The Property market has reached the bottom!

jmayo

smccarrick wrote: »

I'd go with Anglo Irish- its still the best rate around, and its not just government guaranteed, its government owned. NIB is all well and good- but keep in mind the Danish government are not in the Euro zone- and if there was a run on their banks (which is unlikely) foreign subsidiaries would likely be very low on their list of priorities.

If you are going to use that argument why not Rabobank since owned by Dutch who are in eurozone or why not Northern Rock owned by good old Gordon and co. Ok just for arguments sake the last one.
Do you think our government could guarantee all deposits if called in or do you think they would guarantee Anglo's first and tell the big two with most public exposure to get in line ?
I can imagine riots on the street in that scenario.

For some unknown reason I have more faith in Danske Bank than our Dept of Finance :rolleyes:

confuzed

i think the tread was about bottom.
my predictions- bottom is When all these empty shoeboxs/ matchboxs are be available on true auction. Imagine I am giving my car keys to dealer in exchange of an apartment key. There is no harm in dreaming:D

blast05

smccarrick wrote: »

I'd go with Anglo Irish- its still the best rate around, and its not just government guaranteed, its government owned. NIB is all well and good- but keep in mind the Danish government are not in the Euro zone- and if there was a run on their banks (which is unlikely) foreign subsidiaries would likely be very low on their list of priorities.

and if there was a run on their banks (which is unlikely)

Exactly, its unlikely .... and much more unlikely that the Irish government going bankrupt ..... and imho if the Irish government went bankrupt it would trigger foreign institutions to pull all money from Irish banks in the space of a few hours which would then trigger a run on the banks by people when we wake up to this news one morning.
I've moved half of the money i have to NIB and am leaving the rest in Irish Nationwide for the next 6 months.

cls

confuzed wrote: »

i think the tread was about bottom.
my predictions- bottom is When all these empty shoeboxs/ matchboxs are be available on true auction. Imagine I am giving my car keys to dealer in exchange of an apartment key. There is no harm in dreaming:D

You dream of living in a shoebox/matchbox?

Just because a shoebox hits rock bottom doesn't mean the ideallic 3 bed semi-d with a nice garden etc will be dragged down with it. If there are no FTBs buying then yes, everything gets dragged down. But what if there are plenty of FTBs buying but they're just not buying the shoebox in the "commuter" belt type properties (inverted commas because there is nothing commutable about them). Is it possible to have a healthy return to buying/selling but still leave cetain properties outside of this?

jackal

To the people that think apartment prices and 3 bed semi prices operate independently of one another, you are quite simply wrong.

The reason the market has died on its feet was that eventually property prices for modest properties - i.e. a 3 bed semi in a dublin suburb - reached MTV cribs prices. There are not enough people who earn enough to buy these houses as first time buyers now that the 8x earnings "ah shure go-on-go-on we will say you will be earning 20% more in a year and you will rent 2 rooms" type mortgages are gone.

There is no market for a 3 bed semi for 400k. How many people have this kind of money now that the banks are applying a bit of sense and lending a prudential multiple of earnings? How many people out there are earning 100k, are in a rock solid job and have 40k or so squirreled away? A few, but not enough to call it a market.

Who else could buy a 3 bed semi for 2006 prices?

Trader-uppers?

They will be outgrowing their apartments - which have plummeted in value. Please explain to me how they can bridge the gap between their apartment and the 3 bed semi? They cannot, therefore the market must come down to meet them, or to meet FTBs. Otherwise there is no buyers, and everyone will just stay put forever (as some people seem to think will happen).

