a lot of cr**p from couple of posters yesterday, now i am showing a lot of patience not to reply to this post.
> sorry room305


 
You took crap for starting off a pi$$ing contest by trying to redefine the term "bear".

Go ahead and debate the issue. Holders of opposing opinions don't have to prove their bona-fides.

In other words, attack the message not the postman.


----------



## Remix

Not much compassion shown in this case.

Repossession proceedings against a cancer patient...

"They put nails in the windows of our home and changed the locks."

http://www.unison.ie/business/personalfinance/stories.php?ca=257&si=823658


----------



## zac

room305 said:


> Some American hedge funds have begun shorting Anglo Irish if I remember correctly.


room305 apologies if my previous message sounds like a personal attack, 

as i have shown in my previous message short interest has gone down in the last two months, plus if a hedge fund is shorting hardly means anything because someone else was buying those shares.


----------



## MadPad

Duplex said:


> I think that if anyone thinks that an Irishman or woman will meekly be put out of their homes on the instructions of the agents of 'foreign interests' is either a foreigner or a very, very, very poor student of Irish history. The depth of feeling, the historical resonance imagine it.


 
The past is a different country... Today, a lot of the new mortgage holders dont know their neighbours, they are in new developemnts. there is no really strong sense of community that will stop/shame other people from buying a reposessed property.... A government may be turfed out of office after the next election but that'll be about it, they can't reduce rates, its out of their control thankfully. o/w rates would be at 1%

*Thats if repossessions increase due to rate rises. There are no guarantees that that will happen to the level people are predicting/wishing for....*


----------



## Maine

zac said:


> i took a lot of cr**p from couple of posters yesterday, now i am showing a lot of patience not to reply to this post.
> sorry room305


 
The Anglo story is from either a Goodbodys or Davys roadshow in New York where hedge funds are obviously reading Fitch reports that say ireland private sector debt means the whole structure is prone to collapse.

See earlier in thread.  Also in Davy/ Goodbody/ NCB report this morning they say that BOI and AIB were underpeformers last week in whole 30 banks they cover.

I think irish banks will not show problems until very late as they will not be able to sell mortgage backed debt if foreign banks detect any smell from irish market.


----------



## room305

zac said:


> room305 apologies if my previous message sounds like a personal attack,
> 
> as i have shown in my previous message short interest has gone down in the last two months, plus if a hedge fund is shorting hardly means anything because someone else was buying those shares.



I never implied a hedge fund holding a short position on an Irish bank meant anything. Indeed it is not necessarily even a play on the Irish property market - Anglo Irish has exposure to property in the US and the UK as well. I was just responding to someone's query about short interest on Irish banks.

As has been pointed out by conor_mc, you took crap from people on the board because you turned up and started demanding to know who was a "real bear" without contributing anything of note to the thread.

By all means join in the debate but stop demanding posters "prove themselves" and avoid engaging in personal attacks. Apology very much accepted.


----------



## Maine

For what it is worth IMO shorting the bank stocks in Ireland is premature. IMO they will make alot of money for the next 12 months as per the Clarehall and as per ivernius above the party still has alot of punters drinking from the punchbowl. 

note i think a soft landing in the US may not be good for Ireland as US rates will stay highish, dollar stay strong and US stay importing from Germany where activity remains strong and hence Euro rates keep rising.

A hard landing in US will lead to weaker interest rates, weaker dollar and ECB stops raising rates as German export led growth stalls. China also slows and oil demand drops some and inflation goes back in the box.  this would help the property pyramid here even if some job losses as per ersi

Does these arguments hold ?


----------



## room305

Maine said:


> Does these arguments hold ?



Pretty much although low oil prices won't be enough to put inflation back in the box. Far too much liquidity in the system. Genuine credit tightening is needed on a global scale.

I doubt we'll get it though.


----------



## whizzbang

zac said:


> in worst case currently affordability is 40% net income(in dublin), and thats hitting levels seen in 80's,



Was that 40% of one or two people's incomes in the 80's? If it was one then there was at least the option of the second person taking up some work or at least doing nixers!


----------



## whathome

Maine said:


> A hard landing in US will lead to weaker interest rates, weaker dollar and ECB stops raising rates as German export led growth stalls. China also slows and oil demand drops some and inflation goes back in the box. this would help the property pyramid here even if some job losses as per ersi


 
We haven't felt the full effect of rising interest rates on the Irish property market yet and it's already in trouble. Interest rate at 3.5% is more than enough to kill the market IMO. Even if rates don't rise next year, falling prices will gather momentum from the effect of rate hikes this year. If the US has a hard landing, this will make the problem even worse here as a result of job losses. As you mentioned, a soft landing in the US will give ECB scope to raise rates further. There is no way out of this unless rates were to drop suddenly.


----------



## Panzraam

If they can sell this 1,200sq ft site for €2,000,000 (that €72,600,000 an acre) then there is life in the market yet. If!!

[broken link removed]


----------



## fatmanknows

Panzraam said:


> If they can sell this 1,200sq ft site for €2,000,000 (that €72,600,000 an acre) then there is life in the market yet. If!!
> 
> [broken link removed]


 

Sheer unadulerated greed. Whatever value it might represent for €2m with the mews built to the said design together with a fit out to match..........for a postage stamp patch up a laneway the vendor should take a good look in the mirror.

To the brigade out there who'll accuse me of willing a crash...........to bloody right I do.


----------



## blue01

Being watching this thread for a while.....as someone thinking about buying for a while....i've been looking into the affordable housing schemes..

what are peoples opinions on these?.....are they a good option in the current climate seeing as its near impossible as a FTB to get somewhere in dublin or should i hold off for a while?.....

do you think these kind of schemes would be hit badly in a downturn even though the prices at the moment are way below market value?


----------



## RiceCakes

blue01 said:


> Being watching this thread for a while.....as someone thinking about buying for a while....i've been looking into the affordable housing schemes..
> 
> what are peoples opinions on these?.....are they a good option in the current climate seeing as its near impossible as a FTB to get somewhere in dublin or should i hold off for a while?.....
> 
> do you think these kind of schemes would be hit badly in a downturn even though the prices at the moment are way below market value?



Given the timeframes apparently involved waiting for these and the sentiment here that by end Q4 07 that there will be blood in the water, am not so sure. 
That said, given the wait what do you have to loose?, by the time you are offered a place the market sentiment should be blindingly obvious by then to all and sundry and you won't have to take an offer with clawbacks if the open market offers something similar.


----------



## Jeanne

Great plug for AAM from Eddie Hobbs on his TV show tonight. Was everyone watching?

And on the subject of property, he sure wasn't recommending investing (directly) in property.


----------



## Duplex

What had Eddie got to say?


----------



## whathome

Duplex said:


> What had Eddie got to say?


 
Don't buy property directly as it doesn't "wash its face" and it will cost you money.  If you must buy property, invest in a property fund or a PLC.


----------



## Duplex

whathome said:


> Don't buy property directly as it doesn't "wash its face" and it will cost you money. If you must buy property, invest in a property fund or a PLC.


 

Bleedin doom monger


----------



## markyboy

Came across this on NPR today and thought it might be of interest

*ARMs Come Back to Bite Homeowners (Audio)*

October 9, 2006 ·  Many Americans bought homes in recent years with the help of adjustable-rate mortgages. But initial low monthly payments have skyrocketed because of high interest rates, and many borrowers are now struggling to pay back the loans. 

*Related NPR Stories* 
Sep. 8, 2006
Marketplace Report: Mortgage Rate Disparity
Sep. 1, 2006
Mortgage Rates Retreat as Housing Market Slows
May 30, 2006
Foreclosure Rates Rise Across the United States
May 23, 2006
Steps to Preventing Foreclosure
May 19, 2006
Fifty-Year Mortgage Offers Limited Advantages
March 28, 2006
Rising Interest Rates Pose Problem for Some Mortgage Holders


----------



## SLAPPY

Maybe a sign of things to come????

American homebuiders Kara Homes Inc. goes bankrupt after $250,000 home discounts fails to attract buyers for their homes.

http://www.bloomberg.com/apps/news?pid=20601087&sid=ajY74Kg6RI7o&refer=home


----------



## edo

US Cartoonists take on the housing market - enjoy:

http://www.cagle.com/news/HousingPricesFall/main.asp


Edo


----------



## teknostic

tumbleweeds blowing across this thread .........


----------



## Miles

I kinda miss the doom and gloom.....


----------



## whathome

Miles said:


> I kinda miss the doom and gloom.....


 
Just call an estate agent and ask "how's business?".


----------



## Duplex

Miles said:


> I kinda miss the doom and gloom.....


 

If you insist; 

The Wall Street Journal. “As the housing sector cools, the mortgage market faces an awkward question: Who takes the hit when loans go bad?”
“A generation ago, nobody asked. Banks made loans and suffered the consequences when borrowers didn’t pay. Today, a complex Wall Street machine buys and sells mortgages and packages the loans into securities that are diced and sliced and sold again to investors world-wide.”
“Players on Wall Street and beyond are starting to grapple over bad loans, especially in the market for borrowers with scuffed credit, so-called subprime customers. ‘In a rising market, even a bad loan is a good loan,’ said Nate Redleaf, a research analyst with a Beverly Hills, Calif., investment bank. ‘You could be sloppy and it didn’t matter. Now people really have to do their jobs. They have to be more vigilant.’


----------



## whathome

from rte.ie...
*Building slump 'could slash tax take'*

http://www.rte.ie/business/2006/1010/construction.html



> in a worst-case scenario, a severe downturn in the construction sector could lead to a €3 billion shortfall in tax revenue next year
> ...
> The report also says it is 'far from certain' that the Government could compensate for a building downturn by spending more on infrastructure


----------



## phoenix_n

phoenix_n said:
			
		

> Now 53 on sale.


----------



## EvilDoctorK

Interesting article on rte.ie/business from Davy Stockbroker's research

http://www.rte.ie/business/2006/1010/construction.html

"A 20% fall in both price and volume could affect tax receipts to the tune of €3 billion, leaving the Budget deficit close to the 3% of GDP EU limit."


----------



## phoenix_n

Slight drop but significant for price range and shows no interest at all in the property.

2 Georges Warf  to 355


----------



## SherryTrifle

Yeah i hear the asking prices on a house in Kansas and some in siberia have fallen  

I know it's highly relevant to sentiment in the Irish market so im posting it here. All the Irish people who think property is still  a good investment(rightly or wrongly) are so concerned with small price drops in America ( 1.2% drop nationwide YOY)


----------



## SherryTrifle

There are ABC number of houses for sale in Dublin XY!!!  I dont know how many were for sale at this month in previous years and how long each is on market but  I just had to post.
Bit of a slow week for property market news otherwise.


----------



## Miles

Any relation to SheffyFitz?


----------



## Remix

ECB has a green light to hike as they see fit..

EU ministers shrug off ECB fears as economy grows.



> Concern over rising euro zone interest rates took a back seat as finance ministers from the 25 European Union countries met on Tuesday buoyed by an economic upsurge that is rapidly replenishing public coffers.
> .
> .
> There was little sign of the concern several ministers used to express regularly just a few months ago about the risk of ECB rate rises thwarting a recovery in growth in the euro zone as the central bank worries more about inflation.
> 
> "I don't think anybody has bad dreams about that," Dutch Finance Minister Gerrit Zalm said.


 
Oh yeah Gerrit ? Might be a few in Ireland !


----------



## liteweight

madisona said:


> Guide prices fall.
> 
> http://www.cagle.com/news/HousingPricesFall/images/margulies.gif


----------



## thewatcher

SherryTrifle said:


> There are ABC number of houses for sale in Dublin XY!!! I dont know how many were for sale at this month in previous years and how long each is on market but I just had to post.
> Bit of a slow week for property market news otherwise.


 
Actually Daft has just breached the 20,000 mark,that's 6000 extra properties in 12 weeks,remember this :

http://www.askaboutmoney.com/showthread.php?t=35102

Have you anything constructive to say sherryTrifle ?


----------



## whathome

SherryTrifle said:


> There are ABC number


 
Amazing the number of people that get still get their letters and numbers mixed up.

Here's a website you might find useful SherryTrifle:
http://www.preschoolrainbow.org/counting-theme.htm

...it will help you with the basics.


----------



## whizzbang

thewatcher said:


> Actually Daft has just breached the 20,000 mark,that's 6000 extra properties in 12 weeks,remember this :
> 
> http://www.askaboutmoney.com/showthread.php?t=35102
> 
> Have you anything constructive to say sherryTrifle ?



my records show 12,529 properties for sale on Daft on the 14th July if that is of any interest? today its 19,168 by my records.

(Note there is a bug on the daft web site that gives two different numbers depending on  how you search!)


----------



## walk2dewater

whathome said:


> Amazing the number of people that get still get their letters and numbers mixed up.
> 
> Here's a website you might find useful SherryTrifle:
> http://www.preschoolrainbow.org/counting-theme.htm
> 
> ...it will help you with the basics.


 
Oh dear, what we gonna do with all those laid off estate agents...


----------



## thewatcher

whizzbang said:


> my records show 12,529 properties for sale on Daft on the 14th July if that is of any interest? today its 19,168 by my records.
> 
> (Note there is a bug on the daft web site that gives two different numbers depending on how you search!)


 
Well actually that's just the houses,with apartments and sites it's closer to 25,000 Daft search

Rather than the specific figures,what i am really getting at is the fact that inventory is still flooding on to the market,while existing inventory is going nowhere and this is only the secondhand market !.


----------



## phoenix_n

thewatcher said:


> Have you anything constructive to say sherryTrifle ?


 
watcher.....just report the poster. let the moderators deal with flamers.


----------



## whizzbang

thewatcher said:


> Well actually that's just the houses,with apartments and sites it's closer to 25,000 Daft search



yep, thats the bug right there (Try clicking the "20026 Houses For Sale" and see how many results you get  ), if you do a search fo all areas and all types you get around 19,000 

http://www.daft.ie/searchsale.daft?s[cc_id]=&search=1

It doens't really matter how you do it, you can definitly see stock growing! 

I'm glad I start tracking these back in June, the stats on supply are going to be very interesting over the next few quarters!


----------



## teknostic

phoenix_n said:


> watcher.....just report the poster. let the moderators deal with flamers.


 

this thread is like a police state. nobody is allowed speak against the bearish Gestapo.


----------



## CelloPoint

teknostic said:


> this thread is like a police state. nobody is allowed speak against the bearish Gestapo.



What was it you wanted to say again? Please, feel free to say what ever it was that is bugging you. You know you've lost the argument when you start dragging up the Gestapo, Hitler, etc.


----------



## ClubMan

Indeed.


----------



## phoenix_n

CelloPoint said:


> You know you've lost the argument when you start dragging up the Gestapo, Hitler, etc.


 
Godwin's Law

Edit
Goddamn it clubman you bet me to it.


----------



## thewatcher

ClubMan said:


> Indeed.


 
"It is considered poor form to arbitrarily raise such a comparison with the motive of ending the thread. There is a widely recognized codicil that any such ulterior-motive invocation of Godwin's Law (in the above sense) will be unsuccessful."


----------



## conor_mc

teknostic said:


> this thread is like a police state. nobody is allowed speak against the bearish Gestapo.


 
Going back to your original post... exactly what did it contribute to the debate?

This is what convinces me more and more that the bears are right, because I've yet to read of one decent argument from any bullish source that stands up to scrutiny. The majority are sound-bites that appeal to the masses, coupled with ridicule of the alternative point of view.

If you must speak up against the bears, I'd suggest you make an attempt to construct a valid argument rather than resorting to mimicking.


----------



## phoenix_n

Don't feed trolls.


----------



## Jason7

If you must speak up against the bears, I'd suggest you make an attempt to construct a valid argument rather than resorting to mimicking.[/quote]

Agree completly , the bottom line is the bulls do not have an argument (although it is fascinating listening to economist s from Sherry Fitz etc and their logical arguments!)

Do not know if this has been brought up before , but did any one here the ad for AIB mortgages on newstalk the last few mornings , 2K cash for taking a mortgage out with them !! GUBU


----------



## Raskolnikov

whathome said:


> Just call an estate agent and ask "how's business?".


I mentioned two particular areas that had 7-8 properties for sale all within eyeshot. I notice that there are now only 2-3 properties for sale in both areas. It's only anecdotal, but for all the properties up for sale a good deal of them are shifting.


----------



## Raskolnikov

conor_mc said:
			
		

> If you must speak up against the bears, I'd suggest you make an attempt to construct a valid argument rather than resorting to mimicking.


[/quote]
Speaking of bears, I'm reminded of an old joke about economists having predicted 7 of the last 2 recessions. I think it certainly rings through for a couple of bears here on a property crash.


----------



## whizzbang

€150,000 for a backgarden in Clonakilty?

http://www.swsproperty.com/index.cfm?page=viewPropertyBrochure&clientPolicyId=10767


Bargain!


----------



## paddyd

Jason7 said:


> Agree completly , the bottom line is the bulls do not have an argument (although it is fascinating listening to economist s from Sherry Fitz etc and their logical arguments!)


 
I guess it depends on where the line in the sand is between Bear and Bull. On this site, talk of price drops seems to indicate a Bear. 
Personally, I think we will have a soft landing, but i also think that would be a great result (so is that Bullish?). 

All this talk of price drops is fine, but its low enough percentages (c.5%). There is definitely enough fat on the market to trim off about 10% across the board, before anyone should get worried.

The crucial thing is if/when that 10% fat-trimming occurs, if 
1) prices actually accelerate again
2) if they rise slowing (perhaps in line with inflation)
3) they continue to drop

However, if a 500k house drops to 450k (10%), I think buyers will jump back into the market, so making option 2 the more likely.


----------



## whathome

Raskolnikov said:


> Speaking of bears, I'm reminded of an old joke about economists having predicted 7 of the last 2 recessions. I think it certainly rings through for a couple of bears here on a property crash.


 
In my case, I've known that Irish property was overvalued for the past few years but only turned bear in May this year.  I didn't think we would have a crash until I saw the buying frenzy in the spring and then realised how messed up the market was.  

I think property can be an excellent investment and have bought on that basis previously when yields were acceptable years ago. So not everyone here has been an eternal bear.


----------



## Debtwish

paddyd said:


> I guess it depends on where the line in the sand is
> However, if a 500k hse drops to 450k (10%), I think buyers will jump back into the market, so making option 2 the more likely.


 
The monthly repayments on a 30 year, 450K mortgage now cost MORE than on a 500K mortgage a year ago. And it's only going to get worse.

The buyers will jump back in only if they can afford to.


----------



## Afuera

paddyd said:


> The crucial thing is if/when that 10% fat-trimming occurs, if
> 1) prices actually accelerate again, or
> 2) if they rise slowing (perhaps in line with inflation).
> 3) OR indeed if they continue to drop
> 
> However, if a 500k hse drops to 450k (10%), I think buyers will jump back into the market, so making option 2 the more likely.



But what buyers will be jumping back into the market at that price?

450k is still well above what most FTBs would be able to afford. Investors will still not be able to get a great yield from this as they'd need to rent it out for about 2,200 p/m to cover the mortage at current rates.

I think that only leaves trader-uppers in the market for the example you gave. Trying to flog their previous property to a FTB will not be so easy considering that the builders are happily providing tens of thousands of stamp duty exempt houses every year.

I think that option 3 is more likely. Until a situation is reached whereby renting and buying becomes comparable once again.


----------



## paddyd

Debtwish said:


> The monthly repayments on a 30 year, 450K mortgage now cost MORE than on a 500K mortgage a year ago. And it's only going to get worse.
> 
> The buyers will jump back in only if they can afford to.


 
not the slant I was aiming for with the example ) but its a good response; Banks are not lending as much money as they were a few months back; and its naturally costing more with the rate rises.

Still I'm plugging for option 2 above


----------



## room305

Debtwish said:


> The buyers will jump back in only if they can afford to.



Even when/if they do it won't be enough to soak up all the excess property coming onstream and currently being offloaded by investors. Unless they plan on buying three or four houses a piece.


----------



## delboy159

I would not describe myself as a bull, but seeing as there have been so many requests for bullish arguements I'm going to try and construct some logical evidence for the purpose of lively debate!

The non fundamental perspective. 
Bears have been using the fundamentals as a logical reason for the current stalling of house prices in the market.  However, these same figures and arguements have been used for the last 5 years - and proved non fundamental.  The fact that prices increased in spite of these so called fundamental laws, prove that these factors have moved from fundamental to peripheral considerations in the market. Sentiment, govenment intervention and banking lending criteria are moving from peripheral to fundamental factors.  

Economic logic v's Practical logic
The common sense arguement that people will gain a better yield from a savings account today than they will from a buy to let is economically logical.  However, most practical/normal people do not have reserves of cash that will earn 3.5% or 3.75% on deposit, the only way they can generate wealth is by borrowing, buying, renting, investing in the asset (in the form of subsidising rent to meet mortgage) and thus accumulating wealth based on this formula.  In future the asset will be debt free - with significant value, but will also by an income stream.

Irish connection to owning property
This is one of the most overstated and misunderstood aspects of Irish property....  We do not have a connection to owning property - 50 years ago and even 25 years ago, actually, less than 15 years ago most 20 somethings were living at home or renting in a small room or flat.  That was the actual social culture at the time.  People were not salivating at the prospect of property ownership, they were content as they were.  The amount of people in their 40s/50s who tell me how they they remember when they bought in Leixlip or Blanch that they could have stretched to Rathmines or Clontarf - but it wasn't worth the hassle. 
This attitude I believe held up house price growth for many decades - very few people had their "investment property" and it was not uncommon for children to "live at home" until they got marrried.  That attitude does not back up the "love of land" perspective.

Government Intervention
Interest rates, supply and demand, new house builds, age demographics are economic statistics that underpin the housing market in a logical market.  However, the Irish government has had a massive influence on the develpoment of the market.  Stamp Duty is/was an unnecessary form of market control by the government - which can be ammended, eliminated or increased as the governemnt sees fit. This has had a massive psychological impact on how people buy.  a 2nd hand house and a new house, same size and spec. A FTB'r will pay more for the new house as there will be no Stamp.  They need cash for stamp, whereas the more expensive new build will be looked after by the mortgage.
Also the impending reduction/elimination of espects of stamp on the upcoming budget or next election has a lot of people "waiting and seeing about buying"

Irish negativity v's Irish optimism
It has been accepted that up to the late 80's/mid 90's many of Irelands more aggressive and most hungry for success were forced to emigrate.  Those who remained were conditioned by a Catholic society to knuckle down and get on with a formula driven life.  With the advent of 3rd level education being much more widespread in this country and the graduates not having to leave as jobs now exist - the nature of an Irish person is a lot more business like and hungry to succeed and achieve.  This has created a situation whereby people realise the long term benefit to property investment.  A whole generation were exposed to market economics, accumulation of wealth through investment as opposed to work, risk reward ratios etc.  

Try that for a start!


----------



## paddyd

Afuera said:


> I think that option 3 is more likely.


 
You and all the other 'sky is falling' people on this thread 




Afuera said:


> Until a situation is reached whereby renting and buying becomes comparable once again.


 
I think the key is negative equity. Not many will end up in that situation, even with price drops. FTB's will simply weather the storm by just not moving house. Negative equity only matters if you are trying to sell.

anyhoo, just realsied this thread is goin in circles for months; and I've said my piece (too many times perhaps!), so think I'll stick to just reading it from now on. my approach to the market to hold off for now/wait and see.


----------



## phoenix_n

Room305

Mind if i ask how your sale is going thru?


----------



## whathome

I think this is responsible for some of the froth in recent years!

http://www.richdad.com/

It's a huge seller, I wonder how many Irish people have been influenced.

I was looking in the business book section of Eason's recently and 50% of the shelf space was devoted to Property Ladder, Rich Dad, Buy to Let tips etc.


----------



## Bedsit

Greenspan: Housing market worst may be over (MSNBC)


----------



## room305

phoenix_n said:


> Room305
> 
> Mind if i ask how your sale is going thru?



Reasonably well surprisingly. Bottom of the market doesn't seem to have been as badly affected, although it is slow going. We have one bid in just short of the asking price and a neighbour informs us that he has a friend who is very interested.

If we get a bid in at the asking price we'll take it.


----------



## Afuera

paddyd said:


> You and all the other 'sky is falling' people on this thread



In fairness, I only came to this conclusion once the ECB started to move interest rates up last December and realised how highly leveraged the Irish economy is. I have yet to see a valid argument supporting either continuing rises or a soft-landing over the long term.



paddyd said:


> I think the key is negative equity. Not many will end up in that situation, even with price drops. FTB's will simply weather the storm by just not moving house. Negative equity only matters if you are trying to sell.


 
I disagree. Some FTBs may lose their jobs and have no way to weather the storm. Negative equity also affects peoples ability to borrow and equity release will seem like a sick joke!



paddyd said:


> anyhoo, just realsied this thread is goin in circles for months; and I've said my piece (too many times perhaps!), so think I'll stick to just reading it from now on. my approach to the market to hold off for now/wait and see.



There hasn't been that many interesting posts the last few weeks because like you, I think everyone is holding out to wait and see what's going on. I've a feeling next December will be a critical month into how things pan out as the ECB will have another meeting (they themselves are currently waiting on certain monetary indicators to come in), the new budget will be released and the various statistics that cover the previous months market activity will finally see the light of day.


----------



## fatmanknows

[broken link removed]

*No house price downturn just yet: AIB*

_"We expect to see a further moderation in the monthly rate of price increases over the next few months as the impact of deteriorating affordability is felt, However, the annual rate is still likely to be well into double figures by end year, "AIB said_



'We still expect to see double figures for the year.....Given that there has 20+% in first three months I should think so.


----------



## phoenix_n

room305 said:


> Reasonably well surprisingly. Bottom of the market doesn't seem to have been as badly affected, although it is slow going. We have one bid in just short of the asking price and a neighbour informs us that he has a friend who is very interested.
> 
> If we get a bid in at the asking price we'll take it.


 

Has the experience reinforced your 'bearish' outlook or have you become less bearish ?


----------



## thewatcher

fatmanknows said:


> [broken link removed]
> 
> *No house price downturn just yet: AIB*
> 
> _"We expect to see a further moderation in the monthly rate of price increases over the next few months as the impact of deteriorating affordability is felt, However, the annual rate is still likely to be well into double figures by end year, "AIB said_
> 
> 
> 
> 'We still expect to see double figures for the year.....Given that there has 20+% in first three months I should think so.


 
Exactly,talk about stating the bleedin obvious  

Nobody (bar maybe 1 lunatic) were predicting house prices would crash overnight,houses that went sale agreed in march/april would have only went through in june/july so we are maybe 2/3 months on the other side.
   We are in the sticky period where the standoff between buyers and sellers has begun(i'm actually surprised people have been able to come up with asking price drops so soon) there is some sales but this is probably down to EA's trying to keep business going by getting some clients to "revisit their expectations" and some buyers who have not researched the market but just secured mortgage approval and off they go to "get on the ladder".There's a lot of people sitting on the fence,if prices begin to fall why would they move.

We have climbed the mountain,at the moment we are sitting on the summit taking a breather,depending on what the budget brings we may walk across the summit and then slowly down the other side or we may lose our footing and go tumbling backwards down the mountain,either way were getting off this mountain cos it doesn't go any higher !.


----------



## Debtwish

> From AIB:
> 
> Data from the Irish Bankers Federation showing there was just a 1.8pc year-on-year increase in the total number of drawdowns in Q2 2006 compared to 19.3pc in Q1 this year indicates continued strength of investor interest, the bank said. *Loans to investors increased by 11.2pc year-on-year in Q2 2006 while those to first time buyers rose just 0.1pc and to movers fell 3.9pc, it said.*


 
Oh dear, so investors accounted for the lending growth in Q2. I'm a bear but things seem even worse than I could have imagined.


----------



## room305

phoenix_n said:


> Has the experience reinforced your 'bearish' outlook or have you become less bearish ?



Less bearish in the short term maybe since people are still spending silly money it is just the number of people doing so that seems to have dropped off.

Long term fundamentals have not changed and I expect an average of a 50% correction in real terms over the next few years.


----------



## phoenix_n

[broken link removed]


----------



## soma

whathome said:


> I think this is responsible for some of the froth in recent years!
> 
> http://www.richdad.com/
> 
> It's a huge seller, I wonder how many Irish people have been influenced.



I'm a fan of this book and I think it/RK gets unfair flak for causing people to act like lemmings. 

(a) In the book he does hold property up as an example of an income-generating asset BUT (and this is very important) he really does stress that people should stay away from he calls "junk properties". He defines a junk property as one where it's income (rent) does not cover it's costs. This describes virtually every BTL bought in the recent past - people are obviously not looking at cashflow.

(b) He was called a traitor/turncoat last year for writing an article called 'All booms bust' bascially saying that the US property bubble had gotten way out of hand.


----------



## baby_tooth

delboy i agree with alot of your statements, there is alot of truth if not all truth there.

the property market everywhere is not as fundamentally driven as other markets because alot of the partcipitants are not as market savvy or risk aware. Hence alot of the illogical actions. Couple in the fact that alot of market commentators and media are somewhat compromised is also a major issue



delboy159 said:


> I would not describe myself as a bull, but seeing as there have been so many requests for bullish arguements I'm going to try and construct some logical evidence for the purpose of lively debate!
> 
> The non fundamental perspective.
> Bears have been using the fundamentals as a logical reason for the current stalling of house prices in the market. However, these same figures and arguements have been used for the last 5 years - and proved non fundamental. The fact that prices increased in spite of these so called fundamental laws, prove that these factors have moved from fundamental to peripheral considerations in the market. Sentiment, govenment intervention and banking lending criteria are moving from peripheral to fundamental factors.
> 
> Economic logic v's Practical logic
> The common sense arguement that people will gain a better yield from a savings account today than they will from a buy to let is economically logical. However, most practical/normal people do not have reserves of cash that will earn 3.5% or 3.75% on deposit, the only way they can generate wealth is by borrowing, buying, renting, investing in the asset (in the form of subsidising rent to meet mortgage) and thus accumulating wealth based on this formula. In future the asset will be debt free - with significant value, but will also by an income stream.
> 
> Irish connection to owning property
> This is one of the most overstated and misunderstood aspects of Irish property.... We do not have a connection to owning property - 50 years ago and even 25 years ago, actually, less than 15 years ago most 20 somethings were living at home or renting in a small room or flat. That was the actual social culture at the time. People were not salivating at the prospect of property ownership, they were content as they were. The amount of people in their 40s/50s who tell me how they they remember when they bought in Leixlip or Blanch that they could have stretched to Rathmines or Clontarf - but it wasn't worth the hassle.
> This attitude I believe held up house price growth for many decades - very few people had their "investment property" and it was not uncommon for children to "live at home" until they got marrried. That attitude does not back up the "love of land" perspective.
> 
> Government Intervention
> Interest rates, supply and demand, new house builds, age demographics are economic statistics that underpin the housing market in a logical market. However, the Irish government has had a massive influence on the develpoment of the market. Stamp Duty is/was an unnecessary form of market control by the government - which can be ammended, eliminated or increased as the governemnt sees fit. This has had a massive psychological impact on how people buy. a 2nd hand house and a new house, same size and spec. A FTB'r will pay more for the new house as there will be no Stamp. They need cash for stamp, whereas the more expensive new build will be looked after by the mortgage.
> Also the impending reduction/elimination of espects of stamp on the upcoming budget or next election has a lot of people "waiting and seeing about buying"
> 
> Irish negativity v's Irish optimism
> It has been accepted that up to the late 80's/mid 90's many of Irelands more aggressive and most hungry for success were forced to emigrate. Those who remained were conditioned by a Catholic society to knuckle down and get on with a formula driven life. With the advent of 3rd level education being much more widespread in this country and the graduates not having to leave as jobs now exist - the nature of an Irish person is a lot more business like and hungry to succeed and achieve. This has created a situation whereby people realise the long term benefit to property investment. A whole generation were exposed to market economics, accumulation of wealth through investment as opposed to work, risk reward ratios etc.
> 
> Try that for a start!


 
Economic Point above.
Yes leveraging is a great way to increase the capability of maximising returns, just the same as spread betting. But with the simple maths involved to evolve this, geometric increases occur symetricaly with reciporical decreases...if it can go up in this manner, it can also go down in this manner.

Irish Connection:
Not as much a moot point as you suggest but also not as strong as some ppl make it out to be. Government / historic element as turned ppl away from  renting due to the lack of security of tenure, something that can be easily remidied and will be in the next few years as this class grows.

Government Intervention: a sneaky tax that we have all come to accept as being part and parcel of property costs. Could be construed in some may of being unconstitutional due to the fact that it infrings on a persons right to a home as laid down by our forefathers - but this is also a moot point.

The government are hopeless as moulding the market in the way that they wish to. As our wonderful leader is a book-keeper helped along by ex school teachers and law academics, its hard not to accept that they know nothing about the dead-weight losses due to taxes or the market inefficiences due to market impositions.
All stamp duty allows developers to du is push up the prices on the margin for newer (some would say, lower standard) housing further form urban centres....as more central sites have houses already upon them.


All in all, Irish property will soften, but won't crash in the near term. I am bearish on it, and have removed myself from carrying exposure in this area, ie: sold ppr and investment properties, increased cash flows doing this, Have also sold out of some of our property dependant market heros....

But Irish property is in a very weak place. Rates will rise to 4% by end 2007, 

An awful lot hinges on international developments. Oil and gas have slumped but will come back as always. US hasn't had 3 quiet hurrican seasons in a row!...Hedge funds like Ammarath won't put themselve into a position where they will be caught as short again. If Iran go nuclear which they are on the brink of doing, then oil will again sky rocket.

The dollar will fall against the euro, probably strengthing u.s. d.fi. in ireland but preventing future input. If China increase there fx rates, good will become more expensive, another thing very likely on the cards...

Job losses in this country are also another major worry, if one of the big firms goes, the ripple from it will cause alot of wet ankles.

Irish property is on a pinacle, a major change will decide on where it lands,
My money is on a downward movement, which is where is tottering towards. Anything major will decide how far down it lands when it decides to go


----------



## JayDub

Some fun time, match the prices below with the property

Price 1 - €560,000
Price 2 - €1,250,000


2 Bedroom Apartment, Dublin 1
http://tinyurl.co.uk/jkct


Block Of 10 Apartments, Leipzig, Germany
http://tinyurl.co.uk/zihy


----------



## ivuernis

JayDub said:


> 2 Bedroom Apartment, Dublin 1
> http://tinyurl.co.uk/jkct


 
It's the whole building, 2-bed basement apt + 3.5 floors of office space above it for sale.


----------



## bearishbull

I see this new site being advertised everywhere (radio , billboards etc) www.propertynews.com they seem to have all mason estates property on their site. more competition for recently purchased myhome.ie ! the other crowd funda have recently launched too and daft continues to expand.


----------



## miju

Raskolnikov said:


> I mentioned two particular areas that had 7-8 properties for sale all within eyeshot. I notice that there are now only 2-3 properties for sale in both areas. It's only anecdotal, but for all the properties up for sale a good deal of them are shifting.



would be interested to see where this is occuring , any links?


----------



## tententwenty

Moody's looks at the 100 largest property markets in the states, and predicts their tops and bottoms, with Florida taking the heaviest beating. I find it interesting that they call a 10% drop in price a "crash"...


----------



## BigM

tententwenty said:


> I find it interesting that they call a 10% drop in price a "crash"...


Yes - I always thought a 'crash' was defined as minimum 20-30% fall in prices (from the Economist predictions of a couple of years ago)?


----------



## 2nz

Here's a question for ye: what should the average house cost? 
I.e. based on the old banking rule (now defunct) that a bank would only give an individual a mortgage which is 2.5 times their salary (+1.5 times the spouse's salary).

By that calculation the average industrial wage of €30,576 only allows an average working couple to borrow €122k. In a market free of investors would this mean that the average house price should not be much more than this? 
Yes, the maths is a little basic, but what do you think a FAIR average price would be?


Note I have updated the price drops and have started to include Daft unit counts: http://irishhousepricesfalling.blogspot.com/

...cheers Whathome for the extra examples in the comments.


----------



## blindjustice

teknostic said:


> tumbleweeds blowing across this thread .........



 over three hundred and thirty thousand hits on the thread 



Afuera said:


> I think that only leaves trader-uppers in the market for the example you gave. Trying to flog their previous property to a FTB will not be so easy considering that the builders are happily providing tens of thousands of stamp duty exempt houses every year.




VERY important point. Builders can sell at lower prices without going into negative equity and can easily beat home owners if they were trying to sell the same house! STAMP DUTY! not even a fair fight!

http://www.rte.ie/business/2006/1010/ncc.html
another relevant link ^


----------



## Sidewinder

2nz said:


> Here's a question for ye: what should the average house cost?
> I.e. based on the old banking rule (now defunct) that a bank would only give an individual a mortgage which is 2.5 times their salary (+1.5 times the spouse's salary).
> 
> By that calculation the average industrial wage of €30,576 only allows an average working couple to borrow €122k. In a market free of investors would this mean that the average house price should not be much more than this?
> Yes, the maths is a little basic, but what do you think a FAIR average price would be?



Another old rule-of-thumb was that the price should be around 125X the monthly rental income. That would make my current apartment (3-bed city centre maisonette) worth about €120K if I wanted to buy it from the landlord. At the moment there's another unit in the block, same as mine except doesn't have a parking space which mine does, up for sale
....at €440K...

Now, you could argue that most couples these days have two incomes (the bull argument is that this justifies prices doubling) or that interest rates are still historically very low, but can anyone explain to me where the extra €320K on the value of these units is coming from?


----------



## BigM

Sidewinder said:


> but can anyone explain to me where the extra €320K on the value of these units is coming from?


Weren't you listening? It's the new paradigm!!


----------



## Fergal

The latest analysis from Bank of Ireland economist Dr Dan McLaughlin 

http://www.rte.ie/business/2006/1011/economy.html

This is a bullish argument that I made last month on this thread. Rental income from Irish foreign investment is boosting our GDP. This may help to answer the question about why Irish house prices are so much higher than Lipzeig.

I also predicted that house price inflation would, in the next year or two, decrease to normal levels around that of wage inflation. It would seem that no further increases will occur in 2006 with a last jump yet to come in 2007 (That 500K per month per SSIA couple is now available to pay off interest rate increases and a bit more).


----------



## bmclough

Was 595,000

[broken link removed]=

Now 560,000
http://www.daft.ie/searchsale.daft?search=Search+%BB&s[cc_id]=ct1&s[a_id][0]=pc8&s[a_id][1]=pc16&s[mnb]=4&s[mxb]=&s[mnp]=&s[mxp]=650000&s[pt_id]=&s[search_type]=sale&s[refreshmap]=1&limit=10&id=147119

Nearly 10%


And when we were looking around 2 months ago we got a brochure for this place at 610k, so this is the second drop.


----------



## Neffa

Fergal said:


> http://www.rte.ie/business/2006/1011/economy.html
> 
> This is a bullish argument that I made last month on this thread. Rental income from Irish foreign investment is boosting our GDP. This may help to answer the question about why Irish house prices are so much higher than Lipzeig.


 
 

You're kidding, right? I think you'll find that Germany has a very healthy trading position (a surplus, unlike Ireland) with the rest of the world and has a vast foreign income stream. Last time I was in the States or the UK, I saw a lot of BMW's, Mercedes + large quantities of German machine tools power factories globally. We've got property income, that's about it.


----------



## Afuera

Fergal said:


> The latest analysis from Bank of Ireland economist Dr Dan McLaughlin
> 
> http://www.rte.ie/business/2006/1011/economy.html
> 
> This is a bullish argument that I made last month on this thread. Rental income from Irish foreign investment is boosting our GDP. This may help to answer the question about why Irish house prices are so much higher than Lipzeig.



And why don't you factor in all the money being earned in Ireland and then sent home to Eastern Europe then as well while you're at it?

His predictions of inflation at 3.9% in Ireland (almost twice the recommended rate by the ECB) aren't exactly going to encourage them to go easy on increasing their rates further.


----------



## Guest126

Afuera said:


> His predictions of inflation at 3.9% in Ireland (almost twice the recommended rate by the ECB) aren't exactly going to encourage them to go easy on increasing their rates further.


 
I very much doubt whether the ECB even notice the Irish inflation rate when assessing the level of inflation for Eurozone, we're pretty tiny!


----------



## Fergal

Neffa said:


> You're kidding, right? I think you'll find that Germany has a very healthy trading position (a surplus, unlike Ireland) with the rest of the world and has a vast foreign income stream. Last time I was in the States or the UK, I saw a lot of BMW's, Mercedes + large quantities of German machine tools power factories globally. We've got property income, that's about it.


 
No I'm not kidding. Germany: 15% unemployment, high tax, social welfare state.  Manufacturing not yet out sourced to lost cost economies. These are factors bearing on the value of property in Germany.  But I agree that Germany may well recover and its prospects seem to be improving.As for &quot;We've got property income, that's about it&quot;, not exactly in-depth analysis.  My original point that Irish overseas investment is making a substantial return still stands.


----------



## delboy159

Do people think the potential rate change from NIB will 
a) spark a bit of a price war 
b) fuel more silly borrowing - and thus improve sentiment?

From what little I read in the paper the details are - 
rate - .6% above ECB
LTV of less than 80%
must switch current account to NIB


----------



## Afuera

CapitalCCC said:


> I very much doubt whether the ECB even notice the Irish inflation rate when assessing the level of inflation for Eurozone, we're pretty tiny!



True. Although, I think it gives us zero scope for complaining about rising rates if our inflation is so out of control.


----------



## Fergal

Afuera said:


> And why don't you factor in all the money being earned in Ireland and then sent home to Eastern Europe then as well while you're at it?
> 
> His predictions of inflation at 3.9% in Ireland (almost twice the recommended rate by the ECB) aren't exactly going to encourage them to go easy on increasing their rates further.


 
In response to Point 1: Open market economies work best.  Unfortunately for the Polish, they have come here to earn cash to buy at home.  But by the time they save up enough cash, prices in Poland are likely to have substantially increased as a result of foreign investment. 
In response to Point 2: You can't argue it both ways.  ECB are not going to vary the rates according to the Irish inflation.


----------



## Afuera

Fergal said:


> My original point that Irish overseas investment is making a substantial return still stands.



Have you got any figures to back this up?


----------



## Fergal

Afuera said:


> Have you got any figures to back this up?


 
That's where the report from a real economist like Dan McLoughlin comes in!  Of course I don't have figures but based on the amount invested, I had expected it to be very substantial.


----------



## Afuera

Fergal said:


> In response to Point 1: Open market economies work best.  Unfortunately for the Polish, they have come here to earn cash to buy at home.  But by the time they save up enough cash, prices in Poland are likely to have substantially increased as a result of foreign investment.


I'm not talking about earning cash in Ireland so they can buy property at home. I'm talking about the huge amount of cash that is flowing out of Ireland annually to support families back in Eastern European countries, otherwise known as remittances.



Fergal said:


> In response to Point 2: You can't argue it both ways.  ECB are not going to vary the rates according to the Irish inflation.


No I wasn't arguing that the ECB was going to set their interest rates according to the Irish needs. They haven't been doing this up until now so I don't think that's going to change.
I was mearly pointing out that Ireland will have absolutely no argument to present the ECB should they decide to continue to raise interest rates.


----------



## Calina

Fergal said:


> No I'm not kidding. Germany: 15% unemployment, high tax, social welfare state.  Manufacturing not yet out sourced to lost cost economies. These are factors bearing on the value of property in Germany.  But I agree that Germany may well recover and its prospects seem to be improving.As for &quot;We've got property income, that's about it&quot;, not exactly in-depth analysis.  My original point that Irish overseas investment is making a substantial return still stands.



Interestingly enough, if you say to anyone that the German and French economies are healthier than the Irish economy, you get back unemployment. Thing is, unemployment in France is ca 9% and falling and in Germany it's ca 10% and falling. Both Germany and France have massive issues with consumer confidence, something which currently isn't an issue here. 

We've got a feel good factor at the moment because we're borrowing heaps of money and spending it. Unfortunately, that money *has* to be paid back and you know what? Those wonderful economies of the UK, the US and Ireland - you know, the posterboy economies for more or less untramelled capitalism - are heavily endebted, and they are not even making enough money through trade to be able to pay them back. We have a falling trade surplus. Both the US and the UK have growing trade deficits even accounting for services and knowledge exports. We all have rising debt levels. The US is showing serious signs of a housing bubble. We appear to be also. The UK is currently showing a slight rise in property prices but it's not all that huge from what I can remember. 

So while people can bury their head in the sand and say that we've got a better economy than they have in France and Germany, that situation will not last for long.

Irish property prices bear little or no relation to any of the economic fundamentals in this country except that money supply increased drastically due to low interest rates. 

Property prices in Germany are relatively lower because renting is not such a big deal there, this whole "rent is only dead money" doesn't make any waves there, and security of tenure is quite a lot better. If I lived in Germany I'd be very happy to rent. People in Germany like to make a long buck. People in Ireland like to make a quick buck. We wouldn't have half the BTL brigade in this country if it weren't for cheap money and few obligations on landlords.


----------



## dontaskme

Fergal said:


> No I'm not kidding. Germany: 15% unemployment, high tax, social welfare state. Manufacturing not yet out sourced to lost cost economies. These are factors bearing on the value of property in Germany. But I agree that Germany may well recover and its prospects seem to be improving.As for &quot;We've got property income, that's about it&quot;, not exactly in-depth analysis. My original point that Irish overseas investment is making a substantial return still stands.


 
German unemployment is nearer to 11% than 15%.

Manufacturing - EADS are announcing job cuts and Benq (formerly Siemens mobile phones) declared bankruptcy and Siemens phone networks division is being split off on a joint venture with Nokia.

Also taxes are higher in Germany so people working in Germany don't have the same amount of cash to service a mortgage.

As for Irish overseas investment, Quinn Plastics are planning to open a manufacturing plant in Germany in 2008, hopefully it works out well for them.  http://www.rte.ie/business/2005/1114/quinn.html


----------



## Duplex

But are Irish investors earning big bucks from their foreign investments?
What locations are netting high rental yields. Not Spain, Hungary, Bulgaria, Cape Verde, Florida or France not even the UK. In fact I wouldn't be surprised if these 'investments' were drawing money out of that Irish economy as rental incomes don't match finance, servicing and management costs.


----------



## whathome

Fergal said:


> The latest analysis from Bank of Ireland economist Dr Dan McLaughlin
> 
> http://www.rte.ie/business/2006/1011/economy.html
> 
> This is a bullish argument that I made last month on this thread. Rental income from Irish foreign investment is boosting our GDP.


 
He didn't mention rental income! 

Announcement from CRH today:
[broken link removed]


----------



## fatmanknows

Hearing very credible reports of people (some through their brokers) seeking a freezing or moratorium on their present repayments/interest. I kid you not. Unsurprisingly I'm told the Banks have been accomodating these requests. Advice was that June rate hike has kicked in, Aug rate hike about to kick in, October rate hike will take another couple of months to kick in. Decembers rate hike and those after still awaits. All told there's a lot of kicking ahead.


----------



## Duplex

This net rental yield issue on foreign investment property is important.  It's impossible to find verifiable data on net yields in many/any overseas markets.  Call me cynical but if yields were good the information would be all over the Internet?  In Spain for instance it seems that 10-12 weeks occupancy a year is considered good. What that means in net yield terms is anyone's guess.   


[broken link removed]


----------



## conor_mc

> He says the pace of employment growth continues to surprise, with the service sector replacing construction as the main engine of jobs growth.


 
Am I correct in saying that the service sector is not, in general, an exporting sector. It covers transport, food, banking, retailing etc.

So does that mean that our three largest sectors of employment (Services, Construction and Public) contribute almost nothing to exports?


----------



## phoenix_n

Afuera said:


> Have you got any figures to back this up?


http://www.finfacts.com/irelandbusin...10007551.shtml


----------



## dontaskme

conor_mc said:


> Am I correct in saying that the service sector is not, in general, an exporting sector. It covers transport, food, banking, retailing etc.
> 
> So does that mean that our three largest sectors of employment (Services, Construction and Public) contribute almost nothing to exports?


no, gambling, tourism (invisible export) and U2 and Enya are all services that involve money from abroad coming to Ireland.


----------



## whizzbang

conor_mc said:


> Am I correct in saying that the service sector is not, in general, an exporting sector. It covers transport, food, banking, retailing etc.
> 
> So does that mean that our three largest sectors of employment (Services, Construction and Public) contribute almost nothing to exports?



some services are exporters for example call centers, consultancy,  etc, they are not all servicing the Irish economy.  I'm not sure what % of service organisations are exporters though.


----------



## dontaskme

phoenix_n said:


> http://www.finfacts.com/irelandbusin...10007551.shtml


 
Well, that money is tied up in the fund for something like ten years. The 20% gains are only on paper as yet. And there is an anti-speculative tax in Germany that punishes owners who try to sell within ten years or so.


----------



## Duplex

phoenix_n said:


> http://www.finfacts.com/irelandbusin...10007551.shtml


 

I suppose when someone decides its a good buy the other party has to think its a good time to sell.  

[broken link removed]


----------



## Howitzer

fatmanknows said:


> Hearing very credible reports of people (some through their brokers) seeking a freezing or moratorium on their present repayments/interest. I kid you not. Unsurprisingly I'm told the Banks have been accomodating these requests.


 
This is known, rather pleasantly, as a repayments holiday. In the rest of the world it's known as a Negative Amortization mortgage. It's not known as such here as that specific type of mortgage is not allowed by the central bank.


----------



## conor_mc

dontaskme said:


> no, gambling, tourism (invisible export) and U2 and Enya are all services that involve money from abroad coming to Ireland.


 
I recognise that a portion of the service sector does in fact export, but I would've thought that the majority of it is non-exporting? I'm open to correction, it was just a rough guess....


----------



## phoenix_n

dontaskme said:


> Well, that money is tied up in the fund for something like ten years. The 20% gains are only on paper as yet. And there is an anti-speculative tax in Germany that punishes owners who try to sell within ten years or so.


 
As regards your tax question look into this [broken link removed]

As regards 10 years tied up funds, and 20% on paper..........Alternative 3.75 northern rock ?


----------



## fatmanknows

dontaskme said:


> Well, that money is tied up in the fund for something like ten years. The 20% gains are only on paper as yet. And there is an anti-speculative tax in Germany that punishes owners who try to sell within ten years or so.


 
I'd be taking that 20% with a large pinch of salt. Wishful current valuations place upon their portfolio by themselves I imagine. All Good PR when you wont have to verify anything.Personally had a look (and passed on) at some of the stuff they bought whilst I was over there.


----------



## phoenix_n

fatmanknows said:


> I'd be taking that 20% with a large pinch of salt. Wishful current valuations place upon their portfolio by themselves I imagine. All Good PR when you wont have to verify anything.Personally had a look (and passed on) at some of the stuff they bought whilst I was over there.


 
Didn't know you were in the market for multi-million dollar shopping centres. ?


----------



## Afuera

phoenix_n said:


> http://www.finfacts.com/irelandbusin...10007551.shtml



I was looking more for something that showed what the actual level of money flowing into the country is due to Irish overseas investments.

The link just shows that 160 investors have a syndicate to invest in Germany. While the returns look good from the marketing blurb how much of this has or will come back to Ireland?


----------



## fatmanknows

phoenix_n said:


> Didn't know you were in the market for multi-million dollar shopping centres. ?


 
Assuming you were'nt being sarcastic, Multimillion Dollar S/C's No , But Retailing Warehousing (in particular) and Residential Blocks, Yes. Private syndicate.


----------



## Maine

100 million investment in German commercial / residential property.
10 million equity, 90million of bank debt.

German property value rises to 102 million, leverage delivers the 20% on the 10 million. no mystery and easy for dan to say. He could have claimed 104m and a 40% gain but that would have seen too much. % Gain can be recorded on the equity ...not the total investment.

It is good for Dan to say foreign investments are booming as BOI will get to lend to the next wave of investment 

Note alot of the 10 million equity is already remortgage debt from Irish property. So BOI get a slice of this too plus a slice of the 90 million.

Alot of this could be called hedge fund....small equity, massive leverage etc however the Irish play mainly in the property arena...always a winner.


----------



## michaelm

delboy159 said:


> . . From what little I read in the paper the details are -
> rate - .6% above ECB . .


Which Paper?  I can't see mention of an ECB + .6% tracker on the NIB website.


----------



## Remix

You can read about it here:

http://www.finfacts.com/irelandbusinessnews/publish/article_10007576.shtml


----------



## michaelm

Thanks Remix.


----------



## Remix

Has this been posted before ?

It's similiar to 2NZ's brand new http://irishhousepricesfalling.blogspot.com/

Except in America (Salute & God bless 'em  ) they allow their citizens the freedom to access previous sales price data.

http://flippersintrouble.blogspot.com/


----------



## Gwynston

Problems with house price sale in UK:
http://news.bbc.co.uk/1/hi/scotland/north_east/6039782.stm


> A woman is paying two mortgages after refusing to move house while she searches for her missing pet cat.


----------



## phoenix_n

fatmanknows said:


> Assuming you were'nt being sarcastic, Multimillion Dollar S/C's No , But Retailing Warehousing (in particular) and Residential Blocks, Yes. Private syndicate.


 
You just gave the impression that you were in the same market as CMC.

They just closed the sale on this today.
[broken link removed]


----------



## Bedsit

Interesting article on Bloomberg toady

US Slump may Chill Asia's Hot Exporters


----------



## Duplex

> If U.S. economic growth slows in the next few months the effects will be felt globally. If the slowdown turns into a recession early in 2007, as some forecasters expect, the blow to several countries may be much greater.
> Canada and Mexico, with exports to the U.S. equaling more than 20 percent of their respective gross domestic products, would be the hardest hit.


 
No no mention of little ole Ireland.


----------



## cjh

Duplex said:


> No no mention of little ole Ireland.


 

Anyone know what percentage of our exports are to the US?


----------



## Duplex

cjh said:


> Anyone know what percentage of our exports are to the US?


 

Here you go.
http://www.nationmaster.com/graph/eco_exp_to_us-economy-exports-to-us


----------



## edo

> Anyone know what percentage of our exports are to the US?



Officially About 18-20% in 2004 - accounting for  1.9% of total US imports.

This doesn't count Multinational "internal company transfers of capital equipment ,raw materials and the like" - which seeing as 87% of our total exports are produced by 4 US Multinationals - Id say it would realistically be somewhere around 22/24%.


----------



## Afuera

Duplex said:


> Here you go.
> http://www.nationmaster.com/graph/eco_exp_to_us-economy-exports-to-us



Interesting statistics. We're more dependant on the US than Israel even!


----------



## cjh

Thanks for the info.


----------



## Duplex

Afuera said:


> Interesting statistics. We're more dependant on the US than Israel even!


 

Sobering, would be the appropriate expression.


----------



## Maine

Bedsit said:


> Interesting article on Bloomberg toady
> 
> US Slump may Chill Asia's Hot Exporters


 

http://news.bbc.co.uk/1/hi/business/6041460.stm

This will give some confidence to US consumers to continue to spend as it reduces the threat of tax increases. If that happens US interest cuts will happen at a far slower pace.

Softer landing in US could equal better growth in EU could equal ECB continuing to raise rates in 2007.


----------



## Sidewinder

Maine said:


> http://news.bbc.co.uk/1/hi/business/6041460.stm
> 
> This will give some confidence to US consumers to continue to spend as it reduces the threat of tax increases. If that happens US interest cuts will happen at a far slower pace.
> 
> Softer landing in US could equal better growth in EU could equal ECB continuing to raise rates in 2007.



Or in other words: 

Soft landing in the US = ECB rates of 4.5% by Q12008 = we're screwed.

Recession in US = quarter of economy in trouble = we're screwed.

All down to appalling mismanagement, lack of vision, gombeenism and economic illiteracy on the part of this Government for the last 9 years. All this _was avoidable_, if they had the vaguest clue what they were doing.


----------



## blindjustice

Afuera said:


> And why don't you factor in all the money being earned in Ireland and then sent home to Eastern Europe then as well while you're at it?
> 
> His predictions of inflation at 3.9% in Ireland (almost twice the recommended rate by the ECB) aren't exactly going to encourage them to go easy on increasing their rates further.



Wow there buddy! 3.9% is almost twice the recommended rate? So if a slow down NOT A CRASH did happen how long at the recommended rate of inflation would it take for wages (going up inline with inflation) to reach more normal house price to wage ratios?!

Would it not be impossible to get figures for the money being sent abroad as mentioned above? i.e to determine if its a drop in the ocean or tsunami etc




Sidewinder said:


> Or in other words:
> 
> Soft landing in the US = ECB rates of 4.5% by Q12008 = we're screwed.
> 
> Recession in US = quarter of economy in trouble = we're screwed.



ah yes the damned if we do damned if we dont syndrome!

http://en.wikipedia.org/wiki/Irish_property_bubble         lol its on Wiki!
http://en.wikipedia.org/wiki/Japanese_asset_price_bubble
bear in mind that I dunno how reliable those links are


----------



## Hibernicatio

'Housing boom due to global integration'  Greenspan 

http://www.ft.com/cms/s/8e5e3ad6-57b9-11db-be9f-0000779e2340.html


----------



## Humdinger

edo said:


> Officially About 18-20% in 2004 - accounting for 1.9% of total US imports.
> 
> This doesn't count Multinational "internal company transfers of capital equipment ,raw materials and the like" - which seeing as 87% of our total exports are produced by 4 US Multinationals - Id say it would realistically be somewhere around 22/24%.


 
What % of this % is Viagra from Pfizer in Cork


----------



## thewatcher

Afuera said:


> I'm not talking about earning cash in Ireland so they can buy property at home. I'm talking about the huge amount of cash that is flowing out of Ireland annually to support families back in Eastern European countries, otherwise known as remittances.


 
I always thought this was negligible,yet i'm in the post office the other day to pay an Esb bill with 5 people in front of me,3 of them western union money off to the congo no less and the other 2 mail money off to poland.I'd love to know exactly how much money is getting sucked out of the irish economy every week,if you have worked for it fair enough but i get the impression irish taxpayers money is being spread across the globe.I know the lefties love it,but do we have to keep the whole world going !.
Anyone here from western union that could throw a figure our way ?


----------



## Foxtrot

thewatcher said:


> I'd love to know exactly how much money is getting sucked out of the irish economy every week,if you have worked for it fair enough but i get the impression irish taxpayers money is being spread across the globe.I know the lefties love it,but do we have to keep the whole world going !.



Ah, there's nothing like a spot of casual racism. It would seem to me that if anyone is misappropriating Irish taxpayer's money it's the politicians & their cronies. I've had Polish guys working on my house, Chinese women in to do cleaning, and they all worked non-stop at jobs I couldn't even find an Irish person to take. If people are sending money home I would assume that they worked for it and saved up. 

And I would hardly say that the Irish economy is "keeping the whole world going." !!!


----------



## redo

Anyone remember this house?
[broken link removed]

Can't seem to find any price in google's cache about it.  It was on the market in spring.


----------



## Maine

Hibernicatio said:


> 'Housing boom due to global integration' Greenspan
> 
> http://www.ft.com/cms/s/8e5e3ad6-57b9-11db-be9f-0000779e2340.html


 
Got to repsect him for what he done.  But I think his comments on the dot com and housing bubbles need to be looked at from perpective that he on top while both happened.


----------



## conor_mc

thewatcher said:


> I always thought this was negligible,.....
> Anyone here from western union that could throw a figure our way ?


 
Posted this a few weeks back....

According to this article http://www.unison.ie/irish_independe...issue_id=14664 there are 30,000 Latvian immigrants in this country sending €300m home every year.

That's an average of €10k per person.


----------



## edo

A Very interesting and worrying article from newsweek. Samuelson is one of those commentators who I would see as the more level headed - less excitable types - He 's normally on the money too.






> http://www.msnbc.msn.com/id/15178131/site/newsweek/


Good Lord - if a housing "crash" is going to put a large diversified economy like the US into recession - you'd really really have to fear for us here. Its not the direct loss in monetary "value " thats the problems - its going to be the loss of confidence - thus reduced consumer spending and borrowing - thus jobs losses - thus increased insecurity - thus more reduced spending..............................and so the spiral will go until we hit the bottom .

When the US sneezes........................we normally get the cold  6-12 months later > I stand by my prediction that the latter half of next year(2007) is going to very very interesting.


----------



## whathome

Flippin' Stillorgan...

These just keep getting cheaper!

Developers Price €590,000: 
[broken link removed]=

This one has been for sale for months now. Miju even made that controversial call about it, the price had been reduced from €575,000 to €560,000
http://www.daft.ie/searchsale.daft?search=1&selected_agent=&id=84285&s[agent_id]=218&s[p]=upsvvwrp

And the latest one (appeared today) is €550,000
[broken link removed]=


----------



## soma

Back to sentiment..

..heard a funny Ad on the radio this morning (newstalk I think), where an auctioneer was sounding rather lonely in a echo-y auction room asking "anyone? anyone?".

The Ad was positing the question "where have all the buyers gone?" - the Ad's answer was that they (and the SSIA crowd)  were all off buying foreign property


----------



## room305

Maine said:


> Got to repsect him for what he done.  But I think his comments on the dot com and housing bubbles need to be looked at from perpective that he on top while both happened.



Respect him for what he has done? Alan Greenspan should be remembered for what he is - one of history's greatest monsters.


----------



## soma

room305 said:


> Respect him for what he has done? Alan Greenspan should be remembered for what he is - one of history's greatest monsters.



Yup, he dealt with the bursting of one bubble (tech), by inflating another (potentially far more dangerous) bubble, housing.


----------



## Duplex

soma said:


> Yup, he dealt with the bursting of one bubble (tech), by inflating another (potentially far more dangerous) bubble, housing.


 

Greenspan is right the collapse of communism has allowed the utilization of cheap labour on an unprecedented scale. i.e. globalisation. Cheap labour means cheap goods and low inflationary pressures which allows central bankers cut interest rates to low single digits for long periods. But cheap labour places a cap on wage inflation globally so while borrowing money is cheap the cost of repaying the money is not eroded by wage inflation. Globalisation is unstoppable we have benefited from it as a nation and other nations will benefit from it as well.

PS

It means that valuing an Irish house at 150-175 times the average Chinese wage is folly and unsustainable folly, which is worse.


----------



## room305

soma said:


> Yup, he dealt with the bursting of one bubble (tech), by inflating another (potentially far more dangerous) bubble, housing.



As a popular bumper sticker in the US has it:

_"Please God, just one more bubble."_


----------



## phoenix_n

phoenix_n said:
			
		

> Now 53 on sale.


 
Supply still increasing. Now 54 for sale in phibsboro area.


----------



## JayDub

conor_mc said:


> Posted this a few weeks back....
> 
> According to this article http://www.unison.ie/irish_independe...issue_id=14664 there are 30,000 Latvian immigrants in this country sending €300m home every year.
> 
> That's an average of €10k per person.


 
There are over 200,000 Polish immigrants here, if they also sent an average of €10k per person, thats €2B. I'd guesstimate the ascension countries immigrants are sending back over €3B/year.


----------



## JayDub

whathome said:


> Flippin' Stillorgan...
> 
> These just keep getting cheaper!
> 
> Developers Price €590,000:
> [broken link removed]=
> 
> This one has been for sale for months now. Miju even made that controversial call about it, the price had been reduced from €575,000 to €560,000
> http://www.daft.ie/searchsale.daft?search=1&selected_agent=&id=84285&s[agent_id]=218&s[p]=upsvvwrp
> 
> And the latest one (appeared today) is €550,000
> [broken link removed]


 
Anybody care to explain this when the price is €550,000, "NO STAMP DUTY FOR QUALIFYING OWNER OCCUPIERS".


----------



## redo

phoenix_n said:


> Supply still increasing. Now 54 for sale in phibsboro area.


229 in Lucan (myhome stats)


----------



## soma

redo said:


> 229 in Lucan (myhome stats)



Again using MyHome stats..

..supply _slowly_ increasing in Ranelagh (which I'm interested in as it's both "exclusive" and a very small area). It was 50 properties a few weeks back, now 56. I've seen two go 'sale agreed', only to revert to 'for sale' a  few days later.


----------



## room305

thewatcher said:


> I always thought this was negligible,yet i'm in the post office the other day to pay an Esb bill with 5 people in front of me,3 of them western union money off to the congo no less and the other 2 mail money off to poland.I'd love to know exactly how much money is getting sucked out of the irish economy every week,if you have worked for it fair enough but i get the impression irish taxpayers money is being spread across the globe.I know the lefties love it,but do we have to keep the whole world going !.
> Anyone here from western union that could throw a figure our way ?



If they earned the money then they are entitled to spend it however they like. From an inflationary perspective this is good because it reduces the money supply. Can you imagine how bad things would be if foreign workers were throwing money around like the cash-crazy Irish?


----------



## pvtighe

JayDub said:


> Anybody care to explain this when the price is €550,000, "NO STAMP DUTY FOR QUALIFYING OWNER OCCUPIERS".


 
[broken link removed]


----------



## dontaskme

room305 said:


> If they earned the money then they are entitled to spend it however they like. From an inflationary perspective this is good because it reduces the money supply. Can you imagine how bad things would be if foreign workers were throwing money around like the cash-crazy Irish?


 
Of course, such high demand for an Post and Western Union gives them pricing power so that they can increase prices, thereby fuelling inflation.


----------



## edo

> Quote:
> Originally Posted by *room305*
> _If they earned the money then they are entitled to spend it however they like. From an inflationary perspective this is good because it reduces the money supply. Can you imagine how bad things would be if foreign workers were throwing money around like the cash-crazy Irish?_
> 
> 
> Of course, such high demand for an Post and Western Union gives them pricing power so that they can increase prices, thereby fuelling inflation.


Jaysus you two - get a room!!!!!!!!!!!!!!!! - how many threads is this inflation fetish gonna take over??


----------



## phoenix_n

Are we agreed that the Autumn selling season has stalled ? (or never got quite started)


----------



## room305

edo said:


> Jaysus you two - get a room!!!!!!!!!!!!!!!! - how many threads is this inflation fetish gonna take over??



Its a thread about house prices - I presumed inflation was pretty central to the discussion ...


----------



## room305

dontaskme said:


> Of course, such high demand for an Post and Western Union gives them pricing power so that they can increase prices, thereby fuelling inflation.



Ah yes, but this is easily counteracted by reducing the VAT on money transfers


----------



## zac

Hibernicatio said:


> 'Housing boom due to global integration'  Greenspan
> 
> http://www.ft.com/cms/s/8e5e3ad6-57b9-11db-be9f-0000779e2340.html



Interesting read, thanks for the link.


----------



## whathome

phoenix_n said:


> Are we agreed that the Autumn selling season has stalled ? (or never got quite started)


 
Remember all the rubbish from the bulls during the summer - "House market may be weak now but prices will rise in the next selling season"

and now that this season is a disastrous washout...they're already starting to say it again about next selling season (Spring).

but they've been saying prices will rise for months now and sure if you listened to that rubbish about house prices rising you would have lost money!!!!


----------



## whathome

I knew house prices were falling, but not this fast....

[broken link removed]=


----------



## phoenix_n

whathome said:


> I knew house prices were falling, but not this fast....
> 
> [broken link removed]=


----------



## whizzbang

whathome said:


> I knew house prices were falling, but not this fast....
> 
> [broken link removed]=



I'll take two



/edit looking at the map there are 3 places for sale in that estates, this one asking 1,700,000, a 5 bed for 1,900,000 and another 5 bed for 2,000,000, all up teh road from Balivor (That the Balivor going for 2.750,000 [broken link removed] , been on the market since March)


----------



## Miles

I have a bid of 200K on! Who says house prices are falling!!!


----------



## Remix

whathome said:


> I knew house prices were falling, but not this fast....
> 
> [broken link removed]=


 

I know they're getting desperate for someone - anyone - to show up at auctions, but this is ridiculous:

[broken link removed]=


----------



## whizzbang

Remix said:


> I know they're getting desperate for someone - anyone - to show up at auctions, but this is ridiculous:
> 
> [broken link removed]=




That EA is really earning their %


----------



## Slicknik

*German inflation at two and a half year low*
http://www.rte.ie/business/2006/1012/germany.html?rss

Looks like inflation in the Eurozone in general is going in the right direction. If inflation continue to go down or stays level there shouldn't be a need for ECB to raise the rates much further.

I think a lot of people (FTB's in particular) currently are waiting to see how high the interest rates are going before deciding whether to buy or not. If ECB have good news at the next meeting there might be another stream of buyers coming onboard in the new year.


----------



## Duplex

The Irish Times reports that only 7 of 68 properties for sale at auction sold this week.


----------



## walk2dewater

Slicknik said:


> I think a lot of people (FTB's in particular) currently are waiting to see how high the interest rates are going before deciding whether to buy or not. If ECB have good news at the next meeting there might be another stream of buyers coming onboard in the new year.


 
What?

FTBs waiting?

For heavens sake why? Sure isnt rent "dead money". Surely since "in the long-term prices always go up" the current "soft landing" is merely "a buying opportunity".


----------



## howstrange

Slicknik said:


> *German inflation at two and a half year low*
> http://www.rte.ie/business/2006/1012/germany.html?rss
> 
> Looks like inflation in the Eurozone in general is going in the right direction. If inflation continue to go down or stays level there shouldn't be a need for ECB to raise the rates much further.
> 
> I think a lot of people (FTB's in particular) currently are waiting to see how high the interest rates are going before deciding whether to buy or not. If ECB have good news at the next meeting there might be another stream of buyers coming onboard in the new year.



On the other hand:

http://www.bloomberg.com/apps/news?pid=20601068&sid=aFW_qQMUyuk0&refer=economy

"The key ECB interest rates remain at low levels, money and credit growth remain strong and liquidity in the euro area is ample"


----------



## Slicknik

walk2dewater said:


> What?
> 
> Buyers waiting?
> 
> For heavens sake why?  Sure isnt rent "dead money".  Surely since "in the long-term prices always go up" the current "soft landing" is merely "a buying opportunity".



And there people are wondering why no "bulls" are contributing to this thread's currently very onesided "discussion". I'm surprised you didn't find a way to throw in the "it's a new paradigm" phrase as well. 

Having said that. I'm not a bull in the sense that I believe that the house market will continue on like it has in the past years. I merely believe that things aren't going to be nearly as bad as the majority of people on this thread thinks. 

The Eurozone inflation is obviously a big factor for which direction that house prices will go. Factor that in with the possibility of a change to the stamp duty in the next budget and I think we might see house prices increase some more in the first half of next year.


----------



## Duplex

Slicknik said:


> *German inflation at two and a half year low*
> http://www.rte.ie/business/2006/1012/germany.html?rss
> 
> Looks like inflation in the Eurozone in general is going in the right direction. If inflation continue to go down or stays level there shouldn't be a need for ECB to raise the rates much further.
> 
> I think a lot of people (FTB's in particular) currently are waiting to see how high the interest rates are going before deciding whether to buy or not. If ECB have good news at the next meeting there might be another stream of buyers coming onboard in the new year.


 

If German inflation continues to fall say to 1% or less is this good.  They've had falling inflation for many years, caused by rising unemployment and stagnant wage growth.  This caused property prices to fall.   I'd wager that the ECB would rather be tackling 3% inflation in Germany rather than deflation.   The laughable thing is that signs that the German economy is slowing would be meet with glee in Ireland.


----------



## plaudit

Slicknik said:


> *German inflation at two and a half year low*
> http://www.rte.ie/business/2006/1012/germany.html?rss
> 
> Looks like inflation in the Eurozone in general is going in the right direction. If inflation continue to go down or stays level there shouldn't be a need for ECB to raise the rates much further.
> 
> I think a lot of people (FTB's in particular) currently are waiting to see how high the interest rates are going before deciding whether to buy or not. If ECB have good news at the next meeting there might be another stream of buyers coming onboard in the new year.


 
The Euro has weakend ~3% against the dollar since August, that is not good for inflation, Oil priced in dollars being an obvious example.


----------



## JayDub

Slicknik said:


> I think a lot of people (FTB's in particular) currently are waiting to see how high the interest rates are going before deciding whether to buy or not. If ECB have good news at the next meeting there might be another stream of buyers coming onboard in the new year.


 
I think a lot of people (FTB's in particular) are simply priced out of the market, FULL STOP. Take a 1 bedroom apartment in Dublin, compare it to a classy one bedroom apartment in Berlin, there is no value in Ireland

Berlin - €86,000
*http://tinyurl.com/pu7hg*

Dublin - €370,000
*http://tinyurl.com/rq7le*


----------



## Duplex

I know that this is a dirty word but is deflation back on the agenda. I still think that the Japanese debt and asset bubble and ('lost decade') bust is the road we are on I'm afraid.


----------



## Slicknik

howstrange said:


> On the other hand:
> 
> http://www.bloomberg.com/apps/news?pid=20601068&sid=aFW_qQMUyuk0&refer=economy
> 
> "The key ECB interest rates remain at low levels, money and credit growth remain strong and liquidity in the euro area is ample"



From same article:
"For next year, I think that any speculation about our monetary-policy stance is absolutely premature"

Sounds like there's at least a chance that the quarter increase in December could be it for a while.


----------



## Duplex

Slicknik said:


> From same article:
> "For next year, I think that any speculation about our monetary-policy stance is absolutely premature"
> 
> Sounds like there's at least a chance that the quarter increase in December could be it for a while.


 

But if inflation in Germany fell to say 0.5% would this be good for Ireland?

Incidentally the bond market is up.  If OPEC cut production we are back to square one on the is it isn't it inflation debate it seems.
http://www.bloomberg.com/markets/rates/germany.html


----------



## walk2dewater

Slicknik said:


> And there people are wondering why no "bulls" are contributing to this thread's currently very onesided "discussion". I'm surprised you didn't find a way to throw in the "it's a new paradigm" phrase as well. .


 
Prices have permanently re-adjusted upwards as "it's a new paradigm" 
I've almost stopped posting here cos of the lack of coherent bull arguments.  But please, feel free.



Slicknik said:


> I merely believe that things aren't going to be nearly as bad as the majority of people on this thread thinks. .


 
I agree.  There's going to a lot of disappointed uber-bears.  Particularly when mortgage rates stop going up or even start DROPPING, like what's happening in the US.



Slicknik said:


> The Eurozone inflation is obviously a big factor for which direction that house prices will go. Factor that in with the possibility of a change to the stamp duty in the next budget and I think we might see house prices increase some more in the first half of next year.


 
For the life of me I don't understand why people just don't read the ECB website.  It's really not that intimidating.  Current HICP figure is at least the 3rd, probably 4th most important factor Trichet looks at.  Guess what the number one is?  The M3 rate, which is basically credit expansion.  And guess what M3 is doing right now?


----------



## Slicknik

Duplex said:


> But if inflation in Germany fell to say 0.5% would this be good for Ireland?



I don't think it'd be good for anyone in the Eurozone. But it increases the possibility of ECB capping their interest rate hikes fairly soon to prevent Germany from going in to deflation.


----------



## Duplex

Slicknik said:


> I don't think it'd be good for anyone in the Eurozone. But it increases the possibility of ECB capping their interest rate hikes fairly soon to prevent Germany from going in to deflation.


 

But the BOJ have negative rates in Japan to no effect.  I'm sorry but this argument that slowing growth is good for Ireland (because it keeps rates down and allows people service record debt) is flawed. 

BTW good on you for having the guts to come and put your point.


----------



## room305

Duplex said:


> I know that this is a dirty word but is deflation back on the agenda. I still think that the Japanese debt and asset bubble and ('lost decade') bust is the road we are on I'm afraid.



I wouldn't rule it out. Very tough time to make investment decisions of any kind - will we see deflation or continued inflation? I'm betting on inflation but will be hedging my bets by keeping some cash reserves.

Either way, I'd prefer not to have a 35 year mortgage debt hanging around my neck.

Went sale agreed on my PPR today. Let's just hope they close!


----------



## Slicknik

Duplex said:


> But the BOJ have negative rates in Japan to no effect.  I'm sorry but this argument that slowing growth is good for Ireland (because it keeps rates down and allows people service record debt) is flawed.



I don't believe that slowing growth is good for Ireland. 

But as long as inflation is under control it should allow ECB to keep a low interest rate to stimulate growth. 

* Central Bank issues positive assessment for months ahead *
[broken link removed]

"In its latest quarterly bulletin today, the bank is predicting a growth rate of 5.5% for 2006 and says unemployment should continue at its all-time low of around 4%."

"Elsewhere, the Central Bank is expressing continued concern over high house prices, saying affordability is becoming an increasingly pressing issue.

It also says, however, that there are signs of a slight easing in prices that will reduce the risk of a potential property crash."

Again, I'm not a house price bull. I just don't feel that the picture is as bad as some people on this thread paints it. A 40% drop in the house market has been mentioned by this Christmas. I just can't see that happening.


----------



## murray

"Went sale agreed on my PPR today. Let's just hope they close!" Room 305

best of luck with it R305 - in the same position myself - anxious time eh?!?!


----------



## room305

murray said:


> "Went sale agreed on my PPR today. Let's just hope they close!" Room 305
> 
> best of luck with it R305 - in the same position myself - anxious time eh?!?!



Yeah, more nervous now than when it was on the market.


----------



## walk2dewater

room305 said:


> Very tough time to make investment decisions of any kind -


 
here here.  

btw good luck on the sale.


----------



## dontaskme

Duplex said:


> If German inflation continues to fall say to 1% or less is this good. They've had falling inflation for many years, caused by rising unemployment and stagnant wage growth. This caused property prices to fall. I'd wager that the ECB would rather be tackling 3% inflation in Germany rather than deflation. The laughable thing is that signs that the German economy is slowing would be meet with glee in Ireland.


 
VAT is going up 3% in Germany on 1st January however, and this will surely have a knock on effect on consumer prices, so a 1% rate of inflation is very unlikely.


----------



## phoenix_n

room305 said:


> Yeah, more nervous now than when it was on the market.


 
Did you get the asking price ?


----------



## JayDub

The bubble has burst 

3 Bedroom - €75,000
http://tinyurl.co.uk/ojfo


----------



## Duplex

dontaskme said:


> VAT is going up 3% in Germany on 1st January however, and this will surely have a knock on effect on consumer prices, so a 1% rate of inflation is very unlikely.


 

I agree, for now.  The point is that we are between a rock and a hard place.  The worst case scenario for Ireland is deflation taking a grip in the US and Europe.  The Fed will inflate like mad to avoid this; the risk is that they may overshoot leading to hyper inflation and mayhem.  So be careful what you wish for. 


As far as the Irish property market is concerned not one iota of the risk is priced in not a penny cent, as will become evident in time.

BTW good luck Room 305.


----------



## room305

phoenix_n said:


> Did you get the asking price ?



€1k above and for that we had to throw in (quite literally) everything. I guess we're lucky they really liked the house. Most of the other places on the market in the area aren't shifting - with the possible exception of the 3-bed ex-council houses. Although mostly this is down to the "well the house down the street sold for x, so ours must be worth x + 10% now" phenomenon.

I don't see any major slide in prices until next year but in a weakening market there is little advantage to holding out for another few k.


----------



## Debtwish

howstrange said:


> On the other hand:
> 
> http://www.bloomberg.com/apps/news?pid=20601068&sid=aFW_qQMUyuk0&refer=economy
> 
> "The key ECB interest rates remain at low levels, money and credit growth remain strong and liquidity in the euro area is ample"


 
*Bloomberg:* Adding to pressure on the ECB, money-supply growth, which the bank uses as a gauge for future inflation, unexpectedly accelerated in August. Credit to businesses and households jumped 11.9 percent, the most since the ECB took charge of monetary policy eight years ago. 
Consumer prices are *"likely to increase again towards the end of the year and in early 2007"* after lower energy costs pushed inflation 1.8 percent in September, the ECB said.

Looks like December's rate rise is still in the bag.


*************************************

*Jean-Claude We Love You*
*The Irish Bears School Choir*

_Jean-Claude, we love you_
_Jean-Claude we do_
_Though you may be far away_
_We think of you_

_There's no one quite like Jean-Claude_
_I'm sure you will agree_
_There's no road that he won't go_
_For "price stability"_

_Jean-Claude, we love you_
_Jean-Claude we do_
_Though you may be far away_
_We think of you_

_And one day, after the crash_
_we'll look back and say_
_It's all thanks to Jean-Claude_
_Homes are affordable today_

_There's no one quite like Jean-Claude_
_And his friends at the ECB_
_It's not his fault that Ireland's debt_
_is nearly twice its GDP_

_There is no stopping Jean-Claude_
_EU growth is no hinderance_
_The vested interests sh1t themselves_
_when he says "Vigilance"_

_Jean-Claude, we love you_
_Jean-Claude we do_
_Though you may be far away_
_We think of you_

_Politicians will blame Jean-Claude_
_For ending the party_
_But the Celtic Tiger was really killed_
_by greed and profligacy_

_Jean-Claude, we love you_
_Jean-Claude we do_
_Jean-Claude, we love you...._


----------



## whathome

Debtwish said:


> *Jean-Claude We Love You*
> *The Irish Bears School Choir*


----------



## phoenix_n

room305 said:


> €1k above and for that we had to throw in (quite literally) everything. I guess we're lucky they really liked the house. Most of the other places on the market in the area aren't shifting - with the possible exception of the 3-bed ex-council houses. Although mostly this is down to the "well the house down the street sold for x, so ours must be worth x + 10% now" phenomenon.
> 
> I don't see any major slide in prices until next year but in a weakening market there is little advantage to holding out for another few k.


 
Congrats......Welcome (soon) to the joys of living with cheap rent.


----------



## room305

phoenix_n said:


> Congrats......Welcome (soon) to the joys of living with cheap rent.



Well we won't be popping the champagne corks until we lodge the cheque (and it clears)  ...


----------



## Remix

Debtwish said:


> *Jean-Claude We Love You*
> *The Irish Bears School Choir*
> 
> _Jean-Claude, we love you_
> _Jean-Claude we do_
> _Though you may be far away_
> _We think of you_


 
That's the type of quality you just can't find in other threads  

p.s. don't forget to email it for his attention to info@ecb.int


----------



## gearoidmm

phoenix_n said:


> Congrats......Welcome (soon) to the joys of living with cheap rent.



Sorry to burst this particular bubble but looking at the rental market in Dublin at the moment, things are a little grim and I'm glad that we're well established in our rental.

There are less than half the number of properties available for rent in Dublin than there were 6 months ago and prices seem to be significantly higher.  Certainly around D4/D6, rents are rising and there are very few properties at the kind of prices of last year.  That said, compared to buying, it's still much cheaper but just not quite as good as it was a year ago.


----------



## thewatcher

Foxtrot said:


> Ah, there's nothing like a spot of casual racism.


 
yea yea yea whatever.sitcks and stones.........



dontaskme said:


> Of course, such high demand for an Post and Western Union gives them pricing power so that they can increase prices, thereby fuelling inflation.


 
Is western Union safe though ?I thought i heard someone on the joe duffy show a few weeks ago saying how they had wired money to cyprus and it had been collected by someone else in another country,a few other people rang in saying how the same thing had happened to them.
Western union wouldn't accept any responsibility. 



Debtwish said:


> *Jean-Claude We Love You*
> *The Irish Bears School Choir*
> 
> _Jean-Claude, we love you_
> _Jean-Claude we do_
> _Though you may be far away_
> _We think of you_


 
Brilliant,Debtwish take a bow ! 

You should email that off to the ecb and see if you get a reply !.


----------



## thewatcher

gearoidmm said:


> Sorry to burst this particular bubble but looking at the rental market in Dublin at the moment, things are a little grim and I'm glad that we're well established in our rental.
> 
> There are less than half the number of properties available for rent in Dublin than there were 6 months ago and prices seem to be significantly higher. Certainly around D4/D6, rents are rising and there are very few properties at the kind of prices of last year. That said, compared to buying, it's still much cheaper but just not quite as good as it was a year ago.


 
This is happening alright in my area,but that's because the landlords are trying to flog their properties.It just a temporary situation,i do believe things will return to normal when they see there is no fast exit.


----------



## whathome

thewatcher said:


> This is happening alright in my area,but that's because the landlords are trying to flog their properties.It just a temporary situation,i do believe things will return to normal when they see there is no fast exit.


 
I've noticed the same thing recently.  Looks like landlords are putting their property on the market rather than renting it out again when a lease ends.  I haven't noticed rents increasing however.


----------



## Remix

RTE seems to be clutching desperately to a one-word absence to convince readers that 2007 will bring a nice stable rate of 3.5% with no more of dem unpleasant bubble-burstin' hikes.

http://www.rte.ie/business/2006/1012/ecb.html


Quote from the US:
_"Fall's Frustrated Sellers become Springs Motivated Sellers..."_


----------



## CelloPoint

Remix said:


> Quote from the US:
> _"Fall's Frustrated Sellers become Springs Motivated Sellers..."_



Brilliant!


----------



## futisle

> *Jean-Claude We Love You*
> *The Irish Bears School Choir*
> 
> _Jean-Claude, we love you_
> _Jean-Claude we do_
> _Though you may be far away_
> _We think of you_



Truly fantastic DebtWish for the eurovision I say


----------



## 2nz

Any thoughts on how the weakening trade exports will affect the property market? - *[broken link removed]*

Scary times ahead if you ask me.

http://irishhousepricesfalling.blogspot.com/


----------



## beattie

It looks like some Paddies who are taking on the world are not finding it is not a one-way street

_*"It's strange how a developer who landed in Chicago just a couple of months ago trailing clouds of public relations glory now has an acute case of shyness. Garrett Kelleher, the Irish developer who in July took financial control of the proposed 124-story building.." *_

[broken link removed]

Could this happen down in swanky D4 for all those proposed apartments I wonder?


----------



## blindjustice

http://www.boards.ie/vbulletin/showpost.php?p=52193152&postcount=993


----------



## JayDub

2nz said:


> Any thoughts on how the weakening trade exports will affect the property market?


 
The Irish property market is doomed in my opinion. Dozens of companies are moving to eastern europe because Ireland is just not competitive anymore, expect more to leave. Over 30,000 manufacturing jobs have been lost in the last four years. We have over 300,000 eastern european immigrants living in this country sending home Billions of euro each year, which means most are not buying Irish property, I don't know the figures but I'm sure over 90-95% are in rented accommodation. 

There are over 230,000 empty properties in Ireland at the moment. The construction sector is heading for a crash, tens of thousands of eastern european construction workers will be heading to London to work on the Olympics construction, freeing up more properties and the interest rate hikes are hitting hard. Car sales were down 12% last month, on top of that we have a crap football team...


----------



## blindjustice

"A recent simulation by the ESRI suggested that a 40 per cent drop in house  prices could reduce GNP growth to one per cent and increase unemployment to over  10 per cent of the labour force (Medium Term Review, 2005-20 2, ESRI, December  2005)."

so its back to the 1980s if prices continue to drop.....
[broken link removed]



is this the shape of things to come? http://irishhousepricesfalling.blogspot.com/

I think car sales going down 12% is a sign that debt is catching up on us


----------



## JayDub

blindjustice said:


> I think car sales going down 12% is a sign that debt is catching up on us


 
A lot of people are overlooking car sales figures, after all a car purchase is usually the 2nd most expensive purchase a person can make.

Ireland - Car sales decline 12% in September.
http://www.unison.ie/stories.php3?ca=9&si=1699765&issue_id=14723


Germany - Car sales increase 4.5% in September.


Why is there such a difference in new car registrations between Ireland and Germany? Renters outnumber homeowners 5 to 1 in Germany, renters don't feel the interest rate hikes so naturally they have more spending power.
http://www.dw-world.de/dw/article/0,2144,2155971,00.html


----------



## room305

Not that I don't think the economy here is headed for trouble (for which most people are ill prepared) but perhaps the decline in new car sales is due to people holding out on purchasing until next year's SSIA money give-away?


----------



## Borderlord

beattie said:


> It looks like some Paddies who are taking on the world are not finding it is not a one-way street
> 
> _*"It's strange how a developer who landed in Chicago just a couple of months ago trailing clouds of public relations glory now has an acute case of shyness. Garrett Kelleher, the Irish developer who in July took financial control of the proposed 124-story building.." *_
> 
> [broken link removed]
> 
> Could this happen down in swanky D4 for all those proposed apartments I wonder?


----------



## Jason7

room305 said:


> Not that I don't think the economy here is headed for trouble (for which most people are ill prepared) but perhaps the decline in new car sales is due to people holding out on purchasing until next year's SSIA money give-away?


 
How much of this SSIA money has already been spent though ie buying the new car last year , on the basis we have all this money coming our way in 2007?


----------



## Borderlord

beattie said:


> It looks like some Paddies who are taking on the world are not finding it is not a one-way street
> 
> _*"It's strange how a developer who landed in Chicago just a couple of months ago trailing clouds of public relations glory now has an acute case of shyness. Garrett Kelleher, the Irish developer who in July took financial control of the proposed 124-story building.." *_
> 
> 
> Sorry Beattie
> I wonder if that is the guy from Offaly who was on an RTE show a few months ago "Made in the USA" or something like that ??


----------



## cjh

room305 said:


> Not that I don't think the economy here is headed for trouble (for which most people are ill prepared) but perhaps the decline in new car sales is due to people holding out on purchasing until next year's SSIA money give-away?


 

50% of SSIA's will have matured before the April(?) deadline.


----------



## fatmanknows

*Regulator wants Credit Union debt action*

[broken link removed]

Bet on a number of these bad debts to be deposit loans for the FTB. Would'nt fancy underwriting the loan book of any Irish Lender at the minute.


----------



## Afuera

blindjustice said:


> Wow there buddy! 3.9% is almost twice the recommended rate? So if a slow down NOT A CRASH did happen how long at the recommended rate of inflation would it take for wages (going up inline with inflation) to reach more normal house price to wage ratios?!


The ECB has a target of 2% inflation. You've pointed out the very problem with people taking out huge debts in the current climate.

In the past hyper-inflation scrubbed off peoples real debt as the years went by. Before, central banks never laid such importance on maintaining "price stability" since they were often tied politically to maintaining other things also such as high employment etc. IMHO with the ECB present now this is not likely to happen this time around.



blindjustice said:


> Would it not be impossible to get figures for the money being sent abroad as mentioned above? i.e to determine if its a drop in the ocean or tsunami etc


True. Very hard to guage accurately, but I would guess that it is not insignificant. This money can be considered an import in terms of accounting for the country.


----------



## poormouth

fatmanknows said:


> *Regulator wants Credit Union debt action*
> 
> [broken link removed]
> 
> Bet on a number of these bad debts to be deposit loans for the FTB. Would'nt fancy underwriting the loan book of any Irish Lender at the minute.



I think that when the Bear maket in the Irish housing market is in full swing a lot of dodgy and corrupt practices will be exposed.


----------



## conor_mc

Borderlord said:


> Sorry Beattie
> I wonder if that is the guy from Offaly who was on an RTE show a few months ago "Made in the USA" or something like that ??


 
Nope, different guy. That guy actually _made it_! He'd been in Chicago since the early 90's.

This guy just swanned into town a few months ago and jumped on the bandwagon at the wrong time.....


----------



## phoenix_n

JayDub said:


> Why is there such a difference in new car registrations between Ireland and Germany?


 
they get tax incentives to buy german cars.


----------



## conor_mc

poormouth said:


> I think that when the Bear maket in the Irish housing market is in full swing a lot of dodgy and corrupt practices will be exposed.


 
Oh joy, more tribunals I'm sure......


----------



## Arthur Daley

This thread isn't the pit of hissing snakes for property bulls  that it used to be. Is this because prices have merely levelled off, and a bit of reality has just been injected into the market rater than the long awaited big correction or even crash?

My own view is that it will take a lot more interest rate rises to rock the market enough for it to tip. The 'property only goes up' and 'we're different' attitude is so entrenched in Ireland now. Although there is a fair time lag for the rises that have happened to fully impact. I'm not totally sure all lenders passed on all of the recent rises just so they can ensure that the party goes on for that bit longer. I know they did talk about holding some of the rises back to 'help first time buyers' 

Yes fair values are probably around the 2001 level in real terms but it seems that it will be a while before this corrects itself.


----------



## whathome

Arthur Daley said:


> Is this because prices have merely levelled off?


 
Have they?  How do you know this?


----------



## Arthur Daley

I don't know this for sure. Does anybody? I do know in my area (Swords)everything for sale seems to have gone sale agreed quickly enough but the impending announcement of the metro which was supposed to be last month may be a local factor here.


----------



## Neffa

phoenix_n said:


> they get tax incentives to buy german cars.


 
You mean SSIA's  then?


----------



## whathome

Arthur Daley said:


> I don't know this for sure. Does anybody? I do know in my area (Swords)everything for sale seems to have gone sale agreed quickly enough but the impending announcement of the metro which was supposed to be last month may be a local factor here.


 
Swords inventory is the highest I've ever seen - 144 properties.

Swords Inventory (myhome)
June 20th: *74 *
September 5th: *126*
Today (Oct 13th): *144*

Asking prices are falling. We won't know the exact story on current closing prices in Dublin until ESRI/PTSB data in a few months due to lag. Right now, rising inventory and falling asking prices point to continued weakening market rather than prices leveling off.


----------



## Arthur Daley

Fair enough inventory is up buyers are wearing the trousers and prices may fall 5-10%. But it just feels some way from the tipping point that would unlock the inflation which quite a few people feel has been there since 2000.


----------



## miju

remember arthur a crash doesnt have to be over night if prices fells say 40% over the course of 6-12 months in my book (and prob alot of others) that would equate to a crash of prices as well, as we've seen in other countries these things can take a while to play out


----------



## whathome

Arthur Daley said:


> But it just feels some way from the tipping point that would unlock the inflation which quite a few people feel has been there since 2000.


 
Yeah, I think you're right on this - we're just past the top of the curve so it will take some time for negative momentum to build.


----------



## dloob

Just noticed in the Galway Advertiser a 3 bed apartment near me in Galway that came on the market just over 3 weeks ago at 420K, is this week new to the market at 375K.
The 420 was pretty crazy as it's on the edge of the city but interesting to see it drop so quickly and by so much.


----------



## SHARP

room305 said:


> Not that I don't think the economy here is headed for trouble (for which most people are ill prepared) but perhaps the decline in new car sales is due to people holding out on purchasing until next year's SSIA money give-away?


 
That was my thinking too, but then I hear the amount of people that have already spent their SSIA's in advance and that the impending money will be used to pay off the loan taken out in expectation of the SSIA money arriving.
Weird country this


----------



## Arthur Daley

whathome said:


> Yeah, I think you're right on this - we're just past the top of the curve so it will take some time for negative momentum to build.


 
The thing is what is that tipping point, as once she goes it won't be pretty. Unless you're one of these guys who've sold to go back renting  

I think a few reports of the Esri/Ptsb index falling for a few months could have a big emotional effect on the average punter, combined with a few more rate rises next year to bring the ECB more into line with the Dollar and sterling area cycles. the timing of this may though get offset by the ssia euphoria.


----------



## Remix

A little piece of anecdotal to indicate that the falling asking prices we know so well, are dropping below previous sales price in some cases:



> My house is now on the market since August. At the moment, it would appear to be worth €16K (and dropping) than the identical house
> sold beside me last Easter. I have decided that I can take the hit of the €16K, but once it goes down under that, I dont think its worth my while.
> Over the past two weeks, I have had two offers both just within the borderline asking price, both of whom then pulled out.


 
http://www.askaboutmoney.com/showpost.php?p=294832&postcount=1

I suppose anecdotal is the best we have for revealing this.


----------



## Bedsit

Two articles form the Independent today:

Yesterday's auction results

Hobbs cannot sell his 2.4m estate


----------



## whathome

SHARP said:


> Weird country this


 
I'm still hearing about people buying property sooner rather than later because they're worried that interest rates will keep going up.  It's really weird, interest rates rising seems to be front-loading the Irish property market.  I think that the only thing stopping people from buying at the low end of the market right now is their borrowing limit.


----------



## phoenix_n

This apartment dropped from 370 to [broken link removed] this week.

Number of apartments grew from 10 on the 11th to 17 today in Glasnevin (Finglas Rd?)!!!


----------



## qwerty1

Just a query about a comment that I seem to hear constantly. "House prices might level off but the won't drop". Just what sort of basis is there in reality for this sort of statement?


----------



## Arthur Daley

qwerty1 said:


> Just a query about a comment that I seem to hear constantly. "House prices might level off but the won't drop". Just what sort of basis is there in reality for this sort of statement?


 
It's the same spin which has helped inflate the bubble over the last 6 years. Once almost everybody is spinning like this it's becomes a bit of a self fullfilling prophecy


----------



## howstrange

[broken link removed]

I wonder what they will be saying for the last 6 months of this year!! I bet you wont hear any reports about stats for the last 6 months of 2006. You will just hear that house prices rose x% for the year as a whole!


----------



## walk2dewater

qwerty1 said:


> Just a query about a comment that I seem to hear constantly. "House prices might level off but the won't drop". Just what sort of basis is there in reality for this sort of statement?


 
None.


----------



## Maine

Bedsit said:


> Two articles form the Independent today:
> 
> Yesterday's auction results
> 
> Hobbs cannot sell his 2.4m estate


 
The auction results shown appear to confirm that there are still alot of sales happening. Are they a reasonable cross section or edited


----------



## blindjustice

SHARP said:


> That was my thinking too, but then I hear the amount of people that have already spent their SSIA's in advance and that the impending money will be used to pay off the loan taken out in expectation of the SSIA money arriving.
> Weird country this




one of my friends (ever the pessimist) has a theory. He formulated it after hearing what the minister for Education said about SSIAs and 3rd level grants.

That the SSIA is way of gauging how much money people can spare i.e. how much can we raise taxes and if so and so was able to save so much money for 5 years then surely he/she has enough money - not to need state grants/aid/tax breaks or whatever.
His thinkin may be a bit too subversive but there may be a little something in it


----------



## Arthur Daley

Newstalk disapoint me a bit since Dunphy left. But then again the morning shows competition is sponsored by the 2 grand giveaway from Aib. Jill Kerby is hardly ever on it now, and this morning they had some guy on saying everything was going to be rosy with the economy for years to come.


----------



## soma

howstrange said:


> [broken link removed]
> 
> I wonder what they will be saying for the last 6 months of this year!! I bet you wont hear any reports about stats for the last 6 months of 2006. You will just hear that house prices rose x% for the year as a whole!



I expect it to play out quite like the US. At one point the Real Estate Agents would delight in reporting the month-on-month figures, but once those turned negative they reverted to year-on-year. However now those have turned negative too..


----------



## baby_tooth

Arthur Daley said:


> Yes fair values are probably around the 2001 level in real terms but it seems that it will be a while before this corrects itself.


 

have to say i think you are wrong on this. In 2001 this country was doing well, still competitive, exporting goods, still had industry doing well, wages and costs were low.

Now everything is overpriced, including us. Public service pay and costs have spiralled and will continue for the next few months in the face of an election.
We are in a worse situation than 2001, inflation is eroding the value of the prices in 2001, and we have lost ground in real terms from the point of view of our economy.


----------



## howstrange

Arthur Daley said:


> Newstalk disapoint me a bit since Dunphy left. But then again the morning shows competition is sponsored by the 2 grand giveaway from Aib. Jill Kerby is hardly ever on it now, and this morning they had some guy on saying everything was going to be rosy with the economy for years to come.



And with Ger Gilroy at the seat it doesnt appear there is going to be any challenge to the vested interests either!!


----------



## Sidewinder

dloob said:


> Just noticed in the Galway Advertiser a 3 bed apartment near me in Galway that came on the market just over 3 weeks ago at 420K, is this week new to the market at 375K.
> The 420 was pretty crazy as it's on the edge of the city but interesting to see it drop so quickly and by so much.



Galway city-centre 3-bed beside me came on the market just 2 weeks ago at €440, now €400K. I might buy it once it hits €150K


----------



## Arthur Daley

baby_tooth said:


> have to say i think you are wrong on this. In 2001 this country was doing well, still competitive, exporting goods, still had industry doing well, wages and costs were low.
> 
> Now everything is overpriced, including us. Public service pay and costs have spiralled and will continue for the next few months in the face of an election.
> We are in a worse situation than 2001, inflation is eroding the value of the prices in 2001, and we have lost ground in real terms from the point of view of our economy.


 

I reckon house prices were a touch too high in 2001 but inflation/wage increases since then mean 2001 would be a about the right level. We have a distorted view now caused by 40 year terms, 100% mortgages and people scraping cash from here there and everywhere including credit union loans for deposits. Some bears on here would suggest the late 90s are fair value others think 2002/2003. Depends were you are on the scale I suppose. I agree this ecomony hasn't been competitive for years and benchmarking has a big part to play.


----------



## Gwynston

dloob said:


> Just noticed in the Galway Advertiser a 3 bed apartment near me in Galway that came on the market just over 3 weeks ago at 420K, is this week new to the market at 375K.


I noticed myself that the property "section" in the Galway Advertiser has recently turned into a pull-out "supplement" all of it's own. It's got noticeably bigger and bigger over the past weeks - so much so, that it is too big for it's own boots!

It must be twice the size it was a few months ago, and is in danger of becoming bigger than the paper itself!


----------



## conor_mc

Interesting comment from the CSO....



> The CSO says that in the three months from May to July, the largest increase in the volume of sales was witnessed in the hardware, paints and glass sector, with sales there up 6.3%.


 
http://www.rte.ie/business/2006/1013/retail.html?rss

Investors doing up their properties prior to selling? Potential trader-uppers deciding to stay put? A big push from developers to finish their current developments (glass sector more so than paints/hardware)?

Any other takes on this?


----------



## Neffa

Maine said:


> The auction results shown appear to confirm that there are still alot of sales happening. Are they a reasonable cross section or edited


 
The IT yesterday still reported huge numbers of withdrawals, albeit with an increase in the "sold after for higher" figure. 

The Indo has a lot of land sales and outside Dublin sales which look like they are still going relatively well. The Dublin sales are very slow by comparison.


----------



## Sidewinder

Gwynston said:


> I noticed myself that the property "section" in the Galway Advertiser has recently turned into a pull-out "supplement" all of it's own. It's got noticeably bigger and bigger over the past weeks - so much so, that it is too big for it's own boots!
> 
> It must be twice the size it was a few months ago, and is in danger of becoming bigger than the paper itself!



It was the appearance of the (huge) Advertiser property supplement about a month ago that convinced me this bubble has hit bursting point. I seem to recall the same thing happening with the English newspapers just before the 89/90 crash...


----------



## howstrange

Sidewinder said:


> It was the appearance of the (huge) Advertiser property supplement about a month ago that convinced me this bubble has hit bursting point. I seem to recall the same thing happening with the English newspapers just before the 89/90 crash...



A friend of mine has just bought in the Knocknacara area of Galway (not sure for how much!). He told me though he had paid the asking price. I asked him was there anyone bidding against him and he said no. Obviously i then asked him why he didnt bid lower than the asking price and he told me that the EA told him that he knew the owner and he wouldnt accept any lower and that he was getting a good deal because the house's market value was €10K more!! I know what ye are thinking cos i thought exactly the same!! I didnt want to say too much to him as he has signed the contracts. I told him that i think a correction in property prices is on the way but he reckons they will only level off and wont go down! But just a few things to note from this. 1.  The tricks that EA'a are pulling to get people to buy. 2. The fact that nobody was bidding against him suggests a serious slowdown. 3. How gullible people still are to the vested interests. 4. People have still a lot of faith in the property market!


----------



## Miles

Do people reading this forum consider the payment of rent as dead money? Just having a look at rental trends as reported on Daft and they are showing increases in rent of up to 10%.

[broken link removed]

It seems the average rental cost per month in Dublin is now in access of €1,250.

A 400K mortgage over 35 years at current UB tracker rate of 4.3% costs €1,843 to service. Take TRS and perhaps the rent-a-room scheme and the average joe soap is no worst off and have there own castle to relax in in the evenings.

Perhaps I am missing the point totally!


----------



## murray

stamp duty ??
capital depreciation?


----------



## murray

if you are renting a room - its not your own castle.


----------



## room305

conor_mc said:


> Investors doing up their properties prior to selling? Potential trader-uppers deciding to stay put? A big push from developers to finish their current developments (glass sector more so than paints/hardware)?



I've always said that DIY firms do well in the early stages of a crash. Rather than drop their price by €50k, sellers will paint the house and re-tile the bathroom.

That was my original thinking (from looking at the US market, where some sellers decided to rent and hold out for the longterm rather than drop even $10k) but the willingness of sellers here to drop the asking prices indicates this phenomenon isn't as likely over here.

If I had to guess I would say it is people deciding to paint property that is going on the market.


----------



## Miles

murray said:


> stamp duty ??
> capital depreciation?


 
How would you factor rent into the equation? Bearing in mind the current upward trends in rents demanded.


----------



## Arthur Daley

Miles said:


> A 400K mortgage over 35 years at current UB tracker rate of 4.3% costs €1,843 to service.


 
This is the case for renting for some. 400k is a hell of a lot when the average industrial wage is 33k, and over a 35 year term a lot can happen to interest rates to push them well above the (still) historically low 4.3%.


----------



## phoenix_n

34 Cabra Park Phibsboro
Was 950K now advertised for 895 on myhome or 890 on daft

16 Shandon Park, Phibsboro
was 750k (No006 in ) now is [broken link removed]


----------



## Panzraam

> It seems the average rental cost per month in Dublin is now in access of €1,250.


 
That figure is the average for rental properties as a whole, not the average paid by tenants. It includes 1,2,3,4 etc bed houses. 

On average renters are probably paying less than half that figure. Plus they don’t have to pay a management fee, stamp duty, insurance, maintenance ……. and they also benefit from tax relief on the rental payments.


----------



## Miles

Arthur Daley said:


> This is the case for renting for some. 400k is a hell of a lot when the average industrial wage is 33k, and over a 35 year term a lot can happen to interest rates to push them well above the (still) historically low 4.3%.


 
Point taken Arthur, everything you say is on the button. In this climate you have to assume that a couple will pool there resources together.

35 years then at the mercy of the ECB!


----------



## hmmm

Miles said:


> Do people reading this forum consider the payment of rent as dead money? Just having a look at rental trends as reported on Daft and they are showing increases in rent of up to 10%.


Is this Daft report the quoted rents or the actual rents? I've seen no evidence of rents rising on the ground, with the recent interest rate rises I've no doubt some landlords will be chancing their arms trying to get higher rents.


----------



## hmmm

howstrange said:


> he reckons they will only level off and wont go down!


A lot of people seem to think houses retain some sort of "memory" of prices, which means they will hit a floor where the magic house price fairy will step in and buy. It's trite to say it but still true - an investment is only worth as much as a buyer is willing to pay for it.


----------



## Neffa

Miles said:


> Do people reading this forum consider the payment of rent as dead money? Just having a look at rental trends as reported on Daft and they are showing increases in rent of up to 10%.
> 
> [broken link removed]
> 
> It seems the average rental cost per month in Dublin is now in access of €1,250.
> 
> A 400K mortgage over 35 years at current UB tracker rate of 4.3% costs €1,843 to service. Take TRS and perhaps the rent-a-room scheme and the average joe soap is no worst off and have there own castle to relax in in the evenings.
> 
> Perhaps I am missing the point totally!


 
Well, I can rent a house for roughly 45% of the cost of the repayment mortgage on the same house and about 75% of the cost of an IO mortgage on the same house. And that's not because we scored a great deal on our property - most of the rental property we have seen was a comparable discount on the purchase cost. We signed for a another rental year two months ago at the same nominal rent as before - an effective drop in real terms. 

Since I see little scope for capital appreciation in the next 2-3 years, I consider it more risky to pay the 9% stamp duty (now that really is dead money!) at the top of the market than to wait 2-3 years and see how things progress. Meanwhile I am saving a serious amount of cash every month so that I can be in the best possible position in 08/09.  

Looking at the London market which I know well, I expect that there will be a rent rise here (rents are very cheap in Dublin compared with London) matched with a purchase price fall (purchase prices are very high relative to London) in the coming years. I still expect the greater shift to be in the buying prices rather than the rental prices, mind you.


----------



## dontaskme

Miles said:


> Do people reading this forum consider the payment of rent as dead money? Just having a look at rental trends as reported on Daft and they are showing increases in rent of up to 10%.
> 
> [broken link removed]
> 
> It seems the average rental cost per month in Dublin is now in access of €1,250.


 
Still below 2002 levels though
[broken link removed]
and looking at the trend probably below 2001 levels also.


----------



## bogwarrior

Miles said:


> Do people reading this forum consider the payment of rent as dead money? Just having a look at rental trends as reported on Daft and they are showing increases in rent of up to 10%.
> 
> [broken link removed]
> 
> It seems the average rental cost per month in Dublin is now in access of €1,250.
> 
> A 400K mortgage over 35 years at current UB tracker rate of 4.3% costs €1,843 to service. Take TRS and perhaps the rent-a-room scheme and the average joe soap is no worst off and have there own castle to relax in in the evenings.
> 
> Perhaps I am missing the point totally!



It also depends where you're renting/buying.  Lifestyle has to be taken into account - though its hard to put a monetary value on it.

i.e. If you're in the mind to buy a property in the area where you're currently renting,  and rent v mortgage is e1250 v e1850, and you can cover the increase - well then rent is dead money.

If however, you're happily renting in (say) Ranelagh/Rathmines for e1250 and the best value property you can find is e1850 in poorly serviced commuterville and you only want a property because your friends and family are giving you the 'rent is dead money'/'safe as houses'/'get on the property ladder' routine you'd (IMHO) be foolish to listen to them.

There comes a time in most people life when they want to own their own home.  But its up to each individual to make up their own mind as they'll be the person paying the mortgage every month - not their parents or friends.


----------



## Duplex

Rents generally always track inflation, except in periods where there is a demand or supply imbalance. 

The graph below relates to the US but shows the long term relationship. 


[broken link removed]

The growth in the buy to let sector in the US has seen a fall in rental values recently by the way.


----------



## walk2dewater

Duplex said:


> Rents generally always track inflation, except in periods where there is a demand or supply imbalance.
> 
> The graph below relates to the US but shows the long term relationship.
> 
> 
> [broken link removed]
> 
> The growth in the buy to let sector in the US has seen a fall in rental values recently by the way.


 
Interesting chart.  But I bet they track wage inflation even closer.  If wages stagnate and supply continues to come on line, including currently vacant properties held for capital appreciation, we'll see rents falling.


----------



## Duplex

walk2dewater said:


> Interesting chart. But I bet they track wage inflation even closer. If wages stagnate and supply continues to come on line, including currently vacant properties held for capital appreciation, we'll see rents falling.


 

Probably true thought I wouldn't be surprised if we saw a spike in rental inflation if investors start selling up large scale.


----------



## conor_mc

Duplex said:


> Probably true thought I wouldn't be surprised if we saw a spike in rental inflation if investors start selling up large scale.


 
Surely you mean "start _trying_ to sell up"...!!!!


----------



## Bedsit

[broken link removed] Has a very approriate street name as well


----------



## phoenix_n

conor_mc said:


> Surely you mean "start _trying_ to sell up"...!!!!


 
Very true. Buying an asset is one thing.......selling it is a completely different ballgame.


----------



## Savvy

In the front door and straight in to s/r ...lovely.
You'd think that at least they'd fix the door under the sink!


----------



## whizzbang

Bedsit said:


> [broken link removed] Has a very approriate street name as well



I like photo number 4 the best! a gardening enthusiasts dream!


----------



## Debtwish

Bedsit said:


> [broken link removed] Has a very approriate street name as well


 
Irish property has become an international joke and that place is the punchline.

Go to a French property web site and see what 440K will buy you.


----------



## Calina

No, the punchline was the old toilet block in Lahinch for 300K.


----------



## blindjustice

Bedsit said:


> [broken link removed] Has a very approriate street name as well




510 square feet of pure luxury!


Would I be wrong in thinking that in a healthy market a place like that would maybe be left there i.e little interest in a kip like that? And the only real buyer you would get would be a developer who would maybe knock it and rebuild or COMPLETELY renovate it before even dreaming of putting it on the market? or am I being silly????? 400K I really dont think so. Is actually very very sad


----------



## Guest109

440,000 you selling this????? i have seen this area madness is only answer i could think of


----------



## Open_Window

Hey Hey hey Hello!

*RENTING*

In truth cramming as many bodies into one place is the key, we have done it, it has its disadvantages but at 260 for a small single room or 260 pm sharing a large double room you cannot go wrong. TO be honest, especially in the context of the current price sureality.

Its true my rent rent has fallen over the last 4 years in simple terms of montly payment, simply by moving and renting larger places with more people.

FOr example,

2001 - 400 p/m
2002 - 420 p/m 
2003 - 350 p/m
2004 - 260 p/m
2005 - 260 p/m
2006 - 260 p/m

when you take into account of HPI with combined Infaltion and such I am saving even more seemingly.

I don't know whats going on, too many mixed singles close to hom thought I beleive a correction well overdue. Our landlord bought the house next door, same size in better condition but non the less but is asking €650 more per month than what we are paying. 

If we had bought it we would have seen our montly payments at well over 3,300 p/m on a lonag mortgages at leat 30 years. Strangley they are only asking for 2500 p/m rent. Not only that but he is rennovating the place to a reasonable extent.

THey must have had some deposit or access to interest only mortgage. Either way, our rent is at 1850 p/m so we are saving a packet collectively & indivudually.

It seems our landlord is happy to subsidise us and others. His investment logic seems to be simple,buy and never ever sell. ( I have been told as much)

Now heres something even more interesting. In the last few weeks I have come across 2 sets of people who are renting places for FREE! as developers/owners wait for planning permission or rezonning (very dubious), invited squatting, ok its free security but hang on a sec.... know what I mean.


----------



## Marie

Posters on this thread are very knowledgeable and canny and I myself have been a bear since 2001 to the extent of selling off a Dublin house in 2003 (against a cacophany of advice to hang onto it as a rental on the grounds that 'you can't go wrong' 'prices can only go up' etc., etc.) but as far as the topic of this thread is concerned _- public_ sentiment towards the housing market - that is a long way away from the views expressed here.I've just returned from a visit to Dublin where I was shocked and concerned that a number of friends and family members were gung-ho about the economy and had 'released equity' on their PPR's, where the cost of essential groceries and ordinary activities (public transport,  books and newspapers) have risen alarmingly_, _where the half-dozen young foreign nationals I spoke with in the course of my visit were exhausted and cynical, planning to leave their domestic and/or 'leisure industry' to migrate to mainland Europe as soon as possible, and where a former neighbour insisted I had been foolish to sell up because the garden _(the garden_!!!) would now be worth over 100K and there were queues of immigrants needing housing.  He appeared unable to hear my response -that property-prices were artificially inflated, that at that precise moment there were 54 properties for sale around us where 3 years ago there were never more than 10 available at any one time, that multinationals were getting restless, that the foreign workers were preparing to leave etc., etc.   It suits people to feel secure and lucky; facts and rationality have very little to do with it.


----------



## CelloPoint

I had the misfortune of having to travel to "Blanchardstown Town Center" last weekend. There was a sign on one of the housing developments at the side of some roundabout saying "if you lived here you'd be home by now" (I think it was called the pheonix racecourse or something) - I nearly crashed the car with laughter!


----------



## 2nz

Bedsit said:


> [broken link removed] Has a very approriate street name as well


 
This is the reason why it all gonna fall apart. It's like Dotbomb!
I work in IT and remember the crazy days before that bubble exploded....it was all "But it's a different world, blah, blah, blah" and lunatics were paying millions for business that only existed on paper.

The bulls will probably say: "Ya can't compare the stock market to this, this is property, tangible land, God's not making anymore, etc, etc" Except now, there's loads with a sizeable amount vacant and when the investors leave on mass......booooom


http://irishhousepricesfalling.blogspot.com/


----------



## Maine

fatmanknows said:


> *Regulator wants Credit Union debt action*
> 
> [broken link removed]
> 
> Bet on a number of these bad debts to be deposit loans for the FTB. Would'nt fancy underwriting the loan book of any Irish Lender at the minute.


 
Credit Unions are a problem waiting to happen.  

The cut in the tracker rate by NIB will boost the mortgage/housing market as it effectively neutralises 2 interest rate rises. It will force the other banks to match and seek other ways to boost margin.  However it increases the risk to the banking sector as it becomes less profitable.


----------



## blindjustice

http://www.boards.ie/vbulletin/showpost.php?p=52198881&postcount=1009

another nice graph


----------



## JayDub

blindjustice said:


> http://www.boards.ie/vbulletin/showpost.php?p=52198881&postcount=1009
> 
> another nice graph


Looking at that graph is like seeing my mother in law naked, scary.


----------



## ninsaga

JayDub said:


> Looking at that graph is like seeing my mother in law naked, scary.



So you have seen her naked then


----------



## redo

Old price 470k
Grange Manor, Lucan, Co.  Dublin.


New price 450k
[broken link removed]


----------



## Dipole

redo said:


> Old price 470k
> Grange Manor, Lucan, Co.  Dublin.
> 
> 
> New price 450k
> [broken link removed]



Blank house and bland furniture; Another ex-investment property.  All the investors are selling up and liquidating their assets.  Happy to drop their asking price just to lock in their profit.
Why would anyone buy in to this market when so many are tripping over themselves to get out.


----------



## Marie

blindjustice said:


> http://www.boards.ie/vbulletin/showpost.php?p=52198881&postcount=1009
> 
> another nice graph


 
Oh dear oh dear......... that is big trouble!!  However I reckon if you showed that to 20 passers-by in a Dublin street 15 would interpret the rising trajectory to mean they should rush off to the EA and buy another two as 'property is rising'.  The bubble is based, in my view, on a mix of self-delusion and real misunderstanding of economics and how it all fits together.


----------



## blindjustice

http://www.askaboutmoney.com/showpost.php?p=296629&postcount=1

Whats wrong with this picture  ^


and :  http://www.askaboutmoney.com/showthread.php?t=38613
and here :

http://www.askaboutmoney.com/showthread.php?p=296768&posted=1#post296768

dont have to go far to see whats going on !


----------



## thewatcher

The vultures are begining to circle,sellers still trudging across the desert. How much water is out there though ? 

Buyer asks for 10K off on exchange of contract day


----------



## Harrogate

howstrange said:


> [broken link removed]
> 
> I wonder what they will be saying for the last 6 months of this year!! I bet you wont hear any reports about stats for the last 6 months of 2006. You will just hear that house prices rose x% for the year as a whole!


 
Yes ,and if the year-on-year figures go negative you'll get the vested interests ssying how much prices have risen over 5 years or 10...as well as saying it's an opportunity to buy..


----------



## conor_mc

blindjustice said:


> http://www.askaboutmoney.com/showpost.php?p=296629&postcount=1
> 
> Whats wrong with this picture ^


 
That's just amazing. It really makes you wonder why people get into property investment, what's their goal?

He's got 2.55m worth of property generating just 3.6% net yield and he wants to wash away his gains by _releasing equity?_ Surely the idea should be to either a) eventually own all (or enough) of the properties outright so that the rent provides you with a regular monthly cashflow in retirement or b) sell up, bank almost €1m and invest elsewhere in order to generate monthly cashflow.

Just looking at his rent-roll, I'd imagine its only just about paying the mortgages anyway.

As for the 33% every 5 years prediction.... surely he can't expect any market to behave in such a linear fashion. What happens if it rises 300% in 10 years, and only 2% over the next 5 years????


----------



## Sidewinder

conor_mc said:


> That's just amazing. It really makes you wonder why people get into property investment, what's their goal?
> 
> He's got 2.55m worth of property generating just 3.6% net yield and he wants to wash away his gains by _releasing equity?_ Surely the idea should be to either a) eventually own all (or enough) of the properties outright so that the rent provides you with a regular monthly cashflow in retirement or b) sell up, bank almost €1m and invest elsewhere in order to generate monthly cashflow.
> 
> Just looking at his rent-roll, I'd imagine its only just about paying the mortgages anyway.
> 
> As for the 33% every 5 years prediction.... surely he can't expect any market to behave in such a linear fashion. What happens if it rises 300% in 10 years, and only 2% over the next 5 years????



And he seems to be expecting 100K per annum in MEW? Every year from mow till he shuffles off? I'd bet most of those mortgages are IO too, and possibly he is actually subsidising his tenants overall. _And _he's looking to MEW his _best-performing_ assets. Leaving him with a junk portfolio. WTF? 

It looks like the guy doesn't have much of a clue about finance or investment (only property, because it always goes up), yet the bank have allowed him to build up a modest property empire. This dude is most likely going to end up badly burned...


----------



## thewatcher

conor_mc said:


> That's just amazing. It really makes you wonder why people get into property investment, what's their goal?
> 
> He's got 2.55m worth of property generating just 3.6% net yield and he wants to wash away his gains by _releasing equity?_ Surely the idea should be to either a) eventually own all (or enough) of the properties outright so that the rent provides you with a regular monthly cashflow in retirement or b) sell up, bank almost €1m and invest elsewhere in order to generate monthly cashflow.
> 
> Just looking at his rent-roll, I'd imagine its only just about paying the mortgages anyway.
> 
> As for the 33% every 5 years prediction.... surely he can't expect any market to behave in such a linear fashion. What happens if it rises 300% in 10 years, and only 2% over the next 5 years????


 
He's done well all the same up to this point,it just shows that anyone that hit their 30's (with a half decent job i presume) in the Ireland of the 1990's could make a fortune even when they didn't know what they were at,it's a pity i was still in school back then  .Don't think we'll ever see all these factors come together again.

It also shows the reckless overlending by the banks in true contrast,the chap believes property never goes down so he will be crucified in a bust as he is leveraged so high and he won't have been looking out for the signs to make a quick exit.I'm sure he's not the only one out there,so what are the banks going to do with all these "investment properties" they have mortgages on in a crash ?


----------



## Open_Window

Ahh, this reminds me of a great PR campaign run by SHarewatch.com, pre stock bubble. To get punters to sign up for a new online share dealing service.

Sharewatch.com gave you a notional 100K to go play with on the FTSE 250 & 100. The purpose as to give you a feel of their online trading engine, handons. I spent about a 3months on it (in dial up days, i know I know..).

If I remember there was a few grand in real money as a prize given to the best trader at the end. ( I was close to the top at one stage, very close, oh i could almost touch the #1 !!!, just one more trade God! PLEASE!)

Well not having much of a clue about stock but fancying my chances I signed up and starting spending like there was no tomorrow (that was yet to come). 

So I spread bet (well I believe thats what I did...) buying shares across the board, it was a common sense approach. Full well knowing that shares go up and down. I managed to gain when I lost usually always, if I was treading water, janey, I can't remember.

Now after 3 months I think I had managed to make about €16,000 on top of my starting 100K. Notional of course. 

Not bad for 3 months work sitting on the old scratcher (this is the the bit were you should resist flipping from "hang on I think I could do this for real....", which I managed to do, since having cash in those days saw to it, some things still haven't changed  )

Whoa, what a a trip down memory lane. Oh it was all a game a bit of fun. A little like on of those dream you have, you're rich and then you wake, still  thinking .. "what will I spend that pot of gold on... DOH!".

Pity about people who did it for real. It got nasty a year or so later if any one remembers  ([broken link removed].

Yea, some things never change. 

Ouch!


----------



## JayDub

Open_Window said:


> Pity about people who did it for real. It got nasty a year or so later if any one remembers  http://www.stock-market-crash.net/nasdaq.htm


The graph on the above link could look the same as the Irish property market graph in a couple of years.


----------



## JayDub

Go the link below and substitute Florida and America with Ireland, substitute Americans with Irish and the 1920's with 1990's, what comes to mind...

http://www.stock-market-crash.net/florida.htm


----------



## Calina

I think desperation is already starting to creep in.

http://www.unison.ie/irish_independent/stories.php3?ca=9&si=1706228&issue_id=14768

They seem to be frantic for buyers.

My basic premise is that not that stamp duty is the problem but that house prices are the problem. Whether they like it, a correction is necessary.


----------



## Maine

4





Calina said:


> I think desperation is already starting to creep in.
> 
> http://www.unison.ie/irish_independent/stories.php3?ca=9&si=1706228&issue_id=14768
> 
> They seem to be frantic for buyers.
> 
> My basic premise is that not that stamp duty is the problem but that house prices are the problem. Whether they like it, a correction is necessary.


 
The PDs were supposed to be about supporting business and making the economy more competitive.

Yet the comments on stamp duty showing an amazing lack of basic understanding of Irelands finances. Cut stamp duty and either income tax rates have to go up by a few % or corporate tax rates have to go up significantly...... towards 20%. Ref Davys report this week.

We are going to build enough houses for c 250,000 people this year - when will politicians stand up and say there will be more houses than people in Ireland in a few years instead of ramping up the panic in order to win votes.

PDs would be better off reading K barringtons column in the SBP today- no relation etc


----------



## Remix

Maine said:


> 4
> 
> PDs would be better off reading K barringtons column in the SBP today- no relation etc


 
Here's the [broken link removed]


----------



## Marie

blindjustice said:


> http://www.askaboutmoney.com/showpost.php?p=296629&postcount=1
> 
> Whats wrong with this picture ^
> 
> 
> and : http://www.askaboutmoney.com/showthread.php?t=38613
> and here :
> 
> http://www.askaboutmoney.com/showthread.php?p=296768&posted=1#post296768
> 
> dont have to go far to see whats going on !


 
Well at least _one _of these individuals is sufficiently in contact with reality to be having sleepless nights.   Does anyone here think the Irish property situation will encounter the perfidious 'chain' phenomenon where each seller is dependant on successful completion of the selling-on of their buyer's PPR...........or are sellers (whether upgraders or investors) almost exclusively dependant on FTB's?  If the latter then the death-throes of the property market can - surely - go on for a considerable period of time as developers and financial  institutions continue to stimulate confidence and demand by throwing in gifts such as paying legal fees etc?


----------



## RiceCakes

An interesting story about how the government plans on raising tax take if Stamp Duty is abolished.


> Tele-Traffic's business is not limited to the UK. Ireland has bought more than 400 laser cameras from their company - and over there, the government is quite open about using cameras to raise revenue.
> 
> Mr Ricketts said the Irish government had made an election promise to reduce stamp duty and had made it clear they would make up the lost revenue from speeding fines.
> 
> 'We have produced for them a new system to make up that revenue,' Mr Ricketts said. 'So they are going the opposite way to the UK Government. They are actually openly promoting speed enforcement as their revenue raiser.'



Hmmmmmmmmmm...


----------



## Duplex

RiceCakes said:


> An interesting story about how the government plans on raising tax take if Stamp Duty is abolished.
> 
> 
> Hmmmmmmmmmm...


 

That plan has a certain elegance.  Continue to encourage long distance commuting by tinkering with stamp duty and recover the money lost to the exchequer by fining parents speeding home to see their children for a few short minutes before they go to bed.


----------



## Open_Window

Hang on a sec!  

This is a political bombshell, I am not koking here at all.



> Tele-Traffic's business is not limited to the UK. Ireland has bought more than 400 laser cameras from their company - and over there, the government is quite open about using cameras to raise revenue.
> 
> Mr Ricketts said the Irish government had made an election promise to reduce stamp duty and had made it clear they would make up the lost revenue from speeding fines.
> 
> 'We have produced for them a new system to make up that revenue,' Mr Ricketts said. 'So they are going the opposite way to the UK Government. They are actually openly promoting speed enforcement as their revenue raiser.'



*I want to know who 






			THEY
		
Click to expand...

 are in the Irish Government who Mr Ricketts spoke to and I want to know right now. As it seems the nature of these comments the intention & content of dailouge is clear.*

Its also interesting to note that as far as Mr Ricketts is concerned 


> the Irish government had made an election promise





> he is concerned,



Thankfully for us Mr Ricketts has made his comments from the relative comfort & saftey of the UK and probably is not liable to any Irish Libel laws (which I am not familiar)

I think we need to see a statement on this issue right away form the PDs, since they have thrown it into the public arena and it can only be the PD's who have spoken to 

1) Who/What dept  spoke to Tele-Traffic

2) Who/What dept has commissioned this "new system"

3) The timeline of such enquiries.

4) Who made the decision to plan for a "Revenue" orientated "traffic camera" 
set-up which is contrary to public road safety.

5) Why has Mr Rickkets been led to believe that the Irish Government mad e apromise that future Government policy is to reduce stamp Duty. This is merely an off the cuff remark in the early hey days of McDowells Primacy as PD leader, a junior party who could easily be left out of Government tomorrow if that was the wish of Bertie. Has this the blessing of FF?

I am sure there are more questions, please post up similar points that need to be clarified.

Lets get some answers. I'm off to email the reporter and such.

Extra comment....

So we have private UK companies already in the know when it comes to future Irish tax policy!

I believe this goes against the remit of the constitution, they are for the improvement of public road safety and not a mere revenue generating scheme.

Another exmaple of the currents Governments smoke & mirros approach with lashing and lashing of spin.


----------



## thewatcher

Yea right,that might work in a country with 56million people,but not here.
For a start your not going to get any money out of our foreign registered friends or the 100,000 uninsured drivers on the road.
The fact that you get points with every speeding fine means to make up that kind of revenue you'd have to put half the country off the road.
Might sort out the Gridlock thought !


----------



## RiceCakes

Must admit I was a little shocked that a UK business man seems to know more about Irish political decisions behind the scenes than even our own journalists here.
Not a speeder and not a FF voter so not suprised at all (beyond caring) by let more signs of corruption and self interest at the highest levels any more, hoping to vote this shower out come election day.
For the record am totally against stamp duty abolition :-

1) Prices will rise to make up the shortfall amount 
2) All the public will pay for the developers bonanza - through higher taxes elsewhere- this hurts ALL lower income earners, not only the ones rich enough to be able to afford a first time mortgage of 300K + !!
3) The rich benifit most - they get the greatest savings

I wonder what the Irish "new system to make up that [Stamp Duty] revenue" entails..
Duplex may have been joking, 





> Continue to encourage long distance commuting by tinkering with stamp duty and recover the money lost to the exchequer by fining parents speeding home to see their children for a few short minutes before they go to bed.


  but wouldn't suprise me at all given this governments attitude if there was an element of truth.


----------



## Sidewinder

Open_Window: Yer absolutely right, these are questions that need answered immediately. I've shamelessly plagiarised your post above on a couple of other boards on the Interwoogie to get more exposure to the scandal. Hope you don't mind


----------



## Calina

The questions need to be answered yes - but you can't be sure that this guy is, strictly speaking, telling the truth either. The remit of the cameras is not to be revenue generating. They will probably wind up being revenue generating knowing this country - but their primary remit is as a deterrant, and if they work as such, they will not work as a revenue generation tool. 

On the other hand, examination of rentals/BTLs/stamp duty evasion will probably be a much bigger revenue generator than the speedcams will when the State realises it needs money due to a fall of in stamp duty. And that fall off will happen as the number and value of house sales starts to fall. That has little to do with any election promise.


----------



## Maine

As reported in the Sindo per Patrick Honohan of World Bank 

Irish credit institutions have recently become net importers of funds to Irish residents on a huge scale: 41pc of GDP by the end of 2005.  This has changed with astonishing speed - up from about 10pc at end-2003.

IMO there will be no repossessions problem because the banks know foreign banks will stop lending if they think there is any problem.  Hence there will be loads of mortgage holidays, conversion to IO etc - anything to stop having to describe the mortgage as a bad debt


----------



## Open_Window

Sidewinder said:


> Open_Window: Yer absolutely right, these are questions that need answered immediately. I've shamelessly plagiarized your post above on a couple of other boards on the Interwoogie to get more exposure to the scandal. Hope you don't mind



Cool Sidewinder, as long as you linked and/or credited as such thats cool. 

Yea I don't think anyone has quite grasped what has just happened. What seems like a realtively controversial topic but one that would probably fade off the radar in a few days is explosive in the most extreme. 

*A UK company has already developed a "new system", so it must be paid for surely or invoiced as such with costs agreed already!!!!*

That system is geared to making *"revenue"* and its no secret. Its now in the public sphere not via a leak but a honest admission via the spokesperson of a UK company (Mr Ricketts) charges with delivery (as a sub contractor). 

Who has must have been told by whomever in the Irish Government its to offset the apparent tax revenue loss becasue of the imminent abolition of any stamp duty via a claw back in active "revenue" generation via a new system of speed cameras optimized to do the job as efficiently as possible.

This is NUTS! How the Hell can a subcontractor know so much about the inner working of Government never mind the scandalous way it is being used against the public who are paying for the bloody things in the first place (whether they want it or not!).

Have you posted it onto politics.ie

Man this is massive, the PDs have been caught red handed. 

Its hilarious how it has happened.

Perhpas we are offf topic here so maybe we need to move respective posot to a new topic or area?? I have no idea how big this BB is I am only a newbie here as such.



Calina said:


> The questions need to be answered yes - but you can't be sure that this guy is, strictly speaking, telling the truth either. The remit of the cameras is not to be revenue generating. They will probably wind up being revenue generating knowing this country - but their primary remit is as a deterrant, and if they work as such, they will not work as a revenue generation tool.




HAve you read this, I am not so confident that this man is fibbing seems to be a rather candid admission,



> His unguarded comments, made to an undercover reporter posing as a prospective buyer of speed cameras, will add new weight to the public's perception that the gadgets are designed more for making money than improving road safety.
> 
> The Tele-Traffic boss, Jon Bond, who was until a few months ago the police Chief Superintendent in charge of speed cameras in Warwickshire, urged our reporter to place an order and promised: 'There will be so much money coming in you won't know what to do with it.'





> On the other hand, examination of rentals/BTLs/stamp duty evasion will probably be a much bigger revenue generator than the speedcams will when the State realises it needs money due to a fall of in stamp duty. And that fall off will happen as the number and value of house sales starts to fall. That has little to do with any election promise.


I agree there, I personally think the Irish GOvernment has lost billion in potentially taxable Income.

Its the biggest balck economy in the Irish state after drugs I honestly recokon.


----------



## Calina

The guy is trying to sell something. A little pinch of salt might be useful.

For the record, they have speed cameras all over France bringing in money - but their chief success has been in slowing people down and cutting their road death count by a third in five years. Not only that, the amount of money they are bringing in in fines - in a country with a population around 15 times greater than Ireland - is running at €200million a year according to figures from 2005.

Both in France and Australia, practice shows that if you start controlling speed and effectively punishing people for it with fines and points penalties, they slow down. There is no way we'll replace stamp duty losses with speeding fines. 

We'll have to find it from somewhere because house prices are stalling so an ongoing increase in stamp duty funds is unlikely, and if the market either stops dead with a stand off, or prices fall, the result is the same. Tax take will be down. 

In any case, I fail to see how - replacing income from stamp duty aside - this is even remotely relevant to the current view on house prices which still appears to be "they're too high, but they ain't ever going to fall ". 

Bleurgh.


----------



## ajapale

OpenWindow,
Please stop multiple [SIZE=-1]*consecutive *[/SIZE]posting. Ive merged your last threee consecutive posts.

aj


----------



## Maine

*1 St Margaret's Park*, Malahide, Co. Dublin

On the market 6 months - the price has just been dropped 100k. During the spring peak initially think they were looking for around (probably above) 1.3m hence real fall is bigger, sellers clearly getting nervy that they may be still selling come April 07. Its been listed on myhome at 1.2m all summer.

[broken link removed] 

1,200,000

[broken link removed]=

1,100,000


----------



## howstrange

20K price drop. Cant find the cache link for the old price but has been on the market for a couple of months i think.

Old Price: 395K

Now: 375K

[broken link removed]


----------



## Humdinger

Maine said:


> 4
> 
> 
> Yet the comments on stamp duty showing an amazing lack of basic understanding of Irelands finances. Cut stamp duty and either income tax rates have to go up by a few % or corporate tax rates have to go up significantly...... towards 20%. Ref Davys report this week.
> 
> 
> Do the government have to replace the revenue from any future stamp duty adjustments. How about taking some cost out of the system which is the first place that most companies look to try and balance the books. How about tackling the bloated, benchmarked civil service headcount !!


----------



## JayDub

Anybody hoping a reduction in stamp duties in the upcoming budget will most likely be disappointed,

Major Budget cuts in stamp duty ruled out
http://www.unison.ie/stories.php3?ca=9&si=1706549&issue_id=14769


----------



## comanche

Humdinger said:


> Do the government have to replace the revenue from any future stamp duty adjustments. How about taking some cost out of the system which is the first place that most companies look to try and balance the books. How about tackling the bloated, benchmarked civil service headcount !!


 
Is that not one of the probs that the country faces in the future

1. Large percentage is employed directly & indirectly in construction, once that wains the exchequer has less money in its coffers
2. Also a large percentage of people employed in the civil service at the moment, who can't be employed if the coffers aren't full without raising taxes

I don't have the figures to hand on the numbers employed in these sectors at the moment, but I know that number 2 is a scary figure also

Unfortunately once this bubble bursts the knock on effects are going to be pretty nasty. 

Interesting to see what is going to happen in the budget, tampering with stamp duty may extend this party a little longer, but the more you drink the worse the hangover... Anyone with aspirin should clear up!


----------



## Open_Window

THe so called "Standoff" by FTBers will turn to pessimisim as interest rates increase and no stmap duty exemption announced.

There may be a reduction in VAT but it would have to be more tha 2-3% to make a real difference, it seems Germany is rasing it VAT to 20% I think (or very close to, perhaps 18.5% from 16.5%).

There is talk that Ireland will lower its VAT to 18% to make it meaningful.

Could EU Governmnets be quietly harmoninsing VAT across the EU without such an official policy.

Currently VAT is the largest form of TAX revenue for the Irish Government so I don't know if they can afford to lower it, they have become addicated to HIGH VAT & A Relatively LOW INCOME TAX (i don't agree) regime.

Prepare for more stealth taxes I say.


----------



## liteweight

VAT on property is 13.5% in Ireland.


----------



## thewatcher

Everything this government does cost more than "initially budgeted" for,if they were running a household they would have been seen to MABS long ago.

Whether infastructure project or social welfare spending they can get nothing right.

http://www.rte.ie/news/2006/1016/migrants.html

Has anyone got the balls to say no to the little angels ?This will just start off another round of pay/weekly working week reduction demands from the rest of the public service.

http://www.rte.ie/news/2006/1016/nurses.html


----------



## ajapale

Hi TW,

What has your last post got to do with the debate surrounding  *"Current public sentiment towards the housing market?"  *?

aj


----------



## JayDub

Why are Daft.ie so slow to update their house price index, the index has been in decline since April and has not been updated since July. They have 2 full months of stats for August and September, I'm sure these 2 months of stats don't paint a pretty picture.

[broken link removed]


----------



## japanman

Hi
This is my first post but I've been reading this thread for a long time. I returned to Ireland last year from Japan and was looking forward to my new job(double my Japanese salary) and new life in Ireland but things are not exactly the same as friends and family were telling me before I came back.

I went back to Japan for a month in September to look at houses there again and you'd be amazed what you can get for E250,000 close to good schools, shops and main train lines, all this with 20 year fixed rate mortgages at 3.19%. 

However, since I returned from my holiday a few weeks ago things have been looking up. An estate agents rang asking if I'm still interested in an apartment I viewed in July, now E30,000 cheaper at E340,000. 
I'm playing the waiting game now. Paying E1,000 a month in rent in Rathfarnham for apartment that would cost E550,000 to buy 
and adding a little every month tomy savings.
If things don't change big time by end 2007/start 2008 I'll emigrate again.
By the way I found this price change that I thought was interesting

E2,200,000(***You have to copy and paste this link for it to work***)
http://www.daft.ie/searchsale.daft?search_type=sale&id=99288&map_lat=53.2772758964001&map_lng=-6.4148302349078&map_zoom=14&adserver_ccid=ct1&au_id=265427&unique=10-2006.1-67.9ed9b8689a72ba08cb3492920244fe35&daftID=298eb768129dd968274aaabb75e640ae&fr=default&limit=10&offset=0

now E2,000,000
[broken link removed]

Interesting because it's a new build so the developer can afford to lower prices until he sells


----------



## thewatcher

ajapale said:


> Hi TW,
> 
> What has your last post got to do with the debate surrounding *"Current public sentiment towards the housing market?" *?
> 
> aj


 
The last couple of post were in relation government spending,tax revenues, stamp duties etc.It's all relevant to the housing market IMHO as any reduction in House price revenues whether vat,stamp duty etc. is going to leave a massive hole in the public purse.This money will have to be found from somewhere,yet the government goes on spending like this revenue is guaranteed on a future basis.
Could just have easily been posted in the "Irish Economy - Are there clouds ahead thread" if you wish ?


----------



## CelloPoint

thewatcher said:


> Buyer asks for 10K off on exchange of contract day



Wow. So we've falling prices, market flooding and gazundering - all the symptoms are there. When will the masses accept their diagnosis?


----------



## robd

liteweight said:


> VAT on property is 13.5% in Ireland.



Not to forget that it was 12.5% until the last round of Steath Taxes in the 2003 Budget added 1% to it. So maybe they'll just reverse this.


----------



## JayDub

japanman said:


> By the way I found this price change that I thought was interesting
> 
> E2,200,000(***You have to copy and paste this link for it to work***)
> http://www.daft.ie/searchsale.daft?search_type=sale&id=99288&map_lat=53.2772758964001&map_lng=-6.4148302349078&map_zoom=14&adserver_ccid=ct1&au_id=265427&unique=10-2006.1-67.9ed9b8689a72ba08cb3492920244fe35&daftID=298eb768129dd968274aaabb75e640ae&fr=default&limit=10&offset=0
> 
> now E2,000,000
> [broken link removed]
> 
> Interesting because it's a new build so the developer can afford to lower prices until he sells


 
Hi and welcome, the long link doesn't work, needs a cut and paste, heres in the link in tinyurl format

http://tinyurl.co.uk/iypj

Thats a good find. Irish prices are out of this world, 2,000,000 and it doesn't even have a jacuzzi lol


----------



## Duplex

Does it strike anyone else as strange, that the many price reductions that we are seeing in the market are not advertised as such by agents.  Its common practice in other markets to highlight a price reduction to entice buyers.


----------



## ninsaga

JayDub said:


> Why are Daft.ie so slow to update their house price index, the index has been in decline since April and has not been updated since July. They have 2 full months of stats for August and September, I'm sure these 2 months of stats don't paint a pretty picture.



Have you contacted them as asked the question?


----------



## phoenix_n

Duplex said:


> Does it strike anyone else as strange, that the many price reductions that we are seeing in the market are not advertised as such by agents. Its common practice in other markets to highlight a price reduction to entice buyers.


 
Too early. First ones will appear late nov/early dec but will become more common in feb/mar


----------



## sandymount

JayDub said:


> Why are Daft.ie so slow to update their house price index, the index has been in decline since April and has not been updated since July. They have 2 full months of stats for August and September, I'm sure these 2 months of stats don't paint a pretty picture.
> 
> [broken link removed]



Daft publish quarterly reports.  Q2 was published on the 2th August, so I would expect Q3 at the end of the month, should make interesting reading.


----------



## Eirmail

Duplex said:


> Does it strike anyone else as strange, that the many price reductions that we are seeing in the market are not advertised as such by agents. Its common practice in other markets to highlight a price reduction to entice buyers.


 
Most buyers are investors and they want to buy a property that is going up in value not down in value.

This is completely different to buying a service that holds no value such as a telephone service where obviously you want it as cheap as possible and the fact that it has recently got cheaper will not effect your decision.


----------



## JayDub

sandymount said:


> Daft publish quarterly reports. Q2 was published on the 2th August, so I would expect Q3 at the end of the month, should make interesting reading.


 
I understand that but the Daft house price index should be updated monthly, and has not been updated since July.
[broken link removed]


----------



## Duplex

JayDub said:


> Why are Daft.ie so slow to update their house price index, the index has been in decline since April and has not been updated since July. They have 2 full months of stats for August and September, I'm sure these 2 months of stats don't paint a pretty picture.
> 
> [broken link removed]


 

Your observation would seem to tie in with my question regarding the marketing tactics of agents re price reductions.  I know it seems cynical of me to even think this but are we seeing manifestations of denial in action.


----------



## Duplex

Eirmail said:


> Most buyers are investors and they want to buy a property that is going up in value not down in value.
> 
> This is completely different to buying a service that holds no value such as a telephone service where obviously you want it as cheap as possible and the fact that it has recently got cheaper will not effect your decision.


 

Well Americans have a different approach to the merits of price in marketing property.  Just an observation.
 [broken link removed]


----------



## JayDub

Has anybody noticed the advertisements for mortgages now carry something link, "Interest Rates Can Rise". You have feel sorry for the people like those in the post below.

http://tinyurl.co.uk/xazo


----------



## ajapale

Hi JayDub,

Your point about rates quoted at daft.ie being out of date is well made. Im moving that single post to mortgages and house buying.

aj


----------



## whizzbang

Supply still creeping up. Lots of people looking to sell. Daft National for sales figures. Any guesses when we'll hit 25k?

[broken link removed]


----------



## japanman

JayDub said:


> Hi and welcome, the long link doesn't work, needs a cut and paste, heres in the link in tinyurl format
> 
> http://tinyurl.co.uk/iypj
> 
> Thats a good find. Irish prices are out of this world, 2,000,000 and it doesn't even have a jacuzzi lol



I wouldn't like to be the people who paid full price when they bought off plans at the start of the year.
I find the E30,000 that the estate agent dropped off the apartment I went to look at in Firhouse more interesting because that's nearly 8% off the price of a first time buyer apartment.
I have also been tracking prices in Verdemont Blanchardstown, Loreto Abbey Rathfarnham and Earlsfort Lane lucan since July and have seen drops of E10,000 - E15,000 in all areas, although some sellers are still asking for the July prices. Two in Lucan have been for sale since July at E381,000 even though there are lots of similar houses for E370,000 now.


----------



## HighFlier

In relation to the potential for Stamp Duty reduction there is no sense in thr government reducing or eliminating this . Apart at all  from the loss of revenue the change would only help a very small minority of people whilst p*****g off everybody else who has already paid. So not an election winning strategy therefore, and believe me, no money will be spent in the next budget except where it gives electoral leverage.


----------



## phoenix_n

phoenix_n said:


> This apartment dropped from 370 to [broken link removed] this week.
> 
> Number of apartments grew from 10 on the 11th to 17 today in Glasnevin (Finglas Rd?)!!!


 
Others following suit. Similar apt dropped by 10K to [broken link removed] since last Friday.

( findx )


----------



## JayDub

Where did you find that graph.


----------



## CelloPoint

whizzbang said:


> Supply still creeping up. Lots of people looking to sell. Daft National for sales figures. Any guesses when we'll hit 25k?
> 
> [broken link removed]



Thanks for that whizz! You're doing a lot of hard work there collating the figures each day.

Could you start the y-axis at 10,000 or 12,000? Would make the ramp look more pronounced!!!


----------



## Debtwish

Agreed. Well done Whizzbang.

Looking at the graph it makes me think of all the property bulls that have used the supply/demand argument over recent years to justify higher prices. 

Will they use the same argument now to justify lower prices?


----------



## whizzbang

JayDub said:


> Where did you find that graph.



I made it, I have a system that automatically records the number of places for sale each day. Doesn't take any work once its set up


----------



## whizzbang

CelloPoint said:


> Thanks for that whizz! You're doing a lot of hard work there collating the figures each day.
> 
> Could you start the y-axis at 10,000 or 12,000? Would make the ramp look more pronounced!!!



I'm afraid I only have figures from early July! If anyone else has them I'm gladly include them.


----------



## Humdinger

Its a very pronounced trend but given that the graph starts in July, which is not strictly part of the selling season, is the July thru Oct comparison fair. In fact we should expect it look like this.
I wonder for example how this compares with the same period in 2005.


----------



## JayDub

whizzbang said:


> I made it, I have a system that automatically records the number of places for sale each day. Doesn't take any work once its set up


Excellent, you should offer a url that updates daily.


----------



## whizzbang

Humdinger said:


> Its a very pronounced trend but given that the graph starts in July, which is not strictly part of the selling season, is the July thru Oct comparison fair. In fact we should expect it look like this.
> I wonder for example how this compares with the same period in 2005.



definitly agree, I don't know how much of this is a seasonal variation, should make interesting viewing over the next few years.



JayDub said:


> Excellent, you should offer a url that updates daily.



graphing is not automated I'm afraid. 



CelloPoint said:


> Thanks for that whizz! You're doing a lot of hard work there collating the figures each day.
> 
> Could you start the y-axis at 10,000 or 12,000? Would make the ramp look more pronounced!!!



ohh, I get you know, I'll do that  the next time  make it looks like we are starting from zero  sneaky...


----------



## conor_mc

Duplex said:


> Well Americans have a different approach to the merits of price in marketing property. Just an observation.
> [broken link removed]


 
But the American market is in an outright rush for the exit doors. Our vested interests are still in the "hide it from the masses" phase.


----------



## CelloPoint

whizzbang said:


> ohh, I get you know, I'll do that  the next time  make it looks like we are starting from zero  sneaky...


Yes, Lesson 1 in "How to Lie with Statistics"


----------



## whizzbang

conor_mc said:


> But the American market is in an outright rush for the exit doors. Our vested interests are still in the "hide it from the masses" phase.



Does anyone else take offense that there are now loads of advertisments for US proeprty in Irish papers? With titles like "There has never been a better time to invest in the U$"

off loading their junk property on us! Chancers!


----------



## whizzbang

CelloPoint said:


> Yes, Lesson 1 in "How to Lie with Statistics"



a great book, if I could adjust the sample size I would


----------



## Debtwish

whizzbang said:


> Does anyone else take offense that there are now loads of advertisments for US proeprty in Irish papers? With titles like "There has never been a better time to invest in the U$"
> 
> off loading their junk property on us! Chancers!


 
_"Spend that SSIA in U,S of A..!!!.......yeeer haarr!"_

A cowboy knows there's one born every minute.


----------



## Tim123

I have been following this thread from the start with great interest. I do think house proces are insane but in saying that I have been waiting to trade up since April when I saw a house in an area I had always wanted to buy come on the market. 

This was in a small 3 year old development of just 30 houses and this was the first house within that development to come up for sale in that time so I didnt want to let it slip by. Its definetly a home for life for me so market price fluctuations are not a real concern to me right now. My job is as secure as one can be and the price was within my means given that my own property had risen by 100k over the last 2 years based on other sales in my own area.

The seller was already building elsewhere so there was no rush to complete the purchase from them.

However I have gone sale agreed 3 times since July on my own property with the first 2 buyers pulling out of the deal just before contracts were to be signed. All going well I hope to complete this sale of my own within the next 2 weeks. So the FTB market is definetly more skittish over the last 4 months or so.


Now to my real question. I have just had a valuation done on the property I intend to buy by a person from the lenders panel. They put a value of 5k over my agreed purchase price on the property and a re-instatement value of the purchase price less 100k.

Now given that some people here are saying prices could tumble by upto 50%, can some one explain to me how a house can fall below its bricks and mortar cost to rebuild it? Or can it? because a 50% drop would place this house at 65k below its rebuilding cost. Is this possible? To fall from its current market value to its rebuilding cost would take a fall of 32%. This I could understand but surely no lower?

Any opinions appraciated.


----------



## powderblue78

Anyone hear Ger Gilroy on the radio this morning.

Had Jim Power and some TD on talking about whether stamp duty will be abolished. It was the usual bull-fest (or should that be bull-sh*t-fest  ) about uncertainty about stamp duty being the only reason for a slowdown in prices increases.

Some texter said that instead of reducing stamp duty, the government should limit the length of mortgages, thereby reducing prices 

Gilroy dissed this as nonsense saying that investors would jump in immediately and people would then be renting their whole lives. These bulls are just running out of excuses, it hilarious to listen to them. The bias is unbelieveable.

I used to like this guy on "off the ball", now he just comes across as an ostrich who has leveraged one to many buy-to-lets.


----------



## conor_mc

Tim123 said:


> Now given that some people here are saying prices could tumble by upto 50%, can some one explain to me how a house can fall below its bricks and mortar cost to rebuild it? Or can it? because a 50% drop would place this house at 65k below its rebuilding cost. Is this possible? To fall from its current market value to its rebuilding cost would take a fall of 32%. This I could understand but surely no lower?
> 
> Any opinions appraciated.


 
Do you think that construction sector wages might fall a bit if there were a crash and half the sector were laid off?

What about demand for building materials? Economics 101 - demand drops, prices drop.


----------



## powderblue78

Of course it can go below the cost of building it.

While not a perfect analogy, a toyota corolla costs 15K to make and sells for maybe 20K.  10 years later, the the will sell for <5K.

The "cost" of goods is paid for the first time something is sold (assuming the manufacturer wants to make profits  ).  Anytime it is sold after that, it is purely how much buyers are willing to pay for it.


----------



## Sidewinder

Tim123 said:


> Now given that some people here are saying prices could tumble by upto 50%, can some one explain to me how a house can fall below its bricks and mortar cost to rebuild it? Or can it? because a 50% drop would place this house at 65k below its rebuilding cost. Is this possible? To fall from its current market value to its rebuilding cost would take a fall of 32%. This I could understand but surely no lower?



I'd take those "cost to rebuild" prices with a large dollop of salt if I were you. Do they include the cost of the land? Because the plot is about 40% of the cost of a new house these days IIRC. Another 25% is Government taxes, and only 35% is the actual cost of materials + builder's profit.

Plus, in _any _market (not just housing), there is _no guarantee_ - ever - that the price buyers are willing to pay for an item will be higher than the cost of production. That's how firms go bust, industries decline, and markets allocate scarce resources more-or-less efficiently. Unless you believe that somehow property is a unique asset different from any other, and that property owners are entitled to profit on every transaction by divine decree!

Thinking that house prices "can never fall below cost" is just another bull argument that displays a fundamental lack of understanding of economics, to be honest.


----------



## Arthur Daley

powderblue78 said:


> Anyone hear Ger Gilroy on the radio this morning.
> 
> Had Jim Power and some TD on talking about whether stamp duty will be abolished. It was the usual bull-fest (or should that be bull-sh*t-fest  ) about uncertainty about stamp duty being the only reason for a slowdown in prices increases.
> I used to like this guy on "off the ball", now he just comes across as an ostrich who has leveraged one to many buy-to-lets.


 
Yes he was good talking about sport but I think he's no Jeremy Paxman...........You have to bear in mind the fact that so many of their competitions etc are sponsored by banks etc. Last week it was AIB and their 2 grand FTB offer. Altough usually newstalk has been very balanced since it started when you compare it to what you get on RTE.


----------



## ajapale

Please stick to topic. If you want to discuss Newstalk please use the Letting Off Steam or the Shoot the Breeze forum.


----------



## Bedsit

conor_mc said:


> Do you think that construction sector wages might fall a bit if there were a crash and half the sector were laid off?



IMHO this is where the main problem going forward lies. If investors pull out of the market and we get back to a normal rate of house building then a lot of people will be laid off in the construction and subsequently service related sectors. As many of the people working in these sectors are immigrants, we are going to see an increase in the number of rental properties coming to market either for sale or to rent. This will eventually drive prices down in both segments of the housing market.

Also previous posters have mentioned that investors will only return to the market if they get an yield of 6%, which has prompted calls price drops of up to 30-50% in the price of property some areas. Again if there is downward pressure on rents then I think this figure could rise.


----------



## Afuera

Tim123 said:


> Now given that some people here are saying prices could tumble by upto 50%, can some one explain to me how a house can fall below its bricks and mortar cost to rebuild it? Or can it? because a 50% drop would place this house at 65k below its rebuilding cost. Is this possible? To fall from its current market value to its rebuilding cost would take a fall of 32%. This I could understand but surely no lower?.



The re-instatement cost is for insurance companies to see what they could be liable for and there's no accurate way to measure it. Of course it's possible for the price of something to fall below it's rebuild cost since that's set by supply and demand.


----------



## Tim123

Sidewinder said:


> I'd take those "cost to rebuild" prices with a large dollop of salt if I were you. Do they include the cost of the land? Because the plot is about 40% of the cost of a new house these days IIRC. Another 25% is Government taxes, and only 35% is the actual cost of materials + builder's profit.
> 
> Thinking that house prices "can never fall below cost" is just another bull argument that displays a fundamental lack of understanding of economics, to be honest.


 
I think you misunderstood me. I'm not saying thay cant fall, I'm asking can they fall? and if so why. 

The answer earlier about falling wage costs make perfect sense, And the very reason for asking is that I have never studied economics which is why I ask those who seem to have a btter understanding than I do..


----------



## Debtwish

Steady on Mr Mod.

Powerblue78 is quite right to raise the Newstalk point. Newstalk radio is currently going all out to influence public sentiment on the housing market, and that is what this thread is about, is it not?

Newstalk and their property ramping has been a bugbear of mine for many months, and it is clearly getting worse.


----------



## Calina

powderblue78 said:


> Some texter said that instead of reducing stamp duty, the government should limit the length of mortgages, thereby reducing prices



Actually I'd go so far as to say that 1) you need to limit the length of mortgages and 2) cap the salary multiples. The banks and lenders would go manic though - they're about to do nicely on increasing interest repayments.


----------



## Open_Window

THis is gas, everything is comming to pass in biblical proportions.

I reckoned car sales would dip before we saw the top of the iris Proeperytbubble and we have! 

I posted as much ages and ages ago (my timming was a year or two out). Now we have another time posted on the Irish Property Forum (around abouts the time of the rasing of the stamp duty exmeption limit t 317.5K) that soon enough people would be crying out for it to be raised it wouldn't be enough poor FTB were hard pressed and sure enough it has also come to pass.

I am seeing other things happening that many other posters said would in fact happen and they seem to have been fairly spot on, its just the timming.

YOu couldn't have scripted the last 5-10 years of the Irish boom to anything less than classic text book asset bubble after another bubble and so it goes.

Obviously people enjoy pain here in Ireland but like a good party before hand.

Its a futile effort!


----------



## topman

Maybe this is a very simplistic view point. But if house prices are stalled supposedly because of concerns over stamp duty. Then if stamp duty is reduced prices will rise to the new bands applied or if disbanded altogether.Also if nothing is altered in the budget FTB would be best to purchase because the market will return to normal i.e. on an upward slope.

The other side is that this 'blip' is not due to stamp duty concerns at all and is more to do with houses been over priced for FTB componded with interest rates going north.


----------



## Duplex

Bedsit said:


> IMHO this is where the main problem going forward lies. If investors pull out of the market and we get back to a normal rate of house building then a lot of people will be laid off in the construction and subsequently service related sectors. As many of the people working in these sectors are immigrants, we are going to see an increase in the number of rental properties coming to market either for sale or to rent. This will eventually drive prices down in both segments of the housing market.
> 
> Also previous posters have mentioned that investors will only return to the market if they get an yield of 6%, which has prompted calls of up to 30-50% in the price of property some areas. Again if there is downward pressure on rents then I think this figure could rise.


 

I agree the domino effect is the big issue with the Irish housing market.  The first domino is rampant house price inflation if that topples..........


----------



## beattie

powderblue78 said:


> Anyone hear Ger Gilroy on the radio this morning.
> 
> Had Jim Power and some TD on talking about whether stamp duty will be abolished. It was the usual bull-fest (or should that be bull-sh*t-fest  ) about uncertainty about stamp duty being the only reason for a slowdown in prices increases.
> 
> Some texter said that instead of reducing stamp duty, the government should limit the length of mortgages, thereby reducing prices
> 
> Gilroy dissed this as nonsense saying that investors would jump in immediately and people would then be renting their whole lives. These bulls are just running out of excuses, it hilarious to listen to them. The bias is unbelieveable.
> 
> I used to like this guy on "off the ball", now he just comes across as an ostrich who has leveraged one to many buy-to-lets.


 
Yea have to agree on this one. I have to admit that I was quite spprised that  he didn't have two out and out bulls on as Jim Power was quite moderate I thought (given that he works for a bank). It does seem like Gilroy has got a vested interest in keeping the bubble going.


----------



## Humdinger

topman said:


> Maybe this is a very simplistic view point. But if house prices are stalled supposedly because of concerns over stamp duty. Then if stamp duty is reduced prices will rise to the new bands applied or if disbanded altogether.Also if nothing is altered in the budget FTB would be best to purchase because the market will return to normal i.e. on an upward slope.
> 
> The other side is that this 'blip' is not due to stamp duty concerns at all and is more to do with houses been over priced for FTB componded with interest rates going north.


 

There is an election next year and the stamp duty card is about to be played for short-term votegetting impact - the question politicians are asking themselves is how do we keep the feelgood factor high until the day after the election. Stamp duty, SSIA's etc all fall into the same category......political selfserving game playing


----------



## Neffa

topman said:


> Maybe this is a very simplistic view point. But if house prices are stalled supposedly because of concerns over stamp duty. Then if stamp duty is reduced prices will rise to the new bands applied or if disbanded altogether.Also if nothing is altered in the budget FTB would be best to purchase because the market will return to normal i.e. on an upward slope.
> 
> The other side is that this 'blip' is not due to stamp duty concerns at all and is more to do with houses been over priced for FTB componded with interest rates going north.


 
IMO, the bulls have taken to the "it's all about uncertainty in stamp duty" message as the "safe/politically correct" explanation about why the market is wobbling/starting to fall in places to make everyone feel more confident that everything's still ok. I believe that we are in the early stages of a sentiment shift and stamp duty is a relatively minor issue.


----------



## Sidewinder

Tim123 said:


> I think you misunderstood me. I'm not saying thay cant fall, I'm asking can they fall? and if so why.
> 
> The answer earlier about falling wage costs make perfect sense, And the very reason for asking is that I have never studied economics which is why I ask those who seem to have a btter understanding than I do..



Sorry if it sounded like I was having a go, I tend to have a very abrupt writing style 

It's got nothing to do with the wage costs though. You have to understand that prices are set at the margin i.e. something is only worth what the last buyer was willing to pay for it.

If buyers are only willing to pay €5 for widgets, then the market price of widgets is €5. Buyers neither know, nor care, that it costs WidgetCo €6 to make the things. In this case, either WidgetCo is inefficient, or the market no longer values widget production, and so resources will move from widget production to making something else that the market values higher (and at a profit). This is the fundamental essence of capitalism and market economics. And no, property isn't "different".

The cost of production, or the replacement cost, or the rebuild cost, is completely irrelevant in terms of setting _prices_. Those things matter only to insurance companies, and nobody else.

Prices are set by supply and demand - by the number of buyers, what they are willing to pay, and the number of units available for purchase.

To take it one step further, in housing we usually have second and third and fourth hand buyers. The cost of production was only remotely relevant the _first_ time the house was sold - and then only relevant to the builder and whether or not he was going to make a profit. The first buyer neither knows nor cares whether the builder will make a profit. And when he sells on, he will get precisely what the second buyer is willing to pay - no more, no less. And the second buyer certainly doesn't care what the house cost to build x years ago.


----------



## topman

[IMO, the bulls have taken to the "it's all about uncertainty in stamp duty" message as the "safe/politically correct" explanation about why the market is wobbling/starting to fall in places to make everyone feel more confident that everything's still ok. I believe that we are in the early stages of a sentiment shift and stamp duty is a relatively minor issue.


Neffa. Where do you think it will be after the budget ?


----------



## Arthur Daley

*Give first-time buyers VAT back - CIF*

http://www.rte.ie/business/2006/1016/construction.html

Nice one! What about all the poor old FTBs, scapping and saving for the last 3-4 years of this irresponsible bubble.............

Give it a few years and tv in Ireland could be littered with those ads you see on cable channels in the UK. You know - claim later on you were missold a mortgage or how to consolidte your debt that has got totally out of hand.


----------



## beattie

Why don't the CIF just reduce the price of their new builds by the VAT equivalent if they are so concerned for the poor old FTB. There must be a huge number of cancellations for their members for them to kickstart this poor man act


----------



## Neffa

topman said:


> Neffa. Where do you think it will be after the budget ?


 
Which bit - sentiment, stamp duty or something else?


----------



## topman

What do you think the market will do if there are no changes in stamp duty in December's budget.


----------



## Bedsit

Anyone know of a link to the number of housing starts?


----------



## CelloPoint

Arthur Daley said:


> *Give first-time buyers VAT back - CIF*
> 
> http://www.rte.ie/business/2006/1016/construction.html
> 
> Nice one! What about all the poor old FTBs, scapping and saving for the last 3-4 years of this irresponsible bubble.............
> 
> Give it a few years and tv in Ireland could be littered with those ads you see on cable channels in the UK. You know - claim later on you were missold a mortgage or how to consolidte your debt that has got totally out of hand.



Absolutely sickening. This is all so unbelieveably predictable - weren't we discussing on here already how the gubberment will be called upon to bail FTBers out of the unsustainable mess they've found themselves in? I can just imagine the kind of taxation gymnastics that the CIF have in mind...

My tax money being used to buy votes and dig FTBers out of holes effectively enriches the most powerful lobby groups and I will leave this country should this happen - Oz looks like a good place these days - I believe there's a shortage of people with my skills over there at the mo.


----------



## Neffa

topman said:


> What do you think the market will do if there are no changes in stamp duty in December's budget.


 
So, my _opinion _since you asked is:

1. Even if we get interest rates sticking at 3.5%, I suspect that 2007 will see no upward price movement in the market. Expect sales cycles to continue to lengthen and the "buyers market" mindset to become more entrenched. Investors will slowly drift away given negative yields and the promise of capital appreciation vanishing in front of their eyes. Affordability is running away from buyers through rate rises faster than wage rises and clever financing can catch it. Net result - they can afford less at the bottom of the market and prices (slowly) readjust accordingly. SSIA money will offer some protection but that will fade by autumn 2007.

2. If rates increase to 4.0% or higher, I expect a more sudden change in sentiment as the IO mortgage rises for investors really start to bite and expect a large number of novice investors to get scared and try to get out. (Bear in mind that an investor with an IO mortgage will have seen repayments rise by 60-70% in an 18 month timeframe while rents rise by 5% if at all.) If this plays out, then expect to see some obvious (15-20%+) price drops across the board.   SSIA's will not make such an impact as the confidence drains from the market more quickly.

I firmly believe that we are all about to learn a painful lesson that "prices can do down as well as up." You should see the looks of astonishment I have had in work from showing people the "falling prices" blog. Once this becomes better understood, then people will get very wary.


----------



## arbus

Deutsche Bank Research "US house prices declining: Is Europe next?"
[broken link removed]

"Ireland achieves the highest overal risk score with 6.4 points, followed by Spain with 5.9 points. Thus, our model identifies these 2 countries as the ones where house prices are most likely to correct without any external stimulus"

"We therefore feel confidend that spain and Ireland can be considered the European countries with the biggest housing market risk"


----------



## Debtwish

Neffa said:


> I firmly believe that we are all about to learn a painful lesson that "prices can do down as well as up." You should see the looks of astonishment I have had in work from showing people the "falling prices" blog. Once this becomes better understood, then people will get very wary.


 
This is the power of the internet. It is a weapon of truth fighting against the vested interest controlled media. Newstalk et al can spin all they like for 10 mins every other day, but this thread (and countless others on other sites) will always be around 24x7 for those that really want to see what is happening out there.

Compared to other property markets around the world the Irish one is very small. Therefore, once sentiment turns it could turn very quickly. And the internet could play a very important part in that.


----------



## JayDub

Anybody care to guesstimate the number of unsold section 23 properties currently on the market? I'd guess there must over 5,000 out there and the prices of these will drop heavy after December 31st.


----------



## beattie

arbus said:


> Deutsche Bank Research "US house prices declining: Is Europe next?"
> [broken link removed]
> 
> "Ireland achieves the highest overal risk score with 6.4 points, followed by Spain with 5.9 points. Thus, our model identifies these 2 countries as the ones where house prices are most likely to correct without any external stimulus"
> 
> "We therefore feel confidend that spain and Ireland can be considered the European countries with the biggest housing market risk"


 

I can see the rubbishing of this report....Ah what would those Germans know anyway, sure didn't we break the mould when it comes to having a successful economy, who are they to be lecturing when they have ~10% unemployment ...etc. Maybe Mr Gilroy on Newstalk can get a few sages on tomorrow morning to put this one to bed..


----------



## CelloPoint

arbus said:


> Deutsche Bank Research "US house prices declining: Is Europe next?"
> [broken link removed]
> 
> "Ireland achieves the highest overal risk score with 6.4 points, followed by Spain with 5.9 points. Thus, our model identifies these 2 countries as the ones where house prices are most likely to correct without any external stimulus"
> 
> "We therefore feel confidend that spain and Ireland can be considered the European countries with the biggest housing market risk"



Shhhhhhh!!!! Someone's gonna have a lot of work to do counteracting that report if the general public get wind of it!


----------



## Sarah W

One point (I don't think) anyone has raised as yet is that a great many amateur investors will have €254/€508 a month in spare cash each month once the SSIAs come to an end and may divert this money to subsidise their investment properties against increased income only mortgages. From my experience these properties are viewed as long term investment and an additional/alternative pension fund or their children's inheritance and it will take a lot for them to abandon this mindset. 

Sarah

www.rea.ie


----------



## StoppedClock

Sarah W said:


> One point (I don't think) anyone has raised as yet is that a great many amateur investors will have €254/€508 a month in spare cash each month once the SSIAs come to an end and may divert this money to subsidise their investment properties against increased income only mortgages. From my experience these properties are viewed as long term investment and an additional/alternative pension fund or their children's inheritance and it will take a lot for them to abandon this mindset.
> 
> Sarah
> 
> www.rea.ie


 
Sarah I am very interested in one of your income only mortgages, can you send me some details?


----------



## NewMan

beattie said:


> I can see the rubbishing of this report....Ah what would those Germans know anyway, sure didn't we break the mould when it comes to having a successful economy, who are they to be lecturing when they have ~10% unemployment ...etc. Maybe Mr Gilroy on Newstalk can get a few sages on tomorrow morning to put this one to bed..


 
The OECD report of a few weeks ago contradicts this report. Is that a good enough source????


----------



## sandymount

Sarah W said:


> One point (I don't think) anyone has raised as yet is that a great many amateur investors will have €254/€508 a month in spare cash each month once the SSIAs come to an end and may divert this money to subsidise their investment properties against increased income only mortgages. From my experience these properties are viewed as long term investment and an additional/alternative pension fund or their children's inheritance and it will take a lot for them to abandon this mindset.
> 
> Sarah
> 
> www.rea.ie



People view it as a long term investment until the value starts falling. Investor sentiment can change if prices level off/fall.


----------



## hmmm

sandymount said:


> People view it as a long term investment until the value starts falling. Investor sentiment can change if prices level off/fall.


I think Sarah's right about a large block of people, who will mindlessly continue subsidising tenants rent to pay mortgages back, even if prices stop appreciating. With couples of course the SSIA boost is more like 500 euros.

As a renter you can just sit back and enjoy the prospect of people fighting with each other to subsidise your lifestyle.


----------



## comanche

Sarah W said:


> One point (I don't think) anyone has raised as yet is that a great many amateur investors will have €254/€508 a month in spare cash each month once the SSIAs come to an end and may divert this money to subsidise their investment properties against increased income only mortgages. From my experience these properties are viewed as long term investment and an additional/alternative pension fund or their children's inheritance and it will take a lot for them to abandon this mindset.
> 
> Sarah
> 
> www.rea.ie


 

how many quarter point interest rates hikes == 254e per month on an IO mortage of 300k?

where does the capital appreciation come from in years to come with a stalled market?

how's about people who have already released equity on the PPR to fund investment properties and interest rates hikes are hitting both these properties? doesn't sound like sound investment to me?


----------



## Sarah W

StoppedClock said:


> Sarah I am very interested in one of your income only mortgages, can you send me some details?



Ooops!


----------



## walk2dewater

Sentiment can change on a dime.  Sentiment IMO has changed.  Prices were only going up because prices were going up--- think about that crucial concept for a moment.  Now consider that prices have stopped going up.  What happens next?  hmmmm.  Buying property now would be the epitome of poor timing.


----------



## whizzbang

Be nice to Sarah! She's the the only admitted property industry professional we have on the thread! We should at least give her a chance to defend the industry!

*puts bear suit back on*


----------



## StoppedClock

Sarah W said:


> Ooops!


 
A bit pedantic of me   you raised a good point though and one I had not considered before.


----------



## Neffa

Sarah W said:


> One point (I don't think) anyone has raised as yet is that a great many amateur investors will have €254/€508 a month in spare cash each month once the SSIAs come to an end and may divert this money to subsidise their investment properties against increased income only mortgages. From my experience these properties are viewed as long term investment and an additional/alternative pension fund or their children's inheritance and it will take a lot for them to abandon this mindset.
> 
> Sarah
> 
> www.rea.ie


 
First of all, thanks for pushing some bullish arguments - don't get a lot of this around here!

However, I think that for many the interest rate rises will eat up this spare cash. There was a great piece doing the rounds earlier on this thread pointing out that the mortgage repayment for many average mortgage holders would jump by more than the SSIA monthly savings amount as they come off their "First year special fixed deal"

And will they keep pushing money into property if the capital value is seen to fall when they are already subsidising the rent each month? I realise some will stay in "for the long term" but I don't think a lot of recent buyers of investment property will stay in for that long once it starts to become apparent that their one-way bet is not paying off (literally!)


----------



## Sarah W

comanche said:


> how many quarter point interest rates hikes == 254e per month on an IO mortage of 300k?
> 
> where does the capital appreciation come from in years to come with a stalled market?
> 
> how's about people who have already released equity on the PPR to fund investment properties and interest rates hikes are hitting both these properties? doesn't sound like sound investment to me?



1% = €250 per month. 

I'm not saying it's right or wrong or a sound investment - just an observation. I was a mortgage broker in London '87-'94 and saw some people who lost everything by either panicking or, more commonly, by being backed into a corner by unsustainable mortgage payments or negative equity. Those who hung on (generally speaking) came through. 

However I am NOT likening the current Irish property market to the UK one of the early 90's. That was due to three specific events; the cutting of interest rate relief from per person to per property (but with a 4 month lead in period), the availability of 110% low start mortgages and interest rates jumping from 11% to 15% in one day (the actual day I closed on a purchase!).

I'm neither a bull or bear, BTW.

Sarah

www.rea.ie


----------



## Debtwish

Good to have you on board Sarah W.

Can I ask how the mortgage market is going at the moment?
(I'm not being sarcastic, I'm genuinely interested)


----------



## comanche

I think that sentiment still hasn't changed yet to be honest. People still view property as an investment that will only go up.

For example my sister rang me asking me if I was interested in going halves on a property she saw on Location Location the other night! 

I think that your average Joe is too busy commuting 3 hour to work each day, getting whatever time they can with their children, and getting ready to do it all again the next day to keep an eye on what is happening. They are not reading into the effect of rising interest rates, the US on the brink of recession with a crashing housing market. They are not aware of the soaring prices of commodities coz of India & China developing their infrastructure. The are too involved in the own lives and fell safe in the fact that their house(s) are now with x, that they have their little nest egg. Until its hurts people don't care!

The property only goes up mantra is too deeply ingrained for them to worry about interest rates going up. 

I think that Sarah has a point that the extra SSIA cash will help the average joe to ignore interest rate hikes, that it won't hurt them too much. 

The biggest threat is the fact the FTB's affordability is decreasing with each interest rate hike, this will depress the market somewhat, will it knock a few rungs out of the ladder - I dunno. Six months ago I was telling my friends it would and that's why I have stayed out of the property market, I am not so convinced that we will see this happen in the immediate future. If rates do not rise in 2007

I do expect the next 5-10 years to be a rough ride for Ireland though as it realises the rubbish infrastructure it has to deal with as energy & commodity prices continue to soar. And as for the mountain of debt that will have to be services well that's another story!


----------



## whathome

EA's and VI's are definitely spinning the Stamp Duty story as a reason for the weak market, everything will be wonderful again in January so now is a great time to buy!!!.  I wonder how many unfortunate FTB's will listen to this rubbish?  

This post sums up current EA spin IMO (whether the poster is EA or not):  
http://www.askaboutmoney.com/showpost.php?p=297439&postcount=8


----------



## phoenix_n

comanche said:


> I think that sentiment still hasn't changed yet to be honest. People still view property as an investment that will only go up.


 
I think you are wrong here. The money is leaving the market and those that still buying are doing so without all the facts to hand.


----------



## comanche

phoenix_n said:


> I think you are wrong here. The money is leaving the market and those that still buying are doing so without all the facts to hand.


 
Yes the smart money is leaving the market! 

They less well read are staying in the market or are just joining the party.


----------



## CelloPoint

comanche said:


> Yes the smart money is leaving the market!


Surely you mean _has_ left?


----------



## conor_mc

Sarah W said:


> One point (I don't think) anyone has raised as yet is that a great many amateur investors will have €254/€508 a month in spare cash each month once the SSIAs come to an end and may divert this money to subsidise their investment properties against increased income only mortgages. From my experience these properties are viewed as long term investment and an additional/alternative pension fund or their children's inheritance and it will take a lot for them to abandon this mindset.
> 
> Sarah
> 
> www.rea.ie


 
It's a good point Sarah, but it neglects one thing. And that is that the majority of these people will view their property as a "pension" because regular pensions just aren't fashionable anymore..... too many stories of Joe Soap losing his hat because the pension company didn't move his money into less risky investments as he neared retirement. That Joe should actually have been responsible for this himself is lost on these people.... their thinking on it stops at "the pension company ripped him off".

We've seen it with eircom too, the psychologically-scarred masses who think shares are "too risky".... neglecting the vast variations of risk within the equity markets.

Now jump forward 4/5 years, post-crash if it happens, and what will be the next most-reviled and -hated asset class.... that's right, property. Sure you'd never live on the rent from a single house, they'll say. And they'll be absolutely right, except that some can see that obvious fact today.


----------



## whathome

comanche said:


> For example my sister rang me asking me if I was interested in going halves on a property she saw on Location Location the other night!


 
That sounds very strange - location location is a UK property programme and as it's recorded, runs behind the market. Also - the latest series ended on Channel 4 weeks ago. The only episodes currently showing would be ancient repeats showing on Discovery Realtime (Satellite).


----------



## comanche

CelloPoint said:


> Surely you mean _has_ left?


 
Who knows! what if the budget gives something away, there may be one last surge!

But from the looks of it Spring was the time that the smart money left the market.


----------



## howstrange

http://www.janinedalton.com/blog/archives/2006/is-the-irish-property-market-about-to-crash/


Found this thread doing some googling. In general its just more debate but the las posting (no .26) i found interesting! I wonder what report he is on about?? That posting was over 3 wks ago.


----------



## Afuera

NewMan said:


> The OECD report of a few weeks ago contradicts this report. Is that a good enough source????



Have you actually read the report released by DeutchBank on 11th Oct? This report says that the Irish property market is at the 2nd highest risk of crashing in the EU. Can you show me where the OECD contradict that view?


----------



## JayDub

Daft.ie cache from 12th October shows 48,709 properties listed. 


Todays Daft.ie shows 51,035 properties listed.
http://www.daft.ie/index.daft

Thats a rise of 2,326 properties listed in 4 days.


----------



## treora

1. I am thinking of renting somewhere new in the new year. For a 1 bed city centre place with a view that is now €1200 how little do you think that I should ask for it then €1050-975? The only thing is usually a few wishful 'new Irish' arrive in the New Year, so I might wait until Feb.

2. The only really motivated political grouping in Ireland that is not financially-vested is the Irish mammy. Tell her that Gilroy's balanced argument wants all the money that should go to her children [Education/Health/Social Welfare/Childcare allowance] will end up in the pockets of developers/specuvestors via VAT rebates, stamp duty reductions and their FTB debt laden younger siblings. And the airways will be alive with the sound of ...

3. Sarah W - Most people put as much as they could scrap by with into the SSIAs due to the rewards. They want a return to the lifestyle that they scarified now that it has matured. Either that or child care costs/larger pensions beckon.


----------



## Neffa

Sarah W said:


> However I am NOT likening the current Irish property market to the UK one of the early 90's. That was due to three specific events; the cutting of interest rate relief from per person to per property (but with a 4 month lead in period), the availability of 110% low start mortgages and interest rates jumping from 11% to 15% in one day (the actual day I closed on a purchase!).
> 
> I'm neither a bull or bear, BTW.
> 
> Sarah
> 
> www.rea.ie


 
Hmmm. I'm not sure I completely agree with your analysis of the UK market, I'm afraid although I was a mere punter rather than a broker.  

Affordability went off the rails was the real issue - as I've argued before the absolute interest rate is only part of the equation. The only constant you can look to is affordability (share of mortgage payments from net salary). And that broke through 40% in the UK 88/89. For Dublin, the figure is now almost 40%. And IO mortgages feed these changes through linearly in a different fashion to conventional repayment mortages which were more common 15+years ago.


----------



## beattie

Neffa said:


> You should see the looks of astonishment I have had in work from showing people the "falling prices" blog. Once this becomes better understood, then people will get very wary.


 
I wouldn't even show that to some of my colleagues who have recently dipped their toes in the market. I would probably just get the usual shrug of the shoulders and a nonchalant dismissal I bet.


----------



## partisan

CelloPoint said:


> Shhhhhhh!!!! Someone's gonna have a lot of work to do counteracting that report if the general public get wind of it!



That report is actually reasonably favourable. We come second rather than first when all risk factors are included - one of those factors is "Surprise Growth" risk, which is the measure of a change in economic growth. As the best performing economy our GDP growth rate has the greatest potential to fall (not really a surprise!). Another risk measure we score highly on, is our fondness for variable (or tracker) mortgages over fixed rate mortgages. Fixed rate mortgages are less risky, but you pay a premium for that safety net. All it means is we are more comfortable with risk than people in other countries.
According the report our loan-to-value rate is the lowest, affordability here is better than the average for the last 20 years (and data points at 1990 and 1998). On the bearish side increases in house prices have massively outpaced rents and we're looking over-supplied.


----------



## northdub

Maine said:


> *1 St Margaret's Park*, Malahide, Co. Dublin
> 
> On the market 6 months - the price has just been dropped 100k. During the spring peak initially think they were looking for around (probably above) 1.3m hence real fall is bigger, sellers clearly getting nervy that they may be still selling come April 07. Its been listed on myhome at 1.2m all summer.
> 
> [broken link removed]
> 
> 1,200,000
> 
> [broken link removed]=
> 
> 1,100,000


 
I remember that property first going on sale in the spring at excess of 900,000 euros and due to bidding, it went sale agreed at over 1,100,000.  The sale obviously didn't go through. Interesting that the house was then on sale at excess the first sale agreed price. I think after it went sale agreed, that a nearby house  made over 1,300,000.


----------



## JohnMac4

[broken link removed]=

I posted about this house before 2 months ago when the guide price was a ridiculous 980k. Now reduced to 950k.


----------



## Open_Window

> Richard Says:
> September 26th, 2006 at 2:27 pm
> 
> Just to add a wee bit of petrol to the fire…
> 
> A small birdy has told me that an as-yet unpublished report *may* reveal a very pronounced decline in property prices over the last 3 months.
> 
> Cant vouch for the authenticity of this *cough* but it might be worth holding off if you are considering a purchase.



http://www.janinedalton.com/blog/archives/2006/is-the-irish-property-market-about-to-crash/

Could this be the DAFT report that, some seem to suggest that the DAFT report is overdue?


----------



## fatmanknows

[FONT=verdana,arial]*Cash exodus leaves FDI at minus USD22bn*[/FONT]
[broken link removed]

Looks like the growth in FDI is well and truly over. Better start increasing efficiency to retain those jobs going foward.


----------



## AJ1

3 bed detached house in Bray reduced from 900k to 875k a few weeks ago, now on myhome for 795k, don't know how to post links, sorry!


----------



## JayDub

Is there any good news for the Irish economy. Would Ireland have any growth if construction was factored in at the EU average.


----------



## Sarah W

Debtwish said:


> Good to have you on board Sarah W.
> 
> Can I ask how the mortgage market is going at the moment?
> (I'm not being sarcastic, I'm genuinely interested)



There's not been the traditional October jump in enquiries - although September was a good month - but there is a steady flow of people looking to trade up, remortgage and invest. I do think the FTB's are holding off for the budget though (rightly or wrongly).

Sarah

www.rea.ie


----------



## Duplex

fatmanknows said:


> [FONT=verdana,arial]*Cash exodus leaves FDI at minus USD22bn*[/FONT]
> [broken link removed]
> 
> Looks like the growth in FDI is well and truly over. Better start increasing efficiency to retain those jobs going foward.


The yanks lifting the tracks and taking their train set home? what will we play with now? I know Monopoly.


----------



## ajapale

How about using the "Irish economy - are there clouds ahead?" thread to discuss the broader economy and leaving this thread to deal with "Current public sentiment towards the housing market"?


----------



## Doris

There are alot of posts quoting reductions in asking prices.  This is not an indication of the market.  EA's have just got it wrong.  It is worth noting that alot of these reductions are on properties sold by small/new to the market EAs.  The large houses not selling at auction are also red herrings.  These are not houses that have to be sold.  They are people trying to cash in;and when they don't get the greedy sum they give up.  When houses start selling for less than the AMV I will see it as a market indicator, alot of people on this thread are anticipating and meeting other bears also living in a possible, indeed very possible future - but it is not here yet nor are any hard indicators.


----------



## conor_mc

Doris said:


> There are alot of posts quoting reductions in asking prices. This is not an indication of the market. EA's have just got it wrong. It is worth noting that alot of these reductions are on properties sold by small/new to the market EAs.


 
Really? This must be the first year we've seen new or small EA's in the marketplace so, because reductions in asking prices sure as heck haven't been a feature of the last 5 years!

I haven't seen anyone trumpet a full-blown crash in progress - most are reading these signs as _leading_ indicators.


----------



## whathome

Doris said:


> There are alot of posts quoting reductions in asking prices. This is not an indication of the market.


 
Falling asking prices are not an indication of the market?
... and clouds have nothing to do with rain.


----------



## Duplex

conor_mc said:


> Really? This must be the first year we've seen new or small EA's in the marketplace so, because reductions in asking prices sure as heck haven't been a feature of the last 5 years!
> 
> I haven't seen anyone trumpet a full-blown crash in progress - most are reading these signs as leading indicators.


 
I agree this isn't a crash by any means.


----------



## whathome

Duplex said:


> I agree this isn't a crash by any means.


 
Absolutely, no crash yet - it will get much worse than this before a crash can be called.  It does look like a crash is more likely with recent market behaviour however.


----------



## Maine

Doris said:


> There are alot of posts quoting reductions in asking prices. This is not an indication of the market. EA's have just got it wrong. It is worth noting that alot of these reductions are on properties sold by small/new to the market EAs. e]
> 
> Most of the reductions that I have looked at have come from Sherry Fitz and to a much lesser degree DNG.
> 
> Paying up to 40% of your income is one thing when you are getting a buzz from rising prices.  If that stalls and you are paying 45%, as mortgage rates go up, of your income its gets alot more mundane.  IMO we may "go berlin" and get lots of FTBs who choose to rent and live rather than buy and exist.


----------



## Panzraam

Just want to return to something which didn’t seem to get much publicity or attention (or at least not as much as should have). The Daft Q2 report provides the following figures for house prices in 2006 (Base: 2005 = 100) (July’s figures were preliminary)

*January *104.7
*February *108.3
*March *109.3
*April *110.5
*May *107.8
*June *106.6
*July *_105.4_

This process shows that house prices were already dropping in May (before this thread was even a glimmer in miju’s eye) and had dropped almost 5% by July (if there were seasonal reasons for this they don’t show up in 2005). At that rate of decrease (assuming it didn’t speed up with the negative publicity/virtual capitulation by EA’s of the autumn season), the prices paid in the latter months of 2006 will be lower than the average price of 2005. 

This means that significant capital losses are already here for those who bought this year and this is quickly spreading into those who bought last year 




> A small birdy has told me that an as-yet unpublished report *may* reveal a very pronounced decline in property prices over the last 3 months


 
The recent speculation about the “as-yet unpublished report” (both on this thread and in a recent newstalk interview) would seem to suggest that the already apparent trend may even have accelerated. While 3 months decline does not a crash make, 6 months of declines wiping out nearly two years of gains does start to look ominous. 

The idea that the multiple reductions in prices are simply EA mistakes is I have to say laughable.


----------



## NewMan

Afuera said:


> Have you actually read the report released by DeutchBank on 11th Oct? This report says that the Irish property market is at the 2nd highest risk of crashing in the EU. Can you show me where the OECD contradict that view?


 
Eh, yes I did read it. I wouldn't have referenced it if I hadn't.
They predicted that the Irish property market is in for a soft landing with low single digit price inflation. The stated that Irish house prices will be supported by strong economic fundamentals. They listed the two European countries in most danger as France and Denmark.

Obviously this doesn't sit well with the prevaling view here so you can choose to ignore it with off the cuff remarks questioning whether or not I have researched it.


----------



## whathome

NewMan said:


> Eh, yes I did read it. I wouldn't have referenced it if I hadn't.
> They predicted that the Irish property market is in for a soft landing with low single digit price inflation. The stated that Irish house prices will be supported by strong economic fundamentals. They listed the two European countries in most danger as France and Denmark.
> 
> Obviously this doesn't sit well with the prevaling view here so you can choose to ignore it with off the cuff remarks questioning whether or not I have researched it.


 
Eh - From your comments above, it's obvious that you didn't read it.  Here is the Deutsche Bank report that Afuera questioned if you had read:

[broken link removed]



> Ireland achieves the highest overall risk score with 6.4 points, followed by Spain with 5.9 points. Thus, our model identifies these two countries as the ones where house prices are most likely to correct without any external stimulus.
> ...
> We analysed eight European housing markets and found that the Spanish and the Irish markets are in relative terms the most likely to correct in the future. While the Irish market is to be negatively affected by very strong supply growth and the effect of rising interest rates in a flexible mortgage system, the Spanish housing market is facing particular contagion risk.​


----------



## Open_Window

Panzraam said:


> Just want to return to something which didn’t seem to get much publicity or attention (or at least not as much as should have). The Daft Q2 report provides the following figures for house prices in 2006 (Base: 2005 = 100) (July’s figures were preliminary)
> 
> *January *104.7
> *February *108.3
> *March *109.3
> *April *110.5
> *May *107.8
> *June *106.6
> *July *_105.4_
> 
> This process shows that house prices were already dropping in May (before this thread was even a glimmer in miju’s eye) and had dropped almost 5% by July (if there were seasonal reasons for this they don’t show up in 2005).




Thats interesting, so the trend or sentiment started to turn months before Michael McDowell made his now world famous comments on Stamp Duty.

Also if the trend is continued we could see something like,

*January *104.7
*February *108.3
*March *109.3
*April *110.5
*May *107.8
*June *106.6
*July *_105.4_
Speculation from here,
*Aug *_104.2_
*Sep *_103.0_
*Oct *_101.8_

Is this realistic?


----------



## Debtwish

Open_Window said:


> Thats interesting, so the trend or sentiment started to turn months before Michael McDowell made his now world famous comments on Stamp Duty.


 
Exactly. This is about interest rates not stamp duty.

€500k IO Mortgage - Monthly repayment Nov '05 = €1458
Monthly repayment now = €1979

But it's all about stamp duty the media says - yeah right. By spinning the stamp duty story it gives the impression that somehow the government is controlling this and has the power to sort it out, when the reality is that the government lost control of the housing market years ago.


----------



## Open_Window

Do you think we should post this forum to a few TDs, emails the small guys in opposition, I have no time for the current incumbants. They are way out of whack.

Or shall we let them go throught the motion and do the same old routine while the Property Bubble explodes.

I f Iwas in oppoosition I think I would like to stay out of government just 12 more extra months just to see how its going, You see if new guiys get in they may be out on their ear and blamed for the misdeeds of the current shower as the chaso unfolds.

Oh the computations.. back to falling house prices & the property market tanking overall.


----------



## ajapale

Open_Window said:


> I have no time for the current incumbants. They are way out of whack.



OW,
Please keep to the topic *"Current public sentiment towards the housing market?" *General political observations can be made in Letting Off Steam and Shoot the Breeze.
aj


----------



## phoenix_n

CelloPoint said:


> Surely you mean _has_ left?


 
Or is trying   . Even alot of the smart ones are gonna get caught out.


----------



## badabing

I think there is a bit of a brainwashing censentual air about this thread. Many (most) are predicting a collapse in prices, yet despite interest rates already up 63%, the market has barely budged on the whole, with many prices static, or down 5-10% on some less desireable propertries. The fact remains that there is continuing to be a huge demographic demand and local authorities are still too slow in granting permission to keep up with demand, which will continue to constrain supply into the future. Many predictions put the increase in population in the greater Dublin area at 1 million over the next 15-20 years. When america experienced its dempgraphic bulge in the 1970's, interest rates went from 23% to around 26% to quell demand, but it did not have the desired effect. There are many speculating about the many emigrants going back to the eastern bloc countries, once they can. The fact is their homeland is still being ruled by the old backward commie brigade, and are grossly mis-administering their countries, ensuring continued economic stagnation. Until they have their revolutions they will be stuck with mediocrity!


----------



## japanman

Anyone listen to Ryan Turbidy this morning(I usually don't but wife's car only has radio one)?
He had a guy on, I think George Lee who did the property bubble program on RTE a few weeks ago. He really tore into the government, banking and the building sector. He had all the facts and figures as well.
He said we live in a sick society where peoples dreams and aspirations are based on property, timber decking, Jamie Oliver kitchens and Nigela Lawson cook books. 
It was funny when they sent someone out and about in Galway asking about peoples homes. One guy had a sauna in his en suite, another an ensuite in all five bedrooms and the poor woman who couldn't find a house that had two paddocks. He said young people listening to the program would feel sick listening to the people prattle on. I'm in my mid 20's and I did feel sick.
He explained how all the government tax breaks, section 23, banks importing foreign money, etc where feeding the bubble. 
They said they would do a follow up piece on the program in the future.


----------



## Duplex

badabing said:


> The fact is their homeland is still being ruled by the old backward commie brigade, and are grossly mis-administering their countries


Sounds familiar.


----------



## SteelBlue05

In light of NIBs new mortgage product (lower interest rates) and the possibility that other mortgage providers will lower their rates what will this mean to the property market?

People can now borrow more than they could previously and will this feed in to keeping prices high?

From reading the press release NIB are offering around .5% margin over ECB rate versus other providers who currently offer around 1% margin.


----------



## whathome

badabing said:


> I think there is a bit of a brainwashing censentual air about this thread. Many (most) are predicting a collapse in prices, yet despite interest rates already up 63%, the market has barely budged on the whole, with many prices static, or down 5-10% on some less desireable propertries.


 
How can you say that the market has barely budged? Compare how you describe the market now: "with many prices static, or down 5-10% on some less desirable properties" 
....to how it was in the first half of the year when prices were soaring. The change in the market is huge.



SteelBlue05 said:


> From reading the press release NIB are offering around .5% margin over ECB rate versus other providers who currently offer around 1% margin.


 
It's graded on LTV and is unlikely to move the market in any way. Might help some borrowers with low LTV to ease the burden very slightly but is not significant enough to feed prices...and these are the very borrowers that are unlikely to be struggling anyway.

http://www.rte.ie/business/2006/1017/nib.html



> The new structure is available on mortgages of up to 80% loan to value (where the customer already owns 20% of the home). A margin of 0.5 points will be applied to the first portion of the mortgage up to 50%, 0.6 points up to 60% and 0.8% up to 80%.


----------



## ajapale

Whathome,

Your last few posts have been merged. 

Please do not make concecutive multiple posts.

aj


----------



## SteelBlue05

whathome said:


> It's graded on LTV and is unlikely to move the market in any way. Might help some borrowers with high LTV to ease the burden very slightly but is not significant enough to feed prices...and these are the very borrowers that are unlikely to be struggling anyway.
> 
> http://www.rte.ie/business/2006/1017/nib.html


 
Does it not mean borrowers can now borrow more?


----------



## Debtwish

SteelBlue05 said:


> In light of NIBs new mortgage product (lower interest rates) and the possibility that other mortgage providers will lower their rates what will this mean to the property market?
> 
> People can now borrow more than they could previously and will this feed in to keeping prices high?
> 
> From reading the press release NIB are offering around .5% margin over ECB rate versus other providers who currently offer around 1% margin.


 
If the whole Banking sector introduces similar products, then it could negate the effect of one or two 25 basis point rate hikes, but this is for existing homeowners only. You need to have significant equity already to take full advantage of this offer.

So while it is welcome news for SOME homeowners, it will not make much difference to most first time buyers.

It is also bad news if you are a bank shareholder - widespread introduction of these products will surely erode margins across the board. The Banks will be under serious shareholder pressure to cut costs and improve productivity going forward.


----------



## baby_tooth

badabing said:


> I think there is a bit of a brainwashing censentual air about this thread. Many (most) are predicting a collapse in prices, yet despite interest rates already up 63%, the market has barely budged on the whole, with many prices static, or down 5-10% on some less desireable propertries. The fact remains that there is continuing to be a huge demographic demand and local authorities are still too slow in granting permission to keep up with demand, which will continue to constrain supply into the future. Many predictions put the increase in population in the greater Dublin area at 1 million over the next 15-20 years. When america experienced its dempgraphic bulge in the 1970's, interest rates went from 23% to around 26% to quell demand, but it did not have the desired effect. There are many speculating about the many emigrants going back to the eastern bloc countries, once they can. The fact is their homeland is still being ruled by the old backward commie brigade, and are grossly mis-administering their countries, ensuring continued economic stagnation. Until they have their revolutions they will be stuck with mediocrity!


 

what do we have?


----------



## whathome

SteelBlue05 said:


> Does it not mean borrowers can now borrow more?


 
Not enough to move the market IMO. Won't help FTB's or anyone with high LTV.


----------



## conor_mc

SteelBlue05 said:


> Does it not mean borrowers can now borrow more?


 
Nope, still gotta be stress-tested to +2%. And it does nothing to help the lifeblood of the market - FTB's in a healthy market, or specuvestors in a bubble.


----------



## badabing

"How can you say that the market has barely budged?  Compare how you describe the market now: "with many prices static, or down 5-10% on some less desirable properties"  
....to how it was in the first half of the year when prices were soaring.  The change in the market is huge."

Many properties are still fetching as much now as they did 6 months ago

"What fo we have"

We have;
The 5th highest GDP per head in the world
The 8th highest purchasing power in the world per head
The 10th highest human development index
5th highest econimic freedom index
6th highest economic growth
12th most competitive country
10th best business environment
4th highest no. of patents in force per capita
7th for foreign direct investment


----------



## whathome

badabing said:


> Many properties are still fetching as much now as they did 6 months ago


 
Which is a massive shift in the market compared to Spring when prices were rocketing.


----------



## Afuera

NewMan said:


> Eh, yes I did read it. I wouldn't have referenced it if I hadn't.
> They predicted that the Irish property market is in for a soft landing with low single digit price inflation. The stated that Irish house prices will be supported by strong economic fundamentals. They listed the two European countries in most danger as France and Denmark.



Since you haven't provided a link or the actual name of this report by the OECD I have to presume that this is the one that shows that the four countries with the highest probability of crashing in Europe are Denmark, France, Spain and Ireland (in that order based on OECD economic model).

Under Deutsch Bank's model they identified the property market in Spain and Ireland as being at the most at risk. They still have Denmark and France at a relatively high risk but taking factors such as the amount of fixed rate mortgages and the lack of supply in both those countries they are not deemed to be at such a high risk.

Neither report says that there is going to be a crash but they both clearly show where the risks lie. Contradictary?



NewMan said:


> Obviously this doesn't sit well with the prevaling view here so you can choose to ignore it with off the cuff remarks questioning whether or not I have researched it.



You still haven't showed me where these two reports contradict each other.


----------



## dontaskme

badabing said:


> 7th for foreign direct investment


umm, minus 18 billion dollars?


----------



## Afuera

badabing said:


> 7th for foreign direct investment



You might want to revise some of your figures... looks like we're down to 89th now!
[broken link removed]


----------



## baby_tooth

there has been no crash yet, it will be a while in the coming.

All property has done is plateaued....

inflation @ 3.2% and rates to hit 4% by mid next year. inflation going up and up...

Then things will start to get interesting.

Oh did i mention benchmarking,...wonder if the banks have factored this increase into the ability to repay loan with ftb's settling down, having weddings buying the suv for the planned kids and then the childcare.

PPl here like to refer to dermagraphics, and these dermagraphics would allude to families, working mothers, infrastructure,
now with rising costs, less taxable pay, lost competivness, reduction in tax take after meeting some of the benchmarking two (reckon some but not all will be met) and the restrictions on our ability to borrow, woefully bad infrastructure, american recession. 

then prices will drop and stay down there.

If anyone is interested they should goolge "Kenysian Liquidity trap"...i know some of the economic peeps out there will come back saying rubbish,

BUT DO INTEREST RATES REALLY MATTER...or do they carry too much weight.

Eg: Japan, 0% interest with average 4% inflation. real -estate ddin't budge upwards.

anyone wonder why and does anyone think we will have the same with our asset bubble.


----------



## cjh

[7th for foreign direct investment[/quote badabing]



89th for Foreign Direct Investment.

http://www.finfacts.com/irelandbusinessnews/publish/index.shtml


----------



## Maine

Debtwish said:


> It is also bad news if you are a bank shareholder - widespread introduction of these products will surely erode margins across the board. The Banks will be under serious shareholder pressure to cut costs and improve productivity going forward.


 
NIB may help the upper part of the market as it will drive down mortgages costs.

IF NIB really follow thru it will be very costly for existing banks as NIB are really trying to cherry pick the richer type and these folks are reasonably financial savvy and will walk if their banks do not match.


----------



## conor_mc

Maine said:


> NIB may help the upper part of the market as it will drive down mortgages costs.
> 
> IF NIB really follow thru it will be very costly for existing banks as NIB are really trying to cherry pick the richer type and these folks are reasonably financial savvy and will walk if their banks do not match.


 
Indeed, could this be NIB aggressively trying to risk manage their loan book by improving the quality rather than the quantity, as has been the case in the past?

I've also wondered about AIB's rather aggressive strategy in attracting deposits - again, are they trying to improve their net position in order to protect shareholder value in a downturn?


----------



## JayDub

I'm renting at the moment, I'm paying €850 a month in rent, my neighbour pays over €1,800 a month in mortgage payments and rising. I've worked it out that if I put that €1,000 that I am saving by renting into a pension account I will retire in 35 years with a pension fund of €1,500,000. Plus I get 42% tax relief on the €12,000 which I put into the pension account, which works out at €420 a month in tax relief, so I'm really paying €430 in rent every month. Looking at these figures, what sense does it make to buy a home in the current market.


----------



## Debtwish

JayDub said:


> I'm renting at the moment, I'm paying €850 a month in rent, my neighbour pays over €1,800 a month in mortgage payments and rising. I've worked it out that if I put that €1,000 that I am saving by renting into a pension account I will retire in 35 years with a pension fund of €1,500,000. Plus I get 42% tax relief on the €12,000 which I put into the pension account, which works out at €420 a month in tax relief, so I'm really paying €430 in rent every month. Looking at these figures, what sense does it make to buy a home in the current market.


 
Because if you don't buy you will miss out on that juicy capital appreciation! Property only ever goes up!

Pension accounts are for whimps.


----------



## Arthur Daley

You need to get a valuation to determine LTV for the NIB product. If most of the bears on this thread are right and prices continue falling off, then even less people (particularly those who bought in last few years) will qualify for LTV <80%. 

Generally I would imagine FTBs are very price sensitive to their first deal so would opt for low 1-2 year discount variable rates etc. What happens to the FTB when these discount periods lapse is another thing........


----------



## JayDub

Debtwish said:


> Because if you don't buy you will miss out on that juicy capital appreciation! Property only ever goes up!


 
Thats what my neighbour, Mr Miyagi keeps telling me


----------



## whathome

Inventory levels getting even worse.
Swords now exceeds the myhome search result limit of 150 properties.


----------



## Arthur Daley

whathome said:


> Inventory levels getting even worse.
> Swords now exceeds the myhome search result limit of 150 properties.


 
I've been keeping an eye on Swords and for what it's worth my experience is that prices have stopped rising, where you might expect them to attract a premium due to the impending metro announcement. I know in my development there hasn't been a flood of supply turning up, more a steady stream. Other real bellweather areas for a crash are places like Lusk, Ongar, Lucan, Firhouse, Greystones.


----------



## Calina

whathome said:


> Inventory levels getting even worse.
> Swords now exceeds the myhome search result limit of 150 properties.



It was sitting at 146 yesterday. 

I've been watching Swords and prices have been pretty much static for the past two months or so. They're not rising, even as new properties are coming on stream.


----------



## Fredser

whathome said:


> Inventory levels getting even worse.
> Swords now exceeds the myhome search result limit of 150 properties.



Dear Mr. Myhome.ie,

Please increase your results default upper limit of 150 to a more user-friendly figure so avid voyeurs of your wonderful site can more easily see true inventories for particular areas.

Regards

Fredser


----------



## whathome

Fredser said:


> Please increase your results default upper limit of 150


----------



## Harrogate

Houses are not traded like shares so are not liquid......Liquid assets like shares can lose 10-20% of their value in one day in a slump. ..A housing correction is far slower and more subtle.......like the proverbial slowing down and turning round of a supertanker....so don't anyone expect miracles overnight.


----------



## Duplex

baby_tooth said:


> there has been no crash yet, it will be a while in the coming.
> 
> All property has done is plateaued....
> 
> inflation @ 3.2% and rates to hit 4% by mid next year. inflation going up and up...
> 
> Then things will start to get interesting.
> 
> Oh did i mention benchmarking,...wonder if the banks have factored this increase into the ability to repay loan with ftb's settling down, having weddings buying the suv for the planned kids and then the childcare.
> 
> PPl here like to refer to dermagraphics, and these dermagraphics would allude to families, working mothers, infrastructure,
> now with rising costs, less taxable pay, lost competivness, reduction in tax take after meeting some of the benchmarking two (reckon some but not all will be met) and the restrictions on our ability to borrow, woefully bad infrastructure, american recession.
> 
> then prices will drop and stay down there.
> 
> If anyone is interested they should goolge "Kenysian Liquidity trap"...i know some of the economic peeps out there will come back saying rubbish,
> 
> BUT DO INTEREST RATES REALLY MATTER...or do they carry too much weight.
> 
> Eg: Japan, 0% interest with average 4% inflation. real -estate ddin't budge upwards.
> 
> anyone wonder why and does anyone think we will have the same with our asset bubble.


 


Its worth remembering that we have (or had) a speculative bubble not driven by sustainable fundamental demand.  Bubbles are ephemeral delicate things, we no longer have a bubble market, the bubble has gone.


----------



## demoivre

JayDub said:


> I'm renting at the moment, I'm paying €850 a month in rent, my neighbour pays over €1,800 a month in mortgage payments and rising. I've worked it out that if I put that €1,000 that I am saving by renting into a pension account I will retire in 35 years with a pension fund of €1,500,000.



It sounds like a lot but €1,500,000 lump sum ( if you could get your hands on all of it ) invested at  say 4% in 35 years time is 60k a year . The present value of 60k in 35 years at  4% (  rate of inflation ) is about €15200 ie your 60k in 35 years is equivalent to about €15,200  today.......out of which you pay €850 per month in rent or €10,200 per annum out of an income of about €15,200 which you will still be paying every year until you croak it . Your numbers don't look too good to me from my cursory analysis.


----------



## walk2dewater

[/COLOR said:
			
		

> Harrogate;298060]Houses are not traded like shares so are not liquid......Liquid assets like shares can lose 10-20% of their value in one day in a slump. ..A housing correction is far slower and more subtle.......like the proverbial slowing down and turning round of a supertanker....so don't anyone expect miracles overnight.




Not necessarily.  Illiquid assets have gapping up and gapping down issues.  Take bonds for instance, I have an account with a major market maker for bonds of all types (in Canada).  I’ve had the experience of them not being able to sell me a particular issue, or only at a very high price, because they cannot find a seller on the day.  On the ISEQ many shares “gap around” on very very thin volumes.  Property is arguably the most illiquid of all asset types and the market price at any given point is never entirely clear.

With our small market and tendency for extreme herd mentality it’s conceivable that buyers may literally ‘go on strike’ at existing prices.  The process of price discovery on the way down may be very very different from the way up.


----------



## sandymount

whathome said:


> Inventory levels getting even worse.
> Swords now exceeds the myhome search result limit of 150 properties.



Tallaght, Clondalkin, Castleknock, Swords and Lucan are all above 150 properties for sale now. Clonsilla will be next. 

Outside Dublin, Navan is also above 150.


----------



## whathome

japanman said:


> Anyone listen to Ryan Turbidy this morning(I usually don't but wife's car only has radio one)?
> He had a guy on, I think George Lee


 
I heard this as well. George also said that if he was young in Ireland now, he would emigrate rather than commit to 40 years of financial slavery.


----------



## whizzbang

walk2dewater said:


> With our small market and tendency for extreme herd mentality it’s conceivable that buyers may literally ‘go on strike’ at existing prices.  The process of price discovery on the way down may be very very different from the way up.



Has this already started to happen? We have seen a few EAs trying to "manage expectations" to prepare sellers for moderate price declines. Are EAs already facing stubborn sellers and nervous buyers? a nasty place for them to be!

I think continued interest rate hikes could end up pushing stubborn sellers over the edge.


----------



## baby_tooth

Duplex said:


> Its worth remembering that we have (or had) a speculative bubble not driven by sustainable fundamental demand. Bubbles are ephemeral delicate things, we no longer have a bubble market, the bubble has gone.


 

thats the point. 

so could one say that all interest rates will do is help change sentiment....and thats whats most important in bubbles.

Look at england, had rates over 11% and a bubble, same with Japan.

England dropped rates but property stagnated.

and Japan is the poster boy for bubbles....golf memebrship quoted index.!!

like irish bmw ownership rations!


----------



## room305

JayDub said:


> Looking at these figures, what sense does it make to buy a home in the current market.



When you retire though you'll need to pay rent out of your pension for maybe another twenty or so years. The best bull argument for owning a home is that once your mortgage is paid you live rent free and this will be important when you are living off a pension.

That doesn't mean you should buy now, just that I wouldn't rule out ever buying.


----------



## badabing

Afuera said:


> You might want to revise some of your figures... looks like we're down to 89th now!
> [broken link removed]


 
That is due to a once off amnesty causing repatriation of funds back to the Us and has disrupted the medium term figures.


----------



## Open_Window

badabing said:


> "How can you say that the market has barely budged?  Compare how you describe the market now: "with many prices static, or down 5-10% on some less desirable properties"
> ....to how it was in the first half of the year when prices were soaring.  The change in the market is huge."
> 
> Many properties are still fetching as much now as they did 6 months ago
> 
> "What fo we have"
> 
> We have;
> The 5th highest GDP per head in the world
> The 8th highest purchasing power in the world per head
> The 10th highest human development index
> 5th highest econimic freedom index
> 6th highest economic growth
> 12th most competitive country
> 10th best business environment
> 4th highest no. of patents in force per capita
> 7th for foreign direct investment



One word to you sir, JAPAN!

A very marked change in the markets sentiment if you ask me.



> *After the housing bubble pops, prices will likely plummet for at least a decade, unfortunately. Too pessimistic? Consider this: After the 1989 Japanese housing bubble, housing prices tanked for 13 straight years! The Japanese housing bubble was a similar situation to what we are currently experiencing.
> *


http://www.stock-market-crash.net/housing-bubble.htm

http://www.stock-market-crash.net/nikkei.htm


----------



## room305

whathome said:


> I heard this as well. George also said that if he was young in Ireland now, he would emigrate rather than commit to 40 years of financial slavery.



Em, could he not just rent? I wouldn't emigrate from somewhere just because of expensive housing. Especially when the jobs market was good and I could rent for a reasonable price.


----------



## whathome

room305 said:


> Em, could he not just rent? I wouldn't emigrate from somewhere just because of expensive housing. Especially when the jobs market was good and I could rent for a reasonable price.


 
He didn't mention renting.  He made the point while talking about how young people are conforming to the wishes of an older generation rather than doing their own thing.


----------



## Afuera

badabing said:


> That is due to a once off amnesty causing repatriation of funds back to the Us and has disrupted the medium term figures.



I think it highlights how quickly things can turnaround in this small island of ours. Easy come, easy go!

In your list of boasts, you forgot to include that we were number 1 on the transnationality index. I.E. We have the greatest percentage of wealth in our country generated from capital abroad and the highest level of jobs created by foreign firms.


----------



## Duplex

I suppose that its complacency that should be avoided if you are competing in a global, highly competitive market. We are not resting on our laurels we are in a deep soporific sleep. 




> *
> 
> With imports growing faster than exports, Ireland’s net exports are now a drag on economic growth, having driven Ireland’s Celtic Tiger boom during the 1990s. Ireland’s share of world trade peaked in 2002, and has been in decline since. World trade grew by an average of six percent per year between 2002 and 2005 in value terms, while the value of Ireland’s exports grew by an average of just two per cent per annum over the same period. This loss of market share was most pronounced in manufacturing.
> 
> 
> Irish businesses and households are now spending more than they earn. The current account of Ireland’s balance of payments with the rest of the world shifted from a surplus as recently as 1999 to a deficit of €4.2 billion in 2005 (3.0 per cent of GNP), and is forecast to deteriorate to €6.9 billion in 2007 (4.25 per cent of GNP).
> 
> Productivity growth has slowed to its lowest rate since the early 1980s. Ireland’s strong productivity growth during the 1990s was driven by a narrow base of modern manufacturing industries, while NCC figures would suggest little productivity growth in the services sectors, which account for the majority of employment in the economy.
> 
> In the five years to March 2006, manufacturing industries lost over 32,000 jobs, declining as a share of total employment from 15 per cent to 11 per cent. Construction accounted for 13 per cent of those in employment in March 2006, twice the share of employment in Germany or the USA. The share of the public sector as a whole in total employment moved from 20 per cent to 23 per cent in five years to March 2006.
> *


http://www.finfacts.com/irelandbusinessnews/publish/article_10007574.shtml


----------



## phoenix_n

*76 Tolka Vale,* Glasnevin

Reduced from  to [broken link removed]........but will still need to reduce further as one selling for [broken link removed]


----------



## Sidewinder

phoenix_n said:


> *76 Tolka Vale,* Glasnevin
> 
> Reduced from  to [broken link removed]........but will still need to reduce further as one selling for [broken link removed]



And if we get a Japan-style property bear market, how much do you think they'll be going for in 7 years time?


----------



## phoenix_n

Sidewinder said:


> And if we get a Japan-style property bear market, how much do you think they'll be going for in 7 years time?


 
I think the market will bounce back in about 5 years but...i think this place will fall to around 200K, maybe less, by next year....


----------



## badabing

Other places such as sanfransisco have been overvalued for years and remain so, with property being continuously opverpriced. My point is there is no sign of the rug being pulled yet, e.g multinationals leaving, population dropping. Interest rates alone on't do it. I agree there is a high risk if it does happen, but until I see it actually happening, I'm not a propety bear.


----------



## Hibernicatio

Looks like the 'Ghost Town' DMW was predicting in the SBPost a few weeks back is starting to appear stateside.


----------



## badabing

One typical home in 'risky' Clonsilla
Original asking price 430k
[broken link removed]=

Latest offer 450k and rising...


----------



## Duplex

The Irish property market of the past few years was a speculative bubble, that bubble has popped, it has expired, gone to join the choir eternal etc.
The market hasn't crashed because of the illiquid nature of the property market, it takes time.  



Definition of a bubble.

http://www.investopedia.com/terms/s/speculativebubble.asp


----------



## Debtwish

phoenix_n said:


> I think the market will bounce back in about 5 years but...i think this place will fall to around 200K, maybe less, by next year....


 
Let not get too excited. 

200k ok. But by next year? Sorry, illiquid markets like property don't fall that fast. We will slide down a steady slope of hope that may drag on for years not months.


----------



## badabing

My prediction is 3-5 years of stagnation followed by a few more years of modest increases before the next bull market probably 8-10 years away


----------



## Maine

Debtwish said:


> Let not get too excited.
> 
> 200k ok. But by next year? Sorry, illiquid markets like property don't fall that fast. We will slide down a steady slope of hope that may drag on for years not months.


 
Most markets have non national / local investors who will purchase at various points in the cycle.

I see UK press for UK from time to time and in past 4 years have never seen a Irish development marketed.  Is anyone aware of any significant purchasers of irish property for investment purposes by non irish (excluding east europeans here for jobs) in say past 3 years ? 

Any "UK investor" property blocks in Dublin, any "Russian investor" property blocks ?


----------



## walk2dewater

badabing said:


> My prediction is 3-5 years of stagnation followed by a few more years of modest increases before the next bull market probably 8-10 years away


 
The crucifixion of the property bulls is going to be the most fascinating sights of my entire investing career.

Well, I suppose, after seeing Nortel go from $120 to $1.50 on Nasdaq Bubble TV.


----------



## Miles

walk2dewater said:


> The crucifixion of the property bulls is going to be the most fascinating sights of my entire investing career.


 
Eddie Hobbs is right, there are people out there willing a destruction to the property market!


----------



## badabing

walk2dewater said:


> The crucifixion of the property bulls is going to be the most fascinating sights of my entire investing career.
> 
> Well, I suppose, after seeing Nortel go from $120 to $1.50 on Nasdaq Bubble TV.


 
Would gladly welcome some rationality myself....just don't think its going to happen
And my logic is; 5 years of 'real' inflation of 5-6% will bring current prices to a sustainable level


----------



## whathome

Miles said:


> Eddie Hobbs is right, there are people out there willing a destruction to the property market!


 
I don't think many here are willing destruction but like W2DW said, it's going to be fascinating.


----------



## phoenix_n

Debtwish said:


> Let not get too excited.
> 
> 200k ok. But by next year? Sorry, illiquid markets like property don't fall that fast. We will slide down a steady slope of hope that may drag on for years not months.


 
Dont overestimate the size of the bubble. 200K for a flat in Finglas still seems expensive to me. But illiquid markets do fall that fast. Its just that its take longer for to be sold.


----------



## walk2dewater

Miles said:


> Eddie Hobbs is right, there are people out there willing a destruction to the property market!


 
Are you implying I am willing financial destruction on people? I take offence to that. I have had no part in the Irish bubble.


----------



## badabing

Everyone knows stated inflation figures are nonsense, real inflation is well above 5%...som my thinking is it won't take long for stagnant prices to correct the housing market


----------



## Afuera

badabing said:


> Everyone knows stated inflation figures are nonsense, real inflation is well above 5%...som my thinking is it won't take long for stagnant prices to correct the housing market



Wage inflation is more important than general price inflation here. Do you think that wage inflation will be above 5% year on year for the next few years?

Edit: You don't need to answer that. It's a trick question. Because if you do think wage inflation will be 5% yoy, then we're going to be uncompetitive internationally. If you don't think this will happen then current house prices will never be sustainable without a correction. Damn'd if you do, damn'd if you don't!


----------



## phoenix_n

Miles said:


> Eddie Hobbs is right, there are people out there willing a destruction to the property market!


 
Trust me it wont be all that bad. And it will have the beneficial effect of taking greed out of Irish culture for a half a decade or so.


----------



## Duplex

badabing said:


> Would gladly welcome some rationality myself....just don't think its going to happen
> And my logic is; 5 years of 'real' inflation of 5-6% will bring current prices to a sustainable level


 

I'm glad that we have more bullish sentiment on this thread.  Would anyone care to provide a potted synopsis of how they see things panning our from a bullish prospective, addressing these topics.


1. Global economy.(specificaly US situation)

2. Inflation/deflation, interest rates.

3. Irish economy

4. Irish housing market in relation to the above factors


----------



## StoppedClock

Afuera said:


> Wage inflation is more important than general price inflation here. Do you think that wage inflation will be above 5% year on year for the next few years?
> 
> Edit: You don't need to answer that. It's a trick question. Because if you do think wage inflation will be 5% yoy, then we're going to be uncompetitive internationally. If you don't think this will happen then house prices will never be sustainable without a correction.


 
I think this needs to be put in even stronger terms wage infaltion is *all *that matters, if real inflation runs ahead of wage inflation then this will decrease affordability (increase unaffordability morelike) and increase liklihood of crash


----------



## Calina

Miles said:


> Eddie Hobbs is right, there are people out there willing a destruction to the property market!



We didn't want the market to grow so fast because we could see the inherent long term risks. It's peevish to suggest that people who want a rational property market are nasty people who just want a crash. The problem is property values in this country have become so irrational curtesy of massively unwise exuberence means that we have reached a point where a correction is going to be pretty noticeable. The longer we go without a correction, the greater the crash is going to be. 

For myself, I would prefer that we were not in this situation. I would have preferred that the market continued to slow post-2001 before the interest rate wheeze that injected a load of cheap debt into the country. My massive big fear now is what the wider ramifications will be for the rest of the economy. 

We've been looking for a correction on the grounds that the sooner it came, the fewer the knock effects would be. Now, I'd venture to say that all bets are off.


----------



## ivuernis

badabing said:


> My prediction is 3-5 years of stagnation followed by a few more years of modest increases before the next bull market probably 8-10 years away


 
I actually think the reverse - a stagnating property market for the next 5-10 years (perhaps longer)... and I don't know if we'll ever see another bull market, certainly nothing like the one we've seen for the last 10 years.


----------



## partisan

StoppedClock said:


> I think this needs to be put in even stronger terms wage infaltion is *all *that matters, if real inflation runs ahead of wage inflation then this will decrease affordability (increase unaffordability morelike) and increase liklihood of crash



Salaries aren't the only forms of income ;-) 

Although there is a lag, salary growth has tended to out pace inflation over the long term. If you've got solid evidence this is about to change fair enough, but even if it did, in all likelihood wage inflation would increase to some degree with actual inflation. Increased inflation would reduce the value in real terms of outstanding loans, making debt repayment easier for existing home owners. If house price inflation was static while real inflation was rampant (and wage inflation slightly less so) this would still increase the affordability of new homes for ftbs.


----------



## conor_mc

The thing I don't get is this - how can you have a speculative bubble followed by a soft landing? To believe in a soft landing is to pretty much deny that speculation has been a contributor to house price increases because a soft landing can only occur when supply meets natural demand (i.e. demand minus speculative element).

But the thing is that the speculative element disappears overnight. No house price rises, no speculation. So how do you manage supply/demand equilibrium when an unquantifiable element of demand could disappear on a whim?

Seriously, do any of the bulls out there really believe that speculation hasn't been a factor up until today?

And what do they see as fair value for a house these days... take any house. Was it undervalued last spring? Is it still undervalued today if it goes up another €30k in the next 3 months? Is this the fundamentally balanced house price level right now, or was a few months back, or a few months hence? Will Dublin house price never drop back, ever, even if a €450k house was €360k only 9 or 10 months ago?

Or do house prices just always go up?


----------



## ivuernis

badabing said:


> Would gladly welcome some rationality myself....just don't think its going to happen
> And my logic is; 5 years of 'real' inflation of 5-6% will bring current prices to a sustainable level


 
... but doesn't that assume wage levels keep pace with real inflation.


----------



## ivuernis

conor_mc said:


> Or do house prices just always go up?


 
No, but they'll NEVER drop.... ok


----------



## Duplex

Afuera said:


> Wage inflation is more important than general price inflation here. Do you think that wage inflation will be above 5% year on year for the next few years?
> 
> Edit: You don't need to answer that. It's a trick question. Because if you do think wage inflation will be 5% yoy, then we're going to be uncompetitive internationally. If you don't think this will happen then current house prices will never be sustainable without a correction. Damn'd if you do, damn'd if you don't!


 

I suppose the Irish could never imagine an era of wage deflation. Americans don't have to imagine. http://www.dol.gov/   Go to average hourly earnings table B historic data


----------



## Arthur Daley

Calina said:


> We've been looking for a correction on the grounds that the sooner it came, the fewer the knock effects would be. Now, I'd venture to say that all bets are off.


 
Agreed, it could be argued on another hand that the bubble has been bad for society and unpatriotic as it's long term making the country uncompetitive, and generating unrealistic expectations of living standards.

As far as bullish sentiment goes if increases in rates are trigerred by inflation then the following should temper some of the concerns on rates into 2007, which in turn will maintain some affordability for ftbs.(assuming 35/40 year terms etc etc)
Sharp dip in euro inflation confirmed

http://www.rte.ie/business/2006/1017/eurozone.html


----------



## miju

badabing said:


> I think there is a bit of a brainwashing censentual air about this thread. Many (most) are predicting a collapse in prices, yet despite interest rates already up 63%, the market has barely budged on the whole, with many prices static, or down 5-10% on some less desireable propertries.


 
what percentage of price drop would you equate to being a "crash" badabing?


----------



## asdef

badabing has a reasonable point, I think. If you've been following itulip.com et al, you'll see that two ways out have been forecasted for the housing market:
property prices stagnating as all other prices rise to meet them (possibly hyper-inflation)
property prices crashing
Some (many?) commentators in the US could possibly see #1 happening, and hyper-inflation brought on by the US government, in order to avoid defaulting on the government debt; i.e. all kinds of debt are made cheaper.

Here too, I think that they are the only two ways out - but if you believe that the ECB is going to stick to its guns and maintain price stability, then only #2 will happen. Depends on the level of inflation, etc., but the ECB haven't shown signs of giving into inflation just yet.


----------



## Sidewinder

Duplex said:


> I suppose the Irish could never imagine an era of wage deflation. Americans don't have to imagine. http://www.dol.gov/   Go to average hourly earnings table B historic data



Not if you work in IT in Ireland - wages are still way below 2000 highs. And not likely to rise any time soon! I believe wages in the private non-protected sector have also been stagnant or declining for the last 5 years.

Only in the public and protected sectors are real wages static or increasing. And of course, that's not good for the country long-term. We have an emerging situation where a large chunk of cossetted workers are being funded with ever-increasing wages by another group of workers whose real wages (and real standard of living) is being eroded, and currently being maintained only through increasing consumer debt.


----------



## Debtwish

asdef said:


> badabing has a reasonable point, I think. If you've been following itulip.com et al, you'll see that two ways out have been forecasted for the housing market:
> 
> property prices stagnating as all other prices rise to meet them (possibly hyper-inflation)
> property prices crashing
> Some (many?) commentators in the US could possibly see #1 happening, and hyper-inflation brought on by the US government, in order to avoid defaulting on the government debt; i.e. all kinds of debt are made cheaper.
> 
> Here too, I think that they are the only two ways out - but if you believe that the ECB is going to stick to its guns and maintain price stability, then only #2 will happen. Depends on the level of inflation, etc., but the ECB haven't shown signs of giving into inflation just yet.


 
Both 1 and 2 are crashes. 1 is caused by drastically devaluing the currency that's all.


----------



## SteelBlue05

Sidewinder said:


> Not if you work in IT in Ireland - wages are still way below 2000 highs. And not likely to rise any time soon! .


 
Depends on what area of IT you work in. I know of plenty of people earning very good salaries in IT.

Although I dont know what the 2000-era rates were like.

Certainly System Analysts, Project Managers, and J2EE developers are in high demand and demand high salaries.


----------



## plaudit

The vested interests have been trying to ingrain the soft landing theory into buyers minds for the last few years so that people believe that the worst case scenario is house prices standing still, and that there is not really a risk involved in borrowing as your capital is pretty secure.


----------



## cjh

[Here too, I think that they are the only two ways out - but if you believe that the ECB is going to stick to its guns and maintain price stability, then only #2 will happen. Depends on the level of inflation, etc., but the ECB haven't shown signs of giving into inflation just yet.[/quote]


Re: the ECB - the property bubble is an Irish problem, not a European problem, and the ECB will act accordingly.


----------



## conor_mc

Arthur Daley said:


> Agreed, it could be argued on another hand that the bubble has been bad for society and unpatriotic as it's long term making the country uncompetitive, and generating unrealistic expectations of living standards.
> 
> As far as bullish sentiment goes if increases in rates are trigerred by inflation then the following should temper some of the concerns on rates into 2007, which in turn will maintain some affordability for ftbs.(assuming 35/40 year terms etc etc)
> Sharp dip in euro inflation confirmed
> 
> http://www.rte.ie/business/2006/1017/eurozone.html


 
Spotted that earlier, coupled with another article on low German confidence.... interesting.

However, like the bulls say, a few swallows don't make a summer. I'd expect oil won't settle at those lows now that OPEC have responded by cutting output.

Money supply is still a worry for the ECB too.


----------



## walk2dewater

conor_mc said:


> Money supply is still a worry for the ECB though.


 
THE worry.


----------



## Open_Window

Duplex said:


> I suppose the Irish could never imagine an era of wage deflation. Americans don't have to imagine. http://www.dol.gov/   Go to average hourly earnings table B historic data



Average Hourly Earnings:
+$0.04(p)

Is this averaged hourly wage out over all of the citizens of the US? I suppose it is.... my god if that was ireland, you can bet your bottom "avergae hourly wage @ $0.04c" sentiment would never have even got started.

This is the kind of thing revolutions have started over, much less in fact!


----------



## partisan

SteelBlue05 said:


> Depends on what area of IT you work in. I know of plenty of people earning very good salaries in IT.
> 
> Although I dont know what the 2000-era rates were like.
> 
> Certainly System Analysts, Project Managers, and J2EE developers are in high demand and demand high salaries.



I agree, wages have been rising steadily (and more rapidly recently) since the dot.com bust led to gross over supply in the market.


----------



## Maine

Sidewinder said:


> Not if you work in IT in Ireland - wages are still way below 2000 highs. And not likely to rise any time soon! I believe wages in the private non-protected sector have also been stagnant or declining for the last 5 years.
> 
> 
> 
> 
> 
> 
> If the construction industry slows, we will churn out thousands of grads and have lots of east european labour about which will not just pack up and go east so we can reclaim the lower jobs.
> 
> As said before employers will look to cut wages as growth will have stalled in a slowdown across whole areas of the economy.  I think wages could fall by 20% across lots of disciplines.  If an employer has 10 cvs he will be able to push down wages compared to the 1 maybe 2 he gets now
> 
> japan had to go to 0% to avoid deflation.  IMO deflation will be a real risk.
Click to expand...


----------



## Duplex

Open_Window said:


> Average Hourly Earnings:
> +$0.04(p)
> 
> Is this averaged hourly wage out over all of the citizens of the US? I suppose it is.... my god if that was ireland, you can bet your bottom "avergae hourly wage @ $0.04c" sentiment would never have even got started.
> 
> This is the kind of thing revolutions have started over, much less in fact!


 
Hi OW
In real terms US incomes have remained stagnant since about 2000. The housing bubble and equity release (or debt) has compensated until now. The bond markets are screaming recession, but Oil is back above $60pb as OPEC want a fair price, pushing on inflation again.  Its mad, mad, mad I tell ya


----------



## Borderlord

People here rightly claim and I agree that the Celtic Tiger happened in two phases 1995 to 2001 and 2001 to 2006 and that prices should revert back to what they were at around 2001 which should be about the correct price and we can bob along at the rate of inflation into perpetuity. However, IMO what has happened since 2001 is that we build circa 400 houses / apartments which is far too many and that this was not real demand but speculative, and when the dust finally settles and the speculators run for the door the over supply could drive prices down to prices seen long before 2001.. Any views ??


----------



## miju

badabing said:


> One typical home in 'risky' Clonsilla
> Original asking price 430k
> [broken link removed]=
> 
> Latest offer 450k and rising...


 
one really important question here for you.

how do you know the latest offer is 450k????? you'd either have to be the owner or an estate agent to know that


----------



## whathome

The September inflation drop is old news, RTE reported it on September 29th:
http://www.rte.ie/business/2006/0929/eurozone.html

ECB already had this data when rates were raised on October 5th.

Today's news just relates to a slight revision on the original figure from Sep 29th.


----------



## walk2dewater

Maine said:


> Sidewinder said:
> 
> 
> 
> Not if you work in IT in Ireland - wages are still way below 2000 highs. And not likely to rise any time soon! I believe wages in the private non-protected sector have also been stagnant or declining for the last 5 years. quote]
> 
> If the construction industry slows, we will churn out thousands of grads and have lots of east european labour about which will not just pack up and go east so we can reclaim the lower jobs.
> 
> As said before employers will look to cut wages as growth will have stalled in a slowdown across whole areas of the economy. I think wages could fall by 20% across lots of disciplines. If an employer has 10 cvs he will be able to push down wages compared to the 1 maybe 2 he gets now
> 
> japan had to go to 0% to avoid deflation. IMO deflation will be a real risk.
> 
> 
> 
> 
> Inflation vs. Deflation eh?  What about inflation in some things (food, energy, healthcare, things from China/India) and deflation in other things (bonds, stocks, property, wages and currency values in the West) with the overall effect being slight deflation.  I believe the technical term is “dis-inflation”.
Click to expand...


----------



## pvtighe

SteelBlue05 said:


> Depends on what area of IT you work in. I know of plenty of people earning very good salaries in IT.
> 
> Although I dont know what the 2000-era rates were like.
> 
> Certainly System Analysts, Project Managers, and J2EE developers are in high demand and demand high salaries.


 

I concur with sidewinder, I have been in the IT industry in Dublin since 1997, wages peaked in 2000 (Y2K bug) and have declined since, have been showing signs of strengthning lately, yes wages are good but not as good as they were!


----------



## Arthur Daley

whathome said:


> The September inflation drop is old news, RTE reported it on September 29th:


 
Hardly warrants being reported in their business section so. I was just (desperately) trying to drum up a bullish arguement.

Borderlord - it seems a common enough opinion that I share that fair values are about 2001 levels. This suggests a very significant drop of course whenever the tipping point comes


----------



## badabing

miju said:


> one really important question here for you.
> 
> how do you know the latest offer is 450k????? you'd either have to be the owner or an estate agent to know that


 
Neither...heard through a friend


----------



## daveirl

SteelBlue05 said:


> Depends on what area of IT you work in. I know of plenty of people earning very good salaries in IT.
> 
> Although I dont know what the 2000-era rates were like.
> 
> Certainly System Analysts, Project Managers, and J2EE developers are in high demand and demand high salaries.


In the company I work in they had a 10% pay cut in 2001 and they're only getting back to those levels now.


----------



## murray

miju said:


> one really important question here for you.
> 
> how do you know the latest offer is 450k????? you'd either have to be the owner or an estate agent to know that


 

No - you could also be a bidder - or just call to see the property , the agent will tell you the current bid if it is over the asking price , to save wasting your (and their) time.


----------



## treora

badabing said:


> That is due to a once off amnesty causing repatriation of funds back to the Us and has disrupted the medium term figures.


 
Yes, but now that all the money is out of Ireland they can re-invest it in Poland; and that's exactly what Dell and Accenture have done.


----------



## badabing

I dont believe wages need to rise to fuel inflation, real wages in the US have been decreasing for 30 years now. There are more and more sophisticated instruments available to people to get themselves into more and more debt , and to fuel asset prices. The average 50 year old american has a zero net worth, even though he lives in a reasonable house and drives a nice car.


----------



## Afuera

badabing said:


> I dont believe wages need to rise to fuel inflation, real wages in the US have been decreasing for 30 years now. There are more and more sophisticated instruments available to people to get themselves into more and more debt , and to fuel asset prices. The average 50 year old american has a zero net worth, even though he lives in a reasonable house and drives a nice car.



And look what a fine mess this approach has got them in! The baby boom generation is about to start retiring in the next few years over there and with so little savings they could end up bankrupting the whole country.


----------



## Maine

walk2dewater said:


> Inflation vs. Deflation eh? What about inflation in some things (food, energy, healthcare, things from China/India) and deflation in other things (bonds, stocks, property, wages and currency values in the West) with the overall effect being slight deflation. I believe the technical term is “dis-inflation”.


 
To be clear my opinion on deflation relates to ireland only, our wages have been inflated by excessive domestic demand driven by a credit explosion. When the credit slows, demand will drop and wages will follow. Companies will see sales declines and will have to cut costs and take lower profits to keep going. Say an extreme example will be 100k designer kitchen maker - sales will likely decline. Have to cut costs and probably prices.

And the ECB will not cut interest rates to 0% because what will be happening here.


----------



## Doris

Good news! Everything is okay, just seen Eddie Hobbs on RTE he says that the economy is too bouyant for a property crash


----------



## whathome

Doris said:


> Good news! Everything is okay, just seen Eddie Hobbs on RTE he says that the economy is too bouyant for a property crash


 
Bad news! I saw him too, he didn't say that  
He said he didn't know if there was going to be a property crash but there was still demand in the market, he advised a caller to buy a home if it's a home but not as an investment.

He also said that if there is a crash, the country would plunge into economic turmoil due to the dependency on the property market. He said many people will be adversely affected by a property crash but featherbed public sector workers won't have to worry about it! He also said that anyone expecting to snap up cheap property in a crash is misguided due to the economic misery, unemployment etc that would ensue.


----------



## JayDub

Concerning the Daft price index, just received the following from Daft.

"What's interesting, and what you have probably noticed yourself, is that asking prices appear to have almost stopped increasingly completely since Q2 this year, as per the Daft.ie index. The next Report will be out November 2nd and will cover up to September (final figures) and October (provisional figures),so keep an eye out for the latest!"

I for one am looking forward to this report.


----------



## thewatcher

JayDub said:


> "What's interesting, and what you have probably noticed yourself, is that asking prices appear to have almost stopped increasingly completely since Q2 this year,"


 
And what happened in Q2 ?
The ssia matured,and what was the mantra sold to the masses for the 12 months previous to this by the vested interests ?

While ftb's do bear some responsibility for not researching the market,i do fell sorry for them.A whole generation has been sold down the debt river in this country by the vested interests,they should be ashamed of themselves.


----------



## ecstatic

I agree wages in IT are on a downward trend slowly but surely 2000 was the peak its all going down from now on...

Natural progression outsource to india etc...


----------



## badabing

thewatcher said:


> And what happened in Q2 ?
> The ssia matured,and what was the mantra sold to the masses for the 12 months previous to this by the vested interests ?
> 
> While ftb's do bear some responsibility for not researching the market,i do fell sorry for them.A whole generation has been sold down the debt river in this country by the vested interests,they should be ashamed of themselves.


 
When we look back in 20 years time todays prices will seem tiny, buying at this peak will seem insignificant even if prices fall 20 or 30% in the meantime. They will recover over time. FTB's are buying now because they need a home, and in the long run are probably better off not trying to time the market.

I think it would be wise to consider the long term perspective. We are by nature usually negative about the future, thats human nature, there is a bubble but we'll get over it. There is global warming but we'll probably get over it too....As far as the future is concerned, we're probably into a new era with massive new markets opening up, with huge middle (consumer) classes emerging in Asia etc. Huge possibilities lie ahead...this is not the end of the line...


----------



## fatmanknows

*Sherry's results for today.*

*Prize available to first person who can calculate total commisssion earned for today ! (nearest euro will do - call moderator to arrange for collection)*

*View the latest auction results here!* 


Date of Auction: 17/10/2006
Address: Marble Hall, Ferndale Glen, Rathmichael, Co. Dublin
AMV: €3.85m
Auction Result: Withdrawn at €3.7, now quoting €4.250m

Date of Auction: 17/10/2006
Address: 1 Richview Park, Dartry, Dublin 6
AMV: €3m
Auction Result: Withdrawn, now quoting €2.9m

Date of Auction: 17/10/2006
Address: 20 Terenure Road East, Rathgar, Dublin 6
AMV: €2.7m  
Auction Result: Withdrawn at €2.6m, now Quating €2.8m.

Date of Auction: 17/10/2006
Address: 29 Kenilworth Road, Rathgar, Dublin 6
AMV: €2m
Auction Result: Please ring for results

Date of Auction: 17/10/2006
Address: 44 Farney Park, Sandymount, Dublin 4
AMV: €1.4m
Auction Result: Please ring for results


----------



## whathome

badabing said:


> When we look back in 20 years time todays prices will seem tiny, buying at this peak will seem insignificant even if prices fall 20 or 30% in the meantime. They will recover over time. FTB's are buying now because they need a home, and in the long run are probably better off not trying to time the market.
> 
> I think it would be wise to consider the long term perspective. We are by nature usually negative about the future, thats human nature, there is a bubble but we'll get over it. There is global warming but we'll probably get over it too....As far as the future is concerned, we're probably into a new era with massive new markets opening up, with huge middle (consumer) classes emerging in Asia etc. Huge possibilities lie ahead...this is not the end of the line...


 
Agree with everything you say above but choosing not to buy now may not be timing the market. If someone were to decide that on a fundamental level property was overvalued and made a decision not to buy - they wouldn't be timing the market. 80% of our net worth (Mrs WH an I) is in the stock market or private equity investments and I never time the market but I won't buy anything that I think is overvalued. Unfortunately the other 20% is in a PPR (moving in Dec) but that's something I can't argue my way out of with the boss    So it's possible to choose not to buy property without committing the "never time the market" sin.


----------



## Marie

badabing said:


> When we look back in 20 years time todays prices will seem tiny, buying at this peak will seem insignificant even if prices fall 20 or 30% in the meantime. They will recover over time. FTB's are buying now because they need a home, and in the long run are probably better off not trying to time the market.
> 
> I think it would be wise to consider the long term perspective. We are by nature usually negative about the future, thats human nature, there is a bubble but we'll get over it. There is global warming but we'll probably get over it too....As far as the future is concerned, we're probably into a new era with massive new markets opening up, with huge middle (consumer) classes emerging in Asia etc. Huge possibilities lie ahead...this is not the end of the line...


 
Gosh Badabing this Pollyanna breeziness makes me feel like a churlish old curmudgeon.........or am I?  Need for a home can be satisfied by other methods than committing to half-a-lifetime of stringency in order to live in a building for which you hold a mortgage.  Buying - in the current circumstances - is a choice to sink income in a small patch of earth in preference to using one's resources to invest in making or growing things, pursuing education,  relationships and fulfilling life-experiences (which all need funds).  Once 'sunk' this cannot be retrieved though as far as _public sentiment _goes there appears to be a belief that come 'crash' come 'boom' they cannot lose because houses are real, solid objects.  All their 'sunk' resources will be - magically! - restored a hundredfold  in time.  This is patently untrue - previous posts on this thread identify the 'pyramid' aspect of soaring house prices - but the persistence of the myth has sustained the bubble.  Incidentally the argument that acquiring one's own home provides security and rent-free accommodation in later years is partially true but must be considered alongside the fact that the realities of increasing age often entail sale of one's PPR to fund institutional or nursing-home care.  Property depreciation can affect this adversely.


----------



## futisle

> Good news! Everything is okay, just seen Eddie Hobbs on RTE he says that the economy is too bouyant for a property crash





> Bad news! I saw him too, he didn't say that
> He said he didn't know if there was going to be a property crash but there was still demand in the market, he advised a caller to buy a home if it's a home but not as an investment



Is this some of the problem? No offence Doris but what you heard Eddie say was probablt what joe soap heard too, which is a long ways from knowledgeible types like whathome here said. Joe soap can't see the signs even when he's being told them!


----------



## gearoidmm

badabing said:


> When we look back in 20 years time todays prices will seem tiny, buying at this peak will seem insignificant even if prices fall 20 or 30% in the meantime. They will recover over time. FTB's are buying now because they need a home, and in the long run are probably better off not trying to time the market.



The problem is not the people who are buying a 'home' but those who are buying any old crap that they can afford in order to get on the ladder.  Many of my peers have purchased apartments that they have no intention of living in long-term in order to trade up in a few years.  What happens to them if the market falls by 30%.  Yes, in 20 years it might seem insignificant but in 5 years when they want to move on it may not be so easy.


----------



## hmmm

Marie said:


> Gosh Badabing this Pollyanna breeziness makes me feel like a churlish old curmudgeon.........or am I?  Need for a home can be satisfied by other methods than committing to half-a-lifetime of stringency in order to live in a building for which you hold a mortgage.  Buying - in the current circumstances - is a choice to sink income in a small patch of earth in preference to using one's resources to invest in making or growing things, pursuing education,  relationships and fulfilling life-experiences (which all need funds).  Once 'sunk' this cannot be retrieved though as far as _public sentiment _goes there appears to be a belief that come 'crash' come 'boom' they cannot lose because houses are real, solid objects.  All their 'sunk' resources will be - magically! - restored a hundredfold  in time.  This is patently untrue - previous posts on this thread identify the 'pyramid' aspect of soaring house prices - but the persistence of the myth has sustained the bubble.  Incidentally the argument that acquiring one's own home provides security and rent-free accommodation in later years is partially true but must be considered alongside the fact that the realities of increasing age often entail sale of one's PPR to fund institutional or nursing-home care.  Property depreciation can affect this adversely.



That's the most refreshing post I've read on here in a long long time. Certainly a much more mature outlook than any "bulls" or those scrambling to get on the so called "ladder".


----------



## Open_Window

badabing said:


> When we look back in 20 years time todays prices will seem tiny, buying at this peak will seem insignificant even if prices fall 20 or 30% in the meantime. They will recover over time. FTB's are buying now because they need a home, and in the long run are probably better off not trying to time the market.



Maybe maybe not. Either way the people being saddled with this debt now don't care about that if they are the ones left holding th baby.

Japna is pushing it past 15 years for delfation in prices who says Ireland could go for longer and thats the point...


----------



## howstrange

Was just watching that Raging Bulls programming on RTE about Baltimore Tech and Fran Rooney!! I was thinking to myself if we will see a similar programme in a few years time about the boom and bust of the Irish property market and the hype that surrounded it all! No flies on the main man Dermot Desmond either selling his shares in Baltimore just before it all went belly up!! Now who was the guy who said a few wks ago that there might be a WEE bit of a bubble in the property market..........


----------



## solatic

phoenix_n said:


> Could someone explain why this [broken link removed] would be worth 900,000 + stamp duty


Did they say 900k? That was a typo, they meant 850k. EA must be new to the game, etc etc.


----------



## Open_Window

We should be tracking rental inventory as well as sales inventory, we need to see if there an inversely proportional relationship or propotional. Who had the inventory graph?? I have suggested as much at [broken link removed]

IS it see-saw, it iwll also track sentiment in the rental sector if supply reudces fast, we can guess people are goning back to renting as well as rental being pulled & redressed as sales. We need both to understand the dynamic and work out if there is a relationship and if some posters here are correct etc. etc.


----------



## miju

badabing said:


> Neither...heard through a friend



oh right , thats great for the seller , imagine that will dissapear from daft.ie soon enough so


----------



## Neffa

fatmanknows said:


> *Sherry's results for today.*
> 
> *Prize available to first person who can calculate total commisssion earned for today ! (nearest euro will do - call moderator to arrange for collection)*
> 
> *View the latest auction results here!*
> 
> 
> Date of Auction: 17/10/2006
> Address: Marble Hall, Ferndale Glen, Rathmichael, Co. Dublin
> AMV: €3.85m
> Auction Result: Withdrawn at €3.7, now quoting €4.250m
> 
> Date of Auction: 17/10/2006
> Address: 1 Richview Park, Dartry, Dublin 6
> AMV: €3m
> Auction Result: Withdrawn, now quoting €2.9m
> 
> Date of Auction: 17/10/2006
> Address: 20 Terenure Road East, Rathgar, Dublin 6
> AMV: €2.7m
> Auction Result: Withdrawn at €2.6m, now Quating €2.8m.
> 
> Date of Auction: 17/10/2006
> Address: 29 Kenilworth Road, Rathgar, Dublin 6
> AMV: €2m
> Auction Result: Please ring for results
> 
> Date of Auction: 17/10/2006
> Address: 44 Farney Park, Sandymount, Dublin 4
> AMV: €1.4m
> Auction Result: Please ring for results


 
..and we have a new category - "Please ring for details"  Comical or what!


----------



## thewatcher

badabing said:


> When we look back in 20 years time todays prices will seem tiny, buying at this peak will seem insignificant even if prices fall 20 or 30% in the meantime.They will recover over time.


 
That's all well and good for you to say i take it your not a FTB.i'd go as far as to say you have a big fat house under your This post will be deleted if not edited to remove bad language worth a fortune.



badabing said:


> FTB's are buying now because they need a home, and in the long run are probably better off not trying to time the market.


 
Ftb are buying now because they have been sucked into the mantra of "getting on the ladder"



badabing said:


> I think it would be wise to consider the long term perspective. We are by nature usually negative about the future, thats human nature, there is a bubble but we'll get over it. There is global warming but we'll probably get over it too....As far as the future is concerned, we're probably into a new era with massive new markets opening up, with huge middle (consumer) classes emerging in Asia etc. Huge possibilities lie ahead...this is not the end of the line...


 
Who said it was the end of the line,you say "there is a bubble but we'll get over it. " But if the youth of today let the bubble burst then it will be over, no longer will todays workers let the older generation live off their sweat and toil.The price of a house will once again become a fair reflection of a proper day's work !.


----------



## Debtwish

badabing said:


> When we look back in 20 years time todays prices will seem tiny, buying at this peak will seem insignificant even if prices fall 20 or 30% in the meantime. They will recover over time. FTB's are buying now because they need a home, and in the long run are probably better off not trying to time the market.


 
So you think that prices will be much higher in 20 years time? Perhaps nominally yes. But adjusted for inflation, average salaries and rents....?

You shouldn't get hung up on the nominal price. The point is people are now paying the equivalent of 50 years rent to own a property. Will this "seem insignificant" in 20 years time? I doubt it.


----------



## ecstatic

Im not quite bullish myself on irish property but over last two months rent prices has been moving up fast around D2 area. I know cause i was looking. 

2 Months ago it was 1400 for 2 bed and maybe parking. Now its 1700 for two bed with parking.

Rents should be going the opposite way in a depressed market no??

Think London 1990......


----------



## Eirmail

ecstatic said:


> Im not quite bullish myself on irish property but over last two months rent prices has been moving up fast around D2 area. I know cause i was looking.
> 
> 2 Months ago it was 1400 for 2 bed and maybe parking. Now its 1700 for two bed with parking.
> 
> Rents should be going the opposite way in a depressed market no??
> 
> Think London 1990......


 

This could be a temporary situation. It looks like more and more landlords are "trying" to sell there properties once the 12 month leases expire. This can be explained by the huge increase in properties for sale in Daft in the last few months. All of these properties that are on the for sale market have been temporily taken out of the rental market. So those few landlords who choose to rent can increase the rent they are looking for. I suspect that this will return to normal in a few months. A landlord who has a property that can't sell it after a few months might rent it out again and even if they do sell it , it might be sold to some buy to let investor which will result in it being back in the rental market.


----------



## sandymount

Neffa said:


> ..and we have a new category - "Please ring for details"  Comical or what!



Maybe no one turned up!!!!


----------



## asdef

ecstatic said:


> Im not quite bullish myself on irish property but over last two months rent prices has been moving up fast around D2 area. I know cause i was looking.
> 
> 2 Months ago it was 1400 for 2 bed and maybe parking. Now its 1700 for two bed with parking.
> 
> Rents should be going the opposite way in a depressed market no??
> 
> Think London 1990......


I was looking for a person to share an apartment in mid-September (Dublin 4, but close to town), and by anecdotal evidence (people who came to view), yes there were only a few affordable places available. However, one person claimed that many landlords had taken their apartment off the (rental) market during September, to rent out during the Ryder Cup, thus reducing availability. If this is true, then we could just be seeing the effects of this filter out - it should be clear by the start of next year whether it's a blip or something else.


----------



## ecstatic

if demand was weakening and sentiment was changing we would see tenants knocking prices off there rent as when everyone smells blood they go for it and want a slice of the action.

Especially in ireland...

Im bearish myself but rental price increase just doesnt add up...


----------



## Dipole

ecstatic said:


> Im not quite bullish myself on irish property but over last two months rent prices has been moving up fast around D2 area. I know cause i was looking.
> 
> 2 Months ago it was 1400 for 2 bed and maybe parking. Now its 1700 for two bed with parking.
> 
> Rents should be going the opposite way in a depressed market no??
> 
> Think London 1990......


 
It's obvious ex-rental properties are appearing on the property web sites for sale.  Just looking at the photos in the adverts shows it.  A lot of these properties would have come out of lease in September and are now on the "For sale" market.
A prospective investor wouldn't be wise to jump in to the market on the basis of strengthening rental prices because it is clear that increases are temporary and will drop if the ex-rentals sell thru or their owners reconcile themselves with the fact that they will not sell quickly and rent them out to cover mortgage payments while trying to sell with a sitting tenant.


----------



## Bedsit

I have a question with regards to the new NIB mortgage product. Looking at some of the previous posts it was suggested that not many people would be able to avail this product. So for example, if a person took out a 95 or 100% mortgage on a 400K property, how long would it take before they would be able bring it down into the 80% range to qualify for the NIB product.

The figure I am trying to get at here is how many years it would take on average to pay off 15-20% of the loan. I presume this includes the capital and interest payments.


----------



## Debtwish

ecstatic said:


> if demand was weakening and sentiment was changing we would see tenants knocking prices off there rent as when everyone smells blood they go for it and want a slice of the action.
> 
> Especially in ireland...
> 
> Im bearish myself but rental price increase just doesnt add up...


 
Of course it does. Rents are set by simple supply and demand. If landlords are selling portfolios then there is less supply in the rental market. The demand is still there though. But when the property market really rolls over and jobs are lost in the sector, demand will fall too, but that is some months away yet.


----------



## phoenix_n

Originally Posted by *phoenix_n* http://www.askaboutmoney.com/showthread.php?p=285830#post285830
_Could someone explain why this [broken link removed] would be worth 900,000 + stamp duty_



solatic said:


> Did they say 900k? That was a typo, they meant 850k. EA must be new to the game, etc etc.


 
So now its gone down to 850K. And there are some that still think there is going to be a soft landing.


----------



## Purple

thewatcher said:


> But if the youth of today let the bubble burst then it will be over, no longer will todays workers let the older generation live off their sweat and toil.The price of a house will once again become a fair reflection of a proper day's work !.


 Yes comrade, and when the revolution comes we will all have free housing anyway.


----------



## partisan

Eirmail said:


> This could be a temporary situation. It looks like more and more landlords are "trying" to sell there properties once the 12 month leases expire. This can be explained by the huge increase in properties for sale in Daft in the last few months. All of these properties that are on the for sale market have been temporily taken out of the rental market. So those few landlords who choose to rent can increase the rent they are looking for. I suspect that this will return to normal in a few months. A landlord who has a property that can't sell it after a few months might rent it out again and even if they do sell it , it might be sold to some buy to let investor which will result in it being back in the rental market.



A landlord who bought a property 5 or 10 years ago can afford to cash out at well below the current market rate. Some of those properties will be bought as pprs, which will reduce the number of rentable properties on the market. House prices are falling (I've been house hunting recently - almost every house I've seen has been reduced), but I don't think that rents are going to fall any time soon in Dublin.


----------



## Calina

partisan said:


> A landlord who bought a property 5 or 10 years ago can afford to cash out at well below the current market rate. Some of those properties will be bought as pprs, which will reduce the number of rentable properties on the market. House prices are falling (I've been house hunting recently - almost every house I've seen has been reduced), but I don't think that rents are going to fall any time soon in Dublin.



Strictly speaking I've long been of the opinion that as the property market starts to slide, there will be a spike in rental costs - they will go up. But that may not last as property - particularly ex-investment property - fails to sell and owners are forced to rent it out to cover some of the mortgage at least. There will probably be a glut of rental property appearing in certain outer-rim estates after a while, driving rentals down again. Spike first though.


----------



## thewatcher

Purple said:


> Yes comrade, and when the revolution comes we will all have free housing anyway.


 
I don't think i ever said we should have free housing,but FTB's should realise that by "getting on the ladder" they are just getting involved in a giant pyramid scheme making everyone at the top richer.

What happens with every pyramid scheme when people stop coming in at the bottom ?

Only then will house prices return to sustainable levels.


----------



## Purple

thewatcher said:


> I don't think i ever said we should have free housing,but FTB's should realise that by "getting on the ladder" they are just getting involved in a giant pyramid scheme making everyone at the top richer.
> 
> What happens with every pyramid scheme when people stop coming in at the bottom ?
> 
> Only then will house prices return to sustainable levels.



The price of a house has shag all to do with a fair day's work. It is a reflection of what people are willing to pay for it. If FTB's are willing to spend €4000 a month for a property that they could rent for €1600 then more fool them. 
BTW has anyone actually read all of the posts on this thread


----------



## Debtwish

Purple said:


> Yes comrade, and when the revolution comes we will all have free housing anyway.


 
I know you are being satirical but you touch on an interesting point.

Food and shelter are two basic human needs. It would be completely immoral for the rich in society to hoard food and enrich themselves by forcing the poor to pay inflated prices. Yet this is exactly what has happened in the housing market.

We have seen a huge transfer of wealth from young to old. Ireland's young have been completely shafted by their selfish elders who consider they have a divine right to grab as much property as they can with their borrowed money. 

A crash in the housing market is exactly what today's university generation needs if they will ever have a chance of living the sort of life their parents take for granted.


----------



## comanche

Debtwish said:


> I know you are being satirical but you touch on an interesting point.
> 
> Food and shelter are two basic human needs. It would be completely immoral for the rich in society to hoard food and enrich themselves by forcing the poor to pay inflated prices. Yet this is exactly what has happened in the housing market.
> 
> We have seen a huge transfer of wealth from young to old. Ireland's young have been completely shafted by their selfish elders who consider they have a divine right to grab as much property as they can with their borrowed money.
> 
> A crash in the housing market is exactly what today's university generation needs if they will ever have a chance of living the sort of life their parents take for granted.


 
is it not a bit ironic that this very same generation is now having to subsidise the children by way of deposits and guaranteeing loans!

talk about pyramid schemes!


----------



## room305

Debtwish said:


> Food and shelter are two basic human needs. It would be completely immoral for the rich in society to hoard food and enrich themselves by forcing the poor to pay inflated prices. Yet this is exactly what has happened in the housing market.



This is more than a touch dramatic and panders to Chavez socialists who would like to see virtually every market placed under government control.

Rich people didn't "buy up all the houses" and then force the poor to pay inflated prices for them, that doesn't even make any sense.

People, rich and less well-off alike, happily indebted themselves while affordable rental accommodation was available.

Very few people have ended up homeless in this country simply because they are unable to afford to buy a house.


----------



## Bedsit

[broken link removed](Irish Times)

"... Germany's economic "wise men"  are expected to round up their economic forecasts for 2006 and 2007 to between 2.3 and 2.4 per cent in their autumn report tomorrow. ..."


----------



## partisan

Debtwish said:


> I know you are being satirical but you touch on an interesting point.
> 
> Food and shelter are two basic human needs. It would be completely immoral for the rich in society to hoard food and enrich themselves by forcing the poor to pay inflated prices. Yet this is exactly what has happened in the housing market.
> 
> We have seen a huge transfer of wealth from young to old. Ireland's young have been completely shafted by their selfish elders who consider they have a divine right to grab as much property as they can with their borrowed money.
> 
> A crash in the housing market is exactly what today's university generation needs if they will ever have a chance of living the sort of life their parents take for granted.



A serious crash would leave behind it a bankrupt country with little in the way of indigenous employment - emigration would once again be the only option. The construction industry, banking, restaurants, bars, mortgage brokers, estate agents, almost any company that did not derive the lion share of it's revenues from exports would be severly negatively affected (local software companies, insurance firms, travel agents etc, etc). The public sector would be decimated.


----------



## Dannybouy

partisan said:


> A serious crash would leave behind it a bankrupt country with little in the way of indigenous employment - emigration would once again be the only option. The construction industry, banking, restaurants, bars, mortgage brokers, estate agents, almost any company that did not derive the lion share of it's revenues from exports would be severly negatively affected (local software companies, insurance firms, travel agents etc, etc). The public sector would be decimated.


 


and the downside?


----------



## liteweight

Dannybouy said:


> and the downside?



If you or any of your friends family work in these industries, they'll be lucky to be able to afford a sleeping bag never mind all the cheap properties some hope to pick up in the event of a crash.


