Do you think property will crash again?

fliball123 wrote: »

smurgen wrote: »

Rent is out of line but you can correct that by leaving your rental property.where is the pressure release valve on a house?post the keys to the bank?

And go where the street?

Cheaper rental.i don't think you're open to discussion.irrational championing of property.

4ensic15

fliball123 wrote: »

Ireland is a small country and there is a finite amount of land in the country. Prices will rise for a long time here.

Whatever the cause of a rise in prices, shortage of land is not one of them. Ireland has a very low density of population, relative to other European countries.

CruelCoin

fliball123 wrote: »

I dont think rents or house prices will continue to go up at the rate they are. At the moment I think they are correcting the bust where prices went way below what they should of been. A simple way to calculate what a property is worth is what it would yield in rent for the lifetime of a mortgage 15/20 years.

The best way to determine the minimum value of a home is to work out its build cost.
The last three years only returned us to the build cost and the true minimum value.
We've only had real growth in prices in the last year or so (outside of dublin at least).

CruelCoin

fret_wimp2 wrote: »

Eurostat says Mean ireland earings per annum (for 2014) is 48k. that seems like quite a big difference from the CSO number of 37k

The CSO figure is an average figure. Not the same as Mean.

That said, a mean of 48k is quite high!

drillyeye wrote: »

I don't have all day to point out the obvious, so I'll include a few straight off the top of my head.

Does the fact that the market precludes single people make sense for a functioning society? Does it make sense that working 40 hours a week could mean 20+ of those hours goes into a landlords/banks pocket, essentially negating the purpose of work (progress)?

Can rents keep rising indefinitely, can prices keep rising indefinitely? Can members of society put off having children indefinitely without a near-lifetime debt put upon them?

Does the increasing concentration of employment opportunity in cities make sense, when the reward of said employment is decreasing due to housing costs? Do the rising numbers of homeless mean nothing?

I'll just stop there, because the amount of fundamentally flawed situations is innumerable.

The whole "thing" is entirely based on "me" and "now". There is no regard for the future whatsoever, for all the neverending guff from governments, there is NO plan in place. It takes only a peek to realise that it doesn't add up in any positive way.

You can keep poking for answers that literally nobody can provide, because predicting the future is ALL guesswork. The fact that someone cannot provide you with a fact does not mean your guess is therefore correct.

Look at san Francisco, berlin, Dublin, paris, Glasgow......they are all suffering under the exact same circumstances. Look for similar message boards in these areas, and see people bemoan the exact same things, such as lack of progress, no future, cant start a family, cant get work anywhere else, mortgages through the roof, rents through the roof..... Anybody who looks at the fundamentals of sustainability in these places, and then comes to the conclusion that "its grand" and will continue.....fair play to them!

OK first off your first paragraph there are over 11k properties available for sale for 200k or less in this country. The mean wage is 40k. (quick search on daft) There is property out there available but the problem is that some people are not prepared to start out with something a bit further out and commute in.

As for rents..look at other cities, look at London, New York, Paris and other major hubs and before the sh1t of Dublin should not be compared to these, the simple fact is Dublin is now a major attraction for MNCs, foreign investment aswell as Software and Pharma and will be the the only English speaking Capital in the EU once England go so it is now up there or very close.

As for what you get in your pocket sure half of any money earned over the AIW is stolen back by the government and any money on rent half of that is given to the government and taken away from the landlord. If we take your equation into account why would anyone work when the gov take 51% of your every euro earned over the AIW?

I dont think rents or house prices will continue to go up at the rate they are. At the moment I think they are correcting the bust where prices went way below what they should of been. A simple way to calculate what a property is worth is what it would yield in rent for the lifetime of a mortgage 15/20 years.

I agree there are flaws but they have always been there and are not just in Dublin or Ireland.

But you are right it it guess work but you can try and put some factors in such as:

Supply continues to be low building is not even at the level it should be if demand was normal and not so high

Demand is increasing year on year and the limited supply is being snapped up

We have the highest birth rate in the OCED these have to be housed)

We are living longer meaning people need to be housed longer.

