# First Timer Buyers



## topman (19 Oct 2006)

I would like to here from FTB's and their views on the market at present. Are you holding off for the budget or does this  make any difference.


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## Calina (19 Oct 2006)

topman said:


> I would like to here from FTB's and their views on the market at present. Are you holding off for the budget or does this  make any difference.



No, personally I am holding out for value for money and I can't see the budget supplyng that. I suspect I will be an FTB for quite a while yet.


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## walk2dewater (19 Oct 2006)

I’m an Irish FTB and I’m with Calina on this;  looking for value for money.  If I’m still in the country and still in the market, I would wait until prices have dropped substantially, THEN offer another 10% less.  Thats how it works in a bust, ‘can’t give em away’.


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## comanche (19 Oct 2006)

topman said:


> I would like to here from FTB's and their views on the market at present. Are you holding off for the budget or does this make any difference.


 
Nearly bought last spring. Luckily I got shafted by a greedy vendor. Spent a few months looking and realised how mad the who thing had become. In spring I believed that a softlanding was on the way - swallowed the brainwashing! But was happy to plough on due to the fact that I was buying a home.

Am now sitting firmly on the sidelines. Why would I buy as the peak.

Plus am firmly addicted to the 'public sentiment' thread at the moment and firmly in the bear camp!


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## Howitzer (19 Oct 2006)

topman said:


> I would like to here from FTB's and their views on the market at present. Are you holding off for the budget or does this make any difference.


 
What do you expect to happen in the budget that would make any difference to FTBs? The stamp duty reduction/abolition as espoused by Michael McDowell is going to be on their election manifesto for the NEXT government so, by definition, this won't happen in the next budget.

There is no way on earth I would buy property in Ireland at current prices especially with rising interest rates.


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## Open_Window (19 Oct 2006)

Technically I am an undecided FTB (no MORT approval but none the less hopeful  ), since I have never bought a house, but I would wait at least 1 whole year to decided.

We;ve all been shafted by the bubble, for the last 5-8 years so whats 1 more year going to do eh!

In twelve months time I wonder how this thread will look, forget that, this country.

Also, if I had cash, a large substantial cash deposit that was saved (which ) I don't iut would be another reason to hold out as cash will be king in the downturn, especially when all the SSIA sun out of steam and it looks like the SSIA has already blown its load!


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## Remix (19 Oct 2006)

I'm a potential Irish FTB and no way would I consider buying into the Irish property market now. 

To me it would be the equivalent of betting a chunk of my life savings and future earnings in a Las Vegas casino.

Thankfully, with so much evidence of falling prices and increasing supply it's getting much easier to convince the missus that we should stay on the sidelines for now.


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## AJ1 (19 Oct 2006)

I'm a potential first time buyer but will hold off until prices come down. Living at home at the moment, just started to save for a deposit, if prices are still mad in a few years time, we'll rent!


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## StoppedClock (19 Oct 2006)

Technically I could be an FTB (I flogged an inheritied house) but am in no rush to buy, realistically I can't see myself buying here for many years to come.

There are three ways house prices can go: 

A) Down
B) Level (soft landing)
C) Up

If prices go down I think it will be drawn out and I wouldn't be confident to buy as I am self employed and I think the whole place will be fooked so would wait till things settled down; I also assume the banks will be pretty tight for a while anyway.

I have yet to hear a credible argument to support the soft landing theory so IMO it cannot happen.

If prices go up then I will keep an eye on the market until there is a crash, then see A above


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## Open_Window (19 Oct 2006)

Remix said:


> Thankfully, with so much evidence of falling prices and increasing supply it's getting much easier to convince the missus that we should stay on the sidelines for now.



Yes, thats one of the major factors driving the market, the important but rather strong influence of a basic human need which has led people to leave rational thought at the door.

