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House prices have much further to fall: Morgan Kelly

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    #62
    astrofool
    Registered Users Posts: 16,457 ✭✭✭✭astrofool


    SkepticOne wrote: »
    If you reread my earlier question it was "What do you expect to happen to prices if 80% becomes the maximum available mortgage?". Would you agree that this will reduce the number of available buyers and therefore have a downward effect on price?

    You're then forgetting why the banks would only be offering an 80% mortgage.

    The banks want to ensure that their loan is securitised against the property, by giving you only an 80% maximum mortgage, they are hedging that the property is going to fall another 20% and that if you run into financial difficutlies, they will still have an asset that covers the debt.

    If house prices stop falling, then higher % mortgages will again become available, as the banks will be securitised against defaults.

    You also have to remember that 80% mortgages are only the upper limit on BTL apartments, so in effect, you could say that these properties have the furthest to drop still.


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    #63
    SimpleSam06
    Closed Accounts Posts: 4,048 ✭✭✭SimpleSam06


    mrgaa1 wrote: »
    Banks are open for mortgages and are glad to take the business - get out there and improve your portfolio - renting has strong returns.
    the DOOM and GLOOM merchants want to talk DOOM and GLOOM.
    Listen, you're free to do what you want with your own money. But spare the advice for other people to follow a similar, suicidal to use a Bertieism, path.

    We've already seen the first few threads about people facing ruin due to the property madness, desperately looking for any way out, and I can't speak for anyone else here, but I'd rather not have to look at any more of the flood of fcuking human detritus which will be all over this forum for the next few years, that are a direct result of shite spouting as you have indulged in above, any more than I absoloutely have to.

    You are handing out dangerous, bald lies and wrong advice which will destroy lives if followed, let no one have any illusions about that. So stop with the one man bull rally.


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    #64
    gurramok
    Closed Accounts Posts: 13,992 ✭✭✭✭gurramok


    Oafley Jones wrote: »
    This guy has to be a shill.

    We'll see how low prices will get when the banks start repossessing the mothballed estates from developers and start selling the houses themselves.

    Yeh, the Irish banks only lent out €100bn to developers! :D

    Nothing to see here, Ireland is different to economic norms! :D


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    #65
    Joseph Kuhr
    Closed Accounts Posts: 169 ✭✭Joseph Kuhr


    SkepticOne wrote: »
    If you reread my earlier question it was "What do you expect to happen to prices if 80% becomes the maximum available mortgage?". Would you agree that this will reduce the number of available buyers and therefore have a downward effect on price?

    no I'm not going to disagree with thAt. But it doesn't change my argument.


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    #66
    DonJose
    Registered Users Posts: 3,470 ✭✭✭DonJose


    SkepticOne wrote: »
    If you reread my earlier question it was "What do you expect to happen to prices if 80% becomes the maximum available mortgage?". Would you agree that this will reduce the number of available buyers and therefore have a downward effect on price?

    This 80% will be based on the banks valuation of the property. I just read about a couple buying a €470k property. They were mortgage approved but the bank placed a €450k valuation on the property meaning the couple are short €13k, this was on a 92% mortgage. When people have to stump up a 20% deposit plus the sortfall left by the banks valuation, then things will get more interesting.

    http://www.askaboutmoney.com/showthread.php?t=89864


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    #67
    Senna
    Registered Users Posts: 8,800 ✭✭✭Senna


    when banks only lend 80%, then we'll see panic selling. The fact is a huge majority of potential buyer will want to purchase and may see good value, but wont have the deposit.
    Many people i know just dont have the savings, they're that used to 95% to 100% mortgages that they never realised they HAD to save.


    One thing i do hope for is the disappearance of these paddy-come-lately investors who look at houses and house prices as yields and not what a house should be, a home. The kind of people that were buying properties as investments before 2002 have no intention of getting back into the market until it bottoms out and i'd say even then it'll be in small numbers.


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    #68
    Joseph Kuhr
    Closed Accounts Posts: 169 ✭✭Joseph Kuhr


    DonJose wrote: »
    This 80% will be based on the banks valuation of the property. I just read about a couple buying a €470k property. They were mortgage approved but the bank placed a €450k valuation on the property meaning the couple are short €13k, this was on a 92% mortgage. When people have to stump up a 20% deposit plus the sortfall left by the banks valuation, then things will get more interesting.

    http://www.askaboutmoney.com/showthread.php?t=89864

    Not at all people should not have to stump up anything extra if they do it properly. We're in a buyers market and all the necessary steps must be taken. This is a classic case of them jumping the gun. They made an offer before they even had mortgage approval. You can do that in a sellers market because the price is only going to go up. In a buyers market you do not sign anything until everything is finalised. this is also another classic example of solicitors being out for themselves, another thing to look out for in a buyers market. Either that or they ignored his advice.
    We saw a house we liked went to €470K and had the offer accepted.
    Our motgage offer letter came in the door the other day and it is only for €420K )€13K short.


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    #69
    Joseph Kuhr
    Closed Accounts Posts: 169 ✭✭Joseph Kuhr


    Senna wrote: »
    when banks only lend 80%, then we'll see panic selling. The fact is a huge majority of potential buyer will want to purchase and may see good value, but wont have the deposit.
    Many people i know just dont have the savings, they're that used to 95% to 100% mortgages that they never realised they HAD to save.
    What makes you think they're going to be able to buy a house at 80%? 100% mortgages were for people who could not afford to buy a home. These people do not dictate the market. Thats what caused the mess in the first place. Are you suggesting that the market must follow them, that whatever they can afford is what dictates the market? Nonsense. These people are out of the market, pure and simple.
    Senna wrote: »
    One thing i do hope for is the disappearance of these paddy-come-lately investors who look at houses and house prices as yields and not what a house should be, a home.
    OK so you're just happy to pay all those thousands in interest on your mortgage without having some capital appreciation to cancel it out? And the paddy-come-lately's probably have a huge amount of capital in their homes. So there is an investment for some in there. For most there is at least our 10% deposit. Others would have SSIA's, inheritance, savings etc.


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    #70
    SimpleSam06
    Closed Accounts Posts: 4,048 ✭✭✭SimpleSam06


    Joseph Kuhr wrote: »
    OK so you're just happy to pay all those thousands in interest on your mortgage without having some capital appreciation to cancel it out?
    Capital appreciation doesn't cancel out anything except in your head, until you actually complete a sale.


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    #71
    mrgaa1
    Closed Accounts Posts: 759 ✭✭✭mrgaa1


    Did anyone go through the property bubble burst in the UK in the early 90's. If so you will know what happened and what happened since. I was there and seen it first hand - it was a buyers market even though some DOOM & GLOOM merchants were trying to talk it all down.
    We are at that stage and we will come out of it. The main problem is that buyers are put off by because DOOM and GLOOM merchants keep on harping about house prices are going to drop. Listen 3-4years ago it was all buy now buy now they are going up - make your money. House prices are now realistic - banks will lend. This is the message that needs to get out there. There are LOADS of buyers out there. Ask any estate agent and they will all say that their inquiries are all related to will it drop anymore? Everytime you pick up a newspaper its DOOM & GLOOM - lets look positively and get on with it.


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    #72
    Joseph Kuhr
    Closed Accounts Posts: 169 ✭✭Joseph Kuhr


    Senna wrote: »
    wOne thing i do hope for is the disappearance of these paddy-come-lately investors who look at houses and house prices as yields and not what a house should be, a home.

    Actually I think you have hit on a very important point there. Who is it that is constantly talking about property in money terms? Economists. Fair enough, they're good with statistics and figures and know what they are talking about in that respect. But like all professions which span many industries, you may be good at your profession but just because it spans different industries does not make you an expert in all those fields. An economist knows nothing about how the property industry works. They show time and time again a complete lack of knowledge as to what it is that really makes people move home. In the same way a computer programmer is not an expert in banking just because they worked on a banking website.


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    #73
    Joseph Kuhr
    Closed Accounts Posts: 169 ✭✭Joseph Kuhr


    SimpleSam06 wrote: »
    Capital appreciation doesn't cancel out anything except in your head, until you actually complete a sale.

