Current public sentiment towards the housing market?

[Calina]

Really? Do you mean that? How about "overpriced dump for quick sale"

My point is that there are vendors already out there wanting to sell with little or no buyer interest. Estate agents don't appear to have adapted yet to the situation. They might need to dig out and dust off the "price-reduced" and "must sell" boards that have been in storage for the past ten years or so!

Possibly - and I'm by no means sure of this - no one wants to make a call until we're out of the so called quiet season. I daresay there are plenty of conversations that include the sentence "Yeah, the market is kind of quiet at the moment; it'll pick up in September, it always does."

 

[CelloPoint]

Dare I even mention the backlash we may have against foreigners who may be seen to be taking Irish jobs ....

Slightly off topic, I know, but this is somthing that David McWilliams is predicting - the blame game will go on for years whether it's against immigrants, the government, the banks, estate agents, politicians, landlords etc.

Immigrants just won't put up with it, and they'll move to the next building site (along with young Irish people).

Anyway, the economic outlook is all irrelevant to the high-flyers who have made their money by riding the Irish property wave. They won't be sticking around in a gloomy and depressed country with unemployment and miserable people. South of France or Croatia sounds like a nice spot for the newly-found-wealth Irish property tycoon.

 

[phoenix_n]

When I think about the Irish property market it reminds me of the reality TV stolen car chases they used to show on the US TV programme - Cops.

Bad boys. Bad boys. Whatya gonna do.....

 

[Duplex]

I reserve my ire for the government that allowed narrow sectional interests gain from a restrictive planning permission regime. The whole idea of planning control is a restriction on the operation of the free market. If planning restrictions did not exist then well resourced cartels would not be able to monopolise supply in the market, allowing them to price fix at their leisure.

The issue of planning permission is a gift, granted by the democratically elected government on behalf of society. The intention is that land use should be controlled in such a way so as to benefit all the people not a tiny minority who, build, lend and administer this artifice called the housing market. This cabal are utterly unproductive leaches.

Adam Smith's famous dictum:

"People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices."

Rant over.

 

[kellyiom]

Three words : Interest Rate Rises

You make a good point on rates here vs US but their rates have stalled and ECB rates are rising so they may converge.

hmm true but these are all forward looking aren't they. Even back in 2001 we knew rate rises would be ahead but the price of properties already discounted this (or buyers chose to ignore this ;-) In %age terms, rates have already climbed dramatically and overall credit quality hasn't deteriorated that much. Even some fairly hefty rises will still leave property affordable to the large majority. It's a bit grim in the states but this is offset by the better refinancing that's taken place. In reality, speculators/investors have a shortage of options for their money worldwide. GDP growth in the states is about 6.5%, euroland 4.5% and climbing and while we will see some people hurt, I just don't think this is such a scenario where we'll see a crash. A jolt maybe. The liquidity worldwide has compressed spreads in virtually every asset to such a degree that formerly risky assets are bid very strongly. Even the early 90's crash, and that was a crash! just looks like a blip, just a few years later. For me, moral of the story is just buy a house you like just in case you're lumbered with it and then it won't matter!

 

[CN624]

2 shop assistants on low money sell their average house (after missing 3 mortgage payments in 12 months)in order to buy a 2,500 sq foot house with a lake view. Wife wants BMW or will leave the husband because her friend has one. Wife wants the BMW, and wants to stop working. She wants to be a “kept woman” If she doesn’t get the life she thinks she “deserves”, she will leave.

Just to be clear, the shop assistant wants her husband (a shop assistant) to buy her a BMW?

Does this not explain how crazy as a nation we have become.

 

[Duplex]

hmm true but these are all forward looking aren't they. Even back in 2001 we knew rate rises would be ahead but the price of properties already discounted this (or buyers chose to ignore this ;-) In %age terms, rates have already climbed dramatically and overall credit quality hasn't deteriorated that much. Even some fairly hefty rises will still leave property affordable to the large majority. It's a bit grim in the states but this is offset by the better refinancing that's taken place. In reality, speculators/investors have a shortage of options for their money worldwide. GDP growth in the states is about 6.5%, euroland 4.5% and climbing and while we will see some people hurt, I just don't think this is such a scenario where we'll see a crash. A jolt maybe. The liquidity worldwide has compressed spreads in virtually every asset to such a degree that formerly risky assets are bid very strongly. Even the early 90's crash, and that was a crash! just looks like a blip, just a few years later. For me, moral of the story is just buy a house you like just in case you're lumbered with it and then it won't matter!

