Why are Estate Agents calling it a property ladder?

bobbiw

Why oh why. I know they are brainless, but its like someone trying to convince me that GM is a thriving business or to buy shares in Lehman brothers.

There is a property ladder but the only direction it is going is down.

If you go out and buy a house today for 300k all models are showing that it will be worth a lot less than that in a year.

Its not going to drop by 5-10k and then come back in a couple of years, its going to drop by at least 100k+ and then not recover for decades.

People were talking about this in 2002 and saying that there was going to be a correction. If there was at that stage people would have got off lightly.

Now Ireland is headed to the largest property price correction on earth.

And still they say get on the property ladder.

If I was in Ireland I would just rent, your better off. Its not dead money anything breaks you dont pay to fix it.

And of course in 2-3 years you can pick up that 3 bed semi for 95k rather than 300k.

Better than being the other way around right???

johnnyskeleton

Sorry, which of the bobbies are you again?

D3PO

bobbiw wrote: »

And of course in 2-3 years you can pick up that 3 bed semi for 95k rather than 300k.

Better than being the other way around right???

66% asset price drop in 3 years. what evidence do you have to back that up ?

Quite a lot of debate saying Mcwilliams 50% reduction prediction is too high so its fair to say not many people would agree prices will drop 66%

Victor

bobbiw wrote: »

And still they say get on the property ladder.

Of course they are, they're selling.

WarrenB

D3PO wrote: »

66% asset price drop in 3 years. what evidence do you have to back that up ?

Quite a lot of debate saying Mcwilliams 50% reduction prediction is too high so its fair to say not many people would agree prices will drop 66%

Not so many people agreed when he said there would never be a "soft landing" as banks and the government had touted and now this is a reality.

When it comes to property, irish people stick their head in the sand and dont want to listen.

partyguinness

WarrenB wrote: »

Not so many people agreed when he said there would never be a "soft landing" as banks and the government had touted and now this is a reality.

When it comes to property, irish people stick their head in the sand and dont want to listen.

The funny thing about a "soft landing" was that there is no such thing.

Nobody could come up with one single example from history to show a "soft landing". It was bull****.

All part of the grand delusion the vested interests tired to play obe everyone. Looks like they were just fooling themselves.

Where is Dan McLoughlin now?

The idea of a "Soft landing" was a scam and the phrse shoule never be repeated again.

partyguinness

WarrenB wrote: »

Not so many people agreed when he said there would never be a "soft landing" as banks and the government had touted and now this is a reality.

When it comes to property, irish people stick their head in the sand and dont want to listen.

Yeah where is Dan Mcloughlin now? very quiet these days.

The notion of a soft landing was complete bull****. When anyone who went on about a "soft landing" was asked to show examples in economic history of a soft landing..they couldnt..because it never existed...:mad:

It was all part of the delusion that the banks tried to pull over our eyes.

AARRRGH

I was at a party last year and the homeowners and someone who just bought were telling me "now is the time to buy" and "you'd be mad not to buy now, the value is out there".

I don't know if they really believed what they were saying, or if they just get comfort from knowing more people will be in the same boat as them.

SoupyNorman

AARRRGH wrote: »

I was at a party last year and the homeowners and someone who just bought were telling me "now is the time to buy" and "you'd be mad not to buy now, the value is out there".

I don't know if they really believed what they were saying, or if they just get comfort from knowing more people will be in the same boat as them.

I finished college in ’07, got a decent job and my first big purchase in Jan ‘08 (kind of present to myself) which was a flat screen TV.

The price on the sticker was €1200, I managed to get the tv for €999, 2months later the tv was selling for €769. That took me
A couple of months to get over.

So I shudder to think what that feeling amplified to a 6digit number would feel like!

backboiler

bobbiw wrote: »

...And still they say get on the property ladder...

partyguinness

AARRRGH wrote: »

I was at a party last year and the homeowners and someone who just bought were telling me "now is the time to buy" and "you'd be mad not to buy now, the value is out there".

I don't know if they really believed what they were saying, or if they just get comfort from knowing more people will be in the same boat as them.

Safety in numbers....

oflahero

This is where I get to sound like one of those goms standing up on the bus in that old "I don't know what a tracker mortgage is" ads, but...

