If nothing is selling where is the panic ?

I am sure everyone can agree that currently property is not shifting. From lucan to phibsboro , from swords to bray.

but why are we not hearing about it more…on the radio…in the newspapers ?

Because although there are increasing reports of house price reductions, by and large they are not so commonplace as they can’t be ignored, and they are not across the board. It’s when more and more people start reducing prices and they’re still not selling, that they’ll phone the whingeline.

We’re waiting for the election. It’s McDowell’s fault.

SSIA Money. We’re waiting for SSIA money. It will save the day.

The spring selling season doesn’t start till March.

Mostly, it’s the can hold, will hold, Irish psyche.

But there’s a bit of investor exiting the market, let’s not rock the boat yet, until we’ve gotten out clean going on.

However, it’s squeaky bum time for anybody who bought investment wise in summer 2006! :open_mouth:

In fairness, I’ve definitely seen some property shift in some areas af D6 and D4.

Some?

I’ve seen one or two sale agreed around the place.

But that’s in the context of 100s of For Sale signs. You don’t even need to get out of the car to go window shopping, everytime I drive to Bray to visit my sick granny between exiting Swords and entering Bray, I see buckets of them from the road.

Because people don’t have to sell. They would like to sell. Investors would like to leave the market at the top and pocket their cash, people moving properties would like to sell their existing property so they can close on their new one, but everyone can afford to wait in the expectation that this is merely a blip and prices will resume their upwards trojectcory soon, irrespective of the reason for the current slowdown.

Prices will only fall significently, and it will only enter the mainstream consciousness, when preople are FORCED to sell. That is when there is a shock to the jobs market. I would imagine an unemployment rate of 6% combined with the current interest rate environment should do it. I don’t see this scenario playing out for another 12 months.

But you see …wait for what. No-one is currently buying. I have seen houses for sale near me since late summer that are still not sold. And the majority have reduced their prices.

Out of say every 10 houses i would say that at least 3 want/need to sell. They cannot hang around as they have sale agreed on another property, are moving overseas, want to exit the market…these dont want to wait but they cannot , in the market today, sell.

If i owned a 350K apt with 25K equity i would rather in todays market not own it at all. Far better to me with zero equity than to be in near 50K negative by the end of summer.

If i was one of those 3 in 10 who had bought late 2005/early 2006 i would be panicking right now.

p.s. about your 6% unemployment. wont happen. dublin is gonna become the new york of europe but thats for an entirely new thread.

People are forced to sell because of a negative cashflow. Investors who purchased apartments and duplexes etc. over the last 2 - 3 years at ECB rates of 2% with Gross Yields of 2-3% where already subsidising the mortages. With ECB at 3.5% now, about to be 3.75% the chunk being subsidised has increased significantly. The question is can they cover this from salaries or other income? Do they even want to cover it? If they can’t or don’t want to the place gets sold at whatever they can get for it. It’s that simple. Plus the amateurs would be panicking if they’re out of pocket by so much every month.

It’s all about cashflow and higher interest rates negating it.

I’m completely baffled by reports of queues in Adamstown last weekend.

It was posted on Daftthat about 80% of Sale Agreed have been falling through lately. Does anyone know if thats true?

falling through?

not following, do you mean, that of the x% who have bought a house, 80% of this x% are no pulling out?..

Another poster on Daft who is struggling to sell. Market psychology takes a long time to turn it wont happen over night.

=90511

Anecdotally this isn’t supported. Logically it is. Why would anyone subsidise an investment? It makes no sense. But you see it everywhere. Anyone buying an investment property in Ireland in the last 12 months is doing this and they account for 40% of new build purchases. Not only are they not selling their loss making investments they’re buying more!

You hear it all the time when the issue of 2% yields is brought up with the nouveau landlord - “I’m not in it for the yield, I’m in it for the long term, I’m in it for the capital appreciation”.

Look at the “Is it worth the investment” piece in the Times every Thursday. No property has been worth the investment for the last 12 months, it’s spelled out in black and white in the biggest selling paper in Ireland but people still hang on, and indeed buy more, because they BELIEVE prices will be higher when the sell.

I mean that of all properties that go from For Sale to Sale Agreed, 80% are failing to reach the Sold stage (contracts complete and exchanged), so go back to being For Sale.

What you are saying is of course correct. However this is not that relevant the point I made. You have to have the **cashflow **from other income (such as salary) to subsidise an investment property that has a negative cashflow (as all investment properties bought in the last 3 years have). As interest rates go up the money required to subsidise the investment property increases. How many properties requiring say a €1000 per month subsidy (that required €200 PM a year ago) can a landlord afford to hold onto?

**This is where cashflow comes in to it **

It’s negative cashflow that sends a business bust (look at Smart Telecom for a recent example). It’s negative cashflow that causes a bank to call in a debt (in this case force the sale of a property). It’s rising interest rates and deteriorating cashflow that bring down a market.

But that’s going to be slightly delayed at the moment. I mean, I can’t speak for all of the country, but around where I am, rents on 3 bed properties are up 15% over last year. So that takes some of the heat off that argument.

Not necessarily,i know of 2 people at the moment trying to sell their investment property.They are empty to sell (probably why rents are rising in the shorterm) and every month the mortgages are burning a serious hole in their pockets and as yet no offers.And last night i was told of another person in the same boat,with the huge rise in inventory how many are there out there in this position ?

Do you know why they are selling ? Is it to realise gains etc or is it because they are nervous of the market.

I do truly believe that there are many parties out there wishing to sell but cannot.

(p.s. how come when i press reply i often am directed back to the initial screen…does this happen to anyone else?)

No, not this march - next march

oh and the interest rate rising will force a few more sales, put a few more under a little more pressure and some alot! In general inject a little bit more of a sense of urgency to the market i suspect.

I think you’re special phoenix. :smiley:

I’ve never had that happen.

Sales are down by a good 50%+ - but certainly not an 80% fall through level - that is rubbish! :laughing:

Murrayo (EA)