April Price Drops Biggest on Record

oceanclub

As an antidote to the usual "we've reached the bottom of the market" shills:

New figures show that falls in house prices accelerated last month, with a particularly sharp fall in house prices for first-time buyers.

The house price index, compiled by Permanent TSB and the ESRI, fell by 1.9% in April, the biggest monthly drop since the index started in 1996. Prices fell at an annual rate of 10.7% in April, up from 10% in March.

The average prices of a house last month was €248,640, down almost €13,000 or 5% from the figure at the end of last year. This brings prices back to levels not seen since the summer months in 2004. The peak, according to the index, was €311,078 in February 2007.

More at:

http://www.rte.ie/business/2009/0527/houses.html

P.

oceanclub

As an antidote to the usual "we've reached the bottom of the market" shills - not only are house prices still dropping, the rate is increasing:

New figures show that falls in house prices accelerated last month, with a particularly sharp fall in house prices for first-time buyers.

The house price index, compiled by Permanent TSB and the ESRI, fell by 1.9% in April, the biggest monthly drop since the index started in 1996. Prices fell at an annual rate of 10.7% in April, up from 10% in March.

The average prices of a house last month was €248,640, down almost €13,000 or 5% from the figure at the end of last year. This brings prices back to levels not seen since the summer months in 2004. The peak, according to the index, was €311,078 in February 2007.

More at:

http://www.rte.ie/business/2009/0527/houses.html

EDIT: Sorry, posting this twice - can a mod delete this thread?

P.

mathie

oceanclub wrote: »

As an antidote to the usual "we've reached the bottom of the market" shills:



More at:

http://www.rte.ie/business/2009/0527/houses.html

P.

So when we see the smallest drops we'll be at the bottom?

oceanclub

mathie wrote: »

So when we see the smallest drops we'll be at the bottom?

Er, no. When house prices are no longer falling (dead cat bounces excepted) is generally considered "the bottom".

P.

oceanclub

To put that into perspective - if you bought a €400K house in March, by April, a month later, you'd "lost" (were in negative equity) to the tune of €8K - 3 months salary for the average person.

And the scary thing is, we haven't even seen a dead cat bounce yet!

P.

Thanos

oceanclub wrote: »

To put that into perspective - if you bought a €400K house in March, by April, a month later, you'd "lost" (were in negative equity) to the tune of €8K - 3 months salary for the average person.

And the scary thing is, we haven't even seen a dead cat bounce yet!

P.

I guess the big question is (and I know this is crystal ball stuff) for how much longer will prices continue to drop??????

For people wanting to buy, while prices are still dropping its not a good time.

oceanclub

Thanos wrote: »

I guess the big question is (and I know this is crystal ball stuff) for how much longer will prices continue to drop??????

Two things:

1. The rate of decrease is accelerating. Before prices level off, that rate itself will have to decrease.

2. We haven't seen a false levelling-off or increase ("dead cat bounce") yet.

P.

Mr. Presentable

Once the mentality changes, and it will, prices will bottom out and start to rise quickly when the thousands sitting on their hands jump into the market.

oceanclub

nipplenuts wrote: »

Once the mentality changes, and it will, prices will bottom out and start to rise quickly when the thousands sitting on their hands jump into the market.

So you're saying that houses are not overpriced and there's no bubble; it's merely sentiment keeping people from buying property?

P.

quozl

nipplenuts wrote: »

Once the mentality changes, and it will, prices will bottom out and start to rise quickly when the thousands sitting on their hands jump into the market.

"the thousands"? But there are hundreds of thousands of empties, what difference would 'thousands' of people make?

You clearly haven't got the slightest clue.

oceanclub

quozl wrote: »

"the thousands"? But there are hundreds of thousands of empties, what difference would 'thousands' of people make?

You clearly haven't got the slightest clue.

I'm sitting on my hands. It's nothing to do with sentiment. It's to do with the fact that property is still overpriced by historical and international standards.

P>

dclare

One thing to keep in mind when considering figures from the Permanent TSB / ESRI Report, is that these figures are based on when the mortgage cheques were issued, rather than when the contracts were signed.

