Current public sentiment towards the housing market?

[whathome]

Any idea why the second buyer pulled out? How have other sales gone in the area? Have you had many viewing?

2nd buyers - we figured they were interested in another house, they had given us a time limit within which to accept their offer which we did. They pulled out pretty quickly without a survey or anything so we think they changed their minds and went with the other house in the end.

On viewings, we've had a few tyre kickers as our EA puts it but that's about it. EA has contacted potential buyers with update on lower asking price and we have 2 parties scheduled to view on Sat morning. I'm confident that the price drop will do the trick.

The only houses to sell since May have been lower priced than ours but not as well located in the area.

 

[Jeanne]

Poor 2Pack appears to have been banned. Anyone know why?

No, but I miss his contribution to his thread

 

[Jeanne]

Excellent stuff !

The flying analogy reminds me of the gag in the movie "Airplane" when the hostess asks the passengers to assume crash positions. When she looks back she sees the passengers spread over the floor, upside down on seats etc. - all in their crash positions.

Property interests of Ireland: assume crash positions !

Hilarious!

 

[micheller]

I saw the Star in work and there was a very amusing page which had almost a full page article on headline similar to 'Prices set to rocket' and a tiny article about interest rates going up. The larger article just repeated the usual- IIB say the market fundamentals are solid (demand, immigration etc).

So, everything must be okay then or the IR article would have been much larger, right?

M.

 

[redo]

I think the supply is having an effect on prices in Lucan

Price drop of 15k to 495k
[broken link removed]

198 for sale in the Lucan area
57 min 4 beds
141 max 3 beds

Has been on the market for over 4 months.

 

[rgfuller]

I think the supply is having an effect on prices in Lucan

Price drop of 15k to 495k
[broken link removed]

198 for sale in the Lucan area
57 min 4 beds
141 max 3 beds

Has been on the market for over 4 months.

I would have thought that the asking price the EA had set was unreasonably high in the first place hence the drop down. I've not seen any 4 beds in this area ever go over the 500k mark, and I've been watching the lucan market closely (south of the N4) for the last 12 months.

 

[whathome]

I would have thought that the asking price the EA had set was unreasonably high in the first place hence the drop down. I've not seen any 4 beds in this area ever go over the 500k mark, and I've been watching the lucan market closely (south of the N4) for the last 12 months.

You may not have seen it but they probably did. I think what happened is that with the absolute frenzy that occurred in the Spring, bidding wars sent houses way above asking. People who subsequently put their houses on the market with expectation of the "new" price have been disappointed - the frenzy has gone and asking price drops ensue. You would not have noticed the unusually high prices unless you were bidding or selling.

 

[Firefly]

Are the falling prices being quoted on myhome/daft etc happening with new builds? The reason I'm asking is that I think we may have hit the ceiling in 2nd house prices due to stamp duty. Someone may be able to afford the monthly repayments of ~ 2,250 on a place for 500k, but it's a different thig to raise the 37,500k stamp duty. So while 2nd hand house prices are flattening out, new builds will get more expensive as demand for these will increase...thus massaging the overall figures somewhat.

btw...moving from being bullish to bearish....but stuck somewhere in the middle which is the worst place to be..."I used to be indicisive, but now I'm not so sure"

Firefly

 

[Bedsit]

The global housing market - Checking the thermostat (Economist)

http://www.economist.com/finance/displaystory.cfm?story_id=7891311

 

[redo]

How about canaries in the gold mine, tsunamis and potatoe famine?

Copyright, CelloPoint, 2006.

http://www.askaboutmoney.com//showpost.php?p=255326&postcount=1372
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Gee the server seems to be having a bit of a hard time today - this thread has grown into a bit of a Frankenstein - it seems to be getting even more popular. We're heading for 200k hits faster than the first 100k hits. Even the main-stream media are reading this thread!

Poor 2Pack appears to have been banned. Anyone know why?

The Economist !!

 

[bearishbull]

A point for those who says "its always hard to buy your first house" and "if you can afford it buy it" etc. I think they would accept that back in say 2001 when wages werent much lower and rents were the same as now (all in real terms) it was a good time to buy, conversely there are bad times to buy then? Why then are houses so much more expensive today? Massive numbers of houses are being built and will continue to be built for forseeable future pumping extra supply into market, if anything this fact should have contained the market somewhat,alas no. When mortgae rates are 60% higher next year than last year where will prices go? Affordability and borrowing capacity are being squueezed and cost of living is outstripping wage rises, its downhill from here. Tying yourself to one property in one location may not be the smartest thing in todays gloablised economy, we have embraced globalisation in many ways but not in terms of labour mobility. We have to be ready to react to the vagaries of the external globalised economy with which our futures are now so interwoven. We have no monetary policy/currency to help us so tying yourself and your capital to this island may not be the best idea over next 10-20 years.

 

[BigM]

Affordability and borrowing capacity are being squueezed and cost of living is outstripping wage rises, its downhill from here.

Couldn't agree more... but I do think it will take some time to filter through to the general populace.
I do expect some Stamp Duty FTB concessions this budget which will provide a spurt to that section of the 2nd hand market.
I also expect more and more 'extras' will be included by builders rather than reducing their prices on new builds (as 2Pack I think suggested earlier?).
But eventually (12-18mths?) the writing on the wall will be writ so large that no-one will be able to ignore it any longer...

