Current public sentiment towards the housing market?

Status
Not open for further replies.
asterix said:
Unemployment is the key factor in precipitating a property crash. This is not an issue in the Irish economy at present. However, there are, undoubtedly, issues with affordability brought about by interest rate rises and this is what will slow the market down here.
Click to expand...

This is interesting. Dan McLaughlin amongst others keep pointing at how a rise in unemployment is necessary before the property market can begin to fall. In contrast to that, looking at the market in the US at the moment, the unemployment rate has hit a 5 year low and despite that, prices are starting to go into freefall in certain areas and the overall median house price has fallen countrywide for the first time in 16 years.

And before someone mentions the large rise in the fed rate there over the past 2 years, comsider that the average interst rate went to 5% at the lowest and now is around 6.5%.

So, they are having a property crash without any rise in unemployment and without an enormous rise in interest rates. Just a change in sentiment combined with unaffordability.

But of course that couldn't happen here...
 
Favorite quote from the property pages this week was from the Irish Times property section. When referring to the auction results, the first line said something like - 'The highest price achieved at auction this week was for x house in Blackrock'. At no point in the article did they mention that it was the only house that sold at auction this week!


It's so dishonest.
 
bo se said:
4 Investors who couldn't be bothered collecting rent because ther're making so much on capital appreciation;
6 Houses nearly complete or recently completed which from a census enumerator's perspective look finished but convencing is on going or the power isn't connected or they're being kitted out.
Click to expand...

Somewhere between these two categories would be developers who hang onto a couple of houses in each estate/apartments in each block as they develop. Until now, it would have been better than money in the bank.
 
There will not be a soft landing, the Irish property market is an elephant at the moment, when elephants fall, they fall hard.

There is nothing stopping the ECB from raising rates all the way to 5%, which is where Europes second biggest economy is heading this Thursday. If Irish property owners are stretched at 3.25%, they will snap at 5%.

[broken link removed]=
“But we cannot deny that there is a risk that rates rise to 5.25% and possibly beyond if the MPC does not like what it sees on the inflation front, and although our central case remains that 5% will prove to be the top of the cycle, we are less confident now that this will be the case.”
 
zac said:
are you sure?

Is NIB not irish, is Danske bank not foreign. is first active not irish, is bank of scotland not foreigh?

RBS considered buying AIB or BOI, RBS CEO once said, he also said such a deal would run into problems with competition authority hence they dint proceed.

Since the 'fact' on which rest of the argument(speculation) is based isnt true, the conclusions can be disregarded.
Click to expand...

NIB was an Australian owned bank whose parent was desperate to get rid of it post scandal and sold it to Danske. Bank of Scotland are going the build the business route - they did not buy a major bank here, but ESB shops. They perceive more value going this route.

RBS already own Ulster Bank and have done for a long time......

The key point of the post was to highlight that the local large lenders will do what it takes to survive a landing ( hard or soft ) and that keeping up their share price will be more important to them than the plight of over exposed borrowers. They will be possibly under even more pressure than foreign owned lenders as they are very exposed to this market. It is where they make a large chunk of their profit and lack the balance of say RBS / Ulster who operate in a number of countries and have less exposure to property clients across these markets.
 
JayDub said:
There will not be a soft landing, the Irish property market is an elephant at the moment, when elephants fall, they fall hard.

There is nothing stopping the ECB from raising rates all the way to 5%, which is where Europes second biggest economy is heading this Thursday. If Irish property owners are stretched at 3.25%, they will snap at 5%.

[broken link removed]=
“But we cannot deny that there is a risk that rates rise to 5.25% and possibly beyond if the MPC does not like what it sees on the inflation front, and although our central case remains that 5% will prove to be the top of the cycle, we are less confident now that this will be the case.”
Click to expand...

Three points.
1/ There is no evidence to suggest that Irish Property owners are stretched at 3.25%. Potential Irish property buyers may be put off by high prices (especially after the panic buying earlier this year). We're not hearing anything of repossesions or even a slow down in consumer spending (if anything our economy is powering ahead)..
2/ Historically British interest rates have been higher than German interest rates.
3/ Rates are rising quite slowly. Plenty of payrises in between. Plenty of opportunity for saving and adapting lifestyles.
 
