Migration the joker in the housing market pack

Ronnie O'Toole, Chief Economist, National Irish Bank

17th Oct 2007

Ronnie O'Toole is our guest blogger, commenting on the latest Daft research on the Irish property market.

Some cad has to be the first to predict the onset of Christmas, so it may as well be me. And as the year draws to a close, naturally we start consigning our memories of the property market in 2007 to the green wheelie bin of the data archive, and start looking in wide-eyed wonder at the glittering package that is 2008.

2007 will not be remembered fondly. The Daft Asking Price Index for Q3 2007 shows that house prices have been marking time all year. The index for September shows that prices have eased back 2% since July, undoing the earlier modest gains. On a 12 month basis, asking prices are more or less where they were this time last year.

So will 2008 be a year of unrestrained joy, or will it usher a widespread gnashing of teeth? In the market for an asset such as housing, short run prices will always be sensitive to the whims of consumer sentiment. On this score, there is plenty of evidence in the Daft analysis that consumers continue to sit on the fence. Of properties initially listed in January, almost 1 in 5 is still on the market. This has forced many buyers to push down prices. About 10% of properties posted in 2007 have had their price reduced.

However, like anything that is freely bought and sold, the invisible hand of market competition is busy guiding house prices. It is content to do so quietly, gently nudging prices rather than dragging them back to fundamentals by the scruff every quarter. With an emerging consensus that supply will fall to 50,000 per annum over the next few years, attention must now turn to what is likely to happen housing demand.

In trying to predict long term housing demand, the joker in the pack is immigration. Assuming zero net immigration, we will probably need 38,000 homes to be built over the next number of years. If immigration runs at the high levels witnessed in 2006, then we may need more than 66,000 homes.

The implication for house prices follows from this. If we continually build 50,000 units, but only need 38,000, then house prices will struggle to re-gain momentum. If on the other hand .... well, you get the idea.

Where will immigration go from here? Welcome to the world of pure speculation, where my comparative advantage as an economist over you, the interested punter, more or less vanishes. This intellectual no-man's land has left space for a raft of commentators to start speculating on where migration is going.

The dominant stream of speculation doing the rounds is the 'frontier' paradigm. By this reasoning, the wave of new settlers from Eastern Europe that have set up camp in the Wily West that is Ireland have largely been employed in building this new world. By this theory, as soon as construction weakens, these new settlers will up-sticks and head home. This reduction of net immigration to a trickle will serve to further deepen the slowdown in construction and house prices. For example, the ESRI has predicted net immigration will fall from over 70,000 in 2007 to 25,000 next year.

I believe this will prove to be overly pessimistic. While it is true that construction has been an important source of employment for our Eastern friends, it is not as important as some would have you believe. Figures from the 2006 Census show that 18% of Eastern Europeans in Ireland work on building sites, only double the national average.

The other 82% are in a wide array of other jobs, mostly the jobs the locals don't want to do. They work as childminders, shop assistants, and security guards. They are cleaning our offices, processing cattle in our abattoirs and picking vegetables on our farms.

While Eastern Europeans will no longer find jobs readily available in construction, other occupations will show continued increases in demand. For example, rising female participation will continue to drive the demand for childcare workers.

So, immigration will not fall off sharply due to the fall in house construction. It will gradually reduce, however, though not because of what is happening in Ireland. To understand why, we have to look back to the source.

Take Poland. Unemployment there has fallen from 20% in 2002 to 12% in 2007 on the back of strong economic growth. Poland's Deputy Labour Minister Halina Olendzka recently predicted that the jobless rate would fall below 7% by the end of 2008. Events in Poland reflect a broader reality - the well of cheap migrants is starting to dry up. The labour market in 'old Europe' has also improved considerably, so migrants increasingly have a choice of countries in which to sell their labour.

What impact will this have on the housing market? House demand will gradually fall off in tandem with slower inwards migration, though will remain at levels that look high relative to historical experience. Rents are likely to remain strong, and the shift towards buy-to-let from owner occupancy will continue.

Importantly, the fact that this will happen gradually will allow the wider construction industry to accurately predict the future demand for housing, and to adjust their plans accordingly. There will be no unexpected collapse in migration that may have tipped house prices over the edge.

Of course, all of this speculation is subject to the not inconsiderable caveat that none of us really know what is happening with migrants. Is there any prediction I am 100% certain of? Short of the onset of Christmas, not really.


HIGHLIGHTS:

Daft Asking Price Index (API)
Daft Asking Price Index (API)

Properties listed on Daft.ie recording a price fall during 2007
Properties listed on Daft.ie recording a price fall during 2007


SNAPSHOT:

Average House Prices across Ireland in Q3 2007
Average House Prices across Ireland in Q3 2007

Discuss This Article

  • Re: The Daft Report Q3 2007

    Posted By: Norno Date: Wednesday October 17, 2007 @01:24PM

    Well the biggest problem with this report is its focus on asking prices. This is not what the properties sell for. In the past properties have been bid up above asking prices (e.g. 10% but often more). Now, in the current environment people are accepting offers belows asking (e.g. 10%). Despite a headline no-change in asking price this would actually indicate a drop pf 20%! In the UK there is a database from the Land Registry (www.houseprices.co.uk) that list the acutal SELLING price of properties over time. Something similar in Ireland would make for some very, very interesting reading.

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  • Re: The Daft Report Q3 2007

    Posted By: TheOrb Date: Wednesday October 17, 2007 @02:58PM

    Totaly agree, even the property bulls out there would agree the only property selling at the moment is where vendors are willing to accept prices of at least 20% below the asking price.How times have changed so very quickly !

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  • Re: The Daft Report Q3 2007

    Posted By: Anon Date: Wednesday October 17, 2007 @05:19PM

    Well with all the doubts being talked about in relation to the market, it is no wonder that the market is static and I repeat static. David McWilliam-itis has hit the country hard. There is no evidence to suggest massive falls in house prices. Frightening first time buyers into rental accommodation has gone on too long which has seen a slowing of the market and an obvious rise in rents. You would think people would want the market to crash! A strong economy and good demographics with some realisim and eventually afforability returning to the market paints a bright future. Interest rate cuts would help the market significantly and that is what will determine the market in the medium term but predictions today are quite positive in this regard.

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  • Re: The Daft Report Q3 2007

    Posted By: http://www.gombeennation.blogspot.com Date: Thursday October 18, 2007 @04:24PM

    Your omitting the fact that the market has been artificially inflated by investers availing of tax breaks and shelters (such as Section 23s) right through the most pronounced period of property price inflation in the history of the State.

