Boycott Of The Housing Market

GreeBo

Longfield wrote:

I seem to remember someone posting that ~40% of housing is owned by investors, well with yields in the 3% range..what happens when they move on to the next best earner as they surely will ?,

The people who are renting the houses from the investors will buy them.

GreeBo

Carb wrote:

At the moment, house prices are been fuelled by new products such as 40 year mortgages, interest only loans, 100% mortgages etc.

Very few people actually get these deals, you need to meet some strict criteria.
You cant just walk in off the street and get 400k over 40 years.

Gurgle

PDelux wrote:

I'm am no expert on the property market but i wonder if the Government could do anything to help people get on the ladder?

I'm no expert on the political system but I wonder how much money is donated to political parties by people who can't afford their own house.

Carb

GreeBo wrote:

Very few people actually get these deals, you need to meet some strict criteria.
You cant just walk in off the street and get 400k over 40 years.

Not yet, plus most people don't earn enough to borrow 400k anyway. The fact is, 7/8 years ago 20/25 year mortgages were the norm, then 30 years, then 35 years (mine included), and now people are starting to talk about 40 year mortgages. On repayments of roughly €1400 per month, you would have 300k over 30 years or 340k over 35 years. Add another five years and you can spend 380k but this can't go on forever.

Catney

Gurgle wrote:

I'm no expert on the political system but I wonder how much money is donated to political parties by people who can't afford their own house.

not a penny

Darragh29

The place to protest most effectively about this is come the next election! Don't vote for FF or the PD's, because they brought you your rip-off Ireland and your over inflated property market. Don't vote for FG or Labour because the situation will be no different if not worse under their stewardship. Register a single protest vote for an independent candidate, then the builders will not have the political control that they curently enjoy. The builders are the only winners in Ireland 2006 in relation to the property situation here. People who are paying 300k plus for a property, they are not winning, businesses are not winning as most, espsecially start-ups rent from greedy landlords who bought their properties years ago and charge crazy rents. I think we have to be the change we want to see in this country, so said Gandai.

Gurgle

Darragh29 wrote:

Register a single protest vote for an independent candidate

Thats pretty much the conclusion I've reached.
Vote for nobody with a party affiliation.

Raskolnikov

Shenzhen Resident Initiates Campaign to Boycott High-Priced Housing
Internet campaign against housing prices draws thousands of responses
By Yan Ming
Radio Free Asia May 06, 2006


The housing prices are skyrocketing in China's major cities and are beyond the affordability of the general public. (China Photos/Getty Images)The housing prices are skyrocketing in China's major cities and are beyond the affordability of the general public. A Shenzhen City resident named Zou Tao posted an open letter on the Internet urging people to "boycott high-priced housing," and was soon echoed by a large number of others. Shortly after, however, the open letter and the related messages on the web site were deleted. Furthermore, the web site has been blocked, and the campaign played down.

Shenzhen City's housing prices in the first quarter of 2006 rose by 20 percent compared with the same quarter of the previous year. The average housing price amounted to 8,700 Yuan (US$ 1,085) per square meter (about 10 square feet), which is far higher than what average people can afford. Zou Tao, a resident of Shenzhen City, who once recommended himself as a candidate for Shenzhen's representative of the People's Congress, launched the campaign to "boycott high-priced housing" on April 26. He called on all citizens to "cast votes with feet and boycott high-priced housing," while requesting real estate companies to take initiative in lowering housing prices to a reasonable level.

According to the Southern Metropolitan Daily , as of 7 pm the following day there were over 5,000 messages posted in response to the campaign, of which the overwhelming majority was supportive. Among them, over one thousand users left their contact information on the web site. Moreover, many expressed that they would initiate similar campaigns in other cities.

Zou Tao's open letter was posted on, oeeee.com, a popular web site in Shenzhen. An Epoch Times reporter has been attempting to access oeeee.com and szonline.net since April 28 without success. Following is a conversation between our reporter and a cyber police officer from a phone call made to the network supervisory department of the Shenzhen City Police Bureau.

