Housing bubble starting to pop?

mad m

ronbyrne2005 wrote:

no im saying sell and stick the money from the house you live in now in the bank. then rent a larger house for two years, save as well and build up the balance in the bank.

Oh right sorry for mix up. I heard a horror story from a mate,that he knew someone who did this and they ended up being priced out of the market altogether and at the end they couldnt even afford a house where they used to live in.

ronbyrne2005

mad m wrote:

Oh right sorry for mix up. I heard a horror story from a mate,that he knew someone who did this and they ended up being priced out of the market altogether and at the end they couldnt even afford a house where they used to live in.

thats highly unlikely to happen in the current market but there is a small risk but i think theres a bigger risk in taking on 300k in debt now.

Shane™

mad m wrote:

Well Im going through a stage now,should I or shouldnt I? My house(Terraced) is sale agreed with a very low mortage(Gutted house when we got it,done the usual) But the kids are getting older and my sons room seems to be shrinking.

The house we are after will bring our mortage up to €300,000. I have two people in my head now at moment with all this about the burst coming or already has begun,saying am I mad to move or it will be all worth in years down the road. The house we are bidding on is huge compared to ours and it seems we might get it at this stage but has gone over its asking by €35,000 with us in a bidding war with another buyer.

We would never have negitive equity as Im constantly being told by the wife if the market goes belly up.

Ah I dont know,am I mad or what!!!!

I can't see how a price crash could make much differance to yourself, if you sell before a crash you have make up the differance, same if you sell after a crash.

I think house prices will drop, I'm guessing as much as %50, but I'm not sure and if I had a house I would not take a chance renting for a year - this would be mad.

BTW you might not get sale agreed during a down turn, so now may be a good time to trade up.

hmmm

faceman wrote:

The other reason that i feel there is no crash on the cards is this year's budget. With the bertie scandal and election next year, FF need to keep the voters onside. I expect that they will avoid dis-incentivising investors

While you've been away have you bothered reading what the government have been saying about investors and speculators? They're manouvering them into position for a good kicking in the budget. A sliding scale of CGT would be a nice way to do it e.g. 50% CGT if sold within a year, decreasing to 20% if sold over 20 years.

So far I still haven't heard a single bull argument that didn't boil down to "arrah things will be alright"

Pa ElGrande

Only seven of the 43 houses auctioned yesterday sold either under the hammer or immediately afterwards - an abysmal result that will force estate agents and vendors to reassess prices. Altogether, it's been a washout week in the auction rooms with over 70 per cent of properties failing to sell.
<snip>
Some agents are blaming the failure to sell at auction on a greedy vendor syndrome
<snip>
The view from other agents is that this is a blip, rather than a collapse of the housing market.

more...

70% unsold in washout week for auctions
http://www.ireland.com/newspaper/property/2006/0928/1158591129810.html

Last weeks calmer market has now become a "blip", how long does it take to become a trend, this has been ongoing since the summer.

Have independent newspapers called it right?

House price boom shudders to a halt Evening Herald, Sept 26, 2006
Dublin property prices falling by up to 20 per cent Sunday Independent, Sept 24, 2006
Interest rate hikes put the brakes on house spree Irish Independent, Sept 07, 2006
Property boom 'is over' Irish Independent, August 29, 2006

Pa ElGrande

hmmm wrote:

While you've been away have you bothered reading what the government have been saying about investors and speculators? They're manouvering them into position for a good kicking in the budget. A sliding scale of CGT would be a nice way to do it e.g. 50% CGT if sold within a year, decreasing to 20% if sold over 20 years.

So far I still haven't heard a single bull argument that didn't boil down to "arrah things will be alright"

Noel Ahern and Michael McDowell may have unintentionally combined to magnify the downturn, one by hinting they would hit the speculators in the budget, causing some of them to rush to offload their property and property flippers to pause (even more supply on the market) and McDowells announcement about eliminating stamp duty has made the first time buyers pause until spring (reducing sellers) this is having a knock on effect breaking 'chains' necessary for existing home owners to trade up.

D'Peoples Voice

Mad M wrote:

The house we are after will bring our mortage up to €300,000. I have two people in my head now at moment with all this about the burst coming or already has begun,saying am I mad to move or it will be all worth in years down the road. The house we are bidding on is huge compared to ours and it seems we might get it at this stage but has gone over its asking by €35,000 with us in a bidding war with another buyer.

