A Complete Explanation Of Everything
Wednesday, February 21, 2007
Twixt momentum and gravity...
... or, I have a headache.
Over on the 'pin (see sidebar), the uber bears are out in force and predicting all sorts of doomsday scenarios and while I agree that pain is on the way and that things aren't rosey in the garden for property in Ireland, I am still caught in two minds.
First off, I think there are things happening here that are beyond the bubble, I'm convinced that the 2x salary multiple has had and will have a lasting effect on the price of semi-ds / detached properties in Dublin. Poor quality, crap location will fare badly for a time but I just get to thinking that places on the metro and with good transport links (or rather just better than one donkey every three days) will fare ok.
Sure, a contraction in price but I'm not seeing the return to 2002 levels that some people are speculating. I think we'll be lucky to reverse the 50% House Price Inflation on new builds that occurred over the past 16 months in the Dublin area. That would be a return to value for me.
Ireland is a strange and wonderful place and it's done some strange and wonderful things to us. Basically, we're masochists on a level. We live in a crap climate unless you're farming, and consequently we've signed ourselves up to the social ills that are likely when half the day is in darkness. Then we've excacerbated that by failing to create community spaces, a terrible approach to planning and infrastructure at almost every juncture, whether it's Luas or the M50 or housing and yet, despite all that.
I'm still contemplating getting a place and settling in for the long haul.
What on earth is wrong with me?
Maybe I lack guts, the guts to go and try in Canada or New Zealand but the prospect of turning up with a backpack, a suit and a CV and starting over sure doesn't thrill me.
And so, I'm caught in the old bind.
I want to get my own place.
But it doesn't thrill me when people say you'd be mad to buy anything property wise right now.
To me, they're ignoring a fundamental reality of living in Ireland.
Mortgages always, always were a burden until relatively recently (and only for a short holiday in the sun period as we're now learning) and people used to scrape by, with crazy interest rate hikes and all that.
I think it's always been difficult and it's unlikely to be utopian in the future.
Waiting around, as people have pointed out, means you get cut by the other side of the double edged sword.
Declining affordability.
ECB rates rises projected for March and a possible further fall in June will hit borrowing capacity.
So caught twixt momentum and gravity, you're faced with a choice of biting now and holding on for all your worth or letting that hook disappear upstream, possibly forever.
Fine, I'm headed for the catch net and a descaling and a gutting and I'll be the bank's dinner.
But maybe that's just life.
Over on the 'pin (see sidebar), the uber bears are out in force and predicting all sorts of doomsday scenarios and while I agree that pain is on the way and that things aren't rosey in the garden for property in Ireland, I am still caught in two minds.
First off, I think there are things happening here that are beyond the bubble, I'm convinced that the 2x salary multiple has had and will have a lasting effect on the price of semi-ds / detached properties in Dublin. Poor quality, crap location will fare badly for a time but I just get to thinking that places on the metro and with good transport links (or rather just better than one donkey every three days) will fare ok.
Sure, a contraction in price but I'm not seeing the return to 2002 levels that some people are speculating. I think we'll be lucky to reverse the 50% House Price Inflation on new builds that occurred over the past 16 months in the Dublin area. That would be a return to value for me.
Ireland is a strange and wonderful place and it's done some strange and wonderful things to us. Basically, we're masochists on a level. We live in a crap climate unless you're farming, and consequently we've signed ourselves up to the social ills that are likely when half the day is in darkness. Then we've excacerbated that by failing to create community spaces, a terrible approach to planning and infrastructure at almost every juncture, whether it's Luas or the M50 or housing and yet, despite all that.
I'm still contemplating getting a place and settling in for the long haul.
What on earth is wrong with me?
Maybe I lack guts, the guts to go and try in Canada or New Zealand but the prospect of turning up with a backpack, a suit and a CV and starting over sure doesn't thrill me.
And so, I'm caught in the old bind.
I want to get my own place.
But it doesn't thrill me when people say you'd be mad to buy anything property wise right now.
To me, they're ignoring a fundamental reality of living in Ireland.
Mortgages always, always were a burden until relatively recently (and only for a short holiday in the sun period as we're now learning) and people used to scrape by, with crazy interest rate hikes and all that.
I think it's always been difficult and it's unlikely to be utopian in the future.
Waiting around, as people have pointed out, means you get cut by the other side of the double edged sword.
Declining affordability.
ECB rates rises projected for March and a possible further fall in June will hit borrowing capacity.
So caught twixt momentum and gravity, you're faced with a choice of biting now and holding on for all your worth or letting that hook disappear upstream, possibly forever.
Fine, I'm headed for the catch net and a descaling and a gutting and I'll be the bank's dinner.
But maybe that's just life.
posted by Christophe at 21.2.07
2 Comments:
"Fine, I'm headed for the catch net and a descaling and a gutting and I'll be the bank's dinner."
Very lyrical my dear in a way that I can't quite...define. Not quite Nirvana, but not exactly Celine Dion, either.
The problem - as I see it - is this. If you're in a position to buy somewhere for the medium term that ticks say 70% of your boxes, which is useful for work and which doesn't depend on a "and I'll trade up in 2 years' time" plan as a get out clause, then go for it.
The problems arise if you pay more attention to the money/affording side of things than utility.
I mean, you're over the age of 18 at this stage, and I'm guessing you're reasonably attached to reality.
The Uberbears are out in force today because a bull rambled in (admittedly not wearing quite enough body armour to start with) but they'll quieten down.
I'm not in tune with blanket "you'd have to be mad to buy property" statements as realistically, each decision is made on a case by case basis. I know where you're coming from, and I know how you feel about needing/wanting your own place. I feel it too although I'm spectacularly failing the box ticking at the moment. What I don't know is what you want to buy and I don't know enough about your life to tell you that it's a good or bad decision.
Mostly I hold out because of the utility side of things. I'm not a gambler by nature, and my first criteria would not be "can I hold out long enough to get the bottom?" That's gambling of an inverted kind.
At the end of the day - if you've the guts to sit down and figure out what you want, what you need, what's available to you, and how it will impact on your life, then I don't see how anyone can criticise your decision regardless of what it is.
One of the big problems with the property market in Ireland, I think, is that the utility value of houses has become seriously under-valued. I don't get the impression though that you're starting from the position of "I have to have a house because you have to have a house", but you're looking at it from the position of how you want to run your life.
Does that make sense? I could say a lot more but this is your site after all and I've got my own to yammer on at length about stuff so...
As you've correctly identified Treasa, it's all about utility value which the folks on the 'pin seem to forget will always force people into these choices.
I'm going to have a look at a few places shortly, I think.
Post a Comment
<< Home