Housing Bubble Bursting

oceanclub

Gurgle wrote: »

I've been laughing at most of the comments all the way through the last 2 years and 370 pages.

And still - the total drop in the national average house price since the peak 2 years ago is less than 15%.

I note that you swiftly edited this article to change the value 10% to 15%. Any source for those two figures? You do realise that even industry shills such as the chief economist of Sherry Fitzgerald have said the figure is 30% (http://www.sherryfitz.ie/aboutus/NewsItem.aspx?ID=506), and there was over 10% drop in Galway in the last quarter of 2008 alone? Oh wait, you're going to tell me that Sherry Fitzgerald are bears now, are you?

P.

asdasd

I've been laughing at most of the comments all the way through the last 2 years and 370 pages.

And still - the total drop in the national average house price since the peak 2 years ago is less than 15%.

And still - the crash predictors are trying to find a way to prove they were right.

Still laughing

It is almost not worth responding but:

15% in two years is more than the UK bust in 1992. In real terms the drop in > 20%.
2) Those are asking prices.
3) It aint over yet baby. MK is predicting an 80% drop.
4) Construction employment is down by 80%
6) Unemployment has near doubled in a few months.
7) You have noticed that the banks are being nationalised, recapitalised, and the economy is in freefall largely because banks are in dire straits because of the fall in property? You have haven't you? It's been on the news.

I think the commentators on here were all too optimistic, including the pessimistic: this is the biggest crisis in Irish economic history. The bubble played it's part, was the major part. Do keep up.

Calina

Gurgle wrote: »

I've been laughing at most of the comments all the way through the last 2 years and 370 pages.

And still - the total drop in the national average house price since the peak 2 years ago is less than 15%.

And still - the crash predictors are trying to find a way to prove they were right.

Still laughing

While supply on the sales market has doubled. Can you by any chance come up with sales volume figures for up to 2006 and post 2006? I think you'll find that although prices may have*only* dropped around 15% on average (it varies from property to property type), volume of sales have fallen off a cliff and the number of properties on sale is way way up. I think that constitutes a crash to be honest.

spockety

oceanclub wrote: »

I note that you swiftly edited this article to change the value 10% to 15%. Any source for those two figures? You do realise that even industry shills such as the chief economist of Sherry Fitzgerald have said the figure is 30% (http://www.sherryfitz.ie/aboutus/NewsItem.aspx?ID=506), and there was over 10% drop in Galway in the last quarter of 2008 alone? Oh wait, you're going to tell me that Sherry Fitzgerald are bears now, are you?

P.

I presume he's using the PTSB/ESRI housing index. Mind you, those figures are only available to November '08. Things are different even since then.

oceanclub

spockety wrote: »

I presume he's using the PTSB/ESRI housing index. Mind you, those figures are only available to November '08. Things are different even since then.

Oh my god; even the property industry themselves no longer trust those figures.

I bet that guy thinks Cowen is doing a great job too.

P.

spockety

oceanclub wrote: »

Oh my god; even the property industry themselves no longer trust those figures.

Aye, I know, I'm just saying I think that's where he got the figures, as they pretty much show a drop of almost exactly 15% from peak in Jan 2007, to November 2008..

Pity we don't have more substantive data in the open.

ntlbell

Gurgle wrote: »

I've been laughing at most of the comments all the way through the last 2 years and 370 pages.

And still - the total drop in the national average house price since the peak 2 years ago is less than 15%.

And still - the crash predictors are trying to find a way to prove they were right.

Still laughing

You're joking right?

oceanclub

ntlbell wrote: »

You're joking right?

Here he is saying that 5-bedroom houses in Kildare will hold their value:

http://www.boards.ie/vbulletin/showpost.php?p=57868368&postcount=65

Here's the list of 5-bed houses in Kildare that have had to drop their value:

http://www.irishpropertywatch.com/salesSearchResults.php?Address=Enter+your+search+address+here%21&Beds=5&Type=any&Region=Co.+Kildare

Some have been advertised for 18 months and have had to drop their prices 4 times in that time.