The pressures it can exert on a realtionship never mind both sets of parent exerting more pressure and general enquires from other familiy relatives can in total "wreck you head" or "make you feel inferior for not buying a home" or jsut downright "stupid & wrong". If you can resist the famil programming and sit and watch the market and understand were it came from and were it is going, you are happy, then find your desires as closely met as they can then buy.

However if you just give in to pressure and feel pressured thenyou have increased your risk in an order of great magnitude.

This is the biggest purchase of most peoples lives yet they are nothing but utterly emotional about it in too many cases. EA know this, Banks know this and so it goes...


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## Stags Head (19 Oct 2006)

FTB in Dublin. Selling my investment property down the country and will rent. We are now entering no mans land - lots of FTB with pre approval gained up to 6 months ago rushing to buy before the next interest rate rise, after that the gap widens between what FTB can afford and the prices the market has set. Result = the first evidence of first phases not selling out and then a rapid change in expectations. Just as expectations have risen considerably over the past few years, so they can fall rapidly. The herd instinct can work both ways. Off course if the ECB decides interest rates need go no further up then the whole thing could start again but if they keep going up we'll see investors disposing of property in a big way which added to record supply will give us a falling/crashing market at FTB level around the middle of 07.


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## powderblue78 (19 Oct 2006)

While I am a total bear, I am still not a viable FTB.  With a cash pile of 70K available and income of 45K, even with the price falls seen so far, I am still a long way from affording something inside the M50.  The most I could afford would be somethinig in the ~250K range.

That said, even if I could afford, I would definitely pass right now.  I am sharing an apartment in D6 paying 575/mo.  The one next door is for sale and would cost me 1750/mo to buy, it's a no brainer really.

40 year mortgages, buying with friends/girlfriends/aquaintances, it's all nonsense I don't want any part of.....

I don't even believe in the "ladder" nonsense, there is no ladder when the market is flat.  And when the market is falling, it is a "property slide"


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## sunrock (19 Oct 2006)

the cost of building a 4 bed detached house in the country is 125k
a neighbour of mine got a site from parents for free
a big rise in unemployment will precipitate an immediate big reduction in house prices. there would be a lot of people with no income to service mortgages. also economic migrants would stop coming and many here would leave in a mass exodus. as well even menial jobs will be hard to get as employers will prefer to retain cheap migrant labour
if the unemployment situation does not deteriate too badly despite the inevitable fall off in building work and the increased mortgage payments due to interest rates or taxes going up then the prices of houses will decline more gradually 
the above house would sell today for 350k  in rural ireland _over 200k in profit for site seller and builder
200k would still give anice return to site seller and builder
if there was a steady price decline thats all id offer
i mean the sellers ruthlessly ramped up prices when the demand was there
as a first time buyer i wont have any sympathy for the seller
and yes i hope there will be a crash


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## shanegl (20 Oct 2006)

In the process of buying under affordable housing scheme. Wouldn't buy at present otherwise, if I had the means.


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## micheller (20 Oct 2006)

The Husband and I are both FTB doing the building thing to avoid the inflated market prices. This will be our 'starter home' rather than a one bed apartment in Dublin at crazy value for money.


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## bacchus (20 Oct 2006)

StoppedClock said:


> There are three ways house prices can go:
> A) Down
> B) Level (soft landing)
> C) Up


 
Really. Are you sure?


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## Stiofan (20 Oct 2006)

I'm a potential FTB that originally was looking to get into the market come the new year. As the house is not an investment and am of the belief that wherever I go i'll be there in years to come my main aim is value for money. But its slowly but surely changing to the extent that i'm now firmly in the "wait and see" camp so much so that i'm thinking of renting. Maybe its pride but I am very weary of negative equity particularly on a 1,500 - 1,600 euro mortgage that in the coming years will need to be serviced on a single income. It effectively burns your get out clause!!!

