Housing Bubble Bursting

SkepticOne

1. That as property prices fall, rents must shoot up to compensate.
2. Builders are going to cut back on production in order to protect the investments of those they have sold to.

The first is wrong because houses that can't be sold are being dumped on the rental market forcing down prices.

The second is wrong because it implies that builders are willing to enter the property speculation/investment business. Why should they when everyone else is getting out?

SimpleSam06

johnnyskeleton wrote: »

So? Most developed nations show a trend away from manufacturing / agriculture and towards services

That has only started happening in the last few decades, and it remains to be seen where the trend will lead.

johnnyskeleton wrote: »

In today's global economy, we do not need production to be located an area for that area to become rich. How many factories are in Manhattan, for example?

You're missing the point that most industries rely on cities like New York for their profits, just as much the cities rely on industry. The pharmas do not rely on Ireland, and could pretty much relocate on a whim.

johnnyskeleton wrote: »

Besides, for many sectors of the manufacturing industry in Ireland, it was the highly educated workforce that brought companies in, not cheap labour.

Some might argue that it was the low corporation tax.

johnnyskeleton wrote: »

Ultimately, your argument is flawed because it is focused on construction and manufacturing as the only real means of weath creation. It is not.

They do however form significant foundation stones of the Irish economy.

jmayo

johnnyskeleton wrote: »

So? Most developed nations show a trend away from manufacturing / agriculture and towards services

Ah those famous services.
I know it will be a problem for all devleoped nations and sooner or later there will be a backlash from ordinary workers seeing their jobs going east to make sure the corporations make more money from their capital.
BTW we won't even get services since we are uncompetitive in comparison to other states.

johnnyskeleton wrote: »

His point was that you won't be unemployed as a plasterer or blocklayer because people are constantly renovating/redecorating. During the boom, for example, it was very hard to get builders to build an extension to your house, as they could make more money putting up vast housing estates. When the jobs in these housing estates dry up, many builders will go back to these other areas.

At least you didn't mention all the infrastruture projects that will of course employ all the out of work builders.
Maybe they will start plumbing and plastering the motorways.

You must envisage a huge renovation/redecorating boom hitting us soon, because the house extension/renovation jobs will not employ half of the unemployed building workers.
Also if times are hard and people are cash strapped they will not be much renovating and redocrating going on. If I can barely pay the mortgage I am hardly going to be going out spending 10 grand on a new kitchen.

johnnyskeleton wrote: »

In today's global economy, we do not need production to be located an area for that area to become rich. How many factories are in Manhattan, for example? Besides, for many sectors of the manufacturing industry in Ireland, it was the highly educated workforce that brought companies in, not cheap labour. So pharmaceutical plants will remain here in the short - medium term.

Ultimately, your argument is flawed because it is focused on construction and manufacturing as the only real means of weath creation. It is not.

Will people stop comparing us to Japan and now blooming Manhattan.
Of course there isn't huge industrial complexes in the middle of New York but it is one of the World's centres for finance and commerce and it is a hell of a lot bigger than our little IFSC.
Manhattan became rich because the US as a whole became rich and grew into a superpower.
It was not done on building houses, relying on foreign multinationals to setup here for tax puroposes or waiting for mythical service industries to arrive.

Yes my argument is limited to comparing industrial production with construction but I reckon that is a useful measure to how crazily reliant the economy has become on a non-exporting boom industry.

If you think that the multinationals e.g Intel, Dell, HP, Abott, Pfizer, Johnson, Motorola, Microsoft set up here just because our workforce were so educated you mustn't have heard of the corporation tax incentives, the IDA grants, the fact we provided access to EU markets and the fact we were cheaper educated English speaking employees than some of the home countries.
Most of these advantages have not gone so where does that leave us?

sudden

prices will continue to drop for all the above reasons -but there is one other factor that everyone seems to overlook that will also put downward price pressure on houses. and that is the new energy rating system that all houses will have to have in the future.
lets face it-most of the newbuilds of the past boom period were thrown up quickly and with little thought to being energy effecient.
without a good energy rating i would expect these properties to be worth less than a comparable sized house with a good rating and as more and more of the future newbuilds should conform to the new ratings the older houses will fall further behind in price.
just a thought.
sudden.

