Current public sentiment towards the housing market?

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Lots of spin from the vested interests in some of the articles including in one above.
Can't sleep these days.:(

Love this line

For €381,000 ‘‘you could be looking at a slightly larger townhouse, in somewhere like Cabra, or a two-up two-down around Arbour Hill’’, Chambers added
‘‘There is a good affordability in the market,” he said. ‘‘It’s not that people can’t buy property in the price bracket they have to spend; it’s more a question of: is it in the area that they want to buy the property?



Townhouses in Cabra! more like small ex council houses in rough area!
 
This article is bang on for the first third after that its an appalling hogwash of vested interest propoganda, with all the usual suspects,

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Careful, it’s your first time

22 October 2006 By Laura Noonan
Until quite recently, the white smoke emanating from Ireland’s property market was of the easy to read variety. Prices were soaring to highs that induced bouts of dizziness in even the most levelheaded of homeowners, and the masses clamoured to pour their money into Ireland’s best performing asset.

My favourites

To buy or not to buy?

Shane Brady, director of Gunne New Homes, said there was never a bad time to buy property.

‘‘Going back to 2001 and that period post 9/11 and people were getting messages from the market place say ‘oh don’t buy the market is going to fall through the floor’ and all this sort of carry-on. Not alone were those statements unfounded, but they were coming from people who didn’t have a knowledge of the marketplace. The market in 2002 took off like a rocket again.”

Oh yea such death defying logic, let us dispense with most of history and leave our 2001-2006 blinkers on children, you can burn the rest of the pages of your History books now!

This one had me rolling around :D

Ah then there is Austin, Austin Austin Austin,

Austin Hughes, chief economist at IIB Bank, agreed that a mass return to the market was a very real possibility. ‘‘There’s no doubt that you’re going to have a number of people staying out of the market at the moment,” he said. ‘‘Because they see that interest rates are rising, they’ve been told by some commentators that the sky is falling, there is this uncertainty about whether there will be capital gains tax on investors, there is uncertainty about stamp duty, and there is more supply.

Its very interesting to see the "experts" who just happen to be the one in the firing line if it all goe poo, recommend what is a bad value buy in anyones book. Talk about trying to stoke up the fire.

I think this article was very irresponsible to its readers and lacked a real objectivity. It started off well but then dived into a mish-mash of proporganda, historical amnesia & wishful thinking at best.

Finally, you just can't take this guy seriously anymore,

‘‘What may happen is that prices of individual properties will fall while prices generally will rise,” said Hughes.

Somethings will go up something will go down (like your credibility Austin...)

‘‘The falls will be in trophy houses. If you are talking about a unique house somewhere in a desirable suburb, it is very difficult to know whether the underlying value of that is X million or Y million. It all depends on whether three or four people are going for it.

Oh no not the rich, how could it be!?!? the PDs won't stand for this!

‘‘To the extent that we see more of these properties becoming available, people are standing back a little bit and not panicking to get into the market, so those prices are most vulnerable. That creates a perception that the market is softening.”

However, Hughes said the fundamentals of the property market remained strong. ‘‘Once you take out the regular bad news on interest rates, put in the SSIAs and hopefully a supportive move in the budget, that would give sustained property price appreciation,” said Hughes.

Translation: Ignore interest rates & reality in general, believe the *SSIA hype, expect a "Promised Land" Budget and in a few months you'll have a nicely over cooked property market that no one can stomach anymore!

*Is the maturing of the SSIA mantra a exmaple of a pre-emptive exucse? Is it a dead duck, since most may have borrowed on teh strenght of it?

‘‘The property market reflects very solid economic fundamentals and there is a sense that prices will rise, not at a spectacular rate but at a solid rate.”

