The madness has returned

Zamboni

Villa05 wrote: »

Looks like the real madness has been spotted by Investec. The snake that is the Irish mortgage market continues to eat itself in what can only be described as a kamikaze market


http://www.independent.ie/business/irish/investec-puts-300m-plan-for-new-mortgage-lending-on-hold-29818741.html

This is just, well, embarrassing.

Villa05

Ray Palmer wrote: »

Except that thread is based on the assumption you bought at the very peak. That premise is false as sales were slowing down by that point hence the crash. What about all the people that bought in a rising market?.

What proportion of the banks total mortgage book was lent between the years of 2004 to 2007?

Idbatterim

from the documentary "whos buying ireland" on rte earlier. neville isdell, former chairman and ceo of coca cola "the early adapters, the one's in the minority, have made a big mistake or they do very very well and in my view, its the minority who are normally right, because when the majority believe something, its already happened. he ended up buying the chq in the docklands.

Villa05

What was the discount he paid. Has residential come near that discount rates. Commercial and resdential are very different games.

How did the sage of omaha get on with his irish banks investment

gaius c

Villa05 wrote: »

What was the discount he paid. Has residential come near that discount rates. Commercial and resdential are very different games.

How did the sage of omaha get on with his irish banks investment

Think he said he paid about a third of the original price. Hope it works out for him but "ordinary investors" need to realise that these sort of deals are only available to "special people" with the right connections. It really shouldn't be used to draw parallels with small timers using their own cash or cash borrowed from Irish banks.

Scortho

Villa05 wrote: »

What was the discount he paid. Has residential come near that discount rates. Commercial and resdential are very different games.

How did the sage of omaha get on with his irish banks investment

I think he paid either 10 or 12 million for it.
The cost to build was around 40 million and when it was originally built id say it was worth more than 40 million anyway.
Of the top of my head Commercial property suffered much greater falls than residential.

jmayo

Idbatterim wrote: »

from the documentary "whos buying ireland" on rte earlier. neville isdell, former chairman and ceo of coca cola "the early adapters, the one's in the minority, have made a big mistake or they do very very well and in my view, its the minority who are normally right, because when the majority believe something, its already happened. he ended up buying the chq in the docklands.

You do know he is a major investor not someone looking for a family home and his funding will be sourced outside this state ?

Idbatterim

You do know he is a major investor not someone looking for a family home and his funding will be sourced outside this state ?

yes I do, but what he says, hits the nail on the head, for residential buyers too... When nobody else way buying, was the time to buy! it applies to any investment, shares, house buying, bonds etc...

because when the majority believe something, its already happened

I remember a minority at the time here on the property forum on boards, called the bottom, of course a broken clock strikes twice per day, but it was the herd mentality that drove up prices to ridiculous levels and it was herd mentality and over pessimism that caused them to overshoot...

desertcircus

Idbatterim wrote: »

yes I do, but what he says, hits the nail on the head, for residential buyers too... When nobody else way buying, was the time to buy! it applies to any investment, shares, house buying, bonds etc...

I remember a minority at the time here on the property forum on boards, called the bottom, of course a broken clock strikes twice per day, but it was the herd mentality that drove up prices to ridiculous levels and it was herd mentality and over pessimism that caused them to overshoot...

Recovery doesn't usually entail the disappearance of ninety per cent of the market.

Villa05

Idbatterim wrote: »

yes I do, but what he says, hits the nail on the head, for residential buyers too... When nobody else way buying, was the time to buy! it applies to any investment, shares, house buying, bonds etc...

When did the mass sell off occur in resedential property, as happens in all other markets, I must have missed it.

Lord Trollington

What is pushing up property prices at the minute is investors. People who actually have disposable cash to spend on investment properties. The banks are giving out very little mortgages, not enough to push the prices up to the extent that they are rising.

It's actually quite alarming.

You only have to look at the rents in Dublin rising week on week. 2 bed apartments that were once going for 1100/1200 last year are now at €1500/1600 a mere 12 months later. Houses to rent gone completely off the scale also.

It's pricing the working to middle class people out of the market. They are actually no family houses available to either rent or buy in Dublin at the moment. Not within the reach of of a normal family at least. I really don't see a solution to this in the short term.

