The Irish Economy - Worrying Signs?

Cork

I have noticed that it is getting harder to find jobs and I see long established shops closing down.

The Irish ecomony is over hyped - dependent on the construction industry and people borrowing like crazy.

I feel that reality is begining to dawn.

Squaddy

I heard recently that there isnt enough employment and that Ireland needs 50,000 immigrants each year to sustain the economy?

Jivin Turkey

Squaddy wrote:

I heard recently that there isnt enough employment and that Ireland needs 50,000 immigrants each year to sustain the economy?

A huge portion of which is in the construction industry, which is booming, because of the need for immigrants to be housed..........

Squaddy

Yeah but not just that, we have been so educated that there is no1 to do the dirty jobs?

Squaddy

Cork wrote:

I have noticed that it is getting harder to find jobs and I see long established shops closing down.

The Irish ecomony is over hyped - dependent on the construction industry and people borrowing like crazy.

I feel that reality is begining to dawn.

Thats the thing if the housing industrys collapses so does our economy.. Your right we do rely too much on it..

dahamsta

100% the fault of Fianna Fail of course.

Sponge Bob

Ken Shabby wrote:

100% the fault of Fianna Fail of course.

Quite Right Ken, the country is run from that bloody tent at the Galway Races.

Pa ElGrande

I am observing the same thing here in Dublin. In fact Dublin people may have noticed that quite a few petrol stations in the city have closed or are closing.

What is happening is a direct effect of the property boom.

01. The property is worth more than the turnover of the business.
02. The business can no longer get staff at economic rates.
03. The owner is close to or at retirement so this is a nice nest egg.
04. The population is being forced out beyond the suburbs by the price of property, so businesses that depend on a local catchment area have a decreased market.
05. The Internet - we are bypassing the high street shop and going direct or using services like Ebay.
06. Retail outlets in the city center pay very high rents, which means only businesses that sell products with a high margin (e.g. mobile phones, music, clothes) can afford to locate there. Established businesses can't meet the rent and close.
07. Parking is expensive and inconvienient in the city center, thus driving shoppers to the out of town shopping centers.
08. The banks lend to the developers to build houses.
09. The banks lend to the public to mortgage houses.
10. People borrow money based on the increased value of their house (mortgage equity withdrawel) to fund imported goods such as flatscreen TV's and computers, and other goods that are imported from Asia.
11. Borrowed money is flowing out of the country into foreign property.
12. Yields on the rental market are really low, if a significant number of immigrants left tomorrow, the sector would collapse.
13. We are on course to exceed 80,000 properties completed this year & section 23 ends this year (July 31, 2006) [Need to double check this]
14. Some businesses can't get the skilled staff needed here and are moving to markets with an abundance of skilled cheap labour (This is one of the reason's Irelands own boom took off)
15. I know of lots of appartments that are build in the city, that are not being rented (Capital appreciation)
16. Watch carefully what's happening in the UK and the USA. We are tied into their economic cycle.
17. Germany is starting to pick up, and so are the ECB rates, and is a much more attractive destination for most East Europeans once it opens its borders to them.

Pa ElGrande

Sponge Bob wrote:

Quite Right Ken, the country is run from that bloody tent at the Galway Races.

Fianna Fail as the ruling party most of this boom certainly do deserve some blame for the policies they pursued with regard to debt bubble. Indeed, what passes for political opposition in this country does as well, since they have been complicit in this as well. This is why Sinn Féin are likely to make gains in the next election, picking up votes from disenfranchised people.
Indeed the Taoiseach has stated his position on the property bubble quite clearly in words that will echo for years to come.

Bertie Ahern said
"Really we should have an examination into why so many people got it so wrong. My view is there's not a great problem. Really, the bad advice of last year given by so many has maybe made some people make mistakes, that they should have bought last year."

Listen over at RTE - http://www.rte.ie/business/2006/0407/property.html
Irish Times Article - http://www.ireland.com/newspaper/front/2006/0408/3447877711HM1NEWBERT.html

However, we should also bear in mind the only reason the majority of people are complaining about property is that they want to get on the property ladder themselves, but the cost of entry to this ponzi scheme is beyond them. Once they get on the "ladder" they are quite happy for their property to appreciate in value so they can sell it to the next fool.

raxall

ireland should get poor but skilled immigrants and give them the "dirty" jobs with decent pay... they'll take it !

kluivert

I was watching the news last night and heard an ecomonist say that investors buying property for the hope of capital appreciation should consider other options.............In other beware the bubble is going to burst.