Reporter: "Did you delete a large number of messages on the oeeee.com? Or did you ask someone to do so?"

Cyber police: "I have no idea."

Reporter: "Do you mean that you don't know, or you didn't do it?"

Cyber police: "I don't know."

On April 28, an insider of the case told our reporter that over one thousand messages echoing the open letter had already been deleted, but that Zou Tao would continue to go ahead with his campaign. At present, when entering "Zou Tao" into the Chinese search engine baidu.com, his personal web site as well as articles relating to his "boycott high-priced housing" campaign can still be found. Given that, Ma Xiaoming, an independent opinion figure in Xi'an City said:

"It is natural for the general public to initiate this kind of protest. Although it may have an impact on public opinion and spirit, the boycott is unlikely to really change real estate speculators' rigid mindset or their habits of colluding government officials to speculate in real estate market. However, if the government does not pay attention to this matter, it is very likely that the problem with real estate will lead to an even greater disturbance in society."

To curb housing prices, Beijing has initiated the overall control of real estate in 2005. In spite of this, housing prices have recently soared. In the meantime, the rate of vacant real estate remains quite high. According to Chinese media, as of last March, the total area of vacant houses reached 123 million square meters. The result is a large amount of vacant housing units, with many people still unable to afford a place to live. This phenomenon indicates the severity of the manipulation of housing prices. With regards to this, Professor Hu Xingdou at the Beijing Institute of Technology said:

"I believe that the hike in housing prices is inevitable, as the price mainly depends on the relationship of supply and demand. But, of course, the skyrocketing housing prices have much to do with various management problems. In other words, about one third of housing price is in fact for the payment of taxes and fees. If the taxes and fees can be slashed, housing prices will certainly drop. However, some local governments are highly reliant on proceeds from selling public land and collection of various taxes and fees.

Certainly, some problems in the real estate sector are also a result of unscrupulous businessmen colluding with government officials. In terms of running real estate business in China; since land is mainly purchased from the government and can be mortgaged to banks for loans, real estate business often doesn't need much money poured into it. In other words, nearly 70 percent of capital in the real estate industry is borrowed from banks. But how is it that businesspeople get loans from banks? And how can they purchase land from the government? In these regards, I would say it is because power has outweighed market economy in China."

lomb

Gurgle wrote:

Thats pretty much the conclusion I've reached.
Vote for nobody with a party affiliation.

true, but the majority of the irish voting eligible public are landowners themselves. and the majority look after themselves and want prices to rocket. the young are left transferring wealth to the old. but one day the old ones will have to transfer it back, so there are two ways of looking at things

RainyDay

Gurgle wrote:

Thats pretty much the conclusion I've reached.
Vote for nobody with a party affiliation.

A vote for an independent is a cop-out & a waste. How many independents have been quite happy to join up with one of the main parties once they got a sniff of a nice promotion. The independents in the current Dail have absolutely no power or influence, and have done nothing for their constituents.


For the record, I'm a Labour party member.

Gurgle

RainyDay wrote:

A vote for an independent is a cop-out & a waste. How many independents have been quite happy to join up with one of the main parties once they got a sniff of a nice promotion. The independents in the current Dail have absolutely no power or influence, and have done nothing for their constituents.

A vote for a party member is a cop-out and a waste.

Every party runs on corporate funding, and the arrangement couldn't be more transparent - We give you money, we expect you to support our business interests.

An individual politician may be incorruptible and as pure as the driven snow, but when it comes to a vote in the Dail, that TD doesn't generally get to make the decision himself. He is instructed on how to vote by the party.

An independant will usually be standing on the platform of a particular issue. In a party coallition, the independant can get support for their agenda in exchange for their support on other votes.

In a Dail full of independants, you would have a situation where the politicians are all working to achieve the aims of their election, while the administration of the country would to a greater extent be left to the civil servants who a) do it anyway and b) are currently prevented from doing it efficiently by the party in government and the favours they owe to their sponsors.

