Property Market 2017

Taylor365

B00MSTICK wrote: »

AIB I guess - think they are the only ones doing it?

I'd prefer the 2-3% cashback offered by some of the other lenders but I guess if you are really skint and the repayments are high then the 6 months might be "better"

The cashback is another bit of a scam as such.

''Here, take this scrap of cash now, while we hold off on adjusting rates throughout the years...''

Or so I've been told!

Cuddlesworth

Taylor365 wrote: »

The cashback is another bit of a scam as such.

''Here, take this scrap of cash now, while we hold off on adjusting rates throughout the years...''

Or so I've been told!

Its just another method of getting around the deposit requirements. You only really need 7-8% deposit now, and some borrowed cash.

Samuel T. Cogley

Which is perfectly reasonable to be honest. The CB aren't there to regulate prices, but borrowing. 92% mortgages are fine if the consensus is we're in a rising market for the foreseeable future.

Bob24

Samuel T. Cogley wrote: »

Which is perfectly reasonable to be honest. The CB aren't there to regulate prices, but borrowing. 92% mortgages are fine if the consensus is we're in a rising market for the foreseeable future.

Well going around the borrowing regulations established by the CBI is undermining its power to do so. When they say maximum 90% LTV they are not regulating prices, they are defining what they consider a safe debt ratio (you can be sure if unsafe lending practices lead us to another banking crisis, all fingers will be pointed at the CBI for not regulating enough, even though many of the same people who would make them responsible are at the moment blaming them for regulating too much).

The_Conductor

Samuel T. Cogley wrote: »

Which is perfectly reasonable to be honest. The CB aren't there to regulate prices, but borrowing. 92% mortgages are fine if the consensus is we're in a rising market for the foreseeable future.

However, the fact of the matter is- there is no consensus.
The Dublin market- in particular its second hand market- has become divorced from both its new build market- and the rest of the country- and is stagnating. This is despite a chronic shortage- and a lack of family homes being built- where people want to live (and indeed, in their totality).

In this context- many commentators are suggesting that the second hand market in Dublin- is simply 18-24 months ahead of the second hand market elsewhere- however, on the back of government assistance, they expect the new market to remain buoyant.

Aka- despite a chronic shortage of housing- the only thing supporting the market is what is viewed by an increasing number of commentators as the irresponsible financial assistance the government are affording first-time-buyers of new builds.

I.e. we may need 25k units per annum and currently have ramped production up to perhaps 17,500 per annum- however, despite this mismatch between supply and demand- price increases (and any stability in the market) is contingent in continuing government intervention in favour of first-time-buyers.

Its not a healthy market- at all- I'm not clear what medicine it needs- time will tell whether, or not, an equilibrium will ever be met.

Will home owners, prospective purchasers and others- be satisfied with prices that may fall in the medium term- and how will lenders view this (esp. in light of very obvious naughtiness on the part of AIB- who are on the record shattering CB rules willy nilly to shovel money out the door).

I'm glad I don't have shares in any Irish banks- and I most certainly will not be buying AIB shares- as its entirely foreseeable that there is an ocean of hurt coming down the road, yet again.........

OfflerCrocGod

What rules have AIB shattered? As long as the LTI rule stays and is mostly enforced I don't see a bubble. What I see is lots of people putting family savings/loans down as deposits. That's their loss though not the banks. Unless we see at least a 15% drop in prices the banks won't be going bust. Who thinks prices will drop that much?

Samuel T. Cogley

Even if they do it's people own equity that's going in the main. I can't imagine there are that many getting away with (effective) 7% deposits and even if they are is 3% going to make a huge difference? I really can't see it being the difference between a healthy balance sheet and a collapse.

jamesthepeach

OfflerCrocGod wrote: »

What rules have AIB shattered? As long as the LTI rule stays and is mostly enforced I don't see a bubble. What I see is lots of people putting family savings/loans down as deposits. That's their loss though not the banks. Unless we see at least a 15% drop in prices the banks won't be going bust. Who thinks prices will drop that much?

Well I've never heard this before. Never, not even 12 or 13 years ago. No, never heard anyone speak like that.
Eeek.

On a serious note though.
If there is a crash noone will see it coming.
After it happens the world will be full of people who saw it coming and predicted it and saying the digs on the street knew it was coming.
Kind of like the amount of people that were at Woodstock.

