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headmelter
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that was the past.

Now that things are back to normal

(banks are lending, confidence is returning to the market, the economic outlook is rosy)

Prices are bound to rise and rise fast.

The greatest thing about buying now - is that FTBers are getting away without paying Stamp Duty.

There's never been a better time.

You guys are stuck in the past - Property is back in vogue.

are you a EA?

or did you just buy during the boom and are now in negative equity. Ha Ha

economic outlook is rosy? you are having a laugh, right?

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Ah, the good old Northern Ireland Thread ... how times have changed. Your edgy, tempestuous thrashing has lulled to a restful dream of a better future ... a future where we live in a world without EAs.

I see my local EA walking around the town, where is the swagger, where is the lexus, where is the sharp suit. Hes still trying to put a brave face on it, the poor fellow, I can see hes thinking of the glory days when they begged him for mercy, please dont put another fake bid on the house, please o please just sell me a house without treating me like I dont deserve to own one for such a rediculous price, please o please o please dont come up with a last minute mystery buyer with yet more money to snatch away my dream home. He feels a cold wind, it snaps him back to reality, having to scrimp a living selling insurance and the very ocasional house sale. He looks up and sees the pity we feel for him but all he feels is bitter, why did he not save some money during the good times, why did he buy that holiday home in Bulgaria that is now worth about the same as a decent spanish holiday, the holiday he will not be taking this year. Oh well, nature has a way of restoring the balance, such a man is not in touch with the natural balance, nature has her way with him.

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  • 2 weeks later...

Remember I said that the house prices would fall 60%-70% and take 3-7 years? Well it looks like 3 years was a little optimistic.

Now that we are 3 years into the crash I wonder what other people think will happen to house prices over the next 4 years?

from a purely charting perspective, if we make the assumption that UK hpi (nominal data) followed a basic trend line (above & below) up until the millennium and thereafter deviated abnormally from the line (esp. NI), and we now assume that hpi will return to this trend (NI having already 'worked' off the excesses of the spike), you get a chart something like this (also assuming that the UK data will fall below the line as it did post 1990).

nivsuk-1.gif

edit - red UK as a whole / blue NI (natwide nominal data)

Edited by p.p.
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I honestly don't know but my instincts say down another 20% over the next 12 months then a plateau for a year as the high end catches up with the lower end of the market.

It will all depend on the cuts and how much the banks make available to FTBs. If they stay out the market fearing for their jobs then we could potentially have 30% fall over 2 years.

Sounds far fetched I know but you did ask for opinions ;)

I don't think the pravance has much of an idea about the world of pain coming its way - the useful models of previous housing market peaks and troughs don't take into account the depression that's coming. As the sovietesque public sector is cut back, the fact that the private sector was almost entirely reliant on this will be revealed.

Good times for anyone looking to buy a house - just don't rush in too soon.

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I don't think the pravance has much of an idea about the world of pain coming its way - the useful models of previous housing market peaks and troughs don't take into account the depression that's coming. As the sovietesque public sector is cut back, the fact that the private sector was almost entirely reliant on this will be revealed.

Good times for anyone looking to buy a house - just don't rush in too soon.

don't underestimate the BoE's propensity to devalue Sterling - compare UK with RoI HP's, and then look at how much sterling has devalued against the euro since the top of the peak.

RoI is between a rock and a hard place, they have all but given up the control of their own currency and are deeply 'debt-trapped' without an apparent way out except for tough austerity measures (default the other option, but will Germany allow this?). Now, back to old Blighty, ask yourself what is the easiest option for a central bank to revive GDP whilst maintaining a low IR environment? Well, it seems the coalition are already starting to backtrack on their austerity plans, so what next?

check out this forex chart for euro-gbp and look at where it coincides with the peak of the housing market:

eurgbp.gif

as regarding the use of historical data - don't knock it, so far it has proven to show the way forward with a certain clarity that opinion alone does not carry.

edit - new chart added:

HPvsEUR.gif

Edited by p.p.
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in answer to BB's question, the current NI Avg. HP according to Natwide Quarterly data is £130877

i reckon (based on the previous data cycle) that we will see an ultimate low in the range of £100,000 - £110,000 within the next three to four years.

anyone else care to put a figure on it?

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in answer to BB's question, the current NI Avg. HP according to Natwide Quarterly data is £130877

i reckon (based on the previous data cycle) that we will see an ultimate low in the range of £100,000 - £110,000 within the next three to four years.

anyone else care to put a figure on it?

Yes ,i agree , it will probably pan out at in or around £100k in 2013

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in answer to BB's question, the current NI Avg. HP according to Natwide Quarterly data is £130877

i reckon (based on the previous data cycle) that we will see an ultimate low in the range of £100,000 - £110,000 within the next three to four years.

anyone else care to put a figure on it?

Sounds about right. approx 2003/2004 prices.

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  • 4 months later...

2013 for the nominal bottom?

