The Property market has reached the bottom!

The_Conductor

Gurgle wrote: »

I don't suppose you link to any evidence of this?

Birthrates are cyclical.
The ESRI are now predicting a net fall in the population to 3.8 million by 2015, with a simultaneous increase in birthrates to a 45 year high (this trend first became apparent roughly 3 years ago- and is accelerating). This prediction could be interpreted as a prediction of mass migration of mobile working age people- who coincidentally, are in the main, the first-time-buyer market.......?
So- allowing for all of this- we should have a spurt in demand- in around 15-20 years time (assuming kids can be gotten out of the mindset of living with Mammy and Daddy.........)

harsea8

It may have been said before, but you can't treat the property market as a homogeneous entity....some sectors (eg, detached homes in good locations) will see less of a drop than others (eg, apartments in the middle of nowhere). Over the next 5-10 years, I'd almost expect a two-tier market to develop with well-built, well-located property representing one market and all the poorly-located, semi-completed estates and poorly-located apartments representing a completely separate market. Your likely to see recovery in the former market, way before the latter IMO.

harsea8

harsea8 wrote: »

It may have been said before, but you can't treat the property market as a homogeneous entity....some sectors (eg, detached homes in good locations) will see less of a drop than others (eg, apartments in the middle of nowhere). Over the next 5-10 years, I'd almost expect a two-tier market to develop with well-built, well-located property representing one market and all the poorly-located, semi-completed estates and poorly-located apartments representing a completely separate market. Your likely to see recovery in the former market, way before the latter IMO.

It's always been that way, "Location, Location, Location" has always been one of the first things that buyers look at!

What has happened is that many buyers have been priced out of their preferred locations and "rippled out" to areas that were within their price range but most definately not their preferred location.

Prices of small high density housing (shoeboxes)in these areas will (and have) tank and be the last to recover (if ever).

The_Conductor

Aka- a new form of economic/social ghetto'isation based on income and affordability. A whole new Tallaght concept- which failed in its initial incarceration, and has only become viable, when businesses and employment opportunities were encouraged in the immediate vicinity. People are not going to be satisfied to drive to Dublin city centre from Wexford/Athlone/Dundalk indefinitely- yet, many of the newer developments in those locations were sold as being within commuting distance of Dublin (albeit it- a 3-4 hour commute on a daily basis........)

The social effects of our housing boom- may take decades to resolve- irrespective of what happens to house prices down the road........

gurramok

Gurgle wrote: »

I don't suppose you link to any evidence of this?

Thats quite an easy one Gurgle, surprised you didn't know.
http://www.cso.ie/statistics/bthsdthsmarriages.htm

To get the same numbers now of 25yr+ olds again in the future, you will have to wait until about 2032.
Only way to alter that is through immigration and we know from CSO stats that most immigrants don't buy, they rent(http://www.cso.ie/census/..%5Ccensus%5Cdocuments%5CNON%20IRISH%20NATONALS%20LIVING%20IN%20IRELAND.pdf) and then you have to contend with them returning home!

Kipperhell

gurramok wrote: »

Thats quite an easy one Gurgle, surprised you didn't know.
http://www.cso.ie/statistics/bthsdthsmarriages.htm

To get the same numbers now of 25yr+ olds again in the future, you will have to wait until about 2032.
Only way to alter that is through immigration and we know from CSO stats that most immigrants don't buy, they rent(http://www.cso.ie/census/..%5Ccensus%5Cdocuments%5CNON%20IRISH%20NATONALS%20LIVING%20IN%20IRELAND.pdf) and then you have to contend with them returning home!

But now is after the peak so why do we need the 25 year olds to be the same number as now? It would be the figures from 10 years ago. Things have a gradual rise. I feel your view is concentrated on property in isolation is all I was pointing out.

There is nothing to say they will buy as the property could remain with the people who have it now. People who bear property through the hard times making profit off the good times. Home ownerships could change with renting being more popular.

The WHOLE market might change

daltonr

Wowser. Just Wow.
17 pages on house prices, that quickly.

This story still has some legs.

