Current public sentiment towards the housing market?

[ivuernis]

Did we not learn from the communists that such forms of housing (out-of-town, large-scale complexes with no facilities) are recipes for social disaster?

Obviously not!

 

[phoenix_n]

Don't forget immigration when considering rising populations. The population of the world continues to rise rapidly and there will always be an inflow of migrants from poorer countries to richer ones (legally or illegally). This will have an affect on the housing market, even if these people only enter the equation as renters. Then also consider the fact that most households now use two incomes to pay off a morgage rather than one.

So maybe it is true that the price of a house in relation to the average wage in a performing economy is now much higher than it was in the past, and it will remain at this higher level in the medium term. I hope not as I believe it will have serious social implications down the line (whatever about economic ones). But no-one knows.

Rental controls will be put in place similar to in Germany.

There, as a landlord, you can only rise the rent in line with agreed principles and any abnormal rise can be disputed by the tenants. You have a right to reside in the apartment for life. It can take a whole year to evict a tenant that is not paying rent. Its common for a seller of an apartment to offer money to the sitting tenant to vacate as selling property without a sitting tenant is more profitable. I know of one such offer where the seller offered the tenant 20K to vacate. They didn't.

 

[Guest107]

So maybe it is true that the price of a house in relation to the average wage in a performing economy is now much higher than it was in the past, and it will remain at this higher level in the medium term. I hope not as I believe it will have serious social implications down the line (whatever about economic ones). But no-one knows.

It has historically been 4x the average wage in Ireland (thats the average property) but I would not think it will go there again. We have probably moved to 5x or 6x permanently. Our taxes are somewhat lower and interest rates are lower than they used to be and we have far more disposable income (relative to gross) than 25 years ago where you paid 60% income tax after £10,000 salary and when mortgage rates were 15-20% out of that take home pay.

The problem in Dublin is that the house price is 10x the average Dublin wage and the average house price in Galway is something like 11x or 12x

I can see massive pay rises coming up for all of us to settle things down , just as the soft landing happens

 

[Guest126]

HEY - the communists had great facilities, much better than the sh!te we are being offered on new developments in Cork (usually the fact that there is a pub and a chipper within two miles constitues a prime location)!

 

[Dave_Post]

When you have statements suggesting that places like The Belfry will be akin to communist style wastelands, is it any wonder that 'the sheep' you all like to smugly criticise think you are all nuts and to be ignored.

 

[autumnleaf]

However, in Galway nobody takes the lower wages into account when discussing house prices. “I know it’s a rip-off, but it’s a bargain compared to what you’d get in Dublin” is the attitude.

 

[CelloPoint]

When you have statements suggesting that places like The Belfry will be akin to communist style wastelands, is it any wonder that 'the sheep' you all like to smugly criticise think you are all nuts and to be ignored.

Yeah just ignore us. Maybe it's not sheep we're talking of, but ostriches with their heads in the sand.

 

[CelloPoint]

Was talking to an old friend of mine down the country who told me ostrich farming has really taken off here in Ireland.

 

[phoenix_n]

However, in Galway nobody takes the lower wages into account when discussing house prices. “I know it’s a rip-off, but it’s a bargain compared to what you’d get in Dublin” is the attitude.

If i was still in the market for property the actual only place i would consider to buy would be Salthill and failing that Roundstone. I think Salthill will become the Florida of Ireland, or the bouremouth(?) of the UK as it will be where many retirees will head to. The increase in temperatures in southern europe coupled with water shortages will make ireland, with its increasing warmer summers, a desirable place to retire to. Interesting but saw on some other thread here someone who resides in France looking to buy here to avail of our milder summers.

(Talking of water shortages - Dont know if anybody follows the spanish market here but developers were allowed to go ahead with a development south of toledo even though they know that they cannot meet projected water demand)

I tried to get a house in the salthill area earlier this year but had left it 6 months too late. I dont foresee a massive correction in Salthill. Other areas will though.

(Dont ask me how i know. I knew in 99 that prices were going to go up as property was very cheap and we were playing catch-up to europe. (i of course didnt heed my own advice as more interested in chasing girls than investing). I know that the market now has stopped and that you will soon see threads on how to declare bankrupcy. And i know that salthill will become the gem of europe. Just like how i knew i wouldnt make that flight the other day.)

