House prices still falling?

lolo62

thinking of buying and have been looking around at prices

the house i rent is one of those red-brick terrace, tiny house one up one down.

checked out one for sale a couple of years ago on the road and it was 113,000

one gone up for sale there recently for 71,000

does anyone think this is an all time low or are they going to keep falling?

is now the best time to buy or should i wait?

thanks!

JCabot

I think they are gona still keep going and the reason is nama are sitting on thousands and we have massive surplus with many people leaving this country daily.

Marcus_Crassus

I agree with JCabot -- they will continue to fall.

IMO, there's still a long way to go, especially in urban areas. Some people seem to be living in 2006 with the prices that I see.

lolo62

for me this is a good thing...it means i might actually be able to afford my own place

i did the sums last night, if i was approved for a 20 year mortgage on 80,000 i would be paying at least €100 less per month for repayments than rent!

seems bananas...ive always thought of having a mortgage as being a burden not a money saving exercise!

NIMAN

lolo62 wrote: »

for me this is a good thing...it means i might actually be able to afford my own place

i did the sums last night, if i was approved for a 20 year mortgage on 80,000 i would be paying at least €100 less per month for repayments than rent!

seems bananas...ive always thought of having a mortgage as being a burden not a money saving exercise!

But if your circumstances change, such as losing your job, getting ill etc, its harder to walk away from a mortgage than it is a rented place. Always bear that in mind.

lolo62

NIMAN wrote: »

But if your circumstances change, such as losing your job, getting ill etc, its harder to walk away from a mortgage than it is a rented place. Always bear that in mind.

i know its a big step...definitely, but i figure im pretty much always going to be paying rent of at least €400 amonth so why not invest instead

if house prices keep going the way they are i could get a small place for a mortgage that wouldnt give me nightmares!

NIMAN

You do make a point, but always consider that your mortgage repayments have the potential to go up quite a bit in the future if interest rates rise. Doesn't look likely for the next few years, but no-one knows whats down the line.

But I do agree that it is a good time for buyers now, should be plenty of bargains out there if you have the means of buying. I myself am selling a house for €85k, that would have got €180k in the peak.

lolo62

NIMAN wrote: »

You do make a point, but always consider that your mortgage repayments have the potential to go up quite a bit in the future if interest rates rise. Doesn't look likely for the next few years, but no-one knows whats down the line.

But I do agree that it is a good time for buyers now, should be plenty of bargains out there if you have the means of buying. I myself am selling a house for €85k, that would have got €180k in the peak.

i know i have a lot of research to do before seriously going ahead with anything...theres insurance and all that to consider too

it doesnt feel great to think about all the people who were hard-done-by and have lost out so dramatically..kind of like cashing in on someone elses misfortune

its just great to be able to even just consider it to be honest...would never have been an option in the past (im a musician!)

iguana

lolo62 wrote: »

it doesnt feel great to think about all the people who were hard-done-by and have lost out so dramatically..kind of like cashing in on someone elses misfortune

its just great to be able to even just consider it to be honest...would never have been an option in the past (im a musician!)

It's not even slightly cashing in on someone else's misfortune. All you would be doing is buying a house for closer to it's actual value. Just bear in mind that in most cases they still aren't at actual value so bide your time and get the best for your money.

the GALL

iguana wrote: »

It's not even slightly cashing in on someone else's misfortune. All you would be doing is buying a house for closer to it's actual value. Just bear in mind that in most cases they still aren't at actual value so bide your time and get the best for your money.

Of course getting a cheap house X amount under what people paid at the height of the boom is cashing in on someones misfortune, especially when there are people who paid crazy money at the height of the boom and lost their houses/jobs through no Fault of their own and or up to their tits in debt and probably will be for the rest of the lives is cashing in on someones misfortune. Cop yourself on.
But on the flip side sure f*^k it not your problem grab a bargain while there out there, just if it goes t1ts up for you, well.........

Stavro Mueller

As far as I know, nobody put a gun to anyone's head and forced them to buy a house during the boom. I doubt either that any of these people gave those paying "dead money" a second thought as they got the keys to their wooden floored paradise.

dory

the GALL wrote: »

Of course getting a cheap house X amount under what people paid at the height of the boom is cashing in on someones misfortune, especially when there are people who paid crazy money at the height of the boom and lost their houses/jobs through no Fault of their own and or up to their tits in debt and probably will be for the rest of the lives is cashing in on someones misfortune. Cop yourself on.
But on the flip side sure f*^k it not your problem grab a bargain while there out there, just if it goes t1ts up for you, well.........

