House prices fall 2.6% in first half of year

[ibis]

This is what the people who carried out the survey said:

Commenting on the results, Niall O’Grady, Head of Marketing, permanent tsb bank said; “These figures put the reality of what is happening in the housing market in Ireland into context. After a decade of exceptional growth, house prices have reduced in the first six months of this year by just 2.6% - significantly less than many people were anticipating. The picture of course varies sector by sector but on the whole over the past six months, the market has been adjusting well to a higher interest rate environment. Importantly the fundamentals of a strong economy and strong demographic growth remain in place and will continue to underpin the market into the future.”

Trying to project this small fall into the future and predicting a major crash is baloney. In the past week alone the price of oil has fallen by 10%. If it keeps falling at the same rate, by Christmas it will be free.

I swear, you're on a one-poster campaign to talk us out of a housing crash and recession, aren't you?

No. Merely imparting the wisdom of experience from one who has seen it all before (and many many times) to the juvenile posters who think that every minor economic hiccup signals the end of prosperity and civilisation as we know it. I'd compare it with being on an aeroplane. If I was on a plane and lots of noisy youths started screaming "we're going to crash, we're going to crash", every time there was a little turbulence, I'd feel it my duty to tell them to relax and that it was all perfectly normal. Likewise with some of the posters here. I'd advise them to relax, enjoy the sun this weekend and leave the running of the economy to the grown-ups.

I'm sure that your years of experience, like mine, tell you that investments can go down as well as up? Mind you, I don't mind recessions, although I lost my last company in the last one.

They almost invariably go up in the medium and long-term. People who can't hang around that long shouldn't really be speculating. People get over-excited about short-term fluctuations. We need steadier heads. For example, Eamonn Ryan made a speech a few weeks ago about the need for us to have a debate about our energy policy because oil is going to become scarce and the price is going to rise long-term. A wise man. I totally agree with him. But, the price of oil has fallen by 10 per cent this week (far greater than the tiny fall in Irish house prices). I'm sure no one is now going to say that Eamonn Ryan got it wrong, that the price of oil is going to keep falling and that we should base our energy policy on the assumption of cheap oil in the future.

Sure. The problem is that things tend to fall back to their long-term trend (there's a nice study of Dutch house prices from 1550-1998 which shows a straight long-term trend) - which in the case of Irish house prices means they have a long way they can fall.

[Sidewinder]

Sure. The problem is that things tend to fall back to their long-term trend (there's a nice study of Dutch house prices from 1550-1998 which shows a straight long-term trend) - which in the case of Irish house prices means they have a long way they can fall.

Long term studies in the US and UK also show the exact same thing - houses long-term anywhere in the world have a real rate of return of around 1.5% pa.

Anyone denying that the Irish housing market 1998-2007 wasn't a bubble at this late stage must be completely mad - or deliberately dishonest.

[freedomlover]

[quote=ibis]

This is what the people who carried out the survey said:

Commenting on the results, Niall O’Grady, Head of Marketing, permanent tsb bank said; “These figures put the reality of what is happening in the housing market in Ireland into context. After a decade of exceptional growth, house prices have reduced in the first six months of this year by just 2.6% - significantly less than many people were anticipating. The picture of course varies sector by sector but on the whole over the past six months, the market has been adjusting well to a higher interest rate environment. Importantly the fundamentals of a strong economy and strong demographic growth remain in place and will continue to underpin the market into the future. ”

Trying to project this small fall into the future and predicting a major crash is baloney. In the past week alone the price of oil has fallen by 10%. If it keeps falling at the same rate, by Christmas it will be free.

I swear, you're on a one-poster campaign to talk us out of a housing crash and recession, aren't you?

No. Merely imparting the wisdom of experience from one who has seen it all before (and many many times) to the juvenile posters who think that every minor economic hiccup signals the end of prosperity and civilisation as we know it. I'd compare it with being on an aeroplane. If I was on a plane and lots of noisy youths started screaming "we're going to crash, we're going to crash", every time there was a little turbulence, I'd feel it my duty to tell them to relax and that it was all perfectly normal. Likewise with some of the posters here. I'd advise them to relax, enjoy the sun this weekend and leave the running of the economy to the grown-ups.

I'm sure that your years of experience, like mine, tell you that investments can go down as well as up? Mind you, I don't mind recessions, although I lost my last company in the last one.

They almost invariably go up in the medium and long-term. People who can't hang around that long shouldn't really be speculating. People get over-excited about short-term fluctuations. We need steadier heads. For example, Eamonn Ryan made a speech a few weeks ago about the need for us to have a debate about our energy policy because oil is going to become scarce and the price is going to rise long-term. A wise man. I totally agree with him. But, the price of oil has fallen by 10 per cent this week (far greater than the tiny fall in Irish house prices). I'm sure no one is now going to say that Eamonn Ryan got it wrong, that the price of oil is going to keep falling and that we should base our energy policy on the assumption of cheap oil in the future.

Sure. The problem is that things tend to fall back to their long-term trend (there's a nice study of Dutch house prices from 1550-1998 which shows a straight long-term trend) - which in the case of Irish house prices means they have a long way they can fall.[/quote:2yaedmbj]

I counted from your chart that during those 448 years, they had four wars with England, two with France, one with Spain, one with Austria, several occupations (the most recent being 1940 to 1945 by Germany) and a couple of outbreaks of plague. I'd agree that if these occur in Ireland in the next few years, the outlook won't be so good. Since 1950, however, they've been relatively free of invasion and plague and during that time have had almost continuous growth in property prices, apart from a brief period in the 1980s which was very quickly reversed. Not enough in that to make me lose any sleep this weekend.

[Corroboration]

How come the ESRI report gives no figures for July?

Whats that about?

[Bray Head]

How come the ESRI report gives no figures for July?

Whats that about?

Cos they take a few weeks to compile.

[Corroboration]

How come the ESRI report gives no figures for July?

Whats that about?

Cos they take a few weeks to compile.

They havn't taken this long in the past.

[Kf]

The situation is far more serious than the vested interests imply. Leaving aside inflation I understand that on the mid upper end of the market ie 750k to 1.25K, property is simply not moving and those that are only with 20% reductions in price from one year previous.

In my own estate my real esate pal tells me the price had gone from €440K to €400K in a year.

[feargach]

It's called a liquidity crisis when the prices sellers demand are not met, but the sellers refuse to drop their price levels, is it not?