Gurgle: the sound of those last braincells dying.

P.

blah

gurramok wrote: »

Yeh, they(who have disappeared since) couldn't handle the thought of facts, figures & links from that Pa ElGrande guy on Page 2 who was dead right!.

Well put Pa ElGrande (page 4)

As the bubble unwinds
Interest rates go up.
Banks tighten their criteria for lending.
Unemployment rises and jobs are tougher to find.
Bad debts start to mount as businesses fold.
Investors who are undercapitalised rush to sell else they go bankrupt.
Peoples appetite for extending themselves to get on the ladder evaporates as fears over job security take precedence.
Government tax revenue nose dives, its costs increase, leading to huge deficits.

Looks like he didn't go far enough, we're already beyond those predictions...

Duckjob

Gurgle wrote: »

I've been laughing at most of the comments all the way through the last 2 years and 370 pages.

And still - the total drop in the national average house price since the peak 2 years ago is less than 15%.

And still - the crash predictors are trying to find a way to prove they were right.

Still laughing

Unless the market returns to something approaching normal level of selling activity, nobody can accurately put a percentage on where the market is.

At the moment, we have asking price well down from the peak and still nothing moving.

A sub-normal level of activity suggests the market is still in transition. The fact that there's next to no activity suggests to me that it's in a more significant transition than many people even realise yet.

I don't see anything to suggest buyers are about to start running out and offering sellers current asking prices.

What I do see is ever darker clouds gathering on the economic front which suggest to me that in the year ahead many sellers may be forced to abandon their current notions of what their properties are worth, and actually sell for what their properties are actually worth.

ntlbell

As we don't have access to the actual sale agreed prices currently where is he getting the 15% from?

Eglinton

Gurgle wrote: »

I've been laughing at most of the comments all the way through the last 2 years and 370 pages.

And still - the total drop in the national average house price since the peak 2 years ago is less than 15%.

And still - the crash predictors are trying to find a way to prove they were right.

Still laughing

No. I'm still laughing - At you! I'm not going to repeat what the rest of the posters have quoted to you but I think one thing is for certain - Prices have and are dropping a lot more than 15%. No one knows how much exactly but in 10 years time we could be looking back and saying "Wow, wasn't it incredible that prices dropped 80% between 2006 and 2010. Who could have predicted."

_Nuno_

ntlbell wrote: »

As we don't have access to the actual sale agreed prices currently where is he getting the 15% from?

He thinks asking price is the same as selling price. I'd say you can safely ignore him...

Ally Dick

I dunno about everyone else here but I blame the reckless Bertie for the bulk of the problems

Dob74

Gurgle wrote: »

I've been laughing at most of the comments all the way through the last 2 years and 370 pages.

And still - the total drop in the national average house price since the peak 2 years ago is less than 15%.

And still - the crash predictors are trying to find a way to prove they were right.

Still laughing

WTF

punchestown

Ally Dick wrote: »

I dunno about everyone else here but I blame the reckless Bertie for the bulk of the problems

I must have heard at least ten times since the new year 'sure it was all great when Bertie was in charge' or 'its all gone wrong since Bertie left'
This idiot is a huge contributing factor to the current ills in our economy. A cheer leader for the boom and his friends in the building industry, he presided over a massive pyramid scheme which will cause our country and its people no end of problems for the next decade. And he wants to become next President :eek: I wouldnt put the shyster in charge of the Beaumont House Golf society!

TutuKaka

Weren't Bertie and Seanie FitzPatrick great mates? Maybe Bertie got advice from Seanie on where to put a few bob for a rainy day.
They both seem to share a common history of 'un-orthodox' financial arrangements.

johnnyskeleton

Gurgle wrote: »

I've been laughing at most of the comments all the way through the last 2 years and 370 pages.

And still - the total drop in the national average house price since the peak 2 years ago is less than 15%.

And still - the crash predictors are trying to find a way to prove they were right.

Still laughing

Two weeks ago you posted:

Gurgle wrote: »

Given that this thread has been going for just over 2 years, during which time the average house price has fallen by less than 15%, is everyone at last ready to concede that it was in fact a soft landing ?

