Northern Ireland house crash 'among world's worst'

Mistral001

A.L.D.A wrote: »

Thanks very useful link.

It does tend to confirm that some areas are falling less than others, but then some areas did not rise as fast as others.

Some of it surprises me as I thought the falls were greater. e.g. Terrace houses in North Belfast shot up in some areas and rightly collapsed.

The graphs at the bottom showing the number of properties for sale in each area by type and number of bedrooms is very useful and worth keeping an eye on. There seems to be an increase in larger houses for sale and a drop in the number of smaller houses. (maybe it is just the areas I was looking at)

Again advise caution in viewing the graphs. If you chose a small area and few are being sold it can mean that a very few exceptional houses (good or bad) can produce odd peaks and troughs. Usually best to ignore these and draw a straightish line from beginning to end to get an idea of trends.

ALDA

OK as far as it goes, but only asking prices. Are not asking prices lower than price sold when prices rising and higher when prices are dropping. Thus the graphs perhaps under-estimate the the fall. Though good to compare the different types of properties. Flats seem to have been worse hit unsuprisingly. Surprised about the semi's though as they have dropped quite a lot as well.

The Newsletter article says Halifax have quoted 52% drop. Again that might have to be adjusted as it probably includes some properties at knocked down prices due to mortgage defaulting, but seems to be not in same ball park as the aasking price charts

saverbuyer

Mistral001 wrote: »

ALDA

OK as far as it goes, but only asking prices. Are not asking prices lower than price sold when prices rising and higher when prices are dropping. Thus the graphs perhaps under-estimate the the fall. Though good to compare the different types of properties. Flats seem to have been worse hit unsuprisingly. Surprised about the semi's though as they have dropped quite a lot as well.

The Newsletter article says Halifax have quoted 52% drop. Again that might have to be adjusted as it probably includes some properties at knocked down prices due to mortgage defaulting, but seems to be not in same ball park as the aasking price charts

The Halifax figures are only for properties bought with a Halifax mortgage. ALDA says most of "investors" he deals with are cash buyers at the lower end. So it arguable that that the halifax figure could be lower.

I read somewhere that houses usually sell at 8-10% below asking.

A.L.D.A

saverbuyer wrote: »

I read somewhere that houses usually sell at 8-10% below asking.

Thanks that is useful.


Agree with you both regarding the difference between asking and actual price. When people now put forward an offer are they emboldened and knock off 15%? Seems high, but suppose nothing ventured?


Mistral001

If the figures include the larger 'sell offs' then the figures could be misleading as a large development being dumped will have a disproportional effect, and in reality those exceedingly low prices are not an option for your average purchaser as they want 1 house not 40 apartments or even 12 semis!

I wish there was more information on site costs as these will have a more direct influence on future new build costs.

Alternatively the difference actual-asking may explain why my observations in West - North Belfast seem to suggest a larger fall than those graphs. I do know (again just my observation of those around me not trying to suggest any trend) that once houses fall into the £40,000 - £50,000 and certainly any lower some are being bought by people with cash for rental. I think this may, in part, be a reason for the numbers of terrace houses for sale dropping in some areas as the graphs suggest.

I would be delighted if house prices have dropped by over 50%, because unlike professors from Universities I would be asking well realistically how much more? Will the average house in say Ardoyne drop to £35,000. This side of Armageddon I don't think so. When do they become affordable again? The old 3.5 times income plus perhaps once spouse's was regarded as the maximum you should borrow. I think if people are in that category most will weather increases in inflation (stagflation is a different matter). That old money supply approach served well until clever lads started talking about affordability and capital appreciation. Also trying to make predictions for the term of a 25 year mortgage is pointless. There could be war, pestilence, and England may win the next world cup. I am reasonably sure (my guess) that there will be a period of higher levels of inflation as the last decade is abnormal, but even over the last 10 -11 years the value of money has dropped by over 1/3rd so I question some of the more sensational headlines.

