Current public sentiment towards the housing market?

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Firefly said:
Have to agree knowing your situation...I'd sell, but would trade up if you have the funds.

Firefly
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I would seriously struggle to pay the 9% stamp duty over 635k level -if I traded up - next level up in my area (that we really like!) is 900-1mill... out of the question for me...

Take the dosh and run??
 
Identifying a bubble is very difficult until it has burst. John P. Calverley is chief economist and strategist at American Express. He has produced a checklist for typical characteristics of a bubble:

- Rapidly rising prices
- High expectations for continuing rapid rises
- Overvaluation compared to historical averages
- Overvaluation compared to reasonable levels
- Several years into an economic upswing
- Some underlying reason or reasons for higher prices
- A new element, e.g. technology for stocks or immigration for housing
- Subjective "paradigm shift" (It's different this time)
- New investors drawn in
- New entrepreneurs in the area
- Considerable popular and media interest
- Major rise in lending
- Increase in indebtedness
- New lenders or lending policies
- Consumer price inflation often subdued (so central banks relaxed)
- Relaxed monetary policy
- Falling household savings rate
- A strong exchange rate

There can be no doubt that we are experiencing a massive bubble in house prices IMO.
 
Name : Calina
Age : 34, almost
Marital Status : SINGLE
Owner / Renter : RENTER
Advice : Investors SELL if you are depending on capital appreciation. If your rental yields are okay and you see this as a long term business, you may want to hold.
Trade uppers : Depends on what you're selling and what you're trying to buy.
FTB : Only buy if you're willing to stay in the property to wait out a crash. Do not buy for a short period "to get your foot on the ladder"
 
I would recommend that you read the recent threads on empty properties as found by the CSO. Its referred to here


My theory (predating the CSO figures ) is that:

1. Many investors piled in in the past 4 years since stamp duty changes and drove the market.
2. Many of these are empty, they rely on capital appreciation but have not "banked" that appreciation.
3. Many do not want the hassle of renting.
4. These properties are a massive market overhang. Despite the empties rent is static. If rented wholesale the rental market will tank
5. Their owners will cash out when the rises stop.
6. They will tank the market when they do...a year into the plateau/slump I will wager .
7. This tanking/illiquidity effect will be more marked in BTL ghettoes rather than mature residential areas, I have no idea where Murray lives.

Basically I think there is an oversupply of property in Ireland which will become dead obvious WHEN the price rises stop . I feel that Irish landlords have feck all pricing power , rents in the IFSC area are broadly where they were 6 years ago despite inflation. You will still pay around €1200 a month for renting that gaff in 3 or 5 years time while mortgage costs will have been higher than €1500 during most (if not all of of that time).

The bank , when you go back into the market (if you so choose) will look very favourably at someone who has €300k in cash lodged with them. The banks will be feeling very sorry for themselves in a few years and will want quality borrowers only, thanks.

In extremis you may even get the chance to buy back the gaff you are in now and still have money in the bank afterwards.

Name :2Pack
Age : 47
Marital Status : MARRIED
Owner / Renter : OWNER
Advice :
Investors SELL if you are depending on capital appreciation only. Sell if you are in the construction business and subsidising mortgage from month to month.
Trade uppers : Depends on a lot of factors.
FTB : Only buy now if you're top 20% of earners or will be in 5 years. Do not buy "to get your foot on the ladder". Prepare to save 20k - 30k or so.
 
Name : Persius
Age : 33
Marital Status : Single
Owner / Renter : Renter
Advice : Investors : no opinion (depends on circumstances), Trade uppers : no opinion (depends on circumstances), FTB : Don't Buy (unless willing to live there for next 7-8 years)
 
Never been more confident that the madness has ended. Saps galore out there (in particular the BTL brigade). The country is awash with amateur foolish greedy investors who are about to experience a hard lesson. I've forecast it before and do so again - there will be grown men crying on every corner before long. The cycle is over, to those who got in at the bottom, good luck to you, to those who burst into the party late, more the fool you.
 
Name : rgfuller
Age : 35
Marital Status : Single
Owner / Renter : Owner (Trading up)
Advice :
Investors : hold (keep your property empire if you can afford mortgage).
Trade uppers : buy (if you can sell your existing property and can afford new mortgage+1% higher rates).
FTB : buy house (if you can afford mortgage+1% higher rates - because I doubt prices will drop in the places you can afford to buy).
rent apartment (cos I can see these prices dropping a bit over a prolonged period).
 
