Have we hit rock bottom?

poker--addict

Lots of people applying for mortgages.

What do you guys think 2012 holds?

Improbable

Nobody has a feckin clue.

patwicklow

prices will fall for another 5-10 years

randylonghorn

No way have we hit bottom, and it will be several years before we do.

Even to-day, for instance, rent subsidy for those on low income / social welfare was cut pretty drastically. This will affect approx. 96,000 households, and ultimately their landlords, who will either have to reduce the rent charged or seek new tenants.

Lower rent subsidy >> lower capacity of a large number of households to pay rent, combined with an over-supply of rental properties in most areas >> fall in average rent >> further downward pressure on property prices.

gurramok

poker--addict wrote: »

Lots of people applying for mortgages

How do you know?

listermint

No one knows , Who cares ? Tune in next week to the zany threads of 'have we hit rock bottom'.....














*find out what happens next week by staring into the crystal ball

Theboinkmaster

Improbable wrote: »

Nobody has a feckin clue.

I disagree - prices 99.99% certain to continue dropping this year, has been discussed at great length on this forum.

zef

Brendan O'Connor hasn't voted yet i see.

jester77

Look at it from a logical point of view. Unemployment and emigration is still increasing, banks are not lending, more taxes and levys on the way in the next few budgets, it's inevitable that CPA will have to go and if it doesn't then cuts will be made once expired, so civil servants will have less income, income tax will rise in next few budgets, water, fuel & household charges will leave people with less disposable income, a lot of uncertainty in the markets with a lot of economists forecasting the end of the euro.

Rock bottom is not even close!

poker--addict

gurramok wrote: »

How do you know?

http://www.ftadviser.com/2012/01/18/mortgages/mortgage-data/mab-mortgage-applications-up-per-cent-6g6vhRPbi73A56GbvyMpYJ/article.html

Mortgage applications up in 2011 and for first few weeks of 2012, however nobody said anything about approvals going up;) Banks won't lend until prices bottom off, sadly thats up to them, chicken and egg.

gurramok

poker--addict wrote: »

http://www.ftadviser.com/2012/01/18/mortgages/mortgage-data/mab-mortgage-applications-up-per-cent-6g6vhRPbi73A56GbvyMpYJ/article.html

Mortgage applications up in 2011 and for first few weeks of 2012, however nobody said anything about approvals going up;) Banks won't lend until prices bottom off, sadly thats up to them, chicken and egg.

That's in the UK!

Mr. Loverman

gurramok wrote: »

That's in the UK!

Haha

muletide

poker--addict wrote: »

http://www.ftadviser.com/2012/01/18/mortgages/mortgage-data/mab-mortgage-applications-up-per-cent-6g6vhRPbi73A56GbvyMpYJ/article.html

Mortgage applications up in 2011 and for first few weeks of 2012, however nobody said anything about approvals going up;) Banks won't lend until prices bottom off, sadly thats up to them, chicken and egg.

Good research

Cuddlesworth

With at least another three years of cuts and tax hikes it would seem unlikely that their would be a increased demand for mortgages to justify prices bottoming out. Plus, its becoming more and more obvious to people of my generation(20-30) that buying a house is not the guaranteed investment that everybody always assumed it was.

poker--addict

right guys understood i made a mistake, big deal, build a bridge and get back on topic!! If everyone was so smart the market wouldn't have crashed. Bet ye were not as quick to point out your own mistakes then:D

The important fact is 80% of applications are refused. People want to buy, the banks don't let them. So whats the point in applying, so really the application stat is irrelevant, the stat of approvals is the important one.

For the record applications were up about 4 or 5 % in 2011.

patwicklow

i see alot of people are going back to living in mobile homes, as house prices are still a rip off they are bricks and mortar a place to sleep in i think its still over looked by greed

seamus

It's impossible to say really. Availability of mortgages and household budgets appear to remain constrained for the next few years anyway, so who knows?

There is talk of "pent-up demand" that would be released if the banks were free to lend, but people are still making the mistake in thinking that mortgages will be handed out like sweets as they were before. Even if the banks make more capital available to lend as mortgages, there's nothing to say that they won't lend at more sane levels which don't meet asking prices.

I do know one thing though anecdotally - there are still plenty of of people in the 25-35 age bracket who are sitting it out at present, but who don't want to be renting for the rest of their life. Renting is still not seen as a long-term thing by many Irish, probably due to our tradition of wanting to own, and our poor tenancy laws.
Though they may have no choice except to rent in the long-term.

gurramok

poker--addict wrote: »

The important fact is 80% of applications are refused. People want to buy, the banks don't let them. So whats the point in applying, so really the application stat is irrelevant, the stat of approvals is the important one.

