Housing bubble starting to pop?

kluivert

How people can vote for a government next year mind boggling. Who do they vote for.

You have FF/PD's filling their own pockets.
FG who havent got the balls to oppose them.
Lab's just sitting in there.

Housing like every other problem in this country is being brushed aside to let the people look after.

Housing in Carrickmacross is going to be greater demand supply.

There is currently a development where there is about 20 houses up and only has taken three deposits.

aphex™

Can't find any comments/apologies by the IAVI anywhere today. What a shower.

lomb

the EA acts for the vendor is paid by the vendor and not for the buyer.
therefore it follows dont believe a word they say if you are buying.
finanlly sellers are no less guilty in any of this, they are greedy and want to ring the last euro out of the value.
i dont blame estate agents at all they are just feeding off the buyers not wanting to pay more and the sellers who want more.
the property game is a dirty game thats the bottom line.

SimpleSam06

Calina wrote:

I bet finding the piece of legislation where it explicitly states that:

it is not permitted to inform a potential buyer of a property that another higher bid has been entered for the property by a third party when no such bid exists.

would be difficult. Sure it's a lie but it won't get them into jail.

Actually exactly that legislation is coming into place soon, expressly forbidding misrepresentations of price or exaggerated claims, such as we saw on Prime Time. Its legal to do so for the moment, but it won't be this time next year. I can't recall off the top of my head the name of the legislation in question, however.

Anyway just to give you an idea of the feedback the Prime Time episode is getting from people, my mother, who I would say is fairly indicative of "normal" opinions, said yes, she was shocked, but none of the big auctioneers would do it, for example, *big name auctioneer who sold her the house*.

:rolleyes:

It will take a lot more than one Prime Time program to unravel the mass of corruption in the building and housing trade. Theres so much of it, however, that it won't be hard for any investigative reporter to uncover it. I would bet you right now that every estate agent in the country is saying, hard luck lads, and going merrily on about their business the same as yesterday.

Akrasia

kluivert wrote:

Very sorry I missed that Prime Time show last night.

Did it inlcuded EA's from Dundalk or something.

Can someone give a quick review of what happened in the show please.

You can watch it on-line here http://www.rte.ie/news/2006/1211/primetime.html

It's worth a look.

A bit pathetic that they completely overlooked the elephant in the sitting room that is the property market bubble (but hey, RTE makes loads of advertising revenue from property websites and the politicos need to maintain an illusion of a viable economy till the next election)

ANY TAX PAYERS OUT THERE,

TAKE A LOOK AT THIS IN FERNS CO WEXFORD:

AND THIS

as pointed out over on the propertypin.com it should read let the tax PAYER help pay for your investment........

how do ye taxpayers feel about this?

SimpleSam06

Deleted User wrote:

as pointed out over on the propertypin.com it should read let the tax PAYER help pay for your investment........

how do ye taxpayers feel about this?

Well its not like its a shocking revelation or anything, its in bad taste maybe, a bit crass, but honestly it might have been put there just to stir up controversy. Who took the photo, or who put it there, is there a phone number on the back?

I took the photo and no its hardly a revelation but no harm to let people know what is being done with their tax money - its like prime time we all knew what estate agents were at but for it to be highlight like that always strikes a chord in people.

I didnt check the back for phone numbers - I dont think there are any numbers on it either but the development is a mile away at most in the town the signs are up entering the village of ferns on the N11 (signs on both noth and south of Ferns)

pjbrady1

It would be interesting to see the figures for total tax subsidisation and tax avoidance using property schemes. I am not saying tax evasion, but the various legal ways of avoiding tax using property schemes. Combine this with the vast sums spent on Peat/Coal/Gas powered electricity burning stations.
It would all add up to a significant sum of money capable of creating a present day scenario where our industry and residential electricity could be far cheaper based on large scale Wind/Solar and (medium-sized/micro) scale subsidised wind/solar solutions for countries energy needs.

When it is economically viable to construct a 300 million euro gas powered station in Cork (in a country with some of the dearest land/material/labour costs) then it is a sure sign the final sellers margins are effortless.

It's going to be an interesting 2007.

P.J.

D'Peoples Voice

Lads,
Not sure if you saw an animated FG Senater Brian Hayes on TV after the budget speech,
the guy was fuming whilst reading out his speech in the Senate,
He was giving out because the PDs caused property prices to stagnate since september.

Clearly he must have a lot of friends involved in investment properties.

The Tánaiste, the most unpopular party leader, is the big loser from the budget. His comments in September caused the Dublin housing market to stall.

http://debates.oireachtas.ie/DDebate.aspx?F=SEN20061207.xml&Node=H3#H3

Plissken1

D'Peoples Voice wrote:

Lads,
Not sure if you saw an animated FG Senater Brian Hayes on TV after the budget speech,
the guy was fuming whilst reading out his speech in the Senate,
He was giving out because the PDs caused property prices to stagnate since september.

