Housing Bubble Bursting

mathie

conor_mc wrote:

Why do you need a source, its only an opinion.

It's nice to be able to back up your argument with facts and logic.

M

MonkeyWrench

Just as a matter of interest - I wonder what it was like in 2001 when house prices dropped a bit and then went back up again, was there as many as houses for sale on the market as there is today?

Colonel Sanders

affordbility as not such an issue then......

gurramok

And we did have a shortage of housing due to the real Celtic tiger boom back then.
Rates came down after 9/11 hence the rest is history. The opposite is happening now.

SkepticOne

MonkeyWrench wrote:

Just as a matter of interest - I wonder what it was like in 2001 when house prices dropped a bit and then went back up again, was there as many as houses for sale on the market as there is today?

Strong disincentives to investment were introduced and later reversed which caused the blip. This was against a background of generally dropping interest rates due to Irelands entry to the eurozone and 911. There was also a bit of fallout after the tech downturn of 2000 and 2001 which would have had an effect on confidence. I don't think there were anywhere near the numbers of houses on the market then compared to now. There might be some report on the daft website which has historical figures. Unfortunately there are no officially gathered inventory figures.

galwaybabe

Just caught the end of a news item on Radio one saying that we are experiencing a "Black Friday" in the construction industry with loads of workers being laid off today. Can anyone elaborate?

SkepticOne

galwaybabe wrote:

Just caught the end of a news item on Radio one saying that we are experiencing a "Black Friday" in the construction industry with loads of workers being laid off today. Can anyone elaborate?

It is start of the traditional "builder's holiday" and it has been suggested that companies will use this as a way of laying off people. Today they will be told that they need not come back after the holiday. The CIF (Construction Industry Federation) are denying that this is happening.

dazberry

MonkeyWrench wrote:

Just as a matter of interest - I wonder what it was like in 2001 when house prices dropped a bit and then went back up again, was there as many as houses for sale on the market as there is today?

The issue wasn't price (I don't recall prices dropping), but the turn around time for property sales. It went from a situation where properties were selling in a matter of days/weeks to months. I heard stories of properties being sale agreed on people seeing the sign being put up in the garden (prior to any form of advertising).

EAs drunk on the fatted tiger - got quite the hangover, there were quite a number of layoffs - but most were watching the IT layoffs so I would imagine missed it...

D.

rocky79

Hi,
Only recently been browsing on this site but found it really insightful and more helpful than most of the reports in the media. Have just been approved for a mortgage (for far more than I thought I would get. Some of the banks are still being wreckless). Am looking to buy fairly soon but will hold off for the next two to three months to see whether any major fall occurrs. My question is a hypothehtical one. If you were to bid for an apartment with a guide price of 340,000, what would you bid. I have heard anecdotes of vendors excepting 310-320 for similarly priced apartments. Has anyone else heard similar stories and is there any excepted rule for bidding below guide price in a buyers market?

thanks

mikemac

Are you a First Time Buyer rocky79?
For an apartment worth €340,000, sure €310,000 is a good starting point.
All they can say is no.

rocky79

Yeah I'm a first time buyer. Been renting for the last couple of years but reckon I can afford to buy the type of place I'm renting for the first time. In no real rush though so if the next couple if indicators are negative, I'll keep my powder dry.

Do-more

galwaybabe wrote:

Just caught the end of a news item on Radio one saying that we are experiencing a "Black Friday" in the construction industry with loads of workers being laid off today. Can anyone elaborate?

RTE News at One report on "Black Friday" here.

Boggle

If you were to bid for an apartment with a guide price of 340,000, what would you bid.

Off the plans? Nothing. Too many stories, even on these boards about noisy and poorly built appartments. If its an existing blockand you know its well built, I'd still be nervous. Reasoning is that I feel an appartment in Dublin (or anywhere) is seriously overpriced and once developers are allowed go up instead of out, it will seriously increase the availability of new, proper sized (once proper regulations come in) appartments in attractive locations.

