Back in August, Euros were floating around their historical (5 year) value of 2/3 £ (i.e. 67p).

On Friday, the Euro nearly touched 3/4 the value of Sterling (i.e. 75p)

My question is this, with (predicted) falls in NI HPs this year and possible* continued gains in the euro, will RoI Specuvestors be tempted back to the NI market any sooner?

*http://www.bloomberg.com/apps/news?pid=20601087&sid=axotNuw2luh0&refer=home

If UK/US IRs go down and Euro IRs up, the Euro can only get stronger

I doubt it - there can be no appetite for speculation left. Plus, who will buy up all the for sale property?

That's my worry, too - and not just about the ROI folks, but everyone whose currencies are going up vs. sterling.

However, this £ weakness works both ways: on the one hand it makes investments more "affordable", on the other, it erodes the profits. One has to really believe in the pound's revival to throw their euros at UK property. And the BTL rental income is not an option, as you know.

Meanwhile those who have already "invested" are pinched badly by the falling pound, as well as by the falling prices.

A wise investor would not do it.

I don't see this happening, perhaps with businesses yes but not with housing. The bubble has burst and it'll probably take another 15 - 20 years before the bubble peaks again.

Doesn't matter how strong the Euro is if they have to borrow lots of them to buy an overpriced house.

Property speculation in the RoI is dead; those with properties in the North will be looking to sell them ASAP before they lose out on sale value and currency conversion rates.

Any investor with half a brain, would not buy a depreciating asset.

... money would do better in a bank.

Northern Ireland property has just started to depreciate. Sheeple just don't know it yet.

Couldn't agree more. Also ECB rates look likely to rise, there is just no appetite for debt north or south of the border at present. It will be a vicious self-fulfilling circle.

knock, knock, knocking at 0.75p's door (apologies Eric or was it Dylan )

http://uk.finance.yahoo.com/q/bc?s=EURGBP=X&t=1d

This has sent me into a tailspin in the last few weeks. ROI can withstand €1 to $1.40-$1.42 as far as export but it is now $1.47. The Stg is the largest trading partner, and the 75pence scenario can only be described as unexpected nightmare. It will cause a lot of pain and will travel more than likely to the .7875 to .80 barrier, soon enough. The BBC and other lobby groups are already on the band wagon clamoring for another rate cut from the government in the UK. Retail numbers other than M&S on Jan 14th are going to be very bad. City banks should just do a straw poll and forget about the monetary committee. Oh how I can't stand Brown.

ECB hopefully will hold rates, even though Germans are shit scared of their inflation at 3.3% in December [German exporters can withstand €1 - $1.80 due to lower costs, higher productivity]. But they will not get their way though and it'll be a hold throughout 2008. Btw does anyone know why, apart from UK plc being dead in the water the reasons sterling is tanking? Interest rates are higher than Eubor and monies and forex should flow rationally in a proper market conditions? Is George Soros back?

If 80p is hit then some ROI fruit cakes may look at value again in NI on seeking distressed sellers only. The London S/Exc offers some really good value. Many companies are trading below book value and low P/e's. Only though if the currency stabilises. When though!?

I put it down to traders having already priced in 1 or 2 further BoE cuts this year.

Who is going to buy them?? This feeding frenzy is over.

apologies for dragging this one out of the hpc backwaters but.........

for all those interested in the €:£, the next month may provide more clues regarding its longer-term direction.

In detail, it is seemingly at a crossroads at the moment (see attached graph) but during March, we will see in the short-term whether it stays at a plateau (.75p ish) or the upward pressures (that have been there since Sept. 07) continue.



Of course it may go down, so just to recap it may go up, stabalise or go down.

edit: changed jpeg loc.

The 6th of March may provide the answer. Both the ECB and MPC meet to set IR's.

It looks like the 'break-out of pattern' is already occurring and it's not even March yet!

