Housing Bubble Bursting

Monty Burnz

Bear in mind also that the reports from DAFT etc. are records of ASKING prices, not what prices are paid. I can ask the sun, the moon and the stars for a crappy 2 bed apartment in Dublin, but nobody is going to pay it. And yet that price is what is recorded by the DAFT survey.

As others have pointed out, there is definitely now an element of optimistic sellers thinking they can ask 25% more than they will accept so that they can appear give the buyer a 20% discount when negotiating. Of course the reality is that they won't even get as far as negotiations, as the few buyers out there will just laugh at the inflated price and move on to another property.

Treehouse72

Interest rates up today.

House prices, in an instant and by definition, down. Blink of an eye.

Monty Burnz

Treehouse72 wrote: »

Interest rates up today.

House prices, in an instant and by definition, down. Blink of an eye.

Yup, at the stroke of a pen. There will be a few more such strokes coming down the road in the next few years, whether due to our own austerity budgets (tax rises) or from the ECB. The result will be the same either way.

Spiritofthekop

When can i expect to see a proper & realistic fall in house prices on Daft.ie or myhome.ie??

I have the Time's National Price list for 2011/2012 to hand at home and when i compare the prices on these two websites there is a difference of nearly 150,000 in most case's??

I know ive asked this question before on here but im looking to buy in the next year ....when will i see value for money as its poison out there at the moment when i go looking for value for money....

why are estate agents living in the past when i show them the price guide for 2011/2012...???

Thanks.

steve9859

I dont know that there will be any material sales activity for a very long time - certainly not enough to create certainty around prices or create any price points that can be used as guides.

Why would you sell unless you have lost your job and the bank is putting pressure on??? I plan keeping my place for ever given what has just happened, and have no problem doing so. If I need to move city / start a family etc, I will rent my place and rent out and rent somewhere else for myself. Wouldnt have been thinking that a few years ago. I suspect that most ads on daft are from people in my position who have put up an ad as a 'shot to nothing' at a price which is probably unrealistic but actually have no intention of selling where market prices are now. I have two friends who have their houses on the market (both on daft), but no real expectation, nor any need, to sell. the houses are just up on the offchance that someone pays the asking price.

The only thing a buyer can do it keep searching and putting in bids to find that person who has to sell. It is harsh, but amongst all those ads there will be the person who has lost their job, cant afford the mortgage and has a house that the bank is demanding be sold. These will be one offs though I think for years to come

Monty Burnz

steve9859 wrote: »

The only thing a buyer can do it keep searching and putting in bids to find that person who has to sell. It is harsh, but amongst all those ads there will be the person who has lost their job, cant afford the mortgage and has a house that the bank is demanding be sold. These will be one offs though I think for years to come

But it is those few that sell that set the market price, so the folks who are sitting in their properties waiting for prices to return to 'normal' are deluding themselves. Prices are returning to normal - downwards. The bubble was a fantasy, and I think a large part of the population didn't understand that then, and still don't understand it now.

steve9859

Monty Burnz wrote: »

But it is those few that sell that set the market price, so the folks who are sitting in their properties waiting for prices to return to 'normal' are deluding themselves. Prices are returning to normal - downwards. The bubble was a fantasy, and I think a large part of the population didn't understand that then, and still don't understand it now.

Im not deluding myself. Just because people arent prepared to sell it doesnt mean they are deluded about the price. I know market values are lower than where I am prepared to sell. But if you rent out your spare room, mortgage is not much more than rent would be - OK if you have a 1 bed apartment you are in a different position, but one bed apartments were always a bad buy anyway that wouldnt hold their value. So therefore why sell when yhou can sit on the property for ever if necessary. Why does one need to sell? A disfunctional mortgage market makes no difference to me at all

I am talking apartments and houses in decent locations here. in an out of town estate, I agree you might be better off cutting and running. But for the reasons I said above, I think the market will in City areas will remain so thin, than any meaningful price points will be impossible to establish for years

Monty Burnz

steve9859 wrote: »

Im not deluding myself.

Steve, just for clarity, I didn't say or mean to imply that you were deluding yourself.

Highly Salami

steve9859 wrote: »

, but one bed apartments were always a bad buy anyway that wouldnt hold their value.

I agree with most of what you say, except this bit, 1 beds apartments go up (and down) with the rest of the market, their only disadvantage is that you don't have a spare room you could rent out if you are living there alone.

Monty Burnz

Highly Salami wrote: »

I agree with most of what you say, except this bit, 1 beds apartments go up (and down) with the rest of the market, their only disadvantage is that you don't have a spare room you could rent out if you are living there alone.

