DOE - House prices could fall up to 46% in 2009

martian1980

321654 wrote: »

David McWilliams has been trying to make a name for himself for over 10 years now. He had to be right one day. The same David McWilliams that im told is currently bidding on several properties in the Dublin area.

where did you find out that he is currently bidding on properties in the Dublin area?

spockety

321654 wrote: »

David McWilliams has been trying to make a name for himself for over 10 years now. He had to be right one day. The same David McWilliams that im told is currently bidding on several properties in the Dublin area.

I hear he is offering 46% below the asking prices...

jmayo

321654 wrote: »

David McWilliams has been trying to make a name for himself for over 10 years now. He had to be right one day. The same David McWilliams that im told is currently bidding on several properties in the Dublin area.

Vested Interest, I call Vested Interest :eek:
Of course he doesn't want prices to go below his bidding price

ravendude

Fatloss08 wrote: »

in a way they need to keep there mouths shut , because thats whats stopping people buying , obviously everybody wants to save money , but if they came out and said house prices are on the increase etc and economy is picking up etc

people would react and spend , and want to get house's before they went up ( so to speak )

its all scare mongering , the media is creating the scare i think

That's an infantile view of things: The notion that everything is about media world view and if everyone keeps quiet and continues to talk things up everything will be hunky dory. Economics is a tad more involved than that. There are lots of fundamentals at work.

Also, I don't think we will see compulsive buying out of fear of prices increasing for a long, long time again - maybe decades. The last boom market was characterized by a world view that up to then was immovable.
Irish people had an ingrained notion that with property "you can never lose out" and property was as "safe as houses". People know differently now and will never rush in to buy again out of an awareness of the reality of a possible future fall in prices.

Most economists agree that the next boom time in such bust markets only come again when collective memory forgets about the bust. In other words it would take another generation before we would see another boom like the one just gone. That's because those people who experienced the bust are now more cautious about the real prospect of falling prices

oceanclub

It's just amazing to see how many idiots who are still out there, who think that the reason for the property crash is da meeja, and who think that having house prices being 12 times the average wage was a good thing. I suppose these are the kind of person that vote for Beverly Cooper Flynn.

jmayo

Well for anybody that doubts prices will fall, Dell have announced they are transistioning their production to Poland and are releasing 1900 workers this year.

Dell gone with up to 3,000 jobs plus anything upto another 10,000 jobs depending on the plants.
Any bets on how much house prices in the Limerick region are gonna fall this year ?

oceanclub

321654 wrote: »

David McWilliams has been trying to make a name for himself for over 10 years now. He had to be right one day.

Yes, just as if someone constantly eats junk food without exercise, their doctor will be right when they say they have a heart attack one day. I suppose you think that if the doctor can't predict the actual day, they're wrong.

P.

321654

oceanclub wrote: »

Yes, just as if someone constantly eats junk food without exercise, their doctor will be right when they say they have a heart attack one day. I suppose you think that if the doctor can't predict the actual day, they're wrong.

P.

Some day house prices will bottom out and start rising.

Mark my words. I should have a TV show now.

BobbyD10

Interesting article from a vested interest one might say

http://www.independent.ie/business/commercial-property/we-have-got-to-get-real--house-prices-are-as-low-as-they-can-go-1595125.html

tedstriker

BobbyD10 wrote: »

Interesting article from a vested interest one might say

http://www.independent.ie/business/commercial-property/we-have-got-to-get-real--house-prices-are-as-low-as-they-can-go-1595125.html

That's actually the funniest headline I've read in a long time.

I think that plenty of people are in denial here but that is fair enough. They've seen so much easy money over the past 15 years why should they believe the facts. The only thing that I go by is fact. The fact is that this country will take 5 years and a serious reform of government policy to get back to winning ways. In terms of house prices the only thing we can go on is other what happens in other countries. I keep point to this same thing every time I talk about this issue; when a bubble bursts (and on top of this we have a world recession and financial crisis) the average drop is between 40-50%. We will be lucky to get out of this with 50%. Currently we are at about 16% from peak.
Here are a list of house price crashes and their relative drops from peak:
Netherlands: 1978–85 -50%
Finland: 1989–95 -46%
Japan: 1991–present -43%
Norway: 1987–93 -39%
Switzerland: 1990–2000 -39%
New Zealand: 1980–85 -37%
Denmark: 1978–82 -36%
Sweden: 1979–85 -35%

Here are 3 charts showing the Finnish, Japanese and the current Irish house price.

