Eddie Hobbs: "Starter homes will be 175,000 euros in 2 years"

Saskia

On page 29 on Eddie's magazine "You & Your Money" Eddie says the following;

"Given the forces now unleased and when the dust settles in a year or two, prices for starter homes should be no more than 5 times the average wage or about 175,000 euros"

As someone who wants to buy their first home but has yet to I find this just adds to the "watch and wait" theory but will they really drop to that much?

I hope so!

staker

It's a bold prediction. If they do, we'll never afford em as the cost of financing them will be huge:cool:

SimpleSam06

staker wrote: »

It's a bold prediction. If they do, we'll never afford em as the cost of financing them will be huge:cool:

No what you'll have then is people saving up for longer so they will own a greater initial percentage of their home at the start. Repayments will be less and shorter, but the mad dash to get on the ladder will be gone, replaced by a more studied, careful approach.

And about time too, people were rolling into the largest investment of their lives with seriously half cocked ideas over the last few years. The ones who were sneering at the "begrudgers" will be end up somewhat bitter themselves when other people are paying a quarter of their mortgages and are free and clear long before they are out of their overpriced starter home.

mikemac

Good news

egan007

no more than 5 times the average wage?

Based on what - More Hobbs Guessing.

jetski

egan007 - Think your the one whos guessing hobbs is guessing

SkepticOne

staker wrote: »

It's a bold prediction. If they do, we'll never afford em as the cost of financing them will be huge:cool:

Which means they'll drop further.

the_syco

Bullsh|t. Unless you used substandard crap, have thin walls, and slash the wages of the trades people (someone mention union?), I can't see such a drop.

ixoy

the_syco wrote: »

Bullsh|t. Unless you used substandard crap, have thin walls, and slash the wages of the trades people (someone mention union?), I can't see such a drop.

Well we don't know that until we know the build cost of units. This unit cost should decrease in years to come as the price of the land that they're built on drops. Similarly some of the wages should drop as some tradesmen, who were asking ridiculous prices, are forced to meet falling demand - in much the same way as IT wages soared and dropped in the dot come bubble/burst.

gurramok

the_syco wrote: »

Bullsh|t. Unless you used substandard crap, have thin walls, and slash the wages of the trades people (someone mention union?), I can't see such a drop.

Hate to break your bubble but some 'starter homes' are already at 190k in Balbriggan for example.
They are apts but the downward slide is only beginning and 175k is very realistic for the near future

jetski

SkepticOne wrote: »

Which means they'll drop further.

+1

jetski

gurramok wrote: »

Hate to break your bubble but some 'starter homes' are already at 190k in Balbriggan for example.
They are apts but the downward slide is only beginning and 175k is very realistic for the near future

+1

BendiBus

ixoy wrote: »

This unit cost should decrease in years to come as the price of the land that they're built on drops.

Exactly! Developers will still be able to make an honest profit and tradesmen earn a fair living. Their input costs will drop too.

The only losers in this game are purchasers of overpriced land. Sadly this includes a lot of young FTBs who got sold a pup.

astrofool

jetski wrote: »

+1

You can use the "thanks" icon if you agree with a post.

jetski

Does that not suggest im thanking...

+1 to me means more like agreeing with the post

who007

like this?

jetski

i think he is talking about the thumbs up button in the bottom right hand side of your posts window

subway

does he mean the average house will cost 175k or that a pre-2008 shoebox will cost 175k?

i dont buy into the notion of "starter homes", you buy a home to live in, not to practise living in. so if he is sugesting the average price will be around 175k i think he is spot on.
if he thinks 35sqm 1 bed apts will be 175k i think he is in for a shock.
you can already get 1 bed apts for under 200k in plenty of areas in dublin
http://www.thepropertypin.com/viewtopic.php?t=9690

subway

in fact there are 42 results for houses for sale in dublin at under 200k on daft right now
http://www.daft.ie/searchsale.daft?s%5Bcc_id%5D=ct1&s%5Bmnb%5D=&s%5Bmxb%5D=&s%5Bmnp%5D=&s%5Bmxp%5D=200000&s%5Bpt_id%5D=&s%5Bhouse_type%5D=&s%5Bsqmn%5D=&s%5Bsqmx%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=

jetski

Starter homes doesnt mean appartments, id imagine 2 bed semi type yolks

Firetrap

Ah yes, those little houses that you live in at the start before you do stuff like propagate the species. At that stage, you sell your little house to someone who hasn't yet reproduced and you buy a bigger house.

jetski

something like that :pac:

Ice_Box

Now that Eddie Hobbs has started predicting house prices will fall they are certain to rise. My taxi driver also said stay away from property. Time to buy?

