# Future Shock: Property Crash



## ButtermilkJa

For me, this programme is only confirming what I already thought would happen. For others, it's probably sensational reporting. Which are you?

For those who didn't see it... [broken link removed]


----------



## ClubMan

I couldn't hear most of what was being said over the high level ominous background music so mentally switched off and started reading _AAM_. At least it wasn't accompanied by _George Lee's _doom laden tones or I might have committed suicide.


----------



## nicelives

was a very good programme and kind of described what is already happening, hopefully it won't be as severe as the worst case scenario presented though. You have to live somewhere.


----------



## ButtermilkJa

Yeah, most of it was what's already happening. Although I thought the fact that some EA's and some Bank's were bowing out of the property market says a lot.


----------



## rob30

The quirky filming style made me sea sick!
Still though, some of it was just too muck, like the brain tumour attributed to the stress. It was a bit one sided, not what I would expect from a public service broadcaster.
The Joe Duffy show should be interesting tomorrow if peole are really spooked.


----------



## GeneralZod

All the usual arguments that have been rehearsed on AAM a million times.

I like a good disaster movie so enjoyed it.


----------



## dockingtrade

Excellent program, i do think people are in denial . I d like to hear th other side and what can be done to soften the blow. Its interesting to hear that very little of the ssia money is being cashed.Maybe thats a good thing?


----------



## ClubMan

rob30 said:


> The quirky filming style made me sea sick!
> Still though, some of it was just too muck, like the brain tumour attributed to the stress.


I was only listening at that stage and for a moment, when I heard that comment, thought that I was listening to an episode of _C4's Brass Eye _or something.


----------



## Luternau

Thought is was sensationalised for max effect. Some points of the programme are valid, but they were played out to max impact.  As the point was made that asset markets like property increase and fall on the basis of sentiment. It would be terrible if this type of programme was to the basis for a change in sentiment.
Property purchases can only be made on the basis of each purchasers own circumstances and sentiment-not that of other people. Personally I would prefer to rent in a nice location-close to work or wherever rather than be saddled with a 1700 per month 35yr mortgage-which is in effect renting from the bank for about 16years. Renting also carries less risk, less cost and more flexibility. I am a home owner and investor but i have no problem paying rent if the circumstances suit it.
My 2 cent worth!


----------



## KalEl

I thought it was reasonable enough until the "fast forward bit" at the end...then it descended into tabloid farce.


----------



## monkeyboy

I thought 2 things were especially bad.

A. The brain tumour section. What value, other than scaremongering, can this add to what was presented as an economic analysis of current situation.

B. The "what If " stuation at the end, where specific scenarios were analysed and specific figures quoted. This only lacked a hurried and mumbled voice over, a la the Simpsons where :
"these figures are for illustration purposes only and may not be accurate......."

Of course many people in any of those specific brackets will take fright to being pointed out in such a way.

I agree with much of what was discussed but it is easy to cherry pick past examples from other economies and match them with hand picked current signals.

All in all they could well talk up the property bust that MacWilliams has been forecasting for years.


----------



## monkeyboy

ButtermilkJa said:


> Yeah, most of it was what's already happening. Although I thought the fact that some EA's and some Bank's were bowing out of the property market says a lot.



I think the HOK Savills thing is a bit over stated.

ie HOK know what s ahead so pulled out.......

but...

Savills, the naive muppets, bought a ship waiting to sink??


----------



## Brendan Burgess

I have moved this to the Letting Off Steam Forum to restrict it to Frequent Posters. 

We are not going to allow another long repetitive conversation on property prices. Please limit your contributions to discussion of the programme.

Brendan


----------



## rob30

Will this be available to view online on rte, or do they only put their own output on their site? I know a few people abroad who would be interested in seeing it. Or will there be an illegal copy on youtube some time? (None yet!)


----------



## LDFerguson

Richard Curran is on a winner with this one.  He presents a programme about the Irish national obsession so he's guaranteed healthy viewing figures.  He goes for a heavy negative bias to really get the attention of anyone who's already feeling nervous given the slowdown.  If a crash does happen he lays claim to calling it.  He refutes all allegations that he may have contributed to it.


----------



## Luternau

just thinking
the first gulf war was the worlds first live telivised war from hundreds. Perhaps with the media interest in the Property crash Irelands will become the first live telivised property crash, where we will be going live to our reporter in downtown suburbia wher another person has just gone in to negative equity and to Charlie for another live reposession! And thats not even mentioning wht TV3 or Sky would be up to! ;-)


----------



## KalEl

LDFerguson said:


> Richard Curran is on a winner...If a crash does happen he lays claim to calling it. He refutes all allegations that he may have contributed to it.


 
Without doubt this programme will cause a degree of hysteria...as a previous poster said the Joe Duffy Entertainment Show should be interesting tomorrow. This programme will have been the first prediction of woe many people have seen. Easy to forget that in our AAM world...


----------



## monkeyboy

rob30 said:


> Will this be available to view online on rte, or do they only put their own output on their site? I know a few people abroad who would be interested in seeing it. Or will there be an illegal copy on youtube some time? (None yet!)


.


----------



## newkid30

Tabloid journalism at it's best.

Some valid points definitely but sloppy, poor sensationalist journalism.  Thought RTE could do a bit better than this, very disappointing.


----------



## Amygdala

For years there has been nothing but "property porn" broadcast into peoples home on that personalised billboard we all love(tv).  That was the second program with a negative outlook on property to my recollection .


----------



## hmmm

It highlighted why a "balanced opinion" is impossible. The bulls are going to be right or the bears are going to be right and there is no middle ground here. The "soft landing" theory has always been nonsense, this program has made it clear to joe punter just why this is.


----------



## Perplexed

I think a programme like this can contribute to a property crash.

If I was a FTB desperately trying to get on the property ladder it would definitely make me scared at the idea of taking out a big mortgage. The idea of negative equity is anybodys worst nightmare.

We've lived so long with the boom that perhaps some people need to be shown that property can go the other way. I've lived through poor times before but there's a generation out there who have never had to cut back & might find it very difficult to do so.


----------



## Ravima

I thought that there were many assumptions made, but no 'health warning' that these were assumptions.

one was that USD/EUR would go to 1.70; another was that unemployment would rocket; another was that there would be thousands of forced sellers; another was that there would be no buyers and it went on.

They forgot to include the possibility of global warming causing desertification in ireland, hence the country being uninhabitable; the possibility of global warming causing biblical flooding in Ireland, drowning all properties under tens if not hundreds of feet of water; the possibility of a nuclear holocoust causing the world to be uninhabitable and lastly, the end of the world, where all would be  housed either in hell or heaven.

On a more realistic note, I felt that even if prices fall, it should not cause a problem unless one cannot afford the repayments and this can happen even if prices rise but some misfortune befalls the owner. 

If there are repossessions and people forced from their homes, they must still be housed and so the rental income will improve.   

of course, it will all come true somewhere some day - otherwise it would not be on the telly.


----------



## pinkyBear

I have alot of friends making a healthy living from Construction, none of them are particulary worried, and what people are failing to realise the housing is a subset of what is going on in the Construction Industry, there is comercial and Infrastructure (which takes up a large chuck of employment). 

To be honest, what we are seeing at the moment is a wait and see, there has been soooooooo much speculation in the news about stamp duty that people have decided to hold off. 

Interest rates are rising, no doubt and this is leveling off the price of housing which is no bad thing..


----------



## ButtermilkJa

pinkyBear said:


> ...To be honest, what we are seeing at the moment is a wait and see, there has been soooooooo much speculation in the news about stamp duty that people have decided to hold off....


I'm starting to come around to this point of view. One of the points mentioned in the programme was that FTB's make up the vast majority of borrowers (€8bn of a total of €11bn borrowed). If SD is reformed for these buyers then the market should pick up pace again.


----------



## shanegl

I find it hard to believe that a programme like this will have any impact on sentiment. Did George Lee's _Boom_ suddenly drive thousands to seek work in the civil service?


