S
- Status
CelloPoint
Registered User
- Messages
- 75
Yes, I've nailed my colours to the mast. Please don't misquote me by saying I predict a 'December crash', because what I did predict is here:
http://www.askaboutmoney.com/showpost.php?p=259835&postcount=2067
I believe that any change in the market will come about very quickly indeed, especially in bubble markets.
You say 'it won't happen', but I think it would be naive not to maintain a reactive position to imminent danger. Anti-American jibes aside, I agree pretty much with walkdewater when he says:
There's no doubt that this attitude has played a huge part in the rise of the America as the largest economy in the world, whatever about their current difficulties (topic of discussion elsewhere on AAM).walkdewater said:
I'd prefer to be on this side of the Irish property tsunami than the other, because when it comes ashore, the damage to this economy will be huge.
G
Guest107
Guest
US Housing Starts Continue To Drop
Graph on CNN
Article Builders Hit The Brakes
http://money.cnn.com/2006/08/16/news/economy/housingstarts/index.htm
Graph on CNN
Article Builders Hit The Brakes
http://money.cnn.com/2006/08/16/news/economy/housingstarts/index.htm
W
walk2dewater
Guest
But that wasn’t my point.
But you prove my other point about how we deliberately go around in illogical circles as a way to defend a point of view. It is an insidious Irish cultural trait, not WANTING to think straight, and it intrigues me why it’s so embedded here.
A bit of topic though, no?
tententwenty: DCC is probably predicating that on the massive influx of immigrants, who will be leaving once the property and construction well dries up.
Fergal: Well that's your prediction, not DCC's.
tententwenty: I said Predicated, not predicted. When you learn the difference, come back and we'll debate the point.
Fergal: Anyone see a problem here with tententwenty's literacy?
www.dictionary.com. For you.
tententwenty: www.dictionary.com. For you.
Fergal: OK, I have to spell it out. DCC may well be PREDICATING that there will be a house shortage due to a massive influx of immigrants. You are PREDICTING that they will subsequently leave.
--------------------------------------------------------
Fergal: Central bankers have never worked before to keep base inflation at 2%. The banks are offering long term fixed rate mortgage at 5%.
tententwenty: The European Central Bank is RAISING INTEREST RATES TO COMBAT INFLATION. Thats the work they are doing to keep inflation at 2%. Your magical long term fixed mortgages are for 3 or 5 years. Thats not long term on a 35 year mortgage.
Fergal: Have you actually looked up the long term fixed rate? E.g. can you find 20 yr fixed at 5.6% ?
tententwenty: No I can't. That was my point. What was your point?
Fergal: [broken link removed] To restate my point "The banks are offering long term fixed rate mortgage at 5%."
--------------------------------------------------------
Fergal: The sharp downturn is from 15% pa to only 3% pa. aka soft landing. They are NOT predicting a fall in values let alone a crash.
tententwenty: Perhaps you would like to support that with a link?
Fergal: [broken link removed] It predicts that a soft landing is the most likely outcome. I.e. the rate of increase will experience of sharp downturn from increasing at 15% down to only an increase of 3%. In mathematical terms, the rate of acceleration will be negative while the velocity will continue to increase.
tententwenty:I'm trying to find the icon for "weeps while tearing my hair out". Did you even read the article you linked? An "abrupt correction" to the property market cannot be ruled out, it says, although the contraction of the construction sector is likely to be smooth.
O RLY?
Fergal: Now I did need the dictionary for "O RLY". Spot the difference between "cannot be ruled out" vs "is likely to be smooth"
--------------------------------------------------------
Fergal: Credit has always been available, jobs were not.
tententwenty: Did you even read the thread? This much credit has never been available, due to low interest rates. Or are people buying houses in cash from their savings where you live?
Fergal: No point having credit available if you have no job. Lots of jobs in Ireland.
tententwenty: So you're saying its all fine and dandy that these jobs (thats a couple working their entire lives) are not sufficient to pay off the loans within 35 years, based purely on speculation and market sentiment in the few years when there were low interest rates available? Irresponsible lending practices more worthy of loan sharks that the banks have been indulging in are responsible for the bubble, and will be responsible for the enormous amount of damage caused to the economy when it collapses.
Fergal: Credit follows jobs.
--------------------------------------------------------
Fergal: In 20 years time, wealth will transfer to Poland as it did to India and even China.
tententwenty: India and China are still third world countries. They have a fair bit of transferring yet to do, I'm sorry to tell you.
Fergal: Agreed.
--------------------------------------------------------
Fergal: I have no reference to determine the number.
tententwenty: What about a guess? And people breaking up find new partners and move in with them. Negligible.
