Why do you think the market is at or near the bottom

shangri la

Before beginning, if you are one of the majority of people who believe the market has a significent way to go before hitting the bottom can you please not post in the thread or you will drag it off topic and start an argument over 1 or 2 points which will be wasteful of a potentially enlightening thread.



If you think the market is at or near the bottom can you give reasons why you think so?

jmayo

I think it is at the bottom because
a) brendan o'connor
b) frank fahey
c) brendan burgess
c) an estate agent
d) a builder
e) a developer
f) a landlord/property investor
all told me so.

Also someone told me
house prices can't ever go below cost of build
and
they aren't making anymore land.

Sorry can't think of any other reasons.

EDIT just for Marcusm....:rolleyes:

Marcusm

jmayo wrote: »

Also someone told me
house prices can't ever go below cost of build

That actually is untrue for a number fo reasons. Where demographics are such that the population is decreasing (not the case across all of Ireland), the cost of building will be fairly irrelevant as ultimately not all the property will be needed.

This will be true in a substantial number of provincial towns (esp in the South East, e.g. Gorey) where there has been such a level of overdevelopment in the expectation of the continuous transfer of population from Dublin that rebuild costs are effectively irrelevant. At some stage, the unoccupied properties will need to be sold for whatever can be obtained for them or else knocked down.

This will also apply to substantial estates of second home properties.

Additionally this can also apply on a micro basis such as where the wrong type of properties have been built. Does anyone really want to spend substantial amounts to live in a small apartment in Carrickmines just off the M50 with limited transport links?

Theboinkmaster

shangri la wrote: »

Before beginning, if you are one of the majority of people who believe the market has a significent way to go before hitting the bottom can you please not post in the thread or you will drag it off topic and start an argument over 1 or 2 points which will be wasteful of a potentially enlightening thread.



If you think the market is at or near the bottom can you give reasons why you think so?

already extensive current thread on this:

http://www.boards.ie/vbulletin/showthread.php?t=2056521203

RasTa

Never mind...

shangri la

Theboinkmaster wrote: »

already extensive current thread on this:

http://www.boards.ie/vbulletin/showthread.php?t=2056521203

the people who believe the prices will drop 10%+ are going on the attack on people who believe the opposite to the point where those people are either too intimidated to give their opinion in that thread or you have the less articulate of that group fighting their corner with the argument that babies born today will buy a house here in 30 years.

I'm trying to understand why some people believe the market is currently at or near the bottom without amateur speculators calling them fools.

Victor

jmayo wrote: »

I think it is at the bottom because
a) brendan o'connor
b) frank fahey
c) brendan burgess
c) an estate agent
d) a builder
e) a developer
f) a landlord/property investor
all told me so.

Also someone told me
house prices can't ever go below cost of build
and
they aren't making anymore land.

Sorry can't think of any other reasons.

EDIT just for Marcusm....:rolleyes:

Your post could come across as snide and sarcastic - you might leave that for later in the thread. People are perfectly entitled to post and ask questions.

---

Also someone told me house prices can't ever go below cost of build

I realise you are being sarcastic, however, to explain it to others.

The value of land can drop below zero. There are houses in Limerick (and many other places), that have dodgy neighbours, worth much less than what it would cost to build them. Likewise, a vacant building with contaminated ground or similar would mean you would have to pay money before you even had a building site. Similarly, if there are planning or other restrictions on a site, substantial contributions may need to be made - these can run to tens of thousands of euros.

RATM

I don't yet believe the market has hit the bottom, so long as unemployment remains static and the banks don't lend there is only one way for it to go. Unemployment (and the threat of it for those in less secure jobs) is a big factor in peoples decisions to buy. It currently stands at 15% but my guess is that there is another 15%-20% of people who are scared stiff of buying because their job has little or no certainity. Fear paralyses markets and that is what we are seeing right now in the market- fear of losing a job, not being able to pay bills, etc.

But on the other hand I never forget Warren Buffet's famous words on investing-'"you should be fearful when people are greedy (top of boom cycle) and greedy when people are fearful".

As said I'm not convinced that we are yet at the bottom. However someone on another thread recently pointed out a 2 bed apartment in Waterford city center on sale asking €40k. Rents there for 2 beds are circa €550pm. I calculated a potential gross yield of 12.5%, only allowing for 10 months rental income per annum to give a cushion. If a gross yield of 12.5% can be achieved (i.e. is it going to be easy to rent?) then investors will come back into the market.

So in short we are not at the bottom yet but there are a few bargains about and I do feel that the next 12-18 months will see cash rich investors being greedy whilst the population at large is being fearful with more austerity budgets on the way.

okiss

I think the market has some way to go before hitting the bottom.
Certain areas will see low house prices for a long time.
The reason I stay this is due to unemployment rates. The fear of what will happen in regards to jobs and wages is stopping people from buying along with the banks not giving out money. Also wages have fallen and the cost of living has gone up - just look at the cost of petrol and the vat rate rising.
Some people who have money could wait for a period of time and buy property at a realistic price but they will be paying in cash as the banks will not give out money for a buy to let property. The landlords and banks have buy to let property which is worth a lot less then the price paid and the social welfare have dropped the rent allowance. Anyone who is renting is looking for cheaper rent or moving for cheaper rent.

shangri la

I think the main problem/crossed wires we are having is that we are talking about "The Market". The midlands market is totally different to the south county dublin market. Until we differenciate between them we are going to go round in circles.

We probably need to go further and separate houses and apartments.

meglome

shangri la wrote: »

I think the main problem/crossed wires we are having is that we are talking about "The Market". The midlands market is totally different to the south county dublin market. Until we differenciate between them we are going to go round in circles.

We probably need to go further and separate houses and apartments.

Very true. The house next to the GF's family home sold for 1.1m a few months ago, in South Dublin. Of course that same house will have dropped millions since the bust.

This was a specific house in a specific area, with most houses, in most areas, there are more falls to come.

smallerthanyou

I don't think we're at the bottom quite yet but at the same time I don't think the type of houses I'd want to buy in the area I want to buy will fall by 10+% in the next year or two.

However I do think that once they stabilise they'll just stabilise, not go up. So I'm willing to sit it out for a year or two on the chance that they do fall by 20% but I don't expect a bounce.

Ritchi

I reckon anyone buying over the next year or two won't end up doing too badly. Assuming they borrow within their means and they get a place in an area they're happy with.

shangri la

Would you estimate that the SCD housing market is within 10% of the bottom?

I still see mostly ridiculous asking prices for relatively poor houses and this is meant to be the most stable market of the lot.

RasTa

Biggest drops will continue to be in Dublin

http://www.irishtimes.com/newspaper/breaking/2012/0124/breaking27.html

Ritchi

shangri la wrote: »

Would you estimate that the SCD housing market is within 10% of the bottom?

I still see mostly ridiculous asking prices for relatively poor houses and this is meant to be the most stable market of the lot.

I have no idea, some houses seem to be reasonably priced(although I'm making assumptions of asking prices being well above sell prices), and some are way off. I assume most of the ones that are way off haven't a hope in being sold.

jmayo

Victor wrote: »

Your post could come across as snide and sarcastic - you might leave that for later in the thread. People are perfectly entitled to post and ask questions.

Ah come on.
The reason for the sarcasm was I felt the tone of the opening post was akin to that seen on another famous forum (actually owned/ran by one of the people named on my list) where people of certain opinions were dismissed and told they were not welcome.
Of course on that forum they were actually banned and thus prevented from making their point.

I felt anyone who doesn't believe the market is at or near the bottom was told to keep their opinions to themselves and were not welcome.
Now correct me if I am wrong, but I didn't think the OP had a right to only demand opinions that they may like ?

BTW I think a fair few people around here would agree I adequately summed up the people who have been telling us for years that the market was at or near the bottom.

Victor wrote: »

---

I realise you are being sarcastic, however, to explain it to others.

The value of land can drop below zero. There are houses in Limerick (and many other places), that have dodgy neighbours, worth much less than what it would cost to build them. Likewise, a vacant building with contaminated ground or similar would mean you would have to pay money before you even had a building site. Similarly, if there are planning or other restrictions on a site, substantial contributions may need to be made - these can run to tens of thousands of euros.

It is also down to old demand.
If nobody wants something then you need to offer it at a price that will convince someone to buy.

Tigger

jmayo wrote: »

I think it is at the bottom because
a) brendan o'connor
b) frank fahey
c) brendan burgess
c) an estate agent
d) a builder
e) a developer
f) a landlord/property investor
all told me so.

Also someone told me
house prices can't ever go below cost of build
and
they aren't making anymore land.

Sorry can't think of any other reasons.

EDIT just for Marcusm....:rolleyes:

these and my dad said so