Are we really back to this sh*t again?

Arcade_Tryer · 14-02-2017 1:00am

The Rape of Lucretia wrote: »

"ruling classes" ?!?!?!?

You have just picked some other mythical group to blame !

Ireland is a democracy. If you dont like the way it is run, then you, and your countrymen, are to blame.

While I'd agree that the "ruling class" in a democracy is a reflection of the people, I'd be weary of saying they are a reflection of all the people. For example, I voted People Before Profit in the last General Election, yet my constituency voted overwhelmingly Fine Gael. Am I to blame for FG being in power and their respective policies?

NIMAN · 14-02-2017 1:53am

darkpagandeath wrote: »

B*locks... I have never in my life met anyone who planned to have kids. .

Eh?

We did.

Yourself isit · 14-02-2017 2:07am

The Rape of Lucretia wrote: »

"ruling classes" ?!?!?!?

You have just picked some other mythical group to blame !

Ireland is a democracy. If you dont like the way it is run, then you, and your countrymen, are to blame.

Of course democracies have ruling classes, most of them unelected. Like the bankers (or indeed their best buddies the regulators).

You never answered what you did in the boom btw, buy, rent or what?

Yourself isit · 14-02-2017 2:10am

The Rape of Lucretia wrote: »

Culturally inferior yes. It is self evident.
Certainly nothing racist though. Its history has brought it to that situation. I would even be slow to be too critical of its people in that context, but the fact remains, that other comparable countries are significantly better at managing themselves.

Comparable countries being what or where exactly? Are you comparing Ireland to a small subset of Northern European countries, or what exactly.

PARlance · 14-02-2017 2:13am

youcancallmeal wrote: »

370k mortgage would be about €1650 per month from say KBC for example with 3.5% interest

And these poor sods are probably paying in excess of that for a crappy two bed. I'm not surprised to hear of people queuing up with the madness that's going on in the rental market.

Yourself isit · 14-02-2017 2:15am

Arcade_Tryer wrote: »

While I'd agree that the "ruling class" in a democracy is a reflection of the people, I'd be weary of saying they are a reflection of all the people. For example, I voted People Before Profit in the last General Election, yet my constituency voted overwhelmingly Fine Gael. Am I to blame for FG being in power and their respective policies?

Neither PBP nor FG are the ruling classes. In crony capitalist societies the guys handing over the brown bags are the real ruling classes and it doesnt have to be illegal either – campaign finance in the US for instance.

Take the decision to grant aid the first time buyers (and getting back to the thread). You need junior cert economics to know that money goes to developers not buyers. It benefits the few. Penalises the many. Nothing to do with what the electorate want or need.

darkpagandeath · 14-02-2017 2:40am

NIMAN wrote: »

Eh?

We did.

Have I met you ?

ChikiChiki · 14-02-2017 2:52am

darkpagandeath wrote: »

B*locks... I have never in my life met anyone who planned to have kids. Like you and me we were not planned. Only ones I ever hear about are women with little time left to have them, biological clock ticking.

I disagree. Times have changed as nowadays both spouses need to be working to pay the bills in a very expensive society. Nowadays people weigh up a lot more whether they can afford kids. Childcare costs alone are astronomical when you consider a mortgage and all the bills alongside that. Its a sad sign of the times.

darkpagandeath · 14-02-2017 2:55am

ChikiChiki wrote: »

I disagree. Times have changed as nowadays both spouses need to be working to pay the bills in a very expensive society. Nowadays people weigh up a lot more whether they can afford kids. Childcare costs alone are astronomical when you consider a mortgage and all the bills alongside that. Its a sad sign of the times.

It's personal experience. When ever the conversation turned to well was the child planned you get "What do you think". Not that it's not a blessing to them. You are putting to much stock in Professionals Planning children and then Ending up with a child unexpectedly.

sbsquarepants · 14-02-2017 9:22am

Yourself isit wrote: »

You weren't replying go me initially but let's discuss your points.

The valuer (and you) are saying that the price is the value and both are what ever is offered for the house. However if I am looking for a 400k mortgage on a house that I am personally valuing and prepared to pay 600k because it's of sentimental value to me (that word again) but the typical house in the area sells at 400k then the valuer is not doing his job of he agrees with my personal valuation. He's allowing me to get a loan based on false collateral and I'm getting a 100% LTV (effectively the deposit has disappeared) rather than 66%. Which should affect repayments.

His job is to not allow that to happen. The guy you actually replied to said that when he was buying abroad the valuer there valued the house at 20k less than the agreed purchase –which probably isn't enough to stop the loan. The Irish valuer just said "whatever price you pay is the value". That's the sentiment that in part drove the boom

You are missing the point entirely.

The typical house in the area sells for 400k - Why is that?

