Current public sentiment towards the housing market?

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It is only easy money if you're able to sell it. If you have sold at this stage, ninsaga, and creamed of a couple 100k, well then good man. A man with some financial 'savvy'.

It is the more recent speculators bought in poorly serviced areas of Dublin, Kildare, Meath etc. not doing so with their eyes open. They only see dollar signs (as in the cartoons) and can't afford to take a loss.

The Eircon floatation should serve as a working example to these speculators. Eircon shareholders took a massive hit at one stage, but, at least they were able to dump the shares back onto the market and realise a loss. Some property speculators create an imaginary safety net by telling themselves, "Sure, if it doesn't work out, I can always sell it". Property is one of the most illiquid assets out there and the property market will be a different beast when it becomes a sellers' market. These novice speculators need their wings clipped.
 
Redo... 1st you say....

redo said:
Seeing property speculators being caught with their pants down when prices drop. That would be nice.
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Then you say.....

redo said:
Please note, I have no beef with property investors, whom after carefull analysis, will see it as a long term investment and know what they are getting into.
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and finally....

redo said:
These novice speculators need their wings clipped.
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...does this mean so that if someone gets it right as far as you are concerned then good for them & also as far as you are concerned if they get it wrong that they had it coming anyway & deserved it? I'm just trying to understand your logic here?
 
Florida is about a year ahead of us

The peak was c May 2005 around 1 year before the Irish peak . All sourced from Palm Beach Post

The newly and happily renting

"It was the same price as an apartment, so we might as well get the house," Lewis, a registered nurse at Columbia Hospital, said of their decision.
Welcome to the flip side of the housing boom, where renters can afford brand-new dream homes while
landlords struggle to meet their monthly mortgage payments.
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The mega commute of 80 miles each way

This canyon between paychecks and home prices bars even well-paid middle-class workers from homeownership and seriously threatens the county's economic growth. The housing crisis is so acute that business leaders now have joined housing advocates to demand that government do something about the affordability crunch.
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and Flipper Flop

If he doesn't sell the four-bedroom home, he'll have to walk away from contracts on two other investment homes — one in the new Port St. Lucie community where he lives and another in West Palm Beach. If he pulls out of those deals, he's down $80,000.
"I was never much of an investor before this wild craze began, and somehow I backed into it," Passarelli said.
So it has gone for many less-experienced flippers who bought heavily into pre-construction deals in large communities on the Treasure Coast. Instead of the quick riches they expected, many have encountered a slow market in which buyers are hard to come by.
Some are stuck carrying mortgages longer than expected, cutting their asking prices or walking away from contracts altogether.
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This will be our lot in 2007 / 2008 .

The area is not in recession yet . Thats the good news.
 
ninsaga said:
Redo... 1st you say....



Then you say.....



and finally....



...does this mean so that if someone gets it right as far as you are concerned then good for them & also as far as you are concerned if they get it wrong that they had it coming anyway & deserved it? I'm just trying to understand your logic here?
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Property investors and property speculators are actually not the same. Investors tend to be in it for the long haul, make decisions based on actual income derived from the asset (rent, in other words). Speculators expect to make money out capital appreciation, and so rent is of little importance to them. Currently, a lot of recent entrants to the rental market supply side are subsidising their tenants to the tune of a couple of hundred a month on the grounds that capital appreciation will make the difference for them. In property, because capital tends to be tied up, it's a very risky thing to do. If the market even flattens, without a corresponding increase in rent, people dependent on capital appreciation could be in deep trouble.

The problem is a lot of new landlords are of the opinion that they can, of course, pass on increases to their tenants. The problem is they can only do that if the market allows them to. Currently, it's not happening. Rents are more or less flat, and dropping in real terms. There is already an over supply of rental accommodation, there is anecdotal evidence to suggest that a lot of "investment" properties were not let because capital appreciation was more than adequate to turn a profit. To my mind, there's a lot naiveté in that sector of the market.

Me personally, I don't have a lot of time for people who assumed or continue to assume that they can make a killing on capital appreciation. They're not usually good landlords and they are not well up on their duties as landlords. On the other hand, investors who recognise that rent is the only guaranteed income, and make their decisions accordingly are likely to make better landlords and not make ill considered decisions based on "making a killing because property always goes up". Depending on capital appreciation is a gamble because until you sell the property, the profit is nothing other than notional.
 
ninsaga said:
...does this mean so that if someone gets it right as far as you are concerned then good for them & also as far as you are concerned if they get it wrong that they had it coming anyway & deserved it? I'm just trying to understand your logic here?
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:D Yes in a nutshell.

