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Housing Bubble Bursting

24567…148

Comments

  • #52
    Sponge Bob
    Banned (with Prison Access) Posts: 25,234 ✭✭✭✭Sponge Bob


    They will soon open the polling booths till midnight sure :p


  • #53
    Cantab.
    Closed Accounts Posts: 1,444 ✭✭✭Cantab.


    Sponge Bob wrote:
    They will soon open the polling booths till midnight sure :p

    That wouldn't be very politically astute now would it? I say shut the doors at 5 or 6! Should be ample time for when the commuting masses make it back around 8!


  • #54
    El Stuntman
    Closed Accounts Posts: 4,720 ✭✭✭El Stuntman


    Cantab. wrote:
    That wouldn't be very politically astute now would it? I say shut the doors at 5 or 6! Should be ample time for when the commuting masses make it back around 8!

    there is much simpler way to do this:

    (a) keep bumping up the Old Age Pension wildly. Old people vote. They will probably vote for the lads who give them money...

    (b) ensure the voter's register bears no relation to reality. Makes it much easier to fix election results in your favour....


  • #55
    jmayo
    Registered Users, Registered Users 2 Posts: 13,186 ✭✭✭✭jmayo


    What is the breakdown of those that are buying all these shoeboxes in Tallaght, Drogheda, Mullingar, Carlow, etc, etc ?
    How many are first time buyers and how many are buy to lets ?

    BTW it is just not in outlying commuter towns that we will have problems.
    Something I have noticed nobody ever mentions, is in some counties they are still loads of one off houses, most of them big southfork lookalikes. These houses are being build for first time owners or sold to first time buyers who will still have a hefty mortgage in comparison to 10 years ago.
    I know one area in the west of Ireland that this is happening where historically there was a lot of unemployment.
    It is fine at moment but will we end up with loads of one off new houses sitting there empty when owners have to migrate/emmigrate ?

    I am not allowed discuss …



  • #56
    El Stuntman
    Closed Accounts Posts: 4,720 ✭✭✭El Stuntman


    jmayo wrote:
    It is fine at moment but will we end up with loads of one off new houses sitting there empty when owners have to migrate/emmigrate ?

    aren't there already piles of holiday homes empty for 48 weeks of the year?


  • #57
    Sponge Bob
    Banned (with Prison Access) Posts: 25,234 ✭✭✭✭Sponge Bob


    jmayo wrote:
    BTW it is just not in outlying commuter towns that we will have problems.
    Something I have noticed nobody ever mentions, is in some counties they are still loads of one off houses, most of them big southfork lookalikes. These houses are being build for first time owners or sold to first time buyers who will still have a hefty mortgage in comparison to 10 years ago.
    I know one area in the west of Ireland that this is happening where historically there was a lot of unemployment.

    ONE AREA :eek: you say . Roscommon and East Galway and East Mayo and South Sligo and Leitrim are alive with them .

    The problem is that these southforks are being built where there is no work or corresponding demand. I simply love this specimen here, Its actually well into Mayo and in Hollymount not Shrule but yer man is claiming its in commuter belt Galway to get the interest up :D. Had they painted it now ...... :p


  • #58
    Victor
    Registered Users, Registered Users 2 Posts: 78,490 ✭✭✭✭Victor


    That link isn't working, try this one www.daft.ie/149867


  • #59
    Do-more
    Registered Users, Registered Users 2 Posts: 4,748 ✭✭✭Do-more


    Jaysus Sponge Bob, ya should have posted that one on "Bargain Alerts".

    Thanks anyway, I have me valuer working on it now, should be able to spring a 120% mortgage on it, now I must dig out me junkmail for the pre-approved loans from BOI and AIB and get another few bob off the credit union and I'll be able to get the helicopter and not worry about the traffic into Galway.

    Keepin' up with the Jones' me arse, I'll just change me name to Jones too. Sure everybodies doin' it, why not me too. And sure the ERSI says it'll be a soft landin', very handy in helicopters them soft landings!!!

    invest4deepvalue.com



  • #60
    jmayo
    Registered Users, Registered Users 2 Posts: 13,186 ✭✭✭✭jmayo


    The area I am talking about is in East Mayo and was one of the worst emmigration blackspots up until 10 years ago.
    Suddendly over last couple of years there are bloody bungalows, dormiers popping up all over the place. The farmers love it since return from land/farming is now cr** and sure if you can offload a few 1/4 acre plots to someone why not.

    Regarding holiday homes, I have to say Achill is a disgrace. They stand out like a sore thumb. A t least in places like Leitrim there are a few trees and bushes to hide all the damm things.

    The building in small villages in the west is also getting to be bit of joke. I know a developer who was building in Knock. It was being marketed as being close Claremorris (thriving commerical centre that it is).

    Maybe when the boom ends we will all find religion again and the numerous pilgrims will rent them out while down there asking for a miracle to help pay for the house, the holiday home and two bmeers.

    I am not allowed discuss …



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  • #61
    jmayo
    Registered Users, Registered Users 2 Posts: 13,186 ✭✭✭✭jmayo


    Hey since when did Shrule move to Galway or is that just so that it least it appears in the same county for sales purposes.
    Next thing they will want Ballinadine.

    Why would you want 11 bathrooms ?
    That's too many to have to clean, one is bad enough.

    I am not allowed discuss …



  • #62
    gearoidmm
    Closed Accounts Posts: 11 ✭gearoidmm


    Just to point out that the methodology that SF use to calculate their index is laughable. They get their own in-house estate agents to estimate how much they think a certain basket of houses would sell for from quarter to quarter - this is the same basket they have been using for years. It's not based on actual sales, just opinion. It should be taken with a very large pinch of salt.

    SF have had estimates of price rises over the last few years which are consistently higher than anyone else probably as a result of this dodgy methodology. The only thing that you can take as significant from their report is that they said that prices dropped - they have so consistently talked up the market for so long that any report of a drop in prices suggests that thing might actually be much worse than anyone thinks.


