Housing bubble starting to pop?

whizzbang · 08-09-2006 4:06pm

Cantab. wrote:

Of the remaining companies, I'd say C&C, Elan and Ryanair will do well - a depressing country requires lots of alcohol, a depressing country requires lots of medication, and a depressing country requires lots of aeroplanes to get the young and the immigrants out.

Even the other companies has issues!

Elan: Most pharmacuticals use oil or oil derived products in their creation. Also this manufacturing takes lots of energy, energy prices are going up.
Ryanir: Burns oil like there is no tomorrow, I don't their $25 dolalr a barrel hedged oil will last much longer.
Grafton: Make lots of money from builders, they own builders suppliers and DIY stores I think. (to be fair DIY will do well in a crash as people try and do up their houses befroe a sale.)

C&C and Kerry will have us full of beer and butter so its not all bad

SimpleSam06 · 08-09-2006 4:57pm

Just found this interesting article about Bush, which includes a segment on hig mortgage repayments over there...

...the Washington Post has made an early bid to coin the critical catch phrase of the 2006 mid-terms: mortgage moms. The paper found that, despite a reasonably strong American economy, many people were feeling the pinch of rising petrol prices and payments to the bank on their homes.

Cantab. · 08-09-2006 4:59pm

Read what you care into this:

http://www.askaboutmoney.com/showpost.php?p=274675&postcount=3526

whizzbang · 08-09-2006 5:39pm

Cantab. wrote:

Read what you care into this:

http://www.askaboutmoney.com/showpost.php?p=274675&postcount=3526

May as well make it unavoidable

daft.ie for sale stock July and August

Sponge Bob · 08-09-2006 5:39pm

Cantab. wrote:

Read what you care into this:

Its obviously a totally corrupt or unindexed database on Daft . Look at the figures for Loughrea in Co Galway and for all of east Galway really like Ballinasloe where daft is selling more houses than there are in Loughrea and listing everything about 8 times .

Its a good way to make yourself look big in Dublin

So its meaningless, when they clean it up properly it will be under 10,000 !

Sizzler · 08-09-2006 5:59pm

Sponge Bob wrote:

They will panic and (try to) dump. This is noticeable in Galway already but the auctioneers have so far throttled the supply on the market (their mates in other words)

If you ring around some of the big auctioneers in Galway today and say you are thinking of selling in Doughiska they will refuse your bizniess because they have a 'pipeline' of their mates gaffs to sell first.

Sponge Bobby my square friend, it would be useful if you educated the rest of the respondees on the 'quality' of the afforementioned Doughiska when using it to back up your argument.

For those of you not from the Galway area Doughiska is probably one of the biggest skips the city has known in many a year and the reason people cant sell their houses in that area is simply because the area has acclaimed a reputation now for being an out and out sh1thole.

There are areas like this in every Irish city, its like me saying...Theres 5 gaffs up for sale in Darndale in Dublin that have for sale signs on them for the past 6 mths....or theres 3 gaffs in St.Mary's Park in Limerick etc etc.
There will always be such examples, merely because they are undesirable.

Such examples is not a fair representation of the housing market.

SimpleSam06 · 08-09-2006 6:01pm

SimpleSam06 wrote:

Just found this interesting article about Bush, which includes a segment on big mortgage repayments over there...

...the Washington Post has made an early bid to coin the critical catch phrase of the 2006 mid-terms: mortgage moms. The paper found that, despite a reasonably strong American economy, many people were feeling the pinch of rising petrol prices and payments to the bank on their homes.

Edit: spleling. Also let this be an object lesson in the use of the "edit" as opposed to the "quote" button.

gamer · 08-09-2006 6:05pm

makes no difference to average punter,if the house goes up,by 30percent, the dangerous phase is when some people,start,borrowing money,on the basis of their rising house value, 90percent of people buy a house to live in ,not as a financial investment.as long as people can pay the mortgage ,they are ok.

Sizzler · 08-09-2006 6:19pm

gamer wrote:

makes no difference to average punter,if the house goes up,by 30percent, the dangerous phase is when some people,start,borrowing money,on the basis of their rising house value, 90percent of people buy a house to live in ,not as a financial investment.as long as people can pay the mortgage ,they are ok.

