Article: Lenihan says house prices now at bottom

Amhran Nua · 09-04-2010 3:30pm

NUIG_FiannaFail wrote: »

Plus it would be great for the economy for people to start buying property.

Just to clarify this point, no it wouldn't. The entire property bubble was ruinous for the economy from start to finish. There's a hell of a big difference between the economy and the tax coffers, which the Publican Party seems completely oblivious to. Adam Smith, father of modern economics:

Adam Smith wrote:

A dwelling-house, as such, contributes nothing to the revenue of its inhabitant,”

“If it is let to a tenant for rent, as the house itself can produce nothing, the tenant must always pay the rent out of some other revenue.”

“the revenue of the whole body of the people can never be in the smallest degree increased by it”

Mortgages are vast sums of money pumped into non productive assets with enormous interest, destroying future productive wealth and hindering the growth of the economy for many years into the future.

NUIG_FiannaFail · 09-04-2010 3:42pm

Amhran Nua wrote: »

Just to clarify this point, no it wouldn't. The entire property bubble was ruinous for the economy from start to finish. There's a hell of a big difference between the economy and the tax coffers, which the Publican Party seems completely oblivious to. Adam Smith, father of modern economics:

Mortgages are vast sums of money pumped into non productive assets with enormous interest, destroying future productive wealth and hindering the growth of the economy for many years into the future.

That's nonsense. Everyone knows buying property is good for the economy.

Amhran Nua · 09-04-2010 3:49pm

NUIG_FiannaFail wrote: »

That's nonsense. Everyone knows buying property is good for the economy.

Hows that, can you export it abroad? Can you bring tourists to view our ghost estates? Will it attract FDI? In any way does it bring capital into the country? It's non productive spending, it does nothing but sit there and suck up wealth.

whynotwhycanti · 09-04-2010 3:56pm

NUIG_FiannaFail wrote: »

After the collapse of Lehman Brothers we were always going to face difficulties. No one person is responsible for this crisis. We all enjoyed the boom and encouraged more spending.

No we aren't all responsible for this crisis. I never borrowed money, did not buy properpty etc etc but am still paying for this mess with higher taxes, income levy and pay cuts.

You are living on a different planet reading your posts so please F%$k right off with your FF rhetoric. I hear enough of that sh^^e watching your party leaders spouting lies and drivel in the dail on a daily basis. The least you could do is change your username, then we would think you're just a stupid ignorant f%$%ker who has no idea what is actually going on as oppossed to some FFa dvocate who no matter what will not face the reality of the ridiculous sitaution this country is in due to decisions made by the party they follow.

Wudyaquit · 09-04-2010 4:24pm

NUIG_FiannaFail wrote: »

That's nonsense. Everyone knows buying property is good for the economy.

"Everyone knows that" isn't an argument. Just because your dad and his mates have told you for years that black is white (whether on purpose or not), it's no excuse for you not opening your eyes and having a look yourself.
These people, by hook or by crook, have ruined this country. What's unforgiveable about this is that they (and seemingly you) instead of learning from those mistakes are now willing to sacrifice the futures of more first time buyers following a policy everyone outside of those cliques knows is the wrong one.

It's understandable that the old Irish Catholic "believe whatever I'm told" mentality still exists, but it's worrying when someone who's presumably in university is incapable of having an original thought on a subject, but is willing to regurgitate the party line without being able to provide any rationale for those beliefs.

sceptre · 09-04-2010 6:04pm

NUIG_FiannaFail wrote: »

That's nonsense. Everyone knows buying property is good for the economy.

Even the Japanese didn't swallow that before their economy collapsed. The comparison was made here more than once over the past five years, including by me.

I get the impression that you're just spouting rhetoric without understanding much of what makes an economy actually work and be worth something. Which is unfortunate given that your username purports to represent a group of people. Even categorising "property" as "completed residences" doesn't do a hell of a lot for your argument given that a property bubble (or indeed a bubble in anything - property, silver, tulips, pieces of belly button lint) such as we had in the past decade always results in inflated prices, increased personal borrowing, leading in turn to inflated prices and onward in a vicious circle that is unsustainable and adds virtually nothing to the value of an economy while leaving it devastated when the bubble is pricked when demand becomes saturated.

While you're doing some extensive research in order to back up your point, you could do worse than to examine the amount of uncompleted builds we currently have in the country as well as the oversupply in certain areas and contrast that with other runaway property endeavours, in particular the Japanese example but also from any other country you can think of. Until you do that and start backing up your rhetoric, you're wasting electrons. Which is quite an achievement, given that the universe has plenty.

