So was everyone living way beyond their means

krissovo · 8 Jan 2009

Yes but in a year or two the price of property will be back to two years ago and on paper you will be loaded again.

Sell them then and focus on looking after no1 (yes you!) in the present and not for you in 10 years time by trying to be greedy and making a killing.

Best of luck to you Sir and I hope you can pull through this tough time. Oh and I hope you secured the credit with a tracker rate.

krissovo · 9 Jan 2009

foghorn said:
I can think of nowhere tackier than Dubai; the only difference is, people who go there think it's classy.

I actually quite agree with you but I prefer the tackiness in Dubai than the shell suit mentality of Santa Ponsa

spfeno · 9 Jan 2009

chrisboy said:
I've exactly the same outgoings as you except i've a couple of "investment" properties too.. Problem is i only earn25k a year and cant really afford it!!

Classic

Bronte · 9 Jan 2009

Towger said:
I think I know him! Was/is his house a wreck as well?

No he lived in a very clean normal house, similar to those he rented but he had a Merc as well but he dressed like a farmer. I imagine nowadays he's living in a mansion. I learn a lot from observing him. It's amazing what goes on around you that most people don't see.

Bronte · 9 Jan 2009

krissovo said:
I actually quite agree with you but I prefer the tackiness in Dubai than the shell suit mentality of Santa Ponsa

What does that mean? I thought it was bikini's/skimpy in Spain and it's the Jilbab/dishdash (excuse my spelling) in Dubai.

charliemacck · 9 Jan 2009

MrMan said:
Hang on to your hysteria a moment and question why you think someone is at fault here? Why feel the need to blame anyone for a market crashing, did people give credit to 'vested interests' for the boom? My point all along is the blame game is fruitless and serves no point and that people do have to look at themselves and realise there own responsibilities.

You manage to contradict yourself within a single sentence - congratulations. Of course, you're indulging in the blame game too. It's just that, instead of putting blame on the vested interests - the media that pumped out property porn while barely managing any analysis of the property bubble, the economists with the various institutions who weren't brave enough to stand up against their employers, the government who didn't dare to anything that would interest with all the lovely property-related tax they were getting - you'd rather blame ordinary people who placed their trust in these institutions.

People now face huge debts from a multitude of differing borrowings not just houses, lets not forget the repayments on tvs etc were generally around 29%apr.

Erm, the absolutely worst that can happen to a person who can't afford to make payments on their TV is that they get the TV repossessed. Hardly as life-shattering as having their house taken away from them.

Maybe thats why you letters weren't published because if they were anything like the above statement they would be considered misleading, sensationalist, and above all else complete nonsense. Try counting to ten before posting next time.

Well, if you must know, it was a letter in response to a page-length adverts taken out by the vested interests in the Irish Times recently. I'll allow you and other to decide if it's misleading, sensationalist, or nonsense:

==============

As an erstwhile first-time buyer, I note that in a full-page advert in the Irish Times today, Marian Finnegan, Chief Economist of the Sherry FitzGerald Group, referred to a 30% drop in the price of second-hand Dublin residential properties as merely a "correction".

If this is a "correction", could Ms. Finnegan please tell us by what percentage house prices would have to drop before she considers it a property crash?

=============

Of course, having reading some of your past articles here, you are of the opinion that there is a media conspiracy to be bearish. I'll leave it up to others to decide if that is nonsense.

MrMan · 9 Jan 2009

You manage to contradict yourself within a single sentence - congratulations. Of course, you're indulging in the blame game too. It's just that, instead of putting blame on the vested interests - the media that pumped out property porn while barely managing any analysis of the property bubble, the economists with the various institutions who weren't brave enough to stand up against their employers, the government who didn't dare to anything that would interest with all the lovely property-related tax they were getting - you'd rather blame ordinary people who placed their trust in these institutions.

I guess it depends on how you wish to read a post, if by insinuating I'm blaming home buyers for their predicament then again you are wrong. By stating that people need to realise their own responsiblities means exactly that, they bought a house to live in and the value will go up and down and the cost of repayments will do the same, that is the case now and before. You are starting to sound like an opposition politician defending the ordinary man while all your doing is patronising.

Erm, the absolutely worst that can happen to a person who can't afford to make payments on their TV is that they get the TV repossessed. Hardly as life-shattering as having their house taken away from them.

Thr point i was making here is that people got into a trend of easy borrowing and this can be seen in the money makeovers by the level of credit card debt. It is these high interest borrowings on top of mortgages that are crucifying some people. Property VI's can't be blamed for all the debt that people are facing and again who is it that makes the decision to take it on?

Well, if you must know, it was a letter in response to a page-length adverts taken out by the vested interests in the Irish Times recently. I'll allow you and other to decide if it's misleading, sensationalist, or nonsense:

It was well written unlike your previous post.

Of course, having reading some of your past articles here, you are of the opinion that there is a media conspiracy to be bearish. I'll leave it up to others to decide if that is nonsense.