Clearly he must have a lot of friends involved in investment properties.


http://debates.oireachtas.ie/DDebate.aspx?F=SEN20061207.xml&Node=H3#H3

So he is picking on the poor ole PD's, just because the over-priced property market has slowed, Just goes to show you who is really running the country ... the builder / developers. Its like the OK Corall, Cowboys on every street corner !


The developers around the midlands / west are trying to get as many properties built as possible, well not built, started, they are getting materials on tick, just to get the first level done, in order to avail of the tax schemes on offer.

http://www.timesonline.co.uk/newspaper/0,,2771-2493341,00.html


oh and this:

http://www.finfacts.com/irelandbusinessnews/publish/article_10007747.shtml

worth a read:

There's 260,000 directly employed in construction and likely another 60,000 in related services. Direct workers are employed on a project by project basis. Average earnings are €40K compared with €31k in industry -but compared with other sectors, there's no worthwhile redundancy payoff to soften the blow of unemployment.

By 2016, there are likely to be 100,000 job losses in the sector.

D'Peoples Voice

I love the quote from Geoff Tucker (Economist with Hooke & McDonald) on page 6 of the property supplement of the Sunday Tribune (Sun December 10th).
He says that prices on a year-on-year figures give a better indication of house prices than month-on-month.

While there may be some element of truth in the fact that the greater the frequency of data, the greater the volatility of each observation, it also overlooks the fact that the most recent monthly observations have built in the most up to date information set.

Lets be honest, if someone asks you to give your best prediction of the growth rate for next month, would you guess that it's the average of the previous 12 months, or would you say that based on last month's growth rate of 0.6%, and assuming there is no new information released into the market, then the best guess would be 0.6%, whereas the 12 month average would be much higher.

This might explain why Geoff Tucker works in the property industry rather than the financial markets. In the financial markets we would take the 0.6% and put it in annualised terms, and then judge it. This means in the financial markets we would use a annualised figure of 7.44% to give them an idea of the growth in house prices while Geoff would look at 13%. Now which of these is the more reliable!

and RTE website deleted this poll from their website but google cache has it stored:
http://216.239.59.104/search?q=cache:Okuf3ZGCF_oJ:www.rte.ie/comments/comments.html+site:www.rte.ie+poll+estate+agents&hl=en&gl=ie&ct=clnk&cd=1

miju

D'Peoples Voice wrote:

He says that prices on a year-on-year figures give a better indication of house prices than month-on-month.

but when prices where rising every month everyone had no problem saying prices roses by x amount this month , now they're falling it's back to the yearly figures :rolleyes:

oh and blindjustice RTE didn't delete the poll they archived it as they change the poll everyday on their website

miju

miju wrote:

oh and blindjustice RTE didn't delete the poll they archived it as they change the poll everyday on their website

have a look for it - its nowhere to be found in the archives

SimpleSam06

Deleted User wrote:

have a look for it - its nowhere to be found in the archives

That was 94.63% in favour of much more real estate agents regulation, around a thousand votes cast, in case anyone is too lazy to look it up.

SimpleSam06

And actually, well well, heres another interesting poll, have Irish property prices peaked?

55.16% (759 votes) - Yes
37.14% (511 votes) - No
7.7% (106 votes) - Maybe

Some of the comments in there are great...

"Timber....the party's over. You know its over when on a cost per sqm you can buy property cheaper in Paris, London and New York.
Barry, Bray "

"No they have not peaked....they may slow down but wont stop and certanly will not go back...demand for houses for next 3 years is very high...
Smooth, Cork "

"No, way, not by a long shot. Sure there's no limit to how high they can go.
Andrew, Dublin 13 "

"It has got so bad that us first time buyers are not getting a chance to get on that property ladder it not affordable! Crazy! More people will be still at home at 40!!
Susan, Dublin "

whizzbang

SimpleSam06 wrote:

"No, way, not by a long shot. Sure there's no limit to how high they can go.
Andrew, Dublin 13 "

oh come on! I'd love to meet this guy and find out his rational for this!

This one is fun as well
We've been saying over the last 4 or 5 years that prices will fall and they haven't. Why should potential buyers be convinced they've peaked this time?
Niall, Galway

well, there are these things called interest rates....

ninebeanrows

Theres a house at the top of my road that hasnt sold and its been for sale for months now... Theres a sign in my on back yard..

But other than that im absolutely clueless about this topic so farewell...

eirmail

Weathercheck wrote:

Theres a house at the top of my road that hasnt sold and its been for sale for months now... Theres a sign in my on back yard..

But other than that im absolutely clueless about this topic so farewell...

