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50% Drop speculation, hardly everywhere?

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    #62
    Photojoe
    Closed Accounts Posts: 182 ✭✭Photojoe


    BUT BUT..Prices can't go any lower than cost price. Just ask the builders. ;)


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    #63
    AARRRGH
    Closed Accounts Posts: 12,382 ✭✭✭✭AARRRGH


    Photojoe wrote: »
    BUT BUT..Prices can't go any lower than cost price. Just ask the builders. ;)

    :)

    Ask the Germans! Prices in parts of Germany have been selling below cost price for years. (Including many properties in Berlin.)


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    #64
    Photojoe
    Closed Accounts Posts: 182 ✭✭Photojoe


    AARRRGH wrote: »
    :)

    Ask the Germans! Prices in parts of Germany have been selling below cost price for years. (Including many properties in Berlin.)

    Tom Parlon will take his own life if he hears this.


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    #65
    HashSlinging
    Closed Accounts Posts: 3,413 ✭✭✭HashSlinging


    I'd say thats it & we'll see a level off very soon, followed by slight rise 1.2%.


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    #66
    ronbyrne2005
    Closed Accounts Posts: 3,494 ✭✭✭ronbyrne2005


    I remember being in Letterkenny back in 1999 and was amazed house prices were so low there. The cost of building over past few years are irrelevant. There are so many builders out of work in donegal you could build for half the price of 2006 build costs over next few years. There are many houses in letterkenny built before the boom when labour and materials were much cheaper, their pwners paid little for them and can afford to sell at below current build costs, this will drive down prices for all houses there.

    Now the main drivers of house price growth was easy credit, increasing employment, FDI, income increases, all of these are now in reverse. As recently as the 1990s it was cheaper to pay a mortgage then rent ,even in most Dublin so thats not an automatic indicator of value.

    IReland now is in the early stages of a multi faceted economic crisis, consisting of a currency crisis, a fiscal crisis, an unemployment crisis, a competitivness crisis on top of global recession. Even those in employment are gonna see lower incomes , higher taxes etc so house prices and rents will continue falling for a long time. I'd say dont pay more than 12-15times annual rental cost(and remember to factor in lower rents in coming years) for any property in Ireland over next several year. When average property is 3.5-4times average wage then CONSIDER buying(currently average property is around 240k,average wage around 35k) as we will be near bottom (but there may be an overshoot depending on how bad economy gets)


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    #67
    AARRRGH
    Closed Accounts Posts: 12,382 ✭✭✭✭AARRRGH


    ronbyrne2005 wrote: »
    I remember being in Letterkenny back in 1999 and was amazed house prices were so low there. The cost of building over past few years are irrelevant. There are so many builders out of work in donegal you could build for half the price of 2006 build costs over next few years. There are many houses in letterkenny built before the boom when labour and materials were much cheaper, their pwners paid little for them and can afford to sell at below current build costs, this will drive down prices for all houses there.

    The problem is trades have gone from meaning you don't make much money to meaning you should be pulling in 50 - 100k per year. The entire industry has gone insane.

    Everyone now expects to be earning loads of money - whether you fix chairs or lay cement or whatever.

    It'll be a few years before reality kicks in and builders realise they should never have been making crazy money.


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    #68
    Himselfe
    Registered Users Posts: 126 ✭✭Himselfe


    AARRRGH wrote: »
    It'll be a few years before reality kicks in and builders realise they should never have been making crazy money.

    Why does everyone think builders shouldn't make good money? I'm not a builder and I'm not disagreeing with you, just wondering why this is. Should they be on the average industrial wage? More? Less?


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    #69
    AARRRGH
    Closed Accounts Posts: 12,382 ✭✭✭✭AARRRGH


    Himselfe wrote: »
    Why does everyone think builders shouldn't make good money? I'm not a builder and I'm not disagreeing with you, just wondering why this is. Should they be on the average industrial wage? More? Less?

    Massive generalistion here, but builders tend to be poorly educated, and in general anyone can become a builder. That sort of thing normally leads to low wages...


