Housing bubble starting to pop?

hmmm

4 out of 10 new jobs being property related? Madness - we are turning into a big pyramid scheme economy. Look at what happened in Albania.

belly

SimpleSam06 wrote:

That limit has already been reached and exceeded, according to Fisk...

says who? fitch? well it must be right so experts including a few or our own have been making predictions about the housing market in this country for ages now a getting mostly wrong time and time again. why dont you try and examine it yourselve and make up your own mind based on what you see in the irish market rather then spouting 3rd party predictions.

SimpleSam06 wrote:

But sure its perfectly normal for prices per square foot in Dublin to be as high as those in Manhattan.Sure so what if New York State has more than five times the population of this entire country.

who cares about manhattan its a completely different dynamic to dublin

SimpleSam06 wrote:

The prices here are perfectly right and natural.

yes its called supply and demand:rolleyes:

SimpleSam06 wrote:

Thats just common sense, so who needs links to back up bullish arguments? In fact who needs anything, just accept it!

you need links if you cant make up your own mind and you need others to do it for you

belly

Pa ElGrande wrote:

The problem is our domestic economy is increasingly dependant on the construction sector and public sector for employment growth, both sectors which you would expect to do well as the population expands. Take away the construction boom and there is a €3 billion hole in government revenue.
Building houses does not create wealth in an economy, its a function of the transfer of wealth from one generation to another, almost entirely funded by borrowing that must be paid off well into the future.

its not that long ago that we were totally dependent on agriculture and we managed to change that fairly quick what makes you think that the irish indigenous companies cant go on creating new jobs in high skilled service secotrs like finance IT etc you dont really have much faith in our economic ability

Pa ElGrande wrote:

The real problem in the public sector is the fact it is a monopoly and is focused on building its own empire rather than delivering the best service. For discussion in another thread, the real problem in the health service is that the fundamental model is broken. A key observation of the investigations into the various scandals, is the lack of accountabilty, departmental scabbling and bad management. If they really wanted to solve the beds crises it can be done overnight, but it is simply used as a tool to extract more money from the government.

disscussion for a different day

Pa ElGrande wrote:

Its funded by record private sector debt, for it to keep going banks must lend even more money. As the wages are generally high its taking more Irish people from the productive sector of the economy (that that generates wealth). Its a cruel confidence trick, since there is a limit to how long this level of borrowing can continue.

again once the demand for property begins to ease back then so will borrowing. i dont think it a cruel trick its just basic economics.

SimpleSam06

belly wrote:

who cares about manhattan its a completely different dynamic to dublin

Yes its the one place on earth where those prices might conceivably be justified. But sure Ireland is different. Its a new paradigm. Saint patrick drove out the property crashes.:D

belly wrote:

why dont you try and examine it yourselve and make up your own mind based on what you see in the irish market rather then spouting 3rd party predictions...you need links if you cant make up your own mind and you need others to do it for you

Who are you belly? Are you a real estate agent? Are you a property speculator? We have no idea. Nor does anyone have any idea who I am, or what stance I might want to take towards property to suit my own ends.

Thats why we support our positions with third party links, that can be examined and either accepted as legit or discredited and discarded, clearly and in the open. If people are going to make what is probably the largest financial decision of their lives, they should investigate as many facts about that investment as possible. Doesn't that make sense to you?

The only reason someone might want to have people making that decision in ignorance, without all the facts, would be if they are trying to pull a fast one. Would that be you belly?

HashSlinging

simple question from a FTB, I am mortage approved to 410k do I buy or wait. looking around north wicklow.I have depoist in hand.

Sponge Bob

simple answer,

DID YOU READ THE THREAD?

CiaranC

Prices are not going to turn today or tomorrow. You are talking at least 2 years before you see any real drop in prices, if indeed it happens at all.

I bought at the start of the year - because I could comfortably afford it, can afford it at %5 interest, I found a property I liked, in the area I wanted, close to work. Your milage may vary.

