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Why Irish houses are still massively overpriced
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It was the vested interests and rotten system during the 'boom' that has led to todays problem where demand exceeds supply, ie mismanagement of the economy, insane planning procedures coupled with a totally inadequate infrastructure.
But there are those that will believe the spin that we are better off than Albania,Somalia and Syria.
I think that you have just lost all credibility in this thread by saying we are not better off than Albania,Syria and Somalia!
Seriously mate get a grip.0 -
But there are those that will believe the spin that we are better off than Albania,Somalia and Syria.
Exaggerate much? Have you been in Albania, Somalia or Syria?0 -
Cuchulainn1. wrote: »I think that you have just lost all credibility in this thread by saying we are not better off than Albania,Syria and Somalia!
Seriously mate get a grip.
Read my posts again bud.;)
Its our Government telling us how 'lucky' we are to be better off than third world countries. Its their (and their predessors) feeble attempt to convince the nation that they did not (and still continue) to wreck our economy.0 -
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Limerick? As your example? :rolleyes:
Of course what happens in one city in Ireland could never happen in another city on the same island. Note our corporation taxes under the microscope in the US and Europe.
Through lower residential rents, Limerick is able absorb the austerity hits better than most (Limerick came 3rd in the CSO disposable income survey) while the mid-west lost 3,900 jobs in the employment survey.
Limerick has a high student population. Graduates are being recruited at much lower salary levels. This is achievable as living costs are lower, making Limerick more competitive.
Nearly all the exporting companies in Limerick are currently expanding and recruiting (COOK Medical, Vistakon, Analog Devices, Stryker, Northern Trust to name but a few, plus there have been a few new entrants particularly in the Financial sector). Many of the jobs lost in Limerick over the past 12 months were in retail and the domestic economy. These are the areas affected by cronyism in Ireland, high commercial rents/rates and other domestic costs.
You may roll your eyes at Limerick, but it as close a template to whats in store for the rest of the country as you are going to find and there is plenty more pain to come for Limerick.
Our wages an costs need to fall. It is not austerity that is hammering the domestic economy, It is our costs0 -
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Sure. Limerick City unemployment rate - 29%, Dublin City unemployment rate 9%.
Through lower residential rents, Limerick is able absorb the austerity hits better than most (Limerick came 3rd in the CSO disposable income survey) while the mid-west lost 3,900 jobs in the employment survey.
House prices and rent depends, mainly, on employment prospect. All jobs in Dublin, as a result housing shortage.0 -
Well, this is the whole problem also. The disparity.
Look at any sound investment, you should be looking at the annual yield from this investment to be approximately 7%, based on OP's figures, which I think is fair enough, but many investors would look to get around a 10% yield on an investment, that is to say that in 10 years, the investment will have paid for it's self. This is how investment (such as capital investment, as in a house or apartment) should work.
That's the first problem, the value of the asset far exceeds the potential yield, so in theory, investors shouldn't touch it, but then, people are and were willing to buy with a negative yield, i.e. buy an apartment, rent it out and subsidize the shortfall with your private earnings...this is madness! But it's all based on a hypothetical scenario that for the first time in the history of measuring economics, "this time is different" and there wont be a collapse of value. But the hangover from this still exists, people still don't approach capital investments in this country with a rational perception of what should be expected, and thus are still getting ripped off.
The OP is absolutely right by the way, that there are artificial stabilizers in the market, which are looking to maintain property value, which again, is being picked up by the tax payer. Most people have no idea how much they're getting fu*ked and from how many angles. The billions upon billions poured down the banking blackhole is just the tip of the iceberg, and our generation is now a slave generation that maybe our kids might enjoy a stable economy, but for our lifetime, it's over, forget about it, for the rest of our lives we will suffer the consequences of this, and will lose out on all of the benefits such a boom should have brought, such was the mismanagement of the Irish economy during the boom years and the mess left behind. And there's nothing a subsequent Government can do, yes we can all say "break up NAMA and fix it", but the irony is, the current Government and the Governments that will follow will inherit a problem that isn't fixable.
