Housing Bubble Bursting

Gegerty

punchestown wrote: »

So Davys optimistic forecast of price falls of 20% over the next two years is wrong then?

I said they're close to where they should be, I didn't say they're close to where they are going to be.

punchestown wrote: »

You probably already have your money tied up in property though!

I have a home, no property investments.

Gegerty

SimpleSam06 wrote: »

Why not? Lack of land? Ireland is one of the most underpopulated countries around, never mind all the ghost estates and empties. Lack of services? We have one of the most bloated and best paid public sectors in the world, may as well get some value out of them (yes normal disclaimers about not all public sector workers are part of the problem etc).

This smacks of nineteenth century social darwinism.

no not because of those points, but because their own personal decisions in life have put them on a low salary.

Calina

Gegerty wrote: »

no not because of those points, but because their own personal decisions in life have put them on a low salary.

But people's worth are not solely decided by the salary they earn and should not be. They have made decisions which you may not agree with, but which do not directly impact on your day to day life, except maybe if they collect your bins. Why should you make a decision that "all people earning less than a given amount shouldn't be entitled to aspire to owning their own home?"

punchestown

Gegerty wrote: »

no not because of those points, but because their own personal decisions in life have put them on a low salary.

:rolleyes:

Gegerty

ixoy wrote: »

The stats - discussed in the Buyer Bubbles thread - say 78% of people are below 35k. Are you suggesting that these people should never be able to buy without:
1) Lots of assistance
or
2) A dependency on a higher-earning partner?

For people who are stuck on that, in other words excluding people who are starting out and whose wages will increase with experience, if they are not prepared to do something about their low salary (go back to school, get a degree etc) then yes I am saying they should not expect to be able to afford a home.

ixoy wrote: »

I don't necessarily agree with these figures - there's nothing to support them and we can only go on anecdotes.

Agreed, I have no evidence I'm basing this on my circle of friends, family and colleagues

ixoy wrote: »

Noone in my peer group is on that wage (we're about to hit 30 and all in IT) and though some may hit it in the next couple of years, it would mean that you're suggesting that only people in their early 30s should look at a home.

I think someone in their 30's should be on 50K.

ixoy wrote: »

Even if we accept your 50k argument

50K It wasn't my argument. I didn't know thats what qualifies you for assistance, someone else pointed that out. I agree this should lower a bit, around 45K.

SimpleSam06

Gegerty wrote: »

no not because of those points, but because their own personal decisions in life have put them on a low salary.

"The rich man in his castle, the poor man at his gate, God gave each his station and ordered his estate."

You're living in the wrong century, I fear.

Gegerty

Calina wrote: »

But people's worth are not solely decided by the salary they earn and should not be. They have made decisions which you may not agree with, but which do not directly impact on your day to day life, except maybe if they collect your bins. Why should you make a decision that "all people earning less than a given amount shouldn't be entitled to aspire to owning their own home?"

They shouldn't aspire by sitting on their ass watching fair city or getting drunk. Everyone should aspire to own a home, for some you'll need to sort your career out to get there.

RuggieBear

troll tbh

Calina

Gegerty wrote: »

For people who are stuck on that, in other words excluding people who are starting out and whose wages will increase with experience, if they are not prepared to do something about their low salary (go back to school, get a degree etc) then yes I am saying they should not expect to be able to afford a home.


Agreed, I have no evidence I'm basing this on my circle of friends, family and colleagues


I think someone in their 30's should be on 50K.


50K It wasn't my argument. I didn't know thats what qualifies you for assistance, someone else pointed that out. I agree this should lower a bit, around 45K.

I think you should perhaps consider not judging what salary people should be earning as they have different criteria for what constitutes a successful life. I think someone who is hung up on what money other people are earning and whether they are earning enough to be entitled to aspire to certain other things needs to reconsider their aspirations in life. Ireland is not short of houses. It is not right that what we do have be hoarded.

Secondly, I think that people who are considered high earners by the Revenue Commissioners - ie are paying tax under the higher tax bracket should not be eligible for hand outs to help them buy a house. This is a clear indicator that there is an issue with housing values in this country. As such, the figure should be 35400E which is the current cut off rate for standard tax at the very most.

Gegerty

SimpleSam06 wrote: »

"The rich man in his castle, the poor man at his gate, God gave each his station and ordered his estate."

You're living in the wrong century, I fear.

I'm clearly living in the wrong country thats for sure!! Socialism is all very noble but no I'm not a socialist whether it be the Bertie/Fiana Fail type or the Socialist Workers type.

Gegerty

RuggieBear wrote: »

troll tbh

:rolleyes:

punchestown

Gegerty wrote: »

I'm clearly living in the wrong country thats for sure!!

Clearly living in the wrong century troll! Run along and leave the masses to their cake eating

The_Conductor

Guys- usual forum rules apply. If you disagree with a post, you refute the post, but do not attack the poster. Follow the rules, or face a banning.

S.

