Boycott Of The Housing Market

Pa ElGrande

The number of people employed in the construction sector in Ireland had increased by more than 2.5% in April of this year compared to the same period in 2005

Index of Employment in Construction
http://www.cso.ie/releasespublications/documents/construction/current/indexemp.pdf

No need to boycott the market when this is all over there will be housing for everyone.

Gurgle

lomb wrote:

or it could be seen as being unsustainable due to something called economisation of services. this means all serivices are brought to a point, like transit, water, sewage, waste collection, post offices, schools etc.

Services:
transit? lol
water? well
sewage? septic tank
waste collection? privately run, massive profits

post offices, schools etc?
wtf are you talking about?
is there a plan to have a post office and school within 100m of every house?
has anyone ever asked for that?

DublinWriter

Pa ElGrande wrote:

No need to boycott the market when this is all over there will be housing for everyone.

Dazs reoight...Krusty is coming....Krusty is coming...Krusty is coming...

*LOL* Sorry, couldn't resist.

ionapaul

Don't you people know that the Irish economy is unique - we can sustain our amazing growth by simply continuing what we have been doing - building houses to sell to one another (international investors not interested, for obvious reasons) and to rent to the workers we need to build more houses to rent to the workers we need to build even more houses. Get with the programme!

Gurgle

ionapaul wrote:

Don't you people know that the Irish economy is unique - we can sustain our amazing growth by simply continuing what we have been doing - building houses to sell to one another (international investors not interested, for obvious reasons) and to rent to the workers we need to build more houses to rent to the workers we need to build even more houses. Get with the programme!

economy != housing market

Afuera

Gurgle wrote:

economy != housing market

In the case of Ireland this is disputable. Without the housing market unfortunately there's not much economy left.

Pa ElGrande

Just as threatening to the Irish economy is a real estate bubble that, by some measures, surpasses the ones in midtown Manhattan or downtown Washington. Over the past 20 years, average new-house prices have increased six- and sevenfold, to around $400,000, far outstripping the otherwise impressive increase in household incomes. Two-bedroom condos in Dublin sell for more than $1 million, with three-bedroom houses on small lots fetching double that amount. New housing developments routinely sell out in a single weekend.

The frenzy is driven by several factors: newly confident twentysomethings desperate to get on the housing ladder before it's too late, the arrival of European banks offering mortgages with no money down and interest-only monthly payments, and a national preoccupation with landowning that probably dates back to when all land was in the hands of British gentry. The accompanying construction boom accounts for half of the country's job growth in recent years.

This bubble sets up the Irish economy for a terrible blow when it finally bursts. And while it is impossible to say when that will happen, it is probably instructive that owners of two of the largest real estate firms decided to sell out in the last two weeks.

Even more troublesome is the fact that so much of Ireland's newfound wealth is being reinvested in real estate, at home and abroad.

Ireland Challenged To Build On Success
http://www.washingtonpost.com/wp-dyn/content/article/2006/06/20/AR2006062001541.html

Even the Washington Post see's our housing bubble, yet on the whole we are wading knee deep in an Egyption river.

Banking business is enjoying exceptional growth with new lending significantly ahead of, and new current account opening exceeding, last year's record levels.

Irish Life & Permanent says new lending for the first six months of 2006 is expected to increase by almost 50% over the first half of 2005
http://www.finfacts.com/irelandbusinessnews/publish/article_10006326.shtml

Credit fulled boom

Pa ElGrande

Afuera wrote:

In the case of Ireland this is disputable. Without the housing market unfortunately there's not much economy left.

Employment in the construction sector in Ireland accounts for a total of 252,100 jobs- this from a total of 1,929,800 employed persons in Ireland. AIB's report, meanwhile, indicates that only 22,600 non-nationals are employed in construction. Conversely, 27,800 non-nationals are employed in manufacturing, 23,100 in the hospitality industry and 21,500 in financial and business services. Not only is the construction sector not 'flooded' with immigrants, it's not even particularly representative of what non-Irish nationals are employed to do.

http://commentisfree.guardian.co.uk/jason_walsh/2006/05/not_a_stone_will_stand_upon_a.html

Construction is not the entire economy, but it dominates the domestic economy.

