When will the property market bottom out?

mathie

I searched and didn't find a poll.

So when do you think we will see a bottoming out of the property market?

pwd

I've seen comparisons of trend graphs of the Irish bubble with previous bubbles such as the Japanese, and it appeared that the Irish bubble is so far quite consistent with them. Therefore I think it will remain consistent in its decline and that it will be later than 2012, possibly many years later.

Freddie59

pwd wrote: »

I've seen comparisons of trend graphs of the Irish bubble with previous bubbles such as the Japanese, and it appeared that the Irish bubble is so far quite consistent with them. Therefore I think it will remain consistent in its decline and that it will be later than 2012, possibly many years later.

The lads on www.thepropertypin.com are predicting 2011 as the bottom. They've been right so far.

mrgaa1

from conversations had with builders over the past few days they have seen a HUGE rise in viewings and have received offers on properties. The previous few months were very very quiet. It would appear that news about interest rates going, unfortunately, up plus with good value to be had - there are a lot of places that are still too high - people are looking and thinking about not throwing their money away in rent when they do want to own their own front door.

Firetrap

Ah but how many people who are looking are actually buying?

bangersandmash

mrgaa1 wrote: »

from conversations had with builders over the past few days they have seen a HUGE rise in viewings and have received offers on properties.

Builders told you that? Must be reliable so. Maybe we could ask some estate agents if they can corroborate this? Tomorrow's property advertorial should confirm it.

Next up: Car salesman says now is the time to buy a car.

bren2002

mrgaa1 wrote: »

from conversations had with builders over the past few days they have seen a HUGE rise in viewings and have received offers on properties. The previous few months were very very quiet. It would appear that news about interest rates going, unfortunately, up plus with good value to be had - there are a lot of places that are still too high - people are looking and thinking about not throwing their money away in rent when they do want to own their own front door.

Bear Trap. Plus, rent is not lost money.

amacca

I think the market has a long way to go and it will be a slow and painful process. It seems to me that most of the people that have a house for sale now are forced into selling because they have to move, cant afford the mortgage etc

I believe few sellers at the moment can even contemplate the sort of price drops necessary for their houses to represent even reasonable value to buyers unless they have to. A lot of sellers price expectations are still stuck around levels seen in 2004/2005 whereas a lot of buyers price expectations are way back around levels seen in 1998/1999. Was looking at a house last week with an asking price at around 31 times its annual earnings, an asking price which had already been reduced by 70k (this before those earnings are impacted by said property taxes and falling rents) After thinking about it for a while the lowest offer that was likely to be even entertained would work out to be 20 times its annual earnings which still represents very bad value in any investors language given how unlikely capital appreciation is now. This house wasn't outstanding or in an outstanding area btw. For me highlighted how far prices still have to go and how slow they are in getting there.

I could be wrong (obviously anything can happen in the meantime) but high unemployment, falling wages and increasing taxes (including property tax) means to me that this gap isn't going to get narrower any time soon and it will be definitely after 2012 before appropriately priced property begins trading at normal volumes.

TaxiManMartin

Im seeing a good few people i know start to buy again.
Havent seen this in a long time.
I think we are nearly there.

Duckjob

mrgaa1 wrote: »

people are looking and thinking about not throwing their money away in rent when they do want to own their own front door.

It's true. Thats what I did. I'm currently saving up for my first wall :pac:

Ahh, the old rent = dead money chestnut, change the record will you? or else at least declare your interest. Estate agent?

martian1980

Duckjob wrote: »

It's true. Thats what I did. I'm currently saving up for my first wall :pac:

Ahh, the old rent = dead money chestnut, change the record will you? or else at least declare your interest. Estate agent?

I think he's an EA or involved in the building business - he referred to selling houses before. I've dug out the quote a few times at this stage

stepbar

Was at a breakfast briefing this morning in the RDS. Reckoned the middle of 2010. Have the slides in the car, must have a look over them for the logic behind it (can't just rem, twas a bit too early for taking in high brow info).

EDIT: Actually the slides might be up on www.mko.ie....

stepbar

Duckjob wrote: »

It's true. Thats what I did. I'm currently saving up for my first wall :pac:

Ahh, the old rent = dead money chestnut, change the record will you? or else at least declare your interest. Estate agent?

In certain circumstances it can be cheaper to buy. However long that will last is another question.

Mr. Presentable

Who knows, not I? But I can say that near my work there have been four houses for sale, one for 18 months :eek:, all of which went sale agreed or sold in the last month.

johndaman66

Think the "rent is dead money" argument is kinda dead in the water now the way that the market is. I think to say for example the housing market will bottom out in Q2 2011 is a complete shot in the dark as there are many things which can change in the meantime/ after which either cannot or cannot be predicted with certainty at this point in time. A damn lot of people thought house price were on the way up indefinately in 2005 and well look whats happened since.

One thing though is that I wouldn't expect to see any sizeable gains after prices bottom out. So I wouldn't worry too much about not buying at the right time.

I would like to ask people in general who voted in the poll why they picked the particular quarter they chose as oppossed to any other quarter. What was yer basis or logic in making yer choice

BendiBus

mathie wrote: »

I searched and didn't find a poll.

So when do you think we will see a bottoming out of the property market?

How do you define the bottom of the market? Prices or activity?

I expect activity will begin to increase long before prices do. So (dubious) evidence any level of sales is no indicator of an end to the fall in prices.

Eventually rising activity will meet falling prices and normality will return for a while. But not before employment and banking have clearly stabilised. So I expect it will be after 2010. Around Q2 of 2011 would be my guess at when prices level off in real terms. But I also expect the rate of price falls will taper off between now and then.

Strictly a 'finger in the air' estimate.

amacca

nipplenuts wrote: »

Who knows, not I? But I can say that near my work there have been four houses for sale, one for 18 months :eek:, all of which went sale agreed or sold in the last month.

Round my way its not unheard of for an estate agent to put sale agreed on a house if its been up for what they consider to be too long just so they can generate the impression of a sale (panic genuinely interested buyers into putting up some more cash) whereas in fact it may not be sale agreed at all. Seems to be easy to back out/explain it away afterwards if it doesnt work saying the buyer couldn't get the loan after all, couldnt sign the contract, had a change of circumstances etc. This is a long time back before the boom but I knew of two properties in phibsborough that were sale agreed and then up for sale again with a different ea a couple of months later. + doesnt look good to have something up for sale for so long with no action, gives the buyer too much bargaining power.

There a sneaky lot these estate agents.

If theyve actually sold then maybe sellers are letting them go at a reasonable price afterall or else it couls be the property market equivalent of a dead cat bounce.

(Of course my opinion of what a reasonable price might be and everyone elses could be.....different:eek:)

Senna

An increase in sales could be happening and even if it is, that does not mean we are at the bottom. We are in the stages of a bust, a particular bad bust by international standards, but even during this time some house are being bought, just at very low volumes.
Its quite possible that some people who have been relatively unaffected by the the recession (there are some) see now as a good time to buy, and so will buy. But a (small) increase in sales doesn't really mean anything. There are 70k (i suspect more) house for sale and 350k empties. Its these that will ensure a long drawn out journey to the bottom.
FTB's and investors are needed to bring these number down, people trading up/down will not affect these numbers. I know there are few investors seriously considering jumping back into the market and i think FTB's are still afraid as they see further price drops or they dont have the deposit needed or the means to service a mortgage (from the banks perspective).

I voted for 2012+ as i think it will be much longer, near the bottom we will have only a small decrease in prices, maybe 2-4% per annum. Even if we had 0% change year on year we would still be in a falling market, unless were in deflation. The bottom wont be a single yearly quarter, its likely to be a stable market lasting years.

Duckjob

stepbar wrote: »

In certain circumstances it can be cheaper to buy. However long that will last is another question.

Smaller monthly repayment (for the moment) does not = Cheaper

The whole "cheaper to buy" thing is just another line of bull**** being spun out by estate agents and other VIs in order to flog their wares.

...and thats not even getting into the fact it's based on interest rates that WILL go back up several percent when Europe starts to pull out of recession.