We have nett immigration coming into the country with immigrants coming in from non traditional areas like south Americans coming here to learn English over the last number of years. These all need to be housed

Renting is now more expensive than buying in a lot of cases - Making it more attractive for buy to let setups meaning less supply.

Brexit means that Dublin is possible the most attractive base for foreign MNCs to set up in Europe. The workers here have to be housed

Competition is now global, foreigners , vulture funds, pension funds are now a big part of the buying market further depleting supply

Last figures we have over 100k people on the housing list - these need to be housed further decreasing supply

Ireland is a small country and there is a finite amount of land in the country. Prices will rise for a long time here.

Even if there is a crash like 08 the mortgage holders that took loans out since the crash will have more skin in the game due to the 80/20 so there will not be a lot of property going on the market at the same time.

Now I am not telling anyone to buy or sell or rent. Everyone has there own scenario where they will know which way is best for them

I will add one very important element.

It would be all well and good if these things were simply "status quo". But the fact is that these things have only one output, and that is to borrow/spend yet more and more money.

Credit.

Credit leveraged against an improbable model of sustainability. Doesn't make any sense. And whether banks here have delayed the inevitable or not, the inevitable remains. And therefore I return to "sooner rather than later"

fliball123 wrote: »

Where are you getting that the fundamentals are not sound how does or are you comparing the irish property market to some where else?

I don't have all day to point out the obvious, so I'll include a few straight off the top of my head.

Does the fact that the market precludes single people make sense for a functioning society? Does it make sense that working 40 hours a week could mean 20+ of those hours goes into a landlords/banks pocket, essentially negating the purpose of work (progress)?

Can rents keep rising indefinitely, can prices keep rising indefinitely? Can members of society put off having children indefinitely without a near-lifetime debt put upon them?

Does the increasing concentration of employment opportunity in cities make sense, when the reward of said employment is decreasing due to housing costs? Do the rising numbers of homeless mean nothing?

I'll just stop there, because the amount of fundamentally flawed situations is innumerable.

The whole "thing" is entirely based on "me" and "now". There is no regard for the future whatsoever, for all the neverending guff from governments, there is NO plan in place. It takes only a peek to realise that it doesn't add up in any positive way.

You can keep poking for answers that literally nobody can provide, because predicting the future is ALL guesswork. The fact that someone cannot provide you with a fact does not mean your guess is therefore correct.

Look at san Francisco, berlin, Dublin, paris, Glasgow......they are all suffering under the exact same circumstances. Look for similar message boards in these areas, and see people bemoan the exact same things, such as lack of progress, no future, cant start a family, cant get work anywhere else, mortgages through the roof, rents through the roof..... Anybody who looks at the fundamentals of sustainability in these places, and then comes to the conclusion that "its grand" and will continue.....fair play to them!

drillyeye wrote: »

The point of my post was that people are looking for triggers, and that's like looking for a needle in a haystack.

You need only look at the fundamentals. Are the fundamentals sound in the irish property market, do they make sense, is it sustainable, or practical and so on?

Its a resounding "no" to good fundamentals being in place.

So......assuming maximum (or near to maximum) exposure due to extremely poor fundamentals.....I simply make a guess that ANYTHING can cause a disastrous domino effect.

It could be brexit, just as much as it could also be a new disease that devastates banana crops in south America and tips the first domino!

Basically, if everything is primed (or near primed) to collapse, then you simply have to err on the side of probability, and probability would be "sooner rather than later".

I pick 3 years, without going into nitty gritty detail (which, as I said, is a mistake to focus upon). A guess that sides with the odds.

Where are you getting that the fundamentals are not sound or are you comparing the irish property market to some where else?

fliball123 wrote: »

Where are you getting 3 years from what info is there out there that points to a crash in 3 years?

The point of my post was that people are looking for triggers, and that's like looking for a needle in a haystack.

You need only look at the fundamentals. Are the fundamentals sound in the irish property market, do they make sense, is it sustainable, or practical and so on?

Its a resounding "no" to good fundamentals being in place.

So......assuming maximum (or near to maximum) exposure due to extremely poor fundamentals.....I simply make a guess that ANYTHING can cause a disastrous domino effect.

It could be brexit, just as much as it could also be a new disease that devastates banana crops in south America and tips the first domino!

