Imminent pop or not?

Cantab.

Is the negative sentiment being brought on by the bitter old souls who missed the boat, or is the public concern (as conveyed on this board and in the media in general), in relation to house prices, genuine?

EKRIUQ

Yawn!,

Can we have a whole forum dedicated about the house market crashing. I'm off the bed now.

Bluehair

Valid Poll and should produce interesting results. Good series of options.

daveirl

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Cantab.

Bluehair wrote:

Valid Poll and should produce interesting results. Good series of options.

Thanks Bluehair.

I like the way 'crash' is in red too!

SkepticOne

Cantab. wrote:

Is the negative sentiment being brought on by the bitter old souls who missed the boat, or is the public concern (as conveyed on this board and in the media in general), in relation to house prices, genuine?

I think most people will agree that one side of the argument consists of genuinely held and well argued positions while the other side consists of irrational wishful thinking. They may disagree on which side is which however.

daveirl

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coolhandluke

I think most of the "greater fools" have bought now,leaving the people who genuinely believe property is overvalued the only one's left.If you were smart enough to hold your ground at this stage,then your going to be smart enough not to buy at the first sign of a drop and for this reason i see a gradual decline(as seller's initially refuse to drop prices until being forced to sell) rather than an overnight crash,but it will be a big decline imho.
There is a lot of ssia money coming on stream may next year,but i think it's smart money and won't be foolishly ploughed into the property bubble.

peasant

Not only is the average Joe Soap being priced out of the market, but also your average mid-size business.
That, coupled with a plethora of over optimistically sized, half empty business parks (and hotels) all over the country would indicate that on the commercial sector building has already gone over the hill but is kept alive by the general greed that comes with a boom.

We have reached the point now where the average house buyer is about one inch away from not being able to afford a house any more ...let oil prices or interest rates rise just another little bit and that's it ...outpriced forever.

Furthermore ...al the people that already have a house and are stretched to the limit will find themselves overstretched and forced to sell.

And another thing ..most modern houses are of such cheap quality and materials that people will think twice about buying one in uncertain times unless they feel they are getting value for money

IMO ...when the "correction" comes, it can only be a crash and nothing but a crash


Personally I can't wait for it ...there's a few things need doing round the house ...all I need is an affordable and reliable builder ...guess they will come queing then

mikemac

daveirl wrote:

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How much of a drop would it take to get to this level?

whizzbang

SkepticOne wrote:

I think most people will agree that one side of the argument consists of genuinely held and well argued positions while the other side consists of irrational wishful thinking. They may disagree on which side is which however.

If you don't mind I'm gong to copy this an use it so describe every debate on boards

JimmySmith

I think that every thread started on what will happen in the property market should be moved to the Paranormal Forum. At least in there, there are poeple who will actually believe that we have the ability to predict the future. I'm sure their crystal balls are better than ours too.

Its getting to be a tired old subject now.

Bluehair

micmclo wrote:

How much of a drop would it take to get to this level?

My guess is around 50% im real terms compensated for inflation over 5-10 years. I reckon Daveirl is bang-on in that there will be a leveling off after the first big drop where all will hail it's over and it's safe to get back in the water but prices will slowly continue to drift downwards for years.

In a few years time (and for a decade after that) Ireland will be held up as the architypical property bubble story in much the same way that Japan is today.

SkepticOne

Bluehair wrote:

In a few years time (and for a decade after that) Ireland will be held up as the architypical property bubble story in much the same way that Japan is today.

I claim the term "Celtic Crisis" for this eventuality. I looked on google and all uses of it seem to refer to the British football team.

FillSpectre

Bluehair wrote:

Valid Poll and should produce interesting results. Good series of options.

Actually not really at all, just like the nonsencience sky polls. The age breakdown on boards is predominatley under 30 but certainly not covering the range of people who live in this country. The people here tend to be people wanting to get a place of their own and there certainly are thoses just begrudging too.

SkepticOne wrote:

I think most people will agree that one side of the argument consists of genuinely held and well argued positions while the other side consists of irrational wishful thinking. They may disagree on which side is which however.

Actually that isn't true. You spend your time talking to people around the same age about something that is an issue for that age group they will favour an event that is likely to suit them, or at least what they think will suit them. To be out numbered on boards all you have to do is have experience on a subject.:p


All the poll says is the people who go to boards and into the property section think this. The sample is so skewed to start with let alone the subclass of those who go to property. You may thing well it is an indicator well then you can choose the house buying figures as a more accurate indicator.

Sleipnir

coolhandluke wrote:

I think most of the "greater fools" have bought now,leaving the people who genuinely believe property is overvalued the only one's left.

So people who currently own property are fools and thhose that don't are smart? Was it a bad idea to buy a house over the past ten years then?

Everybody knows that property is Ireland is overvalued but nobody knows by exactly how much and that is the problem. Our economy is still booming so I can't see a property crash if everyone is still making a very good wage. Can we have strong growth and also a property crash at the same time?