Afuera

That figure of 252,100 jobs employed in the construction sector is only counting direct employment in the sector. Related jobs such as estate agents, banking, advertising, etc. are very dependant on the sector but would not be included in this figure. I'd suspect that as much as 40% of jobs in Ireland are feeding off the property market either directly or indirectly.

DublinWriter

Afuera wrote:

That figure of 252,100 jobs employed in the construction sector is only counting direct employment in the sector.

It would be interesting to see if that figure only comprised people involved in 'new' building projects.

Builders, chippies, sparks and plumbers don't just work on new developments.

Pa ElGrande

On the back of the IIB bank/ESRI report earlier this week, where questions were raised about one of the reports statement that "the financial position of Irish consumers is very healthy in aggregate; the value of the houses they own and their deposit accounts exceed their debts by around €440 billion."

There is a discussion between Austin Hughes (Chief economist IIB Bank), Constantin Gurdgiev ( Lecturer in economics TCD and editor of Business and Finance magazine), Jill Kerby (Sunday Times personal finance)

You can listen to it here: http://www.newstalk.ie/podcasts/library/breakfast/ed2806.mp3

The interview starts 12:20 minutes into the podcast and lasts 15 minutes and some very valid and rational points are made.

FYI - this is the report in question

‘In too Deep?’
http://www.iib.ie/economic/briefings/IIB-ESRI%20Debt%20Survey%20June%202006.PDF

Afuera

DublinWriter wrote:

It would be interesting to see if that figure only comprised people involved in 'new' building projects.

Builders, chippies, sparks and plumbers don't just work on new developments.

That's a good point. I'd say that this number is just taking account of anyone that works in the building trade, meaning that they could be involved in repairs or modifications to existing properties. If there were no new builds going on then a certain amount of these would still be needed but it would only be a fraction of what it is now.

I've heard it said that 50% of the price of a new build goes straight into the pocket of a government through VAT on materials, stamp duty, taxes etc. Taking the average house price of 300,000 that would mean they get 150,000 on average from each newly built house. If there were 80,000 houses built last year then that means the government got a cool 12 billion from new builds alone. That's enough money to employ around 400,000 people on the average wage of 30,000.

Whatever way you look at it, a slowdown in the amount of new builds going up is going to adversely affect the economy one way or another.

GreeBo

Afuera wrote:

I've heard it said that 50% of the price of a new build goes straight into the pocket of a government through VAT on materials, stamp duty, taxes etc. Taking the average house price of 300,000 that would mean they get 150,000 on average from each newly built house.

Hang on though, it doesnt cost anywhere near 300,000 to a build a house that sells for 300,000.
Check out the re-instatement value on your home insurance policy.
Probably not much more than 100k.

Afuera

GreeBo wrote:

Hang on though, it doesnt cost anywhere near 300,000 to a build a house that sells for 300,000.
Check out the re-instatement value on your home insurance policy.
Probably not much more than 100k.

I'll need to see if I can track down that article again. But, I'm pretty certain it was 50% of the selling price, not the cost price, that the government recieves for every new build. I'm sure that the fact that the government taxes everyone in the chain of sale (builders, solicitors, estate agent, advertisers,...) would account for a large portion of the amount they are able to receive.

JimmySmith

miju wrote:

i'll put this scenario to you DublinWriter

if after the next .50% rise (which going on todays news could be with us by August) the average couple with €72,000 salary between them can only get a €325,000 mortgage (as stated by the central bank late last month) but yet the average price is going to hit €400,000 what does that tell you

the prices will quickly stagnate , keep rising or more than likely starting falling towards that €325,000 mark ?????

and thats before any further rises

This is just one example of making an argument but not thinking about the numerous other variables involved.

