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Do house prices need to increase?

Dionysus

No matter what anybody says, the Irish property market is hugely overpriced at the moment; before the bubble a house cost only 2.5 times the first earner's income, and one time the second earner's income. Furthermore, the average mortgage was only for 20 years, not 35 years.

These facts about the current property market are rarely mentioned in the media.

Anyway, interviewee after interviewee on RTÉ's Drivetime this evening was talking about how good it was for the property market and "liquidity" in the property market that NAMA was going to get involved in selling property.

RTÉ didn't have anybody to challenge this view. It's as if the property market deserves a boost, as if house prices should be more expensive than they are, as if house prices have fallen to their pre-boom level. They haven't fallen to that level; they have much more to fall.

I object to this attempt by elements of the media and state bodies to inflate the already inflated prices of property in this state - it's as if they need another property boom to make up for the sheer stupidity which made them lose money in the most recent one.

In April 2011, do you think property prices need to increase or decrease?

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Comments

Haelium

Bullseye1 wrote: »

So why don't those who are renting continue to do so?

Because they can finally afford a house and now is a great time to buy?

Bullseye1

Haelium wrote: »

The people who can't afford houses now are the ones who didn't profit during the "boom" years. Falling property prices benefit everybody who isn't responsible for the mess we're in tbh.

Most people who bought during the boom bought one house. How did they profit.

Bullseye1

Haelium wrote: »

Because they can finally afford a house and now is a great time to buy?

So yo think if someone who paid €300,000 at the height should now sell to you for €150,000 and end up with no house and a bill for €150,000?

Mike 1972

Bullseye1 wrote: »

Those who have taken out mortgages on properties certainly don't want them to drop any further and why should they.

Its a bit of an overgeneralisation to state that people who own a property benefit from rising prices.

Some obviously do but others suffer (e.g. those who were hoping to eventually buy somewhere better) but for most it doesnt make the slightest odds either way.

Bullseye1 wrote: »

So yo think if someone who paid €300,000 at the height should now sell to you for €150,000 and end up with no house and a bill for €150,000?

If they want/need to sell and €150,000 is the best offer theyre liable to get anytime soon then why the hell not ?

Bullseye1

Mike 1972 wrote: »

Its a bit of an overgeneralisation to state that people who own a property benefit from rising prices.

Some obviously do but others suffer (e.g. those who were hoping to eventually buy somewhere better) but for most it doesnt make the slightest odds either way.

If they want/need to sell and €150,000 is the best offer theyre liable to get anytime soon then why the hell not ?

Only a madman would sell in this Market or someone who is under pressure from banks.

PeterIanStaker

We need to rid the Irish mentality of the insecurity that feeds the complulsive need to own property at any cost. It'll only lead to bubble after bubble and the accompanying corruption.

Bullseye1

PeterIanStaker wrote: »

We need to rid the Irish mentality of the insecurity that feeds the complulsive need to own property at any cost. It'll only lead to bubble after bubble and the accompanying corruption.

I agree.

Mike 1972

Bullseye1 wrote: »

Only a madman would sell in this Market or someone who is under pressure from banks.

Or someone who is looking to move to another part of the country
or someone who is emigrating
or someone whose family have moved out
or someone who has split with their partner
or someone who wants a bigger house (good time to buy and all that)
or someone who isint delusional enough to think prices are going to rise anythime soon
Or someone who ....(10,000 other reasons)

Saila

Bullseye1 wrote: »

Only a madman would sell in this Market or someone who is under pressure from banks.

only a madman would buy in the boom when they couldn't actually afford it LONG TERM, if you're in the situation of having to sell, you want to do it soon they have a LONG way to fall yet, better to get 1/2 of nothing for it than 1/3 of nothing.

Bullseye1

Saila wrote: »

only a madman would buy in the boom when they couldn't actually afford it LONG TERM, if you're in the situation of having to sell, you want to do it soon they have a LONG way to fall yet, better to get 1/2 of nothing for it than 1/3 of nothing.

Alot of the problem lies with the banks offering 100% and 110% mortgages without proper stress testing. It's inherently breed into Irish people to own your own propery because rent is dead money. Personally i disagree. However the banks should be sharing in the deflation of propery prices. But of course they won't.

If you have to sell then you have to sell and maximise the sale price.

Jesus Wept

In before rent is dead money.
oh noes.

That money is DEAD. It's ****ing dead jim.

Haelium

Bullseye1 wrote: »

So yo think if someone who paid €300,000 at the height should now sell to you for €150,000 and end up with no house and a bill for €150,000?

Yes, that's capitalism baby! They took the risks(Stupidly) and now I have an opportunity to make a good investment unlike they did.

Haelium

Bullseye1 wrote: »

Most people who bought during the boom bought one house. How did they profit.

They had a house, a well paying job and weren't burdened with the debts caused by the previous generation?

Mike 1972

Bullseye1 wrote: »

It's inherently breed into Irish people to own your own propery because rent is dead money

Nope

It's inherently breed into Irish people to own your own propery because in Ireland the alternatives (a largely unregulated and gawdaful private rental sector and a largely unobtainable and brutal local authority sector) are so utterly shyte.

Balmed Out

Bullseye1 wrote: »

Alot of the problem lies with the banks offering 100% and 110% mortgages without proper stress testing. It's inherently breed into Irish people to own your own propery because rent is dead money. Personally i disagree. However the banks should be sharing in the deflation of propery prices. But of course they won't.

If you have to sell then you have to sell and maximise the sale price.

The banks are state owned so what youre really saying is you want people who didnt promote the housing bubble to help those who did.

