Opinions on when the next property crash may happen

Ayuntamiento

To me having 'no skin in the game' would mean that I'm not moving forwards with my life. I did that for many years (renting, moving around, etc), but you reach a point in your life where you want to put roots down somewhere and you need stability.

We finally have a stable home. We don't have to worry about the landlord selling up every year. We can have pets. We could have a baby tomorrow and know that we have a permanent home for them.
Luckily we have recession proof and well-paid jobs. Obviously that colours our view of home ownership. I understand that it's a perilous choice for people in other professions. I still think it's the best choice we ever made, regardless of whether it pays future dividends or not.

masculinist

Not sure why Brexit is given as a reason for property to crash. If anything it will make Ireland and Dublin the place to go for English speaking migrants. And you'll have the Goldman Sach types migrating too and buying up those prestige houses .The city of London wont be able to hold onto all of them.

wil

Ayuntamiento wrote: »

Never understand the point of these threads. OP seems to be rubbing their hands in glee at the thoughts of a crash...but why do you care?

We just bought an amazing house in Dublin that gives myself and my husband a less than 20min commute into the city centre for work. It's big enough that we can have a family if we choose to. We love the area. It's cheaper than our previous rent. The mortgage repayments represent 1/8 of our monthly income.
Basically we bought ourselves a home. I couldn't care less if the market collapsed tomorrow and our house was worth nothing. It's our home and our shelter.

You are doing exactly what people are supposed to be able to do, buy a home, which is what houses were intended for, not an investment, a nest egg, a speculative purchase, a rental opportunity and any other bs notion that has been peddled to commoditize a necessity for the benefit of the already rich.

Dublin is a small city with a low population density that doent even make it onto the map when it comes to global cities. Yet a policy of continuing to allow a dysfunctional market controlled by a small number of vested interests decide everything ensures that the seesaw choice is continuous instability leading to those who need to own a home with very little - huge interest rates tight mortgage, low interest rate huge mortgage, no mortgages no supply spiralling prices. It's rarely been a property ladder in Dublin, more of a property tightrope.

PokeHerKing

pangbang wrote:

Brexit. Frexit (? Eurosceptic winner either way)

In what world is Macron Euro sceptic?

pangbang

PokeHerKing wrote: »

In what world is Macron Euro sceptic?

Had to check that myself, got the candidate wrong, my bad. I still reckon its Le Pen now or later, either way.

From a VERY general point of view, its quite difficult to see anything stopping this push towards protectionism. And when I say anything, I mean I cant think of ANY thing, effective or not

Samuel T. Cogley

masculinist wrote: »

Not sure why Brexit is given as a reason for property to crash. If anything it will make Ireland and Dublin the place to go for English speaking migrants. And you'll have the Goldman Sach types migrating too and buying up those prestige houses .The city of London wont be able to hold onto all of them.

We might get some financial sector benefit and a few hundred rich people in Coffee to Go in Ballsbridge but for the wider economy Brexit could be catastrophic.

jive wrote: »

Cheaper to buy during a crash which is why OP probably cares. Another crash is inevitable, all these things are cyclical. Ultimately if you buy now and it crashes in 10 years then who cares, if you were wanting to sell then you'd be buying in the same market anyway.

Not really - people hang on to property during a crash. We're seeing the affects of that now, huge pent up demand from people who can only move now. People renting places out and renting themselves or renting and buying somewhere else.

I was in a position to buy during the last crash, very little out there that someone with a mortgage can buy, let alone getting a mortgage in the first place. It's lots of executor sales and the odd wreck. Great if you can buy cash and do the building work yourself, not so great for first time buyers.

Wheeliebin30

The crash happened and we had 100s of thousands of empty homes we couldn't sell.

Nowadays there is barely any houses for sale.

Huge difference, but people are too idiotic to actually look into things and love starting these hyperbole headline threads.

Cyrus

pangbang wrote: »

I don't think that's a healthy line of thinking. If you are hungry, buy that 300 quid meal right in front of your face that very moment? This housing situation is being driven out of desperation, and making decisions in desperate situations is not a good idea.

