This is the thread kids.
Fire at will…
This is the thread kids.
Fire at will…
I am sure that most of the posters on this site are familiar with the above site but just in case here it is again.
I think a shutdown of supply is a way of dealing with an armageddon type situation developing. It won’t be effective against prices falling 10-15%, some of which has happened already going on some of your posts on cache files for Daft/My home, and the Daft report.
Another point that comes up when people have speculated about a crash before, is that people will use it as an opportunity to move closer to the city centre. So property on the periphery really suffers the most. This may be going on already. Drogheda has over 250 properties for sale on Daft and Dundalk has over 110. These are big towns but imagine trying to sell your 3 bed semi D when another 249 punters are trying the same thing around town…
Arfur - yer still going on about restricting supply!
Considering the property market in splendid isolation yes, restricting supply would keep prices high.
The *only *way to restrict supply is for a massive reduction in the number of units we are building. We would have to *halve *this years production just to tread water. We’re talking about laying off tens and tens of thousands of construction workers. This will push the entire economy into recession and cause a property crash anyway!
Actually, that’s going to happen anyway. There is no way we will build anywhere near another 90K units next year. *Maybe *70K. But that’s still a *lot *of brickies, chippies, sparks, plasterers, kitchen fitters, roofers, glaziers etc. etc. etc.
Unless you imagine the builders will keep all these people on the books with nothing for them to do and keep paying them…
They will have to lay off thousands,that will cause a “shock” in it’s self and only make things worse.Even if you could get some of the big boys to slowdown and their shareholders would go berserk the little lads will keep building because they have too !.
Drogheda from what i can see has a long way to fall,i’ve seen very few price drops so far but as you say inventory is seriously building up there.
I don’t think the EA’s have realised the new reality yet,the prices on the southside of the town are just crazy especially for the newbuilds, they don’t seem to realise there competing with swords and balbriggan.Even though they definitely have been restricting supply up there,they can’t operate in isolation to the rest of the East Coast.
About that central bank report on overvaluation that was out the other day.
It was mentioned in paper(can’t remember which one) that the definition of affordability by the CB in that report was something like a 40yr mortgage with 40% outgoings on that mortgage at present interest rates which is like an abnormal extreme in generousity terms!
It said only half of all households would be able to afford a house in todays climate!
Plus a ‘cautious’ 10% of householders would be in difficulty in the event of a hard landing whether thats realistic?
surely a rise or fall in prices only becomes relevant if a householder intends to sell?
The most important single statistic on the DAFT report is that asking prices overall have continued to rise over the last four months. If the bubble has burst would they not be falling?
Sunday Business Post, 12th November: “Bargains in a buyersâ€™ market”
Accodring to bloke from DAFT on radio the other day Dublin leads the country by 6 months or so, he said he would expect to see the country follow. If by then Dublin is still falling then the figures as a whole will be shown to be falling.
As an aside a guy in the pup told me last night that the boom in Ireland is only getting started because we are the best nation on earth, a nation of entrepreneurs, in fact his mate started with nothing only 7 years ago and now has over a billion in property.
Naturally I will be switching to Bull immediately.
EDIT: Realised the above shouldn’t be an aside as it is the central theme of the thread, so there still is a fair bit of Bullishness sentiment outhere.
This is one of my primary fears regarding sentiment.
People in this country actually believe that buying and selling houses is in itself a form of entrepreneurial endeavour. A legitimate, bona fide, vibrant, positive form of economic activity. As though buying and seliing property actually produces wealth or creates something.
Of course, it doesn’t. Nobody in this bloody country is actually MAKING anything. Who is producing the wealth? Who is making the stuff that we sell to pay for the houses we are buying?
People passing houses back and forth to one another is no substitute for making stuff. I wish people would understand that, but it seems to me they don’t.
I love the quote from the Sherry Fitz chief,
Michael Grehan, managing director of the Sherry FitzGerald Group, believes this is the best time to buy in five years.
What a liar! you could buy for half the price 5 years ago!
Get with the new era, you’ve been listening to your grandparents and their advice is so 20th century, In the Ireland of celtic tiger II, debt is the new wealth, prudence is foolishness, saving is poverty and excess consumption is your civil right.
US firms were also responsible for 87% of our exports in 2005.
** The free lunch has yet to be invented - the tipping point for the Irish economy**
finfacts.com/irelandbusiness … 6332.shtml
I think the effect of recent media coverage will be to make potential first time buyers a bit more cautious about dipping their toes in the water. For a real change in sentiment though, I think we’ll need a Herald or Irish Times front page which literally spells out “Housing prices likely to fall in 2007”. For a “let’s wait and see how prices go, even if it means renting for a while” mentality to take hold, the broader public has to begin to share the feeling on this thread - and the AAM one - that prices could actually go down.
And then, exacerbated by more interest rate hikes, over-supply, and tighter bank lending, the wheels will properly come off.
It’s very interesting that even the VI’s like McArdle are now calling for restricted supply; it shows they think other options have run out, and, effectively, the unemployment which will be provoked by cutting back construction is the lesser evil in the long run.
What I find astonishing is the failure by commentators to make the connection between private sector credit at 205% of GDP (world record)and their frequent espousal’s that we are now a very wealthy country. It doesnt take a vast leap of reasoning to make a connection between our manifest conspicuous consumption and our crippling indebtedness. But facing up to the reality that the whole edifice is built on the shakiest of foundations is possibly too painful an exercise for some.
They dare not, the mythical soft landing mantra is their comfort blanket that helps maintain the illusion, they are just like a child, when the lights in the bedroom are turned off, afraid to look under the bed in case the boogeyman is there and they might release him.
Its not just a river in Egypt…
Good to see the thread back on track
Im a bear because with interest rate rises reducing the amount that people can borrow where is the scope for higher prices? 99 year morgages
If the ecb raises rates to keep inflation under 2% what should irish interest rates be when inflation was 4.5%
in australia interest rates are 6.25% giving a variable rate of 8.07% our politations say interest rates are historcally low and we should not have borrowed so much when rates were low. peoples homes are been repossesed and sold by the banks futher driving down prices.mate its not funny and our bubble was not as big as yours not by a long shot.
The CB say 10% which is a large enough figure in itself to upset the market.
Householders who bought recently(<2yrs) with jumbo mortgages who are crippled by rising interest rates would be those who would be forced to sell to get themselves out of debt.
The Daft report was Q3(July-Sept) and it reported STALLED not rising prices.
Q4 report will be the one which could publicise a decline in prices to upset the mentality that ‘prices always go up’