Charlesland Property Prices...

mjmorrisroe

Has anyone recently valued property in Charlesland & found they have slipped into negative equity? Thoughts/comments... Thank you.

cuddlycavies

I live in a 3 bed EOT. At peak I think the highest sold at €570 plus stamp duty. Ours cost €355 new. I think I'd struggle to get €430 now so do the maths. Some people really screwed. But I think EOT 3 beds will recover as they are family homes. The two beds are selling slow and I know some people have reverted to selling at their original cost price and still finding it hard to move.

darter

3-bed EOT with attic conversion on daft for €390K - 137 Charlesland Court. Will be lucky to get €355K.

Probably everyone in Charlesland - and all other developments built this century - are living in negative equity or close to it. Sale prices at auction - which are the only public prices known apart from the ludicrous asking prices - are at mid-2003 levels and are estimated not to return to peak tiger prices of late 2007 until 2030. But who's to know that - certainly not the financial "experts" who woefully underestimated Ireland's peril whilst raking in huge bonuses.

GingerDave

Its not just about the price of the house but the loan you took out, any top ups and how quickly you decided to pay it off. Pay off over 30 years you paying off your capital really slowly, pay over 20 years you really eat into it quickly.

For a 3 bed id reckon €300-350k + stamp is about right.(This = peak less 40% ish).This isn't going to change much over the next 10 years, may be once the economy stabilises in 2013 growth at inflation would be about right.

If its your home does negative equity matter? Well it could stop you moving on or out of the country if needs be. You are over paying on a larger amount of debt than you had to if you bought in the bubble, money that could have been put to better use may be.... (?)

I await investors in the estate to now come on this thread and try and talk things up. If they bought through debt, expecting capital appreciation and didn't off load before the burst of the bubble, they may be finding it difficult to sleep at night. If they bought forecasting rental yeilds of 12+% they will be hurting, due to falls in rents, but should be OK.

jobless

GingerDave wrote: »

For a 3 bed id reckon €300-350k + stamp is about right.(This = peak less 40% ish).This isn't going to change much over the next 10 years, may be once the economy stabilises in 2013 growth at inflation would be about right.

i disagree.... i reckon they will be selling for between 200 - 250 in two years time..... prices are falling by more than 1% a month and with two or three harsh budgets ahead and massive over supply there is nothing to sustain the current prices.... even peak - 40% prices!

cuddlycavies

Massive optimism here as always:rolleyes:

GingerDave

cuddlycavies wrote: »

I live in a 3 bed EOT. At peak I think the highest sold at €570 plus stamp duty. Ours cost €355 new. I think I'd struggle to get €430 now so do the maths. Some people really screwed. But I think EOT 3 beds will recover as they are family homes. The two beds are selling slow and I know some people have reverted to selling at their original cost price and still finding it hard to move.

If you bought at €355 at least you know you are probable in a better position than most.

250-300 = 4-5 times salary mortgage for some one on 60k a year....its feasible. Only time and the market will tell.

If you look back at pervious threads on this, those pessimistic a year or two ago would be seen as being optimistic now.

steve-hosting36

An easy calc is that whatever prices were at the peak, you can safeuly assume half that is what stuff is actually possible to shift at now.

If 570 euro at peak, assume 285k now.

jobless

where did you get this mind blowing calculation from ...

your not far off though!

loyatemu

Whatever the first phase of C Wood sold for (< 300k for a 3-bed?), I'd imagine prices will end up at least that low - tough break for anyone who bought the last phase of C Park, but as Gingerdave has said, if you're happy where you are living there's no point worrying about negative equity (unless you lose your job of course).

If 570 euro at peak, assume 285k now

not sure they've dropped that low yet - I know of at least 2 that sold earlier in the year for a good bit more than that... but its hard to tell with so little activity.