It suits me if house and property prices are cheap. Trying to sit back (set wishes aside) and be objective is very difficult. On one hand we have that completely unnecessary mess in the Euro Zone and on the other we have a government that will try to engineer growth. We have falling prices, but also we have had fewer buying and less being built for 3-4 years now. Disposable income is falling, job uncertainty rising, but for how long? Eventually wheels fall off cars, washing machines don't work and businesses have to restock.

joefizz

A.L.D.A wrote: »

The old 3.5 times income plus perhaps once spouse's was regarded as the maximum you should borrow.

and thats the key.
I live in the 'average' house in NI. Prices went to 240k (next door) and currently the same house down the street is on for 105k (rateable value), although the word is that if they get any offer over 90k they will be lucky. People can ask whatever price they like. Rateable value -10-20% seems a good guide for negotiating positions these days.

Average salary here is still only around 20k so by those measures the average house price should be in the region of 80-90k.

Thats in a sustainable market but with reposessions, nama releases, empty developments and banks not having the money to lend there is still a fair way to fall, or at the very least a period of about a decade to level off or acheive some small growth - again driven by banks ability to lend and average salaries. Down south they are considering bulldozing a lot of developments of empty homes because the market will never recover if they are still there. Madness.

wanchai_2

smcqis wrote: »

its stupid as it assumes uniformity throughout NI. Places like the north coast and Templepatrick areas etc havent changed that much as they are sought after areas due to desirable locations

:rotfl::rotfl::rotfl::rotfl::rotfl::rotfl:

Yes, I often hear Templepatrick being talked of as a desirable location!!

As for the north coast, house prices there have collapsed. :cool:

A.L.D.A wrote: »

Thanks that is useful.


Agree with you both regarding the difference between asking and actual price. When people now put forward an offer are they emboldened and knock off 15%? Seems high, but suppose nothing ventured?


Mistral001

If the figures include the larger 'sell offs' then the figures could be misleading as a large development being dumped will have a disproportional effect, and in reality those exceedingly low prices are not an option for your average purchaser as they want 1 house not 40 apartments or even 12 semis!

I wish there was more information on site costs as these will have a more direct influence on future new build costs.

Alternatively the difference actual-asking may explain why my observations in West - North Belfast seem to suggest a larger fall than those graphs. I do know (again just my observation of those around me not trying to suggest any trend) that once houses fall into the £40,000 - £50,000 and certainly any lower some are being bought by people with cash for rental. I think this may, in part, be a reason for the numbers of terrace houses for sale dropping in some areas as the graphs suggest.

I would be delighted if house prices have dropped by over 50%, because unlike professors from Universities I would be asking well realistically how much more? Will the average house in say Ardoyne drop to £35,000. This side of Armageddon I don't think so. When do they become affordable again? The old 3.5 times income plus perhaps once spouse's was regarded as the maximum you should borrow. I think if people are in that category most will weather increases in inflation (stagflation is a different matter). That old money supply approach served well until clever lads started talking about affordability and capital appreciation. Also trying to make predictions for the term of a 25 year mortgage is pointless. There could be war, pestilence, and England may win the next world cup. I am reasonably sure (my guess) that there will be a period of higher levels of inflation as the last decade is abnormal, but even over the last 10 -11 years the value of money has dropped by over 1/3rd so I question some of the more sensational headlines.

It suits me if house and property prices are cheap. Trying to sit back (set wishes aside) and be objective is very difficult. On one hand we have that completely unnecessary mess in the Euro Zone and on the other we have a government that will try to engineer growth. We have falling prices, but also we have had fewer buying and less being built for 3-4 years now. Disposable income is falling, job uncertainty rising, but for how long? Eventually wheels fall off cars, washing machines don't work and businesses have to restock.

I could well see the average house in Ardoyne being £35k - there is very little residual demand to live there. On PN, there are house listed in Ardoyne for under £40,000 and who's to say that they will even achieve those prices? If they sell at all?

A.L.D.A

wanchai wrote: »

I could well see the average house in Ardoyne being £35k - there is very little residual demand to live there. On PN, there are house listed in Ardoyne for under £40,000 and who's to say that they will even achieve those prices? If they sell at all?

