Housing Bubble Bursting

gsxr1

Letter to the Indo published today.
I would think it reflects the majority of the population opinion and anger .


_____________________________________
Thursday July 08 2010
I could hardly believe my eyes as I read the report on how the asylum seekers in Mosney have refused to be moved to new accommodation (Irish Independent, July 7).

If the free housing, clothing and food they receive from the Irish taxpayer isn't acceptable to them, why not just send them back to whichever country they came from?

I know a lot of people who would be delighted to have free housing from the State, yet here we have people who aren't even Irish citizens turning their noses up at it.

Is it any wonder there is racism in this country when foreigners in this land can get for free what most Irish people have to work for, and still it's not good enough for them?

Obviously they've forgotten they're guests in this country.

I think the Government should start rounding them up and sending them home; I can guarantee the rest will soon be delighted with their free accommodation.

Irish Independent

http://www.independent.ie/opinion/letters/send-the-asylum-seekers-home-2250335.html

quozl

gsxr1 wrote: »

Letter to the Indo published today.
I would think it reflects the majority of the population opinion and anger .

I don't know any better than you do, but I really doubt it.

Dealing with their cases in a timely manner would be a start, instead of moving them around like cattle after they've lived in an area for years and years. They have my sympathy frankly - they would rather live in mosney for 5 years or more in cases than go back home. If their applicatins are false they should be repatriated but we won't find that out until we get the fecking finger out and actually process them.

The suggestion that because they're guests that should be happy to accept any standard of treatment shows the writer of that letter is an idiot.

Are you ascribing these views to the majority because you want that to be the case? Or were you just curious?

Jesus Wept

gsxr1 wrote: »

Letter to the Indo published today.
I would think it reflects the majority of the population opinion and anger .


_____________________________________
Thursday July 08 2010
I could hardly believe my eyes as I read the report on how the asylum seekers in Mosney have refused to be moved to new accommodation (Irish Independent, July 7).

If the free housing, clothing and food they receive from the Irish taxpayer isn't acceptable to them, why not just send them back to whichever country they came from?

I know a lot of people who would be delighted to have free housing from the State, yet here we have people who aren't even Irish citizens turning their noses up at it.

Is it any wonder there is racism in this country when foreigners in this land can get for free what most Irish people have to work for, and still it's not good enough for them?

Obviously they've forgotten they're guests in this country.

I think the Government should start rounding them up and sending them home; I can guarantee the rest will soon be delighted with their free accommodation.

Irish Independent

http://www.independent.ie/opinion/letters/send-the-asylum-seekers-home-2250335.html

No, that person is a moron.

gsxr1

quozl wrote: »

I don't know any better than you do, but I really doubt it.

Dealing with their cases in a timely manner would be a start, instead of moving them around like cattle after they've lived in an area for years and years. They have my sympathy frankly - they would rather live in mosney for 5 years or more in cases than go back home. If their applicatins are false they should be repatriated but we won't find that out until we get the fecking finger out and actually process them.

The suggestion that because they're guests that should be happy to accept any standard of treatment shows the writer of that letter is an idiot.

Are you ascribing these views to the majority because you want that to be the case? Or were you just curious?

I dont know. Im still sitting on the fence on this.

I do believe there to be Irish citizens in worse present economic positions , struggling to feed their family, why these people in mosney seem to disapprove of getting it for nothing.
But I also respect that some of them may have had a very difficult life and no longer want to be herded around. I really feel sorry for people in that respect.

My views are somewhat mixed. I like most people are having a very hard time keeping afloat with my mortgage. I dont think as an Irish person in Ireland, I would be afforded the expense that the asylum seekers have benefited from. In fact I would not.

I think it would be only natural to feel slightly angry . It seems to be the opinion of nearly everyone I have talked to about it.


I do 100% believe these people should have their status confirmed. Either IN or OUT. This Limbo thing is getting everyone , nowhere.

Chances are, most of them are economic migrants who arrived too late to drink from the milk of the Celtic tiger!

seamus

Actually the vast majority of them (106 out of 109 afair) have already have asylum refused, but are appealing their cases. Which they can probably do ad infinitum, at the expense of the Irish taxpayer. Just look at that Izbekhai one (however you spell her name). She will just keep producing false documents and appealing over and over again until someone gets pissed off and lets her stay.

Pittens

Ignoring the asylum thing.

It is a measure of how screwed-up our collective psychologies are by the property bubble that it appears there is a generation of people who think the only way low earners can put a roof over their head is by renting. They can't seem to connect the dots and see that this has only been necessary in recent years because of bubble sales prices

Exactly. Some of the proponents of the continuing boom used to argue that.

