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Straight from horses mouth - Prices down 40%
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If estate agents and other (mis)leading economists comments are to be believed since the top of the market two years ago the housing market has seen more bottoms than a box of Pampers.
We are in a global economic depression and we will be lucky to see a bottom in Ireland by 2011 (that's still my prediction), it all depends now on what mistakes the government will make to compound the problem and extend the downturn.
In general house prices cannot stop falling until the following conditions are met:- Unemployment stops falling (every possibility to hit 18% by 2011)
- Oversupply in some areas is cleared up. (in some areas this will not happen)
- Taxes stop rising. (bank guarantees, pension bailouts and government spending programs are not free)
- Banks have sufficient capital to begin lending again. (billions to write off having bet a load on overpriced land)
- Wages stop falling. (less hours worked and surplus labour drive prices down)
Net Zero means we are paying for the destruction of our economy and society in pursuit of an unachievable and pointless policy.
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A lot of sensible comments in this thread.
The outlook is indeed grim and many estate agents have not been hit too hard yet as they have quite a lot cash stashed away after the boom years, so they are not in a hurry to tell their sellers to wake up and smell the sour coffee.
We want to buy and I have been following the market where I live and there are twice as many houses for sale this week as there were in May (now about 200). Asking prices have come down about 15% and the houses are simply not selling. In the estate where we rent, there are... 72 (yes seventy two) brand new houses that have been taken off the market. The asking price used to be €1.2M a pop. That is some money gathering dust up the hill...
From evidence that I gather from friends who are also in the market but on the selling side, a thumb rule of 40% under peak price is a good one for anybody who actually wants to sell/buy at the moment. When you do the maths, this actually makes sense in terms of yearly growth from 2000 prices.
The problem though is that even at that price, buyers (like me) are just concerned that they will have a job next year and be able to pay the mortgage. This anxiety is unlikely to go away fast, regardless of the price of houses... so buyers will be few.
Plus, if you had cash to invest today, you would be buying the UK, the £ is being hammered and soon with 0% interest rate, you cant beat that...
Plus, the EU is not going to hurry to rescue Ireland if it needs it... now that it voted no...
My view is that things will get worse and house prices will tumble, simply because few will be wanting to take risks and more will be needing to sell.
Overall, if you look at the way the global stock markets have been doing, we are on the same trajectory and at the same speed as the 1929 depression, already much worse that any other recession since then and the central banks and governments are running out of options to curb the fall. We hear "slump" but nobody wants to use the D word...
Oil producing countries have slashed the price of oil (imagine, from $150 to approaching $40) forecasting a drop in demand. Now that the refinery capacity (shortage of which caused the stratospheric rise) is in place, there will be much less to refine as the world slows down, companies shut down factories (will Obama manage to actually rescue GM?).
This does not make me any better though because like most, I am not sure I will have a job next year and I am still far from getting my own house (and my wife is going nuts...). Imagine buying now at a good price and having to sell next year for €100K less... That would be a bummer hey...0 -
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*Yawn* And we might get hit by an asteroid tomorrow.A lot of sensible comments in this thread.
The outlook is indeed grim and many estate agents have not been hit too hard yet as they have quite a lot cash stashed away after the boom years, so they are not in a hurry to tell their sellers to wake up and smell the sour coffee.
We want to buy and I have been following the market where I live and there are twice as many houses for sale this week as there were in May (now about 200). Asking prices have come down about 15% and the houses are simply not selling. In the estate where we rent, there are... 72 (yes seventy two) brand new houses that have been taken off the market. The asking price used to be €1.2M a pop. That is some money gathering dust up the hill...
From evidence that I gather from friends who are also in the market but on the selling side, a thumb rule of 40% under peak price is a good one for anybody who actually wants to sell/buy at the moment. When you do the maths, this actually makes sense in terms of yearly growth from 2000 prices.
The problem though is that even at that price, buyers (like me) are just concerned that they will have a job next year and be able to pay the mortgage. This anxiety is unlikely to go away fast, regardless of the price of houses... so buyers will be few.
Plus, if you had cash to invest today, you would be buying the UK, the £ is being hammered and soon with 0% interest rate, you cant beat that...
Plus, the EU is not going to hurry to rescue Ireland if it needs it... now that it voted no...
My view is that things will get worse and house prices will tumble, simply because few will be wanting to take risks and more will be needing to sell.
Overall, if you look at the way the global stock markets have been doing, we are on the same trajectory and at the same speed as the 1929 depression, already much worse that any other recession since then and the central banks and governments are running out of options to curb the fall. We hear "slump" but nobody wants to use the D word...
Oil producing countries have slashed the price of oil (imagine, from $150 to approaching $40) forecasting a drop in demand. Now that the refinery capacity (shortage of which caused the stratospheric rise) is in place, there will be much less to refine as the world slows down, companies shut down factories (will Obama manage to actually rescue GM?).
