Good time to buy a gaf ?

gurramok

OisinT wrote: »

I disagree, but it will all depend on the budget cuts and consumer confidence at christmas.

Nobody can know for sure, I'm just making an assumption based on the indicators I can see at present. You feel differently, but your opinion is no more or less valid than mine.

We'll just revisit this in Q2 2011 and see who was right

Haha. Secret indicators are they? (and no i'm not talking about those on cars!)

th3 s1aught3r

OisinT wrote: »

Prices are probably going to bottom out by Q1 2011 and growth predictions are looking pretty good for 2011.

Weak sterling is not a positive, but if consumer confidence is up at the end of Q4 2010 then I think we could see growth indicators by early to mid 2011.

Also, the ESRI forecast showed a GDP growth of 2.75% in 2011 and GNP at 2.25%.
They also estimated the budget deficit to fall to 10.5% of GDP and maybe even less depending on the cuts made in the budget forthcoming.

Average house price is below €200,000 in this country. This is artificially low IMO and if prices continue to fall below this then we're in deep shít.

That all sounds as convincing as the "Soft Landing" we were told the property market was going to have

FreudianSlippers

Mainly ESRI forecasts and unemployment predictions but also currency market trends and consumer confidence indices

fontanalis

OisinT wrote: »

Prices are probably going to bottom out by Q1 2011 and growth predictions are looking pretty good for 2011.

Weak sterling is not a positive, but if consumer confidence is up at the end of Q4 2010 then I think we could see growth indicators by early to mid 2011.

Also, the ESRI forecast showed a GDP growth of 2.75% in 2011 and GNP at 2.25%.
They also estimated the budget deficit to fall to 10.5% of GDP and maybe even less depending on the cuts made in the budget forthcoming.

Average house price is below €200,000 in this country. This is artificially low IMO and if prices continue to fall below this then we're in deep shít.

How much do you reckon the prices will increase by, and from what base? Of course these increases are only good for people trying to flip houses.

gurramok

OisinT wrote: »

Mainly ESRI forecasts and unemployment predictions but also currency market trends and consumer confidence indices

ESRI forecasts - they have been constistently wrong every single year even in the bubble years. They didn't even forecast the recession!!

Unemployment forecasts - from whom?

Currency market trends - you talking about Sterling vs Euro?

Consumer confidence indices - from the ESRI/KBC bank now? Besides, they've been flip flopping all year!

FreudianSlippers

fontanalis wrote: »

How much do you reckon the prices will increase by, and from what base? Of course these increases are only good for people trying to flip houses.

at the moment price per square metre are lower than cost of construction per square metre which is not a good thing and is totally unsustainable. (outside Dublin that is)

I have no idea how much further they will drop, but the decrease has slowed significantly in the last Quarter.

Any increase will be minor, but will be positive in terms of future growth.

fontanalis

OisinT wrote: »

at the moment price per square metre are lower than cost of construction per square metre which is not a good thing and is totally unsustainable. (outside Dublin that is)

I have no idea how much further they will drop, but the decrease has slowed significantly in the last Quarter.

Any increase will be minor, but will be positive in terms of future growth.

Do you mean that from the point of view that high cost or low price is unsustainable?

FreudianSlippers

fontanalis wrote: »

Do you mean that from the point of view that high cost or low price is unsustainable?

Well both really, but when prices drop below that level then usually investors start snapping up those properties.

gurramok

OisinT wrote: »

Well both really, but when prices drop below that level then usually investors start snapping up those properties.

Nothing to do with the rental market of course :rolleyes:

News to you, there is still oversupply in the rental market!! So why on earth would an investor jump in a falling rental market?!

FreudianSlippers

gurramok wrote: »

Nothing to do with the rental market of course :rolleyes:

News to you, there is still oversupply in the rental market!! So why on earth would an investor jump in a falling rental market?!

Long-term holdings tbh. But there is no need for rental property when property to purchase is so cheap atm.

gurramok

OisinT wrote: »

Long-term holdings tbh. But there is no need for rental property when property to purchase is so cheap atm.

But you said investors, do you know what an investor is?;)

You are contradicting yourself in saying investors will buy and then saying 'no need for rental property'!

Maybe your thinking of speculators?!:eek:

FreudianSlippers

Investors can be many things. Often they will purchase low priced property and hold until markets regulate, some will flip, some will rent, etc..

gurramok

OisinT wrote: »

Investors can be many things. Often they will purchase low priced property and hold until markets regulate, some will flip, some will rent, etc..

