Will house prices ever stop growing?

The_Conductor

Guys- you have all already been requested to move political discussion to another venue.
This is your last, and final warning- no more politics- and no more requests or warning from Moderators- we will take stricter action on any posts/posters who fail to comply with this request.

Bob24

OwlsZat wrote: »

You can't answer when house prises will stop rising until you analyse the series of reasons they have risen to where they are.

Sure but how does something like this help in any way:

maninasia wrote: »

Cowen was taking long holidays during the financial crisis and had too much fondness for the black stuff. I remember thinking it was madness at the time. He was completely at sea with no hands at the wheel.

Most of the past few posts have been rants about past politicians and governements. I agree with some of what has been said btw, but a lot of it is just complaining about the past with no connection to the present or future or property prices and belongs to another forum (Politics Cafe or the likes).

houlihand

doesnt look like it

lydialaois

I live in Wexford and prices are growing too, specially in rent . Very dissapointed.

kujaultima

There's plenty of space in Ireland, the main problem is that public transport and road planning has been grossly insufficient. Combine that with a slow reaction to build new housing stock, and you have the perfect storm that everyone is experiencing.
Housing prices fluctuate in cycles. If you can't afford to lose money, I wouldn't be buying now. You should be reducing your costs as much as possible, and waiting until the next downturn.

LirW

Implying the banks will lend in a downturn to people on average salaries with the minimum deposit amount. I see people complaining that they didn't buy in 2011, but there was no money you could borrow.

Bob24

LirW wrote: »

Implying the banks will lend in a downturn to people on average salaries with the minimum deposit amount. I see people complaining that they didn't buy in 2011, but there was no money you could borrow.

If you had a steady job and decent deposit/income, they would lend (I stupidly didn't buy because for personal reasons I was not sure I would stay in Ireland, but getting a mortgage using my savings of the past 5 years as a deposit was no problem at the time). Hence the advice to save during the good times so that you have something to show the bank when bad times come. But yes of course during a downturn a number of people are likely to have issues on the steady job / income side of the equation.

kujaultima

LirW wrote: »

Implying the banks will lend in a downturn to people on average salaries with the minimum deposit amount. I see people complaining that they didn't buy in 2011, but there was no money you could borrow.

that's true, but even if you bought in 2013 you'd be sitting pretty now in hindsight. it's unlikely you'll be able to either pick or buy at the bottom, but with 1-2 years of history you can identify the trend. just like right now, there primary indications are that the prices will still continue rising for a couple of years. but, the recent growth is definitely unsustainable and likely to hit a ceiling soon.

Bob24

kujaultima wrote: »

You should be reducing your costs as much as possible, and waiting until the next downturn.

The thing is no-one knows if that downturn will come in 2, 5, 10, or 15 years.

So it's possibly good advice for someone who just graduated from college. But not sure about someone who is in their mid 30s and has been saving for a deposit for a while: they might not have enough time to wait for that downturn and in the meantime prices are increasing.

I would't personally make recommendations to people I know on whether to buy now, as I would be too afraid my advice turns out to be a very bad one in the long run.

LirW

Sometimes people don't get to choose when they can buy. Some people have to because of their living situations. Nobody a few years back expected the rental and residental market would skyrocket so fast.

Cuddlesworth

As long as the CB keeps the lending limits(and polices them), Dublin property prices have to either stabilise or drop because in reality FTB's will simply be priced out of the market. Like every good pyramid scheme, the property market has to be fuelled by a increasing number of new entrants.

London/Australia have been fuelled heavily by migration and matching wage increases. Dublin currently is not.

LiamoSail

Cuddlesworth wrote: »

As long as the CB keeps the lending limits(and polices them), Dublin property prices have to either stabilise or drop because in reality FTB's will simply be priced out of the market. Like every good pyramid scheme, the property market has to be fuelled by a increasing number of new entrants.

London/Australia have been fuelled heavily by migration and matching wage increases. Dublin currently is not.

Surely that would limit growth of the upper end of the market, in turn fueling growth at the lower end.mthe couple that would previously have bought in Donnybrook instead looking towards Dolphins Barn etc.

I don't see how, other than with a dramatic increase in supply, Dublin prices can fall in the short to medium term, particularly given interest rates are unlikely to rise significantly in that period

jamesthepeach

If the second hand market isn't there then no-one going to trade up as no-one to buy their houses. Therefore they just stay out and the only market is new houses. Vicious circle.

