Current public sentiment towards the housing market?

[random2006]

Out of 11 auction results listed on myhome so far today (Sep 27th) ....

All 11 were withdrawn, only 2 selling after auction:

[broken link removed]

Maybe its just me not understanding the finer details of auctioning property, but if your house is quoted at, say €1.9 million and withdrawn, presumably thats because nobody would buy it, why would you then requote it at €1.95 million?
B

 

[liteweight]

I noticed this too. Although every house was withdrawn they all upped the price. Obviously they still have confidence in the market.

 

[whathome]

Maybe its just me not understanding the finer details of auctioning property, but if your house is quoted at, say €1.9 million and withdrawn, presumably thats because nobody would buy it, why would you then requote it at €1.95 million?
B

The initial quote is the AMV (Advised Minimum Value) which the vendor would usually not accept but after a property fails at auction they move to private treaty where the quoted price is closer to what the vendor would accept.

AMV's are supposed to be within 20% of the reserve price - which is the price that a vendor would sell at.

 

[tententwenty]

if the posts here about increasing inventory are accurate

Well I'll put it to you like this; I went through Gort today, and you'd think there was already an election on with the amount of real estate agent signs festooning the place. And not just one or two, but 5 or 6 seperate agencies for each house. You couldn't go sixty feet without another "for sale" sign hanging up there. Anecdotal, I know, but true nonetheless. So either inventory is rising sharply or the town of Gort is looking to emigrate.

 

[whathome]

I noticed this too. Although every house was withdrawn they all upped the price. Obviously they still have confidence in the market.

This is normal on withdrawals. AMV is always set well below vendor expectation so when it fails and moves to private treaty they have to quote something more realistic.

Not looking good for the market at all based on today's results.

 

[random2006]

The initial quote is the AMV (Advised Minimum Value) which the vendor would usually not accept but after a property fails at auction they move to private treaty where the quoted price is closer to what the vendor would accept.

AMV's are supposed to be within 20% of the reserve price - which is the price that a vendor would sell at.

Cheers!

 

[whathome]

When you compare recent (this week and last) auction results:
[broken link removed]

to the archived results - scroll down to April & May:
[broken link removed]

...you can see that the drop in auction performance is huge.

 

[liteweight]

This is normal on withdrawals. AMV is always set well below vendor expectation so when it fails and moves to private treaty they have to quote something more realistic.

Not looking good for the market at all based on today's results.

Well I know it's normally 'normal', but if people, in general, believed the Evening Herald headline, then surely they would leave the house price at the AMV. Anyway I thought the AMV is what the Estate Agent thinks the house is worth? I know the 'guide prices' were a joke but AMV was supposed to be a little more realistic. Are you saying that the vendors think their new higher price is more realistic? Surely that would imply confidence in a sale?

 

[whathome]

Anyway I thought the AMV is what the Estate Agent thinks the house is worth?

No - it's supposed to be the Advised Minimum Value, not what the agent thinks the property is worth.

I know the 'guide prices' were a joke but AMV was supposed to be a little more realistic. Are you saying that the vendors think their new higher price is more realistic? Surely that would imply confidence in a sale?

From experience, I know that AMV's are no more accurate than the old guide prices. I've been to auctions where the reserve was more than 25% higher than AMV.

 

[walk2dewater]

Yeah, but if higher rates hurt nearly everyone except yourself,

Who's "everyone". LOL.. The 4.3m property maniacs here that make up less than 1% of the eurozone economy?!

Yeah, youre right, no guarantee ECB wont raise rates to 10% but they dont want to.

Again sez who? You've heard that rates can't go above XYZ a thousand times so it must be true? If REALLY you want to know what the ECB "wants to do" I suggest you go here www.ecb.int. The ECB wants something called "price stability" and my money is firmly on them getting just that, regardless of collateral damage to the Irish property pyramid.

 

[MadPad]

Who's "everyone". LOL.. The 4.3m property maniacs here that make up less than 1% of the eurozone economy?!




