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Sunday Business Post

OECD: No crash threat to Irish housing market

19 February 2006 By Eamon Quinn

A major international think-tank is preparing to deliver a glowing report on the Irish economy, in which it will say there is no threat of a housing market crash over the next two years.

The Organisation for Economic Cooperation and Development (OECD) will say in its report, to be published in the next two weeks, that the economy will continue to grow rapidly.

The report is one of the most positive reports on the economy ever delivered by the Paris think-tank. It is prepared every two years and its forecasts up to the end of next year will come as a boost to the Fianna Fail-led government, as it prepares for an election next year.

The report will predict that house price growth will continue and that the housing market is not a bubble waiting to burst. Significantly, it will suggest that house price inflation could grow by up to 8 per cent in each of the next two years, without raising the risk that prices will collapse.

The economy will grow by 5 per cent this year and next, and is expected to continue to draw on immigrant workers to fuel a surge in Irish incomes.

The OECD will state its view that house prices, which have grown quickly along with other eurozone countries such as Spain, France and Italy in recent years, can be justified by the fundamental strength of the local economy.

Factors such as low interest rates and the growing population in Ireland have supported the huge rise in house prices in the past.

If the OECD forecasts are realised, the average cost of a Dublin house would climb to €430,000 by the end of next year. The OECD predicts that house price growth will slow, but it has ruled out the risk of a sudden collapse in the market.

Despite the rise in oil prices, the report will predict little risk of consumer price inflation sparking as it did during the height of the boom in 2000. Inflationary pressures are not building up, despite oil price rises and high growth rates, the report will say.

The OECD will also say that the Special Savings Investment Accounts (SSIA) pose only an outside risk for stoking inflation if consumers spend more of the €16 billion SSIA windfall than is expected after they start to mature in May.

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Sunday Business Post

OECD: No crash threat to Irish housing market

19 February 2006 By Eamon Quinn

A major international think-tank is preparing to deliver a glowing report on the Irish economy, in which it will say there is no threat of a housing market crash over the next two years.

The Organisation for Economic Cooperation and Development (OECD) will say in its report, to be published in the next two weeks, that the economy will continue to grow rapidly.

The report is one of the most positive reports on the economy ever delivered by the Paris think-tank. It is prepared every two years and its forecasts up to the end of next year will come as a boost to the Fianna Fail-led government, as it prepares for an election next year.

The report will predict that house price growth will continue and that the housing market is not a bubble waiting to burst. Significantly, it will suggest that house price inflation could grow by up to 8 per cent in each of the next two years, without raising the risk that prices will collapse.

The economy will grow by 5 per cent this year and next, and is expected to continue to draw on immigrant workers to fuel a surge in Irish incomes.

The OECD will state its view that house prices, which have grown quickly along with other eurozone countries such as Spain, France and Italy in recent years, can be justified by the fundamental strength of the local economy.

Factors such as low interest rates and the growing population in Ireland have supported the huge rise in house prices in the past.

If the OECD forecasts are realised, the average cost of a Dublin house would climb to €430,000 by the end of next year. The OECD predicts that house price growth will slow, but it has ruled out the risk of a sudden collapse in the market.

Despite the rise in oil prices, the report will predict little risk of consumer price inflation sparking as it did during the height of the boom in 2000. Inflationary pressures are not building up, despite oil price rises and high growth rates, the report will say.

The OECD will also say that the Special Savings Investment Accounts (SSIA) pose only an outside risk for stoking inflation if consumers spend more of the €16 billion SSIA windfall than is expected after they start to mature in May.

whatever.

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Sunday Business Post

OECD: No crash threat to Irish housing market

19 February 2006 By Eamon Quinn

A major international think-tank is preparing to deliver a glowing report on the Irish economy, in which it will say there is no threat of a housing market crash over the next two years.

The Organisation for Economic Cooperation and Development (OECD) will say in its report, to be published in the next two weeks, that the economy will continue to grow rapidly.