This doesn't make any sense. Are you saying we now shouldn't go buy cheaper property? Should we wait and hope another bubble is created? I was laughed at by people for not 'getting my foot on the ladder' when I didn't want to pay €365k for an apartment. Nothing wrong with seeing value and going for it.

bmaxi

cymbaline wrote: »

As far as I know, nobody put a gun to anyone's head and forced them to buy a house during the boom. I doubt either that any of these people gave those paying "dead money" a second thought as they got the keys to their wooden floored paradise.

Bit harsh there friend. You have to consider that those buying at the time may have been those very people who were paying "dead money". It may have seemed prudent as they watched their rent head for the moon.

mari2222

The "experts" opinion as per the media is that there will be double digit percentage drop in price in 2012, so at least 10% less by Christmas.

Readyhed

mari2222 wrote: »

The "experts" opinion as per the media is that there will be double digit percentage drop in price in 2012, so at least 10% less by Christmas.

No one knows and in the words of Warren Buffett anyone who tells you that a market hits the bottom is probably a fool or a salesman.

In investment terms it is called "bottom fishing".

There are no experts. Ok Nama has loads of unsold properties but "experts" will tell you that this is "priced in." Anything anyone tells you that is a reason for the market to move in the future is already "priced in" unless it is a secret that only they know.

Estate Agents will always tell you "Now in the time to buy" regardless of where you are in the cycle.

If you need a house to live in long term, can afford the mortgage and the repayments are less than the rent then buy it now and forget about investment considerations.

If you do otherwise you are simply speculating on future movements in the market just like guys did in the boom. - They thought the curve would never bend down - some now think it will never bend up. It will but no one knows when.

iguana

Readyhed wrote: »

If you do otherwise you are simply speculating on future movements in the market just like guys did in the boom. - They thought the curve would never bend down - some now think it will never bend up. It will but no one knows when.

Not really. House prices on the whole are still no where near value. In every other crash prices have not only returned to value but they have undershot. There may be the rare house out there that you could haggle to get for a fair price near it's actual value but for the most part house prices still have a long way to go to reach value using any of the traditional means of calculating value.

There are also still a number of artificial props holding up the market which are extremely unlikely to last forever. The odds are prices will eventually go up again but all the indicators say that is a long way off and there will be further falls before that happens.

preddy

So on average offer 8-15% less then asking to account for the 2012 drop?

L1011

preddy wrote: »

So on average offer 8-15% less then asking to account for the 2012 drop?

The asking is rarely what the house will sell for - even if you pay 15% less than the asking price, if prices drop 15% for that house type & area, you've still dropped 15%.

Stavro Mueller

Things aren't helped either by the lack of official information as to how much houses are actually selling for. There was talk of creating a register but that hasn't come onstream yet.

Readyhed

iguana wrote: »

Not really. House prices on the whole are still no where near value. In every other crash prices have not only returned to value but they have undershot. There may be the rare house out there that you could haggle to get for a fair price near it's actual value but for the most part house prices still have a long way to go to reach value using any of the traditional means of calculating value.

There are also still a number of artificial props holding up the market which are extremely unlikely to last forever. The odds are prices will eventually go up again but all the indicators say that is a long way off and there will be further falls before that happens.

In which case everyone should sell their house and rent for a few years. Buy again and make a profit. A few years ago I heard Patrick Honahan guiving this exact answer to the claim that house prices will continue to fall. (think ift was on "Freefall")

I have worked in the real estate industry for 25 years both here and in the UK and in europe.
I have seen bust boom cycles in the UK and in Spain/Portugal.

No one ever accurately predicted the crashes would occur. I personally predicted the Irish crash in 2004. I always said it was coming but could not say when. Nor could I say that
prices would not increase further before the fall.

No one ever guesses the bottoms correctly.If anyone could they would amass enormous wealth from this capability.

They last longer than everyone thinks and the upturn usually comes when everyone has long since given up predicting it.

Are you suggesting the OP should wait and hope to make a better deal by getting the property cheaper in a year or two?

iguana

Readyhed wrote: »

Are you suggesting the OP should wait and hope to make a better deal by getting the property cheaper in a year or two?

I think anyone wanting to buy a house should wait until they can buy one at value. There are a number of ways to calculate value so not really that hard to work out, although the artificial props to the housing market such as rent allowance needs to be accounted for or you'll end up overpaying.