SimpleSam06

HashSlinging wrote:

simple question from a FTB, I am mortage approved to 410k do I buy or wait. looking around north wicklow.I have depoist in hand.

Belly will sell you a garden shed in Ballyfermot for that. Major potential roysh!

SimpleSam06

CiaranC wrote:

Prices are not going to turn today or tomorrow. You are talking at least 2 years before you see any real drop in prices, if indeed it happens at all.

Have you got any reasons at all for that statement?

CiaranC

Hashslinging, this probably isnt the thread (or website) for advice. Its packed with bitter and twisted workaday individuals on 25k a year who think the market is going to crash by 75% next Tuesday so they can pop down with their 80k in a suitcase and buy a 4 bed in Ranelagh on Wednesday, while being totally unaffected by the wider implications of a crash. Them and the other crowd with their hands on their ears, shaking their heads chanting 'icanthearyouicanthearyouicanthearyou' when someone points out that paying 600k for a 2 bed in Athlone might have been slightly ill-advised.

SimpleSam06

CiaranC wrote:

Hashslinging, this probably isnt the thread (or website) for advice. Its packed with bitter and twisted workaday individuals on 25k a year who think the market is going to crash by 75% next Tuesday so they can pop down with their 80k in a suitcase and buy a 4 bed in Ranelagh on Wednesday, while being totally unaffected by the wider implications of a crash. Them and the other crowd with their hands on their ears, shaking their heads chanting 'icanthearyouicanthearyouicanthearyou' when someone points out that paying 600k for a 2 bed in Athlone might have been slightly ill-advised.

So that would be a no, then.

CiaranC

You're a smug git Sam, you know that?

The above humourous post addresses Hashs post, not yours.

My reasons are:

It is generally accepted that growth will continue in the very short term. Earlier in the thread it was demonstrated that there is still some affordabilty in the market. The property market has continually grown above expectations, and i personally dont see that changing just yet, so I expect growth at least over the next 18 months, gradually slowing.

Many bears have expoused (and demonstrated) the idea that the bubble wont 'pop', but will deflate over an extended period of time, which I tend to agree with in the case of a decline. In which case you will have a period of what, 5 years at least, of looking at buying in a declining market.

So, timing the market is going to be tough as hell, as ever. If someone can afford property, will be able to afford it at the higher interest rates, is happy that their income is reasonably secure, can find a property they like, in an area they want to live in for socioeconomic reasons, then its difficult to see how waiting will really help them, unless we are talking about waiting for a long, long time.

belly

SimpleSam06 wrote:

Yes its the one place on earth where those prices might conceivably be justified. But sure Ireland is different. Its a new paradigm. Saint patrick drove out the property crashes.:D

why?

SimpleSam06 wrote:

Who are you belly? Are you a real estate agent? Are you a property speculator? We have no idea. Nor does anyone have any idea who I am, or what stance I might want to take towards property to suit my own ends.

:rolleyes: yep im a real estate agent and i believe that my time is well spent debating this point on boards as it will increase my business

SimpleSam06 wrote:

Thats why we support our positions with third party links, that can be examined and either accepted as legit or discredited and discarded, clearly and in the open. If people are going to make what is probably the largest financial decision of their lives, they should investigate as many facts about that investment as possible. Doesn't that make sense to you?

facts yes opinions ands speculation on those facts by all the different commentators no. bad news/predictions sells papers you rarely see any of the papers covering the good news.

SimpleSam06 wrote:

The only reason someone might want to have people making that decision in ignorance, without all the facts, would be if they are trying to pull a fast one. Would that be you belly?

yes again im here for my own interest and yes i am here to pull the wool over everyones eyes but i think everyone will sleep soundly in the knowledge that simplesam is here to keep an eye on things for them :rolleyes:

SimpleSam06

CiaranC wrote:

You're a smug git Sam, you know that?

