McWilliams Calls Move from Denial to Fear

Great article David, as per usual. But there was a survey published recently (last week?), and 39% of people thought that their houses had increased in value over the last 12 months. :open_mouth: Only 19% though that they had decreased. … 50157.html

So the vast majority of the Irish public is still firmly rooted in denial. Thanks no doubt, to their devotion to rags like the Sunday Independent.

a good sunday morning read, with a measured view on the next few years; currently denial seems to be well rooted across the board in ireland, but i would imagine this phase will pass in 9-12 months, as it did in other economies over the last twenty years, then agents (those who are still in business) will want to make sales and therefore encourage price drops across the board.

What McWilliams describes here is exactly my thinking. I cannot get my head around the rent/price divergence in Ireland. When I hear people talking about “housing shortages” and “fundamentals” I have to ask the question as to why we are not seeing this reflected in rentals. If it was the fundamentals, rents would also have increased four-fold in the last 10 years.

Leaving aside emotion, I can see no rational objective reasoning as to why house prices will not fall another 50%. Emotionally my brain is telling me “What! That’s outrageous, what a stupid idea”. Intellectually my brain is telling me “The figures add up.”

Karen Coleman on The Wide Angle on newstalk telling us how business friends of hers “don’t listen to the radio or read the newspapers because of the doom and gloom”.

Fingers are still firmly lodged in ears I think - and I thought we were moving to fear a few weeks back…

Landlords all around the country will no doubt take this as a signal that rents are going to increase hugely over the next few years! :laughing:

what screws with this is that rents are on the way down as well…so if purchase price becomes a function of rents…then they have further to fall again.

Hasn’t McWilliams pretty much written a dumbed down version of the NY times article written during the week discussed here:

I’m beginning to have less and less time for the man.

Ixus, is there any particular aspect of the article that you take issue with…?

Just a refresher in case others have not seen

I’ll tell you what, when you have anything intelligent to say about his point, why don’t you come back to us?

What’s the circulation of the New York Times in Ireland again?

I think we are definitely in fear…

Following the media stories this week, IT and Indo the day after the TBS/ESRI index was all bad news

I dont think anybody is bothering to say “its a good time to buy” anymore…

The auction results last week were abysmal with almost nothing selling…

There were very few properties on show this weekend. I think the EAs and developers have shut up shop for the summer and are hoping against hope for good news in the autumn

I think the exchequer figures due out next week and statements from the ECB will add further despondency…

Desperation and panic in the autumn, anybody?

I take issue with the blatant plagiarism without reference. As though he has developed this idea himself. Calling it an “RVH” versus the rent ratio in the NY Times article. That article was published last Wednesday, why employ McWilliams to make a rehash (a poor one in my opinion)? Why not just get it direct from the NY Times?

I think that is a fair comment. The method has value without doubt, it is merely the fact that it has been ripped off that has disappointed me.

Yes, some of the stuff in David’s articles has been discussed on the pin. It’s his perspective and personality that puts the information in a new light. David’s been around the block and doesn’t need to prove himself in his column in the sbpost week in week out.

Also, some people have to be repeatedly reminded of the facts: repetition is the only way some people will begin to realise that the housing market is screwed.

So you’ve got nothing constructive to add. Cheers.

His website is and he has a comments enabled for his articles, if you want to accuse him of plagiarism.

To be fair this idea of McWilliams that the last 2/3 weeks have been a bit of a turning point has been brought up on the Pin during last week. I have seen this in the figures I monitor and I have highlighted it. However, I honestly don’t see us leaving Denial until at least Winter. This not based on figures but is based on knowing well the character of the Irish. Most people I know would prefer to loose money that sell for less than they think their property is worth. Based on this premise I firmly believe the decision needs to be taken out of the hands of sellers by the banks before the real roller coaster ride starts (not that we are not having modest falls (9.5%) at the moment). It would be appropriate anyway considering the start of the collapse was the banks taking the decision away from the seller. I still stick with beyond Oct08 for Fear. And possible summer 09.

We’ve spent two years on this site arguing about whether or not the rent/purchase price ratio is a surrogate housing P/E ratio. McWilliams didn’t discover this ratio in the past two weeks although it sounds like you might have :wink:

I wish… Sindo had it as the title of an article last Sunday. … 86443.html

Any paper with an eighth of a brain would have ditched it in 2006.

Sindo are only about 2 years too late, and I don’t think the penny has dropped with them yet…

Next week they might break the end of the Second World War and the Moon Landing for us.

Alan Ahern has also (August 2007) touched on the subject of rent to price ratio’s (rental yields). I think McWilliams is in the business of explaining, not the business of being constantly original. And there will be a lot of explaining to be done.

Here’s an article by David McWilliams from 20th April 08 where he equates rental yields to P/E ratios. … nt-picture

Tell me, did you have a cut off the New York Times for plagiarising David McWilliams without reference too?

Again, if you ever manage to come up with something constructive to add to the debate, please feel free to share it.

@ Cellopoint & Duplex, I take your points.
@ ARandomWalk & Xman, I’m aware it’s not a new concept. What has annoyed me was the article being printed so soon after the NY times article with no reference, it just appeared lazy to me. I hadn’t seen his previous article.

It seems I may have done this:


Back in my box so…