Property Crash

**pete** · 16/04/2007, 9:42 PM

Watched the second half of "Future Shock: Property Crash" tonight on RTE1.

They might have a point about a property crash but the last 10 minutes were hilarious stuff with a future property crash type scenario done in a 'end of the world' style documentary with suitable gloomy backing track.

RTE should stick to Prime Time Current Affairs format & drop the amateur dramatics.

**Jamjar** · 16/04/2007, 10:36 PM

Originally Posted by pete

Watched the second half of "Future Shock: Property Crash" tonight on RTE1.

They might have a point about a property crash but the last 10 minutes were hilarious stuff with a future property crash type scenario done in a 'end of the world' style documentary with suitable gloomy backing track.

RTE should stick to Prime Time Current Affairs format & drop the amateur dramatics.

Saw the first few minutes of it....but got bored with the usual economist b.s. Soft landing, hard landing, the economy is going to crash, the economy isn't going to crash. Every second one contradicting the other. This is easy television for RTE, just mention the words 'housing crisis' in the advertising and they're guaranteed good ratings. Were celebrity economists George Lee and David McWilliams on it ?

**Dotsy** · 17/04/2007, 7:47 AM

Unless the prime reason for buying you house is as an investment then don't worry about it. If you can continue to pay the mortgage you don't have to move.

Terrible program which didn't come up with anything we haven't already heard many times before.

**BohsPartisan** · 17/04/2007, 7:59 AM

Originally Posted by Dotsy

Unless the prime reason for buying you house is as an investment then don't worry about it. If you can continue to pay the mortgage you don't have to move.

Its not that simple. If there is a property crash it will effect the economy which will effect wages and employment/unemployment. The Celtic Tiger has only been sustained this long because of the Property bubble. We've already seen the latest partnership deal leaving wages trailing behind inflation. This trend will get worse and people will have massive mortgages but no money to pay them. There will be widespread repossesion. This may sound dramatic but it has started already. Its just being kept hush hush so they don't scare people out of the market. What happens is, houses are repossesed and the bank becomes the former owner's landlord, they continue living there but paying rent.

Originally Posted by jamjar

got bored with the usual economist b.s. Soft landing, hard landing, the economy is going to crash, the economy isn't going to crash.

Was it Harry Truman who asked could anyone find him an economist with one hand?

**Poor Student** · 17/04/2007, 10:04 AM

Originally Posted by BohsPartisan

This may sound dramatic but it has started already. Its just being kept hush hush so they don't scare people out of the market. What happens is, houses are repossesed and the bank becomes the former owner's landlord, they continue living there but paying rent.

Around the start of the year the Indo reported that repossessions were up by a huge percentage and house viewing was down by a huge amount too. I think recently house price outside Dublin have experienced a minute drop and prices in Dublin are basically staying still. This quarter is supposed to be the real gauge of the market as it's traditionally when you see the biggest increases.

**pete** · 17/04/2007, 1:37 PM

A lot of people in our office watched it so I expect the ratings will be high.

As mentioned above as long as a house is a home & assuming you keep your job (i.e. no need to sell) & can keep making mortgage repayments then even something such as a 30% 'crash' should not be the disaster RTE were making out. Of course investors are in different situation but they probably made good money already so no harm them losing some.

I agree that the economy heavily invested in the construction industry. A lot of this is infrastructure which is vital for the future competitiveness of the state.

The last 10 mins was like bad BBC tsunami dram documentary.

**Bald Student** · 17/04/2007, 2:00 PM

Originally Posted by Poor Student

I think recently house price outside Dublin have experienced a minute drop and prices in Dublin are basically staying still.

I don't think prices can stay still for too long. A lot of people have bought second and third houses and are paying 5% interest or so on the presumption that the house will rise in value by more than this. If prices don't keep rising these people will sell and they'll drop quickly.

**Poor Student** · 17/04/2007, 2:04 PM

Of course, was it Haughey or Reynolds who said "Let's not talk ourselves into a recession"? All the media coverage and negative speculation will compound public pessimism and will contribute to dropping prices and a downturn in consumer spending.

