Housing Bubble Bursting

soma

Deleted User wrote:

http://irishpropertywatch.5gbfree.com/ipw_daft_report1_200307.html

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FOUR HUNDRED AND TWENTY TWO PRICE DROPS

Just to wrap that in some context - it's 422 price drops over a 7-day period last week on www.daft.ie only.

whizzbang

Its going to be really interesting to see if these numbers increase or decrease each week! I think it will be the closest thing there is to real time sentiment report.

Any possibility of reporting the increases as well Soma? Would give a clearer picture. That being said I think asking prices are not increased that much, once there is enough interest to justify an increase sellers just let a bidding war take over and take the highest bid.

tHE vAGGABOND

Any possibility of reporting the increases as well Soma?

How would you know about increases tho?

I know of two apartments for sale in town which I was interested in, and both are listed at 370k on myhome and daft - and one went sale agreed at 395 yesterday and the other went sale agreed at 400 late Friday..

But they are still listed at 370 online, so if he was to report increases he would need to work full time ringing estate agents for each place, which would take take a while

whizzbang

tHE vAGGABOND wrote:

How would you know about increases tho?

I know of two apartments for sale in town which I was interested in, and both are listed at 370k on myhome and daft - and one went sale agreed at 395 yesterday and the other went sale agreed at 400 late Friday..

But they are still listed at 370 online, so if he was to report increases he would need to work full time ringing estate agents for each place, which would take take a while

I was referring to increases in asking prices as they are the only thing available on line! But as we know asking prices are unlikely to be increased as if there is a lot of interest there will just be a bidding war and they won't bother upping the asking price. If there is little interest they will lower the asking price as we see here.

I'm just trying to pre-empt any doubters who say "You don't record price increases"

soma

tHE vAGGABOND wrote:

How would you know about increases tho?

I know of two apartments for sale in town which I was interested in, and both are listed at 370k on myhome and daft - and one went sale agreed at 395 yesterday and the other went sale agreed at 400 late Friday..

But they are still listed at 370 online, so if he was to report increases he would need to work full time ringing estate agents for each place, which would take take a while

This is pretty much my take on the situation

mambo

Listen to an estate agent try to explain that the seller offering to pay the buyer's mortgage for the first 6 months is not really a discount on the property, and does not affect the "value" of the property :eek:

Click on "Live free for six months?" at
http://www.rte.ie/news/2007/0320/drivetime.html

Padraig Mor

Surprised not to see anyone mention the Sunday Times lead headline at the weekend - "10 year house price boom is over". referred in the article to a soft landing being highly unlikely. Article was based on DAFT figures and was the "first indication" of something up in the market :rolleyes:

KingKenny7

Padraig Mor wrote:

Surprised not to see anyone mention the Sunday Times lead headline at the weekend - "10 year house price boom is over". referred in the article to a soft landing being highly unlikely. Article was based on DAFT figures and was the "first indication" of something up in the market :rolleyes:

What did they say??? No soft landing, so would it be a controlled crash? Of a full blown crash?

soma

Padraig Mor wrote:

Surprised not to see anyone mention the Sunday Times lead headline at the weekend - "10 year house price boom is over". referred in the article to a soft landing being highly unlikely.

The front cover of their Property supplement was a Grave stone.

KingKenny7

So everything is ok then lol.

Poor speculators, feel so sorry for them......

whizzbang

soma wrote:

The front cover of their Property supplement was a Grave stone.

That was a little sensationalist wasn't it? Still the figures on the inside were revealing! Has anyone found an online version of this? I can't find it!

whizzbang

mambo wrote:

Listen to an estate agent try to explain that the seller offering to pay the buyer's mortgage for the first 6 months is not really a discount on the property, and does not affect the "value" of the property :eek:

Click on "Live free for six months?" at
http://www.rte.ie/news/2007/0320/drivetime.html

That is pure comedy gold!

"The value of the house is not in question"... we just want to give you back 10 grand when you buy it...

Mary Willson the interviewer seemed to be seconds away from saying "What's wrong with you? Do you actually believe what you are saying?"...

KingKenny7

that was on the last word a month back. Very funny too

DaBreno

Whats peoples view on the stamp duty issue regarding current prices? FG seemed to have pushed this back onto the agenda as an election issue. If it was dropped, would it start pushing the price of houses up again?

