Housing Bubble Bursting

gurramok

Jayzus, i've been away for a while and someone posts they got 2 offers on a gaff at about 250k and some bulls think its party time.
One question, are those offers from buyers who have to sell their own houses first(which any homeowner can do on assumptions that they will always sell) or more importantly from chain-free buyers.
Last time i checked, Meath was flooded with hundreds of gaffs for sale for many months.

I have some anecdotal from a friend of a friend, 2 bed house in Lusk has been on the market since Nov. They got one buyer who offered 10% off price and the sellers have recently found out that the buyers have pulled out.

Why one would ask, the flippin buyer was in a chain and could not sell their own place first.

beeno67, if you had bothered searching this thread on the TSB index, you'd had learned that it is seriously out of date and is NOT based on selling prices (we dont have this info in Ireland).
I suggest you go browse daft/myhome and you'll see lots of asking prices are at 2005 levels, not all...but most, thats the best anecdotal we have on whats happening.(plus the recorded asking price drops from IPW)

Gurgle

beeno67 wrote: »

Drops in the asking price of a property is a pretty meaningless measurement. It is drops in selling price that counts. Noteb sold his property for more or less the same price he bought it in 2006. This fits with most analysts findings that property prices are at 2006 levels. No reason to get excited.

Shhhh, you can't say that in this thread, you'll get lynched.

Or if you're really unlucky the old MS Excel 'Vacancy % graph' will be dragged from the pits of hell again.

SimpleSam06

Gurgle wrote: »

Shhhh, you can't say that in this thread, you'll get lynched.

Or if you're really unlucky the old MS Excel 'Vacancy % graph' will be dragged from the pits of hell again.

Sure not to worry Gurgle, didn't property prices bottom out in January? Nothing to worry about, the soft landing is upon us.

iguana

gurramok wrote: »

Jayzus, i've been away for a while and someone posts they got 2 offers on a gaff at about 250k and some bulls think its party time.

He didn't exactly just come on here. He had his own thread about his situation and was sent here by one of the bulls once he got his offers.

http://www.boards.ie/vbulletin/showthread.php?t=2055270515

Gurgle

iguana wrote: »

He didn't exactly just come on here. He had his own thread about his situation and was sent here by one of the bulls once he got his offers.

I thought it was perfectly appropiate given the amount of 'data' in this thread that is pulled, quite literally, out of bears' arses.

SimpleSam06 wrote:

Sure not to worry Gurgle, didn't property prices bottom out in January?

Did they?
Says who?

Heres some of your own gems from among your 239 contributions to this thread:
January '07

SimpleSam06 wrote:

20% is more of a total collapse than a crash!

July '07

SimpleSam06 wrote:

I feel the crash will bottom out somewhere around the 50% of current prices mark or somewhere just below

January '08

SimpleSam06 wrote:

I'd have said about 60% overpriced myself

Maybe you could do me a favour and keep your smug mis-quoting fingers off my posts until at least one of your many and varied guesses comes true?

The_Conductor

Guys- calm down.

S./

beeno67

gurramok wrote: »

beeno67, if you had bothered searching this thread on the TSB index, you'd had learned that it is seriously out of date and is NOT based on selling prices (we dont have this info in Ireland).
I suggest you go browse daft/myhome and you'll see lots of asking prices are at 2005 levels, not all...but most, thats the best anecdotal we have on whats happening.(plus the recorded asking price drops from IPW)

So what if TSB index is not based on selling prices. If you are comparing it from one year to the next then that doesn't matter.
Also if you had bothered to read my post you would have seen me say drops in asking prices are meaningless. For example I was going to sell my car for 100 million euro but I'll letyou have it for a hundren thousand. Thats a 99.9% price drop. Help the bottom is falling out of the used car market.
The world is not ending. Property prices are not collapsing. Yes there are falls. Some will fall more than others. At the end of the day very few people will be seriously affected. Unless you are an invester silly enough to buy a house in last 3 years. Then again that's Darwinism for you.

beeno67

Gurgle wrote: »

Shhhh, you can't say that in this thread, you'll get lynched.

Or if you're really unlucky the old MS Excel 'Vacancy % graph' will be dragged from the pits of hell again.

You have to laugh though

DublinDilbert

beeno67 wrote: »

At the end of the day very few people will be seriously affected.