Don't be fooled, folks, as to the scale of meltdown that this country is about to see. The price of your house will hopefully be the most of your worries.

I predict a year where unemployment hits at least 12% and house prices continue to fall on average just under 2% a month. This will continue into 2010.

gurramok

A1 post there above me. A developer sells the bloody things(houses) as a living and needs to get rid of his stock hence a vested interest in talking about bottoms that are false.
When i see that house in the Beirut areas of Dublin with an asking price of 100k-150k instead of 300k-400k whilst still in good nick, then there will be a hint of a bottom!

I quote Xman from the Pin on master O'Callaghan's comments about below cost selling!:

"Howra Owen

I have a load of d'aul AIB shares that I bought in 2007 for €25.
I rang up Goodbodys yesterday to flog a few of them so I can buy a new helicopter (y'know yerself ) and those cheeky feckers tried offerin me one something for them ??

I told them they have to get real. I can't sell below cost now, can I !! Just because a handful of banks lost the run of themselves in recent years around the world, but mainly in America.

So anyway, neither of us can sell below cost, so I'll exchange 12,000 of me €25 AIB shares for one of your €300k houses. Fair?"

Dob74

BobbyD10 wrote: »

Interesting article from a vested interest one might say

http://www.independent.ie/business/commercial-property/we-have-got-to-get-real--house-prices-are-as-low-as-they-can-go-1595125.html

Heard through the grape vine last year that OOC and the other big developers in Cork got together and agreed not to drop thier prices last year. That they would hold prices up and weather the storm. Sounds like they are getting desperate. OOC is probably the most financially secure of all the developers and if he is talking sh;t like this to a newspaper he most be worried. Prices are going down and wishful thinking is not going to push them up.

oceanclub

321654 wrote: »

Some day house prices will bottom out and start rising.

Mark my words. I should have a TV show now.

Of course, house prices didn't level off, as those like yourself were saying. They crashed. McWilliams predicted this while all the others gave us the "soft landing" rubbish.

P.

FGR

Dob74 wrote: »

Heard through the grape vine last year that OOC and the other big developers in Cork got together and agreed not to drop thier prices last year. That they would hold prices up and weather the storm.

When they're setting up unofficial cartels then you know something's up. I've noticed it though. Front page prices are staying the same but I'm sure selling figures are much lower.

They have to be!

321654

I hope the drop a good bit more before i buy.

But one thing ive noticed over the last couple few years.

The Bulls were closing their eyes saying "up, up, up they cant go anywhere but up". Having wild guesses at percentages, and grapsing on to any news report (even from the Indo) that prices change rates were slowing down and there wasnt going to be a crash for a long time. They didnt understand that there are up, down, up, down cycles in everything. All the time you had the odd Bear shouting that the bulls were wrong and waiting ..... waiting for the cycle to turn so they could pretend they were a genius. As time went on the bears get more and more vocal and saying "things are about to change"


Now,

The Bears are closing their eyes saying "down, down, down they cant go anywhere but down". Having wild guesses at percentages, and grapsing on to any news report (even from the Indo) that prices change rates were slowing down and there wasnt going to be a crash for a long time. They didnt understand that there are up, down, up, down cycles in everything. All the time you had the odd Bull shouting that the bears were wrong and waiting ..... waiting for the cycle to turn so they could pretend they were a genius. As time went on the bulls get more and more vocal and saying "things are about to change"


Conclusion : We are a bunch of guessers who think we know something - nothing more. And that goes for economists too.

As my economics lecturer said - "Everyone who ever makes a prediction thinks they have all the relevant info at the time. It doesnt mean their prediction is wrong. Just that they may be talking bolox based on their info"

How right he was.

Show me someone who is rich from property and i'll show you a lucky person or someone who was able to call the ups and downs correctly. I suspect its more of the lucky person though.

oceanclub

321654 wrote: »

The Bears are closing their eyes saying "down, down, down they cant go anywhere but down".

Name a single bear who says that prices won't eventually go back up. Please, just name one.

Contrast this to the bulls who said that prices would NEVER go down.

P.

spockety

321654 wrote: »

I hope the drop a good bit more before i buy.

But one thing ive noticed over the last couple few years.

