Property Bubble Going to Burst?

RoundyMooney

MorningStar wrote:

Anybody who thinks their speculative view makes them the smart one and other views the fool must have a problem understanding the nature of sepculation.

LOL! Many a man (or woman) has lost the shirt off their back thinking that they could predict the future.

MorningStar wrote:

Rent yields do not determine house prices demand does and always will. Rent yields may effect demand.

Demand is indeed the key, and there seems to be little let up.

MorningStar wrote:

On you beleif that imigration does not effect things HOK are saying in Property view that 32% of their sales are to new imigrants. The governemnet also released figures saying how the people will be staying.

I have to admit, I found this very surprising when I heard it reported. Were I a Polish guy working here, given the value of property back in Cracow or wherever, I wouldn't dream of buying here when I could do five years hard labour and set myself up back home.

MorningStar wrote:

Now play nice or I'll have to point out other issues about how this is all opinion and the only foolish people are those who beleive the media such as SBP

Only a fool would believe everything they read. I remember the Meeja predicting a bust as far back as 99, and we all know what happened then...

ronbyrne2005

MorningStar wrote:

One big difference is property has a construction cost and is required to live. Dotcoms were all paper value. Try to get a house built and see how expensive it is. The bricks are expensive and have value. Dotcoms didn't have any assets. THe fundementals you are talking about are cost, supply and demand. People don't have to own there house so maybe what has to give is the belief that people can buy houses rather than a crash so people can buy them. Yours is a view that appears to be based on that it just can't keep going up. Seeing as we have the highest home ownership in the world I am guess that anomily will be the thing that gives first. Everyone I know who does own wants to own. Sounds like a healthy demand there. Do you know anybody who doesn't want a house or property?

the cost of actually building a house in dublin is only around 20% of the sale price,the of site is 42% taxes are 28% profit for builder is around 20%

Hobbes

- Wages have not changed drastically over the years.

- While we are currently in an up cycle it is expected to decline when Poland and other countries just joined the EU have the infrastructure and workforce of cheap labour to move companies there rather then us paying for them to move here.

- Building materials + labour costs have not risen in line with costs of houses.

- Supply has exceeded demand for the current price.

The house prices at the moment are overpriced. It is only a matter of time before there will be a collapse.

MorningStar

ronbyrne2005 wrote:

32% of their sales may be to immigrants but they are only one estate agent selling a few thousand properties a year,the vast vast majorityof immigrants rent in houses with loads of others so theres ten to a house in many cases.

rental yields are an indicator of demand for rental property which is highly relevant if these immigrants are going to be renting.40% of property bought each year is by investors who are renting it,take them out and prices wouldnt rise much.
supply is meeting the demographic demand -the rest is speculation. based on all fundamental economic measures property is overvalued,levels of incomes ,rental yields population densities etc.

One estate agent saying a raise in one year from less than 5% to 32%. The estate agent speaking specifically about the Dublin market where house prices are the highest. Imigrants are staying is the point not what portion rent.

Rental yield are rental yields house price indicates demand rental yield does not change if a bidding war on house makes it go 50k higher.

Based on your knowledge of the facts and your knowledge of economics you believe it is overpriced. You aren't right untill the house prices crash you just have an opinion that is speculative. In your humble opinion at what point did they become overvalued?
Note 40% of rental property is based on what? Does that include business property?
Supply is not meeting demand other wise people wouldn't drive 4 hoours round trip, what are you basing that on. Your veiw is speculative, you don't know you might think you do but you don't. Even if you are proved right it is still speculation

MorningStar

ronbyrne2005 wrote:

the cost of actually building a house in dublin is only around 20% of the sale price,the of site is 42% taxes are 28% profit for builder is around 20%

20% margin is normal on most goods. Land value based on demand

CiaranC

Hobbes wrote:

The house prices at the moment are overpriced. It is only a matter of time before there will be a collapse.

All of your points, bar the one about Poland (which is yet another "expected" "if") could be applied at any time in the last 15 years.

IvaBigWun

Oh you've done it now, you've caught MorningStar's eye with a "property" thread


*munches on popcorn*

please, continue .....

magpie

As a matter of interest who here among the prophets of doom owns a property, and who among the "status quo" brigade is renting?

