Dublin is burning

mastermind2005

"House prices fell by more than 10 per cent last year and are likely to fall even more in the coming months, according to Ireland’s largest bank.

AIB’s chief economist, John Beggs, said that there was no sign of a quick recovery in the property market and that the government’s recent overhaul of stamp duty would have no real effect on the property market.

Beggs said it was also likely that the European Central Bank would increase interest rates in the coming months, despite speculation from some economists that the bank was set to reduce its key rate."

http://www.sbpost.ie/post/pages/p/story.aspx-qqqt=IRELAND-qqqm=news-qqqid=29282-qqqx=1.asp

BobbyD10

Interesting to see a bank's economist finally give and honest and realistic evaluation of the current situation regarding the property market.

The_Conductor

BobbyD10 wrote: »

Interesting to see a bank's economist finally give and honest and realistic evaluation of the current situation regarding the property market.

Yes. Its a pity Austin Hughes and some of the other economists can't seem to sing off the same hymn sheet. I know they are employed by vested interests- but they are not doing their chosen profession any favours with their rose-tinted forecasts which are shown time and time again to be pie-in-the-sky.

D'Peoples Voice

smccarrick wrote: »

Yes. Its a pity Austin Hughes and some of the other economists can't seem to sing off the same hymn sheet.

Maybe Austin is right and everyone else is wrong, sure there are no signs of inflation in the euro area!

http://www.bloomberg.com/apps/news?pid=20601085&sid=avF7.UqFqtrk&refer=europe

Spanish Inflation Jumps to Decade High, Unemployment Rises

By Ben Sills

Jan. 3 (Bloomberg) -- Spanish inflation accelerated to the fastest pace in more than a decade in December even after economic growth slowed, led by higher food and energy costs.

The inflation rate rose to 4.3 percent, the highest since the European-standard index was introduced in 1997, the Madrid- based Labor Ministry said. Prices jumped even with unemployment rising for a third month as a softening real-estate market led to a 13 percent increase in benefit claims by construction workers, a separate report showed today.

http://www.bloomberg.com/apps/news?pid=20601085&sid=a4MXFIbecbi4&refer=europe

German December Joblessness Falls to Near 15-Year Low (Update3)

By Andreas Cremer
Enlarge Image/Details

Jan. 3 (Bloomberg) -- Germany's unemployment rate fell to the lowest in almost 15 years in December as manufacturers of cars and industrial equipment hired staff to work off a backlog of orders.

The jobless rate, adjusted for seasonal swings, slid to 8.4 percent, the lowest level since March 1993, the Federal Labor Office in Nuremberg said today.

http://www.stuff.co.nz/4322694a4560.html

Italy calls on "Mr Prices" to try to curb inflation
Reuters | Thursday, 13 December 2007

Italy's government has decided to appoint a special commissioner to try to curb price rises after inflation hit a three-and-a-half year peak in November, but economists see the move as little more than a publicity stunt.

The ombudsman, dubbed "Mr Prices" by Italian media, will inform the industry minister of any "anomalous" or unjustified price increases and can also make proposals for legislation.

http://news.ino.com/headlines/?newsid=10320080148

Euro Zone November M3 Money Supply Growth Stable At 12.3%
3 hours, 18 minutes ago
(RTTNews) - Euro zone M3 money supply annual growth rate remained unchanged at 12.3% in November from the previous month, the European Central Bank said Thursday. Economists were expecting money supply to grow 12.2%.

The official report showed that the three-month average of the annual growth rates of M3 over the period September 2007 - November 2007 rose to 11.9%, from 11.7% in the period August 2007 - October 2007.

Austin might be able to get some relief from reading this article about the US!
http://seekingalpha.com/article/58199-money-supply-growth-it-s-much-worse-than-that

DublinDilbert

Ahhh it looks like things might be ok after all ( according to the EBS anyway ) :rolleyes:
http://www.breakingnews.ie/ireland/mheycwideykf/

Apparently people are making more money this year than last, i'd love to know who...