Voting for an independant is a vote for the aims that person wants to achieve while a vote for a party is always a vote for the rich to get richer.

This is most blatantly obvious in the housing market (getting back to the original topic), where the prices and profits are allowed to skyrocket by the policy of allowing building developers to build a new estate when and where they want to but preventing the common people from building their own house under practically any circumstances.

Pa ElGrande

A new regulator is to be appointed by the Government to protect the rights of house hunters.

The Director of National Property Services Regulatory Authority will be responsible for eliminating misleading or unethical practices in the property industry.

It will bring in new laws to govern estate agent and auctioneer practices, and is expected to come into force before the end of the month.

They will also be able to investigate and impose sanctions on those who breach the guidelines set out by the authority.

A number of new laws will be implemented to protect prospective house buyers from practices such as gazumping (where auctioneers pull out of a deal if they receive a higher price), the setting of unrealistic guide prices and the use of phantom buyers to push prices up.

The move is one of a number of measures being taken by the Minister for Justice Michael McDowell to make buying and selling property easier and more transparent.

The legislation will be published next year.

New property services regulator to protect house buyers
http://breakingnews.iol.ie/news/story.asp?j=185485968&p=y85486674

The cynic in me thinks this is just in time for the end of beginning of the end of the boom and a nice little slogan on someone's election manifesto, but it will never be implemented, since the election will be underway. However if it happens its a belated step in the right direction.

miju

BingoBongo wrote:

I think the housing market in Ireland is undervalued!!,

i thinkk you have your head seriously high in the clouds

miju

masterK wrote:

Many people seem to forget that we now live in a first world economy, Dublin has now become one of Europes major cities. For those who think property in Dublin in expensive why don't you see how much a 3 bedroomed semi close to the centre of London would cost, or Paris, Rome or even further a field to New York.

What has happened is house prices have corrected themselves in line with other major cities around the world as Ireland has developed from being a 2nd world economy to joining the worlds elite.

House prices will never collapse, the funny thing is I remember 7 or 8 years ago people saying that they're not buying a house because they are waiting for the market to collapse, guess what they're still waiting. This was at a time when a 3 bed semi in Dublin cost around £100,000. House prices will inevitably peak and level out with small annual increases in line with inflation, but this is still a few years away.

lmfao , whats happening is people are getting greedy and trying to keep up with the jones and have themselves all flustered into this big bubble that is the irish property market , more and more ftb's are getting priced out of the market so fundementally prices are gonna have to come down sooner if not later ,

what a few people don't realise is that another increase of .50% in the ecb base rate will knock approx 100,000 off the max mortgage of a couple on €72,000 pa to around €325,000 max , that's a shrinkage of about €70,000 off the average Dublin house prices

so with a near definite expected .25% rate rise on august 21st and another .25% in early 2007 we've hit that point and anything after will shrink a couples capacity to loan even more

make no mistake about it , as was recently reported in the Indo in 2002 FTB's made apprx 42% of the property market and in 2005 this has been reduced to 23% or 32% (can't remember which but either way is a large shrinkage) the house of cards has already started to tumble IMHO it'll just take time before the freefall begins

Gurgle

miju wrote:

what a few people don't realise is that another increase of .50% in the ecb base rate will knock approx 100,000 off the max mortgage of a couple on €72,000 pa to around €325,000 max , that's a shrinkage of about €70,000 off the average Dublin house prices

What a lot of people don't realise is that this kind of rubbish has been bandied about since Dublin house prices averaged to £100,000 in the mid 90's.

The correlation you're drawing between prices and FTB's max mortgage just isn't there. What happens is what you described - the proportion of FTBs buying in Dublin just goes down - its already happened, it will continue to happen.

Meanwhile, investors buy houses and pack students / young professionals in like sardines to pay the mortgage.

Dublin has failed to go in the direction of every other major city on Earth - up.

When the high-rise appartment buildings finally start getting built, then and only then we will see a levelling off, even a slight drop in Dublin's house prices. And that will only happen when theres estates full of 3-bed semis on every patch of dirt in the commuter belt.

miju

Gurgle wrote:

What a lot of people don't realise is that this kind of rubbish has been bandied about since Dublin house prices averaged to £100,000 in the mid 90's.

well it may have been bandied about since the 1990's but now the difference is it's now starting to prove correct hence the statistical decline in market share of FTB's

markets rise as well as fall , they don't just rise and rise (contrary to other peoples opinions) history has proven this time and time again , the interest rates and a change in sentiment towards confidence on the market will trigger the decline IMHO

Gurgle

miju wrote:

they don't just rise and rise (contrary to other peoples opinions) history has proven this time and time again, the interest rates and a change in sentiment towards confidence on the market will trigger the decline IMHO

Its pretty unpredictable, but we have to try.
The housing market can go into decline without any reduction in prices, and that is what I expect to see when it overshoots, corrects and levels off in Ireland.

If in any given year inflation is at 5% and house prices increase by 3%, then thats an effective 2% reduction in the house prices. Thats the soft landing thats coming.

Negative equity, repossesions etc. - Not going to happen imho.

whizzbang

Gurgle wrote:

If in any given year inflation is at 5% and house prices increase by 3%, then thats an effective 2% reduction in the house prices. Thats the soft landing thats coming.

Negative equity, repossesions etc. - Not going to happen imho.

I'm fascinated by this soft landing theory, can you find an example of one from history please?

Afuera

Gurgle wrote:

If in any given year inflation is at 5% and house prices increase by 3%, then thats an effective 2% reduction in the house prices. Thats the soft landing thats coming.

Interesting theory. But why would investors (which currently make up about 45% of buyers) continue to buy if there is no capital appreciation and they are facing rising interest rates?

If you take investors demand away, is there really enough demand from owner-occupiers alone to support all the houses being built?

Gurgle

Afuera wrote:

Interesting theory. But why would investors (which currently make up about 45% of buyers) continue to buy if there is no capital appreciation and they are facing rising interest rates?

Because, even with absolutely no capital appreciation, its still the best return-for-risk investment available.
Take an example:
You buy a house for €400k over 40 years.
Repayments of around €1600 pm (ish).
For simplicity we'll assume that this monthly payment is fixed for the entire 40 years.

Lets say you can only get an average of €1200 rent pm over the first 10 years.

So between income tax, interest relief etc etc your're probably going to be out of pocket by €600 pm for those 10 years. (again, big 'ish)
You're out €72,000 over those 10 years.

Lets say rent goes up to an average of 1600 pm for the next 10 years (equating to inflation of average 3.3% per year)

You're out of pocket by approx €300 pm for those 10 years (income tax offset by interest relief and so on)
Thats another 36,000 you've paid.

Next 10 years, average rent of €2200 pm, keeping inflation at 3.3%
Now you're making money every month.
Say about €200 per month into your hand.
For those 10 years, you're up €24,000.

Final 10 years, average rent €3000 pm, €500 of which ends up in your pocket.
Thats another €50k.

Now, with an overall outlay of €34k, (net present value probably closer to €100k), you have either a source of income from the house or a great big bonus from selling it.

These figures are rough as hell, but I'm trying to err on the side of pessimism.
You don't need capital appreciation to be worthwhile investing in a rental property.

Gurgle

whizzbang wrote:

I'm fascinated by this soft landing theory, can you find an example of one from history please?

Read this

hmmm

Gurgle wrote:

These figures are rough as hell, but I'm trying to err on the side of pessimism.

Hardly. Rents have decreased in Dublin over the past 5 years and show no signs of recovering. They're certainly not increasing at 3.3% a year! You seem to be drawing some link between rents and inflation, when rents are tied to demand for the housing stock and have nothing to do with the price of bread.

For simplicity we'll assume that this monthly payment is fixed for the entire 40 years.