Basically, if everything is primed (or near primed) to collapse, then you simply have to err on the side of probability, and probability would be "sooner rather than later".

I pick 3 years, without going into nitty gritty detail (which, as I said, is a mistake to focus upon). A guess that sides with the odds.

drillyeye wrote: »

Vulture funds, Brexit, Trump, protectionism, nationalism, globalisation, immigration, multinational companies, corporate tax rates, thousands upon thousands of mortgages still in arrears from last crash, stupefying rent prices....and more and more.

Its 100% about vulnerability, and we are reaching saturation point of exposure.

Is it going to cost 1 million euros average (adjusted) to buy a 1 bed apartment in Dublin in 2025? Of course not, it quite literally cannot happen.

Will you be paying 4000 a month rent for a 1 bed apartment in Dublin in 2025? Of course not, it simply cannot happen either.

Can the economy lurch on without any increases? Of course, but only at maximum exposure to risk, an "any second now" kind of situation.

We are practically at bursting point already, and that's all you need to know. What pops the bubble is essentially irrelevant, and when it happens its going to be much worse than before simply based on everything in plain sight. My "money" is on a crash within 3 years (bearing in mind that the last one took less than 9 months to kick off)

Don't be the "greater fool".

Where are you getting 3 years from what info is there out there that points to a crash in 3 years?

Vulture funds, Brexit, Trump, protectionism, nationalism, globalisation, immigration, multinational companies, corporate tax rates, thousands upon thousands of mortgages still in arrears from last crash, stupefying rent prices....and more and more.

Its 100% about vulnerability, and we are reaching saturation point of exposure.

Is it going to cost 1 million euros average (adjusted) to buy a 1 bed apartment in Dublin in 2025? Of course not, it quite literally cannot happen.

Will you be paying 4000 a month rent for a 1 bed apartment in Dublin in 2025? Of course not, it simply cannot happen either.

Can the economy lurch on without any increases? Of course, but only at maximum exposure to risk, an "any second now" kind of situation.

We are practically at bursting point already, and that's all you need to know. What pops the bubble is essentially irrelevant, and when it happens its going to be much worse than before simply based on everything in plain sight. My "money" is on a crash within 3 years (bearing in mind that the last one took less than 9 months to kick off)

Don't be the "greater fool".

CalRobert

space_tourist wrote: »

if it came around more often , the world would fall to pieces

Of course, this presupposes that we've all agreed the world won't fall to pieces.

Hell, when north strand and east wall are underwater (literally) it will have an interesting effect on the property market, to say the least.

4ensic15 wrote: »

Things can, and do, change!

True but brexit I reckon will push more poeple toward Dublin, people who were going to the UK will definitely reconsider and will see Dublin as a very attractive place to come

smurgen wrote: »

Rent is out of line but you can correct that by leaving your rental property.where is the pressure release valve on a house?post the keys to the bank?

And go where the street?

Villa05

smurgen wrote:

Rent is out of line but you can correct that by leaving your rental property.where is the pressure release valve on a house?post the keys to the bank?

The current situation allows you to stay in the home in many cases where nothing is being paid for years. This lunacy will feed into the next crash making it worse than it would ordinarily be.

In fact most measures taken to manage the property market are assisting in creating a bubble and maximising the damage when it bursts

space_tourist wrote: »

smurgen wrote: »

How is the irish stock market undervalued?do you fancy a punt on irish banks? I have some magic beans for you to buy if you do. A big factor that is coming down the line is the slowing of the chinese economy.it has been growing at 10% for the past 30 years.the end of last year it starting sluttering.it's only a matter of time before the oz economy implodes as a result.there will be a ripple effect on china's slow down internationally.
The japanese economy is also not going to provide growth,the population decline there will see to that.
Lets face it,central banks have thrown out all the tricks they could following the 2008 crises with quantative easing and low interest rates.everything rose and economies rose. However if another crises comes will they be able to do the same again? and now that interest rates are set to rise will companies and demand provide real growth to economies?i really cannot see wher future growth can come from.