Only a case of the rich getting richer and families continue to struggle to get accommodation.

murphaph

You can rent a nice 3 bed semi in West Dublin for €1100.

gaius c

Idbatterim wrote: »

yes I do, but what he says, hits the nail on the head, for residential buyers too... When nobody else way buying, was the time to buy! it applies to any investment, shares, house buying, bonds etc...

I remember a minority at the time here on the property forum on boards, called the bottom, of course a broken clock strikes twice per day, but it was the herd mentality that drove up prices to ridiculous levels and it was herd mentality and over pessimism that caused them to overshoot...

Not really. As I said above, he got a sweet deal only available to people with the right funding, contacts and connections. 65% off residential property prices in Dublin is and was not something available to the man in the street.

Villa05

Scortho wrote: »

I think he paid either 10 or 12 million for it.
The cost to build was around 40 million and when it was originally built id say it was worth more than 40 million anyway.
Of the top of my head Commercial property suffered much greater falls than residential.

He paid 10 million for it. The Dublin Docklands Authority had invested 40 million in it so a fall far greater fall than residential properties.

I guess there was little interference in the commercial sector, if you could not pay you were out and that was it. Commercial property was allowed to find its natural floor.

Residential has been propped up by every arm of the state, those arms are very weak and could be taken away at any time, very volatile in my opinion. Allsop auction was weak enough today with a considerable amount of lots unsold or going below the reserve.

Idbatterim

Id say up to about 12-18 months ago from peak, you could get 65% declines in trophy houses and select apartments and houses outside of Dublin....

Ray Palmer

Lord Trollington wrote: »

What is pushing up property prices at the minute is investors. People who actually have disposable cash to spend on investment properties. The banks are giving out very little mortgages, not enough to push the prices up to the extent that they are rising.

It's actually quite alarming.

You only have to look at the rents in Dublin rising week on week. 2 bed apartments that were once going for 1100/1200 last year are now at €1500/1600 a mere 12 months later. Houses to rent gone completely off the scale also.

It's pricing the working to middle class people out of the market. They are actually no family houses available to either rent or buy in Dublin at the moment. Not within the reach of of a normal family at least. I really don't see a solution to this in the short term.

Only a case of the rich getting richer and families continue to struggle to get accommodation.

I always have a problem with posts like this. It is overblowing a problem to make it sound much worse than it is.

Firstly yes there are houses to rent and buy in Dublin. Secondly how much of the middle class are actually in the market to buy a house? So it comes down to a small portion of the population.

Others are insisting this is a dead cat bounce which is not a proven or definite thing. People were outright asked to point to an economic theory of dead cat bounce happens in property and have yet to produce. It is a stock market expression relating to fast moving stock transactions. It is pretty hard for it to happen in a much slower sales environment that is property.

Not saying it impossible but it is no way certain or standard property market behaviour.

Villa05

Ref: dead cat bounce, Have you seen a graph of japanese property prices for last 2 decades.

jmayo

Idbatterim wrote: »

yes I do, but what he says, hits the nail on the head, for residential buyers too... When nobody else way buying, was the time to buy! it applies to any investment, shares, house buying, bonds etc...

I remember a minority at the time here on the property forum on boards, called the bottom, of course a broken clock strikes twice per day, but it was the herd mentality that drove up prices to ridiculous levels and it was herd mentality and over pessimism that caused them to overshoot...

You see I think that is your problem right there you think the properties overshot on the way down.
I think they never actually reached the bottom.
Prices only reached a point where we already had the start of the bubble.
All thanks to state interference.

I can't for the life of me see how anyone thinks the market is recovering because of rise in prices in one portion of the market at the very same time as
a) we have massive amounts of people stuck because of huge negative equity
b) we have massive amounts of people in homes that should in all normal conditions be repossessed
c) there are actually very few transactions
d) we have half the banks that we once had lending and two foreign banks have pulled out this year
d) the banks that are Irish are all affectively state owned or state backed
e) there are no new banks entering the market and as can be seen from Investec some that are still here are thinking twice.
f) we have high unemployment and it's so called decrease is due to emigration and massaging the figures due to government backed job and training schemes

And yet according to some we have reached the bottom and prices are on the up.

