Imminent pop or not?

homeOwner

daveirl wrote:

This post has been deleted.

You made the point that you arent buying because the houses you looked at were not selling for a fair price, so if you think that applies to everything and is so obvious why did you use it as a point in your argument? Surely it is irrelevant what you think is a fair price in context of the discussion of whether or not there will be a pop. I as merely replying to your point.

daveirl wrote:

This post has been deleted.

They arent and I never said they were. If you have a family you need somewhere relatively pernentant to live as your kids will be in school etc.... of course you can rent, but you are open to being moved on at the whim of a landlord, you cant alter the house you live in to better suit your family, you're rent is decided by the landlord and can be raised year on year. Sure you can move somewhere else and uproot your kids from their school and friends. You can do whatever you want but people with families tend to not want to do these things. These are all the reasons people with families chose to buy if they can afford it.

daveirl wrote:

This post has been deleted.

So your proposed equity based investments are a guatanteed return then? You must be quite the investor. No one knows what sorts of yields equity investments will give over a number of years. They are just as likely to drop in value as go up. And if the company you invested in goes belly up or the market crashes you are left with nothing. At least if the same thing happens in the housing market you are still left with a house, albeit with mortgage repayments, but one thing is for sure, you need somewhere to live and you will be paying for it either in rent or as a mortgage.

daveirl wrote:

This post has been deleted.

Great! So dont buy.

FillSpectre

daveirl wrote:

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How and where are you going to live when you are retired? The investment you are talking about is that going to pay your rent or are you going to buy then?

You could lose money on the stock market easier than in the home you are living. Are you actually currently investing the "savings" from renting?

It isn't really your area if you can't afford the area permenetatly IMHO. Sounds like your means can't meet your desires

miju

homeOwner wrote:

It leave prices around what they were in maybe 2004, is that any better for those people waiting to buy?

well considering i wasn't in a position to buy in 2004 and i am now the answer to your question would be a definite YES MUCH BETTER

homeOwner

miju wrote:

well considering i wasn't in a position to buy in 2004 and i am now the answer to your question would be a definite YES MUCH BETTER

And what happens if alot of people are in your situation, i'm guessing it pushes the prices of those properties back up again.

Afuera

FillSpectre wrote:

You expressed a desire to buy a property so you do want to buy you are just complaining about the price.

When and where? You're drawing your own conclusions wrongly here.

FillSpectre wrote:

There are many possible outcomes a crash is only one...

I don't need to hear your theory about all prospective buyers being forced to rent due to investors buying up all the houses in Ireland again thanks!

FillSpectre wrote:

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

If you didn't want to say that then you shouldn't have said "The people who insist on a crash want to buy too". :rolleyes:

Tazz T

There isn't an option in their for the Japanese scenario. I think this is a high probability.

I think prices have peaked now. Further interest rate rises will ensure they don't go any further. Prices will slowly fall until the next downturn/recession when they'll fall faster. Perhaps ten years of decreasing prices before things pick up again.

miju

homeOwner wrote:

And what happens if alot of people are in your situation, i'm guessing it pushes the prices of those properties back up again.

for starters when prices drop i'll wait to see how hard and fast they drop when they start to rise i'll buy and i'd imagine alot of other people would do the same (i like to call it herd mentality in reverse LOL )

either way will still be quids in it's more a question of how much really if prices rise / fall after i buy then so be it , i couldn't care either way once i've a well located / serviced / sized place to live like i currently have at the moment by renting (at nearlly half the cost it would cost to buy i might add)

homeOwner

miju wrote:

it's more a question of how much really if prices rise / fall after i buy then so be it , i couldn't care either way once i've a well located / serviced / sized place to live like i currently have at the moment by renting (at nearlly half the cost it would cost to buy i might add)

And that is exactly the point of my earlier post. To those of us who have already bought and are not planning on cashing out, it doesnt really matter if it crashes or not as long as you can afford the repayments.

