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NewMan
Guest
One of the funniest threads i have ever read. There seems to be an awful lot of bitterness here towards property owners and people who are currently buying. The word "fool" is been banded around left, right and center.
From my point of view (I know this goes against the grain of this thread) but property in my area appears to be selling extremely well and quick in the last few months. I feel secure in the knowledge that I can look back in 5 or 10 years and the country won't have disintegrated or the world won't have come to an end like some here seem to think.
From my point of view (I know this goes against the grain of this thread) but property in my area appears to be selling extremely well and quick in the last few months. I feel secure in the knowledge that I can look back in 5 or 10 years and the country won't have disintegrated or the world won't have come to an end like some here seem to think.
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phoenix_n
Guest
What the [broken link removed] [broken link removed] looks like
Are you going to back up your long term view with some analysis, or just throw some veiled insults? The thread could do with some bulls.
fatmanknows
Registered User
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bearishbull
Registered User
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- 207
He sounds like a member of the "i'm alrite jack"/head in the sand brigade.
I think most of the bears on here feel that we are watching something really economically fascinating, as what we perceive to be a bubble unfurls in front of us. That is my main motivator for following this thread, along with many I expect.
There's also a certain amount of schadenfreude being exhibited I'll admit. Those of us who have followed what would have been considered prudent investment strategies have been outperformed by those pursuing what we would consider to be lazy, reckless and naive investment practices through property investment. In every bubble there is a stage at which "prudent" investors begin to think "things really have changed", and that psychological moment is financially very damaging as you end up leaping in a market top. By being in the company of others who can keep reminding you of the logic of your position, you can have the emotional courage to maintain the stance you know to be correct.
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StoppedClock
Guest
hmmm, have a read of the excellent "Fooled by Randomness", the first few chapters tell a very good allegorical story which would apply equally well to the feelings of the bears on this thread.
[broken link removed]?
I think a lot of us are in this boat, families say we're mad for not buying, sometimes you need the backup of people with the same view!
That being said, I think there is a risk that we might have our heads in the sand as well, only our unbreakable belief is prices will go down. I think it is very difficult stay objective while reading threads like this. Informative and all as it is.
By reading this are we making ourselves believe that the crash is on while there may actually be another year or two of price gouging we are missing out on? I'm usually totally bearish but it gets tiring after a few years!
CelloPoint
Registered User
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Isn't this the nature of sentiment within a market?
It's not like there's anything new in the Irish market that hasn't manifested itself somewhere in history.
Newman
I see the property boom/bubble as a wealth transfer exercise not a wealth creation exercise. If a house doubles in price without undergoing any structural change where's the increase in wealth? Society as a whole is no better off. Instead what has happened is that wealth has been transferred from those with little property( generally the poor and the young) to those more than average property(generally the wealthy and older folk).
So the boom has actually redistributed wealth from the poor to the wealthy.
It has also dealt a blow to the idea of a meritocratic society. I know of families waiting to inherit multi million euro estates simply because of the good fortune of their parents housing choice.
The worst thing of all is those fortunate enough to benefit won't acknowledge that there was a lot of good fortune involved.
So if there is some bitterness I think it's understandable.
I also see any housing correction not as wealth destruction. The houses will still there after all. Rather it will be wealth redistribution back the other way. I don't see anything wrong with hoping for it.
The real question is how much malinvestment has there been because of the boom? Residential investment reached 14% in 05 way above other countries and historical data. How much of that is real demand and how much are shoddy properties thrown up quickly in poor locations sold to people who really can't afford them?
I don't know but I think the rash of 1/2 bed apartments that have sprung up everywhere is going to cause our grandkids to scratch their heads and wonder what we were thinking.
Bluetooth
You have a deeper grasp of monetary theory and behavioural finance than me. i just see higher interest rates as the critical issue because it decides how much a bank will lend a prospective buyer. Thats all.
I see the property boom/bubble as a wealth transfer exercise not a wealth creation exercise. If a house doubles in price without undergoing any structural change where's the increase in wealth? Society as a whole is no better off. Instead what has happened is that wealth has been transferred from those with little property( generally the poor and the young) to those more than average property(generally the wealthy and older folk).
So the boom has actually redistributed wealth from the poor to the wealthy.
It has also dealt a blow to the idea of a meritocratic society. I know of families waiting to inherit multi million euro estates simply because of the good fortune of their parents housing choice.
The worst thing of all is those fortunate enough to benefit won't acknowledge that there was a lot of good fortune involved.
So if there is some bitterness I think it's understandable.
