How cheap or expensive should a house be?

I can support the above statement with this

from

esri.ie/irish_economy/perman … report.pdf

Which would leave me to believe that investors will be the worst burned.
What a pity we built tens of thousands of dog boxes
Even if property prices crashed in the morning and negative equity somehow didn’t exist and magically no jobs were lost - we still have a problem in my view

Dude I can’t believe you bothered to type that rubbish.
I sincerely hope you don’t believe it.
A house is not worth whatever you can afford to pay for it, it is worth whatever you are WILLING to pay for it, and if it is falling in price you may not be WILLING to buy it, as you can buy it cheaper in a year or 5s time.
Thats why we don’t all buy Aston Martins and Bentleys, even if we could afford to borrow the money for them, because we know they will lose us lots of money by crashing in resale price.

Too much demand, watch it disappear overnight just like in Arizona.

If a house falls in price from 500k to 400 k, that is a crash, it takes Joe Paddy 5 years to earn 100k after tax and probably 15 years to save that kind of money.

Fear & Greed control prices.
Greed is gone, fear is here.

Yeah but how many of those semi-ds are in actual fact mid-terraced kips.

Honestly, I haven’t seen many good semi-ds developed in North Dublin in the last while…

Oh yeah, check this out…

millbourne.ie/a.htm

The one bedroom “house”, you saw it here first!!! :open_mouth: :stuck_out_tongue:

Tone it down a notch undersupply. We’re here for civil debate only.

Yeah but people love a garden! Thats mainly the difference between these kips and apartments. And what you say is true and only exacerbates the problem.

My God a long long time. I take it you agree with my point that if the bubble didnt exist we would still have SERIOUS issues.
Commuting, rubbish accommodation and lack of facilities etc etc!!

I really dont know what to say.

To think, we used to call them granny flats!!!

Welcome to 21st Century living!!! :open_mouth:

In 2002 we built 57,695 homes while employing 180,800 builders.

In 2006 we built 93,419 homes while employing 277,800 builders.

We have 250,000 empty houses in this country, but we may be able to sustain building 30,000- 40,000 new homes for a few years if we are very lucky( 40,000 enough to employ about 120,000 builders at the ratios mentioned above). As the building boom slows we will have a clearer picture of whats likely to happen to an economy so dangerously exposed to one sector dependent entirely remember on domestic demand.

Well said Duplex!

Go look at the sherry fitz. report , investor demand has “eased” by 65%.

Now if that’s not a collapse in demand I don’t know what is.

Ah yes the aul easing is it?

I propose some form of entrance exam to prevent folk from seriously embarrassing themselves

He was playing devils advocate :smiling_imp:

A dunce’s corner might be more appropriate.

getting back to the original point of the debate: basically, the question you need to answer is what sort of housing system do you want in the country? Historically, it has been less desirable to rent here because the rental system leaves a lot to be desired, has historically (we’re talking a couple of centuries ago) led to major social upheaval, and people feel screwed over by it. You’d think that with that sort of history, there might have been an effort to put in force effective tenancy legislation but it’s half hearted at best.

Most people crave stability. You don’t get that here at the moment if you rent. You also barely get it if you buy because of the whole ladder thing. What we want is a mobile workforce but what the mobile workforce craves is stability. So currently, unless you’re mega wealthy and earning 100K a year, you’re screwed over either which way.

If you’re going to place a great deal of importance in people owning their own homes, it’s not realistic that an overwhelming majority of entry level purchasers are totally priced out of the market. So purchase price:salaries of 10:1 are not sustainable in the long term. You need to make it affordable. In Dublin at least, affordability for FTBs left the building a long time back. Prices outside the Dublin basin are probably not wholly realistic either, but they’re not as ridiculous as north county Dub with a 1 bedroom box costing in excess of 270K.

Basically it boils down to this: is property theoretically a mechanism for sheltering people or for making empty money? If it’s for sheltering people then the cost should sway way down to affordable. If it’s for making empty money, then rampant capital appreciation is required. My bet though is the latter is likely to cause social problems in the medium to long term.

Most of us don’t want to make a killing. We want to pay a fair price for something which is life essential - a roof over our head. Currently I am of the opinion that rents in Dublin are disproportionately high, irrespective of them not having budged much in 5 years. Property for purchase is ridiculously overpriced, often poorly designed and unsuitable for long term occupancy. We’ve been very stupid about this and I can’t get a canvasser to give me a straight answer about future policy in this direction right now. Sheltering people seems to be of secondary importance right now.

Too many votes invested in property right now and probably forever!

The problem is that the housing situaton has been allowed to develop into a huge monster and each and every one of us has become slaves to this monster.
This monster has to be slayed before it slays us,trouble is none of the vested interests want to admit this because the monster has just got too big.

The Irish property market will face an inevitable test of fundamentals. And the fundamentals are not coming up to meet where the market’s at, rather the fundamentals are drifting downwards as the era of global hyper competition emerges from its infant stage. The next decade in the West will be dominated by one word ‘cost’. The cost of labour, the cost of commodities, transport, regulation and the cost of production.

Japan is the first 'developed country to experience the impact of fierce competition from the BRIC nations, wages continue to fall in one of the most productive and innovative economy’s in the World. So while we are presently engaged in this futile, infantile, pyramid scheme, tomfoolery. We have to remember that the acid test is getting increasingly tougher and we haven’t even begun to come to terms with the absolutely incontrivertable fact, we will be tested.

Undersupply>

Not necessarily, because the demand (for houses) from other people will still be there, as I tried to illustrate in my couples/singles example. Also it depends on what stage u r in yr life: a 30+ year old might not want to wait 5+ years until a house (possibly) comes within his/her price range.

To clarify, if the house falls from €500k to €400k, “you may not be WILLING to buy it, as you can buy it cheaper in a year or 5s time”, however someone else will also have their eye on the property (demand) and snap up the house that they’re getting €100k cheaper than before.

Yes prices could fall further but here is a real-life example of how people think: thepropertypin.com/forum/viewtopic.php?t=1522.

Additionally, when you use the word “willing” that is implicity “taking into account the quality of life you want to have”, after the purchase of the item, as I said.

Sorry Conor, I don’t get this; wouldn’t a rental yield of 6-7% be necessary only in a totally stagnant market? Or, to put it another way, isn’t this what would make the house a sound investment if there is no capital gains?

If there is capital gains, then you hardly need 6-7% rental yield to make the property a sound investment. Or am I missing something?

The capital gain has to keep pace with inflation just to break even and today thats 5.1%

Why does the capital gain have to keep pace with inflation in order to ‘break even’? Are we not comparing against other forms of investmenets - eg lump sum deposits - where the initial principal invested certainly isn’t adjusted for inflation an an annual basis?

It strikes me that we have to be fair on this. In years of strong capital appreciation in the housing market, it simply wasn’t necessary to have rental yields of 6-7%. Similarly, if or when house prices start to fall, rental yields of 6-7% will hardly be sufficient. So rental yields’ value in terms of calculating house prices is only useful in a totally stagnant market.

Or, again, am I wrong?