I'm not the one tossing out half baked property advice when I have no right whatsoever to do so, to someone in a position to buy. If he goes ahead and buys based on your post, then takes a bath and loses the house next year, can you be held responsible?

CiaranC wrote:

The above humourous post addresses Hashs post, not yours.

And my post addressed your "humorous" post.

CiaranC wrote:

It is generally accepted that growth will continue in the very short term. Earlier in the thread it was demonstrated that there is still some affordabilty in the market. The property market has continually grown above expectations, and i personally dont see that changing just yet, so I expect growth at least over the next 18 months, gradually slowing.

Generally accepted according to who? If by very short term you mean christmas, I might agree with you. The property market grew above expectations in the period 2001 to 2006, and wildly above expectations. This was due largely to huge loans being available to low interest rates. Rates are currently rising very quickly, with no end in sight, so no, the property bubble cannot continue to expand.

CiaranC wrote:

Many bears have expoused (and demonstrated) the idea that the bubble wont 'pop', but will deflate over an extended period of time, which I tend to agree with in the case of a decline. In which case you will have a period of what, 5 years at least, of looking at buying in a declining market.

There is no reason to believe in a soft landing, particularly after a period of very steep and aggressive growth.

CiaranC wrote:

So, timing the market is going to be tough as hell, as ever. If someone can afford property, will be able to afford it at the higher interest rates, is happy that their income is reasonably secure, can find a property they like, in an area they want to live in for socioeconomic reasons, then its difficult to see how waiting will really help them, unless we are talking about waiting for a long, long time.

If you can afford the property handily, and its a place you like and want to live in for the next 35 years, definetely buy. Waiting for a long, long time otherwise is merely your opinion, and is the same attitude that has landed the country in this mess.

FEER! BUY NOW OR TEH FOREIGNERS WILL GET UR HOWSE! ULL NEVER BUY IF U DONT BUY NOW ULL BE LIVIN WIT TEH KANCKS IN A CARRIVAN!11!11

Sponge Bob

CiaranC wrote:

It is generally accepted that growth will continue in the very short term.

except by Gunne auctioneers who warned of a SIGNIFICANT slowdown only yesterday

Many bears have expoused (and demonstrated) the idea that the bubble wont 'pop', but will deflate over an extended period of time, which I tend to agree with in the case of a decline. In which case you will have a period of what, 5 years at least, of looking at buying in a declining market.

mostly WITHIN 2 years not AFTER 2 years I should think.

So, timing the market is going to be tough as hell, as ever.

thats for sure cc, agrees totally .

If someone can afford property, will be able to afford it at the higher interest rates, is happy that their income is reasonably secure, can find a property they like, in an area they want to live in for socioeconomic reasons, then its difficult to see how waiting will really help them, unless we are talking about waiting for a long, long time.

Yes, if you are a €150k a year hospital consultant with an eye on a €500k house somewhere I will say off with you and good luck

The average person on an average wage should, OTOH, avoid those 1 bed shoeboxes at €300k like the plague especially with a market overhang of 275k properties out there...somewhere.

16% of our housing stock is sitting empty , much of that held by speculators for capital appreciation.

When that capital appreciation rollercoaster stops ...and it just about has, then we will see some fun.

belly

CiaranC wrote:

Hashslinging, this probably isnt the thread (or website) for advice. Its packed with bitter and twisted workaday individuals on 25k a year who think the market is going to crash by 75% next Tuesday so they can pop down with their 80k in a suitcase and buy a 4 bed in Ranelagh on Wednesday, while being totally unaffected by the wider implications of a crash.

CiaranC wrote:

Them and the other crowd with their hands on their ears, shaking their heads chanting 'icanthearyouicanthearyouicanthearyou' when someone points out that paying 600k for a 2 bed in Athlone might have been slightly ill-advised.

must have missed that post

CiaranC

SimpleSam06 wrote:

I'm not the one tossing out half baked property advice when I have no right whatsoever to do so

No right to offer advice based on my own experience, to someone who specifically asked for it, on a public forum?

