Why "demand" for hosing will not prevent another property crash.

realitykeeper

I read yesterday that the risk of another housing crash remains low according to the Moody rating agency. One journalist expressed the opinion a housing crash could be "only" 7 years away despite the present "demand" for housing.

As I see it, there is a lack of understanding regarding what constitutes "demand" for housing. What there is in this economy is desire for housing but the building of new houses remains low because there is in fact very little economic demand for housing, at least from the traditional capitalist understanding of the word.

As for the rating agencies, they gave Ireland a AAA rating right before the economy crashed in 2008. The rising house prices are driven by credit, Simon Coveney`s helicopter money and a plethora of other manipulations of the market. The next housing crash will start this year and it will be huge. Am I wrong?

listermint

Victor wrote: »

Nonsense/

20000 approved mortgages versus 10000 stock disagree.

realitykeeper

listermint wrote: »

20000 approved mortgages versus 10000 stock disagree.

May I suggest to those who are considering getting a fixed rate mortgage to check the terms and conditions and be sure you will be allowed to clear your mortgage early (without penalties) should you find that you are in a position to do so in the future.

listermint

realitykeeper wrote: »

May I suggest to those who are considering getting a fixed rate mortgage to check the terms and conditions and be sure you will be allowed to clear your mortgage early (without penalties) should you find that you are in a position to do so in the future.

Most fixed rates on the market are short term. 1 to 5 years

FreudianSlippers

How long do we have to listen to OP kicking the "sky is falling" can down the road? We've been in for impending doom for about 5 years now.

AnGaelach

FreudianSlippers wrote: »

How long do we have to listen to OP kicking the "sky is falling" can down the road? We've been in for impending doom for about 5 years now.

As soon as the market has a down turn (as it inevitably does eventually), we'll hear "i told you so"

johnp001

Regardless of whatever the supply and demand situation is in Ireland any global factors that cause significant restriction of credit will have a massive impact on the prices that are paid for any asset that is generally bought with credit.

Mr.Micro

I would not worry about economics in Ireland. Reality does not apply...we have Nama and excess. Let the party continue.

Victor

Actually, when interest rates return to the normal rate of about 4%, I suspect we will see prices stagnate or drop.

FreudianSlippers

FreudianSlippers wrote: »

How long do we have to listen to OP kicking the "sky is falling" can down the road? We've been in for impending doom for about 5 years now.

That is exactly, and I mean exactly, what was said the last time.

I am not predicting an imminent crash, but anyone who thinks it can't happen because 'demand' has not been paying attention. We went from 'not enough houses' to 'too many houses' to 'not enough houses' in the space of about three years last time around.

It's all about sentiment. As soon as there's a blip the demand dries up almost immediately. It doesn't matter how many people want to buy a house today, the moment prices are falling most of them won't want to buy a house tomorrow.

realitykeeper

listermint wrote: »

Most fixed rates on the market are short term. 1 to 5 years

5 years from now is more than enough.

realitykeeper

FreudianSlippers wrote: »

How long do we have to listen to OP kicking the "sky is falling" can down the road? We've been in for impending doom for about 5 years now.

I suspect the next crash will hit around November of this year.

realitykeeper

Victor wrote: »

Actually, when interest rates return to the normal rate of about 4%, I suspect we will see prices stagnate or drop.

Even in the US, I doubt if interest rates will reach 4% this side of the next crisis. The Fed has been dragging its feet for a long time now and the ECB have not even ended QE yet.

domrush

realitykeeper wrote: »

For the umpteenth time, this is the year.

Would you take a 20 quid charity bet there won't be a crash this year? Winner picks charity of choice.

Maybe people should actually think about the situation rather than base their opinions off some vague similarities between now and 2007. The reasons I believe there won't be a crash for at least two years are as follows:

-Unlike 2007, we haven't been building houses for the past 5 years. There is a shortage in supply, not a perceived shortage as there was in 2005-2007. There really just isn't enough houses for the urban population, which is only growing massively as more and more people move to Dublin for work.

-We still aren't building enough houses.

-Developers aren't being lent to recklessly as they were before, in fact many having declared bankruptcy can't take on significant debt yet. So again unlike 2007 there aren't hundreds of developers being lent billions.

-As someone in their late twenties, most of my accomplices and friends are renting in Dublin, normally in fairly small apartments. This generation have moved to Dublin for work from lack of opportunities elsewhere and will be looking to settle down and buy their own properties in the next few years.

