Buying property - No sensational statements please!

daveirl

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CiaranC

humph wrote:

I think that some of the 'bulls' need to travel overseas and see what can be bought for 300,000 euro.
You will soon come to the conclusion that there is indeed a property bubble in Ireland.

To be honest, I dont think you really understand what a bubble is if you think that the quality and style of housing on a different continent has anything to do with it.

Gurgle

daveirl wrote:

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There still are estates of detached houses being built around my neck of the woods - dozens and dozens of identical detached houses on postage-stamp gardens touted as 'an exclusive development of luxory detached homes'.

I believe humph was referring to one-off housing with an acre or three attached.

squire1

With regard to housing estates, is it just me or have they changed from being a mix of 3/4 bedroom homes a few years ago into a mix of 2/3 bedroom homes now?

The houses are getting smaller, densities are getting higher (density is not a bad thing if it is designed with standard of living in mind) and at the same time prices are rising. Surely there must be a critical point where people will say "No, fu*k it, I'm not going to pay €500K to live in a 2 bed house with a 15Ft garden and no off street parking or green areas"

Common economic sense would suggest that the buyer will stop buying when the product fails to reach their aspirations but the housing market seems to defy all the laws of economics.

Afuera

squire1 wrote:

Common economic sense would suggest that the buyer will stop buying when the product fails to reach their aspirations but the housing market seems to defy all the laws of economics.

I think that the only explanation that economic theory could give to this kind of behaviour is to term it a "mania".

iguana

humph wrote:

The other funny ( or not so funny ) thing is that when visitors from the U.S. or Australia see what counts for a decent family house in Ireland i.e a 3 bed semi in an estate of hundreds of houses of the exact same design they are surprised to find out that it is not social/local authority housing or at most 'starter homes'.
No American or Australian middle income salary earner would aspire to live in such a dwelling.

I'm sorry but comparing the US and Australia to Ireland is like comparing Mars and Jupiter. Ever heard of population density? http://www.worldbook.com/wb/Media?id=lr004367&st=world+population+density

It is easy to provide large detached homes in a country where the supply of land far out-strips the population. So while the house you describe is certainly average in Wisconsin, it sure as hell isn't in Manahattan where the average price for an apartment is over $1million dollars (€865k) or the very lucky can get themselves a townhouse for an average price of over $4million. (€3.15million). http://www.elliman.com/MainSite/MarketReports/ And neither area is comparable to Ireland.

Whether there is a property bubble or not has nothing to do with what the same money can get you in a different country. You can't compare the Irish market to that in the UK as there are way too many differences for any comparision to be relevant, even though at first glance there are glaring similarities. To try and compare to the US or Australia just isn't even remotely plausible.

If you want to live in any Irish population centre, there just isn't the room for each household to have the type of house you describe. The choices are for the most part apartments or terraces (Or apartments in terraces:) ). If you want a 'proper' detached house you need to go live in the country.

Bluehair

Ah yes the old "you can't compare Ireland to anywhere else cause we are different" :rolleyes:

Talk about head in the sand....

Re density we have a tiny pop density here but a shortage of properly zoned land, a political issue not an economical one. Anyone who's flown over Dublin would look at the huge number of green/brown field sites and wonder what the hell all the talk about increasing housing density is really all about... (looks at profiteering banks/builders/estate agents/gov).

iguana

Bluehair wrote:

Ah yes the old "you can't compare Ireland to anywhere else cause we are different" :rolleyes:

Talk about head in the sand....

What are you talking about. I'm not saying that Ireland is so special that you can't compare it to anywhere else. I'm saying that you can't compare two completely different areas and expect to draw relevant conclusions.

The fact is that compared to large tracts of the US or Australia, Ireland has a relatively high population density. 8 US states, not including Alaska, have a population density of single figures per km squared. (Alaska is 0.42). However compared to the UK we have a low population density, but then again the UK has a huge population density.

I think that the architecture in most parts of Ireland reflect population density, not the prices. My house in London with a population density of 4700 per km squared was much cheaper than I would find in any part of Dublin which has a density of 1420. I pointed this out in my first post on this thread, along with the fact that I hope prices in Dublin do fall or level off so that in the next 5 years or so I have the option to trade my home here for something similar in Dublin. I just don't think I'd take as large a gamble on that as you have.

But saying that you would get a bigger house for your money in the US or Australia has no bearing whatsoever on whether or not Irish property is over valued. Just as I also pointed out that what is easily purchased in Wisconsin has no bearing on what you can purchase in Manhatten.

faceman

faceman wrote:

Simply this. If you are buying or planning on buying property within the next 1-2 years then let us know, why you want to buy (somewhere to live, investment etc) and how long you see yourself there. Also if you indicate if where you are buying is just a first step on the ladder or somewhere you expect to be happy for many years. Why are you buying instead of renting or living at home.

Have a house with a mortgage here. Looking for a site to build and sell in Ireland, preferably near my house. That would only be to make a few shekels though. Have a small bit invested abroad and looking at leaseback in France.

Have no doubts about the Irish market. Hear a lot of pub talk about the market collapsing from people who have no real interest in buying anyway. What motivates me is that I can say with certainty that I have yet to meet the person who has regretted buying in the Irish market, and see developers pumping in big bucks every day so the people who are putting their money where their mouth is are extremely confident.

Why I am looking abroad - after expressing such confidence in the Irish market - is that it takes so much to buy into here. I don't have a pension scheme and frankly when I retire I'd like to live in France and those leaseback schemes seem like a really good way of getting in there cheaply, when you don't want the house for years anyway. The small sum gone into property aboad was only really a bet where a few of us just put in a few grand each and are looking at apartments in the Balkans.

daveirl

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miju

actually listened to a BOI colleague of yer man who came out the "wealth" report from BOI on monday today on newstalk

he was VERY sheepish in light of what the Central Bank were saying and in fact rubbish what his own BOI colleague was saying in that report , that said you can't really bull**** someone from the central bank of ireland who is sitting across a studio from you

daveirl

daveirl wrote:

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Naaaaah, just give them the same credibility as warnings that issued at various times over the past 10 years, and the knowledge that the Central Bank and other bodies will never come out with a 'spend spend spend, buy everything all round you' statement.

faceman

Deleted User wrote:

Naaaaah, just give them the same credibility as warnings that issued at various times over the past 10 years, and the knowledge that the Central Bank and other bodies will never come out with a 'spend spend spend, buy everything all round you' statement.

bingo. the central bank are only interested in summary figs. The air of caution although not a bad thing is a generalised statement. The debt burden looks at what would happen if all debts were due to paid tomorrow. i.e. what is the liquidity ratio. however a mortgage is a long term loan.

I would love to actually see stats on home repossesions etc in ireland and mortgage defaulters. as an 'avid' reader of registered judgements fornightly publications, i dont see many mortgage companies publishing unpaid debts.

either way a property bought as an investment for the purpose of living in serves that purpose regardless of booms/crashes etc. Its not like stocks and shares.

miju

as far as i can remember in a link last week i read that there was about 22 repossesions last year , not exactly breathtaking amount by any means