Are we really back to this sh*t again?

Joe Hill · 13-02-2017 05:52PM

Elemonator wrote: »

We deserve another crash. The stupidity of the Irish astounds me sometimes.

100 % agreed
Two short planks

ScumLord · 13-02-2017 05:59PM

Yourself isit wrote: »

I don't think you understand the valuers job. He is not working for the purchaser but for the bank. Which is why he won't let you pay 200k more for it than it is worth. So you can't ignore him unless you have all the money and if you did why did you get a mortgage?

Well then its the bank deciding what they want to pay. They'll use a set of rules for determining a value and while it's a more informed value, it's still just what they're willing to pay. That doesn't mean it's the value of the house. In 5 years if the people in the property defaulted on their repayments the bank may find that the value they come up with isn't what the market is willing to pay anymore.

Money and value is a completely made up systems. They're meaningless outside of the human mind. That's why at any point the value of something can go up or down based on things as insignificant as someone's mood.

honey400 · 13-02-2017 06:23PM

If you're playing a poker game and you look around the table and and can't tell who the sucker is, it's you

Guess who are the suckers in this game involving buyers, developers, land owners and the government.

xckjoo · 13-02-2017 06:37PM

ScumLord wrote: »

Well then its the bank deciding what they want to pay. They'll use a set of rules for determining a value and while it's a more informed value, it's still just what they're willing to pay. That doesn't mean it's the value of the house. In 5 years if the people in the property defaulted on their repayments the bank may find that the value they come up with isn't what the market is willing to pay anymore.

Money and value is a completely made up systems. They're meaningless outside of the human mind. That's why at any point the value of something can go up or down based on things as insignificant as someone's mood.

I don't think anybody is disagreeing with you that the value and price of things go up and down, but that doesn't mean that the value of something is whatever you'll get for it.

From the first line of the Wikipedia entry for Economic Bubble: "An economic bubble or asset bubble (sometimes also referred to as a speculative bubble, a market bubble, a price bubble, a financial bubble, a speculative mania, or a balloon) is trade in an asset at a price or price range that strongly deviates from the corresponding asset's intrinsic value."

So there seems to be an acceptance in economic theory that the value of a product and the price people pay for it are not the same thing. Are they wrong?

Yourself isit · 13-02-2017 06:55PM

ScumLord wrote: »

Well then its the bank deciding what they want to pay. They'll use a set of rules for determining a value and while it's a more informed value, it's still just what they're willing to pay. That doesn't mean it's the value of the house. In 5 years if the people in the property defaulted on their repayments the bank may find that the value they come up with isn't what the market is willing to pay anymore.

The fact is that prices change doesnt affect intrinsic value. This is not just economics but how people talk about value in normal conversations. That meal was good value. That car was overvalued.

For some goods - often those which confer status - there isn't a way to work out the intrinsic value, but this is not true of most assets.

Money and value is a completely made up systems. They're meaningless outside of the human mind.

Many things are meaningless outside of human conceptualisation– like mathematics or logic. But I can still think logically. Or solve equations.

That's why at any point the value of something can go up or down based on things as insignificant as someone's mood.

Again you are confusing value with price. That circular argument is both wrong and information free - was property overvalued in 2006? No. Because value is price. Was it undervalued in 2011. No again. Because price is value. Is it overvalued now? We can't say because price and value are the same. It is what it is.

But this isn't how economics or investment works, the whole point of smart investment is to find stocks that are undervalued so that when the price recovers to match the value your are quids in. This strategy has created millionaires.

ScumLord · 13-02-2017 07:01PM

Yourself isit wrote: »

Again you are confusing value with price.

Nobodies explained what this intrinsic value is. What does it mean to the average person? What does a bank mean when it makes a distinction between value and price?

1991 pmaC epacS · 13-02-2017 07:20PM

If you're playing a poker game and you look around the table and and can't tell who the sucker is, it's you

Guess who are the suckers in this game involving buyers, developers, land owners and the government.

