Property prices are on the way back up!

Henry Ford III

Monty Burnz wrote: »

...And of course mortgage interest is dead money.

If you could infacta get a mortgage.

Victor

Folks, constructive posts only please.

StillWaters

Things happening very fast.

Since this thread started we have the bones of a deal on the bank debt, legislation on personal insolvency, a new mortgage lender entering the Market.

Do any bears want to come out of the pit in light of these, or is it too early yet?

Monty Burnz

StillWaters wrote: »

Things happening very fast.

Since this thread started we have the bones of a deal on the bank debt, legislation on personal insolvency, a new mortgage lender entering the Market.

Do any bears want to come out of the pit in light of these, or is it too early yet?

Still looks like a total shambles to me. The possible bank deal has no impact on the next 3 austerity budgets. Government spending is still going to be slashed by billions. The personal insolvency legislation could see tens of thousands of new properties hitting the market. The new mortgage lender is interesting, but we'll see how much they plan to lend and what rates they lend at. They could even be simply buying up mortgage books to run them down with no new lending. We'll know more about their impact in a year or two.

goodie2shoes

Victor wrote: »

Folks, constructive posts only please.

the problem is the minute one tries to be positive about the property market, these people (and i think we all know who they are) just attack/insult you.

personally they have no affect on me as (imho) anyone that feels the need to insult others doesn't have much of an argument to start with.

i just ignore them, which seems to annoy them even more.

problem is it's difficult to have a reasoned debate/discussion, which is what i thought these forums were for?

C'est la Vie!:)

StillWaters

Monty Burnz wrote: »

The personal insolvency legislation could see tens of thousands of new properties hitting the market.

Thats not my reading of it, this combined with the mortgage to rent scheme underlines the lack of political appetite for reposessions. I just can't see it happening.

The only unknown known left is NAMA, and where that stands in the fine print of the euro deal.

goodie2shoes

StillWaters wrote: »

Things happening very fast.

Since this thread started we have the bones of a deal on the bank debt, legislation on personal insolvency, a new mortgage lender entering the Market.

Do any bears want to come out of the pit in light of these, or is it too early yet?

i made this point earlier but was insulted for so doing.
i firmly believe that once things start to turn (and we are already seeing green shoots), things will move fairly quickly.

this is what happens when the herd/flock move. i'm not saying we'll have property prices at pre-bust/boom prices. they were silly prices anyhow and a return to that would not be welcome.
before people jump on my back i never said or implied that would happen btw.

Monty Burnz

StillWaters wrote: »

Thats not my reading of it, this combined with the mortgage to rent scheme underlines the lack of political appetite for reposessions. I just can't see it happening.

There's an awful lot of properties - 15% of PPRs, even more BTLS - where people are in arrears. If even 10% of those hit the market, that's tens of thousands more properties looking for a buyer. The alternative is that the system just lets people who aren't paying keep living in their properties for free, at which point anyone with a brain will stop paying their mortgage whether they can afford it or not.

We'll see how it pans out in the next few years.

StillWaters wrote: »

The only unknown known left is NAMA, and where that stands in the fine print of the euro deal.

Well, I'd argue there are a lot of unknowns:

NAMA
Rent Allowance cuts
Repossessions of PPRs
Repossessions of BTLs
Future of the euro
Ireland's future in the euro
Unemployment levels
Emigration levels
Future economic growth/shrinkage

That's for starters. I genuinely don't know how most of them will pan out, but I have a sneaky feeling that they won't all come up trumps.

riclad

Another unknown is how many people will go for new bankruptcy process , or threaten to do so, ie banks will
be under pressure to write down some loans ,compromise
with people who have large mortgages on overpriced
houses .
This could effect bank lending and the property market in general.

StillWaters

I'm not going to answer in detail, too busy being happy today, not because my house might have gone up €20, but because of the seismic shift in Europe.

• No more cuts to RA, although elibibility may be curtailed more
• Very limited reposessions
• Euros future has been secured and steps towards banking union
• 3rd largest trade surplus in Europe
• Big spending on the way in stimulus package, engine of growth being switchedd on (bringing its own challenges of course).
• Signs of a much needed credit push

Monty Burnz

StillWaters wrote: »

I'm not going to answer in detail, too busy being happy today, not because my house might have gone up €20, but because of the seismic shift in Europe.

