Affordable Housing

jonny68

Can anyone envisage a time when houses especially in Dublin might become more affordable?Will the bottom fall out of the property market?As a normal working class man i simply cannot afford a mortgage and i am not alone,thousands of people are priced out of it,sky high prices means people have to either rent a property or move well out of Dublin which for me isnt an option,opinions please....

Nuttzz

Interest rates would need a serious hike and the bottom to fall out of the rental market combined additional units comming on stream. I dont mean to sound like a snob but what makes you think that you will get a mortgage during a crash if you cant afford it now, Banks are willing to lend more and a very flexible with the whole income level limits at the moment, they would be much more strict during a crash

Merrion

House price growth will be more steady than it has been over the last decade because that was an anomally caused by the country going from net emigration to net immigration which pushed up demand.

This _might_ mean fewer people getting into the buy-to-let as nest-egg type market which would reduce demand and thereby reduce the average house price. However I don't see prices coming down too much because at the moment credit is very very cheap and will be for the forseable future.

How about buying a house boat and parking it in one of the many new marinas that are springing up al over the place? Sorry - no serious ideas as I am in the same position and if I thought of a way round it I'd have done it by now...

antoinolachtnai

Are you above the threshold for affordable housing? It's well worth trying anyway.

It does look like we are going to be locked into a situation where ordinary people working hard can't afford to buy a house.

On the other hand, I think the day of the mega-increases is over. There might even be a drop in four or five years, but it will be very small and not worth waiting for.

FX Meister

I don't think they will come down, maybe just level out a bit. As regards moving out of dublin, you don't have to go that far outside of dublin city to get an affordable house, you can manage it within county dublin. Maybe just get a place a little smaller than you would like, a two bed perhaps.

jonny68

A house boat your having a laugh right Merrion...unfortunately it seems to be a no win situation,i am not prepared to borrow off the banks and get crippled with debt,im bad enough as it is,what this Goverment needs to do is to ensure that at least 20/25 % of all new developments are affordable to your average person who might not earn a great deal of money,i have heard of some developments that have been like that,i remember reading something about it on the Dublin City Council website,for people like myself its the only option im afraid....

mediasoft.md

what are the average prices of houses in dublin? For example how much does it cost a medium apartement with two rooms? Do you know any website showing such information? thanks.

jonny68

Rest assured its expensive my friend,check out these two websites,they will give you an indication...

www.daft.ie

www.propertypartners.ie

FX Meister

You might not be prepared ro be crippled with debt but while some people will be prepared then demand will still be high. It's supposed to be 10% affordable and 10% social. A lot of developments being built now though were given planning approval before this came into effect, that's why there isn't too many yet. But even that system is flawed, a person on the list for two weeks has the same chance of getting a house as a person two years on the list. A lot of builders place all these together and don't spread them out among the estate. I for one would hate to have bought a house beside a load of people who got theirs for free. And estate agants are not very forthcoming when you ask them which area of the estate is social housing.

Sleipnir

jonny68 wrote:

i am not prepared to borrow off the banks and get crippled with debt,

Well that sounds fair.

I (like everyone else) had borrow from the bank to pay for a house but you're "not prepared" to do that cos you don't want the debt that goes with it?

Sure the government should just give you one for free so...

jonny68

Fcuk you and your snide comments,where did i mention anything about the Goverment giving me one for free?I couldnt give a flying **** if you had to borrow from the Bank(and not everyone else had to either)why the hell should i get myself into more debt than im already in,if you`ve nothing positive to add to the thread refrain from posting..... :mad:

Sleipnir wrote:

Well that sounds fair.

I (like everyone else) had borrow from the bank to pay for a house but you're "not prepared" to do that cos you don't want the debt that goes with it?

Sure the government should just give you one for free so...

jd

jonny68 wrote:

Fcuk you and your snide comments,where did i mention anything about the Goverment giving me one for free?I couldnt give a flying **** if you had to borrow from the Bank(and not everyone else had to either)why the hell should i get myself into more debt than im already in,if you`ve nothing positive to add to the thread refrain from posting..... :mad:

Hold on - you already said "i simply cannot afford a mortgage ". How do you propose to pay for your house if it becomes more affordable?

jonny68

I would borrow a lump sum from my credit union (if the house really was cheap) and then go about getting a mortgage with a building society but only one that would not cripple me financially for decades(i wouldnt get a mortgage at this moment in time),something has to give sooner or later in the housing market....

jd wrote:

Hold on - you already said "i simply cannot afford a mortgage ". How do you propose to pay for your house if it becomes more affordable?

madramor

if you take inflation into account, the banks are actually paying you to borrow the money, you cannot afford not to get a mortgage while the rates are so low.
(for a home not investment any more unless right location)

are you using every possible technique to help you get a mortgage

1:say your ssia will help reduce the loan
2:you'll be renting a room
3:your expecting a promotion
4:your getting married, but your partner already owns a house, so
your buying this one in your name to save stamp duty
5:get help from parents
6:find a broker who'll help you lie there out there

therecklessone

Define affordable.

