Opinions on when the next property crash may happen

Yourself isit

draiochtanois wrote: »

I'm not suggesting basing anything on anything.

But worldwide you will find a strong correlation between total salaries in an area and property prices - I'd be surprised if any was surprised by this.

Lets look at Ireland / Dublin

Population growing - Yes according to the Census
Unemployment falling - Yes
Employment growing - Yes
Net inward immigration - Yes
Real wages increasing - Yes
Interest rates falling - fixed and variable yes, trackers level
Net migration from rural to urban - Yes
Mortgage repayment < rent for the same property - yes
Supply shortfall
Bank lending increasing - yes

While those factors remain the same there is going to be an upward pressure on pricing.

Except for "supply shortfall" all of that applied in the years up to 2006. Then it didn't.

Also I'm fairly sure wages aren't increasing very much.

Yourself isit

draiochtanois wrote: »

It's not the centre, it's near it, Cupertino, Mountain View, Santa Clara, Palo Alto and San Francisco are to the North of it.

San Jose is the Bray of the Bay Area

It's basically all the same area. It's not like tech stops at San Jose's borders and if you are going to represent silicon valley then San Jose is the city to pick (the others have populations of medium sized towns)

Anongeneric

Cyrus wrote: »

generally people buy a house based on need and if they can afford it (and they should have a min of 20% equity, most people i know buying at the moment are more like 30-50%)

on that basis why would you be mad to buy? surely a better quality of life for you and your family has to factor somewhere or are we all property speculators now?

My point was that if people are making their decision on whether to buy property or not on present economic conditions, they should also consider that we have unprecedented level of (potentially extremely damaging), external risks. Much more so than at any time in recent history, possibly more than at any point in history, (save perhaps WW 2).

I'm in no was looking at it from a speculator's perspective. Solely how it could effect a homeowner buying at what I think are over inflated prices.

People in Ireland both in the press and ordinary Joe you have a pint with on a Friday keep saying that it isn't a boom because we haven't hit 2007/2008 prices, these people have forgotten that plenty of economists were calling house prices over inflated in 2003/2004.

And I fully agree with you about it being better for people to have a secure home and that home ownership traditionally allows for this and gives people a better quality of life.

Cyrus

Wanderer78 wrote: »

It's truly time for us to move on from this dreadful market equilibrium nonsense

to what exactly?

Samuel T. Cogley

draiochtanois wrote: »

This post has been deleted.

The quicker I can get my arse qualified and and out of Dublin the better! I'd love a nice country pad. The wife's not so keen :P

athtrasna

trobbin and draoichtanois take it to pm please.

Mod

draiochtanois

This post has been deleted.

Samuel T. Cogley

Yourself isit wrote: »

Except for "supply shortfall" all of that applied in the years up to 2006. Then it didn't.

Also I'm fairly sure wages aren't increasing very much.

While I defer to more detailed knowledge, the 2006 boom was a credit fuelled farce and a world wide issue - I thought anyway :pac:

N.I.N.J.A's anyone? (Love that film!)

Wanderer78

Cyrus wrote: »

to what exactly?

to models that more closely resemble reality and our actual needs. market equilibrium models are very wishy washy, highly inaccurate and fail to address our actual needs

Cyrus

Wanderer78 wrote: »

to models that more closely resemble reality and our actual needs. market equilibrium models are very wishy washy, highly inaccurate and fail to address our actual needs

which would be??

Wanderer78

Cyrus wrote: »

which would be??

im not actually sure there is an exact model for our own particular housing needs but there are alternative macroeconomic models in use and it is believed theyre more accurate than typical market equilibrium models. the shortage of our housing needs were noted almost 10 years ago now by people such as tom lyons etc. maybe they have the answers you're looking for. maybe tom lyons has his own model or maybe he just spotted it in the data that was available to him at the time. unfortunately the findings of people such as tom lyons has been largely ignored and probably still is to date.

Cyrus

Wanderer78 wrote: »

im not actually sure there is an exact model for our own particular housing needs but there are alternative macroeconomic models in use and it is believed theyre more accurate than typical market equilibrium models. the shortage of our housing needs were noted almost 10 years ago now by people such as tom lyons etc. maybe they have the answers you're looking for. maybe tom lyons has his own model or maybe he just spotted it in the data that was available to him at the time. unfortunately the findings of people such as tom lyons has been largely ignored and probably still is to date.

so you have no idea

Wanderer78

Cyrus wrote: »

so you have no idea

it sounds like you may need to contact somebody like tom lyons for your answers, id be interested to know how he spotted the shortage of housing almost 10 years ago and most were ridiculing him for it as we were dealing with a glut of ghost estates at the time. no i personally dont have your answers but others probably do. we have an over reliance on market equilibrium models, these largely fail on predicting our actual needs, its also interesting that virtually no market equilibrium models have ever predicted booms and busts. david mcwilliams wrote a great piece on this a couple of months ago, sums it up perfectly.

Samuel T. Cogley

Median House prices in Melbourne c.€471K Median 4 bed-semi in Dublin €425K

Interesting given that study on output IMHO.

