Current public sentiment towards the housing market?

[jammacjam]

In most of europe its perfectly natural to rent,if your outlook on life is conditioned by your immediate surrounding then I think you need to broaden your horizons.
What dont FTB deserve?Nobody is physicaly forcing them to do anything,dont believe the hype or the media, they're out to make money ,not do you favours.
House prices keep rising because people keep buying them,if people did their homework and worked out whether houses were good value or not, using facts ,statistics,history,comparisons and basic common sense they would have stopped buying them a long time ago,the're not doing this and been driven by fear(of their own ignorance),this is foolishness en masse.
There is no external,mystical,uncontrollable force driving house prices up,its not like the weather.
You and everybody else's attitude and consequential action affects what happens.
I dont own my own house,I did but now rent,I didnt buy to make money, I have since cashed in and I feel very secure about my decision and I am financially better off.

I dont own either for the exact same reason, we were going to untill this year but it doesnt make sense anymore. I can understand why people want to buy as well and it made sense untill about a year ago I would say. No I feel sorry for what is about to happen, not happy about it is all I mean.

 

[Zack]

Duplex, "auger in " - yeah, its test pilot terminology for an uncontrable,downward spin -resulting inevitably in, well, a crash. Alternatively : " it's bleeeedin Hindenburgin bud"

One thing though, whether you own property or not it seems we are all cojoined in this. A crash or slide will have fairly traumatic consequences for the economy in general. (having said that, its somewhat easier to pack your bags, get on a plane and earn your living elsewhere when you're not chained to the old bricks and mortar.)
As it happens my partner and I purchased 5yrs, ago. We have been clearing the mortgage extremely aggressively while rates are so low and are sensible relatively responsible wrt finances. What disturbs and annoys me is the sheer volume of profligate cretins out there to whom the phrase " rainy day" seems to have no meaning, who are up to the hilt in debt and to whom "interest rates" are an abstraction that has no bearing on their lives.

A lot of people it seems are going to have a severe hangover once Germany's and Ireland's interests beign to diverge.

Z

 

[walk2dewater]

I maintain though that this thread represents a microcosmic sample of sentiment, the vast majority of people are simply not on board with the views here. In fact, between now and Xmas, I reckon theres gonna be a small army of aggressive buyers climbing over themselves to accept whatever prices sellers are asking for. Prices are going UP UP UP in the near-term.

This will be the last hurrah, then I’m going to starting betting seriously against this bubble. And I will explain it in detail on a new thread.

 

[CelloPoint]

...having said that, its somewhat easier to pack your bags, get on a plane and earn your living elsewhere when you're not chained to the old bricks and mortar.

This is exactly what I'll do if things go pear shaped. I certainly won't be sticking around for the hangover. And I'll be taking my free education with me.

 

[room305]

This will be the last hurrah, then I’m going to starting betting seriously against this bubble.

Once silly season kicks in again in earnest I shall be selling. I'd prefer to get out before the top than either try and time the top or deal with the aftermath.

 

[CelloPoint]

Once silly season kicks in again in earnest I shall be selling. I'd prefer to get out before the top than either try and time the top or deal with the aftermath.

No doubt this thread is being passed off as 'silly season' scare-mongering.

 

[whathome]

We're selling two properties and there is no sign of a small army of aggressive buyers, quite the opposite. We were sale agreed on one of the houses we're selling but the buyer got cold feet and backed out. Now an identical house has gone up in the same estate with an asking price €30k less than ours. I really don't think any "UP UP UP" situation will occur in the near term, sentiment has changed - maybe not a lot but enough to tip the balance.

The effect either way on me is neutral as we're selling and buying roughly equal values but right now it looks like buying is becoming easier than selling if you're brave enough and have the money! If I could avoid it, there's no way I would buy any property until values return to reasonable levels based on rental yield, price/earnings etc. Unfortunately I can’t avoid buying so selling to buy rather than holding existing properties and buying is as good as it gets.