Just to point out how it can change.

What the average price of a house is and what a couple on an average wage can get a loan for are not directly related though. Included in the average price paid for a house are also those houses (the majority) which are bought by people trading up.

If that couple already had a house with equity of €100K then they would get a mortgage of €325K or more would they not. add that to their equity of €100K and you get €425K.

Also if they both have maximum SSIAs.
They would get a payout €40K between them this would increase their borrowing power again. They also have an extra €500 a month that they used to put in their SSIAs as disposable income.

Remember, a lot of people are starting of several rungs up the ladder. These are going to have a distinct advantage over those not on the ladder, crash or not.

I dont know what will happen the housing market, but i find it easier to discount the arguments on the crash side with a little thought about other variables involved than to make them more solid arguments.

Just pointing out that theres are literally millions of variables and its impossible to include them all and say one way or another how the housing market is going to go. Thats what crystal balls are for.

You just need to look around you and see that people are still interested in paying these prices for houses. Its the ones that cant reach the first rung on the ladder who are putting forward the crash arguments.

Dont look for any steps from the govt to decrease the value of proerty. They make much much more out of it with it going up.

Even their last step of increasing the stamp duty threshold (while they fooled everyone into thinking they were helping FTBs) was just a disguised attempt to increase the average value of houses. It was obvious to the Dogs on the streets what would happen to prices. Do you honestly think the govt overlooked this. I think not.

Maxwell

Reading this thread with interest:

"You just need to look around you and see that people are still interested in paying these prices for houses. Its the ones that cant reach the first rung on the ladder who are putting forward the crash arguments."

Im not so sure to be honest, Im a home owner for the past 4 years on a relatively low mortgage with only 19 years left on it and am "contemplating" trading up" but am not because Im scared to death that the whole economy is going to collapse.

More and more people are worried about a collapse - mainly because most people are borrowed up to the limit. I really don't think its just first time buyers/want to be first time buyers

miju

JimmySmith wrote:

What the average price of a house is and what a couple on an average wage can get a loan for are not directly related though. Included in the average price paid for a house are also those houses (the majority) which are bought by people trading up.

How do these people trade up when

JimmySmith wrote:

Its the ones that cant reach the first rung on the ladder who are putting forward the crash arguments.

unless of course it's just other investors which of course kinda proves the whole speculative bubble theory does it now.

JimmySmith wrote:

Also if they both have maximum SSIAs.
They would get a payout €40K between them this would increase their borrowing power again. They also have an extra €500 a month that they used to put in their SSIAs as disposable income.

2 points here:

1: what happens after everyones SSIA dries up
2: that extra €500 still comes out of they're 72k wages which will still restrict them to a 325k mortgage as explained above

and i'm sure that €500 would be quickly swalloed up by esb , gas , digital tv , childcare , petrol , food and so on

JimmySmith wrote:

If that couple already had a house with equity of €100K then they would get a mortgage of €325K or more would they not. add that to their equity of €100K and you get €425K.

again your talking about people already owning property , alot of the property market (some 40% according to ESRI but shrinking every day due to rising prices) relies on the FTB to buy houses in order to keep it going in order for trade up's etc , etc

JimmySmith wrote:

I dont know what will happen the housing market, but i find it easier to discount the arguments on the crash side with a little thought about other variables involved than to make them more solid arguments.

pot calling kettle??????? i personally think it's you who has not considered all the variables and is indeed "swept up" in the buy , buy , buy mentality currently going on

the ECB have been increasingly aggressive in their language (with 6 members of the council strongly hinting at another raise on the 6th july as well as in august)

Carb

JimmySmith wrote:

This is just one example of making an argument but not thinking about the numerous other variables involved.

Just to point out how it can change.

