Have we hit rock bottom?

gurramok

Yahew wrote: »

But housing is an asset bought for the long term.

Lets put this one to bed, do you expect this natural increase to maintain its numbers in 30 yrs time(children->adults) so its wise to invest in property now to cater for them?

Yahew wrote: »

Well immigration has not fallen as fast as expected within a recession. By stabilisation I mean low growth ( 1% or less) as you never get 0%.

It did fall alot in preceding years as per your link. Interesting that you see growth of less than 1% resulting in continuing high levels of immigration as well as reducing the home unemployment rate from 15%+. I have to admit, I do admire your optimism no matter how misguided it is.

Yahew

gurramok wrote: »

Lets put this one to bed, do you expect this natural increase to maintain its numbers in 30 yrs time(children->adults) so its wise to invest in property now to cater for them?

Yeah, unless you can explain why it would reverse. Its growing as the recession continues.

It did fall alot in preceding years as per your link. Interesting that you see growth of less than 1% resulting in continuing high levels of immigration as well as reducing the home unemployment rate from 15%+. I have to admit, I do admire your optimism no matter how misguided it is.

If it fell and came back during the recession then it is likely to continue to at least maintain that level during a stabilisation period - this kind of stuff is called a bottom. We will know more next year, if the trend continues, but at the moment the bottom for immigration is 30K in 2009.

I said nothing about unemployment in any of my posts.



We are talking about an asset owned for 30 years. 30 years ago Ireland had high emigration, falling birth rates and no immigration. Then the boom. Then the bubble. Then the bust.

The underlying factors would indicate that over 30 years this asset will increase in real price.

gurramok

Yahew wrote: »

Yeah, unless you can explain why it would reverse. Its growing as the recession continues.

Quite farsighted, we just don;t know yet what will happen in 30years time, we could be through another bust.

Yahew wrote: »

If it fell and came back during the recession then it is likely to continue to at least maintain that level during a stabilisation period - this kind of stuff is called a bottom. We will know more next year, if the trend continues, but at the moment the bottom for immigration is 30K in 2009.

I said nothing about unemployment in any of my posts.

In 2010 you mean. The unemployed are\will compete for jobs with immigrants hence relevant to immigration numbers. The employment numbers have not risen since the recession began hence its a negative on your optimism for jobs to attract continuing levels of immigration.

Yahew wrote: »

We are talking about an asset owned for 30 years. 30 years ago Ireland had high emigration, falling birth rates and no immigration. Then the boom. Then the bubble. Then the bust.

The underlying factors would indicate that over 30 years this asset will increase in real price.

Not as simple as that. Too many factors to take account of, relying on demographics as the principle factor is very short sighted.

snubbleste

I'm still waiting for the soft landing as mentioned in 2006

Lantus

snubbleste wrote: »

I'm still waiting for the soft landing as mentioned in 2006

that phrase was bandied about like crazy during the boom years by just about everyone. (Although I always hated it as another form of marketing speak.) If we'd only taken a few moments to consider how many times there has been a soft landing (zero) we may of re-thought our approach to many of the things we were doing.

Mr. Loverman

What does soft landing even mean? You will only lose a small bit of your money? Or you will lose it slowly?

snubbleste

Mr. Loverman wrote: »

What does soft landing even mean? You will only lose a small bit of your money? Or you will lose it slowly?

It means prices will stop rising and remain at that level.
Mentioned in the Dáil in 2007 by the then Minister for Finance Brian Cowen as the general consensus by most experts including the Central Bank.

Man007

The important fact is 80% of applications are refused. People want to buy, the banks don't let them. So whats the point in applying, so really the application stat is irrelevant, the stat of approvals is the important one.

Disagree with this the banks are lending to people who show they have capacity to repay by having regular savings.

I applied and was approved first time this week I think it's misleading to say banks aren't lending

shangri la

toexpress wrote: »

I have been proposing the whole council housing in NAMA estates for quite some time. It would flood the market if it were done to quickly but over a period of time it would be fine and it would have many benefits to it aside from cutting the social welfare bill it would also mean that this stupid policy of integration would be brought to an end

why is it a stupid policy?

you think recent graduates should have to live with alcoholics and junkies?

shangri la

Yahew wrote: »

Prices won't rise this year, however they are getting relatively cheap. I feel I should buy in the next 2 years at most. Nobody is going to buy at the very bottom, on that actual day. Within a year is ok. It remains, of course, to get the mortgage.

