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Property 'bubble' could continue expanding

Cliodhna O'Donoghue

Property Editor

CURRENT property price increases appear quite unsustainable by any standards, but it is a fact that they have been hiked up by at least 350% - 400% over the last ten years alone. It has reached the extraordinary stage where the annual increase in the value of homes, especially in Dublin, represents more than most owners earn in a year.

Commentators frequently talk of bubbles bursting, but anecdotal evidence at home indicates otherwise with many pundits saying that the market will remain unchanged for at least another year, or until supply meets the increasing demand, or interest rates rise sharply.

Desperate house hunters slept outside the sales office of a new scheme in Blanchardstown this week to ensure a deposit on a scheme in Latchford, Dublin 15. Even then some didn't secure a unit and will have to wait until another phase is released. Last month the same thing happened in Lucan and Limerick where people queued overnight and some were disappointed. Rochford Manor in Trim also sold out this week in less than five hours, representing a sale value in excess of €30m to Taggart Holdings. And in Belfast buyers have been queuing since last Monday for a scheme which opens for sale next Monday.

This rather undignified scramble for property is sparked by a shortage of new homes. This is despite record building output and the introduction of 100% and interest only mortgages which bring more people to the market without them having to go through the traditional savings period to secure a deposit.

Parental subsidies are also bringing more buyers to the market and the huge increase in immigrant buyers (30% in come cases) is also fueling demand.

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.

Prime second hand homes are also selling at astounding levels because fewer are coming to the market (as people opt to extend rather than trade up and pay penal taxes for the privilege)

More buyers are chasing the reduced product pushing up prices at auction sometimes to twice their guideline level.

It's small wonder that our affordable and social housing list spirals upwards on a daily basis. Sadly, Government fails to provide respite despite the cash cow that property transactions represent for the exchequer.

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many pundits saying that the market will remain unchanged for at least another year, or until supply meets the increasing demand, or interest rates rise sharply.

Then it will crash and a whole generation will spend the next twenty years enslaved to the bank.

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Or it won't crash and the next 20 years are spent by you enslaved.

Suspiciously sounds like 'house prices only ever go up'.

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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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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)

Must be some of that gourmet stuff, others can't even smell it!

Seriously though, there must be a lot of thirty somethings who FTBed in 1995 who could retire if they sold up before the next general election.

If only they could see the wooden shed from the tree!!!! :lol::lol:

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Must be some of that gourmet stuff, others can't even smell it!

Seriously though, there must be a lot of thirty somethings who FTBed in 1995 who could retire if they sold up before the next general election.

If only they could see the wooden shed from the tree!!!! :lol::lol:

Still on that thought, if you bought in dublin in march 1996 for 150,000euro, your house is worth 770,000 today

and 770280 tomorrow,ha ha

I could probably live on the 620,000 of equity.

figures supplied by permanent tsb, to be sure, to be sure!

edited 2006 changed to 1996 D'OH.

Edited by undersupply

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Still on that thought, if you bought in dublin in march 2006 for 150,000euro, your house is worth 770,000 today

and 770280 tomorrow,ha ha

I could probably live on the 620,000 of equity.

figures supplied by permanent tsb, to be sure, to be sure!

property prices in Ireland will rise this year. The desire to purchase ones home is even more ingrained in the Irish psyche, more than even the English perhaps. Irish prices may even withstand a complete dry up of mkt volumes and/or withdrawl of FTBs as no one 'it their right mind' ever wants to rent. Socially speaking, renting is one notch above homelessness.

External commentators simply do not understand the religious-like desire to own ones living space here. Their is no logic or concern about price, it's (a) I must own, (B) right now I can afford the monthly cost, © therefore I buy.

No other concerns enter the decision process.

This is the sorry situation in Ireland. However, I'm thinking that arbitrage possibilities exist, even at this stage of the game. I am currently assessing whether I should flip property in the next 12mths. Anyone got ideas? I'm talking a highly leverage flip, in and out 12mths max.

