Housing Bubble Bursting

megadodge

As for gearing and investment , I would put my 10% of an Irish house or flat into a targeted and diverse property fund instead.

I agree 100%.

Which is why I posted the following earlier...

Most clued-in investors wouldn't be looking at investing somewhere with only a 5% projected value increase anyway. Plenty of excellent opportunities abroad if you do your homework.

My previous posts were merely "simplistic examples for explanatory purposes"
to counter some serious misinformation being bandied around by miju.

Calina

A striking change in many of the new properties which have been built in the past few years is signficantly less and less storage place. Having looked at a lot of one and two bedroomed apartments in the last few years, I have to say that even for a single person, none of them are a long term option if you have any hobbies at at, any clothes, any sports equipment. There is just practically nowhere to store stuff in the vaunted more suitable accommodation for single person.

Me personally, single person, I want a 3 bedroomed house for the reason of storage issues.

miju

found this great little synopsis while fluting about google of the Irish market from Aug 2006 from Bank of Ireland full of facts , figures and historic data with a quick prediction of interest rates by ECB , that aside it's a nice concise little document for easy reference

Kipperhell

Sponge Bob wrote:

In the UK the number of FTBs with interest only mortgages has gone from 6% etc..."

WE aren't talking about the UK so not much point in posting about it.

Sponge Bob wrote:

In Ireland its 20% of the whole market (not the same I know ) in 2006

You said a large portion of FTBs were on interest only mortgages nothing you posted says that. You seem to be interchagning 100% mortgage and interest only at will. THey aren't the same and I beleive they are mutually exclusive but am willing to be corrected if you can get both at the same time as FTB, can you? Again using the term "whole market" when it is not

Sponge Bob wrote:

"Property Ladder" a post millenial marketing term to get young poeple to accept shoeboxes as their first purchase .
true, most started by buying a house they could live in for 25 years...and often did so . There was a thing called the "Starter Home" in my youth but no "Ladder" as such. Remember the Starter Home anyone ???

I must be older than you because I remember this stuff from the 80s. Moving from a starter home upwards has always been refered to as moving up the property ladder. As I said whether the term existed or not the practice has been in place a long time. I consider it a economic term and nothing to do with marketing and have never really heard it in marketing terms.

Sponge Bob wrote:

Let me clarify then because I was wrong to leave that impression and thanks for pulling me up on it . Historically you are correct of course. 40% of property in Ireland is not owned by investors but some 40% of post 2000 construction is.

Again that is incorrect 40% of property bought post 2000 not "post 2000 construction". Factually not historically BTW.

Sponge Bob wrote:

I am interested in who owns the excess inventory of empty property in Ireland which has built up since 2000.etc...

You keep mixing up details together. The figures when looked at will show there is an increase in empty property but has to be compared with the historical data. Generally Ireland runs at 10-15% vacant property so there is a mild increase during a building boom big deal. Your speculation on why it is vacant doesn't make it fact. While property built there is a delay in people moving in and so forth. 100,000 (this figure is also a little doubtful it isn't from the census) property accross the population and country is quite small. There is also an increase in the age people leave home so that can eaily be absorbed. You are trying to say there is an increase in supply and none in demand. Do you think demand has diminished or just affordability has put it out of reach? That is what I think has happened

Sponge Bob wrote:

Also very very true but the 3 bed semis tend to be a bit more central and nearer services too. they also come without those other modern appendages, the Management Company and Management Agent.

Don't forget pure desire. Irish people want 3 bed semis not appartments. Need has nothing to do with their desire. I know loads of people living in property larger than their need. The next generation won't want to commute so much or living in such big costly homes.

Sponge Bob wrote:

I would ask myself why, if the 3 bed semi is possibly becoming surplus to society , then why is there demand for the grande mega rancho in East etc...

Greed. Loads of people want more for their money so they are willing to travel and so forth. I could sell my home tomorrow and buy that property and be mortgage free after 8 years in the market. I don't see what point you are making about prices with this other than you think this is too much. I also never siad the need for large family homes is gone just there was a need for more diverse property that was lacking

gurramok

megadodge wrote:

miju
In miju's world an investor with 400k cash buys a house worth 400k using all his cash. If the value of the house rises 5% and inflation hits 6%, then yes he loses money in real terms.