How can they flip unless they will think there will be big price increases

How can they rent when rental returns for an investor are still very low in this country?

And we still haven't introduced NAMA into this conversation!

catbear

Didn't the ESRI get their calculations for rental rates from the CSO who got them from......wait for it......letting agents!

The market indicators lied on the way up, they'll lie on the way down.

Blowfish

OisinT wrote: »

Average house price is below €200,000 in this country. This is artificially low IMO and if prices continue to fall below this then we're in deep shít.

As mentioned earlier, if the bubble had never happened and house prices had tracked inflation like they had the previous 50+ years, then average house prices should be around the €110,000 mark.

There are factors which mean it probably won't actually go quite that low, but it wouldn't suprise me if it dropped another 30% from where it is.

Killer Pigeon

It's certainly a better time to buy a house/flat now than it was a couple of years ago.

th3 s1aught3r

Blowfish wrote: »

As mentioned earlier, if the bubble had never happened and house prices had tracked inflation like they had the previous 50+ years, then average house prices should be around the €110,000 mark.

There are factors which mean it probably won't actually go quite that low, but it wouldn't suprise me if it dropped another 30% from where it is.

What do you mean by 'average house' prices?
Define average house

Blowfish

th3 s1aught3r wrote: »

What do you mean by 'average house' prices?
Define average house

The figures come from the Dept. of Environment and the ESRI, so you'd probably have to ask them.

gurramok

Killer Pigeon wrote: »

It's certainly a better time to buy a house/flat now than it was a couple of years ago.

Even better in 2 years time. Why, just look at the economy, it could take 10 years to fix it!

th3 s1aught3r

OisinT wrote: »

at the moment price per square metre are lower than cost of construction per square metre which is not a good thing and is totally unsustainable. (outside Dublin that is)

I have no idea how much further they will drop, but the decrease has slowed significantly in the last Quarter.

Any increase will be minor, but will be positive in terms of future growth.

What about the oversupply of houses on the market? It could take several years for them to be sold.
There is also the possibility of a double dip recession worldwide which will bring all forecasts down.
In London in the early ninties after the recession showed a recovery in property prices only for a second fall in prices a couple years later

gonedrinking

OisinT wrote: »

Long-term holdings tbh. But there is no need for rental property when property to purchase is so cheap atm.

We are only at 2002 level prices at the minute, considering where the economy is, house prices still have a long long way to fall yet. There will be slow steady falls for the next 4 years at least I'd say, you'd have to be a bonehead to buy now.

FreudianSlippers

I disagree, I think we'll see stabilisation in Q1 or Q2 2011 and maybe slight increases in parts of the country.

Only time will tell though.

Sea Sharp

OisinT wrote: »

I disagree, I think we'll see stabilisation in Q1 or Q2 2011 and maybe slight increases in parts of the country.

Only time will tell though.

There's too many things you're not taking into consideration.
Oversupply means prices are going down further, simple as. A couple of nasty budgets ahead means people will be less reluctant to take on a mortgage.

I'll bet you 20 euro that we won't see the floor being reached on property prices in 2011.

gurramok

OisinT wrote: »

I disagree, I think we'll see stabilisation in Q1 or Q2 2011 and maybe slight increases in parts of the country.

Only time will tell though.

Suppose thats an AH analysis not to be taken seriously :pac:

lostwallet

Property in Ireland is still massively over priced.

Donie Cassidy (FF) April 2008

https://www.youtube.com/watch?v=7RaNqMzVIE0

October 2010
Present day and the same guy is complaining of having to survive on 65k, and an allowance of over 19k.

http://www.examiner.ie/ireland/senator-its-not-easy-to-get-by-on-euro65k-134551.html

th3 s1aught3r

lostwallet wrote: »

Property in Ireland is still massively over priced.

Donie Cassidy (FF) April 2008

https://www.youtube.com/watch?v=7RaNqMzVIE0

October 2010
Present day and the same guy is complaining of having to survive on 65k, and an allowance of over 19k.

http://www.examiner.ie/ireland/senator-its-not-easy-to-get-by-on-euro65k-134551.html

I always take my advice from FF Senators who wear wigs

dermo88

The fall from top to bottom in a market is normally 70% in real terms over the course of 7 years. With extra taxes and the removal of tax breaks and mortgage interest relief. I'd call the bottom of the market in and around 2014, and the average price by then will be 155,000 Euro.

