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How much did house prices drop after 2008?

Abril9

Hello Everyone,

Please forgive me for posting this thread (in case something similar, specifically on this topic already exists).

I am a millennial and a long time boards fan and reader (but non poster). I made an account to start this thread as I was wondering if I could pick peoples memories on the recession post 2008 in terms of house prices.

I am now at the age where I think it is time to start thinking about a house purchase. I was not as "mature" back in 2008

We are in unprecedented times at the moment.

The house market is all over the place and everyone has their own predictions as to what will happen.

Some say we will see continual price increases (like we are seeing now) and others say we are on the verge of a monumental economic collapse.

Me, personally I do not know what to think.

However this got me thinking about what happened in 2008. I am curious to know if anyone was looking for a house when things dropped off a cliff back then?

How bad did things get with house prices? How big were the price drops people noticed?

For example did a standard three bed semi-d drop by monumental percentages? Did we see the market truly being reset?

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str8y

We had two 90% mortgaged properties but decided to emigrate in 2007.
Sold the 3 Bed Terrace in Tallaght for 342k in Spring 2007. 5 Similar houses in the estate sold for around 125k in summer 2011.

Sold the 3 bed in Drogheda for 320k in December 2006. Neighbouring houses sold for 60k in 2011 and 90k in 2014.

We returned to Ireland and rented for a while in Dublin. Due to age and earnings banks would only offer us a 90k mortgage 2018. Decided to move out of Dublin ( no choice!) and bought a beautiful 3 bed bungalow on half an acre with our savings for 73k.

We have been truly blessed.

Buddy Bubs

Just to note I was offered 12 times my salary as a single applicant mortgage in 2010 in my 20s. I was mortgage approved in 2007 for 360k on the house I ended up buying in 2010 for 220k. I was earning 30k at the time. Would have had to rent out rooms which I suppose I could have easily done. Didn't go for it as I would have been wiped out month to month. Banks wouldn't have cared though.

360k was 100% mortgage too. In 2010 I put down 10% so mortgage was 200k.
At current rates, repayments would have been almost doubled from 800 to over 1500 a month.
House is now worth 300k and I'd struggle to get a mortgage for it under current rules even though my salary has increased hugely in the 10 years since I bought it.

whippet

Bought a 3 bed semi in Dublin for €225k in 2004 .. it peaked about €340k in 2007. In 2009 similar ones were selling for about €140k.

We rented it out for €1k a month and moved out of Dublin.

We rented for a couple of years and bought a 5 Bed detached on the coast for €340k in 2011 ... it was originally on the market in 2009 for €1.1m.

We then sold the Dublin property for €245k in 2014

I’ve no idea what the current value is on either .. but I couldn’t care .. I’ve no intention of moving !

Mad_maxx

beauf wrote: »

In fairness the property pin is like someone predicting rain in Ireland. Eventually they'll be right.

It's a site for permabear cranks

beauf

Thargor wrote: »

The PropertyPin was amazing back then, they called it all the way up and then down. Pity its being run into the ground by that unbearable Qanon/MAGA muppet.

In fairness the property pin is like someone predicting rain in Ireland. Eventually they'll be right.

ted1

magicbastarder wrote: »

when we were selling our place in 2012, the estate agent we were dealing with - a very nice chap, actually - was telling me his brother in law worked for one of the banks; and near the peak was allowed borrow (and i remember this very specifically) twenty one and a half times his salary, against a property.
it was a two or three storey over basement property, and he lived in the basement flat and rented out the property above for good money.

just to keep the maths easy - let's say his brother in law earned 50k (i'm sure it was probably more); but that meant he was in hock to the tune of €1.075m on that salary, and monthly repayments would have been very roughly €5k.
however, let's say that for whatever reason, he wasn't able to rent out the property for two months. he'd have had €10k in repayments to make on a *gross* salary of 50k. even if you double/triple the salary, you'll also double/triple the repayments...

F€€k

ted1

magicbastarder wrote: »

when i heard the head of the central bank announcing it wasn't their job to stop banks issuing 100% mortgages, that's when i decided that there had to be a reckoning.

