Future price of Irish properties

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I've often thought there must be great opportunities for study in this area in Ireland.

Wouldn't it be fascinating to see a study that attempts to reveal what's going on in people's heads as they outbid each other to record levels?

I'd imagine in the future there will be a lot of interest here and abroad of the "lessons to be learned" kind in the situation we are experiencing now.

Shame the property market is so closed that a lot of the details and the thought processes might be lost to history.
 
Having said all that;

[broken link removed]

Look at the first page, the guy is laughing and drinking a glass of champers, you to could be laughing and drinking champers, very tempting.
 
Duplex said:
Having said all that;

[broken link removed]

Look at the first page, the guy is laughing and drinking a glass of champers, you to could be laughing and drinking champers, very tempting.
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I believe the following article from the Evening Standard catalogues the collapse of Mr Michael's empire. Surprised the website is still up!

http://www.findarticles.com/p/articles/mi_qn4153/is_20050817/ai_n14877496

On the subject of bubbles and signs thereof. What do folk think of the Jury's site being re-developed as apartments?
 
"The question is why do central banks attempt to reign in liquidity by raising the cost of borrowing. The Federal Reserve has upped rates, if you read Greenspans statements, to address the US housing bubble, what threat was the bubble to the American economy if CPI was steady at around 2%, what happens to an economy if an asset bubble bursts? "


The CPI is one of the most manipulated statistics of all. The reason it is manipulated is that what it says has far reaching consequences. The actual inflation rate in other words the inflation rate that people feel is far higher than the CPI. For example the things which have risen the most in the last few years such as housing costs, rent, petrol, healthcare are not included in the CPI. The basket of goods which is included are in areas where pricing power is poorest such as food and clothing and where competition is fiercest. By keeping the CPI artificially low politicians can claim all is well and that the economy can cope well with higher oil prices. However people know something is wrong because they feel their money does not have the same buying power. Look at the reaction to Eddie Hobbs and to paraphrase his catch phrase "The low inflation economy is a myth". The CPI is like a messenger on how the economy is performing but that messenger like stalin's messengers is only allowed deliver good news.
 
What puzzles me: Every dog in the parish knows their is a bubble, but a bubble by definition burts. This one hasn't burst yet. so when the hell will it? we are still waiting and waiting...for ecb rate hikes for .....what. If we get another year of modest to flat growth before the ecb lets loose how much of the bubble remains ?
 
gearoid said:
What do folk think of the Jury's site being re-developed as apartments?
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I think Jury's will be the begining of the end, for me the no.s just don't add up. To make a return on their investment, they will have to build a thousand odd appartments. This will result in a "site" cost of approx E250,000 per appartment. Construction costs will be at least the same (a high quality of fit-out will be expected).

I would guess when they come to market, the asking price will be E750K + for the smallest units, with most being priced at over 1 million.

What happens when there aren't a thousand people waiting to spend over 1 million on an appartment ?
 
owenm said:
What puzzles me: Every dog in the parish knows their is a bubble, but a bubble by definition burts. This one hasn't burst yet. so when the hell will it? we are still waiting and waiting...for ecb rate hikes for .....what. If we get another year of modest to flat growth before the ecb lets loose how much of the bubble remains ?
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Just take a look at this article to see just how much this bubble is staring us all in the face:

from today's irish independent
http://www.unison.ie/irish_independent/stories.php3?ca=9&si=1470610&issue_id=13012

>>>>>>>>
IT may be the most expensive property in the world.

A 10-foot wide former tool shed literally squeezed into a terrace in The Liberties area of Dublin is about to be snapped up for a whopping €220,000 although it measures a mere 280 sq ft.

Billed as Dublin's smallest house, the mid-terrace mini-home at 25a John Dillon Street in Christchurch consists of a combined livingroom/kitchen and bedroom with ensuite bathroom divided by a spiral staircase.

It has no main floor windows or back garden and even made property history at the height of the Celtic Tiger boom when it sold for €140,000 in 2000 - a record price of €571 per square feet.

Its would-be owner - who has agreed to buy the property for €220,000 will be laying down an astonishing €785 per sq ft for what used to be used as a tool storeroom by workers for Dublin Artisan Dwellings who built many of the Victorian terraces in the area.

