Housing bubble starting to pop?

SimpleSam06

miju wrote:

aye, the wheels have now begun to slowly turn in reverse and will only gather speed as time goes by ,

kick back , feet up and grab the popcorn i say

Yeah, looks like its that time of day alright. It might be worth popping up the odd milestone thread here and there, though, for the dead cat bounces. Or maybe a "how to get your ass out of property in a hurry and into something else" thread?

SimpleSam06

finnpark wrote:

Where will these go. Plasters, tilers, plumbers etc with no work. Surely they will go abroad leading to a further decrease in prices.

London Olympics 2012 is a good start if you'll be looking for construction work...

Sponge Bob

HashSlinging wrote:

one dropped the price from 425k to 381k and the other dropped from 470k to 381k.... unreal

€386k+ is a key stamp duty band for trader uppers where the duty goes from 6% to 7.5% (or thereabouts) .

Where did that 25% drop in what is a mid band property anywhere except Dublin occur. N E S or W will do ??? . The property pros have admitted that high end €2m houses in S Dublin are not shifting but a drop like this in th e trader upper band is MOST noteworthy if replicated nationwide.

(why do I suspect its the midlands ?)

faceman

whoa whoa whoa my fellow debaters!! Whats this rubbish talk of the crash is here?? We're just getting warmed up.

Read the media and its says the house price growth is slowing - not dropping!! A crash doesnt happen unless properties are running into negative equity!

Re auctions, interesting comment in the indo today.

http://www.unison.ie/irish_independent/stories.php3?ca=9&si=1697796&issue_id=14713

note the property in blackrock that was withdrawn from auction cos it wouldnt sell but then sold privately for excess the AMV!! Hmm that doesnt make sense does it?

Also note the bandwagon inaccuracies in the papers today. The indo claims that mortgage repayments have gone up €260 on average yet herald am (or cud have been metro) claim €400. So which is it??

Although the market is definitely slowing its not hitting a major reverse yet which is necessary for a crash.

so come on, keep the debating going!

Id be interested to see proof of those massive property asking price drops mentioned above by Hashslinging. What areas and what estate agents? I would like to ring them.

If its being done to generate interest as opposed to reflecting the property value then thats illegal.

D'Peoples Voice

faceman wrote:

Read the media and its says the house price growth is slowing - not dropping!! A crash doesnt happen unless properties are running into negative equity!

If you are talking about the ESRI/PTSB property survey for August recently today Friday Sept 29th, not only it is a month old, but if I remember correctly, it's always behind the market because it is looking at loans being drawn down at the time the survey is being undertaken.
Please correct me if I'm wrong, but as I understood it, someone buys a house, it takes another few weeks for the deal to go through, then they draw down on the mortgage, when they are signing the deeds. Ptsb then record the price paid for the house on that date and that figure goes into the survey for THAT month. It ignores the fact that the person bid for the house a few weeks prior.
So if asking prices are falling NOW, then by my estimation, assuming they get the deeds signed within 6 weeks, it will only really affect November's figures and thereafter.

finnpark

HashSlinging wrote:

made a few phone calls this week as im still looking for a house, very very intersting times. I've had two estate agents drop prices on two houses im interested in, one dropped the price from 425k to 381k and the other dropped ..... wait for it...... wait.... for..... it...... from 470k to 381k.... unreal

:eek:

That is truly shocking if its true. That would suggest the crash has begun much sooner than expected.

SimpleSam06

faceman wrote:

so come on, keep the debating going!

At this stage its not so much debating, as a running commentary. Pa reckons five years before prices hit rock bottom, I'd reckon its closer to two, but there just isn't much else to debate. Housing bubble starting to pop? Housing bubble popping.

mad m

faceman wrote:

so come on, keep the debating going!

Id be interested to see proof of those massive property asking price drops mentioned above by Hashslinging. What areas and what estate agents? I would like to ring them.

Well I dont know about Hashslinging area but as I said up a few posts myself and wife are trading up to a bigger house and its now over €35k asking price for a house we want plus they want more which we dont have!!!! Im not bidding against myself:rolleyes:

faceman

mad m wrote:

Well I dont know about Hashslinging area but as I said up a few posts myself and wife are trading up to a bigger house and its now over €35k asking price for a house we want plus they want more which we dont have!!!! Im not bidding against myself:rolleyes:

So do you believe we have a crash on our hands?

mad m

Well to be totally honest I have seen prices on some houses come down to attract attention,hmm a crash I would say No but slow down definitely. But this depends on how much rates will rise in coming months plus there is a slow down in buying houses after october.

shaptakster

HashSlinging wrote:

made a few phone calls this week as im still looking for a house, very very intersting times. I've had two estate agents drop prices on two houses im interested in, one dropped the price from 425k to 381k and the other dropped ..... wait for it...... wait.... for..... it...... from 470k to 381k.... unreal

