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House Price Crash Forum


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About plummeting_prices

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  1. Now 44% less inventory available to buy and 55% less available to rent in Northern Ireland on PropertyPal.
  2. Irish SSIA's are all going to begin maturing in 2006-2007. For those of you unfamiliar with SSIA's, they were a "Special Savings Incentive Scheme" introduced by the Irish government in an attempt to encourage saving. Basically, the way they worked was, members joined up and could lodge a fixed amount each month up to a maximum of 254 euro. This would be invested in either a bank account earning interest or shares. Unfortunately for them, most SSIA holders opted for the bank account option after the 'then recent' stockmarket crash. The beauty of the SSIA schemes was that the Government gives holders an additional 1 euro bonus on top of every 4 saved - this was a bonus in addition to the interest/rise in share prices. However, if you took your money out before 5 years was up, you lost your 25% bonus. There was a brief period when the government were reconsidering the 25% bonus due to a higher than expected take-up of the scheme. However, they have decided to go ahead and give the bonus as planned. When these schemes mature in 2006/2007, what do you think will happen: House Prices Will Rise People will pay off chunks of their mortgage /debt Stock market will rise (bearing in mind that most SSIA holders are very sceptical of the SM) It'll be stashed in bank accounts earning a whooping 3% (Irish Best Buy) Interest Rate I reckon those with mortgages and no children will pay chunks of their mortgage and some will probably BTL. Those with children will probably supply their children with housing deposits (a practice that is quite common at the moment in Ireland). Bear in mind that those who contibuted the maximum to their SSIA's (47% of holders) stand to get a lump sum of around €24,000 - €48,000 for a couple -- a great time to start a business in Ireland selling the likes of the Dixons £8k TV featured on another topic on this board
  3. Irish property prices aren't going to fall. Irish property prices ALWAYS go up.
  4. And what would your reasons for not to use visual basic be??
  5. Has noone else any comments/suggestions on my mortgage calculator then??? I'd like any suggestions to add new features to it if possible!!!
  6. Hi, I've just double checked. My program uses the Charcol method. I decided to use this method because it is what the majority of the online mortgage company calculators seem to use.
  7. Yeah, I fully agree with the comment about Excel. However, doing these calculations in Excel requires a certain level of computer literacy which not everyone has. The calculator I developed aims to simplify the process.
  8. Hey people, Just thought I'd post this now that it's finished. I have learned some programming skills and whacked together some software over the past few months with regards to mortgages. The software will tell you many things. Heres an example of what it does: Calculates Your Monthly Repayment Calculates how much you can borrow - given your monthly repayments, mortgage term and interest rates Calculate how long it'll take to repay the mortgage - given the mortgage amount, monthly repayment and interest rate Calculates how much sooner you'd pay it off with £X extra per week Calculates your repayments if interest rates go up or down Checks if you're better off buying or renting and a few other nifty tricks Please note that I am NOT spamming here. Although I'd like some monetary appreciation for my effort, I am allowing you to download the software for free. It's up to you if you'd like to donate a few pound. Heck, if a few people donate a few pound I'll even take your comments on this board and enhance the software and add new features. Download Software Here If you decide to donate some money get in touch at [email protected] - even £1-£2 lying around in your paypal or nochex account would be much appreciated. Even if you decide not to donate any money, please post your opinion on the software. Thanks and Regards, Ronan
  9. The potential problem with the "When the facts change, re-evaluate" is that it suggests buying when the market turns. This, in my opinion will lead to losing out on the huge differences between asking prices and agreed selling prices that are likely to be seen close to that time - probably in excess of 10%. When the market turns, the newspapers will report it and when this happens, you are likely to lose that 10% overnight. Indeed, houses could then start selling at above asking prices, i.e. it will turn from a buyers market to a sellers market again.