In another thread today someone posted interesting stats on immigration, and the natural increase in Irish numbers. Here it is Interestingly population is not falling. The birth rate is 75K a year, which is 53% higher than 1993, the death rate is 27.4K about 5K less per year than the early 90's ( and lower again as a percentage of the population). All this has meant that the natural increase in population has more than doubled from 20K a year in the early 90's to 47K a year now. Absent immigration, or net emigration. Net emigration is running at 30K a year, leaving us with a positive population growth of 13K a year. Low, but not negative. Immigration is historically still high - at 42K. Given that this is a recession that seems to be the base level. The base level for Irish emigration ( emigration in the boom) is about 15K. At a stabilised economy - say in 2013, or 2014 we would expect 40K immigrants still, and emigration to drop off to 17K. Add to natural increase in population we would be adding about 60K a year in population. ( At the height of the boom it was 100K a year, or more). Within these statistics is the reason why house prices will rise when credit flows.

cheap relative to what?

shangri la

Yahew wrote: »

I expect them to buy eventually. It a 20-30 year market. Also if you read the piece I posted, a good percentage of the increase will be immigration.

why would people immigrate here?

you dont seem to be thinking about the reasons behind what your reading. Just because its printed doesn't make it so.

shangri la

seamus wrote: »

NAMA will eventually become a state landbank. Within ten years, unfinished or empty estates which have not been released on general sale will be uninhabitable, leaving the only option to bulldoze them and hand the land over to the local council.

In the next few years, local councils who are looking for state housing will get pretty much all of their housing stock from NAMA.

why do you think nama wont maintain these properties?

shangri la

spockety wrote: »

Is there a break down of how much of NAMA's asset portfolio is Commercial Vs Residential? For some reason I have it in my head that the vast bulk of the problem we have in terms of absolute Euro values is on the Commercial side.

NAMA can hold on to all the ****ty apartments they like, it is not having any impact on the market. The biggest acceleration in price drops since the crash began was in 2011. If a controlled release of residential property by NAMA is some kind of attempt at market distortion, it is an utterly failed tactic.

i recall reading that nama has 10,000 apartments but i cant recall the source and there is no comprehensive list. That is a hefty chunk of the bill there. A lot of commercial properties would be generating rent at least.

shangri la

Yahew wrote: »

Um, no I am not. Three things affect property

1) Wages
2) Supply vs Demand
3) Credit

1) and 3) are down for a while but will climb back up in a recovery. 2) will also tip towards demand after a time of no investment.

It doesnt really matter if immigrants buy, or rent. Every rented house was bought by someone. The trend in population growth is upwards, and therefore over the long term, prices will trend back up. And mass emigration ( which you presumably mean rather than immigration) is no more certain over 30 years, than mass immigration was certain in 2006. This is the curse of extrapolation. It was the curse of 2006 and it is the curse of now.

of what use is looking 30 years ahead? Sure we will hit an economic cycle peak in that period but i dont want to have to wait 30 years for that to happen.

i predict wages will at least double in the next 100 years ignoring inflation so prices will rise eventually.

shangri la

Yahew wrote: »

To answer the last part first. We are talking 30 years for a mortgage, and getting some equity from a house.



No, you didnt read the stats. Immigration is running at 40K a year in, and 70K a year out. The former is the base level of immigration to Ireland, the latter is a high level of emigration from Ireland.

When Ireland stabilises the former column will increase ( as if 40K come in a recession more will come when the recession ends), and the latter decrease. The natural population growth figure is +47k, so to have negative population growth we would need 47K negative net migration. However, even small postivie net immigration will be added to the 47K figure.



Sure they did, and they had no evidence that immigration would continue in a bust.Now we do. It does. They assumed that the demographics was powering the boom when it was cheap credit. However that doesn't mean that demographic doesnt matter. It does.

you know there comes a time when an over priced asset becomes under-priced. Even McWilliams is expecting a bottom next year. The pessimists at the bottom match the optimists at the top - everything that is happening now will continue to happen for 30 years.

thats all well and good if your first house lasts until at least retirement. So basically you are ignoring the property ladder approach, you are ignoring peoples need to provide affordable stability, you are ignoring that there is little job security, you are ignoring a devalued punt nua, you are ignoring mass emigration in the young professional sector and about 100 other factors because you read we are getting an influx of (unskilled) immigrants who wilk leave once EU law changes allows us to make welfare tourism more difficult and you reckon babies will buy in 30 years.

i dont mind your views, its your arrogance that makes me want to point out how poor all of your points are.

UDP

Anyone got an updated version of this graph?
I think it says it all really.

washman3

Mr. Loverman wrote: »

What does soft landing even mean? You will only lose a small bit of your money? Or you will lose it slowly?

Soft landing was a phrase coined by Jim Power,chief economist with Friends First,during the scam that was the "celtic tiger".
Jim was one of the main cheerleaders for the vested interests and a mouthpiece for the government. hardly a week went by that Jim did not appear on Six1 news encouraging people to "get on the ladder".
Amazingly this leopard has now changed his spots and is one of the present and previous governments biggest critics,describing their policies as ludicrous.
How a person like this can still command airtime on National tv and radio stations defies logic.:mad:

P.S. check out the great Jim's theories on youtube...

seamus

Man007 wrote: »

Disagree with this the banks are lending to people who show they have capacity to repay by having regular savings.

I applied and was approved first time this week I think it's misleading to say banks aren't lending

I think the point of the 80% refused figure is to show that there's still significant demand out there to buy houses, but most people are falling at the first hurdle.

However, rather than pointing this out as "the banks aren't lending", it could equally indicate that "people are looking to borrow too much", which would correlate with my wild speculations that we're still 10-15% above the "bottom".

