Housing Bubble Bursting

Gurgle

SkepticOne wrote:

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.

Average price at the end of March 2007 was 9% higher than the end of march 2006. How is that not current?

In the same period, the number of mortgages taken out was down 25%.

This combined with higher inventory says that the houses on the market which aren't achieving the asking price are not being sold.

So no panic selling going on, no crash

Zambia

Gerry

If you can afford it and your accepting of the fact it probably will fall in value for the forseeable future. Go ahead and buy.

If indeed you have read all this thread ....god help you. You are as informed as you will ever be.

Remember though if you should need to move/sell in the short term it may not be an option to do so in profit.

Best of luck , oh and offer below the asking.

z

Zambia

Gurgle wrote:

So no panic selling going on, no crash

waves hand

"this is not the crash your looking for,,,,"

DonJose

"Developers handed over 444 units as part of their obligations under the Planning and Development Act, which requires up to 20pc of homes in a new estate to be made available to people on lower incomes.

This is an increase of 26pc on 2006."

This just shows that its getting harder to shift houses, a couple of years ago the developers weren't handing over 20% of the houses, they were paying hard cash to the councils.

moloneyg

Zambia232 wrote:

Gerry

If you can afford it and your accepting of the fact it probably will fall in value for the foreseeable future. Go ahead and buy.

If indeed you have read all this thread ....god help you. You are as informed as you will ever be.

Remember though if you should need to move/sell in the short term it may not be an option to do so in profit.

Best of luck , oh and offer below the asking.

z

Thanks,

You see there is the human element here not the actuarial one that is been missed by people, yes I expect to loose in the short term, and not in the long term. but whats the point renting when every investor seems to be running to the hills, and you would have no stableability in where your living etc etc.

Which is worse loosing 10% of investment for a few years only, or potentially having to move a good few times in that period and all the stress involved etc

Only time will tell.

Regards,

Gerry

Kali

pod wrote:

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

UK base rate is now 5.75% ... 9 months ago I bought my house over here at a base rate of 4.75% ... thats caused the Belfast issue, and is causing a slowdown across the whole of the UK. House prices in the majority of areas are still rising, but annual increases have been curbed from 10% to close to 2-5% in most areas as a result of the Bank of Englands changes, which is a lot closer to national inflation. Not particularly good news for those looking for a quick buck, and especially not in the North, where building has been higher than actual demand and where I've been told that the majority of purchases were investment based.

SimpleSam06

moloneyg wrote:

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.

Gerry, the statistics show (IN MY OPINION) that in 5 to 7 years the price of houses will have halved, or at least reduced considerably, and thats before you take inflation into account. So heres how it goes: You spend €250,000 on an apartment, you are committed to pay that quarter of a million back plus interest, which will normally tag on a few hundred thousand more over the lifetime of the loan.

Meanwhile, your property has dropped in value by say €50,000. So in 4 years you want to move on up: You still owe €200,000 to the bank, plus interest, you have an apartment now worth €200,000, how in the hell are you ever going to trade up? Even if you sell the place you'll only break even on the loan, and believe me thats the best case scenario, with the costs of selling and taxes involved.

Basically I'd view it as unlikely that you will be able to trade up for decades to come, without knowing the specifics of your situation.

moloneyg wrote:

Which is worse loosing 10% of investment for a few years only, or potentially having to move a good few times in that period and all the stress involved etc

Is being stuck in a shoebox for 20 years better than moving a few times and saving money? Oh and by the way, if you bought in January 2007, by December 2007 you would have already lost your 10%, in real terms.

SimpleSam06

Gurgle wrote:

Average price at the end of March 2007 was 9% higher than the end of march 2006. How is that not current?

Price trends are a vector value, distance in a given direction, and that direction is down. You can't take a snapshot and say "all is well".

SkepticOne

Gurgle wrote:

Average price at the end of March 2007 was 9% higher than the end of march 2006. How is that not current?

When did most of that growth occur? This is what is being left out by the news stories. We will find out when the full report becomes available. According to other sources most of the growth was in the months to July of 2006, slowing rapidly to a standstill in the second half of 2006 and starting to drop in early 2007.

a) Year on year figures can hide a peak and still show a gain even though prices are coming down.

b) These year on year figures are three months out of date.

In the same period, the number of mortgages taken out was down 25%.

This combined with higher inventory says that the houses on the market which aren't achieving the asking price are not being sold.

So no panic selling going on, no crash

I would agree with you that to date falls have been moderate and don't reflect the fall off in demand. As you point out, what we are seeing is a significant build up in inventory like flood waters building up behind a damn. The relatively small drops (annualised 10% drops) are merely the first cracks in the concrete.

moloneyg

ok take all your points,

the price of the place came down about 50K from previous year too,I know people living in estate, and how their expected valuations changed, and the price asked is only 38% higher then the original purchase price in 2000.

This is not multiples upon multiples of the 2000 price either and it peaked last year too.

Regards,

Gerry

PS I know people that bought houses at same time and had expected valuations that were multiples of their purchase price.

digitally-yours

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.