I love the bit "
The EBS also says it expects property prices to begin increasing again in the medium term." it would be great if they could define medium term for us, is it 10 months? 10 years?

How Strange

DublinDilbert Ahhh it looks like things might be ok after all ( according to the EBS anyway )
http://www.breakingnews.ie/ireland/mheycwideykf/

Apparently people are making more money this year than last, i'd love to know who...

I love the bit "
The EBS also says it expects property prices to begin increasing again in the medium term." it would be great if they could define medium term for us, is it 10 months? 10 years?

What a load of BS. Who are these people trying to convince us that we are still in a property bubble where prices keep going up and up?

I think the one major factor which has changed in the last year is the general public's opinion of the property market. People are nervous. No-one is telling giddy stories of friends who sold their house for tens of thousands more than expected; now we are hearing about people who can't sell houses.

IMO, everyone now sees that the emperor is wearing no clothes and this property bubble was a sham to begin with. It was helped along by a government whose main cronies were developers and we have substandard overpriced all around the country.
These bloody economists with vested interested annoy me so much - of course they aren't going to come out and say 'it's over'.

Phew, feel better for getting that off my chest!

tHE vAGGABOND

If only we had a single thread to discuss all of this, it would be dead handy

The price of oil going mental is enough to cause inflation problems world wide tbh - let alone the rest of Europe's problems atm..

This reminds me of another thing I read this week, that last year was the hottest year on record, ever. Where the **** were all those hot days, it rained all summer

Lies, lies and statistics

johnnyskeleton

BobbyD10 wrote: »

Interesting to see a bank's economist finally give and honest and realistic evaluation of the current situation regarding the property market.

Arguably he's still putting a brave face on an untenable position - he's saying there is no chance of a quick recovery, he's saying that prices will stabilise late next year, and suggesting that there is a minor correction taking place.

Given that the average house price is 10x the average industrial wage, there is a long way to go.

jimmycrackcorm

johnnyskeleton wrote: »

Given that the average house price is 10x the average industrial wage, there is a long way to go.

When my Da bought his house in the 70's the price was more than 10x his annual salary.

Victor

Medium term is typically 3-5 years in equities and 5-10 years in property.

The_Conductor

johnnyskeleton wrote:

Arguably he's still putting a brave face on an untenable position - he's saying there is no chance of a quick recovery, he's saying that prices will stabilise late next year, and suggesting that there is a minor correction taking place.

Given that the average house price is 10x the average industrial wage, there is a long way to go.

The historical average price is 4.5 times the average industrial wage- i.e. 4.5 times 34k which is 153k. There will be much unhappiness if this comes to pass..... Ye gods, almost sounds biblical.

Jamar

Historically, families had access to only one income, which is no longer the case. Also, interest rates are still low in comparison to those times.

Kipperhell

Jamar wrote: »

Historically, families had access to only one income, which is no longer the case. Also, interest rates are still low in comparison to those times.

I have to agree with this. There seems to be a lot of people assuming that things must return to a norm that doesn't exist any more. If things were to go back to historical levels at what point do you stop and say at this point in history things were the way they should be and are the norm?

Property ownership has changed a lot in the last 100 years. The government certainly don't give away houses like they used to so how people now meant to archive the same level of home ownership without this subsidy? I personally don't think owning your own home is a right of existence.

SimpleSam06

Kipperhell wrote: »

Property ownership has changed a lot in the last 100 years. The government certainly don't give away houses like they used to so how people now meant to archive the same level of home ownership without this subsidy? I personally don't think owning your own home is a right of existence.

Well a couple of things here. Owning a home is pretty much essential in a country like Ireland with weak and poorly enforced tenant's rights.

Secondly, why has the value of houses relative to everything else rocketed upwards over the last few years? Have they suddenly started plating the walls with gold? Did the population triple overnight? Are there any real reasons for an increase in price besides a vast supply of cheap money?

As well as that, many property pundits disputing historical norms fail to account for the fact that the sole reason for a person's life might not be to pay off a mortgage. Children, holidays, mobility, health problems, all the rest of life needs to be accounted for as well.