Disband NAMA, put the houses on the market will equate to dumping, value would plummet so much that every renter could afford to buy a house for next to nothing, then every investment, such as apartments, houses, apartment blocks etc. that are just about making their mortgage payments will collapse, and all of that debt will then be picked up by the Government, as it's too late to let the banks fail. That would be Irish money being lost and not international bonds. (which interestingly Iceland did, and is a success story, but ever since we propped up and absorbed the banks debts, we signed our own death warrant).
The benefit of fixing the problem is completely overshadowed by what will happen if you do fix it. That sort of supply on the market would make every single investment mortgage in the country collapse over night and would put a further few billion bad debt on the books.
I have been fortunate enough to study economics at one of the most interesting moments imaginable in history, but the more you learn, the better you understand how economies function, the more you talk to academics and lecturers, the more you learn that we know what we should have done, we know where it all went wrong, but nobody knows how to fix this, because quite simply, we must entertain the notion that it can't be fixed.
We just need to go through an adjustment of drip feeding. Keep cutting expenditure, keep raising taxes, drip feed property back onto the market and slowly and carefully put it back together brick by brick over a long long period of time, as it is and always will be incredibly unstable for the forseeable future and because of the global scale of this crisis, but particularly in Europe, we have been engaging in austerity even though clearly anyone with an iota of economic knowledge knows that austerity is a retractionary measure and alone can never EVER grow an economy, but that is because we are still propping things up, and we still have a good bit to fall before we readjust.
We need fiscal stimulus, but there is no money left. And spending our way out of this wont work as economies like Ireland are so fundamentally crocked, that it would just be money down a blackhole, as we have seen.
I don't know how else to put it, sorry for the depressing message, but either leave, or spend your life facing unfair cutbacks, taxes, tiny pension (if a fund still exists) and returning Ireland to an impoverished nation by GDP per capita standards over the long term. We already are in real terms and impoverished nation, but we have such massive borrowings to prop up mostly extortionate public wage bill compared to the actual GDP of the country, that this Governments legacy may be not negotiating a proper pay agreement to have sustainable public services, which may completely collapse as a result in the future. We just can't afford them and they don't want to take a pay cut even remotely in line with the changes in circumstances since they were benchmarked against insanely inflated wages during one of the largest artificial booms in history.
Ireland seems to be good at creative accounting. When creating NAMA why didn`t we stress test to an 70-80% drop in house prices. We could have cut off rent subsidies, mortgage subsidies and released the flood of property onto the market. Such a flood that it would make sense for people to go bankrupt and buy again at a much reduced price. Competitiveness would have been hard for any other European country to rival if we matched a cut in social welfare and minimum wage rates (especially those set by the labour court for specific jobs).
With all the loans that would go bad from the above policies tied into NAMA the banks could continue on largely unaffected. The main problem with this would be stopping the taxpayer from picking up the tab. The only way around this would be to sell NAMA. But who would buy it..........this is where the creative accounting comes in......personally I think Cowen, Lenihan, Ahern etc should have made the sacrifice. Especially Lenihan, the man was terminally ill - it would have been perfect.
Just pick some random person in an old folks home to save Ireland. NAMA isn`t worth anything so you could buy it for a nominal fee.
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Good loser wrote: »Well johnr1 whaddya think of that?
What I think is that I don't know anything about Manhattan property prices and that the poster you quoted obviously does.
It may have been New York city in general thay the guy was on about.
As I said in my post, he may also have been talking shyte. I dont know.0 -
It was the vested interests and rotten system during the 'boom' that has led to todays problem where demand exceeds supply, ie mismanagement of the economy, insane planning procedures coupled with a totally inadequate infrastructure.
But there are those that will believe the spin,how lucky we are to be better off than Albania,Somalia and Syria.
You live in a very simple and simplistic world - obvious with guff like that. You divide the world into the bad guys (your dislikes?) and the good guys (your likes? including yourself?).
When I was very, very young a long time ago we used to play in a world like that - Cowboys and Indians.
Then I grew up.0 -
What I think is that I don't know anything about Manhattan property prices and that the poster you quoted obviously does.
It may have been New York city in general thay the guy was on about.
