2Pack will call the bottom now!


As I’ve repeated time and again, I see strong parallels with the UK market at this juncture.

Initial collapse here was staved off by lower rates, bank forebearance and courts slow to repossess.
This was backed up by a incessant, directed and almost uninversal media drumbeat of ‘its not too bad’.
Heavily biased reporting of house price indices also contributed.

I noticed this finally getting under way in Ireland in the last year or so.
The straw that broke the camels back, for me, was the non-repossession of underwater and in arrears BTL’ers.
More than that, the banks willingness to negotiate terms with them left me incredulous.

That takes extra supply off the market. No forced sellers means no pit below.

The key thing here isnt ‘market fundamentals’ or ‘investment yield’ its what people believe.
90% of the population get their information from the Indo and RTE; whatever they say is happening, is whats happening.

Sometimes the Pin can be a bit *over-*intelligent and ignore the human factor in all of this.
Remember the boom was ramped by RTE/Indo readers where any thinking person would have stood back.
Clearly the impetus was with the non-thinkers.
I think the same applies now.


Your point got me thinking…

…that doesnt apply to buyers. I think anyone who is a buyer, and is under 50, will be fishing around a website such as this for info.

However it doesnt apply to sellers.

And the psychology of holding an asset that is falling in value is that as soon as their an uptick of any sort, there is an attraction to selling at that time.


Nah, I’m not buying that. The mainstream media have attempted to put a bottom on house prices all the way down, with their upbeat prognostications, rolling out shills to tell us we are at the bottom and jumping on every tidbit that might be a positive for a floor on the housing market. Perhaps we are at the bottom now, though I don’t believe so myself, but you can’t say that mainstream media spin is a major factor to that.


Latent supply. It’s out there and it will hit the market when we tick 5 or 10 percent higher.
It’s almost bizarre to think that a speculative bubble can collapse 60% then just stop and turn around; the dead-cat phenomenon exists because it is as much a part of the recovery as the euphoria is part of the boom. The suggestion that apartments will keep sliding but houses won’t is also unlikely; there is a “spread” between a good two bedroom apartment in, say, Sandymount and a three bed house in same, that spread can expand and contract but it has a fundamental base and if the apartment keeps dropping then it will drag the house with it.


What about latent demand?

Has to be out there somewhere, but how can it be quantified? And now that an alleged bottom is here (in part) will it translate into an actual purchase? Your thoughts please…


Fair point, I don’t doubt there’s latent demand and quantifying it will be difficult. Of course such demand requires access to credit to partake en masse and, as we have seen, that is far from forthcoming. Perhaps an indication would be sustained growth in mortgage approvals, which are at decade long lows today (another indication that this is not a “holdable” bottom).


Same here, the media have been calling the bottom quite loudly in Spring every year in since 2007. However the difference this time is that for sale inventory on both Daft and Myhome has been declining continuously in Dublin over the past year. That suggests that a stabilisation of prices is on the cards, for Dublin anyway. Same thing happened with rents.


With respect, I think youre reading this wrong.

“have attempted to put a bottom on house prices all the way down, with their upbeat prognostications” - go out into the street and ask someone when was the bottom reported as coming.
I guarantee you 90% of them will say ‘recently’ or ‘soon’; whatever they’ve read recently.
Nobody will remember the Indo piece from July 2010 or Feb 2011. Nobody.

The vast majority of people live in a bubble that extends two weeks forward and backwards.
Thats it. Thats history.

Knowledge of this gives people, particularily the media, power.
Who remembers the weather forecast from two weeks ago let alone challenges the piece?
guardian.co.uk/environment/g … han-powell

To paraphrase PT Barnum “You’ll never go broke underestimating the intelligence of the general public”.


I think it’s worth reminding folk the areas in question are SCD and Galway city.

One is this oasis of comfort and dare i say “snobbiness” :open_mouth: .
The other being Galway City was insane on the way up so perhaps won’t have so far to go on the way down.
Galway people haven’t a clue the extent this depression is having on the rest of the country.
Not only were there not massive job losses but most IDA backed announcements in the past 2 years have been located in Galway city.

It stands to reason that supply will affect demand much earlier in both areas.
It’s a different story for much of the rest of the country yet.

And i’m buying fuck all until i get access to a price register and don’t mind waiting for it to happen.
An estate agent screwing me out of an extra 5% is the same as me missing the bottom by 3 years in my mind.


I can only hope that doesn’t hold true when it comes to the next election.


We are less than 90 days to the register, and it will launch with 32 months of data.