Not to mention that once the banks grasp that they are cutting out a huge swathe of potential customers by limiting mortgages to well paid employed couples only, see how fast they backpedal.

Bearing all of these factors in mind, a return to the situation where one person can afford a home is inevitable.

tHE vAGGABOND wrote: »

The price of oil going mental is enough to cause inflation problems world wide tbh - let alone the rest of Europe's problems atm..

Yep, and thats the biggy. It hit $100 a barrel the last day, for the first time ever. The ECB is going to ratchet rates through the roof.

Jamar

I don't know that one salary = enough for a house is inevitable.

I want to live in a good location. If two people want to live in that location, then, we will bid against each other. If the bank gives me x5 combined salary, and you have one salary, I will outbid you. My life might be crap; but in comparison to 15 hour commute, I might want to accept that.

SimpleSam06

Jamar wrote: »

I don't know that one salary = enough for a house is inevitable.

I want to live in a good location. If two people want to live in that location, then, we will bid against each other.

And yet the auction rooms are empty. In any case I didn't say that one salary would ever buy a mansion in Donnybrook, just that average house prices (currently in the 280 to 320k range) will drop to become affordable to a single salary.

The_Conductor

SimpleSam06 wrote: »

And yet the auction rooms are empty. In any case I didn't say that one salary would ever buy a mansion in Donnybrook, just that average house prices (currently in the 280 to 320k range) will drop to become affordable to a single salary.

In my reckoning this would imply a 50% drop in current asking prices in real terms. Would you agree? Given that we have already had a 12% drop in the Dublin area in the last year- that would infer a further drop of 36-38% on the cards. If this is the case- there are going to a lot of very unhappy campers out there......

SimpleSam06

smccarrick wrote: »

In my reckoning this would imply a 50% drop in current asking prices in real terms. Would you agree? Given that we have already had a 12% drop in the Dublin area in the last year- that would infer a further drop of 36-38% on the cards. If this is the case- there are going to a lot of very unhappy campers out there......

After a recent discussion here about inflation, I'd almost think it might be worse. However in terms of the numbers (excluding inflation), and what I would guess the ECB is going to do in the near future, a drop of 5% to 10% per year for the next four years would not be out of the question.

po0k

The sickening thing about this is that given the prices asked and paid for alot of properties, the quality and design of many recent developments leaves alot to be desired.
How many apartment blocks are left unfinished, where the construction firm has not signed off and retains control of the management company (read: builders' wives).

punchestown

Ah the revisionists. You can't help loving a revisionist. He always emerges after the event to suggest that the history you have just witnessed didn't happen at all.


In recent days, our newspapers have been full of articles telling us what transpired in the Irish property boom in 2007 (as if we didn't know). Commentators who this time last year were confidently predicting that house prices would continue rising (albeit at a slower rate -- the fictitious "soft landing") now have changed their tune and are suggesting that "we all knew it had to stop some time".

Well wait a second; if you all knew it had to stop and reverse some time, why didn't you say so beforehand or even at the time, or even when the market was turning down in mid-2006? What, cat got your tongue? Why didn't you share this great insight with the rest of us, given that you are in the "insight" sharing business?

The reason is simple. Most of these so-called commentators and economists are paid agents of the hype-machine which has dominated analysis in Ireland for the past five years. Some work for banks, others for brokers or estate agents; many are representing various lobby groups and some work for the State, which gets 28pc of the price of every new house in tax. Some might work for media outlets which make so much of their revenue from property advertising that a simple calculation tells them where their bread is buttered.

Irrespective of where they work and who they represent, one thing binds them all together and it is this: they have been putting property before people for the last few years and in doing so, have condemned many thousands of Irish house buyers to 30-year mortgages for assets that are worth considerably less than what they paid for them.

As if that is not enough, the "property before people" merchants are at it again this week, telling us that there might be a slight recovery in the Irish housing market at the end of 2008! What gall. Having misdiagnosed the boom when it was in full strength, what qualifies them to make pronouncements when the patient is much more fragile?

Would you listen to a doctor who failed to diagnose the first signs of cancer? Worse still, what would you think of that same doctor who instead of diagnosing cancer and taking immediate remedial action, prescribed a course of muscle-enhancing steroids to disguise your weakness? As the cancer spread, the steroids made you look vigorous and strong, yet every day your health was actually deteriorating.

An interesting way to look at the commentary in Ireland over the past few years is to think of the economist as a doctor and the economy as the human body. The economy, like the human body, is susceptible to bouts of weakness and strength. It is also vulnerable to contagion. The banking system, for example, acts like the heart and credit operates like the bloodstream. If the heart is healthy, it pumps money into the economy which flows, like blood, into every nook and cranny. On the other hand, like a virulent cancer which spreads into various organs, the economy too -- through the mechanism of confidence, overvaluation, outside shocks, accidents, bad behaviour/management and greed -- is also prone to infection. Problems that begin in one part of the system can ultimately contaminate the whole organism. And yet, like the human body, the economy is a surprisingly robust entity, capable of recovery, rejuvenation and renewal.

A crucial player in this complex relationship is the economist -- the doctor of the economic organism -- who, using all the tools at his or her disposal, constantly assesses what might be going on under the skin. It is essential that the economist runs regular check-ups on the patient to ensure early diagnosis of problems.

In medicine we take it for granted that "early diagnosis" is one of the keys to successful medicine. Many of us will have friends and family for whom early diagnosis has been crucial in saving their lives. We also know people who have died of fairly treatable cancers because they were misdiagnosed or where not diagnosed early enough. Equally, we all know people who simply won't take medical advice, will ignore the signs and pretend that everything is ok, afraid to confront the reality.

A good doctor is the one who tells his patients the bad news first, gets the sentimentality over with and focuses on the problem. She is the one who notices a problem and checks with 'Gray's Anatomy' to see if this has been seen before. If she is unsure, she'll consult with colleagues. Most importantly, due to a combination of instinct, experience and knowledge she will know what to look for. No one has ever criticised a doctor for diagnosing a problem too early.

Once diagnosed, it's up to the patient to respond, maybe by taking medicine, changing lifestyle or diet.

Similarly with the economy, once a bubble is diagnosed it's up to each individual to respond. No one ever suggested that you could not trade during a bubble nor use your own judgement to assess when it might burst. But the key thing to realise is that you are in a speculative mania rather than a healthy, permanent era of ever-rising prices.

Now back to medicine, consider the highly unlikely scenario of a doctor who is in the pay of a large pharmaceutical company. He is rewarded for pushing the company's products onto patients. Imagine for a moment that this doctor is paid to advise patients to take steroids to build up their muscles so that they appear like 'he-man' in the centre-fold of 'Bench-Press Monthly' or some other body beautiful magazine.

This doctor is unlikely to tell the patient that taking these steroids is bad for him. He is unlikely to look for research which reveals that there might be unpleasant side-effects. In the extreme he might actually mislead his patients. The role of the Medical Council should be to police this type of carry on and strike off doctors who behave this way. This should protect society from compromised doctors.

Now think of the economist or commentator who is in the pay of a bank, broker, estate agent, developer or some other organisation which makes money when people buy overvalued houses. These people are in the same position as the doctor working for the pharmaceutical company; they are incapable of giving impartial, sound advice because it is not in their financial interest to do so.

This is the reason they all failed to forecast the dramatic reversal in the property market last year. This is the reason they did not speak out. This is also the reason that they ridiculed sceptics who years ago offered a crucial early diagnosis.

It is not because they are bad at their job -- on the contrary they are actually extremely good at it. They are compromised cheerleaders masquerading as objective commentators and their job is to dress up a money making racket with the trimming of economic science.

The best way to protect yourself from them this year is a large dose of salt. Forget the hype. Prices are plummeting, so let the market do its thing.

You'd be mad to buy a house in 2008 -- particularly with so many charlatans desperate to get paid at your expense.

www.davidmcwilliams.ie

Demand may always outstrip supply in certain areas but when you get to a point when house prices are so insanely overvaluedthen supply and demand become less relevant....remember theres only so much money to go around. This is fine when credit is easy but as soon as it tightens house prices will soon look out of whack.

