Tsunami of negative news battering buyer confidence

Fergal O'Brien, Senior Economist, IBEC

9th Jul 2008

Fergal O'Brien is our guest blogger, analysing the Quarter 2 2008 figures.

I was in national school in 1986 and we were always sent to bed as soon as the 9 o'clock news came on the TV but I still recall Anne Doyle's headlines on our faltering economy from those dreary days. Anne Doyle is still reading the news and her headlines of recent weeks remind me a lot of the mid 1980s. Thankfully of course I know our economy is not on a path back to 1986 and we can all point to an array of indicators to prove that the fundamentals of the Irish economy are on a much more solid basis than they were then. Nevertheless, there is a weakness not seen for many years and the current barrage of negative commentary and news on the Irish economy is further damaging the already fragile property market. Right now it takes a brave buyer to keep their head about them when all around are losing theirs.

Fundamentals and sentiment now both in decline

While sentiment in the residential property sector has been weak for almost two years now, the past month has probably seen the sharpest decline in buyer confidence. The ESRI/IIB consumer sentiment index hit an all time low in June and the most recent increase in the European Central Bank (ECB) base rate will further damage confidence. During much of the past year it could be argued that the fundamentals of the housing market were actually improving as falling prices, stable ECB rates, rising incomes, stamp duty changes and substantial improvements in mortgage interest relief combined to improve affordability. More recent months have seen a reversal in some of these fundamentals, however, as the credit crisis hit Ireland with a vengeance. The main lending institutions have tightened mortgage criteria in recent months - 100% mortgages are a thing of the past and an increasing number of potential buyers are finding it difficult to secure credit. There has been a series of increases in variable mortgage interest rates since the spring, while many institutions have increased the cost of tracker mortgage products.

The impact of a combination of tighter credit arrangements and plummeting sentiment is clearly evident in the housing market trends of the most recent Daft.ie report. As would be expected prices in Quarter 2 fell in almost every county and nationally prices were 6% lower than in Quarter 1. What is most striking in the report, however, is the very sharp reduction in activity in the market. The 'flow' of properties on to the market declined sharply during Quarter 2, while stock levels rose to 70,000 units and have doubled in a period of just 18 months. The 'flow' of properties was just 8,000 units in the month of June and was 50% lower than in June of last year.

Price trends

Asking prices were down 7.9% nationally in the 12 month period to June 2008. Prices declined in every county over the past year with the sharpest falls recorded in Dublin, the commuter counties of Leinster and parts of Connacht/Ulster. Asking prices have held up much better in Munster, in Limerick, for example, prices have only fallen 1.6% in the past 12 months and actually increased marginally in the most recent quarter. It also appears that the pace of price decline has eased in Dublin in the most recent quarter but has accelerated in the rest of Leinster and in much of Connacht/Ulster.

Significant divergences emerging at regional level

The price trends and the stock data suggest some significant diverging housing market trends for the different regions. The most recent quarter in particular has seen a sharp reduction in prices in commuter counties and in those counties which had previously benefited from generous tax reliefs through the Rural Renewal Scheme. With the price of oil close to $150 a barrel and pump prices in Ireland hitting record highs, I suspect that many prospective and current property owners are reassessing the cost benefit of long-term commuting. We have already seen in the US that house prices in commuter areas are falling much faster than in urban areas as oil prices have rocketed. This trend is likely to become more evident in Ireland in the coming years as economic and quality of life factors discourage long-term commuting patterns.

Excess housing supply also appears to be greatest in the regions and in some of the commuter counties. The counties which benefited from excessive tax reliefs in the past are now likely to experience a severe housing contraction for many years to come. The most extreme example of this can be seen in Longford where the number of new house registrations (using the Homebond and Premier data) totalled just five units in the first five months of 2008 compared to 650 units in the corresponding period in 2006.

In search of silver linings

In relation to both the wider economy and the housing market it can be difficult to see an upside in the short-term when such negative data-flow continues to wash over us. Overall I remain very positive on the medium-term outlook for the Irish economy. Once the current housing correction is behind us and international credit markets return to some form of normality, the evidence supporting the ESRI view of near 4% trend growth in the economy is compelling. The housing market correction is already well advanced as housing starts have reacted swiftly to over-supply and stock levels in much of the country could clear fairly rapidly once confidence returns to the market. I suspect we will hear a few more terror inducing headlines from Anne Doyle before the end of this year but as we look into 2009 a moderation in world oil prices and subsequent reductions in ECB interest rates could be the kick-start that the Irish housing market desperately needs.

