Current public sentiment towards the housing market?

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Bedsit said:
Check out this [broken link removed] I was amazed at the asking prices and the size of the houses compared to Ireland.
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House prices in large parts of the US are way below here and they get alot more.

Just seen that UK mortgages in August month were £9.1b which at 1.45 ytd average to euro is 13.2 Billion .

We borrowed on average ytd in 2006 E 2 billion a month. They have about 12 times more population so they should be borrowing 24 billion a month to keep up with us.

Hence relative to the UK we are borrowing 80% more each month on mortgages ......and they think they have a debt problem.

A little crude but is this correct ?
 
Maine said:
House prices in large parts of the US are way below here and they get alot more.

Just seen that UK mortgages in August month were £9.1b which at 1.45 ytd average to euro is 13.2 Billion .

We borrowed on average ytd in 2006 E 2 billion a month. They have about 12 times more population so they should be borrowing 24 billion a month to keep up with us.

Hence relative to the UK we are borrowing 80% more each month on mortgages ......and they think they have a debt problem.

A little crude but is this correct ?
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I think your analysis is interesting but I think the situation for Ireland is worse than you say

UK's population multiple is actually about 14.5 (60m/4.2m) so the equivalent number for new borrowing should be E29bn. So Ireland is borrowing - on a per capita level - twice the UK level. And the UK gets a lot of press internationally for a borrowing problem!
 
Speaking of Ireland's debt problem, I came across another eye opener the other day. As has been reported here a few times, Fitch has put Ireland on a special "risky" watch list because our ratio of private sector debt to GDP is the worst in the world.

Someone posted that this may not be as bad as it looks because this includes corporate debt.

Might be a valid point if this corporate debt was being used to fund innovation, expansion, export growth etc. but wait ! While reading the Indo last week an article mentioned there is some evidence that a significant portion of corporate borrowing is being funneled into commercial and residential property! :eek:
 
room305 said:
The economic reason for house prices to fall are the same as here - interest rates have increased significantly.
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We had this debate before and the vast majority of people in america buy using long term fixed rates. Even when rates were 1% in america people were still getting mortgages for 5-6%. Eitherway economic conditions are generally accepted not to be bad enough to cause a housing crash based on previous crashes but it is happening because of sentiment mainly.
 
My guess would be that interest rates and more exotic mortgages have a lot to do with it...
(p.s. several of the mortgage products they refer to as exotic appear to be the norm in Ireland - adjustable, IO, intro rates etc.)

A great shift toward adjustable mortgages helped push America's housing boom into high gear. Now, as the boom unwinds, the riskier side of those mortgages is coming home to roost.
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In 1990, the last time the nation was entering a real estate slowdown, less than 10 percent of home loans were ARMs, adjustable-rate mortgages. For the first half of this year, that number is 46 percent of the total, measured in dollar volume, says Richard Brown, chief economist at the Federal Deposit Insurance Corp.
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[broken link removed]
 
bearishbull said:
We had this debate before and the vast majority of people in america buy using long term fixed rates.
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Gotta strongly disagree with you there. Up until a few years ago, yes the majority of americans put 10-20% (preferably 20%) down and usually fixed their rates. But the situation really changed in the past few years with massive adoption of ARMs (what we refer to as variable rate mortgages) and some absolutely toxic loans such as negative amortization (where you can end up paying interest on the interest.. :eek: ) The scheer number of "ARM resets" due over the next few years has been described as a ticking time bomb by many a (IMO) clued-in commentator.

Do not kid yourself, the US has gotten majorly drunk on cheap credit and "exotic" forms of lending - IMO their hangover is gonna be pretty bad.
 
bearishbull said:
Eitherway economic conditions are generally accepted not to be bad enough to cause a housing crash based on previous crashes but it is happening because of sentiment mainly.
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Agree - it's mainly a sentiment fuelled drop in the US.

In Ireland we're in a more dangerous situation than the US:

- As in the US, sentiment has changed
- The Irish property bubble is far more inflated
- Our interest rates are still rising
- Our economy is more dependent on construction

The brewing storm in Ireland makes problems in the US look like a pleasant summer shower.
 
Jister said:
Now that these houses are actually built they have gone from €850k to €750K!! As can be seen there are 4 available out of the original 5, despite being on the market since the development started.

[broken link removed]
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Now available for €700k
 
I dont know why people spend so much on houses in rural areas where theres loads of land to build on in the future. In the long run if theres demand for property is such areas more houses will be built at lower cost(even allowing for planning issues). I wouldnt pay more than cost of building and land plus 30% for a rural property.
 
fatmanknows said:
Not quite sure which sectors are going to mop up the new arrivals in the country.
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The immigrants are probably better of staying at home as thats where all the Irish jobs are going. 600 jobs were lost last week with most of those jobs going to eastern europe. Another 300 jobs were lost today in Limerick. Braun announced a couple hundred layoffs a fortnight ago.
 
[broken link removed][discussion_id]=86512&dcn[forum_id]=4

Some comment from the Daft Discussion boards....
 
cjh said:
[broken link removed][discussion_id]=86512&dcn[forum_id]=4

Some comment from the Daft Discussion boards....
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Thise guys post is quite worrying for anyone selling......

Comments:
I wrote this further down on the buying or selling thread on 14/9/2006

****

I used to be an estate agent.
Have 6 friends who still are.
They are superb agents, second to none.
About 3 weeks ago the market popped !
Buckets on for sale, more than ever before .... and NOBODY interested in even viewing.

One mate of mine works in a well-known agency.
They have 75 properties on the books .... and only 5 bids. And even they are shaky. only 1 bidder, no counter bidders.

Everyone in the office is twiddling their thumbs as the phones are not ringing.
Im not talking about no bids, Im talking about no one even ringing.
They are cancelling viewings laft, right and centre as not even 1 person is looking.

This is in the centre of Dublin, encompassing 1st time buyer market and some 2nd time buyer €700k+ properties.

Party's over folks !
-----
Now 2/10/06

SINCE ive written this the markets gotten worse.
When you read about new launches being 'sold out' .. try calling a week or two later and you will see whats still on offer i.e. LOADS !

Auction rooms are dead.
One estate agent in dublin had 7 auctions last thursday and no one even turned up - let alone bid !
Swathes of 2nd hand properties not selling.

The only property thats selling are the ones where the owners are cutting prices. Prices have definately come DOWN.

All this evidence doesnt point to the bubble popping .. its pointing to the bubble having already popped. Past tense !

Always remember, unlike stock prices, property prices are sticky.
If someone has a house for sale at 700k and the market is only willing to pay 650k then the house just sits there. Official statistics dont record a decline, even if the market drops to 600k.

The knifes just gone in ... theres going to be a bloodbath !
 
Assuming the above is accurate then things appear to even worse than what we have already guesstimated on this thread so far.
 
I'm running out the door to a match but if any of you saw TG4 news it spoke to an auctioneer Naughton I think in Galway who basically said major problems in the market for sellers Is the Nuacht repeated this evening
 
[broken link removed]

I wonder where Ireland might sit on the Boston graph on the Billings video @ 3 min 50 secs?
 
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