The future of Dublin property

Re: Bits....

BTW when I die they get the lot anyway!!

Not if you spend it first! I'm not being facetious. The lengths some people go to squirrel their wealth away in order to pass it onto their kids when they pass on, or before in the case of certain property purchases, amazes me. At some point adult children should be able to stand on their own two feet and fend for themselves.
 
My two cents

While you can't predict the future, I feel there is most definitely an element of bubble in house prices.

Look at the figure historically, 33 years ago, house prices outside of Dublin were c.£3000 and a redbrick in D6 would cost you c.£4000. Today it's Eur 150k as versus Eur 500k.

You have to ask youself, stripping out the historical variables (70's economic stagnation, one income households, high rates of interest, as versus 00's high demand, congestion avoidance premiums and low interest rates and higher pay with double incomes the norm), is it sustainable?

So long as people have the confidence, capability and willingness to pay 10 times the average salary for a house they will, but change the variables and that WILL change. It's just a matter of when.
 
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Average mortgage payments as a percentage of take home pay are lower now than at any time in the past 40 years.

No evidence of a bubble, Dinny
 
Bearish - Mortgage repayments aren't a good measure of house prices. Mortgage repayments are a function of house price AND interest rate AND repayment period.

When we bought our house in 1994, we went for a 20 year mortgage which was the norm at that stage. Today, most FTB's I know seem to be going for 25 or 30 year mortgages. Hence the repayment level is reduced. Also, today's historically low interest rates play a big part in keeping repayments down.
 
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Low interest rates have made houses in Ireland more affordable now than at any time before.

Anyone waiting for a price crash is a fool.

No one knows what the future holds for house prices. Crashes were predicted in 1998 by the central bank, and in 2001 by the ESRI. Double digit house price growth continued.

My point is that there is little evidence of a bubble.
 
Re: ..

On the other hand, Alan Greenspan warned of "irrational exuberance" in the US stockmarket in 1996 and was mocked from a height for a period of several years. He has since been proved right.
 
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Keep on predicting a house price crash, or even the end of the world, and one day you will be proved right.

Did Alan Greenspan have anything to say about the state of the Irish housing market ?
 
Re: ..

Anyone waiting for a price crash is a fool.
Click to expand...

Is this the same Bearish that I had a huge debate with 12-18 months ago when he was advising FTB's not to purchase their houses and to wait for the price drop he was expecting?
 
Re: ..

[broken link removed] how Irish Times readers voted on this topic.
 
Property

Interest Rates are still low and may drop lower. This can only be a help.
 
Imposter

Hi Rainyday,

That bearish certainly was'nt the real Bearish. As you know I have a very different view of where house prices willl go - down!
 
Re: Imposter

Hi Bearish - He said they were going down too - but that was about 18 months ago!
 
Re: Imposter

IMHO there are two main circumstances in which property prices will drop significantly (i.e. over 10% in a year). Firstly interest rates increasing dramatically to, say, 8%, over a very short period of time - given the behaviour of the ECB to date this is very unlikely. However people tend to cut back on luxuries, but cope, if mortgage payments rise but if they have no income they will have to look at trading down, thus the more probable (but still unlikely) scenario is a sustained increase in supply caused by rising unemployment. If this were widescale the number of available properties would increase and it would become a buyers market especially (I think?) as there is no State aid for mortgage holders who lose their jobs. We've seen this already in the rental market - if you are trying to let a property in an estate which is over supplied you have to drop your price....

Sarah

www.rea.ie
 
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Good point Sarah. Neuther scenario is likely in the forseeable future.

I'd be worried about relying on price predictions from stockbrokers. Weren't these the same people who have been telling people to put money into equities over the past 3 years ?
 
multiple of salary loaned

Somewhere on p1 of this debate, somebody knowledgeable claimed that the banks won't lend more than 3.75% of annual salary......wrong! I've been offered 4.5% as a FTB when I was getting quotes from various banks- I earn around 50K and was looking to buy a 2-bed house in Dublin on my own... In fact they offered more than I could actually afford to repay, as a single parent.
 
interest rates

It strikes me that unnaturally low interest rates are holding the Irish property market together and people are probably right to believe that rates are likely to go lower/ stay low for the next number of years.

However people don't seem to take this a step further and ask why rates are so low and think about the consequences.

Rates in Ireland are probably 3-4% lower than they would be ex EMU.It is the exceptional weakness of the main European economies that has rates so low.Rates are even lower in the US.

Do people really believe that the level of economic activity in Ireland can be immune ?

Lots of normally bright people are now caught up in the current property 'frenzy' seduced by the easy availability of cheap money.

I fear for those getting involved at this stage.Gearing is great when things go up but very painful when things go down (or when your property is vacant for a while).
 
can you 'short' property

buddies of mine have just paid 590,000 for a three bed semi at auction not far from lovely Dolphans Barn. Madness for sure. That house will not double in value in my lifetime. (and I'm in my thirties). They were desperate to buy. Even houses as moderate as that are going to auction. People subtract the cost of there old cheaper house and start to think in terms of the price minus the old house price to make it seem cheap. My money's on a crash but like someone else said thats an easy prediction to make. Guessing the timing is the real task.
 
Re: can you 'short' property

Trying to time your purchase on something as substantial as a house is madness. No one can predict where house prices will be in five or twenty five years time.

If you can afford to, and want to buy, and don't want to keep on paying off your landlord's mortgage for him, then buy, otherwise don't. A house is for living in, not just a financial investment.

With interest rates historically low and falling, and the economy strong, there is little sign of a major wobble in the immediate term anyway.
 
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