The Bulls were closing their eyes saying "up, up, up they cant go anywhere but up". Having wild guesses at percentages, and grapsing on to any news report (even from the Indo) that prices change rates were slowing down and there wasnt going to be a crash for a long time. They didnt understand that there are up, down, up, down cycles in everything. All the time you had the odd Bear shouting that the bulls were wrong and waiting ..... waiting for the cycle to turn so they could pretend they were a genius. As time went on the bears get more and more vocal and saying "things are about to change"


Now,

The Bears are closing their eyes saying "down, down, down they cant go anywhere but down". Having wild guesses at percentages, and grapsing on to any news report (even from the Indo) that prices change rates were slowing down and there wasnt going to be a crash for a long time. They didnt understand that there are up, down, up, down cycles in everything. All the time you had the odd Bull shouting that the bears were wrong and waiting ..... waiting for the cycle to turn so they could pretend they were a genius. As time went on the bulls get more and more vocal and saying "things are about to change"


Conclusion : We are a bunch of guessers who think we know something - nothing more. And that goes for economists too.

I think you're right on the bulls alright.

However, my impression from doing a lot of reading of bear opinion here, and on the property pin, is that they are much better armed with actual economic facts and principles to back up exactly what they are saying. Eyes closed? I think it's quite the opposite! I have learned so much in the last year about the fundamental principles that drive house prices in a NORMAL housing market.. rental multiples, investement yields, historical salary multiples, international norms, etc. These all come from bear opinions I have read.

I never once saw a bull explain the fundamental economics behind their arguments as to why the market will not crash, why the market will only go up, or more recently why the market has suddenly 'bottomed' even though nothing is actually selling at any kind of normal rate.

The bottom of the market will not be announced in a press release by some vested economist of leading estate agent. The bottom of the market will be declared by people who want to buy property. Once they start buying lots of property, and estate agents start turning over properties at normal rates over a relatively decent sample of time, then we will know that the market has bottomed, but there will be no announcement.

The_Conductor

321654 wrote: »

Conclusion : We are a bunch of guessers who think we know something - nothing more. And that goes for economists too.

While what you're saying may be true for the media and indeed large swathes of the public- economics is actually classified as a science, and is governed by sound principles, as indeed any science is.

Once sound principles have been applied to a particular situation and data has been 'normalised', it is possible to predict courses of action and their probable effects on the wider system.

Before totally dismissing economists and economic commentators- I'd suggest you read Stephen Dubner and Steven Levitt's book Freakonomics- where economic principles are applied to the simple every day interactions in life- such as purchasing a cup of coffee, and how this simple action has wider implications on the economic system at large.

It was not a wild guess that Irish property prices were going to fall- we had historic empiric data to support the hypothesis at the time, and so it came to pass. There are some elements of the equation which are extremely difficult to measure- in an Irish context it was the degree of 'euphoria' associated with property combined with the historic hatred of landlords and what they represent (though this obviously did not stop people aspiring to be landlords themselves). Were it possible to accurately enumerate the degree of this euphoria- its probable that an accurate call on what the market height might be could have been made.

The very fact that those vested interests who are the only people in possession of the current data on house sales are refusing to share this data (lest it further undermine the housing market) (The IAVI), is exercising a similar degree of negative pessimism to the positive euphoria which was fed by the media. People are nonetheless trying to use scientific principles to accurately enumerate a point of economic equilibrium for the Irish property sector. This is obviously happening:

1. Without accurate sale figures
2. Without an accurate measure of vacant properties
3. In a worsening economic climate (its now thought unemployment figures could easily reach 15%)
4. In a situation where the Irish public have the second highest level of personal debt in the world
5. In a situation of Victorian laws governing personal bankruptcies
6. In a situation where there are disincentives to seeking employment for the unemployed person- and for offering employment for the small business employer.

Where people do try to enumerate these things- they are accused of taking 'wild guesses'- and their forecasts are ridiculed as heresy. You can't have it both ways though......

321654

oceanclub wrote: »

Name a single bear who says that prices won't eventually go back up. Please, just name one.

Contrast this to the bulls who said that prices would NEVER go down.

P.

The bulls said "prices werent going to come down for several years".
Now im not counting the thick types who just pull these statements out of their ass. These were the ones who had a reasonable grasp of economics.

Just as i wont listen to the ones who say prices are going to go down forever either.

All boom endings happen with a major shock to the economy. Credit crunch was the trigger. Then the house of cards fell. For a recovery to happen there needs to be a change in confidence. this is a much slower process, but it does and will happen eventually. Trying to put timelines on it is an impossible task.

oceanclub

321654 wrote: »

The bulls said "prices werent going to come down for several years".

That simply isn't true. Many bulls said that prices would not come down at all. That we would see the mythical "soft landing" where prices levelled off. You're not going to deny that no bull used the term "soft landing", are you?

I must look for the old Herald cover story from 2006 which said that the boom was due to continue for another 15 years.

