Current public sentiment towards the housing market?

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More from Germany:

http://today.reuters.com/news/artic...BusinessNews&storyID=nL29903388&from=business

German tax take for June has increased 11.5% from the previous year. Some of this is probably due to the World Cup.

Note also they are talking of reducing the rate of corporate tax to 30% as they are very aware that they are being undercut by countries such as Ireland.

The German economy is much bigger than Ireland's and cannot turnaround as quickly but obviously has a much bigger weighting with the ECB when they are setting interest rates for the eurozone.
 

Die duetsch sind kommen. I for one predict a German recovery and have invested as such.
 
Superman said:
Please...
"Die Deutschen sind gekommen"
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That's past tense. Werden would be future.

Just from the point of view of inflation, the three percent increase in VAT will surely affect consumer prices.

From the ECB´s point of view, the effect on the eurozone inflation would probably be the same as if VAT in Ireland were increased by 50% i.e. to 71!
 
The whole question of German grammar is way, way off topic, but frankly, from the original sentence, you can't tell whether he meant: The Germans are coming, the Germans have come or the Germans will come. My money, however is, on The Germans are coming which, in German, is "Die Deutschen kommen".

But I'd prefer something like the "Die deutsche Konjunktur wachet auf". It's years since I've written formal German, but I'm not sure, in the context "The Germans are coming" would be correct idiom in German.

In any case, the Germany economy is one of the biggest exporters of value goods, if not the biggest - I can't find a link to the article at present, but I believe German exports exceed exports of the US, China and Japan put together. The big, big issue for Germany is its high unemployment. The fact that its economy is a lot more soundly based in output and trade income will be heavily ignored by the Anglo-Saxon economies because Germany's unemployment rate is touching 11%, versus us clever people with our official rates of 5 and 6%. Not to mention our very, very heavy dependence on debt.

Given a choice between low interest rates and a skyrocketing property market, I'd prefer to see inflation under control. I don't mean inflation in the cost of borrowing per se, but inflation in the cost of normal living, food and getting to report, and clothing.

That being said, if the US catches a serious cold, then I'm pretty sure that no economy will escape a negative impact, and that includes Germany.
 
Superman said:
Please...
"Die Deutschen sind gekommen"
Click to expand...
Or perhaps "Die Deutschen werden irgendwann, bald, gleich, hoeffentlich noch kommen". As stated by phoenix_n, it'll take a while for a turnaround to be actually experienced on the ground.

Regarding the 3% VAT increase and the effect on inflation, this surely depends on whether this is fully passed on to customers. I would imagine that many retailers will simply drop the base price by enough to allow the end price with 19% VAT in 2007 to be the same as it was with 16% VAT in 2006. A 3% increase doesn't give you much scope to round-up to even numbers without making significant increases in price. And significant increases will slow down consumption too much, so retailers will be hesitant to risk it (though they may start hiking some prices up now, so they can then keep them constant in 2007 by droping the base price back).
 
Interesting article here from the US:

Property put on market in Sept 2005 at $1.1m. Didn't sell until Aug 2006 at $530,000 a drop of over 50%.

It demonstrates the perils of being too slow to react to a falling market.

Also interesting in that the fall happened over the period of only 1 year - much much faster that the 4 years that a housing slowdown is supposed to take.

http://www.realestatejournal.com/buysell/markettrends/20060824-corkery.html?refresh=on
 
When people talk of 11% unemployment in germany and of similar unemployment levels in ireland in 1980's i always think well nearly 90% were/are employed. If nearly 90% can get a job then im not too worried about the 10% ,they have to worry about their employability and if necessary increase it through more qualifications etc.
I tend to wonder was it so bad here in 80's and is it so good now?. My father and mother (now in mid 50's)despite neither finishing school, or being particularly intelligent/entrepreneurial or getting any qualifications managed to afford a decent house and live well with holidays abroad through the70's and 80's. Neither inherited anything and have had a good life on (for most of the time) a single salary from a state employer. Nowadays the equivalent couple would need loads of qualifications and jobs paying way above average to afford the same house/lifestyle and neither could stay at home permenently like my mother did. thats the celtic tiger for ya!
 
bearishbull said:
Neither inherited anything and have had a good life on (for most of the time) a single salary from a state employer.
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I'm not sure how bad it was here during the 80s either but having a state job must have made things a lot easier?
 
