Dublin (and everywhere) house prices FALL in January 2014

moxin

The Spider wrote: »

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

Nothing about prices in Dublin, the report is national.

lima

The Spider wrote: »

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

This is speculation.

Whereas more informed information shows that prices fell last month, and have been trending towards falling for months now.

zl1whqvjs75cdy

People seem to take this price rising/falling malark very personally.

P. Breathnach

lima wrote: »

This is speculation.

Whereas more informed information shows that prices fell last month, and have been trending towards falling for months now.

You place enormous faith in a single report that is based on a restricted sample (mortgage-financed transactions) in the quietest month of the year for property sales. And "trending towards falling" is a wonderful phrase: it means "rising, but more slowly".

I may be putting my money where my mouth is, as I am in the market-place as a potential purchaser. The figures released by the CSO will not have any effect on my decision-making - not because I suggest that they are wrong, but because they don't actually tell me anything useful.

jay0109

The Spider wrote: »

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

the European Commission, wha! Great bunch of lads:P

lima

I am not saying whether I think prices will rise or fall, all I am doing is reminding people, who are clearly upset about it, that property prices fell last month according to CSO. It is not a dream, it is on the CSO website, I am merely pointing it out. More than likely they will rise next month and the month after but as of right now, property prices fell in January.

Some people were clearly happy when the CSO results pointed towards rises but now that one month is pointing to a fall in prices people are going mad!!

I am in the market for a property too by the way.

moxin

As the CSO Jan report has been dismissed by the bulls, will they dismiss the Feb report if it states rises for Feb?!

lima

moxin wrote: »

As the CSO Jan report has been dismissed by the bulls, will they dismiss the Feb report if it states rises for Feb?!

Noooo!

The Spider

moxin wrote: »

As the CSO Jan report has been dismissed by the bulls, will they dismiss the Feb report if it states rises for Feb?!

Ha ha, nope and that because January is a nonsense month to be quoting, not much house buying going on after christmas.

moxin

The Spider wrote: »

Ha ha, nope and that because January is a nonsense month to be quoting, not much house buying going on after christmas.

Must be those storms?

Its based on drawdowns which likely occurred in Oct/Nov/Dec so the market fell in those months.

The Spider

moxin wrote: »

Must be those storms?

Its based on drawdowns which likely occurred in Oct/Nov/Dec so the market fell in those months.

Lets see February's, who knows you could be right, if so, what's all the hysteria about?

roro2

moxin wrote: »

Must be those storms?

Its based on drawdowns which likely occurred in Oct/Nov/Dec so the market fell in those months.

The index for January is based on mortgage drawdowns in... January.

stevedublin

roro2 wrote: »

The index for January is based on mortgage drawdowns in... January.

for houses that usually went sale agreed a few months before the drawdown.

moxin

roro2 wrote: »

The index for January is based on mortgage drawdowns in... January.

Yes, steve stated what I had meant

The Spider wrote: »

Lets see February's, who knows you could be right, if so, what's all the hysteria about?

We're not hysteric, its the bulls in denial who are.

MouseTail

moxin wrote: »

We're not hysteric, its the bulls in denial who are.

Where?

dyziool

I suggest you go for house viewing around Dublin south and try to pay asking price. First you will find 20 other like viewing the place the same time and next day house sold way above asking price.

lima

dyziool wrote: »

I suggest you go for house viewing around Dublin south and try to pay asking price. First you will find 20 other like viewing the place the same time and next day house sold way above asking price.

Asking price is arbitrary

I'd believe CSO before anecdotes

Brussels Sprout

In order for house prices to go up, demand must exceed supply. If people who already own a house sell their home and then buy another, overall demand hasn't gone up in the market. For that to happen the market needs people to enter who aren't selling a different house i.e. first-time buyers. For the people saying that house prices have bottomed out and are going to rise now, ask yourself where the first-time buyers are going to come from?

The next generation of first-time buyers are the young people who have been disproportionately affected by the recession. They are the ones who are on social welfare, on JobBridge schemes, locked out of public sector due to embargos or living in other countries altogether.

moxin

dyziool wrote: »

I suggest you go for house viewing around Dublin south and try to pay asking price. First you will find 20 other like viewing the place the same time and next day house sold way above asking price.

Whats this supposed to mean?

