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PROPERTY CRASH (2016)

  • 26-04-2015 10:27am
    #1
    Registered Users, Registered Users 2 Posts: 650 ✭✭✭


    I believe we are heading for another fall in house prices.

    Reasons

    1)entry level wages are appalling
    2)young people can't save deposited
    3)repayments aren't affordable (to Ave man)on 300k properties
    4)repayments can't come down much but can very likely go up(as ecb rates move)
    5)Tax office are chasing purchasers whom lease there homes to cover mortgage, undeclared rental income and and fraudulent mortgage relief.
    6)Property tax
    7)expendable income reduced... social charge/water rates/ increased bills.

    In fact i can see nothing positive for the next 5yrs (only talk of 2% wage increases)

    Don't mean to scare people ( well maybe just a small bit to the bullish property bidders) but this is not going to be a property driven recover (unless Ave wages double)

    GLa

    2008 bank crisis /2016 property crash


«13

Comments

  • Registered Users, Registered Users 2 Posts: 650 ✭✭✭euroboom13




  • Closed Accounts Posts: 2,938 ✭✭✭galljga1


    euroboom13 wrote: »

    So, sell 2015, buy back 2019. We're all millionaires again.


  • Registered Users, Registered Users 2 Posts: 22,436 ✭✭✭✭Pawwed Rig


    It is a strange time as many with mortgage approval try to jump onto the ladder before it expires and they are subject to CB regs. I think many of the asking prices were stupidly optimistic though so reductions in asking prices is not entirely unexpected.


  • Closed Accounts Posts: 608 ✭✭✭For ever odd


    2016 property crash = banking crisis


  • Registered Users, Registered Users 2 Posts: 838 ✭✭✭lucky john


    I'm not so sure 2016 will be the year of the crash

    Reasons...
    1.. the government are trying to sell of AIB and PSTB.
    2. We are in the run up to an election so Enda won't want to see "property crash" or "new negative equity crisis" in the headlines.
    3. Rents v mortgage repayments are much of a muchness in many areas.
    4. Wages may not be climbing but employment sure is.
    5. Serious pent up demand in dublin. This demand is coming to the realization that yet again a house in the capital is but a dream. Prices in the commuter counties are rising and will put a floor under national prices. There is more to property prices than just Dublin.
    6. NO houses worth a dam are been built in many parts of the main population areas. 2016 will not improve this imbalance.
    7. QE will most likely allow banks to reduce interest rates, especially to first time buyers, without impacting on their bottom line.
    8. Competition for borrowers will give drive banks offer incentives, again to first time borrowers and trader uppers. QE will again support margins.
    9. The start of the year is traditionally week for home sales. Lets see where we are by mid year.
    10. In many of the counties (midlands mostly) worst affected by the bust, prices have been unnaturally low. This has been compounded by big lot sales at knock down prices. These properties are now finding buyers as they are still cheap by past standard, and there are plenty of them. Places like Longford, cavan, roscommon, Laois, offaly ect could easily be the best performing markets by year end and as with the commuter counties, keep a floor under national prices.

    Just my thoughts. Don't underestimate the irish obsession with property ownership.


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  • Registered Users, Registered Users 2 Posts: 1,154 ✭✭✭arrowloopboy


    lucky john wrote: »
    I'm not so sure 2016 will be the year of the crash

    Reasons...
    1.. the government are trying to sell of AIB and PSTB.
    2. We are in the run up to an election so Enda won't want to see "property crash" or "new negative equity crisis" in the headlines.
    3. Rents v mortgage repayments are much of a muchness in many areas.
    4. Wages may not be climbing but employment sure is.
    5. Serious pent up demand in dublin. This demand is coming to the realization that yet again a house in the capital is but a dream. Prices in the commuter counties are rising and will put a floor under national prices. There is more to property prices than just Dublin.
    6. NO houses worth a dam are been built in many parts of the main population areas. 2016 will not improve this imbalance.
    7. QE will most likely allow banks to reduce interest rates, especially to first time buyers, without impacting on their bottom line.
    8. Competition for borrowers will give drive banks offer incentives, again to first time borrowers and trader uppers. QE will again support margins.
    9. The start of the year is traditionally week for home sales. Lets see where we are by mid year.
    10. In many of the counties (midlands mostly) worst affected by the bust, prices have been unnaturally low. This has been compounded by big lot sales at knock down prices. These properties are now finding buyers as they are still cheap by past standard, and there are plenty of them. Places like Longford, cavan, roscommon, Laois, offaly ect could easily be the best performing markets by year end and as with the commuter counties, keep a floor under national prices.

