Current public sentiment towards the housing market?

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Folks,
The housing environment is govern like any asset by supply and demand.

We are going from a situation where supply is at historial highs(forecast 90-100k this year),housing density historical low 2.55,prices at record high and interest rates at historical low 2.75%.

If interest rates go to 5-6%,that is roughly 80% increase on current repayments whether its' investor or home loan.

Given current house prices,couples or single people with parent support can only get into the housing market.
Where is the demand to support 90k new homes a year or even 60k homes a year.
To give u an example,Australia with a population of 20m and similiar demographics & housing density to Ireland has forecast 150k new housing starts this year(Australia also has an extensive annual skilled migration programme)).


As well in Ireland,theres' an abundance of rental stock at less than half mortgage of buying same property.

Rent is not dead money-its' only the Irish psyche.
For example,In Germany and France over 70% of population rent their homes-I think in Germany its' 78%(correct me out there if I'm wrong)

Anyone who has bought property in the last year has made a financial killing but theres' is no point having all your assets in 1 basket.

It reminds me of the tech boom where we had all these 'paper millionaires' ie trintech,baltimore etc-the happy ones where the investors who sold on the up whilst those who held up for higher gains ended with zero.'

Economic reality will determine the housing market and at the moment,its only pointing 1 way
 
We do have a lot of people leveraged in this country, but there is still a lot of people who have "family safety nets", be it cash or land etc. These will be tapped before people sell at a loss.

Just to give you an insight into a typical sellers psychology -----

I'm going to put my house on the market in about 6 weeks. Renovations are starting to come together. However, I will not sell unless I receive what I know to be a minimum going market value. I'm not talking about what the estate agent says (which i think is over-valued) - I mean average prices I've seen houses sell for in the estate over the past few months. I'll hold on for 3 months or 6 months and then I'll take it off the market rather than sell below that value. I'm not saying I'm looking to "break the price cieling" or do something special - but I have my number and I'd say a lot of people have the same mentality.......
 
macbri said:
If interest rates go to 5-6%,that is roughly 80% increase on current repayments whether its' investor or home loan.
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Where are you getting that figure from?!
 
delboy159 said:
I'm going to put my house on the market in about 6 weeks. Renovations are starting to come together. However, I will not sell unless I receive what I know to be a minimum going market value. I'm not talking about what the estate agent says (which i think is over-valued) - I mean average prices I've seen houses sell for in the estate over the past few months. I'll hold on for 3 months or 6 months and then I'll take it off the market rather than sell below that value. I'm not saying I'm looking to "break the price cieling" or do something special - but I have my number and I'd say a lot of people have the same mentality.......
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Are you trading up? or selling an investment. If you are trading up, note that the prices in the trade-up market are going to rocket this autumn IMO. Let us know how you get on. It will be interesting to hear from your prospective.
 
redo said:
prices in the trade-up market are going to rocket this autumn IMO.
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I would tend to agree also. When this current period of bearishness is demonstrated to be yet another episode of "crying wolf", and therefore "prices can't fall", sellers will be emboldened and buyers forlorn.
 
Its' pretty easy to work out

Interest rates at moment are 2.75%(ECB Rate),bank margin(1-1.25%)=4%

Interest rates by ECB move by 2-3% ECB(3% rise will equal current US rate 5.75%) will give bank mortgage rate of 6-7%.

This is an increase of 80% increase on interest only mortgate,about 60-70% on a term mortgage depending on term
 
Bottom line is: We're entering the "going Japanese" phase. I have feared this outcome for a while. Now it looks highly probable to me. Average prices up min. 25% next 18mths, high-end who knows, 30%-40%-X%? The market will be comprised as follows:

Sell side: absolutely no discounts.
Buy side: Damn the price, damn the rate, damn the debt, buy NOW.
 
Persius said:
However as far as I can see, the garages simply refused to sell at a discount. From anecdotal evidence, many garages refuse to enter into any meaningful bargaining, and will simply hold on to a vehicle for an extra year rather than sell at discount.
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Thats flawed as the asset (in this case a car) will depreciate over the year if they choose to retain it. In the current second hand car market a car sales man would be very foolish to let a prospective customer walk out of his premises.

Back to property though.

Someone wrote that all 6 in their group said it was a bad time to buy. If another 6 agree that its time to sell that is where the market will drop. Loads of sellers. No buyers.
 
walk2dewater said:
Bottom line is: We're entering the "going Japanese" phase. I have feared this outcome for a while. Now it looks highly probable to me. Average prices up min. 25% next 18mths, high-end who knows, 30%-40%-X%? The market will be comprised as follows:

Sell side: absolutely no discounts.
Buy side: Damn the price, damn the rate, damn the debt, buy NOW.
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If this is your opinion would you put your money on it? Would you buy now to get that min 25%?
 
walk2dewater said:
Sell side: absolutely no discounts.
Buy side: Damn the price, damn the rate, damn the debt, buy NOW.
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or forever be stuck in this ****hole.