Are you looking for a house or apartment?

Where (in Dublin) are you looking to purchase?

jonny68

House...pref below €200,000 anywhere in Dublin but would pref Northside

therecklessone wrote:

Define affordable.

Are you looking for a house or apartment?

Where (in Dublin) are you looking to purchase?

therecklessone

Try these:

Fingal County Council

Dublin City Council

Bear in mind that a credit union loan will attract an interest rate of at least 7.5% pa. On a €200,000 house you'll need to have €16,000 minimum (most you'll get will be 92% mortgage) plus money for legal/surveyors fees.

A €20,000 CU loan paid back over 5 years at 7.5% will cost you €400 a month, on top of your mortgage.

therecklessone

jonny68 wrote:

House...pref below €200,000 anywhere in Dublin but would pref Northside

I think you're gonna have to bite the bullet and aim a little lower for a start. You'll be lucky to find a house for €200,000, even in County Dublin.

More likely to find a decent sized 2 bed apartment (600-700 sq ft) for around the €220,000 mark if you're buying private.

Of course, if you meet the eligibility requirements for affordable housing then I suggest you consider that route.

jonny68

Cheers for the advice mate......

Merrion

Forgive my being naive - are you saying you can/should borrow the deposit as well as the mortgage? I thought the deposit was to prove you could afford the loan...?

FX Meister

A lot of people are getting the deposit from the Credit Union as this does not show up on any checks the bank does.

therecklessone

Merrion wrote:

I thought the deposit was to prove you could afford the loan...?

Thats what you're supposed to do.

However, creative accounting goes a long way. Borrowing the money then telling a bank/building society that your parents are helping with the deposit is one option. It can of course lead to very awkward questions, as they may look for proof that your parents can afford to provide the cash. A friendly mortagage broker can be of assistance with that.

In my own case (and quite recently), I've had to provide documentation to prove I have €29,000 in savings independant of borrowings, and that involved a credit union account and a bank savings account.

It is not advisable to go down this route, especially if you are stretching to afford mortgage payments. Unfortunately, its a route many people feel they have to take...

antoinolachtnai

Be a little careful with the parental dig-out line. If you are getting more than a certain proportion (10 percent, I think) of the money from someone else, the person who gave you the money may have to fill in a form before signing-time to confirm that they won't make any claim on the property.

This isn't my field (I just signed where the solicitor told me to), so maybe someone legal can clarify this.

It's just a form, and this isn't a big deal, but it is something to be aware of. It's not too smart-looking to tell the bank that your parents have chipped in if you aren't going to get them to sign the form at a later stage.

Obviously it isn't a good idea to borrow the deposit, but we all have to do what we have to do. Let us know how it works out.

FX Meister

If your parents give you the money they may have to sign a form saying that the money is a gift and is not just a family loan.

RainyDay

FX Meister wrote:

A lot of people are getting the deposit from the Credit Union as this does not show up on any checks the bank does.

At least 4 credit unions are now members of the Irish Credit Bureau and loans from these CUs will show up when your bank does a credit check.

FX Meister

Wow, I didn't know that. Do you know which ones? Luckily i don't have to borrow from them but I had to consider it for a while.

Zaph0d

You could live in Ballyfermot for under 200K

Somewhere like this (3 beds, gardens, nr clondalkin station)
http://www3.myhome.ie/search/property.asp?id=207325&p=2&rt=search

Affordable housing is merely a method of subsidising house buyers which has the effect of... increasing house prices.

eg 10 people want to buy a house. There are nine houses on the market. No matter what grants you give the 10 house buyers, one is going to end up without a house.

Only increasing supply or reducing demand can reduce prices.

