Smallest quarterly fall in prices since 2007

Seamus Coffey, Economist

2nd Apr 2012

Seamus Coffey - Lecturer in Economics, UCC


Recovery will require lending - that reflects fundamental value

According to this latest daft.ie report, the first quarter of 2012 provided the least change in the property market since the middle of 2007. Asking prices continued to fall, but the drop of 1.7% is the smallest quarterly drop since the market collapse began in earnest in 2008. Meanwhile, in the rental sector, stabilisation has been present for almost two years and nominal rents at the start of 2012 are no different than they were at the start of 2010.

Measuring the fall

Measuring prices in the Irish property market continues to be an art rather than a science. Using mortgage market data, the Central Statistics Office reports that house prices fell by over 4% in the first two months of the year. When looking at falls from the peak, though, a different picture emerges. The daft.ie report shows a total fall of 53%, compared to 49% in the CSO index. The scope for divergence in estimates of falls from the peak will hopefully be put to an end when a National House Price Register is launched later this year.

House prices are always and everywhere a function of bank lending, but they do have a fundamental value to which they must eventually return. This can be given as a ratio to household income or, more usually, annual rents. A good guide is that house prices should be somewhere between 12 and 15 times the annual rent that a property can generate. This is a range that should never be ignored but often is.

A market that has normal level of activity would be near the top of this range but a malfunctioning market will be towards the lower figure and possibly even below it. And Ireland does not have a properly function property market.

A depressed market

Data from the Irish Banking Federation show that there are fewer than 4,000 mortgages being drawn down each quarter, with around half of these going to first-time buyers and a further third to mover-purchasers. The remainder is largely accounted for by re-mortgages and top-ups. The residential investment borrower has virtually disappeared.

Anecdotal reports suggest that around 30% of all purchases are by cash buyers. This cannot be independently verified but a figure close to it would suggest there are around 4,000 residential property transactions a quarter. Ireland has a housing stock of around 2 million units. An annual turnover rate of less than 1% is indicative of a market that continues to be distressed.

The stock of properties for sale on Daft.ie in March 2012 was 54,000, which is the lowest level in four years. This could be because properties on the market are selling quicker or because the number of properties being offered for sale is declining. The speed at which properties on Daft.ie found a buyer did increase slightly in the first quarter but two-thirds of properties remain on the market for four months or longer before finding a buyer.

Thinking like investors

The average asking price for the first quarter of 2012 was €176,000. In order to justify that price using the above range, the monthly rent should be somewhere between €1,000 and €1,250. Averages do not provide the necessary insight and this must be done on a town-by-town or even a street-by-street basis.

For example, a three-bed house in Cork City had an average asking price of €189,000 in the first quarter. The average asking rent for a similar property is €850 a month. The annual rent is still more than 18 times the asking price. At a ratio of 15 times annual rent, a monthly rent of €850 should equate to a price of around €155,000. By this metric, asking prices for three-bed houses in Cork City are still around one-sixth over-valued. This can be repeated right around the country. With the inability and unwillingness of banks in Ireland to issue loans a fall below this level is all but guaranteed.

The importance of lending

Just as the banks are almost certain to cause an undershooting of property prices relative to their fundamental value they must accept the responsibility for the market bubble that peaked almost five years ago. The banks based their lending model on the prices that people were willing to pay for properties, but seemed to ignore the fact that the price someone was willing to pay was based on how much a bank was willing to lend to them.

A house in a particular estate may have sold for €350,000 because one bank was willing to lend one purchaser the money for such a transaction. The other banks provided similar mortgages to other buyers on the basis that the first transaction provided the "market value".

The price reflects the amount of money that someone is willing to pay for a good. Value reflects the benefits that a good can offer. In most cases, these are the same but this does not have hold. Residential property provides accommodation service. As a result of the madness of the boom, we now have thousands of households paying a price for accommodation far in excess of the value they are receiving.

This reality must be addressed and the burden of the mortgage debt is largely a function of the actions of the banks so they must offer what ever forbearance is necessary to assist households. The banks must also realise that there are thousands of homeowners who will never be able to repay the huge loans they issued to them. It is very difficult to gauge the number of unsustainable residential mortgages that need to be ended but it could be anywhere between 15,000 and 30,000. These are households who are in deep mortgage arrears and negative equity and have little prospects of recovery.

The banks must face up to losses that exist on these loans. The homeowners must accept that they will never be in a position to repay the loan and that by surrendering the property they will be able to make a fresh start. Households with unsustainable mortgages must be allowed to do so.

The recovery in the housing market will not be when prices start to rise; the recovery will be when activity starts to rise. With our ailing banks still in no position to lend and the many problems created by the bubble still outstanding there is no sign that this is about to change.

HIGHLIGHTS:

Sale Index
Asking Prices, Residential Sales

Stock and flow of properties
Stock and Flow of Sale Properties


SNAPSHOT:

Snapshot of Asking Prices Nationwide
Snapshot of Asking Prices Nationwide

Discuss This Article

  • Re: The Daft House Price Report Q1 2012

    Posted By: NAMAwinelake Date: Monday April 2, 2012 @06:20AM

    Well done to DAFT for putting the time and money into this report and to Seamus for drawing attention to credit to sustain any recovery.

    Presumably this will be the last DAFT sales report because by 1st July 2012 we should have the House Price Database from the PRSA which should show sales prices going back to 2010, so we will - in theory at least! - be able to measure actual sales prices for mortgage and cash transactions.

    To my eye at least pricing in much of the country is all over the place. Some of that will be the result of sellers needing to cover mortgages, other asking prices seem plucked from no-where by estate agents chasing business. Here's to the consigning this to history!

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  • Re: The Daft House Price Report Q1 2012

    Posted By: Ronan L Date: Monday April 2, 2012 @01:19PM

    Hi NAMAwinelake
    As you are probably aware, there are a number of metrics in each Daft Report, from asking prices to time on the market, so the availability of more transactions data (in addition to the CSO index) is unlikely to have an impact on the future of the report. In fact, it may provide a new stream of data for the Report to use!

    Either way, asking price indices are a useful part of any property market, as they show seller expectations and in a healthy market can lead closing prices by up to six months. The Daft Report was the first one to point out the slowdown in property in 2006 (unpopular as that was at the time) for precisely this reason.

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  • Re: The Daft House Price Report Q1 2012

    Posted By: davocork Date: Tuesday April 24, 2012 @06:56PM

    Well, its useful but the elephant in the living room has got to be the absence of the national price register. I heard recently that this has been delayed yet again to some later date in the year past the summer.

    I feel very strongly now that this has been deliberately delayed by the government who are desperate not to show the true losses to the banks which have actually accrued. From properties i have seen for same at auction and through private distressed sales that this will show the real price drop taking into account the huge number of cash only buyers to show a drop of 70 % with up to 90% for some particularly distressed ones . I have actually seen properties in that situation. Eg a tiny awful 2 bed in Cork which would have been 250k in the boom now desperately sold for 30k.

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  • Re: The Daft House Price Report Q1 2012

    Posted By: Francis Meyrick Date: Monday April 2, 2012 @10:52AM

    "An annual turnover rate of less than 1% is indicative of a market that continues to be distressed. "

    Question: what % turnover rate would indicate a healthy market?

    How does this figure of less than 1% compare with previous years, or maybe other European countries?

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  • Re: The Daft House Price Report Q1 2012

    Posted By: Micheal S. O'Ceilleachair Date: Monday April 2, 2012 @01:50PM

    I read with interest your Q1 2012 report. While it is informative regarding the position on house purchases there are many other factors operating in the market which influence whether or not people are willing to purchase.

    As an axiom I would maintain that money is a liquid which needs to be spent by the gullible in order to keep the rich rich. Hence every increase in salary in the boom met with with a corresponding increase in the wealthier segment's capacity to hoover up the differential. This was evident in society which was being socially engineered to become pawns of the wealthy.

    Working couples were under the pressure of the need to put a roof over their heads coupled with the fact that if they needed to provide childcare facilities for more than two children then it would have been more sense financially for the minor earner to give up work in order to care for the children at home (and save the childcare fees). For those who could afford childcare this meant the minor earner was only continuing to work in order to have a pension.

    Now that the gullible are no longer gullible in the face of market orientated and influenced propaganda they prefer to keep their powder(money) dry until prices reach the "right" level. The worm has turned and the deluge of property on the market has for the first time in fifteen years given people a real choice rather than
    an enforced panic.

