Property Prices Good or Bad?

Mr.McLovin

Are rising property prices a good or bad thing for the economy considering our economic situation?

are current rises a good thing for the economy overall? the government and media seem to think so but what do you think?

comongethappy

Increasing asset values is perfectly normal & I don't think they are a bad thing.
Its also inevitable when so few housing units are being built.

I don't get the "here we go again" silliness over 1-2% rises in asking prices.
When prices drop 50% & then rise a couple of percent, that isn't a bubble.

robp

comongethappy wrote: »

Increasing asset values is perfectly normal & I don't think they are a bad thing.
Its also inevitable when so few housing units are being built.

I don't get the "here we go again" silliness over 1-2% rises in asking prices.
When prices drop 50% & then rise a couple of percent, that isn't a bubble.

Well apparently in Dublin prices are rising as fast as the were dropping at the worse stages of the crash. Though it may not quite be a bubble as such, as it is not at all credit fuelled.

mr_seer

robp wrote: »

Well apparently in Dublin prices are rising as fast as the were dropping at the worse stages of the crash. Though it may not quite be a bubble as such, as it is not at all credit fuelled.

There may not be cheap credit as such. It is a common misconception peddled by the media that "you cannot have a bubble without credit". There is ample liquidity in the system from US hedge funds, bloated by cheap Fed QE money. Not to mention the 'silent credit' already in existence in the form of forbearance, people retaining trackers etc. In addition supply has been absolutely strangled by intervention from the government and its agencies - CGT exemptions for investors, Nama not releasing properties on the open market and the Central Bank (code of conduct on mortgage arrears etc).

In my view any rapid increase in the price of an asset that makes it out of correlation to net disposable income, can only be a bubble

Farmer Pudsey

The rate of rise in prices in Dublin is a serious issue. It is a supply/demand issue and the inability to get houses build where buyers want them at affordable prices. The rest of the country is not an issue yet. Cork and galway are rising slowing Limerick is kinda stablising while there is still value elsewhere as most houses are below cost of building.

bitemeluis

comongethappy wrote: »

Increasing asset values is perfectly normal & I don't think they are a bad thing.
Its also inevitable when so few housing units are being built.

I don't get the "here we go again" silliness over 1-2% rises in asking prices.
When prices drop 50% & then rise a couple of percent, that isn't a bubble.

1-2% ? some have gone up 30-50% in approx 6months

comongethappy

bitemeluis wrote: »

1-2% ? some have gone up 30-50% in approx 6months

Have they?

I've been looking at the property price registry & for my area in Wicklow & its nothing like that.

We must separate the hype around asking prices from the reality of sale prices.

50% year on year rise?
That never happened in the boom, I'm doubtful its happening now.

zl1whqvjs75cdy

Think it's 20 % year on year.

nilsonmickey

bitemeluis wrote: »

1-2% ? some have gone up 30-50% in approx 6months

30-50%???? Erm no they have not.

Farmer Pudsey

In Dublin year on year it is 17% I think. However this may be more pronounced in certain parts.
http://www.herald.ie/news/house-prices-rising-as-fast-as-boomtime-30393304.html

Jim2007

Mr.McLovin wrote: »

Are rising property prices a good or bad thing for the economy considering our economic situation?

From my point of view it is very bad, it means that Irish people have learned nothing from the recent past, they are still on the "get on the property ladder" nonsense!

comongethappy

Jim2007 wrote: »

From my point of view it is very bad, it means that Irish people have learned nothing from the recent past, they are still on the "get on the property ladder" nonsense!

Would you prefer they rent?

I don't see what is intrinsically wrong with people purchasing a home for themselves.

When I purchased a house I wasn't "getting on the ladder", I was purchasing a home for me & my family.

It isn't about 'learning lessons' its about doing what you think is right for you.

Rightwing

Rising house prices are bad for an economy, it's ultimately what leads to crashes.

The problem is, in the short term rising house prices are great for the economy. Politicians focus on short term with no regard for long term consequences.

antoobrien

Jim2007 wrote: »

From my point of view it is very bad, it means that Irish people have learned nothing from the recent past, they are still on the "get on the property ladder" nonsense!

