Housing Bubble Bursting

DublinWriter

DublinWriter wrote: »

Your argument is self-defeating.

It doesn't matter how long you've waited, without a job you ain't getting a mortgage.

Sean Lemass once said that a rising tide lifts all boats - the opposite is also true my hand-rubbing friend.

So true...

What is[was] needed is[was] a sensible lending policy (credit control) that prevents[ed] the price of goods exceeding their "correct values".
With "cheap" housing, it means that people can have a better quality of life on a smaller income.

The bubble should have never been allowed to inflate in the first place

Tomtom1

uncanny wrote: »

There's no ifs, buts or maybes about it. Prices are going to fall further - a lot further.



Which will drive prices down even more. Vendors can only sell for what banks are willing to finance.

Yes I agree , however I have to think in 6 month blocks as that how long my mortage assesment is valid for I dont think that myself and many others will make the criteria in the future as the banks are getting hammered big time and now shy of property full stop. I dont think prices are going to drop much more in 6 months and if they do this " buy to rent scheme " protects against this eventuality.
All the best , and thanks .

Tomtom1

DublinWriter wrote: »

Your argument is self-defeating.

It doesn't matter how long you've waited, without a job you ain't getting a mortgage.

Sean Lemass once said that a rising tide lifts all boats - the opposite is also true my hand-rubbing friend.

Instead of thinking a 35 year mortage think 50 if you dont pay it of before you die your next in line or nominated hier would then be given a chance to continue at your original repayment rate , why are we obsessed with leaving it all to our kids without leaving them some of the responsibilitys.

Caoimhín

Tomtom1 wrote: »

Instead of thinking a 35 year mortage think 50 if you dont pay it of before you die your next in line or nominated hier would then be given a chance to continue at your original repayment rate , why are we obsessed with leaving it all to our kids without leaving them some of the responsibilitys.

With some forethought, proper planning and governance there is enough space in Ireland for every family could have a place to live without having 50 years of debt to banks or landowners.

RuggieBear

Caoimhín wrote: »

With some forethought, proper planning and governance there is enough space in Ireland for every family could have a place to live without having 50 years of debt to banks or landowners.

communism?

asdasd

Instead of thinking a 35 year mortage think 50 if you dont pay it of before you die your next in line or nominated hier would then be given a chance to continue at your original repayment rate , why are we obsessed with leaving it all to our kids without leaving them some of the responsibilitys.

Good luck with that one. Banks are scaling back to 25 year mortgages.

Caoimhín

RuggieBear wrote: »

communism?

Nope, that would mean the state/people own the house. I simply believe that people are entitled to affordable homes, relative to the average industrial wage. Yes, social housing should be provided by the state for those who can not afford a house for what ever reason.
I have no problem with people buying houses worth millions but average houses for average citizens shouldn't have been allowed to reach such high/unobtainable prices because of a combination of poor governance/planning and reckless speculation and lending practices.

astrofool

There's enough space in Texas to house the entire world, doesn't mean it's going to happen Property is all about location, and Dublin has been running out of space (spurred by bad transport links).

Good luck with that one. Banks are scaling back to 25 year mortgages.

Have you any proof of this? Every bank I've talked to offers 35 year loans, I don't see why they would want a shorter term, they make a larger profit and have a more regular income on longer term loans.

Caoimhín

astrofool wrote: »

Property is all about location, and Dublin has been running out of space (spurred by bad transport links).
.

Yep, its running out of space because of poor governance/planning. Urban sprawl and the clustering of businesses, industries and services in the Dublin area is one of the causes of our current difficulties.

jmayo

Tomtom1 wrote: »

Instead of thinking a 35 year mortage think 50 if you dont pay it of before you die your next in line or nominated hier would then be given a chance to continue at your original repayment rate , why are we obsessed with leaving it all to our kids without leaving them some of the responsibilitys.

Do you seriously want to be paying off your house in your pension age which with the way things are going may not start until we are 70 and then we will nearly be paying the pension company rather than the other way around.

book smarts

I love watching the crash. All those smug ba5tards who were cruising around in their huge X5s, looking down their noses at everyone, thinking they were set for life, are now 5hitting it. Who's laughing now b1tch?