Mate Ive said this before

What you will find is there are punters here that will come up with every other excuse imaginable regarding bubbleicious downfall !

ronbyrne2005 · 08-09-2006 6:19pm

gamer wrote:

makes no difference to average punter,if the house goes up,by 30percent, the dangerous phase is when some people,start,borrowing money,on the basis of their rising house value, 90percent of people buy a house to live in ,not as a financial investment.as long as people can pay the mortgage ,they are ok.

Not if they want to trade up/move house or if the economy enters a recession from construction industry slowdown etc. It s far from being a case of being able to afford the mortgage with todays salary.

faceman · 08-09-2006 6:53pm

Sponge Bob wrote:

They will panic and (try to) dump. This is noticeable in Galway already but the auctioneers have so far throttled the supply on the market (their mates in other words)

If you ring around some of the big auctioneers in Galway today and say you are thinking of selling in Doughiska they will refuse your bizniess because they have a 'pipeline' of their mates gaffs to sell first.

dude i can appreciate everyone having extremist opinions when it comes to property but your statement there is absolute tosh. I know someone who is trying to sell property in Doughiska and i also know 2 punters who own property in galway (outside doughiska) The inability to sell houses in doughiska has nothing to do with auctioneers. The area is notorious in galways with teh same pulling power as certain areas in limerick and certain north dublin locations too...

Also to prove you wrong i rang some galway auctioneers today with a pretend address in doughiksa and my business was not refused. I invite anyone else to try.

Also a point to note about galway, (i have done my homework) rental demand in galway currently exceeds supply. Supply and demand effect rents as we all know. so when the "bubble bursts", and people chose to rent instead of buy as many posts here advise people to do. This will increase rental demand. Shock horror what will happen? Hmmm it mite be a good idea to reassess whats cheaper, rent or mortgage when that happens. im still waiting on someone to actually tell me when (even closest year will do) property prices in dublin will go down, see my post from a few days ago.

inflated prices in property, yeah no secret. house price inflation starting to slow. yep no secrets there. negative equity for most homeowners on the cards. me thinks not. Interest rates expected to rise for years to come? Nope, some speculate that a decrease could be on the cards as early as late '07. Its all swings and roundabouts and maggie thatcher's not running the country. Im sure no one disagrees that the price of petrol is well overinflated too. Maybe i shud buy a petrol station?

now leave me alone im off to invest in polish call centres!!

SimpleSam06 · 08-09-2006 6:58pm

faceman wrote:

d
Also a point to note about galway, (i have done my homework) rental demand in galway currently exceeds supply.

Erm its September. Theres a college and national uni in Galweh. Students are what, a quarter of the city population around here? Come back to me next April and tell me how demand is doing...

Pa ElGrande · 08-09-2006 8:12pm

Sizzler wrote:

There are areas like this in every Irish city, its like me saying...Theres 5 gaffs up for sale in Darndale in Dublin that have for sale signs on them for the past 6 mths....or theres 3 gaffs in St.Mary's Park in Limerick etc etc.
There will always be such examples, merely because they are undesirable.

Such examples is not a fair representation of the housing market.

This would be 'unattractive' property then

Sizzler wrote:

Mate Ive said this before What you will find is there are punters here that will come up with every other excuse imaginable regarding bubbleicious downfall !

Thats exactly what I'm saying as well, as long as you don't need to sell and can afford the mortgage payments you will be ok, and this will likely be the situation for the majority.
There has been a recession underway in the manufacturing sector, due to the migration of manufacturing eastwards, The only thing holding the sector up is cheap labour provided by immigration (the same is true for tourism and pubs), while we try to attract new investment in other industries to create employment 'the knowledge economy', how will this will pan out in the future and what place will there be for unskilled workers? This recession has been masked by the construction boom as most of those displaced from manufacturing have been able to find jobs in that sector or other related services. Manufacturing is important since its the primary source of non-debt fueled liquidity in the economy, the construction boom on the otherhand is largely dependent on debt, it creates no new wealth, it transfers wealth from the productive generation to the retirees. We are taking on debt at over €4 billion a month, for a population of 4.2 million, with a working population of 2.2 million, this is insane! :eek:
This flow of credit is what makes property prices rise, the higher property prices attract more credit, the prices rise more, the experience of a 10 year period of rising prices has induced a happy confidence among both lenders and borrowers, while calling forth greater supply of property to meet what has to some extent become speculative demand. Of course, this whole interaction will go into reverse with negative consequences for Ireland.....