-There are stricter lending practices in place, although they have been relaxed somewhat banks are still much tougher on lending then they were in the boom years. There are hundreds of posts in the accommodation and property forum about people struggling to get mortgages approved.

-It is unlikely there will be a global recession in the next 2/3 years (basing this off the natural boom and bust cycle , typically 7 years long for boom and 7 for bust). Although this is vague and just my opinion rather than based on fact but commodity prices remain low and most of the western world's developed economies are growing but not at rapidly unsustainable rates.

I don't doubt there will be a crash somewhere down the line but just not in the next two years. Will the people predicting an imminent crash lay out a coherent argument as to why, rather than just going off gut feeling and sentiment. And I'm sorry but this thing about there being a 'desire' but no 'demand' is complete nonsense. There isn't enough houses in Dublin and to a lesser extent Cork and Galway. Heads of financial institutions in the UK have pointed out the housing situation as being an economic factor in their reluctance to move to Dublin. I would imagine they have some expertise in economics

Mancomb Seepgood

realitykeeper wrote: »

I suspect the next crash will hit around November of this year.

About the same time my pumpkin futures should peak,so.

johnnyskeleton

Mod mote:

There have beem a few good posts on this thread with detailed analysis, and a lot of one line quips. We want more of the former less of the latter please. Low standards posts may be carded.

realitykeeper

domrush wrote: »

1) -Unlike 2007, we haven't been building houses for the past 5 years. There is a shortage in supply, not a perceived shortage as there was in 2005-2007. There really just isn't enough houses for the urban population, which is only growing massively as more and more people move to Dublin for work.

-We still aren't building enough houses.

2)-Developers aren't being lent to recklessly as they were before, in fact many having declared bankruptcy can't take on significant debt yet. So again unlike 2007 there aren't hundreds of developers being lent billions.

3( -As someone in their late twenties, most of my accomplices and friends are renting in Dublin, normally in fairly small apartments. This generation have moved to Dublin for work from lack of opportunities elsewhere and will be looking to settle down and buy their own properties in the next few years.

-There are stricter lending practices in place, although they have been relaxed somewhat banks are still much tougher on lending then they were in the boom years. There are hundreds of posts in the accommodation and property forum about people struggling to get mortgages approved.

1) The reason more houses are not being built is because there is not sufficient profit to be made at present prices. Those builders that had to be bailed out in 2007 became the favoured few as NAMA rewarded the most irresponsible developers with salaries and contracts that actually had a profit margin for the developer while the developers that did not need to be bailed out were excluded from those contracts. This lack of principle is very much a part of the Irish way of doing things as the recent Garda scandals will attest.

House builds must reflect economic reality, why do you think millions live in shacks in Africa? Houses don`t get built just because people want them. The present and previous governments have created the economic conditions which discourage building which is the opposite to what they should have done.

2) House prices have been re-inflated by the previous government because it (via NAMA) guaranteed a batch of against negative equity while the house prices were still falling. This caused buyers to enter the market which caused the falling house prices to stabilize. They also made it nearly impossible for the banks to reclaim their properties from defaulters for a protracted period of time, thereby keeping houses off the market which would have put more downward pressure on house prices. These manipulations caused the original house price bubble to re-inflate. Investing in a price inflated market carries the additional risk of a house price correction.

3) If you are going to get a mortgage in the next few months, bare in mind that fixed rate mortgages are likely to be withdrawn by the banks at the behest of the BIS. The reason being that the BIS understand the inherent risks associated with QE and the low interest rates of central banks. In other words, they want to move the risk from the bank to you so that if central banks have to raise interest rates, it will be the problem of borrowers with tracker and variable mortgages as opposed the the regional banks and by extension the central banks, ECB and ultimately the BIS.

I suspect, the ECB will be forced to increase interest rates shortly. This will happen following a loss in confidence in the Euro. This will happen when they are forced to increase QE again and lower interest rates again in response to the next stock market crash which could be only months away as the stock markets are already near record highs and overpriced.

When the ECB do increase interest rates, they will have to increase them a lot in order to re-establish confidence in the currency, otherwise the bond markets will crash and that will have frightening repercussions. Governments get vicious when then cannot get enough money and they will look to their languishing populations as their only remaining source of income.

If interest rates increase, the vast majority of mortgage holders in this country who have tracker or variable mortgages will have to pay much much more each month and the default rate will skyrocket. Fixed mortgage holders will be ok, or more than ok if QE causes an expansion in the money supply.