The figures show that to be utter tosh as the both amount of money that is currently on loan for the purpose of buying residential property as well as the numbers of transactions (loans) are down. (Loans to Irish households-Irish Central Bank).

The rising prices are the bounce that was expected when the market bottomed out, we are seeing the effect of cash buyers (international investors or locals who sat on cash after selling during the boom).

hmmm

It's great news if you own property, it's awful news for the economy and people who don't own property. I thought we might have learned some lesson from the past few years, but clearly not - we'll be bailing out the property industry in a few years again.

gaius c

robp wrote: »

Well apparently in Dublin prices are rising as fast as the were dropping at the worse stages of the crash. Though it may not quite be a bubble as such, as it is not at all credit fuelled.

A significant portion of the market has -% credit as they don't make repayments (capital or interest) but continue to hold onto the asset while holding potential buyers to ransom. Credit (and the uneven application of it) has warped the current market just as much as the market of 2006.

comongethappy

hmmm wrote: »

It's great news if you own property, it's awful news for the economy and people who don't own property. I thought we might have learned some lesson from the past few years, but clearly not - we'll be bailing out the property industry in a few years again.

So when a couple marry & have a kid and buy a house, what lesson are they failing to learn?

hmmm

comongethappy wrote: »

So when a couple marry & have a kid and buy a house, what lesson are they failing to learn?

You mean when a couple marry & have a kid, and stretch themselves to buy a house on 5 times their combined income along with a contribution from their parents for a deposit, what lesson are we as a society failing to learn?

Or what lesson are we failing to learn when we have an obvious supply issue, and the government are rushing to implement measures which will only increase demand and thereby force up the price of property?

Or what lesson are we failing to learn when we have a media overwhelmingly portraying property prices rises as a "recovery" and good news?

Or what lesson are we failing to learn when young couples are being priced out of houses close to the city, and are forced to buy a house in a commuter town because our planners are too scared of a handful of NIMBYs to build high density housing in our cities?

Or what lesson are we failing to learn by encouraging the Irish mentality of everyone needing to own semi-D with a stupidly small garden instead of trying to move us towards a European culture of family sized apartments and a strong rental culture?

comongethappy

hmmm wrote: »

You mean when a couple marry & have a kid, and stretch themselves to buy a house on 5 times their combined income along with a contribution from their parents for a deposit, what lesson are we as a society failing to learn?

Or what lesson are we failing to learn when we have an obvious supply issue, and the government are rushing to implement measures which will only increase demand and thereby force up the price of property?

Or what lesson are we failing to learn when we have a media overwhelmingly portraying property prices rises as a "recovery" and good news?

Or what lesson are we failing to learn when young couples are being priced out of houses close to the city, and are forced to buy a house in a commuter town because our planners are too scared of a handful of NIMBYs to build high density housing in our cities?

Or what lesson are we failing to learn by encouraging the Irish mentality of everyone needing to own semi-D with a stupidly small garden instead of trying to move us towards a European culture of family sized apartments and a strong rental culture?

Yes.... Those lessons.... Tell us please.

I saved, worked hard, borrowed within our means & can repay month on month without much issue

I'm glad to have purchased our home that I'll be bringing my son into in a few weeks time.

Please inform my what lesson I failed to learn?

hmmm

comongethappy wrote: »

I saved, worked hard, borrowed within our means & can repay month on month without much issue

I'm glad to have purchased our home that I'll be bringing my son into in a few weeks time.

This thread is about property prices, no-one is making a judgement on you. Relax tf.

comongethappy

hmmm wrote: »

This thread is about property prices, no-one is making a judgement on you. Relax tf.

hmmm wrote: »

I thought we might have learned some lesson from the past few years, but clearly not

If you make generalisations don't be shocked when somebody disputes your sweeping statement.

Silentcorner

Family home ownership is a completely normal aspiration, especially in our smaller cities and towns where is should be completely affordable.

