Housing Bubble Bursting

gurramok

Well done tara73 for reading 3000 posts so far!

You'll also notice the ones who purposely argued of no impending crash in this forum have either disappeared(tails between their legs) or just changed their mind when the crash went mainstream.

AARRRRGH

tara73 wrote: »

just found and read this thread halfway through from the beginning and have to say I'm absolutely flabbergasted how exactly some people here predicted all what happened the last 3 years 3 years ago...maybe it wasn't too difficult to assume the bubble bursting / crash but what astonishes me is some of the detailed predictions...why you smart guys are not leading the country???????you should!!!!!:):):)

Weed out any of them who told you to invest your deposit and savings from renting in equities though.

They were as bad as anyone who was saying property would always go up.

tara73

@ agent J
yes, if you do good research and always lived in Ireland it was probably not too difficult to predict all the details...
I saw a downturn coming as well but hoped not for this extend, as I'm directly working in the construction business and probably didn't want to get too worried. We were so happy that we had a well paid job in our profession .

but with the nurse/gardai situation, I think one of the big mistakes was that the banks gave them a 100% mortgage. almost everybody got a mortgage.
I had friends over from germany 3 years ago and I told them that people here get 100% mortgages. My friend was laughing at me and thought I got somehting wrong and telling bull****, he just didn't believe it. I still have his words in mind:that's not possible!! (a bit naive himself, all of america was doing that, he just had to read some international papers..)

a friend of mine has his own software programming company in germany and his clients include audi and volkswagen.
he has a good income in average, but the banks were reluctant to grant him a mortgage with the reason that he gets lump sums kind of every half a year from this big companies(they don't like to pay...:)) and couldn't prove for every month a steady salary....that's germany...I don't mean to patronise or anything, just to show the difference...because I think many people think germany is so rich and a heaven to live, it's not really for the normal working people..

@gurramok
hahaha, no, I didn't read all the 3000 posts, the beginning and then as I wrote: halfway through- means the professional and important ones for me...:)
and yes, the "anti crash people" are gone, I didn't expect something else...but maybe they did what some suggested, gave the keys back and they sit now in bulgaria in their holiday home...:):)

Fr0g

AARRRRGH wrote: »

Weed out any of them who told you to invest your deposit and savings from renting in equities though.

They were as bad as anyone who was saying property would always go up.

While I was certainly one of the "Doomsayers", "talking down the economy" etc. I don't think anyone saw it being this bad. A lot of what was going on i.e shifting money between Anglo and IL&P and huge overspending by governments depts. (e.g. FAS) was hidden.

But anyone with access to all the information regarding the economy i.e. the government, should have seen it coming. For FF to say nobody saw it coming is one of the biggest lies/spin they have ever come out with. If they truly didn't see this coming then there incompetence is surely something to behold.

I actually think they knew the proverbial was going to hit the fan but thought they could manage (lie/spin/fudge/spoof) there way through it. The problem as they have discovered is that the global financial and economic world is too fast moving and sophisticated for for the usual gombeen politics and gombeen economics to work any more.

AARRRRGH

Fr0g wrote: »

While I was certainly one of the "Doomsayers", "talking down the economy" etc. I don't think anyone saw it being this bad. A lot of what was going on i.e shifting money between Anglo and IL&P and huge overspending by governments depts. (e.g. FAS) was hidden.

But anyone with access to all the information regarding the economy i.e. the government, should have seen it coming. For FF to say nobody saw it coming is one of the biggest lies/spin they have ever come out with. If they truly didn't see this coming then there incompetence is surely something to behold.

I actually think they knew the proverbial was going to hit the fan but thought they could manage (lie/spin/fudge/spoof) there way through it. The problem as they have discovered is that the global financial and economic world is too fast moving and sophisticated for for the usual gombeen politics and gombeen economics to work any more.

Just goes to show. Ordinary folk like us have absolutely no way of knowing whats around the corner.
I think you are right. The government had everything hey needed to see it coming. And id say they werent the only government.

tara73

I have one question: why are in this post the most interesting month sept & oct. 2008 missing? I can't imagine nobody posted in that days???
thanks for answer!

