Softening house market?

They might not feel too horrendous when comparing themselves with those who rented for 15 years and are now facing the toughest time to buy in history.

But if they compare themselves to others (the vast majority as not many people rented for 15 years in the past) who didn't buy in 07, but rented for a few more years and bought at any stage between 2009 - 2016 then they'll see they're many hundred thousand euro worse off for their decision. I.e. life altering sums of money. Work until they're 70 to pay off their huge mortgage vs retired at 50 levels of difference.

Saying "at least I'm not much worse off than todays buyers" - the most screwed cohort of all time wouldn't bring me much solace personally. But I guess if it does make them slightly less depressed then good for them!

I was working in Stearns. We were in the same building as Northern Rock. That was a crazy few days. Coming out the front door and people shouting at you and tv cameras pointing in your face beacuse they thought you worked at NR. At that point it was far too late to be worrying.

I dont think you are getting my point at all.

There was a 1 year period from NR to lehman brothers (Sep 2008) where it was becoming increasingly clear that things were going very badly. I mean if you were working in the industry you must have been aware of what was going on. I assume if you were not, you work in some support area or something like that.

On the upturn, all I did was read the propertypin regularly, I noticed the sentiment changing at some point in 2012 (people who were bears starting buying, increased numbers at open viewings etc). At that point you have to make a choice, you know it might be wrong, but you just accept that and buy. There was still a fair bit of uncertainty in 2012 about the general economy. I didn't think there would be increases in the coming years. I thought it was laughable when some government minister said property prices are like a ping pong ball being held underwater. Turns out he knew a bit more than me.

In 2022 indicators for the market have turned negative, but not extremely negative like we had in 2007/2008. So, there is a lot more uncertainty now. I am glad I don't have to make the leap. I would guess a drop of 20% or so over the next 3 years has a reasonable probability of happening. So, if you can deal with that potential downside, it might make sense to buy if you can.

I get the point you are making here, but I didn't predict it, what I did was basically "trend following".

My take on this

If you are investing in property you need to fully understand the market and risks.

If you are buying a home, it’s totally different it’s all down to your personal circumstances and affordability / job security

               Where do you live now, are you happy with it is it secure.

               Where do you want to live, are kids involved or soon to be involved

               What are you, are you willing to rent for longer in the hope of getting a better or cheaper house in 5 to 10 years time

               Do you have a deposit now or will soon have one.

               Are you able to lock in your interest rate and duration so that it is affordable.

               What if you lose your job.

If you buy now you are buying at high price but it could still go up more, if you wait you might need a larger deposit and you might be paying a much higher interest rate.  If prices fall but you saving remain the same, your % deposit grows still you could be looking at needing a 20% deposit.

Basically we bought in 2012, very close the bottom mostly by good luck, we were renting a nice apartment but wanted to start a family. Times were bad, banks wanted a 20% deposit due to falling prices, nothing to do with C.Bank rules.  The longest mortgage we could get was 27 years due to my age. We went from paying 1300 to a little under with interest relief on top. But our costs went up, twins!

I know one couple who sold in 2007 made a killing but never got back into the market they are still renting – and are basically f-ed 

It'll help slow prices but I think houses will keep their current values. Less buyers means less supply which is the main drivers behind inflated prices.

I think you're correct there. I would suggest that the ECB will start raising interest rates at some point towards the 2nd half of this year, if not earlier..... This means, money, or lending money will no longer be that cheap and will increasingly "get a price". This will certainly dampen the house buying mood in Ireland, as the full financed amount will naturally increase as the interest rate goes up.

In the end house prices will go down, or gradually go down, but the cost of financing them will go up. For the first time buyer not much will change.

However this will not solve the supply and demand issue, or create a more relaxed rental market. This can only be solved by offering more supply and this will take a while.

The supply issue is a different animal. It's driven by skills shortages and material prices. If anything a credit crunch could make things worse in my opinion. The supply issue will temporarily keep house prices artificially high. You can't compare Ireland with NZ.