I SENSE a distrubance in the force and it smells very bad indeed

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I don't think most of the bears on here are saying "never buy under any circumstances" - I'm certainly not. Yes, one of the benefits of buying is you own the place in old age - no question. I think most are saying "it's very expensive now and likely to soften/correct/crash [depending on how bearish you are] in the coming years." Renting (for now) has the advantage of helping you save cash each month, putting you in a better position as a buyer for the new market now emerging. A highly leveraged owner/occupier is - by comparison - stuck.

Well, when I started reading this thread (seems like ages ago) a lot of people were saying we should adopt the lifestyles of other European countries and rent for life. I agree that renting for now would allow some people to save more in order to buy later. They'd have to be disciplined though and for a long period of time. Do you really think that FTBs will be able to take advantage of falling prices? I believe investors will step back in if prices hit bottom, they'll have the disposable income to snap up bargains while FTBs will still be saddled with higher interest rates and the prospect of banks willing to lend less. This certainly was the case when the crash happened in London.

Neffa said:
And yes, when you bought property 30+ years ago, it was always a stretch. Difference was that inflation helped make that burden ease pretty quickly for many. That's not the case now and given our membership of the euro, very unlikely to be the case in the foreseeable future.

This wasn't the case, in fact the opposite. In the 70s and 80s interest rates were triple what they are now!:eek: People were paying their mortgage but felt like they were running just to stand still. It's really only in the last 6 years that property here became unbearably expensive and those of us who ploughed through the years of high interest began to reap the reward. Of course not everybody has taken advantage by selling or re-mortgaged to buy investment properties.
 
One typical home in 'risky' Clonsilla
Original asking price 430k
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Latest offer 450k and rising...

jaysis you'd think after 5 days of having a bid that high and still rising that the property would be gone from myhome by now
 
Had an interesting conversation last night (in France with French people) discussing property (they're not usually as bothered as the Irish to follow property like a football team). One person is trying to buy but was priced out of the market by an English couple, he was a bit angry as he knows the English can borrow much more than him. He thought the price was ridiculous for a 2 storey 4 bedroom farmhouse on 12 hectares (135K euro), the general sentiment of the others was that that's too high a price to pay for a house. And 25 year term is much too long.

Bear in mind that this is in a rural area where prices have been rising too for the past 5 or 10 years, and "they" say a crash is on the way....

I think the Irish, even the sensible, pragmatic ones, have lost the sense of normality. Even the 2001 pricesi in Irl are high enough by French standards (outside Paris and côte d'azur). My feeling, along with most on this thread, is that a crash will happen, and that it will be severe.
 
FTBs will still be saddled with higher interest rates and the prospect of banks willing to lend less. This certainly was the case when the crash happened in London.

This was absolutely NOT the case in London. I was living in the UK at the time (1994). Many FTB's remained on the sidelines of the market from fear rather than lack of affordability, it was investors that stepped in and put a floor on the crash when yields became attractive. Any FTB who waited and bought in 1994 rather than 1990 ended up with a smaller mortgage and saved themselves from the nightmare of negative equity. It's true that borrowing power drops as interest rates increase but when prices fall - people don't need to borrow as much anyway. So an FTB who waits will benefit through buying the same class of home but with a smaller mortgage! They would be even better off if they save and invest(non-property) in the meantime, their net worth is increasing while the price of their targeted asset is falling. Through saving and investing(non-property) during the crash, they would leapfrog into a better house than they could afford currently, while the unfortunates that buy close to the peak of the price bubble are locked into higher mortgages and possible negative equity.
 
Realistically, how much should a bank lend a couple earning €60k/year. The old lending rule 2.5 times first wage, 1.5 times second wage was chucked out the window years ago. If it was still in place the a couple on average industrial wage could not borrow more than €120k. Even if the bank would lend 4 times combined wages that would still be only €240k, considering the average house price in Dublin is over €400k. Plain and simple most are priced out of the property market.

The following link from Bearbullish answers my question.

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"A couple on the average industrial wage will need to raise as much as €163,000 on top of their mortgage to buy a house in Dublin, according to a survey by The Sunday Business Post.

