Opinions on when the next property crash may happen

theboringfox

Fliucharbith wrote: »

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.

50% reduction? You are talking about prices falling well below the cost of building them.

The concept of a 30 year mortgage has existed for decades. Out of curiosity what time period do you think is reasonable to pay back to own your own house? Even in the 70s people took out long term mortgages. Prices were lower but they earned way less and interest costs were higher.

Country was broke back then. Let's not look back and think we were better off then That's nonsense.

Spirogyra

Fliucharbith wrote: »

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.

I agree, at a time when -Job security- is ever decreasing. How can one then take on a long term debt ? And there's an avalanche (perhaps slight hyperbole but only slight) of potential job losses in the decade ahead due to -Automation-. Driverless Cars, Buses, where will the next generation get their jobs ?

Also as petrol is phased out the government will loose a major source of VAT.

Fliucharbith

theboringfox wrote: »

50% reduction? You are talking about prices falling well below the cost of building them.

The concept of a 30 year mortgage has existed for decades. Out of curiosity what time period do you think is reasonable to pay back to own your own house? Even in the 70s people took out long term mortgages. Prices were lower but they earned way less and interest costs were higher.

Country was broke back then. Let's not look back and think we were better off then That's nonsense.

Well that's what I was referring to before when I said it was a tangle of catch-22's, an unworkable problem. Its an arbitrary number, 50%, but that would roughly be what I consider "morally" correct, as well as economically sound. That is to say, its still a very significant amount of money that requires a very significant amount of time to earn/pay off, but 15 years of a persons life is, to me, a reasonable amount of effort. 30 years is practically a productive lifetimes worth, which leaves the only conclusion that a person starting out with little or nothing should devote their life to buying a home, pop their clogs soon thereafter and then the process begins again for their children. That's not good, and there are far worse places than Dublin in that regards.

So 50% of the money is reasonable, and 50% of the time is reasonable. You cant have an economy that is based off each persons lifetime equating to a single house purchase. And rightly so, its easy to say that 50% less is lower than construction costs. That's not an indication that houses would be too cheap, that's merely proof that construction costs are equally as overpriced. Every facet of this housing problem is equal to its neighbouring factor. That is to reiterate that contructio costs are too high and house purchase is too high. Is it the chicken or the egg? Add in any other factor, whether it be land, zoning, vulture speculation etc.....they all equal this mess, equally so.

Its no good pointing out that factor X doesn't make any sense because of factor Y......because all the factors are working in tandem with each other, propping each other factor up.

That's what I meant when I said that we have virtually no control over housing here. You cant do X without Y getting in the way, and then theres also A, B, C, D etc. Its a perfectly balanced unsolvable issue. That's what happens when you let a problem fester and take hold over too long a time. And that's why it will be a crash that fecks the lot of it down the tube.

I'm not going to do any research on it right now, but from the many personal examples I know Im confident in saying that previous generations, whatever other problems may have existed, high interest rates etc, could afford a home in Dublin on a single wage within 10-20 years. Reasonable.

And if the country was broke "back then", how does anyone own anything nowadays?

Fliucharbith

Spirogyra wrote: »

I agree, at a time when -Job security- is ever decreasing. How can one then take on a long term debt ? And there's an avalanche (perhaps slight hyperbole but only slight) of potential job losses in the decade ahead due to -Automation-. Driverless Cars, Buses, where will the next generation get their jobs ?

Also as petrol is phased out the government will loose a major source of VAT.

There are many potential game-changers ahead that we know about. And many more that we don't.

I don't mind long term debt, but my definition is probably a lot different than other people. To me, long-term debt is 10 to 15 years. Once you start pushing the 30 year mark, that is not long-term debt, that is LIFETIME debt, as in productive, healthy years of a life.

Its a scarily large chunk of a persons life. Its not like anything else, where you can get to pick and choose between for, example, the job that you do. You can change career paths multiple times even. Its not like relationships which you can try out many different times. Once you sign up for a 30 year debt, that's you done, essentially. You don't get a second chance to start over (notwithstanding swapping houses, selling in a recession/boom etc).

Timing is everything. If a person bought a particular house in 2012 they could have a 15 year mortgage versus the 30 year mortgage theyd pay if they bought the house today. In exchange for "waiting" 5 years, you could have saved 15 years of debt. The average person gets one shot at it, so be sure you make it at the right time because the quality of (an entire) life you have will hinge on it.