I don't like this frequently insulting people for buying houses theme running on this thread.
If people had another option (e.g. renting) then fair enough, by all means question their decision to purchase now but don't insult them. The rental market now is the worst it's ever been in the history of the State. 2-bed apartments renting for €1500-€2000/month depending what part of Dublin. And that's if you can even find one, the stock is practically zero. The standard of rental stock has also gone to the dogs. Dirty walls, carpets, broken appliances, etc. Not to mention the threat of being turfed out if the LL wants to sell. Can you blame anyone for wanting to purchase their property.

What are the alternatives? Rent/purchase in Longford and spend 3 hours a day commuting to Dublin where your job is? The travel costs would probably cancel out any savings made on property. Not to mention spending 15 hours+/week sitting in your car. Rent/purchase in a Dublin council estate with high crime/anti-social behavior rate, where property is cheap? Nobody wants to raise their children in those areas.

My point here is don't be insulting people who are left with no other viable option right now but to purchase and take out a large mortgage.

Grandeeod · 13-02-2017 08:06PM

1991 pmaC epacS wrote: »

I don't like this frequently insulting people for buying houses theme running on this thread.
If people had another option (e.g. renting) then fair enough, by all means question their decision to purchase now but don't insult them. The rental market now is the worst it's ever been in the history of the State. 2-bed apartments renting for €1500-€2000/month depending what part of Dublin. And that's if you can even find one, the stock is practically zero. The standard of rental stock has also gone to the dogs. Dirty walls, carpets, broken appliances, etc. Not to mention the threat of being turfed out if the LL wants to sell. Can you blame anyone for wanting to purchase their property.

What are the alternatives? Rent/purchase in Longford and spend 3 hours a day commuting to Dublin where your job is? The travel costs would probably cancel out any savings made on property. Not to mention spending 15 hours+/week sitting in your car. Rent/purchase in a Dublin council estate with high crime/anti-social behavior rate, where property is cheap? Nobody wants to raise their children in those areas.

My point here is don't be insulting people who are left with no other viable option right now but to purchase and take out a large mortgage.

I can see both sides of the coin here. However I do understand the critical attitude to buyers and how it has developed. One could wonder if potential buyers decided fcuk it, I'm not buying, would things change to any degree.

Ultimately though, the entire housing issue has been guided by Government policy since the 1980s where the responsibilty to provide housing was switched to the private sector and initiatives like the first time buyers grant was introduced along with County Council schemes to buy the council house you were renting. The state stopped building houses and the aspiration to "buy" a home was encouraged. This policy is flawed because it actually creates a number of issues.

1. It prevents people not in a position to afford a mortgage from accessing affordable housing.

2. It increases the states responsibilty to use tax payers money to provide rent supplements in the private rental sector.

3. It increases the demand in the private rental sector overall.

4. It decreases the amount of social housing available.

5. It distorts the purchase market because it has been filled with those who can't buy, might buy and will always buy. Therefore we get investers who buy to let, those with no choice who struggle and those who it would do it anyway and remain largely unaffected. Something similar applies to the rental market where those more suited to social housing are at the mercy of the private rental market and those who wish to avail of Social housing so they can save for a mortgage can't.

Its a complete mess and IMO can only be addressed if the state returns to building large scale social housing and stops interferring in the private housing sector. A scenario where people who cannot and may never afford a mortgage have social housing and where people who are able to save up for a deposit on a house by availing of social housing or affordable private rental will straighten things out. I'm in no doubt whatsoever that once the state stopped buiding social housing, the recipe for our problems was created. This "percentage" of new builds in the private sector that must be social housing, is just an example of expecting the private sector to do a Governments job.

We really did follow the UKs lead in this going all the way back to Thatcher's days.

xckjoo · 13-02-2017 08:09PM

ScumLord wrote: »

Nobodies explained what this intrinsic value is. What does it mean to the average person? What does a bank mean when it makes a distinction between value and price?

Did you click on the link I gave? There's a link to intrinsic value in the first line (the one I quoted).

Unfortunately the average person can't do much about value versus price because that's what the market forces are dictating. I guess the only thing to do is lobby politicians for housing market reform.