  • #63
    Sponge Bob
    Banned (with Prison Access) Posts: 25,234 ✭✭✭✭Sponge Bob


    jmayo wrote:
    Hey since when did Shrule move to Galway or is that just so that it least it appears in the same county for sales purposes.
    Next thing they will want Ballinadine.

    Why not email the auctioneer and tell him its in Hollymount (1 mile west of ) and not Shrule and 10 miles into Mayo from Galway , gwan

    He has been trying to offload it since 2004 according to the other link I put up :p

    Contact Details

    http://www.daft.ie/149867


  • #64
    dame
    Closed Accounts Posts: 1,623 ✭✭✭dame


    Shrule is in Co.Mayo but people there often use Co.Galway as their address cos then they get their post a day quicker.

    If you look at the location map for that house (attached below), you can see that the house is very far from Shrule or Hollymount. Shrule is at the junction of the N84 and the lower of the two rivers it meets, on the northern side of that river (Black River). If you scoot around the map a bit more and zoom in, you'll see a stretch of river near the property called "Shrule". Perhaps the townland there is also called Shrule? Anyway, from that map it does look like the property is in Co.Galway.

    It's still a ridiculous house though! Who builds a fake georgian mansion in rural Ireland then tries to sell it??

    There are plenty of first timers building big houses around the countryside (I'm not one of them by the way) but that's fair enough if they're living beside their parents (often given a site) and can afford to build it and pay mortgage for 30 odd years. I think plenty have lost their grip on reality though. For example, who needs 4,000 sq ft of a house, in the middle of nowhere, with two staircases! I know of just such a house currently being built. It's not quite on the scale of the house discussed previously, but considering the location it's in, just as ridiculous! One of those staircases is split in two, meeting up near the top with a big gallery landing. The other stairs is a back staircase, sort of like a servants staircase :D I think somebody thinks they're a bit grande to live in a normal house! Anybody who would want to buy a trophy house like that would want it to be finished to the highest of standards (not first timers with their almost plastic laminate floors) and in a convenient location, not in a dead end hole where nobody will be able to admire it passing!

    There's the view that when you're building you might as well build big and build exactly what you want.....but if the market does crash then a house like this will never be able to be sold and the happy couple will be stuck with it, the mortgage and the heating bills :eek:

    Moral of the story, build what you want within reason, as in; affordable, practical to actually live in (distance from conveniences, major towns, work etc), consider cost of heat etc and if there's a possibility that you might want to move out of your dream home in the future...try not to make it too outlandish and unattractive to other purchasers or you will be stuck with it forever!


  • #65
    jmayo
    Registered Users, Registered Users 2 Posts: 13,186 ✭✭✭✭jmayo


    Pity the house is not like one of those American/Canadian homes that are all wood and you can lift it and move on giant lowloaders.
    Then he could move somewhere closer to Galway.

    Jeeze I thought it was a real georgian house, not a fake one ?
    Who the hell would build a mock georgian house in the middle of nowhere (not near major town/city) ?
    Could it be turned into old folks home, about the only use I could think of for it with all the bedrooms and bathrooms.
    Of course would have to add lifts, firedoors etc etc.

    Oh I know of some extraordinary mansions around the place. Actually on one road there is only one old style 3 bedroom bungalow.
    It now looks totally out of place.

    A lot of the new houses are not sons/daughters. Farmer sells to builder who then sells site and builds house for young couple or even sometimes old retiring couple.
    Another example of lost of grip on reality is the now common american idea of making you house look like part of Las Vegas strip for Christmas.
    Some people cover entire house, lights around all windows, chimneys, roofs and then they do the garage, garden, bushes, gates etc.
    Jeeze I am surprised the dogs and cats are not dressed up as reindeers at this stage.

    I am not allowed discuss …



  • #66
    HashSlinging
    Closed Accounts Posts: 3,413 ✭✭✭HashSlinging


    jmayo wrote:

    Maybe when the boom ends we will all find religion again and the numerous pilgrims will rent them out while down there asking for a miracle to help pay for the house, the holiday home and two bmeers.

    Amen to that brother!!! :D


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  • #67
    Zambia
    Closed Accounts Posts: 7,333 ✭✭✭Zambia


    Actually i think you all have it , you can rent them out to crock pot religions following some crackpot leader. They can all hold out in these mansions in east Mayo storing arms and guiness waiting for the end of the world. Untill you report them for rent avoidance and the Mayo Gardai break out "the" gun and it leads to an armed waco style stand off in front of TNaG News crews , in low cleavage body armour as we all know they are dead cute...

    Have I gone off topic ?


  • #68
    Sponge Bob
    Banned (with Prison Access) Posts: 25,234 ✭✭✭✭Sponge Bob


    Zambia232 wrote:

    Have I gone off topic ?

    Nearly :D

    I will revert to topic by saying that the greatest srplus of these McMansions is 20-40 miles or so from Galway . They are the new commuter belt and as the slump develops this new commuter belt will no longer be commuter belt .

    Shiftable propostions in the west will be 10 miles from Sligo, 20 miles form Galway and in the Westport Castlebar axis (which does not include Kiltimagh no matter what the auctioneer tells you)

    There is no major economic activit elsewhere in the west so the houses will not sell. There will be a few odd spots where prices are set by holiday home economics like Roundstone .


  • #69
    Lorax
    Closed Accounts Posts: 752 ✭✭✭Lorax


    Imagine the parties u could have tho! In fairness how much are u gonna pay for a 14-bedroom house on 30 acres anywhere in or near Dublin.. a lot more than €1.4 million anyway! I like the idea of renting it to a 'religious community in a beautiful place out in the country' ;-P


  • #70
    long_boy
    Registered Users Posts: 18 ✭long_boy


    Returning to the question of a bursting bubble.......

    I'd love to think this would happen and have been contemplating it recently and here's my reverse logic to the debate:

    It seems that most people on this forum would like to but a house, especially in Dublin. It seems that most can scrape and scrounge enough money together to get a shoebox on the outskirts but would like bigger and more central - I know that's my situation anyway. So the question is - if the bubble bursts what will happen? Everybody scrambles for the bigger, better houses and ditches the shoeboxes. Does it not sound like the shoeboxes will suffer but the rest may only drop slightly at best, due to the number of people that are stuck with shoeboxes now and the number that are reluctant to buy them and holding out?