We have both pent-up demand and pent-up supply…only in Ireland… :laughing:


Well you might laugh but thats what Nama has done to us…the market has come to a halt, where volumes are concerned.


There is a definite trend in the slowing of the collapse of house prices in urban areas possibly due to substantial price falls in the last year.
The reference price has fallen and will inevitably result in some people jumping into property as we are still a property loving nation…
Supply will be constrained by the government sanctioned non recourse mortgages for PPR and to some extent BTL

Where it goes from here is impossible to predict
House prices are more realistic now than at anytime in the previous 10-15 years
Prices now are around fair value in some areas
Usually in a bust prices go well below fair values

With unemployment in Dublin @ 13% and further austerity budgets on the way, some urban areas will sustain continued falls >20%

As a complete guess i imagine that Urban areas will fall another 15%
Some areas of SCD may not see any further falls

All assuming the Euro muddles through


Ok you nailed your colours, but can you segment SCD a bit more?
Shall all (house) boats be lifted, starter home’s, mover uppers, doer uppers, upmarket trophies?


Its a hard one to call. The market to a large extent is grossly dysfunctional - AIB, PTSB and BOI between them effectively control a large chunk of the market and the anecdotal evidence would suggest that they are not moving on bad loans but more so using their bailout funds to ward off the evil day, kick the can down the road and hope/pray that prices recover and new lenders come into the market to offload to. Add to this NAMA who also control a large portion of the market though I think it is more apts that they control and are holding from the market. It is also worth noting that our economy is being subvented directly to the tune €18bn per annum not to mention the indirect funding through the ECB etc. what happens when this game is eventually brought to a halt. It is undeniable that there is a demand for “housing” as the standard build during the boom was a 2 bed 700-800sq ft box that has little use as a family home. The question is, in a scenario where lending is non existant and our standard of living is being subsidised by heavy borrowing from the IMF/EU, what is a fair price for a house. Debt undeniably had a large part to play in house prices, however I think it will be a while before we live through another debt binge.


I think you’ve nailed it.

I still don’t understand how mortgage volumes can be down 93% from peak, and absolute amounts of mortgage credit down 96%, and yet our crash be stopping at -55% or whatever it is now. Nor how Dublin can be at equilibrium when there are probably fewer than 1,000 mortgages a month being given out there. Nor indeed why stable rents are not seen as no more than an inevitable consequence of the lack of purchases happening, and not as the result of an equilibrium in the fundamentals.

We also know that there are some 10’s of thousands of latent units out there between:

  • Currently vacant properties (for whatever reason).
  • NAMA’s stock (and there have been recent suggestions they might hold more in Dublin than they’ve let on).
  • Unrepo’d properties that are underwater, BTL and PPR. And even if these properties aren’t repo’d, they need to be paid for by the rest of us, which surely is removing the exact same amount of money from the system as a repo/firesale regime would. A pretty zero-sum situation I’d have thought. Even EZ write-offs would not change this as the clearing price of any given property would be at the level of the unforgiven amount, if I can put it that way.

In order for all the foregoing not to matter, you need to believe it can all be absorbed/explained away by sustainable demand, latent and actual. But immediately I see problems with this logic: for example, how can currently buoyant rents be sustained if we’re to believe there’s a tsunami of purchasers out there? How could both happen at the same time, and whither yields? Another problem: It is 100% certain that this army of buyers will have less disposable income in January 2013 than June 2012. So to believe we’re at the bottom is to believe that loss to the system will have no aggregate effect.

I’m very open to persuasion, but I can’t square all of that. I still think we’re in a state of profound paralysis and in my gut the morkesh still feels terribly broken.


If the consensus is to agree with 2Pack what will should the Property Pin be renamed as - the Property Puff?


You want something extra to hold on to don’t you. I can tell. :slight_smile:

I further predict that the place to Watch is Sallynoggin not Sandymount.As goes the Noggin goes the Nation! g’WAAAn the Noggin! 8)

Then Dundrum Rathfarnham Knocklyon sorts of areas.

Finally redbrickiana! All in fairly short order after each other though.


There is no doubt about it, there is a big push by the VI’s ( this is their D-Day June 1944 ). They know they need as many suckers to bite before the next budget and the implementation of everything announced thus far - HHC / Water Metering etc.

The next budget will have no low hanging fruit, and big cuts along with more taxes have to come.

The end result is less take home pay and more out goings on that reduced take home pay which can only drive prices down further. It’s nice to know the people we elect to the highest offices in the land put the peoples interests first.

SCD is holding up best as that’s where a lot of the borrowed deficit money finds it’s home.