House Prices

Culchie

dochasach wrote:

O.K. since you're the ultimate source of information we'll use your estimate of a 50% property price increase since 2002.

At first I thought you were an estate agent and I was going to ask you for monthly time-on-market figures to prove me wrong. But I don't think you're an estate agent, maybe you're a builder. So what in construction cost has increased 50% since 2002 (500-1000% since 1995)? Concrete? Wood? Shoddy workmanship? Are builders buying $10,000 hammers from the U.S. military?

Nope, Supply and Demand, simple as that.

My house in D15 suburbia, has gone from €240000 to €300000+ in the last 6 months.

100% Mortgages, €317K Threshold, SSIA's coming up, that is what is driving the market at the moment.

MorningStar

dochasach wrote:

I haven't seen a single link or fact in any of your posts to backup your opinion. I've presented several.

Read your own links again and they say the opposite to you if you are just as selective with the details as you. Some of the links you have post are not fact but more opinion with little or no facts themeselves.
You haven't actually presented things supporting your views completely. You are being too selective for your own beliefs.
You haven't got me pegged in anyway, I am neither an estate agent or a builder. I am not scared either as I am well covered as I keep saying even with your worst predictions thus far very few people would really have an impact.
Why don't you explain how many people your worst senario would really effect? Even agreeing with you would effect so few people it is maddness to go on about the dangers so agressively.
I beleive you are misreading facts and don't understand that using the same details and the rest of the market details there will not be a desaterous result. Even looking at the price crash in the UK with in 6 months many proeprties recovered prices and while some areas stayed in negative equity for 5 years and longer the good property recover quickly and was making profit in a shorter time. Being in negative equity can still be cheaper than living in rented accomadation.
Just to give you a little insight into facts you misunderstand. Construction cost AND land prices went up. There is less land avialble everyday around the cities etc... Do you understand supply and demand? You do notice the population is increasing too? You are assuming shoddy workmanship too! Next time I see aband wagon go by I give you a shout so you can jump on there. I am not going to run around to get you the precise facts but as you haven't mentioned them you seem to miss them in formulating a more inclusive and rounde opinion. The objective still remains to afford a house to live in. Ireland will probably never get rent controls that other countries have because of the high portion of home owners and small investors. These control rent and effect prices in other countries again a lack of insight on stuff you have mentioned before.

Dellgirl

[PHP]interest rates aren't going up 1%...[/PHP]

But...but...the man...on the radio.

copacetic

Dellgirl wrote:

[PHP]interest rates aren't going up 1%...[/PHP]

But...but...the man...on the radio.

i dunno, didn't hear it, but the ecb has said rates are staying where they
are at the moment but may be adjusted soon, but even then it would
be in 0.25 or at most 0.5 increments, not 1%.

can you remember who said it/on what show?

pedro ferio-vti

Some good points and facts made by dochasach, thanks for your time and contribution.

MorningStar, why are you so defensive? It's blatantly obvious you have some sort of vested interest in property prices continuing to unsustainably rise over the next few years. Why don't you tell us what your agenda is here? doc has been clear in his position and in fairness to him, he has quoted from various factual links, information and articles whether you yourself are just providing hearsay and various excuses and exclusions in some sort of an attempt to undermine dochasach's valid points and reasoning.

Interesting thread nonetheless. Personally, I think it's pretty well known that property prices are going to drop somewhat over the next 4-5 year period. By how much or what percentage, I don't know. But to anybody with no hidden agendas or biases looking at the economy at the moment, it doesn't look good. Ireland has lost it's competitive advantage that it once held over other EU and border countries i.e. cheap company/corporation tax. Has one of the more expensive workforces to employ and provide a future for. Dreadful infrastructure, huge service costs.... the list goes on. Why would a company come to invest in Ireland? Answers on a postcard, preferably without the usual "we have one of the most educated and 3rd level qualified workers in the EU" story.

lomb

morningstars vested interest is he wants to become a multi millionaire while sitting in his house doing nothing like everyone else:D
i think prices are only being sustained by the supply demand equation and low rates caused by an irish government impotent to do anything because germany/france controls the levers, but soon there economys will pick up then, bring on the rates in the uk (6 %) and lets see what happens folks

TheBigLebowski

pedro ferio-vti wrote:

Personally, I think it's pretty well known that property prices are going to drop somewhat over the next 4-5 year period.