It would also indicate that despite the devastation of the last 5 years, Irish people still have an appetite for throwing their money at property. Which for those of us in negative equity is a good thing, in the long term.

Weylin

CONNACHT TRIBUNE HEADLINE THIS WEEK.
News





Banks blocking sales of half the homes on the market

January 19, 2012 - 7:00am by Enda Cunningham


Banks are preventing the sale of up to half of the properties on the market in Galway because the owners are in negative equity, auctioneers have claimed.
And despite cash buyers lining up to purchase in some parts of the county, the stock of ‘suitable’ residential properties for sale in some towns is drying up.
Mass repossessions are now looking increasingly likely as homeowners are struggling to meet repayments – which will result in a further collapse in prices.
With asking prices in the county down 60% on average since the height of the boom and by a similar level in Galway City, frustrated homeowners are attempting to exit the marketplace.
However, despite receiving realistic offers based on current market valuations, homeowners are being refused permission to sell by the banks because the full debt will not be cleared.
The situation has become so serious in Galway that Independent Deputy Noel Grealish has vowed to raise it in the Dáil.
He said a scheme needs to be devised whereby banks allow sales to proceed, and for the sellers to pay back the (negative equity) balance without interest or penalties.
South Galway auctioneer Colm Farrell told the Connacht Tribune: “At least half of the properties advertised for sale will not actually be sold because the banks won’t allow it.“Most of them are priced at around €100,000 more than what is achievable in the current market because they have big mortgages. Even if they have a realistic offer based on the current values, the bank will not permit the sale to proceed.
“They [banks] really need to sit down and look at each case individually. In the last three or four years, the banks have not been active in getting these properties to the market, which is falling all the time. It’s very difficult for some people, they’re struggling to pay their mortgages, and they’re not allowed to sell,” said Mr Farrell.
In Ballinasloe, auctioneer John Dolan has resorted to advertising the fact he has cash only and mortgage-approved buyers lined up, but who are unable to find the right home because banks are preventing sales.
See full story in this week's Connacht Tribune.

shangri la

When will the repossessions of residential homes start en masse do you think? There are tens of thousands of mortgages 6+ months in arrears but there is not enough effective demand for that amount.

Zamboni

shangri la wrote: »

When will the repossessions of residential homes start en masse do you think? There are tens of thousands of mortgages 6+ months in arrears but there is not enough effective demand for that amount.

There is no political will to stop the repossession moratorium.
Inaction is the preferred choice of the politician on such topics.

oflahero

The moratorium continuing on PPRs I can understand, politically at least. But there's no political (or sentimental) reason there shouldn't be a bloodbath of repossessions of investment properties. But this just isn't happening.

(It is, of course, because banks would be afraid to crystallise the losses on their balance sheets and prefer instead to post loo-lah notional valuations, pretending the house of cards is still standing.)

Spiritofthekop

Weylin wrote: »

CONNACHT TRIBUNE HEADLINE THIS WEEK.
News





Banks blocking sales of half the homes on the market

January 19, 2012 - 7:00am by Enda Cunningham


Banks are preventing the sale of up to half of the properties on the market in Galway because the owners are in negative equity, auctioneers have claimed.
And despite cash buyers lining up to purchase in some parts of the county, the stock of ‘suitable’ residential properties for sale in some towns is drying up.
Mass repossessions are now looking increasingly likely as homeowners are struggling to meet repayments – which will result in a further collapse in prices.
With asking prices in the county down 60% on average since the height of the boom and by a similar level in Galway City, frustrated homeowners are attempting to exit the marketplace.
However, despite receiving realistic offers based on current market valuations, homeowners are being refused permission to sell by the banks because the full debt will not be cleared.
The situation has become so serious in Galway that Independent Deputy Noel Grealish has vowed to raise it in the Dáil.
He said a scheme needs to be devised whereby banks allow sales to proceed, and for the sellers to pay back the (negative equity) balance without interest or penalties.
South Galway auctioneer Colm Farrell told the Connacht Tribune: “At least half of the properties advertised for sale will not actually be sold because the banks won’t allow it.“Most of them are priced at around €100,000 more than what is achievable in the current market because they have big mortgages. Even if they have a realistic offer based on the current values, the bank will not permit the sale to proceed.
“They [banks] really need to sit down and look at each case individually. In the last three or four years, the banks have not been active in getting these properties to the market, which is falling all the time. It’s very difficult for some people, they’re struggling to pay their mortgages, and they’re not allowed to sell,” said Mr Farrell.
In Ballinasloe, auctioneer John Dolan has resorted to advertising the fact he has cash only and mortgage-approved buyers lined up, but who are unable to find the right home because banks are preventing sales.
See full story in this week's Connacht Tribune.

This makes a lot of sense and I would say across the country its the same problem.

Unbelievable the banks get the people into a mess and then wont let them sell up and try start again cause they know the house is more security than a personal loan passed on from neg equity.

You could not make it up.

amacachi

In real terms I'd be amazed if prices are level or above where they are now in 5 years time.