The housing bubble has burst

GreeBo

What do you think the Sept rates will be?
I think at least 4%.
(I didnt mean that her repayments would double, just the rate)

daveirl

This post has been deleted.

GreeBo

daveirl wrote:

This post has been deleted.

wont .25% put us at 4% already??

AIB Stand'd Var'ble
BOI Variable
BOI Variable End
BOS-Bank of Scotl Var
BOS Variable En
EBS Variable
First Active Variable
IIB Bank Variable
ICS Variable
ICS Variable End
Ir Nat Variable Ex
Ir Nat Variable New
Permanent tsb Disc
Permanent tsb
Permanent tsb En
Ulster Stan'd Var Ex
Ulster Disc Var New 3.75%
3.99%
-
3.74%
3.74%
3.75%
4.03%
3.95%
3.99%
3.99%
3.98%
3.98%
3.19%
3.85%
3.85%
3.99%
3.44%

ionapaul

Think they are talking about ECB *base* rates = 2.5%

daveirl

This post has been deleted.

GreeBo

ah ok then
I was just trying to highlight to Ann that her rate will jump by a fair amount very suddenly and the sooner she can lock in a fixed rate (if that is what she wants, and I would recommend it) the better.

Sponge Bob

Mortgage rates will be 4% by next week I say.

If your mortgage is 297k for 35 year then run the figures thru Karls Calculator Here

http://www.jeacle.ie/mortgage/ie/

297k for 35 years at 2.25% (discount variable rate quoted above) €1022 a month
297k for 35 years at 3.5% (normalish variable today) €1227 a month
297k for 35 years at 4% (variable this summer sometime ) €1315 a month
297k for 35 years at 5% (normalish variable by around March-Jun next year if Germany does not cool a bit ) €1499 a month

That will spook the investors , especially the recent ones, whose rent will not rise by anything like that owing to oversupply .

Pa ElGrande

Anecdotal:

I'm observing more estate agents that ever opening shop, this would indicate there is a large supply of housing stock available or high margins on low volume in order to support so many players.
I am also noticing over the last few weeks more "for sale" signs that normal especially in south Dublin. I think those record breaking house prices in Ballsbridge have motivated a lot of sellers.
Property seems to be moving briskly, though I am watching some properties back on the market after a few months, often with a different agent.

ronbyrne2005

i think rte's boom programme was the final nail in the coffin for irish property!

homah_7ft

It did leave me with the gut feeling of a moment when everyone realised what has been happening all along.

Pa ElGrande

ronbyrne2005 wrote:

i think rte's boom programme was the final nail in the coffin for irish property!

RTÉ's Economics Editor George Lee will be online for a live webchat on Friday 2 June from 1 to 2pm. He will answer any questions you have about the Irish economy or about his show, Boom.

You can submit questions
http://www.rte.ie/thetimeofourlives/webchat.html

Sponge Bob

ronbyrne2005 wrote:

i think rte's boom programme was the final nail in the coffin for irish property!

Yep. I think it will flush lots of recent investors out . Once they dump their 'assets' on the market its the end of the boom .

Out of interest, ring up a few local estate agents this morning and tell them you have a rental in estate x that is empty and clean.

You want to sell, do THEY want the agency ?

How long before they make an appointment for you ???

I think you may find they are awful busy this morning so you will , read what you will into that

As for George , he looks and sounds and dresses like an undertaker and this is the only good program he EVER did is it not?

Once the recession is over RTÉ should get a happy looking economics editor to cheer the country up and get the ball rolling again, c late 2008

mox54

we are now talking ourselves into a recession - dangerous times but I'm alright Jack;)

Sponge Bob

we talked ourselves into a bubble years ago . the bubble being this "ladder" that the owner or the investor must get on using the dirt cheap money sloshing around since 9/11 .

every bubble bursts, I am dreadfully sorry it got this out of hand but I warned against this ****ing insanity years ago and nobody listened.

All I got back was "must get on ladder" "you cannot lose on property" "property always rises" etc

Then George does his undertaker chic routine on TV and they suddenly listen .

Ah well

mox54

I lived in London during the property boom when a 1 bed flat was 1/4 million sterling, bubble burst and it was worthless - NEGATIVE EQUITY became the catchphrase of the day - we bought a house for 68,000 sterling during the slump it got that bad -

It's going to happen here and it's going to be nasty - :eek:

Sponge Bob

Ireland is NOT comparable to London at ALL .