Prices in the rest of Greystones seem to be dropping slower than elsewhere, but they are still dropping.

cuddlycavies

As soon as things turn (and they will) ,The surplus of homes in this area is not as great as many imagine. People are still getting married. We have a young population. People want kids. People need family homes. This is a nice/great area. At the top of booms people can only see things going on for ever upwards and at the moment people can only see downwards. These things are cyclical and for people to speculate that recovery will take 10 years is just ridiculous.

Osvaldoc

Bubble price levels will not return in our lifetime.

With deflation in the Irish economy the levels of negative equity can only increase.:( We were conned by the vested interests who made us believe the mantra that property prices only increase.:eek:

cuddlycavies

I think you'll find with an energy crisis looming, inflation will be a key factor in most economies from next year onwards. Also bear in mind bubbles in the 80's in SE england and subsequent crashs and return to multiples of 80,s values. Things are cyclical. Cheer up.

loyatemu

cuddlycavies wrote: »

I think you'll find with an energy crisis looming, inflation will be a key factor in most economies from next year onwards. Also bear in mind bubbles in the 80's in SE england and subsequent crashs and return to multiples of 80,s values. Things are cyclical. Cheer up.

I don't think a return to bubble prices is anything to be happy about. Inflation will also lead to a rise in interest rates which are currently at an all-time low.

No-one really knows anything, but 10 years is not totally outlandish - look at this graph of the Japanese property crash - http://www.marketoracle.co.uk/images/2008/japan-house-prices--nov08.gif

cuddlycavies

loyatemu wrote: »

I don't think a return to bubble prices is anything to be happy about. Inflation will also lead to a rise in interest rates which are currently at an all-time low.

No-one really knows anything, but 10 years is not totally outlandish - look at this graph of the Japanese property crash - http://www.marketoracle.co.uk/images/2008/japan-house-prices--nov08.gif

Key difference with your example of Japan is that without a rescue package for the banks there, you had a ''zombie bank'' effect for 10 years. The NAMA plan sets out to avoid this. But as you say , no one really knows. In the wake of 9/11 people were being led to believe air travel would become outlandishly expensive. The Thai Tsunami would take 10 years to clean up. Sometimes a positive outlook is better than the constant pessimism that makes headlines.

darter

cuddlycavies wrote: »

Sometimes a positive outlook is better than the constant pessimism that makes headlines.

Reminds me of the final scene in Life Of Brian with the three of them singing Eric Idle's "Always look on the bright side of life... de de, de de, de diddly diddly de..."

YES, let's be optimistic, but also we must be realistic. Ireland has gone from being one of Europe's poorest countries to one of its richest to one of its most indebted (both personal and national) within half a generation.

And as someone asked a few months ago, now the party's over, what do we have? A few more roads, lots more houses priced at levels no-one can afford, 30% oversupply in hotel beds, prices still far too high, a culture of greed that is phenomenal, more administrators than doctors and nurses in the HSE, unions with a sense of entitlement that is far beyond affordable and realistic, actually everyone with a sense of entitlement that is far beyond affordable and realistic...

It's time for everyone, and I do mean everyone, to take off their jackets and roll up there sleeves and get this country back on its feet.

cuddlycavies

Here, here

GingerDave

darter wrote: »

YES, let's be optimistic, but also we must be realistic. Ireland has gone from being one of Europe's poorest countries to one of its richest to one of its most indebted (both personal and national) within half a generation.


It's time for everyone, and I do mean everyone, to take off their jackets and roll up there sleeves and get this country back on its feet.

+1

Ireland was statistically one of the riches countries in the world. Not difficult when you have multinationals employing 5 people to pump 100s of millions through one office for the 12.5% tax.

Ireland was never one of the wealthest countries in the world, we were just told we were and we believed it. Originally built on strong commercial export growth......then built on debt and selling property to each other. We need to get back to basics.

I am an optimist when I believe the property bubble will not return. Don't confuse a bubble with economic ups and downs they are totally different. At this stage of the bubble we are still at Denial, Panic is next year.

