When Will Northern Ireland Property Prices Stop Falling?

[getdoon_weebobby]

£125 is more than affordable for a young couple with a deposit and an average house in my eyes is a semi detached, somewhere around this depending on area etc is exceptional value however it is important to remember 2 things

1) Very few will sell their house for this or below asthey know their houses true value in normal times is more than figure stated.

2) There are so many developments were people went in and paid more than this and very few if any will or can sell cos of negative equity.

But what do i know? i know this post will get slated however remeber that the same people who post here will post here on the recovery and will have missed the boat again?

How much would u pay for a semi d in a good provincial town???? Remember that figure and if u see one at that remember this is what u stated and buy it........... that is if u have a deposit saved up............

Interest rates are at all time lows and in terms of afordability 125 is very affordable for a young couple on average wages with a deposit....... if property goes too NI 2003 levels the economy will be that screwed that you may not have a job.

People should be aware of a bargain when they see it. With low interest rates etc the government will get it goin again and once it does the forced sellers will dry up.

How much would you pay for a semi in a provincial town???????? and be realistic ???

no chance

i work between london and belfast, i trade stockmarkets for a living. i am seeing 3 bed flats in brixton sell at auction for £79k! I am going to put an offer of £220k on a repo in london that would have sold for 400k peak, is now 270k, will not sell above 250k cos of stamp duty rise.

i am seeing talk of dubai falling 40% in a month!!

the longer sellers in northern ireland refuse to accept what is happening globally and how it affects norn iron the worse the pain will be.

http://www.propertynews.com/brochure.php?r...p;p=TRLTRL46962

£3.4 mill wtf?!?!

as you can see im prepared to buy a flat in london, BUT I WOULD NOT TOUCH NORN IRON PROPERTY WITH A BARGE POLE RIGHT NOW. across the uk property is selling at auction for 2002-2003 prices, he rate of the crash ON PROPERTIES THAT ARE VISIBLY selling is immense.

yet in norn iron we still have sellers trying to get twice Rateable Value

WTF ?!?!?! it is as illogical as the rises themselves

MADNESS

[Belfast Boy]

... it is important to remember 2 things

1) Very few will sell their house for this or below asthey know their houses true value in normal times is more than figure stated.

2) There are so many developments were people went in and paid more than this and very few if any will or can sell cos of negative equity.

Do you live in Northern Ireland? Take a drive around any new development. You will notice lots of empty houses. There is a 4 year old development near me with several houses sitting empty. Why are these houses sitting empty?

When you work out the answer you will realise that your 2 important points are old and irrelevant now. There is a new reality now which many people are having a very hard time adjusting too. Market values are correcting to what banks are now prepared to lend. House prices have to reach a value based on fundamentals. We are no where near there yet.

But what do i know? i know this post will get slated however remeber that the same people who post here will post here on the recovery and will have missed the boat again?

Ah, the old missed the boat argument

Some day soon - maybe in the summer of 2010, less than 2 years from now - I will start a topic called 'When will house prices start rising again?' But they have to stop falling first.

How much would u pay for a semi d in a good provincial town???? Remember that figure and if u see one at that remember this is what u stated and buy it........... that is if u have a deposit saved up............

I'll tell you the answer to your question when prices show some sign of bottoming out. Why rush into a falling market and lose alot of money?

Interest rates are at all time lows and in terms of afordability 125 is very affordable for a young couple on average wages with a deposit....... if property goes too NI 2003 levels the economy will be that screwed that you may not have a job.

Interest rates can go up as well as down. I remember UK interest rates at 15%. The average UK interest rate since World War 2 is IIRC 8%.

People should be aware of a bargain when they see it. With low interest rates etc the government will get it goin again and once it does the forced sellers will dry up.

You have alot of faith in this government. This is the government who got us into this mess.

I'm sorry I have no faith at all in this government. If you look at the credit default swaps, you will realise that alot of other people are loosing faith in our government too. (George Osbourne has been talking about this if you wish to do some research.)