Cyrus

Wanderer78 wrote: »

it sounds like you may need to contact somebody like tom lyons for your answers, id be interested to know how he spotted the shortage of housing almost 10 years ago and most were ridiculing him for it as we were dealing with a glut of ghost estates at the time. no i personally dont have your answers but others probably do. we have an over reliance on market equilibrium models, these largely fail on predicting our actual needs, its also interesting that virtually no market equilibrium models have ever predicted booms and busts. david mcwilliams wrote a great piece on this a couple of months ago, sums it up perfectly.

im not the one decrying market equilibrium

you are

Theboinkmaster

Graham wrote: »

It's been suggested a few times. I don't recall any official source stating it is an actual policy rather than a side effect of the current market.

They're not going to state it but it's obvious enough from their actions/inaction and policies. They are highly motivated to let prices creep up.

Graham

Theboinkmaster wrote: »

They're not going to state it but it's obvious enough from their actions/inaction and policies. They are highly motivated to let prices creep up.

That would make it a conspiracy theory rather than an actual policy.

Yourself isit

Graham wrote: »

That would make it a conspiracy theory rather than an actual policy.

Elites tend to conspire.

In my case I'm pretty sure we can trace the start of the recent upturn to the month the troika left.

And last year prices stagnated in Dublin (which doesn't gel with the demographics arguments). The solution was a subsidy to buyers which was really a bung to developers. No doubt there will be more such attempts.

Graham

Yourself isit wrote: »

And last year prices stagnated in Dublin (which doesn't gel with the demographics arguments).

It does gel with the lending restrictions though.

ginger_hammer

I think the next 5-10 years will continue with steady increases.

There is a lot of commercial construction in Dublin and all of this office space will have staff who need somewhere to live, along with brexit jobs (financial mostly) will come over bringing more demand. All this while supply largely unchanged leading to prices going up.

As previously said the banks are not lending like mad as previously done.

LirW

The demand with the brexit jobs on the housing market is not going to have a significant impact shortly after the relocation. At least on a private scale. It's most likely going to have more impact on the already pressured rental market here. The average financial Joe is not going to get a mortgage straight after moving, lots of them have families that can't just relocate overnight.
Of course there will be the odd very well paid manager that's going to buy straight away because he can but I highly doubt that guy is going to move to Santry in a 330k house.
The demand will come though after these people settled in and have a perspective of staying on a longer term here. And the government is overdue to address this issue NOW and not in a few years time when the demand is actually going up because of this.

But this are uncooked eggs at the moment because nobody really knows how the Brexit will actually look.

Theboinkmaster

Graham wrote: »

That would make it a conspiracy theory rather than an actual policy.

No, it's just obvious common sense.

Graham

Theboinkmaster wrote: »

No, it's just obvious common sense.

I'm not sure there's anything at all sensible about concluding there's some sort of secret government policy/plot/conspiracy but there you go.

Feel free to correct me when you find actual evidence of an actual government policy.

Villa05

draiochtanois wrote:

This post has been deleted.

This results in people living further and further away from work and building houses in the wrong place. Plus clogging up our creeking transport infrastructure.

ginger_hammer wrote:

As previously said the banks are not lending like mad as previously done.

Banks lending predominantely into one asset class is mad lending.
Also there is significant damage from the last bubble that the banks have not yet cleaned up

LirW

I have a genuine question: What's the deal with all these 4 bedroom houses with an acre of land in the sticks all across the country asking for 300k or more? Is there any particular reason asking for such unrealistic prices, is there an actual demand for them or are people chancing to get the dollars because they hope city people would buy their houses because it's still cheaper?

Samuel T. Cogley

LirW wrote: »

I have a genuine question: What's the deal with all these 4 bedroom houses with an acre of land in the sticks all across the country asking for 300k or more? Is there any particular reason asking for such unrealistic prices, is there an actual demand for them or are people chancing to get the dollars because they hope city people would buy their houses because it's still cheaper?

Some will be next to very desirbale spots. I'd pay a premium to be beside Mount Juliet for example, but not the premium for a house on the grounds! :eek:

Cyrus

LirW wrote: »

I have a genuine question: What's the deal with all these 4 bedroom houses with an acre of land in the sticks all across the country asking for 300k or more? Is there any particular reason asking for such unrealistic prices, is there an actual demand for them or are people chancing to get the dollars because they hope city people would buy their houses because it's still cheaper?

also what would it cost you to buy that acre and build a house on it yourself?

Anongeneric

Samuel T. Cogley wrote: »

Median House prices in Melbourne c.€471K Median 4 bed-semi in Dublin €425K

Interesting given that study on output IMHO.

Median Salary Melbourne 80,000
5 x median salary which is also outside what economists regard as sustainable at 3.5/4 x salary
Median house price in Dublin is 10 x median salary

Also, a number of eceonomists and politicans have said that the Australian housing market is out of control because of Chinese investors

https://en.wikipedia.org/wiki/Median_household_income_in_Australia_and_New_Zealand

pilly

Cyrus wrote:

also what would it cost you to buy that acre and build a house on it yourself?

Very hard to get planning permission, that's why some fetch great money.

Samuel T. Cogley

Anongeneric wrote: »

Median Salary Melbourne 80,000
5 x median salary which is also outside what economists regard as sustainable at 3.5/4 x salary
Median house price in Dublin is 10 x median salary

Also, a number of eceonomists and politicans have said that the Australian housing market is out of control because of Chinese investors

https://en.wikipedia.org/wiki/Median_household_income_in_Australia_and_New_Zealand

Would you mind putting currency in? The figures don't marry up with the link.