Tell that to all the people trying to sell their apartments cause they want to move "up" the property ladder...

Glenbhoy

beeno67 wrote: »

So what if TSB index is not based on selling prices. If you are comparing it from one year to the next then that doesn't matter.
Also if you had bothered to read my post you would have seen me say drops in asking prices are meaningless. For example I was going to sell my car for 100 million euro but I'll letyou have it for a hundren thousand. Thats a 99.9% price drop. Help the bottom is falling out of the used car market.
The world is not ending. Property prices are not collapsing. Yes there are falls. Some will fall more than others. At the end of the day very few people will be seriously affected. Unless you are an invester silly enough to buy a house in last 3 years. Then again that's Darwinism for you.

Asking prices drops are not as meaningless as you make out - asking prices are set by the vendor, normally using information they have gleaned from neighbours regarding recent sales and almost always set as realistically as possible by the estate agents (who will have even more information on local sales) who are always anxious for a quick sale.
The fact that the TSB index isn't based on selling prices means that it's not accurate.
As for only a small amount of people being affected by any crash in house prices, I don't agree, I think it's going to be huge. Who won't be affected??

SkepticOne

beeno67 wrote: »

For example I was going to sell my car for 100 million euro but I'll letyou have it for a hundren thousand. Thats a 99.9% price drop. Help the bottom is falling out of the used car market.

Unfortunately it is the reverse with house prices in the current market. Despite drops published on the recent Daft survey of asking prices (you are correct these are meaningless) we can be pretty sure that falls in selling prices are much greater.

During the upward phase of the cycle the situation was reversed and asking prices were lower than selling prices since people tended to bid up property. The selling price was merely the low starting point for negotiations and sellers could reasonably expect 10% to 15% above this.

In the downward phase we are in now, many sellers are lucky to get any bits at all, houses are stagnating on the market and inventory is building up. In this phase the selling price represents the optimistic hope of the seller and buyers will often offer 10% or 15% lower.

The ESRI/PTSB survey is based on subjective valuations done by the PTSB and we can reasonably assume that it biased on the high side. But even this puts us back at early 2006. Given its bias and the lag I mentioned in an earlier post, we can reasonably conclude that were at mid-2005 levels although some would say early 2005.

beeno67

Glenbhoy wrote: »

As for only a small amount of people being affected by any crash in house prices, I don't agree, I think it's going to be huge. Who won't be affected??

People not selling for the most part will not be affected (I accept if they were on fixed rates and they are now ending they may have difficulty getting a good rate on their mortgage, but this is a small amount. ) Anyone moving up the property ladder will benefit as the properrty they are moving to will ahve dropped by more than the one they are selling. Obviously those moving down the property ladder who bought their house in the last 2 years with a 92% mortgage or more will loose out. But like I said these are a small number.
As for asking prices. They are usually decided by looking at what was sold in the area recently and adding 10% or so. Dropping the asking price does not mean the selling price has fallen

SkepticOne

beeno67 wrote: »

As for asking prices. They are usually decided by looking at what was sold in the area recently and adding 10% or so.

That probably explains why there's such a huge build up of houses on the market at present.

punchestown

beeno67 wrote: »

. ) Anyone moving up the property ladder will benefit as the properrty they are moving to will ahve dropped by more than the one they are selling.

Can you please explain to me how a 1 bedroom in Balbriggan will not fall by a greater percentage than a 2/3 bedroomed closer to the Dublin city centre?

SkepticOne

beeno67 wrote: »

Anyone moving up the property ladder will benefit as the properrty they are moving to will ahve dropped by more than the one they are selling.

This is true if everything drops by the same percentage. Then the higher valued properties will drop by more in absolute terms thus benefiting the trader upper.