----------



## thewatcher

Purple said:


> The price of a house has shag all to do with a fair day's work. It is a reflection of what people are willing to pay for it


 
In the final analysis everything must come back to wages,it is the fundamental that drives everything else.We are on a credit binge at the moment that is why wages have become detached from house prices, however a nation can only borrow so much then it hits the wall. See the USA,this is where we are going.



partisan said:


> A serious crash would leave behind it a bankrupt country with little in the way of indigenous employment - emigration would once again be the only option. The construction industry, banking, restaurants, bars, mortgage brokers, estate agents, almost any company that did not derive the lion share of it's revenues from exports would be severly negatively affected (local software companies, insurance firms, travel agents etc, etc). The public sector would be decimated.


 
Is this not the road we are already on,do you think the construction industry can be sustained indefinitely ?


----------



## Dannybouy

there will be no crash just a soft landing prices can not fall


----------



## SteelBlue05

Dannybouy said:


> there will be no crash just a soft landing prices can not fall


 
?? Already plenty of examples of reduced asking prices.


----------



## Calina

Dannybouy said:


> there will be no crash just a soft landing prices can not fall



Why?


----------



## JayDub

JayDub said:


> Mullingar is also feeling the pinch,
> 
> 3rd house from top, 100 Ardmore Hills reduced from €600,000
> [broken link removed]
> 
> Now going for €550,000
> http://www.daft.ie/searchsale.daft?id=140651&search=1http://www.daft.ie/searchsale.daft?id=140651&search=1http://www.daft.ie/searchsale.daft?id=140651&search=1


 
The above house is now on the market for €500,000. Thats a nice drop of €100,000 over the past couple of months.

http://www.daft.ie/searchsale.daft?id=132642&search=1


----------



## Debtwish

liteweight said:


> If you or any of your friends family work in these industries, they'll be lucky to be able to afford a sleeping bag never mind all the cheap properties some hope to pick up in the event of a crash.


 
Why? Surely anything that makes us more export competitive, less reliant on construction and more attractive to long-term investors is a good thing. There may be some short-term pain as the economy shifts emphasis but it will make for a more stable future.


----------



## murray

Dannybouy said:


> there will be no crash just a soft landing prices can not fall


 
http://irish-property-bubble.blogspot.com/ 

what an odd opinion (you are joking - right?)


----------



## Remix

partisan said:


> A serious crash would leave behind it a bankrupt country with little in the way of indigenous employment - emigration would once again be the only option. The construction industry, banking, restaurants, bars, mortgage brokers, estate agents, almost any company that did not derive the lion share of it's revenues from exports would be severly negatively affected (local software companies, insurance firms, travel agents etc, etc). The public sector would be decimated.


 

I often wonder if our leaders and elites in the banking and property sectors thought much of the risks and ultimate consequences while huge short-term profits where being made, pockets were being lined and the bubble was allowed to inflate to the current comical proportions. The answer is probably not !


----------



## Open_Window

JayDub said:


> The above house is now on the market for €500,000. Thats a nice drop of €100,000 over the past couple of months.
> 
> http://www.daft.ie/searchsale.daft?id=132642&search=1



Its now at 550K on daft, oso has it gone up again? 

Should we not be emailing the estate agents and papers pointing out this very shady practice and widthodoing of very important information particularly buyers.

I don't understand, if EA advertise the reduction people might reconsider buying. They could also assume the position that more drops could come but thats the market baby.


----------



## JayDub

Open_Window said:


> Its now at 550K on daft, oso has it gone up again?
> 
> Should we not be emailing the estate agents and papers pointing out this very shady practice and widthodoing of very important information particularly buyers.
> 
> I don't understand, if EA advertise the reduction people might reconsider buying. They could also assume the position that more drops could come but thats the market baby.


 
I'm still seeing 500K, I drove past this property last week and there are two different real estate agents TRYING to sell this property.

http://www.daft.ie/searchsale.daft?id=132642&search=1

No. 100 Ardmore Hills, Mullingar,
Co. Westmeath *Detached House Region €500,000 - Finance this property from €1,954 per month *For Sale by Private Treaty*5 Bedrooms, 2 Bathrooms


----------



## room305

Debtwish said:


> Why? Surely anything that makes us more export competitive, less reliant on construction and more attractive to long-term investors is a good thing. There may be some short-term pain as the economy shifts emphasis but it will make for a more stable future.



I think "short term pain" might be glossing things over here a little Debtwish. This will be brutal, even for those not involved in construction and related sectors. If the housing market goes into freefall then I think a deflationary recession is inevitable and almost nobody enjoys those (with the possible exception of those holding large hordes of cash and no debt).

Not a great environment for business growth or attracting investment either. Multinational companies like to invest in countries with expanding rather than contracting economies.


----------



## miju

check again that property is at 500k not 550k


----------



## whathome

room305 said:


> Multinational companies like to invest in countries with expanding rather than contracting economies.


 
Why? Surely for a multinational choosing where to invest, an expanding European economy is more relevant than an imploding Irish economy? They're not likely to care much about the local economy if their focus is export based.


----------



## ecstatic

It seems that the crash is more predominant in areas are lets be honest about it off the beaten track mullingar come on who wants to live there at 500k for property?????

Sense of realism is needed in this thread not some pointed finger to some place that noone wants to live in...


----------



## whathome

ecstatic said:


> It seems that the crash is more predominant in areas are lets be honest about it off the beaten track mullingar come on who wants to live there at 500k for property?????
> 
> Sense of realism is needed in this thread not some pointed finger to some place that noone wants to live in...


 
Yeah right - last week anyone talking up the market was saying that it was only mid-high end properties in Dublin that were falling. Now it's only Mullingar or places that's off the beaten track that are falling. Next week it will only be places like Lucan or Swords. The week after that it will only be.....blah blah blah
*All *areas have been affected by falling asking prices.


----------



## JayDub

Mullingar is only 20 minutes drive to Maynooth, what woud you rather spend 500k on

Maynooth
http://www.daft.ie/searchsale.daft?id=140171&search=1

Mullingar
http://www.daft.ie/searchsale.daft?id=132642&search=1

I work from home so commuting does not factor into where I live. Have you actually been to Mullingar lately, its a great little, growing town.


----------



## partisan

thewatcher said:


> In the final analysis everything must come back to wages,it is the fundamental that drives everything else.We are on a credit binge at the moment that is why wages have become detached from house prices, however a nation can only borrow so much then it hits the wall. See the USA,this is where we are going.
> 
> 
> 
> Is this not the road we are already on,do you think the construction industry can be sustained indefinitely ?



The construction industry can't maintain the level of growth it has experienced in recent years. However Ireland still has a severe infrastructural deficit. Traffic is a nightmare (we need better roads, trains etc) and most of these new housing estates need schools, shopping facilities, leisure centres. There is no need for that sector to collapse. If the housing slow down is mild and prolonged rather than a crash there is no reason why those resources can't be deployed elsewhere. If house prices moderate without a crash, hopefully we can maintain the current level of immigration (and find them jobs) soaking up the current high levels of supply in the housing market. That way our economy can continue to grow, and your wages can continue to rise - hopefully faster than house prices.

There was severe irrational exuberance in the market early this year as buyers convinced themselves that there would be an SSIA related boom (causing an SSIA related boom ;-) ). In reality SSIA savings had already been priced into the market. In recent years, those that could afford to keep their SSIAs, were allowed to borrow more, and those that couldn't ploughed their savings into their deposit. The recent correction is the market readjusting itself to it's new longterm Eurozone trend (i.e. the trend since 2000). We may have overshot with our upward correction for low interest rates also.

We have permenantly lower interest rates now. You are never again going to see interest rates at 20%, the old 2.5 or 3 times your salary guideline is long outdated. We have the highest female labour participation in Europe, we have the fastest growing economy in Europe. Focusing on median industrial wages of just over 30k misses the point. The average age of a first time buyer in most EU economies is early thirties. You tend earn more as you get older. Thus the median wage of those who purchase houses is likely to be significantly higher - you can double that salary too - thanks to our high female labour participation. Also consider that a large proportion of income is unsalaried - the small business men, the contractors, the cash-in-hand black economy, the investors - these people will also earn significantly more than the median industrial wage. Then factor in low interest rates, low personal taxes and interest rate relief. What you end up with is nominally high house prices. They are also here to stay. But cheer up ;-) providing our economy stays strong you'll be able to afford the repayments. The alternative, a crash, cheap housing but no jobs and crap wages is not an alternative at all.


----------



## thewatcher

room305 said:


> I think "short term pain" might be glossing things over here a little Debtwish. This will be brutal, even for those not involved in construction and related sectors. If the housing market goes into freefall then I think a deflationary recession is inevitable and almost nobody enjoys those (with the possible exception of those holding large hordes of cash and no debt).
> 
> Not a great environment for business growth or attracting investment either. Multinational companies like to invest in countries with expanding rather than contracting economies.


 
Surely people are just saying what they see happening looking at all the evidence.I don't wish for a crash,i see it happening but i don't wish for one.
I think it comes down to 2 things,

if you believe the irish property market is built on sound fundamentals, then we will be ok.
if you believe the irish property market is built on rampant speculation,then we are in trouble.


----------



## phoenix_n

whathome said:


> Yeah right - last week anyone talking up the market was saying that it was only mid-high end properties in Dublin that were falling. Now it's only Mullingar or places that's off the beaten track that are falling. Next week it will only be places like Lucan or Swords. The week after that it will only be.....blah blah blah
> *All *areas have been affected by falling asking prices.


 
Its called denial.


----------



## SteelBlue05

JayDub said:


> Mullingar is only 20 minutes drive to Maynooth, what woud you rather spend 500k on
> 
> Maynooth
> http://www.daft.ie/searchsale.daft?id=140171&search=1
> 
> Mullingar
> http://www.daft.ie/searchsale.daft?id=132642&search=1
> 
> I work from home so commuting does not factor into where I live. Have you actually been to Mullingar lately, its a great little, growing town.


 

Mullingar is 36 miles from Maynooth, you would have to do an average of 108 miles per hour to get there in 20 mins.


----------



## ecstatic

Maynooth another place thats miles away from anywhere, these places are all not what id call handy for work handy for anything...

Im bearish myself but who wants to live in leixlip ? maynooth ?? mullingar ???.. 

Certainly i dont want to travel two hours to work every day a waste of time.


----------



## ecstatic

Show me somewhere dublin on the coastel region that has been priced down ?


----------



## ecstatic

I believe its rampant speculation.. 

But then again prices in switzerland are off the wall.. 

And prices in netherlands are not too far behind ireland...


----------



## StoppedClock

Regarding Rent Rising there is an interesting article in today's (Melbourne) Age http://www.theage.com.au/news/busin...ancy-rates-fall/2006/10/17/1160850931730.html


----------



## comanche

ecstatic said:


> Maynooth another place thats miles away from anywhere, these places are all not what id call handy for work handy for anything...
> 
> Im bearish myself but who wants to live in leixlip ? maynooth ?? mullingar ???..
> 
> Certainly i dont want to travel two hours to work every day a waste of time.


 
um all those places are well serviced by the train to connolley.

35 min for train to connolley from leixlip

These places have infrastructure - its places like Trim, Ballivor, Navan etc without either motorway or rail services that will suffer esp given that we are reaching oil peak.

One of the big factor effecting the correction in california at the moment is gas prices, places close to work & school are staying somewhat up, but anything else is slipping in value


----------



## room305

whathome said:


> Why? Surely for a multinational choosing where to invest, an expanding European economy is more relevant than an imploding Irish economy? They're not likely to care much about the local economy if their focus is export based.



We still have high wages and an infrastructal deficit. Companies are unlikely to want to base themselves in a country undergoing a recession, especially if during that recessionary period, interest rates are still rising.

They would probably prefer to pick a country that is about to undergo a period of sustained growth rather than one that has just been through a boom and is looking a bust square in the face.

Much as I am loathe to admit it, the "soft landing" for housing may be the lesser of two evils, although I very much doubt it can be achieved.


----------



## howstrange

ecstatic said:


> Show me somewhere dublin on the coastel region that has been priced down ?



Open your eyes man! I have already posted a few links of price drops in central areas. The asking price on a decent 2 bed apt last wk in Kilmainham  was dropped 20K. I saw a 3 bed apt today in Inchicore that has dropped its asking price 15K. Others have been on the market for ages. Lots of people have posted decent examples of price drops in central Dublin!!!


----------



## whathome

phoenix_n said:


> Its called denial.


 
You're right, it goes something like this...

"Prices might fall in some areas but they'll never fall in my area because we have (insert as may of the following as you like)".....

a) The Luas/Bus Corridor/Airport/Motorway/Dart/Metro
b) Lots of leafy trees
c) A local multinational
d) Redbrick houses
e) Trophy houses
f) Huge demand
g) A wonderful school only down the road
h) The new shopping centre/cinema/library/college/gym
i) A public swimming pool under construction
j) No management company fees
k) Near the coast!
l) A great local TD who will never let prices fall


----------



## irlstu

ecstatic said:


> Show me somewhere dublin on the coastel region that has been priced down ?



Nice apartment in lovely costal Monkstown:

Was quoting  back in July

Now quoting [broken link removed]


----------



## JayDub

SteelBlue05 said:


> Mullingar is 36 miles from Maynooth, you would have to do an average of 108 miles per hour to get there in 20 mins.


Jaysus, I better check my speedometer and see if its in miles or kilometers  I was always wondering why the country people drive so slow


----------



## whathome

ecstatic said:


> Show me somewhere dublin on the coastel region that has been priced down ?


 
took 2 seconds to find these:
Dun Laoghaire...

Number 2 in the following list (Airhill, Tivoli Terace)
Was €720,000


*Reduced to* €595,000
[broken link removed]=

Number 8 in the following list (6 Hillview Drive)
Was €675,000


*Reduced to* €635,000
[broken link removed]=


----------



## StoppedClock

whathome said:


> took 2 seconds to find these:
> Dun Laoghaire...
> 
> Number 2 in the following list (Airhill, Tivoli Terace)
> Was €720,000
> 
> 
> *Reduced to* €595,000
> [broken link removed]=
> 
> Number 8 in the following list (6 Hillview Drive)
> Was €675,000
> 
> 
> *Reduced to* €635,000
> [broken link removed]


 

OK in that case find me somewhere rural on the coast, in the midlands in a small town, in Dublin center that has gone down...


----------



## whathome

StoppedClock said:


> OK in that case find me somewhere rural on the coast, in the midlands in a small town, in Dublin center that has gone down...


----------



## whathome

A worried owner in The Belfry, Citywest voices concern about falling prices but help is at hand...don't worry everything is great, coming soon is:

Luas, Swimming Pool, Gym, Green Space, Primary School, Dunnes Stores, A recycling centre, creche, Shopping Centre.

None of those things are available anywhere else - so prices in the Belfry Citywest will never fall .... phew!!!


----------



## JayDub

JayDub said:


> Another house in Mullingar dropped 25k this week
> 
> Old price *€*600,000
> 
> 
> New Price *€*575,000
> [broken link removed]


 
Some people on this board seem to think that price drops outside the captial should not be factored into the equation. Sorry but this a nationwide slump. The above dropped from €600,000 to €575,000, its dropped again to €540,000. That's a 10% drop within a couple of weeks.

[broken link removed]


----------



## redo

233 properties for sale in Lucan


----------



## StoppedClock

Whathome could you find me a price reduction in any of the Dundrum apartments, not really sure how you do it?


----------



## conor_mc

partisan said:


> The construction industry can't maintain the level of growth it has experienced in recent years. However Ireland still has a severe infrastructural deficit. Traffic is a nightmare (we need better roads, trains etc) and most of these new housing estates need schools, shopping facilities, leisure centres. There is no need for that sector to collapse. If the housing slow down is mild and prolonged rather than a crash there is no reason why those resources can't be deployed elsewhere.


 
Hmmm, who'll pay for all these wonderful new developments in infrastructure when stamp-duty and construction-related VAT takings fall? Besides, infrastructure development is less labour-intensive than house building, it involves more heavy machinery than brickies and plumbers etc.




partisan said:


> We have the highest female labour participation in Europe, we have the fastest growing economy in Europe. Focusing on median industrial wages of just over 30k misses the point. The average age of a first time buyer in most EU economies is early thirties. You tend earn more as you get older. Thus the median wage of those who purchase houses is likely to be significantly higher - you can double that salary too - thanks to our high female labour participation.


 
Chicken before the egg? What if high female participation is due to extortionate housing costs? What if we use the relationship between avg industrial wage and avg house price because thats what works everywhere else and Ireland is no different! What if our average buying age is lower than Europe because people are afraid of missing the boat and/or see that they "can't lose" with property?

This is typical bull rubbish. We're not so special in Ireland that you can just throw away every historic rational measure of affordability with "new paradigm" trash-talk. Cheap credit has fuelled massive speculation, and flushing that speculation out of the system will be painful for the economy. The sooner we do it, the better imo, as its a necessary evil at this stage.


----------



## JayDub

StoppedClock said:


> Whathome could you find me a price reduction in any of the Dundrum apartments, not really sure how you do it?


Number 10 on the list dropped 15k in price.
http://tinyurl.co.uk/bx5r

[broken link removed]=


----------



## StoppedClock

JayDub said:


> Number 10 on the list dropped 15k in price.
> http://tinyurl.co.uk/bx5r
> 
> [broken link removed]


 
Thanks.  Can you PM me how you did it?


----------



## kirian

partisan said:


> We have permenantly lower interest rates now. You are never again going to see interest rates at 20%, the old 2.5 or 3 times your salary guideline is long outdated.



The flip side to low interest rates relative to the past is that inflation is lower.

With the ECB targeting 2% inflation this is a very different scenario to what we had in Ireland in the past. (I know inflation in Ireland is higher than 2% at the moment but this is decreasing our competitiveness).

When interest rates were high and inflation was high the mortgage repayments may have started at a high % of income like now but inflation would have meant that wages would increase  and the real cost of the mortgage would decrease. 

Now it takes a high % of income to service a morgage and with inflation lower the real cost of this is not reducing as quickly as before. 

Inflation is the borrowers friend. We may have "permenantly" lower interest rates but also "permenantly" lower inflation. This is over looked by many people I think.


----------



## gearoidmm

StoppedClock said:


> Regarding Rent Rising there is an interesting article in today's (Melbourne) Age http://www.theage.com.au/news/busin...ancy-rates-fall/2006/10/17/1160850931730.html



Rents definitely rising rapidly in Dublin City (D1, 2, 4and 6 - unsure of the rest).  The number of available properties for rent has fallen by half in the past 6 months.  Two beds in the city centre are now looking for 1400-1600.  Very little in the 1100-1300 price range compared to last year when it was possible to negotiate rents down to that level.

In parallel with that, the number of properties available to buy has increased by 50% in the past 4 months.  Seems that a lot of investment property is being dumped on the market..


----------



## dontaskme

Debtwish said:


> We have seen a huge transfer of wealth from young to old. Ireland's young have been completely shafted by their selfish elders who consider they have a divine right to grab as much property as they can with their borrowed money.


 
I don't agree with this. If older people have more wealth it is usually because they have worked all their adult lives.


----------



## gearoidmm

dontaskme said:


> I don't agree with this. If older people have more wealth it is usually because they have worked all their adult lives.



That might normally be true but if you are earning 30k a year and your house has increased in value by 300,000 in the past 5 years you haven't really 'earned' the extra money in any traditional sense.  Essentially it's a transfer of borrowed wealth from young to old


----------



## JayDub

StoppedClock said:


> Whathome could you find me a price reduction in any of the Dundrum apartments, not really sure how you do it?


 
Another one

Number 1 on list - Old price - 585k
http://tinyurl.co.uk/t8b9

New price - 560k
[broken link removed]=


----------



## StoppedClock

dontaskme said:


> I don't agree with this. If older people have more wealth it is usually because they have worked all their adult lives.


 
And not because they bought their houses prior to a period of massive inflation? I know many many older friends and family members who 5 years ago worried about their retirement because even though they had worked all their lives they had not really accumulated much wealth beyond PPR and some €200 a week pension. Now they have sold up, moved to to the continent with pension and massive lump sum of capital funded entirely by selling their house. Somebody has to work hard to pay for this but it isn't them.


----------



## thewatcher

gearoidmm said:


> That might normally be true but if you are earning 30k a year and your house has increased in value by 300,000 in the past 5 years you haven't really 'earned' the extra money in any traditional sense. Essentially it's a transfer of borrowed wealth from young to old


 
Bingo

*Irish house prices up 270% since 1996 *

http://www.finfacts.com/irelandbusinessnews/publish/article_10006275.shtml

http://www.unison.ie/irish_independent/stories.php3?ca=9&si=1574591&issue_id=13766


----------



## partisan

conor_mc said:


> Hmmm, who'll pay for all these wonderful new developments in infrastructure when stamp-duty and construction-related VAT takings fall? Besides, infrastructure development is less labour-intensive than house building, it involves more heavy machinery than brickies and plumbers etc.
> 
> 
> 
> 
> Chicken before the egg? What if high female participation is due to extortionate housing costs? What if we use the relationship between avg industrial wage and avg house price because thats what works everywhere else and Ireland is no different! What if our average buying age is lower than Europe because people are afraid of missing the boat and/or see that they "can't lose" with property?
> 
> This is typical bull rubbish. We're not so special in Ireland that you can just throw away every historic rational measure of affordability with "new paradigm" trash-talk. Cheap credit has fuelled massive speculation, and flushing that speculation out of the system will be painful for the economy. The sooner we do it, the better imo, as its a necessary evil at this stage.



That's odd, because I'm bear. House prices are overvalued, they are falling right now. 

I did say that our permenant change to a low interest rate environment and our own current economic circumstances lends itself to high prices. You can rail against the economic realities of our society all you like - our labour participation rates & the fact that higher earners buy houses and thus set the prices. Ireland has changed, the yard sticks of 20 or 30 years ago don't apply. We are a high wage, wealthy economy now. Look at the economic histories of long established  high wage economies like London, New York or San Francisco for guidance instead of pre Celtic-tiger Ireland.
What if prices were half what they are today, with our current economy? You'd snap them up, because they'd be bargains. You'd make a killing from renting them. A solo buyer could snap up a luxury trophy house in a good location. Except that - there'd be intense competition for those houses and the price would rise again very quickly. 
People saw the money being made by others in property and piled into it. (The market became efficient, eroding profits to zero). The market overshot (investors subsidising renters) and it is correcting now. But if you think that our economy warrants low house prices you're living in a dream world. The only way to sustain low house prices is to trash our economy. Is that what you want???

Incidentally, as regards the much maligned term "new paradigm". My understanding of this was that increased computerisation has led to a higher sustainable level of economic growth. This was misapplied to the general economy at the peak of the dot.com boom. When the nasdaq crashed and the crazy VC funds for online pet retailers dried up the term declined in popularity. But my understanding is that heavily computerised industries _have_ seen such a sustainable increase in productivity growth. New environment, new effect. What it doesn't warrant is a P/E of 60 for an online pet food retailer - that was irrational exuburance. But what if you were an early stage investor in Google?


----------



## walk2dewater

kirian said:


> The flip side to low interest rates relative to the past is that inflation is lower.
> 
> With the ECB targeting 2% inflation this is a very different scenario to what we had in Ireland in the past. (I know inflation in Ireland is higher than 2% at the moment but this is decreasing our competitiveness).
> 
> When interest rates were high and inflation was high the mortgage repayments may have started at a high % of income like now but inflation would have meant that wages would increase and the real cost of the mortgage would decrease.
> 
> Now it takes a high % of income to service a morgage and with inflation lower the real cost of this is not reducing as quickly as before.
> 
> Inflation is the borrowers friend. We may have "permenantly" lower interest rates but also "permenantly" lower inflation. This is over looked by many people I think.


 
For the umpteenth time, it's WAGE inflation that's the borrowers friend not PRICE inflation.


----------



## phoenix_n

With all those price drops its becoming obvious that the "current vendors sentiment" is sell, sell, sell.


----------



## thewatcher

partisan said:


> The construction industry can't maintain the level of growth it has experienced in recent years. However Ireland still has a severe infrastructural deficit. Traffic is a nightmare (we need better roads, trains etc) and most of these new housing estates need schools, shopping facilities, leisure centres. There is no need for that sector to collapse. If the housing slow down is mild and prolonged rather than a crash there is no reason why those resources can't be deployed elsewhere. If house prices moderate without a crash, hopefully we can maintain the current level of immigration (and find them jobs) soaking up the current high levels of supply in the housing market. That way our economy can continue to grow, and your wages can continue to rise - hopefully faster than house prices.
> 
> There was severe irrational exuberance in the market early this year as buyers convinced themselves that there would be an SSIA related boom (causing an SSIA related boom ;-) ). In reality SSIA savings had already been priced into the market. In recent years, those that could afford to keep their SSIAs, were allowed to borrow more, and those that couldn't ploughed their savings into their deposit. The recent correction is the market readjusting itself to it's new longterm Eurozone trend (i.e. the trend since 2000). We may have overshot with our upward correction for low interest rates also.
> 
> We have permenantly lower interest rates now. You are never again going to see interest rates at 20%, the old 2.5 or 3 times your salary guideline is long outdated. We have the highest female labour participation in Europe, we have the fastest growing economy in Europe. Focusing on median industrial wages of just over 30k misses the point. The average age of a first time buyer in most EU economies is early thirties. You tend earn more as you get older. Thus the median wage of those who purchase houses is likely to be significantly higher - you can double that salary too - thanks to our high female labour participation. Also consider that a large proportion of income is unsalaried - the small business men, the contractors, the cash-in-hand black economy, the investors - these people will also earn significantly more than the median industrial wage. Then factor in low interest rates, low personal taxes and interest rate relief. What you end up with is nominally high house prices. They are also here to stay. But cheer up ;-) providing our economy stays strong you'll be able to afford the repayments. The alternative, a crash, cheap housing but no jobs and crap wages is not an alternative at all.


 
You make some good points,fair play to you.There's been some good debate today !.
Conor_mc has addressed all the issue i think so i won't repeat what he said.

With regard to interest rates,there is a case that when we went with the ECB and rates dropped houses were undervalued an thus increased in value.I would agree with this in the 1996-2001 period.After this AFAIC there is no justification whatsoever for the 2001-2006 increases only a bubble pure and simple !.


----------



## Debtwish

partisan said:


> What if prices were half what they are today, with our current economy? You'd snap them up, because they'd be bargains. You'd make a killing from renting them.


 
Even if prices were to halve, you'd still only receive around a 5% gross yield. Doesn't sound like a killing to me.


----------



## dontaskme

StoppedClock said:


> And not because they bought their houses prior to a period of massive inflation? I know many many older friends and family members who 5 years ago worried about their retirement because even though they had worked all their lives they had not really accumulated much wealth beyond PPR and some €200 a week pension. Now they have sold up, moved to to the continent with pension and massive lump sum of capital funded entirely by selling their house. Somebody has to work hard to pay for this but it isn't them.


 
But I don't begrudge them because they have worked all their lives and like you say, even a few years ago they did not have much and I think if they have lucked out now, fair play to them. 

Young people mostly don't have any wealth to transfer anyway, the transfer is of their future earnings as facilitated by credit.

And sure is not youth itself wealth enough?


----------



## dontaskme

gearoidmm said:


> That might normally be true but if you are earning 30k a year and your house has increased in value by 300,000 in the past 5 years you haven't really 'earned' the extra money in any traditional sense. Essentially it's a transfer of borrowed wealth from young to old


 
borrowed wealth is an oxymoron
debt is not wealth


----------



## thewatcher

dontaskme said:


> debt is not wealth


 
It is when someone else has to pay off the debt !


----------



## partisan

Debtwish said:


> Even if prices were to halve, you'd still only receive around a 5% gross yield. Doesn't sound like a killing to me.



I calculated yields of around 7%, I guess it depends on the property and what assumptions you make.


----------



## room305

partisan said:


> That's odd, because I'm bear. House prices are overvalued, they are falling right now.



Nobody is suggesting house prices are going to drop 50% tomorrow. Otherwise I would definitely buy in. Most likely they will fall some low double digit percentage next year followed by several years of stagnation (correction in real terms).

It is the knock on consequences of this that are the problem:

- Fall in employment
- Realisation of how much of our growth is fuelled by credit
- Reduction of wealth effect

Since people are not looking at house prices rationally on the way up, why would you expect them to do so on the way down? The market overshot and is likely to overcorrect. The problems come when we try to deal with that reality.

Since the vast majority of people seem unwilling to even countenance such a scenario, it doesn't bode well for a pain free market correction.


----------



## Savvy

€220k [broken link removed]
€185k 
€180k [broken link removed]
€175k http://www.daft.ie/searchsale.daft?id=150290

The price is all over the place on this one. I've seen it for sale at 225 and 200 also.
So as asking prices go, its dropped from 225 to 175 in a few months.
I'd say this is probably the first >20% drop.


----------



## Arthur Daley

room305 said:


> Since people are not looking at house prices rationally on the way up, why would you expect them to do so on the way down? The market overshot and is likely to overcorrect.


 
This is key as there is a herd mentality with the average punter at work. All this talk of 'soft landings' and 'new paradigms' is a bit sickening really at this stage and it fails to explain why private sector credit has increased by 28/29% each year since 2001. A correction has been soming for years. There's a tipping point here somewhere and it could be the daft reports or a couple of months sustained falls in the ESRI index. Combined with 25bps from the ECB in December and another 25bps spring '07


----------



## beattie

Savvy said:


> €220k [broken link removed]
> €185k
> €180k [broken link removed]
> €175k http://www.daft.ie/searchsale.daft?id=150290
> 
> The price is all over the place on this one. I've seen it for sale at 225 and 200 also.
> So as asking prices go, its dropped from 225 to 175 in a few months.
> I'd say this is probably the first >20% drop.


 
When it hits about 100k it will have reached fair value IMO


----------



## Debtwish

http://www.rte.ie/business/2006/Morningrep/download/1018goodbody.pdf

Bank of Ireland sold 36 branches

"Press reports this morning (the property supplement) carry a story that BOI has agreed to sell its 36 branch portfolio for in excess of the €237.5m guide price. The initial yield on the guide price was 3.25%. It is unclear how much in excess of the guide it went for - there appears to be a range of buyers - however, note that we have already pencilled in capital gains to our core equity and Tier 1 calculations."

cute hoors.


----------



## Duplex

Debtwish said:


> http://www.rte.ie/business/2006/Morningrep/download/1018goodbody.pdf
> 
> Bank of Ireland sold 36 branches
> 
> "Press reports this morning (the property supplement) carry a story that BOI has agreed to sell its 36 branch portfolio for in excess of the €237.5m guide price. The initial yield on the guide price was 3.25%. It is unclear how much in excess of the guide it went for - there appears to be a range of buyers - however, note that we have already pencilled in capital gains to our core equity and Tier 1 calculations."
> 
> cute hoors.


 

Do as I say not as I do


----------



## Bedsit

Anyone noticed this ad on front of the Indo today. 50 worth of Brown Thomas vouchers when you spend 100 at Tile Style. Desperation I tell ya!


----------



## Arthur Daley

Bedsit said:


> Anyone noticed this ad on front of the Indo today. 50 worth of Brown Thomas vouchers when you spend 100 at Tile Style. Desperation I tell ya!


 
That promotion has run before a few years ago with an ad on the radio featuring some extremely gullible one kinda going 'quick! quick! lets get down and buy some tiles now.........'

As if the vouchers aren't factored into the tile prices!!!!


----------



## Luternau

Since when have people actually put any faith in AMV or offers in the region of prices from EA's? Normally they are way under what they hope to sell for. It looks like this season they all decamped somehere and agreed to seriously over guide this season and see what happens-sure if no-one comes we can set a more realistic price time and time again until the actual value is set. Actual value being established by what someone is prepared to pay for it. As EA's have always pointed out they do not control what people are willing to pay for property. I note that many properties withdrawn at auction are either sold or under negotiatin fro a higher price than the AMV afterwards. So much for the much touted AMV being a true reflection of its value!

So until someone can give real examples of properties selling for less that the did previously all this talk of falling prices is somehat hard to establish. 

Lest anyone ask-I am not an EA. They have had it easy for too long-anyone can sell property in a rising market-lets see them earn their money by actually using those much under used sales skills, and really persuade people to part with their hard earned money!


----------



## markyboy

Arthur Daley said:


> That promotion has run before a few years ago with an ad on the radio featuring some extremely gullible one kinda going 'quick! quick! lets get down and buy some tiles now.........'
> 
> As if the vouchers aren't factored into the tile prices!!!!


 
Not as good as the next release of Adamstown apartments being "pre-wired for I-pods". We're a bit short of the free car / swimming pool offers yet but it's early days I suppose!


----------



## phoenix_n

Luternau said:


> So until someone can give real examples of properties selling for less that the did previously all this talk of falling prices is somehat hard to establish.


 
They have to sell them first though.


----------



## conor_mc

Luternau said:


> So until someone can give real examples of properties selling for less that the did previously all this talk of falling prices is somehat hard to establish.


 
So far, the only claim I've seen is that _asking_ prices are falling. This is being read as a leading indicator of where the market may be heading - it's not being heralded as a crash in full flow.

The main point is that the _soft landing_ is happening now - the trick is for the vested interests to maintain the current pricing regime rather than allowing it to develop into real falling prices i.e. a crash.


----------



## Panzraam

ecstatic said:


> Show me somewhere dublin on the coastel region that has been priced down ?


 
Was €6,750,000

http://www3.myhome.ie/advice_news/article_detail.asp?subcate_id=54&news_id=1508

Now €6,250,000

http://www.sherryfitz.ie/sf2003.exe?pageref=res_property&propid=SUP02232&pagemode=auction


----------



## Bedsit

People are always complaining that there are not enough bulls on this forum. So I thought I would post a link to this bullish article for a change


----------



## Duplex

The thing was a speculative bubble. New entrants were attracted by the prospects of rising capital values. The prospects of rising values (now that we have 15% vacancy rates, rising interest rates, multiple foreign property honey traps and global economic concerns) are over. We now have to endure an acid test of fundemental value at some point of time in the future.


----------



## ecstatic

20% rent rise not 2%...

My god thats a big drop out in dun laoighaire..


----------



## room305

Bedsit said:


> People are always complaining that there are not enough bulls on this forum. So I thought I would post a link to this bullish article for a change



At least he is hedging his bets nicely ...



> If anything, now may be the right time to buy or sell real estate.


----------



## conor_mc

Bedsit said:


> People are always complaining that there are not enough bulls on this forum. So I thought I would post a link to this bullish article for a change


 
This bit's just comical.... it's like he's denying property bubbles can _ever_ exist because of illiquidity and the fact that _some _houses are selling.... hmmm, try telling that to 1989 UK home-buyer!!!!



> But, ah, you may say. There lies proof that the bubble is bursting. Prices are going down. I'll concede that, as I must, but it ain't a bubble. Bubbles burst, often with a quick drop in prices where values of assets fall by 50% or more. It happened with tulips and web-content companies, but it's not happening in housing. Real estate just isn't that liquid. You can't buy and sell it quickly. God forbid if you could. Given the conditions in the market, quick real-estate transactions would've driven home prices even higher, where a three-bedroom townhouse with riparian rights could be bandied around like another Pets.com. Then, the fall in prices would be more severe. But that's not the nature of this particular beast. Instead, we have prices coming down to levels where thinking people, after a long, often tedious, process, are willing to buy. That sounds like an efficient market to my ears.


----------



## Afuera

Bedsit said:


> People are always complaining that there are not enough bulls on this forum. So I thought I would post a link to this bullish article for a change



It's nice to see that he doesn't try and hide his biases:


> So, please, for the sake of all that's holy, stop talking about the housing bubble. For one thing, it just makes you look uninformed. And, worse, it may scare buyers away from the place I'm trying to sell.


----------



## phoenix_n

Arthur Daley said:


> There's a tipping point here somewhere and it could be the daft reports or


 
Nov2 is the next big report. Its when what is known here becomes public.


----------



## howstrange

Everything single person i have talked to about the housing market has said that the current slowdown is due to people waiting to see what happens in the budget with stamp duty!! If i try and say that things were stalling before there was any mention of stamp duty changes, they disagree! It is going to be so interesting to see what actually does happen after the budget and in the new year if stamp duty is left relatively unchanged, daft brings out a negative report and a media frenzy builds up etc etc. The Dec and Oct interest rate increase will also have kicked in. What will the next smoke screen be?


----------



## Arthur Daley

howstrange said:


> What will the next smoke screen be?


 
The fact that the bulk of SSIA's only mature in Jan-Apr '07 to come to the rescue of stretched home buyers/owners


----------



## hmmm

howstrange said:


> What will the next smoke screen be?



"Buyers are waiting for the ECB to stop raising, and will then get a mortgage. Don't worry, it won't be long now before prices start rising again.."

We've already had:
- Nothing sells in Summer, wait till the Autumn selling season
- The weather was very good, so everything has been delayed
- Everyone was away watching the Ryder Cup
- People are waiting for the Budget


----------



## conor_mc

hmmm said:


> "Buyers are waiting for the ECB to stop raising, and will then get a mortgage. Don't worry, it won't be long now before prices start rising again.."
> 
> We've already had:
> - Nothing sells in Summer, wait till the Autumn selling season
> - The weather was very good, so everything has been delayed
> - Everyone was away watching the Ryder Cup
> - People are waiting for the Budget


 
- People are waiting for prices to become more reasonable.....Doh! Dammit, wrong script.... eh..... where did I put that IAVI one....


----------



## room305

howstrange said:


> What will the next smoke screen be?



Everybody is spending their SSIA money on foreign holidays. When they get home they'll start buying houses again.


----------



## thewatcher

Arthur Daley said:


> The fact that the bulk of SSIA's only mature in Jan-Apr '07 to come to the rescue of stretched home buyers/owners


 
http://www.askaboutmoney.com/showpost.php?p=258313&postcount=1938  "first dead cat bounce may 2007"


----------



## bmclough

Heres one in Clonsilla was 460k cant find a link now 440K

[broken link removed]=


----------



## JayDub

howstrange said:


> Everything single person i have talked to about the housing market has said that the current slowdown is due to people waiting to see what happens in the budget with stamp duty!! If i try and say that things were stalling before there was any mention of stamp duty changes, they disagree! It is going to be so interesting to see what actually does happen after the budget and in the new year if stamp duty is left relatively unchanged, daft brings out a negative report and a media frenzy builds up etc etc. The Dec and Oct interest rate increase will also have kicked in. What will the next smoke screen be?


 
According to the Daft house price index, the slowdown/slump started sometime in April/May 06, I don't remember anybody even mentioning stamp duty changes in the next budget at this time. As far as I recall, it wasn't until late September that Michael McDowell brought up the subject of stamp duty.

[broken link removed]


----------



## JayDub

Another 450 manufacturing jobs to be lost in Dublin. How many of these wages are supporting a mortgage.

http://www.rte.ie/business/2006/1018/cadbury.html


----------



## gearoidmm

Talking about job losses in Dublin at the moment as a leading indicator for future house price falls is irrelevant.  We have effectively full employment and unemployment is not anywhere near being a factor yet (which is not to say that it will not in the future).


----------



## Open_Window

gearoidmm said:


> In parallel with that, the number of properties available to buy has increased by 50% in the past 4 months.  Seems that a lot of investment property is being dumped on the market..



It would seem EAs are have now shot themselves in the foot or perhpas more their "friends" / "clients". Since a lot manage properties for big specu-land-vestors, hundreds in some cases. 

*Agents telling friends to sell*

[broken link removed]


----------



## StoppedClock

gearoidmm said:


> Talking about job losses in Dublin at the moment as a leading indicator for future house price falls is irrelevant. We have effectively full employment and unemployment is not anywhere near being a factor yet (which is not to say that it will not in the future).


 
Probably drfiting off topic here better suited to _Clouds Ahead_ but... I do think mounting job losses in manufacturing will keep the topic of our one dimensional economy in the spotlight which will IMO have a knock on effect on sentiment


----------



## treora

Savvy said:


> €220k [broken link removed]
> €185k
> €180k [broken link removed]
> €175k http://www.daft.ie/searchsale.daft?id=150290
> 
> Not only a nominal drop, but they have also invested in it (the garage was finished off). So at least an extra €5k invest in that period.


----------



## Open_Window

JayDub said:


> According to the Daft house price index, the slowdown/slump started sometime in April/May 06, I don't remember anybody even mentioning stamp duty changes in the next budget at this time. As far as I recall, it wasn't until late September that Michael McDowell brought up the subject of stamp duty.
> 
> [broken link removed]



I spotted that a good few posts ago  

Is a point worth repeating though !!!  I feel it will be forgottne as the next excuse comes in line. Remember people aren't thinking rationally.

I believe DAFT may come out of this as a force to be recokned even more than it is now. Its the most real guide for the market to find sentiment and to be honest will become more crucial. THey should change there facility so prices are recorded by their system, that once an address in logged it may be trackerd essentially forever! 

Address don't change, but price do, so once it logged on the system it should stay there that is powerful! No need for google cache anymore.

Its pan agent powerful independent source.  Surely it is having a huge impact on market sentiment, as is this thread.


----------



## gearoidmm

http://www.finfacts.com/irelandbusinessnews/publish/article_10007701.shtml

Interview with John Hurley (central bank head) suggesting that there will be no fall in Irish house prices.  Although he cautions that infrastructural spending cannot take up the slack for a large drop in private sector construction because the drop in tax revenue would mean that it would not be possible to up spending without breaking the terms of the stability and growth pact.

Hadn't thought of that.


----------



## treora

NIB's "Loan to Value (LTV) is the amount of your mortgage relative to the value of your house - and we have linked our pricing to your LTV.   Our unique tiered pricing model offers margins ranging from 0.50% to 0.59% over ECB depending on your LTV - up to a maximum of 80% LTV. "

That sounds nice, but what happens to that Mullingar million euro house devalues to 650,000 by mid-2008.  Negative equity and increasing rates above and beyond the competition.  Is anyone thinking  of a USA style mortgage starting with 'Amor...'.  No, no, I can't say that they don't exist here.


----------



## treora

Open_Window said:


> Address don't change, but price do,.



Unless I can afford to pay someone to change my postal code....  Oh lovely new postal codes may throw confusion or clarity into this circus.


----------



## JayDub

gearoidmm said:


> Talking about job losses in Dublin at the moment as a leading indicator for future house price falls is irrelevant. We have effectively full employment and unemployment is not anywhere near being a factor yet (which is not to say that it will not in the future).


I disagree. Those 450 jobs are unionized jobs and pay above average wages. Those blue collar workers will find it hard to find similar paying jobs, especially when there is an abundance of non national workers willing to work for minimum wage. The biggest growing sectors in Ireland are banking and construction. I can't see a 40 year old woman whose only experience is packing Fruit and Nut bars, joining those sectors. 450 jobs redundancies announced today, how many thousands more will be announced over the coming months. Dell and Intel spring to mind.


----------



## fatmanknows

gearoidmm said:


> http://www.finfacts.com/irelandbusinessnews/publish/article_10007701.shtml
> 
> Interview with John Hurley (central bank head) suggesting that there will be no fall in Irish house prices.............................
> 
> Hadn't thought of that.


 
Mr Hurley is talking out of his rear. The cracks are appearing all over the place. The descent is only just beginning (imo). The auctions last year and earlier have had more sales in one day than the total for the season since starting up again last month. There are For Sale signs Galore everywhere. Big Red bricks are going direct to Private Sale - fearful of been humbled in the auction room -  Practically everyone you meet is calling it over. Recent interest rises have yet to kick in, more coming down the road.  The game is up. Only a few fools left looking to buy at the mo.


----------



## Purple

Has anyone read all 6561 (now 6562) posts on this thread? 
If so what did they do with their time before?
Yer all mad, mad I say...
The answer is; no one knows what will happen. That's it!


----------



## Marie

thewatcher said:


> Bingo
> 
> *Irish house prices up 270% since 1996 *
> 
> http://www.finfacts.com/irelandbusinessnews/publish/article_10006275.shtml
> 
> http://www.unison.ie/irish_independent/stories.php3?ca=9&si=1574591&issue_id=13766


 
"More than 17 per cent of the private non-farm workforce are in construction. The total rises to 20 percent when jobs in services related to construction are added. The corresponding proportions for the UK and US are 7 per cent and 5.4 per cent respectively. 
 
There are more than 250,000 directly employed in the Irish construction sector. When an estimated 80,000 in financial and business service jobs that are dependent on the construction sector are added to direct employment, we get a total of 330,000 - just short of 20% of the private workforce according to Central Statistics Office (CSO) figures. .............".

Eminently relevant to what happens next!


----------



## liteweight

> Mr Hurley is talking out of his rear. The cracks are appearing all over the place.



He's developing a buider's bum???


----------



## zac

Purple said:


> Has anyone read all 6561 (now 6562) posts on this thread?
> If so what did they do with their time before?
> Yer all mad, mad I say...
> The answer is; no one knows what will happen. That's it!



finally someone with a little sense on this forum. purple now you better run.


----------



## beattie

Purple said:


> Has anyone read all 6561 (now 6562) posts on this thread?
> If so what did they do with their time before?
> Yer all mad, mad I say...
> The answer is; no one knows what will happen. That's it!


 
Maybe your right, do you think that sentiment has changed? I know some bulls at work/friends who now think it will level off which is certainly a change in their sentiment and some of them have bought investment properties.


----------



## StoppedClock

gearoidmm said:


> http://www.finfacts.com/irelandbusinessnews/publish/article_10007701.shtml
> 
> Interview with John Hurley (central bank head) suggesting that there will be no fall in Irish house prices. Although he cautions that infrastructural spending cannot take up the slack for a large drop in private sector construction because the drop in tax revenue would mean that it would not be possible to up spending without breaking the terms of the stability and growth pact.
> 
> Hadn't thought of that.


 
test


----------



## Marie

liteweight said:


> He's developing a buider's bum???


 
_Alltogether now, to the tune of "Where will the Baby's Dimple Be?"_

_Bidder's bum or builder's crack_
_Seems to me it will be a sin_
_If it's always covered by a safety-pin_
_Where will the [boom/bust/increase/collapse] be  _


----------



## gearoidmm

Purple said:


> Has anyone read all 6561 (now 6562) posts on this thread?
> If so what did they do with their time before?
> Yer all mad, mad I say...
> The answer is; no one knows what will happen. That's it!



God, if we took that attitude, we'd never talk about anything.  Of course we don't really know what's going to happen, it's all opinion.  If you had told anyone that the average Dublin house would be worth 400k 10 years ago, you'd have been chucked into Portrane.  Equally, I think that the bears on this thread are using it to take out their frustrations about the fact that they are being laughed at for saying that prices will fall.

That said, I have read most of the posts and I feel a little sheepish admitting it.  And the whole thing has gotten a little repetitive recently


----------



## StoppedClock

Purple said:


> Has anyone read all 6561 (now 6562) posts on this thread?
> If so what did they do with their time before?
> Yer all mad, mad I say...
> The answer is; no one knows what will happen. That's it!


 
I have... but given reading posts is much quicker than writing them and you have made 10 times as many posts as I have who is the bigger time waster?


----------



## Calina

I have been reading this thread since it started (and it seems like ages ago now). And yes, I would agree, there are a certain number of recurring themes. What has changed quite a bit over the life of the thread is that the contributing personalities are quite different to who was here at the start, and additionally, who populated prior threads on the future direction of the Irish property market. I find that somewhat revealing.


----------



## bo se

Marie said:


> "More than 17 per cent of the private non-farm workforce are in construction. The total rises to 20 percent when jobs in services related to construction are added. The corresponding proportions for the UK and US are 7 per cent and 5.4 per cent respectively.
> 
> There are more than 250,000 directly employed in the Irish construction sector. When an estimated 80,000 in financial and business service jobs that are dependent on the construction sector are added to direct employment, we get a total of 330,000 - just short of 20% of the private workforce according to Central Statistics Office (CSO) figures. .............".
> 
> Eminently relevant to what happens next!


 
Such comparisons are often made by Irish property bears (including some high profile and presumably highly paid pundits) who rarely make the link to demographics. For example it is estimated that the Irish population grew by 2.5% in year to April 2006; while the EU population has been growing at about 0.25% per annum in recent years according to a recent analyis by NCB. So at least in year to April (during which growth was admiteedly a little faster than in preceeeding years) Irish population grew at 10 times recent trend growth for Europe. Why then is it surprising, or inappropriate that a higher proportion of our workforce is involved in building homes. And if you consider our infrastructure deficit surely we need to employ more resources than our neighbourrs in building roads etc? 

Similar arguments are often made w.r.t. credit growth again without consideration of demographics.


----------



## beattie

bo se said:


> Why then is it surprising, or inappropriate that a higher proportion of our workforce is involved in building homes.


 
As has been pointed out ad nausem by many posters before there are 275k empty houses in the country, do we really need to build ~100k units per year. Agree with your point that we have to improve our road infrastructure but most of the motorway work will be finished by 2010.


----------



## walk2dewater

Purple said:


> Has anyone read all 6561 (now 6562) posts on this thread?
> If so what did they do with their time before?
> Yer all mad, mad I say...
> The answer is; no one knows what will happen. That's it!


 
Purple, I like your byline-->  yes life is "90%" how you react to what happens.  That's why I'm spending almost all my investing research energy in two areas:
1. shorting candidates among Irish property relates shares
2. long additions to my pharma/health/biotech holdings

For entertainment (sad!) I pop over here occasionally (ok daily).  In my mind the "bubble" debate is over, but theres something about this thread....


----------



## redo

*Sentiment roll call*


redo said:


> Name : REDO
> Age   : 34
> Marital Status : MARRIED
> Owner / Renter  : OWNER
> Advice : Investors sell, Trade upers buy, FTB hold


Age : 34 (35  tommorow)
 Marital Status : MARRIED
Owner / Renter  : OWNER
Advice : Investors sell, Trade upers buy, FTB hold


----------



## MandaC

As someone who has been trying to sell in Lucan since August, I finally got a sale agreed last week (fingers crossed it will go through)

I got €16k less than next door to me got at Easter, which meant I could not buy what I initially put my deposit on, but decided to take the money and run, all the same and will do if I get it. I am trying to get the skids put under my buyer (an investor) to sign up.

Since last week even, property prices in the Estate seemed to have dropped by another €10K (which means if I loose this sale, I could be down up to €26k on what sold since Easter) or wont be able to sell at all.

People are panicing in the area and once one drops to go (as two have done this week), they all will. €26K on a house in the €350-€360K bracket is a lot of money. Especially when I am trying to buy somewhere else that has not taken such a hit. 

I have spoken to 2 EA's in the area this week(one my own who sold for me and another Lucan based EA who showed me a property in Kildare that I am considering buying). Both said the market is an absolute disaster. One actually said there are certain areas which he would have to consider not taking on a property due to oversupply.

My sister has also been trying to sell in Clondalkin. She did not find it as difficult as me to sell, as hers was cheaper to begin with, but still had a slight price drop, nearer to €5k on sales prices in Spring.

I understand Clonee is also suffering the same fate as Lucan at the moment. In some ways the areas are quite similar.

I am hoping to trade up, not necessarily to a bigger house, but just to a nicer area. Will not buy in an area with so many houses again.

I know there were a few people on the boards looking to sell out of Lucan? Anyone else had any success?


----------



## Abbeykiller

bo se, I don't buy the demographics argument. The reason the population is bulging at the moment is that a booming construction sector is feeding itself. When the construction sector slow down takes hold, these lads will all head to London to the Kings Cross channel tunnel & East End Olympic projects. The immigrants that continue to pour in to this country will be 10 to a 2 bed flat cheap labour who can't sustain our ridiculous property prices.
It's all about the fundamentals - average house price against the affordability of the average worker. This will return to its 'natural' level and well done to all those who made a buck from the boom but like all parties, it can't last.


----------



## Sidewinder

Abbeykiller said:


> When the construction sector slow down takes hold, these lads will all head to London to the Kings Cross channel tunnel & East End Olympic projects. *The immigrants that continue to pour in* to this country will be 10 to a 2 bed flat cheap labour who can't sustain our ridiculous property prices.



Not a chance. The global economic migrant grapevine is one of the fastest-reacting "markets" there is. The minute our economy starts to go belly-up, the Poles and Latvians etc. will a) immediately stop arriving on these shores and b) half the ones already here will be planning their exit strategies.

You'll see immigration suddenly reversing into emigration again within a few months, not a continued flow of immigration into a dying economy.


----------



## bearishbull

Extract from Irish Times today.

_It's amusing , this rush to sell by the owners of second-hand houses. Given the market is overloaded, some sellers are having to drop their prices, to achieve a sale. Of course, they may not reveal the discount to their neighbours, thereby perpetuating the fiction that higher prices are being achieved._

_The neighbours are not fooled, but are in denial, because they are in a panic. The result, as one estate put it to me this week, is a wholesale rush to dispose of second-hand houses, in spite of a glut on the market. It's hard, too, to have sympathy for the laggards who are making fools of themselves by rushing to sell when the market has peaked._

_Now, it's probably too late to realise the massive profits of recent years. It was put to me graphically by one estate agent: "In the past three months, I sold three identical houses in the same street. The prices were - €1.5m, €1.4.m, €1.1m - in that declining order per month. The market peaked in June and had been in decline since - but sellers have panicked. There's no telling them to wait."_


----------



## room305

bearishbull said:


> _The market peaked in June and had been in decline since - but sellers have panicked. There's no telling them to wait."_



As they rushed to buy in a panic, why would they not do likewise when it comes to selling up? This exposes the myth of the carefully managed soft landing.


----------



## beattie

bearishbull said:


> _ The market peaked in June and had been in decline since - but sellers have panicked. There's no telling them to wait."_


 

Have to admit I didn't think the market (and sentiment ) would turn so quickly though a market built solely on sentiment was always susceptible I suppose


----------



## Debtwish

bearishbull said:


> Extract from Irish Times today.
> 
> _It's amusing , this rush to sell by the owners of second-hand houses. Given the market is overloaded, some sellers are having to drop their prices, to achieve a sale. Of course, they may not reveal the discount to their neighbours, thereby perpetuating the fiction that higher prices are being achieved._
> 
> _The neighbours are not fooled, but are in denial, because they are in a panic. The result, as one estate put it to me this week, is a wholesale rush to dispose of second-hand houses, in spite of a glut on the market. It's hard, too, to have sympathy for the laggards who are making fools of themselves by rushing to sell when the market has peaked._
> 
> _Now, it's probably too late to realise the massive profits of recent years. It was put to me graphically by one estate agent: "In the past three months, I sold three identical houses in the same street. The prices were - €1.5m, €1.4.m, €1.1m - in that declining order per month. The market peaked in June and had been in decline since - but sellers have panicked. There's no telling them to wait."_


 
That is dynamite - one to cut out and keep for the scrap book. The tide is turning now but the speed has certainly taken me by surprise.


----------



## StoppedClock

bearishbull said:


> Extract from Irish Times today.
> 
> _It's amusing , this rush to sell by the owners of second-hand houses. Given the market is overloaded, some sellers are having to drop their prices, to achieve a sale. Of course, they may not reveal the discount to their neighbours, thereby perpetuating the fiction that higher prices are being achieved._
> 
> _The neighbours are not fooled, but are in denial, because they are in a panic. The result, as one estate put it to me this week, is a wholesale rush to dispose of second-hand houses, in spite of a glut on the market. It's hard, too, to have sympathy for the laggards who are making fools of themselves by rushing to sell when the market has peaked._
> 
> _Now, it's probably too late to realise the massive profits of recent years. It was put to me graphically by one estate agent: "In the past three months, I sold three identical houses in the same street. The prices were - €1.5m, €1.4.m, €1.1m - in that declining order per month. The market peaked in June and had been in decline since - but sellers have panicked. There's no telling them to wait."_


 

Any link to this?

PS Get some sleep


----------



## plaudit

This article in the independent this morning indicates immigration is slowing down and growth in the construction sector is finished.


----------



## Duplex

_



The market peaked in June and had been in decline since - but sellers have panicked. There's no telling them to wait."

Click to expand...

_ 
Wait for what?


----------



## plaudit

bearishbull said:


> _ The prices were - €1.5m, €1.4.m, €1.1m - in that declining order per month._


 
€1.5m to €1.1m, thats a drop of almost 40%


----------



## Duplex

plaudit said:


> €1.5m to €1.1m, thats a drop of almost 40%


 
But not surprising given that rental yields on these places were 2% or less; the fundamentals didn't support the valuations.  As a poster on this thread so aptly put it these properties were 'instruments of capital appreciation' and when prices stop going up they fail in that role.


----------



## redo

conor_mc said:


> In a speculative bubble, supply isn't so much the issue, over-demand is. As in demand for instruments of capital appreciation, not demand for homes.
> 
> If undersupply was the issue, then house price growth wouldn't be speculative  by definition.... it'd be a genuine price rise due to lack of supply (think 1996-2001).
> 
> Even if we were perfectly supplied for genuine home occupation, demand for speculative instruments of capital appreciation warps the supply/demand curve. Remove that element of demand (i.e. lack of further cap. apprec.) and in theory you get a return to fundamental values.... not accounting for sentiment/herd mentality.
> 
> Incidentally, I think we are oversupplied. We'll see what shakes out of the tree once capital appreciation begins to disappear.


Post of the thread


----------



## Afuera

bearishbull said:


> Extract from Irish Times today.
> 
> _It's amusing , this rush to sell by the owners of second-hand houses. Given the market is overloaded, some sellers are having to drop their prices, to achieve a sale. Of course, they may not reveal the discount to their neighbours, thereby perpetuating the fiction that higher prices are being achieved._
> 
> _The neighbours are not fooled, but are in denial, because they are in a panic. The result, as one estate put it to me this week, is a wholesale rush to dispose of second-hand houses, in spite of a glut on the market. It's hard, too, to have sympathy for the laggards who are making fools of themselves by rushing to sell when the market has peaked._
> 
> _Now, it's probably too late to realise the massive profits of recent years. It was put to me graphically by one estate agent: "In the past three months, I sold three identical houses in the same street. The prices were - €1.5m, €1.4.m, €1.1m - in that declining order per month. The market peaked in June and had been in decline since - but sellers have panicked. There's no telling them to wait."_



This is going to be hugely damaging to sentiment. The Irish Times is the most respected broadsheet in Ireland; this will not go unnoticed. I think we can expect another report or press release very soon by vested interests in the property market for damage control on this.

I wonder will anyone be able to get an interview with BoI's economist [FONT=Verdana, Arial, Helvetica, sans-serif]Dan McLaughlin to see if this article ties in with his vision of a "soft landing"?[/FONT]


----------



## conor_mc

Duplex said:


> But not surprising given that rental yields on these places were 2% or less; the fundamentals didn't support the valuations. As a poster on this thread so aptly put it these properties were 'instruments of capital appreciation' and when prices stop going up they fail in that role.


 
Why thank you Duplex, I do believe that phrase was first coined by myself.


----------



## conor_mc

redo said:


> Post of the thread


 
Cor blimey, high praise indeed redo! I'm on a roll this morning!!


----------



## partisan

plaudit said:


> €1.5m to €1.1m, thats a drop of almost 40%



em.. just over 26%... still big though..


----------



## Remix

A lot of people were trying to make money while the party lasted - knowing that it couldn't last - but still thinking the bubble had enough momentum to carry them along.

The "I-could-be-Paddy-Last" fear lurking in the back of their minds now moves to the fore and the rush to the exit begins. 

The problem now, of course, is that the exit has become very narrow !


----------



## conor_mc

partisan said:


> em.. just over 26%... still big though..


 
It'd be a _rise_ of almost 40% going the other way.... maybe Irish people have forgotten how to calculate percentage falls...!!!  

(Sorry plaudit, just kidding!)


----------



## plaudit

partisan said:


> em.. just over 26%... still big though..


 
1.1*1.26=1.386


----------



## fatmanknows

Remix said:


> A lot of people were trying to make money while the party lasted - knowing that it couldn't last - but still thinking the bubble had enough momentum to carry them along.
> 
> The "I-could-be-Paddy-Last" fear lurking in the back of their minds now moves to the fore and the rush to the exit begins.
> 
> The problem now, of course, is that the exit has become very narrow !


 
Have you ever tried to get out through the letterbox ? I have, and can vouch that it really hurts.


----------



## plaudit

conor_mc said:


> It'd be a _rise_ of almost 40% going the other way.... maybe Irish people have forgotten how to calculate percentage falls...!!!
> 
> (Sorry plaudit, just kidding!)


 
It seems we have


----------



## Del3D

Link to that Irish Times Article this morning (subscription required):
[broken link removed]


----------



## whathome

Del3D said:


> Link to that Irish Times Article this morning (subscription required):
> [broken link removed]


 
No subscription required for that article - thanks for the link


----------



## robd

plaudit said:


> 1.1*1.26=1.386



It's a drop so its based on the orig price not the price it is now.

(1.5-1.1)/1.5 = 26.67%


----------



## sam78

MandaC said:


> I have spoken to 2 EA's in the area this week(one my own who sold for me and another Lucan based EA who showed me a property in Kildare that I am considering buying). Both said the market is an absolute disaster. One actually said there are certain areas which he would have to consider not taking on a property due to oversupply.
> 
> 
> I am hoping to trade up, not necessarily to a bigger house, but just to a nicer area. Will not buy in an area with so many houses again.


 
Have selectively quoted here but I know you were looking for advice on an estate in Celbridge which I replied to, just to advise that we sold in Celbridge in May and there the market has really slowed in the few months since then. Still keeping an eye on it more so out of curiosity but houses in our old estate that had more land and were bigger (eg sunroom or conservatory etc) have only made 5-10k more than what we sold for only 6 months later although no price drops that I've noticed as of yet but get the feeling as there's a huge supply suddently that they arent far off.


----------



## Debtwish

One of our favourite blogs gets also gets mention in today's IT.  

[broken link removed]



> Just to show that your agent's suggestion of lowering the price is not an unusual one, log on to [broken link removed], a new blog that has appeared this month in cyberspace. The blogger is detailing a list of houses that have fallen in price in recent years and it makes quite a fascinating read.


 
EDIT: although I've just noticed that they got the link wrong.  
It should be: http://irishhousepricesfalling.blogspot.com/


----------



## Howitzer

plaudit said:


> €1.5m to €1.1m, thats a drop of almost 40%


 
27%


----------



## JayDub

partisan said:


> em.. just over 26%... still big though..


 
It doesn't really matter, it will be 40% in a couple of weeks LOL


----------



## whizzbang

JayDub said:


> It doesn't really matter, it will be 40% in a couple of weeks LOL



perhaps it should be called a "40% unrise", if it is 40% rise on the way up there should be a way of reflecting the same percentage for an equal change in value on the way down! 

If you say "My property went up 40% then dropped 27%" I think most of them will think you are still 13% up .


----------



## plaudit

We'll all be experts on % falls soon enough. 

In 2001 our white knight was Eastern European immigration, I can't see a white knight this time.


----------



## room305

whizzbang said:


> If you say "My property went up 40% then dropped 27%" I think most of them will think you are still 13% up .



I think (or would hope that) most people grasp that if your house increased in value by 100% and then decreased by 50%, or doubled and then halved in value, you are pretty much back to where you started.


----------



## Remix

Sentiment seems to be changing very quickly from


"The longer you wait to buy - the more you'll pay"

to 

"The longer you wait to sell - the less you'll get"


----------



## whizzbang

room305 said:


> I think (or would hope that) most people grasp that if your house increased in value by 100% and then decreased by 50%, or doubled and then halved in value, you are pretty much back to where you started.



I think you might be giving the majority of people's maths skills too much credit! They see two different percentages, they think they represent two different numerical values.

Marketeers have been making use of this rule of thumb for years!


----------



## phoenix_n

plaudit said:


> €1.5m to €1.1m, thats a drop of almost 40%


 
Not quite 40% but getting close to my prediction a month or so ago.


----------



## poormouth

Definition of Blowoff taken  from  

"A term in technical analysis that refers to a sharp price increase that comes after a long period of price appreciation, and is followed by a fall in the price. A blowoff is seen as a rally's last breath and is a highly bearish sign. Notes:
This large and dramatic price movement is generally seen at the peak of a market or stock. The idea behind the bearishness of a blowoff is that it signals the activity of the most irrational and overly exuberant market participants, who, wanting to take part in the rally, momentarily push up the already-overvalued stock."

Is it possible that we saw the blowoff in the Irish housing market early in 2006 or is it too early to say yet?


----------



## conor_mc

poormouth said:


> Is it possible that we saw the blowoff in the Irish housing market early in 2006 or is it too early to say yet?


 
Too early to say for certain.

My fear is that the government could yet do something stupid that extends the bubble, thereby enhancing the pain of undoing it.


----------



## MadPad

whizzbang said:


> I think you might be giving the majority of people's maths skills too much credit! They see two different percentages, they think they represent two different numerical values.
> 
> Marketeers have been making use of this rule of thumb for years!


good post...
very important but basic point when looking at % swings....

if a house starts at say 100000 and rises by X% for a few years only to drop in value by X% again, you are back worse than you started, the amount of difference depends on the X%....

10% rises to 110000 falls to 99,000 a net fall of 1%
20% rises to 120000 falls to 96,000 a net fall of 4%
30% rises to 130000 falls to 91,000 a net fall of 9%
40% rises to 140000 falls to 84,000 a net fall of 16%
50% rises to 150000 falls to 75,000 a net fall of 25%
...

im not saying that because prices have increased by whatever % in the last couple of years, they will fall by that amount, just that the % fall is always more money than the % increase and its natural when the figures are used in the same sentence to assume they mean the same amount....


----------



## comanche

conor_mc said:


> Too early to say for certain.
> 
> My fear is that the government could yet do something stupid that extends the bubble, thereby enhancing the pain of undoing it.


 
They more than likely will - what if the reduce income tax but leave stamp duty in place (they have said that they will leave stamp duty in place anyway). This would increase people's affordibility again - negating interest rate rise, boost the marget again and they will get the revenue lost on income tax back in stamp duty. Very simplified I know, but I wouldn't be surprised if they do something like that, it is going to be a give away budget after all!


----------



## plaudit

conor_mc said:


> My fear is that the government could yet do something stupid that extends the bubble, thereby enhancing the pain of undoing it.


 
I'd say the government want to get over the finishing line that is the election next year, they may focus on cutting taxes and other incentives in the budget without realising the severity of the reverse in the housing market.


----------



## StoppedClock

comanche said:


> They more than likely will - what if the reduce income tax but leave stamp duty in place (they have said that they will leave stamp duty in place anyway). This would increase people's affordibility again - negating interest rate rise, boost the marget again and they will get the revenue lost on income tax back in stamp duty. Very simplified I know, but I wouldn't be surprised if they do something like that, it is going to be a give away budget after all!


 
I think this might be a real possibility but do people think that once the "prices only go up" spell is broken by all the bearish reports (and evidnce on the ground) that they can put the genie back in the bottle?


----------



## Abbeykiller

> plaudit We'll all be experts on % falls soon enough.
> 
> In 2001 our white knight was Eastern European immigration, I can't see a white knight this time.


 

Government still has the stamp duty ace to play ...will only need to be used to prop up a plummeting housing market BEFORE the election. If the market stays relatively stable until after the election then it can swing in the wind ....


----------



## howstrange

A couple of more price drops. Scroll down to the 3 bed category. 

18 Bow Bridge, Kilmainham €525 to €475. €50K Drop!

206 The Tramyard, Inchicore €400 to €385

Old Prices:


New Prices:
[broken link removed]


----------



## howstrange

Abbeykiller said:


> Government still has the stamp duty ace to play ...will only need to be used to prop up a plummeting housing market BEFORE the election. If the market stays relatively stable until after the election then it can swing in the wind ....



A giveaway budget would nearly dig their own grave!! They may get back in government because of it but they will be in there to clean up their own mess!!


----------



## MadPad

conor_mc said:


> Too early to say for certain.
> 
> My fear is that the government could yet do something stupid that extends the bubble, thereby enhancing the pain of undoing it.


 
If history is anything to go by, its a certainty that they are trying to come up with a way to extend it... very difficult to see what else they can do they havent already been doing, Section 23, Section 50 etc etc etc

Theres an election coming, and the temptation to meddle with the market must be immense. But the sheer scale of the numbers leaves it very difficult to do anything without committing billions. 

Even the stamp duty proposal from McDowell is very badly thought out... i guess he could become known as the guy whose first few weeks leading the PD's saw him bottle out on Bertie and cause a housing crash by giving a nod and a wink to people not to buy until at least before the budget. He's off to a great start...
If we are going to remove stamp duty, then some form of property tax is needed. like the old rates system, it would kill remaining investor appetite.

And anyways, how do you fix the problem without seriously affecting the "paddy lasts" who bought in the last few years? They have votes too...
Maybe the timing of this thing is just right, too late for this government to do anything and too early in the term of the next government to committ billions to it....


----------



## miju

MandaC said:


> As someone who has been trying to sell in Lucan since August, I finally got a sale agreed last week (fingers crossed it will go through)
> 
> I got €16k less than next door to me got at Easter, which meant I could not buy what I initially put my deposit on, but decided to take the money and run, all the same and will do if I get it. I am trying to get the skids put under my buyer (an investor) to sign up.


 
for all those out there syaing drop is asking prices does not equate to actual drop in sale price i proudly present anecdotal , exhibit a



Remix said:


> "The longer you wait to sell - the less you'll get"


 
throw the buyer sentiment that is currently gathering strength into the recipe of 

"the longer i wait to buy the more i could save"

add a dash of salt , allow to cool for a few months and you've a right little recipe for the end of the boom days for property


----------



## Open_Window

Holy Bubble POP Batman, I only go away for a few hours and now thoery & "IMO's" have turned into real "PANIC" and now the Irish times, finally someone in the main stream media is catching on, how long 3-4 months has it taken??

THat Landlords Life is outrageously pretentious & smug. There are other words to describe its rather crass approach but I might be banned from the froum and I wouldn't want that.

I am dearly trying to convinvce people who are in the process of buying to STOP!!! I can't convince them too. I would like to be proven wrong but I know its just not the case. I have never seen so much activity and turnaround in the 3 years I've been watching the property related forums.

THe DAFT report is going to be explosive and will just quicken the run for the door to a DASH!


----------



## Duplex

Time for me to dust down this hackneyed but oh so apposite quote once more. 


As famous economist John Kenneth Galbraith writes in his book "A Short History of Financial Euphoria":


> _"Those who had been riding the upward wave decide now is the time to get out. Those who thought the increase would be forever find their illusion destroyed abruptly, and they, also, respond to the newly revealed reality by selling or trying to sell. And thus the rule, supported by the experience of centuries: the speculative episode always ends not with a whimper but with a bang_."


----------



## MandaC

Thanks for posting my quotes re my house price dropping in Lucan!! Anyway, over the last week they appear to have taken another hit, so hopefully I got out in time(not signed off yet)

I have also noticed a distinct change in the attitude of Estate Agents when enquiring about properties to buy. Previously, you would not even get a call back, a friend in work FTB, was treated disgracefully by one of the bigger firms when trying to buy about 16 months ago. Would not take bids over the phone, did not call back, basically sod off, too many buyers too little properties kind of attitude

I have been phoning up about a number of properties to buy and am finding it a totally different scenario at the moment. All the EA's are becoming very attentive - I have been bombarded with calls since registering with one - so perhaps I might make up my €16K at this end. 

I have noticed new builds seem to be holding steady (well where I am looking anyway)- however I was reading a thread on Adamstown whereby the new Phase launched last week seemed to be cheaper than the first phase for some properties. I think places like Adamstown will take a serious hit.


----------



## Bedsit

[broken link removed](Irish Examiner)


----------



## Duplex

Bedsit said:


> [broken link removed](Irish Examiner)


 
Some of these places have pretty sobering vacancy rates.


----------



## whathome

MandaC said:


> I have noticed new builds seem to be holding steady (well where I am looking anyway)- however I was reading a thread on Adamstown whereby the new Phase launched last week seemed to be cheaper than the first phase for some properties. I think places like Adamstown will take a serious hit.


 
I also heard that recent buyers in Adamstown were shocked to hear that there are a number of halting sites planned for the development.  They were upset because the halting site info didn't appear in the brochure and the agent never told them!!!

The agent probably didn't tell them about falling asking prices in Lucan either.


----------



## Gwynston

MadPad said:


> If history is anything to go by, its a certainty that they are trying to come up with a way to extend [the bubble]


Is everyone so sure the government want to try to do something to extend the property boom?

Are they even aware that that a slowdown is happening?
If so, do they care? Sure, it's just the "correction" before the "soft landing" leading to "more sustainable, modest growth ongoing". It will all sort itself out...

On the other hand, iff they actually have the balls to admit the existence of a bubble, would they be stupid enough to actually do something to sustain it?
Surely a plan to handle the deflation would be better than trying to prop up ailing prices?
In whose interest is it to keep it going - are there really that many property bull voters that they need to keep "sweet"?

So many questions.....
Up to now, I haven't seen any good reason that the government should do something drastic in the budget to keep house prices rising. All McDowell's stampy duty suggestion was for was to help FTBs get on the ladder.


----------



## MadPad

Bedsit said:


> [broken link removed](Irish Examiner)


 
In the parts of the US I travel to, there are "retail parks" every few miles. with the usual shops, electronics, sports, fast food, furnishing, etc
Im always confused as to how these actually make money, most shops are open really long hours and seem to have as many staff as customers in there most times i visit, which is outside of work hours.. the mall's proper seem to be reasonably busy, if not busy by irish standards....

In ireland the trend is increasing but the shops are jammed no matter how many open... it seems we have an insatiable appetite for consumer goods.


----------



## conor_mc

Gwynston said:


> Is everyone so sure the government want to try to do something to extend the property boom?
> 
> Are they even aware that that a slowdown is happening?
> If so, do they care? Sure, it's just the "correction" before the "soft landing" leading to "more sustainable, modest growth ongoing". It will all sort itself out...
> 
> On the other hand, iff they actually have the balls to admit the existence of a bubble, would they be stupid enough to actually do something to sustain it?
> Surely a plan to handle the deflation would be better than trying to prop up ailing prices?
> In whose interest is it to keep it going - are there really that many property bull voters that they need to keep "sweet"?
> 
> So many questions.....
> Up to now, I haven't seen any good reason that the government should do something drastic in the budget to keep house prices rising. All McDowell's stampy duty suggestion was for was to help FTBs get on the ladder.


 
I'm not convinced they'd do anything _deliberately_ to prop up the bubble. I'm worried they'd do something _stupid_ that would result in a propping up of the bubble!

Seriously, they'd do anything for a soundbite, never mind the wider consequences for the country.


----------



## Borderlord

IMO I think the budget cant come soon enough for the vested interests as it looks like a lot of damage will be done between now and then judging by the article in today Irish Times as panic selling takes hold


----------



## Arthur Daley

StoppedClock said:


> I think this might be a real possibility but do people think that once the "prices only go up" spell is broken by all the bearish reports (and evidnce on the ground) that they can put the genie back in the bottle?


 
Yes I reckon that since 97/98 once there was a bit of momentum to falling prices (and the IT being on board a few months after buying myhome is a big turnaround) then the whole job jot could collapse. We've had falls in 2001, but they weren't enough to bring reality to the market. It could be like watching a chimney stack if the trends continue. Once she goes it gathers it's own momentum just like it did on the way up.


----------



## edo

> Quote:
> Originally Posted by *Bedsit*
> _[broken link removed](Irish Examiner)_
> 
> 
> Some of these places have pretty sobering vacancy rates.



Too Right - Just outside Carlow Town - on the Dublin Road - There is a new "Technology Park" being built - the only tenants so far as I can see on the occasions I pass thru - I stand to be corrected on this - Room305? - are interior decor retail outlets and the like and I think a another building that the Gov paid over 3 times the going rate for a year or 2 ago as part of the Decentralisation fiasco and as yet has anybody moved in ?

 - High technology me This post will be deleted if not edited to remove bad language - well maybe the beds and sofas on sale might be - but it is hardly the organic small tech companies that the planners had in mind! - 

now if the DIY and Retail sector goes south - what will be left on these sites , which are dotted in the most bizarre locations around the country - I can see a late 70's early 80's moonscape appearing again of vacant units and roads and utilities half built and abandoned going nowhere


----------



## MadPad

Gwynston said:


> Is everyone so sure the government want to try to do something to extend the property boom?
> ....
> Are they even aware that that a slowdown is happening?
> If so, do they care? Sure, it's just the "correction" before the "soft landing" leading to "more sustainable, modest growth ongoing". It will all sort itself out...
> ....


 
agree with almost everything you say ....

I think they must be well aware of a slowdown. after all they are in regular contact with the great & the good who peddle these developments. Before the .com bust, there were warning signs such as a reduction in freight movement that analysts picked up on, admittedly too late to change anything, but some called it right.. it showed that growth in the new economy wasn't all it was supposed to be... Wonder is theres anything similar for house building, cement orders/whatever.


As for McDowell's & stampy duty. he is either a genuis who is trying to defalte the bubble all on his own or an idiot whose mouth engages before his brain.


----------



## MandaC

Thats true about the halting sites in Adamstown.  People who have bought in the first phase (the castle) are trying to justify that the falling prices in the Paddocks by saying that the castle are better finished, less density, etc.

Its very difficult to get people to accept that there is a drop in the market at all.  I only know because I have seen it first hand.  Its more evident in the places like Lucan, Clonee, etc because there are too many sprawling souless housing estates where there are a glut of 3 beds of all types - too expensive for FTB but with no trade up potential.  That was certainly the experience with mine.  

I am hoping to buy somewhere nice and small for myself and to hell with the property market after that- I was going to stretch myself to a mortgage of €230+, but given the situation with interest rates etc, and the general economy, I am going to try to limit that to €170 max (maybe even less if I can) and have a life too!


----------



## StoppedClock

MadPad said:


> In the parts of the US I travel to, there are "retail parks" every few miles. with the usual shops, electronics, sports, fast food, furnishing, etc
> Im always confused as to how these actually make money, most shops are open really long hours and seem to have as many staff as customers in there most times i visit, which is outside of work hours.. the mall's proper seem to be reasonably busy, if not busy by irish standards....
> 
> In ireland the trend is increasing but the shops are jammed no matter how many open... it seems we have an insatiable appetite for consumer goods.


 
From what I hear in Dundrum there are plenty of people swarming around the shops but not doing much buying.  As retail leases come to an end they are not being renewed by the tennents (smoothie bar and fast food joints aside).  The anchor tennents (HOF and HN) don't pay rent just % of profit.  Given that no one has ever bought anything in HOF full price (everything always reduced) I'd say their profits are slim.  So far the "Fashion Street" which originally was to have  Gucci, Prada, Bvlgari  & Chanel shops (as opposed to departments in a larger store) is totally empty although I have heard rumors that Fred's Fasion maybe lured there from under the Luas bridge at the crossroads at Taney Road  .

The final nail in the coffin is that car parking prices were slashed and then a 3 hours for 1 rate was brought in, even with that they are only at 60% capacity.


----------



## StoppedClock

MadPad said:


> As for McDowell's & stampy duty. he is either a genuis who is trying to defalte the bubble all on his own or an idiot whose mouth engages before his brain.


 
I think he might be both.


----------



## room305

edo said:


> Too Right - Just outside Carlow Town - on the Dublin Road - There is a new "Technology Park" being built - the only tenants so far as I can see on the occasions I pass thru - I stand to be corrected on this - Room305? - are interior decor retail outlets and the like and I think a another building that the Gov paid over 3 times the going rate for a year or 2 ago as part of the Decentralisation fiasco and as yet has anybody moved in ?



Decentralisation seems to be on schedule for Carlow. They have a site, building is going ahead and staff will be moved to temporary offices prior to completion.

As for the "Business & Technology Park" - there is absolutely nothing. Not a single company. On the opposite side of the road there is a large furniture place but the park has nothing. To compound the folly, the Institute of Technology has built an incubation unit that was supposed to feed smaller companies into the larger companies located in this park. The County Enterprise Board has built a similar unit which has a few small companies as far as I know. Lots of offices but very few companies.

Maybe the redundancy money from a rash of layoffs in Braun, Lapple and the Sugar Factory will prompt some entrepreneurship among the general populace ...


----------



## phoenix_n

Was watching this one....must have gone sale agreed but back on market

Was 480 now [broken link removed]

Whilst i had predicted the crash will be in the publics mind by xmas i am beginning to think that this thread has brought the knowledge into the public domain much sooner.

The irish property boom, ladies and gentlemen, is over.


----------



## MadPad

StoppedClock said:


> I think he might be both.


Considering his properties in Roscommon and Dublin, thats very noble of him


----------



## comanche

Gwynston said:


> Is everyone so sure the government want to try to do something to extend the property boom?
> 
> Are they even aware that that a slowdown is happening?
> If so, do they care? Sure, it's just the "correction" before the "soft landing" leading to "more sustainable, modest growth ongoing". It will all sort itself out...
> 
> On the other hand, iff they actually have the balls to admit the existence of a bubble, would they be stupid enough to actually do something to sustain it?
> Surely a plan to handle the deflation would be better than trying to prop up ailing prices?
> In whose interest is it to keep it going - are there really that many property bull voters that they need to keep "sweet"?
> 
> So many questions.....
> Up to now, I haven't seen any good reason that the government should do something drastic in the budget to keep house prices rising. All McDowell's stampy duty suggestion was for was to help FTBs get on the ladder.


 
They may not do it directly - but indirectly by putting more money into people's pockets. Cancels out the effects of rising interest rates..

Don't think they would dare remove stamp duty at the moment
1. It would annoy to many people who have bought in the last few years
2. It would seriously upset the coffers.

They may do something about it if the market heads south coz it may stimulate the market mean that people who bought in the past will be happy if it stops a markets falling.... IF

Who knows - speculation only. I wonder how the coffers have been effected by a stalled market from july onwards!?


----------



## StoppedClock

room305 said:


> As for the "Business & Technology Park" - there is absolutely nothing. Not a single company. On the opposite side of the road there is a large furniture place but the park has nothing. To compound the folly, the Institute of Technology has built an incubation unit that was supposed to feed smaller companies into the larger companies located in this park. The County Enterprise Board has built a similar unit which has a few small companies as far as I know. Lots of offices but very few companies.


 
We shouldn't be too hard on Carlow for at least trying to engender some entrepreneurship, the fault lies with the population with our _why would anyone be arsed to work to make money these days, property is yer only man _attitude.



> Maybe the redundancy money from a rash of layoffs in Braun, Lapple and the Sugar Factory will prompt some entrepreneurship among the general populace ...


 
This might very well prove to be true, perhaps they could refit some of the new warehousing into funky New York style apartments?


----------



## Purple

StoppedClock said:


> I have... but given reading posts is much quicker than writing them and you have made 10 times as many posts as I have who is the bigger time waster?


Touché


----------



## room305

comanche said:


> They may not do it directly - but indirectly by putting more money into people's pockets. Cancels out the effects of rising interest rates..



No doubt this will be accepted gratefully by all but I doubt it will reflate the housing bubble again. Sentiment has changed or is in the process of. The money will be pumped elsewhere and prices will keep falling.

In the U.S., if the Fed dropped rates to 1% again, I'd bet it wouldn't stop house prices falling.


----------



## plaudit

phoenix_n said:


> The irish property boom, ladies and gentlemen, is over.


 
But when will it become "official" Will the VI's be shouting it from the rooftops?


----------



## dloob

Good news from the Galway Advertiser, Tony Kavanagh of Sherry Fitz Kavanagh says it's all grand, now is a good time to buy prices will moderate but won't drop.
The doomsayers have got it wrong again as they have repeatably for the last 10 years.
As to why it's all fine he says with GNP up over 9% in the first two quarters of 06 all the immigrants and interest rates leveling off we'll have a vibrant market in the new year.

I guess he hasn't noticed those falling asking prices around Galway then.


----------



## edo

> Originally Posted by *room305* http://www.askaboutmoney.com/showthread.php?p=300202#post300202
> _ As for the "Business & Technology Park" - there is absolutely nothing. Not a single company. On the opposite side of the road there is a large furniture place but the park has nothing. To compound the folly, the Institute of Technology has built an incubation unit that was supposed to feed smaller companies into the larger companies located in this park. The County Enterprise Board has built a similar unit which has a few small companies as far as I know. Lots of offices but very few companies._


Thanks for clearing that for me - I wasn't really sure exactly where the Decentralised Gov Dept was located - I jst remember hearing that they paid approx 2 million for the site that was valued at around 500.000 - That was the moment I knew we had well and truly lost it in this little country of ours.

Lordly I forgot about Lapple - Man its been a bad year for Carlow - with the exception of beating Wicklow in Football. In a way its kind of symbolic of the country at large - building housing and retail outlets as far as the eye can see - industry , manufacturing and exports - becoming a ghosttown.



> This might very well prove to be true, perhaps they could refit some of the new warehousing into funky New York style apartments?


Maybe - somehow the address of of "Dublin Road - Carlow" doesnt quite have the same funky appeal as say "Greenwich Village" "Tribeca" or "The Battery" in New York or the Embarcadero in San Francisco!!!!


----------



## StoppedClock

phoenix_n said:


> The irish property boom, ladies and gentlemen, is over.


 
Now that the property boom is over and we are proved right we will all be able to look foward to a winter of dinner parties, cocktail receptions and charity balls where the Bulls laud our wisdom and ask for our opinion on the _new _economy while they publicly chastise themselves for being so enthralled with property in the first place (but secretly claiming to each other they knew it was a sham all along).

I can picture whole ballrooms sitting in rapt silece as we explain yields and how to calculate % incereases AND decreases and how to fill the voids in their CVs where they were sitting around living off MEW. 

Those most badly burned and most heavly endebted will humbly seek us out and berate themselves for not listening to our advice and entreat us to forgive them their foolishness.

Oh I am alomost dizzy with anticipation, the next six months will be a whirlwind, dust of your black ties our hour of glory is upon us.


----------



## edo

> Now that the property boom is over and we are proved right we will all be able to look foward to a winter of dinner parties, cocktail receptions and charity balls where the bears laud our wisdom and ask for our opinion on the _new _economy while they publicly chastise themselves for being so enthralled with property in the first place (but secretly claiming to each other they knew it was a sham all along



Yo SC - dont ya mean the Property "Bulls"???? the Bears have known all along!


----------



## Calina

StoppedClock said:


> Now that the property boom is over and we are proved right we will all be able to look foward to a winter of dinner parties, cocktail receptions and charity balls where the bears laud our wisdom and ask for our opinion on the _new _economy while they publicly chastise themselves for being so enthralled with property in the first place (but secretly claiming to each other they knew it was a sham all along).
> 
> I can picture whole ballrooms sitting in rapt silece as we explain yields and how to calculate % incereases AND decreases and how to fill the voids in their CVs where they were sitting around living off MEW.
> 
> Those most badly burned and most heavly endebted will humbly seek us out and berate themselves for not listening to our advice and entreat us to forgive them their foolishness.
> 
> Oh I am alomost dizzy with anticipation, the next six months will be a whirlwind, dust of your black ties our hour of glory is upon us.



I don't want to rain on your parade or anything like that but didn't someone mention a deadcat bounce for May? YOu may want to wait for the barbecue season for maximum effect....


----------



## conor_mc

StoppedClock said:


> .... where the bears laud our wisdom and ask for our opinion on the _new _economy.


 
I think we're all pretty darn good at patting each other on the back here, I wonder will the _bulls_ feel the same this time next year?


----------



## baby_tooth

slump in property prices will be great for the country, great for the displaced workers.

ppl work harder and longer for less when their need increase.

ppl become more creative, imaginative and their enterperunship spirit rises.

increase our competitiveness, lowers wages greatly in construction, things will be done quicker and faster, builders will call back early instead of never....


things will return to fundamentals, investment in earning assets (as opposed to appreciating assets) will grow....as money is still very very cheap
(technically free at moment)

inflation in consumer products will drop, mechanics will earn a bit more, and depreciating fixed asset salesmen will suffer in the way that they so much deserve to.

agree...or am i way of the point!


----------



## StoppedClock

conor_mc said:


> I think we're all pretty darn good at patting each other on the back here, I wonder will the _bulls_ feel the same this time next year?


 
My post was v. tongue in cheek, I was playing on the strength of phoenix_n’s conviction. In reality now that my peers have actually started to take notice of what I have been saying I have had to tone it down as I really would hate anyone to STR on my account and regret it later. The truth is no one knows what could happen. If prices went up 10% per annum for another 5 years they would still only be as ludicrous as they are now (given that ludicrous pricing is non-linear), I’d say we have a few twists and turns yet in this story which goes partway to explaining my addiction to the thread.


----------



## ajapale

Hi BT,

How about sticking to the topic? Discuss the general economy in one of the other threads. This thread is about "*Current public sentiment towards the housing market*".

aj


----------



## baby_tooth

ajapale said:


> Hi BT,
> 
> How about sticking to the topic? Discuss the general economy in one of the other threads. This thread is about "*Current public sentiment towards the housing market*".
> 
> aj


 

sorry but i see this as related,

hence references to cheaper labour -> cheaper houses.
developers owing loand @ higher rates -> quicker turnaround on development land to recoup, make some profit as opposed to massive -> cheaper houses @ better quality.

ppl working harder -> esp in construction -> better for all, and helpful in 10-12yr window to public housing....

ie: prices will crash, then stagnate, finally picking pack up after about 10-12 yr.
after all, where can all the builders emigrate to now??..so will have to, more than likely stay and work alot harder etc.


----------



## robd

Calina said:


> I don't want to rain on your parade or anything like that but didn't someone mention a deadcat bounce for May? YOu may want to wait for the barbecue season for maximum effect....





poormouth said:


> Definition of Blowoff taken from
> 
> Is it possible that we saw the blowoff in the Irish housing market early in 2006 or is it too early to say yet?



http://www.askaboutmoney.com/showpost.php?p=198875&postcount=41

Dead Cat Bounce and Blowoff are good terms.  I commented in the above post about Head and Shoulders Pattern in Technical Analysis of a market.





> Notes:
> The "head-and-shoulders" pattern is believed to be one of the most reliable trend-reversal patterns.



The market levelled off in 2004, picking up again in 2005 through to its peak in early 2006 (this year).  I'd say you could get you bounce in May (or maybe September) alright.  Of course Technical Analysis is great at looking at past markets but isn't so good at predicting the future (nothing really is).

Great that what I thought in April about the then current situation appears to have been true.


----------



## Open_Window

Eh hem!

If prices are falling and looks like fast, also gaining much momentum, by Budget day the case for "Stamp Duty" changes will be negated by massive down turn in house prices.

The topic will be a "Lame-Duck" Politically & in reality too.

If the Government are stupid enough to go near the housing market at this stage and they do change stamp duty not having read the market, it will only add to the downward pressures on prices!

One of the many intertwinning catch-22s you'll trip over in the run to the door....

Personally I don't think they will go near it.


----------



## Savvy

Never heard the expression 'Reduced reserve'. Does this mean they'll start accepting offers at 1.1m but expect to sell it for more?
Old Price: 1.2m
[broken link removed]
New Price: 1.1m
http://www.daft.ie/searchsale.daft?id=114686


----------



## StoppedClock

Savvy said:


> Never heard the expression 'Reduced reserve'. Does this mean they'll start accepting offers at 1.1m but expect to sell it for more?
> Old Price: 1.2m
> [broken link removed]
> New Price: 1.1m
> http://www.daft.ie/searchsale.daft?id=114686


 

Anything but "falling"...

Spoke to a guy recently who is in the process of moving (bearish but figures his current PPR will fall more than his hoped for new one - he has done the math) decied he would wring a few extra € off his EA commision by making them squirm while valuing his property.  

Whatever AMV they gave him he assured them that a smaller property on a lower floor in worse condition had gone for 15% more in the Spring and demanded to know were prices falling, he was assured they were correcting, readjusting or becoming more realistic but they most definitely were not falling, and anyway these are only asking prices. 
So he said if it is only an AMV would his place definitely go for above this?  They said definitely but in the current conditions it may go for just above the AMV... or AMV... or maybe slightly lower BUT... it would only go for lower to stir up interest?? .  

Starting to get confused himself he then sought clarity by asking if the price his house eventually sells for is less than the AMV +  15% (from Spring) would this mean prices were falling? ...the EA said no.

Bananas.


----------



## whathome

StoppedClock said:


> Starting to get confused himself he then sought clarity by asking if the price his house eventually sells for is less than the AMV + 15% (from Spring) would this mean prices were falling? ...the EA said no.
> 
> Bananas.


 
Hilarious - "Prices are NOT falling, they're just lower than they were in Spring"


----------



## redo

Calina said:


> I don't want to rain on your parade or anything like that but didn't someone mention a deadcat bounce for May? YOu may want to wait for the barbecue season for maximum effect....


----------



## Gwynston

I don't like barbequed cats....

But I do like steak - preferably fresh off the bull!


----------



## phoenix_n

phoenix_n said:


> Supply still increasing. Now 54 for sale in phibsboro area.


 
Now 56.


----------



## Arthur Daley

Atr least Phibsboro has the metro to look forward to. There are 130 for sale in Drogheda on my home. A whopping 231 on Daft for sale in Drogheda. That's some choice.


----------



## Debtwish

Gwynston said:


> But I do like steak - preferably fresh off the bull!


 
Bring me a live one. I'll carve off what I want and then ride the rest home.


----------



## topman

*what about this ?*

*Economic growth likely to exceed expectations*



















*15:48 Thursday October 19th 2006*







The Department of Finance said this afternoon that economic growth is likely to exceed expectations this year. 
Growth of 5% had been forecast, but that's now being revised to between 5.25% and 5.75%.

While the department's pre-budget outlook confirms that Minister Brian Cowen will have more than expected to spend this December, he has ruled out a pre-election giveaway.


----------



## Calina

I geet the impression that the announcement of the metro routing has been more low-keyed than I would have expected. I don't know if the expectation of the route has already been built into some house pricing or not...I'll be interested to see its effect. 

Inventory in Swords continues to rise. 

DAFT: 113 MyHome 164. I think there are something like 4 two bedroomed houses on sale in Ridgewood Square alone and Ridgewood isn't one of the bigger estates there. And asks for two bedroomed apartments in Boroimhe have been stuck between 330K and 335K for the past two months.


----------



## daveirl

Calina said:


> I think there are something like 4 two bedroomed houses on sale in Ridgewood Square alone and Ridgewood isn't one of the bigger estates there.


4 out of the 28 houses in my portion of the estate I live in are for sale. Don't seem to be moving either. Donnybrook, Cork.


----------



## Arthur Daley

Calina said:


> And asks for two bedroomed apartments in Boroimhe have been stuck between 330K and 335K for the past two months.


 
Supply sure is up but I haven't seen evidence of a fall in prices here since June probably due to a metro premium being priced in.


----------



## plaudit

*Re: what about this ?*



topman said:


> The Department of Finance said this afternoon that economic growth is likely to exceed expectations this year.
> Growth of 5% had been forecast, but that's now being revised to between 5.25% and 5.75%.


 
Thats a measure of the past 12 months, with 90K houses built in the same period that probably about right. If 75K houses are built in the next 12 months I wonder what the figure will be like.


----------



## StoppedClock

*Re: what about this ?*



topman said:


> *Economic growth likely to exceed expectations*http://www.unison.ie/images/tran_pix.gifhttp://www.unison.ie/images/tran_pix.gifhttp://www.unison.ie/images/tran_pix.gifhttp://www.unison.ie/images/tran_pix.gifhttp://www.unison.ie/images/tran_pix.gifhttp://www.unison.ie/images/tran_pix.gif*15:48 Thursday October 19th 2006*http://www.unison.ie/images/tran_pix.gifhttp://www.unison.ie/images/tran_pix.gif
> The Department of Finance said this afternoon that economic growth is likely to exceed expectations this year.
> Growth of 5% had been forecast, but that's now being revised to between 5.25% and 5.75%.
> 
> While the department's pre-budget outlook confirms that Minister Brian Cowen will have more than expected to spend this December, he has ruled out a pre-election giveaway.


 
That's some url!!

Not predicting anything one way or the other but since sentiment is all that matters** then even growth of 6,7,8 % will make no difference once the illusion has been shattered.


** ps the reason  i think this is the longest thread of all is that it has correctly identified that sentiment is everything, economy going tits up or growing for ever and ever is only ons ingredient to sentiment


----------



## MadPad

wonder which is the correct term for the bears on this thread... 
a sleuth of bears or a sloth of bears
smart or lazy ?
... back to work...
http://www.rinkworks.com/words/collective.shtml


----------



## plaudit

Between Luas / Dart / Metro and further extentions and additions, in about 15 years most places in the greater Dublin area will be within 15 minutes walk of a station. Surely the Metro announcement has devalued property on the Luas route.


----------



## conor_mc

MadPad said:


> wonder which is the correct term for the bears on this thread...
> a sleuth of bears or a sloth of bears
> smart or lazy ?
> ... back to work...
> http://www.rinkworks.com/words/collective.shtml


 
Sssh now, we're busy debating the future of the country and you're staring out the window wondering what you could call us collectively....


----------



## whathome

Arthur Daley said:


> Supply sure is up but I haven't seen evidence of a fall in prices here since June probably due to a metro premium being priced in.


 
There have been a lot of asking price drops in Swords since June. Here's one from today...

8 Ormond Grove, Original Price €405,000


Reduced Price:
€390,000
www.daft.ie/122791


----------



## Calina

plaudit said:


> Between Luas / Dart / Metro and further extentions and additions, in about 15 years most places in the greater Dublin area will be within 15 minutes walk of a station. Surely the Metro announcement has devalued property on the Luas route.



Well since Metro is northside, mainly and property values are traditionally an average lower than they are southside and Luas is southside and the money being commanded for property in Dundrum and Sandyford turned me into a gibbering wreck, I'm not entirely sure that will be the effect per se.


----------



## conor_mc

Calina said:


> Well since Metro is northside, mainly and property values are traditionally an average lower than they are southside and Luas is southside and the money being commanded for property in Dundrum and Sandyford turned me into a gibbering wreck, I'm not entirely sure that will be the effect per se.


 
We'd prefer that you referred to our property prices up here as "more realistic" thank you very much!


----------



## Calina

conor_mc said:


> We'd prefer that you referred to our property prices up here as "more realistic" thank you very much!



Why? Just because they are more realistic than the southside doesn't necessarily imply that they are, in fact, realistic at all....Come on. One bedroomed apartments in Abbeystone for 285K? That is a totally insane price for 1) a one bedroomed apartment and 2) a one bedroomed apartment in an estate that has precious little to commend it other than proximity to the M1 citybound and a fifteen minute walk or so to the biggest motor retail park in Dublin (apparently). 

Are you an estate agent, or something?


----------



## conor_mc

Calina said:


> Why? Just because they are more realistic than the southside doesn't necessarily imply that they are, in fact, realistic at all....Come on. One bedroomed apartments in Abbeystone for 285K? That is a totally insane price for 1) a one bedroomed apartment and 2) a one bedroomed apartment in an estate that has precious little to commend it other than proximity to the M1 citybound and a fifteen minute walk or so to the biggest motor retail park in Dublin (apparently).
> 
> Are you an estate agent, or something?


 
'Twas a joke, but I did say _more_ realistic.

Re being an EA..... eh I think I've established my credentials in the bear camp by now, no?

EDIT - and I see the smileys now....


----------



## Calina

conor_mc said:


> 'Twas a joke, but I did say _more_ realistic.
> 
> Re being an EA..... eh I think I've established my credentials in the bear camp by now, no?
> 
> EDIT - and I see the smileys now....



Sorry - I tried to multitask and forgot the smilies....


----------



## Open_Window

*Re: what about this ?*



plaudit said:


> Thats a measure of the past 12 months, with 90K houses built in the same period that probably about right. If 75K houses are built in the next 12 months I wonder what the figure will be like.



If we have already reached oversupply well then all those developments I pass to and from work are in big trouble.

I am sure everyone passes at lest 4-8 residential developments everyday communitng.


----------



## partisan

plaudit said:


> Between Luas / Dart / Metro and further extentions and additions, in about 15 years most places in the greater Dublin area will be within 15 minutes walk of a station. Surely the Metro announcement has devalued property on the Luas route.



That assumes a fixed amount of "value" or wealth in the system. The new lines are creating wealth for the areas they pass through. The new Luas lines add value or wealth to the area (wealth/value being good stuff that people want), so people will be willing to spend more of their own current and future earnings (than they otherwise would) to purchase homes on the commuter lines.


----------



## StoppedClock

Open_Window said:


> If we have already reached oversupply well then all those developments I pass to and from work are in big trouble.
> 
> I am sure everyone passes at lest 4-8 residential developments everyday communitng.


 


partisan said:


> That assumes a fixed amount of "value" or wealth in the system. The new lines are creating wealth for the areas they pass through. The new Luas lines add value or wealth to the area (wealth/value being good stuff that people want), so people will be willing to spend more of their own current and future earnings (than they otherwise would) to purchase homes on the commuter lines.


 
Also assumes value of property is somehow related to proximity to decent transport links which it clearly isn't (if it was most property in Dublin would be worthless)


----------



## AJ1

Keeping an eye on a house in the estate where i live in Bray, 3 bed reduced from 475 (2 mths ago) to 440k (last month) and now 420K, one down the road from it just gone up for sale for 405k!


----------



## StoppedClock

AJ1 said:


> Keeping an eye on a house in the estate where i live in Bray, 3 bed reduced from 475 (2 mths ago) to 440k (last month) and now 420K, one down the road from it just gone up for sale for 405k!


 
Any idea what they went for in spring?


----------



## AJ1

One went for 405k in the spring two doors up from it, couldn't believe they were asking 475k!


----------



## StoppedClock

AJ1 said:


> One went for 405k in the spring two doors up from it, couldn't believe they were asking 475k!


 
So no noimal fall ... yet.  Keep us posted.


----------



## gearoidmm

4 months ago there were 3 properties available for sale on myhome.ie in Mount St Annes.  Now there are 13.  Investors getting out while they still can.

That said, a guy I know just bought [broken link removed] (or something similar) with his friend.

450,000 for a 560sq ft 2-bed.  Madness - I've seen bigger 1-beds.


----------



## miju

will be interesting to see what the bulls reasons for stalling prices are now that the government have clearly indicated that they will not be tampering with stamp duty in the budget this year going by newstalks coverage of the announcements today

slightly off topic , it seems the budget will be a very prudent one rather than the spending spree everyone was expecting which i think the government are right on 

of course now the situation exists where theres no more excuses for the bulls for falling prices / asking prices and the government seem to be making the VERY wise move of not attempting to meddle with the irish property monster and it firmly looks like there's no more petrol to pour on this fire

one last aside , was REALLY hilarious to hear the economist say "they still might change stamp duty we never know" despite Brian Cowens comments to the complete contrary.....head, brick wall etc, etc


----------



## StoppedClock

gearoidmm said:


> 4 months ago there were 3 properties available for sale on myhome.ie in Mount St Annes. Now there are 13. Investors getting out while they still can.
> 
> That said, a guy I know just bought [broken link removed] (or something similar) with his friend.
> 
> 450,000 for a 560sq ft 2-bed. Madness - I've seen bigger 1-beds.


 
You are too kind (or is there some EA in you  ) that place is only 430.5sqft


----------



## gearoidmm

Sorry, brain blip, I meant [broken link removed] and it's 530k which is worse of course


----------



## pernickety

asking price and sale price are so different, so how can you compare then and now...

Last Spring we had asking price of 380K, got an offer of 430K which we happily accepted.
If a similar house in similar area goes on sale now asking 380, it seems that sellers are being advised to accept 380 (or even less).
On paper that wouldn't look like a drop in the market.


----------



## Savvy

Heard George Lee interview with Brian Cowan and he in no uncertain terms stated that he was 'not going to interfere with the property market' .
Rather surprised me...so with that in the public domain, if the EA's are correct we should see houses starting to be snapped up since there is no reason for people to hold back!


----------



## dloob

Primetime is going to ask is the property boom over at 9:30


----------



## whathome

RTE 1 - Primetime on Property Market now


----------



## beattie

dloob said:


> Primetime is going to ask is the property boom over at 9:30


 
Don't worry, M. Finnegan from SHF has said it will be a soft landing..... phew!!!


----------



## dloob

beattie said:


> Don't worry, M. Finnegan from SHF has said it will be a soft landing..... phew!!!



That was lucky 
Still it's sure to have a big effect on public sentiment, I'm sure it will be a big shock to some people to hear about a slowdown.


----------



## Savvy

Not a lot in this to be honest.IIB econmist telling us we were heading for a soft landing(yawn!).


----------



## beattie

dloob said:


> That was lucky
> Still it's sure to have a big effect on public sentiment, I'm sure it will be a big shock to some people to hear about a slowdown.


 

I want to see if Austin Hughes' toes are crossed, he is incredible. I really feel sorry for the saps who listen to his advice and then go and sign on the line which is dotted. He was hardly given a bumpy ride by Miriam, she was disappointing in this regard.


----------



## plaudit

Expect a flood of empty specuvestor houses to go on the market after primetime.


----------



## gurramok

Austin Hughes of IIB just stated that hse prices wil rise by 7% next year.

And 40% of wages going on mortgage repayments is sustainable and manageable for couples at current rates for the forseeable future!..lol

That man should be doing stand-up comedy in Vicar street, i nearly fell out of chair laughing at him!

Richard Curran of SBP put across the case that we know about current negative sentiment pretty well i thought.


----------



## asterix

Funny to see Miriam O'Callaghan sitting between a bear (Richard Curran - Sunday B. Post) and a bull (Austin Hughes - IIB Bank).  I wonder how she would fare moderating between the bulls and bears on this thread!  Having heard the two of them, I found A. Hughes more convincing.  I had no strong views either way before watching the debate.


----------



## whathome

I thought PrimeTime was very balanced. Richard Curran from the Sunday Business Post said he did not buy into a soft landing and that a crash could not be ruled out and he believed that some areas could drop by up to 20%. Bubble and Crash were mentioned several times. Austin Hughes was doing his usual Comical Ali impression. 

Overall, I felt it would leave the viewer in no doubt that the market was in big trouble.


----------



## beattie

whathome said:


> Austin Hughes was doing his usual Comical Ali impression.


----------



## plaudit

A lot of the VI's were banging on about the economy being good and pointed to a strong construction sector as one of the drivers. They failed to mention that if the number of new builds falls that there won't be as many jobs available. Not to mention the massive hit to the government coffers from the many associated taxes.


----------



## gearoidmm

When asked if he felt that 40% of the average income going on mortgage repayments in Dubin was sustainable, Austin Hughes' response was instructive

Something like 'these traditional measures don't count as thing are different these days - back then people couldn't get a mortgage and people were emigrating and so the market was softer.  People always had to struggle in the first few years after buying a house'

Totally dodged the question.  People did struggle but were putting a much smaller percentage of their incomes into mortgages and didn't have add-ons like bin charges and management fees to think about.


----------



## whathome

asterix said:


> I found A. Hughes more convincing. I had no strong views either way before watching the debate.


 
That might have something to do with the fact that you have just bought an apartment in Dublin 8 according to a post on Oct 10th?


----------



## howstrange

I cant believe the wheels are coming off so quick!! Thats only with a 1.25 increase in interest rates since last Dec. With another 0.25 rise in Dec and maybe in early of next year i cant see any possible way of a soft landing!! I dont think Primetime will help the nerves of vendors at all.

Another thing i noticed passing an apt block this evening is that all the for sale signs have disappeared. This block has had at least 4 or 5 For Sale signs outside for the last few months. And i know the apts are not sold cos they are still on Myhome and Daft. I also noticed it in another apt block this morn. It got me thinking that it may be a new trick by the EA's?? If people dont see as many For Sale signs outside an apt block it might calm their fears!! Anyone any views on this?? Has anyone else noticed anything like this?


----------



## Open_Window

pernickety said:


> asking price and sale price are so different, so how can you compare then and now...
> 
> Last Spring we had asking price of 380K, got an offer of 430K which we happily accepted.
> If a similar house in similar area goes on sale now asking 380, it seems that sellers are being advised to accept 380 (or even less).
> On paper that wouldn't look like a drop in the market.



first time since, well a long time this has.

 You got an offer, lucky you, some people are not getting a single offer! 

Some people are now using more than 1 agent to sell!

Remember this thread is about current market sentiment so a dip in asking prices mean sentiment is turning and I believe has turned months ago, well before the Stamp Duty bull.


----------



## Dipole

Prime Time made no mention of the major investor element to the residential property market even though desertion of the market by investors is what is going to bring the market crashing down.

I'm of the opinion that now that any meaningful capital appreciation of the asset is off the menu no rationalising investor has any business being in the market as the figures don't add up.


----------



## bearishbull

The mantra all the vested interests keep regurgitating is that a "soft landing " is gonna happen when this outcome has never/rarely happened in previous booms around world. Also once theres a "soft landing" with minimal or zero capital growth all the recent investors who were obviously just buying for capital appreciation will cease to buy and/or sell their recent "investments". Rents may rise in this scenario but prices will fall as many tens of thousands of investment properties are dumped or new builds go unsold..


----------



## Open_Window

beattie said:


> I want to see if Austin Hughes' toes are crossed, he is incredible. I really feel sorry for the saps who listen to his advice and then go and sign on the line which is dotted. He was hardly given a bumpy ride by Miriam, she was disappointing in this regard.



I don't think many irish Media presenter actually fully grasp the scale of the subject to even forumalte a good question.

If it had of been Geroge Lee or David McWilliams presenting you would have seen fireworks!

*Here is my big prediciton.

When the "Irish Property Bubble/Collapse" is covered on the "Late Late" with a panel of sobing FTBers who got in at the top (expect viewers numbers to be huge) you know we are in a post bubble burst crisis, it will have been made clear to the National pysche we are screwed.*

Cut to distraught wife No.2 ... "pat we just wanted ..  a [sob sob]... h-h-home, Pat the man in the bank was so nice he told us everything would be fine, he said 'sure property prices are flyin' ye'll be grand so ya will so ya will", his name was, his name em, what was his name love.. [sob sob] huh oh yes, Austin ... well Austin if you are watching tonight how do I explain this to little Dara & Aoife, how have now home you BA£"**D...."


----------



## Duplex

gearoidmm said:


> When asked if he felt that 40% of the average income going on mortgage repayments in Dubin was sustainable, Austin Hughes' response was instructive
> 
> Something like 'these traditional measures don't count as thing are different these days - back then people couldn't get a mortgage and people were emigrating and so the market was softer. People always had to struggle in the first few years after buying a house'
> 
> Totally dodged the question. People did struggle but were putting a much smaller percentage of their incomes into mortgages and didn't have add-ons like bin charges and management fees to think about.


 
Hughes denies that speculation has played any part in the hyper inflation in house prices over the past few years.  This is of course utter nonsense with rental yields below finance cost and the media unabashedly discussing property investment in terms of 'anticipated' capital growth. 

 There was a telling bit of news further up the thread that hasn't received much attention; that is effective wage deflation in the most important parts of our economy, construction.  Hardly delicious irony but the people building these homes are seeing wage growth of 3.7% pa while Hughes suggests in the face of rising borrowing costs that they will be able to pay 7% more for homes next year.  Howling at the moon Austin, utterly barking mad.


----------



## asterix

whathome said:


> That might have something to do with the fact that you have just bought an apartment in Dublin 8 according to a post on Oct 10th?


True. I can't hide that And I'm the first to tell people,with a wry smile, that I probably bought at the wrong time I guess you're suggesting that I'm taking the bullish view to make myself feel better about buying just as the bubble burst (April/May) but I really don't care so long as I can pay the mortgage and I think I'll manage that unless interest rates go completely haywire! 
I just find the bull arguments articulated by the young female interviewee and A. Hughes quite sound - strong economy, pope's children lining up to buy, strong immigration levels - reasonably convincing when sounded off against the bearish line adopted by R. Curran. I suppose I find the soft landing argument more plausible than the property crash line but of course I could be wrong


----------



## Open_Window

gearoidmm said:


> When asked if he felt that 40% of the average income going on mortgage repayments in Dubin was sustainable, Austin Hughes' response was instructive
> 
> Something like 'these traditional measures don't count as thing are different these days - back then people couldn't get a mortgage and people were emigrating and so the market was softer.  People always had to struggle in the first few years after buying a house'
> 
> Totally dodged the question.  People did struggle but were putting a much smaller percentage of their incomes into mortgages and didn't have add-ons like bin charges and management fees to think about.



its seem softer is much more desirable to "stagnant, rising a little bit then falling for some years, rising a bit agian then stagnanting again and so on...." 

Back then they didn't have,

The M50
Soaring Eneregy Costs (eroding any gain in take home pay
Cronic Traffic Congestion
2 Hour Commutes each way
Did I saw the "M50" oh I did...
Rampant House Prie inflation (eroding any gain in take home pay)

Shall I go on????

I get fairly sick when people tell me how bad it was, yea sure less job, emmigration but the worst was yet to come!!!!

What does, or more to the point "did" it take to change sentiment, why *super-duper-ultra-uber-cheaporama-alwayon-credit *


----------



## gearoidmm

bearishbull said:


> The mantra all the vested interests keep regurgitating is that a "soft landing " is gonna happen when this outcome has never/rarely happened in previous booms around world. Also once theres a "soft landing" with minimal or zero capital growth all the recent investors who were obviously just buying for capital appreciation will cease to buy and/or sell their recent "investments". Rents may rise in this scenario but prices will fall as many tens of thousands of investment properties are dumped or new builds go unsold..



What about the UK.  It looks like they have achieved the fabled soft landing.  House price rises about in line with inflation for the past 2 years or so and affordability is improving slightly.  Not to say that prices won't fall but at the moment it seems that the 'soft landing' is happening there.


----------



## Open_Window

gearoidmm said:


> What about the UK.  It looks like they have achieved the fabled soft landing.  House price rises about in line with inflation for the past 2 years or so and affordability is improving slightly.  Not to say that prices won't fall but at the moment it seems that the 'soft landing' is happening there.



Well it did take them at least one massive crash to get it right the second time round!!   

(As soon as Austin wiped his brow and miriam offered him some water at the end of what was a light grillingt (must have felt a bit like Bertie) did we all just run up the stairs/into the study and bang on the laptop/computer and log straight onto the forum... yep I'm addicted, you can tell I have no interest in sport)


----------



## beattie

gearoidmm said:


> What about the UK. It looks like they have achieved the fabled soft landing. House price rises about in line with inflation for the past 2 years or so and affordability is improving slightly. Not to say that prices won't fall but at the moment it seems that the 'soft landing' is happening there.


 
They aren't building new houses at the rate we are, thats the main difference. Also there is still decent returns to be made (well compared to the miniscule ones here) on BTL over there.


----------



## redo

There was been been alot of figures banded about in recent weeks about the afforability factor of houses.

Consider this;

20 to 25 years ago, The afforability factor was arounf 25-30% based on
Interest  rates circa 8%
Single income families
20 year mortgages.

Today, for FTB is it arounf 35-40% based on
Historically low interest rates circa 3.75% (Discount of course, soon to expire)
Dual income couples/families
> 30 year mortgages.


Austin, from IIB mentioned that he expected around 7% growth in house prices next year.  Are IIB about to release a new 50 year product that we don't yet know about or is he confident that IIB will not pass on any interest rate increase in Dec 06?


----------



## Duplex

gearoidmm said:


> What about the UK. It looks like they have achieved the fabled soft landing. House price rises about in line with inflation for the past 2 years or so and affordability is improving slightly. Not to say that prices won't fall but at the moment it seems that the 'soft landing' is happening there.


 

The UK economy is a basket case, Ireland although suffering from the same disease is not running deficits with a rickety currency.  Their housing vacancy rate is 3% ours is 15%. They have rising unemployment a hideous consumer debt bubble, the second lowest savings rate in the EU (after Slovenia) and are in the process of loosing two wars at once. If you want to compare Ireland to a European country why not Germany?


----------



## beattie

Open_Window said:


> (As soon as Austin wiped his brow and miriam offered him some water at the end of what was a light grillingt (must have felt a bit like Bertie)


 
Speaking of Bertie, will he be on the airwaves telling us to buy and not hold off on a purchase to prevent the bubble (and economy) from bursting........


----------



## whathome

asterix said:


> I just find the bull arguments articulated by the young female interviewee and A. Hughes quite sound


 
She was Marian Finnegan from Sherry Fitzgerald - selling houses.
And Austin Hughes is from IIB bank - selling mortgages.

If it's a done deal on the new place then you're right not to worry about what happens to the the property market in the meantime as long as you can pay the mortgage. Best of luck with the move.


----------



## gearoidmm

Duplex said:


> The UK economy is a basket case, Ireland although suffering from the same disease is not running deficits with a rickety currency.  Their housing vacancy rate is 3% ours is 15%. They have rising unemployment a hideous consumer debt bubble, the second lowest savings rate in the EU (after Slovenia) and are in the process of loosing two wars at once. If you want to compare Ireland to a European country why not Germany?



I never said that I was comparing Ireland to the UK.  I was just saying that a lot of people here say that there is no such thing as a soft landing - that it cannot happen when prices rise so much.  Despite all the predictions to the contrary, it seems to be happening in the UK.


----------



## asterix

whathome said:


> She was Marian Finnegan from Sherry Fitzgerald - selling houses.
> And Austin Hughes is from IIB bank - selling mortgages.
> 
> If it's a done deal on the new place then you're right not to worry about what happens to the the property market in the meantime as long as you can pay the mortgage. Best of luck with the move.


 
I know they are vested interests but I think I can separate the arguments from those articulating them! However, I'm very much a layperson when it comes to the economics of the situation so maybe they've managed to pull the wool over my eyes
It's a done deal but coming from the "as long as I have a roof over my head" school of money I honestly don't care Spent this evening happily looking at the furniture sections of the dept. stores in town actually! (realise am now beginning to sound completely green) Ta for the good wishes.


----------



## redo

whathome said:


> She was Marian Finnegan from Sherry Fitzgerald - selling houses.
> And Austin is from IIB - selling mortgages.
> 
> If it's a done deal on the new place then you're right not to worry about what happens to the the property market in the meantime as long as you can pay the mortgage.  Best of luck with the move.


Marian Finnegan (who is probably following this thread and is very hot) has the all credentials of a weather forcaster.


----------



## Neffa

gearoidmm said:


> What about the UK. It looks like they have achieved the fabled soft landing. House price rises about in line with inflation for the past 2 years or so and affordability is improving slightly. Not to say that prices won't fall but at the moment it seems that the 'soft landing' is happening there.


 
The UK in many areas has a genuine supply constraint and this is probably helping to hold prices together in the face of some weakening economic news. Also the London market is very dependent on the City & financial bonuses and they are forecast to be very strong again this year.

I agree it looks like it is having a soft landing but with the BoE likely to increase rates again before year-end it may be too soon to call it just yet.


----------



## whathome

Tonights *PrimeTime* programme on the property market is now posted on rte.ie

[broken link removed]

Definitely worth watching


----------



## miju

asterix said:


> I just find the bull arguments articulated by the young female interviewee and A. Hughes quite sound - strong economy, pope's children lining up to buy, strong immigration levels - reasonably convincing when sounded off against the bearish line adopted by R. Curran.



strong economy - on the face of it yes , look a bit deeper and the economy is rotting to the core 

popes children lining to buy - well actually *there're not* hence the many, many examples of asking prices being dropped on this thread

immgration levels - the majority of these immigrants are working in low paid  jobs which means they contribute very little to the government in terms of tax takes and to the general economy if recent reports mentioning that immgrants are sending millions home each year are anything to go by

yeah we could get that soft landing just like the UK if of course we controlled our interest rates 

unfortunately i think this is gonna be a long hard fall for the irish property market


----------



## Debtwish

whathome said:


> She was Marian Finnegan from Sherry Fitzgerald - selling houses.
> And Austin Hughes is from IIB bank - selling mortgages.


 
Exactly. One of those two telling us not to buy a house would be like the chairman of Ford telling us to give up our cars and take public transport. 

I don't blame them for this, they are just doing their job. But I do blame RTE, Newstalk and others for assuming that the average punter is too stupid to understand the connection.


----------



## sunrock

Neffa said:


> The UK in many areas has a genuine supply constraint and this is probably helping to hold prices together in the face of some weakening economic news. Also the London market is very dependent on the City & financial bonuses and they are forecast to be very strong again this year.
> 
> I agree it looks like it is having a soft landing but with the BoE likely to increase rates again before year-end it may be too soon to call it just yet.


i agree with the above
for ireland to have a supply constraint like the uk we would be building no more than 15k houses per year
also the south east and especially the london area has city bonuses_more than 100000 people who can afford high house prices
also a lot of very rich people choose to reside there for example rich russians and other rich exiles
a better comparison would be with be with edinburgh or cardiff


----------



## blindjustice

Ive got a bad feeling ..............


----------



## bearishbull

The Uk market appears in a soft landing or even low/medium single digit level growth mode, but it doesnt mean it won't crash in next few years. Debt and affordability levels are squeezing many ftb's out and more interest rate rises are on the way. Yields are still much better than Ireland and there is an actual shortage of houses/land/new house builds over there. There are also significant tax differences which make property very attractive. The Uk economy is also so much more diversified and world class than Irelands, London is a world centre for everything from finance to art to engineering etc. There should be a significant premium to buy property in london compared to dublin but this doesnt appear to be the case.


----------



## Fredser

blindjustice said:


> Ive got a bad feeling ..............



Expand please :

1) Bad pint?
2) Bad battered sausage?
3) Current sentiment ....... ?

F


----------



## partisan

redo said:


> There was been been alot of figures banded about in recent weeks about the afforability factor of houses.
> 
> Consider this;
> 
> 20 to 25 years ago, The afforability factor was arounf 25-30% based on
> Interest  rates circa 8%
> Single income families
> 20 year mortgages.
> 
> Today, for FTB is it arounf 35-40% based on
> Historically low interest rates circa 3.75% (Discount of course, soon to expire)
> Dual income couples/families
> > 30 year mortgages.
> 
> 
> Austin, from IIB mentioned that he expected around 7% growth in house prices next year. Are IIB about to release a new 50 year product that we don't yet know about or is he confident that IIB will not pass on any interest rate increase in Dec 06?



If house prices were at value (I think they are currently overvalued by at least 15% but probably (hopefully!) not much more than 25%) - 7% would sound reasonable. The economy is growing at over 5% (this year), GNP growth is outpacing GDP growth for the first time in a very long time. That means there should be around 5% more wealth in the local economony, add in inflation (decrease in the real value of money), forget about current sentiment and price levels and 7% seems possible! 
The other way of looking at it - if house prices remain static (or fall) it's equivalent to a 7% increase in affordability for the local economy at large ( with full employment at least some of that wealth increase should make it's way to the workers in the form of pay rises)..

Also are those affordability figures from 20 years ago also for First Time Buyers? Otherwise you are comparing apples with oranges. Afforability is significantly better for non ftbs than that at the moment. That recent risk report from Deutsche Bank stated that affordability had improved in Ireland since 1990, and was better than the average for all the years in between.


----------



## partisan

miju said:


> strong economy - on the face of it yes , look a bit deeper and the economy is rotting to the core


Not sure I agree with that. We are over exposed to the construction sector. At the same time Multi National investment here has made us the most productive workers in Europe. Even as costs have risen, it hasn't stopped them coming (Google, Amazon etc, etc). There also seems to be some uptake in local entrepreneurial activity. A surprisingly large proportion of people I know are starting companies at the at the moment. The business parks round Dublin are booming, and people seem to have no problem finding jobs.


----------



## asterix

miju said:


> strong economy - on the face of it yes , look a bit deeper and the economy is rotting to the core
> 
> popes children lining to buy - well actually *there're not* hence the many, many examples of asking prices being dropped on this thread
> 
> immgration levels - the majority of these immigrants are working in low paid jobs which means they contribute very little to the government in terms of tax takes and to the general economy if recent reports mentioning that immgrants are sending millions home each year are anything to go by
> 
> yeah we could get that soft landing just like the UK if of course we controlled our interest rates
> 
> unfortunately i think this is gonna be a long hard fall for the irish property market


 
strong economy - I would simply row in behind partisan's comments.
pope's children - my mistake to say they are lining up at present. But the fact remains that there are more 26 year olds in the country than any other particular age group and they are going to want to buy in the next few years.
immigrants - I seem to recall hearing an estate agent saying on some show recently that 10% of new buyers are immigrants. But maybe I'm being taken in by the VIs again
interest rates - that's your strongest point (and it's a v. strong one) and it's perfectly clear that it's the reason why the horses have been shying as of early summer. And even if they weren't shying, the banks would be (reluctantly!) reining them in, to continue the analogy. But I think most commentators expect a levelling off of interest rates next year. So I agree that prices can't continue to rise at the same rate as the early part of 2006, but a levelling off of interest rates (big presumption I know before someone jumps down my neck) combined with the factors referred to above makes for a soft landing IMHO, which is why I allowed myself to be seduced by the VIs on Prime Time In the full knowledge that I am no expert, I now await a savaging by the grizzly bears on this thread As someone who is kind of new to this, I am intrigued by the terminology...not the obvious bull, bear stuff but rather the "head and shoulders" model and ...my personal favourite... the dead cat bounce! Buy that man a pint!


----------



## miju

asterix said:


> pope's children - my mistake to say they are lining up at present. But the fact remains that there are more 26 year olds in the country than any other particular age group and they are going to want to buy in the next few years.



why would the have to buy in the next few years? yes they need to live somehwere but they DONT need to buy a home, example i'm 24 with missus and kid and i sure as hell wont be buying in the next few years as we're in a nice apt inside the M50 belt , close to every single amenity and paying a fraction on rent compared to what the mortgage would cost for same property (as an aside i know from conversation with landlord that amount he paid for apt compared with how much i pay rent isn't covering his mortgage)



asterix said:


> immigrants - I seem to recall hearing an estate agent saying on some show recently that 10% of new buyers are immigrants. But maybe I'm being taken in by the VIs again



i think you may have been it was actually 10% of the total of FTB's are foreign nationals and given that FTB are approx 35% of the current buyers in the property market (and shrinking by current reports) that 10% really gets put in perspective as an absolute miniscule amount in the grand scheme of both house sales and general immigration numbers ... so again the fundementals dont add us



asterix said:


> But I think most commentators expect a levelling off of interest rates next year.#!



IF , they level off it still doesn't make a difference to the fact that each .25% increase in the rate has knocked a massive amount of the maximum mortgage a couple on the average €30,000 per year average industrial wage will get



partisan said:


> We are over exposed to the construction sector. At the same time Multi National investment here has made us the most productive workers in Europe. Even as costs have risen, it hasn't stopped them coming (Google, Amazon etc, etc). There also seems to be some uptake in local entrepreneurial activity. A surprisingly large proportion of people I know are starting companies at the at the moment. The business parks round Dublin are booming, and people seem to have no problem finding jobs.



over exposed to not only direct employment to construction sectore but also indirect employment as well also the multi national investment has ben discussed briefly before and so i wont really get into that again. we're losing buckets upon buckets of manufacturing jobs that are being "replaced" with low paid service jobs, entrpreneuril activity is all well and good but wont really matter significantly in the grand scheme of things IMHO and besides given enterprise irelands DISGRACEFULY dismal effort in encouraging indiginous business what makes you think they'll be any better in an economic slowdown scenario?


----------



## whathome

asterix said:


> But the fact remains that there are more 26 year olds in the country than any other particular age group and they are going to want to buy in the next few years.


 
You are correct, but do you what happened to the Irish birth rate after 1980? It literally fell off a cliff and continued all the way down until 1994. Demographics start to work against the Irish property market within the next year or so. Peak birth rate was nearly 74064 in 1980 and then the slide starts all the way down to 48,255 in 1994. So the very thing that all the VI's have been blowing on about for the past few years starts to kill the market. The very time that the market will need support from demographics, the rug is pulled from under it.

The birth rate had dropped to about 52,000 in 1989 so that means that the number of Irish first time buyers entering the market each year will *drop* by 30% over the next 10 years.

*Irish Birth Rate - *Source (Council of Europe: [broken link removed])
1970 64382
1971 67551
1972 68527
1973 68713
1974 68907
1975 67178
1976 67718
1977 68892
1978 70299
1979 72539
1980 74064 Peak
1981 72158
1982 70843
1983 67117
1984 64062
1985 62388
1986 61620
1987 58433
1988 54600
1989 52018
1990 53044
1991 52718
1992 51089
1993 49304
1994 48255


----------



## StoppedClock

asterix said:


> I just find the bull arguments articulated by the young female interviewee and A. Hughes quite sound - strong economy, pope's children lining up to buy, strong immigration levels - reasonably convincing when sounded off against the bearish line adopted by R. Curran. I suppose I find the soft landing argument more plausible than the property crash line but of course I could be wrong


 
Any chance you might articulate these in my _The Elusive Soft Landing_thread which asks for credible arguments to support the soft landing theory? So far I have had 77 views and not one response!!

On a different note just heard Jim Power on Newstlalk, I actually had to look at the dial to verify that it really was he and I was indeed at 106 so shocked was I by his  (I won't go as far as to say bearish) realistic comments.  He corrected himself from saying "if there is a slowdown" to "when there is a slowdown" and admitted that it looked highly unlikely that there would be any changes to stamp duty, anyway the masses listening to it will certainly be aware soething is afoot.

I wonder if the "Economist for Hire" brigade Hughes, McGlaughlin, Power, et al drew straws to see which patsy would hold the line while the others switched tack to salvage some of their reputation, Hughes drew the short straw.


----------



## beattie

StoppedClock said:


> I wonder if the "Economist for Hire" brigade Hughes, McGlaughlin, Power, et al drew straws to see which patsy would hold the line while the others switched tack to salvage some of their reputation, Hughes drew the short straw.


 
A friend of mine works in one of the building societies and he told me that they know that Hughes spouts crap. It's a pity that alot of lemmings lap up his 'advice'


----------



## DeBarr

For what it’s worth: 4 houses went for sale on our estate in the last month to 6 weeks….

