how do people in dublin afford a mortgage

JakeArmitage

I know alot cant but how do couples with a normal salary affod a mortgage in dublin, when I say normal i mean 40k so that would be 80k combined?

whiskeyman

Depends where in Dublin...

gzoladz

40k each must be 2.3k per month in your pocket. You can easily save 1k pero month, and live with 1.3k, oh which half is for the mortgage (we did that for a while). Ahhh... we don't drink and didn't have a car at the time (nor kids).

catbear

Back in 06ish I read that over 60% of first time mortgages had a parent as guarantor, I'd imagine the banks continue to do so where they don't see a risk.

Effectively locals have a leg up over new arrivals.

FloatingVoter

Personally, I'm an inheritance owner. My late parents bought the place in the early 90s as a retirement thing (close to hospitals, both were pessimists :rolleyes:).
That was after the entire 1980s spent paying off a mortgage on our home down the country. Then selling up due to sudden redundancy issues.
Plenty of people I know that are in "good" jobs in the public sector, "glamour" jobs in the mid levels of IT live extravagant Facebook lifestyles - yet still resort to the bank of mum and dad as a last resort. Yes, they could save more and spend less - but they're human and they don't. Borrowing money off their unemployed idiot friend is a second last resort.

endacl

Easy. Draw it down 20 years ago.

FloatingVoter

t

endacl wrote: »

Easy. Draw it down 20 years ago.

There's logic in that remark. In the 90s (pre the imaginary Tiger madness) houses in certain parts of Dublin were affordable to normal people. A hard working couple could pay off a £60,000 mortgage in 10 years. And solid houses were on the market for £40,000 and sometimes less.

FreudianSlippers

gzoladz wrote: »

40k each must be 2.3k per month in your pocket. You can easily save 1k pero month, and live with 1.3k, oh which half is for the mortgage (we did that for a while). Ahhh... we don't drink and didn't have a car at the time (nor kids).

It's more than that. A married couple on 40k each is obviously 80k/year gross or 61,934/year net - 5,161.16/month.

A rough estimate for how much of your net income should be spent on your mortgage is 15-20%; so around 775-1,032/month. At the minimum deposit, you're probably looking at a house approx 350k in value, which is still more than achievable in many parts of Dublin.

That leaves you with over 4k/month after mortgage.

BGozIE

I know from experience, its not paying the mortgage that hurts, its trying to save a deposit the banks now require.

beauf

You need to factor in if only one person ends up working, at least for a while or the income into the house falls significantly. Which is that the bank rules where meant to check before they stopped doing them.

Likewise the deposit its meant to test that people have the financial ability to generate enough income for a deposit. If they are they are likely able to maintain a deposit. If not they probably aren't.

I don't think salaries have risen to match property prices. as a result. The reality is a lot of people can no longer to afford to live in the area's they grew up in. Its something that's old news in the UK.

andekwarhola

As said, a joint income of 80k would be enough to buy a house in a lot of Dublin areas, if not the marquee ones that everybody obsesses about.

AnonoBoy

BGozIE wrote: »

I know from experience, its not paying the mortgage that hurts, its trying to save a deposit the banks now require.

Exactly. If you can rent a house in Dublin at the moment you can pay a mortgage. It's getting the deposit together that's the tricky bit.

MarkAnthony

The deposit is tricky for those caught in the knee-jerk new rules. Hopefully though it will introduce a bit of fiscal common sense which is sadly lacking in Ireland. The amount of people that seem to live payday to payday is astounding. Now there are genuinely people that have no option but then there are people living beyond their means (or just within them) as that's the way they were brought up in an era of easy credit and paying on the long finger.

It's an extreme case but a very good friend of mine started saving from her very first job at 16 and bought a house in her early 20s, has done it up very nicely and has a nice low mortgage with ten years left to run. They key is to save little, often and early. I'd have easily fallen into the first category but thankfully the wife keeps control of the finances and we saved 40-50K after buying at the top of the boom and got a mortgage with her on contract and me working part-time. It's not as hard as everyone makes out.

It is very hard if you flock like sheep to south county Dublin or must have a new build with a huge mark up. There are houses in D5 with excellent amenities and access to the DART which can be had for less than 250K.

subpar

The key to affording and acquiring any asset is saving.

So start the saving practice as early as possible, save as much as you can each week. The generations in the 50's / 60's/ 70's and 80's did this and were into deferred gratification. They were not into "gap years" 5 Star All Inclusive Holidays and the latest adult toys. They got married earlier , had their children earlier , traded up when family size grew and emerged from the mortgage burden much earlier than this generation.

A much different attitude and a different life model than that practised by todays generation.