Gegerty

punchestown wrote: »

Clearly living in the wrong century troll! Run along and leave the masses to their cake eating

Clearly showing your age. Did you think we were talking about wendy houses little child?

jmayo

Gegerty wrote: »

What I'm saying is there will come a point when negative equity looms upon a generation of buyers who are simply going to put their foot down. They simply will not accept it as easily as people who bought at the peak. If you want to buy a home off them, you're not going to get anywhere haggling. so what happens? People stop buying homes? People stop selling homes? Maybe for a brief period.

Going back a few posts but it made me laugh.
They will put their feet down and what ?
If they want to trade up from their 2 bed apartment in ar** hole of nowhere they will accept what the market dictates at the time.
They can demand all they want but it is now becoming (some people still believing it is still 2006 and biggest economic dowturn affects haven't yet hit us) and will be for the forseeable future a buyers market.

They may not accept it but they will have to lump it.
People may have to sell homes for variety of reasons : umemployment, moving for work, increase in family size, emigration etc.
How long is a brief period ? A quarter, a year or 5 years ?

BTW you do sound condescending when yopu state only people who are qualified should be able to afford a house.
Does the defintion of qualififcation mena you have to go to third level or should trades people not be able to have a hosue of their own ?

Gegerty

jmayo wrote: »

Going back a few posts but it made me laugh.
They will put their feet down and what ?
If they want to trade up from their 2 bed apartment in ar** hole of nowhere they will accept what the market dictates at the time.
They can demand all they want but it is now becoming (some people still believing it is still 2006 and biggest economic dowturn affects haven't yet hit us) and will be for the forseeable future a buyers market.

They may not accept it but they will have to lump it.
People may have to sell homes for variety of reasons : umemployment, moving for work, increase in family size, emigration etc.
How long is a brief period ? A quarter, a year or 5 years ?

OK fair enough as was pointed out there will alway be people who can afford to drop their price and still be comfortable with what they get. But you can keep going back and back and back. Where does it end? how does it end? It'll get to the stage where they will not have to just lump it. the buyers will just have to lump it and give the asking price.

SimpleSam06

punchestown wrote: »

Clearly living in the wrong century troll! Run along and leave the masses to their cake eating

I don't think gegerty is trolling, as far as I can see he honsetly believes that the bottom of the property market is very near, and bad luck to anyone caught out, its their own fault. This view is sadly at odds with reality, however, so all that remains is the question of whether or not he can be convinced of this, if you feel like taking the time.

The bottom of the market will be reached sooner or later, but a lot of people feel its later rather than sooner. It took eight (thirteen?) years to get here, if we're very lucky it will take less to restore normality. The looming ECB rate hike just reinforces the fact, but really, with fingers burnt on all sides, banks are tightening up lending criteria regardless, reducing the money available to pay for houses.

Even if interest rates went back to 2002 levels right now, it wouldn't stop the slide.

SimpleSam06

Gegerty wrote: »

the buyers will just have to lump it and give the asking price.

A product or service is only worth what the market is willing to pay for it. I can start selling pencils at €500 a pop, but that doesn't mean I won't be out of business overnight.

Gegerty

SimpleSam06 wrote: »

I don't think gegerty is trolling, as far as I can see he honsetly believes that the bottom of the property market is very near, and bad luck to anyone caught out, its their own fault. This view is sadly at odds with reality, however, so all that remains is the question of whether or not he can be convinced of this, if you feel like taking the time.

The bottom of the market will be reached sooner or later, but a lot of people feel its later rather than sooner. It took eight (thirteen?) years to get here, if we're very lucky it will take less to restore normality. The looming ECB rate hike just reinforces the fact, but really, with fingers burnt on all sides, banks are tightening up lending criteria regardless, reducing the money available to pay for houses.

Even if interest rates went back to 2002 levels right now, it wouldn't stop the slide.

I can see why I may come across as a troll because I'm certainly not getting any support!

I have been convinced we are not near the end. I'm not convinced of the forces which are driving the decline. The arguments do not hold, that people cannot afford a home or that we should be living in a socialist society, spreading the wealth and giving a home for everyone.

I shall bow out now, don't want to get on peoples nerves anymore than I have done.

DJDC

They shouldn't aspire by sitting on their ass watching fair city or getting drunk. Everyone should aspire to own a home, for some you'll need to sort your career out to get there.

I am going to give you the benefit of the doubt and say you don't really think that. What about social care workers, young academics who at 30 are barely scraping a living etc, are you categorising them as wasters somehow because of their relatively low incomes. Surely they deserve to be able to afford a home to live.

