Future price of Irish properties

[Neffa]

How can everybody on this thread be virtually unanimous in their bearish viewpoint on property but be so out of touch with what the market says? It kind of smacks of "we're smarter than youism".

Because I think most people are not going through the (painful) analysis we are going through. Most people are doing this on emotion and gut feel rather than detailed analysis. Frankly, sometimes I wish I could just go ahead and buy as it would be easier than having to think of reasons not to do it!

99.99% of people in Ireland think "Property is my pension" etc. etc. etc. etc. - these views have been well-trotted out in this thread so far. The cheapest credit Ireland has ever seen makes borrowing easy. And because the bulk of the market have only ever seen growth and nothing else, demand rises and the momentum continues on prices. And it will continue to do so, until it gets toppy, when the reverse psychology will kick in.

You won't see any change until the interest rate rises bite and that won't be until this time next year. So we'll probably continue to be out of line until then.

 

[ivuernis]

How can everybody on this thread be virtually unanimous in their bearish viewpoint on property but be so out of touch with what the market says? It kind of smacks of "we're smarter than youism".

Are you saying the bears are out of touch just because prices are still increasing or because we don't know the market well enough?

Plenty of individuals and groups who know the market quite well have issued continual warnings about the unsustainability of the property market.

 

[bearishbull]

as i said earlier the price increases are at present a self fufilling cycle,people dont mind paying more as they assume they will be able to sell it for much more in future and also that they will definitely be earning more in future,obviously theres other factors at play(strong demand,immigration,affordabilty) but its this part that is so dangerous,i'd love to see a survey done of a hundred first time buyers on their beleifs and predictions for the future of the property market,obviously because they are buying they feel prices will keep going up or at least not fall but what makes them so certain (their property belief system) that prices will continue on and upward trajectory.
i think when the many investors in the market who are keeping rents low by accepting paltry yields see prices slowing to less than 3% growth (so no growth after inflation) they will exit market causing a downward movement.

 

[Howitzer]

Are you saying the bears are out of touch just because prices are still increasing or because we don't know the market well enough?

99.99% of people in Ireland think "Property is my pension"

I'm bearish on quite a few of the causal effects of the property boom, notably interest rates. However property as an investment class seems to defy analysis. It just seems strange that there are so few dissenting views on this forum to the future price of Irish property (ie: all negative) whilst Joe Public can't get enough of it.

It's just a strange oul debate when there's only one poster who seems to represent the majority out there. I mean where are all the other property bulls?

 

[walk2dewater]

If there's soooooo much demand for housing how come I can rent a small but beautiful terraced house in south city centre for €1,000/mth???? The place could fetch, I'm guessing, €500k - €1m depending on which way the winds blowing.

Demand is confined to PROPERY FOR SALE, property for rent is cheap as chips.

[Has anyone seen price of gold (or zinc) this week?]

 

[bearishbull]

Are you saying the bears are out of touch just because prices are still increasing or because we don't know the market well enough?

Plenty of individuals and groups who know the market quite well have issued continual warnings about the unsustainability of the property market.

you see the vast majority of people dont have a clue about investment and how to value assets and just assume things will just keep going up if they have been going up for last twenty years.ask a hundred random people in the street what rental yields are in dublin or whats the ratio of average income to average house prices and they will look at you with a blank stare,its only when these sort of people start questioning the constant rise in prices that market sentiment changes significantly.the media has a big part to play too,if the sentiment remains bearish for long enough people will become less optimistic and chances of a correction becomes more real.

 

[Howitzer]

i'd love to see a survey done of a hundred first time buyers on their beleifs and predictions for the future of the property market,obviously because they are buying they feel prices will keep going up or at least not fall but what makes them so certain (their property belief system) that prices will continue on and upward trajectory.

Started a thread on this "FTB's v Interest Rate Rises". Most FTB's seemed more relieved than anything as the rises in the first 1/4 of this year are giving them a bit of breathing space. Even though the interest rate rises do appear to be of concern 'as long as the prices keep going up, I'm all right Jack'.

 

[Loki]

If there's soooooo much demand for housing how come I can rent a small but beautiful terraced house in south city centre for €1,000/mth???? The place could fetch, I'm guessing, €500k - €1m depending on which way the winds blowing.

Demand is confined to PROPERY FOR SALE, property for rent is cheap as chips.

[Has anyone seen price of gold (or zinc) this week?]

And for 20 year in Italy it was cheaper to rent than buy yet they have the second highest home ownsership in the world. I am experience increased rent yields not less.

I also don't beleive the majority of people in Ireland beleive prices can only go up. It's only people who are convinced they will go down or the crash is coming that say the entire country expects rises.

 

[walk2dewater]

It's just a strange oul debate when there's only one poster who seems to represent the majority out there. I mean where are all the other property bulls?

The bulls are being "proactive" [speculating] about the "long-term" [until they can't flip debt anymore]. They're out there getting on with their lives [debt fueled] and have no time for moaners and whingers [independent thinkers] who are afraid to grow up [subsidise 50yr old early retirees].