The property bulls and amateur investors are probably shrugging their shoulders, and why not cause they have managed to make ridiculous gains over the past 8 years fuelled by greedy developers controlling supply and rip off banks contorting demand. Oh, and lets not forget their go betweens, EAs and mort brokers. These people have alot to answer for as do our government and its weak legaslative attempts to curb profiteering. I always thought it was a governments job to safeguard the wellbeing of its citizens not to help the rich 10% get richer while the rest of us struggle to deal with weak infrastructure and an overpriced economy!!!

Anyway thats it for the rant. What my main concern as a FTB is that if we, and that includes current homeowners, are not comfortably able to absorb an interest rate of 3.25% (thats remarkably low folks even with the rip off banks margins on top of it) then what chance have we got when the jobs dry up and the economy slows. Its not scarmongering either cause it will happen. Manufacturing has just about gone, the construction boom will end and more importantly economical competitiveness has slowly but surely been eaten away over the years by our own greed and apathy. Add to that the emerging markets of Eastern Europe and the German economic resurrection and its hard to see our strong economic position continuing over the coming 10 to 15 years, and last time I looked mortgages were up at 35 years. At the end of the day it all boils down to one thing and thats affordability. It drives public confidence and as things stand its wobbling and by my estimation makes it a very good time to sit out the madness and wait and see!!!


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## Satanta (20 Oct 2006)

topman said:


> Are you holding off for the budget or does this  make any difference.




http://www.rte.ie/news/2006/1019/budget.html 



			
				Cowen said:
			
		

> ..."The minister 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*…”


Hope they weren't depending on the budget!


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## paddi22 (20 Oct 2006)

I'm a first time buyer as well, 

agree with the other posters, will hold on till some kind of realistic house prices come in.. taking the SSIA and putting it into quinn life funds for 5 years and then i'l see where the ground lies priceswise for houses. In the meantime, saving the dif between my (cheap) rent and what a mortgage would have been.. thats going into an aib regular saver account.

Not a hope in hell of looking at buying until its clear which was the country and house situation has played out regardless of any stamp duty changes this year or next..


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## firsttimebuy (20 Oct 2006)

Just reading this has made me quite nervous. I am a FTB recently put a deposit on a new development for €229,000 in Ennis, which I thought was good value for a 3 bed. The 2nd phase went on release for €245,000 a few weeks ago. I agree house prices in Dublin are over inflated but do you think this is the case outside of the big cities?


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## Stiofan (20 Oct 2006)

Of course it is, we all operate in the same economy and are driven by the same market variables.

To be honest it astonishes me to see the Irish attitude towards debt, and more worryingly long term debt. I've had friends from abroad suggest this is due to the fact that we never really had an economic boom as we have today and are therefore unaware of the consequences of a slowdown. Do people not realise that this is a 35 year mortgage and exposing yourself to that sort of debt commitment is a risky business at the best of times.

I suppose thats a bit rhetorical considering the amount of credit union loans out there that have been put towards home deposits, and people who have told me that there mortgage will be irrelevant in years to come due to inflation and future income increases. How naive can you get!!!!


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## StoppedClock (20 Oct 2006)

firsttimebuy said:


> Just reading this has made me quite nervous. I am a FTB recently put a deposit on a new development for €229,000 in Ennis, which I thought was good value for a 3 bed. The 2nd phase went on release for €245,000 a few weeks ago. I agree house prices in Dublin are over inflated but do you think this is the case outside of the big cities?


 
Yes, [broken link removed]


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## sheena1 (20 Oct 2006)

firsttimebuy said:


> Just reading this has made me quite nervous. I am a FTB recently put a deposit on a new development for €229,000 in Ennis, which I thought was good value for a 3 bed. The 2nd phase went on release for €245,000 a few weeks ago. I agree house prices in Dublin are over inflated but do you think this is the case outside of the big cities?


 

How well has the second phase being selling? €229,000 is very good value for a 3bed in Ennis and even €245,000 is not bad. At the end of the day it is all about what your needs are at the time you buy. Three bed properties are renting for approx €800 a month in Ennis at the moment so your mortgage won't be much more than that at the moment... it is very easy to get nervous looking at house prices but it all depends on your personal circumstances...


