Softening house market?

Have a look at the ERSI rental equivalent model for calculating housing inflation. It is flawed to say the least. I have been trying to get more details of Conor OToole, who is the research model author amd no luck.

This inflation model is used and baked into Irelands overall CPI inflation number, so a wrong downplayed housing inflation number down plays our overall inflation.

 "Furthermore, we show there are considerable differences in the inflation rate if new relative to existing rents are used in the rental equivalence measures with measures based purely on existing rents biasing downwards both the rental equivalence measure and the overall consumer price index. This suggests that considerable care is required for policymakers in using rental equivalence methods in the presence of data gaps" - taken from the Abstract  

More people now than ever entering the new rental market side as they are comming back to the city from WFH, so the weighted constant ratio for long term rental vs new rental used to validate this model to the original housing CPI is now totally off.

An end of terrace house, directly across from a school where cars park and drop off morning, noon and afternoon, which hasnt been decorated in about 40 years.

That is somewhat true, but not completely if your horizon is short-medium term. If you buy a property at a relatively high LTV as a starter home with the plan of "upgrading" in a couple of years, and if a crash then leaves you in negative equity, you might find it difficult to make the move.

We can’t forget either that 2007 was 15 years ago - in a normal market, house price inflation moves in line with wage inflation - wages have about 20% inflation in real terms in the past 15years, notwithstanding far higher wages and wage inflation in the multinational industries we’ve grown here in that 15 years.

so in reality prices aren’t back to 2007 levels in terms of affordability, only in terms of absolute price.

One final point - the 2007 price levels were achieved with wreakless lending practices, whereas this time around its being reached within v strict lending rules - which makes it a far more stable price level than the 2007 house of cards.

its a crucial but massive difference.

For sure - the 2007 prices are burned into our minds. A psychological scar :)

it’s a bit of a moot point though - you assume everyone has equal share of wealth (which is absolute Socialism or absolute communism, depending on your point of view).

More than that - you have to actually live in the house you buy. If my budget is X and that can get me 100sqm today but if I hold out and prices drop I could get 130sqm in a better location for the same price in future - that's a massive difference to my quality of life and my children's upbringing over the long term, regardless of if it means I pay off my mortgage a few years later.

That's a massive "if" since we don't know what will happen to prices, but the idea that price changes don't matter if you're not treating the property as a pure investment doesn't make sense to me.

My wife told me that our neighbours house went sale agreed after being on sale no more than three weeks. So much for softening, the price they had it advertised I thought was optimistic but apparently not too much so.

When do people think interest rates will start to rise? We are currently trying to break out of our fixed term and pay a lump sum off the balance and refix. So far its taken almost 7 weeks and and we are still not on the variable rate. The bank are now advising me to send in all forms required as soon as to speed up the process. The delays are down to many others trying to break and refix to avail of cheaper rates for longer.