To me, cheaper to buy means if I buy now, the total amount I pay to own my home (over 25 yrs or whatever) is less than if for example, I stay renting for another 2yrs and then buy.

Do I believe I would pay less in total for a mortgage for a house today than I would for 2 yrs rent + a mortgage for the same house in 2 yrs ? Not on your nelly....

green-shoots

I have bought and a lot of my friends have also . I have property already and some cash set aside There are good deals out there in Property when you consider that building providers costs have not dropped and houses are not going to get any cheaper to build with all new regulations .Watch out for square footage though and make sure that you compare size and price Property adjacent to motorways sells and rents ,These will really appreciate when the market pops back . Borris In Ossory is good .Very big houses and gardens and motorway is just about ready Now is the time to buy before the roadway opens . Great up Balbriggan direction also .Good deals .Kilcock beside railway station .I think these are all good buys .The property market will come back when confidence comes back and i think it will shoot up quickly like it did in England and that is why I got back in now

green-shoots

Banks are offering fixed price mortgages which is usually a sign that interest rates are on the way down again .


which is another pointer as to the market trend

Senna

green-shoots wrote: »

I have bought and a lot of my friends have also . I have property already and some cash set aside There are good deals out there in Property when you consider that building providers costs have not dropped and houses are not going to get any cheaper to build with all new regulations.

Costs have not dropped?? Funny how to build a 2000sq ft house in my area cost 110e per sq ft in early 2007 and now costs 60e. (same plans used for both)
A huge cost with building during the boom was labour and expected profit, do you think their both the same? I dont know about raw building materials, i think they are cheaper, but i do know that the cost of fitting out a house has dropped immensely. Who are you kidding, either you dont know what your talking about or have made a very foolish decision if this is the information you're basing it on.

green-shoots wrote: »

The property market will come back when confidence comes back and i think it will shoot up quickly like it did in England and that is why I got back in now

So your getting in for Celtic Tiger part 2:rolleyes:
What are you basing this on? hope?

green-shoots wrote: »

Banks are offering fixed price mortgages which is usually a sign that interest rates are on the way down again .


which is another pointer as to the market trend

What?? their offering fixed mortgage rates? If rates were 20% they would still offer fixed rates.
Rates are on their way up again, which is a great reason to hold on. Bigger mortage now and lower rates for another year maybe OR smaller mortgage and rates wont have as big an effect?? which makes sense??

Who are you?? an Estate agent?? or investor way out of their depth??

beeno67

Senna wrote: »

I voted for 2012+ as i think it will be much longer, near the bottom we will have only a small decrease in prices, maybe 2-4% per annum. Even if we had 0% change year on year we would still be in a falling market, unless were in deflation. The bottom wont be a single yearly quarter, its likely to be a stable market lasting years.

I thought we were looking at deflation of 5% this yaer.

irlrobins

green-shoots wrote: »

Borris In Ossory is good .Great up Balbriggan direction also .Good deals .Kilcock beside railway station .I think these are all good buys

You're joking right? These places like these in the commuter belt have experienced the greatest falls in value, mainly because people realised that paying over the odds and then commuting 2 hours + every day was not viable. I don't see the prices going up in these places for a very long time and will probably lag any price increases overall in the market.

gurramok

TaxiManMartin wrote: »

Im seeing a good few people i know start to buy again.
Havent seen this in a long time.
I think we are nearly there.

Elaborate, are they FTB's?

So, we are nearly near the bottom when the prices are still too high with 12% rising unemployment along with tax rises and private sector wage freeze/cuts, pull the other one.

green-shoots wrote:

Borris In Ossory is good .Very big houses and gardens and motorway is just about ready Now is the time to buy before the roadway opens . Great up Balbriggan direction also .Good deals .Kilcock beside railway station .I think these are all good buys

Nice nickname. Where exactly is Borris In Ossory?

Must get down there pronto to buy

beeno67 wrote: »

I thought we were looking at deflation of 5% this yaer.

Don't be fooled, this is primarily due to interest rates falling over the last yr.

Duckjob

Senna wrote: »

Who are you?? an Estate agent?? or investor way out of their depth??