This won't be across the board. Areas with good infrastructure, and prospects will hold their value. The likes of Apartments of 2 bedrooms and less will be hit worst of all, and are likely to lose 75% of their value from peak to trough.

There will be bargains around by then. But the true panic stage in the property crash has yet to take place.

Amhran Nua

OisinT wrote: »

at the moment price per square metre are lower than cost of construction per square metre which is not a good thing and is totally unsustainable. (outside Dublin that is)

All that means is that construction costs are going to have to fall. And with the number of unemployed construction workers out there, its pretty much inevitable. You can say materials and regulation as much as you like, but the bulk of the price of houses after land costs is labour and profit margins from developers. The market dictates the price, end of story.

Anyway I can see prices heading as far south as the level they were at in the mid to late 90s, even without the massive overhang. The main reason for the boom in prices was the way the banks handed out loans to everyone and their dogs, way above what they should have done, which is never going to happen again anytime in this generation. Mainly because nobody in their right minds would lend to Irish banks. It wasn't because of increased earnings (compare price rises and wage rises for the period), overpopulation (!), or any of the other canards going around.

A good rule of thumb for a reasonable price is 12-15 times annual rent for the area, but remember rents are collapsing as well.

th3 s1aught3r

The boom was also caused by the wild speculation in the price of development land around the country.
Wont it be a good thing that house prices fall as much as possible, so people have to pay as possible little for a home ? We can no longer have a system that supports wild gambling on property prices in a huge pyramid scheme with the ordinany Joe at the bottom propping it all up

FreudianSlippers

th3 s1aught3r wrote: »

The boom was also caused by the wild speculation in the price of development land around the country.
Wont it be a good thing that house prices fall as much as possible, so people have to pay as possible little for a home ? We can no longer have a system that supports wild gambling on property prices in a huge pyramid scheme with the ordinany Joe at the bottom propping it all up

Tell that to homeowners with mortgages based on values from the past 10 years.


I'm getting pretty tired of the whole "ordinary Joe" talking point making the rounds at the moment. It makes absolutely no sense to me tbh.
How is this person making any contribution? We have invested in keeping our banks alive and all members of this society are sharing in the cost of these payments.

Amhran Nua

th3 s1aught3r wrote: »

Wont it be a good thing that house prices fall as much as possible, so people have to pay as possible little for a home ?

Yes, and not just socially. Economically property booms are a humonguos waste of time, its eating your own tail. Most of that money which appeared may as well have been poured down the sink, and it still needs to be repaid with interest, destroying future earnings.

gurramok

OisinT wrote: »

Tell that to homeowners with mortgages based on values from the past 10 years.

So? How is it our problem that home owners bought at an overflated price? They bought at a price that was worth to them.

FreudianSlippers

gurramok wrote: »

So? How is it our problem that home owners bought at an overflated price? They bought at a price that was worth to them.

I actually agree, but you can't say that one minute and then turn around and complain that people are losing their houses because they can't pay their repayments and they are in negative equity.

Edit: you = one.

Amhran Nua

OisinT wrote: »

We have invested in keeping our banks alive and all members of this society are sharing in the cost of these payments.

That doesn't mean propping up property prices though. That means mostly creating jobs and whats been controversially done already.

OisinT wrote: »

people are losing their houses because they can't pay their repayments and they are in negative equity.

Two seperate issues.

th3 s1aught3r

OisinT wrote: »

Tell that to homeowners with mortgages based on values from the past 10 years.


I'm getting pretty tired of the whole "ordinary Joe" talking point making the rounds at the moment. It makes absolutely no sense to me tbh.
How is this person making any contribution? We have invested in keeping our banks alive and all members of this society are sharing in the cost of these payments.

Who bought the houses on values of the past ten years ?
Were they not ordinary ?
I feel sorry for those who bought in the boom but they cant be still clinging on to the hope that house prices will rebound no matter what FF tell you

FreudianSlippers

Everything posted after OP is irrelevant as I just realised it's almost Christmas.

NEVER BUY A HOUSE AROUND CHRISTMAS!!![/B]

That's like the #2 rule about house buying.

gurramok

OisinT wrote: »

I actually agree, but you can't say that one minute and then turn around and complain that people are losing their houses because they can't pay their repayments and they are in negative equity.

Edit: you = one.

Whose complaining? The ones losing their houses. There are laws there to help for that.

They'd lose their houses if they lost their jobs anyway as they would be unable to make repayments, negative equity just makes it worse.

