Current public sentiment towards the housing market?

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Munich also has a stonkingly good public transport system so your two adult FTB unit do not 'need' to live out the back of Ballivor and run 2 cars either, they can move to Starnberg or Passau or somewhere.

If they did live out the back of Ballivor there would be a fabulous S-Bahn service nearby. It goes out about 30 miles from the centre. Dublin is a bloated mess with feck all proper public transport. Its about 3 times the physical size of Munich with the same population. Each U-Bahn and S-Bahn train line would have to be 3 Times Longer on Average to cover the same number of people . Also remember that Muicnh built this system 30 years back and have now paid for it., Dublin cannot even agree a route for the first tube line to the Airport :(

Thats why I consider that Dublin works ONLY as a walking city (D1/D2/D8) and if its too long to walk its not a proposition for me at all :( Munich is also a lot safer and has a lot less street scumbaggery which explains why the elders move back into town while we gate them in instead.

All in all its a hell of a lot better than the mindless semi d sprawl that is the entire Pale nowadays.
 
2Pack said:
Munich also has a stonkingly good public transport system so your two adult FTB unit do not 'need' to live out the back of Ballivor and run 2 cars either, they can move to Starnberg or Passau or somewhere.

If they did live out the back of Ballivor there would be a fabulous S-Bahn service nearby. It goes out about 30 miles from the centre. Dublin is a bloated mess with feck all proper public transport. Its about 3 times the physical size of Munich with the same population. Each U-Bahn and S-Bahn train line would have to be 3 Times Longer on Average to cover the same number of people .

Thats why I consider that Dublin works ONLY as a walking city (D1/D2/D8) and if its too long to walk its not a proposition for me at all :( Munich is also a lot safer and has a lot less street scumbaggery which explains why the elders move back into town while we gate them in instead.

All in all its a hell of a lot better than the mindless semi d sprawl that is the entire Pale nowadays.
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ur gonna get the thread locked by going off topic !
 
phoenix_n said:
ur gonna get the thread locked by going off topic !
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:D

Factors such as properly functioning mature public transport systems are of great importance to some of us when considering our 'Location Location Location' inputs into our house price sustainability models.

Majorly Car dependent peripheral communities at the outer edge of communter belts nationally are at a higher risk of a sharper correction that elsewhere which is why I posited '2packs 2Band effect' in the past.

Public Transport infrastructure backlogs are so great in Ireland that it will take 30-40 years to address the problem in the greater Dublin area. Munich (conveniently) is a perfect example of what Dublin is not.

Dry Nuff For Ya Head ????
 
Afuera said:
I think it's around this time that we'll see 40 and 50 year mortgages being launched on the market as an attempt to address the afforability wall being reached.
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Actually Afuera, talk of 50 year mortgages is a complete red herring. When you enter into repayments over such a long period of time, good old mathematics kicks in and the monthly repayments (i.e. the 'new affordability') are actually not much different from smaller repayment periods.

Example
€250k over 35 years @5.0% : €1262/mth
€250k over 50 years @5.0% : €1135/mth

There is essentially no difference in 'affordability'.
 
Raskolnikov said:
More sensationalist tosh from the Indo, a 1/4% interest hike will put the squeeze on mortgage holders, but certainly won't "cripple" them like the Indo is suggesting. It took interest rates to rise to over 4% in the UK before the skids were put on the market there. 3% in the scheme of things, is still reasonable.
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Your analysis of the UK market reaction to interest rates is incorrect. It did indeed take rates to go over 4% in the UK to put the skids on property price increases but the starting point was 3.5%. Rates went from a bottom of 3.5% in Nov 03 to a peak of 4.75% in Aug 04. This was only a 1.25% increase and as relative measure was only a 30% increase in interest rates.

http://news.bbc.co.uk/2/hi/business/5240770.stm

By the end of today we'll have gone from 2% in Nov 05 to 3% in Aug 06. A 1% increase or 33% increase in interest rates.
 
So to give an example: Property in Munich costs on average about ?3000 per square meter. So a 70 square meter 2 bed appartment would cost around ?210,000 (add 4 to 8% transaction costs). This is for property within the city limits and there is not huge variation to the same extent as Dublin. Munich has a similar population to Dublin and the economy is strong and mixed with many multinationals. It's the third biggest city in Germany and one of the wealthiest. The banks are not as generous as the irish banks - traditionally requiring 20% deposit, though this has been dropping to between 5 and 10% in the last few years.

I think wages in Munich are similar to Dublin, though the tax burden is higher. Offsetting that is the fact that the general cost of living is lower. Rents are about ?11 per square meter. So the same property would cost about ?770 to rent. Germany in general has a low birthrate and Munich has a very high percentage of youngish singles. People having families tend to move out of the city. Older people move back in.
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Agree with much of this. There is no value whatsoever to be had in Dublin.