The problem arises when the media pump the market with what the politicians and banks and auctioneers believe to be positive sentiment. This is when problems arise, property prices are not a sign of financial health, or demand per say, they are a result of sentiment. In today's housing market it is the families of Dublin/Galway/Cork that will have to dig deeper to pay for that home because they are also competing with cash investors buying into that sentiment.

A normal property market is a healthy thing, but I believe this market is as unhealthy as it was in 2006, I sometimes believe that as a nation we will never have a healthy property market.

It helps me to understand these issues to factor mania into the equation when it comes to the collective Irish psyche...if you can do that it explains a lot...

BFDCH.

the best thing the government could do is put a higher tax on third properties, an even higher tax on the 4th properties and keep it going up in increments for each additional property. i would do that for couples and start it at higher tax for single people.
this would be if they wanted to sort out house prices and allow people to buy their own houses at fair and sustainable prices

Farmer Pudsey

BFDCH. wrote: »

the best thing the government could do is put a higher tax on third properties, an even higher tax on the 4th properties and keep it going up in increments for each additional property. i would do that for couples and start it at higher tax for single people.
this would be if they wanted to sort out house prices and allow people to buy their own houses at fair and sustainable prices

All people are considered as inviduals as for tax purposes. In reality that would mean that a couple could have six and 3 more in there six children's name. Now if I set up a REIT how would this effect me

Dob74

Mr.McLovin wrote: »

Are rising property prices a good or bad thing for the economy considering our economic situation?

are current rises a good thing for the economy overall? the government and media seem to think so but what do you think?

Prices going up is a bad for the economy overall.
If you work it means your wage has decreased if you you are renting our buying.
If you are trading up it is also a bad thing. If your house increases it means the house you are buying will be increasing more.

Worst of all is the increase in commercial property. Businesses will have to increase prices or cut wages. It's another tax by any other name. http://www.rte.ie/news/2014/0701/627725-bewleys-rent-court/
This will cost the consumer, and effect the economy badly.



If you own a few properties or are a tax break backed pension fund that is invested in property happy days. Young productive workers will be making you money as you sit on your as$.

Noonan controls the banks, bank regulator and Nama the largest holder of property in the country. He recently said he wants property prices higher.
The country has been gaining competitiveness in recent times. Through that out the window with high property prices.

RichardAnd

I suppose it depends on one's point of view. If I were sitting on a pile of debt that I took so that I could buy a house, I would be delighted to see the value of the said house rise. I could get rid of the debt, or I could allow myself to think that I had made a wise long-term investment, which I'm sure many will do. :rolleyes:

On the other hand, if I had a growing family and I wanted to buy a house, then the rising prices would most certainly not be a good thing.

The problem with high prices is that they mean high amounts of personal debt. It also contributes to the homeless problem as rents will rise too. All in all, it just means that the cost of living will go up.

Of course, there is the very simple fact that what goes up WILL COME DOWN. If legions of people are given access to credit once again then the property crash will repeat itself.

chopper6

Reading the Irish Times property supplement last week.

A house on Walsh Road in Drumcondra had sold for 120k in january last year. A house on the same road had sold for iirc 220k in january this year and the house they were marketing had an asking price of 375k...more than double in one year!

http://www.myhome.ie/residential/brochure/46-walsh-road-drumcondra-dublin-9/2839131

coolshannagh28

A lot of the debt from the boom is still in the system in the form of arrears a rise in property prices will go some way to alleviating that problem ,bear in mind that in large parts of the country and including Dublin houses are still below replacement value so the market must go up to find some form of equilibrium . It is also worth noting that even the 20 % rise in Dublin is from a low base and it will be a long time before we are at boom levels in light of this .

mr_seer

coolshannagh28 wrote: »

A lot of the debt from the boom is still in the system in the form of arrears a rise in property prices will go some way to alleviating that problem ,bear in mind that in large parts of the country and including Dublin houses are still below replacement value so the market must go up to find some form of equilibrium . It is also worth noting that even the 20 % rise in Dublin is from a low base and it will be a long time before we are at boom levels in light of this .

Both of your points are incorrect. In terms of build costs, I could have a 1,500 sq ft detached house built for in or around EUR 150k. A house of this type would sell for more than EUR 150k in Ballymun.