It was built as a result of a building blunder in which the Victorian-era builder found he had extra space in the middle of the terrace after building from the outside in.

It had been rented to the company's workers until the 1970s when it was sold to a tenant for a more reasonable £500.

Young's Auctioneers, who have had the house on the market since May, refused to comment.

But Michael Kilcoyne, chairman of the Consumers Association of Ireland, said it's a sign of a property market gone mad.

"It shows you it's gone off the rails. There is no property that is worth that kind of money and it is probably the most expensive property in the world," he said.

But house hunters can take heart from a more modestly priced property. A former haven for poteen bootleggers in a Co Mayo island has gone on the market for €150,000.

It consists of 35 acres of land on Glass Island in Lough Conn, a prime trout and salmon lake.

Castlebar-based auctioneer Tomas Collins said the tranquil island would make an ideal setting for a holiday home.

Allison Brayand Tom Shiel
 
The best case scenario for the government would be a gradual tightening of ECB rates, this would allow an organised retreat for the Irish Economy away from the speculative era. But bubbles do not require monetary tightening to bust, and once a bust is evident central banks nearly always attempt to reflate by lowering the cost of borrowing anyway as in Japan, US and UK in the early 90’s. These liquidity splurges were unsuccessful mainly because it takes an economy (i.e. consumers) some time to recover from the excesses of a credit fuelled boom.



There are many instances of speculative markets crashing without a regulatory credit squeeze; a change in the numbers of participants is sufficient; bought about by a dwindling in the number of people who can afford or are inclined to join the pyramid at the base, even with the aid of 100% mortgages. The coming to light of new information, such as falling housing markets in other economies may affect sentiment and of course rising unemployment would impact the market. I think good leading indicators for the Irish market are the US and UK housing markets, where they go we will probably follow. ( where the US economy goes everyone will follow for that matter.)





At the moment the construction and related industries are the central pillars of the economy it seems certain that the number of new homes being built will fall over the coming years, possibly dramatically if the market busts. Any downturn will impact Irelands ‘guest workers’ hardest as they tend to work in the ‘frothier’ parts of the economy , how many would or could remain in a downturn is questionable if greener pastures are available.



One last point , when the Euro was introduced the problem of a one size fits all monetary policy in a continent with diverse economies was supposed to be addressed with national taxation measures targeting excess liquidity or otherwise. The Germans failed to reform a taxation system that has stunted growth while the Irish have failed to target fiscal policy at a dangerous speculative bubble. But that was then and this is now.
 
Trichet, interviewed by the Irish Times, dropping big hints that national action is needed on our overheated property market

The president of the European Central Bank which sets interest rates for the euro zone, Jean Claude Trichet, has showcased Ireland as an example of how countries can succeed within the euro area. However, he sounded a note of caution on property prices.
.
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"Although not alarming at a euro-area level, we have a lot of good reasons to follow up and monitor closely what happens in countries of the euro area. In some countries of the area - which are very dynamic and have a lot of real growth - there is a case for as appropriate national action as possible to calm down the market," he said.
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Will anyone listen ?


http://www.finfacts.ie/news/irishtimesnews.htm
 
I don't think the government will listen, they collect too much money from Stamp duty and the last thing they want is their war chest to be depleted two years before an election
 
At any cost...

Aboard the SS Titanic on her maiden voyage a helmsman firmly took the wheel. Behind him stood two powerful figures, the ship’s Captain, Edward John Smith, and Bruce Ismay, the Chairman of the White Star Line. Behind them stood the prestige and power of the owner of the White Star Line, Ismay's father.

"There is testimony that Ismay urged the captain to maintain maximum speed,"

said Bisset, one of the first men on the rescue scene after the sinking. Thus the helmsman aboard the Titanic actually wielded little power, exercised little judgment, aside from spinning the wheel. Those who stood behind him in the shadows set the course and determined the speed (and were wholly responsible for the ship).