LirW

It's all well and good but nowadays people don't have the choice on when to buy, unless they have huge amounts of cash sleeping in the bank.
I see lots of people complaining about how they didn't buy in 2011/12. Well simple, the banks didn't lend money and it was incredibly difficult getting a mortgage. Society was still dealing with the aftermath of the bad burn of the crash. Now people are buying because the banks are lending. There was more or less a whole generation that had to hold tight to get into the market and once the banks made it possible to take out larger mortgages again, the market picked up.

Unless you earn very good money and have a significant pile of cash it's unlikely you'll buy in a crash. If you earn the money to pay a large mortgage off in a shorter period of time, then you see the light at the end of the tunnel on the day you lend. But for the average earner it's a take it or leave it really. Buy now and pay a lot or wait and you might be lucky, oooor you wait and miss the right time and can't buy.

koheim

Fliucharbith wrote: »

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.

So lets wait for the crash? If the crash you are predicting (or hoping for) it will mean a few things:
-no available credit (so no mortgages and no credit for builders)
-job losses in the hundred of thousands
-new negative equity generation
-banks balance sheets will take a hit and need to be capitalised with tax payers money again
-nothing will be built
-nothing will be sold as people have learnt and will hold on to the property till next upturn

Cost of building is the main issue at the moment and have to be tackled, and it is the tax side and development levies that have to be looked at. Also the obsession that everyone have to live in a 3 bed semi makes building extremely expensive, a waste of space.

Houses have always been expensive no matter what generation you look at. No way it was easier in the seventies or eighties.

Average income for a full time permanent employee (which you need to be to get a mortgage) in Ireland is 47K, in Dublin it is probably higher.

Mortgage interest in the highest in Europe, it can only come down.

I can't see a new big crash like we had in 2008 ever happening again, but I do think that from now on we will not see much price increases, maybe 1-5% per year.

Spirogyra

Fliucharbith wrote: »

There are many potential game-changers ahead that we know about. And many more that we don't.

I don't mind long term debt, but my definition is probably a lot different than other people. To me, long-term debt is 10 to 15 years. Once you start pushing the 30 year mark, that is not long-term debt, that is LIFETIME debt, as in productive, healthy years of a life.

Its a scarily large chunk of a persons life. Its not like anything else, where you can get to pick and choose between for, example, the job that you do. You can change career paths multiple times even. Its not like relationships which you can try out many different times. Once you sign up for a 30 year debt, that's you done, essentially. You don't get a second chance to start over (notwithstanding swapping houses, selling in a recession/boom etc).

Timing is everything. If a person bought a particular house in 2012 they could have a 15 year mortgage versus the 30 year mortgage theyd pay if they bought the house today. In exchange for "waiting" 5 years, you could have saved 15 years of debt. The average person gets one shot at it, so be sure you make it at the right time because the quality of (an entire) life you have will hinge on it.

Again I agree, 30 is 'a lifetime', the healthiest years of one's life, all to pay for a property that one will hopefully own for just a few years before one passes on. Is it a form of Indentured Servitude to the Banks ?.

Was passing houses not far from Connoly Station a few weeks ago, small little cottages, one or at most two bedrooms, maybe the second one being a loft . The value of those tiny dwellings now would be staggering, But they were probably 'Working Class' houses until 15 or 20 years ago. No 'working man or woman' now could afford them.

Fliucharbith

LirW wrote: »

It's all well and good but nowadays people don't have the choice on when to buy, unless they have huge amounts of cash sleeping in the bank.
I see lots of people complaining about how they didn't buy in 2011/12. Well simple, the banks didn't lend money and it was incredibly difficult getting a mortgage. Society was still dealing with the aftermath of the bad burn of the crash. Now people are buying because the banks are lending. There was more or less a whole generation that had to hold tight to get into the market and once the banks made it possible to take out larger mortgages again, the market picked up.

Unless you earn very good money and have a significant pile of cash it's unlikely you'll buy in a crash. If you earn the money to pay a large mortgage off in a shorter period of time, then you see the light at the end of the tunnel on the day you lend. But for the average earner it's a take it or leave it really. Buy now and pay a lot or wait and you might be lucky, oooor you wait and miss the right time and can't buy.

I completely agree. And again, it goes back to what I was saying about it being an intractable problem.

The only way to get through a problem that cannot be solved on its own terms is to simply create a different set of personal parameters and work AROUND the problem. Change the terms.

Property costs in 2012 were decent, but you couldn't get a loan for them. You can get a loan now but house prices are extremely overpriced. Catch-22.

