Will property prices ever return to their peak?

Eric Cartman

Hollister11 wrote: »

Like a lot of other people, my parents bought a house at the peak in 2006, and it's worth about 30% less now. They bought a 3 bed semi in Dublin for 650k and its not worth around 450k.

Will the market return as height as that, or have the central bank rules put a stop to all that.

adjusted for inflation throughout the rest of time itself , nobody should ever pay 2005-2007 prices for any house in Ireland. But sadly, some will.

If your parents are holding out to get rid of the house for what they paid for it then i'd say they are being a bit foolish. Somebody has to take the hit , and it really should be those who paid over the odds.

appfry

Eric Cartman wrote: »

adjusted for inflation throughout the rest of time itself , nobody should ever pay 2005-2007 prices for any house in Ireland. But sadly, some will.

If your parents are holding out to get rid of the house for what they paid for it then i'd say they are being a bit foolish. Somebody has to take the hit , and it really should be those who paid over the odds.

Well renters are paying 2005 - 2007 prices already now. Soon they will be paying even more than that. If there is money to be made due to the buying price being desirable for the rental income then that will effect prices big time. Of course the opposite could happen too if rents fall.

We have a house in Dublin that we rent for most of the year while we live abroad. Serious thought now going into splitting that house in two and renting it out altogether and then renting a cheaper house down the country when we want to stay in Ireland.

The rental income is just too good to ignore. Pity its Mr Noonan that gets the vast majority of it though. If he didnt have his snout in there it would be split and rented yesterday.

Harvey Normal

miezekatze wrote: »

I think they'd only go back up to that level if there was signifcant inflation. People just don't earn enough money to be able to buy houses at those prices. They didn't 10-15 years ago either, but hopefully people will never be allowed to take on crazy levels of debt like that again.

This.

Wage inflation is low. Most people post tax are where they were or below where they were in 2007. Taxes are higher. Unless inflation and wage inflation take off in the next 20 years then it won't happen and if inflation does takeoff then they won't be getting the same money back in real terms.

Elliott S

I sincerely hope prices never return to the peak. Those prices were crazy! People having to pay through the nose for ordinary family homes, not helped by people speculating on property.

I know there are tons of people in negative equity but for them to ever recoup their losses means a return to an overheated, unsustainable market. It would be disasterous.

<mod snip>

appfry

Is this the buying version of this thread?

http://www.boards.ie/vbulletin/showthread.php?t=2056659116/5

I will come back in about 4 years and have a look

That thread shows how much people actually really know about where a market is headed, compared to how much they think they do.

There are lots more of them im sure.

Its impossible to predict.

Ray Palmer

appfry wrote: »

Its impossible to predict.

The report said rents would rise as did I so that sounds like an accurate prediction?

There was a lot of people wishing rents to fall but with out any reasoning behind it. When you looked at the details it was obvious if nothing changed rents would rise. They did.

People are now saying house prices can't and won't rise because people can't afford it. That is the same argument that was used to say rents wouldn't rise. Rents went up and people paid, some simply couldn't afford and became homeless. People were sure this couldn't happen. It did.

Right now we are getting close to the point where houses will be out of the reach of individuals forever. The same thing has happened in all cities as they grow. Even when the city becomes poor certain property is held forever by companies and investors.

riclad

The central bank and the bank rules , 3.5 times salary max loan amount,
x per cent deposit are the main factor re house prices ,
so i dont see price rises going to peak rates in 10 year s or more .
we are in the era of low inflation ,low interest rates .
People will still pay high rents ,they have no choice , you have to live somewhere ,
but people have to have credit to buy a house and have a large deposit .
its hard to save when u are paying 1000 per month rent.
IN terms of longer than 10 years it,s impossible to predict things like oil prices,inflation, house prices .

Ray Palmer

riclad wrote: »

The central bank and the bank rules , 3.5 times salary max loan amount,
x per cent deposit are the main factor re house prices ,
so i dont see price rises going to peak rates in 10 year s or more .
we are in the era of low inflation ,low interest rates .
People will still pay high rents ,they have no choice , you have to live somewhere ,
but people have to have credit to buy a house and have a large deposit .
its hard to save when u are paying 1000 per month rent.
IN terms of longer than 10 years it,s impossible to predict things like oil prices,inflation, house prices .

Why are you ignoring investment money?
Home ownership will not remain the same way it has and has already changed directly as result of changes to society.
People see all the housing issues as a direct result of the property crash but that is actually disguising the natural evolution of city growth.

There is one massive disruption coming from Brexit but it could actually add fuel.

ZeroThreat

Hollister11 wrote: »

This is why I hate being irish sometimes. Once you have assists, people seem to hate you.