gally74

i reckon things are going to smooth out,

even if house prices just wait static, they become more affordable,

the real people making the money are the land owners, sure builder make profits and some make realy good profits, but that what a business is called,

you dont see anyone giving out about oil companies, eben thou their profit margins may be way higher than builders,

there is a glut to be worked through the system and untill it comes down things will be sluggish, for a buyer with a bit of kop on thou, there are some great deals out there.

faceman

sudden wrote: »

prices will continue to drop for all the above reasons -but there is one other factor that everyone seems to overlook that will also put downward price pressure on houses. and that is the new energy rating system that all houses will have to have in the future.
lets face it-most of the newbuilds of the past boom period were thrown up quickly and with little thought to being energy effecient.
without a good energy rating i would expect these properties to be worth less than a comparable sized house with a good rating and as more and more of the future newbuilds should conform to the new ratings the older houses will fall further behind in price.
just a thought.
sudden.

even the experts on both side of the fence can offer no evidence to suggest what impact, if any, energy ratings will have on the price of a house. My hope would be that making homes more energy efficient does not give reason to inflate the price!

faceman

I shouldnt really post this as i dont have the stats to hand but they are available but i will post anyway, maybe one of you has some stats.

there are a few interesting stats that were discussed recently by some economists (and unfortunately) recruitment consultants. It seems that although we are in a slow down period 2 very interesting points are worth noting.

1. The average monthly job losses we are currently experiencing is no higher than that during the boom times! I was quite surprised at this. (there are figures but i dont have them to hand)
2. Despite the job losses we have seen in the last year, there has not been an increase in the individuals signing on in line with the job losses. (Again sorry i dont have the figures to hand they are available)

now before you jump the gun and hit the aul reply button. Im not trying to suggest that there is no slowdown or anything of the sort. But what I am asking is, is it possible the media have played it up more so than it is (so far) and is it possible the government can manage the slowdown better than they did in previous decades? (which was ironically before many of us were in school!)

ionapaul

Definitely the media has seized on an economic slowdown and the turning of the housing market in an effort to sell more papers - no-one can deny this and it is to be expected, they sold papers during the boom years with headlines telling us how good we had it! However, I believe we really are in for some tough times, and I think anyone who has looked at the world and Irish situation and thought about how it would play out can see reasons for feeling the same way. I don't think the big construction job losses will start to bite until Q2 2008 and the associated supplier / services job losses will snowball until later in the year. Coupled with the fact that the US is now much more than 50% heading for recession IMHO (Merril Lynch said yesterday that December was the 1st recession month! 1st big company to come out and say it) and if this is the case we will definitely suffer badly in job losses outside of the construction sector, we are at the cusp of a bad few years, potentially very bad for many of us.

I personally think a big decline in house prices (which I truly believe will happen and is unavoidable in fact) will be good in the long-term for Ireland, but a recession will be horrible - I'm looking for work and will be the 'new guy' for the next few years wherever I end up, a 'last in first out' situation if lay-offs need to be made won't help me will it!

Gurgle

jmayo wrote: »

I seem to remember from one of your old posts you reckon we have a stable economy and there is nothing to worry about ?

Yep, still think that.

jmayo wrote: »

Optimisitic seen as there are more people employed in construction than in industrial production.

No, there aren't.

Besides, the loss of jobs in construction will supply jobs to production. Unskilled people can press buttons as well as carry blocks.

jmayo wrote: »

Yeah we are going to start exporting those unused housing units soon.
Afterall some of our apartments now arrive on the back of a truck so we might as well just send them to some other country.

