When will the property market bottom out?

mathie

I searched and didn't find a poll.

So when do you think we will see a bottoming out of the property market?

pwd

I've seen comparisons of trend graphs of the Irish bubble with previous bubbles such as the Japanese, and it appeared that the Irish bubble is so far quite consistent with them. Therefore I think it will remain consistent in its decline and that it will be later than 2012, possibly many years later.

Freddie59

pwd wrote: »

I've seen comparisons of trend graphs of the Irish bubble with previous bubbles such as the Japanese, and it appeared that the Irish bubble is so far quite consistent with them. Therefore I think it will remain consistent in its decline and that it will be later than 2012, possibly many years later.

The lads on www.thepropertypin.com are predicting 2011 as the bottom. They've been right so far.

mrgaa1

from conversations had with builders over the past few days they have seen a HUGE rise in viewings and have received offers on properties. The previous few months were very very quiet. It would appear that news about interest rates going, unfortunately, up plus with good value to be had - there are a lot of places that are still too high - people are looking and thinking about not throwing their money away in rent when they do want to own their own front door.

Firetrap

Ah but how many people who are looking are actually buying?

bangersandmash

mrgaa1 wrote: »

from conversations had with builders over the past few days they have seen a HUGE rise in viewings and have received offers on properties.

Builders told you that? Must be reliable so. Maybe we could ask some estate agents if they can corroborate this? Tomorrow's property advertorial should confirm it.

Next up: Car salesman says now is the time to buy a car.

bren2002

mrgaa1 wrote: »

from conversations had with builders over the past few days they have seen a HUGE rise in viewings and have received offers on properties. The previous few months were very very quiet. It would appear that news about interest rates going, unfortunately, up plus with good value to be had - there are a lot of places that are still too high - people are looking and thinking about not throwing their money away in rent when they do want to own their own front door.

Bear Trap. Plus, rent is not lost money.

amacca

I think the market has a long way to go and it will be a slow and painful process. It seems to me that most of the people that have a house for sale now are forced into selling because they have to move, cant afford the mortgage etc

I believe few sellers at the moment can even contemplate the sort of price drops necessary for their houses to represent even reasonable value to buyers unless they have to. A lot of sellers price expectations are still stuck around levels seen in 2004/2005 whereas a lot of buyers price expectations are way back around levels seen in 1998/1999. Was looking at a house last week with an asking price at around 31 times its annual earnings, an asking price which had already been reduced by 70k (this before those earnings are impacted by said property taxes and falling rents) After thinking about it for a while the lowest offer that was likely to be even entertained would work out to be 20 times its annual earnings which still represents very bad value in any investors language given how unlikely capital appreciation is now. This house wasn't outstanding or in an outstanding area btw. For me highlighted how far prices still have to go and how slow they are in getting there.

I could be wrong (obviously anything can happen in the meantime) but high unemployment, falling wages and increasing taxes (including property tax) means to me that this gap isn't going to get narrower any time soon and it will be definitely after 2012 before appropriately priced property begins trading at normal volumes.

TaxiManMartin

Im seeing a good few people i know start to buy again.
Havent seen this in a long time.
I think we are nearly there.

Duckjob

mrgaa1 wrote: »

people are looking and thinking about not throwing their money away in rent when they do want to own their own front door.

It's true. Thats what I did. I'm currently saving up for my first wall :pac:

Ahh, the old rent = dead money chestnut, change the record will you? or else at least declare your interest. Estate agent?

martian1980

Duckjob wrote: »

It's true. Thats what I did. I'm currently saving up for my first wall :pac:

Ahh, the old rent = dead money chestnut, change the record will you? or else at least declare your interest. Estate agent?

I think he's an EA or involved in the building business - he referred to selling houses before. I've dug out the quote a few times at this stage

stepbar

Was at a breakfast briefing this morning in the RDS. Reckoned the middle of 2010. Have the slides in the car, must have a look over them for the logic behind it (can't just rem, twas a bit too early for taking in high brow info).

EDIT: Actually the slides might be up on www.mko.ie....

stepbar

Duckjob wrote: »

It's true. Thats what I did. I'm currently saving up for my first wall :pac:

Ahh, the old rent = dead money chestnut, change the record will you? or else at least declare your interest. Estate agent?

In certain circumstances it can be cheaper to buy. However long that will last is another question.

Mr. Presentable

Who knows, not I? But I can say that near my work there have been four houses for sale, one for 18 months :eek:, all of which went sale agreed or sold in the last month.

johndaman66

Think the "rent is dead money" argument is kinda dead in the water now the way that the market is. I think to say for example the housing market will bottom out in Q2 2011 is a complete shot in the dark as there are many things which can change in the meantime/ after which either cannot or cannot be predicted with certainty at this point in time. A damn lot of people thought house price were on the way up indefinately in 2005 and well look whats happened since.