However in any investor-with-half-a-brain's world who has 400k to spare he invests (e.g.)40k as a deposit, gets a 360k mortgage
and at the end of the year when the value rises 5% (now what's 5% of
400k...umm, let me think, where's that Goddamn calculator) there's a 20k profit equalling a 50% return on investment. But hold on, isn't that funny, that's the exact same return I got using the "simplistic for explanatory purposes" example earlier. Obviously wasn't simple enough !!

Sorry to burst your bubble (couldn't resist) but clued-in investors don't pay these mortgages, their tenants do !! Which means, of course (with no deposit to pay) an even bigger return on investment (assuming values rise).

I can't possibly make it any simpler.

What you say is mostly correct in that speculators who are responsible for 100k empty units mostly use other people's money(banks) to make a return on their investment with small deposits.
Problem is that its dependent on a 5% rise, its a huge risk post '06. There was no risk pre '06 due to capital appreciation giving huge gains.
Tenants don't pay out these mortgages as no-one lives in the properties!

On the other hand, an investor will rent out the property hopefully with a long term view for a return on investment unlike the speculator who is there for the quick gain and not sacrificing his own money to service a mortgage.
A simple deposit account can return 7% guaranteed and some investment funds are now better options.
Tables have turned since mid- '06, 5% rise in hse price(appreciation) this year is an extremely tight margin for a speculator to make it his worthwhile entering the market hence many properties might not sell this year and hence triggering falls.

Kipperhell

miju wrote:

found this great little synopsis while fluting about google of the Irish market from Aug 2006 from Bank of Ireland full of facts , figures and historic data with a quick prediction of interest rates by ECB , that aside it's a nice concise little document for easy reference

Isn't the point of posting a link to say how it supports you belief and not just to point else where blindly. I am not going to read a whole report just to see how it might or might not support your beleif.
CALINA>
That is why there are now self storage units where there weren't before. as a Single person an extra bedroom is not sufficent storage? If you can't afford a 3 bed ever are you just not going to buy? I don't see how renting will givie you any extra room. I see what your saying but reality and desires have to find common ground at some point.

miju

Kipperhell wrote:

Isn't the point of posting a link to say how it supports you belief and not just to point else where blindly. I am not going to read a whole report just to see how it might or might not support your beleif.

no , the point of the post was as stated to have a somewhat more central source for everyone to refer to some readily accessbile figures planning on digging up a few more up like it in the interests of a two way healthy debate , though tbh i didn't expect to read the report but on the other hand you should really stop looking for ulterior motives

Sponge Bob

I do know there are FTBs on IO mortgages but the overall figures are not in the public domain . Then again the IO mortgage here is very post 2000. They were rare ( under 2%) before 2000 and are 20% of the market now.

I could and do argue that the market then forced the owner to build up equity and does not any more.

Kipperhell wrote:

Again that is incorrect 40% of property bought post 2000 not "post 2000 construction". Factually not historically BTW.

I mean post 2000 construction . Homes built post 2000.

You keep mixing up details together. The figures when looked at will show there is an increase in empty property but has to be compared with the historical data.

which shows c.10% avearged since 1970 are empty .

Generally Ireland runs at 10-15% vacant property so there is a mild increase during a building boom big deal.

Genarally 10% and never 15% before now ....except that the last big boom before this one was in the 1970s and the vacant rate was at its lowest in my lifetime back then. 8% . Its now double that.

Your speculation on why it is vacant doesn't make it fact. While property built there is a delay in people moving in and so forth.

Not enough reason to explain why the vacant rate accelerated hugely post 2002 .

100,000 (this figure is also a little doubtful it isn't from the census)

It is from the census actually. 175k houses were empty during census 2002 and 275000 houses were empty during census 2006. 100k extra .

You are trying to say there is an increase in supply and none in demand. Do you think demand has diminished or just affordability has put it out of reach? That is what I think has happened

There is an increase in demand using cheap post 911 money which has led to an increase in supply of property which has then been left empty as the owner 'took' their capital appreciation without doing anything else .