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  • Re: The Daft House Price Report Q1 2012

    Posted By: NAMAwinelake Date: Monday April 2, 2012 @01:57PM

    The decline in house prices was 1.7% as Seamus says above, isn't that right. Can you remind us why the report says a drop of 1.4%?

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  • Re: The Daft House Price Report Q1 2012

    Posted By: the 1 lol Date: Monday April 2, 2012 @04:52PM

    house prices do not track rents, the track debt dynamics in its simplest form the wages you pay your work force is what will decide the price of houses, there are now over 850,000 workers on between 8.65 and 10 euro an hour unless you want massive tax rises to pay the rent allowance of social welfare 90% of the rent is paid at the moment then you need to let these people afford housing. so take out the cost of living and you will soon see where prices have to go, 850,000 low paid workers in an economy with 1.8 million workers is then not classed as low wage but standard wage , this brings you back to 1997 house prices adjusted for inflation so we have much bigger drops to come before we see any recovery, all the time our eu masters are saying we need more internal deflation . of course this means wages as the people who provide goods and services in the economy dont know the meaning of global competitiveness lol

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  • Re: The Daft House Price Report Q1 2012

    Posted By: Michael Stynes Date: Tuesday April 3, 2012 @12:31AM

    I am no economist or expert but I predicted a fall of between 15 & 20 % in early 2011 when all around me were saying, no, no. no, the market has reached bottom.

    I predict certainly a double digits decline in value again for 2012 and perhaps exceeding 21 or 22%. The residential property market will certainly return to 1997 figures. What goes up like a rocket must surely return to earth with a thud.

    It makes far better sense to rent, at least for this year.

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  • Re: The Daft House Price Report Q1 2012

    Posted By: RAYMOND Date: Tuesday April 3, 2012 @02:46AM

    I agree . The property market has a long way to go (downwards). The people in Ireland are in a bad way. All countries in the world are competing against each other for better prices.
    10 euro's an hour in Ireland is a good wage. Why would you be getting more than that when our neighbour's are all getting around that number.

    Raymond

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  • Re: The Daft House Price Report Q1 2012

    Posted By: Anne Keogh Date: Tuesday April 3, 2012 @12:40PM

    I think the report is a fair reflection on what is happening in the market. But just from an observers viewpoint I have noticed seven new for sale signs up on properties on Rathgar road (Dublin) in the last week alone. Who says the rich are not hurting in this recession.

    When solicitors start selling off their property portfolios it is time to think long and hard about what you should be considering yourself.

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  • Re: The Daft House Price Report Q1 2012

    Posted By: Anonymous Poster Date: Wednesday April 4, 2012 @08:34PM

    I find it hard to believe there would be increases in house prices this quarter, even in Dublin, in the present economic climate.

    Its worth noting that in many cases asking prices still appear to not be a realistic reflection of a properties true value. I'm sorry but I don't care if one needs modernization and the other is immaculate, 60K of a price difference for the same size house on the same road is madness.

    It will be very interesting to see the actual sale prices of properties when they are released later in the year. Something tells me these will be significantly lower than asking prices in many cases.

    I believe that the housing market will only begin to recover when people see and feel that there is a greater transparency to the whole thing.

    I as a first time buyer have no intention of buying until the sale prices are released and I can get some sense of a properties true value.

    Estate agents still appear slow to acknowledge that the property market is in the toilet and that offers equal to 15 times the rental is in fact a good offer!!

    I wonder what the actual % decrease since the peak will be when these sale prices are released???

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  • Re: The Daft House Price Report Q1 2012

    Posted By: Realist Date: Thursday April 5, 2012 @10:30AM

    I agree with "Anonymous Poster Date: Wednesday April 4, 2012 @08:34PM"

    I have had many conversations with estate agents over the past number of months and find their arrogance difficult to take, never find some of the very smart comments / not answering the questions I ask. They want to provide very little information - which is logical I guess, as they want to protect market prices, as it is off Total Sales that they get their commission / cut.

    I was also thinking of buying (first time) this year, but the more I read about this next wave of Irish bank losses / ever increasing mortgage arrears on banks balance sheets and the inevitable consequential inability to lend plus the reality that north of €12bn will be taken out of the Irish economy over the next three budgets, it doesn't really inspire a lot of confidence.

    If anybody else has a differing view, please contradict me, as I'd appreciate an actice intelligent debate on this.

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  • Re: The Daft House Price Report Q1 2012

    Posted By: the 1 lol Date: Saturday April 7, 2012 @10:58PM

    im a ftb also, im waiting till houses 3 bed semi are working class houses are affordable to people on 9 euro an hour. this ensures wage security against employers driving down wages as the minimum wage is 8.65 an hour. everybody has certainty and the banks can rest assured that lending at these rates is risk ok as the people who take out mortages can deal with a pay cut of .35 cent an hour and not be at risk of default, it also lets workers take up any job in the economy and still be able to provide a roof over there heads with out the worry of having to constantly upskill only to find it a waste of time because of outsorcing and all the other competing forces at work in the economy, this has happened all ready in places with 3 bed semi now 70k so 20k down 50k mortage over 25 years prop in the region of 350-380 a month repayment. it also allows people to pay of extra cash at some extra cost to drive down term of mortage, the next generation will be allowed to afford their houses like the people of previous generations a so called reblancing of wealth back to the working class the so called back bone of a developed economy :)

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  • Re: The Daft House Price Report Q1 2012

    Posted By: czorcina Date: Monday April 9, 2012 @02:32PM

    Well...
    Thats all true and EAs are not too smart as well because they would be much better off selling 3 houses at 200k each than selling just one at 300k. It would be in their interest to bottom out the prices level in order to start the market again, at least for the first time buyers who are in position to get a mortgage. It's alsways worth to mention the point to any EA.
    So at first human greed made the country struggling and now ths same greed don't let th country start to recover.

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  • Re: The Daft House Price Report Q1 2012

    Posted By: the 1 lol Date: Tuesday April 10, 2012 @07:44PM

    i see the imf are asking for debt write downs to stimulate the economy and stop house prices from falling admin nightmare for the banks and i wonder if lengthening the mortgage terms to 100 years is a good idea lol ? but it will definitely not stop house prices from falling to an affordable level . any 1 think otherwise ?

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  • Re: The Daft House Price Report Q1 2012

    Posted By: Fishy Date: Thursday April 12, 2012 @08:35PM

    Looking at the price declines from a developers viewpoint.(perish the thought). The capacity to build new houses in the future will be all but impossible due to the land labour and material costs never mind the add on charges from local and central government.
    This may seem fanciful at present but there will be a housing shortage in urban areas where demand needs to be met.
    House prices are not only governed by affordability but also by the physical
    Costs associated with house construction.
    I foresee a situation where no developer will enter the market until it is returning some profits (remember developers take huge risks and put up a large part of the investment up front)
    House prices measured as a factor of rental return are about 20% to 22% too high but if you apply this logic all future houses build in this state will be state build.
    you can knock developers and many were contemptible but if you will need a house in the future then the present and foreseeable market will exclude private house construction.

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  • Re: The Daft House Price Report Q1 2012

    Posted By: the 1 lol Date: Friday April 13, 2012 @11:37AM

    i am a construction contractor all b a very quiet 1 at the moment, its this simple construction labour costs have been floored just ask any irish construction worker about polish undercutting. second materials can be brought in from china india, thats all cement and gravel and everything else thats materials sorted, as for land prices they will just fall back to what they were in 1997, if land not available compulsory purchase orders from government are needed , so every 1 will be allowed to afford, the only thing that will push up house prices is wages, but we all know the property experts and buisness lobby want lower wages, if they want deflation they are certainly on the right track, tihis is what our german masters want any way and they are doing an excellent job lol. as for returns for developers they will just have to except reaility, they made plenty of profits in 1997, can u remember any builder complaining back then ?, there just goin to have to put up with 10 mill a year instead of 100 mill a year profits. lol

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  • Re: The Daft House Price Report Q1 2012

    Posted By: John Hayes Date: Sunday April 22, 2012 @07:44PM

    i agree with you ... the real story for the future is going to be lack of housing because the developer / builders have been wiped out ,,, the local authorities will never deliver the product... the supply side has been stopped for 5 years and will not start again for another five years ... rents will rise and that;s a fact

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  • Re: Price Recovery - will ireland follow iceland

    Posted By: Jim McMahon Date: Monday April 16, 2012 @04:56PM

    Property prices in Iceland increased faster last year than in any other European country surveyed. The increase in par value of houses was higher even than in Norway, where a property boom is in progress.

