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The truth about the property market


murtaep

Well-known member
Joined
Jun 6, 2011
Messages
329
http://advice.myhome.ie/2013/01/myhome-ie-property-barometer-q4-2012/
 Average asking price nationally is now DOWN 51.5% from peak.
 exclusively based on asking prices
 The price of new properties declined by 3.2% in Q4 bringing the annual rate of decline to 9%
 Ms Kelleher said the outlook remains uncertain with further volatility in prices likely in 2013.

http://www.daft.ie/report/?posted=1
 Average asking price nationally is now down 51.3% from peak.
 For the first time, examines actual sold prices based on data from the Property Price Register
 There was a 0.9% decline nationally in Q4, 2012 (so leave the Irish independent toilet papers in the shops)
 Asking prices are still falling rapidly in Munster, Connacht and Ulster. Indeed, for the first time since prices started to fall, the fall from the peak is greater in Connacht-Ulster (55.9%)

Analysis of both articles
http://namawinelake.wordpress.com/2013/01/02/irish-residential-property-prices-still-falling-but-at-lower-rate/

Price suppressing Factor for 2013:
Property tax,
Loss of mortgage interest rate relief, some of the demand from 2013 was stolen and crammed into 2012 instead
Lack of mortgage funding,
Further reduced disposable income and wages (due to continued recession and increased taxes not just in 2013 but beyond),
Increase in supply due to large increase repossessions. 185,000 mortgages are at risk of default (already restructured or in arrears) based on the latest analysis done by Constantine Gurdgiev (due to NAMA being forced to offload property and personal insolvency bill).
The introduction of a 1% stamp duty tax for first time buyers
New build costs are difficult to ascertain as although the cost of labour has decreased the price of materials has increased. (But site prices have decreased alot)
Some that isnt mentioned much in teh main stream media, but is touched on here by David McWilliams willl have a profoundly negative affect on property prices: the eventual and inevitable increase in the ECB interest rates.
http://www.davidmcwilliams.ie/2013/01/03/swing-in-interest-rates-will-torpedo-trackerville
The FED in the US has announced that it will not increase rates until after 2015 (and may actual be much later)
In Europe though we may not be so lucky.

Factors which may lead to an increase in property prices in 2013:
Increased rental yields may encourage buy to let (but will have a very negligible affect)
The abolishment of the high stamp duty rate for second home buyers (reduced to 1%)
A balance has been reached in Dublin and possibly in the other cities between supply and demand (Therefore this may give others outside Dublin a perception of future price movement) In Dublin the stock of available properties for sale continues to decline and is now at just over 4,000
The only other actual thing which I can see that the property market has going for it is that the main stream media propaganda Irish times and independent toilet papers are attempting to stoke the fires again (and the last thing buyers want is to miss the bottom, perception of future price movement)
http://www.irishtimes.com/newspaper/ireland/2012/1229/1224328254025.html
http://www.independent.ie/national-news/rise-in-home-prices-sparks-hopes-of-recovery-3338359.html

My analysis of all this:
If the Government do want to revive the property market (and it is not my contention that they should be involved at all) Then obviously one way would be to leave the interest rate relief for first time buyers.
They could also do something that not many talk about and that is to ensure the banks borrow and lend on a long term interest rate, so borrowers could choose a fixed interest rate of X% over 30 years, this is done in other countries and is a sounder business model for banks and peace of mind/potentially more sustainable for buyers. If borrowers knew the total cost of the house for the life of the mortgage they may be more liable to purchase a house.
I believe it will take years for demand to meet the oversupply of houses outside of Dublin and although house prices may bottom out in the next year or two, it will take a while after for prices to rise much on a consistent basis.
Austerity budgets will continue for at least 3 more years. The government’s own figures show that unemployment will only fall negligibly over the next 3 years. (The fall is mainly due to net emigration)

There is no sign of any world recovery in the US have fiscal problems and a Gov debt of approaching 17trillion $, Germany's GDP is beginning to decline, Italy and France are also having problems with there debt to GDP levels. The UK also has huge debt problems (something which most media fail to comment on),
Being a small country exporting mainly to these places, we are far from out of the woods.
 
