Future price of Irish properties

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Nice one CoffeeBrew! Notice this is so small it can only fit a corner bath! Also I see there are another 3,000 newbuild properties scheduled for West Dublin by the end of 2006. Things are getting very interesting.

Isn't there a big difference between owning property in a 'crash' and owning shares?

I sold a property in Dublin eighteen months ago against unanimous advice that it was a 'fantastic' investment to retain it to let until I retired back there in a couple of years on a modest health services pension.

There have been a few moments when I've wondered if I was mad, and 'on paper' the property has increased by 18.5% of its value. However deep down I did not - nor do I still - trust the situation and would not have slept nights had my retirement nest-egg been so vulnerable. It would be useful if the pundits would define 'soft landing'; it sounds innocuous but those who witness or experience it know it entails heavy financial loses, life-changes and sometimes hardship.

Ireland has not experienced this yet and I agree with previous posters that there is a manic quality of denial about property. Here in the formerly-salubrious south-east of the UK for 8 years properties were selling easily and prices rising steadily BUT that succeeded a decade of flat market. For the past two years prices have been dropping and the situation is the reverse of the Dublin experience of paying over the asking-price. Here it's a buyers market. Offers 10% under the asking-price are accepted immediately and gratefully. Rent levels have plummeted and many investment properties - domestic and corporate - lie empty for 4 - 6 months at a stretch. Recently unemployment figures have begun to rise again.

The Irish response to this is invariably "Oh well - it's different here; we've got immigrants!" So does the UK and every other developed country in Europe. Saturation is saturation.
 
I worked in the south east of England during the crash.
Clients within the space of six months from being a high earning private client with high end health insurance became income support claimers.
Change was dramatic and horrific.
From owning a period listed house to renting on rent support.
Lines of speculators that thought they were investors totally wiped out.
Banks were giving 120-130% loans to all.
I think the central bank is the key factor to regulate banking T&Cs to give us any sort of soft landing especially as they have no control over rate decisions.
 
CoffeeBrew said:
Sure just replace the skinny birch tree with a palm tree in this photo and you could be right in elite Baldwin Park, Florida and you wouldn't even know the difference

:D :D

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jaysis a dog box!
for that price you could buy a mansion in many developed countries like france america etc
 
Has any AAM investor with a second house asked themselves "What price would need to be offered on my investment before I would sell up"?

I've just worked out that my one-and-only house increased by 13.5% APR (335%) over the last nine years.

I now find it strange, even shocking, that I had never even thought about selling despite the massive gain. I wonder, what would have convinced me - 500%, 600% increase? Probably not, yet, because I stretched myself at the time, that is more my total gross pay for the same period.

I don't understand why it has gone up so much. In poker that say "If you don't know who the mug at the table is - it's you".

I freely admit, I can't predict long term trends and I won't feel bad if it continues to increase sharply for the next 5 years (I half expect that it will!). But after much thought over the last 3 days, this morning I called the auctioneer and I for one am bailing out!

So what % increase would convince you before selling up? I'm interested to know!
 
gidxl03 said:
Has any AAM investor with a second house asked themselves "What price would need to be offered on my investment before I would sell up"?

I've just worked out that my one-and-only house increased by 13.5% APR (335%) over the last nine years.

I now find it strange, even shocking, that I had never even thought about selling despite the massive gain. I wonder, what would have convinced me - 500%, 600% increase? Probably not, yet, because I stretched myself at the time, that is more my total gross pay for the same period.

I don't understand why it has gone up so much. In poker that say "If you don't know who the mug at the table is - it's you".

I freely admit, I can't predict long term trends and I won't feel bad if it continues to increase sharply for the next 5 years (I half expect that it will!). But after much thought over the last 3 days, this morning I called the auctioneer and I for one am bailing out!

So what % increase would convince you before selling up? I'm interested to know!
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as any great investor will tell you,you must know when to sell and take profits.its a fact that booms dont last forever so a wise investor will take profits before the market peaks,most accept we are close to the market peak and reality will set in eventually.
 
gidxl03 said:
Has any AAM investor with a second house asked themselves "What price would need to be offered on my investment before I would sell up"?

