Newstalk: Another crash is coming, accept it

We spoke to Ciara Kelly about the current property market and where we believe we are in the cycle. She was surprised to hear us say that we believed a crash was virtually an inevitability. There are myriad reason for property cycles and the routes to resolving them are politically unacceptable, for that reason we are confident we won’t avoid experiencing another one.

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The Times: Maybe I’ll buy a home after the apocalypse

We were mentioned in the Times of Ireland recently in an article on housing crashes “It seems we’re due another property crash, that’s if the Organisation for Economic Co-operation and Development and financial adviser Karl Deeter are anything to go by. Both said in the summer that Ireland was at risk of another housing bubble and subsequent bust, with the latter going so far as to pin the date to sometime in the early 2020s”.

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Supply, Demand, & Prices of Irish Property – A talk by Ronan Lyons

Ronan Lyons gave a talk to CFA Ireland on the 9th of July on the topic ‘Supply, Demand, & Prices in Irish Property’.

Ronan is one of the most respected voices on the property commentary circuit in Ireland due to his careful analysis and long term association with the nations largest property website daft.ie (from which he gathers his datasets).

This video (click here to go and watch the full play-list) is required viewing for anybody with an interest in the Irish property market.

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Fixing symptoms is not a solution

This is an interesting conversation that appeared on Bloomberg with Jim Bianco. He makes the interesting point that there are really two roads out of the place we are in, depression or reflation. Internationally Governments are doing all they can to support the economy, the issue however, is that when these plans don’t work it will be pegged as being a ‘failure of capitalism’ when in fact, it only reinforces the fact that capitalism is working as it should by getting past a bubble and letting the prudent players win out in the end. The ‘Why’ is really ‘why are we trying to stop the market from working’ not ‘Why did this happen’ or ‘why me’.

Fixing symptoms is not the same as finding a cure.

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It's gonna hurt…. because it has to.

I have found something that nobody disagrees upon, which is the need to save the economy, but that’s where the agreement ends, because once you mention solutions the disagreements begin.

Should we fix the problem by raising taxes? Cutting public spending? A levy on the Public Sector? Bring the lower paid into the tax base? And for every person who agrees with one aspect of this there will be another who says it is the wrong answer.

I would differ, I think they all must be done, we need to solve this mess fast, and it is going to hurt, not because that’s what the government want, and not for fun, but because it has to. I like analogies so here is a fitting one: An overweight person realises one day they will die if they don’t lose weight, they can start to argue with the doctor that they want to eat the odd doughnut, but they won’t eat ice cream, they will do moderate exercise but don’t want to change …

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It’s gonna hurt…. because it has to.

I have found something that nobody disagrees upon, which is the need to save the economy, but that’s where the agreement ends, because once you mention solutions the disagreements begin.

Should we fix the problem by raising taxes? Cutting public spending? A levy on the Public Sector? Bring the lower paid into the tax base? And for every person who agrees with one aspect of this there will be another who says it is the wrong answer.

I would differ, I think they all must be done, we need to solve this mess fast, and it is going to hurt, not because that’s what the government want, and not for fun, but because it has to. I like analogies so here is a fitting one: An overweight person realises one day they will die if they don’t lose weight, they can start to argue with the doctor that they want to eat the odd doughnut, but they won’t eat ice cream, they will do moderate exercise but don’t want to change …

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House prices in the near term: Robert Schiller

Economist Robert Schiller of ‘Case Schiller’ report fame says that he believes the housing market will fall further, confidence is everything in the property market and he says that confidence is at a record low and that is one of the primary reasons for his feelings on future prices. This makes for some interesting viewing, his book ‘The subprime solution’ and another called ‘Irrational exuberance’ are both excellent reads if you want to get a view on the current situation from a man who saw this coming. A vital point he makes is that avoiding additional supply is part of the solution.

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It’s not all gloom and doom: some of the things will improve in the downturn

I’m a big bad bear, have been for quite some time, but even the likes of me can see that the property fallout will have some good aspects. News generally covers the bad side of things perfectly well so if you need some of that go Google ‘Credit Crunch’. Today we’ll consider some of the good things.

1. First time buyers will get cheaper houses – Even though the state seems determined to halt the downward trend in property prices (by starting a state backed lender who will give out loans the bank won’t), it is kind of like King Canute hoping the tide won’t come in.

The market as a whole, is a stronger force that the €1.66 billion the state has put in front of it. This will eventually lead to the market clearing values being reached. What is the market clearing value? Well, frankly nobody knows, but we can thankfully describe it: market clearing values are the price on …

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It's not all gloom and doom: some of the things will improve in the downturn

I’m a big bad bear, have been for quite some time, but even the likes of me can see that the property fallout will have some good aspects. News generally covers the bad side of things perfectly well so if you need some of that go Google ‘Credit Crunch’. Today we’ll consider some of the good things.

1. First time buyers will get cheaper houses – Even though the state seems determined to halt the downward trend in property prices (by starting a state backed lender who will give out loans the bank won’t), it is kind of like King Canute hoping the tide won’t come in.

The market as a whole, is a stronger force that the €1.66 billion the state has put in front of it. This will eventually lead to the market clearing values being reached. What is the market clearing value? Well, frankly nobody knows, but we can thankfully describe it: market clearing values are the price on …

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A tale of two commissions.

It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness, it was the epoch of belief, it was the epoch of incredulity, it was the season of light, it was the season of darkness, it was the spring of hope, it was the winter of despair.

Some of you may recognise this line from ‘A Tale of Two Cities’ by Charles Dickens, however, I am not a classical scholar, instead it sums up my monetary sentiments for 2008. On one hand we are seeing property prices [the very foundation of the majority of Irish wealth] wither away, as global conditions worse, especially in the USA where house prices are now falling quicker than they did during the Great Depression.

There has been more than a few articles in this blog about the current issues in the broker market, the description I would use to describe it at the moment tends to modulate between ‘ugly’ and …

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