FEER! BUY NOW OR TEH FOREIGNERS WILL GET UR HOWSE! ULL NEVER BUY IF U DONT BUY NOW ULL BE LIVIN WIT TEH KANCKS IN A CARRIVAN!11!11

Im tired of your obnoxious, arrogant w ank. Ive tried to offer balanced opinions in a public thread. Im done debating with you. Enjoy living in your parents basement for the rest of your life, gob****e.

SimpleSam06

belly wrote:

yep im a real estate agent and i believe that my time is well spent debating this point on boards as it will increase my business

Well now, I never said you were a good real estate agent.

belly wrote:

facts yes opinions ands speculation on those facts by all the different commentators no.

So stick with the newspapers already. This is a discussion board. If you don't like opinions and analysis, go somewhere else.

belly wrote:

bad news/predictions sells papers you rarely see any of the papers covering the good news.

Really. So all the press releases by newspapers about how immigrants are going to save the property day, among other things, were just my imagination then. Not that I would consider that "good" news.

SimpleSam06

CiaranC wrote:

Im tired of your obnoxious, arrogant w ank. Ive tried to offer balanced opinions in a public thread. Im done debating with you. Enjoy living in your parents basement for the rest of your life, gob****e.

Eh nothing like a good, solid, bullish post which hits all the fundamentals of the property market.

CiaranC wrote:

Them and the other crowd with their hands on their ears, shaking their heads chanting 'icanthearyouicanthearyouicanthearyou'

D'Peoples Voice

HashSlinging wrote:

simple question from a FTB, I am mortage approved to 410k do I buy or wait. looking around north wicklow.I have depoist in hand.

there are so many factors to include in this consideration, the list is almost endless like

have you get a hoard of children that need proper accom or your partner is pregnant

can you not find rental accom in the area

Have you even looked at the Local Area Plan for Wicklow to see how many area have been rezoned in wicklow for future housing as supply and demand in the area will ultimately determine the future price!

are you buying because you feel next year they will be higher or because you just want to settle down now

are you working in a profession where your salary is expected to rise greatly over the next few years, in which case a high mortgage is not a concern in the LONG run

do you have a pension or are you planning to downsize your home on retirement to provide a salary

is there any record of heritary illnesses in your family, who will pay your mortgage if you are seriously ill, can't work and you have negative equity

HashSlinging, the way I see it is everyone has different circumstances, no-one can ever advise you based on their circumstances or at least they shouldn't.

I'll leave you with one thought though, the SSIAs were to have lead to lots of FTBs using their lump sums to pay for deposits for houses thus pushing up prices. Yet figures released recently suggests that the % of FTBs taking out mortgages as a % of the overall is FALLING!

"These show some slight decrease in the proportion of first time buyers (to 33.5pc of purchase loans in Q2 2006, from 34.0pc in Q1 and 34.3pc on average in 2005) possibly indicating some impact on this sector from the deteriorating affordability conditions," said Mr Beggs.

http://www.businessworld.ie/livenews.htm?a=1513791
Whenever you hear of SSIAs' think of what the average maturity is! I can tell you it's less that 5% of the average Dublin house price!

jobless

CiaranC wrote:

Prices are not going to turn today or tomorrow. You are talking at least 2 years before you see any real drop in prices, if indeed it happens at all.

I bought at the start of the year - because I could comfortably afford it, can afford it at %5 interest, I found a property I liked, in the area I wanted, close to work. Your milage may vary.

If you read the askaboutmoney thread (long i know) you'll see anecdotal evidence of price drops......worth a read

CiaranC

Sponge Bob wrote:

mostly WITHIN 2 years not AFTER 2 years I should think.

Yeah, I was kinda factoring in that prices will grow a little and have to drop back a bit to todays prices. Anyway, whats 6 months between friends?

