Houses prices to fall 20%

House Price Fall of 30%

I'm just after reading the Economist article, and from what I can see they are not saying there will be a fall of 20% in the Irish property market, but that there will be a fall of at least 30%...

QUOTE (from article):-
"This survey will conclude that the latest housing boom has inflated bubbles in several countries, notably America, Australia, Britain, Ireland, the Netherlands and Spain. Within the next year or so those bubbles are likely to burst, leading to falls in average real house prices of 15-20%* *in America* and *30%* *or more elsewhere* over the next few years, in line with average price declines during past housing-market busts. This time, however, with inflation so low, house prices will fall more sharply in money terms than they did in the past."
 
Landlord & Tenant Legislation

Will the proposed legislation cause Landlords to sell investment property and hasten the fall in house prices?
 
I know that in Kilkenny there are houses on the local paper for the last 4 to 6 months - going nowhere!

I think the auctioneers will keep the prices up - and the builders will slow down the number of houses being built in order to maintain the supply and demand problem, thus keeping the prices inflated.

McInerneys are masters of this - and people end up purchasing houses at hugly inflated prices. They release 5 and 6 houses at a time on the market out of a 150 house development. It estates like these that we will see the prices drop and in some cases a lot lower than the borrowed amount.

What's happening in other parts of the country?

I think its good that this report has come out as the property developers and auctioneers seem to be the only ones broadcasting the current house price increases?
 
Will the proposed legislation cause Landlords to sell investment property and hasten the fall in house prices?
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I would imagine that landlords will not be at all happy about the new tennacy legislation. Some landlords may well sell their properties and take their profits seeing this as the height of the market and rental levels are decreasing. Of course if enough landlords do that, then the sell off can, like any other asset market, become a bit of a panic!
 
Price rises

House prices may well fall in the future but currently they're still going up.One example is Allendale in Clonsilla.Last week they were quoting 230k for a 2 bed, this week its gone up to 245k!.Anyone looking to buy in Dublin at the moment will find it hard to believe theres a slowdown in the market.
 
House Prices

Tom,

House prices may be increasing and will perhaps increase further after today, if there is a reduction in interest rates. It seems as if many first time buyers are putting their futures in hock for the sake of owning a property.
30 years is a long time and how many people will be or want to be working at 60 + out of necessity to finance a home loan. House prices will fall within the next couple of years and there will be more choice and better value.

Regards
0940
 
Re: House Prices

People should note that the article linked above is only one of several articles in the current issue of the Economist on house prices.
 
I know that no one can predict the market but I just want to get this off my chest.

I have 2 children and lease is up , difficult to find unfurnished properties in the area I am looking in, I need to stay for schools etc.

I have found a property I can afford - even if rates increase significantly, got a deposit etc. I am happy with location and the property itself. I am not saying it is worth the money but I like it. Ideally I would like to move to bigger in 5 -10 years but I do not necessarily need to .

Everyone is saying do not buy - prices will fall. I have to say I feel that prices will probabley fall at some stage how and when and for how long is a different matter.

AM I mad to buy now or once you are home owner do fluctuations really impact on your day to day life.
 
MHO - now is the time to buy (well actually 5 yrs ago was the time to buy but hey ....)- yes some time out there house prices will fall - but the big question is, will they fall below current prices or will they continue to climb & then fall to a level that is still above current prices- no one can tell for sure.
 
Everyone is saying do not buy - prices will fall
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Are they? I thought the consenus among most informed commentators at present is that it would be foolhardy to postpone buying a place to live in simply on the off-chance that prices might dip in the future.
 
They are!

If Margaret Doyle (wrote the latest article for the economist) can be considered an "informed commentator", she says to wait until prices fall until you buy - so I heard her say on RTE1 last week.
 
Re: They are!

Her opinion would be at variance with many other respected commentators and economists - even those in the "bear" category. Doctors differ...
 
Hi MCL - If you like it, buy it - Price rises/falls are academic unless/until you need to move from that property. The risk of losing your chance to get onto the property ladder must be weighed up against the risk of price falls.
 
mcl

If you have found a house you like, can deal with increases in interest rates and dont mind if your property value falls in the short-term then you should definitely buy.

Most FTBs are not in this situation. They are stretched financially and any small increase in interest rates (2%-3%) would prove difficult for them. In addition most are buying small 2 bed units in the expectation of trading up in 3-4 years. They therefore can't afford to experience negative equity in order to realistically trade up in this period.
 
Rents plummet

There is talk of a mass flee from investor property, rents ARE falling and stocks are new seen as a better alternative.. also alot of first time investors are getting gittery, as they stretched too much..
 
Rents plummet

Hi all,

Thanks for your advice, it was very welcome. Paying 10% deposit on house today. I have decided if I like the house and can afford it there is no point holding off. Fingers crossed!

Regards,

Mcl
 
House prices

I recently ceased renting in Limerick and I had a good chat with my letting agent before I left. He told me of many of his colleagues in Dublin who are finding it hard to rent places.
I am now in Mullingar and there are plenty of rental properties available here which have been on the market for months. Not to mention houses which aren't selling. I heard one guy react with horror at the suggestion that he should drop his letting price.
"But that would mean I'm not even covering my mortgage!" he said.
I have to wonder also what effect that the end of the ten year period on some section 23 investments will have over the next few years.
Top that off with the tendancy for people to over-react to certain events and I have to admit that I would hesitate to buy for the next year anyway just to see how things will go. I don't believe house prices will rise too much in that time.
Of course I could be proven wrong!
 
House Prices

As far as I can see, House prices are still racing ahead.

An estate in Leopardstown where a friend of mine bought last year for €340k - houses are now guiding €370 -€380K
In Harolds X, I have been outbid on several houses since xmas in 1 particular area.Now, I'm not even going to look at the latest houses on the market there, as the prices have gone from a €330k selling price to over a minimum €370k asking price !!!!!!!!!!!!!
And I see TSB have said that mortgage borrowing so far this year is 35% up on last year. And yet Estate Agents are saying that house price rises are in the mid-high single digits in terms of %'s.
Looks like the mandarins in the Central Bank will be scratching their heads again.......
 
economist

a writer above suggests he knows of no recent falls in the housing market. Not true. The market had dropped back over 12% by xmas 2001. December that year saw the governemnt roll back the bacon report to give incentives for investors: i.e. tax relief. This was because ahern would not introduce proper rent controls like the rest of europe, therby alienating the building lobby who bankroll him. The irish housing market is a mirage, propprd up artifically by a cowardly venal government afraid to take on big business lobbies (as also with insurance). I lived in the uk when the market collapsed radically in the early nineties. Low interest rates and the euro are contriving to convince young irish people that they can afford mortgages in the long term. They can't. Unemployment is also rising radically and will put the skids on the housing market. If anything, i think the economist was being conservative in its prediction of a 20% fall
 
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