Villa05

jamesthepeach wrote:

On a serious note though. If there is a crash noone will see it coming. After it happens the world will be full of people who saw it coming and predicted it and saying the digs on the street knew it was coming. Kind of like the amount of people that were at Woodstock.

A crash is inevitable the way the property market is being managed. If it were managed in a mature careful manner, damage could be minimised even eliminated. You reap what you sow and we are planning for maximum pain. Be prepared

jamesthepeach

Villa05 wrote: »

A crash is inevitable the way the property market is being managed. If it were managed in a mature careful manner, damage could be minimised even eliminated. You reap what you sow and we are planning for maximum pain. Be prepared

Agreed. My old man always told me to always be getting ready for the next recession. If you are doing that you can clean up when it happens. Advice I have followed and found to be excellent for the last 30 years.

GaGa21

So what's the advice then, buy now or wait for this next recession? And how long till it happens?

Wanderer78

GaGa21 wrote:

So what's the advice then, buy now or wait for this next recession? And how long till it happens?

Nobody knows the answer to your last question, it's a chance really, nobody can predict what will or won't happen. If you have a roof over your head, just be glad of that

jamesthepeach

GaGa21 wrote: »

So what's the advice then, buy now or wait for this next recession? And how long till it happens?

I'm thinking I'm leaning towards selling myself.
One bed apartments, of which I own two, are on the up big time and renting is disaster outs these days, so it's airbnb or selling.

Thinking very hard of taking advantage of the recent jump in apartment prices and just getting out.

Then You'll see others dying to dive in.
So as a poster said before, do what you feel is right yourself.

pilly

I think we've become to keen on viewing buying a house as an investment. The main priority should always be to have a home. If you buy a place you could happily live in all your life then you need never worry about what it's worth.

Bob24

Villa05 wrote: »

A crash is inevitable the way the property market is being managed. If it were managed in a mature careful manner, damage could be minimised even eliminated. You reap what you sow and we are planning for maximum pain. Be prepared

Agreed it is very likely. Having said that it could be next year, in 3 years, in 6, or in 10.

Problem is some people need a place to live now and while I definitely think the way things are done will eventually crash the market, I wouldn't believe anyone who claims they can predict the timing.

This makes it a difficult situation for people who need to sort accommodation in the short to medium term (they can't wait indefinitely and have to make a decision at some point, but if they do buy they might get burned a few months/years afterwards).

pilly

Bob24 wrote: »

Agreed it is very likely. Having said that it could be next year, in 3 years, in 6, or in 10.

Problem is some people need a place to live now and while I definitely think the way things are done will eventually crash the market, I wouldn't believe anyone who claims they can predict the timing.

This makes it a difficult situation for people who need to sort accommodation in the short to medium term (they can't wait indefinitely and have to make a decision at some point, but if they do buy they might get burned a few months/years afterwards).

How do you get burnt though if you're living in a house?

Bob24

pilly wrote: »

How do you get burnt though if you're living in a house?

Well if property prices collapse and you get into negative equity while having a huge mortgage, you're kind of stuck (see people who bought in 2006/7/8 and have to wait for the next bubble before they can make any move if for some reason they want to sell).

I think it is even more risky with nowadays low interest rate. It might take a while but when they inevitably rise, it will mechanically push down house prices because new buyers won't be able to borrow a much, but people who purchased at inflated prices due to low rates will both have to repay more due to their variable rate increasing while seeing the price of their property reduce (which is why I think fixed rates for the while duration of the mortgage are much better, which is what is done in many countries).

Cyrus

Bob24 wrote: »

Well if property prices collapse and you get into negative equity while having a huge mortgage, you're kind of stuck (see people who bought in 2006/7/8 and have to wait for the next bubble before they can make any move if for some reason they want to sell).

I think it is even more risky with nowadays low interest rate. It might take a while but when they inevitably rise, it will mechanically push down house prices because new buyers won't be able to borrow a much, but people who purchased at inflated prices due to low rates will both have to repay more due to their variable rate increasing while seeing the price of their property reduce (which is why I think fixed rates for the while duration of the mortgage are much better, which is what is done in many countries).

negative equity isnt an issue as such, its more of a mental thing, also if you have 20% + equity you are insulated by a reasonable amount

as long as you can afford your mortgage and dont need to move there isnt an issue

Cyrus

jamesthepeach wrote: »

Well I've never heard this before. Never, not even 12 or 13 years ago. No, never heard anyone speak like that.
Eeek.

