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Predictions Please
Japan Style damage 35%  35%  [ 64 ]
England 1989- Damage 24%  24%  [ 43 ]
Less than England 5%  5%  [ 9 ]
Worse than Japan 36%  36%  [ 65 ]
Total votes : 181
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 Post subject: The Best and Worst Case Scenarios - Your predictions here
PostPosted: Sun Feb 25, 2007 10:52 am 
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What will the future hold - what do you think?


Last edited by Blindjustice BATONEFFECT on Thu Mar 08, 2007 10:09 pm, edited 1 time in total.

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 Post subject:
PostPosted: Sun Feb 25, 2007 4:12 pm 
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Best case 20% decrease over 2 to 3 years then steady out with slow growth.

Worst Case 50% over 4 - 5 years then long slow winter of discontent where prices rise slow than inflation perhaps picking up to another bubble in 2015 to 2020. There might be a recession on the horizon for us in this sceanario.


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 Post subject:
PostPosted: Sun Feb 25, 2007 5:04 pm 
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http://www.sbpost.ie/post/pages/p/story.aspx-qqqt=NEWS-qqqs=news-qqqid=21320-qqqx=1.asp

In this senario things could get very nasty indeed.The blame game could go on for years.


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 Post subject: Recession
PostPosted: Sun Feb 25, 2007 9:00 pm 
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Given the construction sector accounts for over 20% of GDP and 13.6% of employment, even a 'moderation' of growth in residential construction (which accounts for 2/3 of the sector) would be a significant drag on our economy.

Whereas a few years ago there was a severe shortage of housing in Ireland, this is no longer the case. We are now only slightly below the average dwelling per capita levels in Europe, if we continue to add supply at the current rate we would have an above average supply within about 2 or 3 years. This is of course assuming our currently high rate of population growth also continues.

The interest rate rises (with more yet to come) impact affordability of property, and also reduces the spending power of people with mortgages.

I think recession is inevitable within a couple of years. The SSIA's will cushion the blow this year, but 2008 is going to be when the real economic pain begins. I honestly wish it weren't so.


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 Post subject:
PostPosted: Mon Feb 26, 2007 8:15 pm 
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If economy heads south and there are lay offs on a grand scale, then this will certainly affect the rental market as well as the purchasing/selling market.

There may be forced sellers, due to loss of job and inability to afford mortgage, but on the other hand, there will be people seeking rental on SW terms.

if I lose my house, it is a disaster for me. However, if i am a landlord, then there will be more people seeking rental. Downside here could be that the foreign lads will head off home and there will be more houses aailable for rent.


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 Post subject:
PostPosted: Tue Feb 27, 2007 3:32 pm 
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Best Case

Property values suffer 5 to 7 years of stagnation causing real values in todays terms to fall 25 to 30 %. Immigration grinds to a halt, the banks hold it together, the EU bails us out to keep the show on the road. Unemplyment starts to rise 7.5 to 9 %. Public confiiadence detiorates but this results in more prudent spending and wage negotiations focus on our competitiveness and over 5 to 7 years we restore a manufacturing base and service sector exports as solid sectors within our economy. basically we get a hangover but get away without more serious complications.

Worst Case

Property values suffer significant cascade effect price falls with sellers rushing for the door. The contruction sector suffers collapse. Government revenues collapse, government spending is slashed to meet European stability pact limitations, public sentiment collapses, recent immigrants return home or head for the UK. Banks facing large scale foreclosure suffer significant liquidity problems while empty housing stock proves
impossible to sell. Real GDP falls by 2-5% in one year. House prices halve. Ireland suffers significant social upheaval as unemployment, racism, extreme politics and crime go through the roof. Not pretty.
Essentially there is blood on the streets!


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 Post subject:
PostPosted: Sat Mar 03, 2007 4:24 pm 
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Post the bubble ....

members of the TPP pick up "cheap" properties, having saved their pennies, start to invest as the previous generation of now "ruined" investors are forced to sell out.

As ownership increases amongst the membership, the tone of most posts begins to move to when the market will begin to swing up again. Old favourates Dr. Dan and Austin Hughes will be quoted as scripture. The much anticipated up turn will be hearleded as the triumph of investment strategy.

