Central Bank to limit amount banks lend for home purchase

Bob24

The Spider wrote: »

Dunno, every report is pointing to rising prices, daft, myhome etc. Yeah based on asking prices but what else can they base them on?

Maybe on actual selling prices? (which is data we have with the PPR and the CSO)

The Spider

Bob24 wrote: »

Maybe on actual selling prices?

Again red herring, you can check the ppr, or they can go through the huge trouble of changing the way they do analysis, not going to happen.

Besides if asking prices showed drops I doubt somehow people around here would be shouting about selling prices, and they'd all praise the daft report for its accuracy.

Bob24

The Spider wrote: »

Again red herring, you can check the ppr, or they can go through the huge trouble of changing the way they do analysis, not going to happen.

CSO and PPR based reports are already being produced, what do you mean not going to happen?

The Spider wrote: »

Besides if asking prices showed drops I doubt somehow people around here would be shouting about selling prices, and they'd all praise the daft report for its accuracy.

You are assuming that everyone is just picking whichever figures fit their narrative regardless of how relevant they are. I don't think it is the case and many posters have been consistent in saying the PPR is the best indicator (whether it is pointing up or down).

The Spider

Bob24 wrote: »

CSO and PPR based reports are already being produced, then don't need to happen.



You are assuming that everyone is just picking whichever figures fit their narrative regardless of how relevant they are. I don't think it is the case and many posters have been consistent in saying the PPR is the best indicator (whether it is pointing up or down).

Nope all I'm saying is, that there is no sign of anything slowing down, and there actually hasn't been any falls in prices, a slowing of the rate of increase in Dublin and a pick up in the rate of increase outside Dublin, banks aren't throwing silly money at people, we don't have a huge building industry to collapse, for the life of me I can't see what will cause falls in prices, except wishful thinking and some vague hope that prices will seem unreasonable to people.

In regard to posters quoting the ppr, the only evidence that will be acceptable to me is if it can be shown that a series of houses in an area actually sold for less than last years prices, not for less than the asking, that means nothing and doesn't show a drop in prices.

Bob24

The Spider wrote: »

Nope all I'm saying is, that there is no sign of anything slowing down, and there actually hasn't been any falls in prices, a slowing of the rate of increase in Dublin and a pick up in the rate of increase outside Dublin

PPR and CSO figures are saying Dublin prices are decreasing ... you have every right not to trust the figures but I don't understand how you can't acknowledge that.

The Spider wrote: »

In regard to posters quoting the ppr, the only evidence that will be acceptable to me is if it can be shown that a series of houses in an area actually sold for less than last years prices, not for less than the asking, that means nothing and doesn't show a drop in prices.

Well this is exactly what the PPR and CSO figures are saying ... on average a property in the Dublin area in January or February 2015 has been selling for less than in December 2014.

If you want a more granular analysis (same street, same size, same condition) I don't think you can find it anywhere (including in the Daft or Myhome studies you posted).

The Spider

The Spider wrote: »

Dunno, every report is pointing to rising prices, daft, myhome etc. Yeah based on asking prices but what else can they base them on?

Not one report or analysis has said prices are falling, the closest anyone has said is prices in dublin were rising at a lower rate, that's still rising.

As far as I can see all the talk about prices falling is just wishful thinking, not on reputable source has come out and said it, apart from Internet posters who missed the boat in 2012, and are trying to use their mind powers to turn the market.

(I do however know that changes can be picked up here or on the likes of the property pin way before the media admits it)

However there seems to be a touch of desperation from people shouting for drops, nothing that I can see points to it, supply is down and the economy is going from strength to strength, in those circumstances barring external shocks I really don't see how prices can fall.

UK pulling out of the euro however may grant that wish.

If you won't accept the CSO and PPR as reasonable sources of data (imperfect though they are), how about the Indo and estate agents?

House price trends reverse in first three months as regions rise and Dublin falls

Almost 100 houses sold each day but Dublin values falling

It's very very confusing to witness prices rising and falling at such different rates across the regions

The message is that Dublin is on the slide and they (estate agents!) reckons the commuter belt will follow and then the rest of the country (which are on the up for the moment).

Mongfinder General

Deleted User wrote: »

If you won't accept the CSO and PPR as reasonable sources of data (imperfect though they are), how about the Indo and estate agents?

House price trends reverse in first three months as regions rise and Dublin falls

Almost 100 houses sold each day but Dublin values falling

It's very very confusing to witness prices rising and falling at such different rates across the regions

The message is that Dublin is on the slide and they (estate agents!) reckons the commuter belt will follow and then the rest of the country (which are on the up for the moment).

Some of the dreamers have wised up, stopped fawning over semi d's in SCD and are now looking in places where they actually have a chance of buying

Piriz

The Spider wrote: »

Nope all I'm saying is, that there is no sign of anything slowing down, and there actually hasn't been any falls in prices, a slowing of the rate of increase in Dublin and a pick up in the rate of increase outside Dublin, banks aren't throwing silly money at people, we don't have a huge building industry to collapse, for the life of me I can't see what will cause falls in prices, except wishful thinking and some vague hope that prices will seem unreasonable to people.

