Irish property market bound for recovery

Euroland

When the property markets around the world begin to recover it's time to have a look on the future of the Irish property market without negative paranoia and discuss it.

Pending Sales of Existing Homes in U.S. Rose 6.4% in August

http://www.bloomberg.com/apps/news?pid=20601068&sid=aFH0zI40heAc

Do you believe that the Irish property market would stabilise soon and start to grow slowly by 2011?

J-blk

Pure speculation, recovery in the US or large European countries means nothing with the mess things are still in.

D3PO

the indicators are that there should be some rise in 2011 how much though is questionable.

furthermore if you mean recovery from now or recovery from q4 2010 thats a very different question.

I would think that from q4 2010 levels we will see a small recovery in the market, but if you mean from todays levels I would saw no we wont see a recovery in 2011

gurramok

Also, don't confuse recovery of the economy in general with one specific market which is in the doldrums.

Whats the negative paranoia you on about?

Euroland

D3PO wrote: »

the indicators are that there should be some rise in 2011 how much though is questionable.

furthermore if you mean recovery from now or recovery from q4 2010 thats a very different question.

I would think that from q4 2010 levels we will see a small recovery in the market, but if you mean from todays levels I would saw no we wont see a recovery in 2011

From the buttom whenever it happens (I believe it would happen within the next 12 months)

Euroland

gurramok wrote: »

1) Also, don't confuse recovery of the economy in general with one specific market which is in the doldrums.

2) Whats the negative paranoia you on about?

1) In this topic we discuss only situation on the Irish residential property market

2) I mean negative paranoia and hysteria (over-pessimism) in Mass Media and among Irish people for the last 3 years. I's time to calm down.

gurramok

Euroland wrote: »

2) I mean negative paranoia and hysteria (over-pessimism) in Mass Media and among Irish people for the last 3 years. I's time to calm down.

And no need for positive hysteria either.

Euroland wrote:

From the buttom whenever it happens (I believe it would happen within the next 12 months)

Based on what?

20goto10

gurramok wrote: »

And no need for positive hysteria either.



Based on what?

Speaking for myself, based on a global economic recovery for which ireland will follow suit. It's all about confidence at this stage.

Btw, recovery does not mean back to the crazy days.

bangersandmash

Euroland wrote: »

2) I mean negative paranoia and hysteria (over-pessimism) in Mass Media and among Irish people for the last 3 years. I's time to calm down.

Negativity about property has been in the full public consciousness for 3 years? Really? To me it was spring 2008 before mass media stories about property price falls really gained traction. References to "nay-sayers" and "doom-mongers" were still being thrown around even then. And this year we've seen a plethora of "market bottoming out" stories.

Also I'd be interested to know if you consider news reports about Daft or Myhome statistics as hysteria? In your opinion would analogous reports about price increase statistics have been over-optimistic and hysterical pre-2007?

bugler

2) I mean negative paranoia and hysteria (over-pessimism) in Mass Media and among Irish people for the last 3 years. I's time to calm down.

This must be a contender for the most misleading piece of revisionist rubbish posted on this forum. BOC would be embarrassed by it. 3 years ago we were at the peak of the bubble. Over-pessimism is not something the Irish property market has ever suffered.

gurramok

20goto10 wrote: »

Speaking for myself, based on a global economic recovery for which ireland will follow suit. It's all about confidence at this stage.

Btw, recovery does not mean back to the crazy days.

Yes, a lag factor in recovery. The economy is bound to recover at some point. Its just that the OP thinks the property market in Ireland will bottom out within 12 months with or without a economic recovery here!

Calina

Euroland wrote: »

When the property markets around the world begin to recover it's time to have a look on the future of the Irish property market without negative paranoia and discuss it.

Pending Sales of Existing Homes in U.S. Rose 6.4% in August

http://www.bloomberg.com/apps/news?pid=20601068&sid=aFH0zI40heAc

Do you believe that the Irish property market would stabilise soon and start to grow slowly by 2011?

I only have a few minutes.

Technically, if you are comparing the Irish market with other international markets, there are a few things to bear in mind. By and large, those other markets behave slightly differently to Ireland because they have different regulatory rules and they are at different stages in their economic cycles. While comparing the Irish market with the US market is vaguely interesting since the Irish market has appeared to shadow the US market with a slight lag, I don't believe that the US market bubbled to the extent that the Irish market has and therefore, it's difficult to be certain that the Irish market will peg to its trough and recovery. I'd also add that if I think that the Irish market will behave slightly differently to the US market, it's because I think it will overshoot. So before you do anything you need to look at price falls in teh US versus price falls in Ireland. We still have a way to go.