...investor invested in Borris In Ossary and/or Balbriggan I'm guessing :pac:

When someone tries to convince you the current prices are "deals" alarm bells should start ringing....

beeno67

gurramok wrote: »

Don't be fooled, this is primarily due to interest rates falling over the last yr.

Sure, but it is almost 2% excluding interest rates and considering this has mainly occured since Jan, I think we can reasonably expect deflation of about 4- 5% for 2009 as a whole. Excluding interest rate cuts or rises later in year. Add to that we will almost certainly have deflation next year. So house price rises would seem a long way off. However prices only dropping a further 3-4% this year may indicate stabilisation of the market.

ronbyrne2005

During boom when mortgage rates where around 5% inflation was close to that so the Real rate of Interest was around 0%. Now in this period of negative inflation the real rateof interest in much higher than nominal 2 or 3% mortgage rate.

CiaranC

amacca wrote: »

A lot of sellers price expectations are still stuck around levels seen in 2004/2005 whereas a lot of buyers price expectations are way back around levels seen in 1998/1999. Was looking at a house last week with an asking price at around 31 times its annual earnings, an asking price which had already been reduced by 70k (this before those earnings are impacted by said property taxes and falling rents) After thinking about it for a while the lowest offer that was likely to be even entertained would work out to be 20 times its annual earnings which still represents very bad value in any investors language given how unlikely capital appreciation is now.

If this is the case generally, and people are predicting a bottom of the market at 2011/12, wouldnt this suggest that a crash is still to come?

beeno67

ronbyrne2005 wrote: »

During boom when mortgage rates where around 5% inflation was close to that so the Real rate of Interest was around 0%. Now in this period of negative inflation the real rateof interest in much higher than nominal 2 or 3% mortgage rate.

Sure. That makes the cost of borrowing higher but not the actual cost of the property.

mathie

BendiBus wrote: »

How do you define the bottom of the market? Prices or activity?

I expect activity will begin to increase long before prices do. So (dubious) evidence any level of sales is no indicator of an end to the fall in prices.

Eventually rising activity will meet falling prices and normality will return for a while. But not before employment and banking have clearly stabilised. So I expect it will be after 2010. Around Q2 of 2011 would be my guess at when prices level off in real terms. But I also expect the rate of price falls will taper off between now and then.

Strictly a 'finger in the air' estimate.

Prices.
The average accoring to the ESRI.

gurramok

beeno67 wrote: »

Sure, but it is almost 2% excluding interest rates and considering this has mainly occured since Jan, I think we can reasonably expect deflation of about 4- 5% for 2009 as a whole. Excluding interest rate cuts or rises later in year. Add to that we will almost certainly have deflation next year. So house price rises would seem a long way off. However prices only dropping a further 3-4% this year may indicate stabilisation of the market.

Its energy dependent as well. Throw in the price decreses from the ESB and Bord Gais and both are still dearer than last year.

Oil prices have risen to 72$ a barrel, steady upstream over the last few months. Petrol is retailing at 1.17-1.19 a litre now, was a euro a litre at Xmas.

Expect both utility companies to cry to the regulator for increases again as that barrel price keeps going up, give it 6 months.

These rises(oil dependent) will all fuel through to higher interest rates to combat inflation(ECB) and couple with the lack of deflation in other sectors, expect deflation to pether out within a year where the average consumer will really be screwed.

Throw in tax rises and wage cuts and those trackers mortgages tracking higher interest rates, banking difficulties(NAMA & raising finance on money markets)...
all this basically means is the consumer will have less money to buy anything and that includes high priced houses hence expect price falls to continue.

amacca

CiaranC wrote: »

If this is the case generally, and people are predicting a bottom of the market at 2011/12, wouldnt this suggest that a crash is still to come?

I cant claim to be much of an expert on this or even a well informed novice but I have been looking around in parts of dublin and the midlands and as far as I can see this is the case in those areas if not in general.

I do believe that there is more of a "crash" in the real sense of the word coming. If the lowest offer thats likely to be even entertained as a starting point for a negotiation is 20 times annual earnings (not even factoring in probable decreases to those earnings) then sellers expectations are way too high and they will only come down when they are forced down. This will imo be a very slow process.

