House price rebound.....ya right, maybe 2026.

ArraMusha

Did ya see that article in todays sunday indo.

and the reference from Dr Conor Skehan, head of Environmental Planning at the Dublin Institute of Technology, where he said in relation to future prices..

""I like to make the analogy of what happens when you hold a ping-pong ball under the water and let it go, the way it abruptly pops up"

The article has no basis! If anything the opposite is more likely

Its appropriate that he used a ping-pong ball and water analogy alright as we all know the country is under water and ping-pong balls are full of air...

..and what about the hole on the ping-pong ball letting water in...that wasn't mentioned...:eek:...we're all felling that leek, Dr Shehan.

"the ship struck a rock, oh lord what a shock........the last of the Irish Rover"

snowstreams

I think the Indo and RTE are trying to help out their developer friends by scaring people into buying.

Dob74

As usual the spindo talking up the property market.
It's over house prices should be 3 times earning not 15 times earning.

blah

I think we'd be better off investing in the actual ping pong balls.

Treehouse72

When you hold a ping-pong ball underwater, you are artificially denying its equilibrium location, which would be floating on top of the water.

The entire analogy is nonsense because the premise that house prices are somehow being held back from their natural level is simply laughable. From there, the whole gist of the analogy is shot.

SouperComputer

Dreamland. House prices that increase at a rate faster than wages are not normal, or healthy. When are people going to understand this? Seriously WTF!?!? Are a lot of people still expecting the market to "come back" and be able to sell houses to each other again for a lofty profit, all the while thinking its sustainable?

The "doctor" mustn't have gotten the memo that its not the ping pong ball, but that the water level has lowered and will continute to do so for some time. If anything, the feckin ping pong ball is ABOVE the water line still.

/boggles

The Indo is as bad as the tabloids imo.

An absolute rag of a paper.

irishh_bob

must be seriously short revenue , the sindo

noxqs

A residential property is a bad asset:

1. It has no income or revenue.
2. It has negative cash flow due to upkeep, maintenance and repair.
3. Historically - follows inflation slavishly.

Why then - would they 'suddenly' start gaining in price massively ? First they need to hit the equilibrium where the market is healthy ie: 2.5x-3x annual income of a SINGLE person.

Not two, not 1 1/2. But one. Just one.

"Ah sure but in Ireland women work too now so surely it should be included?"

.. Well, the rest of Europe and the US has done this for nearly a century and it didn't affect house prices much due to that.

And risk reduction for lenders should assume the household could loose one income at any one time.

Anyone who buys property based on advice from the Indo deserved and still deserves whats coming to them.

Spiritofthekop

"So, as we head into two more austerity budgets and a Eurozone partial default, a slow down in the world economy and unemployment that is leading to emigration again these 'experts' are now claiming that the property market is going to bounce back?! Given how stupid this claim is can we have this 'DIT expert' investigated for not knowing his supposed expertise. I, for one, am unhappy to have my taxes pay for someone who is clearly delusional.

As for the Governor, he is mistaking his own experience on a high wage with that of real people. House prices are not sustainable and it is unfortunate that in a misplaced attempt to bring confidence back that he would misinform the public.

At least with the estate agent you can understand why he would spin this nonsense. House prices will continue to fall for at least the next five years (and even then as high inflation hits after all the quantitative easing thats debatable). When three bed semis are down to about €120k and apartments are around €45-50k then their pricing will be somewhat sustainable. As a rule of thumb houses should be mortgaged on the basis of one and a half times the average salary. Once those selling property realise this then RTE can produce factual programming.

As someone who constantly told people that house prices were unsustainable for the past 10 years I am really angry that this kind of nonsense is being foisted on the Irish people again"

Agree with everything above, especially the part at the end. This idiot should not be allowed to give out this sort of advice when its obvious that people are in trouble with money all over the country.

meglome

I was just reading this in the indo online and came in here to post about it. What a crock of shíte... that's my analysis.

If anyone falls for that they need a public flogging for epic stupidity.

jmayo

ArraMusha wrote: »

Did ya see that article in todays sunday indo.
...

First off please tell me you did not pay good money to purchase that rag and that you saw it whilst visiting the facilities of some poor person who could no longer afford Kleenex, Andrex, Inversoft, Aldi, Lidl or some other brand of toilet paper.
At least Meglome has the righ idea and uses their internet site, albeit slow.