The Rape of Lucretia · 13-02-2017 09:01PM

ScumLord wrote: »

What's the difference between price and value? I don't really understand what you're getting at here. Do you mean in the sense your grannies tea pot may have value to you through familiarity but it's worthless to everybody else?

Price is what you will pay today. Value is what the price will be over the longer term. Houses, having long term utility, have a value that is the average of its price over decades.
You may have bought a house in 2007 for a good price of €500,000 because similar houses in the area or at that time were trading for €550,000. But that doesnt mean you got good value, if that time was a market high which swing through the years, but averages out at €400,000.
Your good price was bad value.

The Rape of Lucretia · 13-02-2017 09:09PM

Yourself isit wrote: »

Nope. Banks were the main part of the problem.

I think you are the kind of guy who likes to feel superior to as many people as possible, however limited your analysis is, you will always come back to that self regarding feeling good of being smarter than the masses.

What is your story by the way? Did you buy in the boom? Later ? Or not yet?

It would be nice to see what the superiority is based on.

Not superiority, rather the inferiority of a great proportion of Irish people in managing the affairs of their country compared to citizens of other countries. But as I say, there are worse. The Greeks taking the biscuit at the moment. And the problem in Ireland is not that there arent plenty of capable people, but that the size of the less capable group is unfortunately still very high compared to other countries.

Capt'n Midnight · 13-02-2017 09:43PM

If anyone wants to start queuing early the site at Harold's Cross Greyhound Stadium is now up for grabs.

http://www.independent.ie/sport/greyhounds/igb-confirm-the-closure-of-harolds-cross-greyhound-stadium-35447153.html

all aboard the gravy train

crazy_kenny · 13-02-2017 09:51PM

Planning permission for 300 houses in Waterford city on local paper a couple of weeks ago. First development since the bust so interesting to see how it goes.

Yourself isit · 13-02-2017 09:57PM

The Rape of Lucretia wrote: »

Not superiority, rather the inferiority of a great proportion of Irish people in managing the affairs of their country compared to citizens of other countries. But as I say, there are worse. The Greeks taking the biscuit at the moment. And the problem in Ireland is not that there arent plenty of capable people, but that the size of the less capable group is unfortunately still very high compared to other countries.

What's your feeling about Nigeria?

Actually I think that we get very poor politicians and modern civil servants which doesn't equate with the people I work with in IT who are pretty smart. I wonder if the increase of private sector white collar employment has deprived the public sector of people with ambition and smarts. No more T. K. Whitakers

The Rape of Lucretia · 13-02-2017 10:06PM

Yourself isit wrote: »

What's your feeling about Nigeria?

Actually I think that we get very poor politicians and modern civil servants which doesn't equate with the people I work with in IT who are pretty smart. I wonder if the increase of private sector white collar employment has deprived the public sector of people with ambition and smarts. No more T. K. Whitakers

I dont have one.

We get very poor politicians because of the low level of so many of the people who have a vote and vote for them. But overall, they are in line with the wishes of the Irish people - that is the sad bit.

It has. But it is more the decisions of the people themselves that hold the country back - identifying civil servants or politicians or bankers or developers or whatever, as the group to blame, is only part of the the same failing - the people do not understand that the level of such groups is determined by the level of the people themselves. Weak politicians result from weak voters. Weak banks results from weak bankers. Weak civil servants results from low skill people suckling at the state tit.
The lack of decisive, strong, corrective actions or learning from the experience of the last crash, is dangerously close to repeating itself. This is due to the low sophistication, realism, and capability of a high majority of the Irish. All countries have such people. Ireland just has more than most, and the nation as a whole pays.

darkpagandeath · 13-02-2017 10:16PM

Glenster wrote: »

DONT HAVE KIDS YOU CANT AFFORD.

B*locks... I have never in my life met anyone who planned to have kids. Like you and me we were not planned. Only ones I ever hear about are women with little time left to have them, biological clock ticking.