For the record applications were up about 4 or 5 % in 2011.

Source?

Anyway, that 80% refusal rate is from here. http://budget.breakingnews.ie/?jp=eyidkfkfmhql&c=ireland&h=lenders-rejecting-id-out-of-kfau-home-loans

The Professional Insurance Brokers Association (PIAB) said the main reasons clients were refused mortgages was because 35% of applicants had no savings, 32% did not qualify for the amount required, there were fears over job security for 29% while another 29% had a bad credit history.

Down to the individual as I can see there rather than the banks.

pavb2

Some good points and that's it, are we any better off than we were 3 years ago?

24/7 media coverage of economic debate, insightful opinions etc etc.

IMF & Euro bail out,bank bail out,austerity measures, change of Govt and we still don't know if the worst is over or yet to come.

CricketDude

Nobody knows when. But when we do, as the economy recovers, it will be enough irish people back in to stabilize the prices. Then foreign investors will be looking at the rate of increase in prices and start to buy property here. There will be a tipping point where they pile in and prices rocket again. Eventually there will be another recesion and the merry go round goes around again.

Spiritofthekop

zef wrote: »

Brendan O'Connor hasn't voted yet i see.

Oh Yes he has!

poker--addict

gurramok wrote: »

Down to the individual as I can see there rather than the banks.

It is very easy for the bank to say that now. Almost any job can be regarded as having job security fees, I have a family member who's large multi-national company with 13 directors is now down to 5, nobody is safe.

Secondly what exactly is a bad credit rating, when you don't want to loan people money. I over used my credit card last year in france and got charged 8 euro fine for the privilege, that probably counts me out of the "select" few.

Icepick

Not even close. Wait till NAMA starts to offload its portfolio.

gurramok

poker--addict wrote: »

It is very easy for the bank to say that now. Almost any job can be regarded as having job security fees, I have a family member who's large multi-national company with 13 directors is now down to 5, nobody is safe.

Secondly what exactly is a bad credit rating, when you don't want to loan people money. I over used my credit card last year in france and got charged 8 euro fine for the privilege, that probably counts me out of the "select" few.

As for multi-nationals, can you elaborate on that family member? Are they a director? It sounds an extreme case.

The general case is that if you have been in a permo job for at least a year and not in a vulnerable sector(construction etc), you should be ok. A colleague of mine a got a mortgage last year while in the IT sector, he's been in his job for at least 5 yrs who obviously didnt borrow beyond his means. And yes nobody is safe, a bank would not really know that outside the vulnerable sectors.

As for the CC, you should really know to be careful on it as any mortgage application will be scrutinised for prudence. If you're worried, get a credit check from the ICB http://www.icb.ie/. 6 euro fee to put your mind at rest.

Senna

I cant see a reason for prices to stop dropping any time soon. Even when they do, its likely they will remain stagnant for a few more years, if they do in reality they will still be dropping, as inflation will continue but house prices wont rise.

When we do hit rock bottom, you will only realise it in a thread called "did we hit rock bottom 8 months ago?"

washman3

poker--addict wrote: »

right guys understood i made a mistake, big deal, build a bridge and get back on topic!! If everyone was so smart the market wouldn't have crashed. Bet ye were not as quick to point out your own mistakes then:D
.

manyy,many people on boards.ie pointed out the scam that was the "celtic tiger". they were told to go commit suicide, by our prime-minister!!!.:mad:

washman3

CricketDude wrote: »

Then foreign investors will be looking at the rate of increase in prices and start to buy property here. There will be a tipping point where they pile in and prices rocket again.

foreign investors woud'nt touch anything here with a 40 foot pole, or wont for many a long day. the balance has shifted,the circus has upped and left and will be very,very slow in returning. they're minds are focussed elsewhere now,mainly the East.
no piont in deluding ourselves...;)

BowlingLad

gurramok wrote: »

As for the CC, you should really know to be careful on it as any mortgage application will be scrutinised for prudence. If you're worried, get a credit check from the ICB http://www.icb.ie/. 6 euro fee to put your mind at rest.

Dd not know of that facility. that is useful.

Washman3 makes a valid point.Dubai and Doha is where things are movng.However that will also not last. 3 or 4 oil rich countries running their own airlines and building the tallest buildings in a how big is your dick competition, unsustainable.

Learn chinese if you want to make some real money, but then again they say the chinese growth will hault soon too.:o

poker--addict

gurramok wrote: »

As for the CC, you should really know to be careful on it as any mortgage application will be scrutinised for prudence. If you're worried, get a credit check from the ICB http://www.icb.ie/. 6 euro fee to put your mind at rest.

