Housing Bubble Bursting

jobless

warrenaldo wrote:

Lads, personally im hoping the arse falls out of the market as i am a first time buyer who is waiting and saving because i cant afford a place yet. im on the affordable housing list. but would prefer to buy.

Anyway a lot of people here seem to think a crash is 1)happening 2)nealy happening.

Prices have fallen - even from my own pint of view over the last 6 months the same properties that i was looking at have gone down from about 317k to less than 300k for some of the similar properties.

But i have think that this is only because of interest rates increasing. I think every time they raise interest rates people can get a little less of a mortgage. so they are dropping by that amount.

I think that maybe the market has only dropped by the amount increased via the ECB rates.

I also think it has peaked but i think at the moment and forseeable future it will be steady. ie if the ECB rates hadnt of changed then there would have been no drop in house prices - only steadiness.

Just a thought - but id be interested to get feedback on it. and hopefully realise im wrong and the market is falling :-)
cheers

its true what you say about the rate rises meaning people can borrow less....i think rates will keep rising with one in June and maybe one more after that.
its just that with so much speculation in the market over the last few years, once price rises stop investors are going to try to cash in their chips (seeing as rents dont cover the average mortgage these days, why would they hold onto the house if it wasnt increasing).
I think we are seeing this at the moment with the increased inventory on daft.... 4 times what it was last year!!. Houses are taking a lot longer to sell so to some extent i think there may be a stand off between buyer and seller... but prices are dropping

Pa ElGrande

Here is an earlier post from Pa ElGrande

Pa ElGrande wrote:

With over €2 billion a month being pumped into construction thats where the money currently is and while the banks are more than willing to finance these €400 million deals, then there is very little risk to the developers. I am also aware of several people who are divesting of their entire property portfolio at the moment and have been since 2006 and it has also been commented by Merrill Lynch that more Irish people are cashing out of property for other investment oppertunities.

Did you know that the birth rate in Ireland peaked over 27 years ago in 1980, it fell dramatically after that, watch the numbers sitting the leaving certificate to get an idea of the number of first time buyers entering the market. The average age of the first time buyer is 32. In the age group 22 to 32 (the next 10 years of first time buyers) according to the CSO there are approximately 690,000 people.
In 2006 we will have built approx. 90,000 units. Immigration is still positive in 2006, Irish Mortgage Corporation (Hooke & McDonald) estimated that 18.5% of their clients are non-national, so extrapolating from the first time buyer mortgage draw downs this would imply there were at most 7,000 non-nationals buying property last year.

Did you know that just over 40% of the mortgages for new property drawn down last year were for Residential Investment Lettings? That indicates a huge level of speculation in the market since the rental yield has been falling to under 3%. (Yields started to pick up in the latter half of 2006 in Dublin). Yet despite strong immigration and population growth, the Central statistics office found 275,000 empty properties accross the country in April 2006. This indicates a huge level of speculation based on the expectation of capital gains in the market, and indeed house price inflation has nominally been about 14 percent per annum in nominal terms. In Europe we also have the highest level of employment in construction as a percentage of the workforce and its estimated 100,000 of those working in the sector will need to seek alternative employment over the next 10 years.

Without a doubt the current population trend for Ireland is upward, but the problem is we are building at a rate that is ahead of the population increase. A correction in inevitable.

We are not behaving any differently to any other country that has experienced a housing bubble. Ours was first underpinned by population and employment growth and supply shortage as well as foreign direct investment but post 2001 its been sustained by exceptionally low interest rates, easing of lending criteria, and speculation aided by tax breaks.
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.

This is funny!!
About the British property slump!


http://www.youtube.com/watch?v=2t8YTvdYXws

h0stn0tf0und

http://www.youtube.com/watch?v=2t8YTvdYXws

Very funny. I can remember relations coming home to Ireland around this time and they couldnt sell their house for love nor money. They just wanted rid of the place and priced it at the bottom of the market, it still took ages to shift.

Gotta Love this comment

flamins (3 months ago)
... The "problem" with the market today is that the prices keep going up. There's no danger of any negative equity now!

:eek: I dont know how many times I've heard this from 23 - 33 year olds. Ignorance coupled with fleeting arrogance will cost many people in this country dearly.

The bubble bursting, like many other crashes, is a self fulfilling prophecy.

mad m

Is this a first,same house on myhome, but with different agents...Who gets to sell it first?

The first one and forth one are same but different EA ..Link

Smoggy

Link goes to the search page.

Zambia

mad m wrote:

Is this a first,same house on myhome, but with different agents...Who gets to sell it first?