Of course people are going to spend the SSIA's on property; to say otherwise is ridiculous. Would it be better that they spent it on a car? Or a holiday?

daveirl

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FillSpectre

daveirl wrote:

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Why save it when money is cheap.
All investement is likely to stumble and fall at some point

SkepticOne

Sleipnir wrote:

So people who currently own property are fools and thhose that don't are smart? Was it a bad idea to buy a house over the past ten years then?

The "greater fool" thing refers to a situation where you buy on the basis that someone else in the future will be willing to pay a greater price rather than on the intrinsic worth of the thing. The rest of your response illustrates this:

Everybody knows that property is Ireland is overvalued but nobody knows by exactly how much and that is the problem.

If property is overvalued then why do people buy? A common response to this is that people feel that if they don't buy they will be priced out of the market. But this means that someone else at a later date must be willing to pay a greater price whent the thing is even more overvalued. If you buy something that is overpriced you might be called a 'fool' but you justify buying on the basis that 'greater fools' exist that are willing to pay more later on. 'Greater fool' is just a piece of jargon. It does not mean that the people are fools (nor does it rule it out). If you really know there are 'greater fools' out there then you're not really a fool. You just don't want to be the last one standing when thewhole thing collapses.

SkepticOne

FillSpectre wrote:

Why save it when money is cheap.
All investement is likely to stumble and fall at some point

Especially if you are investing in an asset price bubble caused by that very same cheap money.

miju

FillSpectre wrote:

Actually not really at all, just like the nonsencience sky polls. The age breakdown on boards is predominatley under 30 but certainly not covering the range of people who live in this country. The people here tend to be people wanting to get a place of their own and there certainly are thoses just begrudging too.

with these "demographics" (pardon the pun) then this would be a very valid poll seeing as how FTB's or people wanting to buy their first house make up 36% of the market

FillSpectre wrote:

Actually that isn't true. You spend your time talking to people around the same age about something that is an issue for that age group they will favour an event that is likely to suit them, or at least what they think will suit them. To be out numbered on boards all you have to do is have experience on a subject.:p

ti simplify these people are having a reality check

FillSpectre wrote:

All the poll says is the people who go to boards and into the property section think this. The sample is so skewed to start with let alone the subclass of those who go to property. You may thing well it is an indicator well then you can choose the house buying figures as a more accurate indicator.

no it doesn't it says the people who've voted in this poll feel the way they do , by your reasoning (and to be honest you really have very little of it) your opinion and everyone elses opinion is invlaid because we discuss this matter in the property forum even though that's what the property forum is for

house buying figures mean jack **** considering that 40% and rising is made up of investors most of which are speculative and are helping to feed this self perpetuating property bubble , what's a nice indicator are polls like this and the one in my siggie BUT the results of these polls don't suit your argument and make for some uneasy reading givin the level of negativity that appears in the polls and the fact you yourself have a fair few properties so are probably feeling a little exposed

FillSpectre

miju wrote:

with these "demographics" (pardon the pun) then this would be a very valid poll seeing as how FTB's or people wanting to buy their first house make up 36% of the market

Actually asking investors would make more sense in your eyes then as they buy more according than FTB according to you.

miju wrote:

no it doesn't it says the people who've voted in this poll feel the way they do , by your reasoning (and to be honest you really have very little of it) your opinion and everyone elses opinion is invlaid because we discuss this matter in the property forum even though that's what the property forum is for

LOL You really don't understand statistic at all. From you other posts I thought this but you really are showing your complete lack of comprehension.

miju wrote:

house buying figures mean jack **** considering that 40% and rising is made up of investors most of which are speculative and are helping to feed this self perpetuating property bubble , what's a nice indicator are polls like this and the one in my siggie BUT the results of these polls don't suit your argument and make for some uneasy reading givin the level of negativity that appears in the polls and the fact you yourself have a fair few properties so are probably feeling a little exposed

If you are suggesting the number of people on a chat site is more genuiene to gauge confidence in the market than actual people buying then you are a completely lost cause. Please actually provide proof that you some how know who is currently buying property. Polls like these are completely, completely useless and have not statistical value. I suggest you go over to the maths forum and ask them. To suggest actual purchase means less about price confidence is histerically funny. I actually don't hink I have heard an adult saying something so stupid and also claim that the other person is blinkered to facts.

You need to learn maths and some scietific evaluation methods. You are not far off reading teabags when it comes to "facts". You will get people to agree with you I'm sure you may even be proved to have the right answer but it still does not mean that how you came to your conclusion is both foolish and inaccurate. I tried to explain how you went wrong before but you couldn't understand so I'll give you a break and ask you how accurate do you think your poll is? This can be mathimatically worked out so there is simply an answer and no point of opinion.

homeOwner

I personally dont think it matters to most people who have already bought whether or not there is a crash as you need somewhere to live so most people will not be selling up without buying again. I just traded up from a 2 bed apartment to a 3 bed house and I paid what I think is ALOT of money for it but we can afford it quite comfortably on two salaries and we are not going to move from there so a crash is irrelevant to us (unless there is widespread unemployment in the country too).

To those people who havent bought yet then it matters greatly which way the market goes. The dilemma is do you wait and hope it goes down, or try to get in now and get a few year's growth?

