Bullish or bearish & renter or owner

keynesian

I do not own property and am bullish

I said the market would tip at the end of september, dad said new years. The bank are getting out, bad sign. "the popes children" say we're doomed and soon. It all depends on wheather poeple panic. What is sure we are heading for a reajustment in the market. please don't panic I'm trying to sell.

Prices have stold caz of mac dowl said, ****. It could be a 1% ajustment or 50%, depends on the maturity of the poeple.

still have to read the eco stats from CB

faceman

I own a property and am bearish

keynesian wrote:

I said the market would tip at the end of september, dad said new years. The bank are getting out, bad sign. "the popes children" say we're doomed and soon. It all depends on wheather poeple panic. What is sure we are heading for a reajustment in the market. please don't panic I'm trying to sell.

Prices have stold caz of mac dowl said, ****. It could be a 1% ajustment or 50%, depends on the maturity of the poeple.

still have to read the eco stats from CB

Hmm dublin house prices growth increased from August to September from .7% to 1.1%, but alot of people are holding out until the budget.

I reckon both ur Da and you are wrong. Re-adjustment is still a bit off me reckons and even then its going to be miniscule if anything at all.

Oh yeah how do banks "get out"? Have they stopped providing mortgages or something?

keynesian

I do not own property and am bullish

faceman wrote:

Oh yeah how do banks "get out"? Have they stopped providing mortgages or something?

Sorry bad frazing, They''ve been selling and leasing back choose properties, I would have thought that means they think the market is at it''s peak. Or perhaps these highly profitable banks in europe are going broke. Could be many reasons.

True be told I was hearing property price were going to crash since they started raly.

Oh, was that a real or nominal .7%, ok, ok, I'll read the stats later.

miju

thing is i don't think even bulls wills disagree annual price growth isn't going to go over the 3% mark (banks and estate agents etc all agree on this)

so this means anyway without any panic when the current inflation figure is factored into the equation the price drops without anyone doing anything , of course if they don't rise at all then the drop is even bigger and thats before any type of nervousness or panic could possibly set in

megadodge

why not if they can rise 40% in 2 years they can sure as hell fall well back below that

would you care to offer your reasoning for it not falling back to 1997 levels other than they just wont.

if you dont think they will fall back to 1997 why not ? and to what level will they fall to and whats your reasoning?

I'd actually be far more interested in hearing your reasoning behind why you think it's possible that prices will fall back to 1997 levels.

60K for a two bed apartment in Ranelagh in the coming years ??? Even the most gullible of people will find that hard to swallow !!

I do not own property and am bullish

www.thepropertypin.com

According to the census we have 250,000 houses PLUS vacant.
Never lived in.
30,000 HOLIDAY HOMES TOO

There is a BIG difference. Especially when you take into account that most of these EMPTY houses were bought AFTER 2002.
www.cso.ie

Now why would you buy a house and not rent it out and not live in it? for the Craic?
Taxpayers have been paying investors to buy up these houses through Tax incentive schemes etc. The "investors" havent let these properties onto the market for anyone to live in. Crunching supply.
Why did they buy them? I believe they were purchased for capital appreciationand were not rented out so that the investor would not be liable for Capital Gains Tax.
anyone who drives around FERNS in WEXFORD must have seen this sign on the N11:



I suggest to anyone who is thinking of buying now to seriously do their research.

http://daftwatch.atspace.com/

http://www.boards.ie/vbulletin/showthread.php?t=2054967253

http://irishhousepricesfalling.blogspot.com/

and of course check www.floodmaps.ie - make sure your property is not on a floodplain - look up adamstown for example! they did work on the area a few years ago(pre 2002) to prevent flooding (as part of planning requirements) yet it flooded in 2002. part of it is on a floodplain

Afuera

megadodge wrote:

60K for a two bed apartment in Ranelagh in the coming years ??? Even the most gullible of people will find that hard to swallow !!

Taking wage inflation into consideration 60K paid back in 1997 would be the equivalent of about 120K today. I agree with your sentiment though that this may be too low a floor for the 2-bed apartment property market there.

There are other factors added to Ranelagh such as the Luas and the removal of the dodgy triangle that would mean it is not really possible to compare an apartment in this area then with an apartment in the area today.

hmmm

megadodge wrote:

60K for a two bed apartment in Ranelagh in the coming years ??? Even the most gullible of people will find that hard to swallow !!

