Current public sentiment towards the housing market?

[phoenix_n]

Ok, so you have a hunch that prices will fall, but you dont know by how much or why, and you are basically have a wild guess. Right, that clears that up then.

I would go and search for the theory behind the "over 50%" figure but there are over 2000 posts in this thread and I somehome dont think its worth the effort.

My point is try to keep the discussion factual or at least based on solid reasoning.

In reality, steelblue , when anyone can produce real facts to support such falls then this thread will have ceased to exist as it will be in the public domain. Its his analysis (which i concur in parts) so if you have would like to state your analysis (which is also valid) then by all means proceed.

 

[SteelBlue05]

What's the solid reasoning behind the belief that a property can't sell for less than the original build cost?

There is nothing to say this "can't" happen, just that it is very very unlikely in the case of the newer commuter towns that you mentioned previously where "over 50%" reduction in price is going to happen.

I say this because builders will not subsidise a person to buy a property below the build cost.

 

[Guest107]

It would probably more realistic to claim that the prices would fall back to 2000/2001 levels. However, that would probably still work out around 50%

Yep, a fall back to pre bubble prices would be 50% . I am additionally assuming that more central areas will not give all of that back and will keep some of their post 2001 gains.

In 2001 a litre of Diesel was 55p or €0.65c now its nearly twice that. Commuting has a marginal cost you see.

Builders can only set realisable prices and if they are caught with inventory then tough.

 

[SteelBlue05]

In reality, steelblue , when anyone can produce real facts to support such falls then this thread will have ceased to exist as it will be in the public domain. Its his analysis (which i concur in parts) so if you have would like to state your analysis (which is also valid) then by all means proceed.

I dont mean we can predict the future, thats my point, we cannot. But why bother just picking figures out of the air and not being able to back them up with proper reasoning.

 

[Guest107]

I dont mean we can predict the future, thats my point, we cannot. But why bother just picking figures out of the air and not being able to back them up with proper reasoning.

You have given us no clear analysis that I can think of to justify prices remaining at their current levels . If you cannot justify them then they are too low...is that what you want me to believe

 

[SteelBlue05]

Yep, a fall back to pre bubble prices would be 50% . I am additionally assuming that more central areas will not give all of that back and will keep some of their post 2001 gains.

In 2001 a litre of Diesel was 55p or €0.65c now its nearly twice that. Commuting has a marginal cost you see.

Builders can only set realisable prices and if they are caught with inventory then tough.

Can you post a link to the post where you explain the "over 50%" reduction. Are you saying 50% because it conveniently matches the prices of property pre bubble? Or because you have a logical arguement on how this will happen? The former I think.

 

[Guest107]

ahh no. You justify their not falling at all, anywhere at all , first

if you accept they can or may fall I'll take your hand and lead you to the next logical conclusion

 

[whathome]

you mentioned previously where "over 50%" reduction in price is going to happen.

I didn't mention that, I think you're thinking of someone else

I say this because builders will not subsidise a person to buy a property below the build cost.

Agreed but desperate sellers of second hand property won't be concerned about original build cost. If I'm selling a house, I don't care what it originally cost to build it - could have been 10k or 200k.

 

[SteelBlue05]

I didn't mention that, I think you're thinking of someone else

Agreed but desperate sellers of second hand property won't be concerned about original build cost. If I'm selling a house, I don't care what it originally cost to build it - could have been 10k or 200k.

Yes, got your confused with 2Pack.

Desperate sellers wont be worried about build costs no, but they will be worried about their purchase price, so for a 50% reduction in these outer commuter towns where most property is relatively new I cant see a 50% reduction, i.e. sticky prices.

And most property in these outter commute towns are 200-400k, a 50-60% reduction would bring prices way below the max affordability of most people, so why would this happen?

Prices will always be near the max affordability of most people.

 

[conor_mc]

I say this because builders will not subsidise a person to buy a property below the build cost.

Of course they would. I'm not saying that I agree with the predictions, but theoretically it is entirely possible that builders who have invested several million in a development would sell below cost to realise a 10% loss rather than an effective 100% loss by hanging onto the property.

As in any business, cash-flow is king. You don't hold onto stock indefinitely, especially in a falling market. You cut your losses asap. After all, whats a 10% loss on one development when you've made 10% on however many developments over the last 10 years!

 

[SteelBlue05]

ahh no. You justify their not falling at all, anywhere at all , first

if you accept they can or may fall I'll take your hand and lead you to the next logical conclusion

I am not justifying anything about property prices, just questioning your figures which you are unable to back up.