The continuance of the liquidity bubble is dependent on the willingness of foreign governments to underwrite American consumer and government debt. The US is teetering on the brink, the economies that take up the baton after the Americans have finished their consumption binge will have cheaper workers willing to work in poorer conditions than their western counterparts. Survival of the fittest, most productive, innovative and hardworking.

 

[binman]

Count me in......I make no bones about where I want things to go. The bigger and harder the coming crash the better.
...
increasing affordability for the masses. Hey think about, if please God, the crash is as hard as I hope it is we'll all be able to buy and live in D4 and be happy ever after.

I presume your tounge is firmly in your cheek. The reasons mentioned by whathome:

Rising fuel costs, rising electricity prices, rising gas prices, rising interest rates

To which I'd add rising unemployment and the associated falling consumer spending (after the SSIA boom) will lead banks to firmly tighten their lending policies.

I'm sure you all recall the 2.5 times main salary / 1 times lower salary rule that used to operate back in the days of 6 to 7% mortgage interest? I can forsee these rules, or a variation on them, being re-imposed (either by the banks themselves or by the Central Bank)

When the crash comes, your dream home might be 20% cheaper to buy than it is now, but you will not be able to borrow anything like as much as you can now either.

 

[walk2dewater]

I think cheaper housing would be great for people who cant buy at current prices. I know lots of people who would benefit from cheaper housing. ..

how compassionate.

Would I like to see houses on my road being sold for 100K less than what I paid, of course not. ..

oh, not that compassionate then.

It seems to me that the people who are predicting doom and gloom here have a vested interest in the market crashing.

yes some do. They want cheaper house prices, just like they want cheaper milk at the shops.

 

[walk2dewater]

When the crash comes, your dream home might be 20% cheaper to buy than it is now, but you will not be able to borrow anything like as much as you can now either.

20% off would hardly make a dent. Sure, to roll us back to 2001 prices would only be a 50% discount.

but you will not be able to borrow anything like as much as you can now either.

Who needs to borrow much when you've got little or no debt, a pile of cash, and vendors flogging their properties for ever greater discounts? Jumbo mortgages are for suckers.

 

[bogwarrior]

I certainly don't want anything to crash and would love if everything eased off and realigned itself so we all could live happily ever after.

as a matter of interest, how would this scenario play out? ie what is the 'best case' scenario for the overall economy in a slowdown?

if house price increases level off and start to track inflation I'd imagine we're still going to see large-scale dumping of investment property ( the capital appreciation is what is driving the market, not the yields).
The building boom would certainly slow down, putting god knows how many out of work. This would in turn lead to many of the foreign workers employed in the building trade to move on to greener pastures, resulting in even more empty properties. And the whole thing goes cyclic with more layoffs - this time in the industries that service the building trade ie shops, diy stores, estate agents etc

So, does anyone have an idea how an 'optimal' slowdown would play out?

I won't be crying into my tea for any investor who gets burned in a slowdown, but I'm afraid of the consequences for the rest of the country.

 

[room305]

So, does anyone have an idea how an 'optimal' slowdown would play out?

I can only imagine this would involve the bulk of specuvestors hanging on to their properties with very few selling them. Houses prices would continue to rise in nominal terms but would fall ever so slightly in real terms. The market would achieve the circa 50% correction in real terms that is required, over a 20 to 30 year time frame.

Likely? Yeah, I won't be putting too much money down in Paddy Power on that scenario either.

 

[fatmanknows]

The beads of perspiration from those who bailed in against all logic beginnig to drip quicker and quicker.

Bring it on.......my vulture fund is in place ......won't be too long now before the first carcasses are found.