Did some white coated "valuer" turn up with the latest cutting edge valueometer, take a few readings, do a few calculations and then somehow tease out this number that was ingrained in the fabric of the buildings at the molecular level? - No, he didn't.
The house is "worth" 400k - because realistically that's what most people who would look to buy it are willing and able to pay for it. We're back to the tall part of the bell curve again. You and your 600k are an outlier - the bank don't like you.
Should you come upon hard times and not be able to pay back the 600k - the bank will not be able to recoup that money because the average buyer will say no, i'll only pay 400k. If you have 500k of your own and want to borrow 100k from the bank, they'll deal with you, "intrinsic value" be damned

ScumLord wrote: »

Nobodies explained what this intrinsic value is. What does it mean to the average person? What does a bank mean when it makes a distinction between value and price?

If the value was intrinsic - how could it be so changeable.
Is the damn house changing from day to day or year to year? Has the average house doubled in size from 5 or 6 years ago, moved to a nicer neighbourhood, what?

Yourself isit · 14-02-2017 9:42am

sbsquarepants wrote: »

You are missing the point entirely.

The typical house in the area sells for 400k - Why is that?

Did some white coated "valuer" turn up with the latest cutting edge valueometer, take a few readings, do a few calculations and then somehow tease out this number that was ingrained in the fabric of the buildings at the molecular level? - No, he didn't.
The house is "worth" 400k - because realistically that's what most people who would look to buy it are willing and able to pay for it. We're back to the tall part of the bell curve again. You and your 600k are an outlier - the bank don't like you.
Should you come upon hard times and not be able to pay back the 600k - the bank will not be able to recoup that money because the average buyer will say no, i'll only pay 400k. If you have 500k of your own and want to borrow 100k from the bank, they'll deal with you, "intrinsic value" be damned

Christ. The sheer disingenuous of your argument. You originally replied that whatever the buyer said was the price, and the valuer agreed, was the real value and the valuer should just accept it. And when I quoted that you agreed again. Now you seem to think that a valuer should reject an offer for 600k because it's an "outlier". Those are not the same arguments.

If the value was intrinsic - how could it be so changeable.
Is the damn house changing from day to day or year to year? Has the average house doubled in size from 5 or 6 years ago, moved to a nicer neighbourhood, what?

Because value is not price..

This is excruciating.

Cameo · 14-02-2017 9:52am

1991 pmaC epacS wrote: »

I don't like this frequently insulting people for buying houses theme running on this thread.
If people had another option (e.g. renting) then fair enough, by all means question their decision to purchase now but don't insult them. The rental market now is the worst it's ever been in the history of the State. 2-bed apartments renting for €1500-€2000/month depending what part of Dublin. And that's if you can even find one, the stock is practically zero. The standard of rental stock has also gone to the dogs. Dirty walls, carpets, broken appliances, etc. Not to mention the threat of being turfed out if the LL wants to sell. Can you blame anyone for wanting to purchase their property.

What are the alternatives? Rent/purchase in Longford and spend 3 hours a day commuting to Dublin where your job is? The travel costs would probably cancel out any savings made on property. Not to mention spending 15 hours+/week sitting in your car. Rent/purchase in a Dublin council estate with high crime/anti-social behavior rate, where property is cheap? Nobody wants to raise their children in those areas.

My point here is don't be insulting people who are left with no other viable option right now but to purchase and take out a large mortgage.

Exactly. The spiteful smugness is incredible. Not to mention the repeated insulting of "the Irish" by Irish people. Such arrogance.

screamer · 14-02-2017 10:39am

Course we are sure there's a whole generation out there that need to be suckered into huge mortgages....again, banks are throwing money around again and they can't loan to the overstretched.. history repeats itself unfortunately. Those of us with ridiculous mortgages know the pitfalls those yet to buy have no clue and hopefully they won't and up in the same sorry situation.

sbsquarepants · 14-02-2017 10:48am

Yourself isit wrote: »

Christ. The sheer disingenuous of your argument. You originally replied that whatever the buyer said was the price, and the valuer agreed, was the real value and the valuer should just accept it. And when I quoted that you agreed again. Now you seem to think that a valuer should reject an offer for 600k because it's an "outlier". Those are not the same arguments.

Because value is not price..

This is excruciating.

Ok, lets make this simple.

You tell me how the valuer arrives at this intrinsic value?
What does he base it on?

Is it, as I have repeatedly said and you have repeatedly denied - just what people are willing and able to pay?
Or is it something else?
If it's something else - maybe you could elaborate on what exactly that something is, rather than just repeating "Value" as if it actually means something.

SnakePlissken · 14-02-2017 11:32am

darkpagandeath wrote: »

B*locks... I have never in my life met anyone who planned to have kids.

Strange that you've gone through life only encountering those who view their children as mistakes and not the wider majority who indeed planned their families... Are you genuinely telling me you've no knowledge of anyone you know having gone through IVF? I can only assume you're still in your teens if you have not.

xckjoo · 14-02-2017 11:53am

sbsquarepants wrote: »

Ok, lets make this simple.