HIGHLIGHTS:

Asking prices, residential sales
Asking Prices, Residential Sales Stock and flow of properties
Stock and Flow of Properties

SNAPSHOT:

Snapshot
Average Asking Prices across Ireland in Q2 2008

Discuss This Article

  • Re: The Daft Sale Report Q2 2008

    Posted By: Holgerchen Date: Wednesday July 9, 2008 @08:49AM

    "The housing market correction is already well advanced as housing starts have reacted swiftly to over-supply and stock levels in much of the country could clear fairly rapidly once confidence returns to the market. I suspect we will hear a few more terror inducing headlines from Anne Doyle before the end of this year but as we look into 2009 a moderation in world oil prices and subsequent reductions in ECB interest rates could be the kick-start that the Irish housing market desperately needs."

    Is he kidding? The housing market in big trouble. There won`t be reduction to ECB interest rates or can anyone otherwise s.o. give me a proper explanation why BOI is offering a savings account with 7% interest and I think Halifax with 8% for money saved over the next 10 months. It does not seem to me the banks are expecting falling interest rates. Unfortunately some of the very hard working people will be hit who were ill advised by their bankers to get a 100% mortgage for 40 years with 2 years fixed interest rate and are now already in negative equity. When the interest rates return to normal they will be going to civil war here as the current rates are far below normal.

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  • Re: The Daft Sale Report Q2 2008

    Posted By: Anonymous Poster Date: Wednesday July 9, 2008 @09:58AM

    Can somebody point me in the direction of those 5beds in County Kildare for €580k in what area? If there are a few in Naas let us know about them. Prices here vary from town to town, from the north of the county to the south. I feel it is damaging to peoples' properties to label a particular price on a particular county.

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  • Re: The Daft Sale Report Q2 2008

    Posted By: Anonymous Poster Date: Wednesday July 9, 2008 @12:35PM

    Try Athgarvan area for 5 beds at that level

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  • Re: The Daft Sale Report Q2 2008

    Posted By: Anonymous Poster Date: Wednesday July 9, 2008 @03:58PM

    Thanks for suggesting Athgarvan. You've made my point.
    Athgarvan is not Naas and it never will be. My point is house prices cannot be given a blanket approach and it is wrong for anyone to be publish prices as so for a county as a whole. They vary in terms of accessability to services, schools and the capital(as many people in Kildare commute)

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  • Re: The Daft Sale Report Q2 2008

    Posted By: Anonymous Poster Date: Wednesday July 9, 2008 @04:32PM

    i'm not sure you understand the principle of "average prices" the idea is that you can compare prices within different areas and get an idea of the relative cost of different parts of the country.

    if you want to know about the costs in different areas in kildare why not just look at the listings?

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  • Re: The Daft Sale Report Q2 2008

    Posted By: Badgeman Date: Wednesday July 9, 2008 @11:40AM

    Why oh why didn't I listen to the likes of Bob and Paul and buy a house six months ago ....

    On a serious note, it would be nice to think that those posters who recklessly advocated buying property over the last year would now have the decency to admit they were wrong all along, and apologise to all those they misleaded.

    Anyone niave enough to follow their advice would have lost themselves a small fortune by buying in the last 12 months.

    For the record, we are still a long way off from hitting the bottom of the market. In the long run, this will ultimately be a positive thing for the country, notwithstanding the pain it will cause some people in the short term.

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  • Re: The Daft Sale Report Q2 2008

    Posted By: Paul Date: Sunday July 13, 2008 @05:34PM

    Why oh why didn't I listen to the likes of Badgeman or David Mcwilliams 11 years ago and not buy a house....? I would only have missed out on capital appreciation of 400%!

    On a serious note, it would be nice to think that those doomsters who continued to knock property as an asset class since 1997 would now have the decency to admit they were wrong all along, and apologise to all those they misleaded and caused to 'miss the boat' so to speak!After all capital appreciation of upwards of 400% is not to be sneezed at.