Jawgap

realitykeeper wrote: »

I suspect the next crash will hit around November of this year.

Why?

As in why will it be around November? And what exactly do you mean by "around"? November plus/minus 1 month, 2 months or 60 months?

The important difference this time is that people are, with some limited exceptions, buying homes not houses. In other words they are buying houses to serve as a primary residence rather than buying a property to rent out.

The second importance difference is the funding......mortgages are still being used but at much lower LTV ratios than previously. Although it could start to get interesting when those with significant deposits have made their purchases and the lenders start chasing people with smaller deposits, hopefully the Central Bank will exercise stronger controls than previously.

The whole thing could yet morph into some unholy offspring of the worst of the boom, but at the moment other than the prices being charged around Dublin, there's little to compare between the previous boom, and this highly localised one.

Hollister11

There is not going to be a crash this decade, or early in the next decade at least.
People need homes, and there are not enough to go around. The prices will continue to increase for the next 3-4 years at least, then most likely stagnate when demand = supply.

There will be a crash, no doubt. But the market goes in cycles, and we are at the start of the cycle now.

realitykeeper

Jawgap wrote: »

The whole thing could yet morph into some unholy offspring of the worst of the boom, but at the moment other than the prices being charged around Dublin, there's little to compare between the previous boom, and this highly localised one.

The expanding house price bubble is anything but localized. The credit fueled by low interest rates and QE has enabled western economies to maintain a facade of normality. In the US, the FED keep saying the US economy is strong and that they expect further strong growth and that they are going to normalized interest rates. Investors around the world believe them and they have been buying the US dollar as a consequence. The US FED cannot normalize interest rates without crashing the US economy. So this buy the rumour sell the fact is going to surprise a lot of dollar investors when they finally realize the fact is never going to happen.

jimmycrackcorm

realitykeeper wrote:

1) The reason more houses are not being built is because there is not sufficient profit to be made at present prices. Those builders that had to be bailed out in 2007 became the favoured few as NAMA rewarded the most irresponsible developers with salaries and contracts that actually had a profit margin for the developer while the developers that did not need to be bailed out were excluded from those contracts. This lack of principle is very much a part of the Irish way of doing things as the recent Garda scandals will attest.

Profit is more directly related to cost, not imaginary prices.

realitykeeper wrote:

I suspect, the ECB will be forced to increase interest rates shortly. This will happen following a loss in confidence in the Euro. This will happen when they are forced to increase QE again and lower interest rates again in response to the next stock market crash which could be only months away as the stock markets are already near record highs and overpriced.

With Brexit looming the ECB won't be able to put up rates.

Victor

realitykeeper wrote: »

I suspect, the ECB will be forced to increase interest rates shortly. This will happen following a loss in confidence in the Euro. This will happen when they ... lower interest rates

Ehhhhhhh??????

Hollister11 wrote: »

There will be a crash, no doubt. But the market goes in cycles, and we are at the start of the cycle now.

Assuming the bottom of the market is the start, we are actually a few years into it.

Hollister11

Victor wrote: »

Ehhhhhhh??????

Assuming the bottom of the market is the start, we are actually a few years into it.

The bottom would be the end of the cycle imo

pillphil

Hollister11 wrote: »

The bottom would be the end of the cycle imo

Start and end are the same thing in this context. End of one cycles is the start of the next.

Jawgap

realitykeeper wrote: »

The expanding house price bubble is anything but localized. The credit fueled by low interest rates and QE has enabled western economies to maintain a facade of normality. In the US, the FED keep saying the US economy is strong and that they expect further strong growth and that they are going to normalized interest rates. Investors around the world believe them and they have been buying the US dollar as a consequence. The US FED cannot normalize interest rates without crashing the US economy. So this buy the rumour sell the fact is going to surprise a lot of dollar investors when they finally realize the fact is never going to happen.

How do you know we're in a bubble? And what stage are we at? If you are so sure we're in a bubble then, a bit like your doom and gloom predictions, won't you be making a killing?

......and why can't the Fed manipulate interest rates to achieve certain policy ends? Especially as they don't just change interest rates (those changes are just the ones that attract the headlines) they use other instruments in concert with interest rates to control the money supply.

realitykeeper

jimmycrackcorm wrote: »

With Brexit looming the ECB won't be able to put up rates.

