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I'm not being funny - We are probably at the bottom of the housing market


Rebel_Yell

Well-known member
Joined
Nov 5, 2009
Messages
657
To be upfront and honest, I am sans house at the moment and renting. I have a bit of money in the bank thanks to a sale of a house a couple of years back.

We started to look at building a year or two ago and got quotes etc. All ready to go and the bank wouldn't lend us the money (us and everyone else). In hindsight they did us a favour.

Now here's the funny thing, it is now more expensive to build than to buy. And that is assuming that the asking prices are real and not a work of fiction. We are now contemplating selling the site we have (we have someone keen to buy for local reasons) and buying.

For the majority of houses in our area, if were were to build them it would cost more than buying them. Now people on this site will argue about rental yields and oversupply. I am not saying the market will move anytime soon. The absence of funding is still a major issue.

What I am saying is that when it costs more to build than buy, the market has overshot it's medium term level. An engineering friend of mine told me that builders are desperate and quote at cost or below cost just to keep cashflow going. So it ain't "greedy builder" syndrome. The costs I am looking at are direct labour.

BTW, we are still sitting back and won't make any call for another 6-9 months at this stage. I am just curious as to the thoughts out there.
 

redhead101

Well-known member
Joined
Nov 10, 2009
Messages
834
Hmmm. Not convinced. Unemployment on the way up. Emigration on the way up. Interest rates on the way up, all of which means demand will continue to decline.

Best of luck in whatever decision you make.
 

richie268

Well-known member
Joined
Sep 14, 2007
Messages
2,160
To be upfront and honest, I am sans house at the moment and renting. I have a bit of money in the bank thanks to a sale of a house a couple of years back.

We started to look at building a year or two ago and got quotes etc. All ready to go and the bank wouldn't lend us the money (us and everyone else). In hindsight they did us a favour.

Now here's the funny thing, it is now more expensive to build than to buy. And that is assuming that the asking prices are real and not a work of fiction. We are now contemplating selling the site we have (we have someone keen to buy for local reasons) and buying.

For the majority of houses in our area, if were were to build them it would cost more than buying them. Now people on this site will argue about rental yields and oversupply. I am not saying the market will move anytime soon. The absence of funding is still a major issue.

What I am saying is that when it costs more to build than buy, the market has overshot it's medium term level. An engineering friend of mine told me that builders are desperate and quote at cost or below cost just to keep cashflow going. So it ain't "greedy builder" syndrome. The costs I am looking at are direct labour.

BTW, we are still sitting back and won't make any call for another 6-9 months at this stage. I am just curious as to the thoughts out there.
you made me laugh
 

ChickenBiryani

Well-known member
Joined
Jul 2, 2010
Messages
686
All depends on location. Some areas are close to bottoming, others have a long way to go.

On average however, given the considerable headwinds (unemployment, interest rates with only one way to go, either tax raises or more cutbacks in budgets for at least the next 4 years), one has to expect that disposable income will be falling for the next few years, which can't be positive for house prices.

Basically, theres no real risk in waiting. Worst case scenario, theres a magical turnaround in the economy and we get inflation based raises.

But the days of feeling panicked to get on the ladder lest prices get away from you are over.
 

the_rebubblican

Well-known member
Joined
Mar 24, 2010
Messages
344
Just heard from an estate agent in Sligo. They had 7 houses for sale as part of a liquidation. The houses were snapped up with people queuing overnight. I've also heard that well priced semi-d houses in Dublin south postcodes of note are selling too. It's obvious the punter knows what their floor is but its waiting for the supplier (estate agents/sellers) to price for that level accordingly. The bottleneck of the zombie banking system doesn't help.
 

libertarian-right

Well-known member
Joined
Apr 23, 2007
Messages
2,492
With a government deficit so big, prolonged depression and deflationary cycle, I could add in so many more factors, all of this will have a knockon effect in the property market for the foreseeable future.
 

roc_

Well-known member
Joined
Dec 5, 2009
Messages
6,456
To be upfront and honest, I am sans house at the moment and renting. I have a bit of money in the bank thanks to a sale of a house a couple of years back.