One thing though is that I wouldn't expect to see any sizeable gains after prices bottom out. So I wouldn't worry too much about not buying at the right time.

I would like to ask people in general who voted in the poll why they picked the particular quarter they chose as oppossed to any other quarter. What was yer basis or logic in making yer choice

BendiBus

mathie wrote: »

I searched and didn't find a poll.

So when do you think we will see a bottoming out of the property market?

How do you define the bottom of the market? Prices or activity?

I expect activity will begin to increase long before prices do. So (dubious) evidence any level of sales is no indicator of an end to the fall in prices.

Eventually rising activity will meet falling prices and normality will return for a while. But not before employment and banking have clearly stabilised. So I expect it will be after 2010. Around Q2 of 2011 would be my guess at when prices level off in real terms. But I also expect the rate of price falls will taper off between now and then.

Strictly a 'finger in the air' estimate.

amacca

nipplenuts wrote: »

Who knows, not I? But I can say that near my work there have been four houses for sale, one for 18 months :eek:, all of which went sale agreed or sold in the last month.

Round my way its not unheard of for an estate agent to put sale agreed on a house if its been up for what they consider to be too long just so they can generate the impression of a sale (panic genuinely interested buyers into putting up some more cash) whereas in fact it may not be sale agreed at all. Seems to be easy to back out/explain it away afterwards if it doesnt work saying the buyer couldn't get the loan after all, couldnt sign the contract, had a change of circumstances etc. This is a long time back before the boom but I knew of two properties in phibsborough that were sale agreed and then up for sale again with a different ea a couple of months later. + doesnt look good to have something up for sale for so long with no action, gives the buyer too much bargaining power.

There a sneaky lot these estate agents.

If theyve actually sold then maybe sellers are letting them go at a reasonable price afterall or else it couls be the property market equivalent of a dead cat bounce.

(Of course my opinion of what a reasonable price might be and everyone elses could be.....different:eek:)

Senna

An increase in sales could be happening and even if it is, that does not mean we are at the bottom. We are in the stages of a bust, a particular bad bust by international standards, but even during this time some house are being bought, just at very low volumes.
Its quite possible that some people who have been relatively unaffected by the the recession (there are some) see now as a good time to buy, and so will buy. But a (small) increase in sales doesn't really mean anything. There are 70k (i suspect more) house for sale and 350k empties. Its these that will ensure a long drawn out journey to the bottom.
FTB's and investors are needed to bring these number down, people trading up/down will not affect these numbers. I know there are few investors seriously considering jumping back into the market and i think FTB's are still afraid as they see further price drops or they dont have the deposit needed or the means to service a mortgage (from the banks perspective).

I voted for 2012+ as i think it will be much longer, near the bottom we will have only a small decrease in prices, maybe 2-4% per annum. Even if we had 0% change year on year we would still be in a falling market, unless were in deflation. The bottom wont be a single yearly quarter, its likely to be a stable market lasting years.

Duckjob

stepbar wrote: »

In certain circumstances it can be cheaper to buy. However long that will last is another question.

Smaller monthly repayment (for the moment) does not = Cheaper

The whole "cheaper to buy" thing is just another line of bull**** being spun out by estate agents and other VIs in order to flog their wares.

...and thats not even getting into the fact it's based on interest rates that WILL go back up several percent when Europe starts to pull out of recession.

To me, cheaper to buy means if I buy now, the total amount I pay to own my home (over 25 yrs or whatever) is less than if for example, I stay renting for another 2yrs and then buy.

Do I believe I would pay less in total for a mortgage for a house today than I would for 2 yrs rent + a mortgage for the same house in 2 yrs ? Not on your nelly....

green-shoots

I have bought and a lot of my friends have also . I have property already and some cash set aside There are good deals out there in Property when you consider that building providers costs have not dropped and houses are not going to get any cheaper to build with all new regulations .Watch out for square footage though and make sure that you compare size and price Property adjacent to motorways sells and rents ,These will really appreciate when the market pops back . Borris In Ossory is good .Very big houses and gardens and motorway is just about ready Now is the time to buy before the roadway opens . Great up Balbriggan direction also .Good deals .Kilcock beside railway station .I think these are all good buys .The property market will come back when confidence comes back and i think it will shoot up quickly like it did in England and that is why I got back in now

green-shoots

Banks are offering fixed price mortgages which is usually a sign that interest rates are on the way down again .


which is another pointer as to the market trend

Senna

green-shoots wrote: »

I have bought and a lot of my friends have also . I have property already and some cash set aside There are good deals out there in Property when you consider that building providers costs have not dropped and houses are not going to get any cheaper to build with all new regulations.

