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phew! all over .. property prices to rise 10% this year [Irish Times]

  • 10-01-2010 12:14PM
    #1
    Closed Accounts Posts: 2,023 ✭✭✭


    PROPERTY PRICES will bottom out in the first half of 2010 and may rise by as much as 10 per cent by the end of the year, managing partner of Bloxham Stockbrokers Pramit Ghose has predicted
    Among the “unusual investment possibilities” included in Mr Ghose’s “surprise” list is the expectation that the recapitalisation of the two major Irish banks, AIB and Bank of Ireland, will be greeted enthusiastically by private investors.

    Nationalisation of the banks will thus be avoided, he predicts, and will facilitate the recovery of their share prices over the coming years.

    Mr Ghose also predicted that the share prices of both banks will break the €3 mark again at some point this year.

    Great news for the economy .. fill ur boots :pac:


«134

Comments

  • Registered Users, Registered Users 2 Posts: 3,143 ✭✭✭Sarn


    Difference in opinions.

    07/01/10
    Alan McQuaid, Chief Economist, Bloxham Stockbrokers, commenting on the latest Daft research on the Irish property market.
    I would expect house prices to drop another 10-15% on average this year, with Dublin again seeing the biggest decline. But as prices start to recover, Dublin should see larger gains than elsewhere, though the major cities should quickly follow the upward trend of the capital.


  • Closed Accounts Posts: 9,364 ✭✭✭ei.sdraob


    long thread here already anyone interested

    http://www.thepropertypin.com/viewtopic.php?f=4&t=27410


  • Registered Users, Registered Users 2 Posts: 4,235 ✭✭✭The_Honeybadger


    I'm no expert on the property market but where I live has so many unsold (and many unfinished) houses I really cant see how this could happen in my area. Myself and my partner are also discussing moving to cheaper rented accomodation in a less in-demand area so I have been keeping an eye on the houses for rent on daft for the past six months or so. As far as I can see the same houses that were up there six months ago are still there, so the rental market cant exactly be flying either, I realise this is totally anecdotal before anybody jumps down my throat with stats. I heard Mr Ghose speak once at a conference in Galway in 2002 and he was actually boasting on the podium about properties he owned in the capital as he was laying out his credentials to the crowd, perhaps he has a vested interest in the market recovering. Until the banks start giving finance to first time buyers again there is no hope of a recovery anyway. And don't forget the wave of reposessions coming down the line as people can no longer afford their monster boomtime repayments and they hand back the keys to the banks.


  • Registered Users, Registered Users 2 Posts: 27,644 ✭✭✭✭nesf


    Amusingly optimistic. :D


  • Registered Users, Registered Users 2 Posts: 9,351 ✭✭✭ninty9er


    Why can't the econotwits get this:

    WE DON'T WANT HOUSE PRICES TO RISE! WE WANT AFFORDABLE HOMES!


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  • Closed Accounts Posts: 8,983 ✭✭✭leninbenjamin


    nesf wrote: »
    Amusingly optimistic. :D

    Not necessarily. Exports are doing ok, which means there's a sizeable enough population in the private sector who've bypassed a lot of the recession. And whatever the public sector chose to moan about, pay rates are healthy and so is job stability for the vast majority. All in all a sizeable sector of the population have been completely bypassed by the recession, and are just sitting on the sidelines waiting for things to completely bottom.

    For example, friends of friends are in the market for a house have maintained that they are noticing prices have stabilised. They reckon prices bottomed out here in Galway around Sept. and have even gone so far as to say they have noticed in some areas they are creeping up again.

    Remember, the statistics on empty houses and that are skewed by many holiday homes and complexes built for the purpose of tax avoidance, not necessarily because there was any market demand to begin with, so I find it hard to read too much into any information on the property market. It's all in people's heads tbh.


  • Registered Users, Registered Users 2 Posts: 6,584 ✭✭✭PCPhoto


    are these the same economists that have been saying for the past twelve months that house prices will drop only 10-15%..... ok maybe 20%....... no wait ... 25%....... erm.... maybe 30% .... erm... in some areas 30-40%.

    FFS....it took most economists in this country 6 months before they realised we were in a recession.


