Realistbear Posted October 25, 2006 Share Posted October 25, 2006 (edited) http://today.reuters.co.uk/news/articleinv...AND-HOUSING.XML Irish house price growth slows in Sept - survey Wed Oct 25, 2006 10:28 AM BST139 DUBLIN, Oct 25 (Reuters) - The pace of house price growth in Ireland slowed for the fourth month running in September, a survey published on Wednesday showed, suggesting interest rate increases by the European Central Bank are having an impact. All the poisons lying in the mud are beginning to hatch out. Edited October 25, 2006 by Realistbear Quote Link to comment Share on other sites More sharing options...
PropertyGuru Posted October 25, 2006 Share Posted October 25, 2006 when does it go yoy neg? Quote Link to comment Share on other sites More sharing options...
Realistbear Posted October 25, 2006 Author Share Posted October 25, 2006 when does it go yoy neg? If it follows the pattern of SoCal it will take at least 9-12 months from the first decline in the rate of growth which points to about June-July next year. On the other hand, if something catastrophic happens it could happen a lot sooner. Panic, for example. Quote Link to comment Share on other sites More sharing options...
Nationalist Posted October 25, 2006 Share Posted October 25, 2006 YoY is a very laggy indicator, to go negative all the gains of the last 12 months have to be wiped out. So far they don't even have a MoM decline. Quote Link to comment Share on other sites More sharing options...
29929BlackTuesday Posted October 25, 2006 Share Posted October 25, 2006 All news in the right direction - and I might add, WITHOUT A TRIGGER!! Imagine what we'll see WITH a trigger! It's only a matter of time... Quote Link to comment Share on other sites More sharing options...
squeek Posted October 25, 2006 Share Posted October 25, 2006 If it follows the pattern of SoCal it will take at least 9-12 months from the first decline in the rate of growth which points to about June-July next year. On the other hand, if something catastrophic happens it could happen a lot sooner. Panic, for example. And what if it follows the pattern of Britain, how long was it after the first decline in the rate of growth did we have the crash? Oh yeah, we're still waiting years after. The Ireland market might crash, and it might go negative, but don't post a link to an article about how much it's gone up: Prices rose 10.9 percent in the first nine months compared to 9.3 percent for the whole of 2005 and 5.4 percent for the same period last year. and try to make out it's all bad news. There's so much spin on this thread it'll be dizzy for weeks. Just because a lot of the press spin the news to look good doesn't mean you should spin it to look bad. Lets have some measured reporting of stats and figures instead. Quote Link to comment Share on other sites More sharing options...
Halliron Posted October 25, 2006 Share Posted October 25, 2006 (edited) http://today.reuters.co.uk/news/articleinv...AND-HOUSING.XML Irish house price growth slows in Sept - survey Wed Oct 25, 2006 10:28 AM BST139 DUBLIN, Oct 25 (Reuters) - The pace of house price growth in Ireland slowed for the fourth month running in September, a survey published on Wednesday showed, suggesting interest rate increases by the European Central Bank are having an impact. All the poisons lying in the mud are beginning to hatch out. You posted similar data swith a similar headline this time last month, and I'm goign to post the same reply: That looks like a soft landing. A crash doesn't have a nice smooth transition from mom increases to decreases, in fact it happens quite suddenly. Often growth is accelerating just before a bubble bursts. *edit* I've just noticed that you're now predicting at least 7 more months of MoM increases in Irealnd. That's quite bullish coming from you. I'm glad that you're capable of changing your mind when the facts change. Edited October 25, 2006 by Halliron Quote Link to comment Share on other sites More sharing options...
Realistbear Posted October 25, 2006 Author Share Posted October 25, 2006 You posted similar data swith a similar headline this time last month, and I'm goign to post the same reply: That looks like a soft landing. A crash doesn't have a nice smooth transition from mom increases to decreases, in fact it happens quite suddenly. Often growth is accelerating just before a bubble bursts. All crashes begin slowly in the beginning. Remeber, the EAs were all calling a soft landing in the US and look what is happening. Bubbles are never followed by soft landings but by phenomena that resemble more of a pop. And what if it follows the pattern of Britain, how long was it after the first decline in the rate of growth did we have the crash? Oh yeah, we're still waiting years after. The Ireland market might crash, and it might go negative, but don't post a link to an article about how much it's gone up: and try to make out it's all bad news. There's so much spin on this thread it'll be dizzy for weeks. Just because a lot of the press spin the news to look good doesn't mean you should spin it to look bad. Lets have some measured reporting of stats and figures instead. Here are some stats for you: http://uk.news.yahoo.com/061025/218/gpox5.html Looking specifically at September the price of houses nationally rose by 0.7% during the month, down from the rate of 1.0% recorded in August this year and the 1.1%, 1.2% and 1.6% recorded in July, June and May respectively. Bubbles have to start the deflation process somewhere. Its probably going to take a few months to build momentum. Quote Link to comment Share on other sites More sharing options...
OzzMosiz Posted October 25, 2006 Share Posted October 25, 2006 Sentiment will drive the deflation too. Don;t forget that. It may take a while for people to fully realize whats going on. Then bang! Quote Link to comment Share on other sites More sharing options...
ARIMA Posted October 25, 2006 Share Posted October 25, 2006 Sentiment will drive the deflation too. Don;t forget that. It may take a while for people to fully realize whats going on. Then bang! 4 monthly nominal price declines in a row is my landmark. Same for UK. Quote Link to comment Share on other sites More sharing options...
HOwner Posted October 25, 2006 Share Posted October 25, 2006 Is this the crash that has been here since January 2005? http://www.housepricecrash.co.uk/forum/ind...c=4617&st=0 Quote Link to comment Share on other sites More sharing options...
Realistbear Posted October 25, 2006 Author Share Posted October 25, 2006 Is this the crash that has been here since January 2005? http://www.housepricecrash.co.uk/forum/ind...c=4617&st=0 One and the same. Don't forget what happened in the Great Crash of 1989-96. Very very slow in the beginning with rises and falls as momentum built toward the freefall of the early 90's. 2005 was the warning bell--Gordon's pre-emptive strike of telling the BoE to lower the rates put off the day of deliverance until a year later. Gordon can run but he cannot hide--his policies will all come home to roost. Quote Link to comment Share on other sites More sharing options...
Jason Posted October 25, 2006 Share Posted October 25, 2006 Is this the crash that has been here since January 2005?http://www.housepricecrash.co.uk/forum/ind...c=4617&st=0 Everyone will be continuing to debate whether the crash is happening or not. The VIs will fight tooth and nail to say all's well. It will only ever be accepted that a crash happened after the event, when the VIs can give negative comments on past house prices without affecting future house purchases; then they can look forward to their new forthcoming income stream. I'm not saying whether a crash is happening or not in Ireland, I aint got a clue.... Quote Link to comment Share on other sites More sharing options...
HOwner Posted October 25, 2006 Share Posted October 25, 2006 So the "problems" in Ireland are a sign that the crash, that was apparently already here in January 2005 (which was apparently a warning for the other crash that happened a year later in Jan 2006), is coming.. Doesn't make much sense to me, but sure it must do to someone! Quote Link to comment Share on other sites More sharing options...
Guest wrongmove Posted October 25, 2006 Share Posted October 25, 2006 Reuters: Ireland Are Down For The 4th Month In A Row, HPC is inching toward our shores! Man the lifeboats. There's a funny smell in here. Sniff.... sniff.... is it dogsh1t?... no.... is it cowsh1t?..sniff....snifff...no... Ah, it's bullsh1t !! The entire article (my highlighting) The pace of house price growth in Ireland slowed for the fourth month running in September, a survey published on Wednesday showed, suggesting interest rate increases by the European Central Bank are having an impact. The permanent tsb/ESRI House Price Index showed house prices in Ireland rose by 0.7 percent in September, down from 1 percent in August and 1.1 percent the month before. But even though supply has now largely caught up with strong demand for housing, the rise in house prices so far this year is still above what had been expected. Prices rose 10.9 percent in the first nine months compared to 9.3 percent for the whole of 2005 and 5.4 percent for the same period last year. Ireland's housing market has been booming for more than a decade thanks to a thriving economy and rising immigration. Its strength has been a rising source of concern for the central bank, which is worried about rising debt levels. "The trend of slowing growth in national house prices has continued for the fourth straight month, following the recent series of ECB rate increases," said permanent tsb Head of Marketing Niall O'Grady. "I expect this gradual slowdown to continue and price growth nationally to finish the year at 12-13 percent." In the 12 months to September 2006, the growth in national house prices was 15.0 percent, down from 15.4 percent in the year to August, but still more than twice the 6.2 percent recorded in the twelve months to September 2005. The average price paid for a house nationally in September of this year was 308,179 euros ($386,600). Crash bang bo11ox !! Prices rose 0.7% in September alone!! Real prices are up, nominal prices are up - it must be unreal prices that are down for the 4th month in a row. My VI is in a crash also (FTB) but this is getting ridiculous ! At the risk of being non-PC, is an Irish crash one where prices rise at 12% a year ? Quote Link to comment Share on other sites More sharing options...