Anyhow whats the big problem unless emigrating or have lost your job. Others moaning about negative equity ont make too much sense to me.

Youre moving, you sell your house for a lot less then you bought it but the house you buy costs a lot less then it did before too.

If you have to sel,l sell now for an asking price lower then all competitors. That way you will sell now rather then the property sitting on the market for a few years and being eventually sold for far less.

lorsric

No - house prices were over inflated to begin with and as wages were not comparitive, how were people realistically meant to buy €400,000 houses on 2 €25,000 salaries? Does not add up

Saila

Bullseye1 wrote: »

Alot of the problem lies with the banks offering 100% and 110% mortgages without proper stress testing. It's inherently breed into Irish people to own your own propery because rent is dead money. Personally i disagree. However the banks should be sharing in the deflation of propery prices. But of course they won't.

If you have to sell then you have to sell and maximise the sale price.

not sure why you're quoting my post, but the fact is there was no one forcing them to sign the contracts they did. its a bit like saying you use because there are drug dealers in your area [unless you are in marseille and you're gene hackman that is]

Bullseye1

Saila wrote: »

not sure why you're quoting my post, but the fact is there was no one forcing them to sign the contracts they did. its a bit like saying you use because there are drug dealers in your area [unless you are in marseille and you're gene hackman that is]

And no one is forcing people to buy now.

Saila

lorsric wrote: »

No - house prices were over inflated to begin with and as wages were not comparitive, how were people realistically meant to buy €400,000 houses on 2 €25,000 salaries? Does not add up

they were not, thats the whole point

ilovesleep

lorsric wrote: »

No - house prices were over inflated to begin with and as wages were not comparitive, how were people realistically meant to buy €400,000 houses on 2 €25,000 salaries? Does not add up

And nobody forced the banks to lend so much.

Balmed Out

ilovesleep wrote: »

And nobody forced the banks to lend so much.

??? so

The banks are owned by the taxpayers, if you think we should have to pay for peoples houses who made he choice to pay too much and contribute to the f up we have now..........

[Deleted User]

Hopefully come down and then when I buy a house start to rise again.

gosuckonalemon

Is there any reason why somebody crippled by negative equity would not want house prices to increase again?

Bat Fasterd

gosuckonalemon wrote: »

Is there any reason why somebody crippled by negative equity would not want house prices to increase again?

None what so ever. And they will rise in price again. It will take about 15 to 20 years though to reach the prices of 2006/7

What I can't wrap my head around is people signing contracts for 20+ years and then getting into a panic a few years into it.

This modern need for instant appeasement is irritating.

mickydoomsux

Bat Fasterd wrote: »

What I can't wrap my head around is people signing contracts for 20+ years and then getting into a panic a few years into it.

Because the media tells them to panic.

Bat Fasterd

mickydoomsux wrote: »

Because the media tells them to panic.

I'm not sure I agree with that.

The one phrase being bandied about by the media that they really need pulled up on is mentioning negative equity willy nilly. It only exists if you have to sell your house and you are getting less that you paid for it. It is that simple.

We live in a country that likes to "flip" property. It is not always going to be an upward curve but there will always be upward curves.

Look at average property house prices in the UK since 1980 for example.

desertcircus

Bat Fasterd wrote: »

None what so ever. And they will rise in price again. It will take about 15 to 20 years though to reach the prices of 2006/7

No. In January 2007 the average house was changing hands for over three hundred thousand euro, at a point when half of all Irish households were on less than thirty-six thousand a year. The current slide in house prices won't hit a stop until the average house price is about treble the average household wage - and there's no way the average Irish household will be on over a hundred thousand euro a year in 2030.

The Irish property bubble wasn't a faster-than-ideal market expansion; it was a catastrophic fiction built on clouds. The prices of 2006 and 2007 shouldn't be treated as something it'll take a while to get back to; we're not going to get back to those prices in real terms. Ever.

Balmed Out

Bat Fasterd wrote: »

I'm not sure I agree with that.

The one phrase being bandied about by the media that they really need pulled up on is mentioning negative equity willy nilly. It only exists if you have to sell your house and you are getting less that you paid for it. It is that simple.

We live in a country that likes to "flip" property. It is not always going to be an upward curve but there will always be upward curves.

Look at average property house prices in the UK since 1980 for example.

It doesnt even matter to many of those. If your moving to a similarly priced housed you still end up owing the bank the same.

Bat Fasterd

desertcircus wrote: »

No. In January 2007 the average house was changing hands for over three hundred thousand euro, at a point when half of all Irish households were on less than thirty-six thousand a year. The current slide in house prices won't hit a stop until the average house price is about treble the average household wage - and there's no way the average Irish household will be on over a hundred thousand euro a year in 2030.

The Irish property bubble wasn't a faster-than-ideal market expansion; it was a catastrophic fiction built on clouds. The prices of 2006 and 2007 shouldn't be treated as something it'll take a while to get back to; we're not going to get back to those prices in real terms. Ever.

You are not factoring in the stupidity of people. You think those two and three year olds running around the place will even remember all this bar some snippet in a history book somewhere?

Have you considered the average salary in the 80s versus now?

Seriously look at the UK property boom of the late 80's and then the crash 91/2 and then look at their house prices in 2005.

Mister men

Still at least 40% overpriced. A lot of people are out of pride refusing to sell for a realistic price. Until those houses that where priced at 450,000+ at the height of the delusion fall to in and around the 165k to 185k mark you are'nt seeing any value. Mind you if the economy fails to bounce back in 2013 (very possible) then that price will have to drop below 150k to see value.