    Yes I have already made the point that you need to think in long terms. Its what happens at the end of the process that counts.


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    #74
    Calina
    Registered Users Posts: 8,219 ✭✭✭Calina


    What happens in the long term still is impacted by what point you bought at. For people who bought at the top of the market, they will need a very long term for things to fix themselves.

    A lot of people bought at the top of the market and for many FTBs, their property is basically unsaleable at any sort of a return for the foreseeable future. And they were were sold a pup because the ethos in Dublin was that you bought a "starter home" - read, a property which no one would want to live in for more than two or three years - watched the capital appreciation and then used it to trade up.

    This is not a future I want to go back to.

    The long term is not the full story. People need to look at the short and medium term too.


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    #75
    SimpleSam06
    Closed Accounts Posts: 4,048 ✭✭✭SimpleSam06


    mrgaa1 wrote: »
    Did anyone go through the property bubble burst in the UK in the early 90's. If so you will know what happened and what happened since.
    Well, it was awfully good of you to invent a time machine and transport us back to the 1990s in the UK. I have to say thats a load off my mind. Oh no wait, thats a load of crap. Conditions and the economy now are nothing at all like the UK in the 1990s, and if you can't get that through your bone box you have no right to be posting in this thread.
    mrgaa1 wrote: »
    banks will lend.
    The banks are out of money and won't even lend to one another any more. Thats why you are seeing those nice 8% interest adverts on TV, they need cash and will do anything to get it. They already sold off their own properties so they haven't even got real assets to keep the balls in the air any more.
    mrgaa1 wrote: »
    Ask any estate agent and they will all say
    They will all say "we'll be letting more people go soon, half the staff is already queueing for the dole."

    Yeesh. Its like watching that Iraqi information minister telling the world everything was okay while bombers level a mosque in the background.


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    #76
    Joseph Kuhr
    Closed Accounts Posts: 169 ✭✭Joseph Kuhr


    Calina wrote: »
    What happens in the long term still is impacted by what point you bought at. For people who bought at the top of the market, they will need a very long term for things to fix themselves.

    A lot of people bought at the top of the market and for many FTBs, their property is basically unsaleable at any sort of a return for the foreseeable future. And they were were sold a pup because the ethos in Dublin was that you bought a "starter home" - read, a property which no one would want to live in for more than two or three years - watched the capital appreciation and then used it to trade up.

    This is not a future I want to go back to.

    The long term is not the full story. People need to look at the short and medium term too.

    Absolutely. I'm not saying people need to go out and blindly buy a dud property. And if you're one of the unfortunate who has one of these duds you're in a spot of bother and its got nothing to do with whether prices are going up or down, its to do with people having copped on and can now see through the green mist of the celtic tiger greed and see a home for what it is. And if what they see is not too good - forget whats going on in the market - you're in a spot of bother.


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    #77
    Joseph Kuhr
    Closed Accounts Posts: 169 ✭✭Joseph Kuhr


    SimpleSam06 wrote: »
    The banks are out of money and won't even lend to one another any more. Thats why you are seeing those nice 8% interest adverts on TV, they need cash and will do anything to get it. They already sold off their own properties so they haven't even got real assets to keep the balls in the air any more.

    Ireland loves jumping on the band wagon. How many goons have all their money tied up in commodities now? Likewise people jumping on the doom band wagon. Where there's money to be made, there's a band wagon. And people are making money out of the gloom in exactly the same way they did in the boom.

    Now sorry to bring the sunshine out on your parade but banks are still lending. I'm sorry but its true...

    It will be hard for you to get a 100% mortgage but guess what.....thats actually good news! Despite the doom merchants making it look otherwise.


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    #78
    SimpleSam06
    Closed Accounts Posts: 4,048 ✭✭✭SimpleSam06


    Joseph Kuhr wrote: »
    Their infidels are committing suicide by the hundreds on the gates of Baghdad. Be assured, Baghdad is safe, protected. Today I have visited whole Baghdad city, no invaders found. You go and see how we have ousted them from this city. They are crying outside and waiting to receive bullets. They will be killed shortly.
    :D

    Seems a bit odd that two low postcount IDs should appear at the same time posting the same hackneyed drivel in support of each other. I'd like to ask a mod to check some IPs here, it would be interesting to know if this Kuhr and this mrgaa1 are posting from the same address. If not, disregard, thanks.
    Joseph Kuhr wrote: »
    Now sorry to bring the sunshine out on your parade but banks are still lending. I'm sorry but its true...
    Yeah the banks are lending. They aren't lending the way you'd like them to be lending however, so your fightback against the collapse is doomed and gloomed. Sorry about that.