----------



## Vanilla

I was listening to George Lee on Turbridy this am. He said when the banks found out this programme was being made they 'put the word out' to people not to participate. How did they do that, I wonder?


----------



## shanegl

Which people was he talking about?


----------



## ubiquitous

rob30 said:


> The quirky filming style made me sea sick!



I wondered if this was specifically designed to induce stress in the viewer? Its very hard to think clearly when tv images are wobbling all over the place in front of you.


----------



## Firefly

I thought this program was complete trite. Totally unbalanced. A few valid points were made but nothing new. The sentiment thread on AAM has much better views/points (even if I don't agree with a lot of them). 

Firefly.


----------



## NorfBank

So the Euro is going to hit €1.70 against the USD and while the Euro rockets, the ECB is going to keep increasing rates?
Sure. That's gonna happen. 
At least I know where my SSIA money is going, a new bunker, a tin hat and copious amounts of non perishable goods. It's all over. We're all gonna die!!!!!!!!!! (probably of a heart attack/brain tumour caused by the stress of a property crash).


----------



## LDFerguson

> I find it hard to believe that a programme like this will have any impact on sentiment. Did George Lee's _Boom_ suddenly drive thousands to seek work in the civil service?


 
Maybe not on it's own, but programmes like this, in conjunction with other negative viewpoints can definitely have an impact on sentiment.  If you were considering trading up to a bigger house and a bigger mortgage and then get cold feet having watched a programme like this and read a few similar stories, that's one less buyer in the market.  If too many people join you, that's a problem for the market.


----------



## jmayo

Firefly how would you balance the program? Wheel out someone from Estate Agents who is telling you everything is rosey and will always be so.  Are we going to be the first ever economy to be sustained by Public Service and Housing Construction.


----------



## shanegl

Not going on about tumours or USD/EUR 1.70 would be a start.


----------



## soma

LDFerguson said:


> Maybe not on it's own, but programmes like this, in conjunction with other negative viewpoints can definitely have an impact on sentiment.



Were you (or others) complaining when 10 years of TV property porn, "flip this house" and "I'm an adult, but I desperately need to be part of a Ponzi scheme" had nothing but _positive_ impacts on sentiment?


----------



## jmayo

shanegl, have to say when I heard the bit about tumours I thought the missus had turned over to one of those health programs again.  I thought that was sensationalism but that is now what goes for TV, we have to have our attention grabbed by some awful dire piece of information.      The dollar will not have to go 170.  US/multinational companies are moving operations all the time, they are constantly looking for cheaper locations.  Ireland no longer fills that space, so bye bye multinationals. We still do not have indigenous enterprises numerous or large enough to fill the void left by the multinationals.  Again it is back to competiveness.


----------



## colly

Perplexed said:


> I think a programme like this can contribute to a property crash.
> 
> If I was a FTB desperately trying to get on the property ladder it would definitely make me scared at the idea of taking out a big mortgage. The idea of negative equity is anybodys worst nightmare.
> 
> We've lived so long with the boom that perhaps some people need to be shown that property can go the other way. I've lived through poor times before but there's a generation out there who have never had to cut back & might find it very difficult to do so.



I agree. Many property books say that you should watch the media very closely in times of uncertainty, as they start the frenzy itself.

I am also thinking of holding off, negative equity, no thanks


----------



## z107

> On a more realistic note, I felt that even if prices fall, it should not cause a problem unless one cannot afford the repayments and this can happen even if prices rise but some misfortune befalls the owner.


I've read this (and similar) a couple of times now on AAM. If (or when) prices fall it will have an impact on the whole economy. So much of the Irish economy seems to be tied up in property and related industries that it will be particularly bad. 

Companies stop hiring and investing, and people who once could afford repayments no longer can. Taxes also increase to pay for all the unemployed people. People stop buying stuff and the whole cycle spirals downwards.

A crash wont just stop at property.





> I agree. Many property books say that you should watch the media very closely in times of uncertainty, as they start the frenzy itself.
> 
> I am also thinking of holding off, negative equity, no thanks



Self fulfilling prophecy.


----------



## nelly

umop3p!sdn said:


> People stop buying stuff and the whole cycle spirals downwards.
> 
> A crash wont just stop at property.



I missed the programme, dunno am i glad or not. 
Were there any suggestions at all for preparation for the bust? Is it the case that we should just dash for the last remaining jobs in the civil service, stick our fingers in our ears and sing loudly?
Did they mention the softer landings other countries have experienced perhaps?


----------



## Markjbloggs

Luternau said:


> just thinking
> the first gulf war was the worlds first live telivised war from hundreds. Perhaps with the media interest in the Property crash Irelands will become the first live telivised property crash, where we will be going live to our reporter in downtown suburbia wher another person has just gone in to negative equity and to Charlie for another live reposession! And thats not even mentioning wht TV3 or Sky would be up to! ;-)



Showing your youth there - Vietnam and the Falklands were probably the first televised wars, and the Texas property crash in the mid-80's was also extensively covered on TV.

BTW, Ireland does not amount to any great international interest, despite the recent success of the economy.


----------



## pennypincher

Any chance this is available somewhere to download,tried google video this morning but it's not there.


----------



## Dreamerb

NorfBank said:


> So the Euro is going to hit €1.70 against the USD and while the Euro rockets, the ECB is going to keep increasing rates?


Yeah, that's one I picked up. 

I also found it irritating that in discussing the UK crash in the '90s they made reference to interest rates doubling, without mentioning what those rates _were_, which is surely relevant. A doubling from, say, 7 to 14 percent will have a much more painful (indeed, potentially calamitous) effect for the people at the margins that 3.5 to 7. It's disingenuous, or lazy, or possibly both, to leave out such pertinent information. Predictions had a high degree of utterly spurious accuracy, while facts were sometimes thin on the ground.

I did wonder, too, when they'd start invoking the 2008 outbreak of bubonic plague for further market unease, causing an extra 2.741 per cent drop in prices.


----------



## pinkyBear

> I am also thinking of holding off, negative equity, no thanks


 
Colly I would disagree with you on this, if it is a home you are buying. At the moment there appears to be alot of speculation about stamp duty and at the end of the day life is life and peoples situations change. A move up the ladder or down the ladder occurs in most peoples lives.

If you were to try and buy you could put in an offer well below the asking value.. 
Stamp Duty changes may / not come in to force in the next buget - either way the market will get back to normal... And possible short term dips will recitify itself...


----------



## delboy159

nelly said:


> Did they mention the softer landings other countries have experienced perhaps?


 
An academic on the programme stated that of the 49 (correct me if I'm wrong) property booms researched, not one had a soft landing.  Saying that, maybe they just omitted examples of booms where a soft landing did occure or couldn't find examples even if they are out there.


----------



## Duplex

Iano said:


> I watched snippets of the programme but had to switich if off so many times, to watch something more believebale.....like LOST on RTE 2
> 
> In my view, the programme was sensationalist and alarmist tabloid journalism at its very worst.
> 
> Richard Curran has made a complete fool of himself and has done his career damage by trying to create a name for himself by producing a one-sided, opinionated piece of trash. When you read the bulletins from late last night and this morning, and if you listened to Newstalk this morning, you will see that he has single-handedly managed to create panic amongst the common people.  First-time buyers, and people seeking to move up the property ladder, have been sucked in by his report and fear that the end of the property world is nigh.
> 
> Well he has certainly ignited the fire that may just bring about the fallout that he so naievely predicted.
> 
> I used to enjoy Monday nights on RTE 1 - they had some good investigative journalism features, but what they broadcast last night was less investigative and more one-sided and opinionated. And it has created a reaction akin to the 'War of the Worlds' radio broadcast in the US.
> 
> Shame on RTE for broadcasting it.




I'm curious as to how you have formed an opinion on a programme, you only partially watched.


----------



## Guest118

Its funny listening to some of the opinions on here, why dont yous all go and give your expert opinions on what is goin to happen.

Its about time someone told the country what can happen on the flipside of the coin, rather thatn listen to the jingle jangle of the EA's piggy banks as they get bigger and bigger.