Zambia

Nice job on the report once again Soma

There must be something fierce wrong to have a drop of 152,000 approx on the Dundalk house. Unless there is pure gold taps and endangered animal fur carpets the estate agent must have been blind drunk 427,500 for a three bed in Dundalk with 1 Bathroom on the first valuation.

You could buy a three bed for less in Dublin for less pre any price drops

I heard about the atrticle in the Sunday Indo and it did seem a little dramatic. Would have liked to see it.

KingKenny7

Zambia232 wrote:

Nice job on the report once again Soma

There must be something fierce wrong to have a drop of 152,000 approx on the Dundalk house. Unless there is pure gold taps and endangered animal fur carpets the estate agent must have been blind drunk 427,500 for a three bed in Dundalk with 1 Bathroom on the first valuation.

You could buy a three bed for less in Dublin for less pre any price drops

I heard about the atrticle in the Sunday Indo and it did seem a little dramatic. Would have liked to see it.

was it the indo or the times???

Zambia

KingKenny7 wrote:

was it the indo or the times???

Sorry my bad Times

soma

Zambia232 wrote:

There must be something fierce wrong to have a drop of 152,000 approx on the Dundalk house. Unless there is pure gold taps and endangered animal fur carpets the estate agent must have been blind drunk 427,500 for a three bed in Dundalk with 1 Bathroom on the first valuation.

Well as I was saying in the blurb accompanying the report - I actually suspect that it's not an accurate price drop. I'd say the Estate Agent mis-typed either the original or new price.

The_Conductor

DaBreno wrote:

Whats peoples view on the stamp duty issue regarding current prices? FG seemed to have pushed this back onto the agenda as an election issue. If it was dropped, would it start pushing the price of houses up again?

Given what appears to be an oversupply in all market segments, and the fact that affordability as an index doesn't seem to exist- I would hazard a guess that reformation of stamp duty would simply provide a temporary support to the market, until such time as those who the extra 20-40k was an issue to buying were no longer active in the market (possibly weeks rather than months).

So- initially the money would go to developers (to a certain extent, given that they are already taking the lions share of the purchase price), but this would revert to the buyer as the temporary support to the market unravelled.

At the end of the day, it would be better for buyers, and a massive leakage in funds for the Revenue Commissioners.

A point of note is that if property prices are actually falling, the assistance to the buyer offered by the reduction in stamp duty will be eroded, as their equity depreciates in value. Sooo- its entirely possible that irrespective of whether stamp duty is reformed or not, buyers (and indeed any current property owners) will be worse off when physical assets are measured, possibly in a matter of weeks rather than months......

Stamp duty should be reformed, as its original purpose was to reflect costs associated with the registration of property deeds, not as a money spinner for the Revenue Commissioners. For that purpose alone it is in urgent need of reform. To equate the reform with a helping hand towards first-time buyers or those trading up, is a misnomer. At the end of the day a house is not a liquid asset, cash into your hand is. When you purchase a house you are purchasing an illiquid asset that is currently depreciating in value. The illogical purchase price of this asset is correcting itself. Assisting it in staying at illogical levels on a temporary basis, is simply postponing the inevitable.

Caveat emptor- buyer beware. If anyone is seriously expecting their house to appreciate in value in the short term at present- they are self-delusional.

Reform of stamp-duty would make an excellent time for banks to factor this into their lending policies. Bets on whether we see 110% mortgages anyone?

Zambia

soma wrote:

Well as I was saying in the blurb accompanying the report - I actually suspect that it's not an accurate price drop. I'd say the Estate Agent mis-typed either the original or new price.

I would say so , reckon the vendor was well pleased when they saw it first

ronbyrne2005

DaBreno wrote:

Whats peoples view on the stamp duty issue regarding current prices? FG seemed to have pushed this back onto the agenda as an election issue. If it was dropped, would it start pushing the price of houses up again?