By what metric are Dublin houses at "a low base". In the context of income, they are actually very high. This is the reason that very few people (less than last year actually) are buying with mortgage finance. There is no point comparing house prices to what they were in 2007 because I don't think there is anybody who would suggest that 2007 prices were anywhere near sensible. Many areas of Dublin are 75-85% of 2007 prices already

zl1whqvjs75cdy

Interesting seeing you say that Mr seer. I am constantly hearing on the radio that there is no profit to be made in building new houses. You seem to think there is. Now I have never built so much as a birdhouse so I wouldn't have a clue, but do any builder types reckon there's money in the property game again? I presume the banks run a mile in the other direction if you even suggest it though.

gaius c

donkeyoaty0099 wrote: »

Interesting seeing you say that Mr seer. I am constantly hearing on the radio that there is no profit to be made in building new houses. You seem to think there is. Now I have never built so much as a birdhouse so I wouldn't have a clue, but do any builder types reckon there's money in the property game again? I presume the banks run a mile in the other direction if you even suggest it though.

Builders are like farmers & taxi drivers in that they'll play poor mouth and claim it's not possible to make money but the simple trap to lay for them is to ask how much it cost to build their own (usually much higher spec) house. Most of them like to brag about this. That'll give you an idea of just how much of a mark up, they are putting on ordinary houses.

RichardAnd

The following story represents bad news. If you're the landlord of the property mentioned therein however, this is very, very good news.

http://www.independent.ie/irish-news/news/rental-crisis-onebedroom-apartment-for-1350-snapped-up-in-five-hours-30404790.html

mr_seer

donkeyoaty0099 wrote: »

Interesting seeing you say that Mr seer. I am constantly hearing on the radio that there is no profit to be made in building new houses. You seem to think there is. Now I have never built so much as a birdhouse so I wouldn't have a clue, but do any builder types reckon there's money in the property game again? I presume the banks run a mile in the other direction if you even suggest it though.

It is true that there is no profit to be made building in Leitrim however there is definitely money to be made in Dublin. They key issue is the amount that the government is creaming in tax revenues per unit from local authority levies, VAT etc. Plus there is the Part V S&A requirement. The government could address the problem in the morning but that is not in their 'we need prices to go up a bit more' agenda.

We've been here before and we know how this ends. I can't believe that we are pursuing the same economic policies that bankrupt the country to begin with. I own property is negative equity so it actually benefits me personally but nobody wins when they fcuk the economy up all over again

Good loser

mr_seer wrote: »

Both of your points are incorrect. In terms of build costs, I could have a 1,500 sq ft detached house built for in or around EUR 150k. A house of this type would sell for more than EUR 150k in Ballymun.

By what metric are Dublin houses at "a low base". In the context of income, they are actually very high. This is the reason that very few people (less than last year actually) are buying with mortgage finance. There is no point comparing house prices to what they were in 2007 because I don't think there is anybody who would suggest that 2007 prices were anywhere near sensible. Many areas of Dublin are 75-85% of 2007 prices already

I don't believe houses can be built in Dublin at €100 per sq ft (net or gross). Regardless of construction cost a builder has to add 'profit' of 20% minimum.
Then the site cost would have to be factored in.
IMO prices may now just be reaching a level where a margin can be made on building. With a low site value.

Farmer Pudsey

At present this is mainly a Dublin only issue. The main problem is supply. There has been little or no houses build in the last seven years and by the look of it little enough in the next two.

It is hard to compare us to other city's etc. Dublin is a sprawling city this has little to do with high rise and a lot to do with hoarding of sites. In the late ninties a build/use it or get taxed policy was in place which FF repealed. We may need something like that again. 33% capital gains discourages selling not that I am calling for that to be change rather pointing out the obivous.