P.

spockety

321654 wrote: »

The bulls said "prices werent going to come down for several years".
Now im not counting the thick types who just pull these statements out of their ass. These were the ones who had a reasonable grasp of economics.

Just as i wont listen to the ones who say prices are going to go down forever either.

All boom endings happen with a major shock to the economy. Credit crunch was the trigger. Then the house of cards fell. For a recovery to happen there needs to be a change in confidence. this is a much slower process, but it does and will happen eventually. Trying to put timelines on it is an impossible task.

Just as I believe there was no 'boom', rather there was a 'bubble', I believe there was no 'credit crunch', rather a retreat from 'wreckless lending'.

El Stuntman

having seen the damage that Owen O'Callaghan wreaked upon the political and planning systems in this country through the machinations of his bagman, the loathsome Frank Dunlop, I would be more than delighted were he to go bust in a big way (and even more so were he to end up in jail but that won't happen - this is Ireland after all) :mad:

321654

oceanclub wrote: »

That simply isn't true. Many bulls said that prices would not come down at all. That we would see the mythical "soft landing" where prices levelled off. You're not going to deny that no bull used the term "soft landing", are you?

I must look for the old Herald cover story from 2006 which said that the boom was due to continue for another 15 years.

P.

not saying noone said they would never come down. im saying that people who knew anything about what they were talking about never said that. They may have been wrongly under the illusion that a crash was a long way off though.

Im sure you can find some stories now and over the next year too about how they'll never go up.

Sure look at the first few posts in this thread. People saying interest rates might hit 20% because houses will be so cheap. Bit extreme too.

oceanclub

321654 wrote: »

not saying noone said they would never come down. im saying that people who knew anything about what they were talking about never said that. They may have been wrongly under the illusion that a crash was a long way off though.

Im sure you can find some stories now and over the next year too about how they'll never go up.

Sure look at the first few posts in this thread. People saying interest rates might hit 20% because houses will be so cheap. Bit extreme too.

At this point I have to either think you're a troll or deliberately being a contrarian just for the sake of argument. You previously condemned McWilliams for forecasting a property crash at some point without being specific about the date.

Now, you're saying that, quote, "people who knew anything about what they were talking" actually said there would be a crash at some point! And in your mythical world, no property developers, economists, politicians or vested interests ever claimed a soft landing.

For someone who doesn't claim to be a bull, you seem to be going through some contortion in order to defend them, while setting up strawman arguments against the bears.

P.

ZYX

tedstriker wrote: »

Here are 3 charts showing the Finnish, Japanese and the current Irish house price.

Don't be fooled, folks, as to the scale of meltdown that this country is about to see. The price of your house will hopefully be the most of your worries.

I predict a year where unemployment hits at least 12% and house prices continue to fall on average just under 2% a month. This will continue into 2010.

However if you base your predictions for Ireland on your graph for the Finish market then house prices are going to rise again hugely. Prices in Finland dropped until 1995, then, over the next 7 years they rose 100%. If you believe the Finnish example is relevent to Ireland then this year is probably a good time to buy.

ntlbell

321654 wrote: »

not saying noone said they would never come down. im saying that people who knew anything about what they were talking about never said that. They may have been wrongly under the illusion that a crash was a long way off though.

Im sure you can find some stories now and over the next year too about how they'll never go up.

Sure look at the first few posts in this thread. People saying interest rates might hit 20% because houses will be so cheap. Bit extreme too.

were they not just under 20% in the 70's and early 80's?

spockety

ZYX wrote: »

However if you base your predictions for Ireland on your graph for the Finish market then house prices are going to rise again hugely. Prices in Finland dropped until 1995, then, over the next 7 years they rose 100%. If you believe the Finnish example is relevent to Ireland then this year is probably a good time to buy.

Finland wasn't facing into an economic recession in the immediate aftermath of their first bubble, and with control of their own central bank probably inflated their way out of it!?

Besides which, there seems to a body of opinion that they are in fact in the middle of another bubble and facing into a crash.. interesting graphs here.. look at increase in the price of their houses relative to their incomes.. looks familiar :eek: :eek:

http://housingfinland.expat-blog.net/category/housing-bubble

Heh.. see the predictions of a 'levelling off'.. maybe we should lend them our own term seeing as we have no use for it.. 'soft landing'.

jmayo

tedstriker wrote: »

That's actually the funniest headline I've read in a long time.