As I said in my post, he may also have been talking shyte. I dont know.
Thanks for the reply. I appreciate also that you thanked Scortho - that came after my post.
Strange that ten thanked your post and only 3 thanked Scortho.
Strange because it appears (from Scortho's chapter and verse) your NY realtor was, in fact, 'talking shyte'.0 -
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Good loser wrote: »You live in a very simple and simplistic world - obvious with guff like that. You divide the world into the bad guys (your dislikes?) and the good guys (your likes? including yourself?).
When I was very, very young a long time ago we used to play in a world like that - Cowboys and Indians.
Then I grew up.
And then you became a Government apologist.0 -
Cody Pomeray wrote: »
How will lower interest rates cause a bank run?
Perhaps he was arguing lower rates will act as a disincentive to save?The OP is 100% spot on. Irish houses are still massively overpriced. And,the biggest single impediment to prices is NAMA. but we must always remember that this totally farceiful,secretive,unaccountable,Ballymagash style agency was set up to do just this. They agency was designed to protect Government cnonies, ie big builders,developers and speculators and nothing else. While the ordinary seller will feel protected against huge price drops, it is for them only a sticking-plaster remedy for whats coming down the track,as the OP correctly pointed out. The 'kicking the can down the road' option can only be maintained for so long.
NAMA has also succeeded in keeping rents artifically high,again to suit mainly the cronies that attended the 'Galway Tent' and others that donated cash to the parties.
Take the McWilliams calculation of property valuation, monthly rent x 12 x 14 years. Now take an example of a 3-bed semi with a monthly rent of €600, this calculates that the house is actually worth €101,000
Of course €600/month is totally outragous, and a more affordable figure of €400/month should be the norm in the present (and future) climates when we take into account wage decreases,tax increases,property and water charges along with whatever stealth taxes the present coalition see fit to introduce in the next few years.
So €400/month x 12 months x 14 years = €67,000
How many 3-bed semis have we seen advertised for this price?
The true value in my opinion is somewhere in between €67k and €101k but we should remember that prices can and will overshoot on the way down just as they overshot during the 'boom'.
The OPs opinion on interest rates is also correct, if and when rates reach zero % there will be massive flight of capital on a scale previously unimaginable. Watch this space.;)
Reading the NAMA 2012 report on Friday, only 12% of their properties backing their loans are labelled 'residential'.
Roughly half in Dublin as well.
Its a tough one, we have to remember who is on the hook for any portion of the 32bn NAMA does not manage to raise.0 -
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Reading the NAMA 2012 report on Friday, only 12% of their properties backing their loans are labelled 'residential'.
Roughly half in Dublin as well.
Its a tough one, we have to remember who is on the hook for any portion of the 32bn NAMA does not manage to raise.
Which just goes to prove to point of who NAMA was set up to protect.
Lenihan constantly spoke of putting a 'floor' on the residential market and how NAMA would achieve this. All seems like a massive smokescreen to protect commercial entities, and we all know who is behind these.!
NAMA will boast from time to time how it has returned a 'profit' for the Government. Simply put, it cannot and will not ever make a profit as its definition of a profit is making a gain on the re-sale of 30-50% of the original value. We are led to believe that speculators/developers will be 'chased to the end of the Earth' for the shortfall..:D
Yet strangely, apologists will hail this as a major success and label anybody who dares to question it as economically ignorant.!!0 -
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Which just goes to prove to point of who NAMA was set up to protect.
Lenihan constantly spoke of putting a 'floor' on the residential market and how NAMA would achieve this. All seems like a massive smokescreen to protect commercial entities, and we all know who is behind these.!
NAMA will boast from time to time how it has returned a 'profit' for the Government. Simply put, it cannot and will not ever make a profit as its definition of a profit is making a gain on the re-sale of 30-50% of the original value. We are led to believe that speculators/developers will be 'chased to the end of the Earth' for the shortfall..:D
Yet strangely, apologists will hail this as a major success and label anybody who dares to question it as economically ignorant.!!