----------



## monkeyboy

bassface said:


> Its funny listening to some of the opinions on here, why dont yous all go and give your expert opinions on what is goin to happen.
> 
> Its about time someone told the country what can happen on the flipside of the coin, rather thatn listen to the jingle jangle of the EA's piggy banks as they get bigger and bigger.



How do you propose how Joe Bloggs AAM poster gives their expert opions if not on AAM.
People here are in the majority , if at all, not in the press or media and thus do not have the oportunity apart from finacing their own TV show to express their opions.
AAM, internet generally, phone in shows and our votes are about the only way Jo Bloggs gets their voice heard.

It does show the power of the media.


----------



## ubiquitous

Luternau said:


> just thinking
> the first gulf war was the worlds first live telivised war from hundreds. Perhaps with the media interest in the Property crash Irelands will become the first live telivised property crash



Er...,As well as the Texas property crash in the mid-80's (mentioned by Markjbloggs above), the UK and Japanese crashes of the 1990s were covered to death on TV.



Dreamerb said:


> I also found it irritating that in discussing the UK crash in the '90s they made reference to interest rates doubling, without mentioning what those rates _were_, which is surely relevant. A doubling from, say, 7 to 14 percent will have a much more painful (indeed, potentially calamitous) effect for the people at the margins that 3.5 to 7.


That thought occurred also to me. Someone last night mentioned a calamity in the UK when rates went to 14-15%. Nobody has suggested that eurozone rates will reach anywhere near these levels in the foreseeable future so the point was pretty much irrelevant.



> Richard Curran has made a complete fool of himself and has done his career damage by trying to create a name for himself by producing a one-sided, opinionated piece of trash .... he has single-handedly managed to create panic amongst the common people.



Really? I doubt it. David McWilliams, for one, has been making the exact same points on RTE for several years now and the sky hasn't fallen as yet. Neither has his career or credibility suffered.


----------



## Betsy Og

Feck it, my reply got wiped somehow so he goes again ......

Main points of programme I thought were:


Building must slow down  - couldnt go on forever at rates it was.
Rents may start to soften as supply starts to meet demand and some of immigrant workers decide to go home.
Interest rates could go to 5% or so - not historic peaks and if the stress testing actually goes on like it should then this, of itself, shouldnt crucify borrowers.
I dont think any of the above points are surprising, havent they been fairly clear for 18 months or more.

Lessons I'd take from it:


Not a great time to be entering the market as a speculator as capital appreciation uncertain or low and rents softening.
Mightnt be the worst time for first time buyers presuming they can take a good few interest rate hikes (this should go without saying). I dont think theres any point in first time buyers waiting because of stamp duty because most of them are exempt anyway and even if stamp duty gets abolished altogether then they'll still pay that extra money to the builder. FG's plan to stage a 3 year lead in looks disastrous to me.
The one piece of the puzzle I dont buy into from last nights programme is that theres some other major shock going to cause the tumble. US economy was primarily used last night  - I thought it was doing fairly well of late. Also big scaremongering about exports and manufacturing - it seems obvious enough that in recent decades (so plenty of warning) and into the future Ireland is not going to be a manufacturer - so why is this now trumpeted as new dangerous phonomenon.

Last night was mostly about talking ourselves into a crash.


----------



## KalEl

One salient point was the academic who thought prices should go down but admitted he wouldn't consider selling his house and renting it back...we've always got to remember the great intangible when it comes to the Irish Property market ; Most of us are obsessed with owning our own home and a rake of other properties, more so than almost any other nation.
Thought my old lecturer Moore McDowell was quite amusing criticising government policy and intervention...just ring your brother and sort it out!


----------



## Glenbhoy

Iano said:


> IIn my view, the programme was sensationalist and alarmist tabloid journalism at its very worst.


Coldn't agree more, dire stuff - it reminded me a lot of 'the great global warming swindle' in that it probably had some decent points, but it was so unbalanced that they got lost somewhere.  As for the look at the future, well, I had to laugh, cringeworthy.
Why will programme makers not show us balanced debate?


----------



## soma

Glenbhoy said:


> Why will programme makers not show us balanced debate?



Again were you (or others) calling for a balanced debate during the years when coverage was almost exclusively positive & optimistic towards property?

Parts of the program (I didnt watch the final quarter or so) that I saw were undoubtedly awful tabloid journalism (how I cringed during that 'brain tumour' scene), but it did seem to raise some salient issues that your average punter should at least consider when pondering their (most likely) largest ever financial transaction.


----------



## AKA

I didn't like the 2 examples given of people finding it tough.

1.  One girl borrowed 215K at 100% mortgage on a 1 bed apartment - her repayments are supposed to be 1500 a month...

I borrowed 210K over 39 years - with mortage interest relief my repayments are less than €900 a month at rate of 3.8% (1.05% over ECB).  Now even with an interest rate of 5% over 20 years you are looking at approx €1420.  Hardly a typical FTB.

2.  And the idea of a couple on 56K combined income borrowing approx 370K with an additional deposit of 40K or so just silly.  Who would give approval or what broker would even suggest figures like that?


----------



## Luternau

"Er...,As well as the Texas property crash in the mid-80's (mentioned by Markjbloggs above), the UK and Japanese crashes of the 1990s were covered to death on TV."

I said 'Live TV' by that I meant (jokingly) that there would be property crash reporters live and on the ground, with real time reporting on another foreclosure, another repossession, another case of negative equity, from all corners of Ireland....Sky News style...Surely this format was not available pre 2000? 
Anyway guys, I was being humerous...after all no one would want to watch that sort of stuff on the news 24hrs a day?  Now I am being sarcastic!! ;-)


----------



## Dreamerb

robd said:


> The relative increase in replayments for a 3.5 to 7 % and 7 to 14 % (or 2 % to 4%) increase isn't linear though. The repayment increase is very severe for both.


I know - I ran the numbers. 



robd said:


> What people can borrow is based on the cost of repayments, so at 7% they could not borow the same as at 3.5% (hence the decrease in amount in my calculations).


Borrowing potential isn't especially relevant when you're talking about existing mortgages - my point is that the effects are different, depending on the starting point. Yes, a 55% increase is dramatic and painful, and there are people who will not be able to afford it. But 83% is in a different league, and is likely to be the difference between making painful degrees of cutbacks and actually not having enough money to live on for a substantially larger number of people. 



robd said:


> Also the calc shows that someone who could borrow €500,000 could only borrow €320,0000 if rates doubled.
> 
> I think the comparison with the UK is a good and valid one and I believe the primary factor governing house prices is the cost of borrowing (controlled by interest rates - in our case controlled by Mr Tricket et. al in the ECB).


I disagree, but only in part. Affordability will not drop _as far _because of the different relevant starting points (and I don't think, in any case, that rates are likely to double from the current levels). But assuming the ECB base rate rises to 5% over the next 18 months - not far-fetched, but not a foregone conclusion either - then affordability will reduce significantly. It's the people at the margins, those with the 95-100% mortgages on one bedroom apartments, who may find themselves in enormous difficulty because they'll have precious little flexibility. I suspect demand for those one beds is particularly vulnerable in a climate where buyers are nervous: they'll seek to buy properties which give them greater potential financial flexibility and I think we'll see the price differential between one and two bed apartments increasing - and not a differential based on increases in either. 

d - still, notwithstanding, believing in a soft landing!


----------



## ClubMan

ChunkyLover said:


> Did anyone watched last nights RTE's Property Crash programme? Any comments?
> 
> I am about to sign contracts in a week days time, any suggestions? Should I wait or not.
> 
> Your comments are greatly appreciated.


Obviously it makes sense to organise one's life around what was on telly the night before.


----------



## demoivre

soma said:


> Again were you (or others) calling for a balanced debate during the years when coverage was almost exclusively positive & optimistic towards property?



What are you on about? The doomsters  were always there, many of them were calling the top in 1999 and repeatedly every year thereafter. When interests rates were heading down in nominal terms post 9/11  did RTE run a programme  - Future Surprise: Property Boom ? What I saw of last nights effort was absolute sensationalist garbage and I am not bullish about all property.