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    #79
    Joseph Kuhr
    Closed Accounts Posts: 169 ✭✭Joseph Kuhr


    Thanks SimpleSam06 you've just exposed yourself as the troll you are.


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    #80
    faceman
    Moderators, Category Moderators, Arts Moderators, Entertainment Moderators, Social & Fun Moderators Posts: 16,584 CMod ✭✭✭✭faceman


    IIB cut their fixed rate loan rates this morning.


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    #81
    mrgaa1
    Closed Accounts Posts: 759 ✭✭✭mrgaa1


    the first 6 letters of simplesam06 mean a whole lot here.
    what I'm trying to say is
    • Irelands economy is in good shape
    • house prices are now realistic
    • Now is the time to buy
    • DOOM & GLOOM merchants should not be allowed to run the country
    • Banks are lending money
    just because I'm looking at it from a POSITIVE point of view and not a DOOM & GLOOM view my views are entitled to be voiced.

    BTW - SIMPLESAM06 - mind your language and your inferences. You do make some valid points but do not ram your DOOM & GLOOM views down my throat or anyone elses. As far as I'm aware we are in a democracy - we do not have to agree but do not, I repeat, do not write derogatory remarks referring to me


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    #82
    stooge
    Registered Users Posts: 1,396 ✭✭✭stooge


    mrgaa1 wrote: »
    what I'm trying to say is
    You can TRY all you want but it just aint true.
    mrgaa1 wrote: »
    • Irelands economy is in good shape
    I wouldnt call negative growth good shape. I wouldnt call an economy heavily reliant on construction/building in 'good shape.
    mrgaa1 wrote: »
    [*]house prices are now realistic
    Realistic compared to where? Some places in dublin have a higher price per square metre than Manhatten! Is THAT reliastic????
    mrgaa1 wrote: »
    [*]Now is the time to buy
    The time to buy is when prices bottom out. If you're saying that prices have bottomed out then you post it up in big bold writing so that I can laugh at it in another 6months when prices drop further.
    mrgaa1 wrote: »
    [*]DOOM & GLOOM merchants should not be allowed to run the country
    Who are these doom and gloom merchants running the country. As far as I can see, the leaders we've had over the last decade have done the exact opposite i.e Told us that everything will be fine despite the warnings from economists that we were gearing up for a fall.
    mrgaa1 wrote: »
    [*]Banks are lending money
    Yes, there are. This is true. But...
    - Are they lending as much as before? NO
    - Are interest rates up? YES
    - Will they go up again? MOST LIKELY (to combat high inflation)
    Put simply:
    You have a choice to put your money in the bank and earn interest i.e. earn money OR
    You have a choice to lend money from the bank at a higher rate of interest and put this into an asset which is currently depreciating. For me its a no brainer.


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    #83
    Ootermus
    Registered Users Posts: 38 ✭Ootermus


    What people need to remember is that rental yields play a very important part in attracting in the long term professional investors who aren't just interested in capital appreciation. At the height of the boom the rental yields were very low at c.2% (maybe even lower), although this was against a backdrop of fairly low interest rates as well, so it wasn't as bizarrely low as some people think. However i think what happened was that as interest rates moved higher at the end of 2005/start 2006, rental yields took longer than they should have to adjust, either through an increase in actual rents or a decrease in prices. This is why we're seeing the current major move up in rents in tandem with the serious fall off in prices, as the adjustment in yields comes more in a 'sharp shock' move rather than a gradual re-alignment. Already yields are more like 4% at the moment, and given the likelihood of more wages rises across the board over the coming months, combined with a fairly tight rental market as it is, rents are more likely to rise further if anything, and so rental yields will too. Rental yields in the 4.5% region will attract in the real long term investors and stabilise the market, and ultimately make renting more expensive than buying in the long term.


