Income Multiple Limits on Mortgages

jank

There is plenty of development land in Dublin to house tens of thousands in and around the canals. The idea of land scarify is nonsense. Travel to Asia and see how they live FFS.

mariaalice

FreudianSlippers wrote: »

It's not the same. We have huge swaths of the city which are prime for an urban regeneration project; restoration of buildings to family homes, demolition of buildings not fit for purpose (1950s-1990s) and construction of new work/life areas (apartments, offices, retail, restaurants and parks - all fit for purpose).

Just our of curiosity what areas in Dublin would you do try such a development in , for me I would start with the area from the five lamps to Connelly station.

FreudianSlippers

mariaalice wrote: »

Just our of curiosity what areas in Dublin would you do try such a development in , for me I would start with the area from the five lamps to Connelly station.

Yep: http://www.gmapgis.com/index.htm?wemWTDzFTl.gmp

I think that area is one of the best candidates for such a project. It has some very poor post 1950s building there, it's ripe for mixed-use projects, there are some open spaces, big roads and period properties.

mariaalice

jank wrote: »

There is plenty of development land in Dublin to house tens of thousands in and around the canals. The idea of land scarify is nonsense. Travel to Asia and see how they live FFS.

I should have said development land for the type of house Irish people have a preference for.

You are right if you go up the grand canal to Inchiore there are lot of little areas that could be developed.

Dublin is not in Asia.

jank

Yes, I am well aware that Dublin is not Asia but some people seem to think that Dublin is a high density city where there is no land to develop. Its a myth and we should look at building proper family oriented buildings in the centre of the city rather then trying to build outside the m50.

And tbh, Irish housing is boring and drab. Rows upon rows of the same house, style, colour and so on.
If people have a preference for the semi d, thats fine but it is not the Central Banks role to facilitate this.

Larry Wildman

I read somewhere that there is more vacant undeveloped land inside the M50 than there is land in Tokyo.

djpbarry

mariaalice wrote: »

All that would happen then is that people could possible live in the area they want but not in the accommodation they want...

Eh, tough?

mariaalice wrote: »

...we are Irish...

...and have some sort of divine right to own a 2 - 3 bed semi-detached house with a nice big garden?

Icepick

We need to build apartments. Their appreciation outpaced houses' appreciation significantly in the last year so it's quite obvious they are in high demand.
They just have to be better than a lot of the bubble years ones, and we only need to look at countries where living in apartments is common to find out how to do it.

Larry Wildman

Icepick wrote: »

We need to build apartments. Their appreciation outpaced houses' appreciation significantly in the last year so it's quite obvious they are in high demand.
They just have to be better than a lot of the bubble years ones, and we only need to look at countries where living in apartments is common to find out how to do it.

Pretty easy to address really...storage and clothes drying are the two main issues

Icepick

Larry Wildman wrote: »

Pretty easy to address really...storage and clothes drying are the two main issues

Learning not to buy crap we don't need should be part of the solution.

Larry Wildman

Icepick wrote: »

Learning not to buy crap we don't need should be part of the solution.

What relevance does that have?

There are plenty of things that require storage and that aren't superfluous.

mariaalice

djpbarry wrote: »

Eh, tough?
...and have some sort of divine right to own a 2 - 3 bed semi-detached house with a nice big garden?

No one has a divine right to anything, however they are perfectly entailed to have a preference its not obtuse or perverse to have a preference for a garden.

djpbarry

mariaalice wrote: »

No one has a divine right to anything, however they are perfectly entailed to have a preference its not obtuse or perverse to have a preference for a garden.

You didn't say anything about preferences in your last post. You referred to people not being able to live in the house they wanted in the area they liked as "a problem".

You also tried to identify this as some sort of uniquely Irish problem, because, apparently, Irish people are special or culturally different or something and can't possibly live without a garden.

It's all patent nonsense.

draiochtanois

This post has been deleted.

Scofflaw

Larry Wildman wrote: »

No, it's an example of the State actually doing something for its people.

People who contribute to society...people who ARE society rather than freeloaders and gobsh1tes.

In many cases there are couples who are paying high rents, childcare costs and the austerity taxes and managing to save a deposit for their own home. Telling that person that at the stroke of some fat cat civil servant's pen, it'll tale them 8 years instead of 4 to put together their deposit is devastating.