I've just worked out that my one-and-only house increased by 13.5% APR (335%) over the last nine years.

I now find it strange, even shocking, that I had never even thought about selling despite the massive gain. I wonder, what would have convinced me - 500%, 600% increase? Probably not, yet, because I stretched myself at the time, that is more my total gross pay for the same period.

I don't understand why it has gone up so much. In poker that say "If you don't know who the mug at the table is - it's you".

I freely admit, I can't predict long term trends and I won't feel bad if it continues to increase sharply for the next 5 years (I half expect that it will!). But after much thought over the last 3 days, this morning I called the auctioneer and I for one am bailing out!

So what % increase would convince you before selling up? I'm interested to know!
Click to expand...

Snap,i'm no professional either but i'm bailing out myself !.
 
Interesting article by David McWilliams in the SB Post today:

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Any comments? His analysis rings truer to me than the fatuous nonsense I've been reading in the press recently about how immigrants are going to prop up our property market.

B.
 
another article in todays sunday times by damien kiebard on property and irish economy driven by debt ,he says

"For the moment the mood is euphoric. But anybody who tells you that we are not witnessing a credit bubble — and an associated asset price bubble — is simply wrong. "

so irish commentators are finally starting to say what the dogs in the street know-that theres a property bubble and we all know bubbles burst! i suppose people will still invest according to the "greater fool" theory.
 
and even another article on dublin house prices by jill kirby in the sunday times warning of bubble bursting.
she says
"These figures are beginning to frighten me. If I were the only one in my family to decide, I would sell our house, bank the money and rent an equally nice one (in a nicer neighbourhood) for less than the interest paid on the proceeds of the sale. It is this yield anomaly that has me convinced there is a big house-price correction on the way. "
http://www.timesonline.co.uk/newspaper/0,,176-2024737,00.html
 
How will changes to tax laws announced today play out in the long term, were they expected to go and hence saavy investors will already have placed their bets....
 
The purpose of the property based tax incentive schemes was to attract capital to locations which the market had previously considered unappealing. I suppose the intention was to build infrastructural capacity which would encourage further investment. The hotel tax break has resulted in oodles of shiny new 3 star hotelsm, however the traditional Irish B&B industry has suffered as a result and the added decline in long stay holiday trips has not helped. In my opinion investment should have been targeted at improving public/ tourist attractions e.g. long distance footpaths, cycle paths, signage, tourist information etc. this investment would have built on existing demand and may have attracted additional visitors.

The benefits of the Section 23 scheme are hard to define. Would the apartments and houses built under the scheme have being built anyway supposing that the market would have rushed to fill demand at a price that the local market would bear?, more than likely, but the provision of relatively cheap rental accommodation is a benefit and the overcapacity and investment risk is spread.


I don’t think the winding down of these schemes will have a major impact on a market which is still struggling to meet demand even though production breaks records every year. The Irish property market is far more vulnerable to a global economic downturn; a change in market sentiment, will expose current prices to an acid test of essential value and given present yields I think it’s going to flunk the test.
 
European Central Bank warned today that the housing market in Ireland and several other European countries is becoming overvalued following recent sharp price rises. [FONT=Verdana,Arial,Helvetica,sans-serif]"Euro area house price valuation measures continue to be above their historical averages, which, bearing in mind all the caveats attached to this approach, can be seen as a tentative sign of a growing risk of overvaluation in the euro area housing market," the bank said in its February monthly bulletin. It said some recent house price rises in some eurozone regions may be unsustainable. Prices have risen strongly in Spain, France, Italy and Ireland in recent years but have declined in Germany
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The bank said the recent increase in eurozone house prices appears to be mainly the result of strong demand, linked to declines in interest rates in many countries on the launch of the euro.
This has increased the affordability of higher priced housing, it said. Banks have also tended to relax conditions for the approval of house purchase loans. As a result, mortgage borrowing has increased sharply and mortgage debt rose to around 35pc of GDP by mid-2005 from 25pc in 1999, it said. This expansion of lending appears to have fuelled the sharp rise in house prices, which have been running ahead of growth in disposable incomes since 1999. This may be a correction of the 1994-1998 period, when house prices lagged behind income growth, according to the bank. But house prices can also be measured against rents and returns on government bonds, and such calculations suggest that the housing market has been overvalued since 2001, it warned.
 
