Houses

gpjordanf1

Firetrap wrote: »

One difference between when you bought and now is that your wages probably went up every year or so. Now they're decreasing and the tax relief is reducing as well.

I was made redundant last November, then we had our baby, my wife doesn't get maternity pay as were both private sector, then we lost mortgage interest relief, so all in all our income was down 70%. But we got through it, i managed to get another job, 35% less than last years wages, a meeting this month to discuss redundancys, last in first out. So we've been to the bottom and back and survived.

gurramok wrote: »

Nice story. You bought in 2001, good time to do it. Did you get a tracker/var or fixed?
Your bro got a good deal it appears, but not many gaffs going for 150k in the urban areas hence its still too pricey for urban dwellers to jump in and buy.

Started on var and switched to tracker, brilliant decision!
My bro in law is buying in an urdan area, town down west, theres more appearing in this price range, nearly equivelant to 2003 prices down here, so we figured now is a good time to buy, plus hes been looking for 18 months.

Sponge Bob

tell him to wait another year before he buys

Boggle

Nobody can answer your question until at least december because the extent of the decline is subject to things like property taxes and NAMA.

The real key to the whole mess is the property tax as its a new entrant to the market - as it discourages holding property and it is very unlikely that landlords will be able to recover it from tenants (it would take my rent from 650 to750 for example and thats not happening). Basically people like my landlords who want to sell but were waiting until they could get more money will have their hands forced quicker which will drop the price.

And thats not even considering all of FF's buddies which will be fed estates by NAMA at heavily discounted rates so that they can be completed and priced to sell quickly. (Who else is going to finish off these estates?)

All bets are off, but if you haveteh cash then get mortgage approval soon so you are read when the sh1t hits the fan and you get your bargain.

Blue_Wolf

Ya I think I wil hold off a year or 2. Another concern of mine is that the houses that were built during the boom I fear were not built very well as they were rushing to build them so to sell them.

DTrotter

Sorry to drag this off topic but what do people think the chances are that people who bought at or near the peak will be able to sell anywhere near what they bought them for?

Small Change

Probably not anytime in the next 10 years

nesf

gurramok wrote: »

but not many gaffs going for 150k in the urban areas hence its still too pricey for urban dwellers to jump in and buy.

I've seen quite a few properties in Cork listed around 200K which equates to something closer to 150K given market conditions. Not in any nice areas or anything but prices (at least out of Dublin) are returning to some sense of normality. They'll overshoot on the downside though, so even if a property right now looks reasonably priced you can pretty much expect it to look cheap in a year or two.

nesf

DTrotter wrote: »

Sorry to drag this off topic but what do people think the chances are that people who bought at or near the peak will be able to sell anywhere near what they bought them for?

In real terms (adjusted for inflation) almost certainly not. In nominal terms (not adjusted for inflation) then yes probably so long as they can afford to hold onto them for a decade or more. That said 300K today will be worth a hell of a lot more than 300K in a decade, so these people still lose out even if the nominal house price recovers.

gurramok

nesf wrote: »

I've seen quite a few properties in Cork listed around 200K which equates to something closer to 150K given market conditions. Not in any nice areas or anything but prices (at least out of Dublin) are returning to some sense of normality. They'll overshoot on the downside though, so even if a property right now looks reasonably priced you can pretty much expect it to look cheap in a year or two.

I'm not familiar with cork and i'm not sure if you're familiar with Dublin

There are a small number of 150k 1bed properties in dodgy areas in Dublin right now(i'm not naming them in case of flame war! :P)

What i meant is that there should be properties(not shoeboxes) priced at 150k to maybe 200k in average areas for average workers to buy.

At the mo in Dublin, if we look at houses especially, they are still asking 300k+ in dodgeville both city centre(maybe expected in certain degrees) but an awful lot in the burbs still are.

That says to me that it will need two working professionals on maybe 35k each at the usual 4.5 times salary to afford these and that is simply wrong.

2 hard working people should not have the only opportunity to afford a house where that house in an area like a junkie infected slum.

Hence there is no demand for these and they will continue to fall in price. Same goes for decent to upmarket areas where quite frankly the salaries do not reflect the asking prices.

sneakyST

I bought in 2001 and have gone sale agreed recently as myself and the family have decided to upsticks to the UK.
I let it go for 20k more than I paid for it.Why? When I bought it wasnt an investment - it was a home. We did discuss selling it in the peak - but was dismissed quickly as we saw oursleves in the house for many more years. Its a large 3 bed semi with an 80 ft garden in Dublin.

Circumstance change -so now we want a deposit for our next house. As soon as people forget about being millionaires and drop the prices to what people can afford then the better. However a lot of people seem to be stubborn.
My neighbours went to see a house in Lepordstown the other day - 3 bed - 600k .....I said to them - do you realize how close it is to a million? It dawned on them a bit (i hope).
As for the renting- I will rent for a while over there as I think prices have to drop there too, but I think buying is the only option long term for me. With baby number 2 on the way you just cant leave yourself open to an LL if he decides to sell and you cant do anythin to the property - extensions etc. Doesnt make sense to me but thats my opinion.
Everyone has a right to own a property (its in the constitution) but people need to realize they dont have a right to make a silly amount of money flipping it.

j1smithy

My opinion would be to research the price of a house/property of the area you're interested in 1996-2000. Find that price vs the average industrial wage ath that time, and when we fall back to those levels or at least close to, I would be inclined to take the jump. I agree it could be a few years till it happens, as developers are sitting on properties not willing to let any go at a loss (as it would be unsustainable). It will take the intervention of NAMA to bring the whole market back into line and get the glut of unsold properties off the market and being lived in. There will be great value to be had in holiday homes in the midlands in a few years as this is where the majority of the uninhabitable (in the long term sense) are located.

Gurgle

TJJP wrote: »

these:

They're very informative graphs, providing a strong indication that it was never a bubble.
House price index is a classic example of an under-damped system.

silverharp

from the Mish blog, conclusions most bubbles blow out in similar ways , Japan , US , Ireland.

Edit: just to clarify the comments are in relation to the US

Gurgle

silverharp wrote: »

from the Mish blog, conclusions most bubbles blow out in similar ways , Japan , US , Ireland.

Look at the 'knee' on the Japan graph ~1987, where the rate of increase in prices picked up sharply.
You can see the matching part of the 'bubble' graph - but where is it on the 'Ireland' graph?
We had a steady continuous rise up to ~ march '05, then that knee shows up and the pace picks up *somewhat* until the peak at the end of '06. Then a steady roll-off, no sudden drops.

I can't find any historical data for Irelands average household income over the same period. T'would be interesting to compare that graph to our house price index.

-edit- GNP 2003-2009, best I could do.

Whos going to tell me this has nothing to do with house prices?

silverharp

Gurgle wrote: »

Look at the 'knee' on the Japan graph ~1987, where the rate of increase in prices picked up sharply.
You can see the matching part of the 'bubble' graph - but where is it on the 'Ireland' graph?
We had a steady continuous rise up to ~ march '05, then that knee shows up and the pace picks up *somewhat* until the peak at the end of '06. Then a steady roll-off, so sudden drops.

I can't find any historical data for Irelands average household income over the same period. T'would be interesting to compare that graph to our house price index.

I just added above that the comments were related to the US market. Every market will have different "wiggles" and the Japan market will probably drag out over more years then the US.