The report is one of the most positive reports on the economy ever delivered by the Paris think-tank. It is prepared every two years and its forecasts up to the end of next year will come as a boost to the Fianna Fail-led government, as it prepares for an election next year.

The report will predict that house price growth will continue and that the housing market is not a bubble waiting to burst. Significantly, it will suggest that house price inflation could grow by up to 8 per cent in each of the next two years, without raising the risk that prices will collapse.

The economy will grow by 5 per cent this year and next, and is expected to continue to draw on immigrant workers to fuel a surge in Irish incomes.

The OECD will state its view that house prices, which have grown quickly along with other eurozone countries such as Spain, France and Italy in recent years, can be justified by the fundamental strength of the local economy.

Factors such as low interest rates and the growing population in Ireland have supported the huge rise in house prices in the past.

If the OECD forecasts are realised, the average cost of a Dublin house would climb to €430,000 by the end of next year. The OECD predicts that house price growth will slow, but it has ruled out the risk of a sudden collapse in the market.

Despite the rise in oil prices, the report will predict little risk of consumer price inflation sparking as it did during the height of the boom in 2000. Inflationary pressures are not building up, despite oil price rises and high growth rates, the report will say.

The OECD will also say that the Special Savings Investment Accounts (SSIA) pose only an outside risk for stoking inflation if consumers spend more of the €16 billion SSIA windfall than is expected after they start to mature in May.

Wasn't the OECD the genius that praised Gordon Brown for his handling of the UK economy? I think we know where to file the report.

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Last week the Government released figures on employment creation in the last quarter showing that 50% of new jobs were created in either construction or retail. The Irish economy is the housing bubble, no bubbble no economy.

PS Why I wonder why does the SBP not discuss Ireland’s woeful R&D performance, it’s pitiful and shrinking venture capital sector, its dramatic fall down the competitiveness tables,etc.?

These powerhouses (MNC’s) are the key drivers of the Irish economy.

• 90% of industrial exports are made by foreign owned firms

• Most of the products we manufacture are designed elsewhere

• The bulk of our exports are marketed/sold by organisations based outside Ireland

• Ireland's industrial base relies on 149,654 jobs in 1,273 foreign-owned companies and on 147,895 jobs in 7,390 Irish firms. The service sector, with 240,000 businesses registered for VAT, employs about two-thirds of workers and accounts for 70% of GDP.

Celtic Tigger

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The momentum of the buying frenzy is still a powerfull force driving up prices in Ireland. Buyers are frantic that they are not going to get in and will have to pay 25% more next year. This kind of panic buying will drive the economy until something restrains it and at the moment there is no restraint as banks are handing out money by the bucketfull to allcomers--even 125% loans. As the rest of the world goes into a sharp correction Ireland may well be all alone in the hyper-inflation property stakes.

Just a little scary I would say. :blink:

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As a slight side issue, there was an article in the economist recently which discussed how best to measure a countries economy citing Ireland as an example. Gross Domestic Product in Ireland is very high, among the highest in the world, but GDP doesn't take into account money flowing in and out of a country. Therefore Gross National Product is sometimes better and because most of the profit in the Irish economy goes abroad the GNP is no higher the the european average. So all this talk of the rich Irish being able to afford high house prices is, well, ****

Edited by FollowTheBear

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Wasn't the OECD the genius that praised Gordon Brown for his handling of the UK economy? I think we know where to file the report.

Surely the proof in this pudding is whether or not house prices crash in Ireland within the next two years. It may take two years, but we will know whether or not this is BS.

Billy Shears

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The OECD are probably right.

The obscene rate of credit growth in Ireland will support the market for a while yet. The more people borrow the higher prices will go. And, the higher prices go, the chances that we will see a soft landing get ever slimmer.

Ireland will soon be the most indebted nation in the Eurozone, with private sector still growing at around 30% per annum!!!

Most people with an ounce of common sense can now see where this is going. The problem is, those same people are either in denial and/or are convinced that they will get out before it all goes wobbly.