--------------------------------------------------------
Fergal: Because we're Irish and have always done so.
tententwenty: No harm to you Fergal, but thats the stupidest thing I've read so far on this thread. Sure didn't saint patrick drive out all the property crashes? Ireland hasn't even existed as a state for a century, how can we have these long term habits you're talking about? This is the kind of rubbish that caused the bubble in the first place. Don't forget, Ireland is different!
Fergal: So after almost a century, you are saying it is still not possible to detect long term habits.
tententwenty: Considering there has only been significant wealth in the country for the last ten years, I would say it reflects the attitude of the previous generation more than anything else. And in any case, since when is "always" a hundred years?
--------------------------------------------------------
Fergal: Well its playing a good tune so far!
tententwenty: I wonder what kind of song you'll be singing when it snaps?
Fergal: Do I detect a measure of ill-will here?
tententwenty: Whatever emotional subtext you read into my replies is your business, not mine. Tell us Fergal, how many properties do you own?
Fergal: I don't think you want to know.
Fergal: Well that's your prediction, not DCC's.
tententwenty: I said Predicated, not predicted. When you learn the difference, come back and we'll debate the point.
Fergal: Anyone see a problem here with tententwenty's literacy?
www.dictionary.com. For you.
tententwenty: www.dictionary.com. For you.
Fergal: OK, I have to spell it out. DCC may well be PREDICATING that there will be a house shortage due to a massive influx of immigrants. You are PREDICTING that they will subsequently leave.
--------------------------------------------------------
Fergal: Central bankers have never worked before to keep base inflation at 2%. The banks are offering long term fixed rate mortgage at 5%.
tententwenty: The European Central Bank is RAISING INTEREST RATES TO COMBAT INFLATION. Thats the work they are doing to keep inflation at 2%. Your magical long term fixed mortgages are for 3 or 5 years. Thats not long term on a 35 year mortgage.
Fergal: Have you actually looked up the long term fixed rate? E.g. can you find 20 yr fixed at 5.6% ?
tententwenty: No I can't. That was my point. What was your point?
Fergal: [broken link removed] To restate my point "The banks are offering long term fixed rate mortgage at 5%."
--------------------------------------------------------
Fergal: The sharp downturn is from 15% pa to only 3% pa. aka soft landing. They are NOT predicting a fall in values let alone a crash.
tententwenty: Perhaps you would like to support that with a link?
Fergal: [broken link removed] It predicts that a soft landing is the most likely outcome. I.e. the rate of increase will experience of sharp downturn from increasing at 15% down to only an increase of 3%. In mathematical terms, the rate of acceleration will be negative while the velocity will continue to increase.
tententwenty:I'm trying to find the icon for "weeps while tearing my hair out". Did you even read the article you linked? An "abrupt correction" to the property market cannot be ruled out, it says, although the contraction of the construction sector is likely to be smooth.
O RLY?
Fergal: Now I did need the dictionary for "O RLY". Spot the difference between "cannot be ruled out" vs "is likely to be smooth"
--------------------------------------------------------
Fergal: Credit has always been available, jobs were not.
tententwenty: Did you even read the thread? This much credit has never been available, due to low interest rates. Or are people buying houses in cash from their savings where you live?
Fergal: No point having credit available if you have no job. Lots of jobs in Ireland.
tententwenty: So you're saying its all fine and dandy that these jobs (thats a couple working their entire lives) are not sufficient to pay off the loans within 35 years, based purely on speculation and market sentiment in the few years when there were low interest rates available? Irresponsible lending practices more worthy of loan sharks that the banks have been indulging in are responsible for the bubble, and will be responsible for the enormous amount of damage caused to the economy when it collapses.
Fergal: Credit follows jobs.
--------------------------------------------------------
Fergal: In 20 years time, wealth will transfer to Poland as it did to India and even China.
tententwenty: India and China are still third world countries. They have a fair bit of transferring yet to do, I'm sorry to tell you.
Fergal: Agreed.
--------------------------------------------------------
Fergal: I have no reference to determine the number.
tententwenty: What about a guess? And people breaking up find new partners and move in with them. Negligible.
--------------------------------------------------------
Fergal: Because we're Irish and have always done so.
tententwenty: No harm to you Fergal, but thats the stupidest thing I've read so far on this thread. Sure didn't saint patrick drive out all the property crashes? Ireland hasn't even existed as a state for a century, how can we have these long term habits you're talking about? This is the kind of rubbish that caused the bubble in the first place. Don't forget, Ireland is different!
Fergal: So after almost a century, you are saying it is still not possible to detect long term habits.
tententwenty: Considering there has only been significant wealth in the country for the last ten years, I would say it reflects the attitude of the previous generation more than anything else. And in any case, since when is "always" a hundred years?
--------------------------------------------------------
Fergal: Well its playing a good tune so far!
tententwenty: I wonder what kind of song you'll be singing when it snaps?