    According to CSO figures, a large percentage of properties bought within the last six years are lying empty, as investors relied the bubble inflating indefinitely (which it did for a while thanks to them).

    So don't give me the bleeding heart stuff about rents rising... there are lots of rental properties waiting to come on stream when these greedy bastards HAVE to rent them out.

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  • Re: The Daft Report Q3 2007

    Posted By: safeashouses Date: Wednesday October 17, 2007 @01:24PM

    Very open an honest commentary on the report. It is great to see an economist who doesn't pretend to be able to predict the future like some do!

    With regard to the report it would be interesting to see what impact the lowering of prices had on the speed of sale of a property? Did the people who dropped their prices by <5% see any quicker "time to sell"?

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  • Re: The Daft Report Q3 2007

    Posted By: ricky Date: Wednesday October 17, 2007 @05:51PM

    What a stupid comment re complimenting an economist for saying he does not know what is going to happen-what a plonker!!The only reason the author is so vague is that he knows that that the huge oversupply of residential units in the marketplace with the reducing demand due to increasing unemployment(projected 2008 5.5%)/emigration(Germany and Holland opening borders to all EU citizens)/terminal decline in manufacturing and low cost service industries(call centres/software development)/outpriced tourist facilities/etc can only have one result-30%-40% decrease in house prices-see UCD Kelly report BUT he is reluctant to stand up and be counted!!!
    Most eastern Europeans with any savvy are already on their way home via Holland and Germany.

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  • Re: The Daft Report Q3 2007

    Posted By: safeashouses Date: Thursday October 18, 2007 @07:59PM

    relax ricky, they're only houses ;)

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  • Re: The Daft Report Q3 2007

    Posted By: Holger Date: Thursday October 18, 2007 @10:26AM

    "The dominant stream of speculation doing the rounds is the 'frontier' paradigm. By this reasoning, the wave of new settlers from Eastern Europe that have set up camp in the Wily West that is Ireland have largely been employed in building this new world. By this theory, as soon as construction weakens, these new settlers will up-sticks and head home. This reduction of net immigration to a trickle will serve to further deepen the slowdown in construction and house prices. For example, the ESRI has predicted net immigration will fall from over 70,000 in 2007 to 25,000 next year."

    I think this is a very good point - it is really an important factor how immigration will develop - think also important is the further development in US - without the situation there the interest rates would be higher already

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  • Re: The Daft Report Q3 2007

    Posted By: Brian Date: Thursday October 18, 2007 @11:15PM

    Go read any analysis of Irish housing by an independent economist; i.e. not an estate agent economist, bank economist, etc... all the independent economists same the same thing Irish property is overpriced. That is it full stop.

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  • Re: The Daft Report Q3 2007

    Posted By: Damian Date: Friday October 19, 2007 @05:54PM

    Most honest article yet....not. Lets be honest with each other folks. The boom is over and investors and people trading up or down will have to drop 20-30% to sell. Thats what is actually happening out there, despite what the so called "experts" say. We all know people who have had their property on the market for the last six months but have not had one interested buyer.

    First time buyers, who drive the market are staying away and who would blame them. Would any of you buy your first home in such an uncertain climate.....i think not. Why not wait a year or two until the market reaches a more realistic equilibrium or crashes.......drive it on i say.

    The construction industry boom is over and thats the first sign. For me and many others who couldn't afford to buy a home for the past 8 years, it's little consolation. I've had to emigrate to get my first home. In my opinion prices are going to have drop back to 2002 levels to get the market moving again.

    For those who bought their first home last year, my heart goes out to you. For those of you who bought to make a quick buck or bought 10 years ago and borrowed to buy more property.........i hope the arse falls of of the market you greedy bastards.

    Damian (Now living in a beautiful 4-bed in sunny Brisbane)

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  • Re: The Daft Report Q3 2007

    Posted By: ron Date: Saturday October 20, 2007 @12:07AM

    Dear Reader...I think ireland in comparison to other countries is an out and out success story.. One must look at the big picture. The whole thing is not a phenemomenon of property developers. If you think of Irelands physical environment its one of the best in Europe, the ordinary taxpayer did pay and did work, and people still want to play down so much hard work by this country, it deserves alot more appreication than the comments of a few ecomomic hardliners...it seems a bit inappropriate to me..Ireland is a success story lets make the most of it.. Our people have worked for it...and should be entitled to a good legacy. Best wishes.Ron

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  • Re: The Daft Report Q3 2007

    Posted By: Anonymous Poster Date: Saturday October 20, 2007 @12:39AM

    House prices are far to high in dublin.There will be a change and a big one. First time buyers should hold back and wait. They have been left homeless for to long.

    Tony.

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  • Re: The Daft Report Q3 2007

    Posted By: BT Date: Monday October 22, 2007 @07:20PM

    Why do people such as Damian - have it in so much for investors - I have a couple of investment properties - all of which I have had to work hard for to buy and maintain - does that make me a greedy b*****d or simply someone who was prepared to take a risk and wanted to better himself

    I am fully aware that prices go up and down and that is the risk with any investment shares or property - To me if the prices reduced in Dublin by say 30 - 40% I would buy again as rental yields would become self sufficient.

    Until that day I will look to other markets and businesses where I can make some money and risk losing - but at least I had a go and didn't spend my life moaning about others success

    Best of luck all

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  • Damien and the rest of the begrudgers

    Posted By: fadalease Date: Tuesday October 23, 2007 @09:26AM

    Well said there BT.Yes there is a culture of begrugery in this country which Damien has highlighted,the bleedin heart story,could,nt afford a house here had to move to Australia etc etc.No you did,nt Damien,but I suspect that you may have ancestors who were sent there years ago!
    Yes the begrudgers would love to see this country back in the mire we were in back in the 80's(now that was an era when one would have to emigrate).They would love to see the people who put their money where their mouth was an made a nice few quid from investment properties to fall flaton their face.But guess what Damien and the rest of the begrudgers,its not going to happen.The majority of investors have been and remain in for the long haul. Most of them started buying in the early 90's and have trousered capital appreciation in the order of 450%.And they have been buying since then and seen huge capital appreciation on these also.
    The demand for rental accomodation remains with properties turned over inside a week and rents up 12% on last year.With the population of this country projected to reach 5 million by 2015 and 6 million by 2050 do you think this will change!!!Happy days the investors who entered the market late with a long term view ie 10+ years will still make a few quid.
    Never mind the begrudgers like Damien,fencesitters who never took a punt on anything in their lives and begrudge others who did.Its a pity more begrudgers like him would,nt feck off to the land of OZ as i,m sure the country would manage quite well without them!

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  • Re: The Daft Report Q3 2007

    Posted By: immigrant Date: Wednesday October 24, 2007 @03:33PM

    well said man about damien

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  • Re: The Daft Report Q3 2007

    Posted By: Looking Forward Date: Thursday October 25, 2007 @08:37PM

    I want to talk about property in Ireland. I don’t really want to talk about it in abstract terms, but in the terms of what I see happening.

    Property is - by and large - not selling. People don’t seem to have the appetite for it right now. A lot of people just don’t have the money. People who have a vested interest in this state of affairs not continuing have not worked out how to end it. They are screaming for the government to shore it up. The government - thus far - have been deaf. Maybe they are trying something.

    I want to tell the developers and the vendors something. I want to buy property. The problem is I do not want to buy it at the price you are demanding. Just because some people were willing to pay an inflated price on what they thought was a sure bet does not mean we all want to. No apartment in this city is really worth four hundred thousand euro. So as long as you decide to demand a price which I am not willing to pay, I will not buy. And I have options.

    I already don’t have to pay stamp duty so tinkering around with that is not going to change anything. And I get reasonable mortgage interest relief too, so it’s pointless messing around with this. The people who can change this state of affairs are the vendors. If you really, really want to sell, you will have to drop your price. If you cannot afford to do this, then you really couldn’t afford to buy it in the first place and I don’t see why I should pay for your mistake. After all, I have alternatives. I can rent. Or I can buy from someone else who has faced a little more reality than you.

    The government should not be in the business of shoring up the property market. We have a problematic health system. We have a problematic public transport system. We have a problematic education system. Siphoning off money to enable people like me to bail out bad purchase decisions is a wholesale waste of the falling national income.

    I want to buy. Really I do. But I also want value for money and I’ll be the judge of what that represents. Not the vendor.

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  • Re: The Daft Report Q3 2007

    Posted By: Cris Date: Friday October 26, 2007 @10:51AM

    I understand exactly what you are saying. The only thing is that vendors are not in a desperate need to sell. They are protected by lots of capital built up in these last years. And as people are getting greedier and greedier no one and I say no one will accept a loss. The problem is a gap opening wide in this modern society between the wealthy and people who are not so well off. In the case of first time buyer, well, as that is the property where they are living they will not put it for sale. There are European countries where the economy is in bits and in spite of it property prices keep going up. In the same countries people are trapped in the rental market. The only good investment at the moment is to buy where you really like and in the place you really like. I bet in 2-3 years time property in any city centre will have a different capital appreciation than property in the suburbs. Best of look to all buyers and sellers.

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  • Re: The Daft Report Q3 2007

    Posted By: Benny Date: Friday November 2, 2007 @10:06AM

    I am an emigrant. I left Ireland reluctantly a number of years ago, because even back then, working full time and some weekends, I found it increasingly difficult to pay all the amounts demanded by various greedy parties. Tax man; landlords, and higher and higher prices in general. I even know of people working full time, who have to live in hostels, because they can't afford the rents on the most modest of accomodations.??? That is a damning indictment on a society that prides itself on a "booming" economy. Booming for whom??? The fat cats seem to be getting fatter and the ordinary working people are becoming ever and ever poorer. Ireland is a great country to live in if one has the money. The harsh reality though, is that so many people don't have enough to do exactly just that. Two years of hard appreciated work in Irelands nearest neighbour, and I was able to buy a small house. In Ireland, no matter how hard I worked, I couldn't even get a deposit together.One day, I hope to return to the "auld sod", but untill things become far more realistic, it looks increasingly like I'll have to settle for somewhere else, and dream on...The south of Spain looks inviting...and there's all that sun as well...

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  • Re: The Daft Report Q3 2007

    Posted By: Peter Ireton Date: Friday October 26, 2007 @01:10AM

    My interest is in rental trends as this site has traditionally been more related to property rental than house sales.

    Your quarter 3 report appears to be focussed entirely on property sales, while ignoring the trends in renatls. while the report states that house rentals remain strong the details to support this statement appear to be missing.

    Pleaser supply.

    While I have nos objection to the information in relation to house sales, I also require the details in relation to trends in the rentail market

    best regards

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  • Re: The Daft Report Q3 2007

    Posted By: fadalease Date: Friday October 26, 2007 @10:14AM

    Hi Peter
    The previous Daft report released on August 20th deals with rental levels and yields.Just go to the top of this report and left click on Ronan Lyons name and this will bring it up.Also I think the CSO released something on rents last week

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  • Re: The Daft Report Q3 2007

    Posted By: Anonymous Poster Date: Monday October 29, 2007 @08:35PM

    Many of the above messages are from prospective purchasers who are increasingly desperate for prices to fall. Whilst a small number of vendors in need of cash will accept less for their houses, most wont as interest rates (the main price determinant) are expected to fall early next year.

    I recently had two properties on the market but withdrew them as I was not getting the amount sought. I'm getting 30 per cent higher rent for each now and am simnply delighted to hold them. Most landlords feel the same.

    A combination of factors now mean that, with vendors in short supply, prices will increase in 2008. Buyers have been holding off since November, there are more purchasers then sellers, builders are erecting fewer dwellings and many areas have no water or sewage etc. All of these items combine to indicate a shortage of accommodation in the near future and rising prices for house hunters.

    You can continue to post messages on the internet and pay higher rent or buy a home. Whether you are getting value is not up to you to decide, its up to the market and, as expected in early 2008, when the prospective purchasers who have been waiting since November 2006 start looking, in the knowledge that prices havent fallen, house values will rocket again. It happened in 2001 and it will re-occur in 2008.

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  • Re: The Daft Report Q3 2007

    Posted By: Cee Date: Tuesday October 30, 2007 @07:27PM

    Immigration is slowing but what about emigration? Surely this would increase if people cannot afford to live here? Therefore, I think that the scope for price increases in 2008 is non-existent. Also, there will be an increasing number of owners who will be forced to sell their homes in 2008. The banks have been sitting on the fence too - but not for much longer. As for the article from the NIB economist - it really is a lot of waffle about nothing. It takes no account of what is happening in the wider economy. The effect of job losses already announced will be very severe in the New Year.