Definately worth the read

http://www.moneyweek.com/file/31730/can-you-bag-a-property-bargain-in-ireland-.html

I didnt stopped or suggested not to buy an apprtment.
All i said was it does not make sense to buy when the market is falling.
You need to buy at the height of the slump ! i.e when the prices are at it lowest

and that point has not been acheived yet ! so anyone buying has a chance of
negative equity. Also blindly suggesting people to buy is wrong.
You dont know the personal circumstances of the buyer
wait and you will see anyother Interest rate rise next month which is predictd as they have alreday given the indication !

gurramok

Gurgle wrote:

Average price at the end of March 2007 was 9% higher than the end of march 2006. How is that not current?

In the same period, the number of mortgages taken out was down 25%.

This combined with higher inventory says that the houses on the market which aren't achieving the asking price are not being sold.

So no panic selling going on, no crash

Those figures are on mortgages 'drawn down', that includes a hell of alot that were bought off the plans up to 2 years ago and are only being occupied in Q1 '07.
What we need are sales volume figures and what prices the houses actually sell at.
Somehow info like that to obtain in this banana republic is like a national secret unlike the openess in the UK.

Zambia

Kali wrote:

UK base rate is now 5.75% ... 9 months ago I bought my house over here at a base rate of 4.75% ... thats caused the Belfast issue, and is causing a slowdown across the whole of the UK. House prices in the majority of areas are still rising, but annual increases have been curbed from 10% to close to 2-5% in most areas as a result of the Bank of Englands changes, which is a lot closer to national inflation. Not particularly good news for those looking for a quick buck, and especially not in the North, where building has been higher than actual demand and where I've been told that the majority of purchases were investment based.

I agree , prices have stopped the meteoric rise they where on. However far to many couples overstretched I fear and we will see a lot of these houses returning to the market. Wages in the North are on average lower than the south.

A lot of folk brought these houses at the over inflated price believing the rise would continue. Hoping for a re-mortgage in a few years to ease the burden IMO. See earlier repossesion link UK citizens are targeted extensively to borrow against their property.

Investors can happily pull out at any time they like if they brought early 2006 as they have already had a 44%- %50 rise in a lot of cases.

digitally-yours

CONCERN about a sharp slowdown in the Irish property market is set to grow after new Government figures show a huge decline in the number and value of housing loans approved and paid out in the first three months of 2007.

More at the folloing link
http://www.irishexaminer.com/irishexaminer/pages/story.aspx-qqqg=ireland-qqqm=ireland-qqqa=ireland-qqqid=39284-qqqx=1.asp

nesf

The Irish Times article (subscriber only on the site) had Dublin and Galway prices falling and Cork and elsewhere going upwards.

D'Peoples Voice

SkepticOne wrote:

When did most of that growth occur? This is what is being left out by the news stories.

According to
http://www.environ.ie/en/Publications/StatisticsandRegularPublications/HousingStatistics/FileDownLoad,2277,en.XLS
Worksheet called 'house prices % change quarter'
Q2 2006 growth 4.7%
Q3 2006 growth 0.3%
Q4 2006 growth 1.3%
Q1 2007 growth 2.5%
giving a total of 8.7% according to Excel not 9%.

This means that the growth in Q2 2006 accounted for almost 53.39% of the total growth. Even assuming flat growth in Q2 2007, this would bring the next annual rate (start Q3 2006 to end Q2 2007) down to 4.1%, below inflation!

SkepticOne

D'Peoples Voice wrote:

According to
http://www.environ.ie/en/Publications/StatisticsandRegularPublications/HousingStatistics/FileDownLoad,2277,en.XLS
Worksheet called 'house prices % change quarter'
Q2 2006 growth 4.7%
Q3 2006 growth 0.3%
Q4 2006 growth 1.3%
Q1 2007 growth 2.5%
giving a total of 8.7% according to Excel not 9%.

This means that the growth in Q2 2006 accounted for almost 53.39% of the total growth. Even assuming flat growth in Q2 2007, this would bring the next annual rate (start Q3 2006 to end Q2 2007) down to 4.1%, below inflation!

Though you should probably compound those figures rather than add them.

Neverthelese we see clearly that the 9% growth is really a statement about growth in 2006 with only a small amount in 2007 and nothing about growth in Q2 2007 even though we are now towards the end of Q3.

In no way can this be used to argue that prices are still rising.

patrickolee

D'Peoples Voice wrote:

According to
http://www.environ.ie/en/Publications/StatisticsandRegularPublications/HousingStatistics/FileDownLoad,2277,en.XLS
Worksheet called 'house prices % change quarter'
Q2 2006 growth 4.7%
Q3 2006 growth 0.3%
Q4 2006 growth 1.3%
Q1 2007 growth 2.5%
giving a total of 8.7% according to Excel not 9%.

Think you need to check your excel's rounding settings or buy a calculator!

4.7 + 0.3 + 1.3 + 2.5 = 8.8% NOT 8.7%

At least by rounding to a whole figure they aren't pretending to be more accurate!

