Will house prices drop anymore?

AARRRRGH

Amhran Nua wrote: »

So either he was raining derision on others for his own bad decision, or he was raining derision on others for not having been lucky enough to be born earlier, is that it?


I guess some people don't like the sound of reality, which doesn't bother reality one way or the other.

No, just dont base your argument on an assumption you pulled out of thin air is all. Why not ask him first. You could be right, but you are just guessing until you know his circumstances.

Pittens

So either he was raining derision on others for his own bad decision, or he was raining derision on others for not having been lucky enough to be born earlier, is that it?

That wouldnt matter either. ( And to not personalise the issue I am going to talk about the mythical "someone").

The argument I am against is that rent is always dead money. That belief system the reason we are in trouble.

Even if someone bought in 1992 he would have been financially wise to sell and rent in 2005 ( or even earlier since guessing the top of the boom was difficult), and then buying back later. Clearly.

In that case renting would have been a very valuable option. Selling and renting is common enough amongst the rich, as it happens. Or selling and living in a hotel for a while, albeit a posh one.

anyway, the pathological fear of renting in ireland - possibly historical - is partl of the cause of the latest collapse.

ei.sdraob

AARRRRGH wrote: »

You should have waited a while You might have thrown a lot of money down the toilet there. I suppose we'll know in a few years

as I said earlier in thread, keeping that much savings in banks is way too risky a proposition nowadays

I seen a bargain and I jumped on it, I don't have to pay rent or mortgage now

and now saving up for a small wind turbine (planning permitting ) to cut my costs further and investing further in own business and planning starting another

no way in hell do i ever want to do anything with <irish> banks, either saving with them or getting in debt

Low Energy Eng

As long as the depreciation of a house you plan to buy is greater than what it costs to rent, there is absolutely no point in buying.

Eg,
Option A) Buy the 250k house in dublin, it depricates by 10% this year...thats a loss of 25k

Option Rent a 250k house in Dublin for 10-12k, not worry about upkeep,
buy the house next year for 225k

Option B-Saving 13-15k

A colleague of mine still said to me the other day- but you'll have something at the end of the mortgage...Clearly not getting the principles behind what I just said to him.


James, your friends can rent in the mean time, prices will go up again, but people need to understand how extreme the bubble was

Amhran Nua

AARRRRGH wrote: »

You could be right

Even in the unlikely case that the assumption is incorrect, the comments being made were factually incorrect, unless no houses sold at all in 2009 and 2010 to date. Would you share his outlook, since you appear to feel his argument has some merit?

AARRRRGH

ei.sdraob wrote: »

as I said earlier in thread, keeping that much savings in banks is way too risky a proposition nowadays

I seen a bargain and I jumped on it, I don't have to pay rent or mortgage now
and now saving up for a small wind turbine (planning permitting ) to cut my costs further

Im all for not having to pay rent or mortgage anymore, but you probably would have got better bargains by renting for another year or so and then making a decision to buy or wait again.

There are hundreds ways of making your money safe in the meantime, and earning from it at the same time.

I fear you'll be wasting your money on a wind turbine too, but thats another debate. Research it well.

AARRRRGH

Amhran Nua wrote: »

Even in the unlikely case that the assumption is incorrect, the comments being made were factually incorrect, unless no houses sold at all in 2009 and 2010 to date. Would you share his outlook, since you appear to feel his argument has some merit?

And your comments were made without any basis in fact. As i said you made assumptions on the guys situation, and you assumed the worst too.

I dont share his outlook at all. I believe there is a time to rent and a time to buy. All depends on where your life is and where the property market is at any given time. And its unique to each person/family, which is why you cant assume its a good or bad idea unless you know his circumstances.

Amhran Nua

AARRRRGH wrote: »

And your comments were made without any basis in fact.

Ah now you are making the assumption. Why would you intervene on the basis of an assumption like that?

AARRRRGH wrote: »

which is why you cant assume its a good or bad idea unless you know his circumstances.

