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Do you think property will crash again?

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    #212
    smurgen
    Registered Users Posts: 6,933 ✭✭✭smurgen


    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.


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    #213
    space_tourist
    Site Banned Posts: 9 ✭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


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    #214
    smurgen
    Registered Users Posts: 6,933 ✭✭✭smurgen


    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.


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    #215
    Villa05
    Registered Users Posts: 4,513 ✭✭✭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


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    #216
    fliball123
    Registered Users Posts: 7,445 ✭✭✭fliball123


    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?


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    #217
    fliball123
    Registered Users Posts: 7,445 ✭✭✭fliball123


    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


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    #218
    CalRobert
    Registered Users Posts: 133 ✭✭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.


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    #219
    drillyeye
    Registered Users Posts: 408 ✭✭drillyeye


    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".


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    #220
    fliball123
    Registered Users Posts: 7,445 ✭✭✭fliball123


    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?


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    #221
    drillyeye
    Registered Users Posts: 408 ✭✭drillyeye


    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.


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    #222
    fliball123
    Registered Users Posts: 7,445 ✭✭✭fliball123


    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?


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    #223
    drillyeye
    Registered Users Posts: 408 ✭✭drillyeye


    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!


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    #224
    drillyeye
    Registered Users Posts: 408 ✭✭drillyeye


    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"


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    #225
    fliball123
    Registered Users Posts: 7,445 ✭✭✭fliball123


    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


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    #226
    CruelCoin
    Registered Users Posts: 4,468 ✭✭✭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!


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    #227
    CruelCoin
    Registered Users Posts: 4,468 ✭✭✭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).


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    #228
    4ensic15
    Banned (with Prison Access) Posts: 4,691 ✭✭✭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.


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    #229
    smurgen
    Registered Users Posts: 6,933 ✭✭✭smurgen


    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.


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    #230
    Graham
    Moderators, Society & Culture Moderators Posts: 17,642 Mod ✭✭✭✭Graham


    smurgen wrote: »
    Cheaper rental.

    Good luck finding those cheaper rentals in areas where people want/need to live.

    Whichever way you look at it rental properties and rental prices are subject to the same supply-constrained/high-priced market that potential home-buyers are facing.


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    #231
    Sarn
    Registered Users Posts: 3,060 ✭✭✭Sarn


    My take on it is that the fundamentals point to continued increases over the next few years.

    At the moment demand is increasing far faster than supply. It will take a few years for supply to catch up. Lending for the majority is limited to 3.5 times salaries which is far more responsible. However, I have a bad feeling that the central bank will increase that to 4 times in November which will further boost prices.

    The reality now is that most people have to postpone buying a lot longer than expected in order to build a deposit. That is especially the case when a single person is looking to buy. Back in 2003-2006 a lot of my friends were able to buy on their own due to the massive mortgages that they could get with very little deposit. Getting 10 times your salary really helped to push up prices.

    While external factors could negatively affect house prices, I do not anticipate the same level of falls as seen previously, based on current factors.


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    #232
    Creative83
    Closed Accounts Posts: 353 ✭✭Creative83


    "Do you think property will crash again"

    Of course it will, only a matter of time. Current prices are grossly inflated and unsustainable.

    A tsunami is approaching, to think otherwise is naive.


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    #233
    Graham
    Moderators, Society & Culture Moderators Posts: 17,642 Mod ✭✭✭✭Graham


    Creative83 wrote: »
    "Do you think property will crash again"

    Of course it will, only a matter of time. Current prices are grossly inflated and unsustainable.

    A tsunami is approaching, to think otherwise is naive.

    I think that's far too simplistic to be honest. Prices for most things don't just drop because they are expensive.


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    #234
    Creative83
    Closed Accounts Posts: 353 ✭✭Creative83


    Graham wrote: »
    I think that's far too simplistic to be honest. Prices for most things don't just drop because they are expensive.

    A whiff of an economic downturn in this country and the house of cards will come crumbling down again


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    #235
    crazy_larry
    Site Banned Posts: 4 ✭crazy_larry


    Creative83 wrote: »
    A whiff of an economic downturn in this country and the house of cards will come crumbling down again

    could be said about any western economy

    australia has seen a quarter of a century of house price growth , new zealand has seen nearly twenty


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    #236
    NIMAN
    Registered Users Posts: 33,053 ✭✭✭✭NIMAN


    Creative83 wrote: »
    A whiff of an economic downturn in this country and the house of cards will come crumbling down again

    A downturn in house prices, or crash if you want to call it that, will definitely happen some time in the future.

    I just wish I knew exactly when it was, so I could sell just before it happens.


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    #237
    Idbatterim
    Registered Users Posts: 17,839 ✭✭✭✭Idbatterim


    The central bank should not raise the loan to income ration. It will put more pressure on those snakes to reduce build costs...


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    #238
    Pawwed Rig
    Moderators, Category Moderators, Home & Garden Moderators, Recreation & Hobbies Moderators, Social & Fun Moderators Posts: 22,297 CMod ✭✭✭✭Pawwed Rig


    Graham wrote: »
    Good luck finding those cheaper rentals in areas where people want/need to live.

    Whichever way you look at it rental properties and rental prices are subject to the same supply-constrained/high-priced market that potential home-buyers are facing.

    Not really. During the last boom people were commuting long distances from places like Port Laoise and Kinnegad. Rentals there are still cheap as chips (as are houses).
    Seems that people now are less willing to do these long commutes.


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    #239
    Idbatterim
    Registered Users Posts: 17,839 ✭✭✭✭Idbatterim


    Pawwed Rig wrote: »
    Not really. During the last boom people were commuting long distances from places like Port Laoise and Kinnegad. Rentals there are still cheap as chips (as are houses).
    Seems that people now are less willing to do these long commutes.

    the commutes are a joke and you would question the savings if they were using an ICE car, but with electric. The cost of the commute, will be virtually nothing...


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    #240
    4ensic15
    Banned (with Prison Access) Posts: 4,691 ✭✭✭4ensic15


    Pawwed Rig wrote: »
    Not really. During the last boom people were commuting long distances from places like Port Laoise and Kinnegad. Rentals there are still cheap as chips (as are houses).
    Seems that people now are less willing to do these long commutes.

    Fuel cost a lot less during the last boom. There are now more difficulties with traffic and parking than there were before! the economics and practicality of commuting have changed.


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    #241
    Pawwed Rig
    Moderators, Category Moderators, Home & Garden Moderators, Recreation & Hobbies Moderators, Social & Fun Moderators Posts: 22,297 CMod ✭✭✭✭Pawwed Rig


    Not doubting it but the house at any cost/ladder property mentality does not seen to be there this time around so maybe people are more content to rent.


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