This does not make me any better though because like most, I am not sure I will have a job next year and I am still far from getting my own house (and my wife is going nuts...). Imagine buying now at a good price and having to sell next year for €100K less... That would be a bummer hey...
Are you renting? If so you're more likely to lose your home than if you had a mortgage.0 -
*Yawn* And we might get hit by an asteroid tomorrow.
So I presume by that you mean that you should never worry about tomorrow. I trust you live up to this care-free philosophy by not having any savings or insurance.Are you renting? If so you're more likely to lose your home than if you had a mortgage.
There's a glut of rental properties out there, at a fraction of the price of a mortgage. Even if worse comes to worst you are evicted, you will lose at most your deposit.
If you lose your mortgaged home, you will lose any deposit you paid on that house, plus any negative equity (the difference between the current price and the original price).
Your head-in-the-sand approach that the boom would never die, that everything is rose, that Ireland was a new paradigm with "sound" fundamentals, is the reason why there are now people who mortgaged themselves to the hilt (sometimes with not one but several properties) now writing the Joe Duffy show saying they wish they were dead.
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Your presumption is incorrect. What I mean is I'm tired of hearing people moan. We're in a recession, we all get it. Now can I get on with my life please? At some point everyone is going to have to just get on with things because very simply if we don't then we will never see the end of the recession. Some people will choose to sit it out and let other people do all the work. Thats fine. After all, they say a recession separates the men from the boys.So I presume by that you mean that you should never worry about tomorrow. I trust you live up to this care-free philosophy by not having any savings or insurance.
You will not lose your home just because you have lost your job. This is a misconception. Its extremely difficult for the banks to reposses a home. On the other hand, a landlord can and 99% of the time will evict you for missing your rent payments.If you lose your mortgaged home, you will lose any deposit you paid on that house, plus any negative equity (the difference between the current price and the original price).
To have your head in the sand is to sit around with your life on hold and do nothing but moan about the recession and your fears of losing your job. How is getting on with life putting my head in the sand?Your head-in-the-sand approach that the boom would never die0 -
Your presumption is incorrect. What I mean is I'm tired of hearing people moan. We're in a recession, we all get it. Now can I get on with my life please? At some point everyone is going to have to just get on with things because very simply if we don't then we will never see the end of the recession. Some people will choose to sit it out and let other people do all the work. Thats fine. After all, they say a recession separates the men from the boys.
One man's "moaning" seems to be another man's rational summing up of the current situation.
Funnily enough, I'm also big on individual responsibility. I, who didn't buy a house because I saw all this coming, is now expected to bail out both rich developers and idiots who over-mortgaged themselves.You will not lose your home just because you have lost your job. This is a misconception. Its extremely difficult for the banks to reposses a home.
During the third quarter of 2008 alone, 1,006 writs and summonses were issued in Northern Ireland alone. In 3 months of the year in the UK, there were 10,000. This isn't counting voluntary handovers. Do you consider Ireland to be different? Oh wait, yes, it's the new paradigm.On the other hand, a landlord can and 99% of the time will evict you for missing your rent payments.
And my point is that it is far easier to manage rent repayments than mortgage repayments.To have your head in the sand is to sit around with your life on hold and do nothing but moan about the recession and your fears of losing your job. How is getting on with life putting my head in the sand?
The first thing to do with dealing a problem is confronting the scale of it. Personally, I have 6 years' worth of rent stashed away.
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Your presumption is incorrect. What I mean is I'm tired of hearing people moan. We're in a recession, we all get it. Now can I get on with my life please? At some point everyone is going to have to just get on with things because very simply if we don't then we will never see the end of the recession. Some people will choose to sit it out and let other people do all the work. Thats fine. After all, they say a recession separates the men from the boys.
Who is moaning? I think its a good thing that house prices are falling. They have been at an unrealistic for to long. I bought in 2000 and my house almost tripled in value in 5 years. What good is that to me? Unless I took out another mortage(which i didnt thank god). The recession has shown all the so called men up. The banks, all these developers have been shown up for what they are, nothing more than a bunch of chancers.
All of us tax payers have bailed out these dead beats out. If you want to separate the men from the boys we should let the banks crash. Why should the tax payer prop them up?
We have bailed out the banks and no has fallen on there sword.0 -
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We're not the UK. So funnily enough yes I would consider us different. Mainly because we were not largely caught up in the sub prime fiasco. I know there was some dabbling in it (Start Mortgages for example) but it was small time.During the third quarter of 2008 alone, 1,006 writs and summonses were issued in Northern Ireland alone. In 3 months of the year in the UK, there were 10,000. This isn't counting voluntary handovers. Do you consider Ireland to be different? Oh wait, yes, it's the new paradigm.