The only idea that there was a problem with was the derogatory comments, exactly the sort of behaviour that helped lead to the disastrous bubble in the first place.

AARRRRGH

Amhran Nua wrote: »

Ah now you are making the assumption. Why would you intervene on the basis of an assumption like that?


The only idea that there was a problem with was the derogatory comments, exactly the sort of behaviour that helped lead to the disastrous bubble in the first place.

I can see im wasting my time.
Would you say you made assumptions about his personal/family situation when you said he was overpaying rent?

ei.sdraob

AARRRRGH wrote: »

Im all for not having to pay rent or mortgage anymore, but you probably would have got better bargains by renting for another year or so and then making a decision to buy or wait again.

would have been true if I still lived in Dublin, where large chunk of house prices is land value
but here in Galway, some places are going for or below their build cost, as I said earlier the builder was desperate and got 60% off peak value
yes it might go down in line with any falls in building costs (labour,materials) but that's about it

anyways its a place to live and work for me not an investment

AARRRRGH wrote: »

I fear you'll be wasting your money on a wind turbine too, but thats another debate. Research it well.

ill put it to you this way, id rather write it off as company expense and get something out of it that would have a payback over long term, than hand that money over to the taxman

Amhran Nua

AARRRRGH wrote: »

I can see im wasting my time.

Would you mind responding to the question please, why would you assume that the discussion had no basis in fact? You did join boards at the same time and have a similar postcount, but are you sufficiently aware of his personal circumstances to be able to say definitively one way or the other when he bought?

AARRRRGH

Amhran Nua wrote: »

Would you mind responding to the question please, why would you assume that the discussion had no basis in fact? You did join boards at the same time and have a similar postcount, but are you sufficiently aware of his personal circumstances to be able to say definitively one way or the other when he bought?

Ive answered it numerous times.
Because you made assumptions about the guys circumstances (which you have no way of knowing were right or wrong) and then derided him based on those.

And as i said before i do not know anything about his circumstances, so wouldnt attempt to deride him, so no i cant say definitively and didnt attemt to do so. But you did.

And now, having been proved to pull facts about people out of your nethers, you have a last gasp by accusing me of being him (another wild assumption with no basis in fact). Well Done.

Amhran Nua

AARRRRGH wrote: »

And as i said before i do not know anything about his circumstances

So how are you stating as fact that the comments made had no basis in fact, when you have no way of knowing that?

AARRRRGH wrote: »

And now, having been proved to pull facts about people out of your nethers, you have a last gasp by accusing me of being him (another wild assumption with no basis in fact). Well Done.

On the contrary, I neither said nor implied anything of the sort, merely pointed out some actual facts. You have a similar postcount and joined at the same time. You are also now intervening in a most dubious fashion with very limited support or reason. These are easily verifiable facts.

I think I'll take a page from London Irish's book and file this cameo under troll, at this stage. In the interests of continuing with the actual topic of the thread, I'll leave it there.

james finn

Pittens wrote: »

Well he is not so happy now if he is in debt. That the "rent is dead money" meme still continues in 2010 is hilarious, were it not tragic.

Just to set up my situation. Saved money, and will have enough at the end of this year or next to buy a cheap house in Ireland, if I choose. Pay small rent because I can share with people happily enough. I set that up because James Finn personalises the debate here all the time.

so. To be clear, I can afford to buy and could easily get a loan now. But I am still waiting.

Back to the claim that rent is dead money. The cost of a house in the last 5 years is really the difference between the cost of what the house cost 5 years ago, and what it will cost now, multiplied by the interest on the difference ( which would be 100% for a 40 year loan).