Lies.
Tell us who the agents are and which properties. Maybe they have something going cheap for myself and the missus

faceman

shaptakster wrote:

Lies.
Tell us who the agents are and which properties. Maybe they have something going cheap for myself and the missus

i agree. Its either lies or he was trying to buy a gaff in darndale!

el diablo

faceman wrote:

So do you believe we have a crash on our hands?

too soon to say, but I'll be following this thread with interest....;)

bounty

i reckon we're at the beginning of anxiety



el diablo, you stole my avatar!!

ionapaul

Not sure about that, still a whole lot of people around who firmly believe 'you can't lose money on property', 'property always goes up' and 'i own 3 investment properties but don't know what yield means'! Lots of people are still in the euphoria stage, dreaming of becoming millionaires without having to work, just by borrowing money from the bank and buying house after house...

It is truly going to be horrible on the way down for many, many people.

el diablo

bounty wrote:

el diablo, you stole my avatar!!

oh, I'd better find a new one. I wish we could use our own avatars....:rolleyes:

shaptakster

ionapaul wrote:

Not sure about that, still a whole lot of people around who firmly believe 'you can't lose money on property', 'property always goes up' and 'i own 3 investment properties but don't know what yield means'! Lots of people are still in the euphoria stage, dreaming of becoming millionaires without having to work, just by borrowing money from the bank and buying house after house...

It is truly going to be horrible on the way down for many, many people.

And lots of people have actually become millionaires. Most of my mates have while i've been waiting to get on the ladder over the years. We only really decided we wanted to buy a house in the last year when the missus got pregnant. Security is a major, major factor when there is a baby on the way.

My problem was solved last night though.
My brother owns 6 properties without mortgages (he sold another 7 houses in south Dublin over the last 2 years (the newest of which he bought in 1999) so he's not short of a bob or 2. He doesnt think there will be a crash, but is playing safe and banking a few quid. He always said, have at least half your assets in cash earning above inflation nice and safe somewhere.). He will keep the rest of the houses as there is nothing owed on them.

But here is the best bit.
He Lets my mother and father live in one rent free (they sold theirs and are living the life off the proceeds) so i asked why he doesnt do the same for me the other day, and he must have been feeling soft and said he will. on condition that i put the money i would have paid for a mortgage into a pension scheme for myself and a trust fund for the baby (The missus has a civil service pension scheme). We're now going to be living in a 3 bed house in Blackrock for free. Any payments we make are going back into our pockets with a pensions tax break too.

It works for us as if prices went much higher we would never ever afford a house.
We dont have to buy a house or pay rent and i'm forced to sort out a pension so i'm happy.
Worst case scenario we end up paying rent again at some stage in the future if he decides to sell the house, but i know him, he wont. There may be tax implications, but he has a perfectly legal way around that too.

Out of the property rat race and not a care in the world about property prices anymore, so happy days.

The point is, i've noticed something. I now find myself not wanting a crash as much as i did yesterday And i'm looking at the whole situation with objective eyes now that i dont actually need a crash. Amazing how things change.

There are bound to be success stories with this whole debacle; there are at least a few winners out of every pyramid scheme. But the thing to remember is that any realised profit made out of this property boom is going to come out of the heating, childcare, clothing, food and general living costs of people who have been trying to buy homes in the past few years. Note the use of the word 'home'. Not 'investment', 'asset' nor 'pension'. All of them, not just those intoxicated by easy credit and the chance to become a property mogul. And when the 'winners' have cashed in, these people - the new millennium's tenant farmers - will have 30-odd years in which to pay the bills of those living on Easy Street, D4.

Not having a go at you or your brother personally, shaptakster, but I find the whole housing boom almost scripted to ensure that no sooner had Ireland and its people seen unprecedented wealth creation, it was stolen away by the banks, the developers and the first waves of opportunist landlords.

mad m

@shaptakster

Thats great,your on the pigs back and goodluck with it...Wish I had a brother like yours.:)

ionapaul

Yep, fair play to those who actually made their millions with this - likewise (I lived in California from 1999-2004 for graduate school and work) I know a good few over there who made their millions from the dotcoms BEFORE the crash...it can be done!

I remember buying Iona Technologies at $52 and selling just weeks later for $77, then imagine my regret seeing it hit $100 weeks after that! Course you can't ignore the fundamentals for ever...think it is trading around $5 at the moment! What a rollercoaster ride that bubble was glad I lived through it. I do honestly think our own bubble will be more horrific for those involved, it will ruin lives and careers

bounty

I found this article very interesting..

Growing numbers of hedge funds have placed bets on a slump in the US housing sector in recent weeks

el diablo, you like letterman?