FreudianSlippers

th3 s1aught3r wrote: »

Who bought the houses on values of the past ten years ?
Were they not ordinary ?
I feel sorry for those who bought in the boom but they cant be still clinging on to the hope that house prices will rebound no matter what FF tell you

I'm not saying they're going all the way back up there, but if you think prices are going down and staying down then you're sadly mistaken.

th3 s1aught3r

OisinT wrote: »

I'm not saying they're going all the way back up there, but if you think prices are going down and staying down then you're sadly mistaken.

No I dont think they will stay down. I fully expect house prices to recover , I just think a more realistic time frame is 5-10 years

A friend of mine bought a house in late 2007, he swears the property collapse started the day after. Anyway the point is he bought at the top of the market. He had to stretch himself financially to get the mortgage and could only get a fixed rate, which he is now stuck on.
He had been thinking about it for years but it was the constant commentary from "experts" (politicians, banks, agents) where he was thinking 'if i dont get on the ladder i will never do it' and he like many ordinary people bought in the same circumstances. You would want to be very harsh to condemn them for it

Blowfish

OisinT wrote: »

I'm not saying they're going all the way back up there, but if you think prices are going down and staying down then you're sadly mistaken.

Do you have any evidence of a property boom where the prices went straight back up again? In every single example I've seen, it's taken a long, long time to recover.

[edit] As a single example, here's Japan.

De Dannan

OisinT wrote: »

Everything posted after OP is irrelevant as I just realised it's almost Christmas.

NEVER BUY A HOUSE AROUND CHRISTMAS!!![/B]

That's like the #2 rule about house buying.

Hey thanks.
What are the other rules

Blowfish

De Dannan wrote: »

Hey thanks.
What are the other rules

Don't catch a falling knife.

Amhran Nua

th3 s1aught3r wrote: »

I just think a more realistic time frame is 5-10 years

Try thirty years, I'd say.

g0g

Everything posted after OP is irrelevant as I just realised it's almost Christmas.

NEVER BUY A HOUSE AROUND CHRISTMAS!!![/B]

That's like the #2 rule about house buying.

Can you explain the reason behind this? Am looking at buying at the moment - should I be taking the season into account!?

FreudianSlippers

g0g wrote: »

Can you explain the reason behind this? Am looking at buying at the moment - should I be taking the season into account!?

Genuinely no clue - it's just one of those things that are rules that people on the inside in Real Estate tell you.
I think it's something to do with supply and demand. Less houses on sale in winter because nobody wants to be disturbed and/or have to move at Christmas, so more competition and higher prices.

mickydoomsux

th3 s1aught3r wrote: »

He had to stretch himself financially to get the mortgage and could only get a fixed rate, which he is now stuck on.

Shouldn't have bought a house then, should he?

Common sense.

jackiebaron

OisinT wrote: »

Well both really, but when prices drop below that level then usually investors start snapping up those properties.

It's all about supply and demand...as with everything. The cost of building a house is fixed (more or less); the price per square metre is variable based on whether anybody wants the damn place or not. Unless you experience massive deflation the price of bricks and cement and wood is not going to come down.

g0g

OisinT wrote: »

Genuinely no clue - it's just one of those things that are rules that people on the inside in Real Estate tell you.
I think it's something to do with supply and demand. Less houses on sale in winter because nobody wants to be disturbed and/or have to move at Christmas, so more competition and higher prices.

Thanks for the reply. Yeah I would have thought that under normal circumstances, but we're strangely seeing evidence of the opposite. More and more houses are coming for sale where we're looking at the moment, so that seems to be helping push prices down further!

On a completely different note, I can't believe I came across a serious(ish) thread in AH. Does that not break the charter of this forum or something!?:)

mickydoomsux

jackiebaron wrote: »

It's all about supply and demand...as with everything. The cost of building a house is fixed (more or less); the price per square metre is variable based on whether anybody wants the damn place or not. Unless you experience massive deflation the price of bricks and cement and wood is not going to come down.

Are you factoring in the cost of the land and labour? Both can vary wildly and the cost of the land can sometimes out-strip the cost of both the labour and materials put together.

gurramok

mickydoomsux wrote: »

Are you factoring in the cost of the land and labour? Both can vary wildly and the cost of the land can sometimes out-strip the cost of both the labour and materials put together.

How does all this building houses affect the price of an already built house?

Unless one wants to pay for the ghosts?