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    #70
    mrgaa1
    Closed Accounts Posts: 759 ✭✭✭mrgaa1


    AARRRGH wrote: »
    Massive generalistion here, but builders tend to be poorly educated, and in general anyone can become a builder. That sort of thing normally leads to low wages...

    huge generalisation and one tantamount to abuse. not everyone can become a builder. There are safepass courses, skills cards, university degrees, all to be had to become a builder. The use of totalstations (surveying equipment), working out angles, degrees, the fall of pipes, safe way of working, accreditations, Safe-T Cert, ISO standards, accounts, quantity surveying, tax, VAT, insurance, vans, lorries etc.... Its not all about the shovels and jack hammers.
    This would be like calling an IT person poorly educated - they may have a degree and personal knowledge of software, hardware, routers, hubs, networks, internet, IPv4, IPv6, broadband, remote access, virus protection - but sure their poorly educated.
    In that case could we not argue that everyone is poorly educated? You may say that no - you were referring to the labourer. In the past I'm sure this was so as in most jobs. I think you'll find these days that labourer's have their leaving cert, may have some sort of trade and indeed some may have university degrees.


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    #71
    The_Conductor
    Moderators, Society & Culture Moderators Posts: 32,285 Mod ✭✭✭✭The_Conductor


    2 temporary bans issued on this thread for personal abuse.

    If you disagree with what someone posts- refute the post without attacking the poster. Zero tolerance on this.


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    #72
    SkepticOne
    Closed Accounts Posts: 6,718 ✭✭✭SkepticOne


    Himselfe wrote: »
    Why does everyone think builders shouldn't make good money? I'm not a builder and I'm not disagreeing with you, just wondering why this is. Should they be on the average industrial wage? More? Less?
    There's nothing wrong with construction firms making lots of money but, like any business it depends on being able to produce what people want at prices they are prepared to pay. There must be a market for their product.

    If I were to make basic pocket calculators, I could not charge 100 euros each for them and expect to make money. This would be true even if my costs were 100 euros to make them since the buyer has no interest in what my costs are. He will either buy a cheaper one or do without.

    The same is true of houses and apartments. There have been a vast number produced in the last few years. True, not all of them are in prime locations, but there's plenty out there nevertheless that people can choose from. It does not matter to buyers that they were built when land prices or labour costswere sky high since they can purchase from someone who has to sell or who bought when prices were lower.

    Building will return when prices have come down sufficiently that the excess stock starts to get used up and people are willing to take the risk again and not before. It may not be the same builders who are burdened with debts from overbuilding at high costs but others will enter the market.


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    #73
    The_Conductor
    Moderators, Society & Culture Moderators Posts: 32,285 Mod ✭✭✭✭The_Conductor


    SkepticOne wrote: »
    There's nothing wrong with construction firms making lots of money but, like any business it depends on being able to produce what people want at prices they are prepared to pay. There must be a market for their product.

    Business firms charged monopoly rates on the assumption they would have a perpetual monopoly. They now don't have a market for their product, nor a viable business model that can be tapped for recompense for their past sins.
    SkepticOne wrote: »
    If I were to make basic pocket calculators, I could not charge 100 euros each for them and expect to make money. This would be true even if my costs were 100 euros to make them since the buyer has no interest in what my costs are. He will either buy a cheaper one or do without.

    The first pocket calculator I bought did cost IR£200. Desk calculators at the time cost hundreds. People who were goaded by politicians, the media and developers into buying unsuitable properties on the premise that if they didn't- they would never be able to buy- are not in the same position as someone deciding to buy a calculator or a games console or whatever......
    SkepticOne wrote: »
    The same is true of houses and apartments. There have been a vast number produced in the last few years. True, not all of them are in prime locations, but there's plenty out there nevertheless that people can choose from. It does not matter to buyers that they were built when land prices or labour costswere sky high since they can purchase from someone who has to sell or who bought when prices were lower.

    Its irrelevant. ISupply is not the question- market liquidity, and the lack thereof, is.
    SkepticOne wrote: »
    Building will return when prices have come down sufficiently that the excess stock starts to get used up and people are willing to take the risk again and not before. It may not be the same builders who are burdened with debts from overbuilding at high costs but others will enter the market.

    Its more the latter- when people are willing to take the risk again- and given the road the government is going down (tax everyone to the hilt rather than tackle the public sector and social welfare)- its not going to happen anytime soon......

    The problems with the construction sector and the money they were making are several fold. Apprentices were making take home pay several times the level of professionals with significant experience- which lead to young people with little experience of money splurging large amounts of unsustainable income on goods they really didn't need. In addition- the lure of this money led to significant numbers of mostly males to leave school early without formal educational qualifications- and now 5-6 years down the line, they have zero interest in going back, no prospects in anything other than the construction trade- which is in decline and will never ever again reach the zeniths of recent years....... There are tens of thousands of young people in this boat- without any reasonable expectation of ever getting their previous income levels back again. That a tiler could make more doing a nixer on a Saturday morning than my entire pay for the week- simply didn't enter the equation for anyone. A correction was inevitable- the scale of the correction is simply breath taking though......


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    #74
    SkepticOne
    Closed Accounts Posts: 6,718 ✭✭✭SkepticOne


    smccarrick wrote: »
    The first pocket calculator I bought did cost IR£200. Desk calculators at the time cost hundreds. People who were goaded by politicians, the media and developers into buying unsuitable properties on the premise that if they didn't- they would never be able to buy- are not in the same position as someone deciding to buy a calculator or a games console or whatever......
    This is an interesting reply. I think one of the big problems in the Irish property market is that we have tended to look at propery as something unique, totally different to any other type of product and not subject to the normal laws of supply and demand.


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    #75
    The_Conductor
    Moderators, Society & Culture Moderators Posts: 32,285 Mod ✭✭✭✭The_Conductor


    SkepticOne wrote: »
    This is an interesting reply. I think one of the big problems in the Irish property market is that we have tended to look at propery as something unique, totally different to any other type of product and not subject to the normal laws of supply and demand.

    I agree with you totally. Property is just another product- like any other. Its sad that its going to take 20 years to unwind the mess though......


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    #76
    bobbiw
    Closed Accounts Posts: 211 ✭✭bobbiw


    smccarrick wrote: »
    Business firms charged monopoly rates on the assumption they would have a perpetual monopoly. They now don't have a market for their product, nor a viable business model that can be tapped for recompense for their past sins.



    The first pocket calculator I bought did cost IR£200. Desk calculators at the time cost hundreds. People who were goaded by politicians, the media and developers into buying unsuitable properties on the premise that if they didn't- they would never be able to buy- are not in the same position as someone deciding to buy a calculator or a games console or whatever......



    Its irrelevant. ISupply is not the question- market liquidity, and the lack thereof, is.



    Its more the latter- when people are willing to take the risk again- and given the road the government is going down (tax everyone to the hilt rather than tackle the public sector and social welfare)- its not going to happen anytime soon......

    The problems with the construction sector and the money they were making are several fold. Apprentices were making take home pay several times the level of professionals with significant experience- which lead to young people with little experience of money splurging large amounts of unsustainable income on goods they really didn't need. In addition- the lure of this money led to significant numbers of mostly males to leave school early without formal educational qualifications- and now 5-6 years down the line, they have zero interest in going back, no prospects in anything other than the construction trade- which is in decline and will never ever again reach the zeniths of recent years....... There are tens of thousands of young people in this boat- without any reasonable expectation of ever getting their previous income levels back again. That a tiler could make more doing a nixer on a Saturday morning than my entire pay for the week- simply didn't enter the equation for anyone. A correction was inevitable- the scale of the correction is simply breath taking though......


    I very much like your understanding of the labor market. It is well thought out and very true.

    Its scarey to think what is really going to happen. Unlike the worldwide recession I do think Irelands situation is quite unique. and of course not for the better. Construction accounted for so much and with the influx of east europeans there was a vibrant rental market.

    I dont know where it will end and I would be heavily concerned about the next budget.


