Property Market 2016

The_Conductor · 27-11-2016 7:13pm

Villa05 wrote: »

Imagine what would happen rates in Ireland if the eu collapsed coupled with our massive private and public debt.

You thought 2008 was bad. You'll see the true meaning of austerity if that happens

Interesting election in France next year and Germany soon after.

Our debt per head of population- is the second highest in the world (after Japan)- and over double the debt per head of population in Greece- which is held up as the whipping boy of bad debt in Europe- and the country which they are proposing debt forgiveness for.

The first money were ploughed into our banks- was our national pension reserve funds- thats gone- and our pension time bomb is beginning to go off in earnest.

However bad its been here in the past- even without interest rate increases, its going to be a torrid time in future..............

kala85 · 27-11-2016 8:02pm

What would people recommend on interest rates at the moment, to go with fixed rates or to go with variable rates.

The_Conductor · 27-11-2016 8:31pm

kala85 wrote: »

What would people recommend on interest rates at the moment, to go with fixed rates or to go with variable rates.

I'd stay with market variable for the next 12-18 months, then reassess the situation- and if it looks likely that the ECB and Japan are likely to abandon their loose money policies (you may have to look at the bigger picture to determine this)- then I'd fix for whatever the best offer was that I could get.

The Fed are widely expected to start raising US rates in December- and certain politicians are rattling on about Japan, Europe, China and much of the rest of the world dumping products on the US as a consumer of last resort- which arguably isn't untrue (its just an interpretation though- and there are many sides to the story).

Rates are only going to go one way- however, in a European context- where things are moving at a glacial speed- it could be some time before serious hikes are on the cards.

cnocbui · 27-11-2016 9:50pm

Yourself isit wrote: »

Two. And one certainly didn't appreciate. Not that it matters because your or my story about house buying would be anecdotes not statistics. if housing always appreciated above (wage) inflation it would have gotten to be unaffordable for most people long long ago. I did say there is more than 100 years of data in the US on this. I'll post links here when I get the rights.

Also house prices did collapse across the board in 2008, in particular in the US. Almost sunk the world economy. You might have missed that.

At the moment we have historically low interest rates, so the bubbles are longer lasting than normal. However fall they will because a mass housing market clearly is dependent on the wages of the people buying the housing and the credit available to them.

The US is only one story. Affordability has been forced upwards by the rise in the two-income family, and you are correct that prices shouldn't rise beyond affordability, however, it seems that investment buying is a worryingly increasing trend which is lessening the relevance of family-unit purchasing power. I suspect the 0.1 percenters are parking increasing amounts of their hoards in property. Then you have the Chinese. Many thousands of multi millionaires all trying to get their money out of China before further currency devaluation and buying up established properties in world cities with a perceived high quality of life and good lifestyle. Sydney, Auckland, London prior to Brexit, Seattle, Vancouver - and so on. All have had massive property price increases. For those wanting to buy in Dublin, you can be thankful the Chinese don't share your enthusiasm.

Sure there are dips but it looks like a very persistent upward trend in the UK, Canada, Australia and New Zealand. It will burst when the Chinese run out of ways to get their money out and they run out of money.

I am gladdened by the optimism that interest rates will soon rise. Personally, I suspect the Trumphoria will be a short-lived phenomenon and the anticipated rises will be temporary and then they will collapse again as Trumpenomics fails to deliver.

ligerdub · 27-11-2016 10:16pm

ThisRegard wrote: »

Banks are factoring in an up to 2% interest rate rise in their stress tests on mortgage applications

I understand that but I'll say a couple of things in response.

1. If interest rates go up/trend upwards then it will create downward pressure on house prices.

2. All well and good that people can afford at these levels, and stress testing is done on applicants right enough, but I'd imagine that quite a few people aren't repaying that comfortably at current levels. If rates go up it will bring in a new cohort of people unable to pay their mortgages.

I'm not saying it would be a disaster, I'm just saying it's something to be aware of, and very few people mention it.

The_Conductor · 02-01-2017 8:38pm

Guys-

The clock has turned on a New Year- probably a lot more quickly than many of us imagined would happen. Accordingly- I propose to close off this thread an start a new thread for people to discuss the 2017 property in general (please keep comments specific to issues like the amendments to the Residential Tenancies Act, the regulatory regime for landlords- or area specific commentaries- to their relevant threads- rather than regurgitating the same posts here). Thankyou. And, of course, a Happy New Year to you all.

Property Market 2016

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