House prices still falling?

The_Conductor

Zamboni wrote: »

Aye, they are simply stating possibilities rather than probabilities.

It really is putting the most optimistic spin possible on things.
Employment levels are still falling (unemployment levels may be falling slightly- but this is more because people are emigrating, rather than because they have gotten jobs), lending to households is still falling (down .1% month on month- to 3.9% according to the latest Central Bank figures), mortgage lending is at levels last seen in the late 1970s, taxation is due to shoot up- alongside the cost of ownership of property........

Until the fundamentals have reached some sort of equilibrium- the Central Bank can issue reports saying we are between 12 and 20% undervalued to their hearts content- it means precisely nothing.

They talk about using fundamentals- however they seem to be missing several pieces of the jigsaw puzzle here- namely- sentiment, availability of credit, stability of the economy in general, future job prospects for those demographics most likely to want to settle roots...........

Sure- it'll cost significantly more for an apartment in Germany than here- but then again- you might actually be able to get a job in the immediate vicinity in Germany- versus a commute from Wexford to Dublin here in Ireland (if you are able to find a job that is).........

I don't like to be overly negative- but (and there is always a but) reports from the Central bank like this seem more like political manifestos than they do objective assessments of Ireland, its property market and where the country is going in the near to midterm.

robd

Zamboni wrote: »

This just in - House prices are (allegedly) undervalued by up to 26%...

http://www.irishtimes.com/newspaper/breaking/2012/0430/breaking29.html

I remember attending macro economic lectures for a masters course, a number of years back as the crash was just starting to unfold. The lecturer was a deputy divisional head (now divisional head) in Central Bank. We were having a heated exchange in regard to why Central Bank were releasing upbeat forecasts when it was plain to see to anyone doing the analysis that market was starting to tank.

What I/we got back was a wry smile and a statement to the effect that the central banks core mandate is stability and as such all statements should attempt to not startle the market etc. etc.

Essentially the central bank has Vested Interest in trying to calm the market and instill confidence, as such this release should be taken with an ocean full of salt.

Keep an eye on the CSO residential property figures. When we have a YOY increases for > 12 months there's some change that market has recovered. You'll miss the very cheapest of the market but you don't want to risk buying before it hits bottom and catch that falling knife. Always buy when market is increasing.

Also keep an eye on mortgage lending figures. Wait till they're increasing by at least 2-3% YOY for 1 year also.

Ignore all current reports which are trying to make positive from the fact that for 1 month (out of 5 years) house prices haven't decreased. 1 month is to sensitive in a normal market, let alone a stalled market with low sales.

Unfortunately the way the world works it's in still in most peoples interest for house prices to increase, thus there's an overwhelming tendency for positive rubbish spin to support this. Most people who vet these reports are 50's plus with houses paid for.

Snakeblood

I rather wish that anyone who participates in articles like these has all their quotes from all such articles posted, so you could see who is an idiot and who is a liar.

MysticalRain

At this point, I consider the central bank to be par with FAS, the HSE and the department of finance i.e an institution so rotten to the core that it should be disbanded and rebuilt from scratch. Why we pay big salaries to the sort of people who seem to think that promoting another property bubble has anything to do with "financial stability", I'll never know.

jmayo

robd wrote: »

What I/we got back was a wry smile and a statement to the effect that the central banks core mandate is stability and as such all statements should attempt to not startle the market etc. etc.

Well no one could ever accuse the CB of doing somehting to rock the market.
After all wasn't htis excuse trotted out when the banks were up to their shenanigans screwing their customers and facilitating tax evasion. :rolleyes:

As I keep saying this is the same institutions that long before Anglo and seanie fitz were heard of, allowed at least two dodgy corrupt banks operate in Ireland which left many customers without their money.

MysticalRain wrote: »

At this point, I consider the central bank to be par with FAS, the HSE and the department of finance i.e an institution so rotten to the core that it should be disbanded and rebuilt from scratch. Why we pay big salaries to the sort of people who seem to think that promoting another property bubble has anything to do with "financial stability", I'll never know.

They are too ingrained into the system and not fit for purpose.