You tell me how the valuer arrives at this intrinsic value?
What does he base it on?

Is it, as I have repeatedly said and you have repeatedly denied - just what people are willing and able to pay?
Or is it something else?
If it's something else - maybe you could elaborate on what exactly that something is, rather than just repeating "Value" as if it actually means something.

You could try looking it up yourself. This is (again) from the Wikipedia entry on Intrinsic Value:

"In valuing real estate, a similar approach may be used. The "intrinsic value" of real estate is therefore defined as the net present value of all future net cash flows which are foregone by buying a piece of real estate instead of renting it in perpetuity. These cash flows would include rent, inflation, maintenance and property taxes. This calculation can be done using the Gordon model."

This is a limited definition and I'm sure each bank have their own formulas etc. so you'd have to do some of your own research to find out what they are. But the main point is that is not only based on "how much someone will pay for it" as you keep insisting. There's numerous factors they look at in an attempt to get a "true" value of the property.

Anyway, I think it has been shown that value and price are not the same thing. You can keep flogging the dead horse in an attempt to convince yourself your right but you're on your own. If you're actually interested do a modicum of research. Everything I've posted has been the result of ~30s of googling.

sbsquarepants · 14-02-2017 2:08pm

xckjoo wrote: »

You could try looking it up yourself. This is (again) from the Wikipedia entry on Intrinsic Value:

"In valuing real estate, a similar approach may be used. The "intrinsic value" of real estate is therefore defined as the net present value of all future net cash flows which are foregone by buying a piece of real estate instead of renting it in perpetuity. These cash flows would include rent, inflation, maintenance and property taxes. This calculation can be done using the Gordon model."

This is a limited definition and I'm sure each bank have their own formulas etc. so you'd have to do some of your own research to find out what they are. But the main point is that is not only based on "how much someone will pay for it" as you keep insisting. There's numerous factors they look at in an attempt to get a "true" value of the property.

Anyway, I think it has been shown that value and price are not the same thing. You can keep flogging the dead horse in an attempt to convince yourself your right but you're on your own. If you're actually interested do a modicum of research. Everything I've posted has been the result of ~30s of googling.

All sounds very technical and impressive.
But in your rush to sound learned you are ignoring the very foundation of the whole thing - you can tally up this cash flow against that cash flow and you can apply whatever the hell formula you like, gordons method, tom's, dicks or harrys method, but they all amount to the same thing - the cash flows you are tallying - what are they? How is it they come to have the value that they do? (I mean value as in number or measure, not the magic "value" I keep hearing about) and the answer you are pointedly trying to ignore is that that this number, this value, is what consumers are willing and able to spend.

You can add whatever bells and whistles you like, if it makes you feel like you actually have a point to make - but it boils down to the same thing -Anything you're selling be they houses, ice creams, lamborghinis or Faberge eggs are worth what people are willing and able to pay for them.
Nothing more, nothing less.

Stars and Stripes · 14-02-2017 2:11pm

Apparently in other countries the govt, media commentators etc get worried when house prices start to rise quickly. Here of course with our state run by Tory gombeens and hired liars in the media mostly owned by Penis O'Brien they celebrate it .....

xckjoo · 14-02-2017 2:26pm

sbsquarepants wrote: »

All sounds very technical and impressive.
But in your rush to sound learned you are ignoring the very foundation of the whole thing - you can tally up this cash flow against that cash flow and you can apply whatever the hell formula you like, gordons method, tom's, dicks or harrys method, but they all amount to the same thing - the cash flows you are tallying - what are they? How is it they come to have the value that they do? (I mean value as in number or measure, not the magic "value" I keep hearing about) and the answer you are pointedly trying to ignore is that that this number, this value, is what consumers are willing and able to spend.

You can add whatever bells and whistles you like, if it makes you feel like you actually have a point to make - but it boils down to the same thing -Anything you're selling be they houses, ice creams, lamborghinis or Faberge eggs are worth what people are willing and able to pay for them.
Nothing more, nothing less.

Not trying to sound smart dude. Nobody quoting the top lines of wikipedia results should ever think they're sounding smart. I was just giving you the benefit of the doubt and assuming you were genuinely interested in learning the difference between what something is worth and the price someone pays for it. You're clearly just invested in believing you've some insight the rest of don't though. Enjoy.

Yourself isit · 14-02-2017 2:58pm

sbsquarepants wrote: »

All sounds very technical and impressive.
But in your rush to sound learned you are ignoring the very foundation of the whole thing - you can tally up this cash flow against that cash flow and you can apply whatever the hell formula you like, gordons method, tom's, dicks or harrys method, but they all amount to the same thing - the cash flows you are tallying - what are they? How is it they come to have the value that they do? (I mean value as in number or measure, not the magic "value" I keep hearing about) and the answer you are pointedly trying to ignore is that that this number, this value, is what consumers are willing and able to spend.

No that's price.

