Housing Bubble Bursting

K-9

Gurgle wrote: »

Please just 2 more years?

Indeed, it could well take that long to see definitively what the drop is/was.

Fr0g

It's still bursting/deflating

asdasd

I think Gurgle is right. Just because the immigrants are going home and 36,000 people are losing their job a month is no reason to think we won't have a soft landing in the property market.

The problem with you muppets is you just dont understand the demographics

Caoimhín

asdasd wrote: »

The problem with you muppets is you just dont understand the demographics

Da fundamentals?

HashSlinging

Hey owning a house, however much its loosing in money is a far more secure than renting, how many months missed payments do you think your landlord will give you until he sends you to the streets, at least owning a house now gives you 12 months to get your act together.

asdasd

how many months missed payments do you think your landlord will give you until he sends you to the streets, at least owning a house now gives you 12 months to get your act together.

I'd get the government to step up to the plate with rent allowance.

HashSlinging

Most landlords dont except social welfare cheques though.

professore

johnnyskeleton wrote: »

We are now seeing massive unemployment. This most likely means that we will revert to the single income household (or possibly 2 half incomes). The other alternative is that the unemployed people will leave the country or live in social housing. In either event it augers for massive reductions in house prices.

Plus we are overvalued in the euro, so real wage rates will drop 20% or so (they already have dropped 10%+ in the private sector). Plus we are all going to pay more taxes on what's left of our income. Plus the big demographic bubble of the 70s is coming to an end as these people mostly have a house now or never will have one. Plus the banks have tightened lending significantly. Plus there are thousands of unsold properties nationwide. So all pressure is downwards. Anyone who thinks otherwise is an ass IMHO. In fact I think our crash is going to be worse than Japan's, and will be taught in economics courses everywhere as the example of a property bubble.

When you see people in average jobs leveraged to the hilt with 4-5 properties then you know the S**T is going to hit the fan. I think fair value for a 3-bed semi in Dublin is € 150 K (granted more in Ross O'Carroll-Kelly land), and outside Dublin € 100 K. I feel we will overshoot this before returning to in or around this level.

jcatony

JESUS i'm depressed!

jmayo

professore wrote: »

Plus we are overvalued in the euro, so real wage rates will drop 20% or so (they already have dropped 10%+ in the private sector). Plus we are all going to pay more taxes on what's left of our income. Plus the big demographic bubble of the 70s is coming to an end as these people mostly have a house now or never will have one. Plus the banks have tightened lending significantly. Plus there are thousands of unsold properties nationwide. So all pressure is downwards.

and all those plusses lead to one big minus

professore wrote: »

Anyone who thinks otherwise is an ass IMHO. In fact I think our crash is going to be worse than Japan's, and will be taught in economics courses everywhere as the example of a property bubble.

So some good will come out of it.
Ireland and property will be forever linked in every MBA/economics course in the world.
It will make a change from Ireland always been linked to just spuds I guess :rolleyes:

321654

HashSlinging wrote: »

Most landlords dont except social welfare cheques though.

Oh no.
Where will we all live when we have no jobs then.

Calina

HashSlinging wrote: »

Most landlords dont except social welfare cheques though.

Rent allowance doesn't actually come from Social Welfare but from the Health Services Executive as far as I know. And secondly, giving rising rental supply they may not have too much choice in the matter for a while.

johnnyskeleton

ZYX wrote: »

Hats off to you Gurgle. You are great at getting reactions on this thread but this is the best ever. Jonnyskeleton must have spent hours on this. Eventually they are all going mad. It's like Vanessa Feltz on Big Brother.

Not really, it's just a simple internet search. Anyone can do it in about 5-10 mins. But I'm not going mad, if anything I'm becoming saner as the world becomes more (or less) mad. The only things that make me mad are FF, and the regulator, and the developers, and people's sense of entitlement....in fact, pretty much everything makes me mad these days. The only things that keeps me calm are threads like this

professore wrote: »

Plus we are overvalued in the euro, so real wage rates will drop 20% or so (they already have dropped 10%+ in the private sector). Plus we are all going to pay more taxes on what's left of our income. Plus the big demographic bubble of the 70s is coming to an end as these people mostly have a house now or never will have one. Plus the banks have tightened lending significantly. Plus there are thousands of unsold properties nationwide. So all pressure is downwards. Anyone who thinks otherwise is an ass IMHO. In fact I think our crash is going to be worse than Japan's, and will be taught in economics courses everywhere as the example of a property bubble.

When you see people in average jobs leveraged to the hilt with 4-5 properties then you know the S**T is going to hit the fan. I think fair value for a 3-bed semi in Dublin is € 150 K (granted more in Ross O'Carroll-Kelly land), and outside Dublin € 100 K. I feel we will overshoot this before returning to in or around this level.

I don't like it when we're in agreement prof. I always get the impression that you've looked into the inner circle of hell and are just letting us know what's up ahead!

oceanclub

Caoimhín wrote: »

Da fundamentals?

Ireland is different!

It's a new paradigm!

P.

gurramok

Somebody mentioned demographics.

