When average house price is €150k

ArraMusha

When do you think the average house price will be 150k.
(Not sure what the criteria is for determining an 'average house'.
Possibly 3 bed semi within 10miles of a town/city centre.?)

Would 1 year be realistic?

AARRRGH

Maybe 24 months, however it's hard to say as the government and the banks will do everything possible to prevent this from happening.

For example, BOI have already limited their FTB loans to houses worth more than 180k. In other words, they are trying to force prices to remain at 180k and above.

ArraMusha

AARRRGH wrote: »

Maybe 24 months, however it's hard to say as the government and the banks will do everything possible to prevent this from happening.

For example, BOI have already limited their FTB loans to houses worth more than 180k. In other words, they are trying to force prices to remain at 180k and above.

Thanks AARRRGH for that info.

Surely BOI shouldn't be able to do this. The market should find its own value.

mrgaa1

correct. Also that figure is based around Dublin - outside of Dublin its 125k. Complete joke and there will be war with the banks. If a developer decides to sell at 120k somewhere in the country and the banks won't give mortgages if its under 125k then you can safely say the developer will not take it lying it down.

Freddie59

AARRRGH wrote: »

For example, BOI have already limited their FTB loans to houses worth more than 180k.

That HAS to be illegal. WTF is the Government doing about this?:mad:

twanda

Freddie59 wrote: »

That HAS to be illegal. WTF is the Government doing about this?:mad:

Most likely they are turning a blind eye and hoping that BOIs plan will work...:rolleyes:

Blackjack

Freddie59 wrote: »

That HAS to be illegal. WTF is the Government doing about this?:mad:

I doubt it - I'm sure there is a mimimum cost to BOI of offering a mortgage, below a certain price that the administration of one is not profitable.

BOI aren't the only show in town, so there are bound to be other providers who can assist if someone is looking for a Mortgage below BOI's limit.

Senna

ArraMusha wrote: »

When do you think the average house price will be 150k.
(Not sure what the criteria is for determining an 'average house'.
Possibly 3 bed semi within 10miles of a town/city centre.?)

Would 1 year be realistic?

I think the National average house price stated by the PTSB / ESRI Index includes all houses/apartments etc in all areas of the country, but they do normally break it down by Dublin / Rest of country. As for when it will hit 150k (nationally) i'd say 2012/3.

BOI have already limited their FTB loans to houses worth more than 180k. In other words, they are trying to force prices to remain at 180k and above.

I wouldn't be too worried by attempts to put a floor on house prices, it wont work. The market determines the price and anything FF or the banks do may delay the inevitable but wont stop it for happening. BOI are almost out of the FTB;s market now anyway, despite what they say, so it wont mater.

Agent J

I dont mean to sound harsh but do you really expect a Government who came up with NAMA to do something about an Irish bank trying to put a floor on house prices?

Freddie59

Agent J wrote: »

I dont mean to sound harsh but do you really expect a Government who came up with NAMA to do something about an Irish bank trying to put a floor on house prices?

Sigh.:( Says it all really, doesn't it. What a basket case country. Free market my arse.

jetski

ArraMusha wrote: »

When do you think the average house price will be 150k.
(Not sure what the criteria is for determining an 'average house'.
Possibly 3 bed semi within 10miles of a town/city centre.?)

Would 1 year be realistic?

It wont happen.

Taken the average price for a house nationally in July 2009 was €238,828 down from €311,078 in February 2007, which means its taken so far 2 years and 5 months to drop the average price by 72k.

Take a look at this and you will find the mean of price reductions is in decline from its peak in jan 2008 so your looking at a much longer time to reach that wishfull thinking €150k even if the declines continued.

AARRRGH

jetski wrote: »

It wont happen.

Taken the average price for a house nationally in July 2009 was €238,828 down from €311,078 in February 2007, which means its taken so far 2 years and 5 months to drop the average price by 72k.

Take a look at this and you will find the mean of price reductions is in decline from its peak in jan 2008 so your looking at a much longer time to reach that wishfull thinking €150k even if the declines continued.

The country is totally ****ed though, and we really only are at the beginning.

