Housing Bubble Bursting

asdasd · 21-01-2009 12:08pm

Those who are lecturing us now on what is good for us might begin each of their diatribes with an apology to the tens of thousands of people who now find themselves in negative equity based on their flawed advice and predictions.

It is up to every individual to make his own judgement on the biggest financial decision of his/her life. I am in my early thirties and dont own a house, despite good pay, because I stayed out. There was plenty of that information available, and the reaction when you mentioned it was social ostricisation. We are generally talking about people with university degrees here. You are big boys now. There would have been no boom without buyers.

( You just have to read the early part of this thread to see that the "vested interests" was far more than the ruling classes)

ZYX · 21-01-2009 12:15pm

Firetrap wrote: »

Even Bertie's most vehement enemies wouldn't go so far as to blame him for the global recession but he has to be responsible for some of what's happened here.

I'm of the belief that the property bubble, and government policy that encouraged it, have caused quite a lot of our current economic woes.

I know this is a thread about the property bubble, but, on the wider economy the government is totally to blame. When the money was coming in from property taxes, the government spent like there was no tomorrow. But now tomorrow has come and there is not enough money left. Spending increased everywhere without any question of value for money. For example Mary Harney has now spent almost as much on health in her period as health minister as every other minister of health combined, since the founding of the state. Can anyone see any great improvements in the health system to justify such spending? If even over the last 5 years the government had restricted government spending to only increase in line with inflation we would not be in the mess we are now.
Obviously the government could not have stopped the global recession but they could have been better prepared for it. The blame lies squarely with Bertie, Cowen, Harney et al.

Caoimhín · 21-01-2009 12:19pm

ZYX wrote: »

Obviously the government could not have stopped the global recession but they could have been better prepared for it. The blame lies squarely with Bertie, Cowen, Harney et al.

Politicians say the darndest things when they are trying to get elected.

Dob74 · 21-01-2009 11:55pm

travellerI wrote: »

The 'we as a society messge' is one which is now being promolugated by vested interests including politicians, media, bankers and property interests to excuse the dire situation we now find ourselves in.

The current situation in Ireland is characterised by two factors:

1. The U.S. led banking crisis. I dont know where the word credit crunch emanated from but was likely thougth up by a Bush spin doctor as a neutral non-specific term to get the U.S. off the hook for its central role in this crisis. Think collateral damage for describing dead civilians after a bombing raid.

2. A monumental property bubble whose ultimate effects remain unquantified but we at least know that there are a load of empty ghost estates all over Ireland and it now appears that the ubiquitous one bed apartment is practically unsellable.

The consequnce of this for Ireland is that while many Governments are tackling this crisis with one hand tied behind their backs the Irish Government are doing so with both hands tied behind their backs US led banking crisis and property crash. Remember our crash is the crashiest of them all

During the property bubble in my mind this country was like how I imagine North Korea to be. Loudspeakers everywhere pumping out a single message -property will make you rich. Who were the messengers? Economists who worked for banks, economists who worked for estate agents, the politicians and the property developers. All these interest groups had season tockets for RTE, Newstalk and the newspapers and their views went practically unchallenged. The dissidents Morgan Kelly, Alan Ahearne, David McWilliams were told to commit suicide by the Prime Minster = a statement on its own that has surely put paid to any presidential ambitions on his part.

Now in deflating bubble Ireland the same messengers are there but the message is a new one. You are living beyond your means and it is all the fault of the public service. How did that happen?

In 2007 Brendan O'Connor was still encouraging smart ballsy guys to buy property. As this message doesn't suit anymore he is now followng the its all the fault of the public servants line. And what are all the vested interest economists saying now - its all the fault of the public service. These are the same gaurds and nurses who had to seek pay increases in the property bubble years to even think of affording a hovel 50 mlies from where htye worked

I will listen to some of these vested interests if they can explain to me how a 10 % drop in property prices one year and a 15 % drop the next is a soft landing. Those who are lecturing us now on what is good for us might begin each of their diatribes with an apology to the tens of thousands of people who now find themselves in negative equity based on their flawed advice and predictions.