1 bed values usually collapse the most in a bust, based on the British experience in the 80s/90s. I guess that means they may also inflate the most in a bubble.

spockety

I know of a specific case where there is now a 2 bed apartment advertised for sale in a development at 50% of the price that a 1 bed was sold for in 2008. What that values the 1 bed at is anyone's guess.

:eek:

Highly Salami

spockety wrote: »

I know of a specific case where there is now a 2 bed apartment advertised for sale in a development at 50% of the price that a 1 bed was sold for in 2008. What that values the 1 bed at is anyone's guess.

:eek:

The 1 bed probably dropped by a similar percentage that the 2 bed dropped.

Spiritofthekop

So is it the wrong time to be looking for a house if you want value??

How many years are we talking before houses prices are value for money and people start buying and selling again??

I'm talking 4/5 bedroom houses in Dublin South. Not apartments

I know of one lovely house that dropped from 700,000 to 640,000 to 600,000 to 500,000 then now down to 450,000....in the space of 16 months.

I would love to buy it but its still over priced by 75,000 going by the 2012 guide. The vendor obviously is telling me to buy now but i just hate the fact that it will probably be worth 100,000 less than that 450,000 in 2 years time, but i know somebody else will pick it up soon as its a stunning house.

Ive been advised by a person very much in the know to wait as she says i will have more options next year at much much better value but i really like this house



Thanks.

Monty Burnz

There is nobody 'in the know'. The people who worked in the property or finance industries are absolutely the last people that anyone should listen to - these were the people telling us that it was a good time to buy in 2007, and who were telling us that 5% falls in 2008 represented a bargain (when it was obvious to anyone with a brain that the carnage had just begun).

All the information that you need to make your decision is in the public domain - there is no other information out there that the 'experts' have access to. The people who have consistently been correct in calling both the housing market and the banking crisis are a group who post on www.thepropertypin.com - if you really want to know what is going on, start reading there. It may save you a fortune, so it is worth the investment of your time.

spockety

Spiritofthekop wrote: »

The vendor obviously is telling me to buy now but i just hate the fact that it will probably be worth 100,000 less than that 450,000 in 2 years time, but i know somebody else will pick it up soon as its a stunning house.

Is it an utterly unique property, nothing else like it anywhere, the likes of which will never ever come on the market again....?

Spiritofthekop

Monty Burnz wrote: »

There is nobody 'in the know'. The people who worked in the property or finance industries are absolutely the last people that anyone should listen to - these were the people telling us that it was a good time to buy in 2007, and who were telling us that 5% falls in 2008 represented a bargain (when it was obvious to anyone with a brain that the carnage had just begun).

All the information that you need to make your decision is in the public domain - there is no other information out there that the 'experts' have access to. The people who have consistently been correct in calling both the housing market and the banking crisis are a group who post on www.thepropertypin.com - if you really want to know what is going on, start reading there. It may save you a fortune, so it is worth the investment of your time.

Thanks for the link.

I will say one thing though that this person in the know advised 3 families (who did not have too or want too sell) all to sell 1 year before everything went #### up!! making these familes an absolute fortune (millions!)!!...they are forever in her debt...probably a complete fluke on her behalf but i cant disregard her advise.

spockety wrote: »

Is it an utterly unique property, nothing else like it anywhere, the likes of which will never ever come on the market again....?

No your right...but there is not much else out there at the moment.

I suppose patience is key here.

djmcr

Spiritofthekop wrote: »

now but i just hate the fact that it will probably be worth 100,000 less than

100000 over the lifetime of the mortgage could cost you up to 300k, and that is money that you will not have to spend on the good things in life

Mr. Loverman

steve9859 wrote: »

I know market values are lower than where I am prepared to sell.

You're waiting for another property bubble to come along? You'll be waiting a long time so.

Property in Ireland is still seriously overpriced, and it will be many years (probably two decades) before the next property bubble kicks off.

steve9859

Mr. Loverman wrote: »

You're waiting for another property bubble to come along? You'll be waiting a long time so.

Property in Ireland is still seriously overpriced, and it will be many years (probably two decades) before the next property bubble kicks off.

I agree. Many many years. Why does that mean you should sell? A mortgage, less rental income from spare rooms, is not much more than rent costs

dazberry

Mr. Loverman wrote: »

You're waiting for another property bubble to come along? You'll be waiting a long time so.

Property in Ireland is still seriously overpriced, and it will be many years (probably two decades) before the next property bubble kicks off.

We're in what's technically knowns as a pre-boom **

** and yes I read that in the Irish Times property section a little while ago...

D.

