Property Market 2018

Cuddlesworth

The central bank isn't there to calm the housing market, they are there to stop future Zombie banks after the mistakes they made last time.

If you think things are bad now, they would certainly be worse without lending restrictions.

LookingFor

Cuddlesworth wrote: »

The central bank isn't there to calm the housing market, they are there to stop future Zombie banks after the mistakes they made last time.

If you think things are bad now, they would certainly be worse without lending restrictions.

Which the government is now bypassing :rolleyes:

Anyone earning 50-80K looking to buy a home up to 320K - your taxes are going to help sub-prime borrowers break the rules and outbid you on the market.

KellyXX

I was thinking of taking a year off work.so this would be great.
I leave my job, our hubbys income is now just under threshold.
Sweet 2% mortgage for 20 years or so, spare money invested earning 4% or more, a year off work. I'm I'm.

GingerLily

LookingFor wrote: »

Which the government is now bypassing :rolleyes:

Anyone earning 50-80K looking to buy a home up to 320K - your taxes are going to help sub-prime borrowers break the rules and outbid you on the market.

Its ridiculous, you can just ask the bank for a mortgage now for > 5 times your income, the banks will have to refuse you and you can then get this deal.

So so stupid....

markodaly

Eleanor Howling Anorexic wrote: »

Can't see the central bank allowing this to work as is, without changes to their own regs on private loans.

Is this governed by the Central Bank though? It is effectively state own competition to the bank and private market. Cant see the banks, the ECB or Europe being happy about this.

robcass78

Cuddlesworth wrote: »

The central bank isn't there to calm the housing market, they are there to stop future Zombie banks after the mistakes they made last time.

If you think things are bad now, they would certainly be worse without lending restrictions.

I'm not saying restrict lending; I'm saying build houses in line with population growth.

You're saying it's ok for the Irish banks, bailed out by taxpayers, to generate the highest-in-EU profits, highest-in-EU-capital ratios at the social cost of housing & economic constraint (low construction rate is knocking 6bn off GDP; about 4%), whilst adding that 6bn overcharge to debt on high interest rates (about 3k per household per year), with social housing landlord payments of 850m a year also picked up by taxpayers in higher tax rates due to the lack of private & social homes?

You're also saying it's ok, when the central banks themselves & ECB define the Irish banking sector as the least competitive (as assessed using HHI ratio) in Europe; have I got that right?

That logic that the banks may have to be restrained would have been ok 15 years ago when construction was in excess of demand, but currently construction is 80% less than demand.

Until the supply issue (labour in construction, financing & councils & central govt planning speed reduced) are fixed, the prices are going to continue to go up, and the economy slow (with FDI /job growth slowing), against a backdrop of rising interest rates by 2019 putting a further strain on incomes.

Rob

Villa05

Cyrus wrote:

its another subsidy for low income families paid for in the main by people who appear to earn a lot more but whose effective tax rate is nearly double

One of the core issues hindering supply is the availability of competitive loans to developers. I believe interest rates for developing property are in the double digits.

The Government giving more money to fuel the demand side while completely ignoring supply side issues is more evidence that they are a big part of the problem.

We are firmly in a bubble and the government is complicit in fully supporting it.

They have seen that the central bank rules have taken some air out of the bubble and have been trying to circumvent those rules for some time.

In a normal economy a person on the salary levels spoken about which are way over the average income should have no issues in housing themselves

Samuel T. Cogley

GingerLily wrote: »

Its ridiculous, you can just ask the bank for a mortgage now for > 5 times your income, the banks will have to refuse you and you can then get this deal.

So so stupid....

That's not how this is going to work. It will also severely limit one's choice in Dublin. You can't get a three bed terrace in Kilbarrack now for 320K.

The idea is that you can't get suitable accommodation not that you were refused for being a plank.

phunkadelic

Anyone know the story with banks making exceptions to the Central bank restrictions?
eg. the 20% limit of exceptions to the 3.5 loan-to-income restriction in a year.
Does that reset on 31st December in a year?

Villa05

phunkadelic wrote:

Anyone know the story with banks making exceptions to the Central bank restrictions? eg. the 20% limit of exceptions to the 3.5 loan-to-income restriction in a year. Does that reset on 31st December in a year?

Think it's been changed to 10%

LirW

While I appreciate that people freak out because the government are firing up an already heated market there are very little details on how easy it'll actually be to get one of these council mortgages.
I believe there will still be strict enough rules for low-income borrowers that have to be met. Nothing said about the length these applications take.
The scheme before re modelling didn't issue many mortgages.

Just because people are refused doesn't automatically qualify them for a council mortgage in the end. People with bad credit ratings und poor financial planning that's obvious on statements will still not get mortgages.
This scheme probably aims at people that just about don't meet the disposable income levels like parents that have creche fees to pay or people that wouldn't qualify for a mortgage because they can't get the necessary insurance for it because of medical reasons.