I own a property and I don't expect a crash. Natch.

I don't think this is sustainable at all.
Alot of people are over extending themselves 2nd propertys, false payslips..

If Interest rates rise by a few points alot of people are going to be up to their eyes in debt and trying to offload property into a flooded market.

MorningStar

Hobbes wrote:

- Supply has exceeded demand for the current price.

Can you please provide evidence of this as I live in Dublin and I see no case of this in my life or any report etc...

RoundyMooney

Own property, expect a soft landing...

ronbyrne2005

MorningStar wrote:

One estate agent saying a raise in one year from less than 5% to 32%. The estate agent speaking specifically about the Dublin market where house prices are the highest. Imigrants are staying is the point not what portion rent.

Rental yield are rental yields house price indicates demand rental yield does not change if a bidding war on house makes it go 50k higher.

Based on your knowledge of the facts and your knowledge of economics you believe it is overpriced. You aren't right untill the house prices crash you just have an opinion that is speculative. In your humble opinion at what point did they become overvalued?
Note 40% of rental property is based on what? Does that include business property?
Supply is not meeting demand other wise people wouldn't drive 4 hoours round trip, what are you basing that on. Your veiw is speculative, you don't know you might think you do but you don't. Even if you are proved right it is still speculation

i am merely relaying the vast body of evidenc that property overvalued in historical and fundamental levels.economics isnt an exact science but it does give us a general indication of fundamental economic value.obviously irish people place a value on owning a home in excess of fundamental economics but on an economic level this is unsustainable.
david mcwilliams said supply is meeting "demographic demand" ,this doesnt mean actual demand(which include investors/speculators).
40% of residential properties bought each year are not PPR's.so people buying as an investment must be expecting prices to keep going up as the rental yield wouldnt justify a pure investment,when people "invest " purely based on expectation that prices will rise this is speculation,every man and his dog thinks prices can only go up and its a great investment-when this occurs its time to worry unless they are relying on greater fool to buy from them.
property crashes-this is a fact, every county where property has risen so much has had a crash at some stage in 20th century,but maybe "its different this time".

MorningStar

ronbyrne2005 wrote:

i am merely relaying the vast body of evidenc that property overvalued in historical and fundamental levels.economics isnt an exact science but it does give us a general indication of fundamental economic value.obviously irish people place a value on owning a home in excess of fundamental economics but on an economic level this is unsustainable.

No you are giving your opinion based on your understanding. The general indications say that economists get it wrong more than right.

ronbyrne2005 wrote:

david mcwilliams said supply is meeting "demographic demand" ,this doesnt mean actual demand(which include investors/speculators).

Can I point out David McWilliams has been saying that the market is over priced for over 6 years. His opinion has been wrong many times. I only hold his view based on the facts.

ronbyrne2005 wrote:

40% of residential properties bought each year are not PPR's.so people buying as an investment must be expecting prices to keep going up as the rental yield wouldnt justify a pure investment,when people "invest " purely based on expectation that prices will rise this is speculation,every man and his dog thinks prices can only go up and its a great investment-when this occurs its time to worry unless they are relying on greater fool to buy from them.
property crashes-this is a fact, every county where property has risen so much has had a crash at some stage in 20th century,but maybe "its different this time".

Well not every man thinks prices will rise as you think they won't. Actually the UK price crash didn't really effect the capital after 1 year in most cases and only the late joiners were effected.

It is still your opinion and as this has never happened in a country with such a high home ownership and strong family commitments in a post colonical country where the goverenement encourage home ownership. These factors must be considered as part of the equation and if not your opinion is small minded and non scientific. Your view might be wrong but if you keep saying it like David you may eventually be right even a broken clock is right twice a day.

ronbyrne2005

MorningStar wrote:

Can you please provide evidence of this as I live in Dublin and I see no case of this in my life or any report etc...

rents arent rising much,if there was such a demand for housing rents would increase a lot more than it is. a lot of the current demand isnt from people buying to live in the house,its "investors" caught in a speculative bubble. as for my opinion that people are fools if they dont think property is over valued,obviously this is my opinion but its based on a lot of reading /research and is a view held by many many highly informed people.
damien kiberd is a highly regarded economist who writes for sunday times and he is normally very positive on all aspects of irish economy but in his article on sunday he says
"For the moment the mood is euphoric. But anybody who tells you that we are not witnessing a credit bubble — and an associated asset price bubble — is simply wrong. "
but he's simply speculating,hopefully i hear you say.