Those who are already out, are no longer in the market and have cashed in. They probably saw what was on the horizon and have done well. Therefore we can assume they are no longer speculators and have acted wisely. I don't think there many speculators in the market whom have cashed in to-date and have made a loss. Also, note that I have distinguised between investors and those speculators who are gambling on capital appreciation. Good Investors will have factored in potential losses, some speculators have not.

I would like to hear some speculators complaining down the local pub about the investment property they bought in West Dublin/Bulgaria/Dubai, and how the property brochure said it would increase in value. I would feign sympathy, and offer, "Sure, at least you can sell it !".
 
redo said:
Those who are already out, are no longer in the market and have cashed in. They probably saw what was on the horizon and have done well. Therefore we can assume they are no longer speculators and have acted wisely.
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You might be giving them too much credit (as distinct from the banks who were probably giving them too much credit as well qwa qwa). I cannot think of a single person I know who has cleaned up selling an investment property who has not then piled the money back into more property. In many cases, the only reason they sold was to raise liquidity and so put deposits down on several more houses.
 
room305 said:
I cannot think of a single person I know who has cleaned up selling an investment property who has not then piled the money back into more property.
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I must confess that all the specimens of the breed that I know _AND WHO ENTERED THE MARKET POST 911_ when the cheap money tap kicked in are the same as that , and I have advised them to cash in and WAIT before they pile in again.

Its the key difference between Long Term Investment and Mania . All the ones I know have erred on the side of Mania.

I give up , que sera sera :( !
 
room305 said:
You might be giving them too much credit (as distinct from the banks who were probably giving them too much credit as well qwa qwa). I cannot think of a single person I know who has cleaned up selling an investment property who has not then piled the money back into more property. In many cases, the only reason they sold was to raise liquidity and so put deposits down on several more houses.
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Quite. Like people who plough back the "profit" back into pryamid schemes.
 
ninsaga said:
But why? What is actually wrong with speculating... thats what keeps the wheels turning in the economy.

Are you just peeved off that you did not get in on the act a few years back & now you've lost out on a few 100k of easy money?

..... a nation of begrudgers etc etc..
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Like others have said, there is a big difference between speculators and investors (it's just that most people in this country can't see the difference).

In the book 'The Undercover Economist', the author tells of the example of a wall street mutual fund manager who took all his funds out of stocks in 1997 because he thought that the market was seriously overvalued. He was ridiculed by his peers and the business press and actually was fired as the fund manager in January 2000 (2 months before the market crash). I feel a bit like him as I have been renting for the last 2 years, by choice, not because I cannot afford a house, despite the fact that everyone I know has bought in the interim and are 'making' piles of money. Everyone from my mother to my next door neighbour is telling me to buy and I still get funny looks when I say that I rent.

I don't begrudge my friends a penny of that money, I made my choice and that's that but the fundamentals are just not there in this boom and I fear that it is all going to end in tears. The longer that it lasts, the harder it will be for the economy to recover.
 
I rent on a road of small semis in D6W which have been selling for just over a million from about 100k back in the 90's.

A couple of weeks ago my wife was walking past two neighbours chatting and one said to the other "we live on a road of millionaires now".

The comment seemed to be timed for the moment she passed and they knew damn well that we rent on the road.

On top of all the other reasons for wanting a correction (potential buyers, more balanced economy long term etc) we are looking forward to welcoming those neighbours back to the middle class :D:D
 
Back to the original question of the thread - there were queues outside Sherry Fitzgerald new homes again this morning. Still plenty of people believing in this property market
 
gearoidmm said:
Back to the original question of the thread - there were queues outside Sherry Fitzgerald new homes again this morning. Still plenty of people believing in this property market
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I don't doubt it,i've plenty of well educated friends with good jobs in the 25 - 35 bracket who rarely watch the news,read the papers etc. I used to try and suggest that maybe selling off that investment property and paying down the ppr wasn't the end of the world, but it didn't go down well with some so i kind of just said nothing after a while.
The first a lot of the new "rich" in this country are going to know about a property crash,is when it's already happened.
 
thewatcher said:
I don't doubt it,i've plenty of well educated friends with good jobs in the 25 - 35 bracket who rarely watch the news,read the papers etc. I used to try and suggest that maybe selling off that investment property and paying down the ppr wasn't the end of the world, but it didn't go down well with some so i kind of just said nothing after a while.
The first a lot of the new "rich" in this country are going to know about a property crash,is when it's already happened.
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They've been brainwashed by the cult of property where mantra's such as "prices only ever rise" and "rent is dead money" are commonly heard.
 
Try this - ask everyone you know with investment property what the ECB is.

I've asked a few well-educated and rather shrewd people; and so far two out of three did not know! Those two have a total of 4 large mortages - all taken out in the past 4 years!
 
"I wonder if the Irish media will be able to talk the country into a property slowdown just like the UK media did about 3/4 years ago. Then the UK media began to run increasingly bearish articles on the state of the property market and this coincided with the BoE tightening the monetary screws (just as the ECB is doing now).

I was living in the UK then and the mainstream press had become obsessed with the upward trajectory of property prices. As with present day Ireland however, the property bears were moving from the fringe (the Economist & the FT) to the mainstream (the Daily Mail etc).

What appears to have happened then was a suddend realisation by both buyers and sellers that the go-go days may be drawing to a close and in turn this seems to have prompted some more realistic pricing by both parties. Consequently activity slowed and the balance of power shifted in favour of the buyers - the country did see some house price deflation but no crash as the economy was still ticking along nicely. Since then house price inflation has substantially moderated and the country is getting used to house price gwoth of inflation + 2%/4%.

I an just wondering if all this talk of a property crash in the Irish media may actually precipitate a slowdown before external factors (such as interest rates of a global economic slowdown) really begin to bite? Certainly anecdotal evidence (presented in earlier posts) seems to indicate that this indeed may be the case."



The British may have stopped house prices from rising 2 years ago and have so far avoided a crash. But they are far from out of the woods yet. Thhis is a global issue caused by the FED and the Bank of Japan. If the FED in America and the Bank of Japan are forced to raise interest alot further than they have so far the Bank of England will be force to follow them along with the European Central Bank. They don't have an economy immune from globalisation either
 
I am well aware of the problems facing the UK property market and even though I am a homeowner here I still think that the country has only postponed the correction - not avoided it. Obviously I did not make myself clear in my first poost. I fully subscribe to the liquidity driven / asset bubble hypotehsis that many posters here refer too.

My point was that the UK achieved a slowdown in property price inflation whilst the economy continued to perform well. The BoE base rate is still at a fairly modest level (by historical standards) so the financial screws have yet to be properly tightened - again I stress that the day of judgement has only been postponed.

I wonder if the Irish bias towards property is changing gradually and will this have an effect long before interest rate increases or falling employment make property unaffordable?
 
gearoidmm said:
Back to the original question of the thread - there were queues outside Sherry Fitzgerald new homes again this morning. Still plenty of people believing in this property market
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I wonder did any of them see George Lee's report about impending increases in interest rates when they got home? I thought it was pretty hard hitting for a piece of journalism in this country. I wonder are these queues smaller than say 6,12 months ago.
 
I'm beginning to reach a conclusion that housing supply may have met demand in Ireland. That's demand from investors happy to yield 2-3% on their investments, demand from first time buyers happy to borrow at many multiples of their income (with parental support, or with the aid of doctored wage slips). Rents are falling in real terms, there are tens of thousands of empty homes and consumer debt is vast. There is an ample supply of zoned land to meet demand in the medium term. It could be that the Irish Property Bubble has reached a demand/supply equilibrium before the liquidity squeeze begins in earnest.

However as rates rise, capital growth dissipates, the ability to re-mortgage vanishes and jobs bleed from the construction and dependent sectors; the market will be exposed to a test of fundamentals, and it will fail.
 
Duplex said:
I'm beginning to reach a conclusion that housing supply may have met demand in Ireland. That's demand from investors happy to yield 2-3% on their investments, demand from first time buyers happy to borrow at many multiples of their income (with parental support, or with the aid of doctored wage slips). Rents are falling in real terms, there are tens of thousands of empty homes and consumer debt is vast. There is an ample supply of zoned land to meet demand in the medium term. It could be that the Irish Property Bubble has reached a demand/supply equilibrium before the liquidity squeeze begins in earnest.

However as rates rise, capital growth dissipates, the ability to re-mortgage vanishes and jobs bleed from the construction and dependent sectors; the market will be exposed to a test of fundamentals, and it will fail.
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Yes it seems to me that there is an avalanche of development land/sites coming to market over the past 6 months (area of Ballsbridge for example). Unfortunately for the purchasers of this land it will takes years after planning is secured, building etc before these come to market so when they do it will not be in the crazy times like now. I feel that the boat may have been missed by those who are getting there hands on this land now
 
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