No one seems to be chatting about what will happen when the number of homes for sale shrinks back. I've heard all about the tactics that are being used to find buyers, I've heard about developers closing up sites and giving up on building, and I've heard about what EA's and others think, but I haven't heard what is going to happen when the for sale boards come down and there isn't much on the market.

My personal prediction is that the fewer properties on the market, the more stable it will get. We've probably seen the back of significant price rises for some time to come, and there may well be more drops to come, granted, but there is too much stock on the shelves and it's not shifting even with reductions. The best tactic EA's could use to steady the market is to take about 80 or 90% of their houses off the books. Let's face it, at the moment the market is swamped, and because a few people are desperate to sell some asking prices are dropping. We've all seen the big market stalemate, it's been an interesting hobby horse for us, but we also have all seen the effects a comparitive shortage of properties in 2005/6 had on buyer behaviour. Keep watching those Property News figures is my advice!

Morning mnc! Interesting that you should post this. I posted something similar (albeit with a built in conspiracy theory) last night over here:
http://www.housepricecrash.co.uk/forum/ind...st&p=961340

But not for long.



What shortage? There was no shortage. A shortage is when you can't rent either - like in Dublin on the 90ies, or when the rents go through the roof too. They never did. There were enough houses for all people living in NI, just not enough for ROI and other foreign speculators (who are going to sell, not buy, in the foreseeble future).

In the new developments thread I posted about the 6000 houses planned for Carryduff. There are endless big sites with a few houses built on them (Magheralin to quote one). There will be no shortage of houses. What there will be a shortage of is fools to buy them to let and invest to capital gain. There will be a shortage of sub-prime loans for FTBs who cannot afford the current prices. I don't think it will get stable any time soon. EA's can try and persuade people to take their houses off the market but if they need to sell because of over-extending themselves or divorce or need to move for work or size up then they will keep their houses on the market. EA's need turnover to survive. The only way to get turnover is to persuade their clients to reduce their prices to an affordable level for the FTBs to get the chains moving again.

All very valid and rational points doccyboy and I heartily concur.

Nothing, because people will have already bought houses.



What happens now is that EAs go to the wall.
People who need to sell (divorce, moving jobs, etc..) will continue to lower their prices until they get a sale.
The effect this will have is that the average price will continue to drop.
When people see this happening they will look to move to a bigger, cheaper house and the market will continue to function at a lower price and volume levels.


If people try to sell and the EAs remove property from the market then those trying to sell will simply go to another EA.
EAs dont control supply to the market nor do they control prices.

You're new to all this, arent you?

and here's another 5,000 NI homes over the next three years...

http://u.tv/newsroom/indepth.asp?pt=n&id=87129

Yes there was a percieved shortage and a percieved high demand and that's all it needs to be "percieved". Put it like this, why are EA fees so low here compared to other places? Because they've been battling for business, for two years they couldnt get houses on quick enough hence all the junk mail landing in our hallways. It was so easy peasy to sell houses that we even saw the birth of the idiot fixed price agent who can't charge more and will have to go bust as a result. I mean to say who can make money flogging (unaffordable and undesirable) £300k houses at a fee of £950 a pop? These fools should have gone to Monte Carlo and had much more fun going bust there than in their little offices in dreary Belfast!

Oh, the high demand was quite real! Yesterday's fermeiori, who had just traded their gum boots and dirty overalls for slick shoes and three-piece suits and felt themselves "fir gnó" could buy up all of NI and more, not just the few thousand chicken-coops that actually changed hands while the insanity lasted!

The shortage (of abstract objects of investment, not of dwelling units), however, was exclusively due to an unusually high demand. This ain't comin' back, not in our lifetime, trust me.



Maybe because there was so little EA work involved in 1996-early 1997? Any derelict "property" would have a bidding war without the EA ever bothering as much as woo the buyers. Remeber the way the <...> did "showings" in the recent past?



IMHO, that particular guy seems to be one of the sanest. I have met him, and can testify that he knows what's going on, unlike some others, who are in a La-La land.

I agree that the conditions that created the excitment in the market won't happen again, but all these houses can't stay on sale forever, their owners will give it up and people won't bother marketing not to mention the development sites that are being shelved indefinately. Why all these people are trying to sell now makes no sense, hands up who wants to buy!. Also your "particular guy" could be one of a few such EA,s, the £950 is just for illustration, but the fact that this is his business plan makes me wonder if he's really that clued up. The reality is they're all wasting their time and wasting their money in such ventures. Any accountant with a crayon and a sheet of chip paper can surely figure out that low magin sales only work if there are sufficient sales volumes and who here thinks that, that is a possibility? When the house sales start to happen again there will be fewer EA's and they will have to charge more to compensate for lower volume sales and more expense, the fixed fee guys are stuffed. This rough patch is only the start of it, the property business is going to be very, very tough from here on, particularly if the market continues to be overloaded as it has been for approx 1 year now.

