Current public sentiment towards the housing market?

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badabing said:
I think there is a bit of a brainwashing censentual air about this thread. Many (most) are predicting a collapse in prices, yet despite interest rates already up 63%, the market has barely budged on the whole, with many prices static, or down 5-10% on some less desireable propertries.
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what percentage of price drop would you equate to being a "crash" badabing?
 
badabing has a reasonable point, I think. If you've been following itulip.com et al, you'll see that two ways out have been forecasted for the housing market:
  1. property prices stagnating as all other prices rise to meet them (possibly hyper-inflation)
  2. property prices crashing
Some (many?) commentators in the US could possibly see #1 happening, and hyper-inflation brought on by the US government, in order to avoid defaulting on the government debt; i.e. all kinds of debt are made cheaper.

Here too, I think that they are the only two ways out - but if you believe that the ECB is going to stick to its guns and maintain price stability, then only #2 will happen. Depends on the level of inflation, etc., but the ECB haven't shown signs of giving into inflation just yet.
 
Duplex said:
I suppose the Irish could never imagine an era of wage deflation. Americans don't have to imagine. http://www.dol.gov/ Go to average hourly earnings table B historic data
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Not if you work in IT in Ireland - wages are still way below 2000 highs. And not likely to rise any time soon! I believe wages in the private non-protected sector have also been stagnant or declining for the last 5 years.

Only in the public and protected sectors are real wages static or increasing. And of course, that's not good for the country long-term. We have an emerging situation where a large chunk of cossetted workers are being funded with ever-increasing wages by another group of workers whose real wages (and real standard of living) is being eroded, and currently being maintained only through increasing consumer debt.
 
asdef said:
badabing has a reasonable point, I think. If you've been following itulip.com et al, you'll see that two ways out have been forecasted for the housing market:
  1. property prices stagnating as all other prices rise to meet them (possibly hyper-inflation)
  2. property prices crashing
Some (many?) commentators in the US could possibly see #1 happening, and hyper-inflation brought on by the US government, in order to avoid defaulting on the government debt; i.e. all kinds of debt are made cheaper.

Here too, I think that they are the only two ways out - but if you believe that the ECB is going to stick to its guns and maintain price stability, then only #2 will happen. Depends on the level of inflation, etc., but the ECB haven't shown signs of giving into inflation just yet.
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Both 1 and 2 are crashes. 1 is caused by drastically devaluing the currency that's all.
 
Sidewinder said:
Not if you work in IT in Ireland - wages are still way below 2000 highs. And not likely to rise any time soon! .
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Depends on what area of IT you work in. I know of plenty of people earning very good salaries in IT.

Although I dont know what the 2000-era rates were like.

Certainly System Analysts, Project Managers, and J2EE developers are in high demand and demand high salaries.
 
The vested interests have been trying to ingrain the soft landing theory into buyers minds for the last few years so that people believe that the worst case scenario is house prices standing still, and that there is not really a risk involved in borrowing as your capital is pretty secure.
 
[Here too, I think that they are the only two ways out - but if you believe that the ECB is going to stick to its guns and maintain price stability, then only #2 will happen. Depends on the level of inflation, etc., but the ECB haven't shown signs of giving into inflation just yet.[/quote]


Re: the ECB - the property bubble is an Irish problem, not a European problem, and the ECB will act accordingly.
 
Arthur Daley said:
Agreed, it could be argued on another hand that the bubble has been bad for society and unpatriotic as it's long term making the country uncompetitive, and generating unrealistic expectations of living standards.

As far as bullish sentiment goes if increases in rates are trigerred by inflation then the following should temper some of the concerns on rates into 2007, which in turn will maintain some affordability for ftbs.(assuming 35/40 year terms etc etc)
Sharp dip in euro inflation confirmed

http://www.rte.ie/business/2006/1017/eurozone.html
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Spotted that earlier, coupled with another article on low German confidence.... interesting.

However, like the bulls say, a few swallows don't make a summer. I'd expect oil won't settle at those lows now that OPEC have responded by cutting output.

Money supply is still a worry for the ECB too.
 
Duplex said:
I suppose the Irish could never imagine an era of wage deflation. Americans don't have to imagine. http://www.dol.gov/ Go to average hourly earnings table B historic data
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Average Hourly Earnings:
+$0.04(p)

Is this averaged hourly wage out over all of the citizens of the US? I suppose it is.... my god if that was ireland, you can bet your bottom "avergae hourly wage @ $0.04c" sentiment would never have even got started.

