Housing Bubble Bursting

chump

Kipperhell wrote:

People still want to own and so many are just waiting for the market to appear stable again before they jump in. The crash has not happened. If you can point out any author that correctly predicted the market over the last ten years I'd love to see it. I doubt there was a single person close

So in summary, if we are incapable of pointing "out any author that correctly predicted the market over the last ten years" we are wrong that there is a crash happening?

I actually haven't a notion what you're trying to say in your post. Can you spell out the argument?

SimpleSam06

Kipperhell wrote:

People still want to own and so many are just waiting for the market to appear stable again before they jump in.

Funny thing about that, Kipper, the market won't be stable until they jump in again. Also point of interest, I wasn't saying it until May of last year.

jimmycrackcorm

Longfield wrote:

Correct, its currently happening.

If it's happening then why do I see so many sale agreed signs on my bus journey to work. While I think that middle to top of the end of the market is taking an absolute hammering with documented tens of thousands coming off prices regularly, the bottom end doesn't appear to be "crashing".

Shouldn't a crash mean a sudden stalling in property sales?

paulie.walnuts

Sale agreed means nothing, very different to an actual sale ask any estate agent and they will tell you the same. As for the sales volumes, read the IT financial section, banks lending is coming way under forecast recently and is down on last year. We are in the crash now.

SkepticOne

jimmycrackcorm wrote:

If it's happening then why do I see so many sale agreed signs on my bus journey to work. While I think that middle to top of the end of the market is taking an absolute hammering with documented tens of thousands coming off prices regularly, the bottom end doesn't appear to be "crashing".

Shouldn't a crash mean a sudden stalling in property sales?

No. Crashes in property markets take a long time to finish. This is because, unlike say stock markets, transactions take a long time to complete as opposed to minutes.

Pa ElGrande

The Irish property crash will be picking up momentum from now on. It's now all out of our hands, because the unwinding credit markets triggered by large scale defaults in the US sub-prime lending sector have spread worldwide and the ending of the property bubbles in other countries such as Spain and Ireland will have a additional negative effect on the ability of Irish lenders to securitise loans and raise funding in the future.
It is loose monetary policies of the banking system that led to the misallocation of resources in this country by concentrating on overbuilding of property and causing the subsequent depletion of the pool of funding, in turn has led to over-indebtedness of the people in this country.
A collapse in monetary funds (credit) is called a depression, and if the situation in the credit markets is not bought under control and fast we are facing the very real possibilty of a 1930's style economic depression.

DublinWriter

In my own case, I recently inherited a house worth about €400K. I was thinking of renting, but the net yields I'd make annually just about equal what I'd get back if I sold the place and put the money in the bank and got a standard deposit rate.

I think that we've peeked on the salad days of capital appriecation. Plenty of investers have done the same sums that I have and are starting to dump their investment property.

I also spoke to a property agent last week who told me that things have really started to go through the floor in the past two weeks. I said to her that I checked out myhome.ie and that I couldn't spot many bargains on it. She said that in a lot of cases sellers are just ignoring the reality of what's currently going on and are holding out for high offers, but will usually give in and sell for about 85% less than the advertised price.

She also said that websites like myhome have a lot of 'latency' and may not be truely reflecting what's going on in the market right now.

BostonB

DublinWriter wrote:

In my own case, I recently inherited a house worth about €400K. I was thinking of renting, but the net yields I'd make annually just about equal what I'd get back if I sold the place and put the money in the bank and got a standard deposit rate....

Since you've worked the figures could you give a rough example.

whizzbang

The reason we are seeing a lot of "Sale agreed" signs is because the EAs can't put up "Sold" signs and they need to make it look like something is happening in the market.
Think about it, a year or two ago did you ever see "Sale Agreed" signs? Generally no because there was no need for them as the "Sold sign" would soon follow. Now, "Sold" signs are not happening so they have to be happy with a "Sale Agreed" sign.

chump

DublinWriter wrote:

In my own case, I recently inherited a house worth about €400K. I was thinking of renting, but the net yields I'd make annually just about equal what I'd get back if I sold the place and put the money in the bank and got a standard deposit rate.

I think that we've peeked on the salad days of capital appriecation. Plenty of investers have done the same sums that I have and are starting to dump their investment property.