In regard to posters quoting the ppr, the only evidence that will be acceptable to me is if it can be shown that a series of houses in an area actually sold for less than last years prices, not for less than the asking, that means nothing and doesn't show a drop in prices.

CB rules on mortgage lending!

Mongfinder General

Piriz wrote: »

CB rules on mortgage lending!

How are these rules being enforced right now?

Piriz

Mongfinder General wrote: »

How are these rules being enforced right now?

To the best of my knowledge they are not being rigidly enforced for people who got approval in principal prior to the rules coming in. Aside from this, I expect they will be enforced appropriately. Do you have information to the contrary?

DublinDilbert

Mongfinder General wrote: »

How are these rules being enforced right now?

Yes they are. Heard it from both Aib and Boi. Have an approval in principle with both, one times out this month the other next month. Advisers both said new rules will apply if/when I try to renew it.

Mr. teddywinkles

The Spider wrote: »

Nope all I'm saying is, that there is no sign of anything slowing down, and there actually hasn't been any falls in prices, a slowing of the rate of increase in Dublin and a pick up in the rate of increase outside Dublin, banks aren't throwing silly money at people, we don't have a huge building industry to collapse, for the life of me I can't see what will cause falls in prices, except wishful thinking and some vague hope that prices will seem unreasonable to people.

In regard to posters quoting the ppr, the only evidence that will be acceptable to me is if it can be shown that a series of houses in an area actually sold for less than last years prices, not for less than the asking, that means nothing and doesn't show a drop in prices.

I just cant understand if prices keep rising where people will get the money to buy. Makes no sense. Rise the price all you want you just wont sell. A limited amount of property or not

Mongfinder General

Piriz wrote: »

To the best of my knowledge they are not being rigidly enforced for people who got approval in principal prior to the rules coming in. Aside from this, I expect they will be enforced appropriately. Do you have information to the contrary?

I don't have any evidence to suggest that the rules are not being enforced. I just wonder if the Regulator has the staff numbers or systems to check every mortgage approval against the rules?

Piriz

Mongfinder General wrote: »

I don't have any evidence to suggest that the rules are not being enforced. I just wonder if the Regulator has the staff numbers or systems to check every mortgage approval against the rules?

That is not how it will work, banks will be subject to audit tho... with the small number of properties purchased with mortgages these days it actually won't be a huge amount of work...

DublinDilbert

DublinDilbert wrote: »

Yes they are. Heard it from both Aib and Boi. Have an approval in principle with both, one times out this month the other next month. Advisers both said new rules will apply if/when I try to renew it.

Same here. Have approval, new rules apply if we don't buy very soon - which we probably won't.

In terms of checking, Central Bank won't be assessing every loan as they go, they will assess the entire loan book and if the rules are breached in more than 15/20% of cases, they have broken the rules.

Mongfinder General

Piriz wrote: »

That is not how it will work, banks will be subject to audit tho... with the small number of properties purchased with mortgages these days it actually won't be a huge amount of work...

A total of 26,576 mortgages, valued at €4.7 billion, were approved during 2014, based on the three-month moving average. This represents an increase of 43.6% compared to 2013

I suppose checking each mortgage approval would not be an impossible task as long as the staff are in place to do it. I don't have much faith in auditors, they're usually paid by the Bank to perform the audit!

Eugene Norman

The Spider wrote: »

Dunno, every report is pointing to rising prices, daft, myhome etc. Yeah based on asking prices but what else can they base them on?

Not one report or analysis has said prices are falling, the closest anyone has said is prices in dublin were rising at a lower rate, that's still rising.

As far as I can see all the talk about prices falling is just wishful thinking, not on reputable source has come out and said it, apart from Internet posters who missed the boat in 2012, and are trying to use their mind powers to turn the market.

(I do however know that changes can be picked up here or on the likes of the property pin way before the media admits it)

However there seems to be a touch of desperation from people shouting for drops, nothing that I can see points to it, supply is down and the economy is going from strength to strength, in those circumstances barring external shocks I really don't see how prices can fall.

UK pulling out of the euro however may grant that wish.

The UK isn't in the Euro. Asking prices are meaningless and there has been drops in the cso sales reports. As for limited supply daft has 4,200 houses available at the moment which is the highest I have seen since I logged on last year. It's up about 1,500 in a year. And it's up about 600 in a few weeks.

Piriz

Mongfinder General wrote: »

A total of 26,576 mortgages, valued at €4.7 billion, were approved during 2014, based on the three-month moving average. This represents an increase of 43.6% compared to 2013

I suppose checking each mortgage approval would not be an impossible task as long as the staff are in place to do it. I don't have much faith in auditors, they're usually paid by the Bank to perform the audit!

is that figure for mortgages drawn down? I would expect the data is entered into an excel type program and its simple to calculate if banks are operating within the rules...i could be wrong tho...i don't work in finance..

