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Housing bubble starting to pop?
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Shane™ wrote:
From what I can see the people here who refute a correction in the property market cannot make a single argument for their beliefs, (sizzler and belly especially!) there were a few bulls a couple of months back with good arguments but from the last comments I read from those guys they had changed their minds.
I wonder do any of these bulls own more than one property?
Erm, I have never said there won't be a correction on the property market, what I have done is tried to tease out peoples understanding of what they believe a 'correction' is. Predicting price crashes of 30-40% on the average 3 bed semi is BS, so you can use whatever graphs and stats you like because ultimately it wont happen and you will never be able to back it up because like Ive said many times before the likes of the PR dudes from Ulster Bank / BOI etc constantly find themselves backtracking but they persist as they have to get it right sometime They and you are ultimately guessing....its like backing horses, the form book is there to back it up but more often than not it doesnt work out the way you think.0 -
if prices go down by 20percent,it wont really affect people who have a mortgage,just the professional investors,cos if you wanna move or buy a house they will be cheaper,houses in small areas like dalkey ,donnybrook,will always be expensive ,because demand is high and supply is limited in certain areas,and theres no new houses being built apart from apartment.if the price of a 500k house in dalkey go,s down to 450 k, it doesnt affect the average person just looking for somewhere to live.0
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you can lose your home without going bankrupt,ie just sell it and pay off mortgage ,if you think the mortgage is too expensive.you have the rental option.0
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See my responses below in chief. Btw, why not outline your theory rather than using metaphors. What exactly do you predict will happen in the irish property market and when? It would help if we knew your stance.SimpleSam06 wrote:Well fair play to you, this is the first cogent list of bullish reasons I have seen so far in this entire debate. Now if you can back them up with links to trustworthy sources, we have a debate.
I get most of my info from the daily newspapers, estate agents, my financial advisor and my solicitor. Plus my own education.SimpleSam06 wrote:The traditional response was, I believe, to emigrate.
We dont have the same level of emmigration as we did decades ago thanks to Charlie and the growth in the job market. CSO has stats on emmigration rates which back this up. I think we are still considered to have a "full" employment rate in econmic terms.SimpleSam06 wrote:96% of Ireland's land is not used for residential property purposes. We aren't running out of land, and we will almost certainly never run out of land.
ok so, why isnt another housing estate being built in my back field? Oh yeah, zoning and brown envelopes.SimpleSam06 wrote:Immigrants, as discussed exhaustively in this thread, are not buying houses here for the most part. You buy a house somewhere you mean to stay for a good while. Why in the name of god would they want to chain themselves to a 35 year mortgage, in a place where their native language isn't spoken? This is just more EA bollocks intended to push the wheezing horse another few feet up the hill.
Tell that the multicultural society that is the UK. 20% of FTB's in Ireland are non national and that figure is growing and we all know how ireland is more and more becoming a multicultural society where foreign nationals are moving to ireland to make a living. Considering that recent newspaper articles showed that alot of foreign nationals send money home to family, however what the articles did state is that its actually tax deductable. Its naive to think that most foreign nationals are here for a overlong working holiday.SimpleSam06 wrote:We have two major employers closing soon in the Galway region alone; one is well known the other not so much. American corporations are going elsewhere now their tax breaks are drying up. Intel, Dell, Microsoft.
Which employers are closing? How many people do they employ? How many job opportunties are due to be created in galway in the next 12 months? Job losses hit the headlines, job opportunities are not as big news stories.SimpleSam06 wrote:Before what, they die?
I presume by your smart answer you concede on this point.SimpleSam06 wrote:That assumes you can hold on to it in the face of rising interest rates. And even then, it doesn't make it a good long term investment. And thats just in financial terms; frankly I find the purchase of residential property as a vehicle for profit to be ethically dubious at best, and a serious menace to society at worst.
Considering as a long term investment you can live in it, or rent it out (which covers most of your recurring monthly investment cost) its a darn good investment. I take it you will never buy property or indeed own your own home?SimpleSam06 wrote:Yes, and when they go down, banks like to leap in and offer huge sums for a low repayment price. When they go up, people lose their homes and go bankrupt.
Back this statement up with sources please, its tosh. How many people were declared bankrupt in ireland in the last 12 months? less than 10 as far as i remember.SimpleSam06 wrote:Well that can't be denied. Thats why we have regulators to keep them under control. After this house of cards comes crashing down, I believe they will be getting a rap on the knuckles they will be a long, long time forgetting.
