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werewolves

Pop! Ecb 3.5% Rate. The Pin That Pops The Irish Property Bubble?

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Hello everybody!!

The Irish property market is supported by two things:

* The laughably low ECB interest rate

* Madness

The latter point. may be somewhat controversial (and I guess putting the whole country on antipsychotic medication might be even more controversial still...).

Never mind, the ECB (European Central Bank) is here to help.

The ECB have raised rates as widely predicted, much to the annoyance of the doves, from 2.0% to 2.25%.

So what? A quarter point increase is hardly worth the effort and it's impact is likely to be small. I guess the change in sentiment it has incurred will be more potent than the small increase in debt servicing.

So who cares? Well the limited impact of a single quarter point rise as led commentators to suggest further increases are on the way. Jean-Claude Trichet (ECB presidential dude) has downplayed this somewhat. Though I've got a feeling he'd be bumped off with a poisoned tip baguette by the COS (French special forces) if he said anything else.

Julian Jessop (Captial Economics) has suggested that rates COULD HIT 3.5% BY THE END OF 2006.

3.5%!! That would translate to a 75% INCREASE in mortgage repayment costs. Needless to say this would devastate the Irish. Leprechauns would become a endangered species as people sought to relieve them of pots of gold (as well as their underpants).

Actually it would probably roger the entire EU. Which is why I think it seems somewhat drastic. We would need some serious inflationary pressure for this to happen. I personally think Saddam Hussain has a greater chance of getting a boob job than ECB rates going up to 3.5% by 2006.

Nevertheless ECB rates may go up by 0.75% or so. Which would still translate into a 37.5% increase in mortgage repayments. I wonder how many could afford this? No many... Guess prices will fall.

A drop in Irish house prices would impact on our property market. A number of HP indices count in N.Ireland. In addition a large number of cheeky Irish investors have purchased property here.

In addition, could the BOE tolerate low rates when the FED and ECB are pumping up theirs?

So there you have it. I would appreciate any comments.

Werewolves.

:huh:

P.S. Sorry about the humour. I think I ate somebody taking LSD...

QUOTE: The Times. http://business.timesonline.co.uk/article/...1902555,00.html

'Last week the European Central Bank (ECB) raised rates for the first time in five years, taking its main rate from a 60-year low of 2% to 2.25% in a bid to curb rising inflation pressures.

Julian Jessop of Capital Economics, a consultancy, thinks rates could go as high as 3.5% by the end of 2006.'

Edited by werewolves

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The Euro has enjoyed a repo rate of twice that of the US dollar for a long time. A time during which most of the european property booms took hold. Now they are suffering as their x2 margin has been reversed. This is putting a lot of pressure on their currency. It's all about America always hasbeen always will be. The Eurozone boom zones are phucked.

PS so is the UK just as soon as the irrational fat Scotsman either becomes PM or gives up the idea.

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The Euro has enjoyed a repo rate of twice that of the US dollar for a long time. A time during which most of the european property booms took hold. Now they are suffering as their x2 margin has been reversed. This is putting a lot of pressure on their currency. It's all about America always hasbeen always will be. The Eurozone boom zones are phucked.

PS so is the UK just as soon as the irrational fat Scotsman either becomes PM or gives up the idea.

I wonder if the 'repo' should now stand for repossession instead of repurchase order...

:unsure:

Edited by werewolves

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The ECB have raised rates as widely predicted, much to the annoyance of the doves, from 2.0% to 2.25%.

So what? A quarter point increase is hardly worth the effort and it's impact is likely to be small.

Small? I make it a 12.5 % increase in interest payments for a lot of maxed out mortgagees.

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Small? I make it a 12.5 % increase in interest payments for a lot of maxed out mortgagees.

I agree that 12.5% is a significant rise and I'm sure it will hurt a number of people, but not enough to pop the bubble.

Another two quarter point rises (which isn't beyond reason) would take it to a eye watering 37.5%. An increase that could inflict serious damage.

The Irish mortgage payer should be afraid. The market is in a pure bubble state. Unlike here, numerous Irish houses stand empty. They have been bought purely with the intention of speculation.

As I have mentioned earlier. A collapse in the Irish market would impact on UK prices.

It's interesting that I have not read much about the subject in the mainstream press... Guess I'm not reading enough.

Werewolves

:ph34r:

Man goes to the zoo

But when he arrives there's only a dog

It was a Shitzu

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As I have mentioned earlier. A collapse in the Irish market would impact on UK prices.

I agree. One of the UK Bulls arguements is, "look at Ireland - It really is different this time - honest!"

I say bring it on. That would help us here, as stated a large part of the UK HPI is due to N. Ireland prices which have to been influenced by Rep. of Ireland sentiment and prices.

The prices in Ireland are quite clearly, utterly, INSANE!

Edited by Spoony

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Hello everybody!!

The Irish property market is supported by two things:

* The laughably low ECB interest rate

* Madness

The latter point. may be somewhat controversial (and I guess putting the whole country on antipsychotic medication might be even more controversial still...).

Never mind, the ECB (European Central Bank) is here to help.

The ECB have raised rates as widely predicted, much to the annoyance of the doves, from 2.0% to 2.25%.

So what? A quarter point increase is hardly worth the effort and it's impact is likely to be small. I guess the change in sentiment it has incurred will be more potent than the small increase in debt servicing.

So who cares? Well the limited impact of a single quarter point rise as led commentators to suggest further increases are on the way. Jean-Claude Trichet (ECB presidential dude) has downplayed this somewhat. Though I've got a feeling he'd be bumped off with a poisoned tip baguette by the COS (French special forces) if he said anything else.

Julian Jessop (Captial Economics) has suggested that rates COULD HIT 3.5% BY THE END OF 2006.

3.5%!! That would translate to a 75% INCREASE in mortgage repayment costs. Needless to say this would devastate the Irish. Leprechauns would become a endangered species as people sought to relieve them of pots of gold (as well as their underpants).

Actually it would probably roger the entire EU. Which is why I think it seems somewhat drastic. We would need some serious inflationary pressure for this to happen. I personally think Saddam Hussain has a greater chance of getting a boob job than ECB rates going up to 3.5% by 2006.

Nevertheless ECB rates may go up by 0.75% or so. Which would still translate into a 37.5% increase in mortgage repayments. I wonder how many could afford this? No many... Guess prices will fall.

A drop in Irish house prices would impact on our property market. A number of HP indices count in N.Ireland. In addition a large number of cheeky Irish investors have purchased property here.

In addition, could the BOE tolerate low rates when the FED and ECB are pumping up theirs?

So there you have it. I would appreciate any comments.

Werewolves.

:huh:

P.S. Sorry about the humour. I think I ate somebody taking LSD...

QUOTE: The Times. http://business.timesonline.co.uk/article/...1902555,00.html

'Last week the European Central Bank (ECB) raised rates for the first time in five years, taking its main rate from a 60-year low of 2% to 2.25% in a bid to curb rising inflation pressures.

Julian Jessop of Capital Economics, a consultancy, thinks rates could go as high as 3.5% by the end of 2006.'

I think you will find that mortgage rates in the eurozone are nearer to a base of 4-4.5% and not at base rate levels. Puts a 0.25% increase more realistic at around 6% impact on payments - unpleasant but a long way from disaster.

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Unlike here, numerous Irish houses stand empty. They have been bought purely with the intention of speculation.

Where's 'here'? There are plenty of empty, purely speculative properties in the UK.

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  • 301 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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