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## topman (20 Oct 2006)

vbmenu_register("postmenu_301271", true);  
Frequent Poster



 I aggree, the first two years of a mortgage are the hardest  accustomising to payments purchasing furniture etc. If you feel comfortable with repayments then don't worry.


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## Persius (20 Oct 2006)

I was also a potential FTB in Dublin in the spring. Had deposit, SD fund, mortgage approval. Got outbid on a few properties so decided to take a break. 

Thought more about the whole thing. Sure interest rates weren't expected (by most) back in Spring to go above about 3.5 or 4%. However this is only the forecast over the next year or so. As pointed out by others, a mortgage is over 25 to 35 years, and no one really knows what the mortgage rate in 2010-2015 will be. As well as that I don't see significant growth in wages over the next 10 years as globalisation pressures will force us to keep a lid on our wage growth. We may even have to start accepting wage cuts - like the Germans have done.

On top of all that, I'm currently single and in a new job which I only expect to stay in for a few years. So considering the high transaction costs, you would have to expect good capital appreciation over the next few years. I don't. I expect essentially stagnant prices in the FTB house market (appartment prices may fall more) over the next few years.

Finally I did the "rent is dead money" maths and realised that rents in Dublin are the equivalent of the interest repayments on a similar property if bought with a 25 year mortgage.

So yeah, I'm sitting on the bench. Though it's nothing to do with stamp duty. In hindsight I'm glad I got outbid on those houses I went for.

I would enter the market under a number of conditions
1) I have a good stable job, and should I be made redundant I still have a good chance of getting a similar job for similar pay
2) The cost of servicing a mortgage over 25 years is roughly equivalent to the cost of renting a similar property
3) My personal circumstances change (e.g. family) so that I think it makes sense to own a house and not be reliant on the whims of a landlord.

The problem is that the way the economy is developing in Ireland now, I think points 1 and 2 are mutually exclusive.


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## ajapale (23 Oct 2006)

Topman please do not Duplicate Posts


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## Savvy (23 Oct 2006)

I'm another FTB that almost bought in the summer. I pulled out of a sale because I didn't think I was getting value for money and decided to stay renting for awhile longer, my mortage repayments would have been double the rent that I'm paying on a much larger detached house.


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## aaa1 (26 Oct 2006)

I'm a FTB who has just moved into my new apartment and I have to say, despite all the concerns about a 'crash' I don't think it's going to happen.

First off, the figures have to be looked at closely. The figures from the permanent tsb/ESRI house price index which were released yesterday have to be taken with a pinch of salt. They're the *average* so a property sold for €6million is going to seriously skew the average price given for a second hand property in Dublin. You also have to break them down by area. Septembers overall growth was 0.7pc but if you look at Dublin alone this was 1.7pc. This is the second highest this year with May recording the highest at 1.9pc. Commuter counties are still doing well but 'outside' Dublin recorded only 0.7pc, down from 1pc in September last year. Also, overall growth this year to date is over 10pc already, while it was only 9.5pc for all of 2005. So even if you bought at the end of 05 and we see a slowdown/minor slump, your property probably won't have lost any value. If you break down the figures for the past year it's easy to see that the prices are still going up. At a slower rate, yes, and they're taking longer to sell. But at the lower end of the market they ain't gettin any cheaper. It just gives FTBs more time to look around and get what suits them best. 

Also, the mantra is still the same - location, location, location. There's been multiple threads on this site about places like Carrick on Shannon and Longford having scores of empty Section 23 properties. I think these areas - and people who have bought there - will have serious problems in the years to come because there simply aren't enough people to rent them. But if you buy in Dublin, Cork or Galway, or even any major regional town, then you should be ok. Of course it's all about research. 