    Anyone niave enough to follow their advice from 1997 would have lost themselves a big fortune by postponing buying since 1997 when the doomsters first began to say that property prices were unsustainable and a collapse was imminent!

    So now prices are dropping and all the stopped clocks are finally right for once. The glee that some of these doomsters are exhibiting is sickening, but lets look at some of the hard facts associated with irish residential property as asset class. Dept of the environment figures show that the average price of a new home in ireland increased from the equivalent of €6500 in 1970 to €330,000 in Q2 2007, ie a 4800% increase. Second hand homes increased from just under €12,000 in 1974 to €387,000 in Q2 2007, ie a 3175% inmcrease. Prior to the recent price drops, yoy annual changes show that house prices reduced in just one of the previous 38 years, and that was in 1987 when the reduction vis a vis 1986 was 0.22%. So house prices are currently in a slump, so what, we all know they will bounce back soon.

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  • Re: The Daft Sale Report Q2 2008

    Posted By: Anonymous Poster Date: Tuesday July 15, 2008 @11:24PM

    Try and realise that 400% in cash...and keep a roof over your head. No one with half a brain could have predicted the moronic recklessness of the last 12-15 years amongst the financial institutions throughout the developed world. We have just shipped our wealth wholesale to Asia and locked ourselves into a choice between a low interest rate hyper inflationary cycle or recession. Interest rates will be going up again. The US has no choice but to raise interest rates or watch the dollar collapse yet their banking system is already in chaos. Inflationary pressure and the eventual recovery of the dollar will push ECB rates higher again. This is just the opening stage in a asset meltdown which will continue for at least the next ten years. Ireland's economy has been built on personal loans while our competiveness was destroyed through inflation driven by public service greed and squander. Now the devaluation of the dollar will finish off our manufacturing sector while these gobshites who continually quack on about low GDP/Debt ratios and 'fundamentals' are going to realise that our problem has always been our 'fundamentals' and that a ratio is just that, when our GDP falls as it will our debt will become unserviceable. For people to deride 'doomsters' is childish and shows a lack of independant thought so defective it cant even get to grips with the circular flow of income i.e excessive borrowing->excessive consumption->inflation through jobs in the services and construction sector = DEBT not Wealth or Growth. Good luck with flogging the house to realise that 400%!

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  • Re: The Daft Sale Report Q2 2008

    Posted By: Kildare landlord Date: Wednesday July 9, 2008 @03:02PM

    its a pity this report did not break out the commuter towns segment as it usually does. There is a distinct lack of 3 or 4 semi's in commuter town north Kildare at moment.
    Would be interesting to see figures

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  • Re: The Daft Sale Report Q2 2008

    Posted By: Whoscoddinwho Date: Wednesday July 9, 2008 @03:43PM

    The main culprits responsible for the current state of the housing market are undoubtedly the Financial Institutions who continued until very recently to lend irresponsibly. They fuelled the rapid rise in house prices, and paid little attention to the eventual likelyhood that BOOM is invariably followed by BUST.

    Our Government are the next in line for blame. For every new house sold they received approximately 28% of the sale price in both direct and indirect taxation. By intentionally not legislating to control irresponsible lending, they continued to swell the coffers of speculators and builders who have consistently bankrolled them for many years.

    Even when the housing market decline started the government again attempted to revive it by reducing Stamp Duty and increasing Mortgage Interest relief. Thankfully this tactic failed.

    The unfortunate people who have taken out very large mortgages over terms of up to 40 years are paying a heavy price because of our Governments total ineptitude. For their sake lets just hope that interest rates remain stable.

    We have been ill informed that "Interest Rates" are somehow tied to ECB rates, as the Financial Institutions are already deviating from that so called link. Should interest rates rise to anything like we have experienced in the not too distant past, then we are very likely to experience a total collapse of the housing market, as both peoples ability to borrow and repay mortgages will be greatly reduced.

    My 3 tips to any would be buyer are :- WAIT WAIT WAIT

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  • Re: The Daft Sale Report Q2 2008

    Posted By: Anonymous Poster Date: Wednesday July 9, 2008 @05:25PM

    Its true that prices have increased and over stepped the mark over the last couple of years but they have come down c20% since peak... there may be more to go in the short term but one thing is certain - Prices won't keep falling forever......

