Goodbodys - House prices will drop 8 percent in 2008

A new report from Goodbody Stockbrokers says house prices will fall by 8% next year after a 5% decline this year.

Its economist Dermot O’Leary has also produced the lowest forecast yet for economic growth for 2008. He says gross domestic product will expand by just 2.5% next year after a 4.9% rate this year.

For any sellers still in denial out there , I think this is a sign to take the money and run., things aren’t getting better anytime soon.

Alan Ahearn predicted 0% did he not!

Thats a huge change from the start of year predictions

The first to break ranks from the herd.

Expect sell notes on GB for Irish Banks and construction.

Stockbrokers’ economists are always negative about property. They are, after all, in the business of selling a competing investment.

Who knows, this prediction may turn out to be right, but it would be a mistake to think Goodbodys and other stockbrokers are completely objective and disinterested observers.

From the host of Big Brothers Little Brother to an ecomonist!

The first statement is demonstrable wrong.

The second betrays a lack of knowledge. Goodbody’s make loads of money from selling equities. BoI, AIB, Kingspan, etc. They can’t put a credible spin to clients on why they should buy.

Worse, it looks bad for the Irish market generally which makes Irish equities a harder sell.

This is in fact a very ballsy call from an equity house. I know, I have direct persnoal experience of the exact scenario, only c. 20 years earlier.

This isn’t exactly good news for the ISEQ either.

Clikc the 1 year mark, it is most revealing, look ath the ISEQ as it diverges downward on its own steam in comparison to other Stock MArkets … TMC,%5EDJI

I don’t agree with these comments at all. If anything the brokers talk up the economy, and you can’t talk up Ireland without talking up property.

Also, Goodbody downgraded the building stock

Also, can we change the title and give Goodbody’s some credit for their call.

Personally I feel that this is a major turning point. I’ve always advocated that we as Irish are slaves to sentiment, now the cute hoor syndrome will be people trying to pay less than others instead of trying to get onto the Ladder (Ladder-what a laugh), which will have a huge effect.
Talk it up talk it down. Now it’s not just a gang of nuts :wink: on a website, it’s Goodbodys. Welcome to the mainstream.

I could have been clearer. What I meant was stockbrokers are always negative about property investment by comparison with investment in equities, or at least that’s been my experience. I didn’t mean that stockbrokers are invariably predicting falls in property prices. The main point I made is an indisputable fact, namely that stockbrokers have a vested interest in people putting money into stocks as opposed to property, and their predictions have to be weighed accordingly.

I hear on the lunchtime news IIB are forecasting an increase in house prices for 2008. Obviously, they also have a vested interest, but both they and Goodbody’s can’t be right.

On the lunchtime radio news report covering this, they worded it even more negatively by saying “House prices to drop 13%” which is overall obviously, but shows that the spin is negative in reporting now. They also said it’s proof that the hoped-for soft landing isn’t going to happen

Goodbody say says there is a whole year’s supply of unsold houses in Ireland :open_mouth: , which bodes very badly for the construction industry. They say that changes in stamp duty are required to reverse the downward trend. :unamused:

They were screaming it off the headlines on the lunchtime news. Its all over now bar the shouting.

Spot on. This is a major event for the residential property market, the first time that I can remember that a mainstream economist radically differs from the property industry economists.

And if inflation is 4% this year and next then its more like 20%.

Anybody buying now should benchmark against 2003 prices and go no higher.

2001 here we come??

Now, where is that bloke with two gaffs?

Jebus, the IAVI are going to have to open that war chest and start taking out some more one or two page spreads.

Its like trying to catch a falling knife, the bottom is years away yet.

2001 prices is an ambitious target to get back in at, but not impossible either.

Exactly. Expect to have this report rejected en mass by the Estate agents.

“Reduction in housing supply will support existing pricing levels… Oh and there has never been a better time to buy!”.