A sharply rising or falling market is not good for the economy. Both are equally bad. I saw a figue that it costs 60K in development and planning costs on every house build in Dublin. I Imagine that with higher labour other costs associated with Dublin (transport of materials, security of site financing of same) a 3 bed would cost another 150K to build. so we are at 210K. Add in site cost and it gets scary. Even if I am overestimating by 20% we atre looking at 250+ before a builder adds a margin.

jonah_whale

Farmer Pudsey wrote: »

The rate of rise in prices in Dublin is a serious issue. It is a supply/demand issue and the inability to get houses build where buyers want them at affordable prices. The rest of the country is not an issue yet. Cork and galway are rising slowing Limerick is kinda stablising while there is still value elsewhere as most houses are below cost of building.

galway is 40% more expensive than limerick which is pretty amazing when you consider how similar in size both cities are , galway hit the bottom well over a year ago , limerick may have hit the bottom a month ago or two

jonah_whale

Silentcorner wrote: »

Family home ownership is a completely normal aspiration, especially in our smaller cities and towns where is should be completely affordable.

The problem arises when the media pump the market with what the politicians and banks and auctioneers believe to be positive sentiment. This is when problems arise, property prices are not a sign of financial health, or demand per say, they are a result of sentiment. In today's housing market it is the families of Dublin/Galway/Cork that will have to dig deeper to pay for that home because they are also competing with cash investors buying into that sentiment.

A normal property mark5et is a healthy thing, but I believe this market is as unhealthy as it was in 2006, I sometimes believe that as a nation we will never have a healthy property market.

It helps me to understand these issues to factor mania into the equation when it comes to the collective Irish psyche...if you can do that it explains a lot...

its not comparable to 2006


in 2006 , any kind of cottage in the west of ireland was worth over 100 k , banks were willing to lend people 90% of the price of a house

dublin overshot the bottom a few years ago as the country went into collective shock after the crash - banking collapse , their was no logical reason why dublin should have went that low , it was a generational opportunity for ( clever ) folk to pick up bargains

Dob74

donkeyoaty0099 wrote: »

Interesting seeing you say that Mr seer. I am constantly hearing on the radio that there is no profit to be made in building new houses. You seem to think there is. Now I have never built so much as a birdhouse so I wouldn't have a clue, but do any builder types reckon there's money in the property game again? I presume the banks run a mile in the other direction if you even suggest it though.

The price of the construction is not the problem.

The price of Land is.

When you are paying 500k in South Dublin for a semi-d, 100k is for construction of the house. Most of the 400k is for the land.

There is a different between a Building contractor and a Developer. There businesses crosses over so in media there is nearly always confusion.

All the big bankruptcy's where developers or investors. The construction side of must businesses did not go under. But where dragged under by expensive land deals. That 50 million an arce deal the taxpayer is paying for.

Good loser

Dob74 wrote: »

The price of the construction is not the problem.

The price of Land is.

When you are paying 500k in South Dublin for a semi-d, 100k is for construction of the house. Most of the 400k is for the land.

There is a different between a Building contractor and a Developer. There businesses crosses over so in media there is nearly always confusion.

All the big bankruptcy's where developers or investors. The construction side of must businesses did not go under. But where dragged under by expensive land deals. That 50 million an arce deal the taxpayer is paying for.

All your figures are well wrong.

golfwallah

According to article in Irish Independent today, Frank Daly, NAMA boss is quoted as saying:

NAMA sites could deliver up to half of Dublin's residential demand over the next five years, which is estimated at between 40,000 and 50,000 houses and apartments

If you're not caught up in trying to buy yourself at the moment, it will be interesting so see the effect this will have on house prices in Dublin over the next few years.

Will supply and demand resume as normal then? Will house prices come back into line with earnings and what people can afford to pay?

spear_mint

house prices in dublin were redicolously cheap two and three years ago , they are still slightly undervalued

the rest of the country is fairly valued right now and has no reason to rise

Dredd_J

prices are only going up in areas because all of the people who didnt want to buy anything a few years ago now all want to buy all of a sudden, and they all want the same houses in the same areas.
When buyers in general spread their net then prices in those sought after areas will slow down.

Dob74

spear_mint wrote: »

house prices in dublin were redicolously cheap two and three years ago , they are still slightly undervalued

the rest of the country is fairly valued right now and has no reason to rise

What price should a house be per square foot?
To me house prices are still expensive in comparison to wages.
A detached 300k, a semi 200k and an apartment 100k. Depending on the area going up our down.