There's also the issue of bankruptcy legislation being different here, the existence of a moratorium on repossessions (which slows up the falls) and the fact that a lot of new builds are in limbo courtesy of the non-implementation of NAMA yet.

Supply side, we still have an excess of supply over buyers willing or able to buy at current asking prices and it's apparently the case that most properties are lucky to make up to 80% of their current asking price. Time on the market has also ballooned - in short, it's taking longer to sell.

Can I see that swinging around within 18 months? No. And here's why.

1) the vast majority of starter homes in the area of most demand are apartments. There is a glut of them coming on the market. Banks have been demanding monumental deposits on them for the past year and in the interest of prudent lending criteria I can't see that being relaxed. In many cases, that deposit equates to up to a years salary. It's a lot to save in a short space of time.

2) Without the FTBs holding up the market, trader uppers are in trouble. In fact a lot of those are very stuck at the moment because the capital appreciation that was supposed to finance the trade up has been wiped and in many cases then some.

3) Unemployment is running at 3 times the level it was 18 months ago and there has been a disproportionate hit in terms of gender balance. In short, mostly, men have lost their jobs, they are specifically in the area of construction and construction related. We are not going to need much more in the way of new property courtesy of the existing overhang so in terms of re-employing a lot of our 14% unemployed, there are some issues. This is going to have issues in terms of market entrants at FTB level and servicing existing mortgages. I would contend that until you see unemployment drop down below 8 or 10 per cent for at least 3 quarters you will not see huge growth in the number of FTBs entering to prop up the market.

4) the current level of sales prices are still disproportionally higher compared to salaries. There is an historic norm of about 5 times individual salary versus average income. Now there are a lot of figures bandied around for that, but the highest I've seen is about 38K. Five times that is about 190KE but for round up let's say 200kE. Average house prices are still quite a bit above that.

5) We are currently in a period - more or less - of deflation. I think this will start to reflect in salaries which will put more presssure in (4) above.

6) We are paying more tax. In some cases I believe take home pay is at least 10% less than it was a year ago if there is no salary change; many people have taken pay cuts. Again (4) under pressure.

7) Interest rates are at an historic low courtesy of the idiocy of the banks and ensuing economic mess. This means effectively, the only route for them is up. They will not remain at current levels for ever and you need to bear in mind that the banks also need to recapitalise. Interest is one of their main sources of income. Over the past 3 or so years, the initial slow up in price increases and first drops coincided with interest rate rises from the ECB as they started to rise above the insane 2% that Alan Greenspan gifted the world after 9-11. This will have an additional impact on the amount of money loaned to market entrants, our friends the FTBs.

8) Inward migration to Ireland is levelling off and last quarter saw an outflow of population for the first time in almost 15 years. This will have an impact both on rental and purchase demand and this at a time when demand is already very low.

9) Rental yield for the most part is still extremely low and rents are on their way down due reason (8). They are helpfully floored by the ridiculously high HSE payment but that will not fill all the vacant property in the country.

In short, there is a lot to reverse in 18 months there. I don't see it happening. In some respects I would see the current situation as a recovery as it is returning property prices to some form of rationality.

Euroland wrote: »

1) In this topic we discuss only situation on the Irish residential property market

2) I mean negative paranoia and hysteria (over-pessimism) in Mass Media and among Irish people for the last 3 years. I's time to calm down.

This comment in my view is misplaced and deluded. The truth is, there has not been much in the way of negative comment in the Irish media until early this year and I'd hardly call it hysterical. You've opened the thread and if there are those who disagree with you, you will have to put up with them voicing why as I have done above.

Good day to you.

jetski

Depends alot on NAMA & Lisbon 2

trafada

jetski wrote: »

Depends alot on NAMA & Lisbon 2

Why Lisbon 2? It might help a bit in terms of exports but I don't see the yes vote help to break the current crisis. With NAMA, the way I look at it is; in order for the banks to get going they need to get the money of developers, the developers need to get money for the places and the amount of money both parties need can only be got at bubble levels a no-one wants that. Also the amount of debt floating around must be enormous, I read somewhere else that one category of people who may have got badly hit was people who bought years ago and released equity for important things like cars and holidays.

AARRRGH

20goto10 wrote: »

Btw, recovery does not mean back to the crazy days.

