Irish Property Market chat II - *read mod note post #1 before posting*

So you think they would intentionally make themselves look stupid by saying something they believe to be untrue?

I’m not sure why you think that. If they think prices will rise or go through a period of “correction” (there are a few articles online for you to read), when asked, I’m sure they would state their opinion.

Maybe I’m reading your post wrong, and I apologise if I am, what you seem to be saying is that they say prices will rise, even though they believe they will fall, because it’s like a turkey voting for Christmas.

So of the articles you’ve read, can you show me one where they predict a percentage price decrease?

Sherry Fitz seemingly have no issue with percentage predictions for increases but, as you say, ‘correction’ is the word they come out when prices decrease.

Why would that be? Because it would hurt their bottom line to predict price drops.

A year is an incredibly long time in the housing market. If agents predict a drop for the whole of 2023 now, that drop would basically start now. Sellers would begin panicking and buyers would expect immediate price decreases.

Once prices are confirmed to have begun dropping, they may then draw out the magical ‘correction’ forecast. The UK is the perfect example of what they do, as they began only predicting price drops in October, but reports are showing their prices had actually started to drop during the summer.

I’m not sure if was a failed attempt at wit, or like the WW3 spiel, just ill-informed.

Comparing other governments around the world, our government debt isn't that bad at the moment. We seem to be getting good stream of tax from MNC that is allowing us to spend a lot. We are basically spending everything we get, and the last quarter the exchequer had a good intake of tax revenue.

Issue really boils down to, if the tax intakes will be as good as it has been for us to continue to keep spending at the levels we are at the moment. Remember with the likes of social housing, we have moved from capital spending to more operational/monthly spending with the likes of HAP. So government will still have to shell out money during good times and bad times, and if there isn't enough income in tax during bad times, the likes of you and me will have to cough up the money !

Swedish Housing Market Rout Continues as Drop Extends to 17%

• Home prices slide seasonally adjusted 2% in December
• State-owned mortgage lender SBAB data based on transactions

ByAnton Wilen+Follow

January 2, 2023 at 6:43 AM GMT

Updated onJanuary 2, 2023 at 9:25am

The drop for home prices in Sweden continued unabated in the last month of the year, suggesting that 2023 could offer little relief for an already troubled housing market.

Prices across the country are now down almost 17% since a peak in the spring, according to state-owned mortgage lender SBAB. The worst slump for the market since the 1990s is nearing territory where the 20% forecasts by most economists — including the central bank — are starting to look too conservative. 

The Nordic country is far from alone in suffering from falling property values. After booming during the pandemic, central bank interest-rate hikes have triggered a real-estate downturn in a number of nations globally, including in Canada, Australia and New Zealand. In the region, home prices are also falling in Denmark, Norway and Finland, albeit at a much slower pace.

The new data sum up a bad year for Swedish home owners and real-estate firms, who are having to adjust to seeing the value of their properties fall in the wake of the surging cost of living and borrowing, and a gloomy economic outlook. 

Housing Gloom

Swedish households expect an ongoing fall in home prices to continue

Source: SEB

The indicator shows the difference between the proportion of households who believe prices will rise over the next 12 months and those who see prices falling.

Swedes are particularly sensitive to interest-rate changes, as roughly 64% of people in the nation of 10 million own their homes, yet most don’t have long-term fixed-rate mortgages. The fast pass-through of four sudden Riksbank rate hikes has exacerbated the market’s woes, with the central bank bringing its key rate to 2.5% in November from zero in April. It’s expected to raise the rate again next month.

Read More: Sweden’s Free-Falling Property Market Triggers Worst Slump in EU

Home prices fell 2% in December from the previous month, adjusted for seasonal variations, SBAB said on Monday. That follows a 2.2% decline in November and 2.3% in October, according to an indicator based on transaction data from SBAB’s real-estate listing site Booli.

SBAB has also reported longer listing times on its site as the market has cooled.

Prices for detached houses are now down 19% from the peak in the spring of 2022, while apartment prices have fallen 14%, SBAB said. The larger drop for house prices than apartments is in part explained by high electricity prices, which make it more costly to heat single-family homes.

Still, banks in Sweden are relatively well shielded from the worst distress in the housing market, as lending is based on a borrowers’ capacity to pay off their loans and settling debt on a mortgage is rare. The real risk to lenders is commercial real estate, as commercial property lending accounts for between 16% and 36% of major banks’ loan stocks.

Read More: Sweden’s Housing Market Seeks Bottom as Price Drop Continues

Should unemployment increase significantly “in the wake of the approaching recession,” it could lead to a “very difficult” situation for the housing market if combined with rising mortgage rates, Chief Economist Robert Boije said in the statement. That could then also hit the production of new homes, he said.

There are already signs of the construction industry grinding to a halt, hampered by rising costs and supply-chain hiccups, and a recession forecast for this year portends lower demand.

On Monday, one of the largest landlords said it had no construction starts on new rental apartments in the fourth quarter. Wallenstam AB is waiting for the situation around delivery issues and material prices to clear, Chief Financial Officer Susann Linde said.

“We need to keep an eye on production costs and the supply chain,” she said by phone. “We will gradually increase production when we have secured that.”

https://www.bloomberg.com/news/articles/2023-01-02/swedish-housing-market-rout-continues-with-prices-now-down-17?srnd=premium-europe

And those explanations have been refuted. Also the article touches on many other markets and the parallels with Ireland are also fairly apparent if you actually read the article. Feel free to mute me as I'd happily not read and respond to your replies.

Go back through the posts - think it was on the softening market thread. In summary, Timing Belt selectively quoted one of the 3 measures used by the ESRI to value property across various markets to argue the Swedish/Irish market comparisons were not valid. However, on one measure which he chose to ignore (and in the process accused others of cherry picking stats to support their argument 😏) that related to property/ income ratio, the Irish market was the worst bar Croatia - and was far worse than Sweden. I pointed out the flaws in the other two models which were not stress tested and unlikely to stand up to changing market conditions, ie higher interest rates. Didn't hear anything further from Timing Belt or Davy 🤔.

This was also covered previously - it's buyers and sellers that make the market. Existing home owners not looking to sell don't impact on market prices.

sean keyes from the currency predicting a 14% drop in prices this year , using the ESRI's own model. id be surprised if they dropped that much but interest rates look like they'll continue rising so i guess he might not be far off.

if materials dont fall then yeah we'll see a fall off in building alright. hard to know though gotta pray for no crazy oil/gas prices this year hopefully makes things a bit cheaper for everyone.