Dublin (and everywhere) house prices FALL in January 2014

MouseTail

MysticalRain wrote: »

Most home owners will never sell their houses, so I'm not sure why the value of their house would be relevant - even if it rises in value, so does every other house. So the value gets cancelled out.

House values matter regardless of intention to sell, as people 'feel' richer, they can leverage, or even if they don't, they have greater consumer confidence. I don't like it (I don't have a short memory). But its basic economics.

MysticalRain

BTW, I'm still waiting for you to explain why a return to another inflated property market would actually be good for this country's economy (instead of ending in a disaster like it did the last time round).

MysticalRain

MouseTail wrote: »

House values matter regardless of intention to sell, as people 'feel' richer, they can leverage, or even if they don't, they have greater consumer confidence. I don't like it (I don't have a short memory). But its basic economics.

It's voodoo economics, not "basic economics". Just because you "feel rich", it doesn't make you rich. The idea that we can pretend to be rich investing in a property pyramid scheme with massive amounts of money borrowed from German and French banks is ludicrous. It didn't work the last time round, and it won't work the next time round either.

MouseTail

MysticalRain wrote: »

BTW, I'm still waiting for you to explain why a return to another inflated property market would actually be good for this country's economy (instead of ending in a disaster like it did the last time round).

I don't think anyone is arguing for an inflated property market. People are just stating the fundamentals as we know them at the moment.

The Spider

MysticalRain wrote: »

BTW, I'm still waiting for you to explain why a return to another inflated property market would actually be good for this country's economy (instead of ending in a disaster like it did the last time round).

It wont be a bubble, that's the point, take a look at the article in the financial times below. The situation now is completely different, in the boom we were building 80,000 houses a year to meet an annual demand of 30,000, now we're building 6000 houses a year to meet a demand of 30,000. On top of that banks won't lend for development projects so has essentially killed the construction industry in Ireland, and it'll take a long time for it to recover.

Banks also are going to have to face the fact that they have to write down a lot of mortgage debt, as the loans are unsustainable.

What you have is not a bubble where the price inflated for an asset in plentiful supply.

You have instead a lot of people chasing a scarce resource (and likely to remain so for the foreseeable future).

So when any resource is in short supply the price goes up, simple!
It's the same in New York, London etc, and before anyone says it yes I know Dublin isn't New York or London, but the law of supply and demand applies, as long as more people want to buy then sell the the price will rise!

http://www.ft.com/cms/s/0/8b2d9620-a092-11e3-8557-00144feab7de.html#axzz2v2VlrFmB

MysticalRain

The Spider wrote: »

It wont be a bubble, that's the point, take a look at the article in the financial times below. The situation now is completely different, in the boom we were building 80,000 houses a year to meet an annual demand of 30,000, now we're building 6000 houses a year to meet a demand of 30,000. On top of that banks won't lend for development projects so has essentially killed the construction industry in Ireland, and it'll take a long time for it to recover.

Banks also are going to have to face the fact that they have to write down a lot of mortgage debt, as the loans are unsustainable.

What you have is not a bubble where the price inflated for an asset in plentiful supply.

You have instead a lot of people chasing a scarce resource (and likely to remain so for the foreseeable future).

So when any resource is in short supply the price goes up, simple!
It's the same in New York, London etc, and before anyone says it yes I know Dublin isn't New York or London, but the law of supply and demand applies, as long as more people want to buy then sell the the price will rise!

http://www.ft.com/cms/s/0/8b2d9620-a092-11e3-8557-00144feab7de.html#axzz2v2VlrFmB

I think you answered a different question to the one I had asked. But I would agree with the basic point you’re making about the need for construction to ramp up.

Also, as I have stated before, it is not a “free market” if there is government intervention preventing capitalism from taking it’s natural course i.e. repossessing houses of people can’t/won’t pay the mortgage and ultimately transferring the cost to FTB’s through increased interest rates.

There is also NAMA as well, and I know people point out that NAMA is mostly commercial stock. But you still have several thousand residential units across the city lying empty while people like me pay over the odds in an inflated rental market.

MysticalRain

Oh, and technically prices have been trending downwards for the last 6 months (not that you would know it given how the vested interests in the media have been reporting the situation).

ezra_pound

MysticalRain wrote: »

Most home owners will never sell their houses, so I'm not sure why the value of their house would be relevant - even if it rises in value, so does every other house. So the value gets cancelled out.

Not sure why I am the one being accused of "going off on a tangent" seeing as I was merely backing up the definition of Vested Interest as it was originally used in this thread. Spider naturally disagrees, hence why he tried to muddy the waters by implying some kind of moral equivalence between a developer/banker/politician and the average citizen not wanting to be taken advantage of by those groups.

To further the point, "Special interest group" would be the American equivalent of what we're talking about here.

Special interest group
noun
1.
a group of people or an organization seeking or receiving special advantages, typically through political lobbying.

Special interest groups, you mean like the IFA and the ica? Trades unions? Macra na feirme? Are these conspiring to pervert property prices?

Come on.

MysticalRain

I never said that. But keep reaching.

Property developers at the FF Galway Tent was closer to the example I was talking about.

ezra_pound

MysticalRain wrote: »

I never said that. But keep reaching.

Property developers at the FF Galway Tent was closer to the example I was talking about.

In 2005 that was true. Bertie's buds are not manipulating the Irish market now.

MysticalRain

ezra_pound wrote: »

In 2005 that was true. Bertie's buds are not manipulating the Irish market now.

