House prices...down for how much longer?

vamboroolz

Since we're all off to hell in a handcart any ideas on how much further down the housing market will go? Should I take that offer on my house now anticipating a further fall in house prices? Dilemma time.

Tigger

yes sell sell sell.

changes

Very different to offer advice with on any idea if its a fair price for a fair house?

You sound like its not an unreasonable offer so sell i'd say.

RichardAnd

It's hard to say but what advise I will give you is that this is not the place to look for the answer.

catbear

Sell, sell, sell! Bite their hand off.

Welease

RichardAnd wrote: »

It's hard to say but what advise I will give you is that this is not the place to look for the answer.

Spot on!

Whether you sell or not depends on a myriad of factors.. and this is not the place to find the information..

What type of house is it? Where is it? How has the market performed for that type of house in that area? Why are you trying to sell? How many of those houses are available in that area? Are you getting a new mortagage? Do you currently have a tracker? Are you upgrading or downgrading in property value? etc etc etc

Acting on a simple yes or no without that sort of information is why a lot of people are currently in way over the heads with bad property deals.

OMD

If you look at the trends in the PTSB House Price Survey or Daft report, the rate of decline in house price is levelling off and should level completely about May or June next year.

Obviously this is only a guide and doesn't take into account the effects of the budget. If your property is in a decent location in Dublin then on average it is probably near the bottom. If it is in a rural area then God knows.

Tigger

there is no levelling off nobody knows what houses are reallky ging for they only know what theyre advertising for

trust me on this if you can sell then sell and don't buy till the real crash happens renting is freedom at this point in time

Dr_Phil

Apply the rule I and many others got on boards: "18 months"... Simply the moment you start thinking of buying wait 18 months and if the 18 months pass and you still want to buy - wait another 18 months.. :rolleyes:

vamboroolz

Welease wrote: »

Spot on!

Whether you sell or not depends on a myriad of factors.. and this is not the place to find the information..

What type of house is it? Where is it? How has the market performed for that type of house in that area? Why are you trying to sell? How many of those houses are available in that area? Are you getting a new mortagage? Do you currently have a tracker? Are you upgrading or downgrading in property value? etc etc etc

Acting on a simple yes or no without that sort of information is why a lot of people are currently in way over the heads with bad property deals.

Yes, agreed about the variables involved but I'm interested in how much further down the housing market might be going given the worsening economic crisis. If we're on the way to being the next Greece or Iceland
then it's very tempting to take a reasonable offer now (given that reasonable is forever changing) I've joined other forums out there as well so I'm trying to build up a picture.

Tigger

Dr_Phil wrote: »

Apply the rule I and many others got on boards: "18 months"... Simply the moment you start thinking of buying wait 18 months and if the 18 months pass and you still want to buy - wait another 18 months.. :rolleyes:

good rule but the op is selling

Dr_Phil

Tigger wrote: »

good rule but the op is selling

Doesn't matter, The Rule can be applied in all circumstances - simply "wait 18 months before you stick it on the market", etc...

Tigger

vamboroolz wrote: »

Yes, agreed about the variables involved but I'm interested in how much further down the housing market might be going given the worsening economic crisis. If we're on the way to being the next Greece or Iceland
then it's very tempting to take a reasonable offer now (given that reasonable is forever changing) I've joined other forums out there as well so I'm trying to build up a picture.

thats a good idea as sentiment can be gauged by doing that and is a very important factor

OMD

Dr_Phil wrote: »

Doesn't matter, The Rule can be applied in all circumstances - simply "wait 18 months before you stick it on the market", etc...

Unless you believe the market is going to rise, why should he wait 18 months?

Welease

vamboroolz wrote: »

Yes, agreed about the variables involved but I'm interested in how much further down the housing market might be going given the worsening economic crisis. If we're on the way to being the next Greece or Iceland
then it's very tempting to take a reasonable offer now (given that reasonable is forever changing) I've joined other forums out there as well so I'm trying to build up a picture.

Well thats kinda the point, I was making.. How much you are affected will largely depend on a lot of the variables previously mentioned..