Dredd_J

Dob74 wrote: »

What price should a house be per square foot?
To me house prices are still expensive in comparison to wages.
A detached 300k, a semi 200k and an apartment 100k. Depending on the area going up our down.

What matters is the wages of the person bidding against you, if they want the house more than you do. Nothing more.

AlekSmart

mr_seer wrote: »

It is true that there is no profit to be made building in Leitrim however there is definitely money to be made in Dublin. They key issue is the amount that the government is creaming in tax revenues per unit from local authority levies, VAT etc. Plus there is the Part V S&A requirement. The government could address the problem in the morning but that is not in their 'we need prices to go up a bit more' agenda.

We've been here before and we know how this ends. I can't believe that we are pursuing the same economic policies that bankrupt the country to begin with. I own property is negative equity so it actually benefits me personally but nobody wins when they fcuk the economy up all over again

Two unbelievers so,Mr_Seer.....I'm hoping that some head in the IMF or the Bundesbank,somewhere...anywhere...will lock our Cabinet,under armed-guard,into a sealed room and refuse to allow them out until they each Individually renounce this bout of Collective Lunacy.

Developing ways and means of encouraging large-scale sustainable,affordable and secure Long Term Residential Rental with high grade oversight and policing methodology SHOULD be Top-of-the List for any compos-mentis Government.....Instead we scurry off back down along the "Own your own homeplace at all costs" myth strewn road....Will it take the sound of Tumbrils and Madame Guillotene's Whooosh!! to bring these people to their senses ?

mr_seer

AlekSmart wrote: »

Two unbelievers so,Mr_Seer.....I'm hoping that some head in the IMF or the Bundesbank,somewhere...anywhere...will lock our Cabinet,under armed-guard,into a sealed room and refuse to allow them out until they each Individually renounce this bout of Collective Lunacy.

Developing ways and means of encouraging large-scale sustainable,affordable and secure Long Term Residential Rental with high grade oversight and policing methodology SHOULD be Top-of-the List for any compos-mentis Government.....Instead we scurry off back down along the "Own your own homeplace at all costs" myth strewn road....Will it take the sound of Tumbrils and Madame Guillotene's Whooosh!! to bring these people to their senses ?

I find it incredible that in many areas of Dublin (not all) house prices have reached 75-85% of 2007 levels. Anyone who has been to viewings in these parts will undoubtedly agree. The only problem is that peoples net incomes have fallen by more than 25% on average, not to mention the numbers in unemployment, the 120,000 mortgages in default (but none repossessed yet) etc. Like the last time, you will find it difficult to hear a contrarian voice in the media as they all have a vested interested in pumping the market. I wonder how long the current madness will last and how badly the country will be burned this time when the cash buyers decide there is no value and the music stops.

FWIW I am a property owner myself, but I don't think it is in anyone's long term interest to follow the current path

spear_mint

mr_seer wrote: »

I find it incredible that in many areas of Dublin (not all) house prices have reached 75-85% of 2007 levels. Anyone who has been to viewings in these parts will undoubtedly agree. The only problem is that peoples net incomes have fallen by more than 25% on average, not to mention the numbers in unemployment, the 120,000 mortgages in default (but none repossessed yet) etc. Like the last time, you will find it difficult to hear a contrarian voice in the media as they all have a vested interested in pumping the market. I wonder how long the current madness will last and how badly the country will be burned this time when the cash buyers decide there is no value and the music stops.

