Current public sentiment towards the housing market?

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gearoidmm said:
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?
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Plenty, the pension funds for one, cant see any serious developer going for it unless theres options to demolish and build higher on the site. The sentiment is still positive among many "investors" out there, i know of an investor who bought a small 3 bed semi former corpo houses in west cabra(bad part cabra near all those new flats on royal canal) for 420k a few weeks ago,add in stamp duty etc and void rents and his yield is terrible and house is ugly in a bad area. i can see groups of investors clubbing in together in syndicates and buying these bank branches, "Guarunteed rent!!" "great pension" they'll say etc.
The larger properties likes grafton street will be bought by a pension fund or big retailer or the like as a flagship location rather than for rental yield.
 
walk2dewater said:
stagflation?
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Certainly the early warning signs are there for all to see but no one dare speak its name. A period of stagflation would certainly be worst of all possible scenarios for the Irish property market and economy.
 
Living in France, where the weather is possibly too hot and dry, I idly thought about buying in SW Ireland - somewhere cheap to go for the summer months and early spring to play a little golf and maybe do some fishing. After a couple of weeks research I am absolutely staggered by the prices - especially for the dull, unimaginative new-builds that seem to have broken out, rash-like, on a hitherto quite attractive landscape. One could almost buy better in the UK and certainly €400k in SW France will get you a palace, land and still be able to afford to pay some French builders to fine tune it.
Anyway, the upshot of this minor tirade, I'm afraid, is to think again.
 
BOI forecast.

I, for one, consider that so called 'forecast' by Dan McLaughlin to be the height of irresponsibility.

It is indicative of lax and unsustainable lending practises in BoI itself of course :( .

Maybe Dan 'knows' they will launch the 50 year interest only mortgage any day now !
 
CelloPoint said:
15,235 houses for sale nationally on daft.ie now. Up from 14,900 late last week.
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Stop with the stats, its been widely agreed that these have little meaning without serious market research.
 
Surely none of the Irish bank economists, real estate economists, auctioneer economists or other hired guns have any credibility whatsoever? Even looking beyond their obvious vested interest, this crowd have in fact a dismal track record in forecasting ECB rates, completions, even price rises. This has been overlooked because the general trend has proved them broadly correct. D McL in particular has been spectacularly poor in forecasting ECB rates 6-12mths out with any degree of accuracy. He changes his minded constantly yet he seems constantly behind the game. Imagine basing investment decisions on his public announcements? These people simply cannot be trusted in my view, they are far too compromised by their source of income.
 
The real story in that article/report is that he says price growth will slow to 3% next year which with inflation at 4% is a fall in real terms! when recent investors are getting less than inflation growth rates and are having to subsidise their "investments" every month there will be many heading for the exits.
 
bearishbull said:
The real story in that article/report is that he says price growth will slow to 3% next year which with inflation at 4% is a fall in real terms! when recent investors are getting less than inflation growth rates and are having to subsidise their "investments" every month there will be many heading for the exits.
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And with average Dublin house prices around the E525k mark, 1% difference equates to E5k a year or a E9k salary drop if you're paying tax at 42%.
 
If you investment is falling in real terms by 1% a year it reduces your already paltry rental return by 1% so houses in dublin 4 and 6 will be yielding around 1-2% including capital appreciation - sorry depreciation! while the cost of financing the "investments" will be heading for 5%!! No brainer.
 
I also think mclaughlins being optimistic with a 3% growth rate,he's a banker, he's not gonna say prices will only grow by 0 or 1 % in nominal terms, if a banker says something will grow by 3% and he has a vested interest in the prediction then halve the predicted rate to get a more realistic prediction.
 
The BoI report said the average national house price would rise to €395k by the end of 2006 BUT latest Permanent TSB/ESRI House Price Index has the average national house price at €300k. How can these figures be so far apart? The BoI numbers don't add up!
 
ivuernis said:
The BoI numbers don't add up!
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They don't have to 'add up' because the lazy uncritical fatarses that call themselves journalists will report them as gospel....save maybe the Indo who have decided to prick this bubble in the national interest.....and fair play to the Indo for once because I am not a fan of them really

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2Pack said:
They don't have to 'add up' because the lazy uncritical fatarses that call themselves journalists will report them as gospel....save maybe the Indo who have decided to prick this bubble in the national interest.....and fair play to the Indo for once because I am not a fan of them really

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I don't think they've done it just yet. I would say they're building up the story though. I wouldn't be surprised if the headlines were prepared already.
 
Irish House Prices – A perfect storm?

Reading the “press release” from Bank of Ireland today reminded me of stockbroker predictions in the late nineties. I wonder are we brewing the perfect storm for a crash …

- Reckless over-lending from banks and building societies
- Large speculative element to the market – Interest Only, 100% mortgages etc
- Huge dependency on the construction industry
- National obsession with property at the expense of real entrepreneurial activity
- Blind faith in economists with a vested interest which helped inflate the bubble
- Prices disconnected from fundamentals
- Rising interest rates following years of rates which were far too low for the economy
- Massive over-supply in the market due to rising completions

Has anyone mentioned the looming dip in demographics? There was a big drop in the Irish birth rate from the mid 80’s to the mid 90’s. Universities have even been advertising on the radio for undergraduate places in the last year or two! What will happen to FTB numbers when these people reach buying age soon?
 
I read through this article which I found very informative. (Thanks to Neffa who posted this on another thread already - I thought it was very relevant here too though!).

[broken link removed]

I liked this paragraph in particular:

"The frenzy is driven by several factors: newly confident twentysomethings desperate to get on the housing ladder before it’s too late, the arrival of European banks offering mortgages with no money down and interest-only monthly payments, and a national preoccupation with landowning that probably dates back to when all land was in the hands of British gentry. The accompanying construction boom accounts for half of the country’s job growth in recent years."

And so it seems, for all the 'new found wealth of today's celtic cubs' lark we constantly hear about, the Irish inferiority complex (with regards to land ownership) is alive and well. The ignorant bling-bling display of wealth on show by the neuve riche in today's Ireland just typifies the obsessive one-up-man-ship and 'keeping up with the Smurfits' (to coin a phrase from David McWilliams) that is alive and well in the Irish psyche.

We're a nation of drunks and gamblers and have never been able to stand up on our own two feet with regards to managing our economy. There'll be no EU funding or foreign direct investment next time round. I'm expecting a massive hangover.
 
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