Last edited:

Analyzer

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Joined
Feb 14, 2011
Messages
46,201
Myhole dot ie and Angela Keegan.
And propertypaper with a news supplement.

No amount of jawboning will arrest the fact that PAYE taxpayers have SFA money in their pockets at the end of the week. And the 400 thousand on the dole are not going to be bidding for real estate any time soon.
 

mr. jings

Well-known member
Joined
Mar 31, 2008
Messages
8,095
Myhole dot ie and Angela Keegan.
And propertypaper with a news supplement.

No amount of jawboning will arrest the fact that PAYE taxpayers have SFA money in their pockets at the end of the week. And the 400 thousand on the dole are not going to be bidding for real estate any time soon.
...and that banks are opportunist fair weather parasitic scumbags.
 

murtaep

Well-known member
Joined
Jun 6, 2011
Messages
329
Myhole dot ie and Angela Keegan.
And propertypaper with a news supplement.

No amount of jawboning will arrest the fact that PAYE taxpayers have SFA money in their pockets at the end of the week. And the 400 thousand on the dole are not going to be bidding for real estate any time soon.
I covered that in my analysis.
 

Asparagus

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Joined
Apr 7, 2010
Messages
4,882
Myhole dot ie and Angela Keegan.
And propertypaper with a news supplement.

No amount of jawboning will arrest the fact that PAYE taxpayers have SFA money in their pockets at the end of the week. And the 400 thousand on the dole are not going to be bidding for real estate any time soon.

20,000 + mortgages in arrears for over 720 days (2 years)
65,000 + mortgages > 90 < 720 days
????? mortgages >30 <90 days

17,621 Houses sold last year

We are in an absolute chasm of a mortgage crisis - without some massive intervention this will last for 2 or 3 generations.
The social carnage will wreck any chance at recovery, the hamfisted and yet tippy tap approach suggested by the government will lead to a mass exodus/bankrupcy of the middle class

My kids will not make the mistakes our generation did - we have seen the emporer and we know he is without clothes

But hey lets gut the country to pay off the wealthy fraudsters debts/public servants unsustainable salary demands
 

Aristodemus

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Joined
Oct 8, 2009
Messages
3,741
There is still an obsession with property prices in this country. Funny how inflation is seen as a bad thing in every area of the economy except property. Vested interests I suppose
 

SPN

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Joined
Feb 2, 2004
Messages
16,890
Your analysis ignores the number one most important element in the price/value of a property - bank lending policies and capability.

Given that the banks are currently reducing their balance sheets, and will continue to do so for the foreseeable future, there is no price support there to maintain prices even at current levels.

You mention that NAMA will come under pressure to start disposing of properties. This will be less of a problem than the banks starting to dispose of the stock of properties they already have, and the pressure from the CB for them to be more pro-active about foreclosing. The NAMA portfolio is much less geared towards residential than the banks.
 

gijoe

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Joined
Jul 26, 2010
Messages
15,419
The biggest factor impacting on the property market last year was the ending of the mortgage interest relief. That brought a number of people artificially into the market at the same time in the 2nd half of the year hence the small upward pressure on prices in Dublin. However, all that means is that they will fall that bit further back in 2013 yet you will not read any of this in the mainstream (advertising junkies) media!!
 

Nemesiscorporation

Well-known member
Joined
Oct 2, 2011
Messages
14,214
MyHome.ie Property Barometer Q4 2012 | MyHome Advice Centre
 Average asking price nationally is now DOWN 51.5% from peak.
 exclusively based on asking prices
 The price of new properties declined by 3.2% in Q4 bringing the annual rate of decline to 9%
 Ms Kelleher said the outlook remains uncertain with further volatility in prices likely in 2013.

