Housing Bubble Bursting

Smoggy

Whats a secure job except for the civil service ? I dont think there is such a thing anymore. A job for life is none existant.

ronbyrne2005

http://www.sbpost.ie/post/pages/p/story.aspx-qqqt=NEWS-qqqs=news-qqqid=21320-qqqx=1.asp

More warnings.

jesus_thats_gre

Smoggy wrote:

Whats a secure job except for the civil service ? I dont think there is such a thing anymore. A job for life is none existant.

Unfortunately a very large percentage of those employed in the civil service are financed directly and indirectly by the construction industry and current housing boom. If the number of housing units being built each year is cut in half, massive pressure will be put on the goverments finances. There may just not be enough money there to pay the couple of thousand people that have been employed as civil servants in recent years.

Smoggy

So traditionally safe jobs aren't even safe. I work in IT which is a very unstable market at the best of times, but the company I work for his clients all around the world, which should keep them buoyant. I would hate to be a builder / chippie / plumber or anything that closely linked to the housing market.

Do-more

ronbyrne2005 wrote:

http://www.sbpost.ie/post/pages/p/story.aspx-qqqt=NEWS-qqqs=news-qqqid=21320-qqqx=1.asp

More warnings.

Sunday Business Post wrote:

‘‘The strong rate of expansion and the high market valuation of the housing stock point to the risk of a significant reversal at some point in the near future,”

The problems facing the Irish labour force in such a scenario could only be corrected by a significant number of recent immigrants choosing to leave the country, and job creation in sectors not connected to the construction industry, the group said.

‘‘Such a slowdown would also raise the demand for public support of unemployed foreign workers, putting pressure on the Irish welfare state,” the report said.

Warnings don't get much more stark than this. What they are saying in the report is very much inline with what has been discussed on this thread, except this time it's Senior economists in a well respected research institute that are saying it.

The gas thing is that many in the construction industry will be able to relocate to London to build the infrastructure for the Olympic Games (in the planning process currently) if they choose to do so and for them the good times will keep rolling on. It's those with indirect jobs or those who can't relocate who will be worst effected.

Just saw this on the property pin:

http://www.ireland.com/newspaper/property/2006/1005/1158591392487.html

http://82.195.132.30/app/property.asp?ID=716

for anyone who thinks Dublin is not immune to this

Smoggy

Still over priced at 370k in my opinion, you've got to be gutted if your the sucker that paid the full whack expecting the price to increase only to have 20k wiped off the value in the past few months.

SimpleSam06

TCollins wrote:

Galway is not the property or rental market that concerns us, so i dont know why you pulled that one out.

You never said where you were renting, so Galway would have done as well as Donegal or Dublin. If you wanted answers more specific to your situation, provide more information instead of leaving people guessing then calling them names like a peurile schoolchild when they don't guess your county right.

TCollins wrote:

I'm not sure you should even be commenting on rents and mortgages if you cant do simple maths.

Aha so you don't pay per calendar month. Again, you provide insufficient information, then abuse people for commenting on the information you give. Also, as I said, re-evaluate your rental agreement.

TCollins wrote:

Wrong again.
http://www.daft.ie/searchsale.daft?s%5Bcc_id%5D=c1&s%5Ba_id%5D%5B%5D=295&s%5Bmnb%5D=2&s%5Bmxb%5D=2&s%5Bmnp%5D=&s%5Bmxp%5D=&s%5Bpt_id%5D=1&s%5Bhouse_type%5D=&s%5Bmna%5D=&s%5Bmxa%5D=&search=Search+%BB&more=&tab=1&s%5Bsearch_type%5D=sale&s%5Btransport%5D=&s%5Badvanced%5D=&s%5Bprice_per_room%5D=
and many more on myhome.ie

Really. There are a grand total of five on Daft, out of 142, and thats at or under €350,000 not €360,000+ as you are picking out. And tiny little sheds they are too, or "cottages" as they are quaintly put.

TCollins wrote:

Oh, and you're wrong again. Last i looked i was living in Dublin too.