irish bank stocks are dirt cheap but then again european bank shares are dirt cheap ( doesnt mean id buy them ) , irish banks are making huge profits due to the obscene interest rates they charge compared to other eurozone banks

there is always and has always been a potential major crisis around the corner , the kind of one which broke in 2008 comes around no more than twice each century however , if it came around more often , the world would fall to pieces

Irish banks could have and should have their wings clipped along with the rest of the banks operating here after the tracker mortgage scandal.i wouldn't invest in them on an ethical basis and i don't think they'll be as lucrative in the future.i basically think they're a major part of problem that is the pyramid scheme of the irish property market.

space_tourist

smurgen wrote: »

How is the irish stock market undervalued?do you fancy a punt on irish banks? I have some magic beans for you to buy if you do. A big factor that is coming down the line is the slowing of the chinese economy.it has been growing at 10% for the past 30 years.the end of last year it starting sluttering.it's only a matter of time before the oz economy implodes as a result.there will be a ripple effect on china's slow down internationally.
The japanese economy is also not going to provide growth,the population decline there will see to that.
Lets face it,central banks have thrown out all the tricks they could following the 2008 crises with quantative easing and low interest rates.everything rose and economies rose. However if another crises comes will they be able to do the same again? and now that interest rates are set to rise will companies and demand provide real growth to economies?i really cannot see wher future growth can come from.

irish bank stocks are dirt cheap but then again european bank shares are dirt cheap ( doesnt mean id buy them ) , irish banks are making huge profits due to the obscene interest rates they charge compared to other eurozone banks

there is always and has always been a potential major crisis around the corner , the kind of one which broke in 2008 comes around no more than twice each century however , if it came around more often , the world would fall to pieces

space_tourist wrote: »

smurgen wrote: »

I personally believe the world in general is in for an economic adjustment.i believe equities and the stock market in general are over valued currently and that the likes of facebook and google are in for a cut in value in the next 3 years or so.this will mean tightening of the belts in many of the multinationals in ireland and like have a knock on effect on the sustainablility of workers paying massive mortages and rents. Anyone thinking Ireland is insulated from economic crashes now or has learned any lessons from the last crash are living in cuckoo land. I have the ability to buy now but have chosen not to.i belive renting is more expensive now but i do not fancy getting up to my neck in debt given an uncertain future wage rate.

only one equity market globally ( im talking major markets ) is over valued or even has had a very strong run and thats the u.s market

japans stock market today is still about 60% below where it was in 1989
most european markets are not much higher than they were in about the year 2000 , germany is the one exception , the irish stock market is still at least 20% below its 2007 all time high

people can convince themselves of impending doom

australia has had non stop property price increases for twenty five years straight , our crash here was incredibly large and we overshot the bottom , increases may significantly moderate but there is no inherent reason to believe we have another crash like the last one , we may not have one like it again for centuries , it was that big !

How is the irish stock market undervalued?do you fancy a punt on irish banks? I have some magic beans for you to buy if you do. A big factor that is coming down the line is the slowing of the chinese economy.it has been growing at 10% for the past 30 years.the end of last year it starting sluttering.it's only a matter of time before the oz economy implodes as a result.there will be a ripple effect on china's slow down internationally.
The japanese economy is also not going to provide growth,the population decline there will see to that.
Lets face it,central banks have thrown out all the tricks they could following the 2008 crises with quantative easing and low interest rates.everything rose and economies rose. However if another crises comes will they be able to do the same again? and now that interest rates are set to rise will companies and demand provide real growth to economies?i really cannot see wher future growth can come from.

space_tourist

Bob24 wrote: »

Yes socks are overvalued and yes ireland if very dependant in the state of the global economy.

But would correction on the stock market cause a bit economic crisis? I don’t know.

stock market bear markets happen far more often than sever property market downturns or crashes

space_tourist

smurgen wrote: »

I personally believe the world in general is in for an economic adjustment.i believe equities and the stock market in general are over valued currently and that the likes of facebook and google are in for a cut in value in the next 3 years or so.this will mean tightening of the belts in many of the multinationals in ireland and like have a knock on effect on the sustainablility of workers paying massive mortages and rents. Anyone thinking Ireland is insulated from economic crashes now or has learned any lessons from the last crash are living in cuckoo land. I have the ability to buy now but have chosen not to.i belive renting is more expensive now but i do not fancy getting up to my neck in debt given an uncertain future wage rate.