Be pessimistic when everyone is optimistic, and vice versa. Sound advice.

And as I said above, its not that I would "like" there to be a crash, I just see it as an inevitability with warning signs flashing all over the shop

Who says people are being optimistic? I don't see that sentiment at all what I do see is people who are able to afford houses buying them again

I also see a lot of people calling a property crash because they think it makes them look clever even though the prevailing circumstances make it unlikely in the medium term

Graham

Samuel T. Cogley wrote: »

Great if you can buy cash and do the building work yourself, not so great for first time buyers.

This.

Even though I don't support the theory that a price crash is imminent, I am well able to see that property prices are cyclical.

Those waiting for the next 'crash' to buy are just as likely to spend the next decade renting (at enormous cost), watching prices increase only to discover when the next crash does hit that nobody will give them a mortgage.

pangbang

Wheeliebin30 wrote: »

The crash happened and we had 100s of thousands of empty homes we couldn't sell.

Nowadays there is barely any houses for sale.

Huge difference, but people are too idiotic to actually look into things and love starting these hyperbole headline threads.

Don't worry, when the next crash happens and the 100's of thousands here for the beneficial situation swan off....we'll still have 100's of thousands of empty houses again. And no money to buy them again, and debt up the wazoo again, except for the very few smart SOB's and REIT's. Rinse and repeat. Fine gael out, fianna fail in. Rinse and repeat.

Wheeliebin30

pangbang wrote: »

Don't worry, when the next crash happens and the 100's of thousands here for the beneficial situation swan off....we'll still have 100's of thousands of empty houses again. And no money to buy them again, and debt up the wazoo again, except for the very few smart SOB's and REIT's. Rinse and repeat. Fine gael out, fianna fail in. Rinse and repeat.

And people whinging the goverment aren't doing enough for the homeless and need to build more houses..again.

pangbang

Cyrus wrote: »

Who says people are being optimistic? I don't see that sentiment at all what I do see is people who are able to afford houses buying them again

I also see a lot of people calling a property crash because they think it makes them look clever even though the prevailing circumstances make it unlikely in the medium term

If I point at the sky and call it blue, it doesn't make me feel clever. Makes me feel funny" to point it out, but not clever.

And I reckon its a good case of optimism when you're laying 30-ish years of your life in debt on a sketchy economy, on houses that are obviously outrageously over-priced.

Property in this country, and most developed countries is a sick joke. Nobody should have that shackle foisted about them for the productive and best years of their life. It'll change though, because it has to

BabySlam

I read something once that said "depressions" come every thirty years approx, e.g. 1932 bank crash, 1950s hard times, 1980s no jobs, 2010 low house prices, so that suggests approx 2040 will be the next depth in the trough...

yosser hughes

morrga wrote: »

Dublin relative to most other first world cities is at the lower end of the scale in terms of property cost. As the economy grows and stabilises who's to say there will be any short to medium term crash. Reckless lending and naieve borrowing created the last crash world wide. Banks are stress tested more than ever now. From what I hear, CBI are demanding more and more regulatory reporting from financial institutions. This is exactly the structure the lending and property sectors need to ensure an incrementally growth phase rather than the crash and boom policies of years gone by.

People seem to think that spiralling house prices means people are borrowing beyond their means again. This is not necessarily true. The population is growing, jobs are growing, salaries are growing and people who want to live in urban areas can afford to, while those who cant are unfortunately been squeezed out.

There is no telling what the future holds but as an economy we should be hoping for stability rather than trying to predict downturns.

Aah look at all the 'likes' for the post that's optimistic about property prices 'growing' as you refer to it.There's none that cheer lead so loud as those that bought in already. Same as last time.
You class Dublin as a first world city.Please tell me you're not comparing it to London,Paris,New York etc.

Brexit and a U.S. reduction in corporation tax are huge.

Apart from all of that, property prices have been manipulated to repair bank balance sheets. Particularly AIB's. Increasing prices was stated policy.
AIB will be floated again soon, after that who knows?