Who knows this? Can you ask them what the lotto numbers are gonna be for next week while you're at it? Nobody knows they are going to drop. It's one big guessing game and everybody has an opinion but nobody knows for sure.

Personally I think the fact that you can get a 300k mortgage over 35 years and pay roughly 1000 - 1100 euro a month is going to keep the prices up. Split that between a couple and you're only talking 500 - 550 euro a month which today is feck all. Most people I know who would be in all sorts of jobs come out with more than that in a week. Even taking into account a rise in interest rates, it still wouldn't break the bank. Ireland still has a young population so the supply of 1st time buyers is gonna be there for a good few years.

Regardless of whether prices will fall or rise I still think you are far better off in any circumstance buying instead of renting. Prices ain't gonna fall that much and every month you're just wasting dosh paying someone alse's mortgage for them.

FreeAnd..

Regardless of whether prices will fall or rise I still think you are far better off in any circumstance buying instead of renting.

Completely agree with you Big Lebowski, the alternative to not buying is renting and buying a property is always going to be a risk but the alternative is always going to be a definite loss. Rent is always going towards someone elses mortgage or straight into their pocket. I don't see prices dropping in the near future especially with 100% mortgages and SSIAs about to mature. There is going to be a bigger demand as people who have been renting can now get a 100% mortgage with little or no outlay up front and get a mortgage that amount s to the same as their rent each month. For these people they can end up owning a property for the same as they were paying in rent and the risk is less, because people always go on about negative equity but worst case scenario interest rates jump dramatically and their property gets repossessed they havent really lost anything. No big deposit, maybe whatever money they invested into the property - repairs, furniture etc but nothing really heavy. At least owning the property in stead of renting gives them the chance of owning an equitable asset rather than financing someone elses.

MorningStar

pedro ferio-vti wrote:

MorningStar, why are you so defensive? It's blatantly obvious you have some sort of vested interest in property prices continuing to unsustainably rise over the next few years. Why don't you tell us what your agenda is here? doc has been clear in his position and in fairness to him, he has quoted from various factual links, information and articles whether you yourself are just providing hearsay and various excuses and exclusions in some sort of an attempt to undermine dochasach's valid points and reasoning.

I am not being defensive I am trying to balance the other view and fill in the massive gaps in the theory given. I have no vested interest, as I said several times even if this doomsday happens I will still be fine. I am a landlord who ons property a long time.
AS I have been pointing out even if all the worst case senarios happen very few people will truelly be effected. Why rant and rave about all the possibilities when so few people would truely be hit. People will still need to live somewhere and it is generally better to own or have a mortgage if you want to be picky. Read the factual links provided they don't actually agree with each other. World view reports are not detailed enouugh for a small market like Ireland. Supply and demand is the only rule and Irish people want property. It is all hearsay and conjecture all I am saying is it doesn't really matter when dealing with your home and it is really unlikely all the bad things will happen at once.

If dochasach is such an expert and been watching the market so closely he would own his home and probably own more property. He has interest in the prices lowering where as I will not be effected drastically if the market crashes. So if anybody has vested interest in a price crash it is him which would explan why he selects details that support his wishes and does not reason out all the details. Supply and demand are the only rules and you look at what effects them. There are a lot of people who have a bit of money put away and they are waiting for a price crash so they can buy. Everybody I know who doesn't own wants to own and they wait to either meet a partner to buy with a friend. They will keep demand up and supply is lowering as there was simply less planning applications. That is even ignore the SSIAs that are are already effecting the markets and amount of mortgage. You can call it hersay if you want but if the market is going to crash bear in mind an event has to happen. There has never been a crash on it's own and it is always more likely a slow will happen but that doesn't sell media reports.

parsi

TheBigLebowski wrote:

Personally I think the fact that you can get a 300k mortgage over 35 years and pay roughly 1000 - 1100 euro a month is going to keep the prices up. Split that between a couple and you're only talking 500 - 550 euro a month which today is feck all. Most people I know who would be in all sorts of jobs come out with more than that in a week. Even taking into account a rise in interest rates, it still wouldn't break the bank.

