Current public sentiment towards the housing market?

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whathome said:
I don't see it in terms of winners and losers.

I always drop by here when looking at myhome - we thought our selling/buying saga had ended but it has dragged on .... again. Another buyer backed out, probably reading this thread!
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Hey whathome - just want to wish you well with the sale.

We're on the same side in this debate but contrary to what some folks might think of the 'bears' on this thread, I don't like to see anyone having a stressful time either selling or buying. And I even include those who tried to make a fast buck out of the property market and believed all the EA-bank-govt-media hype

Hang in there, keep the faith. I predict you will sell within the next few weeks. Call it a woman's intuition.
 
I enclose an interesting if complicated academic study of properties markets accross UK, US, Japan and of course Ireland. This model has proven suprisingly accurate in historical application.

It models rather different futures for all these markets, all of them fairly dire... except for Ireland... which it predicts will see house prices double...again ... between 2005 and 2010, and no substantial slow down till 2033!!

I have enclosed briefly in a previous post to no response.

As a former bear, this may now set me on a path of purchasing, if not now, soon, and i see the current nervousness as a blip in the market, one i am happy to capatalise on.

Is the data and fundamentals that this paper based on not worth comment and if so i would appreciate the reasoning as it is turning me from bear to bull, in direct contrast to the sentiment in this forum

http://www.federalreserve.gov/pubs/ifdp/2005/847/ifdp847.pdf

I suggest openning and searching for "Ireland" and looking at the graphs, the rest is fairly hard going.
 
Doesnt matter how good the demographics are, if all these people cant borrow due to higher interest rates and low wage growth then prices wont rise much more from here (in real terms),plus he ignores the fact we have no control over interest rates anymore etc. Numerous reasons not to beleive his very simple model will hold true for ireland.
Also no matter what the demographics if theres oversupply prices will fall.
 
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somerset said:
Is the data and fundamentals that this paper based on not worth comment and if so i would appreciate the reasoning as it is turning me from bear to bull, in direct contrast to the sentiment in this forum
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in fairness to you seeing as how you emigrated to oz i'd imagine it's ALOT harder for you to see what's happening on the ground

interesting link by the way , but again that's based on an "everything is rosey" scenario when it fact it quite the opposite which is something you would see if living in Ireland, it's not just property prices when you start to factor in other living costs and inflation at 4.5% it's a very different picture than what that link says particularly when the baby boom they're talking about has come and gone
 

Yes, it does make a lot of sense that house prices are correlated with demographics and real interest rates.

Notice on page 8 - the model ignores international capital flows i.e. it models on the basis of a closed economy. I would ask where Ireland's economy would be were it not for the flow of international capital.

However, the model may not predict patterns of emigration and immigration correctly.

The author in the report says that Ireland has a young population and this is correct, due to the "Pope's Childer", David McWilliams's soi-disant generation and many "New Europeans".

Quite a large percentage of Ireland's working age population come from Eastern Europe. 3% of Lithuania's population is in Ireland and they arrived in the recent past. A large proportion of Ireland's working age population could therefore up and leave.

This happened already in the 1980's and you can see how house prices stagnated in the same graph. Note that the model predicted that they should have been higher, which leads me to think the model is only looking at the working age population, not the number of people actually in work.

Coincidentally (or not) house prices in the Uk, the target country of most Irish emigrants, increased steeply between 1984 and 1990.

I would have thought also that there was more of a baby boom in Ireland immediately after the war, and this would correspond with the parents of the "Pope's Children" (why didn´t McWilliams call them the Bosco generation or something more catchy?) but the author says there was no data from then and the initial post war boom peaked around 1960.

And in the wake of the Wanderly Wagon generation baby boom what happened to house prices? According to the graph, house prices in real terms declined from 1972 to 1982, when the model predicts they should be constant or increasing.
 
somerset said:
I suggest openning and searching for "Ireland" and looking at the graphs, the rest is fairly hard going.
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Interestingly for a market study it doesn't take supply into consideration or the looming dip in demographics due to falling birth rate in the 80's or the speculative effect due to unusually low interest rates for a number of years. There's no mention of salaries or rental yield.

It concludes that demographics are the primary force underlying the evolution of real house prices. I would agree with this but the factors that create an asset bubble have been ignored by the study.

I've seen several simplistic academic "models" created for various markets over the years that appear to track past performance very well. They usually don't work well at predicting the future.

It reminds me of this book : Dow 36000 - The New Strategy for Profiting From the Coming Rise in the Stock Market
http://www.amazon.com/gp/product/0609806998/002-2092240-8232040?v=glance&n=283155 - Have a read of the online reviews half way down the page!