----------



## demoivre

room305 said:


> Trash journalism is trash journalism, no matter which side of the coin it represents.



Couldn't agree more.


----------



## decembersal

The purchaser of our house has just pulled out...don't think this hypothetical programme helped. Just think it's a bit of a coincidence. am gutted.


----------



## Duplex

room305 said:


> -- American Experience, 'The Crash of 1929'
> 
> Haven't watched the programme yet but I'll have a look tonight. I will say this though - if it's hyperbole-laden trash journalism, bears only do themselves a disservice by pretending it serves as balance to the kind of faff SherryFitz and their ilk spout on a daily basis. Trash journalism is trash journalism, no matter which side of the coin it represents.


 
I can’t imagine that any mainstream media organisation would be willing to tackle the big issues, that are the primary drivers of the matter under discussion.   The fact that RTE addressed the issue at all, should be lauded no matter what level it was pitched at.   That been said the substantive points raised by several learned academics in the program, are comfortably dismissed as doom mongering by those who have a different view.  The ultimate proof of the veracity of the arguments  will only come with time .


----------



## conor_mc

room305 said:


> -- American Experience, 'The Crash of 1929'
> 
> Haven't watched the programme yet but I'll have a look tonight. I will say this though - if it's hyperbole-laden trash journalism, bears only do themselves a disservice by pretending it serves as balance to the kind of faff SherryFitz and their ilk spout on a daily basis. Trash journalism is trash journalism, no matter which side of the coin it represents.


 
I didn't think it was trash journalism.

It dealt effectively with three main risks to the property market, but it did go a bit tabloid with the hypothetical crash landing, which they did say was how it *might* play out. Those quick to dismiss this program seem to be claiming that 1.70 to the euro was a prediction - it wasn't.


----------



## demoivre

Duplex said:


> I can’t imagine that any mainstream media organisation would be willing to tackle the big issues, that are the primary drivers of the matter under discussion.   The fact that RTE addressed the issue at all, should be lauded no matter what level it was pitched at.   That been said the substantive points raised by several learned academics in the program, are comfortably dismissed as doom mongering by those who have a different view.



 lol.  How many of these academics, who are home owners, are going to practice what they preach and sell their homes to benefit from  their predictions ? When I 'm  bullish about an asset I'm  long of it when I'm bearish I short it !


----------



## Sunny

I was half expecting to wake up today to find my foreign owned company  telling me my I was too expensive so they are moving to Poland, my house taken off me and my wife running off to Spain to retire with the plumber.


----------



## conor_mc

demoivre said:


> lol. How many of these academics, who are home owners, are going to practice what they preach and sell their homes to benefit from their predictions ? When I 'm bullish about an asset I'm long of it when I'm bearish I short it !


 
Cos its their home first, an asset second.

Actually, how many banks are buying up new property for branch networks/headquarters, or how many estate agents are expanding rather than selling up?

Seriously - you're calling into question the motives of individuals who have nothing at stake except their reputations. And yet somehow that seems to be less palatable to you than believing a salesman whose employer is overseeing mass exploitation of the young people of this country for their own profit.

Yeah, you're right. Maybe we shouldn't believe people who have no profit to be made from the advice they dish out.


----------



## GeneralZod

Vanilla said:


> I was listening to George Lee on Turbridy this am. He said when the banks found out this programme was being made they 'put the word out' to people not to participate. How did they do that, I wonder?



The message obviously didn't reach Ulster Bank's Pat McArdle. He was one of the people interviewed.


----------



## paddyd

KalEl said:


> I thought it was reasonable enough until the "fast forward bit" at the end...then it descended into tabloid farce.


 
This would be my sentiments exactly. Was like watching Blair Witch in parts. I noticed that it was in the 'RTE Factual' bracket in the credits, but was mainly trying to use a domino effect of future potential issues to create its core message.

Still, it was hard not to keep watching.

Unless I'm incorrect, Clonee was the only localiesd area mentioned in relation to recognised falls thus far, which was perhaps a bit unfair, even if its true. But i guess they couldn't cover everywhere.


----------



## beattie

Prime Time did a follow up with Prof Kelly from UCD & Jim Power from Friends First. I have never seen a property bull so rattled on TV in Ireland before. Maybe last nights program has had a bigger effect than I thought.


----------



## KalEl

beattie said:


> Prime Time did a follow up with Prof Kelly from UCD & Jim Power from Friends First. I have never seen a property bull so rattled on TV in Ireland before. Maybe last nights program has had a bigger effect than I thought.


 
I would totally disagree with you there.
Jim Power made his points clearly and eloquently. Professor Kelly was merely ranting that there's never been a boom without a bust and the Arizona comparison was ridiculous. Arizona is a holiday/retirement area which got a bad name for attracting a dodgy element.
Power made great points...an increase in employment from 1 million to 2 million, 1 million people aged 25-35 creating a natural demand etc etc. And his debunking of the programme's "scenarios" was fair enough.


----------



## beattie

KalEl said:


> . Professor Kelly was merely ranting that there's never been a boom without a bust .


 
Merely ranting? He said that he investigated many markets which had a bubble like ours and looked and what happened afterwards. I would hope that a Professor employed at one of our top universities would do more than 'rant' when he is trying to make a point on something he has researched.


----------



## KalEl

beattie said:


> Merely ranting? He said that he investigated many markets which had a bubble like ours and looked and what happened afterwards. I would hope that a Professor employed at one of our top universities would do more than 'rant' when he is trying to make a point on something he has researched.


 
Sorry, I was referring more to his delivery which is to be expected...after all he is a university academic and Jim Power is a polished performer used to appearing on television.
I just think Power came across better...was impressed with his annoyance at the suggestion he had a vested interest also.


----------



## Brendan Burgess

The debate between Kelly and Power is what was missing from the programme last night. Have the two conflicting views expressed and challenged simultaneously. 

That is what I have been trying to get someone to do on Askaboutmoney for months without success. People don't seem to be interested in assessing the evidence and arriving at a result. They decide that property is going to rise or property is going to fall and then collect the evidence.

I wonder if the Kelly and Power debate had been planned or was it a result of the criticism of the one sided presentation last night?

Brendan


----------



## Brendan Burgess

I will remind people that this is not a free for all discussion of property prices - it should be limited to the programme last night and follow up today.

I have had to remove a lot of off topic posts from this thread.

brendan


----------



## KalEl

Brendan said:


> The debate between Kelly and Power is what was missing from the programme last night. Have the two conflicting views expressed and challenged simultaneously.
> I wonder if the Kelly and Power debate had been planned or was it a result of the criticism of the one sided presentation last night?
> 
> Brendan


 
The debate tonight was great television...they were actually looking at each other with contempt, each believing the other was talking complete nonsense. I'm just not convinced that stating that something has never happened before is a strong argument against it happening.


----------



## beattie

KalEl said:


> Sorry, I was referring more to his delivery which is to be expected...after all he is a university academic and Jim Power is a polished performer used to appearing on television.
> I just think Power came across better...was impressed with his annoyance at the suggestion he had a vested interest also.


 
Yes you have a point about the respective appearances, but the incredulous and exasperated look on Jim Power's face when Prof Kelly was mentioning some stat or another was quite telling IMO. In the past when other property bulls have been on such programs they have never had reactions like that (well the ones I have seen anyway). 

I wouldn't totally believe Jim Powers assertion that he isn't a cheerleader for the property boom. Friends First will indirectly make money from clients who have done well from it.


----------



## KalEl

beattie said:


> I wouldn't totally believe Jim Powers assertion that he isn't a cheerleader for the property boom. Friends First will indirectly make money from clients who have done well from it.


 
It's a regular jibe used by people who are negative about Irish property...you could see he was deeply offended by it and rightly so.
It's basically an accusation of dishonesty.
I just saw Power being able to give reasons x, y, and z all of which are true to support his belief that we wouldn't see a crash. Kelly's didn't deny those statistics, he just kept repeating that in the past there's always been crashes.
Fascinating to see such diametrically opposed viewpoints...they disagreed fundamentally with each other, both incredulous at the other.