Had this had an effect on the market (the empties) then rents would have risen as property was withheld from the rental market after being built and bought and not put to use. Rents have not risen (more than inflation) in the period 2002-2006

Therefore the only demand for this excess build of 100,000 units seems to be entirely founded on speculation caused by capital appreciation. As ends the appreciation so ends the speculation . Right about as we write this in fact.

Don't forget pure desire. Irish people want 3 bed semis not appartments. Need has nothing to do with their desire. I know loads of people living in property larger than their need. The next generation won't want to commute so much or living in such big costly homes.

a 3 bed semi is not that big ...typically 1100 sq ft... but its site is.

If there is a need for diversity (there is indeed ) it is that there should be more decent well built apartments for the long term apartment dweller . Instead we get tomorrows ghettos and slums , by and large.

These proper apartments are sadly lacking here in Ireland ( 3 bed 1000 sq ft type apartments) unlike Germany or France. They want houses because apartments here are crap Thats why.

megadodge

Please see my last post directed at Spongebob.

I agree with you.

Kipperhell

Sponge Bob wrote:

Many recent FTBs are on interest only mortgage with no real equity and no prospect of equity unless prices rise.

Sponge Bob wrote:

I do know there are FTBs on IO mortgages but the overall figures are not in the public domain . Then again the IO mortgage here is very post 2000. They were rare ( under 2%) before 2000 and are 20% of the market now.

I asked you to clarify the first bit about many FTBs having IO mortgages. You can't as I thought. My understanding is IO mortgages aren't really available for FTBs without any calatiral. I doubt there are any FTBs with IO as opposed to your statement that there are many. So are you going to say your statement is true even though there is no proof. I'll even accept evidence to say it is possible as I don't think it is or if it is very very very very few people could get it from a bank.

Sponge Bob wrote:

I mean post 2000 construction . Homes built post 2000.

Which you again can't prove and is incorrect. The only figures you have are about sales after 2000 which may also be 2nd hand home was my point.

Sponge Bob wrote:

which shows c.10% avearged since 1970 are empty .
Genarally 10% and never 15% before now ....except that the last big boom before this one was in the 1970s and the vacant rate was at its lowest in my lifetime back then. 8% . Its now double that.

Not the figures I looked at before which I remeber said approx 15% in the 80s but I could have failing memory

Sponge Bob wrote:

Not enough reason to explain why the vacant rate accelerated hugely post 2002 .

I think it is and I see no evidence of actual habital property vacant on the scale you are talking about

Sponge Bob wrote:

It is from the census actually. 175k houses were empty during census 2002 and 275000 houses were empty during census 2006. 100k extra .

THat was a speculated figure by the census collectors and not fom the census offical figures is the way I recall it.

Sponge Bob wrote:

There is an increase in demand using cheap post 911 money which has led to an increase in supply of property which has then been left empty as the owner 'took' their capital appreciation without doing anything else .

So Irish people didn't want to own prior to cheap money? Not all facts can be shown in figures and this is just speculation on your behalf either way. You keep stating your speculative views as fact to the point I am not sure you can tell the difference

Sponge Bob wrote:

Therefore the only demand for this excess build of 100,000 units seems to be entirely founded on speculation caused by capital appreciation. As ends the appreciation so ends the speculation . Right about as we write this in fact.

You are saying nobody wants to buy the property? That flies in the face of all logic and what people say. I don't know anybody who in the long term doesn't want to own their home. Currently price is the big restricter AFAIK.

Sponge Bob wrote:

a 3 bed semi is not that big ...typically 1100 sq ft... but its site is.

Compared to European standards it is a big place even when you consider climate restrictions.

Sponge Bob wrote:

If there is a need for diversity (there is indeed ) it is that there should be more decent well built apartments for the long term apartment dweller . Instead we get tomorrows ghettos and slums , by and large.

Your view and you can gladdly preach it but be aware it is your opinion. I suggest you compare European property as whole and understand appartments in Ireland are not actually that small. Try Italy or Spain for cities/town appartments and see they are comparatively large here

Sponge Bob wrote:

These proper apartments are sadly lacking here in Ireland ( 3 bed 1000 sq ft type apartments) unlike Germany or France. They want houses because apartments here are crap Thats why.