    Of the 23 European countries surveyed by Britain’s Royal Institution of Chartered Surveyors, only Iceland broke the ten percent annual price increase mark in property prices last year.

    Following next on the list was Norway, with nearly ten percent, and in third place came France on seven percent. A steep rise in property prices is worrying Norwegians who fear a property bubble burst and an overheating of the economy – as well as hardship for prospective first-time-buyers.

    However in Iceland, which is recovering from a severe recession and a housing market crash, big gains in the short-term are being viewed as a positive development.

    The property market in Ireland shrank in value last year, with par value of properties going down there by 17 percent. After the Irish came Spain, with price decreases of ten percent, and Cyprus third on eight percent.

    The Institution’s report says it came as a great surprise that Iceland topped the list of biggest annual property price increases; especially when the country’s financial system completely collapsed just three years ago. The report concludes that real estate price hikes are another indicator of how well Iceland has pulled itself together after the crash, Vísir.is reported.

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  • Re: The Daft House Price Report Q1 2012

    Posted By: the 1 lol Date: Monday April 16, 2012 @09:01PM

    could have been ireland aswell only we keep fooling ourselves in thinking that bailing out banks is the answer, iceland is three years ahead of us (sigh) and we have what ? endless austerity from germany, i just hope people vote no to fiscal treaty so we can copy iceland and get on with the recovery

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  • Re: The Daft House Price Report Q1 2012

    Posted By: Yvonne Clark Date: Tuesday April 17, 2012 @04:13AM

    Yes indeed Jim, as the German newspaper Das Welt reported widely the situation in the Nordic countries is dangerously similar to the situation that occurred in Ireland. In other words there is a great risk of further European bubbles bursting within the very near future. Ireland was even quoted as a prime example of boom to bust, before and after.
    And in the case of France, the French media are cautioning people on property speculation. A catastrophic property collapse in any European country would leave French banks high and dry.
    Why not tell the whole story Jim?

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  • Re: The Daft House Price Report Q1 2012

    Posted By: mariam Lamb Date: Tuesday April 17, 2012 @07:17PM

    Yvonne ,

    The resilence of the irish rental market indicates a pent up demand especially for houses in dublin ..... have you noticed there has been none buit in the last five years ... rental stock continues to decline and this year we see marginal increases in rental prices. Looking at the census , the population continues to increase dispite emigrantion . Therefore more people will chase less property with no incentive to build until price correct to economic levels for builders .

    A basic calcualtion for a house price in cost to build + cost of land , at the moment second hand houses represent a bargin.

    Some of the comments on this site really are too void of facts.

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  • Re: The Daft House Price Report Q1 2012

    Posted By: john Hayes Date: Wednesday April 18, 2012 @12:12PM

    Every 5 years according to the CSO the demand for 3 and 4 bedroom houses pushes up by 10% of the existing ( this is the trend since records began ) which equals approx 50,000 units (this excludes appartments etc) , Ireland is producing less than 5000 units now per annums ..........Oops ... is this a problem or what on the horizon ... no developers or builders are prepared to invest ... rents wil sky rocket ... this is the next govement mess up on housing ... forget about house prices ....no housing is being build Drrr........

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  • Re: The Daft House Price Report Q1 2012

    Posted By: Parent Date: Wednesday April 18, 2012 @04:39PM

    With the prediction of increasing rents and static or falling prices should I as a parent who is renting for 2 Uni kids and 2 more to come be looking at raiding the education fund and making a cash purchase or should I just keep paying out the rent. If one uses the rental to purchase price guide of 12 to 15 times we will have paid out 4 kids by 3 years which is 12 years??????

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  • Re: The Daft House Price Report Q1 2012

    Posted By: Ester Date: Wednesday April 18, 2012 @10:30PM

    What on earth are you saying? Your renting for two uni kids, and two on the way. In other words four times rent for three years. Christ you should seriously consider buying . Even if property prices drop by another 25%, for a 1 bed appartment you should break even over fifteen years. Otherwise buy bonds, pay the rent and avoid maintenance costs, solicitors fees, stamp duty and capital depreciation and heartache.

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  • Re: The Daft House Price Report Q1 2012

    Posted By: Tony Pony Date: Wednesday April 18, 2012 @05:46PM

    There is another, albeit smaller elephant in the room. With uncertainty surrounding the new property tax, and estimates of 400 to 1000 euro per year abounding, surely this will have to factor into the long term affordability of buying a house? You also need to factor in water charges. The list of reasons NOT to buy are piling up.
    Before I buy a house, I want to know what its going to cost me long term. Rent is going to sky-rocket.
    Mortgage+maintenance costs+taxes must be cheaper than long term rent before people will buy.

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  • Re: The Daft House Price Report Q1 2012

    Posted By: Ian Keogh Date: Thursday April 19, 2012 @04:23PM

    Your all correct , the real story of this property bush is about to happen , that's the supply side , the complete house building business has been distroyed and local authoriteis are not filling the void .... expect rents to rocket .. we need to be building about 10,000 units in dublin per year to stand still ... that's not happening

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  • Re: The Daft House Price Report Q1 2012

    Posted By: the 1 lol Date: Thursday April 19, 2012 @06:48PM

    we should be building 35k houses across the whole country plus about 5-7k private one offs in a normal market and we could if we let people afford them but vested interests are addicted to boom time prices and will not accept the new wages of workers . but this will all change, when politicians run out of wrong decisions to make they have no other choice but to make the right ones lol

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  • Re: The Daft House Price Report Q1 2012

    Posted By: Styles Date: Friday April 20, 2012 @08:14AM

    How can rent sky rocket when the government are taking more and more money out of everyone's pocket. Surely you can see that what is more likely to happen is that tennents will be unable to pay the rents demanded and this will simply lead to the same tennents refusing to pay rents and causing widespread problems for landlords. It took me six months to get rid of a problematic tennents. Six months with no money coming in. Six months of worry, solicitors fees and anxiety. The landlords rights in this country are a joke.

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  • Re: The Daft House Price Report Q1 2012

    Posted By: Tristan Date: Friday April 20, 2012 @09:26AM

    If everyone is in agreement that rents are on the way up, will european style long term lets become more normal? Will rent control for long term lets (>2years) become something to consider?

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  • Re: The Daft House Price Report Q1 2012

    Posted By: John Higgins Date: Friday April 20, 2012 @10:26AM

    I live in London Canary Wharf , a one bedroom apartment costs £400K , given € to £ conversion this works out a €500K for 64 sq m2 , that's €7812 per m2 .

    That would made a prime dublin 5 bed house @ 200m2 worth €1,562,000 , instead these selling for €500K to €600K .......... London /Dublin wages are not that differant .............looks like the market is undervalued due to lack of a proper banking system.

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  • Re: The Daft House Price Report Q1 2012

    Posted By: the 1 lol Date: Saturday April 21, 2012 @03:22PM

    london dublin wages not that different lol how many people in london are on good wages compared to dublin ? and dont forget the entire irish banking system is on social welfare since september 2008 in this country albeit upper class social welfare, cant have the banking class on jobseekers allowance even if they are numerically dyslexic lol

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  • Re: The Daft House Price Report Q1 2012

    Posted By: just found this site Date: Saturday April 21, 2012 @02:58AM

    Have to agree. You can't compare Ireland to any other country when it comes to factors affecting property prices. In Ireland over the past few years the only things going up were: car tax, health insurance, income tax, car insurance, petrol prices, stealth taxes and income levies, unemployment rates, non violent crime, people leaving Ireland to find work and the popularity of sein fein.

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  • Re: The Daft House Price Report Q1 2012

    Posted By: news related to above Date: Sunday April 22, 2012 @04:00AM

    Someone cited the Nordic countries as being an example for the rest of us. I am from Netherlands and from outside everything looks great. We have AAA rating, low unemployment, low crime rates etc. Property prices have been increasing even for last couple of years. But now our government realizes that to conform to new European fiscal policy we need to introduce close to 20 billion euro in cuts. I can tell you now, peoples are not happy. If everything is good why such deep cuts. Property reports like these are panicing investors. If we loose AAA rating property prices will be one area affected.

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  • Re: The Daft House Price Report Q1 2012

    Posted By: Joan McCardle Date: Monday April 23, 2012 @10:27AM

    Why will house prices continue to decline?

    There are numerous factors which force prices down, similarly numerous factors force property prices up.