I agree, but there is a huge amount of property in NI that is not being held by an OO. When the forced selling/panic selling kicks in during the year, we will begin to see prices collapsing. Watching more and more EAs give up will be very enjoyable too.
Several here have noticed individual OO property being withdrawn from the market, and yet inventory is rising more quickly as the Spring selling season arrives.
Yes we will go back to EAs charging 1-1.5% again to cover costs, but this will not be so easy for them. The more established agents, with the flash cars and offices may find that the newer guys with less overheads may do better than expected
INTERESTING TIMES

Excuse me but I am baffled about this shortgae of properties, it certainly does not apply in North Antrim, I live on the outskirts of a small village population 300, I know all the stats in detail because even though I am a comeover Englishman I am the Treasuerer of the local community association and we make it our business to know everythng that is going on particular in respect of the ability of the local infrastuctures ability to cope and any destruction of local habitat etc.

The Vice Treasurer and myself also sit on the Borough inter agency committee which includes the NIHE, DOE, PSNI, NITAP DRD and the CFNI.

There are ten development sites, six that have not turned a sod in three years the four further ones that started about 3/4 years ago.

If all of these sites were developed the population would rise to around 1,100 a very conservative estimate

Number one a small one with six town houses lay empty for three years some got flipped a few times but not sold to O/Os a few have tenants others are still for sale or rent £360 PCM.

Number two the smallest three towns hiuses two lying empty on with a tenant.

Number three eighty houses first site owner put the sewers in five years ago then dissapeared for two years, I spotted his car on sitetwo years ago, got into him and asked when he was starting building, with a big smile and like a native American trying to light a fire in the snow with two sticks he rubbed his hands together and said, I ain't building no houses to lie empty Ive sold for £3.5M I[m out. new owner has built about a dozen and is now pulling out when the last few are finished.

Only three have sold, the first buyer a BTL approached me last summer and mentioed tht he needed a tenant and if I new anyone, still lying empty.

Number four completed the first six three years ago three bed semis nice location big gardens and drive parking for two/three cars, all sold straight away at eighty two grand a piece, none occupied for two years but got flippe over and over in ten fifteen grand increments to £190K, developer just finished the second phase of a dozen, put them on the market at £185K with two months has dropped them to £149,500K one sold.

One of the sites for about a dozen new builds with full planning is for sale at £1m te devekoper told me personally last sprin he was not devoloping it because he had new builds all over coming out of his **** and could not shift them at any price.

Another village about six miles away has a shedload of nice new build bungalows and houses beenlying empty for four years. another village a bit further away has around fourty new bulf four beds that cannot be sold even though they have been reduced by £40K.

Our favourite North Antrim EA has dozens of development sites for sale some on the market for two/three years not shifting.

I was at a Housing Executive tenants representatives committee meeting this week with our vice treasurer this week and we were advised they have not got a single void and the demand was immenseand increasing..

I was approached early last year by a developer or speculator to sell my own place for coping because of the large slice of land for mental money, I don/t think I will get another offer like that again for years, if ever.

Just cannot see where the idea of a shortage of houses is definitely is not North Antrim.

I believe there must be a drop of 50% in a lot of areas before the stock starts to shift and even then thre will be a surplus.

Great point, Serpico - from someone who has seen it all before

I think this may be an example of what Serpico is discussing - a development of houses at Mosside - plenty to choose from.

http://www.propertypal.com/agent/frank_a_m...#property/12778

Yes in the early 198os high interest rate that hit thousands of businesses never mind the ordinary working joe, I had a five bed drum in one of the most expensive villages on the Wirral, two triple garages three acre garden, large orchard, new built stable block and tackroom, all weather riding school and a large six acre turnout field no mortgage but.

Secured by the bank with a personal guarantee for business overdraft, valued by their surveyor at £250K took over a year to sell, just one punter a neuro surgeon bid £110 and the house and grounds were all mint.

The market does recover ready for the next crunch but it takes a decade, that place sold twelve months ago last May for £985K, the guy who told me worked for me had a veiwing just out of curioity and said the place was very neglected in need of a lot of serious money to get back to how it was twenty five years ago and it was unoccupied.

The important issue today is the enormous personal debt, in those days few people had a lot of debt credit cards were rare, borrowing was on hire purchase with strict rigorous vetting and a proper cash deposit and the loan was restricted to three years, this was even for small loans as little as £100 just one little CCJ and you could forget it. Mortgages were hard to get and strictly x3 on only the males wages after a personal interview with the bank or BS manager anyting iffy and the least iffy and and a lender or broker lost their credit licence.

It was 15% interest that caused that crash with businesses closing and the loss of jobs. This time it IS the uncontolled persomal and high multiples of mortgage debt with little or no deposit that will be the catalyst.

This is another example of confusion about what 'demand' actually encompasses. Demand for football world cup tickets is always enormous. But if the tickets were priced at £10k each, the real demand would be quite small because normal people just could not afford it. Same with housing. The number of houses is almost irrelevant if people cannot afford them. Even if only one house was for sale in the entire privince, if nobody can afford it, it will not sell. It is that simple.