I never got the concept of a "property ladder". The idea sold by the lads in the shiny suits and fat ties was that you buy your starter home, and then you're on the conveyor belt. In a few years, as your gaff appreciates, you trade up. And a few years after that, trade up again, til you've got that seaside mansion of your dreams on an acre, and those moany doom-mongers who insisted on renting (renting! imagine) are still stuck with nothing but their empty dreams and inflation-eroded savings.

What I never "got" about that is the whole concept of 'trading up'. The value of your stately pile appreciates (we're still assuming the prices-rising-forever dreamland, of course). But so is everywhere else. Just by getting on a 'rung' of this 'ladder', all you're doing is *fixing* yourself to a certain price level in the market. You go to sell your house a few years on, sure, it's gone up by 60k. But the gaff you want to buy now sure as hell has gone up 60k as well. The only other factor here is if you assume that your income goes up steadily from your early 20s to your 50s - a big if - but also going up will be your outgoings, if kids enter the equation.

So the same is now happening in reverse. You buy a gaff now, go to sell it in a few years, it'll have dropped in value, but so will the prices of the available pool of houses. You're back where you started when you bought the first gaff. This notion of a 'ladder' is an EA-sponsored crock, and always was.

zAbbo

bobbiw wrote: »

Why are Estate Agents calling it a property ladder? Reply to Thread

Because Property Snake doesn't sound as good

bobbiw

johnnyskeleton wrote: »

Sorry, which of the bobbies are you again?

I am the one who lives in Los Angeles.

Kipperhell

I think people are thinking that the property ladder is just dependent on prices going up. If you actually consider how things are you can still move up the property ladder once you aren't in debt. Being in negative equity is a completely different kettle of fish.

The value difference to the next property is all that matters. It still remains a property ladder it is just about the timing of you stepping on. The fact it is difficult to sell and borrow doesn't negate the idea just makes it more difficult to operate.

The reality is prices don't drop equally or rise equally so buying the right property at the right time means you can make money .

The people who say there is still a huge drop are actually advocating using the ladder notion. Sell you house now take what you can wait and then buy again going up the ladder.

You can buy now build an extension using current cheap labour costs wait then buy again later which can be aided by house price rises. There is a program here where the presenter points out that you should never rely on the market and it is called "Property Ladder"

bobbiw

my point is that estate agents saying property ladder is very misleading.

There is no advantage in buying property in Ireland at the moment.

Again there is absolutly no advantage.

Prices are going to drop by at least another 12-15% this year and that will reduce further next year.

For people who bought recently, well there is nothing you can do. You still have a place to live.

People have been talking about the bubble bursting since 2001. Now it is happeneing, problem was the bubble got way much bigger.

Seriously do you really think a 3 bed in Raheny should be the same price and a 3000 sq ft 5 bed home by the ocean in Laguna Beach, California.

whizzbang

Why Property Ladder?

1. Its catchy
2. Sounds solid and stable, you can go up and down in a controlled fashion
3. It ingrains the notion of always having one more step to climb up. "This house is not good enough, I want the NEXT house up the ladder" a great way of making people unhappy with what they currently own. There is no top to the property ladder
4. Makes use of the notion of "Bottom rung", its a place everyone has to start but you don't want to stay there. Encourages upgrading.
5. Its a short phrase that sums up people's hope of making it big in the property market by doing little work. Saves you having to think about it when reasoning it out "I have to get on the property ladder" is easier than "I have to invest in a fixed asset that may or may not appreciate to a greater amount that my wage increase or standard inflation yadda yadda yadda"
6. Once it got into widespread use it became a badge of honour, a way of identifying yourself as part of an elite group "I'm on the property ladder", thus making everone who was not "on the ladder" inferior. This harks back to old landlord/tenant insecurities we have.

Pretty similar in many ways to fashion (Have/have nots, must upgrade, not being happy with current possessions etc), car purchases (starter car, always a higher spec/model to get, sign of wealth and position) etc. Property industry just came up with a catchy phrase for it is all.

Helix

bobbiw wrote: »

Why oh why. I know they are brainless, but its like someone trying to convince me that GM is a thriving business or to buy shares in Lehman brothers.

There is a property ladder but the only direction it is going is down.