When house price inflation gets further and further ahead of wage inflation something has to give in the end.

The worldwide housing market boom fuelled by easy access to credit at historically low interest rates coupled with the pure greed and ignorance beyond belief can only end in tears.

The whole thing is a house of cards waiting to fall. House prices, consumer spending and to a lesser extent stock markets all out of control. People have begun to feel rich based on the value of their house rather than what they're earning and have thus been spending thinking that they're richer than they are.

Banks and credit card companies have encouraged this recklessness in their need to meet ever more greedy targets to keep the markets happy.

It's all a house of cards and the higher the markets have gone the further they have to fall.

This house price crash will be one of the worst in history across many areas of the world, most notably the US. Once the house of cards has fallen who'll be left to invest again to get the worlds economy back on its feet?

Dare i say 1929 and look how it took the world to recover then.

Ignorant people who've streched themselves to the limit to buy their houses in the last few years (on the basis that you can't lose investing in property) are going to get a rude awakening. Its already started in the States with many people who should never have had a mortgage in the first place losing their homes. The US banks thought that they could keep selling this debt on forever but it all comes home to roost in the end.

Mark my words at some point in the next few years we'll see the biggest economic collapse since the Second World War.

If i were you i'd start saving now.

Kipperhell

SimpleSam06 wrote: »

Well a couple of things here. Owning a home is pretty much essential in a country like Ireland with weak and poorly enforced tenant's rights.

That is your opinion not a fact. You really are assuming that it should be an option and stating your feelings it doesn't mean it has to happen.

SimpleSam06 wrote: »

Bearing all of these factors in mind, a return to the situation where one person can afford a home is inevitable.

As woman joined the work force and there was a massive increase in double incomes it seemed more inevitable that a double income would be required for family homes. That is what happened I don't see any reason that this will change unless woman stop working. Your inevitable conclusion seems to be doubtful and ignores the social changes in favour of your personal beliefs in what is right.

You can have all the opinions you want but learn to distinguish what is your personal feelings before drawing conclusions from the detail. There are real social changes in the world that have effected Ireland you must consider these. You seem to think that it is only the last 10-15 years that are responsible for house prices and home ownership.

SimpleSam06

Kipperhell wrote: »

That is your opinion not a fact. You really are assuming that it should be an option and stating your feelings it doesn't mean it has to happen.

This really seems to be your mantra throughout this forum. I'm stating it as a fact because it is a fact. Go take a gander through the many threads here about shoddy treatment of tenants, and ponder how many untold stories they represent.

While you're at it, consider why we need a charity to look after tenants rights in this country, a point that has been made to you before. Your traditional comeback, if I recall correctly, was that the PRTB isn't a charity. Threshold is, and if there was no need for it, it wouldn't exist.

Kipperhell wrote: »

As woman joined the work force and there was a massive increase in double incomes it seemed more inevitable that a double income would be required for family homes. That is what happened I don't see any reason that this will change unless woman stop working. Your inevitable conclusion seems to be doubtful and ignores the social changes in favour of your personal beliefs in what is right.

This has been discussed before in depth, and you didn't respond to the points raised then either. Just because more money might be available to a well employed couple by financial lending practices contorting themselves into what should be a regulated area, doesn't mean that is sustainable. I mean your point seems to be that people have more money, so house prices must go up. Why?

Kipperhell wrote: »

You can have all the opinions you want but learn to distinguish what is your personal feelings before drawing conclusions from the detail.

Again with the mantra. So tell me, besides your well beaten drum about women working, what "facts" exactly do you have to back up your position (and might I point out that you have stated before that your family, if not you yourself, are heavily invested in property)?

gurramok

Kipperhell wrote: »

As woman joined the work force and there was a massive increase in double incomes it seemed more inevitable that a double income would be required for family homes. That is what happened I don't see any reason that this will change unless woman stop working.
.

