The UK economy is a basket case, Ireland although suffering from the same disease is not running deficits with a rickety currency. Their housing vacancy rate is 3% ours is 15%. They have rising unemployment a hideous consumer debt bubble, the second lowest savings rate in the EU (after Slovenia) and are in the process of loosing two wars at once. If you want to compare Ireland to a European country why not Germany?
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The UK economy is a basket case, Ireland although suffering from the same disease is not running deficits with a rickety currency. Their housing vacancy rate is 3% ours is 15%. They have rising unemployment a hideous consumer debt bubble, the second lowest savings rate in the EU (after Slovenia) and are in the process of loosing two wars at once. If you want to compare Ireland to a European country why not Germany?
Speaking of Bertie, will he be on the airwaves telling us to buy and not hold off on a purchase to prevent the bubble (and economy) from bursting........
She was Marian Finnegan from Sherry Fitzgerald - selling houses.
And Austin Hughes is from IIB bank - selling mortgages.
If it's a done deal on the new place then you're right not to worry about what happens to the the property market in the meantime as long as you can pay the mortgage. Best of luck with the move.
I never said that I was comparing Ireland to the UK. I was just saying that a lot of people here say that there is no such thing as a soft landing - that it cannot happen when prices rise so much. Despite all the predictions to the contrary, it seems to be happening in the UK.
I know they are vested interests but I think I can separate the arguments from those articulating them! However, I'm very much a layperson when it comes to the economics of the situation so maybe they've managed to pull the wool over my eyes
It's a done deal but coming from the "as long as I have a roof over my head" school of money I honestly don't care
Spent this evening happily looking at the furniture sections of the dept. stores in town actually! (realise am now beginning to sound completely green) Ta for the good wishes.
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Marian Finnegan (who is probably following this thread and is very hot
) has the all credentials of a weather forcaster.
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Neffa
Guest
The UK in many areas has a genuine supply constraint and this is probably helping to hold prices together in the face of some weakening economic news. Also the London market is very dependent on the City & financial bonuses and they are forecast to be very strong again this year.
I agree it looks like it is having a soft landing but with the BoE likely to increase rates again before year-end it may be too soon to call it just yet.
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miju
Guest
strong economy - on the face of it yes , look a bit deeper and the economy is rotting to the core
popes children lining to buy - well actually there're not hence the many, many examples of asking prices being dropped on this thread
immgration levels - the majority of these immigrants are working in low paid jobs which means they contribute very little to the government in terms of tax takes and to the general economy if recent reports mentioning that immgrants are sending millions home each year are anything to go by
yeah we could get that soft landing just like the UK if of course we controlled our interest rates
unfortunately i think this is gonna be a long hard fall for the irish property market
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Debtwish
Guest
Exactly. One of those two telling us not to buy a house would be like the chairman of Ford telling us to give up our cars and take public transport.
I don't blame them for this, they are just doing their job. But I do blame RTE, Newstalk and others for assuming that the average punter is too stupid to understand the connection.
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sunrock
Guest
i agree with the above
for ireland to have a supply constraint like the uk we would be building no more than 15k houses per year
also the south east and especially the london area has city bonuses_more than 100000 people who can afford high house prices
also a lot of very rich people choose to reside there for example rich russians and other rich exiles
a better comparison would be with be with edinburgh or cardiff
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blindjustice
Guest
Ive got a bad feeling ..............
bearishbull
Registered User
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The Uk market appears in a soft landing or even low/medium single digit level growth mode, but it doesnt mean it won't crash in next few years. Debt and affordability levels are squeezing many ftb's out and more interest rate rises are on the way. Yields are still much better than Ireland and there is an actual shortage of houses/land/new house builds over there. There are also significant tax differences which make property very attractive. The Uk economy is also so much more diversified and world class than Irelands, London is a world centre for everything from finance to art to engineering etc. There should be a significant premium to buy property in london compared to dublin but this doesnt appear to be the case.
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Fredser
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Expand please :
1) Bad pint?
2) Bad battered sausage?
3) Current sentiment ....... ?
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partisan
Guest
If house prices were at value (I think they are currently overvalued by at least 15% but probably (hopefully!) not much more than 25%) - 7% would sound reasonable. The economy is growing at over 5% (this year), GNP growth is outpacing GDP growth for the first time in a very long time. That means there should be around 5% more wealth in the local economony, add in inflation (decrease in the real value of money), forget about current sentiment and price levels and 7% seems possible!
The other way of looking at it - if house prices remain static (or fall) it's equivalent to a 7% increase in affordability for the local economy at large ( with full employment at least some of that wealth increase should make it's way to the workers in the form of pay rises)..
Also are those affordability figures from 20 years ago also for First Time Buyers? Otherwise you are comparing apples with oranges. Afforability is significantly better for non ftbs than that at the moment. That recent risk report from Deutsche Bank stated that affordability had improved in Ireland since 1990, and was better than the average for all the years in between.
