Housing bubble starting to pop?

D'Peoples Voice

I assume the DAFT survey for Q3 is out soon,
given that in May they released the Q1 figs (Jan - Mar), in August the Q2 figs (Apr - Jun) so it would follow that in Nov we get the Q3 figs (Jul - Sep).

What are people's predictions for the rate of annual house price growth?
In the Q2 survey annual house price growth had slowed from 14% in April to 6.2% in July.
My prediction is close to 1% in September!:o

shoegirl

miju wrote:

what i was getting at is that high unemployment in another country does not equate to people coming here to work (theres other countries that they can go to besides ireland)

on the other foot high unemployment here does not equate to everyone emigrating , though if that was the case then supply would increase further (and before anyone asks i'm aware unemployment in ireland is low)

Good point but I do think that reasons for migration don't only include poor economics, but languages spoken, the existence of large existing expat communities, difficulty of getting jobs as a foreigner etc.

The reason Ireland still has any level of unemployment is nothing to do with immigration and/or jobs as its remained practically static since around 1999 despite large levels of migration to Ireland (and since a large proportion of migrant workers only stay for less than 2 years means that they are never going to be entitled to welfare, never mind attempting to claim it). From anecdotal evidence I see that the main 3 reasons for choosing the dole over a job is one of the following:
a) lack of employability - usually due to lack of qualiications, experience or both. sometimes also down to poor skills, poor personal presentation, substance abuse problems or simply poor job seeking skills.
b) dependency on private rented accomodation - which means that the replacement income required (especially for anybody with dependents) would need to replace not only their cash income but high levels of rent supplement levels
and finally
c) a perception (which is often incorrect and shortsighted, though not always) that the welfare recipient is "better off" on the dole

You also have to remember that huge numbers who would have been traditionally on the "dole" have been moved onto the following payments:
a) lone parent payments - 80,000 families
b) sickness and illness benefits - not sure what the figures are - huge increases in "depression" illnesses seems to be a common one now that "bad backs" are being clamped down on
c) SWA - supplementary welfare allowance - or "loafers allowance" as you basically get this if you've no income - regardless of the reason

I would suspect that if entitlement rules changed it could add 4-6% back onto the dole queues.

D'Peoples Voice

Right Lads,
A few of us here are running a sweep as to where estate agents will concentrate their focus on next!
When the market is doing poor, certain property commentators single out particular areas of the market and talk about how well it's doing and pretend the rest of the market does not exist.
For example, the year before last when things weren't going too GREAT in the property market ON AVERAGE, they singled out 3 & 4 bed houses and talked about the high growth rates in their prioces. They completely forgot to include any mention of appartments in those bulletins. Then of course when the market was soaring ,they began talking about all types of houses again.

Where do you think they will zone in on?
4-bed houses in Malahide!

whizzbang

D'Peoples Voice wrote:

Right Lads,
A few of us here are running a sweep as to where estate agents will concentrate their focus on next!
When the market is doing poor, certain property commentators single out particular areas of the market and talk about how well it's doing and pretend the rest of the market does not exist.
For example, the year before last when things weren't going too GREAT in the property market ON AVERAGE, they singled out 3 & 4 bed houses and talked about the high growth rates in their prioces. They completely forgot to include any mention of appartments in those bulletins. Then of course when the market was soaring ,they began talking about all types of houses again.

Where do you think they will zone in on?
4-bed houses in Malahide!

not to forget that they will also start selling up shop!



from askaboutmoney.com http://www.askaboutmoney.com/showpost.php?p=310032&postcount=7901

dochasach

A leaflet from a major multinational estate agency arrived in the doorway of our county Dublin home. The leaflet had a photo of balloons landing and the text:

"We understand 'soft landings'. It's at times like these that we come into our own."

Is the writing on the wall?
Is the fat lady singing?
Is the end near?

dochasach

D'Peoples Voice wrote:

Right Lads,
A few of us here are running a sweep as to where estate agents will concentrate their focus on next!...
4-bed houses in Malahide!

