Property market overvalued

The South African market has peaked.

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The Irish Times reports that the rise in house prices was 1% for the first quarter. I think investors will definitely have to think twice from now on.
 
Fly said:
The Irish Times reports that the rise in house prices was 1% for the first quarter. I think investors will definitely have to think twice from now on.
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That would really depend on whether they are buying for capital appreciation (really speculation I suppose) or for rental income.

The gist of the survey referred to (ptsb/ESRI) was that the rate of growth is slowing, not that the market has peaked.

A few articles I have seen read recently where fund managers have been interviewed suggest that they see little value to be had in the Irish property market at the moment (whatever about residential property....)
 
American foreclosures are up 50% in one month, 1 million mortgage holders are late on payments last month, half went into foreclosure.

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Professor of Economics at Yale,

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HB1 said:
It could be still a wise decision to invest in houses/appartments provided these real estates are of low maintenance/cost to those who are renting/buying them.

The target is the Zero energy/A-rated house.Paying for energy and maintenance could be soon unaffordable for most whilst they paying for the rent or mortgage as well.So taking one (un-! )predictable costfactor out of the mind of the potential occupier will certainly make a property most attractive.Pay the rent and nothing else.Minister Noel Dempsey has-as far as I understood foreign press releases of last week-something like that in mind.Small scale producers of alternative energy will get a fixed amount for each kilowatt of solar energy.So instead of wasting money on pebble dash and paint to cover the facade every couple of years one can generate an income on it.What of course will lower the maintenance cost and make the building atractive...About a dozen nations are going this way already.With the result that buildings equipped with solar technology are fetching the highest prices on a free market.I don't know of any zero energy building in the modern world that is standing empty.
heinbloed
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I'm sorry, perhaps it's just me, but all this talk of it being a good time to invest in property and stuff about solar energy and no zero energy building in the modern world etc. has just reinforced my belief that you have to be <enter_appropriate_word> to invest in Irish property today.
 
Totally agree with previous post, the yield is going to further decrease in my opinion as rents are still dropping on the whole. With a rise in interest rates coming late this year or early next year this will only add further pressure. There doesn't seem to be any let up in the amount of new units coming on stream especially in very rentable areas such as the city centre
 
A new draft has been published today . Due to new legislation an energy pass is required for all transactions on buildings from the first of January onwards. That will take many of them out of the market if they are not changed to be more competitive.And,as it is says in the draft paper,Ireland has a serious shortage of competent persons who can issue such an energy pass.If home owners wait untill January to sell their property than there could be a waiting list of years.Together with falling prices in the home market this combination would mean more loss than there would have been . See
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UK prices seem to be rising slightly again:

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Douglas Newman Good's calculation of 5% doesn't reflect Permanent TSB's 1% growth in house prices over the first quarter of 2005. I guess when you take the huge market as a whole, you're always going to have variations but this a 500% difference in the end figure is bizarre!
 
I think the difference is that the DNG report refers to 5% growth in Q1 in Dublin, but the other report related to the whole country - read the reports first paragraph

However, I find it hard to believe that the Dublin market gre 5% in the quarter
 
Sorry, I was referring to the Dublin market. Permanent TSB say that the dublin market rose by 1.5%, where as DNG say it rose by 5% for the first quarter. It's still a huge difference.
 
Unregistered said:
I think the difference is that the DNG report refers to 5% growth in Q1 in Dublin, but the other report related to the whole country - read the reports first paragraph

However, I find it hard to believe that the Dublin market gre 5% in the quarter
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I've been looking at buying since Christmas and prices have made a serious jump up in Dublin.
 
Don't we also need to factor in to this discussion that since November last year 50,000 people from the new accession countries to the EU have come to Ireland ... they all need somewhere to sleep.
 
Property and its relative value to people's need to house themselves.

1 luxury houses on ailesbury - most margin for drops - what five or six million?

2 remote second holiday homes - cliff drops if first home mortgage in danger

3 shoebox high density in middle of no where - large drops

4 two bed apartments for more than a semi in same area - large drop potential

5 family homes (three / four bed, parking and gardens) WITHIN M50 in south dublin - get real , the jobs / income is in dublin - these are the stable ones

eg my humble estate in rathfarnham d16, three bed semi 250 spring 2002, 425 plus now 30-40 of that in 2005 alone - glad I own several of them.

It is time people stopped scare mongering, kopped on to some of the garbage property out there and concentrated on what is important - location and home quality. In a downturn, people will sacrifice to hold on a decent home.
 
Sherry Fitzgerald agree with Douglas Newman Good's figures of around 5% for the first quarter in Dublin. I'd say this is a more accurate figure than PTSB's 1.5% based on how I've being continually outbid for the last four months:

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some of Property market overvalued

Unregistered said:
Property and its relative value to people's need to house themselves.

It is time people stopped scare mongering, kopped on to some of the garbage property out there and concentrated on what is important - location and home quality. In a downturn, people will sacrifice to hold on a decent home.
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Well observed.

If there is a downturn it will of course be relative . Some sectors could tank badly while the quality trader upper property such as the 3 bed in Rathfarnam with funny oul things like schools nearby, inside the M50. will remain in short supply relative to overall demand .

I would say from observation and anecdotal evidence that most people I know with kids in Galway are moving out of town. The Irish 30-40 somethings who bought their PPR semi in town are heading to the countryside where the schools are not maxed out like they are in the city.

The city is being left with students and singles and migrant labour ...from wherever that may come, Cavan even :) . Thats because the mature Rathfarnam - ish areas in Galway are small....given how small Galway was 25 years ago compared to now .

Most of these mover outers are changing PPR not investing though .
 
Unregistered said:
eg my humble estate in rathfarnham d16, three bed semi 250 spring 2002, 425 plus now 30-40 of that in 2005 alone - glad I own several of them.
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I really like Rathfarnham. Close to the mountains and close to the city. However, I still think that prices there - like everywhere else - have risen to match historical low interest rates - i.e cheap money.

If interest rates double over the next couple of years to 4% (still very low, but interest payments will double) then these houses obviously become even less affordable and the price will likely adjust to those conditions.

During the last property crash in London not even the most sought after locations escaped.

Having said that I would happily live for years and years in Rathfarnham even if I did have to endure a period of negative equity. But the way I look at it is that if I'm buying for the long term then why not wait a year or two to see the impact of higher interest rates. Most experts/commentators think the days of big gains in house prices are over so the waiting strategy does kinda makes sense.

"House prices are a matter of opinion....Debt is very real ! "
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To see the impact that interest rates can have, consider an area like St.Albans outside London.

Just over a year ago every type of property was being "snapped up" as the estate agents like to say. This is a desirable residential area - lovely homes and a nice environment.

Interest rates rise to just a mere 4.75% and then reality arrives.

Prices fell by over 9% on average in the last 3 months alone of 2004 !!

We are enjoying the 2% interest rates at the moment but as someone said we've had the carrot now all that's left is the stick !
 
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