And then once houses reach value, unless you have a very unique property in mind (and there ain't a lot of them) there is no harm in waiting a little longer and seeing what happens. The housing market isn't the stock market, prices don't rush back up overnight.

No one ever accurately predicted the crashes would occur.

Well that's just not true. Quite a few posters here, on AAM and then the pin quite demonstrably predicted the top correctly.

Readyhed

Well that's just not true. Quite a few posters here, on AAM and then the pin quite demonstrably predicted the top correctly.

If you keep predicting you will eventually be right. McWilliams proved this.
No one on AAM or Propertypin predicted the collapse of Lehman's or the world financial crisis. I predicted the fall in 2004 but I expected it to come from the pressure from increasing Interst Rates from the ECB whichstarted happening. I didn't stop predicting it until 2006/2007 so you could say I predicted the top of the market.

I think anyone wanting to buy a house should wait until they can buy one at value

You used the phrase "actual value" in your previous post. Others say "over-valued" and "uinder-priced" and things like this. The proper value for a house in a given place at a given time is what a buyer is prepared to pay for it.

People seem to think there is a "proper" value for their house carved in stone somewhere. The fact that they have to sell for substatially less than this is due to artificial conditions that affect the market at this moment in time. This makes no sense.

Nevertheless I fully agree that people should wait until they are sure
and there is certainly no panic. In don't think I suggested there was.


My point is treat the purchase of a house as the purchase of a home - not as an investment.

blueturnip

iguana wrote: »

I think anyone wanting to buy a house should wait until they can buy one at value. There are a number of ways to calculate value so not really that hard to work out, although the artificial props to the housing market such as rent allowance needs to be accounted for or you'll end up overpaying.

How can you calculate value? I have seen one formula based on rent in the area etc, just wondering what else you might have up your sleeve?!

iguana

blueturnip wrote: »

How can you calculate value? I have seen one formula based on rent in the area etc, just wondering what else you might have up your sleeve?!

You can also calculate it by looking at the average income of the type of person that traditionally lives in the area. Then multiplying by somewhere between 3.5 and 5 to account for a deposit and partner's salary.

Then do the rental formula and venn diagram the two lots of figures.

blueturnip

iguana wrote: »

You can also calculate it by looking at the average income of the type of person that traditionally lives in the area. Then multiplying by somewhere between 3.5 and 5 to account for a deposit and partner's salary.

Then do the rental formula and venn diagram the two lots of figures.

Thanks Iguana! Stupid question, how do I know what the average income is? Do I go along the lines of what we can afford etc. i.e. I know that we can afford to buy in certain areas rather than others, as in unfortunately we cannot afford a half million euro house! So this would mean taking our earnings as the average?

Readyhed

Just a point OP. It is perfectly possible that prices will fall more in the next year or so or they might just stay flat. It is true that any chance of a rise is really remote.

Nevertheless it takes time to find the right place (especially as you will not want to be re-selling it again for a long time) so it doesn't hurt to look
around and get a feel for the market.

Here is another view on the subject

http://www.independent.ie/business/personal-finance/property-mortgages/house-prices-have-hit-bottom-and-will-stay-there-for-years-3049095.html

Were Goodbody's the one's who suggested a "soft landing" ?

http://www.finfacts.com/irelandbusinessnews/publish/article_10007496.shtml

Zamboni

Readyhed wrote: »

Here is another view on the subject

http://www.independent.ie/business/personal-finance/property-mortgages/house-prices-have-hit-bottom-and-will-stay-there-for-years-3049095.html

Mr O'Leary said prices had now hit the bottom.

"While it would be our contention that prices are undershooting due to lack of access to credit and a weak domestic economy, this analysis suggests that residential property, at 60pc-plus from peak, is now transacting for prices very close to, or at, fair value," he said.

That report does not indicate a stablilsation of price.
Peak price has no correlation to current/future value.
Spin.

Readyhed

Zamboni wrote: »

That report does not indicate a stablilsation of price.
Peak price has no correlation to current/future value.
Spin.

Absolutely. A friend once used to say. Paper never refused ink.

Spiritofthekop

Readyhed wrote: »

Just a point OP. It is perfectly possible that prices will fall more in the next year or so or they might just stay flat. It is true that any chance of a rise is really remote.

Nevertheless it takes time to find the right place (especially as you will not want to be re-selling it again for a long time) so it doesn't hurt to look
around and get a feel for the market.

