Boycott Of The Housing Market

mkdon05

If everyone on the boards, and all their friends and family, plus anyone else they could influence, decided not to buy a house for a ridiculous consideration for a set period of time,
Would this not be an effective drive to reduce house prices? If no one is willing to pay 380000euro for a house thats worth 250000euro, that would cause a lot of sellers to reduce their asking price.

A Tall order but I urge everyone to Spread the word.






66cent per litre of petrol is a grossly overpriced tax the government is reaping from your rewards.

jhegarty

mkdon05 wrote:

If everyone on the boards, and all their friends and family, plus anyone else they could influence, decided not to buy a house for a ridiculous consideration for a set period of time,
Would this not be an effective drive to reduce house prices? If no one is willing to pay 380000euro for a house thats worth 250000euro, that would cause a lot of sellers to reduce their asking price.

A Tall order but I urge everyone to Spread the word.






66cent per litre of petrol is a grossly overpriced tax the government is reaping from your rewards.

do I even have to say why that wouldn't work.....

oh look there is a house I want at a price I can pay... better not though , that guy I know who uses boards told me not too...

threebeards

mkdon05 wrote:

I urge everyone to Spread the word.

Yeah, so do I because it's really going to work :rolleyes:

mkdon05

1. You don't know me
2. Your in the minority of people that can afford a house
3. When you fork out for you overpriced house and the market deteriorates due to house prices topping 15 - 20 times peoples salaries, you will have less equity than assets which = you being F**k*d

dunkamania

reasons why collusion fails

1. incentive to cheat

2. inability to detect/punish cheaters

narommy

WHAT STUPIDITY.


Really??

Has the OP considered what he is saying.
Obviously would not work because there are stronger market forces at work than boardsie

Getting over that imagine it did work???????
Average House prices stagnate and then fall by say 10%
Most people would hold on to their houses and decide to stay put thus the areas where people really want to live will not see any decreaase in price. Builders will tighten supplies. And the prices will stabilise.

Taking a step back the only way house prices will fall is if Banks tighten up lending. (or interest rates go up significantly). In fact banks would have to panic and scale back lending substantially.

Who would benefit?
Banks would only extend loans to those who had a high level of collateral and repayment capacity. Thus these people would be the investors who have built up a portfolio over the past few years. The rent that they would receive from their current properties would cover the repayments on those and on any new purchase. There would still be a rental market for properties, (maybe stronger as FTB would not qualify for loans and would have to continue to rent)
The rich get richer!!!!

Idleater

mkdon05 wrote:

1. You don't know me

So why would anyone trust you?

mkdon05 wrote:

2. Your in the minority of people that can afford a house

How can anyone in the "majority" get proof that you are not one of *them* in the minority, looking to "scam" them? Say, for example, you are greedy and want to reduce some of the opposition to your buying power. And then for all people know, you could decide to inflate your rents due to your monopoly in the market.

mkdon05 wrote:

3. When you fork out for you overpriced house and the market deteriorates due to house prices topping 15 - 20 times peoples salaries, you will have less equity than assets which = you being F**k*d

And what do you propose to do then? Buy? How would the "majority" of people that are being "scammed" know when the market has completely crashed? Do you decide?

Let us all know. You seem to be "in" on something bigger than you want to let on...

L.

EKRIUQ

I think the housing market in Ireland is undervalued!!, I said this 2 years ago and people told me I was crazy, and now 2 years on prices are still rising. So maybe when the prices start to slow then we'll know when there value for money/.

Pa ElGrande

Thousands of young people took to the streets yesterday in 60 towns and cities to protest at the price of housing in Spain and to ask the Spanish government to do something to protect the right of young people to buy a decent house.

The protests were organised spontaneously via e-mail messages, websites and sms and were not coordinated by any youth organisation, trade union or any other protest group. The biggest protests were held in Madrid and Barcelona where more than one thousand protesters gathered at the Puerta del Sol and Plaza de Catalunya respectively, and in Valencia (900 protesters). In other towns like Sevilla, Granada, Cordoba, Bilbao and San Sebastian, the concentrations were smaller with 200 to 150 participants.

During the protests, the participants sat down and chanted slogans criticising national and local government for failing to guarantee the right to a house by allowing property prices to rise above what many people can afford. They also criticised real estate speculation with chants like "Hands up, this is a hold up" or "Protect our right to a roof. Housing isn't a business. It's a right".

Protests over the price of housing in Spain
http://www.euroresidentes.com/Blogs/2006/05/protests-over-price-of-housing-in.html

Why not protest like they did in Spain?

