House Market Weakening?

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Duplex said:
Always interesting to read an outsiders view of the Irish Economy, The Jerusalem Post thinks that we are having an unsustainable binge.



http://irish-property-bubble.blogspot.com/
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I'm sure the Israelis must be having a good ol' laugh at the Irish with our runaway house prices and debt because at one point, way back in the celtic tiger years, we may have been seen as a competing small nation in attracting and developing high technology.

But now, Israel has 71 companies on the NASDAQ Stock Exchange; Ireland has 7 (with only 2 of them still considered "stars" and neither of them in technology)
 
beattie said:
Yes I would have thought that it could have been a bit of a 'test the water' asking price originally though I think one would still be mad to purchase at this price. I have heard anecdotally that penthouses are not making as big as gains as the general market (I know this is probably linked to mmgt fees etc).

It will be interesting to see if a property like this stays on the market in one of Dublin's most desirable locations
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this one near me is rather pricey,900k for a 1000sq.ft apartment close to north inner city in drumcondra,close to st.pats for renting to trainee teachers!,maybe bertie will buy it as he thinks theres not a risk in irish property! i'd say his house is worth well over a million at this stage,its one of the smaller ones in the estate.
 
Remix said:
I'm sure the Israelis must be having a good ol' laugh at the Irish with our runaway house prices and debt because at one point, way back in the celtic tiger years, we may have been seen as a competing small nation in attracting and developing high technology.
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Interesting point alright. Years ago my 1st job out of college (1999) was for a well-funded startup with alot of international connections. I remember them telling me that they only narrowly decided on Ireland over Israel when choosing location. I wonder what decision they'd have made in 2006..
 
Just thinking,when people say "im buying for my pension" etc and "i'll hold long term", do they not do some basic arithmetic in their head and say we're building 80k properties a year and if as they are hoping the market doenst crash then after 30 years we'll have nearly a house for every man woman and child in the country!where will demand be if theres so many houses in excess of the demand? if the market does keep strong as the bulls suggest the massive building of 80k units a year will within a decade or so saturate the market and prices will have to fall regardless of interest rates economy etc! so a booming market now inticing developers to build more and more is actually a bad thing for medium to long term investors!as the developer ray grehan said on the rte programme "boom" recently,it cant continue or we'll all have several houses! there may be a few more years of price growth but as more and more housing stock is created the market will in next few years or within the next decade face large oversupply.
an another note ,we have been talking about properties sitting vacant,a council in the uk is bringing in regulations to seize properties which are being let or lived in and forcing them to be rented. imagine if irish councils did this!
 
It seems that everyone from Trichet to the Jerusalem Post can see what’s happening in Ireland. What amazes me is the apparent denial in government and Bertie in particular. But is it denial or a more sinister cynicism?. I can’t make myself believe that any government could peruse a policy that is so self evidently damaging to Irelands future, so I’m comforting myself by deciding that denial is the problem, or maybe I’m in denial?
 
walk2dewater said:
...it's not just a river in Egypt...
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Its a paper in Israel even



IRISH BINGE

In addition to flashy spending of the usual sort - the rate of ownership of BMWs and Mercedes in Ireland is higher than in Germany - they are hooked on a crazed binge of property buying. This encompasses both their own real estate - so that derelict barns in remote country villages fetch six-figure euro prices - and others' too, especially in the developing East European countries, from Poland down to Bulgaria.
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This lad should write for one of our Property Supplements :D . He goes on a bit further about us and he is more or less correct in everything he says .

Ah Well, chin chin.
 
bearishbull said:
Just thinking,when people say "im buying for my pension" etc and "i'll hold long term", do they not do some basic arithmetic in their head
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I think you know the answer and it is no.

In the Indo today, there is a report that Paddy Power is offering odds on house price rises for this year and next. What struck me was the only odds reported were for rises.

You see, Irish houses only ever go up! :rolleyes:
 
Fine houses, fancy cars no roads. That's short-termism run amok, a feel-good formula leading nowhere. The Swiss may not know much about feel-good fixes and they may be unfriendly and cold, but they are the world experts on protecting and enhancing the wealth they steadily accrue. As ever, they are much the safer bet.
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That's funny. :)
 
Neffa said:
I think you know the answer and it is no.

In the Indo today, there is a report that Paddy Power is offering odds on house price rises for this year and next. What struck me was the only odds reported were for rises.

You see, Irish houses only ever go up! :rolleyes:
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I am sure PP are happy to suck up the 'gains' accruing from property here so they have a vested interest in the party continuing or maybe they are being clever knowing that if it drops they clean up! :eek:
 
beattie said:
I am sure PP are happy to suck up the 'gains' accruing from property here so they have a vested interest in the party continuing or maybe they are being clever knowing that if it drops they clean up! :eek:
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i wonder are people who compile the ptsb house price index allowed to bet as they may have access to insider info before the market.
 
About Paddy Power's odds...

