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Housing Bubble Bursting

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    #5372
    SimpleSam06
    Closed Accounts Posts: 4,048 ✭✭✭SimpleSam06


    Deleted User wrote: »
    With a bit of luck, any sane government (looks around...) will introduce credit controls to prevent bubbles from forming in the first place!

    Thus clipping the wings of speculators and preventing the sheeple from following into future recessions.
    The decision may well be taken out of their hands, thankfully, as most major governments are meeting as we speak to decide on new and more stringent international credit controls for the future.


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    #5373
    mrgaa1
    Closed Accounts Posts: 759 ✭✭✭mrgaa1


    The slump in house prices eased off in November with prices falling by just 0.4%, according to the Nationwide, the UK's largest building society. The mortgage lender said the rate of price falls "moderated significantly" when compared with October's 1.3% fall

    Does anyone know if there are similarities between Ireland and the UK in relation to price falls over the past 12 months or so ?


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    #5374
    Tomtom1
    Closed Accounts Posts: 13 ✭Tomtom1


    Gurgle wrote: »
    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.

    I agree with you ,totaly why cant we build what we want within reason.


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    #5375
    20goto10
    Registered Users Posts: 1,210 ✭✭✭20goto10


    asdasd wrote: »
    not correct. My bother wants to sell, has a better ( and safe) job than when he bought his shoebox, needs to sell the shoebox to get the bigger house, family on way etc.

    Cant sell house. He is not in negative equity (yet) it just cant sell.

    so he is suffering, and is not greedy.
    This is the real scandal. Never mind prices, its the size that is appalling. And they were building shoe boxes long before the boom. That all started in the 90's. The big difference in the last 8 years or so is the size of the gardens. In the 90's you got a shoe box with a garden, now you get a shoe box with a glorified patio and chances are you don't even own it, the management/developers own it and charge you 1500 p.m for pruning your bushes every 6 months.

    I think the reality of the sub standard homes is now kicking in. People can't sell and the thought of being stuck in their homes scares them. It shouldn't do. I know a lot of people who are not happy at all with their homes. If they're not happy you can't expect anyone else to be and to top it all off there is zero prospect of extending or doing anything worthwhile to improve it.

    No matter what happens to prices, you can't polish a turd.


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    #5376
    gurramok
    Closed Accounts Posts: 13,992 ✭✭✭✭gurramok


    20goto10 wrote: »
    This is the real scandal. Never mind prices, its the size that is appalling. And they were building shoe boxes long before the boom. That all started in the 90's. The big difference in the last 8 years or so is the size of the gardens. In the 90's you got a shoe box with a garden, now you get a shoe box with a glorified patio and chances are you don't even own it, the management/developers own it and charge you 1500 p.m for pruning your bushes every 6 months.

    I think the reality of the sub standard homes is now kicking in. People can't sell and the thought of being stuck in their homes scares them. It shouldn't do. I know a lot of people who are not happy at all with their homes. If they're not happy you can't expect anyone else to be and to top it all off there is zero prospect of extending or doing anything worthwhile to improve it.

    No matter what happens to prices, you can't polish a turd.

    Agreed. Alot of those buyers bought off the plans on the bubble.

    On a personal note, i have zero sympathy with any buyer who bought off the plans and finds the place when built to be of low quality. I'd prefer to buy a place thats in walk-in condition to see what i'm getting for the biggest financial decision of my life!

    On the blame game, i'd blame the councils for the mess. They gave permission for those shabby units to fill their coffers of development levys.


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    #5377
    Caoimhín
    Closed Accounts Posts: 3,789 ✭✭✭Caoimhín


    Just on the shabby buildings, i once rented a house in the midlands, a 3 bed semi-d. The insulation was so poor, i could hear my neighbour peeing into the toilet when he got up in the middle of the night. It got to the point that i could tell if he was on the beer that night by the intensity of the flow.
    Imaging owing the bank 350k for that for 40 years..


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    #5378
    book smarts
    Closed Accounts Posts: 218 ✭✭book smarts


    Caoimhín wrote: »
    Just on the shabby buildings, i once rented a house in the midlands, a 3 bed semi-d. The insulation was so poor, i could hear my neighbour peeing into the toilet when he got up in the middle of the night. It got to the point that i could tell if he was on the beer that night by the intensity of the flow.
    Imaging owing the bank 350k for that for 40 years..

    You've no way of knowing what insulation is in the house. You've asummed there is none. All houses have to pass a homebond inspection, and if they've cavity walls, include sheets of insulation tied to the inner leaf. You probably heard the sound because it was a quiet midlands estate and sound travels better at night.