You have to do something different, or else be prepared to be at the mercy of things outside your control. Try to take control of your own life.

If its possible, as one simplified example, buy a home elsewhere in the country at a decent price where you have decent employment prospects (it requires effort). Salaries are not all that different across the country, house prices are wildly different. Use that to your advantage and escape the boom/bust cycle of the cities (and again, we could be talking about Toronto as easily as Dublin or Berlin here). That, potentially, puts you in a situation where you can own your own home in a reasonable amount of time, and then, if fortunate enough, you have good savings over the rest of your lifetime........so if it really was THAT important to live in Dublin, at least you have the peace of mind that you are progressing toward it.

Not that I blame people, but there is too much of the mindset that "I want to be HERE, not anywhere else, and I want to be here NOW!" Yeah its not nice to move away from family and friends, from a more vibrant social scene.......but in this example solution, at least you escape the catch-22 of trying to afford and you have the sense of progress in your life.

All easier said than done of course, but that's why it requires effort. You wont get anywhere, unless by luck, tying your future to the ups and downs of overpriced property

Fliucharbith

koheim wrote: »

So lets wait for the crash? If the crash you are predicting (or hoping for) it will mean a few things:
-no available credit (so no mortgages and no credit for builders)
-job losses in the hundred of thousands
-new negative equity generation
-banks balance sheets will take a hit and need to be capitalised with tax payers money again
-nothing will be built
-nothing will be sold as people have learnt and will hold on to the property till next upturn

Cost of building is the main issue at the moment and have to be tackled, and it is the tax side and development levies that have to be looked at. Also the obsession that everyone have to live in a 3 bed semi makes building extremely expensive, a waste of space.

Houses have always been expensive no matter what generation you look at. No way it was easier in the seventies or eighties.

Average income for a full time permanent employee (which you need to be to get a mortgage) in Ireland is 47K, in Dublin it is probably higher.

Mortgage interest in the highest in Europe, it can only come down.

I can't see a new big crash like we had in 2008 ever happening again, but I do think that from now on we will not see much price increases, maybe 1-5% per year.

I answered a lot of what you are posing in my previous post.

I will say that I disagree wholeheartedly about house prices now versus "then". There is no way that the same house in, say Cabra, cost the same amount of hours worked in 1970 versus now. No way. Or versus 1980, or even 1990.

Just one example of the top of my head that I know personally (an anecdote, I know). A person I knew in the 80's had a roughly decent job, I think it was paid about 13 thousand pounds a year. He bought his house in 1991 for about 25 thousand pounds. Try and find anything remotely comparable to that these days in Dublin, I quadruple dare you :P

And as for whether interest rates go up, down or sideways it all falls into to the same category for me as what a certain person said at a particular policy meeting in a bank in spain in 2013......its all fruitless detail that ignores the basic, most fundamental of issues.......property is far too expensive.

(On a sidenote, I personally came to the conclusion that previous generations had the necessities of life catered to, affordable housing and whatnot, but had very little in the way of luxury, foreign holidays and the like. Its the inverse of today, we have all the disposable luxuries we could dream of, 700 euro phones, gigantic televisions, brand new cars, multiple cheap holidays......but it has come at the expense of necessities such as housing. My conclusion is that the "powers that be" (perhaps just human nature too) cottoned on that there was VASTLY much more profit to be had speculating on what people NEED as opposed to "would like".)

scouserstation

I remember in the late 90s all the experts were saying that rising house prices would not last, there was shock horror when average house prices started to rise over the 100k mark, people were screaming for government intervention to make houses more affordable, look what happened in the years that followed...

If you think Dublin house prices are going to come down anytime soon then you are sadly mistaken, i think we are witnessing again what happened in the 90s with prices only really starting to rise, if you look at most major european cities this will give you a good example of where we are going, take London where you will now be paying 400 thousand sterling for a 3 bed council house 30km outside of the city centre

mariaalice

In Italy most people can only get a 50% mortgage and people still survive.

Fliucharbith

scouserstation wrote: »

I remember in the late 90s all the experts were saying that rising house prices would not last, there was shock horror when average house prices started to rise over the 100k mark, people were screaming for government intervention to make houses more affordable, look what happened in the years that followed...