That's all well and good until you have childcare costs to pay !

FreeAnd..

Keeping fingers crossed that the need for childcare will be a few years off - that would effectively put any current plans to ground. I don't know how people survive with the current price of childcare on top of a mortgage especially with variable interest rates. What happens if interest rates jump, I imagine getting rid of childcare is not an option. It makes it tough alright, bring on the days of proper govt funded childcare centres where the prices wouldnt pay for another house or a new car (Ferrari at the current rates if what I've read in the papers is to be believed).

Dellgirl

Quote:
Originally Posted by Dellgirl
PHP Code:
interest rates aren't going up 1%...


But...but...the man...on the radio.


i dunno, didn't hear it, but the ecb has said rates are staying where they
are at the moment but may be adjusted soon, but even then it would
be in 0.25 or at most 0.5 increments, not 1%.

can you remember who said it/on what show?

I cant remember tbh. Friday morning sometime. I probably didnt hear right.

MorningStar

Dellgirl wrote:

I cant remember tbh. Friday morning sometime. I probably didnt hear right.

There is a lot of speculation that the rate will go up as much as 1% over the next year. It is most likely go up 0.5%

The radio also said that the central bank believe house prices are over estimated by as much as 15%. A far cry from the 50%-300% mentioned here already. It still will depend on where the property is one way or the other. The further you are from a centre of major employment and/or transport your property will devalue quicker.

Edit: A usefull link
http://www.ireland.com/newspaper/front/2005/1107/2435154999HM1EMMET.html

Depending on what your view is you can read this and justify dochasach views. However as I have been trying to point out that would not be a well rounded world view on the subject.

All things can be viewed negatively but the reality of your home should be different. I would not really suggest a investment property unless you are adding value in a quick turnaround rather than waiting for property prices to rise.

JimmySmith

Read what the central bank had to say every year since 1999.
Also read what the expert economists were saying every year since 1999.
I dont know how these people can keep their jobs producing the 5hite they do year after year. And they do 'forecasts' as a job. If they cant get it right i dont see how the ordinary non-economist joe is going to be any better.

Simple truth is, you dont know, i dont know and god doesn't even know. Anyone who bought a house in the last few years can count themselves fortunate on their roll of the dice. Those who didnt, unlucky, but you got to either roll the dice some time or leave the table. Watching and coming up with reasons for red or black all the time gets you nothing.

joejoem

JimmySmith wrote:

Read what the central bank had to say every year since 1999.
Also read what the expert economists were saying every year since 1999.
I dont know how these people can keep their jobs producing the 5hite they do year after year. And they do 'forecasts' as a job. If they cant get it right i dont see how the ordinary non-economist joe is going to be any better.

Simple truth is, you dont know, i dont know and god doesn't even know. Anyone who bought a house in the last few years can count themselves fortunate on their roll of the dice. Those who didnt, unlucky, but you got to either roll the dice some time or leave the table. Watching and coming up with reasons for red or black all the time gets you nothing.

Here here. People are generally pessimistic in this country and love to tell you how you are wrong and doom is inevitable with everything. Just to take property in the last five years, every magazine, every supplement has had the same article over and over about the fact that our property bubble is about to burst. As said above, you can either take "a chance" and invest now or continue to sit on the side lines and wait for house prices to fall. In my opinion it will be 2 years before we see a substantial slow down in the market and even then I dont think house prices will plummit, I think they will level off.

ionapaul

Hmm, at the same time many, MANY forecasters identified the dotcom asset price bubble years before the bubble burst in spectacular fashion...all the while they also had people telling them 'you said the same thing last year, you were wrong, petfoodandpartyhats.com is a winner and I've tripled my investment'. The thing is, what those forecasters identified was fundamentals WAY out of line with the accepted historical ratios and figures, and quite rightly pointed out that this might be dangerous territory. The dotcom boosters replied that we had entered a new time, a new economy, a new paradigm that ignored the rules and historical fundamentals layed down over the past century.