HOwner Posted October 25, 2006 Share Posted October 25, 2006 The average price paid for a house nationally in September of this year was 308,179 euros ($386,600). Crash bang bo11ox !! Prices rose 0.7% in September alone!! Maybe that crash noise is realistbear's credibility. Quote Link to comment Share on other sites More sharing options...
Duplex Posted October 25, 2006 Share Posted October 25, 2006 I think that its safe to say that the bubble has popped in Ireland. Inventories of homes for sale have risen by by 30-40%. Auction clearance rates have fallen to 20-30%, there is plenty of anecdotal evidence that asking prices are being dropped. Having never had a property market bubble its difficult to say how the Irish market will react to the newly revealed reality. Quote Link to comment Share on other sites More sharing options...
boomorbust Posted October 25, 2006 Share Posted October 25, 2006 (edited) All news in the right direction - and I might add, WITHOUT A TRIGGER!! Imagine what we'll see WITH a trigger! It's only a matter of time... Actually there was a trigger, the slowdown had begun but worsened when a minister hinted that there could be stamp duty cuts in the December budget. Edited October 25, 2006 by boomorbust Quote Link to comment Share on other sites More sharing options...
Green Bear Posted October 25, 2006 Share Posted October 25, 2006 December 2005/Spring 2006 seems to have seen the last surge in prices in the Republic of Ireland, before the mania topped about May/June, in appears that FTB's and others were panicked into buying houses on the basis that ECB interest rates were going up and they would never be able to afford to get on the ladder if they did not buy then as the price of a house would be beyond them. Also some FTB's have bought apartments and houses that don't suit them, on the basis that they will be able to sell after a period of five years and trade up, this was from a survey carried out in late 2005. Interest rates did go up in 2006 and the amount FTB's can borrow has decreased (IFSRA rules on stress testing potential borrowers is current interest rate +2%). Due to the spring surge in prices two things happened, existing homeowners decided to put their properties on sale expecting yet higher prices thus increasing supply, and more potential FTB's gave up and decided to wait it out due to higher interest rates and being priced out. Then it appeared to the popular imagination that the insiders were getting out as the banks sold their premises (to raise more funds) and serveral prominent estate agencies sold up to British companies, some estate agency bosses even sold their houses for top price. The first signs of a change in the market came during summer 2006, as the auctioneers reported that no-one was even turning up to some auctions and most houses were not selling, this was put down to the summer holidays and EA's confidently predicted then business would resume during the Autumn selling season, except somebody forgot to tell the buyers. The current excuse from the EA's is that buyers are holding off until the after the December 2006 budget on the expectation that stamp duty will be removed for first time buyers or the government will change taxation policy as there is an election coming up next year and most SSIA's will mature in Spring 2007. In August 2006 several leading newspapers in Ireland ( the Sunday Independent, the Sunday Business Post and The Sunday Times) went really bearish on property and the general public began to read the message. Meanwhile the inventory for sale continues to increase. Evidence for this can be found in the bigger than ever property supplement of Thursday's Irish times newspaper (Ireland's leading property porn peddlar) and leading property sites myhome.ie and daft.ie . Property is still selling but at lower volumes and sellers are starting to lower their asking prices by as much as 20% so far compared to the beginning of the year. Most of the houses put up for auction are not from 'motivated sellers', hence we see them being put back on the market at the increased price the seller was expecting rather than below the advised minimum value price in the auction. These houses will sit there until the drop their prices or the sellers die, thus leading to the inventory build up. Also potential FTB's are reporting that EA's attitude toward them has changed over the Summer with calls being returned. Employment in the construction sector is the highest ever per the August 2006 CSO statistics, with at least 92,000 units expected to be completed this year. Couple this with the fact that census enumerators found 275,000 empty houses, + 30,000 holiday homes in April 2006 and its not hard to see what happens next. Evidence that the potential FTB is increasingly sitting on the fence can also be seen in AIB banks €2,000 offer to FTB's who take out a mortage before December 2006, and the other banks start trying to grab each others existing mortgage customers. Why there can be no soft landing (prices rising in line with CPI) for the Republic's property market: We have record inventory buildup. We have a record vacancy rate per the 2006 census We have increasing interest rates in a short period of time, with at least one more rise to come. Higher utility bills (electricty + gas) Static wage growth (HPI has averaged 14.9% over the past 10 years in nominal terms) Huge speculative plays (estimated 40% of the market in 2005) based on capital appreciation and not rental yield. Housing speculation in other countries is based on MEWing Irish property (little attention paid to rental yield). Very high proportion of native working population employed in the construction sector and dependent industries. High number of people employed in the public sector. Wages in the public sector are higher than the private sector. Government dependant on the construction sector for taxation revenue growth. Construction sector dependent on public's ability to borrow more money for growth. Irish stock exchange dominated by banking and construction. Decline of the manufacturing sector, without immigration both the tourism and manufacturing sector would be in sharp decline. Private sector debt thats heading for 190% of GDP. (GDP is skewed by earnings of the multinationals) Ireland's baby boom that peaked in 1980 is settling down now, the birthrate dropped dramatically from then on. The above factors alone will bring about an end to the boom, now if there is an American led recession... Quote Link to comment Share on other sites More sharing options...
