Comments on: Shock as man whose job depends on property transactions criticises ratings agency prediction of further price declines

By: John Gallaher

John Gallaher — Sat, 16 Jun 2012 14:11:10 +0000

@RB you may enjoy this,must be very optimistic on Ireland and bearish on the UK prospects!
http://www.irishtimes.com/newspaper/finance/2011/1105/1224307103660.html

By: Robert Browne

Robert Browne — Fri, 15 Jun 2012 16:53:23 +0000

I remember sending a few emails to the late Garrett telling him a few home truths which included that fact that Sherry Fitzgerald woiuld be toast if NAMA was not brought into being. He did dispute one or two other issues that I put to him such as him receiving “debt forgiveness” from AIB but he certainly did not dispute that Sherry Fitzgerald would be toast if not for NAMA he thought I was very well informed!

It almost looks like Morgan was the author of the Moody report.

By: Ahura M

Ahura M — Fri, 15 Jun 2012 16:10:49 +0000

There may be a temporary revival in the Dublin residential market. I think part of the reason is that personal tax didn’t increase this year. In this sense both rating agency and estate agent might be right at this point in time.

Supply might be down, but this is probably down to potential sellers anchoring price expectations to peak prices. On the demand side, are we to believe that the current population of potential buyers are more intelligent/rational than buyers at the peak of the market. When analyzing asset bubbles it’s probably more psychology that economics. What is the purpose of an estate agent employing an economist? Do they have any economists that don’t have a media profile?

My own view is that prices (across the board) will fall further. There are three main reasons:

1) the budget deficit: there’s a gaping hole that needs to be filled. NWL suggests 5k per household, but a large proportion won’t be able to pay more; so the adjustment will be higher on households that can afford to pay.
2) The “awaiting foreclosure” housing stock
3) The euro crisis and growth.

By: namawinelake

namawinelake — Fri, 15 Jun 2012 15:20:52 +0000

@Stephen, many thanks! Link now corrected!

By: Stephen

Stephen — Fri, 15 Jun 2012 15:12:18 +0000

Oh NWL, the link to the CSO goes to the Sherry Fitz page, not the cso page.

By: Stephen

Stephen — Fri, 15 Jun 2012 15:00:18 +0000

Lots of investors seem to also use the monthly rent x 11 x 15 to calculate the yield. But investors seem to look at different houses than someone buying to live in.
For example there is two houses in an estate I’m looking at buying in. One has a much larger back garden than the other. As an investor, you don’t really care much about that as the rent will be the same on both properties all other things being equal, but the house with the larger garden is likely to sell for more.

There is also a sort of bubble/dead cat bounce going on at the moment. Quite a few houses have sold lately. Not sure of the reason why, I just know that a number of houses that I was tracking on the market for 12months+ all went sale agreed over a few months. Perhaps lots of these are going sale agreed well under the asking prices, but we’ll never actually know with the property database coming online,

By: Adrian Neville

Adrian Neville — Fri, 15 Jun 2012 14:47:48 +0000

Just an hour ago, I went to view a house on the market for €385,000. The estate agent expects offers around 20% below. She also said cash buyers (investors) make a calculation of 10 X annual rent and make that offer. This would put the price at around €230,000. A big gap. But you know what? If the market declines by another 20% from the realistic offers of 20% below asking price you get €230,000!