I think it will happen.

apolo

In Japan in 1989 the crash caused propety prices to fall by 90%, also people have a habit of dying, so estates have to be devided up, houses have to be sold as insurance companies will not insure vacant properties. So the prices have to fall. So don't buy now just wait. And remember 60% of houses do not have mortgages. Sorry for the good/bad news. I was left a house in 1986 in Dublin, auctioneers said the banks would not give a loan on the house, could not afford to keep, nor do it up for rent, afraid the house would be set on fire and damage neighbours house, wife found a buyer for £10,000 old money. This is the future! me thinks.

Senna

jetski wrote: »

It wont happen.

Taken the average price for a house nationally in July 2009 was €238,828 down from €311,078 in February 2007, which means its taken so far 2 years and 5 months to drop the average price by 72k.

Take a look at this and you will find the mean of price reductions is in decline from its peak in jan 2008 so your looking at a much longer time to reach that wishfull thinking €150k even if the declines continued.

I think its wishful thinking on your behalf. An asset bubble doesn't bottom out in a couple of years, AFAIK it averages 7 years from peak to trough., we're really only 2-3 years in, if you think the end is near you have another think coming.
Prices will continue to drop and year on year drops will probably be smaller by next year and thats mainly because we had such large drops at the start of this year. Its going to be long and drawn out, but dont assume we're anywhere near bottom. €150k is more than 4 times average wage, there's no reason (other than "bury your head in the sand" hope) to see how an economy like Ireland can support a National average house price in excess of National average wage multiples.

uberwolf

Senna wrote: »

€150k is more than 4 times average wage, there's no reason (other than "bury your head in the sand" hope) to see how an economy like Ireland can support a National average house price in excess of National average wage multiples.

I don't have the answer, so I'm not trying to be as smart as I sound but why is that not true of the UK for example?

Avrg House price £224K

Avrg Salary c.£25K

jhegarty

apolo wrote: »

In Japan in 1989 the crash caused propety prices to fall by 90%

Japan reached a level of madness far in excess of Ireland. At the peak flats were selling for around $100k a square foot in parts of Tokyo.

I think mortgages were up to 90 years.

We have still have falling to do , but Japan is not the model.

Senna

The UK's market might seem to have stabilised but if you read their forums, most believe its just a dead cat bounce. Theirs is out of kilter also, but they can devalue their currency, leading to inflation and wage inflation. Their house prices wont drop by as much, but their wages will rise to meet the average house price. The UK are well used to Property fluctuation, they'll have shorter sharper adjustments with wages catching up after a few years. Ireland cant devalue our currency, likewise the future holds wage deflation, not inflation.

Blackjack

jhegarty wrote: »

Japan reached a level of madness far in excess of Ireland. At the peak flats were selling for around $100k a square foot in parts of Tokyo.

I think mortgages were up to 90 years.

We have still have falling to do , but Japan is not the model.

agree with that - there has been a lot of talk about Japan being comparable, personally I reckon the Japanese example is a bit like Ireland's but on Steroids.

jhegarty

Senna wrote: »

but they can devalue their currency,

They basically have already. Sterling is down about 33% over the last two years , that takes a lot of heat out of a crash.

stepbar

uberwolf wrote: »

I don't have the answer, so I'm not trying to be as smart as I sound but why is that not true of the UK for example?

Avrg House price £224K

Avrg Salary c.£25K

A friend of mine is purchasing a 3 bed house in the north for £130k (off the plans). The average in the north for a similar type property is £151k.

You know the saying about stats - "Lies, damm lies and statistics"

jetski

Senna wrote: »

I think its wishful thinking on your behalf. An asset bubble doesn't bottom out in a couple of years, AFAIK it averages 7 years from peak to trough., we're really only 2-3 years in, if you think the end is near you have another think coming.
Prices will continue to drop and year on year drops will probably be smaller by next year and thats mainly because we had such large drops at the start of this year. Its going to be long and drawn out, but dont assume we're anywhere near bottom. €150k is more than 4 times average wage, there's no reason (other than "bury your head in the sand" hope) to see how an economy like Ireland can support a National average house price in excess of National average wage multiples.

It averages 7 years from peak to peak prices. so it may well take 4 years to get there.

