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Thread: Irish Property Market 2005

  1. #1
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    Default Irish Property Market 2005

    First post

    2005 will be an interesting year for the Irish property market. Estate agents and lenders seem to have reached a consensus, that prices will increase by 10% this year. This forecast is in the context of unprecedented housing output expected again this year.
    By the end of the year therefore someone buying an average priced home now, can expect (according to these forecasts), a paper profit of €25,000 by year’s end.

    These projections are surprising however given the following facts;

    1. House prices fell outside Dublin in the last quarter of 2004.

    2. Rental values continue to fall and void periods increase in the investment market, this situation is unlikely to improve, the government has announced funding for 30,000 affordable housing units to be built over the next five years.

    3. Wage growth is nowhere near the actual or projected growth in house prices.

    4. Property markets in countries with similar economies to our own have seen poorly performing markets since the summer of last year.

    UK
    Mortgage approvals have fallen by 40% to their lowest level in a decade, house price falls which were first reported in the summer of 2004 are continuing. The vast majority of independent commentators have stated that we are seeing the bursting of a speculative bubble in the UK market.


    US
    Housing markets which saw the greatest escalation in prices over the last few years in California, Nevada and the north east are showing signs of a sharp slowdown. With falls of up to 20% recorded in San Diego and Orange County.


    Australia
    Prices in the major cities have seen falls for over a year. Brisbane for instance has seen a fall of 15% in the last quarter. Again commentators are stating that a speculative real estate bubble has burst.


    5. Levels of personal debt continue to grow at record levels.

    6. Ireland’s competitive position is being eroded with business and employers organisations repeatedly warning of the economic consequences.

    7. Serious issues with the role out of vital infrastructural projects have again been identified as posing a risk to Ireland’s competitiveness. After twenty years the M50 for instance is yet to be completed, broadband coverage is the worst in Europe save for Greece. Time and cost overruns, nimbyism and parish pump politicking have conspired to narrow the vital arteries of development in an infrastructuraly challenged nation, which cannot afford the extravagance of long winded development lead times.


    8. Average property prices relative to average incomes are now the highest in the world, compared to other markets not driven in part by non domestic demand.

    9. The above may not be an issue as Irish lending institutions seem to be able to find applicants who are able to afford these high P/E ratios. However if we consider the well documented disaster myopia which gripped banks in Japan etc before previous real estate busts and the weak hand that passes for Irish regulation of lending, this extraordinary munificence by our banks is understandable.




    The global economy is entering a time of uncertainty. The debt driven consumer has forestalled, (to date) the economic day of reckoning which should have followed the dotcom bust, the last speculative mania. Emergency base rates in Europe and the US and hyper low cost production costs in China have staved off a recession or worse.
    However there is a finite amount of debt that can be carried by society. Early signs of retrenchment by consumers are now evident in the UK and US and Ireland is almost uniquely exposed to the vagaries of any change in the fickle economic wind.


    You will of course not read anything as bearish as the above in any Irish newspaper, I fully understand that whoever pays the piper names the tune. The censorship mentality that blighted Ireland for much of the last centaury is alive and well if you dare to blaspheme the new religion.

    10%?, whoever said “don’t believe everything you read in the papers” was right.

  2. #2
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    Default Irish Property Market 2005

    ECB issues bubble warning for Ireland and Spain

    http://www.rte.ie/aertel/p132.htm

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    Can we merge this with "House Prices in Ireland"?
    Nil neart gan cuir le cheile

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    Politics.ie Member Libero's Avatar
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    Merges aren't easily done, I'm afraid.

    You can always link from the other thread to this one, should you wish to refer to any content here. For anyone reading this, the more recent thread is here.
    If TTFN is out there, I hope he reads this and rejoins us. Only 2 posts before he disappeared! I guess it can be offputting when you write a couple of hundred words for your first post but they seem to be ignored.

    In the meantime, since this thread was dormant for months, I'm locking it to prevent duplication of the topic.

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    Quote Originally Posted by TTFN View Post
    ECB issues bubble warning for Ireland and Spain

    http://www.rte.ie/aertel/p132.htm
    This January 2005 post and another just before it by the same poster are worth recalling. ECB was right.

    Sadly the RTÉ link no longer works.

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    Quote Originally Posted by TTFN View Post
    ECB issues bubble warning for Ireland and Spain

    http://www.rte.ie/aertel/p132.htm
    Ouch! if id only read that back then

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    Quote Originally Posted by Mrwoody View Post
    Ouch! if id only read that back then
    Much of the country did, and carried on.
    "It is difficult to get a man to understand something when his salary depends upon his not understanding it." - Upton Sinclair.

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    Politics.ie Royalty toxic avenger's Avatar
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    Most prescient first post of all, perhaps...

    If the thread hadn't been locked, Ard-Taoiseach, freedomlover, and several FFers/PDs would have jumped all over it, of course. Do you remember Ahern, Cowen and co. saying that 'nobody saw it coming'? The pondlife we elect as 'leaders'....

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    Politics.ie Member Dan_Murphy's Avatar
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    Quote Originally Posted by toxic avenger View Post
    Most prescient first post of all, perhaps...

    If the thread hadn't been locked, Ard-Taoiseach, freedomlover, and several FFers/PDs would have jumped all over it, of course. Do you remember Ahern, Cowen and co. saying that 'nobody saw it coming'? The pondlife we elect as 'leaders'....
    It is amazing to dive back into the P.ie archives, the number of posters who disappeared in Autumn 2008...

  10. #10
    Politics.ie Member Partizan's Avatar
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    Quote Originally Posted by Dan_Murphy View Post
    It is amazing to dive back into the P.ie archives, the number of posters who disappeared in Autumn 2008...
    Many of them simply changed their names and came back under different guises. They are easy to spot.

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