Still no value in housing market

gbh

So the auctioneers, builders, speculators are getting it in the neck. And we ordinary Joe Soaps and first time buyers who have been getting it in the neck from these groups are supposed to feel sorry and hope the market picks up again so they can carry on where they left off? Call it schadenfraude but i can't help feeling delighted everytime i hear an auctioneer, builder or speculator whining about a downturn in the market. Because when it comes to the housing market these are the groups with the loudest voice. And whenever a nice family home comes up for a newly married couple you can bet the speculator will get their first and push the price up for everyone. Well I hope the slide in the housing market continues for a long time because if these groups suffer then its no loss because they've been raking it in hand over fist for years while everyone else is shackled with 40 year mortgages, high interest rates and massive mortgages. So let them suffer I say.

antoinolachtnai

The only problem is that the people with the 40 year mortgages will suffer more than the estate agents.

The_Conductor

antoinolachtnai wrote: »

The only problem is that the people with the 40 year mortgages will suffer more than the estate agents.

Only if they try to sell.....

connundrum

And if/when people who've bought in the last two years come to renegotiate their mortgage payment after the introductory period ends i.e. 1/2/3 year reduced fixed rate. A lot of people will get a medium to big shock.

jackal

gbh wrote: »

So the auctioneers, builders, speculators are getting it in the neck. And we ordinary Joe Soaps and first time buyers who have been getting it in the neck from these groups are supposed to feel sorry and hope the market picks up again so they can carry on where they left off? Call it schadenfraude but i can't help feeling delighted everytime i hear an auctioneer, builder or speculator whining about a downturn in the market. Because when it comes to the housing market these are the groups with the loudest voice. And whenever a nice family home comes up for a newly married couple you can bet the speculator will get their first and push the price up for everyone. Well I hope the slide in the housing market continues for a long time because if these groups suffer then its no loss because they've been raking it in hand over fist for years while everyone else is shackled with 40 year mortgages, high interest rates and massive mortgages. So let them suffer I say.

Agreed!

As for the poor poor people who are shackled to 40 year mortgages. I have seen a few aquaintances do this. They got approved, went out on the weekend and came back owning an apartment - like they just bought a pair of shoes. I have little sympathy for anyone who bought in the last few years without putting the slightest bit of effort into researching THE BIGGEST PURCHASE OF THEIR LIVES! People's attitude to house purchases in the last few years has been astonishingly blithe. I will be saving my sympathy for someone that deserves it.

The house price madness that has been going on for years here has done absolutely nothing for the economy. No wealth has been created for Ireland. We are all just giving our hard earned money to the developers, via the bank. The developers are doing anything now to keep up the illusion that house prices are not crashing - free this that the other - anything but drop the price.

The price drops are to be welcomed. Maybe the government will actually get the finger out and do something that will move our economy forward in a sustainable way once the feel good factor from all this paper property wealth evaporates.

Note to developers, bank economists, EA spokesmen: I am neither confused, unclear, uncertain or lacking confidence in the market due to stamp duty, interest rates, the dollar, the alignment of the planets or any other factor. I am fully certain the market is going down, down, down and am waiting for it to bottom out before I buy. So please stop putting words in my mouth!

antoinolachtnai

A downturn in the property market is bad for everybody, not just builders, and not just if they need to sell urgently.

FTB's will suffer too, because they just won't be able to get a mortgage as easily in a declining or bottomed-out market as they could in a buoyant market.

Property prices have increased too fast, there's no point in arguing about it.

There have been a lot of benefits from the property boom. Density has increased (although not as much as it should have). A lot of property has been upgraded and standards in the rental sector are a lot higher than they were. A lot of capacity has been created (although not all of it has come on-stream).

dudara

While there are unscrupulous agents etc, they wouldn't be operating if consumers hadn't been so hell bent on owning homes. The prices were high because there was demand.

gbh

I agree there was demand. But well over half of all houses are bought by non-owner occupiers who can leverage an existing property as collatoral on a new mortgage.

Lets be clear, speculators are in this market to make large profits. How do they do that? They buy at a reasonable price and sell at an inflated price and because supply can't fully meet demand due in part to speculators buying up a lot of houses, house prices go up. House prices are artificially high for these reasons, at least 60-70% above what they should be.

I blame the government and speculators for this primarily and I suppose the auctioneers as well who try to make the smallest grimiest shoebox sound like the Taz Mahal. And I have no sympathy for speculators, because many of them made millions from the property boom.

It's exactly the same as the dot com bubble to be honest and we all know how that ended. Those who got in early and tried to sell shares in companies that were in fact vastly overpriced made a lot of money, while those who got in near the end were left burned.

To be honest if I was someone thinking of buying now and it's something I will be doing sometime, I would wait until the market keeps falling and then bottoms out. I would say wait until prices fall at least 50% below what they are now. Because when prices are artificially inflated as house prices are now, the people usually see sense and cut back the demand and thats really what needs to happen.

dodgyme

antoinolachtnai wrote: »

There have been a lot of benefits from the property boom. Density has increased.

but schools, transport, services, shops etc havent- take swords, D15, Lucan etc???? Got nothing for our money but four walls with bad soundproofing.

Calina

antoinolachtnai wrote: »

There have been a lot of benefits from the property boom. Density has increased (although not as much as it should have). A lot of property has been upgraded and standards in the rental sector are a lot higher than they were. A lot of capacity has been created (although not all of it has come on-stream).

Many of those benefits are of debatable value to be honest with you. Density may have shot up but many of the estates around where I live have not been planned with public transport in mind, for example. My view is that there are few long term benefits to the recent property boom as it has tied up a lot of debt and people are starting to feel the pain now. The design of our high density accommodation does also leave a lot to be desired and I suspect quite a few apartment blocks won't make the end of their lease.

Standards in the rental sector had been on the way up long before 2001 and anyway, there are still serious issues with tenancy rights.

The capacity is not necessarily in the right place.

The boom - from what I can see - was built on short term plans, not long term sustainability considerations. That's why yes density went up, but not in tandem with sensible transport considerations or social development.

A Random Walk

antoinolachtnai wrote: »

A downturn in the property market is bad for everybody, not just builders, and not just if they need to sell urgently.

I disagree quite fundamentally.

FTBs would be in a better position if they could buy cheaper houses rather than be able to get bigger loans. There will be a squeeze period where loan availability will drop, but this will be eventually counteracted by falling prices.

Existing home owners who don't plan to move shouldn't care what happens.

Existing home owners who wish to trade up should see the relative difference between their current house and future house reduce, so necessitating a smaller additional cost.

Investors will see their yields rise from current fairly pitiful levels to a level which is appropriate for the risk they are taking on.

Speculators and "flippers" will lose.
Estate agents/construction workers will lose (assuming the government doesn't up infrastructural spend).
Anyone who has bought a house in the recent past who needs to move home in the short term will lose.
Government tax revenue will fall.

SkepticOne

antoinolachtnai wrote: »

A downturn in the property market is bad for everybody, not just builders, and not just if they need to sell urgently.

FTB's will suffer too, because they just won't be able to get a mortgage as easily in a declining or bottomed-out market as they could in a buoyant market.

The downturn is just a consequence of the boom. You can't go on building several times what people need indefinitely. Whatever we blame on the downturn should really be blamed on the boom.

SimpleSam06

dudara wrote: »

While there are unscrupulous agents etc, they wouldn't be operating if consumers hadn't been so hell bent on owning homes. The prices were high because there was demand.

The prices were high because lending institutions made enormous sums of money available to people they really shouldn't have.