• No more cuts to RA, although elibibility may be curtailed more
• Very limited reposessions
• Euros future has been secured and steps towards banking union
• 3rd largest trade surplus in Europe
• Big spending on the way in stimulus package, engine of growth being switchedd on (bringing its own challenges of course).
• Signs of a much needed credit push

1. No more cuts to RA? How can you claim this for sure? Although limiting eligibility will have a similar depressive effect on rents.
2. Repossessions are an unknown, but there's no reason to believe there won't be many thousands in the BTL sector, unless you can explain how/why failed investors will be allowed to hold onto them?
3. The euro's future is far from secure, and our place in it is also in doubt.
4. Our trade surplus is purely a function of transfer pricing. If corpo tax is harmonised, those 'exports' will stop being routed through Ireland and we'll be screwed.
5. What stimulus package? Link?
6. What 'credit push'? Link?

Oh, and I forgot to mention new property taxes (not the €100 peanuts tax that had everyone up in arms, a tax of thousands). And of course we have an 8% budget deficit that will have to be made up in cuts and tax increases in the next 3 years. And the risk of tax harmonisation that will not only screw up transfer pricing from the likes of Google, but will also hammer real jobs in pharma, technology, aviation services etc. etc.

StillWaters

Monty Burnz wrote: »

Oh, and I forgot to mention new property taxes (not the €100 peanuts tax that had everyone up in arms, a tax of thousands).

Ah now, where are you getting thousands from? The ESRI proposed 2.50 per 1,000 value, which in my view won't be far off.

Monty Burnz

StillWaters wrote: »

Ah now, where are you getting thousands from? The ESRI proposed 2.50 per 1,000 value, which in my view won't be far off.

We'll see I guess. But even at €2.50 per 1000, a €300,000 family home would be attracting a tax of €750 per annum of your after-tax income. For a higher tax-rate payer, that's nearly €1500 of your pre-tax income down the tubes.

goodie2shoes

We'll see, we'll see .....

that's your response to most things.
you haven't got a clue.
be honest and admit it.

Monty Burnz

goodie2shoes wrote: »

you haven't got a clue.
be honest and admit it.

goodie2shoes wrote: »

anyone that feels the need to insult others doesn't have much of an argument to start with.

Well this is embarrassing.

powerstation

I've been viewing houses these past few months and from what I have seen, estate agents have been trying their very best to inflate prices.

From the house owners perspective, that is fine, it's their job to get a good price for the owners. But the whole process feels unfair to me as a buyer.

I've been told in every house I have seen, that there are "multiple bidders", and felt the pressure to "come in high" or else face the risk of loosing out.

An agent handling a house for which I had no interest in first said he had no offers, then suddenly "remembered" a day later that he had an offer, and three weeks later now says he has two interested parties. He was trying to get the second bidder raise their offer, I better decide soon or I'll loose out. If indeed they are real parties, good luck to them.

Often, I come across an agent at a different viewing, who would then boast that they were able to sell a house I saw for "above asking price". I noticed that when I mention that I look forward to seeing the actual house price on the property registry due to come online in some weeks, some agents tend to get defensive, either looking down or changing the topic.

I feel that if I buy now I would be taking out a huge mortgage based on the word of property agents, some of who cannot entirely be trusted.

Which leads me to believe that once buyers have transparency in the property market, prices may well fall further. We may well see a "double dip" in property prices. That is, if a 0.2% increase can be considered to be a bump.

Monty Burnz

powerstation wrote: »

Which leads me to believe that once buyers have transparency in the property market, prices may well fall further. We may well see a "double dip" in property prices. That is, if a 0.2% increase can be considered to be a bump.

Well .2% is keeping up with general inflation, just about.

The_Conductor

goodie2shoes, Monty Burnz etc- play nice.......

NakedNNettles

All I see here in this thread are a few bitter property investors trying to talk up the property market so they can gain a bit of ground back on their negative equity. Great to see that those lads maintain their positivity despite the huge weights around their necks.

Don't fall for it people, if your out of property then stay out of it for the forseeable future.

No way could it be said that Europe's economic situation is in a position to bring stability to any market especially with Greece bordering on an exit from the Euro.

When one looks at the situation coldly and clamly it is easy to deduce that only a fool would invest in property in Ireland these days. There is a greater chance that the value will fall further before rising in the near future.

Henry Ford III

02/07/2012 - 07:11:40
The average house price around the country is continuing to fall despite the slight rise of 0.1% recorded for May of this year.

The national average asking price now stands at €172,000, down 2.6% for the period of March to June 2012, according to a report from Daft.ie.