Two detached four beds (side by side)……
One semi-detached 4 bed
One extended semi-detached 3 bed.

All went Sale Agreed last week. The 3 bed was sold in 48 hours for a strong price above the asking price (which I thought was very high). I asked the EA handling the sale why it went so quick and they did say it was exceptional……


----------



## ecstatic

Well i for one dont believe for a second the vacancy rate of 15% touted by this and many said subject experts when it comes to accomodation in dublin.

Yesterday i uploaded an apartment in city centre to daft and within 3 hours it had 500 views. Recieved around 35 people who wanted to look at the apartment. Had it rented out to the first two people to look at it at seven o clock last night.

I think these vacancies must only exist in leitrim section 23's cause people are crying out for accomodation in dublin.

My 2 cents and too cap it off i am a bear so figure the above!


----------



## ecstatic

If i had 10 apartments yesterday they would have been instantly rented this is not the same scenario in other cities not by a longshot...

IE: London..


----------



## edo

> Quote:
> Originally Posted by *whathome*
> _She was Marian Finnegan from Sherry Fitzgerald - selling houses.
> And Austin Hughes is from IIB bank - selling mortgages._
> Exactly. One of those two telling us not to buy a house would be like the chairman of Ford telling us to give up our cars and take public transport.


Totally agree
Vested interests the whole way - but at least they had a "bear" on who at least was articulate and measured and IMO totally handed Austin Hughes his pants - that is course , if you can see past the usual vague platitudes and cliches that Hughes is repeating over ad nauseum - (if you keep saying sometime over and over again -folks will finally take it as gospel - its wearing a bit thin now)

 I look forward to the next time they decide to discuss the drugs problem that they will have the Colombian drug cartels and the Taliban on to give the vested interest perspective and some objective balance!!!



> Originally Posted by *partisan*
> _We are over exposed to the construction sector. At the same time Multi National investment here has made us the most productive workers in Europe. Even as costs have risen, it hasn't stopped them coming (Google, Amazon etc, etc). There also seems to be some uptake in local entrepreneurial activity. A surprisingly large proportion of people I know are starting companies at the at the moment. The business parks round Dublin are booming, and people seem to have no problem finding jobs._


*
the most productive workers in Europe - Total and utter rubbish*

how do supposedly intelligent people buy this bull!! - the most productive workers in the Irish Economy are in the Multinational and Export sector - yes thats correct - but when taking the country as a whole and the fact that the vast majority of jobs created since 2001 have been in the domestic/public sector - the rest of the ye lazy gits** bring the total productivity of the nation down to a middle rank - The most productive workers in Europe are the Germans and have been for ages , closely followed by the scandanavians - remember productivity isn't the total hours worked -its the value of that work in the end - German workers ,despite shorter working hours , longer holidays - accomplish far more of worth per hour than the Irish or the British- the supposedly more active economies of Europe - They are still the largest and biggest exporters in the world , invest as much in R/D every year as we do in houses lately, and still manage to have the cash to pay for the reconstruction of Eastern Europe (the Germans fund nearly 80% of the EU Budget), pay off inefficient french and southern European farmers , and still pay over 50% of Ireland structural upgrading - even tho We're "such a rich country"

** Present company excepted of course!


----------



## ajapale

Edo,

Please refrain from using self censored expletives on AAM.

Try to keep on topic. The state of the general economy can be discussed in this other thread.

aj


----------



## edo

> Edo,
> 
> Please refrain from using self censored expletives on AAM.
> 
> Try to keep on topic. The state of the general economy can be discussed in this other thread.
> 
> aj



Fair enough on the language

However I totally disagree with you in relation to the content - the housing market and the economy are siamese twins in Ireland at the moment - I was just replying to a point made earlier justifying a postive position on market sentiment - I didn't notice them being censured.


----------



## StoppedClock

Ok, _The Elusive Soft Landing_ thread has been shut down, (should be in another thread apparently)

So I had 105 views and no one responded can we therefore conclude that no one believes that this is a credible option?


----------



## whathome

Fredser said:


> Dear Mr. Myhome.ie,
> 
> Please increase your results default upper limit of 150 to a more user-friendly figure so avid voyeurs of your wonderful site can more easily see true inventories for particular areas.
> 
> Regards
> 
> Fredser


 
Looks like they acted on your request!!! 
Due to record inventory in the market, MyHome have changed their system and increased the area limit from 150 to 300.

236 for sale in Lucan
[broken link removed]

163 for sale in Swords:
[broken link removed]


----------



## conor_mc

StoppedClock said:


> Ok, _The Elusive Soft Landing_ thread has been shut down, (should be in another thread apparently)
> 
> So I had 105 views and no one responded can we therefore conclude that no one believes that this is a credible option?


 

Why not start a thread about your _The Elusive Soft Landing_ thread, see who agrees with you?


----------



## topman

Morning all.

I did see Prime Time last night, it was interesting viewing. I think people are viewing all this house purchasing in the investors eyes, especially on this thread. What if prices slide, what if they continue to grow at previous rates etc. The market is under pinned by the FTB. There is a strong desire in this country to own the home in which you live. FTB were holding out with the pronouncements of Michael MCDowell.Brian Cowan has now put these firmly to bed. Also ECB rates have gone up over the past year which has increased the proportion of purchasers income on repayments. These repayments are still managable with perhaps one more to come. I don't think there are many contributors on this thread who have kids and just want a home to call their own.


----------



## whathome

topman said:


> I don't think there are many contributors on this thread who have kids and just want a home to call their own.


 
That's quite a sweeping statement and even if it was true, what has that got to do with an individuals ability to debate "Current public sentiment towards the housing market"?  Should we limit expression of opinion to parents that own or want to own their own home? I'm a home-owning parent but that doesn't influence my opinion on the property market.


----------



## room305

partisan said:


> If house prices were at value (I think they are currently overvalued by at least 15% but probably (hopefully!) not much more than 25%) - 7% would sound reasonable. The economy is growing at over 5% (this year), GNP growth is outpacing GDP growth for the first time in a very long time. That means there should be around 5% more wealth in the local economony, add in inflation (decrease in the real value of money), forget about current sentiment and price levels and 7% seems possible!



You're mistaking price inflation with wage inflation. Only one of these matters when it comes to house prices.

Are wages going to increase at a rate of 7% per-year?


----------



## topman

Not at all WHATHOME. I'm just making the point that homes are not viewed as commodities to be bought and sold when markets rise and fall  by every one. This opinion is not represented on this thread.


----------



## whathome

topman said:


> Not at all WHATHOME. I'm just making the point that homes are not viewed as commodities to be bought and sold when markets rise and fall by every one. This opinion is not represented on this thread.


 
Most posters here are discussing the property market. I think you underestimate the ability of people on this thread to differentiate between commodity and property markets.


----------



## cik

topman said:


> There is a strong desire in this country to own the home in which you live. FTB were holding out with the pronouncements of Michael MCDowell.Brian Cowan has now put these firmly to bed. Also ECB rates have gone up over the past year which has increased the proportion of purchasers income on repayments. These repayments are still managable with perhaps one more to come. I don't think there are many contributors on this thread who have kids and just want a home to call their own.


 
OK... long time reader, first (and maybe only) time poster - I really have to reply to the above...
Disclaimer - We have a young family, have a very strong double income and have good savings so have means to buy but...

have a look at this place, there is insanity, insanity squared and then there are Dublin property prices 

there is only one thing to consider if you are a bull, do really think that there is such a thing as too high a price?  it seems many people believe there is actually no price too high, if that is the case we arent in a bubble we have left the realm of economics and have gone to the mad house
because if you cant understand the basic concept of overpaying - ie no matter how much you pay now it isnt a bad price because sooner or matter your property will be worth alot more - then you need to totally relearn economics basic principles

maybe Im a bit late with this post, people are copping on that property isnt a one-way elevator to your dreams but probably dont yet understand the financial weapons of mass destruction that have proliferated willynilly here and I dont think people realise how far prices are going to fall and how long this pain is going to last

the supply figures speak for themselves, there is actually no need for anyone to scream 'sell sell sell for godsake sell before its too late'


----------



## Eirmail

whathome said:


> Most posters here are discussing the property market. I think you underestimate the ability of people on this thread to differentiate between commodity and property markets.


 
I think the property market is behaving more and more like a commodity market because Irish people are treating it more and more like a commodity market.


----------



## cik

topman said:


> There is a strong desire in this country to own the home in which you live. FTB were holding out with the pronouncements of Michael MCDowell.Brian Cowan has now put these firmly to bed. Also ECB rates have gone up over the past year which has increased the proportion of purchasers income on repayments. These repayments are still managable with perhaps one more to come. I don't think there are many contributors on this thread who have kids and just want a home to call their own.


 
OK... long time reader, first (and maybe only) time poster - I really have to reply to the above...
Disclaimer - We have a young family, have a very strong double income and have good savings so have means to buy but...

have a look at this place, there is insanity, insanity squared and then there are Dublin property prices 

there is only one thing to consider if you are a bull, do really think that there is such a thing as too high a price? it seems many people believe there is actually no price too high, if that is the case we arent in a bubble we have left the realm of economics and have gone to the mad house
because if you cant understand the basic concept of overpaying - ie no matter how much you pay now it isnt a bad price because sooner or matter your property will be worth alot more - then you need to totally relearn economics basic principles

maybe Im a bit late with this post, people are copping on that property isnt a one-way elevator to your dreams but probably dont yet understand the financial weapons of mass destruction that have proliferated willynilly here and I dont think people realise how far prices are going to fall and how long this pain is going to last

the supply figures speak for themselves, there is actually no need for anyone to scream 'sell sell sell for godsake sell before its too late'


----------



## miju

topman said:


> I don't think there are many contributors on this thread who have kids and just want a home to call their own.


 
well heres one contributor right here , i dont own a house but i do live in rented apt that is my home and won't be buying into this market for a LOOOONNNNG time as will none of my friends either until some sanity returns]

and apart form anything else the majority of the speculative nature in this bubble was caused by "normal joe soaps" who live in one home become amateur speculative investors


----------



## topman

I think you under estimate most posters ability to read view points and not get their back up, but some expressing an opinion.


----------



## hmmm

topman said:


> Not at all WHATHOME. I'm just making the point that homes are not viewed as commodities to be bought and sold when markets rise and fall  by every one. This opinion is not represented on this thread.



You're right, but you're only talking about yourself (and admittedly a fairly large block of Irish people), not everyone. For this group, if you had to pay 10 million to get a house in Darndale they would, because they absolutely have to _own_ a house. It's verging on mania.

So yeah, when on this thread we shake our heads at the nonsense prices have reached, we realise a large part is driven by this need to own group who have no sense of value. While it is a large block of purchasers, it's not the only block however. Investors include some of the need to own group, but mostly they are driven by greed (nothing wrong with that) and most rational ones will exit the market when they see a peak. There's also plenty of people also who see owning versus renting as being a simple matter of economics.


----------



## Duplex

Anyone not familiar with investment psychology might want to take a look at this short explanation (see link below).     


[broken link removed]


----------



## baby_tooth

ecstatic said:


> Well i for one dont believe for a second the vacancy rate of 15% touted by this and many said subject experts when it comes to accomodation in dublin.
> 
> Yesterday i uploaded an apartment in city centre to daft and within 3 hours it had 500 views. Recieved around 35 people who wanted to look at the apartment. Had it rented out to the first two people to look at it at seven o clock last night.
> 
> I think these vacancies must only exist in leitrim section 23's cause people are crying out for accomodation in dublin.
> 
> My 2 cents and too cap it off i am a bear so figure the above!


 

ahh, but what is your rent compared to costs...

whats your return, adjusted for inflation of 3.2% and net return that is.


----------



## Humdinger

I have tenants leaving an investment property that I have recently sold (I have gone bearish) - they are finding it impossible to get a similar house to rent - its a standard 3 bed semi in West Dublin.
Their feedback is that every rental property that they view has alot of people interested or is already gone. They are very surprised and almost panicking. 
Does anyone know whether this is an isolated case or is there a squeeze on rental accomodation.


----------



## gearoidmm

There has been a large fall in the number of apatments/houses for rent in Dublin in the past few months.  This is driving up rents and rental yields.  The next DAFT report will show a large increase in Dublin rents over this year.

Friends of mine trying to rent at the moment are having huge trouble finding anything affordable in Dublin City Centre and any good apartments are being snapped up immediately.  This is as big a fundamental change in the lettings market as we have seen in the sales market in the past while.  Difficult to know what effect this will have on sentiment.  If rents are increasing, it might delay investors from selling in the hopw that they will achieve better yields soon.  Also, it will drive more people into the market if they can't find a place to rent.


----------



## topman

*10:30 Friday October 20th 2006*








The Tanaiste, Michael McDowell, has denied suggestions of a rift with Finance Minister Brian Cowen over the issue of stamp duty on houses. 
Last month, Mr McDowell said he was in favour of abolishing the tax.

However, Mr Cowen ruled out such a move yesterday, saying it was not his job to interfere in the housing market.

Asked about the matter in Dublin today, Mr McDowell said he was not talking about the budget, but was laying out stamp-duty proposals as part of the PDs' manifesto for the next election.


----------



## ecstatic

There is a huge demand for rental gear rents up 300 euros in 3 months in dublin 2.

I rented a place out in 3 hours yesterday.

Im bearish but explain that???


----------



## Sidewinder

Humdinger said:


> Does anyone know whether this is an isolated case or is there a squeeze on rental accomodation.



Only to be expected. There are, literally, many thousands of investor landlords who have done exactly the same thing as you in the last 6 weeks. Put rental investment properties on the market. This will cause a short-term drought in rental supply and a corresponding hike in rents.

All depends on where the market goes from here. If prices collapse, a lot of landlords might decide to keep the house, dig in for the long-term, and put it back out for rent. Others will sell to whatever fool they can get to buy in a declining market - and some of those buyers will be investors, and it'll find it's way back to rental. Or some might be bought by FTB's, reducing rental demand.

Then you might have to factor in a possible dead-cat-bounce in April.

The whole market, sales and rentals, will be very chaotic for the next 9 months but will then settle into a long-term trend for 5+ years after that. Whether that long-term trend is the fabled Soft Landing of stagnant/slowly rising prices and stable rents; or a long real decline in prices and rents, is still under debate.

Personally I think we're looking at a repeat of the Japanese experience.


----------



## zac

Humdinger said:


> I have tenants leaving an investment property that I have recently sold (I have gone bearish) - they are finding it impossible to get a similar house to rent - its a standard 3 bed semi in West Dublin.
> Their feedback is that every rental property that they view has alot of people interested or is already gone. They are very surprised and almost panicking.
> Does anyone know whether this is an isolated case or is there a squeeze on rental accomodation.



yes, I have heard similar stories ppl not being able to find suitable accomodation for rent, in dublin and in co. kildare.

Properties available on rent all over ireland have went down from 5000 to 4000 in last 3 months. (using daft data) Most of the drop is in co dublin though.


----------



## whathome

gearoidmm said:


> If rents are increasing, it might delay investors from selling in the hopw that they will achieve better yields soon. Also, it will drive more people into the market if they can't find a place to rent.


 
This is true but if as you say it has been ongoing for the past few months then the effect would already be stimulating the sales market to an extent. It's also likely to be short term as landlords dump their property on the market.


----------



## Bedsit

The number of houses on sale on DAFT has quietly slipped past the 21000 mark in the last day or so.


----------



## Humdinger

We saw the same impact when the Bacon reports were implemented - different dynamic of course but the bottom line was supply of rental properties fell dramatically and rents increased significantly. 

It may take 6-12 months to work thru as mentioned in the post above - however, it looks like renters are going to be paying more.


----------



## dontaskme

room305 said:


> You're mistaking price inflation with wage inflation. Only one of these matters when it comes to house prices.
> 
> Are wages going to increase at a rate of 7% per-year?


 
Price inflation matters because the ECB makes interest rate decisions based on the the consumer price index. I know that the Irish rate of inflation may only be a 1% weight on their index, but there is probably some correlation with inflation in other European countries.


----------



## polar

We find our own new tenants for our rented house in Cork and when we advertised this week, were astounded at the level of interest in the room and were able to let it immediately. We've let rooms three times this year and as late as August, nearly needed to drag people in off the street to take a look at it - supply was so high and rents were falling. Since then, however, the rental accommodation supply has evaporated and rents will presumably rise accordingly.

I don't have to look far for the drop in supply, mind you. The landlord owns another house in the same estate which he has put on the market, after giving his tenants there notice to quit. Dumping investment property, indeed.


----------



## daveirl

topman said:


> FTB were holding out with the pronouncements of Michael MCDowell.Brian Cowan has now put these firmly to bed. Also ECB rates have gone up over the past year which has increased the proportion of purchasers income on repayments.


This thread has repeatedly shown how asking prices were dropping and supply was increasing long before MMcD said anything.


----------



## partisan

room305 said:


> You're mistaking price inflation with wage inflation. Only one of these matters when it comes to house prices.
> 
> Are wages going to increase at a rate of 7% per-year?



You are correct and it's _not_ wage inflation! If inflation outpaces house price growth it reduces the cost of purchasing the asset. If you have money available to purchase the asset you could buy it at a reduced cost compared with the previous year. If you don't have the price of the asset available, a lender could lend it to you at reduced cost. The asset relative to other assets has become more affordable.
Increased inflation means you can sell the same goods and services (which includes your labour) at an increased nominal price. If you can't negoitate that increased price for the same services (and note, year on year, as you learn your productivity should improve so you are actually providing improved services) - you are being short changed by your employer. Why would you do business with someone who rips you off??


----------



## BigM

Humdinger said:


> It may take 6-12 months to work thru as mentioned in the post above - however, it looks like renters are going to be paying more.


A few people in my office are also having trouble finding suitable rental accommodation - in Dublin btw. Obviously investors are getting out (or trying to!). 
I sincerely hope we get a dead cat bounce early next year - I'm selling my rental property once the current lease is up in Jan.

As for the ECB, UBS have changed their outlook based on ECB-member comments:
"We detect a change in tone from the most important members of the ECB Council that could signal a pause in rate hike [in 2007]"


----------



## whathome

Has anyone else noticed a big increase in the number of new property developments advertised the radio lately?


----------



## sandymount

whathome said:


> Looks like they acted on your request!!!
> Due to record inventory in the market, MyHome have changed their system and increased the area limit from 150 to 300.
> 
> 236 for sale in Lucan
> [broken link removed]
> 
> 163 for sale in Swords:
> [broken link removed]



They probably should have upped it to 500, Lucan is now 239. Whats the betting it reachs 300 before Christmas.


----------



## StoppedClock

partisan said:


> You are correct and it's _not_ wage inflation! If inflation outpaces house price growth it reduces the cost of purchasing the asset. If you have money available to purchase the asset you could buy it at a reduced cost compared with the previous year. If you don't have the price of the asset available, a lender could lend it to you at reduced cost. The asset relative to other assets has become more affordable.
> Increased inflation means you can sell the same goods and services (which includes your labour) at an increased nominal price. If you can't negoitate that increased price for the same services (and note, year on year, as you learn your productivity should improve so you are actually providing improved services) - you are being short changed by your employer. Why would you do business with someone who rips you off??


 
Eirther you are very poor at explaining yourself or you do not know what you are talking about but this last post is nonsense.


----------



## ajapale

Partisan
Please take time to ensure that your posts make sense.  Also note Posting Guideline . "Current public sentiment towards the housing market?"


----------



## room305

partisan said:


> You are correct and it's _not_ wage inflation! If inflation outpaces house price growth it reduces the cost of purchasing the asset. If you have money available to purchase the asset you could buy it at a reduced cost compared with the previous year. If you don't have the price of the asset available, a lender could lend it to you at reduced cost. The asset relative to other assets has become more affordable.
> Increased inflation means you can sell the same goods and services (which includes your labour) at an increased nominal price. If you can't negoitate that increased price for the same services (and note, year on year, as you learn your productivity should improve so you are actually providing improved services) - you are being short changed by your employer. Why would you do business with someone who rips you off??



Are you high on crack?

If wage increases outstrip house price increases, then homes become more affordable over time. If the reverse happens, then homes become less affordable. Austin Hughes and his band of merry advisors think house prices will increase at a "normal" 7% or so for the next few years. Since homes are barely affordable now, for this to happen and for homes to remain even at today's level of affordability, wages would need to increase at around 7% a year.


----------



## tententwenty

BigM said:


> A few people in my office are also having trouble finding suitable rental accommodation - in Dublin btw. Obviously investors are getting out (or trying to!).


It sounds like they are getting out while the FTB market tries to rent a room to sit out the collapse. They have to sleep somewhere, after all. As for higher prices, its quite likely that the same landlords putting the prices up are recent BTLs, and are trying to cover the rising interest rates on their poor investment. There are a lot of factors coming together here, but they'll find out pretty sharply just how related to wages rents are... Unless the government wants to explain rackrenting, on the doorsteps...


----------



## partisan

StoppedClock said:


> Eirther you are very poor at explaining yourself or you do not know what you are talking about but this last post is nonsense.



Sorry, I'll try again.

If you have 100 euros today and inflation is 15% pa, in one years time your 100 euros is worth 85 euros today. If that makes sense?  In other words if someone promises you 100 euros next year it is roughly equivalent to 85 euros today. 
If a house is 500,000 euros today it's net present value in a years time (it's value in a years time, today - based on inflation) is 425,000. Someone has to pay for that asset and it just got cheaper. Wage inflation has little to do with it.


----------



## StoppedClock

partisan said:


> Sorry, I'll try again.
> 
> If you have 100 euros today and inflation is 15% pa, in one years time your 100 euros is worth 85 euros today. If that makes sense? In other words if someone promises you 100 euros next year it is roughly equivalent to 85 euros today.
> If a house is 500,000 euros today it's net present value in a years time (it's value in a years time, today - based on inflation) is 425,000. Someone has to pay for that asset and it just got cheaper. Wage inflation has little to do with it.


 
Thankyou for the clarification, now I know you just don't know what you are talking about.  
If my 30k salary is _worth _21.5k (as I have had no pay rise) how is it cheaper? It is still 16.6 times my salary!!


----------



## room305

partisan said:


> Sorry, I'll try again.
> 
> If you have 100 euros today and inflation is 15% pa, in one years time your 100 euros is worth 85 euros today. If that makes sense?  In other words if someone promises you 100 euros next year it is roughly equivalent to 85 euros today.
> If a house is 500,000 euros today it's net present value in a years time (it's value in a years time, today - based on inflation) is 425,000. Someone has to pay for that asset and it just got cheaper. Wage inflation has little to do with it.



If in this scenario, your annual salary is €35k and this doesn't increase in line with inflation, how exactly did the house become cheaper to purchase?


----------



## partisan

room305 said:


> If in this scenario, your annual salary is €35k and this doesn't increase in line with inflation, how exactly did the house become cheaper to purchase?



The body of money in the economy tied up in assets far outweighs the investable earnings of workers in a single year. But the same logic applies, if a workers salary now is 35k and in a years time her boss is paying her  the same it is the equivalent of 29.97 and she really needs to take that up with her boss. Our hypothetical friend is losing out relative to the rest of the economy she is in competition for resources with.
But generally wages do rise with inflation (and outpace it when productivity grows) - if they don't it means labour is becoming cheaper and it represents a great opportunity to invest your own capital in a business (thus increasing employment and hopefully helping drive up wages)!


----------



## Duplex

I think that at this juncture first time buyers are supposed to arrive and buy all the properties that speculators no longer want because they are no longer going up in value.  That was the plan, the exit strategy when the top came in it seems.


----------



## miju

Duplex said:


> I think that at this juncture first time buyers are supposed to arrive and buy all the properties that speculators no longer want because they are no longer going up in value. That was the plan, the exit strategy when the top came in it seems.


 
at which point the investors realise that the greater fool that they were to relying on to exit the market has been them all along.....oh the irony


----------



## Duplex

partisan said:


> The body of money in the economy tied up in assets far outweighs the investable earnings of workers in a single year. But the same logic applies, if a workers salary now is 35k and in a years time her boss is paying her the same it is the equivalent of 29.97 and she really need to take that up with her boss. Our hypothetical friend is losing out relative to the rest of the economy she is in competition for resources with.
> But generally wages do rise with inflation (and outpace it when productivity grows) - if they don't it means labour is becoming cheaper and it represents a great opportunity to invest your own capital in a business (thus increasing employment and hopefully helping drive up wages)!


 
I think that it would be nice if the world would pay us more for our labour but I'm afraid the global economy has decided that we are being paid handsomely enough.  We need to be more productive to earn more money which is hard to do when you loose manufacturing jobs at the rate we are.


----------



## Sidewinder

partisan said:


> But the same logic applies, if a workers salary now is 35k and in a years time her boss is paying her  the same it is the equivalent of 29.97 and she really need to take that up with her boss.[snip]..But generally wages do rise with inflation (and outpace it when productivity grows)



Ummm, partisan, no offence, but you must be either a) a student b) working in the public sector c) far too young to remember the 80s if you honestly believe any of that. You post is simply not a reflection of private sector reality, now or ever.


----------



## Sidewinder

miju said:


> at which point the investors realise that the greater fool that they were to relying on to exit the market has been them all along...


----------



## room305

partisan said:


> Our hypothetical friend is losing out relative to the rest of the economy she is in competition for resources with.



That's what inflation does. It robs you of your wealth by eroding the purchasing power of the money you are paid with.



partisan said:


> But generally wages do rise with inflation (and outpace it when productivity grows) - if they don't it means labour is becoming cheaper and it represents a great opportunity to invest your own capital in a business (thus increasing employment and hopefully helping drive up wages)!



Not anymore they don't*. The armies of workers in India and China couldn't care less about your inflation related difficulties and generally this is who your boss is competing with.

*Public service workers excepted.


----------



## StoppedClock

partisan said:


> The body of money in the economy tied up in assets far outweighs the investable earnings of workers in a single year. But the same logic applies, if a workers salary now is 35k and in a years time her boss is paying her the same it is the equivalent of 29.97 and she really needs to take that up with her boss. Our hypothetical friend is losing out relative to the rest of the economy she is in competition for resources with.
> But generally wages do rise with inflation (and outpace it when productivity grows) - if they don't it means labour is becoming cheaper and it represents a great opportunity to invest your own capital in a business (thus increasing employment and hopefully helping drive up wages)!


 
So in you own inimitable way you are saying that wage inflation is what counts.  Excellent; we are all in agreement.  Time for lunch.


----------



## whathome

Flipping hell...

It looks like there are three flippers now trying to get out of this development, Beechwood Court in Stillorgan:
[broken link removed]=
[broken link removed]=

And this one has had to drop their price to €550,000
[broken link removed]=
down from €560,000...
www.daft.ie/134285 
which was down from €575,000...
[broken link removed]=

While the developer still struggles on at €590,000
[broken link removed]=


----------



## Duplex

Just a note on wage inflation in the construction sector (the largest part of the private sector). Its running at an annual rate of 3.7% CPI is 4% (public service is about 6%). So effective wage deflation.


----------



## partisan

Sidewinder said:


> Ummm, partisan, no offence, but you must be either a) a student b) working in the public sector c) far too young to remember the 80s if you honestly believe any of that. You post is simply not a reflection of private sector reality, now or ever.



Definetely too young to have been working in the 1980's ;-) But if wage increases didn't correlate with inflation to some degree, even then, we'd be long bankrupt. Surely the Celtic-tiger era has lead to increased wealth ,overall, in our society? I don't want to be a cheer leader for it, I know an awful lot of people have been left behind. I was only making an economic point with regard to inflation. We live in a capitalist society and asset prices are going to reflect asset wealth in that society. If your wages don't keep up, and you can't afford to invest in other assets you'll be left behind. It's harsh, I don't like it, but I think that's the way it is and thinking otherwise may result in you being left behind yourself (how many of us challenge our bosses when our pay rises don't match or beat inflation? My attitude is, if they don't it's time to leave). And I suspect that given the sentiment  (the desire for cheap house prices & cheap rent) expressed on this board that most people are aware that's the kind of society we live in despite wishing it wasn't.


----------



## StoppedClock

partisan said:


> Definetely too young to have been working in the 1980's ;-) But if wage increases didn't correlate with inflation to some degree, even then, we'd be long bankrupt. Surely the Celtic-tiger era has lead to increased wealth ,overall, in our society? I don't want to be a cheer leader for it, I know an awful lot of people have been left behind. I was only making an economic point with regard to inflation. We live in a capitalist society and asset prices are going to reflect asset wealth in that society. If your wages don't keep up, and you can't afford to invest in other assets you'll be left behind. It's harsh, I don't like it, but I think that's the way it is and thinking otherwise may result in you being left behind yourself (how many of us challenge our bosses when our pay rises don't match or beat inflation? My attitude is, if they don't it's time to leave). And I suspect that given the sentiment (the desire for cheap house prices & cheap rent) expressed on this board that most people are aware that's the kind of society we live in despite wishing it wasn't.


 
What is your point?


----------



## miju

partisan said:


> Surely the Celtic-tiger era has lead to increased wealth ,overall, in our society?


 
it has in the older generations , there has been a massive transfer of wealth from young people to older people during the celtic tiger and the reason??? yer only man property



partisan said:


> It's harsh, I don't like it, but I think that's the way it is and thinking otherwise may result in you being left behind yourself (how many of us challenge our bosses when our pay rises don't match or beat inflation? My attitude is, if they don't it's time to leave). And I suspect that given the sentiment (the desire for cheap house prices & cheap rent) expressed on this board that most people are aware that's the kind of society we live in despite wishing it wasn't.


 
firstly , everyone in the world would like a cheap house to buy or rent (except of course for pro / spectulative investors) , it's not a sentiment unique to this thread

secondly, to flip what your saying , how about not investing and letting the greater fool get burned and even though your wages are lower than the people "ahead" of you, because you are in actual fact in real terms well ahead of the game when the bubble pops because while everyone else is drowning in the pool and reaching for a life belt your sitting idly by on the side sipping sangria and catching some sun watching in amazement 

it doesn't all work the one way you know


----------



## whathome

partisan said:


> And I suspect that given the sentiment (the desire for cheap house prices & cheap rent) expressed on this board


 
I think you might be getting confused between

a) Sentiment - which is how people feel about the state of the market now and in the future (that's what we are discussing)

and...
b) Desire or yearning for cheaper property - that is always the case for buyers. (which we are not discussing)


----------



## JayDub

Realistically, how much should a bank lend a couple earning €60k/year. The old lending rule 2.5 times first wage, 1.5 times second wage was chucked out the window years ago. If it was still in place the a couple on average industrial wage could not borrow more than €120k. Even if the bank would lend 4 times combined wages that would still be only €240k, considering the average house price in Dublin is over €400k. Plain and simple most are priced out of the property market.


----------



## Open_Window

BigM said:


> I sincerely hope we get a dead cat bounce early next year - I'm selling my rental property once the current lease is up in Jan.[in 2007]"




I've had Landlords try to end my lease before it is due to expire so they can sell. I am not sure what the postion is now, you might be able to break the contract if you give genuine reason allowed by law and are in fact lying then you can be prosecuted. 

All tenants are entitled to at least 4 years lease after 6 motnhs continuous occupancy, but ifyou are selling or moving yourself or a family member this does not apply.

However you better be telling the truth 

I think it is at least human to let you tenants se eout the lease and if they want to leave sooner then make it clear that you have no problem and you'll give them back their deposit pronto rather than forcing them out.

SO you might get them out of their own choice, Its very reasurring to know that they could start searching and if they find something before Jan they can leave sooner without negative finacial loss or duress. Its to your advantage.

As a tennat myself I am appalled at the private rental sector an the sicken disaster that is about to unfold.

Its amazing how quickly this collapse is moving.


----------



## partisan

miju said:


> firstly , everyone in the world would like a cheap house to buy or rent (except of course for pro / spectulative investors) , it's not a sentiment unique to this thread



I agree, but there is also a huge swell of negative sentiment towards our economy on this thread. I don't think it's rational analysis. I think it's emotional. People want to see a crash.



miju said:


> secondly, to flip what your saying , how about not investing and letting the greater fool get burned and even though your wages are lower than the people "ahead" of you, because you are in actual fact in real terms well ahead of the game when the bubble pops because while everyone else is drowning in the pool and reaching for a life belt your sitting idly by on the side sipping sangria and catching some sun watching in amazement
> 
> it doesn't all work the one way you know



There's absouletely no difference between that and making out like a bandit at others expense during a bull run. Neither are particularly desirable traits, but people will do both...



whathome said:


> I think you might be getting confused between
> 
> a) Sentiment - which is how people feel about the state of the market now and in the future (that's what we are discussing)
> 
> and...
> b) Desire or yearning for cheaper property - that is always the case for buyers. (which we are not discussing)



I think they're stongly linked in many posts on this thread. Maybe I'm misinterpeting others...


----------



## StoppedClock

Open_Window said:


> As a tennat myself I am appalled at the private rental sector an the sicken disaster that is about to unfold.
> 
> Its amazing how quickly this collapse is moving.


 
I think one of the main things that has kept housing from being a thorn in the Guberments side is while a lot of people were gaining by their property going up those that missed out could at least afford a nice place to rent.  

If in the short term** rents go up but sellers are sticky and prices stagnate people will have nowhere to live and this will become *the* issue leading up to the election.

**And it will be short term, see other thread


----------



## whathome

partisan said:


> People want to see a crash.


 
This comes up every few days.  Knowing there will be a crash, discussing it and finding it fascinating is not the same as wanting a crash.


----------



## room305

partisan said:


> ... if wage increases didn't correlate with inflation to some degree, even then, we'd be long bankrupt [snip]... If your wages don't keep up, and you can't afford to invest in other assets you'll be left behind. It's harsh, I don't like it, but I think that's the way it is and thinking otherwise may result in you being left behind yourself (how many of us challenge our bosses when our pay rises don't match or beat inflation? My attitude is, if they don't it's time to leave).



What you are talking about is a wage/price spiral.

Business is global, inflation is local. There is absolutely no guarantee your boss can afford to pay you more than inflation (which will itself only fuel inflation anyway) or he may go out of business himself.

Your attitude suggests some harsh realities lie await.


----------



## JayDub

http://www.unison.ie/stories.php3?ca=9&si=1709909&issue_id=14793
"I need to earn €50,000 just to cover the costs of childcare and the mortgage - that's before we even start spending money to live," she said.

That about sums it all up. Average families are just getting by, what happens when there is another spate of interest rates increases. People will try sell their homes, move into rented accommodation, which might already be happening as there is a scarcity of rentals on the market.


----------



## whathome

partisan said:


> I think they're stongly linked in many posts on this thread. Maybe I'm misinterpeting others...


 
That's ridiculous - Sentiment, and buyers yearning for cheaper property are not strongly linked. If that were true, sentiment would NEVER change. Buyers always want cheaper property. Have you ever heard of a buyer saying "If only I could pay a bit more for that house I'd be happy"?

Sentiment does change however, people go from thinking "I better buy now before prices go up" to "I'm going to hold off, prices look like they might fall". Before and after that change in sentiment, they'll always be yearning for cheaper property.


----------



## Duplex

JayDub said:


> Realistically, how much should a bank lend a couple earning €60k/year. The old lending rule 2.5 times first wage, 1.5 times second wage was chucked out the window years ago. If it was still in place the a couple on average industrial wage could not borrow more than €120k. Even if the bank would lend 4 times combined wages that would still be only €240k, considering the average house price in Dublin is over €400k. Plain and simple most are priced out of the property market.


 

As Irish Banks package up most Irish mortgage debt and sell on the money market as Residential Mortgage Backed Securities. The amount that the banks can lend will depend on the money markets appetite for Irish mortgage debt.   As lending standards are super relaxed and the risk profile of RMBS seems to be rising globally I cant see the banks being able to flood much more money into a highly speculative market. In fact we may see a squeeze on credit.


----------



## gurramok

ecstatic said:


> Well i for one dont believe for a second the vacancy rate of 15% touted by this and many said subject experts when it comes to accomodation in dublin.



Have you read the thread?

15% vacancies relate to empty properties countrywide, not rentals.

ie..speculators sitting on them with capital appreciation, they have not been rented out.
When cap. appreciation goes which its been doing now, whats the point of them holding on to them in a falling market and lose their profit?
They are dumping them onto the sales market along with landlord investors who were there to make a quick buck hence shortage of rental accomodation as you describe.


----------



## CelloPoint

Open_Window said:


> Its amazing how quickly this collapse is moving.



22k odd houses for sale on daft today. Can anybody predict when this definite acceleration in inventory will slow down/stop? Any chance of a stats update WhizzBang?


----------



## ajapale

Duplex said:


> Double ditto.


Please make meaningful contributions to the debate.


----------



## partisan

whathome said:


> That's ridiculous - Sentiment, and buyers yearning for cheaper property are not strongly linked. If that were true, sentiment would NEVER change. Buyers always want cheaper property. Have you ever heard of a buyer saying "If only I could pay a bit more for that house I'd be happy"?
> 
> Sentiment does change however, people go from thinking "I better buy now before prices go up" to "I'm going to hold off, prices look like they might fall". Before and after that change in sentiment, they'll always be yearning for cheaper property.



You make a fine intellectual point. What I meant was that a lot of the posts have emotional underpinnings. Either my English is terrible, or people like to argue with me. Maybe it's both ;-)


----------



## whathome

partisan said:


> What I meant was that a lot of the posts have emotional underpinnings.


 
OK - I understand what you're saying - but we are all people (I think) unless AAM have a few robots making posts


----------



## random2006

Dont panic the correction is over, we had our soft landing and prices are taking off again. I was talking to somebody today who was talking to somebody who works in daft and the price of houses has started to go up again, it was just a temporary correction after the huge increase in prices in the spring. 
House price increases will continue to rise at 5% above the rate of the economic growth (i.e. 12% next year!!!)


----------



## BigM

Open_Window said:


> I've had Landlords try to end my lease before it is due to expire so they can sell. I am not sure what the postion is now, you might be able to break the contract if you give genuine reason allowed by law and are in fact lying then you can be prosecuted.


 
You can end the lease early as long as you put the house on the market within 3mths. If you decide not to sell the original tenants have to be given 1st refusal of the new letting.

I don't want to end the lease early - I'm not going to kick my tenants out of their home just in time for Christmas! And there's not much point anyway - even with just the 1mth notice I'd be putting the house on the market in December which is not exactly prime selling season.

But I will let them know next month what my plans are so they'll have almost 3mths to find somewhere else (or even make me an offer - who knows?)

It was the realisation that a purchaser (if there are any left!!) on above-average salary would have to pay around 10times his/he salary (or 5x joint) to live in an ex-council house that persuaded me that the market has indeed peaked. 
What the commmentators refuse to acknowledge when they go on about 'rate hikes pricing FTBs out of the market' is that it is the market that's pricing them out, not the IRs. It's very simple really:
FTBs cannot afford to buy => prices must come down
not
FTBs cannot afford to buy => must make money cheaper/more accessible


----------



## whathome

random2006 said:


> Dont panic the correction is over, we had our soft landing and prices are taking off again. I was talking to somebody today who was talking to somebody who works in daft and the price of houses has started to go up again, it was just a temporary correction after the huge increase in prices in the spring.
> House price increases will continue to rise at 5% above the rate of the economic growth (i.e. 12% next year!!!)


 
For a second there, I thought you were trying to be serious


----------



## howstrange

random2006 said:


> Dont panic the correction is over, we had our soft landing and prices are taking off again. I was talking to somebody today who was talking to somebody who works in daft and the price of houses has started to go up again, it was just a temporary correction after the huge increase in prices in the spring.
> House price increases will continue to rise at 5% above the rate of the economic growth (i.e. 12% next year!!!)



Oh no! Better jump in now and buy that house i saw that dropped €50k during the wk before they add it back on to the selling price again!!!


----------



## whathome

Duplex said:


> ajapale you will have to remind me when/where I made that post.


 
http://www.askaboutmoney.com/showpost.php?p=237494&postcount=40  (found it using Google)

that was in July


----------



## Open_Window

Duplex said:


> Just a note on wage inflation in the construction sector (the largest part of the private sector). Its running at an annual rate of 3.7% CPI is 4% (public service is about 6%). So effective wage deflation.




So Austin is gonna be pluggin those mortgage packages to the public sector to cover next years glorious 7%

It was noted by the other speaker if they are 4% out in their prediction its a disaster, and remember this, they got last year HPI totally wrong if I rember by something similar to 4%, in that it was higher so they really can't tell. Expensive guess merchants they are.


----------



## random2006

whathome said:


> For a second there, I thought you were trying to be serious



The comments from daft were said in seriousness (aparantly), and the person who said them to me believes them to be very true and sensible (because there wont be a crash/decrease in prices!) but I dont believe them to be necessarily true or even close which is why i put in the !!


----------



## whathome

random2006 said:


> The comments from daft were said in seriousness (aparantly), and the person who said them to me believes them to be very true and sensible (because there wont be a crash/decrease in prices!) but I dont believe them to be necessarily true or even close which is why i put in the !!


 
"I heard it from somebody who was talking to somebody" immediately relegates it to rubbish IMO

http://en.wikipedia.org/wiki/Telephone_game


----------



## baby_tooth

BigM said:


> You can end the lease early as long as you put the house on the market within 3mths. If you decide not to sell the original tenants have to be given 1st refusal of the new letting.
> 
> I don't want to end the lease early - I'm not going to kick my tenants out of their home just in time for Christmas! And there's not much point anyway - even with just the 1mth notice I'd be putting the house on the market in December which is not exactly prime selling season.
> 
> But I will let them know next month what my plans are so they'll have almost 3mths to find somewhere else (or even make me an offer - who knows?)
> 
> It was the realisation that a purchaser (if there are any left!!) on above-average salary would have to pay around 10times his/he salary (or 5x joint) to live in an ex-council house that persuaded me that the market has indeed peaked.
> What the commmentators refuse to acknowledge when they go on about 'rate hikes pricing FTBs out of the market' is that it is the market that's pricing them out, not the IRs. It's very simple really:
> FTBs cannot afford to buy => prices must come down
> not
> FTBs cannot afford to buy => must make money cheaper/more accessible


 

here here.

and their ability to pay is ever decreasing due to inflation being above wage pegging.

and inflation here is not the bandied about hicp figure of 3.2% which accounts for a basket of goods, but on neccisity inflation which is alot alot higher.


----------



## Duplex

whathome said:


> http://www.askaboutmoney.com/showpost.php?p=237494&postcount=40 (found it using Google)
> 
> that was in July


 

Thanks whathome.  Maybe ajaple can explain why he trawled my posts to highlight this one in particular?


----------



## Open_Window

whathome said:


> This comes up every few days.  Knowing there will be a crash, discussing it and finding it fascinating is not the same as wanting a crash.



Oh this old chestnut, lets not talk its bad, voddo talk bad, oh no...

*I don't want a crash, I don't want a bubble - who wants either?? No one in heir right mind*

Both are super bad. Look at the thread the grief its causing.

Yet the Capital system we swim in DEMANDS that there be boom & bust cycles.

Noone ever asks us what do we want the system doesn't have a facility to ask questions of its subject/entities. So we talk aboutu "market sentiment" which seem only ever to be very clear and most exact in extreme circumstances like now. Terrible way to do business! Terrible way to live....




> Originally Posted by topman
> 10:30 Friday October 20th 2006http://www.unison.ie/images/tran_pix.gifhttp://www.unison.ie/images/tran_pix.gif
> 
> Asked about the matter in Dublin today, Mr McDowell said he was not talking about the budget, but was laying out stamp-duty proposals as part of the PDs' manifesto for the next election.




So thats settles that. Another one to check of the ever growing litany of excuses (it was never a real contributing factor in the first place), so now what is holding the FTBs back now then eh!


----------



## Arthur Daley

I bought a year ago on the basis that i just got fed up being bear for years, (like back to 97!!!). The reason I switched opinion was that a) I just got to 'that age' when you're expected to own a house and b) the Vested Interests led by the govt. are so prevalent and dominant that trying to fight it was a pointless game.

Now that a definite switch in sentiment has occured, and that 2nd hand supply has increased dramatically what strategies do Vested Interests have? Surely the tap of supply has to be turned off as they attempt this so called soft landing. I expect new starts to drop off starting in Q3 this year. Will this be enough? I expect a fight from EA's, lenders, govt. beyond just sending stooges into TV & radio studios........


----------



## BigM

Open_Window said:


> So thats settles that. Another one to check of the ever growing @excuse@ list excuse list (it was never a real contributing factor in the first place), so now what is holding the FTBs back eh!


 
I'm not so sure. The only thing that Cowen has completely ruled out is the abolishment of stamp duty (a la PD's kite-flying). IMHO Cowen can legitimately tinker with SD levels/rates for FTBs and argue that it is not 'interfering with the market'. The argument would run along the lines of... the SD levels/rates on 2nd hand houses for FTBs was distorting the market. This change will correct that distortion and give the poor young folk of Ireland a chance to achieve their dream of owning their own shoebox, I mean home....
Just my opinion - roll on December to find out!


----------



## bogwarrior

BigM said:


> I'm not so sure. The only thing that Cowen has completely ruled out is the abolishment of stamp duty (a la PD's kite-flying). IMHO Cowen can legitimately tinker with SD levels/rates for FTBs and argue that it is not 'interfering with the market'. The argument would run along the lines of... the SD levels/rates on 2nd hand houses for FTBs was distorting the market. This change will correct that distortion and give the poor young folk of Ireland a chance to achieve their dream of owning their own shoebox, I mean home....
> Just my opinion - roll on December to find out!



you could be onto something there.  If he said he was looking at modifying the stamp duty situation, estate agents may aswell have gone on holidays until the first week of Dec as nobody in their right mind would purchase property in the meantime. 

I don't think he'll get rid of it, but I'd expect some tinkering - enough to let MickeyMcD claim some credit (perhaps payback for eventually supporting Bertie in his recent troubles).


----------



## StoppedClock

Arthur Daley said:


> I expect new starts to drop off starting in Q3 this year. Will this be enough? I expect a fight from EA's, lenders, govt. beyond just sending stooges into TV & radio studios........


 
EA's, Devlopers, and Lenders wanted to see rising prices forever but even the least realistic of them (Miriam?) realise that it cannot go on for ever so even though they would prefer not to admit it all of then knew it would eventually turn.  

What should be interesting now is to compare what the different sectors _next best scenario _would be given that the tide has turned/is turning.

EA's : anything as long as stuff sells, if ALL investors sell their stock at even half current market value they will still make record profits.  I could see some of these guys turning uber -bear once they believe the tide has turned.  They probably have it figured that say 30%** of the market needs to change hands before all those who are going to sell have sold so best to do it in as short a time as possible and get back into ramping the market again.

Devlopers: Would like it to remain at least static so they can continue making record profits but if it falls they will complete their current builds and shake their bling bling booty back to Marbela, ocasionally coming back to buy Landbanks for the next hoorah in a few years.

Lenders : Senior Management retire swiftly to play golf, constantly scoff at the new managers saying they are making a balls of it, pass on as much loss to the shareholders until finally the call for the _old hands _to be returned to the helm is irresistable and they gracefullt come out of retirement in 5 years on huge retainers.

Gubberment: Claim that the crash was their idea and that they are the champions of the young people of Ireland; emigrants have no vote so who gives?; all the poeple who get burned will be chastised for their own gallability and will be urged (CJH style) to tighten their belts and remember they are better off then there Great Grandparents could have ever dreamed.

**top of head stuff here


----------



## dontaskme

miju said:


> it has in the older generations , there has been a massive transfer of wealth from young people to older people during the celtic tiger and the reason??? yer only man property


 
I know David McWilliam peddles this line as well but I don't think it makes any sense. The older generation have wealth because they worked for 30 or 40 years. The younger generation don't have wealth because they are just out of college and starting into their careers.

Ok, older people have the luxury of taking a slice of equity out of their homes and retire earlier and younger people feel they have to take on a quarter million in debt to get a foot on the ladder, but this is not a transfer of wealth.

It is more realistically a transfer of credit from old to young, older people are more likely to have cash deposits in the bank, and these are then lent to the younger generation. Saying it is a tranfer of wealth from young to elderly is probably something David McWilliams thought up on a Saturday teatime to fill up some SBP column inches.


----------



## StoppedClock

dontaskme said:


> I know David McWilliam peddles this line as well but I don't think it makes any sense. The older generation have wealth because they worked for 30 or 40 years. The younger generation don't have wealth because they are just out of college and starting into their careers.
> 
> Ok, older people have the luxury of taking a slice of equity out of their homes and retire earlier and younger people feel they have to take on a quarter million in debt to get a foot on the ladder, but this is not a transfer of wealth.
> 
> It is more realistically a transfer of credit from old to young, older people are more likely to have cash deposits in the bank, and these are then lent to the younger generation. Saying it is a tranfer of wealth from young to elderly is probably something David McWilliams thought up on a Saturday teatime to fill up some SBP column inches.


 

We went through all this on Wednesday, what parts did you not get then or are you an amnesiac?


----------



## BigM

http://www.finance.gov.ie/viewdoc.asp?DocID=4297&CatID=54&StartDate=1+January+2006&m=p

Cowen's speech last night - the Headline grabbing bit (as in Cowen Rules out SD changes) is:

"Budget 2007 will be a continuation of the policy of prudence, efficiency and fairness. I* realise that this might disappoint those who are attracted to short-term solutions or easy excitement.* "

But what about:
"attention seems to settle on actual cuts in rates. But a widening of bands or an increase in credits is also a tax cut. "

So widening the SD bands could be prudent, efficient and fair.....


----------



## whathome

BigM said:


> So widening the SD bands could be prudent, efficient and fair.....


 
With regard to widening bands, he was talking about income tax, not SD and clarified that in an interview with RTE later in the day.


----------



## Remix

Here's how RTE is quoting him (emphasis mine):



> Mr Cowen also moved to dampen speculation that stamp duty on house sales could be reduced in the budget.
> He said his strong inclination is not to interfere in the housing market and that *nobody is suggesting there will be any change* in the stamp duty regime in the near term.


 
Possible Strategy of the top o'me head here might be to try make it to the election while the emerging situation is still easy to confuse with a soft landing - price "adjustments" but no crash. They can claim credit for managing a soft landing.

They can also use the stamp duty promise to gain votes in the election and to offer it as an implicit fix in case the housing market does nose-dive in early 2007.


----------



## nacho_libre

I think the government are going to steer clear of the whole SD issue, it's a no win 
situation for them. If they change it to keep the bubble inflating then they'll have to 
deal with the fallout if there re-elected. If they change it to speed up a correction in 
the market it may take the help with a so called "soft-landing" scenario but it'll be 
a very unpopular decision in the short term. 

IMO they'll stay well clear of it and hope the s**t doesn't hit the fan before 
election time.


----------



## miju

dontaskme said:


> The older generation have wealth because they worked for 30 or 40 years. The younger generation don't have wealth because they are just out of college and starting into their careers.


 
no the majority of older people have wealth because they owened property before the property bubble 

the young are not wealthy because they are up to their eyes in mortgage debt that was used to pay for the older peoples pre boom properties

like i said transfer of wealth from young to old


----------



## StoppedClock

nacho_libre said:


> I think the government are going to steer clear of the whole SD issue, it's a no win
> situation for them. If they change it to keep the bubble inflating then they'll have to
> deal with the fallout if there re-elected. If they change it to speed up a correction in
> the market it may take the help with a so called "soft-landing" scenario but it'll be
> a very unpopular decision in the short term.
> 
> IMO they'll stay well clear of it and hope the **** doesn't hit the fan before
> election time.


 
Agreed



> He said his strong inclination is not to interfere in the housing market and that *nobody is suggesting there will be any change* in the stamp duty regime in the near term.


 
Except Alan Cooke, Chief Executive of IAVI who said in an interview with Hookie the other day that it would change and Cowen was not in position to know for sure what is going to be in the budget because it is not prepared until Budget day (or something equally ludicrous).  

I wonder what assurances he recieved in _the Tent?_


----------



## BigM

whathome said:


> With regard to widening bands, he was talking about income tax, not SD and clarified that in an interview with RTE later in the day.


 
I saw the RTE article but couldn't find any direct quotes - but I take your point that it was regarding income tax, not SD. 
However, it does leave the door open (IMO) as tax cuts - esp in the form of band-widening - is a stated policy of the Govt so it is consistent for them to widen the SD bands (in line with Govt policy of tax cuts) rather than abolish SD (a significant change in policy).

I suppose it's all moot anyway - why am I suddenly believing what politicians say!?!?


----------



## treora

I put a box room up on daft during the summer and eventually got a suitable person after 6 weeks and only 4 viewings (no Irish). I put another room in the same house on daft two weeks ago and got 20 viewings in two days. One Irish person. The rest broke down to those leaving the Southern European summer working market, people wanting to get into an Irish construction related industry, those who have just left college and one student. Few, if any, of these new immigrants can afford to become a FTB in Ireland.

By Christmas those with a place will stay, those without will go home and say to their friends that there is no room in Dublin and the rental price is too expensive versus the starting wages that are in Ireland. So the investment sellers will find in January that their property has been on the market for 3 to 9 months. This might be a good time to approach them saying that you'll look after/rent their place until the summer selling season and move out then, at which time it won't sell anyways.

I wonder if Cowan realised that as more investors put there properties on the market, where Irish FTBs will wait (and can wait longer than the vendor), the fewer economy fuelling cheap labour immigrants will stay (too expensive to rent when the lease comes up). They might say "lets go home for Christmas" and either return to London in the new year to work on that Olymipc thingy, or take out an NIB mortgage on a Polish(or relative homeland) property and open a business with all the money that they have made here over the last five years. Especially with €8bn in EU infrastructure going into Poland and a stream of cheap Romanians to employ as they once were by the Irish. How many immigrants will return in the new year, how many new ones will come with them, what will our reputation as the European employment promised land in 2007 and how many unsold properties will there be?


----------



## StoppedClock

treora said:


> I put a box room up on daft during the summer and eventually got a suitable person after 6 weeks and only 4 viewings (no Irish). I put another room in the same house on daft two weeks ago and got 20 viewings in two days. One Irish person. The rest broke down to those leaving the Southern European summer working market, people wanting to get into an Irish construction related industry, those who have just left college and one student. Few, if any, of these new immigrants can afford to become a FTB in Ireland.
> 
> By Christmas those with a place will stay, those without will go home and say to their friends that there is no room in Dublin and the rental price is too expensive versus the starting wages that are in Ireland. So the investment sellers will find in January that their property has been on the market for 3 to 9 months. This might be a good time to approach them saying that you'll look after/rent their place until the summer selling season and move out then, at which time it won't sell anyways.
> 
> I wonder if Cowan realised that as more investors put there properties on the market, where Irish FTBs will wait (and can wait longer than the vendor), the fewer economy fuelling cheap labour immigrants will stay (too expensive to rent when the lease comes up). They might say "lets go home for Christmas" and either return to London in the new year to work on that Olymipc thingy, or take out an NIB mortgage on a Polish(or relative homeland) property and open a business with all the money that they have made here over the last five years. Especially with €8bn in EU infrastructure going into Poland and a stream of cheap Romanians to employ as they once were by the Irish. How many immigrants will return in the new year, how many new ones will come with them, what will our reputation as the European employment promised land in 2007 and how many unsold properties will there be?


 

Good post but it hurt my eyes to read it, too small.


----------



## conor_mc

StoppedClock said:


> Except Alan Cooke, Chief Executive of IAVI who said in an interview with Hookie the other day that it would change and Cowen was not in position to know for sure what is going to be in the budget because it is not prepared until Budget day (or something equally ludicrous).
> 
> I wonder what assurances he recieved in _the Tent?_


 
I heard that guy on the radio. Never have I hard such utter tosh, pretending to be the FTB's best friend by asking the Finance Minister to give them a leg-up! The thing nobody seems to pull him up on is that an SD change might help current prospective FTB's, but will screw the next batch because prices would have moved beyond them again in Austin Hughes's 7% soft landing.

My take on this is that either these guys have been briefed by the Minister, or else there is a concerted, combined effort to exert serious pressure on Cowan to change SD this December.

It was interesting listening to Jim Power describing this as Cowan "managing expectations" whereas any rational person (who believes what a politician says...!!) would consider it as Cowan ruling out definitively any SD changes. I don't know how these guys can call this leap of faith "analysis".


----------



## Stiofan

Even as a FTB I would be in favour of no change to SD as it just prolongs the inevitable. What at first may be seen as an effort to lessen the burden on FTB will quickly be turned in a temporary market stimulus by those with vested in house price increases. Then what? 6 months down the road we will find ourselves in the same position but with a heavier debt burden lying in wait for that batch of FTBs.

Like Conor Mc I would be very skeptical of the motives of certain people trying to push for SD changes. In fact I think its time we let the market take care of itself instead of interfering to sustain the profits of the same people who put us in this predicament.


----------



## arbus

treora said:


> I put a box room up on daft during the summer and eventually got a suitable person after 6 weeks and only 4 viewings (no Irish). I put another room in the same house on daft two weeks ago and got 20 viewings in two days. One Irish person. The rest broke down to those leaving the Southern European summer working market, people wanting to get into an Irish construction related industry, those who have just left college and one student. Few, if any, of these new immigrants can afford to become a FTB in Ireland.
> 
> By Christmas those with a place will stay, those without will go home and say to their friends that there is no room in Dublin and the rental price is too expensive versus the starting wages that are in Ireland. So the investment sellers will find in January that their property has been on the market for 3 to 9 months. This might be a good time to approach them saying that you'll look after/rent their place until the summer selling season and move out then, at which time it won't sell anyways.
> 
> I wonder if Cowan realised that as more investors put there properties on the market, where Irish FTBs will wait (and can wait longer than the vendor), the fewer economy fuelling cheap labour immigrants will stay (too expensive to rent when the lease comes up). They might say "lets go home for Christmas" and either return to London in the new year to work on that Olymipc thingy, or take out an NIB mortgage on a Polish(or relative homeland) property and open a business with all the money that they have made here over the last five years. Especially with €8bn in EU infrastructure going into Poland and a stream of cheap Romanians to employ as they once were by the Irish. How many immigrants will return in the new year, how many new ones will come with them, what will our reputation as the European employment promised land in 2007 and how many unsold properties will there be?


 
I've been leaving in Ireland for about 5 years now and I am quite sure that many eastern europeans will leave Ireland in 2-5 years. That is just inevitable. All Polish whom I know are not planning to stay here longer. Many are buying property in Poland now (btw some smart Irish inverstors already sold their property in Dublin and invested in Polish property like our landlord). I am very pessimistic about Irish economy in general, I am sure that non-irish companies will be moving their business from here. Altogether in coming years we will witness less and less immigrants coming here, many jobs loses which will result in dropping houses prices.
BTW
You all compare yields, number of houses per person, supply vs demand etc.
There is another very important thing - the quality of the house. I've never seen such a poor constructions as Irish houses built recently. You should be crazy paying 400+k for such a cardboard boxes.


----------



## Open_Window

Just noticed this,



> ESTATE AGENCY BUSINESS PLUS LICENCE FOR SALE
> 
> Once off start up opportunity for a discerning purchaser to obtain an active Estate Agency business located in the busy thriving sought after area of Swords. This lucrative business is on Main Street area with excellent footfall. It comes with office furniture,window display & fully operational Auctioneers Licence.
> 
> Would suit Auctioneer, start up Auctioneers or Investor alike.
> 
> Price: E65,000



http://www.daft.ie/53769

Seems like the change in sentiment is spreading, first time i have ever seen an Estate Agents up for sale on daft more fateful irony.

ALso how can this person sell the liscene, surely you must resit a test, I cannot sell my Driver licence. Maybe its like the pubs....


----------



## StoppedClock

Open_Window said:


> Just noticed this,
> 
> 
> 
> http://www.daft.ie/53769
> 
> Seems like the change in sentiment is spreading, first time i have ever seen an Estate Agents up for sale on daft more fateful irony.


 
That has to be a piss take, 1000square feet for 65K, i'd live there for that!!


----------



## minky

arbus said:


> I've been leaving in Ireland for about 5 years now and I am quite sure that many eastern europeans will leave Ireland in 2-5 years. That is just inevitable. All Polish whom I know are not planning to stay here longer. Many are buying property in Poland now (btw some smart Irish inverstors already sold their property in Dublin and invested in Polish property like our landlord). I am very pessimistic about Irish economy in general, I am sure that non-irish companies will be moving their business from here. Altogether in coming years we will witness less and less immigrants coming here, many jobs loses which will result in dropping houses prices.
> BTW
> You all compare yields, number of houses per person, supply vs demand etc.
> There is another very important thing - the quality of the house. I've never seen such a poor constructions as Irish houses built recently. You should be crazy paying 400+k for such a cardboard boxes.



Arbus if you don't mind me asking, are any/many of your fellow immigrants who are thinking of staying considering buying irish property? (or do they think that the prices are insanely inflated)

There was a report a while back saying that immigrants were making up 18.5% of ftb purchases. What do you make of that? Is their truth to it or do you think the number was blown up and exadgerated as I suspect?

http://www.rte.ie/business/2006/0823/houses.html


----------



## partisan

StoppedClock said:


> That has to be a piss take, 1000square feet for 65K, i'd live there for that!!



Apart from the office furniture - the 65k probably covers their brand, their current client list, their lease (you'd be paying their rent) and their wage bill (eek!). 65k for a going concern seems like fire sale.


----------



## arbus

minky said:


> Arbus if you don't mind me asking, are any/many of your fellow immigrants who are thinking of staying considering buying irish property? (or do they think that the prices are insanely inflated)
> 
> There was a report a while back saying that immigrants were making up 18.5% of ftb purchases. What do you make of that? Is their truth to it or do you think the number was blown up and exadgerated as I suspect?
> 
> http://www.rte.ie/business/2006/0823/houses.html


 
well, thats true that immigrants are buying houses... 
not many Polish though because they mostly plan to go home in a few years..
non EU immigrants (Russian, Indian) - those who are planning to get a second citizenship and maybe staying for long  - are buying (from whom I know personally - maybe 25% already own the property. The rest are not planing to buy in the nearest future. Again all of them are high-skilled professionals so it would not be a general case)


----------



## gearoidmm

The best suggestion that I've heard so far from the vested interests is the one reported in the Indo today.  The construction industry have suggested that VAT should be cut on new builds for FTBs.

So then, the government cuts VAT rates by 10% on new builds, the amount of money it therefore gets from each sale is reduced by 30-40,000.  However, FTBs are still able to borrow the same amount as before so house prices don't actually fall and the builder gets to pocket the difference.

And the Indo reports this like it's a good idea for buyers.  Vomit


----------



## bearishbull

On todays last word on today fm they had an economist from one of the estate agents (name was jeff tucker). He was telling people concerned about stamp duty changes that whatever happens to stamp duty in budget prices will probably go higher in january as theres pent up demand as a result of people waiting after mc dowells comments etc. Basically he was saying prices rose 15% over last year and to buy now or prices will be higher in january! , vested interest trying to keep the lemmings buying. There was no one on to counter his pronouncements.


----------



## Open_Window

gearoidmm said:


> And the Indo reports this like it's a good idea for buyers.  Vomit



Well it looks like we are in the run up boom in kite sales with all this talk of helping FTBs. Suddenly the FTBers are most worthy charity. Its not lost on me and hopefully other that its the vested interest who are crying crocodile tears, these all who have screwed the FTBers them left right and center in the past helped by tax scheme after tax scheme to make sure they could accumulate at blitzkreg speed.

Little Red Ridding Hood knows best! Beware the wolf in sheep clothing (sorry for a bit of metaphor mixing).

THe market is the market right, live by the sword and die by the sword? Obviously the vested interest aren;t to happy about be plucked from their lofty positions on the pyramid right now....Hmmm anyone wanna buy a house?


----------



## gearoidmm

This article from London on the same theme - lenders are loosing standards by increasing salary multiples to help peolpe get nicer houses
*Mortgage lenders under fire for offering four-and-a-half times salary*



> Ian Bates, head of marketing at Bank of Ireland, said rising property prices, which have doubled in a decade, had prompted the change.He said: 'We made the change so that young people do not have to resort to a horrible one-bed flat in a bad area.
> 'This means they can buy a nicer home in a leafy suburb if they want to. With the £250,000, many young people were banging their heads against the wall.'



So they increase the money chasing the same houses so prices rise and the banks make more money at the expense of the poor guys with the 40 year mortgages... sounds familiar.


----------



## Open_Window

gearoidmm said:


> 'We made the change so that young people do not have to resort to a horrible one-bed flat in a bad area.
> *Mortgage lenders under fire for offering four-and-a-half times salary*



What utter utter rubbish (or spin) they're all playing the sympathy card, Bertie got their first. Oh pity the banks who decided to let loose and run against professional practice and lend wrecklessly and thus being the major contributor in the Irish House Bubble, oh the poor banks they were only doing the right thing.... nothing to do with massive profit, oh no, nothing to do with being some of the most profitable banks in the EU, oh no..... no no ...


----------



## Silvester

Hi y'all, first time poster. I have just spent the best part of my afternoon reading the forum and am more confused than ever! We're living in London and I am desperate to buy a long-term base in Ireland. No sooner do I read a post saying prices are going down, which is indeed true in the cases linked, than I read that they will shoot up again! So, a bit of a rollercoaster for someone who wants to buy.

I've been looking at 2 particular developments since spring -Marina Village in Malahide and Corr Castle in Howth/Sutton. Marina Village last spring were asking arount the 580/90K mark, now they're asking aro 650 (3 bed twnhse). Corr Castle, for a 2 bed (not that you can swing a cat in the 2nd so-called bedroom), were asking aro 590k last Spring, I know one went for 612, now they're asking around the 650k mark. They seem to jump 50k per quarter regardless. And of course the ea won't tell you what they sold for.

Are the price reductions very localised, iow is it very much to do with location, do some developments just keep commanding ever-increasing prices? Having dealt with some very arrogant eas, who bellow that the price stated is only the starting price (this was in spring), is it now the case in Dublin that one can offer below the figure quoted without being laughed out of it/patronised? Would really welcome any comments on this.
Will we really face another hike in prices come Spring 2007?


----------



## howstrange

bearishbull said:


> On todays last word on today fm they had an economist from one of the estate agents (name was jeff tucker). He was telling people concerned about stamp duty changes that whatever happens to stamp duty in budget prices will probably go higher in january as theres pent up demand as a result of people waiting after mc dowells comments etc. Basically he was saying prices rose 15% over last year and to buy now or prices will be higher in january! , vested interest trying to keep the lemmings buying. There was no one on to counter his pronouncements.



 I heard it too and nearly got sick! The guy was from Hooke and McDonald. These guys dont give a toss about FTB's and if they have to keep getting more and more into debt for bigger mortgages then so be it!! They are doing their v best to keep scaring naive FTB's back into the mindset of "Buy now or else...........". I am a potential FTB and hearing all this makes my blood boil! Anton Savage didnt even put it up to him just went along with what he said. Not one mention of IR, affordability or anything else!! Basically he said house prices are going to go up again in Jan becasue all the FTB's who were waiting for a stamp duty change are going to start flooding back into the market! Thats it. End of story! I like all other FTB's would like a place of my own but just cannot afford it in Dublin even though i am in a v good job with a decent wage! I genuinely dont want a crash but there is no other way genuine affordabilty for anything other than a box in commuterville is going to happen! Anyway end of rant!


----------



## howstrange

Silvester said:


> Hi y'all, first time poster. I have just spent the best part of my afternoon reading the forum and am more confused than ever! We're living in London and I am desperate to buy a long-term base in Ireland. No sooner do I read a post saying prices are going down, which is indeed true in the cases linked, than I read that they will shoot up again! So, a bit of a rollercoaster for someone who wants to buy.
> 
> I've been looking at 2 particular developments since spring -Marina Village in Malahide and Corr Castle in Howth/Sutton. Marina Village last spring were asking arount the 580/90K mark, now they're asking aro 650 (3 bed twnhse). Corr Castle, for a 2 bed (not that you can swing a cat in the 2nd so-called bedroom), were asking aro 590k last Spring, I know one went for 612, now they're asking around the 650k mark. They seem to jump 50k per quarter regardless. And of course the ea won't tell you what they sold for.
> 
> Are the price reductions very localised, iow is it very much to do with location, do some developments just keep commanding ever-increasing prices? Having dealt with some very arrogant eas, who bellow that the price stated is only the starting price (this was in spring), is it now the case in Dublin that one can offer below the figure quoted without being laughed out of it/patronised? Would really welcome any comments on this.
> Will we really face another hike in prices come Spring 2007?



Anyones guess!! Doesnt look like it at the moment but when you are living in a country run by property developers and vested interests, anything is possible! In theory prices shouldnt go up but the above mentioned will do their v best to keep this party going! I wish i knew the answer to your question!


----------



## whathome

Silvester said:


> Corr Castle in Howth/Sutton. Corr Castle, for a 2 bed (not that you can swing a cat in the 2nd so-called bedroom), were asking aro 590k last Spring, I know one went for 612, now they're asking around the 650k mark.


 
This 2 bed in Corr Castle was asking €600,000 in Feb:
[broken link removed]

but the market in Dublin rose by at least 10% between Feb and June so you would expect the latest price to be at least €660,000. These two have been on sale for the past few months now at €650,000 - certainly no jump this quarter.

1. [broken link removed]=
2. [broken link removed]=

in fact the seller of no.2 (11 Corr Castle) above must be getting frustrated because they've recently put it on with a second estate agent:
[broken link removed]=

and this 3 bed has been reduced from €950,000


Down to €895,000
[broken link removed]

Expect to see those 2 beds currently at 650k come down in price over the next few weeks, they've been on the market for months now.
Hope that helps


----------



## beattie

howstrange said:


> I heard it too and nearly got sick! The guy was from Hooke and McDonald. These guys dont give a toss about FTB's and if they have to keep getting more and more into debt for bigger mortgages then so be it!! They are doing their v best to keep scaring naive FTB's back into the mindset of "Buy now or else...........". I am a potential FTB and hearing all this makes my blood boil! Anton Savage didnt even put it up to him just went along with what he said. Not one mention of IR, affordability or anything else!! Basically he said house prices are going to go up again in Jan becasue all the FTB's who were waiting for a stamp duty change are going to start flooding back into the market! Thats it. End of story! I like all other FTB's would like a place of my own but just cannot afford it in Dublin even though i am in a v good job with a decent wage! I genuinely dont want a crash but there is no other way genuine affordabilty for anything other than a box in commuterville is going to happen! Anyway end of rant!


 
Its incredible what passes for decent journalism in this country. It's a pity there can't be class actions taken (like in the good old US of A) in the event of things going pear shaped against VI's who spout this manure knowing that they will pocket an extra fat bonus as their profits increase. Thank god Bertie will do something about it......


----------



## StoppedClock

partisan said:


> Apart from the office furniture - the 65k probably covers their brand, their current client list, their lease (you'd be paying their rent) and their wage bill (eek!). 65k for a going concern seems like fire sale.


 
Main Street, Swords,
North Co. Dublin *Retail Unit For Sale

*Sale Price: €65,000 

Floor Area: 1,000 sq. feet (93 sq. metres)


----------



## Sarsfield

miju said:


> like i said transfer of wealth from young to old


 
To transfer wealth from yourself, you need to have wealth in the first place. Now tell me where young people get wealth from in order to transfer it to the old.

That phrase is pure soundbite, no substance.



			
				miju said:
			
		

> we're losing buckets upon buckets of manufacturing jobs that are being "replaced" with low paid service jobs


 
Manufacturing employment is actually rising according to the CSO

[broken link removed]


----------



## whathome

Sarsfield said:


> To transfer wealth from yourself, you need to have wealth in the first place. Now tell me where young people get wealth from in order to transfer it to the old.


 
It's future wealth and banks kindly allow you give it away in the form of a mortgage.


----------



## whizzbang

Sarsfield said:


> To transfer wealth from yourself, you need to have wealth in the first place. Now tell me where young people get wealth from in order to transfer it to the old.
> 
> That phrase is pure soundbite, no substance.



They didn't have wealth,so they took out credit, this is credit that they will be spending the next 35 years giving back to the banks. So in essence they took their future wealth and gave it to the older generation.


----------



## partisan

whathome said:


> It's future wealth and banks kindly allow you give it away in the form of a mortgage.



Until recently, at negative real interest rates ;-)



Silvester said:


> Are the price reductions very localised, iow is it very much to do with location, do some developments just keep commanding ever-increasing prices? Having dealt with some very arrogant eas, who bellow that the price stated is only the starting price (this was in spring), is it now the case in Dublin that one can offer below the figure quoted without being laughed out of it/patronised? Would really welcome any comments on this.
> Will we really face another hike in prices come Spring 2007?



I've been house hunting recently, and my experience is that lower offers will be entertained as long as they are not off the radar low. The estate agents know that sellers have to lower their expectations from the spring /summer.


----------



## blindjustice

ah the soft landing i.e we managed to squeeze as much as we can out of em now the lets keep it that way!
You can sense it in the air now! even my goldfish know its coming

WERE ALL DOOMED!
THE END IS NIGH!!
THE FOUR HORSEMEN OF THE APOCALYPSE!!
WAILING BANSHEES 
YOU GET THE PICTURE

oh and emigration to USA and OZ is not as easy as it used to be!


----------



## Silvester

HowStrange and WhatHome
Thanks for replies!


----------



## Remix

Came across this quote. It sounds like the new foundation for the Irish property business:



> Remember this lesson, my friends. The art of being a good liar is in the second response. Who said not to dig a deeper hole for yourself?
> On the contrary, the deeper it is the more wiggle room you have. Who said not to compound a crime? _Oh, no, you will collect compound interest_.
> .
> And remember, If at first you don't succeed, lie, lie again.


 
Seriously though, I think there'll be a backfire - public sentiment impacted adversely - if they try to hype things too much at this stage. People seem to be developing more advanced BS detection abilities these days


----------



## Silvester

Thanks Partisan!  I hope this is possible particularly with invester-owned properties.


----------



## tententwenty

howstrange said:


> They are doing their v best to keep scaring naive FTB's back into the mindset of "Buy now or else...........". I am a potential FTB and hearing all this makes my blood boil!


Believe me, you are not alone.


----------



## whathome

*Property slowdown hits market*

[broken link removed]



> THE Dublin Exchange shed ground yesterday amid concerns in the market over a noticeable slowdown in property, particularly secondhand house sales.


----------



## liteweight

whizzbang said:


> They didn't have wealth,so they took out credit, this is credit that they will be spending the next 35 years giving back to the banks. So in essence they took their future wealth and gave it to the older generation.



People have to live. Whether they take their 'future wealth' and spend it on a mortgage or whether they pay it to a landlord....it's not something they were ever going to be able to keep entirely in their pockets, unless they wanted to live in a box. With a mortgage, they will have an asset that they own after 35 years and the security of their own home in old age. Even if rents are a good deal cheaper than a mortgage, I'm not sure the saving will be enough to ensure security at a later date.

The older generation also spent their future wealth while young and are now reaping the rewards. Property was always expensive in relation to income.


----------



## SLAPPY

Fascinating stuff here on the Property collapse in the USA.   These are the words of Real Estate Agent Mike Morgan from the website: http://globaleconomicanalysis.blogspot.com/ 


*Mike Morgan:*
"With so many “experts” out there singing the praises of the housing market, I think it is time for me to once again poke my head out. I had an email exchange this week with Jim Cramer, and it was hard to believe he is as bullish as he is. I hear from too many analysts and Wall Street gurus that don’t take the time to get out of their offices and get on the front line here in Florida, as well as Arizona, Texas, California, Virginia, etc. I also hear from the analysts and hedge fund managers that are visiting the corporate offices of the big builders. Unfortunately, they’re drinking the Cool Aid. It’s potent stuff that clouds rational thinking and it is probably just what is needed to wash down a few hundred stale donuts.

Do you remember my analogy of housing to donuts? A year ago I said this was like the room of 1,000 donuts. Even if they are warm Krispy Kremes, how many can you eat? Three? Maybe four? And even if you come back the next day, and the donuts are now half price, how many can you eat? Same thing with housing. We only have so many people in the US. But builders built houses like donuts. They sold houses to non-users. They sold houses to the greedy masses that bought multiple houses to flip. Now we have the inventory, but there are not enough people to occupy these homes. Moreover, with interest rates rising and mortgages becoming tougher to obtain, we have less and less people that can buy these homes, even if they want to.

Since my recent article in Barron's, I have received dozens of calls from builders, bankers, buyers and investment groups perched like vultures. Let me give you a sampling of a few calls.

Public Builder - Called me to find them bulk buyers with the ability to buy out all remaining units in developments they cannot sell. They are willing to sell at cost. I told them they were about 10% over the current distress market, and they didn’t even hesitate. They said, fine. Drop the price 10% and we’ll pay a 5% commission to you. Just help us get rid of this inventory.

Condo Developer - They have a 600 unit project that is 100% up for resale. This means no one is going to close when the building is completed in January. Every single buyer will walk from their 20% deposits. The developer will simply going to turn the keys over to the bank. And the bank will take a massive hit that will have the Feds on top of them in the blink of an eye.

Townhome Developer - Asked me to resell 132 units that they had sold a year ago for an average of $400,000 a unit. All of their buyers have notified them that they will not close. Unfortunately, even a year ago in the heated market these units were only worth about $250,000. Now, the units will not command more than $175,000 . . . if they’re lucky.

Real Estate Agent - She sold 10 of the 132 units I just mentioned to her friends, family, banker and co-workers. They’re all going to walk away from their $40,000 deposits, so they don’t lose $250,000. The developer will be stuck with 132 units that are not worth what it cost to build them.

Homeowner - This one really hurts, and this is the next wave of the massive tidal wave hitting this industry. As surfers know, the third set is the biggest. This homeowner purchased her home for $390,000 plus $15,000 in closing costs. It is now worth maybe $300,000. Their interest only ARM is scheduled for refinancing. The bank told them they need to come up with additional cash to cover the drop in equity. But they don’t have the $75,000 the bank wants. And even if they sell for $300,000 and clear $280,000, they can’t pay off their $390,000 mortgage balance. You see, their mortgage was 100% and it was interest only. They are going to walk away from the house and give it to the bank. The bank, if they are lucky, will sell the house for $300,000 less commissions and expenses. Maybe they will net out at $280,000. The math is simple. The bank, at best, will lose at least $110,000 on a $390,000 mortgage. That’s a 28% loss . . . IF they can sell at $300,000. Back to the donuts. Maybe they can sell a few of these homes at market prices, but as foreclosures mount, prices will drop further.

The Third Wave - This massive tidal wave will effect all aspects of our economy. Some banks will fail. Other banks will suffer the worst liquidity crisis since the Depression. And there is no way to stop this wave. This wave not only effects current mortgage holders who can no longer afford to live in their homes, but it devastates the new home market. Buyers with contracts are finding it tougher to qualify for mortgages. We can’t forget that rates are also up about 18% from a year ago, so buyers cannot afford the same home they could have a year ago.

I will wrap up with a statistic from a recent FDIC presentation.

“Bank exposure to mortgage and home equity is now at peak levels, having risen dramatically. If you look at 1998, the total exposure to mortgage and home equity loans was about 25 percent. In the last quarter, the third quarter, it had risen to 37 percent.”

And here’s the why this tidal wave is a killer. The 25 percent exposure was during a period of rising home prices and low inventory levels. The 37 percent follows the first two tidal waves of the highest inventory levels in the history of the United States and prices falling with equity disappearing daily.

I sold three homes last week for one public builder. Each of these homes sold for 40% less than the same homes sold a year ago. How about all of those neighbors when it comes time to refinance? The appraiser is going to look at current sales prices, and the bank is going to ask for additional funds to meet the equity requirements. Ouch. Where’s the Kool Aid?"​


----------



## gearoidmm

Some myhome.ie inventory statistics (I think we could agree that this is not affected by any increasing popularity of the site given that it has been established for years)

Early July - 3316 properties for sale in Dublin city and county
21st October - 5469 properties for sale - an increase of 65% over 3 months


----------



## Open_Window

Just looked at daft total sales for ireland (not includign sites) and it seems to be just past the 25,000 mark.

Have I got this right???

Also hear a statistic on newstalk that there ar just over 650,000 residential mortgages in the country. I thoight that was interstign as it must be just under half the total housing stock that is mortgaged.

Is it correct to assume that maybe a large proportion of people, the older generations are very much debt free whilel a large proportion of the younger generation are up to their collective necks?

The reason I pose this is that you find the sentiment between the young and the old very differetn, and to be honest a lot of the older generation baulk at the idea that prices could go down were as the young are jsut thinking about holding on not sure which way things are going but feeling they'll never get a break and its there sentiment primarily driving the market, voting with their mortgage extended pockets. 

Well thats what I find anecdotally.


----------



## Neffa

liteweight said:


> People have to live. Whether they take their 'future wealth' and spend it on a mortgage or whether they pay it to a landlord....it's not something they were ever going to be able to keep entirely in their pockets, unless they wanted to live in a box. With a mortgage, they will have an asset that they own after 35 years and the security of their own home in old age. Even if rents are a good deal cheaper than a mortgage, I'm not sure the saving will be enough to ensure security at a later date.
> 
> The older generation also spent their future wealth while young and are now reaping the rewards. Property was always expensive in relation to income.


 
I don't think most of the bears on here are saying "never buy under any circumstances" - I'm certainly not. Yes, one of the benefits of buying is you own the place in old age - no question. I think most are saying "it's very expensive now and likely to soften/correct/crash [depending on how bearish you are] in the coming years." Renting (for now) has the advantage of helping you save cash each month, putting you in a better position as a buyer for the new market now emerging. A highly leveraged owner/occupier is - by comparison - stuck.

And yes, when you bought property 30+ years ago, it was always a stretch. Difference was that inflation helped make that burden ease pretty quickly for many. That's not the case now and given our membership of the euro, very unlikely to be the case in the foreseeable future.


----------



## gearoidmm

Open_Window said:


> Just looked at daft total sales for ireland (not includign sites) and it seems to be just past the 25,000 mark.



I don't think this is right.  You have to actually select search and this gives a figure closer to 22,000.

The figures at the top of the page seem to include multiple entries and so are not accurate.  There is also much greater variation in these figures from day-day and even hour to hour as older entries and multiples are deleted by the administrators so I wouldn't take those figures as being realistic.


----------



## Open_Window

Hey PEOPLE, do take a surfing sec & go vote on the POLL question on ,



> http://irishhousepricesfalling.blogspot.com/
> 
> Oct'06 - Will the Irish house market crash in the next 12 months?
> Yes
> No
> Don't know



I see daft inventory is still steadily rising, rental numbers are practically holding, intersting, we won't know for a while yet but rentals may not take that dip if a lot of previously held but vacant properties are simply being offered to the market for the first time to realise capital gains.

The 15% vacancy rate or in real terms 275,000 empty properties are enough to crash the market 200 times over, since its has only taken a rise of 8000+ extra properties for sale on daft to indicate that a rise as small as maybe 10,000-20,000 extra in the market overall in one selling season is enough to turn sentiment right around.

Bring on 100,000 or 200,000 properties are you are talking about total annihilation of the market.

You can see why the politicians are running scared (apart from the ever foolhardy McDowell) or Joe Higgins who is asking the hard questions.


----------



## Sarsfield

gearoidmm said:


> Early July - 3316 properties for sale in Dublin city and county
> 21st October - 5469 properties for sale - an increase of 65% over 3 months


 
Is that unusual?  The summer months are traditionally the quiet months for sales as people are on holiday etc.  Regardelss of the state of the market, I'd have expected a significant increase in Sept/Oct.  I'd be inclined to compare October last year with October this year.


----------



## whathome

Sarsfield said:


> Is that unusual? The summer months are traditionally the quiet months for sales as people are on holiday etc. Regardelss of the state of the market, I'd have expected a significant increase in Sept/Oct. I'd be inclined to compare October last year with October this year.


 
Yes it is unusual. From my analysis, the inventory figures from July were even *higher* than April which is peak Spring selling season. When data about rising inventory was posted on this thread in the summer, those in denial were saying that inventory was high because it was summer. Bulls were arguing back then that you would expect more property to be on the market because nothing sells in summer!!!

In some areas, there has been a 300% increase in the number of properties for sale since April - peak spring selling season.


----------



## bearishbull

[broken link removed]

[broken link removed]

[broken link removed]

apologies for long url's


----------



## Open_Window

So I see Sbpost publish on line just after midnight. I haven't found thsi to be always the case, have you? 

I should be in bed. So should you BB. 



> Reductions of up to 33% hit second-hand house market, writes Susan Mitchell.



Is that not a crash? When is a crash a crash?



> One agent said it had become a ‘‘buyer’s market’’ and that prospective buyers were now in a position to take more time when it comes to purchases. ‘‘It is by no means down and out, but things are slowing down. It a very frustrating time for vendors,” said Daphne Kaye, of Daphne Kaye & Associates in south Dublin.



Well if it means 5 or more years of selling frustration for "vendors" after 5 mor more frustrating years for buyers then I'd call that even. Lets see.



> Analysts believe rising interest rates are largely responsible for the current downturn. A widespread expectation of a full or partial abolition of stamp duty in the December budget also created a stand-off in the housing market.



Not a mention of McDowells commetns per se. Honest analysis here I believe. People should note form the article house on the market since April, at least 4 months before such comments were made by the leader of the PD in regards to abolishing stamp duty. Gratned these are house acrosss the spectrum but we need FTB to come in so people can trade up.

I'd personally be happy to have a place. I am wondering will I ever attain the standards my grandparents happily lived you know, a starter home that you live in all your life...



> Minister for Finance Brian Cowen last week moved to dampen speculation that stamp duty would be reduced.



Is there not in fact a stronger argument to abolish stamp duty in times of a very depressed housing market as opposed to a busy one thats producing much revenue!

While I am no fan of this current Government, giving FTB onemore leg up for a few months would be like giving a addict of som sort unfettered access to their drug of choice, the high would get higher quicker but the end would be nigher sooner!

Tax breaks are used to stimulate a festering sector of society to met prhaps a particular need at a given time so by extension of current Government policy (bar contentious nature of the over extension of section 23) it is not typical to give tax breaks in such a climate or easy access to credit.


----------



## bearishbull

[broken link removed]

Lots of spin from the vested interests in some of the articles including in one above.
Can't sleep these days.

Love this line

_For €381,000 ‘‘you could be looking at a slightly larger townhouse, in somewhere like Cabra, or a two-up two-down around Arbour Hill’’, Chambers added_
_‘‘There is a good affordability in the market,” he said. ‘‘It’s not that people can’t buy property in the price bracket they have to spend; it’s more a question of: is it in the area that they want to buy the property?_



Townhouses in Cabra! more like small ex council houses in rough area!


----------



## Open_Window

This article is bang on for the first third after that its an appalling hogwash of vested interest propoganda, with all the usual suspects,

[broken link removed]



> Careful, it’s your first time
> 
> 22 October 2006  By Laura Noonan
> Until quite recently, the white smoke emanating from Ireland’s property market was of the easy to read variety. Prices were soaring to highs that induced bouts of dizziness in even the most levelheaded of homeowners, and the masses clamoured to pour their money into Ireland’s best performing asset.



My favourites

*



			To buy or not to buy? 

Shane Brady, director of Gunne New Homes, said there was never a bad time to buy property.

‘‘Going back to 2001 and that period post 9/11 and people were getting messages from the market place say ‘oh don’t buy the market is going to fall through the floor’ and all this sort of carry-on. Not alone were those statements unfounded, but they were coming from people who didn’t have a knowledge of the marketplace. The market in 2002 took off like a rocket again.”
		
Click to expand...

*
Oh yea such death defying logic, let us dispense with most of history and leave our 2001-2006 blinkers on children, you can burn the rest of the pages of your History books now!

This one had me rolling around  

Ah then there is Austin, Austin Austin Austin,



> Austin Hughes, chief economist at IIB Bank, *agreed that a mass return to the market was a very real possibility.* ‘‘There’s no doubt that you’re going to have a number of people staying out of the market at the moment,” he said. ‘‘Because they see that interest rates are rising, they’ve been told by some commentators that the sky is falling, there is this uncertainty about whether there will be capital gains tax on investors, there is uncertainty about stamp duty, and there is more supply.



Its very interesting to see the "experts" who just happen to be the one in the firing line if it all goe poo, recommend what is a bad value buy in anyones book. Talk about trying to stoke up the fire.

I think this article was very irresponsible to its readers and lacked a real objectivity. It started off well but then dived into a mish-mash of proporganda, historical amnesia & wishful thinking at best.

Finally, you just can't take this guy seriously anymore,



> ‘‘What may happen is that prices of individual properties will fall while prices generally will rise,” said Hughes.
Click to expand...


Somethings will go up something will go down (like your credibility Austin...)



> ‘‘The falls will be in trophy houses. If you are talking about a unique house somewhere in a desirable suburb, it is very difficult to know whether the underlying value of that is X million or Y million. It all depends on whether three or four people are going for it.



Oh no not the rich, how could it be!?!? the PDs won't stand for this!

‘‘To the extent that we see more of these properties becoming available, people are standing back a little bit and not panicking to get into the market, so those prices are most vulnerable. That creates a perception that the market is softening.”



> However, Hughes said the fundamentals of the property market remained strong. ‘‘Once you take out the regular bad news on interest rates, put in the SSIAs and hopefully a supportive move in the budget, that would give sustained property price appreciation,” said Hughes.
Click to expand...


Translation: Ignore interest rates & reality in general, believe the *SSIA hype, expect a "Promised Land" Budget and in a few months you'll have a nicely over cooked property market that no one can stomach anymore! 

*_Is the maturing of the SSIA mantra a exmaple of a pre-emptive exucse? Is it a dead duck, since most may have borrowed on teh strenght of it?_

‘‘The property market reflects very solid economic fundamentals and there is a sense that prices will rise, not at a spectacular rate but at a solid rate.”

I *SENSE* a distrubance in the force and it smells very bad indeed 

[broken link removed]


----------



## liteweight

Neffa said:


> I don't think most of the bears on here are saying "never buy under any circumstances" - I'm certainly not. Yes, one of the benefits of buying is you own the place in old age - no question. I think most are saying "it's very expensive now and likely to soften/correct/crash [depending on how bearish you are] in the coming years." Renting (for now) has the advantage of helping you save cash each month, putting you in a better position as a buyer for the new market now emerging. A highly leveraged owner/occupier is - by comparison - stuck.



Well, when I started reading this thread (seems like ages ago) a lot of people were saying we should adopt the lifestyles of other European countries and rent for life. I agree that renting for now would allow some people to save more in order to buy later. They'd have to be disciplined though and for a long period of time. Do you really think that FTBs will be able to take advantage of falling prices? I believe investors will step back in if prices hit bottom, they'll have the disposable income to snap up bargains while FTBs will still be saddled with higher interest rates and the prospect of banks willing to lend less. This certainly was the case when the crash happened in London.



			
				Neffa said:
			
		

> And yes, when you bought property 30+ years ago, it was always a stretch. Difference was that inflation helped make that burden ease pretty quickly for many. That's not the case now and given our membership of the euro, very unlikely to be the case in the foreseeable future.



This wasn't the case, in fact the opposite. In the 70s and 80s interest rates were triple what they are now! People were paying their mortgage but felt like they were running just to stand still. It's really only in the last 6 years that property here became unbearably expensive and those of us who ploughed through the years of high interest began to reap the reward. Of course not everybody has taken advantage by selling or re-mortgaged to buy investment properties.


----------



## whathome

From today's Sunday Independent:

*Guide price policy is falling down around our ears*

http://www.unison.ie/irish_independent/stories.php3?ca=184&si=1710414&issue_id=14796

"NOW that the auction market is barely twitching, with just one in eight houses selling under the hammer last week, it's time we returned to the dysfunctional AMV (Advised Minimum Value) system"


----------



## miju

badabing said:


> One typical home in 'risky' Clonsilla
> Original asking price 430k
> [broken link removed]=
> 
> Latest offer 450k and rising...



jaysis you'd think after 5 days of having a bid that high and still rising that the property would be gone from myhome by now


----------



## pernickety

Had an interesting conversation last night (in France with French people) discussing property (they're not usually as bothered as the Irish to follow property like a football team). One person is trying to buy but was priced out of the market by an English couple, he was a bit angry as he knows the English can borrow much more than him. He thought the price was ridiculous for a 2 storey 4 bedroom farmhouse on 12 hectares (135K euro), the general sentiment of the others was that that's too high a price to pay for a house. And 25 year term is much too long.

Bear in mind that this is in a rural area where prices have been rising too for the past 5 or 10 years, and "they" say a crash is on the way....

I think the Irish, even the sensible, pragmatic ones, have lost the sense of normality. Even the 2001 pricesi in Irl are high enough by French standards (outside Paris and côte d'azur). My feeling, along with most on this thread, is that a crash will happen, and that it will be severe.


----------



## whathome

liteweight said:


> FTBs will still be saddled with higher interest rates and the prospect of banks willing to lend less. This certainly was the case when the crash happened in London.


 
This was absolutely NOT the case in London. I was living in the UK at the time (1994). Many FTB's remained on the sidelines of the market from fear rather than lack of affordability, it was investors that stepped in and put a floor on the crash when yields became attractive. Any FTB who waited and bought in 1994 rather than 1990 ended up with a smaller mortgage and saved themselves from the nightmare of negative equity. It's true that borrowing power drops as interest rates increase but when prices fall - people don't need to borrow as much anyway. So an FTB who waits will benefit through buying the same class of home but with a smaller mortgage! They would be even better off if they save and invest(non-property) in the meantime, their net worth is increasing while the price of their targeted asset is falling. Through saving and investing(non-property) during the crash, they would leapfrog into a better house than they could afford currently, while the unfortunates that buy close to the peak of the price bubble are locked into higher mortgages and possible negative equity.


----------



## JayDub

JayDub said:


> Realistically, how much should a bank lend a couple earning €60k/year. The old lending rule 2.5 times first wage, 1.5 times second wage was chucked out the window years ago. If it was still in place the a couple on average industrial wage could not borrow more than €120k. Even if the bank would lend 4 times combined wages that would still be only €240k, considering the average house price in Dublin is over €400k. Plain and simple most are priced out of the property market.


 
The following link from Bearbullish answers my question.

[broken link removed]

"A couple on the average industrial wage will need to raise as much as €163,000 on top of their mortgage to buy a house in Dublin, according to a survey by The Sunday Business Post.

The newspaper asked the country’s main banks how much they would lend to two first-time buyers who earned €30,500 each. National Irish Bank (NIB) offered the couple the least amount – €250,000.

Based on the average Dublin house price as it stands (€413,000), the couple would need to raise €163,000 to buy a house."

So basically if the above couple could save 50% of their wages each year, it would take them 5 years to come up with the deposit. 25% of their savings would take them 10 years. Don't forget real estate agents and mortgage lenders predict prices to continue rising.


----------



## Marie

_Of course_ estate agents and mortgage lenders say prices will rise - it is their role to 'talk up' the property market so they effect transfer from sellers to buyers.  If they don't (or if they do and their efforts are ineffective) their income disappears overnight!  From a number of recent posts here it looks as if prices in some sectors _are _indeed continuing to rise!  

However the wild-card in the pack is 'public sentiment'.  It has been well-argued here that irrational emotion rather than real need and real common-sense has been the 'driver' of the _extraordinary_ increase in property prices since 2001 and if/when/now that the wild-card is removed the 'driver' is removed and the irrational expectations of profit without productivity will now surface for what they are.


----------



## JayDub

What happens to all the section 23 homes that have failed to sell. Section 23 homes have inflated prices, after December 06 they will be even harder to sell so the price of such properties should decrease greatly. There will be a glut of unsold houses in counties like Longford, Leitrim, Roscommon. I cannot see any huge increase in construction in these areas. What I can see is layoffs in the construction sector in this area, immigrant construction workers vacating rented accommodation which will lead to more properties going on the market. The next six months should be a real indicitor where this market is heading.


----------



## bearishbull

I wonder will access to the internet and rapid exchange of information make a property crash happen much quicker than in previous era's??? In past estate agents could hide things from general public and it took months for info to get around market as a whole. If potential buyers in Dublin check on internet and see prices falling in another part or Dublin will they be scared off even if they see prices not falling in their desired area's?

I think a crash in property can happen much more rapidly than the uk crash due to this rapid access to information from all over the country/market.


----------



## paddyd

bearishbull said:


> I think a crash in property can happen much more rapidly than the uk crash due to this rapid access to information from all over the country/market.


 

Hi all, back again! (And I still think we're headed for a soft landing)

In fact, I think the SPB articles made some v.good points, and 12% rises in 2006, with 2-5% rise in 2007 sounds about right to me.

I found the 'Careful, Its your first time' article gave some excellent reasons for the recent fall-off, the resultant effects on the market, and how these things will effect the future market. 

‘‘I think if you see a house that you can afford and that suits your requirements you should go for it now. I don’t believe it’s going to get any cheaper.”



p.s. this comment above relating to the UK market crash seems a little harsh. Two things crashed the UK market, neither of which we have here:
1. 120% mortgages were commonplace in a unregulated market
2. Interest rates were 15%!

Yet the British public bought property like you've never seen before. 'You can't lose with property'.

Here in IRL we get a rate increase of 1.25%, and look at the effect its had on everyones perception of the market.

Theres absolutely no comparison.


----------



## whathome

paddyd said:


> 1. 120% mortgages were commonplace in a unregulated market
> 2. Interest rates were 15%!
> Here in IRL we get a rate increase of 1.25%, and look at the effect its had on everyones perception of the market.


 
It's the relative increase that's important.
In the UK, rates jumped from a very short term low of 8% to a high of 15% between 1988 and 1990, an increase of 87%. Interestingly, Irish rates only have to go to 3.75% for the same level of increase to apply.

[broken link removed]

Even though UK interest rates came down between 1991 and 1994, property prices kept falling. Once a crash gains momentum, falling interest rates will not stop it.

Also - As Neffa pointed out previously about the pre-crash UK market, 120% mortgages were certainly not readily available to everyday punters. 100% mortgages were but IO and other "exotic" forms of financing were not commonplace.


----------



## paddyd

whathome said:


> It's the relative increase that's important.
> In the UK, rates jumped from a very short term low of 8% to a high of 15% between 1988 and 1990, an increase of 87%. Interestingly, Irish rates only have to go to 3.75% for the same level of increase to apply.


 
This is just drawing comparisons between percentages increases, and not effects. 3.75% is an unbelievably low interest rate, and barely on a par with inflation. The cost of money is still cheap. Its still very attractive.

The examples that the SBP give relating to falling prices, are all in the million, or muiti-million range.

As I posted here a few months ago, (before being hunted by the "The Sky is Falling, Don't disagree" brigade), the average first-time buyer house (say, a 3-bed semi), is holding firm, or increasing, and is certainly not decreasing.


----------



## 2nz

paddyd said:


> 3.75% is an unbelievably low interest rate, and barely on a par with inflation.


 
What is a believable interest rate? Look at the damage jumping here has done. What will happen if rates jump to your believable rate. 


http://irishhousepricesfalling.blogspot.com/ _(poll added)_


----------



## paddyd

2nz said:


> What is a believable interest rate? Look at the damage jumping here has done. What will happen if rates jump to your believable rate.
> 
> 
> http://irishhousepricesfalling.blogspot.com/ _(poll added)_


 
a believable interest rate?

btw, relating to that new blog, spawned from this thread, how many cached myhome.ie house price INCREASES could we find, going back through the past 6 months, in response to this list of decreases? Many multiples I guess


----------



## gearoidmm

paddyd said:


> This is just drawing comparisons between percentages increases, and not effects. 3.75% is an unbelievably low interest rate, and barely on a par with inflation. The cost of money is still cheap. Its still very attractive.
> 
> The examples that the SBP give relating to falling prices, are all in the million, or muiti-million range.
> 
> As I posted here a few months ago, (before being hunted by the "The Sky is Falling, Don't disagree" brigade), the average first-time buyer house (say, a 3-bed semi), is holding firm, or increasing, and is certainly not decreasing.



I understand what you're saying in defense of the market but would you not agree that the price rises of recent years have been driven by too many people chasing too few properties?  If so, do you think that the record amount of property on the second-hand market coupled with the record number of new properties on the market will have any effect on prices.

An increase in inventory coupled with a reluctance on the part of buyers to leap into a market that the media tells them is ripe for a fall = potential for a fall in prices (although nothing is certain of course)


----------



## gearoidmm

paddyd said:


> a believable interest rate?
> 
> btw, relating to that new blog, spawned from this thread, how many cached myhome.ie house price INCREASES could we find, going back through the past 6 months, in response to this list of decreases? Many multiples I guess



If you find them, post them.  I'm still not convinced wither way.  That said, even the EA are admitting that prices overall haven't increased for nearly 6 months and given their historical exaggeration of price rises, this represents a sea change.


----------



## paddyd

gearoidmm said:


> I understand what you're saying in defense of the market but would you not agree that the price rises of recent years have been driven by too many people chasing too few properties? If so, do you think that the record amount of property on the second-hand market coupled with the record number of new properties on the market will have any effect on prices.
> 
> An increase in inventory coupled with a reluctance on the part of buyers to leap into a market that the media tells them is ripe for a fall = potential for a fall in prices (although nothing is certain of course)


 

Hi Gearoid, its a good point, the prices rises in any market are always driven by supply v demand. No surprise there. However, there is still a very healthy demand in the market.

The large increase of Investors exiting the market is, in part, offset by the decrease in the number of new house builds granted permission for Q4-2006 an 2007 (I think its dropped 25%. It's listed on this thread somewhere from a few weeks back).

Also, while theres certainly a glut of property on the market, it really depends on how much of a rush they are to exit the market. If I had made 200% on my property, and, feeling it was at the top of the market, put it up for sale, and immediately cut 10% of the price in order to secure a sale, I'd do it in a heartbeat. Most however, will be happy to sit tight.

The people with larger mortgages, and in particular Interest Only mortgages will be in the most trouble, and in the biggest rush to sell.

I'm definietly not trying to stiffle the opinions here; its been a fasinating thread  just trying to provide some balance every now and again.


----------



## partisan

StoppedClock said:


> Main Street, Swords,
> North Co. Dublin *Retail Unit For Sale
> 
> *Sale Price: €65,000
> 
> Floor Area: 1,000 sq. feet (93 sq. metres)



Yeah - the title does say that (misleading), but the body of the ad states they're selling the business not the property - otherwise it would be a bargain...

----->

ESTATE AGENCY BUSINESS PLUS LICENCE FOR SALE

 Once off start up opportunity for a discerning purchaser to obtain an active Estate Agency business located in the busy thriving sought after area of Swords. This lucrative business is on Main Street area with excellent footfall. It comes with office furniture,window display & fully operational Auctioneers Licence.

 Would suit Auctioneer, start up Auctioneers or Investor alike.


----------



## 2nz

paddyd said:


> a believable interest rate?
> 
> btw, relating to that new blog, spawned from this thread, how many cached myhome.ie house price INCREASES could we find, going back through the past 6 months, in response to this list of decreases? Many multiples I guess


 
The point is that house prices are falling. The media are sniffing around: http://www.unison.ie/breakingnews/index.php3?ca=9&si=100225

We'll see more stories like this. Sentiment will turn on the market and bare it's teeth.


----------



## partisan

gearoidmm said:


> I understand what you're saying in defense of the market but would you not agree that the price rises of recent years have been driven by too many people chasing too few properties? If so, do you think that the record amount of property on the second-hand market coupled with the record number of new properties on the market will have any effect on prices.
> 
> An increase in inventory coupled with a reluctance on the part of buyers to leap into a market that the media tells them is ripe for a fall = potential for a fall in prices (although nothing is certain of course)



True, but the size of the fall would be limited by the fact vendors won't sell for less than they paid (probably including fees). Unless the economy crashes - they have abolutely no reason to. Also the rental market is bouyant. If investors decide it is time to sell at the top of the market - rents and thus yields might actually rise! That said, a swift fall of around 10% and reduced capital appreciation over the next few years would bring the values back to more realistic levels...


----------



## 2nz

partisan said:


> True, but the size of the fall would be limited by the fact vendors won't sell for less than they paid (probably including fees). Unless the economy crashes - they have abolutely no reason to. Also the rental market is bouyant. If investors decide it is time to sell at the top of the market - rents and thus yields might actually rise! That said, a swift fall of around 10% and reduced capital appreciation over the next few years would bring the values back to more realistic levels...


 
Sensible investors sell when a market peaks and move their money to a stable asset preferably coming out of a trough.


http://irishhousepricesfalling.blogspot.com/


----------



## whathome

partisan said:


> True, but the size of the fall would be limited by the fact vendors won't sell for less than they paid (probably including fees).


 
I bought a house in 1998 for £125,000, that property is now worth more than €600,000. That's quite a fall before your mistaken limit kicks in!


----------



## partisan

whathome said:


> I bought a house in 1998 for £125,000, that property is now worth more than €600,000. That's quite a fall before your mistaken limit kicks in!



I'm not suggesting that there is support at 10%, but why would anyone who has bought or remortgaged since 1998 (including people who bought in the 1990s and have traded up) sell at such a low price? Given the current economic situation, they simply wouldn't have to.

The spec's on homes have markedly increased in recent years - I'm looking at houses right now (so a big fall would be very welcome in some ways) - if prices were to fall to as low as you can afford to sell at, my choice would be limited to a small number of modern houses built in the mid-nineties and a plethora of older ones. I'm pretty sure competition for the new units would drive prices up very fast...

P.S. if you really believe the market is about to crash PM me and I'll take that liability of yer hands for €300,000...


----------



## paddyd

whathome said:


> I bought a house in 1998 for £125,000, that property is now worth more than €600,000. That's quite a fall before your mistaken limit kicks in!


 
This is exactly my point. A lot of investors can afford to sit tight. There is a great deal of property on the market; but surely only those in a panic to sell are reducing prices.


----------



## paddyd

2nz said:


> The point is that house prices are falling.


 
time to wheel out that Garrett Fitzgerald classic quote: 

"What we are seeing is a deceleration in the rate of acceleration"

real house prices are not falling. at worst what we are seeing is the fat being trimmed, on some high-end houses. Is there anyone here who doesn't think that the AMV minus 10% would be a good price for their current house? I'd take it for sure.

There are still enough buyers to support the middle market 3-bed semi's and the like; which make up the majority of the market.


----------



## whathome

partisan said:


> I'm not suggesting that there is support at 10%, but why would anyone who has bought or remortgaged since 1998 (including people who bought in the 1990s and have traded up) sell at such a low price?


 
Why wouldn't they? The market dictates the price!

- A trader-upper will sell their first property at a price below market high if the property they are buying is also below market high. 

- An investor will sell for any number of reasons

- Executor sales on property through probate

- Developers will still make profits even at prices well below market high

- Respossessions

- FTB's feeling the pressure might sell to get out

It's a market, it doesn't stop because some people are below some imaginary threshold


----------



## whathome

paddyd said:


> There are still enough buyers to support the middle market 3-bed semi's and the like; which make up the majority of the market.


 
How do you know this?


----------



## partisan

whathome said:


> Why wouldn't they? The market dictates the price!
> 
> - Trade-uppers A trader-upper will sell their first property at a price below market high if the property they are buying is also below market high.
> 
> - An investor will sell for any number of reasons
> 
> - Executor sales on property through probate
> 
> - Developers will still make profits even at prices well below market high
> 
> - Respossessions
> 
> - FTB's feeling the pressure might sell to get out
> 
> It's a market, it doesn't stop because some people are below some imaginary threshold



I see where you are coming from, but the negative equity threshold is far from imaginary! Anyway, are you going to sell me your house?


----------



## paddyd

whathome said:


> How do you know this?


 
The buyers have not all just vanished into thin air. Whats happened is that the number of houses for them to buy has doubled since the new property season began in Sept. More choice means slower decisions. If I were a buyer, thats what I'd do, I'd wait.
If I were an investor however, I would avoid the market, but as a FTB, I think the best time to buy is still right now. If the house you are looking at represents good value, and in the right location, then my advice is to go for it. It won't be cheaper in 6 months time. It will be the same price, or marginly more expensive.


----------



## whathome

partisan said:


> Anyway, are you going to sell me your house?


 
lol - just sold that one actually - have bought a new one, moving soon


----------



## whathome

paddyd said:


> It won't be cheaper in 6 months time. It will be the same price, or marginly more expensive.


 
Some properties are cheaper for FTB's now then they were a few months back.  How can you be so confident that they are not going to keep getting cheaper?


----------



## partisan

whathome said:


> lol - just sold that one actually - have bought a new one, moving soon



And did u sell and buy at below market rate? Or time it perfectly and sell at the top and buy at a slight reduction?


----------



## whathome

partisan said:


> And did u sell and buy at below market rate? Or time it perfectly and sell at the top and buy at a slight reduction?


 
Sold at below the April market high.  Had to reduce the price once and the final selling price was lower than the previous best achieved by a similar house.  It worked out ok though because the house we are buying was also reduced and we are sale-agreed on that one well below the April high.


----------



## miju

paddyd said:


> a believable interest rate?
> 
> btw, relating to that new blog, spawned from this thread, how many cached myhome.ie house price INCREASES could we find, going back through the past 6 months, in response to this list of decreases? Many multiples I guess



i've looked and can't find any but please do post up any examples you can find in the interests of a balanced thread



partisan said:


> True, but the size of the fall would be limited by the fact vendors won't sell for less than they paid (probably including fees).



right and thats why theres people handing back keys to banks in the states at the moment and walking way from $30,000 deposits and generally trying to sell to lock in any profit / minimise their loss


----------



## partisan

miju said:


> i've looked and can't find any but please do post up any examples you can find in the interests of a balanced thread



I know this is directed at someone else but I've come across one such property during my house hunting the bulk have been marked down (I can't be bothered to help out and look it up on the web though ;-) )




miju said:


> right and thats why theres people handing back keys to banks in the states at the moment and walking way from $30,000 deposits and generally trying to sell to lock in any profit / minimise their loss



That may be the case but the USA is huge, with very different dynamics in each city. Foreclosures in Florida doesn't mean we'll see them here! 

Right now in Dublin there is strong rental demand, a solid job market, SSIA wealth (compare that to US savings!), strong economic growth (we've outpaced the USA!), lower interest rates and an improving European economy (many multinationals headquarter their EMEA operations here)...
I've yet to read reports of large scale repossessions here. The Deutsche Bank report (the one quoted by the uber-bears that highlighted our comfort with taking risks) said that housing was more affordable in Ireland now than the average over the last 16 years! It's unlikely we'll see reposessions anytime soon.


----------



## gearoidmm

paddyd said:


> real house prices are not falling. at worst what we are seeing is the fat being trimmed, on some high-end houses. Is there anyone here who doesn't think that the AMV minus 10% would be a good price for their current house? I'd take it for sure.



Sorry is 'fat being trimmed on some high end houses' not the same as saying that prices are falling on high-end houses?  All these euphemisms...


----------



## Maine

There will be no repossessions. The irish banks have to sell the mortgages to European banks to get finance - they will accept 1 euro a month and a promise to pay next year to avoid repossesions.

We also have to remember that many banks have not passed on the last interest rate rise and it will be probably be march 2007 before the december rate is passed on. That means the first selling season to see full interest rate impact will be autumn 2007. 

One of the reasons for the delays in passing on the interest rate increases could be that the banks know they have had a good 2006, not passing on the increase will lower profits in 2006. This would help the first 3 months of 2007 when it will be vital to convince shareholders that the property slowdown is not impacting them etc etc.


----------



## whathome

partisan said:


> The Deutsche Bank report (the one quoted by the uber-bears that highlighted our comfort with taking risks) said that housing was more affordable in Ireland now than the average over the last 16 years!


Here's a link to the report:
[broken link removed]

Comment in the *Deutsche Bank* report on affordability:


> Affordability has worsened significantly in the last couple of years in most European countries. Only Germany is a striking outlier with houses today being much more affordable than at any other point during the last 20 years.


partisan, could you tell us where in the report it says that housing is more affordable in Ireland now than the average over the last 16 years?


----------



## Remix

Just heard from a friend in the Rosslare area.

A development there has had about forty people pull out and only two proceeding to sale.

I recognise this is very vague so will try to get more details.

music playing in the background here: 
slash-dot-dash-dot slash-dot-dash-dot slash-dot-dash-dot slash dot-com dot-com


----------



## howstrange

paddyd said:


> The buyers have not all just vanished into thin air. Whats happened is that the number of houses for them to buy has doubled since the new property season began in Sept. More choice means slower decisions. If I were a buyer, thats what I'd do, I'd wait.
> If I were an investor however, I would avoid the market, but as a FTB, I think the best time to buy is still right now. If the house you are looking at represents good value, and in the right location, then my advice is to go for it. It won't be cheaper in 6 months time. It will be the same price, or marginly more expensive.



If investors avoid the market which any sane ones would, that should mean that the 40% of new developments which were purchased by these very people will now be available to FTB's. Add in the huge supply thats around at the moment and maybe the 275000 empty properties as reported by the CSO. Is there that many willing FTB's?? Are all us FTB's who are now holding off in droves going to start absorbing all this supply?? I think there is a highly probable chance of this house in the right location being cheaper in 6 months!


----------



## beattie

howstrange said:


> I think there is a highly probable chance of this house in the right location being cheaper in 6 months!


 
I can't think of any locations that won't be cheaper in 6 months time. We have had countless instances of drops from salubrious areas to ones in commuterville so someone really has to have their head in the sand to contend otherwise


----------



## treora

bearishbull said:


> Love this line
> 
> _For €381,000 ‘‘you could be looking at a slightly larger townhouse, in somewhere like Cabra, or a two-up two-down around Arbour Hill’’, Chambers added_



myhome.ie > Arbour Hill > 381,000 = One link *[broken link removed]*


----------



## partisan

whathome said:


> Here's a link to the report:
> [broken link removed]
> 
> Comment in the *Deutsche Bank* report on affordability:
> 
> partisan, could you tell us where in the [broken link removed]eport it says that housing is more affordable in Ireland now than the average over the last 16 years?



Sorry, it is over the last 20 years (I didn't have the report to hand - so was working from memory, thought it started in 1990). Take a look at figure 4 on page 3. Our improved afforability is not as striking as Germany's but it's there none the less and is improved across all 3 data points (vis a vis 1990, vis a vis 1998 and average affordability over the last 20 years).

[broken link removed]

You can see on page 6 we score a 3.0 (a very good score) for affordability risk. Only Germany and Sweden do better. That report highlighted oversupply as a major risk for us (we're seeing this already I think) and our preference for variable rate mortgages (which I think just means that we're more comfortable with risk as a nation - maybe there is more chance of us going bust but there's more chance of us getting wealthy too - compare Warren Buffet's risk profile with the average punters for example ;-) ).


----------



## Debtwish

> Originally Posted by *paddyd*
> _The buyers have not all just vanished into thin air. Whats happened is that the number of houses for them to buy has doubled since the new property season began in Sept. More choice means slower decisions. If I were a buyer, thats what I'd do, I'd wait._
> _If I were an investor however, I would avoid the market, but as a FTB, I think the best time to buy is still right now. If the house you are looking at represents good value, and in the right location, then my advice is to go for it. It won't be cheaper in 6 months time. It will be the same price, or marginly more expensive._


 


howstrange said:


> If investors avoid the market which any sane ones would, that should mean that the 40% of new developments which were purchased by these very people will now be available to FTB's. Add in the huge supply thats around at the moment and maybe the 275000 empty properties as reported by the CSO. Is there that many willing FTB's?? Are all us FTB's who are now holding off in droves going to start absorbing all this supply?? I think there is a highly probable chance of this house in the right location being cheaper in 6 months!


 
I agree with this howstrange. 

Paddyd has just confirmed that there is a huge increase in supply and stated that demand from investors should be waning, but then goes to say that prices will stay flat or rise. But surely this is a compelling argument for lower prices?

This is something I always find amusing. Some people seem prepared to use the supply/demand argument to justify rising prices only, never falling ones.

If inventory were falling dramatically and investor interest was increasing, I would be the first to predict big price increases. But the exact opposite is happening today.


----------



## partisan

Debtwish said:


> I agree with this howstrange.
> 
> Paddyd has just confirmed that there is a huge increase in supply and stated that demand from investors should be waning, but then goes to say that prices will stay flat or rise. But surely this is a compelling argument for lower prices?



Agreed, but how much lower? When rents began to fall a few years back, because there was severe oversupply in the market, price levels didn't collapse.  Who is going to begin below cost selling? The vast majority of high-spec houses are newish units that cost their owners a lot. I don't see the builders dropping their prices much, they're cash rich...


----------



## treora

partisan said:


> Who is going to begin below cost selling?



IO specuvestors that what to cut their loss here and and re-manipulate their mortgage in the Polish new builds, where he will sell before completion netting 10+% /annum.



partisan said:


> Also the rental market is bouyant. If investors decide it is time to sell at the top of the market - rents and thus yields might actually rise!



Bouyant like a rock. The new Irish are already leaving. There might have been some demand a few weeks ago but there were less than 2000 apartments to let in the Greater Dublin area last week. Today daft has over 2500.

One would think with all the apartments going onto the sales market that rental supply would dry up and price increases. But as some posters predicted it appears that the vacant properties are going onto the market and the new Irish see better prospects in a rising continental Europe than a peaked out Ireland. Oh I dare say some of them will take a mortgage with them and invest it more wisely than an April FTB.


----------



## bearishbull

partisan said:


> Agreed, but how much lower? When rents began to fall a few years back, because there was severe oversupply in the market, price levels didn't collapse. Who is going to begin below cost selling? The vast majority of high-spec houses are newish units that cost their owners a lot. I don't see the builders dropping their prices much, they're cash rich...


 
Below cost selling? Do you not mean below purchase price selling? There is always and will always be distressed sellers. Prices are set at margins and once a negative sentiment cycle is initiated it takes a lot to stop that. You seem to think the fact that a lot of people will hold out and not sell at lower prices will prevent market from falling further, this is not the case. 

Builders will be quite happy to drop prices by 20% if they are'nt selling many of the properties they have recently built, builders hate getting stuck with properties in a flat or falling market as they have to continue paying interest on the finance for their developments and they want to get their hands on their capital for other projects. Builders would probably still make profits on properties being sold now if market prices dropped 20% overnight, once they could actually sell them .

Amateur investors will sell to bank profits or prevent further cash drainage once they see low/zero capital growth. Low capital growth makes investment less attractive so there will be less investors buying and less demand in total meaning prices would go lower.


----------



## JayDub

treora said:


> There might have been some demand a few weeks ago but there were less than 2000 apartments to let in the Greater Dublin area last week. Today 2513. (Sorry no links)


 
The link is here - http://www.daft.ie/lettings/
Available now in Dublin City: 1,988 Houses To Let, 2,512 Apartments To Let, 128 Flats To Let and 70 Studios To Let


----------



## Debtwish

partisan said:


> Who is going to begin below cost selling? The vast majority of high-spec houses are newish units that cost their owners a lot. I don't see the builders dropping their prices much, they're cash rich...


 
Builders cash rich?

Take a look at Grafton's net debt and how it is increasing year on year. It is now around €600m.

[broken link removed]

...And Pierse that are involved in several developments I have seen around my way - total liabilities due after more than one year > €40m.

[broken link removed]


This is not unusual in the building industry. Many builders carry significant liabilities on their balance sheets. This is fine in a bouyant market as cash flows comfortably cover service costs. But in a slowdown it becomes a problem. A builder cannot afford to sit on inventory for long - they have big bills to pay, and they will cut prices as necessary to shift it.

I agree with you that there will be stubborn owners that hold out for a better price, but if they are consistently being undercut by the developer down the road, they won't be selling their property in the short or even medium-term.


----------



## phoenix_n

phoenix_n said:


> Since i think i called the crash here first i am going to reiterate again my figure of a fall.
> 
> 40% by xmas. Main Dublin market with the obvious exceptions. (i.e. leafy surburbs)


 


> Estate agents have slashed prices by as much as 33 per cent in order


http://www.unison.ie/breakingnews/index.php3?ca=9&si=100225

...and some thought i was crazy


----------



## phoenix_n

Originally Posted by *phoenix_n* http://www.askaboutmoney.com/showthread.php?p=295107#post295107
_Supply still increasing. Now 54 for sale in phibsboro area._



phoenix_n said:


> Now 56.


 
Now 59.


----------



## soma

partisan said:


> SSIA wealth (compare that to US savings!)



Many irish people would appear to interpret someone who has a 20k SSIA on the way, but who has a 10-20K credit card bill, as a "good saver".


----------



## whathome

partisan said:


> You can see on page 6 we score a 3.0


 
You're right, I was surprised by this - it's a better number than I would have expected.  Even with that, we still end up with the highest overall risk of a crash without any external stimulus.


----------



## Bedsit

I was driving through Rathgar village last night and saw that Gunne have closed thier offices there.


----------



## Remix

Bedsit said:


> I was driving through Rathgar village last night and saw that Gunne have closed thier offices there.


 

They've moved up the road to be amongst the dense cluster of estate-agents and lenders that is known as Terenure Village.


----------



## partisan

whathome said:


> You're right, I was surprised by this - it's a better number than I would have expected.  Even with that, we still end up with the highest overall risk of a crash without any external stimulus.



Risk / reward. We also have the most property wealth in Europe, and we fall to second when the contagion effect is added in.



Debtwish said:


> Builders cash rich?
> 
> Take a look at Grafton's net debt and how it is increasing year on year. It is now around €600m.
> 
> [broken link removed]
> 
> ...And Pierse that are involved in several developments I have seen around my way - total liabilities due after more than one year > €40m.
> 
> [broken link removed]
> 
> 
> This is not unusual in the building industry. Many builders carry significant liabilities on their balance sheets. This is fine in a bouyant market as cash flows comfortably cover service costs. But in a slowdown it becomes a problem. A builder cannot afford to sit on inventory for long - they have big bills to pay, and they will cut prices as necessary to shift it.
> 
> I agree with you that there will be stubborn owners that hold out for a better price, but if they are consistently being undercut by the developer down the road, they won't be selling their property in the short or even medium-term.



I'm not an accountiant, so I'm not 100% sure how to intrepret these, but do Grafton not also have  813.8 million in retained profits?


----------



## Afuera

partisan said:


> You can see on page 6 we score a 3.0 (a very good score) for affordability risk.



This was the one figure in that report that seemed a bit strange I thought. If our affordability index was so good, then why have our personal debts been rising so fast? Is this explained by the lack of risk the Irish feel while taking on debt (since we've never encountered a full on bust before) or could it be that people are incorrectly reporting their earnings so as to get on the ladder?


----------



## whathome

partisan said:


> Risk - reward.


 
In a property market, you get maximum reward when risk is low (high yields and low income multiples).

The Irish property market right now is like a drunk who decides to have three more whiskeys before driving home. He might just make it but I wouldn't want to be a passenger!


----------



## phoenix_n

This whole 'stamp duty' issue is really masking the inherrent problems in the market. The supply side and the speculative value of houses is ignored for now only to be re-visited when cowen doesn't change the tax system. Vendors will then have to resign themselves to the fact that without heavy discounting to attract cash-rich investors/home-owners they will soon realise just how illiquid an asset property can be.


----------



## fatmanknows

whathome said:


> ...............................................................
> The Irish property market right now is like a drunk who decides to have three more whiskeys before driving home. He might just make it but I wouldn't want to be a passenger!


 
i like that little anology.


----------



## partisan

whathome said:


> In a property market, you get maximum reward when risk is low (high yields and low income multiples).



I think it only seems that way with hindsight. Markets with high yeilds and low income multiples are normally that way for a reason - either they've just come through a crash or have a stagnating economy (or an economy that's just starting to grow). You're taking on all sorts of risks (high vacancy, unsustained economic growth) although looking back it might not seem that way. It's easy to look back at the last 20 years and think it was a sure thing, or that investing in Microsoft in the 80's was a guaranteed winner (in all likelihood people in 20 years people will look back at Google similarly, but right now I think there's still a lot of risk in that stock). Compare that with Ireland now - you're pretty much guaranteed good occupancy at high rents, full employment, superlative economic growth for nearly two decades... The risk has moved from market risk to other areas (supply etc).



whathome said:


> The Irish property market right now is like a drunk who decides to have three more whiskeys before driving home. He might just make it but I wouldn't want to be a passenger!



Fasten your seatbelt - you _are_ a passenger!


----------



## thejuggler

Just to report on sentiment from outside the pale
 I went to two open house viewing yesterday afternoon in Cork city.  In both houses I found a lonely estate agent who was clearly delighted to see me (looks like I was their only viewer so far that day)
Open house viewings and weekend/out of office hours viewings are unusual here in any case so it seems that agents are getting desperate to get viewers in the door.
The agent was very keen to take my details so that they could get back to me today to see if I wanted to make an offer.  I've been househunting for the last year or so and have never received such attention or interest from any agent.  The tide is turning alright.


----------



## fatmanknows

http://www.rte.ie/business/2006/1023/house.html

House prices moderating as demand falls - AIB


 
About a near as you're gonna get to a confession.


----------



## whathome

partisan said:


> IIt's easy to look back at the last 20 years and think it was a *sure thing*, or that investing in Microsoft in the 80's was a guaranteed winner (in all likelihood people in 20 years people will look back at Google similarly, but right now I think there's still a lot of risk in that stock).


 
You can't compare the movement of a property market with an individual technology company on the stock exchange. 

By the way, I sold Microsoft stock in 2000 - maybe I should have sold it to you? 

Take a look at the MSFT graph - so much for a *sure thing*! If you bought at the peak 6 years ago, you would still be down by more than 50% now.
[broken link removed]


----------



## plaudit

fatmanknows said:


> http://www.rte.ie/business/2006/1023/house.html
> 
> House prices moderating as demand falls - AIB
> 
> 
> 
> About a near as you're gonna get to a confession.


 
I love this bit of the article:

_Overall, he said that the market 'looks to be cooling towards the much sought after soft landing'._

They are trying to talk the guy down the stairs from the rooftop but will he jump?


----------



## Duplex

plaudit said:


> I love this bit of the article:
> 
> _Overall, he said that the market 'looks to be cooling towards the much sought after soft landing'._
> 
> They are trying to talk the guy down the stairs from the rooftop but will he jump?


 

Is that the same soft landing that was promised for housing in the US? Or is this the new improved Irish version.  I think it will probably be the Japanese model where the landing goes on and on and on........


----------



## plaudit

Is a 33% drop soft?

_Estate agents have slashed prices by as much as 33 per cent in order to get properties sold.
_


----------



## Zarathustra

This is new to me; a guaranteed upper limit on a sales price: "FIRST OFFER OF €620,000 FROM SUITABLE BIDDER WILL SECURE  THIS ATTRACTIVE 4 BED SEMI DETACHED HOME."

[broken link removed]

Also, I noticed in yesterday's Tribune, that a property in Greystones sold at auction for less than its AMV. I don't have the paper to hand, nor can I find the result online. Anyone?


----------



## Open_Window

thejuggler said:


> The agent was very keen to take my details so that they could get back to me today to see if I wanted to make an offer.  I've been househunting for the last year or so and have never received such attention or interest from any agent.  The tide is turning alright.




Then you know what to do, shop around and take you time, take 12 more months and you might find the prices even cheaper.


----------



## phoenix_n

Zarathustra said:


> This is new to me; a guaranteed upper limit on a sales price: "FIRST OFFER OF €620,000 FROM SUITABLE BIDDER WILL SECURE THIS ATTRACTIVE 4 BED SEMI DETACHED HOME."
> 
> [broken link removed]
> 
> Also, I noticed in yesterday's Tribune, that a property in Greystones sold at auction for less than its AMV. I don't have the paper to hand, nor can I find the result online. Anyone?


 
on daft for 625
[broken link removed]

More than likely the initial sale fell thru and are anxious to sell. Noticed that a house on my street which eventually went sale agreed at end of summer is now back on the market. The market is all about timing and those selling now really should have cashed in earlier this year.


----------



## zac

phoenix_n said:


> http://www.unison.ie/breakingnews/index.php3?ca=9&si=100225
> 
> ...and some thought i was crazy



so PTSB index will be down 10% each in Sep, Oct, Nov and Dec?


----------



## phoenix_n

"Stressed Vendor"

http://www.askaboutmoney.com/showthread.php?t=39583


----------



## Debtwish

partisan said:


> I'm not an accountiant, so I'm not 100% sure how to intrepret these, but do Grafton not also have 813.8 million in retained profits?


 
The 813.8m figure is shareholders funds and that is not real money in the bank. It is just an expression of issued share capital and reserves (profits undistributed that may have been spent elsewhere such as materials and land)

Grafton was over half a billion in debt last year and that's NET DEBT. i.e. Debt minus cash deposits and short term investments.


----------



## JayDub

Zarathustra said:


> This is new to me; a guaranteed upper limit on a sales price: "FIRST OFFER OF €620,000 FROM SUITABLE BIDDER WILL SECURE THIS ATTRACTIVE 4 BED SEMI DETACHED HOME."
> 
> [broken link removed]
> 
> Also, I noticed in yesterday's Tribune, that a property in Greystones sold at auction for less than its AMV. I don't have the paper to hand, nor can I find the result online. Anyone?


 
Thats nothing compared to this.
http://www.unison.ie/stories.php3?ca=9&si=1710770&issue_id=14797
"Buy a new three-bedroom home in one of the most idyllic settings in the country, with pristine lake water gently lapping just yards from your front door. The property will be fully furnished, and you will even receive free membership of the local and splendid 18-hole golf club. Just for good measure, the developer insists on throwing in a brand new motor boat, plus your own berth at the nearby private marina. And the price is . . . less than €300,000."

Anyway the good news for the bulls is all the homes sold out on launch day in June. The bad news is two of the contracts have just been returned to the developer and the properties are back on the market. So even though the properties are fully furnished Section 23 homes with a free golf membership and a 17 foot boot with a vaue of €16,500, 2 contracts were returned.