    Just my thoughts. Don't underestimate the irish obsession with property ownership.


    Or share ownership and paying CGT .


  • Banned (with Prison Access) Posts: 20 facing_west


    euroboom13 wrote: »
    I believe we are heading for another fall in house prices.

    Reasons

    1)entry level wages are appalling
    2)young people can't save deposited
    3)repayments aren't affordable (to Ave man)on 300k properties
    4)repayments can't come down much but can very likely go up(as ecb rates move)
    5)Tax office are chasing purchasers whom lease there homes to cover mortgage, undeclared rental income and and fraudulent mortgage relief.
    6)Property tax
    7)expendable income reduced... social charge/water rates/ increased bills.

    In fact i can see nothing positive for the next 5yrs (only talk of 2% wage increases)

    Don't mean to scare people ( well maybe just a small bit to the bullish property bidders) but this is not going to be a property driven recover (unless Ave wages double)

    GLa

    2008 bank crisis /2016 property crash


    ECB rates are going nowhere in the next two years at least and interest rates in ireland are going to drop , they are above rates in other eurozone nations


    if property does crash next year , so will equities which are overvalued relative to property at this particular time


  • Registered Users, Registered Users 2 Posts: 650 ✭✭✭euroboom13


    ECB rates are going nowhere in the next two years at least and interest rates in ireland are going to drop , they are above rates in other eurozone nations


    if property does crash next year , so will equities which are overvalued relative to property at this particular time


    I couldn`t agree with you less.

    In my opinion .

    Fed first and ECB next, within 1yr most lightly, but maybe 2yrs.

    Equities are broad based and some will fall with property, but surprisingly the banks turnover ,will increase and so will profits.

    Irish bank rates will drop but only as ecb rates rise, which will mean ,zero saving ,for mortgage holders.

    What makes you think the ECB rate is going nowhere for the next 2yr +?

    Is everyone of the opinion that the banks are going to keep maintaining their loan , for very little return? not likely
    GLA

    (You probable will read in every paper that rates are going nowhere, but that's
    Not how things work)


  • Registered Users, Registered Users 2 Posts: 838 ✭✭✭lucky john


    "In my opinion .

    Fed first and ECB next, within 1yr most lightly, but maybe 2yrs"

    I would be less sure of a fed rate increase this year. the economy there is sluggish and no real sign of inflation yet. i know that inflation is been held back by oil but surprisingly the cheap oil does not seem to be stirring much growth. The fed will be disappointed and a little afraid the economy could be stuck a long term rut. with the dollar so strong on top of that, rising rates is risky.

    as for the ECB. no chance for the next year and probably 18 months. if they do then QE would be seen as having been unnecessary for one. secondly,the 2% inflation target is still a long way off.


  • Registered Users, Registered Users 2 Posts: 650 ✭✭✭euroboom13


    Interesting post ,for quotes, for 18mths to 2 years time! good debate thou

    Someone will be wrong!(me even)


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  • Registered Users, Registered Users 2 Posts: 838 ✭✭✭lucky john


    i'm no expert, just watching with interest.

    the world needs more middle class consumers to prop up the economies of the main world goods producers. either that or lower the debt burden of the developed world. only 2 ways to do that really. Write it off, but banks will be having none of that, or inflate it away. creating the inflation has become more difficult than originally expected though. who would have thought that printing and throwing billions and billions of dollars, yen, pounds, yuan and now euro into the system would produce almost no inflationary results. So I think yellen may have jumped the gun hinting at imminent rate rises. I bet she's pissed that europe took so long to get with the program. its the fact that we are out of step that has caused the dollar to spike. i think she will have to wait for europe to catch up before she can act. as you say, time will tell.


  • Registered Users, Registered Users 2 Posts: 650 ✭✭✭euroboom13


    My take,

    Raising rates creates inflation too, by drawing in deposite`s which in turn are lent out. its also a sign for investors that inflation is moving which in turn creates more investment.

    Low rates= deflation /high rates= inflation

    Yet we are led to believe the opposite!

    When you read about it ,high rates are said to be a tool to reign in inflation and low rate are used to create inflation! But in reality the opposite is true.

    If you do QE in a low rate environment the money gets invested outside the country, if you do it when rates are high the money stays at home.

    China has had high rates /high inflation. we have low rates and low inflation.