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    #77
    mrgaa1
    Closed Accounts Posts: 759 ✭✭✭mrgaa1


    http://www.rte.ie/business/2009/0602/usa.html perhaps the global economy is beginning to show signs of stabilisation - long way to go but when the slide stops things can start to look up.
    http://www.rte.ie/business/2009/0602/economy.html
    The returns for May 09 will be announce later this week - we'll see where we are then.
    In the UK http://news.bbc.co.uk/1/hi/business/8078426.stm and with oil http://news.bbc.co.uk/1/hi/business/8076705.stm now climbing on the back of global stock market gains althought http://www.rte.ie/business/2009/0602/eurozone.html would suggest we've a bit to go yet.


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    #78
    oceanclub
    Registered Users Posts: 3,411 ✭✭✭oceanclub


    mrgaa1 wrote: »
    http://www.rte.ie/business/2009/0602/usa.html perhaps the global economy is beginning to show signs of stabilisation - long way to go but when the slide stops things can start to look up.
    http://www.rte.ie/business/2009/0602/economy.html
    The returns for May 09 will be announce later this week - we'll see where we are then.
    In the UK http://news.bbc.co.uk/1/hi/business/8078426.stm and with oil http://news.bbc.co.uk/1/hi/business/8076705.stm now climbing on the back of global stock market gains althought http://www.rte.ie/business/2009/0602/eurozone.html would suggest we've a bit to go yet.

    Whatever the global outlook, Ireland has a uniquely ****ed-up set of circumstances. Look at the fact that the government is going to have to put a _fifth_ (7.5bn) of our total tax take (41bn) into _one_ bank when we aren't even covering our basic outgoings!

    P.


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    #79
    jmayo
    Registered Users Posts: 13,186 ✭✭✭✭jmayo


    mrgaa1 wrote: »
    huge generalisation and one tantamount to abuse. not everyone can become a builder. There are safepass courses, skills cards, university degrees, all to be had to become a builder. The use of totalstations (surveying equipment), working out angles, degrees, the fall of pipes, safe way of working, accreditations, Safe-T Cert, ISO standards, accounts, quantity surveying, tax, VAT, insurance, vans, lorries etc.... Its not all about the shovels and jack hammers.
    ...

    I think what the poster previously was getting at was that bog standard block layers, labourers, plasterers, plumbers, sparks were earning a fortune and you don't need a university degree or even a leaving cert to do any of those jobs.

    I know one block layer who had a enough money to keep a bloody racehorse FFS.
    BTW a safepass is one day of effort and a bit of cop on.

    Some of what you described would be the work of quantity surveyors, site safety, site engineers with civil engineering degrees so you are muddying the water.
    oceanclub wrote: »
    Whatever the global outlook, Ireland has a uniquely ****ed-up set of circumstances. Look at the fact that the government is going to have to put a _fifth_ (7.5bn) of our total tax take (41bn) into _one_ bank when we aren't even covering our basic outgoings!

    P.

    Even if you leave out the banks, which I try to make me sleep at night, we are spending more than we are getting in revenue day to day.

    We can not continue as is and even if there is an upturn internaitonally we need to do something about our competitiveness in order to keep jobs and create new ones.
    If we do not cut our cost base in this country we are f***ed.

    For the last few years the state of our manufacturing & services industry was masked by the job creation in construction, retail and public sector. Now the true state of our real economic base is apparent.

    I am not allowed discuss …



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    #80
    bobbiw
    Closed Accounts Posts: 211 ✭✭bobbiw


    Very true, despite what happened in the US which of course compounded things,

    Ireland was still set for a major correction on housing. It was not sustainable and was very irrational. people were buying crap for the same price as mansions in other countries.

    The economy may indeed improve at some stage but its very unlikely that house prices will increase again in the next decade.


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    #81
    johnnyskeleton
    Moderators, Entertainment Moderators, Politics Moderators Posts: 14,505 Mod ✭✭✭✭johnnyskeleton


    kmick wrote: »
    Who valued it at that the seller? Have you paid an independant valuer to come and have a look at the house. It will be the best 150-200 euro you will spend. Make sure to get someone non-local who does not know the builder. Ask him/her for worst case scenario price.