You carefully neglected to mention the 15% mortgage rates in the UK in the early 1990s. That simply will not happen here and thats what tanked the market. The other factor was that there were no repayment mortgages they were bull**** crooked endowments instead. Therefore the owners were double negative equitied in no time at all.

The problem in Ireland is fundamental oversupply in some areas but not in 'good ' areas . Any slump here will be highly asymettric .

In Wales , property prices rose in the first half of the 1990s while 'up and coming' areas of London in the late 1980s (scumpits basically ) fared worst in the early 1990s .

I lived in London then too. I had the sense not to panic in 1988 and 1989 but I remember the panic all right .

mox54

I know it's not appropriate to compare London to Ireland but I was trying to convey how much it can go wrong and how nasty the slump can be, those endowments were crap and we don't have them etc etc but when we get into NEGATIVE EQUITY then it's curtains, we're over borrowed and dependant on 1 industry, it's too late to reverse this, the horse has bolted and no point closing the door!!....that's my view and I hope I'm wrong...I really do but the writing has been on the wall a few months now.......mmmmmm!:eek:

shnaek

I was reading an article in the Echo yesterday where a labour senator was demanding that we spend the surplus 1.5 billion on hospitals and that The Annual Surplus would pay for the extra staff needed year on year. The annual surplus! What the hell is that? Where was the annual surplus back in the 1980's?

Sponge Bob

mox54 wrote:

I know it's not appropriate to compare London to Ireland but I was trying to convey how much it can go wrong and how nasty the slump can be, those endowments were crap and we don't have them etc etc but when we get into NEGATIVE EQUITY then it's curtains

NO for most people who bought years ago. Only about 20% of properties in Ireland are likely to EVER end up in Negative Equity . The rest are owned outright or have tiny mortgages.

we're over borrowed and dependant on 1 industry, it's too late to reverse this,

we can reconfigure some of that industry to civil from housing .

only the flutes who borrowed 100% are over borrowed or the 100% and an interest only mortgage on top who have no equity .

Most people are a good bit of the way into a repayment and will be fine.

the horse has bolted and no point closing the door!!....that's my view and I hope I'm wrong...I really do but the writing has been on the wall a few months now.......mmmmmm!:eek:

The writing was on the wall in 2003 (latest) and probably 2000 except that the property market went soggy in 2001 and where the **** was George Lee then I ask you . ?????

He was moaning in his best undertaker voice and in his best undertaker suit outside some closing down factory in Tallaght I will grant you but the man presented no cohesive overview of anything to anybody until last night.

"The wooooorrrrkkkkkerrrrrrss will be very saaaaaaaaaaaaad when the gaAAAAAAtttes finallllllly shuuuuuUUUUUUUt"

Only a moron could apportion George guru status for doing what he IS capable of ....IE stating the bleedin obvious.

mox54

Hindsight is a wonderful thing!!!

Only 20%, that's 1 in 5, that's scary and that's scary (it's not me but it's 1 in 5) also I don't think we can reconfigure at the drop of a hat and besides that misses the point - we need to re-think again and not mess with a reconfiguration - why oh why oh why didn't the TD's and economists and such like deal with this earlier - why oh why oh why!!!

our balance of payments is far from balaced and the undertaker needs to get off the telly and get a real job.

Sponge Bob

mox54 wrote:

Hindsight is a wonderful thing!!!
Only 20%, that's 1 in 5, that's scary and that's scary (it's not me but it's 1 in 5) also I don't think we can reconfigure at the drop of a hat and besides that misses the point - we need to re-think again and not mess with a reconfiguration - why oh why oh why didn't the TD's and economists and such like deal with this earlier - why oh why oh why!!!

They joined the euro, handed over interest rate policy to Frankfurt, and could not see 911 and emergency low interest rates happening . I blame Osama as much as our TD's . The 1990's "tiger" would not have happened had they NOT joined the euro .

The Central bank lost most of its banking supervision to IFSRA, between the Central Bank and IFSRA they did not stop the overborrowing frenzy. Since 2001 we have gone from 3x-4x gross and 90% mortgages to 5x and 6x gross and 100% mortgages .