We started to look at building a year or two ago and got quotes etc. All ready to go and the bank wouldn't lend us the money (us and everyone else). In hindsight they did us a favour.

Now here's the funny thing, it is now more expensive to build than to buy. And that is assuming that the asking prices are real and not a work of fiction. We are now contemplating selling the site we have (we have someone keen to buy for local reasons) and buying.

For the majority of houses in our area, if were were to build them it would cost more than buying them. Now people on this site will argue about rental yields and oversupply. I am not saying the market will move anytime soon. The absence of funding is still a major issue.

What I am saying is that when it costs more to build than buy, the market has overshot it's medium term level. An engineering friend of mine told me that builders are desperate and quote at cost or below cost just to keep cashflow going. So it ain't "greedy builder" syndrome. The costs I am looking at are direct labour.

BTW, we are still sitting back and won't make any call for another 6-9 months at this stage. I am just curious as to the thoughts out there.
Have a look into more modern building techniques such as http://web.eng.fiu.edu/prieto/HeavyConstruction/HC-Lecture29-Pre-Fab-Tilt-up.pdf Also, some of the newer interior drywall build kits are extremely cost effective. Spend more time on the design, then do a complete take off and source ALL your materials at the same time up north or in the UK. (You will negotiate good discount if you buy everything together). Stuff is still way overpriced here. Don't bother unless they are willing to price match AND give you discount. Then, you should be able to get labour at reasonable price in the coming year or so. If your design is properly done and presented, there will be much less hours spent in building... Building costs during the boom years were a joke because they could get away with it. If you put your mind to it and properly utilise modern technology, you can build for WAY less. Most builders here need to start working in different ways to be able to give genuine value to their customers. Until they do, you're better doing it yourself.
 

Congalltee

Well-known member
Joined
Nov 10, 2009
Messages
6,211
Have rents started to rise yet?
Has NAMA offloaded its housing stock?
Are house prices commenserate with disposable income?
Are banks lending to people on 50k pa to buy a 175k house?
Have people taken account of the 5% of mortgages which is in arrears for 3 months or more and the sale of those houses will have on the market?
What will be the effect of EBC interest rates doubling/trebling (which will happen given their historic low and the return of real growth in Germany?

3 words. Dead. Cat. Bounce.
 

smitchy2

Well-known member
Joined
Jan 28, 2008
Messages
1,817
Well certainly on an historical international basis, a property slump lasts between 2 to 4 years with prices falling from 20-40% on average.

However, Irelands housing boom was one of the largest ever in history. So it more than likely hit 50% or more down on average and may last longer than 4 years which would be Jan 2011.

It certainly will begin to recover in urban areas while continuing to fall in others for a long time.
 

CPAMG

Member
Joined
Jul 16, 2009
Messages
7
Factors affecting house prices - don't see many (any!) of these positive at the mo.

Economic Growth / Real income
Interest rates
Consumer confidence
Availability of Mortgage Finance
Demographic factors
Speculation
Inherited wealth
Unemployment
Supply
 

Squire Allworthy

Well-known member
Joined
May 31, 2007
Messages
1,404
BTW, we are still sitting back and won't make any call for another 6-9 months at this stage. I am just curious as to the thoughts out there.
That would probably be wise. Keep your eyes open ,you may just possibly get an exceptionally good price say at an auction. I would even suggest approaching people who are in financial distress. Hello Squire, ever considered selling a bit of land..... house or whatever. Nothing ventured.

I am buying land in the UK some sites are priced sufficiently low that you would need to be stupid to lose money. With about 5 million on housing waiting lists and chronic housing problems in most of the South of the country seems a pretty good risk. In fact I am very sure there will be profit well above the rate of inflation if we take a 3-5 year view.
 

eoghanacht

Well-known member
Joined
Apr 18, 2006
Messages
33,340

stephenf

Member
Joined
Jun 17, 2010
Messages
7
OP I think where your argument falls down is the fact you’re using 1 very specific example to judge the housing market in its entirety.

