Hahaha BOI revise house price growth figures

faceman

Revised from c. 9% to c. 12%

Still waiting on the bubbles to burst... :rolleyes:

God I pity all those people who bought their house this year, last year, the year before, the year before that etc etc etc, you've been warning now for so long you're doomed!!!

Seriously though, thats a massive correction considering the increases in interest rates and the further expected rises. But its all swings and roundabouts if you ask me, rates will come down again mid to late next year. World Cup is over, output isnt as high as expected in Germany.

I give up, anyone for a game of The Sims?

Lex Luthor

nothing new here...9% was a bit conservative....they'll say the same next year only probably say it might rise by 7% and it'll still end up with 10-12% increases.

Gwynston

I heard discussion on this on The Last Word yesterday, saying the outlook is still very strong due to rising employment rates - much higher than EU average. And that the government is doing nothing to curb house prices due to the huge revenues they're making from stamp duty and income tax + VAT returns from the booming construction industry. It's a risky strategy...

I think they also predicted a drop in price rise rates to 3% by the end of 2007.

Also mentioned was the fact that interest rates are expected to be raised at least twice more before year end, but that this isn't as big a deal as if Ireland was not tied to the central bank rates (in which case rates would be probably twice their current levels in a drastic attempt to control inflation).

bringitdown

Burst goddammit - I'm 'waiting' for it to burst 'cos I can't afford one in the first place unless I bloody live in Monaghan - which ain't for me.

Kudos to all those on-paper thousand-aires / millionaires you are lucky to have had the money to purchase in such a bullish market ... (so please stop gloating ... )

I'm sticking to I'll buy when I need to ...

ionapaul

I know we recently were identified as the 2nd richest people in the world, if runaway house price increases continue, anyone know when we officially become the richest people in the world? It is going to ROCK!

Supercell

Jeepers, the madness just gets worse!!
Enjoy it while it lasts lads is all i'll say.

The_Conductor

German VAT rate increases in December are anticipated to make it more likely for further ECB rate rises (as they will obviously be inflationary in nature). What happens in Germany is far more important to the ECB than what happens here.....At the end of the day we would all be millionaires though, if we could predict these things......

Shane.

interested

spent some time recently looking at rates, articles associated with what the ECB will do next. True to form they announced another raise of 0.25% about 20 minutes ago - and they meet again on the 31st of this month. As someone already mentioned these rates have little to do with our own parochial view of finances in ireland and more to do with the likes of france and germany.

What was of interest is that over the last 2 weeks whilst shopping for a reasonable fixed rate to hedge my bets on - 2 mortgage providers told me of 3 and 5 year products - within the last 3 days I got calls from both telling me they were pulling the products or would not be offering them before realligning the rates based on what the ECB would do.

Bottom line. The mortgage providers always win but they are executing spread betting practices based on ECB decisions. The government always wins (see associated house sales/puchase taxes). Unless people purchased property in excess of 10 years ago its all virtual money and an unstable house market is of no use to anyone.

chump

ECB rates did go up to 3% but comments by Trichet at the press conference suggest no further rise later this month. It is expected to be October... I think the market is expecting rates to be 3.5% by year end. Others suggest 3.25% though. I don't know what they're going to do when the expected economic downturn occurs next year though - hardly the right environment to be upping rates further.

Afuera

As far as the ECB is concerned it's all about price stability. Trichet said today that in the short, medium and long term this is being threatened by inflation. The risk of an economic downturn hasn't been identified in the short or medium turn so I think we are going to have to get used to rates rises for the next while at least.

faceman

Rates cant continue to rise indefinitely. ECB have to strike a balance between inflationary control and consumer confidence/investment stability. I reckon we will level off early next year and once the headlines are over the news wont be so doom and gloom.

coolhandluke

chump wrote:

ECB rates did go up to 3% but comments by Trichet at the press conference suggest no further rise later this month. It is expected to be October... I think the market is expecting rates to be 3.5% by year end. Others suggest 3.25% though. I don't know what they're going to do when the expected economic downturn occurs next year though - hardly the right environment to be upping rates further.

Who's economic downturn ?
If you mean our one,then i'm sorry for you but if you think the ECB will stop raising rates because it's hurting ireland then you're in for a big wake up call.

Ireland was warned and warned about the asset price bubble that was developing by the ecb and did nothing about it,we (the government) got ourselves into this mess and if the wider EU needs interest rate rises they WILL rise.

daveirl

This post has been deleted.

GP

Would you suggest to people then that they should fix their mortgage rates if they're on a Tracker ?

Me and the wife have a an UB tracker and at the moment we're not too worried as we don't have that many expenses outside of the house and car. I suppose we're just thinking long term and whther these rates could go up and up and up indefintiely. No piont paying 7-8-9 % if we can fix now at a reasonable rate for a short term.

Or am I getting this all wrong ??

Victor

Things are unlikely to reach 9% - if they do, worry more about your job than your house.

godtabh

Victor wrote:

Things are unlikely to reach 9% - if they do, worry more about your job than your house.

When did this last happen? Would've it been during the 80's late 70's?

Victor

kearnsr wrote:

When did this last happen? Would've it been during the 80's late 70's?

It was well into the double digits in 1992-1993.

godtabh

Victor wrote:

It was well into the double digits in 1992-1993.

What was the cause of such high rates then?

Victor

kearnsr wrote:

What was the cause of such high rates then?

Historically, Ireland has had higher rates than the rest of Europe. In 1992, George Soros broke the Bank of England, forcing it out of the ERM. IEP1.00 = STG1.10 Eventually Ireland had to devalue the punt.

Linford

kearnsr wrote:

What was the cause of such high rates then?

Back then the rates were set by our own Central Bank and not by the ECB, in the rest of the euro zone rates have never been as high as they were in Ireland in the 80's and early 90's.

bullrunner

to the poster who wants to know about fixing mortgage rates now...yes do so...int rates will rise by 0.50% by the end of the year (start of Oct and end nov/dec) ...ecb talked previously about increasing the frequency of increases...was 3 monthly increases now bi monthly...so 2 more raises this side of Xmas...and look at possibly another 1% in 2007...so should probably be around 4.5% by end of 2007...ie trackers will be in the region of 5.6-5.85%.

Up to recently NIB has a 2 year fixed for 4.18% ...if you can ..take their hands off!!

Also expect Eurozone inflation to be 'artificially' inflated for the next year due to the 3% VAT increase in Germany ...giving the ECB an excuse to increase rates (they have admitted that rates are way too low...and see 4-5% as a neutral rate....so god help us if the eurozone starts to overheat...rates will hit the roof!!)

coolhandluke

It seems to me the fact that central banks all over the world have been raising rates in tandem,that a decision has been made to burst property bubbles where ever they exist (us uk spain ireland australia) and prevent others from developing (eastern europe germany france).
Better to have capital around the world invested in new technology innovation etc. than sitting in bricks and mortar doing nothing.

GP

ok so one person thinkgs one should fix.

any other opinions ?

chump

GP wrote:

ok so one person thinkgs one should fix.

any other opinions ?

It depends what rate you can fix at!
Expected ECB by year end 3.5%
SOme say will go higher next year, others say will stay put at 3.5%

If you can get a fixed rate at 4.5% or less, yes it may be the right decision to fix.

BUT that said. If next year (or the following year) the economy declines sufficiently in Europe rates may be cut. Therefore depending on how long you fix for it might be a much of a muchness.