We don't need large appartments as we have a huge housing stock that covers that range of property size. Appartments in Ireland are not designed for family living maybe they should be but the vast majority of housing stock is designed for family living so why bother creating them again property tends to last for over 100 years well past the original dwellers needs.
Try to build an appartment block in a housing estate and there are tons of objections even though there is no property for anything other than families.

Sponge Bob

Kipperhell wrote:

I asked you to clarify the first bit about many FTBs having IO mortgages. You can't as I thought. My understanding is IO mortgages aren't really available for FTBs without any calatiral. I doubt there are any FTBs with IO as opposed to your statement that there are many. So are you going to say your statement is true even though there is no proof. I'll even accept evidence to say it is possible as I don't think it is or if it is very very very very few people could get it from a bank.

fair enough, not without a guarantee from a parent in too many cases . so they have them ' but don't ' as the collateral is mummy . They are not standalone IO s

Which you again can't prove and is incorrect. The only figures you have are about sales after 2000 which may also be 2nd hand home was my point.

are we to assume that investors and flippers want to pay stamp duty ????

they tend to be new, I will stick on that.

Not the figures I looked at before which I remeber said approx 15% in the 80s but I could have failing memory

10% were empy in the 80s, the number of empties did not really exceed 10% between Cromwell visiting and the late 1990s .

Refresh your memory on historic empties from table 4 of this report here

http://www.esri.ie/pdf/JACB_FitzGerald_The%20Irish%20Housing%20Stock.pdf

Again , it only exceeded 15% in a representative sampling in April 2006 . Its now about 16%. 16% empty is unknown territory in Ireland I can assure you.

I see no evidence of actual habital property vacant on the scale you are talking about

then you refuse to accept that the census was carried out last April and that they checked every habitation in the state.

The ESRI with some as yet unreleased data from the census to support them states that 20% of homes built post 2002 are empty . What a shocking misallocation of productive resources. :eek:

http://www.unison.ie/irish_independent/stories.php3?ca=9&si=1711139&issue_id=14798

THat was a speculated figure by the census collectors and not fom the census offical figures is the way I recall it.

a preliminary figure but the margin of error on the 100,0000 incease in empty homes is about 3% max , insignificant really . I am sure teh final figure will be close.

So Irish people didn't want to own prior to cheap money? Not all facts can be shown in figures and this is just speculation on your behalf either way. You keep stating your speculative views as fact to the point I am not sure you can tell the difference

Let me ask you one question only.

WHY have we started to own SO MANY EMPTY homes all of a sudden.

Why did we run 10% empty long term and now run 20% of our most expensive ( recently bought stick) as empties. I could understand sheebens being abandoned .

Its speculation , thats what.

hmmm

THat was a speculated figure by the census collectors and not fom the census offical figures is the way I recall it.

CSO official preliminary census figures which show 275,000 vacant dwellings
http://www.cso.ie/census/documents/2006PreliminaryReport.pdf

ronbyrne2005

megadodge wrote:

miju



I'm still trying to figure that one out.

BTW somebody using the name 'miju' wrote the following on another thread...



Must be an imposter.



Maybe you should ask your Maths teacher to explain the concept of percentages to you, as you're just digging youself deeper and deeper with feet full of bullets from your own guns.

But just for those who aren't quite up to speed in the sums department, please read the following very slowly and use a calculator when (not 'if') necessary...
In miju's world an investor with 400k cash buys a house worth 400k using all his cash. If the value of the house rises 5% and inflation hits 6%, then yes he loses money in real terms.

However in any investor-with-half-a-brain's world who has 400k to spare he invests (e.g.)40k as a deposit, gets a 360k mortgage
and at the end of the year when the value rises 5% (now what's 5% of
400k...umm, let me think, where's that Goddamn calculator) there's a 20k profit equalling a 50% return on investment. But hold on, isn't that funny, that's the exact same return I got using the "simplistic for explanatory purposes" example earlier. Obviously wasn't simple enough !!



Sorry to burst your bubble (couldn't resist) but clued-in investors don't pay these mortgages, their tenants do !! Which means, of course (with no deposit to pay) an even bigger return on investment (assuming values rise).

I can't possibly make it any simpler.

