“People of The Pin” I need your help…I’m finding it SO exhausting being a bear amongst the bulls/ostriches!!
It’s not that I don’t beleive the bubble will go bang …its just I am still surrounded by people/friends who still actually believe. “It 'll be grand, give it 6 months property price will be going up again”. These are professional, educated people who don’t want to know what could be round the corner!
Talk to them and try to explain about the theory of an asset bubble in a easy to understand way and it will fall on deaf ears. I am actually shocked that people don’t want to know.
I’m looked on as Mr Doom and Gloom! I just see myself as being realistic. Please o please could the “People of The Pin”
A) Reassure me it’s not just me, it is exhausting. Are you surrounded by bulls/Ostriches?
B) Provide 5 easy to undertand points that will pull their heads out of the sands and make them smell the coffee!!
(Been reading this site for over a year and it great stuff. First time post so go easy on me)
Here’s one: Point them at immopool.de (it has an english version) - ask why they believe that the capital of a minor country on the edge of europe should have higher property prices than any city (never mind the capital) of the biggest economy in europe.
The CIA handbook provides the solution to changing someones mind. First you must join them in their views. Embrase their ideas however silly they may be. Then over plenty of time point out problems with their ideas starting small and getting bigger. The target must be examined at each stage to determine the speed of your persuasion. As you point out holes in their belief system ask them for guidence on how to close up this hole. At all times you must support their belief system and let the seeds you plant do the work of persuasion.
Alternatively, let them learn the hard way. Bet them 1000 Euros that in 6 months things will be worse. Couln’t be easier.
Waste of time attempting to explain the rational behind the bubble and burst in my opinion. The vast majority of people require absolute proof if they are going to relinquish a deeply held belief. The market is the mechanism that provides the proof.
Totally agree with Duplex. Most people just don’t understand or have dogmatic opinions, many are in addition, functionally incapable of understanding. This is a key point; they will never get it cos of low IQ and/or lack of education. They get upset because for example, they are frustrated by abstractions such as compounding or opportunity cost, concepts which hold the key to the issue.
Best spend your energy on more productive pursuits. Besides, once a critical point of mass psychology is reached they’ll be telling you the knew it was a bubble etc. all along
BB, I actually did this in December, in a car full of four bulls driven by the Uber-Bear (me) Not one of them put their money where their mouth is.
I know exactly how you feel, livinginhope, I have made all the rational arguments, got the ‘rent is dead money’ speech, and am just exhausted by the whole thing now when surrounded by these people. One friend I have had for over twenty years doesn’t speak to me any more since I advised her to sell her ridiculously over-priced ex-granny flat and rent for a few years. Most people of the Pin have been bears for a looooong time, and it’s not as if we kept the info to ourselves and now are gleeful at what’s happening, personally I am revolted by the fact that it got so out of hand at all. But the people who will be most affected by it won’t change their minds, and they will be angry with us when it comes true.
So I’m afraid my only advice is to leave the room or stay quiet when the topic comes up, because they will just vent their fear and anger on you, even though you are only trying to help.
Oooooooh, dunno about that.
Houses in swords are cheaper than a similar location in Munich! If I remember right, werent there 3 bed semis going for 350 a few weeks ago in swords?
In Munich you’d be looking at 550k plus for a run of the mill house (if you find one cheaper then tell me!!). BUT you can get a one bed apartment for <100k and a 2 bed for <200k close to the underground and only 10min from the centre of town.
I am only interested in this because I am living in Munich myself, tying the knot this spring, and considering getting myself a gaff. Then again, I am only paying 650 euro a month rent for a mint 2 bedroom apartment so am in no hurry to move any time soon.
Also, I wouldn’t pay any heed to property prices in Berlin as there is shag all in the way of industry there. Engineering + Media is strong in Munich. Finance is strong in Frankfurt. Hamburg potters along nicely with airbus and other industry.
Berlin has…
Embassies and Irish developers building shopping centres
If the place was coming down with jobs/ money then property wouldnt be as cheap as it is up there.
p.s. its my first time posting but would have been posting long ago if the registering process had allowed me. Keep up the good work!!
Is that a particularly Irish trait? Ie, criticise or argue with a ‘friend’ and they freeze you out? No chance of a healthy debate, then…
Acutally, I refrain nowadays from reminding two friends who bought BTL houses in mid-2006 that I urged them not to do it!! I imagine they’d disown - if not kill - me!
Dunno - I don’t see many that cheap on daft right now - 1 to be precise.
Possibly, but isn’t munich like the rest of germany, where most people live in apartments if they want to be near a city, and houses anywhere near a city are stupidly expensive by comparision?
BTW, a quick browse of immopool.de suggests plenty of houses in the 120+ sq metre range within 10km of munich under 400K - not sure how good their location is, since i don’t know the city.
Also i’d expect a house within 1 hour commute to munich to be a lot cheaper than one in swords - it will likely be a lot further away
Agree totally - though since i can work from anywhere berlin is a nice option - one of the few places i can buy a decent size city centre place outright. I reckon they’ll sort the place out over the next decade or so - no way the germans will leave their capital in a mess over the long term.
I wouldn’t say that prices there will skyrocket - more likely that they’ll just drop less than anywhere else.
I have noticed a big shift in people in my circle over the last 6 months. There is now a grudging acceptance that property prices can actually fall
No-one seems to believe a 30% type fall is possible though (We’re nearly there) But an acceptance of a 5-10% fall (No Panic) is now out there.
As for trying to convert the masses, or even friends, it’s a waste of time. It’s hard to forecast when the penny will drop collectively, we’re not at the panic stage yet though.
This is also my experience, They can’t in general escape the 7%-15% drop (depending what you read), because it’s fact.
BUT…when you say it has another 15%+++ to go, they just can’t get their heads around it! I get a “You haven’t a clue how this unique irish property market works” kind of look.
As for keeping my mouth shut, thats what I have to do most of the time.
Exhausting/frustrating and some times makes you wonder if you are mad!! BUT “The People of The Pin” keep me going!!
I’ve noticed a begrudging acceptance of price drops … but all too often the “they won’t drop any further” line is rolled out. With the “what do you think? they will return to 1995 value is it?” arguement.
Not very reasoned debating but then with most of the VI guff out there they only hear the fundmentals arguement and regurgitate ad infinitum.
We will not get away with a 30% fall. Return to 95/96 values adjusted for inflation (Overshoot on the way down - with all that momentum it will be significant).
But it will take time I think. Then again, we have not yet seen PANIC.
The bearer of evil tidings,
When he was halfway there,
Remembered that evil tidings
Were a dangerous thing to bear.
....
....
As for his evil tidings,
Belshazzar's overthrow,
Why hurry to tell Belshazzar
What soon enough he would know?
To put it in perspective I was buying a house in Athenry in 95/96 , a goodly size new semi. I only borrowed about 4 x the average wage .
It cost £62k Then . Assume the sensible 90% mortgage back then so thats £55k I borrowed . No funny business was tolerated so I had to pay it back within 20 years. It sure as hell was not interest only .
As we are likely to have an average mortgage interest rate of say 6.5% over a 20 year period based on German experience it would cost £410 a month …circa €540 before government subsidies, every month .
I am confident that it will never go that low , or near it .
Not one of them put their money where their mouth is.