Say in 5 years, that you want to start a family; how would you manage to move from a poky appartment with potentially stagnant or depleted value to a house which has appreciated? Worse still, there will be f all tax relief for you!!

karen3212

Hi, been reading here for a while. Anyway just finished reading Mark Keenan of the Sunday Times. Absolutely dumbstruck by this statement, "Despite being criticised in the past for cartel behaviour, keeping land prices high by drip feeding the market, rapid collective action by Ireland's builders was vital in preventing a market crash in the past year and will provide a vital safety net in the months ahead.''
I nearly fell off my chair, to hear a paid journalist praise the anti-competitive behaviour. Í'm still fuming. I have a house, but I do not think it is right to keep the price of homes high, so that old people can feed off the young. This is a national disgrace, for pity's sake a home. I suppose some homeowners think it's ok for supply to be curtailed, it's ok for people to be homeless, , because they can't afford manufactured high prices. I am so disgusted that this guy is praising this. Who are we?

sorry spelling error fixed, could be more

miju

MicraBoy wrote:

I'd say it's rare that some one goes sale agreed on one place and then withdraws and decides to stay out of the market altogether.

you forgot the most common reason sale agreeds fall through and whats currently completely stifling the market. and that the purchaser of the sale agreed property cant sell their own

patrickolee

karen3212 wrote:

Hi, been reading here for a while. Anyway just finished reading Mark Keenan of the Sunday Times. Absolutely dumbstruck by this statement, "Despite being criticised in the past for cartel behaviour, keeping land prices high by drip feeding the market, rapid collective action by Ireland's builders was vital in preventing a market crash in the past year and will provide a vital safety net in the months ahead.''
I nearly fell off my chair, to hear a paid journalist praise the anti-competitive behaviour. Í'm still fuming. I have a house, but I do not think it is right to keep the price of homes high, so that old people can feed off the young. This is a national disgrace, for pity's sake a home. I suppose some homeowners think it's ok for supply to be curtailed, it's ok for people to be homeless, , because they can't afford manufactured high prices. I am so disgusted that this guy is praising this. Who are we?

sorry spelling error fixed, could be more

When you say homeless... of course you mean don't _own_ their own home. They aren't quite walking the streets!

What he says is true... as unpalettable and unpopular as it may be. Besides, he wasn't praising it, quite the opposite in fact. From your quote above it's clear he was saying that even though he critises and disapproves of it, it will have the side effect of stabilising. Albeit undesireable.

karen3212

patrickolee wrote:

When you say homeless... of course you mean don't _own_ their own home. They aren't quite walking the streets!

What he says is true... as unpalettable and unpopular as it may be. Besides, he wasn't praising it, quite the opposite in fact. From your quote above it's clear he was saying that even though he critises and disapproves of it, it will have the side effect of stabilising. Albeit undesireable.

No I mean curtail the supply of an essential item, therefore dribbling down to leaving the worst hit homeless.

Also I think if a young family want to buy and do up and make holes in the wall of a house then they should have a right to.

It seemed like he was praising it to me, and saying it was a good thing that they could act like a cartel. Builders etc will find plenty of work in the UK, there is loads going on there at the mo, I'm not really worried about them loosing out too much if house prices fall.

SimpleSam06

patrickolee wrote:

What he says is true... as unpalettable and unpopular as it may be.

No, curtailing build rates at this point is a futile gesture. With six figure numbers of houses sitting empty nationwide, the number of houses coming on to the market will in fact increase dramatically over the coming years. Ya shoulda thunk of dat a few years back boys! Sounds like Keenan doesn't know his arse from his elbow tbh...

miju

as argued earlier on in this thread curtailing new builds is like applying a sticky plaster to a broken leg its not going to work short OR long term.

we're already seeing the effects of this curtailing in that theres a massive cull of construction jobs on the way (as in thousands). whats that going to do to the economy , sentiment and so on.

we're between a rock and a hard place and we're better off just taking the very painful quick medicine rather than trying to drag it out for some longer term suffering so we the economy can begin to return to proper fundamentals and be genuinely healthy instead of looking "bouyant" when in reality all it is , is a hyper inflated construction sector.