You can add whatever bells and whistles you like, if it makes you feel like you actually have a point to make - but it boils down to the same thing -Anything you're selling be they houses, ice creams, lamborghinis or Faberge eggs are worth what people are willing and able to pay for them.
Nothing more, nothing less

That's also price.

I'm going to explain this to my wall.

Yourself isit · 14-02-2017 3:02pm

Stars and Stripes wrote: »

Apparently in other countries the govt, media commentators etc get worried when house prices start to rise quickly. Here of course with our state run by Tory gombeens and hired liars in the media mostly owned by Penis O'Brien they celebrate it .....

The French actually have a target for house builds per year. If it's not being reached they apply whatever measures (more state building, vat reductions, tax breaks) needed.

But that's not the free market way.

sbsquarepants · 14-02-2017 3:25pm

xckjoo wrote: »

Not trying to sound smart dude. Nobody quoting the top lines of wikipedia results should ever think they're sounding smart. I was just giving you the benefit of the doubt and assuming you were genuinely interested in learning the difference between what something is worth and the price someone pays for it. You're clearly just invested in believing you've some insight the rest of don't though. Enjoy.

I don't believe anything of the sort. If I actually knew something the rest don't I'd be sipping champagne on my yacht in the med, not sitting at my desk in parkwest with a cup of tea!:D

But if you think about it for a second, if there was some formula, some fundamental law, you could apply to work out what something was intrinsically worth - Why would prices fluctuate?
In this day and age of internet connectivity with all the worlds knowledge at everyone's fingertips - how and why would someone possibly pay over the odds for anything?
Why would anything ever be sold at a price below what it is "worth".
If there was any genuine basis in this intrinsic value, if this value could actually be calculated - how could prices fluctuate?
They simply couldn't.

If calculations are returning different values for the same problem on different days, you've got to ask yourself what is changing?

Has the house got bigger / smaller? Lets assume no, for the sake of simplicity.
Has it moved location? No

So what has changed?

What about supply and demand? That changes.
What about availability of credit? That changes.
What about wages, money in peoples pockets? That changes.

All these changes have the same effect - they force buyers to spend more, or conversely allow buyers to spend less.

Price is always set by buyers - you can put a paper clip for sale on ebay for a million euros, but unless a buyer agrees, all you have is a paper clip.
It doesn't matter what formula you've used to arrive at that million euro valuation.

So in short, Again I say it all boils down to the buyers and their willingness and ability to pay.

What do you say it boils down to?

xckjoo · 14-02-2017 3:46pm

sbsquarepants wrote: »

I don't believe anything of the sort. If I actually knew something the rest don't I'd be sipping champagne on my yacht in the med, not sitting at my desk in parkwest with a cup of tea!:D

But if you think about it for a second, if there was some formula, some fundamental law, you could apply to work out what something was intrinsically worth - Why would prices fluctuate?
In this day and age of internet connectivity with all the worlds knowledge at everyone's fingertips - how and why would someone possibly pay over the odds for anything?
Why would anything ever be sold at a price below what it is "worth".
If there was any genuine basis in this intrinsic value, if this value could actually be calculated - how could prices fluctuate?
They simply couldn't.

If calculations are returning different values for the same problem on different days, you've got to ask yourself what is changing?

Has the house got bigger / smaller? Lets assume no, for the sake of simplicity.
Has it moved location? No

So what has changed?

What about supply and demand? That changes.
What about availability of credit? That changes.
What about wages, money in peoples pockets? That changes.

All these changes have the same effect - they force buyers to spend more, or conversely allow buyers to spend less.

Price is always set by buyers - you can put a paper clip for sale on ebay for a million euros, but unless a buyer agrees, all you have is a paper clip.
It doesn't matter what formula you've used to arrive at that million euro valuation.

So in short, Again I say it all boils down to the buyers and their willingness and ability to pay.

What do you say it boils down to?

Okay. Maybe there is a basic misunderstanding. You seem to be thinking that the value is something is a concrete, fixed number. There is no absolute "value" number. It's not some absolute truth that you can arrive at in terms of euros and cent. I'm sure there's innumerable formulas out there for calculating the intrinsic value of something. They all have their strengths and weaknesses and don't give you a 100% accurate figure, but that doesn't mean they're worthless.

Saying that the value is whatever price someone will pay is vastly oversimplifying things. If you want to do that then feel free, but the difference between the intrinsic value of things and the price people are willing to pay is an important one. Without it we wouldn't have things like advertising, sales, stock market speculation, etc. This conceptual difference is also prevalent in our language and idioms: "you got ripped off", "what a bargain", etc. etc.

So by all means group value and price together mentally if you want. But you're missing the shades of grey that make a difference.