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  • Re: The Daft Sale Report Q2 2008

    Posted By: Waffleon Date: Thursday July 10, 2008 @09:13AM

    To quote you "One thing is certain, prices won't keep falling forever".

    What a hollow statement to make. If prices were to keep falling forever, then eventually houses would be avaliable "Free of Charge". Like Gay Byrne "One for everybody in the Audience".

    We all know forever never comes, and people just don't have that kind of time to wait.

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  • Re: The Daft Sale Report Q2 2008

    Posted By: reversal Date: Thursday July 10, 2008 @10:25AM

    "Its true that prices have increased and over stepped the mark over the last couple of years but they have come down c20% since peak... there may be more to go in the short term but one thing is certain - Prices won't keep falling forever......"

    Wow - this statement is nearly a mirror image of what we have been hearing over the past few years. It just goes to show how much things have changed. How long were people saying that prices "can't keep going up forever" ?

    Eventually the Irish banks are going to have to bite the bullet and write off a lot of bad debt from developers (+ stressed mortgage holders). The banks are owed €100 billion by builders - but do you think the thousands of currently new empty properties are going to generate enough money for this debt to be paid back ? There is also anecdotal evidence that some developers want to drastically cut their prices so that they can at least get out with their shirts still on their backs, but the banks are stopping them because they know the carnage that would ensue. Yet this tactic is only delaying the inevitable and will make things worse in the long run.

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  • Re: The Daft Sale Report Q2 2008

    Posted By: Cee Date: Wednesday July 9, 2008 @08:56PM

    I really cannot understand Feargal O Brien's interpretation of the June 2008 ESRI report. He seems to believe that the ESRI report is predicting an early return to the good times with 4% growth in the economy just around the corner. My reading of the same report provided me with none of the comfort which Mr O'Brien found.

    In its June review, the ESRI has predicted that the value of the national economy will fall 0.4% below this year. "Ireland will experience its first recession since 1983", it warns.

    Describing the short-term outlook as "very bleak", the report says that growth of 1.9% will return in 2009 and growth of 3% is expected from 2010.

    As a result of the slowdown, the ESRI predicts that numbers out of work will rise from 100,000 to 136,000 this year, increasing to 160,000 in 2009, pushing the jobless figure to over 7% next year.

    Dr Alan Barrett, one of the authors of the bulletin, said a return to net emigration of 20,000 next year will be "possibly the most vivid illustration" of the downturn.

    These are the main conclusions of the ESRI report and I just cannot see how this scenario could produce the so called "kick start" to the housing market as anticipated by Mr O Brien.

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  • Re: The Daft Sale Report Q2 2008

    Posted By: Anonymous Poster Date: Thursday July 10, 2008 @03:10AM

    Prices will definitely not go down forever. Prices will go down until buyers see value. Values has been absent for at least 3-4 years. Buyers will know value when they see it and in my opinion it will take a couple of years before it happens. When the shock effect of looking at prices in the property pages of the newspaper abates then that will be a pretty good guide. I have experienced it several times abroad and ultimately it is a good thing that prices stop appreciating in a ridiculous manner year after year.

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  • Re: The Daft Sale Report Q2 2008

    Posted By: Caveat Emptor Date: Thursday July 10, 2008 @12:47PM

    To quote you "Buyers will know value when they see it".

    Have buyers suddenly been educated to recognise value when they see it. I don't think so.

    Unfortunately the vast majority of house buyers in the last 5 years have totally failed to understand the financial implications of paying way over the odds for house property, and are likely to pay huge penalties for their lack of judgement in this regard over the full term of their mortgages.

    Primarily it is the responsibility of Government to ensure that Financial Instutions are not permitted by law to lend indiscriminately and unwisely.

    As we all know human nature being what it is people have foolishly accepted massive loans offered to them by unscrupulous lenders.

    The Government should "Get Off Their Ass" and move quickly to protect the public from these money grabbers.

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  • Re: The Daft Sale Report Q2 2008

    Posted By: Tony Date: Monday July 14, 2008 @05:17PM

    Quoting: "The Government should "Get Off Their Ass" and move quickly to protect the public from these money grabbers"

    I agree but is it not apparent that the Government, or moreover the people who give donations to help them to get into power, wanted the "rush" on house buying ?? As usual its the small guy who pays!!

