Opinions on when the next property crash may happen

theboringfox

123shooter wrote: »

This is quite true and actually in the UK until the mid 1970's not many people purchased a house and there wasn't really a property market as we know it today.

The continuing relaxing of borrowing rules with banks and the banking sector seeing away to make money encouraged the property market to grow mainly from people who should never have got involved in buying a house to begin with.

The property market is there to suit banks and governments who like to use it to give people a 'feel good' factor and thats probably why they never tax the profits you make on your house (if there is any real profit).

But most property buyers are locked in to becoming an employer/slave to the banks for 25 years and paying at least 5 times more than the purchase price of the house they bought and making lots of dosh for the banking sector while taking huge risks with their hard earned cash.

How dod you come up with 'paying 5 times more than the purchase price'? Interest costs would not do that.

Lot of scaremongering going on here. EU has been talking about tax harmonisation for years. We have a highly educated workforce and are an english speaking country. We tick a lot of boxes outside of the tax rate too.

I don't see any crash coming but I would welcome seeing an increase in supply and a levelling off in prices. We are hopefully getting there.

Wanderer78

theboringfox wrote: »

How dod you come up with 'paying 5 times more than the purchase price'? Interest costs would not do that.

Lot of scaremongering going on here. EU has been talking about tax harmonisation for years. We have a highly educated workforce and are an english speaking country. We tick a lot of boxes outside of the tax rate too.

I don't see any crash coming but I would welcome seeing an increase in supply and a levelling off in prices. We are hopefully getting there.

nothing like a bit of 'equilibrium'! have we learnt anything at all about all this 'the market' stuff!

frankythefish

It cracks me up when I hear many people saying they ll wait to buy when the 'bubble bursts'. How much do you think you ll have spent on rent by then? Or worse, how long will you have to live with your parents? I d be very confident there will be no bust. Prices will likely tail off in coming years but thats about it. If you pay 250k for a house today I would nt be too concerned about loss in value. Bought similiar a year ago myself and now valued 280k.

__..__

frankythefish wrote: »

It cracks me up when I hear many people saying they ll wait to buy when the 'bubble bursts'. How much do you think you ll have spent on rent by then? Or worse, how long will you have to live with your parents? I d be very confident there will be no bust. Prices will likely tail off in coming years but thats about it. If you pay 250k for a house today I would nt be too concerned about loss in value. Bought similiar a year ago myself and now valued 280k.

Or, when the bubble bursts what makes them so sure they will even have a job.

There are times and places for everything. Now is the time to be getting out of renting and buying a house, and by coincidence it's the time for landlords to be getting out of renting too.
So you should see some former rental properties coming on to the market to ease the supply for owner/occupiers to buy. Atvthe same time investors won't be buying now either, so that takes some of the heat out too. Probably not going to make that much of a difference to prices but it will make some difference.

UsBus

theboringfox wrote: »

I don't see any crash coming but I would welcome seeing an increase in supply and a levelling off in prices. We are hopefully getting there.

A levelling off in prices...or a soft landing...I don't know any market cycle that works like that, as much as we may want it to. We will reach a tipping point at some stage. Whether it be PCP finance loans, interest rates or some other market shock. And after that market sentiment will only drive things in one direction.

Villa05

A lot of fear and greed in these posts. Perfect conditions for bubble formation

123shooter

theboringfox wrote: »

How dod you come up with 'paying 5 times more than the purchase price'? Interest costs would not do that.

Lot of scaremongering going on here. EU has been talking about tax harmonisation for years. We have a highly educated workforce and are an english speaking country. We tick a lot of boxes outside of the tax rate too.

I don't see any crash coming but I would welcome seeing an increase in supply and a levelling off in prices. We are hopefully getting there.

Mortgage rates for past 7 years are extremely low because the EU economy is poor. If the economy improves then so do interest rates which have even been in double figures in the last 30 years (over the time of some peoples mortgages).

123shooter

UsBus wrote: »

A levelling off in prices...or a soft landing...I don't know any market cycle that works like that, as much as we may want it to. We will reach a tipping point at some stage. Whether it be PCP finance loans, interest rates or some other market shock. And after that market sentiment will only drive things in one direction.

Leveling off and soft landings are 'La La talk' by television pundits politicians put on the spot during an interview.

In all my life I have never known anything but boom and bust for economies and property markets.

mloc123

123shooter wrote: »

Mortgage rates for past 7 years are extremely low because the EU economy is poor. If the economy improves then so do interest rates which have even been in double figures in the last 30 years (over the time of some peoples mortgages).