In that scenario Rent was not dead money. Paying money to the Bank is dead money.

you spent 120.000 on rent in the last ten years which as good as paid for the landlords house, you saved 100.000 by not buying, your still down 20.000 plus a happy landlord. if i sold in the morning id still make money on mine, its only when you do the maths you get to see the winner, if you cant buy a house at this stage you never will and you blame the bankers for something you never entered it to or never will cos you think in your own mind your winning?

james finn

the bankers didnt force anyone at gunpoint, they lend money and are not owned by me or you, yet people blame them for what they do with their own money, maddness

Benedict

It's true that those who bought houses many years ago and let them out made a killing. But that was then and this is now. Currently, a fairly ordinary house in Dublin worth, say, 350K will be 100K less in the next 12 to 18 months. Every couple of months, we get the news (from vested interests) that "now is a good time to buy" or "there's real value out there" etc. We were being told this in 2008 and 2009 don't forget! Give them their due, their trying - but few believe them anymore. Renting for a year could set you back say 15/16K. A purchase now could cost you circa 100K more than you'll pay next year!
With an overhang of 350000 homes (and rising) - emigration on the increase, unemployment on the increase and wages set to be cut again next budget , repossessions on the increase - does anyone seriously believe that property has reached the bottom?
Professor Morgan Kelly and others predicted everything accurately so far. He said the house that was a million at the height of the boom, will eventually be 200K. And folks, the house that was a million is still a heck of a long way off 200K.
Watch this space!

m5ex9oqjawdg2i

james finn wrote: »

the bankers didnt force anyone at gunpoint, they lend money and are not owned by me or you, yet people blame them for what they do with their own money, maddness

100%+ Mortgages? Of course those arsehole are to blame... They preyed on the weak. Zero regulation... you cannot blame the consumer for taking a too good to be true offer.

We have yet to see the true value of houses. They will come down even more.

ei.sdraob

this james finn dude will be in for a shock once interest rates rise

London Irish

james finn wrote: »

you spent 120.000 on rent in the last ten years which as good as paid for the landlords house, you saved 100.000 by not buying, your still down 20.000 plus a happy landlord. if i sold in the morning id still make money on mine, its only when you do the maths you get to see the winner, if you cant buy a house at this stage you never will and you blame the bankers for something you never entered it to or never will cos you think in your own mind your winning?

Well, I'm not sure how many people paid 1000 rent a month over 10 years. I reckon I've paid half that in that time. And since we're using personal examples, I've got 100K in the bank and prices have come down by the 100K you give above. I think I'm doing alright.

I still thinking you're trolling. But I'll ask - are you sure you would be able to sell in the morning for a profit? If so, James Finn, I glad it worked out for you. It hasn't for a lot of other people.

I think everyone should be able to buy a house, but no-one should be expected to buy a house at crazy inflated prices. I know I'll wait.

james finn

London Irish wrote: »

Well, I'm not sure how many people paid 1000 rent a month over 10 years. I reckon I've paid half that in that time. And since we're using personal examples, I've got 100K in the bank and prices have come down by the 100K you give above. I think I'm doing alright.

I still thinking you're trolling. But I'll ask - are you sure you would be able to sell in the morning for a profit? If so, James Finn, I glad it worked out for you. It hasn't for a lot of other people.

I think everyone should be able to buy a house, but no-one should be expected to buy a house at crazy inflated prices. I know I'll wait.

we the people made the demand for houses which made them inflated, the banks are not to blame for this, it happens every few years. now is the time to buy why dont you????

the dead money 50.000euro you gave the landlord and the 100.000 you say you have would buy a house now with out a loan.

The_Conductor

James- please respond rationally to other posters, addressing their points- and less of the rhetoric and personalisation. Consider this a warning.

SMcCarrick

AARRRRGH

Amhran Nua wrote: »

So how are you stating as fact that the comments made had no basis in fact, when you have no way of knowing that?


On the contrary, I neither said nor implied anything of the sort, merely pointed out some actual facts. You have a similar postcount and joined at the same time. You are also now intervening in a most dubious fashion with very limited support or reason. These are easily verifiable facts.

I think I'll take a page from London Irish's book and file this cameo under troll, at this stage. In the interests of continuing with the actual topic of the thread, I'll leave it there.