 

[CelloPoint]

If i was still in the market for property the actual only place i would consider to buy would be Salthill and failing that Roundstone. I think Salthill will become the Florida of Ireland, or the bouremouth(?) of the UK as it will be where many retirees will head to. The increase in temperatures in southern europe coupled with water shortages will make ireland, with its increasing warmer summers, a desirable place to retire to. Interesting but saw on some other thread here someone who resides in France looking to buy here to avail of our milder summers.

(Talking of water shortages - Dont know if anybody follows the spanish market here but developers were allowed to go ahead with a development south of toledo even though they know that they cannot meet projected water demand)

I tried to get a house in the salthill area earlier this year but had left it 6 months too late. I dont foresee a massive correction in Salthill. Other areas will though.

What's the traffic situation like in Salthill these days? I heard you can't get in or out of the place and that the whole place is ruined by big ignorant complexes being built left right and centre. Not to mention the scarred Galway landscape due to one-off housing pitter-pattered all over the place as if the planner had just taken up modern art.

Having said this, I don't think anyone is disagreeing that some areas will hold their values better than others.

 

[tententwenty]

While over in the UK, Britons are going broke in record levels...

HSBC today warned that 'serious' and 'excessive' levels of consumer debt in the UK was a growing issue.

While the bank said it has deliberately reduced its share of the unsecured lending market, loans and credit cards, as a result.

However, the decision looks like closing the stable door after the horse has bolted. There is a raft of evidence that high street banks have been guilty of reckless lending over the past 4-5 years.

 

[Guest107]

If i was still in the market for property the actual only place i would consider to buy would be Salthill and failing that Roundstone. I think Salthill will become the Florida of Ireland, or the bouremouth(?) of the UK as it will be where many retirees will head to. The increase in temperatures in southern europe coupled with water shortages will make ireland, with its increasing warmer summers, a desirable place to retire to. Interesting but saw on some other thread here someone who resides in France looking to buy here to avail of our milder summers.

My dear young fellow. The icecaps will have melted in the self same heat so Salthill will be UNDER WATER by then. Knocknacarra will be the new seafront

I tried to get a house in the salthill area earlier this year but had left it 6 months too late. I dont foresee a massive correction in Salthill. Other areas will though.

I could have bought this Salthill house in Ard Na Mara (right opposite national school) for about €240k-€250k 5 years back but got a better deal.

[broken link removed].

Ard na Mara, Salthill, Co Galway. Three-bed semi-d with a two-bed apartment. Withdrawn: €410,000.Sold after €430,000. Agent: O'Donnellan & Joyce Auctioneers

Now they are about €700k or so. The only people who can afford them are property developers though

 

[tententwenty]

And a slightly acerbic take on the BoI report [broken link removed]...

Dr Dan McLaughlin, well known economist, said he was increasing his predictions for house price increases for 2006 up to 12%, saying that wage increases, good employment levels, and a rapid increase in population levels fuelled this increase. Dr McLaughlin however fails to account for the fact that most wage increases were in the public sector, not the far larger private sector, and that a good deal of population growth can be attributed to transient immigrant population, currently estimated to comprise 10% of the population, or 400,000 people.

 

[Raskolnikov]

So the inexorable march of the Irish property market moves on (prices up 1.2% for the month of June, [broken link removed]), despite contradictory anecdotal evidence from some posters here. This report comes on the back of comments from the Bank of Ireland stating house prices will increase beyond the 3% years target to 12%.

The widespread coverage this recieved from the news media will blow all the recent bearish sentiment out of the water. The FTB is faced with the fact that . .

• Property prices are STILL rising at this very moment.
• They're looking increasingly likely to RISE in the future.

Now, the assumption of many posting on these forums is that FTB'ers (and indeed, "investors") are rational purchasers (this should be a reasonable assumption given that a house is likely to be a person's most expensive purchase, therefore it should be researched vigourously). As we have already seen though, this is not the case. Driven by the general collective mania of the population, the media and the extreme ignorance concerning the financing of property, we are as a nation now obsessed with the procurement of property. This fallacy, we can attribute to the general public, given that the housing market is still on the up.