Do you honestly believe interest rates will return to double figures? It has never happened since ECB was created. You need to go back almost 25 years to find interest rates over 10%

The_Conductor

mloc123 wrote: »

Do you honestly believe interest rates will return to double figures? It has never happened since ECB was created. You need to go back almost 25 years to find interest rates over 10%

I don't think anyone genuinely expects this- however, an ECB 0DR of between 4-5% would be seen, even now, as a return to 'normalisation'.

The ECB are already tapering their purchases on the sovereign bond markets- i.e. they are slowly beginning to pull the hand brake- but they haven't stopped adding to liquidity- it is a gradual process.

123shooter

So to recap so far, you have..........

Brexit and the loss of billions to the EU economy.

Poland an EU country demanding hundred of billions from Germany.

Possible civil war and a breakup of Spain another EU country.

European countries refusing to accept the present leadership of the EU in their direction and immigration policies.

Possible mass strikes in France as they seem to have elected someone most people now disagree with.

And none of the problems solved which arose with Greece and other EU countries causing bailouts and the EU central bank to keep inventing and printing its own currency.

So all's well in 'La La' land ............lets invest in something long term?

123shooter

mloc123 wrote: »

Do you honestly believe interest rates will return to double figures? It has never happened since ECB was created. You need to go back almost 25 years to find interest rates over 10%

No because the EU economy has been in the doldrums for half of the ECB's life and at present cannot increase interest rates otherwise it would kill any chance of a recovery.

mariaalice

Why are individuals still looking at a home as investment, if you buy a home ( not an investment ) and pay the mortgage you will have a home and eventually you will own the home worrie about how much its worth is almost irrelevant its a home.


I am sure there are individual who are in negative equity who are paying a mortgage but are living in a home they are content with and eventually they will own the house.

Graham

mariaalice wrote: »

I am sure there are individual who are in negative equity who are paying a mortgage but are living in a home they are content with and eventually they will own the house.

+1

and those same people probably have some of the lowest months outlays as a result of their tracker mortgages.

horrible_boss

123shooter wrote: »

No because the EU economy has been in the doldrums for half of the ECB's life and at present cannot increase interest rates otherwise it would kill any chance of a recovery.

bar germany , none of the major economies of the eurozone have had decent growth for decades , the eurozone is at best a recovering region , zero chance of rates being raised , it would do no good for the banks as a tonne of assets they own would become troubled due to inability to make repayments

banks will be zombies for another generation , you only need to look at the share price of bank of ireland , no better than it was in 2013 despite the huge growth in the irish economy and housing market since

123shooter

Perhaps if there was some way either through taxation or other, that a house was only ever a home and never could be seen as a money making possibility. That then there would be a stable house price system and those homes would always then be at an affordable level?

horrible_boss

123shooter wrote: »

Perhaps if there was some way either through taxation or other, that a house was only ever a home and never could be seen as a money making possibility. That then there would be a stable house price system and those homes would always then be at an affordable level?

houses are affordable , just not in major cities

no capital today with the level of wealth dublin has is cheaper than dublin , auckland is considerably more expensive than dublin and wages considerably lower , to give one example

housing has shot up in urban areas this past fifteen to twenty years globally

draiochtanois

This post has been deleted.

PokeHerKing

123shooter wrote:

Perhaps if there was some way either through taxation or other, that a house was only ever a home and never could be seen as a money making possibility. That then there would be a stable house price system and those homes would always then be at an affordable level?

"In theory, communism works"

__..__

mloc123 wrote: »

Do you honestly believe interest rates will return to double figures? It has never happened since ECB was created. You need to go back almost 25 years to find interest rates over 10%

I never honestly believed I would never see near zero interests rates either.

johnp001

mloc123 wrote: »

Do you honestly believe interest rates will return to double figures? It has never happened since ECB was created. You need to go back almost 25 years to find interest rates over 10%

Just because you can't imagine the consequences of something doesn't mean it can't happen.

__..__ wrote: »

I never honestly believed I would see near zero interests rates either.

ECB rates have been zero since last year and BOJ rates are negative.
The premium consumers pay (for e.g. mortgages) over the central bank rates is a lot higher now than when banks were able to make money on ECB+1 tracker mortgages but that is largely a result of having to cover more bad debt now than in the past.
So even if rates rose back to 1 or 2% which is historically very low the consumer rates would be higher and if the amount of bad debt rose (as would be expected if people's repayments rose significantly) then the premium over central bank rates would rise even higher. So consumer rates in double figures are highly probable in the short to medium term.

traveller0101

Villa05 wrote: »

A lot of fear and greed in these posts. Perfect conditions for bubble formation

Any examples of fear and greed?

mariaalice wrote: »

Why are individuals still looking at a home as investment, if you buy a home ( not an investment ) and pay the mortgage you will have a home and eventually you will own the home worrie about how much its worth is almost irrelevant its a home.


