Property Market 2020

hometruths

MrMusician18 wrote: »

I've seen some astonishing posting in my time but are you really suggesting people should take on debt now because they can get it and they might lose their jobs later? That is completely wreckless, how are they meant to afford repayment in such a situation?

Whatever about waiting on price falls, you absolutely should wait if they're is a clearly foreseeable threat to your employment.

Madness.

Unfortunately I fear this is quite a commonly held belief.

hometruths

GreeBo wrote: »

Whereas if you wait and buy in 6 months, then when you lose your job everything is still gravy because the house was maybe 50K cheaper?

Your argument applies to both cases equally but the crux of it is that people need to be willing to "take responsibility, sell the house".
I dont see why this changes based on the house being in negative equity or not. Thats the banks problem when you hand them the keys.

My point was in Ireland people rarely hand bank the keys and think it's the banks problem.

They tend to keep on to the keys, and complain about how unfair it is that they are unable to afford the mortgage on a property that is worth less than they paid for it.

SozBbz

schmittel wrote: »

My point was in Ireland people rarely hand bank the keys and think it's the banks problem.

They tend to keep on to the keys, and complain about how unfair it is that they are unable to afford the mortgage on a property that is worth less than they paid for it.

True, repossessions are extremely rare in Ireland.

Actually I think what a bigger probelm is people who can afford their mortgages, but decide they don't want to pay for it any more due to negative equity.

Personally I'd welcome the model where you can just post they keys to the bank as its actively disincentives banks from lending recklessly but that has to be paired with the ability to repossess in a reasonable timeframe without incurring disproportionate legal costs.

Anyway, thats not the situation in Ireland and with so many SF TDs in our next dial, I don't see it changing.

Padre_Pio

schmittel wrote: »

Unfortunately I fear this is quite a commonly held belief.

Why? If I stop paying my mortgage, there's sweet FA the bank can do, especially for the next 6 months.

Ireland is completely backwards when it comes to repossessions.

Empty_Space

Bass Reeves wrote: »

People who wish for a hard recession are usually the last to benefit. If we see a really hard recession government will print money, this in turn will cause inflation which will causes prices to rise in the medium to longer term. In a hard recession borrowing becomes impossible unless you have substantial deposit in the 50% area, as well cash purchasers are preferable.

Building costs are still an issue no matter what. The bigger fear by contractors is failure of payment. In the 2010-2014 period no construction took place unless all materials were paid for up front. There was no credit.

I think the biggest risk to house prices is the government may decide to build a substantial number of houses especially in Dublin. However that would have a 12-18 month lead in time

We are not heading for a recession, we are heading to a depression.

And you are dead wrong about inflation. We are heading into a deflationary period where the value of all assets will fall. How long this period will last is debatable, but probably a few years.
Then we will most likely see inflation, once the depression period is over.

Governments have been trying to keep inflation rising for years but with interest rates as low as they can go they are running out of room, the debt bubble is about to pop.
The amount of money they would need to print to keep inflation positive is now impossible.

Empty_Space

Hubertj wrote: »

Unfortunately some people do. 1 of the clowns in here stated the other day recessions are necessary and welcome. Yes job losses and economic hardship are welcome and necessary....

Of course recessions are necessary. Nothing can go up indefinitely, thats called a bubble that has to pop.

And you have the ignorance to call someone making sense a clown.

GreeBo

schmittel wrote: »

Unfortunately I fear this is quite a commonly held belief.

Who holds this belief?!
I havent seen it come up once on this thread.
I certainly didnt mention it. (and in fact have said the opposite several times)

Hoffmans

Some crazy prices still being sought for property,
Uk is already down 10%

GreeBo

schmittel wrote: »

My point was in Ireland people rarely hand bank the keys and think it's the banks problem.

They tend to keep on to the keys, and complain about how unfair it is that they are unable to afford the mortgage on a property that is worth less than they paid for it.

I dont disagree, but that attitude is the same irrespective of the house being worth more or less than they paid for it.
i.e. negative equity doesnt comes into it

So, if you can happily afford to buy a house now and have found the house of your dream (for at least the medium term) then buy it.