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    #84
    punchestown
    Registered Users Posts: 660 ✭✭✭punchestown


    mrgaa1 wrote: »
    the first 6 letters of simplesam06 mean a whole lot here.
    what I'm trying to say is
    • Irelands economy is in good shape
    • house prices are now realistic
    • Now is the time to buy
    • DOOM & GLOOM merchants should not be allowed to run the country
    • Banks are lending money
    just because I'm looking at it from a POSITIVE point of view and not a DOOM & GLOOM view my views are entitled to be voiced.

    BTW - SIMPLESAM06 - mind your language and your inferences. You do make some valid points but do not ram your DOOM & GLOOM views down my throat or anyone elses. As far as I'm aware we are in a democracy - we do not have to agree but do not, I repeat, do not write derogatory remarks referring to me

    Irelands economy is in good shape?:eek: We are haemoraging jobs like nobodys business. Our unemployment jumped to a nine year high last month. Our economy shrank 1.5% in the first quarter of 2008. Our budget deficit nearly quadrupled in the first half of the year to 5.6 billion.
    House prices are far from realistic. You buy now, you are burning 33% of your money straight away. The average price for a home in Dublin is €270,000. That is 7.5 times the average industrial wage. That is still way overpriced and still way out of the reach of many many buyers. Banks tightening of their lending criteria has put paid to borrowers taking out a mortgage for any amount they want and not before time. Now is far from the time to buy. Now is the time to sit, save and wait in the long grass. Vested interests like yourself sitting on a number of investment properties are losing thousands with each passing week and I for one shed no tears.
    I would rather open and honest merchants running the country then somebody like Bertie who lost all control and actively encouraged house price speculation and the mass building of property (much of it poorly built and of poor quality) A decade of price rises spurred build of 70,000 new houses a year (a supply far outweighing demand)
    Banks are lending money, thankfully now with some sort of criteria in place. The days of 100% no deposit required mortgages are in the past and by restricting borrowers to 80% ltv (on realistically priced properties) that is helping drag house prices back to realistic levels. This realistic level is some way off as vested interests like yourself refuse to acknowledge all the warning signs around. People couldnt help themselves when prices were increasing year on year. Now only a fool would step into the market as it currently stands.


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    #85
    Ootermus
    Registered Users Posts: 38 ✭Ootermus


    stooge wrote: »

    Yes, there are. This is true. But...
    - Are they lending as much as before? NO
    - Are interest rates up? YES
    - Will they go up again? MOST LIKELY (to combat high inflation)
    Put simply:
    You have a choice to put your money in the bank and earn interest i.e. earn money OR
    You have a choice to lend money from the bank at a higher rate of interest and put this into an asset which is currently depreciating. For me its a no brainer.

    I take issue with the "Will they (interest rates) go up again? MOST LIKELY" statement. In fact, a few of the banks have started dropping their fixed rates over the last week or so (EBS/IIB), and the others will probably follow in the next couple of weeks. This is as a result of the drop in oil prices and the increased chances of a slowdown in the global economy over the next few months. The actual interest rate markets are currently assuming a cut in rates of 0.75% by the ECB over the next 12mths. This is because a fall in asset prices (houses, equities, corporate bonds) actually has a massive deflationary effect on the economy. So its not "MORE THAN LIKELY" that rates will rise, its actually just an opinion of yours thats way out of kilter with the current market pricing.


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    #86
    martian1980
    Registered Users Posts: 370 ✭✭martian1980


    mrgaa1 wrote: »
    the first 6 letters of simplesam06 mean a whole lot here.
    what I'm trying to say is
    • Irelands economy is in good shape
    • house prices are now realistic
    • Now is the time to buy
    • DOOM & GLOOM merchants should not be allowed to run the country
    • Banks are lending money
    just because I'm looking at it from a POSITIVE point of view and not a DOOM & GLOOM view my views are entitled to be voiced.