Frank Daly and Brendan McDonagh are already well on-message with their chipper pronouncements...
http://www.irishtimes.com/business/sectors/financial-services/nama-made-profit-of-228-million-in-2012-1.1411679
But as you say,the real key to the scale of this mistake is the statements from Brian Lenihan about placing a floor under property values.
This principle underpins ALL Irish Government fiscal policy decisions and revolves around somehow or other kick-starting the resedential property sector,by getting folks to borrow money to purchase their own properties.
Few appear to want to consider whether Ireland has the capability of supporting such Property Ownership,particularly with the levels of associated and ongoing cost now added to it.
Sadly,whilst all of this codology is going on,our Government resolutely ignores any notion of taking the Private Rental Sector by the scruff and putting order upon it.
Affordable,sustainable,well managed and monitored RENTAL is the way to go,in terms of providing Ireland with a flexible and secure workforce and population.
Generations of Irish Politicians moved mountains to ensure that Rental always remained outside the pale of social acceptibility leaving us with the steaming pile of debt which NAMA now seeks to deodourize.Men, it has been well said, think in herds; it will be seen that they go mad in herds, while they only recover their senses slowly, and one by one.
Charles Mackay (1812-1889)
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Limerick has a huge oversupply of something no other city has: high quality housing. It's home to almost 20,000 students (though there's an artificial floor on rent immediately adjacent to UL because of convenience), half of whom need somewhere to rent. Limerick is a tenants market, the other cities are a landlord's market.Again, go to the first house advertised on Daft.ie today in Limerick city for example. a 3 bed semi,lovely house,fully furnished,walking distance to Cresent Shopping centre,Limerick regional hospital,pubs and bus stop. Rent is €650 a month.
FYI the basics of supply and demand are determined by the vested interests, usually in cohoots with the Government of the day.!!
Limerick is looking like it could put the IFSC out of business if something isn't done about the cost of doing business in Dublin. Unemployment is on a downer in Limerick, and that figure is skewed by 2 of the countries top unemployment blackspots. There are 2 things holding Limerick's job creation back, one of which is also holding Cork and Galway back.KindOfIrish wrote: »Sure. Limerick City unemployment rate - 29%, Dublin City unemployment rate 9%.
House prices and rent depends, mainly, on employment prospect. All jobs in Dublin, as a result housing shortage.- Lack of suitable city centre office space for large multinationals
- Incomplete and quite frankly appalling roads connecting it to Cork and Galway due to the Dublin centric road network planning.
Negative equity isn't a disaster. If someone is willing to pay €200k for a house, and can make repayments on €180k mortgage, then it doesn't matter if the open market value falls to 0, as the owner's value is €200k.realitykeeper wrote: »My fear is that those who are buying property today will find themselves deep in negative equity very soon. All that said, I may be wrong. As a potential house buyer of the future, I welcome the opinion of anyone with a view on the future direction of house prices.0 -
Yeah you might be able to find a family home in the ghetto part of Harlem for under 3 million usd. But it won't be very safe. A basic studio apartment in manhattan which is basically one room with a bathroom is about $500,000. A family can't afford a home in NYC. Plus most coop building won't let anyone have a mortgage. You have to pay in cash. €10 million will buy an unbelieveable house on 2 acres in black rock from the Guinness family. You'll struggle to find a 4 bed apartment in manhattan for that.
An apartment near wall street which is one of the cheapest parts of manhattan since its far from the main part of the city is $1000 a square foot. You can buy a brand new apartment in the ifsc for about $350 a square foot at most
Manhattan and Dublin just aren't really comparable in that sense. Manhattan is an tiny island with a decent chunk taken up by Central Park. It is a mere 23 square miles and has 70,000 residents packed into each square mile. But more to the point Manhattan is the financial engine room of a domestic economy for 280 million people and an international economy of many millions beyond that.