Stamp duty is not as important an issue in current housing market as media implies. http://www.thepropertypin.com/forum/viewtopic.php?t=1102

whizzbang

ronbyrne2005 wrote:

Stamp duty is not as important an issue in current housing market as media implies. http://www.thepropertypin.com/forum/viewtopic.php?t=1102

I'm not sure the pin is a usual cross section of public opinion! I've heard a few commentators in the media talk about it as an issue, especially the FG promises to reform it. The more the media talk about it the bigger an issue it will be I guess!

Has anyone heard the general public mentioning it? I think most people are reluctant to believe it following the lack of reforms in the last budget?

KingKenny7

Its sad but the majority of the public don't know if this would be good or bad. I;ve spoken to people have house prices falling and shown proof to others. Some say its not falling, others say I'm broke when they hear it is (they bought houses).

So they dont know whats good or bad, Irish people have been following like sheep for the past 400 years. The only bit of sense I get are from people on this board and the one or two in work.

whizzbang

KingKenny7 wrote:

Its sad but the majority of the public don't know if this would be good or bad. I;ve spoken to people have house prices falling and shown proof to others. Some say its not falling, others say I'm broke when they hear it is (they bought houses).

So they dont know whats good or bad, Irish people have been following like sheep for the past 400 years. The only bit of sense I get are from people on this board and the one or two in work.

I think a lot of people will be in denial until them or someone they know has to sell their house for "less than its worth". I think this will have a serious effect on public sentiment, people will feel like they lost 50k on their house even if they are still sitting on a huge profit.

I wouldn't be surprised if we saw a lot of rationalising the drops "That apartment is north facing so they got less than we would get", "That house is near the main road so it got less because of the noise", "That flat was cursed by gypsies so they got less than its worth"...

eirmail

whizzbang wrote:

I think a lot of people will be in denial until them or someone they know has to sell their house for "less than its worth". I think this will have a serious effect on public sentiment, people will feel like they lost 50k on their house even if they are still sitting on a huge profit.

I wouldn't be surprised if we saw a lot of rationalising the drops "That apartment is north facing so they got less than we would get", "That house is near the main road so it got less because of the noise", "That flat was cursed by gypsies so they got less than its worth"...

That property is going down in value which is why they got less than we would, as our property is going up in value.

Zambia

eirmail wrote:

That property is going down in value which is why they got less than we would, as our property is going up in value.

True

Personnaly I think its a good thing people considered themselves far too rich as there property was worth xxxxxx

Whereas in reality Tesco, Dunnes , etc do not take bricks for payment...

tHE vAGGABOND

Stamp duty is not as important an issue in current housing market as media implies. http://www.thepropertypin.com/forum/...pic.php?t=1102

I disagree. Like every election issue some things are important to some folks and some are important to others. I could not give monkeys about old people and care for them, for example. I don’t really care about crime, as I have never been affected by it in Dublin.

But stamp duty and the education of my nieces and nephews are the very important election issues to me.

Now if I got a thread on boards together of people who agree with that, which does not mean they are not big issues for the public at large

Anyway, regarding stamp duty.

I’m in the market to buy right now. I’m looking in the city center, as I don’t drive for medical reasons. I’m spending every penny I have ever saved, and have agreement in principal for a decent amount. I’m not a speculator, I’m not rich. I’m spending every penny I have now, [and will have for a while!] on a new place to live in for years and years and years. I therefore object to having to spend such a massive amount of money in stamp duty, as its money out of my pocket I cant really afford. Here is a real word example from just last week..

I was looking at a nice 2 bed apartment on the south quays; it was listed at 370k. That would mean circa 11k stamp duty [3%]. When I saw it, the place had a standing offer of 380k; again, stamp duty is not far over 11 grand. I think this figure is too high for a first time buyer. I think it’s just plain unfair to expect someone to pay so much for basically nothing.

Now this place went sale agreed the other day at 385k, now that jumps into the next stamp duty bracket [6%], which means the duty is just over 23k. It’s crazy that the duty more than doubles, for the sake of a few grand extra in the sale price. I sound like a right moaner, but I think 23 grand for a medium size 2 bed apartment is just insane [but there are different issues there!].