only one equity market globally ( im talking major markets ) is over valued or even has had a very strong run and thats the u.s market

japans stock market today is still about 60% below where it was in 1989
most european markets are not much higher than they were in about the year 2000 , germany is the one exception , the irish stock market is still at least 20% below its 2007 all time high

people can convince themselves of impending doom

australia has had non stop property price increases for twenty five years straight , our crash here was incredibly large and we overshot the bottom , increases may significantly moderate but there is no inherent reason to believe we have another crash like the last one , we may not have one like it again for centuries , it was that big !

4ensic15

fliball123 wrote: »

We are currently getting more immigrants in then leaving

Things can, and do, change!

tommythecat

smurgen wrote: »

Rent is out of line but you can correct that by leaving your rental property.where is the pressure release valve on a house?post the keys to the bank?

And go where? You are going to have to pay rent somewhere? And if you think rents will plummet in larger cities like Dublin if the economy collapses then you are deluding yourself. They only came down slightly following the last crash. Rent/Mortgage, you are always going to have to pay one of them. Might as well be a mortgage if it suits your needs. If you pay a good cash sum off your mortgage at the start then the risk of negative equity will be minimal.

theboringfox

UsBus wrote: »

This sums me up, split with my missus last year. I was looking at buying a house for us for the next stage of my life. Now I'm 40 and sharing with two 20 somethings. No chance of buying now. Things are getting steadily worse in Ireland.

Right now I plan on pissing away what little savings I have made over the next year or two and then it's check out time for me..No point fighting a losing battle here anymore. This country would depress you as you get older.

That sounds rough. Sorry to hear it. Hope things work out in end for you.

SNNUS

UsBus wrote: »

This sums me up, split with my missus last year. I was looking at buying a house for us for the next stage of my life. Now I'm 40 and sharing with two 20 somethings. No chance of buying now. Things are getting steadily worse in Ireland.

Right now I plan on pissing away what little savings I have made over the next year or two and then it's check out time for me..No point fighting a losing battle here anymore. This country would depress you as you get older.

So hard to get a place on your own. The good time to buy is when you can buy. Speculate for too long like I did and my 30's flew by..

fliball123 wrote: »

smurgen wrote: »

If the arse falls out of the economy you can walk away from your rental.factor in the lifetime value of a mortgage and i don't see the risk outweighing the benefit currently.the total cost of a house and mortgage is out of line with wages as it stands.if wages are cut in the next few years that makes it even worse.it's no skin off my nose but i'm happy to pay over the odds for rent if it means i'm not facing negative equity and mortgage default in a few years.seems to me like people are hoping for a bubble to inflate and drowning out any counter views.

And if the arse doesnt you will continue to pay more in rent then a mortgage and not own anything when you retire. Rent is also out of line with wage. But then again there is a myriad of places on earth where a mortgage/rent is out of line with wage its not just Dublin or the outskirts. Every argument you have can be negated all factors point to wages going up. Its already started in the public sector.

I am not telling you or anyone to buy or sell or rent. All I am saying is all the factors I see and I outlined about 10 a few pages back that point to house prices rising for at least another 10 years if not longer.

Rent is out of line but you can correct that by leaving your rental property.where is the pressure release valve on a house?post the keys to the bank?

UsBus

Didactic Ninja wrote: »

Things are so bad that a simple relationship breakdown can see you lose everything ( even outside a marriage) . You breakup with you missus and you are back in your mothers spare room or couch surfing .

Irish society is designed to "couple up". you are ****ed if you are on your own.

This sums me up, split with my missus last year. I was looking at buying a house for us for the next stage of my life. Now I'm 40 and sharing with two 20 somethings. No chance of buying now. Things are getting steadily worse in Ireland.

Right now I plan on pissing away what little savings I have made over the next year or two and then it's check out time for me..No point fighting a losing battle here anymore. This country would depress you as you get older.

Claw Hammer wrote: »

It happens from time to time in the economic cycle. Higher interest rates will cause a drop in prices, net emigration may also cause a fall in prices.

We are currently getting more immigrants in then leaving