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

Can you read properly? It would not appear so given that is the second post in a row you have misinterpreted related to the same subject.

What type of independent, regulated third party should handle bids, how would that improve transparency, and how would it be any less prone to fake bids?

See, not only can I read what you posted earlier, I can ask you how handling bids that way would make the process better. Simples.

Presumably because all sellers would inflate the price they would accept, as they would fear having to accept an offer below what the market would pay. In effect, it would be a meaningless number as a seller could put a €1.5m price tag on a house knowing that in all probability the highest bid would be 1.2m, and they would then still accept the highest offer.

You didn’t understand my answer, all sellers would put their prices up, fearing they would have to accept a bid lower than market price. The market would stagnate as sellers would wait before incrementally lowering price, then accept a price lower than the initial advertised price. In effect you are handing control of the market over to sellers rather than allowing buyers to bid against each other.

No. It would help with price discovery which is a prerequisite for any efficient market.

Go to daft.ie now and list up houses in any area. Say you want to buy in mullingar and your budget is 300k. You'll see some houses with notional prices of 200k, 300k and 400k. How many of them are within your budget in reality? The answer is that you don't know.

If you are not going to sell for less than X, what difference will being forced to advertise at x rather than 75% of X make? Advertise at 125% of X if you want. Then you are just wasting your own time.

Under the system I proposed, there is no stagnation. When the asking is met, the sale is done. Currently you have no idea when it is done. The seller might list at 750k, really want 1m, it hits 1.1m and they decide there has been interest in it so they'll sit on it longer.

Yeah I don't care. Put a billion Euro as the listed price if you want. Good luck with getting an estate agent to advertise it for you though. If you put it too high then it won't sell. There is no price discovery under the current system. Go to daft, search for the first house in any area and come back to me and tell me what price it is currently making or what you would have to put on the table to buy it tomorrow

the system I proposed would cut out all this wasted time and expense of multiple people trying to bid on multiple houses for months. The buyer offering you your advertised might also be offering the advertised on another 5 properties - he just has no idea which one, if any, he might get accepted on. 4 of those bids will be withdrawn if he does get one.

It helps the seller too as you will see an actual view of the transact-able prices in your area at the time you are selling rather than a delayed PPR price a few months later.

Here is the first listing on daft. Can you please tell me what price I need to pay to secure this property? Thanks

The only silly thing is suggesting that an opaque bidding process offers more price discovery than a definite price the seller will accept and will have to accept. The analogy would be that you would claim that the general public would be better able to tell what the price a packet of jaffa cakes will cost them if shops stopped displaying actual prices and instead every shop auctioned off their jaffa cakes to customers advertising only a wishy washy guide price. With all due respect, that would be nonsense.

There are people right now bidding on houses, and sitting on the highest bid for maybe a few weeks who still don't know what the eventual price of the house will be when it is sold.

Ah ok. You can't tell me. That's fine. Point proven.

If we don't know the price, we can't know where the market is at. We can only really know what it was a few months ago.

https://www.rte.ie/news/business/2023/0810/1399050-ecb-is-on-back-foot-and-for-once-its-down-to-germany/

Is any of this any way probable or are RTE just stuffing an article with anyone they can find saying this for a headline?

Biggest danger to the Irish economy imo

Raising rates were done to cool economies and suppress inflation for obvious enough reasons

Our government and central banks implemented measures that reversed these effects such as shared ownership and relaxed mortgage lending and prevented the bubble from deflating in a controlled manner.

A cut in rates now will overheat the Irish economy and accelerate the car as the brick wall approaches

Our rates should be higher than the US never mind EU

But aren't borrowing limits in the UK closer to 4.5x the salary, so even at 4x we are still at the lower end. I would say in the US it might be higher than 4.5x.

US has non recourse mortgages and simple and quick foreclosure process. So there isn't the same need for centralised control.

Yeah I agree, but I think overall 3.5% LTI was fairly stringent and I don't believe the Central Bank did it to prevent the deflation of the property value as the previous poster mentioned. If you do 5 minutes of research, you will find that the Central bank were doing studies as far back as 2016 and 2018, it is just coincident that it happened during IR hikes.

Our Euro-area interest rate is still only 3.5%. Its 5.5% in the US currently, and 5.25% in the UK.

Euro area inflation is still running at 5.3% overall as of July, 10.8% for food. That 5.5% overall figure was being dragged down by cheaper oil and gas prices too which were at -6% in July, but which have gone into reverse in recent weeks. So the overall figure is going to be trending up again soon.

Plenty of Euro countries also still have extremely high overall inflation - Slovakia (10.2%), Croatia (8.1%) Lithuania (7.1%) etc.

I wouldn't be betting on the increases to stop yet.

The 4x LTI only applies to FHB. Otherwise, its still 3.5x with exemptions for a small portion of borrowers, so the average is somewhere in between.