Current public sentiment towards the housing market?

[kerrybull]

The US slowdown is starting to hit employment in the real estate sector. Their run lasted five years.


http://news.moneycentral.msn.com/provider/providerarticle.asp?feed=OBR&Date=20060917&ID=6027640

Everyone knows that the US is still the main engine for the world economy, what happens there will have major knock-on-consequences for the world economy and our own economy. I firmly believe that the bubble here has already burst, but the reality is that we will not wake up to hear this news on the radio or read it in our press. The housing market does not work in this way. The same factors that led to the explosion of prices will in fact lead to the inevitable collaspe. The lemming like rush to buy will be followed by the lemming like surge to sell. The evidence is all around us.

 

[Eurofan]

The lemming like rush to buy will be followed by the lemming like surge to sell. The evidence is all around us.

I'm convinced the above will follow through quite quickly in the next 6 months or so. Although for the most part i reckon W2TW arguements have a lot of merit i don't think the 'Irish' urge to own their own property will make the down cycle as sticky as it often is in property declines.

The vast majority of people i know who've bought in the last few years weren't buying a home they were buying an investment, even if it was their ppr that was still how they viewed it.

If anything is alive and well in the Irish mentality it is the 'cute hoore' attitude that will make a lot of investors/speculators head for the doors in the next few months in the hope that they will get out while the going is good.

When the market turns, as it appears to be already, i suspect we'll all be shocked by just how quickly.

 

[bearishbull]

I think less people are keeping their old house as an "investment/pension" when they are trading up. Loads of people were doing this is last few years which was reducing supply. Rates are rising and people are seeing the cost of holding their old house rising while rents arent great and everyone's(including estate agents banks etc) talking about a "slowdown".

 

[kerrybull]

Ireland's property market has not been driven by professional investors. We all know the nurse, teacher, policeman, office worker, who have dipped into the market and own more that one property. The evidence is again all around us that they have used the capital appreciation of their property as a means to live a lifestyle that would have previously been beyond them. Now is the time when we see these rather inexperienced investors trying to sell their investment properties to pay back much of their lifestlye debt before the market turns. As in life there will be winners and loosers and those that leave it too late may well loose more than anyone has previously imagined.

 

[ivuernis]

Haven't seen this one posted today...

PDs to consider plan to scrap stamp duty

Who thinks this is a pre-election spin or a serious consideration on the PDs part? MacDowell is launching his opening salvos as PD leader saying his is looking to increase the number of PD seats in the house.

Any comments?

 

[Calina]

Now is the time when we see these rather inexperienced investors trying to sell their investment properties to pay back much of their lifestlye debt before the market turns.

This hasn't started happening yet - but what I suspect is happening is that new entrants to that market are thin on the ground by comparison to previous year.

I'd also add that lifestyle funding equity extraction is not limited to would-be investors.

Regarding non-chaining - there seems to be some anecdotal evidence of more people selling on their first property at this stage. I don't know if that's "possible top of the market" related or "just can't fund it" related. I guess a combination of the two.

 

[Calina]

Haven't seen this one posted today...

PDs to consider plan to scrap stamp duty

Who thinks this is a pre-election spin or a serious consideration on the PDs part? MacDowell is launching his opening salvos as PD leader saying his is looking to increase the number of PD seats in the house.

Any comments?

Yes. Stamp duty is payable on completion of a contract, and currently dependent on the value of the contract (give or take some messing with VAT in some cases and exclusions depending on floor area and previous ownership). If they are serious about dealing with stamp duty head on, they will make it a standard fixed charge - not linked to the value of the contract.

Instead, they are going to fluter around.

 

[room305]

Who thinks this is a pre-election spin or a serious consideration on the PDs part? MacDowell is launching his opening salvos as PD leader saying his is looking to increase the number of PD seats in the house.

I think there is a good chance this could have an unintended effect on the housing market. It will make more FTBs wait at a time when the market needs them to commit if it is to avoid nosediving as inventory mounts.

 

[ivuernis]

I think there is a good chance this could have an unintended effect on the housing market. It will make more FTBs wait at a time when the market needs them to commit if it is to avoid nosediving as inventory mounts.

I think it's happening already, though this will add to it. I think it's going to be a very quiet Q4 in the property market.

 

[kerrybull]

Political efforts to intervene in the market could well cause the market to falter as public confidence may view this as an artificial attempt to talk up the market. Our economic system is based on confidence it is a house of sand and the real danger is the rising tide of debt.