If you think Dublin house prices are going to come down anytime soon then you are sadly mistaken, i think we are witnessing again what happened in the 90s with prices only really starting to rise, if you look at most major european cities this will give you a good example of where we are going, take London where you will now be paying 400 thousand sterling for a 3 bed council house 30km outside of the city centre

I beg to differ. There is a limit to absolutely everything, its a matter of what you are willing to sacrifice, and after everything is sacrificed.....what then? (For what its worth, I don't really see much difference in comparable house prices between Dublin and London, except that London has higher upper limits. Both are outrageous, the difference between being shot in the head once versus twice, its much of a muchness)

I remember thinking about 2012-ish that there was no way on earth the same thing was going to happen again, that house prices would balloon out of control again, that governments would be at best ineffective and at worst complicit again etc. But it has happened again, memories are very short, shockingly so.

I thought prices would stabilise about 2013, if not lower slightly. But there was one fatal flaw in my logic, and that was my underestimation of how bad things would be allowed to get. The obvious one is that homelessness/desperation for a home would be actually allowed to happen. I really didn't think that would happen!

With that being said, there are only two ways this thing will go worldwide. Either there will be a massive downturn that will cripple current prices and bring them back to normality, or else the societal knock-on effect will be allowed to grow even larger still. The Japanese system of allowing debt to be passed down to kin would be an example of allowing the problem to get worse.

Or another way of saying it; either a certain amount of people get burned now/soon with a crash (and subsequent normalisation of normal prices), or else EVERYONE is screwed by kicking the can down the road.

So yes, I do hope there is a crash, but my hopes are entirely separate from my reasoning that it will likely happen. The sole reason I hope it happens is that its for the general good, not only for people now but for the future of the country.

I have my own house and I have no financial incentive either way, but I just think its pathetic to see the desperation of people trapped in this nonsense cycle, amongst whatever else is wrong with the country, its just another blemish against us that we cant provide an affordable country in which to live.

So buy into it and hope against hope, or do something different. You cant expect to achieve anything different than anyone else if you follow the exact same mindset as everyone else.

Fliucharbith

mariaalice wrote: »

In Italy most people can only get a 50% mortgage and people still survive.

Allow people 100% mortgages and they will take it. House prices will rise to match it. Allow them 300% mortgages and house prices will rise to match it.

They will take every penny from you, no matter how many pennies you have. It has already become acceptable that most of your productive adult life will be exchanged for a home, if they could give you an injection to make you live 200 years, then voila!......youll be paying 200 years worth of your life for a home.

Its spun out of control, the whole thing, theres no accountability nor responsibility from anyone anymore.

"How much can they pay, no matter the cost to them? Right, that's the price then." Its at breaking point, so either property prices break, or something else breaks in lieu in the meantime.

scouserstation

Fliucharbith wrote: »

I beg to differ. There is a limit to absolutely everything, its a matter of what you are willing to sacrifice, and after everything is sacrificed.....what then? (For what its worth, I don't really see much difference in comparable house prices between Dublin and London, except that London has higher upper limits. Both are outrageous, the difference between being shot in the head once versus twice, its much of a muchness)

I remember thinking about 2012-ish that there was no way on earth the same thing was going to happen again, that house prices would balloon out of control again, that governments would be at best ineffective and at worst complicit again etc. But it has happened again, memories are very short, shockingly so.

I thought prices would stabilise about 2013, if not lower slightly. But there was one fatal flaw in my logic, and that was my underestimation of how bad things would be allowed to get. The obvious one is that homelessness/desperation for a home would be actually allowed to happen. I really didn't think that would happen!

With that being said, there are only two ways this thing will go worldwide. Either there will be a massive downturn that will cripple current prices and bring them back to normality, or else the societal knock-on effect will be allowed to grow even larger still. The Japanese system of allowing debt to be passed down to kin would be an example of allowing the problem to get worse.

Or another way of saying it; either a certain amount of people get burned now/soon with a crash (and subsequent normalisation of normal prices), or else EVERYONE is screwed by kicking the can down the road.

So yes, I do hope there is a crash, but my hopes are entirely separate from my reasoning that it will likely happen. The sole reason I hope it happens is that its for the general good, not only for people now but for the future of the country.

I have my own house and I have no financial incentive either way, but I just think its pathetic to see the desperation of people trapped in this nonsense cycle, amongst whatever else is wrong with the country, its just another blemish against us that we cant provide an affordable country in which to live.

So buy into it and hope against hope, or do something different. You cant expect to achieve anything different than anyone else if you follow the exact same mindset as everyone else.