Lots of people don't want to hear this as they have too much exposure to one asset class.

Don't forget right now Ireland has to do something that no economy has every done before! It can't devalue its currency so it has to make its self cheaper...hence 4-5 years of budgets and cost cutting! Its a massive job, and it going to take along time.

I am optimistic, but there is no magic solution. We will come through it in the end no doubt...and better for it if we become less relient and obessed about property...................Charlesand property prices......what will be will be!

Osvaldoc

cuddlycavies wrote: »

I think you'll find with an energy crisis looming, inflation will be a key factor in most economies from next year onwards. Also bear in mind bubbles in the 80's in SE england and subsequent crashs and return to multiples of 80,s values. Things are cyclical. Cheer up.

The question is how long will the cycle be and will I live long enough to ride the next upturn? Thanks for your brave attempt to cheer me up from my negative equity depression but I fear that I may have bitten off more than I can chew this time. If only I had of listened to my old dad who warned me of the bubble long before it became fashionable and in doing so was expelled from Fianna Fail in 2002.

cuddlycavies

Theres over a years ''normal'' supply available. There has been a year and a half of inactivity while people hold off. Completions have all but stopped. The economy will turn 3rd quarter next year. Prices will recover on housing and significantly rise in two years. You have to ask, When things are good, would you pay €450K to live here in a 3 bed? The answer is yes you would and things will be good again.

Osvaldoc

cuddlycavies wrote: »

Theres over a years ''normal'' supply available. There has been a year and a half of inactivity while people hold off. Completions have all but stopped. The economy will turn 3rd quarter next year. Prices will recover on housing and significantly rise in two years. You have to ask, When things are good, would you pay €450K to live here in a 3 bed? The answer is yes you would and things will be good again.

I admire your optimism but alas I do not share it. The banks are no longer giving the size of loans that they did during the bubble period so I can't see many people getting anything near €450k levels.

They say that it takes the same amount of time for the inflated prices in a property bubble to unwind. That means that we have at least another 7 years before the market reaches the bottom.

So here am I stuck in negative equity hell with the ball an chain to a house I paid too much for. Why oh why did I not listen to my old dad?

steve-hosting36

The fact of the matter is that property here (and across the country generally) is worth around half of the peak prices. (According to the cso and other sources).

You can safely assume, with tough budgets and mortgage interest rates rising next year, as well as newly conservative banks, the market could well drop another 10% in the next year before any stability or 'bottom' is reached.

It could then take another 10 years for prices to get back to even two thirds of peak rates.

darter

Cuddlycavies, your reasoning would be valid if Ireland existed in its own Universe. Unfortunately, it doesn't, and there is global competition for virtually everything. Why is Dell leaving? Because they can operate much more cheaply in Poland even with higher corporate tax, and their staff - even being paid less - can have a higher standard of living as the cost of living is so much less.

I've lived in England, Scotland, Germany, Sweden, Canada, and now Ireland, and had long-term visits (>1 month) in U.S.A. and South Africa. Almost everywhere else in the world, the multiplier between renting and buying is about 200. That means, you take the monthly rent, multiply by 200, and you get the purchase price. Here is Ireland the multiplier was 500 to 1,000 during the height of the madness. So something was - and is - seriously out of kilter. Given that 3-bedroom houses are renting for around €1,200 to €1,500 in Charlesland, this would put a universal market value of around €250K-€300K on them, most certainly not €450K.

The property bubble has been so extreme that the fall has to be equally extreme. I bought a house in Canada, and in 25 years it has roughly trebled in value. In that same time, prices in Ireland went up a factor of almost 100! Madness, sheer madness.

As others have said, the end is nowhere near in sight for Ireland. It is for other European countries, such as Germany and France, as they didn't experience the bubble caused by property, and their economies are far more diverse than Ireland's.