What do you mean "house of cards comes crashing down?"SimpleSam06 wrote:True, but it has nothing to do with the massive price increases over the last 5 years.
Whats your argument here?SimpleSam06 wrote:So is paying interest on a house. And right now, rent for nearly everywhere is less than interest repayments, and this is in a low interest rate period. You have to pay even more if you want to reduce your mortgage.
Of course but when the demand for rent goes up rents go up. No different than house price inflation!
Oh My God, my good friend SimpleSam06 has unknowingly discovered an inverted bubble in the rental market. With the impending doom in the property market, this will push people in the rental market thus pushing up rent!!! How long will the good times last renting???? Better warn those students!! we shall call it the ticking rental timebomb! When will it go off??0 -
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gamer wrote:you can lose your home without going bankrupt,ie just sell it and pay off mortgage ,if you think the mortgage is too expensive.you have the rental option.
you can also avail of rent a room schemes or consolidate your debts.0 -
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gamer wrote:you can lose your home without going bankrupt,ie just sell it and pay off mortgage ,if you think the mortgage is too expensive.you have the rental option.0
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SimpleSam06 wrote:Hey, guess what? If you have a mortgage for 300k, and you can't sell your house for more than 200k, thats 100k you owe the bank, plus interest. And you have no house. This is the third damn time I've posted this in this thread, will people just read the entire thread before lepping in with their drawers around their ankles.
and as demographics change we are going to have a massive surplus of apartments as people have families etc
unless we can somehow turn around our competitiveness0 -
oh and we are seriously not gonna run out of land here
farming here is in reality uneconomic only kept going by trade laws
how could we compete with countries such as Thailand whose climate allow them to have FOUR harvests a year
Remember Geldof and Bono are campaigning for Free Trade
and after all we are artificially keeping these countries poor for our gain
No land Shortage here
the population was 8million plus in the past0 -
faceman wrote:I get most of my info from the daily newspapers, estate agents, my financial advisor and my solicitor. Plus my own education.faceman wrote:We dont have the same level of emmigration as we did decades ago thanks to Charlie and the growth in the job market. CSO has stats on emmigration rates which back this up. I think we are still considered to have a "full" employment rate in econmic terms.faceman wrote:ok so, why isnt another housing estate being built in my back field? Oh yeah, zoning and brown envelopes.faceman wrote:Tell that the multicultural society that is the UK. 20% of FTB's in Ireland are non national and that figure is growing and we all know how ireland is more and more becoming a multicultural society where foreign nationals are moving to ireland to make a living.faceman wrote:Considering that recent newspaper articles showed that alot of foreign nationals send money home to family, however what the articles did state is that its actually tax deductable. Its naive to think that most foreign nationals are here for a overlong working holiday.faceman wrote:Which employers are closing? How many people do they employ? How many job opportunties are due to be created in galway in the next 12 months? Job losses hit the headlines, job opportunities are not as big news stories.faceman wrote:I presume by your smart answer you concede on this point.faceman wrote:Considering as a long term investment you can live in it, or rent it out (which covers most of your recurring monthly investment cost) its a darn good investment. I take it you will never buy property or indeed own your own home?faceman wrote:Back this statement up with sources please, its tosh. How many people were declared bankrupt in ireland in the last 12 months? less than 10 as far as i remember.faceman wrote:What do you mean "house of cards comes crashing down?"faceman wrote:Whats your argument here?faceman wrote:Of course but when the demand for rent goes up rents go up. No different than house price inflation!faceman wrote:Oh My God, my good friend SimpleSam06 has unknowingly discovered an inverted bubble in the rental market. With the impending doom in the property market, this will push people in the rental market thus pushing up rent!!! How long will the good times last renting???? Better warn those students!! we shall call it the ticking rental timebomb! When will it go off??0
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the average person buys house ,stays there for at least ten years be4 selling ,its best to think of a house as somewhere to live ,not as an investment.If house prices just went up by 5percent a year it would be better for the economy,there are to many tax reliefs in place to encourage investors,i think.0
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if these weasel investors had their way, there would be a water or electricity price bubble next
those inside track seminars are full of those weasel types0 -
SimpleSam06 wrote:Medtronic for one, and another one I know of but which I am not allowed to talk about, but which is significantly larger.