    The other point which is a bit more scientific is that nobody in mentioning interest rates. Unless a huge crash happens the increasing interest rates will soak up any dip to mean that the house selling price may be less but it still costs you the same every month. A quick calculation on a 200k mortgage over 35years gives:
    4.5% APR €1100 per month
    5.5% APR €1220 per month

    This is a 10% rise in repayments for 1% interest rate increase. This means that people can borrow less and less so prices should follow this, it doesnt make houses any more affordable though.

    Any thoughts or am I too much the pessimist after years waiting on a burst?!


  • #71
    miju
    Banned (with Prison Access) Posts: 8,486 ✭✭✭miju


    haven't got time to answer the rest of your post (but will do later on) with regards to everyone buying in I dont believe this will happen and there's already big indicators that people are seeing the writing on the wall and aren't going to buy back in until it bottoms out

    to sum it up in a little catch phrase i like to use "it's the herd mantality operating in reverse"


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  • #72
    [Deleted User]
    Posts: 0 ✭ [Deleted User]


    El Stuntman wrote:
    there is much simpler way to do this:

    (a) keep bumping up the Old Age Pension wildly. Old people vote. They will probably vote for the lads who give them money...

    (b) ensure the voter's register bears no relation to reality. Makes it much easier to fix election results in your favour....

    Trying very very hard to see the relevance of this to a thread on the housing market and failing. Isn't there an 'I hate FF' thread somewhere on the Politics site for this stuff?

    Meanwhile, I think talk of a burst is just not gonna happen. I know plenty of developers who are still putting millions on land. There something about sticking the money where the mouth is that says a bit more than opinions on a website - unless of course someone here is gonna say that they have loads of property but they are so sure of a collapse that they will sell it all and reinvest in stocks. The market might not keep increasing at the same rate, but there is a huge young population out there without houses. Hence fellows offering 400m for a golf course...


  • #73
    SparkyLarks
    Registered Users, Registered Users 2 Posts: 363 ✭✭SparkyLarks


    Not sure if the bubble will burst or not but I must say that anyone who thinks that a market crash is a good thing really need to wake up and smell the coffee.

    A market crash in Ireland will lead to job losses, rising unemployment, reduced revenue for the goverment so higher income taxes higher intrest rates, so campanies start to pull out of Ireland so more job loses ect.

    It won't be easy to buy a house after a market crash for a lot of people as they won't have a job

    Remember the 80's weren't fun times. they wer depressing greay jobs with a bleak outlook and big hair


  • #74
    [Deleted User]
    Posts: 0 ✭ [Deleted User]


    long_boy wrote:
    So the question is - if the bubble bursts what will happen? Everybody scrambles for the bigger, better houses and ditches the shoeboxes.

    Will be no scramble because..........
    SparkyLarks wrote:
    A market crash in Ireland will lead to job losses, rising unemployment, reduced revenue for the goverment so higher income taxes higher intrest rates, so campanies start to pull out of Ireland so more job loses ect.

    Deleted User wrote:
    The market might not keep increasing at the same rate, but there is a huge young population out there without houses. Hence fellows offering 400m for a golf course...

    Great to finally have someone to contribute to the debate from the other side. Now I reckon, Conor74, that based on the amount of people employed in the construction industry that ANY slow down will result in job losses. And with regard to your comment :
    Deleted User wrote:
    The market might not keep increasing at the same rate, but there is a huge young population out there without houses.

    I think your correct about people needing houses BUT according to the CSO we have in excess of 275,000 EMPTY houses. Most bought since 2002. Not rented out. Why? As an INVESTMENT not rented out so as to AVOID CAPITAL GAINS TAX. So these investors can drop their price to 2002 levels BEFORE taking a hit ( negative equity ).

    Its gonna be the ECONOMY and people who have bought since 2002 who will be hit worst in a crash.


  • #75
    hmmm
    Registered Users, Registered Users 2 Posts: 11,205 ✭✭✭✭hmmm


    What's this mysticism about property developers being immune from big mistakes? Even Donald Trump has gone bankrupt at one stage. If you look at the performance of the US housebuilders you will see that some are in trouble

    "MIAMI -- Lennar Corp., one of the nation's largest homebuilders, says it expects a fourth-quarter loss as it re-evaluates how much its inventory is worth amid a slowing industry.

    The Miami-based company could take a pretax charge of up to $500 million for the inventory evaluation."


  • #76
    Pa ElGrande
    Registered Users, Registered Users 2 Posts: 3,633 ✭✭✭Pa ElGrande


    Deleted User wrote:
    Trying very very hard to see the relevance of this to a thread on the housing market and failing. Isn't there an 'I hate FF' thread somewhere on the Politics site for this stuff?
    Political corruption is one of the factors why we find ourselves with creaking infrastructure and massive house price inflation and the manipulation of the register to exclude those who might affect change is nothing short of a disgrace. But that's a discussion for another day.
    Deleted User wrote:
    Meanwhile, I think talk of a burst is just not gonna happen. I know plenty of developers who are still putting millions on land. There something about sticking the money where the mouth is that says a bit more than opinions on a website - unless of course someone here is gonna say that they have loads of property but they are so sure of a collapse that they will sell it all and reinvest in stocks. The market might not keep increasing at the same rate, but there is a huge young population out there without houses. Hence fellows offering 400m for a golf course...
    Of course developers are still building, thats what they specialise in and they will keep doing it until the money is gone. I used to work in the building trade and I know lots of builders and developers who went bust in the 80's and early 90's. Of course most got back on their feet again and most are doing well in the current boom.
    With over €2 billion a month being pumped into construction thats where the money currently is and while the banks are more than willing to finance these €400 million deals, then there is very little risk to the developers. I am also aware of several people who are divesting of their entire property portfolio at the moment and have been since 2006 and it has also been commented by Merrill Lynch that more Irish people are cashing out of property for other investment oppertunities.

