What is going on with prices???!!!

Karlrove

Are there others like me? Ive been talking to good friends who work in property and banks(mortgages) and they tell me that this is the belly(coming to end) of the decrease in house prices and that with interest rates going down theres going to be a change come february(ie house prices will steady and first time buyers will begin buying and come off the fence). Some even said it has begun already after a completely dead 6 months.
However, according to some economists and tv programmes(and boards postser)the property in Ireland will tumble 15 percent and more over the next few years. MY question is who to believe as so much info coming from different places. Also,if youve read my original post about buying,any advice appreciated!!!(please find my post and advise me on my problem)

Senna

Just think for a minute, the people you are talking to are making a living out of property,i.e their jobs depend on it. Do you think maybe they are bias?

Go to www.thepropertpin.com it will be a great resource for anyone thinking of buying.

edit; i just read you other post (didn't read the whole thread) but dont buy now because you think you will not find another house like it or someone will snap up that house. If the house is in a city and unique, then it'll be €1million+. You have just found a house you like, but there are plenty others.
I think an offer of 375 on a house that is advertised at 425 is mental. But i dont know the details.

By all means buy a house now, yes the market is falling, but if you get a good deal now then go for it. But i'm sorry yours sounds like a terrible deal and you will be kicking yourself only a few months down the line.

Tom123

I don't think you friends are misleading you Karl but they are incorrect IMO.

Interest rates are irrelevant at this stage of Irish the property bubble.
The major driving force behind house prices over the next 18 months will be unemployment. And the rate of change is becoming worrying and our final destination unknown.

Over the last year the live register has increased from 157,449 to 251,951. Because of the sheer pace of this increase the Department of Social Welfare has been unable to cope. There are another 50k people on a waiting list and the government has asked from transfers from other Departments to help cope.
Further layoffs in construction will happen next year as we move from 50k completitions this year to 20k next year.
Redundancies in Jan will be very high as companies let people go after keeping them over Christmas.

Taking all this into account the live registers next year is likely to touch 400k.

I don't think it would make a difference if interest rates were 0% there is nothing that is turn the Irish property market next spring. Very very few are going to buy when they have lost their job or they fear losing their job.

A 15% fall is quite likely to be the very tip of this iceberg Karl. I think we have much further to go before prices bottom out closer to 30% than 15%

aquascrotum

Have to agree with Tom123, I work in the construction sector and the fear for our jobs is palpable.

As yer man off Location Location Location said last night, 3 things drive the property market even in a recession - death, divorce and debt. The country is in debt to it's eyeballs and a lot of people are about to find out that they can't meet their repayments when they lose their jobs - hence another flood of properties onto the market when the sh*t hits the fan, as well as less people in a position to buy.

I'd buy now only if it was the absolutely right property for me, was happy to live there long term (riding out being in negative equity for a prolonged period), and was 100% secure in my job.

gurramok

It's hilarious Karl what these people who work in the market will tell you. I echo aquascrotum opinion.
And remember, these same estate agents and mortgage related bankers have always predicted the soft landing numerous times and recoveries around the corner, they are compulsive liars.

Nearly 30 people in a sister company of my workplace are being laid off in IT in Dublin, they will be added to next months live register's figures, the cutbacks are everywhere.

Guess what, watch the retail sales figures until March, that will tell you if people have money or not on previous years to splash out. So far these figures have been plummeting month on month for nearly a year.
If people ain't buying in shops which our economy depends alot on, why should they buy overpriced houses?

spockety

Nobody knows for sure, but the indicators are not good.

If all someone can offer you is "Interest rates falling will prop up the market" then you should raise an eyebrow. If they have a lot more information to support their claim, then who knows, maybe they are correct?

The fundamentals however, do not appear to point to anything other than more drops.

Even Ulster Bank are saying it.. do you think it is in their interests to lie? It's the opposite.

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

jetski

My advice would be if your asking someone for advice about buying a house you should first ask do they own a house themselfs or not. The majority of people on the net give out about how expensive property is are mainly fence sitters themselfs.... im not saying buy and im not saying dont buy you decide that, but you can get a deal and dont forget interest rates are in freefall and interest relief has gone up 5% from 20% with that in mind how would you feel ive in 3 months time it was all over the news that prices are leveling out and sellers were no longer willing to take such cuts? another thing to consider is your long term plans as a house will go up in value eventually.