Prices in Dublin anyway, are unsustainable and it's sad to see so many hoping high prices are here to stay.
Nothing learned.
You hope for stability all you like, the public are ready to vote Fianna Fail back; the party that brought you the IMF. That's right! Proven failures, being voted back in. Now, with a logic like there's no wonder people can't wait to overpay.
The terrible shame is, all the mortgage and rent over-rpayment being sucked out of the real economy in to unproductive assets.

Graham

yosser hughes wrote: »

Prices in Dublin anyway are unsustainable and it's sad to see so many hoping high prices are here to stay.
Nothing learned.

Disagreeing with the theory that a crash is imminent is not the same as hoping high prices are here to stay.

Expecting current prices to remain around their current level because of supply issues is not the same as hoping high prices are here to stay.

pangbang

BabySlam wrote: »

I read something once that said "depressions" come every thirty years approx, e.g. 1932 bank crash, 1950s hard times, 1980s no jobs, 2010 low house prices, so that suggests approx 2040 will be the next depth in the trough...

But house prices weren't low circa 2010, they were lowER than the few years before. That's all.

They weren't bargains, they weren't giving them away. In fact, there was a concerted and sustained effort by many vested interests to make sure they were NOT low or reasonable, that even at those lower prices people wouldn't be able to get the money for them.

On a sideward note, imagine if homes could be afforded by 8 to 10 years average pay. What in the name of goodness would the powers-that-be do to get that extra money off people??

You see that's the trick that they learned a good while back. There was a time were luxuries were expensive, and people sucked a bit of money out of people. But the REAL money, the REAL strike-it-rich strategy, was to move away from luxuries being expensive, and foist expense onto NECESSITIES. "Now the f88kers will HAVE to give us their money!"

Its a miracle that food hasn't been targeted.....yet.

Cyrus

pangbang wrote: »

If I point at the sky and call it blue, it doesn't make me feel clever. Makes me feel funny" to point it out, but not clever.

And I reckon its a good case of optimism when you're laying 30-ish years of your life in debt on a sketchy economy, on houses that are obviously outrageously over-priced.

Property in this country, and most developed countries is a sick joke. Nobody should have that shackle foisted about them for the productive and best years of their life. It'll change though, because it has to

You don't appear to believe in buying a home full stop

There won't be a property crash here this year or next year or the year after

pangbang

Cyrus wrote: »

You don't appear to believe in buying a home full stop

There won't be a property crash here this year or next year or the year after

Says you, m'lad, with all that evidence! You don't need to worry about me, I certainly don't have to.

pilly

Wheeliebin30 wrote:

Nowadays there is barely any houses for sale.

It's a myth that there aren't any empty houses out there though. Plenty of ghost estates still out there, just not for sale.

Presumably a lot belong to NAMA?

wil

pilly wrote: »

It's a myth that there aren't any empty houses out there though. Plenty of ghost estates still out there, just not for sale.

Presumably a lot belong to NAMA?

There are thousands of empty houses in towns and villages around Ireland, in places with few jobs. There's no one to buy them especially as so many are still at totally unrealistic prices. During the boom many built mini mansions out in the village suburbs, town houses were sold to investors who would now rather let them fall down rather than sell them at a loss. Guess the banks want to keep them on the books at these un obtainable selling prices rather than take another haircut. So not only are there ghost estates, but ghost towns and villages.

noodler

No bubble of. Credit at the moment.

Seems demographics will maintain demand for next five at least.

I wouldn't expect prices to calm until then at least but not sure about a big. Drop off the cliff like previously.

trobbin

Cyrus wrote: »

how quick do you see supply coming on, every year that passes more and more unmet demand is building up.

unless interest rates goto above 6% in a very short period that wont create a crash, rates increasing will be a response to rising inflation and wages will increase also

Is that what happened in England under Thatcher's government😏

I love Sean nos

Any day now. *

* May be in the past as well as the future.

turbot

Why a crash isn't likely just yet:

- With substantial net immigration these last few years (population has increased by hundreds of thousands), supply can't cope with demand.
- The number of developments in the pipeline is moderate relative to the cumulative demand for properties.

