2021 Irish Property Market chat - *mod warnings post 1*

enricoh

fliball123 wrote: »

And I said can you not work that out yourself? If you dont understand this key ingredient to every bubble in history then I am not doing your homework for you. just as a quick and recent example would property prices been as high as they were in 07 if banks were not throwing money around like confetti with thing like 110% mortgages?

Fast forward to 2021 n taxpayers money is being thrown around like confetti on housing.
We're only the 3rd most indebted country in the developed world iirc so let's try to get to the most indebted before it goes bang!
Keep trying to outbid the council's n charities folks coz the builders are winding down n have learned from the tiger. (Or at least their financers have!)

fliball123

schmittel wrote: »

I think my post went over your head to be honest.

You mean you have no answer its ok

If we are at the start of a bubble in 2021 (up until now the figures do not back up that we were in one till about sept of 2020) so if we are in one now are you saying that the access to the cheap credit our government has borrowed for 2020 will not have an impact in blowing up a bubble that maybe happening currently. Remember the government are now actively competing in buying existing 2nd hand and new property. They are also the biggest clients of rental from REITS and vulture funds ..But no that 20 billion borrowed in 2020 the cheap and easy access to that money that our government have gotten will have absolutely zero impact on this. Your such a snide when you cant win.

fliball123

DataDude wrote: »

Surely most non-property asset bubbles aren’t built on easy access to credit? Dot Com, Dutch Tulip, Gamestop etc.

Doesn’t credit just makes things worse as when the losses start investors get burned more, quicker and are forced to sell which causes things to spiral downward faster? Don’t see why credit is an absolute necessity in order for an asset to deviate from its fundamental value.

look at them again for example a lot of the dotcom companies that were started were started with what???? "access to cheap credit"

Mic 1972

Cyrus wrote: »

you can

just not everywhere.

you answered your question then :-)

Mic 1972

MacronvFrugals wrote: »

The house that the council outbid my sister on was in poor nick, the antithesis of a new build!

how do you know if the counsel outbid you?

DataDude

fliball123 wrote: »

look at them again for example a lot of the dotcom companies that were started were started with what???? "access to cheap credit"

That’s nonsense. Setting up loads of companies isn’t a bubble. People buying shares in that company and elevating it far beyond its intrinsic value is the bubble.

What about the textbook example of a bubble with Dutch tulips? The fertiliser produced by companies who accessed cheap credit...?

hometruths

fliball123 wrote: »

You mean you have no answer its ok

If we are at the start of a bubble in 2021 (up until now the figures do not back up that we were in one till about sept of 2020) so if we are in one now are you saying that the access to the cheap credit our government has borrowed for 2020 will not have an impact in blowing up a bubble that maybe happening currently. Remember the government are now actively competing in buying existing 2nd hand and new property. They are also the biggest clients of rental from REITS and vulture funds ..But no that 20 billion borrowed in 2020 the cheap and easy access to that money that our government have gotten will have absolutely zero impact on this. Your such a snide when you cant win.

I was saying that the cheap and easy access to credit that the funds and government have is inflating prices.

Your failure to understand this is what I meant by the post going over your head.

Cyrus

Mic 1972 wrote: »

you answered your question then :-)

I don’t think I did !

Anyway 1m in Leitrim isn’t the same as 1m in greystones

Hubertj

sanfranbest wrote: »

This house has been on the market for a few months, it was originally priced at 1.2 million,
Now it has been relisted at 995k

It's still a horrible house,, no curb appeal,,, dark and bad layout,

Still not worth 995K,,,
You are paying for the address,, not the house,,

https://www.daft.ie/for-sale/detached-house-106-baggot-lane-ballsbridge-dublin-4/3152823

We discussed this before. I live near it. Couldn’t believe the price they put it up for. Crazy money.

MacronvFrugals

Mic 1972 wrote: »

how do you know if the counsel outbid you?

Not sure tbh, she knew the EA from way back.

Browney7

fliball123 wrote: »

look at them again for example a lot of the dotcom companies that were started were started with what???? "access to cheap credit"

Can you provide proof of this?

fliball123

DataDude wrote: »

That’s nonsense. Setting up loads of companies isn’t a bubble. People buying shares in that company and elevating it far beyond its intrinsic value is the bubble.

What about the textbook example of a bubble with Dutch tulips? The fertiliser produced by companies who accessed cheap credit...?

setting up lots of companies using cheap credit is what help start the dotcom bubble

AS for the Dutch tuilips .. from the following website the last paragraph. I have bolded and underllied the part where credit is used .

