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Housing Bubble Bursting
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In relation to commuting I have to say I feel very sad for our generation. The property mania of the last few years has resulted in the displacement of a whole generation and the associated costs (both social and monetary) will be felt throughout this country for many years to come.
I believe T Collins makes a very good point but the problem is that most commuters believe they won't be commuting for their entire working lives and therefore do not consider the longterm costs of commuting.
The property porn industry had them believe that they would only be buying in commuterland temporarily and would then be selling their legoland property with a large capital appreciation "profit" and would then be able to buy near where they grew up and where their original social network was. Unfortunately many of these people will soon realise that this isn't going to be possible for some years to come and that's when the most important factor of our bubble will disravel - the sentiment and belief that we have choice.
But back to the point that T Collins made - can I put to you that people have not considered the cost of commuting because
1) they though it was temporary
and 2) they could not bear to think it could be anything but temporary?
Femgem0 -
TCollins wrote:Also said he isnt really bothered about capital appreciation, though he would like some...
...I would be careful about lumping all of the investors into the same circumstances. Each individual investors circumstances are wide and varied. But Interest rises seems to be a non issue to all of them i've spoken to who do have a mortgage outstanding. And none of them are worried about capital appreciation as they are in it for the long term.
I think we should credit investors in general with more brains and more money than we usually credit them with.
This is his nest egg, he's sitting on that for capital appreciation. He doesn't plan to rent it out, since why bother? Its earning money just sitting there, in his mind. But oh dear, look at that, the year on years for 2007 come in, and his nest egg has dropped in value to €450,000! Inconceivable! And whats more, the interest rates are ratcheting up in a never-ending cycle, making the house even less valuable!! Hes starting to feel the pinch with the equity he took out for that new beemer for god's sake!
So he panics and puts it up for sale to limit his damage, as any reasonable person would do, around the exact same time as tens of thousands of other people in the same position arrive at the same conclusion. So, of course, no sale.
Resigned but determined, our brave specuvestor puts that apartment or house up for rent, in an effort to at least pay off part of the mortgage. But sadly, build rates are way down, and so migrants employed in construction and related businesses are leaving the country with their boom euros, and of course, tens of thousands of others arrived at the same conclusion as him, simultaneously. The end result of which is that its damn hard to get anyone renting, and rental rates drop.
This is where the property collapse will heavily impact even buy to let types, if they are depending on their property for income...
In cases like your landlord friends there, where he already has the mortgage paid off and isn't depending on rental income, well thats great for him, but I'd class him in the distinct minority, especially given the large percentage of investors taking out loans over the last three years. What was it in 2006, 40%?0 -
SimpleSam06 wrote:Okay, you need to differentiate between investors and buy-to-letters, they are a different breed. Your average investor has a mortgage on his half million home, probably mostly paid off, and he has another half million just taken out in 2003 on a four bed semi somewhere.
This is his nest egg, he's sitting on that for capital appreciation. He doesn't plan to rent it out, since why bother? Its earning money just sitting there, in his mind. But oh dear, look at that, the year on years for 2007 come in, and his nest egg has dropped in value to €450,000! Inconceivable! And whats more, the interest rates are ratcheting up in a never-ending cycle, making the house even less valuable!! Hes starting to feel the pinch with the equity he took out for that new beemer for god's sake!
So he panics and puts it up for sale to limit his damage, as any reasonable person would do, around the exact same time as tens of thousands of other people in the same position arrive at the same conclusion. So, of course, no sale.
Resigned but determined, our brave specuvestor puts that apartment or house up for rent, in an effort to at least pay off part of the mortgage. But sadly, build rates are way down, and so migrants employed in construction and related businesses are leaving the country with their boom euros, and of course, tens of thousands of others arrived at the same conclusion as him, simultaneously. The end result of which is that its damn hard to get anyone renting, and rental rates drop.
This is where the property collapse will heavily impact even buy to let types, if they are depending on their property for income...
In cases like your landlord friends there, where he already has the mortgage paid off and isn't depending on rental income, well thats great for him, but I'd class him in the distinct minority, especially given the large percentage of investors taking out loans over the last three years. What was it in 2006, 40%?
