Young couples told 'rent, don't buy' as prices keep falling

Rabidlamb

http://www.independent.ie/business/personal-finance/property-mortgages/young-couples-told-rent-dont-buy-as-prices-keep-falling-2949450.html

THOUSANDS of potential first-time housebuyers were last night told to rent rather than buy as prices are forecast to continue falling for the next two years.

Prices for starter homes typically bought by young couples will plunge by 10pc this year, and by between 5pc and 7pc next year, the ESRI says in a major new report published today.

Among the conclusions in the reports are:

- House prices are likely to fall by 55pc from the peak before they stabilise.

Don't worry, next month some vested group will be telling you it's now time to buy :rolleyes:
People are always going to be tempted by their "dream home" or the "perfect time" but unless you're getting a fair discount (55%+ from peak) then walk away.

Milk & Honey

By the time any commentator says it is time to buy it will be well after the minimum prices have been reached and the market will be in upswing.

smallerthanyou

I like being told what I'm doing is right. I'd love to buy a home tomorrow but there is just nothing reasonable on the market so still holding out. And will keep holding out for another year or two anyway.

howamidifferent

Rabidlamb wrote: »

http://www.independent.ie/business/personal-finance/property-mortgages/young-couples-told-rent-dont-buy-as-prices-keep-falling-2949450.html





Don't worry, next month some vested group will be telling you it's now time to buy :rolleyes:
People are always going to be tempted by their "dream home" or the "perfect time" but unless you're getting a fair discount (55%+ from peak) then walk away.

There only 5 years too late with the message. Still better late than never

Spiritofthekop

Wow im surprised the media were allowed to publish the "TRUTH" about the property market!

Finally they are getting with reality & have given up trying to lie about it to the people for there own personal greed & bad investments!

Ireland is in a mess & looks like will be for a long long time to come.

The property market needs to hit rock bottom before we can start to rebuild again.

Hell we might have to change our family names into German soon.

I will do it too.... but only if Bertie changes Ahern into the famous German footballer from the 90's...what was his name...."Stefan Kuntz"

Damie

Milk & Honey wrote: »

By the time any commentator says it is time to buy it will be well after the minimum prices have been reached and the market will be in upswing.

Which is surely the better time to buy rather than a down swing;)

Won't be much of an upswing tbf!

Rabidlamb

howamidifferent wrote: »

There only 5 years too late with the message. Still better late than never

Yates was all over this on Newstalk this morning but the Indo had already buried it as a sub-headline on emigration.
Morgan Kelly's 65% is coming closer & closer.

Snakeblood

Rabidlamb wrote: »

Yates was all over this on Newstalk this morning but the Indo had already buried it as a sub-headline on emigration.
Morgan Kelly's 65% is coming closer & closer.

I thought he was predicting 80% or do you mean something else (or am I misremembering)?

ShadowHearth

I was on a roll to buy a house since early summer.

Last week our second property felt through, this time because of a fire escape hazard...
Me and misses exhausted as **** from whole experience with buying a house, so we are pulling out and waiting for next summer to look in to it now.

Good thing abouth whole ****y long process we saved a good bit of money.

I have to say, not buying a house anymore ( for now ), took away my depression and crankiness in seconds. Way too much stress and idiocy to buy a house. When you think all paper work sorted, you get a wee slap and back to squire one.

I guess I still got time so, and I will have even more savings next year. It was a sign lads, it was a sign.

Rabidlamb

Snakeblood wrote: »

I thought he was predicting 80% or do you mean something else (or am I misremembering)?

Ooooo , you could be right.
I remember him being interviewed on a Prime Time program about a year ago.
80%!!!! . . . . Shirley not.

Rabidlamb

ShadowHearth wrote: »

I was on a roll to buy a house since early summer.

Last week our second property felt through, this time because of a fire escape hazard...
Me and misses exhausted as **** from whole experience with buying a house, so we are pulling out and waiting for next summer to look in to it now.

Good thing abouth whole ****y long process we saved a good bit of money.

I have to say, not buying a house anymore ( for now ), took away my depression and crankiness in seconds. Way too much stress and idiocy to buy a house. When you think all paper work sorted, you get a wee slap and back to squire one.

I guess I still got time so, and I will have even more savings next year. It was a sign lads, it was a sign.

Unanswered prayers & all that.
At the start of the crash my neighbour tried to sell up but the bank prevented the sale due to the €20k shortfall.
He since lost his job & hasn't made a full payment in over 3 years.
I hope whatever bank official dealt with the case burnt any records of the offer for their sake.

the groutch

you might get a bit of an anomaly in the trend next autumn with the impending end to mortgage interest relief.
it might reduce the supply enough for the market to begin bottoming out in 2013.