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  • Re: The Daft Sale Report Q2 2008

    Posted By: Nuala Date: Thursday July 10, 2008 @01:37PM

    'a moderation in world oil prices' ??? Is this going to happen? It seems to me shaky grounds on which to base a prediction of an improving economy.

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  • Re: The Daft Sale Report Q2 2008

    Posted By: Anonymous Poster Date: Thursday July 10, 2008 @05:59PM

    Oh come on "Caveat Emptor" get real, to say that anyone who bought in the last 5 years will pay huge penalties for the rest of their mortgage is just ridiculous.... So house prices are falling at the moment, this isn't anything new, it happens about every 10 years and guess what the falls last about 3 years and the gains last about 10, they never fall back to their original value and over any prolonged period of time property has always and will always show itself to be a good investment.

    Look it - If you want to sell now then it will be harder and yes you'll get less than you would have a couple of years ago and if your looking to turn a quick buck then forget Ireland for the moment - but if you are in it for the long term then you will be fine.

    The Government has properly dealt with stamp duty and at the right time, they have increased mortgage relief and many are taking advantage of affordable housing also they reduced income tax in the last budget, so I’m not sure how you blame them. Banks are a business not a charity, if you offer them the business they will take it - same as anyone.

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  • Re: The Daft Sale Report Q2 2008

    Posted By: Caveat Emptor Date: Friday July 11, 2008 @09:57AM

    It is the Banks that were offering the Mortgages, and the housebuyers accepted. Not the other way around as you seem to suggest.

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  • Re: The Daft Sale Report Q2 2008

    Posted By: Stuart Date: Friday July 11, 2008 @10:36AM

    There are a couple of differences today to the property cycles in the past. Not only did everybody go out and borrow willy nilly, they decided to move to 35/40 year interest only mortgages. They are not paying any of their capital off! Now if you are happy to stay where you are for the next 20 years or so this will probably work out alright for most but if you've bought a tiny box that just about accomodates 2 adults and 1 small baby and is miles from any decent infrastructure including schools you've got a problem. Many people were buying with the idea of moving up in 5 years time. No chance of that now.
    Something has to happen to generate the next round of house price increases. We bought our house in 1987. The vendor bought it in 1981 and took a loss when selling to us. The same happened to my brother. At least they had paid off some of the capital. Prices started moving in the mid 90s and then went nuts in the last 5 years. Easy credit, immigration, low interest rates, a booming economy,huge increase in people at work (particularly women)and cash giveaway budgets were all part of this. Tick which ones you think are coming back soon.

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  • Re: The Daft Sale Report Q2 2008

    Posted By: feduplisteningtoit Date: Saturday July 12, 2008 @05:29AM

    "Not only did everybody go out and borrow willy nilly, they decided to move to 35/40 year interest only mortgages."
    What?? I don't think "everybody" went to interest only mortgages! People buying property purely as an ivestment, when prices were rising, took out the majority of interest only mortgages.
    I have a feeling that most of the negative "diatribe" posted on this and numerous other sites is generated by the same bitter little people who had been warning of an impending property bust since prices started rising and are now in "I told ye so!" mode. if you keep saying something for long enough you'll eventually be proven right.Lets just hope this decline ends sooner rather than later and that any poor unfortunates who get into difficulty get the help and support they need.

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  • Re: The Daft Sale Report Q2 2008

    Posted By: Paul Date: Sunday July 13, 2008 @05:12PM

    What a ridiculous thing to say! Interest only mortgages were given primarily to investors with low ltv portfolios. In the majority of cases 5yrs was the max length of the interest only period, with 2 yrs being the norm with an option to extend. To say that the ordinary joe was buying his home with a 35/40 yr interest only mortgage is simply not true and is merely a further example of the type of ill informed tripe trotted out by the doom and gloom brigade on a daily basis

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  • Re: The Daft Sale Report Q2 2008

    Posted By: Tony Date: Monday July 14, 2008 @05:09PM

    Hi there

    Is there much drop in rental prices eg in North County Dublin or do you collect/publish data on rentals?

    Regards
    Tony

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  • Re: The Daft Sale Report Q2 2008

    Posted By: Bob Date: Friday July 18, 2008 @06:33PM

    I've been reading this column (and its predecessors on other sites) for years. Unlike many of the doomsayers who seem to like paying rent, I have my own house and can live here for as long as I like. Apart from the lifestyle security which this brings, my home has increased in value many times since 1999 when I bought it and at no stage have I regretted making the purchase. While it has probably decreased in value in the past two years, I don't care as I will keep the property for another 10 - 20 years and I know that, over time, its worth will increase.

