S&P: Construction to sink Irish growth

[verbatim]

S&P says what we already know.

Should have a link later

Irish property is 20pc overvalued and the construction decline
here will send economic growth tumbling to around 1pc next year,
global ratings agency, Standard and Poor has said

Its research found that Ireland will experience a “significant
slowdown” in gross domestic product (GDP) growth even under a
“benign” retrenchment in construction

Standard and Poor said that a decline in Irish housebuilding is
already under way but that the main effects of this slowdown won’t
be felt until next year and beyond

“The correction could be protracted,” it says in the report,
entitled, A sharp construction sector retrenchment would hit
Ireland and Spain hard

In a situation where activity eases gradually, the economy will
grow by 3.8 per cent next year, following growth of 5 per cent
this year, according to the analysis

If construction sector output slows very sharply, however, this
growth could decline to 1 per cent in 2008 from 4.8 per cent this
year, Standard and Poor’s finds

[2Pack]

The 1% scenario is the most likely. I find it impossible to believe that housing output next year will exceed 45k and am firmly of the opinion that it will undershoot 40k .

Add in some commercial retrenchment and the 1% scenario is reasonable.

[crashandburn]

Unless there’s an interest rate cut, of course. Then things will motor along just as merrily as before…

Interest rate cuts in 2008 to boost economy and property market

MacDonald believe the the ECB could cut rates by a half per cent in 2008, with a further half per cent reduction in 2009. This will no doubt have serious implications for the future performance of the Irish economy and property market. There are already signs of a gradual pick-up in residential sales, with purchasers returning to the market in numbers.

82.195.132.30/uploadedfiles/mark … t-2007.pdf

[2Pack]

Ah Yes, hooke and mc donald.

If you read DOWN to the bottom of the document you find the most fascinating DISCLAIMER

All figures and[size=150] statistics quoted are approximate[/size] and subject to variation. Information contained therein should not, in whole or part, be published, reproduced or referred to without prior approval. Any such reproduction should be credited.

The DISCLAIMER itself is not information and therefore it MAY BE PUBLISHED without prior approval , innit Ken my son.

It does mean that any information given out on on sales in new developments is approximate and not hard information … this being so until contracts are signed.

[TomTum]

crashandburn, here is something a little more reliable(scroll to the end)!

thepropertypin.com/viewtopic … &start=120

[verbatim]

I never thought I’d live to see the day that a Hooke & MacDonald economists forecasts were used as a serious economic argument.

Well done sir! You have brightened up a dull Monday morning.

[Duplex]

Oct. 21 (Bloomberg) – Axel Weber, a member of the European Central Bank’s governing council, said the bank may have to raise interest rates further to quell inflation as the euro- region’s economy maintains its expansion.

I don't believe that interest rates have to support the economy, which is currently growing at 2.5 percent,'' Weber said in an interview in Washington yesterday.Inflation risks have increased recently,’’ and the bank will ``have to counter these risks should they materialize.’’

Weber said there’s a reasonable probability that inflation may end up above 2 percent in 2008 and possibly in 2009,'' andthat is reason enough to examine closely if there is a need to adjust’’ interest rates. The bank aims to keep inflation just below 2 percent.

bloomberg.com/apps/news?pid=20601102&sid=amDwgMvJ10.M&refer=uk

It has to be said however that if the Euro area is dragged into a deflationary recession then rates might fall (or settle in estate agent parlance).

[2Pack]

Here is the Home Page of The 2Pack Economic Forecasting Unit which is now on a retainer from the IPAV and the IAVI …yes both of them …to talk the market out of its doldrums.

Ye all know 2Pack is a very seeeeeerious economist and that 2Pack will prevail .

[The_Unwelcome_Guest]

Unless there’s an interest rate cut, of course. Then things will motor along just as merrily as before…

Yes. No more 100% mortgages, banks raising their rates without reference to ECB, increasing the stress test and even Subprime lenders fleeing the Irish market!!!

THINGS WILL BE FINE!

[Gatelodge]

Should have a link later

The housing market report, which singles out Ireland, Spain and the UK, warns that prices are estimated to be at least ** 30% overvalued **in these countries, and with the downturn already in evidence, the correction could be drawn out.
**‘In Ireland and Spain economic growth could take until closer to 2015 to gain the growth rates expected in 2008 due to the relative size of the construction sector’, it says.
rte.ie/business/2007/1022/houses.html?rss
**

Thats even more pessimistic than the pin.

[Pill]

Thats even more pessimistic than the pin.

Re property being overvalued - I’ve always maintained that approx a 50% fall will be witnessed.

[Gatelodge]

Thats even more pessimistic than the pin.

Re property being overvalued - I’ve always maintained that approx a 50% fall will be witnessed.

2gaffs will have a canary when he reads this.

[Pill]

Thats even more pessimistic than the pin.

Re property being overvalued - I’ve always maintained that approx a 50% fall will be witnessed.

2gaffs will have a canary when he reads this.

Yep the matinee - oh no it isn’t; oh yes it is…