Tuesday, Jan 23, 2007
When Irish eyes are smiling...
Irish Examiner: Significant cooling’ likely in housing market as interest rates set for rise
HIGHER than expected interest rates and stamp duty uncertainty may have resulted in a fall in house prices at the start of the year, according to a new report
Posted by george monsoon @ 10:41 AM (139 views) Add Comment
10 Comments
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1. dohousescrashinthewoods said...
Anyone noticed that last summer there wasn't so much as a whiff of negative coverage (VI spin and HPI 1000% was all that could be found).
This year it seems the floodgates have opened! If it all goes mildly, guess we could see a rash of "boo yah you bears" later in the year.
2. george monsoon said...
I found this article interesting in the fact that there is a lot of investment from the USA in Ireland, because the tax laws are different than the uk. As we are already aware the housing market in the US is heading south so I wonder if this is due to a knock on effect from the states, or is it something else entirely.
Can an educated soul enlighten me please?
Cheers.
3. Surfgatinho said...
"As interest rates move close to their peak"
Ah, more newspaper economists with crystal balls!
4. headmelter said...
The article is still pushing the 'soft landing' line so as not to spook the flock.
5. sold 2 rent 1 said...
george,
Ireland's growth over the last 10 years has been achieved through
- relatively cheap skilled labour
- tax incentives
- exporting to US and UK markets
- immigration
- debt accumulation - HPI
- high tech industries
- low IR
Now:-
- Wages and property are no longer cheap
- Euro rates going up
- US economy slowing
- Globalisation causing some foreign companies to leave/offshore
The risks to house prices have to be on the downside now
6. Retiredbanker said...
sold 2 rent 1-
Also don't forget the net inflow of some €34 billion EU grants, which gravy-train has now run up against the buffers.
By way of showing appreciation for this largesse, they allowed German companies to set-up token head offices in Eire, whereby
these companies were able to avoid paying corporation tax in their own country. The Germans were not amused.
7. george monsoon said...
Thanks sold2rent.
I would suspect that the high tech industry boom over in Eire has attracted a lot of skilled people from overseas, which would increase a demand for housing. Now that the US economy is slowing and euro rates are on the up, Ireland is probably not as attractive to those US companies. (especially when you have emerging countries in Asia taking a huge slice of the IT pie)
8. sirgoogle said...
I bet the article is wrong - ECB will raise rates on the 8th Feb. There is definately significant (real - not CPI) inflation here in the Netherlands
9. Nohpc said...
The ECB doesn't care about inflation in Holland it cares about inflation across the whole of Europe. Last time they raised rates this was only at 1.9% so very low inflation across the board.
10. Tara747 said...
Anecdotal: my cousin (a solicitor) can't sell her Dublin flat (officially a 2-bed, but one of them is only 7'x7'), it's been on the market for 5 months and no takers. She is getting married in April and seriously panicking! Her fiance has no house to sell so they are relying on the 'equity' from this flat, and cannot buy anything until it is sold. She bought it for 340,000 euro 18 months ago and is asking 370,000 euro. I reckon she'll be advised to drop the price - estate agents hate a stagnant market more than they hate a falling market (no sales = no commission). Asking prices are dropping fast across Dublin and the rest of the country - with buyers staying away, selling prices may be a lot lower!