To classify the posts you're replying to as "nonsense" based on what you've posted in reply makes me concerned about the type of economics they're teaching in NUIG.

Benedict · 04-09-2010 6:59pm

Listen good out there! Listen good! Most houses are still overpriced by 40% to 50%. Forget the spin and the jargon.
If you are a buyer and you offer 30% lower than the asking price, and the vendor says okay, he's laughing behind your back. Because you've been ripped off! And you're a mug! Yeah?
Would the estate agents ever hurry bloody up and bring down the prices to what they should be so buyers can get on with buying?

noclue1 · 05-09-2010 10:10am

What would make you think buying a house now would be a good investment. Look at the situation the country/world economy is in.

Property prices are still falling!!!!
Double dip recession in the global economy looking more likely each day
Unemployment @ nearly 14% and rising
Not to mention all those kept off the live register doing Mickey mouse FAS courses bringing unemployment to c.500,000
Falling public/private sector wages
Mass emigration in the 20-35 age category (these are the FTBs folks)
C.300,000 empty property nationwide
Previous migrant workers returning home, these previously made up a significant proportion of tenants available to support rental prices
New capital requirements for banks meaning less credit availability
Rising interest rates on new and existing mortgages
Numbers in mortgage arrears growing alarmingly each month
Property taxes in the short to medium term
Water charges on the way also
Rent supplement has effectively put a floor in rents the exchequer cannot continue to pay at this level a reduction in the RS will lead to further rent falls and consequently house prices
Inevitable increases in other taxes to pay for our ballooning deficit(reducing net income)
1 In 4 or 25% chance of Ireland defaulting on it's debt(as priced by the markets) along with a possible exit from the eurozone into a new eurotrash zone made up of us and the other pigs

Benedict · 05-09-2010 12:42pm

I hear what Noclue 1 is saying - but what really perplexes me is why in the name of the almighty are asking prices still so high that nobody in his/her right mind would buy? Is it that sellers don't want to sell? (I know that there are cases of this). Are they still praying for a recovery in the market? Are they hoping against hope that a buyer will emerge from a 4 year stay in an underground carvern who hasn't heard that the bubble has burst and is willing to pay 40 or 50% more for a house than it's worth? Or maybe the estate agents are actually accepting half the asking price? I mean what on earth is going on? If I were selling a house right now, I'd be desperately trying to shift it even at a very reduced price rather than wait for next year or the year after when I wouldn't be able to give it away.
It's all very strange!

liammur · 05-09-2010 1:00pm

silverharp wrote: »

I hope those comments kill the air of credibility he has been getting in the media recently. So we are to believe that a "lawyer" with the back up of one of the least sophisticated finance departments in the Western world, is calling a bottom in the housing market. Given that we are most certainly in the early part of global soverign debt debacle, I find his comments highly irresponsible and dangerous for anyone that actually acts on it.

Agreed.
I remember batt o keefe telling people in 2008 that it was a great time to buy a property!
The sooner this country focuses it's energy on anything but property the better.

thebman · 05-09-2010 2:22pm

Benedict wrote: »

I hear what Noclue 1 is saying - but what really perplexes me is why in the name of the almighty are asking prices still so high that nobody in his/her right mind would buy? Is it that sellers don't want to sell? (I know that there are cases of this). Are they still praying for a recovery in the market? Are they hoping against hope that a buyer will emerge from a 4 year stay in an underground carvern who hasn't heard that the bubble has burst and is willing to pay 40 or 50% more for a house than it's worth? Or maybe the estate agents are actually accepting half the asking price? I mean what on earth is going on? If I were selling a house right now, I'd be desperately trying to shift it even at a very reduced price rather than wait for next year or the year after when I wouldn't be able to give it away.
It's all very strange!

Well if they ask the crazy price, their logic is that someone whatever people undercut it by will still be higher than what it should be now given everyone knows the arse has fallen out of the market.

It basically seems more like some people in denial and people that don't want to reveal the true prices properties are selling at in the hope they can find the odd mug willing to pay over the odds.

liammur wrote: »

Agreed.
I remember batt o keefe telling people in 2008 that it was a great time to buy a property!
The sooner this country focuses it's energy on anything but property the better.

If you look at politicians who say this investments, they usually have a few investment properties of their own.

Its like asking a Snake Oil sales person if their Snake Oil works.

Article: Lenihan says house prices now at bottom

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