I also see any housing correction not as wealth destruction. The houses will still there after all. Rather it will be wealth redistribution back the other way. I don't see anything wrong with hoping for it.
The real question is how much malinvestment has there been because of the boom? Residential investment reached 14% in 05 way above other countries and historical data. How much of that is real demand and how much are shoddy properties thrown up quickly in poor locations sold to people who really can't afford them?
I don't know but I think the rash of 1/2 bed apartments that have sprung up everywhere is going to cause our grandkids to scratch their heads and wonder what we were thinking.
Bluetooth
You have a deeper grasp of monetary theory and behavioural finance than me. i just see higher interest rates as the critical issue because it decides how much a bank will lend a prospective buyer. Thats all.
But trying to get a piece of some "price gouging"
is gambling not investing. You can adopt a daytrader type approach to this and see patterns in charts irrespective of the underlying asset, or avoid that sort of intellectual laziness, do the maths and understand the investment. I sleep easier at night by having a nice boring portfolio growing steadily than gambling my families future on the latest get rich quick scheme.I concur with this. This thread has been a very useful resource for tracking down reports related to the market as well as hearing everyone's anecdotal evidence.
The bulls are free to come on here and prove everyone wrong however I don't think I've seen a single argument that could in anyway support that view for a very long time.
Most bulls these days are just coming out with the usual crap about "demographics", "can't go wrong with bricks and mortar", "you're all a bunch of begrudgers", etc. NewMan is no different.
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asdef
Guest
The obvious phrase that comes to mind is 'echo chamber':
Is this an echo chamber? I've been following the thread for a few months at this point, and the environment does seem to have turned increasingly hostile for bulls. Are the bears in this thread pushing small examples of price decreases, and ignoring examples of continuing bullishness in the market? Remember, the market has been irrational for years, why are you sure people will figure it all out now?
For the record, I'm expecting a "slowdown" before Christmas, a "realignment" in some areas, followed by a cut of 20-30% next year for most properties... (edit: well maybe 20%; more is not that likely, but definitely possible)
As regards sentiment among family, my dad was pushing for me to buy a 1-room apartment off Clonliffe Road (him as guarantor) last Christmas. He was sure I could afford it (talked to a mortgage broker informally about it). I thought "sure why not", there must be something to this not renting thing after all (before I came across AAM, obviously). And then on the following Monday I typed the numbers into a mortgage calculator. I choked - possibly doable at the then-current interest rates, but a severe pinch if they went up 1-2%. So I decided against that. He kept pushing the idea for 2-3 months, but recently he's shut up entirely, and I'm starting to push him on the idea of divesting into other equities from property...
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walk2dewater
Guest
The 50-something early retiree wondering his good fortune with property need look no further for an explanation than the heaving mob of frazzled under-35 debtors on the 8:00am Arrow from Kildare/Balbriggan/Arklow/Ashbourne/etc
I think part of it is this: it is almost certain that there will be a correction because of the salary inflation/price inflation mismatch. But what no one can tell is how that correction is going to play out. It's unlikely to be an overnight crash where an apartment costing 400K one day will be priced at 200K the next. But it could play out over a year that way. If we're looking for odd metaphors, you could look at it as being similar to weight gain. No one gets fat overnight - they build it up over time. You can't lose that sort of weight overnight, it takes a while. We've built up a massive quantity of property wealth here - but what's not really being discussed is how much of it is backed by debt.
One of the things that really shocks me about this country (and I'm Irish but I've spent a lot of time out of the country) is how short termist most people are. Otherwise they wouldn't build up these debts.
So my main issue with the property market at present is not how much the property costs because that's - I know this sounds all wrong - that's just money. What worries me greatly is the length of time most of those debts are for, and how apparently common equity release is. It's very much a manana, manana attitude. Apparently statistically, we're above average savers - but you have to set that off against a massive amount of consumer debt as well.
In truth, as I see it, we'll see the property bubble burst - but because it is now so huge (that many people can't actually see it), it's going to be tough to predict how massive and long drawn out the correction will be. The shorter it is - no matter how extreme - the better in the long run. But we're only barely at the stage where people are accepting that the past ten years were anomalous and that anomaly may not last. I'm not saying this because property prices grew by 270% in the past 10 years. I'm saying it because salaries did not.
Thats an excellent point, I must bring it up next time I'm running with the Bulls.
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Sidewinder
Guest
Just remember dude: "When the last bear turns bull...."
The fact that even you are now feeling the lure of the Dark Side in itself is proof that this bubble has already burst.
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