Excellant post, however one thing I would disagree with you, is that it was the US's fault. The gov and especially FF blame the US every chance they get. I think the US was the first country to identify the problem and go public. In this country there are still people in denial about the situation even now. Only a few banks in the states have gone under out of thousands, however it looks like every bank in this country is going to be nationalised. The US is an open country with plenty of media angles, this country's media generally says the same thing.
I am also sick of the public sector bashing. I know they have good conditions but they still have to work for it. Aparently if you are not in the investment game and you work for a living, the media doesn't feel you are untitled to get payed for it.

Blackjack · 22-01-2009 12:39am

ZYX wrote: »

I know this is a thread about the property bubble, but, on the wider economy the government is totally to blame. When the money was coming in from property taxes, the government spent like there was no tomorrow. But now tomorrow has come and there is not enough money left. Spending increased everywhere without any question of value for money. For example Mary Harney has now spent almost as much on health in her period as health minister as every other minister of health combined, since the founding of the state. Can anyone see any great improvements in the health system to justify such spending? If even over the last 5 years the government had restricted government spending to only increase in line with inflation we would not be in the mess we are now.
Obviously the government could not have stopped the global recession but they could have been better prepared for it. The blame lies squarely with Bertie, Cowen, Harney et al.

The Government were never able to prevent the bubble, but they could have helped. They did not act, the opposition were all too happy be opposition doing diddly squat, as opposed to representation of the population, and all of a sudden it's every one elses fault but those that invested in overpriced property, did not invest in overpriced property (the worst affected) or those that never bothered scratching their holes because they knew someone else would do so for them.

We have a serious problem with regards a sense of entitlement in this country.

ntlbell · 22-01-2009 12:02pm

Blackjack wrote: »

We have a serious problem with regards a sense of entitlement in this country.

That should be cleared up soon when their entitlment is in butter vouchers.

ronbyrne2005 · 22-01-2009 12:26pm

http://www.irishtimes.com/newspaper/property/2009/0122/1232474672310.html

Hang on and prices will be much lower next year.

who007 · 22-01-2009 12:29pm

ronbyrne2005 wrote: »

http://www.irishtimes.com/newspaper/property/2009/0122/1232474672310.html

Hang on and prices will be much lower next year.

They'll have to be, to match the low mortgages the banks will give!

K-9 · 22-01-2009 7:30pm

who007 wrote: »

They'll have to be, to match the low mortgages the banks will give!

And the developers pay off some of their loans and see how much debt they've left. They may have to reduce more to pay off debt.

smooth operater · 22-01-2009 7:44pm

ronbyrne2005 wrote: »

http://www.irishtimes.com/newspaper/property/2009/0122/1232474672310.html

Hang on and prices will be much lower next year.

Irishtimes wrote: »

The last remaining homes are for sale at the 620-unit development through Sherry FitzGerald. Prices start at €180,000 for one-bed apartments, compared to €285,000 when the scheme was first launched back in 2006, a cut of 37 per cent. Three-bed duplexes were priced from €560,000 in 2006, now they are priced from €335,000, a reduction of €225,000 or 40 per cent. In Rathcoole village, Finnegan Menton is selling homes at Peyton on the outskirts of the village. Prices start at €290,000 for two-bed apartments going up to €525,000 for four-bed semi-detached houses.

€285,000 for a 1 bed apartment, thats a shockin price. Even during the boom boom times. That developer will still make a massive profit on that at 180,000

K-9 · 22-01-2009 8:01pm

smooth operater wrote: »

€285,000 for a 1 bed apartment, thats a shockin price. Even during the boom boom times. That developer will still make a massive profit on that at 180,000

If he bought in 05/06, I'd doubt it would be a massive profit.