I'd like the OP to define what he means by recovery.

Also, I don't believe we are anywhere near the bottom of the market. The vast majority of our houses are still way overpriced, i.e. unaffordable.

johnnyskeleton

First of all, you have to ask what is a property worth now? Is, say a bog standard 3 bed semi worth the €300k+ it was going for in 2006, is it that figure less 40% or some other notional figure for the decrease or is it what the average person will pay/be able to borrow?

It seems to me that even now that if a property is on the market at €200k a person wishing to buy that property would only spend/borrow €150k at most and similar, so even if you could put a notional market price on property, unless that price is the price at which supply meets demand (i.e. at a certain price there will be a buyer for every seller) there will still be a disconnect between that price and what the property will actually sell for.

With that in mind, any measure of house prices is purely theoretical without actual sales to back it up.

I can't see houses selling for their actual worth in the next few years, prices will remain artificially high, supported by the government's various schemes, and they will slowly decline in both nominal terms and in line with inflation after the overall economy recovers (some say that house prices tend to pick up approximately 1 year after the overall economy recovers). As I can't see the overall economy recovering either, nor can I see reckless lending or increased demand I can't see house prices rising at all in the immediate future, unless there is massive eurozone inflation.

MG

Depends what you mean by stabilisation and growth. Stabilisation is possible certainly if you apply a wide definition. Using the PTSB/ESRI index as a benchmark, the index is falling at an annualised 15-18% at the mo. Continuing at this rate might imply a nominal 40-50% fall from the peak by 2011 which appears like a possible bottoming out range. Far from certain though.

Growth, however, is another matter. Everything is against growth this early in the cycle - emigration, tax, earnings etc but possibly even more important will be the psychological damage done. A generation of Irish may look at the housing market with dread.

sharper

If interest rates were going remain permanently at near zero rates then maybe property would start to recover in 2011.

However it's more likely rates will start to increase again around mid-2010 and it's only then you'll see the bottom of the Irish market.

Employment is going down, the population is going down (net emigration), after tax income is going down, the amount of credit available has dropped significantly, the cost of credit will rise significantly and the cost of property ownership (via taxes and rates) will rise.

Many of those factors have barely even started to hit the market here yet. I wouldn't count on a recovery anytime soon.

Amhran Nua

20goto10 wrote: »

Speaking for myself, based on a global economic recovery for which ireland will follow suit. It's all about confidence at this stage.

No, its not the stock market, confidence is much less of a factor in the wider economy.

Euroland wrote: »

2) I mean negative paranoia and hysteria (over-pessimism) in Mass Media and among Irish people for the last 3 years. I's time to calm down.

Even if it does bottom out by 2011 or 2012, it almost certainly won't grow at boom levels, if it grows at all.

sharper

Amhran Nua wrote: »

Even if it does bottom out by 2011 or 2012, it almost certainly won't grow at boom levels, if it grows at all.

Unfortunately people still have an expectation that bubble growth is the norm for property because that's how it behaved here for so long. They think that after 2011 (or whenever) it'll be just like how it was before.

Over long periods property prices generally match inflation. It should be fairly obvious that something as necessary as shelter cannot outpace people's earnings unless there's some constriction of supply e.g. a lack of land.

JupiterKid

Calina's excellent post in this thread hits the nail on the head. The Irish economy is in very serious trouble, much more serious than most of our Eurozone or global neighbours prescicely because of our obscene property and construction bubble that may well go into both history and economics text books as a warning and lesson to future generations of students.

Unemployment is still rising - right back to 1980s levels and the housing market was none too healthy during that decade, was it? (it was essentially stagnant for most of the 1980s). People cannot obtain a loan when they do not have a job and those losing their jobs are going into mortgage arrears and worse.

Emigration is back. Although most emigrating last year were from the recently joined EU 12 countries (and most of these were male, illustrating the collapse of the construction sector), more and more Irish are emigrating or considering emigration as their only option to find work. A falling population means a shrinking pool of potential house buyers.

The sheer overhang of vacant housing built - some of which will never be occupied and may have to be demolished - means that housing supply greatly outstrips demand and will for many years to come.

I reckon an ECB interest rate increase in 2010 is a real possibility as the rest of the Eurozone economy recovers and this will damage our fatally wounded housing market even further - leading to further price drops but also, more worryingly, a surge in mortgage arrears as it could be the "straw that breaks the camel's back" for many homeowners in negative equity and struggling to cope with mortgage repayments after a job loss/pay cut.