Don't forget that many of said investors probably have interest-only mortgages too which makes their predictament even stickier.0 -
Join Date:Posts: 30614
Femgem wrote:But back to the point that T Collins made - can I put to you that people have not considered the cost of commuting because
1) they though it was temporary
and 2) they could not bear to think it could be anything but temporary?
Femgem
I'd add another category into your groups above- those who bought a few years ago- in the likes of Lucan Village- where the public transport was great, roads were fine, amenities were present for those growing up, school places were to be had whereever you wanted them, local shops selling local produce were thriving, there was a good allround sense of community spirit. In the past 3-4 years the population in places like this hasn't doubled, its actually increased 7 fold, it can take over an hour to actually get out of the village at all- irrespective of whether you are using public or private transport, and several distinct subcommunities are battling with the Department of Education and other entities over the non-provision of promised resources.
Meanwhile you get the likes of Adamstown thrown into the equation- with its railway station being touted as the answer to all problems. But..... try hopping on a train there in the morning- they are full long before they ever get there. Its simply a station on a pre-existing busy commuter line. So- 22,000 new homes with their average 1.5 cars each hit the N4 and produce yet more chaos. South Dublin County Council respond with a strategy blocking these 22,000 homes from access to the N4 (not implemented yet) by closing the junction at the Newcastle road on the N4. Local businesses complain to their councillors as this will cut them off from Lucan village, and add yet another nail into the coffin of their claiming to be part of Lucan Co. Dublin, and not Dublin 24 (or even Dublin 22 as some enterprising folk in Balgaddy are trying in a damage limitation exercise).
So the council opens an outer relief road- without proper consultation, to try to mitigate congestion on roads that were never designed for their current traffic (much less the extra traffic that will hit them in the next two years). Suddenly- half of Tallaght and Clondalkin think its a great idea to rat-run across to the N4 instead of getting stuck at the Red Cow round-about. Queue- traffic jams for up to 2 hours in the evening onto Main Street Lucan, and at the Woodies Flyover. So- what happens next- well, if the flyover is busy- lets double its size and move the bottle neck somewhere else (from past experience probably about 100 yards further down the street).
Meanwhile- try calling South Dublin Co.Co. with a query about the traffic problems in Lucan village- its blamed on Fingal Co.Co. putting lights on the bridge in Lucan village- the boundary between the council areas.
ArrrrghhhhhhH!!!!!!!0 -
Duckjob wrote:Don't forget that many of said investors probably have interest-only mortgages too which makes their predictament even stickier.0
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Duckjob wrote:Don't forget that many of said investors probably have interest-only mortgages too which makes their predictament even stickier.
... and that some of those mortgages were taken out as part of equity release on an existing property - so they're going to be hit on the double if the prices of both properties fall. Not nice.
D.0 -
Your all just a bunch of whingers - there is loads of value to be had in the property market. The country has never had so much money, the economy is booming and we are creating loads of jobs. A measly .25% of an interest rate isnt going to do any harm.
For example great deals are to be had:
http://www.myhome.ie/search/property.asp?id=314632&np=&rt=search&searchlist=
http://www.daft.ie/searchsale.daft?id=231733&search=1
http://www.warrenestates.com/C216LFK.htm
only 150,000euros
http://www.daft.ie/searchsale.daft?id=236346&search=1
http://www.daft.ie/searchsale.daft?id=203397&search=1
only 120,000euros
http://www.hassett.ie/admin_PropertyBrochure.asp?p=963&n=4
3 bed in Dublin only 300,000
http://www.daft.ie/searchsale.daft?id=192672&search=1
2bed for only 70,000 euros
http://www.daft.ie/1231478
bungalow in Dublin for 325,000
http://www.myhome.ie/search/property.asp?id=298796
So as you can clearly see its a buyers market and bargains are to be had you should really buy now before the market picks up and you regret it!0 -
Deleted User wrote:only 120,000euros
http://www.hassett.ie/admin_PropertyBrochure.asp?p=963&n=4
So as you can clearly see its a buyers market and bargains are to be had you should really buy now before the market picks up and you regret it!
Oh Jaysus!! Thats the worst I've ever seen! Ye could build that for about €100!0 -
smccarrick wrote:I'd add another category into your groups above- those who bought a few years ago- in the likes of Lucan Village- where the public transport was great, roads were fine, amenities were present for those growing up, school places were to be had whereever you wanted them, local shops selling local produce were thriving, there was a good allround sense of community spirit. In the past 3-4 years the population in places like this hasn't doubled, its actually increased 7 fold, it can take over an hour to actually get out of the village at all- irrespective of whether you are using public or private transport, and several distinct subcommunities are battling with the Department of Education and other entities over the non-provision of promised resources.