----------



## beattie

KalEl said:


> I just saw Power being able to give reasons x, y, and z all of which are true to support his belief that we wouldn't see a crash.
> Fascinating to see such diametrically opposed viewpoints...they disagreed fundamentally with each other, both incredulous at the other.


 
He didn't seem very sure footed when the presenter (Mark Little?) quizzed him about the yields on property that investors could expect. 

It was good TV though, for too long VI's have had free run of the airwaves and print media (the IT being the worst offender). I think we can expect more of this over the next few months, it could be even more interesting than the general election.


----------



## KalEl

beattie said:


> He didn't seem very sure footed when the presenter (Mark Little?) quizzed him about the yields on property that investors could expect.
> 
> It was good TV though, for too long VI's have had free run of the airwaves and print media (the IT being the worst offender). I think we can expect more of this over the next few months, it could be even more interesting than the general election.


 
I agree...it is pretty annoying to see auctioneers and other such "professionals" making outrageous claims without being forced to back them up. Remember that Sherry Fitzgerald advert with the baby saying property has gone up by 100% in the last decade...and at that rate an apartment will cost €2 million by the time he's an adult!
Jim Power did reel off statistics to back up his viewpoint...nothing vague, nothing wooly.
Was there anything on Joe Duffy today about the programme? I heard George Hook and Matt Cooper...not bad.


----------



## z107

> People don't seem to be interested in assessing the evidence and arriving at a result.



I don't believe it is possible to do that. There are far too many factors to analyse, many of which would be subjective or at best qualitative.


----------



## ClubMan

beattie said:


> I wouldn't totally believe Jim Powers assertion that he isn't a cheerleader for the property boom. Friends First will indirectly make money from clients who have done well from it.


Surely they have as much if not more of a vested interest in getting people out of property and into equities? This accusation is pretty facile in my opinion.


----------



## whathome

ClubMan said:


> Surely they have as much if not more of a vested interest in getting people out of property and into equities? This accusation is pretty facile in my opinion.


 
I wouldn't be so sure, I don't think people are likely to invest in anything when they're very worried or struggling with their primary investment in their home.


----------



## Ceist Beag

One point about that lad Kelly - his closing advice made me laugh. Basically he said to first time buyers - "Don't buy now as the market is going to collapse because people cannot sell" ... surely the first would have a direct impact on causing the second!!


----------



## whathome

If either of these programmes (Future Shock or Primetime) save even a few first time buyers from setting off at this time on the zombie like shuffle towards a possible financial nightmare then it's a good thing. Maybe a few more people at least will be aware of the very real risk they take on when buying property in the current market. 

Future Shock presented an alternative to the hype and rubbish that's been fed into the Irish media from vested interests over the past few years. It would have been better without the creepy music but the arguments were for the most part well formed and presented well.

The key thing for me is the educational factor, this kind of programme is necessary so that people fully understand that a property crash can happen. Property buyers need to take this into account when assessing the risk on a huge financial commitment.

The programme didn't say what would happen, it said what might happen. If the property market is based on solid fundamentals then Future Shock has absolutely no chance of causing a crash. If a property bubble exists however then the programme might help to deflate it before a bigger problem grows.

I can see from previous comments that Future Shock was difficult viewing for AAM posters that have borrowed heavily for property in recent years. No doubt that the financial institutions and estate agents will have been horrified that someone could present this view but fair play to Richard Curran for enlightening people to the risk.


----------



## paddyd

ClubMan said:


> Surely they [Friends First] have as much if not more of a vested interest in getting people out of property and into equities? This accusation is pretty facile in my opinion.


 
Not entirely.

Power does his bit last night on Prime Time to defend the property market, and low and behold, in todays Indo: *Friends First reopens Irish Property Fund*

Would certainly make me question his "we're not a vested Interest" claim. In fact, kinda makes him look a fool.

I had hoped Prime Time would bring some balance to the Future Shock arguement, but the opening piece just talked about (potential) losses of 40-60%, as opposed to Future Shocks claim of 35%. They still tried to be sensationalist.


----------



## ubiquitous

Its laughable to suggest that someone of Jim Power's experience and track record is a fool. Its also laughable to suggest that his defence of the Irish property market is motivated by the fact that Friends First are opening a property fund today. 

A short- or medium-term dip in property prices would actually play into the hands of a property fund whose primary purchase is to buy (not sell) property and who therefore have a vested interest in buying up properties as cheaply as they can and holding them for the long term in order to eventually realise a capital gain on exit.

Had Power taken the opposite view last night people would have been accusing him of talking down the market to suit his employer.


----------



## conor_mc

ubiquitous said:


> Its laughable to suggest that someone of Jim Power's experience and track record is a fool.


 
Not having a go at Jim Power myself (at least he can debate his point, instead of spinning it) but surely history is littered with people of JP's "experience and track record" who have been made look very foolish by market reversals?

To think that he must be right because he's done well for himself is just as laughable.

Friends First may not have a vested interest directly in property, but they do have a vested interest in the continued prosperity of Ireland. Their problem is that Ireland and property are virtually inseperable at the moment.


----------



## ubiquitous

Jim Power is not infallible. For all I know his view on the property market may be 100% wrong. However, just because someone is wrong on a particular topic does not mean they are a fool. There is a big difference.


----------



## KalEl

ubiquitous said:


> Its laughable to suggest that someone of Jim Power's experience and track record is a fool. Its also laughable to suggest that his defence of the Irish property market is motivated by the fact that Friends First are opening a property fund today.


 
I agree...in fact it's pretty offensive to a man in Power's position. His argument was polished and backed up with facts. He believes in the fundamentals that have supported the property boom.
It's fair to attack auctioneers and lenders when they come out with wooly vested interest stuff but these consistent attacks on guys like Power, Hughes and McLaughlin are pathetic. Personal and professional integrity mean far more than spouting rubbish you don't believe in for your employer...and you could see this on Primetime when Power was visibly perturbed at the suggestion.


----------



## shanegl

Re: McLaughlin and Hughes, I find it very hard to believe that any economist for any bank would be allowed to publically talk down property. What they tell their employers in private may be another thing altogether. Their jobs are dependant on their employer's continued profitibility. I can't see how anyone could take their public statements as unbiased.


----------



## robd

ubiquitous said:


> Its laughable to suggest that someone of Jim Power's experience and track record is a fool. Its also laughable to suggest that his defence of the Irish property market is motivated by the fact that Friends First are opening a property fund today.
> 
> A short- or medium-term dip in property prices would actually play into the hands of a property fund whose primary purchase is to buy (not sell) property and who therefore have a vested interest in buying up properties as cheaply as they can and holding them for the long term in order to eventually realise a capital gain on exit.
> 
> Had Power taken the opposite view last night people would have been accusing him of talking down the market to suit his employer.



The primary purpose of any type of fund is to sell units of that fund.  They make their money based on a yearly % fee of the fund value.  The fund needs to perform well to attract interest and thus money into it (and thus increase the earnings of the fund manager/provider).  Buying and selling of poperties or equities etc. is merely a consequence of the primary objective.  If they are buying properties that are decreasing in value then the unit price of the fund would also be decreasing and thus the interest in the fund may be poor, making the primary objective hard. I also belive it would be hard to exactly value a property fund as the value of property is somewhat subjective compared to equities.


----------



## mollser

I notice numberous VI's have come out slating the program, saying that 'it was oneside, will cause a crash etc etc'.  If the market was so stable, no TV program on its own could possibly cause a crash.

Secondly, I note that the IT came with a supplement, 'Property Barometer' sponsored by MyHome.ie.  In the editorial, under "The Buy Now or Wait" debate, it closes with 





> "First time buyers would be well advised to have a serious look at buying now given the wide choice of property available in what has become a buyers market".


  Talk about not presenting both sides of the argument - this is dangerous propaganda for many FTB's on the brink of buying as it, too, does not outline risks etc...

