Housing Bubble Bursting

beeno67

SimpleSam06 wrote: »

That is an estimation for new households, and a generous one at that. I don't really care if you believe it or not.


First off, back that figure up with a link. Secondly, how many of these are economic migrants? Half? They won't be buying any houses.

It has been linked twice already. Secondly as I have said numerous times it doesn't matter if they buy or rent.

SimpleSam06 wrote: »

Nah, their booms happening at the same time as ours is just coincidence. Right? So we all better start filling our piggy banks for the next round of 15% annual price rises... Oh thats right, we won't need to, since the banks will be giving us all 110% mortgages.


The CSO gives the following numbers for property completion in that period (keep in mind this is new dwellings completed, and excludes older and second hand homes):
2002 57,695
2003 68,819
2004 76,954
2005 80,957
2006 93,419

Total: 377,844

Supply exceeded demand from the start of the bubble. if 181,563 households (whatever the CSO defines that as) were formed in that period, that still leaves 196,281 of an overhang of new dwellings from that period alone, plus the annual completions ongoing, which means the overhang wouldn't be cleared for some 10-15 years, even at the breakneck pace of household formation seen in the last five years.

Supply and demand never played anything but a minor part in the insane rise in prices during the bubble.

I never said prices would boom again. I said they would settle.
As regards your figures you include both 2002 and 2006 in house completions. Obviously only one of these can be included. Also you fail to mention derilict homes which you said was 7,000 per year or 28,000 in total. You also fail to include second homes. Take away these figures and you get excess housing stock of about 100,000 which is the entire point I was making. Considering between 2005 and 2006 160,000 homes were built, this was whenexcess stock really took off and caused prices to drop.

SimpleSam06

beeno67 wrote: »

It has been linked twice already.

Humour me sure, link it again.

beeno67 wrote: »

I never said prices would boom again. I said they would settle.

Oh yes, prices will indeed settle - just out of interest, when exactly will they settle, in your opinion, and how much of a percentage drop are we looking at. Be specific, I'm interested.

beeno67 wrote: »

As regards your figures you include both 2002 and 2006 in house completions. Obviously only one of these can be included.

Why not, household formations were taken from the same source and use the same metrics. You can't use one method for one and another for the other.

beeno67 wrote: »

Also you fail to mention derilict homes which you said was 7,000 per year or 28,000 in total. You also fail to include second homes.

I also failed to include second hand homes and other housing stock for sale. Whats your point.

beeno67 wrote: »

this was whenexcess stock really took off and caused prices to drop.

There was no shortfall in housing throughout the boom.

You haven't a leg to stand on here, and not one fact supports your opinion. One more question for you: how much of a mortgage are you sitting on yourself, or what interest have you got in the property business?

beeno67

SimpleSam06 wrote: »

Humour me sure, link it again.[quote/]
http://www.cso.ie/statistics/popnbyage2006.htm

SimpleSam06 wrote: »

Oh yes, prices will indeed settle - just out of interest, when exactly will they settle, in your opinion, and how much of a percentage drop are we looking at. Be specific, I'm interested.[quote/]

I have said before, a total of 20% ie 10% already fallen and 10 to go. Prices to settle next 12 months or so

simpleSam06 wrote: »

Why not, household formations were taken from the same source and use the same metrics. You can't use one method for one and another for the other.


I also failed to include second hand homes and other housing stock for sale. Whats your point.[quote/]

Sales of second hand homes does not count. I cannot see how you fail to understand this.

SimpleSam06 wrote: »

There was no shortfall in housing throughout the boom.

You haven't a leg to stand on here, and not one fact supports your opinion.

I have no idea what you are talking about here

SimpleSam06 wrote: »

One more question for you: how much of a mortgage are you sitting on yourself, or what interest have you got in the property business?

I have a mortgage of about 50% (recent sale of a house on our street for 100% more than I paid for mine 4 years ago. I have no vested interest in property market. I used to own investment properties but sold them last year for a very nice profit.

beeno67

SimpleSam06 wrote: »

There was no shortfall in housing throughout the boom.

