Will idle speculation do?Comments and insights welcome.
is property not a better place to weather the storm than a bank account?
Alternatively, some people suggest that 2001 was when property prices last reflected fundamentals - this being the last time that normal interest rates applied.
But since then -
A. there has been a massive increase in housing supply.
B. A recession in elements of the economy not reliant on the low interest rate fuelled construction boom.
So as the bubble bursts, wouldn’t rents in real terms not be lower, thus meaning that property prices will in real terms be lower than in 2001?
Comments and insights welcome.
Everybody will be paying more to the banks in interest (say 5%) and rents will start to creep back up.
Most city born people will still not be able to afford a house in the area they grew up in. That regrettably, is never going to change. Some dream about house prices falling 50% but if that happens there will be other consequences for the economy such as job losses and therefore no income for those on the fence to buy that cheaper house.
Stats are hereHmmm:
I didn't know housing lagged inflation, and that would surprise me.
....That regrettably, is never going to change. Some dream about house prices falling 50% but if that happens there will be other consequences for the economy such as job losses and therefore no income for those on the fence to buy that cheaper house.
Keep dreaming.Medicine for the Irish economy and people
House asking prices to drop 5% to 10% between August 06 and December 06 – some evidence of this already with asking prices coming down. Interest rates up one quarter of a percent by 31st December. Sellers expectations take a hit and trust in estate agents really goes out the window because houses are on market 4 - 6 months with their valuations and still hasn’t shifted with the decrease in asking price. Estate agents start to be conservative in valuing houses which holds prices. Vendors accept this new climate as plenty of stories in the pubs at Christmas about houses on the market for months.
No changes to stamp duty in December budget or other measures in regard to housing and this brings all the fence sitters out and houses start changing hands again. House prices stay flat for a time (6 months max) before returning to <10% growth.
I believe people will just defer selling....
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