Problem for you though, is that you are not there yet. You are playing a waiting game. It may work in your favour or it may backfire if prices dont drop at all. In the meantime you are paying money in rent that you will never get back again. You seem happy enough to do that, and if it works for you then grand, but I personally dont see it as a wise way to spend you money. I'd rather have my money working for me paying off the mortgage than going to pay the landlord. But thats just me and I am in a different situation to you.

So, well, that leaves us with we agree to disagree

miju

well paying interest on a mortgage is dead money as well , and the savings i make on rent aren't being frittered away they're working away for me very nicely so i dont mind playing the waiting game , living close (10 mins away) to my friends / work / city centre as opposed to moving to a communter belt an hour or two away , nah defo dont want that , qaulity of life is more important to me and my family than owning a house

prices will defo fall of that i'm 100% sure off , the question in my mind is how much

FillSpectre

Afuera wrote:

When and where? You're drawing your own conclusions wrongly here.
I don't need to hear your theory about all prospective buyers being forced to rent due to investors buying up all the houses in Ireland again thanks!

If you didn't want to say that then you shouldn't have said "The people who insist on a crash want to buy too". :rolleyes:

Lets just clarrify here you don't even live in this country and you are tell me what is happening here.
AS I have not said "ALL" the people wanting a crash I did not mean all. Miju is a prime example. He doesn't know how to understands statistics or analytical analysis. He goes on about the herd yet he has just joined a smaller herd.
I recall you saying you would rent while it was cheaper but maybe I mixed you up with somebody else who is talking about the property market from a far.

Afuera

FillSpectre wrote:

Lets just clarrify here you don't even live in this country and you are tell me what is happening here.

I've lived in Ireland until recently, still spend quite a lot of time there and it's not exactly rocket science to see where it's heading. Obviously the objective view is not what you want to hear, and you'd rather stick with your own limited view.

FillSpectre wrote:

AS I have not said "ALL" the people wanting a crash I did not mean all.

Then you should have said "some people" since "the people" implies "all the people" but I'm not going to waste my time trying to teach you English.

FillSpectre wrote:

I recall you saying you would rent while it was cheaper but maybe I mixed you up with somebody else who is talking about the property market from a far.

I don't think it's the only thing you're mixed up about.

FillSpectre

miju wrote:

well paying interest on a mortgage is dead money as well , and the savings i make on rent aren't being frittered away they're working away for me very nicely so i dont mind playing the waiting game , living close (10 mins away) to my friends / work / city centre as opposed to moving to a communter belt an hour or two away , nah defo dont want that , qaulity of life is more important to me and my family than owning a house

prices will defo fall of that i'm 100% sure off , the question in my mind is how much

You see some of us are living in houses close to our friends and family already. I equally think living miles out in the commuter belt to buy a house is a bad idea. Many people IMHO are living so far out because of desire and not practicle considerations. I often hear people say it is for a better quality of life and they get value for money but long commutes and the cost of transport eliminate that. Now I would consider it smart not to buy beyond your need.
I know quite a few people living in their parents houses claiming they are being smart. Now I can see how they could be saving enough to off set some of the value increases. If there is a crash they might then be able to afford.
Now the people renting and saving in the same area as their friends and family are a little rare I find. In fact I would say they are extremely rare. The people I work with who rent are from outside the county and they are not saving at any long term plan. Saving consists of money for holidays is how they look at it.

Now if you are saving a good bit of money after paying rent I would say you are extremely unusua. What kind of percentage is it of your salary?