Case in point.. I purchased our latest home in Nov 2007.. I had it revalued ~8 weeks ago.. the new valuation was 10K more than the original purchase price..

Given the average stats thrown about.. that could not simply be possible.. But the stats are skewed by an over abundance of apartments and houses on ghost estates in areas noone wants to live.. my property is a million miles away from those scenarios and therefore the huge price drops quoted are not a reflection of this particular market...

It would also depend on why you have the property etc.. If it was an investment, and you can easily service the cost, then getting out at the potential bottom of a market will minimise the gains or crystalise the losses.. In that case, if often makes sense to hold on until the market pushes up (but again that will be dependant on the type of property)..

Economy wise.. well your guess is as good as anyone elses If there was any form of certainty, we would all be making a killing on the market

BillShorey

Will you regret not selling it if the value goes down another 33% in the coming months?

If so, sell now.

If you're happy selling it and have the chance to, go for it.

Mr Cawley

Sell before it bottoms out! I wouldn't wait.

Take the offer, don't be silly.

Sell now (and buy something else for a pittance in 3 years time)

Eastern europeans going home, current and future university graduates facing unemployment.

Do you think the country is going back up? Contractors are going bust everyday.

I trade on the stock market and this is a no brainer, Sell it, Quick!

note: this is a general market evaluation, consider specific factors relating to your house.

gurramok

Sell now and take the biggest bid you can get.

This economy is going south further, sentiment on property is still also heading south and unemployment despite what our glorious leaders say is still manifesting itself into no job opportunities for the vast majority of young people as they expect 100,000 to emigrate in the next 4 years. Thats one hell of alot of potential buyers gone which leads to a continuously depressed market.

Dr_Phil

I would like to ask a question about something that bothers me for a while now... Since the end of what used to be called the Celtic Tiger I hear about the falling property prices, misery, tragedy, and so on, on and on. Fair enough. Every so often I read "Over the last 3 months the property prices fell for another 15% and are now 52% below the peak" and that is fine too. However, as the "over the last 3 months the property prices fell for another 15%" part comes up every few months, the "they are now 52% below the top prices"" part remains unchanged since I can remember.

Following sensational news about prices going down 15% every 3 months for the last 3 years, now we should be able to get a gaff for free + about 20k in cash, as they should be down -130% at least.

Where is the catch here? What am I missing or who is talking crap in mass media?

gurramok

Its the media not examine whats going on. Those prices that had risen the most(posh areas) and those were no-one wants to live(junkieville & rural ghost estates) have maybe fallen in price by half.
Middle of the road areas where average income buyers(the majority) want to buy in my eyes have not fallen remotely near 52%. They have another bit to go and will stop at some point, not at 20k

Dr_Phil

gurramok wrote: »

Its the media not examine whats going on. Those prices that had risen the most(posh areas) and those were no-one wants to live(junkieville & rural ghost estates) have maybe fallen in price by half.
Middle of the road areas where average income buyers(the majority) want to buy in my eyes have not fallen remotely near 52%. They have another bit to go and will stop at some point, not at 20k

So can I say it's true that my 3-bed terraced house in Dublin could rose ca. 4% in 2010 as read in some paper/stats earlier last month?

gurramok

Dr_Phil wrote: »

So can I say it's true that my 3-bed terraced house in Dublin could rose ca. 4% in 2010 as read in some paper/stats earlier last month?

Yes, if you read and believe what Sindo type media sensationalism says

If we had access to a house price index, then we'd know for sure what house Y sold for in 2010 and house X next door sold for in 2006!

catbear

The people who put out stories denying that there was a property changed their tune once the crash became conventional wisdom. They now put out stories about huge drops to try to create the impression that there's not much more to go.

Two things will influence further price decreases.

1. Credit supply. Are the banks getting any healthier. Every news story about nearing a bottom in the market can be countered by a bank stating it has to increase its bad debts provisions.

2. The Empties. Eaomoan Ryan came out with some stat that there were only 22,000 empties in ghost estates around the country. However this figure was only counting unfinished estates after 2008/07. There are many, many more empties built before that in completed estates that are omitted from this stats. Massaging the figure impresses no one and does nothign for confidence.