I think this country thinks its too good for itself. People are afraid of hard work and would rather pay the minimum wage to someone else to do it..

I work the guts of 60-70 hours a week and I am an accountant (Part Qualified), if you the little things in life you earn them and not borrow the money from the bank. This country is a disgrace.

Construction does not build a strong country its production and exports that makes a wealthy and thriving economy.

Warning is out there for al of you, there is a down turn coming, the government cant continue to hand out free money for much longer and sustain an overheating economy.

FF took the credit for the celtic tiger but failed to control both monteary and fiscal policy, instead they jumped on the band wagon and the gravy train and decided to take what they could. Now they are throwing a celebration for 1916 to win more hearts and therefore more votes.

killeoin

Pa ElGrande...I was going to repaste your post and complement you on it but I deceided it was too long. Anyway, you're right, and great post. The only thing I have to add to it is that really whats kept the property market going is the fact that interest rates are (have been) so low in the past number of years. Cheap money fuelled the housing bubble and really we need also look at the American markets reaction to their interest rate hikes.


kluivert...I presume you are a trainee accountant? 60-70 hours a week! God help you! I'm just after signing a training contract for next year so im ****ed if its going to be like that!:eek:

kluivert

killeoin wrote:

kluivert...I presume you are a trainee accountant? 60-70 hours a week! God help you! I'm just after signing a training contract for next year so im ****ed if its going to be like that!:eek:

I work in Boylesports Head office in Dundalk at the weekends and two evenings a week + work in the accounting practice. A normal week is 65 hrs. So much for the great economy that we have.

TomF

I feel it is my duty to warn others that, as the true and authentic "Last Guy", I have been feeling, recently, that I should buy a house. If I should actually do that, you may be as certain as about the sun rising tomorrow, that the housing bubble in Ireland is going to burst, and very soon.

I know it will be very soon, specifically between the first of September and the last of November that the crash will happen, because the first of September is the end of the contract for this house I rent, and I don't want to move again, and I intend to emigrate to the USA if I don't buy, and generally you are tied-up for three months getting loans, papers signed, etc., etc., before you actually have possession of a house, and so that establishes the latest time of the crash.

You all have been warned, so get rid of that over-priced property now before the bubble bursts and no one will want to know you.

TomF

I think I'll rent in the USA, too, until their crash hits!

http://patrick.net/housing/crash.html

Schuhart

One worry I have is the references to growth being fueled by domestic consumer demand. Consumer demand in Ireland has not great knock on effect, as we generally import our consumer goods. This really is a bubble economy, and there seems to be a high level of delusion in the air.

Pa ElGrande

Thanks for the comments killeon.
Your point about the low interest rates is right, in fact they are "emergency" low interest rates implemented in the wake of the 2000 dot.com crash and Sept. 11 and also the American federal reserve (central banks) liquidity injection (they printed more dollars). The growth in asset bubbles (houses, shares, commodities) all over the world are Alan Greenspan's legacy.
Have a read of this article it was written in March 1999 about the debt bubble underpinning the monetary system and it is very relevant today. Just cross out shares and insert property.

http://www.gold-eagle.com/gold_digest_99/milhouse030899.html

Just to back up the article see this graph - http://www.rense.com/1.imagesF/2bss.gif

DublinWriter

TomF wrote:

I intend to emigrate to the USA

Er, how? (unless you're marrying a yank or have a H1B arranged)

Pa ElGrande

Its a bit Off Topic to this thread but if you get a chance see Robert Newman's History of Oil.
Its a comedy sketch that does make some valid (and invalid) points.
I happened by chance to see see it this evening on More 4.
He made a very funny comparisson between Salvador Dali's Cheques and the American Federal reserve.

World trade is now a game in which the US produces dollars and the rest of the world produces things that dollars can buy.
http://www.atimes.com/global-econ/DD11Dj01.html
http://en.wikipedia.org/wiki/Dollar_hegemony

lomb

THERE was even more bad news for first time buyers yesterday.

Despite the Central Bank warning that Ireland's house price growth is 'worrying', Bank of Ireland announced in the same afternoon that housing demand is stronger than expected.

In its quarterly analysis of the Irish property market, the bank predicted price growth of 9pc for 2006. However, it believes it will slow to 3pc in 2007.

Group chief economist Dan McLaughlin said that despite record supply and the prospect of rising interest rates, Irish people are continuing to buy property in huge numbers.