The other thing which I have never heard anyone mention when they draw comparisons with the great crash in London or Singapore is that the Irish have a completely different mentality to any other home owners or buyers. Laugh if you want but the famine and landlord system wasn't all that long ago and I think we're suffering the hangover from that. We have an inbuilt desire - which I have yet to see any other nationality - to own our own piece of land or bricks. We truly do measure each other on how much property we own and it's one of those things you ask people now - where did you  go to college, what do you work at, do you rent or do you own? So if the 'crash' comes (and I honestly don't believe it ever will) then you will have opportunists jumping in straight away to get a second cheaper property which they can rent out. And yes, I would be one of those people. 

And finally people - you're always gonna need a roof over your head! I can see why investors are worried about the rising interest rates but if you only own one place, crash or no crash, you're still gonna need that place to lie down at night.


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## whathome (26 Oct 2006)

aaa1 said:


> The figures from the permanent tsb/ESRI house price index which were released yesterday have to be taken with a pinch of salt. They're the *average* so a property sold for €6million is going to seriously skew the average price given for a second hand property in Dublin.


You are wrong about the ESRI/PTSB index being a simple average. They go to great lengths to make sure that the index is not skewed in any way. The only drawback with the ESRI/PTSB index is that it relates to mortgages drawn down so there's a significant time-lag between a sale being agreed and that sale making it into the index. So the "September 2006" index actually relates to property deals done a few months before (most likely May/June 2006).

If you're up to the challenge - a detailed explanation of their methodology is provided here:
[broken link removed]

All of the other points you have made have been disproved many times in the sentiment thread:
http://www.askaboutmoney.com/showthread.php?t=31710&page=376


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## nacho_libre (26 Oct 2006)

I myself am a potential first time buyer but by looking around at properties over the last 12 months have decided to wait and see. 

My reasoning for this is that if there is no crash, that's fine....property prices will 
continue to rise but at a slower rate, i'll also be saving in the meantime and the 
worst case scenario is that I'll be paying more for a property in a year or so than I 
will now or I won't be able to afford one at all. Either way, my circumstances will 
not have changed much. I just won't be a homeowner. 

On the other hand, if I enter the market now by buying a house I will be exposing 
myself to a lot of unknown variables. Where will interest rates be in a few years 
time? Will property keep going up, stagnate or go down? By buying a house now, 
i'll be putting myself in a long-term situation where I have limited control over my circumstances. 

I know you might say you can always sell the property if it gets too 
expensive, but there could be thousands more thinking the same. It's difficult to 
sell something that nobody wants. Especially when your talking in 100's of thousands. 

Anyway, in short, I believe at the moment there is a lot more to lose (potentially) 
than there is to gain by buying property in Ireland.


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## howstrange (26 Oct 2006)

I think property is overvalued everywhere in Ireland regardless if its in Dublin or not! I come from a small town down the country and could not understand how property is so expensive there. All the big industries that were there have closed (due to high labour costs) and there is absolutely nothing there to justify the prices. I believe all these small towns will be hit when construction slows down as so many people are reliant on it and work on the construction sector.

aaa1 above just mentioned the TSB/ESRI index. Those figures are about 3/4 months old at least as they are based on when the mortgages are drawn down. A lot of these places prob went sale agreed in early summer when things were just starting to slow. I think the next index will be more interesting. I think the Q3 Daft report is out next week. That might be interesting.

Wrt buying a place in Dublin to rent, no investor in their right mind would buy an investment property now in Dublin as there is no yield. Your monthly mortgage would far outstrip any rental gains. The days of capital appreciation are over too.

You can say what you want about our inbuilt desire to own our own home but economics is economics and it doesnt base itself on sentiment. House prices far outstrip wages and that cannot happen for too much longer! House supplies too are at record highs and when supply > demand, price goes down!