Women don't be in the workforce forever, they will have to have kids and start a family, they do be out of the workforce for a good few years.
Along the line i do see a social and financial backlash against throwing your kids into creches, people will cop on that the family unit is being destroyed.

This double income lark is only relevant for some of the time, people start families ya know
Personally i think its somewhere between a single income and a double income with which whats needed to afford a home, not exclusively a double income.

Then again, that might change even lower if women decided to say 'f*8k this to a career, i have my well paid steady job man who will provide for me and my kids'

Jamar

I don't want to get in a cross-fire here but surely there is some limit to what a 'unit' can pay for a house. If this limit increases, then there is the potential for the price to rise to that limit.

It is not possible to buy a house if it costs more than your limit, and generally, this will place some cap on house prices. However, there are many scenarios where house prices can trade at levels below this limit.

Therefore, the price of a house can probably not be compared to when the vast majority of 'units' depended on one-income. An increase an income DOES lead in increase in the ability to pay more, which MAY lead to an increase in price. This is probably dependent on supply-demand curves and such like.

What is scary, I think, is to look at house prices for the last X years. Now, houses prices could reasonably fall to any of those levels. The question is, what is X?

Kipperhell

SimpleSam06 wrote: »

This really seems to be your mantra throughout this forum. I'm stating it as a fact because it is a fact. Go take a gander through the many threads here about shoddy treatment of tenants, and ponder how many untold stories they represent.

You obviously have an issue distinguishing fact from opinion.

SimpleSam06 wrote: »

While you're at it, consider why we need a charity to look after tenants rights in this country, a point that has been made to you before. Your traditional comeback, if I recall correctly, was that the PRTB isn't a charity. Threshold is, and if there was no need for it, it wouldn't exist.

We don't need a charity we have a charity for historical reasons. It is not a comeback it is a response and just because you don't like it doesn't mean that it is there for the reasons you say so. This is how it is opinion and not fact.According to the theory nothing exisits unless needed men don't have nipples?:p

SimpleSam06 wrote: »

This has been discussed before in depth, and you didn't respond to the points raised then either. Just because more money might be available to a well employed couple by financial lending practices contorting themselves into what should be a regulated area, doesn't mean that is sustainable. I mean your point seems to be that people have more money, so house prices must go up. Why?

I never said it was sustainable in the same way you have not actually stated how in the current world a single income is sustainable to fund a house. I am not saying why things must be a particular way that is what you do. I am talking about what is happening not trying to superimpose a belief onto details and calling it fact.

SimpleSam06 wrote: »

Again with the mantra. So tell me, besides your well beaten drum about women working, what "facts" exactly do you have to back up your position (and might I point out that you have stated before that your family, if not you yourself, are heavily invested in property)?

What position have I stated that you find so disgusting? I don't recall stating a position mostly all I have done is point holes at incoherent thought. I am really more interested in what is likely to happen and how it will effect people. Over exaggeration of what will happen is just the same as the hysteria about buying. Certain people can't see their similarities.
As for my beating a drum about woman working I think you may be exaggerating that. People living longer, more single people, more home buying people etc... are all factors that change along with housing stock ratios to the same are major factors. Generally things changed in Ireland and will keep doing so, this will change what the norm is and you can't turn back the clock to society changes in order to have single incomes to provide for a property now. This makes what you say seem unlikely to me.

My family have been involved in property a long time hence they have seen such behaviour before. If you have a business that goes up and down with value you don't always sell up at a high and are quite happy to take the income.

gbh

Jamar wrote: »

Historically, families had access to only one income, which is no longer the case. Also, interest rates are still low in comparison to those times.

I disagree...

Yes of course to get a mortgage, a lot of couples go into the bank with two incomes. But what about if they marry and have a family. The second income is taken up paying child care costs or else one partner has to give up employment and mind the children at home.

This means people get massive mortgages with two incomes but either they dont have a family or else one partner is left to shoulder the entire mortgage in time and its back to the way it used to be. Is it any wonder there are repossessions and probably more to come?

The banks are to blame as much as everyone else for the bubble because of the way they competed to get new customers and lowered the bar.