Oh would you stop.
You are grasping at straws. Everyone can see it.
You've lost this argument.

Fact 1: You were attributing things to people without actually knowing those peoples circumstances. Then deriding them based on your wild assumptions about them.

Fact 2: Do deflect the subject from your failed attempts at backing yourelf up you then accused me of being somebody else. Completely pulled out of your nethers so that you could change the subject off of Fact 1.

Fact 3: Having made a fool of yourself, that everyone can see, you say "I'll leave it there."

Fact 4: Having failed to make any of your points valid by backing them up with proof that you didnt make wild assumptions for your arguments, you then accuse me of trolling.

By all means, "Leave it there" , but be under no illusion, you have made an idiot of yourself with your false assumptions and accusations.

AARRRRGH

ei.sdraob wrote: »

this james finn dude will be in for a shock once interest rates rise

Along with a lot of people probably.
Maybe they should look at fixing now. But i guess the banks have that covered too.

There is no more competition among banks either, so i dont see rates being in any way competitive for a long time either.

james finn

smccarrick wrote: »

James- please respond rationally to other posters, addressing their points- and less of the rhetoric and personalisation. Consider this a warning.

SMcCarrick

this is not much of a site if we dont have the freedom to speak with out being warned, truth hurts sometimes but must be said.

kelle

Magnolia Small Unit wrote: »

100%+ Mortgages? Of course those arsehole are to blame... They preyed on the weak. Zero regulation... you cannot blame the consumer for taking a too good to be true offer.

So so true. The banks relaxed their criteria on giving out mortgages too much (they were reckless!), and this encouraged the huge rise in property values.

In 1997, mortgages were calculated at 2.5 x principal salary + 1 x second salary. Overtime was not included. The maximum mortgage my husband and I could get was £45000 and we needed 10% deposit saved, but it didn't matter as houses were generally in that price range.

3 years later, my friend got a mortgage for £100000 - which amazed me because she earned less than me and had no second buyer!

In 2006, my work colleague got a mortgage based on 6 x (her salary including overtime+her husband's salary)+children's allowance+predicted pension payout!!!! Now, her husband is unemployed, she developed an illness which means she can work but cannot do overtime, her children's allowance is reduced and she's not going to get the pension payout that was forecasted in 2006. The banks were not taking any of those factors into account when giving out mortgages. Now, I know the james finn types will say nobody put a gun to her head and forced her to sign on the dotted line - and I begged her not to buy, but it was so wrong.

Pittens wrote: »

anyway, the pathological fear of renting in ireland - possibly historical - is part of the cause of the latest collapse.

Well, the rent costs in Ireland are very high. You can't blame people for having thought they would be better to put this money into a mortgage and own the house afterwards rather than pay somebody else's mortgage.

I know a family renting in Amsterdam and their rent is very minuscule compared to what they would pay here, I can only assume rents are much cheaper in Continental Europe - maybe somebody on this forum can clarify on this.

james finn

if your a happy home owner it upsets some people, even the moderator sent me a post to warn me, you put some figures on the table and you dont abuse people and you get warned because the moderater might not agree, what type of site is this anyway

james finn

james finn wrote: »

we the people made the demand for houses which made them inflated, the banks are not to blame for this, it happens every few years. now is the time to buy why dont you????

the dead money 50.000euro you gave the landlord and the 100.000 you say you have would buy a house now with out a loan.

the above is what i posted and i got warned by the moderator ?

SoupyNorman

My answer to the OP is yes, of course, without question. Prices dont drop 30-35% in one year (2009) and then put the handbrake on for the next. That 30-35% is really only the cream off the top. But what the masses dont really grasp is that market adjustment (either up or down) is a long term event. House prices didnt rise from x at the beginning of the boom circa. 1998 to xxxxxxxxx in two years, it was gradual at first and then sped up as the peak loomed.