So 20goto10, or anyone else who thinks this, please tell me.. who will make up the market for 3 bed semis at current prices, which you all seem to think are immune from serious price drops?

sneakyST

Interesting reading all the comments from would be buyers. I am on the other side of the coin and trying to sell my house as I am getting off craggy island. It’s a large 3 bed semi - and at 270k I think its a fair price - no viewings would say otherwise though. I have resigned myself to the fact that it will now be rented rather than sold.
Houses around my area are being dumped at way lower prices - obviously investors looking to get out - I'm in no rush and can afford to let it sit empty if I have to rather than let it go for half nothing. My opinion is that the market will hit the floor when all the fire sales end and people who are selling to trade up or move like me realise that they just won’t drop the price any lower. I know what "my floor" is and when it goes beyond that I won’t sell. I've a long way to go before I hit negative equity as i bought in 2001.
So my question is to those who are licking their lips at bargain bucket houses....what happens when people cant afford to sell and there are no houses for sale, as a lot of ordinary folk bought ordinary houses at high prices?
Its an interesting situation to say the least

ntlbell

sneakyST wrote: »

So my question is to those who are licking their lips at bargain bucket houses....what happens when people cant afford to sell and there are no houses for sale, as a lot of ordinary folk bought ordinary houses at high prices?
Its an interesting situation to say the least

What makes you think the above is ever going to happen?

can you explain the thinking behind it?

What does can't afford to sell mean?

I would of thoguht the main problem will be they can't afford to keep it, rent won't cover it?

can understand not being able to afford to keep a house but not being able to afford to sell doesn't make much sense to me

The_Conductor

Personally I think its more the case that it hasn't sunk in that 100% mortgages are a thing of the past- and people have to save a minimum of 40k to even be considered for a mortgage. This is a new departure- and most people under the age of 30 have never in their lives saved this sort of money before.

I think that the idea that firesales will eventually finish and the market rise to meet a renewed demand- is misplaced, as totally aside from the appalling market sentiment- people simply do not have access to finance in the way they did previously.

So my question is to those who are licking their lips at bargain bucket houses....what happens when people cant afford to sell and there are no houses for sale, as a lot of ordinary folk bought ordinary houses at high prices?
Its an interesting situation to say the least

Far more people bought apartments at high prices with the intention of trading up down the road, and are now in negative equity with unsaleable property- than there are ordinary folk out there in the market for ordinary houses....... Developers have built hundreds of thousands of units for the FTB market- tens of thousands of which remain vacant. This glut will take several years to unwind, and eventually many of them will have to be demolished.

People can't afford to sell, and at the same time they can't afford to not sell..... There is no such thing as a property you cannot sell- if you lower the price sufficiently- it will move, even in the most intransient market. In 2001 the OECD published a report which considered the Irish property market over-valued by just under 30%. This was in 2001. Its wishful thinking that prices will not fall below their 2001 levels- it may be considered by many as far fetched, but it is in fact far from unrealistic.

If there is a ready rental market where your house is- I would set a reasonable rent, and get as good tenants as I possibly could- focusing on long term occupancy, rather than short term gain. It makes more sense than anything else at the moment........

sneakyST

ntlbell wrote: »

What makes you think the above is ever going to happen?

can you explain the thinking behind it?

I cant- its just my frame of mind - I am a seller and if push comes to shove I wont sell it for less than I paid. If I was still in the country I would therefore be still in the same house with no intention of moving. So I wonder what all those people who are in negative equity are thinking - will they ever get into the black again - they may have to stay put - therefore less houses. What effect would that have? Prices may gain but Im sure they wont gain as much as they have fallen, still leaving a lot of people in negative equity.

smccarrick wrote: »

If there is a ready rental market where your house is- I would set a reasonable rent, and get as good tenants as I possibly could- focusing on long term occupancy, rather than short term gain. It makes more sense than anything else at the moment........

Agree with your post and thats my thinking - I can undercut any rental price in my area (and there is a market) and still have plenty of wiggle room in the eventual interest rate rise scenario

techdiver

sneakyST wrote: »

I cant- its just my frame of mind - I am a seller and if push comes to shove I wont sell it for less than I paid. If I was still in the country I would therefore be still in the same house with no intention of moving. So I wonder what all those people who are in negative equity are thinking - will they ever get into the black again - they may have to stay put - therefore less houses. What effect would that have? Prices may gain but Im sure they wont gain as much as they have fallen, still leaving a lot of people in negative equity.