They will have no choice as far stronger forces will be at play. Specifically, the consequences of QE and years of low interest rates which have been tolerated by international markets up until now, will result in a collapse in the value of the Euro, especially if the Med countries insist on more QE and another retrenchment in interest rates the next time the stock market crashes.

Also, when the stock market does crash, the Nordic countries will want a different response to it than the Med countries. Unfortunately, this disparity could end the EU and the Euro.

domrush

realitykeeper wrote: »

They will have no choice as far stronger forces will be at play. Specifically, the consequences of QE and years of low interest rates which have been tolerated by international markets up until now, will result in a collapse in the value of the Euro, especially if the Med countries insist on more QE and another retrenchment in interest rates the next time the stock market crashes.

Also, the next time the stock market crashes, the Nordic countries will want a different response to it than the Med countries. Unfortunately, this will could end the EU and the Euro.

Much of this is hearsay and based on conjecture, as as is much of your earlier arguments. And I don't see how any of this collaborates with your earlier prediction of November of this year, just 6 months away. Are we to expect the end of QE, interest rates to double or more, and referendums en masse to leave the Euro within six months? Have you just picked this out of a hat?

realitykeeper

Jawgap wrote: »

......and why can't the Fed manipulate interest rates to achieve certain policy ends? Especially as they don't just change interest rates (those changes are just the ones that attract the headlines) they use other instruments in concert with interest rates to control the money supply.

The other instruments include things like QE and forward guidance. As for forward guidance, that is their opinion which is always optimistic and always wrong. In other words, forward guidance is a lot of hot air.

QE on the other hand is highly inflationary and the fact that we have seen extremely little inflation so far is an indication that the inflationary pressure is building and will have to explode at some point.

It is arrogant in the extreme for the FED to set interest rates. The true interest rate is unknown but you can be certain it is a lot higher that the FED rate. The risk of a snap-back to true interest rates is rising all the time.

Jawgap

realitykeeper wrote: »

The other instruments include things like QE and forward guidance. As for forward guidance, that is their opinion which is always optimistic and always wrong. In other words, forward guidance is a lot of hot air.

QE on the other hand is highly inflationary and the fact that we have seen extremely little inflation so far is an indication that the inflationary pressure is building and will have to explode at some point.

It is arrogant in the extreme for the FED to set interest rates. The true interest rate is unknown but you can be certain it is a lot higher that the FED rate. The risk of a snap-back to true interest rates is rising all the time.

Which interest rates are you referring to here? The use of open market ops to influence the fed funds rate or the Discount Rate (the one that gets all the press).

You also make no mention of semi-quantitative instruments......surely they are critical to influencing economic trajectories, given that regulatory requirements on depository institutions to hold a certain level of reserves influences the money supply, the velocity at which it circulates, and, critically, institutions' abilities to create credit?

......and you still haven't answered why you think the crash will happen in November in this year?

realitykeeper wrote: »

I suspect the next crash will hit around November of this year.

EDIT:

......and seen as you were deft enough to step over the first part of my post to answer the second part, perhaps you'd like to take a run at the first part?

Jawgap wrote: »

How do you know we're in a bubble? And what stage are we at? If you are so sure we're in a bubble then, a bit like your doom and gloom predictions, won't you be making a killing?

......and why can't the Fed manipulate interest rates to achieve certain policy ends? Especially as they don't just change interest rates (those changes are just the ones that attract the headlines) they use other instruments in concert with interest rates to control the money supply.

realitykeeper

This link shows an article from today`s Irish Examiner and it touches on my concerns regarding the Irish and global economy. Many of the issues I raised here and in other threads are identified in this article as presenting clear and present danger. These include low interest rates over many years, QE and such. Unfortunately, such warnings are too few and at this stage to late for the macro economy.


http://www.irishexaminer.com/business/columnists/oliver-mangan/theres-a-clear-and-present-danger-in-keeping-interest-rates-extremely-low-450684.html

Cookie_Monster

realitykeeper wrote: »

This link shows an article from today`s Irish Examiner and it touches on my concerns regarding the Irish and global economy. Many of the issues I raised here and in other threads are identified in this article as presenting clear and present danger. These include low interest rates over many years, QE and such. Unfortunately, such warnings are too few and at this stage to late for the macro economy.


http://www.irishexaminer.com/business/columnists/oliver-mangan/theres-a-clear-and-present-danger-in-keeping-interest-rates-extremely-low-450684.html

There's nothing in that to indicate any sort of collapse is likely. At best it is highlighting some over value of certain assets, but nothing in regards the collapse of western society, nor is it advocating slashing wages, establishing work/poor camps, the return of the easter bunny or whatever other rubbish you continually spout.

realitykeeper

Cookie_Monster wrote: »

There's nothing in that to indicate any sort of collapse is likely. At best it is highlighting some over value of certain assets, but nothing in regards the collapse of western society, nor is it advocating slashing wages, establishing work/poor camps, the return of the easter bunny or whatever other rubbish you continually spout.