Which is a fine illustration of how populism works. There's even a "fat cat civil servant" featured.

amused,
Scofflaw

gaius c

Larry Wildman wrote: »

I read somewhere that there is more vacant undeveloped land inside the M50 than there is land in Tokyo.

Giro D'Italia race in Dublin was filmed with an overhead helicopter and it's quite remarkable just how much green and empty space there actually is in Dublin. And that's before you noted how many of the buildings are derelict.

The folks claiming we've limited space for housing are either dumb or vested interests.

gaius c

Larry Wildman wrote: »

No, it's an example of the State actually doing something for its people.

People who contribute to society...people who ARE society rather than freeloaders and gobsh1tes.

In many cases there are couples who are paying high rents, childcare costs and the austerity taxes and managing to save a deposit for their own home. Telling that person that at the stroke of some fat cat civil servant's pen, it'll tale them 8 years instead of 4 to put together their deposit is devastating.

I rarely say this - Fair play to Enda Kenny.

Or house prices could drop to a level that they can afford?

PAUL62

Victor, you are correct when you say that most of the tax incentives are gone, but only this morning I heard an advert on one of the big radio stations advertising the sale of fully occupied section 23 properties, so they are still out there. Also, it is still possible to offset interest payments against tax liabilities from rental income, the taxman helping people to buy second homes to rent out does not make sense. Paul.

ardmacha

PAUL62 wrote: »

Victor, you are correct when you say that most of the tax incentives are gone, but only this morning I heard an advert on one of the big radio stations advertising the sale of fully occupied section 23 properties, so they are still out there. Also, it is still possible to offset interest payments against tax liabilities from rental income, the taxman helping people to buy second homes to rent out does not make sense. Paul.

Interest is a cost of doing business and surely it is a principle of taxation that businesses are taxed on their profit, not their gross income?

Dannyboy83

http://www.independent.ie/business/personal-finance/property-mortgages/first-time-buyers-to-benefit-from-central-bank-uturn-on-20pc-mortgage-deposit-scheme-30728787.html
Was never going to be accepted, altho it was probably a good idea to start at 20%, they should have no problem getting 10% in stone now.

hmmm

I can't see in that piece any indication that the 20% is being changed.

gaiscioch

Honohan's warning of a climbdown on the 20% deposit is typical of the cowardice which has symbolised regulators of the Irish financial industry when faced with the myriad of property-boom advocating lobby groups. Is Honohan's impending surrender to political lobbying any different to John Hurley's ignoble reign as Central Bank governor? How will history judge Patrick Honohan if he doesn't hold the line here?

As for the potential purchasers who are upset about the 10% being raised to 20%, perhaps they should put a check on their impatience and irrationality, step back and realise that if there is less demand for property (because of the 20% requirement) then house prices will go down - down, not up - and that this will benefit them in the long run. They might also reflect that if they save 20% rather than 10% they will have less to pay off their mortgage. The sheer short-sightedness of these impatient people is a good indicator of why we will have another boom unless the Irish state intervenes to protect such people from themselves (and by extension protect us all from our state being held to ransom by another property bubble).

I write this as somebody who is renting, who is saving hard and who is hoping to buy next year, a hope which will be extended for a while more but which is in my interest (for the above two reasons) in the long run. Wake up, first-time buyers. Please.

hfallada

gaiscioch wrote: »

Honohan's warning of a climbdown on the 20% deposit is typical of the cowardice which has symbolised regulators of the Irish financial industry when faced with the myriad of property-boom advocating lobby groups. Is Honohan's impending surrender to political lobbying any different to John Hurley's ignoble reign as Central Bank governor? How will history judge Patrick Honohan if he doesn't hold the line here?

The central bank is independent of the Government. There is no reason why they would listen to lobbying groups. Its like it like 2006 where there is 80k houses being built a year that most be sold. There is very little to lobby about as there is little to sell.

They have nothing to gain like a traditional TD would gain from listening to Lobbying. I imagine the central bank realised that 20% introduced rapidly wasnt going to work as well as it being introduced over night. The central bank is full of highly educated economist who can see past BS of a lobbyist unlike most TDs

andrew

gaiscioch wrote: »

Honohan's warning of a climbdown on the 20% deposit is typical of the cowardice which has symbolised regulators of the Irish financial industry when faced with the myriad of property-boom advocating lobby groups. Is Honohan's impending surrender to political lobbying any different to John Hurley's ignoble reign as Central Bank governor? How will history judge Patrick Honohan if he doesn't hold the line here?

As for the potential purchasers who are upset about the 10% being raised to 20%, perhaps they should put a check on their impatience and irrationality, step back and realise that if there is less demand for property (because of the 20% requirement) then house prices will go down - down, not up - and that this will benefit them in the long run. They might also reflect that if they save 20% rather than 10% they will have less to pay off their mortgage. The sheer short-sightedness of these impatient people is a good indicator of why we will have another boom unless the Irish state intervenes to protect such people from themselves (and by extension protect us all from our state being held to ransom by another property bubble).

I write this as somebody who is renting, who is saving hard and who is hoping to buy next year, a hope which will be extended for a while more but which is in my interest (for the above two reasons) in the long run. Wake up, first-time buyers. Please.

It's not really a climb down. The LTI ratio - the one which is meant to make it so that people who can't afford mortgages don't get them - is still there. The point of the LTV ratio limit is to make it so that the loss banks face in the event of default is reduced. To that end, some form of insurance still achieves that goal.

Mongfinder General

hfallada wrote: »

The central bank is independent of the Government. There is no reason why they would listen to lobbying groups. Its like it like 2006 where there is 80k houses being built a year that most be sold. There is very little to lobby about as there is little to sell.

They have nothing to gain like a traditional TD would gain from listening to Lobbying. I imagine the central bank realised that 20% introduced rapidly wasnt going to work as well as it being introduced over night. The central bank is full of highly educated economist who can see past BS of a lobbyist unlike most TDs

Interesting that you say the Central Bank is independent of the Government. I think the following legislation suggests otherwise;

CENTRAL BANK ACT, 1942.

9.—(1) The capital of the Bank shall be the sum of forty thousand pounds whereof the sum of twenty-four thousand pounds shall be paid to the Bank by the Minister on the appointed day or as soon thereafter as may be and whereof the residue shall be paid to the Bank by the Minister at such time or times as may be agreed upon by the Board and the Minister.

(2) All moneys payable to the Bank by the Minister under the foregoing sub-section of this section shall be charged on and paid out of the Central Fund or the growing produce thereof.

andrew

Mongfinder General wrote: »

Interesting that you say the Central Bank is independent of the Government. I think the following legislation suggests otherwise;

CENTRAL BANK ACT, 1942.

9.—(1) The capital of the Bank shall be the sum of forty thousand pounds whereof the sum of twenty-four thousand pounds shall be paid to the Bank by the Minister on the appointed day or as soon thereafter as may be and whereof the residue shall be paid to the Bank by the Minister at such time or times as may be agreed upon by the Board and the Minister.

(2) All moneys payable to the Bank by the Minister under the foregoing sub-section of this section shall be charged on and paid out of the Central Fund or the growing produce thereof.

How is that relevant to the Central Bank today, given it contributes money to the Exchequer and not the other way around?

Anyway, to the extent that the Central Bank isn't independent, it's because the Secretary General of the Dept. of Finance sits on the Central Bank commission. As far as I know this is something that the IMF has pointed out before as being not ideal.

Mongfinder General

andrew wrote: »

How is that relevant to the Central Bank today, given it contributes money to the Exchequer and not the other way around?

Anyway, to the extent that the Central Bank isn't independent, it's because the Secretary General of the Dept. of Finance sits on the Central Bank commission. As far as I know this is something that the IMF has pointed out before as being not ideal.

How is it relevant to the Central Bank today? It's written into extant legislation!

So, the conclusion that I draw from the legislation is that the Minister for Finance is the sole shareholder in the Central Bank. Do you have information to suggest that he is not?

Also Section 6 of the 1942 Act states

6.—(1) In addition and without prejudice to the functions, powers, and duties vested by law in the Commission immediately before the appointed day and to such functions, powers, and duties as are specifically conferred or imposed by this Act on the Bank, the Bank shall have the general function and duty of taking (within the limit of the powers for the time being vested in it by law) such steps as the Board may from time to time deem appropriate and advisable towards safeguarding the integrity of the currency and ensuring that, in what pertains to the control of credit, the constant and predominant aim shall be the welfare of the people as a whole.