There is an oversupply of new (empty) houses so I don't envisage a shortage for many years to come.

20goto10

ntlbell wrote: »

What makes you think the above is ever going to happen?

can you explain the thinking behind it?

What does can't afford to sell mean?

I would of thoguht the main problem will be they can't afford to keep it, rent won't cover it?

can understand not being able to afford to keep a house but not being able to afford to sell doesn't make much sense to me

This is where people on here, the FTBs with a vested interest, fail to understand. House A will not fall in price indefinitely until you can afford it. This talk of holding off and getting the same house for cheaper is nonsense. Vendors can drop their prices to a certain degree, until it hits the point where its not worth selling. There will be unfortunate ones who have to sell. But its not something that can be generalised and applied to everyone. Most will try their best, drop the price as much as they can or as much as they feel comfortable with and then give up and either stay put or rent it out. And with rates where they are now renting will cover the mortgage outright for a lot of people. So whats not to get here? Saying you cannot afford to sell makes perfect sense. Not the best use of the English language but it makes sense.

Gurgle

smccarrick wrote: »

people have to save a minimum of 40k to even be considered for a mortgage...

Something wrong with your numbers there:

€40k would be an 8% deposit on a €450k house (92% was standard long before the boom).

At the peak the average house price was €330k.

Knock the average down 15% to €280k, and an 8% deposit means you have to save ~€22k.

techdiver

Gurgle wrote: »

Something wrong with your numbers there:

€40k would be an 8% deposit on a €450k house (92% was standard long before the boom).

At the peak the average house price was €330k.

Knock the average down 15% to €280k, and an 8% deposit means you have to save ~€22k.

92% is the absolute maximum you will get for a mortgage and BOI and AIB seem to be the only ones offering such rates, others are only offering 90% and even as low as 80% - 75%.

ntlbell

20goto10 wrote: »

This is where people on here, the FTBs with a vested interest, fail to understand. House A will not fall in price indefinitely until you can afford it. This talk of holding off and getting the same house for cheaper is nonsense. Vendors can drop their prices to a certain degree, until it hits the point where its not worth selling. There will be unfortunate ones who have to sell. But its not something that can be generalised and applied to everyone. Most will try their best, drop the price as much as they can or as much as they feel comfortable with and then give up and either stay put or rent it out. And with rates where they are now renting will cover the mortgage outright for a lot of people. So whats not to get here? Saying you cannot afford to sell makes perfect sense. Not the best use of the English language but it makes sense.

I'm not an FTB, I'm a home owner.

I never said they will fall indeifinitley I just want the poster to explain his statement or at least the thinking behind it and on what evidence he's making it on.

the rental market is absolutely flooded and there is landlords that have a lot of leverage to drop that maybe someone who's bought in the last few years can't keep up with

then what?

and all the empities?

etc etc

The_Conductor

Gurgle wrote: »

Something wrong with your numbers there:

€40k would be an 8% deposit on a €450k house (92% was standard long before the boom).

At the peak the average house price was €330k.

Knock the average down 15% to €280k, and an 8% deposit means you have to save ~€22k.

The norm is now an 80% mortgage though- not a 92% mortgage- and there are stricter lending multiples- meaning a mortgage of ~200k is far more probable for someone on the average industrial wage- than higher. 20% of 200k being 40k.......

Its academic at the moment- getting money from anywhere is like getting blood from a stone......

S.

ntlbell

sneakyST wrote: »

I cant- its just my frame of mind - I am a seller and if push comes to shove I wont sell it for less than I paid. If I was still in the country I would therefore be still in the same house with no intention of moving. So I wonder what all those people who are in negative equity are thinking - will they ever get into the black again - they may have to stay put - therefore less houses. What effect would that have? Prices may gain but Im sure they wont gain as much as they have fallen, still leaving a lot of people in negative equity.

what about all the people losing their jobs that can't keep up with the payments?

what about the people that can't get someone to rent to cover it as the rental market is flooded etc?

it just doesn't add up i'm afraid

at the height of the boom i think we were doing 60k houses a year

how many years supply are sitting idle?