The first one and forth one are same but different EA ..Link

I thought that was not allowed ?

mad m

Smoggy wrote:

Link goes to the search page.

Oops,sorry...Try south dublin,perrystown...Look at first house then forth.

The inventory on Daft.

daveirl

This post has been deleted.

Smoggy

and whens the Spring Selling Season !?!?!

massplanck

Smoggy wrote:

and whens the Spring Selling Season !?!?!

2010!!

massplanck

House next door to me in Limerick has been for sale for the last 7 months at 260,000. After 7 months of feck all interest (i have only seen two groups of viewings over that space of time) they have decided that the house is now worth 265,000.

idiots!

nxbyveromdwjpg

mad m wrote:

Is this a first,same house on myhome, but with different agents...Who gets to sell it first?

The first one and forth one are same but different EA ..Link

Theres nothing special about that. Happens all the time, always has.

mad m

nm wrote:

Theres nothing special about that. Happens all the time, always has.

Really? Can you link to others? Its the first time I've seen anything like this and I was looking for a while and came within an inch of selling,but decided not to. I also went to view the house I linked to and waited outside for EA to arrive. I then rang him to say we were waiting. He told me his partners car was lifted in town and he was on his way to pound to free it. I rearranged an appointment next day and was waiting again and EA never showed for second time... At the time the house was €635 asking...Then it went down to €600 and now its at €570k.

Makes me laugh now! Thank god his partner got his car lifted

Smoggy

An estate agent like that wont last in a tight market. I would organise to view a place on his books that is miles away from his office and then not turn up.

But i'm just evil and have a major dislike for people with no manners.

Gurgle

Smoggy wrote:

An estate agent like that wont last in a tight market. I would organise to view a place on his books that is miles away from his office and then not turn up.

But i'm just evil and have a major dislike for people with no manners.

Hehe.

I sort of pity the 80% of estate agents that will find themselves unemployed in the next year or 2.

Only a little bit though, the gouging bastards have made more money for less work than anyone else profiteering from the boom.

luckat

House price drops - some of these are cuts of as much as €150,000!

http://irishpropertywatch.5gbfree.com/report_myhome_050307.html

aphex™

luckat wrote:

House price drops - some of these are cuts of as much as €150,000!

http://irishpropertywatch.5gbfree.com/report_myhome_050307.html

Some are as much as €550,000. Look at Rathgar and Dun Laoghaire.

soma

luckat wrote:

House price drops - some of these are cuts of as much as €150,000!

http://irishpropertywatch.5gbfree.com/report_myhome_050307.html

Please note that in that first IrishPropertyWatch report, the analysis tool was fooled by one or two 'new build' listings.

However the new IPW report (418 drops on myhome.ie over six days) is out here: http://www.irishpropertywatch.com and hopefully contains fewer glitches.

Iristxo

Alright, property crash in full swing now me-thinks. I live in a v nice part of Dublin South... have been monitoring the property market for years... 3 bed-semis never fare less than 595 here... till now. Some are down to 535 and had been previously dropped from 595 to 565. I kid you not...

Oh well. What goes up must come down I suppose.

jobless

Iristxo wrote:

Alright, property crash in full swing now me-thinks. I live in a v nice part of Dublin South... have been monitoring the property market for years... 3 bed-semis never fair less than 595 here... till now. Some are down to 535 and had been previously dropped from 595 to 565. I kid you not...

Oh well. What goes up must come down I suppose.

what part of dublin?

Zambia

Iristxo wrote:

Alright, property crash in full swing now me-thinks. I live in a v nice part of Dublin South... have been monitoring the property market for years... 3 bed-semis never fair less than 595 here... till now. Some are down to 535 and had been previously dropped from 595 to 565. I kid you not...

Oh well. What goes up must come down I suppose.

Yes I would like to see a link here, no offence

jimmycrackcorm

If stamp duty rules were to be changed some time this year - I wonder what effect that will have on the market.

jobless

jimmycrackcorm wrote:

If stamp duty rules were to be changed some time this year - I wonder what effect that will have on the market.

cant see it happening to be honest......the government coffers would be empty then.....stamp duty is too much of a cash cow for them....

mikemac

I’ve been following this thread a long while-first post
I’d concur with most people’s views here and would be pretty bearish on the whole property scene.

But I’ve done a small bit of research as after all, the future of the housing market is decided not by us on an internet forum but the people we see everyday.