  • Registered Users, Registered Users 2 Posts: 901 ✭✭✭cbreeze


    mickeyk wrote: »
    I'm no expert on the property market but where I live has so many unsold (and many unfinished) houses I really cant see how this could happen in my area. Myself and my partner are also discussing moving to cheaper rented accomodation in a less in-demand area so I have been keeping an eye on the houses for rent on daft for the past six months or so. As far as I can see the same houses that were up there six months ago are still there, so the rental market cant exactly be flying either, I realise this is totally anecdotal before anybody jumps down my throat with stats. I heard Mr Ghose speak once at a conference in Galway in 2002 and he was actually boasting on the podium about properties he owned in the capital as he was laying out his credentials to the crowd, perhaps he has a vested interest in the market recovering. Until the banks start giving finance to first time buyers again there is no hope of a recovery anyway. And don't forget the wave of reposessions coming down the line as people can no longer afford their monster boomtime repayments and they hand back the keys to the banks.

    Probably the most sensible comment on the whole property scenario I have read so far.

    Anyone who owns properties and has access to media is obviously going to start pushing their own agenda, otherwise known as VESTED INTEREST PARTIES (VIPS). Read Derek Brawn's 'Ireland's House Party'. Poor little Pramit should ....


  • Registered Users, Registered Users 2 Posts: 901 ✭✭✭cbreeze


    ninty9er wrote: »
    Why can't the econotwits get this:

    WE DON'T WANT HOUSE PRICES TO RISE! WE WANT AFFORDABLE HOMES!

    way to gnikcuf go mate!!!


  • Registered Users, Registered Users 2 Posts: 3,200 ✭✭✭imme


    ninty9er wrote: »
    Why can't the econotwits get this:

    WE DON'T WANT HOUSE PRICES TO RISE! WE WANT AFFORDABLE HOMES!
    are you suggesting the FF led govt get directly involved in the setting of the price of development land.:eek: Never mind that there's probably enough undeveloped/unused/half built/convertible properties in the country to satisfy demand for another year without any new builds.


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  • Registered Users, Registered Users 2 Posts: 27,644 ✭✭✭✭nesf


    Not necessarily. Exports are doing ok, which means there's a sizeable enough population in the private sector who've bypassed a lot of the recession. And whatever the public sector chose to moan about, pay rates are healthy and so is job stability for the vast majority. All in all a sizeable sector of the population have been completely bypassed by the recession, and are just sitting on the sidelines waiting for things to completely bottom.

    For example, friends of friends are in the market for a house have maintained that they are noticing prices have stabilised. They reckon prices bottomed out here in Galway around Sept. and have even gone so far as to say they have noticed in some areas they are creeping up again.

    Remember, the statistics on empty houses and that are skewed by many holiday homes and complexes built for the purpose of tax avoidance, not necessarily because there was any market demand to begin with, so I find it hard to read too much into any information on the property market. It's all in people's heads tbh.

    Your friends are only seeing a stabilisation in asking price this doesn't necessarily mean there's been a stabilisation in the actual sales prices. I agree that the oversupply argument is overplayed, much of this oversupply is empty because it's built in areas where there's nowhere close to enough demand to fill them even in the good times. That said, with an interest hike inevitable in 2010 I'd consider it far too early to call the bottom of the market. The pace of decline may slow and even perhaps bottom out but an increase in price? That is a fair while off at a national level.


  • Registered Users, Registered Users 2 Posts: 10,903 ✭✭✭✭Riskymove


    ninty9er wrote: »
    Why can't the econotwits get this:

    WE DON'T WANT HOUSE PRICES TO RISE! WE WANT AFFORDABLE HOMES!

    actually you dont get it...The irish position over recent years has been:


    1. if you dont have a house and are lookiong to buy, you want them to be as cheap as possible

    2. if you have a house you want to have bought it cheaply but then for it to rise dramatically....if only to laugh at people buying the house beside you for 3 or 4 times the amount you did!!

    3. if you are selling a house and buying a new one you want to see house prices go dramatically up where you live and dramatically down where you want to buy!!

    usual Irish insanity about land/property/money


  • Closed Accounts Posts: 686 ✭✭✭bangersandmash


    PCPhoto wrote: »
    are these the same economists that have been saying for the past twelve months that house prices will drop only 10-15%..... ok maybe 20%....... no wait ... 25%....... erm.... maybe 30% .... erm... in some areas 30-40%.
    Pretty much. Will this prediction be better than the one he made in March 2008? We'll see.
    Combined with evidence of improved sales of new homes over recent weeks this looks like an early signal the housing market is turning: if so, it bodes well for the economy and stockmarket.


  • Registered Users, Registered Users 2 Posts: 13,227 ✭✭✭✭jmayo


    ninty9er wrote: »
    Why can't the econotwits get this:

    WE DON'T WANT HOUSE PRICES TO RISE! WE WANT AFFORDABLE HOMES!