With Loan Interest added on over 2/3 years he could be doing well to break even.

BobbyD10 · 22-01-2009 10:46pm

I find it very interesting looking back on comments about the property market back say two years ago, to see what the attitudes were like about buying property.

Looking back on this topic for instance,

http://www.askaboutmoney.com/showthread.php?t=24631

You notice most consensus is prices are going up isn't it great, I bought my 2-bed apartment for 375k and three months later it's worth 415k.

Most people saw it as money growing on trees and never expected it to fall at all.

A quick search of daft in the area reveals 2-beds for under 300k.

http://www.daft.ie/searchsale.daft?id=339032&search=1

As previous posters have mentioned there is still denial out there as regards the price their property is worth.

As in 410k for this:

http://www.daft.ie/searchsale.daft?id=413289&search=1

There may be some differences but you get the point.

I think the people that price their property in line with market expectations will be the one's that sell, and the one's in denial will probably sell at even lower price than the one's that sold in late 08 into 09.

K-9 · 22-01-2009 11:16pm

BobbyD10 wrote: »

I find it very interesting looking back on comments about the property market back say two years ago, to see what the attitudes were like about buying property.

Looking back on this topic for instance,

http://www.askaboutmoney.com/showthread.php?t=24631

You notice most consensus is prices are going up isn't it great, I bought my 2-bed apartment for 375k and three months later it's worth 415k.

Indeed, just look at the start of this thread too. Sure isn't Ireland different. The 10-15% rises in the first half of 06 really killed the market. Things had been levelling off before that.

BobbyD10 wrote:

Most people saw it as money growing on trees and never expected it to fall at all.

I could never understand this attitude, especially if an owner occupier. Most people used it to trade up which meant the new property was higher again or remortgage, not a good idea. The smart ones used it to trade down or move to a cheaper area.

BobbyD10 wrote:

A quick search of daft in the area reveals 2-beds for under 300k.

http://www.daft.ie/searchsale.daft?id=339032&search=1

As previous posters have mentioned there is still denial out there as regards the price their property is worth.

As in 410k for this:

http://www.daft.ie/searchsale.daft?id=413289&search=1

There may be some differences but you get the point.

I think the people that price their property in line with market expectations will be the one's that sell, and the one's in denial will probably sell at even lower price than the one's that sold in late 08 into 09.

There definitely is denial out there about prices. I suppose nobody wants to admit they made mistakes!

IronMan · 23-01-2009 12:10pm

BobbyD10 wrote: »

Looking back on this topic for instance,

http://www.askaboutmoney.com/showthread.php?t=24631

There is some great posts in that thread. My personal favourite is this fluff piece: http://www.askaboutmoney.com/showpost.php?p=195728&postcount=81

RuggieBear · 23-01-2009 12:21pm

IronMan wrote: »

There is some great posts in that thread. My personal favourite is this fluff piece: http://www.askaboutmoney.com/showpost.php?p=195728&postcount=81

lol...sign me up stepaside sounds like ****ing Utopia!

ell · 23-01-2009 1:57pm

I apologise in advance

Up Tipp!

++++++++++++++++++++++++++++++++++++++++++++++++

On Stepaside versus Co. Tipperary debate from an investment point of view - you have to factor in lifestyle. Some facts:

- apart from Stepaside, Tipperary has the highest population of commuting workers in the country. There are few jobs in the county. Also, it's population is growing and some of the largest property investments are being made in the area - e.g. many of the newly half built ghost estates, all now greatly reduced, in various villiages in Tipperary which are less than 40 minutes by helicopter to Dublin hold great potential for the canny investor.
- Tipperary is also approx 30 minutes drive from Limerick- the fourth larget shopping town in Ireland. I don't mean to sound like the stereotypical 30 something yuppie that I am - but I don't want to shop in the Ilac Centre, Stephen's Green, Dundrum or Jervis street! Dublin prices are a ripoff. As for buying fresh produce - I'd rather go to the farmers market in Clomnel or Cahir were prices are MUCH cheaper than Dublin prices, rather than Moore street.
- Tipperary is right in the middle of the newly upgraded M8 - Dublin's busiest road servicing the majority southern Ireland.
- Tipperary is also right in the middle (0 minutes drive!!) from some of the most beautiful scenery in Ireland.
- The proposed route for Tipperary bypass will be going via Bansha and onto LImerick.
- some people think that "just having the village pub" is a good thing (actually there are eighteen hundred pubs, too many to name in fact. All are cheaper than Dublin.
- Tipperary like Stepaside has its own issues with the cocane snorting classes, though Tipp dwellers consumes less champage, preferring whiskey and bulmers and the jeeps have *REAL* mud on them. Also, we don't have the polution both air, water and noise of a location just off one of the biggest car parks in Dublin.
- Tipperary is approx 55 minutes drive from Cork - often referred to as the "real capital of Ireland"
- at present, let's face it - most of us drive - and fully intend on doing so in the foreseeable future. On the rare occasion I actually want to go anywhere - I take a horse, the helicopter or hitch a lift. It's not a problem.
- I don't doubt that there are excellent investments to be made in the new Stepaside - however, it's a lifestyle choice for the buyer / renter. For the same price as a 40 sq m apartment in the Stepaside you could buy a mansion in Tipperary - including three cows, a duck and room for a pony! Do you really want to live in a noisy, smoggy city - or would you prefer a location that has the best of both worlds - near to the town and in the country?
- when push comes to shove - it's all about supply and demand. 3 bed semis are usually in highest demand in Dublin but why buy those when you can get a decent sized DETACHED family house in tipperary?
- however if it's a choice between a tiny large apartments in the suburbs versus a nice family home in Tipperary- the latter is open to a greater pool of potential buyers (singles, couples, and possibly couples with small kids, ranchers, those looking to set up their own democracy) - and that's what will survive the inevitable cooling in the property market.

pipsqueak · 23-01-2009 2:02pm

And that report was from tipperary tourism board!:rolleyes:

ell · 23-01-2009 2:06pm

It's amazing alright how paper never refuses ink

Blackjack · 24-01-2009 12:11am

ell wrote: »

I apologise in advance Up Tipp!

++++++++++++++++++++++++++++++++++++++++++++++++

On Stepaside versus Co. Tipperary debate from an investment point of view - you have to factor in lifestyle. Some facts:

- apart from Stepaside, Tipperary has the highest population of commuting workers in the country. There are few jobs in the county. Also, it's population is growing and some of the largest property investments are being made in the area - e.g. many of the newly half built ghost estates, all now greatly reduced, in various villiages in Tipperary which are less than 40 minutes by helicopter to Dublin hold great potential for the canny investor.
- Tipperary is also approx 30 minutes drive from Limerick- the fourth larget shopping town in Ireland. I don't mean to sound like the stereotypical 30 something yuppie that I am - but I don't want to shop in the Ilac Centre, Stephen's Green, Dundrum or Jervis street! Dublin prices are a ripoff. As for buying fresh produce - I'd rather go to the farmers market in Clomnel or Cahir were prices are MUCH cheaper than Dublin prices, rather than Moore street.
- Tipperary is right in the middle of the newly upgraded M8 - Dublin's busiest road servicing the majority southern Ireland.
- Tipperary is also right in the middle (0 minutes drive!!) from some of the most beautiful scenery in Ireland.
- The proposed route for Tipperary bypass will be going via Bansha and onto LImerick.
- some people think that "just having the village pub" is a good thing (actually there are eighteen hundred pubs, too many to name in fact. All are cheaper than Dublin.
- Tipperary like Stepaside has its own issues with the cocane snorting classes, though Tipp dwellers consumes less champage, preferring whiskey and bulmers and the jeeps have *REAL* mud on them. Also, we don't have the polution both air, water and noise of a location just off one of the biggest car parks in Dublin.
- Tipperary is approx 55 minutes drive from Cork - often referred to as the "real capital of Ireland"
- at present, let's face it - most of us drive - and fully intend on doing so in the foreseeable future. On the rare occasion I actually want to go anywhere - I take a horse, the helicopter or hitch a lift. It's not a problem.
- I don't doubt that there are excellent investments to be made in the new Stepaside - however, it's a lifestyle choice for the buyer / renter. For the same price as a 40 sq m apartment in the Stepaside you could buy a mansion in Tipperary - including three cows, a duck and room for a pony! Do you really want to live in a noisy, smoggy city - or would you prefer a location that has the best of both worlds - near to the town and in the country?
- when push comes to shove - it's all about supply and demand. 3 bed semis are usually in highest demand in Dublin but why buy those when you can get a decent sized DETACHED family house in tipperary?
- however if it's a choice between a tiny large apartments in the suburbs versus a nice family home in Tipperary- the latter is open to a greater pool of potential buyers (singles, couples, and possibly couples with small kids, ranchers, those looking to set up their own democracy) - and that's what will survive the inevitable cooling in the property market.

