Current public sentiment towards the housing market?

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Currently living in the U.K and planning to move back to Ireland to start a family. Houses prices are a huge concern as when I look at what I'll have to pay out in repayments its mind boggling. What about when the kids come along? My biggest concern is this if I buy a house next door to my sister inlaw, who bought last year I will have to pay 420,000 while she only paid 300,000 now that is some hike ( fell free to explain how the new price is justified in one year??) My repayments will be about 500-600 euro more a month and that is less money to go out, buy school book etc etc.

I work in th esame field as my sister in law and her salery has only gone up 3%. So my real concern is the effect house prices have on FTB's disposable income, they will have less(like me) to pump back into the economy, and consumerism is what is holding up most world economies at present.

So I think there is a real need for concern about the future, we need to be looking at the -long term-BIG picture.
(anyone have a cheap house for sale-get out before the crash:rolleyes: )
 
Re: What will happen to house prices?

whizzbang said:
First off, cheers for a good well thought out Bullish argument, we don't see enough of them.
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Thanks. Although I'm not that bullish myself. I am pretty sure that the housing boom is now over, but I'm not sure what will happen next.

I do feel that a lot depends on the attitude of lenders, although you won't get any clues from the likes of Austin Hughes; a banker telling you not to borrow money is like Ford tell you not to own a car.

I take the view that markets do, what markets do and they never cease to amaze me.
 
Re: What will happen to house prices?

miju said:
also, some people may be stupid but to insinuate that that irish people are THAT stupid as to take out a mortgage on a depreciating asset????
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Perhaps you should speak to all my neighbours that have remorgaged to buy depreciating assets made by BMW and Mercedes.

My neighbour's driveway with his&hers BMWs is depreciating at a rate of nearly 100 Euro a day.
 
If we are looking for clues as to what is likely to happen in the Irish housing market next, look no further than the US. Forewarned is forearmed.

The first link deals with stated income (self certified) mortgages and widespread fraud in California. Harrowing stuff.



http://cbs5.com/30minutes/local_story_266005029.html

The second link deals with early signs that the money markets are starting to price in some of the risk associated with voodoo mortgages.


http://articles.moneycentral.msn.co...ronicles/VoodooDebtAndTheComingRecession.aspx
 
whathome said:
Well... interest rates WILL increase : next Thursday by 0.25%

Not sure why you find that amusing :confused:
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Rates are increasing by 0.25%.... Thats a QUARTER OF ONE PERCENT, its nothing, particularly to the new breed of enterpreneur out there who the banks have assured us have had their mortgages stress tested.

I have real sympathy for young people who have paid vastly inflated figures for property in the past few years, zero sympathy for investors... My sympathy or lack of it counts for nothing...

What i find funny is the certainty of people as to whats going to happen, life is unpredictable, rates could drop again in the spring... the article was just to show how certainty looks very silly a few years doen the road

A neutral ECB rates is generally agreed to be 4%, so mortgages (ECB + say 1%) should be somewhere between 3% and say 6%. So if property in Ireland is valued correctly, an increase of 1% should be a pain for people but shouldnt be a cause for sleepless nights for 99% of mortgage holders... The fact that a .25% increase is billed as a hike says enough
 
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MadPad said:
That said, Ireland has been rolling the dice and coming up with 6's for a good few years now....
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The secret to success in anything is to load the dice as much as you can in your favour... success isn't a total fluke, and neither is failure.
 
But if 0.25% is nothing, then 10 x 0.25% rises is still nothing because 10 X Nothing is still nothing surely?:rolleyes:
 
Duplex said:
[broken link removed]

A severe shortage of family homes according to HOK?. Very glossy publication with the obligatory photograph of a group of agents quaffing champers.
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I attended an open house of one of these family homes that are in severe shortage in Dublin. That was almost 5 months ago and this week I had a call from the EA telling me it was still on the market and the vendor is open to offers !!?!!

