House Market Weakening?

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Neffa said:
Maybe what's even more interesting is that residential borrowing increased in one month in Ireland by €2.1bn while the UK increased by £9.1bn (€13.3bn).
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They increased debt by over 6x our rate but with 15x the population. We have overtaken them in debt per person and are outstripping them by 2x now ...allowing for population . Our banks must be run by utter morons :(

Now see here.

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Ireland has a much lower GNP than it has GNP . GNP vs debt is a better measure because it strips out multinationals faffing around for tax reasons. GNP is the measure of what effectively stays in the country while GDP is everything before repatriations of profit although GNP includes what companies like CRH repatriate here . Its growth rarely ever catches up with GDP growth as you can see here

MOST COUNTRIES have higher GNP than GDP but not Ireland.

Ireland has GDP of €30691 per person but GNP of €25704 (2004). The UK has higher GNP but lower GDP than we do but the real indicator of ability to service debt is GNP
 
bearishbull said:
Actually i factored in inflation using the mortage calculator at www.jeacle.ie/mortgage the real interest on 500k for 35 years @ average 5% is 333k in TODAYS money, i dont think this calculator takes inflation into account on principal repayment element of the mortgage repayments,the 500k borrowed is reduced by inflation rate after every principal repayment but im too lazy to work it out!
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i worked out the figure for the mortgage repayments over 35 years in todays money assuming 2% average inflation (this is ECB's target) amounts to 357k so added to the real interest makes 690k in real terms assuming you dont pay off mortgage early etc ,but for illustrative purposes it shows that the 500k house must increase by 40% in real terms (after inflation) to break even,so one percent real increase in prices every year,considering incomes are only growing in real terms by 2% and people spend less than half their income on housing i suppose its possible to get close to one per cent real increase per annum in the long term.
 
Do all these calculations additionally pre-suppose no outlays in ongoing maintenance and upgrade work such as new wallpaper, new kitchens and the occasional conservatory?
 
Calina said:
Do all these calculations additionally pre-suppose no outlays in ongoing maintenance and upgrade work such as new wallpaper, new kitchens and the occasional conservatory?
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yes im just talking about the real cost of the finance for a property not its up keep maintenace insurance etc.
 
Just wondering if there is anywhere that you can get figures in Ireland for the number of properties on the market at any given time. When you search with myhome.ie you are restricted to 150 results.

One thing that the US has shown us is that inventory starts to mount first before there is any sign of a drop in house prices.

Just because of my OCD, I went through all the localities in Dubin individually to get the total number of houses for sale. The only one that exceeded the overall limit was Tallaght with >150. Other than that they were all less than 150 and the total was 3165 properties on the market in Co. Dublin. That doesn't seem like a lot really but I have no idea how that compares with other cities this size. I am also presuming that every property in Dublin ends up on myhome.ie.

It would be interesting to follow up on this in a month's time and see if it has changed
 
Bearishbull
Houses and property in general are a very good store of value over the longterm.
I remember reading a report in The Economist that London House prices in 1919 were unchanged from the level after the Great Fire 300 years earlier. It's food for thought that 300 years of economic growth hardly showed in house prices. That all changed in the 20th century with the advent of central banking.`In the previous the world worked on the gold standard which limited the growth of the money supply. The price fixing operation that is at the heart of central banking can create money effortlessly. Houses cannot be. They still require imput of a limited resource (land), materials and labour. They also have a very longterm utility.
Having said that there can be periods where prices run up in excess of what is warrented. I would agree that Irish house prices are vunerable to any number of shocks in the short to medium term. Over the longer term, as long as current monetary policy holds, houses will remain a remarkabey good store of value.
Money supply in the Eurozone is growing in the 8 to 9% range. Already finance ministers are calling for "dialogue" and "policy flexibility", all code for stop raising interest rates!
The forces for inflation are to great to be resisted. Over the longerterm houses will remain a remarkable store of value.
Regards
 
tyoung said:
Bearishbull
Houses and property in general are a very good store of value over the longterm.
I remember reading a report in The Economist that London House prices in 1919 were unchanged from the level after the Great Fire 300 years earlier. It's food for thought that 300 years of economic growth hardly showed in house prices. That all changed in the 20th century with the advent of central banking.`In the previous the world worked on the gold standard which limited the growth of the money supply. The price fixing operation that is at the heart of central banking can create money effortlessly. Houses cannot be. They still require imput of a limited resource (land), materials and labour. They also have a very longterm utility.
Having said that there can be periods where prices run up in excess of what is warrented. I would agree that Irish house prices are vunerable to any number of shocks in the short to medium term. Over the longer term, as long as current monetary policy holds, houses will remain a remarkabey good store of value.
Money supply in the Eurozone is growing in the 8 to 9% range. Already finance ministers are calling for "dialogue" and "policy flexibility", all code for stop raising interest rates!
The forces for inflation are to great to be resisted. Over the longerterm houses will remain a remarkable store of value.
Regards
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Tell that to residents of japan who bought in years before the crash. Theres no guarantee they will rise with inflation in future,during the 1980's they didnt keep up with inflation for several years. Stores of value dont always keep up with inflation eg:fiat money.
 
gearoidmm said:
Just wondering if there is anywhere that you can get figures in Ireland for the number of properties on the market at any given time. When you search with myhome.ie you are restricted to 150 results.