TTP goes "off line" without warning, returning within days as "The Property Portfolio" ... with a new logo depicting a shiny 4 bed semi in south co. Dublin and a rampat bull in the perfectly manicured fornt lawn.

Jimthereaper makes a timely return to inject a dose of "reality"

:lol:

Blue Horseshoe


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 Post subject:
PostPosted: Sun Mar 04, 2007 1:57 pm 
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There's no good reason prices can't fall to 25% of their current value. They did in Tokyo, for example.

Frankly, €80,000 for a 4 bed in Ranelagh is perfectly reasonable and in line with property prices in similar areas around the developed world.

That said, this shouldn't produce a huge meltdown in the Irish economy. If anything, it'll make multinationals more likely to postpone pulling out as the workforce will have lower living costs and will not demand such silly wages (silly by global standards, of course, not local). The public sector will do OK.

That's two portions of the economy guaranteed to do well. Whatever government exists will set up a huge public works campaign to employ those hit by the property crash, let's assume 15% of the workforce.

Within 3 years, the economy will be back on track and near full employment.

Those who lost their jobs will be in public works for a while, then they'll get jobs in the services sector.

Remember, there's plenty of under-30s who haven't nailed themselves up for mortgages yet: their spending will save the economy from 80's style disaster.

Several Irish banks may disappear, but ABN Amro or HSBC won't be wiped out by a Dublin property bubble popping.


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 Post subject:
PostPosted: Sun Mar 04, 2007 4:22 pm 
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Blue Horseshoe wrote:
Post the bubble ....

members of the TPP pick up "cheap" properties, having saved their pennies, start to invest as the previous generation of now "ruined" investors are forced to sell out.

As ownership increases amongst the membership, the tone of most posts begins to move to when the market will begin to swing up again. Old favourates Dr. Dan and Austin Hughes will be quoted as scripture. The much anticipated up turn will be hearleded as the triumph of investment strategy.

TTP goes "off line" without warning, returning within days as "The Property Portfolio" ... with a new logo depicting a shiny 4 bed semi in south co. Dublin and a rampat bull in the perfectly manicured fornt lawn.

Jimthereaper makes a timely return to inject a dose of "reality"

:lol:

Blue Horseshoe


:lol: , that was the initial plan but i'm not so sure any more.Even when i think we've reached the bottom,i'm goin to carefully examine my options.
There's not much point in having the ability to buy 3 or 4 properties if everyone else is leaving the country.
Look at the EU accesion states this was meant to be the good times for them,but their populations are leaving in droves.
IMHO the goods times will only start when all the money their earning in other EU states,begins to be repatriated home.
The next boom will be eastern europe for sure.


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 Post subject:
PostPosted: Tue Aug 14, 2007 8:41 am 
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I think that with the exception of announcements of confirmed large scale lay offs in the construction industry that everything else is lining up for a worst case scenario.

Only time will tell and the next few months for the money markets will be crucial as it will be for the construction industry.


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 Post subject:
PostPosted: Thu Feb 28, 2008 5:45 pm 
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This thread is over a year old....

how about some updated predictions :D

Now that we have some projections for residential construction output
Since the thread began the stock exchange has had its ups and downs, mostly downs
We have a small increase in unemployment - is the economy absorbing the losses with ease or
would I be far out and cynical to suggest that the 18k losses in constuction were offset purposely
with a once off increase in civil service recruitment because it was an election year?


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 Post subject:
PostPosted: Mon May 05, 2008 1:12 pm 
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We haven't started to see the worst yet...

It's when the repo's start....

that's when we'll see the pain...

people still hanging on


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 Post subject:
PostPosted: Mon May 05, 2008 2:07 pm 
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Still in opening skirmish mode, yeah.

It's back the 80s all the way for me now. I can't see any way to stop the slide. The entire political class seem to be oblivious to the problem so nobody is even thinking about doing something; the entire country is still floating on an ocean of spin, waffle and denial; and the only sector of the economy that looks like making money over the next 2-3 years is agriculture!