Why a boom is constrained:

- Many people who were successful and arguably, smart, ended up with negative equity they are still dealing with. They are not going to be able to purchase multiple investment properties and rules in this space limit that too.

Major risk factors for a crash:

- Brexit, especially a hard Brexit, could trigger a recession for Ireland (due to reduced exports to the UK driven by either changes in trading policy and/or delinked sterling and/or UK recession).
- Within 5 years, many service sector jobs will start to be affected by automation much more.
- Trumps policies may see companies reducing investment in Ireland
- Various industries are in decline / becoming less viable (media / advertising) and the sheer comforts of the last boom may mean people struggle to adapt to value creation in the future.

So in the near term (12 to 18 months) a crash seems unlikely.
In the mid term (24 to 60 months) Brexit, AI / automation, Trumps policies and related trade effects, may limit prosperity for ordinary citizens. This may lead to a crash and/or may reduce purchasing power for normal people.

Cyrus

turbot wrote: »

Why a crash isn't likely just yet:

- With substantial net immigration these last few years (population has increased by hundreds of thousands), supply can't cope with demand.
- The number of developments in the pipeline is moderate relative to the cumulative demand for properties.

Why a boom is constrained:

- Many people who were successful and arguably, smart, ended up with negative equity they are still dealing with. They are not going to be able to purchase multiple investment properties and rules in this space limit that too.

Major risk factors for a crash:

- Brexit, especially a hard Brexit, could trigger a recession for Ireland (due to reduced exports to the UK driven by either changes in trading policy and/or delinked sterling and/or UK recession).
- Within 5 years, many service sector jobs will start to be affected by automation much more.
- Trumps policies may see companies reducing investment in Ireland
- Various industries are in decline / becoming less viable (media / advertising) and the sheer comforts of the last boom may mean people struggle to adapt to value creation in the future.

So in the near term (12 to 18 months) a crash seems unlikely.
In the mid term (24 to 60 months) Brexit, AI / automation, Trumps policies and related trade effects, may limit prosperity for ordinary citizens. This may lead to a crash and/or may reduce purchasing power for normal people.

i agree with a lot of this, i think rather than a crash we will see a settling of prices with some areas decreasing a little and some staying stagnant.

i dont see the price of large family homes in south dublin for example losing anything on current prices, and they will continue to rise.

if trump gets his 15% through it will have an impact here for sure, but we are still the best bet for an EMEA base for US co's and that wont change.

Theboinkmaster

Tigerandahalf wrote: »

Trump today announced that he will reduce corporate tax to 15% from something like 35%. It will have to go through congress it seems first but it is likely to happen.

Why does everyone keep sh!ting on about Trump's 15%....anyone who mentions this is clearing just taking their info from RTE headlines.

Dig a little deeper and you'll see this is never going to happen, they've been trying to lower the corporation tax for the past 30 days. Trump cannot get support from his own party to lower it even a little, let alone the democrats. He couldn't even get rid of obamacare.

It's not going to happen, at max he might get it down a little but not enough to impact us. He'll be gone in less than 4 years anyway and US mults know this, they're not going to make strategic decisions based on a lunatics twitter rants.

AlmightyCushion

Theboinkmaster wrote: »

Why does everyone keep sh!ting on about Trump's 15%....anyone who mentions this is clearing just taking their info from RTE headlines.

Dig a little deeper and you'll see this is never going to happen, they've been trying to lower the corporation tax for the past 30 days. Trump cannot get support from his own party to lower it even a little, let alone the democrats. He couldn't even get rid of obamacare.

It's not going to happen, at max he might get it down a little but not enough to impact us. He'll be gone in less than 4 years anyway and US mults know this, they're not going to make strategic decisions based on a lunatics twitter rants.

Even if he does manage to reduce it to 15% would it make that much of a difference to us? We still have a lower rate at 12.5% and a lower rate compared to most EU countries so it would still save US companies on corporation tax to base their EMEA operations here. Not as much as they were saving before but there is still a saving. It could affect 0% tax countries like Bermuda more I reckon. The double Irish was closed off a year or two ago which will make 0% tax countries a little less attractive but now a US country will have the option to pay 12.5% here and an additional 2.5% to bring profits back to the US or pay 12.5% here and move the profits to a 0% tax country and keep them there indefinitely.