Ray Palmer

Villa05 wrote: »

Ref: dead cat bounce, Have you seen a graph of japanese property prices for last 2 decades.

Have you any academic paper saying it exists in the property market?

Tigger

in an academic paper it would be called a bull trap

The Spider

Tigger wrote: »

in an academic paper it would be called a bull trap

Like the last bulltrap that went on for 16 years....

moxin

Dead cat bounce, a bubble in the traditional sense, even a cash bubble, call it any name. Thing is the level of mortgage credit might be marginally down this year over 2012, cash is the definite king in this market.

The govt controlled incentives of the LPT exemption & the DIRT tax hike on savings, the hype in the media and the recent lure of interest only mortgages to 100k pa salaried investors sounds like a panic to me rather than a sustainable recovery in prices.

Muahahaha

jmayo wrote: »

You see I think that is your problem right there you think the properties overshot on the way down.
I think they never actually reached the bottom.
Prices only reached a point where we already had the start of the bubble.
All thanks to state interference.

I can't for the life of me see how anyone thinks the market is recovering because of rise in prices in one portion of the market at the very same time as
a) we have massive amounts of people stuck because of huge negative equity
b) we have massive amounts of people in homes that should in all normal conditions be repossessed
c) there are actually very few transactions
d) we have half the banks that we once had lending and two foreign banks have pulled out this year
d) the banks that are Irish are all affectively state owned or state backed
e) there are no new banks entering the market and as can be seen from Investec some that are still here are thinking twice.
f) we have high unemployment and it's so called decrease is due to emigration and massaging the figures due to government backed job and training schemes

And yet according to some we have reached the bottom and prices are on the up.

Not to forget that Tesco Mortgages looked at setting up in Ireland last year and decided no too, this was despite them having a ready made network of supermarkets to sell them from and having large cash surpluses. If ever a company could have come into the Irish mortgage market and shook it up it was Tesco but for whatever reasons they saw the market as dysfunctional and opted to stay well away.
http://www.independent.ie/business/personal-finance/property-mortgages/tesco-wont-offer-irish-mortgage-service-26888898.html

And now Investec the same. When international banks are refusing to enter the Irish mortgage market then price rises seem bizarre. The rises though are real, my guess is that they are a combination of a supply side shortage and 4-5 years of frustrated buyers finally deciding to hop off the fence as they are getting on in years and don't want to be paying a 25 year mortgage till they're 65.

GavMan

Was viewing a house in Tallaght on Saturday morning. EA informed all people viewing that there was an offer of 200k already placed since Friday night.

She told this to one women who instantly, before she even walked up the hall, offered 203k.

Plenty of loonies out there it seems

handlemaster

GavMan wrote: »

Was viewing a house in Tallaght on Saturday morning. EA informed all people viewing that there was an offer of 200k already placed since Friday night.

She told this to one women who instantly, before she even walked up the hall, offered 203k.

Plenty of loonies out there it seems

Not really it scared you off !!

GavMan

handlemaster wrote: »

Not really it scared you off !!

Just wasn't worth 200, let alone 203 (and 205 when the EA rang me Monday am to see if I wanted to bid)

spockety

GavMan wrote: »

Just wasn't worth 200, let alone 203 (and 205 when the EA rang me Monday am to see if I wanted to bid)

Which house was it?

GavMan

spockety wrote: »

Which house was it?

One in Aylesbury. Pineview I think it was

handlemaster

GavMan wrote: »

Just wasn't worth 200, let alone 203 (and 205 when the EA rang me Monday am to see if I wanted to bid)

Must be very little interest if he's calling you to see if you want to offer. EA should do that but my experience they never have

techdiver

Another fine example of the madness!

http://www.myhome.ie/residential/brochure/213-beechwood-court-stillorgan-road-blackrock-co-dublin/2694990?utm_source=MyHomeie&utm_medium=Email&utm_content=PropertyAlerts&utm_campaign=ResidentialForSalePropertyAlert

EDIT: Checking the property price register, another 2 bed sold for €280k recently. So almost €100k in the difference!!