However I think it was recently estimated that there's about 70,000 in negative equity at the moment, probably more now with prices back to 2005 levels.

punchestown

The Bank of Scotland (Ireland) increases of up to 0.55pc are more than the equivalent of two rates rises from the European Central Bank.
Bank of Scotland yesterday informed brokers that it would now charge a residential customer seeking a tracker rate mortgage 5.5pc -- a hike of .55pc. Previously, the bank's cheapest tracker was 4.95pc.
The bank told brokers: "New interest rates will come into effect for all new and existing applications within the pipeline."
Mortgage brokers were dismayed that loan offers that they have made to customers in the past few days, the so-called pipeline, would not be honoured unless the offer had been accepted in writing by Bank of Scotland by 10am yesterday morning.
Simply Mortgages' Peter Bastable said: "A customer who thinks on Monday they will get a certain rate are told on Tuesday, 'Tough'. That is unprecedented."
The bank is also cutting the commission for brokers from 1.1pc to 0.7pc.
Bank of Scotland has also decided to scrap all 100pc mortgages, with the most the bank will now lend 90pc of the value of the property.
When it comes to apartments, the bank will loan a maximum of 80pc of the value, with the same percentage applying to buy-to-let properties.

Apartments will be the most serious sufferer price wise in the years to come

SimpleSam06

Gurgle wrote: »

I thought it was perfectly appropiate given the amount of 'data' in this thread that is pulled, quite literally, out of bears' arses.

As always, if you think data is wrong, point it out and back it up.

Gurgle wrote: »

Did they?
Says who?

Says you actually...

Gurgle wrote: »

Add the fact that we are now expecting interest rates to be cut this year. A few months ago the doom & gloomers were telling us they were going to keep going up for years.

My guess is that the overshoot is done and prices are likely to level off now at somewhere around 10% below the peak.
The average price peaked at around €310k, I'd expect to see it around ~€280k over the next couple of years.

Told you I had it bookmarked.

Gurgle wrote: »

Heres some of your own gems from among your 239 contributions to this thread:

In fairness the last one was for a specific situation, the first one was responding to another comment and is still true (20% drops from that point would have been a crash) and both were taken completely out of context. Maybe thats why you didn't link them. The middle one (50%) represents approximately where I think the cards will fall at the end of the day, and continues to represent my considered opinion.

Gurgle wrote: »

Maybe you could do me a favour and keep your smug mis-quoting fingers off my posts until at least one of your many and varied guesses comes true?

Eh the only time I quoted you on the issue was in this post, so I'm not sure how there was a misquote of any sort.

martian1980

I posted the bank of scotland ireland news this morning

beeno67

SkepticOne wrote: »

This is true if everything drops by the same percentage. Then the higher valued properties will drop by more in absolute terms thus benefiting the trader upper.

However I think it was recently estimated that there's about 70,000 in negative equity at the moment, probably more now with prices back to 2005 levels.

Now Now ScepticOne. You know we are not back at 2005 levels despite the spin you were trying to put on it saying figures now are unreliable but they were reliable 2 years ago.
I have not heard of the figure of 70,000 in negative equity but if we assume it is true, how many of them are actually trying to sell?

SkepticOne

beeno67 wrote: »

Now Now ScepticOne. You know we are not back at 2005 levels despite the spin you were trying to put on it saying figures now are unreliable but they were reliable 2 years ago.

See my post earlier outlining my reasoning. The figures were always unreliable but with the correct interpretation they have some use. The ESRI figures taken at face value show we are back to the levels of just over two years ago, January or February 2006. But face value is not how most people take them.

I have not heard of the figure of 70,000 in negative equity but if we assume it is true, how many of them are actually trying to sell?

I don't believe that figure is available.

DublinDilbert

Lots of posting on this thread today....

What no one has commented on is BOS increasing its rates by 0.55%.... that's an increase of €550 / 100K borrowed, or for say a €300K mortgage (a conservative figure these days) equates to an increase of €1650!!

That's not far off what some people are paying per month, so in effect these people have to make up an extra months payment, but their boss isn't going to give them an extra months salary to cover it!

BigglesMcGee

DublinDilbert wrote: »

Lots of posting on this thread today....

What no one has commented on is BOS increasing its rates by 0.55%.... that's an increase of €550 / 100K borrowed, or for say a €300K mortgage (a conservative figure these days) equates to an increase of €1650!!

That's not far off what some people are paying per month, so in effect these people have to make up an extra months payment, but their boss isn't going to give them an extra months salary to cover it!

But Brian Cowen already gave it to them

Hey Brian, How about a few quid for me?

patrickolee

DublinDilbert wrote: »

Lots of posting on this thread today....

What no one has commented on is BOS increasing its rates by 0.55%.... that's an increase of €550 / 100K borrowed, or for say a €300K mortgage (a conservative figure these days) equates to an increase of €1650!!