Anybody watched 'Treasure of Sierre Madre' recently. Dusted it down on the video shelf the other day. Cracking View. Human nature does'nt change much down the years.

 

[Duplex]

I can only imagine this would involve the bulk of specuvestors hanging on to their properties with very few selling them. Houses prices would continue to rise in nominal terms but would fall ever so slightly in real terms. The market would achieve the circa 50% correction in real terms that is required, over a 20 to 30 year time frame.

Likely? Yeah, I won't be putting too much money down in Paddy Power on that scenario either.

The Goldilocks scenario that the banks don't swallow, as is evident by their property dumping.

 

[room305]

Bring it on.......my vulture fund is in place ......won't be too long now before the first carcacces are found.

If you think that you will be able to make a killing in a collapsing housing market by buying property, then you my friend will get very, very badly burnt.

 

[homeowner]

Who needs to borrow much when you've got little or no debt, a pile of cash, and vendors flogging their properties for ever greater discounts? Jumbo mortgages are for suckers.

If you had bought a few years ago when you started saving your pile of cash you'd have a nice bit of profit built up by now in your home, in fact you'd have far outpaced your current savings. You could have sold this year to one of the suckers out there and pocketed a shed load of cash, waited for the crash and then buy back in at a muich lower price. Oh wait....you didnt buy a few years ago because you were waiting for the crash.....which never came and you're still waiting.

 

[Guest107]

Oh wait....you didnt buy a few years ago because you were waiting for the crash.....which never came and you're still waiting.

Did the dude not sell this year and go back renting WHILE he waits to time his re-entry

 

[SHARP]

I presume your tounge is firmly in your cheek. The reasons mentioned by whathome:



To which I'd add rising unemployment and the associated falling consumer spending (after the SSIA boom) will lead banks to firmly tighten their lending policies.

I'm sure you all recall the 2.5 times main salary / 1 times lower salary rule that used to operate back in the days of 6 to 7% mortgage interest? I can forsee these rules, or a variation on them, being re-imposed (either by the banks themselves or by the Central Bank)

When the crash comes, your dream home might be 20% cheaper to buy than it is now, but you will not be able to borrow anything like as much as you can now either.

Posts like this gets my brain spinning and I think it does others too.

Yes, I have a nice house, but I know I could "comfortably" afford a bigger house in 2-3 years time - but if this does happen, does it then mean that I won't be able to go to the bank and re-mortgage and buy the newer property? I think some people are thinking like this also and it remains a lingering doubt in the back of my head:

Most people get the largest mortgage the bank will give them, so they can get the biggest house they can get (as when the rates rise, they won't be able to get/build the new big house and will "have missed the boat"


My questions to the bulls

Will my kids look at me in 10-15 years time in my decent sized house, wondering why they don't live in the 3,000 sq foot house their cousins are living in?

 

[bearishbull]

as a matter of interest, how would this scenario play out? ie what is the 'best case' scenario for the overall economy in a slowdown?

if house price increases level off and start to track inflation I'd imagine we're still going to see large-scale dumping of investment property ( the capital appreciation is what is driving the market, not the yields).
The building boom would certainly slow down, putting god knows how many out of work. This would in turn lead to many of the foreign workers employed in the building trade to move on to greener pastures, resulting in even more empty properties. And the whole thing goes cyclic with more layoffs - this time in the industries that service the building trade ie shops, diy stores, estate agents etc

So, does anyone have an idea how an 'optimal' slowdown would play out?

I won't be crying into my tea for any investor who gets burned in a slowdown, but I'm afraid of the consequences for the rest of the country.

This is what the soft landing is impossible unless rents rise substantially which given ever increasing supply of rental properties is highly unlikely. This is why i beleive a significant correction (20-50% real falls over next decade) is ineviatable, when capital gains stop coming the greedy will head for the door.

 

[fatmanknows]

If you think that you will be able to make a killing in a collapsing housing market by buying property, then you my friend will get very, very badly burnt.

Don't worry about me..........the This post will be deleted if not edited to remove bad language will be right of it before I'll be penning any cheques.