    Unfortunately the greatest factor depressing Ireland’s property prices is an intangible factor called “uncertainty”. Less than a year ago many speculators were buying gold bullion in a hope to solidify the value of their cash reserves. The reason for this action was put down to the great uncertainty of the survival prospects of the euro dollar. A year later and when the euro appears to have stabilised many people believe that property prices will increase. However the major investors are far more cautious and aware of how political change (France) or economic depression (Spain) can again plunge the euro zone into uncertainty and thus further depress property prices.

    How does the uncertainty in the market disappear?

    The European union have gone to great lengths to make sure that a major cash reserve is available to fight off the next wave of financially dangerous situations (Spain going into recession or a double dip European recession). Such large cash reserves serve to bolster struggling economies and bring confidence to the sustainability of the greater European Union.

    Another cause for uncertainty in the property market is the perception that the information available to the public is not representative of the true facts. It is often quoted that property prices published are the “asking prices” and not the achieved sales prices. When clarity is introduced to remove the vagueness from this area of the market, buyer confidence will improve with improved information.

    Why then does uncertainty persist in the property market?

    Because the figures across the euro-zone indicate that the EU may be in real danger of entering a double-dip recession it is unlikely that the situation will improve in the near future. Savvy investors know that their money is far better invested elsewhere, other than in property at the moment. Gold, silver and the equity markets have been resilient over the past three years and investors have enjoyed substantial returns as a result. This option has drawn would be investors away from the property market because the perception of the equity market is one of security and benefit simultaneously.

    What next?

    It is more than likely that the property market in Ireland will continue to contract this year. The level of contraction should not be as severe as it has been over the past few years ( unless the euro-zone does enter a double-dip recession, in which case the property prices across Europe will be affected).

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  • Re: The Daft House Price Report Q1 2012

    Posted By: Jim McMahon Date: Monday April 23, 2012 @11:49AM

    Good stuff .. on the ground I work in an estate agents and rents are on the way up ... there just is more demand for city centre locations and family homes are now lasting no more than a week on the rental market.

    Very few buyers about ... lots of first time buyers looking .. but uncertainty is still a key driver.

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  • Re: The Daft House Price Report Q1 2012

    Posted By: James Griffin Date: Monday April 23, 2012 @12:08PM

    Well for years the goverment preached about wanting a vibrant rental market with plenty of supply , at the moment they got that ... not sure how lack of housing development will effect pricing going forward given there is a year on year population increase.

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  • Re: The Daft House Price Report Q1 2012

    Posted By: William Date: Monday April 23, 2012 @02:40PM

    We will be exporting our population increase very soon as the jobs market means there are no jobs for new parents to support their growing families. That will release rental housing for a start.
    One or two people on this thread appear to believe that we need to be building 30,000 new houses to support our growing population. That is not what happens in a depression. People make do with smaller space. During the boom everyone was pushing for larger space, more rooms and splendour in general. In a depression you might be lucky to have a one room apartment.
    Read up on the great depression of the 1930's. It might be hard to imagine but Europe is showing classic symptoms of a depression on the verge of happening. And when it does happen, property prices will collapse like a house of cards.

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  • Re: The Daft House Price Report Q1 2012

    Posted By: James Griffin Date: Monday April 23, 2012 @04:22PM

    William,


    Actually one bedroom apartments are not renting out at all , its the 3 bedroom family homes that move in a week or less and are now £100 more expensive than last year and moving up ...it must be those rich bankers again..

    Is not umemployment reducing slowly or have I got that wrong ?

    Regards

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  • Re: The Daft House Price Report Q1 2012

    Posted By: Joan Somers Date: Monday April 23, 2012 @04:52PM

    How will the following affect house prices?

    Two years worth of first time buyers waiting for prices to bottom out?

    Builder not building anything from 2008

    In a nutshell just like this interest rates go up and down but in the long run they go down.

    House prices go up and go down but overtime they always go up.

    For an investment the above needs to be considered.

    For a home there is only two questions to ask?

    Do I want it?
    Can I afford it?


    If the answer that is "yes" do not worry about the price as you will not think about it once your are living there.

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  • Re: The Daft House Price Report Q1 2012

    Posted By: the 1 lol Date: Monday April 23, 2012 @06:48PM

    reply to william 1930,s depression. at that time money was linked to gold, now its linked to nothing, and has been that way since the 70's , so all you need to create demand in any economy is your own currency to print, this does 2 things , 1 devalues your currency to make exports cheaper therefore making imports dearer creating a bigger surplus current account. 2 allows you to make large amounts of money available to first time buyers at affordable rates and in line with wages to buy houses. all this leads to full employment in which case inflation kicks off and so your central banks raises rates to counter and increases the value of your currency. the reason the politicians dont want this is because a currency devaluation is it is spread evenly amongst all classes, and they think they dont have to make the cuts, right wing neo liberial agenda has failed and will never succeed , long live the REPUBLIC FOR IRELAND lol , the people have had enough

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  • Re: The Daft House Price Report Q1 2012

    Posted By: Anonymous Poster Date: Tuesday April 24, 2012 @12:36PM

    I am a UK resident looking to invest a small inheritance, probably in property. I will need to borrow money but have a good deposit. A friend has suggested Ireland and wants to invest with me and we are considering a university property in Cork. I have had conflicting advice, but prices look tempting and rental potential seems good. However, i may need to sell within the next 5 years and will need to exchange money back into sterling.

    Is this a crazy idea?! Any thoughts and points to consider gratefully received!

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  • Re: The Daft House Price Report Q1 2012

    Posted By: the 1 lol Date: Tuesday April 24, 2012 @01:06PM

    dont buy now, the euro will fail, wait till we have punts back then buy, you will get a lot more bang for your sterling pound

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  • Ireland follows the USA trend ?

    Posted By: Frank Date: Wednesday April 25, 2012 @02:50PM

    Renting used to be cheaper than buying. But in many U.S. cities that’s no longer the case, as rents continue to climb and home prices stagnate.

    While asking prices for homes declined 0.7% over the past 12 months through March, rents rose 5%, according to a report released Thursday by real estate listing site Trulia.

    The median rent for all types of rental homes hit $1,350 a month in March, up from a median of $1,285 a month 12 months ago, Trulia reported.

    “Buying a home is more affordable than renting now in almost every part of the United States,” said Jed Kolko, chief economist for Trulia.

    Several metro areas recorded double-digit percentage increases in rental rates.

    In Sarasota, Fla., the average rent jumped 12.9% year-over-year, the biggest increase of any of the 100 largest metro areas Trulia surveyed. Miami and San Francisco saw the next biggest increases, with rent hikes of 12.1% and 11.1%, respectively.

    The metro areas that sustained the highest rent increases were a decidedly mixed bag, but obviously shared one factor: rising demand for a limited supply of rental units.

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  • Re: The Daft House Price Report Q1 2012

    Posted By: Artsy Date: Wednesday April 25, 2012 @03:54PM

    Hi Frank,


    I think you are on the wrong forum. This site is dedicated to Irish property. Copying a random article from a US site and posting it here doesn't actually help form a valid argument to inform investors whether they should buy or rent.

    The situation in the US is vastly different than the economic situation here in Ireland. 37 of the 50 states in the US have a higher population than Ireland.

    The US is far less susceptible to recession than Europe and Ireland specifically for that matter.

    There is absolutely no comparison between the US and the Irish sales or rental market. It’s like comparing pears and stones. They might be the same shape in some cases, but the taste is never the same.

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  • Re: The Daft House Price Report Q1 2012

    Posted By: Jim McMahon Date: Wednesday April 25, 2012 @05:25PM

    Artsy ,

    I think your totally wrong on this , this is a gobal economy , remember the current financial crises started in the USA which is tending what's coming next .

    Also you point about population , makes no referance to population density when in fact ireland is more density populated that 22 states in america .