And of course, any further reductions are due to the global recession, not that houses were really that much over-priced for the times and circumstances (i.e. the boom) ?

Even though a number of people replied, you didn't answer a single point that was raised. Instead, you wait two weeks and then repeat the same nonsense. Is that you brian cowen?

Duckjob

Ally Dick wrote:

I dunno about everyone else here but I blame the reckless Bertie for the bulk of the problems

punchestown wrote: »

I must have heard at least ten times since the new year 'sure it was all great when Bertie was in charge' or 'its all gone wrong since Bertie left'
This idiot is a huge contributing factor to the current ills in our economy. A cheer leader for the boom and his friends in the building industry, he presided over a massive pyramid scheme which will cause our country and its people no end of problems for the next decade. And he wants to become next President :eek: I wouldnt put the shyster in charge of the Beaumont House Golf society!

+1,000,000

That view that Bertie was a great lad and things have gone to pot since he went is so blinkered it actually scares me.

It seems to me that Bertie and Cowen spent 7 solid years doing nothing but lying on the floor playing 'cash angels' in piles of stamp duty euros.

I can't even say they mismanaged the economy, because that would imply they actually did something other than just stand back and let the property bubble "become" our economy.

Those disenting voices that rightly warned we were on a road to nowhere good and needed to put the breaks on were shouted down and told by Bertie himself that they should "go off and commit suicide"

A driver who drives recklessly and destroys a family can get jail time. How many families have been decimated financially by the recklessness of Bertie and his goons. Presidency? Prison time would be more appropriate...

laurak265

Ally Dick wrote: »

I dunno about everyone else here but I blame the reckless Bertie for the bulk of the problems

You think bertie ahern caused a worldwide recession resulting in house prices dropping everywhere in the world not to mention that supply now out weights demand also causing house prices to drop??

Firetrap

Even Bertie's most vehement enemies wouldn't go so far as to blame him for the global recession but he has to be responsible for some of what's happened here.

I'm of the belief that the property bubble, and government policy that encouraged it, have caused quite a lot of our current economic woes.

spockety

laurak265 wrote: »

You think bertie ahern caused a worldwide recession resulting in house prices dropping everywhere in the world not to mention that supply now out weights demand also causing house prices to drop??

Please show evidence of where house prices are dropping everywhere in the world to the same extent that Ireland is.

Other countries with over inflated bubbles (e.g. UK) don't count.

Please fill in below.

1.
2.
3.
4.

asdasd

Please show evidence of where house prices are dropping everywhere in the world to the same extent that Ireland is.

Other countries with over inflated bubbles (e.g. UK) don't count.

You've loaded the dice there, haven't you. Were he to name any other country with a bubble worse than Ireland it would be invalid as you would dismiss it as a country with another "over inflated bubble". Can't win that one.

spockety

asdasd wrote: »

You've loaded the dice there, haven't you. Were he to name any other country with a bubble worse than Ireland it would be invalid as you would dismiss it as a country with another "over inflated bubble". Can't win that one.

Er obviously.

And the argument can easily be won, by showing where countries that had sound economic policies in place for the last 10 years are now still suffering falling property prices.

asdasd

As to blame I blame we as a society.

Actually, you as a society. You know who you are.

My gf and I both earn above the average wage, in one case twice it, the other more than 50% more. Not spectacular but we are getting on for four times the average. Which means during the boom we could only buy a significantly less than average priced house in a less well-off area. So we didnt buy. I convinced her of a certain fall.

Here is an interesting story. About two-three years ago I am on a course. The age ranges from late twenties to about forty something. During those awkward lunches where people who only know each other from the course talk about general stuff, the talk turned to property. Most people were talking about buying more stuff, Turkey, and other bollocks. Some chap was talking about his house "earning" more than him. I mentioned, politely, that I knew a guy who was still paying his UK mortgage from 1992, but had lost the house. It was a "property sometimes falls" story.

it was like I dropped my pants and pooped in the soup. There was an uncomfortable silence, a few "uh-huhs", a glassy sympathetic smile from the nice girl in the corner who thought I was mad, but at least polite about it. The conversation moved on.

so i blame those of you who bought houses. What could bertie have done? Forced the regulators to make banks give everybody 2.5 times salary in 2003. That would have collapsed the market then, but the muppets blaming him now most voraciously would be on his back then too.