How the hell did we find ourselves in such a position? Oh yeah, we put Ahern in charge :roll:

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 Post subject:
PostPosted: Sat Jul 19, 2008 3:46 pm 
Sidewinder wrote:
Still in opening skirmish mode, yeah.

It's back the 80s all the way for me now. I can't see any way to stop the slide. The entire political class seem to be oblivious to the problem so nobody is even thinking about doing something; the entire country is still floating on an ocean of spin, waffle and denial; and the only sector of the economy that looks like making money over the next 2-3 years is agriculture!

How the hell did we find ourselves in such a position? Oh yeah, we put Ahern in charge :roll:


Its a bit more than that I think. We've been reminded we're one of the world's most open economies for the last ten years. We had a chunk of inward foreign investment in the 1990s and early 2000s that gave money to buy houses at the same time as boosting population - less outward migration and more inward - just as the baby boom generation was ready to be lured into the housing market. There was need to boost housing production - it was done but to a poor building standard that is going to cost a fortune to heat.

The economy overheated very quickly and by 2002 our competitivity and export performance started to slide. Government used up the profits of the real boom to generate a fake one based on construction and public service jobs expansion.

At this stage, to make sure that construction warmed up from overheating to incineration levels they threw in tax cuts (more money), tax incentives for building, a massive road building programme all of which fuelled building cost inflation. House price inflation was boosted by development contributions for infrastructure and other tax and most importantly by a long period of low interest rates held by the ECB because of the stagnant German economy. Half of the cost of a house was going straight to the government who recycled the loot as public sector wages and vanity projects. The two things most important to their "knowledge-based economy" - third level and broadband - were starved of resources.

As supply overtook market demand in 2006 -7 the Banks sold off their own property portfolio and leased. That didn't stop them lending on the back of overvalued property securities. Were there bonuses involved? Were there F!

With our economy having moved from one of the most to one of the least competitive in Europe in less than 10 years, the well paid jobs began to pack up and leave.

The US recession hit bank's liquidity, oversupply and slacking demand with fears of unemployment pushed prices into a steep slide. The German economy has sparked up and interest rates will be high for as long as the Germans have any fear of inflation. Trichet told us last week to F off with our basket case economy and take the pain. Construction jobs are evaporating and manufacturing going to Poland or contracting because of the US and UK recession. Options for emigration are poor.Retail business is down to the level of 21 years ago.


Even if anyone was buying houses half the country has not sewerage capacity left and can't be built on. A sizeable slice of the population even in the boom couldn't afford to buy and very little social housing was built. The waiting lists are enormous.

There is a real danger of a collapse of Irish banking, with the Irish government not allowed to bail out without the OK of the ECB.
Bank Santander - Parisbas or whatever in Ennis High Street in five years any bets?

Unlike the 1980s, we have the gathering together of spiralling construction and non-construction unemployment, rising interest rates, liquidity crisis with end-of-oil petrol and food inflation. Personal debt is much higher than in the 80s.

Your worst case scenarios look rosy to me.:D


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 Post subject:
PostPosted: Sat Jul 19, 2008 4:24 pm 
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I think a Fibonacci retracement would be very applicable to this bubble,if you take around Euro 70,000 as the starting point (mid 90's)and around Euro 370,000 as the absolute peak for the average three bed bungalow in the country this would give the following retracements:

23.6% E300,000
38.2% E256,000
50.0% E221,000
61.8% E186,000
76.4% E141,000

23.6 can be ruled out as it will be exceeded in the next couple of years,I think due to central bank intervention in the form of hyperinflation(the alternative is to let the banks go to the wall -which do you think they will choose?)that leaves 61.8 and 76.4 as too extreme for the banks balance sheets to tolerate,38.2 and 50 seem the most likely,it all depends on how interventionist the ECB gets and the degree of intervention of the government.

When these corrections are viewed against the massive rise in prices it will provide very little relief or hope for those struggling to get on the ladder,and as prices fall, those desperately waiting for lower prices will in fact help suppport prices on the way down by buying on every dip and in the process limit further falls.

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