 

[redo]

We're selling two properties and there is no sign of a small army of aggressive buyers, quite the opposite. We were sale agreed on one of the houses we're selling but the buyer got cold feet and backed out. Now an identical house has gone up in the same estate with an asking price €30k less than ours. I really don't think any "UP UP UP" situation will occur in the near term, sentiment has changed - maybe not a lot but enough to tip the balance.

The effect either way on me is neutral as we're selling and buying roughly equal values but right now it looks like buying is becoming easier than selling if you're brave enough and have the money! If I could avoid it, there's no way I would buy any property until values return to reasonable levels based on rental yield, price/earnings etc. Unfortunately I can’t avoid buying so selling to buy rather than holding existing properties and buying is as good as it gets.

Are they FTB type properties?

 

[whathome]

Are they FTB type properties?

One is a high-end FTB apartment, the other is a moderate trade-up 3 bed semi. On the purchase side looking for a 3/4 bed house with a decent garden - still seeing people at viewings but nobody making offers...seems like everyone is cautiously waiting to see what will happen.

 

[Jeanne]

Can I ask how you heard about this thread? Are you a new askaboutmoney user? The reason I ask is because this thread has received a phenomenal amount of hits over the last 3 weeks.

I was talking to a colleague at lunch and I overheard the people at the table next to me talking about this thread!

I pop in and out of this site from time to time, so not a total newbie and didn't hear about this thread from someone. Don't tend to post much because they seem quite srict and I'm nervous of having a post removed/deleted etc because it's in the wrong place or because I failed to notice there was already a similar thread or that type of thing.

Anyway, back to the topic. I'm near Dublin 14 and have noticed that houses are not selling as quickly as earlier in the year. Any houses that didn't sell before mid June are still For Sale and this would be considered a very desirable area. I reckon the heretofore popular EA in this area (who shall remain nameless) may not be so popular from here on. The asking price in most cases is too high and the EA ought to have known, particulary coming into the summer, to pitch a bit lower in order to sell. So now they're probably telling all their clients not to worry, everything will be fine in the autum because there'll be loads of buyers by then!

 

[bearishbull]

signs of changing sentiment in banking sector?
Meanwhile the banks continue to sell their property assets. They say its to free up capital to lend more but in reality it would free up limited capital relative to the amount they already lend,they can already get unlimited money for the low ecb base rate from eurozone and stick their high irish margins on it, why didnt they sell these assets to free up capital for lending back in the 90's 80's etc?? Surely if they think property is gonna keep rising it would be better to hold appreciating assets as capital appreciation and rent saved would outstrip any one off benefits from selling the assets for a large capital sum now? AIB even seem eager to start selling before BOI, are they getting nervous?? Do as i do not as i say!

From Irish Times
AIB is to follow Bank of Ireland by embarking on a sale and leaseback next month of part of its branch network to release capital for its banking operations. Jack Fagan reports.
AIB is planning to upstage its main competitor by putting about 15 of its best-located branches in Dublin city and suburbs on the market in August, a week or two before B of I is due to begin a sales campaign for 36 of its branches.
Significant investments are seldom offered for sale in August, when many of the main players are on holidays.
AIB apparently has not finalised the list of buildings to be offered for sale in the first round but, according to a bank source, the portfolio will include many of their best branches in the Dublin area.
If, as expected, the first branches sell particularly well, the bank will then offer other buildings throughout the country, including those in provincial cities and large towns where they generally occupy prime trading positions.
AIB's most valuable Dublin branch at Grafton Street also has frontage on to Wicklow Street and would be expected to sell for a yield of 2-2.25 per cent. Depending on the rent the bank is prepared to pay, this branch alone could be worth at least €35 million.
Branches in Dame Street, Lower Baggot Street, Upper O'Connell Street, Blackrock, Morehampton Road, as well as Ranelagh and Dun Laoghaire, are likely to be among those going for sale.
Suburban branches will have a valuation of €5-€8 million and should show returns of around 3 per cent for investors, depending on whether the leases provide for break options. About half the Bank of Ireland branches going for sale allow the bank to opt out after 15 years.
A spokesman for AIB said yesterday that their property portfolio "remains under review." In fact the bank has favoured a sale and leaseback strategy for a considerable time and always planned to move ahead with the sale of the branch network once it had completed the disposal of the AIB Bank Centre for over €377 million.