It seems that EA's are becoming nervous at valuations. The AMV is losing appeal and having to reduce a price suggests they got it wrong first time. The new appoach seems to be to 'hint' that the vendor will accept a lower price. This is having their cake and eating it. Put the house on the market for private Treaty at a price that warm and fuzzy and sell it for its market value. If market value is what someone is willing to pay for something EA's are hiding it behind PT deals. There is not access to monthly prices. Asking prices are a curtain that could hide either higher prices or lower ones. Just because they are all we have to go on does not make them more concrete.
EA's or economists who got the higher points in the leaving?
 
I see the McWilliams RTE series starts tonight. Anyone think this will have an affect on sentiment?
 
From the Sunday Times Ireland yesterday:

Comment: Matt Cooper: Our houses are not worth all the money we’ve borrowed on them

http://www.timesonline.co.uk/article/0,,2091-2437932,00.html

Now, however, the property boom may be coming to an end, leaving government, home-owners, landlords, banks and auctioneers all fretting that the much anticipated “soft-landing” could be very bumpy indeed. Suddenly some people are starting to “think smaller”, as interest rates rise, rents stall and the anticipated capital gains from properties fails to materialise.
Click to expand...
 
whathome said:
From the Sunday Times Ireland yesterday:

Comment: Matt Cooper: Our houses are not worth all the money we’ve borrowed on them

http://www.timesonline.co.uk/article/0,,2091-2437932,00.html
Click to expand...



Interesting point about people "thinking smaller". This is so true...I remember in the 80's there were pound shops everywhere and today there are none as people have more money. Expect more of these Euro Shops to open should the economy start heading south. Also, I would take a close look at the % of sales by Aldi/Lidl....

Firefly.
 
asterix said:
2. It still doesn't make sense to me not to earn rent from a property when you can, even with the high levels of cap. appreciation in recent years. Arguments relating to problems getting rid of tenants and...redecorating...dont' have a lot of cogency for me.
Click to expand...

There was an interesting piece in the Sunday Tribune yesterday about the rental market in Dublin recently. People were quoted saying they were having extreme difficulty finding a suitable place in the city center. One guy said he went to view a a 1 bed apt and there was 75 other people also looking at the same apt. Other people were saying they have been looking for wks for a place. One interesting comment was from a Sherry Fitz agent ( i think!) admitting that there is a lot of vacant apts around Dublin at the moment. They were also saying rents have gone up approx 10% in the last few mths. There def has been a sudden squeeze in rental accom in Dublin. The fact that there has been a sudden increase in supply of sale properties would def suggest that a lot of investors are trying to dump their properties now hoping they can get the best price!
 
liteweight said:
Can't say I've noticed any empty properties in the Dublin rental market. Anything to back this up?
Click to expand...

i can show you about 20 such apts in immediate area of melville cobh / sq in finglas

partisan said:
3/ Rates are rising quite slowly. Plenty of payrises in between. Plenty of opportunity for saving and adapting lifestyles.
Click to expand...

sure why would someone have to adapt their lifestyle if their getting wages increases?
 
Superman said:
Somewhere between these two categories would be developers who hang onto a couple of houses in each estate/apartments in each block as they develop. Until now, it would have been better than money in the bank.
Click to expand...

Not really. Most developers wouldn't have too much cash sitting in the bank over the last few years - they'd have been better off ploughing it into their next development.

If nothing else, it would increase his cashflow and reduce overdraft costs.
 
This thread seems to me to be wildly over-interpreting a number of facts and some anecdotal evidence. In particular, the interpretation of the 300,000 allegedly empty properties seems off, and does not appear to take any account of the large number of properties vacant because
(1) owned by local authorities and requiring substantial renovation / refurbishment to be habitable; (2) owned by private individuals, otherwise as (1); (3) owned by private individual in long term institutional care [e.g. home of an elderly person no longer able to cope, family if any unwilling /unable to sell home]; (4) held as property bank - being constructively derelicted; (5) vacant awaiting new owners to move in, etc.

All of these would be significant contributors, as would abandonment of older rural homes.

An investor who actually chooses to hold a new property empty would - even in the euphoric days of 15% pa capital appreciation - be spectacularly foolish. If you choose to manage a property yourself, yes there's a little bit of hassle, but otherwise there are companies that specialise in that area. Most of the costs are tax deductible, and quite a number would arise whether the place is rented or not [management charges, maintenance...].
 
Status
Not open for further replies.
Back
Top