Property price bubble - when will prices peak / decline / crash ?

CIARAN_BOYLE

worded wrote: »

A friend is thinking of buying and I'm wondering has anyone a crystal ball?

Are of interest is the commuter belt of the city, popular I know ...

Outside chance of a general economic crash due to Brexit in 2018/2019 leading to a fall in asset values.

mloc123

The Mulk wrote: »

I went to sell in my house, 3-bed semi in Celbridge in 07. Went sale agreed at 380k.Decided it against it at the time, but sold it in August '16 for 300k.
Neighbours house went sale agreed Aug '17 for 320K, so currently approx 85% of peak in that area(If my maths are correct).

:eek: I did not realise they went that high in 07... what estate was that, one of the newer ones?

The Mulk

mloc123 wrote: »

:eek: I did not realise they went that high in 07... what estate was that, one of the newer ones?

Yeah Oldtown Mill, standard 3-bed semi, bought off the plans end of '03 for 295k.
Moved to an old house (70's build) over on Hazelhatch side last year, so busy modernising that at the moment
Actually just noticed another neighbours house has gone up at 315K, interesting to see what it gets.!

.......

This post has been deleted.

mloc123

....... wrote: »

This post has been deleted.

This is something I never understand about people buying new builds, the houses are nice and walk in ready... but you never know how the area will mature. It is a gamble I guess. Personally I prefer something that is at least 10-15 years old, at that stage it has settled.

.......

This post has been deleted.

Colonel Claptrap

A similar point is made about buying a brand new car.
But if nobody bought brand new cars, there would be no second hand car market.

Some people are weirded out by a second hand house. I've heard people say - what if somebody died in it?

So what, if you ask me.

Cyrus

mloc123 wrote: »

This is something I never understand about people buying new builds, the houses are nice and walk in ready... but you never know how the area will mature. It is a gamble I guess. Personally I prefer something that is at least 10-15 years old, at that stage it has settled.

what about a new build in a mature area?

0gac3yjefb5sv7

Is there any value in the areas say 1 hour from Dublin or less that has a decent rail link?

Kildare etc.

Mickiemcfist

Pheonix10 wrote: »

Is there any value in the areas say 1 hour from Dublin or less that has a decent rail link?

Kildare etc.

Arklow is very cheap and is a quick drive to south dublin, wouldn't live there myself though.

q85dw7osi4lebg

Pheonix10 wrote: »

Is there any value in the areas say 1 hour from Dublin or less that has a decent rail link?

Kildare etc.

Just bought a new 4 bed semi for €275,000 in Mornington, Meath. 7 mins from both Drogheda and Laytown stations.

I work in the city centre, takes me 45 mins but I don't have to sit in the usual traffic due to flexible hours.

I'm from the area so I'm well used to the commute.

dbagman

Pheonix10 wrote:

Is there any value in the areas say 1 hour from Dublin or less that has a decent rail link?

Dublin 15 is great value. Bought a 4 bed semi last year for 278k. Same houses are going for 310 320 now but still great value for a 4 bed in Dublin with good train and bus routes. Blanc shopping centre on my doorstep. A nice 3 bed semi is about 280k now in clonee.

davo10

When will bubble burst? When cash buyers run out of cash.

60% of property sales are cash sales, that's mind blowing.

https://www.irishtimes.com/business/economy/central-bank-singles-out-cash-buyers-as-key-driver-of-house-prices-1.3214180?mode=amp

sk8board

davo10 wrote: »

When will bubble burst? When cash buyers run out of cash.

60% of property sales are cash sales, that's mind blowing.

https://www.irishtimes.com/business/economy/central-bank-singles-out-cash-buyers-as-key-driver-of-house-prices-1.3214180?mode=amp

its reflected in the deposit rates the central banks tracks too.

regarding the point raised earlier on the 7-year CGT exemption, its important to stress that it applied to property purchased in 2013 and 2014 (it ended in budget 2014, but only disappeared in Jan '15), and therefore won't affect any pre-existing accidental landlords.
I have a place purchased and rented for the high yield %, however the exemption would push me to hold it for 7 years no matter what and pocket a large sum tax free.
As a tax exemption it was far too generous and implemented far too late, meaning people sick off 0.5% deposit interest bought a house and have tax-free gains.

Ray Palmer

I think people overuse the peak and so do the media. So at one point I bought a property for €300k and I thought it was undervalued by about €40k due to the decoration mostly. A few months later very similar (no garage, terrace) house sells for €360k but more modern decoration. Then the market keeps going and there are lots of people selling up so about 25 houses sell over the next 5 years.

Then there is nobody selling in the area prices keep going up and in 2007 a house comes up for €585k. The peak price and it sells. Then the crash and people are going on about the negative equity and the peak prices EVERYONE paid. That isn't the truth only one person paid the peak price majority paid an average of €400k. Houses now selling around €400k with fluctuations for presentation and extensions etc...

So what does the peak really mean to the people who bought really? Prices did drop down to €300k but again only one went on the market and sold like that while nothing else came onto the market. Now people are selling again. This is supply and demand in action.

Sad Professor

davo10 wrote: »

When will bubble burst? When cash buyers run out of cash.

60% of property sales are cash sales, that's mind blowing.

https://www.irishtimes.com/business/economy/central-bank-singles-out-cash-buyers-as-key-driver-of-house-prices-1.3214180?mode=amp

If they run out of cash. How many of these cash buyers are foreign or institutional investors?

riclad

The goverment said they might build 5000 houses for people on low income in the next year,
this will have little effect on house prices in dublin.
The prices might stop rising soon but i dont expect any fall in prices in the next 5 years in dublin.
I would hope the central bank are watching bank lending closely in order to prevent another banking crisis as in 2008.