Cheers gurramok, will pay the 6 euro, hopefully the card wont bounce back.

My point was though that any excuse will do, of the 20% of loans they allowed I bet they didnt offer many of them their requested amount!

In the good times the attitude to a few credit card issues would have been"ah sure dont worry about that, sure you can pay all that off with this money anyway....sign there.

seamus

A "hitting the bottom" thread would never be complete without wild speculation and calculations based on huge assumptions.

In 2007, the average disposable income (income after tax) per couple was €47,988. The average house asking price was €370,000. Assuming a 92% mortgage, the banks were lending money at a rate of roughly 7:1 between income after tax and the mortgage amount.

The average disposable income per couple in 2010 stood at 44,336. Assuming a drop of 7.5% in 2011 between taxes and wage cuts, the average gross income per couple is probably around €41k. The average house asking price is €179,080.

Anecdotally bank are providing at most 85% of the finance and lending about 3.5 times your disposable income. This means that your couple in 2011 with €41k to spend, can borrow at most about €143k to buy a house for ~€169k. This falls about 5% short of the average asking price.

However, it does require a couple to have substantial savings - I don't know anyone with €25k sitting in a bank account - and tighter lending rules mean that they would both need to be in stable jobs over a longer period of time. Which means that on average a new borrower cannot borrow enough to meet the average asking price, and the pool of available borrowers is massively reduced.

So to further speculate wildly, property needs to drop at least another 5% before it becomes "affordable" again. However with taxes going up and wages going down, it's still a race to the bottom. By the time prices have dropped another 5%, there is less income available to meet this price.
Plus, house prices will probably dip below the "bottom" before correcting. So you're looking at a minimum drop of another 10-15% before people's borrowings can meet what sellers are asking.

Add in a two-year lead time for people to scrape together sizeable deposits, and you're talking about a "bottom" sometime early next year followed by stabilisation/return to normal lending/growth around 2014/2015

/end wild speculation.

Spiritofthekop

Anyone see this last night...

House Prices: How low will yours go?
Tune in Wednesday at 10pm on TV3


Hilarious stuff....two fat cats with flashy watches and flashy cheap suits telling people to buy now and house prices will rise again soon.

While the other guy sitting on the couch who is a financial expert started shaking his head furiously nearly laughing at this idiot...saying it will in his honest opinion be another 3/4 years before any real stability happens.

How could TV3 have to CEO's from these two sham estate agencies with vested interest with personal property portfolios give out bad advice like that.

astrofool

Icepick wrote: »

Not even close. Wait till NAMA starts to offload its portfolio.

NAMA properties will either go as council housing, or be drip fed slowly onto the market to the level it doesn't effect anything.

The government can sit on lots of empty property for many years, it doesn't have to sell.

toexpress

I want to know who are the two who voted that they think house prices will rise this year? I love an optimist

Icepick

astrofool wrote: »

NAMA properties will either go as council housing, or be drip fed slowly onto the market to the level it doesn't effect anything.

So people will move from Rent Allowance properties, which will flood the market.

Villa05

astrofool wrote: »

NAMA properties will either go as council housing, or be drip fed slowly onto the market to the level it doesn't effect anything.

The government can sit on lots of empty property for many years, it doesn't have to sell.

Irish Governments would have a history of stupid decision making, this would be yet another one. As they dither, do nothing and pay fools who caused the bust inflated salaries, the non NAMA backed banks hoover up all available cash through Allsop auctions.

toexpress

Icepick wrote: »

So people will move from Rent Allowance properties, which will flood the market.

I have been proposing the whole council housing in NAMA estates for quite some time. It would flood the market if it were done to quickly but over a period of time it would be fine and it would have many benefits to it aside from cutting the social welfare bill it would also mean that this stupid policy of integration would be brought to an end

coup1917

Spiritofthekop wrote: »

Anyone see this last night...

House Prices: How low will yours go?
Tune in Wednesday at 10pm on TV3


Hilarious stuff....two fat cats with flashy watches and flashy cheap suits telling people to buy now and house prices will rise again soon.

While the other guy sitting on the couch who is a financial expert started shaking his head furiously nearly laughing at this idiot...saying it will in his honest opinion be another 3/4 years before any real stability happens.

How could TV3 have to CEO's from these two sham estate agencies with vested interest with personal property portfolios give out bad advice like that.

i watched this today and it boiled my blood...
the guy from sherry fitz was trying to hide a smirk as he spoke of the tremendous value in housing right now.....and how the market should bottom out later this year..!?!?!
the auctioneer in studio was no better in saying the scarcity of certain types of property would see prices soon bottoming out and rising soon after.....