News today from a FAS report of a prediction of 70,000 graduates will be without a job.
http://www.independent.ie/education/latest-news/up-to-70000-graduates-on-dole-by-end-of-year-1634052.html
Yes, you're reading it right, thats 70,000 less first time buyers available to buy in the short term.

K-9

gurramok wrote: »

Somebody mentioned demographics.

News today from a FAS report of a prediction of 70,000 graduates will be without a job.
http://www.independent.ie/education/latest-news/up-to-70000-graduates-on-dole-by-end-of-year-1634052.html
Yes, you're reading it right, thats 70,000 less first time buyers available to buy in the short term.

Stop introducing facts into things, they didn't apply during the boom, why now?

fugazied

Housing prices were ridiculous. I'm on about the average salary and could not afford a mortgage with prices where they were at over the last 5-6 years. It was fueled by baby boomers snapping up 3-4 houses and flipping them imo.
Many of those baby boomers who decided to be house flipping millionaires have lost their houses now. I don't really feel for them tbh.

gurramok

We had the rent-to-buy scheme like Kaiser2000's thread and here's yet another scheme to entice buyers to protect them from 15% fall in prices over 5 yrs
http://www.rte.ie/business/2009/0211/mortgage.html

Of course, this scheme is basically another bet. A 15% drop is nothing, it will be more than that plus plenty of if's and maybe's in between like that developer deposit hence i'd advise to stay away

gurramok

Warning on 'avalanche of home repossessions' http://www.rte.ie/business/2009/0211/repossession.html

He also warned that the banks' lending practices would be considered by the courts and failure to stress-test loan applications, failure to require insurance, commission and a bank's published profits would all be taken into account.

Maybe the tide is turning against the banks reckless lending at least in the courts? (yes the borrower was reckless too but its the first time i read someone like The Master of the High Court saying this!)

ntlbell

AIB just range me and asked "are you ok for anything?" "new/re-mortgage? new car?"

the party is back on :D:D:D

Dob74

ntlbell wrote: »

AIB just range me and asked "are you ok for anything?" "new/re-mortgage? new car?"

the party is back on :D:D:D

AIB offered to give me and my wife to be an 480k mortagage. 6 times our earning, that is joke. Wasnt even looking for that much. Haven't these clowns learned anything.
Back to throwing money out the door.

If something goes wrong the taxpayer will bail them out

Caoimhín

ntlbell wrote: »

AIB just range me and asked "are you ok for anything?" "new/re-mortgage? new car?"

the party is back on :D:D:D

Yeah, i get those now and again. It wouldnt be a problem if i didnt have to pay the money back.

ntlbell

Caoimhín wrote: »

Yeah, i get those now and again. It wouldnt be a problem if i didnt have to pay the money back.

You don't, just put it on the country's tab

let the good times roll!

Hmmm, My mortgage is only 2x my single income (wife not working) I must be doing something wrong! :rolleyes:

321654

ntlbell wrote: »

AIB just range me and asked "are you ok for anything?" "new/re-mortgage? new car?"

the party is back on :D:D:D

They rang me this afternoon to ask how the house hunt was going. I told them im taking my time, but thanks for calling. He told me they could increase what i was offered if i was interested. I told him i might call him if i go ahead.

ntlbell

321654 wrote: »

They rang me this afternoon to ask how the house hunt was going. I told them im taking my time, but thanks for calling. He told me they could increase what i was offered if i was interested. I told him i might call him if i go ahead.

brian's cheque must have cleared

DublinWriter

ntlbell wrote: »

AIB just range me and asked "are you ok for anything?" "new/re-mortgage? new car?"

You should have said "Yeah...I'm a taxpayer...can I have my money back?"

321654

DublinWriter wrote: »

You should have said "Yeah...I'm a taxpayer...can I have my money back?"

Brilliant

Mr Benevolent

Jesus. I didn't expect they'd go back to their old ways so fast. Doesn't look good lads.

The Construction Industry Federation (CIF) has said that it will be closely monitoring whether the E7bn re-capitalisation of AIB and BOI frees up working capital for its members and results in an increase in mortgage lending.

Speaking at a CIF Breakfast Briefing on the short- and medium-term prospects for the construction industry, the Federation's Director General Tom Parlon said: "The real test of the re-capitalisation plan is whether or not it gets credit flowing again. CIF will be working with its members to closely monitor if the plan does what it is supposed to in terms of a resumption of normal lending in the economy. Working capital is vital if businesses are to survive. If the recapitalisation creates a flow of working capital for businesses, alongside increased lending to consumers, it will make a significant contribution to helping the economy ride out the current storm".

"Getting the banks lending to prospective house buyers again is vital for the economy. House prices have been cut by between 35-40pc and with interest rate cuts, houses are now more affordable than at anytime since 1997. When it is cheaper to buy a house than to build it you can be sure that you're looking at the bottom or very close to it. However, buyers aren't able to take advantage of this because of a lack of mortgage finance. The irony is that if this isn't addressed fears about bank exposure to property will become self-fulfilling".


http://www.fxcentre.com/news.asp?2361370

http://www.thepropertypin.com/viewtopic.php?f=4&t=18637

If this is anything to go by, we're expected to splash out on property.