Here is a nice 3 bed semi for 4 times the average wage?

Tech3

jetski wrote: »

Here is a nice 3 bed semi for 4 times the average wage?

Have a look at the sitting room. Narrow and small.

MG

The Bank of International Settlements showed some data a few years back that on average busts tend to last as long as booms. Just depends when you think the boom started I suppose. Unless govt supports are pulled suddenly from the market, the bottom will only be found slowly. People are very slow to face reality so prices are dropping slowly and in stages even though nothing is selling.

gurramok

jetski wrote: »

It averages 7 years from peak to peak prices. so it may well take 4 years to get there.

Here is a nice 3 bed semi for 4 times the average wage?

Drogheda - population 35,000, 35miles north of Dublin. A commuter town.

What is the average wage? It is certainly NOT 46k by your calculations.

j4vier

i do think that boi plan to keep houses above 180k ,wont work unless other banks do the same..otherwise there ll be loads of competitors taking all the customers that boi wont take..

Dirk Gently

j4vier wrote: »

i do think that boi plan to keep houses above 180k ,wont work unless other banks do the same..otherwise there ll be loads of competitors taking all the customers that boi wont take..

In reality though there's only a couple of banks lending at the moment. If boi dont lend to you you need to go to aib or ebs. Your chances aren't great tbh. It is a signifiant move that will artifically inflate some properties purely because not many others are actually lending.

jetski

gurramok wrote: »

Drogheda - population 35,000, 35miles north of Dublin. A commuter town.

What is the average wage? It is certainly NOT 46k by your calculations.

No, but surly you dont expect to pay asking?

OMD

stepbar wrote: »

A friend of mine is purchasing a 3 bed house in the north for £130k (off the plans). The average in the north for a similar type property is £151k.

You know the saying about stats - "Lies, damm lies and statistics"

Absolutely. Statistics based on averages over an entire area can never be as useful as some info you get down the pub. :rolleyes:

gurramok

jetski wrote: »

No, but surly you dont expect to pay asking?

No. What's it worth? No-one knows but we have an idea. Its alot lower than 180k.
For average wage, its a good question. Its 26kstg in the UK for everyone http://news.bbc.co.uk/1/hi/8151355.stm

Median wage is a better measurement.
Median wage in UK is 25kstg for the fulltimers only. Here, i'd hazard maybe 30k for a median or 35k for an average. Agree maybe its around 30-35k? (and falling!)

So 35k x 4 = 140k. A commuter towns salary is lower than a major city so 140k is still overpriced. If I was on the look in Drogheda for a house like that, it maybe worth 100k to me at max.

OMD

gurramok wrote: »

Median wage is a better measurement.
Median wage in UK is 25kstg for the fulltimers only. Here, i'd hazard maybe 30k for a median or 35k for an average. Agree maybe its around 30-35k? (and falling!)

.

Obviously if you are using median wage you also have to use median house price. I don't know what the median price of property is in Ireland, but I would imagine that no more than wages, it is lower than the average.

mrgaa1

are we not looking at equations that can't work? Is there any country in the world where a ratio such as x times the median/average wage equals average house price? Are there countries that have similar equations?
I don't think there is any equation that could work? if there was would that not be a touch of communism?:rolleyes:
I don't think any government would set such an equation so speculation about this equation or that equation is like asking how long is a piece of string as you look through the smoke?
Supply and demand dictates costs of most commodities? If a gallon of petrol is €5 in Ireland why isn't it €5 in USA, Canada, France, Germany etc... different circumstances in all areas.
So to say that a commodity is worth x based on a calculation using y times a certain number doesn't work and can't work.

UK average house price is here - http://www.rightmove.co.uk/news/house-price-index/november-2009 £226k or approx €250,000
So based on a previous post its 10 times the median salary. So in our case using the same calculation based on the same info it would mean €350,000 for average house price which is not sustainable.

In the north average house price is £164k - http://news.bbc.co.uk/1/hi/northern_ireland/8362940.stm average wage is £26k http://www.payscale.com/research/UK/State=Northern_Ireland:_Belfast/Salary which is 6 times the average wage

The north is probably a closer template to work to given that the north and south is heavily weighted towards public servants - particularly the north.