Housing Bubble Bursting

davej

lol, are you his agent?????

I don't think McWilliams needs to have someone pimping his articles on boards.ie..but maybe I should approach him and see if he's interested?

davej

D'Peoples Voice

patrickolee wrote:

But on the plus side... if the petrol goes up, it will depress the european economies, which of course will mean.... interest rates fall :-) Every cloud and all that!

I was trying to find a paper that was wrote on behalf of the World Bank, but anyway the gist of it was that oil prices have a smaller impact in the GDP growth in developed countries today that they did in those same countries in the last 70's/early 80's. It's to do with the level of diversification within those economies, however the less developing countries are hit very hard.
Hence while our economies may continue to grow, albeit at a slower pace(but not a negative rate) our inflation would also remain high! This is good news for a home buyer, as the unthinkable would be a recession coupled with deflation would mean possible loss of a job and a loan that is increasing in real terms!

dochasach

miju wrote:

yes indeed blindjustice , in fact here is Googles cache of the thread. though it only shows 5 pages but you can easily get the jist of the rest from the first 5 pages

Pity these cached quotes won't be around for the history books: "I'm the most unracist person out there...he's the most unracist person in the world..."

Ireland was very smuggly anti-racist and pro-immigrant, until people of different races and ethnicities started immigrating to Ireland. Unless we confront racism directly and refocus blame onto a self-serving government, rising racial hatred will be one of the most unfortunate fallouts of the property crash.

In a frictionless economy where labor, money and goods can freely flow across borders (idealized E.U.) Labor, wages and house prices will eventually even out. With such a level playing field, the main economic benefit there would be to living or running a business in a particular place (say Ireland) would be that government and infrastructure allowed the best quality of life/cost ratio. Efficient governments will attract both labor and jobs, inefficient governments will send both running. Hmm, where are we on that spectrum? In reality, Ireland depends on economic friction in order to keep it's economy spinning along with a higher standard of living than Poland and Hungary. Either Ireland should close her borders and pretend the rest of the world doesn't exist (which didn't even work for China), or we should demand a more efficient government.

I wonder how many of those WeddingsOnline crowd who were whinging about "dirty foreigners" taking their jobs, own holiday homes in Spain or Turkey where they are pricing locals out of their homes and forcing them to emmigrate... to Ireland!

newestUser

dochasach wrote:

Pity these cached quotes won't be around for the history books: "I'm the most unracist person out there...he's the most unracist person in the world..."

I find this from that posters profile amusing...

Location: Dossing on a seat in work

So, in addition to having a problem with the free market when it works against her, she's lazy and ineffective in her own job?

Pffft. She needs a good kick up the arse IMO.

robd

That really was an appalling thread on weddingsonline.ie.

It's such a common thing for Irish people (particularly the older generation I'm afraid) to think that prefixing any sentence with the words "I'm not a racist but" absolves them from being a racist. The person who started the thread was an out and out bigoted racist.

An interesting thing that I picked up in this thread was the constant reference to foreigners (although I prefer the use of the word migrant) working for less than the minimum wage. I'd be fairly certain that they are not working for less than €8.65 per hour. I'd guess they are working for less than €14.25 per hour which seems to be referred to as a minimum construction wage. I don't believe there is such a thing as a legal minimum construction wage rather this is a minimum union agreed rate. A non union person could therefore work for whatever they wish. The only obligation on the employer would be to pay over the €8.65. This seems to be what is happening.

It looks like the construction unions are on the way out, similar to way as the printing unions have over the last 5 years. Like it or not we seem to be heading in the direction of the American employment market rather than the French employment market. As someone who works in the IT/Telco area this is what I'm used to so it's not something that particularly bothers me. Most of my experience of unions (through friends who were members and where getting ridiculous overtime etc. till it all came crashing down) is nothing but bad.

I find it hard to sympathize with the out of work builders. I and many other friends have had such trouble with any work we tried to get done. The ridiculous prices, antics and rudeness when questioned on such matters was simply deplorable. It seems that every bully from school who failed miserable academically found their way into high paid construction work.

It looks like a hard land for most of them who are going to have to get used to wages circa €350 per week again rather than €350 per day. Given the lack of training required to do this kind of work, the easiness with which a person can enter that labor market and the ready supply of migrants this is somewhat predictable. With the decline in demand for property and construction in general there really isn't that much economic value in what they do. I was pretty appalled at the money they were pulling in to be honest. They were earning far in excess of what most professions were paying.

I believe it was Brian Lenihan who made the comment that although we haven't had significant problems with racism to date, it's something that is going to increasingly rare it's ugly head over the coming months and years. I suspect that thread on weddingsonline.ie is only the beginning.

