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Ulster Bank predict a further 16% fall in house prices in 2009

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  • 17-11-2008 12:11pm
    #1
    The_Conductor
    Moderators, Society & Culture Moderators Posts: 32,285 Mod ✭✭✭✭


    http://www.sbpost.ie/breakingnews/business/mhidgbojqlkf/

    Ulster Bank is predicting that the deterioration in the public finances will worsen next year at a quicker rate than the Government is expecting.

    In its latest quarterly economic outlook, the bank says it expects the budget deficit to reach 8% of GDP next year, compared to the Government's estimate of 6.5%.

    This means the coalition could have to find €5bn more than anticipated through spending cuts, higher taxes and borrowing.

    Elsewhere, Ulster Bank is also forecasting a further 16% fall in house prices next year and a 3% fall in consumer spending.


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    #2
    andrewh5
    Registered Users Posts: 588 ✭✭✭andrewh5


    With regard to the fall in house prices my answer is good! Perhaps by the end of 2009 house prices will be where they should be instead of the over inflated level they were at due to people's stupidty and FF policies.


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    #3
    johndaman66
    Registered Users Posts: 4,097 ✭✭✭johndaman66


    andrewh5 wrote: »
    due to people's stupidty and FF policies.

    And due to peoples stupidity in voting FF into power yet again...


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    #4
    who_ru
    Registered Users Posts: 2,033 ✭✭✭who_ru


    have to disagree with you on that one. i personally think it is sweet justice that FF won the last election and are now being held accountable and responsible for the mess that is the public purse in this country.

    what makes me cringe is the fact that aherne got booted out when he did - i would have much preferred if he were still around and hear his explanations in pigeon english as to how it all went wrong.

    but the leardership defecit continues full steam ahead. Cowan might as well not actually be in power at all - he has nothing to say, and doesn't seem to know how to handle this situation at all. it's breath taking the lack of balls on that guy.

    p.s. - has anyone noticed how mary coughlan has seemingly disappeared into thin air lately? now i wonder why - she was always right on the money in her analysis.

    FF - you just know it's going to go wrong with them in charge.


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    #5
    The_Conductor
    Moderators, Society & Culture Moderators Posts: 32,285 Mod ✭✭✭✭The_Conductor


    who_ru wrote: »
    p.s. - has anyone noticed how mary coughlan has seemingly disappeared into thin air lately? now i wonder why - she was always right on the money in her analysis.

    Shes in Saudi Arabia on a trade mission with Enterprise Ireland. Nice escape......


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    #6
    ravendude
    Registered Users Posts: 585 ✭✭✭ravendude


    who_ru wrote: »
    Cowan might as well not actually be in power at all - he has nothing to say, and doesn't seem to know how to handle this situation at all.

    He always has something to say.....that he needs "time to reflect".
    There's a whole lot of "reflecting" going on.

    Seriously, I agree, they are hopeless, the sooner we have a general election the better. The only slightly positive things that are happening seem to only happen after non stop badgering by the opposition.


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    #7
    The_Conductor
    Moderators, Society & Culture Moderators Posts: 32,285 Mod ✭✭✭✭The_Conductor


    ravendude wrote: »
    He always has something to say.....that he needs "time to reflect".
    There's a whole lot of "reflecting" going on.

    Seriously, I agree, they are hopeless, the sooner we have a general election the better. The only slightly positive things that are happening seem to only happen after non stop badgering by the opposition.

    Though I hate to have to admit it- do you really think that the opposition would do any better in power?

    This country is a total mess. We have more elected and unelected officials per head of population than any other country on the planet- and none of them are effective at doing their jobs- or holding public bodies with massive expenditure accountable for their excesses (look at the ridiculous performance FAS gave to the Public Accounts Committee yesterday for example).

    The biggest problem in my eyes is the manner in which elected representatives are accountable to their own consituents first and foremost- irrespective of the position of power they may find themselves in. This encourages parochial politics- where ultimately every little town and village is aligned against their neighbours, and in turn Rural Ireland is aligned against the perceived slights by Dublin....... Its sheer madness. There is no cohesion- people looking out for the good of the country as a whole- its all what can I ring fence for my own people at home........

    Until such time as we reform our electoral system so that our representatives actually represent the country, as opposed to their local constituents, we are screwed, totally and utterly screwed, and it really doesn't matter who is in power.......


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    #8
    ravendude
    Registered Users Posts: 585 ✭✭✭ravendude


    smccarrick wrote: »
    Though I hate to have to admit it- do you really think that the opposition would do any better in power?
    I totally agree with you that politics are far too parochial in this country.
    Though, I do think the opposition are a "bit" better, though not by miles. At least they are hungry to lead, and that could hopefully translate into keeping their eye on the ball when they get the chance. Also, I think they carry less baggage in terms of vested interests than the "builders party" aka FF.
    I think they are finally starting to at least give the impression of being a viable alternative and are at least giving concrete proposals and not sitting on the fence (eg. doing a sweep on public service).