Singles Only.** Settled in accordance with official house price index figures obtained from Permanent TSB. Under 10 percent 4 - 1
10.000 - 11.000percent 8 - 1
11.001 - 12.000percent 6 - 1
12.001 - 13.000percent 7 - 2
13.001 - 14.000percent 5 - 2
14.001 - 15.000percent 4 - 1
15.001 - 16.000percent 8 - 1
16.001 - 17.000percent 10 - 1
Over 17percent 14 - 1

What % will the value of National House prices rise by for 2006?

They've already risen 5-6% up til now have they not?
 
I viewed a property about a month ago in Monaghan, the asking price was 200k, the vendor was hoping for €220K. The Estate Agent rang me yesterday to say that the deal will be closed by next Tuesday, there is only 201K currently on the house.

2 things....

It has been a long time ago since estate agents have been ringing around looking for bids

also

houses aren't going for as much as people expect....

Alarm Bells!!!!
 
madisona said:
I'm still very puzzled by this phenemonem. Why would BTL investors leave apartments empty rather than rent them. There may not be a market there for these properties at €1000 a month but why would they not rent them at say €500 a month. Even if they are holding mainly for capital appreciation I can't see the logic of deciding not to rent and to therefore forego that income.
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A number of people I think don't fully realise the difficulties with regard to looking for tenants and choose to let it sit idle while the price appreciates. Maybe the government could bring in some sort of ownership tax (per year) for investors which would force them to look for tenants which would drive rental prices down, which would mean people would look for less pay rises, which would mean we would be more competitive as an economy....... :(
 
beattie said:
A number of people I think don't fully realise the difficulties with regard to looking for tenants and choose to let it sit idle while the price appreciates. Maybe the government could bring in some sort of ownership tax (per year) for investors which would force them to look for tenants which would drive rental prices down, which would mean people would look for less pay rises, which would mean we would be more competitive as an economy....... :(
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Any measures that the government introduces at this stage of the game to reduce investor demand in the housing market would probably have the effect of causing a significant fall in the market for which they would be blamed. There is no way that they will bring in any such measures in the next budget - it would be political suicide in the run-up to the election
 
If your house is appreciating in value by 20-40,000 each year and you could only get 10-12,000 rent on it (for which you'd have to register, pay tax, furnish it, find tenants etc) you can see why people aren't going to bother going to all the hassle involved in renting out the place.
 
madisona said:
nope. still don't see it. note as well that there are a lot of people in hotels, restaurants, factories and call centres for who €10K - €12K is close to a years income.
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A regular poster here admitted recently on another thread that he sold a house in Galway that he bought 2 years ago and never rented it out because it wasn't worth the hassle.

I'm not saying that I agree with it but just that it's happening all over the place
 
SidTheDweeb said:
About Paddy Power's odds...

Singles Only.** Settled in accordance with official house price index figures obtained from Permanent TSB. Under 10 percent 4 - 1
10.000 - 11.000percent 8 - 1
11.001 - 12.000percent 6 - 1
12.001 - 13.000percent 7 - 2
13.001 - 14.000percent 5 - 2
14.001 - 15.000percent 4 - 1
15.001 - 16.000percent 8 - 1
16.001 - 17.000percent 10 - 1
Over 17percent 14 - 1

What % will the value of National House prices rise by for 2006?

They've already risen 5-6% up til now have they not?
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madisona said:
I'm still very puzzled by this phenemonem. Why would BTL investors leave apartments empty rather than rent them.
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Easy.

Its 2003, buy €250k apartment in central dublin and leave empty. It rises 10% a year in each of past 3 years and now well over 300k

Rise year one €25k or €2k a month rent €1k
Rise year two €28k or €2.3k a month rent still €1k
Rise year three €31k or €2.6k a month and rent still €1k

There may not be a market there for these properties at €1000 a month but why would they not rent them at say €500 a month.
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Thats beer money compared to over €2k a month appreciation . The marginal cost of doing something , or anything is €0.5k a month to €1k a month when doing NOTHING is €2.5k a month profit so thats a lot of effort for a marginal 20% or 40% extra and all the hassle and tax and stuff.
Even if they are holding mainly for capital appreciation I can't see the logic of deciding not to rent and to therefore forego that income.
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Hassle Hassle and they must evict tenants and repaint before they sell. That could take months. At least this way they are ready to exit fast.....or so some of them think. :p Once they are all ready to exit fast the bubble is over anyway and they will not be exiting but dumping.

In the late 1990s boom rent DID track capital appreciation so €1k rent for a €200k flat linearly became €1.5k rent for a €300k flat as both rose broadly in tandem. In the post 2002 boom prices rose because money was cheap and .coms were uncool. Rents were static more or less which should have told the fools that the supply was greater than the demand.

Now in 2006 you cannot let anywhere without a dishwasher and washing machine , in 1990 a washing machine was a luxury never mind a dishwasher. :p



HTH
 
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