    Did you know that the birth rate in Ireland peaked over 27 years ago in 1980, it fell dramatically after that, watch the numbers sitting the leaving certificate to get an idea of the number of first time buyers entering the market. The average age of the first time buyer is 32. In the age group 22 to 32 (the next 10 years of first time buyers) according to the CSO there are approximately 690,000 people.
    In 2006 we will have built approx. 90,000 units. Immigration is still positive in 2006, Irish Mortgage Corporation (Hooke & McDonald) estimated that 18.5% of their clients are non-national, so extrapolating from the first time buyer mortgage draw downs this would imply there were at most 7,000 non-nationals buying property last year.

    Did you know that just over 40% of the mortgages for new property drawn down last year were for Residential Investment Lettings? That indicates a huge level of speculation in the market since the rental yield has been falling to under 3%. (Yields started to pick up in the latter half of 2006 in Dublin). Yet despite strong immigration and population growth, the Central statistics office found 275,000 empty properties accross the country in April 2006. This indicates a huge level of speculation based on the expectation of capital gains in the market, and indeed house price inflation has nominally been about 14 percent per annum in nominal terms. In Europe we also have the highest level of employment in construction as a percentage of the workforce and its estimated 100,000 of those working in the sector will need to seek alternative employment over the next 10 years.

    Without a doubt the current population trend for Ireland is upward, but the problem is we are building at a rate that is ahead of the population increase. A correction in inevitable.

    We are not behaving any differently to any other country that has experienced a housing bubble. Ours was first underpinned by population and employment growth and supply shortage as well as foreign direct investment but post 2001 its been sustained by exceptionally low interest rates, easing of lending criteria, and speculation aided by tax breaks.
    As the bubble unwinds
    • Interest rates go up.
    • Banks tighten their criteria for lending.
    • Unemployment rises and jobs are tougher to find.
    • Bad debts start to mount as businesses fold.
    • Investors who are undercapitalised rush to sell else they go bankrupt.
    • Peoples appetite for extending themselves to get on the ladder evaporates as fears over job security take precedence.
    • Government tax revenue nose dives, its costs increase, leading to huge deficits.

    Net Zero means we are paying for the destruction of our economy and society in pursuit of an unachievable and pointless policy.



  • #77
    is_that_so
    Registered Users, Registered Users 2 Posts: 32,136 ✭✭✭✭is_that_so


    Pa ElGrande wrote:
    Political corruption is one of the factors why we find ourselves with creaking infrastructure and massive house price inflation and the manipulation of the register to exclude those who might affect change is nothing short of a disgrace. But that's a discussion for another day.

    Of course developers are still building, thats what they specialise in and they will keep doing it until the money is gone. I used to work in the building trade and I know lots of builders and developers who went bust in the 80's and early 90's. Of course most got back on their feet again and most are doing well in the current boom.
    With over €2 billion a month being pumped into construction thats where the money currently is and while the banks are more than willing to finance these €400 million deals, then there is very little risk to the developers. I am also aware of several people who are divesting of their entire property portfolio at the moment and have been since 2006 and it has also been commented by Merrill Lynch that more Irish people are cashing out of property for other investment oppertunities.

    Did you know that the birth rate in Ireland peaked over 27 years ago in 1980, it fell dramatically after that, watch the numbers sitting the leaving certificate to get an idea of the number of first time buyers entering the market. The average age of the first time buyer is 32. In the age group 22 to 32 (the next 10 years of first time buyers) according to the CSO there are approximately 690,000 people.
    In 2006 we will have built approx. 90,000 units. Immigration is still positive in 2006, Irish Mortgage Corporation (Hooke & McDonald) estimated that 18.5% of their clients are non-national, so extrapolating from the first time buyer mortgage draw downs this would imply there were at most 7,000 non-nationals buying property last year.

    Did you know that just over 40% of the mortgages for new property drawn down last year were for Residential Investment Lettings? That indicates a huge level of speculation in the market since the rental yield has been falling to under 3%. (Yields started to pick up in the latter half of 2006 in Dublin). Yet despite strong immigration and population growth, the Central statistics office found 275,000 empty properties accross the country in April 2006. This indicates a huge level of speculation based on the expectation of capital gains in the market, and indeed house price inflation has nominally been about 14 percent per annum in nominal terms. In Europe we also have the highest level of employment in construction as a percentage of the workforce and its estimated 100,000 of those working in the sector will need to seek alternative employment over the next 10 years.

    Without a doubt the current population trend for Ireland is upward, but the problem is we are building at a rate that is ahead of the population increase. A correction in inevitable.

    We are not behaving any differently to any other country that has experienced a housing bubble. Ours was first underpinned by population and employment growth and supply shortage as well as foreign direct investment but post 2001 its been sustained by exceptionally low interest rates, easing of lending criteria, and speculation aided by tax breaks.
    As the bubble unwinds
    • Interest rates go up.
    • Banks tighten their criteria for lending.
    • Unemployment rises and jobs are tougher to find.
    • Bad debts start to mount as businesses fold.
    • Investors who are undercapitalised rush to sell else they go bankrupt.
    • Peoples appetite for extending themselves to get on the ladder evaporates as fears over job security take precedence.
    • Government tax revenue nose dives, its costs increase, leading to huge deficits.

    I would love to know why do some people have an urgent need for a property crash, even assuming that they are right?

    I have no issue with people anticipating a crash or arguing for one. Nor do I deny that the amount of income that property is currently putting into government coffers is not desirable but basing it on a list of fairly groundless speculations serves what purpose exactly?


  • #78
    Pa ElGrande
    Registered Users, Registered Users 2 Posts: 3,633 ✭✭✭Pa ElGrande


    is_that_so wrote:
    I would love to know why do some people have an urgent need for a property crash, even assuming that they are right?
    I can't understand why anyone would want a property crash either.
    is_that_so wrote:
    I have no issue with people anticipating a crash or arguing for one. Nor do I deny that the amount of income that property is currently putting into government coffers is not desirable but basing it on a list of fairly groundless speculations serves what purpose exactly?