It's a pity bankrupt people don't go to jail, because all they have to fear is nothing really- at worst they go on the dole. And the government will bail out the banks- which means the taxpayer pays for businessmen's bankruptcies- in other words, they get off scott free. There's something very wrong with that system.

Caoimhín

book smarts wrote: »

I love watching the crash. All those smug ba5tards who were cruising around in their huge X5s, looking down their noses at everyone, thinking they were set for life, are now 5hitting it. Who's laughing now b1tch?

It's a pity bankrupt people don't go to jail, because all they have to fear is nothing really- at worst they go on the dole. And the government will bail out the banks- which means the taxpayer pays for businessmen's bankruptcies- in other words, they get off scott free. There's something very wrong with that system.

Quite.

If the state started sending bankrupt people to jail there wouldn't be a business in the country, which means there wouldn't be any employers, no jobs, no money, no shops, no services. We would be back to a medieval agrarian society in jig time.

You didnt really think that one through , did you.. ahem.. "book smarts"?

book smarts

book smarts wrote: »

I love watching the crash. All those smug ba5tards who were cruising around in their huge X5s, looking down their noses at everyone, thinking they were set for life, are now 5hitting it. Who's laughing now b1tch?

:rolleyes: begrudgery at it's worst! One of those people may be your boss (or could have been your future boss) the crash will affect everyone.

BobbyD10

The biggest stumbling block, apart from the fact that banks are giving out money, could be if all banks adopt the 80% of the value of the purchase policy.

If the value of the house/apartment is 300,000 that's a 60,000 deposit required. Quite large in anyone's book.

SimpleSam06

BobbyD10 wrote: »

Quite large in anyone's book.

Not for long.

md23040

book smarts wrote: »

I love watching the crash. All those smug ba5tards who were cruising around in their huge X5s, looking down their noses at everyone, thinking they were set for life, are now 5hitting it. Who's laughing now b1tch?

Most of those developers that employed good accountants etc will probably have the last laugh and more likely at your expense, as more citizens head the dole lines.

Accountants will have ring fenced their income and any money-made. The banks on the other hand are left holding a defunct limited company with poor assets.

The new disease about to blight the West will be deflation. Oil has shown the path were prices are heading, Brent @ $46pb this evening. Before you think deflation is a good thing then study the case of the land of the rising sinking sun. It's a job killer and difficult to contain, considering all economies are up to their necks in debt with Zombie banks and unable to engage in capital spending.

Ireland is doubly screwed by cutting spending, the ramifications to the economy and house prices is dire - and still the VI's in CIF claim things aren't too bad. Good help us with idiots like this in secure employment.

SimpleSam06

md23040 wrote: »

Accountants will have ring fenced their income and any money-made. The banks on the other hand are left holding a defunct limited company with poor assets.

The majority of their assets would still be held by limited liability companies, purely because to transfer them into their own names would require capital gains taxes being paid, for which the money wouldn't be there (most assets would, I assume, be non monetary) and would offer little real advantage. You won't see them on the dole anytime soon, but a lot of them won't be going back into business.

Besides, I have the utmost faith in the ability of the banks along with the national governments that had to bail them out to track down and secure bad debt.

Property developers and builders generally aren't the most savvy of people in my experience, accountants or no-property is on the bottom rungs of gainful business, and in normal markets wouldn't be worth much to anyone.

book smarts

Caoimhín wrote: »

Quite.

You didnt really think that one through , did you.. ahem.. "book smarts"?

No need for that patronising little insult.

Tomtom1

Caoimhín wrote: »

With some forethought, proper planning and governance there is enough space in Ireland for every family could have a place to live without having 50 years of debt to banks or landowners.

Sounds promising but if we learnt any lessons no - one wrote them down , would love to here thoughts on planning and so on .
Regards.

md23040

md23040 wrote: »

The new disease about to blight the West will be deflation. Oil has shown the path were prices are heading, Brent @ $46pb this evening. Before you think deflation is a good thing then study the case of the land of the rising sinking sun. It's a job killer and difficult to contain, considering all economies are up to their necks in debt with Zombie banks and unable to engage in capital spending.

.

Another downside is the fact that those with enormous mortgages will find that those repayments will remain huge, relative to their salary for a very long time. Their salaries may even drop!