 

[redo]

I think the banks have a lot to answer for by increasing peoples affordability. If they kept mortages at 20/25 years (perhaps new legislation in next budget?) house prices would not have increased soo much over the last 18 months.

 

[BigM]

I think the banks have a lot to answer for by increasing peoples affordability. If they kept mortages at 20/25 years (perhaps new legislation in next budget?) house prices would not have increased soo much over the last 18 months.

Don't think legislation is a runner (free market and all that).
Sure don't the banks stress-test everyone and we're all loaded anyway so there's no problem there (says Dougal to Ted).

A move back to max 4/5 times incomes would have an immediate impact...

 

[exile]

I think the banks have a lot to answer for by increasing peoples affordability. If they kept mortages at 20/25 years (perhaps new legislation in next budget?) house prices would not have increased soo much over the last 18 months.

Do they ever come to collective agreements like that though? It would only take one bank/mortgage provider to say "Hey, if those guys won't loan you the money - we will! Over 35 years..." Not trying to defend the banks - but in the absence of external regulation don't we have to assume they'll act in their own interests?

 

[StoppedClock]

Assuming there was political will to try and engineer a soft landing is there any way that it can be done? If so, how?

 

[CelloPoint]

Assuming there was political will to try and engineer a soft landing is there any way that it can be done? If so, how?

Of course there's a way: The Affordable Housing Scheme.

There'll be no crash - just that this wonderfully considerate government has had enough of 'the speculators' and is going to provide the young citizens of this country with affordable housing for half nothing.

The statisticians up in the CSO will be busy preparing figures showing how affordable the average house actually is - they will knock down any talk of average houses in Dublin costing over 400k.

Affordable housing will be the trump card when it comes to diverting debates on government failure to control the housing market. Any hint that someone would criticise an affordable housing development (crappy houses in crappy locations), will be knocked down as snobbery.

Something along these lines anyway - anyone agree with me?

One thing's for sure, the spin over the coming months will be fascinating. There'll be something very surprising to come out of someone's hat.

 

[room305]

Assuming there was political will to try and engineer a soft landing is there any way that it can be done? If so, how?

Problem with the "soft landing" idea is that it is just a long drawn correction that occurs in real rather than nominal terms. Not sure why that is so great. Better to have a sharp correction on the order 20%-30% which will shake out the specuvestors and discourage further speculation. After that we can all get back to the business of trying to get Ireland Inc. going again and start thinking about houses as objects for shelter rather than magical wealth creation machines ...

Not quite sure how it could be achieved in practice. Punitive exit and re-entry taxes a la stamp duty are a good start as it lessens the chances of a rush to the exits. Perhaps some kind of holding incentive for specuvestors so that they don't just sell when prices stop rising. Oh yeah, change the SD laws on new builds as well. Key in the next few years would be to discourage new builds so the supply glut doesn't increase.

At the same time, you have to encourage buyers not just to wait at the sidelines in the hope of lower prices. Maybe a government-backed CFD should market prices decline.

Very tough to engineer a soft landing with so many moving variables involved. Take a lot of money as well. I guess the question is, is it really a worthwhile use of tax payer's money?

Depends on the amount I guess but I would be inclined to think it would be.

 

[Maine]

I think the banks have a lot to answer for by increasing peoples affordability. If they kept mortages at 20/25 years (perhaps new legislation in next budget?) house prices would not have increased soo much over the last 18 months.

In the IT today a small piece that says that Fitch, global ratings company, now view the Irish banking system as risky as Russia and South Africa due to the sheer scale of personal borrowing. This will force the banks to assess their risk exposures as foreign investors will be focussing on this.

 

[Persius]

... Affordability and borrowing capacity are being squueezed and cost of living is outstripping wage rises, its downhill from here. Tying yourself to one property in one location may not be the smartest thing in todays gloablised economy, we have embraced globalisation in many ways but not in terms of labour mobility. We have to be ready to react to the vagaries of the external globalised economy with which our futures are now so interwoven...

There's a reason why most of us haven't embraced the labour mobility aspect of the globalised economy. That's because most of view ourselves as human beings with many interests, and not just wage slaves.

Now it might be great for a 25 year old to head abroad to where the work is, thus gaining valuable work experience and earning big bucks. But what about the 35 year old who's just become a father/mother? Or the 50 year old who's trying to get their moody teenage children through secondary school with good exam results and no unplanned pregnancies? Do you think they should be ready to just up sticks and move to the other end of Europe?

If this is the model for the future, then the property investors are right. There will always be money to be made letting out to the new generation of gypsy workers. Otherwise, it still makes sense to put money into your own property as long it is close to a reasonably strong employment center (e.g. Dublin), and try to ensure that you remain employable and can find employment reasonably close to home.

If we have a major slump in Ireland in the 21 century, it'll most likely be due to some global slump. I find it hard to believe that construction in Ireland, and hence the Irish economy, could collapse in the absence of a global slump and rising unemployment in other areas first. In that case, there's probably nowhere great to emigrate to anyway. So I do still think buying your own home makes sense. The usual provisos about "starter homes" and being prepared to live there for 10 years apply (as well as being able to afford it based on even higher interest rates). Having said that, if you don't need to buy a home now, then it may make sense to hold off a while (that's what I'm doing).