What about opportunity cost of capital??

ronbyrne2005

BackwardRussia wrote:

Before I post this I'm going to admit I don't know a lot about property markets so excuse my ignorance if this isn't a valid point but.. I don't own a house in Republic of Ireland and more than likely never will.. so I'm not biased either way.

The way I see this situation is, in order for a 'crash' (which means nationwide house prices taking a significant drop), behind every single one of those houses being sold for a lot lower than they are valued now, is a person or person(s) selling.

So for example if I personally own a house now that I could sell for €350,000 tomorrow, choose to sell the house in a years time but this "crash" has happened which means my house would only sell for, say €250,000 , me personally I would rather just stay put and not sell at all. Rent the house out or something.

What I predict is that there will just be a huge drop in "activity" in the property market, ie. people will just choose not to move, not to sell their house, etc. I can't imagine someone turning around and saying "Ok fair enough I'll sell my house for €100,000 less than what I could have got a year ago". Remember it's sellers who set the price of the house, not buyers. Only people who are really desperate to move will sell for the 'crashed' price.

There will always be some people desperste to sell(especially if prices are stagnant or falling) and these buyers set prices at the margin.

Kipperhell

Sponge Bob wrote:

fair enough, not without a guarantee from a parent in too many cases . so they have them ' but don't ' as the collateral is mummy . They are not standalone IO s

I don't think you can get an IO mortgage on your home period. It was only ever aviable for investors was my understanding, did it change? Can you prove you can get an IO mortgage on your home? It certainly makes your statement that many FTBs have IO mortgages very questionable.

Sponge Bob wrote:

are we to assume that investors and flippers want to pay stamp duty ????

they tend to be new, I will stick on that.

I paid stamp duty as FTB and many of my friends did too. You are making a big assumption to dismiss FTBs and investors from the second hand market. Many developers buy second hand properties improve them and sell them on. In fact all those old large houses broken up into flats that were done up were bought recently and it is where many speculators get plots of land. The Superquinn and hotel purcahses are a testimont to that.

Sponge Bob wrote:

then you refuse to accept that the census was carried out last April and that they checked every habitation in the state.

There can often be statistics that don't really tell you anything. I doubt the accuracy of those figures. The main reason I do is because it doesn't really add up. Dublin has had the most new properties and is the largest population centre in the country,16% of the vacant property would have to show up very clearly in Dublin. You can point to vacant appartement blocks but to balanace out the % there would need to be very very many of them of large size vacant. Given that view if they aren't in Dublin then huge areas around the country would need to be vacant. I think that would be repoted heavily. As there has been an increase in holiday homes in the country it could easily amount for the increase as could the time dealy in transfer of property. You are probably right there are investors there with vacant pproperty but that would be assuming that the noraml 10% was always investors and the increase in population and wealth has not changed anybody other than investors. It may be as simply as people decide not to sell gran's house because they want to keep a hold of it for a kid and don't really want to rent or simply don't know how to. It extremly bias to assume any increse in vacancy rate is speculative ONLY.
You are entiled to your opinion of what things mean according to you but you are make large assumptions and stating them as certainty. I don't know if you are just blikered but you are not balanced.
I reckon something will change in the housing market but a massive price drop is not a certainty so I don't go looking for proof that it will crash. I am sure of one thing that the planning of the development has been poor for future communities and things could be done to better use the property stock in existence. Grandparents are living in large family homes while families are living in small appartments.

FreeAnd..

I don't think you can get an IO mortgage on your home period. It was only ever aviable for investors was my understanding, did it change?

How long ago did you buy Kipperhell? I personally know a few FTB's I/O and when I was securing a mortgage they were actively being pushed. This was all around the same time as 100% mortgages were introduced for FTS's - you know right before the market went totally crazy (the start of the great decline if you ask me)

soma

Kipperhell wrote:

I don't think you can get an IO mortgage on your home period.

