Academic: 80% Fall in House Prices

[Factorem]

Morgan Kelly said he believes house prices could drop by 80% (in real terms).

He also used the word "buffoon" when talking about Biffo, Lenihan, Neary!

Full story on Irish Times:

Warning that house prices may fall by 80% - The Irish Times - Tue, Jan 13, 2009

[smitchy2]

I congratulate his prediction of the property bust in 2006 but I think 80% is a bit much to come off prices. This would be out of kilter of his analysis of past property booms.
Certainly 40%-50% is likely from the peak on average but there will be cases either side of this depending on location.

[ballot stuffer]

He is spot on as usual.

The government and other economists have been content to ignore him all the way to this point when he was making dire predictions about the underlying problems in the economy.

Now that he has been proven right his advice how to fix the problem is being ignored. I don't blame him for having ago at these muppets.

[Aindriu]

He is right on all counts IMHO.

[constitutionus]

i still think housing will go back to the level of the ol "three times your wage" criteria with your partners wage factored in again and 10% down. thats been the standard going back to the 50s and now the nuttyness of ridiculous lending has ended i can see the banks going back to what they know

that means theres not a bog standard gaff in the country worth over 210k euro.

as smitchy says loaction will be a factor. theres always some idiot who'll spend millions to live next door to pat kenny but for the normal people your looking at 210k or less.

mainly this will be because the banks wont lend more than that as theyre practically paralysed as it is. from what i can see that means the figure will more likely be 40% off the peak.

still enough to terrify property developers.

and christ help anyone with an apartment, theyre just one nightmare waiting to happen.

[The Red Rose of Cork]

He's right as usual. Remember that the fall is in real terms, allowing for inflation since the peak. Also, if you doubt what he is saying then remember that its one thing to wonder how much your house is worth and another thing to imagine the price you'd be offered if you had to find a buyer in the morning

[cyberianpan]

Here's his exact quote

In a presentation that drew several collective intakes of breath, Mr Kelly predicted that house prices would fall by 80 per cent from [COLOR=Red]peak to trough in real terms[/COLOR].

cYp

[He3]

“The guarantees of Anglo and [Irish] Nationwide liabilities have a strong chance of being called in over the next 21 months,” he said. Extending the Government guarantee to these two financial institutions was “extraordinarily unwise” and could produce losses that the State cannot afford to repay.''

Remains an unexplained mystery.

[constitutionus]

interesting comment as well about demolitions.

if memory serves didnt liam constrution want to evict tenants in their apts on thomas street so they could demolish them and build office space (to get the tax exemption IIRC)

last i heard they were refused but its still indicative of a "just level the place" mentality.

loved the quote about "amateurs" calling it right by just stating the fecking obvious. the mans too modest.

thinking about the 80% reduction its worth mentioning that the peice doesnt really give us the entire context of his quote. if he's talking about the makeyuppy ghost estates out in ballymebollocks where no one ever really wanted to live in the first place but thought they would buy out of desperation they yes i can really see those places losing 80% of their value.

hell i wouldnt be surprised if theyre just abandoned wholesale by the developers. christ knows if you just drive around the country now you can see "estates" with only two finished houses in the middle of a wasteland that was meant to have 20. (i seem to remember RTE doing a program once on a place between dublin and waterford called "oil-"something where this very thing was happening last year)

[constitutionus]

“The guarantees of Anglo and [Irish] Nationwide liabilities have a strong chance of being called in over the next 21 months,” he said. Extending the Government guarantee to these two financial institutions was “extraordinarily unwise” and could produce losses that the State cannot afford to repay.''

Remains an unexplained mystery.

not if your a cynic !