Property Crash

[SÓC]

If we have the same reaction in Ireland, ie. repos then we are in trouble, big trouble.



Not as easy at all to reposses homes in Ireland, some lawyers have made their very health livings out of opposing repos on numerous grounds but I'd agree with the general point you make

[monutdfc]

Not as easy at all to reposses homes in Ireland, some lawyers have made their very health livings out of opposing repos on numerous grounds but I'd agree with the general point you make
plus the high street banks are very reluctant to repossess because of the bad publicity; . Repossession stats in Ireland are very very low - no more than double figures every year I think.

the sub-prime sector has no such qualms though so that might change

[Poor Student]

Just to add further fuel to this. The ERSI says the averge price paid for a house has dropped 4.7% in the last twelve months. October produced the 8th successive decline in house prices. http://www.rte.ie/business/2007/1123/house.html Another year like this and we'll have a near 10% drop in two years.

[OneRedArmy]

Just to add further fuel to this. The ERSI says the averge price paid for a house has dropped 4.7% in the last twelve months. October produced the 8th successive decline in house prices. http://www.rte.ie/business/2007/1123/house.html Another year like this and we'll have a near 10% drop in two years.Any chance we can please stop misquoting the PTSB/ESRI survey as being representative of house prices.

This index has been repeated rubbished (see earlier in thread) as it uses valuations rather than actual sale prices.

Actual prices falls are likely to be significantly higher as the ESRI index includes lots of properties with unrealistically high valuations that unsurprisingly haven't shifted and have no hope of shifting at the valuation price.

We are already over the 10% fall that you refer to. Well over in some areas.

Rant over.

[Poor Student]

I agree with you, ORA, but what else can we use? If the the ERSI is registering decreases it's at least an indication that prices are falling.

[pete]

I agree with you, ORA, but what else can we use? If the the ERSI is registering decreases it's at least an indication that prices are falling.

The only value of that report is when you compare with previous versions of it but debatable what use that is. That report shows a significant difference in property outside Dublin which probably makes sense as easier to travel an extra 10 miles (cheaper property) than it is in Dublin region.

[OneRedArmy]

I see one of the "leading" property firms has been running a fullpage ad in many papers over the last week stating that "there's never been a better time to buy"......

I'm not au fait with misleading advertising laws but this strikes me as being on the verge of being as such (not to mention in all probability being plain inaccurate).

Market consensus now appears to be sustained falls across the board through 2008, with recovery in 2009.
But why would you believe a body of opinion who have continued to be wrong throughout this year and many of whom are openly admitting they "underestimated the negative sentiment"? Particularly when the Economist and many other international publications have been warning about Ireland's bubble for years (along with a few notable Irish economists, McWilliams among them).

Given commodity prices appear to be on a steep upward trajectory with no sign of reducing, are we in danger of stagflation?

[pineapple stu]

Market consensus now appears to be sustained falls across the board through 2008, with recovery in 2009.

Out of interest, who's predicting recovery in 2009, and on what basis?

[OneRedArmy]

Out of interest, who's predicting recovery in 2009, and on what basis?Most of the usual suspects (bank and property company economists).

Tribune or Business Post (can't remember which) did a piece by 5 or 6 of the usual suspects yesterday.

Basis for recovery appeared to be relying on the following happening:
1) interest rate falls next year
2) drop in new housing stock means new demand from potential FTBs who are renting pushes prices up
3) rocketing rents lure Buy-to-Let investors back into the market

Personally I'm doubtful on one, and on two and three, I can't seem to reconcile the huge number of empty apartments in Dublin (per census and other studies) with the rocketing rents that apparently we are seeing.

Apparently developers are starting to rent unsold new apartments to help cashflow (Gasworks cited as an example).

[Poor Student]

I see the Indo, one of the main papers for talking up the market, don't even bother to do so anymore. For the last few weeks they've begun to print doom and gloom articles. See here: http://www.independent.ie/opinion/analysis/uncharted-seas-for-those-whove-known-only-boom-1254826.html

The "Ah sure, wait for the autumn selling season" and "Ah sure, wait until the spring 2008 season" have been replaced by admissions that the slump will last well into 2009 at least. A lot of papers were insisting that ECB rates will drop soon too, that talk has kind of faded. If you ask me there's at least another 0.25% rate increase coming in the next few months. The ECB's main task is to control inflation and it's not coming down. Trichet even admitted that at a recent ECB council meeting there was support for putting the rates up.

It would take a foolish person to argue against the property market being Donald Ducked for the foreseeable future.

[strangeirish]

Here's an example of how the media, specifically Fox News, continues to try and blow smoke up the publics butt with regard to real estate. Isn't it great to live in a society where you can say anything you want, and be a pundit for whoever will pay you (whether you believe in the position or not), and you will never be held accountable for what you said?