We are all suffering from the delay in making the hard decisions much earlier than now. (Thanks Bertie!) We must make them now. And we must be realistic about the near-term future, or the pain will be dragged out over far too long a period.

If you are willing to pay €450K for a 3-bedroom, then I have a great deal on a bridge on Brooklyn for you!

steve-hosting36

The 150/200 rules is from late 2005 (in a Motley Fool article iirc). At the time, the average was 500-800, even in the states...

The challenge is that some homes will always command more (for reasons of setting, exclusivity, finish, desirability of area, etc) but it's a good 'general' rule of thumb.

darter

steve-hosting36 wrote: »

The 150/200 rules is from late 2005 (in a Motley Fool article iirc). At the time, the average was 500-800, even in the states...

The challenge is that some homes will always command more (for reasons of setting, exclusivity, finish, desirability of area, etc) but it's a good 'general' rule of thumb.

Yes, and we've all seen what's happened to the U.S. property market... It's now back to 200 or less.

The 200 rule predates 2005 by decades. I remember being told it in early-1980s.

Correct that yes of course there are markets that are prime for property capital growth rather than steady rental income return. London is an example of that. So there will be multipliers of 300 to even 500, but never ever 1,000!

Over 1/3 of the properties purchased this decade were as investment for the rental market - and that market is diminishing daily. Bad enough when it's your principle residence, but when you are in negative equity in an investment property, you are really screwed. I have heard than over 1/3 of Charlesland was bought for rentals - is that true?

loyatemu

darter wrote: »

I ishave heard than over 1/3 of Charlesland was bought for rentals - is that true?

http://www.prtb.ie/PublishedRegister2009/co_wicklow_09.htm

shows about 150 Charlesland addresses, so about 10% but there's probably a fair few unregistered properties also.

darter

Article in Irish Independent today about apartments in Newbridge that were going for €320K at the height of the madness in 2007 and are now available for €110K...

http://www.independent.ie/national-news/boom-buyers-seethe-as-units-now-three-for-price-of-one-1945377.html

An interesting editorial in Sunday's Home section of the Sunday Times (Irish version) about how only 20% of sellers are realistic and want to sell, and how estate agents have given up on the other 80% who are still living in la-la land.

Property reality is beginning to show itself, slowly but inextricably surely...

GingerDave

loyatemu wrote: »

http://www.prtb.ie/PublishedRegister2009/co_wicklow_09.htm

shows about 150 Charlesland addresses, so about 10% but there's probably a fair few unregistered properties also.

Wow....i didn't know there were so many investments in the estate. Most would have been bought for capital appreciation not yeild. Must say I have no feelings for them, they took a risk and it didn't work out.

There is only one way rent is going as well then for the next few years!

steve-hosting36

And dropping rentals means dropping capital prices too...

stevedublin

darter wrote: »

It's time for everyone, and I do mean everyone, to take off their jackets and roll up there sleeves and get this country back on its feet.

sounds great, I admit, ......but..... there are no jobs!

ciaran67

darter wrote: »

Reminds me of the final scene in Life Of Brian with the three of them singing Eric Idle's "Always look on the bright side of life... de de, de de, de diddly diddly de..."

YES, let's be optimistic, but also we must be realistic. Ireland has gone from being one of Europe's poorest countries to one of its richest to one of its most indebted (both personal and national) within half a generation.

And as someone asked a few months ago, now the party's over, what do we have? A few more roads, lots more houses priced at levels no-one can afford, 30% oversupply in hotel beds, prices still far too high, a culture of greed that is phenomenal, more administrators than doctors and nurses in the HSE, unions with a sense of entitlement that is far beyond affordable and realistic, actually everyone with a sense of entitlement that is far beyond affordable and realistic...

It's time for everyone, and I do mean everyone, to take off their jackets and roll up there sleeves and get this country back on its feet.

Optimism indeed. We who rent, are quite optimistic about it falling even more!