    You didn't think that one through, did you?


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    #5379
    Caoimhín
    Closed Accounts Posts: 3,789 ✭✭✭Caoimhín


    book smarts wrote: »
    You probably heard the sound because it was a quiet midlands estate and sound travels better at night.

    You didn't think that one through, did you?

    Okey dokey.


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    #5380
    jimmycrackcorm
    Registered Users Posts: 14,331 ✭✭✭✭jimmycrackcorm


    book smarts wrote: »
    .... sound travels better at night.

    Redefining the laws of physics are we?

    How about the ambient noise levels being so low at night that any noise at all is easily more distinguishable. You didn't think of that one though did you? :D


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    #5381
    [Deleted User]
    Posts: 0 ✭ [Deleted User]


    book smarts wrote: »
    You've no way of knowing what insulation is in the house. You've asummed there is none. All houses have to pass a homebond inspection, and if they've cavity walls, include sheets of insulation tied to the inner leaf. You probably heard the sound because it was a quiet midlands estate and sound travels better at night.

    You didn't think that one through, did you?

    If you're lucky one house on the estate might get inspected, still no excuse for crap construction!

    Are you saying that it's acceptable to hear such sounds through the walls because it's in the midlands. :rolleyes: as opposed to an urban semi where the traffic noise drowns out such sounds!

    Anyway those types of house will be "left on the shelf" in the future, feel sorry for the mugs who paid a fortune for them, they're stuck!


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    #5382
    EnoughSaid
    Closed Accounts Posts: 48 ✭EnoughSaid


    book smarts wrote: »
    You've no way of knowing what insulation is in the house. You've asummed there is none. All houses have to pass a homebond inspection, and if they've cavity walls, include sheets of insulation tied to the inner leaf. You probably heard the sound because it was a quiet midlands estate and sound travels better at night.

    You didn't think that one through, did you?

    I dont think you have given it very much thought! If you can hear you neighbour going to the toilet and peeing or making bowl movements (day or night), you are living in a very poorly built house...end of story!


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    #5383
    book smarts
    Closed Accounts Posts: 218 ✭✭book smarts


    Caoimhín wrote: »
    Okey dokey.

    Air is cooler at night and is generally more dense. Sound travels further through increasingly dense mediums.

    Physics 101...:rolleyes:

    You didn't think that one through did you...ahem, Caoimhin?


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    #5384
    book smarts
    Closed Accounts Posts: 218 ✭✭book smarts


    jimmycrackcorm wrote: »
    Redefining the laws of physics are we?

    How about the ambient noise levels being so low at night that any noise at all is easily more distinguishable. You didn't think of that one though did you? :D

    The ambient noise levels are certainly a factor- you'll notice I said "quiet midlands estate".:rolleyes:

    Seems you need a refresher course in physics. May I suggest physics 101?:rolleyes:

    You didn't think that one through, did you?:D


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    #5385
    tedstriker
    Banned (with Prison Access) Posts: 130 ✭✭tedstriker


    kadoosh..

    Here is the latest PTSB/ESRI monthly house price statistics. Dublin seems to have taken a big hit in October:

    http://www.statusireland.com/statistics/property-house-price-statistics-for-ireland/3/Irish-House-Prices-Since-1996.html

    If you compare this to when Finland had a property crash in the early 90's you can see how the Helsinki price verged towards the national average and actually went below national average. I wonder could this happen in Ireland. The gap between Dublin and the national average is quite big at present.
    Here is the Finnish chart:
    http://www.statusireland.com/statistics/property-house-price-statistics-for-ireland/25/Finland-House-Price-Index-1970-to-2002.html


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    #5386
    silverharp
    Registered Users Posts: 17,849 ✭✭✭✭silverharp


    worth looking at other markets to see what is coming down the track

    from the Mish site
    http://globaleconomicanalysis.blogspot.com/

    US- Housing is bad enough, but wait — it'll get worse
    If you think the housing slump can't get much worse, Martin Feldstein thinks that both home prices and the broader economy can — and very likely will — get a whole lot worse.

    "There are now 12 million homes in the United States with a loan-to-value ratio greater than 100 percent. That's one mortgage in four. The aggregate amount of that is some $2 trillion," said Feldstein. "If you look at the median (midpoint) loan-to-value ratio in that 12 million group of underwater mortgages — mortgages with negative equity — the median loan-to-value ratio is 120 percent."