----------



## Maine

JayDub said:


> Thats nothing compared to this.
> http://www.unison.ie/stories.php3?ca=9&si=1710770&issue_id=14797
> "Buy a new three-bedroom home in one of the most idyllic settings in the country, with pristine lake water gently lapping just yards from your front door. The property will be fully furnished, and you will even receive free membership of the local and splendid 18-hole golf club. Just for good measure, the developer insists on throwing in a brand new motor boat, plus your own berth at the nearby private marina. And the price is . . . less than €300,000."quote]
> 
> 1. " We gave away an opel corsa" - brilliant perspective
> 2. Just over the road from Carrick .....where EAs will not take property onto their books - S23 here so you can see why
> 3. 2 years guaranteed rent.....
> 4. He is off to build more .....no worrys about supply


----------



## treora

JayDub said:


> The link is here - http://www.daft.ie/lettings/
> Available now in Dublin City: 1,988 Houses To Let, 2,512 Apartments To Let, 128 Flats To Let and 70 Studios To Let



"And later that day back in the bat-cave":  http://www.daft.ie/lettings/, 
1,995 Houses To Let, 2,540 Apartments To Let, 130 Flats To Let and 71 Studios To Let.  Nothing went down, no one has taken off the letting market and tried to sell.  Creeping to oblivion in both the rental and sales markets.


----------



## gearoidmm

treora said:


> "And later that day back in the bat-cave": http://www.daft.ie/lettings/,
> 1,995 Houses To Let, 2,540 Apartments To Let, 130 Flats To Let and 71 Studios To Let. Nothing went down, no one has taken off the letting market and tried to sell. Creeping to oblivion in both the rental and sales markets.


 
These figures aren't accurate.  They vary wildly from day to day and include multiple entries.  You need to click search and the total number of properties at the top of the page is the actual inventory


----------



## partisan

Debtwish said:


> The 813.8m figure is shareholders funds and that is not real money in the bank. It is just an expression of issued share capital and reserves (profits undistributed that may have been spent elsewhere such as materials and land)
> 
> Grafton was over half a billion in debt last year and that's NET DEBT. i.e. Debt minus cash deposits and short term investments.



Ah, that makes sense. So is there away to see their current cash balance vis a vis their interest payments on the balance sheet?  Cashflow seems alot higher for 2005 at 206.5 million than 31.2 million in interest payments. Do you think if sales volumes drop they won't be able to make their interest payments? How far would volumes have to drop (and how fast) before that became a factor?


----------



## Debtwish

partisan said:


> Ah, that makes sense. So is there away to see their current cash balance vis a vis their interest payments on the balance sheet? Cashflow seems alot higher for 2005 at 206.5 million than 31.2 million in interest payments. Do you think if sales volumes drop they won't be able to make their interest payments? How far would volumes have to drop (and how fast) before that became a factor?


 
The RNS statement from March for the full year is here (if you are that interested)

http://www.investegate.co.uk/Article.aspx?id=200603150700298088Z

As a builders merchant, it slightly different from looking at a developer. They also have a significant portion of their business outside Ireland which muddies things further. So as to how much the slowdown will hurt these guys, it is hard to say. I guess their UK arm will do well from the Olympics.


----------



## partisan

Debtwish said:


> The RNS statement from March for the full year is here (if you are that interested)
> 
> http://www.investegate.co.uk/Article.aspx?id=200603150700298088Z
> 
> As a builders merchant, it slightly different from looking at a developer. They also have a significant portion of their business outside Ireland which muddies things further. So as to how much the slowdown will hurt these guys, it is hard to say. I guess their UK arm will do well from the Olympics.



Developers slashing prices is the only way I can see a real, severe, crash happening.. So, I am that interested ;-)

Thanks!


----------



## phoenix_n

phoenix_n said:


> "Stressed Vendor"
> 
> http://www.askaboutmoney.com/showthread.php?t=39583


 
There was 264 views on that thread in the last hour. Indicative of the number perusing this thread ?


----------



## redo

14 Oldbridge Park Lucan

Old Price 395k
[broken link removed]

New price 360k
[broken link removed]


----------



## topman

Originally Posted by *whathome* http://www.askaboutmoney.com/showthread.php?p=302357#post302357 
_.................................................. .............
The Irish property market right now is like a drunk who decides to have three more whiskeys before driving home. He might just make it but I wouldn't want to be a passenger!_


_That is a good Analogy. Homer Simpson and Santa's little helper come to mind. _


----------



## topman

*AIB predicting economic growth of 6% for this year *
23/10/2006 - 12:48:26 

AIB is predicting economic growth of 6% for this year, an increase of half a percentage point on last year.

However, in its latest forecast, the bank says growth should start to wane from next year as interest rates continue to rise and house prices stabilise.

AIB economist John Begg says Ireland's performance so far this year has been impressive, but Finance Minister Brian Cowen should steer clear of a giveaway budget and not do anything to upset the housing market.​


----------



## bearishbull

http://www.finfacts.com/irelandbusinessnews/publish/article_10007747.shtml

interesting.


----------



## ajapale

BB Please note


----------



## Open_Window

Just filing through my notes and found this, I posted it up on an old forum, its a quote from Brian Cowen when asked about the Irish Property Market a good few months ago. This interview (radio, possibly Newstalk or RTE) I think was pre McDowells Stamp Duty Kite flying exercise.

I believe he was being asked if the growth could be sustained or was it close to a crash something like that, his response was,

"we are in a new situation....... a new situation"

So our Minister for Finance firmly believe in the "new paradigm" , that Ireland is indeed performing on a new set of economic laws, divergent from the universe at large.


----------



## powderblue78

I think the banks must be seeing a massive dropoff in FTBs.

- AIB handing out 2,000 cash to any new FTBs. I passed several several massive billboards advertising this on the way home tonight
- NIB droping their rates 0.5% for non-FTBs. They have obviously realised they won't be able to grow their business with FTBs so are targetting other banks mature customers instead.

Everyone I have talked to who was considering buying has suddenly decided to wait and see because they think they wil get a better deal next year. 6% house price growth next year my ass. John Begg can see the FTB mortgage sales curve plummeting but is still wheeled out to make ridiculous reports like this. Hilarious


----------



## asdef

Heard from a friend of a lawyer that conveyancing business has dropped somewhat recently. Certainly still business, just not as hectic as earlier in the year.

Really just confirms what is obvious from daft.ie, myhome.ie, and signs on the streets - the market has slowed.


----------



## edo

> I think the banks must be seeing a massive dropoff in FTBs.
> 
> - AIB handing out 2,000 cash to any new FTBs. I passed several several massive billboards advertising this on the way home tonight
> - NIB droping their rates 0.5% for non-FTBs. They have obviously realised they won't be able to grow their business with FTBs so are targetting other banks mature customers instead.
> 
> Everyone I have talked to who was considering buying has suddenly decided to wait and see because they think they wil get a better deal next year. 6% house price growth next year my ass. John Begg can see the FTB mortgage sales curve plummeting but is still wheeled out to make ridiculous reports like this. Hilarious


I totally concur - either its denial or the banks are staring the facts straight in the face and have decided to throw on their "Ronaldinho" Supersub economists on for the last 10 minutes to see if it will get them over the finish line to their christmas bonuses which by April this year they must assumed were in the bag.(eg Begg . O'Leary, McLaughlin and the unforgettable Austin Hughes)

From the Indo - this morning


http://www.unison.ie/irish_independent/stories.php3?ca=9&si=1711087&issue_id=14798

and there's more - go figure - having read the above

http://www.unison.ie/irish_independent/stories.php3?ca=9&si=1711139&issue_id=14798

and sure its only a few billion - here and there and we'll be looking for more

http://www.unison.ie/irish_independent/stories.php3?ca=9&si=1710989&issue_id=14798

http://www.unison.ie/irish_independent/stories.php3?ca=9&si=1711004&issue_id=14798


----------



## phoenix_n

phoenix_n said:


> Originally Posted by *phoenix_n*
> _Supply still increasing. Now 54 for sale in phibsboro area._
> Now 59.


Supply now 61.


----------



## ajapale

Phoenix,

How does your post contribute to the Debate? "Current public sentiment towards the housing market?"

aj


----------



## phoenix_n

ajapale said:


> Phoenix,
> 
> How does your post contribute to the Debate? "Current public sentiment towards the housing market?"
> 
> aj


 
I merely am noting the supply side increasing in a particular suburb. In my opinion it is the supply factor which will have the most important effect on sentiment and by noting an increase in just one area is indicative of total supply.


----------



## ajapale

Ok, but try to make meaningful contributions consisting of full English sentences. This will make for a better debate.


----------



## Arthur Daley

Another debate on Newstalk this morning about stamp duty and it's affects on the market. An estate agent, and an economist (from H & McDonald I think) arguing it's all stamp duty's fault for the slump. The economist reckoned that prices would continue to remain high as there was no shortage of demand around Dublin for property - supply wasn't keeping up with the demand he argued!!!!............

I texted in that they kept having property vested interest love ins on the show and they needed to find some property bears to talk to and also that stamp duty is a red herring, (as pointed out previously on this thread). In fairness to Ger Gilroy he read the text out along with a similar one saying the the bubble was bursting. 

Surely at this stage stamp duty can't be an issue with buyers holding off as you can just ensure that the deal closes the far side of the budget in 6-7 weeks because everyone expects SD thresholds to go up?


----------



## howstrange

Selected a few random areas to count supply on 12th Oct. Did the same today. These are the figures (myhome.ie):

Clonsilla 150 (up from 138)
Lucan 242 (up from 238)
Blanchardsown 84 (up from 76)
Knocklyon 46 (up from 41)
Inchicore 55 (up from 49)
Kilmainham 36 (up from 30)

=> In the last 10 days in every one of these areas, the supply has gone up considerably. Looks like a soft landing to me!!!!!!!!


----------



## d53

In the short term, if houses sell more slowly, the effect will be an increase in supply as new ones continue to come on to the market.  I don't think that these quoted figures over a fortnight could be taken has evidence of a soft landing.

d


----------



## soma

howstrange said:


> Selected a few random areas to count supply on 12th Oct. Did the same today. These are the figures (myhome.ie):
> 
> Clonsilla 150 (up from 138)
> Lucan 242 (up from 238)
> Blanchardsown 84 (up from 76)
> Knocklyon 46 (up from 41)
> Inchicore 55 (up from 49)
> Kilmainham 36 (up from 30)
> 
> => In the last 10 days in every one of these areas, the supply has gone up considerably. Looks like a soft landing to me!!!!!!!!



As an attempt at balance.. I've noticed the supply (on myhome.ie) in Ranelagh lowering (but only slightly). From a high of about 55 a few weeks ago, to 48 now. 

However it has to be said that that is still a very high number for such a small suburb.


----------



## howstrange

d53 said:


> In the short term, if houses sell more slowly, the effect will be an increase in supply as new ones continue to come on to the market.  I don't think that these quoted figures over a fortnight could be taken has evidence of a soft landing.
> 
> d



Sorry i was being sarcastic!! I was just showing that supply is building up quite rapidly in several areas. None of these areas showed a decline in supply. As you say add these to all the new developments coming on board too. I dont believe we can have a soft landing at this stage. Things have gone too far! When we have EA's, banks and economists from Hooke and McDonald on the radio every single day trying to convince us that we are having a soft-landing then we know we are in trouble! They are very worried men!!!


----------



## Arthur Daley

d53 said:


> I don't think that these quoted figures over a fortnight could be taken has evidence of a soft landing.
> 
> d


 
Wasn't there a bit of sarcasm there? About the soft landing


----------



## plaudit

howstrange said:


> When we have EA's, banks and economists from Hooke and McDonald on the radio every single day trying to convince us that we are having a soft-landing then we know we are in trouble! They are very worried men!!!


 
My thoughts exactly, all the VI's are getting as much exposure as they can to preach about the soft landing, inflation could well be 4% next year so anything less than 5% house price growth and prices will really have fallen.


----------



## Jason7

Arthur Daley said:


> Another debate on Newstalk this morning about stamp duty and it's affects on the market. An estate agent, and an economist (from H & McDonald I think) arguing it's all stamp duty's fault for the slump. The economist reckoned that prices would continue to remain high as there was no shortage of demand around Dublin for property - supply wasn't keeping up with the demand he argued!!!!............
> 
> I texted in that they kept having property vested interest love ins on the show and they needed to find some property bears to talk to and also that stamp duty is a red herring, (as pointed out previously on this thread). In fairness to Ger Gilroy he read the text out along with a similar one saying the the bubble was bursting.
> 
> Surely at this stage stamp duty can't be an issue with buyers holding off as you can just ensure that the deal closes the far side of the budget in 6-7 weeks because everyone expects SD thresholds to go up?


I was the other person who texted in bout the bubble bursting , very surprised he read them out . Have to agree with the other posters, every current affairs programme for last 1 / 2 weeks has had a segment devoted to the vested interests , they are running scared imo . 

I am a FTB and have noted the change greatly over last few months . had been lookin to buy early in 2006 but got priced out . I now have estate agents leaving messages on my mobile at least twice aweek and my mortgage broker is all over me like a rash trying to get me to draw down the loan .This is an example of the junk she is sending me "Have you been looking at any New Developments – there were quite a lot launched recently. In many cases a new development is perfect as a first property – you don’t have to do much work to it, you don’t have any stamp duty if you are an owner occupier and they tend to increase in value in the short term."

And what about the long term?? I for one am quite happy to rent in Ranelagh saving myself approx 1,300€ in net cash flow per month compared with having a mortgage in the same area and I know alot of my peers in the same position are quite happy to stay out of property market for as long as it takes for the market to start making sense again.


----------



## genki33

Funny, I texted in to Newstalk also, told them they were a disgrace having three bulls on a supposed balanced news item, and that I was switching over to Radio1, which I did.
Take it they didn't read that one out. ;-)


----------



## MadPad

Jason7 said:


> I was the other person who texted in bout the bubble bursting , very surprised he read them out . .....


 
fair play for texting in... 

2 of the 3 panelists believed that nothing significant would happen in the budget. they all seemed to be pleading for something to happen, the interview sounded like a pre budget submission.

I was struck by the lack of consistency in the pleadings for significant stamp duty adjustments. At one stage after asking for the increase in thresholds, the VI basically said that when this happened before, prices just increased, and that it would probably happen again. The hard questions of why should the money go to the seller rather than the government or what was the point in such a temporary measure wasnt asked.

There was no concern expressed for FTB's to get on the ladder, it just looked like a desperate plea to keep the increases going, let a few FTB's buy and then hopefully the price momentum will swing back towards increases.

Fair play to Ger Gilroy for reading out the texts but this is the first time i've heard him interview someone on this topic and it really sounded more like an advertisement than an interview. At least with an ad, they have to do the old "_terms and conditions apply_" stuff at the end. 

But interviews like that and the non stop ads for property in Ireland, are telling their own story to anyone who is willing to listen.


----------



## Strawberry B

Could somebody please re-post the link to the "house price's falling" blog?
Thanks in advance


----------



## howstrange

Strawberry B said:


> Could somebody please re-post the link to the "house price's falling" blog?
> Thanks in advance



http://irishhousepricesfalling.blogspot.com/


----------



## MadPad

Duplex said:


> ........


 
http://irish-property-bubble.blogspot.com/  to be fair seems to be one of the first blogs....


----------



## MadPad

Interesting, seems very old fashioned in todays Ireland...


----------



## Maine

edo said:


> I totally concur - either its denial or the banks are staring the facts straight in the face and have decided to throw on their "Ronaldinho" Supersub economists on for the last 10 minutes to see if it will get them over the finish line to their christmas bonuses which by April this year they must assumed were in the bag.(eg Begg . O'Leary, McLaughlin and the unforgettable Austin Hughes)


 
It is vital for the banks that the slowdown does not become ingrained in public minds.  Combine this with NIB and their new rate cherry picking the best customers and it is starting to get competitive.

Furthermore Irish banks have not used the years of plenty at home to invest abroad and instead have just become property lenders....although highly profitable ones.  No wonder 6% soft landing Beggsy had to get out there.


----------



## gurramok

edo said:


> From the Indo - this morning
> http://www.unison.ie/irish_independent/stories.php3?ca=9&si=1711139&issue_id=14798



20% of new builds empty since 2002!.

From cso stats on completed builds thats something like 57,000 new builds bought by speculators, a year's supply of housing!

Plus the second hand market numbers are not included, alot of inventory will flood the market more now that capital appreciation is on a downward trend.
There is NO housing shortage, only greed.


----------



## phoenix_n

gurramok said:


> 20% of new builds empty since 2002!.
> 
> From cso stats on completed builds thats something like 57,000 new builds bought by speculators, a year's supply of housing!
> 
> Plus the second hand market numbers are not included, alot of inventory will flood the market more now that capital appreciation is on a downward trend.
> There is NO housing shortage, only greed.


 
Exactly and that is the argument against a repeat of the upswing in prices in 2001. A far greater supply and , equally importantly, the current speculative value of existing houses.

As a side note I have seen houses now on sale which reflect the 'new' price and the 'old' price with the latter looking outdated by current prices.


----------



## Marie

Awhile back on this thread the presence of "one-third of the housing stock lying empty" was identified.  The current building-programme figures (80,000 a year for the past few years) have gone _on top_ of that.  

_Forecasts suggest that 71,900 homes will be built per year between 2007 - 2011, which will fall to about 61,000 per year after that. But the report warns that a lack of new homes coupled with high prices is discouraging skilled immigrants from coming here_. 

Surely this can't be true?  It represents an additional 359,500 units on top of what already exists?  I wonder where they got this figure (and who makes these decisions!!!!)


----------



## Maine

Per AIB the housing stock will be valued at 700,000 million at the end of 2006. 

Now if we could work together to just bump that up 15% a year it would be worth 25,000 euros for everyone living in the country or say 50,000 euros for everyone at work !!!


----------



## Remix

re: AIB the housing stock will be valued at 700,000 million at the end of 2006. 

And NASA estimates that the mineral wealth of the asteroids in the asteroid belt might exceed $100 billion for each of the six billion people on Earth.

Well at least they both look good on paper


----------



## Open_Window

I made the point a few years back on the Irish Property News forum, that we had solved the housing crisis, year on year. Humanities greatest problem had been figured out by the Irish no less. Well at least when you looked at our output vs demand. Yet demand doesn't mean those that demand in fact get. This it was never solved in reality.

Simply becasue of the basic greed of the speculators (ordinary joes like you and me) enabled the redirecting of the the much needed & very quickly constructed supply. With tax incentives the Government are utterly complicit in the current peak scenario unfolding.

I see the figures are bearing out all this and more. There is only so long a market can malfunction due to the artificial manipulation of a few before it resets itselfs naturally.

So maybe the fruits of the solution are about to come to us at last.

Whats happens when something is in overabudence, oh yes, the price drops! 

Looks like oversupply will be not the only but the main attribute, with ECB rate hikes being the trigger for the sequence of events. Solely turning sentiment and sending the market south.


----------



## Remix

The Irish Government has announced workers from Bulgaria and Romania will not have free access to the Irish labour market when the two countries become full European Union members in January.

Looks like no repeat of the "immigrants-to-the-rescue" for the investment property market.


----------



## topman

I have read alot of the comments on this thread. They are 99.9 % negative on the property market in Ireland. Would anybody like to state when and by how much properties are going to go down by. Maybe a brief comment 1  or  2 lines beside dates and percentages on why this date and percentage.


----------



## poormouth

Remix said:


> The Irish Government has announced workers from Bulgaria and Romania will not have free access to the Irish labour market when the two countries become full European Union members in January.
> 
> Looks like no repeat of the "immigrants-to-the-rescue" for the investment property market.



It's been mostly the level of immigration which has been propping up the property market in the last few years. Some anecdotes I've heard would seem to support that 1. Investor I know both 2 investent properties in 2002 but was feeling very nervous about them at the time as he was having a hard time getting them rented - immigration seems to have bailed him out. 2. 2nd investor I know bought property last year and has it rented out but no irish people viewed his property when renting - all were immigrants. This is in the galway region


----------



## Sidewinder

topman said:


> I have read alot of the comments on this thread. They are 99.9 % negative on the property market in Ireland. Would anybody like to state when and by how much properties are going to go down by. Maybe a brief comment 1  or  2 lines beside dates and percentages on why this date and percentage.



Nominal falls of 40% from the peak (April 06) over the next 2 years, followed by at least 6 years of nominal stagnation, for a total correction in real terms of about 60%. That's what a sane market would do to correct, anyway. But we all know the Irish property market isn't remotely sane, so predictions are useless really.


----------



## partisan

Sidewinder said:


> Nominal falls of 40% from the peak (April 06) over the next 2 years, followed by at least 6 years of nominal stagnation, for a total correction in real terms of about 60%. That's what a sane market would do to correct, anyway. But we all know the Irish property market isn't remotely sane, so predictions are useless really.



That would take annuity mortgage repayments on a nice two-bed Dublin apartment down to about 500 euros. Do you really see that happening??


----------



## miju

topman said:


> I have read alot of the comments on this thread. They are 99.9 % negative on the property market in Ireland. Would anybody like to state when and by how much properties are going to go down by. Maybe a brief comment 1 or 2 lines beside dates and percentages on why this date and percentage.


 
and with that bang goes the rug from under the "fundamental" immigration reasoning


----------



## exile

topman said:


> I have read alot of the comments on this thread. They are 99.9 % negative on the property market in Ireland. Would anybody like to state when and by how much properties are going to go down by. Maybe a brief comment 1  or  2 lines beside dates and percentages on why this date and percentage.



I think more than 7 of the posts were positive!  A very small number of posters have already made some guesses but it's pure guesswork, I think they just want to have a 'bet' to see if they're right.

I asked a manager in my local BOI branch what he thought.  He gave me the standard BOI figure of 3% rise next year, which amazingly never fluctuates at all regardless of what happens in the market - I assume they see it as a self-fulfilling prophecy of some sort.

To my credit  I didn't let it go unchallenged.  I asked him what he was basing that on and he said "that's what we're hoping for."  Then I pointed out that yields didn't make property a very attractive investment anymore, and investors are making up a lot of the market.  He agreed and said if investors dump their properties then "who knows, there could be a fall of up to 30%."

But I doubt you'll see any press releases saying "BOI predict property market change between -30% and +3% for 2007"  Doesn't mean they're not considering the possibility.


----------



## Arthur Daley

partisan said:


> That would take annuity mortgage repayments on a nice two-bed Dublin apartment down to about 500 euros. Do you really see that happening??


 
But then if you had a correction like this mortgage terms could reduce back to something normal and sustainable as opposed to the 35-40 year terms which people are in HOK to their lenders for nowadays. This would bump up the monthly repayment and don't forget about more realistic interest rates in the future too.


----------



## beattie

exile said:


> But I doubt you'll see any press releases saying "BOI predict property market change between -30% and +3% for 2007" Doesn't mean they're not considering the possibility.[/quote
> 
> I would be shocked if the internal view within BOI wasn't negative for next year. I would have to doubt any investment advice they gave if it wasn't


----------



## Sidewinder

exile said:


> A very small number of posters have already made some guesses but it's pure guesswork, I think they just want to have a 'bet' to see if they're right.



You're right, none of us can claim to _know _what's going to happen, and these predictions are pure guesswork based mostly on hunches and gut feeling and partly on historical rent/value and income/value ratios both here and internationally, and on the experience in other speculative bubbles that popped previously in history in both property and other asset classes. No two bubbles ever pop the same way though, and hey maybe the bulls are right and this time it really is a New Paradigm (TM).

Making a firm prediction like I just did is really just a bit of fun so I can claim bragging rights on this thread sometime in 2010 if I'm right 

I really do believe Irish property is overvalued by at least 50% though.


----------



## partisan

Arthur Daley said:


> But then if you had a correction like this mortgage terms could reduce back to something normal and sustainable as opposed to the 35-40 year terms which people are in HOK to their lenders for nowadays. This would bump up the monthly repayment and don't forget about more realistic interest rates in the future too.



So would you sell your house now to buy it back for 40% less in two years time?

True shorter lending terms would bump up repayments. A mortgage is the cheapest loan you'll ever get and there are plenty of arbitrage opportunities. I don't think 30-40 year terms are anything to be scared of. Presumably they'd still be available to those who want them.

I think interest rates are realistic now, they're going to oscillatate within a much lower range than prior to the Euro!


----------



## Sidewinder

partisan said:


> That would take annuity mortgage repayments on a nice two-bed Dublin apartment down to about 500 euros. Do you really see that happening??



The market will adjust to the point where a 25-year capital repayment mortgage on a "starter home" for an FTB couple on average incomes is equal to or only slightly higher than the rent on the same property. That's sane levels in my book. And people earning big bucks will be purchasing homes in leafy suburbs on 15 or 20 year capital repayment mortgages.

40 year 100% interest-only mortgages are an abomination, should be banned, and are always the sign that the end of a property frenzy is nigh.


----------



## Sidewinder

partisan said:


> I think interest rates are realistic now, they're going to oscillatate within a much lower range than prior to the Euro!



This is only true if inflation remains subdued. We've had low inflation for the last 10 years because of the deflationary impulses coming from Germany, Japan, India and China. Hence low interest rates. If Germany and Japan are returning to growth, Japan has ended the ZIRP, China is starting to export inflation and oil is running out....and we have the predictable monetary after-effects of the massive post-2001 liquidity expansion...

It all screams "persistent high inflation" to me. Which means rates much, much higher than they are now - assuming the ECB are serious about price stability.


----------



## Remix

miju said:


> and with that bang goes the rug from under the "fundamental" immigration reasoning


 
yes, some of the property faith-fundamentals seemed to have taken a shakin' this year.

I'll mention just four  

1. House prices can't fall in Ireland.
2. The ECB is not embarking on a series of rate hikes and interest rates will stay at or around 2% because of the state of the German economy. 
3. Romania and Bulgaria will provide a fresh inflow of workers (i.e renters). 
4. Government won't let house prices fall. (Despite widespread evidence of inventory build-up and price falls, Cowen states directly he will not interfere in the property market in the budget)


----------



## Guest111

Why do people think 35-40 year mortgages are not realistic or sustainable? They're standard practice in Japan for example.
Certainly a lot of people in Ireland will shorten their terms and clear mortgages in a far shorter time than they were set up with.
We are in danger of talking ourselves into a recession and property crash. It happened in Thatcher's Britain but it does not have to happen here. This time it CAN be different. Properties are not overvalued by 50%. As we reach equilibrium, which is happening right now, price growth will slow in Dublin's affluent areas, stagnate in its less affluent areas and prices will fall outside Dublin where property is a touch overvalued.
Only my opinion!


----------



## Arthur Daley

partisan said:


> So would you sell your house now to buy it back for 40% less in two years time?


 
Of course I would. I bought as an ftb a year ago after years as a property bear but I believe fair value is more like 2001 prices. Thing is we don't have a very pure fair market in residential property here, so I must admit i'll take a bit of convincing that this scenario will actually play out. 

What I do know is I won't stand idly by and watch it happen without taking some corrective action. If sufficient momentum gets built up (another 50-100 bps on int rates, and widespread reporting of the esri index falling for 3-6 months) and she looks like she's about to go, I'll lock in whatever equity I can.


----------



## BigM

Sidewinder said:


> The market will adjust to the point where a 25-year capital repayment mortgage on a "starter home" for an FTB couple on average incomes is equal to or only slightly higher than the rent on the same property. That's sane levels in my book. And people earning big bucks will be purchasing homes in leafy suburbs on 15 or 20 year capital repayment mortgages.


 
Agreed. But this readjustment will only come about if the banks stop lending couples absurd multiples of their joint incomes (over 35/40yrs). The truth of the matter is that couples generally get married and have kids. This greatly reduces their available cashflow by either:
(a) one person giving up work/going part-time; or
(b) increasingly expensive childcare costs.
So you are servicing debt based on (sometimes) 10 X combined salaries even though you might now only be earning 1 or 1.5 salary. That requires the kind of wage inflation we are never going to see. 

But the banks will continue to lend as long as they have people who'll borrow - and at longer terms they can afford to charge lower interest rates and still make a fortune.


----------



## Guest111

How do you define a "pure fair market"?


----------



## whizzbang

exile said:


> "that's what we're hoping for."



A smart guy once said "Hope is not a strategy", I don't think banks have "hoped" their way to billion euro profits! These guys know exactly whats going on and are setting them selves up accordingly. 

Try and prolong the bull market with positive sentiment.
Sell off debts to international markets.
Sell off their own property assets (HQs and high profile branches).
Build a war chest to get through the economic winter, maybe do some acquistions of less well prepared banks in a few years.

All good risk minimising steps!


----------



## miju

Andy Doof said:


> Why do people think 35-40 year mortgages are not realistic or sustainable? They're standard practice in Japan for example.
> Certainly a lot of people in Ireland will shorten their terms and clear mortgages in a far shorter time than they were set up with.


 
you have to got to be taking the proverbial if you think that 40yr mortgages are normal , OK in japan they were normal particulalry at the very height of their bubble but so were mulit-generational mortages



Andy Doof said:


> We are in danger of talking ourselves into a recession and property crash.
> ......
> 
> Properties are not overvalued by 50%. As we reach equilibrium, which is happening right now, price growth will slow in Dublin's affluent areas, stagnate in its less affluent areas and prices will fall outside Dublin where property is a touch overvalued.
> Only my opinion!


 
we've long gone past the point of talking ourselves into recession it's more a case at this stage that people are finally beginning to see the writing thats been on the wall for quite a long time

out of curiousity do you think irish property is over / under valued and by how much????

oh and one last thing , prices haven't stagnated they are actually falling , we had a poster earlier tell us of her price drop experiece , as well as plenty of posts showing exmaples of drops in asking prices and the indo artcile detailing 33% drops in asking prices already


----------



## partisan

Arthur Daley said:


> Of course I would. I bought as an ftb a year ago after years as a property bear but I believe fair value is more like 2001 prices. Thing is we don't have a very pure fair market in residential property here, so I must admit i'll take a bit of convincing that this scenario will actually play out.
> 
> What I do know is I won't stand idly by and watch it happen without taking some corrective action. If sufficient momentum gets built up (another 50-100 bps on int rates, and widespread reporting of the esri index falling for 3-6 months) and she looks like she's about to go, I'll lock in whatever equity I can.



I have to say, I admire that!


----------



## MadPad

Arthur Daley said:


> ........ I bought as an ftb a year ago after years as a property bear but I believe fair value is more like 2001 prices.
> ..............What I do know is I won't stand idly by and watch it happen without taking some corrective action. If sufficient momentum ........


 
ah Arthur, Do you seriously think that nobody else has the same idea.... be careful, you could be the guy who buys high and sells low, worst of all possible worlds.


----------



## miju

MadPad said:


> ah Arthur, Do you seriously think that nobody else has the same idea.... be careful, you could be the guy who buys high and sells low, worst of all possible worlds.


 
i'd have to agree with MadPad here Arthur , I mean everyone is obviously thinking the same as the rising inventory levels clearly indicate


----------



## Panzraam

> Why do people think 35-40 year mortgages are not realistic or sustainable? They're standard practice in Japan for example


 
Property prices have been falling in Japan for the last 13 years so I hardly think it serves as a great example for the wisdom of 35/40 mortgages. Certain prime Tokyo homes are worth only 10-20% of the peak value.



> We are in danger of talking ourselves into a recession and property crash


 
You can’t talk yourself into a recession except where the fundamentals allow 




> This time it CAN be different


 
The new paradigm, now I get it


----------



## soma

Andy Doof said:


> Why do people think 35-40 year mortgages are not realistic or sustainable? They're standard practice in Japan for example.



If you're gonna be a property bull, then do yourself a favour a pick a country that *isnt* an example of the destruction that property speculation can wreak..



Andy Doof said:


> Certainly a lot of people in Ireland will shorten their terms and clear mortgages in a far shorter time than they were set up with.



People who bought recently (and who buy now) will realistically only do this if they experience signifcant wage inflation. If this country's international competitiveness gets any worse..



Andy Doof said:


> We are in danger of talking ourselves into a recession and property crash.



Yup, that's right, blame the rational folk, absolve the speculators of responsibility. Sheesh next you'll be telling us "it's different here..".



Andy Doof said:


> This time it CAN be different.



uh oh..



Andy Doof said:


> Properties are not overvalued by 50%.



A hell of alot of mortgages on properties are double or more their rental cost, and this is when (a) interest rates are at at extraordinary low levels ("new math" anyone?) and (b) rental demand is being exaggerated by (IMO) temporary migration (due to the construction mania).



Andy Doof said:


> As we reach equilibrium



I'd see Equililibium as Genuine Demand = Supply
Currently IMO we have something like:
(35% Genuine Demand + 25% FTB panic/fear + 40% pure speculation) = Supply.


----------



## Guest111

Firstly I believe a property is worth what someone is willing to for it.
I also believe that the vast majority of mortgages of 30 years or more will be paid off far earlier. This property boom is a product of the relatively small number of very large family homes in Dublin. These have gone up 10, 20, sometimes thirty fold and the equity has been ploughed back into investment properties, homes for 20 and 30 something children and overseas property. These large homes and the pension legislation governing the self employed ARE THE BOOM. They filter right down through the market, influence the market in every town, every county.


----------



## plaudit

40 yr mortgages are fine for people in their 20's or maybe their 30's, but for FTB's in their 40's or trying to trade up then its not a great option due to them being retired after ~20 years of the mortgage and the banks take their age profile and increased health risks into account too.


----------



## Arthur Daley

miju said:


> i'd have to agree with MadPad here Arthur , I mean everyone is obviously thinking the same as the rising inventory levels clearly indicate


Fair enough, I'll be ok I can also ride out an armageddon if needs be as I've a low LTV. I know that not everyone who has bought in the last 5 years is as lucky (think 40 year terms that made sense at the time, interest only mortgages, 100% ltv etc..). My point is that it'll take a fair shift to change sentiment and attitudes in Ireland, partially because of the fact that a very sharp serious housing crash hasn't happened here in most peoples memory. I think a tipping point for a meltdown hasn't been reached yet by any means.


----------



## Guest111

I am not one of these "this time it's different" merchants.
I believe prices will fall in some of the ludicrous places apartments and houses are being built. Speculators will not have it AS easy.
But there will be no bear market. Would you honestly advise someone with a 3 Bed Semi in Dublin to sell now, put the proceeds on deposit and buy a far superior property when the market collapses?


----------



## Calina

Andy Doof said:


> Why do people think 35-40 year mortgages are not realistic or sustainable? They're standard practice in Japan for example.
> Certainly a lot of people in Ireland will shorten their terms and clear mortgages in a far shorter time than they were set up with.
> We are in danger of talking ourselves into a recession and property crash. It happened in Thatcher's Britain but it does not have to happen here. This time it CAN be different. Properties are not overvalued by 50%. As we reach equilibrium, which is happening right now, price growth will slow in Dublin's affluent areas, stagnate in its less affluent areas and prices will fall outside Dublin where property is a touch overvalued.
> Only my opinion!



35-40 year mortgages are generally sold on the basis that no one will actually have to go the whole way through them; that they will re-mortgage at some point within a couple of years on "better" terms. And that's fine in a rising market, it's fine in a falling interest rate market, it's fine in a rising-wage market. 

But if you're taking out a 35 year mortgage, you really should also look at a worse case scenario of "what if we can't remortgage?" There have been more than a couple of people looking for advice falling "Bank says we can't remortgage/release equity..." which suggests that you can't actually take it for granted. 

Not only that, you have to be relatively young taking out out a 35-40 year mortgage. That means locking down your life at a relatively young age which is fine if you know you're not going to want to travel or doing anything. Interestingly enough I emigrated when I was 21 and came back when I was 27 at which time I was ready to settle down, and most of my friends were bemoaning the fact that they were slightly locked down, couldn't really make any free decisions because of boyfriends/pension considerations/career prospect considerations. 

The fact that 35-40 year mortgages may be standard somewhere else (and choosing a property imploded market like Japan is not a good example) does not make them, per se, a good thing. Personally speaking I think it should be feasible to pay back a mortgage on an average salary in 25 years - and we wouldn't have a bubble if in fact, mortgage lending criteria hadn't been eroded in two key ways - salary multiples and mortgage terms. Mostly, people who are going 30-35 years are right on the limit of their affordability. We did this at a stage when interest rates were historically low, and currently they are travelling up. This makes the position of people on the limit of their affordability very...precarious. 

You seem to give me the impression that a property crash is undesirable. The problem - as I see it - is that an irrationally exuberant property market is equally undesirable and a crash is an undivorceable partner of that. This is really a statement of the obvious but if property values hadn't skyrocketed the way the did over the past 5 years, then we wouldn't be looking at any sort of correction. The property market, as it has behaved over recent years has highlighted planning issues, exacerbated traffic problems and in general, is an example of a lack of joined up thinking in terms of how we want to plan the country going forward. Rocketing growth is not desirable either but I don't see the beneficiaries of that complaining too much, do you

I'm interested to know why you have reached the opinion you did, namely that:

1) property is not overvalued by 50%. Every single person who claims it is backs up their view with some supporting argument. I'd like to see yours. 

2) why can it be different here? 

3) There are examples of prices falling across the more salubrious parts of Dublin which you reckon will see slowing growth (but not falls, from what I can understand). It is falling in less salubrious parts of Dublin. It's also falling outside Dublin. 

I'm generally mistrustful of those who try to localise falls and rises in a slowing market. The truth is the rising tide raised a lot of boats and some of those boats got raised a lot further. I'm of the opinion that the higher a property went - proportionally - the greater its scope for falling. There seems to be this mantra that rich parts of Dublin will somehow escape the worst of a housing correction. 

I assume, normally, that rich people don't get rich by being stupid. I'd be willing to bet that most of them will be happy that they don't have to sell because if properties are not being sold, then you can't assess their market value.


----------



## miju

Andy Doof said:


> Would you honestly advise someone with a 3 Bed Semi in Dublin to sell now, put the proceeds on deposit and buy a far superior property when the market collapses?


 
well given the fact that asking prices are dropping quiet significantly across the board INCLUDING Dublin that wouldn't be a bad suggestion


----------



## howstrange

I have been informed by a certain person in Newstalk that they were aware of who was on the show this morning talking about the property market but those with the view that things are going to go wrong are keeping their head down! Not sure how true this is! Anyway i was told they will redress the piece tomorrow so might be worth a listen..... Will be interesting to see who they get on if anyone at all!!!!


----------



## Guest111

I believe that the less desirable the property/area, the more it is overvalued. The 3 Bed Semi in the commuter belt is the most overvalued of all.
The more exclusive areas have a finite number of properties...so demand will always be there.
I see the market stetching out from Dublin 4, out into Dublin 6, into Rathfarnham, out west, out north, up to Balbriggan, out to Naas, down to Gorey.
Any fall in prices brings all those people concertina like back into Dublin back up the food chain. 
That's why the higher you are up that food chain, the safer you are.


----------



## Arthur Daley

Andy Doof said:


> I believe that the less desirable the property/area, the more it is overvalued. The 3 Bed Semi in the commuter belt is the most overvalued of all.


 
even worse than the 3 bed semi is the 1 or 2 bed apartment in the middle of nowhere.........

I think this point is fair enough and borne out in the supply seen on daft. Places like Drogheda and Mullingar have a huge number of properties (i.e. 250) for sale considering the size of town/city.


----------



## Guest111

Prices are not "dropping significantly" across Dublin!
People are putting what had become the usual ludicrous reserves on properties and they haven't realised them. There hasn't been price deflation. Look at developers launching new phases...are the prices lower than they were before. We are seeing the soft landing most people want to see...not the crash most Joe Higgins/Irish Times moraliser wants to see


----------



## japanman

Andy Doof said:


> Why do people think 35-40 year mortgages are not realistic or sustainable? They're standard practice in Japan for example.


I'm just back from househunting in Japan and went into a few lending institutions too. From what I saw, Japanese usually pay a 20-30% deposit when buying houses and most take out 20-25 year mortgages with at least the first 10 years fixed. I said in a previous post that I could have gotten a 20 year fixed rate mortgage at 3.18%.
Apart from the 5 central districts in Tokyo(out of 23) and some parts of Osaka/Nagoya house prices in Japan are extremely cheap.


----------



## room305

Andy Doof said:


> I believe that the less desirable the property/area, the more it is overvalued. The 3 Bed Semi in the commuter belt is the most overvalued of all.
> The more exclusive areas have a finite number of properties...so demand will always be there.
> I see the market stetching out from Dublin 4, out into Dublin 6, into Rathfarnham, out west, out north, up to Balbriggan, out to Naas, down to Gorey.
> Any fall in prices brings all those people concertina like back into Dublin back up the food chain.
> That's why the higher you are up that food chain, the safer you are.



This is a typical response and has been pointed out on this thread numerous times. The "it might fall elsewhere but it won't fall here because ..."

If prices fall in Balbriggan, or Gorey or wherever, those people aren't gonna have a whole lot of disposable cash or borrowing power to start getting involved in price wars for D4 property.

Without a steady stream of FTBs to prop up the pyramid everything will fall from the very top all the way down to the bottom.


----------



## Guest111

Well there's one urban myth shattered!


----------



## room305

Andy Doof said:


> Would you honestly advise someone with a 3 Bed Semi in Dublin to sell now, put the proceeds on deposit and buy a far superior property when the market collapses?



Without a moment's hesitation.


----------



## Gwynston

Andy Doof said:


> Prices are not "dropping significantly" across Dublin!
> People are putting what had become the usual ludicrous reserves on properties and they haven't realised them. There hasn't been price deflation. Look at developers launching new phases...are the prices lower than they were before. We are seeing the soft landing most people want to see...not the crash most Joe Higgins/Irish Times moraliser wants to see


Have you not been paying attention? There have been examples given of houses sold for less than neighbouring ones went for earlier in the year. Also examples of new phases not commanding the same prices as earlier phases did in the same developments at the peak this spring.

Agreed, it's not a "crash" yet - we're just getting started. But I don't think it will be a "soft landing" either.


----------



## Calina

Andy Doof said:


> Prices are not "dropping significantly" across Dublin!
> People are putting what had become the usual ludicrous reserves on properties and they haven't realised them. There hasn't been price deflation. Look at developers launching new phases...are the prices lower than they were before. We are seeing the soft landing most people want to see...not the crash most Joe Higgins/Irish Times moraliser wants to see



I'm fascinated. Previously it was "oh it's the summer, nothing's moving" and now it's "people were asking for silly prices, now they're facing reality". People have been asking for ludicrous prices for the past five years. The difference is that now they are not getting them. 

Inventory is rising pretty much every day. Almost the only way a soft landing can be managed is if inventory is very carefully managed vis a vis the number of buyers. Unfortunately, neither can be. You can't go to a buyer and say "please buy this" if that buyer thinks "hell if I wait six months, they'll come back and say 'please buy this for ten per cent less than they are asking now'". 

Why should they buy to protect someone else's interest? We're not in the business of protecting the market. The market is cold. For five years it has been fleecing buyers. Now the sellers are starting to feel a little cold.


----------



## Guest111

Which developments? Name them. name a development where a phase being launched right now is cheaper than a previous phase.


----------



## Guest111

A house with an AMV of 1.8 Million is withdrawn or there are no bids and they're now quoting 2.1 Million...yeah that's a massive crash


----------



## MadPad

Andy Doof said:


> .......... That's why the higher you are up that food chain, the safer you are.


 
Works in the jungle   but maybe the more you have, the more you have to lose .... 

If its your home, provided you can pay for it, you're safe.

Another thought on the stamp duty changes. If they abolish stamp duty, it could end up creating greater liquidity in the second hand market and hence worsen a softening market, on the basis that people who think the market has peaked and want to cash in, then can assume lower costs of entry when buying in a year or 2's time... _"Sure sell now, you wont have to pay X grand in stamp duty if you are buying again."_
As usual the only winners are the lawyers. 


I would be very suprised if anything changes in the budget.


----------



## Arthur Daley

Calina said:


> Inventory is rising pretty much every day. Almost the only way a soft landing can be managed is if inventory is very carefully managed vis a vis the number of buyers. Unfortunately, neither can be.


 
Excuse the conspiricy theory but couldn't this discussion be played out with certain developers at the tent at the Galway races next August after a particularly bloody and tight election win?


----------



## edo

> Originally Posted by *Andy Doof*
> _Prices are not "dropping significantly" across Dublin!
> People are putting what had become the usual ludicrous reserves on properties and they haven't realised them. There hasn't been price deflation. Look at developers launching new phases...are the prices lower than they were before. We are seeing the soft landing most people want to see...not the crash most Joe Higgins/Irish Times moraliser wants to see_


Andy , mate , - this is only the start - we are at the very beginning of a slump that is going to run and run.The property market = employment for over 30% at least of the population - you ain't seen nothing yet.

PS - I would have thought the IT was the most property friendly /soft landing forum in the Country!


----------



## whathome

Andy Doof said:


> Which developments? Name them. name a development where a phase being launched right now is cheaper than a previous phase.


 
Timber mill Artane, previous phase was €399,000
Now €395,000 - a small drop but significant given that it's new build 
[broken link removed]=


----------



## BigM

Andy Doof said:


> Which developments? Name them. name a development where a phase being launched right now is cheaper than a previous phase.


Adamstown.
Latest launch a couple of weeks ago was around 20k cheaper than the Spring prices. Don't have time now to hunt down the links but I'm sure somebody will! If not, I'll do it when I get home...


----------



## Calina

Arthur Daley said:


> Excuse the conspiricy theory but couldn't this discussion be played out with certain developers at the tent at the Galway races next August after a particularly bloody and tight election win?



Probably. But I can't see it being implemented successfully. You'll need to prolong the "if you don't buy now" fear factor and I don't know how much longer that's going to wash...


----------



## conor_mc

Andy Doof said:


> I believe that the less desirable the property/area, the more it is overvalued. The 3 Bed Semi in the commuter belt is the most overvalued of all.


 
I'd suggest that the 2-bed apartments in the commuter belt are far, far worse. You can settle down and raise a family in a 3-bed semi while bemoaning the daily commute, but you ain't expanding the old family tree too much in a shoe-box apartment.



Andy Doof said:


> The more exclusive areas have a finite number of properties...so demand will always be there.


 
At this end of the scale, there'll be an even more finite number of potential buyers if the market goes pear-shaped too. We're not exactly churning out non-property millionaires in Ireland these days. Since property has been such an investment du-jour for the last 10 years, how many of those who currently own these exclusive homes might find themselves as "stressed vendors", to say the least. Leverage can bite back.

You have to bear in mind that exclusive areas have a trophy value that the suburbs don't, and that trophy value gets wiped off pretty quickly when money gets tight and homes revert to their original function (ie. a roof over your head) in a downturn.



Andy Doof said:


> I see the market stetching out from Dublin 4, out into Dublin 6, into Rathfarnham, out west, out north, up to Balbriggan, out to Naas, down to Gorey.
> Any fall in prices brings all those people concertina like back into Dublin back up the food chain.
> That's why the higher you are up that food chain, the safer you are.


 
How does this logic work? People who can't afford to buy in Dublin at present can move in when property slumps because their target home in central Dublin won't have slumped as much as their current home.

You're having your cake and eating it......


----------



## Guest111

It does say "from" 395K! That old chestnut...sorry sir, they're all gone but we do have one for 410K!


----------



## conor_mc

Andy Doof said:


> It does say "from" 395K! That old chestnut...sorry sir, they're all gone but we do have one for 410K!


 
I'll give you €395k for it!


----------



## Guest111

It works as follows...we all want to live in Dublin 4. Those who can do, those who can't live in Dublin 6. Nearly all of us want to live in dublin 6...and so on.


----------



## Guest111

395K...done. Actually we've just had a call from a Mr.Smith who's bid 400K. Please send your full and final offer into our Verry IsTerrible office by Friday morning...


----------



## whathome

Andy Doof said:


> It does say "from" 395K! That old chestnut...sorry sir, they're all gone but we do have one for 410K!


 
What do you want, someone here to scan a purchase contract and upload it?   You said name one, and now you can't accept it - poor Andy


----------



## Calina

Andy Doof said:


> It works as follows...we all want to live in Dublin 4. Those who can do, those who can't live in Dublin 6. Nearly all of us want to live in dublin 6...and so on.



No we don't. Personally God nor man wouldn't get me into Dublin 4 as it is too far from where I work. So too is Dublin 6. So it doesn't work as you lay out at all and it is naive to think it.


----------



## MadPad

conor_mc said:


> .......
> How does this logic work? People who can't afford to buy in Dublin at present can move in when property slumps because their target home in central Dublin won't have slumped as much as their current home.
> .......
> .


 
good point but there is some logic there, How much is it worth to someone to live within a 20 minute commute to work vs a 2 hour drive? Ive spent the last 2 years on 1 hour max (within Dublin) and Ive had enough!

My guess is that commute journey time is and will continue to be a major factor in house valuations and will prop up values.


----------



## conor_mc

Andy Doof said:


> It works as follows...we all want to live in Dublin 4. Those who can do, those who can't live in Dublin 6. Nearly all of us want to live in dublin 6...and so on.


 
Aspiring to living somewhere and being able to afford to live somewhere are two very different things.

By your logic, if someone wanted to live in D4, then they'd already be there. When are you going to explain the bull argument about how they afford to get there when the price gap between their current home and their target home is widening?


----------



## whathome

Andy Doof said:


> It works as follows...we all want to live in Dublin 4.


 
Such detailed analysis!!!  Surely you can do better than that?


----------



## MadPad

Andy Doof said:


> It works as follows...we all want to live in Dublin 4. Those who can do, those who can't live in Dublin 6. Nearly all of us want to live in dublin 6...and so on.


 
Thanks Ross O CK


----------



## tallpaul

Andy Doof said:


> A house with an AMV of 1.8 Million is withdrawn or there are no bids and they're now quoting 2.1 Million...yeah that's a massive crash


 
The point is that they actually have to SELL the house. They can ask for 10 million if they like. I think the key thing you said was that they didn't get any bids!!!

Houses not selling at auction was one of the first indicators that the property boom was slowing. I think only around one in ten houses is selling at auction. I also notice around Terenure that a couple of houses that were initially for auction (in an area where nearly all houses have heretofore been sold in this manner) are now for sale by private treaty.


----------



## Guest111

Lol...a touch harsh 
A difficult one to prove as without going out there you don't know if it's like for like.
I know from my own situation I've a few properties of different types. all have obviously seen spectacular capital apprecation, which slowed, slowed more and has now stagnated or is moving a little. Am I worried? No. Will their value go down a little in the short term? Maybe but I don't think so. Am I insulated against a slump because I bought sensibly - I'd like to think so


----------



## Guest111

It's not the person sitting in their house way outside Dublin, it's the first time buyer/immigrant who aspires to live closer to the city


----------



## whathome

Andy Doof said:


> I know from my own situation I've a few properties of different types. all have obviously seen spectacular capital apprecation, which slowed, slowed more and has now stagnated or is moving a little. Am I worried? No. Will their value go down a little in the short term? Maybe but I don't think so. Am I insulated against a slump because I bought sensibly - I'd like to think so


 
Good for you and congratulations of all of your success.  Many bears here have made money through property.  When you see spectacular capital appreciation you have to accept the some capital depreciation may also be possible - it's how markets work.


----------



## Guest111

I just don't think there will be a crash...lampoon me, disagree with me. I love that. But at least hope I'm right...it's as if some people want this to happen!


----------



## Guest111

Absolutely...I obviously don't want to see prices collapse but I'm prepared for it. The fact that I believe there'll be a soft landing is irrelevant.


----------



## whathome

Andy Doof said:


> ...it's as if some people want this to happen!


 
This comes up every day.  Some people may want it to happen - what do you care what other people want?  Why would it bother you if someone wants a crash?  You're ok, you bought sensibly right?  So what's the problem with other people wanting whatever they want!


----------



## Guest111

Unless interest rates hit 16% and we all lose our jobs...then it's park bench time!


----------



## partisan

conor_mc said:


> How does this logic work? People who can't afford to buy in Dublin at present can move in when property slumps because their target home in central Dublin won't have slumped as much as their current home.
> 
> You're having your cake and eating it......



Not quite
10% drop in 500k  house = 50k drop
10% drop in 750k house = 75k drop

If there was a more extreme fall in values

50% drop in 500k  house = 250k drop
50% drop in 750k house = 375k drop

The more extreme the fall, the easier trading up gets...


----------



## whathome

Andy Doof said:


> ...then it's park bench time!


 
I've just put a booking deposit on mine in Herbert Park


----------



## Guest111

Wanting a crash is wishing ill on other people...not being able to afford a home is a better than large numbers falling into difficulty and perhaps losing their homes


----------



## Guest111

A Herbert Park bench will be easier to sell on than a Bushy park one


----------



## whathome

Andy Doof said:


> Wanting a crash is wishing ill on other people


 
That's rediculous!


----------



## SherryTrifle

DOOF your a nervous DOOFus. Even i can admit the game is up. Hope you cashed in on some of your properties while you could.


----------



## Guest111

Why? On the 30 year time horizon I'm working to I reckon they'll outperform most things


----------



## blue01

Andy Doof said:


> Absolutely...I obviously don't want to see prices collapse but I'm prepared for it. The fact that I believe there'll be a soft landing is irrelevant.



Andy, can you give us a previous example of a soft landing in history?.....i can't.....

Why are you so sure that something that hasn't happened EVER in any housing market will happen now.....is it the luck of the Irish or something?


----------



## whathome

Andy Doof said:


> not being able to afford a home is a better than large numbers falling into difficulty and perhaps losing their homes


 
What has a property crash got to do with people losing their homes?


----------



## Guest111

How is that ridiculous?!
A proper crash in the Irish property market will be a nightmare for a lot of people. Wanting to see one is therefore wishing ill on other people.


----------



## whathome

Andy Doof said:


> How is that ridiculous?!
> A proper crash in the Irish property market will be a nightmare for a lot of people. Wanting to see one is therefore wishing ill on other people.


 
I'll repeat the question...
What has a property crash got to do with people losing their homes?


----------



## Guest111

Eh, 100% mortgage, bought your furniture with a credit card, spoofed the bank about your salary...property crash, oh s..t!


----------



## whathome

Andy Doof said:


> Eh, 100% mortgage, bought your furniture with a credit card, spoofed the bank about your salary...property crash, oh s..t!


 
explain that better will you? a property crash affects your mortgage?
or your credit card?


----------



## blue01

no answer for my question then?....


----------



## Guest111

I know family home protection legislation is pretty strong but it could happen!


----------



## howstrange

Andy Doof said:


> Wanting a crash is wishing ill on other people...not being able to afford a home is a better than large numbers falling into difficulty and perhaps losing their homes



Thats easy for you to say with your multiple properties! I dont want anybody to lose their home but i didnt ask them to pay a highly inflated price without some foresight either!!


----------



## Guest111

Sorry Blue, missed your question!
I cannot


----------



## whathome

Andy Doof said:


> I know family home protection legislation is pretty strong but it could happen!


 
You still haven't explained the link between cheaper property prices and wishing ill on someone. I'm loosing faith in your ability to reason


----------



## Guest111

lol...have to go unfortunately! 

Wanting a collapse is wishing ill! Wanting people's net worth reduced, wanting people in negative equity!


----------



## MadPad

Andy Doof said:


> I just don't think there will be a crash...lampoon me, disagree with me. I love that. But at least hope I'm right...it's as if some people want this to happen!


 
As good an opinion as any! Still you should visit venture out past Dublin 6 or maybe even visit the northside now and again


----------



## whathome

Andy Doof said:


> lol...have to go unfortunately!
> 
> Wanting a collapse is wishing ill! Wanting people's net worth reduced, wanting people in negative equity!


 
Again - there's no logic in what you're saying 
Nobody here wants to see people in negative equity. 

Are the people who might be exposed to negative equity wishing ill on those who can't afford a home by hoping property prices stay high?  I don't think so, and it's the same for potential buyers who want prices to fall.


----------



## blue01

Andy Doof said:


> Sorry Blue, missed your question!
> I cannot



then why do you believe we will buck the trend?......i'm not having a go...but having to listen to people (like my parents) telling me that prices won't come down because of the 'soft landing' gets to me....
i havent a clue whats going to happen but i trust whats happened in the past more than what these vested interests say......
It sickens me that they get an article a day in the Indo to spout this rubbish!


----------



## hmmm

Andy Doof said:


> How is that ridiculous?!
> Wanting to see one is therefore wishing ill on other people.


That's spurious reasoning, any time an asset class goes up or down in value someone will win and someone will lose. If property prices fall there will be winners and losers - most people are losers when they are in bubble territory. If you bought property in the expectation that it will only go up in value, and you consider anyone who says otherwise as out to get you then you've got issues to deal with.


----------



## MadPad

blue01 said:


> Andy, can you give us a previous example of a soft landing in history?.....i can't.....
> 
> Why are you so sure that something that hasn't happened EVER in any housing market will happen now.....is it the luck of the Irish or something?


 
This came up a while ago and the example given was London a couple of years back. Was laughed out of it but still has a point, a serious crash looked inevitable but property prices seem to have stabalized and settled there...


----------



## robd

partisan said:


> Not quite
> 10% drop in 500k  house = 50k drop
> 10% drop in 750k house = 75k drop
> 
> If there was a more extreme fall in values
> 
> 50% drop in 500k  house = 250k drop
> 50% drop in 750k house = 375k drop
> 
> The more extreme the fall, the easier trading up gets...



You need to take into account the negative equity.

 50% drop in 500k (92% mortgage)  house = 250k drop, 460k owed, negative equity 210k
 50% drop in 750k (92% mortgage)  house = 375k drop, New Mortgage 345k

Thus you'd have to find 210k + (8% x 375k) 30k + stamp (6% x 375k) 22.5 k = 272.5k cash to buy.
Before you would have only needed (8% x 740k) + stamp (9% x 740k) 67k  = 127k (and you may have had Capital Appreciation too thus reducing this to 0)

Also.  Banks are much more lax with lending criteria in a rising market.  In a falling or stagnent market they are much stricter, and check authenticity of docs etc. much more thoroughly (as people on Mortgages & Home Buying have been discovering).  After all they're in the business of making money and bad debts would seriously eat into this.  I'd say they staticians are working overtime these days.


----------



## hmmm

If house prices are falling (or slowing), surely it's too early to say whether we have a "soft landing" - don't we have to wait till they've stopped falling to declare that. Why are there so many people in the media saying we are "heading towards a soft landing"? Shouldn't it be "we're heading towards something, when we get there we'll know what it is".


----------



## conor_mc

Andy Doof said:


> Eh, 100% mortgage, bought your furniture with a credit card, spoofed the bank about your salary...property crash, oh s..t!


 
So thats gonna be some cyber-property-bears fault if they lose their home?

How about giving people here some credit. We're not all malevolent begrudgers. The fact is that the crash is an almost inevitable symptom of the spectacular capital appreciation _you've_ enjoyed.

Do you feel guilty that your fortunate position has denied several people the prospect of owning their own home? That you've contributed towards severe financial hardship for many people? That you've directly contributed to the very real situation you yourself describe...?


> _Eh, 100% mortgage, bought your furniture with a credit card, spoofed the bank about your salary...property crash, oh s..t!_


 
Nope, didn't think so. That's just the market, eh? That's fine for you then, but not good enough for those of us who stand to make nothing from a crash, yet are merely trying to highlight the risk rather than sweeping it under the carpet because you know what, I'm alright Jack, I've got my investment properties sorted.

Sorry mate, but it's hypocritical to accuse a bear of "wishing ill" on someone when you yourself have contributed in far greater ways to the hypothetical over-borrowed homeowner you describe.


----------



## robd

MadPad said:


> This came up a while ago and the example given was London a couple of years back. Was laughed out of it but still has a point, a serious crash looked inevitable but property prices seem to have stabalized and settled there...



Yep and I think we could have got a soft landing in 2004 too but not now.

Also UK control their interest rates so they can adjust accordingly (as they did in 2004). We can't. Also, their currency can/will fluctuate to deal with imbalences in their economy, our's can't.


----------



## whathome

There's been such a big hullabaloo generated about The Soft Landing and Prices Will Not Fall! that when the data shows that prices are falling (ESRI/PTSB), it's quite possible that people will be horrified that the "impossible" has happened. That could really push sentiment lower. At that point, the current VI spin will work against them and negative sentiment will accelerate quicker than it would have if they had not created the soft landing scam.

Irish property version of the famous US military phrase - "Shock and Awe-Jaziz No!"

Will take a long time to reach capitulation however : http://www.investopedia.com/articles/analyst/080702.asp
[broken link removed]


----------



## MadPad

whathome said:


> There's been such a big hulabaloo generated about The Soft Landing and Prices Will Not Fall! that when the data shows that prices are falling (ESRI/PTSB), it's quite possible that people may be horrified that the "impossible" has happened. *That could really push sentiment lower.*
> 
> Irish property version of the famous US military phrase - "Shock and Awe-Jaziz No!"
> 
> Will take a long time to reach capitulation however : http://www.investopedia.com/articles/analyst/080702.asp


 
cant see that happening on this thread , the average poster here makes me sound like a raving property bull.


----------



## whathome

MadPad said:


> cant see that happening on this thread , the average poster here makes me sound like a raving property bull.


 
 I would have been a huge property bull in my time .... there's a time and a place!


----------



## conor_mc

A very apt quote from that piece.....

http://www.investopedia.com/articles/analyst/080702.asp



> The media is a good "misleading" indicator, one that you should almost always bet against. It was late in calling the 1987 crash, the dotcom bubble, and this recession (2002).


----------



## whathome

conor_mc said:


> A very apt quote from that piece.....


 
I wonder which has more control...

Sentiment influence on the media or
Media influence on sentiment.


----------



## Open_Window

topman said:


> I have read alot of the comments on this thread. They are 99.9 % negative on the property market in Ireland. Would anybody like to state when and by how much properties are going to go down by.



Obviously you haven't paid attention to any ofthe posts ad also what is not positive about change?

Are you propsing forever increasing house prices and a complete impovrishment of the populaiton jsut to own a cowshed over your head? I believe that is a tad more negative that stability.


----------



## solatic

Andy Doof said:


> all have obviously seen spectacular capital apprecation, which slowed, slowed more and has now stagnated or is moving a little.



I love how the opposite of 'spectacular capital appreciation' is the directionless 'moving a little'. Perhaps the missing modifier is 'anti-up', or 'unrising'.


----------



## Duplex

*Capitalism *

*Definition

*Economic system characterized by the following: private property ownership exists; individuals and companies are allowed to compete for their own economic gain; and free market forces determine the prices of goods and services. Such a system is based on the premise of separating the state and business activities. Capitalists believe that markets are efficient and should thus function without interference, and the role of the state is to regulate and protect.


----------



## edo

> *Capitalism *
> 
> *Definition
> 
> *Economic system characterized by the following: private property ownership exists; individuals and companies are allowed to compete for their own economic gain; and free market forces determine the prices of goods and services. Such a system is based on the premise of separating the state and business activities. Capitalists believe that markets are efficient and should thus function without interference, and the role of the state is to regulate and protect.


Good man - sent that on to Brian Cowen - he looks like he needs a little support seeing as all our hithero "capitalist" banks and commentators are looking for a little socialist TLC this december!!!


----------



## Duplex

edo said:


> Good man - sent that on to Brian Cowen - he looks like he needs a little support seeing as all our hithero "capitalist" banks and commentators are looking for a little socialist TLC this december!!!


 

I feel that many bulls fail to understand that its the free market that determines price.


----------



## blindjustice

robd said:


> Yep and I think we could have got a soft landing in 2004 too but not now.





AGREED! but for Gods sake the prices kept going up and up until nearly ZERO FTBs could afford anything. I find it funny that if they had of managed this ALOT better they would still have all the eejits buying tiny apartments and townhouses (which cost a fraction to build - mass produced too) at super high prices. 
Dont underestimate the lemmings desire to follow the leader - I honestly believe people would be stupid enough continue to buy these types of property at such prices if they could - thats one of the things that BLOWS MY MIND

REPENT 
THE END IS NIGH!!!!!!!!!!!!


----------



## hmmm

> Up to 4% of America's mortgaged homeowners might lose their homes to foreclosure  in coming months, one of the nation's largest lenders predicted Monday, as those  homeowners find themselves trapped by heavy debt and the housing slump.


, that's a scary figure.


----------



## DoNotPassGo

Calina said:


> Inventory is rising pretty much every day.



On that note, I've knocked together a little web page (updated hourly) that tracks the total number of properties for sale on daft.ie. It's here, if anybody's interested: http://daftwatch.atspace.com/


----------



## beattie

DoNotPassGo said:


> On that note, I've knocked together a little web page (updated hourly) that tracks the total number of properties for sale on daft.ie. It's here, if anybody's interested:
> 
> ]
> 
> Great work, can you add the rental equivalent as well?


----------



## whathome

*Demographics* are going to be a real problem for the market in coming years. The birth rate fell off a cliff after 1980.

[broken link removed][broken link removed]

Data Source : Council of Europe - [broken link removed][broken link removed]


----------



## Savvy

DNPG,
While its interesting to capture weekly and maybe even daily numbers, I can't see why you'd need to capture daily hours. A trend of daily/weekly figures gives a good indication of how things are shaping up.


----------



## Eazos

2 bedroom city centre apartment at on daft at 400k for 95 days
*http://tinyurl.com/yedo75*


now on daft at 370k
*http://tinyurl.com/yzkatz*


----------



## DoNotPassGo

Savvy said:


> DNPG,
> While its interesting to capture weekly and maybe even daily numbers, I can't see why you'd need to capture daily hours. A trend of daily/weekly figures gives a good indication of how things are shaping up.



I see what you mean, but I figured I needed a reasonable number of figures each day since they fluctuate so much. Later, I'm hoping to add a "moving average" to the graph that'll iron out the wrinkles and give a reasonably accurate trend.


----------



## DoNotPassGo

beattie said:


> Great work, can you add the rental equivalent as well?



Good idea - will do.


----------



## whizzbang

beattie said:


> DoNotPassGo said:
> 
> 
> 
> On that note, I've knocked together a little web page (updated hourly) that tracks the total number of properties for sale on daft.ie. It's here, if anybody's interested: ]
> 
> Great work, can you add the rental equivalent as well?
> 
> 
> 
> 
> excellent! Are you keeping historical data?
Click to expand...


----------



## gearoidmm

Nice quote from Antispin on iTulip.com which expresses very nicely the way I feel about the pronouncements of the vested interests



> *Sometimes I think I ought to start a new site called heydumbass.com.  Except[FONT=Arial, Helvetica, sans-serif] DOTSTER, INC.[/FONT] owns the domain and I'm not going to pay the guy a cent for it. Identifying , , or other market bubbles is about as hard as finding a banker after you've missed your mortgage payments for six months. You can not see them if you don't want to, but only for so long. The path of their collapse–whether stocks or –is as mysterious as a hangover after beer, wine, scotch, and gin. Even the timing of the end of  and housing bubbles isn't so hard to estimate. What is truly hard to estimate is the willingness of market participants to believe the pitches of bubble product sales people who are as compelled to tell the truth as politicians running for office are to make promises they can keep. **The duration and extent of denial ** is nearly impossible for even the cruelest imagination to conceive.*


----------



## Moneyfool

We’re a young nation, teenagers really. Remember your first paycheque… that’s us now,  high on easy credit. We simply don’t have the memory in our collective unconscious of paying the piper when the bubble bursts. It was always about famine and survival and having a roof over your head. We have in our family folklore the stories of the starving who went to America and did well, but since most of us never much money or had any first hand knowledge of loosing one’s shirt (we didn’t have one to loose) we simply don’t have in our upbringing a sense of what prudent investing is. We believe it’s different for us, we the super confident educated new generation of Paddies can rewrite the laws of economics. There’s a salutary lesson in store for those who’ve overextended themselves, but it’s all part of growing up. Knowledge sometimes comes at great cost.


----------



## partisan

robd said:


> You need to take into account the negative equity.
> 
> 50% drop in 500k (92% mortgage)  house = 250k drop, 460k owed, negative equity 210k
> 50% drop in 750k (92% mortgage)  house = 375k drop, New Mortgage 345k
> 
> Thus you'd have to find 210k + (8% x 375k) 30k + stamp (6% x 375k) 22.5 k = 272.5k cash to buy.
> Before you would have only needed (8% x 740k) + stamp (9% x 740k) 67k = 127k (and you may have had Capital Appreciation too thus reducing this to 0)
> 
> Also. Banks are much more lax with lending criteria in a rising market. In a falling or stagnent market they are much stricter, and check authenticity of docs etc. much more thoroughly (as people on Mortgages & Home Buying have been discovering). After all they're in the business of making money and bad debts would seriously eat into this. I'd say they staticians are working overtime these days.



If you are in (full) negative equity you would have to buy at todays prices and I agree banks would probably be reluctant to lend you as much as currently. However, the lower your LTV rato however the more you will benefit from any fall (if you are an owner occupier looking to trade up). The average Irish LTV (according to that recent Duetsche Bank risk report) is 65%, a long way to fall! At some point in any downturn you would see some support from trader-uppers moving at reduced cost to more desirable areas. They could also improve their situation further by selling their property first and then waiting for the desirable property to fall further...

>>Update : oops didn't do the maths when writing that - assumed the cost was the same, actually it's better. If your in full negative equity the price of trading up is now 585, that's still quite a bit cheaper than the 750k it would cost today (92% LTV looking to trade up from 500 to 750 pretty much has to borrow the max - 92% of 750k today as they have no equity - other than their deposit)... I'm starting to warm to the idea of a crash :->


----------



## blindjustice

Moneyfool said:


> There’s a salutary lesson in store for those who’ve overextended themselves, but it’s all part of growing up. Knowledge sometimes comes at great cost.




Most my friends dont have much of an interest in politics or economics 
most dont realise the implications of simple facts that are in the public domain. They simply believe what they are told. And for the past few years practically everybody has been on this bandwagon of lies.... Yes its their own fault for buying property at silly prices but at least some of the blame lies elsewhere

I have nothing to gain from a crash - I have sold up my house and am going abroad soon but the situation here stills hits a nerve. I see no way out of this than in a HARD CRASH - so my main point:

While some argue that its peoples own fault for immaturity with money etc(i agree)* I ALSO believe that this lack of Government has led to a situation with dire consequences for our economy.
It was let go out of control.*

There is no shortage of land in the country - agricultural land is for buttons
empty houses etc etc Im just repeating this thread all over again


----------



## whathome

Moneyfool said:


> We’re a young nation, teenagers really. Remember your first paycheque… that’s us now, high on easy credit. We simply don’t have the memory in our collective unconscious of paying the piper when the bubble bursts. It was always about famine and survival and having a roof over your head. We have in our family folklore the stories of the starving who went to America and did well, but since most of us never much money or had any first hand knowledge of loosing one’s shirt (we didn’t have one to loose) we simply don’t have in our upbringing a sense of what prudent investing is. We believe it’s different for us, we the super confident educated new generation of Paddies can rewrite the laws of economics. There’s a salutary lesson in store for those who’ve overextended themselves, but it’s all part of growing up. Knowledge sometimes comes at great cost.


 
Great post. "super confident" sums it up well, we've dodged so many bullets that there's a sense of invulnerability with regard to property and credit.


----------



## anseo

Fascinating story from USA Today - 10 mistakes that made flipping a flop. 
"_If there’s a poster child for everything that went wrong in the real estate boom, it just might be Casey Serin_."
He also has a blog.

And it's great to read that other Americans have no sympathy for him - Reddit.

Is it possible to get this thread through an RSS feed?


----------



## Sidewinder

Moneyfool said:


> We’re a young nation, teenagers really.



Me <expletive deleted> We're one of the oldest nations on the planet. Only the likes of the Chinese have an older history than us. This "young nation" melarky really annoys those of us who know our history. Back in the 8th-10th centuries we were one of the most advanced nations in all of Europe, only the Byzantine Empire could match us for knowledge back then.

Is there any rubbish young Irish people these days will refuse to swallow?


----------



## soma

Sidewinder said:


> Me <expletive deleted>. We're one of the oldest nations on the planet.



I would hazzard a guess at to what MoneyFool was getting at. 

When it comes being a free market, globalised economy that truly is subject to the whims of international socio-economic developments - we are little more than children. It's not long along that we were viewed in some quarters as being 2nd/3rd world in terms of development.

We are currently having fun by playing with an exciting, shiny and hazardous new toy that is symptomatic of all 1st world free market economies with access to decent credit.  The toy is simply asset speculation.

I really like that "first paycheck" analogy.


----------



## phoenix_n

DoNotPassGo said:


> I see what you mean, but I figured I needed a reasonable number of figures each day since they fluctuate so much. Later, I'm hoping to add a "moving average" to the graph that'll iron out the wrinkles and give a reasonably accurate trend.


 
like the rebooting of their server at midnight


----------



## ajapale

Posters please keep to the topic: Current public sentiment towards the housing market?

There are other threads (In LOS) to discuss politics and the economy in general.

for example The Irish Economy in TGD.


----------



## Marie

I doubt if many who learned the value of money from its extreme scarcity during the quiet desperation and deprivation of 1950's Ireland are currently 'over-exposed' to property! The 'young nation' point seems to be that the 30+'ers now buying houses can't?/won't? learn from history but must perforce engage in behaviour which will cripple them - and the country - financially.  That isn't civilisation (which entails the handing on of acquired wisdom and knowledge) but rather its _breakdown _and a 'living-only-the-moment' heedlessness which loses sense of cause and effect..........and indeed that's what the 'property bubble' looks like!  This suits the shareholders of the financial institutions who are not responsible for the sentiment but are facilitating it - which is capitalism.  Ultimately responsibility is an individual matter.  As the old adage goes: "Where ignorance is bliss, 'tis folly to be wise" - it is more comfortable not to look at history, look at the facts or listen to the experience of others........and _that_  is crazy!


----------



## murray

Andy Doof said:


> Which developments? Name them. name a development where a phase being launched right now is cheaper than a previous phase.


 
The Paddocks, Adamstown, Co Dublin
2 bedroom apartments started off last week at €305,000 but have now been dropped to €290,000.Original launch details:http://www.unison.ie/irish_independent/stories.php3?ca=303&si=1701582&issue_id=14736New Price: €290,000http://www.dng.ie/search_result_detail.cfm?ID=101618589
21-10-2006: Update: sold out - €305k

to name just one..............


----------



## phoenix_n

phoenix_n said:


> What the [broken link removed] [broken link removed] looks like


 


phoenix_n said:


> Supply now 61.


 
The irish bubble referred to a house priced at 635(cant find cache) now priced at [broken link removed]

Supply now at 62.(phibsboro)


----------



## Arthur Daley

Mr Gilroy on Newstalk balanced up the discussion this morning by having Richard Curran from SBP on. mention was made of the number of texts sent in complaining about the EA's Economists for EA's given a free ride in the media recently. 

Again the tone and advice was not don't buy under any circumstances as prices would crash within 12 months,  but just be more choosy about where you buy. Preferably in the city or reasonable commutable distance.

I sense most people feel we're some time away from a crash yet. A few asking price drop swallows do not yet make a summer crash.........


----------



## beattie

Arthur Daley said:


> Mr Gilroy on Newstalk balanced up the discussion this morning by having Richard Curran from SBP on. mention was made of the number of texts sent in complaining about the EA's Economists for EA's given a free ride in the media recently.
> 
> Again the tone and advice was not don't buy under any circumstances as prices would crash within 12 months, but just be more choosy about where you buy. Preferably in the city or reasonable commutable distance.
> 
> I sense most people feel we're some time away from a crash yet. A few asking price drop swallows do not yet make a summer crash.........


 
I don't suppose much heed will be paid to statements like the one below by people who directly infuence the cost of borrowing here...... 

*"ECB's Weber issues inflation warning 
*Last updated: 25-10-06, 08:52 
European Central Bank Governing Council member Axel Weber has said that inflation is likely to pose a risk next year and the ECB needed to ask itself whether stimulative policy was still needed. "


[broken link removed]

(subscription needed)


----------



## conor_mc

Arthur Daley said:


> Mr Gilroy on Newstalk balanced up the discussion this morning by having Richard Curran from SBP on. mention was made of the number of texts sent in complaining about the EA's Economists for EA's given a free ride in the media recently.
> 
> Again the tone and advice was not don't buy under any circumstances as prices would crash within 12 months, but just be more choosy about where you buy. Preferably in the city or reasonable commutable distance.
> 
> I sense most people feel we're some time away from a crash yet. A few asking price drop swallows do not yet make a summer crash.........


 
It'll be interesting to see whether Newstalk now take note of public sentiment and start to lean in that general direction. While property porn might be their bread-and-butter, they can't remain indifferent to public opinion without becoming a laughing stock.

Regarding the speed with which a crash can develop.... This from the Sydney Morning Herald in Sept 2002.




> *10. Don't procrastinate*
> With Sydney's latest property boom apparently at an end, it's tempting to assume that prices may plateau or even fall. This is only partly true, says Macquarie Bank property researcher Rod Cornish.
> "Prices for generic apartments in the middle and outer-ring suburbs, such as Hurstville and Bankstown, will probably fall by about 10 per cent over the next 18 months, which makes it worth waiting if you're after one of these types of apartments." But Cornish says to be wary of this kind of property, as its capital growth potential is limited, and you don't want to forfeit potential resale value simply because you were keen to get your own place. His advice is "don't rush into anything, but don't procrastinate, either".
> Finders Keepers' Lisa Bradley agrees. "It's a mistake to wait for that fabled `market correction'. "On the whole, prices only level out, they never really come down," she says. "While you're sitting around waiting for prices to fall, the market could get out of reach again."


 
Their market crash started in late 2003.


----------



## random2006

From ireland.com breaking news:
House price growth slows in wake of ECB rises 

[broken link removed]

(subscription required)

House price growth was down to 0.7% for the month of september, the fourth successive monthly slowdown. 
R


----------



## whathome

ESRI/PTSB index, house price growth slowed considerably again.  Down to 0.7% from 1%

Allowing for the data lag of a few months, this is a very significant decrease. This data is collected on mortgages drawn down so it relates to sale-agreed deals from a few months back.

[broken link removed]


----------



## beattie

random2006 said:


> From ireland.com breaking news:
> House price growth slows in wake of ECB rises
> 
> [broken link removed]
> 
> (subscription required)
> 
> House price growth was down to 0.7% for the month of september, the fourth successive monthly slowdown.
> R


 

"
In September, the price of houses nationally rose by 0.7 per cent during the month, down from the rate of 1.0 per cent recorded in August this year and the 1.1 per cent, 1.2 per cent and 1.6 per cent recorded in July, June and May respectively."

Dropping quite quickly, it will be interesting to see the daft figures which are out next week (I think)


----------



## Remix

random2006 said:


> From ireland.com breaking news:
> House price growth slows in wake of ECB rises
> 
> [broken link removed]
> 
> (subscription required)
> 
> House price growth was down to 0.7% for the month of september, the fourth successive monthly slowdown.
> R


 
Also covered here for those without a subscription:

http://www.finfacts.com/irelandbusinessnews/publish/article_10007787.shtml


----------



## whathome

beattie said:


> Dropping quite quickly, it will be interesting to see the daft figures which are out next week (I think)


 
Especially considering that the ESRI/PTSB report is based on mortgages drawn down when final contracts are signed. This means that there is approx 10 week lag on sale agreed prices. Add another month for report preparation and you have data that is three to four months old at the time of release.  It's a very significant drop.


----------



## Remix

Also keep in mind that when the PTSB source code was examined it was found to have this algorithm coded:



> %
> % Apply soft-landing adjustment rule
> %
> 
> 
> 
> IF house_price_growth < 0 THENhouse_price_growth = 0.7​END;


----------



## phoenix_n

Shandon Mills - Reduced from 445 to [broken link removed]


----------



## irlstu

irlstu said:


> Nice apartment in lovely costal Monkstown:
> 
> Was quoting  back in July
> 
> Now quoting [broken link removed]



Above post was dated 18th Oct, its now just dropped to [broken link removed]


----------



## Fredser

Aha - a new trick to keep the inventory looking low !

Lump 3 gaffs together on one page!!

[broken link removed]


----------



## walk2dewater

irlstu said:


> Above post was dated 18th Oct, its now just dropped to [broken link removed]


 
Even at €223k (plus SD) the yield would only be 5%. AIB and BOS now offer ~5% in a risk-free acct (net of DIRT).

The last guests to this party, who can leave, have left. For those remaining, economic reality is going to be swift and brutal.


----------



## phoenix_n

The question now is. 

Would you feel confident that you could buy a house at January 2006 prices.

I would be confident.


----------



## zac

*Rate of price growth falls to 0.7% for September – fourth consecutive decline in growth rate.

*House prices in Dublin and Outside Dublin both grew by 1.7% and 0.6% respectively in September.

[FONT=arial, helvetica, sans-serif]House prices in the commuter counties of Dublin grew by 1.1% in September 2006, compared to 1.2% in August 2006.

Hardly a 10% crash expected in sep, phoenix?
Guess prices needs to drop 13% in each of the next 3 months for a 40 % predicted drop.
[/FONT]


----------



## partisan

walk2dewater said:


> Even at €223k (plus SD) the yield would only be 5%. AIB and BOS now offer ~5% in a risk-free acct (net of DIRT).
> 
> The last guests to this party, who can leave, have left. For those remaining, economic reality is going to be swift and brutal.



At 223k + SD given current rents in that area and assuming 10 months occupancy yield would be >7% which is pretty decent.

This is one of the cheapest apartments in that area on daft.. http://daft.ie/searchrental.daft?search=1&s[cc_id]=ct1&s[a_id]=265&s[mnp]=&s[mxp]=&s[bd_no]=&s[search_type]=rental&s[refreshmap]=1&limit=10&search_type=rental&id=424608


----------



## howstrange

zac said:


> *Rate of price growth falls to 0.7% for September – fourth consecutive decline in growth rate.
> 
> *House prices in Dublin and Outside Dublin both grew by 1.7% and 0.6% respectively in September.
> 
> [FONT=arial, helvetica, sans-serif]House prices in the commuter counties of Dublin grew by 1.1% in September 2006, compared to 1.2% in August 2006.
> 
> Hardly a 10% crash expected in sep, phoenix?
> Guess prices needs to drop 13% in each of the next 3 months for a 40 % predicted drop.
> [/FONT]



As was already mentioned these figures are based on data that is 3/4 months old! Realistically is there anyone over the last couple of months who would have paid more than the asking price in the current climate. It would be hard to believe if there was any growth at all  in the last month or 2.


----------



## Debtwish

zac said:


> *Rate of price growth falls to 0.7% for September – fourth consecutive decline in growth rate.
> 
> *House prices in Dublin and Outside Dublin both grew by 1.7% and 0.6% respectively in September.
> 
> [FONT=arial, helvetica, sans-serif]House prices in the commuter counties of Dublin grew by 1.1% in September 2006, compared to 1.2% in August 2006.[/FONT]
> 
> [FONT=arial, helvetica, sans-serif]Hardly a 10% crash expected in sep, phoenix?[/FONT]
> [FONT=arial, helvetica, sans-serif]Guess prices needs to drop 13% in each of the next 3 months for a 40 % predicted drop.[/FONT]


 
If the figures are based on mortgages drawn down, it would relate to deals done at the beginning of the summer, or even earlier - one of my neighbours went "sale agreed" in March and still hasn't moved. So his house is not in the figures yet.

Therefore this would relate to the period when interest rates were 0.5-0.75% lower. "September prices" will not be in the figures until January.


----------



## beattie

howstrange said:


> Realistically is there anyone over the last couple of months who would have paid more than the asking price in the current climate. .


 
Unless you are financially deranged....


----------



## Satanta

howstrange said:


> Realistically is there anyone over the last couple of months who would have paid more than the asking price in the current climate.


It depends on what the asking price was! (and what the market values the property at)

If the same property is put up at €400k and €200k then I'd assume that the listing for €200k has a great chance of getting offers above the asking price.


----------



## miju

zac said:


> [FONT=arial, helvetica, sans-serif]Guess prices needs to drop 13% in each of the next 3 months for a 40 % predicted drop.[/FONT]


 
why do they have to drop over 3 months , surely they can drop at lower steps over a longer period and still reach the 40% drop in price


----------



## phoenix_n

miju said:


> why do they have to drop over 3 months , surely they can drop at lower steps over a longer period and still reach the 40% drop in price


 
Exactly. I am keeping to my prediction and so far i don't think i will be wrong. Will you see all prices drop by 40%. Of course not. Its not like shares. But will some houses (localised hits at first) be worth 40% less. Yes. But a vendor will need to be stressed enough to take the hit.

But of course i could be wrong. Its not science. But my prediction of falling prices is coming true i dont feel the need to be exact by how much.

(also predicting a rise in city centre and inner suburbs rents)


----------



## Arthur Daley

MadPad said:


> ah Arthur, Do you seriously think that nobody else has the same idea.... be careful, you could be the guy who buys high and sells low, worst of all possible worlds.


 
If the data is out of date by 3-4 months in the esri index (which let's face it is most punter's barometer of house prices), then there must be some scope for people to exit a market with some considerable equity in the event of a tipping point being reached. 

There are a lot of clever posts on here and some predictions made in July/August are being borne out. However I think we have to see a distinction between 'current *public *sentiment' as opposed to 'well informed financially literate sentiment'. I mean you're average punter isn't a lunatic but they largely see what's in front of them. You need a few months of declining ESRI indicies reported on primetime media allied to more ECB increases to get to a tipping point which will bring on meltdown.


----------



## whathome

The ESRI/PTSB data for new property can be up to a year old. How long does it take for buyers of new builds to draw down their mortgage following the booking deposit on off-plan developments?

This Irish Independent article from Feb 2006 highlights the data lag:
http://www.unison.ie/business/personalfinance/stories.php?ca=259&si=1555832



> Permanent TSB's figures are based on mortgages, as are those from the Dept of the Environment. The time-lag on these figures could be as long as a year, particularly in the case of new houses and apartments. This happens when the price is agreed before construction, but the mortgage is not drawn down for some time afterwards.


----------



## walk2dewater

partisan said:


> At 223k + SD given current rents in that area and assuming 10 months occupancy yield would be >7% which is pretty decent.
> 
> This is one of the cheapest apartments in that area on daft.. http://daft.ie/searchrental.daft?search=1&s[cc_id]=ct1&s[a_id]=265&s[mnp]=&s[mxp]=&s[bd_no]=&s[search_type]=rental&s[refreshmap]=1&limit=10&search_type=rental&id=424608


 
You're right.  €223k would be a decent price.


----------



## phoenix_n

walk2dewater said:


> You're right. €223k would be a decent price.


 
...which would be a 40% drop from initial asking price of 560.


----------



## walk2dewater

phoenix_n said:


> ...which would be a 40% drop from initial asking price of 560.


 
may I be the first to correct you 

... 60% drop

I've stated on here that 50%+ drops across the board cannot be ruled out.  My reasoning was based on a return to >5% yields.


----------



## phoenix_n

walk2dewater said:


> may I be the first to correct you
> 
> ... 60% drop
> 
> I've stated on here that 50%+ drops across the board cannot be ruled out. My reasoning was based on a return to >5% yields.


 
My apologies ....


----------



## JayDub

http://www.daft.ie/searchsale.daft?id=146580
€360,000 for a 3 bedroom in Lusk, seems reasonable until you take a look at the bedroom (see photo 4). You need to be a trapeze artist to get into bed. The features include "Gererous proporations"... Their spelling, not mine


----------



## DeBarr

Re : Shandon Mills.

From what I can see they are different properties being offered by different agents. It is not a reduction in price of one property. 

The more expensive one is being offered fully furnished.


----------



## partisan

walk2dewater said:


> may I be the first to correct you
> 
> ... 60% drop
> 
> I've stated on here that 50%+ drops across the board cannot be ruled out.  My reasoning was based on a return to >5% yields.



Although the upper end of the rental market in Monkstown for a 2 bed is 2300+ per month. Assuming 11 months occupancy at the top end of the market and ignoring stamp duty you would get a yield at 520k pretty close to 5%...


----------



## miju

but sure wouldn't the upper end of monkstown cost more to buy therefore reducing yields?


----------



## partisan

miju said:


> but sure wouldn't the upper end of monkstown cost more to buy therefore reducing yields?



Possibly, the apartment mentioned at 520k does look nice, it might be possible to furnish it to that standard. I don't know whether it could actually command those prices, however.


----------



## SteelBlue05

miju said:


> but sure wouldn't the upper end of monkstown cost more to buy therefore reducing yields?


 
2300 per month for 11 months = 25,300

yield = 25.3k/520k = about 5%

Is this the way its calculated?


----------



## whathome

partisan said:


> Although the upper end of the rental market in Monkstown for a 2 bed is 2300+ per month. Assuming 11 months occupancy at the top end of the market and ignoring stamp duty you would get a yield at 520k pretty close to 5%...


 
The average rent on a 2 bedroom apartment in Monkstown is €1587.50 based on 6 apartments on daft today.

So purchase price of €520,000 and rent of €1587.50 = gross yield of 3.0%. Miserable return!


----------



## walk2dewater

partisan said:


> Although the upper end of the rental market in Monkstown for a 2 bed is 2300+ per month. Assuming 11 months occupancy at the top end of the market and ignoring stamp duty you would get a yield at 520k pretty close to 5%...


 
Forget aspirational examples.  Show me a real example of any residential 
property anywhere in Dublin with a yield of 5%.  And I mean in-your-pocket real.  

There isnt any, and hasn’t been any for years.  This is a debt junkie market based on selling on for higher to the next mug.  Or was.


----------



## Eirmail

whathome said:


> The average rent on a 2 bedroom apartment in Monkstown is €1587.50 based on 6 apartments on daft today.
> 
> So purchase price of €520,000 and rent of €1587.50 = gross yield of 3.0%. Miserable return!


 

Don't forget management fees


----------



## MadPad

Arthur Daley said:


> If the data is out of date by 3-4 months in the esri index (which let's face it is most punter's barometer of house prices), then there must be some scope for people to exit a market with some considerable equity in the event of a tipping point being reached.
> 
> There are a lot of clever posts on here and some predictions made in July/August are being borne out. However I think we have to see a distinction between 'current *public *sentiment' as opposed to 'well informed financially literate sentiment'. I mean you're average punter isn't a lunatic but they largely see what's in front of them. You need a few months of declining ESRI indicies reported on primetime media allied to more ECB increases to get to a tipping point which will bring on meltdown.


 
agreed on the public vs sentiment on this thread... not 100% sure who is more correct though, i think the comments on this thread are a bit extreme. If you discovered an massive oil well in your back garden, some posters here would figure a way to make it a negative.  

Its very difficult to time the market and we're too lazy to go through the whole redecorating/presentation cycle thats needed to max the price no matter what the sentiment is.....
It'll take a minimum of a month or 2 to get a serious offer and then at least another month to get to contract... but during that time you can withdraw from the market also

Guess it doesnt matter what the sentiment, if you are looking at your house as an investment first and foremost, the way to maximize your return, is to make bold decisions early whatever it is...

Good luck, but read something other than this thread for a balanced opinion.......


----------



## Guest111

But what about the people who are happy to ride out any slump or crash. The people trying to make a quick buck are in the minority.


----------



## Open_Window

DeBarr said:


> Re : Shandon Mills.
> 
> From what I can see they are different properties being offered by different agents. It is not a reduction in price of one property.
> 
> The more expensive one is being offered fully furnished.



Fully furnished should not make any difference to resale price. Nor should floors, or anything the peopel have done bar a really quality extension perhpas.

YOu are buying a building not someones elses taste, you'd be foolish to be swayed by this. Remember that furnituire is most likely gong to endin a skip so there is no point in paying for it and then dumping it (plus the cost of a skip).

You are doing someone else a favour if you take their furniture they are lumping a Cost of Disposal liability onto youand then chargig you for it!! C'mon people! Don't get scammed by the fleeing Speculators.

Essentially you should view all properties as shells. 

Fuly Furnished "might" only be attactive to Buy To Let.

Fully Furnished should not and I don't imagine is a serious factor in moving sentiment for one sale over another.


----------



## phoenix_n

phoenix_n said:


> Shandon Mills - Reduced from 445 to [broken link removed]


 


DeBarr said:


> Re : Shandon Mills.
> 
> From what I can see they are different properties being offered by different agents. It is not a reduction in price of one property.
> 
> The more expensive one is being offered fully furnished.


 
My mistake. Linked to wrong property . Now corrected. (reduced to 430 not 425)


----------



## whathome

Andy Doof said:


> But what about the people who are happy to ride out any slump or crash.


 
Yesterday you were saying that their lives would be destroyed and everyone here was ill wishing? Today you're saying they're "happy to ride out any slump or crash" !!!


----------



## partisan

delete this post - not sure how


----------



## partisan

SteelBlue05 said:


> 2300 per month for 11 months = 25,300
> 
> yield = 25.3k/520k = about 5%
> 
> Is this the way its calculated?



Yeah, I think so. It's an approxiamate formula - (annual income/cost)*100.



whathome said:


> The average rent on a 2 bedroom apartment in Monkstown is €1587.50 based on 6 apartments on daft today.
> 
> So purchase price of €520,000 and rent of €1587.50 = gross yield of 3.0%. Miserable return!



True, it really does depend on the assumptions you make. The variations are enormous!


----------



## phoenix_n

whathome said:


> The average rent on a 2 bedroom apartment in Monkstown is €1587.50 based on 6 apartments on daft today.
> 
> So purchase price of €520,000 and rent of €1587.50 = gross yield of 3.0%. Miserable return!


 
...dont forget to factor in capital (wait for it) _*deprecation*_


----------



## whathome

partisan said:


> True, it really does depend on the assumptions you make. The variations are enormous!


 
Using the average rent for six properties is more accurate than picking the highest one and adding a + as you appear to have done


----------



## partisan

whathome said:


> Using an average of six properties is more accurate than picking the highest one and adding a +  as you appear to have done



Ah now - I disagree there. It's marketing. Different folks expect different standards and have different price sensitivities. You can go for the top end of the market, or the budget end. There generally isn't such wild swings within different market segments as between them!


----------



## whathome

partisan said:


> Ah now - I disagree there. It's marketing. Different folks expect different standards and have different price sensitivities. You can go for the top end of the market, or the budget end. There generally isn't such wild swings within different market segments as between them!


 
Well considering it's one of the cheapest 2 bed apartments available in Monkstown - would you expect to get top end rent through marketing?  Are you going to produce a glossy brochure and DVD virtual tour to increase your rental yield?


----------



## phoenix_n

walk2dewater said:


> You're right. €223k would be a decent price.


 
When would that apt have been worth close to this amount? 4 years ago?


----------



## Guest111

I wasn't actually...I said a crash in the property market could have dire consequences for some people.
You seemed to think this was a bizarre point of view. I still don't understand why?


----------



## irlstu

whathome said:


> The average rent on a 2 bedroom apartment in Monkstown is €1587.50 based on 6 apartments on daft today.
> 
> So purchase price of €520,000 and rent of €1587.50 = gross yield of 3.0%. Miserable return!



I know somebody renting a similar apartment in that block (fully furnished) and they are paying 1300 per month!  (this is why I've been checking their prices)


----------



## whathome

Andy Doof said:


> You seemed to think this was a bizarre point of view. I still don't understand why?


 
Why not?


----------



## partisan

whathome said:


> Well considering it's one of the cheapest 2 bed apartments available in Monkstown - would you expect to get top end rent through marketing?  Are you going to produce a glossy brochure and DVD virtual tour to increase your rental yield?



lol - I can't argue this one. I didn't really research that property. But maybe the downturn will force our landlords to become more entrepreneurial!


----------



## Guest111

I said a crash in the Irish property market would be have dire consequences for a lot of people. I think that's fair to say.
I also said that commentators who are willing there to be a crash are wishing ill on people. WHICH PART OF THAT DO YOU NOT UNDERSTAND?!


----------



## whathome

Andy Doof said:


> I said a crash in the Irish property market would be have dire consequences for a lot of people. I think that's fair to say.
> I also said that commentators who are willing there to be a crash are wishing ill on people. WHICH PART OF THAT DO YOU NOT UNDERSTAND?!


 
You just don't get it Doofus - It's a market! People wanting a crash are not willing ill on others, they just want cheaper property.


----------



## SherryTrifle

Andy Doof said:


> I said a crash in the Irish property market would be have dire consequences for a lot of people. I think that's fair to say.
> I also said that commentators who are willing there to be a crash are wishing ill on people. WHICH PART OF THAT DO YOU NOT UNDERSTAND?!


There will be winners and losers in the same way there was winners and losers on the way up in the bull market. Nothing in economics is as predictable as cycles.


----------



## ajapale

Andy Doof, Please familiarise yourself with this and the other posting guidelines.


----------



## Gwynston

Andy Doof said:


> I also said that commentators who are willing there to be a crash are wishing ill on people.


Not necessarily. I'd like to see a crash because house prises are completely insane and bear little relation to what the properties are really worth. Just look at what the same money would buy abroad.

There may be people stuck with negative equity, but that is because prises have risen too high for too long. A correction is long overdue before it gets even worse!

Hoping for continued price rises is wishing ill upon people who already can't afford to buy a house, or who have to tie themselves into a lifetime of debt to do so...


----------



## DeBarr

Open_Window said:


> Fully furnished should not make any difference to resale price. Nor should floors, or anything the peopel have done bar a really quality extension perhpas.
> 
> YOu are buying a building not someones elses taste, you'd be foolish to be swayed by this. Remember that furnituire is most likely gong to endin a skip so there is no point in paying for it and then dumping it (plus the cost of a skip).
> 
> You are doing someone else a favour if you take their furniture they are lumping a Cost of Disposal liability onto youand then chargig you for it!! C'mon people! Don't get scammed by the fleeing Speculators.
> 
> Essentially you should view all properties as shells.
> 
> Fuly Furnished "might" only be attactive to Buy To Let.
> 
> Fully Furnished should not and I don't imagine is a serious factor in moving sentiment for one sale over another.


 

I disagree. There is a market out there for funished properties. 

The area is close to DCU - anyone buying a pad for their college kids (which is pretty common) could be swung by it - a lot less hassle plus they don't have to be in Dublin to take deliveries (that may not show up). Also some FTBs could find it attractive not having to initially trawl through the furniture shops and have the same hassle.... Some investors could also be swung by it if the furniture was good quality.... 

Why do you think people pay more for showhouses?


----------



## phoenix_n

So anyone know how many years ago that aprt would have been worth 300K. (Monkstown)


----------



## Guest111

Lol...I think we're talking at cross purposes here. As I've said before I don't believe we will experience a "crash".
Obviously as an investor I don't want to see a crash but I am prepared for it. It's not investors or pension funds or even family homes with 90% equity I worry about...it's people who've just got onto the ladder, who've spoofed the banks. I know the flipside is affordibilty for tomorrow's FTB but I reckon there's more to lose from a crash than there is to gain.
and apologies for the shouting...liquid lunch!


----------



## Calina

Andy Doof said:


> I wasn't actually...I said a crash in the property market could have dire consequences for some people.
> You seemed to think this was a bizarre point of view. I still don't understand why?



Andy, 

no one denies that a crash in the property market would have dire consequences for some people, in the same way that the skyrocketing market values have had direc consequences for some people. But your sympathy seems to be targetted only towards those who will lose in a crash, not those who have been aversely impacted by the rising market. 

In and of itself, the fact that some people will be damaged is not a good reason to try to prevent a correction from happening. There is a simple problem: property is far too expensive for many people on above average incomes. Not just average incomes, but above average incomes. There are only two ways for this to adjust: either property prices come down or incomes go up. The latter will happen over IBEC's dead body. I know people who are earning less in real terms now than they were earning 5 years ago. 

The economy is being seriously damaged and skewed by the property market at the moment. If some semblence of rationality does not return to that market then signally more people are going to get hurt in the long term. 

The assumption on the part of those with their head buried in the sand about the reality of the property market - where people on 50KE a year can't afford to buy a one bedroomed apartment within 15km of the edge of Dublin city - appears to be that "you're trying to spoil it for us all". In truth, for many people it is spoilt at the moment but of course, because they don't own property, are not part of the property wealth pyramid, their opinions don't count, they're only whining because they can't get on the ladder. 

As things stand, things in the Irish property market are bad now. It's easy to pretend they're not while people who own property are feeling rich, but there are a lot of people who do not own property, who would like to buy homes, not income generators, and who are priced out of the market. Whether you like it or not, their opinions count as much as those who have a massive mortgage but feel rich because their property has gone up 15% in the past 2 years or whatever. It will not change the fact that no matter what price you paid for your house, if you took out a mortgage of around 90% of the value of the house, it will still cost you double the price of the house. 

Yes, a property crash would hurt some people. But in that way, it is not any different to a property bubble which has equally hurt more than a few people.


----------



## Guest111

Surely a happy medium is what we want...price stagnation for maybe even the next decade?


----------



## Calina

Andy Doof said:


> Surely a happy medium is what we want...price stagnation for maybe even the next decade?



Well I can't speak for anyone else but no, I don't agree. I think a sharp correction because prices are severely out of kilter with long term reality at the moment followed by inflation tracking rises would be a better scenario than long drawn out stagnation.


----------



## Guest111

Yeah, but surely a gradual correction is preferable to a crash or collapse?


----------



## partisan

phoenix_n said:


> So anyone know how many years ago that aprt would have been worth 300K. (Monkstown)



Thing is, competition drives prices. If you can afford it now, you probably would have gotten a loan for it back then. If you can't afford it now you would probably been refused (someone else would have been a safer bet for the banks). So if prices fall, we're still going to be in competition with the same people, and the guy who earns more or has more wealth is going to get the nice house ahead of us. 30 years ago with high unemployment and high emigration if you had a job - you could have your pick. Not so now, with 70-80,000 immigrants pa and full employment. And if the economy crashes - you've got to be lucky enough to hold onto your job!


----------



## shanegl

Andy Doof said:


> Yeah, but surely a gradual correction is preferable to a crash or collapse?


 
Avoiding a shock would be preferable. However, how many recent investors will hang on to their property with miserable yields while inflation slowly eats away at their value?


----------



## Dipole

Andy Doof said:


> Surely a happy medium is what we want...price stagnation for maybe even the next decade?


 
No.  Property is a product like any other and generally consumers want it to be as inexpensive as possible.


----------



## Debtwish

Andy Doof said:


> I said a crash in the Irish property market would be have dire consequences for a lot of people. I think that's fair to say.
> I also said that commentators who are willing there to be a crash are wishing ill on people. WHICH PART OF THAT DO YOU NOT UNDERSTAND?!


 
It is the *bubble* that is the cause of the misery for people in the long term. The *crash* is just a symptom and what happens at the end of a bubble.

*Therefore those wishing for ever higher house prices were the ones that were really "wishing ill on people".* 

Unless Andy Doof you have been feeling really sorry for the first time buyers that were forced by parents/media/peer pressure to take on huge debts for a starter home, and now have to find hundreds a month more to service those debts?

Surely if todays university generation can be spared this misery then that is a good thing, no?


----------



## Calina

Andy Doof said:


> Yeah, but surely a gradual correction is preferable to a crash or collapse?



Why?


----------



## SteelBlue05

Dipole said:


> No. Property is a product like any other and generally consumers want it to be as inexpensive as possible.


 
Well its not quite like any other product. Its not like buying a Mars bar in the shop.

Its a high value product, its very expensive, its also part of a cultural norm where people want to own a house, and its a status symbol.

So its not always true that the cost of it is the only important aspect.


----------



## Duplex

I understand where Andy Doof is coming from and I think it explains to me how things got to this state.   I think that many, probably the majority of people failed to take account of the unsympathetic nature of the market system when it comes to fixing prices.


----------



## Guest111

I guess it all depends on your agenda...speaking as a homeowner and as an investor I would prefer to see a soft landing. The bears who are dumping their properties want to see a crash. The soon to be first time buyers want to see a crash, or do they? Perhaps the thought of their massive inheritance not being so massive is a greater influence...


----------



## DeBarr

shanegl said:


> Avoiding a shock would be preferable. However, how many recent investors will hang on to their property with miserable yields while inflation slowly eats away at their value?


 
Speaking as a recent investor (18 months ago) I will certainly be hanging on to mine irrespective of the market trends. I didn't view capital appreciation as the driver for buying an investment property. I see it as "one of the eggs" in my investment portfolio for the longer term (20 years). I have young kids and would hope that my initial investment (about 20K) will contribute to their future when they need it but I am not solely relying on it in that regard.


----------



## partisan

Dipole said:


> No.  Property is a product like any other and generally consumers want it to be as inexpensive as possible.



But consumers aren't always price sensitive. Being able to pay more than your neighbours for a product puts you in an exclusive club and that  adds-value in it's self (for certain types of people). There are lot's of people who would like to pay top dollar for a house that says "I'm special"!
But even so, most of the rest of us don't like to give cheap gifts (for example).


----------



## cjh

Andy Doof said:


> The bears who are dumping their properties want to see a crash. ...


 

I doubt it!!!


----------



## Dipole

SteelBlue05 said:


> Well its not quite like any other product. Its not like buying a Mars bar in the shop.
> 
> Its a high value product, its very expensive, its also part of a cultural norm where people want to own a house, and its a status symbol.
> 
> So its not always true that the cost of it is the only important aspect.


 
Sorry, but most people look at the utility value of the product first i.e. will it keep the rain of their head and not fall down about them.

And I expected this response so I'll direct you to the motor market in the U.S for an example of what I mean.
You can get all sorts of cars from Hyundais to Mercedes.  The Hyundai is generally seen as a basic transportation device where as the Mercedes has a "status" value to it and people aspire to own it but the market in the US is cut throat.  You can buy a better speced Mercedes in the US for near half the price it costs here and you know invoice price to extract discount from the dealer so yes in the US people aspire to own better cars but they always try to pay bottom dollar.
Check out autos.msn.com to see the prices and see exactly what I mean.  The price of cars are shockingly cheap over there -that's a free market in operation.  Ford may loose 5bn dollars this year but they'll bounce back and the consumers aren't lining up saying really we should pay more just to stop Ford loosing money.


----------



## Guest111

SteelBlue, I think you've hit on an important point. I'm not starting one of those ridiculous "this time it's different" arguments because those with the opposite view overuse it too.
We do live in a rather unique "homeowner culture", different to anything you see on the continent, or in the US or Australia. Renting for your lifetime just isn't the done thing here...and it does make our market different.


----------



## bearishbull

Andy Doof said:


> I guess it all depends on your agenda...speaking as a homeowner and as an investor I would prefer to see a soft landing. The bears who are dumping their properties want to see a crash. The soon to be first time buyers want to see a crash, or do they? Perhaps the thought of their massive inheritance not being so massive is a greater influence...


Yeah becuase when you have 5 brothers/sisters and your parents live in the average house your gonna be loaded when they pop their clogs! god, i bet you pray for your inheritence to come ASAP.


----------



## whathome

Andy Doof said:


> Perhaps the thought of their massive inheritance not being so massive is a greater influence...


 
Perhaps they're happy to have valuable time with their parent/s while still alive? I think this would be a greater influence on most people than worrying about how falling property prices will affect their "massive" inheritance as you put it.


----------



## Guest111

Anecdotely, the builders I've spoken to who are getting out right now with the aim of getting back in on the cheap are rain dancing for a crash!


----------



## Calina

Andy Doof said:


> I guess it all depends on your agenda...speaking as a homeowner and as an investor I would prefer to see a soft landing. The bears who are dumping their properties want to see a crash. The soon to be first time buyers want to see a crash, or do they? Perhaps the thought of their massive inheritance not being so massive is a greater influence...



You're missing the wider point. As things stand, the property market is skewing the rest of the economy and and that is a bad thing. Not just for FTBs who are priced out of the property market, but on people whose jobs will almost be certainly affected regardless of whether property continues to rise or bear no relation to salary reality, or crash. If it continues to rise in the way it does, we will need wholesale salary inflation which will bring with it major job losses and a crash. If it crashes, there will be a massive hit in consumer sentiment. If it drags out for along time, we will have a stagnant economy. 

For the mid to long term interest of the econony we need rational property prices. We do not have them. This goes far above anybody scraping together enough pieces of paper proving they can afford a starter home with a mortgage repayment of 2500 E a month. This impacts everyone. A short sharp shock would enable us to restart dealing with the economic impact a lot sooner than a decade long of stagnation.


----------



## Guest111

I wasn't being cynical...this isn't a how much love do you have in your heart competition


----------



## Guest111

Again the peculiarly Irish phenomenon...what "right" do people have to own their own home? If you can't afford to buy, rent!


----------



## Afuera

Andy Doof said:


> Yeah, but surely a gradual correction is preferable to a crash or collapse?



Due to the speculative nature of the Irish property market,even a gradual correction will most likely lead to a massive fall off in demand. You won't get FTBs in bidding wars, afraid that their never going to be able to afford a house. You won't get investors willing to subsidise tenants...
This will have to influence supply and by extension employment, tax receipts etc. Why would it be better to have this process long and drawn out? We don't want to have our own "lost decade" like they've experienced in Japan.


----------



## CelloPoint

Debtwish said:


> Unless Andy Doof you have been feeling really sorry for the first time buyers that were forced by parents/media/peer pressure to take on huge debts for a starter home, and now have to find hundreds a month more to service those debts?
> 
> Surely if todays university generation can be spared this misery then that is a good thing, no?



Completely disagree with you when you say FTBs were 'forced' into indebtedness.

I have recently purchased a taxi which I drive two nights a week - was chatting to a fellow driver there the other night and was saying to him how I felt sorry taking €45 off knackered commuters after a thursday night boozing session after work. He just laughed out loud and said: "nobody forced them to live in bleedin' Clonee" - I completely agree with his sentiment and I have lost all feelings of guilt I once had just from this brief encounter. It's a dog-eat-dog economy we live in. 

You've got to play your hand, look out for yourself and keep your hard-earned tight in your pocket. If you feel somehow "hard done by" by this country, in that the house fairy never left the keys to a 4 bed semi-d in blackrock under your pillow, then chances are you feel it's not your fault - but that of the gubberment. Maybe such persons should vote socialist in the next election where the gubberment will provide all the housing.

And I'm not a home-owner - I rent in D6 which offers me great flexibility, cheap rent and a great location. Ireland's gone to pot in many ways, but you can't deny that there are plenty of oppportunities for the "university generation" that just weren't there 20 years ago. I'm a young man with ideas, I have money in my back pocket and there are loads of opportunities in Ireland - if you sit on your This post will be deleted if not edited to remove bad language in some job and are giving out about your 40k a year salary, that's your fault. Think creatively and make life work for you - there's only a finite amount of time in which to make something of life, and I for one am getting sick of listening to people complaining about how nobody has done anything for them - after all, why should they?


----------



## Calina

Andy Doof said:


> We do live in a rather unique "homeowner culture", different to anything you see on the continent, or in the US or Australia. Renting for your lifetime just isn't the done thing here...and it does make our market different.



That varies regionally. France is not well known for home ownership, for example, but it is the done thing in Brittany for example. 

Renting is not the done thing here because tenant rights are somewhat tenuous by comparison to most other European countries. It is this which makes short term property investment so attractive here. I've twice had to move house because an investor decided to cash in and property sale is one of the reasons for which security of tenure can be circumvented in this country.


----------



## Duplex

Andy Doof said:


> SteelBlue, I think you've hit on an important point. I'm not starting one of those ridiculous "this time it's different" arguments because those with the opposite view overuse it too.
> We do live in a rather unique "homeowner culture", different to anything you see on the continent, or in the US or Australia. Renting for your lifetime just isn't the done thing here...and it does make our market different.


 

I don't see how this effects the demand for housing. (housing being defined as a means of shelter rather than an instrument of speculation)


----------



## bearishbull

Lower house prices = more disposable income = less wage inflation pressures = more competitive economy = less chance of economy in recession over next decade


----------



## whathome

Andy Doof said:


> this isn't a how much love do you have in your heart competition


 
Ah - the human spirit shines through


----------



## SteelBlue05

Dipole said:


> Sorry, but most people look at the utility value of the product first i.e. will it keep the rain of their head and not fall down about them.


 
I understand your point, but the Irish property market isnt like the US car market, and thats why we have such massive prices. You need to account for a culture in Ireland where everyone wants to own a house, in the same way years ago when everyone wanted a car and now you have a car per person in most households.


----------



## bearishbull

CelloPoint said:


> Ireland's gone to pot in many ways, but you can't deny that there are plenty of oppportunities for the "university generation" that just weren't there 20 years ago.


 
I disagree, graduates in mid twenties on good salaries have little chance of buying in dublin like they could have just 5 years ago while someone with little education who speculated on a few properties because daddy and mammy told him ya cant go wrong with property, has several properties earning him large income without working. The bubble is distorting economy and those who work hard in a chosen area are'nt being rewared in the way they should. I have only recently graduated from university but someone with same ability and same degree graduating 5 years earlier than me has a much better standard of life as he got his house for half the price i would have to pay.


----------



## daveirl

Andy Doof said:


> I worry about...it's people who've just got onto the ladder, who've spoofed the banks.


Why? If they're stupid enough to spoof the bank then that's their problem. I'm financially responsible most of my peers are, but some are up to their eyeballs in debt to afford whatever fancy things they want. Why are we supposed to feel sympathy for these kind of people.


----------



## Eirmail

bearishbull said:


> Lower house prices = more disposable income = less wage inflation pressures = more competitive economy = less chance of economy in recession over next decade


 
Lower house prices only equals more disposable income for FTB's buying houses it means less disposable income for greedy speculators who are trying to sell houses.
I still agree it would be good for the economy as FTB would generally put a few extra quid to better use than stinking rich middle aged investors.


----------



## Guest111

WhatHome, I'm not actually worried about myself...it's the effect of a crash on other people and friends of mine that irks me


----------



## Dipole

SteelBlue05 said:


> I understand your point, but the Irish property market isnt like the US car market, and thats why we have such massive prices. You need to account for a culture in Ireland where everyone wants to own a house, in the same way years ago when everyone wanted a car and now you have a car per person in most households.


 
So you are saying essentially that supply hasn't met demand yet ......and when it does things will change?
There are a lot of people here who claim supply has already met demand and there is now a significant overhang in the market.


----------



## Duplex

Just thinking how could we keep the bubble inflated? I suppose that the government could issue a statement asking 'investors' to stop selling up as it is causing house price inflation to drop.  Or maybe we could ask the MNC's to pay us more money compared to our counterparts in other countries.  We could ask the Hedge Funds to accept Irish Mortgage Backed Securities at lower yields or the EU to bung us a bit a cash ta keep tings ticking over.


----------



## Eirmail

Dipole said:


> So you are saying essentially that supply hasn't met demand yet ......and when it does things will change?
> There are a lot of people here who claim supply has already met demand and there is now a significant overhang in the market.


 

Another differences is that if there is an oversupply of cars in America new or old they can be sold abroad and be used abroad. If there is an oversupply of houses in Ireland they can technically be sold abroad but can't be used abroad.


----------



## partisan

bearishbull said:


> I disagree, graduates in mid twenties on good salaries have little chance of buying in dublin like they could have just 5 years ago while someone with little education who speculated on a few properties because daddy and mammy told him ya cant go wrong with property, has several properties earning him large income without working. The bubble is distorting economy and those who work hard in a chosen area are'nt being rewared in the way they should. I have only recently graduated from university but someone with same ability and same degree graduating 5 years earlier than me has a much better standard of life as he got his house for half the price i would have to pay.



eh? I was in my mid 20's 5 years ago and couldn't get a loan for any of the houses then available (at least the ones I wanted - what's changed!) - even though I could have afforded the repayments. The average age of ftbs in Ireland has fallen from mid thirties to late twenties. Hardly smacks of young people not being able to get on the ladder. I for one, am grateful I was able to get a job here and didn't have to leave or sign on like about a half my parents generation. The economic boom made life easier for those who lived through the transition (those 5 years older than me - had I been born 5 years earlier...). If you've just graduated, save your money and look to buy in 5 years time. You'll be earning more, and even though prices are nominally high, low interest rates, longer terms, interest rate relief, low personal taxes, full employment makes paying high mortgages easier than you think. To get the loan, though, you _must_ have savings history.


And one more thing --> back then everyone was bearish and saying the market was going to crash (at least all us potential ftb's were). We hung on David McWilliams every word. The Nirvana of cheap housing and high wages was just around the corner - in 2001 prices even fell 10%. Look where we are now...


----------



## whathome

Andy Doof said:


> But what about the people who are happy to ride out any slump or crash. The people trying to make a quick buck are in the minority.


 


Andy Doof said:


> WhatHome, I'm not actually worried about myself...it's the effect of a crash on other people and friends of mine that irks me


 
Are the friends that you're so worried about not "happy to ride out any slump or crash" as you put it? 

Maybe they're in your second grouping above - "people trying to make a quick buck" ?


----------



## SteelBlue05

Dipole said:


> So you are saying essentially that supply hasn't met demand yet ......and when it does things will change?
> There are a lot of people here who claim supply has already met demand and there is now a significant overhang in the market.


 
Well its not just supply and demand. Demand needs to be accounted for by location, e.g. more demand in Dublin than Longford...but you can buy a car from any dealer anywhere.

I am not trying to convince people that prices wont decrease, I am merely pointing out that its not as simple as you think.

House prices have always been just beyond peoples general affodability levels, yet they somehow manage to find the money, I dont think this is ever going to change.

Now affordability is decreasing due to increasing rates but that wont cause a massive crash, its will just reduce them to a point where they are always just out of reach. And somehow the buyers come up with the cash.


----------



## bearishbull

DeBarr said:


> Speaking as a recent investor (18 months ago) I will certainly be hanging on to mine irrespective of the market trends. I didn't view capital appreciation as the driver for buying an investment property. I see it as "one of the eggs" in my investment portfolio for the longer term (20 years). I have young kids and would hope that my initial investment (about 20K) will contribute to their future when they need it but I am not solely relying on it in that regard.


Do you not think that with ireland building around 90k house a year that there will be massive oversupply in 20 years so your invetment probably wont be worth much more(if any) in real terms then???? If we keep building say an average of 60k huse for 20 years thats 1.2 million houses over next 2 decades, that has to impact significantly on prices as incomes wont be rising much over next 2 decades due to globalisation, most households already being dual income,slowdown in irish economy etc. 

The long term investment philosophy wont work over next 20 years the way it did over last 20 years. The last 20 years was a one off.


----------



## miju

Andy Doof said:


> Yeah, but surely a gradual correction is preferable to a crash or collapse?


 
i'd say (and i hazard alot of others here) that as short as possible correction no matter how painful to put the property market back in touch with reality and so the economy can recover quicker rather than a long drawn out saga ala Japan


----------



## Open_Window

DeBarr said:


> I disagree. There is a market out there for funished properties.



I accounted for that with the "but to let" reference. 



> Why do you think people pay more for showhouses?



Cause they is as silly as people who pay over 400K for a 1 bed with a 100% over a zillion years. 

If people are happy to throw, brun & genrally waste money by al means but they distort the market


----------



## shanegl

Andy Doof said:


> WhatHome, I'm not actually worried about myself...it's the effect of a crash on other people and friends of mine that irks me


 
Did it irk you when you were rubbing your hands at the spectacular capital appreciation your investment properties enjoyed?


----------



## whathome

SteelBlue05 said:


> House prices have always been just beyond peoples general affodability levels, yet they somehow manage to find the money, I dont think this is ever going to change.


 
That's true in a rising market. In a market that is falling however, many choose to stay on the sidelines even though they could buy at current prices. During the 90's crash in the UK for example, FTB's sat on the sidelines while prices dropped. Even though they could easily buy, it was safer to rent.


----------



## Debtwish

CelloPoint said:


> Completely disagree with you when you say FTBs were 'forced' into indebtedness.


 
You underestimate the power of peer and parent pressure. Many young people have already succumbed to this.



> I'm a young man with ideas, I have money in my back pocket and there are loads of opportunities in Ireland - if you sit on your This post will be deleted if not edited to remove bad language in some job and are giving out about your 40k a year salary, that's your fault. Think creatively and make life work for you - there's only a finite amount of time in which to make something of life, and I for one am getting sick of listening to people complaining about how nobody has done anything for them - after all, why should they?


 
And I wish you luck. But you are being very unfair to the many skilled people that we need in this economy that work hard and do an excellent job for 40K a year. You never know, one day you may need them.


----------



## bearishbull

partisan said:


> eh? I was in my mid 20's 5 years ago and couldn't get a loan for any of the houses then available (at least the ones I wanted - what's changed!) - even though I could have afforded the repayments. The average age of ftbs in Ireland has fallen from mid thirties to late twenties. Hardly smacks of young people not being able to get on the ladder.


No it smacks of being able to borrow more due to increasing loan durations and smacks of desperation/fear of not being able to buy in 30's and having to buy property earlier and earlier(sure we'll have 19 year olds as average ftb in year to come!). I dont worry as prices will be much lower in decade to come when i may decide to buy.


----------



## Calina

SteelBlue05 said:


> House prices have always been just beyond peoples general affodability levels, yet they somehow manage to find the money, I dont think this is ever going to change.
> 
> Now affordability is decreasing due to increasing rates but that wont cause a massive crash, its will just reduce them to a point where they are always just out of reach.



They are not just out of reach - they are approaching miles out of reach for an increasing number of people in the community. For them to approach "just out of reach" they need to fall quite a bit. The average salary - which isn't rising anywhere fast - is less than one tenth the average house price. From a cashflow point of view, purchasing costs more than double what renting does. 

The property market, being heavily fed by sentiment, is, in fact a complex beastie. If it was even remotely sane, we wouldn't be having this discussion. But that does not mean that prices cannot yo yo. They went up by 270% in ten years. Swings of that magnitude need not be in one direction only and yet far too many people seem to convince themselves that property cannot go down. It can. It has done in quite a few other countries.


----------



## CelloPoint

bearishbull said:


> I disagree, graduates in mid twenties on good salaries have little chance of buying in dublin like they could have just 5 years ago while someone with little education who speculated on a few properties because daddy and mammy told him ya cant go wrong with property, has several properties earning him large income without working. The bubble is distorting economy and those who work hard in a chosen area are'nt being rewared in the way they should. I have only recently graduated from university but someone with same ability and same degree graduating 5 years earlier than me has a much better standard of life as he got his house for half the price i would have to pay.



First off: fair balls to the guy with "little education" who took the risk, put his neck on the line and speculated on a few properties and made a killing. He's obviously not that stupid. There's nothing stopping a member of the free university education brigade thinking (and doing) the same thing (and it doesn't have to be in property).

Secondly: young Irish graduates live sophisticated lifestyles consisting of designer clothing, credit cards, expensive watches, nightclubbing, gym membership and 06 cars. This lifestyle is not necessary - the funny thing is though, that young 20-somethings "expect" life to be like this because they have never known any better.

Thirdly: Irish salaries are high compared to most other european salaries - why else are so many workers coming here? There's a property bubble, yes, but it doesn't bother me to be honest - I have no overwhelming inherent urge to just jump willy-nilly into a whirlpool of dreams because of some AIB ad I saw on the telly. Get over this perceived need to "own" and get on with other opportunities in life. There will always be opportunities to make a killing - it's not restricted to just property you know. Many Irish people are convinced that the only way to make easy money is via property because so many of their peers have made so much money in that asset class in recent years.


----------



## Calina

partisan said:


> eh? I was in my mid 20's 5 years ago and couldn't get a loan for any of the houses then available (at least the ones I wanted - what's changed!) - even though I could have afforded the repayments. The average age of ftbs in Ireland has fallen from mid thirties to late twenties. Hardly smacks of young people not being able to get on the ladder. I for one, am grateful I was able to get a job here and didn't have to leave or sign on like about a half my parents generation. The economic boom made life easier for those who lived through the transition (those 5 years older than me - had I been born 5 years earlier...). If you've just graduated, save your money and look to buy in 5 years time. You'll be earning more, and even though prices are nominally high, low interest rates, longer terms, interest rate relief, low personal taxes, full employment makes paying high mortgages easier than you think. To get the loan, though, you _must_ have savings history.
> 
> 
> And one more thing --> back then everyone was bearish and saying the market was going to crash (at least all us potential ftb's were). We hung on David McWilliams every word. The Nirvana of cheap housing and high wages was just around the corner - in 2001 prices even fell 10%. Look where we are now...



Subsequent to that fall in prices, credit became incredibly cheap and the banks started getting a little more lenient what with raising the salary multiple that you could bother up to5 times your salary as opposed to 2.5 times which had been the case ten years previously, and increasing the length of time you could borrow money over - up to 40 years in some cases. 100% mortgages, interest only. 

Everything has been done to make property affordable in the short term - you know why? Because it wasn't. The average age of FTBs having fallen is not a good thing for this country - it means a lot of people are going to get to the age of 30 and 35 and wonder why on earth they bothered. I know more than a few people who got to the age of 27 who wondered why they didn't travel for a few years and they just had jobs. They didn't even buy apartments.


----------



## Guest111

It's unusual to meet a taximan with a chip on his shoulder...

Last time I looked is was neither immoral or illegal to buy an investment property. 
And we've also got to remember when it's your home "value" goes out the window...you want it, you want it


----------



## CelloPoint

Andy Doof said:


> It's unusual to meet a taximan with a chip on his shoulder...



Specifically, what are you trying to say?


----------



## Calina

CelloPoint said:


> Thirdly: Irish salaries are high compared to most other european salaries - why else are so many workers coming here?



Salaries aren't the issue - I could probably earn more outside Ireland than I do here. The difference is actually the unemployment rate and most people coming here are not necessarily going into the high tax bracket jobs. Quite a lot of the immigrants whom I shared flats with over the past five years were in relatively low paid customer service/tech support jobs.


----------



## Calina

Andy Doof said:


> Last time I looked is was neither immoral or illegal to buy an investment property.
> And we've also got to remember when it's your home "value" goes out the window...you want it, you want it



Realistically speaking, the issue for me is that a lot of people are not being homes, they are buying first foot on the ladder type places which they don't expect to live in for longer than two or three years because of course they will trade up. 

There are numerous references to a figure suggesting that 40% of newly built properties bought last year were built by investors. While that's not actually immoral, you'd have to question a situation where the people who want to buy houses to live in are priced out of a market where almost half the properties being bought are bought people who don't need them. As for the unoccupied figures it would appear that we're building a lot of houses to satisfy demand which is not based on demand to occupy. That's a bit skewed. 

Most of what we're building of late is tailored more towards the short term "few years and we'll trade up" and investor market, rather than on long term planning. I don't think that's good morally and I suspect that there are a lot of new apartment blocks which won't see the end of their 99 year leases.


----------



## whizzbang

Duplex said:


> Just thinking how could we keep the bubble inflated? I suppose that the government could issue a statement asking 'investors' to stop selling up as it is causing house price inflation to drop.  Or maybe we could ask the MNC's to pay us more money compared to our counterparts in other countries.  We could ask the Hedge Funds to accept Irish Mortgage Backed Securities at lower yields or the EU to bung us a bit a cash ta keep tings ticking over.



here's a few ideas

Higher CGT on investment properties owned less than X years, this will slow down the rush of investors heading for the exit.
Bigger grants to FTBs.
Increase stamp duty bands again.
Buy up all the empty housing as "affordable housing", and knock some of it down for being "unsafe".
Tax overseas property invetments to the hilt, stop that nasty outpouring of money.
Guarantee rental yields for investors by topping up everyone's rent to maintian a 5% yeild on all properties. (Aint gonna happen )

I feel so dirty for thinking this way!


----------



## partisan

Open_Window said:


> I accounted for that with the "but to let" reference.
> 
> 
> 
> Cause they is as silly as people who pay over 400K for a 1 bed with a 100% over a zillion years.
> 
> If people are happy to throw, brun & genrally waste money by al means but they distort the market



You're thinking along the lines of - "I think like this so everyone else will too". I tend to agree with your view, it doesn't matter much to me either. 
But the level of finish in a house makes a huge difference in the asking price, whether that includes furniture or not. So it must matter to a lot of people out there. That's how all those folks on property ladder make their money.


----------



## phoenix_n

Anyhow   

Someone in work posted this http://www3.myhome.ie/search/property.asp?id=285977&np=1&rt=search&searchlist= for sale on the work intranet. (internal)

And added...

"Price is open for negotiation "


----------



## Open_Window

DeBarr said:


> Speaking as a recent investor (18 months ago) I will certainly be hanging on to mine irrespective of the market trends. I didn't view capital appreciation as the driver for buying an investment property. I see it as "one of the eggs" in my investment portfolio for the longer term (20 years). I have young kids and would hope that my initial investment (about 20K) will contribute to their future when they need it but I am not solely relying on it in that regard.



I respect the long view, and understnad that markets rise over the long term. However investing now is causing the detrimental impoverishment of the current generations ( I would include myself in that one) and thus could upset your 20 year plan.

In fact becasue of the acitons of speculation, Ireland my not be  a great place to live in 20 years from now, by that time the bubble could have wrecked so much havoc that your children may not even be able to stay here and live and in the mean time your job may have been threatened becasue of the destablisation nature of single mindedness of "investment" its sound nice but is a dangerous game and we are starting to the see the beginning of it now.

What if the Government decided in sudden hast to limit due to national crisis (the enviroment is the only issue at the end of the day) 1 prime residence per person and or family. Its not a crazy notion, in many ways its sensible if you want a balanced non boom & bust economy that is economically & enviroemtally stable, doens't mean we can't trade for other goods.

How are your many properties soec out for the upcomming energy ratings? This could sway sentiment in any of your investments. 

Anyways I think we are seeing the crux of the problem here, home owning & investing in proeperty can essentially never mix thus you will have boom & bust cycles.

THere is only one remedy.


----------



## CelloPoint

whizzbang said:


> here's a few ideas
> 
> Higher CGT on investment properties owned less than X years, this will slow down the rush of investors heading for the exit.


Not fair on investors to just change the rules like this. Besides, won't happen cos those that can make these changes have huge interest in investment property.



whizzbang said:


> Bigger grants to FTBs.


I favour incentivising builders with the strategic aim of increasing supply, rather than giving state money directly to the FTB (and ultimately the builder's back pocket anyway). Giving grants to FTBs will increase the amount of money in the market thereby increasing prices - the aim should be to increase the supply. The supply issue only needs to be addressed by government policy once there is a clear shortage of housing. This is not the case currently - therefore there is no need for grants or any more incentive schemes. We have achieved what we set out to achieve (in terms of increasing supply), albeit in a very poor manner.



whizzbang said:


> Increase stamp duty bands again.