Also then comes the laughable 4 page spread selectively taking 2 periods to compare property prices - the second being the 'last 12 months'.  Every county, bar Louth, showing a nice green upwards arrow.  No notice whatsoever is drawn to the comparatives from Q406 to Q107 showing sizeable drops in most markets, including my beloved South Dublin of some *€32k.*

Personally I found the program one sided and a bit over the top, however if thats what it takes for people to look closer at the equally one-sided propaganda coming from the other side to make a balanced opinion ala the IT today, I'm all for it.


----------



## KalEl

mollser said:


> I notice numberous VI's have come out slating the program, saying that 'it was oneside, will cause a crash etc etc'. If the market was so stable, no TV program on its own could possibly cause a crash.
> 
> Secondly, I note that the IT came with a supplement, 'Property Barometer' sponsored by MyHome.ie. In the editorial, under "The Buy Now or Wait" debate, it closes with Talk about not presenting both sides of the argument - this is dangerous propaganda for many FTB's on the brink of buying as it, too, does not outline risks etc...
> 
> Also then comes the laughable 4 page spread selectively taking 2 periods to compare property prices - the second being the 'last 12 months'. Every county, bar Louth, showing a nice green upwards arrow. No notice whatsoever is drawn to the comparatives from Q406 to Q107 showing sizeable drops in most markets, including my beloved South Dublin of some *€32k.*
> 
> Personally I found the program one sided and a bit over the top, however if thats what it takes for people to look closer at the equally one-sided propaganda coming from the other side to make a balanced opinion ala the IT today, I'm all for it.


 
Don't you see that a programme like this and the coverage it's receiving on the airwaves and in the papers can bring about a crash?!
also, I think your analysis of the IT supplement is flawed to say the least. On the one hand you're claiming prices in South Dublin have dropped by €32K, then simultaneouisly you're attacking the IT for advising buyers that now might be a good time to buy as there are bargains to be had!
Back to the programme...Jim Power had rational arguments about the fundamentals of our economy which are driving the property market.
Professor Kelly's argument was a rant about other booms in different countries and sometimes regions (Arizona?!) alaways leading to busts.
So Power is saying here are the underlying factors which lead me to believe X. Kelly is saying what happened in the past leads me to believe Y.
I know which i think is more logical and reasoned.


----------



## conor_mc

KalEl said:


> Don't you see that a programme like this and the coverage it's receiving on the airwaves and in the papers can bring about a crash?!


 
Yeah, you see you can't have a crash without a bubble.

When will people realise that _rising_ house prices has been the problem, subsequent _falling_ house prices merely a resultant symptom!


----------



## mollser

KalEl said:


> Don't you see that a programme like this and the coverage it's receiving on the airwaves and in the papers can bring about a crash?!



Just like the onesided stuff coming from the VI's may have caused a frothy bubble??  As I said, if the market was so stable, no tv program on its own could possibly cause a crash!



KalEl said:


> also, I think your analysis of the IT supplement is flawed to say the least. On the one hand you're claiming prices in South Dublin have dropped by €32K, then simultaneouisly you're attacking the IT for advising buyers that now might be a good time to buy as there are bargains to be had!



My point is that those price drops are being camoflauged in there by a smoke and mirrors exercise using 12 month statistics!  The 'grab a bargain' viewpoint is one that could be extracted from it.  Another would be, wait for the current interest rate cycle increase to run its course and see what impact this alone has on the market, continue to save and hold your fire.  Which, IMO, would be RATIONAL thing to do, not jump 2 feet in because of MINOR price drops.  Whose to say that these drops won't continue - why buy now?? (This view is shared by most of my colleagues, and has been 'reinforced' by that show, which, IMO is good thing.)


----------



## jmayo

Did not Jim Power admit that if certain scenarios occurr then there would indeed be drop in house prices? 
His three scenarios were the following: 
1. Interest rates shoot up - they have increased by over 1.25% over last year and are forecasted to rise to 4% by summer. Important point here is we have no control over them anymore. 
2. Unemployment rises - well when building does slow, as forecasted by almost everyone on either side of argument, then because of the percentage of the work force involved there has to be a consequential increase in unemployment. 
Almost 81,000 units were completed in year 2005, not sure what completions are for 2006 and those forecasted for 2007, but can close to that number be sustained as Supply meets Demand? 
3. Multinationals close and leave - well Jim wake up and smell the roses, they are already downscaling and leaving. 
Here is sample headlines from amonst others, ElecltricNews, Breaking News and from RTE over last couple of years. 
05-07-05: BSN Medical factory in Thurles, County Tipperary is to lay off 40 of its 122 full and part-time workers in order to outsource manufacturing to Asia and the USA. 
03-08-05: Maxtor - which makes hard disk drives and storage products in Bray - is shifting production to Budapest. Around 24 positions will be affected. 
24-08-05 Quantum Corporation, which established its Irish operation in 1991, is to shut down the factory in Dundalk with loss of 250 jobs. Moving operations to Eastern Europe. 
21-02-06: NEC announce closure of Ballivor plant with loss of 350 jobs. Production moved to Malaysia. 
15-09-06: A total of 157 jobs are to go at Braun Oral B Ireland Limited in Carlow. 97 permanent jobs and 60 temporary jobs will be lost at the plant. 
20-12-06 Some 90 positions were axed by Creative Labs in Blanchardstown, Dublin. Firm announced it was to cut a further 140 jobs in the New Year. 
11-01-07: ClientLogic is to cut 138 jobs at its technical support centre in north Dublin. 
08-02-07: Pfizer's has announced that 65 jobs will be shed as a result of the closure of part of its main plant in Ringaskiddy. The company also says it plans to sell off its factory in Loughbeg and part of its operation in Little Island, where a further 480 people are employed. 
13-02-07: The loss of some 70 jobs in Alcatel-Lucent will represent an economic body blow to the Dublin West area. 
08-03-07: The mobile phone company Motorola is to shut its plant in Cork with the loss of more than 300 jobs. 

Add all the little job losses and what to you get? 
A fair amount of these jobs are the in the so called "high end knowledge based" area and not just jobs on assembley lines. The other noticeable point is that they are not only in ICT but also in Medical/Pharmaceutical. 
Will people only notice when someone like Dell announces it is moving operations to Poland? 
I do not claim that this list is comprehensive, but it does highlight the fact that we are haemorraghing jobs in mutlinationals operations as they seek lower cost locations.


----------



## Duplex

Well Jim Power did seem to suggest that the housing market was more than a little exuburent over the past couple of years, describing it as insane,  in the RTE Primetime discussion last night. 



> "If we saw another two or three years of _*the sort of insanity we've seen over the past couple of years in the housing market *_then I would agree with Morgan."


----------



## Sunny

Rates were never going to stay low. It was to Ireland benefit that they started to rise. We would have risen them earlier if we had control of them. Affordibility is the main issue and does not seem to be a problem yet. None of the banks are announcing loan loss provisions increases which you would expect to see if people were struggling.
House completions will probably fall to around 60,000 this year but this is only one sector of construction. We still need schools, roads, railways etc etc.
What about all the multinationals who have increased jobs recently. Not going to through a list but to give an example from my own industry finance. Citigroup recently announced 17,000 job losses worldwide so they could move to lower cost economies. 1400 people employed in Ireland. Number of job losses 0. Wachovia are setting up a large European operation here. Citco announced 250 jobs in 2006. Even Intel made a large investment in their plant as late as last year.
Not saying there aren't problems but there are two sides to every story. 
In my opinion one of the biggest problem this country needs to face up to is the inflationary pressures that state regulated industries like electricity and gas are creating. It is this that will drive foreign investment out of the country.


----------



## KalEl

jmayo said:


> Did not Jim Power admit that if certain scenarios occurr then there would indeed be drop in house prices?


 
Was I watching a different programme? He was taking the michael out of Little and Kelly, admitting that yes if your aunt had balls she'd be your uncle! That if v w x y and z happen then yes we could/would have a crash...hence the rather cutting comment about mark Little losing his job. (that is the presenter's name, isn't it?)