EKRIUQ

House prices aren't going to go down and any one who thinks they will are fooling them selfs. In the next few years all the first time buyers who bought their houses a few years back will be hoping to trade up and there will be a glut of new buyers on the market looking for a new house and will need a substantial amout of capital from there house to fianace there purchase, plus with the extra population incoming into this country extra housing will be required.

Merrion

..and all those people that put money in SSIAs to grow a deposit will soon be able to withdraw the money...

Zaph0d

TIPPTOP wrote:

House prices aren't going to go down and any one who thinks they will are fooling them selfs.

Nobody knows where prices will go. Here are some events that might make prices drop:

• Introduction of a property tax (Cowen hints this won't happen as it was so unpopular in the past, however it could happen for second homes)
• Rise in the stock market .This would attract property investors getting disappointing rental returns to sell up. (Pretty likely)
• Supply finally catches up with demand: 80,000 houses a year are now being bulit or 5% of housing stock. Higher density blocks are going up around the country. Planners are allowing infill developments. Eventually there may be a glut of houses built.
• Collapse in investor confidence. This can happen over night and is unpredictable (eg tech stocks March 2000). It is preceded by the common belief that the market can only go up.
• Interest rate increases (If the Euro economy recovers which is unpredictable)

FX Meister

Next year supply is supposed to outweigh demand. I've just bought a second hand house in an area where a lot of new houses are being built. I got it at a good price because the majority of homebuyers in that area are first time buyers so can only really afford to go for new homes. It is better built than the new homes and is still cheaper than them. I've got an ssia and I'de rather pay it off my mortgage when it matures rather than wait until then to buy a home as there will be so many others using their ssia for that reason and demand will go up again.

gazzer

You should check the county councils for the affordable housing scheme.

I got one out in Mulhuddart two years ago (Market value was 170,000) for 118,000. I have since remortgaged to buy out the councils share and now have a mortgage with the bank for 170,000. Since then a couple of people i work with (Im in the civil service) have bought houses out in the same estate.

I was lucky in that i got the first time buyers grant and only had to put an extra 2000 euro on for the deposit.. I think at the moment you need a deposit of around 15,000 euro for a house in my estate.

My brother is about to move into a house out near Ashtown station (cant think of the name of the estate)... He is getting a three bedroomed house for 180,000 euro.

Once you are below the income threshold (which i think is 35,000 at the moment) you can apply to go on the affordable housing list.

jd

gazzer wrote:

I got one out in Mulhuddart two years ago (Market value was 170,000) for 118,000. I have since remortgaged to buy out the councils share and now have a mortgage with the bank for 170,000. .

How come the mortgage now amounts to 170k?

gurramok

TIPPTOP wrote:

House prices aren't going to go down and any one who thinks they will are fooling them selfs. In the next few years all the first time buyers who bought their houses a few years back will be hoping to trade up and there will be a glut of new buyers on the market looking for a new house and will need a substantial amout of capital from there house to fianace there purchase, plus with the extra population incoming into this country extra housing will be required.

The population of teenagers in this country is less than those over 21 at present.
When those in their 20s in appartments move on to get houses, alot more appts will be on market in 5-10yrs hence increasing supply in that area.

RainyDay

FX Meister wrote:

Wow, I didn't know that. Do you know which ones? Luckily i don't have to borrow from them but I had to consider it for a while.

Not sure - Here's what Oasis has to say;

In 2004, the Board of the ICB agreed requests to give all credit unions in Ireland the option of becoming members of the ICB. This means that credit unions will, in time, be able to supply information regarding loans and repayments to the ICB. Credit union customers' consent will be required before information can be passed on. There is no fixed date for when the passing of information from credit unions to the ICB will begin.

Tazz T

Zaph0d wrote:

Nobody knows where prices will go. Here are some events that might make prices drop:

• Introduction of a property tax (Cowen hints this won't happen as it was so unpopular in the past, however it could happen for second homes)
• Rise in the stock market .This would attract property investors getting disappointing rental returns to sell up. (Pretty likely)
• Supply finally catches up with demand: 80,000 houses a year are now being bulit or 5% of housing stock. Higher density blocks are going up around the country. Planners are allowing infill developments. Eventually there may be a glut of houses built.
• Collapse in investor confidence. This can happen over night and is unpredictable (eg tech stocks March 2000). It is preceded by the common belief that the market can only go up.
• Interest rate increases (If the Euro economy recovers which is unpredictable)

Best advice in this thread there.

Interest rates are at they're lowest since god knows when and most likely will rise in the coming year, taking their cue from the US.

New developments this and next year are outstripping demand.