That's not far off what some people are paying per month, so in effect these people have to make up an extra months payment, but their boss isn't going to give them an extra months salary to cover it!

Hmmm, I think these are the figures Gurgle was talking about earlier, distinct whiff of sh1te off them! From where did you get them? Even with a 40 year term I can't get near those increases. Maybe you can enlighten me as to what magic figures you plugged into your online mortgage calculator?

Another thing which perhaps you missed was that the increase does not apply to existing mortgage holders, so no-one will have to find 'an extra months salary'. Ah the bubble thread.... the 'after hours' of 'accom & property'

DJDC

I think someone mentioned that ECB interest rates are due to drop later in the year.That view took a hit today when the stats office released surprisingly higher inflationary pressures than people thought:

http://www.bloomberg.com/apps/news?pid=20601085&sid=atE73qPz56mU&refer=europe

The markets responded by pushing the euro higher against other major currencies and future swaps show traders also betted heavily against any ECB rate drop this year. Irish banks have recently seen their CDS spreads grow increasingly large as global investors realise they are over leveraged to property based development.This has the knock-on effect of the banks trying to deleverage their balance sheets from commerical property lending. In teh process, the whole lending process gets messed around and banks dont want to give out credit. End process:mortgages become harder to obtain, existing variable rates rise etc.

The growth in property prices has been caused by cheap, easily available credit. Expensive, hard to obtain credit will affect the market more than people like to think.Theres too many vested interests all trying to bouy up the market.All the national newspapers get huge advertising revenues from property, the govt takes in huge tax dues. People need to stand back, look at the hard facts and make their own judgements.

gazzer

I put my house on the market last month and got an offer for the asking price. Booking deposit has been paid and at the moment my solcitor is waiting for the deeds to come from the bank.. I wonder will the decision by BOS to reduce mortgages to 90& max be taken by all the other banks? I dont have a clue what bank the person who is buying my house is with. Hope it doesnt affect the sale.

Suppose I am in a lucky situation in that the person who is buying my house is not selling one of their own and likewise I am going to rent for a year so we are not in a chain. This selling process is so stressful. I just wish it didnt take so long.

johnnyskeleton

SimpleSam06 wrote: »

Not as many as you might think, nor as many of a livable quality. The county council here in Galway ran out of money to buy overpriced homes for affordable housing (and I mean in a bad way), shambled blubbering to central government to make up the shortfall, and were told eventually that they didn't have it either. Also there have been several scandals in recent weeks with some places being moved as "affordable" were slated as unlivable holes with no windows. Someone made some money there.

Is that why Galway is the only place reporting level or increasing house prices?

orbital83

beeno67 wrote: »

Article actually says prices to fall by less than 10% this year and not fall at all next year.

Even IF prices "do not fall at all next year" in absolute terms, it is still a fall in real terms, unless retail price inflation becomes negative in the meantime

DublinDilbert

patrickolee wrote: »

Hmmm, I think these are the figures Gurgle was talking about earlier, distinct whiff of sh1te off them! From where did you get them? Even with a 40 year term I can't get near those increases. Maybe you can enlighten me as to what magic figures you plugged into your online mortgage calculator?

Another thing which perhaps you missed was that the increase does not apply to existing mortgage holders, so no-one will have to find 'an extra months salary'. Ah the bubble thread.... the 'after hours' of 'accom & property'

Well the 0.55% increase came form the article quoted a few posts up in the Irish independent.

The rest of my figures were my extrapolation, based on a mortgage with 300K outstanding... my increase was for the first year, it would come down after that.... eg 0.0055 x 300K = 1650 :mad:

SimpleSam06

johnnyskeleton wrote: »

Is that why Galway is the only place reporting level or increasing house prices?

Eh? As far as I know the prices in Galway have dropped 10% or so since the start of the year (from the local papers) and anecdotally I know of a few places which likewise have dropped in price, one of them the house I am renting right now. The efforts of the bumbling local authority might have slowed that process to a certain extent, but it seems to have backfired on them.

markf909

Chief exec of myhome.ie said on the Radio this morning that he see's selling prices as being down 15% since '06 peak.

Says other figues have a lag effect of a few months so don't reflect this.