Nice to see the regular characters still showing up:

Rent Is Dead Money
It's My Pension
It's your patriotic duty
We can think our way out of trouble.

I put us at FEAR on the cycle, but I might have to rethink that and edge us back to denial.

-Rd

www.IrishHomeTruths.com

mrgaa1

you see this Fear/Denial cycle - what a load of RUBBISH!!!!!!!!!!!!!!! This is not an ordinary recession and therefore these fine and dandy graphs are useless. Its easy to say we're here, we're there etc... truth be told no-one really knows where we are in this type of recession cycle. We are probably going to technically come out of it early this year but it will be very,very slow and until the government gets public spending under control we'll be there for quite sometime.
BTW when NAMA is in place house prices will level out and then when government or other institutions put another few 5/6billion into each of the banks to re-capitalise them maybe, just maybe lending will resume. It would be cheaper for the government to buy 50-60% of all built houses than go the NAMA way. Social housing sorted out, market levels out and normal banking may resume. But listen common sense doesn't seem to prevail up there in Dublin.

oceanclub

mrgaa1 wrote: »

truth be told no-one really knows where we are in this type of recession cycle

[...]

BTW when NAMA is in place house prices will level out

So no-one knows, except you?

Liz O'Kane announced today she's retraining to become a tennis coach - perhaps you could join her?

P.

Diarmuid

mrgaa1 wrote: »

This is not an ordinary recession and therefore these fine and dandy graphs are useless.

I don't know whether to laugh or cry.

oceanclub

Diarmuid wrote: »

I don't know whether to laugh or cry.

mrgaa1, writing 18 months ago:



http://www.boards.ie/vbulletin/showpost.php?p=56954079&postcount=81

Irelands economy is in good shape
house prices are now realistic
Now is the time to buy
DOOM & GLOOM merchants should not be allowed to run the country
Banks are lending money

Comedy gold.

P.

The_Conductor

mrgaa1 wrote: »

you see this Fear/Denial cycle - what a load of RUBBISH!!!!!!!!!!!!!!! This is not an ordinary recession and therefore these fine and dandy graphs are useless. Its easy to say we're here, we're there etc... truth be told no-one really knows where we are in this type of recession cycle. We are probably going to technically come out of it early this year but it will be very,very slow and until the government gets public spending under control we'll be there for quite sometime.
BTW when NAMA is in place house prices will level out and then when government or other institutions put another few 5/6billion into each of the banks to re-capitalise them maybe, just maybe lending will resume. It would be cheaper for the government to buy 50-60% of all built houses than go the NAMA way. Social housing sorted out, market levels out and normal banking may resume. But listen common sense doesn't seem to prevail up there in Dublin.

Technically we exited recession in Q4 2009- according to Department of Finance figures to be released later this week (the tax returns are also thankfully better than forecast at budget time- though still grim).

How do you reckon that NAMA will have any impact whatsoever on house prices? Its actually going to percipitate a further necessary recapitalisation of our major banks- as the current market values of the assets being transferred are considerably less than the banks had initially indicated. While they may get rid of toxicity off their balance sheets- their tier 1 capital ratios will be so badly impaired that they will need a further injection of possibly 16-18 billion between them. AIB are getting nobbled worse than BOI on this- their markdown is forecast to be as much as 12% higher than BOIs- and then we have our banking nasty Anglo Irish in the corner- who are worse than everyone else combined......... Its very probable that if there is any delay in injecting many billions more into the Irish banking system, once the NAMA assets are transferred- that borrowing will grind to a halt altogether (forget about the borrowing slowdown at the moment- this will be a total halt). In the past 2-3 years- the ECB has acted as a lender of last resort to the banks, they are now withdrawing this facility (the amount o/s to the Irish banking sector is now 34 billion, and falling). The intention was that international investors would step in and prop up the system- this now seems to be wholly misplaced optimism on the parts of politicians and bankers however.