However we live in a market economy and housing is just another good whose price is determined by supply and demand. Some people in this thread think anyone on the average industrial wage should be able to afford a home for their family and its morally irreprehensible that they can't. Even if house prices collapsed a further 20%-30% its still unlikely that anyone other than high earners would be able to afford a decent house in a decent location within 5 miles of the city centre. Shelter is a universal right under the UN Human rights charter, owning a nice house in a decent location isn't. Thats the nature of the capitalist society in which we live and its same in every other developed capital city in the world London, NYC, LA etc etc. It might not be morally fair but its how efficient markets operate. This idea that everyone should own a similar house irrespective of their income can be described in one word: communism. I suggest you vote for Sinn Fein/ Workers Party at the next general election.

gurramok

Gegerty wrote: »

I have been convinced we are not near the end. I'm not convinced of the forces which are driving the decline. The arguments do not hold, that people cannot afford a home or that we should be living in a socialist society, spreading the wealth and giving a home for everyone.

To sum up, this post comes across as an elitist narrow minded view.

We are not discussing socialism or spreading the wealth, we are discussing the economics of the bubble and you cannot accept facts which disprove your view.

The_Conductor

Gegerty wrote: »

the buyers will just have to lump it and give the asking price.

I disagree- as Pubilius Syrus put in in 102BC, well over 2000 years ago- "Everything is worth what its purchaser will pay for it." In an Irish context you could modify this slightly to "Everything is worth a) what its purchasers are willing to pay for it and b) what its purchasers are capable of paying for it". Funds are a lot more difficult to raise than they were even a few months ago- and interest rates are going up........ It does not auger well, especially with lenders such as B&B having to accept firesale prices to raise funds....... Problems are far from over.......

The_Conductor

Gegerty wrote: »

I'm not convinced of the forces which are driving the decline.

Errr- lack of liquidity and much higher credit prices?

beeno67

[quote=Calina;56156661]But people's worth are not solely decided by the salary they earn and should not be. They have made decisions which you may not agree with, but which do not directly impact on your day to day life, except maybe if they collect your bins. Why should you make a decision that "all people earning less than a given amount shouldn't be entitled to aspire to owning their own home?"[/quote]
Of course you have a right to aspire to own your home. This does not mean you have the right to own it. 75% or so of adults own their own home. This figure has not changed very much in last 20 years. 3 out of 4 people can afford to buy their own homes.

gurramok

beeno67 wrote: »

Of course you have a right to aspire to own your home. This does not mean you have the right to own it. 75% or so of adults own their own home. This figure has not changed very much in last 20 years. 3 out of 4 people can afford to buy their own homes.

Good grief, thats twisting statistics with words.

That may be true of everyone that bought in the last 80 years, we're talking can anyone afford to buy now!!

Firetrap

It must be galling for these people to see house prices falling. Seeing the losers earning less than 50k a year potentially being able to buy their own place must really hurt :rolleyes:

Gegerty

Firetrap wrote: »

It must be galling for these people to see house prices falling. Seeing the losers earning less than 50k a year potentially being able to buy their own place must really hurt :rolleyes:

OK I have to add one more point. People are blasting me down for not facing facts. The fact is 50K gives you a take home pay (after tax) of €3155. do the calculations yourself: http://taxcalc.eu/ Now tell me again that this is the lowest you need to earn to able to afford a home in Ireland. Its complete and utter nonsense.

Calina

beeno67 wrote: »

Of course you have a right to aspire to own your home. This does not mean you have the right to own it. 75% or so of adults own their own home. This figure has not changed very much in last 20 years. 3 out of 4 people can afford to buy their own homes.

On the other hand, do people have the right to own several houses to the detriment of others not being able to own their own homes?

According to the government, 67% of people earn 34.5KE per year or less. The average price of housing is 7-8 times this. I think it is only fair to say that many people at that level can afford to own their own homes if

1) they have huge mortgage terms
2) someone gave them lots of money as a deposit
3) they do not want to live in Dublin although I suspect a hell of a lot of them work there.

beeno67

Calina wrote: »

On the other hand, do people have the right to own several houses to the detriment of others not being able to own their own homes?

According to the government, 67% of people earn 34.5KE per year or less. quote]
This is not true. According to Gurramok 67% of people earn this. Not quite the same thing.

Calina

Gegerty wrote: »

OK I have to add one more point. People are blasting me down for not facing facts. The fact is 50K gives you a take home pay (after tax) of €3155. do the calculations yourself: http://taxcalc.eu/ Now tell me again that this is the lowest you need to earn to able to afford a home in Ireland. Its complete and utter nonesense and any arguments to the contrary is utter socialism and belongs in the politics forum.

Actually, you need to be very careful with that figure. Does it make allowances for pension contributions? Because I strongly doubt that it does. If it doesn't, I would suggest that it is highly imprudent to get to the age of 30 or 35 and not have started to make provision for your retirement.

Also, a lot depends on what you consider a home. That figure might buy you a decent house in parts of Limerick and Roscommon, but it buys you - at best - a one bedroomed apartment in Dublin. Most of the jobs pushing 50K I suspect are in Dublin and not in Limerick and Roscommon. Most people would not necessarily consider said apartment as a "home" but a stepping stone to something more suitable like a two bedroomed apartment.

Also, the economy would be better off if less money was being syphoned into bank balance sheets by way of interest and more was being pushed towards non debt-supported discretionary spending.