Well, those estate agents who haven't accepted at the very least a soft landing (see above) will focus on foreign property. We helped spread our property insanity through Spain, Hungary, the Czech republic, Bulgaria, Romania and Turkey. They will focus on Germany, after almost a decade of real deflation, there might be some room for growth.

I can't think of any segment of the Irish market that will perform as well as past trends. One beds and far-flung commuter homes are flaming out. The sellup shuffle is playing out. Anyone stuck when the music stops will take out top-ups and fix up what they have. Georgian brick and luxury homes are like a mars mission, exciting but unattainable for normal people. Commercial property has been dead for years (Bewley's in central Dublin is still empty and Ballsbridge is a sea of "to let" signs.) but bidders don't let that slow them down. Anyone buying to let now is insane.

well they locked the thread over on ask about money.com

I got banned twice!! hehehe free speech and the internet and all that JazZ

People must be giving out about the exposure the website is putting on their properties. A sign of an unhealthy market? Wrong or right?

It should have been a sticky not locked



http://www.thepropertypin.com/forum/index.php

Blackjack

do you have a link to the Askaboutmoney thread that you could perhaps PM me if you are not willing to link it here?.

Afuera

Blackjack wrote:

do you have a link to the Askaboutmoney thread that you could perhaps PM me if you are not willing to link it here?.

Here's a link to the famous thread here:
http://www.askaboutmoney.com/showthread.php?t=31710

Be warned that there are over 8000 posts on it as it spans from last July. I think that the moderators have locked it due to instances of falling prices being recorded on it and they are currently reviewing their policies to this.

well they have been rountinely deleting posts whether or not they mention price drops
and banning people alot its happened rather suddenly and I may add that lately they have begun to accept donations read this:
http://www.askaboutmoney.com/announcement.php?f=13&a=28

how about that!!
I dunno is it coincidence? or something far more sinister ? perhaps the crash is starting to put fear into people...... its far too late to close a thread such as that

enough fear to make you.... could you say the word bribe???
especially since the ask about money Annual General Meeting was recently

whizzbang

My take on it is that they don't want to be sued by someone whose house was blacklisted as "price dropping". Not a million miles away from the ban on talking about individual shares.

Hopefully it will reopen at some stage.

Afuera

whizzbang wrote:

My take on it is that they don't want to be sued by someone whose house was blacklisted as "price dropping". Not a million miles away from the ban on talking about individual shares.

Yes, this is what I was thinking too. It's understandable to some extent; it's not only the individual trying to sell the house that could take action but possibly the EAs as well.

blindjustice has a point though when he mentioned the fear they may have. This same fear certainly didn't exist when the thread started back in July. Sentiment surely has changed if the moderators feel they could be liable for peoples losses (the fact that people are even considering that there may be losses in the market is a huge difference from last year).

whizzbang wrote:

Hopefully it will reopen at some stage.

It looks like a similar thread may have already opened to discuss the property market on AAM.
http://www.askaboutmoney.com/showthread.php?t=40722

Not too sure if the moderators will let this one continue like the last one though. I'd expect that discussion of individual properties will be a no-no anyway which will limit it to discussion of some of the upcoming reports (Daft, ESRI, etc.) as well as any anecdotal evidence or opinions people care to put forward.

Calina

While I've some some sympathy for AAM the point is, if the two prices for a given property were in the public domain - which, the web, in fact is, there isn't much anyone owning the house can do with it other than admit they wanted to conceal the fact that no one actually wanted to buy said property at the original price.

Sponge Bob

I'd say the IFSRA has ' something ' to do with this .

Note the following .

a) IFSRA regulates the banks. When the fall in house prices becomes severe in the mid-late spring of 2007 then the IFSRA will be very busy .

b) The IFSRA have a consumer panel, chaired by the bloke who owns AAM .

c) As he accepted the chair of their consumer panel he now has a Fiduciary Duty to the IFSRA so if he ever finds out they are concerned about property drops he must act accordingly as long as he is in the chair . Once he gets the slightest little hint of concern from within the IFSRA his fiduciary duty kicks in.