"So far in 2006, the Irish housing market remains vibrant," he said.

"This is understandable given the strength of the Irish economy and the continued surge in employment, with the creation of an estimated 80,000 jobs over the year.

"These factors, along with buoyant wage inflation and tax concessions in the Budget, are likely to drive household income growth in excess of 9pc." He has predicted the number of home completions this year will exceed the record number built last year.

A total of 81,000 homes were constructed, with 26,000 in the last quarter alone.

"We expect supply to remain at high levels, with a further increase in completions to 85,000 in 2006."

The new mortgage sector of the bank is also experiencing strong growth, with another 110,000 new mortgages expected to be drawn before the end of the year.

The expected 12pc growth in the numbers borrowing comes despite rising interest rates.

Although affordability has decreased slightly in recent months thanks to hikes from the European Central Bank (ECB), he said there is still "relatively comfortable affordability". However, he issued a warning for those who have borrowed at their limit. Already this year the ECB has raised rates from a historical low of 2pc to 2.5pc.

"We envisage a further 1pc increase, bringing the Repo rate to 3.5pc by early next year," he said.

"This will mean standard variable mortgage rates in the Irish market of 4.75pc by the spring of next year."

The 1pc rise would mean that a €300,000 mortgage spread across 30 years would see a monthly increase from €1,387.35 to €1561.55.

This is an increase of €174.20 per month, or €2,090 per year.

also


THREE lenders are now offering 40-year mortgages as longer and longer terms for home loans become the norm in the Irish market, it has emerged.

Bank of Scotland (Ireland), along with Ulster Bank and First Active, are offering the 40-year mortgages, a move that a consumer lobby group said yesterday was a negative development.

And one leading mortgage company said the majority of home loans now extend to 35 years, up from terms of 20 years in 2000, according to research by the Irish Mortgage Corporation.

Yesterday the Financial Regulator cautioned people to be aware that 35-year and 40-year mortgages would leave people with thousands and thousands more euro in interest to pay when compared with home loans over a shorter period.

"We would warn consumers to understand the long-term costs of mortgages with a long term. It will cost more," a spokeswoman for the regulator's office said.

Chief executive of the Consumers Association Dermott Jewell said 40-year mortgages were a bad idea. People could easily be fooled into thinking they are paying less because the monthly repayments are lower.

But over the life of the loan people would end up paying thousands more.

Regressive

First-time buyers were being pushed into taking on 40-year mortgages because house prices were rising relentlessly, Mr Jewell added. He described such long-term mortgages as a regressive step.

The Financial Regulator gave an example of someone paying off a €250,000 mortgage (at 3.6pc). Paying this off over 15 years would cost €321,750 or €1,788 a month. Over 35 years the total cost would be €433,650 or €1,033 a month. This means that the total cost of the loan over 35 years is €111,000 higher than if it was paid off over 15 years.

Spokesman for the Irish Mortgage Corporation Frank Conway said 52pc of its customers in the first three months of this year had taken out 35-year mortgages.

This compares with 33pc of customers taking out 35-year mortgages over the whole of last year.

The numbers taking out 40-year mortgages had doubled to 6.5pc in the first quarter of this year, Mr Conway said. His company did €1bn in mortgages last year, he added.

First Active and Ulster Bank restrict 40-year mortgages to those who are aged 30 or under if they are PAYE workers.

Bank of Scotland said it did not promote 40-year mortgages to its customers, but it was one of its offerings.

The product is restricted to those who are aged 25 or under.


"This is understandable given the strength of the Irish economy and the continued surge in employment, with the creation of an estimated 80,000 jobs over the year.

"These factors, along with buoyant wage inflation and tax concessions in the Budget, are likely to drive household income growth in excess of 9pc." He has predicted the number of home completions this year will exceed the record number built last year.

A total of 81,000 homes were constructed, with 26,000 in the last quarter alone.

"We expect supply to remain at high levels, with a further increase in completions to 85,000 in 2006."

The new mortgage sector of the bank is also experiencing strong growth, with another 110,000 new mortgages expected to be drawn before the end of the year.

The expected 12pc growth in the numbers borrowing comes despite rising interest rates.

Although affordability has decreased slightly in recent months thanks to hikes from the European Central Bank (ECB), he said there is still "relatively comfortable affordability". However, he issued a warning for those who have borrowed at their limit. Already this year the ECB has raised rates from a historical low of 2pc to 2.5pc.

"We envisage a further 1pc increase, bringing the Repo rate to 3.5pc by early next year," he said.

