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Guest111
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WhatHome, I'm not actually worried about myself...it's the effect of a crash on other people and friends of mine that irks me
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Dipole
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So you are saying essentially that supply hasn't met demand yet ......and when it does things will change?
There are a lot of people here who claim supply has already met demand and there is now a significant overhang in the market.
Just thinking how could we keep the bubble inflated? I suppose that the government could issue a statement asking 'investors' to stop selling up as it is causing house price inflation to drop. Or maybe we could ask the MNC's to pay us more money compared to our counterparts in other countries. We could ask the Hedge Funds to accept Irish Mortgage Backed Securities at lower yields or the EU to bung us a bit a cash ta keep tings ticking over.
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Eirmail
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Another differences is that if there is an oversupply of cars in America new or old they can be sold abroad and be used abroad. If there is an oversupply of houses in Ireland they can technically be sold abroad but can't be used abroad.
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partisan
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eh? I was in my mid 20's 5 years ago and couldn't get a loan for any of the houses then available (at least the ones I wanted - what's changed!) - even though I could have afforded the repayments. The average age of ftbs in Ireland has fallen from mid thirties to late twenties. Hardly smacks of young people not being able to get on the ladder. I for one, am grateful I was able to get a job here and didn't have to leave or sign on like about a half my parents generation. The economic boom made life easier for those who lived through the transition (those 5 years older than me - had I been born 5 years earlier...). If you've just graduated, save your money and look to buy in 5 years time. You'll be earning more, and even though prices are nominally high, low interest rates, longer terms, interest rate relief, low personal taxes, full employment makes paying high mortgages easier than you think. To get the loan, though, you _must_ have savings history.
And one more thing --> back then everyone was bearish and saying the market was going to crash (at least all us potential ftb's were). We hung on David McWilliams every word. The Nirvana of cheap housing and high wages was just around the corner - in 2001 prices even fell 10%. Look where we are now...
Are the friends that you're so worried about not "happy to ride out any slump or crash" as you put it?
Maybe they're in your second grouping above - "people trying to make a quick buck" ?
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SteelBlue05
Guest
Well its not just supply and demand. Demand needs to be accounted for by location, e.g. more demand in Dublin than Longford...but you can buy a car from any dealer anywhere.
I am not trying to convince people that prices wont decrease, I am merely pointing out that its not as simple as you think.
House prices have always been just beyond peoples general affodability levels, yet they somehow manage to find the money, I dont think this is ever going to change.
Now affordability is decreasing due to increasing rates but that wont cause a massive crash, its will just reduce them to a point where they are always just out of reach. And somehow the buyers come up with the cash.
bearishbull
Registered User
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Do you not think that with ireland building around 90k house a year that there will be massive oversupply in 20 years so your invetment probably wont be worth much more(if any) in real terms then???? If we keep building say an average of 60k huse for 20 years thats 1.2 million houses over next 2 decades, that has to impact significantly on prices as incomes wont be rising much over next 2 decades due to globalisation, most households already being dual income,slowdown in irish economy etc.
The long term investment philosophy wont work over next 20 years the way it did over last 20 years. The last 20 years was a one off.
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miju
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i'd say (and i hazard alot of others here) that as short as possible correction no matter how painful to put the property market back in touch with reality and so the economy can recover quicker rather than a long drawn out saga ala Japan
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Open_Window
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I accounted for that with the "but to let" reference.
Cause they is as silly as people who pay over 400K for a 1 bed with a 100% over a zillion years.
If people are happy to throw, brun & genrally waste money by al means but they distort the market
Did it irk you when you were rubbing your hands at the spectacular capital appreciation your investment properties enjoyed?
That's true in a rising market. In a market that is falling however, many choose to stay on the sidelines even though they could buy at current prices. During the 90's crash in the UK for example, FTB's sat on the sidelines while prices dropped. Even though they could easily buy, it was safer to rent.
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Debtwish
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You underestimate the power of peer and parent pressure. Many young people have already succumbed to this.
And I wish you luck. But you are being very unfair to the many skilled people that we need in this economy that work hard and do an excellent job for 40K a year. You never know, one day you may need them.
bearishbull
Registered User
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No it smacks of being able to borrow more due to increasing loan durations and smacks of desperation/fear of not being able to buy in 30's and having to buy property earlier and earlier(sure we'll have 19 year olds as average ftb in year to come!). I dont worry as prices will be much lower in decade to come when i may decide to buy.
They are not just out of reach - they are approaching miles out of reach for an increasing number of people in the community. For them to approach "just out of reach" they need to fall quite a bit. The average salary - which isn't rising anywhere fast - is less than one tenth the average house price. From a cashflow point of view, purchasing costs more than double what renting does.
The property market, being heavily fed by sentiment, is, in fact a complex beastie. If it was even remotely sane, we wouldn't be having this discussion. But that does not mean that prices cannot yo yo. They went up by 270% in ten years. Swings of that magnitude need not be in one direction only and yet far too many people seem to convince themselves that property cannot go down. It can. It has done in quite a few other countries.
CelloPoint
Registered User
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First off: fair balls to the guy with "little education" who took the risk, put his neck on the line and speculated on a few properties and made a killing. He's obviously not that stupid. There's nothing stopping a member of the free university education brigade thinking (and doing) the same thing (and it doesn't have to be in property).
Secondly: young Irish graduates live sophisticated lifestyles consisting of designer clothing, credit cards, expensive watches, nightclubbing, gym membership and 06 cars. This lifestyle is not necessary - the funny thing is though, that young 20-somethings "expect" life to be like this because they have never known any better.
Thirdly: Irish salaries are high compared to most other european salaries - why else are so many workers coming here? There's a property bubble, yes, but it doesn't bother me to be honest - I have no overwhelming inherent urge to just jump willy-nilly into a whirlpool of dreams because of some AIB ad I saw on the telly. Get over this perceived need to "own" and get on with other opportunities in life. There will always be opportunities to make a killing - it's not restricted to just property you know. Many Irish people are convinced that the only way to make easy money is via property because so many of their peers have made so much money in that asset class in recent years.
Subsequent to that fall in prices, credit became incredibly cheap and the banks started getting a little more lenient what with raising the salary multiple that you could bother up to5 times your salary as opposed to 2.5 times which had been the case ten years previously, and increasing the length of time you could borrow money over - up to 40 years in some cases. 100% mortgages, interest only.
Everything has been done to make property affordable in the short term - you know why? Because it wasn't. The average age of FTBs having fallen is not a good thing for this country - it means a lot of people are going to get to the age of 30 and 35 and wonder why on earth they bothered. I know more than a few people who got to the age of 27 who wondered why they didn't travel for a few years and they just had jobs. They didn't even buy apartments.
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Guest111
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It's unusual to meet a taximan with a chip on his shoulder...
Last time I looked is was neither immoral or illegal to buy an investment property.
And we've also got to remember when it's your home "value" goes out the window...you want it, you want it
Last time I looked is was neither immoral or illegal to buy an investment property.
And we've also got to remember when it's your home "value" goes out the window...you want it, you want it
CelloPoint
Registered User
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Specifically, what are you trying to say?
Salaries aren't the issue - I could probably earn more outside Ireland than I do here. The difference is actually the unemployment rate and most people coming here are not necessarily going into the high tax bracket jobs. Quite a lot of the immigrants whom I shared flats with over the past five years were in relatively low paid customer service/tech support jobs.
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