Property Market 2018

derekbro

Kbc reducing some of their rates but also putting up their 10 year Rate by .2% LTV 60-80. I'm on a 1 yr fixed with them up in July and was going to change to 10 year fixed then but might see if I can get the current 2.99% before April.
https://www.kbc.ie/news-and-press/latest-news-and-press-releases/kbc-bank-lowers-mortgage-rates-for-customers-(1)

scouserstation

The_Conductor wrote: »

Demand would appear to be softening- and according to DAFT reports- it is taking longer to sell properties in Dublin than 12 months ago. However- prices are still increasing. If I was in the market to downsize- I'd be inclined to move sooner rather than later- and I'd also be inclined to sell first- put my stuff into storage- maybe take an extended break in Spain or Portugal- and come back next Autumn and buy then as a cash buyer. Thats just me. However....... Apartments in Dublin- have never been rising at the rate they're currently rising at- house prices have fallen back- apartment prices, not. So- you're looking at paying a higher price in a few months time- than you would now......

As house prices continue to increase and become unaffordable for more people it would inevitably lead to increased apartment prices, when people cannot afford the semi-d they can either settle for an apartment in Dublin or resign themselves to longer commute times to get that perfect house they desired.

You are correct in saying house sales are slowing down a little and i knew this year would see a slowdown in price growth also, you can even see house prices dropping in certain areas of Dublin, but this will do no harm, we cannot have another runaway train wreck with prices spiralling out of control like we had in the past. It is in everybodys best interest if we see only modest price growth over the next couple of years.

zl1whqvjs75cdy

Agreed. Just finished buying myself in greater Dublin, and while I hope we haven't bought at the top, I don't want to pull the ladder up after me. Price growth slow down would be great. Just hope the central bank don't increase the limits or the government don't do anything else to stoke demand. It doesn't exactly need it.

scouserstation

donkeyoaty0099 wrote: »

Agreed. Just finished buying myself in greater Dublin, and while I hope we haven't bought at the top, I don't want to pull the ladder up after me. Price growth slow down would be great. Just hope the central bank don't increase the limits or the government don't do anything else to stoke demand. It doesn't exactly need it.

Central banking rules are preventing a lot of people from buying/moving whether this is a good or bad thing remains to be seen, the new government backed rebuilding Ireland loan scheme certainly threatens to stoke demand but this scheme is too small in my opinion to make a serious impact on house prices.

I think now is still a good time to buy, prices will not drop significantly over the next couple of years and all the indicators suggest we are in for long term increase, rising interest rates will halt this to some degree but i think people are looking too much into this, even with an interest rate hike it is still cheaper to service a mortgage than to rent.

Dont be surprised also to see the European market opening up over the next few years which could see Irish customers benefiting from competitive interest rates we see in other EU countries, this could actually see interest rates drop for a lot of mortgage holders in this country.

Bob24

scouserstation wrote: »

Dont be surprised also to see the European market opening up over the next few years which could see Irish customers benefiting from competitive interest rates we see in other EU countries, this could actually see interest rates drop for a lot of mortgage holders in this country.

Banking services will open up for current accounts and low risk type of services. But I would be surprised to see a significant number of cross country mortgages. The problem for foreign banks is how to get proper collaterals on mortgages. A German bank won’t bother setting up a legal team which is able to handle Irish defaulters, and even if they did they would have the same issues Irish banks do with very limited repossessions meaning they wouldn’t be able to offer the same rates they do in Germany.

I actually approached a French bank to try and refinance an Irish mortgage with a better rate as my whole family has been loyal customers with a branch manager there for many years and I knew he would do it if there is any way to do so. He looked into it with his management and said the bank would be open to the idea but only if I could provide collaterals in France for the full mortgage amount (unfortunately I can’t which is a shame as what they were offering is 1.6% fixed for the whole duration of the mortgage).

scouserstation

Bob24 wrote: »

Banking services will open up for current accounts and low risk type of services. But I would be surprised to see a significant number of cross country mortgages. The problem for foreign banks is how to get proper collaterals on mortgages. A German bank won’t bother setting up a legal team which is able to handle Irish defaulters, and even if they did they would have the same issues Irish banks do with very limited repossessions meaning they wouldn’t be able to offer the same rates they do in Germany.

