my point of view exactly. nicely put,by the way.StoppedClock said: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?
bearishbull said:Interesting, Irish house prices didnt rise in real terms between 1979 and 1995! Investors who bought then were in for the rental yield but have now also gotten massive capital appreciation,they deserve the capital gains!
JohnBoy said:I wonder if the Irish media will be able to talk the country into a property slowdown just like the UK media did about 3/4 years ago. Then the UK media began to run increasingly bearish articles on the state of the property market and this coincided with the BoE tightening the monetary screws (just as the ECB is doing now).
I was living in the UK then and the mainstream press had become obsessed with the upward trajectory of property prices. As with present day Ireland however, the property bears were moving from the fringe (the Economist & the FT) to the mainstream (the Daily Mail etc).
What appears to have happened then was a suddend realisation by both buyers and sellers that the go-go days may be drawing to a close and in turn this seems to have prompted some more realistic pricing by both parties. Consequently activity slowed and the balance of power shifted in favour of the buyers - the country did see some house price deflation but no crash as the economy was still ticking along nicely. Since then house price inflation has substantially moderated and the country is getting used to house price gwoth of inflation + 2%/4%.
I an just wondering if all this talk of a property crash in the Irish media may actually precipitate a slowdown before external factors (such as interest rates of a global economic slowdown) really begin to bite? Certainly anecdotal evidence (presented in earlier posts) seems to indicate that this indeed may be the case.
murray said:Fully agree ! well put....
thewatcher said:If this figure for 275,000 empty properties which i find hard to believe myself is even remotely true then you can forget about a soft landing.
room305 said:It's true. The census enumerators make an explicit difference between a house where they couldn't get an answer and a house that is vacant. For example, they may talk to neighbours and discover nobody has lived there for over three months etc. Having spoke to several enumerators working in several different areas - many of whom did the same job during the last census - their two main comments were:
- My God, just look at how many new houses there are!
- Christ, just how many of them are empty?
I know one guy who having completed the census practically strong-armed his father into selling an investment property he owned. His thinking was that with that many vacant properties, a crash is pretty much unavoidable.
Even allowing for 10% margin of error, it is still a staggering number of empty properties. Most people are simply refusing to believe it and assume there is an error.
beattie said:I have no sympathy for these flippers as they are trying to make money in a market which they do not fully understand. I wonder will many of them cut and run in the short term or will they try and hold out for some sap to come along and bail them out at an inflated price
Wollie said:It annoys me to think that of the two big investment decisions I made in the 1990s, one to start up my own business, the other to buy a new house, the house has probably increased in value faster. I put my whole life into one investment, while I just sat on my backside for the other, yet the one where I just sat back has probably done better. That can't be right.
Despite industry sources having described the Irish property boom as "phenomenal", recent anecdotal evidence from the Irish Auctioneers and Valuers Association (IAVA) sparked controversy by suggesting some properties in popular areas of Dublin had to reduce their prices dramatically in a bid to clinch a sale.
Fintan McNamara, IAVA chief executive, said a number of its members had reported a significant drop in some property prices.
"An average three-bed semi in the inner suburbs of Dublin that was selling at Easter for 700,000 (£479,956 euro) is now selling for 20,000 euro (£13,714) less," said Mr McNamara.
And those trying to sell recently constructed homes are having the same problems with the owners of a three-bed terraced house in AddisonPark, Glasnevin, who have been asked to reduce the priced by a massive 75,000 euro (£51,429) to generate interest, according to the Institute's spokesman.
Duplex said:Bit out of the blue?
room305 said:A case of trying to talk the market out of going supernova?
[LEFT said:Hibernicatio[/LEFT]]Would it be reasonable to assume that when the market crashes, or a period thereafter, whichever Government is in power would be under pressure to reduce re-entry costs such as stamp duty etc?
bearishbull said:Untill i see several houses in such location sell for less than a comparable house did previously i wont beleive a correction is underway.
bearishbull said:Why does myhome leave the two different prices up on its site?
That telegraph story is just a rehash of the irish indo story a few weeks ago. Asking prices got ahead of themselves and those wanting to sell soon have be forced to curb their asking price to lure the viewers in in the quiet summer season but prices are still growing im sure. Untill i see several houses in such location sell for less than a comparable house did previously i wont beleive a correction is underway.
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