Historical fundamentals in any asset class cannot be ignored indefinitely. People buying investment residential property in Ireland are ignoring the fundamentals, gambling on asset price appreciation rather than rental yield. This is speculation, like buying 100 shares of petfoodandpartyhats.com at €215 / share with evidence of earnings or sales, but with a nice colourful brochure!

That said, just like any asset bubble, all you need to do is avoid being the 'bigger fool' - those who bought petfoodandpartyhats.com at €200 and sold at €215 made their money! Just pity those who buy in at the tail end of the party, they are the ones left holding the empty bag...

lomb

if interest rates increase to 7 or 8% i can see a crash. otherwise no, there will be no crash. i think we all know that property is overvalued here, but at the same time we all know that its going to keep going for another few years. and then there will be a leveling (hopefully)

dochasach

ionapaul wrote:

...
Historical fundamentals in any asset class cannot be ignored indefinitely...

Very well said. Here is a recent article about the U.S. bubble:
http://www.thetrumpet.com/index.php?page=article&id=1181
Most of us hope that Ireland is "different" (just as the dot commers hoped and believed in a "new economy") but there are some things vaguely familiar in the article:

A Merrill Lynch economist, David Rosenberg wrote:

... identifies six characteristics of any kind of asset bubble: overheated prices, over-ownership, too much debt, speculation, complacency and denial.

Which of these characteristics do we not have in Ireland?

And if you believe that buying is _always_ better than renting regardless of cost and risk... I have some tulips I'd like to sell you.

Work out the monthly cost of the property at today's 10 year _fixed_ interest rate:

http://www.rossbank.ie/mortgage_calculator.htm

Is it comparable to rent on the same property? Good, add 1% to the interest rate and rerun the amortization, does it still look better than renting? It may still work out to buy if you plan on staying longer than 10 years. Will your employer guarantee you'll have a job in 10 years in the same location? If so, congratulations, you must be a civil employee.

This may sound extrordinarily conservative, but if you haven't run some of these numbers, you are relying on property prices rising and buying into a bubble. The banks have a pretty good idea what the long term average interest rate will be. Banks aren't in the business of losing money and the ECB (and some banks) have as much as told us they _will_ raise interest rates so if you're betting on an ARM staying low, you will lose.

Here's an example, a 300,000 house, 30 year mortgage at current ARM of 3.3% gives a montly payment of 1310. This is a couple hundred a over what it rents for, but hey I'd own it right? But lets say I pay for 2 years and then interest rates rise 1%. Most banks adjust the payments so that the loan end-date doesn't change. For simplicity I'll assume 1/2 of the monthly payment goes to the principle (very optimistic!) After 2 years you'd owe 284269 and the payment jumps up to 1455, with just a 1% rise! Over 30 years you'll pay 127,800 more than renting the same property but you'll still be ahead of the renter assuming the property is still worth at least 127,800.

If interest rates rise much more, you can get to the point where the portion of your payment devoted to interest is more than what the same property would rent for over the same period. You're treading water for a while, but you're still ahead of the renter right? Not necessarily. If the property falls in value, your loan can go "upside down" which means you owe more than the house is worth. If you have to sell it for any reason, you'll still owe the bank. At least when a renter moves out they don't still pay the landlord!

Morningstar couldn't be more wrong in his assumptions about my personal circumstances and interest. The run-up is actually benefiting me because it is causing too much property to be constructed which is driving rental prices down. I have no intention or desire to buy before my lease is up and even then I don't intend to unless property values have normalised at least 25%. The SSIAs will be mature by then and it will be clear whether there's enough unspent money left in SSIA's to prolong the bubble.

About the only thing Morningstar and I agree on is that in the end, supply and demand will determine the price of property. I just think building more than 1 house for every new _person_ (i.e. several per family!) in Ireland will prove to be excessively optimistic.

Again, the above represents my personal opinion, backed up with a few facts and calculated rough estimates. I'd like to be proven wrong.