    Ehh we actually need house prices to fall because they are still too high, or at least what people are asking is too high.
    Of course due to the fact that there is no public record of house prices we aren't sure what are the differences between asking and selling prices.

    BTW you aren't reading the party line ala frank fahey.
    The government need house prices to rise so that NAMA won't make a big loss. :rolleyes:

    I am not allowed discuss …



  • Closed Accounts Posts: 9,364 ✭✭✭ei.sdraob


    jmayo wrote: »
    Ehh we actually need house prices to fall because they are still too high, or at least what people are asking is too high.
    Of course due to the fact that there is no public record of house prices we aren't sure what are the differences between asking and selling prices.

    BTW you aren't reading the party line ala frank fahey.
    The government need house prices to rise so that NAMA won't make a big loss. :rolleyes:

    yes thats yet another problem with property market in this country, no transparency

    look at stock market, at any time one can know exactly how much they have, and hence make better decisions

    the data is out there, revenue commissioners have the selling prices of all properties
    theres nothing stopping them annonymising the data and releasing it to the public

    in UK i believe one can check the land registry as well for prices in area, not so here


  • Registered Users, Registered Users 2 Posts: 102 ✭✭aidan13


    "For example, friends of friends are in the market for a house have maintained that they are noticing prices have stabilised. They reckon prices bottomed out here in Galway around Sept. and have even gone so far as to say they have noticed in some areas they are creeping up again."


    I can definitly agree with this. I bough in Naas in August. We were looking for over a year. Any nice house that we looked at were sold in 2-3 weeks to a figure very close to that of the asking price. This was so frustrating becasue all people were saying was to wait and let them drop and sure theirs loads out their. We didn't find that. What we found were very nices houses in nice areas that you would love to live in were selling quickly, and forget about that stuff about putting in rediculously low offers, by the time you tried playing that game, the house was sold to some one else.

    Now their are still houses up for sale that were up for sale 1yr ago, slashing their prices. Thats fine but we weren't interested in them, the one's that we were interested in sold very quickly.

    The estate that we have moved into has approx 30 houses in it. Since we moved in 3 houses in the estate have went up for sale and have sold within a month of going up. I'm fairly sure people have their own opinions and experiences in the market, all I'm saying is that the houses that I would have liked to buy and their were about 5 all shifted very quickly and for very close to the asking price.


  • Registered Users, Registered Users 2 Posts: 4,282 ✭✭✭westtip


    zod wrote: »
    PROPERTY PRICES will bottom out in the first half of 2010 and may rise by as much as 10 per cent by the end of the year, managing partner of Bloxham Stockbrokers Pramit Ghose has predicted



    Great news for the economy .. fill ur boots :pac:

    yeh right. Irish residential property outside of selected pockets of certain locations will fall to a realistic level over the next five years....


  • Registered Users, Registered Users 2 Posts: 68,173 ✭✭✭✭seamus


    aidan13 wrote: »
    I can definitly agree with this. I bough in Naas in August. We were looking for over a year. Any nice house that we looked at were sold in 2-3 weeks to a figure very close to that of the asking price. This was so frustrating becasue all people were saying was to wait and let them drop and sure theirs loads out their. We didn't find that. What we found were very nices houses in nice areas that you would love to live in were selling quickly, and forget about that stuff about putting in rediculously low offers, by the time you tried playing that game, the house was sold to some one else.
    Even in a recession and a falling housing market, some areas will be more desirable than others. A 3-bed close to shops, busses and schools will be snapped up if it's offered at a price which may not be a significant drop from the peak. The exact same house in a lonely housing estate in rural Ireland will drop well more than 50% on the peak.

    The banks refusal to lend has created something of a backlog in people who would still like to buy (there are a lot of them), but there is a glut on the far side of unsold houses with little or no appeal. So I think the housing market will "stabilise" as the global recession lifts and credit becomes more freely available. I mean "stabilise" as in, "Act like a normal market again". That is, the glut of quick-built houses in those out-of-the-way places will continue to fall in price while the more desirable homes will start to see demand from people who can now secure a mortgage and are more wiley about what they buy.

    This year? Maybe. Lending will probably start to flow a bit better from Q3. We are also in the grip of a baby boom which is going to last for the next 5 - 10 years. This will create demand for bigger homes - all those people who bought two-bed apartments will run out of space and will be casting an eye out for family homes. Bad news for apartments, but good news for people who had the sense to buy a house close to amenities.

    I would be very surprised if the banks don't spot this trend and come up with a negative equity buster that will somehow allow people to carry their debt onto a new home.


