Property Market 2018

Wanderer78 · 26-10-2018 8:46am

MayoSalmon wrote:

Government intervention usually doesn't play out well for any economy to be fair

What part should regulatory democracy play in our economies?

MayoSalmon · 26-10-2018 8:47am

Pussyhands wrote: »

I'm saying we need the rise badly. Economy is doing amazing but if it goes tits up there's nothing that can be done to breathe life into the economy.

China and Saudi Arabia situations are precarious.

Stock market in the US in October was the most volatile month in something like 60 years.

Government intervention usually doesn't play out well for any economy to be fair

sunnyday1234 · 26-10-2018 8:50am

Wanderer78 wrote: »

sunnyday1234 wrote:

no chance of interest rate rises any time soon

Pussyhands wrote:

It's badly needed tbh.

Famous last words, since our economies are doing resonably well, why wouldn't rates rise?

The irish economy is doing well, that has nothing to do with interest rates and things in europe are not looking good. France and Italy's budgets are under scrutiny and brexit casting a big shadow over the entire eurozone.
To raise rates against this backdrop would be madness and it wont happen for at least 12 months or much longer.
I believe in 5 years we are going to be still at rates less than 1% in the eurozone and maybe even zero. I think we are going the same way as Japan

Mickiemcfist · 26-10-2018 9:04am

sunnyday1234 wrote: »

The irish economy is doing well, that has nothing to do with interest rates and things in europe are not looking good. France and Italy's budgets are under scrutiny and brexit casting a big shadow over the entire eurozone.
To raise rates against this backdrop would be madness and it wont happen for at least 12 months or much longer.
I believe in 5 years we are going to be still at rates less than 1% in the eurozone and maybe even zero. I think we are going the same way as Japan

I get what you're saying, but maintaining such low interest rates means should there be a shock to the economy, there's no room to reduce interest rates to stimulate it.

sunnyday1234 · 26-10-2018 9:12am

Mickiemcfist wrote: »

sunnyday1234 wrote: »

The irish economy is doing well, that has nothing to do with interest rates and things in europe are not looking good. France and Italy's budgets are under scrutiny and brexit casting a big shadow over the entire eurozone.
To raise rates against this backdrop would be madness and it wont happen for at least 12 months or much longer.
I believe in 5 years we are going to be still at rates less than 1% in the eurozone and maybe even zero. I think we are going the same way as Japan

I get what you're saying, but maintaining such low interest rates means should there be a shock to the economy, there's no room to reduce interest rates to stimulate it.

Yep. Thats the situation we are in, it doesnt look great. I reckon we will have a full blown recession in next 12 - 18 months.

Wanderer78 · 26-10-2018 9:40am

sunnyday1234 wrote: »

The irish economy is doing well, that has nothing to do with interest rates and things in europe are not looking good. France and Italy's budgets are under scrutiny and brexit casting a big shadow over the entire eurozone.
To raise rates against this backdrop would be madness and it wont happen for at least 12 months or much longer.
I believe in 5 years we are going to be still at rates less than 1% in the eurozone and maybe even zero. I think we are going the same way as Japan

i think you re spot on here, we re all slowly turning into japans, something has to change, you d have to wonder what the breaking point will be!

sunnyday1234 · 26-10-2018 9:46am

Wanderer78 wrote: »

i think you re spot on here, we re all slowly turning into japans, something has to change, you d have to wonder what the breaking point will be!

Nothing . Japan has been like that for over 20 years

The Eurozone is an aging demographic and more and more money will be spent on the health systems and not on innovation and stuff that might create economic growth

Life in Japan ain’t bad either though

Wanderer78 · 26-10-2018 9:47am

sunnyday1234 wrote: »

Nothing . Japan has been like that for over 20 years

The Eurozone is an aging demographic and more and more money will be spent on the health systems and not on innovation and stuff that might create economic growth

Life in Japan ain’t bad either though

there are movements for change occurring across europe, hard to know if they ll succeed, hopefully anyway

Cuddlesworth · 26-10-2018 11:31am

MayoSalmon wrote: »

Houses are being overpriced by sellers and agents and credit is not abundant therefore the overpriced houses are not selling. Seems like the market is working pretty well in this scenario.

Am I missing something here that is so worrying?

It implies(but doesn't prove) that the market is stagnating.

House A sells for 800k 12 months previous. Agent values similar house B at 800k + 20% market growth, lists at 960k. After months on the market, house B goes down to 800k and starts to get interested buyers.