I sure hope the banks are explaining these risks to people.

TheBigLebowski

Dochasach, with regards renting Vs buying. When you rent, you lose everything you put in. Guranteed. Absolutely no chance of any return. 100% no win situation. Can you not see that? When you buy, there is a chance you will not make any money but at least you have the chance that it might be a good investment for the future. Rent money is guaranteed dead money.

dochasach

TheBigLebowski wrote:

Dochasach, with regards renting Vs buying. When you rent, you lose everything you put in. Guranteed. Absolutely no chance of any return. 100% no win situation. Can you not see that? When you buy, there is a chance you will not make any money but at least you have the chance that it might be a good investment for the future. Rent money is guaranteed dead money.

If you're renting property and not living in it, this is true. But it is not dead money as long as you are getting the use of it. I have to pay X for renting a place and Y for buying the same place, as a renter I can invest the difference (Y-X) in something else (oil, property in a pre-bubble country...) If property continues to rise forever then yes, buying is always better. But if property stagnates or falls in value, a renter can come out ahead. The break-even point depends on individual circumstance but all I'm arguing is that there does exist a point when owning property is not the best option. If you can't imagine, take this take to the extremes. What if you could chose a lifetime lease on Bono's house for 900/month or you could buy it for 18 million. Would it still be better to buy or should you rent and use all your extra money to buy Slash's house ;-)

section4

I agree with Doc.
House prices can only keep rising if people can keep paying the mortage and they can only pay the mortage if they have a job, if they do not have a job they cannot pay the mortgage. It does not matter if interest rates rise or fall if you have no money to pay your debt. It does not matter what the demographics are if there are no jobs for the people who are here or come here, if you cant work you cant pay. everything is cyclical and Ireland has had avery long cycle of growth and it must end sometime, I dont know when but I do know it will end, this is the lesson of history. It wont change slowly, the housing market wont change slowly, it will just turn in a few weeks because it is all built on confidence, confidence that prices will keep rising and while people feel that way they will rise, but as soon as confidence goes it will be a race to get out.
I was in london in the late eighties and the same scenario is unfolding here, I was one of the beleivers then, property could not go down in value etc etc, I heard all the estate agents, etc but they were wrong it did end and I ended up a mortgage slave for six years,. If I had kept renting for a few more years I could have bought for a lot less. I bought at the top of the cycle, at the crest of the wave then i started down the other side and the prices dropped, the jobs dried up, I worked two jobs to try and keep afloat. I could rent a room for 70 pounds a week at the height of the boom after a bought the house but within a year the rents had dropped to 40 pounds a room(Rememebr the rent a room scheme, devised to help people who could not pay their mortage),. I was a single person who had no other commitments and it was only because of this I was able to keep going but there were thousands who threw their keys away, especially transient people from other parts of Britian Ireland scotland etc and because tey had no ties to london they were not prerpared to sit in negative equity especially when there were no jobs so they just went home or elsewhere. when the bubble burst, House prices dropped, rents dropped, jobs went, wages went down, interest rates went up, and confidence dissappeared, this is the reality of what happened in london and it will happen here, Houses here are much dearer here now in relation to wages than they were in london in the late eighties. You could earn 400 pounds a week and buy a 2 bed flat for 65,000 easy.

MorningStar

dochasach wrote:

Which of these characteristics do we not have in Ireland?

Here is where you start being wrong. First off the differences are what count!
Ireland has a differnet history which appears to be driving a much higher home ownership(the highest in the world). Employment distrabution in Ireland is heavy on the cities and particulaly Dublin.THe interest rates here are determined in connection with the rest of Europe that is not going through the same economic boom.We have a different banking system. Families help each other buy homes here. Most landlords in this country are small types so large business don't have the same control on property prices for accomadation.

dochasach wrote:

This may sound extrordinarily conservative, but if you haven't run some of these numbers, you are relying on property prices rising and buying into a bubble. The banks have a pretty good idea what the long term average interest rate will be. Banks aren't in the business of losing money and the ECB (and some banks) have as much as told us they _will_ raise interest rates so if you're betting on an ARM staying low, you will lose.