I'd prefer to look at it in terms of the historical averages. Historically, mortgages here & in most other countries have been 2.5/3 times average incomes - in Dublin I'm guessing incomes are around 40k average? Considering real multiples of 8/9/10 times incomes are now common, we have a long way to fall - unless you really believe "it's different this time".

miju

megadodge wrote:

I'd actually be far more interested in hearing your reasoning behind why you think it's possible that prices will fall back to 1997 levels.

i wouldn't i'd be interested if you didnt answer a question with a question , i think the reasoning for the potential falls has been outlined by many times by many posters over the threads on the other hand however , i've yet to hear someone put up a plausible argument to the contrary that prices can keep rising / plateua

megadodge

i think the reasoning for the potential falls has been outlined by many times by many posters over the threads

Exactly - and the same reasoning each and every previous time has been wrong.

Unfortunately back in the mid-90's I foolishly listened to these very convincing theoretical arguments. I didn't buy then as I was waiting for the "inevitable fall". Ten years later....

I would never claim to be an expert and I certainly do think prices are plateauing at the moment and may even drop a few points in the coming year or two, but back to 1997 levels ???? I really don't think so.

As to my reason why, well I don't have any wonderful theory, just as those who didn't decide to wait in the mid-90's didn't either. The facts have shown a massive rise while the theorists continued to predict doom and gloom. If there is a fall in 2007 the theorists will claim "I told you so" completely ignoring all their previous incorrect "I told you so"s.

It's not even a matter of being right or wrong now it's the fact that the 'experts' have been wrong so many times before that it's very hard to take them seriously even when they could well have a very good case.

miju

well the experts who are bullish about the property market have been wrong to date just as much as the bears

not to belittle your post but posting reasons such as "ten years ago they said the same thing" as to why prices will not fall doesn't cut it , especially in the face of at least 100 price drop examples already posted and other reasonings

megadodge

posting reasons such as "ten years ago they said the same thing" as to why prices will not fall doesn't cut it

Ten years ago was when I started noticing the "prices have to fall" brigade and basically the same people have been saying the same thing ever since (ie. 9 years ago, 8 years ago, 7 years ago etc.) while prices have been rising.

They have been consistently wrong and as a result it's very hard to believe them.

especially in the face of at least 100 price drop examples already posted and other reasonings

Did I not say that I think prices are plateauing and there could be a small fall in the next year or two ?

And the basis of my intervention on this thread was your belief that prices could revert to 1997 levels. I can't see that happening and you haven't refuted that point.

miju

megadodge wrote:

And the basis of my intervention on this thread was your belief that prices could revert to 1997 levels. I can't see that happening and you haven't refuted that point.

those percentage drops aren't small and if you consider them small i'd be curious as to what you think is significant percentage drop?

and actually it wasn't me who said it initially but seeing as how we're on the subject of not refuting points , when replying to my post you AGAIN "forgot" the point that the bulls have also been wrong for the same amount of time as the bears ......mmmmmmmmmmm

magpie

I do not own property and am bullish

in the face of at least 100 price drop examples

You're confusing vendors having to reduce the asking price for their properties in order to achieve a sale with price drops per se.

A price drop would be if the asking price for a house actually dropped to a level below that of a similar property sold 12 months previously (for instance), or if the value of a house dropped below what the current owner paid for it.

The fact is that house prices are continuing to rise, albeit at a slower rate.

Granted the market is less fluid at present, but it will require something disastrous in the world economy, a return to double digit interest rates and 70% taxation etc for the prices of houses to actually drop. In which case we'll all probably be out of a job and it'll be a moot point anyway.

If you can afford to buy now, and have stress tested for probable interest rate rises in future then go ahead. If you're waiting for a price crash before you buy you're going to be waiting a long time.

miju

so let me get this straight here......market is bouyant , prices rising per month at stupid levels , BUY, BUY , BUY

market now flatlining , asking prices drop by large amounts (which is unheard of in the boom years by the way) , BUY , BUY , BUY ??????

If asking prices are dropping by significant amounts then it means the property has no interest so the seller reduces prices you can be sure as hell that the vendor is not getting their original asking price which equals a REAL price drop

really cant win either way with this one can i?

magpie

I do not own property and am bullish

magpie wrote:

Granted the market is less fluid at present, but it will require something disastrous in the world economy, a return to double digit interest rates and 70% taxation etc for the prices of houses to actually drop.

Wow ! with that kind of faith in the property market no wonder people are paying over half a million for very average houses in estates.
Sure according to that logic - property is bullet proof - bar a nuclear war - properties are goldmines.

miju

I do not own property and am bullish

miju wrote:

really cant win either way with this one can i?

no! didnt you read the post? Bar nuclear war property is safe.