    Prices rocketed in the decade to 2006 due to a unique combination of economic, social and demographic factors and as these circumstances are unlikely to simultaneously re-occur, we are unlikely to see double-digit house price growth in the short to medium term.

    However the scale of the downturn reflects, not only the fact that market conditions have changed, but the fact that many of the underlying socio-economic and demographic factors which caused massive price rises in the first place, have swung completely against property values.

    The scale of the downturn would clearly not have been as great as if only some of these factors had changed. Thus, market recovery will take place when each of the individual problems, which collectively brought about the downturn, are addressed or corrected.

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  • Re: The Daft Sale Report Q2 2008

    Posted By: Tony Date: Tuesday July 22, 2008 @10:56PM

    Hi, Why do people see the need to blame other people for their problems?
    I see the government blamed, banks, estate agents,developers and very little personal responsibility.
    I think that the Govt was relatively good w.r.t. housing over the past few years. Holding relatively steady on stamp duty meant that more money went into public coffers rather than speculators, at least first time buyers got a better chance than investors which is a good thing. Affordable housing initiative was a good idea, however flawed. I know a few people that got a good start that way. Lack of Govt. intervention on the property market in general meant that market forces were pretty much allowed run their cycle.
    If I remember correctly pretty much everyone that I know who went out to get a mortgage pulled the wool over the banks eyes to secure a higher spending limit. Lying about overtime and savings etc.
    Every time a developer turns the sod he takes a risk that the property will be worth more than it cost to build or that he can sell it reasonably quickly. For the last 15 years that has been great, but there will be several builders fewer ere this year is out that took that risk at the wrong time. I think that we should be in part grateful to the capability of the Irish developers to crank up building output so quickly as demand rose. At least we are looking at a fair supply of houses now and people can stop complaining about rising prices and gazumping (remember that word????).
    Anyway I have to admit that I am a contrarian, I have been happily renting and saving over the past 18 years in Dublin and now that there will soon be blood on the property ladder I will have my pick of which rung I would like to reside. It is nice to know that I am currently saving about 1000 euros a week by renting as the value of houses I would like to purchase continues to reach true value. Maybe I will never buy, see points 1 and 2 below.
    So what is true value? I rate true value in two ways.
    1. Investors: Will the rental yield cover the cost of finance?
    2: Homeowners: Affordability of house is 3-4 times finance required.
    Forget rising or lowering prices, those two are the only two factors that are important. Oh, and please stop complaining and blaming other people.
    Tony

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  • Re: The Daft Sale Report Q2 2008

    Posted By: Anonymous Poster Date: Wednesday July 23, 2008 @03:52PM

    It seems from reading this, there are alot of strong opinions on the condition of the Irish housing market and I am therefore compelled to ask for some advice!

    I've relocating over to Dublin from the UK with my job and have been given conflicting advice on whether or not to buy now.

    I'm looking at Malahide/Portmarnock region which whilst has fallen in value, seems to be more stable than other areas. I've seen a property where the vendor is prepared to sell for -10% of the asking price albeit it's been on the market since Xmas. Any advice?

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  • Re: The Daft Sale Report Q2 2008

    Posted By: JimmyTheFish Date: Wednesday July 23, 2008 @05:44PM

    Make an offer 20% below and say that's all you have been approved for. Also take a look around the area and check out other properties.

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  • Re: The Daft Sale Report Q2 2008

    Posted By: FUZZY LOGIC Date: Wednesday July 23, 2008 @06:20PM

    Could you please elaborate on what exactly you mean by your Note 2.

    "Affordability of house is 3-4 times finance required".

    Is this some new JARGON ? or am I missing something.

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  • Re: The Daft Sale Report Q2 2008

    Posted By: Anonymous Poster Date: Wednesday July 23, 2008 @06:29PM

    Make an offer at 25% below asking price.

    Preferable to rent for 12 months as prices look like they have further to fall.

