Housing bubble starting to pop?

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...

mad m

Maybe Morningstar hit a hard landing instead of this so called soft one.

thejuggler

The long awaited Q3 Daft Report has been published at

http://www.daft.ie/report/DaftReport-Q32006.pdf

miju

hmm not quite as interesting as one would of thought, however, given that asking prices were initially tracked from Augustish the Q4 report will be the killer one IMHO

though it is all over radio this morning about this report indicating house price growth has completely stalled

sapper

But isn't the daft.ie survey based on asking price only? And doesn't this report therefore illustrate that vendors/estate agents are just being cautious in their AMVs/marketing prices rather than an indication that actual sale prices have stopped increasing?

miju

well you could argue that but if you've seen that monster thread over on AAM you'll see the 60 or so examples that show this is not the case as asking prices have been dropping over the last few months by as much as up to 30%

sure if you look at that daft report it actually shows a 16% price drop in south dublin

conor_mc

sapper wrote:

But isn't the daft.ie survey based on asking price only? And doesn't this report therefore illustrate that vendors/estate agents are just being cautious in their AMVs/marketing prices rather than an indication that actual sale prices have stopped increasing?

The thing is that asking prices are usually based on the achieved price of a similar property in the locality.

If asking prices have stalled, it can be inferred that achieved prices have also stalled. It is indicative, but it isn't proof-positive.

hmmm

For the past couple of years, actual prices you'd pay were always "asking price + x%". If asking prices are falling, you could reasonably infer that not only is "asking price +x%" not being met, neither is the asking price itself (i.e. a big change).

mad m

Recently we bid on a place which had an asking of €675...We bid €620 and to be told it was noted but it was a no go....Got a phone call from EA to say there was another bid in and it was €630 and how do we stand? And that the new offer would not be accepted either

The property is on market a good few weeks now.I told EA that we weren't going any further,she didnt seem surprised and then asked were we looking for a place in particular. I said well *yeah* and she said well I would advice you to wait till december, when you will be able to get sellers down to a level you want...Strange sort of remark I thought...

Just on a side note,what way will this new U-Value affect house prices,when does it come into affect?

whizzbang

Here is the difference between Q2 Daft Report snapshot and Q3. Red is prices going down, 1 - 5 is the number of bedrooms.



Lots of red there! I'd ignore the 5 bedrooms column as there are so few of them that go to market, but the others sure are itneresting.

D'Peoples Voice

These results make sense.
Think about it, they are asking prices not sale agreed prices. People will seek last month's price plus X % as hmmm said, and see how the market responds.

The FACT that the number of houses for sale on DAFT.ie is increasing by a factor of 2 over the past few months would point to houses not actually selling at their asking price.

Hence we have a standoff. However as we discussed earlier in the post, this will only last so long. Perhaps sellers are expecting to see some favourable changes in the budget and are unwilling to drop prices now, just in case. However, if the budget is neutral or negative, then you can expect people to offload their house at a cheaper price.

The key is to keep an eye on housing inventory and the length of time it takes to offload a house(it increased in all but 5 categories from Q2 to Q3). If both these factors continue to increase, house construction will seriously have to slow down and house flipping will cease to exist.
Of course, people holding off reducing prices to sell now will have to comtemplate the INCREASING number of Section 23 properties coming on the market each month. Yes that's right, it was in the mid to late nineties that there were launched.
Investors were told they could buy a house, write off the FULL rental income against the cost BEFORE paying ANY tax on their rental income, on the condition they hold the property for 10 years.
A lot of those properties are hitting and will continue to hit their 10 year anniversary over the next 2-3 years. As many of these were in less desirable areas, and seeing as they will be paying tax on the rental income, many landlords won't wish to hold onto them and soon they will be flooding the market. That's when the sh1t hits the fan.

Sponge Bob

mad m wrote:

what way will this new U-Value affect house prices,when does it come into affect?

How is it calculated ???? How much does the test cost ??? How many can conduct the test ???

eg if it costs €5k to do the survey could a lot of owners of 1960s single glazed and uninsulated iceboxes not flood the market before they have to do the test ????

mad m

Sponge Bob wrote:

How is it calculated ???? How much does the test cost ??? How many can conduct the test ???

eg if it costs €5k to do the survey could a lot of owners of 1960s single glazed and uninsulated iceboxes not flood the market before they have to do the test ????

Yeah thats what I should of said,there is alot of 1960's houses I have looked at in past,that are either rented or have been and are now on the market...

Do-more

Sponge Bob wrote:

How is it calculated ???? How much does the test cost ??? How many can conduct the test ???

eg if it costs €5k to do the survey could a lot of owners of 1960s single glazed and uninsulated iceboxes not flood the market before they have to do the test ????

The Energy Performance in Buildings Directive (building energy rating (BER))comes into force as follows:

• 1 January 2007 - BER of new dwellings;
• 1 July 2008 - BER of new buildings, other than dwellings;
• 1 January 2009 - BER of existing dwellings and other existing buildings, when offered for sale or rental.

For new buildings it will cost approx. €100 and is calculated off plans using a computer program.

Existing dwellings will have to be surveyed and the likely cost will be €300.

At present NO ONE can contuct the tests as Sustainable Energy Ireland have still not finalized the training programme!

There are exemptions for buildings that have received planning permission before June 2006 so don't expect to see many Energy labeled houses for sale before the middle of 2007.

More info can be found here

Sponge Bob

new houses, right.

what sanction happens if the attic is not insulated properly so the calculated test off plans is <ahem> misleading at best. eg builder put 100mm of insulation instead of 200mm and nothing out in the soffit and fascia and it happens with the sleevens we have building.

without sanctions the whole thing is gobble IMO

Do-more

Sponge Bob wrote:

new houses, right.

what sanction happens if the attic is not insulated properly so the calculated test off plans is <ahem> misleading at best. eg builder put 100mm of insulation instead of 200mm and nothing out in the soffit and fascia and it happens with the sleevens we have building.

without sanctions the whole thing is gobble IMO

Certifying off plans is certainly open to abuse, but as far as I know there will be "spot checks". How effective they will be remains to be seen, however at least the labelling system will be a giant leap forward from what controls we have at present!

As I see it any developer who is committed to building next year will have to have the best label possible on his houses, in a falling, over supplied market they will have to have the best available product on the market or else suffer the consequences.

I have done a little work in the area and the increased cost of insulating and heating systems to attain a good label is about €10K for a semi, but SEI will grant aid a developer by €8K a unit for the first 50 units in a development, so the real cost is tiny.

The real shakeup will happen in 2 years time when secondhand houses will have to be labelled, it just can't happen soon enough for the retro-fit insulation boys, they will be out the door with work! Many badly built older houses will become virtually unsaleable and many owners of houses built in the last 10 years will be shocked at how badly built there houses are.