Current public sentiment towards the housing market?

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paddyd said:
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
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The point is that house prices are falling. The media are sniffing around: http://www.unison.ie/breakingnews/index.php3?ca=9&si=100225

We'll see more stories like this. Sentiment will turn on the market and bare it's teeth.
 
gearoidmm said:
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)
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True, but the size of the fall would be limited by the fact vendors won't sell for less than they paid (probably including fees). Unless the economy crashes - they have abolutely no reason to. Also the rental market is bouyant. If investors decide it is time to sell at the top of the market - rents and thus yields might actually rise! That said, a swift fall of around 10% and reduced capital appreciation over the next few years would bring the values back to more realistic levels...
 
partisan said:
True, but the size of the fall would be limited by the fact vendors won't sell for less than they paid (probably including fees). Unless the economy crashes - they have abolutely no reason to. Also the rental market is bouyant. If investors decide it is time to sell at the top of the market - rents and thus yields might actually rise! That said, a swift fall of around 10% and reduced capital appreciation over the next few years would bring the values back to more realistic levels...
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Sensible investors sell when a market peaks and move their money to a stable asset preferably coming out of a trough.


http://irishhousepricesfalling.blogspot.com/
 
partisan said:
True, but the size of the fall would be limited by the fact vendors won't sell for less than they paid (probably including fees).
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I bought a house in 1998 for £125,000, that property is now worth more than €600,000. That's quite a fall before your mistaken limit kicks in!
 
whathome said:
I bought a house in 1998 for £125,000, that property is now worth more than €600,000. That's quite a fall before your mistaken limit kicks in!
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I'm not suggesting that there is support at 10%, but why would anyone who has bought or remortgaged since 1998 (including people who bought in the 1990s and have traded up) sell at such a low price? Given the current economic situation, they simply wouldn't have to.

The spec's on homes have markedly increased in recent years - I'm looking at houses right now (so a big fall would be very welcome in some ways) - if prices were to fall to as low as you can afford to sell at, my choice would be limited to a small number of modern houses built in the mid-nineties and a plethora of older ones. I'm pretty sure competition for the new units would drive prices up very fast...

P.S. if you really believe the market is about to crash PM me and I'll take that liability of yer hands for €300,000...
 
whathome said:
I bought a house in 1998 for £125,000, that property is now worth more than €600,000. That's quite a fall before your mistaken limit kicks in!
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This is exactly my point. A lot of investors can afford to sit tight. There is a great deal of property on the market; but surely only those in a panic to sell are reducing prices.
 
2nz said:
The point is that house prices are falling.
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time to wheel out that Garrett Fitzgerald classic quote:

"What we are seeing is a deceleration in the rate of acceleration"

real house prices are not falling. at worst what we are seeing is the fat being trimmed, on some high-end houses. Is there anyone here who doesn't think that the AMV minus 10% would be a good price for their current house? I'd take it for sure.

There are still enough buyers to support the middle market 3-bed semi's and the like; which make up the majority of the market.
 
partisan said:
I'm not suggesting that there is support at 10%, but why would anyone who has bought or remortgaged since 1998 (including people who bought in the 1990s and have traded up) sell at such a low price?
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Why wouldn't they? The market dictates the price!

- A trader-upper will sell their first property at a price below market high if the property they are buying is also below market high.

- An investor will sell for any number of reasons

- Executor sales on property through probate

- Developers will still make profits even at prices well below market high

- Respossessions

- FTB's feeling the pressure might sell to get out

It's a market, it doesn't stop because some people are below some imaginary threshold :)
 
whathome said:
Why wouldn't they? The market dictates the price!

- Trade-uppers A trader-upper will sell their first property at a price below market high if the property they are buying is also below market high.