Persius said:
Now based on these sort of comparissons I think you can make some sort of judgement on the relative value in Dublin property. However I think cities like Vienna, Rotterdam, Helsinki, Copenhagen would make for better comparissons with Dublin (or the same countries for Ireland).
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I'm laughing at the comparison of Dublin with Vienna, Rotterdam, Helsinki, Copenhagen. A population comparison is certainly valid, but in terms of cultural sophistication and taste we are still muck-savages (just take a look at Dublin, Galway, Cork on a typical Saturday night and you'll get a flavour for the kind of 'culture' of the neuve riche).

Irish people were always good hard workers and are prepared to roll up their sleeves and get on with the job. Unfortunately, after a hard day's work, they'd enevitably end up down in the pub and drink themselves silly. I think much of the hard graft was done in the 80s and 90s and we're all drinking ourselves silly thinking everything will be all right in the morning. We've a massive hangover coming our way and we're just going to have to bear it.

There's a cultural identity crisis in Ireland at the moment and given the amount of bling-bling cars and awful clinical looking houses around the place, you really get a feel for how ignorant and unclassy Irish people really are. The only culture we have in this modern Ireland is that of consumerism and a constant desire to feed the senses. Dublin is a hell of a long way from Vienna, Rotterdam, Helsinki, Copenhagen, Sydney, Melbourne - and that's just culture; don't get me started on infrastructure, economic governance and public accountability...
 
Very good 2Pack. What about D4? is it not close enough to town for you?

As suggested, I think by Brendan, in another post. Which risk are people willing to take..the fact that house prices will drop and you'll be able to buy cheaply, or will they stay level and even rise?

To my mind I'd buy because if a FTB is stretched now, and prices continue to rise, then all hope of buying is gone. Most people do not buy their first home with a view to investment..they buy it to live and raise a family in. Therefore, they are talking about staying put for 5 yrs. or more. Who knows what will happen in the market during that time?
 
Look at the result in the UK, bad debts have incresed dramaticall despite the rates being historically low there. We owe as much money per person as they do. Their interest rate is 4.5% base .

At that historically low level (for us and for them) we nevertheless find that in the UK in the past 2 days alone we see the following reports coming out.

1 in 5 'contemplates' declaring themselves bankrupt.

Barclays Bank Bad Debt Soars

Lloyds TSB Bank Bad Debt Soars

(and D4 is too far out for me as is D6 :D)
 
Good point,when u go looking 4 a mortgage,u look at repayment not on how much u borrow.
This is the primary reason why property market has boomed not migration/demographics,economic boom etc.

Example,when I was back in Ireland over the summer,found that by borrowing $400k would only cost me $1300 pm(introductory offer at 2.75%) from 1 of the banks
in australia variable rates from financial institutions average 7.8%(base rate 6%)-on same mortgage cost $3200

Doesn't take a genious to work out what will happen in Ireland if rates go up and maybe the 1% increase already sinceb December is enough to stall market
 
soma said:
Actually Afuera, talk of 50 year mortgages is a complete red herring. When you enter into repayments over such a long period of time, good old mathematics kicks in and the monthly repayments (i.e. the 'new affordability') are actually not much different from smaller repayment periods.

Example
€250k over 35 years @5.0% : €1262/mth
€250k over 50 years @5.0% : €1135/mth

There is essentially no difference in 'affordability'.
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It's still a 10% reduction in the cost of the monthly replayment (which could be the difference between someone being able to afford to buy or not). Also, banks make super profits off those long term mortgages, so I'd say they could offer a fairly competitive rate on it. It's been used elsewhere so I wouldn't rule it out just yet.
 
liteweight said:
To my mind I'd buy because if a FTB is stretched now, and prices continue to rise, then all hope of buying is gone. Most people do not buy their first home with a view to investment..they buy it to live and raise a family in. Therefore, they are talking about staying put for 5 yrs. or more. Who knows what will happen in the market during that time?
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"Prices go up in the long term", "rent is dead money", "safe as houses", "can't raise a family in a rented home", "prices can't crash where will people live", BUY NOW or "all hope of buying is gone"

What dull, repetitive, un-thinking dogma.
 
liteweight said:
To my mind I'd buy because if a FTB is stretched now, and prices continue to rise, then all hope of buying is gone. Most people do not buy their first home with a view to investment..they buy it to live and raise a family in. Therefore, they are talking about staying put for 5 yrs. or more. Who knows what will happen in the market during that time?
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This is where you are wrong. This is what people *want* to do. Unfortunately, certainly in Dublin, a lot of people are not buying their first home with a view to raise their family in. It's because a) you can't raise a family effectively in a one or two bedroomed apartment and b) you can't afford a three bedroomed apartment unless you are earning far, far in excess of the average salary. The primary reason why I will not buy is because about the only thing I can afford within 30 minutes drive of work is a onebedroomed box.