100%?, several of my friends (Doctors and Accountants) got 110% so they could furnish them

ted1

2012 was the lowest point.
We bought or family home in may 2012 for 212k
3bed semi in killiney.
We’d been renting in the area for about ten years. 975 for a 1bed and then 1259 for a 3 bed

So we’d been looking for a while and even though we had mortgage approval, I couldn’t justify paying 450k for a three bed.

Houses is now worth about 545k. It’s within 80m of the 1 bed apartment we rented and the three bed house we rented.

Thargor

magicbastarder wrote: »

when i heard the head of the central bank announcing it wasn't their job to stop banks issuing 100% mortgages, that's when i decided that there had to be a reckoning.

The PropertyPin was amazing back then, they called it all the way up and then down. Pity its being run into the ground by that unbearable Qanon/MAGA muppet.

magicbastarder

when i heard the head of the central bank announcing it wasn't their job to stop banks issuing 100% mortgages, that's when i decided that there had to be a reckoning.

beauf

coolbeans wrote: »

I wouldn't agree that nobody saw it coming. Fair enough the global credit crunch accentuated the pain but it was always coming and very much of our own making.
Firstly, there was no link between the number of houses built and the demand for said houses, and secondly people started to build almost anywhere regardless of location. This was a time when seemingly everyone with a bit of capital was building a small development regardless of location or demand. Thing is though if nations became rich by selling houses to one another we'd all be doing it all the time. But they don't. I saw a lot of farmers lose thousands of acres when it all hit the fan.

I think many were worried they would miss an opportunity. The talk of a crash was everywhere for years.

antix80

Deleted User wrote: »

The highest drop was 50% for one bedroom apartments if I am remembering correctly.

30-40% otherwise. some houses were unsellable for years.

You don't remember correctly

Thargor

Anyone who lives in a rural area will know farmers that sold out to developers for millions right before the crash and ended up buying the unused green fields back for thousands a couple of years later, those will be 90-95% price drops, plenty of stories like that in the South Galway area anyway.

There are still empty concrete shells around my parents place in the same area that I could buy right now for a tiny fraction of the site price that was paid at the time, some places just never recovered.

beauf

magicbastarder wrote: »

my father used to play golf with a chap who owned 50 properties but called the peak and sold all but about 5 in 2007.
he put his earnings into bank shares.

I know at least one who swore blind the crash was coming. Said that for about 5yrs in the pub. Eventually caved and bought at least 5 properties just before the crash. Took years to recover that back. Not that he needed it either way.

Akesh

Damien360 wrote: »

That’s the kind of drop I saw in kildare. My house bought in 1999 for 100k (127k euro). Top of the boom the houses on street were hitting 300k. I saw a drop back to 130k for same houses during the bust. Just lately they are back to 260/270k.

My own personal feeling is we are heading for a drop of some description soon. Lots of people will be unemployed when PUP payments disappear and their jobs won’t return. Mortgage failures will be big. All depends how it’s paid for this time and I don’t think the country is willing to swallow another pile of debt.

There is still an issue of supply but I suspect we will see prices come down because defaults will increase and buyers will be impacted. There is the risk that the government will intervene and prop up failing home loans but this is unlikely considering the debt undertaken due to Covid-19.

If there is major increase in mortgage failures then banks won't be in a position to lend.

magicbastarder

when we were selling our place in 2012, the estate agent we were dealing with - a very nice chap, actually - was telling me his brother in law worked for one of the banks; and near the peak was allowed borrow (and i remember this very specifically) twenty one and a half times his salary, against a property.
it was a two or three storey over basement property, and he lived in the basement flat and rented out the property above for good money.

just to keep the maths easy - let's say his brother in law earned 50k (i'm sure it was probably more); but that meant he was in hock to the tune of €1.075m on that salary, and monthly repayments would have been very roughly €5k.
however, let's say that for whatever reason, he wasn't able to rent out the property for two months. he'd have had €10k in repayments to make on a *gross* salary of 50k. even if you double/triple the salary, you'll also double/triple the repayments...

Buddy Bubs

magicbastarder wrote: »

my father used to play golf with a chap who owned 50 properties but called the peak and sold all but about 5 in 2007.
he put his earnings into bank shares.