Scofflaw

catbear wrote: »

The people who put out stories denying that there was a property changed their tune once the crash became conventional wisdom. They now put out stories about huge drops to try to create the impression that there's not much more to go.

Two things will influence further price decreases.

1. Credit supply. Are the banks getting any healthier. Every news story about nearing a bottom in the market can be countered by a bank stating it has to increase its bad debts provisions.

2. The Empties. Eaomoan Ryan came out with some stat that there were only 22,000 empties in ghost estates around the country. However this figure was only counting unfinished estates after 2008/07. There are many, many more empties built before that in completed estates that are omitted from this stats. Massaging the figure impresses no one and does nothign for confidence.

You're using a figure that refers to something other than the total of empty properties. It would also most likely be Ciaran Cuffe you're thinking of, rather than Eamon Ryan, since he was the one who launched the report.

The figure is from a report specifically on 'ghost estates', and covers only those estates, not once-off housing or apartment blocks. It's also only the figure for complete but unoccupied houses/apartments in those estates, with an additional 20,000 in various stages of completion.

The CSO identified 266,000 empty properties in 2006, so the full figure for all types is presumably still closer to that. The report on the ghost estates was commissioned because occupied new estates require council services to be planned for them. Other types of property don't require the same degree of council planning to cater for them.

It's hardly surprising that the media don't bother to check their facts, if people can't tell the difference anyway.

cordially,
Scofflaw

silverharp

Interest rates will be a killer. someone paying €1,500 at 3%-4% now will not be able to afford 6% to 7% interest rates and once the banks revert to market rates, every 1% rise in bank rates will knock X% of house prices.

Count Dooku

catbear wrote: »

The people who put out stories denying that there was a property changed their tune once the crash became conventional wisdom. They now put out stories about huge drops to try to create the impression that there's not much more to go.

Two things will influence further price decreases.

1. Credit supply. Are the banks getting any healthier. Every news story about nearing a bottom in the market can be countered by a bank stating it has to increase its bad debts provisions.

2. The Empties. Eaomoan Ryan came out with some stat that there were only 22,000 empties in ghost estates around the country. However this figure was only counting unfinished estates after 2008/07. There are many, many more empties built before that in completed estates that are omitted from this stats. Massaging the figure impresses no one and does nothign for confidence.

Add to that continuous decrease of net income for another 5-6 years due increased taxation and then you will see that house prices far from bottom

catbear

Don't forget possible property taxes and rates. At least if you sell now and are renting you'll have better perspective on what annual extras you'd have to factor in choosing your next house.

Thanks for the correction Scofflow.

SkepticOne

I think there's still a fair bit of downside so I would sell now.

digme

house prices will fall for another 10 years .
And you don't need any qualifications to know that, it's obvious.

Godge

1. How will interest rate rises over the next three years affect property prices?
2. How will further income reductions affect people's ability to pay?
3. How will property taxes and the abolition of rent relief, interest relief and other property reliefs affect propertry prices?
4. How do property prices in Ireland compare with provinical parts of Italy, France and Germany? Too many people compare Dublin with Paris, London and Rome when Palermo, Nantes and others are more suitable comparators.


Answer the above four questions and you will know where property prices are going. You will guess from the way I phrased those questions that I think they are going downwards.

Dr_Phil

digme wrote: »

house prices will fall for another 10 years .
And you don't need any qualifications to know that, it's obvious.

20. 20 defo looks better.

kaiser sauze

Anyone who believes that there will be a significant pick-up in the next five years is not accepting reality. Wait it out if you are a buyer, or snap their hands off if you are a seller and are offered anything like the 'market-price'.

If things keep going the way they are, I'll soon be able to buy my house for cash.

ei.sdraob

kaiser sauze wrote: »

If things keep going the way they are, I'll soon be able to buy my house for cash.