    Chicken or the egg, which first!


  • Registered Users, Registered Users 2 Posts: 650 ✭✭✭euroboom13


    predicting a rate rise from the ECB is the definition of a contrarian call , their is no clear logic behind it based on recent events and policy statement from frankfurt

    I am contrary at the best of times.

    We will see, but your right not much talk of it.


  • Registered Users, Registered Users 2 Posts: 650 ✭✭✭euroboom13


    most cycles last at least seven years , we are barely half way through this current property cycle as the bottom was only reached in dublin in early 2012 , the media was a year behind the story but south county dublin hit the bottom late 2011 , galway hit the bottom the middle of 2012 and the rest of the country around eighteen months ago

    Dose interest rates follow cycles too, and if so would it be counter intuitive to think they might rise?

    Property cycles do follow 7 year cycles, they normally double ,but property 4x 1996 to 2006, so what's happening now, is only starting to fix cycle .

    Time will tell!


  • Registered Users, Registered Users 2 Posts: 627 ✭✭✭zpehtsfd


    euroboom13 wrote: »
    I believe we are heading for another fall in house prices.

    Haven't you been calling for lower home prices for the last 2 years?


  • Registered Users, Registered Users 2 Posts: 650 ✭✭✭euroboom13


    zpehtsfd wrote: »
    Haven't you been calling for lower home prices for the last 2 years?

    Yes, even longer


  • Registered Users, Registered Users 2 Posts: 980 ✭✭✭stevedublin


    euroboom13 wrote: »
    Yes, even longer

    well you've been wrong, house prices have been going up the last two years.


  • Registered Users, Registered Users 2 Posts: 387 ✭✭Gman1987


    euroboom13 wrote: »
    Yes, even longer

    Up again last month
    http://www.fxcentre.com/news.asp?3268140


  • Registered Users, Registered Users 2 Posts: 650 ✭✭✭euroboom13


    Short term I have been wrong but my reasoning still stand.

    Sunday indo said a 2% drop and a drop in asking prices.

    I put a brave heading on the post because I am sure.

    I will be wrong if 1)wages rise 50%
    2)interest rate don't rise
    3)state stimulate buying

    I was wrong up until now because the newspapers pumped the market again, and very few houses on the market,

    House under 300k wont fall much but anything over 500k will plummet.

    IN MY OPINION,


  • Closed Accounts Posts: 1,007 ✭✭✭Grecco


    You should have been buying with the last few years, I've done so with several commercial properties, now I`ll hold and wait.
    More Millionaires are made out of a recession than a boom :D


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  • Registered Users, Registered Users 2 Posts: 650 ✭✭✭euroboom13


    Grecco wrote: »
    You should have been buying with the last few years, I've done so with several commercial properties, now I`ll hold and wait.
    More Millionaires are made out of a recession than a boom :D
    I am buying too but definitely not Irish bricks and mortar yet!

    2013 had a few realistic prices ,and so will 2016/7.

    Anyone who both last year will regret the didn't wait!

    The CGT incentive was a cost neutral carrot for the greedy.(no real gains will be had for anything bought )

    Best of luck thou ,respect to anyone trying to make a go of things!


  • Registered Users, Registered Users 2 Posts: 3,628 ✭✭✭Dubh Geannain


    We have certainly seen the end of the ridiculous rises. My prediction is that prices at the top end will fall back and could do so quite a bit. 10% plus in the next 18 months.

    Prices may fall in the 350-600k range to a lesser extent but will fall none the less as second time buyers purchasing power will be limited by the new CB rules.

    The cash buyers and investors may have dried up with the ending of the CGT exemption at the end of last year but I feel there is sufficient pent up demand from FTBs to put a floor on prices in the 150-350 k range. This demand will be reinforced by some Second Time buyers who's purchasing power is reduced sufficiently that the will find themselves competing more and more with FTBs for the same scant stock.

    Supply is a major issue for prices. That issue will not be addressed in the next 18 months. So I'd guess prices between 150-350k will be quite sticky. I think the maximum they will fall will be 5%.

    I wouldn't go so far as to call it a crash. A crises, most certainly. Personally we have been outbid on around 16 houses in the last two years as buyers lost the runs of themselves.


  • Registered Users, Registered Users 2 Posts: 650 ✭✭✭euroboom13


    We have certainly seen the end of the ridiculous rises. My prediction is that prices at the top end will fall back and could do so quite a bit. 10% plus in the next 18 months.

    Prices may fall in the 350-600k range to a lesser extent but will fall none the less as second time buyers purchasing power will be limited by the new CB rules.

    The cash buyers and investors may have dried up with the ending of the CGT exemption at the end of last year but I feel there is sufficient pent up demand from FTBs to put a floor on prices in the 150-350 k range. This demand will be reinforced by some Second Time buyers who's purchasing power is reduced sufficiently that the will find themselves competing more and more with FTBs for the same scant stock.

    Supply is a major issue for prices. That issue will not be addressed in the next 18 months. So I'd guess prices between 150-350k will be quite sticky. I think the maximum they will fall will be 5%.

    I wouldn't go so far as to call it a crash. A crises, most certainly. Personally we have been outbid on around 16 houses in the last two years as buyers lost the runs of themselves.

    Good too see someone ,letting the property go rather than robbing themselves on a" closed auction".

    I have viewed properties and being told that offers are 30% above asking.
    Property should be sold when asking price is reached(seller reaches his goal), or else go to public auction.

    As a person whom puts a lot of thought into pros and cons,i am blown way by the shear financial stupidity of buyers.I met a lot of these buyers 2005/6 paying 600k for poor appartments and thought they had died out, not yet I am afraid!

    greed and impatience over reason!

    The sad part is sensible families are stuck renting till things settle.(but will be rewarded soon)


  • Closed Accounts Posts: 1,007 ✭✭✭Grecco


    There will be no property crash in 2016, instead you`ll look on in disbelief as prices push up even higher. By the end of 2016 we will start to see prices approach or get near to the record highs seen during the boom.


  • Registered Users, Registered Users 2 Posts: 650 ✭✭✭euroboom13


    Grecco wrote: »
    There will be no property crash in 2016, instead you`ll look on in disbelief as prices push up even higher. By the end of 2016 we will start to see prices approach or get near to the record highs seen during the boom.

    Not likely, but brave prediction which deserves respect!
    Where is the increased money coming from? Last years rally sucked a lot in.

    If rates start to rise, would that be positive? because decreases look unlikely in some cases and impossible in others.

    As for new blood in the market, Ave man another 30 couldn`t by garden mobile home.


  • Registered Users, Registered Users 2 Posts: 650 ✭✭✭euroboom13




  • Registered Users, Registered Users 2 Posts: 4,640 ✭✭✭enfant terrible


    euroboom13 wrote: »

    If trackers rise, do variable rates rise too or are they separate?


  • Registered Users, Registered Users 2 Posts: 952 ✭✭✭Prezatch


    Also, he mentions that over 50% of mortages in 2008 in Ireland were trackers. What percentage are we at now a days does anyone know?


  • Registered Users, Registered Users 2 Posts: 22,436 ✭✭✭✭Pawwed Rig


    If trackers rise, do variable rates rise too or are they separate?

    Variables will only rise on a decision from the banks themselves but one would assume that they will pass on any rises to the customer. With a tracker the bank does not have a choice. They are 2 separate products.


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  • Registered Users, Registered Users 2 Posts: 4,640 ✭✭✭enfant terrible


    Pawwed Rig wrote: »
    Variables will only rise on a decision from the banks themselves but one would assume that they will pass on any rises to the customer. With a tracker the bank does not have a choice. They are 2 separate products.

    So if trackers rise by 0.5% next year, is it likely the banks will use that as an excuse to raise the variable rate by the same amount?


  • Registered Users, Registered Users 2 Posts: 1,210 ✭✭✭bren2002


    So if trackers rise by 0.5% next year, is it likely the banks will use that as an excuse to raise the variable rate by the same amount?

    Or more


  • Registered Users, Registered Users 2 Posts: 22,436 ✭✭✭✭Pawwed Rig


    So if trackers rise by 0.5% next year, is it likely the banks will use that as an excuse to raise the variable rate by the same amount?

    Well Yes but Trackers and variable rates have nothing to do with each other.
    A tracker 'tracks' the ECB rate. Lets say In have a 1% tracker. When the ECB rate moves my tracker will move always maintaining the 1% margin for the bank.
    A variable rate is whatever the bank says it is. Technically a bank can set their variable rate at whatever they like.

    What your post should say is
    So if the ECB rises interest rates by 0.5% next year, is it likely the banks will use that as an excuse to raise the variable rate by the same amount?