Meanwhile you get the likes of Adamstown thrown into the equation- with its railway station being touted as the answer to all problems. But..... try hopping on a train there in the morning- they are full long before they ever get there. Its simply a station on a pre-existing busy commuter line. So- 22,000 new homes with their average 1.5 cars each hit the N4 and produce yet more chaos. South Dublin County Council respond with a strategy blocking these 22,000 homes from access to the N4 (not implemented yet) by closing the junction at the Newcastle road on the N4. Local businesses complain to their councillors as this will cut them off from Lucan village, and add yet another nail into the coffin of their claiming to be part of Lucan Co. Dublin, and not Dublin 24 (or even Dublin 22 as some enterprising folk in Balgaddy are trying in a damage limitation exercise).
So the council opens an outer relief road- without proper consultation, to try to mitigate congestion on roads that were never designed for their current traffic (much less the extra traffic that will hit them in the next two years). Suddenly- half of Tallaght and Clondalkin think its a great idea to rat-run across to the N4 instead of getting stuck at the Red Cow round-about. Queue- traffic jams for up to 2 hours in the evening onto Main Street Lucan, and at the Woodies Flyover. So- what happens next- well, if the flyover is busy- lets double its size and move the bottle neck somewhere else (from past experience probably about 100 yards further down the street).
Meanwhile- try calling South Dublin Co.Co. with a query about the traffic problems in Lucan village- its blamed on Fingal Co.Co. putting lights on the bridge in Lucan village- the boundary between the council areas.
ArrrrghhhhhhH!!!!!!!
I disagree with you.
I live in Lucan and I quite categorically say that my commute is getting much easier now than it used to. In fact once the outer ring roadworks are complete by woodies then it will be great with a bus lane all the way into the city. In my previous job, the opening up of the present outer ring road cut off a lot of time off my journey.
As for the village itself, well unless someone can magically come up with new roadspace then there's not a lot to be done.0 -
Join Date:Posts: 30614
jimmycrackcorm wrote:I disagree with you.
I live in Lucan and I quite categorically say that my commute is getting much easier now than it used to. In fact once the outer ring roadworks are complete by woodies then it will be great with a bus lane all the way into the city. In my previous job, the opening up of the present outer ring road cut off a lot of time off my journey.
As for the village itself, well unless someone can magically come up with new roadspace then there's not a lot to be done.
Having grown up in Lucan- all I can describe the village as is a disaster area. Short of restricting access to the village altogether, to local traffic only, there is not a lot that can be done.
Vis-a-vis the ring road- its fine for everyone coming from Tallaght/Clondalkin, and all the new estates over that way- but a headache for everyone else (and one of the major causes of the N4 bottleneck at Woodies). The proposal to close the Newcastle junction altogether- will serve to esacerbate this- by putting over 20,000 more vehicles onto the ring road at peak times. Its now not unusual for the Woodies slip to be backed all the way to the M50/N4 (junction 7) interchange in the evening- and for the N4 itself to be back past Leixlip in the morning (hopefully we will have a few months peace over the summer though!)
As for the village itself- its public transport has been degraded in order to better supply transport to the "Lucan South/D24" area. Over the past 10 years the number of buses directly servicing the village has fallen by a little over 50% (and most of those are now through buses servicing Maynooth/Leixlip/Celbridge, as opposes to buses going down mainstreet).
The big problem for everyone is lack of reliable, frequent public transport (with sufficient capacity to cater for everyone).
It really is a case of robbing Peter to pay Paul.......0 -
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Afuera wrote:Or emmigrate... becoming easier and easier these day thanks to the EU.
