IRELAND .. Property Crash #2 on the way ( McWilliams )

robut

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David McWilliams believes another property crash is set to hit the Irish economy

Economist David McWilliams predicts that the Irish economy is set for a second property crash in the coming years.

The Irish economy has been growing steadily following the last economic downturn nine years ago, with unemployment dropping to 6.1% nationwide.

Unemployment is estimated to fall to just 5.7% next year - down from a peak of over 15% after the 2008 crash.

But McWilliams – who forecast the last crash a decade before it occurred – believes he has seen worrying signs history is to be repeated.

He said: “I believe there is a bubble and it is building very rapidly. The interesting thing is you don’t need credit to have a bubble.

“A three-bed semi in Dublin [was] the sort of house I was brought up in. When a house like that costs €450,000, which is 10 times the average wage, you know you’re in very dangerous territory.”
So .. round 2? What ever you think of McWilliams he did flag / predict the last one ion 07/08??

Or are the fundamentals sound and shur its only McWilliams mouthing off ..

David McWilliams' Ireland - is on TONIGHT on TV3 at 10PM or +1 at 11pm .. All about this

There's a new show on TV3 on Thursday that you're definitely going to want to watch
 
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Dame_Enda

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He correctly predicted the crash, but its debatable whether his idea of a Finnish style "Bad Bank" (which I guess NAMA is in terms of being a repository for bad debts) delayed or sped up the recovery.

I do agree with him though that a crash is coming unless the govt wakes up. The govt is not serious about increasing supply.
 

Supra

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Are there less home owners now than then?
If it does crash will it have a different impact as less people are dependent on it?
 

robut

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Are there less home owners now than then?
If it does crash will it have a different impact as less people are dependent on it?
BUT .. many people are literally hanging on in there just about keeping the payments up on there property due to depending on / having a tracker? Thats a low rate in comparison to variable etc. I am just saying if pushed pin to collar when on a low tracker rate w/o much extra cash .. what will another crash bring to them?

PLUS it would hit the banks AGAIN .. many of which you and I still own and funded since the last time.
 

Catalpast

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He correctly predicted the crash, but its debatable whether his idea of a Finnish style "Bad Bank" (which I guess NAMA is in terms of being a repository for bad debts) delayed or sped up the recovery.

I do agree with him though that a crash is coming unless the govt wakes up. The govt is not serious about increasing supply.
The next crash is when supply exceeds demand

- at the moment demand exceeds supply.

And that's the way they intend to keep it......
 

Dame_Enda

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It was a mistake to bulldoze the ghost estates given the housing crisis.
 

GDPR

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There may be a recession down the line and there is a property mania gripping the country again with house prices and rents at unsustainable levels already.

But say this occurs before supply exceeds natural demand of approx 30k units per annum? Well there won't be such a cut in construction job numbers as before. People will tighten their belts given job losses and wage drops in other sectors and rent and house prices would drop somewhat but not crash as before given the on going demand would drop as opposed to crash.

Would the banks have to be bailed out and if so how would it happen this time? They will of course tighten credit, those that do not fold but again it would not be an extreme change as before, except for much higher levels of repossessions of property.

Politically SF would probably benefit the most and probably would enter government, how would this look?

Would so called protected sectors be protected again? I would guess not, not the second time around and if so how would this work?

Emigration would again rest its head and such people would be less likely to return having possibly been bitten before.

With no big fund in place to soften the blow, with already excessive borrowings to be repaid and with likely higher interest rates on any potential new borrowing, the choices narrow. There would be no second bailout from the Imf etc. Sharp cuts to adjust within that financial year would be a distinct possibility and social unrest would be likely. Defaulting and/or huge social upheaval would be distinct possibilities. Ireland would take longer to recover and recovery would be more limited given that internally and externally our reputation would be in tatters.

Sent from my SM-A320FL using Tapatalk
 

Dame_Enda

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Mistake for who?
The people who need houses?
Or the people who need to keep their job and fat bonus?
A mistake for the economy and homeless.
 

EUrJokingMeRight

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Another one?

YAY.

Right on time too.

I'll believe it when I see it.

Subsitute 'Alcohol' with 'Free money' in the following clip......then have some beer!

[video=youtube;hUVwR0rw5fk]https://www.youtube.com/watch?v=hUVwR0rw5fk[/video]
 

robut

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The Bank of England raised its interest rates today - 0.25% to 0.5% .. sterling took a dive today it seems, not sure for how long.

So add that into the mix with McWilliams property crash 2. The US and UK have now raised interest rates .. ECB next?? If so .. tracker rate goes up too ..
 

EUrJokingMeRight

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There may be a recession down the line and there is a property mania gripping the country again with house prices and rents at unsustainable levels already.

But say this occurs before supply exceeds natural demand of approx 30k units per annum? Well there won't be such a cut in construction job numbers as before. People will tighten their belts given job losses and wage drops in other sectors and rent and house prices would drop somewhat but not crash as before given the on going demand would drop as opposed to crash.

Would the banks have to be bailed out and if so how would it happen this time? They will of course tighten credit, those that do not fold but again it would not be an extreme change as before, except for much higher levels of repossessions of property.

Politically SF would probably benefit the most and probably would enter government, how would this look?

Would so called protected sectors be protected again? I would guess not, not the second time around and if so how would this work?

Emigration would again rest its head and such people would be less likely to return having possibly been bitten before.

With no big fund in place to soften the blow, with already excessive borrowings to be repaid and with likely higher interest rates on any potential new borrowing, the choices narrow. There would be no second bailout from the Imf etc. Sharp cuts to adjust within that financial year would be a distinct possibility and social unrest would be likely. Defaulting and/or huge social upheaval would be distinct possibilities. Ireland would take longer to recover and recovery would be more limited given that internally and externally our reputation would be in tatters.

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Jesus.

Of course the protected sectors would be protected.

That's why they're called the sacrificial lambs! Oh wait!
 

Catalpast

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The Bank of England raised its interest rates today - 0.25% to 0.5% .. sterling took a dive today it seems, not sure for how long.

So add that into the mix with McWilliams property crash 2. The US and UK have now raised interest rates .. ECB next?? If so .. tracker rate goes up too ..
Surely a higher interest rating helps the Pound Sterling?
 

Volatire

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McWilliams, as so often with economics journalists, gets it backwards.

We have an anti-bubble. Prices are artificially low due to a lack of credit and relative high mortgage interest rates imposed by Irish banks.

If credit conditions normalize ( and they may not) we could see a super-spike in Dublin property prices.

Free market, bitches.
 

wombat

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Or are the fundamentals sound and shur its only McWilliams mouthing off ..
I don't see the comparison between €450k for a Dublin semi driven by demand and €300k for a flat in Leitrim driven by a tax write off.
 

The Nal

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So we can either by now at alleged inflated prices or wait for the crash and have lower housing prices but no access to credit to buy the house.
 

Mick Mac

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Is a crash coming who knows but the housing situation is intolerable.
 


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