SkepticOne

Where is Keenan getting this stuff from? 93,000 units built last year while the market was stalling is not drip feeding and even with cutting back this year and creating unemployment among building workers the worst case scenario is 60,000 to 70,000. This is a huge rate of building for such a small country. No one would describe it as drip feeding.

The idea that builders are going to nobly cut back on their own profits to maintain prices for those who have bought is ludicrous. The simple fact is that they can't sell in the numbers they used to and are forced to offer white goods, cash backs and mortgage payments in order to get people to buy their depreciating assets.

DonJose

Did anybody notice the huge number of listings added to Daft.ie today, over 2,000 "For Sale" listings were added bring the total number to 49,500, compare this to under 15,000 listings this time last year.

http://daftwatch.atspace.com/

iguana

DonJose wrote:

Did anybody notice the huge number of listings added to Daft.ie today, over 2,000 "For Sale" listings were added bring the total number to 49,500, compare this to under 15,000 listings this time last year.

http://daftwatch.atspace.com/

Sometimes with a spike like that it's a fault at Daft. Daft has 48,915 listings now.

iguana

Article in Saturday's Guardian money section;

Why Irish eyes are watering


Patrick Collinson
Saturday July 21, 2007
The Guardian

It's a scenario some doom-mongers see unfolding in the UK over the next few years. First-time buyers start taking 35-year mortgages to get a first step on the property ladder. They buy in far-flung locations - the only places they can afford - and commute for hours into the city. But interest rates start climbing, house prices start falling, and buyers find themselves trapped in negative equity.

But this isn't a vision of the near future. It's what has been happening in Ireland since the start of the year - and will send shudders through anyone in Britain contemplating buying a home for the first time.

contd>>>>

http://money.guardian.co.uk/weekly/story/0,,2131122,00.html

Do-more

More from the papers....

David McWilliams wrote:

Today, we find ourselves subject to a malign economic experiment - the country is facing a housing slump with higher, not lower interest rates. No country in the world has ever faced the prospect of negative equity and a falling housing market without the cushion of falling interest rates.

We are a test case. This brings us to the central inconsistency at the heart of Irish economic policy. As we can’t cut interest rates and allow our currency to fall, we face a long slump as falling house prices cause people to rein in spending, and higher interest rates reinforce this process.

Sunday Business Post article

Gurgle

David McWilliams wrote:

No country in the world has ever faced the prospect of negative equity and a falling housing market without the cushion of falling interest rates.

The only important word in that sentence.

The whole article is just more of the same old crap - based on the assumption that anyone with negative equity will have to immedietly sell their house.

iguana

It's not entirely true though is it. Spain is in the same boat, with a falling housing market which is actually a bit further into it's slump than we are and they can't do anything about their interest rates either.

chump

Gurgle wrote:

The only important word in that sentence.

The whole article is just more of the same old crap - based on the assumption that anyone with negative equity will have to immedietly sell their house.

Good one. Prospect, try reality - you still don't believe it?

And are you suggesting that negative equity only effects those that do sell?

miju

Gurgle wrote:

The only important word in that sentence.

The whole article is just more of the same old crap - based on the assumption that anyone with negative equity will have to immedietly sell their house.

jesus Gurgle the dogs on the street know whats happening at this stage with prices will you try and least acknowledge that and join us in the land of reality. Because someone is in negative equity doesnt mean they should immediatly sell their house in fact it usually means the exact opposite and people cant move / trade up because of the negative equity which of course means even more inventory for sale for buyers.


Haven't the linky handy but anyone see the article in todays Sunday independent 14,500 contruction workers face losing jobs. The CIF basically say approx 7.5% (or 14,500) of the entire house building workforce will lose their jobs by year end.

However, they expect capital spending from the NDP to absorb some of these workers and the rest to move to London to see if the grass if greener. Don't know about you but I dont know how many brickeys , tilers etc are used for road building :rolleyes:

Do-more

miju wrote:

However, they expect capital spending from the NDP to absorb some of these workers and the rest to move to London to see if the grass if greener. Don't know about you but I dont know how many brickeys , tilers etc are used for road building :rolleyes:

Article in the SB Post on the same subject Brickies’ pay collapses in building slowdown

Do-more

Sindo article here