Personally, under the circumstances between the risk of prices going up versus the risk of prices going down, I'd prefer to rent a reasonably decent place with some modicum of space in the short term because on balance, given the average ratio of salary to final house price in this country, I can't see the current gravy train lasting indefinitely. Yes it's a risk, but it's no more of a risk than possibly getting priced out of the market and there is some evidence to suggest that it may be less of a risk.
 
These cliches are wearing a bit thin alright. They certainly smack of intellectual dishonesty of the most delusional kind. These types of mantras are also evident in various historical manias of one sort or another.
 
Howitzer said:
Your analysis of the UK market reaction to interest rates is incorrect. It did indeed take rates to go over 4% in the UK to put the skids on property price increases but the starting point was 3.5%. Rates went from a bottom of 3.5% in Nov 03 to a peak of 4.75% in Aug 04. This was only a 1.25% increase and as relative measure was only a 30% increase in interest rates.

http://news.bbc.co.uk/2/hi/business/5240770.stm

By the end of today we'll have gone from 2% in Nov 05 to 3% in Aug 06. A 1% increase or 33% increase in interest rates.
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True; but 4.75% on a sum is A LOT more than 3% on the same sum even if the percentage increase is less as in the case you pointed out.

The point I'm trying to make is that it's going to take more than a 1/4% increase in rates before it makes a difference to house prices. This isn't just my opinion, it's the opinion of Dan McLaughlin of the BOI too, who we grudgingly have to admit, is usually right in his forecasts.
 
FYI, Dan McLauglhin has been consistently wrong with his forecasts for interest rates.
 
Raskolnikov said:
The point I'm trying to make is that it's going to take more than a 1/4% increase in rates before it makes a difference to house prices. This isn't just my opinion, it's the opinion of Dan McLaughlin of the BOI too, who we grudgingly have to admit, is usually right in his forecasts.
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I'd have to laugh at that :rolleyes:. I wonder where he got his PhD from? Maybe it was from "Pacific Western University", the the same place where the previous government chief scientific advisor Barry McSweeney got his from.
 
Calina said:
This is where you are wrong. This is what people *want* to do. Unfortunately, certainly in Dublin, a lot of people are not buying their first home with a view to raise their family in. It's because a) you can't raise a family effectively in a one or two bedroomed apartment and b) you can't afford a three bedroomed apartment unless you are earning far, far in excess of the average salary. The primary reason why I will not buy is because about the only thing I can afford within 30 minutes drive of work is a onebedroomed box.

Personally, under the circumstances between the risk of prices going up versus the risk of prices going down, I'd prefer to rent a reasonably decent place with some modicum of space in the short term because on balance, given the average ratio of salary to final house price in this country, I can't see the current gravy train lasting indefinitely. Yes it's a risk, but it's no more of a risk than possibly getting priced out of the market and there is some evidence to suggest that it may be less of a risk.
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This pretty much my thoughts too. I rent in a 3-bed house in Darty and I walk to work. Risk is the number one factor that must be considered when venturing into the uncharted waters of the Irish property marked. Risk is huge and the more we have debates like this (approaching 50k hits already), the edgier the market sentiment gets, the greater the uncertainty and the greater the risk.

I earn a good salary, but to be quite honest, I'm not prepared to hand it over to a landowner for the privilidge of living in the 'back of Balivor' (to quote 2Pack) and commute to work for 4 hours a day. I'm happy enough in Ireland at the moment in the sense that there is lots of work, but I am highly mobile and am in a position to up and leave with a month's notice which I will do if the economic storm clouds come our way.

The greatest fools are the ones coming out with all the mantra that walk2dewater describes:
walk2dewater said:
"Prices go up in the long term", "rent is dead money", "safe as houses", "can't raise a family in a rented home", "prices can't crash where will people live", BUY NOW or "all hope of buying is gone"
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Such people have probably been reading too many estate agent brochures (indeed the Irish Times property section!)...

Anyway, the ladz, boyos and cute-hoors are all off in their villas in Spain. They've made their millions (in many cases 100s of millions) and they certainly won't be back to sort out the mess they left behind.
 
1 point missing from this debate is where is the future demand going to come from.

Presumably its' so called 'generation Y' people born between 1978 to 1994.

They recently published a study in Australia which concluded that this generation only wants instant satisfaction not long term values/commitment.

On housing,they will rent close to the city(which has driven apartment building in sydney),there not interested in buying.

Why are Irelands' generation Y any different.

On another matter why is rent dead money?
I don't matter paying somebodys mortgage if the yield is 2-4%

I can never understand this and would be happy renting 4 the rest of my life(gives me flexibility,choice and less financial pressure)

This would be the same if I had kids where I could afford to rent in any area of sydney,not the case if I choose to buy
 
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