Boom_Bap · 14-02-2017 3:51pm

sbsquarepants wrote: »

I don't believe anything of the sort. If I actually knew something the rest don't I'd be sipping champagne on my yacht in the med, not sitting at my desk in parkwest with a cup of tea!:D

Meet me at the canal in 10 minutes, we can get attacked by swans and drink cheap cider

sbsquarepants · 14-02-2017 3:57pm

These swans....should I maybe bring a disposable barbecue, you know, just in case:D

sbsquarepants · 14-02-2017 4:26pm

xckjoo wrote: »

There is no absolute "value" number. It's not some absolute truth that you can arrive at in terms of euros and cent. I'm sure there's innumerable formulas out there for calculating the intrinsic value of something. They all have their strengths and weaknesses and don't give you a 100% accurate figure, but that doesn't mean they're worthless..

Now we're getting somewhere!
I never said they're worthless - they serve to protect lenders from being overexposed in the case of a borrower failing to pay for example (actually an example I used previously), or they can provide a guide for investors and so on.
They do have their uses, but they are all doing basically the same thing - they are looking at buyer behaviour and picking a position somewhere in the crowd where there is perceived to be some security.
But the very foundation is the buyer. This is my point!

xckjoo wrote: »

Saying that the value is whatever price someone will pay is vastly oversimplifying things. If you want to do that then feel free, but the difference between the intrinsic value of things and the price people are willing to pay is an important one. Without it we wouldn't have things like advertising, sales, stock market speculation, etc. This conceptual difference is also prevalent in our language and idioms: "you got ripped off", "what a bargain", etc. etc. .

Intrinsic value is a very bad turn of phrase. It implies some innate property of a given item which simply doesn't exist.
There is no measure of value other than what someone will pay.
Van Gogh died penniless despite sitting on billions worth of paintings -why? because they had no intrinsic value! At the time nobody was willing to pay for them, so they were worthless. Now, it's a different story. He could live like Roman Abramovic!
What the hell is "intrinsic" about that?

xckjoo wrote: »

So by all means group value and price together mentally if you want. But you're missing the shades of grey that make a difference.

There's 50 of those I believe:D

I get your point - we all have an idea of what something is worth. There are methods for generating a financial value of this worth. But no matter what that method predicts it still comes down to one simple FACT - if there is not a person out there willing and able to hand over that amount - that amount, whatever it says is nothing more than a number!
It only becomes a real thing, when someone agrees to actually hand over their cash!

xckjoo · 14-02-2017 5:58pm

sbsquarepants wrote: »

Now we're getting somewhere!
I never said they're worthless - they serve to protect lenders from being overexposed in the case of a borrower failing to pay for example (actually an example I used previously), or they can provide a guide for investors and so on.
They do have their uses, but they are all doing basically the same thing - they are looking at buyer behaviour and picking a position somewhere in the crowd where there is perceived to be some security.
But the very foundation is the buyer. This is my point!

You might not have said they were worthless but you implied they were pointless as value=price. You're directly contradicting yourself by admitting they aren't the same. Do you see that?

Intrinsic value is a very bad turn of phrase. It implies some innate property of a given item which simply doesn't exist.

Not my phrase. It's the one I found through 30s of googling. I don't pretend to know all/any the nuances of it but I think I can see why they named it that.

There is no measure of value other than what someone will pay.

Yes and if there were no people everything would be worthless. You're once again muddying the waters to try and oversimplify and bracket price and value as the same thing.

Van Gogh died penniless despite sitting on billions worth of paintings -why? because they had no intrinsic value! At the time nobody was willing to pay for them, so they were worthless. Now, it's a different story. He could live like Roman Abramovic!
What the hell is "intrinsic" about that?

That's art. It's always a special case. One mans art is another mans mess kind of thing. But nobody has said that the price someone is willing to pay does not factor into the valuation. It's just not the only factor. In the case of art it's probably 99.999% of the valuation (at least at the upper levels), but that's not true for other products.

There's 50 of those I believe:D

I get your point - we all have an idea of what something is worth. There are methods for generating a financial value of this worth. But no matter what that method predicts it still comes down to one simple FACT - if there is not a person out there willing and able to hand over that amount - that amount, whatever it says is nothing more than a number!
It only becomes a real thing, when someone agrees to actually hand over their cash!

Yes of course. Again, nobody (as far as I've seen) has disputed that. But just because someone is willing to pay X for something does not mean that its value is X. Otherwise why would the prices change? But just because you want to lump value and price in together does not mean they're one and the same. There's a reason people split them out and differentiate between them.

flutered · 14-02-2017 6:00pm

Elessar wrote: »

Couples camp in cars for two nights to buy homes.

People are back queuing for days to buy a house. Like really? I'm normally a fairly laid back kind of guy but this story really bothers me for some reason. For a new development in Portmarnock:

Queuing for days for the privilege of handing over between four hundred and fifty thousand and six hundred and sixty five thousand euro for a house. I don't have anything against the people in question (best of luck to them) but for this to become normal again when people are house hunting is flabbergasting. Is housing supply really that bad? I suppose it wouldn't be so bad if the houses were reasonably priced, but at circa. €500k for people to be practically clambering over each other to get one wreaks of something very wrong. What next? Fights in line over who gets the last 4 bed?