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Woah, woah ,woah, where did you hear Medtronic are closing? Please PM me if you can't say it publicly.
That would be a ****ing disaster for Galway.0 -
Amazotheamazing wrote:Woah, woah ,woah, where did you hear Medtronic are closing? Please PM me if you can't say it publicly.
That would be a ****ing disaster for Galway.0 -
SimpleSam06 wrote:Err on this thread, just go back a few pages. Take it with a pinch of salt if you like. The other one is bigger though, and I'm not PMing anyone about it.
Fair enough, just happened on this thread through the active topics screen, will read back and find out more. Thanks.0 -
gamer wrote:the average person buys house ,stays there for at least ten years be4 selling ,its best to think of a house as somewhere to live ,not as an investment.If house prices just went up by 5percent a year it would be better for the economy,there are to many tax reliefs in place to encourage investors,i think.
I don't think anyone would disagree with you with this, but unfortunately this is not the case and is borne out by stats again and again. Investors/speculators have had a hugeee impact on the market - and if they run scared there will be trouble. They are the people who will shape the market.0 -
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Simplesam not going to start another thread of debate with you but im still unclear on your house of cards analogy. What EXACTLY is your theory and beliefs on the property market? Your counter debates to mine dont summarise it. You actually have correct some "bears" too on the thread so im a tad confused. Also you're the first person on this thread to agree with my original comments that you cant compare ireland to the uk! Thanks! Altho multicultural ireland is here to stay. Without given my personal details and background, altho i dont always provide links to all statements i make, i dont make them up. whether you chose to believe is your own choice. As henry rollins says, "know your enemy". Most of my statements can be investigated quite easily online.
YOu are correct on a point above that people seem to forget. Its not financially viable to jump ship if house prices go into negative equity.
Blindjustice, as simplesam says what would the point of selling a 300k house for 200k owing the bank 100k and then having to pay rent too??? There wont be a surplus of properties to the degree some predict.
Re my comments about foreign nationals claiming tax relief on funds they send oversear, i dont have link. It was on the radio as part of the Revenues new policy of letting everyone know their rights. Some of you may not know that you can claim tax relief on money you give your parents if you live at home and it can be backdated a number of years. My mate actually did it after hearing it on the radio. Got about 2k backdated. Anyone who doubts me can ring the tax office and confirm.
OK a bit cheeky of me commenting on your discovery of an inverted rental bubble but it is a new discussion point not really brought up before. For those of you interested i posted a thread and poll in Accommodation forum on how house price inflation will impact rents.
http://www.boards.ie/vbulletin/showthread.php?t=2054988720#
would be interested in getting some of your opinions.0 -
faceman wrote:Most of my statements can be investigated quite easily online.faceman wrote:YOu are correct on a point above that people seem to forget. Its not financially viable to jump ship if house prices go into negative equity.faceman wrote:Got about 2k backdated. Anyone who doubts me can ring the tax office and confirm.0
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SimpleSam06 wrote:Burden of proof again; I did some googling there, and the only things I could find were tax deductions for charity. Why the taxman would allow deductions for cash flowing out of the country, for what is at the end of the day personal use, just doesn't make sense. The only way you could justify that would be if you claimed you were investing in a business back home or something, and that would be fraud. Otherwise I could just send all my income to some of the people I know abroad, and have them western union it back to me, the easiest money laundering scheme in history.
Ring the tax office. Im not making it up! If you prove me wrong you can shame me online (and sizzler) and i will never post again!
:cool:0 -
In census 2002 there were 170,000 empties
In census 2006 there were 275,000 empties
In the intervening five years and despite huge immigration we spent over a whole year simply simply building and then buying empties . Are we not great0 -
faceman wrote:Ring the tax office. Im not making it up! If you prove me wrong you can shame me online (and sizzler) and i will never post again!
:cool:0 -
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Sponge Bob wrote:In census 2002 there were 170,000 empties
In census 2006 there were 275,000 empties
In the intervening five years and despite huge immigration we spent over a whole year simply simply building and then buying empties . Are we not great
Just out of interest though, I wonder how firm the criteria for arriving at the 275,000 were ? I mean to say, how many properties were definitely vacant as opposed to everyone at work/not answering the door/holiday homes? There's been a rash of holiday homes built since 2002 for example; I don't know what proportion of these would have been seen as investments rather than utilisable assets (nevertheless more potential risk if they were purchased out of refinancing in a low interest period).0 -
Very firm , all checked a few times and then marked empty, not on holidays or away somewhere , there were 25000 of them too.