Mr. Loverman

steve9859 wrote: »

I agree. Many many years. Why does that mean you should sell? A mortgage, less rental income from spare rooms, is not much more than rent costs

Ah yeah, don't sell if you don't want to or don't need to.

robd

Spiritofthekop wrote: »

Thanks for the link.

I will say one thing though that this person in the know advised 3 families (who did not have too or want too sell) all to sell 1 year before everything went #### up!! making these familes an absolute fortune (millions!)!!...they are forever in her debt...probably a complete fluke on her behalf but i cant disregard her advise.




No your right...but there is not much else out there at the moment.

I suppose patience is key here.

Past success is no guarantee of future success.

Honestly though, interest rates are very low and rising. At least 3% rise of the next 18-24 months. Tax rates are rising further each year. Property taxes in the form of a site valuation tax are penciled in for this budget.

4/5 bed houses in decent areas of Dublin are shockingly over priced. They are the segment of the market that has seen the least correction to date.

The central bank report estimates there's a further 30% drop to come over the next too years and all their reports are conservative as that's their nature. 50% is probably more accurate.

Honestly buying at the moment is financial suicide, particularly if you're stretching yourself by the slightest bit. All the risks are to the downside.

My intention is to re-enter the property market in 2013 or 2014, prob 2014 though or very late 2013.

That's dependent on Ireland as a country though. What's going to happen to it over the next 3 years. Once the 85 billion is used up then what? Default. Leave the Euro and devalue currency. It's all and the cards and possible.

2011 is a year to save and not take on debt.

Spiritofthekop

Who wants a Friday laugh!!:D


http://www.myhome.ie/residential/brochure/50-crannagh-road-rathfarnham-dublin-16/1356286


I called Castle and they said the owner values his house at the price shown!!

I said you cannot be serious...they said "well yeah its a little high alright"..."it will probably go for around 600,000 eventually"....

I said 600,000 ...."Still are you serious"....

The house needs about 100,000 spent on doing it up!!


The market value in the 2011/2012 "The Times" House Valuation for Dublin for 5 bedroom "wrecked" house rathfarnham is €395,000

Balmed Out

horrible looking place too.

Dades

Only if they throw in the stuffed cat on the windowsill with it.

Godge

Spiritofthekop wrote: »

Who wants a Friday laugh!!:D


http://www.myhome.ie/residential/brochure/50-crannagh-road-rathfarnham-dublin-16/1356286


I called Castle and they said the owner values his house at the price shown!!

I said you cannot be serious...they said "well yeah its a little high alright"..."it will probably go for around 600,000 eventually"....

I said 600,000 ...."Still are you serious"....

The house needs about 100,000 spent on doing it up!!


The market value in the 2011/2012 "The Times" House Valuation for Dublin for 5 bedroom "wrecked" house rathfarnham is €395,000

Could not believe that ad, thought it was a wind-up so looked directly at myhome.ie and there it was!!! Unbelieveable, 1.2 million wanted for that.

That property is in Dublin 16, not Killiney, Dalkey, Ballsbridge, Foxrock or even Blackrock or Castleknock. Look at the photos, a lovely garden to be sure but a sink in the main bedroom is so 70s and means no ensuite. More than a simple reality check needed.

Spiritofthekop

Dades wrote: »

Only if they throw in the stuffed cat on the windowsill with it.

I know the stuffed cat!

The lone standing sink beside the bed actually sold it for me...

The fact that i could go to bed & just in case i forgot to brush the old teeth...no worries you can do it from your bed without having to get out of it on those cold nights...

that's worth 1 million pounds by itself!!

jmayo

Spiritofthekop wrote: »

I know the stuffed cat!

The lone standing sink beside the bed actually sold it for me...

The fact that i could go to bed & just in case i forgot to brush the old teeth...no worries you can do it from your bed without having to get out of it on those cold nights...

that's worth 1 million pounds by itself!!

I know some people who would consider that sink usable for more than brushing one's teeth. :rolleyes:

Spiritofthekop

jmayo wrote: »

I know some people who would consider that sink usable for more than brushing one's teeth. :rolleyes:

:eek:

DublinWriter

Spiritofthekop wrote: »

http://www.myhome.ie/residential/brochure/50-crannagh-road-rathfarnham-dublin-16/1356286
I said you cannot be serious...they said "well yeah its a little high alright"..."it will probably go for around 600,000 eventually"....

Any estate agent worth his or her salt would know that's the wrong way to sell a house to begin with, especially in this climate.

That property will sit on the market for months, even years and nothing makes a buyer more leery than a house that has been up for sale for an inordinate amount of time.

I would guess that the previous owner of this house is deceased and that the beneficiaries of the will decided on the "let's chance our arm" strategy of property selling. It will end up costing them big time as the market continues to tumble in the next 12 months.