SimpleSam06

patrickolee wrote:

4.7 + 0.3 + 1.3 + 2.5 = 8.8% NOT 8.7%

At least by rounding to a whole figure they aren't pretending to be more accurate!

Fuckit lads he's right. Patrickolee found a 0.001 error in someone's back of the envelope calculations, call off the whole crash. Send the word down the intertubes, cry algebra, and let loose the hounds of email.

Seriously, what? The other source made a 0.002 error, which is twice as wrong as D'Peoples Voice (200% more wronger), and you're trying to paint it as number weighting on D'Peoples Voice's part?

patrickolee

SimpleSam06 wrote:

Fuckit lads he's right. Patrickolee found a 0.001 error in someone's back of the envelope calculations, call off the whole crash. Send the word down the intertubes, cry algebra, and let loose the hounds of email.

Seriously, what? The other source made a 0.002 error, which is twice as wrong as D'Peoples Voice (200% more wronger), and you're trying to paint it as number weighting on D'Peoples Voice's part?

*Sigh* Feeding the 'Sam' *sigh*

8.8% - 8.7% = 0.1%

The point is someone is posting about how inaccurately the percentages were added and then added them up incorrectly themselves (skewing in the opposite direction of course). Is it that hard to add 4 numbers, or for you Sam, subtract two numbers!

miju

well one thing is for sure patrickolee whatever about above posters adding abilities our gubberments are even worse

patrickolee

No, the gubberment didn't add them in the spreadsheet. I think the OP may have tried to do =SUM() in excel to get the total? Best to use the ol' head.

Them floating point numbers can be a right bugger

thewing

Who gives a damn? These figures mean nothing in relation to what is CURRENTLY happening.

The waiting game between sellers and buyers has begun, whoever flinches first will result in boom or bust, my moneys on the sellers.

miju

patrickolee wrote:

No, the gubberment didn't add them in the spreadsheet. I think the OP may have tried to do =SUM() in excel to get the total? Best to use the ol' head.

yes i know what your doing patrick your trying to detract from his point in the first place that the gubberment miscalculated

lets get this back on topic and give this splitting hairs for the sake of scoring points a miss shall we?

thewing wrote:

Who gives a damn? These figures mean nothing in relation to what is CURRENTLY happening.

The waiting game between sellers and buyers has begun, whoever flinches first will result in boom or bust, my moneys on the sellers.

agreed, both sides will hold out for a while yet but come Sept when the next rate rise comes (coupled with another poor "traditional" selling time) its then you will start to see the sellers flinching alot more than they currently have and the blood will begin to run

patrickolee

miju wrote:

yes i know what your doing patrick your trying to detract from his point in the first place that the gubberment miscalculated

No, I'm not detracting from his point, I'm saying quite plainly it is incorrect. The spreadsheet's numbers are in floating point representation and displayed to one decimal place. We do not have enough information to say that 9% is incorrect. For example if the real numbers were

4.72 + 0.38 + 1.33 + 2.57 then 9% is bang on.

If the real numbers were

4.79 + 0.39 + 1.39 + 2.59 then the total would be 9.16%!

miju wrote:

lets get this back on topic and give this splitting hairs for the sake of scoring points a miss shall we?

Not splitting hairs to be fair. The point was plain wrong, firstly by incorrectly adding four numbers and secondly by making assumptions about digits that we do not know.

SkepticOne

thewing wrote:

Who gives a damn? These figures mean nothing in relation to what is CURRENTLY happening.

The waiting game between sellers and buyers has begun, whoever flinches first will result in boom or bust, my moneys on the sellers.

With regard to the waiting game, when that is over prices will adjust downwards since we are dealing with overvaluation not undervalueation. Arguably, this has already started to happen.

Akrasia

Also, another thing that is going to skew the price indexes are all the 'special offers' that developers are offering to get people to buy their houses (free kitchens TVs, Cars, lifetime subscription to Buyer Beware magazine etc)

If a house is the same price as it was 12 months ago but there are 30 grand worth of extras it is a real drop in the value of the house, but it still allows the media/developers/government to report as though things are doing fine.

SimpleSam06

patrickolee wrote:

8.8% - 8.7% = 0.1%

0.1% = 0.001, patrick.

patrickolee wrote:

Is it that hard to add 4 numbers, or for you Sam, subtract two numbers!

Keep on truckin' patrick.

iguana

As SkepticOne said those figures are to be compounded rather than added and when they are compounded they come to just over 9%.

However that isn't actually important as the figures are out of date. And the information being reported from the data is misleading.

digitally-yours

digitally-yours wrote:

and that point has not been achieved yet ! so anyone buying has a chance of
negative equity. Also blindly suggesting people to buy is wrong.
You don't know the personal circumstances of the buyer
wait and you will see any other Interest rate rise next month which is predicted as they have already given the indication !

http://thepropertypin.com/forum/viewtopic.php?t=1859

http://thepropertypin.com/forum/viewtopic.php?t=1869

http://thepropertypin.com/forum/viewtopic.php?t=1970

http://thepropertypin.com/forum/viewtopic.php?t=2039


MoloneyG take a look too