  • Registered Users, Registered Users 2 Posts: 13,227 ✭✭✭✭jmayo


    seamus wrote: »
    ...
    The banks refusal to lend has created something of a backlog in people who would still like to buy (there are a lot of them), but there is a glut on the far side of unsold houses with little or no appeal. So I think the housing market will "stabilise" as the global recession lifts and credit becomes more freely available. I mean "stabilise" as in, "Act like a normal market again". That is, the glut of quick-built houses in those out-of-the-way places will continue to fall in price while the more desirable homes will start to see demand from people who can now secure a mortgage and are more wiley about what they buy.

    This year? Maybe. Lending will probably start to flow a bit better from Q3. We are also in the grip of a baby boom which is going to last for the next 5 - 10 years. This will create demand for bigger homes - all those people who bought two-bed apartments will run out of space and will be casting an eye out for family homes. Bad news for apartments, but good news for people who had the sense to buy a house close to amenities.

    I would be very surprised if the banks don't spot this trend and come up with a negative equity buster that will somehow allow people to carry their debt onto a new home.

    I believe there are a few problems with this synopsis.
    Firstly Irish banks will only start to lend after NAMA and further massive recapitalisation so there won't be huge lending and when that happens is another question.
    And those stuck in 2 bed apartments are looking at a huge chunk of negative equity so you think the banks, kept afloat by us all, should offer them new mortgages ?

    Don't expect the glory days of easy mortgages in Ireland to return.
    Also if there is economic recovery in Eurozone, then watch interest rates rise and that will severly hit current mortgage holders and fufure applicants.

    And to cheer you up even more don't hold your breath waiting for foreign lenders to start dishing out mortgages in Ireland.
    The ones here already have been severly burnt and some are trying to get out.

    I am not allowed discuss …



  • Registered Users, Registered Users 2, Paid Member Posts: 24,612 ✭✭✭✭Sleepy


    seamus wrote: »
    We are also in the grip of a baby boom which is going to last for the next 5 - 10 years. This will create demand for bigger homes - all those people who bought two-bed apartments will run out of space and will be casting an eye out for family homes. Bad news for apartments, but good news for people who had the sense to buy a house close to amenities.

    I would be very surprised if the banks don't spot this trend and come up with a negative equity buster that will somehow allow people to carry their debt onto a new home.
    As one of those who's recently had a baby (a year and a half ago) who's still in rental accomodation, I really hope they don't.

    With any luck, I'll be in a steady job again in a year or so's time and looking to get a mortgage for a *reasonably priced* home for my family. This won't happen if those that threw their money into the wind are allowed to throw good money after it.


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  • Registered Users, Registered Users 2 Posts: 9,351 ✭✭✭ninty9er


    jmayo wrote: »
    BTW you aren't reading the party line ala frank fahey.
    The government need house prices to rise so that NAMA won't make a big loss. :rolleyes:
    I've had arguments face to face with govermnment ministers and councillors (of all colours) who've said that "that's very reasonable for that piece of land so close to the city!"

    While it wasn't far off, it was still expensive (given the very restricted PP), overpirced by about 20%-25%. But land has intrinsic value which fluctuates very little compared to built-on land.

    The goverment doesn't need property prices to rise, it just needs to pitch it's purchase price at trough level giving it a reasonable expectation of profit in 10-15 years.


  • Closed Accounts Posts: 26,567 ✭✭✭✭Fratton Fred


    I guess that this year will also see NAMA release a whole load of apartments on the market as well, then we could see potential saturation of the market.


  • Registered Users, Registered Users 2 Posts: 68,173 ✭✭✭✭seamus


    jmayo wrote: »
    Firstly Irish banks will only start to lend after NAMA and further massive recapitalisation so there won't be huge lending and when that happens is another question.
    The availability of credit on international markets is more of an issue than the capital available IMO.
    And those stuck in 2 bed apartments are looking at a huge chunk of negative equity so you think the banks, kept afloat by us all, should offer them new mortgages ?
    I didn't say that I think they should.
    I said that I think they probably will. If banks can find a way to keep people in debt at minimal risk to themselves, they will. No, they don't really learn. They only thing a bank loves more than someone with a €300k mortgage and a solid payment history is someone with a €400k mortgage and a solid payment history.
    The banks aren't massively concerned with the actual value of the asset that's underpinning the loan so long as the borrower can be trusted to pay it back.

    It will be up to the regulator to keep an eye on this and shut it down if someone figures out some odd package for allowing people to increase their mortgage while maintaining their negative equity.