The salaries of Manhattan are way way out of kilter with anywhere else in the USA. It is not uncommon for a barman on Manhattan to make $100k a year or for a cleaner to make $80,000 annually. Indeed the average weekly salary on Manhattan in Q1 2012 was $2,464 giving an annual average salary of somewhere in the region of $120k. You've also got to think that for every multi-millionaire and billionaire in the US and worldwide having a property on Manhattan is de rigeur. Also think about all the 'old money' living on Manhattan- people who are generations removed from their original family fortunes but who live off royalties & patents- there are literally thousands of heirs to some fortune or other living on that island. They never work a day in their lives and spend all their time on the charity circuit, which on Manhattan is a billion dollar industry in itself. Then you've got the stockbrokers, bankers and traders. $1m annual salaries aren't uncommon, topped up again by bonuses. And where there is that kind of money there is also tons of lawyers, more per square mile than anywhere else in the world and many of them also make $1m+ salaries. All of the above means that means there is an extraordinary large and disproportionate amount of wealthy people who drive up their price of property on Manhattan island.
But where you can compare Dublin and Manhattan is for what you get a 30 minute commute outside of the city centres. In Goatstown, Dublin 3 bed houses are asking €400k (approx $500k). For $500k you could get a large house in Queens and be only a subway ride away from Manhattan, where you work your $120k job, as does your partner. Whereas in Goatstown you commute 30 minutes to Dublin but €100k jobs aren't all that common, at least nowhere near as common or regular as they are on Manhattan.0 -
A rent of 400 euro in the Dublin city centre is possible. I've friends who rented for 285 a month in rathmones this year.
When you mention rent of 400 are you talking about a 1 bedroom apt. Or a 5 bedroom house? What location is it. There is a massive difference between irishtown and sandymount when it comes to property prices and rents, even though they're right beside each other.
While you are right that the lack of repossessions is putting a floor on property prices, I don't agree with your statement on Nama.
From my observations Most of the apartments in Nama in dublin city centre are rented.
Even with them rented, demand is so high at the moment for rental properties that even with all the Nama apt. Let (there isn't that many unoccupied in the city centre) rents wont fall substantially.
Likewise repossessions will have little to no effect on rent prices.
If someone is spending 3/4s of their salary on rent, they really should consider moving to a cheaper area.
Where though?
A single-income family has extremely limited options. Even a 3 bed terrace in Ballyfermot will cost you nearly a grand a month in post-tax income and if you move to the commuter belt, there's commuting costs to consider.0 -
Manhattan and Dublin just aren't really comparable in that sense. Manhattan is an tiny island with a decent chunk taken up by Central Park. It is a mere 23 square miles and has 70,000 residents packed into each square mile. But more to the point Manhattan is the financial engine room of a domestic economy for 280 million people and an international economy of many millions beyond that.
The salaries of Manhattan are way way out of kilter with anywhere else in the USA. It is not uncommon for a barman on Manhattan to make $100k a year or for a cleaner to make $80,000 annually. Indeed the average weekly salary on Manhattan in Q1 2012 was $2,464 giving an annual average salary of somewhere in the region of $120k. You've also got to think that for every multi-millionaire and billionaire in the US and worldwide having a property on Manhattan is de rigeur. Also think about all the 'old money' living on Manhattan- people who are generations removed from their original family fortunes but who live off royalties & patents- there are literally thousands of heirs to some fortune or other living on that island. They never work a day in their lives and spend all their time on the charity circuit, which on Manhattan is a billion dollar industry in itself. Then you've got the stockbrokers, bankers and traders. $1m annual salaries aren't uncommon, topped up again by bonuses. And where there is that kind of money there is also tons of lawyers, more per square mile than anywhere else in the world and many of them also make $1m+ salaries. All of the above means that means there is an extraordinary large and disproportionate amount of wealthy people who drive up their price of property on Manhattan island.
But where you can compare Dublin and Manhattan is for what you get a 30 minute commute outside of the city centres. In Goatstown, Dublin 3 bed houses are asking €400k (approx $500k). For $500k you could get a large house in Queens and be only a subway ride away from Manhattan, where you work your $120k job, as does your partner. Whereas in Goatstown you commute 30 minutes to Dublin but €100k jobs aren't all that common, at least nowhere near as common or regular as they are on Manhattan.