THis is some massive assumption. You are over exagerating every possible risk and using reports on other markets to say what is happening here.

dochasach wrote:

Here's an example, a 300,000 house, 30 year mortgage at current ARM of 3.3% gives a montly payment of 1310. This is a couple hundred a over what it rents for, but hey I'd own it right? But lets say I pay for 2 years and then interest rates rise 1%. Most banks adjust the payments so that the loan end-date doesn't change. For simplicity I'll assume 1/2 of the monthly payment goes to the principle (very optimistic!) After 2 years you'd owe 284269 and the payment jumps up to 1455, with just a 1% rise! Over 30 years you'll pay 127,800 more than renting the same property but you'll still be ahead of the renter assuming the property is still worth at least 127,800.

I love how you contradict your own views here. If rent is connected to house prices via mortgages that would mean rent would go up! Rent has increased more than double and trebled in many areas since 1990. Some beleive that is what fueled the house prices.Be ing selective with you calculation and details

dochasach wrote:

About the only thing Morningstar and I agree on is that in the end, supply and demand will determine the price of property. I just think building more than 1 house for every new _person_ (i.e. several per family!) in Ireland will prove to be excessively optimistic.

Again you are being selective with facts why do you think houses are going to be built at the same rate? They have slowed and sped up a few times in the last 10 years and they are about to slow again. Again you are being selective with details to fit your view. Supply is about to slow and demand doesn't look like slowing. Intrest rates going up and a reduction in employment will effect demand but to the extent that all house prices drop by 50% is some major unemployment and people over reacting to interest rates. AS I have said it will effect so few, how much of the populkation will actually be effected? I have asked this a few times yet you keep "missing" it.

Ultimately why do you think every possible bad thing about the property ?
You think lower rents make your personal situation best you should look at the long term figures. You have already mentioned you are closer to owning your house now so obviosly that is what you want. If it takes two years and you then start a mortgage house prices woiuld have to drop considerably for you to recoup the rent and the additional time you now have on your mortage. AS I have siad the objective is to own your home to have security, your plan does not lend itself to this objective in any fast method and relies on prices dropping . Your risks to take but just beacuse you are relying on this you do have a vested interest in prices dropping.

dochasach

MorningStar wrote:

Here is where you start being wrong. First off the differences are what count! Ireland has a differnet history which appears to be driving a much higher home ownership(the highest in the world).

Interesting how you take a symptom of a bubble and turn it around to try to explain why this isn't a bubble.

MorningStar wrote:

Employment distrabution in Ireland is heavy on the cities and particulaly Dublin.

Yes and what are the two biggest employment sectors based on contribution to the economy _and_ immigration? 1) Construction - Builders must live near building sites while they are being built. But over time, when an area is built up, this industry tends to be nomadic. 2) IT - Where locale is becomming less important every day. We can do sysadmin for the U.S. and India can do sysadmin for us. As long as you have an educated workforce (as India, Poland, Ireland and many other places have) and internet (practically everyone in S. Korea has 10MB internet) it doesn't matter where you live, except that an employer can pay a Polish sysadmin half what he pays here and the sysadmin can still afford a decent house.

MorningStar wrote:

THe interest rates here are determined in connection with the rest of Europe that is not going through the same economic boom.

Yes, France and Germany's misfortune have benefited Ireland, but their recession won't last forever. Even now there are inflationary forces at work. The U.S. interest rate rise and instabilities in france are leading to a fall in the euro, which is inflationary, so are high oil prices. Irish inflation has flown under the radar of the central bank but when obvious inflation takes hold in the rest of europe, the ECB will have little choice but to raise rates.

MorningStar wrote:

We have a different banking system. Families help each other buy homes here. Most landlords in this country are small types so large business don't have the same control on property prices for accomadation.

Nothing is too unusual here. Parents help children elsewhere, though here they almost _have_ to. And their help has pushed a 100,000 euro upward bias on the market. I'd like to see the distribution of number of units to landlords in Ireland. It really wouldn't take much to make a cartel in a market of this size.