The_Conductor

jetski wrote: »

another thing to consider is your long term plans as a house will go up in value eventually.

Perhaps in absolute terms- but when you factor inflation into the equation- its very possible that even after a massive reduction it may still fail to keep pace with inflation. I am aware that we are thought to be entering a deflationary period- and its possible it may stay that way for 3-4 years, depending on a lot of factors, most of which we have little or no control over.

OP- I'd have to mirror most comments on the thread here- assuming that prices will stabilise simply because interest rates are falling means absolutely nothing. Japan had no interest rate for a number of years (actual rate zero) but people would not borrow, or spend and it went into a deflationary spiral- akin to that currently on the horizon for us. It took almost 14 years to rectify that problem. That was the result of a bubble in commercial property prices which blew people's faith in the market.

On a seperate note: does anyone have any update on the Bank of Ireland talks this morning? It looks like they are still pushing for a foreign buyer rather than recapitalisation. What a mess......

Climate Expert

My advice would be if your asking someone for advice about buying a house you should first ask do they own a house themselfs or not

What difference does that make? If somebodies analysis is correct or well informed then thats all that matters.

jetski

Thats true but most of the time i really dont think it is

SimpleSam06

jetski wrote: »

Thats true but most of the time i really dont think it is

Difficult as it may be to pin down accurate facts in an environment like the Irish property market, I think people have done a fairly good job in building up a clear picture hereabouts, backed up by such facts as are available, and drawing conclusions from them. If there are facts you are aware of or if you think the conclusions are wrong, by all means increase the knowledge of the group, you'll be thanked for it.

El Stuntman

jetski wrote: »

My advice would be if your asking someone for advice about buying a house you should first ask do they own a house themselfs or not. The majority of people on the net give out about how expensive property is are mainly fence sitters themselfs

this may be relevant in some cases i.e. some house owners may be in denial about the state of the property market (witness the twits holding out for peak bubble prices for the last two years)

some house owners are very realistic however - I'm one and I expect the value of my property to fall my another 40/50% from its current value. There is virtually nothing underpinning Irish house prices, they are still at crazy levels and will continue to fall back towards mean.

jetski wrote: »

.... im not saying buy and im not saying dont buy you decide that, but you can get a deal and dont forget interest rates are in freefall and interest relief has gone up 5% from 20% with that in mind how would you feel ive in 3 months time it was all over the news that prices are leveling out and sellers were no longer willing to take such cuts? another thing to consider is your long term plans as a house will go up in value eventually.

lol, tell that to the Japanese or the Germans - this is patent nonsense

jetski

Well as ive said before....

And i believe still there is heaps and heaps of rubbish

But there are a few gems in the sand begining to show themselfs.

Interest rates have dropped a serious amount and will probably drop quite a bit further.

Mortgage interest relief went up from 20% to 25%

And given the fact there is about 30% off peak prices you can still get a considerable chunk off the asking.

Think how much better people have it now than they did upto three and four years ago.

And Remeber if sellers get a hint that prices have leveled you can forget about them taking another hit on the asking.

jetski

El Stuntman wrote: »

lol, tell that to the Japanese or the Germans - this is patent nonsense

This is Ireland not Japan or Germany.

Darragh29

gurramok wrote: »

It's hilarious Karl what these people who work in the market will tell you. I echo aquascrotum opinion.
And remember, these same estate agents and mortgage related bankers have always predicted the soft landing numerous times and recoveries around the corner, they are compulsive liars.

Nearly 30 people in a sister company of my workplace are being laid off in IT in Dublin, they will be added to next months live register's figures, the cutbacks are everywhere.

Guess what, watch the retail sales figures until March, that will tell you if people have money or not on previous years to splash out. So far these figures have been plummeting month on month for nearly a year.
If people ain't buying in shops which our economy depends a lot on, why should they buy overpriced houses?