Costs have not dropped?? Funny how to build a 2000sq ft house in my area cost 110e per sq ft in early 2007 and now costs 60e. (same plans used for both)
A huge cost with building during the boom was labour and expected profit, do you think their both the same? I dont know about raw building materials, i think they are cheaper, but i do know that the cost of fitting out a house has dropped immensely. Who are you kidding, either you dont know what your talking about or have made a very foolish decision if this is the information you're basing it on.

green-shoots wrote: »

The property market will come back when confidence comes back and i think it will shoot up quickly like it did in England and that is why I got back in now

So your getting in for Celtic Tiger part 2:rolleyes:
What are you basing this on? hope?

green-shoots wrote: »

Banks are offering fixed price mortgages which is usually a sign that interest rates are on the way down again .


which is another pointer as to the market trend

What?? their offering fixed mortgage rates? If rates were 20% they would still offer fixed rates.
Rates are on their way up again, which is a great reason to hold on. Bigger mortage now and lower rates for another year maybe OR smaller mortgage and rates wont have as big an effect?? which makes sense??

Who are you?? an Estate agent?? or investor way out of their depth??

beeno67

Senna wrote: »

I voted for 2012+ as i think it will be much longer, near the bottom we will have only a small decrease in prices, maybe 2-4% per annum. Even if we had 0% change year on year we would still be in a falling market, unless were in deflation. The bottom wont be a single yearly quarter, its likely to be a stable market lasting years.

I thought we were looking at deflation of 5% this yaer.

irlrobins

green-shoots wrote: »

Borris In Ossory is good .Great up Balbriggan direction also .Good deals .Kilcock beside railway station .I think these are all good buys

You're joking right? These places like these in the commuter belt have experienced the greatest falls in value, mainly because people realised that paying over the odds and then commuting 2 hours + every day was not viable. I don't see the prices going up in these places for a very long time and will probably lag any price increases overall in the market.

gurramok

TaxiManMartin wrote: »

Im seeing a good few people i know start to buy again.
Havent seen this in a long time.
I think we are nearly there.

Elaborate, are they FTB's?

So, we are nearly near the bottom when the prices are still too high with 12% rising unemployment along with tax rises and private sector wage freeze/cuts, pull the other one.

green-shoots wrote:

Borris In Ossory is good .Very big houses and gardens and motorway is just about ready Now is the time to buy before the roadway opens . Great up Balbriggan direction also .Good deals .Kilcock beside railway station .I think these are all good buys

Nice nickname. Where exactly is Borris In Ossory?

Must get down there pronto to buy

beeno67 wrote: »

I thought we were looking at deflation of 5% this yaer.

Don't be fooled, this is primarily due to interest rates falling over the last yr.

Duckjob

Senna wrote: »

Who are you?? an Estate agent?? or investor way out of their depth??

...investor invested in Borris In Ossary and/or Balbriggan I'm guessing :pac:

When someone tries to convince you the current prices are "deals" alarm bells should start ringing....

beeno67

gurramok wrote: »

Don't be fooled, this is primarily due to interest rates falling over the last yr.

Sure, but it is almost 2% excluding interest rates and considering this has mainly occured since Jan, I think we can reasonably expect deflation of about 4- 5% for 2009 as a whole. Excluding interest rate cuts or rises later in year. Add to that we will almost certainly have deflation next year. So house price rises would seem a long way off. However prices only dropping a further 3-4% this year may indicate stabilisation of the market.

ronbyrne2005

During boom when mortgage rates where around 5% inflation was close to that so the Real rate of Interest was around 0%. Now in this period of negative inflation the real rateof interest in much higher than nominal 2 or 3% mortgage rate.

CiaranC

amacca wrote: »

A lot of sellers price expectations are still stuck around levels seen in 2004/2005 whereas a lot of buyers price expectations are way back around levels seen in 1998/1999. Was looking at a house last week with an asking price at around 31 times its annual earnings, an asking price which had already been reduced by 70k (this before those earnings are impacted by said property taxes and falling rents) After thinking about it for a while the lowest offer that was likely to be even entertained would work out to be 20 times its annual earnings which still represents very bad value in any investors language given how unlikely capital appreciation is now.

If this is the case generally, and people are predicting a bottom of the market at 2011/12, wouldnt this suggest that a crash is still to come?

beeno67

ronbyrne2005 wrote: »

During boom when mortgage rates where around 5% inflation was close to that so the Real rate of Interest was around 0%. Now in this period of negative inflation the real rateof interest in much higher than nominal 2 or 3% mortgage rate.

Sure. That makes the cost of borrowing higher but not the actual cost of the property.

mathie

BendiBus wrote: »

How do you define the bottom of the market? Prices or activity?

I expect activity will begin to increase long before prices do. So (dubious) evidence any level of sales is no indicator of an end to the fall in prices.

Eventually rising activity will meet falling prices and normality will return for a while. But not before employment and banking have clearly stabilised. So I expect it will be after 2010. Around Q2 of 2011 would be my guess at when prices level off in real terms. But I also expect the rate of price falls will taper off between now and then.

Strictly a 'finger in the air' estimate.

Prices.
The average accoring to the ESRI.