Current public sentiment towards the housing market?

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Thats exactly my fear, people are struggling at 3% (even though most won't admit it), but what will happen when the rates rise to 4%(at this stage a given?) and it could go as high as 5/6.

Is that when we will see people missing payments and getting into trouble with the banks?

I have shown the above article to a very "head in the sand" so of person and they couldn't believe it, once I mentioned that we don't have control on the interest rates and they could go to even 5% - the look of worry and realization was incredible.
 
Sidewinder said:
The only question is whether we get humungous nominal falls over 3-4 years, or merely large nominal falls followed by a decade of flat prices while inflation erodes the rest of the bubble away.
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If the property market slows dramatically then at least 50,000 need to find alternative jobs, add the romanians and bulgarians plus Poles etc and no public sector safety net and result will be massive competition for jobs.

this is the problem in german housing market - lose your well paying job ( low or high skilled )that you had since the 90s and find you may have to take a 30% pay cut to get a job.

after property slowdown IMO there will be big wage deflation in private sector. Inflation will fall to minimal levels in Ireland and certainly will not increase affordability. Witness japan which has had minimal inflation for 10 years or even Germany as above where wages have been static for 5 years.

This is why japan govt has been printing money for years to try to get inflation / erode the real value of debt and had zero % interest rates - again people there if they lose job they have a big risk of having to take a pay cut hence had little wage price power
 
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SHARP said:
...once I mentioned that we don't have control on the interest rates and they could go to even 5% - the look of worry and realization was incredible.
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How is it possible a homeowner doesn't know we don't control interest rates? Are these the same people buying in Cape Verde?
 
SHARP said:
That is an excellent piece and I have just printed it off to show friends. Thanks for posting it, not sure whether the Mods will allow it to remain though.
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Don't embarrass yourself by showing it to your mates - some of the numbers are wrong and the analysis is flawed for a number of reasons that I can't be arsed to explain. I am amazed the mods haven't closed this thread ages ago - some of the reasoning on here merits the entire thread being dumped in " shooting the breeze" imo , some absolutely hilarious stuff though.
 
demoivre said:
Don't embarrass yourself by showing it to your mates - some of the numbers are wrong and the analysis is flawed for a number of reasons that I can't be arsed to explain. I am amazed the mods haven't closed this thread ages ago - some of the reasoning on here merits the entire thread being dumped in " shooting the breeze" imo , some absolutely hilarious stuff though.
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How much have you "made" on property?
 
demoivre said:
Don't embarrass yourself by showing it to your mates - some of the numbers are wrong and the analysis is flawed for a number of reasons that I can't be arsed to explain.
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I'm usually quite good with numbers and didn't see any flaws on first inspection. What did I miss?
 
Debtwish said:
13th September 2006

One small step for rates….one giant leap for repayments

Why some buyers have seen housing costs rise nearly 50% in the past year.

The housing market is stalling. Anecdotal evidence suggests that houses are taking longer to sell than this time last year and the number of For Sale boards is increasing. So what’s happening? Shouldn’t the combination of a booming economy, full employment, SSIA spending, low interest rates and unprecedented levels of immigration see these houses being snapped up? For the answer, step back just 12 months and imagine you are a Dublin house buyer.

Rest of copyrighted article removed -- please post a link!
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There is no link. :confused:

And I have not breached copyright. (Whose copyright do you think I've breached?) ;)

Debtwish
 
demoivre said:
Don't embarrass yourself by showing it to your mates - some of the numbers are wrong and the analysis is flawed for a number of reasons that I can't be arsed to explain. I am amazed the mods haven't closed this thread ages ago - some of the reasoning on here merits the entire thread being dumped in " shooting the breeze" imo , some absolutely hilarious stuff though.
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You really should share this information if it is wrong, there seems to be a few bulls who need a bit of reassurance at the moment
 
demoivre said:
Don't embarrass yourself by showing it to your mates - some of the numbers are wrong and the analysis is flawed for a number of reasons that I can't be arsed to explain. I am amazed the mods haven't closed this thread ages ago - some of the reasoning on here merits the entire thread being dumped in " shooting the breeze" imo , some absolutely hilarious stuff though.
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The fact that you can't be bothered to explain suggests to me that there is nothing to explain, and above all else, suggests to me you're hypocritical for demanding that the three be closed or dumped in STB seeing as at least opponents of your point of view provide some reasoning for their POV. You've provided nothing.

So if it's all the same to you, I would like an explanation as to why the analysis is flawed. Some of us are actually at the sharp end of looking for mortgages and funnily enough this is the reality. With interest rates going up, even if the sale price stays steady, the property is More Expensive to the buyer. The figures may be inexact - I haven't done the sums - but the broad thrust is correct.

Is there some part of that you don't understand?
 
If the figure below is correct, then jeybus!!

Another way of looking at this is that if interest rates had remained unchanged, the increase in monthly repayments is the same as if the purchase price of the property had risen from €500,000 to nearly €740,000 in just one year!
 
bren2002 said:
If the figure below is correct, then jeybus!!

Another way of looking at this is that if interest rates had remained unchanged, the increase in monthly repayments is the same as if the purchase price of the property had risen from €500,000 to nearly €740,000 in just one year!
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haven't read the article but that looks like the writer is pointing out what you are now paying for a €500k mortgage would be equivical to a €740k mortgage before the interest rates started to rise, at least thats my take on it

miju said:
http://www.askaboutmoney.com/showthread.php?p=252098#post252098
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incidently the two properties i mentioned on the 1.8.06 beside my apt that were for sale that would be ideal FTB / Investor properties as they are very close to all major amenities and inside the m50 in dublin 11 have not only still NOT SOLD they've had next to no viewings

at the end of the month they'll be close to 3 months on the market priced at 315k for 2 bed apts , maybe prospective buyers got turned off by the magnitude of empty apts there?????????
 
HotdogsFolks said:
How is it possible a homeowner doesn't know we don't control interest rates? Are these the same people buying in Cape Verde?
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No, they are the people who are releasing equity in their homes to buy holiday homes in Sunny Beach Bulgaria. They are the same people that think the "banks won't allow the interest rate to rise"??????
 
It's complete madness that people don't know who controls rates. I couldn't believe it when I first heard of this, took me a while to realise that it does exist out there.

I wonder if any of these people has 'investment properties' in Budapest, economy could collapse theer along with the Govt soon.
 
The figures were house asking/selling price increasing from €500K to €575K in a year (a 15% increase), combined with an increase in mortgage rates from 3.5% to 4.5% (100 basis points). For an interest only mortgage, monthly payments are now 48% higher, which is the same as if the house had increased to €740K after a year, with no change in interest rates.
 
bren2002 said:
It's complete madness that people don't know who controls rates. I couldn't believe it when I first heard of this, took me a while to realise that it does exist out there.

I wonder if any of these people has 'investment properties' in Budapest, economy could collapse theer along with the Govt soon.
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its ok, remember they are all 'savvy' investors!
 
Does anybody know how many people are employed in roadbuilding in this country at the moment? The point I am making is that the rate of new road building has reached its peak and in a few years the motorway / dualcarraigeway programme should be practically complete so there will no longer be guaranteed employment for all these people.
 
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