JimmySmith · 08-09-2006 8:24pm

Sponge Bob wrote:

They will panic and (try to) dump. This is noticeable in Galway already but the auctioneers have so far throttled the supply on the market (their mates in other words)

If you ring around some of the big auctioneers in Galway today and say you are thinking of selling in Doughiska they will refuse your bizniess because they have a 'pipeline' of their mates gaffs to sell first.

By the time they get 'around' to you ...next year..... it will be too late.

rofl. What tosh. Made up again by Sponge Bob
i called a few estate agents there today for the laugh too and they nearly bit the hand off me over the phone to sell my pretend property in Doughiska.
one of them says to me 'Has something happened in Doghiska, everyone wants to sell today'
I think i'm not the only one who called

Brilliant.

Pa ElGrande · 08-09-2006 9:41pm

Only asking €550,000

08-09-2006 10:33pm

Pa ElGrande wrote:

Only asking €550,000

for which the house or the car

08-09-2006 10:37pm

You could finance this home from...
€2615 pm*
With First Active

*92% Mortgage for 25 years @ 3.8% APR Var

Worth EVERY penny

08-09-2006 10:45pm

actually Im starting to get angry again
these houses worth half a million are being bought up by people who can avail of interest only mortgages etc and then are being sold later at higher prices
this has been going on for years and its about time it stopped
ITS DISGUSTING
People should be hung for this
We killed and fought the British over land and now we do it to ourselves
Any one else agree with a call for blood? goddamn my head is starting to melt at the thoughts of people gettin rich on others misery

08-09-2006 10:45pm

oh did I mention I want blood?

Sizzler · 08-09-2006 11:02pm

Pa ElGrande wrote:

Only asking €550,000

Its in Malahide roysh, focking major potential roysh !

Someone will buy that, gut it and have it back on the market in 12 mths for 700K and will get it :eek:

Shane™ · 08-09-2006 11:52pm

faceman wrote:

im still waiting on someone to actually tell me when (even closest year will do) property prices in dublin will go down, see my post from a few days ago.

Sorry to quote myself, but your answer is in my post from a few days ago.

me wrote:

A) When did the bubble start?
The seed was planted with the Celtic tiger

When did you genuinely believe there was a bubble?
March 06, outbid third time in a row by investors, looked like a pyramid scheme TBO

C) When did you start to believe it will burst? (Honestly!)
After the first SSIA's came out, went form a trong to just me, outbid by 30k to me offering the asking price with only the auctioneer bidding against me (property still on market)

D) When is it going to 'pop'?
After the SSIA's have drained from the market (August 07)

E) Provide a definition of your understanding of the word 'pop' please..
Lots of heartache for lots of people, basically a lapse in confidence followed by about a year of uncertainty, then outbidding in the opposite direction.

faceman wrote:

inflated prices in property, yeah no secret. house price inflation starting to slow. yep no secrets there. negative equity for most homeowners on the cards. me thinks not. Interest rates expected to rise for years to come? Nope, some speculate that a decrease could be on the cards as early as late '07. Its all swings and roundabouts and maggie thatcher's not running the country. Im sure no one disagrees that the price of petrol is well overinflated too. Maybe i shud buy a petrol station?

now leave me alone im off to invest in polish call centres!!

Do you want to back up any of your arguments?

From what I can see the people here who refute a correction in the property market cannot make a single argument for their beliefs, (sizzler and belly especially!) there were a few bulls a couple of months back with good arguments but from the last comments I read from those guys they had changed their minds.

I wonder do any of these bulls own more than one property?

Captain Trips · 09-09-2006 12:11am

I've seen several places even a year ago that had price drops from the original asking prices, just to get people interested.

Good locations will always be good locations - if you insist on having a three bed house over a one bed flat, than location *will* have a major effect, crash or no crash. Malahide will always be a good area, and attract high prices, as will Blackrock, or anywhere on the N11 "corridor" of Donnybrook, Mount Merrion, Booterstown, Stillorgan, etc., .

Three bed in Athlone, gateway to Dublin, will be risky.

The properties I've seen reduced though werein IFSC and Temple Bar.