Big crashes like we seen in 2008 dont happen very often, I would say 1929 was the last, so i wouldnt be holding my breath for a property crash, it would be good to see house prices stabilize though with price inflation easing a bit,

I think we are going to see a global transformation in the next 15-20 years that will radically change the way people live and work, this will mean being able to live anywhere and practically work anywhere, so that will have an impact on prices too

Graham

Fliucharbith wrote: »

"How much can they pay, no matter the cost to them? Right, that's the price then." Its at breaking point, so either property prices break, or something else breaks in lieu in the meantime.

Or the central bank keep the lending restrictions/limits in place. That's probably the ceiling most people are hitting at the moment which is keeping prices in check to some degree.

Cuddlesworth

Graham wrote: »

Or the central bank keep the lending restrictions/limits in place. That's probably the ceiling most people are hitting at the moment which is keeping prices in check to some degree.

I would have said its having a effect. After 400k, the market is nowhere near as aggressive in Dublin as the 300k market.

Fliucharbith

scouserstation wrote: »

Big crashes like we seen in 2008 dont happen very often, I would say 1929 was the last, so i wouldnt be holding my breath for a property crash, it would be good to see house prices stabilize though with price inflation easing a bit,

I think we are going to see a global transformation in the next 15-20 years that will radically change the way people live and work, this will mean being able to live anywhere and practically work anywhere, so that will have an impact on prices too

They haven't happened very often, past tense! But I'm sure you've come across the phrase "boomier and bustier", that the time difference between financial "corrections", shall we say, is decreasing exponentially. Much like the increase in house prices, a very lofty curve upwards over time.

As for a stabilisation of house prices, I fail to see how its a good thing (discounting the alternative of them continuing to increase in price, of course).

Can anybody, without vested interest, state a good reason for a home costing 30 years of labour (usually for two people) versus, say 15? What possible positive reason can there be?

You could mention construction costs, but I already stated how they are far overpriced too. Besides, the average construction worker will be after more money in order to get the money for increased house prices.....that's why its a catch-22 and a practically moot point.

As for probable near-future trends in labour distribution, lets take working from home as an example. If that mode of work increases in prevalence, and people move away from over priced areas to, lets say, Leitrim.........what do you think will happen to house prices in Leitrim? Will the banks/vested interests just let it slide? They've already sold everyone on the idea of giving up 30 years of their working life to afford a home, it'll just spread to Leitrim too. As I said in a previous post, the increase in availability (money, labour) is matched, virtually 1-to-1 with prices. The only thing you could hope for is to move to Leitrim before everyone else :P

Excellent precedent was the move from a man being the sole earner of a household to women working too. Did house prices stay at the level of one persons salary? No they didn't, they simply doubled. There was no financial gain whatsoever (from a family unit point of view, in fact, when you cost in child minding, it was actually a negative)

Another hypothetical. In the future it becomes common to own a utility robot that can "produce" labour. It becomes increasingly common for a married couple to have a robot. It wouldn't be long before a government would step in to levy taxes on owning a labour producing robot. Now what do you think would happen to house prices? Would they remain at the affordability level they are now, ie a woman and man, or would they grow to match (probably exactly!) the man, woman AND robot? You can guess the answer.

Its a mugs game, with no limits on how much you will be charged. Don't be so quick to think that future developments will somehow increase your quality of life, it is logically more likely to decrease it (just like being single now stacks the odds way against you, eventually you will have to be married AND have a robot to afford a home!).

Nobody will step up to the plate and own this runaway wreck, hence it will be left to indeterminate crashes and the HOPE that we recover each time, despite the increasing frequency, volatility and odds with each hand lost in the game.

Fliucharbith

Graham wrote: »

Or the central bank keep the lending restrictions/limits in place. That's probably the ceiling most people are hitting at the moment which is keeping prices in check to some degree.

That wasn't exactly my point. More to the fore however, is the 30 year mortgage becoming (already?) standard. 30 years of labour is 30 years of labour, no matter the difference in terms of amount.

If it was more affordable, it wouldn't be 30 years, right?

Graham

Fliucharbith wrote: »

That wasn't exactly my point. More to the fore however, is the 30 year mortgage becoming (already?) standard. 30 years of labour is 30 years of labour, no matter the difference in terms of amount.

House prices aside, I don't see a huge issue with someone paying for a home over 30 years when they're likely to see the benefit of it for 40/50+ years.

Villa05

koheim wrote:

Cost of building is the main issue at the moment and have to be tackled, and it is the tax side and development levies that have to be looked at. Also the obsession that everyone have to live in a 3 bed semi makes building extremely expensive, a waste of space.