As a result, the figures in their April Report reflect sales prices from at least a few months before. The time it takes from placing a booking deposit on a property to drawing down a mortgage cheque is typically 3 - 6 months.

Are we at the bottom yet? Probably not, but keep in mind that we'll only see the 'bottom' reflected in the Permanent TSB figures 3 - 6 months after it actually happens.

oceanclub

dclare wrote: »

Are we at the bottom yet? Probably not, but keep in mind that we'll only see the 'bottom' reflected in the Permanent TSB figures 3 - 6 months after it actually happens.

Grand, but if property shills are not basing their opinions on actual data, then they should be willing to tell us what data they're actually using. These figures, imperfect as they are, are the nearest to real data that we have.

P.

I.S.T.

Thanos wrote: »

I guess the big question is (and I know this is crystal ball stuff) for how much longer will prices continue to drop??????

For people wanting to buy, while prices are still dropping its not a good time.

If you look at this graph of house prices (ok, I know it related to UK prices) the last peak was in 1989, and it hit the bottom in 1996, that's 5 years. The previous peak was in 1980 and it hit the bottom in 1982. Bearing in mind that this peak is almost twice the height of the previous peak I'd say it will be at least 2013 before we hit the bottom, quite possible longer.

Mr. Presentable

oceanclub wrote: »

So you're saying that houses are not overpriced and there's no bubble; it's merely sentiment keeping people from buying property?

P.

That's not what I said. Please reread my post.

Mr. Presentable

quozl wrote: »

"the thousands"? But there are hundreds of thousands of empties, what difference would 'thousands' of people make?

You clearly haven't got the slightest clue.

How many thousands did I say? How many of your units are

unfinished
in undesirable areas?

Obviously you failed to understand my post.

Mr. Presentable

oceanclub wrote: »

I'm sitting on my hands. It's nothing to do with sentiment. It's to do with the fact that property is still overpriced by historical and international standards.

P>

Yes, and once you decide the time is right (change of mentality, if you will ) you will get into the market.

oceanclub

nipplenuts wrote: »

That's not what I said. Please reread my post.

You say:

"Once the mentality changes"

What do you think will change this mentality?

P.

oceanclub

nipplenuts wrote: »

Yes, and once you decide the time is right (change of mentality, if you will ) you will get into the market.

Sorry, but that's not what "change of mentality" means. If I decide to wait until traffic has passed before I cross the road, and then once it does, I cross, no change of mentality was involved.

P.

TheInquisitor

nipplenuts wrote: »

How many thousands did I say? How many of your units are

unfinished
in undesirable areas?

Obviously you failed to understand my post.

Some turn around from nipplenuts! There won't be a house price rise in Ireland for the next 18 months anyway! We've gotten hit worse than most so obivously after having such a ridiculous house price boom, prices should fall more dramatically than in other countries!

Why are people putting P. at the end of their posts?

quozl

nipplenuts wrote: »

How many thousands did I say? How many of your units are

unfinished
in undesirable areas?

Obviously you failed to understand my post.

Nope, I just didn't bother to give you any more detail as you failed to give the slightest basis for your statement.

These hundreds of thousands, are finished.

Based on the last census data either we have something like 17% of all people owning a second property, or we have massive numbers of completed, empty properties.

That was then. Since then tens of thousands more properties have been completed. More are being completed constantly.

Only a proportion of these are in undesirable locations. That vast majority aren't as developers are not actually retarded. Most of the building was in the cities.

Imagine we have a need for 50k new homes a year, I can't remember the estimations of the real figures I've read, but I think it's more like 40K in actuality.

Say 200k spares. Say 150K are not in the middle of longford. That's 3 years worth, without a single new property being bought.

And the number of empties is increasing. Look at the number of mortgages being drawn down, they're around 1/10th of boom figures. So, how many houses a year are we clearing at that rate? Less than are still being finished.

When supply is vastly greater than demand, then prices will fall.

Also:

Growing Unemployment - ESRI predicting 15%
Dropping affordability - increasing taxes, levies.

And, as Oceanclub said, ridiculously overpriced properties, as a multiple of average wages, compared to the rest of the developed world.