For simplicity you're going to assume that interest rates which are currently at extremely low rates will remain the same over 40 years? That's hilarious. Your figures I'm afraid are utterly unconvincing. Even before we begin to ask where you've factored in tax on rental income at 40% and the costs of upkeep, insurance etc.

DublinWriter

RainyDay wrote:

A vote for an independent is a cop-out & a waste. How many independents have been quite happy to join up with one of the main parties once they got a sniff of a nice promotion...
For the record, I'm a Labour party member.

You mean just like Labour did with Albert Reynolds back in the early 90's?

I'll see your "independents doing nothing for their people", and raise you Tony Gregory.

DublinWriter

miju wrote:

markets rise as well as fall , they don't just rise and rise (contrary to other peoples opinions) history has proven this time and time again , the interest rates and a change in sentiment towards confidence on the market will trigger the decline IMHO

Yes markets rise as well as fall, but analyse any market over a long period of time (say the term of an average mortgage) and on the whole it rises.

Plot a graph of average Dublin house price over time since 1970, and that you'll see that plot line is only going in one direction.

The *worst* that can happen is that the current growth rate will slow down and track inflation.

It's basic Adam Smith economics - the demand for property is so great that any short term readjustment downward would be propped up by people suddenly jumping into the market.

Gurgle

hmmm wrote:

Hardly. Rents have decreased in Dublin over the past 5 years and show no signs of recovering.

A few years ago you could buy a house in Dublin and rent it for more than the mortgage repayments. A correction of this situation has occurred with so many extra investors entering the market.

hmmm wrote:

You seem to be drawing some link between rents and inflation, when rents are tied to demand for the housing stock and have nothing to do with the price of bread.

Inflation is more to do with mortgages, house prices and rent than the price of bread. Bread has in fact got cheaper over the last 5 years. Houses have not.

hmmm wrote:

For simplicity you're going to assume that interest rates which are currently at extremely low rates will remain the same over 40 years? That's hilarious.

The further you are into your mortgage the less the effect of interest rate changes. Glad you found it funny.

hmmm wrote:

Your figures I'm afraid are utterly unconvincing.

meh!

hmmm wrote:

Even before we begin to ask where you've factored in tax on rental income at 40% and the costs of upkeep, insurance etc.

Do the sums from my example.

I haven't precisely factored in those costs, just made a rough allowance for them, and it is offset by the tax relief on the interest portion of the mortgage repayments.

Doesn't matter a shìt to me tbh, I am a happily positive-equitied home owner.
Just presenting the basis for thinking the market isn't on the verge of a crash, for the benefit of anyone whos smugly waiting for one.

miju

DublinWriter wrote:

It's basic Adam Smith economics - the demand for property is so great that any short term readjustment downward would be propped up by people suddenly jumping into the market.

you've said this on another thread DublinWriter and i've also replied that's simply not going to happen , do you honestly think if people see prices falling are just going to jump straight in??? they'll hang about see how long it takes for them to bottom out and then buy starting the whole cycle off again

ronbyrne2005

Dont forget any crash/correction will hit the wider economy and create a negative cycle.Sentiment is everything is economies/asset prices,negative sentiment can drag even undervalued assets down. Do you think the immigrants (who are keeping investor/rental sector flourishing) will be here if economy slows(particularly in construction sector and consumer and service sector where many immigrants are employed)? and when the rest of europe opens to these immigrants your gonna have a lot less demand for housing and we all know what happens when theres excess supply/shortage of demand.

elivsvonchiaing

CiaranC wrote:

Theres no need to boycott the housing market as its about to COLLAPSE any second, just as soon as all these developments with people queueing up for a week to buy them are sold its going to COLLAPSE I tell you, except it maybe will rise for another 5 years or so first but then it will COLLAPSE and you will all be sorry.

*edit* its gonna COLLAPSE! rawr

Notice: Property prices may rise as well as fall. Or stay level. Or slow down. Or ease off. Or grow.