This article would appear to torpedo that argument...

http://www.rte.ie/news/2008/1118/rent.html

Would the people who are in the banks be working for either of these two banks, who will probably be screaming for taxpayers funds in the form of a recapitalisation by this day next week???

http://www.rte.ie/news/2008/1118/economy.html

Darragh29

Sorry, quoted incorrectly there... Meant to quote the OP...

spockety

jetski wrote: »

This is Ireland not Japan or Germany.

Yep, you're right, we don't have indigenous powerhouse hi tech R+D/manufacturing or a behemoth auto industry to help our economy.

Actually, WTF do we have?

El Stuntman

spockety wrote: »

Yep, you're right, we don't have indigenous powerhouse hi tech R+D/manufacturing or a behemoth auto industry to help our economy.

Actually, WTF do we have?

debt, lots and lots of it (private, public starting to blow out too)

'assets', worth lots and lots less than the debt

jobs, going, going gone

worthless zombie banks

you're right jetski, we are certainly not Japan or Germany. If it wasn't for the Euro, the IMF would have taken over by now. Now stop talking utter rot about 'value' in the market.

SimpleSam06

jetski wrote: »

And Remeber if sellers get a hint that prices have leveled you can forget about them taking another hit on the asking.

Sellers will take what the market gives them.

spockety wrote: »

Actually, WTF do we have?

Shag all, and its even more heartbreaking when you consider the amount of money wasted over the last ten years, and what we could have had.

Tom123

jetski wrote: »

This is Ireland not Japan or Germany.

Ireland will be worse

The_Conductor

Tom123 wrote: »

Ireland will be worse

Unfortunately I'd be inclined to agree.......

jetski

Tom123 wrote: »

Ireland will be worse

Do yourself a favour and emigrate if thats the case.

rockbeer

jetski wrote: »

Do yourself a favour and emigrate if thats the case.

I would if I could sell the bl00dy house.

Shambo

jetski wrote: »

Well as ive said before....

And i believe still there is heaps and heaps of rubbish

But there are a few gems in the sand begining to show themselfs.

Interest rates have dropped a serious amount and will probably drop quite a bit further.

Mortgage interest relief went up from 20% to 25%

And given the fact there is about 30% off peak prices you can still get a considerable chunk off the asking.

Think how much better people have it now than they did upto three and four years ago.

And Remeber if sellers get a hint that prices have leveled you can forget about them taking another hit on the asking.

What is the umemployment rate now? 6.4%??

What wil it be next year? 8.8 % (According to Friends First and a few others)

Who sin their right mind is going to spend upwards of €250,000 now when they could well be out of a job in 3 or 4 months.

That alone will drive prices down even more

ntlbell

Ireland is different

There's never been a better time to buy.

The fundementals are sound.

We're heading for a soft landing

FTB's are back and bigger and btter than before

Get the party started..

nhughes100

One problem is even with low interest rates banks are still appearing to be very reluctant to borrow money so since you can't transfer a mortgage to a different property and it would be entirely likely if you're moving that you'll need more money anyway it's a major stumbling block to boosting the property market. There's going to be a tiered affect of prices.

Firstly people who bought apartments are going to suffer, I don't know anyone who bought an apartment and intended to stay there - First step on the property ladder was the phrase being banded about. City centre apartments will always have a value but those in the suberbs and in country towns are going to seriously devalue as the properties have a very low value in the first place.

Look at what people want from a house- most people are going to want a 3 bed semi d, with 2 bathrooms(1 en-suite) and a front+back garden with easy parking for 2 cars. No management fees and reasonable access to amenities. That disqualifies most housing units(i hate that phrase) built in Dublin in the past 10 years. Houses near to where I live were sold for 130-150 off the plans, during the height of the boom they went to 235-250 and now go for around 180-200 depending on gardens and what you're leaving behind. They tick all the above boxes and will always have a market demand. Compare this to your 400K 2 bed apartment with no garden, management fees, concrete jungle and you have to drive to get a pint of milk. There's no comparison as to what house has true value.

The next group of people to be hit will be those who bought in vast housing estates in the commuter belt, essentially Dublin style housing estates but in a different county with no benefit of "country living" ie peace+quiet, small housing developments, local access to amenities, nice surrounds, everyone knows each other.

Another thing I see is that you still don't get much change out of 350-400K for a decent 3 bed semi anywhere in Dublin so I think we've got quite a while to go yet before it bottems out. A commentator recently predicted that houses currently going for 800-900 K in Dublin are going to hit 200K ish, there's not a hope of this happening. No one can take that hit so they'll just stay put. People will just have to stay put as far as I can see, they'll negotiate longer mortgages with the banks and you may see a situation as happens in Japan of inherited debt rather then inheriting capital. The banks don't want the houses and people don't want to be homeless, there'll have to be a meeting of minds somewhere in the middle.

There may be a case for assuming a bank or banks are nationalised that the government will turn into the country's biggest landlord.

Personally I think 100+% mortgages and 30+year mortgages going are no harm and should never have slipped by the financial regulator. People are just going to have to learn to do without and realise that without a roof over your head, your ipod, laptops, ps3 and wii fits aren't really that useful to you.

spockety

nhughes100 wrote: »

A commentator recently predicted that houses currently going for 800-900 K in Dublin are going to hit 200K ish, there's not a hope of this happening. No one can take that hit so they'll just stay put.

Just on this one. A lot of people are taking him up on this, but I think that he really was referring to a small number of extreme cases to highlight how bad it could be in some sectors.

I could easily see a house in somewhere like Dundrum/Stillorgan that someone has lived in for 40 years, no mortgage, hasn't been updated/renovated since 1982, and they die leaving it to their estate to sell off, going for 220k where at the height of the madness people would pay 800k for it and plough another 100k into doing it up. People aren't interested in fixer uppers any more at non-fixer upper prices.

ParkRunner

nhughes100 wrote: »

Look at what people want from a house- most people are going to want a 3 bed semi d, with 2 bathrooms(1 en-suite) and a front+back garden with easy parking for 2 cars. No management fees and reasonable access to amenities. That disqualifies most housing units(i hate that phrase) built in Dublin in the past 10 years.

I agree with this, which will probably lead to prices of half decent houses sticking to some extent in Dublin in my opinion. There are thousands upon thousands of empty unsold apartments out there and the demand is not really there for these, especially at current asking prices. A quick seach on daft for 3 bed + houses for sale in Dublin revealed 3,922 results. I know there are thousands more available for rent but as they aren't for sale the demand for houses can only be filled by those for sale.

Tom123

jetski wrote: »

Do yourself a favour and emigrate if thats the case.

Why should I? My family, my friends, my work, my home and my life are here.

I would love nothing more than for the economy to be thriving. But the country is in absolutely dreadful situation. This isn't where I want the country to be but this is where we are.
No amount of wishing it away or burying my head in the sand is going to change that.

I make my predictions based on what I think is going to happen looking at the facts as I see them and not as I'd like them to be.

Highsider

spockety wrote: »

Just on this one. A lot of people are taking him up on this, but I think that he really was referring to a small number of extreme cases to highlight how bad it could be in some sectors.

I could easily see a house in somewhere like Dundrum/Stillorgan that someone has lived in for 40 years, no mortgage, hasn't been updated/renovated since 1982, and they die leaving it to their estate to sell off, going for 220k where at the height of the madness people would pay 800k for it and plough another 100k into doing it up. People aren't interested in fixer uppers any more at non-fixer upper prices.

Dont agree with this at all. If anything these houses prices will be the least affected of all. If you live in the back arse of nowhere (Naas,Gorey,Clonee etc..) then you are going to feel the pinch in a huge way. Will stablised areas with good transport and amenities such as Dundrum,Rathfarnam and the like see a decrease in house prices? you bet they will but it will be nothing compared to the 60%+ house price drops in commuter belt zones.

jetski

Tom123 wrote: »

Why should I? My family, my friends, my work, my home and my life are here.

I would love nothing more than for the economy to be thriving. But the country is in absolutely dreadful situation. This isn't where I want the country to be but this is where we are.
No amount of wishing it away or burying my head in the sand is going to change that.

I make my predictions based on what I think is going to happen looking at the facts as I see them and not as I'd like them to be.

Well you have been commin out with some serious claims and not a shred of evidence.

you do know alot of this trouble is due to fear.