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Not in the property market myself other than owning my own house , the value of which is irrelevant as it is purely for living in .
My children all have more than one property , they all went that route rather than put money into pension plans . A wise move until possibly 2 years ago , when things changed big time . However their situation is secure and causes no sleepless nights , and ultimately the markets will slowly stabilize ( and property prices will move upward ) . Or will they ?
Over the weekend I heard about 2 property transactions / sales . In different parts of the country ( north , but I suspect the figures / rationale apply countrywide ) .
The first was a completed sale for a house ( rather than a property) , sold for 40% of the original asking price . No idea why the figures are so bad for the vendor , but it does seem a huge reduction .
The second was a friends neighbour , same house as the friend who purchased 3 years ago ( when property was very highly / overvalued , but the friend was downsizing and sold at the top and did nicely out of the transaction ) , the neighbours house is on the market for approximately half of the 3 year ago figure ( and not "selling" ) .
Both these houses are in "stable" , desirable areas , not too many years ago they would have been sold within a month at realistic asking prices .
Are these isolated incidents , or do they just reflect the "actual " situation as against any media hype out there .
My children all have more than one property , they all went that route rather than put money into pension plans . A wise move until possibly 2 years ago , when things changed big time . However their situation is secure and causes no sleepless nights , and ultimately the markets will slowly stabilize ( and property prices will move upward ) . Or will they ?
Over the weekend I heard about 2 property transactions / sales . In different parts of the country ( north , but I suspect the figures / rationale apply countrywide ) .
The first was a completed sale for a house ( rather than a property) , sold for 40% of the original asking price . No idea why the figures are so bad for the vendor , but it does seem a huge reduction .
The second was a friends neighbour , same house as the friend who purchased 3 years ago ( when property was very highly / overvalued , but the friend was downsizing and sold at the top and did nicely out of the transaction ) , the neighbours house is on the market for approximately half of the 3 year ago figure ( and not "selling" ) .
Both these houses are in "stable" , desirable areas , not too many years ago they would have been sold within a month at realistic asking prices .
Are these isolated incidents , or do they just reflect the "actual " situation as against any media hype out there .
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"and ultimately the markets will slowly stabilize ( and property prices will move upward ) "
what is to suggest that this will happen? apart from the hope that the bets your children made will eventually pay off? not wishing to wish your kids any bad luck, but I hope prices contuinue to fall, and that we can move away form the prerty bug that has almost killed us and develop a knowledge based economy that can grow sustainably and does not transfer wealth from house buying families to property speculators. |
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as a chartered valuation surveyor i can assure you prices will continue to drop. Houses on the mkt at the moment are carrying the dead weight of a) inflated site value b)high cost of construction.
Take for instance the sale of a site in Sallins in Kildare recently with FPP for 116 residential units. This achieved an equivalent price of €17,500 per unit site (in the boom yrs this was more like €100k per unit). Add in the cost of constructing the apartments of say €75 psf (used to be at least 150 -180 psf) and the apartment would stand the developer max €80k before profit.... he can afford to sell them at €120 k and still make money.....HOWEVER apartments currently on the market are having regard to their old site values and construction cost. Similarly it would now cost (turn key finish) €110 k to build a 4 bed semi d in Dublin, add in site value of say €30 k and house would stand the developer €130k before profit... these can be sold for €150 - 180 k and still make a profit... Further falls in prices are inevitable i'm afraid ! |
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Not worried about my childrens property situation , they all bought years ago when house prices were related to income , ie mortgages ( which influenced house prices ) were still governed by the 2-3 times salary multiplier . And they are all in "guaranteed " job situations ( in so far as that is possible these days ) , so apart from pension considerations low house prices will only affect them if they need to sell . The renting market has I believe held up well , even strengthened ,no worries to date on that score .