Dublin South or the famous SCD is just one small region of Dublin, it does NOT contain all of Dublin. Get out of that SCD lovefest and see where the other 1 million plus people live.(Census quoted Dublin city and suburbs as having 1.1m people for the pedants, http://www.thejournal.ie/census-2011-reveals-irelands-fastest-growing-towns-and-counties-430278-Apr2012/)

Glenbhoy

MouseTail wrote: »

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

I see where you're coming from, but I'd be surprised if the vast majority of these properties weren't in Dublin. In my own small estate (35 houese) in a decently priced area in South Dublin, I know of 4 properties which are rented and are well under water.
All were owner occupied at one stage, but the owners moved on in the mid part of the 2000's using the equity as deposits on the next (almost seven figure purchases), there are a helluva lot of accidental landlords around and I'd think the majority are in Dublin. Rents may be rising, but they're still nowhere near a 7 figure mortgage, even at almost negative interest rates.

househero

The ECB HAS to increase interest rates. Deflation is the biggest threat to Europes economy for the short term (next 3 yrs)

Chinas growth forcast for 2014 is 7.5% For those that dont know thats a 'western' growth rate of just 0.5% anything less than 7% in chinas economy is actually a contraction due to the odd way Chinese accountants hide government supported industrial debt.

The USA continues to have very weak jobs and manufacturing data.

Europes 'growth' is stagnant and so is the projections of the Irish property market.

Anyone that purchased a house 05 to 08 is in the same situation as Japan in the 1970s/80s. If wages continue to decline in real terms, your grandchildren may have to take on your mortgage.

Prices will hover around this +/-10% rate for the next 6years. Another recession will come around 2020 or war will break out on the fringes of Europe sooner and wipe off the gains of a very fragile recovery.

People buying 'rushed' now will still make losses in the medium term and people 'holding on' to wait for an upturn have NO HOPE. Cut your losses and move on or regret clinging on to nothing for years.

Glenbhoy

The Spider wrote: »

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

Anyone seen the actual report? Far be it for me to question an Irish Times journo, but, I'd like to read the report and draw my own conclusions.

Glenbhoy

househero wrote: »

The ECB HAS to increase interest rates. Deflation is the biggest threat to Europes economy for the short term (next 3 yrs)

How does increasing interest rates stave off deflation?

househero wrote: »

Europes 'growth' is stagnant and so is the projections of the Irish property market.

I don't necessarily disagree with the statement above, but I haven't seen any of these projections of stagnation in the irish property market.

househero wrote: »

Anyone that purchased a house 05 to 08 is in the same situation as Japan in the 1970s/80s. If wages continue to decline in real terms, your grandchildren may have to take on your mortgage.

Are wages declining in real terms? Surely people who continue to pay their mortgages will have them paid off in exactly the same time as their original repayment schedule, in fact, they may well pay off the mortgage more quickly if they maintain a constant payment, as with these historically low interest rates they may have a very low monthly interest charge as opposed to what they signed up to.

househero

Glenbhoy wrote: »

How does increasing interest rates stave off deflation?



I don't necessarily disagree with the statement above, but I haven't seen any of these projections of stagnation in the irish property market.


Are wages declining in real terms? Surely people who continue to pay their mortgages will have them paid off in exactly the same time as their original repayment schedule, in fact, they may well pay off the mortgage more quickly if they maintain a constant payment, as with these historically low interest rates they may have a very low monthly interest charge as opposed to what they signed up to.

I really hate broken up quotes. Its usually the start of a useless thread argument. I'll let you do the leg work.

Im not going to explain macro economics as its too complicated, but the Euro needs to stabilise to provide growth and reduce deflationary pressures. To do this the ECB has very few options available as the banks are still VERY fragile (un-performing loans in Ireland and exposure to significant undeclared losses) to stabalise he banks the ECB NEEDS to increase rates. a rate of practically zero is not healthy for any economy in the short to medium term (3 to 7 years) we are coming to the very end of this cycle. It is HIGHLY likely that within the next 5 years interest rates will head towards double digit figures. This is ONLY to refinance the banks through 'open market' conditions. America will increase rates around 6 to 9 months before the ECB. Watch out for this as a precursor

The statement is based on Standard & Poor forecasts of the 2015 Irish property price.

I trade currencies for a living, market analysis is how I make (and sometimes loose) money.

It is very foolish to think that interest rates will be this low for any period of time. By 2016 the banks effective borrowing rate will be between 6 and 8%.