The upward climb is winning it (at the mo) £1 = €0.7627

another cr@p day for sterling vs euro

Well it's nearly the end of March and what a month this has been for €:£

The possible 75p euro plateau that was referenced above is a fading memory, the upward pressures won the day and some with the euro at 79p today

When will this euro rise against sterling end? Your guess is as good as mine, but the graph below shows the capacity for further upward movement will be with us through April, even if there is little change during this month:



Imagine being paid in Sterling and having a euro-based mortgage - Ouch!

When I first started this thread I asked the question would RoI specuvestors come back to the NI market sooner because of a strengthening Euro and falling HPs. In retrospect, this question was perhaps misleading because my concerns were more focused on the depreciation of Sterling as a currency.

Back in August, Euros were floating around their historical (5 year) value of 2/3 £ (i.e. 67p).

Today the Euro is currently a shade off 80p. The difference between August and now is approx. 19.5%

So let's look at this another way, If we assume that the NI % HP drop from the Aug. peak is 15%;

A House in NI is currently nearly 35% Cheaper to Euro buyers since the August peak.

So where will it all end? I wish I knew because I am sick of seeing my savings stagnate in an account whilst they take a battering from currency depreciation and REAL inflation.

However, IMHO, I think the Euro is going to display a correction before this years out. The German economy cannot 'carry' the likes of club med (& Ireland) forever. Add to that the Baltic states with currencies tied to the Euro all displaying current account deficits larger than 10%

'Fitch said countries that run current account deficits above 10pc of GDP for any length time almost
always come to grief. East Asia's debt crisis in 1997 erupted before any state reached double digits.
Iceland's deficit is now 16pc of GDP. Latvia is at 25pc, Bulgaria 19pc, Georgia 18pc, Estonia 16pc,
Lithuania 14pc, Romania 14pc and Serbia 13pc. The region will need $337bn in foreign loans this
year.'

http://www.jsmineset.com/cwsimages/Miscfil...954_Iceland.pdf

edit - clarification

bump

1 euro = 87p this am

Back in August 07, Euros were floating around their historical (5 year) value of 2/3 £ (i.e. 67p).

With 30% hp falls so far add to that 20% swing in currency towards the euro, some hard-nosed RoI buyers (or euro savers) may be thinking that Belfast property is looking tasty again

this isn't a 'NI house prices have bottomed thread' but a 'euro buyers may enter the market sooner than you think' thread

edit - just for clarity, euro high / pound low, does this entice buyers from the south who want to hedge against a later euro decline by parking their funds in property north of the border?

It would take a remarkably brave or naive investor to do so. Yes, vfm is a lot better than it once was but we are staring the biggest economic down turn in history right in the face, NI has almost nothing going for it in terms of unique or highly specialised abilities, NI is a massively expensive 'asset' to the UK (which itself has set itself up onto one of the worst situations possible) and NI property has been seen to both balloon and (now) plummet incredibly quickly.

I believe that a wise investor will put his money somewhere that has suffered to a level greater than other similar and where a potential for improvement exists. NI has infact benefitted more than most and has very limited potential for meaningful and longterm economic change.

I agree with a lot of what you write.

However, (and to reiterate, I personally don't believe we are at the bottom yet) I do think the more the £ slides, the 'bottom' may come sooner. But.... as the £ slides, costs in imported essentials will rise making a recession worse, so a vicious circle.

If only we had a large manufacturing industry to take advantage of a weak pound.

I think for investment they'd be more inclined to head for london
more chance of a faster recovery there

I see two other issues :

1. No bank will now lend to an investor without a proper business plan , this should limit the amount of speculative investment .

2. The flip side of the strong euro is that rents paid in £ against a euro mortage are now much lower in real terms.

Cranking up the printing presses isn't going to help the weak pound -

http://www.telegraph.co.uk/finance/economi...ng-presses.html

Time to reconsider our savings?

not heard much from the kerryvestors lately
seems they have a lot of wounds to lick!

http://www.farmersjournal.ie/2008/1129/far...m/feature.shtml

rock on!

talking to a person yesterday with considerable assets
who went looking for a small business loan to his bank this week
not only a business plan required
last 3 years accounts required
deeds of 2 properties that he owned outright required
to get a loan 4% over base
and 1% added on to his overdraft facility
cheap credit?


rock on!