IMO, the 'investor' and FTB market will be daed this autumns' season. It will be the trade-up market that begins to panic, fearing being stuck in an area with they do not want to settle in (bought initially to get on the ladder, location was not a factor at this stage).

Sellers wishing to trade up from the FTB market will have plenty of tyre kickers but with no real interest from FTB's. I think there will be discounts to be had in new developments and within the FTB market.
 
delboy159 said:
However, I will not sell unless I receive what I know to be a minimum going market value.
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But if the market value has dropped to say what you bought it for would that mean you would not sell the place.
 
I look forward to selling my house at a vastly inflated price in about 18-24mths time! Planning on emigrating and I was worried I might end up selling at a loss.

So from a purely selfish perspective, that will work out brilliantly. Though of course, I have no doubt that friends, family, girlfriend etc. will be unrelenting in their advice that I would be "mad to sell" ...
 
room305 said:
I look forward to selling my house at a vastly inflated price in about 18-24mths time! Planning on emigrating and I was worried I might end up selling at a loss.
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It will depend on what area your house is in. May I ask where abouts it is?
 
phoenix_n said:
In the current second hand car market a car sales man would be very foolish to let a prospective customer walk out of his premises.
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Houses can depreciate in value too of course. Slightly off-topic but I know a garage owner and he says that in the 2nd hand market the value of older cars (01,00,99) is quite close to newer ones (04,05). Or should be at least. Quite simply they can't shift the newer 2nd hand cars and older 2nd hand cars are flying off the forecourts. Supply and demand being what it is, in terms of a trade-in they will offer pretty much the same price for both kinds.

Obviously this varies depending on model etc. Going a bit off-topic and don't want a highly entertaining thread to get locked so I'll shut-up.
 
walk2dewater said:
Bottom line is: We're entering the "going Japanese" phase. I have feared this outcome for a while. Now it looks highly probable to me. Average prices up min. 25% next 18mths, high-end who knows, 30%-40%-X%? The market will be comprised as follows:

Sell side: absolutely no discounts.
Buy side: Damn the price, damn the rate, damn the debt, buy NOW.
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There is no way average prices are going to rise by another 25%,average buyers simply cannot afford them prices.

A new estate in drogheda is looking for 400,000 for a 3 bed semi,anyone iv'e spoken too has said they are not worth that money and your trying to tell me they'll be going for 500,000 in the next 18 months.i couldn't buy that.

Once the downturn comes many people will be forced to sell ,whether they like it or not,i know a few of them.
 
shnaek said:
If this is your opinion would you put your money on it? Would you buy now to get that min 25%?
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No. It's illiquid and it's a balance of probability statement. I'm not 100% certain it will happen, just seems more probable than any other outcomes I can think of.

I'm happy to remain in cash and CAN$/CHF bonds (60%), gold shares/bullion (15%), energy/metal shares (20%) and trade my QQQ and Dow puts on the side (5%).
 
thewatcher said:
There is no way average prices are going to rise by another 25%,average buyers simply cannot afford them prices.
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It's not about "average" buyers it's about the marginal buyer. They set the market price. There are enough "marginal" fools left to drive prices much higher I'm afraid.
 
redo said:
It will depend on what area your house is in. May I ask where abouts it is?
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North side, not a great area but close to the city and well served by buses. Small 1 bed but it has a decent sized garden and crappy apartments and duplexes near-by seem to be selling at ridiculous sums.

Problem is I guess, that there may well be an abundance of 1 beds on the market by that time. However, it would need to drop in value by over 30% (based on a conservative current market value), to get less than what I paid for it.
 
Hi,

With reference to the many points that the house prices will be affected when other countries open their doors - this is where Ireland has been very clever.

We opened our doors to the Polish and have had a head start with regards to them getting established and settled (jobs, spouse, children etc). Alot of fellow (for examples sake) Poles will come over as their friends are already here etc etc. Thus the reason for the snowball effect in relation to their presence here in Ireland.

These foundations are being established and will be well and truly cemented by the time the other countries open their doors.

Thus, I believe the impact on Ireland when other countries open their doors will not be as bad a mentioned by some, as the large majority of them will be established and will not be too pushed to move on.

Saying that, if there is a huge economic collapse in Ireland, it's not just the foreign nationals who will be getting out.......... ;-)

Cheers,

Fresco
 
redo - I'm trading down. Looking to sell in Dublin now and in the next 6-18 months buy down the country.... Obvioulsy I can be hit by the trade up increases - If they happen.

phoenix_n - My miniumum value is well above what I paid for the property. In fact the min value I'd sell at is 64% above what I actually paid for the place (not incl stamp, legal, etc.). Also, the estate agents value is 80% above what I paid for it. So those "what I paid for it" considerations are not in the equation for me.
So to answer your question (sorry for rambling) I would not even consider selling it for what I bought it for two and a half years ago.
 
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