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property prices in Ireland will rise this year. The desire to purchase ones home is even more ingrained in the Irish psyche, more than even the English perhaps. Irish prices may even withstand a complete dry up of mkt volumes and/or withdrawl of FTBs as no one 'it their right mind' ever wants to rent. Socially speaking, renting is one notch above homelessness.

External commentators simply do not understand the religious-like desire to own ones living space here. Their is no logic or concern about price, it's (a) I must own, (B) right now I can afford the monthly cost, © therefore I buy.

No other concerns enter the decision process.

This is the sorry situation in Ireland. However, I'm thinking that arbitrage possibilities exist, even at this stage of the game. I am currently assessing whether I should flip property in the next 12mths. Anyone got ideas? I'm talking a highly leverage flip, in and out 12mths max.

flipping wont work over 12months with 9%stamp duty ,interest and other transaction costs

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And with the other thread about repossessions soaring in Ireland, now may be a very bad time to be buying there even to flip.

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This rather undignified scramble for property is sparked by a shortage of new homes. This is despite record building output and the introduction of 100% and interest only mortgages which bring more people to the market without them having to go through the traditional savings period to secure a deposit.

Absolute bolleaux. This is word-for-word the same cr@p that was being bandied about 2 years ago in parts of Australia and 12 months ago in California and Phoenix etc.

The most significant phrase here is "record building output". If that's the case, then by definition you don't have a "shortage of new homes".

What you do have is an unnatural level of demand, which the article alludes to itself when it talks about the non-traditional mortgages. House hunters sleeping outside offices, when building levels are reasonably high, is a sign that the blow-off top is in.

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flipping wont work over 12months with 9%stamp duty ,interest and other transaction costs

I would qualify for SD exemotion up to €317k for any type of property. So, buy something for say €275, sufficiently under the threshold so that resale still appeals to FTBs. Transactions costs, interest on 100% or I/O mortage etc. would be €18k lets say, so would need 6.5% increase just to breakeven. If I could get an 10% higher price thats a cool ~€10k profit. Tallaght, Portlaoise, Dundalk look like good punts.

The risk of course is my timing is impeccably bad...

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Walktothewater I think it might be possible to flip a contract on a ftb new build Louth, Meath or Kildare. The development would have to be a new release, (no resales cluttering up the market), you would have to have a switched on solicitor (very rare) and a multiple agency arrangement for the sale with a sales bonus (say 2.% to agent plus say €500 to the member of staff who gets an exchange of contracts).

The only problem in the manic Irish market is that you’ll see competitive bidding on new developments which might scupper any short term resale margin.

But if you cant sell after exchange at least you will own a valuable asset which can be rented out for a healthy profit and will appreciate in value in the long term, etc, etc, blah, blah, blah :D:D .

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How about this one? What a bargain!!! LOL :lol:

http://www2.myhome.ie/search/property.asp?...rch&searchlist=

700 euro a sq ft.

Thats £500 a sq ft.Whats London £300 a sq ft?

Madness

I would qualify for SD exemotion up to €317k for any type of property. So, buy something for say €275, sufficiently under the threshold so that resale still appeals to FTBs. Transactions costs, interest on 100% or I/O mortage etc. would be €18k lets say, so would need 6.5% increase just to breakeven. If I could get an 10% higher price thats a cool ~€10k profit. Tallaght, Portlaoise, Dundalk look like good punts.

The risk of course is my timing is impeccably bad...

High Risk venture,would not recommend in view of the ECB interest rate rises.

I am putting my property on the market in November 2006 with a view to selling in January 2007.

Don't think it will crash till after may 2007, but don't want to go too close to the edge in case I fall off :P

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Or it won't crash and the next 20 years are spent by you enslaved.

Er, no. Even if it dose not crash they will still have the huge mortgage and we wont. They should have it payed of for when they retire though so they will be able to take the memory of a wasted life with them to the grave shortly afterwards. They appear to have taken leave of their sences.

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  • 302 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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