The other thing that amazes me about reports like this is that they are not even required to put in a disclaimer such as would be required in other countries. At the very least something along the following lines would be welcome:

" The report is published for informational (entertainment ;) ) purposes and is not be construed as a solicitation or an offer to buy or sell any properties. The report is based on information obtained from sources believed to be reliable, but is not guaranteed as being accurate. Past performance is not necessarily indicative of future results"

:rolleyes:
 
As a lifelong IT reader, this kind of EA puke that's turning up all too often within the pages is starting to turn me off it. If it wasn't for Tom Humphries...
 
plaudit said:
But if 0.25% is nothing, then 10 x 0.25% rises is still nothing because 10 X Nothing is still nothing surely?:rolleyes:
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:) didnt realize I was talking with a lawyer...

Remember when rates were > 10%... There is still a probability (albeit small) that they can go back there.

a quarter of one percent is the minimum the ECB can raise rates without looking silly... If you cant take say 8 of these in a row, the mortgage hasn't been stress tested.. we've only done 3 so far...

Hopefully rates will rise enough to stop the property madness in ireland (lets say just another .5% over the next few months) and then fall back.
To me that would be the definition of Ireland rolling another 6. a reasonable drop in house prices, some people getting burned but most still capable of paying their mortgages, and values dropping just enough to burn investors but not so much that they all try to sell up at once.

But its out of our hands now, lets see what those nice people in Frankfurt do over the next year.
 
walk2dewater said:
The secret to success in anything is to load the dice as much as you can in your favour... success isn't a total fluke, and neither is failure.
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Dont tell me our brave buddies in government predicted the rash of low interest rates back in 2001. If they did, they should have introduced a property tax.

We need to start loading the dice again though, and get property back where its should be... somewhere to live and work, not a get rich scheme, that is affecting real business.
 
MadPad said:
:) didnt realize I was talking with a lawyer...

Remember when rates were > 10%... There is still a probability (albeit small) that they can go back there.

a quarter of one percent is the minimum the ECB can raise rates without looking silly... If you cant take say 8 of these in a row, the mortgage hasn't been stress tested.. we've only done 3 so far...

Hopefully rates will rise enough to stop the property madness in ireland (lets say just another .5% over the next few months) and then fall back.
To me that would be the definition of Ireland rolling another 6. a reasonable drop in house prices, some people getting burned but most still capable of paying their mortgages, and values dropping just enough to burn investors but not so much that they all try to sell up at once.

But its out of our hands now, lets see what those nice people in Frankfurt do over the next year.
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Mmm, aren't the rates being "normalised" around the 4-5% mark? We've just experienced a period of abnormal rates around the 2-3% mark, when the majority of our debt was taken on. We now have to pay this back at the higher rate. We're screwed as far as I can see.
 
but the thing is I don't remember 10% rates, a lot of people don't, which is part of the myth, that rates will never go over ~5%. The present base rate in New Zealand is 7.5%, there is no reason why that can't happen here.
 
MadPad said:
What i find funny is the certainty of people as to whats going to happen, life is unpredictable, rates could drop again in the spring... the article was just to show how certainty looks very silly a few years doen the road
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So you tried to bait us with the 1999 article and it didn't work... and you think it's funny that people have a clear indication of where interest rates are heading. Do you think you are more clever than the majority of people posting here? Do you think we're stupid enough to fall for such a lame trick? Such a pathetic attempt to make a point degrades anything else you have to say.
 
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MadPad said:
a quarter of one percent is the minimum the ECB can raise rates without looking silly... If you cant take say 8 of these in a row, the mortgage hasn't been stress tested.. we've only done 3 so far...
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There have been 4 so far. The ECB rate is currently 3% (in case you were unaware). It had been 2% last December. That's a 50% increase in interest rates. There will be another increase at the start of October.
 
plaudit said:
but the thing is I don't remember 10% rates, a lot of people don't, which is part of the myth, that rates will never go over ~5%. The present base rate in New Zealand is 7.5%, there is no reason why that can't happen here.
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If it goes to that, we are all screwed. but its very unlikely thanks to the ECB being too big for currency speculators to really take on. NZ doesnt have that luxury...

Best post so far was #4625, a real eye opener... http://www.askaboutmoney.com/showpost.php?p=283486&postcount=4625

It not in our interest for property prices to keep rising, and certainly not in our interest for there to be a crash. All in all a few interest rate rises are good news provided they stop say early/mid next year.
 
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