I am sure there are individual who are in negative equity who are paying a mortgage but are living in a home they are content with and eventually they will own the house.

Some people might not plan to live in the property they're buying for their whole life.

theboringfox

UsBus wrote: »

A levelling off in prices...or a soft landing...I don't know any market cycle that works like that, as much as we may want it to. We will reach a tipping point at some stage. Whether it be PCP finance loans, interest rates or some other market shock. And after that market sentiment will only drive things in one direction.

By levelling off I meant the rate of growth in percentage terms would lower and that's been happening. I don't believe there is a bubble at the moment so I agree bubbles don't have soft landings but this is not a bubble. People are using a severe low point in market in 2012 as benchmark for there being a bubble.

Interesting views in this atricle

https://lovindublin.com/news/governments-top-housing-adviser-says-the-housing-crisis-is-completely-normal

ThunbergsAreGo

theboringfox wrote: »

By levelling off I meant the rate of growth in percentage terms would lower and that's been happening. I don't believe there is a bubble at the moment so I agree bubbles don't have soft landings but this is not a bubble. People are using a severe low point in market in 2012 as benchmark for there being a bubble.

Interesting views in this atricle

https://lovindublin.com/news/governments-top-housing-adviser-says-the-housing-crisis-is-completely-normal

Says the site who posts "look at this amazing one bed for €1,000,000" :P:P:P

theboringfox

naughtb4 wrote: »

Says the site who posts "look at this amazing one bed for €1,000,000" :P:P:P

That just shows you didn't read the article. Here's the same content through a different news firm

https://www.irishtimes.com/news/social-affairs/ireland-s-housing-crisis-is-completely-normal-1.3262349?mode=amp

ThunbergsAreGo

theboringfox wrote: »

That just shows you didn't read the article. Here's the same content through a different news firm

https://www.irishtimes.com/news/social-affairs/ireland-s-housing-crisis-is-completely-normal-1.3262349?mode=amp

I did, I jut found it odd being reported (in a tone which seems to be implying "who is he fooling") on a site which regular promotes houses that too are overpriced.

Anyways, apologies for the off topic

I actually think he is right, what is happening in Ireland in an urban setting is not dissimilar from any other urban first world area

theboringfox

naughtb4 wrote: »

I did, I jut found it odd being reported (in a tone which seems to be implying "who is he fooling") on a site which regular promotes houses that too are overpriced.

Anyways, apologies for the off topic

I actually think he is right, what is happening in Ireland in an urban setting is not dissimilar from any other urban first world area

Apologies for saying you didn't read it and being snipey. I did myseld wonder if posting it from that site was in error. Ya I think what's said in that article is well worth heeding. And to be clear I think housing is a problem but I just think it highlights very well how in Ireland we can often when it comes to matters think we have problems way worse than other parts of Europe.

Fliucharbith

I don't think we have any control over housing in this country. Sure, we COULD do something in theory, but the whole thing is such a tangle of catch-22's that it may as well be stated as a fact......we cant do anything. Its out of our hands.

It will be an external factor that will destroy property values in Ireland. Brexit is a weak but decent example. But it is unlikely to be anything we see coming, hence it being a "crash" and not a prepared-for-danger.

The majority of people in this country, say circa start of 2008, didn't have a the slightest breeze that anything was going to happen. But behind closed doors in far away places there were rumblings as early as summer 2007 (on a world scale). It came out of the blue for the vast, vast majority. That's how it will happen next time too.

Fact of the matter is that property in this country (and most developed countries) are FAR over priced, not just a little, VERY far overpriced. We've just become used to it in some strange fashion, not seeing the trees for the forest. (No need to point out the clichéd "its worth what people will pay".....its a statement that has absolutely no value. "So what if a mars bar costs 300 euro? Its worth that to someone". Useless sentiment.)

Property has gone as far as its going to go without VERY serious societal repercussions (which in turn will collapse the property market, before or after, same result). On that basis, I predict a global crash in property (started by a completely obtuse event) is definitely on the cards. If it doesn't happen within a year, its only more likely to happen the next year, and so on. I believe it will be within 2, if not sooner.

Inevitability.

(of course all the people who have tied massive mortgages around their throats for the rest of their lives, and other vested interests will willingly ignore the basic facts of the matter, "it'll stabilise, they can only go up" they'll say.....yeah, sure!

theboringfox

Fliucharbith wrote: »

I don't think we have any control over housing in this country. Sure, we COULD do something in theory, but the whole thing is such a tangle of catch-22's that it may as well be stated as a fact......we cant do anything. Its out of our hands.

