Flash
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Posts posted by Flash
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Good post and welcome to HPC, Jimmy6000.
After reading yesterday's Sunday Business Post, I must say that I feel a serious underlying conspiracy between the government, banks and all others with a vested interest in property prices in this country, trying to prop things up with media propaganda. Tell the common folk that things still look good and they will believe it.I too get the same feeling, because so many in government and business are neck-deep in the property game. Now, with interest rates rising, some are maybe thinking of off-loading a little - if they haven't started already).
Now, if you had a big property portfolio to sell over the next 18 months, what sort of 'property news' would you like to see in the media?
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The OECD are probably right.
The obscene rate of credit growth in Ireland will support the market for a while yet. The more people borrow the higher prices will go. And, the higher prices go, the chances that we will see a soft landing get ever slimmer.
Ireland will soon be the most indebted nation in the Eurozone, with private sector still growing at around 30% per annum!!!
Most people with an ounce of common sense can now see where this is going. The problem is, those same people are either in denial and/or are convinced that they will get out before it all goes wobbly.
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Speaking to the Oireachtas Health Committee today, Dr Darina O'Flanagan said an outbreak in Ireland would see 25% of the workforce taking between five to eight working days off over a three-month period.
Assuming the virus does mutate, how the hell does she come up with these figures?
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In the U.K., there is a strong, positive relationship between rising house prices and consumer spending. Much the same is true in the U.S. It might also be true in Europe -- if the ECB would only give it a chance.
The growth that results might be imbalanced. It may be too reliant on bank borrowing, debt and consumer spending. That is still preferable to no growth at all.
...in other words, so long as we borrow what we can, so we can go out and spend and 'pretend' to be rich, that's ok.
History tells us otherwise.
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Also against the euro! (Down .27%) .28% and still falling...
http://newsvote.bbc.co.uk/1/shared/fds/hi/...13/intraday.stm
It's quite an instant sharp drop.
Hmm. So speaking as someone that lives in the Eurozone - The average UK house price has fallen 700 Euro today!
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The BBC has always been biased toward the government of the day.
Do you remember the coverage of the miners strike in the 80's, and how the Scargill and his striking miners were portrayed as something akin to mad axe murderers from Mars? Why? Because that is what Thatcher wanted. Propaganda is the most powerful weapon of war.
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Put an offer in today at the estate agents for a new build property, 7.5% below asking price. David the estate agent then told me that "Bellway would want the contracts drawn up at the asking price, any discounts would come in the form of a cashback." I assume it looks bad if they don't achieve the asking price.
Of course, this also means that house price surveys do not include the effective 7.5% drop in price. Even the Land Registry cannot take this into account, since the stamp is paid on the contract price.
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Some Irish employees of Microsoft got together in 1999 and formed a company to buy and develop property in Ireland and Britain.
Wow. Now that was foresight. They must have found themselves in the best growth business, in the most dynamic market on the planet over the last six years.
So you'd think that by now they'd all be living it up, with a yacht, Aston Martin and catwalk model each. Okay, so perhaps the model is pushing it a bit - they are IT guys after all.
Anyway, the Sunday Business Post today reports that the venture has collapsed with multi-million Euro Debts!!!???!!!
What?!! If they couldn't make money in Irish and British property since 1999 then there has to be something seriously wrong.
Does anyone know any more on this story? There has to be more to it.
Perhaps, being Microsoft employees, they thought that when you had a property in need of repair, all you had to do was "go out the front door and go back in again" and it would suddenly repair itself.
EDIT: link attached
http://www.thepost.ie/post/pages/p/story.a...1774-qqqx=1.asp
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How about this one? What a bargain!!! LOL
http://www2.myhome.ie/search/property.asp?...rch&searchlist=
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On the second hand market the same applies. Three years ago a room slightly bigger than a prison cell (11 sq.m.) at Leeson Park in Dublin 6 sold for €130,000. We were astounded. Now a wooden hut (18sq.m.) with an outside toilet in Greystones, Co Wicklow, looks set to achieve a similar price.
Not bad for a country the size of Holland and Belgium combined, with just over 4 million people in it.
The property comic book, 2007AD, will see the return of Captain Common-Sense to take on Judge Greed in what will be the final battle.
(I think I've had too much coffee this morning)
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Good find Brainclamp. That's a great article.
With the Irish general election coming next year, the housing market could become a central issue - almost to the point where the public may vote for "the party that would better protect house price wealth".
Interesting times ahead I feel.
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The arguments put forward by bulls in Ireland (bulls are 95% of the population) are thus:
1) Immigration - Ireland has the highest level of immigration per capita than any other western European state. All these immigrants need somewhere to live.
2) Demographics - Ireland is the youngest population in Western Europe, all these young people fleeing the nest need somewhere to live.
3) Economy - Ireland's economic growth is among the strongest in Europe, and many economists are predicting this to continue for many years to come. Foreign investment is still flooding in and the only unemployed are those that can't/won't work.
4) The Doommungers are just crying wolf - The warnings so far have been proved incorrect, time and time again.
5) "Renting is dead money". Full stop. There is a real social stigma to renting. It's just something that Eastern European immigrants do.
6) Following on from 5. If you are a first time buyer, you must borrow what you can to get on the ladder now, because with prices rising by double-digit rates, you will be condemned to the renting underclass for ever if you don't.
7) Because prices are have gone up so far, the house you live in is your "pension fund". You will retire, sell it and live a millionaires lifestyle in Southern Europe - plenty have done this already. There are countless "accidental" millionaires in Ireland.