    Regards

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  • Re: The Daft House Price Report Q1 2012

    Posted By: the 1 lol Date: Wednesday April 25, 2012 @07:29PM

    to artsy lol to your last post

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  • Re: The Daft House Price Report Q1 2012

    Posted By: the 1 lol Date: Thursday April 26, 2012 @11:29AM

    the difference between ireland and usa is they have the ability to print their own money, but ireland will have that monetary tool back very sooooooooon , magic solution lol , brussels has caught the bunker mentality , they are insane with austerity and people have had enough of this clown show

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  • Re: The Daft House Price Report Q1 2012

    Posted By: Anonymous Poster Date: Thursday April 26, 2012 @11:16PM

    Lets get real, housing prices are irrelevant, all the speculation and inflated property bubble caused this mighty depression we're in. when buying a property it is a home, not a commodity. Investors of property are just gamblers win some lose some. A home is worth whatever you deem it worth. The sickening part is many families now have a home and are struggling with paying for it due to Bankers greed and poor judgements. We should help all those in homes, maybe give people five years of paying a euro a month only with their loans frozen for that period with no interest added, then unless we have another bunch of muppetry policticians, we may have a chance to breathe and get up again. Time for governments to look after their people and stop paying off the mistakes of those that have.

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  • Re: The Daft House Price Report Q1 2012

    Posted By: Anonymous Poster Date: Friday April 27, 2012 @10:30AM

    Not sure I agree with you there. Many of the people in trouble are those who speculated on a second or third property to cash in on the boom. These people were then caught when the bubble burst.

    Naturally the real victims were the people who had no choice but to overpay for their single home. However they are generally not in the same situation as the speculators who have more considerable negative equity.

    The people I really feel sorry for are the people who bought houses having exaggerated income on the mortgage application forms. This is a legal document, a contract. If you provide false or exaggerated figures on this form then the bank holds all the aces.

    The reasons most of these people exaggerated their income figures in most cases was so that they could qualify for a bigger loan; to buy a bigger house or a house in a better area.

    Now these people are the worst affected by the recession; reduces salaries or wages, no overtime or indeed layoffs and redundancy with no hope of employment in the area of their expertise.

    House prices will eventually reach their base level. Not this year, maybe even not next year; but they will at some stage bottom out.

    Hopefully things will improve by then.

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  • Re: The Daft House Price Report Q1 2012

    Posted By: Anonymous Poster Date: Sunday April 29, 2012 @03:58PM

    Not looking to defend the banks, they have their part to play in all this but everyone who has a mortgage had to sign their mortgage loan offers having gotten legal advice from a solicitor. Also a high proportion of mortgages drawn down in the last few years of the property bubble were sought by people though a mortgage broker who supposedly were there to give professional advice to people. The solicitors, mortgage brokers, estate agents and financial advisors that didn't give correct advice to their clients have there part to play in all this too.

    I genuinely feel for those who are struggling with mortgage payments, as they have lost jobs or had salaries reduced. There are 1000s of people who have been caught in the middle of this through no fault of their own. Many of these people would happily pay there debts if they could.

    However I have no sympathy for those who exaggerated incomes or knowingly lied on mortgage application forms. They have contributed to this mess and were themselves a contributing factor in driving up property prices during the boom.

    Wanting a better house in a better area is not justification for falsifying documents. Its just greed. These people have no right to complain when they find themselves in difficulty, they have themselves to blame just as much as the banks who loaned them the money.

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  • Re: The Daft House Price Report Q1 2012

    Posted By: Tony Pony Date: Monday April 30, 2012 @10:30AM

    Agreed. People that lied on their mortgage application form to get bigger loans are actually part cause of the current bust. By applying for bigger loans, they made higher bids on properties *only because they could* hence driving up prices for everyone.

    And bankers turned a blind eye.

    And Brian Cowen watched on and did nothing, I blame him more than anyone else, even Bertie. He was Minister for finance at the time when the real damage was done. 100% mortgages? How could that have been in anyones interest?

    Anyway, rant over, I'm still paying my NE mortgage and don't blame anyone else for my decisions. I will survive. Cue Gloria Gaynor......

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  • Re: The Daft House Price Report Q1 2012

    Posted By: ji Date: Monday April 30, 2012 @05:24PM

    The Central Bank has said that Irish property prices have overcorrected by between 12% to 26% compared with the fundamental value of properties.

    The bank suggests that a lack of consumer confidence and expectations about further price falls is holding back purchases.

    It also said that a lack of mortgage finance from banks is restricting market activity and price levels.

    The bank warns that any immediate revival of the sector still appears to be some way off.

    The bank’s researchers used four separate models to assess property prices for the research.

    One model found that prices were 26% below what economic fundamentals in the economy would warrant. Two other models found that prices were 16-18% undervalued.

    A fourth model suggested that they were under valued by 12%.

    The Central Bank said that as it enters its fifth year, the severe downturn in the residential property market has already become one of the OECD's largest and most protracted.

    The CSO's residential property price index showed that the decline in value since the peak of the market in 2007 was over 47%.

    The research pointed out that Ireland's housing prices have fallen for 16 quarters in row, but this compares to 82 quarters in Japan and 41 quarters in Switzerland.

    It also noted that just 11,000 new mortgages were issued last year, down from 110,800 in 2006. It said that almost 10,500 housing units were built last year, down from 14,600 in 2010. At the height of the housing boom about 93,000 houses were built in 2006.

    The Central Bank pointed out that a positive trend in the housing market is the fact that affordability has improved in recent years, but it adds that the imposition of tighter credit conditions by the banks could diminish much of this benefit.

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  • Re: The Daft House Price Report Q1 2012

    Posted By: Stephs in the City Date: Tuesday May 1, 2012 @10:34AM

    Everybody reads the headlines......"The Central Bank has said that Irish property prices have overcorrected by between 12% to 26% compared with the fundamental value of properties".....but you fail to notice the subscript............."The research pointed out that Ireland's housing prices have fallen for 16 quarters in row, but this compares to 82 quarters in Japan and 41 quarters in Switzerland"


    If you think that property prices are suddenly going to shoot up, think again.

    The main conditions for recession still persist in Ireland. You cant be dead and alive at the same time.

    This report from the central bank is in fact very negative. I wish it was not so, but the fact is we are in for a very long period of contraction.

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  • Dublin Rental prices

    Posted By: john Date: Tuesday May 1, 2012 @10:00PM

    Any one know why Dublin rents are rising ? my landlord has raised rent by about 10% , but when i look to move , looks like rents have risen by 10 - 15% since last year in dublin

    What's going on

    Regards

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  • Re: The Daft House Price Report Q1 2012

    Posted By: Paul Date: Wednesday May 2, 2012 @10:42AM

    Look around, More people are trying to rent rather than sell. I viewed three houses this month and I found that if you put in an offer you will get a house or appartment at a lower price than what is being looked for.

    The house I got is a four bedroom. The agent said that there were many interested people looking at the property. The landlord was looking for 1400 euro p/m but the agent said that there was no guarentee that I would secure the property at that price. I offered 1300 and surprise suprise I got a telephone call saying I had secured the property.

    Apparently the landlord wanted a more mature tennent.

    Shop around. I am not telling you your business, but dont always believe what people are telling you. Its in the estate agents interest to talk up the market.

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  • Re: The Daft House Price Report Q1 2012

    Posted By: Anonymous Poster Date: Wednesday May 2, 2012 @10:48AM

    Rents are not rising by 15%. Where did you hear that rubbish. I am a landlord and I have had to cut rents to keep my tennets. I wish rents were rising.

    Simply put there is no sense in me waiting for two months plus to fill a vacent property with no income coming in. It is cheaper to reduce rent by 50 euro a month and keep the existing tennent.

    What part of dublin are you talking about? Foxrock?

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  • Re: The Daft House Price Report Q1 2012

    Posted By: Deardre Date: Wednesday May 2, 2012 @10:25PM

    Hello Paul. We had our house on the market for 7 months. We pulled it off the sales market and put it up for rent. Two months later we had a lovely set of new tenants or so we thought.
    Four students, all going to respectable colleges in Dublin. We got a call from Terenure Garda station saying that the neighbours were complaining. When we arranged to visit the house none of the tenants were there. We called back two days later after arranging for a meeting and the same story, nobody at home.
    My husband called around on the way home from work and met two of the lads getting out of their car. When they saw him coming they almost crashed into his car leaving the driveway.
    At this stage we had had enough and called the young man who had signed the contract. He did not answer the phone. We did not go through an agency so we had to do all the work ourselves.
    We called and called and still no answer. Finally we got our solicitor involved. He said there was very little we could do. The rent was up to date.
    Two weeks later ****ael called to ask if to say that he had been away and wanted to know why we had called. We told him about the complaints from the neighbours (who we had called into in the mean time and heard about house parties until four in the morning at our rented house), and he told us to mind our own business. We told him we wanted him out.
    That was last August. We had a court hearing yesterday and an hour before the hearing we got a call to say the students were gone.
    Nightmare

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  • Re: The Daft House Price Report Q1 2012

    Posted By: Joan Somers Date: Wednesday May 2, 2012 @10:29PM

    I reply to John I think your right rents are on the way up, in 2010 i rented a 2 bedroom house in portobello for 900 this year the landard raised the rent ot 1050 when it was put on the market because I refused to pay , he got 1100 and i moved out to tallagh and do the commute now ..


