Would you like to see a total property collapse?

later12

Do you advocate a total collapse of the Irish property market?

Seems like a strange question, doesn't. it. For many people, this is an inevitability, others think that policy change could still affect the downward turn to stabilise even further, and that house prices might plateau or eventually rise.

This follows on an earlier thread, which got off topic.

There, one poster suggested that the property market should be allowed to collapse totally, and that recovery would happen immediately.

Personally, I have never seen a total economic collapse that recovered immediately.
Nor do I think that the property market should be allowed to collapse totally. Whether we like it or not, the state is now responsible for the Irish banking system, its bad debt, its criticised debt, and its good debt. We are, as a state, in the business of banking, warts and all. In my opinion, now is not the time to encourage a property collapse; doing so will damage irreparably the vocational profession of this very state, and with it, its people long long into the future.

Opinions?

opinion guy

I believe I speak for many people when I say......
......
...



....

.......huh ?

Bob_Latchford

Would like to see a return to long term affordable housing for people to call a home and live in.

SuperInfinity

uh...

Dude, there was already a total collapse in the property market. Were you in a coma for the past two and a half years or so?

shannonpowerlab

I think I would... As it is starting to look like which ever the direction they fall, it would send many families with any bit of money left could flee the county to start a new life elsewhere...That is what I would do anyway if I get taxed out beyond my lower than average humble lifestyle.

If more than say 100,000 families do that...would that not collapse the market beyond 50%?

later12

Dude, there was already a total collapse in the property market. Were you in a coma for the past two and a half years or so?

No i mean total collapse - mass defaulting, an erosion of hosue prices far worse than current levels.

George Orwell 1982

SuperInfinity wrote: »

uh...

Dude, there was already a total collapse in the property market. Were you in a coma for the past two and a half years or so?

The question is how far below cost price will property fall in Ireland.

Permabear

This post has been deleted.

danbohan

SuperInfinity wrote: »

uh...

Dude, there was already a total collapse in the property market. Were you in a coma for the past two and a half years or so?

their has been a collapse of maybe 50% max , thats not total , their is a huge amount of collapsing still too happen especially outside major urban centers

dan_d

Em..no.Not really.

We always say our house prices are enormous.They were, and they've a bit to drop yet before they hit "affordable" levels...but what's an affordable level?Seriously?

I have a friend in Canada who recently bought a property. It's a 2bed apartment, just on the outskirts of a major city, 5 mins from excellent public transport, in a well landscaped and long-established development.Naturally, it's not a 2 bed as we know it - the square footage is close to that of a 3/4 bed house here in Ireland.It cost the equivalent of 260,000eur, and they had to have a 20% deposit.

Is that affordable???It is to her.I'm not sure what her interest rates are, but I'd imagine they're higher than here.

Godge

Property prices need to find their level.

Dublin prices need to fall to the level of small regional cities in Europe - Edinburgh, Nantes, Palermo, Naples, Montpelier, Seville etc. with the upper limit of prices being somewhere like Manchester. From what I can see from an unscientific look at the web, they still have an amount, maybe 20-30% to fall. Prices outside Dublin should be around 60% or less (depending on lcoation) of the Dublin price. Again, they have some way to go.

At the moment there is a surplus of housing and not a lot of building so the cost price is of less concern. In the medium-term, we need to bring the costs of building houses - labour and materials - down to levels that make it economically possible to build houses again. Pulling down the cost of labour is one of the reasons behind the proposed cut in the minimum wage.

later12

donegalfella wrote: »

This post has been deleted.

True, but I am talking about a total collapse, whereby another 40% could be knocked off current values outside of Dublin, or up to 60% off values in the capital. Some people regard this as an inevitability next year, personally I don't regard it as inevitable and I don't think it would be particularly helpful.

Permabear

This post has been deleted.

shannonpowerlab

Though...is it a bad thing for banks to drop propety prices?
I thought their balance sheet was based on assumption that the current boomtime home owner would pay off the mortgages?

If the price drops would a lot of people opt for taking the path of strategic defaulting as pay cuts and increase in cost of home repayments will go out of balance...?

dan_d

Not sure - are our rates pushing around 5/6% now?
I know we got a mortgage in '08 and the rate was about 5.05 (thankfully it's a tracker), so that's what we budgeted for.We have a surplus now, but we can take it creeping back up.
I know Canada didn't lose the plot the way we did......

Wow.Flicking through their sites, they're talking about 5 or 10 year fixed rates.Anyway, a very quick glance show their rates are running between about 3.2% and 5.3% ish....

And here's a snapshot of how to correctly monitor a property market.
http://www.bloomberg.com/news/2010-11-24/canada-teranet-house-prices-drop-for-first-time-in-17-months.html
Why couldn't we be clever like that? "Moderation is a good thing".

Spacedog

3 words...

Forth Land Act.

shannonpowerlab

Well I am not sure if you agree but... At this stage, does the government have choise not to blow it worse than it is now?

Things that are expected are the return of property taxes, end of interest relief, increase in income taxes and of course the most likely hike in interest rates and pretty much 0% (like 0.03%) interest on investment savings in the government's attempt to pay off the debt...

Imagine what could happen if the corporate tax gets touched...

Any cut will work against them and if they don't then they will be cut by EU...

Sounds like having to pick between stabbed by a knife or to swallow a knife...

Well, what can I say, what goes around comes around...

Red_Marauder

Ehhh... no.

The only thing that needs to collapse any more is the government.

Why in hell would you want a property collapse?