Zamboni

the groutch wrote: »

you might get a bit of an anomaly in the trend next autumn with the impending end to mortgage interest relief.
it might reduce the supply enough for the market to begin bottoming out in 2013.

That would just be a small dead cat bounce, no?
Idiots rush in to take advantage of the relief, it then gets reduced/removed leaving even less of an incentive to buy.

whippet

I had an offer in on a house (offered about 30% of what the peak price was) ... the sellers hummed and hawed about the offer for two months. I eventually withdrew my offer.

The sellers EA contacted me last week to see if my offer still stood .. I told them no and am looking at other options.

I might make another offer in a few months at a further reduced price.

The sellers have no mortgage on the house, it has been on the market since 2008 (started at just shy of the million mark)

Vendors have no idea what to be pricing their houses at - delusional (probably as their always thought their house was their retirement) In my case it looks like a few weeks of indecision will cost the vendors about 25-40k based on what I will probably offer

TheFarneyman

interest relief falling at end of 2011, then gone by 2012. small print of last budget.
25%on first 10,000 interest until 2012 then 15% on 3,000 intetrest in 2012. o%in 2013. Another genius scheme by the government!!!!!!
i predict it'll bottom out by 2013 at around 65/70% max of peak but there are bargains to be had now around 60%of peak prices
20,000ish on rent for two years which is probably (depending on price) around 5% would bring you very close to the 65%

MrThrifty

TheFarneyman wrote: »

i predict it'll bottom out by 2013 at around 65/70% max of peak but there are bargains to be had now around 60%of peak prices
20,000ish on rent for two years which is probably (depending on price) around 5% would bring you very close to the 65%

Alas, someone talking a bit of sense...

If I recall correctly, the same newspaper was generally encouraging/recommending folk to buy all throughout the boom... :rolleyes:
I presume folk are aware of the role the media played in contributing to the boom... this all now seems so familiar, except in reverse...

Reminds me of Eddie Hobbs on the radio recently pretty much advising folk to change their euros to sterling... :rolleyes:

As has been pointed out before, there are and always have been advantages of owning one's own home versus renting. Those with the means will continue to buy houses based on that need, in the same way that someone might buy a brand new car, knowing full well that it will lose value once they drive away from the garage. Generally speaking, cars are not financial investments in the same way that houses are not financial investments (guaranteed at least). However, houses are 'investments' in other regards.

Am I in denial that houses prices will fall further? Of course not. But do I believe that house prices will fall based on rationale versus mindless fear? Unfortunately not. In the same way that greed contributed to the boom, we the Irish, and all these folk popping up left right and centre who consider themselves experts on the subject, appear more than capable of making a bad situation unnecessarily much worse. Nice work...

royaler83

One thing which I think some on here are forgetting is that with every passing budget for the next God knows how many years more and more money will be taken out of the ordinary joe soaps hand.

This in itself will help (for the want of a better word) pull prices down as the ordinary joe soap just won't be able to afford to buy his 1st home at these prices or even upscale as money will be scarce.

He/She will have to fuel/tax a car, put children to school/college all of which are getting dearer while all the time paying more income tax/prsi etc along with paying rent.

The money just won't be there

Sorry just read that article and it mentions the budgets and lack of money going forward

Spiritofthekop

MrThrifty wrote: »

Alas, someone talking a bit of sense...

If I recall correctly, the same newspaper was generally encouraging/recommending folk to buy all throughout the boom... :rolleyes:
I presume folk are aware of the role the media played in contributing to the boom... this all now seems so familiar, except in reverse...

Reminds me of Eddie Hobbs on the radio recently pretty much advising folk to change their euros to sterling... :rolleyes:

As has been pointed out before, there are and always have been advantages of owning one's own home versus renting. Those with the means will continue to buy houses based on that need, in the same way that someone might buy a brand new car, knowing full well that it will lose value once they drive away from the garage. Generally speaking, cars are not financial investments in the same way that houses are not financial investments (guaranteed at least). However, houses are 'investments' in other regards.

Am I in denial that houses prices will fall further? Of course not. But do I believe that house prices will fall based on rationale versus mindless fear? Unfortunately not. In the same way that greed contributed to the boom, we the Irish, and all these folk popping up left right and centre who consider themselves experts on the subject, appear more than capable of making a bad situation unnecessarily much worse. Nice work...