I also spoke to a property agent last week who told me that things have really started to go through the floor in the past two weeks. I said to her that I checked out myhome.ie and that I couldn't spot many bargains on it. She said that in a lot of cases sellers are just ignoring the reality of what's currently going on and are holding out for high offers, but will usually give in and sell for about 85% less than the advertised price.

She also said that websites like myhome have a lot of 'latency' and may not be truely reflecting what's going on in the market right now.

Do DublinWriter is it fair to say your opinion of the market has changed drastically in the last 6 months?

Kipperhell

gurramok wrote:

If you had read the thread ..they were right in that it will happen, they were wrong in its timing, it was a matter of when and not if.

What goes up must come down is nothing clever,smart or predictive it's just nature. They have to at least say how high, how much of a fall and when for it to be considered predictive.

Victor

I mentioned a while back that it can be good to buy into the bottom of the decline. Now it does have to be the real bottom, not a trap, but buying in the green areas (see attached) means that if you buy wisely, you can make money.

Afuera

Kipperhell wrote:

I think this kind of logic is more the problem. Basically you are saying that there is vast conspiracy that is able to control so much that they can play around with everything to get the outcome they want. I guess it could be possible but unlikely .

I don't think that the bubble came about due to some kind of conspiracy between all the major players in the market. I think that in the short term it was in none of the individual player's interests to stop the market from turning into a mania, so the overall trend that emerged was a function of that. There was no watchdog in place to step in and prevent it from overheating and ensure that it was allowed develop in a sustainable way.

It's too late to do anything about it now though, so a lot of people are just going to have to accept that there will be a lot of pain in the Irish economy for the next few years. What I don't accept is that the bubble was unpreventable, and nothing could have been done to stop it.

SkepticOne

Kipperhell wrote:

What goes up must come down is nothing clever,smart or predictive it's just nature. They have to at least say how high, how much of a fall and when for it to be considered predictive.

No you don't have to predict when something is going to happen to have a valid point about risk, overvaluation and the likelihood of a crash. It is the nature of financial markets that the timing of crashes is unknowable. But you can certainly argue out that prices overvalued in terms of fundamentals and therefore a correction was inevitable, that there was vast speculative demand based on future price rises and that, as a consequence a soft landing was highly unlikely. These are all valid points and something you are going to want to know if you are going to rationally invest in a market.

It may not be particularly smart (or clever!) to point these thing out but why were they disputed by so many?

SimpleSam06

SkepticOne wrote:

It may not be particularly smart (or clever!) to point these thing out but why were they disputed by so many?

Because never have so many had so much to lose?

SkepticOne

SimpleSam06 wrote:

Because never have so many had so much to lose?

Wishful thinking, yes, which is why it was necessary for some people to come out with the contrary view.

moloneyg

Hi,

So what would you all say to buying an apartment in Cabinteely for the asking price??

Just so much doom and gloom being spread around.


Gerry

SkepticOne

Go for it. Sounds like a great bargain!

digitally-yours

moloneyg wrote:

Hi,

So what would you all say to buying an *apartment in Cabinteely for the asking price??

Just so much doom and gloom being spread around.


Gerry

* The prices of these might fall faster than the prices of houses

moloneyg

moloneyg wrote:

Hi,

So what would you all say to buying an apartment in Cabinteely for the asking price??

Just so much doom and gloom being spread around.


Gerry

I second that. GO FOR IT



You wont regret it.
Prices only ever go up.
Dont mind all the doom and gloom - its just sour grapes that they all missed out :rolleyes:
Interest rates wont do any damage - the country has never been so rich. We are the 2nd richest country in the world. Its just a correction phase. Buy now before prices start to go up again. Its a buyers market. Best time to buy.

digitally-yours

digitally-yours wrote:

* The prices of these might fall faster than the prices of houses

You obviously don't understand the market. An apartment is a great way to get on the LADDER. Everyone buys something small like a one bed or a two bed then they climb the ladder when everyone puts their apartment up for sale after it goes up in prices thus helping them buy something bigger.


Simple.

Its how the market has "worked" these past few years.

BendiBus

Deleted User wrote:

You obviously don't understand the market. An apartment is a great way to get on the LADDER. Everyone buys something small like a one bed or a two bed then they climb the ladder when everyone puts their apartment up for sale after it goes up in prices thus helping them buy something bigger.


Simple.

Its how the market has "worked" these past few years.

