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Current State Of The Property Market - Bottom or Dead Cat Bounce?


libertarian-right

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Apr 23, 2007
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2,492
Folks, we should begin discussions on the current state of the property market. Why? Because we are a strange obsessed breed that loves the aul bricks and mortar.

Property prices rise for third month in row amid hopes the worst is over - Property & Mortgages, Personal Finance - Independent.ie

A THIRD month in a row of property price rises across the country has prompted hopes that the worst may be over for the bombed-out market.
After five years of price plunges, there was also a strong rise of 2.4pc in house and apartment prices in Dublin.
Our media are constantly feeding us with drivel about a "soft landing", "at the bottom", "near the bottom", sitting on our bottoms, etc etc.

Are we at/near the bottom? Is this the classic dead cat bounce? Is NAMA restricting supply? Is the government desperate to make an artificial floor with terrible thoughts that property = economic boom? Will there be more measures introduced by government to try lure/trap people into buying? Or will we soon be entering into the Japanese style crash?

Discuss.
 


RobertW

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Feb 11, 2011
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20,483
She's bottomed out pal, buy now, you won't be sorry.
Seriously stupid advice.

House prices will only begin to rise again when people are back in work, emigration has slowed and there is generally more money in the economy.

That ain't gonna happen for some time.
 

gijoe

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Dead cat bounce. The tax reliefs are coming to an end at the end of the year. People who can buy now are doing so to lock-in the 7 year mortgage interest tax reliefs. Therefore come January 1st it will go wallop again.
 

Mr. Bumble

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She's bottomed out pal, buy now, you won't be sorry.

I would suggest waiting to see what the next three budgets bring - household tax, water charges, income tax increases, pay cuts etc. - before rushing to buy.
 

Analyzer

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I reckon is is a bounce, but that within six months it will be lower.

There is a technology boom in place at the moment. And it is bringing a lot of investment into Dublin. This helping to prop up the rental market.

And that 20 billion that is being borrowed every year is also propping up the real estate market, and rental market.

If that stopped, prices would be more realistic.
 

constitutionus

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theyre not even the full figures as the CSO dont take account of cash purchases.

look im NOT anti property. there will be a time when its a good investment for those into that sort of thing. hell the alsop auctions show guys garnering 7% plus returns on the stuff theyre punters are buying.

but theres simply TOO MUCH still up in the air in connection to the whole sector for anyone to call "the bottom" yet

christ we dont even know the ramifications of the property tax yet.

the smart money is still waiting to see what the story is and TBH all this margin of error "growth" sounds like bolloxology to me.

particulary as we cant ALL buy gaffs in blackrock.

:D
 

Con Gallagher

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Let's see what the lie of the land is:
450,000 unemployed
40,000 emigrants
Interest rates can only rise
Nama stockpile of properties to be released
Ghost estates lie in every county
3 more bad budgets (at least)
End of tax reliefs
Property Tax
Small increases follow 60% drop from the most inflated property bubble of all time, anywhere
A threat to the low corporation tax lingers
Further cuts in numbers in public service.
 

Truth.ie

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This is the flushing out of cash buyers.
There are 300'000 empty properties.
A lot more properties than cash buyers.
NAMA haven't even released the bulk of their portfolio onto the market.
Couple that with a change in the bankruptcy laws, in about 2 years time we will see a real flood of houses on the market.
Thats the time to buy.
 

Happytolearn

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This is the flushing out of cash buyers.
There are 300'000 empty properties.
A lot more properties than cash buyers.
NAMA haven't even released the bulk of their portfolio onto the market.
Couple that with a change in the bankruptcy laws, in about 2 years time we will see a real flood of houses on the market.
Thats the time to buy.
The bit about the bankruptcy laws makes a lot of sense. I reckon it's possible there are a lot of people just waiting to off load.
 

EUrJokingMeRight

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This IS a dead cat bounce. Prices will continue to fall for all of the aforementioned reasons also whilst credit for mortgages is not available to most of the joe soaps, house prices and demand will not rise at all.
 

carlovian

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Jun 20, 2008
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Let's see what the lie of the land is:
450,000 unemployed
40,000 emigrants
Interest rates can only rise
Nama stockpile of properties to be released
Ghost estates lie in every county
3 more bad budgets (at least)
End of tax reliefs
Property Tax
Small increases follow 60% drop from the most inflated property bubble of all time, anywhere
A threat to the low corporation tax lingers
Further cuts in numbers in public service.
But on the other hand Tom parlon claims there's great value out there.

I just can't decide.
 

Toland

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Let's see what the lie of the land is:
450,000 unemployed
40,000 emigrants
Interest rates can only rise
Nama stockpile of properties to be released
Ghost estates lie in every county
3 more bad budgets (at least)
End of tax reliefs
Property Tax
Small increases follow 60% drop from the most inflated property bubble of all time, anywhere
A threat to the low corporation tax lingers
Further cuts in numbers in public service.
Add to that:
The continuing unwillingness/inability of banks to lend;
The low quality (=low value) of existing Irish homes;
The political realisation that rising house prices do not mean sustainable economic growth, and certainly not improved well-being (which often means votes);
The "once bitten twice shy" effect of the bubble bursting;
Future probable sensible planning decisions;
The continued Euro crisis;
The continued worldwide financial crisis;
Likely Chinese economic slowdown in the medium term;

Add as they occur to you.
 

True Republican

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the level of delusion amongst the media commentariat is unbelievable, when are people going to realise that low property prices are good for the economy.
 

Toland

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the level of delusion amongst the media commentariat is unbelievable, when are people going to realise that low property prices are good for the economy.
Low and stable prices are good for the economy. High and still falling prices (as at present, over the medium term) are not.
 
G

Gimpanzee

Seriously stupid advice.

House prices will only begin to rise again when people are back in work, emigration has slowed and there is generally more money in the economy.

That ain't gonna happen for some time.
None of that really matters. People need credit to buy houses. It all depends on the availability of credit.

The idea that house prices move upwards in response and proportional to solid fundamentals, is sooo 2006. The lesson of the bubble, which seems missed here on this thread, is that houses are bought on credit, and the amount of that credit that competing house buyers can avail of is key.

Sure, we have reverted to say 2002 rules on mortgage credit being tied to earnings, but that only keeps the lid on lending. We are currently at historic lows of credit availability, so the lid doesn't come into play yet at all. In other words, not everyone who applies for a mortgage at 'reasonable' multiples of salaries can get one, because there isn't enough to go around right now. But... it is increasing, and it is going to put an upward pressure on prices. Whether the upward pressure is greater than the downward pressure exerted by the list of stuff above is the big unknown. Anyone who states categorically that there is a lot more to come off is as big a bluffer as those that claimed there was loads of upside during the boom years.
 
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True Republican

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None of that really matters. People need credit to buy houses. It all depends on the availability of credit.
if there was a solvent bank in the morning offering 100% mortgages for 40 years there would be thousands of gullible, irish people looking to apply.
 

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