Housing Bubble Bursting

HashSlinging

^^ one hell of a gaff all the same.

gurramok

warrenaldo wrote:

Personally i cant see a full blown crash - maybe im a bit naive. But the demand for Houses is still massive. As long as the demand is so great i dont see there being a massive crash as is sugested. and Demand is increasing with our increasing population.

As i've said before on boards, if even 1 million extra people came here next year, there will be demand for housing, but at our crazy prices, who'll buy the houses?

Certainly not the immigrants, most go into low paying jobs, the natives cant afford the prices charged hence a glut of inventory on market.
Only solution is a fall in price to bring affordability back for home grown and immigrant alike.

billyblanks

Funny Raskolnikov that's my parents house. It not quite that straight forward, The original value of the house was €2million, it was put on the market for €2.25 to see what would happen......not a lot! it has now been reduced to €1.695 asking, so just say it goes for €1.8ml, its a drop of 10% on the original price which is not great but not as bad as it looks.


My opinion on the market....high end properties have been hit, but starter homes are still in massive demand. I was told recently by an estate agent that high end home are becoming hard to sell but he cant get enough homes under the €600,000 mark, they just fly off the books.

miju

billyblanks wrote:

I was told recently by an estate agent that high end home are becoming hard to sell but he cant get enough homes under the €600,000 mark, they just fly off the books.

ea was obviously talking through his arse though giving the figures and exmaples being bandied about on this thread as well as the multiple price drops sub 600k

Zambia

billyblanks wrote:

I was told recently by an estate agent that high end home are becoming hard to sell but he cant get enough homes under the €600,000 mark, they just fly off the books.

I was told recently by a taxi driver this was not the case...:cool:

soma

SkepticOne wrote:

I think there's a recent breed of unsophisticated speculator who has forgotton this important fact.

It's actually worse than that, they don't even realise that they are speculators. They read the property supplements which tell them that they are "astute investors".

SkepticOne

billyblanks wrote:

My opinion on the market....high end properties have been hit, but starter homes are still in massive demand. I was told recently by an estate agent that high end home are becoming hard to sell but he cant get enough homes under the €600,000 mark, they just fly off the books.

Normally I don't take too seriously what is written in the property section of the Irish Times, but this caught my eye:

DNG research indicates that, so far this year, there are three times more houses on the market in the greater Dublin area compared to last year, [Kieth] Lowe says.

Three times as many as same time last year and this coming from an estate agent. They can't all be high-end houses. So much for the spring selling season. Something interesting is happening in the market.

Smoggy

It's not the 600k+ places that are taking the drop, most the ones I have seen have been the 350k's in Lucan having to drop 10-20k

warrenaldo

wow if what skepticOne says is true then it does look like some interesting things are happening.
And if they start to drop then more people will panic and try cash in.
things could be changng - im trying to find that irish times article

SkepticOne

warrenaldo wrote:

things could be changng - im trying to find that irish times article

Front page of today's property section. Left hand side. "Trends".

miju

another massive amount of jobs lost in cork today in phyzer (spelling?) , all 540 jobs to be gone within the next 3 years, poor old cork is taking a hammering as of late

chump

miju wrote:

another massive amount of jobs lost in cork today in phyzer (spelling?) , all 540 jobs to be gone within the next 3 years, poor old cork is taking a hammering as of late

pfizer

I says a LOT if the high quality jobs start getting cut from ireland. Of course with the specifics in this case you could argue it being a one-off - but surely if we were an impressively competitive country pfizer would hold onto their 'lot' here and cut corners elsewhere.

SimpleSam06

I'm spending a few weeks in asia, so I'm a little out of touch, but I did catch on Bloomberg this morning that HSBC is taking a kicking on the American mortgages market, blaming subprime lenders for a fairly unprecedented amount of foreclosures, with their stocks dropping 3% or so overnight.

When America sneezes, the rest of the world catches a cold, as they say. In Ireland's case it usually seems to be a year or two afterwards, so I'll stand by my prediction for December 2007, January 2008 as the date for the complete bursting of the bubble, with that in mind. Although prices nationally are in fact already dropping, and not just with inflation in mind.

As for the state of the manufacturing sector in Ireland, pointing out job losses in single areas is about as useful as pointing out price drops for a single house in a city. FWIW, unemployment was at 4.3% in 2006, which was about half the eurozone average, and I'm assuming that includes migrant workers as well.

If anyone has any longer term or broader scope information to indicate that FDI or employment in Ireland is decreasing overall, great, post it up and lets have a look. From what I know FDI for 2006 was at $21 billion, after a US tax amnesty in 2005. And lets not forget the effects of the tremendous Irish diaspora.

Unless someone has more than anecdotal evidence to the contrary, the doom and gloom makes the thread less of a valuable discussion and more of a work of parody, not to mention offtopic.

Zambia

SimpleSam06 wrote:

I'm spending a few weeks in asia, so I'm a little out of touch, but I did catch on Bloomberg this morning that HSBC is taking a kicking on the American mortgages market, blaming subprime lenders for a fairly unprecedented amount of foreclosures, with their stocks dropping 3% or so overnight.