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Hi All,

I have just posted this message on an Irish forum, but would like to get your take on things...

After reading yesterday's Sunday Business Post, I must say that I feel a serious underlying conspiracy between the government, banks and all others with a vested interest in property prices in this country, trying to prop things up with media propaganda. Tell the common folk that things still look good and they will believe it.

(Aside: I smirked when I read that this particular report will prove positive for Fianna Fail, who are preparing for election next year).

The OECD state that the Irish market is not a bubble waiting to burst!!

Well thats fine then, nothing to worry about folks.

As I meandered further through the paper I came across mentions of more reports delivered by the OECD (in smaller print at the bottom of some centre page) claiming that "IF" things do go south in Ireland it will be devastating.

So, it depends on which report from the OECD you read to determine what the mood is.

They are saying in reality that, one way of looking at it things look good, on the other hand things could be devastating. The Newspaper chose the more positive message to splash across its front page - leading essentially to positive feeling for it's property investor reader and in turn helping to keep the mood bullish in terms of property.

Who are the OECD anyway? - what about the report last week from the ERTE saying that everyone is going to make millions, or the report from the POIF saying things are crashing now - the R.I.D and the C.U.P as well as the P.U.K and O.F.F are all saying buy buy buy.!!!! I have never seen so many acronym organisations come out of the woodwork - I think half of them are made up by banks, government agencies etc. as vehicles for getting the positive/negative news across.

Do people not see that fundamental economics tells us that Ireland's economy is a bit unrealistic and could be in a bit of trouble. I am no expert but I get worried when I read general statements like "The housing market will continue to grow therefore the economy will continue to grow"...surely this is the wrong way around or am I mistaken?? - In a healthy economy should the housing market determine the whole economic growth - surely there are a lot more major factors to consider - both internal and external??

The common person on the street knows that things are a little unsustainable...and the media are trying to throw him/her off the scent. Trying to keep the mood positive - because it is mood and not interest rates,US current account deficits etc. that can ultimately bring on a swing in the value of stocks and assets.

If the common man/woman starts to feel things are a little dodgy, he/she will pull out leading to a flock of sheep effect - the public en masse will pull out and the price will fall....zerfor zey need to be told zat thinks vill remain positif.

Looking back on our recent property history I ask myself "Has there ever been such a way for the ordinary Joe to make hundreds of thousands of euros for doing sweet FA ? " - it seems to me that when the average guy on the street can make maybe a million or more by simply buying a house(s) and letting it sit there for a few years- things are a little off.

It is easy money, and I know because I have made some of that money...and I had no clue in the world about property.

It is like what was said about the great Wall street crash, when the fool on the street gets wind of easy ways to make money on the stock exchange, it is time to get out.

But the fool on the street has already made fortunes on the Irish property market and still no-one is 'getting out' - what gives?

http://www.sbpost.ie/post/pages/p/st...987-qqqx=1.asp

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Good post and welcome to HPC, Jimmy6000.

After reading yesterday's Sunday Business Post, I must say that I feel a serious underlying conspiracy between the government, banks and all others with a vested interest in property prices in this country, trying to prop things up with media propaganda. Tell the common folk that things still look good and they will believe it.

I too get the same feeling, because so many in government and business are neck-deep in the property game. Now, with interest rates rising, some are maybe thinking of off-loading a little - if they haven't started already).

Now, if you had a big property portfolio to sell over the next 18 months, what sort of 'property news' would you like to see in the media? <_<

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If the OECD forecasts are realised, the average cost of a Dublin house would climb to €430,000 by the end of next year

Average house in Dublin €430,000?!! :blink:

And the average salary in Dublin I would guess is €30-35k - so thats about 13 times average salary :o

I just dont understand where the money is coming from to allow these multiples?? Ok lenders have relaxed their lending criteria, but even so thats a serious amount of cash to find.

It'll get to the point where people just about finish off paying their mortgage, then they die and the house is subject to 40% inheritance tax!!

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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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