If I was to just use 1 or 2 examples to judge the Housing Market I could say we have a lot more to fall as the below article shows

Buyers shy away from plan to sell €150,000 cut-price houses - National News, Frontpage - Independent.ie

@ the republican firstly I’d be wary of what an estate agent tells me. If there was something like that I’m sure it would have been reported in the national newspapers as the Mullingar apartments were

The apartments that cost less to fund than a car - Property & Mortgages, Personal Finance - Independent.ie

I think citing examples is the incorrect way of discussing the housing market. You will always find exceptions to the normal trend, and that could be for a number of reasons like the house, the buyer, the price etc. there are just too many variables there to use as a basis for saying where the market is or will go.

I think the better way to gauge how the market will go is to look at oversupply, access to credit, future demand etc, and I’m sorry to say but looking at these doesn’t paint a pretty picture.

We have between 100,000 and 350,000 empty properties depending on who you listen to, but I think unvested interests put it around 300,000.

300,000 surplus
Negative migration
Restricted and expensive (on average of the last few years) access to credit

All means that generally houses have someway to fall, does that mean the property you’re talking about could fall further, well of course not. It’s up to you to weigh up all the variables and make an informed decision, some places have probably bottomed out, some places have a long way to go. It’s up to everyone to decide where their property is on the scale. But just cause your property lies at a certain point doesn’t mean that’s where the housing market lies.
 

Rebel_Yell

Well-known member
Joined
Nov 5, 2009
Messages
657
Have a look into more modern building techniques such as http://web.eng.fiu.edu/prieto/HeavyConstruction/HC-Lecture29-Pre-Fab-Tilt-up.pdf Also, some of the newer interior drywall build kits are extremely cost effective. Spend more time on the design, then do a complete take off and source ALL your materials at the same time up north or in the UK. (You will negotiate good discount if you buy everything together). Stuff is still way overpriced here. Don't bother unless they are willing to price match AND give you discount. Then, you should be able to get labour at reasonable price in the coming year or so. If your design is properly done and presented, there will be much less hours spent in building... Building costs during the boom years were a joke because they could get away with it. If you put your mind to it and properly utilise modern technology, you can build for WAY less. Most builders here need to start working in different ways to be able to give genuine value to their customers. Until they do, you're better doing it yourself.
Don't know if it answers the original question, but hell it's useful for me :p

Thanks for the tips!

You make an interesting point. I happen to know a German builder (father of the girlfriend of a friend). When he comes over here and looks at how buildings are constructed, he takes on the look of Bones in Star Trek IV (sorry for the reference) he get's this expression and says something that I think translates as barbarians.

I am getting pricing from individual trades and most of them are people who wouldn't be inclined to rip me off. They are struggling. A key question is whether materials costs can be reduced or if our building methods can be improved to reduce costs.
 

Squire Allworthy

Well-known member
Joined
May 31, 2007
Messages
1,404
I think the better way to gauge how the market will go is to look at oversupply, access to credit, future demand etc, and I’m sorry to say but looking at these doesn’t paint a pretty picture.
I agree, but what is critical is the oversupply versus demand in the location where you want to live.
 

Paddy Sarkozy

Well-known member
Joined
Aug 19, 2010
Messages
1,859
From what I'm hearing, there is now so much pent up demand for property in the arse end of nowhere that queues have started forming in DUBLIN RAILWAY STATIONS as more and more Dubliners look to escape the capital and downsize and take advantage of the bargains to be had out there!!!
Watch out, this bottom's gone blow fast!!
 

Tigris Celtica

Well-known member
Joined
Aug 26, 2009
Messages
503
From what I'm hearing, there is now so much pent up demand for property in the arse end of nowhere that queues have started forming in DUBLIN RAILWAY STATIONS as more and more Dubliners look to escape the capital and downsize and take advantage of the bargains to be had out there!!!
Watch out, this bottom's gone blow fast!!
That's it ! - I'm off to buy a few buy-to-let "townhouses" surrounded by green fields in some ****hole in The Midlands.......! .:lol:
 
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