The way they laughed at Peter Schiff(one smart dude!) in both the 1/07 and 1/08 clips reminds me of how they laugh at Ron Paul. Discredit them by laughing -- makes you look cool, and Joe Public will take your side ('cause we know he's not gonna investigate the facts for himself).

Next time you hear someone on (Insert your favourite here) pumping up the stock market or housing market, remember this lesson.
sM7bcDu04os

[dahamsta]

I switched off when I saw the overlay saying "doesn't he look like a cross between" yadda yadda. This is supposed to be more credible than Fox News? Please.

I have no time for Fox News, but if the person that made that video wants intelligent people to watch it, they should drop that kind of childish idiocy.

adam

[strangeirish]

I switched off when I saw the overlay saying "doesn't he look like a cross between" yadda yadda. This is supposed to be more credible than Fox News? Please.
I have no time for Fox News, but if the person that made that video wants intelligent people to watch it, they should drop that kind of childish idiocy.

adam
:D Indeed, but I was just highlighting an underlying problem when it comes to the media and the US housing market.

[seanfhear]

can anyone advise on the viabillity of buyiny a residential property in ireland at the moment.iwould like to hear informed opinions please

[dahamsta]

Depends on what you're trying to achieve. As an investment, to rent, to live in? Where? What size? What budget have you? Etc.

[pete]

Informartive article here (http://www.finfacts.ie/biz10/irelandhouseprices.htm)

Highlights.


From November 2006 to 2007 prices fell 6% Nationwide (does not account for freebies included in prices)
Dublin 2005-2006 prices increased 16%
Dublin 2004-2005 prices increased 10%
Number of mortgages issued have reduced 25%

[strangeirish]

can anyone advise on the viabillity of buyiny a residential property in ireland at the moment.iwould like to hear informed opinions please
Patience, Grasshopper.

[finnpark]

can anyone advise on the viabillity of buyiny a residential property in ireland at the moment.iwould like to hear informed opinions please

At the moment, it is a very bad time to buy. Despite the fact that there is NO interest in 80% of residential properties most owners are refusing to reduce asking prices in the hope that the market recovers which is of course impossible.

The economy is in a state of emergency due to mis managemnt by our government members, external affairs not much better with the USA in a resession due to the various wars which helped fuel inflation over the last few years and basically things are bleak for employment.

Basically, don't buy anything for at least another 18 months. Your investment will be losing value by the day otherwise. :o

[OneRedArmy]

Informartive article here (http://www.finfacts.ie/biz10/irelandhouseprices.htm)

Highlights.

[LIST]
From November 2006 to 2007 prices fell 6% Nationwide (does not account for freebies included in prices)
No they didn't. Asking prices/valuations fell 6%. Which in a falling market is a woefully understated measure.

Sorry for banging on about the uselessness of the PTSB index, but what else would you expect a property lender to produce other than ridiculously overstated figures.

Likely drop is completion prices is more in the 10-15% space over 2007.

[sláinte101]

it must be noted how the commercial sector still has a major role to play in the sustainability and the stability of the residential market, aswel as the economy itself. Certain developments need to be as modern and regulated as possible to be on par with other major cities in the EU which will in turn help the economy to become less dependent on 'property' itself, thus creating an equilibrium between the market values and the demand/supply ratios in the future. This is long term reality ~ at best! IMO

[NeilMcD]

At the moment, it is a very bad time to buy. Despite the fact that there is NO interest in 80% of residential properties most owners are refusing to reduce asking prices in the hope that the market recovers which is of course impossible.

The economy is in a state of emergency due to mis managemnt by our government members, external affairs not much better with the USA in a resession due to the various wars which helped fuel inflation over the last few years and basically things are bleak for employment.

Basically, don't buy anything for at least another 18 months. Your investment will be losing value by the day otherwise. :o


Yeah I am holding off buying myself for the next 2 years as I am of the view that if I buy now my equity will just fade away by the day. Much better value to rent at the moment in my view.

[pete]

No they didn't. Asking prices/valuations fell 6%. Which in a falling market is a woefully understated measure.

Sorry for banging on about the uselessness of the PTSB index, but what else would you expect a property lender to produce other than ridiculously overstated figures.

Likely drop is completion prices is more in the 10-15% space over 2007.

I knew there was some report like that but could not remember which one. The fact the ESRI part of this fooled me. Is there any independent survey that record sale prices?

Interestingly some Irish guy who sits on EU Central Bank board (can't find link) said today that 6% fall was not accurate & closer to 15%.