Grandeeod · 13-02-2017 10:27PM

Capt'n Midnight wrote: »

If anyone wants to start queuing early the site at Harold's Cross Greyhound Stadium is now up for grabs.

http://www.independent.ie/sport/greyhounds/igb-confirm-the-closure-of-harolds-cross-greyhound-stadium-35447153.html

all aboard the gravy train

Great spot for the Council to buy and build, but they won't. It will go the way of so many sites. Privately bought and built on with lots of people rolling up in person or online to attempt to buy. It was an inevitablity that this site would eventually go under the hammer. Its been on the cards for a long time. The crash delayed it. Game on now.

Yourself isit · 14-02-2017 12:31AM

The Rape of Lucretia wrote: »

I dont have one.

We get very poor politicians because of the low level of so many of the people who have a vote and vote for them. But overall, they are in line with the wishes of the Irish people - that is the sad bit.

It has. But it is more the decisions of the people themselves that hold the country back - identifying civil servants or politicians or bankers or developers or whatever, as the group to blame, is only part of the the same failing - the people do not understand that the level of such groups is determined by the level of the people themselves. Weak politicians result from weak voters. Weak banks results from weak bankers. Weak civil servants results from low skill people suckling at the state tit.
The lack of decisive, strong, corrective actions or learning from the experience of the last crash, is dangerously close to repeating itself. This is due to the low sophistication, realism, and capability of a high majority of the Irish. All countries have such people. Ireland just has more than most, and the nation as a whole pays.

So let's be clear - you are saying that in general to find Irish people to be racially inferior or culturally inferior to "other countries".

I dont feel like taking the blame for the incompetence of irelands ruling classes - I'd be inclined to blame the ruling classes.

The Rape of Lucretia · 14-02-2017 12:39AM

Yourself isit wrote: »

So let's be clear - you are saying that in general to find Irish people to be racially inferior or culturally inferior to "other countries".

I dont feel like taking the blame for the incompetence of irelands ruling classes - I'd be inclined to blame the ruling classes.

"ruling classes" ?!?!?!?

You have just picked some other mythical group to blame !

Ireland is a democracy. If you dont like the way it is run, then you, and your countrymen, are to blame.

The Rape of Lucretia · 14-02-2017 12:41AM

Yourself isit wrote: »

So let's be clear - you are saying that in general to find Irish people to be racially inferior or culturally inferior to "other countries".

Culturally inferior yes. It is self evident.
Certainly nothing racist though. Its history has brought it to that situation. I would even be slow to be too critical of its people in that context, but the fact remains, that other comparable countries are significantly better at managing themselves.

Arcade_Tryer · 14-02-2017 01:00AM

The Rape of Lucretia wrote: »

"ruling classes" ?!?!?!?

You have just picked some other mythical group to blame !

Ireland is a democracy. If you dont like the way it is run, then you, and your countrymen, are to blame.

While I'd agree that the "ruling class" in a democracy is a reflection of the people, I'd be weary of saying they are a reflection of all the people. For example, I voted People Before Profit in the last General Election, yet my constituency voted overwhelmingly Fine Gael. Am I to blame for FG being in power and their respective policies?

NIMAN · 14-02-2017 01:53AM

darkpagandeath wrote: »

B*locks... I have never in my life met anyone who planned to have kids. .

Eh?

We did.

Yourself isit · 14-02-2017 02:07AM

The Rape of Lucretia wrote: »

"ruling classes" ?!?!?!?

You have just picked some other mythical group to blame !

Ireland is a democracy. If you dont like the way it is run, then you, and your countrymen, are to blame.

Of course democracies have ruling classes, most of them unelected. Like the bankers (or indeed their best buddies the regulators).

You never answered what you did in the boom btw, buy, rent or what?

Yourself isit · 14-02-2017 02:10AM

The Rape of Lucretia wrote: »

Culturally inferior yes. It is self evident.
Certainly nothing racist though. Its history has brought it to that situation. I would even be slow to be too critical of its people in that context, but the fact remains, that other comparable countries are significantly better at managing themselves.

Comparable countries being what or where exactly? Are you comparing Ireland to a small subset of Northern European countries, or what exactly.