I find it kind of funny that you would be able to work out the maths correctly considering you have such an inabilty to deal with statistics and such logic. Now they recommend you spend no more than 25% of your income on accomadation now if your combined way to deal with house prices costs you more than that it doesn't make sense at all.

miju

FillSpectre wrote:

Miju is a prime example. He doesn't know how to understands statistics or analytical analysis. He goes on about the herd yet he has just joined a smaller herd.

i understand statistics and analysis very well thank you it's you who chooses to discount them not me , i've been very open about all statistics and debated / dissected them rationally and reached my own conclusion on the matter , you on the other hand like to make sweeping statements with very little backbone to them and when asked for more substance get VERY vague on the matter

it's you who doesn't understand anything FillSpectre and in your increasingly excited statements your getting hard and hard to understand , relax take deep breaths and try typing slower LOL

that small herd your talking about doesn't appear to be so small going by this poll and my poll :-)

lastly Fill i don't want to discuss anything with you anymore because i find you incredibly irrational on this subject like alot of other people i know

Jonnie_Onion

Hey FS, I'd appreciate if you didn't keep ruining threads like this for me by getting personal in your posts, thanks. That kind of thing is the reserve of the less mature poster.

FillSpectre

Afuera wrote:

I don't think it's the only thing you're mixed up about.

That isn't a denial though
I couldn't be bothered checking what you posted up everywhere but I am pretty sure you said you would rent as long as it was cheaper than a mortgage.

As you don't live here and don't want to buy here, (you didn't deny that you don't want to buy at all either, so I guess you do want to own) why are you so interested? THis seems to be a common kind of view from the crash patrol, no interet in buying yet they keep going to all the property threads!

I think the majority of the people who don't own and want a crash want the crash becasue they beleive they can afford once that happens. Is that clear enough and not sweeping. They actively hope for a crash and I have seen them for over 6 years. People who are now at the market think they have figured out what will happen just like them. They could be guessing right but they are certainly aren't using information and logic.

A crash is just one option and if it doesn't happen in a year are they all going to come back and say they were wrong? No, they come back and say it will happen this year instead.

For all those sure of a crash
State the percentage the market will crash by and why that figure, explain the time frame it will happen in and the recovery time.
If it is just a feeling fair enough state it as such there doesn't need to be fancy explanations. If it is a 50% drop belief it has to have some mathematical reason as I would see it but maybe you don't.
Anybody been stating a crash is going to happen for longer than a year?
It seems to be the ultimate thing to say as if you are proved to be wrong you can just keep saying any minute now and keep going .

homeOwner

miju wrote:

prices will defo fall of that i'm 100% sure off , the question in my mind is how much

Apprently you can harness the essential powers of nature in a yogert these days but saying you know 100% for sure what will happen with the housing market, well thats just silly.

FillSpectre

miju wrote:

i understand statistics and analysis very well thank you it's you who chooses to discount them not me , i've been very open about all statistics and debated / dissected them rationally and reached my own conclusion on the matter , you on the other hand like to make sweeping statements with very little backbone to them and when asked for more substance get VERY vague on the matter

Well not from how you explain yourself you don't.
You have not rationally debated the subject as refuse anything that counters your view. You are not rational on the subject becasue all everything you use is just to support your view. I admit a crash is possible think it is the only possibility which is not logical given price is the problem not demand.

I have noticed you don't answer questions that might kind of point out flaws in your statements either. That is exactely when you start to ignore people. hence I ask you questions to explain the maths of your great savings and investemnet and you suddenly stop talking. AS this is your pattern I will assume you are covering something.
If you debated the subject you would only come to the conclusion that something will change and have a list of outcomes and not stick to one definite. Prices could drop in many areas but remain high elswhere

Cantab.

miju wrote:

for starters when prices drop i'll wait to see how hard and fast they drop when they start to rise i'll buy and i'd imagine alot of other people would do the same (i like to call it herd mentality in reverse LOL )

What makes you so confident that you will be able to get a mortgage in such turbulent economic conditions? If there's a massive crash (which I predict there will), the banks will be far more prudent in their lending.