If you go out and buy a house today for 300k all models are showing that it will be worth a lot less than that in a year.

Its not going to drop by 5-10k and then come back in a couple of years, its going to drop by at least 100k+ and then not recover for decades.

People were talking about this in 2002 and saying that there was going to be a correction. If there was at that stage people would have got off lightly.

Now Ireland is headed to the largest property price correction on earth.

And still they say get on the property ladder.

If I was in Ireland I would just rent, your better off. Its not dead money anything breaks you dont pay to fix it.

And of course in 2-3 years you can pick up that 3 bed semi for 95k rather than 300k.

Better than being the other way around right???

youre asking why estate agents want you to buy property?

seriously?

Kipperhell

bobbiw wrote: »

my point is that estate agents saying property ladder is very misleading.

There is no advantage in buying property in Ireland at the moment.

Again there is absolutly no advantage.

Prices are going to drop by at least another 12-15% this year and that will reduce further next year.

For people who bought recently, well there is nothing you can do. You still have a place to live.

People have been talking about the bubble bursting since 2001. Now it is happeneing, problem was the bubble got way much bigger.

Seriously do you really think a 3 bed in Raheny should be the same price and a 3000 sq ft 5 bed home by the ocean in Laguna Beach, California.

Then you completely don't understand what the term means. It will remain the property ladder for ever it just isn't a good idea to jump on. The same way the market still exists even when prices are falling.

People were talking about the bubble bursting in 1997 too :eek:

I don't think a days work of a banker should pay 1000 times what could feed a child for a year but it happens. I also don't think the x box should be cheaper in the US or that US work rights should be less than that here but again it happens.

bobbiw

Kipperhell wrote: »

Then you completely don't understand what the term means. It will remain the property ladder for ever it just isn't a good idea to jump on. The same way the market still exists even when prices are falling.

People were talking about the bubble bursting in 1997 too :eek:

I don't think a days work of a banker should pay 1000 times what could feed a child for a year but it happens. I also don't think the x box should be cheaper in the US or that US work rights should be less than that here but again it happens.

Prices in Ireland were well overpriced. Based on the long term economic prospects for the country.

Still some people made some good money out of it so fair play to them.

Ordinary man

The whole idea of the property ladder in Ireland has been forgotten. The idea is that first time buyers buy a cheap house(maybe one needing work) do up the house over a period of time and sell it for a profit. Then they upgade.

In Ireland first time buyers want to buy a new 3/4 bed house with all mod cons for as much as the banks will give them. Its the " i want it all now" syndrome:rolleyes:

Kipperhell

Ordinary man wrote: »

The whole idea of the property ladder in Ireland has been forgotten. The idea is that first time buyers buy a cheap house(maybe one needing work) do up the house over a period of time and sell it for a profit. Then they upgade.

In Ireland first time buyers want to buy a new 3/4 bed house with all mod cons for as much as the banks will give them. Its the " i want it all now" syndrome:rolleyes:

You don't need to make a profit to go up the property ladder it is a misconception that you need to.

Instant gratification is an issue but waiting for a long time to make a decision can mean you end up years behind. If you are paying rent for a few years and save the difference of what a mortgage would be you could end up in a better financial situation but also not always. I know some people that tried this and didn't manage to keep their savings and also those who lost money with stocks. I would love to know if all the people who invested their money in stocks to wait out the property market actually still have their money. I would think most would have been better off with property even with a loss.

Age is a big factor too. If you decided to wait for a crash in 2002 at the age of 32 and are now waiting further you could easily be in your mid 40s before buying. Nothing wrong with that as such but compared to somebody who bought in 2000 at 30 you could feel a bit behind.

If you only ever look at the financial elements you miss the difference between buying a property and buying a home. I think some people bought some silly properties but it doesn't make every purchase for the past 10 years stupid idea especially considering those with families.

sneakyST

Kipperhell wrote: »

........but it doesn't make every purchase for the past 10 years stupid idea especially considering those with families.

Exactly right Kipper.....I bought at 22 in 2001 because I wanted my own home. I was renting with the g/f and sharing with two others. I hated it. It made more sense to pay less for a mortgage then rent a house on our own
We planned to stay in the house till our family got too big for it......not everyone is greedy.......