----------



## room305

KalEl said:


> Jim Power had rational arguments about the fundamentals of our economy which are driving the property market.



Jim Power is right - the fundamentals of our economy do indeed support a thriving property market. High employment, young demographic, inward migration and so forth. The question you need to ask yourself is, do the fundamentals support them at these prices?

It's an important distinction and one I don't see being asked very often. The fundamentals of the nineties tech boom were sound and almost everything the bulls said eventually came to pass - increased productivity, easy access to niche markets, new media age etc. 

That the "fundamentals" underpinning the tech boom were sound is of little consolation to investors who bought Nortel shares at $850 a share in 2000.


----------



## conor_mc

KalEl said:


> Was I watching a different programme? He was taking the michael out of Little and Kelly, admitting that yes if your aunt had balls she'd be your uncle! That if v w x y and z happen then yes we could/would have a crash...hence the rather cutting comment about mark Little losing his job. (that is the presenter's name, isn't it?)


 
So on the one hand we have Power saying everythings hunky-dory and will continue to be hunky-dory forever.

On the other hand, you have Kelly saying forget about external shocks and all that, this bubble _will_ crash.

Frankly, I think the seeds of the crash are in the construction sector itself (inevitable slowdown in construction = inevitable job losses!) and that external shocks won't trigger anything, they'll just exacerbate the inevitable crash if they happen.


----------



## Duplex

KalEl said:


> Was I watching a different programme? He was taking the michael out of Little and Kelly, admitting that yes if your aunt had balls she'd be your uncle! That if v w x y and z happen then yes we could/would have a crash...hence the rather cutting comment about mark Little losing his job. (that is the presenter's name, isn't it?)




Jim Power described the housing market in Ireland over the past two years as  insane.   Hardly a ringing endorsement.


----------



## jmayo

Sunny,
yes we do need roads, railways,schools, etc but do they need to be plastered, plumbed, and furnished.  Thanks to Catepillar and Komatsu the numbers involved in road building is much smaller than house building.  And how many thousand schools are going to be built to make up for the 20,000 less housing units?

Increasing interest rates do have affects on affordabiolity and ultimately prices. It means one or all of following: people cannot afford to repay exisiting mortgage thus repossessions, cut backs on disposable income and less comsumer spending and thus unemployment in certain retail sectors, less people able to afford houses because tightening in bank lending.  All of these lead to house price drops.

I think you will find there have been more job losses from multinationals than job creation. 
According to most people on here Intel are focusing all their investments in very large plant in China at the moment.  They definetly are not upgrading their existing infrastructure here and that points to one thing.

Yes I agree the state sector is driving price up and wage demands in public service will ultimately drive up taxes for everyone.

KalEi, Jim Power may have been taking the mickey but don't you think that the supposed scenarios all are already happening to a degree and thus are not as far fetched as the some of the vested interests would have us believe.  They will not happen in next week or month.

At the moment our population increase and thus demand for housing is been driven by housing construction itself.  Thus we are building houses for immirgants to come and live in, so that they can build more houses for more immigrants.  
Doesn't an economy built (sorry about the pun) on this model not strike anyone as scary?


----------



## Sunny

Below is a summing up comment from S&P rating agency in a report earlier this month on European Housing Markets.

There is no reason to expect the Irish housing market to move from a soft landing into a real downturn, however. For one thing, rents have been steadily increasing in the past two years, providing support to the buy-to-let segment of the market. More broadly, the economy is still growing at a robust pace (5.2% in 2007, after 5.8% in 2006). After more than 10 years of exceptional growth, Ireland's housing market is simply maturing.

Not saying they are right but thought I would throw in a "neutral" view. Pretty much what Jim Power had to say last night.

And by the way, they were not saying such nice things about the Spanish market in case people think they are only the bearers of good news!


----------



## conor_mc

Sunny said:


> Below is a summing up comment from S&P rating agency in a report earlier this month on European Housing Markets.
> 
> There is no reason to expect the Irish housing market to move from a soft landing into a real downturn, however. For one thing, rents have been steadily increasing in the past two years, providing support to the buy-to-let segment of the market. More broadly, the economy is still growing at a robust pace (5.2% in 2007, after 5.8% in 2006). After more than 10 years of exceptional growth, Ireland's housing market is simply maturing.
> 
> Not saying they are right but thought I would throw in a "neutral" view. Pretty much what Jim Power had to say last night.


 
Central Bank just revised 2007 GNP growth forecast down from 5.75% to 4.75%.

http://www.rte.ie/business/2007/0418/economy.html

S&P and other ratings agencies have been caught out big time in the sub-prime collapse in the states - they're not infallible either.


----------



## Sunny

conor_mc said:


> Central Bank just revised 2007 GNP growth forecast down from 5.75% to 4.75%.
> 
> http://www.rte.ie/business/2007/0418/economy.html
> 
> S&P and other ratings agencies have been caught out big time in the sub-prime collapse in the states - they're not infallible either.


 
4.75% is still strong growth. You can't compare the US sub-prime market problems with anything going on in Ireland or in other country to be honest. No-body is claiming that anyone is infallible but just because it doesn't go along with your way of thinking doesn't make it wrong. You're not infallible either sorry to say.


----------



## Firefly

Think we're in danger of having 2 parallel threads on house prices here...can we stick to the subject?

Firefly.


----------



## demoivre

conor_mc said:


> Cos its their home first, an asset second.
> 
> 
> 
> Great consolation for the people who listened to the doomsters over the last ten years telling them not to buy - prices were too high in 1999 eh !
> 
> 
> 
> 
> Actually, how many banks are buying up new property for branch networks/headquarters, or how many estate agents are expanding rather than selling up?
> 
> Click to expand...
> 
> 
> Freeing up capital can be a valid reason for a business to sell property . I know several auctioneers in the south east who, in a private capacity, have built up extensive property portfolios over the last number of years.
> 
> 
> 
> 
> Seriously - you're calling into question the motives of individuals who have nothing at stake except their reputations. And yet somehow that seems to be less palatable to you than believing a salesman whose employer is overseeing mass exploitation of the young people of this country for their own profit.
> 
> Click to expand...
Click to expand...


I attach much more credibility to people who practice what they preach.  What's least palatable of all to me is that young people over the last ten years might have been influenced by the doomsters telling them not to buy a home because we were at the top of the market!


----------



## KalEl

Firefly said:


> Think we're in danger of having 2 parallel threads on house prices here...can we stick to the subject?
> 
> Firefly.


 
Yes, this is supposed to be about the Future Shock programme and the Primetime debate. One of Power's more persuasive arguments was that a lot of the boom in prices was "catching up". I have to admit I was very impressed with him...he was debating with an intellectual heavyweight and in my view he came out on top.


----------



## Duplex

KalEl said:


> Yes, this is supposed to be about the Future Shock programme and the Primetime debate. One of Power's more persuasive arguments was that a lot of the boom in prices was "catching up". I have to admit I was very impressed with him...he was debating with an intellectual heavyweight and in my view he came out on top.




Were you not surprised KalEl when he described the Irish housing market as insane over the past two years?


----------



## KalEl

Duplex said:


> Were you not surprised KalEl when he described the Irish housing market as insane over the past two years?


 
I'm not sure...he seemed exasperated with Professor Kelly at the time so it's hard to know if he meant the rises were crazy in size or that people were crazy. I wouldn't read too much into it.


----------



## Duplex

KalEl said:


> I'm not sure...he seemed exasperated with Professor Kelly at the time so it's hard to know if he meant the rises were crazy in size or that people were crazy. I wouldn't read too much into it.


 

_"If we saw another two or three years of the sort of insanity we've seen over the past couple of years in the housing market then I would agree with Morgan."_ 

It seems to me that the statement seemed to contradict Power's assertion that the market was built on sound fundamentals.  Could have been a slip of the tongue, possibly Freudian.


----------



## KalEl

Duplex said:


> _"If we saw another two or three years of the sort of insanity we've seen over the past couple of years in the housing market then I would agree with Morgan."_
> 
> It seems to me that the statement seemed to contradict Power's assertion that the market was built on sound fundamentals. Could have been a slip of the tongue, possibly Freudian.