Bring second hand homes.back into the market and you will see more supply, and moderation of prices. As it is the builders get all the extra money pumped into the market.

frefrefre

I don't think prices will fall in urban areas in the short to medium term for a number of reasons.
Firstly, the lack of supply seems to be a real issue in the areas in demand and although construction is definitely ramping up, who knows how long it will take to at least partially satisfy some of the pent up demand. 
We habe a booming economy, latest figures are projecting 4% growth next yeay which deosn't lend itself to a falling market. We're only hearing upside from Brexit currently with a lot of financial positions moving here, there will have to be losses in other areas though but our media don't seem to want to discuss this.
Lastly, as a naton we like high prices, it makes us feel rich, primitive view really but there you go. Once you're on the pigs back, people se nothng wrong with ever increasing prices regardless of what it means for the wider economy and society. It's why I think FG will have the middle class areas of our cities sewn up for a generation, they delivered a house price 'recovery' and you  can see the confidence this has produced in the average property owning Irish person. Look at the car loans for proof!
I'd be all ears if someone could put a coherent post together about why prices will even stabilise but i reckon 10-15% rises in Dublin for the next 3 years which will be greatly cheered on by our establishment.

Henbabani

frefrefre wrote: »

I don't think prices will fall in urban areas in the short to medium term for a number of reasons.
Firstly, the lack of supply seems to be a real issue in the areas in demand and although construction is definitely ramping up, who knows how long it will take to at least partially satisfy some of the pent up demand. 
We habe a booming economy, latest figures are projecting 4% growth next yeay which deosn't lend itself to a falling market. We're only hearing upside from Brexit currently with a lot of financial positions moving here, there will have to be losses in other areas though but our media don't seem to want to discuss this.
Lastly, as a naton we like high prices, it makes us feel rich, primitive view really but there you go. Once you're on the pigs back, people se nothng wrong with ever increasing prices regardless of what it means for the wider economy and society. It's why I think FG will have the middle class areas of our cities sewn up for a generation, they delivered a house price 'recovery' and you  can see the confidence this has produced in the average property owning Irish person. Look at the car loans for proof!
I'd be all ears if someone could put a coherent post together about why prices will even stabilise but i reckon 10-15% rises in Dublin for the next 3 years which will be greatly cheered on by our establishment.

i think they going to rise up in the next 3 years together no more than 10-15%, people are going to sell when were going to be close to 2007 prices because they know it's a psychological limit and better to sell before that limit but close as much as they can.

Bob24

Henbabani wrote: »

i think they going to rise up in the next 3 years together no more than 10-15%, people are going to sell when were going to be close to 2007 prices because they know it's a psychological limit and better to sell before that limit but close as much as they can.

That's an interesting point which makes sense to me. But having said that I am not sure it will turn out that way.

One the one hand, yes definitely there is that fairly stupid idea promoted in the media that 2007 price are somehow a target to reach (for example through current prices always being measured as a percentage of peak prices). So when we reach that 100% figure people will think this is it, we have recovered (or the more cautious ones will think it reminds them of the previous bubble).

But on the other hand *assuming* people are able to borrow enough to push prices higher, is that psychological threshold really going to stop them?
If I look around the area I live it, the rental situation is much worse that in 2007 and rents are easily 50% higher than the previous peak (I can't help using it as a reference either :-)). Unless the situation eases significantly, this will probably encourage people to buy at even higher prices than 2007 if they can, just to escape the rental market.

Viscount Aggro

The way to get housing stock moving is, raise the LPT percentage. Is it currently 0.18% of a property value?
Make it 0.50% and revalue properties too. Theres plenty of older folks that will have to sell, asset rich and cash poor.

4ensic15

LirW wrote: »

Sometimes people don't get to choose when they can buy. Some people have to because of their living situations. Nobody a few years back expected the rental and residental market would skyrocket so fast.

http://www.boards.ie/vbulletin/showthread.php?p=79006148

Some people certainly expected the rental market to rocket. More didn't agree!
This is typical of the crash mindset "Nobody expected..." The signs were there to be seen but people were convinced that the emporor had no clothes.

Bob24

Viscount Aggro wrote: »

The way to get housing stock moving is, raise the LPT percentage. Is it currently 0.18% of a property value?
Make it 0.50% and revalue properties too. Theres plenty of older folks that will have to sell, asset rich and cash poor.

Agreed. But if you don't want to trigger a popular revolt you have to explain it very well and do it gradually in a way that stabilises prices rather making them fall.

Henbabani

Bob24 wrote: »

Henbabani wrote: »

i think they going to rise up in the next 3 years together no more than 10-15%, people are going to sell when were going to be close to 2007 prices because they know it's a psychological limit and better to sell before that limit but close as much as they can.