I hope your not keeping this cash in Irish banks :eek: and yes I understand I am a recent cash buyer/selfbuilder

Mister men

Sell before they change their mind.

lancewilliams

If you can sell a property in this market and be reasonably happy with the price you are offered then sell it now. The only place prices are not going for several years is up. for how many years, as with the end of the upward curve is hard to tell exactly, and even the most respected 'expert' would be guessing to a large extent.
When will the property disaster that this country has had inflicted upon it largely by corrupt, inept political and planning sectors end? It's very sad.

nice_guy80

sell.

then rent. you'll have the pick of any house in most areas.

when a good house comes on the market you can go buying

SkepticOne

Brian Lenihan thinks we're at the bottom of the housing market.

On the basis that he's consistently wrong about financial issues you should sell now.

The_Thing

Sell by private treaty, no need to give an auctioneer a single cent.

Homehippo

Even though it is hard to get a true house value in this market you can look at what rent you would receive. Multiply the rent by 10 and divide by 12. This will allow for some expenses and non occupancy. Compare that to the interest you would pay on a 10 year fixed rate which is about 5.2% when I last checked.

If you receive more in rent I would not sell.

As an Investment is paying a capital value now for expected discounted income in the future unless you believe there is a reason why the rents will shoot up in the near future it is probably a good time to sell. If you have a nice tracker mortgage on a low rate and you can receive more rent than you pay in interest it might be worth holding onto the property and becoming a reluctant landlord and let the rent pay of the mortgage.

This is just my opinion and formula.

Homehippo

Even though it is hard to get a true house value in this market you can look at what rent you would receive. Multiply the rent by 10 and divide by 12. This will allow for some expenses and non occupancy. Compare that to the interest you would pay on the 10 year fixed rate is about 5.2% when I last checked.

If you receive more in rent I would not sell.

An Investment is paying a capital value now for expected discounted income in the future.

Unless you believe there is a reason why the rents will shoot up in the near future it is probably a good time to sell.

This is just my opinion and formula.

kaiser sauze

ei.sdraob wrote: »

I hope your not keeping this cash in Irish banks :eek: and yes I understand I am a recent cash buyer/selfbuilder

Spread around in some reasonable notice demand accounts. :cool:

Auctionmcd

The only determining factor is how much people are willing to pay for the property and how much the seller is willing to accept, unfortunately in the boom years common sense did not exist and hype and avarice ruled making the property bubble. There will always be a good time to buy any property but that is dependant on price.

Welease wrote: »

Well thats kinda the point, I was making.. How much you are affected will largely depend on a lot of the variables previously mentioned..

Case in point.. I purchased our latest home in Nov 2007.. I had it revalued ~8 weeks ago.. the new valuation was 10K more than the original purchase price..

Given the average stats thrown about.. that could not simply be possible.. But the stats are skewed by an over abundance of apartments and houses on ghost estates in areas noone wants to live.. my property is a million miles away from those scenarios and therefore the huge price drops quoted are not a reflection of this particular market...

It would also depend on why you have the property etc.. If it was an investment, and you can easily service the cost, then getting out at the potential bottom of a market will minimise the gains or crystalise the losses.. In that case, if often makes sense to hold on until the market pushes up (but again that will be dependant on the type of property)..

Economy wise.. well your guess is as good as anyone elses If there was any form of certainty, we would all be making a killing on the market

mari2222

[FONT=Verdana, Arial, Helvetica, sans-serif]A reasonable indicator can be found by examining house prices, especially when measured as a multiple of average wages. In Ireland's case, the first significant bubble phase was between 1975 and 1981, when average house prices rose by over 300 percent (from around £12000 to £42,000). The second bubble phase ran from 1987 to 1991, during which house prices rose from £49,000 to £67,000, and the third (and most reckless phase) ran from 1994 to 2007, when prices rose from £71,000 to £332,000.[/FONT]
[FONT=Verdana, Arial, Helvetica, sans-serif]Currently (Q4 2010) the average price is around £185,000, representing a fall of about 45 percent from the bubble peak. [/FONT]
[FONT=Verdana, Arial, Helvetica, sans-serif]Where will average house prices end up? Estimates vary. Global financial bubble analyst Nicole Foss, who has recently completed a speaker-tour of Europe (including four venues in Ireland) spoke of an ultimate fall in prices of 70-90 percent from peak bubble price. We would expect to see average house prices fall to about £150,000 by the end of 2011, and under £125,000 by the end of 2012. The cost of building a new house (typically a significantly higher figure) is largely irrelevant as Ireland has a surplus housing stock sufficient to meet demand for at least another decade. [/FONT]

sollar

mari2222 wrote: »