I would wait until after the election, remember that the Labour party have been talking about hurting these property speculators who pay little tax on their investment properties because of reliefs, putting caps on the price of development land, and if they don't do this after they get into power they will be seen as been hypocritical. So if Labour get in, you can guess goodbye to any soft landing, there would be a mass exodus.

Faceman wrote:

Note to my fellow debaters, in any of my posts I do not reflect high value properties. My comments reflect properties in the €1 (lol) to €650k brackett.

the problem with a fall off in prices in any sector is that all sectors are highly correlated. For example assume a house in D6 was selling for EUR 1,350,000 and one in D16 was selling for EUR 1,000,000. Now if you are a person trading up, who can only afford EUR 1,000,000, it's a no brainer which one you will go for(ignoring avail schools,transport etc). However if the house in D16 falls in value to EUR 1,000,000, the the person will go for that property. The person in D16 will now have to reduce the selling price of their property to get buyers, however this in turn will have a knock-on effect on house selling for EUR 900,000 in D6W. This trend will continue until all houses reduce.
The problem in Dublin is that we are experiencing demand falling off at BOTH ends of the market. This is not good because it will accelerate the reduction in house prices, because people at the bottom end will have to reduce to find buyers, this in turn causes a reduction in demand for houses in the middle price sector.
Having said that I agree with your point about increasing tax relief for first time buyers (and apply it to current first time buyers also), especially after reading this

First-time buyer couples in Dublin are spending up to 37pc of their joint disposable income on mortgage repayments, monthly EBS/DKM Affordability Index, published by Irish Property Buyer magazine today

http://www.businessworld.ie/livenews.htm?a=1526579
By increasing/indexing first time buyer tax relief they are in fact reversing the effect of higher interest rates, fantastic vote winner in my opinion, and we know how big a percentage these people account for of the voting population.

Sponge Bob

D'Peoples Voice wrote:

By increasing/indexing first time buyer tax relief they are in fact reversing the effect of higher interest rates, fantastic vote winner in my opinion, and we know how big a percentage these people account for of the voting population.

Wrong correlation at the end my friend!

The people who vote are not the self centred 25-35 year old FTB demographic. They are too busy golfing and commuting or both .

The people who vote in large numbers are their PARENTS in the 55-75 age group.

If you want to GET votes you bring in tax relief/incentives for these parents who HELP these celtic rateens get on the ladder. EG widen gift threshholds if the gift is to or for an FTB and maybe throw in tax relief for the parent too.

You can give the rateens another 5k and they will simply max out their credit cards some more. Its bloody pointless giving these ingrates anything from the state. Do it indirectly I say.

redspider

There is still support in the market, but I see many houses on the market now, even ones that have been bought in recent years (<5) and which are on the market again. There is a situation where people are trying to call the top of the market. That is a dangerous position. There are now so many houses at 1m level it is incredible. I am not taking about mansions. These are 3/4/5 bed family homes semi-detached.

One example I know the people personally. They are selling the family home, cashing in, and the folks are moving into a cheaper apartment, which is closer to shops public transport etc. The family home is on the market for approx 1.3m (AMV). They are getting 1.5m for it. So clearly there is support in the market for these ridiculous prices. The family realise they are sitting on a goldmind, selling out at a good price, and probably get an apt for the parents for 400k, which has better facilities, obviously smaller, etc, but ground floor, front-door access, etc.

To build the same bricks and mortar say in the 'wilds' of Mayo, would cost approx 150k. 200k tops, and that would be to a much better spec. There is no doubt whatsoever that there is a huge property/land bubble where values are way beyond what they are worth.

The market is dumb, and like lemmings that are heading for the cliff, it doesn't have sense, but whether we are heading for a cliff or a nice gentle decline, who knows. All I know is that at this moment in time, things are absolutely crazy out there.

Retirees, sell your homes and cash in on your nest.

Redspider

ionapaul

Wow, sentiment has really changed over the past month! Many people (not just the Indo and those good people on AAM) have called the beginning of the crash. Asking prices dropping across Dublin. No interest shown in September auctions. Are the people on the street starting to feel the inevitable has begun?

finnpark

How far will they drop is the question and how high will interest rates rise?