Pa ElGrande

mkdon05 wrote:

If everyone on the boards, and all their friends and family, plus anyone else they could influence, decided not to buy a house for a ridiculous consideration for a set period of time,
Would this not be an effective drive to reduce house prices? If no one is willing to pay 380000euro for a house thats worth 250000euro, that would cause a lot of sellers to reduce their asking price.

It would cause a temporary blip and then it would be business as usual, but with higher prices at the end. There are too many vested interests in this market for this approach to be effective.

All western economies move in boom/bust cycles, our situation is exacerbated by the bubble, one of the characteristics of this is we don't think rationally and react emotionally to the situation.

If you want to understand who these interests driving the market are then take the time to read this. Any first time buyer in the current market should read before commiting to a lifetime of debt.

http://adam.webline.co.uk/personal/dontdoit.pdf

Phil Lynott
From Yellow Pearl

It is foolish to venture into strange enchanted places
If they aren't the places you want to be

It is foolish under the guise of love and liberty
That we should capitalize and rob and fell
The poor for the socialistic tree

We are now living in a situation
Where that self same situation depends on the Yellow Pearl

Have no fear the current prices are only sustainable while cheap credit is available, and recent international trends point to a global rise in interest rates + several housing markets globally that were previously booming are falling (some people are already in negative equity, US & Australia)
We are about to enter a turbulent period in the global economy over the next few years.

If you are planning to settle and start a family, then don't let the lack of a mortgage stop you. Kids don't care what house they live in, as long as they have the attention of their parents.

Renting also means you have the flexibilty to move as your career progresses, most of us will change jobs at least 6 times over our working lives.

If you don't have a mortgage you can save (earn interest), better returns on your money than housing are also open to you.
And if you do decide to buy a house when the market suits you, you have a bigger deposit, smaller mortgage and probably better choice of house.

MrSinn

houses houses houses,the hot topic in ireland in the 21th century,welcome to the 19th century

Pa ElGrande

MrSinn wrote:

houses houses houses,the hot topic in ireland in the 21th century,welcome to the 19th century

Its not just Ireland, The best place to go right now if you want to avoid the subject is Germany.

In come the waves
http://www.economist.com/finance/displayStory.cfm?story_id=4079027

You are right our obsession with property is regressive, there must be more more to life thab bricks and mortar.

r3nu4l

OP, I understand your frustration but unfortunately that approach just would not work for the reasons already posted and many others.

Also, mass protests? Yeah, that would work! They held mass protests against the war in Iraq and that was very successful...Oh, no it wasn't.

You see, there are far too many vested interests to allow the poor unwashed, heaving, vomit-ridden masses (i.e. regular working people) that live in rented accommodation to buy houses! Many developers, politicians and businessmen in Ireland own a huge amount of commercial and residential property so why on earth would they ever consider actively correcting the prices?

Sorry to burst the bubble but there you have it.

shoegirl

mkdon05 wrote:

Would this not be an effective drive to reduce house prices? If no one is willing to pay 380000euro for a house thats worth 250000euro, that would cause a lot of sellers to reduce their asking price.

No need. The market is overheating at a rapid pace, so it won't be long until large swathes of people simply no longer have the option of buying a house. I've a friend earning 40k a year had to jump through hoops to get a mortgage to buy a 223k house - and even then all the providers but one turned her down, and under ridiculously unfair terms (like wanting a year's repayments upfront as security!)

And that's for what is a very cheap house by today's standards - unless the mortgage providers really relax lending even more (which I don't think they are going to), a large batch of first time buyers will be priced out of the market by the end of the year, if not already.

According to this article, lenders have already tightened up lending considerably, they describe it as "cherrypicking" but I don't think its because they simply have so many people crying out for loans - I suspect they are trying to avoid against future defaulters.

The inevitable reaction to this will probably be an explosion of subprime lenders only to happy to gouge those who cannot get loans.

shepthedog

Yes of course why didnt we think of this before.. Genius... Boards will be the solution to the housing problem... Ahhhhhhhhhh Nah... How can this be serious??

Besides, dont think the demographic of the average boards user will match that of the average house buyer... Lol how many teenagers you know with their own house..
Back to the drawing board for you I think..

garred

I don't think houses are overpriced. I could'nt afford a house over 10 years ago but I can now. Being on an average salary back then and harder lending criteria the only option was renting. Now there are a lot more options available to borrowers in terms of borrowing and property. Don't know what the OP classifies as worth though. Why is a 380,000 house only worth 250,000? What criteria are you using to classify the worth?