Exactly R+R...Thats what the daft fools trying to ramp up property prices always say about interest rates being cut will mean banks will start lending again. I mean how misguided are they. I know for a fact, as I have heard it from the inside, that banks are planning to make lending alot tighter. I know for sure that credit card accounts are getting closed at an alarming rate, by the banks... They already are. The private sector will set rates, not the government or the BOE...they are powerless.

hi VT

do you think this could mean a raise in interet rates for savers before too long?
I'm not that clued up on these things so if I can figure out that the government is digging a big hole to throw the debt down and take the savers with it then
I think most people will see this and the banks know it
there has already been resistance from a few banks today citing a balance between borrowers and savers
how honest that is I don't know but they must see that the empying of accounts out of the country does nothing to stabilise thier position

I'm kind of hoping that the banks will revolt a bit
and popular opinion will follow and then maybe we can can a vote of no confidence in the gov to force an election

not that I hold much hope for that smarmer Cameron

feel free to disregard my conjecture
clutching at straws here

Hi Mr Slump, from what I can gather you have a family etc, so you of course want somewhere as safe for your money as possible, until you find your house...? I mean svaings rates could stay low for quite a while, a year or 2, maybe longer. These things never play out that fast. They take time. To be honest, i would buy things like silver, gold, and woulnt have any of my money in sterling. Although I reckon we have reached a intermediate term bottom in sterling, I think the risks of owning sterling are too great over the next few years. Silver is 75% below its all times highs, it is under 10USD an ounce, however, what you will get is volatulity and more risk, which I assume you dont want...However, the risk of having your money in sterling in my humble opinion is too high for comfort...At least I would be diversified....you see, when the inflation monster raises its head over the next decade, longer term interest rates and bond yields will soar, as I think holders of government bonds will sell them, pushing sterling down, and the yields on the bonds higher...SO higher interest rates in a few years wont be a good thing, as it will be there to counteract higher inflation and support a weaker sterling. So your savings will be destroyed in a short time anyway, if sterling collapses...as we are a net importer and net debtor nation...

I m buying these kilo bars of silver...silver bars

For me it is very cheap at this time, and I reckon, it will more than double in the next 6-18 months...This is a good hedge against bad currencies, which are being destroyed by the government actions...

Check out this 6 year chart of silver...Click to view attachment It has gotten really cheap.

VT how long do you see the current deflation lasting? I think 1 or 2 years based on what I've read so far.

I'm in 2 minds about what to do at the moment, I'm about 20% in physical gold and I'd like to buy some silver (although I'm not sure if I should buy bars or go with coins incase we have a sterling crisis as I think coins would be more useful in this scenario)

One more thing that is puzzling me somewhat, we are in deflation at the moment (in theory our money should be worth more now) but current BOE policy is devaluing sterling. These actions seem to go in the face of what should happen to the value of money during deflation.

For this reason it seems like a no brainer to buy more PMs since our money is not increasing in value during this deflationary phase.

The trend now seems to be set to cut rates for the immediate future, are we going to end up with 0% interest rates in the US, UK & EU?

The last thing that worries me the most is an Iceland scenario, any idea how likely the UK could end up like Iceland?

thanks a lot for taking the time there VT
something to seriously consider
and yes I have a family and we need somewhere safe to kep our house money
we have some circumstances that dictate that this might be our ony chance
I have a small + varied income due to not having that many hrs in a week, but it would be ok
if we were rent + mortgage free
I'm hoping six months will see the market at the level I want to see and being cash buyers we'll get lower
certainly I hope to move within the year
not sure mrs slump would be comfortable with the silver investment but I'l llook into it
seems like it might be a more long term investment ie. it may go down for a while before it goes up

what do with these things anyway?
keep them in a safe or a bank safe?

what size would £100,000 worth be?

I guess we just want the safest option