Fergal: Do I detect a measure of ill-will here?
tententwenty: Whatever emotional subtext you read into my replies is your business, not mine. Tell us Fergal, how many properties do you own?
Fergal: I don't think you want to know.
CelloPoint
Registered User
- Messages
- 75
tententwenty: DCC is probably predicating that on the massive influx of immigrants, who will be leaving once the property and construction well dries up.
Fergal: Well that's your prediction, not DCC's.
tententwenty: I said Predicated, not predicted. When you learn the difference, come back and we'll debate the point.
Fergal: Anyone see a problem here with tententwenty's literacy?
--------------------------------------------------------
Fergal: Central bankers have never worked before to keep base inflation at 2%. The banks are offering long term fixed rate mortgage at 5%.
tententwenty: The European Central Bank is RAISING INTEREST RATES TO COMBAT INFLATION. Thats the work they are doing to keep inflation at 2%. Your magical long term fixed mortgages are for 3 or 5 years. Thats not long term on a 35 year mortgage.
Fergal: Have you actually looked up the long term fixed rate? E.g. can you find 20 yr fixed at 5.6% ?
--------------------------------------------------------
Fergal: The sharp downturn is from 15% pa to only 3% pa. aka soft landing. They are NOT predicting a fall in values let alone a crash.
tententwenty: Perhaps you would like to support that with a link?
Fergal: [broken link removed] It predicts that a soft landing is the most likely outcome. I.e. the rate of increase will experience of sharp downturn from increasing at 15% down to only an increase of 3%. In mathematical terms, the rate of acceleration will be negative while the volocity will continue to incease.
--------------------------------------------------------
Fergal: Credit has always been available, jobs were not.
tententwenty: Did you even read the thread? This much credit has never been available, due to low interest rates. Or are people buying houses in cash from their savings where you live?
Fergal: No point having credit available if you have no job. Lots of jobs in Ireland.
--------------------------------------------------------
Fergal: In 20 years time, wealth will transfer to Poland as it did to India and even China.
tententwenty: India and China are still third world countries. They have a fair bit of transferring yet to do, I'm sorry to tell you.
Fergal: Agreed.
--------------------------------------------------------
Fergal: I have no reference to determine the number.
tententwenty: What about a guess? And people breaking up find new partners and move in with them. Negligible.
--------------------------------------------------------
Fergal: Because we're Irish and have always done so.
tententwenty: No harm to you Fergal, but thats the stupidest thing I've read so far on this thread. Sure didn't saint patrick drive out all the property crashes? Ireland hasn't even existed as a state for a century, how can we have these long term habits you're talking about? This is the kind of rubbish that caused the bubble in the first place. Don't forget, Ireland is different!
Fergal: So after almost a century, you are saying it is still not possible to detect long term habits.
--------------------------------------------------------
Fergal: Well its playing a good tune so far!
tententwenty: I wonder what kind of song you'll be singing when it snaps?
Fergal: Do I detect a measure of ill-will here?
That's one hell of an unreadable bicker.
So Fergal, are you a bull or a bear?
Because once the sentiment changes it will be next to impossible to sell a FTB house/apartment. It might be many years before the necessary correction is made due to the illiquid nature of the market.
We mightn't even see much of a drop in nominal terms.
P
phoenix_n
Guest
The mistake that you may be making is that you think that the Dec crash(and its just a measured guess) means that suddenly prices drop and its all over and lets pack our bags. Thats a too simplistic approach IMO.(no direspect)
Just take a house that you currently see on sale and has been on sale for the last 2 to 3 months. Asking price 400K. Still not sold. And by Dec. Still not sold. The asking price is still 400k ( EA tells interested parties that vendor is willing to negotiate). Its true value may be much much less but until that vendor eventually sells it it wont be realised.
I guess what i am trying to say is that when the crash happens you will not see prices suddenly drop. You have to take into account the lead time.
M
miju
Guest
to quote a certain analogy earlier in this thread, your climbing out of the crazy pool while saying ah sure the waters grand hop in to the next sap who wants to
buy
regarding decreases in nominal terms are predicting a 3% growth only next year which by my reckoning equates to a decrease in real terms given inflation is at 4%
S
StoppedClock
Guest
Not if you drop your price!!! Supply/Demand, sound familliar?
CelloPoint
Registered User
- Messages
- 75
Sorry, but just reiterating a point here, an investor who bought the house at 200k will happily take a 50k - 100k+ hit if he thinks the sentiment has changed for the worse. Investment properties and second houses will behave very differently to PPRs. And with all the section 23 properties out there, coupled with people holding on to their old houses when trading up, there are a huge number of investment properties. People will rush to sell their second houses if the mortgage on their PPR depends heavily on the value of the former.
An average correction of over 20% in less than four months isn't a crash? If the ESRI/TSB house price index is even negative for this year I will give you my house.
