44.5% below the peak?

jd1983

Does anyone else find the cso statistics of 44.5% below peak Dublin prices surprising. From what I can see prices for 4 bed houses in middle class areas tend to be going for between 400k - 500k. This would mean that during the boom they would be going for between 720k - 920k. I wasn't looking during the boom but I didn't think they reached these levels.
Perhaps it's the mix of houses that's distorting these figures whereas mansions might have fallen by a greater percentage but I thought the cso adjusted for such factors.

MouseTail

I can remember that house and apartment prices clustered around the Stamp Duty thresholds. So entry level apartments and houses were c 317k (exempt for ftb up to that point), which bears out the CSO stats. Other stamp duty thresholds were 381k and 635k. I don't think standard 3 beds in decent areas of Dublin went above 635, but 4 beds may have.

It really was a very bizarre episode in our economic history.

jon1981

A good friend of mine has a mortgage of over 800k on a 3 bed semi in Stillorgan brought right at the peak (I know, it's hard to believe!). I'd say a similar house in that area would be around 500k or less now.

He's on a tracker and his repayments aren't much more than mine (at the moment) and my mortgage is less than half of his! :eek:

Caliden

I think the whole thing of comparing today's prices to 'the peak' is idiotic. Any time it's mentioned it's never in a negative light, always in a slightly optimistic light.

For example from RTE's article on the subject: "Properties in Dublin are still priced 44.5% lower than in February 2007...."

It comes across as if they're trying to say, "yes prices are up but we're still well below the peak so don't worry"

The peak was a unsustainable bubble created by reckless lending and I cringe every time it's mentioned because it's embarrassing.


I'm not saying we shouldn't forget what happened, I'm saying that you can't compare the two prices as it's like comparing apples to oranges.

riclad

Yeah the peak was not real,
in that many loans were not sustainable,
AS we can see now ,many people are paying only part of their mortgages,
or getting help from social welfare,
or else going to england to declare bankruptcy .
IT was based on a situation where the regulator was not looking at loan to income ratios ,
ie we had stupid bankers ,
with little oversight.or regulation.
WE probably have a real market now in dublin, as at least your application is checked.
re your income, vs expenses ,and its calculated , can you afford to pay the loan if rates rise by 2 per cent.
IT was a crazy time,
people were paying 200k for a house miles for dublin.
To commute to work monday to friday.

Caliden

riclad wrote: »

Yeah the peak was not real,
in that many loans were not sustainable,
AS we can see now ,many people are paying only part of their mortgages,
or getting help from social welfare,
or else going to england to declare bankruptcy .
IT was based on a situation where the regulator was not looking at loan to income ratios ,
ie we had stupid bankers ,
with little oversight.or regulation.
WE probably have a real market now in dublin, as at least your application is checked.
re your income, vs expenses ,and its calculated afford to pay the loan if rates rise by 2 per cent.
IT was a crazy time,
people were paying 200k for a house miles for dublin.
To commute to work monday to friday.

I don't think it's a real market now either.

It's a supply & demand issue.

Shedite27

Caliden wrote: »

I don't think it's a real market now either.

It's a supply & demand issue.

Is "supply and demand" not how every market should work?

On the supply side, the whole idea of "increase supply of 3/4 bed semi-d's in Dublin" is missing the point that there isn't enough free land in the areas people want these houses.

On the demand side, it's tough to tell if there's more demand because people didn't buy from 2008 - 2012 or if there's less demand because people have less disposable income, or if those factors cancel each other out.

quadrifoglio verde

Shedite27 wrote: »

Is "supply and demand" not how every market should work?

On the supply side, the whole idea of "increase supply of 3/4 bed semi-d's in Dublin" is missing the point that there isn't enough free land in the areas people want these houses.

On the demand side, it's tough to tell if there's more demand because people didn't buy from 2008 - 2012 or if there's less demand because people have less disposable income, or if those factors cancel each other out.

Probably a bit of both. There's demand from cash buyers, couples on big wages who rented over the last 7 plus years. The houses that they'd have traditionally bought, are the 3-4 bed 1930s semi d in established areas being sold by someone trading up. The couple in their 50s who own the 3-4 bed semi-d have realised that moving from churchtown to a 5 bed detached house in foxrock and having a massive mortgage all over again, especially now that the kids have moved out is a bit celtic tiger and that a home is for life. And also their incomes are potentially down.

MouseTail

Not forgetting demographics, there is baby boomers buying now, we simply don't have enough houses for our population.

riclad

Theres landbank,s ,in many parts of dublin, probably owned by nama, the banks, or the local authority
Obviously many area,s ,rathmines, etc, have no space left for house building ;eg
no large sites to build low density housing in.
Some buildings could be knocked down ,and replaced by apartment blocks.

L1011

riclad wrote: »

Some buildings could be knocked down ,and replaced by apartment blocks.

Doesn't help when everyone's obsessed with having a 3 bed semi-d with space for a garage to the side and a trampoline in the back garden.

Dredd_J

Lots of people who were in negative equity for years have suddenly looked again and realized that they are no longer in NE.

Now they are happy and might move on to another house and that will alter the market a bit and make more houses available.

Or for those who werent paying their mortgage it now becomes possible for the the banks to get their money back by repoing the houses not in NE and the market will alter a bit too.

I think that what will happen soon enough is that the market will satbilize and house prices in Dublin will only be going up by 5 - 10% per year until the next crash (theres always a next crash or economic crisis). But god only knows when that will be. Then the cycle will start all over again.

MouseTail

Dredd_J wrote: »

I think that what will happen soon enough is that the market will satbilize and house prices in Dublin will only be going up by 5 - 10% per year until the next crash (theres always a next crash or economic crisis). But god only knows when that will be. Then the cycle will start all over again.

Very, very roughly, economic cycles last 7 years.
So if we take 2005 as peak of bubble, 2012 bottom of cycle, 2019 peak, 2026 bottom etc.

As I said roughly, and old rules of economics don't necessarily still hold true, but good enough rule of thumb.

Dredd_J

MouseTail wrote: »

Very, very roughly, economic cycles last 7 years.
So if we take 2005 as peak of bubble, 2012 bottom of cycle, 2019 peak, 2026 bottom etc.

As I said roughly, and old rules of economics don't necessarily still hold true, but good enough rule of thumb.

I'll start saving to buy a few cheap houses in Dublin in 2026 so

micar

MYOB wrote: »

Doesn't help when everyone's obsessed with having a 3 bed semi-d with space for a garage to the side and a trampoline in the back garden.

true true. I consider myself very very lucky. I bought in Dec 2012. There is a house up the road on the market for 50% more than what I paid for mine.

I got the 3 bed semi with the garage at the side and there happened to be a trampoline in the back garden. It got damaged in the storms a while back and I had to get rid it it. I never even got to have a go on it

ted1

micar wrote: »

happened to be a trampoline in the back garden. It got damaged in the storms a while back and I had to get rid it it. I never even got to have a go on it

Jesus man, tough break. At this time my thoughts and prayers are with you and your family.

Zamboni

micar wrote: »

I got the 3 bed semi with the garage at the side and there happened to be a trampoline in the back garden. It got damaged in the storms a while back and I had to get rid it it. I never even got to have a go on it

That is a difficult situation to bounce back from.