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  • Re: The Daft Sale Report Q2 2008

    Posted By: Anonymous Poster Date: Monday July 28, 2008 @10:32AM

    Depends on where you are buying. 20-25% is reasonable outside of central Dublin. An offer of 10-15% below is fairly normal inside the pale but again it all depends on the area, the seller and other parties interested in the property. Its a buyers market so there's no harm in going in low. Who knows. You might pick up a bargain.

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  • Re: The Daft Sale Report Q2 2008

    Posted By: Bob Date: Saturday July 26, 2008 @07:57AM

    If the house has been on the market since Christmas, the vendor is clearly not in a particular hurry, so I'm unsure as to whether 20-25 per cent less than the asking price would be acepted. In fact, I'd be surprised if the seller has'nt already rejected such a low amount given the length of time for which the property has been on the market. This is especially so in Malahide where demand has always been strong.

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  • Re: The Daft Sale Report Q2 2008

    Posted By: JimmyTheFish Date: Tuesday July 29, 2008 @01:18PM

    If demand in Malahide is so strong then how come this house is still for sale????
    Go back to the drawing board for a Plan B

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  • Re: The Daft Sale Report Q2 2008

    Posted By: The Owl Date: Saturday July 26, 2008 @02:53PM

    Dear Children,
    Stop fighting in class, return to your seats and pay attention. What you are experiencing in the property/finance market is precisely what your parents experienced, oh about twenty years ago in 1987 when the stock market 'crashed'. And your grandparents experienced some twenty years earlier. It is a simple economics 101 situation of cause and effect. Too much money (easy credit) chasing too few widgets, goods or housing. Opportunists, read moneylenders, developers, et al will always step into the breech and supply the market at ever increasing prices until eventually price (real cost) hurts and the market stops in its tracks.

    Of some consolation, but in a drip feed fashion, wage inflation will take care of some of the mortgage pain, if you can service the loan over the longer term. The government may even give back a teeney weeney bit of the massive tax it has ripped from home buyers in stamp duty and other excessive housing taxes during the boom. You will all spend considerably less on plastic landfill bought with plastic cards. And finally, when the blame game is over, you will reconcile yourself to the reality that perhaps you were just unlucky to be left standing when the music stopped at peak property prices......And you'll need to peddle harder for a while.

    Sorry if this note is not soothing, you are in class after all and it is a lesson.

    Take solace from the fact that you have a great story to tell your kids one day about the time the housing economy in Ireland copped a very heavy speeding ticket and you were one of the drivers.

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  • Re: The Daft Sale Report Q2 2008

    Posted By: bewildered Date: Friday August 8, 2008 @01:15AM

    Well said, i have a property for sale its been on the market now for almost a year,it was sold twice but on each occasion the deal fell through because the banks wouldent approve the loan, my agent tells me that it is not the lack of buyers but the banks that wont lend money as and i quote
    "how many of us can say our jobs are secure" unless your a civil servant,its just tough at the moment, but i agree with you this phase cant last and eventually,hopefully soon the economy will improve,prices will stabilise

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  • Re: The Daft Sale Report Q2 2008

    Posted By: Pat D. Date: Tuesday July 29, 2008 @06:30PM

    I find it so hard to believe the property sales are so "low and slow"... Given that I am a "returning home" "buyer" who has contacted several real estate agents and described what it is that I am looking for,,, and the "non" responses I received would make one believe the agents are just so busy hauling money to their bank that they don't have time to respond... Or could it be that (we/they) "The Irish" are just suffering from a little of the "asleep at the switch" syndrome??? One thing for sure, IT WOULD NOT HAPPEN HERE IN CALIF!!! Any one of you doubting this? Email me at pat.doran@sbcglobal.net and I will forward to you the emails I sent to "our" Irish agents.... If the rest are anything like those I tried to buy through??? There is little hope for positive change any time soon!!
    However, that is not going to stop me being there and "hunt" for myself (hopefully next month)I just thought that was part of the agents job for their commission % fee......

    Pat.

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  • Re: The Daft Sale Report Q2 2008

    Posted By: Ant Date: Thursday August 14, 2008 @12:02AM

    Hey people, irishman e-mailing from Oz. People panic when they know nothing about economics and finance. This will all go away and will happene agin in aboyut 15 years when the US decide to have another war... It the billions of borrowed dollars the US, UK have used to fund their war on Iraq that has caused this credit crunch... and we everyone in the World is feeling this, from Australia Canada, Europe. So it's no one's fault in Ireland, Ireland is a guinea pig to all this... it's very much larger...