Again sez who? You've heard that rates can't go above XYZ a thousand times so it must be true? If REALLY you want to know what the ECB "wants to do" I suggest you go here www.ecb.int. The ECB wants something called "price stability" and my money is firmly on them getting just that, regardless of collateral damage to the Irish property pyramid.

I think that its in all our interest that employment stays high, that workers stay at work and pay taxes and so on... Thats "everyone", not a great choice of words, but on the whole, I think even people who have yet to get on the property ladder would be better off renting in the Ireland of 2006 than being a property owner in the Ireland of 1986, with the country bankrupt 20% unemployment etc etc etc.

Ah yeah, it doesnt need to go anywhere near 10% to kill irish property. 5% will do that, probably even 4%. But short of inflation hitting 7 or 8% in the eurozone, 10% interest rates wont happen...

I'm well aware they are focussed on fighting inflation and on having price stability, and oddly enough, Marys Section 23 in Carrick doesnt get a mention at the ECB meetings . Now stuff can happen to cause inflation, the Chinese could discover trade unions, oil can go back up, the french can riot, loads of stuff.. And the ECB would raise rates to cope with that... At some stage maybe this will happen but I dont think that level of inflation is likely in the immediate future. With the influx of eastern europeans, due to start hitting other countries soon, this will probably moderate wage inflation in those countries...

What do you think the ECB interest rate will be in December 2007?

The consensus seems to be probably 4%, maybe even it starts back down towards 3%? Unless there is a major suprise on the cards, it'll be nowhere near 10%.... 10% interest rates would kill the german and french economies, thats why they wont do it. And they are big enough to do what they want.

Fully agree with you on them not caring about the paddies buying everything... They have warned us repeatedly, what more can they do...

Listen, if rates hit 10%, we are back to 1997/98 prices... No guarantee they wont but lets not get carried away... A 500k interest only mortgage would cost 50k a year I've been a property bear for years but even I cant see that happening in the next few years

 

[Doris]

I think that its in all our interest that employment stays high, that workers stay at work and pay taxes and so on... Thats "everyone", not a great choice of words, but on the whole, I think even people who have yet to get on the property ladder would be better off renting in the Ireland of 2006 than being a property owner in the Ireland of 1986, with the country bankrupt 20% unemployment etc etc etc.

Ah yeah, it doesnt need to go anywhere near 10% to kill irish property. 5% will do that, probably even 4%. But short of inflation hitting 7 or 8% in the eurozone, 10% interest rates wont happen...

I'm well aware they are focussed on fighting inflation and on having price stability, and oddly enough, Marys Section 23 in Carrick doesnt get a mention at the ECB meetings . Now stuff can happen to cause inflation, the Chinese could discover trade unions, oil can go back up, the french can riot, loads of stuff.. And the ECB would raise rates to cope with that... At some stage maybe this will happen but I dont think that level of inflation is likely in the immediate future. With the influx of eastern europeans, due to start hitting other countries soon, this will probably moderate wage inflation in those countries...

What do you think the ECB interest rate will be in December 2007?

The consensus seems to be probably 4%, maybe even it starts back down towards 3%? Unless there is a major suprise on the cards, it'll be nowhere near 10%.... 10% interest rates would kill the german and french economies, thats why they wont do it. And they are big enough to do what they want.

Fully agree with you on them not caring about the paddies buying everything... They have warned us repeatedly, what more can they do...

Listen, if rates hit 10%, we are back to 1997/98 prices... No guarantee they wont but lets not get carried away... A 500k interest only mortgage would cost 50k a year I've been a property bear for years but even I cant see that happening in the next few years

 

[Doris]

How common are interest only mortgages in the Republic, in the United Kingdom they are the reserve of those with recession proof high incomes

 

[hmmm]

Listen, if rates hit 10%, we are back to 1997/98 prices... No guarantee they wont but lets not get carried away... A 500k interest only mortgage would cost 50k a year I've been a property bear for years but even I cant see that happening in the next few years

Again, you're just getting sucked into the "ah sure they couldn't do something like that, think of the impact on us" thinking that the bulls have. If the ECB need to ever kill inflation in Germany and France with 10% rates, they will have no hesitation in doing so. Particularly those on interest only mortgages are in real trouble if (err when) we enter negative equity territory and if interest rates rise.