Still not in crash mode. I think would need to see addition of people unable to offload property & does not seem enough people desperate enough yet. I would think this quiet time for home sales so might be more accurate come March-May? I feel would need prolonged recession to start this freefall.

[GavinZac]

Free fall away, lads, we'll probably be in the market this summer :)

[dahamsta]

I'm holding off myself for another year, but telling the OP not to buy is the wrong answer imho. Everyone has different circumstances; some people have to buy whether they like it or not. And you can't lose in a well thought-out long-term property buy.

adam

[GavinZac]

I don't know if this is the right thread for it but heard ads on the radio the other day advertising property in India. Apparently it rose as much as 70% last year and Meryll Lynch predict that will continue for the best part of a decade. Too good to be true? Surely if that was the case, anybody even considering investing in the irish property market (for profit rather than for a home) would have their heads turned?

[pete]

Any else noticed those adverts for mortgage agencies "no proof of income, bad credit history, let us get you a mortgage..."

If in those circumstances maybe should you really be taking out what is basically a 30-40 year loan at rates above high street banks? :rolleyes:

If location is important & have permanent job for life as will to see home value fall in the near future then could be ok buying a home. As long as interest rates don't rise you would be ok.

[OneRedArmy]

Concerted effort in most of the papers over the last week to portray the property downturn as being effectively over.

Lots of the usual suspects being rolled out to recount stories of how new development launches are being overrun with people and selling out on the first day.

In actual fact the only reason the new supply is shifting is that the banks are forcing builders and developers to sell, regardless of price(many with c20% price drops from previous phases...)., to reduce their exposure.

The second hand market appears to still be dead, interesting whether this changes as we move into spring. The new market will always drop in price quicker as developers can't sit on stock forever whereas movers can sit almost indefinitely, which is what has happened over the last 18 months.

Personally I wouldn't touch the market yet given the wider economic concerns. Although at least interest rate increases don't seem as likely (people still woefully optimistic about ECB cutting rates though).

[dahamsta]

Rent prices seem to be going up again. I'm seeing silly money prices for 3 beds in Cork county, in the same region we were seeing 4 beds just a month or two ago. €900+ for a 3 bed is just ridiculous like.

adam

[Lionel Ritchie]

Rent prices seem to be going up again. I'm seeing silly money prices for 3 beds in Cork county, in the same region we were seeing 4 beds just a month or two ago. €900+ for a 3 bed is just ridiculous like.

adam

That's mad alright. My mortgage isn't much higher than that.

I'd say the Ritchies will be on the move in 2008. Houses that were out of our grasp less than a year ago (on asking price alone) are now starting to become achieveable. Wherever we go we'll likely be there for a decade or two so I'm not too worried about negative equity.

The house we've been in these last five years, in a local authority area, has (had more like) increased about 60% in value in that period but even if that all fell away (which it hardly will) between now and us leaving we'd have lived rent free for five years.

[dahamsta]

The Dahamstas are waiting another year, both because we feel it's right to wait, and because we have to whether we like it or not. :)

Moving again in two weeks time, to a house in the (rural) estate we're like to buy in next year. 5th move in 4 years. I reckon the next one'll have wheels on!

adam

[OneRedArmy]

Rent prices seem to be going up again. I'm seeing silly money prices for 3 beds in Cork county, in the same region we were seeing 4 beds just a month or two ago. €900+ for a 3 bed is just ridiculous like.

adamI can grasp the fundamentals of everything else in the property market but I really don't understand rent increases, given the number of empty properties around the country.

Dublin has risen very strongly in the last 18 months. I have a rent review next month.:(

[Reality Bites]

The trend Continues, Manor Park dropped prices in their Hansfield Ongar Development by up to 80,000 for terraced house styles and Park Developments dropped there price by 100,000 for Leopardstown development, this follows on from the well documented drop by Capel Developments for phase 2 launch of Apartment scheme in Ashtown leaving very disgruntled phase 1 buyers with massive negative equity, expect other big guns to follow suit in the coming month the traditional spring launch will I suspect be another damp squib!!

[Poor Student]

I can grasp the fundamentals of everything else in the property market but I really don't understand rent increases, given the number of empty properties around the country.

Dublin has risen very strongly in the last 18 months. I have a rent review next month.:(

They're going to have to halt or reduce soon. With banks putting the squeeze on developers there's more and more properties going up for rent.

[monutdfc]

Looks like it has stared:


Cost of rent stops rising as supply doubles

THE number of rental properties available across the country has almost doubled in just one year.

It highlights the increasing pressure on the property market and signals how some are struggling to service their mortgage debts.

