Property Market 2016

handlemaster

Barely Hedged wrote: »

Although I don't recall the issues of the last few years being caused by people with imperfect credit histories...

Subprime mortgages. ..

johnp001

Barely Hedged wrote: »

Although I don't recall the issues of the last few years being caused by people with imperfect credit histories...

https://en.wikipedia.org/wiki/Subprime_mortgage_crisis

“Those who cannot remember the past are condemned to repeat it.”

quadrifoglio verde

flintash wrote: »

This is so fundamentally wrong in my head i just cant grasp that. Old house is an old house, like an old car. Its old design, energy inefficient, many materials used coming close to end of life , technologically backwards. Maybe its worth more than plot of the land but that's it. I give exceptions to highly populated places but more than half of population living outside Dublin,isnit?

An old house isn't like an old car. A house doesn't fall by 50% every 3 years from when its built until its worthless
A new car does

Yes they'll both need repairs, but they're not the same

Barely Hedged

johnp001 wrote: »

https://en.wikipedia.org/wiki/Subprime_mortgage_crisis

I was responding to a post about the entrant of a new mortgage provider to the Irish market - what this is related to your response, i have no idea. I clearly stepped on the agenda of other people

El_Dangeroso

I thought I had seen it all but a house popped up yesterday that I enquired about today.

'Oh that house is sold, we just put it up there because we might have something similar coming up in the next few months so we're collecting contact details of interested parties. Oh I don't have a pen on me to take your details so just email them into the office including your number and rough budget'

I laughed and hung up. I mean I know estate agent is not the most honourable profession but seriously..

UsBus

El_Dangeroso wrote: »

I thought I had seen it all but a house popped up yesterday that I enquired about today.

'Oh that house is sold, we just put it up there because we might have something similar coming up in the next few months so we're collecting contact details of interested parties. Oh I don't have a pen on me to take your details so just email them into the office including your number and rough budget'

I laughed and hung up. I mean I know estate agent is not the most honourable profession but seriously..

Please don't tell me this was an auctioneer in Galway.....?? Things are bad enough and houses are scarce enough without this crap going on.....

El_Dangeroso

UsBus wrote: »

Please don't tell me this was an auctioneer in Galway.....?? Things are bad enough and houses are scarce enough without this crap going on.....

Yep, Galway city is a basket case at the moment.

Michael D Not Higgins

handlemaster wrote: »

It would save use all from the bleeding heart stories we have had to endure over the last number of years.

Will it though? They have already said they'll offer these mortgages at a premium, i.e. at a higher rate than the current lenders. If that's the case then they're going to be able to afford less on repayments and can borrow less and will again be priced out of the market.

I'm sure there's a subset of people who have increased their salaries in recent years and are well capable of paying down a mortgage but can't get access to credit due to their history. I think this group would be small though.

The main bleeding heart cases we see are:

"I can't save and rent at the same time, but the rent is more than what I would pay for the mortgage."
Others can save, and that makes them a lower risk and able to comply with the central bank rules. A sub-prime mortgage won't help.

"I'm not a FTB but my property has no equity in it."
This is the trapped group. They can't get a negative equity loan and are stuck paying a mortgage for a property that doesn't suit and is barely building equity. They just have to wait a few years (nowhere near ideal). Again, a sub-prime mortgage won't help.

I personally haven't seen many (or any) calls for a need for sub-prime mortgages. Most of the problems of the last year was for complying with the central bank rules and people trying to find loopholes or convince the bank to give them an exception. The years before that the majority of focus in this forum was renting, no one was buying because the market was still going down.

gaius c

quadrifoglio verde wrote: »

An old house isn't like an old car. A house doesn't fall by 50% every 3 years from when its built until its worthless
A new car does

Yes they'll both need repairs, but they're not the same

Houses do depreciate though. What doesn't is the land it's built on.