If I owned a property in a midlands town(say a 4 bedroom semi d) that was selling for €330-360k €340k in 06/07, Im unlikely to want to let it go for €140k now which is what it should be valued at by rights. Lets say its in a great area and I throw on another 40k for this, thats an offer €180k which is still €150 -180k behind what my house used to be worth and I still desperately want to believe its worth. If I was this seller Id have a hard time wrapping my head around this and Id only sell if it was forced upon me despite the fact that I may want to move etc.

As I said before It will take ages in my opinion for houses to start shifting in volume at reasonable prices. People will only sell at these prices when they are put to the pin of their collar.

oceanclub

bangersandmash wrote: »

Builders told you that? Must be reliable so. Maybe we could ask some estate agents if they can corroborate this? Tomorrow's property advertorial should confirm it.

Next up: Car salesman says now is the time to buy a car.

Every time I read a mrgaa1 post, a brain cell dies.

P.

donaghs

Since this was first posted yesterday (17th June 09), how come 4 people said property would bottom out in Q2 2009?

Does that mean that they believe prices will start rising next month?! Some suspiciously over-optimistic people out there.

Freddie59

donaghs wrote: »

Since this was first posted yesterday (17th June 09), how come 4 people said property would bottom out in Q2 2009?

Does that mean that they believe prices will start rising next month?! Some suspiciously over-optimistic people out there.

Saw that alright.

As for mrgaa1's comment that "from conversations had with builders over the past few days they have seen a HUGE rise in viewings and have received offers on properties" I would refer to the car salesman comment offered above.

We went to view a stagnant new development recently. The EA proudly declared that she never, in her wildest dreams, thought that she would shift 19................................brochures that afternoon. Kinda says it all really.

indian music

Duckjob wrote: »

...investor invested in Borris In Ossary and/or Balbriggan I'm guessing :pac:

When someone tries to convince you the current prices are "deals" alarm bells should start ringing....

:eek:I just bought a house further on from Balbriggan up the motorway towards Drogheda and I thought I got a good deal. Some current prices are below cost so we are getting the builders profit . That is a good deal to me .I needed to buy a house and I am very happy with what I got .I have a good few friends buying also .We got a deal on legal fees from a solicitors firm in town and we got great value all round

oceanclub

indian music wrote: »

:eek:I just bought a house further on from Balbriggan up the motorway towards Drogheda and I thought I got a good deal. Some current prices are below cost so we are getting the builders profit .

Oh, I thought the usual story was that builders couldn't sell below cost.

P.

SkepticOne

indian music wrote: »

:eek:I just bought a house further on from Balbriggan up the motorway towards Drogheda and I thought I got a good deal. Some current prices are below cost so we are getting the builders profit . That is a good deal to me .I needed to buy a house and I am very happy with what I got .I have a good few friends buying also .We got a deal on legal fees from a solicitors firm in town and we got great value all round

At some point builders are going to have to shift their unsold inventory whether or not it makes a profit. If you can't sell to maximise profit then you have to sell to minimise loss.

It is no different than if I overpaid for some commodity a year ago that is now going down in price. The longer I hold on to that commodity the more money I lose. I may never make a profit but I can ensure that the loss is minimised.

Or I can gamble that there will be some recovery in the market. But if I have borrowed and am paying interest that may not be an option.

What I can't do is expect the buyer to be concerned about my bad decision to overpay a year ago.

Shambo

It is great to see that just under 90% of people who replied are not falling for this nonsense that the market is close to bottoming out, maybe a sign that Irish people have finally woken up to the bulls**t peddled by EA and builders.

Daft.ie alone has 75.000 houses for sale at the minute and don't forget that a great many of those houses are from ghost estates where they put one house on the site to represent the 60/70/80 other houses that are not selling either.

Actually, I have an idea for another poll....

ntlbell

Shambo wrote: »

It is great to see that just under 90% of people who replied are not falling for this nonsense that the market is close to bottoming out, maybe a sign that Irish people have finally woken up to the bulls**t peddled by EA and builders.