I think you will find the media have tried every dirty trick to hold the property market up the last 3 years but money & reality talk & they can no longer hide from the fact the market is in freefall & will continue to fall as people no longer have or can get the silly money required to buy in most situations a massivley overvalued & overpriced house in Ireland these days. That is until it hits rock bottom. Banks are only giving out small mortagages if any.

The media big wigs (who probably purchased a load of cheap ass paper walled investment properties have a vested intrest in the property market) have been despartely trying to stop the decline by writing silly articles in various newspapers, planting idiots on the various tv shows telling people to buy now the market is at its lowest etc etc, while ignoring people like Morgan Kelly who has been trying to tell people the truth for years.

The media is not doing this on purpose the market is in freefall and nothing looks like stopping it for years yet. The media has just given up trying to hide it from everyone as its like flogging a dead horse at this stage, people are not being fooled anymore.

Snakeblood

MrThrifty wrote: »

In the same way that greed contributed to the boom, we the Irish, and all these folk popping up left right and centre who consider themselves experts on the subject, appear more than capable of making a bad situation unnecessarily much worse. Nice work...

It's actually making the situation better, not worse. Nice work indeed.

Villa05

Just for the record, today's allsop auction puts the decline from peak at 65 to 70 %. As this is the only outlet to get true price visibility, that's where I would be pitching any offers, allowing, of course for further budget cuts in the coming years.

The prices achieved overall – there were exceptions – seemed to me to point to a further weakening in what were fire sale prices and pointed to declines from peak asking prices of around 65-70%..
http://namawinelake.wordpress.com/2011/11/30/largest-property-auction-ever-in-progress-in-ireland-results-and-analysis/

Idbatterim

Idiots rush in to take advantage of the relief, it then gets reduced/removed leaving even less of an incentive to buy.

Thus further reducing demand and hence prices... Nail on the head! you know I reckon the major drops will have stopped by 2013, i.e they may stay static then or drops will be negligible. But then the other side of me looks at the figures I saw in Indo the other day what is it 4 or 5 more budgets removing billions from the economy each year, read also about the amount of people that will be emigrating next year... I mean didn't we recently think the % rate of drop had slowed only for it to massively accelerate again in October? God knows where it will all end up... Economic growth forecast for next year has already been more than halved also!

noxqs

Japans curve would look likely in my opinion - based on weak growth, high debt, low consumer spending and general very little optimism in the market. When we reach the bottom - which could be in 2013-2014 as far as big drops are concerned - I doubt people will rush out and buy enough properties to push up prices.

A gradual decline or flat lining for the next decade following seems very likely in my opinion. The young ones coming of age in the next 10 years have seen what happened to people who bought houses, and I doubt the same drive to be a home owner will exist in them.

Which may see Ireland drop into a more 'European norm' of 60% or so renters which would put pressure on the government to implement proper laws protecting tenants rights etc.

I would like to see what happens after budget 2012 - and 2013, 2014 all of which will be further compounded austerity budgets. Hard to sell a family on a dream house in doom and gloom !

Price on mobility in this economy is priceless. Be it emigration or simply moving around towns to chase jobs.

Mortgage interest relief doesn't mean anything to people with a calculator looking a little bit ahead of what may be next.

washman3

Villa05 wrote: »

Just for the record, today's allsop auction puts the decline from peak at 65 to 70 %. As this is the only outlet to get true price visibility, that's where I would be pitching any offers, allowing, of course for further budget cuts in the coming years.

I'm familar with that Shannonvale development in Limerick City.
As far as i remember when those houses came on sale originally people slept in their cars overnight to buy off plans and "bag a bargain"
They were around 260-280k mark.
That one sold today for 106k from a reserve of 90k. did well considering.!
Still, auctioneers in the city getting increasingly squekier bums.(and not before time)

Villa05

washman3 wrote: »

I'm familar with that Shannonvale development in Limerick City.
As far as i remember when those houses came on sale originally people slept in their cars overnight to buy off plans and "bag a bargain"
They were around 260-280k mark.
That one sold today for 106k from a reserve of 90k. did well considering.!
Still, auctioneers in the city getting increasingly squekier bums.(and not before time)

I went to see the Cois Ghruada apartments in Castletroy. Auctioneer done a great job in offloading them. I thought the 4 bed would not breach the 100k mark and maybe 70 for the 2 bed. they made 111k and 81k respectively.

Looks like you can buy in Dublin & Galway cheaper than Limerick at the moment. Michael Noonan better deliver a few jobs for the area.