  • Registered Users, Registered Users 2 Posts: 4,640 ✭✭✭enfant terrible


    Pawwed Rig wrote: »
    Well Yes but Trackers and variable rates have nothing to do with each other.
    A tracker 'tracks' the ECB rate. Lets say In have a 1% tracker. When the ECB rate moves my tracker will move always maintaining the 1% margin for the bank.
    A variable rate is whatever the bank says it is. Technically a bank can set their variable rate at whatever they like.

    What your post should say is

    And your answer would be?


  • Registered Users, Registered Users 2 Posts: 22,436 ✭✭✭✭Pawwed Rig


    And your answer would be?
    You have been answered three times now. I am not sure how else to explain it to you:confused:


  • Registered Users, Registered Users 2 Posts: 4,640 ✭✭✭enfant terrible


    Pawwed Rig wrote: »
    You have been answered three times now. I am not sure how else to explain it to you:confused:

    Do you think its likely the banks will raise variable rates even with the pressure Noonan is putting on them to reduce variable rates?


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  • Registered Users, Registered Users 2 Posts: 725 ✭✭✭talking_walnut


    Do you think its likely the banks will raise variable rates even with the pressure Noonan is putting on them to reduce variable rates?

    Yes they probably will. Their costs will increase so they are likely to pass that increase on to the consumer.

    [The ideas expressed in this post are based on personal opinion only. This is not a guarantee....]


  • Closed Accounts Posts: 1,007 ✭✭✭Grecco


    Don`t know whats going to bring about a property crash in 2016 now. I have noticed that its becoming harder to buy the 3 bed properties. I was at the last Allsop auction and noticed that some of the properties sold at auction went more than similar properties for sale privately.
    Definitely more of a buzz about property now, looks like we are on the up part of the cycle now.
    I expect most of the decent housing stock floating about to be gone by the end of 2016. I`m still a buyer now (for the next 12 months anyway) but with caution. Junk houses/properties are junk for a reason!


  • Banned (with Prison Access) Posts: 113 ✭✭joe_six_cans


    a crash could happen if there is a major global event , other than that , there is zero chance of a crash next year , we are not long enough into the current cycle

    as for interest rates rising , even there is a major global event , they are not going to rise , yellen chickened out of raising rates on thursday which strengthened the euro , a currency war looks like what is happening right now , draghi will weaken the euro further as there is no inflation at all in europe


  • Closed Accounts Posts: 608 ✭✭✭For ever odd


    Have a look into the 8.6 year Real estate cycle (4.3 up 4.3 down) which is part of a bigger cycle. The end of this quater is predicted to be in or around the peak.


  • Banned (with Prison Access) Posts: 113 ✭✭joe_six_cans


    Have a look into the 8.6 year Real estate cycle (4.3 up 4.3 down) which is part of a bigger cycle. The end of this quater is predicted to be in or around the peak.

    the start of this cycle only began in the spring of 2012 in dublin ( and thats wealthy parts of dublin ) and outside dublin a year later

    cycles usually last a lot longer than four years , more like seven , plus we had a severe overshoot to the bottom , most bear markets in property dont last five years like ours did

    granted most bull markets dont last around eleven years either like ours did from 1995 to 2006 but we went from poorer than the average EU country at that time to considerably richer


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  • Registered Users, Registered Users 2 Posts: 6,769 ✭✭✭nuac


    Have a look into the 8.6 year Real estate cycle (4.3 up 4.3 down) which is part of a bigger cycle. The end of this quater is predicted to be in or around the peak.


    Is there such a cycle?.

    Have been reading title deeds for 50+ years. That includes deeds showing sale prices back for 100+ years. There were periods when prices stayed static, but overall there seems to have been an upward trend.

    Remember only a certain percentage of properties change hands each decade. Some properties stay in families for generations


  • Closed Accounts Posts: 608 ✭✭✭For ever odd


    nuac wrote: »
    Is there such a cycle?.

    Have been reading title deeds for 50+ years. That includes deeds showing sale prices back for 100+ years. There were periods when prices stayed static, but overall there seems to have been an upward trend.

    Remember only a certain percentage of properties change hands each decade. Some properties stay in families for generations

    The uptrend you speak of over the last 50-100 years, was a super cycle that peaked in 2007.

    I suppose to look at it objectively, One would have to compare property prices to wage ratio and inflation over the last 50-100 years, and what it will be over the course of the next 25 years.


  • Banned (with Prison Access) Posts: 1,934 ✭✭✭robp


    nuac wrote: »
    Is there such a cycle?.