This is the kind of thing revolutions have started over, much less in fact!
 
SteelBlue05 said:
Depends on what area of IT you work in. I know of plenty of people earning very good salaries in IT.

Although I dont know what the 2000-era rates were like.

Certainly System Analysts, Project Managers, and J2EE developers are in high demand and demand high salaries.
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I agree, wages have been rising steadily (and more rapidly recently) since the dot.com bust led to gross over supply in the market.
 
Sidewinder said:
Not if you work in IT in Ireland - wages are still way below 2000 highs. And not likely to rise any time soon! I believe wages in the private non-protected sector have also been stagnant or declining for the last 5 years.
If the construction industry slows, we will churn out thousands of grads and have lots of east european labour about which will not just pack up and go east so we can reclaim the lower jobs.

As said before employers will look to cut wages as growth will have stalled in a slowdown across whole areas of the economy. I think wages could fall by 20% across lots of disciplines. If an employer has 10 cvs he will be able to push down wages compared to the 1 maybe 2 he gets now

japan had to go to 0% to avoid deflation. IMO deflation will be a real risk.
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Open_Window said:
Average Hourly Earnings:
+$0.04(p)

Is this averaged hourly wage out over all of the citizens of the US? I suppose it is.... my god if that was ireland, you can bet your bottom "avergae hourly wage @ $0.04c" sentiment would never have even got started.

This is the kind of thing revolutions have started over, much less in fact!
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Hi OW
In real terms US incomes have remained stagnant since about 2000. The housing bubble and equity release (or debt) has compensated until now. The bond markets are screaming recession, but Oil is back above $60pb as OPEC want a fair price, pushing on inflation again. Its mad, mad, mad I tell ya :D
 
People here rightly claim and I agree that the Celtic Tiger happened in two phases 1995 to 2001 and 2001 to 2006 and that prices should revert back to what they were at around 2001 which should be about the correct price and we can bob along at the rate of inflation into perpetuity. However, IMO what has happened since 2001 is that we build circa 400 houses / apartments which is far too many and that this was not real demand but speculative, and when the dust finally settles and the speculators run for the door the over supply could drive prices down to prices seen long before 2001.. Any views ??
 
badabing said:
One typical home in 'risky' Clonsilla
Original asking price 430k
[broken link removed]=

Latest offer 450k and rising...
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one really important question here for you.

how do you know the latest offer is 450k????? you'd either have to be the owner or an estate agent to know that
 
Maine said:
Sidewinder said:
Not if you work in IT in Ireland - wages are still way below 2000 highs. And not likely to rise any time soon! I believe wages in the private non-protected sector have also been stagnant or declining for the last 5 years. quote]

If the construction industry slows, we will churn out thousands of grads and have lots of east european labour about which will not just pack up and go east so we can reclaim the lower jobs.

As said before employers will look to cut wages as growth will have stalled in a slowdown across whole areas of the economy. I think wages could fall by 20% across lots of disciplines. If an employer has 10 cvs he will be able to push down wages compared to the 1 maybe 2 he gets now

japan had to go to 0% to avoid deflation. IMO deflation will be a real risk.
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Inflation vs. Deflation eh? What about inflation in some things (food, energy, healthcare, things from China/India) and deflation in other things (bonds, stocks, property, wages and currency values in the West) with the overall effect being slight deflation. I believe the technical term is “dis-inflation”.
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SteelBlue05 said:
Depends on what area of IT you work in. I know of plenty of people earning very good salaries in IT.

Although I dont know what the 2000-era rates were like.

Certainly System Analysts, Project Managers, and J2EE developers are in high demand and demand high salaries.
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I concur with sidewinder, I have been in the IT industry in Dublin since 1997, wages peaked in 2000 (Y2K bug) and have declined since, have been showing signs of strengthning lately, yes wages are good but not as good as they were!
 
whathome said:
The September inflation drop is old news, RTE reported it on September 29th:
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Hardly warrants being reported in their business section so. I was just (desperately) trying to drum up a bullish arguement.

Borderlord - it seems a common enough opinion that I share that fair values are about 2001 levels. This suggests a very significant drop of course whenever the tipping point comes
 
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