Apartment prices are falling.

Rents have fallen for the last two years.

More apartments than ever are 'investment properties' when rents fall and properties fail to sell for the asking price, prices drop. Panic selling by landlords looking to rekindle their investment in a rising stock market combined with rising interest rates would severely hit the housing mariket.

With prices at their current levels, ie; everyone says prices are silly, then first time buyers can 't affrod to buy. Those looking for second homes have no buyers so they drop their price and so it escalates up the chain.

I'm probably completely wrong but all the elements seem to be there for a 'correction' in house prices.

antoinolachtnai

Tazz T wrote:

Interest rates are at they're lowest since god knows when and most likely will rise in the coming year, taking their cue from the US.

I wouldn't hold my breath on this. The weakness of the dollar is what is allowing interest rates to go up stateside. The strength of the euro is keeping them down here. (The reasoning is that the ECB sets the interest rate low to encourage money-hoarders to sell euros because of the low return. Selling, the theory goes, should result in a drop in the price.) Quite likely interest rates will go up eventually though, you are right.

Apartment prices are falling.

Where? Is this the former-section-23-effect? As tax incentives are used up, yes, these are certainly losing value.

Rents have fallen for the last two years.

definitely a fair point. A bit of a puzzle that. Maybe they will rise again? If interest rates went up, I think you might see a corresponding lift in rent. (This is speculation.) Also, as inflation pressures in other spending categories comes under control again (for example, drink, food, furniture, telecomms with the arrival of large international multiples) perhaps the extra money freed up will pile back into rental? Hard to say.

More apartments than ever are 'investment properties' when rents fall and properties fail to sell for the asking price, prices drop. Panic selling by landlords looking to rekindle their investment in a rising stock market combined with rising interest rates would severely hit the housing mariket.

This one is hard to call. Traditionally, Ireland is a country of owners, not renters. It may well be that a shift is happening. If this is the case, then this could be sustainable enough. I don't think Ireland has a particularly high rental: ownership ratio compared to other countries.

Personally, I think that if prices dropped even a few percent, a few things would happen to stop the price drop. First-time buyers would dive in. Corporates would get involved in residential property for the first time. The banks would do anything they could to avoid foreclosing on much property. They certainly won't want to start dumping it.

With prices at their current levels, ie; everyone says prices are silly, then first time buyers can 't affrod to buy. Those looking for second homes have no buyers so they drop their price and so it escalates up the chain.

I'm probably completely wrong but all the elements seem to be there for a 'correction' in house prices.

People (including me) have said this loads of times before. There is no question that there is going to be a 'landing'. The only question is whether it will be a soft one, or of the bum-first variety.

Certainly, be very careful indeed before getting into buy-to-let. I personally don't think the risk of a drop is too material if you are considering buying your first house. You are better paying into a mortgage than paying rent. Even if there is a drop in prices of 5 or 10 percent in three or four years time (which I doubt) you will probably still be better off, because you will be building up some equity in the meantime.

If you can qualify for an 'affordable' house, get in there for sure, that's my advice. Buy two if they'll let you. (I doubt they will.)

Bluehair

As has been seen in any market before it's a fools game trying to predict the property market. People have been predicting a crash for 5 years or more and the longer the 'boom' continues the louder the cries get.

An interesting website is http://www.irishpropertycrash.com/ which puts together a lot of interesting info, make up your own mind.

One thing is definate in my mind however, a lot of us (myself included) are growing up on easy and cheap credit. Everyone I know is in debt up to their ears but not worried in the slightest as they can afford to keep up the repayments. But hey the good times will keep on going forever right?

If you can't afford to buy your own home yet THEN DONT BUY YOUR OWN HOME YET!

antoinolachtnai

Well, be careful about the evidence. Someof the stuff on the site you refer to, particularly the graphs on the right hand side, are overstated (comparing a growth figure for housing to the actual figure for population is deceptive).

When interest rates go up in Europe, it will be because of improvements in the state of the French and German economies (which is another thing that analysts said was going to happen soon, but never actually did). When it does happen, however, it should be good for the Irish economy.

Obviously no one should borrow more than they can afford. But it's a completely different thing to go into debt to buy a useful asset which will last a long time (like a house, which you can live in and which may even appreciate) and going into debt to buy a glamorous, short-lived asset (like a nice new car).

There is never a good time to buy your first house, and they are always too expensive. If you can't afford to buy your own home yet, you may never be able to.