"This will mean standard variable mortgage rates in the Irish market of 4.75pc by the spring of next year."

The 1pc rise would mean that a €300,000 mortgage spread across 30 years would see a monthly increase from €1,387.35 to €1561.55.

This is an increase of €174.20 per month, or €2,090 per year.

Pa ElGrande

Today's Irish economy is fundamentally different from the economy in your granny's day. Some key words: globalization (importing consumer goods and oil from Asia), democratisation (War in Iraq) and emerging markets (Housing in Bulgaria).

Remember when Granny told you to save your pennies? Remember when she gave you a cute credit union book where you were supposed to write down every time you deposited part of your pocket money in your savings account?

Granny loved you, but she was from another time. By teaching you to save she might as well have been teaching you to operate a loom. Saving is obsolete in today's world. Only spending money puts it to work. And money spent on a house works as hard as money can work, because then you can then borrow against the house and spend that same money on a new car, boat, etc., thereby creating new jobs, and all the while your house keeps increasing in value, no matter how much you borrow! It's like a magic circle of money!

Do you want to work for your money or have it out there working for you? Saving might have been smart in 1985, but it's 2006 now, and this housing boom has only begun, so get in while there's still time. Do you know who saves money? The Chinese. And needless to say, we don't look to the Chinese to decide what to do. As a result of all their wasteful saving, the Chinese housing market is in trouble. The Irish are sophisticated enough to keep spending, so here there is no danger of collapse.

Tazz T

er... don't you still need that savings book to get the deposit, fees for that house?

I know I wasn't able to get a 100% mortgage when I was 7 years old.

whizzbang

Pa ElGrande wrote:

Today's Irish economy is fundamentally different from the economy in your granny's day. Some key words: globalization (importing consumer goods and oil from Asia), democratisation (War in Iraq) and emerging markets (Housing in Bulgaria).

Remember when Granny told you to save your pennies? Remember when she gave you a cute credit union book where you were supposed to write down every time you deposited part of your pocket money in your savings account?

Granny loved you, but she was from another time. By teaching you to save she might as well have been teaching you to operate a loom. Saving is obsolete in today's world. Only spending money puts it to work. And money spent on a house works as hard as money can work, because then you can then borrow against the house and spend that same money on a new car, boat, etc., thereby creating new jobs, and all the while your house keeps increasing in value, no matter how much you borrow! It's like a magic circle of money!

Do you want to work for your money or have it out there working for you? Saving might have been smart in 1985, but it's 2006 now, and this housing boom has only begun, so get in while there's still time. Do you know who saves money? The Chinese. And needless to say, we don't look to the Chinese to decide what to do. As a result of all their wasteful saving, the Chinese housing market is in trouble. The Irish are sophisticated enough to keep spending, so here there is no danger of collapse.

I'm going to bookmark this and look back on it in 2008/2009 whenever I need a giggle.

"Saving is obsolete in today's world."

ahhhh classic.

"The Irish are sophisticated enough to keep spending" yes, all we need to do is keep spending money we don't have and nothing can go possibli go wrong!

{edit} reading back on your previous posts I'm assuming you are taking the mick? Still, there seems to be people out there that think like this!

Sleepy

Pa ElGrande wrote:

Today's Irish economy is fundamentally different from the economy in your granny's day. Some key words: globalization (importing consumer goods and oil from Asia), democratisation (War in Iraq) and emerging markets (Housing in Bulgaria).

Remember when Granny told you to save your pennies? Remember when she gave you a cute credit union book where you were supposed to write down every time you deposited part of your pocket money in your savings account?

Granny loved you, but she was from another time. By teaching you to save she might as well have been teaching you to operate a loom. Saving is obsolete in today's world. Only spending money puts it to work. And money spent on a house works as hard as money can work, because then you can then borrow against the house and spend that same money on a new car, boat, etc., thereby creating new jobs, and all the while your house keeps increasing in value, no matter how much you borrow! It's like a magic circle of money!

Do you want to work for your money or have it out there working for you? Saving might have been smart in 1985, but it's 2006 now, and this housing boom has only begun, so get in while there's still time. Do you know who saves money? The Chinese. And needless to say, we don't look to the Chinese to decide what to do. As a result of all their wasteful saving, the Chinese housing market is in trouble. The Irish are sophisticated enough to keep spending, so here there is no danger of collapse.

Fantastic piece of Satire

Schuhart

Pa ElGrande wrote:

The Irish are sophisticated enough to keep spending, so here there is no danger of collapse.

An article about some Irish investors who were sophisticated enough to spend.

http://www.irishexaminer.com/pport/web/ireland/Full_Story/did-sg38c0QuCLYq2sgdq-nXlDAyFE.asp
07/04/06
Labour threaten pyramid fraudsters with prison
By Paul Kelly
ORGANISERS of rip-off pyramid schemes would face unlimited fines and five years in jail if Labour came to power, the party pledged last night.

Labour’s Kathleen Lynch yesterday put forward a private members bill in the Dáil to outlaw the scam, which has seen people reportedly cheated out of their savings.

Pyramid schemes, like one that started in West Cork and spread through neighbouring counties, operated as a gift scheme for a members’ club.

People give money to members and then recruited others to give them cash. However, the schemes collapse when no-one else can be found or the money runs out. Describing people who join such schemes as gullible, Ms Lynch said the Oireachtas had to bring in laws to protect the easily-led and to punish the organisers.

ronbyrne2005

lomb wrote:

THERE was even more bad news for first time buyers yesterday.

Despite the Central Bank warning that Ireland's house price growth is 'worrying', Bank of Ireland announced in the same afternoon that housing demand is stronger than expected.

In its quarterly analysis of the Irish property market, the bank predicted price growth of 9pc for 2006. However, it believes it will slow to 3pc in 2007.

Group chief economist Dan McLaughlin said that despite record supply and the prospect of rising interest rates, Irish people are continuing to buy property in huge numbers.

"So far in 2006, the Irish housing market remains vibrant," he said.

"This is understandable given the strength of the Irish economy and the continued surge in employment, with the creation of an estimated 80,000 jobs over the year.

"These factors, along with buoyant wage inflation and tax concessions in the Budget, are likely to drive household income growth in excess of 9pc." He has predicted the number of home completions this year will exceed the record number built last year.

A total of 81,000 homes were constructed, with 26,000 in the last quarter alone.

"We expect supply to remain at high levels, with a further increase in completions to 85,000 in 2006."

The new mortgage sector of the bank is also experiencing strong growth, with another 110,000 new mortgages expected to be drawn before the end of the year.

The expected 12pc growth in the numbers borrowing comes despite rising interest rates.

Although affordability has decreased slightly in recent months thanks to hikes from the European Central Bank (ECB), he said there is still "relatively comfortable affordability". However, he issued a warning for those who have borrowed at their limit. Already this year the ECB has raised rates from a historical low of 2pc to 2.5pc.

"We envisage a further 1pc increase, bringing the Repo rate to 3.5pc by early next year," he said.

"This will mean standard variable mortgage rates in the Irish market of 4.75pc by the spring of next year."

The 1pc rise would mean that a €300,000 mortgage spread across 30 years would see a monthly increase from €1,387.35 to €1561.55.

This is an increase of €174.20 per month, or €2,090 per year.

also


THREE lenders are now offering 40-year mortgages as longer and longer terms for home loans become the norm in the Irish market, it has emerged.

Bank of Scotland (Ireland), along with Ulster Bank and First Active, are offering the 40-year mortgages, a move that a consumer lobby group said yesterday was a negative development.

And one leading mortgage company said the majority of home loans now extend to 35 years, up from terms of 20 years in 2000, according to research by the Irish Mortgage Corporation.

Yesterday the Financial Regulator cautioned people to be aware that 35-year and 40-year mortgages would leave people with thousands and thousands more euro in interest to pay when compared with home loans over a shorter period.

"We would warn consumers to understand the long-term costs of mortgages with a long term. It will cost more," a spokeswoman for the regulator's office said.

Chief executive of the Consumers Association Dermott Jewell said 40-year mortgages were a bad idea. People could easily be fooled into thinking they are paying less because the monthly repayments are lower.

But over the life of the loan people would end up paying thousands more.

Regressive

First-time buyers were being pushed into taking on 40-year mortgages because house prices were rising relentlessly, Mr Jewell added. He described such long-term mortgages as a regressive step.

The Financial Regulator gave an example of someone paying off a €250,000 mortgage (at 3.6pc). Paying this off over 15 years would cost €321,750 or €1,788 a month. Over 35 years the total cost would be €433,650 or €1,033 a month. This means that the total cost of the loan over 35 years is €111,000 higher than if it was paid off over 15 years.

Spokesman for the Irish Mortgage Corporation Frank Conway said 52pc of its customers in the first three months of this year had taken out 35-year mortgages.

This compares with 33pc of customers taking out 35-year mortgages over the whole of last year.

The numbers taking out 40-year mortgages had doubled to 6.5pc in the first quarter of this year, Mr Conway said. His company did €1bn in mortgages last year, he added.

First Active and Ulster Bank restrict 40-year mortgages to those who are aged 30 or under if they are PAYE workers.

Bank of Scotland said it did not promote 40-year mortgages to its customers, but it was one of its offerings.

The product is restricted to those who are aged 25 or under.


"This is understandable given the strength of the Irish economy and the continued surge in employment, with the creation of an estimated 80,000 jobs over the year.

"These factors, along with buoyant wage inflation and tax concessions in the Budget, are likely to drive household income growth in excess of 9pc." He has predicted the number of home completions this year will exceed the record number built last year.

A total of 81,000 homes were constructed, with 26,000 in the last quarter alone.

"We expect supply to remain at high levels, with a further increase in completions to 85,000 in 2006."

The new mortgage sector of the bank is also experiencing strong growth, with another 110,000 new mortgages expected to be drawn before the end of the year.

The expected 12pc growth in the numbers borrowing comes despite rising interest rates.

Although affordability has decreased slightly in recent months thanks to hikes from the European Central Bank (ECB), he said there is still "relatively comfortable affordability". However, he issued a warning for those who have borrowed at their limit. Already this year the ECB has raised rates from a historical low of 2pc to 2.5pc.

"We envisage a further 1pc increase, bringing the Repo rate to 3.5pc by early next year," he said.

"This will mean standard variable mortgage rates in the Irish market of 4.75pc by the spring of next year."

The 1pc rise would mean that a €300,000 mortgage spread across 30 years would see a monthly increase from €1,387.35 to €1561.55.

This is an increase of €174.20 per month, or €2,090 per year.

dan mc laughlin /bank of ireland is saying house price growth will decrease to 3% in 2007 which is less than the inflation rate of 3.5% released by cso today.i remember you thinking property was still a great investment lomb,did you still think so if prices are not going to be rising in real terms next year?

dahamsta

Lomb's post is so much better the second time.

REDZ

ireland too dependant on construction boom, 20% of employment indirectly.
boom caused by
1. economic growth
2. insufficent supply of houses
3. interest rates that were too low for our economy.

1. economic growth now dependant on construction
2. oversupply of houses now
3. higher and rising interest rates

roll on the bust, cos its my only hope of ever buying a house.
besides making money from property speculation is the lazy way to get rich, just sitting and watching your capital grow was simply too good to last.

Bluehair

Sleepy wrote:

Fantastic piece of Satire

It was brilliant, but scarily accurate to the way many people think.

ronbyrne2005

Ken Shabby wrote:

Lomb's post is so much better the second time.

apologies!

Pa ElGrande

REDZ wrote:

ireland too dependant on construction boom, 20% of employment indirectly.
boom caused by
1. economic growth
2. insufficent supply of houses
3. interest rates that were too low for our economy.

1. economic growth now dependant on construction
2. oversupply of houses now
3. higher and rising interest rates

roll on the bust, cos its my only hope of ever buying a house.
besides making money from property speculation is the lazy way to get rich, just sitting and watching your capital grow was simply too good to last.

Careful what you wish for when the downturn hits.

● The banks will tighten up their lending criteria significantly making it almost impossible to get a home loan.
● You will be lucky to keep your job, if you do, then may have to accept a pay cut. Employers will seize on this to increase productivity (Would you prefer to work on Saturday, for free!, or not work the following Monday)
● In a recession the focus turns from people with money to invest to one of survival. (its easier to move where any jobs are if you are not tied to property)
● Interest rates and fuel prices will rise.
● A significant number of properties will come on the market at once, with those on the extremities of the commuter belt loosing most value. Some will cut their losses initially, Most will stick on the way down.
● Suicide will rise substantially (including some that will take their families with them)
● Land prices will fall (Japan actually has a land shortage, but it still declined)
● We are tied to the American/UK economic cycle, the multinationals will be very quick to lay off people (e.g. Intel, HP, Dell)
● Retail outlets will close all over as demand for luxury goods falls off a cliff.

Ok, I know I am painting a very depressing picture

It's not that bad, remember our ancestors (1840's famine) had it much worse.
Anyone who has been prudent with the management of their income/expenditure will probably get through, those that have over-extended themselves or put their life savings in a single asset (housing) will pay a very heavy price.