When America sneezes, the rest of the world catches a cold, as they say. In Ireland's case it usually seems to be a year or two afterwards, so I'll stand by my prediction for December 2007, January 2008 as the date for the complete bursting of the bubble, with that in mind. Although prices nationally are in fact already dropping, and not just with inflation in mind.

As for the state of the manufacturing sector in Ireland, pointing out job losses in single areas is about as useful as pointing out price drops for a single house in a city. FWIW, unemployment was at 4.3% in 2006, which was about half the eurozone average, and I'm assuming that includes migrant workers as well.

If anyone has any longer term or broader scope information to indicate that FDI or employment in Ireland is decreasing overall, great, post it up and lets have a look. From what I know FDI for 2006 was at $21 billion, after a US tax amnesty in 2005. And lets not forget the effects of the tremendous Irish diaspora.

Unless someone has more than anecdotal evidence to the contrary, the doom and gloom makes the thread less of a valuable discussion and more of a work of parody, not to mention offtopic.

Aye well said ... rather see more evidence of dropping house prices

joemc99

Just read a few of these posts after conversation with my mate (billyblanks) last night. Look, if you are in a position to buy a gaf, buy it now. No point in killing yourself for months, waiting for the prices to drop, etc. Do you realize that people have been saying this since 1995! Buy your place, get into it, pay your mortgage, and live your life. If the price drops by 10%, so friggin what, in another few years it'll be up by 10%.

Billy told me that people were talking about selling now and buying when the market 'drops'....crazy, crazy I tells ya.

Personally, I want the prices to drop by about 25%, makes trading up easier.

Calina

SimpleSam06 wrote:

As for the state of the manufacturing sector in Ireland, pointing out job losses in single areas is about as useful as pointing out price drops for a single house in a city. FWIW, unemployment was at 4.3% in 2006, which was about half the eurozone average, and I'm assuming that includes migrant workers as

Here are CSO figures for employment by sector in Ireland over the past nine years

Please note that

1) unemployment numbers are rising
2) the key rises in numbers employed are in public administration/construction/health/retail trade/transport and finance. Of these, the only one that's likely to produce anything in terms of balance of trade figures is finance.
3) there are key falls in agriculture/forestry/fishing/other manufacture

Effectively, finance aside we are not creating net jobs in export oriented sectors.

SimpleSam06

Calina wrote:

Here are CSO figures for employment by sector in Ireland over the past nine years

Yeah, thats great, but the number of people in the workforce is also increasing, and frankly looking at the details of those numbers, I'm not terribly alarmed. The figures are not good, but I wouldn't go hitting the panic button just yet.

Agriculture has no chance to compete with the big producers anyway, we just keep that as war proofing, we sold half our fishing rights in our territorial waters to Spain a while back, and whatever remains of our forests falls under the same category as agriculture.

Anyway my point is, this thread is about the housing bubble. Lets try to keep it on topic, please.

miju

joemc99 wrote:

Do you realize that people have been saying this since 1995!

the bulls (people who have been optomistic about economy) have also been wrong for the same amount of time with their expectations also

joemc99 wrote:

Just read a few of these posts after conversation with my mate (billyblanks) last night. Look, if you are in a position to buy a gaf, buy it now. No point in killing yourself for months, waiting for the prices to drop, etc............. If the price drops by 10%, so friggin what, in another few years it'll be up by 10%.

basing this on the average house price , but while you can so easily dismiss €30,000 the majority of other people cannot as that is more than one years salary for them

joemc99 wrote:

Billy told me that people were talking about selling now and buying when the market 'drops'....crazy, crazy I tells ya.

this is called actually realising the profit in your house as opposed to everyone else who thinks because their house is worth x , y and z they are worth that

Raskolnikov

Calina wrote:

Here are CSO figures for employment by sector in Ireland over the past nine years

Please note that

1) unemployment numbers are rising
2) the key rises in numbers employed are in public administration/construction/health/retail trade/transport and finance. Of these, the only one that's likely to produce anything in terms of balance of trade figures is finance.
3) there are key falls in agriculture/forestry/fishing/other manufacture

Effectively, finance aside we are not creating net jobs in export oriented sectors.

Unemployment is rising but the amount of people in the labour force is growing. Also, falls in the agriculture sector are just a continuation of long-term trends.

In my opinion, there are two major factors that will dictate where housing prices will go. Employment and the quality of it and interest rates and the availability of credit. If we maintain current trends, I would say that we'll get the much vaunted soft landing.

miju

well regarding ECB interest rates Trichet urged "extreme caution" so you can take from that what you will

joemc99

basing this on the average house price , but while you can so easily dismiss €30,000 the majority of other people cannot as that is more than one years salary for them

Jez, I do not dismiss 30g, no way.....but think about it, how many people are actually going to hit the 'downturn' bang on.....this is the big gamble you are all taking.

If you have been say this for 2 years, you have already lost a HUGH amount of money, a lot more than 30g!

