Where do you think the bottom lies?

Where do you think the bottom for property prices will be?

  • 10% from peak
  • 20% from peak
  • 30% from peak
  • 40% from peak
  • 50% from peak
  • 60% from peak
  • 70% from peak
  • 80% from peak
  • 90% from peak

0 voters

Where do you think the average price of a house will get to before it flattens out/starts rising again?
For the purposes of this poll let’s just pretend inflation doesn’t exist.

The peak for new houses nationally was E331,947 in Q2 2007
The peak for second hand houses nationally was E389,871 in Q3 2006

The peak for new houses in Dublin was E426,900 in Q2 2007
The peak for second hand houses in Dublin was E549,330 in Q3 2006

Nominal or real.

Deflation or inflation.

Lehmans! International factors!

THE FUNDAMENTALS WERE SOUND!!! :open_mouth:

What were the reasons for high house prices? Supply and demand was used to explain it. There was a hiatus in supplying zoned seviced land in the planning system, and an-open door immigration policy stoked the demand. There was unprecedented growth as a consequence of the population expansion. Foreigners came here to work in multinationals which set up here to avail of low corporaion tax and unfettered access to the EU. The foreign direct investment money spread out into the entire economy. There were stable and low interest rates, (too low for the Irih economy), the single currency, and easy credit due to deregulation of the finance business. With their shackles off bankers lent too much, politicians, or rather FF, employed Peter Bacon to say high property prices were good for the Irish economy, which was what they wanted to hear because their developer buddies were coining it. The media cheer-lead the boom, and for a while people felt very rich with money they’d borrowed from Germany mostly. The Irish economy was 25% construction, twice the average in other countries.

Well the multinationals have fucked off to Poland where it’s cheaper to do business. The world banking system has blown up. The constructuion business has died, the revenue returns flattened, the exchequer is broke and the public service wage bill is draining the life out of the rest of us. Some day when this is all over there’ll be an answer to how far property prices are going to fall, but it won’t be any time soon.

Just under the waist :stuck_out_tongue:

Thats below the belt.

just above the waste :blush:

…and yet everyone thinks a kip house in Dublin is still worth a million. Nought queer as savvy folk. Irrational…and now the greens want to prop up ever over extending robo paddy. FOR THE LOVE OF GOD WILL SOMEONE THINK OF THE FUTURE GENERATIONS and just get one with it.

For the life of me I don’t know.

A few people I know are mad keen to buy now and feel they need to make the jump soon before things pick up again. This view is alarmingly prevalent.

Similarly, AAM is full of halfwits convincing themselves that their 5 interest-only mortgaged, megatived equitied, vacant properties in Roscommon are the gateway to riches. The feeling seems to be that people in the main are hanging on by the fingernails, except for the massively insolvent.

Are there enough people that need to sell out there? Are they being forced to take the hit?

A bit of me wonders is there going to be a plateau for years where nothing much sells as buyers can’t raise finance, sellers won’t sell for less than it’s worth and banks won’t foreclose and a small market exists in properties from wills, the hopelessly insolvent.

I suppose a question might be how big a segment of the population own a second house that they will top up the payments on no matter what happens?

If the thing was allowed to run it’s course properly, I’d imagine Morgan Kelly’s 80% is plausible.

The current low rate of interest rates is a double edged sword.
It’s great because without it we truly would be fubarred it’s giving a lot of people just enough room to pay off their stuff.
The issue is that the actual capital left to pay on huge numbers of mortgages is so high that even in 4 or 5 years a 3 or 4 % rise in interest rates would sink many people.

An international global recovery will in fact be likely to deal Ireland a massive second blow to the kidneys.
NAMA is largely an attempt to put some manners on the developers empties.
Lets see what the non-nama banks do about their piles of shite. Even though they have a low share of the market they would easily have enough shite to seriously depress market value if the choose to cut their losses.

The Liam Carroll company liquidation will be key here.

Who voted ‘90%’? :open_mouth:

Things are bad… very bad… but in the name of God, 90%??

So you think you’d pick up a new house (outside of Dublin) for 33k when we bottom out? Get real please!

EDITED TO ADD: Was the peak in 2007 or late 2006? I think they had already started dropping by Q2 in '07.

I voted 80% assuming a flat line period of 8 to 10 years for real prices. Add another 5 years or more to the flatline (Japan to date) and you will have a 90% decline in real terms.