What the average price of a house is and what a couple on an average wage can get a loan for are not directly related though. Included in the average price paid for a house are also those houses (the majority) which are bought by people trading up.

If that couple already had a house with equity of €100K then they would get a mortgage of €325K or more would they not. add that to their equity of €100K and you get €425K.

So who are all these people that are trading up doing to sell to. If the first time buyer can only borrow less, the person selling at the bottom of the ladder, will receive less, thus less equity. Plus the person who has sold will be borrowing less. So they'll have less equity to use, and a smaller loan, so the house they are buying will have to have a lower price. The person selling at this level, will face the same scenario. If prices correct, they'll corect from bottow, right to the top.

In your scenario, you also missed the point that people with equity built up of 100k, could previously have bought a house for 500/525k, as they could also have borrowed more.

miju

indeed carb the new buzz word in the property market shouldn't be "equity release" it should be "fundamentaly" as in:

fundamentaly this craziness can't continue for much longer

GreeBo

Surely if you are afraid to trade up due to a crash you should be selling off and renting until the crash hits?

JimmySmith

miju wrote:

How do these people trade up when


unless of course it's just other investors which of course kinda proves the whole speculative bubble theory does it now.

Just because Johnny and Mary cant afford to get on the bottome rung doesnt mean that Frankie and Biddy cant.

miju wrote:

2 points here:

1: what happens after everyones SSIA dries up
2: that extra €500 still comes out of they're 72k wages which will still restrict them to a 325k mortgage as explained above

You're not getting my point here. Their SSIa enables them to get on the ladder at a certain level. If they didnt have the SSIAs they may just have to rent or settle for a cheaper property that cost €325K
Regardless- i'm just poinint out that different things effect affordabitlity - not just what the average industrial wage is.

miju wrote:

and i'm sure that €500 would be quickly swalloed up by esb , gas , digital tv , childcare , petrol , food and so on

Whats your point here ??

miju wrote:

again your talking about people already owning property , alot of the property market (some 40% according to ESRI but shrinking every day due to rising prices) relies on the FTB to buy houses in order to keep it going in order for trade up's etc , etc

So i sell my little apartment to an FTB for €250K and i buy my house for €400K. The chain can go up to 10 (for example) people trading up and only one FTB buying my apartment.

miju wrote:

pot calling kettle??????? i personally think it's you who has not considered all the variables and is indeed "swept up" in the buy , buy , buy mentality currently going on

Why? all i'm saying is that nobody can pretend to know whats going to happen as none of us have a crystal ball. I'm just pointing out that any argument, whichever side you are on will have a counter.

miju wrote:

the ECB have been increasingly aggressive in their language (with 6 members of the council strongly hinting at another raise on the 6th july as well as in august)

So what. Despite media scare mongering People can afford another raise. Especially Jack and Jill who have an extra €500 a month from their SSIA payments. And all the people who bought years ago and dont have huge mortgages. And there are more house owners who have low mortgage payments than high payments. Not everybody bought as an FTB in the last year you know.

JimmySmith

Carb wrote:

So who are all these people that are trading up doing to sell to. If the first time buyer can only borrow less, the person selling at the bottom of the ladder, will receive less, thus less equity. Plus the person who has sold will be borrowing less. So they'll have less equity to use, and a smaller loan, so the house they are buying will have to have a lower price. The person selling at this level, will face the same scenario. If prices correct, they'll corect from bottow, right to the top.

See my previous post.

Carb wrote:

In your scenario, you also missed the point that people with equity built up of 100k, could previously have bought a house for 500/525k, as they could also have borrowed more.