I used to be clueless until i read the wikipedia articles on asset bubbles and propperty bubbles about 6 monyhs ago.

hi5

SimpleSam06 wrote:

"It has got so bad that us first time buyers are not getting a chance to get on that property ladder it not affordable! Crazy! More people will be still at home at 40!!
Susan, Dublin "

This is the cause of the problem imo,like the person above they dont really know what the "property ladder" is,they believe its something out there that nobody has control over,they just cant get their heads around the idea that if FTB's are priced out of the market (temporarily) then prices will come down to match their budget.
If FTB's are still at home in their 40's then who will developers sell new builds to?
Susan and her like could control the market if they stopped listening to the spin,instead they are being controlled and fleeced at the same time.

Calina

People like Susan annoy me. I moved out of my parents' place when I was 17. There's such a thing as "rent" you know, where you pay for the use of a house.

I suppose I should be grateful people are that blinkered that they feel forced to stay at home because rent is you know, bad, and short term and dead money. With them out of the market, my rent has remained reasonable.

Calina

SimpleSam06 wrote:

"No they have not peaked....they may slow down but wont stop and certanly will not go back...demand for houses for next 3 years is very high...
Smooth, Cork "

And the logic for that is? If demand is very high, then logically, increases will not be slowing down.

God I love this country. The level of wishful thinking is amazing.

evilcart

I thought prices in Dublin were too high back in 1999. I thought they were too high in 2000, 2001, 2002, 2003, 2004, 2005, 2006.

I am wrong every single year until I am right. And thus I have been completely 100% wrong every year, so far. Sure 2007 is most likely the first big year of the pull back. But at all levels I have missed this market.

The Irish housing market will correct, but we will not be buying homes
@ 3X times earnings anytime soon.

For those who dream of snapping up a nice home, in two or three years for cents on the euro. Be aware that a real estate crash can bring bring a whole new set of problems. There may be job loss, interest rate increases, tougher lending rules, difficulty selling current home.

Affordability and purchase price often go hand in hand. You could find yourself making the same monthly payment even though the homes sale price has dropped 100K. A 500k home at a low interest rate may cost you the same as a 400k at higher interest rate.

I look forward to a more sane housing market, I just hope it is slow and easy. There is no point wishing the whole thing blows up only to find banks are unwilling to lend, or the market is so bad you become afraid to buy.

Having said that, when the price is right, I will find it very hard not to pull the trigger.

Sponge Bob

evilcart wrote:

I thought prices in Dublin were too high back in 1999. I thought they were too high in 2000, 2001, 2002, 2003, 2004, 2005, 2006.

I am wrong every single year until I am right. And thus I have been completely 100% wrong every year, so far. Sure 2007 is most likely the first big year of the pull back. But at all levels I have missed this market.

Historical data shows that as prices rose in 1999 2000 and (maybe) 2001 then so did rents. That indicates that the price rises then were sustainable because the market essentially confirmed the house prices by upping the rents along with the price of the house.

Rent has remained static or even dropped in many areas since 2002 . This implies or even proves that there is a surplus of property in those areas .

Did anybody read this article on the effects of housing crashes when they happen in the Irish Times last week ?? OK it was written by an economist . I know.

Reyman

evilcart wrote:

I thought prices in Dublin were too high back in 1999. I thought they were too high in 2000, 2001, 2002, 2003, 2004, 2005, 2006.

I am wrong every single year until I am right. And thus I have been completely 100% wrong every year, so far. Sure 2007 is most likely the first big year of the pull back. But at all levels I have missed this market.

The Irish housing market will correct, but we will not be buying homes
@ 3X times earnings anytime soon.

For those who dream of snapping up a nice home, in two or three years for cents on the euro. Be aware that a real estate crash can bring bring a whole new set of problems. There may be job loss, interest rate increases, tougher lending rules, difficulty selling current home.

Affordability and purchase price often go hand in hand. You could find yourself making the same monthly payment even though the homes sale price has dropped 100K. A 500k home at a low interest rate may cost you the same as a 400k at higher interest rate.

I look forward to a more sane housing market, I just hope it is slow and easy. There is no point wishing the whole thing blows up only to find banks are unwilling to lend, or the market is so bad you become afraid to buy.

Having said that, when the price is right, I will find it very hard not to pull the trigger.

Good post EC ! A lot of wisdom there for those interested.

My recollection for the 1970s and 1980s was that the accepted correct value of the house you finally finished up in (i.e. after one or two trade ups) was four times your personal salary (i.e. a single salary)

Anyone like to hazard a guess on what it is now?

Sponge Bob

Your recollection is both correct and irrelevant Reyman

a) most families buying then had a single income earner, now most have 2
b) income tax as a % of the average wage was a lot higher back then .
c) Interest rates were a lot higher back then too .
d) however my sister got the £3000 first time buyer grant on a £29k house meaning the government gave her over 10% upfront .

Average income now is c €35k while average prices are c €300k so its now nearly 9x average income .

I personally think that with lower interest rates and lower income taxes we will have a future average house price of 6x income not 4x . They are still too high .