TV3....You are an utter disgrace providing these leeches with an opportunity to scare people back into the property market like this...such bias opinion is absolute rubbish to listen to.
Sadly it appears there is a concerted effort from irish tv and print media to prop up a falling property market for their own gains. from newstalk giving airtime to irishmortgages expert karl deeter to various rte interviews with daft or myhome directors, brendan oconnor etc. Yes we would all benefit from an improving economy but this will happen as a result of jobs, investment etc which are correctly managed....not from a dead end infatuation with property.

washman3

toexpress wrote: »

I want to know who are the two who voted that they think house prices will rise this year? I love an optimist

might be the 2 guys with the flashy watches and suits on the House Prices programme last night. or might even be Michael Noonan and Enda Kenny;)

Yahew

Prices won't rise this year, however they are getting relatively cheap. I feel I should buy in the next 2 years at most. Nobody is going to buy at the very bottom, on that actual day. Within a year is ok. It remains, of course, to get the mortgage.

In another thread today someone posted interesting stats on immigration, and the natural increase in Irish numbers. Here it is

Interestingly population is not falling. The birth rate is 75K a year, which is 53% higher than 1993, the death rate is 27.4K about 5K less per year than the early 90's ( and lower again as a percentage of the population).

All this has meant that the natural increase in population has more than doubled from 20K a year in the early 90's to 47K a year now.

Absent immigration, or net emigration.

Net emigration is running at 30K a year, leaving us with a positive population growth of 13K a year. Low, but not negative.

Immigration is historically still high - at 42K. Given that this is a recession that seems to be the base level. The base level for Irish emigration ( emigration in the boom) is about 15K.

At a stabilised economy - say in 2013, or 2014 we would expect 40K immigrants still, and emigration to drop off to 17K. Add to natural increase in population we would be adding about 60K a year in population. ( At the height of the boom it was 100K a year, or more).

Within these statistics is the reason why house prices will rise when credit flows.

gurramok

Yahew wrote: »

Within these statistics is the reason why house prices will rise when credit flows.

Why do you expect babies to buy now?

Yahew

gurramok wrote: »

Why do you expect babies to buy now?

I expect them to buy eventually. It a 20-30 year market. Also if you read the piece I posted, a good percentage of the increase will be immigration.

astrofool

Villa05 wrote: »

Irish Governments would have a history of stupid decision making, this would be yet another one. As they dither, do nothing and pay fools who caused the bust inflated salaries, the non NAMA backed banks hoover up all available cash through Allsop auctions.

I think NAMA is stuck in that if it releases too much onto the market, then it pushes the entire market down, and thus, the other properties it has on it's books down as well, to the extent that the cash it gets in selling them may be less than the drop in the value of its assets.

The only way around this is to manage the way it feeds those properties to the market in a very controlled manner that doesn't affect the value of it's total housing stock.

This isn't a particularly stupid thing to do when you have a large amounts of assets, also NAMA is a long term approach, it couldn't care less if banks are hoovering up the money, as it will only increase the strength of the banking sector (something that NAMA was set up to do by taking their bad debts away).

It is annoying if you're waiting for a price crash before buying. C'est la vie.

seamus

NAMA will eventually become a state landbank. Within ten years, unfinished or empty estates which have not been released on general sale will be uninhabitable, leaving the only option to bulldoze them and hand the land over to the local council.

In the next few years, local councils who are looking for state housing will get pretty much all of their housing stock from NAMA.

spockety

Is there a break down of how much of NAMA's asset portfolio is Commercial Vs Residential? For some reason I have it in my head that the vast bulk of the problem we have in terms of absolute Euro values is on the Commercial side.

NAMA can hold on to all the ****ty apartments they like, it is not having any impact on the market. The biggest acceleration in price drops since the crash began was in 2011. If a controlled release of residential property by NAMA is some kind of attempt at market distortion, it is an utterly failed tactic.

gurramok

Yahew wrote: »

I expect them to buy eventually. It a 20-30 year market. Also if you read the piece I posted, a good percentage of the increase will be immigration.

Clutching at straws there, waiting 30 yrs for these buyers to appear if there are jobs for them.
Immigrants as per the last census(2006) largely do not buy, they rent hence your analysis that prices will rise on mass immigration is seriously flimsy and flawed.

Zamboni

seamus wrote: »

NAMA will eventually become a state landbank. Within ten years, unfinished or empty estates which have not been released on general sale will be uninhabitable, leaving the only option to bulldoze them and hand the land over to the local council.

I think this is an unspoken aim of NAMA.
A lot of this property is already uninhabitable and a superb way of maintaining a price floor or increasing a price is the simple destruction of the excess supply.

