Today's births are not relevant to the market over the next couple of years. Births in the 80's are. And there's a big drop off since 1980. Less FTBs will be coming on stream.
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Today's births are not relevant to the market over the next couple of years. Births in the 80's are. And there's a big drop off since 1980. Less FTBs will be coming on stream.
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Guest111
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Sorry WhatHome!
Arthur Daley
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I wouldn't put too much faith in this. Some of them are doing this every day of the week. People have agendas in business and the media here is often too lazy or silly to do anything except take what is said verbatim.
The NCB report is equally based on a lot of assumptions. They assume that life expectancy will continue to rise, they assume that fertility will remain at current levels. Interestingly, after 2020 they expect immigration to fall to 0.
The problem, as I see it, is that the predictions, as such, will stand or fall on those assumptions. In other words, the report is in a nice pdf, but it is still speculation per se. I suppose that makes it no different to the property market in itself.
What interests me is the general short termist view of looking at things here. Property doesn't crash overnight. It might crash over seven or eight months, and the cracks might be visible for a long while. But what interests me is that initially, people who called time on untramelled growth were called to provide "proof" whereas people who don't believe that a correction is likely or possible don't have to provide any proof at all, or at least, don't have to provide the same level of proof. NCB's report is an indication of this. Many people have doubts about the property market because it has gone over and above average affordability. Not because they are playing guessing games with the economy and future population. What we have now is not a long term situation, and unfortunately, rising salaries will not buy us out of this situation without also buying us a lot of unemployment.
Ultimately, the property market comes down to brass tacks. Who has the money, and who hasn't. The banks are running out of options to give people more money to buy property. I'll be interested to see what they come up with to get over short term affordability problems since they've run out of 100% and interest only and 35 and 40 year terms as options. There isn't much left except very dangerous games in a rising interest rate environment.
The problem, as I see it, is that the predictions, as such, will stand or fall on those assumptions. In other words, the report is in a nice pdf, but it is still speculation per se. I suppose that makes it no different to the property market in itself.
What interests me is the general short termist view of looking at things here. Property doesn't crash overnight. It might crash over seven or eight months, and the cracks might be visible for a long while. But what interests me is that initially, people who called time on untramelled growth were called to provide "proof" whereas people who don't believe that a correction is likely or possible don't have to provide any proof at all, or at least, don't have to provide the same level of proof. NCB's report is an indication of this. Many people have doubts about the property market because it has gone over and above average affordability. Not because they are playing guessing games with the economy and future population. What we have now is not a long term situation, and unfortunately, rising salaries will not buy us out of this situation without also buying us a lot of unemployment.
Ultimately, the property market comes down to brass tacks. Who has the money, and who hasn't. The banks are running out of options to give people more money to buy property. I'll be interested to see what they come up with to get over short term affordability problems since they've run out of 100% and interest only and 35 and 40 year terms as options. There isn't much left except very dangerous games in a rising interest rate environment.
No-one suggested that.
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cheeko
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Of course they are self serving; they're in it for the money. And the report is not lies because it's about the future. It is fantasy. To consider it as some sort of prediction is to miss the point of the report. The assume the rate of growth in order to illustrate certain things that would happen as the result of that rate of economic growth. They say nothing about where the growth will come from.
So it would be foolish to form a bullish sentiment on property in Ireland without justifying the productive sources of this high growth scenario.
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Guest111
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My experience is those predicting a crash don't seem to provide any evidence.
If they do, you can't disagree. If you say why you believe there'll be a soft landing you get shot to pieces.
It's all speculation...and if all you bears really truly believed you'd be selling all your houses and renting right now
If they do, you can't disagree. If you say why you believe there'll be a soft landing you get shot to pieces.
It's all speculation...and if all you bears really truly believed you'd be selling all your houses and renting right now
They're not, per se fake. They are what could be described as a best case scenario. It's what you expect from people trying to sell financial instruments. Anyone with money + sense would not necessarily take them at face value.
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Guest111
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In other words, NCB have a agenda...they want to preserve the good feeling so they put out lies and mistruths or at best extreme and probably unlikely optimism?
Arthur Daley
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I'm not convinced enough yet to sell. There have been false dawns before. Is there a bubble there? absolutely. Will it unwind in 2007? I'm not sure, if supply of land and new builds is shut off by the VI's prices could be maintained or you could have 10% drops in some areas. Like all market sentiment (including the Irish property market on the way up) momentum places a huge part.
I rent. I rent because I see no sense in buying a property I don't like in a place I don't particularly want to live in for the long term, causing me to have to trade up (hopefully) and undergo the transaction costs associated when I can, for less money, rent five minutes from work in a nice, new house which although not necessarily perfect (I have flatmates) is signally better than anything I could buy. It's called a lifestyle choice based on cold economics.
The property market may not correct in my favour, of course, or, given that rents are slowly starting to eke up, not to the extent predicted by some. But ultimately, supply and demand in housing aside, I have somewhere to live. If we had such a problem with supply, I think I wouldn't.
Whathome's point about risk is being misconstrued. If you bought ten years ago the income derived from the capital outlay compensated for the risk involved. Even with no capital appreciation in the property you making money - yields were about 10%. You could buy and make your money back in ten years, irrespective of the sale price. As such, whathome viewed it as a low-risk investment.
With the poor yields available now, capital appreciation is required to make money and since this isn't guaranteed, whathome views property now as a higher risk investment.
Once the income derived from the capital is sufficient it mitigates the risk.
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Guest111
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Yet there's people here saying the tenants just won't be there yet Calina's happy to rent and probably has a better standard of living as a result (I mean more beer money!)
Maybe anyone not on the merry-go-round now has missed the boat...there'll be no crash and the last decade's speculators are the century's winners?
Exactly. Also, with equity investments if you allow a sufficient margin of safety between the price you pay and the intrinsic value of the business then risk is minimal. Essentially you are paying €1 for €1.50 of value.
What makes you think we're not? As an interesting aside I was speaking to one of Ireland's young high-tech entrepreneurs recently. Won't disclose the name or the company but they have been very successful in carving out a niche for themselves in the games development industry. He was spectacularly gloomy about the future of the Irish economy and not very impressed with the quality of Irish graduates. "How can they justify their wage expectations when I can hire a senior programmer in India for $25 a day?" was one of his comments.
Most relevant to this thread is that he rents himself and advises new workers hired from abroad (mainly for quality reasons - he pays them a decent salary even by Irish standards) not to even consider purchasing here and that they should rent instead!
The Union Tribune reports from California. “San Diego County figures from DataQuick indicated a downturn trend in prices. The median price last month for newly built houses and condos and condo conversions locally was $413,500, down 17 percent from a year earlier, with analysts speculating that much of this change was the result of an increase in lower-priced condo conversions.”
“On sales, DataQuick said San Diego County’s new-housing total was 885 transactions last month, 37.5 percent lower than in September 2005.”
I wonder if the apartment market in Ireland will be the first to witness the impact of a slowing market mirroring the California experience? Or are we more likely to see these signs in long distance estates?
“On sales, DataQuick said San Diego County’s new-housing total was 885 transactions last month, 37.5 percent lower than in September 2005.”
I wonder if the apartment market in Ireland will be the first to witness the impact of a slowing market mirroring the California experience? Or are we more likely to see these signs in long distance estates?
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