Funny?
Why?

jmayo wrote: »

Oh yes when I am an unemployed plasterer or blocklayer I will have loads of disposable income to get an interior designer to redecorate my negative equity property for me :rolleyes:

The 87% of people who are employed outside of the construction industry will still want a new sofa/kitchen/garden shed every decade or so.

jmayo wrote: »

Yep those multinationals are going to continue production in Ireland and pay considerably more to their employees, the state monopolies and make much less of a margin on their products :rolleyes:
Why won't they supply our plants' markets from the new plant in China or the one in Poland at half the production costs ?

1) China has much lower production costs for goods which are heavy on the manual work, lower levels of automation. When you get to high-tech electronics, (like CPUs as a random example) the labour expenses at production are relatively small compared to the cost/depreciation of manufacturing & testing equipment and the R&D costs.
2) Importing goods from China carries an extra duty which reduces the cost benefit of getting them made cheaper over there.
3) Shipping raw materials is cheap. Shipping finished goods is much more expensive.
4) You think a factory in China is going to have massive surplus production after supplying the Chinese market?
Do you actually know anything about China?

jmayo wrote: »

Keep the old head in the sand and clutch at straws.
BTW did you grow up during the eighties or was it the nineties ?

I'm not sure why you think I'm clutching at straws.

I've been saying that ^^ for years, and I've had the experience over the last year of proving to myself that I was right

I was made redundant by an electronics manufacturer consolidating worldwide production into its facility in Asia & I had no trouble finding a new job with an electronics R&D company just moved to Ireland

Incidentally, that manufacturer has subsequently lost a huge amount of business due to the lower quality produced in its new super-factory compared to what we were making here.

I like to think that I haven't grown up yet, though my kids may say otherwise.

gurramok

faceman wrote: »

I shouldnt really post this as i dont have the stats to hand but they are available but i will post anyway, maybe one of you has some stats.

there are a few interesting stats that were discussed recently by some economists (and unfortunately) recruitment consultants. It seems that although we are in a slow down period 2 very interesting points are worth noting.

1. The average monthly job losses we are currently experiencing is no higher than that during the boom times! I was quite surprised at this. (there are figures but i dont have them to hand)
2. Despite the job losses we have seen in the last year, there has not been an increase in the individuals signing on in line with the job losses. (Again sorry i dont have the figures to hand they are available)

now before you jump the gun and hit the aul reply button. Im not trying to suggest that there is no slowdown or anything of the sort. But what I am asking is, is it possible the media have played it up more so than it is (so far) and is it possible the government can manage the slowdown better than they did in previous decades? (which was ironically before many of us were in school!)

Had to hit the reply button

To sum up, most jobs been lost are full time and most jobs been created are low wage part time(as highlighted by RTE in its news bulletins)

The full time jobs that were created in last couple of yrs for example were mostly either public sector(health, education), construction, retail(low wage part time stuff) or tourism. (a look at finfacts will give stats)
The highly valuable decently paid full time jobs were in the small minority.

It doesn't take a genius to figure out that once the public purse strings are tight and losing money(starting now), public sector jobs will either be stagnant or start cutting back.
As construction jobs are trimmed(over staffed big time), whats left are retail, tourism and the small number of good valuable jobs.

Throw into that the 80,000 young males with seco only education who are in danger of been let go in the construction downturn, the only thing that will help the dole numbers is that safety valve called emigration. Otherwise, retraining in education will cost a fortune.

Hence the 'worry' about the economy. Of course it would be a different story if majority of jobs been created were full time decent pay private sector ones but they are not hence thats the scary part.

SimpleSam06

Gurgle wrote: »

1) China has much lower production costs for goods which are heavy on the manual work, lower levels of automation. When you get to high-tech electronics, (like CPUs as a random example) the labour expenses at production are relatively small compared to the cost/depreciation of manufacturing & testing equipment and the R&D costs.

Most of your computer is made in China. And not a whole lot of R&D is done in Ireland, either.

Gurgle wrote: »

2) Importing goods from China carries an extra duty which reduces the cost benefit of getting them made cheaper over there.

Only clothes and shoes.

Gurgle wrote: »

3) Shipping raw materials is cheap. Shipping finished goods is much more expensive.

Shipping anything is basically free if you do it in enough bulk. The main costs in shipping are duties and tarriffs.