SimpleSam06 · 09-09-2006 3:40am

Deleted User wrote:

Any one else agree with a call for blood? goddamn my head is starting to melt at the thoughts of people gettin rich on others misery

Well I don't know about blood, but I think the ignorance of the merely fortunate should not go unanswered. Well, maybe we could bleed a few bankers. And I've had my eye on a couple of politicians for a while now. Not to mention those twisted estate agents. Brown envelope deveopers. Flippers and specuvestors next.

Those muppets one and all have flushed this country's mid term future down the swanny, and are sniffing coke off the proverbial lady of easy virtue's mammaries as we speak. Still, on a more positive note, we will at least serve as a cautionary tale to other developing countries, so its not all bad.

Sponge Bob · 09-09-2006 11:02am

Sizzler wrote:

For those of you not from the Galway area Doughiska is probably one of the biggest skips the city has known in many a year and the reason people cant sell their houses in that area is simply because the area has acclaimed a reputation now for being an out and out sh1thole.

There are areas like this in every Irish city, its like me saying...Theres 5 gaffs up for sale in Darndale in Dublin that have for sale signs on them for the past 6 mths....or theres 3 gaffs in St.Mary's Park in Limerick etc etc.

Its more like Lucan than Darndale , there is almost no public housing but its the first high density private housing area built (all post 2000) .

Its also , being post 2000, full of flippers and empties owned by flippers

Faceman wrote:

Also to prove you wrong i rang some galway auctioneers today with a pretend address in doughiksa and my business was not refused. I invite anyone else to try.

I rang up 2 long established auctioneers in Galway. Lets call them OJ !

1st I named an address in Shantalla and I had to bate them away, they were going to hop in the car and come straight out to me but I eventually calmed them down.

2nd call to each I named an address in Doughiska (southern end not Castle Park end) . In each case the response was 'come in to discuss it'.

The lack of enthusiasm for the task of selling in Doughiska was duly noted.

Each has a few out there on there lists already.

dochasach · 09-09-2006 12:18pm

Sizzler wrote:

Its in Malahide roysh, focking major potential roysh !

Someone will buy that, gut it and have it back on the market in 12 mths for 700K and will get it :eek:

"What's wrong with that house?" That's what a 3-year-old said when walking past that boarded up derelict house, as men were clearing it out with shovels.

She obviously has more sense than adult investors around here.

Anyone planning on "fixing" this up for 500k and selling it for 700k had better start hunting for a greater fool now. There are decent homes in Malahide in the 500s which have been for sale for a while now. This one was on the market long (4 months?) before it appeared on the web. BTW to whoever mentioned the financing options which would give a payment of 2400, keep in mind that on a good day your rent yield would be -50% every month.
(O.K. I'm misusing the term 'rent yield', basically rent would only cover about half your outlay, not including maintenance. Of course it doesn't look like this house would require any maintenance. ;-)

faceman · 09-09-2006 12:33pm

Shane&#8482 wrote:

Do you want to back up any of your arguments?

From what I can see the people here who refute a correction in the property market cannot make a single argument for their beliefs, (sizzler and belly especially!) there were a few bulls a couple of months back with good arguments but from the last comments I read from those guys they had changed their minds.

I wonder do any of these bulls own more than one property?

chief, myself and even some of my debating adverseries have been reading the newspapers and news online. If you read the business section and the FULL articles on inflation rates rather than the first paragraph, there are plenty of recent examples where comments about future decreases in interest rates are made. Im not quoting any, you'll find them quite easily in the recent rte news archives.

with regards to comments on bulls providing arguments on why we dont see a correction in the property market, you obviously havent been reading the thread. again even my adverseries will agree. whether you chose to agree with the comments is an entirely different story.

just for the record, here is my theory (which is all any of us have at the end of the day). House price inflation will slowly correct itself (note, assuming the government does nothing in the budget to hinder property investment) but will not get in a position of negative growth in most of the main business areas in ireland. i.e. dublin, cork, galway. in a few years time i expect house price inflation to be at a level of 1-3% p.a. I dont predict doom and gloom that others predict. What is my theory based on? In summary (and its already been debated before and no one won so dont start again)

* high demand for property in dublin due to it being ireland's only CBD (Central business district). Its not like if people get pissed off with high property prices that they will move to cavan for better paid jobs...(in comparision the uk has a number of CBD's)
* only so much land in the country and even less people willing to zone land without a brown envelope...
* high immigration and low emmigration
* low unemployment
* baby boom generation will last for another few years
* property will always be a long term investment
* interest rates will always flucuate up and down.
* banks are greedy and will always have attractive mortgage packages
* without the use of hyberbole - owning your own house is a million times better than renting. Its your own place etc.
* paying rent is "dead money"

I wouldnt be surprised if the government increases stamp duty threshold for FTB's either this year or next which is good for FTB's.