    I do agree though, Irish politics and leadership generally needs a good overhall and parochial politics has this country ruined.


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    #9
    mrgaa1
    Closed Accounts Posts: 759 ✭✭✭mrgaa1


    the 16% drop - is this related to houses at 700,000, 600,000, 500,000, 200,000 etc.... To say that all house prices will fall 16% is niave. Anyway why are we listening to banks - they caused the sitation we are in now and what do they know - has any bank or government EVER got their predictions right. Anyone building a new house from 1 Jan onwards next year - be they self-builds, developers or simply doing an extension now have to conform to stricter regulations meaning the actual cost of the build will go up - not down. Unions have secured pay deals for tradespeople that are simply ridiculous - new energy compliance means air-tightness tests and BER certs - new forms of energy devices have to be used.

    Not so long ago the Irish government lead the way in securing Irish banks and were hauled over the coals for their actions. Now it can be seen that the Irish governments actions were correct and all other major country's followed suit. The UK government is trying to stimulate growth in their country whilst admitting that in later years tax's will rise to compensate. Fair enough. The irish government needs to take the same moves and try and spend its way out - sc*ew the EU - the irish people are what matters not some eejits in Brussels. (sorry


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    #10
    SimpleSam06
    Closed Accounts Posts: 4,048 ✭✭✭SimpleSam06


    smccarrick wrote: »
    Until such time as we reform our electoral system so that our representatives actually represent the country, as opposed to their local constituents, we are screwed, totally and utterly screwed, and it really doesn't matter who is in power.......
    With that said, how would one go about forming a new political party?
    mrgaa1 wrote: »
    To say that all house prices will fall 16% is niave.
    As naive as saying they would rise by a similar amount back in 2003 or 2004?
    mrgaa1 wrote: »
    Now it can be seen that the Irish governments actions were correct
    By no means has that been seen. We will probably end up paying tens of billions of euros in guarantees by the end of the day.
    mrgaa1 wrote: »
    and all other major country's followed suit.
    Any port in a storm...


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    #11
    irish_bob
    Closed Accounts Posts: 4,271 ✭✭✭irish_bob


    smccarrick wrote: »
    Shes in Saudi Arabia on a trade mission with Enterprise Ireland. Nice escape......

    makes sense as she wont be seen over there either


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    #12
    ravendude
    Registered Users Posts: 585 ✭✭✭ravendude


    mrgaa1 wrote: »
    t

    Not so long ago the Irish government lead the way in securing Irish banks and were hauled over the coals for their actions. Now it can be seen that the Irish governments actions were correct and all other major country's followed suit.
    No they didn't follow suit, they recapitalized, which is proving to have been the right course of action.
    SimpleSam06 wrote: »
    By no means has that been seen. We will probably end up paying tens of billions of euros in guarantees by the end of the day.
    Dead right. It is actually a complete and utter scam on the government's part to say the guarantee costs us nothing at the moment. The usual government scam job.
    It sure costs us. Irish Government bonds have had their risk rating increased, which means it costs more for us to borrow, ....and that's at a time when we have to increase our borrowing.

    The guarantee is proving to have very limited effectiveness and is NOT something other governments have generally followed. They have gone down the route of recapitalization, now the Irish government is following their lead


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    #13
    The_Conductor
    Moderators, Society & Culture Moderators Posts: 32,285 Mod ✭✭✭✭The_Conductor


    ravendude wrote: »
    Dead right. It is actually a complete and utter scam on the government's part to say the guarantee costs us nothing at the moment. The usual government scam job.
    It sure costs us. Irish Government bonds have had their risk rating increased, which means it costs more for us to borrow, ....and that's at a time when we have to increase our borrowing.

    Not only is it current borrowing which is more expensive- but also quite a lot of our national debt. Our spread increased by fully 1% over other sovereign Eurozone debt as a result of the guarantee. Irrespective of fresh borrowing being pricier (which it is) we need to refinance 35 billion by April of next year. The current proposals are to do this by way of short term 3 year bonds at the higher rate- aka an immediate additional cost of 350 million per annum- for that refinancing job alone- and there is the fresh borrowing and other refinancing operations which would both have to be priced into the equation.........


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    #14
    johndaman66
    Registered Users Posts: 4,097 ✭✭✭johndaman66


    who_ru wrote: »
    have to disagree with you on that one. i personally think it is sweet justice that FF won the last election and are now being held accountable and responsible for the mess that is the public purse in this country.