Its my understanding you will always see market stagnation at the top of the market first. Considering our general history stagnation seems likely to head into decline.

zl1whqvjs75cdy · 26-10-2018 2:05pm

The other issue with the lack of interest rate rises is that inflation will remain low. The true value of a mortgage holders debt therefore doesn't decrease. My parents bought their house for 50 k back in the 90s. The same house is now worth 10 x that. This is down to inflation which can be driven by interest rate rises. While a rise may hurt in terms of monthly repayments, it decrease the true value of the debt.

Edgware · 26-10-2018 8:04pm

The fudamentals are good. We will have a soft landing

theboringfox · 26-10-2018 8:49pm

If you look at the level of Credit in the market back in last boom, the LTV levels and the income multiple levels it was totally different.

So I know soft landing is looked back as joke term rightly but if it is hard landing this time it will be external factors.

The one thing we had in 2008 was strong public finances. This time we have high public debt and no surplus. So if there is a downturn the pain will be passed on fully to the Irish economy.

I am on the side of hoping/wanting house prices to level off or fall. Would like to trade up in a few years and level of price growth would make that a pipe dream as my wage growth is largely maxed out.

lookr · 26-10-2018 11:31pm

donkeyoaty0099 wrote: »

The other issue with the lack of interest rate rises is that inflation will remain low. The true value of a mortgage holders debt therefore doesn't decrease. My parents bought their house for 50 k back in the 90s. The same house is now worth 10 x that. This is down to inflation which can be driven by interest rate rises. While a rise may hurt in terms of monthly repayments, it decrease the true value of the debt.

This isn't accurate. High interest rates increase saving and decrease spending, which reduces pressure on prices. Interest rates are increased in order to decrease inflation and decreased to increase consumer spending. This is why interest rates have been so low over the past few years. Consumers have not responded as rapidly as expected.

Your broader point about inflation eroding debt over time is correct. However I would keep in mind that interest rates were much higher in the past.

zl1whqvjs75cdy · 28-10-2018 12:18am

lookr wrote: »

This isn't accurate. High interest rates increase saving and decrease spending, which reduces pressure on prices. Interest rates are increased in order to decrease inflation and decreased to increase consumer spending. This is why interest rates have been so low over the past few years. Consumers have not responded as rapidly as expected.

Your broader point about inflation eroding debt over time is correct. However I would keep in mind that interest rates were much higher in the past.

Agreed. We definitely don't want to go back to the days of double digit rates. We'd be rightly screwed

OwlsZat · 28-10-2018 12:42am

lookr wrote: »

This isn't accurate. High interest rates increase saving and decrease spending, which reduces pressure on prices. Interest rates are increased in order to decrease inflation and decreased to increase consumer spending. This is why interest rates have been so low over the past few years. Consumers have not responded as rapidly as expected.

Your broader point about inflation eroding debt over time is correct. However I would keep in mind that interest rates were much higher in the past.

That's just it. The foot was to the floor in terms of QE. EU inflation remains weak as does wage growth. What happens as QE is unwound. It is happening globally.

handlemaster · 28-10-2018 8:27am

OwlsZat wrote: »

That's just it. The foot was to the floor in terms of QE. EU inflation remains weak as does wage growth. What happens as QE is unwound. It is happening globally.

already see more negative analyist comments. US market is fluttering.

zl1whqvjs75cdy · 28-10-2018 11:33am

handlemaster wrote: »

already see more negative analyist comments. US market is fluttering.

Japan style stagflation or larger shock. I'm personally thinking stagflation unless Italy goes off on a mad solo run. Which could happen, they seem very agitated about the current budget situation.

OwlsZat · 28-10-2018 12:02pm

Stagflation is a condition of slow economic growth and relatively high unemployment, or economic stagnation, accompanied by rising prices, or inflation. It can also be defined as inflation and a decline in gross domestic product (GDP).

hmmm · 28-10-2018 11:09pm

handlemaster wrote: »

already see more negative analyist comments. US market is fluttering.

The US economy is doing very well, unemployment is on the floor & the Fed is still planning to increase rates. The market has ran ahead of itself, and earnings didn't match expectations. Two very different things.

KevinCavan · 29-10-2018 10:43am

Zenify wrote: »

Anyone think these new Air B&B laws will affect the market? Will they add properties to the rental market or will these landlords sell?

It won’t make any difference. Rents won’t go lower and if anything will go higher. Even if these landlords sell, let’s say 300 of them sell their properties in Dublin, it won’t make a blind bit of difference to the market. It’s the government looking after big business: hotel and b&b owners. The government is trying to make the vat they slapped on hotels more palatable for hoteliers.

handlemaster · 29-10-2018 10:55am

hmmm wrote: »

handlemaster wrote: »

already see more negative analyist comments. US market is fluttering.