 
Yeah, I think he meant we're not going to see the spectacular growth we have seen and if we did there would be trouble.
hard to know but that'd be my guess.


----------



## Sunny

KalEl said:


> Yes, this is supposed to be about the Future Shock programme and the Primetime debate. One of Power's more persuasive arguments was that a lot of the boom in prices was "catching up".


 
But you are still talking about house prices........


----------



## KalEl

Sunny said:


> But you are still talking about house prices........


 
Considering the discussion is about "Future Shock - Property Crash" and a Primetime debate about the same programme the subject is quite hard to avoid.
My understanding is this thread is about the two programmes but should not descend into a general discussion, which to be fair I don't think it has.
Do you?


----------



## Remix

KalEl said:


> One of Power's more persuasive arguments was that a lot of the boom in prices was "catching up". I have to admit I was very impressed with him...he was debating with an intellectual heavyweight and in my view he came out on top.


 

Yes we are catching up all right. According to finfacts:



> For the cost of a typical house in an area favoured by a management level family in Dublin, Ireland, you could buy *nine* similar houses in Houston, Texas, *three* in Amsterdam, *two* in Sydney and almost *two* in Tokyo, according to an international survey.


 
Much of this has occured during a time when Ireland has seriously fallen down the world's list of exporters but risen spectacularly up the list for the level of private sector debt.


----------



## joe sod

I do not think the euro will rise to 1.70 against the dollar, why because europe  could not afford it. The euro is probably getting over valued relative to the dollar on purchasing power parity at the moment. The trade deficit the united states has is not with europe but with asia, therefore the big falls in the dollar will be in relation to the asian currencies. Yes the euro may rise some more against the dollar but european interest rates are lower than american ones and I think that will remain. I do not think property prices will collapse in nominal terms however I think they may drop 10/20% over a protracted period. However I think in real terms the value of property will be eroded by high inflation rates. So in 10 years time a 400,000 house may still be worth 400,000 but the value of that 400,000 will be an awful lot less. Therefore as an investment over the next 10 years property will be a lousy investment. The central banks of the world cannot allow property prices to fall but neither can they allow them to rise


----------



## room305

Well I watched it last night finally. Nowhere near as bad as I feared. The ever present haunting, jangling music was very annoying and suggested to me that either the director had no confidence in his work or he was overly enamoured with his 'daring' in contemplating a dreaded property crash. Wasn't sure what to make of the MTV-style editing either.

That said, I thought the scenarios discussed were quite reasonable. I'm a longterm dollar bull myself but I wouldn't blightly dismiss the chance of a significant slide. I thought the figures bandied about in the event of a crash were pretty realistic as well.

It's such a shame that the director felt the need to employ tricks and scary music instead of focusing on the key risks to the Irish economy (and consequently) the property market.

Apart from the sentamentalising and the "nobody told me there could be interest rate rises, I wasn't expecting that" stuff (it may well be the biggest purchase of their life - you think they'd research it a little) the only thing I would take issue with was the comments on the American trade deficit. "All economists agree that the best way to overcome the trade deficit is through continued devaluation of the dollar". It's a possible solution but not necessarily the best one. Still it is a minor point and the main point was clear - Ireland can hardly expect to emerge unscathed from a collapse of the dollar or the US economy.


----------



## conor_mc

joe sod said:


> The central banks of the world cannot allow property prices to fall but neither can they allow them to rise


 
If that's the case, the Fed is doing a pretty lousy job, isn't it!

Oh, and the ECB don't have a property bubble to worry about. They have a blip out on the edge of the Atlantic.

Where do people get this blind faith from? If central banks were doing their job, we wouldn't have property bubbles in the first place. We'd have price stability in almost everything, and frankly the only central bank that I see doing their doing their job is the ECB.

The Fed under Greenspan inflated not one but two asset bubbles, and the MPC in the UK has lost all credibility by holding rates steady just three weeks before having to write a letter of explanation to Gordon Brown on why inflation had hit 50% above their target rate. The BoJ is a joke in their country after their handling of the lost decade.


----------



## gearoidmm

room305 said:


> Apart from the sentamentalising and the "nobody told me there could be interest rate rises, I wasn't expecting that" stuff (it may well be the biggest purchase of their life - you think they'd research it a little).


 
Much and all as I found this annoying and trite, it did highlight one important point about the housing market in Ireland - people have been so desperate to buy that they haven't researched it properly, don't know what interest rates are doing and have an unshakeable belief that property always goes up.  I wouldn't be surprised if that woman's attitude was mirrored all over the country.  You take it for granted when you frequent websites like this that everyone knows what the ECB will do from month to month (sure doesn't Trichet telegraph it in his conference) but most people seem to be financially illiterate and these interest rate rises have caused a significant amount of pain and uncertainty.

That said, the brain tumour woman (although I did feel sorry for her personally) made me want to throw something at the television - terrible journalism.


----------



## MortgageMate

> the brain tumour woman



nicely put


----------



## mollser

gearoidmm said:


> Much and all as I found this annoying and trite, it did highlight one important point about the housing market in Ireland - people have been so desperate to buy that they haven't researched it properly, don't know what interest rates are doing and have an unshakeable belief that property always goes up.  I wouldn't be surprised if that woman's attitude was mirrored all over the country.  You take it for granted when you frequent websites like this that everyone knows what the ECB will do from month to month (sure doesn't Trichet telegraph it in his conference) but most people seem to be financially illiterate and these interest rate rises have caused a significant amount of pain and uncertainty.



Just another aside on that lady: she never actually said that she wouldn't have purchased the apartment if she knew interest rates were going to go up, what astonished me was she said she would have continued to rent in town but 'purchased an investment property somewhere in the suburbs'.  Err, even after realising the error of her ways, AND with the benefit of hindsight, she's STILL blinded by the property bug!!  A real eyeopener that one I thought...


----------



## conor_mc

mollser said:


> Just another aside on that lady: she never actually said that she wouldn't have purchased the apartment if she knew interest rates were going to go up, what astonished me was she said she would have continued to rent in town but 'purchased an investment property somewhere in the suburbs'. Err, even after realising the error of her ways, AND with the benefit of hindsight, she's STILL blinded by the property bug!! A real eyeopener that one I thought...


 
I noticed that too - it just goes to show how brainwashed we've become as a nation... everybody thinks there's a property investor in them just bursting to get out, despite not having a clue about interest rates and how they work.


----------



## Remix

Ceist Beag said:


> One point about that lad Kelly - his closing advice made me laugh. Basically he said to first time buyers - "Don't buy now .........


 
Looks like Eddie Hobbs is now offering the same advice:

_"My advice to first-time buyers is not to buy," he says. "They should rent for the next year or 24 months. There's no doubt that property prices will continue to go down and if they save though an institution like Northern Rock they will have capital in the future when prices are lower."_ 

http://www.unison.ie/irish_independent/stories.php3?ca=45&si=1817107&issue_id=15542


----------



## gearoidmm

I was trying to find a link to this show.  At the time they put forward a number of scenarios that would lead to a disaster for the economy including dollar at 1.70, oil >$100.  I'm not sure about these because it's all from memory.  At the time these were derided as being pure fantasy but I wonder how many of them have come true (or are close to being realised).  The RTE website doesn't seem to have a link for it anymore


----------



## ivuernis

No, but search YouTube for the words:

*Animo TV Future Shock Property Crash*

and it will give you 5 clips from the show 


_What do you do with your crash when you've got it?_


----------



## polaris

Very interesting to view these predictions again 13 months later:

"If the dollar were to drift down to €1.50........I think it would provoke a serious recession"

-Moore McDowell


----------



## ivuernis

polaris said:


> Very interesting to view these predictions again 13 months later:
> 
> "If the dollar were to drift down to €1.50........I think it would provoke a serious recession"
> 
> -Moore McDowell



Certainly $1 = €1.50 would have serious repercussions, signifying a resurgent dollar and tanking euro, thankfully $1 = €0.64   ;-)


----------