CiaranC

Theres no need to boycott the housing market as its about to COLLAPSE any second, just as soon as all these developments with people queueing up for a week to buy them are sold its going to COLLAPSE I tell you, except it maybe will rise for another 5 years or so first but then it will COLLAPSE and you will all be sorry.

*edit* its gonna COLLAPSE! rawr

Notice: Property prices may rise as well as fall. Or stay level. Or slow down. Or ease off. Or grow.

Pa ElGrande

Here's a funny take on this, worth a listen if you get a chance.

When Will The Property Bubble Burst?"
http://leviathan.libsyn.org/

Kinetic^

Yes it will burst but we've got another 5 years or so.

Everyone thought it would burst a few years ago, you know why it didn't because the mortgage companies brought out new products so that people could afford a house, and they're still bringing them out. 100% mortgages and interest only payments. They'll use these to soak up the market and then hey'll come out with like 50 year mortgages and stuff like that.

Catney

CiaranC wrote:

Theres no need to boycott the housing market as its about to COLLAPSE any second, just as soon as all these developments with people queueing up for a week to buy them are sold its going to COLLAPSE I tell you, except it maybe will rise for another 5 years or so first but then it will COLLAPSE and you will all be sorry.

*edit* its gonna COLLAPSE! rawr

Notice: Property prices may rise as well as fall. Or stay level. Or slow down. Or ease off. Or grow.

Its about to collapse any second, but that it may rise for another 5 years and then collapse? Both very different propositions!!! If someone bought now and the market "collapsed" in 5 years, they would probably still be up, as the collapse would need to wipe out all the gains you would have made over those 5 years before you would be any worse off. There is no evidence to suggest that house prices will substantially fall, the rate of growth will temper soon, no doubt about it. Interest rates are going up, sure, but not anything like Oz, Iceland or early 90's UK.

Supercell

Catney wrote:

There is no evidence to suggest that house prices will substantially fall, the rate of growth will temper soon, no doubt about it. Interest rates are going up, sure, but not anything like Oz, Iceland or early 90's UK.

This is one attitude that I don't understand, whats different about this cycle to all others in the past?, people seem to think that this phenominal rise won't have an inverse like every other time in the past, why ?

I'm no economist, just logicaly cannot grasp the blind faith that all is fine for the housing market to keep rising at 10% + for years on end when wage inflation is far lower, and investment yields are in the 3% range ..what is special about this boom ?

I seem to remember someone posting that ~40% of housing is owned by investors, well with yields in the 3% range..what happens when they move on to the next best earner as they surely will ?, other posts suggest that the investers are already starting to cash out.

lomb

Keyser Soze 5 wrote:

Yes it will burst but we've got another 5 years or so.

Everyone thought it would burst a few years ago, you know why it didn't because the mortgage companies brought out new products so that people could afford a house, and they're still bringing them out. 100% mortgages and interest only payments. They'll use these to soak up the market and then hey'll come out with like 50 year mortgages and stuff like that.

very true. aib is doing interest only and other banks are doing similar exotic loans. there are people sitting down as we speak concocting super exotic loans to 'grow market share'. the banks are more to blame than anyone. thing is the vast majority in ireland own property and its in no ones interest that the price remains static or falls. i can see them up by another 50%-100% before theres an almighty bang and the fallout begins. thats probably 5 years away and if u buy now chances are ul still be quids in.

Catney

First of all interest rates in this country should be much higher. They are not due to the ailing Europeans economies. So we can be fairly certain that interest rates are not going to cripple us over the next say 5 years.

Secondly, I dont think that there is irresponsible lending by financial institutions. I know some of you, from experience, may have a different opinion. I got a mortgage one year ago, and the bank would only lend me 5 times my salary, even though my salary is only half my total compensation. Regular bonuses all but ignored, shares in the company i work for (under trust) completely ignored. They were very strict.

Thirdly all demographic simulations indicate that our population is growing to increase significantly over the next decade.

Fourthly, councils seem to have an aversion in Dublin to high rise, restricting the amount of available living space.

So forces or demand and supply, and reasonably low interest rates, I would put to you in the medium term will continue to drive prices.

Re investors withdrawing from the market, probably is happening already, and the market is baring it with obvious offsetting effects.

I would say im only favourable to the Irish market over a certain timeline. There will be a peak, and possibly a small fall after, and there are going to be unfortunates that will be caught. But that is not going to happen anytime soo, in my view. Anyone who buys in say the next 1 - 2 years will be safe from the dreaded negative equity.

lomb

Catney wrote:

. I got a mortgage one year ago, and the bank would only lend me 5 times my salary, even though my salary is only half my total compensation. Regular bonuses all but ignored, shares in the company i work for (under trust) completely ignored. They were very strict.