The US economy is doing very well, unemployment is on the floor & the Fed is still planning to increase rates. The market has ran ahead of itself, and earnings didn't match expectations. Two very different things.

all on borrowed money. How much are the Chinese lending to the US. China have a strong card here if the US continue to rattle their cage

handlemaster · 29-10-2018 10:55am

hmmm wrote: »

handlemaster wrote: »

already see more negative analyist comments. US market is fluttering.

The US economy is doing very well, unemployment is on the floor & the Fed is still planning to increase rates. The market has ran ahead of itself, and earnings didn't match expectations. Two very different things.

all on borrowed money. How much are the Chinese lending to the US. China have a strong card here if the US continue to rattle their cage

Bluefoam · 29-10-2018 12:33pm

KevinCavan wrote: »

It’s the government looking after big business: hotel and b&b owners.

I knew it all along... Those pesky b&b owners will be the ruin of us all. This thread is genuinely entertaining.

The reality is that the government are going after businesses who are ignoring the current planning laws in favour of businesses who have been complying with regulation. I'm not sure it will fix the housing problem, but it is a positive move.

Marius34 · 29-10-2018 1:59pm

handlemaster wrote: »

all on borrowed money. How much are the Chinese lending to the US. China have a strong card here if the US continue to rattle their cage

US debt is mainly internal with their own currency, so the US debt it's not as bad as one might think.

US debt to China 1,2 Trillion.
Ireland external debt 2,2 Trillion.

Bluefoam · 29-10-2018 2:04pm

Marius34 wrote: »

handlemaster wrote: »

all on borrowed money. How much are the Chinese lending to the US. China have a strong card here if the US continue to rattle their cage

US debt is mainly internal with their own currency, so the US debt it's not as bad as one might think.

US debt to China 1,2 Trillion.
Ireland external debt 2,2 Trillion.

203 billion?

The_Conductor · 29-10-2018 2:31pm

Bluefoam wrote: »

203 billion?

Its actually a tad under 208 billion- but yes, its billions, not trillions.

The_Conductor · 29-10-2018 2:33pm

Marius34 wrote: »

US debt is mainly internal with their own currency, so the US debt it's not as bad as one might think.

US debt to China 1,2 Trillion.
Ireland external debt 2,2 Trillion.

China is actively selling down US debt- much to the consternation of Wall Street- and is one of the top reasons put forward for the Fed ignoring the ranting and raving from Trump- and putting up interest rates, probably another 25 basis points, before the end of the year.

China holds a serious chunk of US debt- however, in the context of a trade war- why should they give this political capital to the US.

Marius34 · 29-10-2018 2:34pm

You guys speak about National Debt. I know this is more important, but I just wanted to show all External debt, including private sector, not just government, that even in Ireland we can count in Trillions.

The_Conductor · 29-10-2018 3:07pm

Marius34 wrote: »

You guys speak about National Debt. I know this is more important, but I just wanted to show all External debt, including private sector, not just government, that even in Ireland we can count in Trillions.

December 31st 2017 Stats:

Net household assets stood at €726.8bn the equivalent of €151,657 per head.

Household net worth has risen by 72pc since its lowest level of €430bn in the second quarter of 2012, mainly due to rising housing values.

In overall terms, household debt fell by €1.37bn to €140.5bn in 2017

Note- the vast majority of net household assets- relate to residential property- and the recovery in net asset value- mirrors the recovery in the Irish property market (we are now at approx 78% of peak for apartments and 82% of peak for freehold dwellings in the greater Dublin area- keeping in mind the peak was March 2007- and not when the CSO's graphs start (two years earlier).

Source: Central Bank

Marius34 · 29-10-2018 3:31pm

The_Conductor wrote: »

December 31st 2017 Stats:

Net household assets stood at €726.8bn the equivalent of €151,657 per head.

Household net worth has risen by 72pc since its lowest level of €430bn in the second quarter of 2012, mainly due to rising housing values.

In overall terms, household debt fell by €1.37bn to €140.5bn in 2017

Note- the vast majority of net household assets- relate to residential property- and the recovery in net asset value- mirrors the recovery in the Irish property market (we are now at approx 78% of peak for apartments and 82% of peak for freehold dwellings in the greater Dublin area- keeping in mind the peak was March 2007- and not when the CSO's graphs start (two years earlier).

Source: Central Bank

All I wanted to say the fact that US debt is mainly internal (70%). and that Ireland External debt (2.2T) is higher than US debt to China (1.2T), nothing more.
https://www.indexmundi.com/ireland/debt_external.html

Property Market 2018

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