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undersupply

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And HPI is a government sponsored Pyramid in the form of irrationally exhuberant IR that have been too low for too long. With the FT advising people to stay clear of property (both residential and commercial) there could not be any clearer warning that a collapse is imminent.

Now is not a good time to be investing in property.

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Pyramid scam alert. Read this post for more: http://www.housepricecrash.co.uk/forum/ind...showtopic=21507

Yeah, loved that "last guy" article.

I know a few of these cautious, reticient types.

Still have their birthday money under the mattress, saving for a bigger and bigger deposit, because they can't bear the idea of borrowing money.

I remember when the papers were saying over here in 2004 how prices were going up 100 pounds a day, in dublin it is now over 170 pounds a day.

When the last guys hear these statistics, they decide its time to enter.

Edited by undersupply

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Good article.

And how often do we hear similar opininions to this one here?

"In recent months, the future of our housing market and our prosperity has been put on the broad shoulders of our immigrants. The new argument is that, even though domestic supply has caught up with our own demand for housing, the 70,000 new immigrants a year will keep demand - and prices - motoring. So, the more immigrants, the higher house prices.

But the problem with this argument is that all studies of immigration show that at a certain stage, the cost of housing affects the choice to come here or not. A recent study by the ESRI - entitled Rising House Prices in an Open Labour Market, and written by David Duffy, John Fitzgerald and Ide Kearney - suggests that, not only will the rise in our house prices have a significant impact on the amount of new people that will come here but, more interestingly, the high cost of houses will drive the immigrants back home when they reach settling-down age. Let us examine the 120,000 or so Polish workers who are here. Will they all stay? Hardly! Again, new economic studies indicate that the decision to move to another country is now a temporary one.

The young Polish workers are emigrating by text. They are being bombarded by texts from friends and moving as a result."

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And HPI is a government sponsored Pyramid in the form of irrationally exhuberant IR that have been too low for too long. [Realistbear]

Except that in the case of the Irish Republic, Interest Rates are set by unelected bankers in Frankfurt and are completely outside the control of the Irish government -- hence the unfolding disaster which is the Irish economy.

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The Irish media is starting to ratchet up the warnings as the debt Tusanami hoves in to view, too late?

The Sunday Times February 05, 2006

Ireland: Comment: Jill Kerby: Avoid getting caught in house-price bubble

LAST month the amount we spent on credit cards exceeded €1 billion for the first time (€1.05 billion to be exact). Another 152,000 credit cards were issued last year and non-mortgage credit growth, says the central bank, is running at more than 30% a year. Meanwhile some Dublin house prices are rising by the equivalent of €230 a day, according to the Permanent TSB/ESRI house price index.

Our incomes, which are increasing by just 3%-5% a year, are clearly not picking up this tab, which explains not just the level of debt that people are accumulating but the fact that about a quarter of all mortgages are now for equity release purposes.

These figures are beginning to frighten me. If I were the only one in my family to decide, I would sell our house, bank the money and rent an equally nice one (in a nicer neighbourhood) for less than the interest paid on the proceeds of the sale. It is this yield anomaly that has me convinced there is a big house-price correction on the way.

Two young friends have just bought a small town house on the western edge of Dublin’s M50 for €315,000. They have spread the €290,000 mortgage over 35 years. If mortgage interest rates hit 4% by the end of this year, repayments will rise to €1,400 a month plus €250 a month for insurance, service charges and management fees. The same house next door is renting for €1,200 a month, including refuse charges.

The Permanent TSB/ESRI index is predicting a 10% rise in house prices this year. If we assume this takes place, it will bring the price of this house to more than €346,000. But if we then assume a fall in prices of 30% next year, my friends’ home will be worth about €72,500 less than they paid for it. The guy next door, who decided to rent instead of buy, will not only have saved himself €5,400 in rent and costs over the course of the year, but could now buy his own place for just €242,500, whereas a year ago it would have cost €346,500.

New buyers need to take a step back from the hype and accept that we have been caught up in a global asset bubble that is probably bigger than the dotcom one that exploded in 2001.

http://www.timesonline.co.uk/newspaper/0,,...2024737,00.html

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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. :blink: - 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.

Edited by Flash

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Two young friends have just bought a small town house on the western edge of Dublin’s M50 for €315,000. They have spread the €290,000 mortgage over 35 years. If mortgage interest rates hit 4% by the end of this year, repayments will rise to €1,400 a month plus €250 a month for insurance, service charges and management fees. The same house next door is renting for €1,200 a month, including refuse charges.

The Permanent TSB/ESRI index is predicting a 10% rise in house prices this year. If we assume this takes place, it will bring the price of this house to more than €346,000. But if we then assume a fall in prices of 30% next year, my friends’ home will be worth about €72,500 less than they paid for it. The guy next door, who decided to rent instead of buy, will not only have saved himself €5,400 in rent and costs over the course of the year, but could now buy his own place for just €242,500, whereas a year ago it would have cost €346,500.

Is this a fair comparison?

If IR rises surely rents rise too.

She gives a comparison of future mortgage repayments against current rents in a theoretical scenario.

Surely with yields at 2% she didn't need to do this? <_<<_<

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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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