New House Prices Fall for the First Time in 2 Years

Ding fecking dong! :stuck_out_tongue:

So where does that fit into the old squeezing the supply argument to sustain the bubble?

Logically then, if the builder’s heart and desire is to maintain “volume of sale” then he’s going to reduce prices to meet the tanking affordability situation and that’ll send the whole thing spiralling into freefall.

We all know we have a sufficient supply of housing, and the market is just confirming this. But building houses and related spin offs from tiling to mortgage broking makes up much of the Irish economy. There can be no soft landing fairy tale ending to the mania. :frowning:

You’re not kidding Duplex.

I suppose we should have taken that 50% fall in B&Q profits in the last quarter as the major indicator! :open_mouth:

All these stats, we’re getting at the minute are from the Summer, wait until the last six months of the year data comes in…

Oh lordy, if Cowen doesn’t touch stamp duty in the budget there could be many a gnashing of EA’s teeth and wigs on the green as it were…

A supply shutdown is a reactionary measure to some of the price drops documented as well as the build up in inventory per daftwatch etc. As this data is based on July/August drawdowns it wouldn’t have been crystal clear to all the VI’s that a correction was underway. This stuff was planned for/financed/ built going back a year or eighteen months ago.

Where we move from here is how many new starts are getting put off due to the current malaise in the market?

Niall O’Grady of PTSB says its great news for first time buyers,the truth is the recent interest rate increases have meant Ftbs are restricted to borrowing less and if developers want to sell to them then they have to drop their prices to meet them.
With 100%,35 year mortgages there is just no room left for manouvre,Ftbs were priced out of the market but the market needs Ftbs so the market adjusted.

If prices drop .5% in one month, thats 6% per year,is that an indication of a soft landing? My understanding of a soft landing is when prices stay in line with inflation,we’ll just have to wait a few more months I suppose :confused:

Developers don’t make money by “squeezing supply” - i.e. for them to stop selling houses in order to allow others to make more money. It’s ludicrous.

Because of the supernormal profits that have been made in the Irish property market, developers have lots of scope to reduce prices and still make a profit. Smaller than in the past, but still a good profit. It’s the eejits who have massively overpaid for their BTL “investments” who have to get a high price to break even who will be royally screwed.

True with the market peak the flippers will start flapping, so to speak :confused:

It was the first item on the 9 o’clock news, too, just in case the general public hadn’t noticed yet. They blamed the interest rates as the main cause, but even with static interest rates, FTBs couldn’t keep paying arbitrarily higher prices forever. Only 2nd-timers could do that, presuming they can trick somebody into paying an equally inflated price for their house-for-sale.

Front Page of IT this morning:

Also Front Page of the Indo

Maybe some people will wake up and listen now.

I’m confused(well maybe not :laughing: ).The first few paragraphs of the Times article says FTBS cannot afford new property so developers have not increased prices in order to sell,this is a price reduction as inflation is around 3%.
Further on in the article it says FF backbenchers are today going to lobby government to make changes in the budget to help FTBS,why bother, market forces are already doing the job?
The government are not trying to help FTBS,they are trying to keep the market bouyant at whatever long term costs there may be.

I just love Bertie’s views of what is happening with interest rates. It’s like Homer Simpson’s view of economics. … e_id=14938

How many first time buyers are there in the market each year?

Given that the government has allowed the bubble become a central (possibly the only) pillar of our economy its hardly surprising that they should seek to manipulate the market. But they are in a hopeless position. Current valuations are too far from fundamentals. And the fundamentals (ie real world economics) are teetering on the brink as the US housing and debt bubbles unwind. Much piss and wind will be employed by Bertie in the coming months to no effect.

Its cringworthy :frowning: he might as well have blurted out

“Down with that sort of thing” :laughing:

“So far this can be characterised as a soft versus a hard landing!” :open_mouth:

Has Mr. O’Grady not been on a roller coaster before???

We’re at that point twixt momentum and gravity, there’s no telling if it’s going to be a short jolt down and back up or the mother of all drops to the bottom…

How these guys get away with it, arguing that the fundamentals were sound and now when the evidence counters them, pretend that they know what’s going on… It’s vomit inducing…

The entire country is captured by vested interests…

So I got a reply back from my Dad in relation to the email of the original RTE article…

I put: “And ye came the tipping point” as the subject header…

That’s his verbatim reply. Now, he’s no financial dolt but he’s an uber-bear in terms of trying to persuade me onto the property ladder at whatever price… I’m just worried that we are now increasingly likely to see a stamp duty change because it has entered the popular consciousness as the fix all.

It’s incredible that after years of “property can only go up”, “Ireland is different”, that they are now resorting to intervention in the market as the logical conclusion… Despite being proved wrong on all counts, instead of really trying to encourage “soft landing” by allowing the market to run it’s course, they want to get one last round of suckers in on the grand game of “pass the debt”…

Will the banks, ahem sorry…, will the “dynamic lending institutions of Ireland” play along is the question? :open_mouth:

Would someone please tell Mr Trichet that the head honcho in Ireland won’t be very happy if he keeps increasing rates (well at least until after the next election)

I could not have said it any better myself,if there is stamp duty change in the budget it is simply to rope in the next bunch of thicks,this government doesn’t give a fuck about the next shower of buyers,they will simply be the one’s caught at the top of the pyramid.The only thing people can do is not buy,then prices will eventually return to fundamental levels.And just so people don’t think i have a greviance against the current government i have heard absolutely nothing from the current opposition that would make me think they have any better idea’s,in fact expecting something different from them i have been sorely misguided.IMHO at the moment there is little difference between FF and FG,FG have lost their way,you can’t be everyone’s friend no matter what the spin doctors might tell you.

Yep! I have a slithery feeling at this stage that Cowan will do a u-turn and amend stamp duty (at least for FTBs) - I think they feel that they must appear to be doing something to “manage” things…

Of course, this would have the added effect of allowing all Fianna Fail’s developer mates to just whack the stamp duty value on to their house prices, and continue to try and fleece the FTBs for another few months. FF will probably pass it off as some sort of “caring” “initiative”!

I’m sure these developer lads are lobbying for stamp duty change as we speak… :angry: