AIB latest report "House price rises can't be sustained - John Beggs"

Its interesting that SSIA money is mentioned so frequently as a future contributer to house price rises over the coming 12-18 months (in Economist's reports, in media, and on this board). So frequently, I wonder have people been panic buying at the end of 2005 and start of this year to try and get in before this. Perhaps when the SSIA money comes out the effects might be considerably less than predicted. What effect might this have? A sudden last sharp spike (ala Head & Shoulders in Technical Trading terms) followed by a sharp dip when the market disappoints (due to that great SSIA spend not propping up the market when predicted to do so).
 

Very good point, it reminds me of all those Y2k stories before the millenium. It is very interesting to see BOI being less than bullish. It looks like the ECB won't increase rates at as quick a pace than is needed to cool the market. If the goernment were interested in doing something to stop this runaway train they would impose a levy on investors which would reduce the amount of activity but then I guess they need all the stamp duty taxes they can get it the run up to an election. No let up in price increases for the next 12 months IMO
 
Isn't there a bit of a "vicious circle" here? Have I understood correctly that when the SSIA pot will create such a hole in the country's Revenue that taxes will increase steeply - including property tax?
 
Marie said:
Isn't there a bit of a "vicious circle" here? Have I understood correctly that when the SSIA pot will create such a hole in the country's Revenue that taxes will increase steeply - including property tax?
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Direct taxes will not increase, no government would shoot themselves in the foot by doing that. I wouldnt expect taxes to increase because of the SSIA's, people will have more money to spend when they get their SSIAs so revenue should increase...?
 
robd said:
So frequently, I wonder have people been panic buying at the end of 2005 and start of this year to try and get in before this. Perhaps when the SSIA money comes out the effects might be considerably less than predicted.
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Yeah, agree it's very definitely a possibility (see my previous post), but then again - we're all speculating, that's the funny thing about any technical analysis, it's always easy to spot the spike afterwards - not quite as easy during it
 
Direct taxes will not increase, no government would shoot themselves in the foot by doing that. I wouldnt expect taxes to increase because of the SSIA's, people will have more money to spend when they get their SSIAs so revenue should increase...?
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It should also free up government revenue (after all who had to pay that 25% bonus) - but given that we are low on direct taxes and high on indirect taxes, the consumer spending frenzy after SSIA payouts should boost the govt coffers even more (VRT is quite high here is'nt it!!).
 
Yep the SSIA is a red herring.

Did anyone see the stiffs from the central bank on the 9 news tonight? Talk about bolting the barn doors after the horses have left.

The economy, yes the economy, hinges on the prevailing and unsustainable sentiment that property prices will continue rise. Take that expectation away and suddenly overnight we'll have no willing buyers. How much will the house fetch then? That is the precarious position we are in, but there's enough levers to keep buyers eager and prices ratcheting higher for a little longer.

And so here we have the surrealism of the central bank asking the commercial banks to voluntarily provide info on what would happen if unemployment went to 9%. A little late no? Prices by end 2006 will likely end up x3.5 what they were in 1997, price to income ratios will average x12 in Dublin and a significant portion of young working adults will be in ridiculous debt.

I'm starting to wonder when the knives come out for the unmentionable shares that will get crushed, will the smell of blood attract foreign sharks a la Soros? hmmm
 
As Warren Buffet said

"Occasional outbreaks of those two super-contagious diseases, fear and greed, will forever occur in the investment community. The timing of these epidemics is equally unpredictable, both as to duration and degree. Therefore we never try to anticipate the arrival or departure of either. We simply attempt to be fearful when others are greedy and to be greedy only when others are fearful."

I think this pretty much sums up the Irish property market
 
im suprised theres so little coverage in media of dan mc laughlins/BOI's prediction of no rise in real terms of house prices next year. when people realise the high price rises are coming to an end they may be prepared to wait and see for a few years and sentiment in market may change substantially.
 
SLAPPY said:
Don't worry folks, the 40 year mortgage is here to save the day.
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More like put off the day, and to make the aftermath of the inevitable day of reckoning that much worse. What have the Irish people done to the Banks that makes them so bent on the destruction of our economy for a generation? I fully appreciate that they will have sufficiently feathered their nests to cushion them and theirs from the upcoming ahem, unpleasantness, but surely they have some fraternal feelings for their fellow countrymen and women? Or am I just a misty-eyed romantic?
 
Or am I just a misty-eyed romantic?
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It's all that talk of 1916 that's got you going.

But sure as our great leader does be saying:
"Dem dere banks are da bees knees, sure if it was'nt for dem, nobody would be able to get mortgages and den look how much money you'd all have lost out on making"
 
Would ya stop it, sure tis more misty eyed yer makin me. And me questioning the noble intentions of dem fine gentlemin in de banks. Sure amint I just hearing dat day’ll be introducin a 90 year mortgage ta celebrate 1916.

Oh de fine heros who dyed ( it’s a long story, to do with bed sheets and green white and orange dye) for de Emerald Isle and here is me questioning the noble intention of gentlemin. I,m off to a dark corner to practice tugging me forlock.
 
Dan O'Brien from the Economist Intelligence Unit made cogent arguments, referring to Ireland as the most indebted nation in Europe, the unsustainable growth in mortgage debt at 30% pa and the new and worrisome issue of an emerging trade deficit. Finna Fail produced an unintelligible, stumbling gobdaw from central casting; who proceeded to stutter an embarrassing litany of infantile auctioneers blather.

The general impression given by the program was that anyone with a modicum of intelligence should set their affairs in state, in anticipation of a hard landing for the Irish property market.

Congrats to RTE for a brave piece of Journalism in the face of powerful sectional and government influence.
 

Agreed,fair play to rte for once,it's not like we havent being saying the same for the last 6 months.The problem is the average donkey buying now was more than likely watching Desperate Housewives or something, personally i think the country is in major trouble.

Could bertie's
"intervention" be the the biggest mistake ever made by an out going taoiseach ?
 
Didn't see this, out on the lash, Holy Thursday and all that. Any property bulls see this and have a different take on the content and / or conclusions? Don't make me name names now...........

thewatcher said:
Could bertie's
"intervention" be the the biggest mistake ever made by an out going taoiseach ?
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I'm still amazed he made ANY comment. I've never heard of any serious politician make comment on any risk based investment product.
 
Howitzer said:
I'm still amazed he made ANY comment. I've never heard of any serious politician make comment on any risk based investment product.
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Agreed, the second tier FF'er on Prime Time looked a bit out of his depth as well. I thought the interviewer could have asked him about 35-40 year mortages, increase in interest rates of up to or past 4% etc which would have really put him on the spot. I wouldn't have thought the property bulls of Ireland would have been pleased by his showing...
 
"House price rises can't be sustained - John Beggs"

Bought a house in Phibsboro (Shandon Park) exactly 20 years ago for IR£35k (c.€43k) - myself and Mrs Roy were just starting out and earning a combined about £28k so price was about 1.25 times joint earnings.

An almost identical house came on the market last week in Shandon Drive quoting 705k, the first viewing was on Wednesday evening and there was a "queue of people to see it". Yesterday morning there was an offer of €825k on the house and yesterday afternoon the Sale Agreed sign went up (not sure what the final bid was).

Assuming the lucky winners of the bidding process were on say a combined 125k that means they price was 6-7 times earnings. We're not talking Shewsbury or Aylesbury Road here.

Sustainable - I don't think so!

Roy

BTW. The stampers on this house will come in about TWICE what I paid for the house at that time - ouch! Just in case the buyer is an AAM contributor.... it's a very nice area and very central but..............
 
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