Ireland is so out of kilter with the rest of the Eurozone in terms of the economic cycle that it is frightening. We had interest rate cuts in the early 2000s which fuelled the fire of the property bubble and now face increases when the market is still in a state of collapse. These pro-cyclical interest rate trends are worsening the intensity of the economic cycles.

This story is far from over.

Euroland

U.S. Economy on Mend, Housing Poised for Rebound, LaVorgna Says

Oct. 6 (Bloomberg) -- The U.S. economy is on the mend and housing is poised for a rebound, said Joseph LaVorgna, chief U.S. economist at Deutsche Bank Securities Inc. in New York.
“The momentum in the economy is moving forward,” LaVorgna said today in an interview on Bloomberg Radio.
Housing is close to a turnaround because “we have had a tremendous improvement on inventories,” he said. “We are much closer to a housing bottom than many believe.”

http://www.bloomberg.com/apps/news?pid=20601068&sid=an1vxMc2SMEU

Property market: global house prices begin to steady

The financial crisis has altered the league table of top-performing property markets across the world, with surprising results. International buyers who roam the world looking for luxury city flats, ski chalets or beachside villas will as ever check out the rearranged global pecking order before making their purchases.

The latest Global House Price Index from Knight Frank shows that Israel is outstripping the rest of the world with property price growth of 12.5 per cent. It is the only country to show double digit rises in the year to June, due in part to it being land-poor, cash-rich and population-heavy.

Norway also seems to be showing steadiness in a crisis, with growth of 5.3 per cent in the second quarter of the year, on top of 4.1 per cent in the first.

Areas such as Dubai that had been booming at an astonishing rate in 2007 have seen prices plummet. "Prices are still falling in Dubai, but the rate of decline has slowed sharply," says Liam Bailey, head of residential research at Knight Frank.

"The second-quarter drop was only 7.5 per cent compared to a massive 41 per cent during the previous three months." Sales are beginning to pick up a little, so developers are trying to complete their projects, the flagship being the luxurious Palm City on land reclaimed from the sea.

Second-home owners who favour Italy will be relieved to see that prices are still dropping – by 1.3 per cent in this last quarter, a slower rate than before. "Buyers who have been looking for two or three years are now deciding the time is right," says Rupert Fawcett, Knight Frank's Italian specialist. "Either prices are adjusted or sellers may negotiate."

Prices in Spain are still sliding 2.7 per cent, dragged down by an oversupply of new homes on the Mediterranean coast. Taylor Woodrow de Espana is about to tour England (September 13-23) with property exhibitions of unsold stock, offering one-off discounts of up to 41 per cent.

The shock waves from the banking crisis are beginning to abate, however. The house-of-cards effect caused prices to drop in 88 per cent of the countries that submitted data to the index at the end of 2008.

By the first quarter of this year only 48 per cent of countries were still recording falls. According to this latest report the drops were still accelerating in only 25 per cent, prompting talk of "tentative recovery".

Northern Scandinavia remains something of a safe haven. "It seems to be recovering well, with prices increasing during the second quarter in Sweden by 3.6 per cent and Finland by 3.9 per cent," says Andrew Shirley who also worked on the report.

"This is probably because prices didn't increase to the same extent as other areas did during the boom. There has also been a sharp slowdown in the number of homes being built. In Sweden, 45 per cent fewer houses were started in the first half of 2009 compared with the same period last year. And in Norway, new starts have fallen to their lowest level since 2000."

Great Britain, too, has managed to stabilise, partly because there are so many who need to move and too few houses for them to buy.

Even in America, where subprime loose-lending led to the global crisis, there has been a steadying, with a 1.3 per cent increase in the second quarter following 7 per cent cuts in the previous two quarters.

So there is a feeling of calm spreading around the world. "It seems that prices are starting to bottom out," Shirley says.

But the market is still fragile and patchy. Prices in Bulgaria, for example, fell 9.7 per cent in the second quarter, while in Thailand, values also fell 5.6 per cent after an increase of 2.7 per cent in the first quarter, underlining that one season of recovery is no guarantee that prices will continue to increase.

"Further falls are always a possibility while credit flows remain constrained and the global economy struggles to recover from recession, but it does appear that the worst is behind us," adds Shirley in a comforting tone.

http://www.telegraph.co.uk/property/overseasproperty/6162147/Property-market-global-house-prices-begin-to-steady.html#

AARRRGH

Euroland wrote: »

U.S. Economy on Mend, Housing Poised for Rebound, LaVorgna Says

Oct. 6 (Bloomberg) -- The U.S. economy is on the mend and housing is poised for a rebound, said Joseph LaVorgna, chief U.S. economist at Deutsche Bank Securities Inc. in New York.