    That means about 25 percent of all U.S. mortgages are exceed the value of the homes the mortgages are financing. In the case of half the homes that are underwater, homeowners are paying a mortgage that's now 20 percent higher than the value of the home.

    That's bad — but it's likely to get worse.

    A recent report by First American Core Logic, a real-estate data firm in Santa Ana, Calif., estimated that as of Sept. 30, 7.5 million mortgages, or 18 percent of all properties with a mortgage, had negative equity. The group thinks there are another 2.1 million mortgages that are within 5 percent of going underwater.

    The implications for many homeowners are staggering. Before the recent housing boom of 2000 to 2006, homes increased in value at a historical annual rate of about 2.3 percent when adjusted for inflation.

    That means that for homeowners who owe 35 percent more than their homes' value, it would take, at historical averages, about 15 years just to break even on their home investment. They won't build equity. It would be a huge incentive for millions to hand the keys back to the lender and seek cheaper housing.

    A belief in gender identity involves a level of faith as there is nothing tangible to prove its existence which, as something divorced from the physical body, is similar to the idea of a soul. - Colette Colfer



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    #5387
    SimpleSam06
    Closed Accounts Posts: 4,048 ✭✭✭SimpleSam06


    silverharp wrote: »
    It would be a huge incentive for millions to hand the keys back to the lender and seek cheaper housing.
    And here comes the Alt-As and Primes, right on time...


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    #5388
    BobbyD10
    Registered Users Posts: 620 ✭✭✭BobbyD10


    Here is a very apt quote:

    "I would question why people would want to wait any longer.
    Are they waiting for further price reductions?"
    Marian Finnegan
    Sherry FitzGerald Group
    January 2008

    You know there will be many varied opinions, thoughts and predictions about the housing market - all with their motives behind said quotes.

    But at the end of the day, if we take responsiblity, judge our own personal circumstances and make an informed decision by doing the appropriate background work so you are well informed before we make the biggest financial decision of your life.


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    #5389
    mrgaa1
    Closed Accounts Posts: 759 ✭✭✭mrgaa1


    the huge issue at the moment is public perception. The public now believe that the banks will not lend money for anything. Anyone who needs a loan to buy a car, extend their property, buy a house, move house, buy equipment for their work etc.... believes, without even going near the bank, that they won't get anything. Whether we like it or not the world works on credit - no-one uses their own money to finance anything major. If we are to believe the banks, the government and independent auditors the banks are well capitalised. Of course times are hard - extremely hard - but even in previous recessions lending was still happening. With the likelihood of a decrease in ECB rates shortly the cost of borrowing money has never been as a cheap. As a country we need to start thinking more positively - yes we're in the mire but if we think like that we'll stay there longer. We know we'll come out of it - when is unknown - but if we are not ready for it as a country we'll be left behind as others take advantage. I consider myself an optimist and even I think at the moment that borrowing money is dangerous and yet I'm in a good job that should be secure - (I can't fire myself - not yet anyway :)) So until we come around, see the new opportunities and get moving then we're going to be stuck where we are for some time.


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    #5390
    KhanTheMan
    Closed Accounts Posts: 292 ✭✭KhanTheMan


    mrgaa1 wrote: »
    the huge issue at the moment is public perception. The public now believe that the banks will not lend money for anything. Anyone who needs a loan to buy a car, extend their property, buy a house, move house, buy equipment for their work etc.... believes, without even going near the bank, that they won't get anything. Whether we like it or not the world works on credit - no-one uses their own money to finance anything major. If we are to believe the banks, the government and independent auditors the banks are well capitalised. Of course times are hard - extremely hard - but even in previous recessions lending was still happening. With the likelihood of a decrease in ECB rates shortly the cost of borrowing money has never been as a cheap. As a country we need to start thinking more positively - yes we're in the mire but if we think like that we'll stay there longer. We know we'll come out of it - when is unknown - but if we are not ready for it as a country we'll be left behind as others take advantage. I consider myself an optimist and even I think at the moment that borrowing money is dangerous and yet I'm in a good job that should be secure - (I can't fire myself - not yet anyway :)) So until we come around, see the new opportunities and get moving then we're going to be stuck where we are for some time.

    And if people were to go check out the facts themselves instead of listening to every word they hear, they would find that there is no shortage of lending to be had from the banks. They may not be lending 100% anymore, but its not too hard to get 92%. The money is there alright, but people wont ask because they think it will be a big fat NO.


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    #5391
    ionapaul
    Registered Users Posts: 5,295 ✭✭✭ionapaul


    A lot of people are not seeking mortgages at the moment, not because they don't think they will get it, but are informed enough to see that playing the waiting game may work to their advantage. If you believe you will will benefit by renting for a few years and watching prices fall another 20-30-40%, why would you look to buy right now?