I don't know what bothers me more: that new development houses are so rare that people have to camp for days just to view one, or that they are so insanely expensive that people are forced to pay half a million euro for one, and yet still have to queue.

and one of them an accountant whatever next

darkpagandeath · 14-02-2017 6:29pm

SnakePlissken wrote: »

Strange that you've gone through life only encountering those who view their children as mistakes and not the wider majority who indeed planned their families... Are you genuinely telling me you've no knowledge of anyone you know having gone through IVF? I can only assume you're still in your teens if you have not.

Lol, No I live in the real world. Where did I say Mistakes ?

sbsquarepants · 14-02-2017 6:31pm

xckjoo wrote: »

You might not have said they were worthless but you implied they were pointless as value=price. You're directly contradicting yourself by admitting they aren't the same. Do you see that?.

I am not contradicting myself in any way!

Jesus - this is getting very repetitive.
Where in your opinion does this value derive from?
Should the time come whereby you want to turn your house into a pile of cash, what is it that determines the size of that pile?

xckjoo wrote: »

Not my phrase. It's the one I found through 30s of googling. I don't pretend to know all/any the nuances of it but I think I can see why they named it that..

Can you also see that there is actually nothing intrinsic about this "intrinsic value"

xckjoo wrote: »

Yes and if there were no people everything would be worthless. You're once again muddying the waters to try and oversimplify and bracket price and value as the same thing...

Ok, so again, I'm told there's a difference, so again i'll ask - what exactly is that difference? What physical property does this difference derive from?

xckjoo wrote: »

That's art. It's always a special case. One mans art is another mans mess kind of thing. But nobody has said that the price someone is willing to pay does not factor into the valuation. It's just not the only factor. In the case of art it's probably 99.999% of the valuation (at least at the upper levels), but that's not true for other products..

What are the other factors?
I keep hearing they exist - do they have names?

xckjoo wrote: »

Yes of course. Again, nobody (as far as I've seen) has disputed that. But just because someone is willing to pay X for something does not mean that its value is X. Otherwise why would the prices change? But just because you want to lump value and price in together does not mean they're one and the same. There's a reason people split them out and differentiate between them.

Ok. So through whatever means your object for sale is valued at lets say €1000. You put it up for sale and nobody wants to buy it.
Do you still believe it's value is "really" €1000.

Means Of Escape · 14-02-2017 10:20pm

Elessar wrote: »

Couples camp in cars for two nights to buy homes.

People are back queuing for days to buy a house. Like really? I'm normally a fairly laid back kind of guy but this story really bothers me for some reason. For a new development in Portmarnock:

Queuing for days for the privilege of handing over between four hundred and fifty thousand and six hundred and sixty five thousand euro for a house. I don't have anything against the people in question (best of luck to them) but for this to become normal again when people are house hunting is flabbergasting. Is housing supply really that bad? I suppose it wouldn't be so bad if the houses were reasonably priced, but at circa. €500k for people to be practically clambering over each other to get one wreaks of something very wrong. What next? Fights in line over who gets the last 4 bed?

I don't know what bothers me more: that new development houses are so rare that people have to camp for days just to view one, or that they are so insanely expensive that people are forced to pay half a million euro for one, and yet still have to queue.

Ah sure it will be grand

Glenster · 14-02-2017 11:22pm

darkpagandeath wrote: »

B*locks... I have never in my life met anyone who planned to have kids. Like you and me we were not planned. Only ones I ever hear about are women with little time left to have them, biological clock ticking.

What?????

I was planned. Born nine months after my parents bought their first house.

I have had sex that didn't result in kids. #humblebrag

Condoms and abortion exists.

The Rape of Lucretia · 15-02-2017 12:22am

Yourself isit wrote: »

Comparable countries being what or where exactly? Are you comparing Ireland to a small subset of Northern European countries, or what exactly.

Most of the restof the EU including a few other adjacent associates, but excluding the biggies, France, Germany, UK, Italy.
Its the shortsightedness of the Paddy that is particularly unimpressive and that gets him into trouble. Being utterly incapable of managing the property market is a prime example, as being cited in this thread again. A combination of overreaching ambition, snobbery, ignorant optimism, and the desire to make a quick and easy Euro, looks like leading him a cropper when he made the same drunk-like stumble not ten years ago.

Johngoose · 15-02-2017 8:56am

Time for David McWilliams to make an announcement to put us all right!

sbsquarepants · 15-02-2017 9:09am

Glenster wrote: »

What?????

I was planned. Born nine months after my parents bought their first house.

I have had sex that didn't result in kids. #humblebrag

Condoms and abortion exists.

Don't forget the A word
Anal
Abstinence

I can't remember which it is, but sure fúck it, they both work:D

xckjoo · 15-02-2017 10:27am

sbsquarepants wrote: »

I am not contradicting myself in any way!

You're directly contradicting yourself by saying that value and price are one in the same yet happily admitting that there's many ways to calculate value and that they "aren't worthless". How can there be when it's just the price?

Jesus - this is getting very repetitive.

It was repetitive long ago. Call things whatever you want. Good luck.

lawred2 · 15-02-2017 10:30am

Glenster wrote: »

I was planned. Born nine months after my parents bought their first house.

Spoke to your parents about it all did you?

Glenster wrote:

Was I a planned baby Daddy?

sbsquarepants · 15-02-2017 12:03pm

xckjoo wrote: »

You're directly contradicting yourself by saying that value and price are one in the same yet happily admitting that there's many ways to calculate value and that they "aren't worthless". How can there be when it's just the price?

It was repetitive long ago. Call things whatever you want. Good luck.

I must be a glutton for punishment but I'm going to make 1 last attempt!

There are many ways to calculate the "value" - that should be the first clue by the way, if it was an actual physical thing, there would be 1 way to calculate it. Or at the very least if there where several ways they'd yield the same result.

Why don't they do this?

However, that vagueness notwithstanding they can still be useful as I've said, banks use them, investors use them and so on. The second clue is that the banks and investors who use these figures, sometimes find them to not reflect reality - investors and banks do sometimes get it wrong and loose money despite their calculations.

Why does this happen?

If you go to an auction say, the item being auctioned comes with a guide price, sometimes a reserve price. This in essence is your calculated "value" (ignoring any trickery the auction house use to stimulate interest etc.) When the actual sale takes place the sale price very rarely matches this calculated value.

How come?

What is the common denominator in all of these incidences of the calculated value failing to accurately reflect the actual sale price?

I say it's the buyer and the amount of money he is willing and able to spend.

For what feels like the hundredth time - Who or what do you say it is?

The valuer calculates your house is worth 200k.
The auctioneer sells your house for 300k.

How much was the house worth?

xckjoo · 15-02-2017 12:40pm

sbsquarepants wrote: »

I must be a glutton for punishment but I'm going to make 1 last attempt!

There are many ways to calculate the "value" - that should be the first clue by the way, if it was an actual physical thing, there would be 1 way to calculate it. Or at the very least if there where several ways they'd yield the same result.

Why don't they do this?

However, that vagueness notwithstanding they can still be useful as I've said, banks use them, investors use them and so on. The second clue is that the banks and investors who use these figures, sometimes find them to not reflect reality - investors and banks do sometimes get it wrong and loose money despite their calculations.

Why does this happen?

If you go to an auction say, the item being auctioned comes with a guide price, sometimes a reserve price. This in essence is your calculated "value" (ignoring any trickery the auction house use to stimulate interest etc.) When the actual sale takes place the sale price very rarely matches this calculated value.

How come?

What is the common denominator in all of these incidences of the calculated value failing to accurately reflect the actual sale price?

I say it's the buyer and the amount of money he is willing and able to spend.

For what feels like the hundredth time - Who or what do you say it is?

The valuer calculates your house is worth 200k.
The auctioneer sells your house for 300k.

How much was the house worth?

Last time because I thought of something that might clear things up. Value, price and worth are the same only at one very specific point in time; the point of sale. Before and after that they deviate. But time is important as it doesn't stand still. So if you pay 300k for your example house, but the valuer is correct in his 200k estimate, then you're out 100k, i.e. you've spent 300k but your asset is only worth 200k and that's what you're offered when you try and sell it.

Your examples only works if you take time out of the equation.

sbsquarepants · 15-02-2017 1:27pm

xckjoo wrote: »

Last time because I thought of something that might clear things up. Value, price and worth are the same only at one very specific point in time; the point of sale. Before and after that they deviate. But time is important as it doesn't stand still. So if you pay 300k for your example house, but the valuer is correct in his 200k estimate, then you're out 100k, i.e. you've spent 300k but your asset is only worth 200k and that's what you're offered when you try and sell it.

Your examples only works if you take time out of the equation.

The person who sold the house and got 300k would say it was the value of 200k which was wrong - and what's more they'd have physical proof that it was wrong in the form of cold hard cash.

The next sale is a separate issue - you could get 200, you could get 400. Depends on the people involved in that transaction and their specific circumstances, if the new buyer values the place differently, the value will be different.
But the fact remains that at the only time you have actual physical data for - the value was 300k.

Now I'm not an idiot - I get the point that if you're paying double what the house next door is worth, you'd want to be questioning what you're doing. But the fact remains - if you (for whatever reason) are both willing and able to do so (pay double next doors price) then that's what the place is worth right there and then - simply by virtue of the fact that you are willing and able to buy it at that price.

Trust me, if you were selling the place, you'd agree!

xckjoo · 15-02-2017 2:07pm

sbsquarepants wrote: »

The person who sold the house and got 300k would say it was the value of 200k which was wrong - and what's more they'd have physical proof that it was wrong in the form of cold hard cash.