I mean , will they go back to 2000 prices or even lower?

Also, when the house price collapse occurs that will obviously mean huge unemployment in the country as 15% of people in this country are employed in that industry. Where will these go. Plasters, tilers, plumbers etc with no work. Surely they will go abroad leading to a further decrease in prices. The drop in house prices could be unreal

Sponge Bob

The athlone rental market has collapsed.

Look at this investor dump his 3 houses and others dump all the rest of Willow Park it seems

1 2 3

These long term investors will still make a good profit because they bought in years ago. But there is a glut for sale in Athlone , especially in the Willow Park area.

shaptakster

daveirl wrote:

This post has been deleted.

Thats cool.
Thanks.
Kind of tells the story of this thread really when you go to that link

Its nothing more than a few people preaching really.

Bring on the crash though. I've been waiting for it for years.

Pa ElGrande

OK last post on this thread from me.
There is not much more to add, since the downward turn has begun, I expect this to take at least 5 years to unwind.

Rumour has it though that we may be getting a snap election.

http://www.politics.ie/viewtopic.php?t=14221

Idleater

Pa ElGrande wrote:

OK last post on this thread from me... since the downward turn has begun...

You are hopefully not going to stick your head in the ground now are you?

Not that we will ever know because you won't post a reply, but hey.

Wish you all the best, and hopefully we will all be on speaking terms when you return in 5 years.

Unless of course you have made your riches elsewhere and are above the mortal fools that were too consumed by their own greed and lack of foresight to believe a man on the internet...

L.

miju

Pa ElGrande wrote:

OK last post on this thread from me.
There is not much more to add, since the downward turn has begun, I expect this to take at least 5 years to unwind.

aye, the wheels have now begun to slowly turn in reverse and will only gather speed as time goes by ,

kick back , feet up and grab the popcorn i say

shaptakster

Sponge Bob wrote:

The athlone rental market has collapsed.

Look at this investor dump his 3 houses and others dump all the rest of Willow Park it seems

1 2 3

These long term investors will still make a good profit because they bought in years ago. But there is a glut for sale in Athlone , especially in the Willow Park area.

I wish that was a sign of investors dumping property but

Hardly prime real estate there. I lived very near Willow Park a few years ago.
That would be possibly the worst investor in history who bought house in Willow Park.
Think Moy Ross without the guns, but with the heroin and scumbags and you get the picture.
If i got those all of those houses for €10k i wouldnt buy them.


You're obsessed.
You must have been waiting and searching for months to find those. Can you not find links to 3 houses beside each other that people might want to buy.

Come on admit it. You put those adds up yourself too

Sponge Bob

shaptakster wrote:

Come on admit it. You put those adds up yourself too

LOL

No. I fully expected that rental areas would be among the first to show signs of crashing and the willow park example in Athlone is what I meant. There are many long term investors dumping there, yer man with 3 houses and others with 2 houses on the market if you follow the last link , talk about a herd :eek: .

Much of Athlone is not strictly 'des res' by your logic....not just Willow Park but Willow Park is full of investors unlike much of Athlone. They are the ones who will try to lock in their gains by selling , not the FTB type, and they are the ones who will tank the market. Once those houses drop to €80k instead of €180k the council will start to buy them for social housing instead of building. It remains to be seen what floor level the council will start to support but I would expect it to be under €100k.

Once the investors realise that there is no rental market worth having and no more capital appreciation you will see lots more of this dumping going on. There are too many houses and flats in Ireland .

Period.

daveirl

This post has been deleted.

HashSlinging

made a few phone calls this week as im still looking for a house, very very intersting times. I've had two estate agents drop prices on two houses im interested in, one dropped the price from 425k to 381k and the other dropped ..... wait for it...... wait.... for..... it...... from 470k to 381k.... unreal

SimpleSam06

miju wrote:

aye, the wheels have now begun to slowly turn in reverse and will only gather speed as time goes by ,

kick back , feet up and grab the popcorn i say

Yeah, looks like its that time of day alright. It might be worth popping up the odd milestone thread here and there, though, for the dead cat bounces. Or maybe a "how to get your ass out of property in a hurry and into something else" thread?