Barely Hedged

seamus wrote: »

Owning property is not a human right. The current criteria are not that difficult to meet - five years clean borrowing history and a proven ability to save. It's not like you're being asked to produce every receipt for every purchase made since you were 18.

I don't see what's shocking about saying that people should only be given long-term debt obligations if they can prove an ability to meet that obligation.

Completely agree.

seamus wrote: »

If banks want to provide risky loans for buy to lets, off you go. But providing risky loans for residential mortgages is playing poker with the state's money.

What is interesting about this is that its an Australian based lender so the state is not on the hook. Also, they are prepared to offer a spread on the normal rate, for people with less than perfect credit histories. The current central bank regulations plus this spread is not what i would call poker.

seamus wrote: »

I'd be interested to know what criteria they will be putting down in light of the new rules. Affordability checks are key to the process.

Nowhere in the article did it suggest otherwise

Barely Hedged

handlemaster wrote: »

Subprime mortgages. ..

No sub-prime mortgage crisis in Ireland

NSAman

Not in the market at the moment personally, however, I do keep a keen eye on what's going on. My own observations, now is not the time. Artificially inflated prices, interest rates will only go one way and that is up. Uncertainty in global markets (despite what Kenny says) could have a serious impact on Ireland and the rest of the world.

What I do not see in Ireland is "value" prices are ridiculously high for what is on offer.

People who are buying should, especially if FTB, make sure that they stress test any borrowings to 5% on top of loan repayment, in my opinion. Feel sorry for young people starting out at the moment, it is really an artificial market.

Riverireland

NSAman wrote: »

Not in the market at the moment personally, however, I do keep a keen eye on what's going on. My own observations, now is not the time. Artificially inflated prices, interest rates will only go one way and that is up. Uncertainty in global markets (despite what Kenny says) could have a serious impact on Ireland and the rest of the world.

What I do not see in Ireland is "value" prices are ridiculously high for what is on offer.

People who are buying should, especially if FTB, make sure that they stress test any borrowings to 5% on top of loan repayment, in my opinion. Feel sorry for young people starting out at the moment, it is really an artificial market.

I think it is an inflated market in south county Dublin, parts of cirk city and a few other niche areas. There are definitely bargains out there if you are less selective about where you live. I think people are being brain washed into thinking that renting is a good life option. Nothing beats the security of owning your own home once that mortgage is gone. Look at all the renters loosing their private rented accommodation and ending up in hotel rooms......

lcwill

Any thoughts on the Indo's house price predictions for the markets you are familiar with? Too high, too low, about right?

My main area of knowledge/experience is 1 bed apartments in D8 and it seems to be in line with my expectations for 2016 - around 155k now and heading to mid-160k in 2016 and mid-170k in 2017: http://m.independent.ie/business/personal-finance/property-mortgages/how-much-is-your-house-worth/dublin-8-childrens-hospital-a-big-draw-for-investors-in-d8-34379848.html

Santy2015

I don't know about my area. It's seems a bit far fetched. It says 300k for 4 bed detached but know I can get one for 140k in a newish development in a good area

robp

gaius c wrote: »

Houses do depreciate though. What doesn't is the land it's built on.

The structure can depreciate but at a totally pace and trajectory than a car. Otherwise old houses would be routinely demolished. At least in Ireland buildings instead tend to get demolished due to opportunity cost of the land and not structure value.

koheim

NSAman wrote: »

interest rates will only go one way and that is up

Please explain this one. Interest rates in Ireland are the highest in Europe. Eurozone average is 2.3% There is no way Bank of Irland are increasing interest rates for mortgages in the next 5 years, or even 10 years

quadrifoglio verde

koheim wrote: »

Please explain this one. Interest rates in Ireland are the highest in Europe. Eurozone average is 2.3% There is no way Bank of Irland are increasing interest rates for mortgages in the next 5 years, or even 10 years

Banks price their mortgage products at a certain percentage above the ecb rate.
today that rate is 0.05%. Eight years ago it was 4.25%
Bear sterns and Lehman Brothers started 2008 as two of the largest giants on wall street. By the end that year they were gone.
A year is a long time when it comes to markets, let alone 5 years or 10 years.