Hope my landlord doesn't see this calculator, he gets approx €1500 pm for a house which would probably fetch ~900k
 
as an existing landlord with good (>50%) equity across portfolio - things are certainly getting a bit toppy in my opinion - <3% rent yields are bets against increasingly unlikely capital gain - time to take stock - me thinks...
 
Hi All,

After reading yesterday's Sunday Business Post, I must say that I feel a serious underlying conspiracy between the government, banks and all others with a vested interest in property prices in this country, trying to prop things up with media propaganda. Tell the common folk that things still look good and they will believe it.

(Aside: I smirked when I read that this particular report will prove positive for Fianna Fail, who are preparing for election next year).

The OECD state that the Irish market is not a bubble waiting to burst!!
Well thats fine then, nothing to worry about folks.

As I meandered further through the paper I came across mentions of more reports delivered by the OECD (in smaller print at the bottom of some centre page) claiming that "IF" things do go south in Ireland it will be devastating.

So, it depends on which report from the OECD you read to determine what the mood is.

They are saying in reality that, one way of looking at it things look good, on the other hand things could be devastating. The Newspaper chose the more positive message to splash across its front page - leading essentially to positive feeling for it's property investor reader and in turn helping to keep the mood bullish in terms of property.

Who are the OECD anyway? - what about the report last week from the ERTE saying that everyone is going to make millions, or the report from the POIF saying things are crashing now - the R.I.D and the C.U.P as well as the P.U.K and O.F.F are all saying buy buy buy.!!!! I have never seen so many acronym organisations come out of the woodwork - I think half of them are made up by banks, government agencies etc. as vehicles for getting the positive/negative news across.

Do people not see that fundamental economics tells us that Ireland's economy is a bit unrealistic and could be in a bit of trouble. I am no expert but I get worried when I read general statements like "The housing market will continue to grow therefore the economy will continue to grow"...surely this is the wrong way around or am I mistaken?? - In a healthy economy should the housing market determine the whole economic growth - surely there are a lot more major factors to consider - both internal and external??

The common person on the street knows that things are a little unsustainable...and the media are trying to throw him/her off the scent. Trying to keep the mood positive - because it is mood and not interest rates,US current account deficits etc. that can ultimately bring on a swing in the value of stocks and assets.

If the common man/woman starts to feel things are a little dodgy, he/she will pull out leading to a flock of sheep effect - the public en masse will pull out and the price will fall....zerfor zey need to be told zat thinks vill remain positif.

Looking back on our recent property history I ask myself "Has there ever been such a way for the ordinary Joe to make hundreds of thousands of euros for doing sweet FA ? " - it seems to me that when the average guy on the street can make maybe a million or more by simply buying a house(s) and letting it sit there for a few years- things are a little off.

It is easy money, and I know because I have made some of that money...and I had no clue in the world about property.

It is like what was said about the great Wall street crash, when the fool on the street gets wind of easy ways to make money on the stock exchange, it is time to get out.

But the fool on the street has already made fortunes on the Irish property market and still no-one is 'getting out' - what gives?

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I had a taxi driver recently boasting about his €900,000 mortgage. Made me a little queasy.
 
kane3000 said:
After reading yesterday's Sunday Business Post, I must say that I feel a serious underlying conspiracy between the government, banks and all others with a vested interest in property prices in this country, trying to prop things up with media propaganda. Tell the common folk that things still look good and they will believe it.
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Good post kane3000. There's very little objective analysis on the property market in any of the Irish Sunday broadsheets... and how can there when they are all loaded with property supplements and their associated revenue streams. While the housing market may continue to grow for the next two years what about the years after that. In two years time and at current borrowing rates we'll be carrying even more debt. What then if things go bad?
 
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