    Its the city centre that rising

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  • Re: The Daft House Price Report Q1 2012

    Posted By: Realist Date: Thursday May 3, 2012 @03:04PM

    Rents will rise, at a minimum they will rise by [ €200 (NPPR) and €100 Household charge, so €300 in total / 12 ] = €25 per month. Then add in the fact that rental supply is decreasing inside the canals and you have a rising rental market.

    Logically speaking if the aggregate cascade of money trickling into an economy is contracting ( persistent negative GNP) then the ability is increase property prices will not exist while this continues

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  • Re: The Daft House Price Report Q1 2012

    Posted By: PAT HOGAN Date: Friday May 4, 2012 @12:43AM

    The present property slump will get rid of the amature investors who followed the herd mentality and the Daily Mail who said its a good time to be a property investor ,,in 2005/6/7/8 . , they now have decided that others who doom and gloom are correct and there is no bottom to the market so they herd offf and sale at any price... i have done property for 50 years and now in dublin is the best time every to buy ... buy on bad news ... the yields are amazing .. I bought a three bed for
    180 K and am getting €1500 pcm that 8% yield ,,, thanks.... try getting that from any other investment . price will double in ten years that's a fact .

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  • Re: The Daft House Price Report Q1 2012

    Posted By: Anonymous Poster Date: Friday May 4, 2012 @10:25AM

    You have done property for 50 years.......what? Were you snorting it? There is no way you could buy a house in Dublin and rent it out for 1500 p/m. You are talking through your hat. To get 1500 p/m you need to be either in city centre or close to it. And you wouldn't get a house that returns 1500 a month for 180k. Who are you kidding? Property price's are still going down. Did you not hear the interview with David mc Williams the other day where he said the centrally bank were trying to talk up a bad market because it was in their interest. I think you are in the same boat

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  • Re: The Daft House Price Report Q1 2012

    Posted By: Ger Cummins Date: Tuesday May 8, 2012 @11:49PM

    I purchase a property for 200K last month that was down from 584 in 2007 , rented it out for 1400 pcm last weekend its a large two bed apartment in portobello ..... deals can be done ,,,, all the amature investors are gone ,, there are about 5 serious players in the dublin market that are cash only buyers with JV finance and the yeilds are 10 to 12 % easy ,,, by the way allsop auctions are about 10 to 20 percent above what i would pay ... i don[t complete with other buyers at auction i buy direct from motivatef sellers,

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  • Re: The Daft House Price Report Q1 2012

    Posted By: Realist Date: Friday May 4, 2012 @12:21PM

    Davy analysis of property out today shows average yield in Dublin is 8.6% on houses sold so far this year though Allsop, that implies a multiple of annual rent of just under 12x, so if a house is bringing in €12k per annum, its price should be around €144k
    Short trem factors at play driving sales market at present, but Euro government markets are in fear mode again and if this explodes on the back of extremist election reuslts in several european counties in response to a backlash from austerity, then watch the flight of deposits out of the country pick up again, and its potentially damaging impact on our banking system

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  • Re: The Daft House Price Report Q1 2012

    Posted By: Nonsense Date: Monday May 7, 2012 @09:55AM

    Rents are going to Rise because no one is buying and little jimmy has to move out of home and rather than buy he is now renting.

    In addition to this the numbers on social welfare are going up thus the numbers getting rent allowance are shooting up and the landlords keep the rent high as they now the social welfare will pick up the tab.

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  • Re: The Daft House Price Report Q1 2012

    Posted By: Anonymous Poster Date: Tuesday May 8, 2012 @07:21AM

    Let's see what the French election does to fiscal stability over the next four months. It can only go two ways; good or very very bad. If the euro is pressurized again, property prices will fall further. Uncertainty in the market undermines confidence and has a hugely negative effect on long term investments. The other elephant is the prospect of a protracted recession. If this continues and austerity continues, recovery is like climbing up a greasy slide with your hands tied, not very likely. Short term Outlook; moderate increase in properties selling in Dublin. Is this positive? Yes and no. It is being hailed as the bottoming out of the market prematurely. No real reason except that in certain areas mortgages are cheaper than rent. Luck few getting mortgage approval. On the downside, yields verses value still way out of kilter. Still lots of uncertainty in the Market. European policy may stick another painful dagger into us yet. And most importantly, a pan-European recession, a depression would certainly knock another 30% off Irish property prices. This on top of the fact that London is said to be overvalued by at least 50% which is sounding more and more likely that there will also be a property bubble in England soon. Interesting times!

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  • Re: The Daft House Price Report Q1 2012

    Posted By: James Griffin Date: Tuesday May 8, 2012 @10:19AM

    what a load of rubbish - london property overvalued by 50% - where did you get that from ... the euro will collaspe which is good news - its flawed anyway .. what will push house prices is demand and now in ireland lack of supply - the develops have good and the local councils could not build a shoe box .. rents are rising in dublin because no one can get a mortgage and that trend is going to continue.

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  • Re: The Daft House Price Report Q1 2012

    Posted By: Anonymous Poster Date: Tuesday May 8, 2012 @12:38PM

    James,

    Try reading the Irish Times business section for a change. You won't find any reliable information in the Sun.

    Also you can view information online at

    http://citywire.co.uk/money/uk-house-prices-still-25-overvalued-says-fitch/a521510
    Or just type in "London property overpriced" in Google and you will find thousands of reports. That is a change from hundreds of reports last August.

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  • Re: The Daft House Price Report Q1 2012

    Posted By: James Griffin Date: Tuesday May 8, 2012 @04:33PM

    Today in the RICS "Only London defied the downturn, with surveyors in the capital reporting a remarkably different picture from the rest of the UK. A total of 86% of London surveyors said prices were the same or rising, in contrast to Wales, where 36% reported price falls, and Northern Ireland, where 50% said the market was continuing its downward slide"

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  • Re: The Daft House Price Report Q1 2012

    Posted By: Rodruska Poblenko Date: Tuesday May 8, 2012 @01:01PM

    House prices are crazy in Ireland and in London. I live in London for three years and no hope of renting in London city. Dublin is the same now. Prices to dear.

    In Poland I can buy three house for prices in Ireland. Five house for price in London. No sense to price of houses in London or Dublin. In Poland you multiply house rent by 14 and that is expected price of house if you live in city. In Dublin and London this is not the case.

    Because of this I think house price too dear by a big margin.

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  • Re: The Daft House Price Report Q1 2012

    Posted By: My penny's worth Date: Tuesday May 8, 2012 @01:15PM

    Rents may well rise in Dublin in the short term, but in the long term the rents will price themselves out of the market. We will end up with an overhang of rental properties and this will again force property prices down.

    By the way; when you say there are not enough properties being built in Ireland to meet demand; do you mean to ignore the current overhang of properties on the sales market presently or are you just making inane statements.

    Last April there were 5600 properties for sale on the market in Dublin. At present this figure stands at just below 5000 units (that represents roughly an 8.7% drop). That is after the government intervened to stimulate the market. The number of rental properties available has increased by 12% which suggests that instead of selling more people are trying to rent to ride out the recession.

    The underlying problems in the property market remain. Emigration is up from last year. The number of migrant workers is slightly down and long-term unemployment figures suggest a slight increase. Banks are tougher on lending criteria for mortgages. Enterprise Ireland is making every effort to decentralise foreign direct investment initiatives to move then away from the capitol.
    How then can you support your statement that rents and property prices will suddenly increase?

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  • Re: The Daft House Price Report Q1 2012

    Posted By: Mark Ryan Date: Tuesday May 8, 2012 @04:12PM

    Hi,

    looking at the blog above there is a mixed review of the property report. There are a few very interesting points made by the people who have contributed their opinion.

    One point I found very interesting is the belief that house prices will rise this year and the reason expressed is based on a report published by the central bank of Ireland. The report cites figures showing that in the height of the boom 93,000 houses were built. Fewer than 10,500 houses were built last year.

    Another contributor then uses this figure as the basis for his/her argument, why there is going to be a house shortage in Ireland leading to a rise in property prices.