Many were holiday homes or tax scheme houses in Leitrim, lets say 20000, we still built 80000 houese that are not tax designated (and empty for a reason) but simply empty, one whole years worth of building in five just to keep them empty.0 -
Sponge Bob wrote:Very firm , all checked a few times and then marked empty, not on holidays or away somewhere , there were 25000 of them too.
Many were holiday homes or tax scheme houses in Leitrim, lets say 20000, we still built 80000 houese that are not tax designated (and empty for a reason) but simply empty, one whole years worth of building in five just to keep them empty.
According to the IBF/PwC report there were 67,588 first time buyers and residential investment mortages drawn down in the last 4 quarters and the department of enviroment statistics would indicate approx. 89,549 new units were built in that same time period. You can't say this indicates oversupply 100%, since not all factors governing house purchases can be measured easily.
The PwC report also shows a decline in the number of FTB's taking mortgages for the first 2 quarters of this year, this downward trend is likely to continue unless the SSIA money acts as a cushion, the government extends the stamp duty band as requested by the banks or house prices start reducing to reflect the increased supply.
IBF/PwC Mortgage Market Profile - New Lending - Quarterly Report
http://www.ibf.ie/pdfs/ibf_pwc_mortgage.pdf
Housing Statistics
http://www.environ.ie/DOEI/DOEIPub.nsf/wvNavView/RegularPublications?OpenDocument&Lang=en#I2Net Zero means we are paying for the destruction of our economy and society in pursuit of an unachievable and pointless policy.
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the butcher wrote:HERNDON, Va. — For years, real estate brokers and home builders promised that the soaring property market eventually would glide to a soft landing. These optimists predicted that home prices, which had more than doubled in parts of the country between 2000 and 2005, would continue to rise, but at a more normal pace of 5 percent or 6 percent a year
The economists (Ireland's new high priest's) are predicting between 3% and 7% growth next year and a soft landing after that.Then mortgage rates began rising and surging inventories of homes for sale finally caught up with demand. Though economists had been predicting a slowdown in housing for years, many homeowners and builders were surprised by how fast the market changed.
"It's just like somebody flipped a switch," says Lynn Gardner, a real estate auctioneer who works in Northern Virginia.
"It would be difficult to characterize the position of home builders as other than in a hard landing," says Robert Toll, chief executive of luxury home builder Toll Brothers Inc., which reported last week that net income fell 19 percent in the third quarter ended July 31.
In his 40 years as a home builder, Toll says, he has never seen a slump unfold like the current one. "I've never seen a downturn in housing without a downturn in employment or ... some macroeconomic nasty condition that took housing down along with other elements of the economy," he said. "This time, you've got low unemployment, you've got job creation, you've got a stable stock market and relatively low interest rates."
A couple of things have combined to make this happened, since 2000 the average income has not kept pace with house price inflation, and they have borrowed against "perceived" increase in value of their homes, so called "mortgage equity withdrawal" or top-up mortgages in Irish bank speak to the extent they've been in negative savings for the past few months. Post 2001 when interest rates were dropped to historic lows and oil prices were lower, house prices took off mainly in coastal cities. American lending instituitions loosened their lending criteria and introduced new products like adjustable rate mortgages (ARM's), like 100% io mortages here in Ireland. Most jobs growth in the US over the past few years has come from construction.
There is also a massive keeping ahead of the Jones culture there (It's here too), which means it your neighbour buys a Sports Utility Vechicle (SUV), you got to have one as well and this has driven the American auto industry combined with easy finance deals.
Its 2006, interest rates have risen 17 times in quick order (still low by historic standards) and petrol prices have become really expensive by American experience. The introductory low interest rates on ARM's have expired.
Remember their income has not really grown in the last 5 years, all these factors have combined to create the current situation.
Question: Ireland is different how?- Longest running boom ever recorded by the OECD
- Heavy involvement of speculators in the property market
- Obsession with foreign property, failing to take into account local economic conditions and prospects.
We are leveraging our own property in Ireland to fund these adventures and projecting Irish growth rates to this. - Large number of unoccupied units across the country.
- Construction and public sector have been the jobs engine for the last five years.