**drummerboy** · 17/04/2007, 3:25 PM

Originally Posted by Poor Student

Of course, was it Haughey or Reynolds who said "Let's not talk ourselves into a recession"? All the media coverage and negative speculation will compound public pessimism and will contribute to dropping prices and a downturn in consumer spending.

Agree with you there. These guys will do anything to prove themselves right. McWilliams has been predicting doom and gloom for about 5 years now maybe longer. There will be a downturn but hopefully a very gradual one.

**pete** · 17/04/2007, 6:32 PM

A hint of gloom will almost guarantee the re-election of FF/PD coalition. Just watch the next opinion poll...

**BohsPartisan** · 18/04/2007, 8:20 AM

I think the incompetance of FG/Lab will do that regardless.

**Dr.Nightdub** · 18/04/2007, 12:42 PM

One of the lads in work was saying at lunch earlier that his niece and a friend of hers had pooled their savings, put down a deposit on a house in Adamstown in January but then changed their minds during the cooling-off period. Yesterday, they got a call from the estate agent to see would they re-consider if the price was €10k lower. €10k mightn't sound like much but it's a sign of the trend - on a €400k house, it's a 2.5% drop in the asking price.

**Poor Student** · 18/04/2007, 12:50 PM

There was an article I read recently in the Times or the Indo that said that developers are articifically sustaining prices by throwing in "free" furniture, plasma screen tvs etc. or paying part of your mortgage. Anyone hear anything about that kind of stuff?

**Dr.Nightdub** · 18/04/2007, 12:54 PM

Originally Posted by Poor Student

There was an article I read recently in the Times or the Indo that said that developers are articifically sustaining prices by throwing in "free" furniture, plasma screen tvs etc. or paying part of your mortgage. Anyone hear anything about that kind of stuff?

Saw something to that effect in either last Saturday's Irish Times or the previous Sunday's Tribune.

**pete** · 18/04/2007, 1:00 PM

I remember in late part of 2001 the Developers in my apartment complex had to offer reductions to try to sell the last 20-30 units but they decided to keep them & rent out instead. Property has its slumps but need no crash in Ireland yet.

**BohsPartisan** · 18/04/2007, 1:17 PM

Don't know if any of you have been on here, lots of opinion but also great for facts and figures.
http://www.thepropertypin.com/

**cullenswood** · 18/04/2007, 1:45 PM

Originally Posted by Poor Student

There was an article I read recently in the Times or the Indo that said that developers are articifically sustaining prices by throwing in "free" furniture, plasma screen tvs etc. or paying part of your mortgage. Anyone hear anything about that kind of stuff?

In fairness, they have been doing that type of thing for a while. I bought my house in 2004 and got a free fridge/freezer, cooker and dishwasher thrown in if I paid my deposit on time

**pete** · 18/04/2007, 6:20 PM

Originally Posted by cullenswood

In fairness, they have been doing that type of thing for a while. I bought my house in 2004 and got a free fridge/freezer, cooker and dishwasher thrown in if I paid my deposit on time

Developers generally need to sell units asap as they will need the money to pay for the next project & so on. I don't think you can call white goods as free when you paying hundreds of thousands of euro on a house. You can be sure developer is getting very good deal if they buy 200 fridges, cookers etc...

**anto1208** · 19/04/2007, 9:40 AM

I think the free kitchen fridge etc is because of the amount of new estates rather than a property crash , if you have 5 different houses in 5 different estates all costing the same then you will take the one that gives you a free kitchen .

My house 2 years ago had a free kitchen and fireplace some painting etc this is nothing new its just being picked apon by experts to suit there arguement.

**Macy** · 23/04/2007, 8:23 AM

Originally Posted by drummerboy

Agree with you there. These guys will do anything to prove themselves right. McWilliams has been predicting doom and gloom for about 5 years now maybe longer. There will be a downturn but hopefully a very gradual one.

There is certainly an element of self fulfilling prophecy about it, however, like you said yourself some economists have been predicting this for 5 yearsm why would they have an impact now?

McDowell starting off the great big stamp duty auction more the immediate catalyst in December (Reacting to an alleged self serving Sindo campaign at that), combined with relatively high tech jobs going in the New Year. The fact that the Government has allowed a situation to develop that we're so dependent on house construction hasn't exactly helped - as soon as doubt is in the market it would always have a proportionally higher effect.