How many people have saved real money by waiting and not buying (when including rent) compared to how many people have lost out and ended up spending far more, in the history of Ireland?

I'm pretty sure I know which group is bigger.

SozBbz

Empty_Space wrote: »

We are not heading for a recession, we are heading to a depression.

And you are dead wrong about inflation. We are heading into a deflationary period where the value of all assets will fall. How long this period will last is debatable, but probably a few years.
Then we will most likely see inflation, once the depression period is over.

Governments have been trying to keep inflation rising for years but with interest rates as low as they can go they are running out of room, the debt bubble is about to pop.
The amount of money they would need to keep inflation is now impossible.

How can you say someone is dead wrong? All of the above is just your opinion, just one possible scenario, and not in my opinion the most likely.

Every major government has said they will implement economic stimulus , so talk of inflation is not without merit. In that scenario, if you bought your asset last year and inflation increases, but you've a fixed mortgage repayment, then the cost of servicing that loan in real terms just got cheaper.

Snow Garden

BoI boss signals further payment break extension beyond six months unlikely

The chief executive of Bank of Ireland has said she does not currently see repayment breaks for borrowers who are struggling financially because of the Covid-19 crisis being extended beyond the six months agreed by the main banks here.

The bank has set aside €250m as an impairment charge to deal with the fallout from Covid-19.

https://www.rte.ie/news/business/2020/0511/1137638-bank-of-ireland-ims/

Empty_Space

SozBbz wrote: »

How can you say someone is dead wrong? All of the above is just your opinion, just one possible scenario, and not in my opinion the most likely.

Every major government has said they will implement economic stimulus , so talk of inflation is not without merit. In that scenario, if you bought your asset last year and inflation increases, but you've a fixed mortgage repayment, then the cost of servicing that loan in real terms just got cheaper.

True, but the world has been implementing inflation at massive rates since the last crash. People are just oblivious to the fact. It hasnt only reflected in currency, but also the stock market and housing. That race is run now.

Once things start to come back we will be into a deflationary period and your mortgage repayments will be actually higher while the cost of the home will decrease.
Anyone purchasing a home right now is facing a double hit and is downright mad. Most who do will walk away.

LuasSimon

Empty_Space wrote: »

Of course recessions are necessary. Nothing can go up indefinitely, thats called a bubble that has to pop.

And you have the ignorance to call someone making sense a clown.

Recessions are necessary for the Likes of Larry Goodman to be able to buy whatever he doesn't already own at a knockdown price and make him even richer plus he can demand more of his employees on minimum wage

Empty_Space

LuasSimon wrote: »

Recessions are necessary for the Likes of Larry Goodman to be able to buy whatever he doesn't already own at a knockdown price and make him even richer plus he can demand more of his employees on minimum wage

Yes, a fair point. At the end of each recession the rich get richer and the middle class get poorer.

Not fair, but this is the rigged and disgusting economic system we exist in and its coming.

Bass Reeves

Empty_Space wrote: »

We are not heading for a recession, we are heading to a depression.

And you are dead wrong about inflation. We are heading into a deflationary period where the value of all assets will fall. How long this period will last is debatable, but probably a few years.
Then we will most likely see inflation, once the depression period is over.

Governments have been trying to keep inflation rising for years but with interest rates as low as they can go they are running out of room, the debt bubble is about to pop.
The amount of money they would need to print to keep inflation positive is now impossible.

In general there are a few reasons that inflation has been kept under control. If we had not kept it under control in general it would have been China that benefited. When economies were under pressure the ECB as part of a bond buying package attached austerity to the package. This was necessary in those senario's.

However at present the financial crisis is different austerity would only exasperate it. If the choice is between inflation and high deflation, then inflation is the best choice. Inflation with low deposit rates will encourage those with large savings to spend them.

Government will be inclined to spend there way out of this crisis rather than shrink the economy further. It will pump money into small businesses, reduce rates, stabilize bank funding. This is not an PIGS only problem all economies are in it together.

The Germans fear is that Italy in particular will not carry out necessary reforms. However if the choice is between pumping all economic activity living with the Italy issue for 6-10 years then that is the choice that will be made.

The biggest risk to Dublin house prices is a government buildings program like the 1930/40's

Hubertj

Empty_Space wrote: »

Of course recessions are necessary. Nothing can go up indefinitely, thats called a bubble that has to pop.

And you have the ignorance to call someone making sense a clown.

so its welcome and necessary for people to lose their businesses, jobs and their homes? nice work princess, you're on fire today.

hometruths

GreeBo wrote: »

Who holds this belief?!
I havent seen it come up once on this thread.
I certainly didnt mention it. (and in fact have said the opposite several times)

I am pretty sure it has come up fairly regularly in this thread.

Both as a general reason that demand and thus prices will remain high -

i.e demand will be high because a lot of people will buy now because they know they will not be able to get as big a or any mortgage in the future.

and also as a comment on individual cases.

i.e a person in shaky job situation should buy now because they will not get a mortgage in the future.

wassie

Empty_Space wrote: »

True, but the world has been implementing inflation at massive rates since the last crash. People are just oblivious to the fact. It hasnt only reflected in currency, but also the stock market and housing. That race is run now.

Once things start to come back we will be into a deflationary period and your mortgage repayments will be actually higher while the cost of the home will decrease. Anyone purchasing a home right now is facing a double hit and is downright mad. Most who do will walk away.

What massive inflation? The way I see it prices of assets (stocks, houses etc) are the result of years of ultra-low interest rates combined with availability of credit, not inflation. In fact, the cost of many non-asset purchases have come down in price in relative terms.

cnocbui

Empty_Space wrote: »

True, but the world has been implementing inflation at massive rates since the last crash. People are just oblivious to the fact. It hasnt only reflected in currency, but also the stock market and housing. That race is run now.

Once things start to come back we will be into a deflationary period and your mortgage repayments will be actually higher while the cost of the home will decrease.
Anyone purchasing a home right now is facing a double hit and is downright mad. Most who do will walk away.

No, there has been next to no inflation for the past decade. Central banks have been attempting to bring about 2% or so inflation over that period, but have failed spectacularly.

If they want inflation, stop making the rich, richer and make the poor richer. The poor spend, the rich invest. If central banks engaged in helicopter money instead of the stupidity of providing free finance to corporations, they would achieve their objectives.

Empty_Space

Bass Reeves wrote: »

In general there are a few reasons that inflation has been kept under control. If we had not kept it under control in general it would have been China that benefited. When economies were under pressure the ECB as part of a bond buying package attached austerity to the package. This was necessary in those senario's.

However at present the financial crisis is different austerity would only exasperate it. If the choice is between inflation and high deflation, then inflation is the best choice. Inflation with low deposit rates will encourage those with large savings to spend them.

Government will be inclined to spend there way out of this crisis rather than shrink the economy further. It will pump money into small businesses, reduce rates, stabilize bank funding. This is not an PIGS only problem all economies are in it together.

The Germans dear is that Italy in particular will not carry out necessary reforms. However if the choice is between pumping all economic activity living with the Italy issue for 6-10 years then that is the choice that will be made.

The biggest risk to Dublin house prices is a government buildings program like the 1930/40's

Of course inflation is better, kick the can down the road a little further.

But, a point comes when no matter how much money is printed, inflation can not be triggered. The point of no return. We have already hit that point, the virus has slightly accelerated the process.

Look at the US, no matter how much the fed printer they are struggling to increase rates.

Empty_Space

Hubertj wrote: »

so its welcome and necessary for people to lose their businesses, jobs and their homes? nice work princess, you're on fire today.

Its necessary for a healthy economy have ups and downs. Its when governments meddle to try and create constant growth that there is issues with big crashes.

No need to resort to calling me names, sir.

Empty_Space

cnocbui wrote: »

No, there has been next to no inflation for the past decade. Central banks have been attempting to bring about 2% or so inflation over that period, but have failed spectacularly.