    However, I would be in favour of any product that allows someone to buy a cheaper home. For example, someone has a €400k mortgage on a house with an actual value of €250k. The bank is "stuck" with that €150k negative equity, but they're at risk of that €250k losing value.
    So they allow the borrower to move home into a €150k house.

    1. The other €100k from the sale is realised.
    2. The risk to the bank is reduced - a % drop on €150k is better than a % drop on €250k
    3. The non-realisable equity of €150k hasn't changed
    4. The borrower's ability to repay has improved because their mortgage has dropped by €100k, meaning that they're less likely to default and the could even reduce the term of the mortgage, meaning that the bank realises the loan earlier.

    In fact, I can't see any downsides to that, but maybe I'm missing something.


  • Closed Accounts Posts: 57 ✭✭MI5


    jmayo wrote: »
    Ehh we actually need house prices to fall because they are still too high, or at least what people are asking is too high.
    Of course due to the fact that there is no public record of house prices we aren't sure what are the differences between asking and selling prices.

    BTW you aren't reading the party line ala frank fahey.
    The government need house prices to rise so that NAMA won't make a big loss. :rolleyes:

    Wouldn't surprise me one bit, if interested parties were to organise an auction or two or three of specific houses in specific locations, and orchestrate a rigged bidding process to get the impression out there that the tide has turned. That would be post NAMA of course, and when the banks are doing some property lending again!:cool:


  • Registered Users, Registered Users 2 Posts: 10,903 ✭✭✭✭Riskymove


    seamus wrote: »
    In fact, I can't see any downsides to that, but maybe I'm missing something.

    doesn't this mean that the bank is still owed €300k with an asset being worth €150k

    instead of €400k with an assest worth €250k

    same thing really is it not, with the only change being a lower mortgage to the customer?

    and, of course its dependent on being able to sell the asset

    tbh your point
    The bank is "stuck" with that €150k negative equity, but they're at risk of that €250k losing value.

    the bank is only affected by negative equity if the person cannot repay the mortgage and it seeks to sell the asset


  • Registered Users, Registered Users 2 Posts: 68,173 ✭✭✭✭seamus


    Riskymove wrote: »
    doesn't this mean that the bank is still owed €300k with an asset being worth €150k

    instead of €400k with an assest worth €250k

    same thing really is it not, with the only change being a lower mortgage to the customer?
    No, because if house prices drop by 10% after the customer moves house, the amount of negative equity is now €165k instead of €175k.
    and, of course its dependent on being able to sell the asset
    Everyone has his price :)
    the bank is only affected by negative equity if the person cannot repay the mortgage and it seeks to sell the asset
    It represents a higher risk though because it cannot be realised by selling the asset. If the customer defaults, the bank loses that negative equity, effectively (I know the debt still hangs over the person's head). It's in the bank's interest to help customers clear that negative equity.


  • Registered Users, Registered Users 2 Posts: 10,903 ✭✭✭✭Riskymove


    seamus wrote: »
    No, because if house prices drop by 10% after the customer moves house, the amount of negative equity is now €165k instead of €175k.

    well, that assumes the same price change for all houses/locations which is unlikely

    but anyway I see what you are saying, its in the context of further price drops

    but then
    Everyone has his price

    in the context of ongoing price drops its hard to see someone realising the 250k, it may already be too late


  • Registered Users, Registered Users 2 Posts: 68,173 ✭✭✭✭seamus


    It could also be something that could be used in response to jingle mail. That depends on what volume of jingle mail they are getting.

    In order to simply hand the house over and escape your debt, you need to effectively flee the country. So if someone is sitting in negative equity, no room in their house and no visible way out, they may decide that fleeing the country and starting somewhere else is the way to go.

    Whereas if the bank can offer them a way of getting a bigger house, just a little more out the way, the bank keeps that borrower.

    That may be a very niche requirment, I very much doubt there are many people fleeing the country to escape negative equity.


  • Registered Users, Registered Users 2, Paid Member Posts: 24,612 ✭✭✭✭Sleepy


    seamus, I have to say I think you're really onto something here.

    The only potential problem I can think of is that the banks hold loans on the asset side of their balance sheet so could reducing the 'good' loan levels have a negative impact which we'd then have to deal with in NAMA2?

    It really does seem like a good idea for some who over-stretched to get their mortgage and are are now on reduced salaries / single salaries.


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  • Closed Accounts Posts: 600 ✭✭✭Rev. BlueJeans


    ninty9er wrote: »
    Why can't the econotwits get this:

    WE DON'T WANT HOUSE PRICES TO RISE! WE WANT AFFORDABLE HOMES!

    Where does that leave NAMA then?


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