SimpleSam06

Kipperhell wrote: »

We don't need a charity we have a charity for historical reasons. It is not a comeback it is a response and just because you don't like it doesn't mean that it is there for the reasons you say so. This is how it is opinion and not fact.According to the theory nothing exisits unless needed men don't have nipples?:p

Men have nipples = running a functional charity with many staff, offices and expenses entirely on the donations of others.

Ladies and gentlemen, I would like to welcome you to the weird and wonderful world of kipperhell, where the sky is blue and the grass is green, but only in your opinion.

Kipperhell wrote: »

I am not saying why things must be a particular way that is what you do.

Kipperhell wrote: »

As woman joined the work force and there was a massive increase in double incomes it seemed more inevitable that a double income would be required for family homes.

lol. You should start a religion, people might actually give you money for contradicting yourself.

Kipperhell wrote: »

I don't recall stating a position mostly all I have done is point holes at incoherent thought.

Incoherent thought, yes, do go on.

Kipperhell wrote: »

I am really more interested in what is likely to happen and how it will effect people.

No, you're interested in protecting your own interests, captain factual.

Kipperhell wrote: »

and you can't turn back the clock to society changes in order to have single incomes to provide for a property now.

Well guess what, the clock is already turning backwards, despite the very best efforts of the entire building / real estate industry.

Kipperhell wrote: »

My family have been involved in property a long time hence they have seen such behaviour before.

Really, so they have seen a property collapse in Ireland before. What I want to know is how you got the internet from your planet.

Jamar

Hi gbh,

I think you disagree that there are two incomes _dedicated_ to the mortgage.

The fact is that a lot of families have access to two incomes. If they have children, they have to decide if they want to keep two incomes, and spend a % on child care, reducing the amount the can spend on the mortgage. If all the income goes on child care, then this is imo a bad decision. If 60% goes on child care, that's still 40% to spend on mortgage/holidays/travel to work. If 10% goes on child care, this is a reasonable expense.

The main point is that historical comparisons to norms have to be considered very carefully. I agree with you that the children you need the tiny house for make it more difficult to pay for the tiny house. I also think that the current price drops are caused in no small part by people simply not being able to afford houses.

conor_mc

Kipperhell wrote: »

As woman joined the work force and there was a massive increase in double incomes it seemed more inevitable that a double income would be required for family homes. That is what happened I don't see any reason that this will change unless woman stop working.

Eh, rising unemployment would be a very possible reason!

Everyone wants a piece of the pie in the good days, but when the tough times roll around there simply won't be two jobs for every family unit.

In my humble opinion, at one stage rising house prices were spurred on by two-income buyers. In the last few years though, two incomes has become a necessity for buying a house. As prices fall, this burden will gradually be lifted from the shoulders of more and more couples, allowing them to purchase homes on a single-income again, if they so choose.

Kipperhell

conor_mc wrote: »

Eh, rising unemployment would be a very possible reason!

Everyone wants a piece of the pie in the good days, but when the tough times roll around there simply won't be two jobs for every family unit.

In my humble opinion, at one stage rising house prices were spurred on by two-income buyers. In the last few years though, two incomes has become a necessity for buying a house. As prices fall, this burden will gradually be lifted from the shoulders of more and more couples, allowing them to purchase homes on a single-income again, if they so choose.

You see that seems fair enough to me. You have considered factors and decide why you think there will be a particular out come.

I don't agree as I think it will be more complex with certain areas of the social structure suffering more than others with certain people being losers.

It has a deductive logic based on knowledge rather than some belief in justice.

I think Ireland caught up with property prices in European terms. Social factors changed and home ownership rate must drop. This may or may not result in a permanent price drop. I see it as unlikely prices will stay down as so many people still want to own.

SkepticOne

Two incomes being used to pay a mortgage is not a particularly new thing. In the past it was 90% mortgages of 2.5 times one income plus 1.5 times the other or thereabouts being awarded.

A lot of people convinced themselves during the boom that we had entered a period of permanently relaxed credit and prices rose accordingly.