Why? I could only afford a mortgage of €140 on my first property (1 - bed apt) when i bought it. It was my absolute limit. Today i could by a house for much more with the equity plus a few bob. Much the same story for any FTB who bought before This year i would imagine. What the future holds though i cant tell you. And you cant tell me either.

miju

JimmySmith wrote:

Just because Johnny and Mary cant afford to get on the bottome rung doesnt mean that Frankie and Biddy cant.

if they're both FTB at the high end of the average industrial wages it means frankie and biddy can't either

JimmySmith wrote:

You're not getting my point here. Their SSIa enables them to get on the ladder at a certain level. If they didnt have the SSIAs they may just have to rent or settle for a cheaper property that cost €325K
Regardless- i'm just poinint out that different things effect affordabitlity - not just what the average industrial wage is.

your not getting my point either: the SSIA will act as a stop gap measure only after that dries up how does your average earning FTB "get on the ladder" , you've kind of defeated your own point by saying they rent , sure FFS is it not blindingly obvious if they rent then they NOT BUYING A PROPERTY which brings it back to who is going to buy a property for someone to "trade up" from?????????

JimmySmith wrote:

So i sell my little apartment to an FTB for €250K and i buy my house for €400K. The chain can go up to 10 (for example) people trading up and only one FTB buying my apartment.

so what the price of your apartment comes down then to 250k in order for you to trade upi???? don't get your chain figure of 10 people trading up from only one person buying your apartment (and you know what else that sentence sounds like don't you , pyramids just aint in egypt dont ye know LOL )

JimmySmith wrote:

Why? all i'm saying is that nobody can pretend to know whats going to happen as none of us have a crystal ball. I'm just pointing out that any argument, whichever side you are on will have a counter.

of course no one has a crystal ball , but it cant be denied there's a massive problem staring the irish economy in the face with the property bubble and very few people want to acknowledge that , all indicators are seriously begininning to point to a downturn on the horizon ( of course we've the soft landing theory which i can't envisage materialising just like it's never done in any bubble in history)

JimmySmith wrote:

whats you point?

.....................


So what. Despite media scare mongering People can afford another raise. Especially Jack and Jill who have an extra €500 a month from their SSIA payments.

see my point about rising costs of everything and general inflation then see you asking what my point is ?????

ultimately the balance of power in the property market lies with the FTB , if they dry up and there's very much evidence that they are , who do people sell to , we're not really talking about people who bought years ago with small mortgages what these rate rises effect is the new CURRENT FTB who it will hammer with increased costs of servicing debt and price more FTB's outta the market , the people who bought long ago obviously have nothing to worry about (if you can see agravy train you've more than likely missed it etc,etc )

there was a great discussion among eamon dunphy and a few economists on newstalk a while ago (i'll try dig out the podcast link) basically the point was made (and rightly so) that alot of people think "equity" is free money when in reality it evenutally has to be paid back so people who think they can afford to trade up / splurge on niceities suddenly find in a downturn exactly how much they couldnt afford these things in the first place

JimmySmith

miju wrote:

if they're both FTB at the high end of the average industrial wages it means frankie and biddy can't either

OK, let me try again here. The point i am trying to make is that everybody is not the same. I never said frankie and biddy were on the average industrial wage. You did (by the way the average is the average. It doesnt have a high or a low end. Look it up.). There are millions of scenarios, i gave one or 2.

miju wrote:

your not getting my point either: the SSIA will act as a stop gap measure only after that dries up how does your average earning FTB "get on the ladder" , you've kind of defeated your own point by saying they rent , sure FFS is it not blindingly obvious if they rent then they NOT BUYING A PROPERTY which brings it back to who is going to buy a property for someone to "trade up" from?????????

did i say frankie and biddy rent?
Again, I was giving you just a scenario of just some factors that can influence how much a person can get a mortgage for. Its not black and white. You're getting hung up on particular scenarios. Dont get hung up on the SSIAs drying up. Its not the only way for the figures of affordability to change.

miju wrote:

so what the price of your apartment comes down then to 250k in order for you to trade upi???? don't get your chain figure of 10 people trading up from only one person buying your apartment

Yes, you do. also, look at where i said 'for example' beside the figure of 10 in brackets. This means it could be a chain of 2,3 , 4 ......