Sqaull20

When all the foreign workers are gone home in the next 2 years, they will be knocking people down to fill the empty houses/apartments imo.

The whole concept of a "starter home" is wrong in the first place!
It was simply an excuse to build places that dont suit long term living in a market where people were buying anything because prices were going UP!

jetski

Ice_Box wrote: »

My taxi driver also said stay away from property. Time to buy?

When your taxi driver is telling you to buy property that might be an issue.


When your taxi driver is telling you to "stay away from property" thats sound advise, simply because when property is on the way up the turning point is a problem as when it happens its allready too late, you cant sell your investment or house or your house/investment . but when the prices have reached bottom..... what have you got to loose?

jetski

Sqaull20 wrote: »

When all the foreign workers are gone home in the next 2 years, they will be knocking people down to fill the empty houses/apartments imo.

its going to get messy....

Saskia

subway wrote: »

in fact there are 42 results for houses for sale in dublin at under 200k on daft right now
http://www.daft.ie/searchsale.daft?s%5Bcc_id%5D=ct1&s%5Bmnb%5D=&s%5Bmxb%5D=&s%5Bmnp%5D=&s%5Bmxp%5D=200000&s%5Bpt_id%5D=&s%5Bhouse_type%5D=&s%5Bsqmn%5D=&s%5Bsqmx%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=

Yes but would you actually live in them? Or would it take another 50k to make them decent? Or could you handle scumbags living all around you in an area where robbed cars are a daily occurance?

There is a catch to any sub 200k house in Dublin. For now

MG

Was watching a Location, location, location type programme in Germany about a year ago, searching in either Dusseldorf or Duisburg, can't remember now. Anyhow, they gave the price and the sq m and all houses shown were in the region of 1600 Eur per sq M. (a variety of buyers were shown)

Average starter home/3 bed semi approx 100 sq M at 175k = 1750 Eur per sq m so it's a very reasonable estimate.

ZYX

MG wrote: »

Was watching a Location, location, location type programme in Germany about a year ago, searching in either Dusseldorf or Duisburg, can't remember now. Anyhow, they gave the price and the sq m and all houses shown were in the region of 1600 Eur per sq M. (a variety of buyers were shown)

Average starter home/3 bed semi approx 100 sq M at 175k = 1750 Eur per sq m so it's a very reasonable estimate.

Obviously where in Germany you buy.

"Take the example of a typical detached, one family house of average size; one with about 125 square meters (ca. 1,345 sq. ft) of living space, including garage. Such a place in the former West Germany cost about €255,000. But prices varied considerably by region. Such a house in the north cost only about €185,000. In the west the price was about €235,000, and in the south it was significantly more, coming in at just under €310,000. In cities of more than 500,000 population the price was about €300,000.
The city-state of Bremen was the least expensive of the larger cities. The house described would cost a mere €185,000. At the other end of the scale the Bavarian capital of Munich was far and away the most expensive. The house described could cost €635,000! The price per square meter for privately owned property was only €975 in Bremen and around €2,050 in Munich."

Munich has a population similar to Dublin.

SimpleSam06

ZYX wrote: »

Munich has a population similar to Dublin.

Eh that comparison is meaningless to be honest until we can see the specific house and area they are talking about. The higher end one might be beachfront property or something. And speaking of spurious comparisons, I could list off a dozen cities, and more, the same size as Dublin with nowhere near the property prices, so I'm not sure where thats going.

ZYX

SimpleSam06 wrote: »

Eh that comparison is meaningless to be honest until we can see the specific house and area they are talking about. The higher end one might be beachfront property or something. And speaking of spurious comparisons, I could list off a dozen cities, and more, the same size as Dublin with nowhere near the property prices, so I'm not sure where thats going.