Yes, if you are a €150k a year hospital consultant with an eye on a €500k house somewhere I will say off with you and good luck

Most people I know earn around 100k as a couple and bought for around 300k. Its easy to see how they justify it when the ratios are more favourable than their parents were etc.

Cant say Im not worried about the property type being a factor though.

jobless wrote:

If you read the askaboutmoney thread (long i know) you'll see anecdotal evidence of price drops......worth a read

Heh, I stopped reading that thread when they started warning of viglante mobs roaming the streets and a breakdown of society as we know it.

Beta2

I posted this previously on AAM. But its more relevant now with 4 in 10 of all new jobs being created in the construction industry.

When people see all these new jobs being created in the construction they feel reassured that a burst is not iminent. "If there was going to be a slow down they'd start laying people off not employing more"? "The construction industry is showing no signs of slowing down, just look at all the new jobs"!

The unfortunate truth is that its just like a car crash, when you see an amber light infront of you, you put the foot down to get through it and beat the red light.

You know that the light is going to turn red, so you speed up, much like most large developers know there is a crash imminent, they need as many completions sold as quickly as possible, so they accelerate development, hire more workers and work longer shifts to get the developments already started completed and sold.

I know this because my GFs father is a director with a very large developer. In the last few months they have shelved plans for all their dublin city apartment blocks, they have pulled out of deals to buy more land around the country. And they have a large apartment block under construction due for completion in mid 2007, they have just doubled the workforce and are pushing for completion by December 2006.

Six months ago he said he couldn't see a crash happening, now he's managing one, trying to prevent the firm making a loss on future developments.

To counter act what CiaranC might say "Its packed with bitter and twisted workaday individuals on 25k a year who think the market is going to crash by 75% next Tuesday" I'm 23 have a Masters Degree and earn 35K a year, drive a nice car and have a more than substantial deposit sitting in my bank account. ( My Father was a builder so He was able to afford to educate me and give me a start in life, I'm one of the lucky ones )

Thats why I hope people will start to see common sense. Mortgaging 35 years of your life away for a concrete shoebox suspended above a chipper in Athy and commuting 3 hours a day is not a life, Its a jail sentence.

I've seen hundreds of properties go up in value by over 100% in the last 24 months, there is no reason why they won't fall by over 50% in the future.

PS. I've only been a bear for the last 6 months

K_user

CiaranC wrote:

Hashslinging, this probably isnt the thread (or website) for advice. Its packed with bitter and twisted workaday individuals on 25k a year who think the market is going to crash by 75% next Tuesday so they can pop down with their 80k in a suitcase and buy a 4 bed in Ranelagh on Wednesday, while being totally unaffected by the wider implications of a crash. Them and the other crowd with their hands on their ears, shaking their heads chanting 'icanthearyouicanthearyouicanthearyou' when someone points out that paying 600k for a 2 bed in Athlone might have been slightly ill-advised.

This is a statement that I can agree with!

For those that haven’t overstretched themselves life will continue, crash or no crash. For those that are mortgaged up to their necks, its another worry on top of their financial debts. For those with no prospect of getting a house, it’s kind of a pipe dream that those that do will suffer and bring the prices down to a manageable level.

Housing and land will always be expensive, no matter what the economic situation, and it will always be a good investment for the future. If there is a crash, as with everything else in life, it will be those that took the highest risks that will suffer. Those that took the “safe” choice, for the most part, will be ok. Those that sat back and waited will still find themselves waiting…

K_user

To add to my above statement…

There is never a “good” time to get into the property market. There are always risks, there will always be problems, it will always be expensive. But a house, even a family home, is an investment. If you don’t have one, then its you that’s on the back foot, not the guy with the 30 year mortgage…

Sponge Bob

CiaranC wrote:

Yeah, I was kinda factoring in that prices will grow a little and have to drop back a bit to todays prices. Anyway, whats 6 months between friends?

The bubble and the pop from the thread title is NOW Ciaran , anybody who believes its in 6 montsh is deluding themselves ...and the rest of us. By the time the backlog of surveys and stats is published for august / september it will be november or december.

