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kirstieb

'The housing bubble will burst and create another credit crunch'

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The comments show a lack of knowledge on behalf of the commentators.

One person even said that housing bubbles don't cause credit crunches. What he didn't understand is that the crash will cause the crunch. 

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That's a refreshingly frank assessment compared to the VI dross over here:

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If you’re buying now as a first-time buyer, or you are buying somewhere just to get on the property ladder that is the worst thing to do. There will be major affordability issues and that is going to be our next crisis. I am very concerned that a major correction is coming.

I'd though that prices in Ireland since the crash had pretty much stagnated - when in actual fact (according to the CSO) they've grown by 60-70% since their lowest point in 2012/2013 with current growth well into the double-digits and last month's being an eye-watering 13% YoY.

I think the sentiment's bang on, however they've still got another 25% to climb to equal their previous peak in 2007. This is assuming that the last peak can be considered a reasonable benchmark; who knows - it could crash sooner due to general economic conditions / remaining fallout from the last correction, or could go even further due to the lower (current) interest rates. Maybe the sentiment of the article is bang on, maybe this boom has years left in it yet.

A particularly interesting piece of vitriolic and patronising tripe from "Fred Jonsen":

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Paul is a financial advisor. That means he took night classes with such cutting edge topics like “What is an interest rate?”….No serious economist agrees with this tripe.

How can the housing bubble create a “credit crunch” when there is barely any credit out there? It’s an equity boom caused by quantitative easing. ECB interest rates cannot move upwards very much given the weak Mediterranean economies, a 2% rise is highly unlikely. Might get 0.5% at a stretch. As for oversupply, is he having a laugh? Nimbyism and incompetence from DCC will ensure we never get nearly enough supply.

Not sure what the situation is with private unsecured debt in Ireland, but if it's anything like it is over here it's rocketing skyward once more. Also, is a mortgage not the largest example of credit / debt an individual is ever likely to saddle themselves with?

 

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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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