Housing bubble starting to pop?

whizzbang

Shane&#8482 wrote:

I think you're trolling now

is it still trolling if I do it in real life?

gearoidmm

There have already been two soft landings that were bravely averted by a combination of stupid government policies and greedy banks. There was a soft landing in 2001 engineered by the anti-investor policies of the government of the time which were then duly reversed. There was a second soft landing in the first six months of 2005 - house prices had only appreciated by 2.6% between Jan and July although this had not been fully picked up in the YOY figures because the rises of late 2004 were still included in the figures - and this was before any interest rate rises. Then, along come the cavalry - the introduction of 100% mortgages and a general increase in the terms of mortgages along with a relaxation of the asset requirements for investors.

Up to the middle of 2005, I had been convinced that there was a bubble that was going to burst but the statistics proved that I might have been wrong as the fabled soft landing was in sight. The biggest con perpetrated on the Irish public is the idea that the banks introduced these products to 'help' unfortunate FTBs who otherwise could not get on the ladder. In essence all that they did was flood the system with even more credit at a time when things were just about settling down resulting in the massive price rises seen in the last year - now we're definitely in a bubble.

i dont think its possible but the worst thing that could happen in my opinion is a slow down and a levelling off.
Young people are being SCREWED and not in a good way, 35 - 40 yr mortgages? if that was to continue and I was starting out all over again I would move abroad
as happens I sold up and am moving abroad soon! VERY VERY VERY VERY VERY VERY VERY BITTER AND ANGRY AT THE PEOPLE WHO BOUGHT UP THE COUNTRY

Cantab.

Deleted User wrote:

i dont think its possible but the worst thing that could happen in my opinion is a slow down and a levelling off.
Young people are being SCREWED and not in a good way, 35 - 40 yr mortgages? if that was to continue and I was starting out all over again I would move abroad
as happens I sold up and am moving abroad soon! VERY VERY VERY VERY VERY VERY VERY BITTER AND ANGRY AT THE PEOPLE WHO BOUGHT UP THE COUNTRY

<sarcasm>

But young people don't vote, so it doesn't matter how they feel!

Keep them commuters contained - it's worth sacraficing a couple of seats in commuterland - they'll all vote Labour/FG anyway so don't waste any time here. Forget the commuter areas, it's the farmers' votes we're after.

OAPs, farmers and the leafy suburban classes - that's where to concentrate the effort.

</sarcasm>

finnpark

Well I don't think anyone is dissagreeing that house prices will go down in price big time at some stage but how can you predict the date. What methods are you using to come with with your figures?

A major ecomonic down is due soon and if such a depression were to occur I would suspect that the housing market would actually collapse. In fact the banks may find it hard to sell on repocessed houses. This of course leads to the question "Economic Bubble starting to burst?". Maybe I should start a thread on that, I wonder will it be as successful as this one.

belly

) When did the bubble start?
bubble what bubble?

When did you genuinely believe there was a bubble?
i dont


C) When did you start to believe it will burst? (Honestly!)
burst as in dot com? it wont happen

D) When is it going to 'pop'?
pop burst overheat big bang blah blah blah. as long as theres full employment cheap money and the historical want of irish people to own there own property prices will contiue to rise.



E) Provide a definition of your understanding of the word 'pop' please..
carbonated sugary drink also known as a mineral

Sponge Bob

gearoidmm wrote:

There have already been two soft landings that were bravely averted by a combination of stupid government policies and greedy banks. There was a soft landing in 2001 engineered by the anti-investor policies of the government of the time which were then duly reversed. There was a second soft landing in the first six months of 2005 - house prices had only appreciated by 2.6% between Jan and July although this had not been fully picked up in the YOY figures because the rises of late 2004 were still included in the figures - and this was before any interest rate rises. Then, along come the cavalry - the introduction of 100% mortgages and a general increase in the terms of mortgages along with a relaxation of the asset requirements for investors.

But which one of them was THE soft landing...a sustainable plateau in a normal interest rate environment. I'll wager it was the 2001 plateau .
Then we lost the run of ourselves by building about 400,000 homes in the last 5 years and built a massive oversupply into the equation.

I reckon we will not only fall back to 2001 levels of house prices but that there is a risk we will keep going below that .

This means that the €150k 3 bed semi in Galway _could_ put in an appearance again but I would certainly expect the sub €200k variant to reappear.

now we're definitely in a bubble.

we were there by 2003 in my opinion. The post 2001 'investor' never let their homes but often sat on them becuase they appreciated so much. I can show you swathes and swathes of post 2001 empties.

Property values never fall, of course they don't, so please ignore me

Sizzler

belly wrote:

) When did the bubble start?
bubble what bubble?