Ah right. So you effectively want us to go back a few decades to the 70's and 80's when most of the countrys young talent were leaving the country to find decent jobs. Only now they are leaving because they can't afford to buy a house. Regarding of your feeling on the matter, it might be slightly better for house prices to drop to what any sane person would consider to be reasonably affordable.0 -
jesus_thats_gre wrote:Ah right. So you effectively want us to go back a few decades to the 70's and 80's when most of the countrys young talent were leaving the country to find decent jobs. Only now they are leaving because they can't afford to buy a house.jesus_thats_gre wrote:Regarding of your feeling on the matter, it might be slightly better for house prices to drop to what any sane person would consider to be reasonably affordable.0
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jesus_thats_gre wrote:Ah right. So you effectively want us to go back a few decades to the 70's and 80's when most of the countrys young talent were leaving the country to find decent jobs. Only now they are leaving because they can't afford to buy a house. Regarding of your feeling on the matter, it might be slightly better for house prices to drop to what any sane person would consider to be reasonably affordable.
Never mind the 70's and 80's i think we would have to go back to the famine to see the mass emigration that would be required to have a big effect on rent prices.0 -
nope to see a big effect on rentals all you will have to se is the migrant workers that will be out of a job move on to new countries when the easily quantified 40,000 - 60,000 jobs are lost in construction over the next two years
coupled with investors taking their properies off the for sale market as they can no longer keep paying mortgages on them without tenants due to rates and he general high cost of doing so anyway and you have your nice big effect on the rental market all wrapped up in a little bundle0 -
miju wrote:nope to see a big effect on rentals all you will have to se is the migrant workers that will be out of a job move on to new countries when the easily quantified 40,000 - 60,000 jobs are lost in construction over the next two years
I actually don't think it will be the migrant workers who will suffer the brunt of the job losses. For starters Irish workers still dominate the bulk of construction employment. The migrant workers are more likely to be competitively priced compared to our native tradesmen and labourers and are therefore likely to be kept on and the Irish sacked instead.
In the areas where migrants have a stronger foothold, such as down your local Centra, the migrants in general have an understanding of what "customer service" is, whereas many of our native brethern begrudge the idea of being paid minimum wage in order to "serve" others. What business will let go it's best staff in order to give a Paddy a job for the sake of it?
From reports in the local press what we unfortunately already see is a rise in racial attacks as unemployed locals resent the presence of migrant workers taking "their" jobs!invest4deepvalue.com
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Do-more wrote:What business will let go it's best staff in order to give a Paddy a job for the sake of it?Do-more wrote:From reports in the local press what we unfortunately already see is a rise in racial attacks as unemployed locals resent the presence of migrant workers taking "their" jobs!0
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SimpleSam06 wrote:What country are you living in?
see this pre-election report from primetime (8 mins/realplayer). I have witnessed five physical attacks take place this year and intervened in one plus several verbal attacks and so far it appears to me to be mostly young Irish men (late teens, early twenties). In fact the Indian/pakistani's I know here have a label for the type of person they actively seek to avoid "chunkies" (teenager wearing tracksuit and baseball cap or hoodie).
Apologies for going off topic, but on a small level racist attacks are happening here in Ireland and the normal excuse given by those carrying them out is "they are taking our jobs".Net Zero means we are paying for the destruction of our economy and society in pursuit of an unachievable and pointless policy.
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this is especially amusing when you consider the likelihood of the tracksuity types ever having had a job is almost nil in the first place.0
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Pa ElGrande wrote:see this pre-election report from primetime (8 mins/realplayer).Pa ElGrande wrote:I have witnessed five physical attacks take place this year and intervened in one plus several verbal attacksPa ElGrande wrote:Apologies for going off topic, but on a small level racist attacks are happening here in Ireland and the normal excuse given by those carrying them out is "they are taking our jobs".
Our more enlightened European neighbours have race riots and gulag camps to hide their refugees away in. In its brief history of immigration, Ireland has been an outstanding example of tolerance and welcoming behaviour.0 -
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Anyone else think that in a period of
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increasing mortgage interest rates (circa 5%)
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relatively high inflation (circa 5%)
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low capital growth rates (annualized 1-2% max)
A second major fault with the 1975 Act is that it does not distinguish between real gain and paper gains resulting from inflation, which means that a person could be taxed on a purely nominal gain when disposing of an asset whereas in real terms he had made a loss on the disposal.0 -
it is a kick in the teeth alright but with that said any real savvy investor would know this as well as knowing that this is simply the nature of the beast and prices go down as well as up. thus you run the risk of this "paper inflation" effect
unlike the current lot of "savvy" investors0 -
miju wrote:it is a kick in the teeth alright but with that said any real savvy investor would know this as well as knowing that this is simply the nature of the beast and prices go down as well as up unlike the current lot of "savvy" investors
Sure isn't everyone a savvy investor when the market is going up? :P0 -
http://www.independent.ie/business/personal-finance/first-time-ire-696845.htmlThe sad fact is that fewer and fewer new buyers are succeeding in getting approval for a mortgage.
