Have the media exaggerated the exaggerated the seriousness of falling house prices?

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Re: Have the media exaggerated the 'housing crisis'?


There must be tens of thousands of houses and apts unsold, its a big bill if they were even to buy only a handful!

Why not let them drop in price?

Cheaper housing benefits the ordinary joe and jane buyer and the economy plus the houses would be sold alot faster if they had cheaper prices and hence some builders can retain their jobs!
 
Re: Have the media exaggerated the 'housing crisis'?

charliemacck said:
Many of these people did not know that property prices would ever go down and please god hopefully they will not drop much more.
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A strange statement for someone professing to support the building industry. The reason the building industry has collapsed is because houses became so expensive that no-one could afford them anymore.

That, and the fact that most of what they're building is crap inspired by speculation and greed rather than utility. Greedy short sighted developers failed to grasp the simple concept that people do not want to live in poky shoeboxes.

Luckily for the building industry (and potential future housebuyers) Dublin City Council has now imposed minimum design standards for new apartments (only 10 years too late mind), and a rising tide lifts all boats - so standards of new builds will rise across the board, resulting in a better quality of life for the eventual occupiers - be they owner occupiers or tenants. The increase in quality will promote higher demand leading to more jobs in the building industry.

Secondly, basic economics tells us that when you have excess supply in a market, you must reduce the selling price until you reach the point where demand exists. At that point the market is in equilibrium, and from then on prices can start to rise again if demand exceeds supply.

Right now supply of properties both for sale (new and second hand) and for rent exceeds demand by a considerable margin in the Irish property market.

So both prices & rents have to fall until equilibrium is reached. It ain't that hard really. Although Jim Power has apparently only recently figured this out, many others managed to arrive at this conclusion a long time ago.
 
Re: Have the media exaggerated the 'housing crisis'?

I think this thread is drifting off topic a bit.

My original point for discussion was that the media have exaggerated the seriousness of falling house prices and as a result have fulfilled the prophecy to a degree. Although the media did not cause house prices to fall, intense media sensationalism is magnifying the effect and could result in an overshoot in prices terms.

I have read a lot about affordability being a major aspect here but the average house price (currently around €275k) is affordable. A quick look at the daft mortgage calculator indicates that a couple on the average wage (€35k each) would get a 92% mortgage of €308k over 25 years. So the average couple can more than afford the average house.

Again, my point is not to predict house prices. My point is that saying 'we are at the end of the largest bubble in history and therefore prices will fall by another gazillion percent or that prices will fall for at least the next 5-15 years' is nonsense. It may transpire to be correct or not but there is no reason to believe it at present. It is a logical jump over a large ignorance gap.

If you have a point, then justify it. If not, it is an opinion with no basis and you need to check out http://www.thepropertypin.com
 
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