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Do you think property will crash again?

LambDev

I was reading the thread on prices in Ashbourne increasing by 55k, and the comments were interesting. eg ("Similar happened in 07", "Here we go again").

During the last boom and subsequent crash, I was only a child/young teenager. I'm 22 now, but I didn't really experience the last one.

It's not going to happen soon, but does anyone predict a crash long term, and what market conditions will cause it?

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Graham

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.

emphasis added

Graham wrote: »

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

Pawwed Rig

Graham wrote: »

emphasis added

That is the point I was making. People don't want the inconvenience of a long commute and seem content to pay massive rents rather than a starter home further away where you could trade up in a few years.
Give me a decent motorbike for example and Newbridge is suddenly not that far from Dublin cc.
People don't seem willing to take a bit of hardship like the previous generation.

[Deleted User]

Pawwed Rig wrote: »

That is the point I was making. People don't want the inconvenience of a long commute and seem content to pay massive rents rather than a starter home further away where you could trade up in a few years.
Give me a decent motorbike for example and Newbridge is suddenly not that far from Dublin cc.
People don't seem willing to take a bit of hardship like the previous generation.

people remember what happened "the previous generation" nb ten years is not a generation

Pawwed Rig

[Deleted User] wrote: »

nb ten years is not a generation

In your opinion

[Deleted User]

Pawwed Rig wrote: »

In your opinion

no

it is a term with a meaning. i dont know many humans in our society who have offspring at ten years of age so i highly doubt theres a case to be made here.

oceanman

Idbatterim wrote: »

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...

don't forget also you are adding ten maybe twenty hours to your working week by commuting....not sure many people want to do that anymore.

Bob24

Weepsie wrote: »

Not sure everyone getting a motorbike will help either.

Yes based experience in other European cities, if too many people start commuting from far away requiring their own vehicle, it then leads to traffic gridlock and air/noise pollution in the city ... and the long term effect is for municipal authorities to find direct or indirect ways to force those vehicles away from the city. Which is good for city residents but a huge pain for these commuters who then have to endure both a commute with their car/motorbike to reach the edge of the city’s public transport network *and* a commute on than network (very time consuming and expensive).

Pawwed Rig

[Deleted User] wrote: »

no

it is a term with a meaning. i dont know many humans in our society who have offspring at ten years of age so i highly doubt theres a case to be made here.

sigh boards is tedious sometimes ........

Eric Cartman

oceanman wrote: »

don't forget also you are adding ten maybe twenty hours to your working week by commuting....not sure many people want to do that anymore.

young people not driving is also becoming a massive issue for car manufacturers, many actually have to live in Dublin and suburbs for the pure reason that they cannot operate a car, pushing rents ever higher.

Cally Caleigh

I can't see property here 'crashing' any time in the next decade anyway.
Something worrying me is that even with strict central bank lending rules regarding deposit and 3.5 LTI ratios the prices in Dublin are almost at 2007 levels.
Scary to think what would happen house prices if those rules are relaxed over the coming years.

Bob24

Cally Caleigh wrote: »

Scary to think what would happen house prices if those rules are relaxed over the coming years.

Indeed. I am actually not fully sure how to explain it tbh.

Eric Cartman

Cally Caleigh wrote: »

I can't see property here 'crashing' any time in the next decade anyway.
Something worrying me is that even with strict central bank lending rules regarding deposit and 3.5 LTI ratios the prices in Dublin are almost at 2007 levels.
Scary to think what would happen house prices if those rules are relaxed over the coming years.

yeah, we need more houses to buy and to build higher, all of the capitol controls in place are fine.

fliball123

CruelCoin wrote: »

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).

Your logic is flawed as an example if someone built a mansion in the back arse of Leitrim and then built the exact same structure up on of a hill there in Killiney would they cost the same to buy????

fliball123

4ensic15 wrote: »

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.

Low density yes I agree but this is very much offset by the restrictions of height for building and the hunger for one off builds on half an acre is rampant

fliball123

smurgen wrote: »

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

Ok well go and ask your landlord to drop your rent and tell me how that pans out for you?

fliball123

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.

Once again can you supply any evidence of this or is this just your gut talking?

Wanderer78

fliball123 wrote:

Once again can you supply any evidence of this or is this just your gut talking?

I'd actually agree with their statement, I suspect we have become to believe things such as 'credit crisis' can be the only triggers of a crash in housing prices, we are leading ourselves to believe that we have more or less solved these type of issues, but we actually have no proof of this. Again I do believe our next housing price crash will be more so due to 'external' factors compared to previous crashes. If this is correct, we probably should be preparing for this future crash now, but we don't seem to be doing that very well, if at all. This has the potential to be catastrophic for us all in relation to housing.

Zenify

Is it possible to add a poll to this thread?

SNNUS

Zenify wrote: »

Is it possible to add a poll to this thread?