    Then send the valuation (whch is likely to be 50-60k below the builder valuation) to the builder with an offer for that price. Say if it is 50 below at 240k offer that. Then go up in 1's to 250k. Put each offer on the table for 24 hours only as "you are also looking at another property which your gf likes but you prefer this one". Drop out at 250k and wait for the call. If it does not come you know the builder cant make a profit at 250k or does not need the cash right now.

    Why would you suggest that someone pay more for a house than its worth? Whatever about what it might be worth in 12 months time, paying above the odds today doesn't make sense.


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    #82
    jmayo
    Registered Users Posts: 13,186 ✭✭✭✭jmayo


    johnnyskeleton wrote: »
    Why would you suggest that someone pay more for a house than its worth? Whatever about what it might be worth in 12 months time, paying above the odds today doesn't make sense.

    Ever watch Trigger negotiate with Dell Boy in Only Fools & Horses ?
    It's a bit like that I would guess. ;)

    I am not allowed discuss …



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    #83
    Duckjob
    Registered Users Posts: 2,859 ✭✭✭Duckjob


    johnnyskeleton wrote: »
    Why would you suggest that someone pay more for a house than its worth?

    It's the responsibility of buyers to bid themselves back up from the cheap prices we've got now to get our construction bubble based economy going again. It's their patriotic duty dammit :D


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    #84
    geem
    Registered Users Posts: 100 ✭✭geem


    I wouldn't buy a house right now. There is a huge over supply, increasing unemployment,bank problems and more and more of this.
    Of course it matters what the house is worth in future. If you buy a house now for 400,000 and see your neighbours house selling for 250,000 in a year will you still be happy.
    Just think what that 150,000 could have bought you and don't forget how much 150,000 worth of debt costs in terms of interest payments etc.
    Why would anyone not wait a year to see if they can save 50, 100 or 150k on the price of their house? Would you throw that money in the river?
    Think how long it takes you to earn that money.
    Past prices were inflated - a bubble. We are not going back there.
    Don't worry about missing the boat that's bubble speak - ignore it. If and when prices go up do you think they are going to go up in 30,40 50% chunks or do you think they may rise by .5% 1.% etc.
    There are lots of websites charting price falls. I too am waiting to buy, I would love to own a house. However I am not going to. To reassure myself in my decision I have charted several houses over the last year. They are all still for sale. One house dropped 40,000 from Jan to March. I paid 3,000 in rent during that period so I saved myself 37,000 (plus interest etc.) by not jumping at it in December.
    You would have to earn millions not to mind paying over the odds by a hundred grand or more on a house. Think about it.


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    #85
    Duckjob
    Registered Users Posts: 2,859 ✭✭✭Duckjob


    geem wrote: »
    I wouldn't buy a house right now. There is a huge over supply, increasing unemployment,bank problems and more and more of this.
    Of course it matters what the house is worth in future. If you buy a house now for 400,000 and see your neighbours house selling for 250,000 in a year will you still be happy.
    Just think what that 150,000 could have bought you and don't forget how much 150,000 worth of debt costs in terms of interest payments etc.
    Why would anyone not wait a year to see if they can save 50, 100 or 150k on the price of their house? Would you throw that money in the river?
    Think how long it takes you to earn that money.
    Past prices were inflated - a bubble. We are not going back there.
    Don't worry about missing the boat that's bubble speak - ignore it. If and when prices go up do you think they are going to go up in 30,40 50% chunks or do you think they may rise by .5% 1.% etc.
    There are lots of websites charting price falls. I too am waiting to buy, I would love to own a house. However I am not going to. To reassure myself in my decision I have charted several houses over the last year. They are all still for sale. One house dropped 40,000 from Jan to March. I paid 3,000 in rent during that period so I saved myself 37,000 (plus interest etc.) by not jumping at it in December.
    You would have to earn millions not to mind paying over the odds by a hundred grand or more on a house. Think about it.


    Yup, that extra 150,000 will cost probably the same again to borrow over 30 yrs.

    Your point on the value of the difference is spot on. Unfortunately people can more readily comprehend the value of 300 euro than that of 300,000.


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