Were the goverment to buy 50-60% of the vacant property for social housing- it would entail purchasing 60-70,000 units- probably at a cost of around 10-11 billion (assuming an average cost of around 150k, which is probably optimistic). It would also entail costs of another 14-16 billion to bring these up to standard, and install the necessary infrastructure to support these units. Thats a cost of around 25 billion- for a hell of a lot of shoebox appartments- many of which are scattered in totally random locations around the country that people do not wish to live in. You could go down the road of saying right- we'll build the 60,000 units in Adamstown- its on a trainline and close to the major Dublin conurbation- but then all you'll have done is created a whole new Tallaght- without any of the facilities or amenities that Tallaght has developed over the years......... Its not something that would work........

If you really think that the government can simply throw money at the banks, at vacant property, at social housing- and normal life will miraculously resume for everyone- you are delusional. We have enough trouble raising sovereign debt as is (our spread from the EU average is only topped by Greece- who are 1 rating agency from being graded junk)- and you're proposing to borrow as much as another 30-40 billion (who knows) with a stated aim of getting the banks lending again.

Our population *fell* by 68,000 in 2009. Our number of vacant properties rose- despite the state of paralysis in the construction industry. We have build hundreds of thousands of totally unsuitable properties throughout the country- but notably in remote rural locations for tax purposes. People do not want shoeboxes- they want their semi-d with a garden for the kids and local facilities and amenities. You can go and create as many social housing ghettos as you like- this simple fact is not going to change.

Normalisation for the Irish property market- would be a return to lending multiples of 2-3 times a single salary, and no expectation of dual-income households supporting irrational borrowings. Terms of loans- would return to 20-25 years (from 40!!! :eek:), and people would no longer view their home, as anything other than their home.......

We Irish have always had a fascination with property- but our boom and burst almost puts the Dutch tulip bubble to shame..........

Massive Muscles

oceanclub wrote: »

mrgaa1, writing 18 months ago:



http://www.boards.ie/vbulletin/showpost.php?p=56954079&postcount=81



Comedy gold.

P.

hahahha, Man seriously I would leave boards for good with that one mrgaa.

I do often go back on threads here from 06 and 07 just for a good laugh and a side order at schadenfreude when I think of what happens some of those snappy and arrogant posters who just loved to talk down to renters and the poor unfortunates that just didn't get it.

bobbiw

Massive Muscles wrote: »

hahahha, Man seriously I would leave boards for good with that one mrgaa.

I do often go back on threads here from 06 and 07 just for a good laugh and a side order at schadenfreude when I think of what happens some of those snappy and arrogant posters who just loved to talk down to renters and the poor unfortunates that just didn't get it.

Property will continue to fall for a while. It was crazy anyway there is no way a house in dollymount should be the same as one in malibu.

Buying is now a lot more expensive than renting and renting is safer. I laugh at the estate agent adds that still say

"would suit a shrewd investor of FTB looking to get on the property ladder"

Given the countries blame culture and that the public sector are not willing to help balance the budget its going to be a mess for some time.

hinault

Property prices have still some way to fall.
Unfortunately.

bobbiw

hinault wrote: »

Property prices have still some way to fall.
Unfortunately.

Its not so much that they have to fall because they were overpriced, its because of a bad economic outlook.

Ireland is in a worse position than bigger countries because there are fewer ways to stimulate the economy.

In the US if there is 10% unemployment there is still 350 million people in work, in Ireland its more like 3.5 million.

There is also massive oversupply I cant see how things can change in such a way as to change that.

It would require massive investment into Ireland from Europe and the US to create 0% unemployment and another boom.

Thats very unlikely as eastern europe is likely to be what Ireland was in the 90s and only when the US recovers.

Do we really think that someone is going to swoop in and buy all the empty apartments. Rents are falling which means there are fewer renters.

But it was like that before and I am sure the country will pull through but it will be a different place and there will be less exuberance.

daltonr

Mrgaa, I really don't know how to break this to you.
You've swallowed the Fianna Fail Blue Pill.

From my point of view it doesn't matter a damn whether you get it or not, the world will keep spinning and nothing much will change if you stick to your guns.

But...for your own sake, stop taking pronouncements from politicians, estate agents, economists and the like at face value. How many times do they have to be completely wrong before you'll start questioning their collective "wisdom".

Think for a second about the hundreds of thousands who accepted the wisdom of the Catholic Church for so many years. It's some sort of blessing that so many of them passed on before seeing their beliefs shattered utterly.