Name : thewatcher
Age : 30
Marital Status : SINGLE
Owner / Renter : Ex Owner (profit taking) / Soon to be renter,maybe
Advice : Investors Bank the profits, Trader uppers Depends, FTB hold off
 
IMHO House Prices will continue to rise until banks stop lending ever increasing amounts of money, irrespective of general sentiment - that simple. As long as prices are not actually falling there will always be at least enough “savvy Investors” to queue in the rain for their 800 square feet of Irish paradise. However once these people can simply no longer get the mortgages the tipping point will be reached, then there will be a gradual slowdown in sales and commensurate deterioration in confidence. We all know the rest…

So far banks have achieved this exponential money supply with ever more exotic mortgage products (read slack lending criteria) and constantly made fools of people (me) predicting that the end of easy money was nigh. Now once again with the latest in a series of IRR, we have what should be the catalyst for an end to the increases but I heard one of the UB clowns on News talk saying that the institutions may not pass this rise on to the borrowers. I find this Interesting on two points; firstly how fat must their margins be that they do not need to pass them on and secondly they must reason that they are now in fact approaching the limit of what they can lend by extending terms, giving higher percentages, self certification etc. etc. etc.) - . My guess is they’ll try and keep life in the market for the next selling season while they quietly continue their exit from property themselves.
8th time lucky on my prediction?
 
Article in Moneyweek relating the the BoE rate hike yesterday and it's affect on UK house prices. Some points made are very relevant to the Irish market:

http://www.moneyweek.com/file/16373/how-will-the-interest-rate-hike-affect-house-prices.html

Rate rises are great news for First Time Buyers due to falling house prices:

"So even though first-time buyers might not be able to borrow as much, they’ll find their hard-saved deposits buy them a bigger chunk of house. Particularly when panicky buy-to-letters start offloading their portfolios as their monthly payments rise above their property's rental income."
 
StoppedClock said:
8th time lucky on my prediction?
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8th time lucky - Yes I think so!
The end of easy money is upon us. The banks have a responsibility to their shareholders to maximise profits, they're not in the charity business. It would hurt their bottom line too much and affect earnings results.
 

I heard that fool myself,who the hell do these people think they are.The whole point of having an "independent" central bank is that it is supposed to act for the good of the EU and not the vested interests.
Interest rates are rising to cool inflation,asset bubbles,excess liquitity etc. and these little fools think they can go interfering with that,it's being done for a REASON !I've a good mind to email Mr Trichet about this !
 
Further to your post watcher does anyone know what are the rules (if any) that govern the commerical banks in relation to ECB rates? Can they just ignore them if they are borrowing from cheaper moneymarkets elsewhere?
 
Clever point!
 
Name : Eurofan
Age : 31
Marital Status : SINGLE (getting married next year
Owner / Renter : Ex Owner (profit taking) / now renting at a discount
Advice : Investors ; Sell, Trader uppers ; if you can afford to, FTB ; Rent for the forseeable future, buy when you can afford (which isn't when the bank/ea/bertie etc tells you to).
 

http://www.finfacts.com/irelandbusinessnews/publish/article_10006779.shtml

Released to the media last week although not on the TSB website yet.

Key headlines

 
BEARISHBULL
25
Single
Still at home due to university(just me and parents), though will be renting in D4 or 6 soon for bargain rate.
If you bought several years ago and arent planning on moving house or moving abroad in next 15 years dont sell,If planning to trade up wait or sell now! the differential between your current and future home will be less in absolute terms after a correction , FTB- wait and you will be rewarded (incomes arent rising much and rates are rising which will curtail any more significant rises, adopt wait and see as prices can not rise much more due to tightening borrowing capacity and reduced affordability), Investors- sell/dont buy unless capital appreciation isnt your aim in investing (potential upside is limited and potential downside is massive. massive supply of property coming on stream and if you consider it your pension ask yourself how will the massive supply being built every year affect you in 20/30 years time in terms of rent and price) Recent FTB's- god love ya! cross your fingers...and legs ...etc
 
gearoidmm said:
Released to the media last week although not on the TSB website yet.
Click to expand...

Note that the June ESRI/PTSB report relates to market activity in March/April

The ESRI/PTSB report is based on mortgages drawn down when final contracts are signed. This means that there is approx 10 week lag on sale agreed prices. Add another month for report preparation and you have data that is three to four months old at the time of release.
 
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