.

ive had dealings directly with a bank and they are jokers offering to loan 70% on the back of a commerical property and 75 if another was given as security, when the industry norm is 75% of the total value of the property advanced... if u put ur proposal on paper with your bonuses etc and passed it to all the banks including the back street ones like iib i can gaurantee u u could have got much more(u may have had to claim u were buying to let and it wouldnt be ur family home to bypass central bank requirements...)

lomb

Catney wrote:

, I dont think that there is irresponsible lending by financial institutions.

there most certainly is. 35 year terms and interest only are crazy, basically whats happening is u are renting from the bank but the price is fixed and u can buy out any time. this bonanza puts severe upward pressure on prices. to increase 100 grand is nothing if the bank gets the payments down 200-300 euro a month which is possible with exotic loans. luckily even if there are 50-100 year mortgages, the banks cannot get the payments any lower than the ecb rate + their fixed margin. luckily for us we are protected from our own folly..

dochasach

jhegarty wrote:

do I even have to say why that wouldn't work.....

oh look there is a house I want at a price I can pay... better not though , that guy I know who uses boards told me not too...

If you want to see an interesting example of the exact opposite of this situation, look at this article:
http://www.news-press.com/apps/pbcs.dll/article?AID=/20060521/NEWS01/605210428/1075

"It's frustrating," Ken Koch said. "People have money, but they are waiting for the prices to go down. It's frustrating for all of us."

But getting angry at a neighbor for lowering their price isn't fair, said John McWilliams, Realtor for Coldwell Banker.

"You can't control the market," McWilliams said. "It sounds good to say, 'Let's all stick together,' but buyers are more sophisticated and shop and compare."

Competition is stiff. Inventory is at an all-time high — 50,000 homes for sale in Lee County, according to McWilliams.

A place where buyers shop and compare? Surreal ;-). I'm not boycotting the housing market, I just have no interest in out-bidding speculators and paniced young buyers who have a parental boost and only a vague understanding of the risk they are getting themselves into.

We would be much better off if we could convince speculators to abandon the Irish property market and instead, prop up the floundering Florida property market.* If the Spanish protesters really want affordable housing, they should run ads in the Irish Times which try to convince Irish speculators to buy property in Florida.
http://google.com/trends?q=spanish+property+&date=all&geo=all&ctab=1&sa=N
...or go to Monte Carlo where the risk/return ratio is comparable. Or Las Vegas (a.k.a "Lost Wages":http://www.lasvegassun.com/sunbin/stories/business/2006/may/21/566650314.html

*Don't worry about the fact that Florida property markets have record inventory, that prices are trending downwards, the house price/income ratio is still better in some Florida markets than it is in Ireland. So it must not be a bubble there either...

masterK

Many people seem to forget that we now live in a first world economy, Dublin has now become one of Europes major cities. For those who think property in Dublin in expensive why don't you see how much a 3 bedroomed semi close to the centre of London would cost, or Paris, Rome or even further a field to New York.

What has happened is house prices have corrected themselves in line with other major cities around the world as Ireland has developed from being a 2nd world economy to joining the worlds elite.

House prices will never collapse, the funny thing is I remember 7 or 8 years ago people saying that they're not buying a house because they are waiting for the market to collapse, guess what they're still waiting. This was at a time when a 3 bed semi in Dublin cost around £100,000. House prices will inevitably peak and level out with small annual increases in line with inflation, but this is still a few years away.

Carb

Catney wrote:

First of all interest rates in this country should be much higher. They are not due to the ailing Europeans economies. So we can be fairly certain that interest rates are not going to cripple us over the next say 5 years.

Secondly, I dont think that there is irresponsible lending by financial institutions. I know some of you, from experience, may have a different opinion. I got a mortgage one year ago, and the bank would only lend me 5 times my salary, even though my salary is only half my total compensation. Regular bonuses all but ignored, shares in the company i work for (under trust) completely ignored. They were very strict.

Thirdly all demographic simulations indicate that our population is growing to increase significantly over the next decade.

Fourthly, councils seem to have an aversion in Dublin to high rise, restricting the amount of available living space.

So forces or demand and supply, and reasonably low interest rates, I would put to you in the medium term will continue to drive prices.

Re investors withdrawing from the market, probably is happening already, and the market is baring it with obvious offsetting effects.

I would say im only favourable to the Irish market over a certain timeline. There will be a peak, and possibly a small fall after, and there are going to be unfortunates that will be caught. But that is not going to happen anytime soo, in my view. Anyone who buys in say the next 1 - 2 years will be safe from the dreaded negative equity.