How much would you pay for a semi in a provincial town???????? and be realistic ???

3 maybe 4 times the average single income. So about £63,000 to £84,000 depending on area

Banks lending more than 4 times income, with less than 10% deposit is considered subprime. Have you heard of subprime?

Forget about couples. Banks only lend 2.5 times joint or 3.5 main + 1 time second income. Basically couples are riskier to lend to. Double the risk of lost income due to redundancy, injury, illness, children. This has been discussed to death here.

So HERMY do you not believe in history? Have you any data to support your argument? Or is it going to be different this time just because you say so?

"Those who forget the mistakes of the past are doomed to repeat them."

thats very optomistic

personally I'd pay at least two hundred pounds

Me is thinking HERMY is meaning £125,000.

Welcome to the website called housepricecrash.co.uk HERMY.

Edited December 3, 2008 by Belfast Boy

[yadayada]

With low interest rates etc the government will get it goin again

It's been the Bank of England, not the ruling party, that's been responsible for interest rates for the last 10 years.

[Malthus]

It's been the Bank of England, not the ruling party, that's been responsible for interest rates for the last 10 years.

The government thought the BOE was setting rates for the last 10 years , they have now found it's actually the markets

The next nasty shock is that real rates are set by the gilt markets and as they flood that market to borrow huge amounts to "stimulate" the economy things are going to get very nasty imo.

[yadayada]

The government thought the BOE was setting rates for the last 10 years , they have now found it's actually the markets

Well, even less control then

[Belfast Boy]

The government thought the BOE was setting rates for the last 10 years , they have now found it's actually the markets

The next nasty shock is that real rates are set by the gilt markets and as they flood that market to borrow huge amounts to "stimulate" the economy things are going to get very nasty imo.

Exactly. I only understood this recently myself. I'm still learning so much.

Sheeple seem to think that the government are doing this to help the housing market and stop house prices falling. My opinion is that the government are having to drop interest rates and relax lending again, to lessen the blow of the credit crunch, financial crisis and recession. House prices will still fall. Only now there is less chance of banks, businesses and home owners (in that order) all going bankrupt all together.

Unfortunately, in my opinion, the government are only delaying the inevitable. They can only slow it down - not stop it happening altogether. The only question is: are the government going to make things worse?

[Malthus]

The only question is: are the government going to make things worse?

I think the answer to this question lies in our collective experience of dealing with the government ,

have you ever thought "wow that's a good idea" or "great value/service" in any dealings with the government ?

[ratatat]

How much would you pay for a semi in a provincial town???????? and be realistic ???

100-110 for a decent one, 80-90 for the lower end and semis in council estates are toast. I bought mine about 5 years ago for around this price, it was more than I should have paid and remember at the time thinking it was an insane price for a semi in NI, I fully expect it to go back to near that level or beyond.

This is realistic, people that talk about "true value in normal times" are being unrealistic as the past few years were anything but normal, there is no normal only whatever the current conditions allow and the floor could be very low there.

[Vespasian]

This government takes nearly 40% of the country's wealth and squanders most of it

Brown has wasted over £1 TRILLION pounds since 1997

http://www.newsfromnowhere.org.uk/books/Di...N=9781845298326

The pathetic thing is that he is doing a Denis Healey again, how long will it be before the IMF are bailing us out again?

[mr slump]

how long will it be before the IMF are bailing us out again?

if the IMF have the funds to do it...

[Belfast Boy]

if the IMF have the funds to do it...

Yeah, there are alot of other economies in trouble too. Can the IMF save them all?

mr slump, how can you know so much about what is happening and what could happen, and other new posters know so little? Are you English too?

