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eric pebble

Irish Times: Warning That House Prices May Fall By 80%

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Irish Times: Warning that house prices may fall by 80%

http://www.irishtimes.com/newspaper/financ...759.html?via=mr

Sparing no blushes, he said professional economists in the Central Bank and the Economic and Social Research Institute “need to look very closely at their analyses of the Irish economy and figure out what went wrong”.

--------------------------

Jeezuz WEPT --- HOW DIDN'T THEY SEE THIS COMING?!?!?!?

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I don't think even we saw 80% coming!

I definitely thought - 70% was likely - especially in Ireland - where there are more sheep than people - and, as far as I know, the Moneylenders haven't yet thought up a way of giving mortgages to sheep............

.........Wait a minute! ........That's EXACTLY what they HAVE been doing!! :D:D

Edited by eric pebble

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It's quite believable.

A simple example. My aunt sold her horrible little terraced ex-council house in the crime-ridden shitty suburb of Crumlin for EUR €500,000 in 2007. She moved out of Dublin and bought a new-build out in the sticks for which she was charged similar insane monopoly money.

The average industrial wage in Ireland is EUR €32,448 http://www.cso.ie/statistics/indearnings.htm What's 3.5 times earnings? It's a miserable EUR €113,568. If you've ever seen Crumlin I wouldn't even pay that much for her previous house. Given that markets always over-correct on the way down I can easily see that house being worth EUR €95,000, or maybe less, in the very near future.

That's an 80% drop.

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Irish Times: Warning that house prices may fall by 80%

http://www.irishtimes.com/newspaper/financ...759.html?via=mr

Sparing no blushes, he said professional economists in the Central Bank and the Economic and Social Research Institute "need to look very closely at their analyses of the Irish economy and figure out what went wrong".

--------------------------

Jeezuz WEPT --- HOW DIDN'T THEY SEE THIS COMING?!?!?!?

Recovery will be slow: “It has taken us 10 years to get into this situation – it will in all likelihood take us 10 years to get out of it.”

This will be the next reality over here that will hit home, the period of time it will take us to get out of the housing downturn. They are talking 10 years.

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Looks like my -82% prediction for my area of West London is on it's way - bring it on!

No millionaires live around here, just who the frick bought these houses?

We have a 1 bedroom flat round the corner - to renovate this would cost about 120K due to structural problems. This is for sale at £475K.

I have lived in better squats.

Edited by Tonkers

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Recovery will be slow: “It has taken us 10 years to get into this situation – it will in all likelihood take us 10 years to get out of it.”

This will be the next reality over here that will hit home, the period of time it will take us to get out of the housing downturn. They are talking 10 years.

And all it would have taken to stop this was the application of an extraordinarily simple formula:

Lend no more than 3.5 x REAL, TRUTHFUL SALARY.

And so, because they didn't do this - they unleashed the World's Biggest Ever Ponzi/Pyramid Scam......

Edited by eric pebble

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Irish Times: Warning that house prices may fall by 80%

http://www.irishtimes.com/newspaper/financ...759.html?via=mr

Sparing no blushes, he said professional economists in the Central Bank and the Economic and Social Research Institute “need to look very closely at their analyses of the Irish economy and figure out what went wrong”.

--------------------------

Jeezuz WEPT --- HOW DIDN'T THEY SEE THIS COMING?!?!?!?

Eric, this is old news: we discussed it at length here:

http://www.housepricecrash.co.uk/forum/ind...howtopic=100755

Do it again and we'll start calling you Slowhand ;)

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I am not expecting 80% falls in UK house prices.

Mind you, I wasn't expecting 90% falls in bank share prices either.

This is the conundrum. Some bank shares are down 90% because people can't pay back the money that they have borrowed.

A lot of the money that has been borrowed is implicitly or explicitly secured against property which is only down 20% or so according to official statistics.

I do not see how these two can co-exist. I suspect that the resolution will be in favour of much lower property prices.

Bank shares are priced and traded continuously and instantaneously with every piece of new market information. Houses trade once every 5 to 10 years (I think) which is why the disconnect between the two can remain in place for a long time.

