Future medium term outlook on Property ?

hamster

We all know that no-one can predict the future but I thought I might bring this up to see what people think of the current situation regarding property. I recently had a look at the growth of commerical property year on year back to 1969. I must say I am taken aback by the scale of growth since 1994 onwards. Take a look at the attached property table. Can anyone enlighten me on what the real return was for 1999, 2001 and 2002?

Looking at this I have to bring myself to say that we are in for a slight correction or at the very least much slower growth for the next 5 years or at least time in short/medium term future. Everyone needs a roof over there head granted but all need a job to keep it there regardless of the interest rate.

We all know that no-one can predict the future but to speculate what do people think the real return for the next 10 years will be? Note I'm not taking this seriously just wondering what people think.

Good points for property growth:

* More people
* People living longer
* More single people living alone
* Adversion to recent share performance (people tend to buy high/sell low)
* WW II interest rates
* House prices are NO LONGER based on high interest rates protecting a vulnerable Punt
* Immigration
* Recent past accumulated wealth
* More wealthly Europeans have moved here
* Second/Third Home investment rush
* Low interest rates stable at least for short term to medium term
* Potentially lower rates to go making reducing interest part of repayments further
* Better that people buy brick/morter for effectively future generations that on booze/cigs


bad points for property growth:
* Lower interest rates force people to take on more mortgage dept
* These initial mortgage dept amounts for new buyers go up as interest rates go down
* Potential deflation or lower inflation will make the debts more expensive
- slower to pay off
- lower wages
* Still need a job even if mortgage has low interest repayments
* High inflation in the 70's and 80's enabled people to 100% own their house in a few years but low inflation / mild deflation ensures that people will take decades to 100% own their own home
* Low inflation / mild deflation keeps wages low which keeps mortgage repayments high


I really don't know what way things will pan out but may you live in interesting times...

Opinions?

hamster

I also meant to point out that the attachment shows the nominal real returns (after inflation) which was taken from "from canals to computers" by Shane Whelan at Friends First.

bug

I voted approx -10%.
I see in my area D.12 that there are at least twenty houses which have been up for sale in the last three months, which I imagine is due to current speculation that the market may fall, these on the main road into the city centre alone. Also I note in the city centre that many 1 bed apartments are up for sale. But of theose for sale that I have noted a sale has been agredd within two weeks.
I spoke to my previous landlord in the city centre who rented approx 50 apartments between the city centre and glasnevin area and he had lost 20 of his "renuing tenants" those that would have renued their yearly lease yearly for the last five years or so, the reasons he was given for tenants leaving was, emmigration, and moving home to parents and because of this he had placed many of the apartments up for sale.
Myself I am at home with parents after a three year lease on a cc apart. and will eventually buy property abroad. I would only consider buying her if property decreased by at least 10%