The next sale is a separate issue - you could get 200, you could get 400. Depends on the people involved in that transaction and their specific circumstances, if the new buyer values the place differently, the value will be different.
But the fact remains that at the only time you have actual physical data for - the value was 300k.

Now I'm not an idiot - I get the point that if you're paying double what the house next door is worth, you'd want to be questioning what you're doing. But the fact remains - if you (for whatever reason) are both willing and able to do so (pay double next doors price) then that's what the place is worth right there and then - simply by virtue of the fact that you are willing and able to buy it at that price.

Trust me, if you were selling the place, you'd agree!

Exactly. At that moment in time the value, price and worth are all the same. But that's not true at any other moment in time for our theoretical house.

We're all going to take the most money we can for the place, that's not in dispute. But that's also the problem. The number of properties is limited so people push up their offers to outdo everybody else that's bidding. That puts them in a lifetimes worth of debt and increases the risk of defaulting. Saying that the house is "worth whatever someone will pay" is only true at the moment in time that it is sold. As soon as the next economic downturn happens and large numbers of people lose their jobs, the defaults start happening and the banks are left with massive debts (which we have to pay for apparently).

Saying that value and price are the same puts you in the mind-frame that the price is acceptable, the market is acceptable and the lifetime of debt is acceptable.

SnakePlissken · 15-02-2017 5:42pm

darkpagandeath wrote: »

Where did I say Mistakes ?

If something is not planned, the consequence to same is called...?

whiskeyman · 15-02-2017 5:45pm

SnakePlissken wrote: »

If something is not planned, the consequence to same is called...?

Unexpected...

whisky_galore · 15-02-2017 5:46pm

http://www.irishtimes.com/news/social-affairs/homeowner-renting-16-beds-in-three-rooms-for-up-to-445-each-1.2975618

Someone taking clear advantage of the current housing crisis....

sbsquarepants · 15-02-2017 6:13pm

xckjoo wrote: »

Saying that value and price are the same puts you in the mind-frame that the price is acceptable, the market is acceptable and the lifetime of debt is acceptable.

What is the alternative though?

If the price is unacceptable, don't pay it.
But that has knock on consequences which may be even worse, so a lot of times people are "choosing" the lesser of two evils.

So saying it's viewing a life time of debt as acceptable is not quite right - unavoidable would be a better description!

xckjoo · 15-02-2017 6:50pm

sbsquarepants wrote: »

What is the alternative though?

If the price is unacceptable, don't pay it.
But that has knock on consequences which may be even worse, so a lot of times people are "choosing" the lesser of two evils.

So saying it's viewing a life time of debt as acceptable is not quite right - unavoidable would be a better description!

The problem is how the market is structured and allowed to operate. It'll take government regulations to change how things are, because as you pointed out, sellers will always try and maximise the money they get. There doesn't seem to be much appetite for actual reform from the government though. Probably a case of not wanting to lose the income they currently get from it combined with not wanting to be the ones to make things worse.

This is kinda why I thought it was important to push the point about price, value, etc. If we just accept it as the way things are then it's not going to change.

fiachr_a · 15-02-2017 8:56pm

whisky_galore wrote: »

Someone taking clear advantage of the current housing crisis....

Vulture funds.

whisky_galore · 15-02-2017 8:59pm

fiachr_a wrote: »

Vulture funds.

Same difference...it's all fingers in a greasy till...

donegaLroad · 15-02-2017 9:01pm

unless you are paying for the house with cash on the day of purchasing, you are not buying the house for €450,000.

If you stay in the house for the term of the mortgage, you will be paying approx €730,000 over 30 years in total.

Considering you pay 10% deposit, then you borrow €400,000 @ 4% over 30 years, the total amount will be almost double after you finish paying.

The big question is, what will the house be worth after you pay that much for it, and what condition will it be in after 30 years.... and will the next buyers be paying in excess of €750,000 for it? How long will this cycle continue?

Glenster · 16-02-2017 2:40am

xckjoo wrote: »

The problem is how the market is structured and allowed to operate. It'll take government regulations to change how things are, because as you pointed out, sellers will always try and maximise the money they get. There doesn't seem to be much appetite for actual reform from the government though. Probably a case of not wanting to lose the income they currently get from it combined with not wanting to be the ones to make things worse.

This is kinda why I thought it was important to push the point about price, value, etc. If we just accept it as the way things are then it's not going to change.

Making a distinction between value and price is pointless as value is a judgement that a person makes at a point in time, factoring in personal information that cant be quantified.

That is why you can estimate the value of something but cannot set the value of something definitively.

To say that an object has a single value to all people in all circumstances at a point in time is talking sh*t. All you can say is that "I reckon the value of this house to me/the man on the street/my ma is X".

To which I might say "Pay that amount then and prove it, otherwise f*ck off and stop talking ****"

Are we really back to this sh*t again?

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