Daft.ie alone has 75.000 houses for sale at the minute and don't forget that a great many of those houses are from ghost estates where they put one house on the site to represent the 60/70/80 other houses that are not selling either.

Actually, I have an idea for another poll....

you can't take the people who visit this forum as the general populas

the vast majority will believe what they read in the papers or what some idiot tells them.

Sand Wedge

Good to know that alot of people think that property not going to bottom out until 2012. Less people to compete with for bargains in 2010.

Shambo

ntlbell wrote: »

you can't take the people who visit this forum as the general populas

the vast majority will believe what they read in the papers or what some idiot tells them.[/quote]

Erm, if that was the case houses would be selling like mad now as all the vested interests are telling them ther has never been a better time to buy

TaxiManMartin

ntlbell wrote: »

you can't take the people who visit this forum as the general populas

the vast majority will believe what they read in the papers or what some idiot tells them.

The vast majority will think about buying only when they are no longer worried about their jobs.

Sweet Sue

bangersandmash wrote: »

Builders told you that? Must be reliable so. Maybe we could ask some estate agents if they can corroborate this? Tomorrow's property advertorial should confirm it.

Next up: Car salesman says now is the time to buy a car.

I work in an estate agents .Viewings are good and interest is good . The people who are buying know what they want and move quickly to get it over the line once the decision is made to go ahead . That has been my experience over the past while.:)

gurramok

Sweet Sue wrote: »

I work in an estate agents .Viewings are good and interest is good . The people who are buying know what they want and move quickly to get it over the line once the decision is made to go ahead . That has been my experience over the past while.:)

A little bit of activity don't mean the bottom is here.

I suspect they are just taking advantage of lower interest rates while they can while the rest of the prospective buyers are err examining their May pay cheque from the latest tax rises

newestUser

There's either a troll at work on this thread, or someone with a vested interest is creating new accounts to ramp property. Has anyone commented yet on all these new users (not me though!) signing up to tell us that it's never been a better time to buy in Borris-in-Ossory, or that business in the estate agents they work in is brisk?

Shambo

newestUser wrote: »

There's either a troll at work on this thread, or someone with a vested interest is creating new accounts to ramp property. Has anyone commented yet on all these new users (not me though!) signing up to tell us that it's never been a better time to buy in Borris-in-Ossory, or that business in the estate agents they work in is brisk?

Surely not, EAs are a very honest bunch and would not resort to telling us that all is well;)

Freddie59

Sweet Sue wrote: »

I work in an estate agents .Viewings are good and interest is good . The people who are buying know what they want and move quickly to get it over the line once the decision is made to go ahead . That has been my experience over the past while.:)

What is the ratio of viewings v actual purchases? Where (roughly) are you located?

Sweet Sue

newestUser wrote: »

There's either a troll at work on this thread, or someone with a vested interest is creating new accounts to ramp property. Has anyone commented yet on all these new users (not me though!) signing up to tell us that it's never been a better time to buy in Borris-in-Ossory, or that business in the estate agents they work in is brisk?

:rolleyes:I signed up because I wanted to join in the discussion about the property market . This is my job and I am interested in what people have to say about the property market because I work at the coal face in it and have done for years . I wanted to get across to you what I think .I did not say that it was a good time to buy .I said that there were people buying now and that is my experience I did not say that there was never a better time to buy in Borris in Ossory or that business was brisk. A good time for someone to buy is when they feel they want to buy and have found a house they would like to live in and which ticks the boxes for them .

I have recently sold to clients who were very satisfied with the houses they purchased and the prices they paid for them .

Possibly there are good deals in Borris in Ossory I dont know that neck of the woods

Is this site an exlusive zone for moaners ?:):):)

Sweet Sue

Freddie59 wrote: »

What is the ratio of viewings v actual purchases? Where (roughly) are you located?

Freddie The people who are viewing are the ones who have made up their minds to buy somewhere now. There are not a lot of casual viewers out like there were. On Saturdays and Sundays you had up to thirty to forty people at a viewing or more sometimes Now it is 3/4 couples . We are in a chain of offices I work in the Dublin area and am in showhomes at week ends . We are getting a number of sales each week though which is the first steady set of sales for a long time .:)