[mr slump]

Yeah, there are alot of other economies in trouble too. Can the IMF save them all?

mr slump, how can you know so much about what is happening and what could happen, and other new posters know so little? Are you English too?

f... no

[yadayada]

This government takes nearly 40% of the country's wealth and squanders most of it

Brown has wasted over £1 TRILLION pounds since 1997

http://www.newsfromnowhere.org.uk/books/Di...N=9781845298326

The pathetic thing is that he is doing a Denis Healey again, how long will it be before the IMF are bailing us out again?

... with a bigger proportion wasted here than anywhere else?

[Ballymena Boy]

House prices are falling!

When will house prices stop falling?

Northern Ireland has recently experienced one of the biggest housing bubbles in history. As Jamie Delargy said, "We have a bubble on a bubble."

Northern Ireland house prices have fallen by 27% in 9 months. You can check the data yourself through links on this website.

(Please, no more wishful thinking Please provide some facts. Please provide some historical data to prove your argument - anything?)

The economic conditions we now encounter have NEVER been experienced before, therefore historical references cannot be given, nor can they be inferred with certainty. Some of the economic conditions are the same as previous recessions, but not all. If you can show me a case with record low interest rates and yet record low mortgage approvals, then I will take another look.

I do think however, we both agree that the falls will continue for most of next year.

As I've stated previously the number of reposessions will be significantly less than previous recessions, due to the current government action and the low interest rate environment which we will have for at least the next two years. This week there is every change the BOE rate will drop to 2%, with an associated drop in the LIBOR rates.These rates are not linked, but will move in roughly the same direction.

Low interest rates will enable people to stay in their homes - they may not prosper, but they will not be turfed out unto the street. The number of forced sales will be low (comparitively) which will act as a stabiliser to the market.

We have also had massive price falls over a small period of time, although there is more to come. But this rate of fall is unsustainable over, say, a four year period. This leads me to believe that the falls will be fast and furious. My view is 45% fall, your view is 60%. It will probably be between these two sets of figures, but the time frame for the complete fall will be approx 2 years (Q3 2007) to end Q3 2009, with some slight gains Q4 2009.

The credit crunch is difficult to interprite. Caused obviously by financial greed, but where does it stop? How many more bail outs are there going to be and over what time period? I suspect the majority of (bank) bad news to have filtered through by end Q1 2009, maybe Q2 2009. Bearing this in mind and the current/future government action (guaranteeing housing loans, etc.) then it is entirely likely that mortgage lending will have risen by Q2/Q3 2009. After all we are at record lows, so it would be realitively easy to see a rise in lending.

Unemployment is key to this whole discussion, but there are too many known/unknown variables for me to discuss, however I am in broad agreement that unemployment will rise by a substantial amount.

So my view is that the correction will be brutal, but short. Many more records will be broken before the end of this process.

One of the most interesting aspects of the current housing crash, is the twin market that has/will develop. There will be a market for investors and a market for everyone else. The investor market (at 80k and less) is basically entirely independent of the average NI house price debate, as the top price an investor will pay (80K) is currently 60% less than the current average NI house price. Even today on propertynews.com there are 157 properties for sale at 80K and less, and a massive 400 at 90k or less. Investors will continue buying over the next year (as the purchases are cash flow positive and can be cherry picked at will), whereas the FTB (as an example) will not, as he sees the average house price dropping over time. In effect this will give us an unusual situation where both the argument for buying property (as investment) and not buying property (FTB's) will BOTH be technically correct. This process with both parties being in the right has caused much confusion with you bears, so I hope the above explains it OK.

Many sellers have adjusted there prices to the new NI reality, so its time (over the next year) to take advantage of this for personnel long term wealth creation. As you're interested in historical data, check out the long term trend on the Nationwide average house price graph on this very site for proof of long term property gain. The long term trend only goes in one direction my friend.

PS, Just so there is no misunderstandings at a later date, even if the average NI house price rises by as little as £1 in Q4 2009; this still technically constitutes a rise. This is a silly comment I know, but it will help avoid any confusion for you bears at a later date.