You should always cite your sources. ;-)0 -
Bar Dublin most houses are selling for less than the cost of construction. Some one gave an example of Dingle at ptresent if you check on daft.ie there are over 1000 properties(yes i know that some are sites etc) for sale at less than 125K in Kerry. A good portion are good suitable family homes. Taking a mortgage of 80% of this would be 100K and an average intrest rate of 4.5% thiis equates to montly payments of 600 euro.
For an average working couple this would equate to less than one week pay for the two of them. At present housed selling below 100K (60-80K) are in small towns in kery are being snapped up by investors as the yield is near or above 10%. Yes some NAMA properties are over priced and peopler will ignore them until either they reduce the price or the market reaches this point.
Limerick is an intresting study on one hand a high unemployment rate in certain area's of the city but in the envoirn's and outside limerick city there are good employment prospects. With the By pass it is very easy to commute 20+ mile into work and with the tunnell workers can criss cross through the tunnell to commute from/or work in Ennis, Shannon. You have a workforce in Co Clare, Co Limerick, North Cork, Half of Tipperary and part of Kerry that find copmmuting easy. Yes propery and rental prices are not crazy. Houses in the sorroundind towns are easily affordable and even rural housing is available at arounf 200K within 10 miles of the city.
I think there is a perception by some people that you should not have to make an effort to own you own house. That it should be as cheap as renting and that everything should be handed on a plate. Be careful you could get left behind.0 -
Limerick is looking like it could put the IFSC out of business if something isn't done about the cost of doing business in Dublin.
I can't see many banks opting to leave the IFSC with its proximity to all the other banks, the airport and probably most importantly, the government and civil service for Limerick. As long as they can find staff, they'll stay in Dublin and as long as the jobs are in Dublin, that's where most of the people will stay.0 -
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Farmer Pudsey wrote: »Bar Dublin most houses are selling for less than the cost of construction. Some one gave an example of Dingle at ptresent if you check on daft.ie there are over 1000 properties(yes i know that some are sites etc) for sale at less than 125K in Kerry. A good portion are good suitable family homes. Taking a mortgage of 80% of this would be 100K and an average intrest rate of 4.5% thiis equates to montly payments of 600 euro.
For an average working couple this would equate to less than one week pay for the two of them. At present housed selling below 100K (60-80K) are in small towns in kery are being snapped up by investors as the yield is near or above 10%. Yes some NAMA properties are over priced and peopler will ignore them until either they reduce the price or the market reaches this point.
Limerick is an intresting study on one hand a high unemployment rate in certain area's of the city but in the envoirn's and outside limerick city there are good employment prospects. With the By pass it is very easy to commute 20+ mile into work and with the tunnell workers can criss cross through the tunnell to commute from/or work in Ennis, Shannon. You have a workforce in Co Clare, Co Limerick, North Cork, Half of Tipperary and part of Kerry that find copmmuting easy. Yes propery and rental prices are not crazy. Houses in the sorroundind towns are easily affordable and even rural housing is available at arounf 200K within 10 miles of the city.
I think there is a perception by some people that you should not have to make an effort to own you own house. That it should be as cheap as renting and that everything should be handed on a plate. Be careful you could get left behind.
Actually in a mature & stable market, renting is actually more expensive than buying the equivalent home. Landlords wouldn't be able to make a profit otherwise.0 -
Actually in a mature & stable market, renting is actually more expensive than buying the equivalent home. Landlords wouldn't be able to make a profit otherwise.
That may be so,however I would suggest that this comparison is based solely upon the purchase cost vs the rental outgoing.
I would also suggest that when we start to factor in the new (to Ireland) ongoing taxes and charges, along with maintenance and upkeep,that the comparison becomes less clear-cut.
I'm not sure if Farmer Pudsey has his tongue in his cheek somewhat when he sez....I think there is a perception by some people that you should not have to make an effort to own you own house. That it should be as cheap as renting and that everything should be handed on a plate. Be careful you could get left behind.
I feel that the principle of universal home Ownership is not for everybody,particularly in a country whose economic structure may not be able to support it.
However,ensuring that a readily available supply of Rental Properties is achieved and maintained should be a Government priority.
Currently anybody attempting to rent their residence in Ireland has very little support when it comes to being part of a well regulated and monitored sector....