When did you genuinely believe there was a bubble?
i dont


C) When did you start to believe it will burst? (Honestly!)
burst as in dot com? it wont happen

D) When is it going to 'pop'?
pop burst overheat big bang blah blah blah. as long as theres full employment cheap money and the historical want of irish people to own there own property prices will contiue to rise.



E) Provide a definition of your understanding of the word 'pop' please..
carbonated sugary drink also known as a mineral

Class

Sizzler

Pa ElGrande wrote:

A) When did the bubble start?
2001 when interest rates were lowered and the cost of renting started to be less than the mortage.
When did you genuinely believe there was a bubble?
December 2005
C) When did you start to believe it will burst? (Honestly!)
December 2005
D) When is it going to 'pop'?
It may already have begun this summer 2006, if not by the year end 2007.
E) Provide a definition of your understanding of the word 'pop' please..
Average selling prices decrease and inventory builds as sellers are reluctant to sell for less than its worth.

Please note the above is my opinion in Sept. 2006, if data becomes available I will revise my opinion, do not base your decisions to sell or buy property solely on mine or anyone else's opinion. You must conduct your own research into the Irish property market if you are considering buying or selling.

A) 2001, wow, the bubble must be getting pretty big then if its now 5 yrs old :eek:
B & C) Are you not getting bored now trying to justify your predictions?
D)So if you we're still here banging on about the bubble about to pop next year and stats say otherwise will you admit defeat or will you adopt the Paisley stance...NO SURRENDER!

very one sided arguments here
same on askaboutmoney.com
would like to hear some arguments against a crash for the crack

daveirl

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daveirl

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Sizzler

Sponge Bob wrote:

I hear more of a long loud hiss than a pop if you don't mind. At the bottom of this hissing cycle some extreme commute areas like Cavan or Monaghan or Wexford or Longford will fall as much as 50% , this will take maybe 3 years from now.

Good areas like Rathgar will not fall by that much, I will wager 25-30%

I agree with you on the high value properties because the higher the investment the more volatile its going to be.Lets face it theres not that many punters in the market place with 3-5m to spend on those type of dwellings so we're talking small circles of funds there.

Those type of properties aside, lets get to the average joe punter type residence, yes they have seen truly ridiculous appreciation but what exactly will the deflated bubble bring? Massive devalue in the present MV ? Stagnant growth? Loss on the original cost? Correction on the appreciation versus what the owner originally paid for it? Interested to see what peoples understanding of popping actually means

SkepticOne

gearoidmm wrote:

Then, along come the cavalry - the introduction of 100% mortgages and a general increase in the terms of mortgages along with a relaxation of the asset requirements for investors.

I think the next product will be the 100% interest-only mortgage. Might keep the thing going a bit longer.

You could also have a facility for voluntary capital repayments for when the mortgage holder comes into a bit of money. Although most people would not make much use of this facility, it would alleviate the depressing notion of a loan that is never paid off.

Call it a fleximortgage. I could see this selling quite well.

SimpleSam06

SkepticOne wrote:

I think the next product will be the 100% interest-only mortgage. Might keep the thing going a bit longer.

Err, isn't that just paying rent to the bank, except at a variable rate? They'll have to get the marketing department working overtime to put a good spin on that one! Still, in 50 years, the inflation would have worked your mortgage debt down to a manageable level, if you don't go bankrupt in the interim. I'd better not give them ideas. Have they put inter-generational mortgages on the block yet?

still no anti crash arguments
gettin boring now

Sizzler

daveirl wrote:

This post has been deleted.

I wont BS my way thru 2001 stats as I was too busy pi55ing my own money up against the wall lol, so I'll stick to what I know which is the last 2-3yrs.

Sizzler

Deleted User wrote:

still no anti crash arguments
gettin boring now

Exit stage left so...

Supercell

I/O 100% mortgages, jeepers, talk about snake oil!

I don't doubt this and intergenerational mortgages are the next step the banks would take if allowed to.
Raising the stamp duty boundry would be another example of the govt capitulating to the property investors, I lay a huge part of this bubble blame at the FF'rs and their wink wink nod nod style of politics.

Personally CANNOT WAIT for the canvassers to come knocking on my rental door asking for my vote come the next election.

Whats really frustraiting is that FG seem to be an equally inept/corrupt shower of muppets and imho likely to do the exact same as FF would.

The only polititons that seem to genuinly stand for something these days are the independants and Sinn Fein.

Honestly believe the market peaked last spring,now its just a matter of watching stagnation (disbelief that the Irish mantra of you can't loose money on property might not be true after all - tell it to the yanks already) , followed by slow decline for next year or so before the real plummet starts.

