Originally Posted by zac
ok here is an update, so far 6 real bears and two half bears...
and rest are either hiding or have nothing more to show apart from their opinions.
come on out of hundreds postings on this forum only 8 bears?
still waiting on more responses, from investors who are reducing their holdings, or owners moving to rental properties.
Well Im technically a property owner - have an apartment abroad - but since I returned to Dear Old Ireland at the turn of the millennium I 've chosen to rent - Do I qualify?
Well anybody who has read my posts over the last while both on this thread and the one on Irelands economy would accurately judge me to be a Bear when it comes to the Irish Property market . To qualify that :Im a bear in the long run - I firmly believe and I've yet to see any evidence to the contrary, that the Irish economy has been built on a certain type of quicksand - the sort that looks dry on top, yet when it breaks- you will start sinking slowly by degrees and it will stick like glue. However that said I still think that there is a bit of steam left in this mad stampede yet.
Why?
Its going to make more than a few .25% rises in the interest rate to overcome the manic fixation Irish people have with houses and land.
It is really impossible to underestimate this phenomenon. Most of the posters here see property as just another economic good/product and can view it dispassionately and critically if it isnt delivering the returns they are expecting just like it was shares or any product you could mention. The vast vast majority of the population of this country see things quite differently - and it will take a long long time for people to see property as anything but a sure bet.
Why - to borrow and paraphrase from that Old Duran Duran jingle :
" Destroyed by RTE I hate to bite the hand that feeds me So much information -The pressure’s on the screen to sell you things that you don’t need- It’s too much information for me"
Most folks are completely bewildered by the amount and number of financial products available to put your money into now. The pension debacles and dotcom meltdown have made most allergic to investing in these categories for the moment. Property and in particular housing has an attraction all of its own - because they can touch it and feel it , you dont need an actuary with a PHD from MIT to explain it to you and most importantly ! - you can show it off to your friends, neighbours and rivals as a show of your status, power sexual prowess and virility ya di ya di ya etc etc.
never, never, underestimate the power of sex in getting in the way of making rational decisions!
Many people believe they understand property -" its bricks and mortar and I can improve it myself" - it cant vanish away on flickering screen like shares and equity prices and sure people will always need houses etc etc . The number of people who hold this view and have a house or apartment as their "pension" is quite staggering. Economic illiteracy in Ireland is at epidemic levels and peer pressure ," if everybody else is doing it why shouldn't we" is the biggest driver of the property bubble. As PC Fields that famous American of words put it "There is nothing worse than watching your neighbour get rich".
Dont knock it tho - If everybody really looked at every item they buy as to its economic functionality and were honest as to how it would rationally benefit their lives the entire economy of the western world as we know it would collapse - bad news for everyone who doesnt grow food or make practical clothes for a living.
With the above underpining - throw in more exotic financial products from the Drug dealers ( the banks) and their cheerleaders (the entire Irish economist intelligensia with a few honorable non bought exceptions) , increasingly attractive offers from the developers who will anxious to offload as much inventory as possible in the most profitable way possible , the fact that over 80% (including mine) of the SSIA loot hasnt been released yet and a government desperate for reelection around the same time - their only hope after the shenanigans of the last few weeks is to bribe us big time - This could be the biggest since 1977 - FF couldn't give a monkeys what they do to the economy as along as they get to keep their mercs after next may or june , expect to see lots of money thrown down the bottomless pit of the public service, state bodies etc etc and stamp duty to be twiddled with.
The Government, Banks and a large percentage of the economy have too much riding on house prices and the housing market to simply let the market decide on its own - once the election is out of the way, higher interest rates , A US recession which is looking like it will be nastier and nastier by the day, will finish off the job
So to summarise - I see prices slowing , maybe small and I mean small, reduction to prices areas that even the most blinkered bull would have to say were nuts - but as long as interest rates stay under 4% and economy is primed for an early summer election - I really dont see much happening - after that ,say this time next year - all bets are off.
A Few other observations while Im at it.
Im just back from a tour around eastern Europe and Israel as a vanguard unit of the next phase of the Irish Manufacturing industry - exporting jobs - outsourcing - from what I can see there wont be many companies who manufacture and source manufactured goods from Irish suppliers left in 10 years time - it will be drip,drip drip - I have been appointed to turn off the light and put myself on the last boat out!
With my foreign collegues laughter ringing in my ears over Ireland property extravangsa - they all think we have gone stark raving bonkers -and Israelis are pretty good at the ole investment game - Went to ploughing festival in Tullow when I was down home at the weekend - the biggest tent - The one for all the folks selling foreign property to the asset rich welfare depending agricultural core - absolutely unf*****gbelievable - it was packed and they seemed to be doing a roaring trade - lets hope the farmers are better at picking good properties than they were at picking food products to produce and try and sell at a profit!!! - yeah I'd be real confident about that! - hope the EAs explained to them if the investment goes tits up that they can't sell the apartment into intervention!!!!
Later Folks
EDO
