Will house prices drop anymore?

bullpost

dtipp wrote: »

I wonder when it will start to embrace us?

When is NAMA going to start releasing properties on to the market? This year?

I wonder will they, say, put an entire apartment block up for sale - in individual lots? Sure how else could they do it?

I'd say if its individual lots they'll be busy boys and it'll cost us an arm and a leg?

ZYX

ei.sdraob wrote: »

i didn't vote for them, and neither did i get involved in property gamble

Well if you voted for FF, PDs, Greens or Labour you are responsible for supporting the FF government over last number of years. Also the majority of independent TDs have supported FF in government. Likewise if you didn't vote at all. Also if you voted FG you were voting for very similar policies as regards property. You are probably one of the very few not responsible.

ei.sdraob wrote: »

i did buy a house recently with no debt involved so whatever way prices go dont matter to me, rather a nice large house in area i want than money in a bankrupt bank guaranteed by a bankrupt government

That sounds like a strange thing to do when you can earn more money putting your money on deposit than you would pay on a mortgage.

ei.sdraob

ZYX wrote: »

Well if you voted for FF, PDs, Greens or Labour you are responsible for supporting the FF government over last number of years. Also the majority of independent TDs have supported FF in government. Likewise if you didn't vote at all. Also if you voted FG you were voting for very similar policies as regards property. You are probably one of the very few not responsible.

your right they are all one worse than the other

I stayed out of property and saved up, seemed like sensible thing to do at time, and I was proven correct

now i have a terrible feeling about NAMA and i hope im proven wrong with time as otherwise i can see alot (more) our taxmoney being wasted

ZYX wrote: »

That sounds like a strange thing to do when you can earn more money putting your money on deposit than you would pay on a mortgage.

let me highlight you something you missed

me wrote:

i did buy a house recently with no debt involved

no mortgage no debt,
bought in cash, the old fashioned way
its not an investment but a place to live (and in my case also work)

would you keep a 6 figure deposit in any of the irish banks?
or get a nice big house + some land to live in that dropped to 4x your earnings

ZYX

ei.sdraob wrote: »

now i have a terrible feeling about NAMA and i hope im proven wrong with time as otherwise i can see alot (more) our taxmoney being wasted




let me highlight you something you missed


no mortgage no debt,
bought in cash, the old fashioned way
its not an investment but a place to live (and in my case also work)

would you keep a 6 figure deposit in any of the irish banks?
or get a nice big house + some land to live in that dropped to 4x your earnings

It is just if you put your savings in the bank and borrowed the money for the house then it would cost you less. You have decided not to save money. That is all I am saying. Lets hope those in NAMA are more financially astute.

ei.sdraob

ZYX wrote: »

It is just if you put your savings in the bank and borrowed the money for the house then it would cost you less. You have decided not to save money. That is all I am saying. Lets hope those in NAMA are more financially astute.

I understand and did refuse mortgage from the bank manager (the same bank who was trying to push "investments" in shares in 2008 before it went south)

I did the numbers in short term yes it would save money, but in long term you have threat of large interest rate increases, and as I said i don't trust any of the Irish banks not to collapse (and then good luck getting your money) in meantime

the current occurrence of some savings accounts offering higher interest than mortgages is imho a blip

so no it would not have been better of, anyways its done now and buying in cash meant a quick hassle-free sale and being able to corner the builder (whose balls are being squeezed by the banks) into getting nice discount off the price (cost price)

dolliemix

ZYX wrote: »

Well if you voted for FF, PDs, Greens or Labour you are responsible for supporting the FF government over last number of years. Also the majority of independent TDs have supported FF in government. Likewise if you didn't vote at all. Also if you voted FG you were voting for very similar policies as regards property.

.

lol! Who's left then?

jmayo

testicle wrote: »

NAMA is taking over debt, not houses.

Ehh what is primarily securing those debts ?
How much of the debts are being serviced ?
How many of the borrowers are bankrupt ?
Most of us have fair idea of the answer leading us to believe that NAMA is going to become a property management company.

D3PO wrote: »

Yes the same way a bank takes over a house if they take on a reposession case and win. That doesnt mean when they give you a mortgage they are taking on a house though ...

Well a bank can have the deeds until final payment ?
Actually in a way they are taking on the house becuase if you fail to pay they are left with the house.

ei.sdraob wrote: »

its in NAMAs stated interest to hold back as much property from the market over a period of time, hence controlling supply and preventing prices from correcting

that is highly relevant to the discussion on the direction of house prices and property/land in general

ei.sdraob, I think with some posters you are wasting your time here, as well as over in politics.

beeno67 wrote: »

And you think that is what he meant when he said

????

smccarrick wrote: »

On a related note- its NAMA's stated intention to divest itself of its portfolio over a 10 year period- possibly returning zoned lands to agricultural purposes or demolishing estates particularly in rural areas.