Nice of you to let that slip. :rolleyes:

TCollins wrote:

I think you'll find my sums on mortgage costs are also correct if you go back and check. I've actually got approval of that amount and thems the payments alright. But i suppose numbers arent your strong point. I dont need to waste time doing sums for you anyway, you wont believe them because you dont want to.

You can always tell a person has something to hide when they start hurling abuse from the get-go. I'm sure your mortgage numbers are accurate, you've no doubt researched them very carefully.

TCollins wrote:

I could start a family, fall ill or be otherwise incapacitated while renting too and to tell the truth i would much rather own my home if any of these things happened.

Really, so you would rather be saddled with one mother of a mortgage and be unable to move house while you are sick, and possibly face foreclosure than be able to move to a less salubrious address where you at least don't have the bailiffs beating down your door?

TCollins wrote:

Oh i do have to commute

See this is what happens when my crystal ball goes on the fritz. Or, alternately, when posters hint they work from home then claim they actually commute instead.

TCollins wrote:

I really do hope people on here take you with the pinch of salt that... blah blah i am trolling like its going out of fashion blah blah... you know absolutely nothing about.

TCollins wrote:

I am looking for replies to help me make up my mind for or against buying - you're just talking sh!te for the sake of it.

As for the rental price I suggest you look for a house built pre-2000, the landlord won't be jacking up the rent like a publican with his pints to match the interest rates.

Edit: I will say this though, in any situation where rent is considerably more than the interest portion on a mortgage, yes you should be buying not renting. In the situation with the two bedrooms in Dublin, for example, you could buy up a half dozen of them and have them rented out, with rent essentially paying the mortgage, as insane as that is in the current market. Also edited to remove morning grumpiness...

miju

jesus_thats_gre wrote:

There may just not be enough money there to pay the couple of thousand people that have been employed as civil servants in recent years.

of one thing i'll be almost certain of and thats the chances of this scenario even remotely happening which is nil

what more likey to happen is a return to a complete freeze on all hiring of new civil servants as occured back in the bad old days

also , speaking of swords area i've seen at least 6 asking prices drops in swords from 10k to 25k

chump

SimpleSam06 wrote:

You never said where you were renting, so Galway would have done as well as Donegal or Dublin. If you wanted answers more specific to your situation, provide more information instead of leaving people guessing then calling them names like a peurile schoolchild when they don't guess your county right.




Aha so you don't pay per calendar month. Again, you provide insufficient information, then abuse people for commenting on the information you give. Also, as I said, re-evaluate your rental agreement.


Really. There are a grand total of five on Daft, out of 142, and thats at or under €350,000 not €360,000+ as you are picking out. And tiny little sheds they are too, or "cottages" as they are quaintly put.


Nice of you to let that slip. :rolleyes:


You can always tell a person has something to hide when they start hurling abuse from the get-go. I'm sure your mortgage numbers are accurate, you've no doubt researched them very carefully.


Really, so you would rather be saddled with one mother of a mortgage and be unable to move house while you are sick, and possibly face foreclosure than be able to move to a less salubrious address where you at least don't have the bailiffs beating down your door?


See this is what happens when my crystal ball goes on the fritz. Or, alternately, when posters hint they work from home then claim they actually commute instead.




As for the rental price I suggest you look for a house built pre-2000, the landlord won't be jacking up the rent like a publican with his pints to match the interest rates.

Edit: I will say this though, in any situation where rent is considerably more than the interest portion on a mortgage, yes you should be buying not renting. In the situation with the two bedrooms in Dublin, for example, you could buy up a half dozen of them and have them rented out, with rent essentially paying the mortgage, as insane as that is in the current market. Also edited to remove morning grumpiness...

let it go - you jumped to conclusions and made yourself look the fool, be honest about it and put your hand up

TCollins

SimpleSam06 wrote:

You never said where you were renting, so Galway would have done as well as Donegal or Dublin. If you wanted answers more specific to your situation, provide more information instead of leaving people guessing then calling them names like a peurile schoolchild when they don't guess your county right.