I don't remember mentioning the word conspiracy and we are in the middle of tough times, i don't have a definitive outlook on any market and I do accept counter arguments when they make sense.

The Pines · 13 Jan 2009

krissovo said:
Yes but in a year or two the price of property will be back to two years ago and on paper you will be loaded again.

You think that Irish property prices will reach mid-2006 levels again in a year or two???

Most people think they have at least another year or two of falling prices, I'd like to know your rationale behind that comment.

foghorn · 13 Jan 2009

The Pines said:
You think that Irish property prices will reach mid-2006 levels again in a year or two???

Most people think they have at least another year or two of falling prices, I'd like to know your rationale behind that comment.

Even more bizarre when you consider that, if prices have dropped 30%, they will have to rise 42% - 20% over 2 years (check the maths, folks) - to get back to their original figure.

If there is anyone who thinks that house prices are going to rise 20% a year in the current climate, when at the peak of the Celtic Tiger it was at most 8%, I have a bridge in Brooklyn I hope they will buy.

Padraigb · 13 Jan 2009

foghorn said:
...I have a bridge in Brooklyn I hope they will buy.

Have you reduced the asking price?

Do you do home deliveries?

foghorn · 13 Jan 2009

Padraigb said:
Have you reduced the asking price?

Of course not. Instead, I've hired Liz O'Kane to do it up for me.

cancan · 14 Jan 2009

krissovo said:
I have been living to my credit limit for the majority of my working life. I have gone from being a private in the military earning a very little amount and struggling to support my family to my existing role as solution architect for a major global outsourcing business where I earn a decent salary and a very decent 15 to 20% annual bonus and even bigger bonuses for a successful sale (one or two a year). The bottom line line is that come the end of the month I still have roughly the same amount of cash in the bank now as when I was supporting my young family as a junior soldier.

The only differences between then and now is that my credit limit has dictated the home I live in, the car I drive, the size of TV, the holidays I take, meals out etc etc....

Take my car, in 1990 I drove a renault 21 estate that was on its last legs. I now replace my BMW 5 series every two years. For holidays, in 1990 I used to camp for two weeks in the summer in west Cork or Kerry and I now visit Dubai or the Caribbean for 10 days every February as well as decent holiday in the summer in a nice location so no Malaga, Majorca or other tacky resort. My home has gone from a one bed apartment where I slept with my soon to be wife (now ex) and our baby at the end of the bed to a swanky appartment in the city with my girlfriend and I am building my dream 4 bed home and a nice piece of land with all mod cons mostly funded by my credit limit.

I could go on but my point is you have to live life for the moment not for planning hording funds (pension, property, shares, hedge fund etc etc) for any number of senarios that may or may not happen and sit on cash that could dissapear with any number of events like a bank crash or bad exchange rate and so on.

Live life and enjouy it! You only get one shot at living so make the most of it! If the worst happens so be it but be possitive and you will continue to live.

Take care everyone, I wish you all the best during this tough period but IMO its mostly media hype that it causing this downturn and causing mostly needless worry!

I am assuming this a pi^^take?

Worryingly, it appears not to be. Poster boy for the tiger? Gordon Gekko's irish cousin, or walter mitty...

I now replace my BMW 5 series every two years

V’s

I have not had the pleasure of the 5 series but I had a similar 3…

I now visit Dubai or the Caribbean for 10 days every February.............but I prefer the tackiness in Dubai

V’s

Did this for 6 months and could not stand Dubai any longer.

I have been living to my credit limit

v's

I ripped up my credit card last year

I could go on but my point is you have to live life for the moment not for planning hording funds (pension, property, shares, hedge fund etc etc)

V’s

The stock market is worth investing in but there are short term investments and long term…I have invested €23k in a similar scheme…..About 3 months ago I bought £20k of Yellgroup shares

its mostly media hype that it causing this downturn and causing mostly needless worry!

V's

when do you think the credit crunch will end ........ but I fear for Ireland that it could be nearer 2020

colm5 · 16 Jan 2009

charliemacck said:
Absolutely. David McWilliams was just on RTE Radio 1, and you could hear the anger in his voice at the fact that vested interests, who continually denied there could be any truth in his opinion, now pretend the problems we are facing could never have been foreseen. They fall back on the pathetic argument that because McWllams and co never gave a precise date and time for the crash, that they were just crying wolf. An argument similarly to an obese man, continually warned he will have a heart attack if he continues his habits, deciding that the doctor is wrong because he can't tell him when the heart attack will happen. There are many people, some prominent on his forum, who owe us and especially the young people of Ireland, an abject apology for directly contributing to the hysteria of the bubble.