 

[tiger]

... They say its to free up capital to lend more but in reality it would free up limited capital relative to the amount they already lend,...

It's not to free up captial, but to improve the return on capital.

Yes they can borrow from the central bank, but they need to have adequate Tier 1 & 2 capital (have a look at Capital adequacy)

A branch is worth, say €2M. It's equivalent rental income is only 2-3% of this. Through their normal business they expect to be able to generate more than this.

 

[walk2dewater]

Suburban branches will have a valuation of €5-€8 million and should show returns of around 3 per cent for investors.

Yeah I can just see the world's investors lining up for this bargain. What a joke.

 

[room305]

AIB's most valuable Dublin branch at Grafton Street also has frontage on to Wicklow Street and would be expected to sell for a yield of 2-2.25 per cent. Depending on the rent the bank is prepared to pay, this branch alone could be worth at least €35 million.

This already sounds like an extraordinarily bad piece of business. If I had €35 million to invest I know I wouldn't be sticking it somewhere with a yield of only 2.25% ...

 

[bearishbull]

It's not to free up captial, but to improve the return on capital.

Yes they can borrow from the central bank, but they need to have adequate Tier 1 & 2 capital (have a look at Capital adequacy)

A branch is worth, say €2M. It's equivalent rental income is only 2-3% of this. Through their normal business they expect to be able to generate more than this.

whatever they claim i think its smoke and mirrors,the big two banks are clamouring to sell their prime real estate which they have never done in the past. they have no problem lending at present,maybe they want to make their accounts look better but financial institutions dont sell prize assets that are set to increase substantially,only conclusion i can draw is they dont expect substantial increase over next ten+ years

 

[tiger]

only conclusion i can draw is they dont expect substantial increase over next ten+ years

Would tend to agree with this, if the banks are selling property then you have to think they believe its at or close to the top of the cycle.

On the other hand there might be another objective here. Banks are trying to move customers away from the counter and towards online. They've already closed several city center branches, it'll be easier to close these others in 10-15 yrs time when they come up for rent reviews.

 

[wolfie]

Of the 114 houses for sale in Athlone on daft.ie, at least 35 are investor owned.The areas of Willow park, Alverno, meadowbrook, norwood, and auburn heights are traditionally student areas. The houses for sale are well below the prices for similar houses in other areas of Athlone I.E 145K TO 200K for a standard semi as opposed to 250 k plus for similar houses elsewhere in town.A sure sign that the investors are having second thoughts about the direction of this market and are getting out.We are being forever told by the media that there is a shortage of starter homes around the country I see no shortage in athlone .I see a big queue of investors lining up to bail from this market.

 

[walk2dewater]

Coming here soon...

http://cbs13.com/video/?id=8259@kovr.dayport.com

...but not before one last gasp I reckon...

 

[bearishbull]

Would tend to agree with this, if the banks are selling property then you have to think they believe its at or close to the top of the cycle.

On the other hand there might be another objective here. Banks are trying to move customers away from the counter and towards online. They've already closed several city center branches, it'll be easier to close these others in 10-15 yrs time when they come up for rent reviews.

The fact they are continuing to rent the properties tells you they dont intend shutting many branches anytime soon, if closing branches is planned down the road they could always sell the assets when the time comes to close branches down and get any capital appreciation between now and then but they chose not to and would rather rent than hold onto prime real estate! they a)dont expect rents to rise significantly(or else they wouldnt be as eager to sell and rent) and b)they dont think the capital appreciation prospects are good enough to hold onto them, i can see the banks buying back their properties at knock down rates in years to come.

 

[gearoidmm]

The only reason that someone would spend 35 milllion to get a 2% yield is if they thought there was going to be significant capital appreciation in the future. Otherwise you're much better off putting it into bonds. However, the fact that the banks are selling out suggests that they don't feel that there is much scope for further price rises.

Is there anyone out there stupid enough to go for this?