Thank God! Because for a moment I was getting worried about the future of our economy since its so dependent on property. Good job ! maybe we wont have 100,000 layoffs in the construction industry like finfacts say.

megadodge

and actually it wasn't me who said it initially but seeing as how we're on the subject of not refuting points , when replying to my post you AGAIN "forgot" the point that the bulls have also been wrong for the same amount of time as the bears ......mmmmmmmmmmm

Miju, this is a genuine request, so please treat it as such -

I'm not an expert (as I already mentioned) so could you explain what "bull" and "bear" mean. Am I correct in assuming they're the extremes of positive and negative outlooks on property, or, is it a case of if you're not one you're the other. Is there any grey area?

I can't answer you until I know.

magpie

I do not own property and am bullish

the vendor is not getting their original asking price which equals a REAL price drop

No it doesn't. Quote me one instance of a property, anywhere in Ireland, that has been sold for less than the vendor originally paid for it.

For the scenario you predict to happen people need to get into a negative equity situation, which has also yet to happen anywhere in Ireland (i.e. where the valuation of the house is less than the mortgaged value)

hmmm

magpie wrote:

You're confusing vendors having to reduce the asking price for their properties in order to achieve a sale with price drops per se.

A price drop would be if the asking price for a house actually dropped to a level below that of a similar property sold 12 months previously (for instance), or if the value of a house dropped below what the current owner paid for it.

Jaysus talk about trying to redefine the English language. If a house is worth 300k today and is worth 290k tomorrow its price has dropped. That should be fairly obvious. A house price has no memory of what you paid for it.

magpie

I do not own property and am bullish

If a house is worth 300k today and is worth 290k tomorrow its price has dropped.

Is it 'worth' 300k, or was that the asking price? There is a difference.

A house valued at €750k by an independent valuer might be put on the market at €850k during a buoyant time. If the seller subsequently reduces the asking price to €775k then this still isn't a drop in 'value' of the property.

If, on the other hand he was forced to sell it for €600k then there would be an actual drop. There have been no instances of this happening in Ireland. Correct me if I'm wrong.

Pointing out houses in Ailesbury Road that have failed at auction and then had the price reduced by 100k is not, unfortunately for you, any indication of a housing apocalypse that will see you all living in Mansions before the year is out.

miju

magpie wrote:

A house valued at €750k by an independent valuer might be put on the market at €850k during a buoyant time. If the seller subsequently reduces the asking price to €775k then this still isn't a drop in 'value' of the property.

please enlighten me , what is it then?

magpie wrote:

If, on the other hand he was forced to sell it for €600k then there would be an actual drop. There have been no instances of this happening in Ireland. Correct me if I'm wrong.

your wrong , will dig out the links that anecdotaly show this has alreeady happended , it's the perverse cousin of gazumping better known as gazundering :-)

stoppedclock

Before the boom ended asking prices were always achieved (and then some) so the actual price was actually asking price + 10% (for arguments sake)

Now post-boom asking prices are lower than the asking prices during the boom and are not being met so therefore the new actual prices are lower than something (current asking prices) which itself is lower then something (old asking prices) which itself is lower then something (old actual price)

magpie

I do not own property and am bullish

magpie wrote:

Is it 'worth' 300k, or was that the asking price? There is a difference.

QUOTE]


A house is only "worth" what the buyer is willing to pay for it. If you have alot of buyers and they start a bidding war up the price goes - if you have so many houses for sale that buyers can pick and choose prices come down.
Im no one will disagree with the above. But! this is where we may disagree....
If 40% of the houses bought since 2002 were bought by INVESTORS then we have trouble. Especially as Central Statistic Office figures suggest this is the case. Now this may be alright - so what you say ... well the majority of these properties were NOT rented out. Why ? My theory is they bought to sell on and make a profit from the appreciation and because it was not rented out they wont have to pay Capital Gains Tax.

Still you might say .... so what ... they wont lose out even if they drop the price. As you correctly point out people have to drop their price a significant amount before they make a loss since houses have gone up in value so much. I believe prices will drop by a "significant amount" - enough to make it painful for those who bought since 2002.

Now who will invest in houses if they are levelling off now - if you buy to rent out you make a loss in current conditions. So my theory again - 40% of the buyers are GONE. Markets crashes due to lack of buyers. What if the 250,000 are put on the market to be sold? Even a small percentage of them? Market Crashes - oversupply.