Figures out last week showed that there was a 10pc decline in the number of first-time buyers taking out mortgages in January, February and March of this year.
Is it really the case that the 10% drop in FTB mortgages is due to mortgage applications being rejected by the banks ? Or could it be that less FTBs are actually applying ?If rates rise another two to three times, as some economists are predicting, first-time buyers will find it harder to get their feet on the first rung of the housing ladder.
Is anybody else getting sick of the property "ladder" metaphor and its implicit connotations? There is no recognition in this article that the property market is a system comprising of buyers and sellers.
The article includes a number of "helpful" hints (such as buying with a friend or using sub-prime lenders) but ignores the most obvious option; wait for a year and see what the market is like then. In fact the 10% reduction in mortgages seems far more likely to have been caused by this very phenomenon and the article seems like an attempt to counter this effect.
davej0 -
davej wrote:The article includes a number of "helpful" hints (such as buying with a friend or using sub-prime lenders) but ignores the most obvious option; wait for a year and see what the market is like then.
"If you want to buy a property which will cost you more than you can get loan approval for then consider purchasing with a friend." -> I'm surprised no bank or estate agent has suggested potential FTBs should consider whether they really need two kidneys, and whether they should consider selling one to buy a badly built hovel in some new estate in Leitrim.
All this talk about "misfortunate FTBs who can't get on the ladder" should really be translated into "help! No-one is paying the huge prices we need to keep the estate agents in BMWs".
The savvy FTB should be sitting on the fence watching the panic from a distance. Besides, with the stamp duty changes coming through, you wouldn't want to waste your unlimited FTB stamp duty exemption on a so called starter home.0 -
Would my management company be using 'high inflation' as an excuse to raise its fees by 20% in the space of 12 months ? or are they just a bunch of cowboys. They are really taking the piss this year ! but you get the feeling that no matter what area of business you look at on this island, someone is out to stiff you in return for a shoddy or non-existent service.
I cannot understand how it can go from 1200 to 1500 for a small apartment complex outside Dublin, with mostly 1 bed apts ?, doesnt add up.
As for housing down the country, I know certain people who bought two or three properties in the midlands, and cannot make their money back on the them, due to low rent yields, which they are blaming on the influx of immigrants into these areas and the abundance of empty properties to choose from. They have also been unable to sell them on, but I suppose that's the risk you take.0 -
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A Random Walk wrote:None of the VIs make money if you sit on the fence and watch the prices dropping
"If you want to buy a property which will cost you more than you can get loan approval for then consider purchasing with a friend." -> QUOTE]
This has been common practice in the UK since the 90's, its a very good way of getting on the property ladder, but when you mention it to people here they give you a funny look.
p.s. is that name taken from the 'wall street' book ? .... good book !.0 -
Is this the future for many of Ireland's current developments?
http://www.winknews.com/news/local/7896352.html?video=YHI&t=a0 -
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Sharp drop in employer job plans
The weakest sector in the survey was finance, insurance, property services and business services
http://www.rte.ie/business/2007/0612/labour.htmlMotor drop holds back sales growth
The Central Statistics Office said the volume of sales was up 0.6% from March, giving an annual increase of 7.5%. But the monthly increase would have been more than 3% if a 4.4% drop in motor trade sales had been excluded.
A breakdown showed that sales of hardware, paints and glass jumped by almost 16% in the month,Rates rises hitting Qualceram sales
The chairman of bathroom products maker Qualceram has told shareholders that trading in the first four months of the year has been affected by rising interest rates and the housing slowdown in the Irish market.Kingspan founder's €50m share sale
The founder and director of building materials group Kingspan, Brendan Murtagh, has sold a third of his holding in the company for €50m.
It is thought he will be investing in a property fund run by developer Howard Holdings. He still owns 2.8% of the firm.IEA lifts oil demand forecast by 2%
'It seems difficult to escape the conclusion that the oil market will be tight in the second half of the year,'0
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