- An investor will sell for any number of reasons

- Executor sales on property through probate

- Developers will still make profits even at prices well below market high

- Respossessions

- FTB's feeling the pressure might sell to get out

It's a market, it doesn't stop because some people are below some imaginary threshold :)
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I see where you are coming from, but the negative equity threshold is far from imaginary! Anyway, are you going to sell me your house? :)
 
whathome said:
How do you know this?
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The buyers have not all just vanished into thin air. Whats happened is that the number of houses for them to buy has doubled since the new property season began in Sept. More choice means slower decisions. If I were a buyer, thats what I'd do, I'd wait.
If I were an investor however, I would avoid the market, but as a FTB, I think the best time to buy is still right now. If the house you are looking at represents good value, and in the right location, then my advice is to go for it. It won't be cheaper in 6 months time. It will be the same price, or marginly more expensive.
 
paddyd said:
It won't be cheaper in 6 months time. It will be the same price, or marginly more expensive.
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Some properties are cheaper for FTB's now then they were a few months back. How can you be so confident that they are not going to keep getting cheaper?
 
partisan said:
And did u sell and buy at below market rate? Or time it perfectly and sell at the top and buy at a slight reduction?
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Sold at below the April market high. Had to reduce the price once and the final selling price was lower than the previous best achieved by a similar house. It worked out ok though because the house we are buying was also reduced and we are sale-agreed on that one well below the April high.
 
paddyd said:
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
Click to expand...

i've looked and can't find any but please do post up any examples you can find in the interests of a balanced thread

partisan said:
True, but the size of the fall would be limited by the fact vendors won't sell for less than they paid (probably including fees).
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right and thats why theres people handing back keys to banks in the states at the moment and walking way from $30,000 deposits and generally trying to sell to lock in any profit / minimise their loss
 
miju said:
i've looked and can't find any but please do post up any examples you can find in the interests of a balanced thread
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I know this is directed at someone else but I've come across one such property during my house hunting the bulk have been marked down (I can't be bothered to help out and look it up on the web though ;-) )


miju said:
right and thats why theres people handing back keys to banks in the states at the moment and walking way from $30,000 deposits and generally trying to sell to lock in any profit / minimise their loss
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That may be the case but the USA is huge, with very different dynamics in each city. Foreclosures in Florida doesn't mean we'll see them here!

Right now in Dublin there is strong rental demand, a solid job market, SSIA wealth (compare that to US savings!), strong economic growth (we've outpaced the USA!), lower interest rates and an improving European economy (many multinationals headquarter their EMEA operations here)...
I've yet to read reports of large scale repossessions here. The Deutsche Bank report (the one quoted by the uber-bears that highlighted our comfort with taking risks) said that housing was more affordable in Ireland now than the average over the last 16 years! It's unlikely we'll see reposessions anytime soon.
 
paddyd said:
real house prices are not falling. at worst what we are seeing is the fat being trimmed, on some high-end houses. Is there anyone here who doesn't think that the AMV minus 10% would be a good price for their current house? I'd take it for sure.
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Sorry is 'fat being trimmed on some high end houses' not the same as saying that prices are falling on high-end houses? All these euphemisms...
 
There will be no repossessions. The irish banks have to sell the mortgages to European banks to get finance - they will accept 1 euro a month and a promise to pay next year to avoid repossesions.

We also have to remember that many banks have not passed on the last interest rate rise and it will be probably be march 2007 before the december rate is passed on. That means the first selling season to see full interest rate impact will be autumn 2007.

One of the reasons for the delays in passing on the interest rate increases could be that the banks know they have had a good 2006, not passing on the increase will lower profits in 2006. This would help the first 3 months of 2007 when it will be vital to convince shareholders that the property slowdown is not impacting them etc etc.
 
partisan said:
The Deutsche Bank report (the one quoted by the uber-bears that highlighted our comfort with taking risks) said that housing was more affordable in Ireland now than the average over the last 16 years!
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Here's a link to the report:
[broken link removed]

Comment in the Deutsche Bank report on affordability:
Affordability has worsened significantly in the last couple of years in most European countries. Only Germany is a striking outlier with houses today being much more affordable than at any other point during the last 20 years.
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partisan, could you tell us where in the report it says that housing is more affordable in Ireland now than the average over the last 16 years?
 
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