90,000 houses a year are being built - demographics point out that we cant keep building at this rate we dont need that many houses a year. Equals Job losses in construction industry = wobbly economy since alot depends on this industry indirectly and directly. A wobbly economy - Market Crash
Its NOT DOOM AND GLOOM ITS ECONOMICS.

ronbyrne2005

A house sold in my estate(Drumcondra) in may for 750k , an identical one nearby sold for 700k last week. Prices are falling, its only happened recently and wont be reflected in statistics till new year.

Plus not many houses are actually selling so price drops are'nt that evident to the average joe in the street. As there is so many houses for sale at present prices will have to drop further after xmas as even more houses will come to market then.

hi5

I bought a 2 bedroom,red brick conversion flat in Palmers Green,beside the train station in a nice area, North london for £60,000 in 1995,it was 3 times my salary(which was an average salary ) at the time,interest rates were about 7-8% and my repayments were about £350-400 PM.
This would equate to €100000 for a similar property in Dublin today(at 3 times average salary).My point is things are not really that much different,at least they dont feel different,I live a similar standard of life as then,nobody back then was horrified that house prices were so cheap,taxes were not 70%,there was no massive unemployment.
I have since sold to rent and will buy back in to the market again when prices drop back to this level,I'm prepared to wait as long as it takes.
History shows property only rises with inflation over the long term with peaks and troughs in between,the next trough is on the way,there has never been a "its different this time" happen,there is no new paradigm,only a massive amount of cheap temporary credit.
Bring on the crash,this country needs the education a crash will bring before we can move on with a more mature attitude.

Do-more

I do not own property and am bullish

What amazes me is the number of people who say "Ah Jaysus sure prices couldn't fall".

I'd love to be "in cash" and renting for the next few years and I think like a lot of people I will probably put my house on the market in the New Year, although I fear that I will be too late. I am at least in the fortunate position of having a mortgage which is approx. one sixth of my home's (supposed) value and in a location I am happy to stay in for the long term.

Many are not and I believe we have the makings of great social problems for the coming years, with many people who will be in negative equity, stuck in homes that were bought hurriedly to "get on the ladder" which will be unsaleable and unsuitable for their changing circumstances.

I for one am a Bear and believe that Ireland will be a radically different country to the one we know today, in (say) three years time.

The knock-on effects of a collapse in the property market are far reaching and the resulting consequences will touch almost every family in Ireland.

hmmm

I don't think any of the bears here are saying "prices will fall in the year 200x", but we are saying that property is overpriced and has been for some time. It was easy to see that tech stocks were overpriced in the late 90s, but even the smartest investors had no way of knowing when the eejits who were continuing to buy were going to get some sense. Property is the same - no idea when people will stop paying silly prices*, only the raging certainty that when that point is reached there will be a shakeout.

* may have already happened since about May this year

eirmail

Do-more wrote:

What amazes me is the number of people who say "Ah Jaysus sure prices couldn't fall".

I'd love to be "in cash" and renting for the next few years and I think like a lot of people I will probably put my house on the market in the New Year, although I fear that I will be too late. I am at least in the fortunate position of having a mortgage which is approx. one sixth of my home's (supposed) value and in a location I am happy to stay in for the long term.

Many are not and I believe we have the makings of great social problems for the coming years, with many people who will be in negative equity, stuck in homes that were bought hurriedly to "get on the ladder" which will be unsaleable and unsuitable for their changing circumstances.

I for one am a Bear and believe that Ireland will be a radically different country to the one we know today, in (say) three years time.

The knock-on effects of a collapse in the property market are far reaching and the resulting consequences will touch almost every family in Ireland.

I agree I think very few people can get their head around the idea of an "asset bubble". Most people thinks everything should go up in price year by year. People seem to think an asset should rise by inflation in exactly the way consumables such as drinks in pubs go up every year. I think education is the key , and for some of those who did not go about educating themselves about property bubbles I am afraid many will have to learn the hard way.

miju

just on the subject of rates i'd say we're going a good bit higher and we could "possibly" be in store for a 0.50% rise

also back op topic for one second , the poll results so far are interesting , particularly the whole 2:1 theme going on with double people with property bullish compared to those who are bullish and dont own property

incidently WITHOUT the property market slowing down prices will drop by 1% in the property market , with rises predicted of 5% at best over the course of next year and with inflation of 6% that's a fall in real terms .... so that's the top for the capital appreciation brigade of investors..... now with 100s of thousanfs of empty of properties around Ireland and no capital appreciation coupled with inventory already building up AS WELL as the expected rush for more properties being put up for sale in january things are going to get interesting