A soft landing is nothing of the kind...it means that prices don't correct rationally, and it is only a conduit for suggesting to people that in fact, it will all be okay when they wonder about the wisdom of what they have done.
The point is, property in this country is disproportionately costed vis a vis available salary income. That cannot continue, and unless it falls significantly or we suddenly have massive salary inflation, we are in an unhealthy position.
Property market matching salary growth is highly unlikely. We're lucky to scrabble 3% a year out of IBEC in national wage discussions - the employers do not want to pay out any more money in salaries than they can get away with and if they could cut it, they would. So the only other mechanism for getting a more reasonable balance between average salaries and house prices is for the latter to fall.
I have listened to a lot of people buying houses both to live in, to get their foot on the ladder and for investment purposes claiming "it'll be a great pension" and "property can't fall" and "things are different in Ireland".
I don't see them, who by their profligacy with borrowed money pushed house prices into this position, thinking of those they priced out of the market now. I do see them making some patronising remarks to those who do consider this insanity and unviable in the long run. Why should I have any sympathy at all for them if they lose out because of their own actions? Apparently no one forced them to get into that position.
The property market needs to come into some kind of balance. The idea that we can continually manufacture money out of nowhere to sell houses to each other despite not making money out of anything much else needs to be killed right now. As far as I'm concerned if we had a decent correction three years ago when it should have happened, we wouldn't now be in a position where it looks increasingly like an elastic band is about to snap.
I don't get up in the morning hoping a property crash will happen so as to wipe the smiles off smug property owners. I get up knowing that every day those property prices don't correct, the closer we are to major economic problems, because the longer it goes on, the more they will correct by. People with vested interests know that a major correction will be very very serious. They have now reached the point where they are very afraid that the turn is coming. From what I can see, most of the talk of a "soft landing" is based on wishful thinking more than anything. From what I can see, they seem to predicate on inflation matching price growth. Unfortunately, that would be fine if average house prices didn't happen be over ten times average salaries.
If and when the crash comes, it will hurt. If, however, any political party dares to suggest we dig people out of the mess they got into because they didn't have the cop on to understand that "what can go up can also come down", particularly would be speculator/investor types, I will actually make sure that the life of any of their representatives who knocks on my door is miserable for 15 minutes. Representatives of Fine Gael in particular, after their recent FTB policy announcement should start trying to find out where I live in order to avoid me.
I am not sure what market sentiment is at the moment. I can only observe certain things. I observe, for example, that rents in parts of county Dublin now match rents in Dublin City. I can only observe that some properties in county Dubli match some in Dublin City purchase price wise. I can also only observe that some properties seem to be spending a fine amount of time on property websites which leads me to conclude that either 1) their estate agents are lazy about clearing sold property from the listings or 2) their estate agents are not managing to see the properties. I can also add that fewer and fewer people are telling me to buy property.
People who have bought houses that they are willing to live in for quite a few years I think are unworried. Those that bought houses or apartments expecting to trade up are most at risk of the problems caused by negative equity.
