When average house price is €150k

gurramok

One million earn under 22k pa.
http://www.independent.ie/national-news/millionaire-earners-to-carry-7pc-of-tax-burden-1951188.html

66% earn under 35 pa.
http://www.boards.ie/vbulletin/showpost.php?p=63041551&postcount=26

If we are using 4x or 5x, its blatantly obvious the median house price has to tumble and the average as it is now is still far too high for the numbers of units out there with too few buyers who can afford them.

Of course, throw in the factors such as double incomes, high unemployment, private debt levels(car loans, bank loans, credit cards debt), emigration and those who would be in council housing, its still no justification for the present high price level so the only way is down.

dotsman

asdasd wrote: »

I think the accurate measure is median house price to median wage. not average. the median is not affected by high or low earners.

But, although we don't want the low earners included (as they don't buy property*), we do want the high earners (as they do!*)

asdasd wrote: »

The future may bring higher interest rates. Just saying. Ireland's property will reach it's nadir when interest rates go high, and the government has dried the marrow from the bone in tax increases.

True, but that's why I chose 5-year fixed. If you want to stretch to a ten-year fixed, it's only a few quid extra. Trying to predict interest rates after that (or value property based on them) is impossible.

gurramok wrote: »

One million earn under 22k pa.
http://www.independent.ie/national-news/millionaire-earners-to-carry-7pc-of-tax-burden-1951188.html

66% earn under 35 pa.
http://www.boards.ie/vbulletin/showpost.php?p=63041551&postcount=26

Exactly, the bulk of those 1 million are not buying property anyway as they will be council housing, renting, living with the parents etc. So surely we should be looking at the average of those outside this bracket? Might be wrong but, based on you table posted above, this would give an average of circa €53K (might need to check those figures:D).

gurramok wrote: »

If we are using 4x or 5x, its blatantly obvious the median house price has to tumble and the average as it is now is still far too high for the numbers of units out there with too few buyers who can afford them.

Of course, throw in the factors such as double incomes, high unemployment, private debt levels(car loans, bank loans, credit cards debt), emigration and those who would be in council housing, its still no justification for the present high price level so the only way is down.

I agree, there are so many factors (too many to get an accurate picture). I'm not saying the €150K figure is wrong, I just think there is far more to calculating it, and from the little I've looked at it, I would guess the figure would be higher!

I just think that when trying to come up with figures, people need to look at the complex nature of what's involved and that it's not simply a set multiple of the industrial average wage. To be honest, the most accurate figure would be "How much can a home-owner or (realistically) aspiring home-owner afford and work back from that?


* Generalisations!

asdasd

True, but that's why I chose 5-year fixed. If you want to stretch to a ten-year fixed, it's only a few quid extra. Trying to predict interest rates after that (or value property based on them) is impossible.

YOu choosing a 5 year fixed is irrelevant. Housing is set at the margin. When interest rates go up the afordibility of the average ( or median) house falls, and thus the house price will fall. It doesnt matter that some people have a 5 year fixed, what matters is what FTB's can afford ( the margin).

The other reason this will happen is the massive amount of money taken out of the economy to pay for the present prediciment.

asdasd

might need to check those figures).

I can see ony 10% or so earing more than 50K.

dotsman

asdasd wrote: »

YOu choosing a 5 year fixed is irrelevant. Housing is set at the margin. When interest rates go up the afordibility of the average ( or median) house falls, and thus the house price will fall. It doesnt matter that some people have a 5 year fixed, what matters is what FTB's can afford ( the margin).

The other reason this will happen is the massive amount of money taken out of the economy to pay for the present prediciment.

True

asdasd wrote: »

I can see ony 10% or so earing more than 50K.

I'm getting 35% (Approx 447K/1261)

gurramok

dotsman wrote: »

Exactly, the bulk of those 1 million are not buying property anyway as they will be council housing, renting, living with the parents etc. So surely we should be looking at the average of those outside this bracket? Might be wrong but, based on you table posted above, this would give an average of circa €53K (might need to check those figures:D).

If we do, we should exclude all council housing from the market.(a huge chunk and mainly urban)

Still if we go by that criteria, one must ask about the current high open market price of such housing as lets face it in the real world(yeh PC brigade ), those earning more than 50k are hardly going to plump for council housing.

mrgaa1

The housing market should stabilise in 2011, but no meaningful recovery is likely before 2014, according to economist Dr. John McCartney. Based on his premise that natural cycles underpin all commercial and residential property markets, McCartney told an audience of prominent business leaders in Waterford how these past market cycles provide the clearest foresight into what is likely to happen in the Irish property market over the next decade.

He said that research on property markets across the world shows that they work in cycles. By definition, that means that Ireland will ultimately come out of this property led slump. However, due to the severe economy recession, the recovery will be slow.