The sooner people realise property is an expense which should be minimized the better.

Robert Kiyosaki (Rich Dad / Poor Dad) has a brilliant maxim, paraphrased here:
Never buy an asset for its’ capital appreciation - always for the yield.

It’s a good compass to follow in these troubled waters.

PS 60%

GET OUT! :imp:

Those are excellent points.

I’m honestly wondering what’s happening out there. Why is the property situation still not being reflected in reality? I can’t fathom it. People on another thread mention examples of apartments in Dublin going for cheap rent, yes, but where are all the cheap 3-bed and 4-bed house rentals? I see a drop in rental prices, but nowhere near the drop I thought we’d see.

I think you’re spot on pugin. It really does seem to be just a question of property-owners STILL holding out and holding out. But what will eventually happen? How does it all end? Is it a case that we are NOW living through the property crash but really will not live through the fall out for quite some time yet? I just don’t know.

It’s a nice mix of Japan / Argentina.

With 30,000 households apparently missing mortgage payments I don’t think you have to wait for interest rate increases to force the issue.
I honestly think the coming budget changes will cause the market to break through the current floor.
Give it a couple of months to kick in.
Does March / April 2010 qualify as “quite some time yet” ?

For me, I’m less interested in finding the bottom as I am in paying fair value. When gross rental yields are at more normal levels, say between 6-8% I will consider buying. Until then, it simply doesn’t make financial sense for me. That implies prices could halve again from here and that’s sounds reasonable, considering the whole country is broke.

In my opinion, we have hit a little plateau and the country may even ease out of recession next year, without returning to any meaningful definition of growth. Of course, then the property bulls will be screaming at us to buy, buy, buy. Then, when France and Germany can take it, the ECB will ratchet up interest rates big time to avoid serious inflation.

Then the PANIC will surely break out here. Households will default all over the place. You haven’t seen anything yet. IMO.

I think you’re on the money with this. The plateau you mention could that be anything to do with the “wait and see what happens with NAMA” as in property prices slow to move either way until people know better?
For me the decider will be Interest Rate increases from the ECB, our economy going slowly down the toilet with more taxes, less spending and an increse in not just mortgage but overall borrowing defaults which they know is coming down the track and hence calls for a change in the law governing bancruptcy or bad debt.

Not sure if its NAMA or just that some sections of society have adjusted to the new reality better than others. This is, of course, helped by interest rates pegged at emergency levels.

Of course, that will change when rates return to a more normal 4-6%, maybe even double digits if all the stimulus money seriously ignites inflation. Considering the average mortgage in Ireland is 260k, it doesn’t take a mastermind to imagine the effects.

IMO, it will really hit the fan in Ireland (and Spain) in 2011. The EU/IMF will probably step in. By then it will be widely accepted that NAMA is a failure.

EDIT: I saw figures last night (sorry I don’t have a link) that indicate Ireland has around two years of oxygen left at the rate it’s borrowing. i.e. by then, we will have reached government debt in excess of 100% of GDP - Game over, hello IMF. In those two years, this government needs to face down then unions, slash public sector pay and jobs and massively cut spending (including welfare).

Look at the Dáil. Can the sorry bunch of low-calibre teachers and auctioneers we elected get us out the worst financial crisis of any westernised country?

Those muppets couldn’t even join the Luas lines.

I will buy when it makes financial sense to stop renting. I would settle for a nice terraced redbrick in d6 for 350k - I wont get approved for that much even though the rent I pay now would come close to the mort repayment. I need to save some more for deposit and this will get me to the level where I need a smaller sum mortgage approved.

I would also have to pay stamp duty so the longer I wait the more I stand to save.

It seems the people in desperation on AAM are the ones with many properties, some in NE with no hope of selling. People are indeed sitting tight and it seems NAMA is putting a floor under it - lets see if the ECB want to keep shelling out money to pay for the disgusting thefts that occurred and are still do.

The metro is printing horrible lies that Nama is a bad bank that will make the tax payer 5 billion. I call bullshit. How about ‘we need to re-infalte the bubble to get prices up 10% in 10 years to break even’ - let the banks drown, let the prices fall, let us get on with trying to live in the country without getting shafted every day. The banks of course are repossessing their inflated mortgage backed asset but keep any defaults hidden like skeletons in the closet so the dog and pony show can continue.