Sponge Bob

David has arrived at conslusions based on funny stats. He is running with figures of 230000 empties nationwide (13.5% of our housing stock) supplied by Davy Stockbrokers and NOT the figure of 275000 empties (16% of our housing stock ) supplied by the CSO.

As Davy did not send anyone out I will go with the CSO 16% figure and thanks Dave.

Dave also got confused between Westport in Mayo where there were no tax incentivised empties and the Shannon catchment where there is a large number of these properties.

Neverthless he has noticed the LARGE number of empties in Ireland just as I have done .

http://www.sbpost.ie/post/pages/p/story.aspx-qqqt=DAVID+McWilliams-qqqs=commentandanalysis-qqqid=17687-qqqx=1.asp

Even if we accept that Ireland might have a slightly different history, are you comfortable with the fact that in Britain - which has a similar home owning and holiday home buying culture, the corresponding figure is 3.2 per cent of all houses? Here one house in seven is empty; over there it is one house in every 31.

There I was thinking all along that we had a housing crisis, with prices rising at double digit rates because we didn’t have enough houses.

Pity he did not read this thread then, he would be a helluva lot MORE worried.

Normally, value is some derivative of what the asset earns. But if the asset is earning no income, how does its price continue to rise in the aggregate?

The last time we saw assets being priced with no reference to their underlying yield was in the dotcom boom. Remember that?

Property can only go up in Ireland David, we are "different" and "special" here.

In the years ahead, these ghost villages, like our famine villages, may stand testament to a great tragedy which, although predicted by concerned observers, was never fully appreciated until the morning the crops failed

Once the tax breaks run out in Carrick on Shannon it will be a strange place David, yes. More in the link above about the threat to our lemming like "banking system" and how we may end up paying tax to bail the stupid fools out

el diablo

bounty wrote:

I found this article very interesting..



el diablo, you like letterman?

I just picked a random avatar and it happened to be Letterman...:p

Shaptakster:

wow nice one! good to hear a positive story like yours

shaptakster

Hailee Fat Mushroom wrote:

but I find the whole housing boom almost scripted to ensure that no sooner had Ireland and its people seen unprecedented wealth creation, it was stolen away by the banks, the developers and the first waves of opportunist landlords.

I think there have been several waves of developers and opportunist landlords over the past 10 years.
I went of to Spain for years and had a great time there (wasting in the sun).
Meanwhile my mates were buying houses against my advice as there was going to be a crash.
The conversation going on in this thread goes on every year. We hope for a crash and it doesnt happen.

The boom cant last forever, but it sure is lasting a long time.

ronbyrne2005

shaptakster wrote:

I think there have been several waves of developers and opportunist landlords over the past 10 years.
I went of to Spain for years and had a great time there (wasting in the sun).
Meanwhile my mates were buying houses against my advice as there was going to be a crash.
The conversation going on in this thread goes on every year. We hope for a crash and it doesnt happen.

The boom cant last forever, but it sure is lasting a long time.

this time it's different. It made sense to buy ten or even 5 years ago, very few if any commentators were saying so. The banks changed the rules by offering longer terms 30/35 instead of traditional 20/25 which made it possible to borrow more than before, also the low low interest rates facilitated geven greater borrowing. Now we cant extend teh borrowing period much more if any and interest rates are rising higher and reducing amount people can borrow. Incomes also rose substantially over past ten years allowing us to borrow more but with globalisation speeding up theres little room for incomes to rise by as much in the next ten years. Add in the large increase in mothers working and dual income households which was a one off boost to house priuces and they cant rise by much from where they are now for at least the next ten years. They may fall by 50% in next few years before recovering to current prices in ten years time.

coolhandluke

Exactly,every factor that worked in favour of the boom for the last ten years are now working against it.

yes there have been threads about how possible house market crashes - a crash will always suit some people but I agree with ronbyrne2005 this time its different there is so many reasons why its unsustainable now
the past threads have never gained so much interest there is a definate change its in the air! whats this threads At 275,000 hits nearly - lol - nearly basing a case for a property crash on the number of hits on a website!

SimpleSam06

Deleted User wrote:

whats this threads At 275,000 hits nearly - lol - nearly basing a case for a property crash on the number of hits on a website!

I think thats 26,000 odd there, unless I'm going crosseyed, and most of that would be refreshes from a few hundred people. Still, its fairly significant when you think about ripple factors. The mainstream media newspapers are having an exponentially greater effect. Although you never know, there might be the odd reporter in our ranks! Oh yes and Bounty, we are definetely into the denial stage.

i meant over on askaboutmoney.com with the number of hits

even with the "refresh factor" the "ripple effect" is massive!
i agree with it being the denial stage. i think alot of property outside of dublin and its large commuter zones peaked last spring