Current public sentiment towards the housing market?

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Debtwish said:
Let not get too excited.

200k ok. But by next year? Sorry, illiquid markets like property don't fall that fast. We will slide down a steady slope of hope that may drag on for years not months.
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Most markets have non national / local investors who will purchase at various points in the cycle.

I see UK press for UK from time to time and in past 4 years have never seen a Irish development marketed. Is anyone aware of any significant purchasers of irish property for investment purposes by non irish (excluding east europeans here for jobs) in say past 3 years ?

Any "UK investor" property blocks in Dublin, any "Russian investor" property blocks ?
 
badabing said:
My prediction is 3-5 years of stagnation followed by a few more years of modest increases before the next bull market probably 8-10 years away
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The crucifixion of the property bulls is going to be the most fascinating sights of my entire investing career.

Well, I suppose, after seeing Nortel go from $120 to $1.50 on Nasdaq Bubble TV.
 
walk2dewater said:
The crucifixion of the property bulls is going to be the most fascinating sights of my entire investing career.

Well, I suppose, after seeing Nortel go from $120 to $1.50 on Nasdaq Bubble TV.
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Would gladly welcome some rationality myself....just don't think its going to happen
And my logic is; 5 years of 'real' inflation of 5-6% will bring current prices to a sustainable level
 
Debtwish said:
Let not get too excited.

200k ok. But by next year? Sorry, illiquid markets like property don't fall that fast. We will slide down a steady slope of hope that may drag on for years not months.
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Dont overestimate the size of the bubble. 200K for a flat in Finglas still seems expensive to me. But illiquid markets do fall that fast. Its just that its take longer for to be sold.
 
Miles said:
Eddie Hobbs is right, there are people out there willing a destruction to the property market!
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Are you implying I am willing financial destruction on people? I take offence to that. I have had no part in the Irish bubble.
 
Everyone knows stated inflation figures are nonsense, real inflation is well above 5%...som my thinking is it won't take long for stagnant prices to correct the housing market
 
badabing said:
Everyone knows stated inflation figures are nonsense, real inflation is well above 5%...som my thinking is it won't take long for stagnant prices to correct the housing market
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Wage inflation is more important than general price inflation here. Do you think that wage inflation will be above 5% year on year for the next few years?

Edit: You don't need to answer that. It's a trick question. Because if you do think wage inflation will be 5% yoy, then we're going to be uncompetitive internationally. If you don't think this will happen then current house prices will never be sustainable without a correction. Damn'd if you do, damn'd if you don't!
 
Miles said:
Eddie Hobbs is right, there are people out there willing a destruction to the property market!
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Trust me it wont be all that bad. And it will have the beneficial effect of taking greed out of Irish culture for a half a decade or so.
 
badabing said:
Would gladly welcome some rationality myself....just don't think its going to happen
And my logic is; 5 years of 'real' inflation of 5-6% will bring current prices to a sustainable level
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I'm glad that we have more bullish sentiment on this thread. Would anyone care to provide a potted synopsis of how they see things panning our from a bullish prospective, addressing these topics.


1. Global economy.(specificaly US situation)

2. Inflation/deflation, interest rates.

3. Irish economy

4. Irish housing market in relation to the above factors
 
Afuera said:
Wage inflation is more important than general price inflation here. Do you think that wage inflation will be above 5% year on year for the next few years?

Edit: You don't need to answer that. It's a trick question. Because if you do think wage inflation will be 5% yoy, then we're going to be uncompetitive internationally. If you don't think this will happen then house prices will never be sustainable without a correction.
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I think this needs to be put in even stronger terms wage infaltion is all that matters, if real inflation runs ahead of wage inflation then this will decrease affordability (increase unaffordability morelike) and increase liklihood of crash
 
Miles said:
Eddie Hobbs is right, there are people out there willing a destruction to the property market!
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We didn't want the market to grow so fast because we could see the inherent long term risks. It's peevish to suggest that people who want a rational property market are nasty people who just want a crash. The problem is property values in this country have become so irrational curtesy of massively unwise exuberence means that we have reached a point where a correction is going to be pretty noticeable. The longer we go without a correction, the greater the crash is going to be.

