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ESRI and property doomsday

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  • 26-12-2005 5:04pm
    #1
    Cantab.
    Closed Accounts Posts: 1,444 ✭✭✭


    I'm surprised nobody has been talking about this on here over the last two weeks.

    Will the ESRI be left with egg on their face given their predictions on the Irish property market. If they are, what confidence can we ever have in their figures ever again, indeed what use are they at all?!


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    #2
    mentalson
    Closed Accounts Posts: 111 ✭✭mentalson


    eh. they have been saying more or less the same thing for years.
    I think their chief economist said " I'm going to keep saying it till it happens" I think doomsday predictions are getting a bit less coverage because its like the boy who cries wolf. truth is nobody knows whats gonna happen.
    who would have predicted last year that prices will go up 10% this year.


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    #3
    muffler
    Registered Users Posts: 46,083 ✭✭✭✭muffler


    Cantab. wrote:
    Will the ESRI be left with egg on their face
    No. On their face will probably be a splatter of sh*t from a flying pig.

    They are as useful as an ashtray on a motorbike


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    #4
    lomb
    Registered Users Posts: 6,031 ✭✭✭lomb


    muffler wrote:
    They are as useful as an ashtray on a motorbike

    or in Michael O'Leary words, as useful as a condom in a convent:D


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    #5
    Lex Luthor
    Registered Users Posts: 11,220 ✭✭✭✭Lex Luthor


    mentalson wrote:
    who would have predicted last year that prices will go up 10% this year.
    and will probably continue that way for at least another 2-3 years I'm guessing. Only a recession or a hike by about 2% in interest rates will curb the rise in house prices.


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    #6
    Thomond Pk
    Closed Accounts Posts: 449 ✭✭Thomond Pk


    muffler wrote:
    No. On their face will probably be a splatter of sh*t from a flying pig.

    They are as useful as an ashtray on a motorbike

    The ESRI do some excellent research and their findings in this report are exactly what one would expect from logical economists such as the Central Bank, ECB, IMF and OECD who all in varying degrees see the same thing happening.

    Unfortunately all of the above are thinking rationally and drawing from International experience and wisdom.

    For what will happen in the Irish market look no further than the film 'The Field' as a society Ireland is land mad. Regardless of what is happening in other investment markets the typical punter here can no further than property and typically residential property. Despite the hyper-inflation in both rental and capital values over the past 11 years there does not seem to be an end in sight to the rise in property values.

    However when it does come there will be a lot of blood on the floor and the higher it goes the more blood there will be. My own investments rose nearly 40% this year and paid nearly 5% in dividends. They could equally face a meltdown at some future date.


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    #7
    hmmm
    Registered Users Posts: 11,205 ✭✭✭✭hmmm


    Thomond has it right - economists draw logical conclusions, assuming the market is also logical. If the market is behaving illogically (prices going up while rents go down), you can't expect economists to became behaviourologists in trying to figure out group property mania.


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    #8
    coolhandluke
    Registered Users Posts: 249 ✭✭coolhandluke


    Ah what do the experts know,you can't lose i'm tellin ya !:D


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    #9
    lomb
    Registered Users Posts: 6,031 ✭✭✭lomb


    everyone here wants to own not just there own properties but another for rental, the irish ARE land crazy for sure, it probably is fools gold in some/many parts of the property market, but there is still value out there for those who know anything about property..


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    #10
    coolhandluke
    Registered Users Posts: 249 ✭✭coolhandluke


    lomb wrote:
    everyone here wants to own not just there own properties but another for rental, the irish ARE land crazy for sure, it probably is fools gold in some/many parts of the property market, but there is still value out there for those who know anything about property..

    Yes,lets all hope for the day when everyone in ireland owns a second property,sure we'll all be rich then.:D


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    #11
    Thomond Pk
    Closed Accounts Posts: 449 ✭✭Thomond Pk


    The problem with your theory Luke is that one market segment i.e. residential of one sector i.e. real estate absorbs all the risk capital available to the market. The result of this is that there is no risk based capital for anything else such as

    1> Technology
    2> Commercial Property
    3> Service industry
    4> Leisure

    If the one market segment collapses there are no profits or in the case of residential property no tenants hence 100% of the liability with none of the income to clear the debt.

    My advice to anyone wishing to get involved in property investment is to look towards some of the larger property funds with broad geographical spread that are not tied to one sector ie residential, offices, retail or industrial. Some of the better funds have returned 30% p.a. over the past two years and pay dividends.


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    #12
    coolhandluke
    Registered Users Posts: 249 ✭✭coolhandluke


    Thomond Pk wrote:
    The problem with your theory Luke is that one market segment i.e. residential of one sector i.e. real estate absorbs all the risk capital available to the market. The result of this is that there is no risk based capital for anything else such as

    1> Technology
    2> Commercial Property
    3> Service industry
    4> Leisure

    If the one market segment collapses there are no profits or in the case of residential property no tenants hence 100% of the liability with none of the income to clear the debt.

    My advice to anyone wishing to get involved in property investment is to look towards some of the larger property funds with broad geographical spread that are not tied to one sector ie residential, offices, retail or industrial. Some of the better funds have returned 30% p.a. over the past two years and pay dividends.

    Eh,what theory ?:confused:


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    #13
    Thomond Pk
    Closed Accounts Posts: 449 ✭✭Thomond Pk


    That everyone will invest in both a first and second property


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    #14
    Victor
    Registered Users Posts: 78,392 ✭✭✭✭Victor


    coolhandluke wrote:
    Yes,lets all hope for the day when everyone in ireland owns a second property,sure we'll all be rich then.:D
    But who will live in this second property? There will be no tenants, because everyone owns their own home. There would be a glut in the market and prices would drop hugely .....

    Remember that some people will be perfectly happy selling off that apartment they bought in 1990 for £30,000 for say .... €150,000. Hows your negative equity then?


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    #15
    coolhandluke
    Registered Users Posts: 249 ✭✭coolhandluke


    Victor wrote:
    But who will live in this second property? There will be no tenants, because everyone owns their own home. There would be a glut in the market and prices would drop hugely .....

    Remember that some people will be perfectly happy selling off that apartment they bought in 1990 for £30,000 for say .... €150,000. Hows your negative equity then?

    Ah i know,that's my point i was being sarcastic above.

    Check out this thread for my view on the housing madness.

    http://www.boards.ie/vbulletin/showthread.php?t=2054866932


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