Let's come back in a year and see how many mortgages have been issued through that scheme.

Cyrus

Villa05 wrote: »

Think it's been changed to 10%

only for FTB:

Since 1 January 2017: For first-time buyers of principal dwelling homes the limit of 90% LTV applies on the full value of all residential property, so first-time buyers will need a deposit of 10% for any house or apartment, regardless of price.

For non-first-time home-buyers, there is a limit of 80% of LTV on new mortgage lending, whatever the price of the property, so they will need a deposit of 20% of the total purchase price.

theboringfox

LookingFor wrote: »

Which the government is now bypassing :rolleyes:

Anyone earning 50-80K looking to buy a home up to 320K - your taxes are going to help sub-prime borrowers break the rules and outbid you on the market.

Spot on

theboringfox

GingerLily wrote: »

Its ridiculous, you can just ask the bank for a mortgage now for > 5 times your income, the banks will have to refuse you and you can then get this deal.

So so stupid....

Still needs to meet central bank rules. Only focused on if turned down really because of concerns to service interest in stress scenario. Removed here by fix rate for life of loan.

Unreal deal if you can get it.

phunkadelic

Cyrus wrote: »

only for FTB:

Since 1 January 2017: For first-time buyers of principal dwelling homes the limit of 90% LTV applies on the full value of all residential property, so first-time buyers will need a deposit of 10% for any house or apartment, regardless of price.

For non-first-time home-buyers, there is a limit of 80% of LTV on new mortgage lending, whatever the price of the property, so they will need a deposit of 20% of the total purchase price.

Correct, but the bank can have exceptions for 20% of the total loan book value. When does that 20% reset does anyone know? I'm thinking it was Dec 31st, so there will be loads of exceptions to the rules again at the start of the calendar year.

Cuddlesworth

phunkadelic wrote: »

Correct, but the bank can have exceptions for 20% of the total loan book value. When does that 20% reset does anyone know? I'm thinking it was Dec 31st, so there will be loads of exceptions to the rules again at the start of the calendar year.

Start of the year. But I was being offered exceptions right up to the end of the year so I'm not sure if there is a absolute glut of them at the start of the year.

CalRobert

KellyXX wrote: »

I don't cycle for health reasons, so it's buses and taxis only for me I'm afraid. Would be good if there was a train though.

And even if I did, I doubt I'd be able to cycle 90km in an hour.

If you are expecting people to cycle to work, you are seriously limiting the commuting distance, thereforw limiting the commutable city limits.

90 km?? You said you were 8km away. I agree that 90 would be quite long! But maybe we should reevaluate whether one can reasonably expect to have a decent commute and live 90km from their job?

"...I lived 9Km from the station, in a different town.
In Dublin I lived 8KM from work and it took me 1 hour and 20 minutes on average door to door for my commute...."

KellyXX

CalRobert wrote: »

90 km?? You said you were 8km away. I agree that 90 would be quite long! But maybe we should reevaluate whether one can reasonably expect to have a decent commute and live 90km from their job?

"...I lived 9Km from the station, in a different town.
In Dublin I lived 8KM from work and it took me 1 hour and 20 minutes on average door to door for my commute...."

No point reading one of my posts if you want the context. Read back a few more and it will explain my point that I was making.

Pepe LeFrits

Bob24 wrote: »

And also one thing we won’t get away with is that our weather doesn’t encourage cycling. Yes you can get propper gear and all, but rain and/or wind can make it fairly unpleasant. The UK is not that much better of course :-) ... but a few years ago I spent spring working from the south of France and definitely cycled more (both better cycle lanes and dryer weather helped).

For what it's worth there's a perception gap re: cycling in Dublin; people think the likelihood of getting wet is much greater than it is. Dublin isn't any wetter than Amsterdam or Copenhagen and they don't seem to have problems getting people out on their bikes.

ionapaul

I spent a year without a car a few years ago and my typical commute was; cycle from apartment in Grand Canal Dock up the canal to the Charlemont Luas stop, get Luas to Cherrywood, walk 5 minutes to my office. On days when it absolutely lashed I walked to Grand Canal Dock rather than cycle. I honestly could count on one hand the amount of days that year I got really, uncomfortable drenched.

Likewise, my current commute is; walk from home to nearby Luas stop in about three minutes, Luas for ten minutes to Sandyford, walk for about ten minutes to office. Don't drive no matter how wet it is.

It mightn't seem like it after a pretty miserable week weather wise, but our weather (in Dublin anyhow - grew up in Galway city and the weather was admittedly worse!) isn't really that bad. I'd let the lack of good bicycle lanes and the fact that many junctions are dangerous for those on a bike put me off cycling much, much more than any worry about the weather!