Tax needs to looked at alright but it needs to be a substantial reccuring tax rather than a one off tax. It costs a lot of money to maintain the infrastructure and services that add value to people's homes

koheim wrote:

Houses have always been expensive no matter what generation you look at. No way it was easier in the seventies or eighties.

It was not easier but it was done on 3 times one person's salary and over 20 years plus you got a bigger house

koheim wrote:

Mortgage interest in the highest in Europe, it can only come down.

You think, who do you think will be paying the compensation for all those customers who had there tracker mortgage rates withdrawn

koheim wrote:

I can't see a new big crash like we had in 2008 ever happening again, but I do think that from now on we will not see much price increases, maybe 1-5% per year.

As sure as night follows day it will happen again.

Fliucharbith

Graham wrote: »

House prices aside, I don't see a huge issue with someone paying for a home over 30 years when they're likely to see the benefit of it for 40/50+ years.

Wouldn't it be better if it were less, assuming you have no vested interest? Slippery slope at play.

"I don't see a huge issue with house prices matching double incomes as opposed to a single income"

"I don't see the huge issue with paying for a 10 year mortgage.......I don't see the huge issue with paying for a 20 year mortgage........I don't see the huge issue with paying for a 30 year mortgage"

In the near future, "I don't see the huge issue with passing mortgage debt to my son, he'll get a home to live in and will eventually own it."

Bit further down the line, "I don't see the huge issue with mortgage debt being passed down to my son and then down to his son, they'll have a home to live in and eventually my grandson will own it."

Further still, "I don't see the huge difference between never having the stability of owning my own home, the landlord takes my money for the rest of my life and his/my future family will get to benefit just as equally".

You probably get my point. There is a proven track record for the direction we are heading, and tenements are looking more and more likely as the future home again, even if they are cleaner and nicer looking. There are many reputable world reports that claim as much, more and more people "forced" to live together and increasing disparity in asset ownership (look at reports on a microscale even now about people "choosing" to live with family, and then people wonder why population decline is in effect in Europe! A few owning most all wealth at the expense of everyone else, 'twas ever thus, except on steroids now.

scouserstation

Fliucharbith wrote: »

They haven't happened very often, past tense! But I'm sure you've come across the phrase "boomier and bustier", that the time difference between financial "corrections", shall we say, is decreasing exponentially. Much like the increase in house prices, a very lofty curve upwards over time.

As for a stabilisation of house prices, I fail to see how its a good thing (discounting the alternative of them continuing to increase in price, of course).

Can anybody, without vested interest, state a good reason for a home costing 30 years of labour (usually for two people) versus, say 15? What possible positive reason can there be?

You could mention construction costs, but I already stated how they are far overpriced too. Besides, the average construction worker will be after more money in order to get the money for increased house prices.....that's why its a catch-22 and a practically moot point.

As for probable near-future trends in labour distribution, lets take working from home as an example. If that mode of work increases in prevalence, and people move away from over priced areas to, lets say, Leitrim.........what do you think will happen to house prices in Leitrim? Will the banks/vested interests just let it slide? They've already sold everyone on the idea of giving up 30 years of their working life to afford a home, it'll just spread to Leitrim too. As I said in a previous post, the increase in availability (money, labour) is matched, virtually 1-to-1 with prices. The only thing you could hope for is to move to Leitrim before everyone else :P

Excellent precedent was the move from a man being the sole earner of a household to women working too. Did house prices stay at the level of one persons salary? No they didn't, they simply doubled. There was no financial gain whatsoever (from a family unit point of view, in fact, when you cost in child minding, it was actually a negative)

Another hypothetical. In the future it becomes common to own a utility robot that can "produce" labour. It becomes increasingly common for a married couple to have a robot. It wouldn't be long before a government would step in to levy taxes on owning a labour producing robot. Now what do you think would happen to house prices? Would they remain at the affordability level they are now, ie a woman and man, or would they grow to match (probably exactly!) the man, woman AND robot? You can guess the answer.

Its a mugs game, with no limits on how much you will be charged. Don't be so quick to think that future developments will somehow increase your quality of life, it is logically more likely to decrease it (just like being single now stacks the odds way against you, eventually you will have to be married AND have a robot to afford a home!).

Nobody will step up to the plate and own this runaway wreck, hence it will be left to indeterminate crashes and the HOPE that we recover each time, despite the increasing frequency, volatility and odds with each hand lost in the game.