    If you would be so kind, please highlight the specifics that I posted that are groundless speculation, I would be happy to explain myself and correct as needed.

    Net Zero means we are paying for the destruction of our economy and society in pursuit of an unachievable and pointless policy.



  • #79
    Victor
    Registered Users, Registered Users 2 Posts: 78,490 ✭✭✭✭Victor


    long_boy wrote:
    The other point which is a bit more scientific is that nobody in mentioning interest rates. Unless a huge crash happens the increasing interest rates will soak up any dip to mean that the house selling price may be less but it still costs you the same every month. A quick calculation on a 200k mortgage over 35years gives:
    4.5% APR €1100 per month
    5.5% APR €1220 per month

    This is a 10% rise in repayments for 1% interest rate increase. This means that people can borrow less and less so prices should follow this, it doesnt make houses any more affordable though.

    Any thoughts or am I too much the pessimist after years waiting on a burst?!
    In a way you are stating the bleedin' obvious, but yes its a point people miss.

    The problem of course is that interest rates have been unnaturally low.
    Deleted User wrote:
    Trying very very hard to see the relevance of this to a thread on the housing market and failing. Isn't there an 'I hate FF' thread somewhere on the Politics site for this stuff?
    Yes, you started it. :D

    Note that the commuter belt has low voting participation (I have a map somewhere).
    Meanwhile, I think talk of a burst is just not gonna happen. I know plenty of developers who are still putting millions on land. There something about sticking the money where the mouth is that says a bit more than opinions on a website - unless of course someone here is gonna say that they have loads of property but they are so sure of a collapse that they will sell it all and reinvest in stocks. The market might not keep increasing at the same rate, but there is a huge young population out there without houses. Hence fellows offering 400m for a golf course...
    Burst, no, correction perhaps. Of course, look back to the boom (in prime development sites, led by Gallagher) in the 1970s and the subsequent correction.

    I'm not overly worried about the financial stability of the large developers (although I would question some of their out of town developments on other grounds) who have their fingers in many pies and generally have a plan. I would worry about the herd following them.
    SparkyLarks wrote:
    Not sure if the bubble will burst or not but I must say that anyone who thinks that a market crash is a good thing really need to wake up and smell the coffee.
    Sure. But the people dancing on the house of cards need to work on their foundations.


  • #80
    [Deleted User]
    Posts: 0 ✭ [Deleted User]


    is_that_so wrote:
    I would love to know why do some people have an urgent need for a property crash, even assuming that they are right?

    I have no issue with people anticipating a crash or arguing for one. Nor do I deny that the amount of income that property is currently putting into government coffers is not desirable but basing it on a list of fairly groundless speculations serves what purpose exactly?


    He didnt argue FOR a crash. Nor do I.

    Groundless Speculation? He backed up everything with references. Everything written in BLUE in his post is a link.

    Legend of a post Pa Grande!


  • #81
    Cantab.
    Closed Accounts Posts: 1,444 ✭✭✭Cantab.


    http://www.youtube.com/watch?v=JY9dnVy9YnY

    This is the most amazing video!!! It sums up a lot of what's being said here (and previously on AAM)

    I won't comment any further, the video speaks for itself. Enjoy!!!

    (watch out for the dodgy mortgage broker with the $$$ tie and bluetooth headset!)


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  • #82
    Do-more
    Registered Users, Registered Users 2 Posts: 4,748 ✭✭✭Do-more


    SparkyLarks wrote:
    I must say that anyone who thinks that a market crash is a good thing really need to wake up and smell the coffee.

    A market crash in Ireland will lead to job losses, rising unemployment, reduced revenue for the goverment so higher income taxes higher intrest rates, so campanies start to pull out of Ireland so more job loses ect.

    It won't be easy to buy a house after a market crash for a lot of people as they won't have a job

    Remember the 80's weren't fun times. they wer depressing greay jobs with a bleak outlook and big hair

    You can sing that Sparky!

    I do get the impression that there are a lot of hopeing for a house price crash so that they can then buy a house. But in the short to medium term that just can't happen, as has been pointed out by many posters, the key is not the house price per se but "affordability" and as interest rates rise and taxes rise (to replace the huge revenue generated for the government by the building boom and to finance dole payments) and as unemployment rises the number of people who can afford to purchase will not leap dramatically.
    Perhaps in 10 years time when the economy has hopefully re-establised itself on more balanced footings, then "affordability" will be within reach of more people than today.

    To pin my own colours to the mast, I own a home with a thankfully small mortgage, my interest in the direction of the property market is to safegaurd my families future. Do I attempt to sell now (assuming it's not too late) and rent for a few years? But then at what stage should I buy back into the market? Or do I sit it out.

    The big issue for me is job security, even with a relatively small mortgage you still need an income... In the event of unemployment, or the desire to move to a better job, the chances of selling your house in a declining market are poor as experiance in other countries shows that market activity drops considerably as those that don't have to sell won't.

    At the moment I am leaning towards selling up, but fear it may already be too late... Opinions welcome.

    invest4deepvalue.com



  • #83
    [Deleted User]
    Posts: 0 ✭ [Deleted User]


    Well, all the talk and stats doesn't phase me. Subject to a very generous helping hand from my local bank manager, I'm going back into the market here to get an investment property. I heard the dire predictions and 'it can't go higher' 5 and 10 years back, from people who had no intention of buying a property, and how wrong they were then. Of course, that is not to say the gains will be as big, or indeed that the market is immune from adjusting, but if you keep saying the sky will fall for the next billion years some day it may happen. I'm just trying to make a few quid before then...


  • #84
    Cantab.
    Closed Accounts Posts: 1,444 ✭✭✭Cantab.