I was looking at the place I'm in now and couldn't afford it. I decided to place a cheeky offer for it just after 9/11. I reckoned this was the apocalypse in property and it would be worth what I was paying for it again in 2006.

I was wrong.

Now I'm looking to move and am more nervous now. Think I'll stay to be honest fulfilling original posters demands.

I really think its better to sell and move when a shock has set into an economy; I don't want a bridging loan costing €10k or something.

Auctioneers are still way too cocky for the nervousness that I think "movers" feel. I.e. (sell a property to move to another).

I'm sick of "They close after being just two weeks on the market!" and "We could sell your place in as little as a month".

Gimme a break! :mad:

For property movers imho - think there is a bit of cold-feet beginning to set in; SSIAs are not going to cover even poxy stamp duty for most property moves; so think these will go into new cars, holidays and properties abroad tbh.

Can see a dip approaching...

RainyDay

Gurgle wrote:

Every party runs on corporate funding, and the arrangement couldn't be more transparent - We give you money, we expect you to support our business interests.

An individual politician may be incorruptible and as pure as the driven snow, but when it comes to a vote in the Dail, that TD doesn't generally get to make the decision himself. He is instructed on how to vote by the party.

An independant will usually be standing on the platform of a particular issue. In a party coallition, the independant can get support for their agenda in exchange for their support on other votes.

In a Dail full of independants, you would have a situation where the politicians are all working to achieve the aims of their election, while the administration of the country would to a greater extent be left to the civil servants who a) do it anyway and b) are currently prevented from doing it efficiently by the party in government and the favours they owe to their sponsors.

Voting for an independant is a vote for the aims that person wants to achieve while a vote for a party is always a vote for the rich to get richer.

Your comments about funding are factually incorrect. Check out the recent releases by SIPO and you'll see where the funding actually comes from. For left-leaning parties like Labour & Greens, corporate funding is tiny or non-existant.

Your comments about 'the party' display a lack of understanding of how political parties work. There is no 'party' as a seperate living thing. The party is made up of individuals. Party policy are set by individuals. Party members vote on major policy issues at annual conferences. Individual TD's are hugely influential in writing policy in their own areas.

The highly-improbably picture that you paint of a Dail full of independents would be an abosolute nightmare. Nothing would get done. Nothing would be agreed. The country would be frozen into a state of confusion & disagreement.

DublinWriter wrote:

You mean just like Labour did with Albert Reynolds back in the early 90's?

I'll see your "independents doing nothing for their people", and raise you Tony Gregory.

Gregory is indeed an interesting case. He did manage to swing a great deal for his constituency in '82 (iirc) when he found himself holding the balance of power for a short period. But how much has Gregory delivered recently? I've just been reading a book on Garrett Fitz which mentions Garrett's refusal to negotiate with Gregory in the way that Haughey did as the country simply couldn't afford to put some much cash into one single constituency. Is that what you really want - a small number of independents taking an unfair share of resources for their own area? This isn't a sensible way to run a country.

Pa ElGrande

+ Fewer than one in four houses put under the hammer actually sold at auction in Ireland last week. At one Lisney sales room last Tuesday, nobody at all turned up to bid on three properties on offer. As for those that did sell — if you include the ones that went before the auction and those withdrawn that then sold afterwards — only 39 out of a possible 75 auction offerings actually changed hands.
+ As we write, the calculators are overheating at the Economic and Social Research Institute, as it crunches the past 10 years of statistics from the Permanent TSB/ESRI House Price Index.

The figures, to mark the 10th anniversary of the index, will come out on Tuesday, and what is promised is a county-by-county breakdown of the winners and relative losers over an unprecedented decade of property market boom.

The Sunday Times - Property - The Market
http://www.timesonline.co.uk/article/0,,2098-2228028.html

Bill Shankly's most famous (and most often misquoted) quote - "Someone said 'football is more important than life and death to you' and I said 'Listen, it's more important than that'."