History does not always repeat itself, that is true, People spend most of their working lives paying for a roof over there heads, always have and always will, somethings will never change, but you will find as time goes by the quality of life does actually increase.

What was it like to live in this country 100 years ago? You wouldnt have owned your own house thats for sure, likewise 100 years from now what we are talking about here will seem trivial, some people may opt not to own a house but rather live within their workplace, some people will work from home, some people will commute long distances to their workplaces but long distance travel will not be the same as what it is today, some people will not bother working at all, somethings never change

I would love it if we could all be mortgage free by the time were 50 but the property market is just never going to allow that to happen and most of us will never go back to the days of being tennants in our own homes with only the rich able to afford to buy houses and it is a good thing that your average worker can now buy their own home, even though it comes at a cost, the market will correct itself in the long run but everything eventually finds its equilibrium

Graham

Fliucharbith wrote: »

Wouldn't it be better if it were less, assuming you have no vested interest? Slippery slope at play.

Ahh come on, that's 3rd rate political party manifesto stuff.

I can't think of many people that would say they're happier when things get more expensive.

It doesn't mean it's going to happen. It doesn't mean anyone would want the consequences if it did happen.

Fliucharbith

scouserstation wrote: »

History does not always repeat itself, that is true, People spend most of their working lives paying for a roof over there heads, always have and always will, somethings will never change, but you will find as time goes by the quality of life does actually increase.

What was it like to live in this country 100 years ago? You wouldnt have owned your own house thats for sure, likewise 100 years from now what we are talking about here will seem trivial, some people may opt not to own a house but rather live within their workplace, some people will work from home, some people will commute long distances to their workplaces but long distance travel will not be the same as what it is today, some people will not bother working at all, somethings never change

I would love it if we could all be mortgage free by the time were 50 but the property market is just never going to allow that to happen and most of us will never go back to the days of being tennants in our own homes with only the rich able to afford to buy houses and it is a good thing that your average worker can now buy their own home, even though it comes at a cost, the market will correct itself in the long run but everything eventually finds its equilibrium

Well its an optimistic outlook, but I think that people will look back on the post world war era (60's to 80's) as the boom time of western civilisation (theres a reason people of that generation are called "boomers"). Ireland only got a sniff of it, but most reputable future outlooks are grim on an individual level. I can already tell you that I look back somewhat enviously at them.

Have a look at the generic life phase of micro-organisms. It basically begins small, begins to curve upward as the population grows and there is an abundance of resources. Then it flatlines as population growth equals resource usage, and finally it begins to decline as resources run out, population grows too big and the toxic by-products of their "lifestyle" accumulate and poison them. We are no different, our population is at the interphase between too many people, too little resources. Its easy to lose sight of the bigger picture, but even the likes of outrageous house prices are an omen of where we are. There is no such thing as exponential, indefinite growth and "the future will always be better", because every indication is that our best times are just behind us.

I don't want to live to be 150 if it comes with all the package in tow. I don't care if you can cure me of every disease if it just means sending me to work for longer. I don't care if I have a 3D Hyper-Vision VR headset if I have to work all day to give somebody else my money for the pleasure of renting their property (you can see how those two will nicely match up as people try to forget reality, yeah!?).

It isn't that I'm some modern incarnation of a luddite either, I just see the realistic outcome of so called "advances". Practically every single thing people "create" in the world is for the sole purpose of profit, but they'll bend over backwards to convince you its a great thing to give them the fruits of your labour. Its great for innovation, but the actual motivation behind it is dreadful. At the end of the day very few people REALLY benefit from the free market and its latest must-have doo-dad.

I'd swap luxuries for necessities in a heartbeat, and I think that's the biggest fib going on in the world right now, and probably into the future. I just cant fathom how people regularly buy 600, even 1000 euro phones, get hire purchase agreements for cars they'll never own etc.......and then complain that they cant afford to rent a roof over their heads, or save for a deposit for a home of their own and the personal security that goes with it. They just don't realise that they have swapped one thing for another.

The most ingenious/heinous thing the financial world ever pulled was the idea of "credit", I give you a fiver today and you give me back 6 tomorrow or I'll ruin your life. The very idea that money generates money (interest) is absurd at the most basic level. That's how one person ends up owning everything, a snowball effect.

Anyway, all going way off the point. I think property will crash due to an unforeseen, and probably obtuse event in the near future, 1 to 2 years. The fundamentals are all in place, it just needs the trigger. Either that or something else will collapse in its place.