Chomp Posted October 26, 2006 Share Posted October 26, 2006 Oustanding post Green Bear, glad to bump it up. Many of your arguments are supported anecdotally by an EA posting on an Irish forum earlier today: "I am an estate agent in Dublin. I can definitely see a marked change in the market. Properties are just not shifting these days. The phones have stopped ringing. The buyers are now being chased whereas 2 months ago they were just ignored because they were made to do all the chasing. There is a glut of properties on the market and we get more and more listings each day. But still the phones don't ring. Any offers that we get are well below the asking price. This was unheard of in the past. Sellers are being asked to drop their prices and I think this is just the start. I was selling property in Australia when their market topped after ten years of boom. Ridiculous prices but nowhere near as crazy as here." http://www.askaboutmoney.com/showthread.ph...10&page=365 ........... You rightly point out the importance of the construction sector to the overall economy in your post. But I think there is a slightly unexpected anomoly in this. Namely, that if construction tanked, the effects on the country would be disproportionately smaller than construction's current economic importance would suggest (something like 18% of people are employed in construction and related industries). This is primarily because it would lead to loads of immigrants leaving the country (hello 2012 Olympics!). This would soften the unemployment carnage that one might have expected. I think the majority of Irish people within the 18% would still find work or re-train. The immigrants leaving would be a substitute for mass unelployment. And a juicy side effect of all this: Fewer immigrants = fewer renters. Snowball time. Immigrants leave, FTBs sit out, IR's rise etc. etc. So the losers would be the govenement coffers (which are obscenely overflowing anyway), the developers, EA's, late-comers to the BTL party, over-stretched mortgage holders and immigrants. But the effect on the economy as a whole (especially in terms of general unelployment and the ability of a majority of people still to pay their motgages) need not be that catastrophic. Massive HPC + minimum damage to the rest of the economy? Now that would be HPC Heaven. Quote Link to comment Share on other sites More sharing options...
Green Bear Posted October 26, 2006 Share Posted October 26, 2006 But I think there is a slightly unexpected anomoly in this. Namely, that if construction tanked, the effects on the country would be disproportionately smaller than construction's current economic importance would suggest (something like 18% of people are employed in construction and related industries). This is primarily because it would lead to loads of immigrants leaving the country (hello 2012 Olympics!). This would soften the unemployment carnage that one might have expected. I think the majority of Irish people within the 18% would still find work or re-train. The immigrants leaving would be a substitute for mass unelployment. Employment is still growing this year (unemployment is also creeping up at the same time). While it is true that some non-nationals will leave to pursue their long term goal of setting themselves up at home, (they do this all the time), it is also true thata lot of the people who work here have little if anything to return to in their home countries, this is especially true if you are of Russian extraction from countries like Latvia and Lithuania, where you are actively discriminated against, they are here to stay. Also when you have taken the time to learn English, its hard to throw away that investment and move to a country like Germany or France should there be an upturn there. Source: Finfacts.com ; AIB Economic Research Another important point is that construction is not where the majority of non nationals work, since wages tend to be highest in construction and the public sector, most of the native Irish workforce employment growth has been since here since 2000. Once housing values stop rising and start falling then the amount people can MEW (the biggest portion by volume of mortgages last year were top-mortgages) decreases and many find themselves with negative equity if they try to sell. Also the huge speculative element in the market disappears overnight as capital appreciation is no longer there and the focus for investors switches back to rental yields, the professional investors will eat the BTL brigade who are undercapitalised (a real bear market). This has a knockon effect as there is less rental supply, rents will increase. The original intention was to limit the length of time foreign workers could stay in Germany: Once this allotted time had run out, the foreign workers were supposed to return to their home countries, to be replaced by new ones (“rotation principle”). But starting in the late 1960s, a growing number of foreign workers stayed in Germany permanently. This served the interests of employers, who wanted to keep their experienced workers, and of the workers themselves, who increasingly came to regard Germany as their home and who wished to take advantage of the better income opportunities and existing infrastructure for the long term. And the foreign workers brought more and more family members with them to Germany. more>>> The “rotation principle” http://www.zuwanderung.de/english/1_anwerbung.html Many people in West Germany also thought the non-nationals would go home after the boom of the 1950's, 60s' but that did not happen to the extent they predicted, they failed to realise that you are also importing peoples dreams and after many years their social lives and families rotate around their host country, so there is no desire to return home. Quote Link to comment Share on other sites More sharing options...