Here is another view on the subject

http://www.independent.ie/business/personal-finance/property-mortgages/house-prices-have-hit-bottom-and-will-stay-there-for-years-3049095.html

Were Goodbody's the one's who suggested a "soft landing" ?

http://www.finfacts.com/irelandbusinessnews/publish/article_10007496.shtml

The good old Irish Independent who removed the ability to leave comments on their online media spin pages as soon as they realized that nearly every single person was leaving educated comments that did not suit there obvious vested interest agenda because they are always trying desperately to lie to people that house prices are rising again and bottomed out. No surprise that their online pages hits dropped as soon as the comment ability had been removed. At least journal.ie allows people to comment on the media spin.

Never ever ever let the media make a decision for you!

A friend of my Dads was looking at a house just out of interest the other day and the DNG agent was brazenly & loudly telling everyone looking at the house that property was on the way up again! That was until a well educated man who knew he stuff put him in back in his uneducated vested interested box very quickly and he backed down very fast. It was supposedly all very red faced for the young estate agent after that.

jmayo

lolo62 wrote: »

thinking of buying and have been looking around at prices

the house i rent is one of those red-brick terrace, tiny house one up one down.

checked out one for sale a couple of years ago on the road and it was 113,000

one gone up for sale there recently for 71,000

does anyone think this is an all time low or are they going to keep falling?

No property is not AT AN ALL TIME LOW.
The prices are just lower than they were during one of the biggest property bubbles ever experienced worldwide in history.
It was definitely the biggest bubble in the history of our country.
Stop comparing current prices to bubble prices for a start.

I don't believe there are any economic indicators to lead one to believe that house/property prices in Ireland will not go down further.
We have not seen any meaningful number of repossessions of property in mortgage default, we have not seen the necessary cuts in rent allowance which provides a false bottom to a huge chunk of the rental market, we have not seen half of the necessary budgetary cuts to bring our current budget deficit back in line and that is before we ever mention interest rate increases.
Added to that look at unemployment and migration rates.

lolo62 wrote: »

is now the best time to buy or should i wait?

That is a personal decision.
If you really want your OWN place, can afford a sizable deposit, can get a necessary mortgage, can adequately afford repayment increases/salary decreases, are reasonably sure of future employment and don't mind paying more for something than it will be worth in a year or two then go ahead.

NIMAN wrote: »

But I do agree that it is a good time for buyers now, should be plenty of bargains out there if you have the means of buying. I myself am selling a house for €85k, that would have got €180k in the peak.

Every bloody thing is a bargain if you compare it to the mad prices that existed between 2002/2007.

I really wish people would stop using the bubble prices as a guide. :mad:
They were not realistic, unsustainable and so far off the norm the defies belief.

the GALL wrote: »

Of course getting a cheap house X amount under what people paid at the height of the boom is cashing in on someones misfortune, especially when there are people who paid crazy money at the height of the boom and lost their houses/jobs through no Fault of their own and or up to their tits in debt and probably will be for the rest of the lives is cashing in on someones misfortune. Cop yourself on.
But on the flip side sure f*^k it not your problem grab a bargain while there out there, just if it goes t1ts up for you, well.........

Ah FFS.
If you paid crazy money (your own words) buying at the height of the boom you were not just misfortunate, you were something else and it is your own fault not anyone elses.

The more I think about it the more I reckon the words "personal responsibility" should be tatooed on some peoples foreheads.

I just find the fact you are telling other posters to cop on slightly ironic.

Zamboni wrote: »

That report does not indicate a stablilsation of price.
Peak price has no correlation to current/future value.
Spin.

Why do people still use the peak bubble price as some sort of barometer ?

Readyhed

jmayo wrote: »

Every bloody thing is a bargain if you compare it to the mad prices that existed between 2002/2007.

I really wish people would stop using the bubble prices as a guide. :mad:
They were not realistic, unsustainable and so far off the norm the defies belief.

Why do people still use the peak bubble price as some sort of barometer ?

You are not alone !

I've been saying this for years. Using as a benchmark, prices set by lunatics in a property boom that was the most excessive in history, is just silly .(Not just Irish history - World history)

I think there was a statistics that prices per square metre in Dublin 4 were the highest on Planet Earth - Ever!

Proves people have still got a lot to learn. Even eminent economists.

Kinda like evaluating people's personality by comparing them to Jedward.