(2) The Minister may, on such occasions as he shall think proper, request the Governor on behalf of the Board or the Board to consult and advise with him in regard to the execution and performance by the Bank of the general function and duty imposed on the Bank by the foregoing sub-section of this section, and the Board shall comply with every such request.

Free from government intervention my swiss roll!

andrew

Mongfinder General wrote: »

How is it relevant to the Central Bank today? It's written into extant legislation!

So, the conclusion that I draw from the legislation is that the Minister for Finance is the sole shareholder in the Central Bank. Do you have information to suggest that he is not?

Also Section 6 of the 1942 Act states

6.—(1) In addition and without prejudice to the functions, powers, and duties vested by law in the Commission immediately before the appointed day and to such functions, powers, and duties as are specifically conferred or imposed by this Act on the Bank, the Bank shall have the general function and duty of taking (within the limit of the powers for the time being vested in it by law) such steps as the Board may from time to time deem appropriate and advisable towards safeguarding the integrity of the currency and ensuring that, in what pertains to the control of credit, the constant and predominant aim shall be the welfare of the people as a whole.

(2) The Minister may, on such occasions as he shall think proper, request the Governor on behalf of the Board or the Board to consult and advise with him in regard to the execution and performance by the Bank of the general function and duty imposed on the Bank by the foregoing sub-section of this section, and the Board shall comply with every such request.

Free from government intervention my swiss roll!

Those particular provisions have been changed by the Central Bank reform act 2010. Section 6 now reads:

6. (1) The Bank shall perform all functions imposed, and exercise all powers conferred, on the Bank by or under the Rome Treaty or the ESCB Statute.

(1A) Nothing in the Central Bank Acts 1942 to 2010 affects the independence of the Bank, the Governor and the Commission required by the Rome Treaty and the ESCB Statute.

(1B) Without limiting the generality of subsection (1A), nothing in the Central Bank Acts 1942 to 2010 authorises any person or authority to give any direction to, or require any action (including the provision of information) by, the Bank, the Governor or the Commission if compliance by the Bank, the Governor or the Commission (as the case may be) with the direction or requirement would be inconsistent with the Rome Treaty or the ESCB Statute.

(2) This section is subject to section 19A.

(3) Section 9 of the Ministers and Secretaries Act 1924 does not apply to the Bank.

Mongfinder General

andrew wrote: »

Those particular provisions have been changed by the Central Bank reform act 2010. Section 6 now reads:

6. (1) The Bank shall perform all functions imposed, and exercise all powers conferred, on the Bank by or under the Rome Treaty or the ESCB Statute.

(1A) Nothing in the Central Bank Acts 1942 to 2010 affects the independence of the Bank, the Governor and the Commission required by the Rome Treaty and the ESCB Statute.

(1B) Without limiting the generality of subsection (1A), nothing in the Central Bank Acts 1942 to 2010 authorises any person or authority to give any direction to, or require any action (including the provision of information) by, the Bank, the Governor or the Commission if compliance by the Bank, the Governor or the Commission (as the case may be) with the direction or requirement would be inconsistent with the Rome Treaty or the ESCB Statute.

(2) This section is subject to section 19A.

(3) Section 9 of the Ministers and Secretaries Act 1924 does not apply to the Bank.

Thanks for the update, at least that removes the consultative obligation. One of the reasons why I challenge the wiely held belief that the Central Bank is autonomous is because the Minister is, I believe, the sole shareholder.

I also remember the case when the Central Bank employees took the government to court.

http://www.ifg.ie/content/media-and-news/industry-news/10-06-18/Bank_unions_seek_to_quash_refusal_on_pension_levy.aspx

They lost but what else did they expect in a domestic court.

andrew

Mongfinder General wrote: »

One of the reasons why I challenge the wiely held belief that the Central Bank is autonomous is because the Minister is, I believe, the sole shareholder.

There's no indication that that's anything other than an accounting/technical fact. How, in practice, could that affect the independence of the bank?