Some of us actually do buy apartments because we like apartment living

This is not to be taken as advice to buy an apartment now!

moloneyg

Hi all,

Its all I can afford, i want to live near my friends and family, and an apartment in cabinteely is what I choose, out of affordability


I see a lot of people posting that have low ltv rations and low mortgages, they can sit on the fence and talk, but we all need to live somewhere, and from my experiences in life it is better to live near everybody you know and not away from everybody and everything.

Bubble bursting or not its a great starting position in my opinion, and better then commuter belt commutes

Houses our just out of my price range, well house that don't involve hugh commutes and away from everybody I know.

This is sure a long thread.

Gerry

BrandonBlock

Deleted User wrote:

I second that. GO FOR IT



You wont regret it.
Prices only ever go up.
Dont mind all the doom and gloom - its just sour grapes that they all missed out :rolleyes:
Interest rates wont do any damage - the country has never been so rich. We are the 2nd richest country in the world. Its just a correction phase. Buy now before prices start to go up again. Its a buyers market. Best time to buy.

Christ, now THATS sarcasm.

moloneyg

BrandonBlock wrote:

Christ, now THATS sarcasm.

I second that

pod

Here is an article published in the Belfast newspaper Andersonstown News;

http://www.irelandclick.com/index.tvt?%5Fticket=9NTHLXD4YGSGX4UFHONDL1Q39LLDPJSG1RZFMOTEAPUDALOLYR4FURUSIOMAAP6FCKLAEUVVTRRHV2Z9ANVRMTKACJ5T5QRFLZHSNMTEDYPHBHSJ5LE1HONDNMTEGMKACOWFURXTHONDLBNZSD0KU89&%5Fscope=atown%2FContent%2FNews%2FHeadlines&id=3483&%5Fpage=&psv=20


from article:-

The West Belfast property bubble has finally burst.
Houses that only months ago were selling for huge amounts have fallen in price by up to seven per cent.
This could mean that people who have bought properties for high prices in the past six months may have suffered significant losses on their investment.

Estate agents blame a series of hikes in interest rates on causing the property bubble to burst, not only in West Belfast but also throughout the city.

SimpleSam06

moloneyg wrote:

Bubble bursting or not its a great starting position in my opinion, and better then commuter belt commutes

If you buy now Gerry, it will be your finishing position. And no I'm actually not being sarcastic.

moloneyg wrote:

This is sure a long thread.

To avoid flaming zippo raids from people afraid you are trolling, do take the time to read a few handfuls of pages in it however. Pick them at random or just the last ten.

I mean what, you can't take the time to learn a bit more about the largest investment you will probably ever make in your life? Twenty minutes now might save you twenty years later!

thewing

See? Everything is ok, cos the government said so - they've never lied to us before....

http://www.independent.ie/national-news/house-prices-are-still-9pc-ahead--and-thats-official-1052890.html

SkepticOne

thewing wrote:

See? Everything is ok, cos the government said so - they've never lied to us before....

http://www.independent.ie/national-news/house-prices-are-still-9pc-ahead--and-thats-official-1052890.html

Yes. Year-on-year figures: Q1 2007 still up on Q1 2006. They don't report the actual movement for Q1. The are still reporting growth in 2006 and presenting it as current.

The report on which this is based is not avaiable on line. Most likely it is positive spin being fed to the papers before the depressing actual report is released.

moloneyg

SimpleSam06 wrote:

If you buy now Gerry, it will be your finishing position. And no I'm actually not being sarcastic.


To avoid flaming zippo raids from people afraid you are trolling, do take the time to read a few handfuls of pages in it however. Pick them at random or just the last ten.

I mean what, you can't take the time to learn a bit more about the largest investment you will probably ever make in your life? Twenty minutes now might save you twenty years later!

For me the difference in renting and owning an apartment in same area was 200 euro per month, excluding the cost of buying the furniture.

Forget the price of the house, we all need to live somewhere. so how can 200 euro pm finish someone? I am not making an investment that I am selling in 3 years, I am going to be living there, its my home, and all the statistics show in the long run things stabilise again, I can wait 5-7 years.

I would love to know what else people say on this or what one should do? I have to live somewhere, and 6.5 per day for the privilege of owning I thought was worth it.

I don't want to be paying someone else's mortgage, and i don't want to share with loads of people I've done that for years and it can be a pain in the arse etc.

Regards,

Gerry