In a liquid market yes. Even in an illiquid market if there is a sufficient driver. But what exactly is that driver going to be? You yourself haven't even posited any suggestions for what this might be.
The chances of such a sudden and imminent correction are so infinitesimally small that I would be stupid to act on it. Nothing in life is without risk.
If your prediction comes through it will be good. The market needs a correction, so the sooner the better.
A few months ago you were all set to invest in Irish property. Now you think there is a possibility of an imminent collapse of the property market here. I would be genuinely interested in knowing why you had such a change of sentiment, if you don't mind elaborating. I am not being sarcastic, good investors can and do regularly change their mind about particular investments.
Read over my posts. I'm not the one predicting sudden price drops.
So there will be a sudden crash that will take many months to be realised?
G
Guest107
Guest
Assetarily Induced Bipolarity Syndrome I'll christen it.
Hope theres a cure or a Ritilin thang for it
Am I being deceitful in some way? I'm selling it at what the market is willing to pay. Should I reduce the price simply because I think it is overvalued?
That's why I said nominal ...
So I should hang onto my house so I can sell it at a lower price later?
CelloPoint
Registered User
- Messages
- 75
Even the ESRI/TSB figures can be misleading - a house bought for 800k and rennovated, then sold a year later for 1.2M would come out in their analysis as being a 50% increase, no? The fact that TSB put their name to the research, to me suggests compromise in the integrity of the study.
Let's be in no doubt that section 23 investment properties and second homes are very liquid.
Ultimately, it's your decision. Seeing as you've adopted the 'wait and see' strategy, how long are you going to wait?
Agreed.
Denied.
I have contributed to this thread since page 1. I developed a whole list of reasons as to why I am extremely skeptical not only of the Irish property market, but of the Irish economy as a whole. Click on my username to see my posts if you want an idea of where I am coming from. But to make life easier for you, see this post that includes a list of bullet-points:
http://www.askaboutmoney.com/showpost.php?p=257965&postcount=1896
G
Guest107
Guest
Tight Margin Of Error For SubPrimers.
The forthcoming downturn/slump/crash/wobble will be the first in Irleand where the sub prime lenders will be tested in action. These guys only entered the market in the past few years . They repossess and sell very very fast if there is a problem, not like our traditional lenders.
I am unaware where they may be found in the Irish market but I suspect they have quite a lot of the single detached market in some rural areas .
Here is the effect in action.
One $300 phone bill costs a woman her home
because the sub primer bowwowers have no savings, no cushions, no margin error built in and no chance if the sub prime lender calls the loan in.....3 months of missed payments and they may cut their losses.
Remember that they expect over 10% of loans to go bad so if they have 100,000 mortgages out there in Ireland they may ultimately reposses and sell 10,000 homes.
This will have a catastrophic effect in certain areas but I cannot say which ones yet. In that article you can see that 0.8% of homes are being repo-ed in Georgia in each quarter or 3.2% a year annualised.
I suspect its not D4 or D6 though !
The forthcoming downturn/slump/crash/wobble will be the first in Irleand where the sub prime lenders will be tested in action. These guys only entered the market in the past few years . They repossess and sell very very fast if there is a problem, not like our traditional lenders.
I am unaware where they may be found in the Irish market but I suspect they have quite a lot of the single detached market in some rural areas .
Here is the effect in action.
One $300 phone bill costs a woman her home
because the sub primer bowwowers have no savings, no cushions, no margin error built in and no chance if the sub prime lender calls the loan in.....3 months of missed payments and they may cut their losses.
Remember that they expect over 10% of loans to go bad so if they have 100,000 mortgages out there in Ireland they may ultimately reposses and sell 10,000 homes.
This will have a catastrophic effect in certain areas but I cannot say which ones yet. In that article you can see that 0.8% of homes are being repo-ed in Georgia in each quarter or 3.2% a year annualised.
I suspect its not D4 or D6 though !
P
phoenix_n
Guest
I know. It was me. (and someone else forget who) . And my predictions may/will change depending on prevailing factors. This is a debate , its not science.
Yes. Example: I just bought a new bike. Cost 400euros. To me its worth 400euros but when i sell it its only worth 150euros.
A profit on property is only realised on sale. And so is a loss
S
StoppedClock
Guest
No, I was merely pointing out the flaw in your argument, to recap:
You are Selling to Let but don't think there will be a drop.
I say : why sell then?
You say : as it will be impossible to sell following change in sentiment (still implying no drop, if there is then everything you know about property market is wrong etc. etc.)
I say : it will be possible to sell, but one would need to drop one's price (Supply/Demand) (Hence IMO prices will drop)
You Say : So you advise me to hang onto my house so I can sell it at a lower price later?
I say : You missed my point
- Status