There are full estates that will get a bulldozer before they get council housing tenants.
And it will all be done under the guise of job creation for the construciton of new social housing.

Zamboni

Yahew wrote: »

I expect them to buy eventually. It a 20-30 year market. Also if you read the piece I posted, a good percentage of the increase will be immigration.

Ireland is a second world country in the making regardless of populations stats.

Yahew

gurramok wrote: »

Clutching at straws there, waiting 30 yrs for these buyers to appear if there are jobs for them.
Immigrants as per the last census(2006) largely do not buy, they rent hence your analysis that prices will rise on mass immigration is seriously flimsy and flawed.

Um, no I am not. Three things affect property

1) Wages
2) Supply vs Demand
3) Credit

1) and 3) are down for a while but will climb back up in a recovery. 2) will also tip towards demand after a time of no investment.

It doesnt really matter if immigrants buy, or rent. Every rented house was bought by someone. The trend in population growth is upwards, and therefore over the long term, prices will trend back up. And mass emigration ( which you presumably mean rather than immigration) is no more certain over 30 years, than mass immigration was certain in 2006. This is the curse of extrapolation. It was the curse of 2006 and it is the curse of now.

Yahew

Zamboni wrote: »

Ireland is a second world country in the making regardless of populations stats.

Ireland is about 10th per capita in the world right now. A 2nd world country would take a much larger drop in GDP.

However the pessimism is actually in my interests. Not sure I am going to live back in Ireland, however cheap property is definitely a deciding factor since I haven't bought yet, and the UK has a huge housing deficit, particularly in the South East. So yeah, continue to be glum.

gurramok

Yahew wrote: »

Um, no I am not. Three things affect property

1) Wages
2) Supply vs Demand
3) Credit

1) and 3) are down for a while but will climb back up in a recovery. 2) will also tip towards demand after a time of no investment.

It doesnt really matter if immigrants buy, or rent. Every rented house was bought by someone. The trend in population growth is upwards, and therefore over the long term, prices will trend back up. And mass emigration ( which you presumably mean rather than immigration) is no more certain over 30 years, than mass immigration was certain in 2006. This is the curse of extrapolation. It was the curse of 2006 and it is the curse of now.

No, I meant immigration. You need paying bodies in employment to buy a house. How on earth can you say the property market will recover in 30 years based on todays birth stats?! You or I cannot forecast what will happen then, its absurd.

Regarding using demographic stats to back up your claim we are near the bottom is flimsy. The population growth is as you say a result of births over deaths with net migration falling, that will not support a short term future rise in prices assuming credit as you put it 'flows'. Its the ridiculous argument bank paid economists used to support a growth in prices pre 2006, its the 'rising demographics' was the term they used.

The latest CSO employment stats have consistently shown a drop in employment numbers year in year out since 2007 with a shift towards part time employment. Together with all the other indicators that affect house prices, you will be waiting many many years for a rise in prices.

Yahew

gurramok wrote: »

No, I meant immigration. You need paying bodies in employment to buy a house. How on earth can you say the property market will recover in 30 years based on todays birth stats?! You or I cannot forecast what will happen then, its absurd.


The latest CSO employment stats have consistently shown a drop in employment numbers year in year out since 2007 with a shift towards part time employment. Together with all the other indicators that affect house prices, you will be waiting many many years for a rise in prices.

To answer the last part first. We are talking 30 years for a mortgage, and getting some equity from a house.

Regarding using demographic stats to back up your claim we are near the bottom is flimsy. The population growth is as you say a result of births over deaths with net migration falling, that will not support a short term future rise in prices assuming credit as you put it 'flows'. .

No, you didnt read the stats. Immigration is running at 40K a year in, and 70K a year out. The former is the base level of immigration to Ireland, the latter is a high level of emigration from Ireland.

When Ireland stabilises the former column will increase ( as if 40K come in a recession more will come when the recession ends), and the latter decrease. The natural population growth figure is +47k, so to have negative population growth we would need 47K negative net migration. However, even small postivie net immigration will be added to the 47K figure.

Its the ridiculous argument bank paid economists used to support a growth in prices pre 2006, its the 'rising demographics' was the term they used

Sure they did, and they had no evidence that immigration would continue in a bust.Now we do. It does. They assumed that the demographics was powering the boom when it was cheap credit. However that doesn't mean that demographic doesnt matter. It does.

you know there comes a time when an over priced asset becomes under-priced. Even McWilliams is expecting a bottom next year. The pessimists at the bottom match the optimists at the top - everything that is happening now will continue to happen for 30 years.