Negative equity will continue to be a problem for as long as there is no inflation to swallow it up.

jmayo

BobbyD10 wrote: »

The biggest stumbling block, apart from the fact that banks are giving out money, could be if all banks adopt the 80% of the value of the purchase policy.

If the value of the house/apartment is 300,000 that's a 60,000 deposit required. Quite large in anyone's book.

And guess what happens then ...
Well the house/apartment drops in value to an affordable amount, becuase lo and behold nobody can afford to buy it at it's over valued 300k.

Of course there are those amongst us who claim they cannot afford to drop the values anymore :rolleyes:

Something I have said possibly on this exact thread way back was pointed out by Shane Ross, Eamon Dunphy, like them or loathe them, on Tubridy this morning.
We are going to be worse off than the 70s or 80s since back then the population were not saddled with such extensive personal debt.
Added to this there will be no great boom, as from late 80s, of IT related companies arriving to create the new celtic tiger, they either can head off to new pastures in Eastern Europe or Asia, or they may be forced to consolidate stateside.
We are also carrying an even bigger public sector now.
This time the world is in a huge recesssion and not just little old Ireland.

asdasd

We are going to be worse off than the 70s or 80s since back then the population were not saddled with such extensive personal debt.

Well in the 80's we had one year of recession, about a 2% drop. Now we will have 2 years of 2% drop, then 4% drop at best.

Added to this there will be no great boom, as from late 80s, of IT related companies arriving to create the new celtic tiger, they either can head off to new pastures in Eastern Europe or Asia

no, the best we can hope for is that we have learned some experimentalism in the last few years and people start to set up their own companies. There is some evidence of this, but a lot of our successful IT entrepreneurs seem to end up in the US.

SimpleSam06

asdasd wrote: »

no, the best we can hope for is that we have learned some experimentalism in the last few years and people start to set up their own companies. There is some evidence of this, but a lot of our successful IT entrepreneurs seem to end up in the US.

Its much easier to get VC funding over there, or funding of any kind.

Tomtom1

Deleted User wrote: »

Another downside is the fact that those with enormous mortgages will find that those repayments will remain huge, relative to their salary for a very long time. Their salaries may even drop!

Negative equity will continue to be a problem for as long as there is no inflation to swallow it up.

Cheers now i know why it,s called a depression, the worst vice is advice but in this climate i,ll listen to all sides then choose .
Thanks.

JJJJNR

The good (bad) old days..

http://www.independent.ie/business/business-week--no-end-in-sight-to-house-price-rises-during-2007-65798.html

"Probably the most incorrect forecast in the world"

Gurgle

Tomtom1 wrote: »

would love to here thoughts on planning and so on.

Heres a thought - the entire housing boom would never have happened if not for the 'what we says goes' position taken by our elected overlords at every level.

Planning permission to build your own home on your own land should be something we all have by default, and if someone has an objection (be it the council, the neighbours or the misguided hippies) it should be up to them to demonstrate how building your house will do harm.

Instead, we've all been packed into shoe-boxes for absolutely no good reason by the planning authorities.

Caoimhín

Gurgle wrote: »

Planning permission to build your own home on your own land should be something we all have by default, and if someone has an objection (be it the council, the neighbours or the misguided hippies) it should be up to them to demonstrate how building your house will do harm.

Within the boundaries of taste and reason.

There is no need or reason for a vulgar mansion on the top of a hill in rural Leitrim.

Firetrap

A vulgar mansion on top of a hill in Leitrim is as objectionable as a cardboardy one bedroom apartment.

jmayo

Caoimhín wrote: »

Within the boundaries of taste and reason.

There is no need or reason for a vulgar mansion on the top of a hill in rural Leitrim.

Hmmm it's not just Leitrim.
I know areas in Mayo that have been spoilt by some monstrous looking one off houses.
We seemed to loose the run of ourselves. All our houses had to have 5/6 bedrooms with ensuites, a couple of sunrooms stuck on the side to capture the great western sunshine we are so noted for :rolleyes:
Sometimes I wonder if the developers/owners and architect's only reference was US TV and items such as southfork in Dallas.
Go to most other countries and you don't see such houses.
I.E. check houses in rural Australia or NZ for instance.