I fully accept prices can fall, or course.

 

[whathome]

Prices will always be near the max affordability of most people.

Only in a rising market. In a falling market, many potential purchasers stay away even if they can afford to buy. Alternatively they may wait so that a better property will drop into their price range. So in a falling market, property becomes more affordable - it doesn't always have to be at the limits of affordability.

 

[CelloPoint]

...
And most property in these outter commute towns are 200-400k, a 50-60% reduction would bring prices way below the max affordability of most people, so why would this happen?
...

Do you not see what you've just written? You've got to ask yourself why crappy generic houses in crap locations miles from Dublin aren't below the max affordability for average earners. It's called hysteria driven by FTBs and investors with 19th century inferiority complexes.

I rent in Dublin 6 and there's no way I would live in Rathoath/Balivor/Kinnegad or somewhere even if someone paid me. I'm deadly serious about this because it would take me at least 90 mins to get to work and I'd be surrounded by awful, shallow people with miserable lives. How depressing is that?

 

[SteelBlue05]

Only in a rising market. In a falling market, many potential purchasers stay away even if they can afford to buy. Alternatively they may wait so that a better property will drop into their price range. So in a falling market, property becomes more affordable - it doesn't always have to be at the limits of affordability.

Ok yeah, it depends on location though. Good locations will always be at the limits of affordability.

But then for all the people who cant afford the good location they will be forced to look further outside the core areas and therefore the cycle starts again, keeping prices in the outter areas up again to limits of affordability.

Irish people want to buy property, we all wanted a car each years ago, now its a house, so unless that attitude changes....

 

[conor_mc]

Prices will always be near the max affordability of most people.

Disagree with that too, because it just assumes that everyone will say to themselves "Oh I can afford that, so I'll buy it now". They most certainly won't adopt that attitude in a falling market, the majority will wait til they're happy that property has stopped falling before jumping back in.

If there is a property crash, I reckon we're likely to see an overshoot on the way down before it rises back to a more reasonable level. At that point, I'd be inclined to agree with your statement above in general terms.

Only other point is that "affordability" will be significantly redefined once this era of incredibly cheap credit is brought to an end.

 

[joe sod]

Good read.I think my sentiment is similar to yours in that i spent a number of years in Australia and came back last year. I also sold my rented house at the beginning of this year. I too realised the substantial profiit i could realise and was not going to risk that on, from what i could see, an inflated asset. (Interesting that you should mention Gold. I am currently researching that (have invested the bulk of my proceeds elsewhere) but not so sure of the current price. If you could add more info in the gold thread i'd appreciate it)

Could someone explain how a buyer may reclaim a booking deposit.

My situation:

I currently have highest bidder (after the usual price war) on 2 properties which are due to close very soon.

To avoid any pitfalls (seller pulling out, survey not sound) i was going to put the booking deposit on both properties. (have the available cash due to my early sale of my house)

Is this advisable. It probably is not fair but then whichever seller is willing to sign (and all is well with house) first gets the deal.

What is involved in getting back my booking deposit and under what
circumstances can i lose it.

Thanks for any info.

Looks like phoenix you have just recently turned bearish on property seen as you were going to use the proceeds to buy another house recently. Just getting you back for a tactic you pulled on me

 

[SteelBlue05]

Do you not see what you've just written? You've got to ask yourself why crappy generic houses in crap locations miles from Dublin aren't below the max affordability for average earners. It's called hysteria driven by FTBs and investors with 19th century inferiority complexes.

I rent in Dublin 6 and there's no way I would live in Rathoath/Balivor/Kinnegad or somewhere even if someone paid me. I'm deadly serious about this because it would take me at least 90 mins to get to work and I'd be surrounded by awful, shallow people with miserable lives. How depressing is that?

Yeah I agree with you, I am just trying to find out why these prices will reduce by over 50% as stated by 2Pack.

 

[SteelBlue05]

Only other point is that "affordability" will be significantly redefined once this era of incredibly cheap credit is brought to an end.

Yes, but dont underestimate the potential for Mammy and Daddy to help out the sons and daughters even more than they currently are in order to get more buying power.

 

[whathome]

Irish people want to buy property, we all wanted a car each years ago, now its a house, so unless that attitude changes....

Facelifts are next, followed by zimmer-frames

£49.95 now - bet they'll be 50% higher in 20 years!

[broken link removed]

 

[Guest107]

Yeah I agree with you, I am just trying to find out why these prices will reduce by over 50% as stated by 2Pack.

Just take 2packs word for it, good lad.