Newspaper Advice! – Don’t take any notice!

[MrMan]

So what did you actually mean by this MrMan? Please do tell.

A statement was made by the OP as follows

With hindsight, they don’t seem to be very "smart" now because property prices have reduced by about 15 to 20% since then.

I followed this with

I'd be wary of asserting that property prices have dropped 15-20% when its not the case.

The assertion in my view was that the OP was making a statement that property prices (in general) were down 15/20%. I don't believe this to be so. I believe that is has happened in some areas such as the recent case in Dublin but that hardly represents the market.

Your comment

So you're still denying that house prices have dropped by 15% in Ireland MrMan?

was an obvious twist on words. I was making my observations based on the fact that house prices across the board have not come down to this level, I didn't mean that no properties have dropped and I thought that was obvious.

Referencing Limerick is totally misleading. It is miles cheaper than all the other main cities. Of course prices there have fallen by less. They never rose by as much either.

How is referncing Limerick misleading? It was to point out that the constant references to the property market seem to gloss over the fact that there are areas not in the same boat. It makes no sense to say that becaue prices are cheaper than the other main cities then the fall in price wouldn't be as bad. We are talking percentages here so the actual difference in value between cities shouldn't come into it.

 

[ntab2]

I don't suppose there are other 'experts' out there that can be rolled out to support differing arguments. Lets just say that I'm confident in my ability on how to use a calculator and I have actually been dealing with real life issues, I have dropped prices on some and not all houses, things that have been selling have not been in double percentage figures below asking (in most cases). But what would I know, eh?

But here you're confusing the drop in selling prices with notion of selling below asking prices. You don't need to sell 20% below asking prices to have a 20% drop in value from the peak. Asking prices have also come down.

 

[xman]

How is referencing Limerick misleading?

There are different measures of pricing. The nominal price is one, affordability is another. For example there would be nothing unsustainable about average house prices of €3 million euro, if average wages were €1 million euro.

Limerick is misleading because it is the most affordable housing market, as well the cheapest in nominal terms. Using the data from page 36 of this recent house price affordability survey http://www.demographia.com/dhi.pdf Dublin house prices would have to fall by 35% just to become as affordable as Limerick (3.5 times household income).

That is why Limerick prices have declined by less than the other cities.

We are talking percentages here so the actual difference in value between cities shouldn't come into it.

True, if affordability was the same in all the cities. But it's not. The cities with the higher (un)affordability have seen larger price declines. They also represent a much bigger proportion of the market and hence contribute more heavily to the overall picture.

 

[Bronte]

As we're allowed to discuss past & current prices here's my twopence worth in relation to another city. I don't know how far Dublin prices have dropped, Limerick has always been fairly steady, as they never hit the heady highs of other cities but I do know that Galway has dropped close to 20% in the last 12 months.

 

[MrMan]

But here you're confusing the drop in selling prices with notion of selling below asking prices. You don't need to sell 20% below asking prices to have a 20% drop in value from the peak. Asking prices have also come down.

It might sound that way but I assure you I am not confusing the issue here. We dealing with house prices on a daily basis, we monitor values in different areas and also evaluate which areas are selling best. I am aware of what the prices are and what areas have dropped and therefore their %drop. I also am aware of what the selling price translates to against the original asking price and I stand by my comments.

Limerick is misleading because it is the most affordable housing market, as well the cheapest in nominal terms. Using the data from page 36 of this recent house price affordability survey http://www.demographia.com/dhi.pdf Dublin house prices would have to fall by 35% just to become as affordable as Limerick (3.5 times household income).

I realise the affordability factor and also factor in the higher wages that can be obtained through working in the capital versus Limerick (on many cases). The reason I am saying referencing Limerick is not misleading is that the market is constantly refered to in general terms, for instance people in Limerick listen to the radio and hear market prices drop 15% and wonder why they can't get a cheaper house. I do believe that the generalisations aren't helpful.

 

[ubiquitous]

for instance people in Limerick listen to the radio and hear market prices drop 15% and wonder why they can't get a cheaper house. I do believe that the generalisations aren't helpful.

Surely it is a good thing if consumers are motivated to seek lower prices for their purchases? There would be very little sympathy for bakers if they moaned that consumers expect to be able to buy a loaf for 50 cent.

 

[MrMan]

Surely it is a good thing if consumers are motivated to seek lower prices for their purchases? There would be very little sympathy for bakers if they moaned that consumers expect to be able to buy a loaf for 50 cent.

Are consumers not always motivated to seek lower prices? The issue is that they inevitably expect that they can get a much cheaper price and are then left wondering 'how did that happen' when the vendor rejects their offer and another buyer comes in €10k over their heads. My point is that the misconception on price changes only slows down the process it doesn't alter it.

 

[ubiquitous]

If the net effect is to deter bidders from over-extending themselves by bidding the price of a property to an unsustainable level, then I would welcome it.

 

[MrMan]

So you feel that if people are being mislead its ok because it's for their own good?

 

[ubiquitous]

If they end up getting a lower price for the property (or avoid overpaying on the property by having the confidence to walk away and say "its too expensive"), yes.

 

[MrMan]

Fair enough, but if I was to say its ok to mislead people in order to get a higher price I take it you would disagree. Its generally better for all parties to be aware of the facts when entering negotiations.

 

[ubiquitous]

Fair enough, but if I was to say its ok to mislead people in order to get a higher price I take it you would disagree. Its generally better for all parties to be aware of the facts when entering negotiations.

But if people are led to expect to achieve a lower price, and they achieve this price, then by definition they are not being misled. If they don't achieve this price and they walk away and get that price on a similar property elsewhere, all the better for them.

 

[MrMan]

No they are being led to believe that the prices are dropping by x% when in fact the reality is probably half that. I have dealt with people who have been quite angry when I've told them that their offer is way off the mark and would not be realistic for the property. They tell me that they have 'other houses that we are looking at for that price' and inevitably within a few weeks they either up thier offer or somebody else surpasses them. What I have noticed since we were back in January is that less people are talking about 'the falling market' when they are viewing property so things are stabilising a bit. It would be great for buyers if prices plummeted, but when its not the case its not healthy to sit there and wait for it.

 

[xman]

for instance people in Limerick listen to the radio and hear market prices drop 15% and wonder why they can't get a cheaper house. I do believe that the generalisations aren't helpful.

Deary me. You just explain to them that because they were way cheaper to begin with, so they haven't come down by as much.

It ain't hard.

So back on topic. Property prices in Ireland are down 15-20% since Brendan O'Connor wrote his incredibly insightful smart ballsy article. Discuss.

 

[MrMan]

Deary me. You just explain to them that because they were way cheaper to begin with, so they haven't come down by as much.

Well if the explanation is as hard to get across as it is to you then I don't fancy the hardship.

So back on topic. Property prices in Ireland are down 15-20% since Brendan O'Connor wrote his incredibly insightful smart ballsy article. Discuss.

I admire your commitment

 

[Brendan Burgess]

This is just more of the nonsense which forced us to ban speculation about house prices.

All heat and no light. And abuse of other posters whose opinions you don't agree with.

Brendan