Ireland warned property slump looming

[David Cochrane]

The Irish property market faces an “abrupt” downturn at the end of next year and not the soft landing predicted by the Government, the International Monetary Fund (IMF) warned yesterday.

It issued one of the strongest warnings yet about the overdependence of the economy on construction.

It also raised serious concerns about the spiralling levels of personal debt and continuing increases in the cost of houses. - Irish Examiner

[frankie]

Once again the masters of doom and gloom are at it .These Economists have been predicting the great fall for the last ten years ,every week you listen to them on radio and TV predicting disasters in the economy .Its the old story that if you keep saying something often enough you will be right eventually.

Its time someone took on these doom merchants and expose them every time their predictions are wrong .

Ireland is still one of the fastest growing economys in Europe 100% employment and one of the highest rates of home ownership inthe world most familys have two or three cars ,everybody has access to third level Education etc etc and these dam economists are trying to still upset us.

[Dee Four]

The The Irish Times reads the report somewhat differently.

An "abrupt correction" to the property market cannot be ruled out, it says, although the contraction of the construction sector is likely to be smooth.

Strangely enough, Fine Gael seem intent on focusing on the recommendations for prudent government spending, but are silent on the recommended property tax.

[rockofcashel]

Once again the masters of doom and gloom are at it .These Economists have been predicting the great fall for the last ten years ,every week you listen to them on radio and TV predicting disasters in the economy .Its the old story that if you keep saying something often enough you will be right eventually.

Its time someone took on these doom merchants and expose them every time their predictions are wrong .

Ireland is still one of the fastest growing economys in Europe 100% employment and one of the highest rates of home ownership inthe world most familys have two or three cars ,everybody has access to third level Education etc etc and these dam economists are trying to still upset us.

IMF: But Sir, you're level of personal debt is too high, your economy is too dependent on one sector, inflation is rising, interest rates are rising, your country still lags behind the rest of Europe as regards public infrastructure etc etc etc

FF councillor (or so you claim):



"These dam (sic.) economists are still trying to upset us"

[frankie]

Once again the masters of doom and gloom are at it .These Economists have been predicting the great fall for the last ten years ,every week you listen to them on radio and TV predicting disasters in the economy .Its the old story that if you keep saying something often enough you will be right eventually.

Its time someone took on these doom merchants and expose them every time their predictions are wrong .

Ireland is still one of the fastest growing economys in Europe 100% employment and one of the highest rates of home ownership inthe world most familys have two or three cars ,everybody has access to third level Education etc etc and these dam economists are trying to still upset us.

IMF: But Sir, you're level of personal debt is too high, your economy is too dependent on one sector, inflation is rising, interest rates are rising, your country still lags behind the rest of Europe as regards public infrastructure etc etc etc

FF councillor (or so you claim):



"These dam (sic.) economists are still trying to upset us"

What is your point ROC. are you agreeing with me by finding another doom merchant .?

[Ponzi]

[qtman]

I think we've gone way beyond the point were a soft landing is even possible. There is so much sentiment built into the market now that the slightest wobble will send the investment classes feeling to their estate agents. Then, the building will stop, and all the foreign nationals will head home, leaving a burgeoning hole in the rental market. Rents will fall and suddenly it will be cheap to rent again, dissuading all those ubiquitous 'young couples' from scrambling into the first time buyer market. At that point, we're only a hairs breath away from widespread negative equity.

Market my words; this will be the biggest issue at the polls next June.

[Pidge]

The Examiner seems to be spinning the report quite a bit.

Here's how The Examiner introduces the article:
THE Irish property market faces an “abrupt” downturn at the end of next year and not the soft landing predicted by the Government, the International Monetary Fund (IMF) warned yesterday.

Which contrasts somewhat with what the report says. Do a search on the word "abrupt" in the actual report and you'll see what I mean.

[Sidewinder]

At the minute rents nationally are not enough to cover the mortgage payments, apparently. Rents haven't really moved anywhere in about 4 years now, while prices have rocketed. It's pretty obvious to anyone who can count that this situation can only end one way.

I saw a report on the Interwoogie (can't remember where, sorry!) that some international property dudes had examined the Irish market and concluded that, based on Irish, UK and European historical property price/earnings ratios that Irish property was currently overvalued by somewhere between 30% and 60%

This is going to make the Japanese bubble look like a minor hiccup.

[Ponzi]

Some posters obviously believe that a bubble does not exist in the Irish housing market. I am curious to know how you see things panning out for the market and for the wider economy over the next twelve months?