As ridiculous as it is, IOs for PPRs are most certainly available and availed of. Over at AskAboutMoney, the owner even reccommends them for the first few years of owning your PPR. (Whereas I'd be of the opinion that if you can only afford the house with an I/O in an ulra-low interest rate environment, then reality is trying to tell you you can't afford the house..).

miju

Kipperhell wrote:

There can often be statistics that don't really tell you anything. I doubt the accuracy of those figures.

so the CSO can't compile statistics and the census is utterly meaningless

i mean you can't really get any more official or accurate than the census and the CSO yet you still dismiss them so easily

Kipperhell wrote:

As there has been an increase in holiday homes in the country it could easily amount for the increase as could the time dealy in transfer of property. You are probably right there are investors there with vacant pproperty but that would be assuming that the noraml 10% was always investors and the increase in population and wealth has not changed anybody other than investors.

for starters the vacancy rate in ireland is currently running at close to 15% so it it noticable. secondly, your right that figure does include holiday homes , i will dig out the exact figure for you later (unless someone beats me to it) but from memory approx 100,000 were identified as holiday homes with the rest being a vacant residential properties

jmayo

The concern is not just with what numbers of properties are vacant at the moment, take a look at the volume of apartments that are coming on-line within couple of years.
Take a look at Stepaside or even worse Sandyford.
There are a number of massive developments within what was once the Sandyford Industrial Estate.
Who are going to live in these, first time buyers or foreign workers renters ?
Oh yes they are near luas but Irish people ultimately want to live in a house not an apartment complex so long term it will only be singles, couples and renters.

It says it all:
we knock commerical industrial units to build apartments for people to live in because there is an influx of emigrants here mainly to build apartments for people to live in.
Seems like a bit of a loop to me and all it takes is building to envitably slow down to cause a downward spiral.

Are there any of those American type mortgages where you can defer your repayments for number of years because your cash flow is poor ?
Ultimately your rates and repayments are higher because of this.

pjbrady1

We have data from numerous places/posters/websites/bodies showing us that the property market has levelled off. If there is going to be a serious decline in average prices what is going to be the first county to go.
I'v checked a couple of times on daft over the last few months and I have come to the conclusion that Roscommon is the most oversupplied county.
On daft it has 1111 properties for sale. Meath has 968.
Roscommon has a low rental base with many of the young people who work and live in the county living at home with their parents or have already built/purchased a house.
No university to supply renters.
No large industrial base.
Relatively small tourism sector.
No coastline and lack of "stunning vistas" such as Killarney/Croagh Patrick/Burren.
Relatively small commuting effect but some people commute to Longford/Leitrim/Galway.
Large percentage of the working young people will have no alternative to construction and in certain towns in Roscommon construction is starting to seriously wind down. Strokestown has 97 properties for sale and I know of developers renting out houses that they have not sold. Only active construction in the town at the moment is self builds with young people building their own home.

One other problem it may face is that builders have a lower margin in Roscommon than in most counties. Roscommon has one of the lowest average prices for a house. Yet the cost of materials bricks/steel/slate/copper/radiators is the same as in all other counties.
So if you have built houses for 130,000 all in costs. Alarm bells will ring if you have only sold 30% of your development at 165,000, and on the street prices start to show a 5% plus decline with a .25% rise in interest rates. If a developer gets in trouble without selling his development he can rent, he might be able to offload for social housing to the government, lastly he might just have to sell at or near cost price.

Does anyone have any opinions of another county that is showing warning signs of oversupply and has very unfavourable demographics/geography/economics?

Sponge Bob

pjbrady1 wrote:

I'v checked a couple of times on daft over the last few months and I have come to the conclusion that Roscommon is the most oversupplied county.
On daft it has 1111 properties for sale.
Roscommon has a low rental base

East Galway/East Mayo/South Sligo/Most of Westmeath/Longford/Offaly/Laois/Carlow/Wexford/Tipp/Cavan/Monaghan are equally oversupplied. Roscommon is a good candidate to be the canary in the goldmine based on your observations but some of it is tax designated which artificially underpins prices .

All of the midlands relies on commuters to bolster demand and underpin prices at relative to Galway or Dublin . All of the midlands is grossly oversupplied so all of the midlands will get it first.

On the coast there is a holiday home market which is difficult to guage. Prices in Roundstone in Galway, for example, are decided not at all by local circumstances but entirely by affluent holiday homers from ...Galway and Dublin again.

Then the crash will creep inexorably closer and closer to where the jobs actually are , Galway and Dublin again .