BigAl81

Bought a house yesterday so hopefully not any time soon ;o)

davo10

riclad wrote: »

The goverment said they might build 5000 houses for people on low income in the next year,
this will have little effect on house prices in dublin.
The prices might stop rising soon but i dont expect any fall in prices in the next 5 years in dublin.
I would hope the central bank are watching bank lending closely in order to prevent another banking crisis as in 2008.

That is what makes this price surge different, it is not based of credit as 60% of purchases are cash, and there is little supply so prices will not drop any time soon.

jamesthepeach

Was starting at stag last night.
One of the attendees was one of our new breed of rockstar economists. The homeless crises came up and he started pontificating.
Anyway before I lost interest and went back to the jar, he said that we are headed for a big property crash. He reckons we are now going to build far too many houses and when supply will go the other direction, because once the numbers ramp up we will overshoot by a mile before people realize, or it becomes politically feasible to stop building.
He said he would never say this in public though at the moment for fear of backlash.
Said the bleeding hearts have taken over the world and everyone has to watch what they say or the Twitter rage will be swift.
He made some sense, but it was a stag and had to stop. It be interested to listen to him when we were all sober.

Wanderer78

jamesthepeach wrote:

Was starting at stag last night. One of the attendees was one of our new breed of rockstar economists. The homeless crises came up and he started pontificating. Anyway before I lost interest and went back to the jar, he said that we are headed for a big property crash. He reckons we are now going to build far too many houses and when supply will go the other direction, because once the numbers ramp up we will overshoot by a mile before people realize, or it becomes politically feasible to stop building. He said he would never say this in public though at the moment for fear of backlash. Said the bleeding hearts have taken over the world and everyone has to watch what they say or the Twitter rage will be swift. He made some sense, but it was a stag and had to stop. It be interested to listen to him when we were all sober.

He sounds pretty ignorant to be honest, 8000 homeless is bleeding hearts territory!

Well... over supply would be a problem... but it's hard to worry about building too much when we haven't actually begun building again.

And whilst over supply could lead to devalue of property, people have not over borrowed this time around so the same level of financial ruin shouldn't exist.

You're going to have to give a hint who this economist was!

jamesthepeach

Wanderer78 wrote: »

He sounds pretty ignorant to be honest, 8000 homeless is bleeding hearts territory!

Hes an economist.
Ive met him before. Very up himself, but people love to quote him

Wanderer78

jamesthepeach wrote:

Hes an economist. Ive met him before. Very up himself, but people love to quote him

Jasus, you have us all wondering now, he maybe right in ways, but we all know our current situation isn't normal, it's a total calamity

Zulu

jamesthepeach wrote: »

Was starting at stag last night.
One of the attendees was one of our new breed of rockstar economists.
... he said that we are headed for a big property crash. He reckons we are now going to build far too many houses and when supply will go the other direction, because once the numbers ramp up we will overshoot by a mile before people realize, or it becomes politically feasible to stop building.

So in brief he's calling the crash now, prior to supply ramping up, on the basis that when supply does actually ramp up, it will build a momentum that will ultimately cause it to overshoot, and that will cause the bust. In other words he's calling a bubble now, before a bubble forms? Or is he saying we are now oversupplied and in a bubble?

Sounds off to me, but I'm no economist. And shouldn't credit be a lever in this? With 20% deposits and 3.5 (x salaries cap), does that not act as a break to any run away train?

Granted everyone was drinking and people are entitled to a day off once in a while, but he sounds more Milli Vanilli than Led Zepplin...

jamesthepeach

Zulu wrote: »

So in brief he's calling the crash now, prior to supply ramping up, on the basis that when supply does actually ramp up, it will build a momentum that will ultimately cause it to overshoot, and that will cause the bust. In other words he's calling a bubble now, before a bubble forms? Or is he saying we are now oversupplied and in a bubble?

Sounds off to me, but I'm no economist. And shouldn't credit be a lever in this? With 20% deposits and 3.5 (x salaries cap), does that not act as a break to any run away train?

Granted everyone was drinking and people are entitled to a day off once in a while, but he sounds more Milli Vanilli than Led Zepplin...

yeah, he was basically saying that anyone buying now better be happy to stay because these things turn in a matter of months.
He said he wont be buying now anyway.
He did call the crash years ago, but anyone who called it, gets called a genius even if they hadnt a clue really and were just guessing - restrospect.

Funny though. I googled him this morning and hes not nailing his colours to the mast in public. Just when hes locked

Bob24

jamesthepeach wrote: »

yeah, he was basically saying that anyone buying now better be happy to stay because these things turn in a matter of months.

This is true, but having said that because the situation can turn in a matter of a few months doesn't mean we are anywhere close to reaching that point. It could also take several years for supply to catch-up before this happens.

Saying that governement policies aimed at increasing supply are likely to exhibit some inertia once the issue is fixed and cause oversupply is all well and good, everyone can agree with that. But if he's calling for this to happen in the short term on the Irish property market it would take a bit more of a detailed analysis to back-up that statement.

Zulu

Are we not all in agreement that supply, presently, is massively strangled?
Was he disputing this? or suggesting that supply could ramp up, overshoot, and bubble burst "in a few months"?

I'd have thunk that while a bubble will burst in a few months, it'll take years for supply to ramp up to a level that matches demand (from where we presently are) - never mind overshooting it?!?

dbagman

BigAl81 wrote:

Bought a house yesterday so hopefully not any time soon ;o)

Congrats

SunSeeker101

I went to an open viewing yesterday of a property which was on view for the first time. Got a bit of a surprise to see that only 1 other person turned up. May be we are turning a corner!