If they want inflation, stop making the rich, richer and make the poor richer. The poor spend, the rich invest. If central banks engaged in helicopter money instead of the stupidity of providing free finance to corporations, they would achieve their objectives.

Exactly, they are hitting a point at no matter what they print, they cant stimulate inflation.

We are now heading into deflation and the virus has only amplified how massive effects will be.

By the way I completely agree on the rich. Policies driving inequality is the root of our problems.

cnocbui

Empty_Space wrote: »

Exactly, they are hitting a point at no matter what they print, they cant stimulate inflation.

We are now heading into deflation and the virus has only amplified how massive effects will be.

By the way I completely agree on the rich. Policies driving inequality is the root of our problems.

Again, no. You still seem to think they succeeded in causing inflation - they did not. They didn't reach a point where their misguided policies started to fail, they never worked from the get go.

Empty_Space

cnocbui wrote: »

Again, no. You still seem to think they succeeded in causing inflation - they did not. They didn't reach a point where their misguided policies started to fail, they never worked from the get go.

Inflation in US in 2019 was 1.81.
They are succeeding in keeping deflation at bay and inflation positive for years.

Why do you think the stock market has bounced back so quickly, inflation via mass money printing. But its one thing to prop up the stock market, this has no reflection to the real economy.

cnocbui

Shares in Ireland’s two biggest lenders slumped, as Bank of Ireland Group Plc laid out the impact of the coronavirus outbreak on its business.

Bank of Ireland plunged 15% in Dublin on Monday, while AIB Group Plc fell 14%. The two are the worst performers on the Bloomberg Europe Banks and Financial Services Index, which fell 2.1%.

”We had expected other business income to decline by high single digits for 2020, so the guidance of a 30% to 40% drop is shocking,” Daragh Quinn, an analyst at Keefe, Bruyette & Woods, said by email. “It also adds focus to AIB tomorrow.”

Jesus. I wish Rabo bank hadn't left. I don't feel safe having a positive balance with these clowns.

Villa05

Today with Sarah mcenry (taking over from Sean o rourke) were discussing a WFH survey
7300 participants
83% would like to continue with wfh
Over 60 % said productivity remained the same or improved

Empty_Space

Villa05 wrote: »

Today with Sarah mcenry (taking over from Sean o rourke) were discussing a WFH survey
7300 participants
83% would like to continue with wfh
Over 60 % said productivity remained the same or improved

Yes another reason prices are going to plummet. Those who do retain jobs will be working from home a lot more.

cnocbui

Empty_Space wrote: »

Inflation in US in 2019 was 1.81.
They are succeeding in keeping deflation at bay and inflation positive for years.

Why do you think the stock market has bounced back so quickly, inflation via mass money printing. But its one thing to prop up the stock market, this has no reflection to the real economy.

EU 1.2% Trust me, that is not inflation, neither is 1.8%

Have you first hand experience of living with inflation of 7%?
How about 10%?
How about 15%?

The stock market has bounced because there is nowhere else to invest money for a return because interest rates have been zeroed, not because of inflation. The stock market appreciating is not inflation. The idiots in the US provided 'stimulus' to financial institutions and corporations, not the public. They didn't use the free money to grow their businesses or lend, because demand from consumers has been flat, because they haven't seen real wage increases in a very long time; the corporations and financial institutions bought shares instead.

amyed198

Dav010 wrote: »

You don’t think cutting off easy access to credit and putting limits on how much you could borrow was good change in policy by the central bank?

A good change in policy would have not been to drop and keep interest rates at historic levels during an economic "boom" we are told we experienced between 2014-2020. Interest rates should be raised in times of plenty, now there is no wiggle room.

The opposite of "sound economic principles".

Also, consumer debt is higher than 2008 right now.

Cyrus

Villa05 wrote: »

Today with Sarah mcenry (taking over from Sean o rourke) were discussing a WFH survey
7300 participants
83% would like to continue with wfh
Over 60 % said productivity remained the same or improved

people will always rate their own productivity highly.