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Eric, this is old news: we discussed it at length here:

http://www.housepricecrash.co.uk/forum/ind...howtopic=100755

Do it again and we'll start calling you Slowhand ;)

I have been ill this week so have spent a lot of time on the site so I did follow the previous thread.

From what I have seen, there is a weekend crowd on this site who aren't here during the week (me included most of the time).

Happy to see this thread reignited, especially as the previous one dissolved into a bit of a statistical methods shouting match.

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This is the conundrum. Some bank shares are down 90% because people can't pay back the money that they have borrowed.

A lot of the money that has been borrowed is implicitly or explicitly secured against property which is only down 20% or so according to official statistics.

I do not see how these two can co-exist. I suspect that the resolution will be in favour of much lower property prices.

Bank shares are priced and traded continuously and instantaneously with every piece of new market information. Houses trade once every 5 to 10 years (I think) which is why the disconnect between the two can remain in place for a long time.

I handn't thought of it like that, but that's a very good point. The interesting thing to me is that the bust is not the mirror image of the boom as I was expecting. Bank profits and house prices inflated together and I thought that they would decline together - but the feedback mechanism seems to be different.

One possible scenario is that despite all the drama with banks collapsing and jobs being lost, house prices simply drift down serenely month after month year after year. For leveraged house owners this is probably the most unpalatable outcome of all, and it isn't a bowl of cherries for STRers either.

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The Irish went wrong when they spent all the EU Objective One money on roads, airports, infrastructure, communications and building high tech factories to draw in the likes of Cisco, Intel, Dell and Co.

They should have done what us Welsh have done - spent it all on choirs, the Welsh language, saving the cockle and 6 different types of seaweed, colleges where you can go to train to become a pop star and other similar notable ideas. Or better still, have to hand millions of it back to the EU because you have not spent it!

It can be argued that if the Irish had p*ssed their OB1 money up against a wall they would not be in the mess they are in now. Eire know your limits - just like us Welsh!

;)

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Oh, and stand by for hearing much angst from some pop stars, luvvies and other celebs who suddenly found themselves buying up loads of property in Eire in the past 18 years so they can have Eire residency and avoid paying UK taxes on their fortunes.

Anyday now I expect to hear of a Live Aid style concert for bw ankers and luvvies who have fallen on hard times due to the credit crunch.

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I handn't thought of it like that, but that's a very good point. The interesting thing to me is that the bust is not the mirror image of the boom as I was expecting. Bank profits and house prices inflated together and I thought that they would decline together - but the feedback mechanism seems to be different.

One possible scenario is that despite all the drama with banks collapsing and jobs being lost, house prices simply drift down serenely month after month year after year. For leveraged house owners this is probably the most unpalatable outcome of all, and it isn't a bowl of cherries for STRers either.

The pressure from the pent up supply will build up slowly but eventually it will have to collapse under its own weight.

Patience is required which is frustrating for the STRs who have been right but aren't getting their gratification as quickly as they would like ......

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Oh, and stand by for hearing much angst from some pop stars, luvvies and other celebs who suddenly found themselves buying up loads of property in Eire in the past 18 years so they can have Eire residency and avoid paying UK taxes on their fortunes.

Anyday now I expect to hear of a Live Aid style concert for bw ankers and luvvies who have fallen on hard times due to the credit crunch.

I am not sure that Banker Aid will draw that much of a crowd .....

"Feed the bankers" just doesn't have the same ring to it ......

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Guest sillybear2
This is the conundrum. Some bank shares are down 90% because people can't pay back the money that they have borrowed.

A lot of the money that has been borrowed is implicitly or explicitly secured against property which is only down 20% or so according to official statistics.

I do not see how these two can co-exist.

The wonders of leverage dear boy, leverage.

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I am not sure that Banker Aid will draw that much of a crowd .....

"Feed the bankers" just doesn't have the same ring to it ......

That and, "don't the bankers know it's Christmas".

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with the high gearing of the banks on the MBSs, it's not hard to see how the banks are wiped out on even small falls in house value.

there were even many cases of the same security being leveraged multiple times.

it doesn't take much drop to kill you when you are geared like that.

imagine you promise the same item to 5 different people.

if it goes down by half, and you are responsible to make good the difference like the banks were, you are now down two hundred fifty percent, not just fifty percent.

Edited by Mr Nice

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  • 284 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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