Debt will do for Ireland, as sure as the astroids did for the dinasours.

 

[Afuera]

I think there is a good chance this could have an unintended effect on the housing market. It will make more FTBs wait at a time when the market needs them to commit if it is to avoid nosediving as inventory mounts.

Good point. Rumours of the scrapping of Stamp Duty next December could certainly cause a lull in demand until then. (By which time interest rates will almost certainly be up another half point)

Other talk about anti-speculative measures and a possible return of CGT to 40% could also encourage a lot of investors to get out of the market quickly before all these changes come in.

Could the interfering politicians be helping to set the market up for a double-whammy (low demand, high supply)?

 

[whizzbang]

Political efforts to intervene in the market could well cause the market to falter as public confidence may view this as an artificial attempt to talk up the market. Our economic system is based on confidence it is a house of sand and the real danger is the rising tide of debt.

Debt will do for Ireland, as sure as the astroids did for the dinasours.

Is it better that the goverment does something to try and control it now or should they just leave it? surely popping it earlier is better than popping it later? no matter how ham fisted the approach is?

 

[Howitzer]

I sit better that teh goverment does somethign to try and control it now or should they just leave it? surely popping it earlier is better than popping it later? no matter how ham fisted the approach is?

But they're not looking to pop it. They have yet to recognise that the problem is the actual pricing. They're looking to increase liquidity in the market by making it easier for FTBs to buy and STBs to trade up, ie: the biggest factor still isn't getting the credit, it's getting the cold hard cash required for the stamp duty. Reminds me of Baltimore doing a 4 for 1 share split about a month before their price started it's terminal decline. In reality it'll make it easier for the last clutch of desperados to get on the ladder before it, probably, keels over.

 

[kerrybull]

Our government no longer controls our interest rates. If the French and Germans believe that Europe needs interest rates of 4% then we will have interest rates of 4% If they have to go higher, then they will. The sad fact is that Ireland and our over inflated property market will count for little in the decisions that have to be made by our European cousins. They have given us fair warning and the reality is that our government can do very little to alter the course that we are now on.

 

[whizzbang]

Our government no longer controls our interest rates. If the French and Germans believe that Europe needs interest rates of 4% then we will interest rates of 4%

I would love to know how many Irish mortgage holders know this? that could be a scarey statistic.

 

[Calina]

Is it better that the goverment does something to try and control it now or should they just leave it? surely popping it earlier is better than popping it later? no matter how ham fisted the approach is?

Clearly popping it earlier is better than popping it later. But they're not looking to do that. They're looking to prevent it from popping at all, which means the correction will be longer drawn out and far more painful. I realise that there are a lot of people screaming that the fundamentals are okay, and look at employment rates and immigration and all that. But: house prices are rising faster than salaries are, are now between 11 and 12 times the average salary and that is not a sustainable situation to be in. Delaying a correction is only delaying the inevitable.

 

[tententwenty]

They're looking to prevent it from popping at all, which means the correction will be longer drawn out and far more painful.

If McDowells plan goes ahead, there will be a slowdown prior to an election, then the mother of all dead cat bounces directly afterwards, for which he will take due credit as well as reaping the benefits at the voting booths. As cynical and self interested political plans go, its pretty good.

 

[beattie]

I would love to know how many Irish mortgage holders know this? that could be a scarey statistic.

I would hazard a guess that very few indeed would be aware of this and then there are others who are in denial about it. It is going to get very messy

 

[TallSpoon]

[broken link removed]

[FONT=verdana,arial]Corkery to lead new Dell facility[/FONT][broken link removed]
I scent something very ominous for the brethern in Limerick. I'd hold off on tapping up any mortgages for a while.

I wouldnt be too pessimistic. I believe that the Polish facility is to service growing demand in Russia and Eastern Europe. If there is going to be a big demand for PCs in these countries then why build and transport the goods from Ireland at huge cost.

 

[bearishbull]

I wouldnt be too pessimistic. I believe that the Polish facility is to service growing demand in Russia and Eastern Europe. If there is going to be a big demand for PCs in these countries then why build and transport the goods from Ireland at huge cost.

That plant is twice the size of here, why build pc's for europe middle east and africa in ireland for x when you can build them in poland for x divided by 3???? Dell will go eventually, they may leave a small operation here along with some customer service to take advantage of tax here(thats if tax benefits in poland are'nt better),but they will definetely go within 5-10 years.