Thats just bad investment strategy evening itself out. 50 investment properties in Ireland is not diversifying, either is putting all your money in banking shares. That's gambling, he was always going to get caught out.

coolbeans

Galwayguy35 wrote: »

No they aren't, must be a right sickening to have paid that much but nobody saw what was coming down the line back then.

I wouldn't agree that nobody saw it coming. Fair enough the global credit crunch accentuated the pain but it was always coming and very much of our own making.
Firstly, there was no link between the number of houses built and the demand for said houses, and secondly people started to build almost anywhere regardless of location. This was a time when seemingly everyone with a bit of capital was building a small development regardless of location or demand. Thing is though if nations became rich by selling houses to one another we'd all be doing it all the time. But they don't. I saw a lot of farmers lose thousands of acres when it all hit the fan.

Damien360

Galwayguy35 wrote: »

A mate of mine bought a house in 2007 for €275000 in a small rural town and was delighted he got such a good deal.

2 years later the exact same houses in his estate were being sold for €95000

That’s the kind of drop I saw in kildare. My house bought in 1999 for 100k (127k euro). Top of the boom the houses on street were hitting 300k. I saw a drop back to 130k for same houses during the bust. Just lately they are back to 260/270k.

My own personal feeling is we are heading for a drop of some description soon. Lots of people will be unemployed when PUP payments disappear and their jobs won’t return. Mortgage failures will be big. All depends how it’s paid for this time and I don’t think the country is willing to swallow another pile of debt.

magicbastarder

whatever it was, my dad reckoned he lost about 90% of his money.

Mad_maxx

magicbastarder wrote: »

my father used to play golf with a chap who owned 50 properties but called the peak and sold all but about 5 in 2007.
he put his earnings into bank shares.

JP Morgan or Anglo Irish :pac:

magicbastarder

my father used to play golf with a chap who owned 50 properties but called the peak and sold all but about 5 in 2007.
he put his earnings into bank shares.

beauf

Galwayguy35 wrote: »

No they aren't, must be a right sickening to have paid that much but nobody saw what was coming down the line back then.

I suspect most people buying 1m houses a decade ago probably have made (and lost) multiples of that in the meantime which probably took the edge off.

beauf

Pussyhands wrote: »

Not everyone has family to buy a house and sell it back though.

How would they get a mortgage if they've been evicted for non payment?

Sure what you're saying would be beneficial for the owner if they could essentially just write off half their mortgage. That doesn't count as the bank "screwing them over"

It's not nice but evictions need to happen. You sign up to an agreement, you say you'll pay X for Y years and if you don't, you agreed you will lose your home.

If someone loses their job, there's no restructuring possible if you have a large mortgage.

There were plenty of cases where the bank refused
to lengthen the term of mortgage in arrears but still being paid. Then sold the property at less than what they would have got had they left the original party in the property. Which makes no financial sense for the bank. Then it turns out many were overcharged by the back and if they hadn't been, they wouldn't have been in arrears in the first place.

10-20 yrs later for Covid the banks did this very differently. They extended loans and offered payment holidays. Maybe you think they shouldn't have done that this time ...

...I think some were hoping...still are hoping ...for a fire sale on property due to Covid and are sorely disappointed it hasn't happened.... yet...

Galwayguy35

Mad_maxx wrote: »

I could be wrong but I imagine houses in the same estate today are still nowhere close to being back at 275 K ?

No they aren't, must be a right sickening to have paid that much but nobody saw what was coming down the line back then.

Mad_maxx

Galwayguy35 wrote: »

A mate of mine bought a house in 2007 for €275000 in a small rural town and was delighted he got such a good deal.

2 years later the exact same houses in his estate were being sold for €95000

I could be wrong but I imagine houses in the same estate today are still nowhere close to being back at 275 K ?

DubCount

punisher5112 wrote: »

Our gubernment screwed us tax paying fools so much it's unreal and they're at it again....

We bailed out the rich, it's a vicious cycle.

Come the revolution .......:D

punisher5112

Our gubernment screwed us tax paying fools so much it's unreal and they're at it again....

We bailed out the rich, it's a vicious cycle.

punisher5112

Biggest difference now to our parents generation is both parents must work now to afford a house.....

Galwayguy35

A mate of mine bought a house in 2007 for €275000 in a small rural town and was delighted he got such a good deal.

2 years later the exact same houses in his estate were being sold for €95000