For far too long Private Rental Accomodation in Ireland has been seen as a bit of a sideline for Gardai,Teachers,and assorted other "professional" groupings......:oMen, it has been well said, think in herds; it will be seen that they go mad in herds, while they only recover their senses slowly, and one by one.
Charles Mackay (1812-1889)
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Farmer Pudsey wrote: »Bar Dublin most houses are selling for less than the cost of construction. Some one gave an example of Dingle at ptresent if you check on daft.ie there are over 1000 properties(yes i know that some are sites etc) for sale at less than 125K in Kerry. A good portion are good suitable family homes. Taking a mortgage of 80% of this would be 100K and an average intrest rate of 4.5% thiis equates to montly payments of 600 euro.
For an average working couple this would equate to less than one week pay for the two of them. At present housed selling below 100K (60-80K) are in small towns in kery are being snapped up by investors as the yield is near or above 10%. Yes some NAMA properties are over priced and peopler will ignore them until either they reduce the price or the market reaches this point.
Limerick is an intresting study on one hand a high unemployment rate in certain area's of the city but in the envoirn's and outside limerick city there are good employment prospects. With the By pass it is very easy to commute 20+ mile into work and with the tunnell workers can criss cross through the tunnell to commute from/or work in Ennis, Shannon. You have a workforce in Co Clare, Co Limerick, North Cork, Half of Tipperary and part of Kerry that find copmmuting easy. Yes propery and rental prices are not crazy. Houses in the sorroundind towns are easily affordable and even rural housing is available at arounf 200K within 10 miles of the city.
I think there is a perception by some people that you should not have to make an effort to own you own house. That it should be as cheap as renting and that everything should be handed on a plate. Be careful you could get left behind.
I live in Kerry and am keeping an eye for properties with the potential to return anywhere above 8%. Believe me, these houses that are selling for 100k are not going to give that return. Killarney is the most expensive place in Kerry to rent or purchase. You would be paying e575 per month in Killarney for a 2 bed apt. A 2 bed in Tralee can be had for 3-350 per month. A 3 bed that is 5 miles from Killarney would probably make e350-400 per month. if you go 10 miles out of town, or to somewhere in Dingle or waterville/Cahirciveen/Kenmare/Killorglin you would be lucky to get someone to rent your property for e300 per month, if at all. I am looking to move to a quiet area away from town, but I will not be doing it until I am comfortable enough financially to be able to only have to work 1 or 2 days per week. The price of petrol is going up, commuting costs and travel time need to be factored in to these purchases. There is little to no employment in some of these beautiful scenic areas, hence the low cost of houses and the reason they are really only suitable for retired people or as holiday homes.0 -
It's all about employment at the end of the day. Is there a big enough grouping of employers to justify moving and settling in a certain area. I mean one partner might be able to get a decent job but the other one no. Maybe you can get a decent job with the one big local employer but if that falls South what are you going to do then?
In the future (whenever that is), improved telepresence and better broadband (whenever that is) MAY make living in certain areas a much more viable option.
On the other side of that trend are increased fuel and commuting costs. I also wouldn't expect any new train lines, improved train lines or motorways for a long long time.0 -
I think some posters think that houses will fall in price forever and that we will reach prices that are as low or lower than the European average. I suspect we will not (maybe I am wrong). I think we are at or near the price floor. If prices drop below precieved value they will correct very fast and you may again get a boom type hype.
People who think that massive dumping of house's onto the market will benift ordinary Joe or Joan Soap( or Sixpack as Morgan Mcdowell once refered to them as) do not relise that there will not be credit available to benifit these people. Rather it will benifit the large cash investor who will hoover up the house's and rent with either the intention of a longterm capital gain or a profitabal rental buisness based on a cheap purchasse price.
The housing supply market has gone through huge rationalisation. there are only 1/3 the builder suppliers that were there during the boom less in number than preboom. Some of these are high cost DIY such as B&Q. The same with concrete suppliers. Yes there will be cheaper trades people but building product will get more expensive over the next few years. There will be fewer developers around as well as those that are broke go through the bankrupty process so there will be little new product coming on market for the next 2-5 years.
The ordinary carpenter/blocklayer/plasterer will not build you a house it takes a different skill set. We could well ender a situtation like in the farming sector where we get large volitility in prices0 -
Except in weird situations - maybe the present situation in Ireland - housing prices can never be set by the "cash buyer". There aren't enough of them.
What's happening is what the OP suggests , NAMA is sitting on a housing bank and non payers of mortgages are not being evicted. Even if we forced the people with 2 properties to pay, or we wrote off their debt but seized the (2nd) property and sold them prices would plummet, especially apartments.0 -
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I find the commentary in the media about the housing market really strange too in the way that it talks about "Dublin" and "The Rest of the Country" prices as if say the most expensive parts of Cork or Galway were on exactly the same market cycle as a ghost estate in Leitrim.
The comparisons between Dublin and huge cities is also ridiculous. It's a small/medium size capital city with relatively good but not spectacular salaries and completely dysfunctional banks that can't really lend to stimulate the market.
I would like to see comparisons between Dublin and say Bordeaux or Hannover or maybe Munich at a push.
It's not comparable to these megapoles that it's being pitted against all the time.
Metropolitan populations:
Paris : 12.1 million
London : 11.9 million
Brussels has over 5 million people within the Brussels/Antwerp/Ghent triangle so its small population is actually totally misleading.
Madrid : 6.3 million
etc etc etc.
We tend to take the largest population estimate for the Greater Dublin area, which in some cases seems to become absolutely ludicrous and takes in scattered populations across the whole 'Pale' which isn't really the GDA and then compare them with the really narrowest definition of a city like Paris which excludes all of its agglomeration.
House price wise, we should be looking at comparisons with similarly sized regional capitals in comparably wealthy countries with similar living standards to Ireland, not these huge metropolises.
....
Also, there'll always be a few expensive areas in Dublin, Cork, Galway, Limerick etc but they're not necessarily representative of the whole trend in the housing market.
I think we're becoming over-excited about little blips in the market to be honest and the media's doing its usual irresponsible let's all try and get hyped back to 2007 thing!
We don't seem to get that overpriced property actually hinders the economy as all the money is being drained away to landowners, landlords, banks and others instead of being spent on something useful.
If we had a lot more disposable income i.e. not slashing it on huge mortgages and ridiculously high commercial rents, we'd have a far more vibrant economy as that money would be spent on goods, services and maybe invested into companies and R&D instead of bricks and mortar!
(/rant)0 -
Duggys Housemate wrote: »Except in weird situations - maybe the present situation in Ireland - housing prices can never be set by the "cash buyer". There aren't enough of them.
What's happening is what the OP suggests , NAMA is sitting on a housing bank and non payers of mortgages are not being evicted. Even if we forced the people with 2 properties to pay, or we wrote off their debt but seized the (2nd) property and sold them prices would plummet, especially apartments.
If houses prices collapse and morgatge money is not accessible (due to banks dumping housed on market) then the only people that can really but is cash investors. When i say cash investors it is those people that have access to sums over 50K these will tend to be people over 50 years old with a bit of money put away they may be able to access smalls loans easy fròm credit unions etc in the short term and may have relationships with bank loan officials and have a record of being able to pay back money. Small buisness owners etc who have cash flow and access to money if the house market collapses could readily invest for pension purposes.
Joe/Joan Soap will not be the winner
Go to an Alsop auction and look at the buyers.0 -
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Farmer Pudsey wrote: »If houses prices collapse and morgatge money is not accessible (due to banks dumping housed on market) then the only people that can really but is cash investors. When i say cash investors it is those people that have access to sums over 50K these will tend to be people over 50 years old with a bit of money put away they may be able to access smalls loans easy fròm credit unions etc in the short term and may have relationships with bank loan officials and have a record of being able to pay back money. Small buisness owners etc who have cash flow and access to money if the house market collapses could readily invest for pension purposes.
Joe/Joan Soap will not be the winner
Go to an Alsop auction and look at the buyers.
You're not making much sense. Someone with 50k is not a cash investor - he's a guy with a deposit.0
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