    The pool of people who are desperate to buy whenever they can afford it and are blind enough to borrow every red cent they are allowed has rapidly shrank over the past 18 months - no more 'greater fools' out there!


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    #5392
    groom
    Registered Users Posts: 1,104 ✭✭✭groom


    KhanTheMan wrote: »
    And if people were to go check out the facts themselves instead of listening to every word they hear, they would find that there is no shortage of lending to be had from the banks. They may not be lending 100% anymore, but its not too hard to get 92%. The money is there alright, but people wont ask because they think it will be a big fat NO.
    Maybe people just think that property represents poor value for money and are waiting until they can buy for 3.5 times salary rather than 8 times


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    #5393
    [Deleted User]
    Posts: 0 ✭ [Deleted User]


    groom wrote: »
    Maybe people just think that property represents poor value for money and are waiting until they can buy for 3.5 times salary rather than 8 times

    So true!

    Plus the fact that many of us are worried that we may not have the same income in a few years either to service such a debt.

    With deflation everything goes down (prices & earnings/pay cuts), except the size of any outstanding loan.


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    #5394
    gogglebok
    Closed Accounts Posts: 696 ✭✭✭gogglebok


    EnoughSaid wrote: »
    I dont think you have given it very much thought! If you can hear you neighbour going to the toilet and peeing or making bowl movements (day or night), you are living in a very poorly built house...end of story!

    If he's actually moving the bowl when he pees, he obviously has a very intense flow. I'm surprised we can't alll hear him.

    Booksmarts, is your neighbour a mild-mannered drifter by the name of Banner? Has somebody been getting him angry?

    (cue piano)


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    #5395
    EnoughSaid
    Closed Accounts Posts: 48 ✭EnoughSaid


    gogglebok wrote: »
    If he's actually moving the bowl when he pees, he obviously has a very intense flow. I'm surprised we can't alll hear him.

    Booksmarts, is your neighbour a mild-mannered drifter by the name of Banner? Has somebody been getting him angry?

    (cue piano)

    sorry....typo..should of course be "bowel"!


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    #5396
    ronbyrne2005
    Closed Accounts Posts: 3,494 ✭✭✭ronbyrne2005


    http://www.irishtimes.com/newspaper/finance/2008/1203/1228234992468.html


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    #5397
    mrgaa1
    Closed Accounts Posts: 759 ✭✭✭mrgaa1


    ronbyrne2005 wrote: »
    http://www.irishtimes.com/newspaper/finance/2008/1203/1228234992468.html

    Can't pay much heed to the above - there are over 8million people living in that one city and the areas mentioned aren't areas where you would exactly run to live in. All the people in Ireland - twice over - could live in London and its suburbs. And they were re-possessions so its already written off. More scaremongering


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    #5398
    asdasd
    Closed Accounts Posts: 3,185 ✭✭✭asdasd


    Can't pay much heed to the above - there are over 8million people living in that one city and the areas mentioned aren't areas where you would exactly run to live in

    The fact that there are 8 millio there argues against your point?


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    #5399
    martian1980
    Registered Users Posts: 370 ✭✭martian1980


    mrgaa1 wrote: »
    And they were re-possessions so its already written off.

    what do you mean by this? are houses that have been reposessed somehow different from houses being sold in the normal way? do repossessions not happen here?


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    #5400
    mrgaa1
    Closed Accounts Posts: 759 ✭✭✭mrgaa1


    there are houses here in Ireland at 100k and no-one is buying them. for those who have never lived in London it is a huge, huge place crowded with houses, apartments etc.... as it was a repossessed house the bank will have written the loan of and sold it at whatever cost because that will show as profit.


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    #5401
    Calina
    Registered Users Posts: 8,219 ✭✭✭Calina


    mrgaa1 wrote: »
    there are houses here in Ireland at 100k and no-one is buying them. for those who have never lived in London it is a huge, huge place crowded with houses, apartments etc.... as it was a repossessed house the bank will have written the loan of and sold it at whatever cost because that will show as profit.

    I am not sure what you are talking about.

    If they sold the house for less than the outstanding written off debt, it is still a loss for them. Regardless of whether it is in London or Ireland. It's called "cutting your losses".

    What should concern you is that if houses in London - regardless of where they are - are selling for 100K, even with a population of 8million, then things here are going to get a whole lot worse than they are now. Put simply, we've lower demand and less access to finance.


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