Aha so you don't pay per calendar month. Again, you provide insufficient information, then abuse people for commenting on the information you give. Also, as I said, re-evaluate your rental agreement.


Really. There are a grand total of five on Daft, out of 142, and thats at or under €350,000 not €360,000+ as you are picking out. And tiny little sheds they are too, or "cottages" as they are quaintly put.


Nice of you to let that slip. :rolleyes:


You can always tell a person has something to hide when they start hurling abuse from the get-go. I'm sure your mortgage numbers are accurate, you've no doubt researched them very carefully.


Really, so you would rather be saddled with one mother of a mortgage and be unable to move house while you are sick, and possibly face foreclosure than be able to move to a less salubrious address where you at least don't have the bailiffs beating down your door?


See this is what happens when my crystal ball goes on the fritz. Or, alternately, when posters hint they work from home then claim they actually commute instead.




As for the rental price I suggest you look for a house built pre-2000, the landlord won't be jacking up the rent like a publican with his pints to match the interest rates.

Edit: I will say this though, in any situation where rent is considerably more than the interest portion on a mortgage, yes you should be buying not renting. In the situation with the two bedrooms in Dublin, for example, you could buy up a half dozen of them and have them rented out, with rent essentially paying the mortgage, as insane as that is in the current market. Also edited to remove morning grumpiness...

Oh calm down will you.
You really have made a fool of yourself here. Its so obvious you dont know the markets at all now, so just stop it. No amount of name calling and accusations can change that, so quit it.
Cant we all just be friends now.

Zambia

TCollins wrote:

Oh calm down will you.
You really have made a fool of yourself here. Its so obvious you dont know the markets at all now, so just stop it. No amount of name calling and accusations can change that, so quit it.
Cant we all just be friends now.

I have to agree with the general ,

Cantab.

profound parallels...

http://www.youtube.com/watch?v=vPttijISF2o

miju

anyone read the headline of the sunday indo today which cant do much for general sentiment:

houses seized as property crisis worsens

talks about an anecdotal 400% rise in repopssesions in the last year with a leading senior government advisor saying that theres currently 30-40 repossesion hearings per day in the circuit courts. he then goes on to say that there may be more however as the figures dont include banks only building societies and that banks tend to agree with mortgage holder to reposses house and rent it back to them. was a bit thin on the ground with backing up data as all data is 5 years old but still the headline in itself speaks volumes as to whats currently happening in the market as this wouldnt have been a headline seen in the papers during the last decade.

Smoggy

and where are these repossed houses sold at ? auction ?

miju

Smoggy wrote:

and where are these repossed houses sold at ? auction ?

didn't say in the article smoggy , but this is probably the most likely answer

miju wrote:

he then goes on to say that there may be more however as the figures dont include banks only building societies and that banks tend to agree with mortgage holder to reposses house and rent it back to them

miju

miju wrote:

was a bit thin on the ground with backing up data as all data is 5 years old but still the headline in itself speaks volumes

Absolutely not.
The Sindo has been on a very strong stamp duty mission since well before last year's budget, check out the archives on unison.ie

Today's article is lazy journalism at its worst, a front page story based on anecdotes!

Do-more

Deleted User wrote:

Today's article is lazy journalism at its worst, a front page story based on anecdotes!

Got to agree that it's a really sloppy piece for a front page story, but given the amount of money the Indo group makes from property adverts, it really marks a turning point in how the print media is reporting the property market.

Add this to the lead in today's Sunday Business Post and the piece on "The Last Word" radio show during the week and when we look back in the future we will probably mark the last week as a pivitol point in the Crash of '07.

is_that_so

miju wrote:

anyone read the headline of the sunday indo today which cant do much for general sentiment:

houses seized as property crisis worsens

talks about an anecdotal 400% rise in repopssesions in the last year with a leading senior government advisor saying that theres currently 30-40 repossesion hearings per day in the circuit courts. he then goes on to say that there may be more however as the figures dont include banks only building societies and that banks tend to agree with mortgage holder to reposses house and rent it back to them. was a bit thin on the ground with backing up data as all data is 5 years old but still the headline in itself speaks volumes as to whats currently happening in the market as this wouldnt have been a headline seen in the papers during the last decade.