HelterSkelter

miju wrote:

she was basically pissed that some foreigners went up to a foreman and said they'd work for half the wages of an Irishman. if you ask me she should give her lazy assed husband a slap upside the head and get him to take any job construction or not.suppose it highlights the "proudness / arrogance" of the Irish of how certain jobs are beneath us :rolleyes:

I don't think it's unreasonable to be pissed off at somebody coming in and undercutting you, especially if you cannot afford to work for less than you are being payed due to mortgage repayments, etc. I would be extremely pissed off if my boss employed somebody else to do my job at half the going rate. What happens if this becomes the norm and as a result we all have to work for less money? Then everyone's standard of living (with the exception of owners of the companies) will drop dramatically, people will not be able to affort their mortgage repayments and have their homes reposessed.

What effect would taking a 50% cut in your income have on your circumstances?

newestUser

HelterSkelter wrote:

I don't think it's unreasonable to be pissed off at somebody coming in and undercutting you, especially if you cannot afford to work for less than you are being payed due to mortgage repayments, etc. I would be extremely pissed off if my boss employed somebody else to do my job at half the going rate. What happens if this becomes the norm and as a result we all have to work for less money? Then everyone's standard of living (with the exception of owners of the companies) will drop dramatically, people will not be able to affort their mortgage repayments and have their homes reposessed.

What effect would taking a 50% cut in your income have on your circumstances?

This is going to turn into a "free market: yay/nay" thread.

I don't see anything morally wrong with someone undercutting you. People are paid the market rate for their job. No-one's entitled to a particular rate of pay, because they've a standard of living to maintain. You might be pissed off because you're being undercut, but hey since when was life fair?

Disclaimer: I'm ignorant of economics and sociology, so my views on this aren't particularly informed. But still, in a free market, people can charge what they want for goods/services, and I think that's an important liberty.

whizzbang

HelterSkelter wrote:

I don't think it's unreasonable to be pissed off at somebody coming in and undercutting you, especially if you cannot afford to work for less than you are being payed due to mortgage repayments, etc. I would be extremely pissed off if my boss employed somebody else to do my job at half the going rate. What happens if this becomes the norm and as a result we all have to work for less money? Then everyone's standard of living (with the exception of owners of the companies) will drop dramatically, people will not be able to affort their mortgage repayments and have their homes reposessed.

What effect would taking a 50% cut in your income have on your circumstances?

This is just how the free market works. If you have more people willing and able to do the job then there are jobs, the wage goes down. If we insist on paying high wages to everyone then we will have inflation that eat up those wages quicker and it means we become less and less competitive! When we become less competitive we have less exports and less money coming into the country! When there is less money coming in, wages will have to drop. There is no avoiding it.

HelterSkelter

whizzbang wrote:

This is just how the free market works. If you have more people willing and able to do the job then there are jobs, the wage goes down. If we insist on paying high wages to everyone then we will have inflation that eat up those wages quicker and it means we become less and less competitive! When we become less competitive we have less exports and less money coming into the country! When there is less money coming in, wages will have to drop. There is no avoiding it.

A lot of the foreign workers who are doing the undercutting are not here for the long haul, they are here to save so they can buy a place back home. Once they have enough money they are gone. Many of them have very bad living conditions while they live here, they are sharing flats with a lot of others. That is why they can afford to work for a much lower rate. If everyone's wages come down to this rate then we will all have to live in similar conditions. Do you fancy having to share a flat with all of your mates and their partners while working your guts off in the hope you can some day in the distant future buy a house here? Be honest with yourself, if your salary, is cut by 50% tomorrow what effect will this have on your life? And do you think anyone else will benefit from this cut apart from your employer?

A Random Walk

These workers are doing nothing that the Irish weren't doing 20/30 years ago. We forget very easily at how grateful we were for those other countries taking us in at that point in our history.

newestUser

HelterSkelter wrote:

A lot of the foreign workers who are doing the undercutting are not here for the long haul, they are here to save so they can buy a place back home. Once they have enough money they are gone. Many of them have very bad living conditions while they live here, they are sharing flats with a lot of others. That is why they can afford to work for a much lower rate. If everyone's wages come down to this rate then we will all have to live in similar conditions. Do you fancy having to share a flat with all of your mates and their partners while working your guts off in the hope you can some day in the distant future buy a house here? Be honest with yourself, if your salary, is cut by 50% tomorrow what effect will this have on your life? And do you think anyone else will benefit from this cut apart from your employer?