Ireland's international competitiveness is slipping making it a far less favourable destination for the multinationals. This, coupled with the fact that similar sized countries across the world have copped on to what Ireland has done and are offering more attractive packages to the multi-nats. At present, very few countries EU have opened their borders fully to immigrants. What will happen to the rental market in 2008 when all EU countries (France, Germany) must allow full access to their labour markets, resulting in less immigrants coming to Ireland?

delboy159

I do feel that house prices have peaked or are close to peaking, but some peoples arguements are based on simplistic Leaving Cert Economics without a perspective on the realities of the world

- Equity investments perform better. Before anyone even goes into stats or historical performance etc. this is a non-debate...... How many common or garden working stiffs are going to get a 300k loan from a bank and say - it's okay lads, I'm not buying a house, I'm putting it into equities for 20 years - I'll be grand.... Houses for normal people v equities are not a comparison. Yes if you have 1 mill in the bank and scratching your head, then the debate exists, but for the vast majority of home buyers this isn't a consideration.

- Laws of supply and demand - correct they do exist in the housing market, but not like clothes or cars or food etc. You buy clothes and the minute you put it on you have devalued it. Property investments or first time home purchases aren't just based on percieved value, consumption and loss of value like most products.... Bigger picture!

- Families can rent - this is very true. However, human nature kicks in on this one - forget economics.
>Asset to pass onto off spring (no 300k loan for equity portfolio) to put this into perspective - a friend of mine who took 5/6 years to buy because he always thought things were overvalued has a 2 year old kid now (he has a house 4 yrs ish). He has gone from barely buying one house to thinking I need to get a 2nd property to set things up for the baby, no other reason than that!
>If you rent you could be kicked out and homeless (stability for family)
>Quality of the upkeep of the house is landlords responsibility, not renters... Do you pay for a plumber to sort out the smelly toilet because it makes your kids feel sick? Landlord may take weeks (if your lucky) to bother with that..
>Social pressure (I think this is a terrible reason, but unfortunatley true - it's the same as going out 7 yrs, not engaged, then engaged, but not married, then it's married, but no kids - backward Irish crap) - from family and friends - you have a family and no home for them??? Tut, tut..

All of the above reasons - to name but a few don't appear in the basic formula of cost benefit analysis when assesing purchasing v's renting.

We still don't know what will happen when prices do drop a little - will it be a herd get out of dodge mentality or will people think - "there's a bit of value in the market - lets buy" and thus keeping things at a sort of level stable level?

If I was asked which of the two scenarios below were more likely to happen
- houses prices would increas by over 20% from mid 05 to mid 06 OR
- the bubble will burst in 2006.

I would have said the increase from 05 to 06 was less likely - I would have been very wrong there - so one really never knows, does one...

homeOwner

Afuera wrote:

I've lived in Ireland until recently, still spend quite a lot of time there and it's not exactly rocket science to see where it's heading.

Where is it heading? Do you have a timemachine that has taken you to that time in the future when the property market has crashed. Can you tell us the year it happens.

daveirl

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Afuera

FillSpectre wrote:

I am pretty sure you said you would rent as long as it was cheaper than a mortgage.

No, I never said anything of the sort.

FillSpectre wrote:

As you don't live here and don't want to buy here, (you didn't deny that you don't want to buy at all either, so I guess you do want to own) why are you so interested?

For the record, I don't want to buy anywhere right now.

I'm interested because I think it makes a good case study of the boom-to-bust cycle.

homeOwner

daveirl wrote:

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But are you really saving 1K over and above a mortgage. Are you taking into account that if your mortgage was (say for example) 1500 per month, since interest is front loaded on mortgages, around 400 pm of that 1500 is coming off the principle and around 1100 per month is going to the bank on interest. So you are contributing 400 pm towards an asset. Plus about 60 quid mortgage interest relief. That is only 540 you are saving in terms of cash.

There is a likely hood that both the property market and equity markets could crash.

Now the question is in 20 years will your 600pm amount to more than the increase in the value of the house?

daveirl wrote:

This post has been deleted.

Where? When? I bought my 2 bed apartment in 2003 and have just sold it for a total profit of 200K, thats 66K per year profit and my mortgage payments were 900 per month. To rent in the area is over 1200 pm. Show me the equity that has outperformed that anywhere in the world. I am not the only person who has done this, there are loads of people making that sort of profit from property. Whereas to make 66K from equities you have to be investing literally hundreds of thousands of euro which ordinary Joe Soap doesnt have, hence back to delboy159s point.