Care to back up your almost criminally stupid statement that this is all because of sentiment and that as soon as people cheer up house prices will rapidly start rising?

oceanclub

TheInquisitor wrote: »

Why are people putting P. at the end of their posts?

Er, that's just me signing off.

P.

Mr. Presentable

quozl wrote: »

all because of sentiment

Ah, right, so I write one thing and you interpret another. I'll allow you the benefit of the doubt on this one - you failed to understand what I wrote. Probably my own fault for not being clear enough, eh?

TheInquisitor

nipplenuts wrote: »

Ah, right, so I write one thing and you interpret another. I'll allow you the benefit of the doubt on this one - you failed to understand what I wrote. Probably my own fault for not being clear enough, eh?

Well i can agree with you on that one. you are making no sense!

oceanclub

nipplenuts wrote: »

Ah, right, so I write one thing and you interpret another.

Well, if you use phrases like "sentiment" and "change of mentality" in a way that no-one else uses, then you're going to have communication problems.

To clarify things, I did ask you - what do you think will cause sentiment/mentality to change?

P.

JOL

Interesting posts.

This might sound simplistic but until the people trying to sell take the hit and bring houses down to the elusive affordable price, no one will know where the bottom is at.

I believe our Government, Financial instutitions and Auctioneers should all get together with their few brain cells between them and agree prices for regions of the country as a guidline of their estimated bottom point to keep the country afloat and get the houses gathering dust moving and stimulate a bit of new building, jobs and revenue creation down the road.

Like the guy in Full Metal Jacket said " It's a big $hit pie and we are all going to have to take a bite"

I really feel people will have to be told what the bottom values are going to be in order to stop the second guessing and stalemate we are in at the moment. I can appreciate that no one coming on to the property ladder ( if you can call it that) Property slide might be more apt, wants to be in negative equity the minute they step onto the property ladder. It is unfortunate that there are a lot of people in negative equity but the only way out of it is to get the housing market moving.

It would benfit our economy no end if we could jump start the property market again, and I would welcome anybodies suggestions as to how it could be done.

ixoy

JOL wrote: »

It would benfit our economy no end if we could jump start the property market again, and I would welcome anybodies suggestions as to how it could be done.

Yep - an economy built upon housing is a great idea! Can't fail!

I'm assuming prices will still fall because people have less money now with the new budget coming into effect and soon with even less than that when we get the December budget. How can these not affect house prices further (and that's before we get to interest rate rises which will happen).

oceanclub

JOL wrote: »

It would benfit our economy no end if we could jump start the property market again, and I would welcome anybodies suggestions as to how it could be done.

It's unbelieveable that someone who lived through a property bubble, and has seen what the damage it has wrecked Ireland's affordability as a tourist and investment destination, could could out with this nonsense. It goes to show that many people still haven't learn the lessons of the bubble.

To put clearly: houses prices have to return to historically tenable prices. We have a generation that has put itself - and in a lot of cases, their parents - into debt they will never get out of in order to climb a mythical "property ladder".

P.

SkepticOne

Will there be a bounce at the bottom? There could be but it depends on a lot of things: the state of the jobs and credit market, the degree of revulsion towards property when the market finally does turn, the degree to which prices overshoot their fair value based on long term multiples of income, etc. Not every market bounces back after a bubble.

If the market were to stop falling now, there might be a few people who would jump in and push prices up, but if the falling goes on for a few more years, these people may get it in their heads that property is something not to be touched under any circumstances and will stay out.

It will be interesting to see what actually does happen.

dan_d

This is a recurring theme around here - when will prices stop falling and things go back to normal. When are irish people going to get it into their skulls that this a correction towards normality??? Normality is 2 people with average - good jobs (I mean teachers/guards/engineers/IT workers...whatever), being able to afford a decent house (3/4 bed) in a decent area, not millionaires row and not miles out from the city centre. There is nothing wrong with house prices dropping (obviously unless you're desperate to sell and you're in negative equity). What is happening now is absolutely inevitable, and was going to happen sooner or later. And will probably continue to happen for quite some time.What's nearly surprising is that prices haven't gone down quicker - I expected there to be more of an immediate crash as opposed to the sliding that's been happening over the last year. Who knows when it will level out? I doubt it's something you can put a timeline on. Or what the bottom level will be??Well, when salaries and job expectations settle enough for people to be able to afford said houses, then that's the bottom line. Does anybody really know what it's going to be? I don't profess to. Unless you're in a hurry to buy, don't waste too much time thinking about it. It will be interesting to see what happens, but more from the point of view that I wonder will it change our obsession with property, and how it will affect the outlook of younger generations on the property market? And more importantly, will any government bring in laws to limit the scale to which it could happen again.....