I actually approached a French bank to try and refinance an Irish mortgage with a better rate as my whole family has been loyal customers with a branch manager there for many years and I knew he would do it if there is any way to do so. He looked into it with his management and said the bank would be open to the idea but only if I could provide collaterals in France for the full mortgage amount (unfortunately I don’t which is a shame as what they were offering is 1.6% fixed avouer the whole duration of the mortgage).

A European mortgage market is on the horizon, especially for low risk new applicant mortgages, i think that a lot of problem customers and default mortgages will end up in the hands of so called vulture funds, and you can already see this happening, once there are mechanisms in place to deal with the legal end of mortgage issues then there is nothing stopping the financial institutions being able to offer a product to Irish based customers without the legal risks involved.

Pepper finance were the first International financial institution to break into the Irish market offering mortgage solutions, albeit for different reasons, but i believe this precedent will continue right throughout the whole financial sector, for positive as well as negative reasons,

Bob24

scouserstation wrote: »

A European mortgage market is on the horizon, especially for low risk new applicant mortgages, i think that a lot of problem customers and default mortgages will end up in the hands of so called vulture funds, and you can already see this happening, once there are mechanisms in place to deal with the legal end of mortgage issues then there is nothing stopping the financial institutions being able to offer a product to Irish based customers without the legal risks involved.

Massive use of vulture funds for any type of issue would not be in anyone’s interest (including the foreign banks - they don’t want to be stuck with a very large number of defaulters about which they can’t do anything and whose mortgages they have to dump to vulture funds for a very hefty discount, this would increase the cost of doing business a lot compared to their home market).

I really think hoping that German or French banks will massively offer the same type of rates in Ireland as they do in their home markets anytime soon is a mistake. The legal framework and property market environment in Ireland are major causes (though not the only ones) for our higher rates; those banks would run into the same issues as Irish banks and have even more overhead as they don’t have operations in Ireland to handle those things so they would have to outsource to some kind of partner with local implantation do deal with that.

Henbabani

Rents now higher than in boom time as costs outside Dublin surge
https://www.independent.ie/business/personal-finance/rents-now-higher-than-in-boom-time-as-costs-outside-dublin-surge-36727238.html

Any signs of slowdown?

The_Conductor

Henbabani wrote: »

Rents now higher than in boom time as costs outside Dublin surge
https://www.independent.ie/business/personal-finance/rents-now-higher-than-in-boom-time-as-costs-outside-dublin-surge-36727238.html

Any signs of slowdown?

Rent increases in Dublin- are now @ the 4% RPZ increase limits- and falling- according the RPT figures out today. Rents are continuing to increase- but the rate of increase has fallen off a cliff.

Bob24

The_Conductor wrote: »

Rent increases in Dublin- are now @ the 4% RPZ increase limits- and falling- according the RPT figures out today. Rents are continuing to increase- but the rate of increase has fallen off a cliff.

Also it seems like increases are larger in the suburbs than in the city. This would tend to indicate we are approaching the maximum acceptability point in the most desirable areas, and people are moving further away to find something within their budget.

Graham

Bob24 wrote: »

This would tend to indicate we are approaching the maximum acceptability point in the most desirable areas, and people are moving further away to find something within their budget.

Or it would indicate the rent caps are starting to bite. Good for current tenants, for everyone else, expect limited new rental properties and dwindling rental stock to follow.

Bob24

Graham wrote: »

Or it would indicate the rent caps are starting to bite. Good for current tenants, for everyone else, expect limited new rental properties and dwindling rental stock to follow.

I don’t know ... if it was rent caps starting to work, the effect wouldn’t be restricted to core Dublin areas and would effect all the RPZs (also the figures are only for new tenencies whereby avoiding caps is renpant).

I think we might be reaching affordability limits for very high demand areas and rises there will keep happening but more in line with the rise of spending power.

I mean in Grand Canal Dock which I know well you have 1 beds renting for over 2k and 2 beds for over 3k. Not sure about the one beds, but just before the 2008 crash, these same 2 beds would have been 2k at most (30% cheaper) and at the time they were brand new and all shiny whereas now while still very nice apartments they are 10-15 years old.