Kipperhell

miju wrote:

so the CSO can't compile statistics and the census is utterly meaningless the CSO yet you still dismiss them so easily i mean you can't really get any more official or accurate than the census and

"Lies damn lie and statistics". Ever hear that? I am questioning the assumption of what that mean more so than the figure itself. I am also pointing out that it would very noticable to the average person and extremely noticable in Dublin. AS there is no clear way to see how many properties are holiday homes there is actually no way to get accurate figure no matter who is collating them. The CSO do not have magical powers of perception and without a registry that accurately tracks hoilday homes they can't tell.

miju wrote:

for starters the vacancy rate in ireland is currently running at close to 15% so it it noticable. etc...

By sight it would be noticable and a large portion would need to be in Dublin.
I leave you to it as I have never met people with such a blikered view other than those saying the market will keep going up.

pjbrady1

Spot on with East Mayo. All of the towns in that area have experienced heavy development, yet you could count on one hand the number of companies that employ more than 150 people.
There is also alot of property going to come on the market handed down from older generation to a younger generation who will not decide to live in Mayo.
One other factor I'v noticed is the lack of people in their late 20's who live in the area. National school class size has plummeted in the towns.
Similarily I have heard of developments being rented out by the developer.
Foxford looks oversupplied in that region.

hmmm

Kipperhell wrote:

The CSO do not have magical powers of perception and without a registry that accurately tracks hoilday homes they can't tell.

You remind me of a poster on AAM who caused property threads to go endlessly in circles by arguing nonsensical points. The CSO stats are accurate, if you're saying that our national statistics agency who employed thousands of people to knock on every door managed to get their figures completely wrong, then I guess you'll argue anything.

hmmm

pjbrady1 wrote:

I'v checked a couple of times on daft over the last few months and I have come to the conclusion that Roscommon is the most oversupplied county.

You'll love this then

From GHC

Monksland could be set for another huge development of houses, services, and shops if Roscommon County Council give it the go ahead in February.
Developers Tony Downey and Kerril Creaven of nearby Moore are hoping to demolish an existing house and replace it with 255 houses, a medical centre, a civic centre, a crèche, a gym, and 22 shop units which will include a bar, cafe, restaurant, and take away.

hmmm

Ouch, UK rates up .25 of a %, an unexpected rise. Rates in Europe aren't stopping, no matter what the VIs say.

Calina

Kipperhell wrote:

AS there is no clear way to see how many properties are holiday homes there is actually no way to get accurate figure no matter who is collating them. The CSO do not have magical powers of perception and without a registry that accurately tracks hoilday homes they can't tell.

This would be why the census enumerators interviewed neighbours to establish whether houses were occupied or not or holiday homes.

What it boils down to is this: you are sitting on a fence but you want things to be nice and fluffy and alright.

The problem is this: ten years ago the average house was roughly 6 times the average salary. Now it's near to ten or eleven times the average salary. This is not sustainable without major problems. You could turn around and talk about second incomes and low interest rates, but you know, the problem is that those low interest rates are climbing and second incomes are dependent on people not having children or those children magically being born aged 13 and able to take care of themselves. Either way the second income goes as someone quits to take care of the kid(s) or creche fees have to be paid.

From what I remember - and I really have no wish to plough through it again, your point amounts to

1) I don't believe the census figures
2) I don't believe that FTBs are on IO or 100% mortgages and
3) I don't believe that there is a lot of vacancy.

It is your problem if you don't want to take note of the census figures but frankly I have a hell of a lot more faith in them than I have in you. Not only that, I have serious concerns about where those properties are. A slowdown in the market will bring vacant properties in Dublin either onto the sales or rental market when reality bites. In a lot of the country where housing prices are not matched with corresponding income rises it is likely that shifting unoccupied houses and apartments will be very difficult.

IO and 100% mortgages are being actively pushed at FTBs, or they were until very recently. I gather than some lending institutions are getting a little nervous about 100% mortgages. I have heard many mortgage advisors go the "Get a 35% IO 100% you can remortgage in a few years." and I'm an FTB. So frankly I'm inclined to be certain that while there may be a few people cashing in their SSIA chips for deposits, I am equally certain that more than a few are using these financial products to get on the mythical ladder. If you want to convince yourself that everything in that garden is rosy, then fine. Do so. But do not assume that there is any more support for your conviction that excessive debt in the FTB sector is a myth than there is for those who are very, very worried about the future prospects of this country.

