House prices in Charlesland.

loyatemu

cuddlycavies wrote: »

But when you think of what is actually going on here. You take the typical stereotype couple we were always told to consider, the Garda and nurse. Pension levy and pay drop placed against deflation and interest rate decreases. They're not that much worse off than when people queued to buy these houses. Confidence will restore so much but confidence must be restored.

when people queued to buy in Charlesland we were in the middle of a bubble - hysteria reigned and people felt they had to get on the property ladder whatever the cost. You could get a 100% mortgage based on 8 times your salary (including all bonuses and overtime). Those conditions aren't going to return anytime soon - confidence may return but those bubble prices won't be seen again.

McWilliams (and other less-sensationalist economists) are fond of the 14 times annual rent formula for calculating house values. 3-beds in Charlesland are renting for €1,100pm which would translate to a base value of €185k. Now that sounds insanely low, and they may not drop that far, but I can't see how there's going to be any major recovery in prices in the short to medium term.

jobless

loyatemu wrote: »

. Now that sounds insanely low, and they may not drop that far, but I can't see how there's going to be any major recovery in prices in the short to medium term.

Insanely low compared to the peak price...... normal or even high compared to pre bubble prices

cuddlycavies

There is about 18mths normal supply out there with few completions happening this year or next for that matter. people are holding back on purchasing but still getting married and having kids. Our estate is settling down and looking good. I will never sell for less than I bought and most others are the same. We have a great village here and are close to Dublin. Things will get better next year and we are well placed for the next spurt of demand. I've seen this before in Australia in the early 90's. People just couldn't see it ever getting better. It has and is about to go bananas again. It's a cyclical thing. In five years people will be talking about guys who bought a few properties at this time and are now wealthy from it. We will recover. When you think about it, there have only been 19 repossessions this year. The 100% ,8 times your salary were really only taken out by a few sub prime lenders. Most were 90-92%. Hysteria reigns at the moment. But it's negative hysteria. I've taken a 20% pay cut. But it's been offset a lot by real deflation. I dont want to seem smug as I know some of you have no jobs, but really, Is it that bad?

jobless

cuddlycavies wrote: »

There is about 18mths normal supply out there with few completions happening this year or next for that matter. people are holding back on purchasing but still getting married and having kids. Our estate is settling down and looking good. I will never sell for less than I bought and most others are the same. We have a great village here and are close to Dublin. Things will get better next year and we are well placed for the next spurt of demand. I've seen this before in Australia in the early 90's. People just couldn't see it ever getting better. It has and is about to go bananas again. It's a cyclical thing. In five years people will be talking about guys who bought a few properties at this time and are now wealthy from it. We will recover. When you think about it, there have only been 19 repossessions this year. The 100% ,8 times your salary were really only taken out by a few sub prime lenders. Most were 90-92%. Hysteria reigns at the moment. But it's negative hysteria. I've taken a 20% pay cut. But it's been offset a lot by real deflation. I dont want to seem smug as I know some of you have no jobs, but really, Is it that bad?

you might not sell below what you paid, doesnt mean others wont.... nobody knows peoples circumstances regarding employment etc.
as for there being a spurt next year, maybe there will be in the economy(small chance) but not in house prices, and anyone who thinks that if they buy know and will make a profit in 5 years needs to have their head read...
we've just come out of one of the biggest housing bubbles in history and Ireland was worse than most other countries (except maybe Spain).
Put a zero beside that 5 and thats when you might see bubble prices here again...

I suggest you google housing boom and busts, most follow the same pattern and i dont see why we'll be any different...

MuffinsDa

cuddlycavies wrote: »

There is about 18mths normal supply out there with few completions happening this year or next for that matter. people are holding back on purchasing but still getting married and having kids. Our estate is settling down and looking good. I will never sell for less than I bought and most others are the same. We have a great village here and are close to Dublin. Things will get better next year and we are well placed for the next spurt of demand. I've seen this before in Australia in the early 90's. People just couldn't see it ever getting better. It has and is about to go bananas again. It's a cyclical thing. In five years people will be talking about guys who bought a few properties at this time and are now wealthy from it. We will recover. When you think about it, there have only been 19 repossessions this year. The 100% ,8 times your salary were really only taken out by a few sub prime lenders. Most were 90-92%. Hysteria reigns at the moment. But it's negative hysteria. I've taken a 20% pay cut. But it's been offset a lot by real deflation. I dont want to seem smug as I know some of you have no jobs, but really, Is it that bad?

I sold for less than I bought and it was the best decision I've made in my financial life. Prices have gone done at least 20K (and that's an asking price, not selling so far) since when I sold it a few months ago, and everyone knows they are going further down. I'm in the position of buying something much better now, for not much above the price I sold. As long as you are not in negative equity the best thing to do is to sell at any cost, otherwise you're going to be stuck for a few years. If you are happy where you are then you'd be ok, obviously, but if someone needs to move on then it's a different story.

PLIIM

jobless wrote: »

you might not sell below what you paid, doesnt mean others wont.... nobody knows peoples circumstances regarding employment etc.
as for there being a spurt next year, maybe there will be in the economy(small chance) but not in house prices, and anyone who thinks that if they buy know and will make a profit in 5 years needs to have their head read...
we've just come out of one of the biggest housing bubbles in history and Ireland was worse than most other countries (except maybe Spain).
Put a zero beside that 5 and thats when you might see bubble prices here again...

I suggest you google housing boom and busts, most follow the same pattern and i dont see why we'll be any different...

tbh nobody can predict anything about the economy in 5 years. Nobody.

cuddlycavies

PLIIM wrote: »

tbh nobody can predict anything about the economy in 5 years. Nobody.