You walk into a supermarket tomorrow to do your weekly shop. All foreign goods have been taken off the shelves, and replaced with Irish-produced equivalents, which happen to be twice as expensive. What would you do? You'd probably go find somewhere else to do your shop. Which is what I'd suspect employers would do if they were forced to pay above the market price for their staff.

I work in IT. I left college in 2001, and could not find work. I had to go back to college. My salary is much lower now than I thought it would be in 1999/2000. I live in shared accomodation, and will continue to do so for the foreseeable future while I save up enough money to buy a house. I'm not eaten up inside thinking that this is unfair. I accept that it's just the way things worked out, that there was an oversupply of IT grads and an undersupply of IT work 4/5 years ago. Your hypothetical doomsday scenario is my reality, and it's a reality for plenty of people across many industries. I don't whine about it, I accept that this happens in the real world. Forcing an employer to give me a job which isn't justified by the economic conditions they operate in would be a bad thing.

jmayo

HelterSkelter wrote:

A lot of the foreign workers who are doing the undercutting are not here for the long haul, they are here to save so they can buy a place back home. Once they have enough money they are gone. Many of them have very bad living conditions while they live here, they are sharing flats with a lot of others. That is why they can afford to work for a much lower rate. If everyone's wages come down to this rate then we will all have to live in similar conditions. Do you fancy having to share a flat with all of your mates and their partners while working your guts off in the hope you can some day in the distant future buy a house here? Be honest with yourself, if your salary, is cut by 50% tomorrow what effect will this have on your life? And do you think anyone else will benefit from this cut apart from your employer?

So Helterskelter can I ask did you have parents, aunts, uncles or even siblings that worked in UK, USA or Germany?
Do you have any relatives that have worked abroad?

I come from a part of Ireland where almost all my class in secondary school emigrated. Some went to 3rd level and even they emigrated.

We complained that Irish were given a rough time in UK, that the Irish were used if they were illegal in US and didn't have a green card but now we start harping on when foreigners who come to work in our country are not here for the long haul.
Talk about hypocritical :rolleyes:

Raskolnikov

Unemployment at 4.6% now.

It'll be interesting to see will immigration hold up now that we'll have less and less jobs in the coming months.

Boggle

Unemployment at 4.6% now.

Question; how accurate are these figures? ie do they count everyone on the register at a given date or just those long term?

The reason I ask is because anyone I talk to in builders wholesalers (like chadwicks, etc) have told me that they have been dead for months. A solicitor was also telling me how glad he was that he still had criminal work as conveyancing was dead and several auctioneers have told me that absolutely nothing is shifting!! (Clonmel/carrick area btw)
I am just wondering if we are being told the full extent of whats going on and am very worried for the country in 2 years time if things continue as you can be sure the bills still have to be paid...

(even my own company is involved in construction and, while its a new company and we are hoping for a slight tightening of the market to boost business (force better building standards rather than the anything will do approach), a complete collapse could make expansion slower!)

nesf

Boggle wrote:

Question; how accurate are these figures? ie do they count everyone on the register at a given date or just those long term?

Brief Intro: http://www.cso.ie/studentscorner/wisliveregister.htm



As for unemployment figures, the percentage will depend on what you define unemployment to be. The National Quarterly Households survey is generally closer to the "truth" than the Live Register.


As for the rest of your post, aren't the summer months a bad season for house sales and building work in general?

gurramok

Builders holidays i think are on Friday 27th July, thats when builders decide if they want to keep employees or not generally so i'm told.

Guess it will be August maybe Sept figures which will indicate a trend.

It don't look good especially with housing starts down 60% last month. As a house can take maybe a year to build give or take a few months, it will be a gradual increase for the full impact to be seen hence 2008 will be alot worse.

And yes, the summer months are usually quiet months on the sales side, selling seasons are suppose to be March/April and Sept, they just didn't happen so far like in previous years due to the collapse.

nesf

gurramok wrote:

Builders holidays i think are on Friday 27th July, thats when builders decide if they want to keep employees or not generally so i'm told.

Guess it will be August maybe Sept figures which will indicate a trend.

The last quarter of this year will be very interesting imho. For all kinds of indicators.

whizzbang

HelterSkelter wrote:

A lot of the foreign workers who are doing the undercutting are not here for the long haul, they are here to save so they can buy a place back home. Once they have enough money they are gone. Many of them have very bad living conditions while they live here, they are sharing flats with a lot of others. That is why they can afford to work for a much lower rate. If everyone's wages come down to this rate then we will all have to live in similar conditions. Do you fancy having to share a flat with all of your mates and their partners while working your guts off in the hope you can some day in the distant future buy a house here? Be honest with yourself, if your salary, is cut by 50% tomorrow what effect will this have on your life? And do you think anyone else will benefit from this cut apart from your employer?