8) Property is a rock-solid investment. It is considered far safer and less volatile than the stock market.
Has anyone heard any others?
This is the mantra. It is repeated everywhere you go. It's all very surreal.
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An uncle of mine bought a couple of apartments in Brighton from a developer early last year. On the way down in the car to sign the contract, he called the developer and knocked off another 10%!!! They went ballistic, but they accepted it.
He didn't feel bad about it, because as he said "the very same crowd did the opposite to me a couple of years before."
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An insider at AIB told me recently that their loan to value ratio was very healthy.
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The Irish are so screwed: the country is going to be an economic wasteland for decades after the ECB raise rates to rational levels.
It will be very nasty for sure, but Ireland will emerge stronger and on a more even keel afterwards, a little like Thailand has, after its crash in the late nineties.
In the meantime, the shock for population will be so great that there could be a serious political upheaval. Sinn Fein will score plenty of points by blaming right-wing, free-market economic policy for the disaster. Of course, a more popular Sinn Fein will spook foreign investors and make the economic situation worse, but I think it could happen.
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http://news.ft.com/cms/s/92314076-9848-11d...00779e2340.html
subscription only, but here's a couple of quotes.
The Bank of England's monetary policy committee meets this week amid some calls for a cut in interest rates. These intensified with the publication of British Retail Consortium figures showing like-for-like retail sales grew just 0.2 per cent in January, a turn for the worse after a robust December. But the Bank should stand firm: there is no case for a rate cut at this juncture.If it did cut rates, it might find itself having to reverse course rather quickly. -
Oops. I think the BBC's headline isn't quite on message. It should read:
Good news for buyers as house prices became 2% more affordable at the end of the year.
I'm sure they will correct their mistake soon.
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And what I don't get is this...
The MPC uses interest rates to control inflation so soaring energy costs will push inflation up, and inevitably, interest rates too. But consumers have no control over energy costs and have already cut back other spending significantly, so what will the MPC actually achieve by putting up interest rates in response to inflation caused by energy price rises other than to further turn the screws on the poorest and most over-stretched people? It's hardly going to make people buy less petrol and gas when they still need to get to work and heat their homes, so what, excactly, is it going to achieve?
I guess that is because inflation caused by raw materials prices and by wage rises are two different things.
Interest rates are normally raised to reduce money supply and to try keep a lid on inflation. However, if the treasury allows inflation to rise, but massages the figures so that it doesn't appear, the government won't have to increase the pay of millions of workers who have their salaries linked to inflation. Therefore they can actually get away with paying those workers less in real terms. And, if the government can convince the markets the same, they can continue to borrow money at lower real interest rates. The US Fed is playing the same game and even no longer publishes key money supply figures. However, not everyone is fooled, hence the performance of gold over the last two years.
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A whole page in today's FT is dedicated to the issue of consumer spending and inflation.
The article describes how utility bills, council tax, insurance, mortgage repayments, public transport etc. have all increased by amounts above inflation.
But it was the headline that made me smile - "How the costs of everyday living have outpaced inflation".
Surely, if the inflation figures are calculated correctly, they should be an accurate reflection of "the costs of everyday living". All this shows to us is that the inflation figures that we are fed are simply wrong and are actually much higher.
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Below - Article on "Irish property pyramid". Precisely the same principles apply to the UK; to go in now and buy property is tantamount to suicide; You've been warned!!!!
http://www.sbpost.ie/post/pages/p/wholesto...qn=1-qqqx=1.asp
While similar principles exist to the UK, it is not quite the same.
The effects of a downturn in the property market in Ireland will be felt far worse than in the UK. The construction sector is a much larger proportion of GDP in Ireland and credit growth is rising exponentially.
In my local area, every other person you speak to has "a property portfolio". I'm serious - that is no exaggeration. A correction, downturn or whatever you want to call it, will so completely turn the public's property owning principles on their head, that the effects will be devastating. It's very scary.
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The Irish media is starting to ratchet up the warnings as the debt Tusanami hoves in to view, too late?
Will the careers of Dan McLaughlin and my favourite pundit, Austin Hughes survive in the aftermath?
Anecdotal: On Saturday, during a half-time drink at Lansdowne Road, I couldn't believe my ears when the conversation magically turned away from Ireland's lacklustre performance on the pitch, to the state of the housing market.
- such is the obsession with property wealth.One of my pals - who has property in Dublin and Spain and previously would never accept that it may be overvalued - actually suggested that the apartment market "may be due for heavy falls".
Wow, that was a big moment for me - My uber-bull buddy has turned over to our side, I guess there must be many more out there.
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The key issue for me on this is that the whole thing is a "nothing story". There are much more important things happening in the business world than some survey on people's property aspirations, and yet the BBC chose to give it no.1 spot on the business page. This is very disturbing.
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WTF?
How the hell can the BBC give this nothing story, number one spot on its business page!!!!
The BBC does not comment on Hometrack surveys but will highlight a report by a research house no one has heard of, just because it is bullish on the housing market.
Pathetic. :angry:
Our Bear In The Beeb
in House prices and the economy
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He could well be one of us. If he's an STR and done his homework, he must have at least visited as a guest.
We come from all over, from various backgrounds, professions and echelons of society - all thrown together in a sort of hyperspace version of Fight Club.
Seriously though, I'm sure the site is visited by a few Journo types. Not least because it is the best place to read the news about the property market "as it breaks".