PARlance · 14-02-2017 02:13AM

youcancallmeal wrote: »

370k mortgage would be about €1650 per month from say KBC for example with 3.5% interest

And these poor sods are probably paying in excess of that for a crappy two bed. I'm not surprised to hear of people queuing up with the madness that's going on in the rental market.

Yourself isit · 14-02-2017 02:15AM

Arcade_Tryer wrote: »

While I'd agree that the "ruling class" in a democracy is a reflection of the people, I'd be weary of saying they are a reflection of all the people. For example, I voted People Before Profit in the last General Election, yet my constituency voted overwhelmingly Fine Gael. Am I to blame for FG being in power and their respective policies?

Neither PBP nor FG are the ruling classes. In crony capitalist societies the guys handing over the brown bags are the real ruling classes and it doesnt have to be illegal either – campaign finance in the US for instance.

Take the decision to grant aid the first time buyers (and getting back to the thread). You need junior cert economics to know that money goes to developers not buyers. It benefits the few. Penalises the many. Nothing to do with what the electorate want or need.

darkpagandeath · 14-02-2017 02:40AM

NIMAN wrote: »

Eh?

We did.

Have I met you ?

ChikiChiki · 14-02-2017 02:52AM

darkpagandeath wrote: »

B*locks... I have never in my life met anyone who planned to have kids. Like you and me we were not planned. Only ones I ever hear about are women with little time left to have them, biological clock ticking.

I disagree. Times have changed as nowadays both spouses need to be working to pay the bills in a very expensive society. Nowadays people weigh up a lot more whether they can afford kids. Childcare costs alone are astronomical when you consider a mortgage and all the bills alongside that. Its a sad sign of the times.

darkpagandeath · 14-02-2017 02:55AM

ChikiChiki wrote: »

I disagree. Times have changed as nowadays both spouses need to be working to pay the bills in a very expensive society. Nowadays people weigh up a lot more whether they can afford kids. Childcare costs alone are astronomical when you consider a mortgage and all the bills alongside that. Its a sad sign of the times.

It's personal experience. When ever the conversation turned to well was the child planned you get "What do you think". Not that it's not a blessing to them. You are putting to much stock in Professionals Planning children and then Ending up with a child unexpectedly.

sbsquarepants · 14-02-2017 09:22AM

Yourself isit wrote: »

You weren't replying go me initially but let's discuss your points.

The valuer (and you) are saying that the price is the value and both are what ever is offered for the house. However if I am looking for a 400k mortgage on a house that I am personally valuing and prepared to pay 600k because it's of sentimental value to me (that word again) but the typical house in the area sells at 400k then the valuer is not doing his job of he agrees with my personal valuation. He's allowing me to get a loan based on false collateral and I'm getting a 100% LTV (effectively the deposit has disappeared) rather than 66%. Which should affect repayments.

His job is to not allow that to happen. The guy you actually replied to said that when he was buying abroad the valuer there valued the house at 20k less than the agreed purchase –which probably isn't enough to stop the loan. The Irish valuer just said "whatever price you pay is the value". That's the sentiment that in part drove the boom

You are missing the point entirely.

The typical house in the area sells for 400k - Why is that?

Did some white coated "valuer" turn up with the latest cutting edge valueometer, take a few readings, do a few calculations and then somehow tease out this number that was ingrained in the fabric of the buildings at the molecular level? - No, he didn't.
The house is "worth" 400k - because realistically that's what most people who would look to buy it are willing and able to pay for it. We're back to the tall part of the bell curve again. You and your 600k are an outlier - the bank don't like you.
Should you come upon hard times and not be able to pay back the 600k - the bank will not be able to recoup that money because the average buyer will say no, i'll only pay 400k. If you have 500k of your own and want to borrow 100k from the bank, they'll deal with you, "intrinsic value" be damned

ScumLord wrote: »

Nobodies explained what this intrinsic value is. What does it mean to the average person? What does a bank mean when it makes a distinction between value and price?

If the value was intrinsic - how could it be so changeable.
Is the damn house changing from day to day or year to year? Has the average house doubled in size from 5 or 6 years ago, moved to a nicer neighbourhood, what?

Are we really back to this sh*t again?

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