However, he said that Ireland's property market's recovery is not imminent as he predicted with regards to commercial property, a recovery is likely from around 2014, with the market building to its next peak in 2019.

bangersandmash

Mrgaa1 it might be worth giving the original source for that text - i.e. the press release from The Irish Construction Industry website.

http://www.irishconstruction.com/page/2398

asdasd

He said that research on property markets across the world shows that they work in cycles. By definition, that means that Ireland will ultimately come out of this property led slump. However, due to the severe economy recession, the recovery will be slow.

Economists get my goat. Wheres the science there? The specific situation in Ireland needs to be addressed... surely.

we get more economic truth on these forums.

oceanclub

mrgaa1 wrote: »

The housing market should stabilise in 2011, but no meaningful recovery is likely before 2014, according to economist Dr. John McCartney.

You forgot to mention he's head of research for an estate agent (Lisney).

I'm sure it just slipped your mind.

Even as late as 2007, he was claiming that Dublin house prices would "ride out the storm" and start going back up:

http://www.independent.ie/business/house-price-rises-are-slowing-but-should-ride-out-the-storm-42932.html[/QUOTE]

And here:

http://www.daft.ie/report/john-mccartney

as buying becomes relatively more attractive, house prices should gain renewed support

So, based on his optimistic track record, if he's claiming that prices won't stabilise 'til 2011, I'm assuming it won't happen til a few year's later.

P.

_Kooli_

asdasd wrote: »

Economists get my goat. Wheres the science there? The specific situation in Ireland needs to be addressed... surely.

we get more economic truth on these forums.

LOL

I dont think we get truth from either source tbh. Both these forums and "real" Economists are just guessing all the time.

gurramok

_Kooli_ wrote: »

LOL

I dont think we get truth from either source tbh. Both these forums and "real" Economists are just guessing all the time.

Difference between an economist paid by an estate agent and one who is actually independent.

You're a brand new user of boards.ie, perhaps you should do some research before spouting about guessing on forums here.

bangersandmash

oceanclub wrote: »

You forgot to mention he's head of research for an estate agent (Lisney).

I noticed that too. To be fair, he seems to be a former employee of Lisney. Not sure where he works now.

_Kooli_

gurramok wrote: »

Difference between an economist paid by an estate agent and one who is actually independent.

You're a brand new user of boards.ie, perhaps you should do some research before spouting about guessing on forums here.

Why?
Are you saying people here are not guessing?
Ive read a lot of your posts and i can say there is a lot of selective facts in them alright. In fact you're quite famous on boards for having blinkers on. But i dont hold that against you. Just be aware that its only our amateur opinions expressed on boards. They are not expert opinions.

bangersandmash

_Kooli_ wrote: »

Just be aware that its only our amateur opinions expressed on boards. They are not expert opinions.

I think that's a given. Anybody who takes financial/legal/medical advice from boards in place of consulting an expert needs their head examined.

But does a construction industry PR release, an estate agency report, or a property advertorial constitute expertise?

Put it like this. If I wanted to buy a particular car, I might ask for advice on boards and take this advice into consideration. I would also read reports by experts on the safety of a particularly make/model of car. I would test drive the car at a garage. But I would probably discount the advice of the dealer telling me that it's a great car. He may know more about cars than a random poster on boards, but his judgement is likely to be compromised because it's his job to sell me a car.

asdasd

But i dont hold that against you. Just be aware that its only our amateur opinions expressed on boards. They are not expert opinions.

I have a masters in Engineering and Leaving Cert economics ( which is really all you need).

Ecomomics is not a science. Firstly it has ( clearly) no predictive powers. Secondly the "good" economists dont rail in the "bad" ones working for the estate Agents.

So am I better than the experts. Yes I am. I have posted on these boards long enough to prove that. Check it out.

Here is the argumment from Dr. John McCartney in April 2007 - a mere 2 years and 5-6 months.

To begin with, all of the demographic factors that drive the demand for housing remain positive. New Census figures show that Ireland's population is growing by more than 2pc per annum, and this clearly adds to our housing requirement.

The "democgraphic factors" were a total myth. It was obvious to boards sceptics that immigrants were coming because of the boom , which was in turn fueled by credit, which in turn fueled the construction sector, which in turn was 20% of the economy, and hired most of the immigrants. Demographic factors could not continue. I said as much. So did guarramok. And others.

And we all didnt put our money where out mouth was. And I now sit in no debt, and with savings approaching a 6 figure in sterling.

So were we better than the experts? ? Yes, we were. And it wasnt "guesswork" either.

ntlbell

Because all the experts have done such a great job so far

What experts?

the bankers?

the savvy housing investors?

the EA's ?

the economists?

Bravo.

asdasd

Nous sommes les Experts!!

gurramok

_Kooli_ wrote: »

Why? Are you saying people here are not guessing?

Because you assert that people who stated economic stuff are just ahem guessing when in fact some posters have stated the truth over the years.

Hence do some research as you're new to come to that conclusion of yours.

_Kooli_ wrote: »

Ive read a lot of your posts and i can say there is a lot of selective facts in them alright. In fact you're quite famous on boards for having blinkers on. But i dont hold that against you. Just be aware that its only our amateur opinions expressed on boards. They are not expert opinions.