SimpleSam06

finnpark wrote:

Where will these go. Plasters, tilers, plumbers etc with no work. Surely they will go abroad leading to a further decrease in prices.

London Olympics 2012 is a good start if you'll be looking for construction work...

Sponge Bob

HashSlinging wrote:

one dropped the price from 425k to 381k and the other dropped from 470k to 381k.... unreal

€386k+ is a key stamp duty band for trader uppers where the duty goes from 6% to 7.5% (or thereabouts) .

Where did that 25% drop in what is a mid band property anywhere except Dublin occur. N E S or W will do ??? . The property pros have admitted that high end €2m houses in S Dublin are not shifting but a drop like this in th e trader upper band is MOST noteworthy if replicated nationwide.

(why do I suspect its the midlands ?)

faceman

whoa whoa whoa my fellow debaters!! Whats this rubbish talk of the crash is here?? We're just getting warmed up.

Read the media and its says the house price growth is slowing - not dropping!! A crash doesnt happen unless properties are running into negative equity!

Re auctions, interesting comment in the indo today.

http://www.unison.ie/irish_independent/stories.php3?ca=9&si=1697796&issue_id=14713

note the property in blackrock that was withdrawn from auction cos it wouldnt sell but then sold privately for excess the AMV!! Hmm that doesnt make sense does it?

Also note the bandwagon inaccuracies in the papers today. The indo claims that mortgage repayments have gone up €260 on average yet herald am (or cud have been metro) claim €400. So which is it??

Although the market is definitely slowing its not hitting a major reverse yet which is necessary for a crash.

so come on, keep the debating going!

Id be interested to see proof of those massive property asking price drops mentioned above by Hashslinging. What areas and what estate agents? I would like to ring them.

If its being done to generate interest as opposed to reflecting the property value then thats illegal.

D'Peoples Voice

faceman wrote:

Read the media and its says the house price growth is slowing - not dropping!! A crash doesnt happen unless properties are running into negative equity!

If you are talking about the ESRI/PTSB property survey for August recently today Friday Sept 29th, not only it is a month old, but if I remember correctly, it's always behind the market because it is looking at loans being drawn down at the time the survey is being undertaken.
Please correct me if I'm wrong, but as I understood it, someone buys a house, it takes another few weeks for the deal to go through, then they draw down on the mortgage, when they are signing the deeds. Ptsb then record the price paid for the house on that date and that figure goes into the survey for THAT month. It ignores the fact that the person bid for the house a few weeks prior.
So if asking prices are falling NOW, then by my estimation, assuming they get the deeds signed within 6 weeks, it will only really affect November's figures and thereafter.

finnpark

HashSlinging wrote:

made a few phone calls this week as im still looking for a house, very very intersting times. I've had two estate agents drop prices on two houses im interested in, one dropped the price from 425k to 381k and the other dropped ..... wait for it...... wait.... for..... it...... from 470k to 381k.... unreal

:eek:

That is truly shocking if its true. That would suggest the crash has begun much sooner than expected.

SimpleSam06

faceman wrote:

so come on, keep the debating going!

At this stage its not so much debating, as a running commentary. Pa reckons five years before prices hit rock bottom, I'd reckon its closer to two, but there just isn't much else to debate. Housing bubble starting to pop? Housing bubble popping.

mad m

faceman wrote:

so come on, keep the debating going!

Id be interested to see proof of those massive property asking price drops mentioned above by Hashslinging. What areas and what estate agents? I would like to ring them.

Well I dont know about Hashslinging area but as I said up a few posts myself and wife are trading up to a bigger house and its now over €35k asking price for a house we want plus they want more which we dont have!!!! Im not bidding against myself:rolleyes:

faceman

mad m wrote:

Well I dont know about Hashslinging area but as I said up a few posts myself and wife are trading up to a bigger house and its now over €35k asking price for a house we want plus they want more which we dont have!!!! Im not bidding against myself:rolleyes:

So do you believe we have a crash on our hands?

mad m

Well to be totally honest I have seen prices on some houses come down to attract attention,hmm a crash I would say No but slow down definitely. But this depends on how much rates will rise in coming months plus there is a slow down in buying houses after october.