No, we as taxpayers are paying off their debts, and the only way the government will ever get get that money back is by re-inflating the property market. Which is after all their openly stated goal.

ezra_pound

MysticalRain wrote: »

No, we as taxpayers are paying off their debts, and the only way the government will ever get get that money back is by re-inflating the property market. Which is after all their openly stated goal.

Where is it their openly stated goal?

MysticalRain

ezra_pound wrote: »

Where is it their openly stated goal?

You could start with anything that comes out of Michael Noonan's mouth:
http://www.boards.ie/vbulletin/showthread.php?t=2056995338

I would be happy to dig out press releases from NAMA also if you like in case you missed them.

ezra_pound

MysticalRain wrote: »

You could start with anything that comes out of Michael Noonan's mouth:
http://www.boards.ie/vbulletin/showthread.php?t=2056995338

I would be happy to dig out press releases from NAMA also if you like in case you missed them.

There is a difference between stimulating an anaemic market to return it to proper functioning health and over inflation attempts.

MysticalRain

http://www.thepropertypin.com/viewtopic.php?f=50&p=760368

MysticalRain

ezra_pound wrote: »

There is a difference between stimulating an anaemic market to return it to proper functioning health and over inflation attempts.

There is indeed. But I think you may be a little naive in that assumption, given the government's track record in this area.

MysticalRain

Besides, the rental market, which the REIT's are interested in has been pretty buoyant for the last few years to begin with for investors. So I'm not sure why it needs more stimulation.

Villa05

Yesterday we were told by media that the arrears figures were falling. The number of mortgages in arrears reduced by 4,705 according to the statistics published.

This appears to be another trick by the vested interests as the figures appear to be significantly worse

22% of the restructured mortgages were arrears captialisation, which adds the arrears to the outstanding balance and resets the clock to 0.
22% of restructured mortgages represents 6,240

The number of accounts 2 years or more in arrears increased by 1,755 for PDH and 1,364 for BTL.

Arrears capitalisations and term extension arrangements increased
during the fourth quarter of the year, and accounted for 22 per cent and 19 per cent of total restructures at end-Q4, respectively......
A total of 28,364 new restructure arrangements were agreed during the fourth quarter of the year

http://www.centralbank.ie/polstats/stats/mortgagearrears/Documents/2013q4_ie_mortgage_arrears_statistics.pdf

MouseTail

MysticalRain wrote: »

There is also NAMA as well, and I know people point out that NAMA is mostly commercial stock. But you still have several thousand residential units across the city lying empty while people like me pay over the odds in an inflated rental market.

NAMA have been instructed to complete and release those units.

MysticalRain

MouseTail wrote: »

NAMA have been instructed to complete and release those units.

Carefully managed so as not to put downward pressure on property prices. So I'm not sure why you think that really backs up the point you're trying to make.

MouseTail

MysticalRain wrote: »

Carefully managed so as not to put downward pressure on property prices. So I'm not sure why you think that really backs up the point you're trying to make.

Im not being combatative, Im just putting the information out there, not everyone is aware of the recent policy measure. I don't think its neatly enough to ease the supply pressure, but its a substantial measure all the same.

MysticalRain

MouseTail wrote: »

Im not being combatative, Im just putting the information out there, not everyone is aware of the recent policy measure. I don't think its neatly enough to ease the supply pressure, but its a substantial measure all the same.

I would welcome the recent moves by NAMA as well, even if I disagree with they way they are doing it.

The sooner the government gets out of the property management game, the better it will be for this country in the long run.

gaius c

ezra_pound wrote: »

Where is it their openly stated goal?

The man who brought NAMA into being stated that it's aim was to "establish a floor in the market".

riclad

I thought the goal of nama was to stabilise the banks ,by buying property off them at a discount ,
30 -50 per cent plus,
And taking property over from developers ,who were in the process of going bankrupt.
EG nama manages property ,rents out some ,
finishes off some developments which were 90 per cent complete ,
and sells off property when it thinks its commercially viable.
MAYBE in 10 years nama wont exist as it will have sold all its assets off.
BANKS dont wont to own 1000 s of house s,

maintenance is expensive .
IF YOU drove round dublin 3 years ago,
you, would see 1000 s of empty apartments,
or buildings which were nearly finished .
developer was gone bust.

Zamboni

MysticalRain wrote: »

http://www.thepropertypin.com/viewtopic.php?f=50&p=760368

Wahay - Long Term Economic Value! Good on ya Mick

riclad

I dont, see values falling,IN certain
in dublin area,s Where there s a strong rental market.

omicron

AIB said today that 24% of their buy to let mortgages are in arrears of more than 90 days, if thats not a sign of a market thats not functioning properly I don't know what is!!!

Godge

omicron wrote: »

AIB said today that 24% of their buy to let mortgages are in arrears of more than 90 days, if thats not a sign of a market thats not functioning properly I don't know what is!!!

Given that about 70% of their buy-to-let mortgages were given to people with no clue as to how to manage investments and that values could go up or down, 24% is quite reasonable.

MouseTail

omicron wrote: »

AIB said today that 24% of their buy to let mortgages are in arrears of more than 90 days, if thats not a sign of a market thats not functioning properly I don't know what is!!!

And id bet most of those are outside the GDA and other cities. What can the bank do with a BTL in Cavan?

The Spider

And there ya go, no drops for a while folks!

http://www.irishtimes.com/life-and-style/homes-and-property/irish-house-prices-undervalued-by-13-says-commission-1.1714195