1) We were a property owning democracy with 80% of the population wanting houses. That meant massive pent up demand. ( they particularly emphasised this during the initial slowdown).
2) When people complained about being priced out the argument changed to "Why should people on minimum wages, low wages, average wages, above average wages ( as they boom went on the level changed) expect to buy a house?"

in the 80's the home ownership was about the same as now 75% and 80% of the population were employed. Considering that there are always renter ( who then go onto buy) it seems that most people in work bought a house at some time.

Pittens

By the way is it still true that in parts of South Dublin you can apply for affordable housing if less than 58K single income, or 70K household and married? A British MP could get that.

Pittens

Pittens wrote: »

By the way is it still true that in parts of South Dublin you can apply for affordable housing if less than 58K single income, or 70K household and married? A British MP could get that.

The income levels required for "affordable housing" so clearly demonstrate just how screwed the system became!

At least now, it's unwinding, taking the greedy b@stards (plus quite a large number of mugs ordinary householders with them) to the cleaners.

maninasia

ozmen wrote: »

Rents rise a lot more than mortgage payments. I have colleagues who are lucky enough to be 10 years older than me and bought their houses in the 90s. They have paltry mortgages of a 200-300pm. To rent the house they're living in would cost 1000pm today.

Admittedly the boom had a lot to do with that divergence, but there will always be inflation, even if the ECB manages to keep it at 2%, and so to rent the same house in ten years will cost you a lot more than it costs today, whereas if you buy that house today your mortgage payments will be relatively steady over the same period (there is the risk of periods of high interest rates but its a risk, not a guarantee)

Except Ireland has experienced severe deflation especially with falling wage packets and unemployment. Ultimately the days of cheap credit worldwide will disappear as confidence crumbles due to rolling defaults..it just needs a trigger, then interest rates will rocket. Could be next year or 5 years later.

maninasia

maninasia wrote: »

Except Ireland has experienced severe deflation especially with falling wage packets and unemployment. Ultimately the days of cheap credit worldwide will disappear as confidence crumbles due to rolling defaults..it just needs a trigger, then interest rates will rocket. Could be next year or 5 years later.

Any significant rise in interest rates will push many families over the edge.
The drop in income has put many in a precarious situation already, how can house prices not continue to fall in such circumstances

mari2222

In 1977 an entrant clerical officer in public sector earned circa 4400 euro.
At 2010 the same real figure is c. 23000 - (the "expected value" applying the Consumer Price Index 1977-2009 would be €22210 which is pretty close).

In 1985, a person same as above would have actually earned €11400 and a good 4-bed semi 30 miles from dublin city centre could be bought for c.€27000, or about two and a half times pay.

So the "expected price" of same in 2010 should be about €57,500!

norrie rugger

mari2222 wrote: »

In 1977 an entrant clerical officer in public sector earned circa 4400 euro.
At 2010 the same real figure is c. 23000 - (the "expected value" applying the Consumer Price Index 1977-2009 would be €22210 which is pretty close).

In 1985, a person same as above would have actually earned €11400 and a good 4-bed semi 30 miles from dublin city centre could be bought for c.€27000, or about two and a half times pay.

So the "expected price" of same in 2010 should be about €57,500!

factor in that most houses are now dual income and sellers will always see that the price should be double that

am i bovvered

mari2222 wrote: »

In 1977 an entrant clerical officer in public sector earned circa 4400 euro.
At 2010 the same real figure is c. 23000 - (the "expected value" applying the Consumer Price Index 1977-2009 would be €22210 which is pretty close).

In 1985, a person same as above would have actually earned €11400 and a good 4-bed semi 30 miles from dublin city centre could be bought for c.€27000, or about two and a half times pay.

So the "expected price" of same in 2010 should be about €57,500!

I take the point, but you would need to factor in interest rates to be realistic.

seamus

Yep interest rates are the most important factor there as they are the primary limiting factor in terms of what people can afford to borrow, and therefore what they can afford to pay.

Saying that a house should be proportionally worth €57,500 is all well and good, but if there are 4 people looking to buy that house and one of them is able to get their hands on €200,000 (and is willing to pay that for the property), then they're going to push the price up until they've outbid the other 3. Economics 101 really.

The key is what happens when availability goes through the roof like we have now. So instead of there being 4 buyers for one home, you now have 4 comparable homes for one buyer, and they must compete and drop their prices to a level that the buyer will accept.