Now the ecb rate mightn't go up for the next 10 years, but I do know it aint going much lower in the next 10 years. So its staying the same, or its going up

Cuddlesworth

quadrifoglio verde wrote: »

Banks price their mortgage products at a certain percentage above the ecb rate.
today that rate is 0.05%.

No they don't. The ecb rate is the interest on a holding fund for European banks. In other words, it's always been meant to be the worst place to out your money. Makes you think long and hard about the people who approved .25% trackers and if they had any idea of what they were doing. The banks themselves base their rates on a combination of factors.

MayBea

Looking at the recent BPFI report it looks like the number of cash buyers is decreasing slowly.

A break down of the Q3 2015's stats: number of loans drawn down in this quarter is 7,292, whereas the number of properties sold (according to Price Register) is 12,252 - therefore the share of all-cash buyers in Q3 of 2015 was 40.5% (this proportion was almost 50/50 in 2014).
The number of FTBs was 3,672 or 29.9% of all properties bought in Q3.
The average loan size increased to €182,406 in Q3 2015 ( up 2.2% on Q3 2014).
It will be interesting to see the Q4 report.

Eugene Norman

I'm amazed the cash hasn't run out.

El_Dangeroso

When is the CSO data for the month out? Came out 23rd last month but I assume that was early for xmas?

MayBea

El_Dangeroso wrote: »

When is the CSO data for the month out? Came out 23rd last month but I assume that was early for xmas?

It should be interesting to see, December '15 numbers coming this Wednesday afaik.

The_Conductor

Eugene Norman wrote: »

I'm amazed the cash hasn't run out.

I agree- it is quite remarkable- given the economic climate, and the manner in which the 'recovery' only seems to bringing some people along with it......... A 40% cash sale level- may not be far from historic norms- however, household debt in Ireland- has never, ever, been anything like it is at the moment...........

handlemaster

The_Conductor wrote: »

I agree- it is quite remarkable- given the economic climate, and the manner in which the 'recovery' only seems to bringing some people along with it......... A 40% cash sale level- may not be far from historic norms- however, household debt in Ireland- has never, ever, been anything like it is at the moment...........

Just shows you that people whing alot but still have the cash to buy with no mortgage. . Take the poor mouths with a pinch of salt

El_Dangeroso

I have a friend working in the bank who insists there's more cash than debt in the in ordinary bank accounts in this country. I met a fella from Mayo drives a 15 year old beat up Corolla, dresses quite shabbily and owns four houses in Galway outright and looking to buy more.

Shedite27

El_Dangeroso wrote: »

I met a fella from Mayo drives a 15 year old beat up Corolla, dresses quite shabbily and owns four houses in Galway outright and looking to buy more.

I can afford to buy a house because I drive a 15 year beat up car

El_Dangeroso

Shedite27 wrote: »

I can afford to buy a house because I drive a 15 year beat up car

I'm sure but are you a millionaire like that guy?

tinpib

El_Dangeroso wrote: »

I'm sure but are you a millionaire like that guy?

Exactly, that's the gist behind the book 'The millionaire next door" by Thomas Stanley.

Those flashboys in their big fupp off Merc, going on exotic foreign holidays 3 times a year possibly don't have a shilling to their name.

It's guys like that fella above that are millionaires.

TiNcAn

Government coming under heat from Irish Architects for the change in legislation concerning the minimum apartment size.

http://www.irishtimes.com/news/environment/kelly-s-smaller-apartment-sizes-cannot-be-built-says-riai-1.2508780

Too right in my opinion. The trend should be going up or staying the same, and certainly not down. Do you think this will be reversed before we actually start building these shoe boxes? It certainly gives the other parties good ammunition coming up to the elections.