miju wrote:

(and you know what else that sentence sounds like don't you , pyramids just aint in egypt dont ye know LOL )

You're just taking the p*ss here for the sake of it now

miju wrote:

of course no one has a crystal ball , but it cant be denied there's a massive problem staring the irish economy in the face with the property bubble and very few people want to acknowledge that , all indicators are seriously begininning to point to a downturn on the horizon ( of course we've the soft landing theory which i can't envisage materialising just like it's never done in any bubble in history)

Sounds like you're looking at your crystal ball again

miju wrote:

see my point about rising costs of everything and general inflation then see you asking what my point is ?????

So what. Thats going to happen to everyone. not just house buyers.

miju wrote:

ultimately the balance of power in the property market lies with the FTB , if they dry up and there's very much evidence that they are , who do people sell to , we're not really talking about people who bought years ago with small mortgages what these rate rises effect is the new CURRENT FTB who it will hammer with increased costs of servicing debt and price more FTB's outta the market , the people who bought long ago obviously have nothing to worry about (if you can see agravy train you've more than likely missed it etc,etc )

So are you saying that FTBs hold the balance of power and if they dry up then prices will fall - But wait , didnt you say also that there is evidence that they are drying up. But still property prices are rising? - go figure.

miju wrote:

there was a great discussion among eamon dunphy and a few economists on newstalk a while ago (i'll try dig out the podcast link) basically the point was made (and rightly so) that alot of people think "equity" is free money when in reality it evenutally has to be paid back so people who think they can afford to trade up / splurge on niceities suddenly find in a downturn exactly how much they couldnt afford these things in the first place

Well they are taking people for fools there. I think the average Joe Soap is smarter than these guys give credit for. I'm sure if you know the difference between equity and cash then most people do.



OK enough of this. You know what point i was making, and started arguing about a scenario instead of the point. I cant make it any clearer what i was trying to say. Sorry for that.

Supercell

I believe its pretty simple :-

Once the average price of a FTB home reaches the maximum amount the FTB can afford..lets say €325 for arguments sake (I think a helluva lot of FTB'rs cannot even come close to this) then prices at this end of the market effectively freeze, only rising with the average wage rises - zero yield to investors.

Now...what happens when investors see zero yields and zero equity gains..the answer is clear imho.

Its going to tank, but probably not for another 12 -18 months on the outside, there appears as others have already posted before, that the super rich are already getting out as are the bigger companies BOI and AIB spring to mind (sale and leaseback..) ..

Even if none of this happens and lets say the average wage increase somehow matches the housing market increase..changing demographics ( http://www.cso.ie/statistics/popnbyage2002.htm ) ie the baby boom generation thats now buying houses will fall ..this is absolutely 100% certain, there will be a correction then (about 5'ish years time), but by then I expect we will be in full bloodbath mode already.

Anyone who doesn't already see the water coming over the hill - I advise taking swimming lessons now!!

JimmySmith

Longfield wrote:

I believe its pretty simple :-

Once the average price of a FTB home reaches the maximum amount the FTB can afford..lets say €325 for arguments sake (I think a helluva lot of FTB'rs cannot even come close to this) then prices at this end of the market effectively freeze, only rising with the average wage rises - zero yield to investors.

Not every potential FTB is created equal. Not everyone is on the average industrial wage either. That figure is just an average. It would be interesting to findout just what percentage of people in Ireland are actualy bang on the average industrial wage and above and below it. It also doesnt take into account a couple each on the Average industrial wage.

Longfield wrote:

Now...what happens when investors see zero yields and zero equity gains..the answer is clear imho.

But if people arent buying they must be renting? = Yield for investors.

Supercell

JimmySmith wrote:

But if people arent buying they must be renting? = Yield for investors.