Edited December 3, 2008 by Ballymena Boy

[yadayada]

Investors will continue buying over the next year (as the purchases are cash flow positive and can be cherry picked at will), whereas the FTB (as an example) will not, as he sees the average house price dropping over time. In effect this will give us an unusual situation where both the argument for buying property (as investment) and not buying property (FTB's) will BOTH be technically correct.

[/size]

I won't be investing if I think the value is still dropping. Will you?

There used to be a scammy "guaranteed" stock market bond available, where your interest was guaranteed, but your capital wasn't, and you often ended up with less than you'd put in. This would be the same.

[Ride_on]

There is a lot of talk about banks should be lending to small deposits, which I don't necessarily disagree with, but this glosses over the real problem that banks need to lend to 3.5x salary (for low risk), and therefore cannot until prices return to sustainable levels. The large deposits mortgage available now show that banks know houses are still over valued (or will reduce in price), and they are just protecting themselves against default losses.

Do banks know this, are they waiting for the bottom too? Common sense would dictate they hasten the crash by selling of land asap, but we know that banks are not that dynamic in new circumstances.

Edited December 3, 2008 by Ride_on

[Belfast Boy]

Ballymena Boy, you wanted some recent examples of similar economic conditions and their effects :-

The Japan Times - BOJ finds that manipulating rates is packing little punch - click here.

MISH'S Global Economic Trend Analysis - click here.

The Japanese 'Lost decade' has been discussed here many times before. Low interest rates didn't work for Japan. Do you know the current BoJ base rate is just 0.3%?

Japan was able to get away with this economic policy because of high personal savings, large manuracturing base, large export market and this maintained high employment. We don't have such a strong economy.

Many people believe that the yen carry trade was a major contributing factor to the size of property bubbles in many Western economies.

I'll reply to the rest of your post later when I have more time. I take it you are writing your posts in a word processor and importing them? The formatting you use makes it hard to reply to specific paragraphs.

Edited December 3, 2008 by Belfast Boy

[Ride_on]

I won't be investing if I think the value is still dropping. Will you?

There used to be a scammy "guaranteed" stock market bond available, where your interest was guaranteed, but your capital wasn't, and you often ended up with less than you'd put in. This would be the same.

A BallB has said himself, the market is only just becoming cash positive now with distressed sellers, however there are big risks with this. He says 'investors' are coming into the market, which maybe they are, but prices could fall well below their expectations and rents are on the way down too. They will soon be selling up and throwing property back on market. It was amature investors that pushed up the market before, they are gone now and any professional investors falling into Bull traps are not enough to effect the market or replace FTBs. FTB's have been in decline since the late 1990s, the market now needs them finally.

[HERMY]

It's been the Bank of England, not the ruling party, that's been responsible for interest rates for the last 10 years.

Yes true I understand BOE control interest rates etc etc however I reckon we are going to enter a period of time where interest rates remain low for a considerable length of time. I have said this for months and the actions of the BOE to me have been a little delayed this should have been happening more gradually from mid summer.

The reason I say this is because I think we can all agree that the economy is in too much debt so how do we clear the excess debt

a) reduce interest rates to their lowest value of time and let firstly the banks re-capitalise themselves

ensure spending levels are maintainned in shops etc with all this doom and gloom in circulation and

last but not least

c) allow those who overstretched sorry (bought in the past 4 years) to reduce their excess debt

I can see our economy going like japans were interest rates are zero and things seem to tick away nicely. What happened in Japan seems similar to what happened in UK.

I would reckon a big fat 1% of tomorrow once BOE release the new cut at 12.00

Remember that customers are only seeing a fraction of the benefits as the banks are taking the rest.

[HERMY]

A BallB has said himself, the market is only just becoming cash positive now with distressed sellers, however there are big risks with this. He says 'investors' are coming into the market, which maybe they are, but prices could fall well below their expectations and rents are on the way down too. They will soon be selling up and throwing property back on market. It was amature investors that pushed up the market before, they are gone now and any professional investors falling into Bull traps are not enough to effect the market or replace FTBs. FTB's have been in decline since the late 1990s, the market now needs them finally.