MorningStar

MorningStar wrote:

It is still your opinion and as this has never happened in a country with such a high home ownership and strong family commitments in a post colonical country where the goverenement encourage home ownership. These factors must be considered as part of the equation and if not your opinion is small minded and non scientific. Your view might be wrong but if you keep saying it like David you may eventually be right even a broken clock is right twice a day.

I'd just like to point out that economics is not an exact science and McWilliams is correct to assume what he assumes based on the evidence drawn from other house price crashes.

There have been many other economists with similar opinions, which I can't seem to dig up here.
Because he has been wrong in the past does not mean anything has changed. As the banks say Past Performance Does Not Guarantee Future Results;)

Mmmm_Lemony

I wouldn't trust anything that comes from that womans mouth, nor into his for that matter .

It's not what you know it's who you know.

ronbyrne2005

MorningStar wrote:

No you are giving your opinion based on your understanding. The general indications say that economists get it wrong more than right.

Can I point out David McWilliams has been saying that the market is over priced for over 6 years. His opinion has been wrong many times. I only hold his view based on the facts.
Well not every man thinks prices will rise as you think they won't. Actually the UK price crash didn't really effect the capital after 1 year in most cases and only the late joiners were effected.

It is still your opinion and as this has never happened in a country with such a high home ownership and strong family commitments in a post colonical country where the goverenement encourage home ownership. These factors must be considered as part of the equation and if not your opinion is small minded and non scientific. Your view might be wrong but if you keep saying it like David you may eventually be right even a broken clock is right twice a day.

if anything the high level of importance people place on owning their own home is a contributor to house price speculation as people arent prepared to rent long term and think if i dont get on "property ladder " now i never will.

japan and america have both had house price crashes and both have high levels of home ownership.

just because david mc williams hasnt been proven right yet doesnt make his analysis of fundamental economic value incorrect. an asset may be fundamentally overvalued but yet stay at a high price for a long time.

ionapaul

The 'if I don't buy now I'll never be able to afford too!!!!!!!!OMG!!!!!!' mentality is a classic manifestation of investor irrationality observed in historic asset bubbles.

Of course, neither side on this argument can really convince the other, so there is no point going on and on! No-one can prove the property market will climb, stabilise or crash over the next five years...the proof of the pudding will be in the eating of it!

constitutionus

one word lads, RECESSION , as soon as america sneezes were fecked and according to some that COULD be as early as next year!

yosser hughes

Interesting looking at some of the predictions on this thread. I hope some of you don't make a living out of giving this sort of "advice" We ain't seen nothing yet. Prices will drop alot further. Some people on here were saying that property was undervalued! How can a one bedroom apartment going for €300,000 be undervalued? What's the average wage again?

Sherifu

It could have solid gold furniture.

Ciaran500

Sherifu wrote: »

It could have solid gold furniture.

You post too much.

Sherifu

It's all relative.*





*to yore ma.

Wertz

Sherifu wrote: »

It could have solid gold furniture.

But it's more likely just a combination of cast concrete, plasterboard, pine, MDF and paint, thrown together by a team of the lowest priced subcontractors...the only furniture you're likely to find is a white porcelain seat in the compact bathroom. 300K? Many of these places are barely worth 1/3 of that in reality...

Rb

Ciaran500 wrote: »

You post too much.

Yep, post-count whoring at its finest!

Caoimhín

Im renting at the moment. The semi-d im in it valued at 450,000 euro. At night when the house is quiet and the man next door goes for a piss i am woken up by the noise, its like the house is made of cardbord. Why would one spend a lifetime in debt to the bank for a cardboard house in a half built estate.

Sherifu

Rb wrote: »

Yep, post-count whoring at its finest!

;_;

Rb

Lol, spot the difference

http://boards.ie/vbulletin/forumdisplay.php?f=7

and

http://boards.ie/vbulletin/search.php?searchid=1940492

Post count whore

Sherifu

It's not a bad effort. I'll give you that.

Zzippy

Rb wrote: »

Yep, post-count whoring at its finest!

Pot... meet kettle!