The survey, by property website Daft.ie, shows that it has directly resulted in a stagnation of rental prices for the first time in four years. The survey of rents in the last quarter of 2007 shows that the average rent nationwide remains unchanged at €1,388.

http://www.independent.ie/business/irish/cost-of-rent-stops-rising-as-supply-doubles-1288359.html

[dahamsta]

Heard on the radio earlier that the number of mortgages is down 22%, value of mortgages down 15%.

adam

[onceahoop]

The Dahamstas are waiting another year, both because we feel it's right to wait, and because we have to whether we like it or not. :)

Moving again in two weeks time, to a house in the (rural) estate we're like to buy in next year. 5th move in 4 years. I reckon the next one'll have wheels on!

adam

Moved once and won't be doing it again. The most stressfull thing I've ever been through and believe me, I've been through some.

Mind you, if your renting you probably don't have a lot to bring with you.

[dahamsta]

We have lots of crap and it increases every time, but not a lot of big furniture so it's not too bad. Plus I drive a van, and that makes things a lot easier.

I've allowed for two more moves, one to our first house and a second to the house we'll build. I think that's quite enough for anyone!

adam

[Paddyfield]

They're going to have to halt or reduce soon. With banks putting the squeeze on developers there's more and more properties going up for rent.

Rents in central locations will always be strong. One bedroom apartments without parking on Cork Street, Dublin 8 are €1,200.
Two bedroom Galway city centre apartments (without parking) can also fetch €1,200. Only 3 or 4 years ago, the same type of apartment in Galway would probably achieve €850. Madness.

However, in the outskirts of Galway like Knocknacarra (about 4km from city centre/2km from Salthill) there are lots of properties for sale and rent is reasonable. On www.daft.ie , you can get a large 2 bed apartment with parking for €850.

It's all relative to location.

[dahamsta]

What has location got to do with the general raising of rental prices we're talking about?

[Paddyfield]

What has location got to do with the general raising of rental prices we're talking about?

Rents are increasing in locations that are much sought after.
Rents are not increasing in areas that are not greatly sought after.

[dahamsta]

Rents are increasing in locations that are much sought after.
Rents are not increasing in areas that are not greatly sought after.Setting aside the fact that you're quoting from "Economics 101: Supply and Demand" for a moment, if you flick back through the thread you'll find the post where I started this discussion (http://foot.ie/showthread.php?p=875762#post875762) with a comment on rental rates for 3 beds in county Cork. I'd hardly call either the area or the house type particularly sought after or in short supply. Rental rates are going up across the board, although whether people are actually paying the ludicrous rates landords are asking is quite another matter. They'd be mad to, and I hope they don't. The people that are panicking into putting their second and third and nth houses onto the letting market deserve exactly what they're getting.

adam

[OneRedArmy]

Rents are increasing in locations that are much sought after.
Rents are not increasing in areas that are not greatly sought after.No.
They.
Aren't.

[Reality Bites]

Correct rents are gone to pot, before x-mas it was easy to rent out a room now its become very difficult with little interest! mainly due I am told to the fact that developers and investor have let out properties which hitherto were supposed to be for sale!!

[NeilMcD]

Correct rents are gone to pot, before x-mas it was easy to rent out a room now its become very difficult with little interest! mainly due I am told to the fact that developers and investor have let out properties which hitherto were supposed to be for sale!!

Well thats good to hear hopefully they will drop the prices. I think the nearer we get to a place where people see property as their home rather than as an investment we will be a much better society.

[strangeirish]

The sub-prime mess explained, American style. (http://docs.google.com/TeamPresent?docid=ddp4zq7n_0cdjsr4fn&skipauth=true)

[Reality Bites]

133 Units sold in Ongar/Hansfield by Manor Park the weekend before last, 3 bed semi-d's for 299,000!! unheard of in 2006!!! the cavaet the being the quality of finish is ****poor and I hope I don't offend here but Ongar is a wart on the Arse-end of West Dublin a testament to poor planning and urban sprawl perpetuated by greedy Developers

[John83]

The sub-prime mess explained, American style. (http://docs.google.com/TeamPresent?docid=ddp4zq7n_0cdjsr4fn&skipauth=true)
There's a very good explanation of it by John Bird and John Fortune (http://www.youtube.com/watch?v=mzJmTCYmo9g).

[dahamsta]

Quality is definitely dropping alright, developers and speculative buyers are pushing them out the door in whatever state they're in just to get them sold or let.

adam

[OneRedArmy]

The banks are putting the squeeze on builders and developers to reduce stock quickly, so no surprises that prices are dropping and unfortunately that corners are being cut.

[Reality Bites]

Hooke McDonald announced that there would be a shortage of houses in the need future because Builders had ceased development! mmm EA coming out with this let me think is there a hidden agenda in sight!!!:rolleyes: