Dublin House Prices 2015

Michael D Not Higgins

ZeroThreat wrote: »

The main priority for any 20-something in Ireland at this point should be getting on the property ladder.

Oh my god, it's early 2000s again.

Ritchi

Michael D Not Higgins wrote: »

85%/15% actually

Sorry, yeah, you're right on the figures.

Does anyone know if there's figures on what the current ratio is? I would guess, given the amount of cash buyers and investors, it would be close to 70 or 80 as it is now.

Michael D Not Higgins wrote: »

it will make a difference as they'll want to get the ordinary punters on 20% deposit mortgages to allow for more profitable LTV mortgages in that 15%.

It depends on what you mean by more profitable. Yes, they are charging a higher interest rate, but the risk for them is also higher, as the write downs they are doing recently is showing.

The difference in interest they charge between a 50-80% LTV and a 80%-100% LTV, is minimal compared to the rate they are borrowing money at themselves. I would think the difference in interest for those on 80% LTV rates will increase even more, as well as it being slightly more difficult for them to get a mortgage.

But, none of this will do enough to actually turn a 20% rise in house prices into a decrease in prices. The majority of people, who will still be buying and getting mortgages will still push prices up, and they will continue to go up for another few years, unless there's something a lot more drastic happening(banks can't get credit, or supply to the market is vastly increased)

That's my theory anyway.

And to add, I'd much rather house prices went down, I've no interest in them going up.

Michael D Not Higgins

It depends on what you mean by more profitable. Yes, they are charging a higher interest rate, but the risk for them is also higher, as the write downs they are doing recently is showing.

But they'll only pick the least risky to put on higher LTVs. This means high income applicants (although why people with high income can't get a 20% deposit is another story).

In the short term, we're going to have panic buying and you can already see it from the questions and comments of people on this forum. Anyone in a position to buy who would be knocked back a few years to have to save another 10% will buy, pushing the price up as they aim to complete their purchase in the window of opportunity of their mortgage approval. Then you'll have people who get gifts from parents to make up to the 20% mark, but these will be fewer, and those who already have the 20% and are waiting for the panic buying to stop. Prices will drop a bit in some price bands and be kept up in lower bands (with those who had 10% before for a higher band now have 20% for a lower band). This is my prediction for the next year or two.

ZeroThreat

Michael D Not Higgins wrote: »

Oh my god, it's early 2000s again.

ahhh, sitting on the sidelines, cribbing & whinging. I honestly don't know how these people haven't killed themselves....




Sorry. I forgot it's difficult for others to differentiate sarcasm from seriousness without emotes.

Michael D Not Higgins

ZeroThreat wrote: »

ahhh, sitting on the sidelines, cribbing & whinging. I honestly don't know how these people haven't killed themselves....




Sorry. I forgot it's difficult for others to differentiate sarcasm from seriousness without emotes.

No problem, gave me a chuckle when I saw it. The problem being that there are some who would sincerely hold that belief. Poe's Law.

gaius c

ZeroThreat wrote: »

The main priority for any 20-something in Ireland at this point should be getting on the property ladder.

And for everybody else, it's making enough money so they can help their 20-something relations get on the ladder with cash gifts.

Barely Hedged

gaius c wrote: »

You are aware that in affordability terms, we're almost back at 2006/2007?

So you think the example i have provided about a €160k house is unaffordable? Not to the cross section of people currently buying there (nurses/gardai/teachers etc).

A lot of the costs he mentioned in that article are by their nature variable and will come down in the next few budgets, with the exception of a car (although i cant see that being the major factor in mortgage affordability). That will improve the current % level of affordability he provides.

Also, the article omits rather sneakily, the ability for capital appreciation being much higher now than in 06-08.

And...the ECB rate was 3.5% end of November 08. It was between 4% and 4.25% for the other 11 months of the year. People on a tracker were faced with mortgage repayments of between 5% and 6% in 08 but still spent nearly 30% - 40% more on a house - has the madness of 06-08 returned - no!

gaius c

Barely Hedged wrote: »

So you think the example i have provided about a €160k house is unaffordable? Not to the cross section of people currently buying there (nurses/gardai/teachers etc).

A lot of the costs he mentioned in that article are by their nature variable and will come down in the next few budgets, with the exception of a car (although i cant see that being the major factor in mortgage affordability). That will improve the current % level of affordability he provides.

Also, the article omits rather sneakily, the ability for capital appreciation being much higher now than in 06-08.

And...the ECB rate was 3.5% end of November 08. It was between 4% and 4.25% for the other 11 months of the year. People on a tracker were faced with mortgage repayments of between 5% and 6% in 08 but still spent nearly 30% - 40% more on a house - has the madness of 06-08 returned - no!

What €160k house?

Barely Hedged

gaius c wrote: »

What €160k house?

My previous post

McGrath5

All the doom and gloomers here.

I shouldn't of bought my house earlier on this year, give it another couple of years and I'll have to pay somebody to take my house of my hands. :rolleyes:

Theboinkmaster

McGrath5 wrote: »

All the doom and gloomers here.

I shouldn't of bought my house earlier on this year, give it another couple of years and I'll have to pay somebody to take my house of my hands. :rolleyes:

Since when were the possibility of reducing house prices doom and gloom, it's a good thing :cool:

ted1

Theboinkmaster wrote: »

Since when were the possibility of reducing house prices doom and gloom, it's a good thing :cool:

Since we pumped billions into the banks as falling property prices resulted in people being in negative equation and banks taking a hit in loans

gaius c

Barely Hedged wrote: »

My previous post

The hypothetical House that doesn't actually exist outside of your artificially constructed argument?

The_Conductor

Barely Hedged wrote: »

So you think the example i have provided about a €160k house is unaffordable? Not to the cross section of people currently buying there (nurses/gardai/teachers etc).

Most nurses, members of An Garda Síochána, teachers and civil servants- will not qualify for a 160k mortgage- under current rules- never mind the revised rules......... I'm not sure if you actually realise the salaries these people are on?

Barely Hedged

The_Conductor wrote: »

Most nurses, members of An Garda Síochána, teachers and civil servants- will not qualify for a 160k mortgage- under current rules- never mind the revised rules......... I'm not sure if you actually realise the salaries these people are on?

40k * 2 * 3.5 = 280

That's a conservative estimate of their salary

Barely Hedged

gaius c wrote: »

The hypothetical House that doesn't actually exist outside of your artificially constructed argument?

They were priced at 200k in Old Bawn 8/9 months ago. I'm not going to repeat the post where I deduced 160k. Also, I'm not going to post an example for every postcode where house prices are principally determined on affordability.

So you'd firmly classify yourself in the ship has sailed brigade and you'll cling to anything to believe that house prices are going to undergo a massive correction and like Frank Lee Midere pick up houses for 40% less than their sale prices 8 months ago next year?

lima

Theboinkmaster wrote: »

Since when were the possibility of reducing house prices doom and gloom, it's a good thing :cool:

It's the right thing. Prices for Dublin should not be as high as they are now. The whole thing is rigged.

Mr.McLovin

ted1 wrote: »

Since we pumped billions into the banks as falling property prices resulted in people being in negative equation and banks taking a hit in loans

so start the whole process again?

The_Conductor

Barely Hedged wrote: »

40k * 2 * 3.5 = 280

That's a conservative estimate of their salary

Most Gardaí are on around 30k
All the recent civil servant recruits have been at 21.5k
Teachers- all recent recruits have averaged 24k.......

Your figures are *way* off........

Most staff are at the lowest ranks/grades- being a sergeant or higher- is the exception, rather than the rule....... (or similarly in the civil service- there are far more COs, the lowest grade- than all other grades combined........)

Recruitment is at the bottom of salary scales- and normally at the lowest possible ranks. Your 'conservative estimates' of salary- are completely at odds with facts on the ground. In addition- the person most likely to be seeking a mortgage is a relatively new recruit in their 20s/30s- not someone who has been a member for 10-15 years........

Also- which lender is given 3.5 times 2 salaries?

gaius c

Nama to sell 588 properties in Dublin. That's 14% of all stock that is currently for sale on myhome for Dublin at the moment.

I like how they spin that they are not fully let. "Improved asset management" indeed and it'll come as no surprise to anybody marvelling at all the empty apartments around the square in Tallaght while rental prices are still ramping up...

ted1

gaius c wrote: »

Nama to sell 588 properties in Dublin. That's 14% of all stock that is currently for sale on myhome for Dublin at the moment.

I like how they spin that they are not fully let. "Improved asset management" indeed and it'll come as no surprise to anybody marvelling at all the empty apartments around the square in Tallaght while rental prices are still ramping up...

Ideally UCD should look at buying the beechwood ones.

gaius c

Good idea. Best bought as a bundle though.

Frank Lee Midere

Barely Hedged wrote: »

They were priced at 200k in Old Bawn 8/9 months ago. I'm not going to repeat the post where I deduced 160k. Also, I'm not going to post an example for every postcode where house prices are principally determined on affordability.

So you'd firmly classify yourself in the ship has sailed brigade and you'll cling to anything to believe that house prices are going to undergo a massive correction and like Frank Lee Midere pick up houses for 40% less than their sale prices 8 months ago next year?

You seem to be straw manning my argument. Although I would expect falls next year I haven't quite said what yet.

It could go back to 2012.

Fazzio

The_Conductor wrote: »

Most nurses, members of An Garda Síochána, teachers and civil servants- will not qualify for a 160k mortgage- under current rules- never mind the revised rules......... I'm not sure if you actually realise the salaries these people are on?

I wish I was on their money.

We have just brought our own place, put the booking deposit down in march (march prices) got the place in september 2014.

we are 27/31 years old and on 23000 and 28000 (ca. 32000 with overtime)

The odd thing is that when we first went to the bank in november 2013 we would get maximum of 165k that went up to 192k by march without any pay rises or extra money and ended up on offering us max of 240k by July (last two by the same bank) So there u see where mad prices are coming from. It was 80k jump no wonder why CB want to stop this.

I the end we only borrowed the first figure to avoid ropes around our necks but other people don't seem to have this brakes... hence mad ups and downs.

Barely Hedged

Frank Lee Midere wrote: »

You seem to be straw manning my argument. Although I would expect falls next year I haven't quite said what yet.

It could go back to 2012.

Definition - a straw man is a common type of argument and is an informal fallacy based on the misrepresentation of an opponent's argument. To be successful, a straw man argument requires that the audience be ignorant or uninformed of the original argument.

fallacy of arguement - youre a bear and to highlight how much of a bear you are ive quoted your previous predicitions when you have tried to predict further price moves while quoting historical situations. No fault in my reasoning there.

misrepresentation of an opponent's argument - quoting your comment in full, which sits comfortable within the context of the former and present thread is misrepresentation?

audience be ignorant or uninformed of the original argument - i posted the link to your comment so the audience could see for themselves the original thread and its relevance to the current one

Barely Hedged

The_Conductor wrote: »

Most Gardaí are on around 30k
All the recent civil servant recruits have been at 21.5k
Teachers- all recent recruits have averaged 24k.......

Your figures are *way* off........

Most staff are at the lowest ranks/grades- being a sergeant or higher- is the exception, rather than the rule....... (or similarly in the civil service- there are far more COs, the lowest grade- than all other grades combined........)

Recruitment is at the bottom of salary scales- and normally at the lowest possible ranks. Your 'conservative estimates' of salary- are completely at odds with facts on the ground. In addition- the person most likely to be seeking a mortgage is a relatively new recruit in their 20s/30s- not someone who has been a member for 10-15 years........

Also- which lender is given 3.5 times 2 salaries?

http://www.tui.ie/pay-and-conditions/salary-scales-.1578.html#Common

Overestimated Garda pay but these figures ignore possible promotion and overtime which is quite considerable

http://www.garda.ie/Controller.aspx?Page=12252

Nurse around the age of 28 - 32 will have jumped considerably higher than the 2 year grad pay of €24k to €25k you mention

http://www.inmo.ie/salary_information

All the talk is about banks reducing salary multiples for affordability calculations from 4/4.5 to 3.5. I took the lowest multiple in the range

The_Conductor

Fazzio wrote: »

I wish I was on their money.

we are 27/31 years old and on 23000 and 28000 (ca. 32000 with overtime)

You're earning more than the starting salary for most public sector employees (a CO starts on 21.5k)..........

I'm not making these figures up- people have totally false ideas of what public sector employees actually earn.

Michael D Not Higgins

The_Conductor wrote: »

You're earning more than the starting salary for most public sector employees (a CO starts on 21.5k)..........

I'm not making these figures up- people have totally false ideas of what public sector employees actually earn.

Because all the media reports indicate average wages which are dragged up by the senior public sector members on higher wages. Again, medians should be used in this discussion of wages, where Ireland's median wage can be as much as 10 grand lower than the average (26k v 36k).

What is the current calculation for mortgage value (all things being equal)? Fazzio seems to have initially been offered 3.25x combined salary then offered 75k more by the bank less than a year later. Reading the central bank proposals I couldn't determine if the 3.5 LTI was for combined income or not, does anyone know?

Frank Lee Midere

Barely Hedged wrote: »

Definition - a straw man is a common type of argument and is an informal fallacy based on the misrepresentation of an opponent's argument. To be successful, a straw man argument requires that the audience be ignorant or uninformed of the original argument.

fallacy of arguement - youre a bear and to highlight how much of a bear you are ive quoted your previous predicitions when you have tried to predict further price moves while quoting historical situations. No fault in my reasoning there.

misrepresentation of an opponent's argument - quoting your comment in full, which sits comfortable within the context of the former and present thread is misrepresentation?

audience be ignorant or uninformed of the original argument - i posted the link to your comment so the audience could see for themselves the original thread and its relevance to the current one

Wow what fanatical searching you do. As usual with bulls you think bubbles are their own logic and disprove economic theory. So if Morgan Kelly predicts a crash in 2005, he's an idiot until 2008. Except he isn't, because he had the macro-economic theory down pat in 2005. It just took longer than expected.

Ok, I am expecting a 40% drop ( for Dublin) from early 2014 prices sometime. Because Dublin isn't manhattan and because there is no sane way of valuing a housing market with limited supply with the majority being cash buyers.

Valuing the Dublin market now is like valuing AIB stock.

Prices, of course, would have fallen this year had cash deserted the market, and it banks had not decided to give people with 50K 240k mortgages, with no real deposit.

So what happens next year. There isn't an infinite supply of cash and cash buyers tend to not bid 30% increases y-o-y. It was clear that it was the banks over-lending again who were causing the panicked spikes this year so far. Lets see what happens with the new rules. And ECB supervision. Will cash keep holding this corpse up?

But who knows? Long term, as we have seen, the rise of Irish property always reverts when it is above long term norms, particularly after large percentage increase; and buyers are convinced that Joe Taxpayer will foot the bill.

Good luck with that one, because in fact despite my 80K plus salary here I won't be selling in England to buy here, and I am certainly not staying around to subsidise the inevitable collapse. I am English/Irish and happy in either country. So I retract the "will be buying next year" statement.

Enjoy the 500K properties in Europe's poorest "Manhattan", a country with 15% of existing mortgage payers in arrears, the highest taxes on income at the lowest level in the world, and one year of economic growth which will hardly fix anything much.

Its hilarious that anybody is excited by property rises of 30%, its like you love being screwed down the line. It hardly benefits anybody except a few sellers, banks, developers et al. but is guaranteed to screw the rest of you because property when over-valued always falls, and when it falls the cost always goes to the tax payer.

Frank Lee Midere

The_Conductor wrote: »

You're earning more than the starting salary for most public sector employees (a CO starts on 21.5k)..........

I'm not making these figures up- people have totally false ideas of what public sector employees actually earn.

You know the whole "income multiple" is a stupid criteria. The banks should be able to loan 25% of income after taxes, USC, Pension Levys, PRSI, water charges, and property taxes after assuming a 2% increase in prices or 5% ECB rates which ever is higher. Thats sustainable.

In Ireland somebody on 70K is taking far less home than he would on 70K sterling. That's probably why the CB has lower income multiples. But rather than phrase it like that, just use the 25% model.