You addressed every single issue except affordability. At the moment, house prices are been fuelled by new products such as 40 year mortgages, interest only loans, 100% mortgages etc. At some point (unless they keep increasing the term of the loan) banks will run out of options. I know plenty of people who already are struggling to meet the criteria for 200k mortgages, as contrary to popular belief, not everyone earns 40/50k per annum. What sort of a mortgage would you get on the minimum wage. All it will take is a small dip in this ridiculous confidence that people seem to have in property. If there is one year where there is no rise, or even small dip in prices, people will stop buying, wainting to see if prices will fall further, and then the cycle begins. I know developers could stop building to slow down supply, but what will this do for employment, and at 3% yields and falling house prices, I would guess that there is enough property in the hands of investors to meet demand.

Gurgle

Longfield wrote:

I seem to remember someone posting that ~40% of housing is owned by investors, well with yields in the 3% range..what happens when they move on to the next best earner as they surely will ?, other posts suggest that the investers are already starting to cash out.

These mostly aren't professional investors - they tend to be middle-aged wage slaves who have good incomes and a mortgage from 20+ years ago, if any. They can get the loan and shell out the deposit on a 'second-home' then let the rent pay the mortgage.

If the rent even covered half the mortgage and prices stagnated its still one of the best investments for long-term return.

Afuera

masterK wrote:

Many people seem to forget that we now live in a first world economy, Dublin has now become one of Europes major cities. For those who think property in Dublin in expensive why don't you see how much a 3 bedroomed semi close to the centre of London would cost, or Paris, Rome or even further a field to New York.

What has happened is house prices have corrected themselves in line with other major cities around the world as Ireland has developed from being a 2nd world economy to joining the worlds elite.

House prices will never collapse, the funny thing is I remember 7 or 8 years ago people saying that they're not buying a house because they are waiting for the market to collapse, guess what they're still waiting. This was at a time when a 3 bed semi in Dublin cost around £100,000. House prices will inevitably peak and level out with small annual increases in line with inflation, but this is still a few years away.

Comparing Dublin to New York, London or Paris is still just wishful thinking. It's distance from mainland Europe and the lack of an adequate transport system (which will be difficult if not impossible to fully realise with it's terrible planning and low density housing) are always going to hold it back.

Nearly 90% of Irelands exports are due to foreign multinationals (http://www.finfacts.com/irelandbusinessnews/publish/article_10004926.shtml) so Irelands economy is more comparable to a foreign tax haven than an actual first world economy. Recently the US government took action against Symantec for their practises in Ireland which may be a sign that they are going to try and challenge some of the money "laundered" in Ireland.

PDelux

This is an interesting discussion, I have to say.

I feel sorry for the people trying to get on the property ladder(presumably like the original poster) when I read figures like 25% of people buying the houses are investors. (I know someone mentioned 40%)
I wouldnt mind 25% or even 40% if supply was closer to demand but i just think it is frustrating for prospective home owners in the current climate.
I'm am no expert on the property market but i wonder if the Government could do anything to help people get on the ladder?

GreeBo

Longfield wrote:

I seem to remember someone posting that ~40% of housing is owned by investors, well with yields in the 3% range..what happens when they move on to the next best earner as they surely will ?,

The people who are renting the houses from the investors will buy them.

GreeBo

Carb wrote:

At the moment, house prices are been fuelled by new products such as 40 year mortgages, interest only loans, 100% mortgages etc.

Very few people actually get these deals, you need to meet some strict criteria.
You cant just walk in off the street and get 400k over 40 years.

Gurgle

PDelux wrote:

I'm am no expert on the property market but i wonder if the Government could do anything to help people get on the ladder?

I'm no expert on the political system but I wonder how much money is donated to political parties by people who can't afford their own house.

Carb

GreeBo wrote:

Very few people actually get these deals, you need to meet some strict criteria.
You cant just walk in off the street and get 400k over 40 years.

Not yet, plus most people don't earn enough to borrow 400k anyway. The fact is, 7/8 years ago 20/25 year mortgages were the norm, then 30 years, then 35 years (mine included), and now people are starting to talk about 40 year mortgages. On repayments of roughly €1400 per month, you would have 300k over 30 years or 340k over 35 years. Add another five years and you can spend 380k but this can't go on forever.