You mean the stock and bond markets? That encompasses quite a lot. The QE programs has fed trillions into government and corporate bonds, if they fail it will take many trillions more to attempt a rescue and the currencies will fail as a consequence.

dr.fuzzenstein

realitykeeper wrote: »

You mean the stock and bond markets? That encompasses quite a lot. The QE programs has fed trillions into government and corporate bonds, if they fail it will take many trillions more to attempt a rescue and the currencies will fail as a consequence.

There will be a soft landing
(I'll get me coat)

Jawgap

realitykeeper wrote: »

This link shows an article from today`s Irish Examiner and it touches on my concerns regarding the Irish and global economy. Many of the issues I raised here and in other threads are identified in this article as presenting clear and present danger. These include low interest rates over many years, QE and such. Unfortunately, such warnings are too few and at this stage to late for the macro economy.


http://www.irishexaminer.com/business/columnists/oliver-mangan/theres-a-clear-and-present-danger-in-keeping-interest-rates-extremely-low-450684.html

OK, you're clearly not interested in answering questions so it looks like we're moving on to this.

It's an article arguing for an increase in interest rates......by a chief economist of a bank about to be re-floated on the market.....

Oliver Mangan is chief economist at AIB

....excuse my cynicism but "....he would say that, wouldn't he?" He's hardly going to argue for interest rates to be kept low anymore than a turkey is going to vote for Christmas.....low interest rates mean the capital reserves his employer has to hold in cash and near-cash notes generates a very low yield which impacts severely profitability.

Anyway, I'll see your Examiner article and raise you an FT article

Euro enjoys renaissance as investors pivot to continent

Wanderer78

realitykeeper wrote:

You mean the stock and bond markets? That encompasses quite a lot. The QE programs has fed trillions into government and corporate bonds, if they fail it will take many trillions more to attempt a rescue and the currencies will fail as a consequence.

I wouldn't overly worry about that, sure the imf are there to back up the whole system if it all goes down, and they're just a great bunch, aren't they?

realitykeeper

Jawgap wrote: »

Anyway, I'll see your Examiner article and raise you an FT article

Euro enjoys renaissance as investors pivot to continent

It says I have to subscribe to read the article and I don`t subscribe to fake news. That said, I will address the headline. If the euro is enjoying a renaissance it is only because of investor`s desperate search for yield. They are also investing in bonds that are guaranteed to lose money. That would not be happening if the economy of Europe was truly perceived as safe.

Jawgap

realitykeeper wrote: »

It says I have to subscribe to read the article and I don`t subscribe to fake news. That said, I will address the headline. If the euro is enjoying a renaissance it is only because of investor`s desperate search for yield. They are also investing in bonds that are guaranteed to lose money. That would not be happening if the economy of Europe was truly perceived as safe.

What makes you think the FT is fake news? And why would you accept an article written by a commentator with a self-interest over one written by a journo?

EDIT: actually, investors may well be investing in bonds but the article notes

"Playing a big role has been the flood of capital seeking European stock funds now at a record high, as is the eurozone capital account surplus."

donaghs

realitykeeper wrote: »

As for the rating agencies, they gave Ireland a AAA rating right before the economy crashed in 2008. The rising house prices are driven by credit, Simon Coveney`s helicopter money and a plethora of other manipulations of the market. The next housing crash will start this year and it will be huge. Am I wrong?

Taking the longer view, Irish property prices haven't really gone up that much in recent years. And is there really huge credit available? lots of reckless lending?
Anecdotally, most people I hear of are having trouble saving deposits and getting mortgage approval.

If prices keep rising at this rate for a few years more, sure, a crash is quite likely. But I'd suspect prices will slow down as people simply cannot afford to buy houses rising at that rate. Unless we get another lending boom...

donaghs

donaghs wrote: »

Taking the longer view, Irish property prices haven't really gone up that much in recent years. And is there really huge credit available? lots of reckless lending?
Anecdotally, most people I hear of are having trouble saving deposits and getting mortgage approval.