I think that we are most definitely entering into uncharted territory here. How can anyone try to apply rational theory to an irrational market? What I do know however, is that internal (the coming budget) and external (the global economy and ECB rates) are going to be the factor that determine where the property market will go. The nightmare scenario would be

• A budget giveaway, ie. abolition/cut back in Stamp Duty, reintroduction of the first time buyers grant, more resources for affordable housing, etc.
• A downturn in the Eurozone economy (not altogether unlikely given current pessimism in the global economy) and the continued high/medium growth in our own. Subsequently, we could rates actually going down.

If this happens, house prices will rocket yet further and any hope we have of "soft-landing" will be absolutely anihilated.

 

[Bedsit]

[FONT=Verdana, Arial]There was an article in the Irish Independent Business section today on Credit Growth in the Irish Economy (http://www.unison.ie/irish_independent/stories.php3?ca=184&si=1663303&issue_id=14437). There was an intriguing paragraph which I quote below:[/FONT]

"Private sector credit has now grown by a monthly average of €5bn during the first six months of 2006, bringing total outstanding credit to €288.6bn. The Central Bank said that the June rise would have been even larger had it not been for a €2bn increase in securitised residential mortgages, which are excluded from total private sector credit figures. If these are included, the annual growth rate for private sector credit would have been 31.4pc in June."


[FONT=Verdana, Arial]Is this a reference to people getting a top up on their mortgage as the price of their house may have gone up substantially since they bought?[/FONT]

 

[thewatcher]

[FONT=Verdana, Arial]There was an article in the Irish Independent Business section today on Credit Growth in the Irish Economy (http://www.unison.ie/irish_independent/stories.php3?ca=184&si=1663303&issue_id=14437). There was an intriguing paragraph which I quote below:[/FONT]

"Private sector credit has now grown by a monthly average of €5bn during the first six months of 2006, bringing total outstanding credit to €288.6bn. The Central Bank said that the June rise would have been even larger had it not been for a €2bn increase in securitised residential mortgages, which are excluded from total private sector credit figures. If these are included, the annual growth rate for private sector credit would have been 31.4pc in June."


[FONT=Verdana, Arial]Is this a reference to people getting a top up on their mortgage as the price of their house may have gone up substantially since they bought?[/FONT]

THE IRISH !
Once the biggest drinkers in europe,now the biggest debtors in europe.
Where a jumbo mortgage is like a status symbol to be envied by others.
I'd say the rest of europe are laughing their asses off at us !.

 

[Guest126]

I presume it means that the banks have securitised the mortgages (i.e. sold them as securities to international institutional investors)?

 

[phoenix_n]

My dear young fellow. The icecaps will have melted in the self same heat so Salthill will be UNDER WATER by then. Knocknacarra will be the new seafront

I havnet been called young fellow in a few years so thank you kind sir.

You may mock at my predictions but do not underestimate what a degree change in temperatures can make. Someone else mentioned traffic etc in salthill. I would not be concerned with that as eventually traffic will be mostly banned from alot of the areas (can be fixed in a day with a council ruling) and the views and the sea will never change.(in our lifetime anyhow)

But like all nouveau predictions, they are always mocked at intially owing to (and it is understandable) ignorance.

 

[Guest107]

The Central Bank said that the June rise would have been even larger had it not been for a €2bn increase in securitised residential mortgages, which are excluded from total private sector credit figures.

Oh **** **** **** !!!!!!!!!

It means that €2bn a month of CREDIT is being 'hidden' with the connivance of the central bank , thats €24Bn a Year or 20% of GDP

There was very little securitisation of mortgages 10 years ago, this information gap is recent.

 

[thewatcher]

I presume it means that the banks have securitised the mortgages (i.e. sold them as securities to international institutional investors)?

But as someone else said earlier in the thread more than likely these are cherry picked "safe" mortgages (low Ltv) as international investors are not stupid,leaving the irish banks with the much riskier one's 100%,interest only etc.