Here are a list of house price crashes and their relative drops from peak:
Netherlands: 1978–85 -50%
Finland: 1989–95 -46%
Japan: 1991–present -43%
Norway: 1987–93 -39%
Switzerland: 1990–2000 -39%
New Zealand: 1980–85 -37%
Denmark: 1978–82 -36%
Sweden: 1979–85 -35%

That list really makes me very scared :eek:
All of those countries, bar maybe New Zealand, had a proper economic base, not totally dependent on FDI or some sh*** like retail and construction and all of them, including NZ I bet, had politicans/governments with a bit more cop on and visin than our gob****s.

321654 wrote: »

I hope the drop a good bit more before i buy.

The Bears are closing their eyes saying "down, down, down they cant go anywhere but down". Having wild guesses at percentages, and grapsing on to any news report (even from the Indo) that prices change rates were slowing down and there wasnt going to be a crash for a long time. They didnt understand that there are up, down, up, down cycles in everything. All the time you had the odd Bull shouting that the bears were wrong and waiting ..... waiting for the cycle to turn so they could pretend they were a genius. As time went on the bulls get more and more vocal and saying "things are about to change"

Conclusion : We are a bunch of guessers who think we know something - nothing more. And that goes for economists too.

As my economics lecturer said - "Everyone who ever makes a prediction thinks they have all the relevant info at the time. It doesnt mean their prediction is wrong. Just that they may be talking bolox based on their info"

How right he was.

What are you on about ?
Has any bears ever said that house prices will go down indefinetly ?
You didn't need to be an economist or a physic to have figured out that our whole system was built on a house of cards, that prices were too large a multiple of average income, that the economy was too dependent on construction/retail revenues and the continuing availability of cheap credit.
The fact that one could clearly see this, just meant in my mind that you had some basic cop on.

Sadly there were those that refused to see the elephant in the corner and some that did, but chose to ignore it because they were still busy feeding at the trough and needed to convince more suckers to buy into the scam.
To this day there are some of the suckers that fell for the myth who are hanging onto the dream, because reality is too hard to look squarely in the face.

ZYX wrote: »

However if you base your predictions for Ireland on your graph for the Finish market then house prices are going to rise again hugely. Prices in Finland dropped until 1995, then, over the next 7 years they rose 100%. If you believe the Finnish example is relevent to Ireland then this year is probably a good time to buy.

Trust me Ireland is no Finland.
Why do people compare us to countries with proper economies, home grown industry, and grown up politicans and leaders who actually have a vision past the next election :rolleyes:

Do we have a Nokia, a Valtra, a Sisu, still have a ship building industry, the worlds leading paper machine manufacturer, leading companies in timber products etc.
Have we adopted technology and pushed it's adoption thorughout society like the Finns ?

Even if we had some of these things, the timing of the bubble burst is much worse. Would it not better to be coming out of a housing bubble burst in 1995 than today ?
After all the real Dot.Com/Telco industry was taking off in mid 90s.
Can you spot any industry taking off today ?

BobbyD10

Independent has had some articles of interest lately - all subject to analysis and scrutiny of course.

http://www.independent.ie/business/personal-finance/property-mortgages/too-much-paid-for-houses-thanks-to-brokers-links-to-agents-1596415.html

321654

oceanclub wrote: »

At this point I have to either think you're a troll or deliberately being a contrarian just for the sake of argument. You previously condemned McWilliams for forecasting a property crash at some point without being specific about the date.

Now, you're saying that, quote, "people who knew anything about what they were talking" actually said there would be a crash at some point! And in your mythical world, no property developers, economists, politicians or vested interests ever claimed a soft landing.

For someone who doesn't claim to be a bull, you seem to be going through some contortion in order to defend them, while setting up strawman arguments against the bears.

P.

I'll tell you what i claim to be. I claim to be neither bull nor bear as i can simply say i dont know what is going to happen to the economy here.

I am saying that ANYONE who thinks that they can predict what will happen in the economy more than 2 - 3 years in advance is an idiot. You can say what you think may happen, you cannot say what will happen.

McWilliams has been shouting the sky is falling long enough so that it was eventually going to fall anyway. These are the cycles.

Economists get paid even when they are wrong 90% of the time. Even the pros are no good at it. What other job could you get where you can have such a miss rate.

when i said "people who knew anything about what they were talking" i was talking about those who had some education in economics (those who know they are only guessing and will tell you so), rather that those who sit around a pub table making predictions.

Pub/internet amateur economists are no harm to anyone really, but should realize themselves that that is what they are.

Having a government who tell lie after lie is no good to anyone either. That there is our biggest problem.