Dublin property prices falling by €4,500 a month

[Johnny]

The market is already crashing.

How do you call it short/long-term, a chara?

Do you think the 30% prediction was conservative?

Yes, as I'm sure you do too.

In the short term, I expect a surge of confidence after the election, where a relatively large number of sales are completed, and the vested interests will have one last shot at talking up the future. But the continuing rate rises will bring a bit of reality to the situation, and from then on it's down, down, down...

I would expect the Irish property market to experience a similar trend to that experienced by Finland, Norway, Holland and Denmark and for prices to be 40% less in six years time... But there are also a number of other long term issues that could prevent a recovery in six years time, most significantly a world wide recession and rising energy costs. The long dark night, I fear.

What are your thoughts, Johnny?

To my (untrained economic) eye, I would estimate that a 30% drop is probably the best that could come out of this debacle, but will more than likely be, as you posted already, somewhat higher. It's gone too far now for any remedial action to be taken, and anyway as Sidewinder among others always points out here, there is no such thing as a soft landing. We're in big with this one, no doubt. Amazing how brutally honest it was, was'nt it? Really wasn't expecting it to be as straight from the hip as it was.

Didn't you just love seeing Moore McDowell putting the boot into the government's collective magairlí at the end?

[rockofcashel]

and just in case people thought that things would get better, here's what's floating around on Rueters.

ECB policymakers warn oil is inflation threat

http://uk.biz.yahoo.com/16042007/325/ec ... hreat.html

significantly..

" Rising oil prices are the biggest inflationary danger in a euro zone economy enjoying favourable growth, European Central Bank policy-makers said on Monday, adding to expectations for another ECB interest rate increase."

[Coles]

Didn't you just love seeing Moore McDowell putting the boot into the government's collective magairlí at the end?

Just as well that the 'boom is going to get boomer'!

[cooperation]

I suppose Frank Fahey will make a killing.

[the-analyst2007]

If there is a silver lining to all this, the slack in construction employment that will come from the property downturn could be taken up by major new infrastructure building programmes (metro, motorways, new airport).

Thus keeping contruction employment close to current levels, while at the same time the cost of these new infrastructure projects can be controlled.

[Ponzi]

The bust will be proportional to the boom. No other property market bubble to the best of my knowledge saw falling rents, falling rental yields and 15% of the housing stock unoccupied. And in every previous bust the nations concerned had control of their interest rates, so they could lower rates to ease the pain. Keeping the Stamp Duty weapon in the silo for the time being may be wise.

[JCSkinner]

Like I said, up to 60% in some areas and housing sectors.

[Sidewinder]

If there is a silver lining to all this, the slack in contruction employment that will come from the property downturn could be taken up by major new infrastructure building programmes (metro, motorways, new airport).

Thus keeping contruction employment close to current levels, while at the same time the cost of these new infrastructure projects can be controlled.

Won't happen. Infrastructure projects need much less manpower than residential property, and completely different skills. Also, where is the money going to come from to pay for the infrastructure projects when stamp duty dries up and income tax from all the brickies, plasterers, electricians, roofers etc. etc. disappears? Not to mention the resulting drop in indirect taxes because all those people aren't spending much any more, the rise in welfare payments for all the brickies on the dole, the loss of jobs in builder supplies merchants, architects etc.?

[Coles]

If there is a silver lining to all this, the slack in contruction employment that will come from the property downturn could be taken up by major new infrastructure building programmes (metro, motorways, new airport).

Thus keeping contruction employment close to current levels, while at the same time the cost of these new infrastructure projects can be controlled.

There will not be the tax intake to finance the infrastructural building programmes.

[cooperation]

This could only be a short term solution, and this would not help those trapped in negative equity and spiralling debt. The negative equity on a average person in Dublin would be over 120,000 euro on their hoyuse alone. Their disposable income would thus be reduced, having a knockon effect for the local economy.