Perhaps, I favour stamp duty over a property tax - if you can afford a house, you can afford to make some contribution to the state. I personally think the UK stamp duty rates are quite good!



whizzbang said:


> Buy up all the empty housing as "affordable housing", and knock some of it down for being "unsafe".


No! I fundamentally disagree with the whole idea of buying half-built developments from developers. Why should the taxpayer bail out developers because they failed to see oversupply coming their way? Very dodgy stuff these deals between local councils and developers in the name of "affordable housing". Local councils are just not accountable and have proven their incompetence in dealing with planning in Ireland - why should we trust them to manage the affordable housing scheme? 



whizzbang said:


> Tax overseas property invetments to the hilt, stop that nasty outpouring of money.


Dividends from overseas property investments brings money into the country as well you know. You can't stop money flowing abroad - it's a free market economy we live in. In fact, it's impossible to restrict private individuals/companies from conducting their business where they choose.



whizzbang said:


> Guarantee rental yields for investors by topping up everyone's rent to maintian a 5% yeild on all properties. (Aint gonna happen )
> 
> I feel so dirty for thinking this way!


You're living in cloud cuckoo land... (No wait, aren't we all?)


----------



## whizzbang

CelloPoint said:


> You're living in cloud cuckoo land... (No wait, aren't we all?)



hey, it was just a creative exercise on "how could we maintain the bubble"  not expecting any of this to happen!

what crazy things do you think the goverment might try to maintain the hysteria?


----------



## JayDub

http://money.cnn.com/2006/10/25/news/economy/homesales/index.htm?cnn=yes

Its a good thing that Irish house prices can only rise.


----------



## Guest111

There's nothing wrong with enjoying the finer things in life or aspiring to them!
Levying a higher rate of capital gains tax on short term specualtors is an idea. Penalising those investing abroad is a nonsense


----------



## Guest111

I meant most taximen have a chip on their shoulder...whether you fall into that category remains to be seen but dismissing PAYE workers earning 40K a year while you gossip at the rank with some socialist ar..hole isn't a great start.


----------



## phoenix_n

13 Clonmore Court.
Reduced from 390K(my records no history cache) to [broken link removed]


----------



## Duplex

JayDub said:


> http://money.cnn.com/2006/10/25/news/economy/homesales/index.htm?cnn=yes
> 
> Its a good thing that Irish house prices can only rise.


 
And American homes are half the price of  Irish homes and are on average considerably larger.


----------



## Remix

whizzbang said:


> here's a few ideas
> 
> Higher CGT on investment properties owned less than X years, this will slow down the rush of investors heading for the exit.
> Bigger grants to FTBs.
> Increase stamp duty bands again.
> Buy up all the empty housing as "affordable housing", and knock some of it down for being "unsafe".
> Tax overseas property invetments to the hilt, stop that nasty outpouring of money.
> Guarantee rental yields for investors by topping up everyone's rent to maintian a 5% yeild on all properties. (Aint gonna happen )
> 
> I feel so dirty for thinking this way!


 

Here's a visual for efforts such as these:

http://photos1.blogger.com/blogger/6089/1833/1600/June6_2005MMM.jpg


----------



## Guest111

Right, the game's up...pub time I reckon!


----------



## beattie

Duplex said:


> And American homes are half the price of Irish homes and are on average considerably larger.


 
Did you not know that its different over here and we have fantastic demographics and a sound economy that doesn't rely on FDI


----------



## Guest111

This time it really is different!


----------



## robd

phoenix_n said:


> 13 Clonmore Court.
> Reduced from 390K(my records no history cache) to [broken link removed]



Below the 381k (3%) Stamp Duty Threshold for FTB.  


I wonder if these Stamp Duty Thresholds will start to drag properties down below them in the near to medium term?   
Will we start seeing mid priced 340-360k places heading to below 317k also?   
Will we start seing low 400k properties heading below 381k (like the above)?


----------



## Open_Window

partisan said:


> And one more thing --> back then everyone was bearish and saying the market was going to crash (at least all us potential ftb's were). We hung on David McWilliams every word. The Nirvana of cheap housing and high wages was just around the corner - in 2001 prices even fell 10%. Look where we are now...



Its important to note that the 2001, 10% drop episode is often referred to as the "soft landing" in vested circles and such media coverage. Now however they talk (wish) of a 2nd soft landing (yet don't clarify that point), but you can't have 1 boom, 2 soft landings and no crash.... oh but its different now .......C'mon!!!


----------



## whizzbang

Remix said:


> Here's a visual for efforts such as these:
> 
> http://photos1.blogger.com/blogger/6089/1833/1600/June6_2005MMM.jpg



403 error?


----------



## Duplex

beattie said:


> Did you not know that its different over here and we have fantastic demographics and a sound economy that doesn't rely on FDI


 
 Yeah I guess those Yankees cant afford proper house prices, shucks.


----------



## CelloPoint

Andy Doof said:


> I meant most taximen have a chip on their shoulder...whether you fall into that category remains to be seen but dismissing PAYE workers earning 40K a year while you gossip at the rank with some socialist ar..hole isn't a great start.



Don't dismiss me as having a chip on my shoulder just because I happen to drive people about at weekends. And chatting at the rank is part of the job - it's better than sitting in a car listening to fm104. And calling someone who I thought had something interesting to say, an "a-hole", just shows the extent of your intolerance - and besides, whoever said he was a socialist? A cunning capitalist perhaps... Let's not turn this debate into an anti-taxi rant driver by indulging in offensive stereotypical commentry please.


----------



## Firefly

For those wishing for a sharp correction, you may have gotten your wish!

[broken link removed]

Firefly.


----------



## Open_Window

phoenix_n said:


> Anyhow
> 
> Someone in work posted this http://www3.myhome.ie/search/property.asp?id=285977&np=1&rt=search&searchlist= for sale on the work intranet. (internal)
> 
> And added...
> 
> "Price is open for negotiation "



Well this one sure ain't gonna get anything for the furnishings  Looks like a typical buy to let.

I'll offer them 100K (but I don't want the furniture 

Just a side note, Crumlin & Driminagh, great location in terms of proximity to the city, but if you don't like kids flying around at all hours of the night stay away. I does know a few what live 'dere.


----------



## MadPad

Firefly said:


> For those wishing for a sharp correction, you may have gotten your wish!
> 
> [broken link removed]
> 
> Firefly.


It probably hasn't fallen enough for some people on this thread


----------



## JayDub

beattie said:


> Did you not know that its different over here and we have fantastic demographics and a sound economy that doesn't rely on FDI


 
Plus the United States has a low non-national population LOL


----------



## coinfused

Cello point, in fairness, its not just the "free university education brigade" (by that I'm assuming you mean middle-class families who benefited the most from free fees) who were FTB's during the last 5-10 years nor are they the only people in debt up to their eyeballs. The consumer culture that has been packaged, celebrated and sold in the Media and endorsed by politicians for the duration of the Celtic Tiger has cut across all social classes. I feel sorry for anybody facing financial ruin, whether they are entirely or only partly to blame- 
(and entirely off-topic 45 quid to clonee is shocking - it only takes about 20 mins to get there from the city at night)


----------



## Open_Window

coinfused said:


> (and entirely off-topic 45 quid to clonee is shocking - it only takes about 20 mins to get there from the city at night)



I know it off topic but I won't go further than to say I think it outside the Dublin metropolitan area and it becomes a grey area after that in terms of charging (its not covered by the price, you could jsut leave the meter to roll and see how that grabs you). I recommend agreeing the price before you take carraige. 

Its those kinds of costs would be enough to sway  sentiment. Why buy high & still pay more for communting costs. All these extra costs people never factor into their purchase. Its the hidden costs, the ones twisting the knife into your bank O/D.


----------



## MadPad

partisan said:


> eh? I was in my mid 20's 5 years ago and couldn't get a loan for any of the houses then available (at least the ones I wanted - what's changed!) - even though I could have afforded the repayments. The average age of ftbs in Ireland has fallen from mid thirties to late twenties. Hardly smacks of young people not being able to get on the ladder. I for one, am grateful I was able to get a job here and didn't have to leave or sign on like about a half my parents generation. The economic boom made life easier for those who lived through the transition (those 5 years older than me - had I been born 5 years earlier...). If you've just graduated, save your money and look to buy in 5 years time. You'll be earning more, and even though prices are nominally high, low interest rates, longer terms, interest rate relief, low personal taxes, full employment makes paying high mortgages easier than you think. To get the loan, though, you _must_ have savings history.
> 
> 
> And one more thing --> back then everyone was bearish and saying the market was going to crash (at least all us potential ftb's were). We hung on David McWilliams every word. The Nirvana of cheap housing and high wages was just around the corner - in 2001 prices even fell 10%. Look where we are now...


 
Good post! a nice balance to the certainty being expressed on other posts here...

There may be a crash, there may not. McWilliams sounded convincing then, still does. Im sure he gets abuse from people who were swayed by the arguments and put off buying only to rent for the next 8 years..


----------



## CelloPoint

Open_Window said:


> I know it off topic but I won't go further than to say I think it outside the Dublin metropolitan area and it becomes a grey area after that in terms of charging (its not covered by the price, you could jsut leave the meter to roll and see how that grabs you). I recommend agreeing the price before you take carraige.


Not true. The 26 counties is one taxi-meter area. Therefore, it goes on the meter the whole way... Simple as that - and it's the regulator who sets the fare, not the individual driver. 



Open_Window said:


> Its those kinds of costs would be enough to sway  sentiment. Why buy high & still pay more for communting costs. All these extra costs people never factor into their purchase. Its the hidden costs, the ones twisting the knife into your bank O/D.


That's it. Why buy a house in Clonnee over 35 years that costs 50% in mortgage costs than renting in Ranelagh... We're all adults here cabable of making rational decisions, and it's not the fault of glitzy marketing campaigns if you find yourself stuck in traffic for 4 hours a day and €45 taxi fares home.


----------



## beattie

CelloPoint said:


> That's it. Why buy a house in Clonnee over 35 years that costs 50% in mortgage costs than renting in Ranelagh... We're all adults here cabable of making rational decisions, and it's not the fault of glitzy marketing campaigns if you find yourself stuck in traffic for 4 hours a day and €45 taxi fares home.


 
If there were not people living out in places like this you would not be able to rent so cheaply in the more desirable areas


----------



## Open_Window

CelloPoint said:


> Not true. The 26 counties is one taxi-meter area. Therefore, it goes on the meter the whole way... Simple as that - and it's the regulator who sets the fare, not the individual driver.



Yes yes you are right sorry I forgot it all about that changed, jaysus catch up here me!! Sorry!


----------



## CelloPoint

beattie said:


> If there were not people living out in places like this you would not be able to rent so cheaply in the more desirable areas



Interesting perspective.

Well, I've no plans on moving to Clonee any time soon!


----------



## Remix

Duplex said:


> Yeah I guess those Yankees cant afford proper house prices, shucks.


 
And who would want to live in their cheap houses like these ( €320k ) right beside one of the world's great innovation areas that gave rise to Microsoft, Amazon, Boeing, Starbucks etc.

 

[broken link removed]


----------



## homeless

Has there ever been a housing market anywhere that has increased as rapidly as ours has over the last ten years and not suffered some form of correction? I don't ask this sarcastically. Genuinely, has there been such a market? And, if so, where and when?

Also, what do people think are the key upcoming dates which could shift perception negatively or positively? Publication of the DAFT report (when is that?) will obviously be one; the ECB announcement in December another.


----------



## whizzbang

homeless said:


> Has there ever been a housing market anywhere that has increased as rapidly as ours has over the last ten years and not suffered some form of correction? I don't ask this sarcastically. Genuinely, has there been such a market? And, if so, where and when?
> 
> Also, what do people think are the key upcoming dates which could shift perception negatively or positively? Publication of the DAFT report (when is that?) will obviously be one; the ECB announcement in December another.



I read a report before that showed all the property bubbles in the last 100 years. I believe ours was the only one that had 60 straight quarters of growth. The longest growth with out a crash was 35 quarters I think. I'll have a look for it and let you know if I find it!


----------



## Neffa

homeless said:


> Has there ever been a housing market anywhere that has increased as rapidly as ours has over the last ten years and not suffered some form of correction? I don't ask this sarcastically. Genuinely, has there been such a market? And, if so, where and when?


 
Only one market has ever had anything like a soft landing - that's the UK at the present time. There is an OECD paper which looks at this and it is the only exception to a fair number (like 30 or more) markets it looked at post WW2. 

However, most UK-market watchers would say that it is too early to call for certain as a soft landing as interest rates are still headed up. And also the UK has control over it's own rate whereas we don't. 

Going back to sentiment for a moment, caught a taxi today to the airport. Driver tells me that a relative has just moved and is letting out their old home as a buy-to-let. IO payments have gone from 1200 (breakeven) to 1500 in the past year so tenant is being subsidised. However, they were still sure that it was going up by 10-15% a year in capital value so they would net 200K-300K in a few years - 'no bother'  

I think there is still quite a big disconnect between this forum and the public at large.


----------



## Open_Window

Should we not form a a mutual buying syndicate to swoop in since we are all ahead of the game ... I kid you not.

Now,  taxi men, they are an interesting conduit of whats going on. There opinion is worthless as such but its the info they have accumulated over time that makes them a most interestin chat more oftne than not.

I wouldn't take their profer in terms of financial vice, since a lot of them remortgaged over 100K to buy a liscence and (once again the banks were very happy lend a hand in what was a very grey area legally). 

Its a perfect example of a bubble, with all its artificial controls and stimulus iwht a whallop of a correction at the end. Just look what happened when it was regulated, it collapsed and there was a lot of woe. So what will happen when it goes nationawide, if the taxi situation is anything go by the same multipled by a 1000.

No one can argue that more taxis on the road has not been the benefit for all, so why can we only have regulaiton in the taxi industry price wise & service but not in the Housing industry??? There is a strong argument for it, now.


----------



## whizzbang

homeless said:


> Has there ever been a housing market anywhere that has increased as rapidly as ours has over the last ten years and not suffered some form of correction? I don't ask this sarcastically. Genuinely, has there been such a market? And, if so, where and when?
> 
> Also, what do people think are the key upcoming dates which could shift perception negatively or positively? Publication of the DAFT report (when is that?) will obviously be one; the ECB announcement in December another.



page 30 of this should give you an idea: [broken link removed]

You can see here we are on 50 quarter growth (up until 2005 Q1) so that puts us at 56 quarters now.

The only ones ahead of us are the Dutch with 78 quarters (possibly 84 now?). However they have only grown 183% in that time while we have grown 242% in much less time. 

Also you can see the longest line of growth without a downturn was:
Denmark with 45 Quarters growing 93% but that only ended in  Q3 2004, 2 Quarters  before this doc was written, I'm not sure if they are maintaining their soft landing.If you are looking for more established soft landings the best one is Finland 1993 to 2000, 27 quarters growth, 50% price increase.

I guess the past growth which best matches our own would be Japan 1977 to 1991, they had 54 quarter growth but only 77% growth. Their downturn was 40% reduction in prices. 

From a growth total point of view, the largest growth without a decline was Canada, 1985 to 1985, where they manged 66% growth.

There has been nobody with as much growth in as short a time as us. In fact we are twice the next nearest growth total.

To by the looks of it there is a global property bubble and we are leading the way! With our 56 quarters of growth and 243% growth in that time!

This is scarey reading.


----------



## homeless

Thanks whizzbang... interesting reading alright; you should forward to Ger Gilroy!

Can we say definitively then that no other economies in world history have experienced housing price growth of more than 200% over a decade without suffering a severe correction...?


----------



## whizzbang

oops, double post


----------



## whizzbang

homeless said:


> Thanks whizzbang... interesting reading alright; you should forward to Ger Gilroy!
> 
> Can we say definitively then that no other economies in world history have experienced housing price growth of more than 200% over a decade without suffering a severe correction...?



pretty much, not unless there was a market not covered by the OECD. I think it is fair to say there has never been a market that has experienced 200% growth at all! let alone without a crash! We are in uncharted waters.


----------



## Open_Window

Thats really interesting, FigureIII.1 shows that from the High of 1981 to the begining of the current cycle 1996 we had rather stagnant growth, approx 6 years of a downward trend and the 9 years of up and some straight.

In 1981, graphs peaks jsut above 100

This was not repeated untill 1996 were it came in jsut under 100.

So what I personally conclude form that report is that you average punter time immemorial, has neither the time nor notion to read such reporter thus will damed to walk from boom to bust for eternity. A bit like poor old Ulysses, ah jaysus.


----------



## Neffa

I'd not looked at the OECD report in a while - just glancing again shows one striking point I'd overlooked before - the quickest recovery from a peak was 12 quarters (3 years) in Switzerland and most took 5 years or more to rebound.  

I really cannot see the bulk of the "I'll hold on through the correction" holding onto their property if we face a 5 year downhill slope - that kind of time is long enough for people to start worrying if it will ever go up again


----------



## Maine

some of the newsflow today

1. UK central bank talks about risks of inflation and the need in the new globalised economy to keep inflation low as once it gets high it is difficult to control - guarantees interest rate rise in UK and opens possibility of one more in new year.
2. German IFO confidence jumps
3. Fed leaves interest rates on hold and has plenty to say on inflation
4. Oil jumps up $2 a barrel well into 60 plus as OPEC sets this as target 
5. Australian inflation on the move also

All these point to 3.5 % in December and IMO the risks are increasing of further rises in interest rates towards 4% in new year. IMO 4% is where the stress fracture could really become a break for the irish housing market. IMO if it holds at 3.5% then a 20% drop may see us escape. 

For the steady as she goes brigade the private economy is borrowing up to c1300 million a week mostly for property. Total investment in irish technology co's on the other hand for the full year will just make it over 200 million - less than one days property borrowing.

1300 million a week is 325 euros a week for everyone living in the country so no wonder we are doing great.


----------



## Moneyfool

Well done whizzbang, they'll be teaching those stats in schools in a few years time and asking how come so many were so thick they did'nt see the brick wall coming.


----------



## hmmm

Maine said:


> 1. UK central bank talks about risks of inflation and the need in the new globalised economy to keep inflation low as once it gets high it is difficult to control - guarantees interest rate rise in UK and opens possibility of one more in new year.


This I thought was one of the most interesting pieces of opinion today (from the BOE no less). Because globalisation is holding down inflation, it may require higher than "normal" levels of interest rates to bring down the stubborn inflation that remains. It goes completely against the grain of those who argue that we are in a new paradigm where globalisation = low inflation = low interest rates. Now it looks like globalisation = lower inflation = high interest rates to bring down inflation that remains. Bad news for borrowers.


----------



## JayDub

Remix said:


> And who would want to live in their cheap houses like these ( €320k ) right beside one of the world's great innovation areas that gave rise to Microsoft, Amazon, Boeing, Starbucks etc.
> 
> 
> 
> [broken link removed]


 
I'll have to pass on that and upgrade to this €337,000 beauty. Which "Ron Byrne & Remax are delighted to bring to the market". "This exquisite Detached, Spacious modern Bungalow" "It is a reluctant sale and the Buyer Stands to acquire a very special project."

Have you ever heard so much s***e in your life, take a look at the photos, it looks like it belongs in post hurricane New Orleans. When the crash does happen blame the real estate agents who push crap like this.

[broken link removed]


----------



## maxlovecok

I am an estate agent in Dublin. I can definitely see a marked change in the market. Properties are just not shifting these days. The phones have stopped ringing.
The buyers are now being chased whereas 2 months ago they were just ignored because they were made to do all the chasing. There is a glut of properties on the market and we get more and more listings each day. But still the phones don't ring.
Any offers that we get are well below the asking price. This was unheard of in the past. Sellers are being asked to drop their prices and I think this is just the start.
I was selling property in Australia when their market topped after ten years of boom. Ridiculous prices but nowhere near as crazy as here.


----------



## roney

Open_Window said:


> So what I personally conclude form that report is that you average punter time immemorial, has neither the time nor notion to read such reporter thus will damed to walk from boom to bust for eternity. A bit like poor old Ulysses, ah jaysus.


 
brillant!!!! he heh 

tellin' like it is ;-0


----------



## MadPad

Maine said:


> some of the newsflow today
> 
> ..........
> 
> For the steady as she goes brigade the private economy is borrowing up to c1300 million a week mostly for property. Total investment in irish technology co's on the other hand for the full year will just make it over 200 million - less than one days property borrowing.
> 
> 1300 million a week is 325 euros a week for everyone living in the country so no wonder we are doing great.


 
interesting, always good to get some new info! 325 euros a week for each of the 4M people of new borrowing...

Im not trying to dismiss it but is there any most of this is counted twice? banks selling on loans or whatever?
Because even if a fraction of it is new loans taken out by consumers it is a very sobering figure....

how old is the data? (again, just trying to work out is it from the spring or last month or whatever?)


----------



## Duplex

maxlovecok said:


> I am an estate agent in Dublin. I can definitely see a marked change in the market. Properties are just not shifting these days. The phones have stopped ringing.
> The buyers are now being chased whereas 2 months ago they were just ignored because they were made to do all the chasing. There is a glut of properties on the market and we get more and more listings each day. But still the phones don't ring.
> Any offers that we get are well below the asking price. This was unheard of in the past. Sellers are being asked to drop their prices and I think this is just the start.
> I was selling property in Australia when their market topped after ten years of boom. Ridiculous prices but nowhere near as crazy as here.


 
Thanks for that report from the front maxlovecok ( quite a handle there by the way). Can you give us an indication of who is trying to sell i.e. investors etc.


----------



## whizzbang

maxlovecok said:


> I am an estate agent in Dublin. I can definitely see a marked change in the market. Properties are just not shifting these days. The phones have stopped ringing.
> The buyers are now being chased whereas 2 months ago they were just ignored because they were made to do all the chasing. There is a glut of properties on the market and we get more and more listings each day. But still the phones don't ring.
> Any offers that we get are well below the asking price. This was unheard of in the past. Sellers are being asked to drop their prices and I think this is just the start.
> I was selling property in Australia when their market topped after ten years of boom. Ridiculous prices but nowhere near as crazy as here.



So what are EAs making of the market? are the going to start talking down prices to keep stock moving? Or are they planning on one more push?

also, does anyone believe the Soft landing theory?


----------



## baby_tooth

alot of talk going on re: how far prices will drop and everyone giving out about the guberment.

what about bord penala and planning regulations, combined with builders lobbiest and our antiquated system of county councillors who have the ability to ignore professional advice by means of thier planners and sanction permission for schemes that cause more harm than good.

On another point, alot of ppl here seem to figure yield as the the only factor to be considered in calculating yield.
There is anothe factor, coming from the basic principles of finance, and this is the PVOG, present value of growth of the asset.

i agree that the mkt is terribbly overpriced but not to the extent as what some ppl are suggesting.

And a crash has some benefits for the economy, call it trimming the fat as such, but when backs are to the wall, the strongest will emerge and also, alot of ppl with good enterpurinal ideas have been swayed from their enterprise for any number of reasons in ireland in the last few years, why easier money to be made else where.

As an economist who has done some work for some large developers on the side, i have meet some well qualifed ppl working a shovel on building sites, and have considered it myself from time to time, with take home pay of well over 1000 a week not to include nixers....why be a doctor, or a computer tech working on a home project in your garage when you could be laying tiles for 400 euro into your pocket for 5 hours work.


bord penaula need to go up, 
current dublin building stock needs to be razed and upgraded and extended up. 
infrastrucutre decisons need to be taken away from politicans who all have vested interests in their constituncies and given to a central planning authority.


----------



## baby_tooth

carrying on from the planing point, the government are currently trying to add inherent value to properties by improving infrastructure as quickly as possible, some might say (esri & oecd) too quickly to get value for our money.


high end jobs are being transferred out of ireland, not just the india-type jobs. the international funding cost are increasing for irish banks, over and above the ecb window increases.

international sentiment is changing at the higher levels of the  decision making ppl throughout europe....ie: I know of four companies who hired in economists and cost analysts to look at countires to locate too. Ireland is being striken of this list almost imediately as sunk-fixed and most importantly variable costs are just too high, and our, well above eu average, inflation is only going up due to liquidity squeeze and energy costs.....

prices will drop and stagnate for far too long, large drops such as 40% or more is very unlikely imo at moment.


----------



## maxlovecok

There are 9 of us working out of our office. They all say the exact same thing, which is "I can't believe how quiet it is." 
If the phone rings and it's a vendor looking to sell we will tell them " It might be necessary to put your price into a lower bracket in order to attract more buyers". A diplomatic way of saying you will have to lower your price, and unheard of in the past. It hasn't sunk in with the vendors yet that the good times are over.
When the boom ended in Australia I had a tough job convincing vendors that they wouldn't achieve the price their neighbours got 6 months ago.
I can see the exact same thing happening here.


----------



## maxlovecok

whizzbang said:


> So what are EAs making of the market? are the going to start talking down prices to keep stock moving? Or are they planning on one more push?
> 
> also, does anyone believe the Soft landing theory?


----------



## 2nz

JayDub said:


> I'll have to pass on that and upgrade to this €337,000 beauty. Which "Ron Byrne & Remax are delighted to bring to the market". "This exquisite Detached, Spacious modern Bungalow" "It is a reluctant sale and the Buyer Stands to acquire a very special project."
> 
> Have you ever heard so much s***e in your life, take a look at the photos, it looks like it belongs in post hurricane New Orleans. When the crash does happen blame the real estate agents who push crap like this.
> 
> [broken link removed]


 
Lunatics! The effin state of the place. That's why this bubble has to burst!

http://irishhousepricesfalling.blogspot.com/


----------



## maxlovecok

I can't see a soft landing. Some of the more inexperienced agents think it will go on forever. The more knowledgeable ones talk in whispers that it's going to get rough. But we wouldn't say that to a client.


----------



## SherryTrifle

http://www.breitbart.com/news/2006/10/25/D8KVN3000.html

Biggest price drop on record just announced in usa and this while economy is still doing well(in gdp and unemplyment terms) and mortgage rates havent changed much for most people who fix rates at outset.


----------



## Dannybouy

> There are 9 of us working out of our office. They all say the exact same thing, which is "I can't believe how quiet it is."


 
Tell us max when the redundancies start. the first to feel the pain are real estate agents as their will be a stand off no sales no commissions. the agents dont care if prices fall as long as sales happen


----------



## DeBarr

Open_Window said:


> I respect the long view, and understnad that markets rise over the long term. However investing now is causing the detrimental impoverishment of the current generations ( I would include myself in that one) and thus could upset your 20 year plan.
> 
> What if the Government decided in sudden hast to limit due to national crisis (the enviroment is the only issue at the end of the day) 1 prime residence per person and or family. Its not a crazy notion, in many ways its sensible if you want a balanced non boom & bust economy that is economically & enviroemtally stable, doens't mean we can't trade for other goods.
> 
> Anyways I think we are seeing the crux of the problem here, home owning & investing in proeperty can essentially never mix thus you will have boom & bust cycles.
> 
> THere is only one remedy.


 
I'm glad to see that you respect the long-term investment view. 

However on your other point, if the government decreed that you were only allowed one house per family then there would be no property available for rent. What would you say to those migrant workers, students and anyone else who just do not want to buy a house - "sorry no room at the inn". Would you want the Government to confiscate property investments for the national good and hand them out? What sort of a "basket case" would you think Ireland would be perceived to be then? 

As I mentioned before I am not a "short-term property speculator" - I have one small (inexpensive) property as part of a balanced portfolio with a long-term view and I will not sell in the event of a market slowdown. I don't really mind if the price goes up or down because in the very worst case scenario my kids can live there. I don't plan to buy any more property as then I wouldn't have a balanced portfolio. It's just a simple and balanced view to investment as advocated through most of the non-emotional threads throughout this site...... 

The small-time investors who have always been in the market seem to be confused with those who are "buying to flip" which is a relatively new phenomenon in Ireland and in the current climate they are just throwing fuel on the fire.  If the government want to start looking at some regulation in the market then maybe that would be a good starting point....


----------



## Marie

maxlovecok said:


> I can't see a soft landing. Some of the more inexperienced agents think it will go on forever. The more knowledgeable ones talk in whispers that it's going to get rough. But we wouldn't say that to a client.


 
The UK has been quoted several times recently on this thread as having achieved a 'soft landing' some years back, the remark sometimes coupled with a question as to whether Irish punters should switch to purchasing UK properties.  

Over the past 5 years the experiences of friends and neighbours who sold their PPR's to move elsewhere - not for speculation but for practical family reasons (to be in the catchment area for the school of their choice, to be closer to work, parents etc.,) have been that the Estate Agents were 'brilliant if you're a buyer, crap if you're trying to sell' (i.e. the reduced EA manpower is focussed on buyers).  

What do people here imagine when they quote 'soft landing' of the property market?  The house next-door to me (3-bed Victorian centre-of-town redbrick 5 minutes walk from train and bus-stations) took 18 months to shift after the buyer dropped by 30K (sterling).  Another down the road is still up for sale 3 years in.  The family moved so their two daughters could go to the high-performing school of their choice.  The house was viewed half-a-dozen times during the first year whereupon they 'gave up' trying to sell and rented it out.  It was trashed by the tenants in the course of a year, returned to the market a year ago (at the same price!!!) and has had 'a few' viewings but no expressions of interest.  It continues to stand empty like many other 'to rent' houses in the town centre.

Meanwhile back at the ranch the Irish Times asserts today that "Prices for homes in Dublin and the commuter counties continued on a strong upward trajectory last month, although rising interest rates dampened overall growth in house prices".

The search for scapegoats continues - it's the fault of rising interest rates, it's the fault of 'older people' screwing younger, it's the fault of the banks, it's the gubberment's fault..........


----------



## qwerty1

A friend of mine involved in construction remembers seeing a concrete wagon on the road and following it in the hope of getting work. When he got to the site, three other guys had had the same idea and a stand off or sorts ensued. 1991 apparently.


----------



## Firefly

maxlovecok said:


> I can't see a soft landing. Some of the more inexperienced agents think it will go on forever. The more knowledgeable ones talk in whispers that it's going to get rough. But we wouldn't say that to a client.


 
So you're telling the whole nation on a web forum??


----------



## Marie

Firefly - Do you really believe an individual's anecdotal comment would precipitate a stampede for the exit given that public sentiment on property has (the 2001 warning notwithstanding!) proved immune to  wheel-barrowloads of _facts and figures_  freely available in the public domain?


----------



## phoenix_n

Firefly said:


> So you're telling the whole nation on a web forum??


 
Not sure if AAM is that popular.


----------



## Satanta

Firefly said:


> So you're telling the whole nation on a web forum??


On an anonymous web forum.


----------



## phoenix_n

phoenix_n said:


> Supply still increasing. Now 54 for sale in phibsboro area.


 
Now 64. 20% increase in 2 weeks.


----------



## Calina

The Indo says not to panic.
http://www.unison.ie/irish_independent/stories.php3?ca=9&si=1712017&issue_id=14803



> [FONT=Verdana, Arial] Buyers waiting for great bargains may be disappointed, especially in the greater Dublin area, but can take consolation from the fact that a property collapse would hurt almost everyone[/FONT]


Uhem...that's supposed to console those priced out of the market, is it? I think some elements of the property owning masses must be getting a little rattled.

and while I'm at it:



> [FONT=Verdana, Arial] Panic is probably the biggest danger. The last few years have seen 10s of thousands of people invest in residential property for the first time. They own almost a quarter of a million second homes, many of which are vacant. A rush to sell if prices flag could be disastrous for the market.




The rush to buy them was disastrous for the market and that's why we're in this position now. 
[/FONT]


----------



## ajapale

Hi phoenix_n,

Posts consisting a single or a small number of (unattributed) statistics do not add anything to the debate.

If you were to collate a long time series of figures and display the statistics on an graph (as a poster has done already), now that would be usefull!


----------



## Remix

Calina said:


> The Indo says not to panic.
> http://www.unison.ie/irish_independent/stories.php3?ca=9&si=1712017&issue_id=14803
> 
> 
> Uhem...that's supposed to console those priced out of the market, is it? I think some elements of the property owning masses must be getting a little rattled.
> and while I'm at it:
> The rush to buy them was disastrous for the market and that's why we're in this position now.
> [/size][/font]


 
This article managed to use the word "panic" FIVE times. Might be a subliminal message in there  

I heard of a development in the Rosslare area that people initially queued up to place deposits on. At this point around 40 have pulled out and 2 have proceeded. 

I wonder how much of this is going on - unreported - around the country.


----------



## phoenix_n

ajapale said:


> Hi phoenix_n,
> 
> Posts consisting a single or a small number of (unattributed) statistics do not add anything to the debate.
> 
> If you were to collate a long time series of figures and display the statistics on an graph (as a poster has done already), now that would be usefull!


 
...and talking about taxi drivers does ?


----------



## Fredser

Andy Doof said:


> .... and apologies for the shouting...liquid lunch!



Ah!
Now I understand


----------



## Dreamerb

Remix said:


> This article managed to use the word "panic" FIVE times. Might be a subliminal message in there


 
That occurred to me too - the more you tell people not to panic, the more they'll wonder what there is to panic about!

I'm still undecided about the whole soft-landing or crash phenomenon, but expect to accumulate a little anecdotal evidence of my own over the coming weeks, having just put my house on the market [having sale agreed new house in August - always knew the timing could be a risk...]. I'm expecting my own house to make somewhere around the amount I would have expected in April or May since it's (just) in walking distance of city centre. But unlike many trader-uppers, I've always done my sums on the basis of realising considerably less so I'm not particularly exposed. I think! 

I've also observed a fair few price drops, some of them hefty, over the last six months [the house I'm buying features on the property prices falling blog - I saw it at the top price, told the EA that was ridiculous, and walked away until it approached reason]. My impression at the moment is that in Dublin it's the further out suburbs and the higher prestige properties that are most exposed to drops, and ambitious sellers are in for a shock. 

More generally, buyers who are heavily mortgage dependent *must* by now be looking at interest rates and realising that just because the bank will give you €X doesn't mean that it's really affordable or sustainable. Surely?


----------



## Open_Window

maxlovecok said:


> When the boom ended in Australia I had a tough job convincing vendors that they wouldn't achieve the price their neighbours got 6 months ago.
> I can see the exact same thing happening here.



Its greast to hear the other side. Iwonder would NEwstlak send Henry down ot a local EA office eh!?

SO is it mostly investors trying to offload becasue there info (6 months out of date) is the market has peaked or wha?


----------



## ajapale

phoenix_n said:


> ...and talking about taxi drivers does ?



Yes, by the time I read the taxi driver side show above the debate was back on track. It could also be agrued that taxi drivers influence and reflect public sentiment. They might even be today's equivalent of the shoe shine boy of the late 1920's.

Please try to avoid posting little fragments of unattribted figures with out commentary or analysis.


----------



## treora

Did you see the Herald AM today - The greens attacking the Taoiseach on the fact that house prices are 11 times average industrial wage and FTBs tax take make up one 1/3 of stamp duty. Taoiseach's retort was that "revenue from the tax is invested in health services, schools and welfare.". Securing the mother vote, me thinks. Dang if I ain't done called dat.




treora said:


> The only really motivated political grouping in Ireland that is not financially-vested is the Irish mammy. Tell her that Gilroy's balanced argument wants all the money that should go to her children [Education/Health/Social Welfare/Childcare allowance] will end up in the pockets of developers/specuvestors via VAT rebates, stamp duty reductions and their FTB debt laden younger siblings. And the airways will be alive with the sound of ...


----------



## Firefly

Marie said:


> Firefly - Do you really believe an individual's anecdotal comment would precipitate a stampede for the exit given that public sentiment on property has (the 2001 warning notwithstanding!) proved immune to wheel-barrowloads of _facts and figures_ freely available in the public domain?


 
Not at all...just that the anonymity of this web forum can easily attract pretenders....


----------



## Satanta

Firefly said:


> Not at all...just that the anonymity of this web forum can easily attract pretenders....


It can also attract honest comments from people who wouldn't be free to make them in a professional capacity....

Just impossible to tell the difference at times.


----------



## howstrange

http://www.unison.ie/irish_independent/stories.php3?ca=9&si=1711932&issue_id=14803

Im a bit confused by this. House prices are slowing considerably. We have an EA on here telling us nothing us shifting. Price drops are happening everywhere... AND yet according to this article Frank Conway reckons that mortgages drawn down are up 40% in the last 3 months!!! Is it just me or is there something funny about this??


----------



## plaudit

howstrange said:


> http://www.unison.ie/irish_independent/stories.php3?ca=9&si=1711932&issue_id=14803
> 
> Im a bit confused by this. House prices are slowing considerably. We have an EA on here telling us nothing us shifting. Price drops are happening everywhere... AND yet according to this article Frank Conway reckons that mortgages drawn down are up 40% in the last 3 months!!! Is it just me or is there something funny about this??


 
I like the way they tack this onto the end of the article though:

_Meanwhile in the US, sales of second-hand houses fell last month to the lowest level in almost three years, and prices of single-family homes suffered their greatest annual decline since at least 1969. _


----------



## DoctorEvil

howstrange said:


> http://www.unison.ie/irish_independent/stories.php3?ca=9&si=1711932&issue_id=14803
> 
> Im a bit confused by this. House prices are slowing considerably. We have an EA on here telling us nothing us shifting. Price drops are happening everywhere... AND yet according to this article Frank Conway reckons that mortgages drawn down are up 40% in the last 3 months!!! Is it just me or is there something funny about this??



Does mortgage drawdowns include remortgages?


----------



## Debtwish

howstrange said:


> http://www.unison.ie/irish_independent/stories.php3?ca=9&si=1711932&issue_id=14803
> 
> Im a bit confused by this. House prices are slowing considerably. We have an EA on here telling us nothing us shifting. Price drops are happening everywhere... AND yet according to this article Frank Conway reckons that mortgages drawn down are up 40% in the last 3 months!!! Is it just me or is there something funny about this??


 
Priceless.  

I love the arrogant, finger-wagging tone of the article. As if they are giving first time buyers a well deserved ticking-off for holding off and not buying houses. But this is my favourite bit.



> Frank Conway of the Irish Mortgage Corporation said they have seen a 40pc increase in the numbers drawing down mortgages in the past three months as first time buyers (FTBs) opt to get onto the property ladder before they are priced out. *He also pointed out that the House Price Index is skewed by auction prices which are not reflective of the market at large. *


 
I don't remember any compliants about the structure of the House Price index when prices were rising at stellar rates. Do you?


----------



## BigM

Debtwish said:


> I don't remember any compliants about the structure of the House Price index when prices were rising at stellar rates. Do you?


Talk about having your cake and eating it... auction results through the roof = buoyant market. auction results through the floor = not representative.
It would be funny if it wasn't so sad...


----------



## treora

howstrange said:


> Im a bit confused by this. House prices are slowing considerably. We have an EA on here telling us nothing us shifting. Price drops are happening everywhere... AND yet according to this article Frank Conway reckons that mortgages drawn down are up 40% in the last 3 months!!! Is it just me or is there something funny about this??


 
The mortgages are not to buy Irish properties but by investors and immigrants to by foreign properties


----------



## BigM

treora said:


> The mortgages are not to buy Irish properties but by investors and immigrants to by foreign properties


 
Anything to back this up?


----------



## howstrange

howstrange said:


> http://www.unison.ie/irish_independent/stories.php3?ca=9&si=1711932&issue_id=14803
> 
> Im a bit confused by this. House prices are slowing considerably. We have an EA on here telling us nothing us shifting. Price drops are happening everywhere... AND yet according to this article Frank Conway reckons that mortgages drawn down are up 40% in the last 3 months!!! Is it just me or is there something funny about this??



I love the way too the big headline is "House prices up 13%". I think this was talked about earlier on the thread that when prices are starting to decline, they will start displaying the overall yearly figure! You will have to read the smalll print to see hwat is actually happening!


----------



## treora

Andy Doof said:


> I guess it all depends on your agenda...speaking as a homeowner and as an investor I would prefer to see a soft landing. The bears who are dumping their properties want to see a crash. The soon to be first time buyers want to see a crash, or do they? Perhaps the thought of their massive inheritance not being so massive is a greater influence...


 
Tell me think, the value of my parents house goes down, so my inheritance goes down and my inhertitance tax goes down, hum. I live there or rent it and in a few years when the next wave of egar buyers comes around I sell it for an inflated price and retire to the sun.

Potential FTBs want the crash.


----------



## treora

BigM said:


> Anything to back this up?


The fact that daft now has an overseas section.


----------



## BigM

treora said:


> The fact that daft now has an overseas section.


 
I take it this a joke?


----------



## Guest126

Ah, incontestable proof


----------



## phoenix_n

From Usatoday.

Sellers sing the blues as price drop sets record


----------



## Duplex

No acceptance that this market was a speculative bubble by much of the media then.  Corporal Jones like exclamations of 'Don't Panic Don't panic' while hopping about in aah... well.... a panic, are frankly contemptible.   It was a bubble, it no longer is a bubble its a normal market, i.e. a market driven by fundamental supply and demand.


----------



## phoenix_n

ajapale said:


> Yes, by the time I read the taxi driver side show above the debate was back on track. It could also be agrued that taxi drivers influence and reflect public sentiment. They might even be today's equivalent of the shoe shine boy of the late 1920's.
> 
> Please try to avoid posting little fragments of unattribted figures with out commentary or analysis.


 
A 20% rise in inventory in one suburb in 2 weeks to me is not an unattributed fact and is a major factor in the weakening in the market.

But I'll keep those figures to myself from now on then.


----------



## BigM

phoenix_n said:


> A 20% rise in inventory in one suburb in 2 weeks to me is not an unattributed fact and is a major factor in the weakening in the market.
> 
> But I'll keep those figures to myself from now on then.


 
Have to agree with Phoenix here. for regular readers the updates are informative and supportive of the (growing) consensus that supply is rapidly escalating  - due to changes in 'current sentiment'...


----------



## Guest111

Let's have a bit of balance here...of course the brokers have an agenda.
But prices increased 0.7% nationally last month and rose by 1.7% in Dublin, the second highest increase in the last year.
And we're in the mouth of Christmas...who chooses to move house then?
Some crash...yeah, totally spectacular man!


----------



## ben10

Hi

Just thought i'd throw my two cent in (well, if i had 2 cent after buying my first home). I have bought an appartment in what seems to be Dublin’s new mass development area of carrickmines, paying almost 500,000 for a large 2 bed apt (900 sqft, with excellent views). With limited knowledge of the housing market I bought this in the first quarter of this year as prices were still rising & I was of the opinion that I better buy now before prices go up any further. 
Now, being an apt, I plan upgrading to a larger house within 5 years & hoped by buying in this area would supplement the extra finance needed for the upgrade. Since buying, the luas has been confirmed for 2010, superquinn, dunnes & other stores have decided to open in the area and there seem as to be many other projects (eg 5 star hotel, bars, crèches) of interest to buyers in the pipeline.
My question here is do other posters think I would be able to sustain my 500, 000 should the bubble burst or as it will be, in my opinion, a great place to live in the coming years should I still expect some level of growth. I know this a “how long is a piece of string”   type question but surely areas such as this & possibly newbridge where infrastructure is increasing along with property development, house prices should at least keep their value.


----------



## Remix

plaudit said:


> I like the way they tack this onto the end of the article though:
> 
> _Meanwhile in the US, sales of second-hand houses fell last month to the lowest level in almost three years, and prices of single-family homes suffered their greatest annual decline since at least 1969. _


 

Yes good one Edel. She's probably obliged to report unfiltered hype from various property charlatans-on-the-make.

..But managed to slip in a wake-up call as the last word.


----------



## howstrange

Andy Doof said:


> Let's have a bit of balance here...of course the brokers have an agenda.
> But prices increased 0.7% nationally last month and rose by 1.7% in Dublin, the second highest increase in the last year.
> And we're in the mouth of Christmas...who chooses to move house then?
> Some crash...yeah, totally spectacular man!



AGAIN these figures are 3/4 months at least out of date as they are based on when the mortgages are drawn down!!


----------



## CelloPoint

ajapale said:


> Yes, by the time I read the taxi driver side show above the debate was back on track. It could also be agrued that taxi drivers influence and reflect public sentiment. They might even be today's equivalent of the shoe shine boy of the late 1920's.


Hey! Taxi drivers are not akin to shoe-shine boys! I'll bet your average driver makes more money than your average professional multi-national worker. You're right though about the sentiment - taxi men could be a good guage of what people are thinking, considering they talk to people from all walks of life on a daily basis. For example, I had a woman in the back there a few days ago - she was telling me she just got the papers from the bank to sign up for a mortgage (the personal details people tell you never ceases to amaze me! it's like we're an anonymous counciller who you can tell anything to...). Anyway, I told her I would play devil's advocate and basically that she'd be a fool to buy in 2006. Without breaking the woman, I recommended her to look at this thread at least before signing on the dotted line.

Read that article in today's Indo too. Looks like gloss paint on a well rotten door to me. Not sure if that door will survive the winter...


----------



## hmmm

ben10 said:


> My question here is do other posters think I would be able to sustain my 500, 000 should the bubble burst or as it will be, in my opinion, a great place to live in the coming years should I still expect some level of growth. I know this a “how long is a piece of string”   type question but surely areas such as this & possibly newbridge where infrastructure is increasing along with property development, house prices should at least keep their value.



The problem is that we are (some believe) in a bubble, so whether an area is nice or has infrastructural improvements coming down the road is irrelevent, because house prices are hugely overvalued. E.g. if you have a car worth 10k and someone offers to buy it for 20k. If that other buyer adds fancy new wheels to the car which will add 1k in value to it, is it now worth 21k or 11k?

Personally I think the "I had to buy because otherwise I'd never be able to" was naive reasoning and may prove costly - sorry. If you are happy to live there for 10 years and can afford the mortgage you can ride out anything that may (or may not) happen, but I wouldn't assume that increases in your own house price will enable you to buy the bigger place.


----------



## topman

BEN 10:

Just because a few shops and a tram line will coming knocking  your way by 2010 at the earliest doesnt' mean that your apartment will be still worth 500k. Thats assuming it was worth 500k when you bought it !!


----------



## BigM

ben10 said:


> I have bought an appartment in what seems to be Dublin’s new mass development area of carrickmines, paying almost 500,000 for a large 2 bed apt (900 sqft, with excellent views).





ben10 said:


> but surely areas such as this & possibly newbridge where infrastructure is increasing along with property development, house prices should at least keep their value.




Nowhere will necessarily 'keep their value'. But as far as I'm concerned, the most NB aspect of the purchase is the location. If you buy in your preferred location then you should be ok.
If prices fall a small amount, your desired trade-up property will be similarly affected and it still might be feasible for you to move in 5 years; 
if prices crash and you face neg equity at least you're living in your preferred area;
if prices keep rising at least your current property keeps pace (in % terms) with your desired property - you just have to hope your wage inflation makes up the difference!

As for Newbridge - isn't that where everyone is up in arms about the lack of schools?


----------



## CelloPoint

ben10 said:


> Hi
> 
> Just thought i'd throw my two cent in (well, if i had 2 cent after buying my first home). I have bought an appartment in what seems to be Dublin’s new mass development area of carrickmines, paying almost 500,000 for a large 2 bed apt (900 sqft, with excellent views). With limited knowledge of the housing market I bought this in the first quarter of this year as prices were still rising & I was of the opinion that I better buy now before prices go up any further.
> Now, being an apt, I plan upgrading to a larger house within 5 years & hoped by buying in this area would supplement the extra finance needed for the upgrade. Since buying, the luas has been confirmed for 2010, superquinn, dunnes & other stores have decided to open in the area and there seem as to be many other projects (eg 5 star hotel, bars, crèches) of interest to buyers in the pipeline.
> My question here is do other posters think I would be able to sustain my 500, 000 should the bubble burst or as it will be, in my opinion, a great place to live in the coming years should I still expect some level of growth. I know this a “how long is a piece of string”   type question but surely areas such as this & possibly newbridge where infrastructure is increasing along with property development, house prices should at least keep their value.



I personally think Carrickmines is a great area. It's still an apartment in the suburbs, but the fact that it's in Carrickmines means it will probably ride the storm better than one in say, Adamstown or Clonsilla. There are good buys and bad buys no matter what stage of the market cycle you buy in, and I reckon an apartment in Carrickmines for 500k would be on the upper end of the good-buy/bad-buy spectrum. Mind you, I haven't seen the apartment, this is just my quick opinion. 

But if you've come here looking for reassurance, I think you should probably close your eyes as you're in the wrong place!


----------



## Guest111

So fecking what...they're the most up to date figures available. Figures, fact, concrete, not the speculation we are engaged in.
To be fair CelloPoint, I think the shoeshine comment wasn't meant to be offensive. Both are good yardsticks for "the word on the street"


----------



## BigM

CelloPoint said:


> Hey! Taxi drivers are not akin to shoe-shine boys! I'll bet your average driver makes more money than your average professional multi-national worker.


 
I think ajpale was referring to the JFK's father (grandfather?) who sold his shares before the 1929 crash. His argument was that once the shoe-shine boys were giving out stock tips the boom was over....


----------



## conor_mc

ben10 said:


> My question here is do other posters think I would be able to sustain my 500, 000 should the bubble burst or as it will be, in my opinion, a great place to live in the coming years should I still expect some level of growth. I know this a “how long is a piece of string” type question but surely areas such as this & possibly newbridge where infrastructure is increasing along with property development, house prices should at least keep their value.


 
You're mistaking _value_ and _price_.

Infrastructure adds value to your property, but only relative to the rest of the market.


----------



## howstrange

Andy Doof said:


> So fecking what...they're the most up to date figures available. Figures, fact, concrete, not the speculation we are engaged in.
> To be fair CelloPoint, I think the shoeshine comment wasn't meant to be offensive. Both are good yardsticks for "the word on the street"



Yes but those "figures, fact, concrete" are 3/4 months old when things were just starting to slow!

I dont think the many examples seen here of price drops is speculation. Its FACT!!


----------



## Guest111

It is slightly worrying when a taxi man starts telling you about his 1 Bed in Alicante which "washes its face"


----------



## Guest111

On the one hand we have actual data...on the other we have anecdotes, speculation and our own disparate views.


----------



## conor_mc

Andy Doof said:


> On the one hand we have actual data...on the other we have anecdotes, speculation and our own disparate views.


 
Ironic, considering the vested interests tried to justify that data by excluding auction results.

Anyway, I'm sure the point about this data being 3/4 months old was to counteract your assertion that nobody buys in the run-up to Christmas.


----------



## Guest111

Which suggests that judging the overall situation on what's happening in the mouth of Christmas isn't prudent...


----------



## hmmm

conor_mc said:


> Anyway, I'm sure the point about this data being 3/4 months old was to counteract your assertion that nobody buys in the run-up to Christmas.


I'm a bit confused as to when people are supposed to buy. Nobody buys over the Summer, nobody buys when approaching the budget, nobody buys in the runup to Christmas.


----------



## CelloPoint

hmmm said:


> I'm a bit confused as to when people are supposed to buy. Nobody buys over the Summer, nobody buys when approaching the budget, nobody buys in the runup to Christmas.



Good point!


----------



## JayDub

*Brick workers facing 'temporary' lay-off*

http://www.unison.ie/stories.php3?ca=9&si=1711864&issue_id=14803

"Workers at one of the largest brick makers in the country have been told that production at the plant will cease for at least two months as *supply has exceeded demand*."

"Workers were informed earlier this week that production at the plant will come to a halt at the end of December due to a *downturn in sales and over-stocking of the factory yard*."

Estate agents are twiddling their thumbs, brick makers are getting laid off, enough said.


----------



## soma

ben10 said:


> My question here is do other posters think I would be able to sustain my 500, 000 should the bubble burst



My own opinion (and of course I could be way wrong, just like all the other bears) is that if a capital and interest 25-year mortgage on your apartment is roughly equivalent to the rental cost, then you're safe. If not, I believe it's value will drop until it's affordable by the above criteria.


----------



## Guest111

Lol...good point. Christmas would be the only real no-no for me. I'd happily buy in the Summer, long evenings and good weather to move stuff/paint etc


----------



## Guest111

Why do you think that Soma?
Makes sense when talking about investors but not homeowners


----------



## ben10

Thanks for the input, you have confirmed what i have already been thinking. But i am still optimistic about not loosing equity (otherwise i'd go mad). But i have resigned myself to not getting the pay day that i would have expected had i bought the place 3-4 years ago. I would be happy to stay here for many years to come, just hope i dont have triplets any time soon (maybe when the ECB increase rates again!)
I realise that a few shops & a tram line will not add hundreds of thousands but hopefully it will mean i will be able to sell quicker than most if need be!


----------



## CelloPoint

JayDub said:


> *Brick workers facing 'temporary' lay-off*
> 
> http://www.unison.ie/stories.php3?ca=9&si=1711864&issue_id=14803
> 
> "Workers at one of the largest brick makers in the country have been told that production at the plant will cease for at least two months as *supply has exceeded demand*."
> 
> "Workers were informed earlier this week that production at the plant will come to a halt at the end of December due to a *downturn in sales and over-stocking of the factory yard*."
> 
> Estate agents are twiddling their thumbs, brick makers are getting laid off, enough said.



Nothing surprises me anymore. And another crack becomes visible - how can we patch this one up? Some poor hack is probably already busy trying to gloss over this news snippet.


----------



## hmmm

CelloPoint said:


> Nothing surprises me anymore. And another crack becomes visible - how can we patch this one up? Some poor hack is probably already busy trying to gloss over this news snippet.


I'm a bit confused by this - there has been no indicators that the supply of new housing is reducing, so where does this fit in?


----------



## soma

Andy Doof said:


> Why do you think that Soma?



Because in the past few years I have become a fully paid-up believer in capitalism (with a splash of very moderate socialism).

I genuinely believe in an asset being priced as a function of the income it generates, and that the market will eventually (and possibly ruthlessly) erradicate asset valuations which are based on non-tangible factors such as emotion and groupthink.


----------



## conor_mc

CelloPoint said:


> Nothing surprises me anymore. And another crack becomes visible - how can we patch this one up? Some poor hack is probably already busy trying to gloss over this news snippet.


 

In fairness to the journalist, he's gone against the VI grain with this comment....



> Insiders at the plant now fear that the temporary layoffs are symptomatic of a downturn in the construction sector.
> *Dara deFaoite*


----------



## pugwall

200 & 216 Premier Square on the Finglas road, Dublin 11 both dropped from EUR370,000 to 355,000.
#200 cached;


[broken link removed] 
[broken link removed]
[broken link removed]
It will be interesting to see what the next phase of Prospect Hill will be priced at.


----------



## partisan

hmmm said:


> I'm a bit confused by this - there has been no indicators that the supply of new housing is reducing, so where does this fit in?



Yeah let's not get carried away (yet). It could (and most likely was ;-) ) be caused by poor inventory management and the loss of a major contract to a competitor (rather than a reduction in order size).


----------



## phoenix_n

Andy Doof said:


> So fecking what...they're the most up to date figures available. Figures, fact, concrete, not the speculation we are engaged in.


 
If you put your ear to the train tracks and can hear the train you dont wait until you have to see it to decide to move.


----------



## Guest111

Right...new house building is at an all time high, some production manager got his sums wrong. Yeah, the crash is here!
For gods sake...


----------



## Calina

pugwall said:


> 200 & 216 Premier Square on the Finglas road, Dublin 11 both dropped from EUR370,000 to 355,000.
> #200 cached;
> 
> 
> [broken link removed]
> It will be interesting to see what the next phase of Prospect Hill will be priced at.



I think they're still overpriced. I couldn't understand why the prices on Premier Square were as high as they were and yet people still appeared to be buying them.


----------



## robd

hmmm said:


> I'm a bit confused by this - there has been no indicators that the supply of new housing is reducing, so where does this fit in?



Look at most of the apartments (which in Dubilin seems to account for most units) built over the last few years.  While some of them still use bricks and blocks most of them are poured concrete with pre-fabricated facias and glass.  The brickies priced themselves out.


----------



## conor_mc

hmmm said:


> I'm a bit confused by this - there has been no indicators that the supply of new housing is reducing, so where does this fit in?


 
Just speculation, but maybe some developers have switched to timber-frame construction in order to speed up completions?

Bear in mind also, that there could be a localised reduction in construction in Kilkenny (where the factory is located) and/or a planned development may have been cancelled.


----------



## soma

ben10 said:


> I would be happy to stay here for many years to come



..and Ben that's worth alot. I know several people in "starter homes" where they are very uncomfortable in the area they find themselves in. I hate to sound snobbish but I really cringe when I go to visit these areas. Thankfully the only truly bad thing to happen to any of them was one couple who were forced to sell up (and thank God they could..)  in finglas due to truly horrible harassment.


----------



## Debtwish

conor_mc said:


> In fairness to the journalist, he's gone against the VI grain with this comment....


 
I hear that Dara deFaoite has been taken away for "re-education"


----------



## Calina

Andy Doof said:


> Right...new house building is at an all time high, some production manager got his sums wrong. Yeah, the crash is here!
> For gods sake...



Strictly speaking, it is probably correct to say that the crash isn't here. But you can't say it because new house building is at an all time high - that's generally a precursor to a correction as supply overshoots demand and that is without the minor little detail of supply of housing already far outstripping need for housing (demand being a slightly different beastie - but rents are largely stable and we have a massive rate of unoccupancy). 

However, to deride the considered opinions of a lot of people here who have put forward a hell of a lot of other reasons as to why a crash is possible and and increasingly likely in the way that you do does not give me great faith in the rationality of your argument. Asking prices are stagnating and that is a key indicator of public property buying sentiment. In some cases asking prices are falling and that is a key indicator of problems shifting properties. 

You are perfectly at liberty to state that there will not be a crash, but arguments that amount to "there will not be a crash because you are wrong" which is more or less what almost every single one of your posts amounts to are hardly substantial support of your position. 

1) we have over supply of housing
2) we have rising interest rates
3) housing price growth has slowed massively in the run up to a point three months ago and in the interim vested interests have been screaming that "it's never good in the summer anyway"
4) houses are staying on the market longer
5) we have rising utility prices and fuel prices making the cost of living far from work higher again
6) a significant amount of our economic growth is based on 1) debt driven consumerism and 2) debt driven house purchases. We owe a hell of a lot of money. Manufacturing is dropping and export surpluses are falling. We are getting into a dangerous position. 
7) a lot of people in this country think it's okay to be heavily in debt because they don't know what it's like to be out of work. 

Trouble is on its way. It is naive to pretend it is not. The point for a lot of people is that the longer we put off facing reality, the harder that reality is going to bite. What part of that do you not understand? Property prices eleven times average salary are not sustainable on a national basis, whatever about local variations.


----------



## sandymount

from
[broken link removed]

Dara deFaoite lives in Co Kilkenny with his wife Sue, daughter Jodie and their two cats. He has worked as a journalist for Ireland on Sunday, the Sunday Business Post, the Irish Independent and the Irish Examiner. A man with a life-long interest in the paranormal, he has spent many years* rooting out mysterious stories often overlooked by his colleagues.*


----------



## JayDub

Andy Doof said:


> Right...new house building is at an all time high, some production manager got his sums wrong. Yeah, the crash is here!
> For gods sake...


LOL, funny how the production manager gets his sums right for 10+ years or construction boom, then screws up in a downturn. Yes building is/was at an all time high, but so are vacanies and ghost towns, especially in section 23 areas. There was no mention of lost contracts to other suppliers, just the following,

"Insiders at the plant now fear that the temporary layoffs are symptomatic of a downturn in the construction sector."


----------



## soma

sandymount said:


> he has spent many years* rooting out mysterious stories often overlooked by his colleagues.*



*lol* So the guy is the 'mulder' of journalists


----------



## Arthur Daley

ben10 said:


> Thanks for the input, you have confirmed what i have already been thinking. But i am still optimistic about not loosing equity (otherwise i'd go mad). But i have resigned myself to not getting the pay day that i would have expected had i bought the place 3-4 years ago. I would be happy to stay here for many years to come, just hope i dont have triplets any time soon (maybe when the ECB increase rates again!)
> I realise that a few shops & a tram line will not add hundreds of thousands but hopefully it will mean i will be able to sell quicker than most if need be!


 
I'm in a similar enough position to yourself, but the thing is if it collapses by 20% then all bets are off. The fundamental economics haven't been right for years, so unless the VI can control the falls now or soon enough (think shutdown of supply of new zoned land and new starts) then i don't know where the floor could be? 2000 prices, 2001 prices?


----------



## MadPad

JayDub said:


> *Brick workers facing 'temporary' lay-off*
> 
> http://www.unison.ie/stories.php3?ca=9&si=1711864&issue_id=14803
> 
> "Workers at one of the largest brick makers in the country have been told that production at the plant will cease for at least two months as *supply has exceeded demand*."
> 
> "Workers were informed earlier this week that production at the plant will come to a halt at the end of December due to a *downturn in sales and over-stocking of the factory yard*."
> 
> Estate agents are twiddling their thumbs, brick makers are getting laid off, enough said.


 
_"Insiders at the plant now fear that the temporary layoffs are symptomatic of a downturn in the construction sector."_

Thats it! only question now is how bad is it.


----------



## JayDub

hmmm said:


> I'm a bit confused by this - there has been no indicators that the supply of new housing is reducing, so where does this fit in?


 
The supply of new housing has probably not reduced as of yet, the bricks that build the current supply of housing were made and sold in the last 12 months. The bricks currently sitting in the yard would supply next years market. If the supply of bricks has exceeded demand, could the same not be said of the housing market.


----------



## Guest111

Salaries and interest rates are the only big factors. There will never be enough houses in Dublin itself so demand will always be there.
even an ECB base rate of 5% is not doomsday...the market will just slow in accordance with each increase. It's not they're 3.25% today and 5 tomorrow (like the bad old days)


----------



## MadPad

hmmm said:


> I'm a bit confused by this - there has been no indicators that the supply of new housing is reducing, so where does this fit in?


 
Prior to the dot com boom collapsing, there were leading indicators like reduced movement of freight (online commerce hadnt caught on near enough to justify the valuations, and was even slowing)
This is a leading indicator that the developers are slowing construction, as they need to buy these before building!

i.e. new developments that were being planned must be being postponed....presumably because they cant sell what they already have built and cant afford to pay to build another set or they dont see themselves being able to sell if they build in the near future... 

The only other conclusion is cheaper imports, and that wasn't even hinted at in the article.


----------



## JayDub

Andy Doof said:


> There will never be enough houses in Dublin itself so demand will always be there.


Ireland has a huge non-national population, made up mostly of single male eastern euopean construction works. If construction slows down, where do you see these guys looking for work, most of those I have come across don't speak English. Thats a lot of vacated properties.


----------



## CelloPoint

Andy Doof said:


> Salaries and interest rates are the only big factors.


Market prices are not a big factor?



Andy Doof said:


> There will never be enough houses in Dublin itself so demand will always be there.


Is that a fact?



Andy Doof said:


> even an ECB base rate of 5% is not doomsday...the market will just slow in accordance with each increase. It's not they're 3.25% today and 5 tomorrow (like the bad old days)


Mmm. Well let's say you got your mortgage at 2.75% one year, and three years later rates are at 5% - what, a 90% increase in interest repayments? Let's bear in mind that 3 years is a very short time in terms of a 35/40 year mortgage... And with the ECB talking about "normalising" interest rates, we have to say that 2.75% rates were "abnormal". So mortgagees are just going to have to tighten their belts.


----------



## Guest111

OK, I don't believe there will be a crash because...

1) Interest rates will not go higher than 5%...out of our control and just not pallatable in Germany.
2) There is not an over-supply housing...Supply is only meeting demand now.
3) Pension legislation is being further liberalised...it's getting easier for people to buy investment property tax-free. This is and will further fuel demand.
4) Salaries are not under attack, if anything they are rising. They can sustain debt at its present level and have in the main been stress tested anyway.
5) As I've said before there winever be enough property in Dublin...demand will always be there. And when I say Dublin I mean say Dalkey to Rathfarnham to Clondalkin to Malahide...not beyond.
6) And despite what you may think, most people are taking a long term view anyway. The quick buck merchants are a tiny minority.


----------



## conor_mc

Andy Doof said:


> Salaries and interest rates are the only big factors. There will never be enough houses in Dublin itself so demand will always be there.
> even an ECB base rate of 5% is not doomsday...the market will just slow in accordance with each increase. It's not they're 3.25% today and 5 tomorrow (like the bad old days)


 
Rubbish - you derided our anecdotes and personal opinions, yet you haven't provided one single iota of evidence to support a soft landing into the future.

The only hard statistical evidence I've seen you use is the ESRI figures which merely tell us that a crash hasn't happened _yet_. Nothing you've mentioned supports your argument that a soft landing is almost a certainty.


----------



## Duplex

Andy Doof said:


> Salaries and interest rates are the only big factors. There will never be enough houses in Dublin itself so demand will always be there.
> even an ECB base rate of 5% is not doomsday...the market will just slow in accordance with each increase. It's not they're 3.25% today and 5 tomorrow (like the bad old days)


 

Similar arguments were made by bankers and realtors in Florida twelve months ago.  They were wrong.


----------



## Guest111

They are all our opinions and conjecture.
All I'm saying is the most up to date data we have doesn't support your view.
And a forum like this with self styled experts advising people to hold off buying property can help bring about the Doomsday so many people obviously crave.


----------



## whizzbang

Andy Doof said:


> 2) There is not an over-supply housing...Supply is only meeting demand now.



do we have any details on supply? How much is FTB? How much is trader uppers and how much is investors? FTP and trader uppers will always be with us to some degree, but investor demand is the risk, that could literally dissappear overnight. If it did dissappear then supply would be well over demand I believe.


----------



## Guest111

The continued liberalisation of pensions will stoke this up I believe

And our stream of immigrants coming from a rental culture will live in them...


----------



## Remix

There will always be demand for houses in Dublin - yes but the question is will that demand be of sufficient speculative fervor to keep prices at 
current levels. Personally I doubt it very much.

Even after the technology bubble burst, there was still some demand for technology shares. But it was nothing like the heady days leading up 
to the crash.


----------



## hmmm

I think Andy is just trolling the bears...


----------



## conor_mc

Andy Doof said:


> OK, I don't believe there will be a crash because...
> 
> 1) Interest rates will not go higher than 5%...out of our control and just not pallatable in Germany.


 
Why not? Germans are notorious savers, not borrowers. As long as their economy grows and remains strong, they'll tolerate much higher interest rates if it maintains "price stability". Granted, historically German rates have hovered around the 4-5% range.



Andy Doof said:


> 2) There is not an over-supply housing...Supply is only meeting demand now.


 
Then why the 225,000 vacant houses?



Andy Doof said:


> 3) Pension legislation is being further liberalised...it's getting easier for people to buy investment property tax-free. This is and will further fuel demand.


 
Pure speculation on your part. Just like any other fad, property will have its moment in the limelight.



Andy Doof said:


> 4) Salaries are not under attack, if anything they are rising. They can sustain debt at its present level and have in the main been stress tested anyway.


 
Mortgage debt is stress-tested. Credit cards, personal loans, CU loans aren't. We're rapidly sliding down OECD competitiveness tables, so salaries are coming under attack.



Andy Doof said:


> 5) As I've said before there winever be enough property in Dublin...demand will always be there. And when I say Dublin I mean say Dalkey to Rathfarnham to Clondalkin to Malahide...not beyond.


 
When will you get this, not everybody wants to live in Dublin. I'd guess that most people value proximity to family and friends more than a trophy address!



Andy Doof said:


> 6) And despite what you may think, most people are taking a long term view anyway. The quick buck merchants are a tiny minority.


 
Really? Then the current build-up in inventory couldn't be the thousands of "quick-buck merchants" trying to lock in their profits. IT must be the loonies that are willing to move "in the mouth of Christmas" - but who'd do that, eh?


----------



## whathome

Andy Doof said:


> They are all our opinions and conjecture


 
And the award for "Best Bull" on the housing sentiment thread for 2006 goes to......

Andy Doof! 

Even though I disagree with just about every point that you have tried to put forward here, at least you're making the effort 
Verging on trolling but better than nothing!


----------



## room305

Andy Doof said:


> And a forum like this with self styled experts advising people to hold off buying property can help bring about the Doomsday so many people obviously crave.



Things must be pretty precarious in the housing market if a few bears on an Internet forum can cause the market to crash.

Historically bubbles only end one way.


----------



## Duplex

Andy Doof OK, I don't believe there will be a crash because...

1) Interest rates will not go higher than 5%...out of our control and just not pallatable in Germany. *Interest rates are not fixed by reference to palatability.*

2) There is not an over-supply housing...Supply is only meeting demand now. *15% of the housing stock is empty, the supply of homes for sale is rising, investors made up 30-40% of the market until recently this 'investment' demand was driven by prospects of capital growth.*

3) Pension legislation is being further liberalised...it's getting easier for people to buy investment property tax-free. This is and will further fuel demand. *Pension investors are conservative* 

4) Salaries are not under attack, if anything they are rising. They can sustain debt at its present level and have in the main been stress tested anyway. *Salaries are not rising in the productive sector of the economy.*

5) As I've said before there winever be enough property in Dublin...demand will always be there. And when I say Dublin I mean say Dalkey to Rathfarnham to Clondalkin to Malahide...not beyond.
*Who knows? ( where did you get this information)*

6) And despite what you may think, most people are taking a long term view anyway. The quick buck merchants are a tiny minority. *(Source?)*


----------



## nacho_libre

Andy Doof said:


> OK, I don't believe there will be a crash because...
> 
> 1) Interest rates will not go higher than 5%...out of our control and just not pallatable in Germany.
> 2) There is not an over-supply housing...Supply is only meeting demand now.
> 3) Pension legislation is being further liberalised...it's getting easier for people to buy investment property tax-free. This is and will further fuel demand.
> 4) Salaries are not under attack, if anything they are rising. They can sustain debt at its present level and have in the main been stress tested anyway.
> 5) As I've said before there winever be enough property in Dublin...demand will always be there. And when I say Dublin I mean say Dalkey to Rathfarnham to Clondalkin to Malahide...not beyond.
> 6) And despite what you may think, most people are taking a long term view anyway. The quick buck merchants are a tiny minority.




1) Are you Nostradamous?....5% is very possible. We're talking 35 years here remember.

2) Supply is only meeting demand now, but as we speak there are 10's of thousands of units being worked on for completion around the country.

3) Investment?? I'm sure even you will agree, the time for investment in property 
is not now, or the forseeable future.

4) Salaries in the private sector are barely keeping up with inflation. Not even in 
some cases.

5) The price of property is already taking a hit in Dublin.

6) Agreed....most people are taking the long term view so why would they choose 
to buy a property now?


----------



## Afuera

Andy Doof said:


> OK, I don't believe there will be a crash because...
> 
> 1) Interest rates will not go higher than 5%...out of our control and just not pallatable in Germany.



Plenty of retirees in Germany would disagree with you on this one!



Andy Doof said:


> 2) There is not an over-supply housing...Supply is only meeting demand now.



Are we not forgetting about the recent census?



Andy Doof said:


> 3) Pension legislation is being further liberalised...it's getting easier for people to buy investment property tax-free. This is and will further fuel demand.



The market for property investments can't exceed the size of the market for rentals. Further liberalisation of pensions to allow these types of investments can hardly be seen as  a good thing since we already have oversupply. Since you're an investor yourself, I find it strange that you'd think that this is a good thing for the market!



Andy Doof said:


> 4) Salaries are not under attack, if anything they are rising. They can sustain debt at its present level and have in the main been stress tested anyway.



What world are you living in? You don't need to go too far to find people that have been through periods of pay freezes or are actually getting paid less that they were 5 years ago.



Andy Doof said:


> 5) As I've said before there winever be enough property in Dublin...demand will always be there. And when I say Dublin I mean say Dalkey to Rathfarnham to Clondalkin to Malahide...not beyond.



There's an awful lot of transcient workers in Ireland right now. Where do you reckon they'll go when Germany starts to boom again?



Andy Doof said:


> 6) And despite what you may think, most people are taking a long term view anyway. The quick buck merchants are a tiny minority.



The long term trend has actually shown that property barely beats inflation. The last 10 years or so has been the exception.


----------



## Calina

Andy Doof said:


> OK, I don't believe there will be a crash because...
> 
> 1) Interest rates will not go higher than 5%...out of our control and just not pallatable in Germany.
> 2) There is not an over-supply housing...Supply is only meeting demand now.
> 3) Pension legislation is being further liberalised...it's getting easier for people to buy investment property tax-free. This is and will further fuel demand.
> 4) Salaries are not under attack, if anything they are rising. They can sustain debt at its present level and have in the main been stress tested anyway.
> 5) As I've said before there winever be enough property in Dublin...demand will always be there. And when I say Dublin I mean say Dalkey to Rathfarnham to Clondalkin to Malahide...not beyond.
> 6) And despite what you may think, most people are taking a long term view anyway. The quick buck merchants are a tiny minority.



Interest rates higher than 5% are quite palatable to countries which are not heavily endebted. Such countries include Germany. 

There is a 15% vacancy rate in the country which suggests that at the very least, supply is more than adequate for housing needs, if not for speculation needs. 

Liberalisation in pensions relates mainly to investment products, not property AFAIK at the moment. 

Salaries are rising below the rate of inflation which means they are falling in real terms unless you are a) getting promoted which can't happen for anyone b) working in the public service which isn't the case for everyone. 

There is plenty of property in Dublin. The problem with much of it is that it has been designed with a quick buck in mind rather than the utilitarian nature of housing. Bricks to make money rather than to live in in other words. That being said, there is plenty of vacancy in Dublin as well so I'd hold on the "lack of property in Dublin" front. 

In other words, I don't agree with anything you've said. As for the quick buck merchants, an awful lot of the houses that I'm looking at lately have been built within the last three years - that doesn't sound very long term to me, if you don't mind.


----------



## Sarsfield

conor_mc said:


> Then why the 225,000 vacant houses?


 
Any idea as to the distribution of these properties?  Are they evenly spread across the country or are they comprised exclusively of holiday homes in Leitrim & West Clare?


----------



## Guest111

I'm reeling after that...
Remember even the old drunk holding the "End is Nigh" sign will be right some day.
And please don't quote the census...what a complete joke that was!
Again, I know it's anecdotal but in my circle I could name a lot of people not included at all


----------



## Calina

hmmm said:


> I think Andy is just trolling the bears...



Probably.


----------



## Bumble

Andy Doof said:


> There will never be enough houses in Dublin itself so demand will always be there.





Andy Doof said:


> 2) There is not an over-supply housing...Supply is only meeting demand now.



If real demand is present, inventories wouldn't be rising so quickly!!! Supply is starting to _exceed_ demand, imho: http://irish-property-bubble.blogspot.com, , etc.

With the rising inventories and current property vacancy rate, saying that there isn't an over-supply is crazy talk.....and wait until the migrant workers leave..... 

An astonished long-time lurker......


----------



## Guest111

What relevance does a 15% vacancy level have?!
Surely we can all explain that


----------



## phoenix_n

hmmm said:


> I think Andy is just trolling the bears...


 
Agree.


----------



## Guest111

Forgive my naivety but does trolling the bears mean taking the p..s?


----------



## phoenix_n

Andy Doof said:


> Forgive my naivety but does trolling the bears mean taking the p..s?


 
http://en.wikipedia.org/wiki/Internet_troll


----------



## nacho_libre

Maybe he just has a difference of opinion to most of the people on here?
I'm sure he's entitled to that.


----------



## Calina

Andy Doof said:


> What relevance does a 15% vacancy level have?!
> Surely we can all explain that



Assuming this is a serious question:

You state that demand is only now catching up with supply. If that were the case, our vacancy rate would be touching zero because very single occupable accommodation unit would be occupied. The problem is, on average, the US, which is already hitting a property bust, has a lower vacancy rate than we have, and I think, although I don't have time to go looking for the figures that the European average is below 10%.

If your going to respond that "they're all holiday houses", I'd like to remind you that the CSO figures suggested that they had accounted for holiday houses. You talk a bit of anecdotal evidence - well if you read through the 6000 plus entries on this thread to date, you will find several accounts of completed apartment blocks with very low occupancy rates but where few properties were (at the time) for sale. 

High vacancy is interesting at a time where much property derived wealth is from capital appreciation and not rental generated. It is an indicator of over-supply. 

What's interesting about the two graps on daftwatch is that I felt that as the property market started to turn down, the rental market would temporarily tighten and rents would start rising because investors were pulling from the rental market and entering the sales market. I think this has happened already.


----------



## Sarsfield

Calina said:
			
		

> Manufacturing is dropping and export surpluses are falling


 
Trade Surplus is rising http://www.rte.ie/business/2006/1024/trade.html
And manufacturing employment is on the up too [broken link removed]


----------



## Guest111

Just on my demand will always be there in Dublin itself point...at the end of September/Early October a development was launched in Terenure-College Park I think. Houses starting at 1.2M or 1.5M. They sold 50 the first weekend. I may be slightly off with the figures but that's roughly it.
I think it backs up my point about the periphery being most at risk, demand remaining in Dublin etc


----------



## phoenix_n

nacho_libre said:


> Maybe he just has a difference of opinion to most of the people on here?
> I'm sure he's entitled to that.


 
100%. But when he starts attacking the messagers (eg self styled experts etc) rather than the message it negates anything he has to say.

I for one welcome any opinion, bull or bear.


----------



## Calina

Andy Doof said:


> Just on my demand will always be there in Dublin itself point...at the end of September/Early October a development was launched in Terenure-College Park I think. Houses starting at 1.2M or 1.5M. They sold 50 the first weekend. I may be slightly off with the figures but that's roughly it.
> I think it backs up my point about the periphery being most at risk, demand remaining in Dublin etc



No it doesn't. You have to bear in mind that there is a very limited sector of the population at large who have more than a million euro to splurge on houses. It only applies to a limited subset of demand. The truth is if I had 3 million euro in the bank, God nor man wouldn't get me living in Terenure or College Park. I know someone who's desperately trying to find a house to afford in Cavan who is bitter enough that demand in the area is rising because it's considered to be commutable - with the result that she is still priced out of the area. In Cavan. The property market is not limited to million euro purchases.


----------



## zac

Andy Doof said:


> So fecking what...they're the most up to date figures available. Figures, fact, concrete, not the speculation we are engaged in.
> To be fair CelloPoint, I think the shoeshine comment wasn't meant to be offensive. Both are good yardsticks for "the word on the street"



No Andy we dont like facts and figures on thie forum, we like opinions, suggestions, evening hearld headlines, speculations, we like articles from those who have been consistently wrong for the last 5 years, (they might be right someday though, even the broken clock is correct twice a day). we also hate bankers as they have vested interest in the market, we think they are spin masters and dont care about credibility.


----------



## maxlovecok

Dannybouy said:


> Tell us max when the redundancies start. the first to feel the pain are real estate agents as their will be a stand off no sales no commissions. the agents dont care if prices fall as long as sales happen


 

3 people have already been let go from our office. I can see more redundancies in the near future. You're right. It will start with estate agents, then the mortgage people, the banks, the builders, their suppliers and so on. It's already happening. 
On another note. My aunt bought a house in up-state New York 6 months ago. It's already dropped 60 grand.


----------



## phoenix_n

Calina said:


> No it doesn't. You have to bear in mind that there is a very limited sector of the population at large who have more than a million euro to splurge on houses. It only applies to a limited subset of demand. The truth is if I had 3 million euro in the bank, God nor man wouldn't get me living in Terenure or College Park. I know someone who's desperately trying to find a house to afford in Cavan who is bitter enough that demand in the area is rising because it's considered to be commutable - with the result that she is still priced out of the area. In Cavan. The property market is not limited to million euro purchases.


 
Speaking of Cavan those new semi-d's in the Radisson estate in Cavan are going for 650K. !


----------



## Guest111

I never received a census form...so I can only assume my property is down as vacant. My parents were abroad so my family home is down as vacant. Their house in the country was empty. My brother stayed in a mate's apartment that night, the mate never got a form and my brother didn't put himself down on his own cause he wasn't there.
My tenants didn't get one either
The whole thing was a complete joke


----------



## whizzbang

Andy Doof said:


> And please don't quote the census...what a complete joke that was!



well thats a load of statisticians out of the job so...

If the Centeral Statistics Office is not a valid source of statistics on Ireland then who is?


----------



## Guest111

I'm not making those instances up!
That's just my family...don't get me started on friends


----------



## maxlovecok

Firefly said:


> So you're telling the whole nation on a web forum??


 

Believe it or not I have a conscience. I won't lie to a buyer or a seller just to make a sale.


----------



## Calina

Sarsfield said:


> Trade Surplus is rising http://www.rte.ie/business/2006/1024/trade.html




Trade surplus has been falling since 2002. See here:
[broken link removed]

And the number of people employed in manufacturing is still well below what it was in 2000 according to the link you provided yourself.


----------



## Calina

Andy Doof said:


> I'm not making those instances up!
> That's just my family...don't get me started on friends



Well, everyone I know got a census form and we all filled them out. If I apply the same level of proof to my experience as you do to yours, I can only assume that in fact, the CSO does know what it's doing.


----------



## BigM

There will always be demand for houses in Dublin - that's undeniable. But will there be _enough_ demand to sustain the double-digit annual growth we've seen for the past decade?

Property as an investment currently makes no sense - the rental yields are not there. Fact. Therefore any investors coming into the market now are looking for Capital Appreciation. 

Even assuming the best-case scenario being painted by the VIs (3-5% growth, soft landing etc etc) the Cap Appreciation return doesn't even beat available Deposit Accounts. Why bother subsidising your tenant when you can put the money to better use in a risk-free deposit a/c @ 5%?

So the only rational reason for investing now is if you expect the party to continue. It would appear from the increased inventories (and corresponding rising rents/queues for flats) that a lot of these investors think the party is over.


----------



## ajapale

hmmm said:


> I think Andy is just trolling the bears...



Andy is partaking in the debate.

Hmmm and Co, please desist from name calling and accusations that posters are trolls.


----------



## Guest111

I wasn't calling people here "self-styled experts" by the way...none of us know what's really going to happen. You can only look at the evidence, look at your circumstances and make a call. Mine is don't sell and if the right place comes along go ahead and buy it


----------



## Sarsfield

Calina said:


> Trade surplus has been falling since 2002. See here:
> [broken link removed]
> 
> And the number of people employed in manufacturing is still well below what it was in 2000 according to the link you provided yourself.


 

That's the thing about facts & statistics - you can always pick a set or a time range to suit your argument.


----------



## Guest111

I think we'd all agree there's no chance of continued double digit growth...but stagnation or small growth in preferable locations gets my Taurian vote!


----------



## maxlovecok

Open_Window said:


> Its greast to hear the other side. Iwonder would NEwstlak send Henry down ot a local EA office eh!?
> 
> SO is it mostly investors trying to offload becasue there info (6 months out of date) is the market has peaked or wha?


 

It's definitely peaked. I'm here in the office and there's nothing happening. It's investors, people trading up, people emigrating. The panic hasn't set in yet but there's definitley an urgency in the market. 

Don't send Henry down or my cover will be blown.


----------



## Guest111

Well then if my CSO experience was a joke,and yours was perfect then the reality is somewhere in the middle...i.e. still terrible


----------



## howstrange

Andy Doof said:


> I never received a census form...so I can only assume my property is down as vacant. My parents were abroad so my family home is down as vacant. Their house in the country was empty. My brother stayed in a mate's apartment that night, the mate never got a form and my brother didn't put himself down on his own cause he wasn't there.
> My tenants didn't get one either
> The whole thing was a complete joke


http://www.unison.ie/irish_independent/stories.php3?ca=9&si=1636317&issue_id=14226

"Following inquiries among neighbours, postmen and women and apartment block management companies, the vast majority of those dwellings - some 275,000 - were identified as being vacant. [FONT=Verdana, Arial] In a further 30,000 cases, there was nobody at home when census officials called on various occasions."

Here the difference is specified between the individual not been at home and nobody actually living there! [/FONT]


----------



## Sarsfield

maxlovecok said:


> II'm here in the office and there's nothing happening.


 
Where is your office?

I'd still like to know there thw 225,000 empty properties are - I've no doubt they're there but I suspect they aren't the best located ones!

The old adage of location, location, location will continue to apply even in a crash.

I could envisage a soft landing in average middle-class city suburbs and major towns being balanced by an armageddon in commuter belt towns that are lacking in public transport & services.


----------



## ajapale

Andy Doof said:


> Well then if my CSO experience was a joke,and yours was perfect then the reality is somewhere in the middle...i.e. still terrible



Andy, please just debate the issue! This quoted post is OT and meaningless.
aj


----------



## Duplex

Andy Doof said:


> Mine is (advice) don't sell and if the right place comes along go ahead and buy it


 
The former would seem to preclude the possibility of the latter?


----------



## Guest111

Sorry, I meant if you have a second property don't dump it.
And if you see another suitable one, go for it


----------



## Guest111

I think this 225,000 figure is dodgy to say the least...I've given my own personal examples.
What about those who think Census=Revenue and give it a wide berth.
They're out there, Bertie had to promise the info wouldn't be used against people.


----------



## MadPad

Andy Doof said:


> Well then if my CSO experience was a joke,and yours was perfect then the reality is somewhere in the middle...i.e. still terrible


Put it a little closer to perfect... I was out of the country before the census... guy dropped the form in on the morning and remarked that he had called 4 times, knew the house wasnt empty as he had spoken to the neighbours... He called again at least twice to pick it up as i was away again....

but then I'm in on the northside, it was probably a different experience in the shantytowns of Dublin 4 or 6


----------



## Duplex

Public sentiment can turn quickly.  For instance, last year Florida was all the rage this year its soooo 2005.  But Florida hasn't changed, mortgage rates are still quite low, in fact prices are lower making it an even more attractive location. So where have the heaving throngs gone? 





> The Florida press reacts to the home sale numbers. The Palm Beach Post, “Even the most steadfast residential real estate bull is going to have a hard time denying the bear is in the house with Wednesday’s sales report from the Florida Association of Realtors. Now, buyers are calling the shots.”
> 
> “The slowdown has caused an astounding 49-month supply of existing homes for sale in Palm Beach County, Regional MLS records show. ‘It’s very frustrating because there aren’t a lot of buyers, and all the negotiating power is on the other side now,’ said Richard Klein, who has had his four-bedroom, three-bath home west of Boca Raton on the market for three months.”
> 
> “He has had no serious offers, even though he dropped the price $50,000. ‘The buyers who are out there now are very aggressively looking for tremendous price cuts,’ said Klein’s agent, Barbara Siegel.”
> “‘In most neighborhoods where we sell property, the average sales price has dropped more than 20 percent this year,’ said broker Thomas Moffett, whose office sells property in central Palm Beach County.”
> 
> The Sun Sentinel. “Palm Beach County existing home sales fell a whopping 53 percent in September. The county’s year-over-year median price dropped $34,500 or 9 percent last month, the Florida Association of Realtors said Wednesday.”
> 
> “Mike Larson, an analyst in Jupiter, said that builders are offering $100,000 discounts, one-day sales and other perks, which are helping lower home values across the region. Sellers of existing homes can’t match those incentives, so inventory is piling up.


----------



## howstrange

Andy Doof said:


> I think this 225,000 figure is dodgy to say the least...I've given my own personal examples.
> What about those who think Census=Revenue and give it a wide berth.
> They're out there, Bertie had to promise the info wouldn't be used against people.



Where are you getting 225000 from?? It says 275000 on the article. Also I already mentioned the distinction between being vacant and nobody at home. . Whats your reasons for saying the figures are dodgy?? And dont just scream stuff off the top of your head, maybe come up with detailed explanations for once!!


----------



## Calina

Andy Doof said:


> I think this 225,000 figure is dodgy to say the least...I've given my own personal examples.
> What about those who think Census=Revenue and give it a wide berth.
> They're out there, Bertie had to promise the info wouldn't be used against people.



If people are afraid of Revenue, my assumption is that they have reason to fear Revenue. If, however, they are up to date on their tax liabilities, then I don't understand why they would give it a wide berth. 

Information derived from the Census is used for planning purposes into the future. If, in fact, you are correct, and people deliberately avoid correctly filling out the census form, it is probably no wonder that 1) the road network is inadequate 2) the public transport network is inadequate 3) the provision of schools places is inadequate and 4) the provision of medical services is inadequate. 

People who have contributed to this by refusing to fill in the census form are in fact, working against themselves. Arguments such as yours above are what would make me feel a bit more enthusiastic about a little more bureaucracy in terms of registering where people are living on a local authority basis such as they do in most European countries apart from the UK. We might then have a better chance of adequate planning into the future and may perhaps avoid a future housing bubble. 

In short, we are damaged by people refusing to fill out the census and for that they should be censured. Excuses such as being afraid of the revenue should be followed up by the revenue checking out who owns every single house from which a census form was not returned. People who do not pay their taxes should be pariahs. 

In the meantime, of course, that changes little. On average, for the past five years, property has been seen as a get rich quickly scheme. Now there are some doubts as to its efficacy. One has to wonder why. 

I'm interested to see, additionally that you don't apply the same level of concern about the three to four month old mortgage figures from PTSB/ESRI (which are part VI) as you do to the CSO which does not have a vested interest in the census figures. It just counts.


----------



## Duplex

Andy Doof said:


> Sorry, I meant if you have a second property don't dump it.
> And if you see another suitable one, go for it


 

You suggest to buy more property in the current market.  Would you wait six months if you thought prices might be cheaper before deciding to buy?


----------



## Maine

Arthur Daley said:


> I'm in a similar enough position to yourself, but the thing is if it collapses by 20% then all bets are off.
> 
> A crash will be better for FTBs. Say they bought the 500k apartment. Then the house they aspire to is 1m. If property prices double the gap has widened. Selling on the apartment for 1m will then require a further 1m mortgage to buy the house at 2m. Even trader uppers in recent years are still getting hammered as the above has been happening. Hence do not fear a crash.


----------



## Guest111

I'd buy now...but's that's because I think there's no crash coming.
You gotta make your own call based on your own circumstances.
I think when it's your home the criteria you use are different. Personally, I'd be more cautious with investments but with my own home what I want is what I want-sod the expense!


----------



## Calina

Maine said:


> Even trader uppers in recent years are still getting hammered in as the above has been happening. Hence do not fear a crash.



This only holds if the effects of the crash are limited solely to the housing market. Because of the rush to equity release in recent years, and much of our consumer confidence being underpinned by relatively easy and inexpensive debt, this is not a given. As a result, while I would assume that a crash would directly benefit quite a few people in terms of making house purchases affordable again, the problem - and elephant in the corner - relates to how the wider economy would be affected. I can't really foretell that with any accuracy. My position has always been that we would be better served by a correction sooner rather than later because the bigger the bang, the bigger the collateral damage. However, for now, I am not so confident that the wider economy will escape unscathed. I work in the services sector so I am somewhat nervous about the impact on a fall off in discretionary spending. 

That being said, it is less likely to have a long drawn impact on the future of the country than continued untramelled and irrational growth in the property market. See a crash as the lesser of two evils, although not without its costs. If nothing else, it'll be impossible to listen to talk radio in this country as people whinge that "property shouldn't go down".


----------



## Guest111

I wasn't advocating non-compliance with the census or the Revenue! I'd love to see registers and regulation for all those areas.
I have a firm belief that the census was flawed, that the information specifically relating to vacant properties has no relation to a debate about the future of the housing market. Frankly, I'm p..sed off that I've given examples where 80% of my immediate family were not included, where 4 properties aren't even on the radar and still people say "oh, you're just talking generalaties"!


----------



## Arthur Daley

Calina said:


> That being said, it is less likely to have a long drawn impact on the future of the country than continued untramelled and irrational growth in the property market. See a crash as the lesser of two evils, although not without its costs. If nothing else, it'll be impossible to listen to talk radio in this country as people whinge that "property shouldn't go down".


 
This is why momentum is everything. If it sustains enough to cause 20% drops it'll go much further. This thead has been way ahead of the mass media for 3 months now, but now it's in the mass media the predictions of what'll happen next have kinda dried up. I reckon we'll see major responses from the VI's in terms of supply and pushing the credit envelope out even further to a truly reckless stage, before a crash can be called.


----------



## Guest111

I'd suggest that buying and selling property is and will become like most "businesses" as they evolve.
Witness the last few years...the definition of a no-brainer. Buy anywhere, it'll go up.
Now, much as the business world, retail trade or whatever has tightened up you have to be good to survive.
The This post will be deleted if not edited to remove bad language may fall out of the 1 bed in Balbriggan you bought off the plans. But the guy earlier who's thought through his Carrickmines purchase should be fine.
Again I'll say I don't believe we'll see an overall "crash".


----------



## Calina

Andy Doof said:


> I wasn't advocating non-compliance with the census or the Revenue! I'd love to see registers and regulation for all those areas.
> I have a firm belief that the census was flawed, that the information specifically relating to vacant properties has no relation to a debate about the future of the housing market. Frankly, I'm p..sed off that I've given examples where 80% of my immediate family were not included, where 4 properties aren't even on the radar and still people say "oh, you're just talking generalaties"!



The problem is that the CSO provides figures regarding vacancies and we know who they are, whereas from you the figures are only anecdotal. In terms of value, I'd choose the CSO over you ever single day and that's before we come to the fact that at least two other contributors including myself have pointed out that our experience contrasts greatly to yours. As a result, I'm unwilling to take your belief that the census was so totally flawed as an article of faith. 

That does not, however, change the fact that flawed or not, the results from the census are expected to be the basis for planning going forward. Non-completion of the census will almost definitely have a negative impact on those who did not complete, along with those who did provided you believe that this is a widespread problem. Given the modus operandi of the census collectors, I have serious doubts that in fact, it is that flawed. It cannot possibly be perfect, but given a line between being a mess and being perfect, I would say that I believe it was closer to perfect than being totally off the wall. 

In any case, even if the figure of 275K is overstated, it is still fair to say that even if it is out by 10 or 15 per cent, it is still a shocking quantity of accommodation not accounted for. 

It does, to my mind, indicate that the current party of property investment being a win-all situation for some sections of society while other sections of society are effectively locked out buying property near where they work cannot possibly continue. It is mathematically impossible for everyone to own two properties and make money on it. Only some people can win, only some people have, and unfortunately, people are going to lose. 

Some people - not necessarily you - seem to take it as an article of faith that once property goes up, it cannot possibly go down at all. Unfortunately, nobody has been able to provide any rational reasons as to why that might be. The problem is affordability and it's running out, along with its friend easy credit.


----------



## bearishbull

*Extract from article in todays Irish times. Property editor calls it as it is. Also in todays property section the managing director of sherry fitzgerald says "Don't Panic, Don't Panic" in a large article. *

*MarketAnalysis:* Interest rate rises, uncertainty over stamp duty and buoyant supply have combined to create a pronounced slowdown in the market, writes *Orna Mulcahy*, Property Editor
The Dublin housing market has had a phenomenal 10-year run but, inevitably, the party had to end.
That's what's happening now, as house prices have stopped rising and, in some cases, are falling back to their level of 12 months ago, wiping out the gains made early this year

The main estate agents in the Dublin housing market had been expecting the slowdown since earlier in year when, after a bumper spring season, the market seemed to run out of steam, leaving a large stock of property unsold.
However, it wasn't until a greater than expected supply hit the market in September - coinciding with a succession of interest rate hikes - that the public realised that the market was in trouble.

The new homes sector, which has been even more vibrant in recent years - and probably the fastest growing in Europe - is also showing signs of fatigue with supply this year expected to hit an all time high of 93,000 units (about 12,000 more than last year).
However, new homes agents used to selling out over a weekend are now having to send their staff back week-after-week to wrap up their sales campaigns.
Though estate agents may not want to admit a correction is taking place in terms of prices, homeowners who believed that their property could earn them a fortune have had to think again.

By any European standards, house prices in Dublin are still at a formidable level, having outstripped salary increases many times over. That will have to change. Economic forecasters are talking about growth rates of 3-5 per cent in 2007, but even these modest predictions may be on the optimistic side, particuarly in the middle section of the market.
A lot now depends on the budget and business could be brisk in December, once Minister Cowen has decided what concessions, if any, he's prepared to make to housebuyers

[broken link removed]
full article


----------



## JayDub

maxlovecok said:


> You're right. It will start with estate agents, then the mortgage people, the banks, the builders, their suppliers and so on.


I assumed it would start with the builders, then their suppliers, the estate agents then the mortgage people and finally the banks. Please explain your chain of lay-offs.


----------



## Remix

*Re: Could it happen here................??*



Stags Head said:


> [broken link removed]


 

Yes, estate agents of Ireland please note - in the US they managed to get sales rebounding (think of all those commisions) by slashing house prices at the fastest rate in 35 years. Get busy !


----------



## Guest111

Essentially, you're calling me a liar.
You're ignoring the fact that people can own 2 properties while there are sufficient tenants. No one is saying everyone does or will own multiple properties.


----------



## bearishbull

[broken link removed]

and the spin from sherry fitz.


----------



## phoenix_n

Andy Doof said:


> They are all our opinions and conjecture.
> All I'm saying is the most up to date data we have doesn't support your view.
> And a forum like this with *self styled experts* advising people to hold off buying property can help bring about the Doomsday so many people obviously crave.


 


Andy Doof said:


> I wasn't calling people here "*self-styled experts*" by the way...none of us know what's really going to happen. You can only look at the evidence, look at your circumstances and make a call. Mine is don't sell and if the right place comes along go ahead and buy it


----------



## Satanta

*Re: Could it happen here................??*



Remix said:


> Yes, estate agents of Ireland please note


I don't think it's the EAs as much as the sellers. EAs want large volumes more than large prices (technically, yes they want both). The EAs would happily slash prices to gain more sales, but they know they won't get the sellers if they don't put an attractive price on the property (and the seller won't/may not agree to sell at a lower(/more accurate???) price).


----------



## Guest111

People here right now! The one's having this discussion


----------



## Arthur Daley

bearishbull said:


> The main estate agents in the Dublin housing market had been expecting the slowdown since earlier in year when, after a bumper spring season, the market seemed to run out of steam, leaving a large stock of property unsold.


 
That was nice that they share this with us all now..........


----------



## JayDub

It begins, a piece of Junk Mail was just dropped into my letter box from Remax, I'd love to scan it and post it online, it sounds of desperation.

"My duty is to you the inquirer, so please feel free to contact me with absolutely any query you may have regarding your property or any land or property in the surrounding areas. Or simply just for a no obligation friendly and professional chat."

It goes on...

"You may of course not be considering selling at this time, but should you or any of your family and friends need property advice now or in the future I would be delighted to assist you."

Its gotten to the stage now that the estate agents are sending unaddressed junk mail.


----------



## MadPad

JayDub said:


> I assumed it would start with the builders, then their suppliers, the estate agents then the mortgage people and finally the banks. Please explain your chain of lay-offs.


 
Can we not pay the builders to  dig a big hole first. 
Then line up the estate agents, the mortgage people, the banks, add in the developers and politicians and the lawyers.
and then ....


----------



## Satanta

JayDub said:


> Its gotten to the stage now that the estate agents are sending unaddressed junk mail.



Now? 
We've been getting this for over the last year. The local EAs have master keys for communal apartment doors to access the letter boxes to assist with the canvasing!


----------



## Guest111

Right, so when anyone says we're going to have a soft landing they have an agenda.
And those who predict a crash are the moral keepers of sanity in this world.
Give me a break, nobody has the foggiest what is going to happen.


----------



## Satanta

Andy Doof said:


> nobody has the foggiest what is going to happen.


Of course not. All any of us have is our opinion.

If they do/did, they would be multi millionaires on the back of property success.


----------



## howstrange

Andy Doof said:


> I'd suggest that buying and selling property is and will become like most "businesses" as they evolve.
> Witness the last few years...the definition of a no-brainer. Buy anywhere, it'll go up.
> Now, much as the business world, retail trade or whatever has tightened up you have to be good to survive.
> The This post will be deleted if not edited to remove bad language may fall out of the 1 bed in Balbriggan you bought off the plans. But the guy earlier who's thought through his Carrickmines purchase should be fine.
> Again I'll say I don't believe we'll see an overall "crash".



Who knows Andy_Doof!! You could be laughing at us next year saying i told you so but at the moment the evidence is pointing to the contrary! You havnt come up with any real evidence why it wont be a crash. For anyone to say it is a crash at the moment is premature ( and i dont think anyone here has yet said that it has crashed!) but its also premature to call it a soft landing. Unless sales start picking up in the next couple of months though a sharp correction across the board is the most likely outcome. Would you not agree?


----------



## Guest111

They'll also tell you they've a queue of buyers for your place...may or may not be true.
Unsolicited mail like that suggests to me that things are so good for them they don't have to have the usual respect for the client...that rubbish like that actually works!


----------



## Calina

Andy Doof said:


> Essentially, you're calling me a liar.
> You're ignoring the fact that people can own 2 properties while there are sufficient tenants. No one is saying everyone does or will own multiple properties.



I imagine this is directed at me. And no, I am not calling you a liar. I am merely pointing out that what you have said is not necessarily everyone else's experience, not to mind the fact that the CSO will pretty much automatically have more credibility than a single anonymous user on the internet. 

The problem is many people have been advised by their banks to hold multiple properties which has had an impact on the supply of starter homes. This is a bad thing and has contributed to somewhat irrational prices in the starter home section. You are also ignoring the fact that if everyone does own one or two homes, then the supply of tenants dries up. Not only that, one of the key points on which the "no crash" argument depends is demographics and that involves immigration because the birthrate in this country is also falling. The number of tenants will fall as will the number of potential buyers. 

In short, the whole thing is a lot more complex than you would have me believe from what you say. The problem is a lot of people do own more than one property while a lot of people cannot afford to buy any property. And much of that property is lying idle, either because capital appreciation is enough of a profit to make renting a nuisance or, in fact, the property is in the wrong place.


----------



## edo

> [broken link removed]
> 
> and the spin from sherry fitz.





> Originally Posted by *bearishbull*
> _ The main estate agents in the Dublin housing market had been expecting the slowdown since earlier in year when, after a bumper spring season, the market seemed to run out of steam, leaving a large stock of property unsold._


 Interesting articles above - it really does seem that The" Corporal Jones' " of the EA world are stepping up to the mark.

This is actually worse than I thought . Even tho Im a definite bear I really expected that it would keep going until summer 2007 thereafter I was expecting all hell to break loose. 

Fair dues to all the guys and gals here who called it.


----------



## Guest111

I agree completely...what's happening right now could be the soft landing I believe in, or the beginning of the doomsday scenario so many here predict. We will know soon enough though.
I do think I have given reasons though...Interest Rates not going over 5%, immigration, a new breed of people happy to rent for life, discretionary trusts and pensions being further liberalised, Dublin itself having too few homes, people being in for the long haul etc etc


----------



## shanegl

Andy suggests that the only anecdotal evidence we can accept is his own.


----------



## soma

bearishbull said:


> *Extract from article in todays Irish times. Property editor calls it as it is. *



That was some pretty forthright stuff from a property editor alright.


----------



## phoenix_n

bearishbull said:


> *Extract from article in todays Irish times. Property editor calls it as it is. *


 
Wow! Could see it coming but there it is now for you. The stalling of the market is now in the public domain.


----------



## Duplex

*Re: Could it happen here................??*



Remix said:


> Yes, estate agents of Ireland please note - in the US they managed to get sales rebounding (think of all those commisions) by slashing house prices at the fastest rate in 35 years. Get busy !


 

The new homes sales increase in the US were based on 'revised' figures.
[broken link removed]


----------



## Guest111

Accepted, but I think there will be a whole constituency who will rent for life.
Let's leave the census issue, it's a moot point and you're right about credibility. I just find it so hard to believe 80% of my family don't really exisstatistically speaking! lol


----------



## Guest111

Pretty funny Shanegl! Suppose it's a Game Theory type thing...I know my anecdotal evidence is true but everyone else's could be b...ocks! Oh what to do...lol


----------



## phoenix_n

edo said:


> Fair dues to all the guys and gals here who called it.


 
Vindicated.  

And if i may make another prediction...........the market will be depressed for another 5 years. 

Options: 
If you have cash reserves invest in Germany, otherwise accumulate cash and wait 4 years to acquire the ideal property in Ireland.


----------



## Debtwish

bearishbull said:


> [broken link removed]
> 
> and the spin from sherry fitz.


 
I find there's much more fun in debunking bullish articles than reading bearish ones,  and this is another classic to print off and keep.

It is interesting that he admits that there is a tightening in the bridging loan market - a prelude to a wider crunch perhaps?

He asserts that transactions for the year to date are "on a par with last year"....Hmmm....Maybe, but what about the last three months I wonder?

He seems to admit that the housing boom is over at least. And, from an estate agent this is about as bearish as you are likely to get.....At least for now, until falling transactions lead to desperation and a change of strategy.


----------



## Calina

Andy Doof said:


> I agree completely...what's happening right now could be the soft landing I believe in, or the beginning of the doomsday scenario so many here predict. We will know soon enough though.
> I do think I have given reasons though...Interest Rates not going over 5%, immigration, a new breed of people happy to rent for life, discretionary trusts and pensions being further liberalised, Dublin itself having too few homes, people being in for the long haul etc etc



You cannot say with any certainty that interest rates will not go over 5% in the same way that no one could have predicted that they would go down as far as two or two and a half. 

Most people are not happy to rent for life - they would be if the legislation here protected their long term interests more effectively but it does not. 

Regarding the trusts and pensions being further liberalised - this is at this point still only speculation. 

As regards your latter two items, 1) sufficient supply is predicated on the place not being deserted and given the large inward migration in the past three or four years this cannot really be relied upon and 2) "long haul" this is still speculation. A lot of people who are in things for the long haul often don't wind up staying there. Like my two previous landlords who sold from under me, for example.


----------



## Firefly

Andy Doof.....If you do indeed work as an EA then I'm totally convinced that the market has changed...6 months ago you weren't even calling bidders back and now you're spending the afternoon on a web forum!
Firefly


----------



## CelloPoint

Firefly said:


> Andy Doof.....If you do indeed work as an EA then I'm totally convinced that the market has changed...6 months ago you weren't even calling bidders back and now you're spending the afternoon on a web forum!
> Firefly



Hilarious!


----------



## Gwynston

Andy Doof said:


> I do think I have given reasons though...Interest Rates not going over 5%,


Eh? But even 5% interest rates could hammer the market! That's almost double where they started from! Are you saying that rates "only" rising to 5% won't have much affect on the market? How do you think people will suddenly be able to afford monthly repayments of nearly 2x?

You think 5% is OK because it's nothing like the historical highs. But a doubling of interest rates when average mortgages are over 10x average salary is a hell of a bigger rise in costs compared to say rates going up to 10% from 7% when a mortgage was only 2x average wage....


----------



## Guest111

Lol...I nearly fell off my chair when I saw that!


----------



## howstrange

Gwynston said:


> Eh? But even 5% interest rates could hammer the market! That's almost double where they started from! Are you saying that rates "only" rising to 5% won't have much affect on the market? How do you think people will suddenly be able to afford monthly repayments of nearly 2x?
> 
> You think 5% is OK because it's nothing like the historical highs. But a doubling of interest rates when average mortgages are over 10x average salary is a hell of a bigger rise in costs compared to say rates going up to 10% from 7% when a mortgage was only 2x average wage....



No 4% is double where they started from!!!


----------



## phoenix_n

Arthur Daley said:


> This is why momentum is everything. If it sustains enough to cause 20% drops it'll go much further. This thead has been way ahead of the mass media for 3 months now, but now it's in the mass media the predictions of what'll happen next have kinda dried up. I reckon we'll see major responses from the VI's in terms of supply and pushing the credit envelope out even further to a truly reckless stage, before a crash can be called.


 
No. Quite a number have here have called a 'crash'. I have.


----------



## Guest111

Calina said:


> You cannot say with any certainty that interest rates will not go over 5% in the same way that no one could have predicted that they would go down as far as two or two and a half.
> 
> Most people are not happy to rent for life - they would be if the legislation here protected their long term interests more effectively but it does not.
> 
> Regarding the trusts and pensions being further liberalised - this is at this point still only speculation.
> 
> As regards your latter two items, 1) sufficient supply is predicated on the place not being deserted and given the large inward migration in the past three or four years this cannot really be relied upon and 2) "long haul" this is still speculation. A lot of people who are in things for the long haul often don't wind up staying there. Like my two previous landlords who sold from under me, for example.


Right, so any justification I give for my few is based on total speculation, whereas your few is based on?...it's all speculation!

Sorry to hear about your landlord problem incidently...agreed the law in this area need a radical overhaul.


----------



## Afuera

Andy Doof said:


> I think there will be a whole constituency who will rent for life.



Not unless there are changes made to the security of tenure in Ireland there won't.


----------



## Guest111

Suppose an upside to a crash would be seing some of the obnoxious EA types who've shown me places over the last few years humbled...I'm sure everyone has had some experience of their antics


----------



## Calina

Andy Doof said:


> Right, so any justification I give for my few is based on total speculation, whereas your few is based on?...it's all speculation!
> 
> Sorry to hear about your landlord problem incidently...agreed the law in this area need a radical overhaul.



I'm glad to see you have figured out how to use the quote button. 

Secondly, uhem, whether you like it or not the following is not speculation:

Property prices on average = 11 times average salary. Historically it is 1:6. The usual response to that is "it's different here and anyway there is two salaries" to which I respond "not always, and if there are children then all bets are off because creche fees usually swallow one salary". 

Property has risen roughly 270% over the past ten years. Salaries have not. 

What pays for property? Salaries. If property costs are rising faster than salaries then there comes a point - fact - whereby you run out of money. It is mathematically impossible for that not to happen. 

We reached that point a while ago. That is why we have all sorts of creative mortgage products on the market along with loosened lending criteria, 100% mortgages, interest only, repayment holidays, 35 and 40 year terms. 

On the other hand, it is pure speculation to say that the government will allow property to be treated the same as pensions. I'm not saying it won't - but my thesis depends on things which have already happened. Your views are supported only by things which might happen. 

The law on tenancy got overhauled 2 years ago. I doubt it will be revisited for a while yet.


----------



## Remix

*Re: Could it happen here................??*



Duplex said:


> The new homes sales increase in the US were based on 'revised' figures.
> [broken link removed]


 
If sales are falling too, you won't hear me complain at all.

Although, the evidence you presented in that link there is maybe not up to the usual standard! 



> sept # is a RISE OF 5.3% !!!​
> how's this? LOL HAHAHAHAHAHA​
> it's because the August # was revised down to 1.02m from 1.50m !!! HAHAHAHAHA!​
> median prices down 9.7% y/y​
> This release is a freaking disaster​


----------



## Debtwish

Question for Andy Doof:

If you are already heavily mortgaged which scenario is worse for you:

A) Interest rates jumping from 9% to 14%?....OR

B) A tightening of interest rates from 2% to 4%?

I should ask this question at dinner parties.....


----------



## Firefly

Wonder have they introduced "Property Economics" as a class in the Uni's yet? It would be very  interesting course - think of it...supply & demand turned on it's head...the more you increase the price the higher the demand!


----------



## BigM

Calina said:


> That is why we have all sorts of creative mortgage products on the market along with loosened lending criteria, 100% mortgages, interest only, repayment holidays, 35 and 40 year terms.


 
And this is the key IMO. I still think that there's a bit to go before we can categorically call the end. 
With another 25bps on the mortgage rates coming on Dec 7th, the affordability is being squeezed harder and harder. The only ammo left for the banks are even longer terms and ever more creative mortgages (such as option ARMs etc). Once _they've_ been exhausted the end will truly be in sight.

I don't think it's any coincidence that the collapse of the US market occured around the same time that a lot of the option ARMs were being rolled for the 1st time (usually 2/3 yrs after inital drawdowns)


----------



## Arthur Daley

Calina said:


> Property prices on average = 11 times average salary. Historically it is 1:6. The usual response to that is "it's different here and anyway there is two salaries" to which I respond "not always, and if there are children then all bets are off because creche fees usually swallow one salary".


 
Yes, I think the equivalent ratio in the states was 8:1 and having been through painfull asset bubbles before, a lot of commentators in the states believe it needed to come back to a bit of reality i.e. 5-6 times.

11:1 in ireland has never been sustainable longer term.


----------



## Guest111

You're forgetting that 35 and 40 year mortgages actually exist now...they did not back then.
Also most families are two income now...they were not back then.
Finally couples are having less children.


----------



## BigM

Andy Doof said:


> You're forgetting that 35 and 40 year mortgages actually exist now...they did not back then.
> Also most families are two income now...they were not back then.
> Finally couples are having less children.


 
But most couples do not earn 2 full salaries over 35/40 years


----------



## Guest111

BigM said:


> But most couples do not earn 2 full salaries over 35/40 years


Not historically but it could be the from now on


----------



## Fredser

Andy Doof said:


> Also most families are two income now...they were not back then.



Will you at least read the previous posts before spouting your inane shight (sic)

Calina said

"the usual response to that is "i*t's different here and anyway there is two salaries*" to which I respond "not always, and if there are children then all bets are off because creche fees usually swallow one salary"."


----------



## BigM

Andy Doof said:


> Not historically but it could be the from now on


how? if that's the case, where are the children going to come from? We can't all go to Malawi...


----------



## Guest111

Debtwish said:


> Question for Andy Doof:
> 
> If you are already heavily mortgaged which scenario is worse for you:
> 
> A) Interest rates jumping from 9% to 14%?....OR
> 
> B) A tightening of interest rates from 2% to 4%?
> 
> I should ask this question at dinner parties.....


 
Eh, the first one?
My spidey senses are telling me I'm wrong though!


----------



## edo

> Wonder have they introduced "Property Economics" as a class in the Uni's yet? It would be very interesting course - think of it...supply & demand turned on it's head...the more you increase the price the higher the demand!


Actually its been there for years - Its aptly called "Perverse Demand"

Property in Ireland has been on a Perverse demand curve for the last decade or so.

Now that the situation and inputs are changing it will be interesting to see it getting back to a normal demand curve !


----------



## Guest111

BigM said:


> how? if that's the case, where are the children going to come from? We can't all go to Malawi...


Maternity Leave...job-sharing...childcare? Don't know


----------



## Calina

Andy Doof said:


> You're forgetting that 35 and 40 year mortgages actually exist now...they did not back then.
> Also most families are two income now...they were not back then.
> Finally couples are having less children.



You're really missing the point, aren't you? The longer term mortgages only exist because property became unaffordable. 

The second income cannot be depended on purely because one party may interrupt work to have children and children, while great bringers of joy are also an economic liability. 

Finally - the fact that couples are having fewer children will mean that the supply of future potential house purchasers will fall. This will have an impact on the longer term view.


----------



## Afuera

Andy Doof said:


> You're forgetting that 35 and 40 year mortgages actually exist now...they did not back then.
> Also most families are two income now...they were not back then.
> Finally couples are having less children.



Sounds like another nail in the coffin for the demographics then... And the viability of long term property investment in Ireland!


----------



## BigM

Andy Doof said:


> Eh, the first one?
> My spidey senses are telling me I'm wrong though!


 
9-14 is a 56% increase
2-4 is a 100% increase.

I sincerely hope you were joking.....


----------



## topman

What Area are Remax dropping the Junk mail ?


----------



## Guest111

Finally - the fact that couples are having fewer children will mean that the supply of future potential house purchasers will fall. This will have an impact on the longer term view.[/quote]

A fair point in the longer term, but regardless of how they came about the very existence of these long term mortgages increases everyone's buying power


----------



## Calina

Andy Doof said:


> Maternity Leave...job-sharing...childcare? Don't know



Do you know how hard it is - in the private sector to get jobsharing? Do you understand that if you are job sharing you are not earning the full salary for that job which you are sharing, that jobsharing is also salary sharing? Do you know how a) expensive and b) hard to find child care is in many parts of this country?

Given that you're depending on this "don't know" to support your idea that there will be some kind of a mythical softlanding, I have to say your faith is almost inspiring.


----------



## Calina

Andy Doof said:


> A fair point in the longer term, but regardless of how they came about the very existence of these long term mortgages increases everyone's buying power



Rising interest rates, such as we are enjoying right now, is decreasing everyone's buying power.


----------



## BigM

Andy Doof said:


> the very existence of these long term mortgages increases everyone's buying power


 
Which fuels ever-increasing house prices, which drives even longer terms, which fuels ever-increasing house prices.... do you notice a pattern emerging? Where does it end? Inter-generation mortgages? That'll be difficult since people aren't having kids anymore...


----------



## Guest111

Calina said:


> Do you know how hard it is - in the private sector to get jobsharing? Do you understand that if you are job sharing you are not earning the full salary for that job which you are sharing, that jobsharing is also salary sharing? Do you know how a) expensive and b) hard to find child care is in many parts of this country?
> 
> Given that you're depending on this "don't know" to support your idea that there will be some kind of a mythical softlanding, I have to say your faith is almost inspiring.


 
The "don't know" was actually a reference to any OTHER way people can manage to have children.
I've given you reasons for my beliefs...they're just not good enough for you!
we won't fall out over it


----------



## MadPad

BigM said:


> 9-14 is a 56% increase
> 2-4 is a 100% increase.
> 
> I sincerely hope you were joking.....


 
It depends on a lot of other factors... if you borrowed at say 7 and were stress tested to 9 then the jump to 14 is tough
but werent we all told to stress a couple of percentage points increase so a 2 to 4 jump should be no worries...

I'm bearish and i think there were 2 really significant pieces of news today that means the slowdown is now public and will get worse.
But the smug certainty of the bears is annoying, not just this poster, the whole "everthing is sh__" mentality... the responses are so dogmatic its almost a religion to you guys...

still reckon the smart bulls will do much better whether prices go down or up, a positive outlook is always better than whinging


----------



## howstrange

Andy Doof said:


> Finally - the fact that couples are having fewer children will mean that the supply of future potential house purchasers will fall. This will have an impact on the longer term view.


 
A fair point in the longer term, but regardless of how they came about the very existence of these long term mortgages increases everyone's buying power[/quote]

Congrats Andy. You have managed to clock up over 100 posts in just over a week. You are certainly persistent. Even if you're arguments are as flimsy as a lot of the apts that have been built over the last few years.


----------



## Afuera

Andy Doof said:


> A fair point in the longer term, but regardless of how they came about the very existence of these long term mortgages increases everyone's buying power



And reduces their future buying power if they take the longer term!


----------



## Guest111

BigM said:


> 9-14 is a 56% increase
> 2-4 is a 100% increase.
> 
> I sincerely hope you were joking.....


 
I wasn't joking! Your example just illustrates perspective.
I imagined what would be a large mortgage for me...then calculated the impact those increases would have.


----------



## edo

> Quote:
> Originally Posted by *Andy Doof*
> _Finally - the fact that couples are having fewer children will mean that the supply of future potential house purchasers will fall. This will have an impact on the longer term view._
> 
> 
> A fair point in the longer term, but regardless of how they came about the very existence of these long term mortgages increases everyone's buying power
> 
> 
> 
> Congrats Andy. You have managed to clock up over 100 posts in just over a week. You are certainly persistent. Even if you're arguments are as flimsy as a lot of the apts that have been built over the last few years.
Click to expand...

[/quote]

My congrats too - Andy you're a class act - most of the gang here haven't had this much fun in ages!


----------



## BigM

MadPad said:


> But the smug certainty of the bears is annoying, not just this poster, the whole "everthing is sh__" mentality... the responses are so dogmatic its almost a religion to you guys...


 
He's a property investor who doesn't realise the difference between a 50% and a 100% increase in costs - I'm sorry if pointing it out seems smug to you.


----------



## ajapale

> My congrats too - Andy you're a class act - most of the gang here haven't had this much fun in ages!



Edo, Please stay on topic and address the post not the poster.

This thread is supposed to be a Great Financial Debate contrarian posters (like andy) should be welcomed.


----------



## MadPad

BigM said:


> He's a property investor who doesn't realise the difference between a 50% and a 100% increase in costs - I'm sorry if pointing it out seems smug to you.


no, maybe you should read the responses again...

It's not all about percentages boys, its about where you start from.

If you are an idiot and started at 2% being maxed out, youre screwed. Yeah its 100%... But to take your example when Japans rates were at 0%

Which would have been better
a jump from 2 to 4%
or a jump from 0% to .25%

oh the second one is an infinite increase.... BS!


----------



## JayDub

topman said:


> What Area are Remax dropping the Junk mail ?


Mullingar. I caught a glimpse of the lady who delivered the junk mail, I'm 95% sure she is the estate agent pictured on the flyer.


----------



## BigM

Andy Doof said:


> I wasn't joking! Your example just illustrates perspective.
> I imagined what would be a large mortgage for me...then calculated the impact those increases would have.


 
But from an investment pov that makes no sense. From a buy-to-live pov you'd rather the smaller _cash_ increase. So I suppose since you're both an investor and an owner, you can have it both ways!


----------



## Guest111

I took the question to mean would I prefer:
a) Interest rates to go from 9% to 14%
b) Interest rates to go from 2% to 4%

I think I would prefer shelling out an extra 2% of my mortgage per year than an extra 5%.
The question is ridiculous...well ridiculous is a bit strong. Vague is more like it


----------



## MadPad

Andy Doof said:


> I took the question to mean would I prefer:
> a) Interest rates to go from 9% to 14%
> b) Interest rates to go from 2% to 4%
> 
> I think I would prefer shelling out an extra 2% of my mortgage per year than an extra 5%.
> The question is ridiculous


+1


----------



## partisan

BigM said:


> 9-14 is a 56% increase
> 2-4 is a 100% increase.
> 
> I sincerely hope you were joking.....



But the absolute increase is smaller.

100k  @ 9% interest (charged annually) = 9k
100k @ 14%  = 14k  (5k per year increase in interest payments)

100k @ 2% = 2k
100k @ 4% = 4k (2k per year increase in interest payments)

The more you borrow the more pronounced that absolute differential will be (and the better off you are at lower absolute interest rates!).


----------



## Guest111

Eloquently put...


----------



## MadPad

partisan said:


> But the absolute increase is smaller.
> 
> 100k @ 9% interest (charged annually) = 9k
> 100k @ 14% = 14k (5k per year increase in interest payments)
> 
> 100k @ 2% = 2k
> 100k @ 4% = 4k (2k per year increase in interest payments)
> 
> The more you borrow the more pronounced that absolute differential will be (and the better off you are at lower absolute interest rates!).


 
nice difference of perspectives ... when buying something

Some people's gut instinct is to start by looking at the repayments often only at current interest rates.
Others look at the price and the size of the loan, the initial rate of interest is not the deciding factor

Either way houses arent cheap


----------



## whathome

partisan said:


> But the absolute increase is smaller.
> 
> 100k @ 9% interest (charged annually) = 9k
> 100k @ 14% = 14k (5k per year increase in interest payments)
> 
> 100k @ 2% = 2k
> 100k @ 4% = 4k (2k per year increase in interest payments)
> 
> The more you borrow the more pronounced that absolute differential will be (and the better off you are at lower absolute interest rates!).


 
You also have to take the purchase price into consideration. If the starting point for interest rates was 9%, the purchase price of the property would be far less. So using a relative increase comparison as BigM did is more relevant.




ajapale said:


> This thread is supposed to be a Great Financial Debate contrarian posters (like andy) should be welcomed.


I think it's indicative of the change in sentiment over the past few months that someone with a bullish viewpoint on property could be described as "contrarian"


----------



## Sidewinder

Andy Doof said:


> I think we'd all agree there's no chance of continued double digit growth...but stagnation or small growth in preferable locations gets my Taurian vote!



Stagnant prices means no capital appreciation, with gross yields of 1-2%.

That's 40% of demand (the investors) up in smoke right there.


----------



## Duplex

*Re: Could it happen here................??*



Remix said:


> If sales are falling too, you won't hear me complain at all.
> 
> Although, the evidence you presented in that link there is maybe not up to the usual standard!


 

Its a fair cop Remix. 

Also worth noting that builders incentives are not ‘analyzed’ out of the sales price by the Census Bureau in arriving at these stats.  And cancellations are not accounted for either. 




> Sales are reported when a contract is signed, not at the closing of the sale. Home builders have reported a large increase in cancellations in recent months.
> 
> The government cautions that its housing data are subject to large sampling and other statistical errors. Large revisions are common.
> The standard error is so high, in fact, that the government cannot be sure sales increased at all in September. The 5.3% increase is statistically meaningless compared with the 15.6% confidence interval.
> It can take up to six months for a trend in sales to emerge. New-home sales have averaged 1.10 million per month over the past six months, roughly unchanged over the past four months. The six-month sales average is now down 15% from December.


 

http://www.marketwatch.com/News/Sto...3D-4D5D-84D5-656D6733EE90}&siteid=google&dist=


----------



## partisan

MadPad said:


> It depends on a lot of other factors... if you borrowed at say 7 and were stress tested to 9 then the jump to 14 is tough
> but werent we all told to stress a couple of percentage points increase so a 2 to 4 jump should be no worries...
> 
> I'm bearish and i think there were 2 really significant pieces of news today that means the slowdown is now public and will get worse.
> But the smug certainty of the bears is annoying, not just this poster, the whole "everthing is sh__" mentality... the responses are so dogmatic its almost a religion to you guys...
> 
> still reckon the smart bulls will do much better whether prices go down or up, a positive outlook is always better than whinging



Sittting on the sidelines when everyone else is taking risks isn't a recipe for financial greatness - safety yes, untold wealth - no...


----------



## Sarsfield

So where *are* these 275,000 empty houses? I believe this has a very significant influence on whether the whole market takes a dive or whether it's the ill advised investor who's going to take the big hit.

If some crappy speculative developments in the back of beyond are finally recognised for what they are, but solid, well located properties maintain their attractiveness, does this count as a crash? The average price of houses may drop, but the 'crash' may be localised. Trophy houses in D4/D6 may suffer the same fate.

But the people in the middle, most ordinary Joes, may see little change?


----------



## whathome

partisan said:


> Sittting on the sidelines when everyone else is taking risks isn't a recipe for financial greatness - safety yes, untold wealth - no...


 
Why do you think you have to take risks to build wealth?

I definitely don't sit on the sidelines. I definitely don't take risks.
untold wealth no, not yet anyway! .... we live quite comfortably and I don't have to "work"  

Saying that you have to take risks to build wealth is rubbish. My most profitable investments were initiated where I had little or no risk.


----------



## partisan

whathome said:


> Why do you think you have to take risks to build wealth?
> 
> I definitely don't sit on the sidelines. I definitely don't take risks.
> untold wealth, not yet.... we live quite comfortably and I don't have to "work"
> 
> Saying that you have to take risks to build wealth is rubbish. My most profitable investments were initiated where I had little or no risk.


 
I agree, it is rubbish - which is why I didn't say it. You won't build "untold" wealth that way. Even deposit accounts have outperformed inflation over the long run...


----------



## whathome

partisan said:


> I agree, it is rubbish - which is why I didn't say it. You won't build "untold" wealth that way. Even deposit accounts have outperformed inflation over the long run...


 
So what were you trying to say then?
Maybe you could also define "untold" for us?


----------



## Open_Window

whathome said:


> So what were you trying to say then?
> Maybe you could also define "untold" for us?



Well I believe that only the universe has untold wealth and it is the property of  no one. Will that do?


----------



## whathome

Open_Window said:


> Well I believe that only the universe has untold wealth and it is the property of no one. Will that do?


 
perfect 

....still waiting on partisan to explain what he was on about, it sounds like he thinks that taking risks is a recipe for "financial greatness"?
With property in Ireland currently overvalued by any fundamental measure, taking a risk on purchasing an investment property is a recipe for financial disappointment IMO.


----------



## zac

whathome said:


> Why do you think you have to take risks to build wealth?
> 
> I definitely don't sit on the sidelines. I definitely don't take risks.
> untold wealth, not yet.... we live quite comfortably and I don't have to "work"
> 
> Saying that you have to take risks to build wealth is rubbish. My most profitable investments were initiated where I had little or no risk.



I think if someone had a profitable investment and thought there was no risk when position was initiated (provided it was not a savings acc insured by somebody) then he got lucky.


----------



## whathome

zac said:


> I think if someone had a profitable investment and thought there was no risk when position was initiated (provided it was not a savings acc insured by somebody) then he got lucky.


 
Why do you think it was luck?

Buying undervalued revenue creating assets, whether they are equities or property ensures that risk is minimised while potential gain is maximised. I just don't get the "you have to take a risk to make a good return" thing.

Property markets are cyclical. Right now the Irish property market provides maximum risk for minimum reward (if any) - not a good buy! And it's not about timing the market, it's about analysing your potential investment on a fundamental basis.


----------



## Open_Window

It seems to me that a lot of the recent articles by industry and commentators, resembles the kind of pressure usually put on the next batch of newbies who seem  doubtful or quickly want to leave the recent "Pyramid scheme" they got involved in but suddenly threaten the continuing  supply of cash, or fundamentally speaking the entire charade itself.

Its rather telling, pathetic.


----------



## fatmanknows

Just browsing at some of the big Gaffs for sale on Myhome.ie. Noticing a number of them are now appearing with no mention of price (although they previously had one). I believe this is the new way of disguising the reduced price. You gotta ring them to sound out their new acceptable offer. Obviously they dont want to spook the market by publicly displaying their reduction.


----------



## whathome

Open_Window said:


> It seems to me that a lot of the recent articles by industry and commentators, resembles the kind of pressure usually put on the next batch of newbies who seem doubtful or quickly want to leave the recent "Pyramid scheme" they got involved in


 
The pressure to "come on in" reminds me of this guy:

[broken link removed]


----------



## Maine

partisan said:


> But the absolute increase is smaller.
> 
> 100k @ 9% interest (charged annually) = 9k
> 100k @ 14% = 14k (5k per year increase in interest payments)
> 
> 100k @ 2% = 2k
> 100k @ 4% = 4k (2k per year increase in interest payments)
> 
> The more you borrow the more pronounced that absolute differential will be (and the better off you are at lower absolute interest rates!).