It was at that time that professional traders ("stock jobbers") got in on the action, and everybody appeared to be making money simply by possessing some of these rare bulbs. Indeed, it seemed at the time that the price could only go up; that "the passion for tulips would last forever." People began buying tulips with leverage - using margined derivatives contracts to buy more than they could afford. But as quickly as it began, confidence was dashed. By the end of the year 1637, prices began to fall and never looked back. A large part of this rapid decline was driven by the fact that people had purchased bulbs on credit, hoping to repay their loans when they sold their bulbs for a profit. But once prices started their decline, holders were forced to liquidate - to sell their bulbs at any price and to declare bankruptcy in the process. "Hundreds who, a few months previously had begun to doubt that there was such a thing as poverty in the land suddenly found themselves the possessors of a few bulbs, which nobody would buy," even at prices one-fourth of what they paid.
By 1638, tulip bulb prices had returned to from whence they came.

https://www.investopedia.com/terms/d/dutch_tulip_bulb_market_bubble.asp

fliball123

schmittel wrote: »

I was saying that the cheap and easy access to credit that the funds and government have is inflating prices.

Your failure to understand this is what I meant by the post going over your head.

Then why are you arguing with me all I was saying if we are currently in a bubble that access to cheap credit which the government has had is what is fueling it ergo it seems to be one of the properties needed for a bubble historically

fliball123

Browney7 wrote: »

Can you provide proof of this?

have a look at the site here

https://corporatefinanceinstitute.com/resources/knowledge/trading-investing/dotcom-bubble/

look at cause of the crash and look at 2. Abundance of venture capital

DataDude

fliball123 wrote: »

setting up lots of companies using cheap credit is what help start the dotcom bubble

AS for the Dutch tuilips .. from the following website the last paragraph. I have bolded and underllied the part where credit is used .

It was at that time that professional traders ("stock jobbers") got in on the action, and everybody appeared to be making money simply by possessing some of these rare bulbs. Indeed, it seemed at the time that the price could only go up; that "the passion for tulips would last forever." People began buying tulips with leverage - using margined derivatives contracts to buy more than they could afford. But as quickly as it began, confidence was dashed. By the end of the year 1637, prices began to fall and never looked back. A large part of this rapid decline was driven by the fact that people had purchased bulbs on credit, hoping to repay their loans when they sold their bulbs for a profit. But once prices started their decline, holders were forced to liquidate - to sell their bulbs at any price and to declare bankruptcy in the process. "Hundreds who, a few months previously had begun to doubt that there was such a thing as poverty in the land suddenly found themselves the possessors of a few bulbs, which nobody would buy," even at prices one-fourth of what they paid.
By 1638, tulip bulb prices had returned to from whence they came.

https://www.investopedia.com/terms/d/dutch_tulip_bulb_market_bubble.asp

As per my first post. Credits can exacerbate bubbles but they are not an absolute requirement. Also credit exists in every single market to varying degrees, including the current housing market. So when an asset falls credit will always be referenced, as it’s always there.

I remember creating a ‘bubble’ for the price of Aidan McGeady cards on Fifa Ultimate Team in the lead up to Paddys Day (good times) by buying all that came onto the market and sitting on them.

Similarly GameStop a bubble was intentionally created by a bunch of retail investors. Sure some probably leveraged up through options, but you can absolutely move an asset from its intrinsic value without credit. Media hysteria is often a classic driver of bubbles also. Credit just makes the bubble bursting louder and faster.

Yurt2

fliball123 wrote: »

Then why are you arguing with me all I was saying if we are currently in a bubble that access to cheap credit which the government has had is what is fueling it ergo it seems to be one of the properties needed for a bubble historically

Have you taken a look at interest rates lately? The world is awash with cheap money, banks are choking with cash looking for it to find a home.

cnocbui

fliball123 wrote: »

have a look at the site here

https://corporatefinanceinstitute.com/resources/knowledge/trading-investing/dotcom-bubble/

look at cause of the crash and look at 2. Abundance of venture capital

Venture capital may be easy, but it isn't cheap.

fliball123

DataDude wrote: »

As per my first post. Credits can exacerbate bubbles but they are not an absolute requirement. Also credit exists in every single market to varying degrees, including the current housing market. So when an asset falls credit will always be referenced, as it’s always there.

I remember creating a ‘bubble’ for the price of Aidan McGeady cards on Fifa Ultimate Team in the lead up to Paddys Day (good times) by buying all that came onto the market and sitting on them.

Similarly GameStop a bubble was intentionally created by a bunch of retail investors. Sure some probably leveraged up through options, but you can absolutely move an asset from its intrinsic value without credit. Media hysteria is often a classic driver of bubbles also. Credit just makes the bubble bursting louder and faster.

Sorry in your Aiden McGeady analogy your driving the price up by monopolizing the market. Its hardly a bubble but fair play to you he was a good player in his day

Anyway credit is needed to blow a market out of all proportion. In other words if people just bought and sold anything without credit everything would cost less. Once you use credit it allows for higher prices. The reason why its called a bubble is because access to credit blows it up and when it bursts its the same as a disaster as people have not got the cash to pay for it as the cash was never there in the first place. But I do agree with you that credit is uses in nearly every facet of the markets and buying and selling any commodity or stock these days. You can also be certain there was a lot of borrowing going on for the gamestop bubble

fliball123

cnocbui wrote: »

Venture capital may be easy, but it isn't cheap.