What astounds me is how anyone can actually put their name to such a piece of cra*.
Is this so called expert a lecturer that will be imparting knowledge to our so called high calibre students that will lead our smart knowledge economy of the future ?

Hell the author and expert of this piece begin to make Jim Corr look positively switched on about future world politics. :rolleyes:

Godge

ArraMusha wrote: »

Did ya see that article in todays sunday indo.

and the reference from Dr Conor Skehan, head of Environmental Planning at the Dublin Institute of Technology, where he said in relation to future prices..

""I like to make the analogy of what happens when you hold a ping-pong ball under the water and let it go, the way it abruptly pops up"

The article has no basis! If anything the opposite is more likely

Its appropriate that he used a ping-pong ball and water analogy alright as we all know the country is under water and ping-pong balls are full of air...

..and what about the hole on the ping-pong ball letting water in...that wasn't mentioned...:eek:...we're all felling that leek, Dr Shehan.

"the ship struck a rock, oh lord what a shock........the last of the Irish Rover"

Like most economists he is making the mistake of assuming all other things are equal.

To use his own analogy, the rebound of the ping-pong ball only works if there is water in the tank the ping-pong ball is in. If all of the water has drained out of the tank (credit out of the economy), there is nowhere for the ping-pong ball to go except to sit at the bottom of the tank in its new-found equilibrium. If the tank slowly fills with water (as credit availability returns post-2014), the ping-pong ball may rise also slowly (if it is not held down), but if the new level of water is a long way below the previous established level (less credit permanently), then the ping-pong ball will never rise to the previous heights.

Mr. Loverman

meglome wrote: »

If anyone falls for that they need a public flogging for epic stupidity.

Unfortunately they'll probably get a bailout...!

royaler83

Mr. Loverman wrote: »

Unfortunately they'll probably get a bailout...!

This is richard curran's view from the SBP yesterday, he presents a program about the future of the property market on rte tonight

http://www.thepost.ie/news-features/shock-to-the-system-58993.html

D3PO

Spiritofthekop wrote: »

". As a rule of thumb houses should be mortgaged on the basis of one and a half times the average salary. .

Since when ? Now I dont disagree houses are still overpriced this comment is as equally absurd as the indo article.

1 and a half times the average salary has never been the basis of the average house price.

Zamboni

D3PO wrote: »

Since when ? Now I dont disagree houses are still overpriced this comment is as equally absurd as the indo article.

1 and a half times the average salary has never been the basis of the average house price.

Yeah I thought that was a typo when I read that.

Average salary is also a very subjective thing.
I've seen figures bandied about between €32k and €35 but I am certain those figures are from five years ago and would have significantly dropped since then.
Does anyone know what the most recent figure for the average industrial wage is and the average wage?

noxqs

Average from CSO.ie 2nd quarter 2011:

687.24

Per week. That translates to 35736.48 average annual industrial wage as of now. Which seems high but check it out:

http://www.cso.ie/quicktables/GetQuickTables.aspx?FileName=EHQ03.asp&TableName=Earnings+and+Labour+Costs&StatisticalProduct=DB_EH

P.S:

This is why - its a sum of all workers, look at PS salaries per week, that surely lifts the total - can't find a sanitized stat for non public sector:

http://www.cso.ie/quicktables/GetQuickTables.aspx?FileName=PSA01.asp&TableName=Public+Sector+Average+Weekly+Earnings&StatisticalProduct=DB_PS

Gardai on 1,207.24 per week average. Haha. Oh dear.

Not a single PS worker average weekly salary was anywhere near the industrial weekly wage for the same years.

Ray Palmer

noxqs wrote: »

A residential property is a bad asset:

1. It has no income or revenue.
2. It has negative cash flow due to upkeep, maintenance and repair.
3. Historically - follows inflation slavishly.
.

That just isn't true because it relies on the absensense of where are you going to live. Rent follows inflation but your mortgage payment doesn't follow inflation. The income from a home is is the difference between rent and what it costs you to pay your mortgage. As you buy at a fixed point house inflation doesn't really effect you unless you are selling.

House prices will recover at some point as will the banks. The decline of the western world is not going to happen. People will continue to get older and require places to live. If you are 35 now without a property in 10 years time and you want a house (most people actually want one) you will be still trying to buy while all the late 20s people will too.

If this doesn't happen rent will go up but most likely both will go up. It is like the tides it will happen. Will it take 15 years? I doubt it