On a serious note though.
If there is a crash noone will see it coming.
After it happens the world will be full of people who saw it coming and predicted it and saying the digs on the street knew it was coming.
Kind of like the amount of people that were at Woodstock.

yet there are more people on threads like this calling an impending crash than not

its not coming any time soon

Bob24

Cyrus wrote: »

as long as you can afford your mortgage and dont need to move there isnt an issue

Yep that what I said. Thing is, a proportion of people will always need to move after a few years because for whatever reason (size, location, ...) the place doesn't suit them any-more. And often property price drops are coming at times where unemployment rises and a unusually large number of people lose their jobs.

So the two causes for issues your mentioned will statistically affect a good number of people.

jamesthepeach

Cyrus wrote: »

negative equity isnt an issue as such, its more of a mental thing, also if you have 20% + equity you are insulated by a reasonable amount

as long as you can afford your mortgage and dont need to move there isnt an issue

It is an issue if the crash takes your job too. That's the part many forgot about the last time.

Cyrus

jamesthepeach wrote: »

It is an issue if the crash takes your job too. That's the part many forgot about the last time.

crash or no crash regardless of the price of your property as long as you have a mortgage you generally need to stay in employment, thats just an inherent risk with taking a long term loan

jamesthepeach

Cyrus wrote: »

crash or no crash regardless of the price of your property as long as you have a mortgage you generally need to stay in employment, thats just an inherent risk with taking a long term loan

That's my point.

Zulu

It's worth pointing out that you're probably more likely to get a 6 month holiday from your mortgage in the event of losing your job, than a six month break from paying rent.

jamesthepeach

Ok. I was on the fence before. Actually I was more on the no crash but cautious side.
We're headed for another property crash. I'm certain now.

Bob24

jamesthepeach wrote: »

Ok. I was on the fence before. Actually I was more on the no crash but cautious side.
We're headed for another property crash. I'm certain now.

I don't think it's imminent though. I'd definitely agree we are slowly but surely sleepwalking into it, but really we are still far from the madness of 2007.

quadrifoglio verde

jamesthepeach wrote: »

I'm thinking I'm leaning towards selling myself.
One bed apartments, of which I own two, are on the up big time and renting is disaster outs these days, so it's airbnb or selling.

Thinking very hard of taking advantage of the recent jump in apartment prices and just getting out.

Then You'll see others dying to dive in.
So as a poster said before, do what you feel is right yourself.

Buy when people are fleeing and sell when people are rushing in.
I'm seeing more of, this time it's different and prices can't fall now. That scares the **** out of me. The only thing is I can't predict when a downturn will happen, to what level of a fall will occur and how long it will last.
But it will happen again.
Prices are back to late 2004/2005 prices and 3 years ago we thought they were ludicrous. Now people are convinced it's cheap

Bob24

Don't know how representative it is of the general sentiment, but the IT has a piece on the ‘Tesco-isation’ of home rental sector driving landlords out which pretty much matches the comments on this thread with a landlord saying new regulations are making it very hard for small Irish landlords versus huge foreign landlords and driving them out of the market except for AirBnB type of lettings: http://www.irishtimes.com/business/personal-finance/tesco-isation-of-home-rental-sector-driving-landlords-out-1.3079916

Clearly this is also having a bad side-effect for tenants with things such as this reducing the rental stock:

“Airbnb has a huge influence on the sector. There’s a particular development in the docklands where there are more than 40 Airbnb units. Those units would initially have been standard lettings. That is again reducing the supply into the sector.”

Cuddlesworth

quadrifoglio verde wrote: »

Prices are back to late 2004/2005 prices and 3 years ago we thought they were ludicrous. Now people are convinced it's cheap

A few people I have met at house viewings are just thinking of pulling out of the market. Sellers looking for 20-30% more then houses sold 6 months ago and fools willing to throw money at them.

I believe a few things. With 20% increases year on year, a affordability limit will be reached. And prices in Ireland have historically only gone hard in either direction.

alwald

It's a question of supply and demand taking into consideration that the economy and unemployment rate will remain the same or improve, if the government sticks to its plan of building 25000 houses per year for the next few years then prices will go down eventually, there won't be a similar crises than 2009/2010, we will more likely see a stable market with stable prices, there won't be any of this nonsense war bidding or queuing for few nights to buy a 1 bed flat....the real question is when is it gonna happen?