A negative yield if doesn't match their mortgage repayments on it, meanwhile its equity value at best, is stationary.

miju

JimmySmith wrote:

Not every potential FTB is created equal.
Not everyone is on the average industrial wage either. That figure is just an average.

correct , hence me saying people at the top end of the average wage (obviously dont need to look up the fact that not everyone is on a €32k salary some are higher some are lower than 32k)

JimmySmith wrote:

It would be interesting to findout just what percentage of people in Ireland are actualy bang on the average industrial wage and above and below it. It also doesnt take into account a couple each on the Average industrial wage.

i agree the census results will make for some particularly interesting reading

JimmySmith wrote:

But if people arent buying they must be renting? = Yield for investors.

most rents for new investorys in the current market will only subsidise the mortage not cover it , most investors seem to be in it for capital appreciation (giving the figure of 270,000 vacant homes in Ireland) now what happens when prices stop going up ????

JimmySmith wrote:

did i say frankie and biddy rent?

my point about renting was when you said this

JimmySmith wrote:

If they didnt have the SSIAs they may just have to rent

JimmySmith wrote:

Dont get hung up on the SSIAs drying up. Its not the only way for the figures of affordability to change.

Don't worry i wont personally looking forward to the SSIA's drying up.

Naturally it's not the only way for affordability to change (the main one being interest rates rising) but one things for certain property isn't getting any cheaper / affordable in fact it's quite the opposite which again brings me back to what I was saying about the Central Bank's lending criteria rules beginning to massively effect the amount of mortgages for people on the average wage after the next .50% rise in rates (which should be with us by august'06 / march '07 if the ECB's "hints" are anything to go by)

JimmySmith wrote:

Yes, you do. also, look at where i said 'for example' beside the figure of 10 in brackets. This means it could be a chain of 2,3 , 4 ......

how exactly is it a chain , you sell to one person there's no chain there whatsover

JimmySmith wrote:

You're just taking the p*ss here for the sake of it now

i think it's you who's taking the piss mate

Jimmysmith wrote:

Sounds like you're looking at your crystal ball again

just looking at the information and indications that are glaringly out there for all and sundry to look at

JimmySmith wrote:

So are you saying that FTBs hold the balance of power and if they dry up then prices will fall - But wait , didnt you say also that there is evidence that they are drying up. But still property prices are rising? - go figure.

Well they are taking people for fools there. I think the average Joe Soap is smarter than these guys give credit for. I'm sure if you know the difference between equity and cash then most people do.

alot of people are , it's called a specualtive bubble and irrational exuberance (look it up) , do you think the international investor has been bailing out of irish shares to the tune of billions of the last few weeks for the fun of it or maybe that they can see what alot of irish dont see (including you im afraid jimmy)

i didn't say the number of FTB's are falling the ESRI did (look that one up as well :-) )

Carb

JimmySmith wrote:

Why? I could only afford a mortgage of €140 on my first property (1 - bed apt) when i bought it. It was my absolute limit. Today i could by a house for much more with the equity plus a few bob. Much the same story for any FTB who bought before This year i would imagine. What the future holds though i cant tell you. And you cant tell me either.

Do you not realise that when interest rates go up, you can only borrow less. So even if the equity stayed the same forever, which would be doubtful in the medium term if interest rates mean people have to borrow less, if interest rates go up, you can afford less than before rates went up.

eg. If you sold you appartment for 200k in the morning, you might have 70 k equity. Currently your able to borrow 200k, plus the 70k you have from your first property, so your looking for somewhere at 270k. Then interest rates go up and the bank will only give you 180k. You can only buy somewhere for 250. Its the same for the guy earning 200k a year looking for a 1 million euro property, or the married couple on 80k a year looking for their first home. The scenario is always the same, the figures just change.

ronbyrne2005

Jimmy at what level (price to average incomes average rents etc) does irish property becomed overvalued and precarious??
You seem like the sort of person that beleives once prices are rising everything is grand,im allright jack.