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I've been looking at the cost of property in the Belfast area and found that prices are extremely high compared to rents.

Not only would I not like to live in Northern Ireland and don't - I don't think that I would risk my money on overpriced housing stock.

BTLers would have to be crazy to make investments in NI now.

FTBers will be burnt should the economy (civil service/state subsidised) take a turn for the worst.

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I've been looking at the cost of property in the Belfast area and found that prices are extremely high compared to rents.

Not only would I not like to live in Northern Ireland and don't - I don't think that I would risk my money on overpriced housing stock.

BTLers would have to be crazy to make investments in NI now.

FTBers will be burnt should the economy (civil service/state subsidised) take a turn for the worst.

just out of curiosity, have you ever been to NI?

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I've been looking at the cost of property in the Belfast area and found that prices are extremely high compared to rents.

Not only would I not like to live in Northern Ireland and don't - I don't think that I would risk my money on overpriced housing stock.

BTLers would have to be crazy to make investments in NI now.

FTBers will be burnt should the economy (civil service/state subsidised) take a turn for the worst.

NI is a very "closed" environment - economically, politically, socially.

I think this is contributing to the hype, as most people do not look beyond the Belfast Telegraph/Irish News for their information. They have no previous experience of negative equity or a price boom to this extent, so it seems like a one way bet.

A rude awakening awaits.........

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Spoke to a mate tonite who had 2 estate agents out to value his house yesterday.

A very nice semi in south Belfast (Finaghy direction).

One valued it at £300k.

The other valued it at an astonishing £445k.

He bought it 5 years ago for £145k and has spent about £20-30k on it.

Needless to say he has another estate agent coming to value it later today.

mouse_trap.jpg

post-6554-1164768592_thumb.jpg

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It seems to me that people here currently spend what they are told. I have little doubt that he could put the price at the highest value and people would assume it to be a good number. Basically the prices people are paying is only weakly tied to the quality. If it is on the market right now, I think it will sell, almost irrelevant of the price.

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Incidentally the huge bids over asking seems less the case up at higher prices. Basically everything sub £200k is shooting miles over asking. However I look in the £500/600k range - whilst there are indeed those going significantly above asking, there are a fair few which are not getting the same interest and have offers well below asking. Anecdotal entirely but if there is a bit more difficulty at the high end, eventually it should filter down so the low end becomes a tad more sensible!

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Although it seems I may be talking to myself - the belfast telegraph had front page news and a major article about reposessions and how borrowers are pushing themselves too far...

it's ok your not talking to yourself - i (personally) didn't have anything to say in reply;

I have a bit of anecdotal for you now though.........

4 bedroom (1 box room) detached house on housing estate in randalstown went up for 189500 sold for 193000, bought in 2002 for 90

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See headline on front page of the newsletter is "Up, Up, Up" gave a groan when seen that in the distance. Apparently its GOOD for homeowners and BAD for first time buyers. Good for investors maybe, means single home homeowners have to pay more than they would to move to bigger or better house than they would have before, and they would have more in fees/taxs along the way so how is it good?

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Incidentally the huge bids over asking seems less the case up at higher prices. Basically everything sub £200k is shooting miles over asking. However I look in the £500/600k range - whilst there are indeed those going significantly above asking, there are a fair few which are not getting the same interest and have offers well below asking. Anecdotal entirely but if there is a bit more difficulty at the high end, eventually it should filter down so the low end becomes a tad more sensible!

Is it possible that the boom is confined to or more exaggerated at the lower/middle of the market? If so, it can only mean one thing - BTL is a driving factor. They are generally not interested in better properties as there is little demand for them as rentals.

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HPC Veteran,

I do think the BTL brigade is a major factor. The right to buy scheme in NI didn't pick up pace here until way after the UK, I think mostly due to the political landscape.But now that it seems much more stable people are willing to invest in property and most have bought their council house. These in turn have been bought by investors and rented out.

I have also heard numerous stories of developers with holding release of new properties several months past the initial expected completion date and the increasing the asking price from the price that was initially agreed when a deposit was put down.

The way things are going I can't see a serious correction occurring for 18-24 months, unless interest rates increase at a quicker pace than they have been. <_<

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The way things are going I can't see a serious correction occurring for 18-24 months, unless interest rates increase at a quicker pace than they have been. <_<

With current growth around 30%, that entails property rising by a further 70% before a correction - do you believe that will happen? That would mean that £100k (which is the very bottom of the ladder) would be £170k...

edit. Just in case that comes across as a snipe, it is not meant that way. It is a genuine question since your opinions have seemed well reasoned to this point

Edited by talksalot81
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Talksalot,

No I think things will flatten out, maybe 5-10% growth next year. By 2008 if interest rates have increased by say 0.5% to 1%, coupled with increased rate bills and the introduction of water charges will put added pressure on already stretched finances.