I would hazard a guess that house prices were far from peoples minds with the possibility of the banks failing, without mortgages it didn't really matter what the asking prices were.

Gurgle

gurramok wrote: »

or just changed their mind when the crash went mainstream.

Its called admitting you were wrong
I'm willing to do it, have you ever been wrong?

Gurgle

AARRRRGH wrote: »

Weed out any of them who told you to invest your deposit and savings from renting in equities though.

They were as bad as anyone who was saying property would always go up.

You know theres a global recession, right?

gurramok

Gurgle wrote: »

Its called admitting you were wrong
I'm willing to do it, have you ever been wrong?

In relation to the topic, have I?

Gurgle

Gurgle wrote: »

Its called admitting you were wrong
I'm willing to do it, have you ever been wrong?

well..... I ignored the signs in the UK in 1988 and bought a house, had nearly ten years on NE before inflation saved me! sold it during the 2005 "plateau" for about the same (adjusted for inflation) as I paid for it.

AARRRRGH

Gurgle wrote: »

You know theres a global recession, right?

Jesus, you're on the ball.
Maybe you should be running the country.

AARRRRGH

gurramok wrote: »

In relation to the topic, have I?

Have you ever told anyone not to buy a house but to invest their deposit money and rent savings in equities?
I have. They should recover faster than property, but nevertheless, i was spectacularly wrong. They would have been beter off with their money on deposit.

gurramok

AARRRRGH wrote: »

Have you ever told anyone not to buy a house but to invest their deposit money and rent savings in equities?

Emphatic no to that. That i'm sure of

AARRRRGH

gurramok wrote: »

Emphatic no to that. That i'm sure of

Better man than me so. I still have people coming up to me complaining I told them to invest in equities. I have to say to them that i didnt make them invest. but i still feel a bit guilty

oceanclub

Gurgle wrote: »

You know theres a global recession, right?

Lehmans and their testicles, right?

P.

jmayo

Agent J wrote: »

Some of this was evident back in 2002/3. The flag went up for me when we were building houses at a rate of 60k units a year. Germanys built at 120k a year and the UK 90k a year. Something was not right about those proportions.
Throw in the 1st 100% mortgages, equity release, 30,35,40 year mortgages and a gardai/nurse couple not being able to afford a modest 3-bed.

But Ireland is different ya know.

Ah but as buidler buddy told me in 2006 we have thousands of immigrants coming to inhabit all those houses :rolleyes:

Gurgle wrote: »

You know theres a global recession, right?

Let me guess Lehmans are at fault for the whole lot :rolleyes:

whizzbang

oceanclub wrote: »

Lehmans and their testicles, right?

P.

They're everywhere apparently.

tara73

hey guys,

to my question earlier on: does nobody from you wrote during the month sept. 08 and oct.08, the most turbulent month with the banking crashed?

I can't imagine that. There are no posts for that months. I think it's very weird!

Thanks for answer

Tara

whizzbang

tara73 wrote: »

hey guys,

to my question earlier on: does nobody from you wrote during the month sept. 08 and oct.08, the most turbulent month with the banking crashed?

I can't imagine that. There are no posts for that months. I think it's very weird!

Thanks for answer

Tara

We were queueing outside our bank branches

tara73

:):)

but I still would like to know where they're gone.

Fr0g

tara73 wrote: »

:):)

but I still would like to know where they're gone.

Gone? Are you suggesting they were removed?

The thread may have run out of steam by Aug '08 the global financial crisis brought the Irish property market back into focus. I recall there was still a lot of denial out there until the events in sept./oct '08. Does that explain it?

Now with NAMA started will Lenihan establish a floor in the market:

https://www.youtube.com/watch?v=pWlz1IKWfw4

A floor in the market! Well the market has been well and truly floored by the fact that banks have been ordered to have 8% equity on standby for bad debt provision, thus leaving less for lending!

Organeer

Has anybody looked on Daft.ie & seen the prices of houses in the North or in England? Or just about anywhere except London or Paris. Looking at these prices means we still have a long way to fall with house prices.

DublinWriter

Organeer wrote: »

Has anybody looked on Daft.ie & seen the prices of houses in the North or in England?