I'll say it again, you will not lose your home if you lose your job. You might do if you were a sub prime borrower and lose your job. But the sub prime market is completely dead so I'm afraid that sort of talk falls under the doom story/scaremongering category...sorry to use the doom and gloom phrase but thats exactly what it is.0 -
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Your presumption is incorrect. What I mean is I'm tired of hearing people moan. We're in a recession, we all get it. Now can I get on with my life please? At some point everyone is going to have to just get on with things because very simply if we don't then we will never see the end of the recession. Some people will choose to sit it out and let other people do all the work. Thats fine. After all, they say a recession separates the men from the boys.
You will not lose your home just because you have lost your job. This is a misconception. Its extremely difficult for the banks to reposses a home. On the other hand, a landlord can and 99% of the time will evict you for missing your rent payments.
To have your head in the sand is to sit around with your life on hold and do nothing but moan about the recession and your fears of losing your job. How is getting on with life putting my head in the sand?
Yeah you tell them 20goto10.
I have never come across such a bunch of cynics as on this thread.
It is terrible to think we are forgetting how much the poor Estate Agents and their friends the developes have contributed to this country.
They have worked tirelessly helping to mould our nations' fine leaders and helped shape the landscape of this fine country.
20goto10 is right, it is unheard of for Irish financial institutions to reposess people's homes. It as ludricous as the possibility of say the world's largest banks running our of money.
Remember, a house is just not bricks and mortar, it is a home.
Maybe it is negative equity today, but you will look back in twenty years and see what a basement level price you paid for that apartment in Clonee.
Why can't people see the fact that signing up to a 40 year mortgage is not bad, it gives you a focal point in your life and you will have finished paying it off just as you reach your retirement.
Stop moaning everyone. Suck it in and help the government and their poor almost destitude friends, the developers.
Doesn't anybody here realise how hard it is to go back to driving after your helicopter has been reposessed.
Dear God have some consideration, especially at this festive charitable time.
All contributions are welcome but please we ask you to use brown wiggins teape envelopes as standard.I am not allowed discuss …
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We're not the UK. So funnily enough yes I would consider us different. Mainly because we were not largely caught up in the sub prime fiasco. I know there was some dabbling in it (Start Mortgages for example) but it was small time.
The UK sub-prime market is a mere 8 percent of mortgages (compared to 20 in the US). Start Mortgages here is responsible for only 40% of the 200 repossession orders per month coming before Irish courts.
You are Liz O'Kane, and I claim my five pounds.
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Eric318 is.
Just read his post. Doesnt look like moaning to me. Dont know why anyone who isnt a cheerleader for the property market is labled a moaner. The market is going down after rediculace gains. Time for investors to find somewhere else to put there money. And leave houses find there real value.0 -
Just read his post. Doesnt look like moaning to me. Dont know why anyone who isnt a cheerleader for the property market is labled a moaner.
Because it wasn't in the vested interests of either the government or of the media. Anyone who questioned the status quo was told by our previous Taoiseach to commit suicide.
Consider these facts:
* In 2006, direct property tax revenues amounted to 17% of total tax revenues. This could exceed 30% when the indirect impact on income tax and VAT was included.
* 60% of the Irish Times advertising revenue came from property. The business editor of the Sunday Tribune was sacked for pointing out the hypocrisy of a property agent who was talking up the market while unable to sell his own house.
* 1 in 5 of the private workforce depended directly on construction.
* The number of residential mortgages _doubled_ between 2003 and 2006_.
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Eric318 is.
He he, interestingly, I am quite upbeat actually because things are looking pretty good for me. So may be there is a language issue here, I will have to polish my second language skills further. I am sad for those who will suffer though.
My point is that things are bad, in fact very bad. Denial is one strategy and may actually be the best one as there is nothing much we can do at our level. It is not mine, I like to know.
I am not too sure about the argument that one might be worse off renting right now. It probably depends on your mortgage level compared to rent. One thing is mathematically clear though, is that if money is your sole concern, you are currently better off renting than buying. You can then put your money into another investment than your home and pocket interest. The way to calculate this is to work out the present value of a perpetual rent at the current interest savings rates: annual rent divided by savings rate: this is how much the house you rent is actually worth. The satisfaction of having your own home still comes at a huge premium.
But, hey its a free world...0 -
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Here is the chart of house prices in Ireland since 1996:
http://www.statusireland.com/statistics/property-house-price-statistics-for-ireland/3/Irish-House-Prices-Since-1996.html
The crash in the housing sector has only started. It will drop to about 50-60% of peak. It must in order for the country to get back in order. It will be a decade before some houses reach the value that they were bought at.0
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