These extra expenses, for a household with a 100k mortgage could cost between £800-£1200 per anum. In anyones book I think that is a significant amount to find. Then people coming out of fixed rate deals in 2008/09 could spell the start of a significant HP 'Correction'.

(I think crash is too srong a word.)

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I wouldnt agree unfortunately it requires that the financing options remain. That probably requires that the mainland market remains stable (after all that is where most of our finance comes from) and I wouldnt like to be too sure of that.

Just for another note... UTV have their second article in as many nights. This time focusing on the release of land for development.

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Talksalot,

Can you see a correction coming, if so when? if not why?

Yes, something must be coming.

When? I wouldn't put any money on it.

At the moment we have loads of buyers and very little property. Traditionally spring time addresses this balance to an extent after a winter/Xmas low. So Q1 will be interesting for these reasons:

1) What happens if (when?) the ratio of buyers/sellers shifts?

2) Greed. Alot of people think they have made alot of money and are sooner or later going to want to move up. We are at the highest point we have ever been and Xmas might give people the opportunity to sit down and say "come on, lets try and make the move". This might well add significantly to our buyer/seller change.

In honesty, if those features dont exhibit themselves, I doubt we will see much change in Q1/Q2 2007. Q3/Q4 I think is when 'living on a shoestring' (as many have signed up to) will start to get really 'old'. I tend to hope we get IR rises (maybe up to 5.5% by end 2007), but Brown I believe will do his best to avoid this and we already know he basically can do anything he fancies. There is alot to learn from foreign lands, the dollar instability might have wider ranging consequences which might start to show in the mid-term.

Looking a bit more fundamentally - where is the money coming from to maintain the growth? Well as yet lenders are willing to keep 'upping' debts and borrowers have insufficient comprehension to realise the problem. So I think we could well see continued increases. However, at the current rate, we will really hit a wall soon. Whilst borrowers might think it ok, I do believe the lenders will wise up eventually. Another year like this year and I think the lenders will be unwilling to support. Or more to the point, young buyers will no longer have the blindest hope of getting their own house.

A few other things:

- If next year does not see the same growth and selling ceases to be 30 seconds from first brochure to first offer, people may start to panic.

- In 2 years all those people who have bought at high levels will be expecting to sell and move up. If the young buyers cannot buy said peoples houses... there wont be any moving up.

The situation is really too complex to analyse in time. I am absolutely positive that buying is a very costly alternative (cf. renting), the affordability for young FTB's is awful and the rish is horrendous. That guarantees nothing other than I will not be getting involved unless something changes (or rather, I simply cant get involved).

Edited by talksalot81
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Talksalot,

Thankyou, a very reasoned reply.

"I tend to hope we get IR rises (maybe up to 5.5% by end 2007), "

I think a 5.5% IR is likely to be with us by the summer and a sweat for more icreases in the autumn. I wouldn't be surprised if we see 6% by the end of 2007.

The BTL brigade will be servicing properties they are renting out, rental yield will not meet the required mortgage payments, quite a few of these will be off loaded. I know of one guy who is servicing a property by £200 per month but says he is happy to do this for another year or two as he feels HPs will continue to rise by 10% pa. It will be interesting if prices slow up by the summer what decisions the BTLers make. With a bit of luck we may see a significant increase in properties for sale.

"Q3/Q4 I think is when 'living on a shoestring' (as many have signed up to) will start to get really 'old'."

By Q1 and Q2 2008 the fixed rates will be finishing and the shoestrings may be over extended. if there is an increase in the number of more expensive properties on the market it may mean there is more competition for the cheaper ones as people may be looking to downsize.

Just to add,

My mate is putting his house on the market after christmas for £445k for a few months to see how it goes..........I'll be watching with interest. :unsure:

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Howdy peeps,

You might be interested in this blog http://daftwatch.atspace.com/

It shows all the listings on Daft.ie (including NI)

Granted there are few listings from NI but some nonetheless. On the right hand side there are listings by county...have a look.

Southern money is looking for a home and there are plenty of Nordies working in Dullbin these days.

Looks like a combination of UK hype and €urocash combining to give y'all the ride of your life.

Enjoy!

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Needle,

Thanks very much for the link. I don't know whether to laugh or cry. It would appear some southern speculators have been very active in NI so as their market teeters on the brink more speculation may have come north. There could after all be a landslide in prices.

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Anyone got any opinions on tonights BBC news report?

"Stock of housing executive homes is dwindling, the agency has sold 100,000 homes to its tenants leaving just 90,000."

Umm, stop selling them perhaps? What is the point in building the things just to give them away cheap and create 100,000 more ladder climbing property owners that will make the situation worse?

Edited by Bakkah
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