One thing that the US has shown us is that inventory starts to mount first before there is any sign of a drop in house prices.

Just because of my OCD, I went through all the localities in Dubin individually to get the total number of houses for sale. The only one that exceeded the overall limit was Tallaght with >150. Other than that they were all less than 150 and the total was 3165 properties on the market in Co. Dublin. That doesn't seem like a lot really but I have no idea how that compares with other cities this size. I am also presuming that every property in Dublin ends up on myhome.ie.

It would be interesting to follow up on this in a month's time and see if it has changed
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For future reference you might'nt have to count all of them, just take an approximately representative sample of districts.
 
Howitzer said:
Title of article: End of road for soaring property market. I've got the impression for quite a while that the Indo has been trying to talk the property market down.

http://www.unison.ie/irish_independent/stories.php3?ca=9&si=1645649&issue_id=14300

(Free registraion required)
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Yes it is refreshing to see the Indo give what is a balanced view of the market. I didn't realise that properties in Glasnevin have had to slash the price to garner interest. If ECB hikes on Thursday then it could become more interesting very quickly
 
"The soft landing seems to be happening. It won't happen across the entire market in one fell swoop and it won't hit geographically at the same time."
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So the top has arrived. What happens now, will investors remain interested in a market when prices stop going up? I think that the prospects of minuscule yields will discourage new entrants into the market. Current participants will begin to realise that without double digit capital growth Irish residential property is not such an attractive proposition. The next sign that the fabled 'soft landing' is a myth, will be a run up in the inventory of unsold homes.

Expect a few stories such as this tale from Tuson, Arizona where the market peaked last summer.

http://www.websitetoolbox.com/tool/post/sdcia/vpost?id=1205179&trail=30
 
I have been observing a slight slowing down in the market in my area for the past few months, properties that were going on at ludicrous prices have been slowly moving back down to more realistic prices, ie back down to the levels of a year ago. Seeing that headline this morning just brought a big smile to my face! Seems the worm has turned.....
 
beattie said:
Yes it is refreshing to see the Indo give what is a balanced view of the market. I didn't realise that properties in Glasnevin have had to slash the price to garner interest. If ECB hikes on Thursday then it could become more interesting very quickly
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I dont see any such slowdown here in Glasnevin, the property mentioned "Addison Park" is a new development of apartments duplexes and small houses and not a standard 3 bed semi/terraced with a garden etc. Else where in glasnevin theres huge interest in period properties and some new builds.
 
snuffle said:
I have been observing a slight slowing down in the market in my area for the past few months, properties that were going on at ludicrous prices have been slowly moving back down to more realistic prices, ie back down to the levels of a year ago. Seeing that headline this morning just brought a big smile to my face! Seems the worm has turned.....
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Where is your area?
 
Looked at one place in addison. Not sure if its the one mentioned in the newspaper but its price 600,000 for a 3 bed duplex. Now that price is wrong. 600 might scrape you a victorian terrace in glasnevin (more likely phibs though) but for a duplex someone got the price wrong initially.
 
What worries me about this article is that it provides no evidence for a "soft landing" other than the words of a few vested interests. This could just easily be the first signs of particularly long and nasty housing price crash.

In the Sunday Independent this week, property editor John O'Keefe opined that:

[FONT=Verdana, Arial] The housing market may be nearing the end of this particular journey, but it is not a bad thing. Cool heads and calm decisions by us all will ensure a housing market in the near future driven by common sense and respect rather than foolhardiness and greed.
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http://www.unison.ie/irish_independent/stories.php3?ca=9&si=1645228&issue_id=14299

In a speculative boom that was driven by greed and self-interest is it not somewhat foolish to assume that altruism on the part of investors will prevent a crash?

If I had an investment property right now I would sell.
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phoenix_n said:
Looked at one place in addison. Not sure if its the one mentioned in the newspaper but its price 600,000 for a 3 bed duplex. Now that price is wrong. 600 might scrape you a victorian terrace in glasnevin (more likely phibs though) but for a duplex someone got the price wrong initially.
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I wonder if any "flippers" got burned at the E600K price. These will be the first people collared by a turn in the housing market and, quite frankly, they deserve to be.
 
Howitzer said:
I wonder if any "flippers" got burned at the E600K price. These will be the first people collared by a turn in the housing market and, quite frankly, they deserve to be.
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Agreed, no sympathy for them
 
[DNG reports slowdown in second-hand Dublin house prices]

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cjh said:
[DNG reports slowdown in second-hand Dublin house prices]

[broken link removed]
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The very fact that estate agents are on the front of the Independent telling us that everything is not 110% perfect with their get-rich-now scheme is absolute dynamite. There is something going on.

As for rents falling? These salemen haven’t a clue. If the demand to purchase is falling, this will put upward pressure on rents. Rents should rise, or at least stop falling, if Ireland’s young stop being property fodder. Dimwits in expensive suits.
 
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