Property Market 2017

mel123

scouserstation wrote: »

So if i had a mortgage of €250,000 and my house was worth €255,000, and i wanted to trade up to a house worth €300,000 i would then need to save a deposit of €55,000 all the while trying to pay off my existing mortgage and bills, seems very fair doesn't it.

It’s no different to a FTB renting while trying to save for a deposit. Your not happy because there are rules in place to stop what happened years ago happening again?

Bob24

myshirt wrote: »

Borrow as much as they will give you,

No.

Regardless of the rules this way of thinking doesn’t make sense. The more you borrow, the more in trouble you will be in the event of a crash.

scouserstation

VW 1 wrote: »

In your example above, you show someone with 5k equity and think it unfair they can't trade up. People in negative or low equity situations can't trade up because the risk for the bank is too high, with insufficient deposit. It's not a scandal akin to the mortgage tracker one as you described.

This is the thing, why are 2nd time buyers considered "riskier" than first time buyers

scouserstation

mel123 wrote: »

It’s no different to a FTB renting while trying to save for a deposit. Your not happy because there are rules in place to stop what happened years ago happening again?

I think its good that there are rules in place now, but why are there one set of rules for first time buyers and more stringent rules for 2nd time buyers, why should movers be punished?

The Mulk

scouserstation wrote: »

I think its good that there are rules in place now, but why are there one set of rules for first time buyers and more stringent rules for 2nd time buyers, why should movers be punished?

2nd time buyers can get exemptions through certain banks and just have 10% deposit to move. But seriously if you have no savings and only 5k equity you shouldn't be considering moving. That's not the Central Banks fault.
I traded up recently and found the financial process easier than being a 1st time buyer.
Bidding, buying and selling wasn't though!

myshirt

Bob24 wrote: »

No.

Regardless of the rules this way of thinking doesn’t make sense. The more you borrow, the more in trouble you will be in the event of a crash.

If you are sensible and borrow for a reasonably priced 2 bed apartment, you might end up stuck in that two bedroom apartment. FTB are now needing to box smarter, and plan ahead. Invariably this will involve borrowing whatever the bank will give you for more FTB's.

In the past the first purchase was always a blended mix of the house you need, the house you can afford, and the house you want. Now it's a plain vanilla the house you can afford, if at all you can afford it, so you can't blame FTB's from wanting a slice of the house they project they actually need, and a hopefully some element of the house they want. More and more will borrow what the bank will give them to 'get it right' the first time given its so hard to get out of there as a second time buyer, especially if the CGT exemption on PPR's is eroded over time.

Bob24

myshirt wrote: »

If you are sensible and borrow for a reasonably priced 2 bed apartment, you might end up stuck in that two bedroom apartment. FTB are now needing to box smarter, and plan ahead. Invariably this will involve borrowing whatever the bank will give you for more FTB's.

In the past the first purchase was always a blended mix of the house you need, the house you can afford, and the house you want. Now it's a plain vanilla the house you can afford, if at all you can afford it, so you can't blame FTB's from wanting a slice of the house they project they actually need, and a hopefully some element of the house they want. More and more will borrow what the bank will give them to 'get it right' the first time given its so hard to get out of there as a second time buyer, especially if the CGT exemption on PPR's is eroded over time.

I disagree. If you buy something cheaper you will save a lot on interests you are not paying and can use that to build up a further deposit.

Also if you borrow all you can to "get it right" the first time, you are getting yourself locked-in even more to the property and risk being in much larger negative equity if the market crashes. This could put you in a trickier situation if you either need to move (not because of size but because you need to move to another geographical location - i.e. even if you spend more you can never be sure to get it right in the long term) or if you can't afford repayments anymore because for exemple one person loses their job.

q85dw7osi4lebg

scouserstation wrote: »

This is the thing, why are 2nd time buyers considered "riskier" than first time buyers

Because it's assumed first time buyers are at the lower end of their future earning potential.

server down

Andrew Defeated Jell-o wrote: »

Because it's assumed first time buyers are at the lower end of their future earning potential.

Weak assumption these days with the average FTBs buying at 36

Cyrus

server down wrote: »

Weak assumption these days with the average FTBs buying at 36

You think someone at 36 isn’t at the lower end of their earning potential

The_Conductor

Cyrus wrote: »

You think someone at 36 isn’t at the lower end of their earning potential

Honestly I'd suggest they're actually near the peak of their earning potential (depending on their particular industry)- however, its recognised internationally that even allowing for people in posts with increments (such as the public sector for example)- the median employee peaks their earning potential between the ages of 35 and 37. The Economist had an interesting article on it- and how people in their 40s are now being written off in some economies- as 'too-old' and 'past-their-prime'.......... It was also referred to in the recent legislation in South Korea (where it was used as one of the justifications for a unique social welfare scheme- whereby the minimum wage for all employees is to be set at a minimum of 70% of the median wage- and wages in general are to increase by 55% by 2020............ You know- rereading that article- South Korea looks like a very nice place to spend a few years- if you can ignore the menace on their northern border.............

People at age 36- do not necessarily have a lifetime of payrises in front of them- indeed- in an Irish context, they may be lucky to keep pace with inflation. I'm in my mid 40s. I could show you a payslip from 2002 and one from last week- my net takehome pay was a couple of hundred a week more 15 years ago- than it is today- and- I didn't have a few lovely children soaking up all my hard earned income (though I wouldn't have it any other way).

There are pros and cons to all of these things- however, in general, it would be rather foolish to imagine the first time buyer is a better punt for a lender than a subsequent buyer- their main selling point in my mind- would be more years to go to retirement than a subsequent buyer- but certainly not a greater earning potential/prospect.

Cyrus

The_Conductor wrote: »

Honestly I'd suggest they're actually near the peak of their earning potential (depending on their particular industry)- however, its recognised internationally that even allowing for people in posts with increments (such as the public sector for example)- the median employee peaks their earning potential between the ages of 35 and 37. The Economist had an interesting article on it- and how people in their 40s are now being written off in some economies- as 'too-old' and 'past-their-prime'.......... It was also referred to in the recent legislation in South Korea (where it was used as one of the justifications for a unique social welfare scheme- whereby the minimum wage for all employees is to be set at a minimum of 70% of the median wage- and wages in general are to increase by 55% by 2020............ You know- rereading that article- South Korea looks like a very nice place to spend a few years- if you can ignore the menace on their northern border.............

People at age 36- do not necessarily have a lifetime of payrises in front of them- indeed- in an Irish context, they may be lucky to keep pace with inflation. I'm in my mid 40s. I could show you a payslip from 2002 and one from last week- my net takehome pay was a couple of hundred a week more 15 years ago- than it is today- and- I didn't have a few lovely children soaking up all my hard earned income (though I wouldn't have it any other way).

There are pros and cons to all of these things- however, in general, it would be rather foolish to imagine the first time buyer is a better punt for a lender than a subsequent buyer- their main selling point in my mind- would be more years to go to retirement than a subsequent buyer- but certainly not a greater earning potential/prospect.

I have just turned 37 and I’m nowhere near what I would consider potential peak earnings

The_Conductor

Cyrus wrote: »

I have just turned 37 and I’m nowhere near what I would consider potential peak earnings

It depends on your profession and/or industry.
I'd like to imagine my earning potential has upside too- however, to be honest with you- I'd put additional value on extra annual leave- than I would a pure monetary boost. Your priorities change at different stages in your life- I've young children- while my finances may be shot- I value having time spend with them more than I do having a couple of grand extra in the bank..........

The older your get- the more you value other things- which is why so many firms are trying to emphasise their family friendly policies for those with young families and/or caring obligations for family members or the elderly.

Its not all about money- but many people don't necessarily appreciate this until they reach certain stepping stones in life.

Tigerandahalf

Cyrus wrote: »

I have just turned 37 and I’m nowhere near what I would consider potential peak earnings

That is what you think now.
What happens if you fall into illhealth for some years?
Or maybe you will have 2/3 children?

Your disposable income will probably never be as good until the kids have finished college and at that stage you will be a few years from retirement.

I do think the central bank needs to take into account families in apartments when putting measures in place for 2nd mortgages.

We saw in the census a big increase in that type of living - many looking to trade up I presume.

The result of all this will be a declining birth rate especially in the Dublin area.

We will have a report out in 20 years telling us how government policy pushed the birth rate down.

Given the huge demographic problem in Europe we should be supporting the promotion of a better birth rate and capping the price of housing should be seriously looked at.

There should also be a ban put on the bidding up on property with a max ceiling of some sort in place.

You will say how do you sell a property at ceiling price if 10 people are willing to buy it. Create a lottery system.

The alternative is a spiral of rising prices. The builder gets more profit through bidding for a house. The next time he buys land he pays even more until the whole thing goes bust.

KellyXX

The_Conductor wrote: »

It depends on your profession and/or industry.
I'd like to imagine my earning potential has upside too- however, to be honest with you- I'd put additional value on extra annual leave- than I would a pure monetary boost. Your priorities change at different stages in your life- I've young children- while my finances may be shot- I value having time spend with them more than I do having a couple of grand extra in the bank..........

The older your get- the more you value other things- which is why so many firms are trying to emphasise their family friendly policies for those with young families and/or caring obligations for family members or the elderly.

Its not all about money- but many people don't necessarily appreciate this until they reach certain stepping stones in life.

If I was offered a raise or extra annual leave I would take extra annual leave every time.
Thats me in my 40s. In my 20s and 30s I would always take the money.

Cyrus

Tigerandahalf wrote: »

That is what you think now.
What happens if you fall into illhealth for some years?
Or maybe you will have 2/3 children?

Your disposable income will probably never be as good until the kids have finished college and at that stage you will be a few years from retirement.

I do think the central bank needs to take into account families in apartments when putting measures in place for 2nd mortgages.

We saw in the census a big increase in that type of living - many looking to trade up I presume.

The result of all this will be a declining birth rate especially in the Dublin area.

We will have a report out in 20 years telling us how government policy pushed the birth rate down.

Given the huge demographic problem in Europe we should be supporting the promotion of a better birth rate and capping the price of housing should be seriously looked at.

There should also be a ban put on the bidding up on property with a max ceiling of some sort in place.

You will say how do you sell a property at ceiling price if 10 people are willing to buy it. Create a lottery system.

The alternative is a spiral of rising prices. The builder gets more profit through bidding for a house. The next time he buys land he pays even more until the whole thing goes bust.

I have small kids and I have serious illness cover so thanks for the condescension but I’m covered thanks

KellyXX

Cyrus wrote: »

I have small kids and I have serious illness cover so thanks for the condescension but I’m covered thanks

Have you ever seen the stats on how many people actually got payments from insurance companies from serious illness cover when diagnosed with a serious illness? It will make you cry. I work in the industry and its horrible.

The_Conductor

Ok guys- lets calm down- there isn't a right and a wrong- and to be perfectly honest- this isn't the right place to be discussing the ins and outs of critical illness cover etc Perhaps it might be valid for a new thread- however, in the context of the 2017 Property Market thread- its not a good home.

The Student

Tigerandahalf wrote: »

There should also be a ban put on the bidding up on property with a max ceiling of some sort in place.

You will say how do you sell a property at ceiling price if 10 people are willing to buy it. Create a lottery system.

The alternative is a spiral of rising prices. The builder gets more profit through bidding for a house. The next time he buys land he pays even more until the whole thing goes bust.

The purchase of a property is a commercial transaction pure and simple. Why should a ceiling be put on the price. If I have improved my earning capacity I should be allowed use it as I see fit.

If you cant afford to purchase in a particular area then buy where you can.

The_Conductor

The Student wrote: »

The purchase of a property is a commercial transaction pure and simple. Why should a ceiling be put on the price. If I have improved my earning capacity I should be allowed use it as I see fit.

If you cant afford to purchase in a particular area then buy where you can.

A lot of people- and indeed government policy- are moving from viewing property as a commercial transaction and/or a commodity which should be allowed trade on the open market- towards a more and more socialist approach- where property is held for the common good.

It suits the media to ignore this- when its a cohort of landlords who are getting reefed by the Revenue Commissioners- or misbehaving tenants- however, the boot is very rapidly on the other foot- when the individual property rights of owner occupiers come into play.

Policy at the moment- is to move people out of the rental market- and into private private- regardless of where the private property is- or how suitable it may be. They are then left to fend for themselves.

There are a number of consequences of this policy- that patently will only become clear in the coming years- however, one consequence- as pointed out in an earlier post- is the birth rate in Dublin and its suburbs has fallen off a cliff.

myshirt

There was a big thread on here a couple of months ago in the Work Problems section where a person (late 30's) was upset about being asked 'Why hasn't it happened for you?'

While it's harsh, the question is valid. Your career has the most momentum in your 20's / early 30's, that is when leaders emerge, and others trail off. We have a senior manager in our place who is 28, he manages staff older than him, he's a good competent guy but there certainly is the feeling of resentment from other staff who have 'more experience' and that had been his main challenge in developing his management skills.

It's most often a thing in the public service, but I would say quite loudly that is a huge difference between 10 years experience, and 1 years experience repeated 10 times.

For those outside the public service, I don't believe it's all over when you are in your mid 30's, certainly not, but there are lots out there with no career plans in jobs that don't really interest them. You are not going to move up the financial food chain like that. As that accounts for a lot of people, I would support the idea that you've increased further towards your max earnings by 35ish than you will with the increases that follows.

The Student

The_Conductor wrote: »

There are a number of consequences of this policy- that patently will only become clear in the coming years- however, one consequence- as pointed out in an earlier post- is the birth rate in Dublin and its suburbs has fallen off a cliff.

The lowering birth rate in Dublin city centre decreased in the 1950's when Drimnagh, Ballyfermot etc were built. As a city grows the citys birth rate declines and the suburbs one increases. As the suburbs get older the further out surburbs birth rate increases until such time as the people in the inner suburbs die thereby freeing up property.

However the price of this property is higher because it has all amenities around it and normally good public transport in comparison to suburbs further out.

I personally dont think the State wants to be a landlord and will continue to farm out its responsibilities to housing agencies and the private sector.

Villa05

KellyXX wrote:

If I was offered a raise or extra annual leave I would take extra annual leave every time. Thats me in my 40s. In my 20s and 30s I would always take the money.

I'd say the tax system has a lot to do with that decision even in your 20"s

Time off will always beat a raise where the raise is taxed at 50%

mkdon

So can I get a list of property in Dublin sold this year and last? What about the initial asking price,

Cyrus

The Student wrote: »

The purchase of a property is a commercial transaction pure and simple. Why should a ceiling be put on the price. If I have improved my earning capacity I should be allowed use it as I see fit.

If you cant afford to purchase in a particular area then buy where you can.

Exactly

Cyrus

mkdon wrote: »

So can I get a list of property in Dublin sold this year and last? What about the initial asking price,

Property price register has everything sold

Asking price is largely irrelevant

Sarn

mkdon wrote: »

So can I get a list of property in Dublin sold this year and last? What about the initial asking price,

The property price register will state what the sale price for a property was. Google and daftdrop will often mention the asking price.

I’m not sure why you’re asking this as it was already answered in the other thread that you started on that specific question.

ArnieSilvia

I've been following this thread from the start and as the year comes to an end it looks more and more like the one about the glut of property from NAMA 3 years ago. It didn't happen even though so many hoped for it.
Similarly, so many hope for prices to fall as their disposable income shrinks (hey Conductor, compare the gross AND net from 2002 vs 2018 and tell me about how much motor tax and insurance you used to pay, or where do you find that Tescos bread for 35 cent a loaf, regardless of what muck it was )
Prices won't fall unfortunately. Simply because prices now reflect the fact that 2 incomes buy the property not one. And less people have kids. People got smarter and as the time goes on, everybody has adjusted to new reality and play the system this way, competing with each other, this is pure animal survival stuff. Same thing with careers and working long hours, now seems more common than ever here.

I don't think the prices will fall, what I see is people adjust to higher prices by either working long hours, and/or upskill to get payrise and this will go on.
In terms of Brexit effect, it won't matter in Dublin. The ones who work, live and want to buy in Dublin don't care about it's effect on farming, diary etc. They are not farmers, they are professionals in sectors of global reach such as IT.
In the countryside, I found throughout the country the phenomenon that prices are low until some multinational company decides to build a factory like Regeneron in Limerick, then the wheels start turning and the ones who know first (gravy train) fill their pockets. Same company goes elsewhere in couple of years, rinse repeat. Why? Because there is not enough density and infrastructure for people to find alternative work. If the regions grew more naturally rather than in instant bursts, then they wouldn't be falling miserably.

Brego888

Just a quick question about a discussion from a few pages back on 2nd time buyers.

I am a home owner planning to trade up in next 18 months. Do I have to provide the 20% deposit exclusively from savings or will the potential profit I will make on my current property be factored in? I stand to make about €80,000 on the sale of my current property based on similar sale prices recently.

And if I can cover deposit from my existing property, how does paying a deposit work when you are in a chain?

Cyrus

Brego888 wrote: »

Just a quick question about a discussion from a few pages back on 2nd time buyers.

I am a home owner planning to trade up in next 18 months. Do I have to provide the 20% deposit exclusively from savings or will the potential profit I will make on my current property be factored in? I stand to make about €80,000 on the sale of my current property based on similar sale prices recently.

And if I can cover deposit from my existing property, how does paying a deposit work when you are in a chain?

you will be unlikely to be able to draw down your mortgage until you have sold the other mortgaged property so the profit will form part of your deposit.