2013: After six years, time to build again?
 Average asking price nationally is now down 51.3% from peak.
 For the first time, examines actual sold prices based on data from the Property Price Register
 There was a 0.9% decline nationally in Q4, 2012 (so leave the Irish independent toilet papers in the shops)
 Asking prices are still falling rapidly in Munster, Connacht and Ulster. Indeed, for the first time since prices started to fall, the fall from the peak is greater in Connacht-Ulster (55.9%)

Analyses of both articles
Irish residential property prices still falling, but at lower rate « NAMA Wine Lake


Price suppressing Factor the following for 2013:
Property tax,
Loss of mortgage interest rate relief, some of the demand from 2013 was stolen and crammed into 2012 instead
Lack of mortgage funding,
Further reduced disposable income and wages (due to continued recession and increased taxes not just in 2013 but beyond),
Increase in supply due to large increase repossessions (due to NAMA being forced to offload property and personal insolvency bill).
The introduction of a 1% stamp duty tax for first time buyers
New build costs are difficult to ascertain as although the cost of labour has decreased the price of materials has increased. (But site prices have decreased alot)

Factors which may lead to an increase in property prices in 2013:
Increased rental yields may encourage buy to let (but will have a very negligible affect)
The abolishment of the high stamp duty rate for second home buyers (reduced to 1%)
A balance has been reached in Dublin and possibly in the other cities between supply and demand (Therefore this may give others outside Dublin a perception of future price movement) In Dublin the stock of available properties for sale continues to decline and is now at just over 4,000
The only other actual good thing I can see the property market has going for it is that the main stream media propaganda Irish times and independent toilet papers are attempting to stoke the fires again (and the last thing buyers want is to miss the bottom, perception of future price movement)
Dublin house prices up 4.2% this year - The Irish Times - Sat, Dec 29, 2012
Rise in home prices sparks hopes of recovery - National News - Independent.ie

My analyses of all this:
I believe it will take years for demand to meet the oversupply of houses outside of Dublin and although house prices may bottom out in the next year or two, it will take a while after for prices to rise much on a consistent basis.
Austerity budgets will continue for at least 3 more years. The government’s own figures show that unemployment will only fall negligibly over the next 3 years. (The fall is mainly due to net emigration)

Their is no sign of any world recovery in the US have fiscal problems and a Gov debt of approaching 17trillion $, Germany's GDP is beginning to decline, Italy and france are also having problems with there debt to GDP levels. The UK also has huge debt problems (something which most media fail to comment on),
Being a small country exporting mainly to these places, we are far from out of the woods.
The prices need to half again before the property market gets going again.

The entire NAMA book needs to be put on the market with auctions on each house to bottom it out, then to get the market moving again.
 

murtaep

Well-known member
Joined
Jun 6, 2011
Messages
329
Your analysis ignores the number one most important element in the price/value of a property - bank lending policies and capability.

Given that the banks are currently reducing their balance sheets, and will continue to do so for the foreseeable future, there is no price support there to maintain prices even at current levels.

You mention that NAMA will come under pressure to start disposing of properties. This will be less of a problem than the banks starting to dispose of the stock of properties they already have, and the pressure from the CB for them to be more pro-active about foreclosing. The NAMA portfolio is much less geared towards residential than the banks.
I did touch on both those points on the banks reluctance to lend and I agree altough NAMA has alot of commerical property they also have a huge amount of residential estates and are one of the biggest property holding entiites in the world, so are not to be overlooked in any analysys.
 

murtaep

Well-known member
Joined
Jun 6, 2011
Messages
329
20,000 + mortgages in arrears for over 720 days (2 years)
65,000 + mortgages > 90 < 720 days
????? mortgages >30 <90 days

17,621 Houses sold last year

We are in an absolute chasm of a mortgage crisis - without some massive intervention this will last for 2 or 3 generations.
The social carnage will wreck any chance at recovery, the hamfisted and yet tippy tap approach suggested by the government will lead to a mass exodus/bankrupcy of the middle class

My kids will not make the mistakes our generation did - we have seen the emporer and we know he is without clothes

But hey lets gut the country to pay off the wealthy fraudsters debts/public servants unsustainable salary demands
49,482 mortgages in arrears based on Q3 2013 <90 days
 

statsman

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Joined
Feb 25, 2011
Messages
56,230
There is still an obsession with property prices in this country. Funny how inflation is seen as a bad thing in every area of the economy except property. Vested interests I suppose
If food prices were down 50% on what they were in 2006 we'd be celebrating.
 