As also said, it must be taken into account that many households now have two incomes - out of choice moreso than necessity, which effectively doubles that "2 and a half times" figure to €115,000. No hope for a 4-bed semi-D within Dublin county there, but give it another 18 months and you probably wouldn't be far off that in the commuter belts.

As noted by the last Daft report, oversupply is a major problem proportionally outside of Dublin. I wouldn't be surprised if we see big family homes - 4 and 5 beds - going for less than €200k in the likes of Mullingar, Athlone & Thurles.

ZYX

mari2222 wrote: »

In 1977 an entrant clerical officer in public sector earned circa 4400 euro.
At 2010 the same real figure is c. 23000 - (the "expected value" applying the Consumer Price Index 1977-2009 would be €22210 which is pretty close).

In 1985, a person same as above would have actually earned €11400 and a good 4-bed semi 30 miles from dublin city centre could be bought for c.€27000, or about two and a half times pay.

So the "expected price" of same in 2010 should be about €57,500!

Do you have figures to back any of this up or is it just opinion? My neighbours bought their house (4 bed roomed) in 1971 for more than €27,000. I bought my first house (3 bedsemi) in the early 90s for about €90,000. Is this a single house you are talking about or average house price? Average house price back in 1985 would have been about €50-55K

oceanclub

norrie rugger wrote: »

factor in that most houses are now dual income and sellers will always see that the price should be double that

Does anyone actually have exact figures on this assumption? I've only been able to find an article from 2002:

http://www.independent.co.uk/news/uk/home-news/britains-dinkies-head-european-league-table-651916.html

Even then, only 54% of childless couples in Ireland had dual incomes - we're one of the lowest in Europe. Needless to say, the figure for couples with children would be a lot lower. And that's before today's exhorbitant childcare costs.

If you count in the number of one-parent households on top of that, it seems to me that the assumption that most homes are dual-income is probably incorrect.

P.

Treehouse72

norrie rugger wrote: »

factor in that most houses are now dual income and sellers will always see that the price should be double that

Yeah, I'd like to see corroboration on this too.

mari2222

Just a note on the figures I used in my post :

cso.ie has the Consumer Price Index changes over the years mentioned.
2010 clerical officer salary at entry pops up if you google.

I have papers to hand showing the CO entry salary at 1/3/76 was (pounds) 2096, 4748 at 1/3/82, 5688 at 1/3/83, 7203 at 1/1/88.....add about 25% to convert to Euro. Can email these to anyone who wants to see them.

The house price used 1985 was a real price - I agree its about 50-60% of the then "average house price"; - the vast majority of houses selling prices have to be below the average, don't they e.g. if 9 houses sell at 100000, 1 sells at 1.1m, average price 200,000, but 90% are half the average price. Those last figures are a simplified formula - I don't know the percent which are below average or the percent which are half of average price! I think even today a starter home could be got for half the "average price", but my real moan is that young people starting off dont have a chance to buy at a price they could be comfortable with, or that wouldnt put them in jeopardy if they were unemployed/ sick / in difficulties during the course of the mortgage.

ZYX

mari2222 wrote: »

Just a note on the figures I used in my post :

cso.ie has the Consumer Price Index changes over the years mentioned.
2010 clerical officer salary at entry pops up if you google.

I have papers to hand showing the CO entry salary at 1/3/76 was (pounds) 2096, 4748 at 1/3/82, 5688 at 1/3/83, 7203 at 1/1/88.....add about 25% to convert to Euro. Can email these to anyone who wants to see them.

By my calculation, taking the 1988 wage of £7203 and increasing it with inflation then starting salary for CO would now be £13,091 or €16,626. Obviously actual pay is about 50% higher than this.

The thing you really need to look at is take home pay rather than gross pay. Lower paid workers have benefited hugely from tax cuts since 1988 and so disposable income to spend on housing is much higher.

mari2222 wrote: »

The house price used 1985 was a real price - I agree its about 50-60% of the then "average house price"; - the vast majority of houses selling prices have to be below the average, don't they e.g. if 9 houses sell at 100000, 1 sells at 1.1m, average price 200,000, but 90% are half the average price. Those last figures are a simplified formula - I don't know the percent which are below average or the percent which are half of average price! I think even today a starter home could be got for half the "average price", but my real moan is that young people starting off dont have a chance to buy at a price they could be comfortable with, or that wouldnt put them in jeopardy if they were unemployed/ sick / in difficulties during the course of the mortgage.

Basing it on a single house obviously means nothing. Most houses are in and about the average price. Perhaps slightly lower but nothing really worth worrying about.