Having said all of the above the current generation in their 20's and 30's have it much worse in terms of job security / pay and pensions. Until that issue is addressed ( and it needs to emerge as a real issue for society and politics ) it is going to be very hard for young people to get onto and climb the property ladder. Whilst they may have to rely on renting as a solution in their mid life years they will be much less prepared to enter their later years with the insecurity of renting hanging over them.

FreudianSlippers

Using the example of a couple on €80k gross and a €350k house; at saving €2k/month (definitely doable on the net income) they could have 20% in 3 years.

It's not ideal but not impossible either.

Larbre34

40% of house purchases in Dublin are still in cash. So, plenty of folk squirrelled away during the recession or liquidated assets and waited. This is affecting the market by keeping prices at an artificial level and there is only so long that can feature at that percentage. Thereafter, limited supply might keep prices at or near those levels, but realistically Dublin is probably 15 or 20% overvalued at the moment.

All of which means, 350,000 (ish) x 20% is €35,000 deposit for FTB and a mortgage of about €1,500 a month, both of which is achievable on a €60-€80,000 household income.

beauf

MarkAnthony wrote: »

T...The amount of people that seem to live payday to payday is astounding. Now there are genuinely people that have no option.....

I think you are underestimating how many are in that situation.

A lot of these guesstimates, are making no allowance for contingency planning.

sebcity

FreudianSlippers wrote: »

Using the example of a couple on €80k gross and a €350k house; at saving €2k/month (definitely doable on the net income) they could have 20% in 3 years.

It's not ideal but not impossible either.

2k a month on top of rent?

Caliden

sebcity wrote: »

2k a month on top of rent?

That's the part that most Dubliners forget.

It's easy for them to live with the parents for a year or 2 and build up a deposit.

Crocked

sebcity wrote: »

2k a month on top of rent?

Why not?

FreudianSlippers calculated that a couple on 80k joint income come out with 5161 net per month, save €2k, €1161 for rent still leaves €2k a month, not exactly breadline kinda stuff

Alkers

Either live with your parents for two years while saving for a deposit or move into shared accommodation while saving. If you're renting a private apartment for a couple or a private house, it will be very hard to save for a deposit on top of this.

FreudianSlippers

Crocked wrote: »

Why not?

FreudianSlippers calculated that a couple on 80k joint income come out with 5161 net per month, save €2k, €1161 for rent still leaves €2k a month, not exactly breadline kinda stuff

+1

Friends of mine recently moved a bit outside of the city centre as well and pay significantly less than €1000/month on rent.

not yet

FreudianSlippers wrote: »

+1

Friends of mine recently moved a bit outside of the city centre as well and pay significantly less than €1000/month on rent.

Mullingar..?

I'd be amazed if there is anything less then 1k within 30km of the city.

MarkAnthony

beauf wrote: »

I think you are underestimating how many are in that situation.

A lot of these guesstimates, are making no allowance for contingency planning.

I'm sure there are a lot of people in that situation but they're not the same (or should not be the same group) looking to buy. I'm refering to people on average to good salaries (50K+ as a couple) that can't seem to save a brass fathing from one month to the next. They're simply not budgeting properly.

Now I know adding kids into the mix drastically changes things, but again, people don't seem to plan that properly either.

FreudianSlippers

not yet wrote: »

Mullingar..?

I'd be amazed if there is anything less then 1k within 30km of the city.

Daft found 41 apartments for under €1000 in the city alone.

NiallBoo

I'm planning on doing it by winning the euro-millions.

After buying somewhere small I should have enough left over for a nice meal out and maybe some new shoes.

beauf

FreudianSlippers wrote: »

+1

Friends of mine recently moved a bit outside of the city centre as well and pay significantly less than €1000/month on rent.

That would significantly less than average so

http://www.rte.ie/news/2015/0326/689834-rents/

ProudDUB

MarkAnthony wrote: »

I'm sure there are a lot of people in that situation but they're not the same (or should not be the same group) looking to buy. I'm refering to people on average to good salaries (50K+ as a couple) that can't seem to save a brass fathing from one month to the next. They're simply not budgeting properly.

Now I know adding kids into the mix drastically changes things, but again, people don't seem to plan that properly either.

Agree 100% on the budgeting thing. Maybe its a priorities thing. My niece and her boy friend (31 & 33, both on good salaries) are away off on stag/hen weekends (usually foreign) and wedding weekends away down the country, pretty much every weekend. And then they go on non stop about how they have no money for a deposit for a house and how unfair it all is.

I get that they are at the time of life where a lot of their friends are getting married & they want to be a part of it all. But they both refuse to see what a crippling drain it is on their finances. If they put that money away for a deposit on a house, they'd have one in no time at all. But there is no telling them that ! :rolleyes:

FreudianSlippers

beauf wrote: »

That would significantly less than average so

http://www.rte.ie/news/2015/0326/689834-rents/

Yep - that's how averages worked last I checked.