In fairness now, a bank is hardly going to say we're no where near the bottom. It is in their interest to get the market moving again, so I would dismiss that article altogether.

Also, Joseph LaVorgna is known for trying to talk things up.

If AIB, BOI or RBOS said something similar, I would hope most people would have the sense to ignore it.

professore

Calina wrote: »

I only have a few minutes.

Technically, if you are comparing the Irish market with other international markets, there are a few things to bear in mind. By and large, those other markets behave slightly differently to Ireland because they have different regulatory rules and they are at different stages in their economic cycles. While comparing the Irish market with the US market is vaguely interesting since the Irish market has appeared to shadow the US market with a slight lag, I don't believe that the US market bubbled to the extent that the Irish market has and therefore, it's difficult to be certain that the Irish market will peg to its trough and recovery. I'd also add that if I think that the Irish market will behave slightly differently to the US market, it's because I think it will overshoot. So before you do anything you need to look at price falls in teh US versus price falls in Ireland. We still have a way to go.

There's also the issue of bankruptcy legislation being different here, the existence of a moratorium on repossessions (which slows up the falls) and the fact that a lot of new builds are in limbo courtesy of the non-implementation of NAMA yet.

Supply side, we still have an excess of supply over buyers willing or able to buy at current asking prices and it's apparently the case that most properties are lucky to make up to 80% of their current asking price. Time on the market has also ballooned - in short, it's taking longer to sell.

Can I see that swinging around within 18 months? No. And here's why.

1) the vast majority of starter homes in the area of most demand are apartments. There is a glut of them coming on the market. Banks have been demanding monumental deposits on them for the past year and in the interest of prudent lending criteria I can't see that being relaxed. In many cases, that deposit equates to up to a years salary. It's a lot to save in a short space of time.

2) Without the FTBs holding up the market, trader uppers are in trouble. In fact a lot of those are very stuck at the moment because the capital appreciation that was supposed to finance the trade up has been wiped and in many cases then some.

3) Unemployment is running at 3 times the level it was 18 months ago and there has been a disproportionate hit in terms of gender balance. In short, mostly, men have lost their jobs, they are specifically in the area of construction and construction related. We are not going to need much more in the way of new property courtesy of the existing overhang so in terms of re-employing a lot of our 14% unemployed, there are some issues. This is going to have issues in terms of market entrants at FTB level and servicing existing mortgages. I would contend that until you see unemployment drop down below 8 or 10 per cent for at least 3 quarters you will not see huge growth in the number of FTBs entering to prop up the market.

4) the current level of sales prices are still disproportionally higher compared to salaries. There is an historic norm of about 5 times individual salary versus average income. Now there are a lot of figures bandied around for that, but the highest I've seen is about 38K. Five times that is about 190KE but for round up let's say 200kE. Average house prices are still quite a bit above that.

5) We are currently in a period - more or less - of deflation. I think this will start to reflect in salaries which will put more presssure in (4) above.

6) We are paying more tax. In some cases I believe take home pay is at least 10% less than it was a year ago if there is no salary change; many people have taken pay cuts. Again (4) under pressure.

7) Interest rates are at an historic low courtesy of the idiocy of the banks and ensuing economic mess. This means effectively, the only route for them is up. They will not remain at current levels for ever and you need to bear in mind that the banks also need to recapitalise. Interest is one of their main sources of income. Over the past 3 or so years, the initial slow up in price increases and first drops coincided with interest rate rises from the ECB as they started to rise above the insane 2% that Alan Greenspan gifted the world after 9-11. This will have an additional impact on the amount of money loaned to market entrants, our friends the FTBs.

8) Inward migration to Ireland is levelling off and last quarter saw an outflow of population for the first time in almost 15 years. This will have an impact both on rental and purchase demand and this at a time when demand is already very low.

9) Rental yield for the most part is still extremely low and rents are on their way down due reason (8). They are helpfully floored by the ridiculously high HSE payment but that will not fill all the vacant property in the country.

In short, there is a lot to reverse in 18 months there. I don't see it happening. In some respects I would see the current situation as a recovery as it is returning property prices to some form of rationality.