For 2.5% I can see a lot of companies bringing it back to the US. It looks good from a PR point of view and means that the new reduced rate sticks around a lot longer and it gives them a lot of cash that they can use for reinvesting/paying dividents/share buybacks/M&A etc. If they were to borrow the money (as Apple has done in the past) instead of repatriating the profits then they'd probably be paying a percent of so on interest any way.

Obviously the above is a simple example that does take into account other tax loopholes but a 15% US corporate tax rate might not be bad for us. It may reduce the amount of FDI coming to Ireland as new companies are less likely to move here because the tax savings aren't as great as they were before but I can't see existing companies moving from here.

jimmycrackcorm

AlmightyCushion wrote:

Obviously the above is a simple example that does take into account other tax loopholes but a 15% US corporate tax rate might not be bad for us. It may reduce the amount of FDI coming to Ireland as new companies are less likely to move here because the tax savings aren't as great as they were before but I can't see existing companies moving from here.

We would still have a slightly lower tax rate so aren't completely losing our advantage. But a significant part of U.S. FDI revolves around those countries running their EMEA operations here which means the working day is better suited than in the U.S.

I don't see that changing.

Theboinkmaster

AlmightyCushion wrote: »

Even if he does manage to reduce it to 15% would it make that much of a difference to us? We still have a lower rate at 12.5% and a lower rate compared to most EU countries so it would still save US companies on corporation tax to base their EMEA operations here. Not as much as they were saving before but there is still a saving. It could affect 0% tax countries like Bermuda more I reckon. The double Irish was closed off a year or two ago which will make 0% tax countries a little less attractive but now a US country will have the option to pay 12.5% here and an additional 2.5% to bring profits back to the US or pay 12.5% here and move the profits to a 0% tax country and keep them there indefinitely.

For 2.5% I can see a lot of companies bringing it back to the US. It looks good from a PR point of view and means that the new reduced rate sticks around a lot longer and it gives them a lot of cash that they can use for reinvesting/paying dividents/share buybacks/M&A etc. If they were to borrow the money (as Apple has done in the past) instead of repatriating the profits then they'd probably be paying a percent of so on interest any way.

Obviously the above is a simple example that does take into account other tax loopholes but a 15% US corporate tax rate might not be bad for us. It may reduce the amount of FDI coming to Ireland as new companies are less likely to move here because the tax savings aren't as great as they were before but I can't see existing companies moving from here.

The 15% just is not going to happen, it was explode their deficit - there's no support for it.

Samuel T. Cogley

turbot wrote: »

Why a crash isn't likely just yet:

- With substantial net immigration these last few years (population has increased by hundreds of thousands), supply can't cope with demand.
- The number of developments in the pipeline is moderate relative to the cumulative demand for properties.

Why a boom is constrained:

- Many people who were successful and arguably, smart, ended up with negative equity they are still dealing with. They are not going to be able to purchase multiple investment properties and rules in this space limit that too.

Major risk factors for a crash:

- Brexit, especially a hard Brexit, could trigger a recession for Ireland (due to reduced exports to the UK driven by either changes in trading policy and/or delinked sterling and/or UK recession).
- Within 5 years, many service sector jobs will start to be affected by automation much more.
- Trumps policies may see companies reducing investment in Ireland
- Various industries are in decline / becoming less viable (media / advertising) and the sheer comforts of the last boom may mean people struggle to adapt to value creation in the future.

So in the near term (12 to 18 months) a crash seems unlikely.
In the mid term (24 to 60 months) Brexit, AI / automation, Trumps policies and related trade effects, may limit prosperity for ordinary citizens. This may lead to a crash and/or may reduce purchasing power for normal people.

Why are perfectly sensible posts always ruined by people thinking we'll be in self-driving cars and dealing with robots in coffee shops, retailers and call centres.