Mongfinder General

Piriz wrote: »

is that figure for mortgages drawn down? I would expect the data is entered into an excel type program and its simple to calculate if banks are operating within the rules...i could be wrong tho...i don't work in finance..

Here you go
http://www.bpfi.ie/news/mortgage-approvals-december-2014/

Eugene Norman

I still don't think we can say anything about the new rules for months. There are contradictory reports on whether the rules are being enforced now or whether people already approved have 3-6 month grace periods or are re-appraised on drawdown. Or even whether the banks are compliant.

Mongfinder General

Eugene Norman wrote: »

I still don't think we can say anything about the new rules for months. There are contradictory reports on whether the rules are being enforced now or whether people already approved have 3-6 month grace periods or are re-appraised on drawdown. Or even whether the banks are compliant.

It's the compliance/supervision element I would worry most about

Piriz

Thanks for the link Mongfinder, however it does not state clearly if the approvals are money drawn down... so I'm still not sure

What is the penalty for non compliance does anyone know? is it deterrent enough for banks to not bend the rules somewhat?

Eugene Norman

Eugene Norman wrote: »

I still don't think we can say anything about the new rules for months. There are contradictory reports on whether the rules are being enforced now or whether people already approved have 3-6 month grace periods or are re-appraised on drawdown. Or even whether the banks are compliant.

If you apply now the rules are in force. If you had approval before they came in it will be honoured - usually expires after 6 months depending on the bank. The Central Bank have said this.

It means the rules are now the normal but won't be fully felt until all old approvals expire. This is happening all the time but a good chunk would have renewed in January so they should be okay until July.

Eugene Norman

Eugene Norman wrote: »

I still don't think we can say anything about the new rules for months. There are contradictory reports on whether the rules are being enforced now or whether people already approved have 3-6 month grace periods or are re-appraised on drawdown. Or even whether the banks are compliant.

If you apply now the rules are in force. If you had approval before they came in it will be honoured - usually expires after 6 months depending on the bank. The Central Bank have said this.

It means the rules are now the normal but won't be fully felt until all old approvals expire. This is happening all the time but a good chunk would have renewed in January so they should be okay until July.

Mongfinder General

Piriz wrote: »

Thanks for the link Mongfinder, however it does not state clearly if the approvals are money drawn down... so I'm still not sure

What is the penalty for non compliance does anyone know? is it deterrent enough for banks to not bend the rules somewhat?

Monetary penalties can be quite steep. However, with the Banks in part public ownership it doesn't really make sense to fine a Bank and then pay it from the public purse.

There is scope for fining directors and management but even under the Central Bank's administrative sanctions process, this doesn't really happen.

The Central Bank doesn't really go to the courts unless it absolutely has to from what I can see.

http://www.centralbank.ie/regulation/processes/EnfI/Pages/SettlementAgreements_.aspx

Piriz

An important point to consider is the Financial Regulator failed massively during the boom and I would imagine they will make sure they are seen to regulate this time around. So if taking from the public purse is what's required to make an example of a breech of rules so be it hopefully.

mr_seer

Piriz wrote: »

Thanks for the link Mongfinder, however it does not state clearly if the approvals are money drawn down... so I'm still not sure

What is the penalty for non compliance does anyone know? is it deterrent enough for banks to not bend the rules somewhat?

There are FAR more approvals than drawdowns. There are a number of reasons for this but it is mainly because:

1. Lack of family homes within affordable prices (Dublin)
2. Many people get approvals from multiple banks. If you get approved by 5 banks, that counts as 5 approvals for the purposes of the stats

Regarding other people's query as to whether of not banks will comply with the macro prudential regulations, they most definitely will. It would be extremely damaging for them reputationally if they did not. In addition Compliance is a very powerful function within banks in the post crash Irish banking industry. No self respecting Head of Compliance would stand over a regime that was trying to bend or break CB issued rules

Piriz

Thanks mr seer, I'm aware of the points you made but i was querying if the 26,000 figure in 2014 was approvals or mortgages drawn down..

Yea I think your on the money regarding compliance...

So going back to my original point, I reckon the CB rules will influence price drops (and quite significantly too). Spider do you concur :pac:

quadrifoglio verde

Piriz wrote: »

Thanks mr seer, I'm aware of the points you made but i was querying if the 26,000 figure in 2014 was approvals or mortgages drawn down..

Yea I think your on the money regarding compliance...

So going back to my original point, I reckon the CB rules will influence price drops (and quite significantly too). Spider do you concur :pac:

They'll instigate price drops in some segments and rises in others would be my guess.

Piriz

quadrifoglio verde wrote: »

They'll instigate price drops in some segments and rises in others would be my guess.

care to elaborate which segments and why?