You're unfortunate in that you're part of the unlucky generation that must actually live to see things that you believe about this Republic and it's economy crumble. It's not pretty, I know that.

This is a perfectly normal recession. A tragically inevitable disaster. The only way it differs from others is that it's much much worse than the recessions many countries experience. It is perhaps a borderline Depression.

What this means is that any notions that the state can simply throw a few billion at the banks and get them lending again is bunk. Any notion that getting the banks lending would fix the problem is bunk.

You can't dig your way out of a hole and you can't borrow your way out of debt.

If getting lending going was the goal the government could simply lend directly to businesses and consumers and let the banks go to hell. Have you wondered why they haven't done this? Clue: Because it wouldn't solve anything.

Propping up the banks is a delaying tactic while they hope for a miracle. That's the sum total of the government's plan.

The property industry is NEVER coming back in anything like the form it previously existed. Those jobs...are gone........FOREVER.

I'm not trying to talk down in any way here, I know that's probably how this comes across. I genuinely mean all of the above in the the most friendly way I can muster.

Also, I'm not negative about the Irish economy. This bust is a chance to fix fundamental problems that have built up over years. Let's not squander the bust like we squandered the boom.

-Rd
www.IrishHomeTruths.com

hinault

bobbiw wrote: »

Its not so much that they have to fall because they were overpriced, its because of a bad economic outlook.

Ireland is in a worse position than bigger countries because there are fewer ways to stimulate the economy.

In the US if there is 10% unemployment there is still 350 million people in work, in Ireland its more like 3.5 million.

There is also massive oversupply I cant see how things can change in such a way as to change that.

It would require massive investment into Ireland from Europe and the US to create 0% unemployment and another boom.

Thats very unlikely as eastern europe is likely to be what Ireland was in the 90s and only when the US recovers.

Do we really think that someone is going to swoop in and buy all the empty apartments. Rents are falling which means there are fewer renters.

But it was like that before and I am sure the country will pull through but it will be a different place and there will be less exuberance.

I agree with your analysis.

I don't want to talk the country down - but we are facing a very very serious readjustment in terms of property prices, jobs and the general economic outlook.

And we must be realistic about the short to medium term future, of this nation.

Although the situation is serious, we need to be confident that we have the brains and the strategy to get ourselves out of this entire mess.

Senna

bobbiw wrote: »

Its not so much that they have to fall because they were overpriced, its because of a bad economic outlook.

They were overpriced and still are, the economy was built on property deals nothing else. We didn't have a Celtic Tiger or boom, we had an asset bubble, nothing else. I though we were past this by now?

daltonr

I find it quite depressing that people equate getting property prices rising with recovery.

The collapse of property prices IS THE RECOVERY.
The bubble was the problem, not the solution.

The bottom, when it happens will be identified AFTER the fact. It might have already happened, it might be this year, it might not be for 5 years or more.

It will be no more predictable than the peak, and it's baffling that people who thought there would be no peak are the ones most facinated with spotting the bottom.

Anyone hankering for the bottom should also remember that just because we hit bottom doesn't mean we'll start climbing again. Economies can go sideways for years.

Ask yourself what will actually create jobs and wealth in the future.
It won't be property. So why the facination?

If people spent less time looking for bottoms and more time looking for real opportunities, this country might have a hope. If nothing changes we'll go sideways for a decade or two wondering why house prices aren't rising or falling. Listening to bull from people like Austin Hughes constantly predicting an upturn any day now.

-Rd
www.IrishHomeTruths.com

bobbiw

daltonr wrote: »

I find it quite depressing that people equate getting property prices rising with recovery.

The collapse of property prices IS THE RECOVERY.
The bubble was the problem, not the solution.

The bottom, when it happens will be identified AFTER the fact. It might have already happened, it might be this year, it might not be for 5 years or more.

It will be no more predictable than the peak, and it's baffling that people who thought there would be no peak are the ones most facinated with spotting the bottom.

Anyone hankering for the bottom should also remember that just because we hit bottom doesn't mean we'll start climbing again. Economies can go sideways for years.

