Q1 2012 survey of Irish Market - Market cycle of emotions

Public Emotional response to house market

  • Optimism
  • Excitement
  • Thrill
  • Euphoria
  • Anxiety
  • Denial
  • Fear
  • Desperation
  • Panic
  • Capitulation
  • Despondency
  • Depression
  • Hope
  • Relief

0 voters

Previous polls: September 2007 | January 2008 | April 2008 | July 2008 | September 2008 | January 2009 | April 2009 | July 2009 | September 2009 | January 2010 | April 2010 | July 2010 | September 2010 | January 2011 | April 2011 | July 2011 | October 2011

Based on general conversations with your friends, colleagues, or intuition what do you reckon the public mood towards the house market is?

Based on the continued price falls and lack of credit we are definitely at capitulation and beyond.
In fact some investors see opportunity based on the results of the Alsopp auctions and are strictly following the rule of ten.

Despondancy, but I kind of mean in a hands in the air ambivalent way…that’s how I feel. Unless people start getting real about how fubared things are at home and in Europe for me there’s no point in even thinking about property at the moment

Panic but quite close to capitulation.

I’ve looked back over my voting record on the previous polls, I was voting Fear from 2008 until Oct 11 moved to Panic, now moved to Desperation. Things are accelerating towards Capitulation but it’s not there yet. When capitulation comes it may well be reflected in an external devaluation due to currency re-alignment rather than nominal price drops. I’d expect a Euro Lite/Punt Nua to instantly devalue by approx 30% vs Euro.

The Denial/Fear phase of the bubble took five years, I think Despondency will arrive in H2 2013.

The people I know who are heavily invested - i.e. up to their necks in debt - are very much in despondency and depression, but are so surely trapped that it doesn’t really matter. In fact, I was told as recently as last night that one of my close friends has realised that he is at financial rock bottom and has found some relief and freedom in that.
That said, from the point of view of people who would like to buy - myself included in this - all the acceptance in the world is not going to make one jot of difference if there are no properties priced to reflect this on the market. Sure, there are some places that seem like they are reasonable, but I don’t want to live in Newport, Tipperary, nice and all as it is, and I don’t fancy shelling out half a million shekels to live in some pokey hole in the less salubrious parts of Wicklow.
The attitude of the banks and government have successfully derailed prices from the cycle of emotions. Ireland is different.

Don’t follow you there Xman. Desperation comes before panic…

Doh, I voted Desperation in Oct and also on this thread :blush:

I still see it as being a big mix depending on personal circumstances. I see a lot of fear, desperation and even panic amongst the accidental investors but the one seller we tried to engage with remains in complete denial.

I voted Denial, again. This is based on the same conversations that I’ve been having for the last 5 years with family, friends and colleagues. There is a small hint of fear in a few though.

Fear, but I wouldn’t quibble with Foyboy’s selection of on-going Denial.

I think there is always going to be an ongoing element of denial, but voting for it now when there is widespread acknowledgment of the huge drops that have occurred, and that further may occur seems mistaken to me. It isn’t denial in the spirit of the cycle, such as it is.

I hope those pinsters who voted for denial are not waiting to purchase, because they may well find themselves a couple of years behind the curve.

Are they denying prices are down 40-60% from peak? Are they denying the current asking prices of houses?

I think the denial concerns the consequences of a crashed property market.
No on can deny that it has fallen, but many still believe it will recover.

An acknowledgement of drops that have already occurred does not preclude Denial being a tenable selection.

After all, despite those drops from peak, prices in all Dublin markets with the exception of city centre apartments/properties are still 25% too high. In a vacuum, and ignoring what’s happened to date, that’s prima facie evidence of wholesale Denial right across the market.

Moreover, Denial is a tenable selection given we have no home repossessions in this country, and given 100,000 mortgages are in trouble but are being allowed to muddle along. We’ve had the biggest property crash in the history of the world, and yet the owners of that property haven’t paid any price for it (they have of course lost income like everyone has, but that’s not the same as suffering as a result of the ruinous property transactions they entered into). There appear to be no consequences for any bubble purchasers, leaving them the option of denying this will ever come to a head.

I could also mention the Denial we still see in a whole range of newspaper articles and commentaries from around the place.

I think Denial is a perfectly reasonable selection.

I think we are starting to see panic. Lots of new year chunky price drops in South County Dublin, granted there have been quite a few sale agreed’s as well but as always many will fall through especially with the recent round on price drops.

This has always been my personal interpretation of “denial”.

Anyone who is still clinging on to some sort of hope that they’ll see 2006 prices again even in the medium term if they just hang on in there is in Denial. Anybody who refuses to connect all the dots and actually understand and accept all the logical consequences of a bubble that has burst is in Denial. Anyone still clinging to “external factors” blah blah is in Denial. Anyone who hasn’t fully processed and come to terms with the reality that the country is insolvent and essentially in receivership if it was a company…is in Denial.

Far as I can tell, anyone I speak to back home is still totally in Denial about the whole situation. There’s been no movement in the underlying worldviewm assumptions and cultural Beliefs whatsoever in the last 6 years.

The general view out there is that prices have bottomed, that they are about to go up again and that this is an excellent time to buy!

Using a very scientific and academically acclaimed straw poll of my mates two very distinct and separate ‘group thinks’ emerge.

Group 1)
Bought in the bubble and think it can’t get much worse. They are not delusional enough to think that we are going back to 2006 prices however they do believe we are near the bottom and are about to enter a period of stability followed by modest house price increases. Depending on the day they are in a state of Denial, Fear or Desperation. Sometimes they manage all 3 at the one time.
A few I’ve spoken to have a new slant on denial:
the raw materials + land + labor + utilities = €xxx,xxx.
The group think it can’t fall lower than this. How can a house sell for less than it cost to build?
Hmmmm…

Group 2)
Saw what was happening during the bubble, didn’t understand it and stayed out. Now they look at things like wage multipliers and rent multipliers and have come to the conclusion that there are further substantial drops on the way. Some are getting itchy feet and are wanting to jump in (but only for the right price), most are saying it is not a good time to buy. ‘Why buy now when I can get it for 10% cheaper in a few months?, and I’ll have a bigger deposit too, so less overall debt’.
Despite what all the debt junkies tell them they don’t believe that the debt is lovely and are not to eager to jump in

I was debating between denial and fear and eventually went for fear. There is still a huge swathe out there who think the worst is behind us already in terms of our economic situation but I get the feeling that slightly more are now fearful of what is yet to come.

I’ve seen that too. I bought in the second half of last year and I’ve lost count of the number of people who’ve told me it was a great time to buy and then look at me funny when I respond that that remains to be seen.