Government workers wages have declined in Ireland by 5 to 7% since 2007, with reduced holidays, increased tax's and pay freezes. The minimum wage has remained the same since 2007 while tax's, the cost of living and... I really cant be bothered. If you disagree you know nothing about the economy. Go read some basics about the Japanese housing bubble in the 1980s, they didn't understand either. https://www.google.ie/search?q=japanese+housing+bubble+1980s&oq=japanese+housing+bubble+1980s&aqs=chrome..69i57j0l4.13016j0j4&sourceid=chrome&espv=210&es_sm=93&ie=UTF-8

Glenbhoy

I have always been a keen amateur economist, so I was interested to hear your rather unconventional theories on beating deflation.
For your sake I hope successful currency trading is dependent on charts and technical analysis rather than forecasting long term economic trends.
S and P report says prices will rise 2% next year, what with deflation, that could be a 5% increase (and that's not even taking their record on forecasting into account).
I agree that since 2007 real incomes have decreased, but my point was that for people who purchased in mid 2000's, they are most likely to be paying off that mortgage more quickly than anticipated regardless of income drops as their financing costs are so low. And yes, you are correct, interest rates will go up in the future (and it will rain in the future too), but that doesn't make it more likely that noughties borrowers will be passing mortgages through generations. In fact, I'm not sure we have any legal provision for such a transaction in this country. At any rate, inheritors would hardly accept such an 'inheritance' unless there was s net value there.
Noughties buyers have many problems, they could be amateur landlords, they may have large amounts of negative equity, they may live in properties which restrict lifestyle choices in terms of family size etc, but if they have maintained employment and were on the infamous tracker, they should not have repayment problem, and if they've any sense, they should be overpaying the mortgage (or not paying at all).

househero

Glenbhoy wrote: »

if they've any sense, they should be overpaying the mortgage (or not paying at all).

Exactly.


But regarding your view on mid 00s mortgages, it is too short term and ignorant of real term wage deflation over the next 20 years. The Japanese did not have a mechanism to pass on debt before the crash either. The country would have been made bankrupt without keeping the debt private, not that dissimilar to us if you recall what happened. The 'inheritors' in Japan had no choice. Just like us and our increased tax burden over the next 20 years. Over the long term there are FAR bigger economic changes than this little recession. Have you had the opportunity to travel much? England is a 3rd world country compared to most of Asia. Money is flowing west and this is due to continue, our high wages can not be supported over the longer term. Sorry you were right about the S&P report, I am not based in Dub and reading the report in depth showed a significant drop outside the capital. My point is, as you so eloquently put it "if they've any sense, they should be overpaying the mortgage (or not paying at all)" if they are struggling NOW on a 20+year mortgage, they will loose it within the next 6 years or so, if things dont improve for them personally. As the house prices will not return to levels they may have involved themselves in.

Think this is an impossible situation?
The highest value reached to date for the London stock exchange FTSE was 6950.6, on 30 December 1999. That's 14 years of negative growth. Did house prices follow the same trend over the same period?

regarding the 'unconventional view of reducing deflation' you may have been reading too many economics for dummies books. An over simplification of a problem eg Reduce deflation by reducing interest rates, completely ignores the reason why growth is stagnant. A lack of stability, due to poor banking conditions, low lending and potential expenditure by private business and an over reliance on non public sector spending due to negative debt ratios by all major governments in the west can not be improved by reducing interest rates... The 'conventional' theory you suggest, would reduce rates further, so you borrow £1000 today and pay back £900 in a year. Hmm no, that wouldnt work would it.

gaius c

MouseTail wrote: »

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

Complete & total speculation not backed up by even the tiniest shred of evidence.

dyziool wrote: »

I suggest you go for house viewing around Dublin south and try to pay asking price. First you will find 20 other like viewing the place the same time and next day house sold way above asking price.

Here's a little story for you and the guy who told me this story is an avid reader of this forum (hey K!).

Apartment in D8 made over asking price before the vendor suddenly took it off the market and will put it back on in September. It's a repo and he's trying to put the bank off for another six months, collect the rent and "sell it for more then".

I suggested contacting the bank to let them know that the vendor was messing around and turning down perfectly good offers. He said that there are 4/5 properties involved and they are disposing of the foreign ones first and that it is going through the courts.

This is the kind of messing that is screwing up the market so the supply side is completely banjaxed. There was a thread here before where the OP listed 7-8 houses he had viewed, only one of which was genuinely for sale. The others were on the market to keep the banks off their backs. Until this messing with the supply side of the market ends, talking about the "pent up demand" is a complete red herring.

Villa05

Always good to get Morgan Kelly's thoughts
Whatever Happened Ireland?

http://www.youtube.com/watch?v=8LCofepdUzE&list=PLHKVjBSDqMB7OF1pdtOW6eRR5DUgBzuUU

Balmed Out

Villa05 wrote: »

Always good to get Morgan Kelly's thoughts
Whatever Happened Ireland?

http://www.youtube.com/watch?v=8LCofepdUzE&list=PLHKVjBSDqMB7OF1pdtOW6eRR5DUgBzuUU

interesting. very true about the need for transparency and publication of details in any debt writedown

Shane732

Muahahaha wrote: »

This could be the beginning of a dead cat bounce, cash buyers running out and tight credit might have begun to be reflected

Here's hoping!