[FONT=Verdana, Arial, Helvetica, sans-serif]A reasonable indicator can be found by examining house prices, especially when measured as a multiple of average wages. In Ireland's case, the first significant bubble phase was between 1975 and 1981, when average house prices rose by over 300 percent (from around £12000 to £42,000). The second bubble phase ran from 1987 to 1991, during which house prices rose from £49,000 to £67,000, and the third (and most reckless phase) ran from 1994 to 2007, when prices rose from £71,000 to £332,000.[/FONT]
[FONT=Verdana, Arial, Helvetica, sans-serif]Currently (Q4 2010) the average price is around £185,000, representing a fall of about 45 percent from the bubble peak. [/FONT]
[FONT=Verdana, Arial, Helvetica, sans-serif]Where will average house prices end up? Estimates vary. Global financial bubble analyst Nicole Foss, who has recently completed a speaker-tour of Europe (including four venues in Ireland) spoke of an ultimate fall in prices of 70-90 percent from peak bubble price. We would expect to see average house prices fall to about £150,000 by the end of 2011, and under £125,000 by the end of 2012. The cost of building a new house (typically a significantly higher figure) is largely irrelevant as Ireland has a surplus housing stock sufficient to meet demand for at least another decade. [/FONT]

90% :eek:, that would mean one of those apartments in dublin costing 500K would be going for 50K.

From what i've been reading of similar bubbles abroad 60% falls prom peak are considered quite severe, but 90% i just can't see.

Japer

sollar wrote: »

90% :eek:, that would mean one of those apartments in dublin costing 500,000K would be going for 50K.

Brand new apartments have been selling for 50k and less than 50k in the midland counties, and western + n. western coatal counties for some time now
e.g. http://www.daft.ie/searchnew_development.daft?id=8384

http://www.daft.ie/searchsale.daft?id=567837

why should prices not reduce by similar percentages in Dublin too ?

n.b I know its crazy that brand new apartments should sell in Ireland for the same as the average yearly public sector wage , but its strange times we live in....and sorry to say but all indicators are that it can only get worse before it gets better. Look on the bright side, where else in the world could you buy a nice new apartment for a years gross average public sector wages ? Great country Ireland is.

RichardAnd

sollar wrote: »

90% :eek:, that would mean one of those apartments in dublin costing 500,000K would be going for 50K.

From what i've been reading of similar bubbles abroad 60% falls prom peak are considered quite severe, but 90% i just can't see.

50k is a reasonable price for an apartment if some locations IMO. However, there are houses and apartments that were built during the boom that I, personally, would not pay 5k for they were so badly built.

Dr_Phil

vamboroolz wrote: »

how much further down the housing market will go?

18 months.

Permabear

This post has been deleted.

sollar

Japer wrote: »

Brand new apartments have been selling for 50k and less than 50k in the midland counties, and western + n. western coatal counties for some time now
e.g. http://www.daft.ie/searchnew_development.daft?id=8384

http://www.daft.ie/searchsale.daft?id=567837

why should prices not reduce by similar percentages in Dublin too ?

Japer, yeah i have heard of apartments going for 50K also but for them to have suffered a 90% drop in value they would need to have been 500,000K at peak. The midlands apartments would not have been that high.

Japer

fair point. I know they did not drop 90% and sorry if you think I implied they dropped that. However the real world drop is well more than the 50% the economists talk about anyway.

Dublin prices are still overvalued.

sollar

Japer wrote: »

Dublin prices are still overvalued.

True and as donegalfella mentioned the pain is likely to be felt by apartment owners most severely.

I can't imagine how distressing it would be to have forked out €400,000 or €500,000 on an apartment in 2007 and watch it devalue so severely