The final thing is I don't believe a person in their first year working should expect to be buying a house.

ozmen

ZYX wrote: »

The final thing is I don't believe a person in their first year working should expect to be buying a house.

I agree, regardless of how far house prices drop a person in their first year of employment won't have the deposit saved up.

If we take it that you can borrow at most 5 times your salary, and that is generous, and that you can only borrow 90%, again generous then the final 10% deposit is over half your gross income. Assuming that you have to live while you save this deposit you are looking at at least 2 years before you have a deposit ready.

I would recommend that people be aiming to borrow only 3 times their salary and that they have a larger deposit, say 20%. In that case they are saving 75% of their gross salary for the deposit and unless they live on bread and butter that will take a few years.

Treehouse72

So, this week we had a series of interest rate hikes from the banks and found out that another 8,000 people joined the dole queue in July. And that was just a sleepy week in the middle of the Summer silly season. We still have the Budget to come in December, and between now and then likely more job losses, more money to go into NAMA and the banks, possibly more rate rises, certainly more emigration and God knows what else. All of this cannot have any other effect than to further depress house prices.

If you think the morkesh is nearing the bottom or even stabilising, you are doing so on the basis of nothing but sentiment, a hunch or mindless optimism. Because there certainly is no evidence that the trend will be anything other than down for months and, almost certainly, years.

Warrior Saint

I agree the interest increase will force houseprices down even more. One of the banks have said that it will not increase rates again this year,BOI I believe, probably means they will hike in January!!

norrie rugger

this thread should be recorded and brought out during any property boom around the globe

Agent J

norrie rugger wrote: »

this thread should be recorded and brought out during any property boom around the globe

People wont listen.

How many years of "But this is different..." Did we hear in Ireland.

20 years from now we will have gone through at least one more bubble/bust and people will swear that will be the last time....

Rinse and repeat.

Fr0g

Agent J wrote: »

People wont listen.

How many years of "But this is different..." Did we hear in Ireland.

20 years from now we will have gone through at least one more bubble/bust and people will swear that will be the last time....

Rinse and repeat.

We have already been fooled again. The same people that convinced a nation that you could run our economy on borrowed money have convinced the nation that "the guarantee will save us" NAMA is "the only show in town", "no alternative", "anglo is systemic" etc. The same politicians the same vested interests, the same compliant media.

The cure is worse than the disease.

AstonMartin

This is a €2.5m house in Dalkey.

Granted the view is amazing but the price seems far too high and I think this property has been on the market for quite a while.

What would you value this house at?

http://www.myhome.ie/residential/brochure/hill-house-torca-road-dalkey-co-dublin/112800

Caoimhín

AstonMartin wrote: »

This is a €2.5m house in Dalkey.

Granted the view is amazing but the price seems far too high and I think this property has been on the market for quite a while.

What would you value this house at?

http://www.myhome.ie/residential/brochure/hill-house-torca-road-dalkey-co-dublin/112800

Pift, sure a half a million will but you this 2 bed cottage in the arse hole of Leitrim.

http://www.daft.ie/searchsale.daft?id=390173

Some people are still living in 2006.

Eglinton

AstonMartin wrote: »

This is a €2.5m house in Dalkey.

Granted the view is amazing but the price seems far too high and I think this property has been on the market for quite a while.

What would you value this house at?

http://www.myhome.ie/residential/brochure/hill-house-torca-road-dalkey-co-dublin/112800

That sort of house could easily get 1.5 - 2 million even today. It's just in a different league and there will always be the few who can throw money at something as exclusive as that. I don't really think that sort of house is what this thread is for. The effect of the bubble caused couples and singletons in the 25K to 100K earnings bracket the most grief; not Joe Millionnaire.

robd

Eglinton wrote: »

That sort of house could easily get 1.5 - 2 million even today. It's just in a different league and there will always be the few who can throw money at something as exclusive as that. I don't really think that sort of house is what this thread is for. The effect of the bubble caused couples and singletons in the 25K to 100K earnings bracket the most grief; not Joe Millionnaire.

Plenty of Joe Millionaires in the 25k to 100k earnings bracket now. Some in the 0 earning bracket too. This recession has affected all brackets. Anyone with a golf club or yacht club membership will be well aware of the pain being felt by those thought to be in the money. Up to half of the boats in Dublin marinas are for sale. Memberships being hemorrhaged.

The reality is that money in this country was an illusion. Those who borrowed the most were thought to be the richest. Unfortunately the general case at the moment is the more you borrowed the deeper the hole you're now in.