BTW I never said we were struggling. I didn't ask for sympathy, I was need to know if prices will reach their peak.

Rubbish, this seems more like selfishness on your end. You wish house prices to return to ridiculous over-inflated levels to benefit you personally, but this would have an adverse effect by pushing property prices even further beyond the reach of everyone else seeking to buy. Property costs in this country seem more than high enough at present, considering we're one of the most sparsely populated countries in europe after scandanavia. (and most of that's in the arctic)

Michael D Not Higgins

ZeroThreat wrote: »

Rubbish, this seems more like selfishness on your end. You wish house prices to return to ridiculous over-inflated levels to benefit you personally, but this would have an adverse effect by pushing property prices even further beyond the reach of everyone else seeking to buy. Property costs in this country seem more than high enough at present, considering we're one of the most sparsely populated countries in europe after scandanavia. (and most of that's in the arctic)

The OP has posted several times on wanting to buy in the next few years so they have a vested interest in the price that property is selling at. I think the story in the OP was an anecdote rather than a reason to want higher prices.

appfry

Ray Palmer wrote: »

The report said rents would rise as did I so that sounds like an accurate prediction?

There was a lot of people wishing rents to fall but with out any reasoning behind it. When you looked at the details it was obvious if nothing changed rents would rise. They did.

People are now saying house prices can't and won't rise because people can't afford it. That is the same argument that was used to say rents wouldn't rise. Rents went up and people paid, some simply couldn't afford and became homeless. People were sure this couldn't happen. It did.

Right now we are getting close to the point where houses will be out of the reach of individuals forever. The same thing has happened in all cities as they grow. Even when the city becomes poor certain property is held forever by companies and investors.

No. It was a guess. There were reports saying everything at the time.
That was just one. I was talking about the reaction and the "I was right before and i will always be right in future" reactions in the following posts in that thread. All were 100% right in their own opinions, but when you go back and look at them a few years later you see that all the arguments were just guesses disguised as knowledge and nothing more. That is the way of the internet.

When I bought my first property I thought I would never be able to buy ever as prices were rising so high and wages were so low.
One day I got a new job with more money, my savings increased and suddenly I found I was able to buy. Lots of people advised me not to. It was a scary decision, but I went for it.
It was the same for every age group as they grow older and gain better jobs and more experience. We all think we will never be able to buy a house until one day we can.

asteroids over berlin

yes

Ray Palmer

appfry wrote: »

No. It was a guess. There were reports saying everything at the time.
That was just one. I was talking about the reaction and the "I was right before and i will always be right in future" reactions in the following posts in that thread. All were 100% right in their own opinions, but when you go back and look at them a few years later you see that all the arguments were just guesses disguised as knowledge and nothing more. That is the way of the internet.

When I bought my first property I thought I would never be able to buy ever as prices were rising so high and wages were so low.
One day I got a new job with more money, my savings increased and suddenly I found I was able to buy. Lots of people advised me not to. It was a scary decision, but I went for it.
It was the same for every age group as they grow older and gain better jobs and more experience. We all think we will never be able to buy a house until one day we can.

It was not a guess. Facts were considered and a theory of likely results were derived. People argued that things would be different but if you look back you can see they didn't have facts just feelings heavily tainted by desire.
Less property being built and increasing demand for housing. That was not a guess that was reality. People said rent allowance kept rents up but when it was reduced and rent didn't that shows that view was simply wrong. Yet if you read the thread people were still claiming that it was a false floor when it was already proven not to be true.
There weren't competing theories with statistical analysis showing rents and prices going down. There were people saying it will happen but that doesn't make a theory as there were no facts.
I wasn't guessing and if you think I was you didn't understand what I said in the thread then.

As for how you described how you managed to buy that is your story. Suggesting this is the normal is really bizzar. Most people work a job, try to save and buy a property they can afford. Now some people will never be able to buy. Some because they won't earn enough in their jobs for the area the want to live in. Others simply missed the boat, hesitate when prices were rising, then too expensive, then too risky, then can't get enough from the bank and finally too old to get a mortgage. Very easy to be 40 and in that situation. That is pretty much a permanent renter now. That population of renters is new and ultimately has led to less rentals by increasing the demand.
Increases in renters create a viable investment opportunity. There is also the normal development of cities and Dublin is going through it. A lot of this is predictable in the long term and not a guess. If you feel happier thinking people just guess fine but it isn't accurate or true.

appfry

Ray Palmer wrote: »

It was not a guess. Facts were considered and a theory of likely results were derived. People argued that things would be different but if you look back you can see they didn't have facts just feelings heavily tainted by desire.
Less property being built and increasing demand for housing. That was not a guess that was reality. People said rent allowance kept rents up but when it was reduced and rent didn't that shows that view was simply wrong. Yet if you read the thread people were still claiming that it was a false floor when it was already proven not to be true.
There weren't competing theories with statistical analysis showing rents and prices going down. There were people saying it will happen but that doesn't make a theory as there were no facts.
I wasn't guessing and if you think I was you didn't understand what I said in the thread then.