I am no expert in the field but I am fascinated by economics, for all it's complex theories, educated economists and libraries of books the main concept can be thought to and understood to a ten year old, Our good old friend Demand and Supply....

Ireland is and will be a case study in how not to develop a country through property development into the future, why? Because we built too many houses...The blame game towards banks and developers is justified but in the cold hard light of today, in terms of house prices the most significant factor is over supply.

I find myself in a lucky position, I attended college from '03 - '07 thereby not being in the market for a house, I dont know for sure but I could have easily been sucked into the property ladder at the worst possible time, thankfully I am now working in a good job(not taken for granted), renting and more then happy to sit back let come what may.

For anybody to suggest rent to be dead money I real feel sorry for you, I have spent €20k on rent since 2007 so without even going into figures I defy anyone to prove that I would have lost more on equity having purchased in '07 with a 100% mortgage. If I had of taken a 100% mortgage then I'd now find myself crippled with mortgage repayments, trying to make a dent in the interest of the mortgage as I would have not even have started to pay off the principal sum....also, what is also over the horizon? Interest rate hikes, as soon as the European powerhouses are stable enough rates are going upwards, no heed will be paid to this little US Army stop off point.

I highly recommend that 'Rent is dead money' professors read this:

http://www.irishhometruths.com/node/284


My bottom line is the government meddling/interventions will have some impact, short-term only...Economics is not an exact science, it does not behave exactly as predicted, Just like you cannot predict the path of a river it will take it's natural course and currently house prices are following the natural course of this river as it may be meandering and moving slowly but one thing is undeniable...It's doing down!


(Apologies for the focus on rivers as an analogy but I really like Geography)

james finn

SoupyNorman wrote: »

My answer to the OP is yes, of course, without question. Prices dont drop 30-35% in one year (2009) and then put the handbrake on for the next. That 30-35% is really only the cream off the top. But what the masses dont really grasp is that market adjustment (either up or down) is a long term event. House prices didnt rise from x at the beginning of the boom circa. 1998 to xxxxxxxxx in two years, it was gradual at first and then sped up as the peak loomed.

I am no expert in the field but I am fascinated by economics, for all it's complex theories, educated economists and libraries of books the main concept can be thought to and understood to a ten year old, Our good old friend Demand and Supply....

Ireland is and will be a case study in how not to develop a country through property development into the future, why? Because we built too many houses...The blame game towards banks and developers is justified but in the cold hard light of today, in terms of house prices the most significant factor is over supply.

I find myself in a lucky position, I attended college from '03 - '07 thereby not being in the market for a house, I dont know for sure but I could have easily been sucked into the property ladder at the worst possible time, thankfully I am now working in a good job(not taken for granted), renting and more then happy to sit back let come what may.

For anybody to suggest rent to be dead money I real feel sorry for you, I have spent €20k on rent since 2007 so without even going into figures I defy anyone to prove that I would have lost more on equity having purchased in '07 with a 100% mortgage. If I had of taken a 100% mortgage then I'd now find myself crippled with mortgage repayments, trying to make a dent in the interest of the mortgage as I would have not even have started to pay off the principal sum....also, what is also over the horizon? Interest rate hikes, as soon as the European powerhouses are stable enough rates are going upwards, no heed will be paid to this little US Army stop off point.

I highly recommend that 'Rent is dead money' professors read this:

http://www.irishhometruths.com/node/284


My bottom line is the government meddling/interventions will have some impact, short-term only...Economics is not an exact science, it does not behave exactly as predicted, Just like you cannot predict the path of a river it will take it's natural course and currently house prices are following the natural course of this river as it may be meandering and moving slowly but one thing is undeniable...It's doing down!


(Apologies for the focus on rivers as an analogy but I really like Geography)

rent is dead money, rent pays for my house, i gain not the tenant? fact

SoupyNorman

james finn wrote: »

rent is dead money, rent pays for my house, i gain not the tenant? fact

Please read my post and come back with some sort of constructed points (and read the linked article).