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How many viewings are sellers getting?
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But I just quoted the IBF figures. People are obviously getting mortgages on property. If you eclude top-ups and remortgages, then surely the rest is from property changing hands. I accept the figure may be higher (cash buyers) but how could it be lower?
I assume your talking about sales volume here rather than the prices themselves?
Anyway, an important aspect missing is the time lag of mortgage drawdowns.
We have builders/estate agents saying sales have gone thru the floor, the explanation for that the IBF figures relate to drawdowns on mortgages taken out 6mths-1yr ago while that apt takes on average 18months to build.
So i'd expect the volume of new builds to keep dropping as per time lag and maybe 2nd hand house transactions not dropping as much but still dropping to be significant.
Add in cash buyers who are a small minority of buyers(common sense on that as who has 300k lying in a bank account ready, not many do!) then they only help the figures by a small amount.
If the IBF had separated which mortgages are for new and 2nd hand hses, it would help!
For the future, i'd expect the volume of transactions/mortgage loans to tumble even further due to bad economic news as well as lack of new builds been sold.0 -
Theboinkmaster wrote: »No offence axel rose but you appear to be quite ignorant of what's going on in the Irish property market.
Your house is only worth what someone else is able/willing to pay - it is obviously overpriced if it has not sold yet, as you've been told several times on this thread.
And what do you mean offers off the wall?! Any offer is better than nothing and perhaps you have unrealistic expectations as to the value of your property.
For example:
Lets say in 2005 your house was worth €600k - now you have it on the market for €500k and your highest "off the wall" offer is €350k.
You think it's crazy but the problem is your house was never really worth €600k or €500k - it's only worth what someone is willing to pay so if the highest someone is willing to pay is €350k then that simply is the value of your house, currently.
Maybe in 2005 it was worth €600k if someone would pay that then but in the current circumstances there's every chance that the most you'd get for the same house over the next 2/3 years could be as low as €300k.
Do some research here, and especially on the propertypin - IMHO the property drops seen so far are only the beginning and I (along with many well researched folks) can see another 20-40% coming off over the next few years
Bang on the money with that post.
Reality bites0 -
People did listen to people on this site. Many of those people will end up bankrupt or repaying loans for decades to come with nothing to show for it.But if you listen to people on this site, 2006 was the peak when bankers went out on the streets and shoved money down people’s throats.
I find the IBF figures interesting. Investment activity at the peak was more like 40%, not 13.3%. So would I raise a question mark over the source, which is a private commercial group who stand to profit more than anyone from a resurgence in house prices? Yes, I think so. There is a reason that Irish banks had a hard time getting loans from other banks, as opposed to most European banks.That number was unsustainable. The number has dropped from 9000 a month which just about everyone agrees was too high. It is now about 5500 a month. If you listen to people here 5500 translates as "no one is buying".A friend of mine bought a house in Dublin 8 in 2005 for €606,000. He has just sold it. Had he come to this site first he would have been told it would never sell etc etc. He has just sold fit or €850,000.
Indeed. I know three sisters, asian immigrants, who have just agreed to buy a house considerably smaller than the one they are living in (two children between them and another on the way), where the interest repayments alone are approximately the same as the rent they are paying at the moment. A few months ago I sat them down and went through the hard numbers on it, pointing out that their money would be better invested almost anywhere else. You just can't talk to some people.That buyer was an idiot.
The three of them are working in McDonalds.0 -
at the end of the day, someone who bought a house for 500k at the height of the boom will loose some money..... those amounts are varied but wages wont go down. Some people might loose their jobs but not everyone. so i think there will be some horror stories but most people will be quietly content.
Just like house prices won't go down. Irish wages are very high compared to other countries, it's probable they will go down both in nominal value and also due to wage stagnation adjusted with inflation. It's funny how Irish people put blinkers on sometimes. By saying everything will be okay then of course it will be okay. There is a fair chance of this bad scenario happening. What happens when the government overborrows and can't meet expenses, of course they will have to make cuts eventually, they will be forced to. In the meantime private industry will quietly adjust offering prices for new vacancies.
By saying 'expenses in Ireland are higher' or 'people need to make your mortgage payments', it doesn't make any difference in the grand scheme of things.0 -
There are a few facts that we are all missing here:
Ireland is the "youngest" country in Europe between ages 16-25. In previous bad times there was a solution - jump on the boat or plane and head to USA, England etc... In these times theres no point as its worse in them places.
All these people have to live somewhere - gone are the days when the whole clan stays at home until the day they get married. Some will stay a bit longer but our society has moved on. therefore they will need somewhere to live. If they can't afford to buy they'll have to rent
If all these people need somewhere to rent then someone will buy houses to rent out. Maybe developers etc.. will fill this void but the banks are looking for their interest repayments on the loans. Banks should just accept any monies back as repayment on the loan - not the interest rates. Wages are high in Ireland and unless everything drops the same % then they aren't going to fall too much. So really I don't think its all doom and gloom. The period of rectifying is very much with us and there will be anomalies along the way. Previous downturns in markets similar to our own have always rebounded back - although it took a few years.
IMO banks were the problem, are the problem and now that the government has their teeth into them the first thing that should be done is too force the banks to lend. All business's, homeowners, etc... need loans. The world works on credit so START LENDING0 -
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There are a few facts that we are all missing here:
Ireland is the "youngest" country in Europe between ages 16-25. In previous bad times there was a solution - jump on the boat or plane and head to USA, England etc... In these times theres no point as its worse in them places.
All these people have to live somewhere - gone are the days when the whole clan stays at home until the day they get married. Some will stay a bit longer but our society has moved on. therefore they will need somewhere to live. If they can't afford to buy they'll have to rent
If all these people need somewhere to rent then someone will buy houses to rent out. Maybe developers etc.. will fill this void but the banks are looking for their interest repayments on the loans. Banks should just accept any monies back as repayment on the loan - not the interest rates. Wages are high in Ireland and unless everything drops the same % then they aren't going to fall too much. So really I don't think its all doom and gloom. The period of rectifying is very much with us and there will be anomalies along the way. Previous downturns in markets similar to our own have always rebounded back - although it took a few years.
IMO banks were the problem, are the problem and now that the government has their teeth into them the first thing that should be done is too force the banks to lend. All business's, homeowners, etc... need loans. The world works on credit so START LENDING
10-15% of houses are vacant according to some stats. There were 200,000+ polish people in Ireland when those stats were released. They will not stay in Ireland. Plus if there are few jobs less people can afford to buy or even rent expensive accommodation.0 -
force the banks to lend. All business's, homeowners, etc... need loans. The world works on credit so START LENDING
You are having a laugh :pac:
The banks were lending imaginary money and things are catching up with them. The banks don't have any more money to lend so how can you force them to do so.
I would hate, in any way, to be involved in the property industry now, next year and for the next 10 years at least.0 -
Join Date:Posts: 30620
10-15% of houses are vacant according to some stats. There were 200,000+ polish people in Ireland when those stats were released. They will not stay in Ireland. Plus if there are few jobs less people can afford to buy or even rent expensive accommodation.
Yes- its reckoned that we have over 3 years supply of property entirely vacant at present.
mrgaa1- banks have borrowed the money they lend to people from elsewhere. Its not simply the case that they can forego the interest element of the repayments. At present rental yields are not supported by house prices, and they are falling- so why should anyone buy property to let it out, it makes no economic sense (unless property falls significantly in value or rents shoot up- the former is more probable than the latter).
Also- wages may be high in Ireland- but we also have shockingly high indirect taxation on goods and services, along with silly prices on everything. So while the headline salaries may look good- you could very well be better off earning half your salary elsewhere (or indeed for the lower paid, better off on the dole with the different allowances that are available to people). There is very little incentive on the average person here to work that overtime, when they will loose almost 70% between various taxes direct and indirect, and subsidise our welfare state in the process.
Previous downturns in markets similar to our own have rebounded- certainly- but if you look at the most similar models (eg Japan) even now property is not where it was 30 years ago, and interest rates there are at 0.5% and there is pressure to lower rates to 0% (if you factor in inflation they are actually paying people to borrow money......)
Its all well and good saying banks are the problem- they are a symptom though, rather than the problem. Perception and sentiment are the problem. People feel poor, they feel less well off, they worry about their jobs- they are less likely to try to borrow or to spend- and so the cycle goes on.0 -
all good arguments - but if the banks don't lend NOTHING positive happens. The banks must lend to business's and to the public. This is the most crucial aspect of the entire problem. It was bank liquidity that was the major factor - other problems manifested very quickly. House prices were very high but they are not too far away from being realistic. The financial system as we knew it is over. Greed has taken over and a lot of profit taking is being made at the moment and this is why the stock market is yo-yo ing. We'll see a difference in 6 months - the backing of the governments will work.0
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The blinkers are getting bigger and bigger. Sure it will be okay after 6 months.
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There are a few facts that we are all missing here:
Ireland is the "youngest" country in Europe between ages 16-25....
Ah, the old 'demographics are on our side' argument for Ireland's continuing success! If having lots of children and a young population was so important to economic success, please explain why the African continent isn't the economic powerhouse of the globe?!
Wealthy countries with low birth rates can 'import' workers during boom times (like Ireland and the Poles) and close the gates during economic hardship.0 -
Join Date:Posts: 30620
all good arguments - but if the banks don't lend NOTHING positive happens.
Not entirely true- if they don't lend, they don't end up with more bad debts on their asset sheets, that the poor taxpayer has to guarantee.The banks must lend to business's and to the public.
No. They have no obligation whatsoever to lend to anyone. They do not have a public service remit, regardless of what you or anyone else thinks. They only people they are answerable to are their shareholders (and allegedly the toothless Financial Regulator).It was bank liquidity that was the major factor - other problems manifested very quickly.
As this is the Accommodation/Property forum, I can only assume that you are talking about property prices. They peaked well before the credit crunch. Indeed their entire rise was governed by the availability of cheap credit without realistic credit checks, or stress testing of applicants- and not bank liquidity at all. Banks were not illiquid, and even on Monday of last week were not- but funds were priced at a level above which the banks did not want to borrow- which is an entirely different situation.House prices were very high but they are not too far away from being realistic.
Perhaps you might like to elucidate this point? Frankly property prices had devolved all relationships with underlying fundamentals- only with massive falls are they slowly once again entering what can reasonably be expected in a process of economic normalisation.The financial system as we knew it is over.
No- its simply returning to prudent business practices. If they manage to settle a lot of their outstanding debts over the next 10 years (2 years is totally unrealistic), perhaps we may even have a stronger financial system than we ever had.Greed has taken over and a lot of profit taking is being made at the moment and this is why the stock market is yo-yo ing.
Playing the stockmarket is gamble on the part of participants. With the ban on shortselling- the falls in the stock market are a simple reflection of the fact that there are more people trying to sell stocks and shares than there are available buyers. Its a market norm- prices fall until such time as there is equilibrium, period. Greed doesn't enter the equation- though of course all participants are taking a punt on making a paper profit. Some win, some loose, thats life.We'll see a difference in 6 months - the backing of the governments will work.
I really wish I had your faith in government intervention- I don't. Personally I think things could get an awful lot worse before they get any better. Time will tell. That said- 6 months has to be the most optimistic timeframe I've seen in a while!0
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