We cannot sell or export houses. We have endebted people up to all their working lives on loans which they can barely afford in a period of historically low interest rates. Yes some people have gotten very rich but it is stupid to assume that this is broadly a good thing. A house, first and foremost is for living in but people in this country have forgotten that. If they hadn't, some of the new developments might actually be designed for living in rather than for renting out.

I cannot tell what is going to happen in the future. But I'll put it this way - I personally would like to owe the lowest amount of capital outstanding possible. People in this country have spent a good deal of money which they haven't earned yet on houses. Even when they manage to get their LTV down, many of them go out and borrow again against the house. We've all heard the "Your home may be at risk if you do not keep up payments" but you know what? A lot of people in Ireland ignore that reality or pretend that that day will never come. They convince themselves that it'll all be okay because it would be bad karma for the banks to throw them out.

The truth is we are not well placed for any shocks because we owe too much money as a country as a whole. I personally am shocked and horrified by how stupid people in this country have been with respect to borrowing money for anything and everything. How they have convinced themselves that they can get rich quick through, well, property at the moment. Soon it'll be something else. The problem is a lot of people are not rich. They just think they are. You don't have money until you cash in your chips and regardless of whether the value of your chips fall, if you don't own them outright, the value of your debt is not so cooperative as to fall unless you pay it off.

Sponge Bob

hmmm wrote:

You remind me of a poster on AAM who caused property threads to go endlessly in circles by arguing nonsensical points. The CSO stats are accurate, if you're saying that our national statistics agency who employed thousands of people to knock on every door managed to get their figures completely wrong, then I guess you'll argue anything.

That would be pure muppetry and kipperhell is not a muppet. Tut tut.

The vacancy rate is highest outside the 10 main towns. Some of this like Roundstone in Galway is holiday homes and some is speculative building like Roscommon.

ALL of county Galway now has a vacancy rate of over 20% ( it was 17% in the county in 2002 but 10% in the city see table 5 )

The vacancy rate in Dublin in 2002 in the same linked table 5 was about 6% . While kipperhell is correct in saying its not 15% he also misses the point that Dublin is not Ireland...or does he , lets see ???

I am sure its not 15% vacant now in Dublin but I would think that an increase to 8-10% is bad....for Dublin that is.

Then again I never said it was 15% empty in Dublin but that Ireland as a whole NEVER had 15%/16% of homes lying empty in its entire history...since Cromwell left that is or after the Black Death hit Dublin in 1350 or maybe in the 1850s after the famine

miju

Kipperhell wrote:

I am also pointing out that it would very noticable to the average person and extremely noticable in Dublin. AS there is no clear way to see how many properties are holiday homes there is actually no way to get accurate figure no matter who is collating them.

it is , if you drive around the new estates in finglas (around 1 year old now) you will see the amount of apts with no blinds , furniture or ANYTHING in them , completely vacant , i can only speak for this area because it's where i live so i can't speak for anywhere else. of course logic does suggest that if your living in an older area vacancy rates would be hard to notice simply because theres always family to take over a property in some form or another , not the case though with new properties

Kipperhell wrote:

The CSO do not have magical powers of perception and without a registry that accurately tracks hoilday homes they can't tell.

your right of course they don't , but when the enumerators had to mark these properties as vacant they first has to enquire with local postmen , ESB and neighbours etc (now even holiday homes would have electricity connected would they?)

i'm pretty sure there's very few holiday homes that would be smack bang in the middle of a residential estate and i'm sure you'd agree on that point at least lest we forget the ESB connections

Kipperhell wrote:

I leave you to it as I have never met people with such a blikered view other than those saying the market will keep going up.

you say that after rubbishing the CSO census results but yet we're blinkered i've still to see any links coming from your corner to back up your points in any way

miju

Calina wrote:

They convince themselves that it'll all be okay because it would be bad karma for the banks to throw them out.

must dig out that link i found before when someone said only 3 houses are repossesed a year when it's alot more and also show that repossesions are rising again on average over the course of the last ten year.