    Deleted User wrote:
    Well, all the talk and stats doesn't phase me. Subject to a very generous helping hand from my local bank manager, I'm going back into the market here to get an investment property. I heard the dire predictions and 'it can't go higher' 5 and 10 years back, from people who had no intention of buying a property, and how wrong they were then. Of course, that is not to say the gains will be as big, or indeed that the market is immune from adjusting, but if you keep saying the sky will fall for the next billion years some day it may happen. I'm just trying to make a few quid before then...

    Being an investor, I take it that you have done all the sums? What is your risk exposure? And is this risk worth the potential gain? I assume you are assesing the market based on facts, available data and trends, and not just reactive sentiment? Your mantra about "how wrong they were then" and "if you keep saying the sky will fall for the next billion years some day it may happen" could cost you dearly.


  • #85
    Pa ElGrande
    Registered Users, Registered Users 2 Posts: 3,633 ✭✭✭Pa ElGrande


    Deleted User wrote:
    Well, all the talk and stats doesn't phase me. Subject to a very generous helping hand from my local bank manager, I'm going back into the market here to get an investment property. I heard the dire predictions and 'it can't go higher' 5 and 10 years back, from people who had no intention of buying a property, and how wrong they were then. Of course, that is not to say the gains will be as big, or indeed that the market is immune from adjusting, but if you keep saying the sky will fall for the next billion years some day it may happen. I'm just trying to make a few quid before then...
    To gain by speculation, a speculator must be able to foresee price changes. Since price changes coincide with changes in marginal opinion, he must in the last analysis be able to foresee changes in opinion. Successful speculation consists in just this. It requires no knowledge of intrinsic value as such, but only of what people are going to believe intrinsic value to be. Now opinion, when it changes, need not change for the right; it may change for the wrong, and the probability of a change for the wrong is about as great as of a change for the right. If opinion were not found in part on current dividends and changes therein, there would be nothing to prevent price and value from drifting miles apart.

    How to foretell changes in opinion is the heart of the problem of speculation, just as how to foretell changes in dividends is the heart of the problem of investment.

    reference - http://www.numeraire.com/spec.htm

    The value of investments, and the income derived from them, may fall as well as rise. You may not get back the full amount that you invest. Past performance is not a guide to future performance.

    Net Zero means we are paying for the destruction of our economy and society in pursuit of an unachievable and pointless policy.



  • #86
    Zambia
    Closed Accounts Posts: 7,333 ✭✭✭Zambia


    Deleted User wrote:

    Legend of a post Pa Grande!

    I agree


  • #87
    miju
    Banned (with Prison Access) Posts: 8,486 ✭✭✭miju


    Deleted User wrote:
    Well, all the talk and stats doesn't phase me. Subject to a very generous helping hand from my local bank manager, I'm going back into the market here to get an investment property. Of course, that is not to say the gains will be as big, or indeed that the market is immune from adjusting, but if you keep saying the sky will fall for the next billion years some day it may happen. I'm just trying to make a few quid before then...

    jaysis are you ****ting money that you can afford to but an already depreciating asset before the slide really begins ..... i have to say that people like you Conor74 quite frankly scare the ever loving **** outta me with how flippant they are with money and their future...

    when you buy your investment property you'll be immediatly in negative equity when costs / interest is taken into account , with prices PREDICTED to grow 5% this year and inflation at 6% that's you 1% more in negative equity

    ALL evidence points to depreciation at best , MAJORITY of property bulls are all in AGREEMENT THAT PRICES HAVE PEAKED ... yet in your infinite wisdom you plan to buy an investment property on the basis of this gem below :rolleyes: :rolleyes: :rolleyes: :rolleyes:
    Deleted User wrote:
    I heard the dire predictions and 'it can't go higher' 5 and 10 years back, from people who had no intention of buying a property, and how wrong they were then.

    for the record the bulls have been just as wrong as the bears have been over the same time period , thing is Conor the bears only have to be right once , the bulls on the other hand have to be right for the rest of their mortgage.
    Deleted User wrote:
    I'm just trying to make a few quid before then...

    it's worth remembering who is the one who gets screwed over at the bottom of any asset pyramid which is based on the greater fool theory , best of luck you'll certainly need it


  • #88
    Paulw
    Registered Users, Registered Users 2 Posts: 13,381 ✭✭✭✭Paulw


    Chicken Little comes to mind in this thread - the sky is falling.

    Prices are certainly slowing, no doubt. But, no bubble has burst. It may be going soft, but it hasn't burst.


  • #89
    miju
    Banned (with Prison Access) Posts: 8,486 ✭✭✭miju


    Paulw wrote:
    Chicken Little comes to mind in this thread - the sky is falling.

    Prices are certainly slowing, no doubt. But, no bubble has burst. It may be going soft, but it hasn't burst.

    most aren't saying it has burst they are however saying that it will and that what has occured since late summer last year has / is the lead up to the full slide similiar to what has happened in all other property asset bubbles

    theres a difference has burst and will burst , the undertones of your post seems to suggest that you think it may burst , if you dont think it will burst would love to know your reasoning as god knows we need some bulls on this thread for a decent debate

    would be interesting to see the effects on the market of 3 more rate rises by the ECB if these calls were heeded by the OECD in France (same as out ESRI)


  • #90
    Mailman
    Closed Accounts Posts: 1,571 ✭✭✭Mailman


    Excellent post Pa Elgrande
    http://www.boards.ie/vbulletin/showpost.php?p=52588027&postcount=76

    best use of hyperlinks to attributable sources I've seen in a long time.

    If you can post some similar links in favour of the continued rise of the property market you could even manage to get discussion of property re-opened by the moderators on www.askaboutmoney.com but I suspect that you have as little confidence in the market as I do and aren't that way inclined.


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  • #91
    Sponge Bob
    Banned (with Prison Access) Posts: 25,234 ✭✭✭✭Sponge Bob


    I can find no fault whatsoever with Pa's summary , post of the week.


  • #92
    ronbyrne2005
    Closed Accounts Posts: 3,494 ✭✭✭ronbyrne2005


    A property price correction will benefit economy in long run, in short run there will be losers but theres always winners and losers in every market.


