Current public sentiment towards the housing market?

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A worried owner in The Belfry, Citywest voices concern about falling prices but help is at hand...don't worry everything is great, coming soon is:

Luas, Swimming Pool, Gym, Green Space, Primary School, Dunnes Stores, A recycling centre, creche, Shopping Centre.

None of those things are available anywhere else - so prices in the Belfry Citywest will never fall .... phew!!!
 
JayDub said:
Another house in Mullingar dropped 25k this week

Old price €600,000


New Price €575,000
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Some people on this board seem to think that price drops outside the captial should not be factored into the equation. Sorry but this a nationwide slump. The above dropped from €600,000 to €575,000, its dropped again to €540,000. That's a 10% drop within a couple of weeks.

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Whathome could you find me a price reduction in any of the Dundrum apartments, not really sure how you do it?
 

Hmmm, who'll pay for all these wonderful new developments in infrastructure when stamp-duty and construction-related VAT takings fall? Besides, infrastructure development is less labour-intensive than house building, it involves more heavy machinery than brickies and plumbers etc.



Chicken before the egg? What if high female participation is due to extortionate housing costs? What if we use the relationship between avg industrial wage and avg house price because thats what works everywhere else and Ireland is no different! What if our average buying age is lower than Europe because people are afraid of missing the boat and/or see that they "can't lose" with property?

This is typical bull rubbish. We're not so special in Ireland that you can just throw away every historic rational measure of affordability with "new paradigm" trash-talk. Cheap credit has fuelled massive speculation, and flushing that speculation out of the system will be painful for the economy. The sooner we do it, the better imo, as its a necessary evil at this stage.
 
partisan said:
We have permenantly lower interest rates now. You are never again going to see interest rates at 20%, the old 2.5 or 3 times your salary guideline is long outdated.
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The flip side to low interest rates relative to the past is that inflation is lower.

With the ECB targeting 2% inflation this is a very different scenario to what we had in Ireland in the past. (I know inflation in Ireland is higher than 2% at the moment but this is decreasing our competitiveness).

When interest rates were high and inflation was high the mortgage repayments may have started at a high % of income like now but inflation would have meant that wages would increase and the real cost of the mortgage would decrease.

Now it takes a high % of income to service a morgage and with inflation lower the real cost of this is not reducing as quickly as before.

Inflation is the borrowers friend. We may have "permenantly" lower interest rates but also "permenantly" lower inflation. This is over looked by many people I think.
 
StoppedClock said:
Regarding Rent Rising there is an interesting article in today's (Melbourne) Age http://www.theage.com.au/news/busin...ancy-rates-fall/2006/10/17/1160850931730.html
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Rents definitely rising rapidly in Dublin City (D1, 2, 4and 6 - unsure of the rest). The number of available properties for rent has fallen by half in the past 6 months. Two beds in the city centre are now looking for 1400-1600. Very little in the 1100-1300 price range compared to last year when it was possible to negotiate rents down to that level.

In parallel with that, the number of properties available to buy has increased by 50% in the past 4 months. Seems that a lot of investment property is being dumped on the market..
 
Debtwish said:
We have seen a huge transfer of wealth from young to old. Ireland's young have been completely shafted by their selfish elders who consider they have a divine right to grab as much property as they can with their borrowed money.
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I don't agree with this. If older people have more wealth it is usually because they have worked all their adult lives.
 
dontaskme said:
I don't agree with this. If older people have more wealth it is usually because they have worked all their adult lives.
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That might normally be true but if you are earning 30k a year and your house has increased in value by 300,000 in the past 5 years you haven't really 'earned' the extra money in any traditional sense. Essentially it's a transfer of borrowed wealth from young to old
 
dontaskme said:
I don't agree with this. If older people have more wealth it is usually because they have worked all their adult lives.
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And not because they bought their houses prior to a period of massive inflation? I know many many older friends and family members who 5 years ago worried about their retirement because even though they had worked all their lives they had not really accumulated much wealth beyond PPR and some €200 a week pension. Now they have sold up, moved to to the continent with pension and massive lump sum of capital funded entirely by selling their house. Somebody has to work hard to pay for this but it isn't them.
 

Bingo

Irish house prices up 270% since 1996

http://www.finfacts.com/irelandbusinessnews/publish/article_10006275.shtml

http://www.unison.ie/irish_independent/stories.php3?ca=9&si=1574591&issue_id=13766
 

That's odd, because I'm bear. House prices are overvalued, they are falling right now.

I did say that our permenant change to a low interest rate environment and our own current economic circumstances lends itself to high prices. You can rail against the economic realities of our society all you like - our labour participation rates & the fact that higher earners buy houses and thus set the prices. Ireland has changed, the yard sticks of 20 or 30 years ago don't apply. We are a high wage, wealthy economy now. Look at the economic histories of long established high wage economies like London, New York or San Francisco for guidance instead of pre Celtic-tiger Ireland.
What if prices were half what they are today, with our current economy? You'd snap them up, because they'd be bargains. You'd make a killing from renting them. A solo buyer could snap up a luxury trophy house in a good location. Except that - there'd be intense competition for those houses and the price would rise again very quickly.
People saw the money being made by others in property and piled into it. (The market became efficient, eroding profits to zero). The market overshot (investors subsidising renters) and it is correcting now. But if you think that our economy warrants low house prices you're living in a dream world. The only way to sustain low house prices is to trash our economy. Is that what you want???

Incidentally, as regards the much maligned term "new paradigm". My understanding of this was that increased computerisation has led to a higher sustainable level of economic growth. This was misapplied to the general economy at the peak of the dot.com boom. When the nasdaq crashed and the crazy VC funds for online pet retailers dried up the term declined in popularity. But my understanding is that heavily computerised industries _have_ seen such a sustainable increase in productivity growth. New environment, new effect. What it doesn't warrant is a P/E of 60 for an online pet food retailer - that was irrational exuburance. But what if you were an early stage investor in Google?
 
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For the umpteenth time, it's WAGE inflation that's the borrowers friend not PRICE inflation.
 
With all those price drops its becoming obvious that the "current vendors sentiment" is sell, sell, sell.
 

You make some good points,fair play to you.There's been some good debate today !.
Conor_mc has addressed all the issue i think so i won't repeat what he said.

With regard to interest rates,there is a case that when we went with the ECB and rates dropped houses were undervalued an thus increased in value.I would agree with this in the 1996-2001 period.After this AFAIC there is no justification whatsoever for the 2001-2006 increases only a bubble pure and simple !.
 
partisan said:
What if prices were half what they are today, with our current economy? You'd snap them up, because they'd be bargains. You'd make a killing from renting them.
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Even if prices were to halve, you'd still only receive around a 5% gross yield. Doesn't sound like a killing to me.
 

But I don't begrudge them because they have worked all their lives and like you say, even a few years ago they did not have much and I think if they have lucked out now, fair play to them.

Young people mostly don't have any wealth to transfer anyway, the transfer is of their future earnings as facilitated by credit.

And sure is not youth itself wealth enough?
 
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