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  • Re: The Daft Report Q3 2007

    Posted By: Holger Date: Wednesday October 31, 2007 @02:51PM

    the rental prices clearly show how the exploitation of working people from abroad is maximized by the Irish - it surely is good for houseowners when the rents can be kept high but Ireland does not only need a certain number of immigrants/guest workers but also certain qualifications are needed - to be honest I am split about the whole thing on the one hand I think there are many people here who should pay for their greed - on the other hand I fear for many hard working people who were driven into this completely overprized housing market during the last two years - well I don`t think it is the new Irish way to say "welcome" to strangers - it might be just the lack of experience with immigration - so good luck for all those who bought a home to live in - I really do hope they don`t get crushed in the coming downfall - many of this 100% financed property with a tracker certainly will come back to the market cheaper

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  • Re: The Daft Report Q3 2007

    Posted By: Cris Date: Wednesday October 31, 2007 @05:21PM

    Market overpriced? I think you have no idea of what is happening in the rest of Europe. Take Italy for examples, there are plenty of houses empty and not rented, properties that would not even have a good rental market. Why is the property market not crashing? Simple, because the vendors do not want to sell at a discounted price. Today money is perceived as the most important thing in life, unless vendors are forced to sell, they will not give an inch. Most of the property owners in Ireland have a huge portfolio, do not forget that. As per first time buyers, well, if you buy your first home and you need to sell or relocate after 1-2 years, well, this is a bit more than a simple misjudgement or calculation error. In this case there are really no excuses. Buying property should be seen as a big thing and not as a mere speculation move. In the end, if one buys the house of his/her dreams and can confortably afford the repayments, will a 20-30% prices fall be such a disaster in life? The disaster will be when one buys houses randomly with the presumption of asserting that prices will go up anyway. That is not true! I bet prices of properties in the city centre will never fall while I am expecting properties in the outskirts to fall quite a bit and if there will be a fall it will not apply to all properties. Some properties in the Gobi desert will be at risk.

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  • Re: The Daft Report Q3 2007

    Posted By: Holger Date: Wednesday October 31, 2007 @07:10PM

    @Cris

    when a first time buyer has to sell within the first 2 years it is not his fault but the fault of the one who offered him the loan - what exactly is the point in leaving a high percentage of property unoccupied to keep the prices stable and keeping people from coming here to work and bring more income to Ireland - if that case happens this is a real problem - I am an enemy of any kind of market regulation but maybe in this case the government should really do s.th. that forces owners to rent out property

    I mean what is on offer in Ireland - a good job market in connection with a bad infrastructure - no real medical system - schools I don`t know I like the school uniforms my wife doesn`t - the weather I even prefer Germany when it is about the weather - little bureaucracy - difficult integration - well at the moment I can`t convince my wife of affordable housing and that says s.th. right?

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  • Re: The Daft Report Q3 2007

    Posted By: Cee Date: Wednesday October 31, 2007 @07:36PM

    As if proof was needed following my post yesterday - today's business news on RTE Aertel makes very gloomy reading. 500 job losses in Waterford Glass. Shock increase in Euro inflation which is now running at 30% above ECB preferred rate - 2.6% compared to 2%. In Ireland, it is double that again! Oil reaches USD 94 per barrel Further slide in dollar value. Euro confidence slump worse than expected. Ireland scores low on infrastructure - ports as low as 64th in the world, roads 60th, and railways a lowly 55th. And that's just for today.

    Most of us have lost sight of what is happening in the real and wider economy. House prices are only one issue. We also have the highest electricity and gas prices in the EU - almost 50% more than the UK prices for the same services. Wage and living costs are ridiculously high - we have the second highest minimum wage in the EU (after Luxembourg) and yet nobody could live on it. Ireland is not London, Paris or Frankfurt. We are a small island on the periphery of Europe and we cannot sustain what we have created.

    I'm afraid that we are all at the beginning of a very sharp fall in the economy. I've seen all this before and I am well prepared for it. I am priveleged to own 3 houses and as Cris rightly says, I don't have to sell them. Unfortunately, there are many who will have no choice and these people will be forced to sell at much reduced prices. I also believe that it will take another 12 or 15 years or so (like the last time) just for prices to recover to the nominal prices of last year. I don't believe that within my lifetime I will ever see real values back at last year's levels. I am 52 now. I know that property prices will always increase in the long term but not within the time span envisaged by most purchasers within the past few years.

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  • Re: The Daft Report Q3 2007

    Posted By: Cris Date: Thursday November 1, 2007 @09:45AM

    Who is forced to sell in Ireland considering the average industrail wage? Can I have a couple of examples of this?

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  • Re: The Daft Report Q3 2007

    Posted By: fadalease Date: Thursday November 1, 2007 @10:09AM

    Cee please quote accurately the inflation figures!The figures you quoted for Europe(2.6%) are measured by the HCIP measure which does not take into account mortgage repayments.
    The inflation figure of circa 5% for Ireland is measured using a different method and includes mortgage repayments.If mortgage repayments were stripped out of our figures we would be below the current european averge of 2.6%

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  • Re: The Daft Report Q3 2007

    Posted By: Holgerchen Date: Thursday November 1, 2007 @03:23PM

    @ Cris "There are European countries where the economy is in bits and in spite of it property prices keep going up"

    well I can only talk for Germany - there are big regional differences - Munich was always expensive as is Stuttgart -economy has recovered somewhat - Berlin is on an historical low - especially in comparison to other capitals - Don`t get me wrong I don`t expect the whole economy in Ireland to be in bits but the property market will become very interesting in the next 2 years

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  • @Holgerchen

    Posted By: Cris Date: Thursday November 1, 2007 @04:28PM

    I have property in Italy and I bought a place there simply because I liked it and not for speculation purposes, a small place in the historic centre of a small town. It was 2 years ago. Prices doubled, in same cases trebled. Now, the Italian economy (Italy is my homeland) has the slowest economic growth in Europe, the average wage is 50% of the average Irish wage but prices are the same as here in Ireland. (actually, I can say that Milan and Rome are definetely more expensive than Dublin). Just tell me why prices are not falling. I know the answer as I know the situation in my homeland. And unlike Ireland, the Italian population is decreasing. Which economist can give me an explanation for this?

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  • Re: The Daft Report Q3 2007

    Posted By: cee Date: Thursday November 1, 2007 @08:01PM

    Cris - history always repeats itself. Here's what happened to me in the 77 to 81 boom. I bought a house in Celbridge for £36K on a new development at the height of the boom in July 1981. Prices actually increased to £39K over the following months and, indeed, my next door neighbour paid that price. During 1982 and 1983,several houses went on the market at asking prices around £37K. However, people would not pay this and owners would not drop - exactly as you say. During this peiod, all new building had stopped. Then, in 1984, the developer started building identical new houses and marketed them at £29K - back to where prices were in 1979 in the early part of the boom. Of course, that ended the £37K asking price. It took 15 years for house prices to recover their former values.

    Builders will build because that is what they do. They will sell at prices the market will pay. This is what determines real values.

    Inflation is 5% and rising. The point made by another poster about mortgage rates being included is ridiculous. Why then was our inflation rate much higher than the EU when interest rates fell in the years after 2000? As I said, the argument is ridiculous and even Bertie doesn't use it.

    The Irish people can keep their heads in the sands but I won't. Again, we have more gloomy business headlines today - manufacturing down sharply in October. History is repeating itself.

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  • Re: The Daft Report Q3 2007

    Posted By: Anonymous Poster Date: Saturday November 3, 2007 @04:59PM

    House-hunters like to assume a major economic downturn in 2008, not a minor fall mind you, but an earth shattering one. Sorry folks, it simply wont happen. Construction is just one part of our economy with the remaining sectors being controlled by events across Europe and in the USA. It is an incontrovertible fact that our economy is still doing very well (income tax is 3% higher than forecast) and this will continue into 2008.

    A sharp distinction needs to be made between what may theoretically occur and what is likely to happen. Yep, we could all be unemployed in 2008, immigrants may all return to their native countries, interest rates may soar and we might have a recession. The likely prognosis however is that this will not happen and that we, as a country, will be financially better off at the end of 2008.

    I've been reading property pages like these for years, with previous complainants ending up paying higher amounts since property prices rose as they were busy typing messages of economic doom and gloom on the internet. So, take my word for it, stop moaning, stop paying rent and buy your own home. Otherwise you'll still be writing messages next year from your rented house about how you can't afford a home and forecasting a drop in prices in the following year on the basis that the economic downturn forecast for 2008 has taken the next bus and will arrive in 2009!

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  • Re: The Daft Report Q3 2007

    Posted By: Mossy Date: Sunday November 11, 2007 @08:31AM

    Agreed, as you all know the daa has started work on the construction of T2, now if the people in the know thought that Ireland would go back to the dark days of the early 80s (I had to leave 83 for work or sign on the latter did not appeal)they would not be investing millions for the future, it is predicted that when T2 is open there still will not be enough capasity for the anticipated millions that will pass through, and an additional terminal is already being talked about.

    House prices are the hot topic at the moment, Christmas next with a bit of weather thrown in for good measure then comes Janurary and the summer hols will be the hot topic.

    Feb 83 a cold night and 5 punts in the pocket when I stepped on that ferry the rest is history, so boys and girls chin up you never had it so good and don't talk yourselves into the doom and gloom.

    A thought for some of you that are intending to buy, 4 or 5 of you get togeather and start a buyers club,just think, if you approached a developer with a view to buying 4 or 5 properties I am sure you could obtain a good discount

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  • Re: The Daft Report Q3 2007

    Posted By: id10t Date: Monday November 5, 2007 @02:58PM

    It has been mentioned here before, and when I read it, I totally agreed with it. I WANT to buy, I am on a better than average salary, and I cannot afford to buy within a two hour commute of my job. As a result, I am not going to buy, because I will not pay an over inflated price for a property, or spend my life in my car. I have a deposit, and savings, but I am not willing to invest in this country,
    I am also looking at the rental market, and I can see that rents are now also becoming over inflated. So, what are my options then? Simple, I will be leaving the economy in the next 12 months, and going somewhere with a better standard of living. I do not want to work 7 and a half hours a day, and spend another 4 commuting, and there are lots more like me. And we are all Irish.
    Here is a telling statistic. Australia receives about 350 migration visa applications a month from Irish people. That is about half the monthly applications for Australia. And that number is rising. Canada also is receiving increased applications. Never mind our Eastern European immigrants. They are currently buying property back home, and they will be moving home, most of them via London for the building of the Olympic villages. Irish companies have the contracts, but they are employing Eastern Europeans. Just ask them.
    It is the numbers of Irish leaving to consider, not because there are no jobs, but because there is no quality of life as a result of poor transport, health and education services, and over inflated prices across the board.

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  • Re: The Daft Report Q3 2007

    Posted By: Jim Date: Monday November 5, 2007 @05:13PM

    Whilst a small minority of house-hunters will feel the same, most won't actually do anything except complain and apart from visa issues, lethargy or intertia will minimise the number of Irish emigrants. This is especially so given the stringent immigration criteria applied by non-European countries such as Austraila, Canada and the USA.

    Moreover, immigration levels will exceed the number of Irish leaving, thus further inflating housing demand. As the supply of rented accomodation is falling, as investors are putting their money elsewhere, rents will increase, as evident from present trends.

    Previous patterns show a clear relationship between prices and rents. As one goes down the other increases, like goods on a weighing scales seeking equilibrium and for this reason, I find it difficult to accept that both are going to fall in the near future.

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  • Re: The Daft Report Q3 2007

    Posted By: Joe Blog Date: Tuesday November 6, 2007 @11:17AM

    I think everybody is missing the bigger picture. I left Ireland for London as green as grass in '89 when unemployment was at 60%, yes folks...thats 60%, and the only jobs available were the jobs are European counterparts are now doing. There was nothing going on here. It was a depressing place to live and anyone now in their late thirties/early forties knows exactly what i am talking about

    I came back in '98 and fortunately i have been in well paid work since. Like a lot of people I missed the boat on the property front. Didn't get in early enough. Since 2002, things just got silly with property prices going through the roof so i decided to stay out of it and rent. I have no regrets. We have come a long way since those grey days but i do fear for the future of this little Island.

    I work in the construction industry and things haven't really slowed down. They've come to a full stop. A year ago i was getting offers of work everyday. Now i will be lucky to have work up to XMAS. People don't realise this but the majority of trades/professionals involved in the construction industry in Ireland are paid by the hour so if there is no work, there is no money coming in to finance those big mortgages. The nail in the coffin for the Celtic Tiger was when Amgen pulled out of Cork. When pharmaceutical companies stop investing in Ireland than its time to start planning to emigrate, which i and a lot of people i know already have.

    Greed and rich living has consumed this country for nearly ten years. Did you really expect the party to go on forever?

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  • Re: The Daft Report Q3 2007

    Posted By: id10t Date: Tuesday November 6, 2007 @11:47AM

    I agree with your last comment about the party lasting. For years we have had people says "this time it is different, it will last", but it is never different. Bust of some sort always follow boom, there has never been a case where it has not, and I think we all agree that the boom here has been really big. It does not mean a big bust, but there will be bust. It always happens. No country has ever beat the cycle, no matter how many times they convince themselves they can. I hope I am wrong, but has it ever been different this time?

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  • Re: The Daft Report Q3 2007

    Posted By: PAUL Date: Tuesday November 6, 2007 @12:24PM

    Cmon Joe unemployment was never @ 60% nationally.The national average figure was in the 20-25% range at its worst(in the mid 80's) and while there were areas in cities with unemployment in the 60% range eg ballymun,ballyfermot,sheriff street,pockets of limerick and cork etc,there were also areas in the country where unemployment was in the 10% range.

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  • Re: The Daft Report Q3 2007

    Posted By: Get out while you can Date: Tuesday November 6, 2007 @02:34PM

    The chickens, it would appear, are coming home to roost. Someone dared mention the possibility of negative equity. You have no idea what a sea change that is in six months - well if you live in Ireland, possibly you do. Ireland, you see, was different. Ireland couldn’t have a housing bust. Only a housing boom. Prices could only go up, and at the very least, in line with the CPI. But…

    Not only that, despite the fact that most of the banks in the country were trying to push out 40 year 100% mortgages and in some cases interest only mortgages, the people in the know with a vested interested in the housing market continuing to rise such as bank economists and estate agents swore we couldn’t have negative equity in this country because hey, no one actually had 100% mortgages, really and the LTV of housing versus mortgage loans was only about 65%.

    And anyway, the housing market wasn’t going to crash.

    Reality, however, has a rather nasty habit of not reading the script, particularly the best case scenario script whereby nothing will go wrong. So, the first we heard was there’d be a soft landing. It could be controlled.

    Then we heard that there’d be a collapse in rural parts of the country but that Dublin would have a softlanding. Now, however, we hear that parts of the Dublin commuter belt are at risk of negative equity. Admittedly the “Dublin commuter belt” is a less than quantifiable location, but the report above cites it as locations within 2 hours drive of Dublin.

    It is my honest opinion that there will be major issues in the housing market, and Dublin - even the so called more desirable areas - will not be immune from falls in housing values. It is pretty much inevitable, at this stage and it is too late to do anything about it other than let the market correct, even with the squeals of pain and fury.

    I feel a certain amount of Schadenfreude. I wish I didn’t, but there you have it. When the dust finally settles, it is entirely likely that there will be another lot of screaming about whose fault was it and why didn’t anyone see it coming? The problem is, there are none so blind as those who will not see and a fair majority of the Irish public did not want to see anything.

    Some things are so simple. Housing price inflation of 20% is a bad thing unless it is accompanied by a corresponding rise in incomes. It has not been. Any sort of inflation at that rate is a bad thing - it is symptomatic of a less than healthy economy.

    Average house prices being between 9 and 12 times average salaries (depending on whose set of statistics you are using) are not a good thing. It suggests that a significant number of people in the market are being priced out of the market.

    As an added bonus, all this happened in Ireland when interest rates were at an all time low. It means that people who buy at the very limit of affordability have absolutely no margin for error.

    But no one really wanted to face that here in Ireland. As long as prices went up, and people “built up equity” everything would be fine, you see. If you talked down the market, and pointed out that asset prices could fall as well as rise, you were ruining people’s happiness with them feeling all sorts of rich. Their illusions, in other words.

    People have done silly things in this country. They have bought second apartments as pensions. They have bought holiday homes in countries they have never visited. They have been ripped off because they have been gullible. They have been gullible both here and abroad. They have bought houses they don’t want in places they don’t want to live in because “it was all they could afford and you have to get on the ladder”. They have bought sad, tragic apartments in out of the way places unserved and unloved by any sort of public transport because you have to get your foot on the ladder. Many people have gambled a lot, both in money terms and lifestyle terms because they thought nothing could go wrong.

    The scary thing is that the writing has been on the wall for more than five years - I would say seven - and very few people wanted to see it. Anyone who cried calm got metaphorically beaten up. Since I came back to Ireland 7 years ago, I have watched with increasing disillusion and dismay what has happened to the place. What saddens me more than anything is the cost of undoing the mistakes we have made will be huge, and the ramifications will go on for years. We had an amazing opportunity to develop the country and we blew it because no one had any sense. Not the politicians, not the population at large. Not only that, I can’t see any evidence that we’ll learn from this experience - next door they’re heading into a property bubble too and - this is the crunch - they’ve been there before.

    We need to get real. Things may well be very tough property wise for three or four years. In a falling market, my bet is 100% mortgages will disappear pronto courtesy of the risk of immediate negative equity. We need to stop blaming extraneous factors for putting ourselves at risk. It is not the fault of stamp duty that we have high prices. It is the fault of us for paying the maximum we could afford for property we didn’t really want. If the FTBs of this country had, en masse, decided that they would not pay 285KE for a one bedroomed apartment in Swords, you can be sure that one bedroomed apartments in Swords would not have been selling for 285KE. We need to sit down and work out what we want from our lives and make decisions accordingly rather than thinking “the only place I can afford to live is somewhere in Carlow, I’ll commute in”. If you have to ask “is it too far”, then the answer is guaranteed to be yes.

    A lot of people are starting to get nervous. If housing price inflation had tracked CPI over the past 10 years, it is entirely possible that our economy would be a little healthier than it is now. Currently, our economy is the economic equivalent of a child who has gorged out on sweets for five years, gotten very fat, and is about to puke its guts up and lose its teeth to sugar driven tooth decay.

    Last year, 40% of new house purchases were investor driven. 16% of our housing stock nationally not including holiday homes is vacant at the moment. Anyone who thinks that’s sustainable is deluded.

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  • @ Get out while you can

    Posted By: Cris Date: Wednesday November 7, 2007 @09:45AM

    If people were not willing to pay 285K for a one bedroom apartment in Swords builders would not be so willing to build new apartments and the construction industry would be employing only a certain amount of people. Consequently the scarcity of places would have spiralled up vertiginously rental prices. I would never pay that amount of money for a one bedroom apartment in Swords in all fairness but in life unfortunately most of common mortals have to choose between rent and mortgage. Most of them would like to own their own place and that is understandable. At the end of the day we need to see how much mortgage repayment/rental repayment impact the average Irish wages. Do you think that the situation is much better for the Polish/British/Italian workers (just three countries taken randomly but I know the story there)? Property prices in all European capitals are running fast. I think there is far too much pessimism in what you are saying. However, it is true that some properties in th commuting belt and in isolated places far from amenities and public transport are at risk. Some properties and some counties are overpriced in Ireland but not all of them. The day of the clever, patient, intelligent buyer has come.
    But waiting for a crash (not a discount that, I think. it is still possible even if not probable) is not a realistic approach to the problem.

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  • Re: @ Get out while you can

    Posted By: id10t Date: Wednesday November 7, 2007 @10:51AM

    The more people wait, the more chance of a crash. I believe people are finally starting to realise this. And as there is more and more negative sentiment in the news, and people considering the economy, I cannot see why people would not wait!
    I would be very interested to see what this years mortgage approval figures will be. How do the banks really feel about peoples ability to pay, and the possibility of asset going into negative equity?

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  • Re: The Daft Report Q3 2007

    Posted By: Cris Date: Thursday November 8, 2007 @10:31PM

    The points made by Cris are vaild if the wider economy continues to grow. However, it is this very economy which itself is likely to crash. As I predicted, inflation today is back up near 5% - double the EU average and you can't blame interest rates this time - we haven't seen an increase for mo nths. Erin foods is closing in Thurles - 500 job losses confirmed in Waterford Glass. We have already priced ourselves out of many markets and this process is now irreversable unless we deal with it immediately or face the consequential crash. The comments by David Begg, head of ICTU, earlier today provide further proof of our inability to improve our competitivesness ourselves. Therefore, the economic crash seems inevitable. It baffles me how so many people cannot see the demise of the Irish economy that is already happening before our very own eyes.

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  • Re: The Daft Report Q3 2007

    Posted By: id10t Date: Friday November 9, 2007 @10:47AM

    Well, Ben Bernanke, Federal Reserve Chairman has painted a very bleak outlook for the US Economy for 2008 with a combination of the losses from the Sub-Prime debacle and higher energy prices (http://www.rte.ie/business/2007/1108/fed.html). How will this effect us you ask? As a nation, maybe we finally do need to move away from being the unruly teenagers of the global economic structure, and realize that in the vast scheme of things as an economy, we are tiny, and anything that makes us uncompetitive will crucify us. A week Dollar is good for Europe, but not for us, because that is where we export the most to, and rely on the most for jobs. We cannot control our energy costs that much. We can follow "The Power of One" and hopefully get a proper integrated mass transport system and maybe should look at nuclear power, but things we can control, and this will make me VERY unpopular are the other things driving up the cost of living. Salary, house prices, and what we are charging each other for goods and services. But, when the people at the top are not leading by example, sure why should we, eh?
    I heard Charlie's "tighten your belts" speech on the radio the other day. I wonder how long before we hear those words again?

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  • Re: The Daft Report Q3 2007

    Posted By: id10t Date: Friday November 9, 2007 @10:51AM

    I wish to talk to you this evening about the state of the nation's affairs and the picture I have to paint is not, unfortunately, a very cheerful one. The figures which are just now becoming available to us show one thing very clearly. As a community we are living away beyond our means. I don't mean that everyone in the community is living too well, clearly many are not and have barely enough to get by, but taking us all together we have been living at a rate which is simply not justified by the amount of goods and services we are producing. To make up the difference we have been borrowing enormous amounts of money, borrowing at a rate which just cannot continue. A few simple figures will make this very clear...we will just have to reorganise government spending so that we can only undertake those things we can afford. ”

    —Charles Haughey, January 9, 1980

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  • Re: The Daft Report Q3 2007

    Posted By: Cee Date: Friday November 9, 2007 @02:52PM

    Very Good id10 - I remember it well. History repeating itself alright. The economy is heading into a very dangerous phase. Figurs out today show average weekly public sector pay at EUR 928 and rising at 5.5%. There is no way that we can afford this. At the same time, Dermot O'Leary from Goodbody's is predicting that economic growth will be "down" to 2.5% next year. How does he make that out? We will be lucky to see zero growth.

    By the way, in the same report, Mr O'Learly predicts that house prices will fall by a further 8% next year on top of a 5% fall this year. I would suggest that this is wishful thinking by Goodbody's which is, after all, wholly owned by AIB. AIB has a vested interest in trying to maintain inflated values in a market which they helped to create. With the economy in such a mess and heading for worse, house prices will fall by much more than the optimistic predictions of Mr O'Leary.

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  • Re: The Daft Report Q3 2007

    Posted By: Anonymous Poster Date: Saturday November 10, 2007 @10:20PM

    Just watch the Irish property market start to unfold in 2008.Just like the US property market.

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  • Re: The Daft Report Q3 2007

    Posted By: jack Date: Sunday November 11, 2007 @08:53PM

    Is there one buyer, just one, with an ounce of sense? Why talk in extremes about the economy and emigration, bankers and builders without even considering the mere possibilty that prices will stabilise or even rise next year? Seeing these messages makes depressing reading as all you amateur authors believe that the downturn 'will definitely' occur, which is dangerous, as even the experts don't know.

    A previous message noted how the economy is still in good shape and I read that the EU may reduce rates in 2008. Continuing economic performance (although not to previous heights) reduced interest rates and a huge fall-off in house completions will virtually guarantee price stability if not encourage fresh increases!!! Be warned.

    When you talk of a fall in house prices, whose houses are you talking about? Builders are plainly cutting their cloth to suit their measure and, constructing only to order, wont decrease their prices. Second-time buyers will end up staying put if they dont get what they think their house is worth or put it out to rent. Its difficult to identify which sellers are going to reduce prices (especially as rents are rising and it makes financial sense for buildiers and house-owners to treat them as an asset).

    The Q3 Property Report headline on the daft.ie cover page says that just tenth of sellers have reduced their prices. Come on folks, ninety per cent of vendors have not sought lower amounts and still believe that they will get the asking figure, so exactly where do you think the lower prices are going to come from?

    I know several people who have just bought in Kildare and Meath and are delighted to finally have their own pad. Is it just a certain sector who writes messages to this site, seeking to spur each other on to a life of homelessness or does it cover a wider cross-section of society?

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  • Re: The Daft Report Q3 2007

    Posted By: dancecorp Date: Tuesday November 13, 2007 @05:58PM

    I just don't get it. According to the revenue figures published last year I'm on the top 10% of PAYE earners. (http://www.finfacts.com/irelandbusinessnews/publish/article_10007534.shtml). Now to be fair this only happened about a year ago but I still can't conceive buying a house in Dublin.
    Not only would my earnings to price ratio fall below what the banks typically offer but an average house of 392k at a 92% LTV would eat 58% of my after tax income at a slightly pricey but not inconceivable 5.19% interest rate. Again this is what the pre-credit crisis banks would consider too high.

    If the average house loses a moderate 5% again in 2008 thats 20k I've saved myself. If the average industrial wage is 32k that makes the average house 12.25 times it. The banks will lend 5 times.

    So who is actually going to be able to buy these houses?

    It's a world gone mad!

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  • Re: The Daft Report Q3 2007

    Posted By: bob Date: Thursday November 22, 2007 @07:18PM

    Whats wrong with buying a house for €392,000 (sounds cheap to me)? You will be set up for life in your own home, put stability in your life, provide for your future and and not be subject to a landlord's riles and rising rents!

    Please see the Irish Times Property Supplement of 22/11/07 which forecasts greatly increasing prices so dont be afraid to buy now (or you might lose 5+ per cent per year by not making the purchase now).

    Indeed, certain parts of the capital such as Dublin 5 (Artane, Coolock and Raheny) are just 4 miles form the city, on good public transport and have mature leafy residential estates. You cant go wrong!

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  • Re: The Daft Report Q3 2007

    Posted By: Anonymous Poster Date: Tuesday November 13, 2007 @06:19PM

    reduced interest rates and a huge fall-off in house completions will virtually guarantee price stability if not encourage fresh increases!!! Be warned.

    in which world are you living?

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  • Re: The Daft Report Q3 2007

    Posted By: id10t Date: Wednesday November 14, 2007 @02:07PM

    Well, even though the outlook is a reduced interest rate of possibly 1% or 2% at the end of 2008, start of 2009, and builders will cut their cloth to suit their situation, it is quite telling that the Central Bank say only 40% of households are currently eligible for the average mortgage. http://www.rte.ie/news/2007/1114/mortgages.html
    Wonder how that will effect prices?

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  • Re: The Daft Report Q3 2007

    Posted By: James Date: Thursday November 15, 2007 @06:51PM

    Where is the fall interest rates going to come from? Oil @ 90 dollars a barrell, wheat double last years price, gold at 20 year highs, the dollar approaching 1.50 against the Euro, what planet did you arrive from?

    M Trichet is worried more about inflation and the effect of increases as outlined above not the affordability of a badly built rabbit hutch in Meath (sorry West Dublin).

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  • Re: The Daft Report Q3 2007

    Posted By: PAUL Date: Friday November 16, 2007 @10:35AM

    If you can,t see why rates will be reduced next year(and theywill be) then there is no point explaining it to you,MORON!

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  • Re: The Daft Report Q3 2007

    Posted By: Mark Date: Friday November 16, 2007 @03:06PM

    Regarding the message for the MORON, and about how the interest rate will definitly drop, I must be one(a MORON)
    I know the last posters comment was in the vane of "if you don't know, I'm not going to tell you", but I would like to know.

    Can someone please explain in a very simple (unpatronising) way, how the interest rates will or will not drop at this point.

    Unfortunately I'm one of those people who has clearly lived beyond his means for the many years, spending more than he made and I'd love to rectify that. Hope of a rate drop is great, but is it real?

    Mark

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  • Re: The Daft Report Q3 2007

    Posted By: id10t Date: Friday November 16, 2007 @04:48PM

    Well, as you know, since we joined the Euro, unlike England, we no longer have control over our interest rates. In the grand scheme of the European Economy, we are quite small, while countries like German and France, are quite big. The reason interest rates have been low, is that those economies, the power houses of Europe, were not so strong, so interest rates were lowered allot to kick start those economies. They are now doing much better not which led to the interest rates hike, but not as well as they should be partly because of the credit squeeze and costs of labor relative to the USA and in order to control this, interest rates are going to be lowered a little.
    The problem here has been that our economy was doing very well in a macro economic climate, but interest rates were low, which has led to the astronomic inflation over the last number of years, (not helped by the Government might I add!). Now we are in the unusual position of facing a "slow down" while interest are going to fall because the rest of Europe needs to become a bit more balanced. That is it in a nut shell. However, they will not go to the low low levels of the past, because

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  • Re: The Daft Report Q3 2007

    Posted By: id10t Date: Friday November 16, 2007 @05:00PM

    I should really learn how to finish a sentence ...... so here goes ...
    because the rest of Europe is doing quite strongly.

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  • Re: The Daft Report Q3 2007

    Posted By: jack Date: Monday November 19, 2007 @07:49PM

    The ECB sets interest rates and in doing so, is influenced by the German and US economies, which are presently performing poorly. In order to encourage investors, industrialists and businessmen to borrow money for new ventures, for factory extensions and for new equipment, it is necessary for the ECB to lower rates as, if it fails to do so, such investment won't occur to the same level and this will adversely affect employment growth, tax returns, government spending etc. Thus, the entire Euro-zone economy depends on falling rates for next year.

    Look at us for example. This is the first year in a deacde when our Minister for Finance will have limited funds on budget day and this results, in no small part, from decreasing revenues as a result of higher interest rates over the past year.

    If you were an industrialist thinking of borrowing €10,000,000 to expand your business and you discovered that rising rates meant that you would have to repay €60,000 rather than €30,000 per year to the bank as a result of increased interest rates, you would think twice about it and would probably go playing golf or to the pub, rather than taking a bigger gamble, would'nt you?

    Jean Claude Trichet, the ECB head, has always sought to use interest rates to counter-act rising inflation and for this reason, rates have risen over the past year or so. Although inflation is still undesirably high as far as the ECB is concerned, much of this stems from oil prices and given the weakness of the dollar and the US economy, M. Trichet must lower rates in 2008.

    The Euro is currently worth $1.45 which means that products made in the EU are very expensive for people in the USA (an enormous market for us). If M Trichet fails to reduce rates, businesses and economies in the EU would suffer terribly as citizens of the USA couldnt afford EU goods and European workers would be laid off.

    As EU-wide inflationary pressures are falling (oil apart) and as the Euro is unacceptably strong, reduced rates is a must.

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  • Re: The Daft Report Q3 2007

    Posted By: patman Date: Saturday November 24, 2007 @01:04AM

    If the construction industry doesn't get the change in stamp duty it's looking for in the next budget, so that "'confidence and common sense' can be restored to the market" I wonder will they try something themselves? Like reducing the cost of new homes ?This would probably do the trick to get the ball rolling again.. or maybe the construction industry could pay the stamp duty (like what's happening in Northern Ireland)to kick start things..

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  • Re: The Daft Report Q3 2007

    Posted By: Bill Date: Tuesday November 27, 2007 @07:16AM

    No Patman, builders will simply stop building, and the reduction in housing supply will increase prices. As purchasers have held off for a year now, the enormnous pent-up demand for new houses, combined with a reduced supply of accommodation, will definitely force prices up.

    If you were a baker and no-one was buying your bread, you would simply bake less and this is exactly what builders are doing. They are now building 'to order' as in the old days and not simply building estates in the expectation that the houses would be sold straight away.

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  • Re: The Daft Report Q3 2007

    Posted By: JimmyTheFish Date: Monday November 26, 2007 @03:51PM

    When is the next Daft Report due out?

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