I have a feeling we may not see the nominal bottom until 2 years after the end of all government support for artificially high house prices. End QE, SLS, LGS, MIS, cut HB and end schemes like co-ownership.

Though I have always said this crash would take between 3-7 years. Have any of the economic problems been fixed? No, just kicked down the road. So it looks to me like it will take 7 years for the crash to play out and houses hit bottom. Nominal bottom in 2014?

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I have a feeling we may not see the nominal bottom until 2 years after the end of all government support for artificially high house prices. End QE, SLS, LGS, MIS, cut HB and end schemes like co-ownership.

Though I have always said this crash would take between 3-7 years. Have any of the economic problems been fixed? No, just kicked down the road. So it looks to me like it will take 7 years for the crash to play out and houses hit bottom. Nominal bottom in 2014?

I can understand some of the lettering you have used but not all of it. I have discussed in otherplaces the issue of HB, or housing benfit and I am confused by the attuate. The HE calculates the rent it pays, firstly on the household make up and secondly on the market value. Quite often the amount they offer is below the market rent for a house because perhaps the couple have no children. They pay the same rent to their own Housing Associations and the Gov pays the same rent level to the HE itself on the small number of properties it still owns. Are you suggesting it cuts that too. The Housing Assocations are about 60% gov funded. They raise the rest from reserves and bank funding. they use the rent in their model to repay the 40% they put in and to manage their overheads.

Should the private sector be paid less than the Gov pays the HA's or the HE itself. They do not have the housing stock they require to house the people in need. It is cheaper to pay the private sector rent than to build houses the way they do.

Co-ownership is the most cost effective method, pound for pound that the government can house the people. On average they can house someone for 30% of the cost of producing a house themselves, with the tennent taking a equity stake in the house themselves. The government eventually gets all its money back over time.

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  • 3 weeks later...

Great quote...

Hugh Hendry: “I am dealing with things which are slow to develop. I have some young children and I recall we planted some seeds and I said to them, ‘This is going to grow into a beautiful flower.’ And every day we came out and we watered it, and after the fifth day they lost interest. They said, ‘Daddy, you’re making it up.’ And that’s the danger. If you’re pressed against the screen, watching every moment of it, you end up giving up.”

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  • 6 months later...

Bargains p.p? Really?

well, i haven't looked at the finer detail, but was surprised at the price of the below (for example) as i haven't been looking at property prices in a while now.......

http://www.propertynews.com/Property/Antrim/1195RR200397558/Tobergill-Gardens/164849831/Page1

http://www.propertynews.com/Property/Antrim/1195RR200338445/Abbeyview/164849831/Page2

http://www.propertynews.com/Property/Toomebridge/PNC568698/27-Culnafay-Road/164849831/Page1

the 2nd/3rd are in good areas, i think the first is as well

edit - OK, not so sure about the first......

Edited by p.p.
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Did you read the agents comments on the third one?

"Contrary to media coverage, houses are still selling,

including the ones which would require some work to be

completed. So our advice is to make your enquiries now."

Oh the desperation. Thank you for that Mcartney and Crawford however looking at some of the properties you have around Ballymena and Antrim on your books for years, I’d say not much is selling for you full stop.

One looks like a repo so will set the level of others on the street. I’m not seeing many if any “bargains” in my area yet. I am seeing lots of properties in BT9 at RV and 10% below and still not selling. It is all encouraging.

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  • 3 months later...

An article from September 2011. The whole thing is worth reading. It gives a good explaination of where all the cheap credit comes from, why it won't last and what the consequences will be for the UK.

The worldwide bond bubble will burst, and Britain is not prepared

How many Brits would be comfortable if their mortgage interest rates went back to 6 per cent, which was normal, even cheap, for so much of our recent history? Or 10 per cent? Trillions of pounds' worth of pension and insurance money is invested in bonds, so when they crash it will destroy wealth on a massive scale. Stock markets will fall, in some cases severely, while the great property boom will give way to a crash — as the cost of mortgages climbs permanently higher.

Edit to add: The article does not mention 'quantitative easing'. Before interest rates rise the UK will print more money to buy UK bonds. Effectively a default on our bonds by currency debasement. It is the easy way out for our politicos.

Edited by Belfast Boy
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  • 5 months later...

If anyone gets a minute and is interested in the housing market here from the Establishment perspective I would take a look at these minutes from the Committee for Social Development on the Housing Executive Review.

http://www.niassembly.gov.uk/Assembly-Business/Official-Report/Committee-Minutes-of-Evidence/April-2012/Review-of-the-Northern-Ireland-Housing-Executive/

Great information on co-ownership, waiting lists, and hosuing stock.

There's also insight into why the HE can't really support low house prices. The plan is to leverage existing stock with a £1 billion loan to pay for "upgrading" existing stock. The current stock value is estimated at £2.5 billion. They want to do this commercially as opposed to using public funds. Lower house prices = lower collateral = higher rates = Less money for HE non-jobs.