A New Atlantic Speed Record for her maiden voyage became an enviable goal. All that was required was an increase in power, and thus, speed for the entire voyage.
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Are there enough lifeboats ? :eek:
 
Property is a long term investment. Take Dublin residential property, say Ranelagh. Are these properties likely to be worth more than they are now in 20 years time, or do you think they will be worth less than they are now in 20 years time, in real terms?

As long as I can remember, property has always been expensive, until you looked back 20 years later and said, "if only........"

It was like that in the 50's, 60's,70's,80's, 90's and its like that today.
I do think that Dublin property is currently not good value IF you are an investor looking for an exit in 5 years that will reap huge returns. If you have the long view and can ride out the storms that inevitably pass us by from time to time, then it can prove to be very lucrative indeed. The problem is that in our current instant, throwaway society, few people have the patience and discipline required to achieve it.

So in answer to your original question on the future of irish property prices (i'm assuming we're talking residential), it is yes and no, depending on the person buying the property.

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If someone is looking to buy a property to hold for 20-30 years then I say why not wait 2 or 3 years before buying? This is very small amount of time compared to the period you plan to hold the property.

Why wait? Global property markets in general and the Irish property market in particular are out of balance and appear to be reaching a critical phase. In addition, our leading bank economists are indicating a dramatic slowdown in price increases.

If, however, none of this matters and the potential buyer is convinced they are not buying in the middle of what appears to some to be a massive house price bubble than by all means - go buy now !!
 
I believe that property prices in Ireland are way overvalued.

I have only one house , my PPR, which I cannot/am unwilling to gamble with.

Has anyone any idea of how to short the Irish property market.


Murt
 
CoffeeBrew said:
If someone is looking to buy a property to hold for 20-30 years then I say why not wait 2 or 3 years before buying? This is very small amount of time compared to the period you plan to hold the property.

Why wait? Global property markets in general and the Irish property market in particular are out of balance and appear to be reaching a critical phase. In addition, our leading bank economists are indicating a dramatic slowdown in price increases.

If, however, none of this matters and the potential buyer is convinced they are not buying in the middle of what appears to some to be a massive house price bubble than by all means - go buy now !!
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You're absolutely right. If the goal is long term, waiting is always an option. It may be that there is an element of panic in some property markets at the minute and we all know where that leads. If a person is the type that panics when buying, it is likely that person will also panic when selling. Fools truly rush in............
 
Murt10 said:
Has anyone any idea of how to short the Irish property market.
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I think one of the spread-betting companies had an option to bet on movements of one of the house price indices.
 
Theo said:
... It may be that there is an element of panic in some property markets at the minute and we all know where that leads. If a person is the type that panics when buying, it is likely that person will also panic when selling.............
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Well put, Theo.

Duplex said:
I would'nt go shorting Irish Builders or Banks until the writing is on the wall for all to see.
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I'd agree with that also. Now might be a good time to think through the process but not necessarily execute it.
E.g. research trading strategies & understand how to keep any losses under control, identify the stocks that will be vulnerable, have an account set up and ready to go (e.g deltaindex, others?), get a feel for entering and exiting short positions using a simulator (no real money involved).
 
"I would'nt go shorting Irish Builders or Banks until the writing is on the wall for all to see."

Yea I agree with this also, since 2001 I have been bearish on residential property. However many people have predicted the end of the boom and it hasnt happened yet. If you had been shorting banks or builders over the last few years you would have lost alot of money. Alot of people have been predicting the "if" its the "when" thats the problem and its the "when" where the money is to be made. Having said that I am convinced the "when" is now nearly upon us, the retirement of Alan Greenspan will be a key event it is him and him alone that has maintained this global bubble the "biggest bubble in history" to quote the economist. Even George Bush was afraid to get rid of him. Im sure who ever takes over the FED will preserve him like a relic they will entomb him like Lenin to maintain confidence in a failed ideology. Liberal economics is dead just like communism but it will take thirty years before the masses realise this. On a completely different note unions I hadn't heard of since the 1980s are now making the news again the ATGWU. YOU are going to hear alot more from these before the decade is out.
 
Next Monday - the return of RTE’s “Big Bite” current affairs program hosted by David McWilliams at 2:30PM.

The panel will discuss the Irish property situation, bubble or not.
 
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