FWIW I am a property owner myself, but I don't think it is in anyone's long term interest to follow the current path

the difference between now and back in 2006 is that houses in rural ireland are not a few hundred grand , dublin wildly overshot the bottom as recent as 2011 due to the collective shock the country was in , people were afraid to buy

an auctioneer once said to me " no one wants to buy when things are cheap "

their was no logical reason why houses got SO cheap in dublin after the banking crash

spear_mint

Dredd_J wrote: »

prices are only going up in areas because all of the people who didnt want to buy anything a few years ago now all want to buy all of a sudden, and they all want the same houses in the same areas.
When buyers in general spread their net then prices in those sought after areas will slow down.

desirable areas will always fetch a premium , their was a very rare window between when prices stopped going down and began to recover in which to buy property in those areas , it was possible to pick up a one bed appartment in ballsbridge in 2011 for under 200 k , the equivelent in london would cost a million pounds today , i know ballsbridge isnt kensington but the principal is the same , london barely dropped at all after the credit crisis in 2008 and is about 40% above that level today , a house in a small rural town fetching 250 k in 2006 was much more insane than a house in dundrum fetching 500k right now , what we saw with premium location dublin property as recent as 2011 was as rare a phenomenon as the S+P index hitting 700 points in early 2009 , a generational low

people want more than a house in 2014 , they want one in the right place

mr_seer

spear_mint wrote: »

desirable areas will always fetch a premium , their was a very rare window between when prices stopped going down and began to recover in which to buy property in those areas , it was possible to pick up a one bed appartment in ballsbridge in 2011 for under 200 k , the equivelent in london would cost a million pounds today , i know ballsbridge isnt kensington but the principal is the same , london barely dropped at all after the credit crisis in 2008 and is about 40% above that level today , a house in a small rural town fetching 250 k in 2006 was much more insane than a house in dundrum fetching 500k right now , what we saw with premium location dublin property as recent as 2011 was as rare a phenomenon as the S+P index hitting 700 points in early 2009 , a generational low

people want more than a house in 2014 , they want one in the right place

I couldn't disagree more. Dublin and even the rest of the country never hit bottom. Property prices (including those in 2011) have been kept artificially high by the intervention of the central bank and Nama. The CB introduced the Code of Conduct on Mortgage Arrears (then there was the Dunne Judgement), while NAMA have hoarded property. These two entities have effectively strangled supply which has led to the current problems we are now seeing. This is going to lead to another major crash in my opinion. Once cash buyers stop seeing value and around the same time repossessions begin to hit the market, there will not be enough buyers with repayment capacity out there to service mortgages on all of the €500k plus houses. IMO this can only end one way

spear_mint

mr_seer wrote: »

I couldn't disagree more. Dublin and even the rest of the country never hit bottom. Property prices (including those in 2011) have been kept artificially high by the intervention of the central bank and Nama. The CB introduced the Code of Conduct on Mortgage Arrears (then there was the Dunne Judgement), while NAMA have hoarded property. These two entities have effectively strangled supply which has led to the current problems we are now seeing. This is going to lead to another major crash in my opinion. Once cash buyers stop seeing value and around the same time repossessions begin to hit the market, there will not be enough buyers with repayment capacity out there to service mortgages on all of the €500k plus houses. IMO this can only end one way

you sound like one of those goldbugs on various sites ( including this one ) who keep yelling that the price of gold is being supressed , that inflation is greater than reported and that stocks are wildly overvalued

as a wise man once said , " markers can remain irrational much longer than you can remain solvent "

beit the fed in america or NAMA here , goverment intervention is a hallmark in many sectors of the global economy , one example being that without it , hardly and farmers in ireland would survive , accept that reality and play the best hand you can

houses in drumcondra are not going to be worth 100 k anytime soon

mr_seer

spear_mint wrote: »

you sound like one of those goldbugs on various sites ( including this one ) who keep yelling that the price of gold is being supressed , that inflation is greater than reported and that stocks are wildly overvalued

as a wise man once said , " markers can remain irrational much longer than you can remain solvent "

beit the fed in america or NAMA here , goverment intervention is a hallmark in many sectors of the global economy , one example being that without it , hardly and farmers in ireland would survive , accept that reality and play the best hand you can

houses in drumcondra are not going to be worth 100 k anytime soon

Houses in Drumcondra are not going to be worth €100k any time soon but they certainly aren't worth the €600k+ they are fetching now.

New mortgage lending issued in the last year is down on the prior year in spite of the surge in prices and all the hype about the market. The current price level is entirely driven by lack of stock with cash buyers the only active purchasers and as I said in my prior post, there will be nothing to replace them