Was wondering whether that piece of trash would show up and with respect it's a pity it has. Extremely poorly written piece and really has no place here, where there have been some well-presented arguments on both sides .

They even admit in the article that the numbers are "elusive".

Repossession have always been a last resort and banks tend not to want to get into them. They'd rather people talk to them.

delboy159

TCollins wrote:

Oh calm down will you.
You really have made a fool of yourself here. Its so obvious you dont know the markets at all now, so just stop it. No amount of name calling and accusations can change that, so quit it.
Cant we all just be friends now.

Your figures do seem spot on as far as rent V mortgage goes.. A very logical comparison whihc helps to justify purchasing. But the "assumptions" that SimpleSam06 made are based on a lot of general realities around the country. Where I just lived in Dublin - houses priced at 440k+ were renting for 1,200 p.m. - which is a much bigger mortgage than rent. Where I am now renting in Laois I have seen a house on sale for 480k (2,300 p.m. over 35 years) and 2 house (exactley the same) in the same estate are renting for 900 to 1k per month... Houses in the area priced at 260k rent for 700 p.m generally - which once again is a larger mort v rent

Those maths are petty typical. The numbers in Swords are surprising to me. I am actually surprised at the 1300pm for a 2 bed in swords, considering you can pay the same amunt for a 2 bed much closer to the city centre

SimpleSam06

chump wrote:

let it go - you jumped to conclusions and made yourself look the fool, be honest about it and put your hand up

TCollins wrote:

Oh calm down will you.
You really have made a fool of yourself here. Its so obvious you dont know the markets at all now, so just stop it. No amount of name calling and accusations can change that, so quit it.
Cant we all just be friends now.

Oh noes, people are calling me names on teh intarwebs, whatever will I do. The oul' passive aggression certainly beats answering any of my points, thats for sure. Saved by the chump?

delboy159 wrote:

But the "assumptions" that SimpleSam06 made are based on a lot of general realities around the country.

Yup, thanks. The numbers in Swords took me aback as well, but I guess most statistical distributions must have a long tail... handily cherry picked there, however.

ronbyrne2005

Houses in my estate only rent for around 1400euro when to buy one would cost 700-750k. The rent:mortgage ratios in Swords and many commuter towns and towns outside of Dublin seem much better than in Dublin city.

Victor

OK folks. Behave in a civilised fashion or go elsewhere.

SimpleSam06

Victor wrote:

OK folks. Behave in a civilised fashion or go elsewhere.

Not a bother. Its not unusual for feathers to get ruffled in debates about housing though, given the enormous amounts of money involved, as well as the large number of people it affects.

I saw a finfacts article there this morning that struck me as a little odd, but it was based on a permanent TSB report, so what can you expect really. The information that stands out is:

The rate of house price growth in the second half of the year (3.8%) was less than half the rate recorded in the first half (8.0%).

Fair enough, we all spotted that here.

The figures highlight that the rate of growth over the 12 month period (mid 2005 to mid 2006) was significantly out of line with the patterns which had been establishing themselves prior to that period. The experience of the second half of 2006 is more in keeping with the pattern of earlier periods.

This I don't understand. There was a pattern of declining rates of increase prior to 2005? I thought the only way was up? I mean thats how we have experienced a 300% rise in house prices over the last five or six years...

The average price paid for a house by a First Time Buyer stood at €279,003 at the end of December.

I really wish they would release different statistics for houses and apartments. This figure makes out that you can get yourself housed on average for €279k, so that means a lot of houses are being sold for less. It doesn't clarify exactly what that enormous sum of money will buy you. Developers can keep building smaller and smaller shoeboxes while leaving the prices the same, and the figures will look great.

ronbyrne2005 wrote:

The rent:mortgage ratios in Swords and many commuter towns and towns outside of Dublin seem much better than in Dublin city.

