Has the housing market hit freefall yet?

talksalot81

championmongo1 wrote: »

I really can't see house prices dropping by 30% unless interest rates were to rise to double figures as people will just hold on to their houses rather than sell them for a loss!

You can see it that way but there are an awful lot of people who purchased with interest rates very low and credit remarkably easily available. As a result there are a lot of people who are at exceptionally high risk. If we did find a recessionary spell, these people simply could not pay the mortgage were a job to be lost. These people could not afford to have children (and if they did, would be in serious trouble), would have to stop taking holidays/buying cars etc because their houses cease to be piggy banks. Then look forward just a little bit and they find their rates jump at the end of their 'fixed' periods. Were there even to be small negative equity (even if they did not sell and realise it), they could not remortgage and would find themselves on SVR which would be the final nail for some.

Then look to the support for the lower end of the market. At current levels, even with the silly credit available, FTBs cannot afford housing. Even if IRs dropped, they still could not afford. That means that demand drops for the lower end of the market. If the supply/demand arguement is to hold any water, it has to go both ways.

championmongo1

You may be right talksalot81 and maybe I may be unable to be fully objective as I am trying to sell a house in the current climate.

However I do feel that the NI economy is strong and new jobs are being created here all the time-look at that company who has re-located 100 jobs from Wales to Northern Ireland. Funding from Europe to help build better infastructure, etc. which will increase jobs albeit only medium term jobs. Then look at the proposals for the Titanice Quarter, Bank of Ireland craeting 20+ new jobs for graduates at full graduate pay, etc.

The future is as bright as it has ever been in Northern Ireland and I hope that now house prices have caught up with the rest of the UK don't start to fall behind again. Prices have dropped on average by 2-8% (going by my local market sale agreed prices) but have now bottomed out (according to local estate agents-hard to trust them maybe, but as I'm selling there is no reason to lie to me). I don't see significant rises or falls in the short to medium term but rather stagnation of the current house prices. Although come spring maybe just maybe prices may increase but only by 0.1 to 0.5%.

Just wish I had that crystal ball....

leftieM

It's not exactly a crystal ball but the OECD published a document called 'Recent House Price Developments: the Role Of Fundamentals.' It's a comprehensive study of some key housing markets across the world and the various factors that influence them. If you have an interest in what is predicted to happen based of interest rates, affordability etc it's a really good read.
However I strongly suggest that you keep it until your house sale has completed!

championmongo1

umm...thanks leftieM-think I'm going to go buy a bottle of whiskey! Only kidding, but experts have been wrong before...

I do wish I had left it untill my house had sold though, lol!

leftieM

I did say don't read it now!!!!!

championmongo1

I know leftieM but as with most of us curiousity got the better of me! I still think Northern Ireland is a different proposition than the rest of the UK in terms of the housing market. We were playing catch-up, got excited raced ahead, dropped a little in most cases but with others dropping more significantly as the speculators all pull out but I think we will stagnate now unless people panic. Houses will start selling again for around their re-aligned asking prices and the world will keep spinning!

P.S. I haven't had any wine yet before anyone asks!

ballyblack

article in today's tele.

http://www.belfasttelegraph.co.uk/homefinder/article3024844.ece

agal

I found that article confusing. They kept saying house prices were falling but what they actually meant was house price rises are falling.
At least I think that's what the article was saying

leftieM

You're right Agal, the article's headline was misleading. The yoy rises have fallen but house prices haven't according to their data. Lies, damn lies and statistics, eh!

bingobangobongo

I knew I shouldn't have read this thread, for some reason it has left me in a solemn mood. As a FTB we bought our house in Feb this year some 8 months ago. We paid 20k over the asking price (bidding war common at the time). We owe an IO mortgage of 150k. House (on paper anyway) is worth 185k.

All this talk of crashes and negative equity is scaring me....another year and a bit and our fixed rate will be finished, hope the interest rates are down by then. I came from a renting background and it was great compared to now when I shell out half my salary on mortgage and bills, and my gf has to do the same.

Sometimes I wish I hasnt bought a house as the prices are so high now I would have been priced out of the market. Ho hum, not sure what my point is