This comment in my view is misplaced and deluded. The truth is, there has not been much in the way of negative comment in the Irish media until early this year and I'd hardly call it hysterical. You've opened the thread and if there are those who disagree with you, you will have to put up with them voicing why as I have done above.

Good day to you.

Excellent, I would add one other item, demographics.
The baby boomers that peaked around 1975 that initially kick-started the demand for housing mostly have houses now. The following generation is not as large. Added to the fact that there was a wave of returning irish immigrants and in later years eastern europeans. None of these factors will be at play in the next 10 years or so. If anything demand will further be suppressed by emigration.

The_Conductor

D3PO wrote: »

I would think that from q4 2010 levels we will see a small recovery in the market, but if you mean from todays levels I would saw no we wont see a recovery in 2011

Funnily enough- Q4 2010 now appears to be the concensus for when the ECB is likely to commence increasing base rates......?

The_Conductor

Euroland wrote: »

U.S. Economy on Mend, Housing Poised for Rebound, LaVorgna Says

Oct. 6 (Bloomberg) -- The U.S. economy is on the mend and housing is poised for a rebound, said Joseph LaVorgna, chief U.S. economist at Deutsche Bank Securities Inc. in New York.

Sorry- but precisely what does this have to do with the Irish market?
You're continuing to try to extrapolate people trying to talk up the US market with some magical 'bottom' being on the horizon for Irish property.

On top of Calina's excellent post- I would add that according to the Economist- our budget deficit accounts for almost 60% of total expenditure in 2009- and even allowing for the agreed 4 billion cuts in expenditure annually for 2010,2011 and 2012- we will still hit a national debt ratio of over 200% by 2020 - alluded to by Brian Lenihan at the weekend- when his projections showed a continued contraction of the economy for at least another 3 years- and potentially up to 40% of gross tax revenue going towards servicing interest on our national debt......

There are far more economic snakes in the long grass that have yet to make their presence felt, than politicians are willing to admit or the public are willing to countenance.

If I was younger and without ties to the country- much as I'd hate to do so- I'd be seriously studying where I could emigrate to. New Zealand and Canada would be near the top of my wish lists.......

Euroland

smccarrick wrote: »

continued contraction of the economy for at least another 3 years

Noncense. Analysing the national statistics trends you would immediately notice that Irish GDP will resume its growth at the end of 2009, while GNP growth will resume in Q1 2010.

Euroland

smccarrick wrote: »

Sorry- but precisely what does this have to do with the Irish market?
You're continuing to try to extrapolate people trying to talk up the US market with some magical 'bottom' being on the horizon for Irish property

I am just saying that the Irish residential property market has had enourmous fall over the last 3 years (between 30 and 60%), and now, on the global uptrends in the economy and property markets, It won't escape the uptrend and would follow it too.

Euroland

smccarrick wrote: »

On top of Calina's excellent post- I would add that according to the Economist- our budget deficit accounts for almost 60% of total expenditure in 2009- and even allowing for the agreed 4 billion cuts in expenditure annually for 2010,2011 and 2012- we will still hit a national debt ratio of over 200% by 2020

Budget deficit and level of public debt have nothing in common with the residential property market. Yes, they should be cured, but they have no direct connection with the property market.

Euroland

professore wrote: »

Excellent, I would add one other item, demographics.
The baby boomers that peaked around 1975 that initially kick-started the demand for housing mostly have houses now. The following generation is not as large. Added to the fact that there was a wave of returning irish immigrants and in later years eastern europeans. None of these factors will be at play in the next 10 years or so. If anything demand will further be suppressed by emigration.

Last year was the highest baby boom in Ireland, and the young parents, awaiting the last 3 years for the property prices stabilisation, are now eager to buy something to have a place for growing their kids. Thousands of people had to postpone their property purchases for the last 3 years, and now when the bottom is near, it is the right time for them to buy, before the investors flock back into the residential property market, or it would be too late.

The_Conductor

Euroland wrote: »

Noncense. Analysing the national statistics trends you would immediately notice that Irish GDP will resume its growth at the end of 2009, while GNP growth will resume in Q1 2010.

God, you are optimistic. While I would be thrilled if you're right- I genuinely do believe you are not. You are extrapolating massively in an international context and presuming its valid to apply it to an Irish context. The fact of the matter is that Ireland, while not unique, is in a far worse position than almost any other country. Can you name any other country who are funding almost 60% of their gross expenditure from borrowings? In the 1980s- at least personal debt was at extremely manageable levels- we don't even have that cushion now though.