El Stuntman

ntlbell wrote: »

at the height of the boom i think we were doing 60k houses a year

how many years supply are sitting idle?

actually it was something close to 90k houses in 2006

the Central Bank today forecasted 12,000 completions in 2010, the most frequently quoted estimate of empties is 350,000 so that's twenty :eek: year's supply

a long way to go to bottom yet I'm afraid

sneakyST

ntlbell wrote: »

I'm not an FTB, I'm a home owner.

I just want the poster to explain his statement or at least the thinking behind it and on what evidence he's making it on.

I know where you are coming from ntlbell-
I've no evidence - its just my take on it. For example, the banks are being bailed out by the government - who really are bailing out some of the builders to an extent. Those builders who surivive will only drop their vacant house prices so much. The've just relaunched a house phase in my area and the 3 bed houses are just a little dearer than mine. Like I say it just my perception

mathie

jackal wrote: »

To the people that think apartment prices and 3 bed semi prices operate independently of one another, you are quite simply wrong.

The reason the market has died on its feet was that eventually property prices for modest properties - i.e. a 3 bed semi in a dublin suburb - reached MTV cribs prices. There are not enough people who earn enough to buy these houses as first time buyers now that the 8x earnings "ah shure go-on-go-on we will say you will be earning 20% more in a year and you will rent 2 rooms" type mortgages are gone.

There is no market for a 3 bed semi for 400k. How many people have this kind of money now that the banks are applying a bit of sense and lending a prudential multiple of earnings? How many people out there are earning 100k, are in a rock solid job and have 40k or so squirreled away? A few, but not enough to call it a market.

Who else could buy a 3 bed semi for 2006 prices?

Trader-uppers?

They will be outgrowing their apartments - which have plummeted in value. Please explain to me how they can bridge the gap between their apartment and the 3 bed semi? They cannot, therefore the market must come down to meet them, or to meet FTBs. Otherwise there is no buyers, and everyone will just stay put forever (as some people seem to think will happen).

So 20goto10, or anyone else who thinks this, please tell me.. who will make up the market for 3 bed semis at current prices, which you all seem to think are immune from serious price drops?

FTBs FTW?

ntlbell

El Stuntman wrote: »

actually it was something close to 90k houses in 2006

the Central Bank today forecasted 12,000 completions in 2010, the most frequently quoted estimate of empties is 350,000 so that's twenty :eek: year's supply

a long way to go to bottom yet I'm afraid

I stand corrected

twenty years supply, not much hope of running out anytime soon then.

El Stuntman

sneakyST wrote: »

I know where you are coming from ntlbell-
I've no evidence - its just my take on it. For example, the banks are being bailed out by the government - who really are bailing out some of the builders to an extent. Those builders who surivive will only drop their vacant house prices so much. The've just relaunched a house phase in my area and the 3 bed houses are just a little dearer than mine. Like I say it just my perception

your perception is flawed though (i.e. "people will not drop their prices below what they paid"); market clearing prices are set at the margins and some (obviously not all) sellers will be forced to sell at whatever price they can get, in some cases this will be far below what they paid.

thus, you (under no particular financial pressure) may happily sit in your gaff priced at, say 300k, and smugly refuse to drop your price but the guy down the road who has been laid off and is being squeezed by the banks will price his for sale at 250k and in reality will have to accept far lower - as he has no choice in this matter. That lower price then becomes the market clearing price and, if you ever want to sell, you will have to match that price or else sit literally for decades waiting for prices to recover.