Stalking me since Oct '09?

Some people here have been proved right on economics than the likes of an estate agent paid economist hence the usual posters can be trusted in their opinions.

Famous? I take a bow, thank you. You are only here for one month and say i'm famous, funny that.

domcq

asdasd wrote: »

And we all didnt put our money where out mouth was. And I now sit in no debt, and with savings approaching a 6 figure in sterling.

Clearly you're a roaring success...

mariaalice

I'll tell you what ...when you can buy a house in either Malahide or Greystone for 150grand ...I'll buy two!

asdasd

Clearly you're a roaring success...

Not saying I am, although I intend to double my savings this year if things go according to plan. That said I started from and nothing and it is better than being 200EK in debt, like many an Irish person my age. Most, as far as I recall. I'm 34.

Of course all that savings would have been seen as fodder for a deposit by banks, and I had to beat them back.

_Kooli_

ntlbell wrote: »

Because all the experts have done such a great job so far

What experts?

the bankers?

the savvy housing investors?

the EA's ?

the economists?

Bravo.

Nobody said any of them did a good job.

Or did they play the tiger better than any of us?

Who is most well off since the boom/crash? They are.

Bankers are loaded.

Economists are loaded - more so now than before - like pop stars.

EAs are loaded - assuming they bailed out in time. Just the stupid ones left.

Savvy (ones who offloaded) housing investors are loaded now.

ntlbell

_Kooli_ wrote: »

Why?
Are you saying people here are not guessing?
Ive read a lot of your posts and i can say there is a lot of selective facts in them alright. In fact you're quite famous on boards for having blinkers on. But i dont hold that against you. Just be aware that its only our amateur opinions expressed on boards. They are not expert opinions.

He's famous for having blinkers on?

He's also "famous" for giving out excellent well thought out advice and probably saving people a lot of money, I know in a lot of situations he's opened my eyes and lots of others.

what expert over the last few years do you rate?

how do those opinions compare?

hmm

ntlbell

_Kooli_ wrote: »

Nobody said any of them did a good job.

Or did they play the tiger better than any of us?

Who is most well off since the boom/crash? They are.

Bankers are loaded.

Economists are loaded - more so now than before - like pop stars.

EAs are loaded - assuming they bailed out in time. Just the stupid ones left.

Savvy (ones who offloaded) housing investors are loaded now.

so you're rating the value of the opinion on the size of there bank balance?

if an EA is loaded, is it from giving out good sound advice?

asdasd

Bankers are loaded.

Economists are loaded - more so now than before - like pop stars.

EAs are loaded - assuming they bailed out in time. Just the stupid ones left.

They are loaded because they gave out bad advice, counteracted in these boards.

I personally think that class action suits would be a way forward here. That is, if people can show that they got bad advice from experts then they should be able to sue.

ntlbell

asdasd wrote: »

They are loaded because they gave out bad advice, counteracted in these boards.

I personally think that class action suits would be a way forward here. That is, if people can show that they got bad advice from experts then they should be able to sue.

It was usually in the way of

"and what about another 50k on top of the 400k for a nice new kitchen? we can throw in 70k for an X5?"

get it while it's hot

_Kooli_

ntlbell wrote: »

so you're rating the value of the opinion on the size of there bank balance?

if an EA is loaded, is it from giving out good sound advice?

I mistrust EAs as much as the rest of the tag team here.
What i was getting at is that those groups have made more from the celtic tiger than anyine else. You can hardly call the ones that made the money and then removed themselves from harm stupid - even if they were playing on others greed.

asdasd

What i was getting at is that those groups have made more from the celtic tiger than anyine else. You can hardly call the ones that made the money and then removed themselves from harm stupid - even if they were playing on others greed.

No-one calling them "stupid" we are saying that they are corrupt.

As for how smart an EA would have been to make money during the boom. About as smart as a monkey. You could've hired a two year old.

You tend to make the rather silly point that making money = smarts. I remember arguing with someone that Dunnes buyout of the BallsBridge was stupid, his argument like yours was he was rich and I wasnt. Well he isnt now. And that sites a black hole.

In any case I really really urge you to ignore us all here and go out right now and buy a house at above asking prices. Please. Ignore us. go out and buy. Right now. Please. Talk to an EA with all the smarts and tell him you think prices will rise, and that you should offer more money. Go on now. Theres a good man.

i love schendenfreude.

ntlbell

_Kooli_ wrote: »

I mistrust EAs as much as the rest of the tag team here.
What i was getting at is that those groups have made more from the celtic tiger than anyine else. You can hardly call the ones that made the money and then removed themselves from harm stupid - even if they were playing on others greed.

I never stated anyone was stupid.

I simply asked you to provide me name's of "experts" you hold in high regard over the last few years.

what were they're opinions and how do those opinions match up to the laymans opinion here? guramok et al ?