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Thread: Property Market - Is there a Buyer Overhang?

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    Default Property Market - Is there a Buyer Overhang?

    Notwithstanding the huge property overhang we all know about, and all the factors which continue to depress the property market such as unemployment, lack of credit and new taxes, there must be some constituency within our population which are biding their time for an opportunity to purchase new homes for their families.

    The housing market stopped dead in 2007, so coming on for 5-6 years later, I would wager that there is a significant amount of potential buyers with reasonable savings and good credit potential waiting to buy, either for a first home or to upgrade.

    I think in the last full year of boom time, there were approx 90,000 houses built. But at least half of these were for BTL investment and maybe a further 20k houses purchased by massive mortgages by those who simply could not afford the repayments.

    So, even if one were to assume a natural, sustainable demand of 10k houses per annum, that would indicate a pent up demand of some 50k buyers - waiting and saving. Waiting and saving for an indication that the prices have bottomed, whatever that indication may be.

    I suspect there is a buyer overhang, I think it would be weird if there wasn't. Not everyone got caught with their trousers down. The question is, what effect will this hoarded demand have when the market floor has been called?
    Redacted.

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    Well since the property market is still bust leading house prices to be low its very good for new buyers. Since they will be able to buy cheap and sell later for higher. and if lots of house are sold it will bring back up house prices leading resurgent in the property market.

    So if we can get people with good amounts of money to buy lots of house we can then get people living in house not worth alot to be worth lots then.

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    Politics.ie Member seabhcan's Avatar
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    There was some trade going on in Dublin in the last 3 months of 2012 - but so far as I understand, houses will effectively become 30% more expensive on Jan 1st.

    Thats because the tax allowance on mortgage repayments is scrapped for houses bought after 1 Jan.

    I expect the market to be dead for a few months before people get used to the new costs.

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    Politics.ie Member Dan_Murphy's Avatar
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    There is a market for everything, its just a question of price, and at the moment all the governments efforts are focused on keeping prices as high as possible regardless of how detrimental it is for the ordinary person.

    No one is willing to buy into that, best wait until they can no longer keep it up and the price falls.

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    Quote Originally Posted by Thomaso12 View Post
    Well since the property market is still bust leading house prices to be low its very good for new buyers. Since they will be able to buy cheap and sell later for higher. and if lots of house are sold it will bring back up house prices leading resurgent in the property market.

    So if we can get people with good amounts of money to buy lots of house we can then get people living in house not worth alot to be worth lots then.
    Presuming you're being serious.....

    And off we go again...the mindset that got us into the mess in the first place...that high house prices are a good thing.
    We've had the "prices rising in good areas" nonsense...and now this notion that there is a huge group of people chomping at the bit to buy houses.

    To assume a "buyer overhang" means one would assume the following;

    That people want to buy not rent

    That they can access money

    That there is limited supply:- nobody ever mentions the huge amount of mortgage free houses owned by babyboomers that will be inherited by offspring over the coming decade or so

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    Politics.ie Member oggy's Avatar
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    Quote Originally Posted by anationoceagain View Post
    Presuming you're being serious.....

    And off we go again...the mindset that got us into the mess in the first place...that high house prices are a good thing.
    We've had the "prices rising in good areas" nonsense...and now this notion that there is a huge group of people chomping at the bit to buy houses.

    To assume a "buyer overhang" means one would assume the following;

    That people want to buy not rent

    That they can access money

    That there is limited supply:- nobody ever mentions the huge amount of mortgage free houses owned by babyboomers that will be inherited by offspring over the coming decade or so
    I am one of those baby boomers and hope to deprive the kids of their inheritence a lot more than a decade

    If there is an overhang then I want more measures to restrain it being unleashed in a way that will promote another property boom. In fact I am confident there will not be a return for decades to crazy property prices and believe the new property is one of the measures that will be used in prevention
    People demonise Fianna Fail and they are entitled to do so but same people are not capable of answering a few awkward questions themselves.

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    Quote Originally Posted by oggy View Post
    I am one of those baby boomers and hope to deprive the kids of their inheritence a lot more than a decade

    If there is an overhang then I want more measures to restrain it being unleashed in a way that will promote another property boom. In fact I am confident there will not be a return for decades to crazy property prices and believe the new property is one of the measures that will be used in prevention
    Would you not move into the granny flat and let the kids party on down? But seriously, a lot of so called economic forecasters don't factor in the point that people older than yourself will be bequeathing property..especially the staple 3 bed semi. This will act as a dampener on any imagined pent up demand in coming years. Sadly, many mainstream media still portray falling house prices as a bad thing

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    Politics.ie Member Johnnybaii's Avatar
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    I believe you are correct there is an overhang, the market dictates there must be, people keep getting married, having more kids, move to a new job etc.

    The factors keeping this cohort on the sidelines though are currently strong enough to counterbalance this overhang demand. How long that will remain the case is an interesting question.

  9. #9

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    Quote Originally Posted by EvotingMachine0197 View Post
    Notwithstanding the huge property overhang we all know about, and all the factors which continue to depress the property market such as unemployment, lack of credit and new taxes, there must be some constituency within our population which are biding their time for an opportunity to purchase new homes for their families.

    The housing market stopped dead in 2007, so coming on for 5-6 years later, I would wager that there is a significant amount of potential buyers with reasonable savings and good credit potential waiting to buy, either for a first home or to upgrade.

    I think in the last full year of boom time, there were approx 90,000 houses built. But at least half of these were for BTL investment and maybe a further 20k houses purchased by massive mortgages by those who simply could not afford the repayments.

    So, even if one were to assume a natural, sustainable demand of 10k houses per annum, that would indicate a pent up demand of some 50k buyers - waiting and saving. Waiting and saving for an indication that the prices have bottomed, whatever that indication may be.

    I suspect there is a buyer overhang, I think it would be weird if there wasn't. Not everyone got caught with their trousers down. The question is, what effect will this hoarded demand have when the market floor has been called?
    While credit is a problem the elephant in the room is that a lot of the unused stock of housing is not in desirable locations, think ghost estates in Leitrim.

    I would suspect that there could well be a slight buyer overhang in Dublin shortly, but in the city, not seventy miles away for ridiculous commutes.
    "If we can but prevent the government from wasting the labours of the people, under the pretence of taking care of them, they must become happy." - Thomas Jefferson

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    Yeeessss I'd say that there's an army of people who dream about anchor themselves to an overpriced liability in a dying country!

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