 

[Howitzer]

The bulls are being "proactive" [speculating] about the "long-term" [until the can't flip debt anymore]. They're out there getting on with their lives [debt fueled] and have no time for moaners and whingers [independent thinkers] who are afraid to grow up [subsidise 50yr old early retirees].

I was going to say the same thing [without the square brackets].

 

[bearishbull]

Started a thread on this "FTB's v Interest Rate Rises". Most FTB's seemed more relieved than anything as the rises in the first 1/4 of this year are giving them a bit of breathing space. Even though the interest rate rises do appear to be of concern 'as long as the prices keep going up, I'm all right Jack'.

a friend of mine has a interest only mortgage , i dont think he realises that since he first got his mortgage a year ago untill the projected rates of close to 5% next year his repayment will have risen 66%!! ,he too thinks "prices will only rise so it doesnt bother me if my repayment rises" ,people then say ah 5% is nothing i remember when rates where 14% etc but this is nonsense as inflation rates were much higher(many times even higher than interest rates) at those times which reduced you real mortgage debt independent of repayments.

 

[walk2dewater]

And for 20 year in Italy it was cheaper to rent than buy yet they have the second highest home ownsership in the world. I am experience increased rent yields not less.

I also don't beleive the majority of people in Ireland beleive prices can only go up. It's only people who are convinced they will go down or the crash is coming that say the entire country expects rises.

Right. But why does my home which is worth 500k-€Xm rent for €1,000/mth? Maybe I should send my question in to Edel Morgan at the Irish Times property Q&A section, I'm sure she knows... oh hang on I know... my landlords in it for the "long-term"...

 

[walk2dewater]

I was going to say the same thing [without the square brackets].

LOL!

 

[Neffa]

I'm bearish on quite a few of the causal effects of the property boom, notably interest rates. However property as an investment class seems to defy analysis. It just seems strange that there are so few dissenting views on this forum to the future price of Irish property (ie: all negative) whilst Joe Public can't get enough of it.

It's just a strange oul debate when there's only one poster who seems to represent the majority out there. I mean where are all the other property bulls?

Read the property for investment forums - there's a ton of them there and you can see the thinking which drives them. I've a feeling this forum is "the dark side" so they don't come here - save for Loki.

 

[Duplex]

Extraordinary Popular Delusions And The Madness Of Crowds
By Charles MacKay
1841

In reading the history of nations, we find that, like individuals, they have their whims and their peculiarities; their seasons of excitement and recklessness, when they care not what they do. We find that whole communities suddenly fix their minds upon one object, and go mad in its pursuit; that millions of people become simultaneously impressed with one delusion, and run after it, till their attention is caught by some new folly more captivating than the first. We see one nation suddenly seized, from its highest to its lowest members

http://www.litrix.com/madraven/madne001.htm#1

 

[Neffa]

Central Bank has just reported lending figures for Feb:

- up 29.4%, highest in a single month since March 2000
- €5.6bn growth in month
- €268bn total Private Sector Credit, roughly half attributable to households
- €102.5bn mortgage lending

 

[Howitzer]

I've a feeling this forum is "the dark side" so they don't come here - save for Loki.

Well then fair play to him for sticking his neck out.

 

[Loki]

Right. But why does my home which is worth 500k-€Xm rent for €1,000/mth? Maybe I should send my question in to Edel Morgan at the Irish Times property Q&A section, I'm sure she knows... oh hang on I know... my landlords in it for the "long-term"...

The point is why are you obssed with rent yields when obviously under some situations they don't matter and the situation can go on for decades. According to people here it has an instant effect and means the market MUST crash and that it IS a bubble. THere is proof that it is not.
People here can only see property investment one way and never consider the property stock and only economics with one theory aand isnsit on forcing a fit without proof.
ASk for proof and you get riddiculed.

I have yet to understand how advertising of foregin holiday homes indicates that investors here are pushing up prices in this market. Yet that is what is being siad and people agreed with it. You want to say I am the crazy one living in a dream world I think you should look around at what people are actually are saying and stop agreeing with each other becasue you all think in the same outcome. Try using facts instead of magical insight

 

[bearishbull]

is there anyway of ignoring certain posters on askaboutmoney?

 

[walk2dewater]

The point is why are you obssed with rent yields when obviously under some situations they don't matter and the situation can go on for decades. According to people here it has an instant effect and means the market MUST crash and that it IS a bubble. THere is proof that it is not.
People here can only see property investment one way and never consider the property stock and only economics with one theory aand isnsit on forcing a fit without proof.
ASk for proof and you get riddiculed.

I have yet to understand how advertising of foregin holiday homes indicates that investors here are pushing up prices in this market. Yet that is what is being siad and people agreed with it. You want to say I am the crazy one living in a dream world I think you should look around at what people are actually are saying and stop agreeing with each other becasue you all think in the same outcome. Try using facts instead of magical insight

Ok, so you havent a clue. Anyone else know why my rent is SOOOOO cheap?