tedstriker

Here are the house prices for ireland over the past number of years...
http://www.statusireland.com/statistics/property-house-price-statistics-for-ireland/3/Irish-House-Prices-Since-1996.html

and the trend will continue until the average house/apartment is not overvalued. Property downturns don't stopped at an inflated price ever.

BendiBus

oceanclub wrote: »

JOL wrote:

It would benfit our economy no end if we could jump start the property market again, and I would welcome anybodies suggestions as to how it could be done.

It's unbelieveable that someone who lived through a property bubble, and has seen what the damage it has wrecked Ireland's affordability as a tourist and investment destination, could could out with this nonsense. It goes to show that many people still haven't learn the lessons of the bubble.

It depends on what JOL meant.

Getting the property market starting again would be a good thing. A market simply means activity - buying & selling of property. Ideally there would be an active market but at correct prices.

MG

And the April fall doesn't really take into account the supplementary budget effect on take home pay:eek:

gurramok

MG wrote: »

And the April fall doesn't really take into account the supplementary budget effect on take home pay:eek:

Very good point.

Has any of the 'Once the mentality changes, and it will, prices will bottom out and start to rise quickly when the thousands sitting on their hands jump into the market' posters looked at their May wage slip yet?

I have, its down quite a bit.

They(thousands of buyers) may jump in but their purchasing power will be seriously eroded to force prices to 'rise quickly' so what may happen is stability in prices for a very long time.(stability=good)

blah

JOL wrote: »

I believe our Government, Financial instutitions and Auctioneers should all get together with their few brain cells between them and agree prices for regions of the country

Government? Who relied so much on Stamp duty income for the last decade?
Financial Institutions? Who handed out massive mortgages like sweets and now need to be bailed out?
Auctioneers? Who earn more when the selling price is higher?
I don't think they are the best people to do this task, if it was to be done.

JOL wrote: »

It would benfit our economy no end if we could jump start the property market again, and I would welcome anybodies suggestions as to how it could be done.

I have another idea. Instead of building, then buying and selling houses to each other with borrowed money, why don't we produce something? Like raw materials or manufactured goods, if possible. Or knowledge, provide services and most importantly be competitive.

If I can buy a house for €150,000, you don't need to pay me a high salary and I can still afford to live well, and the company I work for can compete and be successful.

Of course Ireland is still largely affected by the world economy, but "jump starting the property market" is not the solution.

Fr0g

It was flagged early on, that the government could either let the market fall and get it over with as soon as possible OR try to prop up the housing market and drag the recession out longer than necessary (as with Japan). It seems they chose the latter so I am afraid we are in this for the long haul. that is why prices have been slow to drop (we are now in the 3rd year of this property crash)

JOL wrote: »

I believe our Government, Financial instutitions and Auctioneers should all get together with their few brain cells between them

I have a better idea. Why don't they all f**k off and leave the market alone and let it correct itself

JOL wrote: »

It would benfit our economy no end if we could jump start the property market again, and I would welcome anybodies suggestions as to how it could be done.

Words fail me :rolleyes:

blah wrote: »

I have another idea. Instead of building, then buying and selling houses to each other with borrowed money, why don't we produce something? Like raw materials or manufactured goods, if possible. Or knowledge, provide services and most importantly be competitive.

Precisely, an economy based on manufacturing and exports. But isn't this what he had before FF decided to replace it with an economy based on a ponzi scheme fuelled by debt?

bobbiw

The market will fall for some time to come.

Wait till Q3 and see the rate of the fall.

The market is correcting itself. Thing is it needed to do that in 2002 not 2008.

By any standards Ireland was overpriced. Why should an ocean view property in California be worth the same as a 3 bed in Rathfarnham.