Gurgle wrote: »

4) You think a factory in China is going to have massive surplus production after supplying the Chinese market?

What Chinese market? 80% of the population is still living at subsistence levels and the vast bulk of Chinese manufacture is exported. Thats why their economy is doing so well. They seem to have grasped what we have missed - you can't keep your economy running by selling things to each other, you need to sell to other countries.

Gurgle wrote: »

Do you actually know anything about China?

A good deal more than you, methinks.

jesus_thats_gre

Gurgle wrote: »

Not true.

http://www.cso.ie/statistics/empandunempilo.htm

Well, they haven't noticed in the CSO.

Just in case I am missing something here. You are using this graph to prove that there is not an over dependence on employment in the construction industry compared to other sectors in recent years?

The reason I am somewhat confused is this. Total number employment in the country rose from 1494.0 in mid 1998 to 2095.4 in mid 2007. A rise of roughly 40%..

In the same period, those employed in the construction industry grew from 126.1 to 280.3. A rise of 120% odd. The only other sectors to experience anywher near that type of growth are the health and the finance sectors.

The figues certainly don't disprove his statment.. If anything, they back it up. Unless I am really missing something in your post.

martian1980

Gurgle wrote: »

Besides, the loss of jobs in construction will supply jobs to production. Unskilled people can press buttons as well as carry blocks.

...

1) China has much lower production costs for goods which are heavy on the manual work, lower levels of automation. When you get to high-tech electronics, (like CPUs as a random example) the labour expenses at production are relatively small compared to the cost/depreciation of manufacturing & testing equipment and the R&D costs.
2) Importing goods from China carries an extra duty which reduces the cost benefit of getting them made cheaper over there.
3) Shipping raw materials is cheap. Shipping finished goods is much more expensive.
4) You think a factory in China is going to have massive surplus production after supplying the Chinese market?
Do you actually know anything about China?

Girgle, do you really think that the people who lose jobs in construction will file neatly into all these apparent vacancies in production? In its latest Quarterly Labour Market Commentary, FÁS says the recent level of job creation is not sustainable in the short to medium term, and that employment in the construction sector will fall by 25,000 next year. Are there really 25,000 (pretty much unskilled) vacancies in production? Your summary of China demonstrates your general level of knowledge about the Chinese economy. All those Chinese factories that DON'T have massive surplus production and simply can't supply any market other than the domestic one?! hmmm....

Do-more

I was on a training course earlier in the week and was chatting to two guys in the furniture business. One works for a company with shops in Dublin and said that it had been their worst Christmas in years and the January sales weren't up to much either. He went so far as to say that their cashflow was extremely tight. The other works for a furniture wholesaler and he said that it was the same picture all around the country.

With no "feel good factor" in the economy at present it certainly appears that many people have reigned in their discretionary spending. With nothing on the horizon to change that situation, it's not rocket science to figure that if retailers are having cashflow problems, they will be looking to cut costs where they can. That normally means job cuts, seeking rent reviews (downwards) etc.

It's a vicious circle, as individuals and company's tighten up their spending the problem knocks on further and further throughout the economy.

I'd expect to see job losses in the retail sector coming through in February and more so in March as companies take stock of the situation after the sales are over...

DublinDilbert

Do-more wrote: »

He went so far as to say that their cashflow was extremely tight. The other works for a furniture wholesaler and he said that it was the same picture all around the country.

This is one of the key things about the current global credit crunch, many companies rely on having cheap credit available to make a profit, eg buy stock coming up to Christmas, then sell it on, pay the bank back in Jan. Businesses are finding it just as hard as people are to get loans from the banks.

This is one of the points i make to people, the 90000 houses built last year need 90000 sofas, they also need 90000 kitchen tables etc, the list goes on... yet the people in the furniture business would not see them selves as part of the construction industry, but a large part of their business is as a result of it.

johnnyskeleton

SimpleSam06 wrote: »

That has only started happening in the last few decades, and it remains to be seen where the trend will lead.

Hopefully into Ireland becoming a developed nation and not just a pretender.

SimpleSam06 wrote:

You're missing the point that most industries rely on cities like New York for their profits, just as much the cities rely on industry. The pharmas do not rely on Ireland, and could pretty much relocate on a whim.

My point was that there are other ways of making money than manufacturing, even on a global scale. The pharmas will stay provided that the Irish economy provides what they want.

SimpleSam06 wrote:

Some might argue that it was the low corporation tax.

Tis a fair point, but information driven industry will not relocate based on cheaper labour / tax incentives alone. It needs a firm base of educated workers.

SimpleSam06 wrote:

They do however form significant foundation stones of the Irish economy.

We can loose on the manufacturing if we gain on the services.

jmayo wrote:

Most of these advantages have not gone so where does that leave us?

I don't think Ireland has become so uncompetitve that these compaines will relocate. If we were, they would be gone. I suppose you could look at it like this: during the boom it was about attracting these companies. Now, it is more about keeping them and fostering indigenous companies to step into the breach. As an economy, we should have started this many years ago, but it's not too late.

Do-more

Gurgle wrote: »

Incidentally, that manufacturer has subsequently lost a huge amount of business due to the lower quality produced in its new super-factory compared to what we were making here.

I was in Sweden over the New Year an was told of a large electronics company which had relocated production from Sweden to Poland about 4 years ago and they are now in the process of relocating it back to Sweden because of continuous production/quality problems...;)

SimpleSam06

johnnyskeleton wrote: »

Hopefully into Ireland becoming a developed nation and not just a pretender.

We need to seriously shake up the political landscape in this country for that to happen.

johnnyskeleton wrote: »

Now, it is more about keeping them and fostering indigenous companies to step into the breach.

100% agree, but as I mentioned above, its not going to happen with gimme-38k-or-I-knock-half-the-drivers-off-the-road Bertie at the wheel.

Gurgle

SimpleSam06 wrote: »

Most of your computer is made in China.

Really?
What parts?

SimpleSam06 wrote: »

And not a whole lot of R&D is done in Ireland, either.

Not yet, but thankfully we are at last getting some.

SimpleSam06 wrote: »

Only clothes and shoes.

Check your facts.

SimpleSam06 wrote: »

Shipping anything is basically free if you do it in enough bulk. The main costs in shipping are duties and tarriffs.

^^ lol

SimpleSam06 wrote: »

What Chinese market? 80% of the population is still living at subsistence levels and the vast bulk of Chinese manufacture is exported.

Ah, this is the best bit.
I love when people produce 'facts' straight out of their heads, without even bothering to check.
https://www.cia.gov/library/publications/the-world-factbook/geos/ch.html
Some relevant points, as its probably too much trouble to actually click on the link:

Population below poverty line: 10% (2004 est.) (Compared to Ireland: 10% 1997 est.)
Literacy: total population: 90.9%
male: 95.1%
female: 86.5% (2000 census)
GDP (purchasing power parity): $10.21 trillion (2006 est.)
Exports: $969.7 billion f.o.b. (2006 est.)
Imports: $751.9 billion f.o.b. (2006 est.)

SimpleSam06 wrote: »

Originally Posted by Gurgle
Do you actually know anything about China?

A good deal more than you, methinks.

Evidently!

The_Conductor

Back on track guys. No more posting attacking each other. Feel free to attack a post, but not the poster. China's economic statistics, while interesting, are only relevant to this thread in an obtuse manner. Back on track guys.

jmayo

Gurgle wrote: »

Yep, still think that.
No, there aren't.

Besides, the loss of jobs in construction will supply jobs to production. Unskilled people can press buttons as well as carry blocks.

So we are moving away from production and yet there will be production jobs for all the unemployed unskilled/low skilled laid off construction workers.

Gurgle wrote: »

The 87% of people who are employed outside of the construction industry will still want a new sofa/kitchen/garden shed every decade or so.

You would need to renovate or refurnish nearly every third house to keep all these businesses afloat. Added to that there is no way in hell that half of the building workers could find work renovating old houses.

Gurgle wrote: »

1) China has much lower production costs for goods which are heavy on the manual work, lower levels of automation. When you get to high-tech electronics, (like CPUs as a random example) the labour expenses at production are relatively small compared to the cost/depreciation of manufacturing & testing equipment and the R&D costs.
2) Importing goods from China carries an extra duty which reduces the cost benefit of getting them made cheaper over there.
3) Shipping raw materials is cheap. Shipping finished goods is much more expensive.
4) You think a factory in China is going to have massive surplus production after supplying the Chinese market?
Do you actually know anything about China?

Actually I could ask you the same thing :rolleyes:
As other poster pointed out there isn't this great Chinese market gobbling up all PCs, Printers, TVs, HiFis etc.
Yes it is growing but thanks to the low productioon costs most people do not have the money. Most of the production output is destined for the Western World.
Most new electronics, toys, etc are now assembled in China, often the components are also produced there.
The cost of producing and bulk shipping from China is less than the cost of producing and shipping from closer to home.

The biggest chip manufacturer of course you allude to is Intel who are investing heavily in the far east and not in Ireland AFAIK.
Do you seriously think they are not going to move production?
How many more high tech R&D companies do we really have ?
Even companies that were using skilled high tech staff have left, Motorola being a good example.

Gurgle wrote: »

I'm not sure why you think I'm clutching at straws.

I've been saying that ^^ for years, and I've had the experience over the last year of proving to myself that I was right

I was made redundant by an electronics manufacturer consolidating worldwide production into its facility in Asia & I had no trouble finding a new job with an electronics R&D company just moved to Ireland

Just becasue you were right during the most successful phase in Ireland's real Tiger economy upto 2001 and you were right during the great housing boom from 2002 does not mean that you will be right in the next ten years.

EDIT: Sorry SMccarrick just spotted your post...
The economy and the fact that it is shaky (toomuch dependenton housing) will have a huge bearing I reckon on how low the market will go and how fast it gets there.
To make matters worse it looks like we have a major worldwide recession on the way and it is way outside our control.

jmayo

Gurgle wrote: »

Yep, still think that.
No, there aren't.

Besides, the loss of jobs in construction will supply jobs to production. Unskilled people can press buttons as well as carry blocks.

So we are moving away from production, we are losingjobs in construction and yet there will be production jobs for all the unemployed unskilled/low skilled laid off construction workers.

Gurgle wrote: »

The 87% of people who are employed outside of the construction industry will still want a new sofa/kitchen/garden shed every decade or so.

You would need to renovate or refurnish nearly every third house to keep all these businesses afloat. Added to that there is no way in hell that halfof the building working could find work renovating old houses.

Gurgle wrote: »

1) China has much lower production costs for goods which are heavy on the manual work, lower levels of automation. When you get to high-tech electronics, (like CPUs as a random example) the labour expenses at production are relatively small compared to the cost/depreciation of manufacturing & testing equipment and the R&D costs.
2) Importing goods from China carries an extra duty which reduces the cost benefit of getting them made cheaper over there.
3) Shipping raw materials is cheap. Shipping finished goods is much more expensive.
4) You think a factory in China is going to have massive surplus production after supplying the Chinese market?
Do you actually know anything about China?

Actually I could ask you the same thing :rolleyes:
As other poster pointed out there isn't this great Chinese market gobbling up all PCs, Printers, TVs, HiFis etc.
Yes it is growing but thanks to the low productioon costs most people do not have the money. Most of the production outputis destined for the Western World.
Most new electronics, toys, etc are now assembled in China, often the components are also produced there.
The cost of producing and bulk shipping from China is less than the cost of producing and shipping from closer to home.

The biggest chip manufacturer of course you allude to is Intel who are investing heavily in the far east and not in Ireland AFAIK.
Do you seriously think they are not going to move production?
How many more high tech R&D companies do we really have ?
Even companies that were using skilled high tech staff have left, Motorola being a good example.

Gurgle wrote: »

I'm not sure why you think I'm clutching at straws.

I've been saying that ^^ for years, and I've had the experience over the last year of proving to myself that I was right

I was made redundant by an electronics manufacturer consolidating worldwide production into its facility in Asia & I had no trouble finding a new job with an electronics R&D company just moved to Ireland

Just becasue you were right during the most successful phase in Ireland's real Tiger economy upto 2001 and you were right during the great housing boom from 2002 does not mean that you will be right in the next ten years.

SimpleSam06

smccarrick wrote: »

Back on track guys. No more posting attacking each other. Feel free to attack a post, but not the poster. China's economic statistics, while interesting, are only relevant to this thread in an obtuse manner. Back on track guys.

As somebody who employs Chinese people working in China, I'd just like to say...

Alright so.

The_Conductor

I'm serious guys- thats it, no more Chinese stuff, and no more tearing virtual strips out of each other. Consider this a one and only warning.

Gurgle

Just going to respond to the point that was on topic:

jmayo wrote: »

Originally Posted by Gurgle
The 87% of people who are employed outside of the construction industry will still want a new sofa/kitchen/garden shed every decade or so.

You would need to renovate or refurnish nearly every third house to keep all these businesses afloat. Added to that there is no way in hell that halfof the building working could find work renovating old houses.

Any calculations to back up 'every third house'?

As of 2006, there were 1,469,521 private households in the state.
http://www.cso.ie/statistics/numprivhseholds.htm

Assuming each house is refurnished/redecorated & repainted every 10 years (as in the house would be re-done bit by bit over a decade), thats 146,952 households refurnished per year.

That translates into a lot of money for those businesses.

Besides, when a construction company is tiling 100 kitchens with the same tiles, do they take the van down to Right Price Tiles and load it up?

I'm guessing they would be importing the tiles in bulk.
Likewise for everything from paint to lightswitches.

faceman

smccarrick wrote: »

China's economic statistics, while interesting, are only relevant to this thread in an obtuse manner. Back on track guys.

well said.

SimpleSam06

Whatever about the finer details, I think everyone can agree that the housing collapse is going to have serious knock on effects of one sort or another.

We are already seeing the first rumblings of it in the Indo today, with public sector employees, mostly (but not confined to) nurses, guards and teachers raising a stink about pay freezes and people not being hired to take on those who retire.

This to my mind is a direct result of the lowered tax takes from housing sales, making the bulky public sector plus pensions (estimated to be worth 12 to 13% of the wage bill) unsupportable, another long predicted effect of the collapse.

Will the government face them down or back off and give them what they want? Either way we're looking at real trouble in the near future, strikes or raised income taxes.

johnnyskeleton

SimpleSam06 wrote: »

Will the government face them down or back off and give them what they want? Either way we're looking at real trouble in the near future, strikes or raised income taxes.

Yes, but it's glory days for debt collectors, company liquidators and second-hand business-furniture dealers.

gurramok

Public sector unions cannot win this one i feel ...they are overpaid by alot already.

If the govt gives in, the budget deficit will get alot worse by end of '08, hell of alot more than 3-4bn forecasted hence the country will go broke!

If they go on strike, they won't get any sympathy as the govt and analysts can peddle the line...'the budget deficit will be 3-4bn out by end of '08, the country simply cannot afford increases well above the rate of inflation(as the unions want)'
Plus strikes anywhere emit negative sentiment to consumers, that ain't good!

Of course the govt can do the trick of awarding an increase but at the same time get it back by axing alot of public sector staff where overstaffing occurs.
Can't wait till the day non-nationals can get jobs en masse in the public sector other than health nurses already, the country would save lottery style fortunes!

Hence all of this of 'less money around' and rising unemployment will affect consumer spending and that includes houses, there is no denying that.

miju

gurramok wrote: »

Can't wait till the day non-nationals can get jobs en masse in the public sector other than health nurses already, the country would save lottery style fortunes!

not going to happen anytime soon. there is about to be an embargo put in place on new recruitment unless absolutely essential and public service is about to start on a natural "wastage" policy ;););)