    Have been reading title deeds for 50+ years. That includes deeds showing sale prices back for 100+ years. There were periods when prices stayed static, but overall there seems to have been an upward trend.

    Remember only a certain percentage of properties change hands each decade. Some properties stay in families for generations

    I think all assets generally rise in price despite being part of cycles.

    I'd be extremely wary of talking about the average cycle length. It varies so much.

    Some interesting work on the trends.
    We have been documenting the rise and fall of Dublin house prices from 1708, when deed registration began, to the present day. A pattern is emerging. Even in the 1700s large price swings were recorded. So boom and bust Irish-style is a 300-year-old habit.
    http://www.irishtimes.com/news/consumer/bubble-trouble-dublin-s-300-year-old-problem-1.1883981


  • Registered Users, Registered Users 2 Posts: 5,994 ✭✭✭daheff



    cycles usually last a lot longer than four years , more like seven , plus we had a severe overshoot to the bottom ,


    But thats the thing about the market...it can shoot downwards over 4-5 years...but it could rebound to the pre bust average price in a much shorter time...so the theory of 4.3 years down and 4.3 years back up doesnt necessarily make a huge amount of sense (I dont have any actual data to back up this...but in theory its not something that linked)


  • Posts: 0 [Deleted User]


    What effect will a doubling of interest rates have on the Irish housing market? In my view this would be enough to crash the market.

    Interest rates can only go up and are so low now that a doubling or even a trebling of rates is entirely possible in the coming years. Such levels would be nothing exceptional from a historical perspective.


  • Registered Users, Registered Users 2 Posts: 68,190 ✭✭✭✭seamus


    Interest rates in Ireland are high in comparison to the rest of Europe, so an increase in ECB rates likely wouldn't be as quickly reflected here. ECB rates are at an historic low, but Irish rates aren't.

    With typical rates @ ~4%, a trebling is completely not possible as the same conditions don't exist now as they did in the 80s.

    At the moment any kind of increase in rates would really only serve to cool it off. We still have a massive housing shortage, so the demand will remain but the amounts available to borrow will reduce, which will require house prices to ease off.

    But as employment continues to grow, the amount of people who can afford to buy increases, which puts upward pressure on prices.


  • Registered Users, Registered Users 2 Posts: 838 ✭✭✭lucky john


    What effect will a doubling of interest rates have on the Irish housing market? In my view this would be enough to crash the market.

    Interest rates can only go up and are so low now that a doubling or even a trebling of rates is entirely possible in the coming years. Such levels would be nothing exceptional from a historical perspective.

    What do you mean by "coming years"? 2...5..10..20 because as it stands at the minute interest rates wont change by more than .5% for the next 5 years and even after 10years will not be much higher. As it is you can take out a 10 year fixed rate mortgage today if rates are a worry. I think interest rates will not be that big of an issue for the next 20 years as regards their effect on property prices.


  • Posts: 0 [Deleted User]


    lucky john wrote: »
    as it stands at the minute interest rates wont change by more than .5% for the next 5 years .

    Brave man. :)


  • Registered Users, Registered Users 2 Posts: 650 ✭✭✭euroboom13


    Every 1% rise in rates adds 10% onto your monthly payments (approx )

    So every 1% rise in rates effects the affordability of purchasers by 10%

    Rates will effect property prices!
    Rates need to rise!

    Our property market hinges on mortgaged purchases, and anything that makes repayments more expensive WILL seriously effect prices.

    (20 years cheap credit is delusional, and normalised rates(ecb 3%) will crash prices very quickly )


  • Registered Users, Registered Users 2 Posts: 838 ✭✭✭lucky john


    euroboom13 wrote: »
    Every 1% rise in rates adds 10% onto your monthly payments (approx )

    So every 1% rise in rates effects the affordability of purchasers by 10%

    Rates will effect property prices!
    Rates need to rise!

    Our property market hinges on mortgaged purchases, and anything that makes repayments more expensive WILL seriously effect prices.

    (20 years cheap credit is delusional, and normalised rates(ecb 3%) will crash prices very quickly )

    Why do you think 3% is the normalised ECB rate? since 2000 the Ecb rate has been 3% or more for only 4 years and 2% or less for 10 of the last 15 years. It may be an aspirational rate but that means nothing really. Europe has reached a state where there is no internal driver of growth. It now looks like China, much courted as an outlet for European goods may not be the saviour after all. So where will the growth come from that will drive inflation that will drive rates to 3%?


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