Asparagus

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Joined
Apr 7, 2010
Messages
4,882
There is still an obsession with property prices in this country. Funny how inflation is seen as a bad thing in every area of the economy except property. Vested interests I suppose
Inflation is not seen as a bad thing by anyone with a clue.

In a growing economy it is a factor in the growth.
In a contracting economy it is a problem.

Given that the entire short and medium term future of the country is fully entangled in house prices - its in all our (home owners and renters) "vested" interests that we create an economic environment that will see house prices rise.

We don't want a bubble but we need some bouyancy.
 

SideysGhost

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Joined
Nov 30, 2009
Messages
17,716
Seems to be a bit of a rash of property-related threads at the minute.

You have to wonder what exactly it would take to cure the Irish of their absolute obsession with property.

If 6 years of prices falling 50%+, mass unemployment, vast holes in the public finances leading inevitably to the loss of national sovereignty and the IMF/ECB takeover, the return of mass emigration, all of these a direct result of the property obsession.....if all that did little or nothing to shift this peculiar embedded cultural trait, well...would anything?

Will we be dropping in to p.ie from time to time in another 6, 16, 60 years to see the same old monomaniacal insanity being heated up and dished out to new generations of eager Laddermaniacs?
 

Spanner Island

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Joined
Feb 22, 2011
Messages
24,203
The only other actual good thing I can see the property market has going for it is that the main stream media propaganda Irish times and independent toilet papers are attempting to stoke the fires again (and the last thing buyers want is to miss the bottom, perception of future price movement)
Dublin house prices up 4.2% this year - The Irish Times - Sat, Dec 29, 2012
Rise in home prices sparks hopes of recovery - National News - Independent.ie
Why is this a good thing?

They've been trying to do this throughout the crash...

What this country needs is a massive culture change towards property with long term renters given the kind of protection they're given in Continental Europe for those who don't want to own but feel there is no other option in this property obsessed dump...

Any attempt by the 'establishment' or their mouthpieces to stoke the fires from now on will partly be dictated by the fact that higher property values will result in more revenue from the property tax...

It will be an inevitable consequence of the property tax which is just another state created f*** up waiting to happen...
 
Last edited:

statsman

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Joined
Feb 25, 2011
Messages
56,230
Inflation is not seen as a bad thing by anyone with a clue.

In a growing economy it is a factor in the growth.
In a contracting economy it is a problem.

Given that the entire short and medium term future of the country is fully entangled in house prices - its in all our (home owners and renters) "vested" interests that we create an economic environment that will see house prices rise.

We don't want a bubble but we need some bouyancy.
Inflation of around 3% is grand; 16%, not so much.
 

Asparagus

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Joined
Apr 7, 2010
Messages
4,882
If food prices were down 50% on what they were in 2006 we'd be celebrating.
Farmers wouldn't.
The revenue wouldn't.


the consumer wouldn't because they'd be eating Soylent Green.
 

murtaep

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Joined
Jun 6, 2011
Messages
329
The prices need to half again before the property market gets going again.

The entire NAMA book needs to be put on the market with auctions on each house to bottom it out, then to get the market moving again.
What are you basing that price analysys on? I think the only person who has predicted that kind of drop is Morgan Kelly and I believe that was before NAMA was created.

Nama wont dump all their properties on the market as it would have the exact result you predict, another mass price reduction in property.
 

statsman

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Feb 25, 2011
Messages
56,230
Farmers wouldn't.
The revenue wouldn't.


the consumer wouldn't because they'd be eating Soylent Green.
Really? Soylent Green? In the real world?
 
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