LookingFor

"Dept of Finance warned against Govt-backed first-time buyer scheme"

https://www.rte.ie/news/ireland/2018/0322/949242-first-time-buyer-scheme/

The two finance departments also said they believed the Rebuilding Ireland Home Loan would be subject to the Central Bank's Loan to Income rules.

The documents show that in a lengthy response the Department of Housing argued that "as the interest rate is to be fixed over the full life of the loan, thereby limiting borrowers exposure to interest rate rises, it is not necessary to apply the Central Bank Loan to Income regulations to the scheme".

So the department of finance raised most of the concerns we raised here earlier, including the lack of the same loan to income limits as applies in the private market.

But the department of housing ignored them - and completely ignored how unfair it would be for other buyers to have to compete with buyers playing with different Loan to Income rules, the potential upward pressure on prices etc.

For what it's worth, I wrote to Varadkar about this, and he referred the letter on to Eoghan Murphy. Murphy wrote back with just a copy and paste of the promotional blurb for the scheme and completely ignored my specific questions about the unfairness of the loan to income limits in this scheme vs the private market. Dunno how they can do this with a straight face.

keane2097

Murphy doesn't really give the impression of a guy in touch with the needs of the unwashed masses does he.

cruizer101

It annoys me a lot as we are just above the limit as a couple so directly competing with those who are able to avail of it.
Its a ridiculous scheme really.

TheMilkyPirate

cruizer101 wrote: »

It annoys me a lot as we are just above the limit as a couple so directly competing with those who are able to avail of it.
Its a ridiculous scheme really.

Ridiculous because you can't avail of it.

aloooof

TheMilkyPirate wrote: »

Ridiculous because you can't avail of it.

The issue is a supply issue. This scheme only serves to increase demand.

I have friends who intend to use this scheme, and will count themselves lucky if they can, as they are aware it's far from fair.

kippy

TheMilkyPirate wrote: »

Ridiculous because you can't avail of it.

Of course and the fact he is directly competing with those who can.

cruizer101

TheMilkyPirate wrote: »

Ridiculous because you can't avail of it.

I think it is a bad scheme whether or not I could avail.
I was actually due a pay increase just after it was announced and my boss offered to pay slightly less so I could avail of it and to try arrange something else with the excess (expenses or something like that), but I decided against.

It is bad because it applies a different set of rules to those who are eligible, they can get a mortgage for an amount higher than the banks are allowed offer, higher than the central banks own rules.
It is bad because it does little to nothing to actually increase supply which is what is really needed to solve the crisis, let the banks take care of supplying credit guided by the rules of the central bank and let the government try resolve the supply issue.
The fact that the department of finance advised against it also shows how bad a scheme it is.

So no it is not ridiculous because I can't avail of it it is ridiculous on its own merits.

All that said I've no issue with people availing of it, if the product is there take it, I would certainly consider it if I could but that doesn't mean I think it is sensible for the country as a whole.

Bob24

TheMilkyPirate wrote: »

Ridiculous because you can't avail of it.

It is a bad scheme in general becsause it is increasing demand whereas the problem is the lack of supply.

But on top of that it is unfair because not everyone can avail of it. If someone who is borderline but can’t avail of it gets priced out of the market by people who can avail of it, I certainly understand that person being pissed-off about it.

UsBus

Will be interesting to see what happens with property here with signs the stock market is starting to seriously wobble..

Technology stocks are in real danger now, way over priced and with interest rates on the rise, they are on the wrong side of inflation..Throw in the US trade war with China and you could have a right storm...Facebook could be a big catalyst here..not sure they'll recover too quickly..

The_Conductor

Bob24 wrote: »

It is a bad scheme in general becsause it is increasing demand whereas the problem is the lack of supply.

But on top of that it is unfair because not everyone can avail of it. If someone who is borderline but can’t avail of it gets priced out of the market by people who can avail of it, I certainly understand that person being pissed-off about it.

Wholly aside from borderline cases- Ireland is unique in the Eurozone in having a private sector with so much debt at floating interest rates. There is *no* other country in the Eurozone in this position- none.
As interest rates rise- the private sector- and in particular home-owners on floating interest rates- are going to get slaughtered- there is going to be carnage in the market.

The prudent thing to do- to try and shelter the great unwashed Joe and Mary public out there- is a scheme to allow them to migrate existing mortgages over to products which are fixed for the entire length of the mortgage- backed by either exchequer borrowing (as in the current scheme) or long term corporate borrowing (some of our bluechip companies have 20 year paper out there- though it may be too late to try and issue more in any great volume).

Deliberately stoking demand among FTBs- when there is not a commensurate increase in stock for them to chase- is a one way recipe for bubble pricing- as we so patently already have.............

Finance obviously signed off on Housing's scheme- despite their misgivings- they shouldn't have- however, the current shower will presumably be somewhere else when the manure hits the fan.

Wanderer78

UsBus wrote:

Technology stocks are in real danger now, way over priced and with interest rates on the rise, they are on the wrong side of inflation..Throw in the US trade war with China and you could have a right storm...Facebook could be a big catalyst here..not sure they'll recover too quickly..

Add in qe roll down, and we could potentially have a right mess on our hands, I suspect Facebook will be fine eventually, shur who didn't know what the crack is with them

sightband

Wanderer78 wrote: »

I suspect Facebook will be fine eventually, shur who didn't know what the crack is with them

The only shocking thing about that whole story is the amount of people who didn’t know what the craic was with them.

“This app requires access to your email, contacts etc. etc.”....umm okey dokey, no problem, just so long as I get to play this game for 2minutes until I realise it’s shíte.

Wanderer78

sightband wrote:

The only shocking thing about that whole story is the amount of people who didn’t know what the craic was with them.

I'm a little baffled by this myself, it's been clearly obvious to myself since it's early days of potentially how dangerous the site is, but shur here we are, I suspect this will all eventually blow over anyway, and it ll be business as usual

CalRobert

Wanderer78 wrote: »

I'm a little baffled by this myself, it's been clearly obvious to myself since it's early days of potentially how dangerous the site is, but shur here we are, I suspect this will all eventually blow over anyway, and it ll be business as usual

Sadly I think you're right. Though it's worth noting that if you _must_ use it (I have elderly relatives who seem to have forgotten that email is a thing) doing so in a private window and using mbasic.facebook.com (no javascript) helps.

It's worth checking out Firefox Focus as well.

Bob24

The_Conductor wrote: »

The prudent thing to do- to try and shelter the great unwashed Joe and Mary public out there- is a scheme to allow them to migrate existing mortgages over to products which are fixed for the entire length of the mortgage- backed by either exchequer borrowing (as in the current scheme) or long term corporate borrowing (some of our bluechip companies have 20 year paper out there- though it may be too late to try and issue more in any great volume).

Couldn’t agree more, it is more than time for our government to realise that much higher interest rates and much lower predictability in repayment amounts compared to most other European countries is a massive threat to the stability of our property market.

But to be fair to civils servants, I am sure many of them understand that already. In the same they understood - as many of us on this forum did - that previous schemes by this government would be conter-productive and tried to push back. But at the end of the day politicians make the decisions, sometime based on short electoral prospects rather than the long term general interest of the country (politicians are not all stupid and many - though not all - also understand the issues with these schemes, but it is a matter of what they prioritise to make decisions).

There is no FG bashing here and I don’t think other credible parties would have done better (many would have done even worse), and I am not in favour of having the country ran but non-elected mandarins, but having said that the way housing/property is being managed is very frustrating!

draiochtanois

This post has been deleted.

The_Conductor

The_Conductor wrote: »

Wholly aside from borderline cases- Ireland is unique in the Eurozone in having a private sector with so much debt at floating interest rates. There is *no* other country in the Eurozone in this position- none.
As interest rates rise- the private sector- and in particular home-owners on floating interest rates- are going to get slaughtered- there is going to be carnage in the market.
................................

Considering AIB are offering 7 Year Fixed rates of 3.50% (3.44% APRC ) I reckon the much talked about interest rises aren't going to manifest themselves anytime soon.

Samuel T. Cogley

Augeo wrote: »

Considering AIB are offering 7 Year Fixed rates of 3.50% (3.44% APRC ) I reckon the much talked about interest rises aren't going to manifest themselves anytime soon.

Considering KBC were (and are for a few more days only) offering 10 years at 2.99% I think you're wrong