 
Assume the person was on 50k 

In the 9% days he would have probably got a 50k mortgage on average, max of  75k. = 9% by 75k  = 6,750

In the 2% days the 50k person got a mortgage of 300k = 300 by 2% =6,000

9% to 14% - 10,500 or increase of 3,750

2% to 4% = 12,000 or increase of 6,000

The big change is that once a bank manager had a conversation regarding uncertainties and 20 year terms, now the conversation is more around his targets to lend more money and can you get someone in the HR dept to look again at what your max bonus would be in a great year and maybe you could rent out the garden shed to tourists so that could be also added to the income side.


----------



## roland

whathome: "Why do you think it was luck? Buying undervalued revenue creating assets, whether they are equities or property ensures that risk is minimised while potential gain is maximised. I just don't get the "you have to take a risk to make a good return" thing. "

Hmmm....talk about 20/20 hindsight.  'Undervalued revenue creating assets' in the form of equities or property have risks attaching no matter what they are.  Sure, some might be a 'safer bet' than others, but you were still at the mercy of many factors outside of your control (market forces, economic shocks, fraud, incompetence etc.).  You may have done well but I wouldn't fool yourself or us that you were not taking risks.


----------



## Maine

bearishbull said:


> [broken link removed]
> 
> and the spin from sherry fitz.


 
IMO the S Fitz article is a shocker, the uber bulls coming out to say a slowdown in prices is a good thing - what will they say to all the investors ?? Its certainly a big change from what Finnegan was saying only recently. 

How many redrafts of that article were reviewed in S Fitz before they sent it to the Irish Times. Hazard a guess at maybe 15.


----------



## whathome

roland said:


> Hmmm....talk about 20/20 hindsight. 'Undervalued revenue creating assets' in the form of equities or property have risks attaching no matter what they are. Sure, some might be a 'safer bet' than others, but you were still at the mercy of many factors outside of your control (market forces, economic shocks, fraud, incompetence etc.). You may have done well but I wouldn't fool yourself or us that you were not taking risks.


 
"Risk comes from not knowing what you're doing" - Warren Buffett

Even cash is at the mercy of many factors outside of your control. 

I should explain it better, I'm talking about making investments with little or no "relative" risk. It takes time and a lot of patience but there are plenty of low risk investments that provide an excellent return. It's a shame that many Irish investors can't see anything beyond property.

It's not about hindsight, even today I added to an excellent equity investment that has very little risk. Once I'm sure that the market has misappraised my potential purchase, I don't give it a second thought - buy with confidence and then forget about the market. If the stock market crashed tomorrow, I'd just see it as a great opportunity to buy more potentially undervalued assets.


----------



## BigM

whathome said:


> I think it's indicative of the change in sentiment over the past few months that someone with a bullish viewpoint on property could be described as "contrarian"



LOL 

As far as I can see the argument being put forward by the bears has yet to be properly rebutted so I'm hoping Andy Doof or one of the other bulls brave enough to enter this bear-pit of a thread will do so:
Rental yields don't exist anymore so Cap App is driving the investor market. The property market cheerleaders are predicting it to return 3-5% in Cap App for the next few years which is less than you'll get in a deposit a/c. 
With no yield and little CA return, investors will stop coming into the market. At 40% that's a lot of demand to lose. 

Affordability is being stretched at the FTB level - wage inflation is nowhere near high enough - which feeds all the way up the chain (if wage inflation was high enough to compensate we'd also be in big trouble on a global competitive basis, but that's another day's work!). Longer term mortgages/holidays/ARMs only mask the unaffordability - they're like cough syrup for smokers... they ease the symptoms but don't solve the cause. Houses aren't out of reach from FTBs because IRs are too high/terms are too short/salaries aren't high enough. They're out of reach because they're too expensive.

IMO these are the basic bear arguments why we _should_ get lower prices. It would appear that we are starting to see the first signs of this in the current market.

Anyway, that's enough for now! Looking forward to the next round tomorrow!!


----------



## JayDub

*Home Prices Plunge by Most in 35 Years*
*http://biz.yahoo.com/ap/061026/economy.html?.v=24*
"The Commerce Department reported that the median price for a new home sold in September was $217,100, a decline of 9.7 percent from September 2005."

Bulls can hold their breath or change their underpants, that article concerns the states. Thankfully this will never happen in Ireland. We don't have crashes, we don't have snakes and our farts don't smell.


----------



## Dannybouy

> *Buy up all the empty housing as "affordable housing", and knock some of it down for being "unsafe".
> *Already being put into action. e.g in Cork Fianna Fail TD Noel O'Flynn has just announced that the govt has provided an extra Eur 12,000,000 which is to be used to buy houses in the city at current market prices for use as social housing.. Dublin City Council has also begun doing the same


 
thats an idea sell the house to the council hide the money, bribe my way to the top of the housing list get a 400,000 euro house for 13 euro a week might as well sing on the dole and retire


----------



## Open_Window

Dannybouy said:


> thats an idea sell the house to the council hide the money, bribe my way to the top of the housing list get a 400,000 euro house for 13 euro a week might as well sing on the dole and retire



Well they did manage to sell of most of the council housing thus undermining any control they had over speculation by having a social oversupply. This is the trend of selling of everything else, eircom, aer lingus, ESB. Sweating the assests they call it right?

Soon there will be very little for these jumped up ejits in the Dail to do anyway apart from explain their absence of mind while it was their watch the day the crash is debated in crisis session. 

The Government couldn't have done a better job of adding fuel to this market.

I knew about 2 years ago that all hope was lost when I heard a bunch of girls I guess who where aged around 17-19 talking about property down the back of the bus, how they could't "believe" how much houses were selling around their area, on their road, who was getting what for what. Yet at the same time seeing it as a no brainer for parents & relatives a like buying properties in places like Costa Del Lost Souls which was ultimately a win win.

i see it continues, and oh look a developer is using his high margin high stock to under cut a sinlge home vendor, ah now thats just unfair;



> Yesterday, 05:23 PM
> 
> Posts: 2
> should I under bid first?
> Hi everyone,
> I have my own house up for sale for the last 2 months, I have already had a 2 offers in the first 2 weeks of sale of 25k under the asking price (reason for this is that there is a new develoment same style as my house selling for 25k under my asking price) I basically can't afford to sell it for anything less!
> 
> http://www.askaboutmoney.com/showthread.php?t=39934



Worth checking out this thread, http://www.askaboutmoney.com/showthread.php?t=39571, giving a good picture into the mindset still out their and sneaky "sale agreed" strategy thats new to me but nothing as illegal as estate Agents trying to get cash from people who want to nudge past the 317.5K limit & not pay stamp duty! These are crazy times beware the EA's.


----------



## SherryTrifle

http://www.unison.ie/irish_independent/stories.php3?ca=9&si=1712814&issue_id=14812

FF overturning land rezoning?? !!! surely a joke or an attempt to reduce supply! I love the quote from dick roche about why he overturned the rezoning,

_It would have created a new generation of long-distance commuters consigned to a desperately poor quality of life, the minister told the Irish Independent yesterday._

And the predicted upswing in rents is occuring in america, its just starting to occur here .
http://www.breitbart.com/news/2006/10/26/D8L0FA5G0.html


----------



## Debtwish

Maine said:


> Assume the person was on 50k
> 
> In the 9% days he would have probably got a 50k mortgage on average, max of 75k. = 9% by 75k = 6,750
> 
> In the 2% days the 50k person got a mortgage of 300k = 300 by 2% =6,000
> 
> 9% to 14% - 10,500 or increase of 3,750
> 
> 2% to 4% = 12,000 or increase of 6,000
> 
> The big change is that once a bank manager had a conversation regarding uncertainties and 20 year terms, now the conversation is more around his targets to lend more money and can you get someone in the HR dept to look again at what your max bonus would be in a great year and maybe you could rent out the garden shed to tourists so that could be also added to the income side.


 
It was me that posed the original question on rate increases (I think BigM took some unneccessary stick for it). 

It was critisised for being vague but that was deliberate - I wanted to start a debate. The issue of the absolute level of rates versus the rate of increase in those rates is not discussed enough in the wider world I feel. I have heard many argue that "everything's fine because rates will not go back to 10%+ again", but the reality is not as simple as that.

Some interesting responses, but for me, Maine, you've really hit the nail on the head here.



			
				MadPad said:
			
		

> If you are an idiot and started at 2% being maxed out, youre screwed. Yeah its 100%


 
Therefore, you must be calling a lot people idiots.


----------



## Firefly

Dannybouy said:


> thats an idea sell the house to the council hide the money, bribe my way to the top of the housing list get a 400,000 euro house for 13 euro a week might as well sing on the dole and retire


 

Like your thinking beavis


----------



## Firefly

Measuring property prices by percentage increases (whilst technically correct) does not interest the majority of investors IMO....they're not gonna get too worried when they hear that their 500k property only went up 2% last year...they'll be thinking, great I'm up another 10 grand. 

Also, many investors will be thinking along the lines of eg if the 500k house could be sold today for a 100k profit, I would need a return of 10% to match achieve that same 10 grand and where am I going to get that.
People by and large ignore the subsidising costs IMO as they see this as a legit cost of having a investment property. 

Btw, I do not agree with this investment appraisal in the least - give me +ve cashflow from day 1...just relaying what I think is happening. 

Also people are thinking, sure if rates rise next year I won't be paying into an SSIA so I can still afford to keep the place and sure isn't it going up 10 grand a year and more importantly won't my mates think I'm really cool....a new car is sooo last year...now it's about the 2nd house.....M.A.D...

Firefly


----------



## Savvy

SherryTrifle said:


> http://www.unison.ie/irish_independent/stories.php3?ca=9&si=1712814&issue_id=14812
> 
> FF overturning land rezoning?? !!! surely a joke or an attempt to reduce supply! I love the quote from dick roche about why he overturned the rezoning,
> 
> _It would have created a new generation of long-distance commuters consigned to a desperately poor quality of life, the minister told the Irish Independent yesterday._
> 
> And the predicted upswing in rents is occuring in america, its just starting to occur here .
> http://www.breitbart.com/news/2006/10/26/D8L0FA5G0.html



This decision was the correct one for Co. Laois. It doesn't make sense to allow numerous estates to pop up in small villages. For christ sake, one of the villages, Rosenallis has only one  pub,a shop and a petrol station. It makes far more sense to encourage the development in the towns that have some kind of decent infrastructure already,especially Portlaoise and Portarlington.
Most locals laughed at this when rezonning was planned. I'm sure there will be many farmers very disappointed with this news!


----------



## ajapale

Try to keep focused on the topic for debate here: 

*"Current public sentiment towards the housing market?"
*
Keep politics and general discussion in the LoS section.


----------



## topman

*Auction market shows signs of life*
AS MANY as eight out of 18 properties sold at yesterday's auctions, some of them above their advised minimum value (AMV). 
Six of yesterday's properties were left unsold after auction, but the agents for five of these are now asking prices higher than the agents' AMVs. 

This article is in the Indo today.... are we seeing a slight pick up before the christmas.....


----------



## whathome

topman said:


> *Auction market shows signs of life*
> AS MANY as eight out of 18 properties sold at yesterday's auctions, some of them above their advised minimum value (AMV).
> Six of yesterday's properties were left unsold after auction, but the agents for five of these are now asking prices higher than the agents' AMVs.
> 
> This article is in the Indo today.... are we seeing a slight pick up before the christmas.....


 
Look at the list...
http://www.unison.ie/irish_independent/stories.php3?ca=303&si=1712854&issue_id=14812

Every single Dublin property was withdrawn at auction with a handfull selling after auction. Not one sold under the hammer. Another miserable result but obviously the property section of a newspaper would have to say it "shows signs of life". Also - vendors never sell under AMV at auction, it's Advised Minimum Value and is frequently set up to 20% below what the agent believes the property will sell for.....if it sells!


----------



## mollser

I'm a bear on the market, I think in general its crazily over priced.  I was keeping an eye on a house, 2 doors down from me, very similar to this house
[broken link removed]
but priced at €635k.  A bit much I thought, and when I was only the second person to view it in an hour at its open viewing 2 saturdays ago, I really thought the market had tanked.  These houses attracted huge viewings when I bought 2 years ago.

But lo and behold, only 3 weeks on the market it has gone sale agreed, and I believe for the asking price of €635k, but I would love to find out for sure.

My only point being I was keeping an eye on this to point out a future price drop, but low and behold its gone, so there may be life in some parts of the market left yet???


----------



## whathome

mollser said:


> so there may be life in some parts of the market left yet???


 
Of course there is, I sold a house a few weeks ago, and then bought one 

Nobody said the market was dead, it's just not doing very well.

I'm thinking this is the house you were talking about : [broken link removed]=
Someone probaby fell in love with it and made an offer that the vendor was happy with.  If that kind of thing never happened, there wouldn't be a market!


----------



## mollser

whathome said:


> I'm thinking this is the house you were talking about : [broken link removed]=
> Someone probaby fell in love with it and made an offer that the vendor was happy with.  If that kind of thing never happened, there wouldn't be a market!



outed  !


----------



## Guest111

Morning!
Interesting that NCB predict our population will grow by 30% to 5.3 million by 2020...should keep demand stoked up


----------



## whathome

Andy Doof said:


> Morning!
> Interesting that NCB predict our population will grow by 30% to 5.3 million by 2020...should keep demand stoked up


 
Unfortunately for the property market, the population growth will not be in the home buying age profile. Take a look at the demographic disaster coming up for the Irish property market:

[broken link removed]


----------



## plaudit

Andy Doof said:


> Morning!
> Interesting that NCB predict our population will grow by 30% to 5.3 million by 2020...should keep demand stoked up


 
Thats about 92000 people a year. At 2.5 people per house, which is about the average, thats about 37000 houses a year.


----------



## Eirmail

Andy Doof said:


> Morning!
> Interesting that NCB predict our population will grow by 30% to 5.3 million by 2020...should keep demand stoked up


 
An extra 1.2 million people ,many low income foreigners probably would need about 500,000 properties in 14 years or 35,000 a year. This year we are building 90,000 properties. 

Or are my figures wrong?


----------



## Guest111

Yeah, but "production" isn't going to remain at 90,000 units a year. An increase of 1.2 million people is a fair old increase. If they are immigrants, a lot will rent surely?


----------



## Amygdala

Thats a growth of only 2% year on year. Including domestic birth rate of 50,000 pa.


----------



## Eirmail

Andy Doof said:


> Yeah, but "production" isn't going to remain at 90,000 units a year. An increase of 1.2 million people is a fair old increase. If they are immigrants, a lot will rent surely?


 
if production decrease to 35,000 a year that would mean more than a half of all people employed in building will be let go. Many of these are foreigners who came here to work on buildings. Where will they go?
in would agree though, a 1.2 million increase is an awful lot if you look at it in historical terms. But an economy so reliant on building is also at a high level if you look at it in historical terms.


----------



## thewatcher

Andy Doof said:


> Morning!
> Interesting that NCB predict our population will grow by 30% to 5.3 million by 2020...should keep demand stoked up


 
Pie in the sky stuff,they just extrapolated out current trends like things were never going to change,a useless report really. Does anybody think the party will go on indefinitely ?


----------



## Guest111

thewatcher said:


> Pie in the sky stuff,they just extrapolated out current trends like things were never going to change,a useless report really. Does anybody think the party will go on indefinitely ?


 
So anything that suggests the end is not nigh and there will be a soft landing is self-serving pie in the sky stuff with an agenda?


----------



## thewatcher

Andy Doof said:


> So anything that suggests the end is not nigh and there will be a soft landing is self-serving pie in the sky stuff with an agenda?


 
Eh,what the hell does a guestimate and that's all it is, that the population will be 5.3 million in 14 years time have to do with a Crash v soft landing senario now !.you clutching at straws big time now


----------



## Guest111

thewatcher said:


> Eh,what the hell does a guestimate and that's all it is, that the population will be 5.3 million in 14 years time have to do with a Crash v soft landing senario now !.you clutching at straws big time now


 
Because one of the main thrusts of the "good times being over" argument is that the demand just won't be there. NCB publish a report saying that the population is going to keep increasing and it's debunked as "pie in the sky".


----------



## Arthur Daley

whathome said:


> Of course there is, I sold a house a few weeks ago, and then bought one
> 
> Nobody said the market was dead, it's just not doing very well.


 
 I thought you were one of the main bears here.......... 

So we can conclude that in some circumstances it's a good time to buy, but not rush in blindly on the basis of 'ah sure jeysus the property always goes up.........'

We're still some way off a crash once people stand back and have a look at all this. There are more reasons to buying property than from a pure investment point of view. There are always a certain number of ftb's out there willing to dive in.


----------



## Guest111

Arthur Daley said:


> I thought you were one of the main bears here..........
> 
> So we can conclude that in some circumstances it's a good time to buy, but not rush in blindly on the basis of 'ah sure jeysus the property always goes up.........'
> 
> We're still some way off a crash once people stand back and have a look at all this. There are more reasons to buying property than from a pure investment point of view. There are always a certain number of ftb's out there willing to dive in.


 
Good man Arthur...that's the spirit!
There'll be a crash for the buffoons buying left right and centre but for the discerning punter...let the good times roll on!


----------



## Afuera

Amygdala said:


> Thats a growth of only 2% year on year. Including domestic birth rate of 50,000 pa.



In fairness, I don't think there's been ever been a case of a developed country continuing with a population growth rate of 2% for such a long period of time. Most developed countries have a population growth of below 1%... Are we going to be different? 

Since we're a relatively small island with an eligible supply of workers, 100 times our population, we're very exposed to immigration/emigration trends. When times go good then they will go very good, when times go bad...


----------



## soma

Arthur Daley said:


> I thought you were one of the main bears here..........



From memory, whathome bought again because he is utterly whipped by Mrs whathome


----------



## whizzbang

whathome said:


> Unfortunately for the property market, the population growth will not be in the home buying age profile. Take a look at the demographic disaster coming up for the Irish property market:
> 
> [broken link removed]



I'm afraid I can't see any of these! Can anyone else? I just get a 403 error.


----------



## Arthur Daley

Andy Doof said:


> Good man Arthur...that's the spirit!
> There'll be a crash for the buffoons buying left right and centre but for the discerning punter...let the good times roll on!


 
Mmmm I accept there will always be some transactions, if sufficient momentum gets going we can and probably should for long term competitiveness have a crash.

All this doesn't escape the fact that so many people have got themselves in terrible HOK in recent years. It doesn't justify 11 times avg income for an average house, short term blinkered views on european interest rates, crazy LTV's. releasing equity to but plasma tv's and 4x4s etc. etc.


----------



## partisan

whathome said:


> Unfortunately for the property market, the population growth will not be in the home buying age profile. Take a look at the demographic disaster coming up for the Irish property market:
> 
> [broken link removed]



There are nearly 3 times as many births as deaths in this state and our immigration rate similarly outnumbers our death rate. The only people who aren't of home buying age are the young (who either have not accumulated enough wealth to purchase one, or are not yet in employment). The population will increase, and that means increased demand for homes (we need more houses!). Now as long as the construction industry doesn't oversupply the market....


----------



## Dreamerb

Having put our house on the market over last weekend, first viewing was last night and we have an asking price offer, with further viewings organised for next week. The asking price is set about €15k higher than we'd have put it on at in February (now @ €395k). 

Looks like our target market isn't too bear-ish, but that could be quite location specific.


----------



## Guest111

I thought WhatHome was a lady...


----------



## cheeko

The NCB were proposing a scenario. It's not a forecast or prediction because no economist would pretend to have any idea as to what will happen beyond a 5 year horizon (apart from any group who have an interest in selling property portfolios)


----------



## Guest111

Dreamerb said:


> Having put our house on the market over last weekend, first viewing was last night and we have an asking price offer, with further viewings organised for next week. The asking price is set about €15k higher than we'd have put it on at in February (now @ €395k).
> 
> Looks like our target market isn't too bear-ish, but that could be quite location specific.


 
I think this is a good example...good properties will continue to appreciate.
But the 1 Bed apartment on the bad side of Balbriggan is goosed!


----------



## partisan

whathome said:


> perfect
> 
> ....still waiting on partisan to explain what he was on about, it sounds like he thinks that taking risks is a recipe for "financial greatness"?
> With property in Ireland currently overvalued by any fundamental measure, taking a risk on purchasing an investment property is a recipe for financial disappointment IMO.



Risk - reward
Junk bonds are riskier than Government bonds from developed countries. As such they tend pay a higher rate of interest. That is, you take on the risk, you make more money if it works out.
Starting a business is riskier than working fulltime, but you'll potentially earn a _lot_ more. Running an internet startup is a lot riskier than a corner store. YouTube sold to Google for 1.6 billion...

The entire insurance industry is based on this principle ;-)

Let me clarify that I agree that property is overvalued in Ireland right now, and is not a good investment. However, if you were a bear over the last 10 years you would have missed out on the biggest property bull run in the states history! Not a recipe for creating "untold" wealth. It's easy to sit and do nothing. Taking decisive action to get involved, involves taking risks. Some of the bears on here have suggested that they will try and make money in what they are calling as a bear market - but most will sit it out (again!) I suspect!


----------



## Maine

just on the s fitz article yesterday

IMO the award for calling the top of the market goes to HOK who sold out in early summer.  Clever boys given they have alot of exposure to the new build market.

Have not seen HOK quoted too much re the "soft landing" of the market, Savills who bought them are a quoted company so it would be too much egg on face.

For me this was a key leading indicator of the property market.


----------



## Guest111

cheeko said:


> The NCB were proposing a scenario. It's not a forecast or prediction because no economist would pretend to have any idea as to what will happen beyond a 5 year horizon (apart from any group who have an interest in selling property portfolios)


 
Oh, right the old "people from well established respected firms which are regulated put out blatant self serving lies in order to propagate the myth that all is well".
They can not and would not do that


----------



## shanegl

partisan said:


> There are nearly 3 times as many births as deaths in this state and our immigration rate similarly outnumbers our death rate. The only people who aren't of home buying age are the young (who either have not accumulated enough wealth to purchase one, or are not yet in employment). The population will increase, and that means increased demand for homes (we need more houses!). Now as long as the construction industry doesn't oversupply the market....


 
Today's births are not relevant to the market over the next couple of years. Births in the 80's are. And there's a big drop off since 1980. Less FTBs will be coming on stream.


----------



## whathome

soma said:


> From memory, whathome bought again because he is utterly whipped by Mrs whathome


 
Exactly


----------



## Guest111

Sorry WhatHome!


----------



## shanegl

Andy Doof said:


> Oh, right the old "people from well established respected firms which are regulated put out blatant self serving lies in order to propagate the myth that all is well".
> They can not and would not do that


 

NCB can forecast whatever they want regarding population, their hands are not tied.


----------



## Arthur Daley

Andy Doof said:


> Oh, right the old "people from well established respected firms which are regulated put out blatant self serving lies in order to propagate the myth that all is well".
> They can not and would not do that


 
I wouldn't put too much faith in this. Some of them are doing this every day of the week. People have agendas in business and the media here is often too lazy or silly to do anything except take what is said verbatim.


----------



## Calina

The NCB report is equally based on a lot of assumptions. They assume that life expectancy will continue to rise, they assume that fertility will remain at current levels. Interestingly, after 2020 they expect immigration to fall to 0. 

The problem, as I see it, is that the predictions, as such, will stand or fall on those assumptions. In other words, the report is in a nice pdf, but it is still speculation per se. I suppose that makes it no different to the property market in itself. 

What interests me is the general short termist view of looking at things here. Property doesn't crash overnight. It might crash over seven or eight months, and the cracks might be visible for a long while. But what interests me is that initially, people who called time on untramelled growth were called to provide "proof" whereas people who don't believe that a correction is likely or possible don't have to provide any proof at all, or at least, don't have to provide the same level of proof. NCB's report is an indication of this. Many people have doubts about the property market because it has gone over and above average affordability. Not because they are playing guessing games with the economy and future population. What we have now is not a long term situation, and unfortunately, rising salaries will not buy us out of this situation without also buying us a lot of unemployment. 

Ultimately, the property market comes down to brass tacks. Who has the money, and who hasn't. The banks are running out of options to give people more money to buy property. I'll be interested to see what they come up with to get over short term affordability problems since they've run out of 100% and interest only and 35 and 40 year terms as options. There isn't much left except very dangerous games in a rising interest rate environment.


----------



## shanegl

Andy Doof said:


> I think to suggest they put out fake predictions in an effort to get people to invest in property tracker funds is ludicrous.
> We're not talking about Tony Taylor & Eddie Hobbs Rob Your Pension Ltd.
> 
> I mean there's being cynical and then there being paranoid...


 
No-one suggested that.


----------



## shanegl

Economists can't even get predictions over a few years right. 2020 is pie in the sky. Futurology.


----------



## whathome

Andy Doof said:


> I thought WhatHome was a lady...


 
lol - only on Thursday evenings when Mrs. WH is out


----------



## cheeko

Andy Doof said:


> Oh, right the old "people from well established respected firms which are regulated put out blatant self serving lies in order to propagate the myth that all is well".
> They can not and would not do that


 
Of course they are self serving; they're in it for the money. And the report is not lies because it's about the future. It is fantasy. To consider it as some sort of prediction is to miss the point of the report. The assume the rate of growth in order to illustrate certain things that would happen as the result of that rate of economic growth. They say nothing about where the growth will come from. 
So it would be foolish to form a bullish sentiment on property in Ireland without justifying the productive sources of this high growth scenario.


----------



## Guest111

My experience is those predicting a crash don't seem to provide any evidence.
If they do, you can't disagree. If you say why you believe there'll be a soft landing you get shot to pieces.
It's all speculation...and if all you bears really truly believed you'd be selling all your houses and renting right now


----------



## Calina

Andy Doof said:


> I think to suggest they put out fake predictions in an effort to get people to invest in property tracker funds is ludicrous.
> 
> I mean there's being cynical and then there being paranoid...



They're not, per se fake. They are what could be described as a best case scenario. It's what you expect from people trying to sell financial instruments. Anyone with money + sense would not necessarily take them at face value.


----------



## Guest111

cheeko said:


> Of course they are self serving; they're in it for the money. And the report is not lies because it's about the future. It is fantasy. To consider it as some sort of prediction is to miss the point of the report. The assume the rate of growth in order to illustrate certain things that would happen as the result of that rate of economic growth. They say nothing about where the growth will come from.
> So it would be foolish to form a bullish sentiment on property in Ireland without justifying the productive sources of this high growth scenario.


 
In other words, NCB have a agenda...they want to preserve the good feeling so they put out lies and mistruths or at best extreme and probably unlikely optimism?


----------



## Arthur Daley

Andy Doof said:


> It's all speculation...and if all you bears really truly believed you'd be selling all your houses and renting right now


 
I'm not convinced enough yet to sell. There have been false dawns before. Is there a bubble there? absolutely. Will it unwind in 2007? I'm not sure, if supply of land and new builds is shut off by the VI's prices could be maintained or you could have 10% drops in some areas. Like all market sentiment (including the Irish property market on the way up) momentum places a huge part.


----------



## Calina

Andy Doof said:


> My experience is those predicting a crash don't seem to provide any evidence.
> If they do, you can't disagree. If you say why you believe there'll be a soft landing you get shot to pieces.
> It's all speculation...and if all you bears really truly believed you'd be selling all your houses and renting right now



I rent. I rent because I see no sense in buying a property I don't like in a place I don't particularly want to live in for the long term, causing me to have to trade up (hopefully) and undergo the transaction costs associated when I can, for less money, rent five minutes from work in a nice, new house which although not necessarily perfect (I have flatmates) is signally better than anything I could buy. It's called a lifestyle choice based on cold economics. 

The property market may not correct in my favour, of course, or, given that rents are slowly starting to eke up, not to the extent predicted by some. But ultimately, supply and demand in housing aside, I have somewhere to live. If we had such a problem with supply, I think I wouldn't.


----------



## room305

partisan said:


> Let me clarify that I agree that property is overvalued in Ireland right now, and is not a good investment. However, if you were a bear over the last 10 years you would have missed out on the biggest property bull run in the states history! Not a recipe for creating "untold" wealth. It's easy to sit and do nothing.



Whathome's point about risk is being misconstrued. If you bought ten years ago the income derived from the capital outlay compensated for the risk involved. Even with no capital appreciation in the property you making money - yields were about 10%. You could buy and make your money back in ten years, irrespective of the sale price. As such, whathome viewed it as a low-risk investment.

With the poor yields available now, capital appreciation is required to make money and since this isn't guaranteed, whathome views property now as a higher risk investment.

Once the income derived from the capital is sufficient it mitigates the risk.


----------



## Guest111

Calina said:


> I rent. I rent because I see no sense in buying a property I don't like in a place I don't particularly want to live in for the long term, causing me to have to trade up (hopefully) and undergo the transaction costs associated when I can, for less money, rent five minutes from work in a nice, new house which although not necessarily perfect (I have flatmates) is signally better than anything I could buy. It's called a lifestyle choice based on cold economics.
> 
> The property market may not correct in my favour, of course, or, given that rents are slowly starting to eke up, not to the extent predicted by some. But ultimately, supply and demand in housing aside, I have somewhere to live. If we had such a problem with supply, I think I wouldn't.


 
Yet there's people here saying the tenants just won't be there yet Calina's happy to rent and probably has a better standard of living as a result (I mean more beer money!)
Maybe anyone not on the merry-go-round now has missed the boat...there'll be no crash and the last decade's speculators are the century's winners?


----------



## whathome

room305 said:


> Whathome's Once the income derived from the capital is sufficient it mitigates the risk.


 
Exactly.  Also, with equity investments if you allow a sufficient margin of safety between the price you pay and the intrinsic value of the business then risk is minimal.  Essentially you are paying €1 for €1.50 of value.


----------



## room305

Andy Doof said:


> ... if all you bears really truly believed you'd be selling all your houses and renting right now



What makes you think we're not? As an interesting aside I was speaking to one of Ireland's young high-tech entrepreneurs recently. Won't disclose the name or the company but they have been very successful in carving out a niche for themselves in the games development industry. He was spectacularly gloomy about the future of the Irish economy and not very impressed with the quality of Irish graduates. "How can they justify their wage expectations when I can hire a senior programmer in India for $25 a day?" was one of his comments.

Most relevant to this thread is that he rents himself and advises new workers hired from abroad (mainly for quality reasons - he pays them a decent salary even by Irish standards) not to even consider purchasing here and that they should rent instead!


----------



## Duplex

The Union Tribune reports from California. “San Diego County figures from DataQuick indicated a downturn trend in prices. The median price last month for newly built houses and condos and condo conversions locally was $413,500, down 17 percent from a year earlier, with analysts speculating that much of this change was the result of an increase in lower-priced condo conversions.”
“On sales, DataQuick said San Diego County’s new-housing total was 885 transactions last month, 37.5 percent lower than in September 2005.”

I wonder if the apartment market in Ireland will be the first to witness the impact of a slowing market mirroring the California experience?  Or are we more likely to see these signs in long distance estates?


----------



## phoenix_n

phoenix_n said:


> *76 Tolka Vale,* Glasnevin
> 
> Reduced from  to [broken link removed]........but will still need to reduce further as one selling for [broken link removed]


 
Looks like the first guy is gonna have to reduce further. The one for 325 is now going for 317,500(click above). Thats a 2 bed besides premier square where investors are trying to offload from [broken link removed] to [broken link removed]

Also, this apt for 317 is the first in ages to come into this price category in phibs,drumcondra and glasnevin. The first of many to come......

And some still think we are gonna have a soft landing....

There is going to be a new bidding war. That of lowering your price to attract a buyer......Its happening in some localised areas (above) already.

Probably will read about this in next 4 weeks in the media.


----------



## Calina

Andy Doof said:


> Yet there's people here saying the tenants just won't be there yet Calina's happy to rent and probably has a better standard of living as a result (I mean more beer money!)
> Maybe anyone not on the merry-go-round now has missed the boat...there'll be mo crash and the last decade's speculators are the century's winners?



You really have a simplistic way of looking at things don't you? I rent because what I want to buy is not available in the location where I rent. When that changes I will buy. I think you'll find most people who have severe doubts about the property market have doubts about its sustainability at current levels. When those levels correct (if - just in case you're going to be pedantic) you will find that they will reconsider the situation. 

As for renting in the long term, in this country it is not an option at all, because the legislation, while much improved lately, still compares rather badly to other, more civilised nations where I have also rented such as France, Germany and Belgium. 

The reason speculation became so rampant here is because many speculators behave as though they have few if any obligations. Not being allowed to end Part VI tenancies for reason of sale would have slowed things up quite a bit.


----------



## Calina

phoenix_n said:


> Looks like the first guy is gonna have to reduce further. The one for 325 is now going for 317,500(click above). Thats a 2 bed besides premier square where investors are trying to offload from [broken link removed] to [broken link removed]
> 
> Also, this apt for 317 is the first in ages to come into this price category in phibs,drumcondra and glasnevin.
> 
> And some still think we are gonna have a soft landing....
> 
> There is going to be a new bidding war. That of lowering your price to attract a buyer......Its happening in some localised areas (above) already.
> 
> Probably will read about this in next 4 weeks in media.



Isn't it stretching things a little to call that Glasnevin? I would have thought you were into Finglas at that point...


----------



## Guest111

Calina said:


> You really have a simplistic way of looking at things don't you? I rent because what I want to buy is not available in the location where I rent. When that changes I will buy. I think you'll find most people who have severe doubts about the property market have doubts about its sustainability at current levels. When those levels correct (if - just in case you're going to be pedantic) you will find that they will reconsider the situation.
> 
> As for renting in the long term, in this country it is not an option at all, because the legislation, while much improved lately, still compares rather badly to other, more civilised nations where I have also rented such as France, Germany and Belgium.
> 
> The reason speculation became so rampant here is because many speculators behave as though they have few if any obligations. Not being allowed to end Part VI tenancies for reason of sale would have slowed things up quite a bit.


 
I don't actually


----------



## whathome

partisan said:


> Taking decisive action to get involved, involves taking risks


 
Once again - you don't have to take risks to get "involved".

Property is a disaster zone but there *are *other investments that are far less risky providing a better return.


----------



## topman

"How can they justify their wage expectations when I can hire a senior programmer in India for $25 a day?" was one of his comments.



I'm not sure this is true. ... Salary's for programmers in India are near to what are obtainable here...


----------



## phoenix_n

Calina said:


> Isn't it stretching things a little to call that Glasnevin? I would have thought you were into Finglas at that point...


 
Its the address on myhome and was how they were advertisd. But of course its finglas. Its why buyers are going to get burned. In a weakening market you look at the weak parts first which show the first strains of the bubble bursting.

I am pointing out something here what you will read in the papers in... ,about, a month.


----------



## room305

topman said:


> I'm not sure this is true. ... Salary's for programmers in India are near to what are obtainable here...



I very much doubt this figure is wrong. There were several other people there including the head of the Irish branch of the IGDA. Nobody disagreed with his statement.


----------



## topman

What was the drop in 2001


----------



## whathome

topman said:


> "How can they justify their wage expectations when I can hire a senior programmer in India for $25 a day?" was one of his comments.
> 
> 
> 
> I'm not sure this is true. ... Salary's for programmers in India are near to what are obtainable here...


 
Programmers in India are betwen $15 and $20 / hour. That's on contract - full time they're even cheaper.
I didn't know they could be hired for $25/day though.


----------



## Firefly

whathome said:


> Exactly. Also, with equity investments if you allow a sufficient margin of safety between the price you pay and the intrinsic value of the business then risk is minimal. Essentially you are paying €1 for €1.50 of value.


 

Intrinsic Value valuations...that's very Warren Buffet of you!

Firefly.


----------



## whathome

Firefly said:


> Intrinsic Value valuations...that's very Warren Buffet of you!
> 
> Firefly.


 
I studied Buffett and Peter Lynch in 1995 and never looked back


----------



## Guest111

whathome said:


> Once again - you don't have to take risks to get "involved".
> 
> Property is a disaster zone but there *are *other investments that are far less risky providing a better return.


 
What you're actually saying is people have made the most spectacular gains on property in the last decade, but we in bearsaskaboutmoney.com think that those days are gone.
Care to name some of these "far less risky investments providing a better return"?


----------



## whathome

Andy Doof said:


> Care to name some of these "far less risky investments providing a better return"?


 
AAM does not allow explicit discussion of individual shares.
Posting guideline 11 :


----------



## room305

whathome said:


> Programmers in India are betwen $15 and $20 / hour. That's on contract - full time they're even cheaper.
> I didn't know they could be hired for $25/day though.



Maybe he was exaggerating for effect - although several people mentioned a price war having broken out between Eastern Europe, Ukraine and India which has led to huge price reductions of contracts.

Typical programmer salary in India is about $8k-$10k pa, far below what is on offer here. We cannot compete with India on price but there seemed to be a concern that we had dropped behind on quality too.


----------



## Calina

room305 said:


> I very much doubt this figure is wrong. There were several other people there including the head of the Irish branch of the IGDA. Nobody disagreed with his statement.



This is off topic but a look at Monster India suggests that the figure is stretching it a little. I'm looking at senior programming positions for the equivalent of 40K sterling which is a bit more than 25 dollars a day. 

Basic programming jobs are around 11K - 12K sterling, which is, admittedly less than here. On the other hand, salaries can be justified on the high cost of living here. I find that people who have loads of money tend to forget that living on 20K if you don't live at home can be tough enough in this country. 

That being said, as a former migrant who's lived in a bundle of countries I would always advise someone to rent for the first year anyway.


----------



## Guest111

whathome said:


> AAM does not allow explicit discussion of individual shares.
> Posting guideline 11 :


 
Eh, I didn't mean let's all buy X...rather something like you're better off with forestry or gold!


----------



## murray

Andy Doof said:


> My experience is those predicting a crash don't seem to provide any evidence.
> If they do, you can't disagree. If you say why you believe there'll be a soft landing you get shot to pieces.
> It's all speculation...and if all you bears really truly believed you'd be selling all your houses and renting right now


 

I have sold my PPR to rent. There is plenty of examples here on why the crash/slowdown is coming - but some bears have families etc. - therefore not as easy to be as spontanious. I have secured what I consider to be v.strong money , happy to rent for a year or 2 (& save !)- then reassess. 
May buy in Ireland when the dust settles - may emmigrate.... 

Your argument seems very agressive/ill thought out at times.... however , if I sell up and you hold out , one of us will have bragging rights sooner or later !

Best of luck anyway !


----------



## whathome

Andy Doof said:


> Eh, I didn't mean let's all buy X...rather something like you're better off with forestry or gold!


 
ok then - you're better off with carefully selected equities IMO.

...and maybe forestry or gold but I don't know much about either.


----------



## room305

Calina said:


> This is off topic but a look at Monster India suggests that the figure is stretching it a little. I'm looking at senior programming positions for the equivalent of 40K sterling which is a bit more than 25 dollars a day.



As I said, they may have been exaggerating slightly for effect. They had no problem paying high wages to Irish workers but were upset that they still couldn't find graduates and senior programmers of sufficient quality even when offering very competitive salaries. They still had to recruit from abroad and this seems to be pretty common with many IT companies - recruit the cream from abroad who are attracted by the high wages on offer here.

This is very tough for Irish programmers to compete with - they need to either drop their salary expectations (tough when the salaries on offer relative to other Irish workers are pretty low) or increase their skills.

As an outlook for our knowledge economy their comments had a decidedly gloomy feel.


----------



## whathome

All quiet - Andy must be at lunch


----------



## Fredser

whathome said:


> All quiet - Andy must be at lunch



I'm sure he'll be back soon ..... with a few drinkies on board


----------



## murray

Fredser said:


> I'm sure he'll be back soon ..... with a few drinkies on board


 
LMOA !!


----------



## Remix

Bank of Ireland still says "no" to interest rate hikes in 2007.

Ireland

President of German Bundesbank says higher interest rates may be needed in 2007.

Germany 



I wonder who will prevail


----------



## Guest111

murray said:


> I have sold my PPR to rent. There is plenty of examples here on why the crash/slowdown is coming - but some bears have families etc. - therefore not as easy to be as spontanious. I have secured what I consider to be v.strong money , happy to rent for a year or 2 (& save !)- then reassess.
> May buy in Ireland when the dust settles - may emmigrate....
> 
> Your argument seems very agressive/ill thought out at times.... however , if I sell up and you hold out , one of us will have bragging rights sooner or later !
> 
> Best of luck anyway !


 
A brave move...we'll just have to see!
Just a quick sambo today...no liquid lunch!
Leave that for 4 bells


----------



## JayDub

Andy Doof said:


> Morning!
> Interesting that NCB predict our population will grow by 30% to 5.3 million by 2020...should keep demand stoked up


Predictions are not worth the paper they are written on. How many predictions from the 1990's were correct in regards to employment and house price growth in Ireland. Anyway countries such as Germany, France and Italy will have to open their employment markets to the eastern european accession countries in a couple of years time. How many Polish living here would jump at the chance to work in Germany, the same applies to the Czechs and basically all other eastern european non-nationals.


----------



## JayDub

whizzbang said:


> I'm afraid I can't see any of these! Can anyone else? I just get a 403 error.


You need to refresh the page.


----------



## Savvy

JayDub said:


> Predictions are not worth the paper they are written on. How many predictions from the 1990's were correct in regards to employment and house price growth in Ireland. Anyway countries such as Germany, France and Italy will have to open their employment markets to the eastern european accession countries in a couple of years time. How many Polish living here would jump at the chance to work in Germany, the same applies to the Czechs and basically all other eastern european non-nationals.



Although Germany,for example, will probably hold off for as long as possible but in 2011 they will have to allow total freedom of movement of labour and you've got to imagine that the Poles would much prefer to work there and go home all/most weekends than come to Ireland.


----------



## JayDub

Calina said:


> Isn't it stretching things a little to call that Glasnevin? I would have thought you were into Finglas at that point...


Estate agents are famous for this, I've seen a couple more examples this week,

*Council may sue to block developers' name-change*
http://www.unison.ie/stories.php3?ca=9&si=1712871&issue_id=14812
"Instead of trying to sell new homes in little-known Wyckham in south Dublin, auctioneers have decided to rename the area and call it Dundrum Point instead."

*Mountseskin Court,* Blessington Road, Tallaght
[broken link removed]=
You can drive up and download the Blessington road until you are blue in the face and you still won't find this development. Why, because it is built in Killinarden, built between the Killinarden Inn and the Killinarden Church.


----------



## roland

room 305: "Whathome's point about risk is being misconstrued. If you bought ten years ago the income derived from the capital outlay compensated for the risk involved. Even with no capital appreciation in the property you making money - yields were about 10%. You could buy and make your money back in ten years, irrespective of the sale price. As such, whathome viewed it as a low-risk investment."

I don't agree with this.  Income is only one part of the overall equation.  Surely there could have been negative capital appreciation.  Also, you would have had to fund the purchase paying the interest rate at that time (10%?).  You can't focus solely on one undefined proportion of the overall return and say that is compensating you for the risk involved.  It's only the overall net return that matters??  Sure 10 years ago, the rate you would got from a bank account (i.e. no, or nearly no, risk) was also a lot higher.  So, the compensation for risk has to be judged in relation to that?   I'm sure there are plenty equities today yielding 10% so the argument that you can make your money back in 10 years from those should also apply - I suspect however you wouldn't touch those equities with a bargepole.  The income on those equities does not go towards mitigating the overall risk.

I take the point that well researched companies can be a safer bet, but it's still a long long way from minimum or no risk.


----------



## Borderlord

I'm beginning to believe that the rate of posts coming from Andy Doof which are fast and furious are coming from a very idle EA office where by the employees following this thread and are e-mailing the guy who is doing the copying / pasting and submitting.. Lads this will not pay the wages, get out there and sell, sell, sell... I tell you... ha ha


----------



## JayDub

I was getting ready to leave for an auction, just to get a feel for the sentiment here in Mullingar, low and behold the auction has just been cancelled. Most likely due to lack of interest.

http://www.daft.ie/searchsale.daft?id=136845&search=1


----------



## whathome

roland said:


> I'm sure there are plenty equities today yielding 10% so the argument that you can make your money back in 10 years from those should also apply - I suspect however you wouldn't touch those equities with a bargepole. The income on those equities does not go towards mitigating the overall risk.


 
I value property investments on yield. 

For equity investments however I use a number of parameters to provide a safe margin so that risk is minimal. In my experience, these investments have also provided the best gain not just through income but capital appreciation. It's very basic but works very well. Low risk and a great return.
I have never used leverage on equities, I don't do options and never short anything.

The whole high risk = high return thing is rubbish.


----------



## shanegl

Surely its high risk = high volatility = high potential gain/loss?


----------



## whathome

shanegl said:


> Surely its high risk = high volatility = high potential gain/loss?


 
Not necessarily, Irish property at the moment is very high risk but not very volatile. Just means it takes longer to loose your capital while providing some opportunity to escape on the way down.  Too risky for me anyway.


----------



## daveirl

Sarsfield said:


> So where *are* these 275,000 empty houses? I believe this has a very significant influence on whether the whole market takes a dive or whether it's the ill advised investor who's going to take the big hit.


Well in my estate there are two empty houses that have never been occupied. Then there are the 4 that people are trying to sell, one of which has been sitting at Sale Agreed for 6 months. I've no trouble believing there are 275,000 empty homes many of which are in high demand areas. For the record I live in Donnybrook in Cork, and a house in my area goes for 385k. So it's not like these are empty homes in the back of Leitrim or anything.


----------



## shanegl

whathome said:


> Not necessarily, Irish property at the moment is very high risk but not very volatile. Just means it takes longer to loose your capital while providing some opportunity to escape on the way down. Too risky for me anyway.


 
True, in a bubble when price decouples from fundamentals you have very high risk.

But in a rational market (liquid too I suppose) I would always associate volatility with risk, although this is probably simplistic.


----------



## room305

roland said:


> I don't agree with this.  Income is only one part of the overall equation.  Surely there could have been negative capital appreciation.  Also, you would have had to fund the purchase paying the interest rate at that time (10%?).  You can't focus solely on one undefined proportion of the overall return and say that is compensating you for the risk involved.  It's only the overall net return that matters??  Sure 10 years ago, the rate you would got from a bank account (i.e. no, or nearly no, risk) was also a lot higher.  So, the compensation for risk has to be judged in relation to that?   I'm sure there are plenty equities today yielding 10% so the argument that you can make your money back in 10 years from those should also apply - I suspect however you wouldn't touch those equities with a bargepole.  The income on those equities does not go towards mitigating the overall risk.



Obviously the cost of money is a factor as well, my point is that when it comes to investing in property now, the risk to your capital is as great (if not greater) but the yield (to compensate for the risk) is no pitiful. Essentially the market is pricing the risk as being extremely low, hence the pitiful return. I believe this is extremely wrong and just shows how markets can be driven by sentiment rather than fundamentals.

As for equities, you can protect your capital through the use of a stop loss order and can avoid timing the market through dollar cost averaging. You also don't need to leverage to invest. None of which are available for property.

It is dangerous (for your capital) to assume that just because something is high risk, that it has a correspondingly high return. Otherwise investing in lottery tickets would be a good idea.


----------



## topman

whathome said:


> True - it's not nice to speak about chimps like that


 
Ya and whats wrong with busking..


----------



## Guest111

whathome said:


> True - it's not nice to speak about chimps like that


 
LOL...now that's funny!

Seriously, I have respect for qualified auctioneers but not for the spoofer in the 98 Golf and the cheap suit who shows up at a viewing and tells you they've had bids already...then a half hour later tells you the owner is keen on a quick deal and if you put in an offer he'll take it!


----------



## whathome

What's the difference between a chimp and an estate agent?

One sits around scratching it's privates making screeching noises while picking fleas from it's buddies.  The other is a monkey


----------



## Guest111

whathome said:


> What's the difference between a chimp and an estate agent?
> 
> One sits around scratching it's privates making screeching noises while picking fleas from it's buddies. The other is a monkey


 
Awesome!


----------



## Firefly

Andy Doof said:


> Awesome!


 
Andy, you happen to be a disgruntled employee by any chance?


----------



## Guest111

Firefly said:


> Andy, you happen to be a disgruntled employee by any chance?


 
What makes you say that?
As it happens I am a neither gruntled nor disgruntled employer


----------



## whizzbang

One for Andy and the Bulls...

What would it take for a 50% decrease in house prices in Ireland? Recession? Invasion by a foreign power? The election of an anti immigration platform? Use your immaginations!


----------



## Calina

ajapale is going to start giving out soon if we don't get back on topic. 

Realistically, I think that things are in general plateau-ing at the moment. This is based on watching the market in Swords where inventory has risen quite a bit in the past couple of months but prices haven't dropped significantly. So my interpretation of that is that perhaps the expectation of continued capital appreciation is pretty much gone for the moment but the flipside of increased inventory - ie competing for fewer buyers - hasn't broken through just yet on a general scale.


----------



## Firefly

Andy Doof said:


> What makes you say that?
> As it happens I am a neither gruntled nor disgruntled employer


 
LOL....a "gruntled" employee doesn't sound too happy either do they??


----------



## topman

getting slightly off the topic....


----------



## partisan

whathome said:


> The whole high risk = high return thing is rubbish.



Agreed, but given a choice of investments the return on a high risk investment must be greater for you to choose it over a low risk one. Therefore if a low risk / high return opportunity exists investors will pile in - driving up the price until it becomes low risk / low return.


----------



## Arthur Daley

Calina said:


> Realistically, I think that things are in general plateau-ing at the moment. This is based on watching the market in Swords where inventory has risen quite a bit in the past couple of months but prices haven't dropped significantly. So my interpretation of that is that perhaps the expectation of continued capital appreciation is pretty much gone for the moment but the flipside of increased inventory - ie competing for fewer buyers - hasn't broken through just yet on a general scale.


 
I'm following that market too and I see this also. In fact in my estate asking prices for the new supply on the market this week seem to be slightly creeping up in the aftermath of the metro announcement. As to whether they'll achieve asking price I've no idea.


----------



## whathome

partisan said:


> Therefore if a low risk / high return opportunity exists investors will pile in - driving up the price until it becomes low risk / low return.


 
That's not true - you're relying in theory on an efficient market. Markets are certainly not efficient which creates opportunities where assets are undervalued and sometimes grossly overvalued. Eventually the market price for an asset will correct, the key thing is to know what you're at so you are not the fool who pays too much.


----------



## Calina

Arthur Daley said:


> I'm following that market too and I see this also. In fact in my estate asking prices for the new supply on the market this week seem to be slightly creeping up in the aftermath of the metro announcement. As to whether they'll achieve asking price I've no idea.



With particular regard to Boroimhe, I saw a 2 bed apartment arrive on the listings yesterday or the day before (there's about six or seven similar on sale in the estate at the moment I think) showing the first rise in asking price that I had seen for a while. I was tempted to ring up and ask why, when there were several similar properties on sale in the 330-335K bracket, this one might be worth 340K. I haven't been watching the three beds so much but I think they are at around the levels they were touching in April. I think the Metro had long been priced in so I have some doubts that the recent announcement will change much. Interestingly I also noticed that some of those apartments in Glasnevin/Finglas are now less expensive than similar-ish in Swords. Given a choice between city and Swords I would normally choose city, although not being totally au fait with Finglas I'd have a good look at the area first.


----------



## Arthur Daley

whizzbang said:


> What would it take for a 50% decrease in house prices in Ireland? Recession? Invasion by a foreign power? The election of an anti immigration platform? Use your immaginations!


 
A drop in prices more than 20% will be mean a domino is set in motion and the whole thing comes tumbling down. Let's be honest with ourselves this has been on the cards for years here now.

If lenders can't expand credit any further with another wheeze like 100% LTV, 40 year terms etc., and the VI's aren't organised and co-ordinated in shutting down new build and land supply quick enough the 10% falls will rapidly turn into 50%.


----------



## Guest111

whizzbang said:


> One for Andy and the Bulls...
> 
> What would it take for a 50% decrease in house prices in Ireland? Recession? Invasion by a foreign power? The election of an anti immigration platform? Use your immaginations!


 
50%? This post will be deleted if not edited immediately...interest rates at 1980's levels so mortgages were unaffordable for almost everyone. It would have to be some recession to bring about that type of collapse.


----------



## Arthur Daley

Calina said:


> Given a choice between city and Swords I would normally choose city, although not being totally au fait with Finglas I'd have a good look at the area first.


 
You always get some kickback from these announcements/developments. I was surprised how much prices went up along the line once Luas was operational. You imagine it's priced in but then....

I know Whathome pointed out a price drop the far side of Swords to me. Could never consider moving from Boroimhe to the wild west in Finglas.......


----------



## fatmanknows

Heard the cheques of a major irish builder ( with developements here and abroad) are being returned........wonder who it is ?


----------



## whizzbang

Andy Doof said:


> 50%? This post will be deleted if not edited immediately...interest rates at 1980's levels so mortgages were unaffordable for almost everyone. It would have to be some recession to bring about that type of collapse.



Would mortages have to be unaffordable for almost everyone?would,say, 20% of people not being able to afford their mortgage not be enough to set the ball rolling? 20% of properties going on the market in a short amount of time and not selling  could lead to a major turn in sentiment that could effect all areas of the market?


----------



## conor_mc

Don't think these articles from the Indo have been pointed out yet today.... talk about sensational scare-mongering!!! Seriously, what would a supposedly neutral newspaper carry this sort of stuff unless it had an agenda.... I mean, the first article is an essay not a news piece, and the second has supposedly been written by a very learned young man who seems to hang out with economists on a daily basis and thinks he can bend the ear of the Minister for Finance!! "Now is the time Minister Cowan" indeed!

*Sometimes a decision isn't enough*

http://www.unison.ie/irish_independent/stories.php3?ca=303&si=1712767&issue_id=14812

*Property - our trendy obsession*

http://www.unison.ie/irish_independent/stories.php3?ca=303&si=1712787&issue_id=14812http://www.unison.ie/irish_independent/stories.php3?ca=303&si=1712767&issue_id=14812


----------



## whizzbang

fatmanknows said:


> Heard the cheques of a major irish builder ( with developements here and abroad) are being returned........wonder who it is ?



cheques or Czechs? 

(sorry, couldn't resist)


----------



## Guest111

I saw that article by the 16 year old kid earlier...truly bizarre! Get a life sunshine.
On the interest rate side of things, would I be right in thinking "stress testing" was only really brought in say 2 years ago?
There must be a hell of a lot of people who were lent money recklessly bty the banks who are struggling now.
Incidently, got an NIB pack today...LTV happy days!


----------



## Duplex

fatmanknows said:


> Heard the cheques of a major irish builder ( with developements here and abroad) are being returned........wonder who it is ?


 

Surely not Mr M


----------



## Calina

Andy Doof said:


> 50%? This post will be deleted if not edited immediately...interest rates at 1980's levels so mortgages were unaffordable for almost everyone. It would have to be some recession to bring about that type of collapse.



Our private sector debt is the highest per person in Europe. It will be one hell of a recession if and when it happens, even at current interest rates. I'd sooner have higher interest rates and a smaller principle than vice versa.


----------



## Duplex

conor_mc said:


> Don't think these articles from the Indo have been pointed out yet today.... talk about sensational scare-mongering!!! Seriously, what would a supposedly neutral newspaper carry this sort of stuff unless it had an agenda.... I mean, the first article is an essay not a news piece, and the second has supposedly been written by a very learned young man who seems to hang out with economists on a daily basis and thinks he can bend the ear of the Minister for Finance!! "Now is the time Minister Cowan" indeed!
> 
> *Sometimes a decision isn't enough*
> 
> http://www.unison.ie/irish_independent/stories.php3?ca=303&si=1712767&issue_id=14812
> 
> *Property - our trendy obsession*
> 
> http://www.unison.ie/irish_independent/stories.php3?ca=303&si=1712787&issue_id=14812http://www.unison.ie/irish_independent/stories.php3?ca=303&si=1712787&issue_id=14812http://www.unison.ie/irish_independent/stories.php3?ca=303&si=1712787&issue_id=14812


 



> Ross McParland of Sherry Fitzgerald, presented an article in 2003 (pictured, below). In it he guesstimated what it might be like in the future for the next generation of home buyers.
> 
> Mr McParland predicted that when his son (Pictured in the publicity poster below) turns 28 an apartment that cost around €330,000 in 2003 will cost about €7.5m in 2031. Having spoken to several economists on this issue my own guess is that the same apartment will cost about €3m when I finally get around to looking for a home of my own ten years from now.


 
Dell and Microsoft must have deep pockets if they are going to pay little Johnny here enough money to pay €3,000,000 for a flat.  Maybe its an entitlement thing.


----------



## blindjustice

Ps whats wrong with a witch-hunt after all this? You can say about the people who bought - that its their own fault - but the wider economy will suffer.


----------



## Guest111

Duplex said:


> Surely not Mr M


 
It's probably related to the investigation by the Companies Office into said builder(s)


----------



## discstu

http://news.bbc.co.uk/2/hi/business/6091576.stm

Just saw this on the BBC website


----------



## Remix

conor_mc said:


> and the second has supposedly been written by a very learned young man who seems to hang out with economists on a daily basis and thinks he can bend the ear of the Minister for Finance!! "Now is the time Minister Cowan" indeed!
> 
> *Property - our trendy obsession*
> 
> http://www.unison.ie/irish_independent/stories.php3?ca=303&si=1712787&issue_id=14812


 
The name of that 16 year old is Morgan Cashin.

Morgan Cashin is an anagram for 'A Charming Son'.

Well after that piece he certainly is, especially if the parents have property interests that need hyping


----------



## Guest111

I love the lad Morgan's "as a child of the Celtic Tiger I've no idea what life was like before house prices zoomed into the stratosphere...the concept of buying a house for under E100,000 belongs in the black and white days".
Why don't you ask someone then?

It's unintentional comedy at its best...like the Joe Duffy Show


----------



## Calina

Andy Doof said:


> I love the lad Morgan's "as a child of the Celtic Tiger I've no idea what life was like before house prices zoomed into the stratosphere...the concept of buying a house for under E100,000 belongs in the black and white days".
> Why don't you ask someone then?
> 
> It's unintentional comedy at its best...like the Joe Duffy Show



He needs to go down to Moyross in Limerick. There are still sub 100K houses there on occasion.


----------



## Guest111

Calina said:


> He needs to go down to Moyross in Limerick. There are still sub 100K houses there on occasion.


 
Lol...very good.

I wonder who the economists he spoke to were?

Moore McDowell? Brendan Walsh?

Or the unqualified charlatan from Cork Eddie the Impersonator.

My money is on the latter "economist"


----------



## room305

conor_mc said:


> *Property - our trendy obsession*
> 
> http://www.unison.ie/irish_independent/stories.php3?ca=303&si=1712787&issue_id=14812



Whatever about a sixteen year old kid having some bizarre ideas but that Ross McParland from Sherry Fitz must be hitting the sauce heavily. A €330k apartment inflating to €7.5M in 28 years! You'd have a mortgage repayment of nearly €45k a month over 25 years (at 5% apr). The average industrial wage would need to be in the region of €1.5M a year to be within historical norms for house prices.

Mr McParland's crazy calculations assume a compounded annual growth rate of 11.8% over nearly three decades after a decade of double digit per year growth. Gotta admire the optimism.


----------



## whizzbang

Calina said:


> He needs to go down to Moyross in Limerick. There are still sub 100K houses there on occasion.



there's one there right now! [broken link removed]


----------



## Duplex

room305 said:


> Whatever about a sixteen year old kid having some bizarre ideas but that Ross McParland from Sherry Fitz must be hitting the sauce heavily. A €330k apartment inflating to €7.5M in 28 years! You'd have a mortgage repayment of nearly €45k a month over 25 years (at 5% apr). The average industrial wage would need to be in the region of €1.5M a year to be within historical norms for house prices.
> 
> Mr McParland's crazy calculations assume a compounded annual growth rate of 11.8% over nearly three decades after a decade of double digit per year growth. Gotta admire the optimism.


 

No admiration from me. Even Andy Doof would laugh at that kind of flaky forecast.  We would need a prolonged bout of hyper inflation of Wiemar Republic magnitude to get to McParlands figures.  Shows you how barking the Irish market is.


----------



## Firefly

room305 said:


> Whatever about a sixteen year old kid having some bizarre ideas but that Ross McParland from Sherry Fitz must be hitting the sauce heavily. A €330k apartment inflating to €7.5M in 28 years! You'd have a mortgage repayment of nearly €45k a month over 25 years (at 5% apr). The average industrial wage would need to be in the region of €1.5M a year to be within historical norms for house prices.
> 
> Mr McParland's crazy calculations assume a compounded annual growth rate of 11.8% over nearly three decades after a decade of double digit per year growth. Gotta admire the optimism.


 

You mean they won't keep rising by 11.8% per year??? Does the general public know this??? Jaysus....think I'll sell up before anyone figures this out...thanks for the timely advice, I owe you one


----------



## room305

Firefly said:


> ...thanks for the timely advice, I owe you one



The bears get slated everytime we dismiss figures from Sherry Fitz and other VIs. This shows how crazy they are. Ross McParland was apparently both serious and sober when he wrote this lunacy.


----------



## bearishbull

SherryTrifle said:


> http://www.unison.ie/irish_independent/stories.php3?ca=9&si=1712814&issue_id=14812
> 
> FF overturning land rezoning?? !!! surely a joke or an attempt to reduce supply! I love the quote from dick roche about why he overturned the rezoning,
> 
> _It would have created a new generation of long-distance commuters consigned to a desperately poor quality of life, the minister told the Irish Independent yesterday._
> 
> And the predicted upswing in rents is occuring in america, its just starting to occur here .
> http://www.breitbart.com/news/2006/10/26/D8L0FA5G0.html


 

Maybe the zoning was'nt right down in Laois but I have a feeling that some people (maybe FF supporters and land owners near Portlaoise and other towns with the infrastructure he is talking about) will benefit from this Minister's descision. He was just on radio there saying other counties may see similar descisions. This could be just the start of the defensive action from the FF/Property developer/Land owner cabal.


----------



## Guest111

Duplex said:


> No admiration from me. Even Andy Doof would laugh at that kind of flaky forecast. We would need a prolonged bout of hyper inflation of Wiemar Republic magnitude to get to McParlands figures. Shows you how barking the Irish market is.


 
To be fair I believe in the soft landing...stagnation and low single digit growth. A little bull if you like!

I never saw this ad...it is truly shocking, frightening and appalling.
Worst thing is, some people would believe it and act on it.


----------



## MadPad

conor_mc said:


> ......... thinks he can bend the ear of the Minister for Finance!! "Now is the time Minister Cowan" indeed!
> 
> ............
> *Property - our trendy obsession*
> 
> http://www.unison.ie/irish_independent/stories.php3?ca=303&si=1712787&issue_id=14812


 
Incredible, 16 years old, dropping hints to the government on how to increase affordability to FTB's, to slash VAT on building materials, invest in affordable houses etc, on speaking terms with several economists...We should just give him the job of running the finances at the next election.... by then he'll probably be 17 and even wiser

Think we'll start to see more of these ...



Andy Doof said:


> ..... Pension legislation is being further liberalised...





MadPad said:


> ..........there will be pressure to increase mortgage tax relief, abolish VAT on building materials, abolish stamp duty, abolish PRSI for construction workers, buy unsold or half completed houses as public housing .........





Howitzer said:


> .....
> http://www.askaboutmoney.com/showthread.php?t=36615


----------



## thewatcher

bearishbull said:


> Maybe the zoning was'nt right down in Laois but I have a feeling that some people (maybe FF supporters and land owners near Portlaoise and other towns with the infrastructure he is talking about) will benefit from this Minister's descision. He was just on radio there saying other counties may see similar descisions. This could be just the start of the defensive action from the FF/Property developer/Land owner cabal.


 
It just shows that after all the tribunals,investigations etc etc. the planning process is still wide open to corruption by a dodgy minister if there was ever such a thing again !


----------



## Guest109

unbelievable Calina 2 bedroom terrace ,  asking 55k, no matter where it is, though must be a real dodgy area


----------



## MugsGame

Can posters please avoid one line meaningless answers and unnecessary swearing. Such posts will be deleted as they contribute nothing to the debate.

Posters who require too much moderation will be banned.

Update: leave the moderation to the moderators. If someone breaks the posting guidelines, it doesn't mean you have to respond in kind. Particularly problematic posts should be reported rather than responded to.


----------



## AJ1

Heard the guy on tv3 last night during the break in Emmerdale say 'if your depressed with the irish property market tune into out overseas property show at ...'. Sentiment has definitely changed!


----------



## whizzbang

AJ1 said:


> Heard the guy on tv3 last night during the break in Emmerdale say 'if your depressed with the irish property market tune into out overseas property show at ...'. Sentiment has definitely changed!



there was a Rabo direct radio ad along those lines as well.. "Missed the boat on the property bubble, didn't get an SSIA, don't talk to me about investments.." or something similar.


----------



## JayDub

whizzbang said:


> there's one there right now! [broken link removed]


 
I was thinking of taking the kids to Moyross on Halloween, that should scare the bejaysus out of them LOL


----------



## zac

whathome said:


> Why do you think it was luck?
> 
> Buying undervalued revenue creating assets, whether they are equities or property ensures that risk is minimised while potential gain is maximised. I just don't get the "you have to take a risk to make a good return" thing.
> 
> Property markets are cyclical. Right now the Irish property market provides maximum risk for minimum reward (if any) - not a good buy! And it's not about timing the market, it's about analysing your potential investment on a fundamental basis.



because you said that you dint take risk, that implies you risk was zero, maybe i dint get what you were saying.

"Minimising risk" and "No risk" are not the same thing.


----------



## zac

roland said:


> whathome: "Why do you think it was luck? Buying undervalued revenue creating assets, whether they are equities or property ensures that risk is minimised while potential gain is maximised. I just don't get the "you have to take a risk to make a good return" thing. "
> 
> Hmmm....talk about 20/20 hindsight.  'Undervalued revenue creating assets' in the form of equities or property have risks attaching no matter what they are.  Sure, some might be a 'safer bet' than others, but you were still at the mercy of many factors outside of your control (market forces, economic shocks, fraud, incompetence etc.).  You may have done well but I wouldn't fool yourself or us that you were not taking risks.



yes, valuation is relative. when an asset was aquired, buyer thought it was undervalued, seller thought it was overvalued, (provided they were value investors). not recognising risk and being profitable is luck in my opinion.


----------



## treora

daveirl said:


> Well in my estate there are two empty houses that have never been occupied. Then there are the 4 that people are trying to sell, one of which has been sitting at Sale Agreed for 6 months. I've no trouble believing there are 275,000 empty homes many of which are in high demand areas. For the record I live in Donnybrook in Cork, and a house in my area goes for 385k. So it's not like these are empty homes in the back of Leitrim or anything.


 
In my estate* there are 56 houses(semi and terrace), 8 up for sale, 5 unoccupied and a 50:50 split on renters in the rest of them. The longest one has been on sale for 5 months, the shortest for 1 week and nothing has sold in that period. The average AMV on myhome for them is €500,000.
*between Pheonix Park and Smithfield

Separately
What do those investors who have managed to sell up do with their money and how will it effect the property market? Are you, investing in local business and thus supporting wage rises, sticking it in the bank, shares, agri-land banks in Ireland, property abroad, in the matress or supporting an Irish Junta to tick Cowan into submission ?


----------



## zac

partisan said:


> Risk - reward
> Junk bonds are riskier than Government bonds from developed countries. As such they tend pay a higher rate of interest. That is, you take on the risk, you make more money if it works out.
> Starting a business is riskier than working fulltime, but you'll potentially earn a _lot_ more. Running an internet startup is a lot riskier than a corner store. YouTube sold to Google for 1.6 billion...
> 
> The entire insurance industry is based on this principle ;-)
> 
> Let me clarify that I agree that property is overvalued in Ireland right now, and is not a good investment. However, if you were a bear over the last 10 years you would have missed out on the biggest property bull run in the states history! Not a recipe for creating "untold" wealth. It's easy to sit and do nothing. Taking decisive action to get involved, involves taking risks. Some of the bears on here have suggested that they will try and make money in what they are calling as a bear market - but most will sit it out (again!) I suspect!



In response to my poll on this thread where I asked bears to come forward and tell whether they have sold a property and now renting or have reduced their property holdings this year, there were 7 people who did so on this forum. That is 7 out of whatever number view this thread(excluding those who dint respond and couple of those who took offense and said they dont want to prove their credentials ).


----------



## Open_Window

whizzbang said:


> there's one there right now! [broken link removed]



Hang on a sec, this limerick phenomenon has to be than a MoyRoss "effect".

What is so radically different their that they are at complete odds with the rest of Ireland.

Any more link to very deflated Limerik prices anyone?

Reason, demogrpahically why, economically why, politically why and so on.... I am not familiar with that region but how could an area in Ireland be so out of wack. I know that previous link was to a former council house, but those too in Dublin have enjoyed massive rise is prices.

Someone said it before here, and I'll say it again Limierick look  like a warning as to where the market can go, were Ireland could be again, so we need to know how it has happned there becuase it should indicate were it is most likely to appear again or ways to avoid it.


----------



## whathome

zac said:


> not recognising risk and being profitable is luck in my opinion.


 
absolutely agree on this, if you're profitable without realising that you were taking risks - then you could be benefiting from luck.  
That's why I don't take risks - would hate to rely on luck!

best of luck to you zac


----------



## zac

Quote:
 	 	 		 			 				 					Originally Posted by *soma* http://www.askaboutmoney.com/showthread.php?p=305988#post305988 
_From memory, whathome bought again because he is utterly whipped by Mrs whathome _

  whathome:
Exactly 

another reason for not to expect mass exodus from the market, plenty of whips around.


----------



## zac

whathome said:


> absolutely agree on this, if you're profitable without realising that you were taking risks - then you could be benefiting from luck.
> That's why I don't take risks - would hate to rely on luck!
> 
> best of luck to you zac



cheers but I believe luck is a nice thing to have even if you recognise your risk.


----------



## whathome

zac said:


> another reason for not to expect mass exodus from the market, plenty of whips around.


 
Well we sold two and bought one - couldn't get approval on nohome for the whathomes.



zac said:


> cheers but I believe luck is a nice thing to have even if you recognise your risk.


 
Unfortunately I've never been lucky - apart from meeting Mrs WH 

So .... anyone househunting this weekend?


----------



## gearoidmm

Open_Window said:


> Hang on a sec, this limerick phenomenon has to be than a MoyRoss "effect".
> 
> What is so radically different their that they are at complete odds with the rest of Ireland.
> 
> Any more link to very deflated Limerik prices anyone?
> 
> Reason, demogrpahically why, economically why, politically why and so on.... I am not familiar with that region but how could an area in Ireland be so out of wack. I know that previous link was to a former council house, but those too in Dublin have enjoyed massive rise is prices.
> 
> Someone said it before here, and I'll say it again Limierick look  like a warning as to where the market can go, were Ireland could be again, so we need to know how it has happned there becuase it should indicate were it is most likely to appear again or ways to avoid it.



Moyross in Limerick is by no means a barometer for the market.  It is an economically disadvantaged area with a reputation for antisocial behaviour and harrassment of residents.  It was there that the kids had a petrol bomb thrown into their car earlier this year (apparently this was their idea of fun - throwing petrol bombs at each other - no joke).

There are very special circumstances there that do not apply in the rest of Limerick.


----------



## Marie

Calina said:


> The NCB report is equally based on a lot of assumptions. They assume that life expectancy will continue to rise, they assume that fertility will remain at current levels. Interestingly, after 2020 they expect immigration to fall to 0.
> 
> The problem, as I see it, is that the predictions, as such, will stand or fall on those assumptions. In other words, the report is in a nice pdf, but it is still speculation per se. I suppose that makes it no different to the property market in itself.
> 
> What interests me is the general short termist view of looking at things here. Property doesn't crash overnight. It might crash over seven or eight months, and the cracks might be visible for a long while. But what interests me is that initially, people who called time on untramelled growth were called to provide "proof" whereas people who don't believe that a correction is likely or possible don't have to provide any proof at all, or at least, don't have to provide the same level of proof. NCB's report is an indication of this. Many people have doubts about the property market because it has gone over and above average affordability. Not because they are playing guessing games with the economy and future population. What we have now is not a long term situation, and unfortunately, rising salaries will not buy us out of this situation without also buying us a lot of unemployment.
> 
> Ultimately, the property market comes down to brass tacks. Who has the money, and who hasn't. The banks are running out of options to give people more money to buy property. I'll be interested to see what they come up with to get over short term affordability problems since they've run out of 100% and interest only and 35 and 40 year terms as options. There isn't much left except very dangerous games in a rising interest rate environment.


 
Not quite!  In the UK newbuild apartments are advertised on the basis of "Pay£99 and move in!".  Free kitchens, free broadband access, all legal and estate agency fees waived etc etc...........you name it you have it as long as you sign up!  The developers can't give them away - nobody want's them!  Meanwhile the Chancellor of the Exchequer goes on air to announce the government's commitment to building more 'affordable' housing (translation - buy the unsold stocks off the developers and bail out the already-rich through the taxes of the already-poor who couldn't afford to buy the houses in the first place!!!)  There is a looooooooooong way to go in this game!


----------



## thewatcher

Open_Window said:


> Hang on a sec, this limerick phenomenon has to be than a MoyRoss "effect".
> 
> What is so radically different their that they are at complete odds with the rest of Ireland.
> 
> Any more link to very deflated Limerik prices anyone?
> 
> Reason, demogrpahically why, economically why, politically why and so on.... I am not familiar with that region but how could an area in Ireland be so out of wack. I know that previous link was to a former council house, but those too in Dublin have enjoyed massive rise is prices.
> 
> Someone said it before here, and I'll say it again Limierick look like a warning as to where the market can go, were Ireland could be again, so we need to know how it has happned there becuase it should indicate were it is most likely to appear again or ways to avoid it.


 
These aera's are a different animal altogether,"outsiders" cannot purchase in these area's because you will not be accepted unless you already know people living in the aera.Any outsiders foolish enough to buy,the first cross word you have with anyone in the estate,from that day on your cards are marked.The same applies in certain parts of west dublin also.
Prices are that low,because nobody will take the peoperty off you bar the locals.These properties are not a barometer of the market in general !.


----------



## bearishbull

thewatcher said:


> These aera's are a different animal altogether,"outsiders" cannot purchase in these area's because you will not be accepted unless you already know people living in the aera.Any outsiders foolish enough to buy,the first cross word you have with anyone in the estate,from that day on your cards are marked.The same applies in certain parts of west dublin also.
> Prices are that low,because nobody will take the peoperty off you bar the locals.These properties are not a barometer of the market in general !.


It would be an ok investment if you could get a local(single mother and child) on rent allowance paying 600euro a month into it.There is talk of governement doing regeneration in like of moyross. The cost of building such a house would exceed the price its on sale for. Limerick property does seem relatively cheap even outside these areas, where else in ireland would you get this property for 1million [broken link removed]=

It has been for sale for months too.


----------



## miju

one of the dublin "equivalents" to moyross would be finglas south where you can buy a 3 bedroom house for about €155k , nice price but you wouldn't really wanna live there (which is saying something seeing as from one of the new finglas estates   )


----------



## dochasach

gearoidmm said:


> Moyross in Limerick is by no means a barometer for the market.  It is an economically disadvantaged area with a reputation for antisocial behaviour and harrassment of residents.  It was there that the kids had a petrol bomb thrown into their car earlier this year (apparently this was their idea of fun - throwing petrol bombs at each other - no joke).
> 
> There are very special circumstances there that do not apply in the rest of Limerick.


 
Shouldn't there be a continuum where areas which are almost as far from jobs and almost as dodgy as Moyross might have values somewhere between 55,000 and 550,000?  There are dodgey Dublin neighborhoods where a house would go for 5-10 times the price.  Are you really 500-1000% less likely to be stabbed, shot or petrol bombed in Dublin?

My above average industrial wage purchasing power gives me these choices:

    A crime-ridden neighborhood near Dublin, where the jobs are... or
    A long commute in a country with one of the highest per/km traffic fatality rates in Europe.

This is yet another reason why I choose to rent and live.  "Owners" who choose to fork out more dead money in interest than I'll pay in 20 years of renting might say rent money is deader than interest money, but I'd rather pay dead money than be dead.


----------



## Cheeky Offer

Indo. today and Dan McLaughlin:

[FONT=Verdana, Arial]"However, the only thing analysts all agree on is that *rates will rise to 3.5pc* at the ECB's meeting on December 2. "*Our view is still that rates will peak at that level* - but the risks have moved to the upside given the strength of the global economy," said Dan McLaughlin, chief economist at Bank of Ireland."

Now, from the same article the international commentators say the following:

[/FONT][FONT=Verdana, Arial]"Ulrike Kastens, economist at Sal. Oppenheim in Cologne, Germany, said: "We expect an interest rate increase in December and two additional steps in the coming year.* By the end of 2007, the interest rate will probably be 4pc.*""

[/FONT][FONT=Verdana, Arial]""We expect the ECB to continue raising rates to *at least 4pc next year*," said Michael Taylor, analyst at Lombard Street Research in London. "Their concerns about sustained money and credit growth are likely to be more important than the impact of January's VAT hike on the German economy.""

So, what does Dan know the international commentators don't?

I am looking in Dublin at the minute and will be making offers at up to €100,000 below ask.  Confidence is gone.  No-one believes the spin anymore.  Game Over.
[/FONT]


----------



## Open_Window

madisona said:


> They got 10 calls in total after that half hour infomercial. not a great return. seems that the lack of interest is spreading to overseas property.



How do you know? 

Do you work there? Were you watching (live cALL IN??)


----------



## askalot

madisona said:


> They got 10 calls in total after that half hour infomercial. not a great return. seems that the lack of interest is spreading to overseas property.



Not bad really based on the viewing figures for TV3


----------



## Remix

Cheeky Offer said:


> [FONT=Verdana, Arial]So, what does Dan know the international commentators don't?[/FONT]


Might be looking at a situation here where the captain of a doomed vessel - sailing towards sh*t creek no doubt - attempts to falsely reassure the passengers.


----------



## whathome

Raising lending multiples in the UK - look who it is....an Irish Bank:

http://money.guardian.co.uk/property/mortgages/story/0,,1933587,00.html



> Some may argue that this is yet another example of irresponsible lending, but Nick Gardner at mortgage broker Chase De Vere Mortgage Management says it simply reflects what is happening in the market. "Lenders have been getting more and more generous for quite some time. Booming property prices have forced them to. If they hadn't, a lot more people would have been priced out of the market before now."


 
I don't know how they can get away with that line about doing everyone a favour because if they didn't people would be priced out. Irresponsible lending is one of the factors that has caused prices to rise to ridiculous levels in Ireland. Do they think that people are too stupid to realise that lenders getting more and more "generous" is one of the major reasons that property prices have risen so far so fast. We're lucky that rising interest rates appear to have started to put an end to the madness here.


----------



## minky

There's a good article today in the indo about the rise of "ghost towns" in the republic,

That they are creating [FONT=Verdana, Arial]a sense of abandonment in places and are falling into neglect and disrepair. [/FONT][FONT=Verdana, Arial]Most of them are owned by investors who have yet to rent or sell them on.[/FONT]

http://www.unison.ie/irish_independent/stories.php3?ca=36&si=1714507&issue_id=14825


----------



## stanbowles

excellent article ... rare to see half-decent journalism in either of the two main Irish 'broadsheets', especially on property-related matters.


----------



## Superman

whathome said:


> Do they think that people are too stupid to realise that lenders getting more and more "generous" is one of the major reasons that property prices have risen so far so fast.


Yes, and they'd be right.


----------



## messyleo

house price drop - i know some people don't like seeing these listed but it's quite substantial and in the middle of ranelagh, (Fortescue Lane) so it may be of interest.



[broken link removed]

I make that an 18% price drop in a v desirable location!


----------



## CelloPoint

dochasach said:


> This is yet another reason why I choose to rent and live.  "Owners" who choose to fork out more dead money in interest than I'll pay in 20 years of renting might say rent money is deader than interest money, but I'd rather pay dead money than be dead.



Well put! - that's something I'll rant to my customers about when I'm dropping them off in Clonsilla or somewhere...


----------



## CelloPoint

minky said:


> There's a good article today in the indo about the rise of "ghost towns" in the republic,
> 
> That they are creating [FONT=Verdana, Arial]a sense of abandonment in places and are falling into neglect and disrepair. [/FONT][FONT=Verdana, Arial]Most of them are owned by investors who have yet to rent or sell them on.[/FONT]
> 
> http://www.unison.ie/irish_independent/stories.php3?ca=36&si=1714507&issue_id=14825




Agree, very good article. I particularly liked the last paragraph:



			
				Irish Indo said:
			
		

> [FONT=Verdana, Arial]Beautiful coastal scenery has been cemented over in the property gold-rush, leaving a sprawl of unoccupied housing in its wake, a cruel irony in a country where young couples struggle to get on the property ladder and hundreds of people sleep rough every night.




Just what have we done to our country? The random pitter-patter of one-off houses that blight the landscape reflect the greed and incompetence by our local authorities. Yes, I'm gonna have a finger-pointing blame rant here: I think all planning matters should be taken away from the local authorities and fat-cat councillers and handed over to a regulated and fully independent planning authority. The incompetence has been proven many a time, but honestly, I can't see any changes being made to the cushy status-quo that a few individuals are benefiting enormously from.
[/FONT]


----------



## Open_Window

minky said:


> There's a good article today in the indo about the rise of "ghost towns" in the republic,
> 
> That they are creating [FONT=Verdana, Arial]a sense of abandonment in places and are falling into neglect and disrepair. [/FONT][FONT=Verdana, Arial]Most of them are owned by investors who have yet to rent or sell them on.[/FONT]
> 
> http://www.unison.ie/irish_independent/stories.php3?ca=36&si=1714507&issue_id=14825



Good sobering article.

So there it is, the rot in the system that we call progress, the symptom of greed. If you were buidling a house would you naturally add some dampness & structural instability if the stated goal was a safe house?  

Full circle my friends. We had ghost towns & empty houses strewn across the countryside becasue of emmigration in the 1800s. the 80s in a no prospect economy, now we have created ghost towns because and say its good for us, its growth while no one can afford to live were they need to.

My goodness future generations are going to look back and scream, laugh and cry all in disbelief.


----------



## ajapale

OW,

Please focus on the point for Debate:
"*Current public sentiment towards the housing market?"
*
Post general discussion concerning the economy and politics in LOS

aj


----------



## wolfie

The title of this thread sums everything up about the property market .Sentiment.The public have finally realised that houses are just a place to live in for the vast majority of people.The rising costs of mortgages plus the general rise in the cost of living is starting to hit home.With virtually no capital appreciation guaranteed  the sentiment is swinging rapidly against housing.The dream of buying a home and being able to brag about how much more it is worth since you bought it last year is over.It is a huge monthly payment now that will be around your neck for the next however many years .The cost of it is rising not dropping.Incomes are not rising as rapidly as the accompanying debts.You cant bail out that credit card debt, store card or other debt now with remortgaging because the  "equity " is gone.Most people are not even surviving on their wages week to week with out subsidising it with card debt or overdraft debt.I cant count the amount of people I know who are living off remortgage money.Constantly topping up mortgage debt to finance their basic not extravagent lifestyles.This whole economy is an illusion .Its a smoke and mirrors act.Its entirely driven by construcion related growth.The change of sentiment in the housing market will have far more impact than even the most pessimistic of economists have forecast.By the way.... I work in construction so I have no vested interest in talking down property at all.


----------



## Calina

CelloPoint said:


> Just what have we done to our country? The random pitter-patter of one-off houses that blight the landscape reflect the greed and incompetence by our local authorities. Yes, I'm gonna have a finger-pointing blame rant here: I think all planning matters should be taken away from the local authorities and fat-cat councillers and handed over to a regulated and fully independent planning authority. The incompetence has been proven many a time, but honestly, I can't see any changes being made to the cushy status-quo that a few individuals are benefiting enormously from.
> [/size][/font]



It has been - in many cases - much easier to get planning permission for holiday house schemes than it has been for families living and working in said localities to get permission for a single family house. While I realise that there are issues around one-off houses, the blight of holiday homes is not quite as simple as you would put it. The truth is that much planning in this country is done on an ideological basis without consideration to the needs of the local community. An effective ban on one-off houses is worthy of criticism in this respect, particularly when you examine the multi-house developments that are being built. 

In truth, I have lived in several different newish estates in Dublin, and most of those houses have been built, not with the needs of the occupants upper most in the minds of the designers, but the need to extract the most amount of profit with no regard at all to the needs of the potential occupants. 

I don't think centralised planning is the answer because in recent times, a great deal of planning has left a great deal to be desired, both in urban areas and rural areas. The point relates to holiday homes, and the fact that they are effectively untaxed. If we had proper regional representation with tax raising powers, I would suggest that a tax should be payable to the regional authority on second homes so that the costs arising from them to localities can be mitigated. Central planning has done little to benefit either the health system, or public transport to any great extent. Planning should be done at local level, but it should, above all, be done with the requirements of the local communities uppermost. The rezoning kerfuffle during the week was actually evidence of good sense. Housing really should be planned on a utilitarian need basis, not a profit-extraction basis. Unfortunately, both in holiday and non-holiday areas, the profit motive is of first importance. And because of this, we have people who want single houses because their needs are not being fulfilled by collective developments. I have a lot of sympathy for them. Whilst saying that I have to say that I would be strongly against one off holiday homes. 

In the short term, however, I would tax the hell out of homes which are unoccupied for more than six months. The net benefit of that would be to sort out supply issues in Dublin as well.


----------



## Open_Window

ajapale said:


> OW,
> 
> Please focus on the point for Debate:
> "*Current public sentiment towards the housing market?"
> *
> Post general discussion concerning the economy and politics in LOS
> 
> aj



I said did it was "sobering", i.e. people who will read it might start to really sober up and look at this whole market with a wider view and that can only effect the market sentiment. I think negatively towards current prices.


----------



## CelloPoint

Calina said:


> It has been - in many cases - much easier to get planning permission for holiday house schemes than it has been for families living and working in said localities to get permission for a single family house. While I realise that there are issues around one-off houses, the blight of holiday homes is not quite as simple as you would put it. The truth is that much planning in this country is done on an ideological basis without consideration to the needs of the local community. An effective ban on one-off houses is worthy of criticism in this respect, particularly when you examine the multi-house developments that are being built.
> 
> In truth, I have lived in several different newish estates in Dublin, and most of those houses have been built, not with the needs of the occupants upper most in the minds of the designers, but the need to extract the most amount of profit with no regard at all to the needs of the potential occupants.
> 
> I don't think centralised planning is the answer because in recent times, a great deal of planning has left a great deal to be desired, both in urban areas and rural areas. The point relates to holiday homes, and the fact that they are effectively untaxed. If we had proper regional representation with tax raising powers, I would suggest that a tax should be payable to the regional authority on second homes so that the costs arising from them to localities can be mitigated. Central planning has done little to benefit either the health system, or public transport to any great extent. Planning should be done at local level, but it should, above all, be done with the requirements of the local communities uppermost. The rezoning kerfuffle during the week was actually evidence of good sense. Housing really should be planned on a utilitarian need basis, not a profit-extraction basis. Unfortunately, both in holiday and non-holiday areas, the profit motive is of first importance. And because of this, we have people who want single houses because their needs are not being fulfilled by collective developments. I have a lot of sympathy for them. Whilst saying that I have to say that I would be strongly against one off holiday homes.
> 
> In the short term, however, I would tax the hell out of homes which are unoccupied for more than six months. The net benefit of that would be to sort out supply issues in Dublin as well.



I would agree with a small tax on second homes. However this is not going to happen any time soon: the budget will be about trying to force a soft landing - property taxes on second homes would flood the market even further, the knock-on effects being detrimental. The effect of such a flooding would far outweigh any benefits of reigning in the specuvestors. The cold hard facts of modern Ireland are that money and politics trump the sociological needs of a well-built society.


----------



## beattie

CelloPoint said:


> The cold hard facts of modern Ireland are that money and politics trump the sociological needs of a well-built society.


 
Agree but many people who frequent the FF tent have done well so there will be nothing done to rock the boat


----------



## ajapale

Please focus on the debate. Confine genearal discussion concerning the general economy and politics to LOS.

On one side you have the bears who believe that current sentiment is overwhelmingly negative and that the property bubble has or is about to burst.

On the other side you have the property bulls who believe that current sentiment is still positive and property prices will continue to rise for the foreseeable future.


----------



## Marie

CelloPoint said:


> I would agree with a small tax on second homes. However this is not going to happen any time soon: the budget will be about trying to force a soft landing - property taxes on second homes would flood the market even further, the knock-on effects being detrimental. The effect of such a flooding would far outweigh any benefits of reigning in the specuvestors. The cold hard facts of modern Ireland are that money and politics trump the sociological needs of a well-built society.


 
From dozens of post on the "Location" and "Property & Investment" threads it would seem that quite a few people have outstanding mortgages on their PPR whilst also "owning" (in other words, holding interest-only mortgages on) a couple of other properties, typically one rented out in the city or town where they live, the other a 'holiday-home' type investment, also let.

A reasonable - that is, high  - tax on such investment properties (not rental or capital gains based, but based on  _current market value of any  property which is not a PPR _) might achieve a number of things in one fell swoop.  It might change the culture of acquiring 'second' and 'third' properties on interest-only mortgages to subsidise or pay off the PPR mortgage before the end of the long loan repayment period.  It would take the heat out of the trading-up phenomenon (for the same reason).  It could be a disincentive to despoilation of areas of outstanding natural beauty by groups of concrete boxes used to generate income for investors living in the cities as seldom-used houses in rural and coastal areas just would not generate rental income and the robust tax would mean their capital appreciation would not go at such a gallop.   All this would re-open space (and bring rural and coastal properties within the means of) young couples, locals who want to work locally and set up businesses and for people who want to relocate full-time to less populated areas to live there and to contribute to the local social and economic life of the community........or is there an economic flaw in that argument?


----------



## Panzraam

Well Spotted GravityGirl, thats one of the most impressive drops we have seen up to now. I think these posts are v relevant as they provide clear empirical evidence of the slow down/reversal of the property market. I think previous criticism probably related to long list of repeating the same information.


----------



## Marie

gravitygirl said:


> house price drop - i know some people don't like seeing these listed but it's quite substantial and in the middle of ranelagh, (Fortescue Lane) so it may be of interest.
> 
> 
> 
> [broken link removed]
> 
> I make that an 18% price drop in a v desirable location!


 
Yes but it's still a scandalous price for what is essentially a one-bedroom apartment with courtyard!!! (the second bedroom is a "stroke" dining-area).  In Northern France you could buy a stately 6-bedroomed villa in the Paris suburbs with a half-acre garden for less.  That's a measure of the myopia


----------



## gearoidmm

Love the descirption of 'bedroom 2/living room'.

That said, they are asking for 500,000 for a 500sq ft apartment in Mt St Annes.


----------



## Bedsit

I heard from a reliable source the other day that the boys in DAFT believe that their business is worth around 40 million and that they currently have a management team looking into selling the business. Lets hope they have not missed the boat otherwise it could be valued at a lot less.


----------



## beattie

Bedsit said:


> I heard from a reliable source the other day that the boys in DAFT believe that their business is worth around 40 million and that they currently have a management team looking into selling the business. Lets hope they have not missed the boat otherwise it could be valued at a lot less.


 
Maybe they could give the IT a call, they have set a precedent of overpaying for a property related website


----------



## johnjoe101

More evidence of falling house prices. i posted this awhile ago but cant find it well anyway it was on the market for 1.1m now 998K (this place was marketed heavily large pics and write up in local papers). I make that just under 9.3% fall in price.

*[broken link removed]*

Now supposidly these are the type of houses that are safe from major falls detached in mature safe estate short distance (walking no more than 15 mins to any of these places) from dart, busses schools and bray town itself. Basically it is one of the best located places in Bray and yet it still can fall in these days of soft landings.


----------



## beattie

johnjoe101 said:


> More evidence of falling house prices. i posted this awhile ago but cant find it well anyway it was on the market for 1.1m now 998K (this place was marketed heavily large pics and write up in local papers). I make that just under 9.3% fall in price.
> 
> *[broken link removed]*
> 
> Now supposidly these are the type of houses that are safe from major falls detached in mature safe estate short distance (walking no more than 15 mins to any of these places) from dart, busses schools and bray town itself. Basically it is one of the best located places in Bray and yet it still can fall in these days of soft landings.


 
I wouldn't have that anywhere in Bray would be immune to price drops. This phenomenon is occurring in many areas. What will be interesting is to see if it now sells after having its price dropped by ~10%


----------



## makindye

Does anyone have a good feel for what this property in Bray would rent for


----------



## ajapale

> Dropping asking prices=bearish sentiment


undersupply,

Welcome to AAM,

May I suggest that if you wish to participate in this or any other debate in AAM that you construct full sentences in English to commuincate your views?

thanks,

aj


----------



## Sarsfield

Time I got talking to NIB about a LTV mortgage before I find myself above 50% LTV again!


----------



## Bootdog

I've been reading parts of this thread for a while. It seems to have become very unbalanced ... all the bears are out to play! I just wonder is there anyone looking for signs of price increases over the past few months, or is it that there have been none??? 

On the bullish side, the Heuston Square development sold out all the one bed (380k) and two beds (520k) within 3 days, and the 3 beds within about a week (at 630k). Parking is extra at 35k per space. [broken link removed]


----------



## whathome

ajapale said:


> On one side you have the bears who believe that current sentiment is overwhelmingly negative and that the property bubble has or is about to burst.
> 
> On the other side you have the property bulls who believe that current sentiment is still positive and property prices will continue to rise for the foreseeable future.


 
I think I'm from a third side, I would expect most bears here are also from the third side...

The third side believe that current sentiment is turning negative and property prices peaked in April/May and will continue to fall for the foreseeable future.


----------



## whathome

Bootdog said:


> I just wonder is there anyone looking for signs of price increases over the past few months, or is it that there have been none???


 
The only occasions that I have I've seen prices increase over the past few months are where a property had been sale agreed but the buyer backed out. The vendor is loath to put it back on at the original price so increases it slightly. With the properties that I have noticed, the price usually drops again within a few weeks.




Bootdog said:


> On the bullish side, the Heuston Square development sold out all the one bed (380k) and two beds (520k) within 3 days, and the 3 beds within about a week (at 630k). Parking is extra at 35k per space. [broken link removed]


 
Yes - now watch the cancellation list. What seems to be happening on new builds is that people are happy to pay their booking deposit but reluctant to proceed with the purchase.


----------



## JayDub

undersupply said:


> These are large apartments, and at that price per square foot represent a drop in asking price for newbuilds, please contradict me if you think I am wrong.There is no stamp duty on these so I suspect that FTB'ers are taking these and not investors.


Why is there no stamp duty on these apartments? As far as I was aware property over €317,501 had a rising scale of stamp duty, even for first time buyers.


----------



## Panzraam

A new article from Davy showing that the loan-to-value break-even on an interest-only mortgage dropped from 75% to 58% between Q1 and Q4 2006. Plenty of other frightening facts for the would-be property investor. Just in time for Halloween!

http://www.davydirect.ie/other/pubarticles/residentialyields20061027.pdf

Investment Property anyone?


----------



## ClubMan

_Davy's _are a stockbroker so have a vested interest in discouraging people away from property and towards equities just as _EAs _and the like have a vested interest in doing the opposite. Hardly objective whatever about the merits or otherwise of their actual arguments or analysis.


----------



## Maine

ClubMan said:


> _Davy's _are a stockbroker so have a vested interest in discouraging people away from property and towards equities just as _EAs _and the like have a vested interest in doing the opposite. Hardly objective whatever about the merits or otherwise of their actual arguments or analysis.


 
It probably should also be pointed out that they are a subsidiary of Bank of Ireland, a bank that has huge exposure to irish property


----------



## Bootdog

undersupply said:


> These are large apartments, and at that price per square foot represent a drop in asking price for newbuilds, please contradict me if you think I am wrong.There is no stamp duty on these so I suspect that FTB'ers are taking these and not investors.



Its difficult to get a good comparison, but Kilmainham Lane, 2 beds, 80 sqm €520k, [broken link removed]
... thats an increase in size for the same money.

also The Steps, Kilmainham, 3 bed 130 sqm €580k inc. parking [broken link removed]
... thats a decrease in size and an increase in price. 

I couldn't get a current price on the Chocolate Factory in Kilmainham, but it would be useful to know for comparison purposes.

Opinions aside, are there any comparable developments that were priced higher than Heuston Square? 

I also find it hard to believe that FTBs are snapping up properties at €630k+ ...


----------



## batty

I'm beginning to wonder if some EA are in any way facing up to the slowing in the market.

In an estate where I have a duplex there has been a 3 bed duplex for sale since May.  It's approx 1400 sq feet & is on at €450K but the last time I checked it had no offers.

A different EA (one of the big ones) has put a 2 bed apartment in the same estate (approx 700 sq feet) up for sale for €425K.  I have remailed the EA querying this & I'll be interested to hear their response!


----------



## Remix

ClubMan said:


> _Davy's _are a stockbroker so have a vested interest in discouraging people away from property and towards equities


 

According to Davy 



> *Property Based Investments*
> 
> As Ireland's leading provider of client-centred wealth management services, Davy has been to the fore in identifying superior opportunities for clients to invest in this valuable asset class. We now have a range of such investment opportunities in Ireland, the UK and Europe.


----------



## bo se

I see that the soft landing recently enjoyed in the UK has given way to a renewed boom in housing and mortgage approvals.

http://business.timesonline.co.uk/article/0,,16849-2429345,00.html#cid=OTC-RSS&attr=Business

meanwhile the same article quotes a survey from Hometrack, released over the weekend which suggested:

"that prices recorded by estate agents had grown at their fastest annual rate for two years in October. The rise appears to have been fuelled by approvals for house purchase loans over the previous quarter, suggesting that price inflation will continue. Buyers appear to have taken little notice of the August rise in official interest rates to 4.75 per cent. Ahead of next week’s expected rise to 5 per cent, home loans are available from high street lenders at 4.8 per cent, fixed for two years, and 5.1 per cent, fixed for five years, well below standard borrowing rates."


----------



## whathome

Cloragh Mills, Rathfarnam

*New Build Price Drop....*

Were €655,000 (duplex), €525,000(2 bed) and €395,000 (1 bed) 


Click through for new prices on each of these (005, 007 and 008 from list above):
*2 Bed Duplex* reduced from €655,000 to €595,000
[broken link removed]=

*2 Bed* *Apartments *reduced from €525,000 to €505,000
[broken link removed]=

*1 Bed* *Apartments *reduced from €395,000 to €365,000
[broken link removed]=

Interesting to see new developments coming under pressure.


----------



## whathome

bo se said:


> I see that the soft landing recently enjoyed in the UK


 
The UK market hasn't landed yet!  Soft or Hard


----------



## JayDub

bo se said:


> I see that the soft landing recently enjoyed in the UK has given way to a renewed boom in housing and mortgage approvals.


You can not compare the UK property market with the Irish property market. 1 in 7 properties in Ireland are unoccupied, compared to 1 in 30 in the UK.


----------



## Arthur Daley

http://www.rte.ie/business/2006/1031/credit.html

Central bank numbers are out today, and show another slowdown since June. Still there is 302.7bn in private sector credit here, which is amazing. Also amazing is the fact that the value of outstanding residential mortgages have doubled in less three years. It went from about €60bn to €117bn in that time.

But all this has become seen to be 'normal behaviour' in recent times.


----------



## Eirmail

JayDub said:


> You can not compare the UK property market with the Irish property market. 1 in 7 properties in Ireland are unoccupied, compared to 1 in 30 in the UK.


 

Agreed, also we are building propotionally much more properties than the UK.


----------



## beattie

whathome said:


> *New Build Price Drop:*
> 
> Cloragh Mills, Rathfarnam
> 
> Were €655,000 (duplex), €525,000(2 bed) and €395,000 (1 bed)
> 
> 
> Click through for new prices on each of these (005, 007 and 008 from list above):
> *2 Bed Duplex* reduced from €655,000 to €595,000
> [broken link removed]=
> 
> *2 Bed* *Apartment *reduced from €525,000 to €505,000
> [broken link removed]=
> 
> *1 Bed* *Apartment *reduced from €395,000 to €365,000
> [broken link removed]=
> 
> Interesting to see new developments coming under pressure.


 
This sort of development is sure to hurt the 2nd hand market as well. Most of the builders who bought the land a few years ago can afford to drastically cut their prices while still maintaining a sizeabele profit margin. As this is happening in a desirable area with the M50 I bet this will send shudders through some of the EA fraternity. 

I think I will wait until one of these gems comes with a free Merc before taking the plunge.....


----------



## makindye

Panzraam said:


> A new article from Davy showing that the loan-to-value break-even on an interest-only mortgage dropped from 75% to 58% between Q1 and Q4 2006. Plenty of other frightening facts for the would-be property investor. Just in time for Halloween!
> 
> http://www.davydirect.ie/other/pubarticles/residentialyields20061027.pdf
> 
> Investment Property anyone?


 
I wonder what the break even loan to value break even is on a repayment mortage - say average 25 year variable?  I did some quick calculations on residential returns on random properties (Dublin) and the real rate of return after all costs, voids etc (excluding capital appreciation) was between 1 and 2%.  Anyone investing in property now would be taking a huge risk for no return.


----------



## Remix

beattie said:


> I think I will wait until one of these gems comes with a free Merc before taking the plunge.....


 

Actually - wait even longer, the way things are going, and it might be a case of one of these gems free with a merc purchase


----------



## JayDub

I'm not sure if this is a nationwide trend, but in the Midlands I have seen a lot of "ready to go" developments for sale. There is one development in Mullingar with planning permission for 56 apartments, the price €5.6M. Thats a pre construction price tag of €100K per apartment which doesn't leave much room for profit considering a 2 bedroom apartment in Mullingar sells on between €225K-€250K. The property market here in Mullingar is already saturated, with over 200 properties listed in Daft and I know of one development where half of the homes remain unsold a year on and theres already over a dozen "for sale" signs in the occupied half.


----------



## beattie

JayDub said:


> I'm not sure if this is a nationwide trend, but in the Midlands I have seen a lot of "ready to go" developments for sale. There is one development in Mullingar with planning permission for 56 apartments, the price €5.6M. Thats a pre construction price tag of €100K per apartment which doesn't leave much room for profit considering a 2 bedroom apartment in Mullingar sells on between €225K-€250K. The property market here in Mullingar is already saturated, with over 200 properties listed in Daft and I know of one development where half of the homes remain unsold a year on and theres already over a dozen "for sale" signs in the occupied half.


 
This will be interesting to see if this shifts. Up to now there has been an insatiable appetite for development land but if this sort of property stays on the shelf it will represent a seismic change in sentiment IMO


----------



## JayDub

beattie said:


> This will be interesting to see if this shifts. Up to now there has been an insatiable appetite for development land but if this sort of property stays on the shelf it will represent a seismic change in sentiment IMO


Here is the link to that development for sale,


----------



## plaudit

JayDub said:


> I'm not sure if this is a nationwide trend, but in the Midlands I have seen a lot of "ready to go" developments for sale. There is one development in Mullingar with planning permission for 56 apartments, the price €5.6M. Thats a pre construction price tag of €100K per apartment which *doesn't leave much room for profit* considering a 2 bedroom apartment in Mullingar sells on between €225K-€250K. The property market here in Mullingar is already saturated, with over 200 properties listed in Daft and I know of one development where half of the homes remain unsold a year on and theres already over a dozen "for sale" signs in the occupied half.


 
All this was fine when prices were rising all the time. Between purchasing land and actually starting the development there could be a lag of about a year, and of course by the time the 3rd and 4th phases were complete a few years later prices may have risen 40-50%

I'd say a lot of developers would have made zero profit on 100 houses developments were it not for capital appreciation.


----------



## whathome

Mountseskin Court, Tallaght (Section 23)

Another new development price drop today:

1 Bed apartments reduced from €305,000 to *€260,000*
[broken link removed] 

SBpost article from September:
[broken link removed]


----------



## Maine

Arthur Daley said:


> http://www.rte.ie/business/2006/1031/credit.html
> 
> Still there is 302.7bn in private sector credit here, which is amazing. Also amazing is the fact that the value of outstanding residential mortgages have doubled in less three years. It went from about €60bn to €117bn in that time.


IMO lending is simply booming. For mortgages we borrowed 100m euros every day the banks were open in September and in total the private sector borrowed a mere 275m euros a day. Most of the above is all heading for the property market.

E60b at 2% plus 1% margin in 2003 was 1800m a year in mortgage interest.
E120b at 3.5% plus 1% margin in December 2006 will be 5,400m a yr in mortgage interest. 
Thats a trebling in interest cost in roughly 3 years or E70m a week extra.


----------



## Fredser

miju said:


> one of the dublin "equivalents" to moyross would be finglas south where you can buy a 3 bedroom house for about €155k



Even in Finglas you wont get a 3-bed house for anywhere NEAR €155k.

Even the worst of Finglas South estates are asking between 290 and 317k.

Finglas is still very popular with Finglas people wanting to stay there.

Daft : http://tinyurl.com/y3sghf

F


----------



## whathome

Fredser said:


> Even the worst of Finglas South estates are asking between 290 and 317k.


 
3 Bed's in Finglas are asking less than that now:

Here's one at €270,000
[broken link removed]

And another two at €280,000
[broken link removed]
[broken link removed]


----------



## bo se

whathome said:


> The UK market hasn't landed yet! Soft or Hard


This is of course you opinion. Not so long ago many people in the UK - particularly on threads like this - were claiming it had already crashed. Hard!


----------



## Fredser

whathome said:


> 3 Bed's in Finglas are asking less than that now:
> 
> Here's one at €270,000
> [broken link removed]
> 
> And another two at €280,000
> [broken link removed]
> [broken link removed]



Ok - my 290k was slightly off !! 

But 270k is still far away from the claimed 155k (for the moment)....


----------



## topman

WhatHome....

I think you will find that thoses homes you are referring to in Finglas are in Dunsink. I would consider that a very good price when you consider the area.


----------



## Arthur Daley

Maine said:


> IMO lending is simply booming.
> Thats a trebling in interest cost in roughly 3 years or E70m a week extra.


 
All this extra isn't as noticable because it's gone on the bit of a 'never never' combination of higher terms (like 35-40 years becoming standard for ftbs), and higher LTVs. 

There is a definite slowdown in these Cent Bank numbers since June, but like the esri/daft indices it isn't substantial - yet.


----------



## whathome

topman said:


> WhatHome....
> 
> I think you will find that thoses homes you are referring to in Finglas are in Dunsink. I would consider that a very good price when you consider the area.


 
Take a look at the map topman - Finglas!


----------



## Firefly

Finglas is still very popular with Finglas people wanting to stay there.



Happy Days...


----------



## phoenix_n

Firefly said:


> Finglas is still very popular with Finglas people wanting to stay there.
> 
> 
> 
> Happy Days...


 


By the number of apts for sale in Premier Square and the falling asking prices i think the owners are beginning to realise Glasnevin does not quite extend to Finglas Road.


----------



## Maine

Arthur Daley said:


> All this extra isn't as noticable because it's gone on the bit of a 'never never' combination of higher terms (like 35-40 years becoming standard for ftbs), and higher LTVs. .


 
IMO the reason it is not noticeable is that we are borrowing so much, private sector borrowing at almost 1500m a week - easy to find additional 70m a week in there to pay interest.

Because we are spending this 1500m mostly in an economy of only 4m then its hardly a surprise that a massive asset bubble builds up as well as massively over inflated wages for scarce labour.


----------



## random2006

I was listening to Newstalk over the weekend and two surprising statements caught my attention. The first was on the repeat of the breakfast show, Ger and the business guy were discussing ESB's proposed sale of land, and Ger was talking about how groups with large land banks AIB, BOI, ESB et were selling up while trying to maintain the facade that the property market is going to keep on rocketing upwards!
The second was during the business show, when the host said that rental yields were going up and that prices of houses were falling!!

While these may or may not have been heard by the general public they could get people thinking, especially the house price falling one especially since the latest reports only talk about a slow down.
R


----------



## sosulio

whizzbang said:


> there's one there right now! [broken link removed]


 

For the record this house is on the other side of town from moyross, but the area is just as dodgy! bus and postal service were cancelled there as far as I know!


----------



## gurramok

topman said:


> WhatHome....
> 
> I think you will find that thoses homes you are referring to in Finglas are in Dunsink. I would consider that a very good price when you consider the area.



Dunsink Lane where all the bad stuff happens is not Dunsink estate in Finglas South, completely different areas about half mile apart.
Berryfield in first link is like the local Beirut hence the lowest price in the general area.

Surprised at whathome's other 2 at €280k
[broken link removed]
[broken link removed] 

Long time since i saw a 280k hse in Finglas, usual price for them would of been 300k.
And yes Prospect Hill is 100% defo in Finglas with Hazelcroft/Fairlawn behind it.
Premier Square just happens to be on 'correct' side of Finglas Road, still doesn't deserve a Glasnevin address considering it replaced the old Premier Dairy which was ALWAYS in Finglas!
Talk about developers trying to up prices with misleading addresses!


----------



## Raskolnikov

Maine said:


> It probably should also be pointed out that they are a subsidiary of Bank of Ireland, a bank that has huge exposure to irish property


Bank of Ireland/AIB have covered their asses with Irish property. The maximum loan you can get from either is 92%, also neither bank offers interest only options on their mortgages. Ask anyone who has gotten a mortgage with either bank, it's not easy unlike some of they're competitors.


----------



## Marie

bo se said:


> This is of course you opinion. Not so long ago many people in the UK - particularly on threads like this - were claiming it had already crashed. Hard!


 
Hi Bo Se!  Could you provide some links or references to UK opinion that the market had already 'crashed'?  A poll last week showed that 66% of respondents thought the UK property market would 'crash' rather than achieve a 'soft landing' (the definition of which I have queried previously on this thread).  There is an acknowledged 'significant slowdown' in property sales over the past 18 months and significant price-reductions, significant increases in the time from putting on the market to eventual sale, significantly longer periods of vacancy in buy-to-lets etc., etc.  In my view that is merely _the beginning_  of the downturn in this market.......just as the 10% drops in price noted on this thread is _the beginning _of a shift in orientation towards property in Ireland.  It takes time for cumulative forces to feed through.  Like the moment of the turning of the tide you hardly see any change beforehand but when it does turn its unmistakeable.  IMO in the UK a number of factors are still feeding through into the equation and it is not clear how bad it will be.  On the broader economic front Ireland and the UK have very different vulnerabilities.


----------



## Maine

Raskolnikov said:


> Bank of Ireland/AIB have covered their asses with Irish property. The maximum loan you can get from either is 92%, also neither bank offers interest only options on their mortgages. Ask anyone who has gotten a mortgage with either bank, it's not easy unlike some of they're competitors.


 
This may be the case.  However with 302,000m borrowed already and 275m being borrowed every week huge exposure exists for whole lending sector.  

IMO the central bank is somehat embarrassed by this and hence their relief the numbers came in just underneath so that the headlines would say slowdown in lending. 

Even 5% bad debts would be 16,000 m.  How many people work in legal / accounting / valuation etc pushing these increases in borrowing and alot of these people are well paid hence the risks to the leafy suburbs.


----------



## Maine

edit


----------



## miju

Fredser said:


> Even in Finglas you wont get a 3-bed house for anywhere NEAR €155k.
> 
> Even the worst of Finglas South estates are asking between 290 and 317k.
> 
> Finglas is still very popular with Finglas people wanting to stay there.
> 
> Daft : http://tinyurl.com/y3sghf
> 
> F



well to respond to that i'll agree with finglas people wanting to stay in finglas as i'm from the area myself hence seeing the property for that price in the first place

the house is gone from daft but will try to dig it up from google cache


----------



## beattie

Primetime was just dealing with the First Time Buyer/Stamp duty issue where the house is let out instead of being lived in by the purchaser. This will not help confidence in the market at the moment and could end in an increase in supply as a few hefty (and most unexpected) tax bills arrive though the letterbox


----------



## discstu

Would people have been that stupid? then again saw this a few days ago on another thread
*Utility bills - Landlord scams* 
Are all the landlords in the country scamming tenants by having the utility bill ( esb, telephone etc ) registered in the landlord's name? The landlord then usually drops off the bill to the tenants who will usually pay the landlord by cash ( as the amounts are not that large to warrant a cheque or DD ). The landlord is then able to use the utility bill as an expense when preparing his/her year end tax return by offsetting it against rental income. Thus, the landlord is able to reduce his/her tax bill without having ever incurred the cost in the first place.



Did they give any idea of the numbers involved


----------



## beattie

discstu said:


> Would people have been that stupid? then again saw this a few days ago on another thread
> *Utility bills - Landlord scams*
> Are all the landlords in the country scamming tenants by having the utility bill ( esb, telephone etc ) registered in the landlord's name? The landlord then usually drops off the bill to the tenants who will usually pay the landlord by cash ( as the amounts are not that large to warrant a cheque or DD ). The landlord is then able to use the utility bill as an expense when preparing his/her year end tax return by offsetting it against rental income. Thus, the landlord is able to reduce his/her tax bill without having ever incurred the cost in the first place.
> 
> 
> 
> Did they give any idea of the numbers involved


 
Didn't catch the whole piece but it didn't seem like an inconsiderable amount. The revenue have carried a pilot test to ascertain the extent of the avoidance and it looks like they want to delve a bit further


----------



## partisan

Marie said:


> Hi Bo Se! Could you provide some links or references to UK opinion that the market had already 'crashed'? A poll last week showed that 66% of respondents thought the UK property market would 'crash' rather than achieve a 'soft landing' (the definition of which I have queried previously on this thread). There is an acknowledged 'significant slowdown' in property sales over the past 18 months and significant price-reductions, significant increases in the time from putting on the market to eventual sale, significantly longer periods of vacancy in buy-to-lets etc., etc. In my view that is merely _the beginning_  of the downturn in this market.......just as the 10% drops in price noted on this thread is _the beginning _of a shift in orientation towards property in Ireland. It takes time for cumulative forces to feed through. Like the moment of the turning of the tide you hardly see any change beforehand but when it does turn its unmistakeable. IMO in the UK a number of factors are still feeding through into the equation and it is not clear how bad it will be. On the broader economic front Ireland and the UK have very different vulnerabilities.



The UK Property market is heating up again with an 8% rise year on year for September. A Sunday times article this week puts forward the view that there wasn't a house price bubble in the UK.


----------



## col

Was in Chicago last week and looked  at a 3000 sq ft penthouse condo close to Michigan Ave (two blocks) on the right side of town. 3 bed, 3 baths and 3 balconies for $1.5m. They were definitely willing to negotiate lower price if I was interested.(I wasnt) Market has collapsed in a very short time and developers are worried and are undercutting second hand properties. Will happen here, its only a matter of time.


----------



## Maine

col said:


> Was in Chicago last week and looked at a 3000 sq ft penthouse condo close to Michigan Ave (two blocks) on the right side of town. 3 bed, 3 baths and 3 balconies for $1.5m. They were definitely willing to negotiate lower price if I was interested.(I wasnt) Market has collapsed in a very short time and developers are worried and are undercutting second hand properties. Will happen here, its only a matter of time.


 
Even that price would be about US$500 per sq ft or about 385 euro.  Many parts of Dublin are double and more that price.


----------



## phoenix_n

Will be watching these properties fall in price so posted them here as easier to look up. Some have already fallen in price so will detail that later when have time.


[broken link removed]
[broken link removed]
[broken link removed]
[broken link removed]
[broken link removed]
[broken link removed]
[broken link removed]

[broken link removed]
[broken link removed]

[broken link removed]
58 Tolka Vale, Glasnevin - 355k
65 TOLKA VALE, Glasnevin - 375k
[broken link removed]
[broken link removed]

[broken link removed]
[broken link removed]
[broken link removed]
[broken link removed]
[broken link removed]
[broken link removed]
[broken link removed]
[broken link removed]
[broken link removed]
[broken link removed]
[broken link removed]
[broken link removed]

[broken link removed]
[broken link removed]
[broken link removed]
[broken link removed]
[broken link removed]
[broken link removed]

[XYX]


----------



## bo se

Marie said:


> Hi Bo Se! Could you provide some links or references to UK opinion that the market had already 'crashed'? A poll last week showed that 66% of respondents thought the UK property market would 'crash' rather than achieve a 'soft landing' (the definition of which I have queried previously on this thread). There is an acknowledged 'significant slowdown' in property sales over the past 18 months and significant price-reductions, significant increases in the time from putting on the market to eventual sale, significantly longer periods of vacancy in buy-to-lets etc., etc. In my view that is merely _the beginning_ of the downturn in this market.......just as the 10% drops in price noted on this thread is _the beginning _of a shift in orientation towards property in Ireland. It takes time for cumulative forces to feed through. Like the moment of the turning of the tide you hardly see any change beforehand but when it does turn its unmistakeable. IMO in the UK a number of factors are still feeding through into the equation and it is not clear how bad it will be. On the broader economic front Ireland and the UK have very different vulnerabilities.


 
Hi Marie, 
I hear what you're saying and well put - I'm not so naive as to deny risks in Ireland and presumably also in the UK. But the truth is no one knows what way the market will go: over the next 12/24/36 months, or any other period you choose to pick. As you might say yourself sometimes you can't tell which way the tide is going.

Re your specific question on UK opinion/sentiment have a look at some old threads on
http://www.housepricecrash.co.uk
You may know the site - apparently dedicated to tracking the crash in the UK. Lots of anecdotals in the past about specific price reduction similar to currently appearing here. The site also shows forecasts and historic/12 mth growth indices from various finacial institutions. Funnily enough, although there were a lot of weak and negative growth forecasts for 2006 in December (still shown) these have all been well exceeded by the actual figures also shown.


----------



## gurramok

Countrywide drops below, randomly selected
*Santry*:
July 510k 
NOW 490k [broken link removed]

July 435k 
NOW 420k [broken link removed]

*Garristown, Co. Dublin*
July 895k 
NOW 855k [broken link removed]

*Castleknock, Dublin*
July 570k 
NOW 530k [broken link removed]

*Kerry*:
July 299k 
NOW 289k [broken link removed]

July 306k 
NOW 299k [broken link removed]

May 750k 
NOW 660k [broken link removed]  Sale Agreed

*Wicklow*:
July 310k 
NOW 305k Sale agreed [broken link removed]

*Westmeath*:
July 410k 
NOW 399k [broken link removed]

*Limerick*
July 300k 
NOW – 280k [broken link removed]
Sale agreed

*Waterford*:
July €1.5m 
NOW €1.325m [broken link removed]

*Mayo*:
July 170k 
NOW 165k [broken link removed]

July 280k 
NOW 250k [broken link removed]

July 190k 
NOW 180k [broken link removed]

*Kildare*
July 800k 
NOW 750k [broken link removed]

July 399k 
Now 389k [broken link removed]

*Cork*:
July 430k  
Now 390k [broken link removed]

*Galway*
July 410k 
NOW 390k  [broken link removed] 

*Cavan*
May 310k  
NOW 300k [broken link removed] Sale Agreed

*Offaly*
May 495k  
NOW 480k [broken link removed]


----------



## Sarsfield

Maine said:


> It probably should also be pointed out that they are a subsidiary of Bank of Ireland, a bank that has huge exposure to irish property


 
Not any more! BOI has sold Davy's to it's management.

http://www.rte.ie/business/2006/1101/davy.html


----------



## poormouth

undersupply said:


> The difference between irish and british sentiment is that the british public are aware that house prices can fall, having been stung in 1988/9, this helped them stave off a crash; this, and the fact that they have control over interest rates.
> Britain builds 200,000 units a year for 60 million,which is an undersupply, Ireland builds 90,000 for 4.5 million which is just crazy.
> British sentiment is against apartments and in love with conventional houses, the irish are very pro-apartment living.
> Sentiment is a very fickle thing, but once it changes, it changes for a long time. Ask anyone who bought dot-com shares what they think of the NASDEQ.


I would say one of the most important factors which has underpinned the UK housing market in the last while is the rapid growth in UK money supply. According to this link [broken link removed]
the UK M4 money supply is up 14.5 pct yr-on-yr the highest in 16 years. So a lot of 'liquidity' is still sloshing around the UK zone.


----------



## walk2dewater

poormouth said:


> I would say one of the most important factors which has underpinned the UK housing market in the last while is the rapid growth in UK money supply. According to this link [broken link removed]
> the UK M4 money supply is up 14.5 pct yr-on-yr the highest in 16 years. So a lot of 'liquidity' is still sloshing around the UK zone.


 
I would agree, Sterling M4 growth is notably much faster than euro or dollar.  BoE may surprise us with a hawkish stance in 2007 (don’t hold breath though)

Another factor, related to me by a good friend who is v senior at UBS London, is the petrodollar effect.  There is a seemingly endless appetite for houses in Chelsea etc. by City clients  The sort of demand that doesn’t care about downpayments or interest rates, the sort of demand that worries about having too much tied up in US$ bonds.


----------



## JohnBoy

the power of the city and the money that sloshes through it should never be underestimated. the UK press is talking of another record-breaking bonus year with some £8.8bn (yes that is billion) expected to be paid out. 4,200 people are in line for bonuses in excess of £1m according to the CEBR (Center for Economic & Business Research).


----------



## ajapale

This thread is for *"Current public sentiment towards the housing market?"*. Please post elsewhere if you want to discuss the state of the UK economy.


----------



## walk2dewater

Trophy houses in posh parts of London are status symbols owned by foreigners who, to lesser mortals, appear to all intents to “not care about the price”.  To a saudi oil prince a pad in Mayfair is equivalent to a Maybach in the garage.  And he may only ever spend a few nights in the place.

[Note that these people are completely absence in Dublin market]


----------



## beattie

Check out this link to see how the slowing market is being discussed on Irelands most popular website. Doesn't get much bigger than this. Luckily for this vendor there is an auctioneer willing him/her out....  
(check out the reply)

http://www.daft.ie/discussions.daft?dcn[discussion_id]=87300


----------



## Bumble

Interesting, Beattie - Jeez, that's a bad scene alright - 4 viewings in 4 months! 

I'll be awaiting that auctioneer's 'expected pick up in the New Year' with interest .....although even if this is possible, with the rising everything (interest rates, fuel costs, childcare, etc.), I think vendors like Joanne will still fail to achieve current prices - people simply won't be able to afford to borrow as much - and that's with 100% maxed-out 40-year jobbies.

Prices aside, it'll be interesting to see how the inventory goes in the New Year, too - it's rising relatively quickly according to the  graphs......looks like a growth of about 1000 properties in the last week, nationwide.


----------



## macbri

Interesting report from Bank of Ireland this morning predicting 95-100k houses built this year(on rte website) which states is five times the European average 26 per 1000

To me this is the most fundamental reason 4 a crash both house wise & economically-this isn't sustainable given that we Ireland already has 275k vacant properties


----------



## macbri

As an aside,I have been tracking the rental/sale market in Dundalk since September(market I know as originally from that area).

On rental side,rents have dropped average $100 pm in last 2 months and there still not renting(easy to track as usually only 40-50 properties to rent in Dundalk on daft)

No corresponding drop in sale prices in Dundalk but same properties appearing now as in september only difference this week inventory has increased by 30%(96 today)

My guess this is been replicated across Ireland.

Rents are definately dropping at least 10% in Dundalk and to be honest are at 98 levels-1 3 bedroom advertised for 600pm with average 750pm.


----------



## plaudit

beattie said:


> Check out this link to see how the slowing market is being discussed on Irelands most popular website. Doesn't get much bigger than this. Luckily for this vendor there is an auctioneer willing him/her out....
> (check out the reply)
> 
> http://www.daft.ie/discussions.daft?dcn[discussion_id]=87300


 
The great white elephant of stamp duty being abolished is being touted again. Over the last 10 years how often did we see the market slump for many months due to speculation about a possible tax change - never I'd say.

People like "Joanne" could be in serious trouble. They paid top whack for their upgrade home and now their current property is falling in value. I'd hate to be caught with 2 houses falling at the same time, when the sale of one is supposed to finance the sale of the other.


----------



## Maine

plaudit said:


> People like "Joanne" could be in serious trouble. They paid top whack for their upgrade home and now their current property is falling in value. I'd hate to be caught with 2 houses falling at the same time, when the sale of one is supposed to finance the sale of the other.


 
This could one of the great changes going forward in the market place - the absolute necessity to sell your own property first before you buy the next one. The ease over the past decade at which houses could be sold without delay has lulled some people. "Joanne" could easily be looking at a very stressful end to the year and beginning to the new one.

Also the very strong likelihood of an interest increase in December and she is also at the mercy of euro inflation figures which in Jan Feb could point to further increases - may get difficult.


----------



## whizzbang

Did anyone hear the report on Newstalk this morning about the Bank of Ireland report saying prices will have risen 17% by the end of this year? The report was introduced by saying "Prices are still soaring" or something to that effect. Is it just me or have prices already risen roughly 17% this year? and so if theya re still 17% by year end they are just admitting there will be no price increases until then? They were also saying there be a slight decline in the rate of price increases next year, down to 4% to 6%. 17% down to 5% doesn't sound like a slight decline to me!

One other thing, a few stores later they had people on saying "Don't assume house prices in eastern Europe will rise, they do not have the demographics we do". Are the VIs now trying to scare people out of foreign investment while trying to pump up Irish investment?

Before I got the impression the local EAs and foreign investment companies were getting on fine, now they seem to have turned on each other. Has the beast started to eat itself?


----------



## phoenix_n

plaudit said:


> The great white elephant of stamp duty being abolished is being touted again. Over the last 10 years how often did we see the market slump for many months due to speculation about a possible tax change - never I'd say.


 
So true. The erosion of affordability for FTB's, the exodus of investors, the risk of capital depreciation, rising interest rates has quenched the fire with which the market had made earlier extraordinary gains. Its nothing to do with the stamp duty confusion and we can only expect to see an even greater supply on the market in January with heavy discounting for those that need to offload.


----------



## topman

"Bank of Ireland has again revised its predictions for house price inflation this year, saying the market is continuing to defy expectations. 
In its latest quarterly analysis, the bank says it expects an annual price rise of 14% for 2006, up from 12% in the last review and 9% in the previous one.

However, it also says it expects price rises to slow considerably to just 3% next year, mainly due to higher interest rates.

Bank of Ireland says record numbers of houses are currently being built in Ireland, but prices are continuing to go through the roof due to strong employment growth and unprecedented levels of immigration."

This report comes from Unison. There is no doubt that there is a slow down but over the year its still very impression growth.


----------



## Calina

topman said:


> This report comes from Unison. There is no doubt that there is a slow down but over the year its still very impression growth.



The lack of honesty is breathtaking though. The problem with housing price growth is it is coming with debt growth. And no one really wants to admit it. The point is this: as long as we have "impressive" house price growth, we will have "impressive" debt growth. It is the shadow side of the coin. 

The problem I have is that untrammelled housing price inflation is not underpinned by an inherent increase in actual value. We are not earning more money to pay for these things, we are just borrowing more. It's just numbers at that level. For the banks it's good because it brings with it additional interest. For the rest of us, it's shockingly naive. 

It's a bit depressing that Irish people in general have such sadly lacking analytical skills that they take headlines of this nature at face value.


----------



## howstrange

topman said:


> "Bank of Ireland has again revised its predictions for house price inflation this year, saying the market is continuing to defy expectations.
> In its latest quarterly analysis, the bank says it expects an annual price rise of 14% for 2006, up from 12% in the last review and 9% in the previous one.
> 
> However, it also says it expects price rises to slow considerably to just 3% next year, mainly due to higher interest rates.
> 
> Bank of Ireland says record numbers of houses are currently being built in Ireland, but prices are continuing to go through the roof due to strong employment growth and unprecedented levels of immigration."
> 
> This report comes from Unison. There is no doubt that there is a slow down but over the year its still very impression growth.



Yeh but how much had house prices increased by the end of May this year??? Im sure it was well over 10% at least if not more. Id say there has been very little growth since then. This was mentioned before on this thread that when things started slowing all you would hear would be the overall yearly figure. When things were booming, every month you would hear how much prices have gone up for the month! I dont think anyone can argue that house porices have stalled over the last 4/5 months.


----------



## topman




----------



## Duplex

Calina said:


> The lack of honesty is breathtaking though. The problem with housing price growth is it is coming with debt growth. And no one really wants to admit it. The point is this: as long as we have "impressive" house price growth, we will have "impressive" debt growth. It is the shadow side of the coin.
> 
> The problem I have is that untrammelled housing price inflation is not underpinned by an inherent increase in actual value. We are not earning more money to pay for these things, we are just borrowing more. It's just numbers at that level. For the banks it's good because it brings with it additional interest. For the rest of us, it's shockingly naive.
> 
> It's a bit depressing that Irish people in general have such sadly lacking analytical skills that they take headlines of this nature at face value.


 
I agree, we are approaching debt saturation.  This phase of our economic growth is based on unsustainable debt growth.


----------



## ajapale

topman said:


>



Topman,
Please stay on topic.


----------



## Arthur Daley

It was so quiet here for a few days I thought the bears had gone into winter hibernation........... 

As far as the BOI report on Newstalk it seems it's just Mad Mclaughlin trying to ramp things up again. It is strange indeed that a 17% increase in 2006 could 'slightly decline' to 2-3% in 2007.

The piece on eastern european house prices was from NCB stockbrokers. As people generally comment (wrongly I think) that stockbrokers are always trying to talk down the property market to sell equities, I don't think anything can be read into to this in terms of a tactic by VIs to shore up the market here by stopping foreign property purchases. I think it was a straight bit of economic analysis borne in reality. I know I know... we're not used to a bit of straight talking about property investment in Ireland in recent years.


----------



## Afuera

Calina said:


> The problem with housing price growth is it is coming with debt growth. And no one really wants to admit it. The point is this: as long as we have "impressive" house price growth, we will have "impressive" debt growth. It is the shadow side of the coin.



This is a very good point. The level of mortgage debt in Ireland is currently over 100 billion euros (and growing). At 4% interest rates the cost to service this debt is 4 billion euros annually....
Every percentage increase of the interest rates means another billion euros gets sucked into this black hole annually.