Surely MGs comment was just as meaningless, but, as it backed your point of view you did not comment on it. I was simply correcting his misleading comment.

SimpleSam06

ZYX wrote: »

Surely MGs comment was just as meaningless, but, as it backed your point of view you did not comment on it. I was simply correcting his misleading comment.

He at least cited some sort of source for his figures. Where did you pull that sentence from?

gogglebok

subway wrote: »

i dont buy into the notion of "starter homes", you buy a home to live in, not to practise living in.

I couldn't agree more. The idea that buying a house is "a first step on the property ladder" is, I think, a very deceptive one. For many people a house is the place they intend to live, not an investment and not the first in a sequence.

MG

ZYX wrote: »

Surely MGs comment was just as meaningless, but, as it backed your point of view you did not comment on it. I was simply correcting his misleading comment.

In what way were you correcting it? How was it meaningless?

ZYX wrote: »

The price per square meter for privately owned property was only €975 in Bremen and around €2,050 in Munich."

The irony of your comment is that it backs me up entirely. I chose an average type German city to take the average of approx Eur 1600 per Sq m.
You took two extremes......the average of which is Eur1512.

so how was my comment either incorrect or meaningless.......................?

ZYX

SimpleSam06 wrote: »

He at least cited some sort of source for his figures. Where did you pull that sentence from?

He quoted
"Was watching a Location, location, location type programme in Germany about a year ago, searching in either Dusseldorf or Duisburg, can't remember now."
Yeah. Great source

ZYX

MG wrote: »

In what way were you correcting it? How was it meaningless?

I was simply quoting simplesam

MG wrote: »

The irony of your comment is that it backs me up entirely. I chose an average type German city to take the average of approx Eur 1600 per Sq m.
You took two extremes......the average of which is Eur1512.

so how was my comment either incorrect or meaningless.......................?

You did not read what I wrote (just like you didn't read SimpleSam's comments)
"Take the example of a typical detached, one family house of average size; one with about 125 square meters (ca. 1,345 sq. ft) of living space, including garage. Such a place in the former West Germany cost about €255,000. But prices varied considerably by region. Such a house in the north cost only about €185,000. In the west the price was about €235,000, and in the south it was significantly more, coming in at just under €310,000. In cities of more than 500,000 population the price was about €300,000."

So average cost in former West Germany was over 2000 per square foot. Or 25% more than you were saying. In cities over 500,000 (eg a place like Dublin) it was 2400 per square metre or about 60% more than you said.
In Munich (a city the same size as Dublin) the cost of a 125 sq metre house was €635000 or 5080 per m2. Or more than 200% more than you said.
So that is how I was correcting you.

MG

ZYX wrote: »

He quoted
"Was watching a Location, location, location type programme in Germany about a year ago, searching in either Dusseldorf or Duisburg, can't remember now."
Yeah. Great source

Actual real figures usually are a good source. Certainly they provide a validation for the Hobbs estimate i.e. his estimate falls within the parametres of a reasonable estimate compared with a fair example from a stable, mature market

MG

ZYX wrote: »

I was simply quoting simplesam

ZYX wrote: »

MGs comment was just as meaningless......... I was simply correcting his misleading comment

No you weren't, you directly say my comment is meaningless and misleading. It is neither, it is a reasonable assessment of the reasonableness of Hobbs estimate.

ZYX wrote: »

You did not read what I wrote (just like you didn't read SimpleSam's comments)
"Take the example of a typical detached, one family house of average size; one with about 125 square meters (ca. 1,345 sq. ft) of living space, including garage. Such a place in the former West Germany cost about €255,000. But prices varied considerably by region. Such a house in the north cost only about €185,000. In the west the price was about €235,000, and in the south it was significantly more, coming in at just under €310,000. In cities of more than 500,000 population the price was about €300,000."

So average cost in former West Germany was over 2000 per square foot. Or 25% more than you were saying. In cities over 500,000 (eg a place like Dublin) it was 2400 per square metre or about 60% more than you said.
In Munich (a city the same size as Dublin) the cost of a 125 sq metre house was €635000 or 5080 per m2. Or more than 200% more than you said.
So that is how I was correcting you.