    To me this argument is fundamentally flawed. During the height of the boom credit was freely available from the banks and building societies. This led to a situation where more and more people were buying second and third houses as investment vehicles. Builders and developers were selling houses and apartments off the plans, in some cases up to a year or more before the house or apartment was even built. As a result the requirement and demand for houses was vastly inflated. There was never a requirement for so many units. After the collapse of the market, vast swathes of properties and ghost housing estates were and still remain in and around almost every city in Ireland. Even Dublin with its huge population (relative to the rest of the country) has such estates. I could quote at least twenty examples of unfinished projects around the city where houses and apartments are empty or partially completed.

    To say that we are again running short of houses and dwellings is both erroneous and misleading.

    The BBC had a story relating to unfinished estates this weekend. I am not making this up; please follow the link to see for yourself.

    http://www.bbc.co.uk/news/magazine-17953165

    I am like thousands of others. I believe that property prices under the current climate of uncertainty and austerity can only go one way. Down

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  • Re: The Daft House Price Report Q1 2012

    Posted By: Frank Date: Tuesday May 8, 2012 @05:02PM

    .
    I'd caution against too much belief that there is not going to be a housing shortage , the net immigration / emigrant data suggests the population still is on the rise , the house building has stopped and rents have stabilised and are beginning to rise in Dublin.

    Here in the Ireland the policy of ultra moratorium on repos has been successful.
    Its like an action movie; the market was a falling lift and jamming a crowbar into the mechanism has prevented it plummeting to the ground. But what now?
    How does the analogy continue? Will the mortgagees be rescued? Will they fall to their doom?
    What normally happens in these movies? I'm not sure.
    One thing I do know is that the situation doesnt suddenly just rectify itself and the people continue, unencumbered and unscathed, with their journey.
    Neither does the lift just do an about turn and start moving upwards again.
    Do not underestimate the pure emotion felt by those in the lift; fear this time, not greed, but equally as powerful.

    They will believe anything and go with anything that will save them no matter how outlandish and expensive it seems to those on the outside.
    Naturally, once they are certain they wont plummet to the bottom they begin to plot how they can get back to the top, whos to blame and why arent more resources being put into their rescue. They have no perspective. How can they, they're inside a dangling lift?

    The media will continue to report this cliffhanger but only for the benefit of those on the inside.
    The aim is to gain support for those 'poor souls' trapped inside.
    How callous would you have to be to want these people to die?
    Get your back into it! Get working! That building wont lift itself!

    New buyers and investors will do very well as they buy off the bottom of the market , that’s what happens folks !

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  • Re: The Daft House Price Report Q1 2012

    Posted By: Mark Ryan Date: Tuesday May 8, 2012 @08:37PM

    Wow,

    Get your script to the makers of 24 immediately!!!

    Problem is we are all in the lift together. Those of us who bought property back from 2005-7 and who have had the unwavering belief that property was one thing that was a safe secure investment and who now live in negative equity, we are the ones who cannot afford to sell to move to a better area, or to take up a better position in Cork or abroad. Selling for my family is not an option. We cannot afford to sell. We will realise a huge debt. We paid €493,000 for a three bedroom house in 2006. It’s now worth somewhere in the region of €255,000. If we sell we still owe the bank the difference plus €195,000. Not only would we bankrupt ourselves but we would never get a mortgage again.

    But hoping new buyers will again inflate the prices so that we can get out of our mess is unfair on the new buyers. Ultimately someone else would be put in our position.

    I wouldn't wish this situation on anybody else.

    I don't know if it is fair to make out that we have reached the bottom of the market when what we really believe is that it hasn't. How can it have reached the bottom?
    Same underlying symptoms persist.

    And forget the argument that there is a pent up demand. That is simply not true. Yeah, perhaps one or two of us know a guy who knows a guy who is sick of living with his mom and is waiting to get back into the market after selling his house a few years ago, urban myth.

    You don’t have to coheres people into thinking there is suddenly great value out there because everybody knows that house prices are 35-50% lower than they were four years ago. They can see the difference. It’s startling.

    But they can also see that things are no better now than they were four or two years ago. The European situation and our debt problems are all intertwined. If the greater market suffers, our economy suffers. If our economy suffers house prices go down.

    No my friend this lift we are in has not reached the bottom yet. I wish it had. But common sense and a sense of fairness tell me that to say otherwise is deceitful and shameful.

    Remember the media have a lot to answer for in relation to the boom. The newspapers and news programmes told us how good we had it and if not what we should have. House prices and investments were the headline stories on a daily basis. How much such and such a house made. How well such and such a businessman were doing with his property portfolio.

    David Mac Williams the economist was interview the other day and he said that such stories were misplaced and misleading. He agreed that we are not out of trouble yet and that things were going to deteriorate further because the basic fundamentals of economics had to be obeyed.

    To put it into cinematic terms to mirror your soliloquy.

    I would rather bear the burden of my own debt nobly, than to hoist my troubles onto the shoulders of others.

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  • Re: The Daft House Price Report Q1 2012

    Posted By: K[LIVERPOOL UK] Date: Wednesday May 9, 2012 @04:36PM

    IM A UK BUYER LOOKING IN IRELAND [CASH BUYER] SIMPLE ONE ??? WHY DO ESTATE /PROPERTY SELLERS IN A LOT OF CASES NEVER ANSWER YOUR PHONE CALL OR THINK YOUR STUPID AND QUOTE YOU THE BOOM PRICES ON THEIR PROPERTIES [GET REAL ] THEM DAYS HAVE GONE, I DOENT WANT TO BE DISRESPECTFUL BUT I WILL ONLY OFFER 50% OF THEIR ASKING PRICE[BOOM PRICE] TAKE IT OR LEAVE IT THE SHOE IS ON THE OTHER FOOT NOW ,,,,

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  • Re: The Daft House Price Report Q1 2012

    Posted By: Eamon Maher Date: Thursday May 10, 2012 @10:41AM

    I am a potential buyer in the market , there are number of stricking things:


    (a) the quality of the stock of property on the market is really poor , its like walking into a close down sale in a shop where most of the stock is gone ... its the stuff that would find hard to sell in a good market

    (b) when this is quality for sale you get lots of competition and I have been outbid twice

    so when you read prices down x % or y % they are reporting on very little , there is no choice and worst stuff is on the market

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  • Re: The Daft House Price Report Q1 2012

    Posted By: john Hayes Date: Thursday May 10, 2012 @12:14PM

    CSO again confirms rents are rising .... as inflation hits 2.3%

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  • Re: The Daft House Price Report Q1 2012

    Posted By: Anonymous Poster Date: Thursday May 10, 2012 @12:42PM

    What can I say. I agree with the point made by My penny's worth. Rents may rise in the short term but landlords are starting to price themselves out of the market. Soon it will make sense for renters to buy outside of Dublin and commute. Then prices will have another downward factor.

    Then rents will be forced down again. But on the positive, house prices outside the cities have to at least stabilise.

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  • Re: The Daft House Price Report Q1 2012

    Posted By: john Date: Thursday May 10, 2012 @09:26PM

    its a total nonesence to commute given the price of fuel and cars , that why I moved from Newbridge to Dublin City where i work..

    Petrol prices have gone up about 50% and there is no blogs about a price crash ..

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  • Re: The Daft House Price Report Q1 2012

    Posted By: Roy the boy Date: Friday May 11, 2012 @10:56AM

    There are areas close to the city that are on or close to train stations. House prices in these areas have dropped by 60% since the bubble burst. There is also a tax saving scheme to incentivise using public transport.
    You can even get cheap or free parking at or near the stations. From Celbridge you can be in the city in about twenty minutes. Thats quicker than driving in from Santry in a car which can take a half or more in a car depending on the time. And it takes an hour from Tallaght by car at the best of times.

    Commuting is cheaper now than it ever has been when you take comparitive transport into account. You dont have to tax or insure the train and you dont have to put fuel into it either every week. Also, you save on maintenance costs.

    Average car depreciates by 3000€ per year. Bigger cars depreciate more very small cars, less. 3000€ would pay for your travel costs to and from work for a year and then some.

    I don't understand why you didn't just take the train from Newbridge or perhaps you don't understand trains???

    Anyway, house prices out where I live are still dropping because people like you are moving into the city. That means that we will be able to move from our small three bed to a large four bed house this summer. Thanks mate.