As very little of the property they intend on taking on- is actually on the open market anyhow- drip feeding units over time should by rights have a minimal impact on the residential housing market. Its thought NAMAs main impact may in fact be in commercial properties- think of all those out of town developments in relatively low density locations- they'll be prime fodder......

Would you mind telling a few people that they are talking about 10 years not 20 to 50 years ?

If you return zoned land, bought as development, to agricultural use then you are knocking huge chunk off it's value.
Thus NAMA will make huge loss on the sale and it will come nowhere near the amount they paid for the loan (probably amount outstanding on the loan), nevermind what was it's original book value.

Actually there has been very little released over last 2 years, so we are stockpiling development land and there is no demand as there is already huge supply overhang.
Outside of residential, look at all the commerical and retail space lying empty.
Those are ones that really show how bad our economy is performing.

D3PO wrote: »

its NAMA's stated interest to manage the loans in their portfolio number 1. Managing property or assets taken on by defaults is secondary to that, and if that happens then quite rightly they will drip feed.

Poople need to think of NAMA as a business, bucasue thats essentially what it is and as such it will take financial decisions to protect its (ie the taxpayers investment)

now boo hoo if that in some way manipulates prices but getting the financial system back into order in this country is the end goal.

P.S I wouldnt have gone with NAMA but thats what we have so like it or not we have to embrace it.

Except this could be manipulating the prices in a massive way.
It is not like an incentive to buy, it will be more like an incentive to do nothing.
Why shoudl any investor or property fund enter the market if they are convinced that the prices are being held high artifically by this massive state condoned property management company ?

smccarrick wrote: »

EU Commission warns Ireland that its economic forecasts are irrationally rosy, and the current austerity drive, which forecasts an additional 3 billion being cut from the budget in both 2011 and 2012, is patently insufficient......

http://www.irishtimes.com/newspaper/breaking/2010/0317/breaking36.html

And thus we will have to have more top up budgets as it becomes apparent that once again Dept. of Finance figures are mythical.

dolliemix wrote: »

lol! Who's left then?

Guess.
Here is hint: They had friends who were experts in property demolition a few years back

shoegirl

In fairness, a lot of people voted Greens on the assumption that they were diametrically opposed to the FF construction industry policies. The Greens coalition was absolutely unprecedented and unexpected and shocked nobody more so than (now ex) green voters themselves.

The number of people who genuinely opted out of the housing market as an idealogical position are indeed few and far between, but you have to remember that even according to ERSI (here) there was significant evidence that spiralling rent prices was triggering a lot of panic buying because people were genuinely struggling to afford their rents in the private rented sector.

That left a lot of people stuck between a rock and a hard place.
Add to that the fact that there has been very little real help for private tenants beside a slowly evolving regulatory and compliance framework, albeit for very basic standards.

Sure there was also huge social pressure on some people to buy but we are not exactly known as a people for having great arithmetical skills here!

dolliemix

jmayo wrote: »

Guess.
Here is hint: They had friends who were experts in property demolition a few years back

mmm I'm still none the wiser!

AARRRRGH

ei.sdraob wrote: »

I understand and did refuse mortgage from the bank manager (the same bank who was trying to push "investments" in shares in 2008 before it went south)

I did the numbers in short term yes it would save money, but in long term you have threat of large interest rate increases, and as I said i don't trust any of the Irish banks not to collapse (and then good luck getting your money) in meantime

the current occurrence of some savings accounts offering higher interest than mortgages is imho a blip

so no it would not have been better of, anyways its done now and buying in cash meant a quick hassle-free sale and being able to corner the builder (whose balls are being squeezed by the banks) into getting nice discount off the price (cost price)

You obviously thought rent was dead money.

ei.sdraob

AARRRRGH wrote: »

You obviously thought rent was dead money.

not at all lol

I realized that keeping large amounts in banks is "practically dead money" and asking for trouble

I wouldn't trust those crooks with a cent anymore

Senna

Dont listen to them ei.sdraob, buying a home without a mortgage was smart, cant believe anyone would question you over it, just because you could have worked in a tiny margin. Even thought most people realise the foolishness of viewing a home as a money making exercise, its easy to see that mentality still remains in some.

Amhran Nua

AARRRRGH wrote: »

What im saying is that you cannot predict how things will be 10 years down the line in anything. Its impossible.

Sure, but you can make an educated guess, especially in a market which is usually slow to change, like property. Given that the primary reason for the bubble was artificial investor demand created by extremely loose credit conditions, its likely that after reaching bottom (14 to 16 times annual rent for an area I'd say), houses will grow in line with inflation, more or less. This is because the banks will be a long, long time forgetting the next few years. It took 60 years for Glass-Steagall to be repealed the last time, and only ten years after that the global economy gets wiped out by them again. The only reason property prices might rise any faster are an increase in demand from some unknown quarter, or a rapid curtailment of supply, which NAMA is incapable of providing.

AARRRRGH wrote: »

Anyone who can predict events 10 years down the line would be so rich and off having a great time on their riches that they wouldnt have time to be posting on boards

So how would you capitalise on the above scenario? I don't think you can short property prices.

Freddie59

ei.sdraob wrote: »

not at all lol

I realized that keeping large amounts in banks is "practically dead money" and asking for trouble

I wouldn't trust those crooks with a cent anymore

I'm with you 100%. Right decision all the way. FFS who would take out a mortgage when they have cash to buy. We had the bones of €200k on deposit for all of 2009. What a sweat.:(

Thankfully we got a bargain and got (literally) out of jail. Good call man.:)

dolliemix

dolliemix wrote: »

mmm I'm still none the wiser!

The only party you didn't mention used to be very supportive of a certain terrorist group up north!

Amhran Nua

Amhran Nua wrote: »

The only reason property prices might rise any faster are an increase in demand from some unknown quarter, or a rapid curtailment of supply, which NAMA is incapable of providing.

Such a situation will only occur in (percieved good) suburbs within the M50 in Dublin or close to the city centre elsewhere if there is a dramatic rise in fuel prices. For example if a commuter spends €100 a week on fuel driving in to Dublin from the middle of nowhere and the same commute from Walkinstown for example is €20, then in thery he could afford to pay an extra €320 a month on the mortgage of a house in the city.
Double the cost of fuel and that same person may be unable to afford to travel to work anymore unless he moves to the city.

This paves the way to a two tier market, decent suburban housing being sold at 3-4 times annual salary and rural houses being about half that.

The two tier market will occur regardless of fuel costs, but it will be more pronounced if fuel costs do go through the roof. Potential buyers will look at the costs of commuting first! I suspect that there are many who bought shoeboxes in the sticks who didn't factor the commuting costs in when they jumped in and bought the house.

Amhran Nua

Deleted User wrote: »

Double the cost of fuel and that same person may be unable to afford to travel to work anymore unless he moves to the city.

The larger economic effects of such a fuel price rise outside of wage inflation would make the mortgage bubble look like a five euro flutter down the bookies, if it were a long term phenomenon.

Amhran Nua

Amhran Nua wrote: »

The larger economic effects of such a fuel price rise outside of wage inflation would make the mortgage bubble look like a five euro flutter down the bookies, if it were a long term phenomenon.

True, Deflation + oil prices rising = bad news!

AARRRRGH

Amhran Nua wrote: »

So how would you capitalise on the above scenario? I don't think you can short property prices.

My point is that you cant capitalize on it unless you GUESS. Then its just gambling.
Because you definitely dont know whats going to happen.
Only fooling yourself if you think reading a graph is going to tell you what things will be like in 10 years.

Amhran Nua

AARRRRGH wrote: »

My point is that you cant capitalize on it unless you GUESS. Then its just gambling.

But if all guesses were equal, we wouldn't have bookies. What we're looking at is the wipeout of property as a revenue generating industry for at least a generation, probably more. Not that the revenue it generated in the first place was anything but the destruction of future productive earnings.

Atlantic Dawn

The houses NAMA will have loans based on have a limited unoccuppied shelf life where after this the house needs to be gutted and almost rebuilt as the piping will corrode and mould will set in, this time is around 2-4 years so if they don't sell them in this time there will be massive costs in making them habitable so they will need to panic sell around this time and this will flood the market.
More and more people are losing their jobs and when the ECB raises interest rates later this year all those struggling will be no longer able to afford their mortgages, this will flood the market.
Builders are not going to sit around building nothing for the next few years, they will start buying up cheap sites and building much cheaper houses that can now be built that there would be plenty of demand for, this will flood the market.

Houses prices are going only one way and that's down. I'd expect them to begin to settle around 35-40% off where they are now and that's being optimistic.

Atlantic Dawn

Atlantic Dawn wrote: »

The houses NAMA will have loans based on have a limited unoccuppied shelf life where after this the house needs to be gutted and almost rebuilt as the piping will corrode and mould will set in, this time is around 2-4 years so if they don't sell them in this time there will be massive costs in making them habitable so they will need to panic sell around this time and this will flood the market.
More and more people are losing their jobs and when the ECB raises interest rates later this year all those struggling will be no longer able to afford their mortgages, this will flood the market.
Builders are not going to sit around building nothing for the next few years, they will start buying up cheap sites and building much cheaper houses that can now be built that there would be plenty of demand for, this will flood the market.

Houses prices are going only one way and that's down. I'd expect them to begin to settle around 35-40% off where they are now and that's being optimistic.

Yes the houses will deteriate over time if not maintained, it won't be piping corroding though, but services should be turned off in any case.

The main killer will be moisture ingression, on an unfinished house that is not weathertight or one with broken windows or an incomplete roof, will have already deteriated.

If an empty house is ventillated, secure and minimal maintenance is carried out, it should last for at least a decade without any serious problems.

AARRRGH

Who actually needs house prices to go up? I can only think of three groups: Property speculators, banks and the government.

Property speculators need prices to go up so they can make a profit on their investment. We shouldn't care about these people.

Banks need prices to go up so their balance sheet isn't full of bad debt. That shouldn't be our problem.

The Government need house prices to go up so they can stop bailing out the banks and can go back to relying on stamp duty. Government incompetence makes this our problem.

Some might argue that those in negative equity need house prices to rise, but I disagree. They don't need to sell their house. They can continue living in it and pay off their mortage. Moving house is a want, not a need.

So if we take all this into account, we can see falling house prices would (overall) be a very good thing were it not for our incompetent Government taking it personally and giving us the bill.

stvincent

AARRRGH wrote: »

Some might argue that those in negative equity need house prices to rise, but I disagree. They don't need to sell their house. They can continue living in it and pay off their mortage. Moving house is a want, not a need.

How about people who have lost their jobs and have mortgage commitments that they can't meet?

AARRRGH

stvincent wrote: »

How about people who have lost their jobs and have mortgage commitments that they can't meet?

Yeah, I think we need a way to deal with this, for example, they are allowed sell their house but then owe the difference to their bank in the form of a new, smaller mortgage.

It would mean they would have to rent/live somewhere a lot cheaper for a good few years, but at least they are "free" from their old mortgage.

stvincent

stvincent wrote: »

How about people who have lost their jobs and have mortgage commitments that they can't meet?

Unless they actually have somewhere to go, as in another place with a job, they won't be moving. Unless they're quitting the housing market altogether, meving into rented for example.

Benedict

It is now March 2010. In Dublin, I see apartments and houses that have been for sale for 2 years and have little prospect of shifting. Why? Because the prices are still completely unrealistic.Most people wouldn't dream of paying 40K for a car that is worh 20K - even if they liked the car. And what bank would lend 80% of the 40K if they were aware that the car wasn't worth a fraction of that amount? Yes house prices in Dublin have fallen - but they're still looking for farcical amounts - 400K for houses that should be 200K - they think because they were once 700K that means they are value at 400K - but forget it. Bring the prices down right now so people can get on with buying. Stop waiting in the hope that some fool will pay double what a house is worth.
There aren't too many fools left when it comes to the price of Dublin houses!

AARRRRGH

Benedict wrote: »

It is now March 2010. In Dublin, I see apartments and houses that have been for sale for 2 years and have little prospect of shifting. Why? Because the prices are still completely unrealistic.Most people wouldn't dream of paying 40K for a car that is worh 20K - even if they liked the car. And what bank would lend 80% of the 40K if they were aware that the car wasn't worth a fraction of that amount? Yes house prices in Dublin have fallen - but they're still looking for farcical amounts - 400K for houses that should be 200K - they think because they were once 700K that means they are value at 400K - but forget it. Bring the prices down right now so people can get on with buying. Stop waiting in the hope that some fool will pay double what a house is worth.
There aren't too many fools left when it comes to the price of Dublin houses!

People wont sell for a lower price unless they absolutely have to.
People wont buy for a higher price unless they absolutely have to.
Stalemate.

james finn

people say they are lucky they didnt buy a house in the good times because of the fall in the market now, BUT

these people want to buy a house now and cant get loan.

the people who did buy in the good times are better off cause they have a house.

the people who didnt buy think they are smart but not really smart because now they cant buy and the only time they could buy is when the markets go up and house prices go up and when this happens its back to the same old its to dear to buy il wait.

Amhran Nua

james finn wrote: »

these people want to buy a house now and cant get loan.

The banks are lending if you have the deposit. If you haven't the deposit you should save until you have one to get used to the expense.

james finn wrote: »

the people who did buy in the good times are better off cause they have a house.

No, the banks have the house, all they have is debt until the last red cent is paid off. If they don't pay it all off, they lose the house. Also with interest rates rising soon, the amount they need to repay will be increasing, which would be less of an issue if they had saved enough of a deposit.

james finn wrote: »

the people who didnt buy think they are smart but not really smart because now they cant buy and the only time they could buy is when the markets go up and house prices go up and when this happens its back to the same old its to dear to buy il wait.

I'm afraid that's circular logic, based on the fallacy that mortgages are currently unavailable.