----------



## Bedsit

An article in today's Independent mentioned a link to this interesting report by Jerry Sexton of the ESRI.


----------



## DoNotPassGo

macbri said:


> Interesting report from Bank of Ireland this morning predicting 95-100k houses built this year(on rte website) which states is five times the European average 26 per 1000
> 
> To me this is the most fundamental reason 4 a crash both house wise & economically-this isn't sustainable given that we Ireland already has 275k vacant properties



I've added a track of new homes/developments as reported at daft.ie on http://daftwatch.atspace.com/. I'm not sure how useful it is, since one entry might be a single house while another is a whole estate. If the numbers keep climbing, though, it would suggest either that there are more new developments being built, or that they're taking longer to sell.

Already, the primary graph of homes for sale shows a steady daily climb. In one week (including a bank-holiday weekend), the for-sale backlog has risen 3.5%. For dramatic effect and exaggeration, at this rate there'll be 136,000 homes for sale this time next year


----------



## whathome

Timber Mill - Artane

Second price drop on this *new develeopment*

Were 399,000 in August...
Dropped to €395,000 in early October
[broken link removed]

Now reduced to €380,000
[broken link removed]


----------



## plaudit

€1700pm to mortgage them Artane apartments though. They would be cheap at half the price.


----------



## phoenix_n

plaudit said:


> €1700pm to mortgage them Artane apartments though. They would be cheap at half the price.


 
So for 1700 a month you get a depreciating asset which will start costing you 1800 a month next year.

Where is the logic.


----------



## whizzbang

Arthur Daley said:


> I think it was a straight bit of economic analysis borne in reality. I know I know... we're not used to a bit of straight talking about property investment in Ireland in recent years.



good point, it definitly caught me off guard


----------



## robd

phoenix_n said:


> So for 1700 a month you get a depreciating asset which will start costing you 1800 a month next year.
> 
> Where is the logic.


There's no logic.

Considering Daft has 2 for rent at 1100 and 1350 (way to high IMO). they're worth (at 7% Gross Yield) between:

  205k and 231k

Yep I'm sure there's arguments as to why they're worth more.  IMO that's what they are worth.  I certainly wouldn't pay more than 250k even to live in this as my PPR.


----------



## phoenix_n

Bedsit said:


> An article in today's Independent mentioned a link to this interesting report by Jerry Sexton of the ESRI.


 
_"say the economy is not growing, but inflating"_

Interesting take on our 'growing' economy.


----------



## whathome

Southmede - Dundrum

*New Development Price Drop*

2 Bed Apartments were €560,000


Now reduced to €495,000
[broken link removed]


----------



## Remix

whathome said:


> Southmede - Dundrum
> 
> *New Development Price Drop*
> 
> 2 Bed Apartments were €560,000
> 
> 
> Now reduced to €495,000
> [broken link removed]


 
Assume an investor who buys into the property hype bought one of these at €560k. With stamp duty and other expenses he is facing an immediate loss of €100k plus the possibility of subsidising a tenant.

Some might say hold longer term for capital appreciation ? At these freak price levels? Best of luck mate!


----------



## miju

topman said:


> However, it also says it expects price rises to slow considerably to just 3% next year, mainly due to higher interest rates.


 
so in other words Bank Of Ireland have admitted prices will fall in nominal terms next year

great bit of marketing , house price growth will slow to 3% but they'll still rise , shame they didn't meantion our current inflation figure though


----------



## gearoidmm

whathome said:


> Southmede - Dundrum
> 
> *New Development Price Drop*
> 
> 2 Bed Apartments were €560,000
> 
> 
> Now reduced to €495,000
> [broken link removed]





> Prices from €495,000.


 - from the website

I think that the 495,000 refers to one-bed apartments


----------



## whathome

gearoidmm said:


> I think that the 495,000 refers to one-bed apartments


 
nope - it refers to 2 bed apartments. It's the exact same advert as yesterday but with a lower price.


> For Sale by Private Treaty
> Asking Price: €495,000
> Type : Apartment
> Bedrooms : 2


 
Here's an AAM link listing the prices from Feb : http://www.askaboutmoney.com/showthread.php?t=22376


----------



## SteelBlue05

whathome said:


> nope - it refers to 2 bed apartments. It's the exact same advert as yesterday but with a lower price.


 
The ad states.."Southmede is a fantastic new development of 1, 2 & 3 bedroom apartments.......Prices from €495,000"

Sounds like 495 relates to 1 beds. Which does sound rather high for a one bed. Must be for 2 bed.


----------



## whathome

SteelBlue05 said:


> The ad states.."Southmede is a fantastic new development of 1, 2 & 3 bedroom apartments.......Prices from €495,000"
> 
> Sounds like 495 relates to 1 beds.


 
Well even if it does - it means that one beds dropped from €560,000 yesterday to €495,000 today. Either way it's a significant drop.
The advert hasn't changed - the price has.


----------



## phoenix_n

whathome said:


> Well even if it does - it means that one beds dropped from €560,000 yesterday to €495,000 today. Either way it's a significant drop.
> The advert hasn't changed - the price has.


 
Ok..........I phoned up to get the lowdown.

They had some cancellations so whilst they have a 2 bed for 560 and one for 580 they have now have a couple for 495 as contracts were returned.

Got the impression they were priced to sell...


----------



## whathome

phoenix_n said:


> they have now have a couple for 495 as contracts were returned.
> ....


 
So they are 2 beds! I've heard of a lot of cancellations on new developments lately - interested parties are happy to pay a booking deposit, not so happy to go through with the deal.

Interestingly, 2 beds in this development started at €520,000 in February so these "priced to sell" apartments at €495,000 are now cheaper than Feb prices.


----------



## Eirmail

whathome said:


> So they are 2 beds! I've heard of a lot of cancellations on new developments lately - interested parties are happy to pay a booking deposit, not so happy to go through with the deal.


 
Still a crazy amount of money for a depreciating asset that might make a 2.5 percent return per year. Including stamp duty management fees etc..


----------



## phoenix_n

Eirmail said:


> Still a crazy amount of money for a depreciating asset that might make a 2.5 percent return per year. Including stamp duty management fees etc..


 
Which is why the smart money has already left.


----------



## plaudit

So if I had put down a booking deposit a while ago for €560K I could cancel the booking, and then buy it again for €495?

How much is a booking deposit, about €6K?


----------



## Calina

plaudit said:


> So if I had put down a booking deposit a while ago for €560K I could cancel the booking, and then buy it again for €495?
> 
> How much is a booking deposit, about €6K?




Shhhh - we don't want everyone to be trying that, now do we? We don't want any panic in the housing market because God knows, we're going to get the soft landing according to every estate agent and bank economist. Why rock the boat?


----------



## whathome

phoenix_n said:


> Which is why the smart money has already left.


 
Is this one near you phoenix_n?

Old Price : €520,000


New Price : €490,000
http://www.daft.ie/searchsale.daft?search=1&selected_agent=&id=104009&s[agent_id]=595&s[p]=rprqxuvs[broken link removed]


----------



## Eirmail

plaudit said:


> So if I had put down a booking deposit a while ago for €560K I could cancel the booking, and then buy it again for €495?
> 
> .


 
Or rent for another 12 months and buy it for less


----------



## phoenix_n

whathome said:


> Is this one near you phoenix_n?
> 
> Old Price : €520,000
> 
> 
> New Price : €490,000
> [broken link removed]


 
Yep! Pass it most mornings. Its still got a bit more to drop!

P.S. dont want to go off topic but i mentioned Bueno Aires as a good buy before and came across this article. Beware as it may make you pack up all and emigrate.

http://[FONT=Arial
Livin' the dream


----------



## BritLad

Surely for those looking to trade up (I am looking to do so, or invest in 2nd property), isn't a slowdown in the market a GOOD thing?

Some rough figures to make my point...Let's say I have a house of €300k and aspire for my next house to be around €500k. A 10% drop of house price would mean that the gap between the house has closed from €200k to €180k - A GOOD thing if you are trade-up, even if you've seen the asking price of you house drop by €30k because what you are buying has also dropped and by more. I guess the same logic would apply to growth reducing to zero (aspirational house is not getting further away from me), and not just actual reductions in value. Am I being dim?


----------



## Eirmail

BritLad said:


> Surely for those looking to trade up (I am looking to do so, or invest in 2nd property), isn't a slowdown in the market a GOOD thing?
> 
> Some rough figures to make my point...Let's say I have a house of €300k and aspire for my next house to be around €500k. A 10% drop of house price would mean that the gap between the house has closed from €200k to €180k - A GOOD thing if you are trade-up, even if you've seen the asking price of you house drop by €30k because what you are buying has also dropped and by more. I guess the same logic would apply to growth reducing to zero (aspirational house is not getting further away from me), and not just actual reductions in value. Am I being dim?


 
It can be good for trade ups but you have to time it right. If you buy a place you want to make sure a sale on your current place does not fall through. Otherwise you can be left with 2 properties losing value. Anyone who is investing in a second property is just stupid , these things are losing value! Put your money in a savings account and have a look at the property market in 12 months is what I say


----------



## gearoidmm

Dan McLaughlin this morning on Morning Ireland spoke about deteriorating affordability leading to a reduction in house price inflation.  However, he also said that investors make up an insignificant proportion of the market and therefore even if they exit the market it won't make a difference... only 40% of new houses bought by investors last year according to Sherry Fitz.

[broken link removed]


----------



## whathome

The advert claims that this fairview apartment is larger than the average studio. That hasn't stopped it getting cheaper!

Old price €260,000


New Price €245,000
[broken link removed]=


----------



## bearishbull

phoenix_n said:


> Yep! Pass it most mornings. Its still got a bit more to drop!
> 
> P.S. dont want to go off topic but i mentioned Bueno Aires as a good buy before and came across this article. Beware as it may make you pack up all and emigrate.
> http://nymag.com/guides/changeyourlife/16047/


I;ve been telling friends about Buenos Aires for years. Its dirt cheap but safe, with great culture and weather and very european. Im considering moving there and buying a property with cash in next ten years, once im still single. I'd work part time over there and live off a lump sum.


----------



## Arthur Daley

gearoidmm said:


> Dan McLaughlin this morning on Morning Ireland spoke about deteriorating affordability leading to a reduction in house price inflation. However, he also said that investors make up an insignificant proportion of the market and therefore even if they exit the market it won't make a difference... only 40% of new houses bought by investors last year according to Sherry Fitz.


 
This guy has been out of control for some time. Buy to let has been a large part of the lending market for the last 5-6 years, and if it fuelled shortage of supply on the way up why not on the way down? Even given his 2-3% prediction for growth in '07, if I can get 6% on deposit wouldn't I be better to invest there and disinvest out of property. Especially given the downside risk identified by the price falls here and the likelihood of ecb rises in '07.


----------



## phoenix_n

bearishbull said:


> I;ve been telling friends about Buenos Aires for years. Its dirt cheap but safe, with great culture and weather and very european. Im considering moving there and buying a property with cash in next ten years, once im still single. I'd work part time over there and live off a lump sum.


 
hey thats my dream.


----------



## whathome

JayDub said:


> Concerning the Daft price index, just received the following from Daft.
> 
> "What's interesting, and what you have probably noticed yourself, is that asking prices appear to have almost stopped increasingly completely since Q2 this year, as per the Daft.ie index. The next Report will be out November 2nd and will cover up to September (final figures) and October (provisional figures),so keep an eye out for the latest!"
> 
> I for one am looking forward to this report.


 
Isn't there a daft report due out today?


----------



## beattie

whathome said:


> Isn't there a daft report due out today?


 
It should be out, usually it is leaked as well a few days beforehand so maybe there is bad news coming.......


----------



## robd

I've just seen on David McWilliams website ( http://www.davidmcwilliams.ie/  ) that he's scheduled for interview on the Gerry Ryan show tomorrow (3rd November).

Given that Gerry is regarded as quite bullish re Irish Property and known for throw away comments along the lines of "Sure we all know it can never go down ..." it's interesting that he has on one of the original uber bears.  Perhaps he's turning bearish ???

Anyway IMO the show has a fare bit of old influence over the common man.


----------



## random2006

robd said:


> I've just seen on David McWilliams website ( http://www.davidmcwilliams.ie/  ) that he's scheduled for interview on the Gerry Ryan show tomorrow (3rd November).
> 
> ...
> 
> Anyway IMO the show has a fare bit of old influence over the common man.



David McWilliams is also starting a new TV show on RTE next week so its also a way of advertising that!! From the trailers I think he is going to be taking a very - we only have construction and we need something more - approach to the program which may alert people to the unhealthy reliance on the construction and property markets.


----------



## whathome

Eunan King from NCB stockbrokers was interviewed on the RTE news at 6. He was talking about an NCB report on the European population outlook to 2020. He highlighted the young demographic profile for Ireland compared with the rest of Europe. Interestingly he mentioned that the current baby boom is smaller than the 1970-1980 one. He also said that given inward migration and the young population, he expects demand for house completions to run at 65,000 to 2015.

That means that based on NCB projections, we currently have an annual over-supply of 35,000 homes. Bank of Ireland today released a report saying that completions could hit 100,000 this year. If the current rate of building continues, who’s going to buy the surplus 35,000 units built annually?

Higher interest rates and an over-supply of new property are really going to put a negative squeeze on the market.


----------



## sunrock

highlighting an aspect of our demographic profile saying we have a lot of people under 15s__future tax payers
i remember in the 80s__our politicos were saying young people were our greatest asset even as they all emigrated 
its just soothing noises and of course our leaders and vi s couldnt care less about young people
now they are also saying we will have more immigrants_very handy for landlords who need rentersbut maybe not so good for low wage irish workers
if immigrants were the solution why not let everyone from africa or india claim asylum here  so all our unoccupied houses will be full of renters
the ensuing full occupancy will cause higher house prices and we will perpetuate our boom
simple really


----------



## ajapale

Sunrock,
If you wish to contribute to discussions or debates in AAM please formulate full sentences which have correct punctuation. Your post above does not have a singe capital letter, full stop or comma. It does however have several underscores. Such posts are nearly impossible to interpret.
aj



sunrock said:


> highlighting an aspect of our demographic profile saying we have a lot of people under 15s__future tax payers
> i remember in the 80s__our politicos were saying young people were our greatest asset even as they all emigrated
> its just soothing noises and of course our leaders and vi s couldnt care less about young people
> now they are also saying we will have more immigrants_very handy for landlords who need rentersbut maybe not so good for low wage irish workers
> if immigrants were the solution why not let everyone from africa or india claim asylum here so all our unoccupied houses will be full of renters
> the ensuing full occupancy will cause higher house prices and we will perpetuate our boom
> simple really


----------



## sunrock

Yes, you re   right.
Point taken.


----------



## Sarsfield

An apartment in the block I live in has just dropped from €395K to €381K. It's 4 weeks on the market today.

In the 4 and a half years I've lived here, that's the first drop I've seen.

That price will take me back above 50% LTV  My NIB LTV mortgage pack is in the post. I'd better get that valuation done pdq


----------



## CN624

From today's Indo:


_WHEN it comes to investing in residential property, the old line about JP Morgan and the shoeshine boy has been trotted out more than once. 
Nevertheless, when RTE's new daytime chat show, Seoige & O'Shea, features a 26-year-old woman who intends to* buy four properties a year and retire by the age of 30, *it once again emphasises our tenuous grip on reality when it comes to believing that property is a one-way bet. 
_
Did anyone get to watch the young ladys get-rich-quick scheme?


----------



## macbri

I don't get the demographics factor in relation to Ireland.
Ireland has aged in the last 10 years due to low birth rate and ageing of generation X.
Average age is 35 which is same as Australia,Uk and 15% lower than Germany which has highest demographic profile in EEC.

Again,where is the demand going to come from when we are building houses at 5 times the EEC average with close to 300k vacant properties?


----------



## whathome

How the market has changed since Spring this year.

This piece in the property section of the Independent displays a desperate attempt to find something positive in the market but ends up listing a rake of price drops!

http://www.unison.ie/irish_independent/stories.php3?ca=303&si=1716912&issue_id=14839

They mention a house in Rathfarnham that *might *actually achieve the asking price!!! Lisney's in Terenure are hopeful anyway 

There's an attempt to spin price drops as an opportunity to pick up a bargain - with a Moore street style "Anyone else now for the last of the cheap houses!" as if there's still a few with reduced prices just waiting to be snapped up by some unfortunate buyer. While the rate of falling prices has actually increased.



> However there are still a number of residential properties whose asking prices have been reduced.


----------



## Bedsit

A friend of mine who bought an investment property last year was thinking of selling it up till a few weeks ago as he felt that the market may be turning. However yesterday when I spoke to him he had made an about turn and said that he would wait another year before selling at the very least. His two supporting arguments were that it was unlikely the immigrants were going to leave and secondly he had found that the price of some apartments in Ashbourne had gone up in the past few months. He was also hoping for a change in the stamp duty bands so that when he went to sell his apartment would be exempted from the same. 

Also I was chatting to my local barber yesterday and he was of the same opinion that the Poles, Latvians etc. would not leave; instead they would start having families in Ireland and buy houses.

One quick question has anyone tracked asking price declines in Ashbourne?


----------



## phoenix_n

whathome said:


> How the market has changed since Spring this year.
> 
> This piece in the property section of the Independent displays a desperate attempt to find something positive in the market but ends up listing a rake of price drops!
> 
> http://www.unison.ie/irish_independent/stories.php3?ca=303&si=1716912&issue_id=14839
> 
> They mention a house in Rathfarnham that *might *actually achieve the asking price!!! Lisney's in Terenure are hopeful anyway
> 
> There's an attempt to spin price drops as being an opportunity to pick up a bargain - with a Moore street style "Anyone else now for the last of the cheap houses!" as if there's still a few with reduced prices just waiting to be snapped up by some unfortunate buyer. While the rate of falling prices has actually increased.


 
That was a strange article. It mentioned many examples where the asking price has decreased but will still had an air of optimism.

But was interesting to note that the fact that prices are decreasing (asking prices anyhow) is now in the public domain.


----------



## Savvy

Heard Jim Power(Friends First) on Morning Ireland this morning, he was  saying that interest rates would reach at least 4% during next year.


----------



## Gwynston

*
ECB confirms rates will rise next month
*http://www.unison.ie/irish_independent/stories.php3?ca=185&si=1716859&issue_id=14839



> THE European Central Bank confirmed yesterday that interest rates will rise next month, and left the door open for more increases next year.
> One leading analyst is now forecasting a peak of 4.25pc for rates in 2008, as the eurozone economy continues to perform strongly.
> As expected, the ECB left rates unchanged at 3.25pc at its meeting yesterday.


Heard mention of this on the late TV3 news last night accomponied by a bit of VI spin on how much house prices have gone up this year. Average is over €500k in Dublin now. Not sure where they got their figures from...


----------



## Gwynston

*
3bn stamp duty haul puts Cowen on the spot
*http://www.unison.ie/irish_independent/stories.php3?ca=9&si=1717031&issue_id=14839


> [FONT=Verdana, Arial]*Opposition to push for Budget action as house tax surges 36pc*
> 
> CONTROVERSIAL stamp duties have now raised more than €3bn this year, new figures show.
> That puts Finance Minister Brian Cowen on course for a bumper Budget next month - without any need to borrow.
> But it will also heighten pressure on the Government to do something about the escalating burden the stamp duty imposes on house buyers - especially as interest rates fuel higher repayments.
> Tanaiste and PD leader Michael McDowell sparked controversy when he said the Government did not need all the stamp duty revenue.
> With €3bn already in the coffers from the tax, it is certain to be one of the central issues leading up to next month's Budget.
> However, Mr Cowen has already indicated he will do nothing on stamp duty this time round - but the Opposition will seize on these latest figures to step up the pressure for action of some sort.
> Mr McDowell's comments have been blamed, in part, for the slowdown in house sales as buyers wait to see what will happen in the Budget.
> [/FONT]


 God help us if they screw with Stamp Duty in the budget....
[sorry for the double post]


----------



## phoenix_n

Gwynston said:


> *3bn stamp duty haul puts Cowen on the spot*
> http://www.unison.ie/irish_independent/stories.php3?ca=9&si=1717031&issue_id=14839
> God help us if they screw with Stamp Duty in the budget....
> [sorry for the double post]


 
The stamp duty will not be changed.......guaranteed.


----------



## Savvy

Phoenix_n,
Unless you are Brian Cowen or Bertie Ahern posting incognito then you can never say never.


----------



## phoenix_n

Savvy said:


> Phoenix_n,
> Unless you are Brian Cowen or Bertie Ahern posting incognito then you can never say never.


 
Indeed. But the man has said he will not and any other talk is just speculation by EA's and minor political parties.


----------



## whathome

Gwynston said:


> God help us if they screw with Stamp Duty in the budget....


 
I think it would be a good thing to abolish stamp duty for FTB's.

Developers wouldn't have the cosy competitive advantage they currently enjoy attracting FTB's. Even if there was some slight short-term upward pressure on prices of second-hand homes, it will be quickly hammered down by rising interest rates. It would also mean that the price of new developments would have to fall in order to keep attracting FTB's.


----------



## phoenix_n

whathome said:


> I think it would be a good thing to abolish stamp duty for FTB's.
> 
> Developers wouldn't have the cosy competitive advantage they currently enjoy attracting FTB's. Even if there was some slight short-term upward pressure on prices of second-hand homes, it will be quickly hammered down by rising interest rates. It would also mean that the price of new developments would have to fall in order to keep attracting FTB's.


 
I would disagree. Stamp duty is not the problem. Its the inflated house prices. Lets say A earns 60K. Will be able to get a mortgage of around 300K. Saved deposit of 30K. Now That should be satisfactory to buy a property without needing extra borrowings from parents or a reliance of a second income from a partner. That means the average price for a starter home should be around the 317 mark. 

And dont forget that the above example still implies that A takes out a maximum mortgage rather than a comfortable mortgage.


----------



## Dreamerb

whathome said:


> Developers wouldn't have the cosy competitive advantage they currently enjoy attracting FTB's. Even if there was some slight short-term upward pressure on prices of second-hand homes, it will be quickly hammered down by rising interest rates. It would also mean that the price of new developments would have to fall in order to keep attracting FTB's.


 
Or, better yet, developers would have to provide tangible benefits to purchasing new build - higher build standard, noise insulation (I think this has to be one of the biggest issues for buyers of new houses / apartments), more energy efficient, environmentally friendly. 

The building boom has generally seen the quality of the housing stock fall, and a good deal of that is fuelled by the new market being composed of a large proportion of FTBs who have little choice, and investors who don't have to live in them.


----------



## Calina

phoenix_n said:


> I would disagree. Stamp duty is not the problem. Its the inflated house prices. Lets say A earns 60K. Will be able to get a mortgage of around 300K. Saved deposit of 30K. Now That should be satisfactory to buy a property without needing extra borrowings from parents or a reliance of a second income from a partner. That means the average price for a starter home should be around the 317 mark.
> 
> And dont forget that the above example still implies that A takes out a maximum mortgage rather than a comfortable mortgage.



The last time that stamp duty for FTBs was repraised, there was a fairly instantaneous jump in house prices as money which would have gone to the government went to vendors instead. 

Secondly, 60K is double the average salary. If you have to be earning double the average salary to get a starter home along with a maxed out mortgage, there is something seriously wrong. However, to admit that would be also to admit that house price inflation over the past three or four years was unrealistic and had no basis in actual added real value.

I'm sick to the teeth of people looking at ways to give people more money to buy houses. It is a cosmetic measure. The truth is that houses are far, far too expensive. Prices need to be addressed, not access to money, cheap/tax/government/rebate/low interest rates wise.


----------



## askalot

Any reduction of stamp duty would be mad. They should increase stamp duty for investors and CGT on the sale of investment/holiday homes.


----------



## micmclo

I finally managed  to read the whole thread 
 A few hours here and here and it took me three weeks

So here’s my first post
I have to disagree with some posters calling for punitive taxes on people who hold onto landbanks.
My father struggled for years to make a living on our farm in Tipperary but suddenly he’s a paper millionaire.
It’s the best development site in our area and valued at over €4 million as it’s zoned for residential development.
But it won’t be sold until the M7 to Limerick is built as this can only increase its value to Limerick commuters who wish to commute to Limerick but live in a beautiful area beside Lough Derg. Leave aside thoughts of a crash for now. 

So you could say why isn’t the land sold at agricultural prices so purchasers get can cheap and affordable homes.
I’m sure most posters would support calls for the end of land speculation as it could decrease the price of housing to more reasonable levels.

Just remember, that you may curse the property developers who make millions from this building boom but it has also affects farmers on low incomes in a positive way.
I’m hoping for it to stay stable for three more years and then I can collect my inheritance. I accept it can drop and I’ll be reading this thread with interest as it’s very informative.

Like everyone here I was pretty bearish as everyone says the smart money has left the Irish property scene.
This may be true but is everyone here correct and Sean Dunne and Bernard McNamara wrong?
Everyone here has an opinion but you have to respect these two businessman who backup up their beliefs with hundreds of millions.


----------



## room305

CN624 said:


> From today's Indo:
> 
> 
> _WHEN it comes to investing in residential property, the old line about JP Morgan and the shoeshine boy has been trotted out more than once.
> Nevertheless, when RTE's new daytime chat show, Seoige & O'Shea, features a 26-year-old woman who intends to* buy four properties a year and retire by the age of 30, *it once again emphasises our tenuous grip on reality when it comes to believing that property is a one-way bet.
> _
> Did anyone get to watch the young ladys get-rich-quick scheme?



Is there a link for this article?


----------



## whathome

Calina said:


> I'm sick to the teeth of people looking at ways to give people more money to buy houses. It is a cosmetic measure. The truth is that houses are far, far too expensive. Prices need to be addressed, not access to money, cheap/tax/government/rebate/low interest rates wise.


 
Abolishing stamp duty for FTB's won't harm the market.  Removing the bands takes away any notion of a target for prices.  Of course some money will go to vendors instead of the government but because prices are not rising anymore, the effect will be minimal.  The stamp duty tax take from FTB's is tiny, mainly because they're all attracted to new developments.   You're right about it being a cosmetic measure, that's why it won't affect the market in a big way.


----------



## Arthur Daley

Calina said:


> I'm sick to the teeth of people looking at ways to give people more money to buy houses. It is a cosmetic measure. The truth is that houses are far, far too expensive. Prices need to be addressed, not access to money, cheap/tax/government/rebate/low interest rates wise.


 
Agree, various VIs keep coming up with another wheeze to keep the game rolling, like some drunken gambler in a Vegas casino at 4am trying to play their way out of trouble. Sometime, not necessarily in the election year of '07, a bust must happen. If this market was more efficient an adjustment back to reality would have happened years ago. But the VIs have such a grip on the public concious not to allow it happen easily or I think quickly. If it wasn't for the external interest rate factor we wouldn't even see the calming of prices we are seeing.


----------



## poormouth

micmclo said:


> I’m hoping for it to stay stable for three more years and then I can collect my inheritance. I accept it can drop and I’ll be reading this thread with interest as it’s very informative.


I think this is another example where the property obsession has warped peoples thinking. I would be in the same boat as micmclo i.e. stand to benefit from a small farm inheritance in the west of Ireland, but never would consider it as a one-way street to riches and would only consider selling as a last resort.  In fact I'm kind of hoping the prices will settle back down, since the escalation prices is making a lot of the small-holders trigger happy seeing as how sites / houses have now become the most valuable cash-crop. This has already lead to a former rural farming area beginning to resemble a suburb. How beautiful will the  area beside Lough Derg be when it's packed with houses


----------



## KarlK

Does anyone here know what the effect of a fall in Stamp Duty on house prices for FTBs would be? According to basic economics, the burden of the tax is shared between the supplier and the purchaser depending on the price elasticities of demand and supply. Where supply is severely constrained, the tax is paid entirely by the supplier (the builder). Where demand is insensitive to price (such as cigs) the price is paid by the consumer. Supply in the housing market is constrained by planning regs and demand is not limitless as people can rent, or live with family. So this would seem to indicate that much of the stamp duty burden is paid by builders. Any thoughts?


----------



## whathome

KarlK said:


> So this would seem to indicate that much of the stamp duty burden is paid by builders. Any thoughts?


 
Builders don't come into the equation...owner-occupiers of new houses/apartments are exempt from stamp duty, provided that the area of the house or apartment does not exceed 125 sq. metres.

However you are correct about the burden being shared between supplier and purchaser. Supplier in this case being the vendor of a second-hand property.  Abolishing stamp duty for FTB's would make second hand property more attractive and would put some negative pressure on new developments.


----------



## conor_mc

whathome said:


> Abolishing stamp duty for FTB's won't harm the market. Removing the bands takes away any notion of a target for prices.


 
While I agree with you that removing the bands removes the targets, you also have to take into account that currently the market can bear house price + stamp duty. Removing stamp duty means house prices move up to what the market can bear.

Now throw into the mix that the extra 3/5/7.5% stamp duty can now be _borrowed_ (as opposed to saved by buyer when it was stamp duty) and where do prices head?

The danger here is that it kickstarts another phase of irrational exuberance. If anything, SD should only be removed in a stable market, not at a time of mania.


----------



## phoenix_n

whathome said:


> Isn't there a daft report due out today?


 
I thought it was due out on the 5th.


----------



## whathome

conor_mc said:


> Now throw into the mix that the extra 3/5/7.5% stamp duty can now be _borrowed_ (as opposed to saved by buyer when it was stamp duty) and where do prices head?


 
I'm talking about abolishing it for FTB's only, not the entire market.  FTB's currently don't pay much stamp duty anyway.  The positive effect on second-hand property will be offset somewhat by the negative effect on new developments.


----------



## Arthur Daley

phoenix_n said:


> I thought it was due out on the 5th.


 
It'd be nice to bury it on a sleepy Sunday. 

While the stats are being prepared to start bringing the bad news to the massses, I expect a fightback to begin and a shutdown of supply by the VI's. We should see layoffs of construction workers, a halt to residential land rezoning, and planned new starts never get beyond the site clearing stage.


----------



## Glenbhoy

phoenix_n said:


> Indeed. But the man has said he will not and any other talk is just speculation by EA's and minor political parties.


And Bertie is still in power why?  McDowell allowed Bert to stay on the condition that there would be stamp duty reform, which he can then crow about having brought about.  He needs to be able to show that he has some influence over FF policies or his party are finished and this is his only play.  
As for Cowan having said that there will be no change, indeed he probably hopes there won't as he can see the futileness of such a policy, but unfortunately he is not part of Berts kitchen cabinet and thus has little or no influence over what will happen.


----------



## Calina

Glenbhoy said:


> And Bertie is still in power why?  McDowell allowed Bert to stay on the condition that there would be stamp duty reform, which he can then crow about having brought about.  He needs to be able to show that he has some influence over FF policies or his party are finished and this is his only play.



Do you have a source for this, or is it just speculation on your part? The point is, stamp duty reform/abolition as put forward by McDowell, insofaras I understood it, related to next government not next budget. Which leaves them nicely off the hook. 

The problem is if the PDs pull the plug on the current government they are finished anyway. There is no way back for them at the moment if they are a small party seeking election having walked out on Fianna Fail whose figures are currently improving. 

That being said - the problem is most sensible people (the ones who are living in houses which are their homes, as opposed to the ones who will desperately need to trade up from their "suitable for a professional couple one bedroomed starter homes" or investors looking to make a capital appreciation killing are fully aware that property, as things stand now, is too expensive for many current buyers. They don't see stamp duty as the problem, they see the prices as the problem. But they don't care so much because they have their homes.


----------



## Duplex

Tinkering with Stamp Duty during a market correction is nothing new.  The UK introduced The *Stamp Duty (Temporary Provisions) Act 1992* to giving first time buyers a 'stamp duty holiday' However  the market continued to fall.  

http://www.opsi.gov.uk/ACTS/acts1992/Ukpga_19920002_en_1.htm


----------



## Glenbhoy

Calina said:


> Do you have a source for this, or is it just speculation on your part? The point is, stamp duty reform/abolition as put forward by McDowell, insofaras I understood it, related to next government not next budget. Which leaves them nicely off the hook.


Nah, idle speculation on my part, you may be right of course, but I think FTB's (at least) will be let off the hook, it only costs about 80-90m and is cheap at the price.  They will also talk about how they're going to reform it next year, by making it fair and equitable etc.



Calina said:


> That being said - the problem is most sensible people (the ones who are living in houses which are their homes, as opposed to the ones who will desperately need to trade up from their "suitable for a professional couple one bedroomed starter homes" or investors looking to make a capital appreciation killing are fully aware that property, as things stand now, is too expensive for many current buyers. They don't see stamp duty as the problem, they see the prices as the problem. But they don't care so much because they have their homes.


A bit unfair there Calina, how many people under the age of 35 do you think could afford a home they're happy to stay in for the forseeable future??  The lack of availablity of such homes being a major factor in the decision to purchase the apartment in the city as opposed to the 3 bed semi in Carlow.


----------



## KarlK

whathome said:


> Builders don't come into the equation...
> ...However you are correct about the burden being shared between supplier and purchaser. Supplier in this case being the vendor of a second-hand property. Abolishing stamp duty for FTB's would make second hand property more attractive and would put some negative pressure on new developments.


OK, then that means that stamp duty is shared between vendor and purchaser. 

eg Say stamp duty is paid 66% by vendor and 33% by purchaser then consider a house with an untaxed market value of 300K
Stamp duty is 3%=9,000
Amount paid by vendor: 6K
Amount paid by purchaser 3K
House price after tax: 204K + 9K stamp duty

If we assume that most vendors go on to spend the proceeds of their sale on more property, this would indicate that eliminating stamp duty for FTBs would 

increase house prices for purchasers by more than half the value of the stamp duty (as most of the stamp duty burden prior to this was paid by the vendor in reduced house price)
increase the amount of cash available to the vendor to purchase a trade-up house.
reduce stamp duty take from FTBS
stimulate more transactions in the trade-up market (leading to more stamp duty revenue)
Maybe this is what they want to do.


----------



## whathome

KarlK said:


> eg Say stamp duty is paid 66% by vendor and 33% by purchaser then consider a house with an untaxed market value of 300K


 
FTB's don't currently pay stamp duty on property below €317,500 so the effect on the market from your example will be zero.

This gets back to my point - abolishing stamp duty for FTB's will have little effect in stimulating the market.
Builders and new homes estate agents will be hit as a key competitive advantage for new builds will be gone. 
With the current situation, private vendors are subsidising developers. Developers can currently charge a stamp-duty premium as their sales are exempt.


----------



## Calina

Glenbhoy said:


> A bit unfair there Calina, how many people under the age of 35 do you think could afford a home they're happy to stay in for the forseeable future??  The lack of availablity of such homes being a major factor in the decision to purchase the apartment in the city as opposed to the 3 bed semi in Carlow.



Very few and therein lies the problem.


----------



## somerset

An interesting link to help those considering the rent v's buy argument (a recurring topic in the sentiment of buyers in the property market I might add before i am moderated)

http://www.yourmortgage.com.au/calculators/rent_vs_buy/

In australia the property market is still on the way down, despite the negative gearing facility ( you can right off your investment property losses against your PAYE tax) ... dont think you can do that in Ireland


----------



## BigM

"Personal bankruptcies in Britain climbed to a record in the 3rd Q as surging house prices pushed consumers to take on more debt and rising interest rates reduced their ability to repay. Inidividual insolvencies rose 5.7% in the quarter - the highest since 1960 - according to UK govt"

That's a scary headline considering our own level of in-debtedness, even allowing for higher UK interest rates than ours.


----------



## conor_mc

whathome said:


> This gets back to my point - abolishing stamp duty for FTB's will have little effect in stimulating the market.


 
Fundamentally, you may be correct.

But in a market driven by sentiment this stands a good chance of keeping the party going, even if it just staves off the _perception_ of a slowdown on the horizon.


----------



## BigM

whathome said:


> With the current situation, private vendors are subsidising developers. Developers can currently charge a stamp-duty premium as their sales are exempt.


I think both Whathome and Calina are right:
SD-exemption on new homes was supposed to stimulate the building of new homes targetted at FTBs. That is no longer required, so either SD all FTB homes or none.
But it still doesn't address the fundamental issue that it is the increasing supply of cash/debt that has made prices reach these crazy levels where an above average earner cannot afford a FTB house.


----------



## whathome

conor_mc said:


> But in a market driven by sentiment this stands a good chance of keeping the party going, even if it just staves off the _perception_ of a slowdown on the horizon.


 
Any effect on sentiment will be short-lived, like a sandcastle close to the shorline - will be quickly washed away by the rising interest rate tide.  Interest rate increases have already wiped out any growth in the market, there's no way a piddly change in stamp duty will turn things around.


----------



## KarlK

whathome said:


> FTB's don't currently pay stamp duty on property below €317,500 so the effect on the market from your example will be zero.


 my mistake!



whathome said:


> This gets back to my point - abolishing stamp duty for FTB's will have little effect in stimulating the market.
> Builders and new homes estate agents will be hit as a key competitive advantage for new builds will be gone.
> With the current situation, private vendors are subsidising developers. Developers can currently charge a stamp-duty premium as their sales are exempt.


Any idea what average FTB prices are? or the split between second hand/ new build for FTBs?


----------



## miju

whathome said:


> If the current rate of building continues, who’s going to buy the surplus 35,000 units built annually?


 
some beermat maths here but wouldn't that equate to 35% if this years housing stock?

what was that figure again of the percentage investors make up of the market 40%????

stagnating prices means investors will dry up so that will most definitely cause an oversupply , isn't it funny how when the bulls try to use figures to "support" their outlook it usually highlights another fatal flaw


----------



## liteweight

I'm not sure if this has been said before on this thread but while speaking in the Oireachtas Bertie Ahearne stated that of the approx 3b collected in stamp duty, only 70m was paid by FTBs.  This surprised me. Thinking about it though, the 317K stamp duty exemption more or less only applies to second hand homes. Apart from the fact that a new build property has to be over 125sq.mts. before a liability arises, stamp duty is also only charged on the net value of the new build. A FTB, therefore, can afford to pay 317K plus 13.5% and still pay nothing in stamp duty. Perhaps the exemption limits should rise for second hand property only thus creating a more equitable state of play. Perhaps not.


----------



## liteweight

whathome said:


> Any effect on sentiment will be short-lived, like a sandcastle close to the shorline - will be quickly washed away by the rising interest rate tide.  Interest rate increases have already wiped out any growth in the market, there's no way a piddly change in stamp duty will turn things around.




Feeling poetic today are we? I agree with you.


----------



## whathome

liteweight said:


> I'm not sure if this has been said before on this thread but while speaking in the Oireachtas Bertie Ahearne stated that of the approx 3b collected in stamp duty, only 70m was paid by FTBs.


 
You're right, I saw that.  Listening to Bertie Ahern during that exchange in the dail gave me the impression that FTB stamp duty will be abolished.  He emphasised how little revenue it pulls in.


----------



## BigM

whathome said:


> Listening to Bertie Ahern during that exchange in the dail gave me the impression that FTB stamp duty will be abolished. He emphasised how little revenue it pulls in.


 
It's also a distortion of the FTB market so they can abolish it and Cowen can still argue that they're not _interfering_ - they're just _removing_ interference... so everyone's a winner


----------



## Eirmail

Arthur Daley said:


> It'd be nice to bury it on a sleepy Sunday.
> 
> While the stats are being prepared to start bringing the bad news to the massses, I expect a fightback to begin and a shutdown of supply by the VI's. We should see layoffs of construction workers, a halt to residential land rezoning, and planned new starts never get beyond the site clearing stage.


 

Laying off construction workers could be counter productive. Most of these would emmigrate to the UK or elsewhere to work .That would mean a lessening demand for housing. The VI's are in a catch22 situation.


----------



## room305

BigM said:


> It's also a distortion of the FTB market so they can abolish it and Cowen can still argue that they're not _interfering_ - they're just _removing_ interference... so everyone's a winner



If they simply move the bands, the opposition can get in plenty of soundbites about simply putting the extra money in the pockets of wealthy developers. This is a much harder thing to argue if the stamp duty is abolished for FTBs.

€70M is a tiny amount in the context of the budget and it may even prove self-financing if it stimulates the trader-upper market by allowing potential STBs to offload their current homes.


----------



## irlstu

Just spotted this while going for a stroll in Dun Laoghaire, seems that Sherry Fitzgerald are selling their own property!

Is this another sign that those on the inside are getting out?

The pink signs in the window are "wet paint" signs. Looks like they are scrubbing up to impress buyers!

Photo here


----------



## Arthur Daley

Would an estate agency own most of it's branches? I'd have expected they would be leased, as if the property market collapses they don't want to be totally exposed.


----------



## whizzbang

irlstu said:


> Just spotted this while going for a stroll in Dun Laoghaire, seems that Sherry Fitzgerald are selling their own property!
> 
> Is this another sign that those on the inside are getting out?
> 
> The pink signs in the window are "wet paint" signs. Looks like they are scrubbing up to impress buyers!
> 
> Photo here



"yes its a great time to buy... erm.. easpecially estate agencies!"


----------



## Eirmail

Arthur Daley said:


> Would an estate agency own most of it's branches? I'd have expected they would be leased, as if the property market collapses they don't want to be totally exposed.


 
You see the market hasn't collapse YET! An estate agency can afford to run the risk of selling at the very last minute as they are in the know.


----------



## liteweight

whathome said:


> You're right, I saw that.  Listening to Bertie Ahern during that exchange in the dail gave me the impression that FTB stamp duty will be abolished.  He emphasised how little revenue it pulls in.



I got the impression that he was trying to dismiss the opposition's argument, that FTBs are being prevented from buying because of the stamp duty, by citing the fact that very little was collected from FTBs anyway. The opposition would like to be seen as the knight in shining armour who stepped in to save the FTB from the dreaded tax, while in fact, very few have to pay it!

I think if stamp duty is abolished for FTBs, the builders will run amok with prices. At least in the secondhand market, people have some hope of gauging what is value for money but I'd imagine the abolishment of stamp duty would cause these prices to rise also.


----------



## whathome

liteweight said:


> I think if stamp duty is abolished for FTBs, the builders will run amok with prices.


 
Quite the opposite, without the stamp duty advantage over second hand property, builders would be forced to lower their prices to compete.


----------



## bearishbull

micmclo said:


> I finally managed to read the whole thread
> A few hours here and here and it took me three weeks
> 
> So here’s my first post
> I have to disagree with some posters calling for punitive taxes on people who hold onto landbanks.
> My father struggled for years to make a living on our farm in Tipperary but suddenly he’s a paper millionaire.
> It’s the best development site in our area and valued at over €4 million as it’s zoned for residential development.
> But it won’t be sold until the M7 to Limerick is built as this can only increase its value to Limerick commuters who wish to commute to Limerick but live in a beautiful area beside Lough Derg. Leave aside thoughts of a crash for now.
> 
> So you could say why isn’t the land sold at agricultural prices so purchasers get can cheap and affordable homes.
> I’m sure most posters would support calls for the end of land speculation as it could decrease the price of housing to more reasonable levels.
> 
> Just remember, that you may curse the property developers who make millions from this building boom but it has also affects farmers on low incomes in a positive way.
> I’m hoping for it to stay stable for three more years and then I can collect my inheritance. I accept it can drop and I’ll be reading this thread with interest as it’s very informative.
> 
> Like everyone here I was pretty bearish as everyone says the smart money has left the Irish property scene.
> This may be true but is everyone here correct and Sean Dunne and Bernard McNamara wrong?
> Everyone here has an opinion but you have to respect these two businessman who backup up their beliefs with hundreds of millions.


 
With all respect, your father bought the land to farm, not to make millions. Farmers have done well enough over last few decades in Ireland. Your father did nothing to earn the windfall increase in his land value, if his land was in a location where building homes was not feasible his land would be only worth a fraction of the 4million. 
The councils are the ones that made his land that valuable, not him. If he bought the land just for farming then how can he complain if he only gets agri rate for it?? If on the other hand he bought the land with a view to speculation as well as a bit of farming then he should be heavily taxed on the windfall profits. 
The restriction on development land/rezoning/dogdy corrupt planning has us in this precarious situation we find ourselves. Theres no natural shortage of land in ireland for development(we are only 4% urbanised compared to 10% in much of Europe) and its the artifical nature of restrictions that has caused prices to rise to highest in europe despite the long term health and fundamentals of the economy being less than rosy.

What the government and councils shoud do is rezone massive amounts of agricultural and industrial land so the market price of land would fall and the economy would benefit in the long term. As it stands high land prices just make us uncompetitive and moves wealth from young irish to old irish- we are ripping each other off!


----------



## liteweight

whathome said:


> Quite the opposite, without the stamp duty advantage over second hand property, builders would be forced to lower their prices to compete.



Why so? Do you not think if stamp duty was abolished for FTBs, then the secondhand property market would become a more viable option for some, creating competition for new builds?


----------



## whathome

liteweight said:


> Why so? Do you not think if stamp duty was abolished for FTBs, then the secondhand property market would become a more viable option for some, creating competition for new builds?


 
Yes - it would create competition against new builds, that's why builders would be forced to lower their prices to compete.


----------



## Arthur Daley

bearishbull said:


> Theres no natural shortage of land in ireland for development(we are only 4% urbanised compared to 10% in much of Europe) and its the artifical nature of restrictions that has caused prices to rise to highest in europe despite the long term health and fundamentals of the economy being less than rosy.
> 
> What the government and councils shoud do is rezone massive amounts of agricultural and industrial land so the market price of land would fall and the economy would benefit in the long term. As it stands high land prices just make us uncompetitive and moves wealth from young irish to old irish- we are ripping each other off!


 
Steady on, there'd be rioting in the tents at the Galway races with such bolshivism. 
I agree that there are artificial restictions on supply of zoned land, so we are far from a pure free market here, in the sense of commodities etc. This is what convinced me to delve in and buy in '05 after years of waiting for the collapse. It's also why I now believe in a fight back from the VIs and the big weapon they have is controlling the tap of supply.

Even if this is at the expense of some amateur specuvestors who can't rent properties to immigrant construction workers who have scarpered to the UK, this will be a price worth paying to prop up the whole ball game.


----------



## Eirmail

Arthur Daley said:


> . It's also why I now believe in a fight back from the VIs and the big weapon they have is controlling the tap of supply.
> 
> .


 
The VIs only have control of additional supply not the supply in general. Just say the supply of homes in Ireland is about 1.2 million and there are an additional 90,000 coming on stream every year.The VIs can only effect the additional suppy (the 90K) . There is a big difference  to an asset like this and a commodity like oil , where certain interests can infact control the supply.


----------



## BigM

Arthur Daley said:


> this will be a price worth paying to prop up the whole ball game.


you better watch out AD - I can hear the furious typing of the uber-bears already


----------



## room305

Arthur Daley said:


> I agree that there are artificial restictions on supply of zoned land, so we are far from a pure free market here, in the sense of commodities etc. This is what convinced me to delve in and buy in '05 after years of waiting for the collapse. It's also why I now believe in a fight back from the VIs and the big weapon they have is controlling the tap of supply.



In theory you are correct of course but in practice it works more like OPEC. To keep oil prices inflated they agree to choke supply but what happens? Members try to sneak excess supply onto the market relying on the other members to drop supply.

This is typical of the "boom-and-bust" cycle of property developers in the US. As demand for homes builds developers compete furiously with one another to saturate that demand, with no developer wishing to choke their output as it will only increase the number of units a competitor sells during the boom phase. Supply eventually saturates demand and prices start to fall but they still continue to build on existing banks and undercut prices rather than not finish developments. Eventually prices fall so much it is no longer feasible to continue to output at the same rate so developers stop building and start acquiring (now inexpensive) landbanks for the whole cycle to start again in the future. What scares everybody about the current US crash was the speculator led demand. Developers saturated this demand but since this demand was artificial it is now finding its way back onto an already saturated market pushing recovery way off into the future.

I have no fear of the VIs managing to choke supply because their own greed will work against them.


----------



## bearishbull

Eirmail said:


> The VIs only have control of additional supply not the supply in general. Just say the supply of homes in Ireland is about 1.2 million and there are an additional 90,000 coming on stream every year.The VIs can only effect the additional suppy (the 90K) . There is a big difference to an asset like this and a commodity like oil , where certain interests can infact control the supply.


 
Exactly, if they tried to cut building in half(to 50k houses) the economy would probably enter a recession then anyway. Theres too many people acting independently for a concerted effort, to restrict supply substantially, to suceed without collapsing construction industry.


----------



## liteweight

whathome said:


> Yes - it would create competition against new builds, that's why builders would be forced to lower their prices to compete.



I see that's what I meant too. Just read my original post and I wasn't very clear. Thought I'd mentioned that if stamp duty was taken away from new builds only that builders would run amok with prices.


----------



## whathome

liteweight said:


> I see that's what I meant too. Just read my original post and I wasn't very clear. Thought I'd mentioned that if stamp duty was taken away from new builds only that builders would run amok with prices.


 


liteweight said:


> I think if stamp duty is abolished for FTBs, the builders will run amok with prices. At least in the secondhand market, people have some hope of gauging what is value for money but I'd imagine the abolishment of stamp duty would cause these prices to rise* also*.


 
As you can see above, your original post indicates that you believed that prices for new builds would increase - note the last word in your post ... "also".

As I have pointed out - if stamp duty was abolished for FTB's, increased competition from second hand property will apply negative pressure to the pricing of new developments. New development prices will fall.


----------



## Arthur Daley

bearishbull said:


> Exactly, if they tried to cut building in half(to 50k houses) the economy would probably enter a recession then anyway. Theres too many people acting independently for a concerted effort, to restrict supply substantially, to suceed without collapsing construction industry.


The safety valve are the transient migrants who will soon move on to the uk etc. There is plenty of fat in this economy that can get trimmed before we get into real bust economics. Going back to even 50,000 houses in output is only going back the levels of a few years back.

My point is more that the tap of supply could prevent a collapse (say 20-50% price drops). Some VIs (think tds on doorsteps next year, lenders on the prudent side of things who are concerned with credit quality) may well be comfortable with the kind of 10-20% price falls you guys have been documenting already on this thread.


----------



## room305

Arthur Daley said:


> The safety valve are the transient migrants who will soon move on to the uk etc. There is plenty of fat in this economy that can get trimmed before we get into real bust economics. Going back to even 50,000 houses in output is only going back the levels of a few years back.
> 
> My point is more that the tap of supply could prevent a collapse (say 20-50% price drops). Some VIs (think tds on doorsteps next year, lenders on the prudent side of things who are concerned with credit quality) may well be comfortable with the kind of 10-20% price falls you guys have been documenting already on this thread.



There are currently three years worth of housing stock lying idle (at a record building rates). We also have a large amount existing supply being recycled back onto the market. All in the face of decreasing demand.

The beauty of the perfect storm conjured up is that as supply is decreased to cope with falling demand, it further depresses demand as migrant workers are laid off and seek employment on other shores.

To keep price drops within your price range they would need to drop supply to zero and probably start demolishing houses as well.


----------



## ajapale

Whats a VI?


----------



## Afuera

ajapale said:


> Whats a VI?



a Vested Interest... Estate Agents, builders, banks, etc.


----------



## bo se

room305 said:


> There are currently three years worth of housing stock lying idle (at a record building rates). We also have a large amount existing supply being recycled back onto the market. All in the face of decreasing demand.
> 
> The beauty of the perfect storm conjured up is that as supply is decreased to cope with falling demand, it further depresses demand as migrant workers are laid off and seek employment on other shores.
> 
> To keep price drops within your price range they would need to drop supply to zero and probably start demolishing houses as well.


 

What analysis is available on these 300k empty houses? e.g. 

how many are on the shannon (and similar) built for tax breaks?
how many are full of immigrants who are shy of forms?
how many are genuine holiday homes for people who enjoy and can afford a second home?
In my experience anyone with property for rent in cities and towns has no problem renting i.e. no suggestion of excess supply.


----------



## bo se

ajapale said:


> Whats a VI?


 

Vested interest I presume?


----------



## ajapale

Thanks, Are all _VI's_ bulls? In other words are there groups of people out there who have a vested interest in seeing the Irish Property Market go into reverse?


----------



## conor_mc

bo se said:


> What analysis is available on these 300k empty houses? e.g.
> 
> how many are on the shannon (and similar) built for tax breaks?
> how many are full of immigrants who are shy of forms?
> how many are genuine holiday homes for people who enjoy and can afford a second home?
> In my experience anyone with property for rent in cities and towns has no problem renting i.e. no suggestion of excess supply.


 

But stagnant rents for the last several years suggests there is no shortage of _housing_ in the country.... only an over-demand for houses to buy due to the lure of capital appreciation.


----------



## Eirmail

Arthur Daley said:


> Even if this is at the expense of some amateur specuvestors who can't rent properties to immigrant construction workers who have scarpered to the UK, this will be a price worth paying to prop up the whole ball game.


 

The amateur specuvestor will be able to rent out his property he will just have to drop the rent.


----------



## jpd

Yes but at some stage, they money invested in the house could be earning "real" (well almost real) money in a savings account earning 4% at no risk, other than inflation, or probably more in the capital markets (bonds & shares) over the next 5-10 years with more risk.


----------



## Afuera

ajapale said:


> Thanks, Are all _VI's_ bulls? In other words are there groups of people out there who have a vested interest in seeing the Irish Property Market go into reverse?



Can you think of any yourself?

The most obvious VIs do not want a reversal in the market. Builders want to keep on building, mortgage lenders want to keep lending, the government wants to keep on receiving tax receipts.


----------



## Eirmail

Afuera said:


> Can you think of any yourself?
> 
> The most obvious VIs do not want a reversal in the market. Builders want to keep on building, mortgage lenders want to keep lending, the government wants to keep on receiving tax receipts.


 
Kids who are still in school and future generations who are not even born yet have a vested interest in seeing cheaper property in the future.The main difference is that these groups aren't getting much airtime on the nations radio stations at the moment.


----------



## Marie

Arthur Daley said:


> The safety valve are the transient migrants who will soon move on to the uk etc. There is plenty of fat in this economy that can get trimmed before we get into real bust economics. Going back to even 50,000 houses in output is only going back the levels of a few years back.
> 
> My point is more that the tap of supply could prevent a collapse (say 20-50% price drops). Some VIs (think tds on doorsteps next year, lenders on the prudent side of things who are concerned with credit quality) may well be comfortable with the kind of 10-20% price falls you guys have been documenting already on this thread.


 
The perceived positive effect of immigrant-renters on sentiment is interesting insofar as statistics and information about this group is wobbily at best.  Until immigration and emigration (and _real_ as opposed to _supposed_ employment patterns) are better understood the role of guest-workers is purely speculative!  For example a report published today shows substantively that fifteen hundred new immigrants enter the UK every day!.........and one thousand - mostly British - emigrate (i.e. population is growing by a net 500 emigrants a day plus, of course, births-minus-deaths figures).  Hitherto-positive sentiment towards property has been based on at least one pillar which is virtually unknown and speculative.   It would be interesting to know what the real movements are and if - contrary to hope and belief - guest-workers are coming and going in the same fashion as in the UK.


----------



## 2nz

My two cents re the stamp duty debate is that the government will be very reluctant to make any waves in this market. The last thing they will want is to cause a new price acceleration. Election year might mean that it would be tempting to interfer, but I'm guessing that they wont do anything. They like the rest of are fed up with this market and don't want to go the way of Thailand or Japan.


http://irishhousepricesfalling.blogspot.com/ (71 examples so far)


----------



## Bootdog

bo se said:


> What analysis is available on these 300k empty houses? e.g.
> 
> how many are on the shannon (and similar) built for tax breaks?
> how many are full of immigrants who are shy of forms?
> how many are genuine holiday homes for people who enjoy and can afford a second home?
> In my experience anyone with property for rent in cities and towns has no problem renting i.e. no suggestion of excess supply.



I think this is a very good and important point. It would be useful to know how many homes were vacant at the previous census / survey to the one that came up with this figure.

These properties didn't appear overnight. This supposed excess in supply would have taken 10+ years to build up. I don't buy the line that investors are leaving houses sitting vacant while the capital value increases year on year. Any investor with the financial acumen to take that approach would naturally rent the place out in order to get an even better return than that from capital appreciation alone. Property managers these days can handle the whole process of letting out with minimal or zero input from the owner...


----------



## gurramok

Bootdog said:


> I think this is a very good and important point. It would be useful to know how many homes were vacant at the previous census / survey to the one that came up with this figure.
> 
> These properties didn't appear overnight. This supposed excess in supply would have taken 10+ years to build up. I don't buy the line that investors are leaving houses sitting vacant while the capital value increases year on year. Any investor with the financial acumen to take that approach would naturally rent the place out in order to get an even better return than that from capital appreciation alone. Property managers these days can handle the whole process of letting out with minimal or zero input from the owner...



for both Bootdog and Bo Se benefit 

From a previous post http://www.askaboutmoney.com/showpost.php?p=303300&postcount=6993

At least 60,000 vacant units built since 2002

And from CSO report in Indo:
http://www.unison.ie/irish_independent/stories.php3?ca=9&si=1636317&issue_id=14226

*snip*
[FONT=Verdana, Arial] MORE than 300,000 homes across the country will not be included in the latest census - because there was no-one at home. 
 Enumerators delivering and collecting the census forms were unable to contact the inhabitants. 
  Following inquiries among neighbours, postmen and women and apartment block management companies, the vast majority of those dwellings - some 275,000 - were identified as being vacant. 
 In a further 30,000 cases, there was nobody at home when census officials called on various occasions. 
*snip*

Its either they are vacant if they haven't been sold *cough*  or they have been sold and are sat on by speculators who couldnt be bothered renting them out.
[/FONT]


----------



## StoppedClock

Afuera said:


> Can you think of any yourself?
> 
> The most obvious VIs do not want a reversal in the market. Builders want to keep on building, mortgage lenders want to keep lending, the government wants to keep on receiving tax receipts.


 
Estate Agents have been the biggest VI cheerleaders and will hold with their bullish spin till it is completely obvious that market has peaked, however I think they will then turn bearish to get the crash over ASAP and start ramping again.


----------



## StoppedClock

Bootdog said:


> Any investor with the financial acumen to take that approach would naturally rent the place out in order to get an even better return than that from capital appreciation alone.


 
 Are you being serious? 
Any _investor with the financial acumen _has long ago left the Irish Market. 
Empty properties not being let is a fact of the Dublin market and has been for quite some time as Capital Apreciation is (was) adequate, EAs have even used it as a selling point to convince "_investors with financial acumen" _new to the game that they wouldn't even have to dirty their hands dealing with teneants. 
Also I have a number of friends who have invested in Irish Property but who are sufficienty ralistic to know that the market will eventually turn and when it does it will be fast and brutal, the longer it goes up the faster and more brutal it will be, they want to be able to offload their properties quickly. They see the potential rent from a property let for 1 or 2 years as insufficent extra return to justify haveing to give notice to tenents and redecorate etc. etc.


----------



## liteweight

StoppedClock said:


> Are you being serious?
> Any _investor with the financial acumen _has long ago left the Irish Market.
> Empty properties not being let is a fact of the Dublin market and has been for quite some time as Capital Apreciation is (was) adequate, EAs have even used it as a selling point to convince "_investors with financial acumen" _new to the game that they wouldn't even have to dirty their hands dealing with teneants.
> Also I have a number of friends who have invested in Irish Property but who are sufficienty ralistic to know that the market will eventually turn and when it does it will be fast and brutal, the longer it goes up the faster and more brutal it will be, they want to be able to offload their properties quickly. They see the potential rent from a property let for 1 or 2 years as insufficent extra return to justify haveing to give notice to tenents and redecorate etc. etc.



Can't say I've noticed any empty properties in the Dublin rental market. Anything to back this up? Having a tenant doesn't preclude one from selling relatively quickly. Personally, I can't see the logic in someone keeping a property empty when they could be making extra in rent.


----------



## whathome

liteweight said:


> Can't say I've noticed any empty properties in the Dublin rental market. Anything to back this up? Having a tenant doesn't preclude one from selling relatively quickly. Personally, I can't see the logic in someone keeping a property empty when they could be making extra in rent.


 
I know several people who moved into their partners' home but don't rent their own property out. Maybe they're hoping to make the most of capital appreciation to date and avoid stamp duty claw-back and CGT when they eventually sell. I wouldn't advise it but I know many people doing it.


----------



## room305

bo se said:


> What analysis is available on these 300k empty houses? e.g.
> how many are on the shannon (and similar) built for tax breaks?
> how many are full of immigrants who are shy of forms?
> how many are genuine holiday homes for people who enjoy and can afford a second home?


Does it matter? I'm not being facetious or anything, I am genuinely curious. The price of _every_ single house in the country has appreciated enormously over the past few years, irrespective of location and local supply factors. Perhaps half of these houses are in Shannon and Leitrim, built solely for tax breaks but I'll bet they still appreciated as other houses in the country did. In my hometown of Carlow, house prices should be _falling_ as job prospects in the town continue to worsen with the closure of factories by Braun, Lapple and Greencore. Instead they have worked furiously to close the gap with prices in Dublin.

A house in which nobody wishes to live is worth nothing. Once the tax breaks run out on these houses and the owners cannot sell them for buttons, will it not drag down the price of houses everywhere?

Also remember, it is 300k _vacant_ houses, not 300k houses that were empty when the census enumerator called round.



bo se said:


> In my experience anyone with property for rent in cities and towns has no problem renting i.e. no suggestion of excess supply.



Of course. They are offering these houses for rent at rates _vastly_ cheaper than the cost of servicing a mortgage. People would be silly not to live there as the landlords are in effect, subsidising the tenants. At some stage equilibrium will have to be restored between rental costs and mortgage costs.


----------



## liteweight

whathome said:


> I know several people who moved into their partners' home but don't rent their own property out. Maybe they're hoping to make the most of capital appreciation to date and avoid stamp duty claw-back and CGT when they eventually sell. I wouldn't advise it but I know many people doing it.



Indeed. I know one or two doing the same thing but they're not investors. I'm not too sure how well they'll be protected against the clawback either. Some are operatinng under the illusion that if one rents under the RaRs there is no liability. They're banking on the fact that Rev. will find it too difficult to trace whether they were living there or not. I don't see why they just don't sell immediately if they're not going to live there and don't rent it out, especially given the current climate.

Have you seen any evidence of investors leaving property idle in Dublin? The only one's I've ever seen were in Sandymount as the builder held on to them. They're rented now.


----------



## Bootdog

StoppedClock said:


> Are you being serious?
> Any _investor with the financial acumen _has long ago left the Irish Market.
> Empty properties not being let is a fact of the Dublin market and has been for quite some time as Capital Apreciation is (was) adequate, EAs have even used it as a selling point to convince "_investors with financial acumen" _new to the game that they wouldn't even have to dirty their hands dealing with teneants.
> Also I have a number of friends who have invested in Irish Property but who are sufficienty ralistic to know that the market will eventually turn and when it does it will be fast and brutal, the longer it goes up the faster and more brutal it will be, they want to be able to offload their properties quickly. They see the potential rent from a property let for 1 or 2 years as insufficent extra return to justify haveing to give notice to tenents and redecorate etc. etc.



Unfortunately I am 

If you know a couple of examples of the situation above, well fair enough, but I can't say I've seen anything to suggest it ... any people I know who have invested in property look to let them out as much as they can. That would include a couple who started a portfolio in the early 90's, and the current annual rental income would cover a significant portion of the original capital they used to purchase the house. (BTW these folks have stopped buying in Ireland some years back).

Like you say, maybe it makes no sense because any "_investor with the financial acumen _has long ago left the Irish Market."


----------



## whathome

liteweight said:


> Have you seen any evidence of investors leaving property idle in Dublin?


 
Well I would say that as soon as somebody stops living in their PPR but holds on to it for capital appreciation they become an investor....whether they like to be called that or not. I also know of people who purchased property in Dublin for the purpose of investment that don't currently rent it out. Why bother with the hassle dealing with tenants when you've been making five times the annual rent in capital appreciation? Those days of massive capital appreciation are over now so these empty properties will either be rented or sold.


----------



## bearishbull

There are many properties in Dublin not rented out and empty. There are tax reasons and other reasons for that. Rents are'nt that much relative to the capital appreciation per year for last 10 years. Most investors will rent but a sizeable amount don't.


----------



## beattie

bearishbull said:


> There are many properties in Dublin not rented out and empty. There are tax reasons and other reasons for that. Rents are'nt that much relative to the capital appreciation per year for last 10 years. Most investors will rent but a sizeable amount don't.


 

The question is now that the days of cap appreciation are over will these empty properties be rented out or will they be put up for sale? The daft report could precipitate a further flush of properties coming on stream.


----------



## Guest111

There are quite a few couples who have bought separately but live together and leave the other property vacant to avoid stamp duty, stamp duty clawback, and even to get the old first time buyers grant.


----------



## beattie

Andy Doof said:


> There are quite a few couples who have bought separately but live together and leave the other property vacant to avoid stamp duty, stamp duty clawback, and even to get the old first time buyers grant.


 
Are people in this situation liable for SD clawback? Do you have to live in a property to avoid it?


----------



## bo se

room305 said:


> Does it matter? I'm not being facetious or anything, I am genuinely curious. The price of _every_ single house in the country has appreciated enormously over the past few years, irrespective of location and local supply factors. Perhaps half of these houses are in Shannon and Leitrim, built solely for tax breaks but I'll bet they still appreciated as other houses in the country did. In my hometown of Carlow, house prices should be _falling_ as job prospects in the town continue to worsen with the closure of factories by Braun, Lapple and Greencore. Instead they have worked furiously to close the gap with prices in Dublin.
> 
> A house in which nobody wishes to live is worth nothing. Once the tax breaks run out on these houses and the owners cannot sell them for buttons, will it not drag down the price of houses everywhere?
> 
> Also remember, it is 300k _vacant_ houses, not 300k houses that were empty when the census enumerator called round.


 
Of course it matters. If for example they were all holiday homes (clearly not the case) then presumably they would be vacant as the owner would return a form only for his PPR. In this situation the 300k empty houses would not represent excess supply. 

Also re the Section type properties on the Shannon/Letrim - values have not appreciated in line with values in the rest of the country - I believe that is discussed elsewhere on this site. And as you point out their existing values are most vulnerable as not enough people want to live in the areas they are located.


----------



## Guest111

beattie said:


> Are people in this situation liable for SD clawback? Do you have to live in a property to avoid it?


 
I'd imagine people in this situation are fine.

Provided you don't rent out your property surely where you sleep and what you do are nobody's business. The stamp duty clawback only kicks in if you rent out the property.


----------



## whathome

Andy Doof said:


> There are quite a few couples who have bought separately but live together and leave the other property vacant to avoid stamp duty, stamp duty clawback, and even to get the old first time buyers grant.


 
Also, when they finally sell the second property, they won't pay 20% CGT as they're claiming it was one of their PPR's. I think they should be declared to the revenue as non PPR's.

Other couples are leaving the second property empty while waiting out the claw-back period. I know of one couple who were planning on waiting another year for the 5 year limit to have passed before renting out his apartment in Blackrock so as to avoid the claw-back. We haven't seen them in a while so they may have decided to sell it given the current outlook for property.

In Ireland now it's quite common for both individuals in a relationship to own a property before moving in together. When you look at how the stamp duty and CGT system works in this country, you can see why this would result in many vacant homes. Eventually these properties will be rented or sold, further adding to rental or sales supply. Since there's a population boom between the ages of 25 and 35, this would be quite a common occurrence with couples.

So in effect, the stamp duty claw-back rule is artificially reducing rental supply because property is left vacant to avoid paying tax. As soon people realise that these properties have stopped appreciating and have actually started to depreciate, they may be dumped on the market.

When you think about it, not renting an appreciating property while living with a partner can appear very desirable:
- No tenants
- No wear and tear on the property
- No furniture
- No PRTB
- No tax returns relating to rent
- No 20% CGT when sold
- No neighbour trouble

It may not explain all vacant properties but could be the reason that many are not rented.


----------



## liteweight

beattie said:


> Are people in this situation liable for SD clawback? Do you have to live in a property to avoid it?



The property must be occupied by the owner in order to avoid stamp duty clawback. I don't know how realistic it is for them to check but they have recently made a start on this.

In all honesty, it doesn't seem worthwhile to take the risk with regard to clawback. It's charged at investors' rates and can be quite hefty depending on price of property at time of purchase. A FTB presumably has a mortgage, which is not an investment mortgage, and is given extra tax relief on the interest for the first 7 years. So it's not only the clawback they have to worry about but they will be viewed as tax evaders by Revenue on this front alone!

Furthermore, if caught, they will have to pay cgt on profit if they sell in the future and that's 20%. If they simply sold the property they wouldn't be liable for any of this. Personally, when weighing up whether a property would appreciate enough, even last year, to cover the above costs, it doesn't make sense to me.


----------



## whathome

liteweight said:


> Personally, when weighing up whether a property would appreciate enough, even last year, to cover the above costs, it doesn't make sense to me.


 
If I was in that situation, I wouldn't do it either but you can be sure many people are. The benefits are huge and the percieved risk of being found out is very small. Who's going to know if I spend the night at my place or my partner's place?

None of the couples we know with a second PPR are using the rent-a-room scheme, they are leaving the property vacant. It also gives them an escape option if the relationship doesn't work out!


----------



## liteweight

whathome said:


> If I was in that situation, I wouldn't do it either but you can be sure many people are. The benefits are huge and the percieved risk of being found out is very small. Who's going to know if I spend the night at my place or my partner's place?
> 
> None of the couples we know with a second PPR are using the rent-a-room scheme, they are leaving the property vacant. It also gives them an escape option if the relationship doesn't work out!



I don't know how big the benefits are in reality. I suppose the key word here is 'percieved'. Most FTBs don't seem to realise that there's a clawback at all and were horrified at the program on TV last week. A FTB who bought an apartment at 300K ends up paying approximately 15K  in clawback plus interest, plus penalties which are quite hefty. If they sell the apartment for 350K, they pay approx. 10K capital gains (not taking expenses into account). This is before Revenue start looking for their increased tax relief back, and again, I'm sure there are penalties attached. If caught, they'd be lucky to make 20K profit, whereas they could have walked away with 50K if they'd sold immediately.

I remember on another thread you said that a friend of yours got a letter from Rev. re clawback...did they ever find out why they were targeted or were they just part of the 1000 or so that Revenue decided to check on lately?


----------



## Persius

If person moves in with his partner, but keeps his original address for bank statements, ESB bills, correspondance with revenue etc, then I'd say he could easily claim that the vacant house is still his PPR if and when he tries to sell it. If that person is still paying all his own mortgage and the partner is paying all her own mortgage, he may even be technically correct in claiming the vacated house as his PPR. 

I do believe the revenue will crack down on many cases of ex owner occupiers becoming landlords, however I do not believe such a case will even appear on their radar.


----------



## whathome

liteweight said:


> I remember on another thread you said that a friend of yours got a letter from Rev. re clawback...did they ever find out why they were targeted or were they just part of the 1000 or so that Revenue decided to check on lately?


 
Their house wasn't vacant, they bought it when they got married first and then bought another one two years later (hangers on), renting the first one out. They didn't try to claim that the rented house was a PPR and didn't know about clawback until the revenue contacted them. Might have been through PRTB or rent allowance, I'm not sure how the revenue picked them out but the key thing is their first house was rented and they didn't try to hide that.

This is a different situation to co-habiting couples however that leave one of their properties vacant as a PPR. Vacant property is unlikely to attract as much revenue attention. This is probably one of the reasons why so many properties are vacant! Eventually these properties will arrive on the rental (5 years after purchase) or sales market and there are a lot of them IMO.


----------



## room305

liteweight said:


> The property must be occupied by the owner in order to avoid stamp duty clawback.



This is not true.


----------



## JayDub

beattie said:


> It should be out, usually it is leaked as well a few days beforehand so maybe there is bad news coming.......


I emailed Daft asking when the new report is due to be published, they said "hopefully" next thursday...


----------



## liteweight

room305 said:


> This is not true.



The property can also be occupied by someone on your behalf such as a dependent relative who does not pay rent. 



> www.revenue.ie
> 
> *Who is a first time buyer?*
> A first time buyer is a person, (or, where there is more than one buyer,          each of such persons):
> who has not on any previous occasion, either individually or jointly,            purchased or built on his/her own behalf a house (in Ireland or abroad)            and
> where the property purchased is occupied by the purchaser, or a person            on his behalf, as his/her only or principal place of residence and
> where no rent, other than rent under the rent-a-room-scheme, is derived            from the property for five years after the date of the current purchase.


I suppose it could be argued that if no rent is received then the property is still a PPR but one can't claim to have left the property empty or they will ask where you lived. If you lived elsewhere, then the property cannot be your PPR and therefore you are no longer able to avail of FTBs exemption. 

In relation to capital gains tax, one can spend up to four years abroad as long as it's a work requirement, and have no liability on the property. As with all information on the revenue site, it's open to interpretation. I'm going on what I've been told by my solicitor, accountant, and the many threads on AAM on this subject but it's by no means a definitive answer.


----------



## liteweight

whathome said:


> Their house wasn't vacant, they bought it when they got married first and then bought another one two years later (hangers on), renting the first one out. They didn't try to claim that the rented house was a PPR and didn't know about clawback until the revenue contacted them.



Bummer! I'm sure that came as a shock! I think more should be done to explain the situation to people so that they can make informed decisions. We're not talking peanuts when it comes to clawback.



			
				whathome said:
			
		

> This is a different situation to co-habiting couples however that leave one of their properties vacant as a PPR. Vacant property is unlikely to attract as much revenue attention. This is probably one of the reasons why so many properties are vacant! Eventually these properties will arrive on the rental (5 years after purchase) or sales market and there are a lot of them IMO.



It must be difficult for couples who decide to co-habit if they both own a property. Both think they'll be together forever...but there must be a little niggle somewhere like, what if we're not, and I've given up everything!? Who sells? I'd say you're right and that the majority hold onto both for at least some period of time. It must be very expensive however, for such couples to pay two mortgages while keeping one property vacant. I agree, it's unlikely someone in this situation would attract revenue attention.


----------



## whathome

liteweight said:


> It must be very expensive however, for such couples to pay two mortgages while keeping one property vacant.


 
Not at all, if they had separate mortgages before moving in together, it's hardly going to suddenly get more expensive when they cohabit. In fact they might be better off through sharing NTL, phone, food etc.


----------



## liteweight

whathome said:


> Not at all, if they had separate mortgages before moving in together, it's hardly going to suddenly get more expensive when they cohabit. In fact they might be better off through sharing NTL, phone, food etc.



Well, both properties would have maintenance fees if apartments as well as mortgage interest at the very least. If the couple own houses this doesn't apply but a house starts to look 'sorrowful' very quickly if left unoccupied IMO. The couple would have to do their own maintenance on a very regular basis. Presumably there would still be utility bills for the empty property if the owner wished to have it assumed occupied. There would also be heating bills if s/he wanted to keep the place in good order. Definitely day to day living through sharing food bills etc. would be less.  However, mortgage interest, utility bills, maintenance charges, risk of stamp duty clawback and risk of capital gains tax, with no rent to offset any of it, would seal the deal for me and I'd sell. Capital appreciation would have to continue to grow substantially to still arrive at a profit if all or even some of the above costs were to be met. I'd prefer to take my profit and invest it in something which, hopefully, made me money from the get go. What price peace of mind?


----------



## whathome

liteweight said:


> Capital appreciation would have to continue to grow substantially to still arrive at a profit if all or even some of the above costs were to be met. I'd prefer to take my profit and invest it in something which, hopefully, made me money from the get go. What price peace of mind?


 
Of course but it's not you we're talking about. When a vacant property was appreciating by €50,000 per year, the owner would have felt crazy to sell it. As soon as capital appreciation stops, the owner is more likely to sell. That's the point that has been made here many times about vacant property.


----------



## liteweight

whathome said:


> Of course but it's not you we're talking about. When a vacant property is appreciating by €50,000 per year, the owner would feel crazy to sell it. As soon as capital appreciation stops, the owner is more likely to sell. That's the point that has been made here many times about vacant property.



I know it's not me we're talking about but I can only give my opinion. A property left vacant by an investor who has already paid stamp duty and is aware of capital gains tax liability, is in a different league to someone who decides to hold onto their PPR, move in with a partner, while pretending s/he still lives at the first property. The investor may leave it vacant for a number of reasons other than capital appreciation e.g. tax incentives which can be offset against other rental income. The person who decided to take a chance on not being caught by Revenue, could lose a substantial amount of his/her 50K in clawback. This added to the interest they've paid over the year virtually cuts out the profit. Subsequent liability to capital gains tax if the property is then sold, leaves him/her in a worse position than if s/he'd sold straight away. They could have banked 50K straight off without leaving themselves open to the ups and downs of the property market, which we are now witnessing.


----------



## whathome

liteweight said:


> The person who decided to take a chance on not being caught by Revenue, could lose a substantial amount of his/her 50K in clawback.


 


liteweight said:


> I agree, it's unlikely someone in this situation would attract revenue attention.


 
You've already said that if the property is vacant, they're unlikely to attract revenue attention. That was the original point


----------



## liteweight

whathome said:


> You've already said that if the property is vacant, they're unlikely to attract revenue attention. That was the original point



'Unlikely' doesn't mean definitely....


----------



## whathome

liteweight said:


> 'Unlikely' doesn't mean definitely....


 
I'm unlikely to die in a plane crash ... but unlikely doesn't mean definitely. Doesn't stop me travelling by air


----------



## liteweight

whathome said:


> ... but unlikely doesn't mean definitely.



Great we're in agreement so!


----------



## whathome

liteweight said:


> Great we're in agreement so!


 
Absolutely not


----------



## liteweight

whathome said:


> Absolutely not



If the wind changes your face will stay like that you know!


----------



## whathome

liteweight said:


> If the wind changes your face will stay like that you know!


 
It's still better than the face you're stuck with!


----------



## zac

Afuera said:


> Can you think of any yourself?
> 
> The most obvious VIs do not want a reversal in the market. Builders want to keep on building, mortgage lenders want to keep lending, the government wants to keep on receiving tax receipts.
> 
> Quote:
> Originally Posted by *ajapale* http://www.askaboutmoney.com/showthread.php?p=310180#post310180
> _Thanks, Are all VI's bulls? In other words are there groups of people out there who have a vested interest in seeing the Irish Property Market go into reverse?_
> 
> 
> Can you think of any yourself?
> 
> The most obvious VIs do not want a reversal in the market. Builders want to keep on building, mortgage lenders want to keep lending, the government wants to keep on receiving tax receipts.



I like this question by ajpale, radical thinking says I.

I can think of couple more obvious types:

Alot people who did not buy want prices to come down so that they can afford to buy one. Thats vested interest.

An investor who just sold his property has a vested interest in prices to come down for his emotional comfort, so that he can be proven right.
This is important for 'majority' of investors's psyche.


----------



## zac

whathome said:


> It's still better than the face you're stuck with!



Havnt been on this forum in a while, dint know it has turned one on one demolition derby?


----------



## whathome

zac said:


> Havnt been on this forum in a while, dint know it has turned one on one demolition derby?


It hasn't, myself and liteweight go back a long way


----------



## whathome

This article in today's Sunday Independent asks the question - did Davy management buy the company from Bank of Ireland because they were concerned that the bank is very heavily exposed to the property market which now looks turbulent?

http://www.unison.ie/irish_independent/stories.php3?ca=35&si=1718742&issue_id=14855



> Somehow I can't help feeling that this transaction tells us more about Bank of Ireland than it does about Davy. With 55 per cent of its loan book tied up in bricks and mortar, Bank of Ireland is increasingly coming to resemble a leveraged bet on the Irish and UK property markets.
> 
> With property values on both sides of the Irish Sea looking very toppy, Bank of Ireland could be facing into some turbulence in the near future.
> 
> Did the Davy team decide they needed to take control of their destiny back into their own hands, even if it meant paying top dollar?


----------



## Remix

zac said:


> I like this question by ajpale, radical thinking says I.
> 
> 
> 
> Alot people who did not buy want prices to come down so that they can afford to buy one. Thats vested interest.


 
In a strict sense of the phrase that could be said, but phrases are more properly used in terms of their common and accepted usage.

Trying to conveniently redefine the term 'vested interest' is somewhat futile as it is widely used in Ireland and abroad to denote the likes of lenders, EAs, property developers etc.


----------



## Guest111

whathome said:


> You've already said that if the property is vacant, they're unlikely to attract revenue attention. That was the original point


 
I think the risk here is negligible...even if the situation did attract Revenue attention I know I'd fancy my chances of arguing the case.
Realistically, if your partner has moved in with you but kept his/her home as a vacant investment where is the problem going to arise?

One couple I know even stay in the "other PPR" if they're out in that part of town...so even if the Revenue break in and check the fridge there's probably something in there!
I agree though as the days of spectacular capital appreciation come to an end, this phenomenon will become increasingly rare.


----------



## zac

whathome said:


> This article in today's Sunday Independent asks the question - did Davy management buy the company from Bank of Ireland because they were concerned that the bank is very heavily exposed to the property market which now looks turbulent?
> 
> http://www.unison.ie/irish_independent/stories.php3?ca=35&si=1718742&issue_id=14855



Whathome what you think of this part of the article:

[FONT=Verdana, Arial] So what are guys with street smarts like that doing buying a stockbroking firm at what looks very like the top of the market? At over 8,500 at the end of the week the ISEQ index is close to an all-time high.[/FONT]


----------



## whathome

zac said:


> Whathome what you think of this part of the article:
> 
> [FONT=Verdana, Arial]So what are guys with street smarts like that doing buying a stockbroking firm at what looks very like the top of the market? At over 8,500 at the end of the week the ISEQ index is close to an all-time high.[/FONT]


 
Why do you ask - that question in the article doesn't relate directly to the housing market?


----------



## zac

whathome said:


> Why do you ask - that question in the article doesn't relate directly to the housing market?



just wondering he dint state why it looks like ISEQ top to him, is he implying that its at all time high so it must be a top.


----------



## whathome

zac said:


> just wondering he dint state why it looks like ISEQ top to him, is he implying that its at all time high so it must be a top.


 
I can't answer for the author but maybe it's because many of the larger companies in the ISEQ are exposed to the property market so while the ISEQ is at an all time high and the property market has started to weaken, this could be the top? 

I don't pay much attention to the ISEQ index to be honest.


----------



## Maine

Raskolnikov said:


> Bank of Ireland/AIB have covered their asses with Irish property. The maximum loan you can get from either is 92%, also neither bank offers interest only options on their mortgages. Ask anyone who has gotten a mortgage with either bank, it's not easy unlike some of they're competitors.


 
As well as the 55% direct exposure my guess would be there is further exposure to the property market indirectly.

IMO the fact that no foreign bank has taken over any Irish banks to date probably means the likelihood of takeover may be receding. This means their share prices going forward will reflect performance and if the property markets weakens they could tighten in loans etc very quickly to protect their share prices.  This tightening would drive liquidity out of the market just when it needs more of it i.e. they could drop the multiples and might want say 30% equity etc


----------



## asterix

So once more into the bear pit for a mauling
First of all in relation to the most recent discussion in relation to vacant properties. It quickly morphed into fact that there are 300k vacant properties in the country being sat on by investors looking for a return from capital appreciation. This was backed up by a census finding and anecdotes from posters who know "lots of couples" doing this kind of thing. Stunning. This totally ignores the fact that:
1. The properties could be holiday homes or made look vacant because the inhabitants weren't interested in answering the door to the census enumerator. At the very least, I'd say there's a very large margin of error in relation to the census finding. The enumerators were paid buttons and only called back to "vacant" houses a few times so I'd take the figure with a grain of salt.
2. It still doesn't make sense to me not to earn rent from a property when you can, even with the high levels of cap. appreciation in recent years. Arguments relating to problems getting rid of tenants and...redecorating...dont' have a lot of cogency for me.
3. There are high levels of risk associated with the course of action a lot of the posters believe has been adopted and I do not accept that anything more than a small minority of people would live in the hope that they "fly below the radar" of the Revenue. 
4. There is no evidence of a marked increase in the supply of homes for sale or rent. Surely investors sitting on these vacant properties would be very sensitive to the beginning of a crash which began, oh, 6 months ago now?
Back to more general points. A good starting point is Dan McL on Radio One this afternoon. "VI!"I hear you cry, but hold your whisht. On my understanding, his argument went something as follows: 
People have been predicting a crash at regular intervals for the last ten years. No one guessed that demand would rise much above 50K new units a year, yet there were 80k completions in 2005 and there will be close to 100k units completed this year and the demand is still there. There has been a 14-15% increase in house prices this year. Unemployment is the key factor in precipitating a property crash. This is not an issue in the Irish economy at present. However, there are, undoubtedly, issues with affordability brought about by interest rate rises and this is what will slow the market down here. At present mortgage repayments account for 33% of a person's income, rising to a predicted 37% next year. This is not sustainable and will result in a slowdown in the growth of house prices next year to a rate of 3%.
So an argument that there will be a soft landing if ever there was one. And despite the fact that it comes from the mouth of a VI, I think it has a lot to commend it. And now for the onslaught!


----------



## StoppedClock

asterix said:


> So once more into the bear pit for a mauling
> etc, etc........


I have reread your post a number of times but I can't see any argument that there will be a soft landing? Am I missing something?


----------



## beattie

asterix said:


> Dan McL on Radio One this afternoon. At present mortgage repayments account for 33% of a person's income, rising to a predicted 37% next year. This is not sustainable and will result in a slowdown in the growth of house prices next year to a rate of 3%.
> !


 
So where did Dr Dan say that ECB rates would peak at? Is the growth of 3% next year predicated on them peaking at 3.5%?


----------



## gearoidmm

asterix said:


> There is no evidence of a marked increase in the supply of homes for sale or rent.



I'm sorry but this is just not true.  The number of houses for sale on Daft has increased from 14,000 to 23,000 since July and equally the number of houses for sale in Dublin on myhome.ie has increased from 3000 to more than 5000 in the same period.  There has been a definite increase in inventory.

However, you are correct that there has not been an increase in properties for rent.  In fact, there has been a large fall in the number of rentals available on Daft in the past 6-9 months.  Now, one might say that this is due to increased demand but it isn't too much of a stretch to think that it might be related to the increase in houses/apartments for sale as investors try to cash in.


----------



## SherryTrifle

[broken link removed]=

for 300k you too can have a small property with a road going through the middle of it. What madness.


----------



## Sarsfield

*€100m worth of apartments sell within hours*

From the SBP:



> More than €100 million-worth of apartments in a new development in Sandyford, south Dublin, were sold within a few hours of going onto the market last Thursday.


 
[broken link removed]

So there's still demand, including for one-beds starting at €355K!

You'll be delighted to know that Dan the Man gets quoted in this article too.


----------



## bankrupt

asterix said:


> This totally ignores the fact that:
> 1. The properties could be holiday homes or made look vacant because the inhabitants weren't interested in answering the door to the census enumerator. At the very least, I'd say there's a very large margin of error in relation to the census finding. The enumerators were paid buttons and only called back to "vacant" houses a few times so I'd take the figure with a grain of salt.


 
I recall hearing the chap in charge of the census saying that enumerators also had to check with neighbours to determine if a property was genuinely empty. If the margin of error is %20 for example (I would hope that it is lower than this!) then the figure for vacant houses is still enormous.


----------



## whathome

*Re: €100m worth of apartments sell within hours*



Sarsfield said:


> So there's still demand, including for one-beds starting at €355K!


 
What do you expect to hear from Hooke & MacDonald - the new homes agent!!!

Also from that article:



> By contrast, vendors of auction properties in Dublin have had another difficult week, with a large number of homes failing to find buyers.
> 
> Many agents are now conceding that the market is unlikely to pick up significantly before next spring, especially as the European Central Bank (ECB) is set to raise interest rates by a further 0.25 per cent next month. The ECB held interest rates at 3.25 per cent at its meeting on Thursday.


----------



## whathome

SherryTrifle said:


> for 300k you too can have a small property with a road going through the middle of it. What madness.


 

I've noticed some price drops in Tyrrelstown recently.  Here's an example...

Originally was €360,000 as you can see from the text.  Then reduced to €350,000


Now reduced to €340,000
www.daft.ie/135373


----------



## beattie

*Re: €100m worth of apartments sell within hours*



Sarsfield said:


> From the SBP:
> 
> 
> 
> [broken link removed]
> 
> So there's still demand, including for one-beds starting at €355K!
> 
> You'll be delighted to know that Dan the Man gets quoted in this article too.


 
Are these cheaper than other ones in this area released recently?  Its good to see that Dr Dan wants earnings to outstrip HP increases to increase affordability.....


----------



## zac

Maine said:


> As well as the 55% direct exposure my guess would be there is further exposure to the property market indirectly.
> 
> IMO* the fact that no foreign bank has taken over any Irish banks to date* probably means the likelihood of takeover may be receding. This means their share prices going forward will reflect performance and if the property markets weakens they could tighten in loans etc very quickly to protect their share prices.  This tightening would drive liquidity out of the market just when it needs more of it i.e. they could drop the multiples and might want say 30% equity etc




are you sure?

Is NIB not irish, is Danske bank not foreign. is first active not irish, is bank of scotland not foreigh?

RBS considered buying AIB or BOI, RBS CEO once said, he also said such a deal would run into problems with competition authority  hence they dint proceed.

Since the 'fact' on which rest of the argument(speculation) is based isnt true, the conclusions can be disregarded.


----------



## bo se

asterix said:


> First of all in relation to the most recent discussion in relation to vacant properties. It quickly morphed into fact that there are 300k vacant properties in the country being sat on by investors looking for a return from capital appreciation.


 
In fairness 2 additional components of the 300k empty houses have been highlighted though we're little closer to understanding how the 300k breaks down. In addition to the 3 stated earlier:

1 Those on the shannon (and similar) built for tax breaks;
2 Those full of immigrants who are shy of forms;
3 Genuine holiday homes for people who enjoy and can afford a second home.

We can now add:

4 Investors who couldn't be bothered collecting rent because ther're making so much on capital appreciation;
5 Couples evading or avoiding various taxes and stamp duty clawbacks.

I would suggest another:

6 Houses nearly complete or recently completed which from a census enumerator's perspective look finished but convencing is on going or the power isn't connected or they're being kitted out. 

This last one is relatively small but I'd hazard about 3 months worth of building i.e. about 20k houses last year. I suspect 2,4 and 5 are also relatively small - for argument sake another 20k each. Difficult to back up but I imagine the bulk of the 300k are holiday homes - built with or without tax breaks. (NCB have estimated demand for holiday homes at 10,000 per year.) If this works out higher per capita than in the UK then I imagine they don't have much tax breaks for holiday home building in the UK. While it's clearly a waste of resources to encourage building holiday homes during a time of shrtage of supply (pre 2006) it's hard to see this 300k as a major over hang on the market!


----------



## beattie

bo se said:


> 2 Those full of immigrants who are shy of forms;


 
Highly unlikely. The census people used to talk to neighbours etc to find out if anyone lived in the house before marking it as vacant.


----------



## gearoidmm

asterix said:


> Unemployment is the key factor in precipitating a property crash. This is not an issue in the Irish economy at present. However, there are, undoubtedly, issues with affordability brought about by interest rate rises and this is what will slow the market down here.



This is interesting.  Dan McLaughlin amongst others keep pointing at how a rise in unemployment is necessary before the property market can begin to fall.  In contrast to that, looking at the market in the US at the moment, the unemployment rate has hit a 5 year low and despite that, prices are starting to go into freefall in certain areas and the overall median house price has fallen countrywide for the first time in 16 years.

And before someone mentions the large rise in the fed rate there over the past 2 years, comsider that the average interst rate went to 5% at the lowest and now is around 6.5%.

So, they are having a property crash without any rise in unemployment and without an enormous rise in interest rates.  Just a change in sentiment combined with unaffordability.

But of course that couldn't happen here...


----------



## gearoidmm

Favorite quote from the property pages this week was from the Irish Times property section.  When referring to the auction results, the first line said something like - 'The highest price achieved at auction this week was for x house in Blackrock'.  At no point in the article did they mention that it was the only house that sold at auction this week!


It's so dishonest.


----------



## Superman

bo se said:


> 4 Investors who couldn't be bothered collecting rent because ther're making so much on capital appreciation;
> 6 Houses nearly complete or recently completed which from a census enumerator's perspective look finished but convencing is on going or the power isn't connected or they're being kitted out.



Somewhere between these two categories would be developers who hang onto a couple of houses in each estate/apartments in each block as they develop.  Until now, it would have been better than money in the bank.


----------



## JayDub

There will not be a soft landing, the Irish property market is an elephant at the moment, when elephants fall, they fall hard.

There is nothing stopping the ECB from raising rates all the way to 5%, which is where Europes second biggest economy is heading this Thursday. If Irish property owners are stretched at 3.25%, they will snap at 5%.

[broken link removed]=
“But we cannot deny that there is a risk that *rates rise to 5.25% and possibly beyond* if the MPC does not like what it sees on the inflation front, and although our central case remains that 5% will prove to be the top of the cycle, we are less confident now that this will be the case.”


----------



## Maine

zac said:


> are you sure?
> 
> Is NIB not irish, is Danske bank not foreign. is first active not irish, is bank of scotland not foreigh?
> 
> RBS considered buying AIB or BOI, RBS CEO once said, he also said such a deal would run into problems with competition authority hence they dint proceed.
> 
> Since the 'fact' on which rest of the argument(speculation) is based isnt true, the conclusions can be disregarded.


 
NIB was an Australian owned bank whose parent was desperate to get rid of it post scandal and sold it to Danske. Bank of Scotland are going the build the business route - they did not buy a major bank here, but ESB shops. They perceive more value going this route.

RBS already own Ulster Bank and have done for a long time......

The key point of the post was to highlight that the local large lenders will do what it takes to survive a landing ( hard or soft ) and that keeping up their share price will be more important to them than the plight of over exposed borrowers. They will be possibly under even more pressure than foreign owned lenders as they are very exposed to this market. It is where they make a large chunk of their profit and lack the balance of say RBS / Ulster who operate in a number of countries and have less exposure to property clients across these markets.


----------



## partisan

JayDub said:


> There will not be a soft landing, the Irish property market is an elephant at the moment, when elephants fall, they fall hard.
> 
> There is nothing stopping the ECB from raising rates all the way to 5%, which is where Europes second biggest economy is heading this Thursday. If Irish property owners are stretched at 3.25%, they will snap at 5%.
> 
> [broken link removed]=
> “But we cannot deny that there is a risk that *rates rise to 5.25% and possibly beyond* if the MPC does not like what it sees on the inflation front, and although our central case remains that 5% will prove to be the top of the cycle, we are less confident now that this will be the case.”



Three points.
1/ There is no evidence to suggest that Irish Property owners are stretched at 3.25%. Potential Irish property buyers may be put off by high prices  (especially after the panic buying earlier this year). We're not hearing anything of repossesions or even a slow down in consumer spending (if anything our economy is powering ahead)..
2/ Historically British interest rates have been higher than German interest rates. 
3/ Rates are rising quite slowly. Plenty of payrises in between. Plenty of opportunity for saving and adapting lifestyles.


----------



## JayDub

partisan said:


> We're not hearing anything of repossesions or even a slow down in consumer spending (if anything our economy is powering ahead).


Irish car sales were down 12% in September, I'd call that a slow down 
http://www.unison.ie/stories.php3?ca=9&si=1699765&issue_id=14723


----------



## blidjustice

partisan said:


> 3/ Rates are rising quite slowly. Plenty of payrises in between. Plenty of opportunity for saving and adapting lifestyles.


 

every few months ? plently of time - depends on your circumstances I suppose

oh and http://www.askaboutmoney.com/showthread.php?t=40407


----------



## Doris

It seems that EA's are becoming nervous at valuations.  The AMV is losing appeal and having to reduce a price suggests they got it wrong first time.  The new appoach seems to be to 'hint' that the vendor will accept a lower price.  This is having their cake and eating it.  Put the house on the market for private Treaty at a price that warm and fuzzy and sell it for its market value.  If market value is what someone is willing to pay for something EA's are hiding it behind PT deals.  There is not access to monthly prices. Asking prices are a curtain that could hide either higher prices or lower ones. Just because they are all we have to go on does not make them more concrete.
EA's  or economists who got the higher points in the leaving?


----------



## homeless

I see the McWilliams RTE series starts tonight. Anyone think this will have an affect on sentiment?


----------



## whathome

From the Sunday Times Ireland yesterday:

*Comment: Matt Cooper: Our houses are not worth all the money we’ve borrowed on them*

http://www.timesonline.co.uk/article/0,,2091-2437932,00.html



> Now, however, the property boom may be coming to an end, leaving government, home-owners, landlords, banks and auctioneers all fretting that the much anticipated “soft-landing” could be very bumpy indeed. Suddenly some people are starting to “think smaller”, as interest rates rise, rents stall and the anticipated capital gains from properties fails to materialise.


----------



## beattie

More stories of difficulties of selling a house from daft. This vendor has even being reduced to cutting the price but that hasn't done the trick thus far.


http://www.daft.ie/discussions.daft?dcn[discussion_id]=87424


----------



## Firefly

whathome said:


> From the Sunday Times Ireland yesterday:
> 
> *Comment: Matt Cooper: Our houses are not worth all the money we’ve borrowed on them*
> 
> http://www.timesonline.co.uk/article/0,,2091-2437932,00.html


 


Interesting point about people "thinking smaller". This is so true...I remember in the 80's there were pound shops everywhere and today there are none as people have more money. Expect more of these Euro Shops to open should the economy start heading south. Also, I would take a close look at the % of sales by Aldi/Lidl....

Firefly.


----------



## howstrange

asterix said:


> 2. It still doesn't make sense to me not to earn rent from a property when you can, even with the high levels of cap. appreciation in recent years. Arguments relating to problems getting rid of tenants and...redecorating...dont' have a lot of cogency for me.



There was an interesting piece in the Sunday Tribune yesterday about the rental market in Dublin recently. People were quoted saying they were having extreme difficulty finding a suitable place in the city center. One guy said he went to view a a 1 bed apt and there was 75 other people also looking at the same apt. Other people were saying they have been looking for wks for a place. One interesting comment was from a Sherry Fitz agent ( i think!) admitting that there is a lot of vacant apts around Dublin at the moment. They were also saying rents have gone up approx 10% in the last few mths. There def has been a sudden squeeze in rental accom in Dublin. The fact that there has been a sudden increase in supply of sale properties would def suggest that a lot of investors are trying to dump their properties now hoping they can get the best price!


----------



## miju

liteweight said:


> Can't say I've noticed any empty properties in the Dublin rental market. Anything to back this up?


 
i can show you about 20 such apts in immediate area of melville cobh / sq in finglas 



partisan said:


> 3/ Rates are rising quite slowly. Plenty of payrises in between. Plenty of opportunity for saving and adapting lifestyles.


 
sure why would someone have to adapt their lifestyle if their getting wages increases?


----------



## conor_mc

Superman said:


> Somewhere between these two categories would be developers who hang onto a couple of houses in each estate/apartments in each block as they develop. Until now, it would have been better than money in the bank.


 
Not really. Most developers wouldn't have too much cash sitting in the bank over the last few years - they'd have been better off ploughing it into their next development.

If nothing else, it would increase his cashflow and reduce overdraft costs.


----------



## miju

ha, ha, this is funny, you know theres been a big shift in sentiment when it goes from property porn on RTE to this

http://www.askaboutmoney.com/showthread.php?t=40656


----------



## partisan

blidjustice said:


> every few months ? plently of time - depends on your circumstances I suppose
> 
> oh and http://www.askaboutmoney.com/showthread.php?t=40407



0.25% every few months or about 1% a year! Compare that to the late 80's! 
Don't get the significance of the link, can you exlpain?


----------



## Dreamerb

This thread seems to me to be wildly over-interpreting a number of facts and some anecdotal evidence. In particular, the interpretation of the 300,000 allegedly empty properties seems off, and does not appear to take any account of the large number of properties vacant because 
(1) owned by local authorities and requiring substantial renovation / refurbishment to be habitable; (2) owned by private individuals, otherwise as (1); (3) owned by private individual in long term institutional care [e.g. home of an elderly person no longer able to cope, family if any unwilling /unable to sell home]; (4) held as property bank - being constructively derelicted; (5) vacant awaiting new owners to move in, etc. 

All of these would be significant contributors, as would abandonment of older rural homes. 

An investor who actually chooses to hold a new property empty would - even in  the euphoric days of 15% pa capital appreciation - be spectacularly foolish. If you choose to manage a property yourself, yes there's a little bit of hassle, but otherwise there are companies that specialise in that area. Most of the costs are tax deductible, and quite a number would arise whether the place is rented or not [management charges, maintenance...].


----------



## blidjustice

partisan said:


> 0.25% every few months or about 1% a year! Compare that to the late 80's!
> Don't get the significance of the link, can you exlpain?




its not linked - just threw it in for the crack.

1% a year. It doesnt sound much does it? Maybe its not to some people. Its not the 80s anymore THANK GOD! Very different times as you indirectly pointed out. 
I definately would not like to see it rise to the levels seen in the 80s


----------



## JayDub

A slow down in the construction sector will not only impact on construction related jobs, it will impact the financial sector as well. Regarding the crash, its not a question of will it happen, its a question of when will it happen.

"In the Second Quarter of 2000, there were 165,200 directly employed in the Irish Construction compared with 262,700 in the comparable period in 2006. As the Construction Sector, in which residential housing accounts for two-thirds, slows over the next decade, there will be at least 100,000 direct and indirect job losses. As noted below, many of the 58,000 additional jobs in Financial & Business Services since 2000, are property related.

Average earnings in Construction at €40,000, are 29% above the average in industry. Even if workers in Construction who generally are not computer literate and do not have transferable skills, face earning cuts, it would be quite an adjustment. However, there have been 40,000 job losses in the Production and Agriculture, Fisheries and Forestry Sectors since 2000 and there is no potential for employment growth in these sectors."

http://www.finfacts.com/irelandbusinessnews/publish/article_10007932.shtml


----------



## Afuera

Dreamerb said:


> This thread seems to me to be wildly over-interpreting a number of facts and some anecdotal evidence. In particular, the interpretation of the 300,000 allegedly empty properties seems off, and does not appear to take any account of the large number of properties vacant because
> (1) owned by local authorities and requiring substantial renovation / refurbishment to be habitable; (2) owned by private individuals, otherwise as (1); (3) owned by private individual in long term institutional care [e.g. home of an elderly person no longer able to cope, family if any unwilling /unable to sell home]; (4) held as property bank - being constructively derelicted; (5) vacant awaiting new owners to move in, etc.
> 
> All of these would be significant contributors, as would abandonment of older rural homes.



Your speculation on why they might be vacant is besides the point and doesn't provide a reason for why our vacancy rate is so out of whack with international markets (which would have old people moving to nursing homes, property needing repairs etc.). Should capital appreciation stop (i.e. the famous slow landing) these glut of properties can and will be added to the market (either rental or property sales). The shear number of them identitied by the CSO is the big worry as it represents many years of building.



Dreamerb said:


> An investor who actually chooses to hold a new property empty would - even in  the euphoric days of 15% pa capital appreciation - be spectacularly foolish. If you choose to manage a property yourself, yes there's a little bit of hassle, but otherwise there are companies that specialise in that area. Most of the costs are tax deductible, and quite a number would arise whether the place is rented or not [management charges, maintenance...].



Many muliple-homeowners these days are what could be termed "accidental investors". Property was bought while they were young and was held on to longer than they needed it because the mantra was "You'd be mad to sell". Their circumstances may have changed since they bought it (nesting with partner, starting a family) however there's not much to worry about if the capital is appreciating year-on-year. Until recently banks were only too happy to help in this process (often suggesting it in fact).

Without capital appreciation the picture changes dramatically though and you can be guaranteed that that's when a lot of these properties will be added to the rental or housing market.


----------



## room305

Dreamerb said:


> This thread seems to me to be wildly over-interpreting a number of facts and some anecdotal evidence. In particular, the interpretation of the 300,000 allegedly empty properties seems off, and does not appear to take any account of the large number of properties vacant because
> (1) owned by local authorities and requiring substantial renovation / refurbishment to be habitable; (2) owned by private individuals, otherwise as (1); (3) owned by private individual in long term institutional care [e.g. home of an elderly person no longer able to cope, family if any unwilling /unable to sell home]; (4) held as property bank - being constructively derelicted; (5) vacant awaiting new owners to move in, etc.
> 
> All of these would be significant contributors, as would abandonment of older rural homes.


 
So many times on this thread, bulls posit reasons why there are so many vacant homes. The reasons run the gamut of plausible to ridiculous. At the end of the day, it doesn't matter why these properties are empty, simply that they are. Historically, about 3% of property remains vacant. For some reason, in a country supposedly affected by a severe housing shortage, we have a 13.5% vacancy rate.

Does this not alarm you slightly?


----------



## demoivre

homeless said:


> I see the McWilliams RTE series starts tonight. Anyone think this will have an affect on sentiment?



rofl.  I have no doubt that those  who still can't  afford their own home will hang on to his every word and conveniently forget that the property doomsters like McWilliams got it manifestly 
*wrong* in 1999
*wrong* in 2000
*wrong* in 2001
*wrong* in 2002 
*wrong* in 2003
*wrong* in 2004
*wrong *in 2005
*wrong* in 2006 ! 

and I am not bullish about all property.


----------



## Jason7

demoivre said:


> rofl. I have no doubt that those who still can't afford their own home will hang on to his every word and conveniently forget that the property doomsters like McWilliams got it manifestly
> *wrong* in 1999
> *wrong* in 2000
> *wrong* in 2001
> *wrong* in 2002
> *wrong* in 2003
> *wrong* in 2004
> *wrong *in 2005
> *wrong* in 2006 !
> 
> and I am not bullish about all property.


 
Agreed but at some point, next year , year after ... he will be right , and the 500K you paid for a shoe box in Mount St Annes will refect its true value IMO 250K.


----------



## phoenix_n

[broken link removed]

Watch this place fall in value. Is 725K just being ambitious or is the vendor reading a different market ?


----------



## bren2002

demoivre said:


> rofl.  I have no doubt that those  who still can't  afford their own home will hang on to his every word and conveniently forget that the property doomsters like McWilliams got it manifestly
> *wrong* in 1999
> *wrong* in 2000
> *wrong* in 2001
> *wrong* in 2002
> *wrong* in 2003
> *wrong* in 2004
> *wrong *in 2005
> *wrong* in 2006 !
> 
> and I am not bullish about all property.



I disagree.  I think that McWilliams was looking at it from an Ecomonics point of view.  He was only proven wrong becasue cheap money was available and Irish people took advantage of all offerings from banks etc.  This cheap credit facility is ending fast.


----------



## walk2dewater

demoivre said:


> rofl. I have no doubt that those who still can't afford their own home will hang on to his every word and conveniently forget that the property doomsters like McWilliams got it manifestly
> *wrong* in 1999
> *wrong* in 2000
> *wrong* in 2001
> *wrong* in 2002
> *wrong* in 2003
> *wrong* in 2004
> *wrong *in 2005
> *wrong* in 2006 !
> 
> and I am not bullish about all property.


 
Ah yes, the ol'  "Ive-smoked-100-cigs-a-day-still-no-cancer" logic.   Hang on, maybe it even prevents cancer!?


----------



## beattie

demoivre said:


> and I am not bullish about all property.


 
So which property are you not bullish about?


----------



## whathome

demoivre said:


> and I am not bullish about all property.


 
That's good because an anonymous poll suggests that given the current downturn in the property market, 70% of people think that McWilliams is finally *not* going to be wrong! I expect he will be....

*correct in* 2007
*correct in* 2008
*correct in* 2009
*correct in* 2010

http://www.davidmcwilliams.ie/


----------



## demoivre

bren2002 said:


> I disagree.  I think that McWilliams was looking at it from an Ecomonics point of view.  He was only proven wrong becasue cheap money was available and Irish people took advantage of all offerings from banks etc.  This cheap credit facility is ending fast.



Disagree all you like - I have just quoted fact and what I said is correct.


----------



## demoivre

walk2dewater said:


> Ah yes, the ol'  "Ive-smoked-100-cigs-a-day-still-no-cancer" logic.   Hang on, maybe it even prevents cancer!?



roflol  what have I said that's incorrect?


----------



## liteweight

bren2002 said:


> I disagree.  I think that McWilliams was looking at it from an Ecomonics point of view.  He was only proven wrong becasue cheap money was available and Irish people took advantage of all offerings from banks etc.  This cheap credit facility is ending fast.



When hosting Agenda, even McWilliams used to joke about how often he'd gotten it wrong. Cheap money has been available for a very long time now. Perhaps it was a good excuse in 2000 but not 2005/6. Give any of us long enough and we'll guess something right somewhere.


----------



## demoivre

whathome said:


> That's good because an anonymous poll suggests that given the current downturn in the property market, 70% of people think that McWilliams is finally *not* going to be wrong! I expect he will be....
> 
> *correct in* 2007
> *correct in* 2008
> *correct in* 2009
> *correct in* 2010



Excellent - can you ask him what the lotto numbers will be on Sat. night.


----------



## whathome

demoivre said:


> Excellent - can you ask him what the lotto numbers will be on Sat. night.


 
Coming from the person who is bullish on *some* property but not all!

Tell us oh wise one, what should we buy???? 
Even better - tell us what we shouldn't buy, apart from lotto tickets


----------



## walk2dewater

demoivre said:


> roflol what have I said that's incorrect?


 
 Bob likes to drive 100mph down country lanes. Been doing it all year, hasn’t hit a thing.

Inductive reasoning: Bob is a brillant driver.
Deductive reasoning: Speed kills.


5yrs later. Bob still likes to drive fast down country lanes. In fact, now it’s more like 150mph and particularly likes doing it when he’s p1ssed. And look he still hasn’t hit a thing!

Inductive reasoning: The man is a legend.
Deductive reasoning: Stay out of Bob’s car!


----------



## Maine

phoenix_n said:


> [broken link removed]
> 
> Watch this place fall in value. Is 725K just being ambitious or is the vendor reading a different market ?


 
Thats a cool US$1million.  It shows just how far we have come in a few years, alot done and more to do - US$ 2m by 2010.....


----------



## JayDub

Maine said:


> Thats a cool US$1million. It shows just how far we have come in a few years, alot done and more to do - US$ 2m by 2010.....


Ireland deserves a crash with lunatics like that, theres another home on the same estate at 550K
http://www.daft.ie/searchsale.daft?id=141900&search=1


----------



## whathome

whathome said:


> Flippin' Stillorgan...
> 
> These just keep getting cheaper!
> 
> Developers Price €590,000:
> [broken link removed]=
> 
> This one has been for sale for months now. Miju even made that controversial call about it, the price had been reduced from €575,000 to €560,000
> http://www.daft.ie/searchsale.daft?search=1&selected_agent=&id=84285&s[agent_id]=218&s[p]=upsvvwrp
> 
> And the latest one (appeared today) is €550,000
> [broken link removed]


Still falling...

Miju made the call on this one! Now down to *€540,000*
[broken link removed]


----------



## Dreamerb

Afuera said:


> Your speculation on why they might be vacant is besides the point and doesn't provide a reason for why our vacancy rate is so out of whack with international markets (which would have old people moving to nursing homes, property needing repairs etc.). Should capital appreciation stop (i.e. the famous slow landing) these glut of properties can and will be added to the market (either rental or property sales). The shear number of them identitied by the CSO is the big worry as it represents many years of building.


 
Out of whack with international markets for at least one very good reason: High proportion of owner occupiers. So where someone goes into a nursing home (for example), the inertial effect is to churn that property faster rather than to go to the ongoing effort of paying rent; the inertial effect in Ireland with its high proportion of owner occupiers is to leave the property vacant. The reasons for vacancy are relevant; I don't suggest that they make it "right" in some way, and it's certainly not economically efficient. 

If the government were to intervene in the property market, perhaps the best ways to do this would be to create incentives to greater efficiency. Annual property taxes for second and subsequent houses unless rented for not less than (say) ten months a year, or registered as a holiday home (which should facilitate infrastructural / schools etc planning in those counties with an especially high proportion of holiday homes. 




Afuera said:


> Many muliple-homeowners these days are what could be termed "accidental investors". Property was bought while they were young and was held on to longer than they needed it because the mantra was "You'd be mad to sell". Their circumstances may have changed since they bought it (nesting with partner, starting a family) however there's not much to worry about if the capital is appreciating year-on-year. Until recently banks were only too happy to help in this process (often suggesting it in fact).
> 
> Without capital appreciation the picture changes dramatically though and you can be guaranteed that that's when a lot of these properties will be added to the rental or housing market.


 
I think a very high proportion of the "accidental investors" have had their properties on the rental market anyway. They generally haven't been so cash rich as to be able to afford two mortgages. And people have been worried about the imminence of a crash since at least 2001 - I was very much afraid I'd bought my house "at the top of the market", and just relieved that it was sufficiently affordable for us to be able to stay there even if we went into negative equity... 

"So many times on this thread, bulls posit reasons why there are so many vacant homes. The reasons run the gamut of plausible to ridiculous. At the end of the day, it doesn't matter why these properties are empty, simply that they are. Historically, about 3% of property remains vacant. For some reason, in a country supposedly affected by a severe housing shortage, we have a 13.5% vacancy rate."

... is that supposed to be me? I'm not a bull - I'm more or less neutral. I'm buying and selling PPRs just at the moment, but I wouldn't buy a further rental property. Nor, on the other hand, would I dispose of the one I have. I'm probably close to being a property agnostic.


----------



## room305

whathome said:


> Still falling...
> 
> Miju made the call on this one! Now down to *€540,000*
> [broken link removed]



Guy is losing his shirt on this one. Weren't these sold off-plan for €590k?


----------



## beattie

room305 said:


> Guy is losing his shirt on this one. Weren't these sold off-plan for €590k?


 
Big time, I would have thought he would have had to increase the step size in his price drops to more than 10k to generate interest.


----------



## howstrange

Another price drop:

Was 317K:
*

Now 300K:
**http://tinyurl.com/yk5g8u
**
Its been a while since i have seen 2 beds under the 300K mark. Its looking like it is going to happen!!
*


----------



## room305

Dreamerb said:


> ... is that supposed to be me? I'm not a bull - I'm more or less neutral. I'm buying and selling PPRs just at the moment, but I wouldn't buy a further rental property. Nor, on the other hand, would I dispose of the one I have. I'm probably close to being a property agnostic.



Sorry, I meant bulls in a general sense, as in those who believe we have an undersupply in housing which justifies the price increases of the last ten years.


----------



## Afuera

Dreamerb said:


> Out of whack with international markets for at least one very good reason: High proportion of owner occupiers. So where someone goes into a nursing home (for example), the inertial effect is to churn that property faster rather than to go to the ongoing effort of paying rent; the inertial effect in Ireland with its high proportion of owner occupiers is to leave the property vacant. The reasons for vacancy are relevant; I don't suggest that they make it "right" in some way, and it's certainly not economically efficient.



Nice try, but if you check out homeownership rates around the world, we're not exactly unique. Germany and France are the obvious exceptions but many other countries have similar or more (Spain, Italy) homeownership than us. And none of those countries have vacancies anywhere near 15% of their housing stock.



Dreamerb said:


> If the government were to intervene in the property market, perhaps the best ways to do this would be to create incentives to greater efficiency. Annual property taxes for second and subsequent houses unless rented for not less than (say) ten months a year, or registered as a holiday home (which should facilitate infrastructural / schools etc planning in those counties with an especially high proportion of holiday homes.



Current government intervention is severely slanted in favour of the investor. I agree with you that it should be changed and made more efficient.


----------



## Aesop

homeless said:


> I see the McWilliams RTE series starts tonight. Anyone think this will have an affect on sentiment?



I will say one thing for McWilliams he is consistent. Unfortunately he has been consistently wrong for 7 years and all the analogies (cancer, driving etc ) in the world don't change that. I don't think he is wrong in what he is saying just that he is overlooking factors which have a bigger influence than he is allowing for (e.g. cheap credit, immigration, investor appetite). What is the statute of limitations on predicting a housing crash.


----------



## Dreamerb

Afuera said:


> Nice try, but if you check out homeownership rates around the world, we're not exactly unique. Germany and France are the obvious exceptions but many other countries have similar or more (Spain, Italy) homeownership than us. And none of those countries have vacancies anywhere near 15% of their housing stock.


 
Yes, but they also don't have the same level of churn and high immigration. And I think they do have annual property taxes, though I'm I'm subject to correction. 

One factor I see as particularly problematic is that the emphasis is on large scale new development. There's relatively little done to address the quasi dereliction of some older local authority housing, or of the upper storeys of shops / commercial premises. There's definitely room for private enterprise to take a role in renovating local authority housing - whether for profit or on a per unit rate; likewise, while the LOTS scheme was a disaster, a less confining scheme might see higher uptake and an increase in urban density. 



Afuera said:


> Current government intervention is severely slanted in favour of the investor. I agree with you that it should be changed and made more efficient.


 
That's not precisely the point I was making - it's not just investors (and I suspect not even primarily investors) - who are causing the high vacancy inefficiency. On the other hand you're quite right about government intervention: a system which allows investors to write off the full cost of borrowing against their tax liability, while limiting the mortgage interest relief available to owner occupiers to a positively measly sum, does seem unduly generous to the former and intrinsically unfair to the latter. 

This isn't something that can be rolled back or redressed quickly though - doing so in one fell swoop would probably be a shock to the economy of a scale that would bring about a full blown recession. Even tinkering around the margins of the property market could be problematic at the moment, so I'd suspect Cowen's going to leave well enough alone and hope for the best.


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## walk2dewater

Aesop said:


> I will say one thing for McWilliams he is consistent. Unfortunately he has been consistently wrong for 7 years and all the analogies (cancer, driving etc ) in the world don't change that. I don't think he is wrong in what he is saying just that he is overlooking factors which have a bigger influence than he is allowing for (e.g. cheap credit, immigration, investor appetite). What is the statute of limitations on predicting a housing crash.


 
This thread isnt about discussing McWilliams.  The central bull argument on this thread, popping up at regular intervals, is based on the weakest possible form of reasoning, boiling down to 'prices-been-goin-up-for-X-yrs-so-it-will-continue/plateau'.  The irony is, upon closer inspection, this is more of BEAR argument than anything else.


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## soma

Aesop said:


> I will say one thing for McWilliams he is consistent. Unfortunately he has been consistently wrong for 7 years



As a matter of interest, what exactly has he said that has been wrong? 

Has he ever named a date, or said "if interest rates get to X" where a crash will occour..? (Not trying to be smart - just genuinely interested in whether he has or not). I often find his sloganeering and endless labelling hard to swallow, but I find his analsysis at the marcoeconomic level to be fairly on the money.

From my point of view he has been saying "we're in asset speculation mania" for many years and that the longer it goes on, the worse the come-down will be.  It still seems spot-on to me. 

I think McWilliams may turn out to be the Robert Schiller of the Irish Property Bubble (Schiller was derided by his peers for pointing out the insanity of the dotcom bubble a few years before it popped).

I think many people are stuck in ostrich-mode, unable to see that the '100 fags a day and I'm still alive' analogy is very apt IMHO.


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## Arthur Daley

walk2dewater said:


> The central bull argument on this thread, popping up at regular intervals, is based on the weakest possible form of reasoning, boiling down to 'prices-been-goin-up-for-X-yrs-so-it-will-continue/plateau'.


 
Or there is the arguement that new supply of zoned land and finished units gets shutdown to counteract the increased supply of second hand properties. People say this will lead to recession and meltdown in the economy, thus suppressing demand further in a vicous circle. I can't see why reducing output to say 20-30,000 units a year which appears normal to me should result in an economic armageddon. People would still be quite well off by EU standards, and people will still wish/feel the need to purchase property. Sure maybe Ireland will have to get used to the end of the handy number and the quick buck. But this would be no bad thing.


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## Afuera

Dreamerb said:


> Yes, but they also don't have the same level of churn and high immigration. And I think they do have annual property taxes, though I'm I'm subject to correction.



None of this gets around the fact that we have an awful lot of property that could be pushed onto the market very quickly (possibly turning a slump into a slide).



Dreamerb said:


> That's not precisely the point I was making - it's not just investors (and I suspect not even primarily investors) - who are causing the high vacancy inefficiency. On the other hand you're quite right about government intervention: a system which allows owner occupiers to write off the full cost of borrowing against their tax liability, while limiting the mortgage interest relief available to owner occupiers to a positively measly sum, does seem unduly generous to the former and intrinsically unfair to the latter.



Did you mean to say "a system which allows *investors* to write off the full cost of borrowing"?



Dreamerb said:


> This isn't something that can be rolled back or redressed quickly though - doing so in one fell swoop would probably be a shock to the economy of a scale that would bring about a full blown recession. Even tinkering around the margins of the property market could be problematic at the moment, so I'd suspect Cowen's going to leave well enough alone and hope for the best.



Yes, it's far too late in the day for something like that now. I think that plans like this will only get rolled out after something bad happens and the public are in the "let's make sure this never happens again" mindset.


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## MugsGame

Can posters please keep the thread on topic. This is a debate. Off-topic posts which add little or nothing to the debate may be deleted,  particularly those questioning moderator decisions. Any further posts on that subject may result in bans. 

If you have a query about the posting guidelines in general, PM Brendan. 

Update: The moderators are all volunteers. This is not a commercial site. Allow some time for answers to PMs. If you have a severe problem with the editorial policy that cannot wait a day for an answer, find another site to continue your debate.

Thank you,
MugsGame (moderator)


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## conor_mc

Arthur Daley said:


> I can't see why reducing output to say 20-30,000 units a year which appears normal to me should result in an economic armageddon.


 
Beermat figures, but if 100k units per annum = 262k jobs in construction, then a drop to 20-30k units p.a. _could_ mean job losses of 180k approx. And that's only directly in construction.


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## room305

Arthur Daley said:


> Or there is the arguement that new supply of zoned land and finished units gets shutdown to counteract the increased supply of second hand properties. People say this will lead to recession and meltdown in the economy, thus suppressing demand further in a vicous circle. I can't see why reducing output to say 20-30,000 units a year which appears normal to me should result in an economic armageddon.



You think a drop in house building rates for 90k a year to 30k a year won't cause a recession? When they lay-off all those workers what will happen?

Either the foreign workers leave for sunnier economic climes which will further depress housing demand or else they will stay, competing on price with Irish workers for the remaining jobs.

Neither sounds like a recipe for a the-good-times-they-keep-on-a-rollin' type scenario.


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## Arthur Daley

conor_mc said:


> Beermat figures, but if 100k units per annum = 262k jobs in construction, then a drop to 20-30k units p.a. _could_ mean job losses of 180k approx. And that's only directly in construction.


 
Well then maybe unemployment will rise to 97/98 levels again and we'll have more in common with our central European partners who have been funding this party for the last few years. If we expect 100k units a year to be a baseline that is to be sustained we're like the boy in the bubble anyway.


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## conor_mc

Arthur Daley said:


> Well then maybe unemployment will rise to 97/98 levels again and we'll have more in common with our central European partners who have been funding this party for the last few years. If we expect 100k units a year to be a baseline that is to be sustained we're like the boy in the bubble anyway.


 
Who expects 100k units per annum to be the baseline?

I'm not sure where you're coming from here, but my point is that a drop in output from 100k to 30k could well be nothing short of economic armageddon....


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## Dreamerb

Afuera said:


> None of this gets around the fact that we have an awful lot of property that could be pushed onto the market very quickly (possibly turning a slump into a slide).


 
Possibly, although I think a lot of it would need work before it would be marketable. Point taken, though. 



Afuera said:


> Did you mean to say "a system which allows *investors* to write off the full cost of borrowing"?.


 
Gah! Of course I did, mea culpa. Shall correct. 

But as regards this slow down in the market - I do think that's being somewhat overblown. My house has now been on the market for two weeks. In that time, at least 13 separate potential buyers have viewed it, there are four active bidders, and the current bid is 15k over the asking price with further viewings scheduled. Some of the bidders were so bullish they made offers on the spot at viewings. And all this, though we didn't put a disingenuous price on it (we set it at a level we'd have been prepared to accept, comparable to similar properties locally, and well above what we "needed"). Methinks current public sentiment is somewhat at variance from that on this thread... at least on my thoroughly unscientific sample of one!


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## whathome

There's a poster called Green Bear making an excellent case for the change in sentiment for Irish property on this website:

[broken link removed]

There are no price drops listed yet but I would imagine some will show up there in time.

So much interest in the change in sentiment shows how the market is at an inflection point IMO.


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## JayDub

Was €410K
http://tinyurl.com/yeov9y

Now €399K
http://tinyurl.com/yeabrh

I'm seeing a lot of homes for sale being listed with two or more estate agents, is this new or a sign of desperation?


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## JayDub

whathome said:


> There's a poster called Green Bear making an excellent case for the change in sentiment for Irish property on this website:
> 
> [broken link removed]
> 
> There are no price drops listed yet but I would imagine some will show up there in time.
> 
> So much interest in the change in sentiment shows how the market is at an inflection point IMO.


 
Which thread, seems Green Bear posted a couple dozen threads there.


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## whathome

JayDub said:


> Which thread, seems Green Bear posted a couple dozen threads there.


 
All of them!

Will probably see 2pack and phoenix_n post there now that they are banned from AAM.
[broken link removed]


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## Arthur Daley

Isn't 30k a reduction to a normal sane level? Isn't there plenty of inefficiency built up in the Irish economy to cope within reason with the laid off construction workers? Ok maybe we can't buy as many BMs/Mercs, own foreign properties in Dubai & Montenegro, eat out every week etc given such a scenario. We weren't doing that 10 years ago. We'll have to get used to approaching in this country what is economic reality for most nations. What has gone on in the last few years is not realistic in the long term. 
If this economy cannot survive a moderating of housing supply then it's got fundamental issues and is doomed one way or the other. I just don't believe it's all that gloomy.


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## MadPad

Dreamerb said:


> ......as regards this slow down in the market - I do think that's being somewhat overblown. My house has now been on the market for two weeks. In that time, at least 13 separate potential buyers have viewed it, there are four active bidders, and the current bid is 15k over the asking price with further viewings scheduled. Some of the bidders were so bullish they made offers on the spot at viewings. And all this, though we didn't put a disingenuous price on it (we set it at a level we'd have been prepared to accept, comparable to similar properties locally, and well above what we "needed" . Methinks current public sentiment is somewhat at variance from that on this thread... at least on my thoroughly unscientific sample of one!


 
very interesting, thanks for posting your experience......


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## room305

Arthur Daley said:


> Isn't 30k a reduction to a normal sane level?



Yes.



Arthur Daley said:


> Isn't there plenty of inefficiency built up in the Irish economy to cope within reason with the laid off construction workers?



Inefficiency built up? I don't understand what you mean. The main drivers for employment are the civil service and construction. Tax is chiefly accrued through property sales. Manufacturing is in decline. Where are the laid off construction workers going to work?



Arthur Daley said:


> Ok maybe we can't buy as many BMs/Mercs, own foreign properties in Dubai & Montenegro, eat out every week etc given such a scenario. We weren't doing that 10 years ago. We'll have to get used to approaching in this country what is economic reality for most nations. What has gone on in the last few years is not realistic in the long term.



Well if we stop buying expensive cars, eating out or buying foreign properties, do you not think this will have a massive effect on our economy? I believe a period of rising unemployment, slowing production and a reduction in overall prosperity is generally referred to by economists as a recession.



Arthur Daley said:


> If this economy cannot survive a moderating of housing supply then it's got fundamental issues and is doomed one way or the other. I just don't believe it's all that gloomy.



You are right. This economy does have fundamental issues. It's called a trade imbalance.


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## Arthur Daley

room305 said:


> Where are the laid off construction workers going to work?
> Well if we stop buying expensive cars, eating out or buying foreign properties, do you not think this will have a massive effect on our economy? I believe a period of rising unemployment, slowing production and a reduction in overall prosperity is generally referred to by economists as a recession.


 
Ok it's recessionary, but I think we all accept supply has to be cut back sometime. It's all about the degree of recession and the degree of falls in house prices. I'm only playing devils advocate here, but do we have examples of house market collapses of 20-50% in countries that entered recessions recently? I don't even think it was that bad in the UK in the late 80s early 90s, but I could stand to be corrected.

I'm just trying to move the debate on to what next now that initial house price falls have been documented on here, and of course we are into real crystal ball territory


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## JayDub

room305 said:


> Well if we stop buying expensive cars, eating out or buying foreign properties, do you not think this will have a massive effect on our economy? I believe a period of rising unemployment, slowing production and a reduction in overall prosperity is generally referred to by economists as a recession.


 
This week is going to be one interesting week. I'm looking forward to seeing how new car sales were in October, then the Daft report is due on Thursday.


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## Brendan Burgess

Sorry folks

This thread has required a lot of moderation. I am closing the thread until the moderators have had a chance to review our policy towards the thread and the discussion of the prices of invidual houses. 

Please do not reopen the discussion in another thread. If you do, you will be banned from Askaboutmoney.

Brendan
Administrator


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## Brendan Burgess

The moderators have decided to close this thread permanently for the following reasons:

1) Nothing new has been said on it for a long time, so there is nothing to be gained by leaving it open
2) There have been frequent breaches of the Posting Guidelines and many users were reporting these posts to the moderators
3) The thread required a huge amount of moderators' time and we have better things to do
4) Many people were posting exclusively in that thread and making no other contribution to Askaboutmoney

But don't despair. You can find extensive, informed, articulate, balanced and entertaining commentary on the impending collapse of the Irish property market [broken link removed].

It would be a great addition to Askaboutmoney if someone would do a balanced summary of both sides of the argument for an increase or decrease in the price of Irish property. We would refer all genuine questions and concerns to such a post. If you do such a post, please email it to brendan@askaboutmoney.com first. Don't start a new thread yet.

Brendan


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## Brendan Burgess

We have reset the post count for users so that any posts made in this thread are not included in their total post count.  Consequently a small number of users have had their status changed from Frequent Poster to Registered User.

Brendan


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