Maybe the real question is how much of the market is driven by investors (an investor bought my apartment)? And if they drop out of the market, will houses be effected (I dont think so) - its more likely to be apartments that will be hit. But there is a load of people waiting in the wings for apartmetns prices to fall, so they will, for a time, rise again.....

I just dont see if callopsing unless the economy takes a nose dive and there is massive unemployment and high interest rates.

Sarn

homeOwner wrote:

we can afford it quite comfortably on two salaries and we are not going to move from there so a crash is irrelevant to us.

I agree with this sentiment exactly, once you can afford the repayments on your home it doesn't matter.

homeOwner wrote:

To those people who havent bought yet then it matters greatly which way the market goes. The dilemma is do you wait and hope it goes down, or try to get in now and get a few year's growth?

This is the position I'm in as a FTB. I have a selfish interest in the market collapsing. Trying to purchase on my own for a property I didn't want proved very difficult. I just couldn't borrow enough money and the savings I had weren't enough. As a result I have recently given up and have stopped trawling through the property supplements/webpages.

The problem is, with interest rates going up the average mortgage borrower can borrow even less money with stress testing. As this will be the case for everybody, prices (IMHO) can only keep going up if the banks start offering exotic mortgage packages or parents are willing to donate even larger lump sums. This affects the trader uppers who can't get their asking price etc.

As I've said many times before, my rationale now is to wait and save, my time to purchase will come. For the moment I'll enjoy a debt free, 15 min round trip commute for a little while longer.

FillSpectre

Sarn wrote:

This is the position I'm in as a FTB. I have a selfish interest in the market collapsing. Trying to purchase on my own for a property I didn't want proved very difficult. I just couldn't borrow enough money and the savings I had weren't enough. As a result I have recently given up and have stopped trawling through the property supplements/webpages.

At least you are honest about it. It is completely understandable too. I am still waiting to hear people say they don't want to buy at all. The people who insist on a crash want to buy too and I certainly suspect they have the same feeling as you rather than deduced a crash is likely.

daveirl

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Afuera

FillSpectre wrote:

The people who insist on a crash want to buy too and I certainly suspect they have the same feeling as you rather than deduced a crash is likely.

Another rediculously sweeping statement FillSpectre. I've no intention of buying in Ireland, yet still think that all indications lead towards a correction. I've yet to hear a believable explanation for how the market can cool down without crashing anyway.

FillSpectre

daveirl wrote:

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I also pointed out that that is demand. The savings you are talking about rely on a strange maths in the long term. Effectively your wage and then your pension must stay in line with inflation along with rental prices not exceeding inflation. In the long term a current mortgage will drop below inflation. You are really paying for a service at the same time prolonging the period of your mortgage for what is only short term gain.
It is your choice but it is a gamble and there is no way around that. You are basically saying the short term gain will be worth it. There is also a element of being afraid the market will crash but that has been a threat for at least 6 years and many would say 10. If you were to have been waiting that long you would have probably not saved enough money to off set the increase in prices. I don't know what age you are but if you get past 40 buying a property becomes difficult.
It is gamble to buy or not to buy plain and simple you can't claim it is smart choice other than a personal decision based on the actual market. The poll is not information on the market

FillSpectre

Afuera wrote:

Another rediculously sweeping statement FillSpectre. I've no intention of buying in Ireland, yet still think that all indications lead towards a correction. I've yet to hear a believable explanation for how the market can cool down without crashing anyway.

You expressed a desire to buy a property so you do want to buy you are just complaining about the price. So if you know anybody who doesn't want to buy get them to say you can't answer the questions as you don't feel that way.
There are many possible outcomes a crash is only one and as yet nobody has stated a reason for a crash other than price increase.
I didn't say all people saying a crash will happen want to buy but you like to jump to conclusions whether there is any information or not:rolleyes:

homeOwner

daveirl wrote:

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I dont think you can compare houses to other goods and services. Houses dont have a value like a tv or a holiday does. A house is "worth" whatever someone will pay for it. There is no such a thing as a "fair price" for a house. If you dont think its worth the price then dont buy it. But to someone else, if it suits their needs and they can afford it, then it might seem like a good buy.

The bottom line for most people is that if you have a family you need somewhere to live. You're fine if you are single and have a job, you can afford to paid less money on rent than a mortgage (although I think rents are around the same as most mortgage payments at the moment). But that is only a short term gain.

Even in the 80s when there was no celtic tiger and very high interest rates, the cost of goods and houses still went up. Our economy was screwed back then and yet a house still cost alot of money in comparison to what people earned, inflation was quite high too, so year on year, everything cost more and salaries were far less than they are now.

So I think you need to look at the big picture when considering buying. Its not only about the amount of money you have in your pocket today. People hoping for a crash are also banking on the fact that salaries wont be affected by it, that inflation wont be effected and that interest rates wont be effected. If houses drop by 20% and interest rates go up to 15% and therefore potentially your salary either stagnates for a few years or you are made redundant, are you in any better a position to buy?

IMO at worse, there will be a slowing down followed by a drop of about 10% in houses further out and apartments in badly serviced locations. But that is a drop of 10% on todays prices. It leave prices around what they were in maybe 2004, is that any better for those people waiting to buy?

daveirl

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