Apples and oranges my friend.

okeydoke1

I have been reading the thread for the past few days, I read one or 2 pages for every 10 pages since the beginning. God there is a book in it.

I was thinking of buying a house at some stage this year, came across the property pin and this thread which has helped immensely.

Kudos to everyone on this thread who make sound rational arguments, backed up by facts. I firmly believe, and saw a few posts, that this helped many people save a lot of money, either by cashing in their house before things got bad or refusing to buy.

As for me, I didn't pay any attention to the housing market, as I was not in a position to buy a house, due to the bubble. I could see that the prices were crazy and that if you were a young Dublin based couple on decent wages, you'd be pushed to commuter towns in Kildare, Wicklow, Meath etc.

I may be forced, for personal reasons (wife and 2 kids) to buy a house in the next year or two but now I am armed with sufficient info to make an informed decision, and to try to buy at something approaching a decent price.

As I am a bit of a novice about things, I was hugely confused by the last month of trying to set up property viewings & dealing with EAs.

I viewed a 340k doer-uper and was told the owner refused 335. The place is for rent at 1100 a month. The maths don't add up. IMO, it could be sold for 250 plus throw in 30-50k to make it nice.

I enquired about a 370k house, EA said a bid of 330 and 350 was rejected, went sale agreed at 360 but sale fell through. This was all in the first minute of the phone call. He asked what my budget was. I told him to forget about it. I am still confused what this tactic was trying to achieve. No one will buy that house for 360 this year, so why did he lie to scare off a potential bidder.

I have rang up a few other places to be told they were sale agreed, and yet they are still advertised on the net as for sale.

I feel like Sherlock Holmes trying to piece this mystery together.

Anyway, I too think prices have some way to fall in order for a 3 bed house to be affordable to a young (late 20's) couple on average or above salary. I would like the income multiples to come down ( My wife and I are approved at 4.5 times income which seems to me still to be very high). I will try to set up a few viewings of houses, hell I may even put a bid in if the finances make sense (I'm thinking asking price minus 25/30% to build in this & next years price drops).

BenEadir

Okeydoke1,

I'm not an EA but here are my thoughts on some of the issues you raised:-

1. The EA was imparting info to you on refused offers and asking you what your budget is becuase he a) doesn't want to waste his own time showing houses where the seller has instructed him he/she won't take less than the "rock bottom" price they are advertising it at and b) if he understands what your budget is he might be able to recommend something which you may not have seen already.

2. A lot of sellers are in denial about price drops and/or are not in a position where they HAVE to sell so they set the minimum price they will sell for and tell the EA not to even bother them with anything that isn't bang on or very close to that figure.

Hope that puts some perspective on it for you.

Keep looking and best of luck, I'm sure if you're patient, get some EA's onside (let them know your budget and you are in a position to close a deal) and don't settle for second best you'll eventually find what you're looking for.

Ben

DublinWriter

DublinWriter wrote: »

Apples and oranges my friend.

Globalised world we can compare. We should especially compare with Europe as we are linked through the Euro.

okeydoke1

BenEadir wrote: »

Okeydoke1,

I'm not an EA but here are my thoughts on some of the issues you raised:-

1. The EA was imparting info to you on refused offers and asking you what your budget is becuase he a) doesn't want to waste his own time showing houses where the seller has instructed him he/she won't take less than the "rock bottom" price they are advertising it at and b) if he understands what your budget is he might be able to recommend something which you may not have seen already.

2. A lot of sellers are in denial about price drops and/or are not in a position where they HAVE to sell so they set the minimum price they will sell for and tell the EA not to even bother them with anything that isn't bang on or very close to that figure.

Hope that puts some perspective on it for you.

Keep looking and best of luck, I'm sure if you're patient, get some EA's onside (let them know your budget and you are in a position to close a deal) and don't settle for second best you'll eventually find what you're looking for.

Ben

Cheers.

Point 1. a. Yes, the seller may be unrealistic - good point. b. I don't get this - the EA should never be told what what my budget is. A phantom bidder will soon enter the market to try to jack up the price to the amount of money I have