Actually I have read your post again and I see what you are getting at. Well let me make this as simple as possible for you. Lets take the figures that scepticone gave of 59000 units needed per year.
Lets look at actual house holds
1997 38842 (shortfall 20000)
1998 42349 (shortfall 17000)
1999 46512 (shortfall 12500)
2000 49812 (shortfall 9000)
2001 52602 (Shortfall 6000)
2002 57695 (shortfall 1000)
So by 2002 we had a shortfall of about 65000
It took until about 2005/2006 for that excess demand to be met and then greatly exceeded. I accept the figure may not have been as high as 59000 between 1997 and 2001 but it would not have been far off it as the population grew by much the same in this 5 years as the following 5 years

SimpleSam06

Again, where are you pulling those figures from? Is that households or units built? Can you just give us actual households during the period vs actual units built in the period, that would clarify what you are trying to say.

beeno67

SimpleSam06 wrote: »

Again, where are you pulling those figures from? Is that households or units built? Can you just give us actual households during the period vs actual units built in the period, that would clarify what you are trying to say.

For God's sake. I am quoting figures you gave!

SimpleSam06

beeno67 wrote: »

For God's sake. I am quoting figures you gave!

I never gave a figure of 59,000 per year. We're not talking about future trends right now, all I want is the historical data from 1997 to 2002, the exact same as I supplied from 2002 to 2006. Are you unable to supply it, since you obviously haven't looked it up before now?

jetski

The property market

Economist Marian Finnegan predicted prices to rise by "low single digits" with higher rates in Dublin.

She wasn't alone. CBRE forecast price rises of 3 to 5 per cent, Douglas Newman Good predicted "single-digit growth". IIB was bullish with a forecast of "6 to 7 per cent" growth. Hooke & McDonald plumped for a 5 per cent jump.

Prices fell about 20 per cent, making their weighty economic forecasts among the worst in living memory.

gurramok

Ah yes, Marian Finnegan who is 'economist' with Sherry Fitz would say that.

The rest, we have estate agents DNG and we have Hooke & McDonald where a certain prominent member could not even sell his own house for a year.

And then we have Austin Hughes' IIB who raised their rates on the quiet recently while publicly calling for rate cuts from the ECB!

Every one of these VI predictions have been wrong since the bubble started to burst in mid '06.

ixoy

Ah yes given people can now borrow less, due to the credit crunch, it makes sense prices will rise...

Firetrap

Don't forget there's great value out there at the moment. NOW is the time to buy :rolleyes:

SkepticOne

I see some of the estate agents have been caught out feeding exaggerated prices to the papers for their property reports. The story started off in the SBP yesterday but has since been picked up by the IT today as well as Newstalk and RTE.

patrickolee

SkepticOne wrote: »

I see some of the estate agents have been caught out feeding exaggerated prices to the papers for their property reports. The story started off in the SBP yesterday but has since been picked up by the IT today as well as Newstalk and RTE.

And was posted yesterday...

http://www.boards.ie/vbulletin/showthread.php?t=2055283470

SkepticOne

patrickolee wrote: »

And was posted yesterday...

http://www.boards.ie/vbulletin/showthread.php?t=2055283470

Thanks. Missed that.

thor17

not so long ago people were sleeping in cars waiting to buy new houses, did we all get a bit greedy?

arctictree

thor17 wrote: »

not so long ago people were sleeping in cars waiting to buy new houses, did we all get a bit greedy?

Well, there was a mass hysteria about getting 'on the property ladder' or 'you can't lose on property'. This caused the huge upswing in prices. That has been now replaced with 'you'd be mad to buy a house now'. Herd mentality in the opposite direction...

BigglesMcGee

The rental market must be great.

People cant even get Planning Permission for a house, and yet you can rent your shed out.

I didnt know you could turn your shed into 2 apartments and get an income.

http://daft.ie/searchrental.daft?search=Search+%BB&s[cc_id]=c1&s[a_id][0]=295&s[mnp]=&s[mxp]=&s[bd_no]=1&s[pt_id]=1&s[move_in_date]=0&s[lease]=&s[furn]=0&s[search_type]=rental&s[transport]=&s[advanced]=&s[price_per_room]=&s[refreshmap]=1&limit=10&id=541321

And its not the only one i've seen.

Calina

From my personal point of view, looking at that ad, a couple of things strike me

1) chronically over priced. YOu can get a better looking one bed apartment the other side of Swords for under 1000E now. 276 per week is a bit more than that.

2) not particularly well served by public transport and unless I owned a detached house I would not want to live over there.

I think this is optimistic at best. Rents are falling in Swords and two beds are now between 1000 and 1100 on average.

SimpleSam06

Daft shortcode might be handier... www.daft.ie/241321

Calina

Also I am noticing an increasing trend of rent per week appearing in ads.