The last data point there is over 2 years old.

Jawgap

Deleted User wrote: »

The last data point there is over 2 years old.

Here's a so more up to date data (2005 as the base)

donaghs

Jawgap wrote: »

Here's a so more up to date data (2005 as the base)

Yeh, that was the best graph I could find at the time. But the latest one shows prices still going up, but slowing since 2014. So no sign of a runaway boom just yet.

The second one uses a higher index so that the peak, trough and current rise are flattened compared to the one posted earlier. Prices aren't rising as quick as in the middle of the boom but they're rising pretty quickly. (Also the index-type graphs have their own little foibles where the same slope at 2 points in the graph can represent two very different % increases.

FreudianSlippers

realitykeeper wrote: »

I suspect the next crash will hit around November of this year.

As promised, just following up on this post. IMO this is a valid bump to this thread, as it's clear that demand for housing has increased and prices have followed. We have a supply-side issue in Ireland causing an increase in the mean reversion price; it follows that the premise of this thread is flawed, as we would need a credit issue at the moment to actually crash this property market.

National index is still 25% lower than peak 2007. I don't see a bubble here yet.

blanch152

FreudianSlippers wrote: »

As promised, just following up on this post. IMO this is a valid bump to this thread, as it's clear that demand for housing has increased and prices have followed. We have a supply-side issue in Ireland causing an increase in the mean reversion price; it follows that the premise of this thread is flawed, as we would need a credit issue at the moment to actually crash this property market.

National index is still 25% lower than peak 2007. I don't see a bubble here yet.

There are still ten days to go. That bubonic plague in Madagascar might wipe us all out meaning that property prices do collapse and the OP will be right. Probably won't be around to tell us though.

Wanderer78

FreudianSlippers wrote:

National index is still 25% lower than peak 2007. I don't see a bubble here yet.

Famous last words, it's clearly obvious we 're in a bubble, be patient though, the crash could take a while

Hitman3000

realitykeeper wrote:

I suspect the next crash will hit around November of this year.

So you have 10 days left before you are wrong again.

FreudianSlippers

Wanderer78 wrote: »

Famous last words, it's clearly obvious we 're in a bubble, be patient though, the crash could take a while

You've conveniently ignored the meat of my post. Can you please outline how, economically, we are in a bubble?

Wanderer78

FreudianSlippers wrote: »

You've conveniently ignored the meat of my post. Can you please outline how, economically, we are in a bubble?

joys of dyslexia im afraid, apologies. in my eyes, we re obviously in a bubble regarding housing prices

CIARAN_BOYLE

I've said it before and I will say it again. A hard Brexit is the most likely near term cause of a housing crash.

One thing to note is that during the recession more people moved home with families or into shared accommodation due to lack of money. These people now want their own property driving the how high boom. There is not enough stock and the occupancy of property has fallen by approx .4 a unit (half remembered statistic on a radio show, I can't support this sorry) since 2010.

For a crash to happen we need tot and this demand out by removing the extra funds and forcing people to move back in with their families. The best way to do this is to cause a general economic crash. The most likely cause of this is a hard Brexit.

It was interesting to note that exports to Britain rose in the first half of 2017 increasing our dependence on that market.

FreudianSlippers

We actually don't have any of the economic indicators of a bubble and the above two posts actually indicate why there isn't a likely bubble rather than vice versa. We have limited supply reducing the number of people entering into the market, we have comparatively high interest rates (double the EU average rate), we have difficult access to credit and limited mispricing of risk due to the minimum requirements for deposits and, most importantly, we do not have a sudden and high increase in prices.

Idbatterim

realitykeeper wrote: »

I read yesterday that the risk of another housing crash remains low according to the Moody rating agency. One journalist expressed the opinion a housing crash could be "only" 7 years away despite the present "demand" for housing.

As I see it, there is a lack of understanding regarding what constitutes "demand" for housing. What there is in this economy is desire for housing but the building of new houses remains low because there is in fact very little economic demand for housing, at least from the traditional capitalist understanding of the word.

As for the rating agencies, they gave Ireland a AAA rating right before the economy crashed in 2008. The rising house prices are driven by credit, Simon Coveney`s helicopter money and a plethora of other manipulations of the market. The next housing crash will start this year and it will be huge. Am I wrong?

I'd actually say just make up your own mind. Any body or agency that comes out with this in information. "We have a bubble " or " no we don't" they all have their own agenda and interests ...