    Don't be forced to sell, change to interest only, rent it out... go on holidays for a year... Cuba is really nice. and come back... things will improve in 2009... they always do... Agony Aunt from OZ

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  • Re: The Daft Sale Report Q2 2008

    Posted By: Bob Date: Saturday August 16, 2008 @06:34PM

    Ant

    Spot on, especially as the number in need of accomodation is increasing at a faster rate than housing output. The hope of lower prices is discouraging buyers but a time will come when purchasers realise that the market has bottomed. As househunters will realise this simultaneously and as developers will be unable to respond to market changes quickly, a shortage will again recur and the percentage increases will surprise many.

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  • Re: The Daft Sale Report Q2 2008

    Posted By: Omni Date: Tuesday August 19, 2008 @05:20PM

    Bob.....Bob the builder....Is that you?

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  • Re: The Daft Sale Report Q2 2008

    Posted By: roc Date: Thursday August 14, 2008 @11:31AM

    What is becoming more and more obvious is that there can be no real scientific, rationalist basis for valuing land. There is only an 'accepted theory' that is promulgated by various interests. In reality, maybe everyone has a claim to the land... or it might be priceless as the Indians or Aboriginees thought it..

    Jean-Jaques Rousseau said of the first man who ever enclosed a piece of land as his own, “If only someone had pulled up the stakes and cried to his fellows: ‘You are undone if you once forget that the fruits of the earth belong to us all, and the earth itself to nobody!”

    As human-beings we have needs for shelter, security, and status. And it is land and property that can fulfill these needs.

    This fact has been overtly manipulated to extract promises from people of thirty years of their working lives in return for what should be a human right. ie. shelter, security, and status. (eg. using the insidious phrase 'property ladder')

    Here in Ireland it takes around 2000 hours of labour (including materials, delivery etc) to build a starter apartment using current technologies. Then, estimating interest rates very conservatively, it will take someone on the average industrial wage well over 30,000 man hours of their labour to repay it!

    This is an injustice that needs to be repaired. Sure, it's going to hurt like hell..

    Our financial problems stem from the 'promises' that have been extracted from people in return for home ownership. Essentially, the banks have suddenly gone... "errr, actually, we're not sure about the worth of these promises anymore... they're a bit mad in all honesty..." ... AND! They are now trying to pass on these 'promises' to the government and taxpayer in return for hard cash!

    Sorry, but sod them.

    Though, What I worry about most is that when these 'promises' go bad, governments will be forced to become even more totalitarian to ensure that people fulfill these 'promises'.

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  • Re: The Daft Sale Report Q2 2008

    Posted By: brianjones Date: Friday August 22, 2008 @10:20AM

    There are a lot of people making assumptions here.
    A classic one is 'wage inflation'. Why do you think there will be wage inflation going forward? All I can see is 'wage stagflation'. I have seen this in Asia and it is a real possibility in Ireland for the next 5-10 years as the economy cools down and getting a job becomes more competitive. There will be no wage inflation.
    The first stage will be property correcting down, perhaps 40%-50% in some cases. The next will be a prolonged period of no price increases. The only thing that will be price increases to a particular property will be the infrastructure and amenities that develop around it.

    The pricing of housing will mirror income more than any other issue. When cheap credit and loans are removed that is the only way to get cash.

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  • Re: The Daft Sale Report Q2 2008

    Posted By: Kevin Power Date: Wednesday May 16, 2012 @02:58PM

    In relation to both the wider economy and the housing market it can be difficult to see an upside in the short-term when such negative data-flow continues to wash over us. Overall I remain very positive on the medium-term outlook for the Irish economy. Once the current housing correction is behind us and international credit markets return to some form of normality, the evidence supporting the ESRI view of near 4% trend growth in the economy is compelling. The housing market correction is already well advanced as housing starts have reacted swiftly to over-supply and stock levels in much of the country could clear fairly rapidly once confidence returns to the market. I suspect we will hear a few more terror inducing headlines from RTE before the end of this year but as we look into 2013 a moderation in world oil prices and subsequent reductions borrowing costs could be the kick-start that the Irish housing market desperately needs

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