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  • Re: The Daft House Price Report Q1 2012

    Posted By: Realist Date: Friday May 11, 2012 @11:03AM

    Makes much more sense to live near where you work / socialise, or on a train line and take advantage of tax effeicient travel in and out via Taxsaver ticket. If you commute every day you have the cost of petrol and parking charges. Its a no brainer really.

    This is why houses along such routes / within 30 mins of work will be attractive for renting / buying and wil move rent upwards in these locations, which is happening now.

    In fairness the rent moves are not large and are well below what was being demanded a few years back and given the extra charges that have been imposed on property in recent years (the €200 NPPR and €100 Household) per dwelling, the recent slight increase might encourage some people to but this type of living accommodation, but evidence suggests that all buyers now want houses

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  • Re: The Daft House Price Report Q1 2012

    Posted By: John Farrel Date: Friday May 11, 2012 @01:34PM

    I live near grantham street/camden street and yes rents have risen in last year , I am paying €1200 for a very small two bed last year this was €1100 , rents are on the way up as people can not buy due to banks and lending criteria ... prices have not fallen as mush as people make out ..........a lot of the stats give are based around low volumns of transactions and represent high end €1million plus stuff that's drop from €2milion ..


    I think its going to be a landlords maekets for the next five years as no new houses in dublin city are being build

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  • Re: The Daft House Price Report Q1 2012

    Posted By: K to the F Date: Sunday May 13, 2012 @09:10PM

    I come on to this blog from time to time to read peoples comments.

    There is a very interesting difference between the opinions of the media, estate agents and auctioneers vs the public and potential buyers.

    Listening to estate agents and the media you could very easily be led to believe that the market is miraculously recovering and that house prices are going to stabilize and improve. There is also a shortage of houses.

    Listening to potential buyers and the public, its all doom and gloom, house prices are going to fall, the market is still in bits etc.

    To me this appears to be the true situation:

    Everything is STILL based of asking prices! For all the houses that are sale agreed on this site, show us the sale prices. Then we will know the true situation.

    At the moment, house values are a guessing game. One house might sell for 300K, next door might be 200K,who knows? Its all down to the buyer and seller and the minute. What a buyer is willing to pay vs. what a seller is prepared to accept.

    Show the sale prices, show the true values and this will help the market to stabilize. Yes it will take a knock at the start and people will be shocked. But at least sellers will know what to expect, buyers will have more confidence in placing offers, banks will have a truer value of properties making them more likely to lend to the right people.

    What I dont get is why estate agents aren't pushing for this. They will make far more money selling twice the volume of houses at lower prices than half the houses at the still overvalued prices they seek.

    People are getting wiser, nobody is going to pay 300k for a 2 bed apartment or 400K for a 3bed semi in an average estate.

    Show the real value and people will buy. Im a first time buyer and am eager to buy, but Im not thick, Im not going to pay over the odds. Ill wait for a fair value thanks very much!!

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  • Re: The Daft House Price Report Q1 2012

    Posted By: cut to the chase!!! Date: Monday May 14, 2012 @08:37AM

    A lot of speculation on here as to what is happening in the property market. Here are some details which might help you make up your mind on the current state of the property market.
    At present the market is taking a breath. We will have the new sales price tracking register by September. Many people are opting to rent rather than sell at the moment. This will change very quickly when the colleges finish for the summer and the would be landlords discover that it is difficult renting poor quality houses out when there are now so many good ones on the market.
    I agree that in certain areas rents have increased to coincide with added levies and other charges but not substantially and not in every area. Putting up prices in certain ReS bE a negative effect.

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  • Re: The Daft House Price Report Q1 2012

    Posted By: Joe Date: Monday May 14, 2012 @01:31PM

    Rents have definately gone up significantly and demand is still very high. In Cork it has been as much as one third depending on area in the city. There is a lot of people holding off buying because of the slow market and are renting instead. That includes many people who can get a mortgage.
    In the case of buying, my advice is to buy now, even though few will listen to what I say. House prices may have fallen by say 55% according to surveys but if someone is willing to sell now you can get up to 50% off the maximum price the house was ever at. This is significant. At some point in the future people will decide to buy again and probably all at the same time. This has happened before. Any price falls will be cancelled out and prices will start increasing. Also, even already there is a lot less new houses being built to the extent that less houses are being built than are required. By holding off, I think people are going to generate yet another spike in prices rather than putting house price growth on a sustainable path.

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  • Re: The Daft House Price Report Q1 2012

    Posted By: Jim McMahon Date: Monday May 14, 2012 @05:05PM

    Its no rocket science really ," buy on bad news sell on good" . No one can predict the top or bottom of a market until its happen'd , but to buy now might just be a wise move ...


    The Euro is the only lemon in the pot , but realistically is the euro going to collaspe ?

    Regards

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  • Re: The Daft House Price Report Q1 2012

    Posted By: Stage left Date: Tuesday July 10, 2012 @01:03PM

    Myself and my wife have just moved to Oz. From the looks of most of the other passengers on the plane, it is a common trend. Will move back to Ireland when the prices reflect value.
    We are paying 800 dollars a month for a four bedroom house here with a couple of acres of gardin.
    Was here in January to get set up in a job. As a result I will be able to save 1000+ dollars a month and my health insurance is paid for by the mining company.
    My wife is not working yet as the nearest hospital is 40 miles away and our youngest child needs ongoing treatment for a minor injury. When she does start work we hope to double our savings and with luck we will be able to return in four years time with enough money to pay down a deposit for a house.
    Also there should be a recovery in the jobs market for people with geo-mapping skills.
    It was a big chance to take but so far it has paid off for us. I know two ex-builders who have taken up a job rolling wire in a factory as they could not get a job on the building sites here. Not a gold lining to everyones cloud but if you are willing to work and stay with one employer for an extended period of time, you will be rewarded.
    Many employers are getting cheesed off with the attitude of Irish workers. They go to interviews with the expectation of a certain job.
    One employer told me that he interviewed a lad for a job in a service exchange company and in the interview when he asked the chap where he would see himself in a years time, the guy told him that he hoped to move on to another larger company.
    That is not the attitude employers want to hear.
    Anyway, I hope things do improve. But we are gambling that there wont be any sudden rise in property values any time soon. Its a risk, but I wish we had been brave enough to make the move two years ago when I was made redundant.

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  • Re: The Daft House Price Report Q1 2012

    Posted By: James Griffin Date: Tuesday May 15, 2012 @02:32PM

    Certainly a lot of house prices will drop a lot further, a hell of a lot further, but not in the good areas of the large population centres where the constants of employment prevail ie Third level education, Health, Retail, Services and Leisure. Where the value of easy commutes will be appreciated not just in monetary terms but also in time and quality of life.
    Just a few figures from Daft Sales.
    Galway City; 168 units for sale, Ballinasloe; 486 units, Loughrea; 438 units for sale. This means that there are more than 5 times the amount of units for sale in Ballinasloe and Loughrea than there are in Galway City.
    Cork City; 246 units for sale. Mallow; 659, Charleville; 246, Macroom; 215,
    Its the same story around the country. These houses will remain vacant and unsold, wrong buildings wrong places wrong time, nobody will ever want them.
    246 units in Cork City is not a huge amount, same for 168 in Galway.

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  • Re: The Daft House Price Report Q1 2012

    Posted By: Frank Byrnes Date: Wednesday May 16, 2012 @08:19PM

    For someone like myself looking to buy a small country house house for retirement (10 yrs away) down the country, west of the Shannon... what is the advice?

    I am assuming no rush, that prices in the West will continue to fall and there will a very slow recovery over the next 10 years anyway.

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  • Re: The Daft House Price Report Q1 2012

    Posted By: James Griffin Date: Thursday May 17, 2012 @10:07AM

    Its a strange market , i like clifden myself , prices a down from 50% asking price and still not selling , but the sellers and not droping prices either , you see the same stuff on the market for years , maybe its the germans holding onto it .

    I would not buy anything until the euro issues breaks.

    hold fire

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  • Re: The Daft House Price Report Q1 2012

    Posted By: Harry Mcguire Date: Monday May 28, 2012 @03:19PM

    I notice that the number of rental properties in Dublin has jumped up from 3500 to nearly 4400 in just over two and a half months while the number of properties for sale has dropped from 5000 plus to just under 5000.

    To me this is an indicator that more people are opting to try to rent rather than sell. This might be a bad idea as we are entering the college holidays when traditionally a large number of properties come back onto the rental market.

    More supply than demand will drive rents down. Thats just what I learned in ecconomics in secondry school. perhaps those basic principles no longer apply?

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