El Stuntman

ntlbell wrote: »

I stand corrected

twenty years supply, not much hope of running out anytime soon then.

lol, no

want to buy a Bulgarian apartment? I'll give it to you in exchange for an Irish Open ticket and a packet of jelly beans

dblennon

20goto10 wrote: »

This is where people on here, the FTBs with a vested interest, fail to understand. House A will not fall in price indefinitely until you can afford it. This talk of holding off and getting the same house for cheaper is nonsense. Vendors can drop their prices to a certain degree, until it hits the point where its not worth selling. There will be unfortunate ones who have to sell. But its not something that can be generalised and applied to everyone. Most will try their best, drop the price as much as they can or as much as they feel comfortable with and then give up and either stay put or rent it out. And with rates where they are now renting will cover the mortgage outright for a lot of people. So whats not to get here? Saying you cannot afford to sell makes perfect sense. Not the best use of the English language but it makes sense.

Thats just untrue why do you think banks in ireland are having to get so much cash from the state it's because developers are going under the can't service the debt and they will go bankrupt because people just aren't buying why would you there is no certainty...

even at the most basic level, a rational person will not purchase something if the chances are it will be cheaper in the future.

the banks have factored in some serious write offs already and there will come a point where these properties will just go to auction, then you will see the bottom.

This includes the 200,000 people that have been made unemployed so lets say 50,000 home owners are currently at severe risk of losing the homes. (after the current gov. imposed stay of execution) these house will also go to auction as the bank will write off the loss.

gurramok

20goto10 wrote: »

This is where people on here, the FTBs with a vested interest, fail to understand. House A will not fall in price indefinitely until you can afford it. This talk of holding off and getting the same house for cheaper is nonsense. Vendors can drop their prices to a certain degree, until it hits the point where its not worth selling. There will be unfortunate ones who have to sell. But its not something that can be generalised and applied to everyone. Most will try their best, drop the price as much as they can or as much as they feel comfortable with and then give up and either stay put or rent it out. And with rates where they are now renting will cover the mortgage outright for a lot of people. So whats not to get here? Saying you cannot afford to sell makes perfect sense. Not the best use of the English language but it makes sense.

You're forgetting something. The market will force a price on the house.

A buyer in 2001 like the poster does not want to sell it. All it takes is a neighbour who has to sell or just doesnt give a fiddlers what he/she gets as long as it sells and then you will have a price(valued) for that type of house.

The other scenario is that the seller will be waiting many many long years for the price they want and they do not want that either do they?

ntlbell

El Stuntman wrote: »

lol, no

want to buy a Bulgarian apartment? I'll give it to you in exchange for an Irish Open ticket and a packet of jelly beans

I could buy a block at that inflated evaluation

El Stuntman

ntlbell wrote: »

I could buy a block at that inflated evaluation

ok, pay me into a satellite so

sheesh, you drive a hard bargain

ntlbell

El Stuntman wrote: »

ok, pay me into a satellite so

sheesh, you drive a hard bargain

Blind Omaha 1 go it's probably the last one.

final offer

El Stuntman

ntlbell wrote: »

Blind Omaha 1 go it's probably the last one.

final offer

I have a skill advantage in that game :pac:

ok, will stop derailing this thread - apologies :cool:

sneakyST

El Stuntman wrote: »

thus, you (under no particular financial pressure) may happily sit in your gaff priced at, say 300k, and smugly refuse to drop your price

I agree some will just have to sell - but I never said I wouldnt drop the price - I said I wouldnt sell for less than I paid

gurramok wrote: »

A buyer in 2001 like the poster does not want to sell it. All it takes is a neighbour who has to sell or just doesnt give a fiddlers what he/she gets as long as it sells and then you will have a price(valued) for that type of house.

The other scenario is that the seller will be waiting many many long years for the price they want and they do not want that either do they?

Houses are being dumped in the area - but I am prepared to wait many years as if nothing else - when the mortgage is clear - I will have a pension when i retire in 40 years time........

El Stuntman

sneakyST wrote: »

Houses are being dumped in the area - but I am prepared to wait many years as if nothing else - when the mortgage is clear - I will have a pension when i retire in 40 years time........

what sort of return would you get on other asset classes over the same time period?

property is not the only game in town