You need to look at your figures - they state that

"The price per square meter for privately owned property was.... around €2,050 in Munich"

and that

"Munich was far and away the most expensive. The house described could cost €635,000" (5080 per SqM)

These are contradictory so you need to clarify yourself.

Meaningless and misleading. Indeed.

ZYX

MG wrote: »

No you weren't, you directly say my comment is meaningless and misleading.

No I didn't.
I said "Surely MGs comment was just as meaningless," which was quite clearly a question (even if I left out the question mark.)

SimpleSam had said
"Eh that comparison is meaningless to be honest until we can see the specific house and area they are talking about. The higher end one might be beachfront property or something. And speaking of spurious comparisons, I could list off a dozen cities, and more, the same size as Dublin with nowhere near the property prices, so I'm not sure where thats going."

This was as easily applied to your comment as mine. You wrote about property in a German location you were not sure about. You spoke of no specific location or house. ie "that comparison is meaningless to be honest until we can see the specific house and area they are talking about.

ZYX

MG wrote: »

You need to look at your figures - they state that

"The price per square meter for privately owned property was.... around €2,050 in Munich"

and that

"Munich was far and away the most expensive. The house described could cost €635,000" (5080 per SqM)

These are contradictory so you need to clarify yourself.

Meaningless and misleading. Indeed.

Anyway we are way off topic at this stage.

MG

ZYX wrote: »

Anyway we are way off topic at this stage.

Not really, we're only trying to see if Hobbs estimate is reasonable. I took an anecdote from a mature, stable market in an EU country to validate the 175k figure Hobbs used (for Ireland i assume, rather than Dublin as some have assumed).

I re-read your post and it didn't intuitively seem right , then something else occurred to me. The quoted "about 125 square meters (ca. 1,345 sq. ft) of living space, including garage. Such a place in the former West Germany cost about €255,000" is interesting. Germans tend to distinguish between Wohnflaeche and Nutzflaeche, so reading the sentence again it is possible that the 125 sqm refers only to the Living space and in addition the house includes a garage. This depends a bit on the source of the info ( I assume this is not "Location, Location, Location" and rather the IMF or Destatis or other such impeccable source?). If it's from a German source the Garage is probably not included so we could really be talking about a 140 - 150 sqM house on the Irish standard of including all space, which would imply closer to the 1750 per SqM that I feel Hobbs is refering to.

ZYX

MG wrote: »

Not really, we're only trying to see if Hobbs estimate is reasonable. I took an anecdote from a mature, stable market in an EU country to validate the 175k figure Hobbs used (for Ireland i assume, rather than Dublin as some have assumed).

I re-read your post and it didn't intuitively seem right , then something else occurred to me. The quoted "about 125 square meters (ca. 1,345 sq. ft) of living space, including garage. Such a place in the former West Germany cost about €255,000" is interesting. Germans tend to distinguish between Wohnflaeche and Nutzflaeche, so reading the sentence again it is possible that the 125 sqm refers only to the Living space and in addition the house includes a garage. This depends a bit on the source of the info ( I assume this is not "Location, Location, Location" and rather the IMF or Destatis or other such impeccable source?). If it's from a German source the Garage is probably not included so we could really be talking about a 140 - 150 sqM house on the Irish standard of including all space, which would imply closer to the 1750 per SqM that I feel Hobbs is refering to.

Just show us your link to IMF report on German property and we will leave it at that then.

From http://www.justoverseas.co.uk/showArticle.aspx?loadid=00298

The data shows that property in Munich is considerably more expensive than elsewhere in Germany, but it remains reasonable when compared to some other European cities.

In general, apartments in the city centre cost €3,574 per square metre. Specifically, this means that a 30 square metre home typically costs €104,549. Something larger, like a 90 square metre home will set a buyer back €318,998.

For a much larger home, for example a 150 square metre property, prices can exceed €550,000.


And From Sunday business post
‘‘January and February started well, but beginning in March it became regressive,” he explained. ‘‘Within the first nine months of 2007, planning applications decreased by 35 per cent compared with the same period in 2006’’.

All of this is to be taken within the context of a booming property market which sees a 125 square metre family home that would cost about €185,000 in the northern city of Bremen cost about €635,000 in Munich."

As I said at the start it all depends where in Germany you want to buy.