 

[liteweight]

I'd imagine they're very common. Property prices are so high that I can't see people, wishing to purchase at the high end of the market, realistically being able to afford it otherwise. A few months ago the latest 'brag' was a 1M mortgage!!

 

[Neffa]

How common are interest only mortgages in the Republic, in the United Kingdom they are the reserve of those with recession proof high incomes

Doris, having lived and applied for mortgages in both areas, I have to say that's simply not true.

Practically anyone (not just investors) can get an IO mortgage in the UK if you say it is backed by ISA's, pensions etc. Then no-one actually bothers to check if you're actually paying into the plan.

IO mortgages are relatively harder to get in Ireland due to the pension arrangements being different (personal pensions less common, more people in company schemes). Mostly they are for investors with time-limits applied for IO mortgages for PPR's.

 

[MadPad]

Again, you're just getting sucked into the "ah sure they couldn't do something like that, think of the impact on us" thinking that the bulls have. If the ECB need to ever kill inflation in Germany and France with 10% rates, they will have no hesitation in doing so. Particularly those on interest only mortgages are in real trouble if (err when) we enter negative equity territory and if interest rates rise.

Maybe I'm not phrasing my posts well enough but trust me, I do not for one second think the ECB thinks of Irelands greedy little "BTL property millionaires", and genuinely hard pressed young FTB's when setting interest rates...

If they ever need to do go to 10% or beyond they will. But right now, I cant see the need this year, next year or in the forseeable future. Again i could be completely wrong on this, if you have any useful links as to what the projected inflation rates are for the main ECB member countries, I would genuinely like to see them. Im not trolling on this... just looking for info... Whats the 10 year fixed rate at...

Maybe the post sounds bullish but guys sometimes this forum reads like a support group for bears or people who are wishing for a crash

 

[Doris]

I wonder if IO mortgages will have an impact. You would think if you were clever enough to qualify that you wouldn't be stupid enough to expose yourself. But I know there is a post poverty need in Ireland to be seen to be rich. I note that the desire for houses is driven by a desire so strong that it must be neurotic in root. The collective yearning for 'the big house' seems pervasive, a desire this strong probably is owned by an older generation as is merely being expressed by a younger one.

 

[StoppedClock]

Maybe I'm not phrasing my posts well enough but trust me, I do not for one second think the ECB thinks of Irelands greedy little "BTL property millionaires", and genuinely hard pressed young FTB's when setting interest rates...

If they ever need to do go to 10% or beyond they will. But right now, I cant see the need this year, next year or in the forseeable future. Again i could be completely wrong on this, if you have any useful links as to what the projected inflation rates are for the main ECB member countries, I would genuinely like to see them. Im not trolling on this... just looking for info... Whats the 10 year fixed rate at...

Maybe the post sounds bullish but guys sometimes this forum reads like a support group for bears or people who are wishing for a crash

Madpad agreeing with this post but not with last, I do not believe 10% interest rates would hurt the German recovery as I have said before (and therefore by the law of repition it must be true) Germans are savers not borrowers. Their infrastructure is largely already in place and hence their economic growth is based on the strightforward sustainable 2% of relaistic productivity gains not hyped up figures based on consumer spending or trying to catch up after years of underinvestment.

Since low interest rates have made bugger all difference in stimulating their economy we should not overestimate the impact of higher in surpressing it.

PS. Exact opposit is true of Ireland

PPS do not believe interet rates will be 10% in the next 10years this was just arguing a point

 

[beattie]

Maybe the post sounds bullish but guys sometimes this forum reads like a support group for bears or people who are wishing for a crash

If the authorities had done their duty and tried to introduce some order into this bubble when it was in its infancy (i.e. not rolled back Bacon) the crash which will happen would never have needed to materialise. I know people who are borrowed up to their necks, where the next rate rises have not being factored in and where there is little chance of major salary increases in the next few years. They are the ones who will feel the pinch in the years to come but they won't get a lookin in the FF tent at the Galway races....