For myself, I would prefer that we were not in this situation. I would have preferred that the market continued to slow post-2001 before the interest rate wheeze that injected a load of cheap debt into the country. My massive big fear now is what the wider ramifications will be for the rest of the economy.

We've been looking for a correction on the grounds that the sooner it came, the fewer the knock effects would be. Now, I'd venture to say that all bets are off.
 
badabing said:
My prediction is 3-5 years of stagnation followed by a few more years of modest increases before the next bull market probably 8-10 years away
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I actually think the reverse - a stagnating property market for the next 5-10 years (perhaps longer)... and I don't know if we'll ever see another bull market, certainly nothing like the one we've seen for the last 10 years.
 
StoppedClock said:
I think this needs to be put in even stronger terms wage infaltion is all that matters, if real inflation runs ahead of wage inflation then this will decrease affordability (increase unaffordability morelike) and increase liklihood of crash
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Salaries aren't the only forms of income ;-)

Although there is a lag, salary growth has tended to out pace inflation over the long term. If you've got solid evidence this is about to change fair enough, but even if it did, in all likelihood wage inflation would increase to some degree with actual inflation. Increased inflation would reduce the value in real terms of outstanding loans, making debt repayment easier for existing home owners. If house price inflation was static while real inflation was rampant (and wage inflation slightly less so) this would still increase the affordability of new homes for ftbs.
 
The thing I don't get is this - how can you have a speculative bubble followed by a soft landing? To believe in a soft landing is to pretty much deny that speculation has been a contributor to house price increases because a soft landing can only occur when supply meets natural demand (i.e. demand minus speculative element).

But the thing is that the speculative element disappears overnight. No house price rises, no speculation. So how do you manage supply/demand equilibrium when an unquantifiable element of demand could disappear on a whim?

Seriously, do any of the bulls out there really believe that speculation hasn't been a factor up until today?

And what do they see as fair value for a house these days... take any house. Was it undervalued last spring? Is it still undervalued today if it goes up another €30k in the next 3 months? Is this the fundamentally balanced house price level right now, or was a few months back, or a few months hence? Will Dublin house price never drop back, ever, even if a €450k house was €360k only 9 or 10 months ago?

Or do house prices just always go up?
 
badabing said:
Would gladly welcome some rationality myself....just don't think its going to happen
And my logic is; 5 years of 'real' inflation of 5-6% will bring current prices to a sustainable level
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... but doesn't that assume wage levels keep pace with real inflation.
 
Afuera said:
Wage inflation is more important than general price inflation here. Do you think that wage inflation will be above 5% year on year for the next few years?

Edit: You don't need to answer that. It's a trick question. Because if you do think wage inflation will be 5% yoy, then we're going to be uncompetitive internationally. If you don't think this will happen then current house prices will never be sustainable without a correction. Damn'd if you do, damn'd if you don't!
Click to expand...


I suppose the Irish could never imagine an era of wage deflation. Americans don't have to imagine. http://www.dol.gov/ Go to average hourly earnings table B historic data
 
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Calina said:
We've been looking for a correction on the grounds that the sooner it came, the fewer the knock effects would be. Now, I'd venture to say that all bets are off.
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Agreed, it could be argued on another hand that the bubble has been bad for society and unpatriotic as it's long term making the country uncompetitive, and generating unrealistic expectations of living standards.

As far as bullish sentiment goes if increases in rates are trigerred by inflation then the following should temper some of the concerns on rates into 2007, which in turn will maintain some affordability for ftbs.(assuming 35/40 year terms etc etc)
Sharp dip in euro inflation confirmed

http://www.rte.ie/business/2006/1017/eurozone.html
 
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