SimpleSam06

ZYX wrote: »

Just show us your link to IMF report on average German property and we will leave it at that then.

Do you have any source for your comments? Whatever about an off the cuff comment about a show watched on telly a while back, at least its something. You have been asked repeatedly now to tell us where you got that nice italicised section that you wrote - did you pull it out of the cabbage patch or what?

ZYX

SimpleSam06 wrote: »

Do you have any source for your comments? Whatever about an off the cuff comment about a show watched on telly a while back, at least its something. You have been asked repeatedly now to tell us where you got that nice italicised section that you wrote - did you pull it out of the cabbage patch or what?

Sorry, I had edited my post while you were writting yours

niceirishfella

Back on Topic - Hobs in not wrong, sure its happening already.

There's 3 bed mid terrace and semis for less than 150k on the market in places in the communter belt from Dublin........I've viewed a couple with a view of buying but decided to hold off as there is lots more to come off them in the next 2 years.
Also, they would be hard to rent out right now as many thousands of foreign workers have left ireland already and thats just for starters.

MG

ZYX wrote: »

Just show us your link to IMF report on German property and we will leave it at that then.

From http://www.justoverseas.co.uk/showArticle.aspx?loadid=00298

The data shows that property in Munich is considerably more expensive than elsewhere in Germany, but it remains reasonable when compared to some other European cities.

In general, apartments in the city centre cost €3,574 per square metre. Specifically, this means that a 30 square metre home typically costs €104,549. Something larger, like a 90 square metre home will set a buyer back €318,998.

For a much larger home, for example a 150 square metre property, prices can exceed €550,000.


And From Sunday business post
‘‘January and February started well, but beginning in March it became regressive,” he explained. ‘‘Within the first nine months of 2007, planning applications decreased by 35 per cent compared with the same period in 2006’’.

All of this is to be taken within the context of a booming property market which sees a 125 square metre family home that would cost about €185,000 in the northern city of Bremen cost about €635,000 in Munich."

As I said at the start it all depends where in Germany you want to buy.

If you read my comment you would see that I was assuming your source was impeccable. In fact, it's just from a website with no academic or statistical references. You sneered at me for using a tv programme as a source. Ungentlemanly conduct in my opinion - double standards when both sources are essentially anecdotal.

ZYX wrote: »

"Was watching a Location, location, location type programme in Germany about a year ago, searching in either Dusseldorf or Duisburg, can't remember now."
Yeah. Great source

I'm not sure how a) you consider your website such a better source that you can sneer at me or b) the fact that a house in Munich could be very expensive is in any way a test of the validity of Hobbs figure. The information we have from both my source and your source indicates (West German average, not Munich) that Hobbs estimate seems reasonable.

ZYX wrote: »

As I said at the start it all depends where in Germany you want to buy.

Hobbs comment is a generalisation obviously, effectively an average or a median. It's no revelation that prices could deviate from the average.

The question I addressed is whether Hobbs estimate is reasonable. I compared this to a mature, boom-free market in an average German city (which Hobbs would be familiar with and would probably benchmark against) and I reckon it is reasonable.

Firetrap

Thanks for taking this back on-topic again

Yeah, you're right about that. I was driving through Moate recently and saw a billboard advertising houses for €157,000. I know Moate wouldn't be quite commuterville for Dublin (though I could of course be wrong there) but it's still only a run out the road from Athlone.

Saskia

Ive just read that Hobbs started up a property agency last year for foreign investment and now he's saying this?

Would I be right in saying the man is full of sheiiite?

Dirk Gently

niceirishfella wrote: »

Back on Topic - Hobs in not wrong, sure its happening already..

Agreed. Already lots available for under 200k and if you assume that asking prices can be haggled down a further 20% - 30% at the moment then i'd say hobbs was actually a bit high in his valuation for 2 years time.

raido9

Saskia wrote: »

On page 29 on Eddie's magazine "You & Your Money" Eddie says the following;

"Given the forces now unleased and when the dust settles in a year or two, prices for starter homes should be no more than 5 times the average wage or about 175,000 euros"

As someone who wants to buy their first home but has yet to I find this just adds to the "watch and wait" theory but will they really drop to that much?

I hope so!

What constitutes a starter home?
1/2 bed apartments or 3 bed semi's?