MorningStar wrote:

THis is some massive assumption. You are over exagerating every possible risk and using reports on other markets to say what is happening here.

No. The b(oom or ubble) relies on too many factors being 'perfect'. For it to continue, we _need_ low interest rates, a strong job outlook, continued high immigration and population growth and parental boost. You need the Fraco-German recession to continue, but you need continued E.U. and U.S. investment in Ireland. Some of these factors are intertwined. For example high interest rates will reduce demand which would require a reduction in construction which would increase unemployment.

MorningStar wrote:

I love how you contradict your own views here. If rent is connected to house prices via mortgages that would mean rent would go up!

How many times will I have to explain that under _normal_ supply demand based pricing rents and house prices rise and fall together, but under asset bubbles prices rise much faster than rents. The fifth paragraph of page 1 here explains it better than I can:
http://www.cepr.net/publications/housing_bubble_2005_11.pdf

MorningStar wrote:

Rent has increased more than double and trebled in many areas since 1990. Some beleive that is what fueled the house prices.Be ing selective with you calculation and details

And rents have fallen in the past few years. What is causing this if not an oversupply or lack of demand?

MorningStar wrote:

AS I have said it will effect so few, how much of the populkation will actually be effected? I have asked this a few times yet you keep "missing" it.

It would affect the building industry, which has prevented Ireland from slipping into recession along with much of europe. It would affect anyone who overextended themselves or bought a house close to the peak.

MorningStar wrote:

Ultimately why do you think every possible bad thing about the property ?

You must be reading your own pessimism into my posts. I'm an optimist. Those who try to convince young people that "if you don't buy _this_ house _now_ you might miss it and _never_ get on the property ladder!" are pessimists, or scheisters. The bubble thrives on this fear. Many
recent buyers don't remember anything but the hyperinflation associated with the b(oom or ubble). I know that the economy goes through many seasons, I've lived through a few winters and came out O.K. I'm an optimist.

Obviously, I couldn't convince you to change anything with your property investments even if I wanted to (and I don't.) Likewise you won't convince me to change anything until I see some data. You claim interest rates wont rise more than 0.5%. You claim that demand will continue to exceed supply and you claim prices won't fall. Let's see what the data looks like after 1 year. If there are any estate agents out there, I'd also like to see a steady or falling monthly time-on-market figures for the next year. I'm tired of arguing and responding to personal attacks here when the real data is out there.

lomb

The thing is dochasach that soon supply will outstrip demand. i dont think anyone doubts that. the problem, is that 95% of the supply is of a substandard quality, ie leasehold apartments. there are no traditional houses being built anymore anywhere in dublin. surely even you can see that prices for multiple occupancy units that are not in the city center will stagnate or fall, while real houses will continue to appreciate as demand will INEVEITABLY outstrip supply, as there is no more supply and there NEVER will be?

ionapaul

lomb wrote:

The thing is dochasach that soon supply will outstrip demand. i dont think anyone doubts that. the problem, is that 95% of the supply is of a substandard quality, ie leasehold apartments. there are no traditional houses being built anymore anywhere in dublin. surely even you can see that prices for multiple occupancy units that are not in the city center will stagnate or fall, while real houses will continue to appreciate as demand will INEVEITABLY outstrip supply, as there is no more supply and there NEVER will be?

Who are the fools who are buying apartments, high density units that make sense for city centre living, in D15 and other suburbs? I agree with you (even Morning Star has commented on the problems of buying such units outside the city centre) that the prices for apartments in suburbia are vastly overpriced. Particularly when there are 000s of apartments yet to be built within walking distance of the city centre at Spencer Dock, East Wall, Grand Canal Dock and even Cork Street in D8! Occupency rates in the suburban (now even rural!) apartment complexes could plummet over the next few years. Rents will certainly decline, IMHO.

MorningStar

lomb wrote:

The thing is dochasach that soon supply will outstrip demand. i dont think anyone doubts that. the problem, is that 95% of the supply is of a substandard quality, ie leasehold apartments. there are no traditional houses being built anymore anywhere in dublin. surely even you can see that prices for multiple occupancy units that are not in the city center will stagnate or fall, while real houses will continue to appreciate as demand will INEVEITABLY outstrip supply, as there is no more supply and there NEVER will be?