A fiduciary duty is the highest standard of care imposed at either equity or law. A fiduciary is expected to be extremely loyal to the person they owe the duty (the "principal"): they must not put their personal interests before the duty , and must not profit from their position as a fiduciary, unless the principal consents. The fiduciary relationship is highlighted by good faith, loyalty and trust,

Its a hard one . If you expect open and free discussion on AAM about any matter of genuine concern to the IFSRA....such as the solvency of the banking system if the property market tanks....then you are simply looking in the wrong place in my opinion .

miju

Calina wrote:

While I've some some sympathy for AAM the point is, if the two prices for a given property were in the public domain - which, the web, in fact is, there isn't much anyone owning the house can do with it other than admit they wanted to conceal the fact that no one actually wanted to buy said property at the original price.

exactly, Calina it's nothing can really be done to AAM as the information is widley available in the public domain for anyone wishing to find it but then again given:

Sponge Bob wrote:

I'd say the IFSRA has ' something ' to do with this .

Note the following .

it seems like the might simply be running scared , wasn't this "explosive" daft report supposed to be released yesterday?

hmmm

I don't see a legal question, the price drops are a matter of fact. If you said "this house price has dropped because the thieving owner used it as a crackhouse", that'd be a problem of course.

I think it's just over zealous moderation (I'm trying to be nice).

Afuera

miju wrote:

it seems like the might simply be running scared , wasn't this "explosive" daft report supposed to be released yesterday?

I think it's to be expected next Thursday/Friday.

What makes you think it's going to be "explosive"? I thought the last one was quite revealing, as it was to first report to catch statistics pointing to a slowdown, yet many people were quick to dismiss it saying "Ah, sure asking prices don't mean anything!".

miju

Afuera wrote:

I thought the last one was quite revealing, as it was to first report to catch statistics pointing to a slowdown,

while the last report pointed to a slowdown , apparently this report will show / prove the slowdown and it not being "soft" either but a very significant one which makes it quite explosive IMO and pretty much could blow the whole "soft landing" theory completely out of the water which in turn once it's filtered through could potentially / probably instill a genuinely real (rather than anecdotla) fear / panic in the market even more than now

http://www.askaboutmoney.com/showthread.php?p=310535#post310535


read this for the crack and tell me are they "compromised" or not!
FEAR ITHINK IS A DRIVING FORCE NOW

Afuera

miju wrote:

while the last report pointed to a slowdown , apparently this report will show / prove the slowdown and it not being "soft" either but a very significant one which makes it quite explosive IMO and pretty much could blow the whole "soft landing" theory completely out of the water which in turn once it's filtered through could potentially / probably instill a genuinely real (rather than anecdotla) fear / panic in the market even more than now

I'm looking forward to reading this quarters report then so.

I still think that a lot of people will dismiss it though because it is only asking prices. It'll probably take another few months for these figures to filter into other reports such as the ESRI before the sharp correction will be undeniable. I'd guess that that would be when it would gain a momentum all of its own.

miju

Afuera wrote:

It'll probably take another few months for these figures to filter into other reports such as the ESRI before the sharp correction will be undeniable. I'd guess that that would be when it would gain a momentum all of its own.

aye thats what i was saying , i presume the housing market sales figures traditionally die a death at this time of year and pick up late january again (open to correction) which is more than ample time for that report to filter through the general public and be fully absorbed

Sponge Bob

Inventory is certainly building up on Daft , there are 10,000 homes more for sale today than there were 4 months ago. Therefore nobody can say that its not representative in any way, except for mctavish probably who will have a giggleen as he does with his giggly office buddies .

Daft have 25% of a great years building for sale there today , stats here

They have 50% of a normal years building and more than a whole years building in the 1980s. Thats a lot of inventory for sale and more coming up every day. When I first saw this graph my reaction was......WHERE is the SEASON in this. ????