The newspaper asked the country’s main banks how much they would lend to two first-time buyers who earned €30,500 each. National Irish Bank (NIB) offered the couple the least amount – €250,000.

Based on the average Dublin house price as it stands (€413,000), the couple would need to raise €163,000 to buy a house."

So basically if the above couple could save 50% of their wages each year, it would take them 5 years to come up with the deposit. 25% of their savings would take them 10 years. Don't forget real estate agents and mortgage lenders predict prices to continue rising.
 
Of course estate agents and mortgage lenders say prices will rise - it is their role to 'talk up' the property market so they effect transfer from sellers to buyers. If they don't (or if they do and their efforts are ineffective) their income disappears overnight! From a number of recent posts here it looks as if prices in some sectors are indeed continuing to rise!

However the wild-card in the pack is 'public sentiment'. It has been well-argued here that irrational emotion rather than real need and real common-sense has been the 'driver' of the extraordinary increase in property prices since 2001 and if/when/now that the wild-card is removed the 'driver' is removed and the irrational expectations of profit without productivity will now surface for what they are.
 
What happens to all the section 23 homes that have failed to sell. Section 23 homes have inflated prices, after December 06 they will be even harder to sell so the price of such properties should decrease greatly. There will be a glut of unsold houses in counties like Longford, Leitrim, Roscommon. I cannot see any huge increase in construction in these areas. What I can see is layoffs in the construction sector in this area, immigrant construction workers vacating rented accommodation which will lead to more properties going on the market. The next six months should be a real indicitor where this market is heading.
 
I wonder will access to the internet and rapid exchange of information make a property crash happen much quicker than in previous era's??? In past estate agents could hide things from general public and it took months for info to get around market as a whole. If potential buyers in Dublin check on internet and see prices falling in another part or Dublin will they be scared off even if they see prices not falling in their desired area's?

I think a crash in property can happen much more rapidly than the uk crash due to this rapid access to information from all over the country/market.
 
I think a crash in property can happen much more rapidly than the uk crash due to this rapid access to information from all over the country/market.


Hi all, back again! (And I still think we're headed for a soft landing)

In fact, I think the SPB articles made some v.good points, and 12% rises in 2006, with 2-5% rise in 2007 sounds about right to me.

I found the 'Careful, Its your first time' article gave some excellent reasons for the recent fall-off, the resultant effects on the market, and how these things will effect the future market.

‘‘I think if you see a house that you can afford and that suits your requirements you should go for it now. I don’t believe it’s going to get any cheaper.”



p.s. this comment above relating to the UK market crash seems a little harsh. Two things crashed the UK market, neither of which we have here:
1. 120% mortgages were commonplace in a unregulated market
2. Interest rates were 15%!

Yet the British public bought property like you've never seen before. 'You can't lose with property'.

Here in IRL we get a rate increase of 1.25%, and look at the effect its had on everyones perception of the market.

Theres absolutely no comparison.
 
1. 120% mortgages were commonplace in a unregulated market
2. Interest rates were 15%!
Here in IRL we get a rate increase of 1.25%, and look at the effect its had on everyones perception of the market.

It's the relative increase that's important.
In the UK, rates jumped from a very short term low of 8% to a high of 15% between 1988 and 1990, an increase of 87%. Interestingly, Irish rates only have to go to 3.75% for the same level of increase to apply.

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Even though UK interest rates came down between 1991 and 1994, property prices kept falling. Once a crash gains momentum, falling interest rates will not stop it.

Also - As Neffa pointed out previously about the pre-crash UK market, 120% mortgages were certainly not readily available to everyday punters. 100% mortgages were but IO and other "exotic" forms of financing were not commonplace.
 
It's the relative increase that's important.
In the UK, rates jumped from a very short term low of 8% to a high of 15% between 1988 and 1990, an increase of 87%. Interestingly, Irish rates only have to go to 3.75% for the same level of increase to apply.

This is just drawing comparisons between percentages increases, and not effects. 3.75% is an unbelievably low interest rate, and barely on a par with inflation. The cost of money is still cheap. Its still very attractive.