Next thing we will see will be incentives to encourage first time buyers back onto the market by providing interest free loans etc. I follow the property market very closely and I am undecided as to wether we have reached the bottom or wether it is this time next year I am fully aware of the levels houses are being sold at, and to be honest I believe it is exceptional value, but only time will tell. Two months ago I was sure it would take until 2010 however the speed of this crash i belive is quicker than those of history.

Although I have little to no confidence in the government i do believe they are trying to put a ceiling under house prices. I have learnt over time that once the government decide to do something belive it or not it does happen, i have learnt this the hard way.

I am expecting huge things from the G20 in April a revaluation of the global currencies should be on the cards which will bring down levels of debt for everyone from the IMF to the Government to the Households............

Anyone else share my views ? ?

[pootle]

The governments actions are not going to put a floor under house prices, if anything the price discovery process will take longer and find a lower floor.

As for "a revaluation of the global currencies" - how exactly does this bring down debt levels for everyone?

[yadayada]

trying to put a ceiling under house prices.

?I'll have to think about that scenario?

I am expecting huge things from the G20 in April a revaluation of the global currencies should be on the cards which will bring down levels of debt for everyone from the IMF to the Government to the Households............

Anyone else share my views ? ?

No. Please explain what this would involve

Edited December 3, 2008 by yadayada

[HERMY]

Hi Hermy, can I ask about a) how will the banks re-capitalise if interest rates are at their lowest value. Savers are not going to deposit money if they get no interest surely? They will pay down mortgages credit cards instead.

I belive it is in the best interests that banks reduce their debt levels, i.e. their customers debt levels, savings will still acumulate as people looking to buy a house etc will still need a substantial deposit etc so money will still be deposited.

The reason the banks are failing is cos of the debt they hold it is nothing to do with the savers,, sorry savers but I feel you will not be rewarded for saving for a while as people will be encouraged to spend and encourage our economy out of the Great Recession

[HERMY]

No. Please explain what this would involve

We are all agreed the global economy is a mess with too much debt from households to governments to global institutions.

How do u solve this?

a) Flood the economy with fresh money

Money used to be linked to Gold now money is only paper........... when did this change 1930's ? Coincidence. I dont think so

Now we are back in a similar situation to then ans we need a solution............. so how does that happen.......

How does the government change this again...... they cant do it by each economy acting seperately they can only do it globally hence the G20.... coming together to discuss

How is the Uk and US governments suddenly ging to get all the money to pay for the bailouts if less people are working and less taxes paid etc etc

This is why I belive we will see something radical... in April........... only tme will tell....... but if it does remember where u heard it first

[debt_ridden_ftb]

We are all agreed the global economy is a mess with too much debt from households to governments to global institutions.

How do u solve this?

a) Flood the economy with fresh money

Money used to be linked to Gold now money is only paper........... when did this change 1930's ? Coincidence. I dont think so

Now we are back in a similar situation to then ans we need a solution............. so how does that happen.......

How does the government change this again...... they cant do it by each economy acting seperately they can only do it globally hence the G20.... coming together to discuss

How is the Uk and US governments suddenly ging to get all the money to pay for the bailouts if less people are working and less taxes paid etc etc

This is why I belive we will see something radical... in April........... only tme will tell....... but if it does remember where u heard it first

Something radical - perhaps brown will take control over every property and piece of land in the country and every business, it's going that way!

Looking into more detail i believe now that Brown is trying to delay the inevitable, it is trying to stall the collapse until he leaves office and does not care about the consequences.

Brown has screwed over decent people big time- people who mewed and took on crazy mortgages are being rewarded. His attitude is to hell with FTB's and people who have been priced out and have no choice but to rent.