    Well all the same if so many people are loosing their jobs and homes I think its a severely high price to pay for the sweet justice you talk about. Look at the state of the health services, funding for schools, talk of re-introduction of college fees, disclosures regarding FAS in the last few days etc etc. At that price I would rather FF not being served the sweet justice tbh.


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    #15
    loyatemu
    Registered Users Posts: 14,922 ✭✭✭✭loyatemu


    the damage was already done - FG dodged a bullet not winning the last election.

    Historically they've found themselves winning power just as the economy is going down the tubes - it very nearly happened to them again. However it has given Enda Kenny a reprieve - I had asssumed that he'd be well gone before the next general election, but with FG now riding high in the polls, its doubtful whether they'll want to rock the boat by changing leader.

    I have very little confidence in EK, and I've never voted for FF or FG, but next time out I may have to grit my teeth and vote FG just to get the current lot out.

    Back on topic - 16% drop? Good, a bigger drop will be even better. Its very rough on those who have bought recently, and won't help the economy in the short-term, but it needs to happen nonetheless.


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    #16
    blast05
    Closed Accounts Posts: 256 ✭✭blast05


    Unions have secured pay deals for tradespeople that are simply ridiculous

    Well given the amount of construction workers out there who would prefer to go back building than whatever they are at now, then i don't think any developer will have any problem getting any amount of guys to work at last years rates or lower. You just let go all the guys working for you now cos you have no ongoing work and if and when you start building again you negotiate lower rates with the tradesmen/labourers etc.
    This reality has already been happening over the last 12 months ... even to the extent of where the developer is saying "i am going to let you go unlesss you accept reduced rates."


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    #17
    jackal
    Registered Users Posts: 794 ✭✭✭jackal


    mrgaa1 wrote: »
    the 16% drop - is this related to houses at 700,000, 600,000, 500,000, 200,000 etc.... To say that all house prices will fall 16% is niave.

    mrgaa, if he had said all houses will fall 16,000 Euro, that would be naive. A 16% average fall is just that - an average. Some will hold up better, some will fare worse.

    It is just yet another finger in the air prediction from the banks, you are right there. The only way of figuring out what house prices are likely to settle at is to do it scientifically. http://www.irishhometruths.com/node/103 has a number of ways to calculate the value of a house (in a rational market) try them all and see what the average is if you really want to know.


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    #18
    mrgaa1
    Closed Accounts Posts: 759 ✭✭✭mrgaa1


    blast05 wrote: »
    Well given the amount of construction workers out there who would prefer to go back building than whatever they are at now, then i don't think any developer will have any problem getting any amount of guys to work at last years rates or lower. You just let go all the guys working for you now cos you have no ongoing work and if and when you start building again you negotiate lower rates with the tradesmen/labourers etc.
    This reality has already been happening over the last 12 months ... even to the extent of where the developer is saying "i am going to let you go unlesss you accept reduced rates."

    there is a problem with this in that some rates are set in stone - e.g. spark may get €20.24 an hour do you think he will accept €14/15 - i'm sure legal challenges would occur. However, I agree this needs to be done all over the country for all jobs.


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    #19
    mrgaa1
    Closed Accounts Posts: 759 ✭✭✭mrgaa1


    some fair comments - i think the 16% is still niave because joe public will think that a house at 240,000 needs to drop 38,400. this is after dropping maybe 10-15% already when actually its near its bottom price. Whereas a house at 900,000 could drop 16% to 756,000. So the mindset of the buyer is set at 16% no matter what value the house is or where in the country it is. A sweeping statement does nothing for anyone looking to genuinely sell


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    #20
    spockety
    Moderators, Education Moderators Posts: 5,468 Mod ✭✭✭✭spockety


    mrgaa1 wrote: »
    some fair comments - i think the 16% is still niave because joe public will think that a house at 240,000 needs to drop 38,400. this is after dropping maybe 10-15% already when actually its near its bottom price. Whereas a house at 900,000 could drop 16% to 756,000. So the mindset of the buyer is set at 16% no matter what value the house is or where in the country it is. A sweeping statement does nothing for anyone looking to genuinely sell

    Someone looking to genuinely sell has no choice but to accept a price for their property that the market is willing to offer that seller.

    The 16% prediction is not an instruction to sellers to drop their prices, nor is it an instruction to buyers to wait for 16% drops, it is an opinion from Ulster Bank that they reckon that for market movement to happen next year it will involve drops of an average of 16%.

    People will buy a property when they feel it represents value for money for what it is relative to everything else on the market, and if they can afford the repayments. Given the glut of property on the market right now, it is obvious that buyers do not currently think that there is a lot of value to be had for their money. It is buyers and buyers only who will decide when they should buy, and you can be damn sure that if there really was a feeling that there was value to be had, the market would pick back up again.


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