If everyone's wages come down, prices have to come down. Its not how much you earn in relation to others that makes you wealthy. If I earned what I earn in Thailand I'd be living like a king, but seeing as I live here its only a regular income. So long as my wage stays the same relative to other people I will live at the same level as I am now.

iguana

whizzbang wrote:

If everyone's wages come down, prices have to come down.

Except for the price of a monthly mortgage repayment.

nesf

whizzbang wrote:

If everyone's wages come down, prices have to come down.

No. It's called stagflation and it happening in the 70s and 80s was the reason for thinking like the above (essentially the Philips curve) is no longer held up as being true. You can have inflation and unemployment go up at the same time, it's not as simple as a one to one relationship.

whizzbang

iguana wrote:

Except for the price of a monthly mortgage repayment.

True, and that's why it such a crime that mortgage payments were allowed to become such a large part of our monthly commitments.

whizzbang

nesf wrote:

No. It's called stagflation and it happening in the 70s and 80s was the reason for thinking like the above (essentially the Philips curve) is no longer held up as being true. You can have inflation and unemployment go up at the same time, it's not as simple as a one to one relationship.

I'm no economist but how can prices stay up if there is no money to pay for things? (Outside things like mortgages which people committed to when there was money around)

With interest rates going up I wouldn't have though stagflation would be a problem?

patrickolee

whizzbang wrote:

I'm no economist but how can prices stay up if there is no money to pay for things?

Most of the things we consume are not created here, so their cost of production (and subsequently purchase) remain high. As an example, if you travel to, Poland, and look at the price of cars. They are nearly the same as here, despite wages been 1/3. On the other hand bread, manufactured locally, is much cheaper.

whizzbang wrote:

stagflation

I love that word.

patrickolee

BTW, anyone catch the piece on Morning Ireland regarding the unions and employers talks with government? Both saying increases to mortgage interest relief would be a possible solution to their discussions. From that I read... There will be increases in Mortgage interest relief! Yippppeeee

whizzbang

patrickolee wrote:

Most of the things we consume are not created here, so their cost of production (and subsequently purchase) remain high. As an example, if you travel to, Poland, and look at the price of cars. They are nearly the same as here, despite wages been 1/3. On the other hand bread, manufactured locally, is much cheaper.

True, but then again, lots of us are choosing to buy the most expensive of everything these days. If you go to Lidl or Aldi you can slash your weekly shopping costs but most people choose not to. I think there is plenty of room for people to get better value before we start being so poor that we can't buy 20c cans of beans. (Not that anyone wants to see us hit that level)

Any chance of getting more rent relief for renters? My rent went up by 150/month this year and no-one is offering renters more relief!

A Random Walk

patrickolee wrote:

BTW, anyone catch the piece on Morning Ireland regarding the unions and employers talks with government? Both saying increases to mortgage interest relief would be a possible solution to their discussions. From that I read... There will be increases in Mortgage interest relief! Yippppeeee

With tax revenues falling did they give any hint as to how they intended financing this?

El Stuntman

patrickolee wrote:

BTW, anyone catch the piece on Morning Ireland regarding the unions and employers talks with government? Both saying increases to mortgage interest relief would be a possible solution to their discussions. From that I read... There will be increases in Mortgage interest relief! Yippppeeee

wow, an Irish solution to an Irish problem

I hope the Real Taoiseach puts his foot down on this one

patrickolee

A Random Walk wrote:

With tax revenues falling did they give any hint as to how they intended financing this?

No... but then its not definite yet either. Just reading between the lines.

whizzbang wrote:

Any chance of getting more rent relief for renters? My rent went up by 150/month this year and no-one is offering renters more relief!

They didn't mention anything about renters, but you'd imagine it would make sense. Rent relief is so laughably low it's negligible.

whizzbang

patrickolee wrote:

No... but then its not definite yet either. Just reading between the lines.


They didn't mention anything about renters, but you'd imagine it would make sense. Rent relief is so laughably low it's negligible.

I think it is something like 500 euro a year. If they did it right is would be self financing as if it was worth 5 grand* then every renter would make sure they were registered with the PRTB and every landlord would have to pay their taxes!

*ain't gonna happen.

miju

I see Dell are to let some 200 staff go. This I think will really hurt public confidence as Dell would be one of the "jewels" in the Celtic Tiger crown so to speak