  10. I've read in various articles from various sources of prices dropping over the next 1-5 years. The range of the predictions are immense. Indeed, by even looking at the homepage of this site you will see predictions ranging from 0% change to as much as 50%. I've also read through the forums here about people saying that it's best to hold out from buying until buying becomes cheaper than renting again. The only problem is - I don't think the crash will go this far. Indeed, many of my relatives who bought in London in the 70's and 80's have been known to say: "things where tough then... there'd be noone moving into a fully furnished house. it took years and years to get all your bits and pieces" "we were lucky to get a mortgage and when we got it it took a huge chunk of your uncles wages, and me trying to raise three childen" My point is, it has always been difficult to get your first house and always will be. I don't think property will fall until such a point where buying is cheaper than renting. It is inevitable that, when you take the plunge and buy your first property, sacrafices must be made. Taking the Halifax figures for example. The last month where theuy quote a P/E ratio is June. Here, they give an average price of £162,693 and a P/E ratio of 5.46. This means that properties would need to drop to the following price to give a P/E ratio of the magic 3.5: £162,693 / 5.46 * 3.5 = £104,290 At this quoted average salary, people will be on an average salary of £1,769 AFTER TAX. The mortgage repayments on a Woolwich mortgage (current rate 5.09%) for a 25-year repayment morgage would be £615 per month or 34% of TAKE-HOME pay. Average rents would also cover this level of a mortgage with money left over - i.e. the professional BTL's would get back in here - and probably slightly sooner. I don't see this level a drop happening. In my opinion, houses will continue to fall until they are at a level where some of the higher-earning first time buyers as well as those with big deposits can buy. This is more likely to be nearer a 4.5 salary multiple giving a house price of £134,087 - a drop of 17.5%. Prices will then be seen to level off at which point the STR's will get back in. This will be seen to be the bottom by many and prices will turn. It should be noted that at £134087, the mortgage would be £790 per month (also 25-year repayment) which would be manageble by all but the lowest earners - with a bit of sacrafices. In short, ask anyone who bought a house at any point in history. Most, if not all, will tell you that it was tough for them and they had to make sacrafices too - even at the low prices of those times. It will never be a walk in the park but the phsycology behind, and the pride of, owning your own house will mean that sacrafices WILL be made. That being said, my advice is - set an absolute percentage drop, e.g. 20% from the peak, and when prices reach this level BUY. You may find that, if you wait for the 40% or 50% drop quoted by some, and the market rises a little at 20% or 25% below peak, people will be unwilling to sell at the 10% off asking prices likely to be seen at this point. Instead, they'll see their properties rising and will be likely to hold on to them ar sell them at above asking price (sound familiar). We need to be very careful not to miss the boat when it berths this time round
  11. I've just read on one of the Irish property forums about a man asking for advice on where in Dublin is best to buy a BTL property. You'll not believe the response: Now, at the €3/5 million bracket considering the VERY LOW Irish interest rates of 3.4%, you would need to charge €8,500 - €14,100 per month just to cover the interest. Sounds a bit of dodgy advice to me but then again, I suppose that €5,000,000 house is going to be worth €20,000,000 in 3-5 years - Ideal for an FTB on a salary of €5,700,000 per annum. After all, that is only a 3.5 salary multiple
  12. Another interesting thing (if you don't think it's too personal) would be to find out how many of each type of coins you have as well as how you decide to buy more. For example, do you keep gold to a certain percentage of your total investment portfolio or do you buy as many coins as possible with each months salary. Personally, I have just ordered my first 5 and would consider buying 3 per quarter or something similar - depending on how the value rises/declines of course.
  13. Hey everyone. After carefully reading the topics about gold on this forum - regardless of some peoples annoyance at the amount of gold threads, there are some people (like myself) who don't have a clue about investing in gold so the more threads the merrier. Anyway, I've just gone and taken the plunge and bought 5 Krugerrands from goldline.co.uk. I'm worried about two things: The Company not delivering - I've been burned recently by Tiny Computers bankruptcy who failed to deliver my laptop after taking my money The possibility that I have missed the boat - with Gold at it's 17-year high However, investing involves risk and risk involves worry so we'll forget about that for now. The purpose of this topic is to discover what those of you in the know about investing in gold would do in the following scenario: You have decided that you do not want to invest in gold-mining shares because you feel that a general downturn in the stockmarket may have a negative impact on them. You have also decided against holding an allocated/unallocated account in gold with one of the various companies offering these services (call it a trust issue ). So this brings us to holding physical gold. Your choices are coins or bars. With bars, you envisage finding it difficult to sell such a large quantiity of gold in single transactions in the future when gold is at $5,000 an ounce Therefore, you decide to go for coins. The question is: Which coin would you choose and why? Personally, I have chosen the South African Krugerrand because it's cheaper. As far as I'm aware, these are only 22kt as opposed to some of the others which are 24kt but the Krugerrand is slightly heavier meaning that it does actually contain the same amount of gold - and it's more scratch resistant. Some people argue that Britannias are better because they are not subject to Capital Gains Tax. However, I feel that if, when you come to sell your coins, you have made enough money to use up your entire £8,500 CGT allowance on the coins you sell in any particular year, you're laughing all the way to the bank anyway.
  14. I'm no economist and am wondering what effect a countries trade surplus/deficit has on its' economy, i.e. Jobs, house prices, etc. I have just noticed the following from the National Statistics Office pink paper for 2005: Trade in goods and services The trade in goods account recorded a net surplus in the years 1980, 1981 and 1982, largely as a result of exports of North Sea oil. Since then, however, the trade in goods account has remained in deficit. The deficit grew significantly in the late 1980s to reach a peak of £24.7 billion in 1989, before improving in the 1990s to a level of around £12 billion. Since 1997, the deficit has widened sharply, reaching a record £58.6 billion in 2004. Does this mean that the UK government is getting into serious debt and have no cushion to fall back on in the case of a worldwide recession or has it nothing to do with the actual amount of money the government has at it's disposal. In contrast, I notice that Ireland has a trade surplus. The following is taken from the central statistics office in Ireland: Annual External Trade Year Imports Exports Trade Surplus €m 1990 15,832 18,204 2,372 1991 16,317 19,070 2,753 1992 16,754 21,260 4,506 1993 18,900 25,179 6,279 1994 21,945 28,891 6,946 1995 26,181 35,330 9,149 1996 28,480 38,609 10,129 1997 32,864 44,868 12,004 1998 39,715 57,322 17,607 1999 44,327 66,956 22,629 2000 55,909 83,889 27,980 2001 57,384 92,690 35,306 2002 55,628 93,675 38,047 2003 47,865 82,076 34,211 2004 51,015 84,281 33,266 Does this mean anything with regards to the sustainability of e.g. house prices or am I "way off"
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