    BTW - SIMPLESAM06 - mind your language and your inferences. You do make some valid points but do not ram your DOOM & GLOOM views down my throat or anyone elses. As far as I'm aware we are in a democracy - we do not have to agree but do not, I repeat, do not write derogatory remarks referring to me

    Would you mind not capitalising "doom & gloom"? It's getting quite irritating


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    #87
    Climate Expert
    Closed Accounts Posts: 1,393 ✭✭✭Climate Expert


    renting has strong returns.
    No it doesn't. My apt that I rent is returning about 3% a year. A good 2.5% off interest rates.

    You are an estate agent and a shill.


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    #88
    Calina
    Registered Users Posts: 8,219 ✭✭✭Calina


    Ootermus wrote: »
    This is why we're seeing the current major move up in rents in tandem with the serious fall off in prices, ...

    Rental supply is up massively in the last year. Rents are starting to slow. They ballooned with a supply side issue at the start of 2007 when a lot of property moved from the rental to the sales markets. This is now reversing and rents are on the way down. See DAFT's most recent report for that, also I think Irishpropertywatch.com runs a rental price change report every couple of weeks.

    Major up is not how I would describe rental movements unless you are talking about supply. Rents commanded, definitely not.


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    #89
    stooge
    Registered Users Posts: 1,396 ✭✭✭stooge


    Ootermus wrote: »
    I take issue with the "Will they (interest rates) go up again? MOST LIKELY" statement. In fact, a few of the banks have started dropping their fixed rates over the last week or so (EBS/IIB), and the others will probably follow in the next couple of weeks. This is as a result of the drop in oil prices and the increased chances of a slowdown in the global economy over the next few months. The actual interest rate markets are currently assuming a cut in rates of 0.75% by the ECB over the next 12mths. This is because a fall in asset prices (houses, equities, corporate bonds) actually has a massive deflationary effect on the economy. So its not "MORE THAN LIKELY" that rates will rise, its actually just an opinion of yours thats way out of kilter with the current market pricing.

    Maybe I should have been clearer here. Yes, it's my opinion that rates are more likely to go up than down. What I mean is the ECB rate. I don't forsee a reduction in rates, more likley an increase to combat the eurozone high inflation.Then again, it's just my opinion and I'm prepared to put it out there in writing. If rates go down I'll hold my hands up.

    It's a bit like your OPINION:
    Ootermus wrote: »
    "Given the likelihood of more wages rises across the board over the coming months, combined with a fairly tight rental market as it is, rents are MORE LIKLEY to rise further if anything, and so rental yields will too. "

    "likelihood of more wage rises across the board" -> Wage rises across the public sector I assume you mean?
    "fairly tight rental market" -> do we not have the biggest supply of rentals EVER?
    "rents are more likely to rise" -> why should they if we have a massive oversupply? Thats 'way out of kilter with current morket conditions'.

    A simple example: look at the amount of apartments for rent in sandyford. Also look at how long these aprtments have been up for rent, how many have reduced their asking prices.


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    #90
    Firetrap
    Closed Accounts Posts: 4,442 ✭✭✭Firetrap


    mrgaa1 wrote: »
    the first 6 letters of simplesam06 mean a whole lot here.
    what I'm trying to say is
    • Irelands economy is in good shape
    • house prices are now realistic
    • Now is the time to buy
    • DOOM & GLOOM merchants should not be allowed to run the country
    • Banks are lending money
    just because I'm looking at it from a POSITIVE point of view and not a DOOM & GLOOM view my views are entitled to be voiced.

    BTW - SIMPLESAM06 - mind your language and your inferences. You do make some valid points but do not ram your DOOM & GLOOM views down my throat or anyone elses. As far as I'm aware we are in a democracy - we do not have to agree but do not, I repeat, do not write derogatory remarks referring to me

    Well if you want to go out and buy a house, good luck to you. I think you'll find that most people are sitting back and waiting for the price falls now. Come on down :D


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    #91
    Joseph Kuhr
    Closed Accounts Posts: 169 ✭✭Joseph Kuhr


    Firetrap wrote: »
    Well if you want to go out and buy a house, good luck to you. I think you'll find that most people are sitting back and waiting for the price falls now. Come on down :D

    Yeah wait until its in the papers and Tom, Dick and Harry is doing it LOL. Sound familar?


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