Save save save is my mantra right now.

SimpleSam06

Longfield wrote:

Honestly believe the market peaked last spring,now its just a matter of watching stagnation (disbelief that the Irish mantra of you can't loose money on property might not be true after all - tell it to the yanks already) , followed by slow decline for next year or so before the real plummet starts.

Its incredibly hard to tell at this juncture. I've seen properties going for the usual silly prices, and higher, and I've seen prices slashed by 20 and 30% in the last few weeks, not to mention an unreal amount of "for sale" signs. It appears to be a lot of random flailing on all sides.

One thing I know for sure, the term "Bull" has never been truer.

Supercell

Maybe "bull in a china shop" is better

ircoha

Delta Homes to cease trading

September 06, 2006 18:32
Cork based specialist construction firm Delta Off-Site Solutions has confirmed it is to cease trading with the loss of 180 jobs.

The board said it had made strenuous efforts over the past six weeks to secure additional investment for the company which manufactured kitchen and bathroom units.

A spokeswoman said that two potential investors had been identified, but that plans had fallen through.


The company said it had no alternative now but to cease trading, a decision which it said it very much regrets.

Last month the company had temporarily laid off employees, citing the pushing back of planned projects from August until later in the year.

Established in 2002, the company which manufactures bathroom and kitchen pods for the construction industry, had a turnover of €17m in 2004.

In February, it received a €1m investment from Enterprise Ireland. Delta Off-Site Solutions, as the company is also called, was set up by Patrick O'Callaghan.

Mr O'Callaghan was named Emerging Entrepreneur of The Year in the Ernst & Young Entrepreneur of the Year Awards 2004.

hmmm

Deleted User wrote:

still no anti crash arguments
gettin boring now

House prices always go up
There will be 2 million Bulgarians moving here shortly
We still have not reached the "greatest fool"
We are running out of land and if you don't buy now you will end up living on a fishing trawler

SimpleSam06

hmmm wrote:

We are running out of land and if you don't buy now you will end up living on a fishing trawler

Whats the NASDAQ listing for them lads that make the aran jumpers? I better buy a few shares while I still can... :eek:

belly

why would there be a fall in house prices?

as long as the gov dont interfere and unemployment remains high in germany/france then interest rates will remain low and property prices will continue to climb and long may it continue:D

belly

Sponge Bob wrote:

But which one of them was THE soft landing...a sustainable plateau in a normal interest rate environment. I'll wager it was the 2001 plateau .
Then we lost the run of ourselves by building about 400,000 homes in the last 5 years and built a massive oversupply into the equation.

I reckon we will not only fall back to 2001 levels of house prices but that there is a risk we will keep going below that .

This means that the €150k 3 bed semi in Galway _could_ put in an appearance again but I would certainly expect the sub €200k variant to reappear.

we were there by 2003 in my opinion. The post 2001 'investor' never let their homes but often sat on them becuase they appreciated so much. I can show you swathes and swathes of post 2001 empties.

Property values never fall, of course they don't, so please ignore me

150k 3 bed semi in galway:eek: ? maybe in tuam but not with an asses roar of galway city

daveirl

This post has been deleted.

whizzbang

hmmm wrote:

House prices always go up
There will be 2 million Bulgarians moving here shortly
We still have not reached the "greatest fool"
We are running out of land and if you don't buy now you will end up living on a fishing trawler

2 million seems a little high

how many of them will be buying houses at 300k though?

granted it will help rental market for a bit.

whizzbang

belly wrote:

why would there be a fall in house prices?

as long as the gov dont interfere and unemployment remains high in germany/france then interest rates will remain low and property prices will continue to climb and long may it continue:D

thats a lot fo unlikely "if"s!

gov interference: election are a brewin, they're all going to want to "manage the soft landing"
Germany seems to be doing very well these days, hence interest rate hikes.

Also, prices in Ireland are based on sentiment, sentiment which seems to be changing these days...

Sponge Bob

belly wrote:

why would there be a fall in house prices?

Oversupply or Oversupply or Oversupply and Interest Rates

17% of our housing stock (nearly 300000 units mostly modern and habitable ), is empty as the investors rely on a combination of tax breaks and capital appreciation to 'make money'

Once the capital appreciation stops they stop 'making' money and head for the exits . Thats happening now but the Auctioneers are allowing their mates to get out first and pretending there is no problem and that the SSIAs will mean more rises next year

By about Apr-June next year it becomes a stampede as the realisation bites that there is no SSIA 'bounce' to be had but its too late for the junior investors by then .

_kaBoom_