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Article: Lenihan says house prices now at bottom
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04-04-2010 9:24amLenihan says house prices now at bottom
'Confidence will rebuild, as up to now people were holding back'
By JODY CORCORAN
Sunday April 04 2010
Finance Minister Brian Lenihan claimed yesterday that the residential property market will stabilise following the transfer of toxic debt from the banks to Nama -- and predicted that people will now begin to buy houses again.
Nama is buying most toxic loans at an average discount of 47 per cent, which is far steeper than the 30 per cent "haircut" which had been anticipated last September.
Yesterday, Mr Lenihan told the Sunday Independent: "One of the good things about the steep discount, averaging 47 per cent, is that the residential property market will now be stabilised at a realistic level."
He added: "You can now buy in confidence that the price is realistic."
The Finance Minister's belief that the property market has hit the bottom will come as a surprise to a number of economists, and other observers of the market, who recently predicted a further decline.
Statistical analysis shows that overall asking prices nationally have fallen 27.3 per cent from their peak in 2006. However, anecdotal evidence suggests that prices achieved are already up to 50 per cent lower than at peak.
Property prices plunged by 3.3 per cent in the first three months of this year, according to the latest property barometer from myhome.ie, which shows a slight ease in decline when compared to the 3.5 per cent fall during the last quarter of 2009.
Mr Lenihan is this week taking a far more optimistic outlook, not just in relation to the moribund property market, but in relation to the economy more generally. He has pointed to what he called "encouraging signs".
The motor industry, he said, reported a 31 per cent increase in car sales, and the NCB Purchasing Managers Index, an indicator designed to provide a measure of the health of the manufacturing industry, was at 53 per cent -- the highest for a long time.
He said that this indicated "considerable optimism" among a key group.
The tourism sector, he said, would show some improvement this year as consumer prices become more competitive. "People are buying motor cars and, now that a realistic value has been established, more people will also buy residential property," he said.
"This will begin the rebuilding of confidence because up to now many people were holding back."
In its quarterly report published last week, National Irish Bank said that Dublin house prices would "hit a bottom" during this year, although prices nationally would continue to fall.
"Prices in Dublin started to fall earlier and have fallen further than in the rest of the country," the bank's chief economist, Ronnie O'Toole, said.
However, Mr O'Toole also said, in his 2008 quarterly report, that house prices had almost "bottomed out" at just 15 per cent off their 2006 peak, and that sales activity would return to normal in the second half of that year.
Meanwhile, Mr Lenihan also told the Sunday Independent that the international financial markets did not consider that the Nama project and bailout of the banks were a "catastrophe".
He said: "Over the past few days, the cost of our borrowings has not gone up.
"In fact, the confidence of those who trade in Ireland debt and Ireland's stock, and the positive reaction from the IMF, both indicate a strong, favourable reaction abroad," he added.
Mr Lenihan said that there was no point in going into denial about our problems.
"I understand that, to the general public, the numbers involved are frightening. But I would ask people to bear in mind that the Nama project is set up over a 15-year period and that there will no immediate cost in 2010 to our balance sheet."
He said that Bank of Ireland and Allied Irish Banks were viable enterprises and the resolution of their problems was reflecting the real value of those banks.
And the cost of Anglo Irish Bank and the two building societies, Irish Nationwide and EBS, would also be averaged over a 15-year period with no immediate cost.
To have allowed Anglo Irish Bank to collapse would have involved a fire sale, and the paying off of all depositors at an enormous cost to the taxpayer, he said.
- JODY CORCORAN
Sunday Independent
What utter tripe! Is the man just making it all up as he goes along?1
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Big LOL. Unfortunatly the masses think property is great value. Problem is they can't get mortgages. Aren't we a lucky bunch.0
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Yesterday, Mr Lenihan told the Sunday Independent: "One of the good things about the steep discount, averaging 47 per cent, is that the residential property market will now be stabilised at a realistic level."
He added: "You can now buy in confidence that the price is realistic."
That doesn't make any sense. I may have missed something but we have no idea what loans, on what properties have taken a haircut. Even if we did, with tightened mortgage lending and ever reducing incomes I can't see how things could be stabilised.0 -
Lenny wrote:Yesterday, Mr Lenihan told the Sunday Independent: "One of the good things about the steep discount, averaging 47 per cent, is that the residential property market will now be stabilised at a realistic level."
The only thing that the lads in the Publican Party saw in property drops was scope for property price increases. They seriously think that 30% price drops mean a new generation of suckers can be "leveraged" the same way and create a second property boom. Inexorably rising interest rates, anywhere between five and ten years of oversupply (and we're still building!), along with staggering unemployment figures mean nothing to these blinkered lemmings.
Instead whats going to happen is property prices are going to continue to defy the minster's magesterial nod, just like the other great cnut that tried to hold back the tide, and we'll still be stuck with a snarled shambles of worthless financial burden on the taxpayer for decades to come, for no reason and dead against best practise.
I mean seriously, whats going through their heads is "hur, we bought up all the property, so now we control the price!". It really is that simple.0 -
I hope those comments kill the air of credibility he has been getting in the media recently. So we are to believe that a "lawyer" with the back up of one of the least sophisticated finance departments in the Western world, is calling a bottom in the housing market. Given that we are most certainly in the early part of global soverign debt debacle, I find his comments highly irresponsible and dangerous for anyone that actually acts on it.
A belief in gender identity involves a level of faith as there is nothing tangible to prove its existence which, as something divorced from the physical body, is similar to the idea of a soul. - Colette Colfer
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What a clown.
I'd like to hear the views of the pro-Nama people on this Lenihan analysis. If Lenny has been basing his Nama analysis on 'turning a profit' in 10yrs based on stabilisation of prices this year and possible rising prices next year, oh boy is the only words i can think of.0 -
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My god they really all do have their heads planted in the sand. The property engine of sales to drive tax revenues in this country is well and truely dead. If they still think they will get any meaningful tax take from sales in the next five to ten years they are deluded.
If he had any cop on he would be ensuring that the credit flow to the SME's that are fighting for their lives be freed up as a matter of urgency rather that perpetuate these Galway Tent derived fantasies of a property recovery.
Its all about the jobs now Brian, its all about the jobs (ie trying to save those who are still in jobs!).0 -
There is the potential for house price rises in the near future, due to present market conditions. Now that the country's toxic development loans have begun transferring to Nama, there is no need for any of the 300,000+ empties to be placed on the market, as the taxpayer can service the interest payment on the loans indefinitely. The 10 years oversupply has been effectively removed with the stroke of a pen.
Despite the down turn there is still a market for mortgages (albeit a much smaller one). I'm talking about those who haven't lost their jobs or taken wage cuts. This market has been restricted for the past 18 months and there is probably considerable pent up demand. The government is now in a position to control housing supply, and gradually release a small amount of the 300,000+ empties for sale every year. Even if this demand is only 10000 units per annum, if the government restricts sales to 5000 units per annum then there will be a supply shortage. The result will be a rise in prices.
Lenihan's statement is correct.0 -
toughbuttfair wrote: »There is the potential for house price rises in the near future, due to present market conditions. Now that the country's toxic development loans have begun transferring to Nama, there is no need for any of the 300,000+ empties to be placed on the market, as the taxpayer can service the interest payment on the loans indefinitely. The 10 years oversupply has been effectively removed with the stroke of a pen.
http://www.independent.ie/business/irish/nama-to-demolish-developments-that-will-never-be-viable-2100082.htmlThe bulldozing of half-finished developments has been taking place in California and Texas over the past year, particularly on stock which has been foreclosed on by banks. NAMA planners said that in extreme cases similar exercises would have to be carried out here.
The overhang of residential stock in some counties will persist for decades, according to NAMA planners.
While the agency is prepared to sit on assets for several years, it believes that some are more likely to return value to NAMA as agricultural sites.
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toughbuttfair wrote: »Now that the country's toxic development loans have begun transferring to Nama, there is no need for any of the 300,000+ empties to be placed on the market, as the taxpayer can service the interest payment on the loans indefinitely.toughbuttfair wrote: »This market has been restricted for the past 18 months and there is probably considerable pent up demand.toughbuttfair wrote: »Lenihan's statement is correct.0
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Funny post toughbuttfair.
Ever hear of the 2nd hand market?
Ever hear of the tough liquidity ratio's been imposed on the banks whereby this can affect the amount they can loan? And the ECB will raise the IR's soon.
Oh and unemployment is still rising, 13.4% at last count I believe. Emigration is a factor too.
I as a potential FTB will not be following Lenny's advice. Plenty of rentals out there for me still to choose from.
"Yesterday, Mr Lenihan told the Sunday Independent: "One of the good things about the steep discount, averaging 47 per cent, is that the residential property market will now be stabilised at a realistic level.""
I had thought alot of that 47% was commercial property?0 -
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Demolition and haircut- I assume these homes would have been snapped up for free by NAMA rather than anything close to 47%!
Supply and demand-
Anyone know how many of these 300k homes were actually needed to satisfy the population? Given Ireland's joke of a planning policy I suspect once again most were built purely on speculation and to satisfy the blood sucking bastards that dictated everyone must own 2,3,4,5 homes.
Anyone factored in the thousands who bought in the last 5 years and with such astronomic negative equity won't be moving any time soon. These can effectively be removed from the demand list.
Impact of emigration on demand- hard to think its not happening given Aus/Canada's significant lure right now.
Impact of the fact anyone with half a brain wouldn't choose/be allowed to go near a property purchase without 50% deposit.
Lenihan, you can hold yer 300k cardboard apartments and have one hell of a property portfolio, but it will do bugger all for property value.0 -
Perhaps Lenihan isn't completely wrong. Property may stabilise at a realistic level, but be less affordable to the masses due to falling wages and more prudent lending by the banks. This would leave Ireland in a similar position to Germany...perhaps it shouldn't be that easy to get on the housing ladder and renting long term is a better solution for the future?
It has NEVER been easy for the average German to buy his own home, due to very conservative lending by German banks (domestically at least!) and the cost of German houses.
I think large scale bulldozing of poorly planned estates tacked onto villages in the Midlands which simply couldn't support them, is no bad thing. Return the land to argriculture and in future build in sustainable locations, nearer to the employment centres.
Just a few thoughts which were going through my mind.0 -
Property may stabilise at a realistic level, but be less affordable to the masses due to falling wages and more prudent lending by the banks.0
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Amhran Nua wrote: »The government doesn't set prices though, the market sets prices, aided and abetted by the government in this case. If property prices become less affordable to most people, at the end of the day the result will be that prices will fall until they become affordable. Otherwise there would be no market.
I've itallicised that bit because that is what's fundamentally differnt between the Irish and German property market...in Germany you would expect to have a property on the market for months before a potential buyer sees it. The market moves at a snail's pace, but there is a market. So I disagree that there will be no property market if property becomes less affordable to most people, just that the property market will slown down to German like levels and the rental sector will become busier than it has been historically. I see no problem with this happening and view it as a mature move. I'm not saying that what Lenihan is saying will lead to this, so I'm possibly going off topic. In short however I am not sure I agree that property should necessarilly be as "affordable" as it has been and view the whole notion that everyone is "entitled" to home ownership as something that got us into this mess in the first place!0 -
Amhran Nua wrote: »You're assuming that the majority of the empties are owned by developers and not the tens of thousands of private "investment" properties that changed hands annually over the last ten years (around 40,000 in 2006 alone). These would not be covered by NAMA, which would also deal with major landbanks where little development has taken place.
Why would there be, there are hundreds of thousands of empties which people can rent for as long as they wish.
You're correct. I am assuming, and I believe my assumptions are correct.
Furthermore inevitable bankruptcies will transfer many of these private "investment" properties into bank(government) ownership.
If the government wants a floor on the market then these empties will not be rented out, but kept idle at the taxpayers expense.Funny post toughbuttfair.
Ever hear of the 2nd hand market?
Ever hear of the tough liquidity ratio's been imposed on the banks whereby this can affect the amount they can loan? And the ECB will raise the IR's soon.
Oh and unemployment is still rising, 13.4% at last count I believe. Emigration is a factor too.
I as a potential FTB will not be following Lenny's advice. Plenty of rentals out there for me still to choose from.
"Yesterday, Mr Lenihan told the Sunday Independent: "One of the good things about the steep discount, averaging 47 per cent, is that the residential property market will now be stabilised at a realistic level.""
I had thought alot of that 47% was commercial property?
Buyers will be encouraged by estate agents to purchase NAMA properties.
Bank re-capitalisation will solve some of the liquidity problems. Enough to relieve a certain amount of the pent up demand.
Much of the rise in unemployment are people who would never have been in a financial position to take out a mortgage, even in the boom times.
Its a mixture of commercial and residential. The commercial aspect has been emphasised so as not to give the game away.
Lads I don't like this situation any more than you do. But looking at the situation objectively. We have a government that consistently makes decisions to benefit a small elite, and not the general populous. Despite the outrageously stupid decisions most of them have made over the last 10 years, they have some level of intelligence and are using it to circle the wagons and protect their interests.
I would love prices to fall further, but the establishment of NAMA makes it less likely, as it increases government control of the market. Even a small rise would bring a lot of people who are sitting on the fence into the market.0 -
toughbuttfair wrote: »There is the potential for house price rises in the near future, due to present market conditions. Now that the country's toxic development loans have begun transferring to Nama, there is no need for any of the 300,000+ empties to be placed on the market, as the taxpayer can service the interest payment on the loans indefinitely. The 10 years oversupply has been effectively removed with the stroke of a pen.
Despite the down turn there is still a market for mortgages (albeit a much smaller one). I'm talking about those who haven't lost their jobs or taken wage cuts. This market has been restricted for the past 18 months and there is probably considerable pent up demand. The government is now in a position to control housing supply, and gradually release a small amount of the 300,000+ empties for sale every year. Even if this demand is only 10000 units per annum, if the government restricts sales to 5000 units per annum then there will be a supply shortage. The result will be a rise in prices.
Lenihan's statement is correct.
hi tought but fair , welcome to boards , by golly , you will be a busy man now , trying to juggle both boards and politics.ie
p.s , a word of warning , boards is much more PC than politcs.ie0 -
irishh_bob wrote: »hi tought but fair , welcome to boards , by golly , you will be a busy man now , trying to juggle both boards and politics.ie
p.s , a word of warning , boards is much more PC than politcs.ie
Thats a different poster. I was going to register this name on p.ie and use it to wind that other idiot up, but they had some sort of embargo on new members and couldn't register.
BTW I'm not trying to wind up anyone on this forum as most posters here have very valid arguments. The posts I made today are my opinion.0 -
Big LOL. Unfortunatly the masses think property is great value. Problem is they can't get mortgages. Aren't we a lucky bunch.
Be thankful, very thankful.irishh_bob wrote: »hi tought but fair , welcome to boards , by golly , you will be a busy man now , trying to juggle both boards and politics.ie
p.s , a word of warning , boards is much more PC than politcs.ie
You can say that again.
Mods around here are more like Singapore police whereas p.ie is more like Irish regulatory authorities. :eek:
I will depart now looking over my shoulder.
How come none of lendahand's possey are on here declaring once again how great he is.
After all he is now able to predict the bottom of the property market, in face of all indicators like rising unemployment, emigration, tightening credit, banks insolvent not lending, decreasing salaries, etc, etc.
Maybe the charlatan's mask is finally slipping.I am not allowed discuss …
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The price of a house only needs to fall to a level where one individual purchaser can afford it and can secure finance for it. So when it hits that price and that individual is looking for that type of property, it is sellable.I've itallicised that bit because that is what's fundamentally differnt between the Irish and German property market...in Germany you would expect to have a property on the market for months before a potential buyer sees it.So I disagree that there will be no property market if property becomes less affordable to most people, just that the property market will slown down to German like levels and the rental sector will become busier than it has been historically.view the whole notion that everyone is "entitled" to home ownership as something that got us into this mess in the first place!toughbuttfair wrote: »You're correct. I am assuming, and I believe my assumptions are correct.
The simple reality is that the government has not got control over a majority share of the property market even with NAMA.toughbuttfair wrote: »Furthermore inevitable bankruptcies will transfer many of these private "investment" properties into bank(government) ownership.0 -
Amhran Nua wrote: »
I don't think the numbers support your assumption. Above and beyond the second hand properties already mentioned by Gurramok, we still have the number of private investments who at minimum must constitute at least half of the empties, and then there is the commercial property to consider
The simple reality is that the government has not got control over a majority share of the property market even with NAMA.
Its not even in the government's interest to keep reposessed properties; the banks need money, not property, and it would turn an already untenable situation into an out and out rout on the markets if anything like that was attempted.
We don't have the numbers as they are unavailable. Thus we have to rely on reading between the lines. We had many announcements last Tuesday, and now we have a headline in Today's Sindo stating that we have reached the bottom. The government do have the figures, and appear to have decided that they are in their favour.
Now that the taxpayers are funding most of our banks; they can stockpile as many repossessed properties as they like, at our expense, if it suits their needs.
Personally I believe there is a 40% chance of a 10 to 15% rise in house prices over the next 18 months. Historically, house price collapses have been non linear, in that the price can increase from time to time, even if the long term trend is downward. We could be at one of those points where there will a temporary upward trajectory, as a considerable market intervention is taking place.0 -
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I'm not going to go into too much detail but suffice to say the irish attitude to property ownership has a lot more to do with our tendency to "get on the housing ladder at all costs" than the legislation.
Believe me, from experience, I can tell you it is extremely difficult to get tenants out in Ireland as well. The PRTB are excruciatingly innefficient and IMO I would rather be trying to evict a non paying tenant here in Berlin than in Dublin, and that's my honest appraisal of the situation.
Of course, german tenants actually quite rarely fail to pay their rent due to this weird thing inbuilt in them, it's called a sense of personal responsibility! Most German tenants fully expect to pay their rent and do so. My GF even paid rent for 2 months on a place she wasn't living in as she moved to another place but couldn't find a replacement tenant for the landlord (a large company more often than not). She eventually found a replacement but would have been obliged to pay for the full 3 months notice period had she failed to do so. I know several others here who have been in this position. German tenants generally abide by the terms of their contracts, so landlords have relatively little to fear from the protections bestowed on tenants under the law. It's a two way street basically.
In any case, legislation can be changed if it's not fit for purpose. The Civil Law 2008 Act changed quite a few things relevant to landlord-tenant relationships actually, some good stuff in their for both parties (mostly commercial though).0 -
toughbuttfair wrote: »We don't have the numbers as they are unavailable.toughbuttfair wrote: »The government do have the figures, and appear to have decided that they are in their favour.toughbuttfair wrote: »Now that the taxpayers are funding most of our banks; they can stockpile as many repossessed properties as they like, at our expense, if it suits their needs.toughbuttfair wrote: »Personally I believe there is a 40% chance of a 10 to 15% rise in house prices over the next 18 months. Historically, house price collapses have been non linear, in that the price can increase from time to time, even if the long term trend is downward. We could be at one of those points where there will a temporary upward trajectory, as a considerable market intervention is taking place.I'm not going to go into too much detail but suffice to say the irish attitude to property ownership has a lot more to do with our tendency to "get on the housing ladder at all costs" than the legislation.Believe me, from experience, I can tell you it is extremely difficult to get tenants out in Ireland as well. The PRTB are excruciatingly innefficient and IMO I would rather be trying to evict a non paying tenant here in Berlin than in Dublin, and that's my honest appraisal of the situation.German law is PRO-TENANT, because tenants achieve security of tenure.
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What rights do landlords and tenants have in Germany, especially as to duration of contract, and eviction?
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1. The tenant is manifestly in breach of contract;
2. The landlord needs the premises for himself or his family;
3. The lease contract prevents the landlord from making an economically justifiable use of the premises.
The tenant can object to the notice, and demand continuation, if termination of the lease would give rise to hardship for himself or his family that would be unjustified, even in the light of the landlord’s legitimate interests.
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Despite moves away from subsidies toward targeting the needy, house construction still receives generous tax-breaks. 60% of all German households rent. “Despite rent control regimes and notice protection, private investment in the housing market still seems to pay off and, therefore, many investors offer housing for rent,” notes a report by the European University Institute (2004).Of course, german tenants actually quite rarely fail to pay their rent due to this weird thing inbuilt in them, it's called a sense of personal responsibility!
In my opinion the property market in Ireland will in fact continue to keep falling for a while yet, before settling at a realistic level (14 to 18 times annual rent for an area), then grow in line with inflation. That doesn't mean that there will be no buying and selling or it will be stagnant, just that people will be trading up and selling properties without the massive gains they might have expected from 2001 to 2006. Equity gains will be minimal even in a brisk market.0 -
Amhran Nua wrote: »Actually we do have the numbers for individual mortgages taken out for the purposes of investment in each year, as already mentioned, in 2006 alone it was around 40,000 out of around 90,000 all in.
This is the same government who managed to run the entire economy off a cliff?
The taxpayer might have a thing or two to say about that, and as already pointed out, the can't if they want to continue borrowing on the international markets. Why did you not respond to that point?
Its called a dead cat bounce. Its possible that the storm of bluster and nonsense might convince some people to buy, but to be honest I doubt it. Once bitten twice shy, and he hard lessons of those trapped in shoeboxes for the next twenty years will be a long time being forgotten.
There was a lot of pressure on people recently to buy, happily that pressure has vanished now, the attitude has become one of "the longer I wait, the cheaper they will be", which becomes a self fulfilling prophecy.
In my opinion the property market in Ireland will in fact continue to keep falling for a while yet, before settling at a realistic level (14 to 18 times annual rent for an area), then grow in line with inflation. That doesn't mean that there will be no buying and selling or it will be stagnant, just that people will be trading up and selling properties without the massive gains they might have expected from 2001 to 2006. Equity gains will be minimal even in a brisk market.
Then the question becomes: what % of that 40,000 will become a part of NAMA. Are those figures available? Its likely that much of the 40,000 will owned be a relatively small number of investors.
They may have run the economy off a cliff, but they also appear to be
saving those who "matter".
My great worry is that the taxpayer will have very little to say about any of this. The taxpayer has no representation at the decision making levels of our society. As long as this is the case the government can continue to borrow, and use those borrowings to attempt to artificially inflate house prices.
I agree that over the next 10 to 20 years prices will continue to fall. That doesn't prevent Lenihan from claiming that he has correctly called the "bottom" of the market in the short term.0 -
toughbuttfair wrote: »
Much of the rise in unemployment are people who would never have been in a financial position to take out a mortgage, even in the boom times.
Like construction workers were a bricky could earn 60k a year?
Some would say most of the people on the dole were some of the few who could afford the high prices due to inflated wages.toughbuttfair wrote: »I would love prices to fall further, but the establishment of NAMA makes it less likely, as it increases government control of the market. Even a small rise would bring a lot of people who are sitting on the fence into the market.
Who are all these people on the fence? are they unaffected by cuts? jobs losses, future interst rate hikes, future tax hikes, leading to the loss of more jobs, mass emigration, the huge over hang of houses, the tight credit controls.
Where is this fence and who's on it0 -
toughbuttfair wrote: »Then the question becomes: what % of that 40,000 will become a part of NAMA. Are those figures available? Its likely that much of the 40,000 will owned be a relatively small number of investors.toughbuttfair wrote: »My great worry is that the taxpayer will have very little to say about any of this.toughbuttfair wrote: »I agree that over the next 10 to 20 years prices will continue to fall. That doesn't prevent Lenihan from claiming that he has correctly called the "bottom" of the market in the short term.0
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Like construction workers were a bricky could earn 60k a year?
Some would say most of the people on the dole were some of the few who could afford the high prices due to inflated wages.
Who are all these people on the fence? are they unaffected by cuts? jobs losses, future interst rate hikes, future tax hikes, leading to the loss of more jobs, mass emigration, the huge over hang of houses, the tight credit controls.
Where is this fence and who's on it
Some construction workers were on 60k a year. But most of the workers I knew earned a lot less than that, and had to compete with competition from immigrant workers who were in a position to charge a lot less than their Irish counterparts. Obviously there are some high earners who have been affected, but they are in a minority compared to the amount of lower paid workers who have been affected. In a society such as ours it is nearly always the poorest that suffer the most in this type of situation.
As for people on the fence? Public service workers, those 70% of private sector workers who have not taken pay cuts. Its true that there aren't as many in a position to buy as three or four years ago, but there are still those who can afford to buy. All that is needed to trigger a price increase is higher demand than supply. There might not be 50,000 potential buyers like in 2006. But if there are 15,000 to 20,000 potential buyers and only 5000 to 10,000 available properties, then you will eventually get a price increase.0 -
toughbuttfair wrote: »Some construction workers were on 60k a year. But most of the workers I knew earned a lot less than that, and had to compete with competition from immigrant workers who were in a position to charge a lot less than their Irish counterparts. Obviously there are some high earners who have been affected, but they are in a minority compared to the amount of lower paid workers who have been affected. In a society such as ours it is nearly always the poorest that suffer the most in this type of situation.
As for people on the fence? Public service workers, those 70% of private sector workers who have not taken pay cuts. Its true that there aren't as many in a position to buy as three or four years ago, but there are still those who can afford to buy. All that is needed to trigger a price increase is higher demand than supply. There might not be 50,000 potential buyers like in 2006. But if there are 15,000 to 20,000 potential buyers and only 5000 to 10,000 available properties, then you will eventually get a price increase.
60k was just for an unqualified brick layer.
Chippies, Electricians etc were making well in excess of 60k and a huge amount of the currently unemployed come from this sector or ones who are related to that sector.
public sector workers who apprently have taken huge hits to their wages? and can barley afford bread and water according to most of them, what are they going to be buying?
70% of the private sector unaffected from cuts lol, ah you read the star too.
What about the % of private sector people now on the dole? down to 3 day weeks etc.
How many private sector wokers have lost thier job since that 70% figure was banded around with nothing to back it up?
How many have taken cuts since? how many had reduced hours/day since?
People are worried about losing thier job. they're worried about increasing interest rates, tax hikes etc etc
When you pick through people who.
Have no huge personal debt.
no negative equity
10-20% depoists at the ready.
Very secure jobs.
Who can actyally afford a mortgage.
who can get credit.
willing to take the risk
I think you'll find it's fairly thin on the ground.0 -
Great stuff Lenihan. Pity none of the banks are handing out money is'nt it.:rolleyes:0
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60k was just for an unqualified brick layer.
Chippies, Electricians etc were making well in excess of 60k and a huge amount of the currently unemployed come from this sector or ones who are related to that sector.
public sector workers who apprently have taken huge hits to their wages? and can barley afford bread and water according to most of them, what are they going to be buying?
70% of the private sector unaffected from cuts lol, ah you read the star too.
What about the % of private sector people now on the dole? down to 3 day weeks etc.
How many private sector wokers have lost thier job since that 70% figure was banded around with nothing to back it up?
How many have taken cuts since? how many had reduced hours/day since?
People are worried about losing thier job. they're worried about increasing interest rates, tax hikes etc etc
When you pick through people who.
Have no huge personal debt.
no negative equity
10-20% depoists at the ready.
Very secure jobs.
Who can actyally afford a mortgage.
who can get credit.
willing to take the risk
I think you'll find it's fairly thin on the ground.
I'm not disputing any of this. But there are still people who are in a position to buy. There aren't as many as there were four or five years ago, but they do still exist, believe it or not. And as long as demand is greater than supply you will get a price increase, even if the numbers involved are much lower than before. The point is that the government is now in a better position to control supply, and possibly artificially inflate property prices in future.0 -
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He announced this as a late April Fools Joke, right?0
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Amhran Nua wrote: »
I don't think the Publican Party can hold out much longer, to be honest. No doubt the champagne is flowing freely at the thought that they have pushed NAMA through, but Lenihan's legacy won't see out the next five years.
I very much hope that is the case. What's worrying is the fact we have had all this upheaval over the last three years, and they're still there. Unless the Greens go mental or Sinn Fein re-commission the arms, they will most likely be in charge for another two years at least.0 -
toughbuttfair wrote: »The point is that the government is now in a better position to control supply, and possibly artificially inflate property prices in future.toughbuttfair wrote: »I very much hope that is the case. What's worrying is the fact we have had all this upheaval over the last three years, and they're still there. Unless the Greens go mental or Sinn Fein re-commission the arms, they will most likely be in charge for another two years at least.0
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Prices could be stabilising in certain small sub-markets around particularly desireable areas. Near the Lough in Cork the nicer bits of property are selling quite quickly at the moment versus estates attached to small towns and villages in the county where properties have been listed for well over a year and a half at this point.
We could see prices stabilse in some areas and continue in freefall in others depending on inventory combined with population density etc.0 -
I have so much respect for Brian that it really disappoints me to see him coming out saying this. Banks now that they have lost capital due to NAMA will decrease the amount of loans to people.
Secondly as Europe rebounds interest rates will be raised by the ECB. The moment this happens the people that have been barely hanging on will be blown out of the water and the other people trying to buy a house will be frightened off the the rising interest rates and still falling prices. This still has another 2-3 years in it.
Thirdly a lot of immigrants especially Eastern Europeans have left meaning more places are left empty0 -
Let's face it, most of the property bubble was (against better knowledge) fueled by the power of suggestion ...safe as houses ...get on the ladder ...property is only going up ...rent is dead money, etc, etc.
You can't really blame Lenihan (well you can, but it's the only thing he knows) for trying to switch the momentum on again.
If enough (flush) people believe him, it might just work.
After all, there are supposed to be 180 billion of savings in this country ... somebody still has money.
A repeat of a somewhat saner property bubble is the only short-term way out of this mess (and about as far as Lenihans financial acumen goes)0 -
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The words of a politician only really have much effect on the market close to the turning point of the market. Right now the market is dominated by a huge downward momentum. Right now it is like the reverse of what was happening in 2003/2004/2005 and no words will have any effect.
When Lenehan says that we're close to the bottom it doesn't mean that he thinks we're close to the bottom, he's simply saying what needs to be said to stop people from panicking. The whole strategy is to release bad news by dribs and drabs while continually saying that "we've turned the corner" "we're over the worst" etc.
Eventually, of course, his credibility will run out but all he needs to do is make it last till the next election. Then it is somebody else's problem.
It is important to remember that he's a barrister and so his concern is not whether something is true or false but how a particular position can be defended. That is also what makes him a successful politician.
Last year the mask briefly slipped and he boasted after bringing about cuts in public expenditure that in other countries they would be rioting. You can see from this that his pride lies not with running the economy well but in successfully presenting managing public opinion. If things turn really sour then that merely presents a challenge and allows him to shine.0 -
SkepticOne wrote: ».
It is important to remember that he's a barrister and so his concern is not whether something is true or false but how a particular position can be defended. That is also what makes him a successful politician.
And that my friend is why they should no be let anywhere near making economic policy. It would be like asking an ornithologist to pilot a passanger jetA belief in gender identity involves a level of faith as there is nothing tangible to prove its existence which, as something divorced from the physical body, is similar to the idea of a soul. - Colette Colfer
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I'm about the age people used to buy houses at in Ireland. Maybe even a few years past when people were starting to save "to get on the ladder".
I can count on one hand the number of people I know that want to buy a house in the next two years.
We make jokes about it sometimes. My circle of friends would all be earning enough to save for a deposit if they wanted to I think. Most are more concerned with saving money for other things.
Of course my circle of friends is a little peculiar to start with in that nobody in it ever took out a loan even during boom times.0 -
SkepticOne wrote: »Eventually, of course, his credibility will run out but all he needs to do is make it last till the next election.