It will be an external factor that will destroy property values in Ireland. Brexit is a weak but decent example. But it is unlikely to be anything we see coming, hence it being a "crash" and not a prepared-for-danger.

The majority of people in this country, say circa start of 2008, didn't have a the slightest breeze that anything was going to happen. But behind closed doors in far away places there were rumblings as early as summer 2007 (on a world scale). It came out of the blue for the vast, vast majority. That's how it will happen next time too.

Fact of the matter is that property in this country (and most developed countries) are FAR over priced, not just a little, VERY far overpriced. We've just become used to it in some strange fashion, not seeing the trees for the forest. (No need to point out the clichéd "its worth what people will pay".....its a statement that has absolutely no value. "So what if a mars bar costs 300 euro? Its worth that to someone". Useless sentiment.)

Property has gone as far as its going to go without VERY serious societal repercussions (which in turn will collapse the property market, before or after, same result). On that basis, I predict a global crash in property (started by a completely obtuse event) is definitely on the cards. If it doesn't happen within a year, its only more likely to happen the next year, and so on. I believe it will be within 2, if not sooner.

Inevitability.

(of course all the people who have tied massive mortgages around their throats for the rest of their lives, and other vested interests will willingly ignore the basic facts of the matter, "it'll stabilise, they can only go up" they'll say.....yeah, sure!

I will respectfully disagree.

I think some lessons have been learned from last bust. There are now clear controls in place for property related lending. Anyone I know buying is very aware of not trying to borrow up to the max amount.

Interest rates will go back up but loans are stress tested for that. In addition rates are increased where economy is in risk of over heating so generally happens when things are going well.

We have low and falling unemployment. The government spending levels and debt levels are a big concern and not where I'd like them to be but not outrageous either.

There has and always will be the threat and realisation of major external shock events but I don't think you can plan your life around same.

I think we will correct supply and that will hopefully improve prices. But accommodation will always be a major cost of anyone regular persons outgoings. A shortfall of 3 bed semi Ds close to major towns and cities will be an issue as therea a groing population and fixed anount of land.

I am staying positive in where Ireland is at right now and where it is going.

Each to their own and only time will tell eho is right

Fliucharbith

theboringfox wrote: »

I will respectfully disagree.

I think some lessons have been learned from last bust. There are now clear controls in place for property related lending. Anyone I know buying is very aware of not trying to borrow up to the max amount.

Interest rates will go back up but loans are stress tested for that. In addition rates are increased where economy is in risk of over heating so generally happens when things are going well.

We have low and falling unemployment. The government spending levels and debt levels are a big concern and not where I'd like them to be but not outrageous either.

There has and always will be the threat and realisation of major external shock events but I don't think you can plan your life around same.

I think we will correct supply and that will hopefully improve prices. But accommodation will always be a major cost of anyone regular persons outgoings. A shortfall of 3 bed semi Ds close to major towns and cities will be an issue as therea a groing population and fixed anount of land.

I am staying positive in where Ireland is at right now and where it is going.

Each to their own and only time will tell eho is right

Its good to be positive, but emotion has practically naught to do with anything. Its not about fear, its not about optimism, or ignorance or luck.

In my opinion the fundamentals of a problem are of the utmost importance, everything else, naturally, is secondary. It doesn't matter a jot to me what regulations are in place or not in place, what has been learned or not learned, or even unlearned (as in the fact that basic housing should be an affordable aspiration that doesn't take two people working 30 years to pay off). * mainly talking about Dublin, of course.

House prices are far too high when matched against income, and especially when compared to previous generations. Even a below average house in Dublin, where the majority of jobs are concentrated, requires a couple on average pay to take on a mortgage that is basically an entire lifetime.

If two people have to work, that means children require a kindergarten or some such, an other affordability nightmare. When the couple reach their 50's/60's they have managed to buy a house, and that has more than likely sucked up all potential wealth generation in the meantime. And then the child will be, at best, in the exact same situation regarding housing. Its is completely unsustainable, and therefore, in my opinion, an inevitability that property prices will crash. The needs must.

I read somewhere not too long ago that financial analysts, on hindsight, have a predictability of around 51%. Shocking, really. Its all guesswork, and in that example it goes to show that you might as well be flipping a coin as listening to anyone on nitty gritty details. That's why I, personally, ignore the details, and focus on the larger, incontrovertible fats of the matter at hand.

Houses are way too expensive, so they will come crashing eventually. Given the world climate, the known triggers are everywhere, and even they are a tiny fraction of the unknown triggers.

My heart goes out to people that seemingly have no choice but to buy now, or have bought recently. The best advice I can give is ignore all of it and make alternative plans, live your life and be ready for when homes become affordable (like at least 50% of what they are now).

Timing is EVERYTHING.