I think that it is plain unfair to expect a first time buyer to pay such a gigantic amount of money. I think people who can afford it, with multiple places should be made pay more of the burden tbh, they can afford it! I’m not in this for money; I want a place to live in the city center so I can live and work and not spend my life at a bus stop

[The place is now at 395k BTW, which is just under 24 grand stamp duty]

I dunno, maybe the people on that forum you link to are not first time buyers, or have not paid a massive amount of 'dead' stamp duty money in the recent past. But all my real life friends and work mates talk about this issue all the time [some ftb's and some people with multiple places].

My mum actually challenged Alan Shatter about it, when he called to our gaff a few weeks ago canvassing and he says that and the health service are the two things he is getting most from people on door steps. I would say that is why it’s a big issue for the parties, normal people are p1ssed off about it.

babytooth

tHE vAGGABOND wrote:

I disagree. Like every election issue some things are important to some folks and some are important to others. I could not give monkeys about old people and care for them, for example. I don’t really care about crime, as I have never been affected by it in Dublin.

But stamp duty and the education of my nieces and nephews are the very important election issues to me.

Now if I got a thread on boards together of people who agree with that, which does not mean they are not big issues for the public at large

Anyway, regarding stamp duty.

I’m in the market to buy right now. I’m looking in the city center, as I don’t drive for medical reasons. I’m spending every penny I have ever saved, and have agreement in principal for a decent amount. I’m not a speculator, I’m not rich. I’m spending every penny I have now, [and will have for a while!] on a new place to live in for years and years and years. I therefore object to having to spend such a massive amount of money in stamp duty, as its money out of my pocket I cant really afford. Here is a real word example from just last week..

I was looking at a nice 2 bed apartment on the south quays; it was listed at 370k. That would mean circa 11k stamp duty [3%]. When I saw it, the place had a standing offer of 380k; again, stamp duty is not far over 11 grand. I think this figure is too high for a first time buyer. I think it’s just plain unfair to expect someone to pay so much for basically nothing.

Now this place went sale agreed the other day at 385k, now that jumps into the next stamp duty bracket [6%], which means the duty is just over 23k. It’s crazy that the duty more than doubles, for the sake of a few grand extra in the sale price. I sound like a right moaner, but I think 23 grand for a medium size 2 bed apartment is just insane [but there are different issues there!].

I think that it is plain unfair to expect a first time buyer to pay such a gigantic amount of money. I think people who can afford it, with multiple places should be made pay more of the burden tbh, they can afford it! I’m not in this for money; I want a place to live in the city center so I can live and work and not spend my life at a bus stop

[The place is now at 395k BTW, which is just under 24 grand stamp duty]

I dunno, maybe the people on that forum you link to are not first time buyers, or have not paid a massive amount of 'dead' stamp duty money in the recent past. But all my real life friends and work mates talk about this issue all the time [some ftb's and some people with multiple places].

My mum actually challenged Alan Shatter about it, when he called to our gaff a few weeks ago canvassing and he says that and the health service are the two things he is getting most from people on door steps. I would say that is why it’s a big issue for the parties, normal people are p1ssed off about it.

in total agreement with you as are most of my friends and piers.
Stamp duty at these levels is a disgrace, nothing more or less. It causes huge distortions in th emarketplace, pushing ppl into new estates.

I mean, we all have wider world experience these days what with internet capabilites to express opinion, as well as cheap air travel, we all know whats on offer in other countries...

A large number of my peers, who would be high rate taxpayers working in the governments "high value added" areas are seriously consdiering, in the process or have already moved to places such as boston, melbourne, munich, london, new york etc....as the standard of living is far superior. Why willingly stay to endure ****e standards, all countires will take us with out earning ability and demand for our professions....so i figure vote with our feet and let the incumbent civil service sort it all out...

SkepticOne

Abolishing stamp duty would only cause prices to increase by the amount otherwise spent on stamp duty thus cancelling out any benefit to the buyer.

It is more of benefit to the seller rather than the buyer. This is why politicians in some parties are promising its reform.

clarkwgriswold

Stamp duty exists in many other old EU countries at rates of up to 14%. Its really only in the UK that its quite low. Many posters go on about it as if its an exclusively Irish tax.
Need I mention again that if it were abolished that prices would only go up by the exact same amount. Surely its better to pay a cut to the state than to a vendor.
Perhaps there is room for some reform but abolition......no. Where would the state look to recoup the 3bn loss? Which hospital would you close or motorway would you not build?