As for how you described how you managed to buy that is your story. Suggesting this is the normal is really bizzar. Most people work a job, try to save and buy a property they can afford. Now some people will never be able to buy. Some because they won't earn enough in their jobs for the area the want to live in. Others simply missed the boat, hesitate when prices were rising, then too expensive, then too risky, then can't get enough from the bank and finally too old to get a mortgage. Very easy to be 40 and in that situation. That is pretty much a permanent renter now. That population of renters is new and ultimately has led to less rentals by increasing the demand.
Increases in renters create a viable investment opportunity. There is also the normal development of cities and Dublin is going through it. A lot of this is predictable in the long term and not a guess. If you feel happier thinking people just guess fine but it isn't accurate or true.

Well if I was as good at guessing as you seem to be id be sitting in my mansion in the Bahamas right now. What happened?
Maybe in the next few years because there are fortunes to be made by accurately predicting.

Walter H Price

Prices will rise in certain areas though it is unlikely we will ever see a full return to the 05-08 Prices , given new lending restrictions imposed by the banks. At the minute prices are artificially rising due to the lack of supply , once supply reaches equilibrium in the next few years , prices may well fall again as the demand has been greatly reduced with peoples buying power majorly restricted by lending restrictions.

The 3 and 1/2 times salery and deposit rule alone will prevent this to buy a 650k property now would require a deposit of €130k and combined gross salerys of almost €150k for anybody looking to buy their second home, add into this that many looking to move home will likely also be in your parents situation and have negative equity. For first time buyers the deposit alone of €108k would be a massive stretch.

appfry

Dont forget there was a time when you had to be in a building society saving x amount for x amount of years and not touch it before you would even be considered for a mortgage. And even then you were tied to that building society.
That changed. Things change. The lending rules in place now may or may not be the same in a few years.

Walter H Price

appfry wrote: »

Dont forget there was a time when you had to be in a building society saving x amount for x amount of years and not touch it before you would even be considered for a mortgage. And even then you were tied to that building society.
That changed. Things change. The lending rules in place now may or may not be the same in a few years.

i fully agree that the rules change and no doubt will again but i cant see a return to the lack of regulation that was in place in the early 2000's globally, that allowed our boom. Governments will never allow the banks to behave like that again after the damage it did , i doubt any of us will ever see credit be allowed to flow that freely and unchecked again in our lifetimes , too many wealthy people lost far too much for that to be allowed happen again.

appfry

Walter H Price wrote: »

i fully agree that the rules change and no doubt will again but i cant see a return to the lack of regulation that was in place in the early 2000's globally, that allowed our boom. Governments will never allow the banks to behave like that again after the damage it did , i doubt any of us will ever see credit be allowed to flow that freely and unchecked again in our lifetimes , too many wealthy people lost far too much for that to be allowed happen again.

Look at the last budget

Ray Palmer

appfry wrote: »

Well if I was as good at guessing as you seem to be id be sitting in my mansion in the Bahamas right now. What happened?
Maybe in the next few years because there are fortunes to be made by accurately predicting.

I didn't guess but I own several properties and didn't lose a penny on property. If I wanted to I could sell up and live in the Bahamas now but I'll move to my villa in France in about 10 years. My retirement income will be quite substantial too.

I can guess you won't be doing similar

Walter H Price

appfry wrote: »

Look at the last budget

the last budget was fairly innocuous was there something i missed ?

appfry

Ray Palmer wrote: »

I didn't guess but I own several properties and didn't lose a penny on property. If I wanted to I could sell up and live in the Bahamas now but I'll move to my villa in France in about 10 years. My retirement income will be quite substantial too.

I can guess you won't be doing similar

OK we get it. You are the one millionaire genius who can predict and make a killing on the property markets.

appfry

Walter H Price wrote: »

the last budget was fairly innocuous was there something i missed ?

The builders subsidy via the FTB.

We are already gone back there. It didnt take long.

Walter H Price

appfry wrote: »

The builders subsidy via the FTB.

We are already gone back there. It didnt take long.

i dont think thats any indication that we've retuned to the early 2000's , the firt tim buyers 5% was a stupid move , but about the only nod a seriously weak govenment could make twords improving on the housing crisis , they cant afford to build councill housing , theres no political apetite to do anything regarding rent controlls and they cant't take the reins off the banks to allow them lend lend lend again , the European central bank would not allow it.

I wouldn't be to concerned about the 5% rebate on new builds at all to be honest it will achieve nothing the same as the rest of that budget it was a wholly ineffective move by a weak government.

appfry

Walter H Price wrote: »

i dont think thats any indication that we've retuned to the early 2000's , the firt tim buyers 5% was a stupid move , but about the only nod a seriously weak govenment could make twords improving on the housing crisis , they cant afford to build councill housing , theres no political apetite to do anything regarding rent controlls and they cant't take the reins off the banks to allow them lend lend lend again , the European central bank would not allow it.

I wouldn't be to concerned about the 5% rebate on new builds at all to be honest it will achieve nothing the same as the rest of that budget it was a wholly ineffective move by a weak government.

I see it as a first step.

Ray Palmer

appfry wrote: »

OK we get it. You are the one millionaire genius who can predict and make a killing on the property markets.

No you don't get it that's the problem. I am experienced in this area as is my family. Property is a long term investment and you have look at it like that. Fundamentals of what you are investing are important. It isn't quick flips that make somebody a property investors as that is gambling.
I haven't made a killing I made sound investments that are paying off. A lot of research and knowledge went into those investments not guessing.
I stopped posting here for a long time as people were laughing about the possibility of rental increases and anything that meant there dream wasn't going to come true. Meeting you is certainly making me think I was right about commentators here.
You can wish the market to be anything you want but you should making sure you are actually seeing signs of it happening rather than saying it must happen.

Walter H Price

appfry wrote: »

I see it as a first step.

no it was a weak attempt to try and look like they were doing something to alievieate the hounsing crisis , The ECB , Bank of England and the Fed will not allow the lending practices of the early 2000's return and with out that volume of free credit available the housing market here will be ruled by supply over demand , because realistically unless you have a combined 80k-100k you can forget buying in Dublin , given the average wage is around 35k that keeps allot of people locked out from the demand side.

As soon as the supply issue is addressed and more houses are built prices will start to fall , can already see it in places like Swords where mature housing stock is loosing value over the last few months due to increase in new builds.

Fine Gaels budget was as expected totally weak and ineffectual across the board as can be expected by a party barely in charge

Muahahaha

Ray Palmer wrote: »

Or they'll rent out their houses to the working generation that can't afford to buy and have a good pension income. As economies grow home ownership in prime locations often drops dramatically. Investors can afford the property and it makes economical sense due to rental income but not affordable for private ownership.
It is already in place in Dublin for decades and people accept it even though they don't see it. All the old Georgian properties were once single households even though they did have servants and others living in them.
Houses in the suburbs are split and being split with many more to come in time. Well serviced areas are massively underpopulated in Dublin filled with many retirees. They are dying off and the houses are not getting new families buying them. When I first bought 15 years ago, on my road there were 3 houses already split. Now there are 12. Might be slow but it is happening. The more it happens then more will look at as an option.
Very easy to convert a 3 bed house into two 2 bed accommodation for relatively small amounts of money. Rental income increases by at least a quarter. Many people get a pension payout at retirement that can mean they can afford the initial costs based on the return.
Considering this prices could reach the peak in less than 5 years as there simply isn't enough built with continuing pressure on existing stock. It isn't all about private purchase.

How do you mean split Ray? Like a big Georgian being converted into 3 or 4 bed apartments? Or 3 bed houses into 2 x 1 bed apartments? Do councils give permission for that or is it even needed?

Nermal

Nominal yes.

Inflation adjusted - not within the lifetime of someone who was a first time buyer in the 2000s.

Credit booms follow generational cycles. A generation who remembers what went wrong has to die before their children make the same mistake.

Villa05

Nermal wrote:

Credit booms follow generational cycles. A generation who remembers what went wrong has to die before their children make the same mistake.

I think the credit boom could be gone for quiet a while as control has shifted towards the ecb who insist on strict lending rules.

If Ireland was left in control we would be in a credit boom right now. We seem incapable of learning from past mistakes

riclad

I think he means by a split, a 3 bed house is turned into 3 flats ,
each flat would need its bathroom .
the council can inspect rental accomodation to check does it comply
with rental standards re storage ,room sizes etc
Theres a good article on independent ie
saying the government must build 1000,s of house thru coops or
social housing otherwise people will continue to demand higher wages
which would damage the economy .
david macwilliams says we need 1000s, of new houses to stop house
price rises, causing a spiral of wage rise demands .
We are competing with countrys where house prices are much lower .
we need more houses for people to buy and more rental units .