- A record 90,000+ units due for completion this year.
- Migration of manufacturing eastwards, with some major employers lining up to move.
- Construction sector funded by debt.
- Government revenue growth dependent of construction.
- Lack of growth in income tax receipts despite more people that ever working that ever before (i.e. wages are not growing fast)
- Average of 10% per annum house price inflation
- Banks getting creative with their lending criteria (35 year and even 40 year mortgages, 100%, i/o mortgages)
- Banks securitising loans
- Record personal debt levels that continue to increase.
- Ireland rated just behind Azerbaijan as country most vulnerable to sudden economic shocks.
We've all been sold the idea of a soft landing (house prices growth will remain flat or grow at levels in line with income growth) and most of our chief priest's repeat the same mantra, to the extent that it has become an article of faith among the believers, and any non believer is attacked and derided in the same manner that religion is defended.Net Zero means we are paying for the destruction of our economy and society in pursuit of an unachievable and pointless policy.
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SimpleSam06 wrote:Well burden of proof means you have to prove yourself right. Until then I'm afraid I have to discard your comments as hearsay. And in any case, most immigrants aren't buying houses, which is the whole point of this discussion. Since we're raising the stakes however, you give me one link not from the IMC or from groups reporting the IMC "findings" to state they are buying houses, and I'll give you three links to state they are not.
Eh its not Primetime we're on mate. Believe what you want i dont give a toss. You STILL havent said what your belief on the property market is. Do you even have one? Are you waiting to see what happens and then say "i told you so"?0 -
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Sponge Bob wrote:Very firm , all checked a few times and then marked empty, not on holidays or away somewhere , there were 25000 of them too.
Many were holiday homes or tax scheme houses in Leitrim, lets say 20000, we still built 80000 houese that are not tax designated (and empty for a reason) but simply empty, one whole years worth of building in five just to keep them empty.
Did you get these stats from the same auctioneers will only sell their mate's houses in galway so everyone else is screwed next year? lol0 -
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Pa ElGrande wrote:According to the IBF/PwC report there were 67,588 first time buyers and residential investment mortages drawn down in the last 4 quarters and the department of enviroment statistics would indicate approx. 89,549 new units were built in that same time period. You can't say this indicates oversupply 100%, since not all factors governing house purchases can be measured easily.
FTB's are not the only purchasers of new properties.0 -
Pa ElGrande wrote:We've all been sold the idea of a soft landing (house prices growth will remain flat or grow at levels in line with income growth) and most of our chief priest's repeat the same mantra, to the extent that it has become an article of faith among the believers, and any non believer is attacked and derided in the same manner that religion is defended.
Some areas will have a soft landing, redbrick Dublin for example . Other areas will simply implode with massive collapses in value of 50% or possibly more and chronic illiquidity.
The most 'at risk' areas are ultra commuter belt places like Bunclody and Mountmellick and Castlepollard etc where the house prices bear no relationship to the local economy or local incomes but are cheap 'Dublin' houses in effect .
The slump that will be felt 50 or 60 miles from Dublin will equally be felt 30-40 miles from Cork City and 20-30 miles from Galway and Limerick as their ultra commuter belts evaporate to all intents and purposes .
This slump will lessen progressively as one gets closer to where the jobs really are and thats why it will be noticed least in D4 and places near a large selection of potential employers.faceman wrote:Did you get these stats from the same auctioneers
The stats on empties (checked empties) come from the Central Statistics office .0 -
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Sponge Bob wrote:Some areas will have a soft landing, redbrick Dublin for example . Other areas will simply implode with massive collapses in value of 50% or possibly more and chronic illiquidity.
The most 'at risk' areas are ultra commuter belt places like Bunclody and Mountmellick and Castlepollard etc where the house prices bear no relationship to the local economy or local incomes but are cheap 'Dublin' houses in effect .
The slump that will be felt 50 or 60 miles from Dublin will equally be felt 30-40 miles from Cork City and 20-30 miles from Galway and Limerick as their ultra commuter belts evaporate to all intents and purposes .
This slump will lessen progressively as one gets closer to where the jobs really are and thats why it will be noticed least in D4 and places near a large selection of potential employers.
The stats on empties (checked empties) come from the Central Statistics office .
post links to your sources, otherwise this will be dismissed as hearsay. id love to know where you got your 50% drop from! (those same auctioneers again in galway??)0
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