CiaranC

I'm saving 1k a month on rent v mortgage

Wanna explain how you are doing this?

delboy159

daveirl - I'm so jealous of you. I'd have great craic researching the best funds to have long term investments in and probably of the 12k in the year - put 9k/10k into long term safe funds and 2k/3k into my own portfolio which I do the investing.. That would be cool.

I appreciate your point on the difference between rent and mortgage and investing it, but
- very few people would find themselves with 1k a month of a difference. I'm looking at the rent v mortgage thing seriously myself and I can only see myself saving at best €400 per month.
- Also as an investment there are many angles on property as in - releasing of equity to make money work for you.
- Your home being an income generator as a rental option.
- If you decide to keep it as a PPR you are looking at no CGT if you sell.
- Also, if you have tiny hands painting on walls etc. you will need to rent a house which would cut your 1k a month difference between mortgage and rent down to much , much less.
- People will also argue the significant short term gains made from property, but then most pump these gains into an even bigger property with even more debt...

Saying all that I respect your ability to make things happen for yourself with your 1k a month difference, most Irish are pissing that up against walls on Thursday, Friday and Saturday nights.

Afuera

homeOwner wrote:

Where is it heading? Do you have a timemachine that has taken you to that time in the future when the property market has crashed. Can you tell us the year it happens.

Don't be ridiculous, nobody can give you a time or date on this. The direction the market is heading can however be extrapolated from published indicators and comparisons with other markets throughout history.

Rising debts and high investor involvement point to a rather speculative market and this can provide the perfect groundwork for a crash. Since the ECB are starting to raise rates and slowly turn off the credit tap the future doesn't look too bright though.

Of course, you're free the disregard all the warnings of overvaluation from the OECD, ECB, Irish Central Bank, various economists etc.

SkepticOne

homeOwner wrote:

Now the question is in 20 years will your 600pm amount to more than the increase in the value of the house?

This would depend on what the house price will be in 20 years time, surely. Since historically equities outperform property it is follows that money is better off in equities. That you don't need a mortgage to invest in equities is an additional bonus. The downside is that you have a landlord however.

Where? When? I bought my 2 bed apartment in 2003 and have just sold it for a total profit of 200K, thats 66K per year profit and my mortgage payments were 900 per month. To rent in the area is over 1200 pm. Show me the equity that has outperformed that anywhere in the world. I am not the only person who has done this, there are loads of people making that sort of profit from property. Whereas to make 66K from equities you have to be investing literally hundreds of thousands of euro which ordinary Joe Soap doesnt have, hence back to delboy159s point.

I think most people agree (including the 'bulls') that these gains are not sustainable. Yes if you know for sure in advance that there are going to be large gains then it is worth borrowing to the max to take advantage of them. If you don't but merely think, based on past performance, that gains are likely, then you are taking a massive risk. On a pure return on your money basis, assuming neither a rise or a fall in prices (imo a sensible approach) then equities perform better.

FillSpectre

Afuera wrote:

No, I never said anything of the sort.



For the record, I don't want to buy anywhere right now.

I'm interested because I think it makes a good case study of the boom-to-bust cycle.

Again that is not a denial of the fact you want to buy. I think it was you who said that but I could be wrong either way as you are hesitatnt to actually say you don't ever want to buy by being picky about your words it is obvious you want to own at some point. I get you like to pedatic about language to avoid the point and start arguements.

If you are really interested in a case study of boom to bust you should use an historical event as you can see how it started and ended in it's complete cycle.

Ireland is actually a really bad example of a boom bust cycle due to the prolonged boom over different sectors over lapping, programs to get imigration populations back into the country, SSIAs etc.... Are you studyin gthe cuycle as hobbie then?

daveirl

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daveirl

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