In Ardoyne it depends what side of the peace line you are on. Potentially very high demand one side, very little on the other. On the side where the demand is the cheap houses are definitely being bought for rental. Other side of the 'Peace wall' no interest I can discern, but then they didn't really rocket in price in the first place, at least not to the same extent.

joefizz wrote: »

Average salary here is still only around 20k so by those measures the average house price should be in the region of 80-90k.

Don't forget not everyone owns the house they live in. I think UK home ownership is between 63 -68% depending on where you look. Most believe that may drop a few percent. So it is the average income of that group that matters.

joefizz wrote: »

and thats the key.

Thats in a sustainable market but with reposessions, nama releases, empty developments and banks not having the money to lend there is still a fair way to fall, or at the very least a period of about a decade to level off or acheive some small growth - again driven by banks ability to lend and average salaries. Down south they are considering bulldozing a lot of developments of empty homes because the market will never recover if they are still there. Madness.

Don't agree with knocking down houses, better to give them away. It is just plain wrong.

As for the general gloom and doom, on the plus side most people are employed, banks are being recapitalised, long way to go certainly, and exposure to Eurozone etc. But in truth who knows? I think a more turbulent period ahead with higher levels of inflation and weak currency, anyone's guess!

The nub of it for me is if we can engineer some growth in productive sectors, and get our balance of trade into a healthy state. Do that, keep tight control on Government spending, and we will come out of this a lot stronger. Needs a fundamental shift and not just a bit of tinkering here and there. In many ways the South is better placed to recover.

saverbuyer

A.L.D.A wrote: »

In Ardoyne it depends what side of the peace line you are on. Potentially very high demand one side, very little on the other. On the side where the demand is the cheap houses are definitely being bought for rental. Other side of the 'Peace wall' no interest I can discern, but then they didn't really rocket in price in the first place, at least not to the same extent.



Don't forget not everyone owns the house they live in. I think UK home ownership is between 63 -68% depending on where you look. Most believe that may drop a few percent. So it is the average income of that group that matters.




Don't agree with knocking down houses, better to give them away. It is just plain wrong.

As for the general gloom and doom, on the plus side most people are employed, banks are being recapitalised, long way to go certainly, and exposure to Eurozone etc. But in truth who knows? I think a more turbulent period ahead with higher levels of inflation and weak currency, anyone's guess!

The nub of it for me is if we can engineer some growth in productive sectors, and get our balance of trade into a healthy state. Do that, keep tight control on Government spending, and we will come out of this a lot stronger. Needs a fundamental shift and not just a bit of tinkering here and there. In many ways the South is better placed to recover.

There is no demand really, remember transaction levels are at 60% off peak and repos now account for 40% of the market. This demand you quote really can't be seen on the ground. In the UU repost there were 70 more sales than the previous quarter. Hardly a massive increase.

Most people are employed but are employed in the public sector - at a time when massive austerity is needed. They have been on pay "freezes" with high inflation so in effect we all take a pay cut.

Actually NI and Whales have the highest rates of owner occupation in the UK.

What will happen here is what happened with EVERY other crash in history. We will revert back to the long term average of 3.5 time single earnings or somewhere around 80-100K with an undershoot of around 70K.

steveymp

Spotlight (Tuesday night, repeated last night) was quite enlightening :eek: I suppose there are 2 sides to every story, but it's amazing how much of Norn Iron NAMA actually own.

You really have to feel sorry for people trapped in negative equity and the fact they could be in it for the rest of their lives, providing they keep up the payments, is very scary indeed. Some poor souls will lose their home and still be in debt.

Honkycat

Didn't know a whale could get a mortgage!

saverbuyer

steveymp wrote: »

Spotlight (Tuesday night, repeated last night) was quite enlightening :eek: I suppose there are 2 sides to every story, but it's amazing how much of Norn Iron NAMA actually own.

You really have to feel sorry for people trapped in negative equity and the fact they could be in it for the rest of their lives, providing they keep up the payments, is very scary indeed. Some poor souls will lose their home and still be in debt.

And all the while they will be paying interest on the debt. A house he bought for 100k would have cost 200K with interest over the mortgage term.

If there was no bubble it would have cost 50K and cost 100K over the mortgage term with interest. Saved 100k to invest in productive parts of the country.

But his views on "it would be my pension" is typical. Its shelter plain and simple.