But thats when its official and incontrovertible, its real already

Sizzler

K_user wrote:

To add to my above statement…

There is never a “good” time to get into the property market. There are always risks, there will always be problems, it will always be expensive. But a house, even a family home, is an investment. If you don’t have one, then its you that’s on the back foot, not the guy with the 30 year mortgage…

I disagree there. A 'good time' is different for each person, a good time for you might have been 5 yrs ago but a good time for me might be now for personal circumstances etc etc. The majority of people out there know what they can afford, assess their job stability, happy they want to live there, the property has what they want, are at a mature settling down age etc

So a good time for a buyer can be anytime

jobless

K_user wrote:

For those with no prospect of getting a house, it’s kind of a pipe dream that those that do will suffer and bring the prices down to a manageable level.

Pipe Dream?....have you not seen what happened in japan and it currently happening in the US and Sydney. I'm not saying they are going to come down but to suggest someone is dreaming if they think they can is wrong

K_user wrote:

Housing and land will always be expensive, no matter what the economic situation,

so it will always be expensive if the ecomonmic conditions are bad?.....huh?

K_user wrote:

If there is a crash, as with everything else in life, it will be those that took the highest risks that will suffer. Those that took the “safe” choice, for the most part, will be ok. Those that sat back and waited will still find themselves waiting…

So could you please tell all FTBs what the safest choice is when buying?, when the only option to most is a huge long term mortgage.....their is no safe choice for ftbs.......
and if there is a crash of course those who sat back are still going to sit back and wait.....why would you buy a depreciating asset?

K_user

Sizzler wrote:

I disagree there. A 'good time' is different for each person, a good time for you might have been 5 yrs ago but a good time for me might be now for personal circumstances etc etc. The majority of people out there know what they can afford, assess their job stability, happy they want to live there, the property has what they want, are at a mature settling down age etc

So a good time for a buyer can be anytime

That’s kinda what I meant…

I wasn’t taking about specific years, but individual circumstances. Whether a person bought a house in 1970, or will buy one in 2007, its a huge deal to that person at that time. Purchasing a house has been and will always be a risk, but to those that do it right they tend to be better off in the end.

K_user

jobless wrote:

Pipe Dream?....have you not seen what happened in japan and it currently happening in the US and Sydney. I'm not saying they are going to come down but to suggest someone is dreaming if they think they can is wrong

I didn't say that waiting for prices to drop was wrong. What I said was that waiting for a price crash to solve all your problems is wrong.

jobless wrote:

so it will always be expensive if the ecomonmic conditions are bad?.....huh?

Land is always expensive. If economic conditions are good then its at a premium, if they are bad then no one can afford to buy it. You will never get land at a knock-off price.

jobless wrote:

So could you please tell all FTBs what the safest choice is when buying?, when the only option to most is a huge long term mortgage.....their is no safe choice for ftbs.......

The safe choice is to go with what you can afford and don't pick the first thing that you see. Pick a location that you can tolerate, pick a price range and spend time, even years, looking for what you need. Don't spend 600,000 if you are on a 30K salary, don't buy a 1 bedroomed apartment over a chippy.

Mortgages tend to be huge, they tend to be long term. That doesn't change. It was the same for my parents and its the same for me. For all intensive purposes it should be the same for you.

There is no easy answer, there is no simple choice.

jobless wrote:

and if there is a crash of course those who sat back are still going to sit back and wait.....why would you buy a depreciating asset?

50 years ago my Grandmothers house, which is close to the city centre, wasn’t worth a whole lot. It would have been expensive to buy at the time, but nothing like what its worth now. If there is a crash its value will drop. But in 50 years time it will be worth a fortune again.

What has changed? The house? No. The site? No. Just the relative value compared on an economic scale, that you and I have no control over. In the end I’d rather spend 30 years paying off a house then spend 30 years complaining about the price of them…