Or this book : "Dow, 30,000 by 2008" Why It's Different This Time.
http://www.amazon.com/gp/product/1893958701

Both books made amazing predictions based on "solid" academic research but have become a joke in the investment community.

And in the review for Dow 36,000 Amazon say: "Most books that predict a sky-high stock market make their forecast either by extrapolating the trend line of the market's recent past or by looking at the demographics of the baby boom"
 
From Central Bank sectoral report.

This shows that during 12 months to June 2006 the manufacturing sector was borrowing almost 15m a week while the mortgage / construction / real estate industry was borrowing almost 1,000m a week. For other industries the figures are even weaker.

Suggests things may be just a little unbalanced to support growth in prices all the way to 2010.

[broken link removed]
 
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SLAPPY said:
Here's a good article on the bursting of the U.S. bubble and how everyone is starting to realize how silly their logic was towards property investment.

http://money.cnn.com/2006/08/24/real_estate/pluggedin_tully.fortune/index.htm
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Even the U.S. National Association of Realtors (NAR) is beginning to admit that there is a problem:
http://paper-money.blogspot.com/2006/08/lereah-mea-culpa.html
http://www.realtor.org/Research.nsf...ppt/$FILE/Leadership Summit (August 2006).ppt

If there is a property bubble collapse in our future, at least we have an advantage, we can learn from the current collapses in Australia and the U.S. and perhaps soften the blow to our economy. But will we learn?

[broken link removed]
 
Maine said:
Suggests things may be just a little unbalanced to support growth in prices all the way to 2010.
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Are you thinking that an unhealthy borrowing imbalance in the economy until June 2006 equals momentum in the housing market going forward four years?

Edit - No need to answer, I had interpreted the statement the wrong way around
 
My point is that "fundamentals" have to be amazing for anyone argue that an economy that is borrowing 65 times more for its housing sector compared to its manufacturing sector could be sustainable for 5 more years.

It also amazes me that amateur investors continue to invest with relatively small deposits like 10% and vast amounts of debt relative to take home income - apparently "secured" on a single asset class in a single economy.

What people forget is in a market decline banks will lower the multiples they are prepared to lend on. Therefore equity withdrawal on PPRs will not be so easy and pressure to sell investments will be massive. Banks won't want the keys to these properties they will want cash.
 

Well spotted. I can see that development getting badly hit. It's too high density. 2 bed apts are going for 575 whereas their true value is about 375. I believe that my xmas this will be known to the general public.
 
http://www.unison.ie/irish_independent/stories.php3?ca=35&si=1677819&issue_id=14569


Hidden in the business pages of the Indo.
 
Immigrants going home

And home they go...

Dr Shabnam Singh recruits doctors for a private hospital.

"The Indian private sector facilities are at a par, and dare I say it, in some cases better than what is available in the west," she says.

"In the last six years I would say that from a trickle at first there is now a constant flow of people wanting to relocate back home."

So much for immigrants propping up the housing pyramid scheme for another two years. I had to laugh at the indo the last day, they had a pull out supplement all about just that. I wonder how many immigrants read the indo?
 
September starts on friday and its technically already autumn yet the market seems very quiet in my area(glasnevin/drumcondra). Houses on market months that would have sold in a few weeks in mar/april . Two new builds nearby have been for sale for 2 months and i have yet to see anyone viewing.
 
[broken link removed]

Surprised no one mentioned the SBP article about AMV's (advertised minimum prices) at auctions. Inside the Property section of the article itself, it covered the individual cases of a huge number of properties. It even mentioned the case of the Dun Chuillin property on the Creagh Road that was mentioned in this thread.

[broken link removed]

A different SBP article about the 57% of withdrawls of properties at auctions. Despite this, properties that did sell at auction were well in excess of their AMV's.

The consenous seems to have been that while people are still willing to pay inflated prices for premium properties, things are slowing down.
 

BB, we'll know the state of the market on 6th of September after this [broken link removed] goes under the hammer. Last one a couple of doors away went for €1.27m so that's the benchmark.

If you are referring to the 2 on Mobhi Botharinn I think they are being pitched very high as a result of the auction for the 3rd on that made €750 - crazy price!

So it's hold you breadth till Sept 6th.

Roy
 

Possibly the most significant post on this thread. If the smart money is saying the game is up, then the game is up. Its only now a matter of waiting until the news moves from the business pages into mainstream media.
 
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