That's an interesting point which makes sense to me. But having said that I am not sure it will turn out that way.

One the one hand, yes definitely there is that fairly stupid idea promoted in the media that 2007 price are somehow a target to reach (for example through current prices always being measured as a percentage of peak prices). So when we reach that 100% figure people will think this is it, we have recovered (or the more cautious ones will think it reminds them of the previous bubble).

But on the other hand *assuming* people are able to borrow enough to push prices higher, is that psychological threshold really going to stop them?
If I look around the area I live it, the rental situation is much worse that in 2007 and rents are easily 50% higher than the previous peak (I can't help using it as a reference either :-)). Unless the situation eases significantly, this will probably encourage people to buy at even higher prices than 2007 if they can, just to escape the rental market.

agree with you.
about the rental market - i think the prices start to stabilize and even decrease because people doesn't have these amount like 1200-1300 for 1 BDR ap.

http://www.shemazing.net/rent-prices-have-increased-across-ireland-but-decreased-in-dublin/


the one thing that can influence the prices up is if Dublin become the "new London", if we going to see thousands new jobs in the next 1-2 years coming to Dublin, there's gonna be explosion of the prices.

LirW

Nope, Dublin is now a RPZ which means on paper you only can rise rent for 4% annually max. Last daft report has shown numbers declined but the reality is that it's still exorbitant and people queue for viewings. Rents still rise and under the table-payments are more common than ever.

Irish_rat

Arthur Daley wrote: »

Not too long ago - 4/5 years - since people were wondering if prices would ever recover. Living through the last 20 years I really wonder if most people, most public/media comment anyway is operating at the intellectual level of a goldfish.

Similar to the stock market, I will be slowly reducing my exposure over the next few years

Irish_rat

I disagree about demand outstripping supply, a global recession will drive job losses and no jobs equal no money. Thus less demand for houses.

Our housing market relies on the global economy. Were due a slowdown in the next few years

Bob24

LirW wrote: »

Nope, Dublin is now a RPZ which means on paper you only can rise rent for 4% annually max. Last daft report has shown numbers declined but the reality is that it's still exorbitant and people queue for viewings. Rents still rise and under the table-payments are more common than ever.

Yeah I think what's happening with Dublin figures is dodgy. I don't think numbers are being altered, but I am not sure the measurement tool is working in a distorded market for of government interference, and dropping prices is definitely not what I see around me - quite the opposite.

And as you said - I think agents/landlords are starting to get creative with unregulated supplemental payments. A friend of mine got a letter from his letting agent saying a new "management fee of one 100 euros was to be introduced on top of his rent which is in a 2 years freeze and subject to RPZ limits". He refused to pay that since it wasn't in the lease and the agent said it was a mistake and only applied to new tenants in the building (but clear what they were doing is chancing it to see if tenants would pay) ... and surprise, surprise, 2 months later he got his eviction notice for refurbishment of the property.

Zenify

Is it wealthier? any back up statistics?

Bob24

Zenify wrote: »

Is it wealthier? any back up statistics?

I would question it as well. The economy is indeed booming as it was back then. But I don't see the average person being wealthier.

Yourself isit

Zenify wrote: »

Is it wealthier? any back up statistics?

Not in wages it isn't. They stagnated for the last decade.

And of course taxes are higher. For this reason I can't see us getting anywhere near 2007.

The recent panic is entirely produced by Coveney.

frefrefre

Yourself isit wrote: »

Zenify wrote: »

Is it wealthier? any back up statistics?

Not in wages it isn't. They stagnated for the last decade.

And of course taxes are higher. For this reason I can't see us getting anywhere near 2007.

The recent panic is entirely produced by Coveney.

Very true and he knew the FTB grant would have this exact effect, thank goodness he's off to foreign affairs now.

Mongfinder General

When you see three bed ex council houses in Tallaght, Corduff, Clondalkin etc going for €350k that's when we're truly fcuked again.

LiamoSail

Irish_rat wrote: »

I disagree about demand outstripping supply, a global recession will drive job losses and no jobs equal no money. Thus less demand for houses.

Our housing market relies on the global economy. Were due a slowdown in the next few years

Even if you're right, and growth slows over the next few years, prices will still rise in the interim and fall from a higher level than what they are now.

My thinking is that Mortgage lending criteria, the limited supply of housing and the absence of the huge reliance on the construction industry will mitigate a downturn somewhat. I'm not suggesting there won't be a downturn, just that as an economy, we're far better protected than we had previously been