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## snuffle (29 Oct 2006)

Was nearly a FTB early this year, but didn't go ahead with the purchase for numerous reasons, one of which was the fact we would have had to take on a 35 yr mortgage to afford even a modest 3 bed semi in a village some distance from the city where we actually wanted to buy ( not Dublin but a regional city) , and another reason was that we wouldn't be able to afford to drop to one income in the future if we had children, as even at two incomes we would be pressed hard to service mortgage and be able to pay bills/feed ourselves, never mind have a life 

 Currently, we are not even looking at houses as we've decided to hold off and see if the bubble will finally burst. I don't think current prices reflect the actual "worth" of properties, some run down houses in appaling areas are asking huge sums, and if we were to tie ourselves into purchasing such a house, we'd most likely be stuck there unable to sell to trade up if/when prices come tumbling down and the steady stream of desperate FTBers who would buy such a property just to get onto the "ladder" ran out due to affordability issues with rising interest rates.

We'll continue to rent until it makes financial sense to buy - the house we rent is a 4 bed semi d in one of the nicest areas in the city we want to live in, it's a 5 minute journey to work/shops/every amenity, and the cost of renting this house is less than half the cost to service a mortgage on this house (we wouldn't quallify for such a large mortgage anyway on average wages in this locality). With job instability now an issue in Ireland, we'll certainly be holding off until prices reflect some sort of sanity, especially as some estate agents we know have admitted privately they are advising some of their friends with 2nd and 3rd properties rented out to sell up and bank profits now.

It just seems like madness to me that while mortgage rates were crippling in the 80s, people still managed to pay for just a 20/25 yr term on one income, whereas now the norm is two incomes over a 30/35 yr term for a house on some sprawling estate miles away from where you really want to be.


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## walk2dewater (29 Oct 2006)

aaa1 said:


> And finally people - you're always gonna need a roof over your head! I can see why investors are worried about the rising interest rates but if you only own one place, crash or no crash, you're still gonna need that place to lie down at night.


 
I'm always gonna need to eat, should I start buying farms?


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## Maine (29 Oct 2006)

howstrange said:


> I think property is overvalued everywhere in Ireland regardless if its in Dublin or not! I come from a small town down the country and could not understand how property is so expensive there. All the big industries that were there have closed (due to high labour costs) and there is absolutely nothing there to justify the prices. I believe all these small towns will be hit when construction slows down as so many people are reliant on it and work on the construction sector.


 
Think some regional towns have been driven by S23 and holiday homes ie driven by property speculation that has largely no local impact locally other than building the property. Its not a long term sustainable wealth creator on current scale. Like a massive grant to a specific location.

S23 reduces this year and IMO holiday home construction will fall dramatically as property prices stagnate. This could lead to massive problems in some towns.

From a region like above where vast numbers of locals work in construction with nothing locally to replace these jobs in a slowdown, the knock on effects in local economy could be huge. In the past farming was important contributor but incomes there in nominal terms are the same as years ago - in real terms probably more than halved.


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## sunrock (29 Oct 2006)

in alot of small towns down the country, houses that cost 40k pounds in 96 cost more than 300k euros now.
a local town has more than 1000 east europeans staying ;total pop less than 5000
this i believe is replicated around the country.
and these immigrants are of course renting many houses as well as building them
of course they are also displacing many vulnerable irish workers such as shop assistants etc_pushing them on to welfare
if they is a downturn in construction ,thousands  maybe up to200000 immigrants will leave and there will be an enormous amount of empty houses that cant be rented
no idea what the vested interests will do
but of couse the gov dont care about the ordinary joe soap
thats why they want to enslave everyone they possibly can to an exorbitant mortgage
i believe the cost of housing is used like a giant stealth tax on a necessity
great for gov and landlords
i suppose the landlords will still get big gov paid rents for unemployed and welfare people
maybe the gov could encourage rich foreigners to settle in ireland or asylum seekers who would give landlords a big fat gov rent cheque 
no i think they cant wiggle out of this one and there is going to be a definite price correction 
as a ftb  i will not buy until there is a big correction
house prices in germany are less than half what they are here


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