This is spot on..The people who called it and are still calling it are been targeted as crying wolf and lucky. Morgan Kelly was laughed at (and is still being laughed at..) but he is bearing fruit and I have no doubt he will continue too..

csirl · 16 Jan 2009

solution architect for a major global outsourcing business

This sounds like one of those bs jobs that only exist during boom times

Conan · 16 Jan 2009

Certain economists now seem to be trying to outdo each other is predicting how bad its going to get. Just as other economists overinflated the upside when things were going well, it now seems to be a competition as to who can predict the greatest downturn (David McWilliams, Morgan Kelly, Goerge Glee etc).
However I think we should be careful that certain economists in glasshouses dont end up making things even worse in their rush to say "I told you so".
It certainly is the case that the actions of a few (at least) have contributed to or exacerbated the Celtic Collapse. If they (e.g. Anglo) cannot be prosecuted for fraud/misleading investors etc, then their actions have certainly damaged the State so perhaps we can consider a case for treason.
Certain economists say that we cannot talk ourselves out of a recession but yet accuse others of talking ourselves into a false boom. Perhaps in the rush to garner headlines we could all adopt a somewhat more patriotic stance. We may not be able to talk ourselves out of a recession but equally can we stop the headlong effort to talk ourselves into a depression.
If Morgan Kelly and Joe Higgins have their way we will become the European equivalent of Cuba. Oh how they think their time has come. If we have to have Marx, I vote for Groucho.

Eblanoid · 16 Jan 2009

csirl said:
This sounds like one of those bs jobs that only exist during boom times

Pah, solutions architects are so passé! It's the architectural solvers who earn the big bucks now!

charliemacck · 16 Jan 2009

Conan said:
However I think we should be careful that certain economists in glasshouses dont end up making things even worse in their rush to say "I told you so".

Ah right. Yet another person who think we talked ourselves into a recession.

Certain economists say that we cannot talk ourselves out of a recession but yet accuse others of talking ourselves into a false boom. Perhaps in the rush to garner headlines we could all adopt a somewhat more patriotic stance.

Maybe Bertie had the right idea, and all critics of the government should commit suicide.

If Morgan Kelly and Joe Higgins have their way we will become the European equivalent of Cuba.

Because of course, anyone who predicted the demise of the property bubble must have been a communist.

God, if this ****e the best that the bulls can come up with?

MrMan · 19 Jan 2009

Ah right. Yet another person who think we talked ourselves into a recession.

Well apparently we were talked into a bubble so why not the reverse?

skatter · 31 Jan 2009

I had a conversation abot ten years ago with an accountant friend who works for the central bank...coming from Canada I explained to him that the 'American way' was to start young and build a credit rating using credit cards (given out at University!!)...making monthly payments of the minimum payment plus a bit but not paying off the whole as to get a good credit rating you need also to allow the credit provider to make money through interest...He explained that in Ireland you need to pay off the card each month to attain the good rating....It would seem to me that there was a radical change in the Irish psychi with regard to credit management. Did we start thinking the American way? I believe that many people thought that releasing (expected) capital on property would cross the t's and dot the i's....the thinking was that the boom wouldn't end and that money was cheap (low interest) and equity would prevail over any overspend....I know of a family with a combined income of 60k who bought a house in 1987 for 67k and have a mortgage today of 450k...their home was valued at 1.2 million two years ago but it wouldnt sell today. They grew their mortgage borrowing on 'equity' and have lived well in the past ten years with new cars, kids in private school and two vacations per year...now they are in trouble because a 450k mortgage with a 60k income is crushing...BUT the banks did let them get this far and although they were irresponsible the banks should not have allowed them such freedom with 'supposed' equity.

CJPC · 31 Jan 2009

As someone who bought at pretty close to the peak of the property bubble (Sept 06), I can now say I was living beyond my means.

Wasn't long into my first job then and thankfully still working away, so the mortgage is being paid, but it's fairly hefty to say the least. And I just got a pay cut.

The real killer is seeing what I could get for the same money now and, as well all know now, the are prices are going to keep tumbling down for a while. I won't darken daft's door for a while.. too painful!

I don't blame banks or auctioneers etc for what I did. I spent a while kicking myself, but have given up now, what's the point, just going to do my best with the situation as it stands.

My gripe is with the revisionists (and there's quite a few on here too) who think everyone in my position, while I'll admit I made a personal mistake, was some crazy, property obsessed maniac pushing this country over a cliff edge.

It's amazing (in hindsight) how many people reckon they saw it coming! Fair play to David McWilliams and a few other economists/commentators, they were right, took the flak from the cheerleaders (who outnumbered them about 1000 to 1 at a conservative estimate) and stuck to their guns.

But a lot of those same cheerleaders who have belatedly joined a now massive chorus are wrecking my head claiming that it was all so obvious, it was crazy, what were you doing?!! etc ad infinitum

Yes, the severity of the situation should be laid bare, but these particular idiots still can't see it, have nothing constructive to say whatsoever and have just hopped onto the other bandwagon.

Leaving that aside, the big trick for me and many others now will be coping with the old (massive mortgage) in the 'new economic reality'.

So was everyone living way beyond their means

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