I’ve sampled the 10 people on my team who sit around me. This isn’t scientific so don’t rubbish it.
Most are your typical first time buyer
Average age around 26
Professional Job
Average Income: over €40-50k Possibly more

4 have bought houses/apartments in the past 3 months (3 in Dublin City and 1 in Balbriggan, commuter land).
All are very optimistic and have all the “can’t lose with property” and “rent is dead money” ideas.

1 is moving into a 2 bed apartment near Christchurch, Dublin which will be completed soon.It was bought in the first phase a year ago and I’m told the value has gone up 100k.Don’t know if this is true or not but obviously this guy is delighted at his financial windfall.

1 inherited their home in South County Dublin and is buying an apartment in the Algarve.

1 is viewing apartments and can't believe you can buy a property for under asking price. Reckon they'll get a bargain.

The remaining 3 of us are more than happy to pay reasonable (but I’m not saying cheap) rent to live in decent areas around the city.
(Rathmines, Drumcondra, etc). Of this only 2 are bearish and convinced the property market is heading down.
Remaining 1 have no opinion

Conclusion:
70% Think you can’t lose with property
20% Think the game is long over
10% No opinion

It ain’t scientific-draw your conclusions

Edit: My figures are now correct

jobless

micmclo wrote:

1 is viewing apartments and can't believe you can buy a property for under asking price. Reckon they'll get a bargain.

let me get this straight... he's knows that prices are coming down but is still looking around for somewhere?... does he think theyll stop coming down once he's bought?....maybe you should point the fact out to him that they may...

It doesnt make sense unless he has to buy

ronbyrne2005

micmclo wrote:

I’ve been following this thread a long while-first post
I’d concur with most people’s views here and would be pretty bearish on the whole property scene.

But I’ve done a small bit of research as after all, the future of the housing market is decided not by us on an internet forum but the people we see everyday.

I’ve sampled the 10 people on my team who sit around me. This isn’t scientific so don’t rubbish it.
Most are your typical first time buyer
Average age around 26
Professional Job
Average Income: over €40-50k Possibly more

4 have bought houses/apartments in the past 3 months (3 in Dublin City and 1 in Balbriggan, commuter land).
All are very optimistic and have all the “can’t lose with property” and “rent is dead money” ideas.

1 is moving into a 2 bed apartment near Christchurch, Dublin which will be completed soon.It was bought in the first phase a year ago and I’m told the value has gone up 100k.Don’t know if this is true or not but obviously this guy is delighted at his financial windfall.

1 inherited their home in South County Dublin and is buying an apartment in the Algarve.

1 is viewing apartments and can't believe you can buy a property for under asking price. Reckon they'll get a bargain.

The remaining 3 of us are more than happy to pay reasonable (but I’m not saying cheap) rent to live in decent areas around the city.
(Rathmines, Drumcondra, etc). Of this only 2 are bearish and convinced the property market is heading down.
Remaining 1 have no opinion

Conclusion:
70% Think you can’t lose with property
20% Think the game is long over
10% No opinion

It ain’t scientific-draw your conclusions

Edit: My figures are now correct

Young professionals on well above average wages would be more optimistic having no experience of a downward property market/economy. When they have a few kids we'll see how they feel about property being affordable/reasonable. Ask them why do they think rent is less than half the mortgage on an identical property? Prices are clearly falling, why buy in a falling market?

Borzoi

soma wrote:

Please note that in that first IrishPropertyWatch report, the analysis tool was fooled by one or two 'new build' listings.

However the new IPW report (418 drops on myhome.ie over six days) is out here: http://www.irishpropertywatch.com and hopefully contains fewer glitches.

That's 418 drops in how many listings? I'd guess 50,000 plus, so that's 1% of houses drops.

Then there is the fact the most of the drops are within 10% of the original sale price, which having dealt with estsate agents is well within thoeir margin of error. This would be more illuminating if there was results from last year or two years ago to compare with

Thirdly, agan some EA's have been taking the price for a similar property sold recently adding 5-10% and using that as the sales price. In a market that is levelling out, that will result in properties being over valued, and could explain some of the 'reductions'

I'm not sure what way the whole thing will develop, ATM it seems to me not as bouyant as, say last year, but I don't beleive that there are any major reversals in property values. If rates change significantly, well all bets are off

mikemac

jobless wrote:

let me get this straight... he's knows that prices are coming down but is still looking around for somewhere?... does he think theyll stop coming down once he's bought?....maybe you should point the fact out to him that they may...

It doesnt make sense unless he has to buy

Maybe not everyone is as well informed as the posters in this thread.
I almost laughed when I heard this being said by them. It's actually one of the girls in the office.

I find this thread very interesting and backs up my own beliefs.
I'm not going to offer people advice though, they can make their own decisions and I'm no expert