D'Peoples Voice

2004
http://www.ireland.com/newspaper/special/2004/propertyreport/appendix1.pdf

It may be concluded from this discussion that tax and other financial inducements intended to ...... assist purchasers with the acquisition of property, including houses, find their way into higher development land values.
Hence, high development land values are an unintended result of government action in housing and other markets.
The IAVI would urge the government to exercise extreme caution, as the history of public intervention in the property market is a vexed issue ......., while well intentioned, have failed to demonstrate a proper understanding of the dynamics that drive property markets.

Mid 2006
http://www.iibbank.ie/economic/briefings/Irish%20Housing%20Market%20Outlook%2004.09.06.pdf

We think the key risk to the Irish property market in the next year comes from the possibility of ill-judged, albeit well intentioned, government policy. The record of government intervention in the Irish housing market in the past ten years is not particularly encouraging. Previous initiatives have added to uncertainty and created considerable shortterm volatility in the market. There is a risk that fears of draconian measures could cause considerable problems for the property market in the run up to the budget in December.

Late 2006
http://www.breakingnews.ie/archives/story.asp?j=176928262&p=y769z8885&n=176928950&archive=06/11/2006

The Institute of Professional Auctioneers and Valuers (IPAV) has today urged Minister for Finance Brian Cowen to change his mind about reforming the stamp-duty regime.
The IPAV is calling for stamp duty to be abolished entirely for all first-time buyers in order to help them get a foot on the property ladder.
It is also seeking a doubling in the amount of mortgage interest relief for first-time buyers.

IPAV forgot to mention the SSIAs. We have been hearing for years how first time buyers would use their SSIA accounts to splash out on new houses, suddenly IPAV are simply ignoring the SSIA effect:) Nor did they mention a solution as allowing housing estates be built for FTBs only, why, because it won't have a POSITIVE effect on the price of existing houses like reducing stamp duty would.

gurramok

miju wrote:

exactly, Calina it's nothing can really be done to AAM as the information is widley available in the public domain for anyone wishing to find it

Like moi

As i'm resposnsible for 40 of those publicised drops, i will continue to post them on http://irishhousepricesfalling.blogspot.com/

Wonder what boards position would be on all this if someone posted up house price drops ?

D'Peoples Voice

gurramok wrote:

Wonder what boards position would be on all this if someone posted up house price drops ?

While I think it is important to keep up to date with anedoctal evidence of actual house price drops, I personally would rather if you keep the website highlighted in your signature rather than turn the thread into a list of house prices. Perhaps keep us update with the length of time it's taking some houses to sell!
that's just my two cent worth!
By the way, is there any truth in the rumours that people were queuing for DAYS recently to buy units in last phase of Bloomfield Avenue in Donnybrook?
http://www.ireland.com/newspaper/property/2004/1111/1099561049502_1100112183421.html
I was told of people sleeping on the streets overnight to get one of these places. Please tell me that's not true in today's market!

gurramok

Hmm, that link is from 2004 plus this link is as well http://www.edwardholdings.com/press/15/ looks to me they were sold(80%+) off the plans on their launch date in '04 and are now finally the last of them been built in 'late '06'

Can you honestly see well heeled people sleeping rough to obtain units in 'Millionaire Square' priced from €750,000 - €4m?

EDIT: Ok they have DEFINITELY been sold from plans in '04

http://www.ireland.com/newspaper/property/2005/0519/2611543532RPBLOOMFIELD.html

'Across the avenue, work has begun on the exclusive Edward Square development where houses and apartments sold out quickly from plans last December.'

http://www.finfacts.com/irelandbusinessnews/publish/article_10007932.shtml


Check that out - remember when people denied that there was even a bubble

miju

Deleted User wrote:

Check that out - remember when people denied that there was even a bubble

lol , i remember one particular argument not so long ago of it's not a bubble until it pops and once it pops it's no longer a bubble which means it was never a bubble in the first place

whizzbang

miju wrote:

lol , i remember one particular argument not so long ago of it's not a bubble until it pops and once it pops it's no longer a bubble which means it was never a bubble in the first place

what ever happened to MorningStar/FillSpectre? ahh memories of circular arguments past...