Wednesday, April 30, 2008

Is a 30% drop in one year a crash?

NI house prices face £75,000 drop

"The average price of a house in Northern Ireland will have dropped by £75,000 from its peak by the end of the year, an economist has said. Richard Ramsey of the Ulster Bank predicted the average price of a house would fall to £175,000." And embarrassment all round for the NI 'experts'. Apparently immigration was the driver here in NI - you know the story. Except that a study released today estimated the the immigrant population here is 1%. So were the public lied to?

Posted by shipbuilder @ 11:23 AM (1573 views)
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21 thoughts on “Is a 30% drop in one year a crash?

  • NI house prices were vastly, vastly overpriced in relation to peoples earning.

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  • mark wadsworth says:

    That seems fair enough. Their prices were rising something ridiculous by 30% a year for a couple of years. It will be interesting to see whether properties get revalued down for domestic rates purposes – they were all revalued to market value as at 1 January 2005 when a flat property value tax of 0.78% was introduced. The land tax people pestered them to go straight for LVT but they chickened out.

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  • japanese uncle says:

    In a few years’ time, HP in NI will be no more than 75,000. Back to the square one. The same is true with other territories.
    Then what’s the difference between then (original square one) and now? People are much heavier indebted to, thus enslaved by banks.
    Simple fact of life.

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  • A very arrogant aquaintance of mine moved to Belfast last summer (boasting that he sold his house for £20k more than the figure that subsequently appeared on the land registry stats..)

    ..ho hum…:)

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  • I thought the “peace dividend” was supposed to be the driver.

    I suppose that is the reason why NI house prices are not massively cheaper than the rest of the country, but it doesn’e explain why it was at the peak the second most expensive region in the country. The peace dividend should only increase them to the levels of similarly deprived areas in England.

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  • WHEN IS KIRSTIE ALLSOP (FROM LOCATION, LOCATION, LOCATION) GOING TO EAT HER HAT? PLEASE LET ME KNOW BECAUSE I WANT TO TAPE IT.

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  • The paradox of percentages:

    Up 15% twice, then down 15% twice leaves us with less than we started with.

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  • Yes, Krusty and Fool, where are you…?

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  • japanese uncle says:

    I think she will have a pretzel in the shape of bavarian hat shipped from Munich.

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  • last_days_of_disco says:

    Who wants to live in Ireland? Most imigrants come from sunnier climates. I know people who went to Ireland and couldn’t take it and moved to London, for an improvement in weather!

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  • immigration of cheap limitless credit, that was!

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  • No, no, not a crash, merely an easing in the housing market, difficult conditions at present, temporary liquidity issues (all the fault of those dreadful Americans), and a lack of infinity in the money supply.

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  • planning4acrash says:

    Maybe, troops were withdrawn coz Blair’s JP Morgan realised that they could break the great nation with a credit boom that enslaved the middle class 2 yrs of negative equity and interest payments?Just an idea.Ireland continues2 b a thorn on the EU project

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  • mark wadsworth says:

    The stat that only 1% of population is immigrants is very relevant to all this. What’s the comparative for Scotland? Probably not quite as low as they are not quite as xenophobic?

    A quick search tells us that

    “In 2003, [England] had a population density of 383 people per sq km compared with Wales (142), Northern Ireland (125) and Scotland (65). London had a far higher population density than any of the English regions, with 4,700 people living in each square kilometre on average”

    So if, as we are always told, house prices have to be high because ‘we’ are so densely populated and because of immigration, why would these be a factor in HPI in Wales, Scotland or Northern Ireland?

    A clue – they’re not.

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  • dohousescrashinthewoods says:

    Another clue – all the hacks live in London.
    They don’t have, shall we say, the “breadth of experience” to realise they live in a tiny Westminster-village-like bubble that bears acutely little relation to 90% of the nation – yet they claim authority to speak over it.

    If you live at the “pointed end” of the curve, you really should get out more.
    London may be a microcosm of the United Nations, but most places (excepting Muslim cities such as Birmingham) are utterly, blindingly white. You’d have a hard time finding any non-anglo-saxons in Portsmouth or Godalming.

    This also explains the Daily-Mail’s circulation – white, slightly inbred, a little stunted and fearful of these threatening hordes of moorish, boorish immigrants they have never seen, except that one chap back in 2006 and that lot on the telly bombin’ stuff.

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  • I believe immigration is a bit higher in Scotland, however outward migration is very high as well and the birth rate is much much lower, meaning that Scotland has a declining population, whereas in NI it is stable – very high birth rate offset by very high outward migration.

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  • “meaning that Scotland has a declining population” @jonb

    …but surprisingly intact HPI (knight Frank), so less demand, but higher prices, that would be the supply/ demand equation then???????

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  • the naivety of the hpc crew and your response to an article which represents the view of one person about an area which probably doesent affect any of you shows the desperation of your plight.

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  • Btl rules @19

    This is not the only opinion comming out of N Ireland. Also, I know many people there who bought last year whose houses are now valued by agents at 15-25% less than they paid. The stats dont show it becasue they are not sellling now or havn’t/cant sell. The spectere of negative equity is well and truely stalking the U.K from the west.

    You are right that in all probability the state of the market in N. Ireland will not not directly impact on many here, but it shows how quickly a market can fall and sentiment can change. Northern Ireland has had £million of investment, but you have a series of small and still heavily ghettoised communities who don’t really move significanly out of their own areas thus increasing limiting supply and increasing demand (i.e. many catholics still live in traditional catholic areas and visa versa for protestants. All these things have helped push up prices well beyond what is affordable and the bubble has burst. This is relevant as there are parallel situations in the rest of the UK and in England in particular.

    In Northern Ireland there was no actual industrial change or significant increase in pay to support the level of investments people were making outside the faux-industry of house buying and estate agency itself. There was an influx of comercial activity and investment, new bars opened and hotels were built. However, most of it was a product of the boom it was funding. There was no independent economic change. Sort of like a massive equity withdrawal. Money was invested on the expectation that more money would come and growth would continue.Therefore when the bubble burst it burst bad and will get worse. Why? Becasue even with the current drop affordability is still an issue. N. Ireland still has one of the lowest average wages for the UK. With the change in sentiment prices could still fall further. Just as the boom was built on a self fulfilling prophecy so will the bust.

    I believe this is a stark warning to many English cities where similar booms in prices (unsupported by any independent economic or industrial changes) have occured. There are many parallels from N Ireland to English cities such as (to name but a few) Nottingham, Sheffield, Liverpool, Leeds, or Newcastle. The same factors inflated it and the same will burst it.

    what response is Naive and why? What plight and desperation are you talking about (other than your own)

    house prices have plummeted and negative equity is a reality in the country of the UK with the strongest growth over recent years
    prices falling for six months in a row acording to halifax and nationwide
    the first YonY fall in prices for 12 years

    how desperate I must be to use actual facts to back up my arguments. How naive to think prices are falling when they are and even the most consersitve measures show it too.

    Are you actually arguing that prices have not fallen and are not falling. Are you seriously stating that the UK’s ecomonic make up is so fragmented that what happens in one part of the UK has no bearing on another. if so it is truly you who are niave.

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  • Bfskinner, I was going to stick my oar in, but having read your post I have nothing to add. Perfectly judged bit of withering sarcasm at the end as well – nice one.

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  • cheers shipbuilder, I try my best:

    re: sarcasm. well I am from Northern Ireland, its a way of life lol

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