I am more interested in the general viewpoint about economic worries , my comments about my family were just a "disclaimer " . I worry about Joe public , who took out a big mortgage 5-6 years ago , is maybe facing an uncertain future jobwise , and has an albatross mortgage in a falling market . Those in that situation need help / time / sympathy etc , it was not all greed driven or keeping up with the Jones'es . Realistic product and service charging to them is probably the only way they will be able to afford life . The reason I trust property prices will eventually rebound is purely based on historical patterns . People need places to live , and provided there is no over supply ( and a stable population )it becomes a pure supply and demand situation . From what I hear , nobody is building houses at the moment , may take some years before stability ( as previously defined ) returns . But if there are no new builds , eventually demand should return ( provided all the current foreign nationals dont go home ) . But I am quite happy to see little movement upwards or downwards at present . No one wants the bottom to fall out of the market completely , otherwise there would be more "jumpers" . Interested to hear the view that the downward trend may continue . Cant discount that , but its not what the government and financial people etc wants to hear . Part of the answer is for everybody to liver "lower on the hog ( as distinct from higher )" . Unfortunately recent generations have no concept of "delayed gratification " as one of my friends puts it . If you needed/ wanted it , put it on your credit cards seemed to be the attitude . Growing up and evolving during the war and post war , our generation ( and previous ones ) learnt to "make do" , there were 3 cars in our street/ avenue / park of 70 houses . Now I see 3 cars per household in that development ( where my mother still lives after 70 years plus in same house ) . All parked on the pavement . No one uses their driveway any more , dont understand that , except pure laziness . I always park my cars in my driveway , but my neighbours dont . Why ? Interesting views to date . |
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sorry didn't mean to sound flippant about your kids situaiton.
As for Joe Bloggs who is over extended on his mortgage and without job security, I also feel sorry for them and would like to see them helped. But the problem of the moral hazzard remains. If you help out the person who can afford their mortgage, or who over borrowed, then you implicitly punnish the person who didn;t over borrow, or who makes extra sacrifices to pay their mortgage off. The incentive is then to not pay off your mortgage, as help is at hand. Bad or reckless behaviour should be punnished, not burdened by those who behaved sensibly. I also find it incredible that people gambling on property prices were getting a tax break on their activities. Essentially it is this activity that has lead to so many Joe Bloggs not being able to pay ioff their mortgage, or being foced to live somewhere with no public services or amentiies a 3 hour commute from their jobs. The government should hang their head in shame, they enriched their developer cronies and hung the rest of society out to dry. If they were trying to do exactly the opposite of what a governmet should do, they succeded. |
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What in the name of God is a chartered valuation surveyor?
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Just back from a great holiday in Califonia. Property prices have more than halved there but because the market has not been been artificially held up like it has been by the insiders over here they are already out the other side and the recession is all but at and end in the US despite the negative press about debt etc.
My buddy is moving back to Ireland after 4 years in California (think he is off his rocker personally but so be it) He bought his house for 650 (it had been worth 950 at the peak) and just sold it for 450K. Took the loss on the chin as they all do over there. His new company will make up some of the difference but you can get a sense for the different attitudes. When prices drop to the right levels in Irealnd property will move. The right level is on or around 30-35% of where they peaked. Another interesting point, in 2 and half weeks in California I read 3 major articles on the Economic situation in Ireland in the LA times. I was shockled to see the level of interest on the West Coast of the US in our situation. We are hated over there and internationally despite the propaganda being spouted by the 2 fat Brians and the rest of the numpties in Government. |
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A friend of mine in the construction game in Australia for 20 years was telling me the Aussies referred to our madness/obsession as the "Hungry Paddy syndrome".
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Interesting comments Lustrumm . My wifes nephew lives in San Diego , but have not talked to him in a long time . Funnily enough , although he is worth a pile of money , he has never bought a house in USA , he rents . Gives him more mobility I suppose , his job takes him all over the place .
The hate comment surprises me , the impression I always get is that the Yanks love us Irish . But I am not exposed to any view points on that score . |
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WHAT IS A GENERAL PRACTICE/ VALUATION SURVEYOR?
Also known as the General Practice Surveyor, they undertake a variety of activities, but are mainly concerned with estate agency, valuation, development and management of property. In valuation General Practice Surveyors advise in connection with all real estate matters, including the valuation of property for various purposes -such as open market value, acquisition, disposal, insurance, rent review, mortgage, taxation, rating and compulsory purchase. Most valuation surveyors are engaged in private practice, but many are also employed in the Public Service. http://www.scs.ie/what_is_a_surveyor/types_of_surveyors/what_is_a_general_practice__valuation_surveyor |
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Hi Kelly - just google in 'irish students California' and view some of the top results.
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I didn't see any articles linked to why we would be hated as an economy Vubiant
Could you elabarote on the point lustrumm? |
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the social will be looking for another 8% off the landlords again in 2011 and then you will see the
house prices drop further |