  • #93
    chump
    Closed Accounts Posts: 3,807 ✭✭✭chump


    Sponge Bob wrote:
    I can find no fault whatsoever with Pa's summary , post of the week.

    Agree hugely. Excellent post.

    I would really be interested in seeing an equally well written retort from a 'bull'.

    On a similar topic did anyone hear the todayFM prerecorded post-new year summary of the housing market, excellent 'debated' by a prop from myhome.ie and sherryfitzgerald! Of course as it was recorded, and as Matt Cooper didn't make one effort to dampen their spiel, it sounded like an advertisement for a property party.


  • #94
    is_that_so
    Registered Users, Registered Users 2 Posts: 32,136 ✭✭✭✭is_that_so


    Pa ElGrande wrote:
    As the bubble unwinds
    • Interest rates go up.
    • Banks tighten their criteria for lending.
    • Unemployment rises and jobs are tougher to find.
    • Bad debts start to mount as businesses fold.
    • Investors who are undercapitalised rush to sell else they go bankrupt.
    • Peoples appetite for extending themselves to get on the ladder evaporates as fears over job security take precedence.
    • Government tax revenue nose dives, its costs increase, leading to huge deficits.

    My issue is not with your use of data all of which speaks for itself aside from one point. 90,000 units from what I can see just refers to units. What proportion was affordable/social housing? If the government is to believed about
    Part V of the Planning Act 2000 Housing Targets     we can expect to see nearly 50,000 homes under the scheme over the coming years. How can or would you account for this?

    I do however question the conclusions you have come to and whether you have taken everything into account. IMO they are not ineluctable truths.


    Interest rates are increasing

    Yes this is true and based on the normal effect of such increases it should help cool the market by making money more expensive, though not necessarily make it crash. Jim Power

    Banks tighten their criteria for lending

    My impression was that this has started and that credit card debt is to be included in loan evaluations. I don't believe that banks here in general will go beyond that 100% threshold and I would hope that people are not stupid enough to do so.


    Unemployment Rises

    This is questionable and could be affected by any number of other factors such as higher energy costs,wage inflation or lower cost economies.

    Notwithstanding that, the proportion of non-nationals per sector is currently not measured and therefore unknown.
    Dan O'Brien Irish Times 06/01/07 Link.
    data on national/non-national composition of employees at a sectoral level are not gathered

    It is believed that there are many EU nationals in the construction industry. Given that many EU migrants are here for economic reasons how increased unemployment might be affect them or what they might do is also unknown. If only Irish nationals were affected then the comment might hold.

    IMO it is impossible therefore to adduce that the unemployment rate will rise. More workers could lose their jobs but how can we determine what group it will affect most and more importantly how that will translate itself across the various economic sectors ?

    Bad debts start to mount as businesses fold

    There does not seem to be much evidence of this particularly as last year was the best year for company liquidations in 20 years
    , although it does acknowledge that some newer companies in construction have suffered.

    Investors who are undercapitalised rush to sell else they go bankrupt

    This assumes first and foremost that the crash will occur and the two elements above will happen as you state.

    What types of investors do you mean? If I as a private investor buy a new house and I am VAT registered I can claim that VAT back. This could be used for kit out and possibly reducing some of my 100% exposure. This does not really strike me as a recipe for bankruptcy.


    Peoples appetite for extending themselves to get on the ladder evaporates as fears over job security take precedence

    When people don't buy they still have to live somewhere. This should then create more demand for rental properties thus negating the previous scenario.

    Government tax revenue nose dives, its costs increase, leading to huge deficits

    Again the costs here assume we know what way the unemployment will affect the various sectors.
    If you look through the economics of the last 15-20 years you will find frugality - Ruari Quinn
    common sense - Mac the Knife and The Tallaght Strategy
    crystal ball genius Charlie McCreevy and the SSIA
    and financial nous 12.5% corporation tax.

    Deficits can usually be resolved by swingeing cuts, tax increases and borrowing. The first two are certainly within the instant control of government.

    Finally how do you factor in the SSIA? Given that it is valued at €15 billion where does that fit into your analysis?

    In conclusion I don't take the view that there will an economic meltdown as the original article suggests. I find it hard to believe that data as presented.

    The original article used Arizona as an example. Arizona like Florida is a recreational state and it would be open to wild speculation. The bubble in the US was localised. Massachussets however is a state that is more similar to Ireland in economy and it might be more representative of what could happen. 12-13% correction is not impossible and that would serve as a warning.

    Equally his use of The Netherlands is a poor example as it was already in an economic recession after 9/11 so would not have been a healthy position in 2003.

    Economists have never really been here before. They are guessing, digging up models to provide answers to something that keeps going on and on and
    that "can't possibly continue".

    Ultimately I am with George Lee on this . I neither trust nor believe economists at face value and I am dubious about reports at the best of times. The latest US Jobs data has just reinforced this. Yet again they got it spectacularly wrong -50% out.

    As regards those posters looking to jump into the market , it might be best to see what the 1st quarter numbers offer. :)


  • #95
    miju
    Banned (with Prison Access) Posts: 8,486 ✭✭✭miju


    is_that_so wrote:
    Yes this is true and based on the normal effect of such increases it should help cool the market by making money more expensive, though not necessarily make it crash. Jim Power

    sorry cant resist , is this the same Jim Power who thinks interest rates are "done and dusted" when the rest of the financial world reckons otherwise

    is_that_so wrote:
    IMO it is impossible therefore to adduce that the unemployment rate will rise. More workers could lose their jobs but how can we determine what group it will affect most and more importantly how that will translate itself across the various economic sectors ?

    we cant really i suppose , but lets look at 2 scenarios:

    1: immgrants lose jobs = result: they go home to the home country leading to oversupply in rental accomodation meaning lower yields , meaning properties put up for sale , putting downward pressure on rent etc etc ..... doesnt look good for property in that scenario

    2: the irish lose jobs = less money going about economy , harder to get loans or qaulify for even a "modest 300k" mortgage , property market stagnates with prices eventually coming down to meet the lower mortgage amounts being approvied ..... doesnt look good in that one either does it?
    is_that_so wrote:
    Bad debts start to mount as businesses fold
    There does not seem to be much evidence of this particularly as last year was , although it does acknowledge that some newer companies in construction have suffered.

    i'm with you on this one , businesses fold ALL the time and it has no major effect on the economy as a whole , however a multinational pulling out of a rural area in particular could be bad real bad (not saying any will or they wont i'm just throwing that up there)

    is_that_so wrote:
    Peoples appetite for extending themselves to get on the ladder evaporates as fears over job security take precedence
    When people don't buy they still have to live somewhere. This should then create more demand for rental properties thus negating the previous scenario.

    except with construction work dried up and the immigrants off to help build for the london olympics you suddenly have a whole new glut of empty rental properties , not to mention the aforementioned 120,000 odd empty properites sitting idle being used for capital appreciation alone
    is_that_so wrote:
    In conclusion I don't take the view that there will an economic meltdown as the original article suggests. I find it hard to believe that data as presented. .................. 12-13% correction is not impossible and that would serve The latest US Jobs data has just reinforced this. Yet again they got it spectacularly wrong -50% out.

    :)

    i'm really just yanking your chain here man but what if your 12-13% is 50% out :D:D:D:D:D


  • #96
    [Deleted User]
    Posts: 0 ✭ [Deleted User]


    Cantab. wrote:
    Being an investor, I take it that you have done all the sums? What is your risk exposure? And is this risk worth the potential gain? I assume you are assesing the market based on facts, available data and trends, and not just reactive sentiment? Your mantra about "how wrong they were then" and "if you keep saying the sky will fall for the next billion years some day it may happen" could cost you dearly.

    Yes. Low. Yes. Yes. I doubt it.
    miju wrote:
    ALL evidence points to depreciation at best , MAJORITY of property bulls are all in AGREEMENT THAT PRICES HAVE PEAKED ... yet in your infinite wisdom you plan to buy an investment property

    But for the record, if I come back in 6 months or a year (ideally will flip it quickly, maybe subsale even before the stamp duty falls due) and and say I have made a profit which exceeds all the negative predictions here, you will endorse my 'infinite wisdom'?

    You're on...will revert with the figures when the engineer tells me how much I need to sink into the place.


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  • #97
    mentalson
    Closed Accounts Posts: 111 ✭✭mentalson


    is_that_so wrote:
    My issue is not with your use of data all of which speaks for itself aside from one point. 90,000 units from what I can see just refers to units. What proportion was affordable/social housing? If the government is to believed about
    Part V of the Planning Act 2000 Housing Targets     we can expect to see nearly 50,000 homes under the scheme over the coming years. How can or would you account for this?


    If the government is to believed!!! Part V is now fully operational. The latest figures show that of the 90,000 housing units completed last year approx 1,300 were acquired under Part V. (980 affordable, 390 social) Council housing officials have the the power to take cash from developers instead of the 20% and many have been doing so. a lot of housing officials now have new mercs.


  • #98
    Pa ElGrande
    Registered Users, Registered Users 2 Posts: 3,633 ✭✭✭Pa ElGrande


    miju wrote:
    sorry cant resist , is this the same Jim Power who thinks interest rates are "done and dusted" when the rest of the financial world reckons otherwise

    No. That was Austin Hughes
    Last night IIB economist Austin Hughes told the Irish Independent: "The ECB (European Central Bank) simply doesn't have to rise rates any further." He said the current 3.5pc bank rate (which means at least a 4.5pc rate for borrowers) is sufficient.

    "We've been guaranteed another one in December but that will be it, done and dusted," he said.

    Net Zero means we are paying for the destruction of our economy and society in pursuit of an unachievable and pointless policy.



  • #99
    jmayo
    Registered Users, Registered Users 2 Posts: 13,186 ✭✭✭✭jmayo


    Have to say Miju has highlighted two scenarios that are very likely and that will lead to housing buble bursting.

    All the forecasts regarding population are based on the fact that there is continued economic growth and thus they are foreigners (non-Irish passport holders lets say) around to buy future property or more likely rent existing and future property.
    At the moment all our economic growth seems to be tied up with housing.
    We do not export houses, we consume them with money provided as cheap credit. We are postponing the payment of these houses,we will be paying for them upto retirement, based on the premise we will have continued growth.

    If jobs are not here then foreigners leave and even worse native Irish start to leave like bad old days.
    Over supply usually means cheaper unless we live in some alternate universe and that does not apply to us.

    The big concern is the multinationals, who are here purely for their own benefit, not ours.
    When it becomes no longer cost effective they go and setup in cheaper locations.
    This is already happening. Companies close their Irish operations and either increase production in their far eastern plants, setup new ones there or move to Eastern Europe.
    People will really notice this when the likes of Dell pulls out of Limerick.
    Mid West loses 4 thousand direct/indirect jobs, check how that will effect house prices in Mid West.
    Try an find another employer that will fill that gap, particularly when our costs are now so high. The old chestnut about our young educated workforce doesn't wash anymore.

    On a lighter note:
    Has anybody ever thought this is all academic since buying property near a lowlying coastline, say Sandymount, Cork, Holland, Florida will be underwater in 20 years or so due to global warming, melting icecaps, continues el ninos etc etc.

    Now there's a thought ... buy near Roundwood or Johnny Foxs and watch it appreciate long term...

    I am not allowed discuss …



  • #100
    hi5
    Registered Users, Registered Users 2 Posts: 3,107 ✭✭✭hi5


    Here are some of Jim Powers predictions from July 2005,I'm sure we could do the same with Austin Hughes and all.
    Note his predictions on interest rates.



    http://archives.tcm.ie/irishexaminer/2005/07/07/story455344776.asp


  • #101
    Cantab.
    Closed Accounts Posts: 1,444 ✭✭✭Cantab.


    Deleted User wrote:
    Yes. Low. Yes. Yes. I doubt it.

    You are a very nonchalant investor. I wish you luck.


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