Exceptional, well done. I am lost for words in trying to describe how brilliant the above is.

ronbyrne2005 · 24-01-2009 12:49pm

Sunday Times have their annual price guide for houseprices all over the country. I think they get estate agents to compile it, so expect to see massive drops as estate agents attempt to manage vendors expectations.

Caoimhín · 24-01-2009 1:43pm

ronbyrne2005 wrote: »

Sunday Times have their annual price guide for houseprices all over the country. I think they get estate agents to compile it, so expect to see massive drops as estate agents attempt to manage vendors expectations.

I cant see the developers or buy to let "investors" liking that.

astrofool · 24-01-2009 10:44pm

Would be great if they could compare it to last years estimates

mrgaa1 · 25-01-2009 1:44pm

If the AIB and BOI revalue their land bank loans then we will see some serious shifting in house prices. Lets say someone paid 5m for land where planning was for 50 houses. Thats 100k per house before any work starts. So if the land bank was revalued at 2.5m thats an immediate 50k house price drop - at least it should be.

ell · 25-01-2009 7:50pm

Blackjack wrote: »

Exceptional, well done. I am lost for words in trying to describe how brilliant the above is.

the devil makes work for idle hands

mikemac · 25-01-2009 7:57pm

Pffft, that's Tipp South

Tipperary North is where it's at! :cool:

ixoy · 25-01-2009 8:11pm

ronbyrne2005 wrote: »

Sunday Times have their annual price guide for houseprices all over the country. I think they get estate agents to compile it, so expect to see massive drops as estate agents attempt to manage vendors expectations.

Had a flick through it and it's a 20% drop on last year's prices based on what agents expect a house would sell for, rather than what it's priced at. They also stick their neck out and have the prices for Jan '08, Jan '09 and Jan '10 and it's not good news for property.

asdasd · 25-01-2009 8:15pm

for Jan '08, Jan '09 and Jan '10 and it's not good news for property.

Got a link?

ixoy · 25-01-2009 8:19pm

asdasd wrote: »

Got a link?

Not to the full report, but I have one to an article on it.

Actually, it is on the site: here.

Ally Dick · 26-01-2009 12:16am

punchestown wrote: »

I wouldnt put the shyster in charge of the Beaumont House Golf society!

He's probably in it already. He's good buddies with Mr Carew and drinks in Beaumont every Saturday with his nodding dog yes men and his 'lovely' girlfriend

spockety · 26-01-2009 11:02am

ixoy wrote: »

Not to the full report, but I have one to an article on it.

Actually, it is on the site: here.

What a ludicrous survey. It seems to suggest that Dublin 16 has already bottomed out!

haha.. o---kay.

"Dublin 16 is different"?

Housing Bubble Bursting

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