sithclone7 Posted October 26, 2006 Share Posted October 26, 2006 Another factor that may speed the Irish crash is energy usage. A lot of Ireland uses coal and oil rather than gas due to the small gas distribution network. This means they tend to buy the fuel as they need it, And pay for it straight away rather than get a bill sometime later next year. This means a cold snap will dry all the spare cash (Or credit card limit) and they are so in debt this is really going to hurt. Ireland will follow America not the UK. Quote Link to comment Share on other sites More sharing options...
goldeneye977 Posted October 26, 2006 Share Posted October 26, 2006 And what if it follows the pattern of Britain, how long was it after the first decline in the rate of growth did we have the crash? Oh yeah, we're still waiting years after. The Ireland market might crash, and it might go negative, but don't post a link to an article about how much it's gone up: and try to make out it's all bad news. There's so much spin on this thread it'll be dizzy for weeks. Just because a lot of the press spin the news to look good doesn't mean you should spin it to look bad. Lets have some measured reporting of stats and figures instead. I could not have agreed more on this. I have tried telling the same thing to the people on this forum several time - try to gather courage to look at the facts in the eye - otherwise the only people who will be hurt will be us! If the facts favor us, great! But if they don't we need to think about alternate strategies rather than living in self-denial and delusion. Everytime a HPI is mentioned, you find a barrage of posts here claiming that its VI. Then people start pointing at markets like Sydney's and to articles about the impending US doom and claim that the same is about to happen in UK. Its funny - in the US the realtors take heart from what happened in the UK and OZ to come to a conslusion that there will be at worst a soft landing. In fact, nobody here in the US even hints at a crash in UK. As far as the news agencies are concerned, UK has already had a soft landing and may pro-RE news agencies wish the same for the US. Alan Greenspan these days keeps telling people that the UK has had a bubble and the market has survived to tell the tell, so people in the US should be optimistic. Unfortunately, when the bubble will unwind is anybody's guess. And the *&%$#% govts are protecting the bubble which they engineered. Bearnanke is done with increasing IR this year at least - most probably because of the Nov 7 election and since 2008 is a presidential year, I doubt if Bernanke will do anything drastic with the rates. The US housing I feel has reached a tipping point. One or two more IR increases and whoosh!! But Bernanke won't let that happen! Quote Link to comment Share on other sites More sharing options...
Green Bear Posted October 26, 2006 Share Posted October 26, 2006 Another factor that may speed the Irish crash is energy usage. A lot of Ireland uses coal and oil rather than gas due to the small gas distribution network. This means they tend to buy the fuel as they need it, And pay for it straight away rather than get a bill sometime later next year. This means a cold snap will dry all the spare cash (Or credit card limit) and they are so in debt this is really going to hurt. Certainly rises in energy have impacted the public this year, but there has been a dramatic move from coal towards Gas and Oil (see page 27 of the permanent tsb House Price Index 10 Year Review), further grant assistance is available to move to 'greener' home heating products, wood chip pellet stoves are all the rage at the moment. Wind turbines are beginning to dot the landscape and the NIMBY's are up in arms. Controversial wind turbines on the horizon for Bray http://www.unison.ie/irish_independent/sto...;issue_id=14749 [free registration required] Under the scheme customers can avail of a grant of €4,200 to buy a wood chip or pellet boiler, bringing the technology closer in line with oil and gas systems in terms of cost. Payback on investment is also achieved in a shorter period of time, according to Joe Durkan, programme manager on the Greener Homes Scheme. "A typical 1,500 sq ft house is spending something between €1,500-€2,000 a year on oil. That would be a fill of 2,000-3,000 litres at 60 cents a litre. "You would probably need about five tonnes of pellets at €170 per tonne if you buy in bulk. So, you're looking at fuel costs of under €900 a year for pellets which represents a saving on a typical house of between €650 and €1000 a year in terms of fuel." Those sorts of savings would guarantee a payback on your investment of around five years when the grant is also taken into account, according to Mr Durkan. The chips are down http://www.unison.ie/irish_independent/sto...;issue_id=14493 [free registration required] Massive hikes in electricity and gas bills spark outrage http://www.unison.ie/irish_independent/sto...;issue_id=11376 [free registration required] Quote Link to comment Share on other sites More sharing options...
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