Pattern to market drops ?

Gentlemen,
I’ve been studying the market for the last 2 months.
I wonder if any of you has an opinion on the following:

Does the dropping market experience cycles or is it gradual ?
(I’ve looked at the charts on treesdontgrowtothesky etc).
Another way of stating this is - do EAs suddenly drop a tranche of properties in unison (e.g. after a date or event of some kind e.g. mini-budget)
or are all prices truly independent.

P

Ladies and Gentlemen surely!! :smiley:

trend and chart watching has broken ‘the best’

they become self fulfilling

The central bank said it ages ago:

page 6 of centralbank.ie/data/FinStaRepFiles/The%20Irish%20Housing%20Market%20-%20Fundamental%20and%20Non-Fundamental%20Influences%20.PDF

img142.imageshack.us/img142/3790/centralbankf.jpg

Some people have realised the game is up and are trying to get what they can. The rental value of this for example (daft.ie/2683446 puts its worth at around 300k, why buy when you can rent?

Based on my own long househunting experieces, I don’t think there is a cohesive plan amongst EAs countrywide to do things in unison.
I think the selling market does have certain cycles - i.e. when more houses are added at the beginning of a traditional ‘selling’ season, then due to volume there will be more drops.
What used to be the selling seasons seem to be: Feb to Easter, After Easter to end June, Sept to October. Nov, Dec and Jan are dead months, as are July and August. So the larger spikes happen during the selling seaons because more houses are put on the market and people getting more anxious not to have to wait till the next selling season accept cuts to their asking prices.
I’ve also seen stalemate periods before Budgets where sellers and EAs just wait to see what happens before deciding what to do next (cut the price, take house off the market and rent it, etc).

Specifically for property or equities too.

Are you a fundamentalist :open_mouth:

I agree, all there is is an asymettric and geographically localised greater or lesser marginal propensity to panic .

Stock market history reveals several boom-bust episodes, some of which likely map out what lies ahead for the Irish property market.
The best example I think; is the period from 1982 to 1999. Reagan comes into office, cuts taxes, replaces Volcker with Greenspan, Int rates collapse etc. In any case a 17 year rally occurs where the S&P goes from 110 to 1525. Thats 14x your investment in just 17 years (ie 17% p.a), which probably trumps even the best 20 years of the Irish property market.

Naturally, the first part of the rally was justfied, Volcker had beaten Inflation, lower taxes enouraged investment etc. Inevitably these things go too far as people extrapolate recent gains into the future. The last part was where it went nuts and the P/E of a market which started at 10x became close to 30x by 1999. ie a 10% yield became 3.5%…sound familiar?!?)

In any case, 10 years later and the market is still 40% off that peak (despte an effort at another bubble along the way).
There are obvious other examples, some more extreme, ie Japan.
The consistent theme though, is that people generally lost 40-50% from peak values by the time the bubble corrected…and 10 years later they were still sitting on a 40-50% loss

Thats my best guess for Irish property…-50% and settles at that level for 10 years until it is actually cheap relative to long term interest rate expectations (not current short rates with embedded subsidies) and no longer represents 75% of the wealth of the country (versus 50% in the US)

https://img13.imageshack.us/img13/9584/cpiadjusteddublinhousep.png

Dublin is Different TUG , have you that chart vs Dublin INCOMES ?

I’d love reliable data on household incomes… Any ideas?

However, it might be a bit academic as we are all agreed (I think) that household income is declining, what with job losses, pay cuts and income tax.

Actually, remember this… The Demographia survey from a while back…

They suggest Median Household income for Dublin is €64.6k, no idea if that is gross or after tax or even where it is culled from.

They also noted Dublin was the most unaffordable market at 6 times median household income.

demographia.com/dhi-ix2005q3.pdf

EDIT: Only Irish listed sources are BoI, PTSB and the DoE.

Here ya go TUG !

It is 2 years out of date , 2006 household incomes by county …the latest data issued in Feb 2009

cso.ie/releasespublications/ … income.pdf

Works out roughly at 84k gross per household in Dublin which would agree with the Demographia net figure of 64.6k.

Very roughly. XD

Disposable income per PERSON in Dublin did not rise as fast 2000-2006 as EITHER of

BMW region
S and E region containing Dublin

page 10 of that .

Total Income per person

Dublin 29.7k
Galway 24.5k
Limerick 25.5k

page 12

Yet Limerick did not go as crazy as the other two . Maybe they spent it all following rugby instead of buying houses ???

I dressed up as one at Halloween once…