Catney

Gurgle wrote:

I'm no expert on the political system but I wonder how much money is donated to political parties by people who can't afford their own house.

not a penny

Darragh29

The place to protest most effectively about this is come the next election! Don't vote for FF or the PD's, because they brought you your rip-off Ireland and your over inflated property market. Don't vote for FG or Labour because the situation will be no different if not worse under their stewardship. Register a single protest vote for an independent candidate, then the builders will not have the political control that they curently enjoy. The builders are the only winners in Ireland 2006 in relation to the property situation here. People who are paying 300k plus for a property, they are not winning, businesses are not winning as most, espsecially start-ups rent from greedy landlords who bought their properties years ago and charge crazy rents. I think we have to be the change we want to see in this country, so said Gandai.

Gurgle

Darragh29 wrote:

Register a single protest vote for an independent candidate

Thats pretty much the conclusion I've reached.
Vote for nobody with a party affiliation.

Raskolnikov

Shenzhen Resident Initiates Campaign to Boycott High-Priced Housing
Internet campaign against housing prices draws thousands of responses
By Yan Ming
Radio Free Asia May 06, 2006


The housing prices are skyrocketing in China's major cities and are beyond the affordability of the general public. (China Photos/Getty Images)The housing prices are skyrocketing in China's major cities and are beyond the affordability of the general public. A Shenzhen City resident named Zou Tao posted an open letter on the Internet urging people to "boycott high-priced housing," and was soon echoed by a large number of others. Shortly after, however, the open letter and the related messages on the web site were deleted. Furthermore, the web site has been blocked, and the campaign played down.

Shenzhen City's housing prices in the first quarter of 2006 rose by 20 percent compared with the same quarter of the previous year. The average housing price amounted to 8,700 Yuan (US$ 1,085) per square meter (about 10 square feet), which is far higher than what average people can afford. Zou Tao, a resident of Shenzhen City, who once recommended himself as a candidate for Shenzhen's representative of the People's Congress, launched the campaign to "boycott high-priced housing" on April 26. He called on all citizens to "cast votes with feet and boycott high-priced housing," while requesting real estate companies to take initiative in lowering housing prices to a reasonable level.

According to the Southern Metropolitan Daily , as of 7 pm the following day there were over 5,000 messages posted in response to the campaign, of which the overwhelming majority was supportive. Among them, over one thousand users left their contact information on the web site. Moreover, many expressed that they would initiate similar campaigns in other cities.

Zou Tao's open letter was posted on, oeeee.com, a popular web site in Shenzhen. An Epoch Times reporter has been attempting to access oeeee.com and szonline.net since April 28 without success. Following is a conversation between our reporter and a cyber police officer from a phone call made to the network supervisory department of the Shenzhen City Police Bureau.

Reporter: "Did you delete a large number of messages on the oeeee.com? Or did you ask someone to do so?"

Cyber police: "I have no idea."

Reporter: "Do you mean that you don't know, or you didn't do it?"

Cyber police: "I don't know."

On April 28, an insider of the case told our reporter that over one thousand messages echoing the open letter had already been deleted, but that Zou Tao would continue to go ahead with his campaign. At present, when entering "Zou Tao" into the Chinese search engine baidu.com, his personal web site as well as articles relating to his "boycott high-priced housing" campaign can still be found. Given that, Ma Xiaoming, an independent opinion figure in Xi'an City said:

"It is natural for the general public to initiate this kind of protest. Although it may have an impact on public opinion and spirit, the boycott is unlikely to really change real estate speculators' rigid mindset or their habits of colluding government officials to speculate in real estate market. However, if the government does not pay attention to this matter, it is very likely that the problem with real estate will lead to an even greater disturbance in society."

To curb housing prices, Beijing has initiated the overall control of real estate in 2005. In spite of this, housing prices have recently soared. In the meantime, the rate of vacant real estate remains quite high. According to Chinese media, as of last March, the total area of vacant houses reached 123 million square meters. The result is a large amount of vacant housing units, with many people still unable to afford a place to live. This phenomenon indicates the severity of the manipulation of housing prices. With regards to this, Professor Hu Xingdou at the Beijing Institute of Technology said:

"I believe that the hike in housing prices is inevitable, as the price mainly depends on the relationship of supply and demand. But, of course, the skyrocketing housing prices have much to do with various management problems. In other words, about one third of housing price is in fact for the payment of taxes and fees. If the taxes and fees can be slashed, housing prices will certainly drop. However, some local governments are highly reliant on proceeds from selling public land and collection of various taxes and fees.

Certainly, some problems in the real estate sector are also a result of unscrupulous businessmen colluding with government officials. In terms of running real estate business in China; since land is mainly purchased from the government and can be mortgaged to banks for loans, real estate business often doesn't need much money poured into it. In other words, nearly 70 percent of capital in the real estate industry is borrowed from banks. But how is it that businesspeople get loans from banks? And how can they purchase land from the government? In these regards, I would say it is because power has outweighed market economy in China."

lomb

Gurgle wrote:

Thats pretty much the conclusion I've reached.
Vote for nobody with a party affiliation.

true, but the majority of the irish voting eligible public are landowners themselves. and the majority look after themselves and want prices to rocket. the young are left transferring wealth to the old. but one day the old ones will have to transfer it back, so there are two ways of looking at things

RainyDay

Gurgle wrote:

Thats pretty much the conclusion I've reached.
Vote for nobody with a party affiliation.

A vote for an independent is a cop-out & a waste. How many independents have been quite happy to join up with one of the main parties once they got a sniff of a nice promotion. The independents in the current Dail have absolutely no power or influence, and have done nothing for their constituents.


For the record, I'm a Labour party member.

Gurgle

RainyDay wrote:

A vote for an independent is a cop-out & a waste. How many independents have been quite happy to join up with one of the main parties once they got a sniff of a nice promotion. The independents in the current Dail have absolutely no power or influence, and have done nothing for their constituents.

A vote for a party member is a cop-out and a waste.

Every party runs on corporate funding, and the arrangement couldn't be more transparent - We give you money, we expect you to support our business interests.

An individual politician may be incorruptible and as pure as the driven snow, but when it comes to a vote in the Dail, that TD doesn't generally get to make the decision himself. He is instructed on how to vote by the party.

An independant will usually be standing on the platform of a particular issue. In a party coallition, the independant can get support for their agenda in exchange for their support on other votes.

In a Dail full of independants, you would have a situation where the politicians are all working to achieve the aims of their election, while the administration of the country would to a greater extent be left to the civil servants who a) do it anyway and b) are currently prevented from doing it efficiently by the party in government and the favours they owe to their sponsors.

Voting for an independant is a vote for the aims that person wants to achieve while a vote for a party is always a vote for the rich to get richer.

This is most blatantly obvious in the housing market (getting back to the original topic), where the prices and profits are allowed to skyrocket by the policy of allowing building developers to build a new estate when and where they want to but preventing the common people from building their own house under practically any circumstances.

Pa ElGrande

A new regulator is to be appointed by the Government to protect the rights of house hunters.

The Director of National Property Services Regulatory Authority will be responsible for eliminating misleading or unethical practices in the property industry.

It will bring in new laws to govern estate agent and auctioneer practices, and is expected to come into force before the end of the month.

They will also be able to investigate and impose sanctions on those who breach the guidelines set out by the authority.

A number of new laws will be implemented to protect prospective house buyers from practices such as gazumping (where auctioneers pull out of a deal if they receive a higher price), the setting of unrealistic guide prices and the use of phantom buyers to push prices up.

The move is one of a number of measures being taken by the Minister for Justice Michael McDowell to make buying and selling property easier and more transparent.

The legislation will be published next year.

New property services regulator to protect house buyers
http://breakingnews.iol.ie/news/story.asp?j=185485968&p=y85486674

The cynic in me thinks this is just in time for the end of beginning of the end of the boom and a nice little slogan on someone's election manifesto, but it will never be implemented, since the election will be underway. However if it happens its a belated step in the right direction.

miju

BingoBongo wrote:

I think the housing market in Ireland is undervalued!!,

i thinkk you have your head seriously high in the clouds

miju

masterK wrote:

Many people seem to forget that we now live in a first world economy, Dublin has now become one of Europes major cities. For those who think property in Dublin in expensive why don't you see how much a 3 bedroomed semi close to the centre of London would cost, or Paris, Rome or even further a field to New York.

What has happened is house prices have corrected themselves in line with other major cities around the world as Ireland has developed from being a 2nd world economy to joining the worlds elite.

House prices will never collapse, the funny thing is I remember 7 or 8 years ago people saying that they're not buying a house because they are waiting for the market to collapse, guess what they're still waiting. This was at a time when a 3 bed semi in Dublin cost around £100,000. House prices will inevitably peak and level out with small annual increases in line with inflation, but this is still a few years away.

lmfao , whats happening is people are getting greedy and trying to keep up with the jones and have themselves all flustered into this big bubble that is the irish property market , more and more ftb's are getting priced out of the market so fundementally prices are gonna have to come down sooner if not later ,

what a few people don't realise is that another increase of .50% in the ecb base rate will knock approx 100,000 off the max mortgage of a couple on €72,000 pa to around €325,000 max , that's a shrinkage of about €70,000 off the average Dublin house prices

so with a near definite expected .25% rate rise on august 21st and another .25% in early 2007 we've hit that point and anything after will shrink a couples capacity to loan even more

make no mistake about it , as was recently reported in the Indo in 2002 FTB's made apprx 42% of the property market and in 2005 this has been reduced to 23% or 32% (can't remember which but either way is a large shrinkage) the house of cards has already started to tumble IMHO it'll just take time before the freefall begins

Gurgle

miju wrote:

what a few people don't realise is that another increase of .50% in the ecb base rate will knock approx 100,000 off the max mortgage of a couple on €72,000 pa to around €325,000 max , that's a shrinkage of about €70,000 off the average Dublin house prices

What a lot of people don't realise is that this kind of rubbish has been bandied about since Dublin house prices averaged to £100,000 in the mid 90's.

The correlation you're drawing between prices and FTB's max mortgage just isn't there. What happens is what you described - the proportion of FTBs buying in Dublin just goes down - its already happened, it will continue to happen.

Meanwhile, investors buy houses and pack students / young professionals in like sardines to pay the mortgage.

Dublin has failed to go in the direction of every other major city on Earth - up.

When the high-rise appartment buildings finally start getting built, then and only then we will see a levelling off, even a slight drop in Dublin's house prices. And that will only happen when theres estates full of 3-bed semis on every patch of dirt in the commuter belt.

miju

Gurgle wrote:

What a lot of people don't realise is that this kind of rubbish has been bandied about since Dublin house prices averaged to £100,000 in the mid 90's.

well it may have been bandied about since the 1990's but now the difference is it's now starting to prove correct hence the statistical decline in market share of FTB's

markets rise as well as fall , they don't just rise and rise (contrary to other peoples opinions) history has proven this time and time again , the interest rates and a change in sentiment towards confidence on the market will trigger the decline IMHO

Gurgle

miju wrote:

they don't just rise and rise (contrary to other peoples opinions) history has proven this time and time again, the interest rates and a change in sentiment towards confidence on the market will trigger the decline IMHO

Its pretty unpredictable, but we have to try.
The housing market can go into decline without any reduction in prices, and that is what I expect to see when it overshoots, corrects and levels off in Ireland.

If in any given year inflation is at 5% and house prices increase by 3%, then thats an effective 2% reduction in the house prices. Thats the soft landing thats coming.

Negative equity, repossesions etc. - Not going to happen imho.

whizzbang

Gurgle wrote:

If in any given year inflation is at 5% and house prices increase by 3%, then thats an effective 2% reduction in the house prices. Thats the soft landing thats coming.

Negative equity, repossesions etc. - Not going to happen imho.

I'm fascinated by this soft landing theory, can you find an example of one from history please?

Afuera

Gurgle wrote:

If in any given year inflation is at 5% and house prices increase by 3%, then thats an effective 2% reduction in the house prices. Thats the soft landing thats coming.

Interesting theory. But why would investors (which currently make up about 45% of buyers) continue to buy if there is no capital appreciation and they are facing rising interest rates?

If you take investors demand away, is there really enough demand from owner-occupiers alone to support all the houses being built?

Gurgle

Afuera wrote:

Interesting theory. But why would investors (which currently make up about 45% of buyers) continue to buy if there is no capital appreciation and they are facing rising interest rates?

Because, even with absolutely no capital appreciation, its still the best return-for-risk investment available.
Take an example:
You buy a house for €400k over 40 years.
Repayments of around €1600 pm (ish).
For simplicity we'll assume that this monthly payment is fixed for the entire 40 years.

Lets say you can only get an average of €1200 rent pm over the first 10 years.

So between income tax, interest relief etc etc your're probably going to be out of pocket by €600 pm for those 10 years. (again, big 'ish)
You're out €72,000 over those 10 years.

Lets say rent goes up to an average of 1600 pm for the next 10 years (equating to inflation of average 3.3% per year)

You're out of pocket by approx €300 pm for those 10 years (income tax offset by interest relief and so on)
Thats another 36,000 you've paid.

Next 10 years, average rent of €2200 pm, keeping inflation at 3.3%
Now you're making money every month.
Say about €200 per month into your hand.
For those 10 years, you're up €24,000.

Final 10 years, average rent €3000 pm, €500 of which ends up in your pocket.
Thats another €50k.

Now, with an overall outlay of €34k, (net present value probably closer to €100k), you have either a source of income from the house or a great big bonus from selling it.

These figures are rough as hell, but I'm trying to err on the side of pessimism.
You don't need capital appreciation to be worthwhile investing in a rental property.