In total, the cost of a house in Ireland is now 53% lower than in 2007.

Economist with Daft.ie Ronan Lyons said there were signs that the property market was stabilising in Dublin, but that the rest of the country lagged behind......

Dan133269

Monty Burnz wrote: »

The personal insolvency legislation could see tens of thousands of new properties hitting the market.

On that topic, the personal insolvency Bill as currently drafted, will it allow a debtor to stay in his/her home if their creditors agree to a write-down of their mortgage debt?

seamus

Dan133269 wrote: »

On that topic, the personal insolvency Bill as currently drafted, will it allow a debtor to stay in his/her home if their creditors agree to a write-down of their mortgage debt?

I don't think the bill will make any prescriptions on this in any direction.

Generally it will be pushing the debtor and creditor to come to some form of arrangement. In general I reckon the arrangement will be that the property is sold and the proceeds given to the bank. In some cases then the bank may do a leaseback-style scheme where the debtor pays rent to the bank for the period of the bankruptcy, which is put against the overall debt.
However in places where the bank can get market rent for the property (such as in Dublin), they may try to insist that the debtor leave the property while paying back a small amount against their debt. This means that the bank gets repayment + rent, rather than just the repayment.

But as I say, it's all about the agreement they come to.

NakedNNettles

House Prices continue to fall March to June.

http://www.rte.ie/news/2012/0702/two-house-price-surveys-continue-to-see-falls.html

StillWaters

No, the Bill does not really grapple with this issue at all. In fact a personal Insolvency Arrangement (PIA) is generally not allowed to require the debtor to sell the PPR, which is where the leaseback Seamus suggested might come into play.

In any case the lender must agree to the PIA, and in a lot of cases, it would not be in their interests to do so.

Duggys Housemate

RTE says, most pertinent part.

The Daft.ie survey for the months of March to June found that prices in the capital fell by 1.2% with mainly stable prices also recorded in the Cork and Waterford city areas.
In Galway and Limerick, city prices fell by between 3.4% and 3.9%, with the national average asking price at €172,000 - 53% below the peak of the market in 2007.
The Myhome.ie survey shows a decline in prices nationally of 3.2%, but with some areas of Dublin recording price increases.

1.2% a quarter is about 5% a year, a slow down in the fall but still a fall. Finally a soft landing. This was Japan's average fall per year. Galway and Limerick are falling at an annualised 16%.

Duggys Housemate

So no 3 month rises in those surveys. Yet, the bottom is soon enough I think.

Monty Burnz

Duggys Housemate wrote: »

So no 3 month rises in those surveys. Yet, the bottom is soon enough I think.

Prices usually get a bump in the spring and summer, and I imagine a lot of cash buyers are being flushed out due to worries about keeping money in the bank and the future of the euro. There aren't that many people with the cash to buy though, and when they have bought, they are out of the game. I expect to see falls in Dublin pick up again in the second half of the year.

Snakeblood

There was a previous question about how bears feel about the recent announcement of a deal over debt, and whether it makes them feel less bearish.

Well, in my case, yeah, it does.

It still doesn't fix the crippling unemployment, future tax rises to cover the current deficit (which is unrelated to bank debt, so is coming regardless of a bank deal), the euro problems, lack of transparency of house prices (which is supposedly now November), the feeling I have that property is still markedly overvalued considering how it has increased in the bubble vs. its fall in the bust etc.

But I do feel a bit better about things. I don't think this is the end of the road by any means, but maybe it's brought the time I want to buy a house in from 5+years to 2+ years, and have a look. Most of the other issues I've named will have to be sorted before I feel that property is a good investment.

Catweasel

powerstation wrote: »

I've been viewing houses these past few months and from what I have seen, estate agents have been trying their very best to inflate prices.

The vast majority of estate egents are very unprofessional. I've probably dealt with only one recently who was partly realistic and I've met with most of them in my area. They are generally clueless about valuation techniques and are guided by the vendor.

The funny thing is, they would be better off trying to get the market lower to stimulate transactions. I've never really understood why EA's try to fight over 10k. To them on 2% or so it's only worth 200 euro.

They'd be better off having an honest up front chat with the vendors so that they are realistic about price.

TheDriver

i have found EAs terrible over the last few months. They don't ring back, don't try to interest me in similar properties, run me through properties, tell me offers are on the table and don't really care to be honest. The old excuse about "i sold mine through an EA" because they have all the connections........yeah right.....