Ask yourself what will actually create jobs and wealth in the future.
It won't be property. So why the facination?

If people spent less time looking for bottoms and more time looking for real opportunities, this country might have a hope. If nothing changes we'll go sideways for a decade or two wondering why house prices aren't rising or falling. Listening to bull from people like Austin Hughes constantly predicting an upturn any day now.

-Rd
www.IrishHomeTruths.com

Very true its unlikely that property prices in ireland will go up for at least a decade.

The country is in an absolute mess, crazy that the goverment didnt see this happening.

spockety

hinault wrote: »

Property prices have still some way to fall.
Unfortunately.

I presume you mean "fortunately" there?

Affordable shelter is key to a competitive economy. It will benefit us all, even those who have already bought.

AARRRGH

I'm pretty sure mrgaa1 is an estate agent who doesn't really believe the things he's saying.

bangersandmash

Funny that the estate agency PR piece today got more coverage in the press than the Bloomberg News survey.

Irish house prices may fall for a fourth year in 2010 as the deepest recession in the country’s modern history persists, a survey of economists shows. Home prices will shrink 9 percent, according to the median of six estimates in a Bloomberg News survey.

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aEqej6DFPzu8

http://www.irishtimes.com/newspaper/breaking/2010/0105/breaking33.htm

danielq1007

I don't know everyone. I think the fact that you buy a house to live in for the next maybe 50 years does it really matter if you wait another 12 months to save 5 or 10%. I think if you see the house you like just buy it. In alot of places houses are for sale at their construction cost and its hard to see things falling lower than that.

hinault

spockety wrote: »

I presume you mean "fortunately" there?

Affordable shelter is key to a competitive economy. It will benefit us all, even those who have already bought.

It is unfortunate for those who bought houses at the top of the madness : they're saddled with huge mortages and depreciating prices.

Ultimately it is good that prices are falling - I take your point.

oceanclub

danielq1007 wrote: »

I don't know everyone. I think the fact that you buy a house to live in for the next maybe 50 years does it really matter if you wait another 12 months to save 5 or 10%.

The average house price is around €250K. You wouldn't wait 12 months to save €25 - a year's annual salary after tax?

I think if you see the house you like just buy it. In alot of places houses are for sale at their construction cost and its hard to see things falling lower than that.

I wish I had a cent for every person who's said that in the last 3 years.

P.

AARRRGH

oceanclub wrote: »

The average house price is around €250K. You wouldn't wait 12 months to save €25 - a year's annual salary after tax?

When you add the interest onto the 25k, you're talking at least 50k.

So you can earn 50k in one year by doing nothing.

Yes please.

Freddie59

danielq1007 wrote: »

I don't know everyone. I think the fact that you buy a house to live in for the next maybe 50 years does it really matter if you wait another 12 months to save 5 or 10%. I think if you see the house you like just buy it. In alot of places houses are for sale at their construction cost and its hard to see things falling lower than that.

Eh, no actually. 5 or 10%?:eek: There's a house for sale in an area of Waterford where it would have sought over €225k this time last year. It's now on at €142k. I think that's a far cry from 5 or 10%. Later in the year that will probably break the €100k mark. And not before time. Even if someone saves 10% on a €200k home, that's €20k over the life of the mortgage. Stick interest on, and I think you'll find it DOES matter.

hinault

Freddie59 wrote: »

Eh, no actually. 5 or 10%?:eek: There's a house for sale in an area of Waterford where it would have sought over €225k this time last year. It's now on at €142k. I think that's a far cry from 5 or 10%. Later in the year that will probably break the €100k mark. And not before time. Even if someone saves 10% on a €200k home, that's €20k over the life of the mortgage. Stick interest on, and I think you'll find it DOES matter.

Of course it matters : and prices will continue to fall for the foreseeable future.

Remember the main banks have had to hold off going after people who have fallen behind on their mortgage repayments.
That timescale is beginning to come to an end.
The banks will start to move against those people : couple this with the economy contracting : through in the level of non-mortgage personal debt : add in the oversupply of houses :

Property prices, on average, have some way to fall.