PS. i nearly fell off my chair when i read some of yesterday's posts. was it just me or did Sizzler and Pa ElGrande almost agree on something yesterday? Surely not? :eek:

JimmySmith · 09-09-2006 2:05pm

Sponge Bob wrote:

If you ring around some of the big auctioneers in Galway today and say you are thinking of selling in Doughiska they will refuse your bizniess because they have a 'pipeline' of their mates gaffs to sell first.

By the time they get 'around' to you ...next year..... it will be too late.

So they refused then.

Sponge Bob wrote:

IIn each case the response was 'come in to discuss it'.

So they didnt refuse then?

Which is it?

SimpleSam06 · 09-09-2006 3:10pm

Well fair play to you, this is the first cogent list of bullish reasons I have seen so far in this entire debate. Now if you can back them up with links to trustworthy sources, we have a debate.

faceman wrote:

* high demand for property in dublin due to it being ireland's only CBD (Central business district). Its not like if people get pissed off with high property prices that they will move to cavan for better paid jobs...(in comparision the uk has a number of CBD's)

The traditional response was, I believe, to emigrate.

faceman wrote:

* only so much land in the country and even less people willing to zone land without a brown envelope...

96% of Ireland's land is not used for residential property purposes. We aren't running out of land, and we will almost certainly never run out of land.

faceman wrote:

* high immigration and low emmigration

Immigrants, as discussed exhaustively in this thread, are not buying houses here for the most part. You buy a house somewhere you mean to stay for a good while. Why in the name of god would they want to chain themselves to a 35 year mortgage, in a place where their native language isn't spoken? This is just more EA bollocks intended to push the wheezing horse another few feet up the hill.

faceman wrote:

* low unemployment

We have two major employers closing soon in the Galway region alone; one is well known the other not so much. American corporations are going elsewhere now their tax breaks are drying up. Intel, Dell, Microsoft.

faceman wrote:

* baby boom generation will last for another few years

Before what, they die?

faceman wrote:

* property will always be a long term investment

That assumes you can hold on to it in the face of rising interest rates. And even then, it doesn't make it a good long term investment. And thats just in financial terms; frankly I find the purchase of residential property as a vehicle for profit to be ethically dubious at best, and a serious menace to society at worst.

faceman wrote:

* interest rates will always flucuate up and down.

Yes, and when they go down, banks like to leap in and offer huge sums for a low repayment price. When they go up, people lose their homes and go bankrupt.

faceman wrote:

* banks are greedy and will always have attractive mortgage packages

Well that can't be denied. Thats why we have regulators to keep them under control. After this house of cards comes crashing down, I believe they will be getting a rap on the knuckles they will be a long, long time forgetting.

faceman wrote:

* without the use of hyberbole - owning your own house is a million times better than renting. Its your own place etc.

True, but it has nothing to do with the massive price increases over the last 5 years.

faceman wrote:

* paying rent is "dead money"

So is paying interest on a house. And right now, rent for nearly everywhere is less than interest repayments, and this is in a low interest rate period. You have to pay even more if you want to reduce your mortgage.

Sponge Bob · 09-09-2006 3:36pm

JimmySmith wrote:

So they refused then.

Yes. They refused to come out to see it so they did not really want it on their books. Had they wanted it on their books they would have offered to come out to see it.

Sizzler · 09-09-2006 3:48pm

Sponge Bob wrote:

Yes. They refused to come out to see it so they did not really want it on their books. Had they wanted it on their books they would have offered to come out to see it.

Yeah but Jimmy already said he called an estate agents and they at no time refuse to engage in selling his property, so obviously some agents are fussier than others

Housing bubble starting to pop?

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