Fliucharbith

Graham wrote: »

Ahh come on, that's 3rd rate political party manifesto stuff.

I can't think of many people that would say they're happier when things get more expensive.

It doesn't mean it's going to happen. It doesn't mean anyone would want the consequences if it did happen.

Or what youre saying is....."yeah, it would be better" all things balanced out.

Heres the thing, as long as the suggestion that "house prices should be much lower" can be countered by "but building costs are so high!" and other such dead-end thinking, nothings going to change.

And THAT is why crashes happen. Its because we don't truly have any control over the property problem, and not only that, it seems like nobody WANTS control either.

Its a free for all. It will crash sooner rather than later.

scouserstation

Fliucharbith wrote: »

Or what youre saying is....."yeah, it would be better" all things balanced out.

Heres the thing, as long as the suggestion that "house prices should be much lower" can be countered by "but building costs are so high!" and other such dead-end thinking, nothings going to change.

And THAT is why crashes happen. Its because we don't truly have any control over the property problem, and not only that, it seems like nobody WANTS control either.

Its a free for all. It will crash sooner rather than later.

That is why a crash will not happen, because of the cost of actually building a home. If it costs almost 300k to build a house in Dublin, why would a developer sell for any less than that, under normal market conditions they will look to make a profit. Even when house prices dropped back in 2008/2009 they did not drop much below construction costs, and if wages rise in the construction sector then so do house prices.

The days of government backed subsidized housing stock are gone unfortunately we now have to pay cost price for housing.

whatever76

Cuddlesworth wrote: »

I would have said its having a effect. After 400k, the market is nowhere near as aggressive in Dublin as the 300k market.

Agree in Cork the 250-300k bracket is deadly

123shooter

scouserstation wrote: »

That is why a crash will not happen, because of the cost of actually building a home. If it costs almost 300k to build a house in Dublin, why would a developer sell for any less than that, under normal market conditions they will look to make a profit. .

A crash as you call it can happen and ends up with the buyers disappearing.

This happens for many reasons and then the house becomes like any other product and gets sold for whatever anybody is prepared or has the money to pay for it.

The ability to secure loans and consumer confidence caused by employment or the threat of some event which could effect the economy are the usual factors.

Nothing to do with what a developer wants to do, he is as much open to events as anybody else.

At present there are no good signs regards stability for Ireland because Ireland is open to events because all her eggs are being controlled by the EU which is in actual turmoil.

It is ridiculous that a country cannot decide or manage and control it's own destiny. So your 'normal house market' is in the hands of others.

scouserstation

123shooter wrote: »

A crash as you call it can happen and ends up with the buyers disappearing.

This happens for many reasons and then the house becomes like any other product and gets sold for whatever anybody is prepared or has the money to pay for it.

The ability to secure loans and consumer confidence caused by employment or the threat of some event which could effect the economy are the usual factors.

Nothing to do with what a developer wants to do, he is as much open to events as anybody else.

At present there are no good signs regards stability for Ireland because Ireland is open to events because all her eggs are being controlled by the EU which is in actual turmoil.

It is ridiculous that a country cannot decide or manage and control it's own destiny. So your 'normal house market' is in the hands of others.

Im not saying that a crash cannot happen but under current market conditions it is very unlikely, new builds are selling for just a little over building cost and second hand homes are selling for even less,
Back in the mid 2000's you had property selling for more than twice the cost of construction with prices rising to unsustainable levels.That is why when the bubble burst house prices dropped by more than 50%
When you start seeing your average 3 bed semi rise to over 500k then i would start worrying but we are a long way off that

123shooter

scouserstation wrote: »

Im not saying that a crash cannot happen but under current market conditions it is very unlikely, new builds are selling for just a little over building cost and second hand homes are selling for even less,
Back in the mid 2000's you had property selling for more than twice the cost of construction with prices rising to unsustainable levels.That is why when the bubble burst house prices dropped by more than 50%
When you start seeing your average 3 bed semi rise to over 500k then i would start worrying but we are a long way off that

Your house market and prices have nothing to do with any so called crash. If the money is available and people can pay it back they will borrow to buy what they think they can afford.

The crash in 2008 was not caused by house prices it was caused by banks giving out money they didnt have and actually borrowed it from other banks. When this chain was broken then the system falls apart as it did which then caused job losses which resulted in people not repaying their loans etc etc.

So it was outside forces/events which eventually broke the back of scheme which was in operation............same could happen now.........next week.......next year.