Totally good point. So people talking about 50 years of property depression are full of it.

darter

PLIIM wrote: »

tbh nobody can predict anything about the economy in 5 years. Nobody.

Actually, that's not true at all. We can all make predictions, what is important is what those predictions are based on and whether they are likely or not. Economists have been doing this for years - sometimes they are spot on, and sometimes not. Economic statistical theory is some of the most advanced in statistics.

Here's two predictions for the next 5 years that I think no-one will argue with:
1) The population of Ireland will not halve,
2) The population of Ireland will not double.

Here are two others:
1) The unemployment rate will not go below 5%,
2) The unemployment rate will not go above 20%.

Based on those prepositions, one can make reasonable predictions about the minimum and maximum growth of the economy. Yes, the spread will be huge, as the unknowns are huge, but there is reasonable predictive potential.

The biggest problem Ireland has is that it is not in control of its destiny. Large countries, such as Germany, have diverse economies so if something stutters then something else won't. Ireland has very few eggs in its basket. Over the last decade, Science Foundation Ireland has pumped BILLIONS into biotech and ICT. Yes, there was short-term gain, mostly because of the tax incentives, but now Dell is leaving for Poland dispite those billions invested in ICT.

Where housing prices in Charlesland will be in 5 years is almost anyone's guess, but I think it reasonable to assume:
1) They will not be half of today's purchase prices (NOT asking prices),
2) They will not be double today's prices.

Work with both the worst-case or best-case scenario when budgeting and see where you come to.

jobless

PLIIM wrote: »

tbh nobody can predict anything about the economy in 5 years. Nobody.

i wasnt trying to predict the economy in 5 years.... read the post again...
i said if you think bubble prices will be reached in 5 years you need your head read... anyone that thinks they will are seriously misguided..

jobless

cuddlycavies wrote: »

Totally good point. So people talking about 50 years of property depression are full of it.

I never said a depression for 50 years.... just because i said they might not reach peak prices (x times average salary) for 50 years (which i was being flippant about.i reckon more like 30 when the next generation of youngsters grow up), it doesnt mean there will be a depression in the housing market for that long... prices will fall to a level and stay there for a number of years and then increase at a small average for another number of years. How long that cycle will last is anyones guess...nobody knows what might cause another bubble...

I'm only basing my opinion on reading of previous housing boom/bust cycles.
I'm just glad i didnt buy into this boom.!

PLIIM

darter wrote: »

Economic statistical theory is some of the most advanced in statistics.

Speaking as someone with a degree in Economics ........ Thats total B.S

cuddlycavies

PLIIM wrote: »

Speaking as someone with a degree in Economics ........ Thats total B.S

Ha ha! Yes, I remember having a glass of wine with the Professor in charge of economic dept. at Queensland Uni. He said '' you always have to laugh at people who think they've made total sense of where the economy is and where it's going. The truth is that it makes no sense. If it did, I would be a very rich man''. In other words, there is no reason why our problem will be exactly the same as Finland's or Japan.'s It is our problem, we can fix it our way and set our own ternd. a house selling for €3m in foxrock in 2007 made no sense. Today it's €1.25m and that makes no sense.

LEIN

Guys this is starting to read like a general economics thread. Please read title again before responding to above posts.

FunnyStuff

When the 10 year guarantee on Gunoprene runs out you's will all be screwed....

darter

PLIIM wrote: »

Speaking as someone with a degree in Economics ........ Thats total B.S

Ah, you have a B.A. in economics? So you haven't done any statistical research theory I would presume.

Quite a number of statistical methods "discovered" in other branches of the sciences were used first in economic theory - for example Akaike's "instrumental variables" introduced by Reiersol in the early 1940s to remove auto-correlation noise bias, known in economics since the early-1920s, was rediscovered in branches of physics in the mid-1970s. Then there is the wonderful "Slutsky effect", named after Slutstky in the early-1930s, who showed the problems with sum-and-difference filtering of time series when the frequency response of the filter is very narrow band pass. I really like it for its name, but it is also a very important example of problems when you apply methods you don't understand.

I could go on at length with many other examples, but I won't. It isn't BS to say that economic statistical theory has been at the forefront of a lot of our statistical advances in data processing and analysis.

PLIIM

darter wrote: »

Ah, you have a B.A. in economics? So you haven't done any statistical research theory I would presume.

Quite a number of statistical methods "discovered" in other branches of the sciences were used first in economic theory - for example Akaike's "instrumental variables" introduced by Reiersol in the early 1940s to remove auto-correlation noise bias, known in economics since the early-1920s, was rediscovered in branches of physics in the mid-1970s. Then there is the wonderful "Slutsky effect", named after Slutstky in the early-1930s, who showed the problems with sum-and-difference filtering of time series when the frequency response of the filter is very narrow band pass. I really like it for its name, but it is also a very important example of problems when you apply methods you don't understand.

I could go on at length with many other examples, but I won't. It isn't BS to say that economic statistical theory has been at the forefront of a lot of our statistical advances in data processing and analysis.

Yes it is B.S. Nobody, but nobody know what the economic landscape will be 5 years down the line, never mind 10 years.

Newsflash. Its nearly 2010. Do you still take the advice from Doctors that was dished out 50 to 100 years ago.

If have plenty of statistical knowledge. I work in the sector.
If any economist actually knew how to predict ahead of time, they would be so rich that there would be no need for all these books on who is to blame coming out this Christmas. As George Lee once said to me - "The only way to make this game work, is to go against the general opinion, whatever it may be, then when, as always is the case, things swing around, you look like the only one who was smart". Well that worked out for him and McWilliams anyway.

LEIN

Irish Economy