You can also see (which I think is a fairly typical attitude in NI) a complete reluctance to cutting Housing Benefit levels (as this comes direct from West Minister so why should we care and just spend it. Legal Aid anyone...). The Housing Executives cash flow (which the loans above will be paid from) is around £280 MILLION with the vast majority (especially post crazy) coming from HB.

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If anyone gets a minute and is interested in the housing market here from the Establishment perspective I would take a look at these minutes from the Committee for Social Development on the Housing Executive Review.

http://www.niassembly.gov.uk/Assembly-Business/Official-Report/Committee-Minutes-of-Evidence/April-2012/Review-of-the-Northern-Ireland-Housing-Executive/

Great information on co-ownership, waiting lists, and hosuing stock.

There's also insight into why the HE can't really support low house prices. The plan is to leverage existing stock with a £1 billion loan to pay for "upgrading" existing stock. The current stock value is estimated at £2.5 billion. They want to do this commercially as opposed to using public funds. Lower house prices = lower collateral = higher rates = Less money for HE non-jobs.

You can also see (which I think is a fairly typical attitude in NI) a complete reluctance to cutting Housing Benefit levels (as this comes direct from West Minister so why should we care and just spend it. Legal Aid anyone...). The Housing Executives cash flow (which the loans above will be paid from) is around £280 MILLION with the vast majority (especially post crazy) coming from HB.

Interesting. Thanks for posting. Some nuggets below.

Secondly, we think that we would be able to sell housing management services to landlords privately, because one of the most common complaints that we get in our district office is about non-responsive private sector landlords in our estates. The complaints are to do with private tenants who do not behave well and landlords who do not act responsibly. We believe that, as an experienced housing landlord, we could sell a housing management service to private landlords, manage those private tenants on their behalf and address a number of the issues that our residents are already facing.

Thirdly, as a large social enterprise, we think that we could work in partnership with others to create a microfinance agency to address the scourge of predatory lending that exists in our estates. Time and time again, we hear about doorstep and payday lenders who approach our tenants and charge exorbitant interest rates of 3,000% or 4,000% for short-term loans. The people who pay those sorts of interest rates cannot pay their rent, and we believe that, as a social enterprise, we should be in that space and squeeze those predatory lenders out of the market. As an NDPB and a public body, we cannot do it, but, as a social enterprise, we could.

Lastly, the other thing that we are very conscious of is that the Housing Executive is a big landlord, and four in five of our tenants live in households where no one is in paid employment. Personally, I think that that is a disaster of public service in Northern Ireland.

We are also concerned about that because, with the proposed changes in welfare reform and universal credit, one of the big issues is that you may not — it depends on what happens — get direct rent payments to the landlord. If the benefit payments for all sources go directly to the household, it is going to work for some of them, there is no doubt about it, and I am sure it will be a good thing for a lot of people, but, equally, there will be a large number of people who will find that very difficult. Our conservative estimates are that our rent arrears are likely to go up by between £10 million and £15 million a year in that sort of scenario, so we would need to look for ways in which we can help tenants to better manage their resources.

Mr F McCann: Chair, I will be brief. It was certainly interesting to listen to your presentation, Stewart. The information that was coming through yesterday about slipping back into recession will have a knock-on effect on house prices. You spoke about the average price, but, certainly in the area that I live in and represent, a former Housing Executive flat is going for £20,000. Three-bedroom houses that were going for £160,000 are now going for £40,000, so there has been a huge drop that has forced quite a number of people into negative equity right across the board.

Dr McPeake: I will briefly comment. One of the things that is unusual about the current recession compared with the previous housing market collapse in the UK is that repossession levels have been relatively low. So, a lot of lenders, because of the seriousness of the issue and the sheer numbers that are involved, have realised that it is in their interests to allow people to remain in their homes and that repossession should be an absolute last resort.

Also, we have been asked to carry out some research by the Department. Something we are particularly interested in is the whole question of mortgage rescue. Clearly that is a policy issue to be taken forward, if it is deemed appropriate, by the Minister and DSD.

Those sorts of initiatives to deal with people who are in serious negative equity usually involve some form of tenure transformation. There are a couple of examples in Scotland that our colleagues in the Department have been looking at, there have been a couple in England and there is an interesting example down South. I know colleagues in DSD are looking at those issues. Very few of the interventions are costless; they usually involve some form of public help. It is just symptomatic of the fact that there are more needs and challenges than there is resource available.

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  • 3 months later...
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How much did you buy it for, and how much was it worth in 2007.

I'm on a flying visit so I'll be brief...

To give you some idea the house I bought was only 'worth' what I was prepared to pay for it. But I paid approximately 48% less than someone else was prepared to pay for it in 2007.;)

I wouldn't say I got a bargain but I believe I got value for money... It works out cheaper than renting and the current mortgage deals, if you have a decent deposit, means a fix is possible for 5-10years. So if you're 'financially aware', planning or have a family and are prepared to set down roots, my opinion is, now is a good a time as any.

Don't forget a house is a home...not an investment.... This is the view I took anyway. B)

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