As a long term renter I absolutely abhor this. I will not look at any place that has a weekly rental rate.

BigglesMcGee

I think its a lovely area, though a bit out of town (which i personally like), but my problem is that its a garage at the back of someones house. Surely there has to be something wrong with this. Planning.

Calina,
Where can you get a decent 2 bed apt in Swords for less than €1200. My daughter is looking for one now. We went to see 2 for €1150 and 1 for €1100 last night but i wouldnt let a dog live in them. All the rest were €1200 or more. We looked on Daft.

Calina

I saw a couple in Holywell and Applewood listed yesterday. Two bed apartments in the new developments in Swords are all much of a muchness qualitywise and the choice just isn't there. But the prices are starting to slide.

BigglesMcGee

Calina wrote: »

I saw a couple in Holywell and Applewood listed yesterday. Two bed apartments in the new developments in Swords are all much of a muchness qualitywise and the choice just isn't there. But the prices are starting to slide.

I like Applewood, nice big apts and its a nice place. Hate Holywell though. Tiny apts and its a kip.
Can you send the link where you saw these apartments though. Was it on Daft? We havent put any deposit down yet, so still looking.

Calina

It came up on a list of rental decreases. I dont' have the link to hand because I don't look so often.

I've mixed feelings about both Applewood and Holywell. Holywell is closer to the city but has few amenities. Applewood is much further out.

DublinDilbert

thor17 wrote: »

not so long ago people were sleeping in cars waiting to buy new houses, did we all get a bit greedy?

Well genuine people were desperate to get a house / apartment that's why they were sleeping out.... their plight was not helped by the fact that 40% of the market appears to have been investors...

Also people went around looking at the gains they had made on paper thinking they were rich, some re-mortgaged based on supposed gains... only problem is that these gains are being eroded each and every week now...

colc1

Sorry I have come ionto this discussion a bit late but it was obvious when those people were sleeping in cars, etc. that this kind of madness coulnt go on forever.

I heard a developer or estate agent (cant remember which) on Joe Duffy today and he was saying they had dropped prices for some estate in some small town in Longford (I had never heard of it anyway and I am more than decent on geography) from 365,000 to 250,000 overnight in fairness thats still a ridiculous price and I think they'll drop further eventually the developers will have to cut their losses (or at least accept a way smaller profit).

For 250k you'd get a 2 bed overlooking the Med in Nice still and thats also a big city with associated facilities and Med climate! :cool:

we have to get real in this country we've been throwin away money the last few years as a people.

Calina

colc1 wrote: »

For 250k you'd get a 2 bed overlooking the Med in Nice still and thats also a big city with associated facilities and Med climate! :cool:

we have to get real in this country we've been throwin away money the last few years as a people.

Not all of us have been. The point is that a driving force has been "you can't make a loss on property" because people never really have. But that's not a rational assessment of value.

The_Conductor

colc1 wrote: »

For 250k you'd get a 2 bed overlooking the Med in Nice still and thats also a big city with associated facilities and Med climate! :cool:

Not in a half decent area of Nice you won't.......
Then again there are nice 2 bed semis going for less than 250k in O'Malley Park, Limerick- doesn't mean you'd want to buy them though......

S.

smooth operater

colc1 wrote: »

Sorry I have come ionto this discussion a bit late but it was obvious when those people were sleeping in cars, etc. that this kind of madness coulnt go on forever.

I heard a developer or estate agent (cant remember which) on Joe Duffy today and he was saying they had dropped prices for some estate in some small town in Longford (I had never heard of it anyway and I am more than decent on geography) from 365,000 to 250,000 overnight in fairness thats still a ridiculous price and I think they'll drop further eventually the developers will have to cut their losses (or at least accept a way smaller profit).

For 250k you'd get a 2 bed overlooking the Med in Nice still and thats also a big city with associated facilities and Med climate! :cool:

we have to get real in this country we've been throwin away money the last few years as a people.

Ye those estate agents know how to sell a house alright ....Im sure there phones were hopin when they got off, in fact i was tempted to look up what they were sellin myself

Patrickof

smooth operater wrote: »

Ye those estate agents know how to sell a house alright ....Im sure there phones were hopin when they got off, in fact i was tempted to look up what they were sellin myself

Well considering that the EA admitted that none had actually sold at the original price of €365000 - then is it fair to say that it was really a "price". I mean he could have said they were priced at €1.5 million and are now reduced to €250,000 for all the difference it would have made.