Calina

It's not so much people who bought houses, it's people who agreed to pay too much for those houses.

People will always buy houses but now, perhaps, they won't bid them up so high.

spockety

asdasd wrote: »

so i blame those of you who bought houses. What could bertie have done? Forced the regulators to make banks give everybody 2.5 times salary in 2003. That would have collapsed the market then,

Actually the warnings about overpriced property were coming from the central bank and/or regulator as far back as 2000.

100% mortgages should have been banned.
30/35/40 year mortgages should have been banned.

The max allowed should have been 25 years @ 92% LTV.

The tax breaks given to property investors and devlopers should have never happened, they decimated opportunities for people looking for homes at affordable prices.

asdasd

100% mortgages should have been banned.
30/35/40 year mortgages should have been banned.

The max allowed should have been 25 years @ 92% LTV.

These are really jobs for the regulators. What good is a central bank "warning". The other problem is the one I mentioned, to introduce these regulations - which I agree with - during the boom would have reversed house prices immediatley and forced people into negative equity. no political party could do that, but faceless bureaucrats could.

Calina

But yet the Central Bank did not do that.

In any case, there also has to be a modicum of self responsibility about this. I was offered a mortgage of 8 times my salary and if I had 1E for every occasion someone said "well you can rent out a room anyway" I wouldn't have needed a mortgage.

People lost the run of themselves too. I've no issue with the 100% mortgage but I have a monumental problem with more than 3 times your salary. 100% of 3x salary is more than likely to be less than 92% 4x salary for example.

Unless the figures are really low.

travellerI

The 'we as a society messge' is one which is now being promolugated by vested interests including politicians, media, bankers and property interests to excuse the dire situation we now find ourselves in.

The current situation in Ireland is characterised by two factors:

1. The U.S. led banking crisis. I dont know where the word credit crunch emanated from but was likely thougth up by a Bush spin doctor as a neutral non-specific term to get the U.S. off the hook for its central role in this crisis. Think collateral damage for describing dead civilians after a bombing raid.

2. A monumental property bubble whose ultimate effects remain unquantified but we at least know that there are a load of empty ghost estates all over Ireland and it now appears that the ubiquitous one bed apartment is practically unsellable.

The consequnce of this for Ireland is that while many Governments are tackling this crisis with one hand tied behind their backs the Irish Government are doing so with both hands tied behind their backs US led banking crisis and property crash. Remember our crash is the crashiest of them all

During the property bubble in my mind this country was like how I imagine North Korea to be. Loudspeakers everywhere pumping out a single message -property will make you rich. Who were the messengers? Economists who worked for banks, economists who worked for estate agents, the politicians and the property developers. All these interest groups had season tockets for RTE, Newstalk and the newspapers and their views went practically unchallenged. The dissidents Morgan Kelly, Alan Ahearne, David McWilliams were told to commit suicide by the Prime Minster = a statement on its own that has surely put paid to any presidential ambitions on his part.

Now in deflating bubble Ireland the same messengers are there but the message is a new one. You are living beyond your means and it is all the fault of the public service. How did that happen?

In 2007 Brendan O'Connor was still encouraging smart ballsy guys to buy property. As this message doesn't suit anymore he is now followng the its all the fault of the public servants line. And what are all the vested interest economists saying now - its all the fault of the public service. These are the same gaurds and nurses who had to seek pay increases in the property bubble years to even think of affording a hovel 50 mlies from where htye worked

I will listen to some of these vested interests if they can explain to me how a 10 % drop in property prices one year and a 15 % drop the next is a soft landing. Those who are lecturing us now on what is good for us might begin each of their diatribes with an apology to the tens of thousands of people who now find themselves in negative equity based on their flawed advice and predictions.