I don't know about anyone else, but his credibility disappeared for me the day he included Anglo in the bank guarantee.
Which means he has been running on empty for over 18 months, and in that time has sold us down the swanee.0 -
Prices could be stabilising in certain small sub-markets around particularly desireable areas. Near the Lough in Cork the nicer bits of property are selling quite quickly at the moment versus estates attached to small towns and villages in the county where properties have been listed for well over a year and a half at this point.
We could see prices stabilse in some areas and continue in freefall in others depending on inventory combined with population density etc.
My suspicion is that this is the way it will pan out.Mad Men's Don Draper : What you call love was invented by guys like me, to sell nylons.
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Let's face it, most of the property bubble was (against better knowledge) fueled by the power of suggestion ...safe as houses ...get on the ladder ...property is only going up ...rent is dead money, etc, etc.
You can't really blame Lenihan (well you can, but it's the only thing he knows) for trying to switch the momentum on again.
If enough (flush) people believe him, it might just work.
After all, there are supposed to be 180 billion of savings in this country ... somebody still has money.
A repeat of a somewhat saner property bubble is the only short-term way out of this mess (and about as far as Lenihans financial acumen goes)
180 Bn savings??????????
Rough calculation: 2 million of Irelands finest have 90,000 SAVED? 90,000 in assets maybe which if including property is likely an over estimation- take a haircut!
If savings is true then its with the developers and politicians- Developers accounts= off-shore; Politicians accounts= under the mattress!0 -
180 Bn savings??????????
Rough calculation: 2 million of Irelands finest have 90,000 SAVED? 90,000 in assets maybe which if including property is likely an over estimation- take a haircut!
If savings is true then its with the developers and politicians- Developers accounts= off-shore; Politicians accounts= under the mattress!
Or maybe not?
Companies, pensioners, people who saved rather than squandered money on property, 4*4's etc.Mad Men's Don Draper : What you call love was invented by guys like me, to sell nylons.
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Or maybe not?
Companies, pensioners, people who saved rather than squandered money on property, 4*4's etc.
When you look at the credit card debt and cimbined personal debt in this country it's hard to see where the 180bn figure comes from.
There maybe 180bn on deposit, but I wouldn't think it's "billy budweiser" who owns it.0 -
When you look at the credit card debt and cimbined personal debt in this country it's hard to see where the 180bn figure comes from.
There maybe 180bn on deposit, but I wouldn't think it's "billy budweiser" who owns it.
Exactly, that is why I said companies and pensioners.
Companies would have funds on deposit, pensioners generally have a great savings ethic, often helped by the property bubble.
Assuming its developers or politicians is a bit simplistic. Another common trait they shared was believing their own bullsh*t, like using bonuses to buyt bank shares in their hugely successful banks!Mad Men's Don Draper : What you call love was invented by guys like me, to sell nylons.
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When you look at the credit card debt and cimbined personal debt in this country it's hard to see where the 180bn figure comes from.
There maybe 180bn on deposit, but I wouldn't think it's "billy budweiser" who owns it.
PS. There is a big reason I wouldn't trust the €180 Billion figure though. A lot of deposits would be tied up as security and personal guarantees so not really usable.Mad Men's Don Draper : What you call love was invented by guys like me, to sell nylons.
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I know where it will all end up... It will be like the good old days of the land commission... ' here's a house my friend, look after it '... Problem is that you'll probably loose all your friends because they didn't get a house.0
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180 Bn savings??????????
Rough calculation: 2 million of Irelands finest have 90,000 SAVED? 90,000 in assets maybe which if including property is likely an over estimation- take a haircut!
If savings is true then its with the developers and politicians- Developers accounts= off-shore; Politicians accounts= under the mattress!
Deposits will also contain company accounts. It's one of the main reasons for an argument for a higher deposit guarantee level as companies regularly have over 100K in accounts.0 -
Do you ever feel like the lunatics are running the asylum???......0
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What, he's called bottom again?
I seem to remember hearing the economy had turned a corner during the Budget Dec'09, but things have continued to decline since then (the only things not coming crashing down in post-pyramid Ireland are the unemployment, emigration and debt clock - which are inexorably climbing upward)0 -
Dannyboy83 wrote: »What, he's called bottom again?
I seem to remember hearing the economy had turned a corner during the Budget Dec'09, but things have continued to decline since then (the only things not coming crashing down in post-pyramid Ireland are the unemployment, emigration and debt clock - which are inexorably climbing upward)
Huh?
Unemployment is not inexorably climbing upward since December.Mad Men's Don Draper : What you call love was invented by guys like me, to sell nylons.
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