I moved 2 years ago at a very similiar time to this, 'oh the big crash is coming'. Sales had stopped etc. Big 'gamble', etc. Shat myself for 2 months after moving, then the place went up 200g in the 2 years.....nuts. The same thing happened when we got our 1st place in 1999, 150g eruo, 'are we mad', etc......

You could be waiting all you life lads for the 'crash'....down 50% etc.....all the while you may be paying rent and so on.

Get your place an be happy with it. As long as you have a secure job, you will have you money to pay your own mortgage.

Raskolnikov

Raskolnikov wrote:

If we maintain current trends, I would say that we'll get the much vaunted soft landing.

If we maintain current trends prices will continue to fall as they are already doing.

joemc99

joemc99 wrote:

Get your place an be happy with it. As long as you have a secure job, you will have you money to pay your own mortgage.

Ya could do that............but ya could always wait a while and watch the prices come down! Save a bit of money! No one is waiting a life time for prices to come down they are coming down. Havent you seen the ads on myhome.ie or daft.ie or in the property supplements advertised "price reduced to sell" etc etc

Prices are coming down and people will hold off to save money - its gonna be a snowball effect

Gurgle

Deleted User wrote:

Ya could do that............but ya could always wait a while and watch the prices come down!

Of course we've been waiting through 10 years of predictions of prices coming down. Still not happening.

Deleted User wrote:

Havent you seen the ads on myhome.ie or daft.ie or in the property supplements advertised "price reduced to sell" etc etc

When properties come to market, the estate agent looks at the last similar house to sell in the estate/area/whatever. If that was 300k 6 months ago, they will advertise at 350k.

If it sits for 6 months with no sale, they reduce to 330k and advertise that the price is reduced. Then you, Muju etc. come on here spouting about the bottom dropping out of the market.

joemc99 wrote:

Get your place an be happy with it. As long as you have a secure job, you will have you money to pay your own mortgage.

^^ Exactly!

If you're buying a house to live in, just buy whatever you can afford to pay the mortgage on.

If you want to buy with some pipe dream of making tens of thousands in capital appreciation, or with the idea of trading up in a couple of years on the back of your equity, then take your head out of 1999 and come visit us in 2007.

Gurgle

Gurgle wrote:

Of course we've been waiting through 10 years of predictions of prices coming down. Still not happening.

lol - it is happening

Gurgle wrote:

When properties come to market, the estate agent looks at the last similar house to sell in the estate/area/whatever. If that was 300k 6 months ago, they will advertise at 350k.

not anymore

Gurgle wrote:

If it sits for 6 months with no sale, they reduce to 330k and advertise that the price is reduced. Then you, Muju etc. come on here spouting about the bottom dropping out of the market.

nobody has mentioned the bottom of the market far from it!!!!!! its a long way down !

Gurgle wrote:

If you're buying a house to live in, just buy whatever you can afford to pay the mortgage on.

why pay extortionate prices when they are obviously coming down.

Gurgle wrote:

If you want to buy with some pipe dream of making tens of thousands in capital appreciation, or with the idea of trading up in a couple of years on the back of your equity, then take your head out of 1999 and come visit us in 2007.

agreed!

joemc99

why pay extortionate prices when they are obviously coming down.

So how long are you going to wait? eg, house is valued at 350k now, how far would you wait? 280k is 20%, 175k is 50%. I think you should wait until 50%, then make your move. Dont tell anyone though, it would be a MAD rush.

KingKenny7

^^ Exactly!

If you're buying a house to live in, just buy whatever you can afford to pay the mortgage on. .[/QUOTE]


Thats the whole point these days. Young people cant afford a house.....

soma

joemc99 wrote:

So how long are you going to wait? eg, house is valued at 350k now, how far would you wait? 280k is 20%, 175k is 50%. I think you should wait until 50%, then make your move. Dont tell anyone though, it would be a MAD rush.

Pretty simple really,

From a PPR perspective:

When a property's mortgage repayment (10-15% down, 25-year cap+int) is roughly equivalent to the rental price.

From an investment perspective:

When there are yields to be had that are better than a crappy deposit account. Some other european destinations I would have invested in have been ruined for me due to the 'paddy price' effect - Irish Idiots wil pay anything for bricks and mortar, they're an embarassment.

miju

Gurgle wrote:

When properties come to market, the estate agent looks at the last similar house to sell in the estate/area/whatever. If that was 300k 6 months ago, they will advertise at 350k.

and thats why we've all seen plenty of examples of prices dropping then is it?

Gurgle wrote:

If it sits for 6 months with no sale, they reduce to 330k and advertise that the price is reduced. Then you, Muju etc. come on here spouting about the bottom dropping out of the market.

sorry when did I say the bottom had dropped out of the market? what you posted here is a contradiction of the first half of your post, up until now prices have been going up , up , up with EA's doing what you described. Now though we have the opposite with rising inventory and EA's telling clients to be more realistic coupled together with actual house price falls and houses not shifting anywhere near as fast.

Gurgle

Deleted User wrote:

lol - it is happening

lol, no its not!

Deleted User wrote:

why pay extortionate prices when they are obviously coming down.

Not rising rapidly != coming down

Prices are not coming down. They might come down. It hasn't happened yet.