If you read all of that section it states that the low interest rates were used to get credit

fliball123

Yurt! wrote: »

Have you taken a look at interest rates lately? The world is awash with cheap money, banks are choking with cash looking for it to find a home.

?? and whats your point?

Yurt2

fliball123 wrote: »

?? and whats your point?

You're denying the possibility a bubble in a period of extended rock bottom interest rates. These are the exact conditions where asset bubbles form. Take a look around you.

Hubertj

Hubertj wrote: »

We discussed this before. I live near it. Couldn’t believe the price they put it up for. Crazy money.

It is insane. You’d want to be small too. Extrapolate the height of the downstairs ceiling from the height of the chairs and dining table. It ain’t high.

Marius34

Yurt! wrote: »

Have you taken a look at interest rates lately? The world is awash with cheap money, banks are choking with cash looking for it to find a home.

Private sector and household are sitting on lots of cash, and fairly low Credits. Which is very different from Credit crisis, with high Credits and fairly low Deposits.

Current high deposits could be a good conditions to form a housing Bubble in the future, if cash will start to move in Property market.

hometruths

fliball123 wrote: »

Then why are you arguing with me all I was saying if we are currently in a bubble that access to cheap credit which the government has had is what is fueling it ergo it seems to be one of the properties needed for a bubble historically

You've been banging on that we are not currently in a bubble because there is no cheap and easy credit in the market, look at the CBI income and LTV rules etc.

From these posts it seemed that you had failed to understand the impact of the cheap and easy credit available to the funds/councils etc.

But your posts this evening confirm that you've recognised that now.

So if you now think that there is in fact cheap and easy credit in the market, is it possible that we are currently in a bubble?

Yurt2

Marius34 wrote: »

Private sector and household are sitting on lots of cash, and fairly low Credits. Which is very different from Credit crisis, with high Credits and fairly low Deposits.

Current high deposits could be a good conditions to form a housing Bubble in the future, if cash will start to move in Property market.

We're not talking credit crisis and the central bank restrictions are the finger in the dyke for prices truth be told. The central bank can't control capital flows externally, institutions and pension funds coming to play and pump the market . There's all sorts of people playing in the Irish property market besides Johnny and Mary trade-up or FTBs.

As per the posts a few pages earlier, when Eddie Hobbs is doing a jig trying get investors in on the game, maybe people should wise up a bit.

Marius34

Yurt! wrote: »

We're not talking credit crisis and the central bank restrictions are the finger in the dyke for prices truth be told. The central bank can't control capital flows externally, institutions and pension funds coming to play and pump the market . There's all sorts of people playing in the Irish property market besides Johnny and Mary trade-up or FTBs.

As per the posts a few pages earlier, when Eddie Hobbs is doing a jig trying get investors in on the game, maybe people should wise up a bit.

FTB & STB are still the biggest players. And lets hope individual BTL investors will not enter the game, otherwise it's likely we will be heading to another Bubble.

SmokyMo

Yurt! wrote: »

We're not talking credit crisis and the central bank restrictions are the finger in the dyke for prices truth be told. The central bank can't control capital flows externally, institutions and pension funds coming to play and pump the market . There's all sorts of people playing in the Irish property market besides Johnny and Mary trade-up or FTBs.

As per the posts a few pages earlier, when Eddie Hobbs is doing a jig trying get investors in on the game, maybe people should wise up a bit.

haha, so true. Eddie Hobs would be the ultimate counter indicator. Chap is a financial charlatan.

hometruths

Marius34 wrote: »

FTB & STB are still the biggest players. And lets hope individual BTL investors will not enter the game, otherwise it's likely we will be heading to another Bubble.

If you think the volume of BTL investors fuelled the bubble in 2006, it's worth bearing in mind the following from the BPFI Housing Market Monitor Q4 2020

At the peak of the mortgage activity in 2006, BTL loans accounted for around 20% of total mortgage drawdowns compared to less than 1% in 2020. At the same time, there has been a marked increase in the role of non-household buyers which includes private companies, charitable organisations, and state institutions who now account for 23% of all market transactions, up from 3% in 2010.”

Marius34

schmittel wrote: »

If you think the volume of BTL investors fuelled the bubble in 2006, it's worth bearing in mind the following from the BPFI Housing Market Monitor Q4 2020

No, i'm not saying that BTL alone fuelled bubble, it's massive Credits taken by BTL/FTB/STB.
20% might look as not to high in percentage form, but it's most probably higher in volume (28,000 properties/in 2006), then all none-household buyers all added-up together in current year.
And 23% might look high today, but the same number of sales would be below 10% in 2006 competition

fliball123

Yurt! wrote: »

You're denying the possibility a bubble in a period of extended rock bottom interest rates. These are the exact conditions where asset bubbles form. Take a look around you.

If you look I am saying right now we could quite possible be in a bubble I have said it a few times. I said between 2017 and 2020 we were not as the stats would back it up