The examples that the SBP give relating to falling prices, are all in the million, or muiti-million range.

As I posted here a few months ago, (before being hunted by the "The Sky is Falling, Don't disagree" brigade), the average first-time buyer house (say, a 3-bed semi), is holding firm, or increasing, and is certainly not decreasing.
 
What is a believable interest rate? Look at the damage jumping here has done. What will happen if rates jump to your believable rate.


http://irishhousepricesfalling.blogspot.com/ (poll added)

a believable interest rate?

btw, relating to that new blog, spawned from this thread, how many cached myhome.ie house price INCREASES could we find, going back through the past 6 months, in response to this list of decreases? Many multiples I guess
 
This is just drawing comparisons between percentages increases, and not effects. 3.75% is an unbelievably low interest rate, and barely on a par with inflation. The cost of money is still cheap. Its still very attractive.

The examples that the SBP give relating to falling prices, are all in the million, or muiti-million range.

As I posted here a few months ago, (before being hunted by the "The Sky is Falling, Don't disagree" brigade), the average first-time buyer house (say, a 3-bed semi), is holding firm, or increasing, and is certainly not decreasing.

I understand what you're saying in defense of the market but would you not agree that the price rises of recent years have been driven by too many people chasing too few properties? If so, do you think that the record amount of property on the second-hand market coupled with the record number of new properties on the market will have any effect on prices.

An increase in inventory coupled with a reluctance on the part of buyers to leap into a market that the media tells them is ripe for a fall = potential for a fall in prices (although nothing is certain of course)
 
a believable interest rate?

btw, relating to that new blog, spawned from this thread, how many cached myhome.ie house price INCREASES could we find, going back through the past 6 months, in response to this list of decreases? Many multiples I guess

If you find them, post them. I'm still not convinced wither way. That said, even the EA are admitting that prices overall haven't increased for nearly 6 months and given their historical exaggeration of price rises, this represents a sea change.
 
I understand what you're saying in defense of the market but would you not agree that the price rises of recent years have been driven by too many people chasing too few properties? If so, do you think that the record amount of property on the second-hand market coupled with the record number of new properties on the market will have any effect on prices.

An increase in inventory coupled with a reluctance on the part of buyers to leap into a market that the media tells them is ripe for a fall = potential for a fall in prices (although nothing is certain of course)


Hi Gearoid, its a good point, the prices rises in any market are always driven by supply v demand. No surprise there. However, there is still a very healthy demand in the market.

The large increase of Investors exiting the market is, in part, offset by the decrease in the number of new house builds granted permission for Q4-2006 an 2007 (I think its dropped 25%. It's listed on this thread somewhere from a few weeks back).

Also, while theres certainly a glut of property on the market, it really depends on how much of a rush they are to exit the market. If I had made 200% on my property, and, feeling it was at the top of the market, put it up for sale, and immediately cut 10% of the price in order to secure a sale, I'd do it in a heartbeat. Most however, will be happy to sit tight.

The people with larger mortgages, and in particular Interest Only mortgages will be in the most trouble, and in the biggest rush to sell.

I'm definietly not trying to stiffle the opinions here; its been a fasinating thread :) just trying to provide some balance every now and again.
 
Main Street, Swords,
North Co. Dublin Retail Unit For Sale

Sale Price: €65,000

Floor Area: 1,000 sq. feet (93 sq. metres)

Yeah - the title does say that (misleading), but the body of the ad states they're selling the business not the property - otherwise it would be a bargain...

----->

ESTATE AGENCY BUSINESS PLUS LICENCE FOR SALE

Once off start up opportunity for a discerning purchaser to obtain an active Estate Agency business located in the busy thriving sought after area of Swords. This lucrative business is on Main Street area with excellent footfall. It comes with office furniture,window display & fully operational Auctioneers Licence.

Would suit Auctioneer, start up Auctioneers or Investor alike.
 
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