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partisan
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Not sure I agree with that. We are over exposed to the construction sector. At the same time Multi National investment here has made us the most productive workers in Europe. Even as costs have risen, it hasn't stopped them coming (Google, Amazon etc, etc). There also seems to be some uptake in local entrepreneurial activity. A surprisingly large proportion of people I know are starting companies at the at the moment. The business parks round Dublin are booming, and people seem to have no problem finding jobs.
strong economy - on the face of it yes , look a bit deeper and the economy is rotting to the core
popes children lining to buy - well actually there're not hence the many, many examples of asking prices being dropped on this thread
immgration levels - the majority of these immigrants are working in low paid jobs which means they contribute very little to the government in terms of tax takes and to the general economy if recent reports mentioning that immgrants are sending millions home each year are anything to go by
yeah we could get that soft landing just like the UK if of course we controlled our interest rates
unfortunately i think this is gonna be a long hard fall for the irish property market
strong economy - I would simply row in behind partisan's comments.
pope's children - my mistake to say they are lining up at present. But the fact remains that there are more 26 year olds in the country than any other particular age group and they are going to want to buy in the next few years.
immigrants - I seem to recall hearing an estate agent saying on some show recently that 10% of new buyers are immigrants. But maybe I'm being taken in by the VIs again
interest rates - that's your strongest point (and it's a v. strong one) and it's perfectly clear that it's the reason why the horses have been shying as of early summer. And even if they weren't shying, the banks would be (reluctantly!) reining them in, to continue the analogy. But I think most commentators expect a levelling off of interest rates next year. So I agree that prices can't continue to rise at the same rate as the early part of 2006, but a levelling off of interest rates (big presumption I know before someone jumps down my neck) combined with the factors referred to above makes for a soft landing IMHO, which is why I allowed myself to be seduced by the VIs on Prime Time
In the full knowledge that I am no expert, I now await a savaging by the grizzly bears on this thread As someone who is kind of new to this, I am intrigued by the terminology...not the obvious bull, bear stuff but rather the "head and shoulders" model and ...my personal favourite... the dead cat bounce! Buy that man a pint!
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miju
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why would the have to buy in the next few years? yes they need to live somehwere but they DONT need to buy a home, example i'm 24 with missus and kid and i sure as hell wont be buying in the next few years as we're in a nice apt inside the M50 belt , close to every single amenity and paying a fraction on rent compared to what the mortgage would cost for same property (as an aside i know from conversation with landlord that amount he paid for apt compared with how much i pay rent isn't covering his mortgage)
immigrants - I seem to recall hearing an estate agent saying on some show recently that 10% of new buyers are immigrants. But maybe I'm being taken in by the VIs again
i think you may have been it was actually 10% of the total of FTB's are foreign nationals and given that FTB are approx 35% of the current buyers in the property market (and shrinking by current reports) that 10% really gets put in perspective as an absolute miniscule amount in the grand scheme of both house sales and general immigration numbers ... so again the fundementals dont add us
IF , they level off it still doesn't make a difference to the fact that each .25% increase in the rate has knocked a massive amount of the maximum mortgage a couple on the average €30,000 per year average industrial wage will get
over exposed to not only direct employment to construction sectore but also indirect employment as well also the multi national investment has ben discussed briefly before and so i wont really get into that again. we're losing buckets upon buckets of manufacturing jobs that are being "replaced" with low paid service jobs, entrpreneuril activity is all well and good but wont really matter significantly in the grand scheme of things IMHO and besides given enterprise irelands DISGRACEFULY dismal effort in encouraging indiginous business what makes you think they'll be any better in an economic slowdown scenario?
You are correct, but do you what happened to the Irish birth rate after 1980? It literally fell off a cliff and continued all the way down until 1994. Demographics start to work against the Irish property market within the next year or so. Peak birth rate was nearly 74064 in 1980 and then the slide starts all the way down to 48,255 in 1994. So the very thing that all the VI's have been blowing on about for the past few years starts to kill the market. The very time that the market will need support from demographics, the rug is pulled from under it.
The birth rate had dropped to about 52,000 in 1989 so that means that the number of Irish first time buyers entering the market each year will drop by 30% over the next 10 years.
Irish Birth Rate - Source (Council of Europe: [broken link removed])
1970 64382
1971 67551
1972 68527
1973 68713
1974 68907
1975 67178
1976 67718
1977 68892
1978 70299
1979 72539
1980 74064 Peak
1981 72158
1982 70843
1983 67117
1984 64062
1985 62388
1986 61620
1987 58433
1988 54600
1989 52018
1990 53044
1991 52718
1992 51089
1993 49304
1994 48255
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StoppedClock
Guest
I just find the bull arguments articulated by the young female interviewee and A. Hughes quite sound - strong economy, pope's children lining up to buy, strong immigration levels - reasonably convincing when sounded off against the bearish line adopted by R. Curran. I suppose I find the soft landing argument more plausible than the property crash line but of course I could be wrong
Any chance you might articulate these in my The Elusive Soft Landingthread which asks for credible arguments to support the soft landing theory? So far I have had 77 views and not one response!!
On a different note just heard Jim Power on Newstlalk, I actually had to look at the dial to verify that it really was he and I was indeed at 106 so shocked was I by his (I won't go as far as to say bearish) realistic comments. He corrected himself from saying "if there is a slowdown" to "when there is a slowdown" and admitted that it looked highly unlikely that there would be any changes to stamp duty, anyway the masses listening to it will certainly be aware soething is afoot.
I wonder if the "Economist for Hire" brigade Hughes, McGlaughlin, Power, et al drew straws to see which patsy would hold the line while the others switched tack to salvage some of their reputation, Hughes drew the short straw.
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