Or dynamite

Graham

Wanderer78 wrote: »

we probably should be preparing for this future crash now, but we don't seem to be doing that very well, if at all.

I'm not convinced it's possible to prepare for a crash in a way where the preparations don't actually bring about a crash in their own right.

Stop spending, reduce borrowing, sell quickly if you need to.... Self fulfilling prophecy.

Claw Hammer

Wanderer78 wrote: »

I'd actually agree with their statement, I suspect we have become to believe things such as 'credit crisis' can be the only triggers of a crash in housing prices, we are leading ourselves to believe that we have more or less solved these type of issues, but we actually have no proof of this. Again I do believe our next housing price crash will be more so due to 'external' factors compared to previous crashes. If this is correct, we probably should be preparing for this future crash now, but we don't seem to be doing that very well, if at all. This has the potential to be catastrophic for us all in relation to housing.

There are people who are wise after the event. Before the Great Crash "the fundamentals are sound", "the banks are well capitalised" "morgan kelly is an idiot", Its different this time, were phrase which were repeated constantly. After the crash, "it was the banks", "what was the regulator doing", "why didn't anyone listen to Morgan Kelly" were all phrases heard from the very same people. When interest rates rise, which they inevitably will, the howls will be deafening.

Percy Judd

Claw Hammer wrote: »

There are people who are wise after the event. Before the Great Crash "the fundamentals are sound", "the banks are well capitalised" "morgan kelly is an idiot", Its different this time, were phrase which were repeated constantly. After the crash, "it was the banks", "what was the regulator doing", "why didn't anyone listen to Morgan Kelly" were all phrases heard from the very same people. When interest rates rise, which they inevitably will, the howls will be deafening.

Why will interest rates rise, and by how much %? People have been predicting interest rate hikes for a decade now and it never materialized.
Even if they do, I doubt it will 'crash' property. That would cause prices to fall alright, but a crash like 2008? Not a chance.

GingerLily

Percy Judd wrote: »

Why will interest rates rise, and by how much %? People have been predicting interest rate hikes for a decade now and it never materialized.
Even if they do, I doubt it will 'crash' property. That would cause prices to fall alright, but a crash like 2008? Not a chance.

The ECB rate is 0%,it can't get any lower, there is only one direction it can move. It will eventually move, so that is why people are rightly predicting interest rates to rise.

BattleHardened

GingerLily wrote: »

The ECB rate is 0%,it can't get any lower, there is only one direction it can move. It will eventually move, so that is why people are rightly predicting interest rates to rise.

It could take a while though given the unrest in European elections at the moment.

Sierra Oscar

BattleHardened wrote: »

It could take a while though given the unrest in European elections at the moment.

Just last week the European Central Bank took further steps to unwind it's bond purchasing programme that has been in place since the financial crisis. Interest rate rises are inevitable, and the ECB has been signalling that rate increases are on the way from 2019 onwards.

That's not to say some unforeseen economic events will occur which torpedo the ECB's timeline, but as it stands they are on course for gradual rate increases from next year onwards.

ELM327

GingerLily wrote: »

The ECB rate is 0%,it can't get any lower, there is only one direction it can move. It will eventually move, so that is why people are rightly predicting interest rates to rise.

It can get lower, negative interest rates like the negative german bonds.

Percy Judd

Sierra Oscar wrote: »

Just last week the European Central Bank took further steps to unwind it's bond purchasing programme that has been in place since the financial crisis. Interest rate rises are inevitable, and the ECB has been signalling that rate increases are on the way from 2019 onwards.

That's not to say some unforeseen economic events will occur which torpedo the ECB's timeline, but as it stands they are on course for gradual rate increases from next year onwards.

Gradual base rate increases, like the ECB are accustomed to (0.25% for example) in order to avoid shocking the system would (slowly) put pressure on existing mortgage holders and restrict new borrowers/first time buyers limiting what they can borrow. This would impact house prices here alright but I can't see that alone triggering a 'crash' in the sense of the word. Unless the political will for repossessions develops, the government and banks will do everything to keep people with mortgage difficulty in their homes. Any political party that starts evicting people en masse from their homes would be thrown out of government. This could actually distort the market further by limiting supply even more.

GingerLily

ELM327 wrote: »

GingerLily wrote: »

The ECB rate is 0%,it can't get any lower, there is only one direction it can move. It will eventually move, so that is why people are rightly predicting interest rates to rise.

It can get lower, negative interest rates like the negative german bonds.

Can the ECB have a negative interest rate? Or do you agree the ECB rate cannot be lower?

Ronaldinho

Higher interest rates are not going to cause a property crash in my view - it will take job losses as a result of a future recession and/or a massive supply glut.

Claw Hammer

Higher interest rates dampen economic activity. They add overheads to business and have the twin effect of forcing salary reductions as well as reducing purchasing power. Values will fall as interest rates rise. Once values start to fall credit becomes even more restricted.