The overborrowers did not look carefully at long term income/house price ratios and started that "ladder" "ladder" mantra to convince themselves to overborrow .

Therefore you ended up with a LETHAL combination of the Irresponsible Borrower and the Irresponsible Lender in a mutual feedback mechanism.

As prices rose so did the mortgage funding to feed more rises.

All very mad , what what . Nevertheless these are reducing mortgages and not the scumbag endowment situation per the UK in the early 1990s .

mox54

I'd hate to have borrowed 250,000 yo yo's to buy a 3 bed semi in Dudlin and have to worry about how i'm going to have to pay the mortgage over 35 years.......35 years is insane.....I really think our politicians and banks and big business have taken the young of Ireland for a ride and sucked them into a crazy situation -

it's simply not right and proper and the maths don't add up - these geezers surely had a good idea that we were going to come unstuck and what was going to happen and rode the wave until it began to break up.

The undertaker put it well when he said if we build 20,000 less homes next year what will happen - we will build less and it will have consequences:rolleyes: it's not looking good I'm afraid - in 1999 I asked myself how long will this last - we've done well to get here but I fear it's not going to be a pretty sight when the wheels fall off

Sponge Bob

mox54 wrote:

.I really think our politicians and banks and big business have taken the young of Ireland for a ride and sucked them into a crazy situation -

The young themselves are complicit to an extent. You have no idea of how many I have told "Just say No" ....but they chose to ignore this gnarly old sponge anyway <sigh> .

Unlike the tiger pups I remember the days before easy credit . They have never known anything but easy credit.

Like I say , its a feedback mechanism .

jdivision

The banks are one of the main reasons for the property boom and have largely gotten away with it without criticism. First it was getting rid of the 20 per cent deposit, then it was changed from 3 times income to 3.5 times income to 5 times income and then the repayment period went from 20 to 25 to 30 and finally 35 year mortgages and now there's 100 per cent mortgages widely available. If people had not been able to borrow more, house prices wouldn't have risen as much. I think George Lee was okay but he conveniently forgot how much large multinationals we've attracted in last couple of years such as Google, Yahoo, Amazon and eBay (admittedly some of them are only starting to invest).

ronbyrne2005

http://www.rte.ie/thetimeofourlives/boom.html

ronbyrne2005

jdivision wrote:

The banks are one of the main reasons for the property boom and have largely gotten away with it without criticism. First it was getting rid of the 20 per cent deposit, then it was changed from 3 times income to 3.5 times income to 5 times income and then the repayment period went from 20 to 25 to 30 and finally 35 year mortgages and now there's 100 per cent mortgages widely available. If people had not been able to borrow more, house prices wouldn't have risen as much. I think George Lee was okay but he conveniently forgot how much large multinationals we've attracted in last couple of years such as Google, Yahoo, Amazon and eBay (admittedly some of them are only starting to invest).

multinationals are attracted by low tax and dont employ that many people , do you really think we are better workers than those in other european countries?? its a simple tax avoidance measure although it helps that we speak english too but in uk they have all our advantages except for low tax and thats the reason the companies are setting up european bases here.

Afuera

ronbyrne2005 wrote:

in uk they have all our advantages except for low tax and thats the reason the companies are setting up european bases here.

The fact that they would have to pay staff in Sterling over there is a major turnoff too.

ronbyrne2005

Afuera wrote:

The fact that they would have to pay staff in Sterling over there is a major turnoff too.

nonsense, why? what does the fact they have to pay in sterling got to do with it? translate irish wages into equivalent amount in sterling and uk is probably no dearer for same job. nominal currency levels are irrelavant it relative levels and actual cost to the multinational in its home country.

homah_7ft

ronbyrne2005 wrote:

multinationals are attracted by low tax and dont employ that many people , do you really think we are better workers than those in other european countries?? its a simple tax avoidance measure although it helps that we speak english too but in uk they have all our advantages except for low tax and thats the reason the companies are setting up european bases here.

You make it sound like a bad thing! Thank heavens for transfer pricing. It's about all that is keeping our exports up.

ronbyrne2005

homah_7ft wrote:

You make it sound like a bad thing! Thank heavens for transfer pricing. It's about all that is keeping our exports up.

Bad in the long run as we have become complacent and not developed our own indigenous innovative sustainable export industry.