As someone mentioned above, I was in Copenhagen a few months ago and the weather was pretty bad for the entire visit yet the cycle lanes were packed and people were making their way around without too much trouble I think, wearing appropriate gear.

That's a little off-topic maybe, apologies - on topic I really hope we've seen the last of the big annual increases in house prices as supply comes on board throughout the country, we are in dangerous territory right now. I'm a homeowner as of 2015 but recognise that higher prices are bad for the country and definitely bad for my own family; might want to move to a bigger house down the line and as prices increase, despite our net worth rising it makes moving to a bigger house much more difficult! It would actually be in my interest for house prices to drop over the long term, would happily take the hit in terms of our equity if it meant a lower deposit and mortgage for a future move.

Bob24

Pepe LeFrits wrote: »

For what it's worth there's a perception gap re: cycling in Dublin; people think the likelihood of getting wet is much greater than it is. Dublin isn't any wetter than Amsterdam or Copenhagen and they don't seem to have problems getting people out on their bikes.

It’s not just rain (I walk to work everyday and it’s not a massive issue indeed). It’s also the humidity and the wind which I (and I think others) find especially unpleasant while cycling. Plus if it indeed rains like mad when it is time to go home and you have your own bike with you you either have to cycle though the rain or leave it somewhere whereas if you’re walking you can always use an alternative transport method with nothing to leave behind. So my view is that if there were better cycle lanes I would probably use Dublin Bike a lot more for relatively short journeys through the central areas of the city. But even with good infrastructure I probably would’t commit to long enough rides on a daily basis in good part due to the weather and having to take care of the bike when the weather is bad. Of course many people might think this is being picky and are already cycling for exemple among the N11, but still many will also thing like me which does make the weather a blocker.

And btw I don’t know about Amsterdam but I was comparing to the South of France :-) (though the problem there is probably heat in the summer months, I was there in Feb-May)

Alkers

Outkast_IRE wrote:

Take the time to write to your TD outlining your concerns. If enough people do it, it can only help, it certainly cant make it worse.

Anyone have a sample letter I can stick my name on? Very annoyed by this scheme, spend the 200m building

LincolnHawk

Simona1986 wrote: »

Anyone have a sample letter I can stick my name on? Very annoyed by this scheme, spend the 200m building

Very annoyed but not that annoyed to write your own letter ;-)

jsd1004

Bob24 wrote: »

Plus while some investors are leaving there are others coming in. And basically they just apply a multiplier to the potential rent to decide how much they are ready to pay for a property. And while rents are two high already, they can still get higher since people have no choice and many still have additional disposable income to squeeze.

Im a cash investor and there is 20-25% gross yields depending. You need to pay cash and work quick. I dont do residential. Student only or to a lessor extent rent a room or Airbnb

Henbabani

any data for January?

handlemaster

What is there left two/three years of price increases. I dont see any pull back coming any time soon. The stock market is a little rattled. .but would need to see 30% drop before we see a knock on affect

Henbabani

another signs of slowdown:

https://www.independent.ie/business/personal-finance/property-mortgages/new-analysis-of-house-prices-shows-significant-slowdown-in-increases-for-first-time-36590464.html

Samuel T. Cogley

Henbabani wrote: »

another signs of slowdown:

https://www.independent.ie/business/personal-finance/property-mortgages/new-analysis-of-house-prices-shows-significant-slowdown-in-increases-for-first-time-36590464.html

Yes in Dublin 4 . Not overly surprising. Look at D12 though - prices in double digits. This is actually one of the positive effects of expensive housing is it drives gentrification - which of course needs controlling in of itself but there are some areas in Dublin that really have been ripe for it for years. Start of the year (winter) is always slow as well.

Edit Sorry five areas of Dublin and 12 regional counties for the double digit increases. I'll bet you D12 is one of them.

theboringfox

Henbabani wrote: »

another signs of slowdown:

https://www.independent.ie/business/personal-finance/property-mortgages/new-analysis-of-house-prices-shows-significant-slowdown-in-increases-for-first-time-36590464.html

I read that in the paper. Slowdown in growth seems to be only in areas such as D2 and D4 where affordability is topping out due to central bank cap on borrowing.

That's good news but the growth is still expected to be quite high across rest of country. Same will happen there in time as affordability caps out growth.

In the paper there was an article by Ronan Lyons about supply. Put together a good argument on why supply is the big issue.

I'd love to see house prices settle back to low single digit growth. Not good for society the way people are getting priced out right now.

Wanderer78

Samuel T. Cogley wrote:

Yes in Dublin 4 . Not overly surprising. Look at D12 though - prices in double digits. This is actually one of the positive effects of expensive housing is it drives gentrification - which of course needs controlling in of itself but there are some areas in Dublin that really have been ripe for it for years. Start of the year (winter) is always slow as well.

So gentrification is good?