I what actually makes you think that supply will oustrip demand? I guess I doubt this then. I think to say 95% of homes are substandard is a little bit on the high side. Most of the properties are actually in some ways better than older houses due to better insulation and generral energy efficiency. Some good and bad with both. AS fuel prices go up this maybe more relevant. Not many people could afford to live in a georgean house now due to heating. I don't think that highly of many new designs and building techniques but there are certainly more than 5% well built new homes.
The general restriction of geography limits supply as you say and I think apartments will get a bad name due to bad management, poor design and small space.
Traditional houses as a a new build option is now going to be for the rich only I think. A lot of the existing 3 bed Semis will end up being split up to apartments as they will be too big for the new social order where not evereybody gets married or stay as a family unit.

lomb

MorningStar wrote:

AS fuel prices go up this maybe more relevant. Not many people could afford to live in a georgean house now due to heating.

lol, i doubt that somehow, anyone can go out and buy a load of photovolt solar panels gauranteed for 25 years. the cost of heating is nothing in comparison to the cost of financing and repaying 3 million euros

lomb

MorningStar wrote:

A lot of the existing 3 bed Semis will end up being split up to apartments as they will be too big for the new social order where not evereybody gets married or stay as a family unit.

what u are talking about is an ireland that no one wants to see. there will always be a VERY strong demand for semis and detached houses. a certain percentage of people will always have money and a certain percentage wont. the fact that supply and demand will be in imbalance (and already is ) will push up house prices in dublin and greater dublin.
a garden is a hugh amenity morningstar, as is car parking, as is a freehold as opposed to leasehold properties which are the devil in disguise as far as im concerned.
everything has a place, and taking 'an interest' in a property with a leashold is fine if u are an investor who has done his sums and doesnt mind getting fleeced 2 grand a year in service charges while the place falls down around you, but for owner occupiers it is a sick joke.

lomb

ionapaul wrote:

Who are the fools who are buying apartments, high density units that make sense for city centre living, in D15 and other suburbs?

i wonder if its to do with the fact they are new, and everyone wants new(but they wont be for long). or maybe its because they are 20% cheaper than houses, but either way its a joke, i wouldnt touch them with a stick.

MorningStar

lomb wrote:

lol, i doubt that somehow, anyone can go out and buy a load of photovolt solar panels gauranteed for 25 years. the cost of heating is nothing in comparison to the cost of financing and repaying 3 million euros

I own a Georgean house and it is worth just over the 1/2 million mark. It is really hard to heat and broken into apartments! The maintainence costs are huge on such a big house but I will admit age is an issue too. Impracticle as a home and the bigger ones are used as buisness premises and apartments. You can buy an apartment in a big old georgian house now. THe UK has split up many of it's housing stock to cater for smaller households.

lomb wrote:

what u are talking about is an ireland that no one wants to see. there will always be a VERY strong demand for semis and detached houses. a certain percentage of people will always have money and a certain percentage wont. the fact that supply and demand will be in imbalance (and already is ) will push up house prices in dublin and greater dublin.
a garden is a hugh amenity morningstar, as is car parking, as is a freehold as opposed to leasehold properties which are the devil in disguise as far as im concerned.
everything has a place, and taking 'an interest' in a property with a leashold is fine if u are an investor who has done his sums and doesnt mind getting fleeced 2 grand a year in service charges while the place falls down around you, but for owner occupiers it is a sick joke.

It really doesn't matter what people want they are allowing the changes. Fathers have little rights so some people decide to go it alone. Divorce is a reality in ireland that other generation didn't have to deal with. Family sizes have reduced a 3 bed semi were used for larger families. The demographics will change so demand will change.
I don't much like apartments especially many recent builds but they do have some benifits. Service charges are a charge for services don't like the price manage it yourself or get a cheap service company. Apartements area different way of living and owning but calling it a sick joke is suggest a lot of people around the world are stupid. Many people are still paying ground rent here and new housing estates also have service charges now.