The Swords situation is fairly unique, I think, which is why it was cherry picked, no doubt. 99% of the country is as you describe, low rent:high mortgage. If the opposite was true, I'd be bullish myself!

Calina

Swords rental rose about 15% in the last few months due to a squeeze on supply. Even so, living there, I'm still pretty sure that for certain property types, rental is still lower than the corresponding interest portion of a mortgage payment, though.

I don't think that long term the rents in Swords being equal to/slightly higher than rents in the north city area (eg Santry/Whitehall) is sustainable. Property sales supply is up a lot in the same period as rental supply is down...interestingly one halved while the other doubled. There are four times as many properties for sale as there are for rent there at the moment which would strike me as unusual. Through most of last year it would have been roughly equal.

joemc99

The economy is at risk of an imminent and ‘‘very serious’’ slowdown due to high wages, an overdependence on construction and a potential collapse in consumer spending, a top European research agency will warn in a major report to be published this week.

The above is a quote from one of the doom reports. Surly if this happens, the interest rate will plummet too, aka 2000?

TCollins, you can look at it 3 ways....

- hold off, possibly save 30k
- hold off, possibly loose 30k
- Buy the gaf, pay your mortgage, be happy......will it really make a difference (save or loose) in 10 years?

conor_mc

joemc99 wrote:

The above is a quote from one of the doom reports. Surly if this happens, the interest rate will plummet too, aka 2000?

I simply can't believe you just said that..... why on earth would the European Central Bank adjust rates to satisfy a blip on their economic radar when the powerhouses in Europe are growing stronger by the day?

The simple fact is that we don't matter anymore, German-France-Italy is what matters when rates are being set by the ECB.

whizzbang

joemc99 wrote:

The above is a quote from one of the doom reports. Surly if this happens, the interest rate will plummet too, aka 2000?

TCollins, you can look at it 3 ways....

- hold off, possibly save 30k
- hold off, possibly loose 30k
- Buy the gaf, pay your mortgage, be happy......will it really make a difference (save or loose) in 10 years?

erm... the ECB controls the rates, not the Irish government, if Ireland goes into a tail spin, the ECB won't care, are are only 0.6% of the European population! They may even make an example of us and say "this is what happens if the central banks of each country don't manage their loans properly"

Calina

joemc99 wrote:

The above is a quote from one of the doom reports. Surly if this happens, the interest rate will plummet too, aka 2000?

Well it's not quite that simple. The interest rate is set by the ECB whose primary remit is Europe wide inflation. They don't care so much about our little asset bubble here. If inflation and growth across Europe as a whole are in rude health - which they are - the general trend for interest rates is up, not down, regardless of a housing crash and associated economic meltdown here. The low interest rates that we've had for the last while are indirectly as a result of FedRes behaviour in the US - they went down to historically low interest rates (and now, incidentally, have a property crash in full bloom) and because of the impact that had on trade, Europe followed. In theory, at the time that we had an asset bubble growing, the logical reaction should have been to raise interest rates all along the last five or six years. We couldn't because the rest of Europe was in recession.

However, interest rates aren't the only problem here. The big, big issue in Ireland was dilution of lending criteria and banks lending more and more money out. They did this by switching away from salary criteria to affordability criteria which mightn't have mattered if interest rates were average-ish between 5 and 6%. But they weren't. They were historically low.

It wasn't enough. So they started extending the terms of mortgages as well. The net result is there is going to be quite a bit of pain when the circle comes around. Pretty much no economy escapes a downturn for long and more and more of our economic growth is based on debt rather than actual productivity. That's going to cost us.

The_Conductor

joemc99 wrote:

The above is a quote from one of the doom reports. Surly if this happens, the interest rate will plummet too, aka 2000??

You are assuming that we have control over our interest rates, we don't...... Rates are set to meet the needs of the larger EU economies (France, Germany, Italy) not small minnows such as ourselves.......