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whizzbang said:
I'm not sur ehow bad it was here during the 80s either but having a state job must have made things a lot easier?
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The job wasnt too well paid but i suppose well enough given that many of my dads friends in similar paid state jobs(gardai,prisons,fire service) could buy multiple investment properties, unfortunately he didnt! Hates debt even when used constructively.
 

The thing about high unemployment is that it puts fear into people that they too could lose their jobs and not be able to find a new one at a similar salary level. Of course if you are a civil servant, then this isn't a big concern. But for the rest of us, you are less likley to be borrowing for mortgages or otherwise living it up if you always have this real fear in the back of your mind. You're more likely to put your money away for a rainy day.

I've lived in Germany, and believe me, there are plenty of highly qualified unemployed people too. Many of them have little prospect at present of finding a job that pays similar to the one they lost. You just have to be unlucky and be the one made redundant, or work for a company that goes bust. If new jobs in your area aren't being created, then it doesn't matter how much qualifications you have. Sure, they could get a job at the minimum wage, but it's hard to support a family on that.

Should Irish unemployment rise to similar levels, those without jobs may have to hand back their house keys to the banks. Alot of people who remain in jobs (civil servents excluded) will have many sleepless nights, and will surely cut back on their consumption of electrical goods, nights out etc. Think what that will do to the economy and our migrant workforce (who sell you electrical goods, serve your meal and live in your investment property).
 

Interesting read. The 'snap' in the irish market will be just as severe.
 

Extremely interesting - the 1st paragraph describes the current situation here exactly. Only a matter of time I suppose until the 2nd paragraph does too!
 
darex said:
Also interesting in that the fall happened over the period of only 1 year - much much faster that the 4 years that a housing slowdown is supposed to take.
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Rates did increase by 525% during that 12-mth timeframe from 1% to 5.25%, far faster and higher than anything the ECB has done.
 
ivuernis said:
Rates did increase by 525% during that 12-mth timeframe from 1% to 5.25%, far faster and higher than anything the ECB has done.
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The overnight rate on loans by the fed increased by that much, sure, but most mortgages in the US are long term fixed (over 20-25years) and the rate on these only increased by approx 1%.

There has been an increase in so-called exotic loans in the US over the last few years (they would call a variable or tracker mortgage exotic) but they make up a much smaller proportion of mortgages than over here.
 
ivuernis said:
Rates did increase by 525% during that 12-mth timeframe from 1% to 5.25%, far faster and higher than anything the ECB has done.
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Good point, but isn't it also true that actual rates paid by homeowners - even on variable mortages - have varied by much much less in percentage terms in the US than the Fed rises.
 
Persius said:
Of course if you are a civil servant, then this isn't a big concern.
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Well thats where a lot (most?) of the money from the property boom and celtic tiger generally has been channeled, into the civil service, largely for aspiring politicos and petty empire building, not industry and infrastructure where it should have gone.

With pay increases at triple the rate of the private sector and continuous hiring going on, the question is, in the event of a collapse, will the previously "untouchable" civil service jobs become eminently touchable? Will we see mass layoffs of civil servants?
 

True, good point!
 
No layoffs as that would be political suicide but expect to see the non-replacement of people who retire - already happening in the North East AFAIK.
 
darex said:
Good point, but isn't it also true that actual rates paid by homeowners - even on variable mortages - have varied by much much less in percentage terms in the US than the Fed rises.
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Yes, as gearoidmm already pointed out to me.
 
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